| First Habib Modaraba |
|
|
|
|
|
|
|
|
|
| Annual
Report 2000 |
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|
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| CONTENTS |
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| CORPORATE
INFORMATION |
|
| DIRECTORS'
REPORT |
|
| AUDITORS'
REPORT |
|
| BALANCE
SHEET |
|
| PROFIT
AND LOSS ACCOUNT |
|
| STATEMENT
OF CHANGES IN FINANCIAL POSITION |
|
| NOTES
TO THE ACCOUNTS |
|
| PATTERN
OF CERTIFICATE HOLDINGS |
|
|
|
| CORPORATE
INFORMATION |
|
|
| BOARD
OF DIRECTORS |
|
|
| Mr.
Wazir Husain Jafree |
|
| Mr.
Muhammad Shoaib |
|
| Mr. F. H. Mukhi |
|
| Mr.
Abbas Ali Muhammad |
|
| Mr.
S. Shahanshah H. Rizvi |
|
|
| AUDITORS |
|
| Ford,
Rhodes, Robson, Morrow |
|
| Chartered
Accountants |
|
|
| BANKERS |
|
| Askari
Commercial Bank Limited |
|
| Bank
AL Habib Limited |
|
| Faysal
Bank Limited |
|
| Gulf
Commercial Bank Limited |
|
| Habib
Bank AG Zurich |
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| Habib
Bank Limited |
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| Metropolitan
Bank Limited |
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| Soneri
Bank Limited |
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| Union
Bank Limited |
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|
| REGISTERED
OFFICE |
|
| 5th
Floor, Hirani Centre, |
|
| I.
I. Chundrigar Road, |
|
| Karachi. |
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|
| REGISTRAR |
|
| Noble
Computer Services (Pvt) Limited |
|
| 14-Banglore
Town Housing Society, |
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| Shahrah-e-Faisal,
Karachi. |
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|
| REPORT
OF THE DIRECTORS FOR THE YEAR ENDED JUNE 30, 2000 |
|
|
| The
Board of Directors of the Management Company are pleased to present audited
accounts for the year ended 30th June, |
|
| 2000. |
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|
| FINANCIAL
RESULTS |
|
|
|
|
(Rupees in
000) |
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|
|
|
|
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|
Year ended |
Year ended |
|
|
|
June 30, |
June 30, |
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|
2000 |
1999 |
|
|
| Total
Operating Income |
|
|
365,790 |
351,748 |
|
| Total
Operating Expenses |
|
|
287,394 |
278,364 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
78,396 |
73,384 |
|
|
| Less:
Modaraba Co.'s Management Fee |
|
7,127 |
6,671 |
|
|
|
|
------------------ |
------------------ |
|
| Profit
for the year |
|
|
71,269 |
66,713 |
|
|
| Less:-
Provision for Taxation |
|
| Current Year |
|
|
|
-- |
-- |
|
| Prior Year |
|
|
|
2,791 |
1,640 |
|
|
|
|
|
------------------ |
------------------ |
|
|
|
2,791 |
1,640 |
|
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|
------------------ |
------------------ |
|
| Net Profit |
|
68,478 |
65,073 |
|
| Add:
Unappropriated profit B/F |
|
3,572 |
1,913 |
|
|
|
------------------ |
------------------ |
|
| Profit
available for appropriation |
|
72,050 |
66,986 |
|
|
========== |
========== |
|
|
|
| APPROPRIATIONS |
|
| Cash
dividend @ 22.50% (Rs. 1.125 per Certificate of Rs. 5/- each) |
56,700 |
50,400 |
|
| (1999
cash dividend @ 20% i.e. Rs.1/- per certificate of Rs. 5/- each) |
|
|
| Transfer
to statutory reserve @ 10% of the profit (1999 @ 20%) |
6,848 |
13,014 |
|
|
|
|
| Un-appropriated
profit C/F |
|
|
8,502 |
3,572 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
72,050 |
66,986 |
|
|
|
|
========== |
========== |
|
|
|
|
|
| PROFIT
DISTRIBUTION |
|
| The
Directors are pleased to declare a 22.50% cash dividend i.e. Rs. 1.125 |
|
| per
certificate of Rs. 5/-each. |
|
|
| BUSINESS
OPERATION |
|
| The
year under review is a mixture of political and economic uncertainties |
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| resulting
in un-favorable business environment. The financial sector of the |
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| country
is also affected due to declining economic activities and intense |
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| competition
among them. However, due to healthy performance of |
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| agriculture
sector particularly major crops have provided timely support to |
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| our
economy. GDP growth rate improved to 4.8 percent as compared to |
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| last
year of 3.1 percent but slightly lower than the target of 5.0 percent. |
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|
| The
leasing sector also not only experience a general decline in business |
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| but
also faced intense competition from other players in the financial sector. |
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| Profit
margin of leasing companies generally came under pressure. |
|
|
| Your
Management of Modaraba however, due to prudent and vigilant |
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| approach
with adequate business vision has tactfully handled these |
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| business
difficulties and again ended with another good year. The operating |
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| result
for the year under review reflected diligent and consistent efforts of |
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| the
Management. Your Modaraba by the grace of God has been able to |
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| maintain
its growth tempo both in business as well as in asset size inspire |
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| of
declining economic activity. |
|
|
| Fresh
leases have been disbursed amounting to Rs. 361.0 million as |
|
| compared
to last year of Rs. 303.0 million. The gross lease rentals have |
|
| also
increased from 349.0 million to Rs. 363.0 million. Thus the net profit |
|
| has
also increased to Rs. 68.478 million over preceding year's profit of |
|
| Rs.
