| First International Investment Bank Limited |
|
|
|
|
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|
| Annual
Report 2000 |
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|
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| CONTENTS |
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| Company
Information |
|
| Notice
of Meeting |
|
| Directors'
Report |
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| Auditors'
Report |
|
| Balance
Sheet |
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| Profit
& Loss Account |
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| Cash
Flow Statement |
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| Statement
of Changes in Equity |
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| Notes
to the Accounts |
|
| Pattern
of Shareholding |
|
|
|
| COMPANY
INFORMATION |
|
|
| Board
of Directors |
Syed Babar Ali, Chairman |
|
|
Pir Ali Gohar |
|
|
S. Lachlan Hough |
|
|
M. Rashid Zahir |
|
|
Tawfiq A. Husain |
|
|
Nasim Beg |
|
|
A. Saeed Siddiqui,
Managing Director & Chief Executive |
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|
| Company
Secretary |
Syed Zia ul Hasan |
|
|
| Auditors |
|
Messrs. Ford, Rhodes,
Robson, Morrow |
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|
Chartered Accountants |
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|
| Legal
Advisers |
Messrs. Orr, Dignam &
Co. |
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|
Advocates |
|
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|
Messrs. Mohsin Tayebaly
& Co. |
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|
Advocates & Legal
Consultants |
|
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| Bankers |
|
American Express Bank
Ltd. |
|
|
ABN-AMRO Bank N.V. |
|
|
Bank AL Habib Ltd. |
|
|
Citibank, N. A. |
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|
Metropolitan Bank Ltd. |
|
|
Muslim Commercial Bank
Ltd. |
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|
Soneri Bank Ltd. |
|
|
| Registrars |
|
Noble Computer Services
(Pvt.) Ltd. |
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|
14, Banglore Town Housing
Society, |
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|
Main Shahrah-e-Faisal,
Karachi. |
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| Lahore |
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2nd Floor, |
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| Registered
Office |
Babar Ali Foundation
Building, |
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|
308, Upper Mall, Lahore. |
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|
Telephones: (042)
575-3414/16, 571-0597 |
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|
Fax: (042) 571-0598 |
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|
E-mail: fiibl.lhr@
interbank.com.pk |
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| Karachi
Office |
7th Floor, |
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|
Shaheen Commercial
Complex, |
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|
Dr. Ziauddin Ahmed Road,
Karachi. |
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Telephones: (021)
263-9042/46 |
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|
Fax: (021) 263-0678 |
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|
E-mail: fiibl.khi @
interbank.com.pk |
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| Islamabad
Office |
Mezzanine Floor, |
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|
Razia Sharif Plaza, |
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|
90, Blue Area, G / 7,
Islamabad. |
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|
Telephones: (051)
275256/58 |
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|
Fax: (051) 273861 |
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|
E-mail: fiibl.isl @
interbank.com.pk |
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| Universal Access Numbers |
Telephone: 111-234-234 |
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|
Fax : 111-567-567 |
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| Website |
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www. interbank.com.pk |
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| NOTICE
OF THE TENTH ANNUAL GENERAL MEETING |
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| Notice
is hereby given that the Tenth Annual General Meeting of First International
Investment Bank Limited |
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| will
be held at 2nd Floor, Babar All Foundation Building, 308 Upper Mall, Lahore,
on Thursday, November |
|
| 9,
2000 at 10.00 a.m. to transact the following ordinary business and special
business: |
|
|
| ORDINARY
BUSINESS: |
|
|
| 1.
To receive and consider the Accounts of the Company for the twelve months
ended June 30, 2000 |
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| together
with the Directors' and Auditors' Reports thereon. |
|
|
| 2.
To declare a final dividend @ 10% for the year ended June 30, 2000. |
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|
| 3.
To declare issuance of bonus shares from the share premium account in the
proportion of one share |
|
| for
every nine shares held. |
|
|
| 4.
To appoint auditors and to fix their remuneration. M/s Ford, Rhodes, Robson,
Morrow, Chartered |
|
| Accountants,
being eligible offer themselves for re-appointment. |
|
|
| 5.
