| First IBL Modaraba |
|
|
|
|
|
|
|
|
| Annual
Report 2000 |
|
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|
| CONTENTS |
|
|
|
| Corporate
Information |
|
| Directors'
Report |
|
| Auditors'
Report to the Certificate Holders |
|
| Balance Sheet |
|
|
| Profit
and Loss Account |
|
| Statement
of Changes in Financial Position (Cash Flow Statement) |
|
| Notes
to the Accounts |
|
| Pattern
of Certificate Holding |
|
|
|
| CORPORATE
INFORMATION |
|
|
| Modaraba
Company |
IBL Modaraba Management
(Private) Limited |
|
|
| Board
of Directors |
|
| Chief Executive |
|
Inayat Ismail |
|
| Director |
|
Chisty B.S. Mujahid |
|
| Director |
|
Arshad Abdulla |
|
|
|
| Company
Secretary |
Masood Anwer Khan |
|
|
|
| Auditors |
|
Daudally, Lalani &
Co. |
|
|
|
Chartered Accountants |
|
|
|
| Bankers |
|
Muslim Commercial Bank
Ltd. |
|
|
Citibank, N.A. |
|
|
United Bank Ltd. |
|
|
Crescent Investment Bank
Ltd. |
|
|
Habib Bank Ltd. |
|
|
Prime Commercial Bank
Ltd. |
|
|
National Bank of
Pakistan. |
|
|
Platinium Commercial Bank
Ltd. |
|
|
Bolan Bank Limited. |
|
|
| Registrar |
|
Khalid, Majid, Husain,
Rahman |
|
|
Chartered Accountants |
|
|
1st Floor, Modern Motors
House, |
|
|
Beaumont Road, Karachi. |
|
|
| Registered
Office |
First Floor, N.I.C.
Building |
|
|
Abbasi Shaheed Road, |
|
|
Karachi. |
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|
|
| DIRECTORS'
REPORT |
|
|
| The
Board of Directors of IBL Modaraba Management (Pvt.) Ltd. is pleased to
present the 10th Annual |
|
| Report
of First IBL Modaraba with the audited accounts for the year ended 30th June
2000. |
|
|
| FINANCIAL
RESULTS: |
|
Rs. in
"000" |
|
|
2000 |
1999 |
|
| Gross revenue |
|
35,565 |
28,965 |
|
|
------------ |
------------ |
|
| Operating profit |
|
14,128 |
8,317 |
|
| Net
profit for the period |
|
14,841 |
12,751 |
|
| Un-appropriated
profit |
|
| Brought
forward |
|
463 |
1,950 |
|
|
------------ |
------------ |
|
| Transfer
to statutory reserves |
|
1,484 |
2,550 |
|
| Profit
distribution |
|
12,272 |
11,688 |
|
| Un-appropriated
profit carried forward |
|
1,548 |
463 |
|
|
| ECONOMY: |
|
| Symptoms
of modest revival of the economy are visible in agriculture and textile
sectors. The Government |
|
| is
still faced with major challenges of restoring investors' confidence to
achieve the growth on a sustainable |
|
| basis.
During the financial year ending June 2000, the GDP has shown a growth of 4.5
percent as |
|
| compare
to growth of 3.2 percent over last year. Bumper crops of rice, cotton and
wheat were the main |
|
| contributors
for 1.3 percent increase in GDP. Inflation figure posted a decline of 2.3
percent over the |
|
| last year. |
|
|
| However,
the year 2000 has been an exceptionally challenging year. Pakistan remain as
debt-ridden |
|
| as
ever. With the economy failing to revitalize meaningfully, the indebtedness
is likely to increase. The |
|
| country
remains desperate for direct foreign investment to retain a modicum of
legitimacy in the world's |
|
| capital market. |
|
|
| REVIEW
OF OPERATION: |
|
| Despite
adverse economic and trading climate that continued during the year, we are
pleased to report |
|
| that,
by the grace of Almighty Allah, your Modaraba maintained the reasonable
growth pattern. The |
|
| operating
profit increased from Rs. 28.96 million last year to Rs. 35.56 million during
the year under |
|
| review.