65.073 million. This performance is attributable to the financial acumen |
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| of
Management of Modaraba having vast experience of fund management. |
|
|
| Alhamdolillah!
so far we have shown gradual and consistent improvement |
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| in
business growth and successfully built-up a quality assets portfolio in |
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| our
Modaraba. This has given good return and excellent recovery with no |
|
| default.
The lease portfolio remains well diversified with investment in almost |
|
| every
major sector of the economy. |
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|
| FUTURE
PROSPECTS |
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| If
we look to future of country's economy there are many areas of concern |
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| such
as slower pace of sick-industry revival, higher inflationary spiral due |
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| to
surge in international oil prices, the depreciation of the rupee, fiscal |
|
| deficit
due to higher debt servicing and price increase of imported inputs. |
|
| In
order to mitigate these risks the government needs to monitor the |
|
| situation
carefully and take corrective and timely measures as there is |
|
| no
shod cuts available to revive the economy. |
|
|
| Your
Modaraba looks into the future with confidence and expects |
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| enhancement
of business activity particularly in industrial sector. We are |
|
| continuing
our efforts to consolidate our position and tap opportunities for |
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| further
business growth. Due to slower industrial activity and shrinkage of |
|
| good
quality corporate entities and intense competition in leasing sector |
|
| posed
new challenges for leasing business. However, your Modaraba |
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| continues
to lay focus on upcoming challenges for further improvements |
|
| of
business in prudent manner. |
|
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| We
remain committed to our certificate holders and Inshallah we will try |
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| to
achieve better result in the coming years. |
|
|
| CREDIT
RATING |
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| Your
Directors are pleased to inform you that based on the financials of |
|
| June
30, 1999, M/s Pakistan Credit Rating Agency (Pvt.) Limited |
|
| (PACRA)
has awarded credit rating of A3. |
|
|
|
| So
far only two modarabas have been placed in "A" category by PACRA |
|
| and
your Modaraba is one of them. Under PACRA's rating definition only |
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| such
modarabas are rated in this category which are considered to be in |
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| outstanding
financial condition with a consistent record of above average |
|
| performance. |
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| "We
bow our head before Almighty Allah for achieving above rating" |
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|
| AUDITORS |
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| The
present auditors M/s. Ford, Rhodes, Robson, Morrow have consented |
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| to
their reappointment for the year ending 30th June, 2001. The Directors |
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| have
confirmed their appointment subject to the required official approval. |
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|
| ACKNOWLEDGEMENT |
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| We
owe our gratitude to the financial institutions, our customers and |
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| lessees
for reposing their trust in the Modaraba. The guidance and |