To elect Directors in accordance with the provisions of section 178 of the
Companies Ordinance, |
|
| 1984
for a term of three years commencing from the date of their retirement. |
|
|
| As
decided by the Board of Directors, the number of Directors to be elected
would be seven. |
|
|
| The
present Directors of the Company will retire at the ensuing General Meeting.
The following persons |
|
| have
filed with the Company notices of their intention to offer themselves for
election as Directors of the |
|
| Company
for a fresh term of three years from the date of holding of this Annual
General Meeting: |
|
|
| 1.
Syed Babar Ali |
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| 2.
Pir Ali Gohar |
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| 3.
Mr. Rashid Zahir |
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| 4.
Mr. Tawfiq A. Husain |
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| 5.
Mr. Nasim Beg |
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| 6.
Mr. A. Saeed Siddiqui |
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| 7.
Mr. Nadeem Karamat |
|
|
| Any
member who seeks to contest election of the office of Director shall file a
notice of his intention along |
|
| with
an affidavit as required under State Bank of Pakistan, BPRD Circular No. 12,
dated June 2, 2000 at |
|
| the
Registered Office in terms of Section 178(3) of the Companies Ordinance 1984,
at least fourteen days |
|
| before
the date of the meeting. |
|
|
| In
terms of the criteria prescribed by the State Bank, association of the
following persons as Director is |
|
| undesirable
and against the public interest: (a) a person who is/has been associated with
any illegal activity, |
|
| especially
relating to banking business; (b) a person who in his individual capacity or
a proprietary concern |
|
| or
any partnership firm or any private limited company or any unlisted public
company or any listed public |
|
| company
(of which he has been a proprietor, partner, director or shareholder), has
been in default of payment |
|
| of
dues owed to any financial institution and/or in default of payment of any
taxes. Furthermore, a person |
|
| is
not permitted to be a Director of more than one financial institution. The
term 'financial institution' will |
|
| include
any bank, investment finance company, venture capital company, housing
finance company, leasing |
|
| company
or modaraba company. |
|
|
| SPECIAL
BUSINESS: |
|
|
| 6.
To consider and if thought fit to approve the remuneration payable to the
Managing Director and Chief |
|
| Executive. |
|
|
| 7.
To transact any other business with the permission of the Chair. |
|
|
|
BY THE ORDER OF THE BOARD |
|
|
| Lahore: |
|
SYED ZIA UL HASAN |
|
| October
18, 2000. |
|
Company Secretary |
|
|
| Notes: |
|
| 1.
The share transfer books of the Company will remain closed from November 2,
2000 to November |
|
| 9,
2000 (both days inclusive). |
|
|
| 2.
A member entitled to attend and vote at the Annual General Meeting is
entitled to appoint a proxy |
|
| in
writing to attend the meeting and to vote on a member's behalf. A proxy need
not be a member |
|
| of
the Company. |
|
|
| 3.
Duly completed form of proxy must be received at the Registered Office of the
Company not later |
|
| than
forty-eight hours before the time appointed for the Meeting. |
|
|
| 4.
Account holders and sub-account holders holding book entry securities of the
Company in the |
|
| Central
Depository Company of Pakistan Limited, who wish to attend the Annual General
Meeting, |
|
| are
requested to bring original National Identity Cards with copies thereof duly
attested by their |
|
| bankers
for identification purposes. |
|
|
|
| DIRECTORS'
REPORT TO THE SHAREHOLDERS |
|
|
| The
Board of Directors of First International Investment Bank Limited (Interbank)
is pleased to present the |
|
| annual
report and audited accounts for the year ended June 30, 2000 to the tenth
Annual General Meeting |
|
| of
the shareholders. |
|
|
| BUSINESS
OPERATIONS |
|
| Interbank
achieved substantial improvement in profit during the year under review.