Posting a respectable growth of 18.5 percent. Modaraba also managed to earn
net profit of Rs. |
|
| 14.84
million as compared to last year's net profit of Rs. 12.75 million,
reflecting an increase of 14 percent |
|
| over 1999. |
|
|
| Owing
to the lower rates of leasing business, your Modaraba concentrated more on
Musharika investments. |
|
| During
the year under review, Musharika investment yielded better return as compared
to leasing |
|
| investment,
hence improving the profitability. |
|
|
| DISTRIBUTION: |
|
| The
Board has approved a final Dividend for the year ended June 30, 2000 at the
rate of 10.5%, |
|
| i.e.,
Re. 1.05 per certificate of Rs. 10/- each. |
|
|
| FUTURE
PERSPECTIVE: |
|
| Future
prospects of your Modaraba by and large depend on general economic
conditions. The Government |
|
| is
trying to make the investment environment more conducive for industrial
sector, which will allow the |
|
| industrial
sector to make its due contribution to the economy. The anticipated economic
growth will have |
|
| spillover
effect on the financial sector. |
|
|
| EARNING
PER CERTIFICATE: |
|
| Yield
on Modaraba certificate is calculated at Rs. 1.27 compared to Rs. 1.09 in the
preceding |
|
| year. |
|
|
| AUDITORS: |
|
| The
present auditors, M/s. Daudally Lalani & Co. Chartered Accountants, being
due for retirement, have |
|
| offered
themselves for re- appointment for the year ending June 30th, 2001. This has
been confirmed |
|
| by
the Board of Directors, subject to the approval of Registrar of Modaraba
Companies and Modarabas. |
|
|
| ACKNOWLEDGEMENT: |
|
| The
directors wish to place on record their appreciation and thanks to
certificate holders for their continued |
|
| confidence
in the Modaraba. We are also thankful to the authorities for their guidance
and to the members |
|
| of
management and staff for their dedication and hard work. May Allah bless us
in our efforts. A' meen! |
|
|
|
On Behalf of Board |
|
| Karachi:
December 14, 2000 |
|
Chief Executive |
|
|
|
| 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 ended June 30, 2000 of FIRST IBL MODARABA which are Modaraba
Company's |
|
| [IBL
Modaraba Management (Private) 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 IBL 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 the Modaraba Companies and Modaraba (Floatation and Control) |
|
| Ordinance,
1980, and Modaraba 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 Modaraba's affairs
as |
|
| at
June 30, 2000 and the Profit and Changes in Financial Position (cash flows)
for the |
|
| year
then ended; |
|
|
| ii)
zakat deductible at source 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 the expenditure incurred by the
Modaraba |
|
| are
in accordance with the objects, terms and conditions of the Modaraba. |
|
|
| DAUDALLY,
LALANI & CO. |
|
| CHARTERED
ACCOUNTANTS |
|
|
| KARACHI:
December 14, 2000 |
|
|
|
| BALANCE
SHEET AS AT JUNE 30, 2000 |
|
|
|
Note |
2000 |
1999 |
|
|
|
Rupees |
Rupees |
|
| CAPITAL
AND RESERVES |
|
| CAPITAL |
|
| Authorised |
|