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| cooperation
of Registrar of Modarabas, Securities and Exchange |
|
| Commission
of Pakistan are acknowledged with thanks. |
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|
| We
also place on record our appreciation for the performance of all staff |
|
| members
who have made it possible to achieve good results in this |
|
| challenging
market. |
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|
For and on behalf of Board of Directors |
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|
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|
Wazir Husain Jafree |
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| Karachi:
November 11, 2000 |
|
Chairman & Chief Executive |
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|
|
| AUDITORS'
REPORT TO THE CERTIFICATE HOLDERS |
|
|
| We
have audited the annexed Balance Sheet as at June 30, 2000 and the related
Profit and Loss Account and Statement |
|
| of
Changes in Financial Position (Cash Flow Statement) together with the notes
to the accounts for the year then ended |
|
| of
First Habib Modaraba which are Modaraba Company's (Habib Modaraba Management
Limited) representation and we |
|
| state
that we have obtained all the information and explanations which we required
and, after due verification thereof, we |
|
| report that: |
|
|
| (a)
In our opinion proper books of account have been kept by the Modaraba Company
in respect of First Habib |
|
| Modaraba
as required by the Modaraba Companies and Modaraba (Floatation and Control)
Ordinance, |
|
| 1980
and Modaraba Companies and Modaraba Rules, 1981; |
|
|
|
|
| (b)
In our opinion, the Balance Sheet and the Profit and Loss Account have been
drawn up in conformity with |
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| the
Modaraba Companies and Modaraba (Floatation and Control) Ordinance, 1980 and
Modaraba |
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| Companies
and Modaraba Rules, 1981; and |
|
|
|
| (c)
In our opinion and to the best of our information and according to the
explanations given to us; |
|
|
|
|
| (i)
the Balance Sheet and the related Profit and Loss Account and Statement of
Changes in |
|
| Financial
Position (Cash Flow Statement) which are in agreement with the books of
account, |
|
| exhibit
respectively a true and fair view of the state of the Modaraba's affairs as
at June 30, 2000 |
|
| and
the profit and the changes in the financial position (cash flow statement)
for the year ended |
|
| on that date; |
|
|
|
|
| (ii)
Zakat deductible at source if any, under the Zakat and Ushr Ordinance, 1980
has been deducted |
|
| by
the Modaraba and deposited in the Central Zakat Fund established under
section 7 of that |
|
| Ordinance; and |
|
|
|
|
|
|
| (iii)
the business conducted, investments made and expenditure incurred by the
Modaraba are in |
|
| accordance
with the objects, terms and conditions for the Modaraba. |
|
|
|
|
Ford, Rhodes, Robson, Morrow |
|
| Karachi:
November 11, 2000 |
|
Chartered Accountants |
|
|
|
| BALANCE
SHEET AS AT JUNE 30, 2000 |
|
|
|
|
2000 |
1999 |
|
|
Note |
Rupees |
Rupees |
|
|
| TANGIBLE
FIXED ASSETS |
|
3 |
|
| Fixed
Assets leased out |
|
|
634,895,760 |
564,642,771 |
|
| Fixed
Assets in own use |
|
|
4,656,561 |
235,938 |
|
|
|
------------------ |
------------------ |
|
|
|
639,552,321 |
564,878,709 |
|
|
|
|
| LONG
TERM ADVANCES AND DEPOSIT |
4 |
539,338 |
823,359 |
|
|
|
|
|
|
| CURRENT
ASSETS |
|
|
|
| Short
Term Investments |
|
5 |
36,807,339 |
28,755,373 |
|
| Advances,
prepayments and other receivables |
6 |
1,241,792 |
703,142 |
|
| Lease
rentals receivable - considered good |
|
2,246,447 |
2,754,364 |
|
| Cash
and bank balances |
|
7 |
6,653,846 |
1,467,716 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
46,949,424 |
33,680,595 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
687,041,083 |
599,382,663 |
|
|
|
|
========== |
========== |
|
| CAPITAL
AND RESERVES |
|
|
|
| CERTIFICATE