After-tax profit for the |
|
| year
is Rs. 26.2 million as against Rs. 6.9 million for the previous year. The
improvement in profit is mainly |
|
| due
to increase in income from investments, lease finance, and commission and
fees. |
|
|
| Total
assets declined to Rs. 2.749 billion, from Rs. 3.230 billion last year. This
was mainly on account of |
|
| withdrawal
of foreign currency deposits on their maturity dates, accompanied by
repayment of financing |
|
| and
placements funded by these deposits. Total amount of lease finance, however,
increased to Rs. 339 |
|
| million,
from Rs. 251 million last year. |
|
|
| In
order to diversify our client base, we have decided to market our products
and services more actively to |
|
| individuals
as well as to small and medium enterprises. The InterCar lease facility
launched by us in |
|
| September
1999 was targeted specifically at this segment of the market. |
|
|
| At
the same time, we have continued to meet the needs of our corporate clients
through direct financing, |
|
| syndications,
and TFC issues. In this connection, mention may be made of the TFC issue of
Rs. 500 million |
|
| for
National Development Leasing Corporation, which was advised and arranged by
Interbank in November- |
|
| December
1999. |
|
|
| Our
treasury activities have contributed significantly to income during the year.
This was achieved through |
|
| management
of our liquidity as well as through trading positions within prudent limits.
We have established |
|
| new
relationships with banks and financial institutions, which has enhanced our
ability to take advantage |
|
| of
market opportunities. |
|
|
| We
successfully upgraded our computer hardware and software to meet the Year
2000 problem. The transition |
|
| to
Year 2000 was achieved smoothly, without any disruption at any of our
branches. We have installed a new |
|
| network
operating under Windows NT, which provides high-speed data communication,
enhanced security, |
|
| and
centralised administration of our computer resources. |
|
|
| We
have also taken steps to rationalise our staff strength and operational
expenses, that will reflect on our |
|
| future
profitability. |
|
|
| APPROPRIATIONS |
|
| The
Directors recommend payment of cash dividend of Rs. 1.00 per share of Rs.
10.00 each. |
|
|
| Accordingly,
the following appropriations are being made: |
|
|
| Profit
for the year after taxation |
|
26,200,367 |
|
| Unappropriated
profit brought forward |
|
928,036 |
|
|
---------- |
|
| Available
for appropriation |
|
27,128,403 |
|
| Appropriations: |
|
| Transfer
to special reserve |
|
5,300,000 |
|
| Transfer
to general reserve |
|
3,000,000 |
|
| Proposed
cash dividend of Rs. 1.00 per share |
18,000,000 |
|
|
----------- |
|
| Unappropriated
profit carried forward |
|
828,403 |
|
|
========== |
|
|
| BONUS
SHARES |
|
| The
Directors also recommend issue of bonus shares at the rate of one share for
every nine shares held. |
|
| The
bonus shares would be issued out of the share premium account. |
|
|
| CREDIT
RATING |
|
| Based
on financial results for the year ended June 30, 1999, The Pakistan Credit
Rating Agency (PACRA) |
|
| upgraded
the long-term credit rating of Interbank to A (from A-), while maintaining
the short-term rating of |
|
| A1.
Credit rating of our five-year TFC issue was also upgraded to A+ (from A). |
|
|
| DIRECTORS |
|
| During
the year, Mr. F. S. Aijazuddin retired and was replaced by Mr. A. Saeed
Siddiqui, who has been |
|
| appointed
as the new Managing Director and Chief Executive. |
|
|
| AUDITORS |
|
| The
present auditors Ford, Rhodes, Robson, Morrow, Chartered Accountants, retire
and have offered |
|
| themselves
for re-appointment. |
|
|
| FUTURE |
|
| The
key to our future growth lies in identifying new business opportunities in
the financial services sector |
|
| and
acquiring the professional skills to successfully pursue such opportunities.