| 20,000,000(1999:20,000,000) |
|
| modaraba
certificates of Rs.10/- each |
|
200,000,000 |
200,000,000 |
|
|
----------- |
----------- |
|
| Issued,
subscribed and paid up capital |
|
3 |
116,875,000 |
116,875,000 |
|
| Statutory
reserve |
|
4 |
14,297,065 |
12,812,972 |
|
| Unappropriated
profits |
|
4 |
1,548,120 |
463,156 |
|
|
|
----------- |
----------- |
|
|
132,720,185 |
130,151,128 |
|
|
| SECURITY
DEPOSITS |
|
168,720 |
258,720 |
|
|
| CURRENT
LIABILITIES |
|
| Musharika
arrangements |
|
5 |
125,971,047 |
55,827,600 |
|
| Creditors,
accrued and other liabilities |
|
6 |
10,341,562 |
11,456,101 |
|
| Due
to management company |
|
1,900,330 |
1,500,928 |
|
| Provision
for taxation |
|
2,061,530 |
2,161,530 |
|
| Profit
distribution payable |
|
12,271,875 |
11,687,500 |
|
|
----------- |
----------- |
|
|
152,546,344 |
82,633,659 |
|
|
----------- |
----------- |
|
|
285,435,249 |
213,043,507 |
|
|
========== |
========== |
|
| TANGIBLE
FIXED ASSETS |
|
| Assets
in own use |
|
7 |
85,139 |
361,221 |
|
| Assets
leased out |
|
8 |
887,360 |
368,378 |
|
|
|
----------- |
----------- |
|
|
|
972,499 |
729,599 |
|
|
|
|
|
| LONG
TERM DEPOSITS |
|
|
71,900 |
71,900 |
|
| LONG
TERM MORABAHA ARRANGEMENT |
|
9 |
-- |
3,898,932 |
|
| CURRENT
ASSETS |
|
|
----------- |
----------- |
|
| Trade
debtors - unsecured, considered good |
|
|
34,575,918 |
46,325,674 |
|
| Current
maturity of long term |
|
|
|
|
| morabaha
arrangement |
|
9 |
-- |
15,309,564 |
|
| Marketable
securities of quoted companies |
|
|
|
|
| and modarabas |
|
10 |
34,358,934 |
9,060,039 |
|
| Musharika
arrangements |
|
11 |
188,093,475 |
77,016,117 |
|
| Accrued profit |
|
12 |
15,443,899 |
23,952,694 |
|
| Advances,
deposits and prepayments |
|
13 |
326,692 |
345,563 |
|
| Other
receivables |
|
14 |
10,452,342 |
7,559,253 |
|
| Cash
and bank balances |
|
15 |
1,139,590 |
28,774,172 |
|
|
|
----------- |
----------- |
|
|
284,390,850 |
208,343,076 |
|
|
----------- |
----------- |
|
|
285,435,249 |
213,043,507 |
|
|
========== |
========== |
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
Chief Executive |
|
Director |
|
Director |
|
|
IBL Modaraba Management |
|
IBL Modaraba Management |
|
IBL Modaraba Management |
|
|
( Private ) Limited |
|
( Private ) Limited |
|
( Private ) Limited |
|
|
|
| PROFIT
AND LOSS ACCOUNT |
|
| FOR
THE YEAR ENDED JUNE 30, 2000 |
|
|
|
|
Note |
2000 |
1999 |
|
|
|
Rupees |
Rupees |
|
| OPERATING
INCOME / (LOSS) |
|
| Musharika
profit |
|
26,128,026 |
17,266,272 |
|
| Morabaha
profit |
|
3,601,012 |
863,014 |
|
| Gain/(loss)
on sale of marketable securities |
|
454,127 |
(5,862,120) |
|
| Dividend
income |
|
2,138,120 |
1,316,236 |
|
| Lease rentals |
|
111,390 |
1,249,596 |
|
| Other income |
|
16 |
3,132,551 |
14,132,393 |
|
|
|
----------- |
----------- |
|
|
35,565,226 |
28,965,391 |
|
| OPERATING
EXPENSES |
|
|
|
| Administrative
expenses |
|
17 |
6,843,553 |
4,211,423 |
|
| Financial
charges |
|
18 |
14,497,233 |
15,298,250 |
|
| Amortization
of leased assets |
|
96,018 |
1,139,145 |
|
|
----------- |