CAPITAL: |
|
| Authorised: |
|
|
| 60,000,000
(1999: 60,000,000) certificates of Rs. 5/- each |
300,000,000 |
300,000,000 |
|
|
|
========== |
========== |
|
|
|
|
| Issued,
subscribed and paid-up |
|
8 |
252,000,000 |
252,000,000 |
|
| Reserves |
|
9 |
105,006,442 |
93,227,883 |
|
|
------------------ |
------------------ |
|
| CERTIFICATE
HOLDERS' EQUITY |
|
357,006,442 |
345,227,883 |
|
| DEFERRED
LIABILITIES |
|
10 |
56,071,151 |
43,380,309 |
|
|
|
|
|
|
| CURRENT
LIABILITIES |
|
|
| Finance
arrangements |
|
11 |
71,000,000 |
124,000,000 |
|
| Short-term
redeemable capital |
|
12 |
112,000,000 |
-- |
|
| Lessees'
security deposits-current portion |
|
13,422,625 |
18,626,728 |
|
| Creditors
and accrued liabilities |
|
13 |
14,630,294 |
14,492,423 |
|
| Provision
for taxation |
|
|
2,128,247 |
378,948 |
|
| Unclaimed
profit distribution |
|
|
4,082,324 |
2,876,372 |
|
| Proposed
profit distribution |
|
|
56,700,000 |
50,400,000 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
273,963,490 |
210,774,471 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
687,041,083 |
599,382,663 |
|
|
|
|
========== |
========== |
|
|
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
Sd/- |
|
Sd/- |
|
Sd/- |
|
|
Chief Executive |
|
Director |
|
Director |
|
|
|
| PROFIT
AND LOSS ACCOUNT FOR THE YEAR ENDED JUNE 30, 2000 |
|
|
|
|
2000 |
1999 |
|
|
Note |
Rupees |
Rupees |
|
|
|
|
| INCOME |
|
| Lease rentals |
|
|
363,184,540 |
348,921,197 |
|
| Other income |
|
14 |
2,605,862 |
2,827,116 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
365,790,402 |
351,748,313 |
|
|
|
|
|
| EXPENSES |
|
|
|
| Depreciation
on fixed assets leased out |
|
252,358,480 |
245,414,905 |
|
| Financial
charges |
|
15 |
20,645,967 |
21,374,449 |
|
| Other expenses |
|
16 |
14,385,400 |
11,412,449 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
287,389,847 |
278,201,803 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
78,400,555 |
73,546,510 |
|
| Diminution
in value of investments written off |
|
(3,160) |
(6,671,392) |
|
|
|
|
------------------ |
------------------ |
|
| Profit
before management fee |
|
|
78,397,395 |
73,385,316 |
|
| Modaraba
company's management fee |
|
(7,127,036) |
(6,671,392) |
|
|
------------------ |
------------------ |
|
| Profit
before taxation |
|
71,270,359 |
66,713,924 |
|
|
|
|
|
| TAXATION |
|
| Current |
|
|
-- |
-- |
|
| Prior year's |
|
|
2,791,800 |
1,640,212 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
2,791,800 |
1,640,212 |
|
|
|
|
------------------ |
------------------ |
|
| Profit
after taxation |
|
|
68,478,559 |
65,073,712 |
|
| Unappropriated
profit brought forward |
|
3,571,593 |
1,912,623 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
72,050,152 |
66,986,335 |
|
|
| APPROPRIATIONS |
|
| Proposed
profit distribution @ 22.50% (1999: 20%) |
|
56,700,000 |
50,400,000 |
|
|
| Transfer
to statutory reserve @ 10% of the profit (1999: @ 20%) |
|
| as
per requirement of Prudential Regulations for Modarabas |
6,847,856 |
13,014,742 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
63,547,856 |
63,414,742 |
|
|
|
|
------------------ |
------------------ |
|
| Unappropriated
profit carried forward |
|
8,502,296 |
3,571,593 |
|
|
|
|
========== |
========== |
|
| EARNINGS
PER CERTIFICATE |
|
|
1.36 |
1.29 |
|
|
|
|
========== |
========== |
|
|
|
|
| The
annexed notes form integral part of these accounts. |
|
|
|
Sd/- |
|
Sd/- |
|
Sd/- |
|
|
Chief Executive |
|
Director |
|
Director |
|
|
|
| STATEMENT
OF CHANGES IN FINANCIAL POSITION (CASH FLOW STATEMENT) |
|
| FOR
THE YEAR ENDED JUNE 30, 2000 |
|
|
|
|
2000 |
1999 |
|
|
|
Rupees |
Rupees |
|
|
| CASH
FLOWS FROM OPERATING ACTIVITIES |
|
| Profit
before taxation |
|
|
71,270,359 |
66,713,924 |
|
| Adjustments
for: |
|
|
|
|
| Profit
on disposal of fixed assets |
|
|
|
|
| Leased out |
|
|
(1,026,155) |
(1,638,334) |
|
| In own use |
|
|
(34,755) |
-- |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
(1,060,910) |
(1,638,334) |
|
|
|
|
| Depreciation