We will focus more intensively |
|
| on
widening the range of our products and services, encouraging professional
training and development |
|
| of
our staff at all levels, and maximizing the use of technology in our delivery
systems. We are confident |
|
| that
Interbank will continue to innovate and grow in the years ahead. |
|
|
| ACKNOWLEDGEMENT |
|
| The
Directors thank all members of the staff for their dedication and commitment. |
|
|
| For
and on behalf of the Board |
|
|
|
SYED BABAR ALl |
|
A. SAEED SIDDIQUI |
|
|
Chairman |
|
Managing Director & Chief Executive |
|
|
| Lahore |
|
| October
9, 2000 |
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed balance sheet of FIRST INTERNATIONAL INVESTMENT BANK
LIMITED |
|
| as
at June 30, 2000 and the related profit and loss account, cash flow statement
and statement of changes |
|
| in
equity together with the notes forming part thereof, for the year then ended
and we state that we have |
|
| obtained
all the information and explanations which, to the best of our knowledge and
belief, were necessary |
|
| for
the purposes of our audit. |
|
|
| It
is the responsibility of the company's management to establish and maintain a
system of internal control, |
|
| and
prepare and present the above said statements in conformity with the approved
accounting standards |
|
| and
the requirements of the Companies Ordinance, 1984. Our responsibility is to
express an opinion on |
|
| these
statements based on our audit. |
|
|
| We
conducted our audit in accordance with the auditing standards as applicable
in Pakistan. These standards |
|
| require
that we plan and perform the. audit to obtain reasonable assurance about
whether the above said |
|
| statements
are free of any material misstatement. An audit includes examining, on a test
basis, evidence |
|
| supporting
the amounts and disclosures in the above said statements. An audit also
includes assessing |
|
| the
accounting policies and significant estimates made by management, as well as,
evaluating the overall |
|
| presentation
of the above said statements. We believe that our audit provides a reasonable
basis for our |
|
| opinion
and, after due verification, we report that - |
|
|
| (a)
in our opinion, proper books of accounts have been kept by the company as
required by |
|
| the
Companies Ordinance, 1984; |
|
|
| (b)
in our opinion - |
|
|
| (i)
the balance sheet and profit and loss account together with the notes thereon
have |
|
| been
drawn up in conformity with the Companies Ordinance, 1984, and are in |
|
| agreement
with the books of account and are further in accordance with accounting |
|
| policies
consistently applied; |
|
|
| (ii)
the expenditure incurred during the year was for the purpose of the company's |
|
| business;
and |
|
|
| (iii)
the business conducted, investments made and the expenditure incurred during |
|
| the
year were in accordance with the objects of the company; |
|
|
| (c)
in our opinion and to the best of our information and according to the
explanations given |
|
| to
us, the balance sheet, profit and loss account, cash flow statement and
statement of |
|
| changes
in equity together with the notes forming part thereof conform with approved |
|
| accounting
standards as applicable in Pakistan, and, give the information required by
the |
|
| Companies
Ordinance, 1984, in the manner so required and respectively give a true and |
|
| fair
view of the state of the company's affairs as at June 30, 2000 and of the
profit, its cash |
|
| flows
and changes in equity for the year then ended; and |
|
|
| (d)
in our opinion Zakat deductible at source under the Zakat and Ushr Ordinance,
1980 (XVIII |
|
| of
1980), was deducted by the company and deposited in the Central Zakat Fund
established |
|
| under
section 7 of that Ordinance. |
|
|
| Karachi |
|
FORD, RHODES, ROBSON, MORROW |
|
| September
28, 2000 |
|
Chartered Accountants. |
|
|
|
| BALANCE
SHEET AS AT JUNE 30, 2000 |
|
|
|
|
2000 |
1999 |
|
|
Note |
Rupees |
Rupees |
|
| ASSETS |
|
| NON-CURRENT
ASSETS |
|
|
| Tangible
fixed assets |
|
3 |
8,745,870 |
7,959,389 |
|
| Long-term
investments |
|
4 |
134,462,129 |
209,604,802 |
|
| Long-term
finance |
|
5 |
446,069,654 |
694,681,222 |
|
| Net
investment in lease finance |
|
6 |
229,999,857 |
190,420,472 |
|
| Long-term
demand promissory note |
|
7 |
78,000,000 |
78,000,000 |
|
| Long-term
deposits, prepayments and deferred costs |
8 |
6,282,738 |
8,393,993 |
|
|
| CURRENT
ASSETS |
|
| Finance |
|
9 |
445,641,143 |
315,073,766 |
|
| Net
investment in lease finance |
|
6.3 |
108,718,709 |
60,355,131 |
|
| Bill
receivable |
|
|
-- |
40,000,000 |
|
| Fund
placements with investment banks / other companies |
10 |
512,000,000 |
819,000,000 |
|
| Trading
investments |
|
11 |
380,675,340 |
496,008,573 |
|
| Prepayments
and other receivables |
|
12 |
308,177,220 |
263,310,091 |
|
| Cash
and bank balances |
|
13 |
90,097,480 |
47,678,720 |
|
|
|
---------- |
---------- |
|
|
1,845,309,892 |
2,041,426,281 |
|
|
---------- |
---------- |
|
|
2,748,870,140 |
3,230,486,159 |
|
|
========== |
========== |
|
| EQUITY
AND LIABILITIES |
|
| SHARE
CAPITAL AND RESERVES |
|
| Authorised
capital |
|
| 20,000,000
ordinary shares of Rs.10/- each |
|
200,000,000 |
200,000,000 |
|
|
========== |
========== |
|
| Issued,
subscribed and paid-up capital |
|
14 |
180,000,000 |
180,000,000 |
|
| Reserves |
|
15 |
165,322,403 |
157,122,036 |
|
|
|
---------- |
---------- |
|
|
345,322,403 |
337,122,036 |
|
| NON-CURRENT
LIABILITIES |
|
| Term
finance certificates |
|
16 |
263,584,264 |
301,702,522 |
|
| Long-term
borrowing |
|
17 |
90,490,779 |
108,624,239 |
|
| Deferred
liability - provision for gratuity |
|
|
2,410,631 |
2,241,997 |
|
| Deferred
taxation |
|
|
4,580,000 |
-- |
|
| Long-term
deposits |
|
18 |
686,199,500 |
1,168,562,894 |
|
| Deposits
on lease contracts |
|
19 |
40,620,839 |
19,281,842 |
|
|
| CURRENT
LIABILITIES AND PROVISIONS |
|
| Current
portion of long-term liabilities |
|
20 |
615,846,675 |
491,748,584 |
|
| Short-term
finance |
|
21 |
50,000,000 |
-- |
|
| Short-term
deposits |
|
22 |
568,579,322 |
745,322,961 |
|
| Accrued
expenses and other liabilities |
|
23 |
63,235,727 |
55,879,084 |
|
| Proposed
final dividend |
|
18,000,000 |
-- |
|
|
---------- |
---------- |
|
|
1,315,661,724 |
1,292,950,629 |
|
| COMMITMENTS
AND CONTINGENCIES |
|
24 |
---------- |
---------- |
|
|
2,748,870,140 |
3,230,486,159 |
|
|
========== |
========== |
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
SYED BABAR ALl |
|
A. SAEED SIDDIQUI |
|
|
Chairman |
|
Managing Director & Chief Executive |
|
|
|
| PROFIT
AND LOSS ACCOUNT |
|
| FOR
THE YEAR ENDED JUNE 30, 2000 |
|
|
|