- fixed assets leased out |
|
252,358,480 |
245,414,905 |
|
| - fixed assets in own
use |
|
1,454,257 |
404,511 |
|
|
|
|
|
|
| Provision
for gratuity |
|
|
314,765 |
214,265 |
|
| Profit
on PLS term deposit account |
|
(145,720) |
(8,987) |
|
| Dividend
income |
|
|
(579,360) |
(34,097) |
|
|
| Financial
charges on: |
|
| Musharika |
|
19,173,031 |
20,474,507 |
|
| Short-term
redeemable capital |
|
1,422,623 |
-- |
|
| Morabaha |
|
-- |
843,904 |
|
|
|
------------------ |
------------------ |
|
|
|
|
20,595,654 |
21,318,411 |
|
| Operating
profit before changes in operating assets |
344,207,525 |
332,384,598 |
|
|
|
|
|
|
| Movement
in working capital: |
|
|
| (Increase)/decrease
in current assets: |
|
| Shod
term investments |
|
|
(8,051,966) |
(4,880,178) |
|
| Advances,
prepayments and other receivables |
|
(552,150) |
(424,892) |
|
| Rentals
receivable |
|
|
507,917 |
(1,385,966) |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
(8,096,199) |
(6,691,036) |
|
|
| Increase/(decrease)
in current liabilities |
|
58,532,773 |
(6,193,164) |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
50,436,574 |
(12,884,200) |
|
|
|
|
------------------ |
------------------ |
|
| Cash
generated from operations |
|
|
394,644,099 |
319,500,398 |
|
|
|
|
|
|
| Income-tax paid |
|
|
(1,042,501) |
(5,947,206) |
|
| Financial
charges paid |
|
|
(19,990,556) |
(21,442,309) |
|
|
|
|
------------------ |
------------------ |
|
| Net
cash generated from operating activities (A) |
|
373,611,042 |
292,110,883 |
|
|
|
|
========== |
========== |
|
|
|
|
|
|
| CASH
FLOWS FROM INVESTING ACTIVITIES |
|
| Purchase
of fixed assets in own use |
|
(5,902,185) |
(123,825) |
|
| Purchase
of fixed assets leased out |
|
(361,885,353) |
(303,290,054) |
|
| Proceeds
from disposal of fixed assets leased out |
|
40,300,039 |
21,759,309 |
|
| Proceeds
from disposal of fixed assets in own use |
|
62,060 |
-- |
|
| Long-term
advances and deposit |
|
|
284,021 |
(602,188) |
|
| Dividend
received |
|
|
592,860 |
52,908 |
|
| Profit
on PLS term deposit account |
|
145,720 |
8,987 |
|
|
|
|
------------------ |
------------------ |
|
| Net
cash outflow from investing activities (B) |
|
(326,402,838) |
(282,194,663) |
|
|
|
|
========== |
========== |
|
|
| CASH
FLOWS FROM FINANCING ACTIVITIES |
|
| Dividend paid |
|
(49,194,048) |
(18,327,196) |
|
| Lessees'
security deposits: |
|
|
|
|
|
|
|
| Refunded |
|
(19,264,280) |
(8,708,087) |
|
| Net
lessees' security deposits |
|
7,171,974 |
9,068,102 |
|
|
------------------ |
------------------ |
|
| Net
cash (outflow) from financing activities (c) |
|
(42,022,074) |
(9,259,094) |
|
|
|
|
========== |
========== |
|
|
| NET
INCREASE/(DECREASE) IN CASH AND |
|
5,186,130 |
666,926 |
|
| CASH
EQUIVALENTS (A+B+C) |
|
|
| CASH
AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR |
1,467,716 |
810,790 |
|
|
|
|
------------------ |
------------------ |
|
| CASH
AND CASH EQUIVALENTS AT THE END OF THE YEAR |
6,653,846 |
1,467,716 |
|
|
========== |
========== |
|
|
|
|
|
Sd/- |
|
Sd/- |
|
Sd/- |
|
|
Chief Executive |
|
Director |
|
Director |
|
|
|
| NOTES
TO THE ACCOUNTS FOR THE YEAR ENDED JUNE 30, 2000 |
|
|
| 1.
STATUS AND NATURE OF BUSINESS |
|
| The
First Habib Modaraba is a perpetual, multi-purpose modaraba floated and
managed by Habib Modaraba |
|
| Management
Limited and is listed on the stock exchanges of Pakistan. The modaraba is
engaged in the business of |
|
| leasing,
musharika, morabaha financing and other related business, without involving
the element of riba (interest). |
|
|
| 2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
|
|
| 2.1
Accounting convention |
|
| These
accounts have been prepared under the historical cost convention. |
|
|
| 2.2 Investments |
|
| Investments
are stated at lower of cost or market value calculated on individual basis. |
|
| Profit
or loss on sale of investment is accounted for in the year in which it
arises. |
|
|
| 2.3
Tangible fixed assets |
|
|
| (a)
Fixed assets leased out |
|