|
|
2000 |
1999 |
|
|
Note |
Rupees |
Rupees |
|
| INCOME |
|
|
| income
from investments |
|
25 |
121,194,783 |
103,584,300 |
|
| Income
from finance provided |
|
|
126,570,108 |
191,711,071 |
|
| Income
from lease finance |
|
|
50,064,676 |
33,836,177 |
|
| Income
from bill receivable |
|
|
1,453,151 |
12,146,994 |
|
| Income
from demand promissory note |
|
|
14,234,000 |
15,710,219 |
|
| Income
from fund placements |
|
|
92,721,220 |
114,561,983 |
|
| Commission
and fees |
|
|
5,129,613 |
3,672,254 |
|
| Other
income |
|
26 |
7,091,934 |
12,447,225 |
|
|
|
---------- |
---------- |
|
|
418,459,485 |
487,670,223 |
|
|
| EXPENDITURE |
|
| Financial
charges |
|
27 |
67,478,924 |
46,518,652 |
|
| Return
on deposits and related costs |
|
|
242,997,159 |
331,164,437 |
|
| Administration
and operating expenses |
|
28 |
68,708,801 |
60,721,903 |
|
| Provision
/ (reversal of provision) for diminution in value |
|
|
|
| of
trading investments |
|
|
2,537,098 |
(1,392,269) |
|
| Provision
for potential lease losses |
|
|
623,515 |
1,019,594 |
|
| Provision
under SBP's NBFIs Regulations against |
|
|
|
| finance
provided |
|
|
4,061,229 |
6,932,778 |
|
| Provision
for diminution in value of long-term quoted |
|
|
|
| Investments |
|
|
-- |
31,797,951 |
|
|
|
---------- |
---------- |
|
|
|
386,406,726 |
476,763,046 |
|
|
|
---------- |
---------- |
|
| Profit
for the year before taxation |
|
|
32,052,759 |
10,907,177 |
|
|
|
|
|
| Taxation
- current |
|
|
2,500,000 |
4,000,000 |
|
| prior years |
|
|
(1,227,608) |
-- |
|
| deferred tax |
|
|
4,580,000 |
-- |
|
|
|
---------- |
---------- |
|
|
|
5,852,392 |
4,000,000 |
|
|
|
---------- |
---------- |
|
| Profit
for the year after taxation |
|
|
26,200,367 |
6,907,177 |
|
|
|
|
|
| Unappropriated
profit brought forward |
|
|
928,036 |
3,420,859 |
|
|
|
---------- |
---------- |
|
| Available
for appropriation |
|
|
27,128,403 |
10,328,036 |
|
| APPROPRIATIONS |
|
|
|
|
| Transfer
to special reserve |
|
15.1 |
5,300,000 |
1,400,000 |
|
| Transfer
to general reserve |
|
|
3,000,000 |
8,000,000 |
|
| Proposed
final dividend @ 10% (1999: @ Nil) |
|
18,000,000 |
-- |
|
|
|
---------- |
---------- |
|
|
|
26,300,000 |
9,400,000 |
|
|
|
---------- |
---------- |
|
| Unappropriated
profit carried forward |
|
|
828,403 |
928,036 |
|
|
|
========== |
========== |
|
| Basic
earnings per share |
|
35 |
1.46 |
0.38 |
|
| The
annexed notes form an integral part of these accounts. |
|
========== |
========== |
|
|
|
SYED BABAR ALl |
|
A. SAEED SIDDIQUI |
|
|
Chairman |
|
Managing Director & Chief Executive, |
|
|
|
| CASH
FLOW STATEMENT |
|
| FOR
THE YEAR ENDED JUNE 30, 2000 |
|
|
|
|
2000 |
1999 |
|
|
Rupees |
Rupees |
|
|
| Cash
flows from operating activities: |
|
| Profit
for the year before taxation |
|
32,052,759 |
10,907,177 |
|
| Adjustments
for: |
|
| Gain
on disposal of fixed assets |
|
(548,188) |
(162,936) |
|
| Exchange
gain |
|
(990,361) |
(3,697,862) |
|
| Deferred
costs |
|
2,192,397 |
1,787,157 |
|
| Depreciation |
|
3,635,308 |
3,362,250 |
|
| Provision
for gratuity |
|
1,367,21 3 |
869,495 |
|
| Provision
/ (reversal of provision) for diminution in value of |
|
|
| trading
investments |
|
2,537,098 |
(1,392,269) |
|
| Provision
for potential lease losses |
|
623,515 |
1,019,594 |
|
| Provision
against finance provided |
|
4,061,229 |
6,932,778 |
|