----------- |
|
|
21,436,804 |
20,648,818 |
|
|
----------- |
----------- |
|
| Operating profit |
|
14,128,422 |
8,316,573 |
|
|
|
|
| Reversal
of provision for diminution |
|
|
|
| in
the value of investments |
|
10 |
2,611,462 |
6,207,451 |
|
| Provision
for doubtful lease rentals |
|
(249,960) |
(498,377) |
|
|
----------- |
----------- |
|
|
2,361,502 |
5,709,074 |
|
|
----------- |
----------- |
|
|
16,489,924 |
14,025,647 |
|
|
|
|
| Modaraba
Company's management fee |
|
(1,648,922) |
(1,275,059) |
|
|
----------- |
----------- |
|
| Profit
before taxation |
|
14,840,932 |
12,750,588 |
|
|
|
|
| Taxation |
|
19 |
-- |
-- |
|
|
|
----------- |
----------- |
|
| Profit
after taxation |
|
14,840,932 |
12,750,588 |
|
|
|
|
| Unappropriated
profit brought forward |
|
463,156 |
1,950,185 |
|
|
----------- |
----------- |
|
| Profit
available for appropriations |
|
15,304,088 |
14,700,773 |
|
|
|
|
| APPROPRIATIONS |
|
|
|
| Profit
distribution @ 10.5% (1999: 10%) |
|
(12,271,875) |
(11,687,500) |
|
| Transfer
to statutory reserve |
|
(1,484,093) |
(2,550,117 |
|
|
----------- |
----------- |
|
|
(13,755,968) |
(14,237,617) |
|
|
----------- |
----------- |
|
| Unappropriated
profit carried forward |
|
1,548,120 |
463,156 |
|
|
========== |
========== |
|
| Earning
per certificate - Basic and diluted |
|
20 |
1.27 |
1.09 |
|
|
========== |
========== |
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
Chief Executive |
|
Director |
|
Director |
|
|
IBL Modaraba Management |
|
IBL Modaraba Management |
|
IBL Modaraba Management |
|
|
( Private ) Limited |
|
( Private ) Limited |
|
( Private ) Limited |
|
|
|
|
| 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 |
|
14,840,932 |
12,750,588 |
|
| Adjustment for: |
|
|
|
| Depreciation |
|
291,281 |
434,970 |
|
| Amortization
on assets leased out |
|
96,018 |
1,139,145 |
|
| Gain
due to adjustment in value of investments |
|
(2,611,462) |
(6,207,451) |
|
| Provision
for doubtful debts |
|
249,960 |
498,377 |
|
| Reversal
of provision for diminution in value of investments |
|
(454,127) |
5,862,120 |
|
| Gain
on disposal of fixed assets |
|
(312,199) |
(137,065) |
|
| Dividend
Income |
|
(2,138,120) |
(1,316,236) |
|
| Financial
charges |
|
14,497,233 |
15,298,250 |
|
|
----------- |
----------- |
|
| Operating
profit before changes in working capital |
|
24,459,516 |
28,322,698 |
|
|
|
|
| Increase
in current assets |
|
|
|
| Trade debtors |
|
11,749,756 |
11,943,392 |
|
| Investment
in marketable securities |
|
(22,233,306) |
(598,222) |
|
| Musharika
arrangements |
|
(111,077,358) |
(65,527,328) |
|
| Accrued profit |
|
8,508,795 |
(13,361,691 ) |
|
| Advances,
deposits, prepayments |
|
31,806 |
(11,715) |
|
| Other
receivables |
|
(3,151,933) |
(3,988,173) |
|
|
----------- |
----------- |
|
|
(116,172,240 |
(71,543,737) |
|
| Increase
in current liabilities |
|
|
|
| Musharika
arrangements |
|
70,143,447 |
25,146,695 |
|
| Creditors,
accrued & other liabilities |
|
1,444,467 |
(132,028) |
|
| Due
to management company |
|
399,402 |
(3,906,404) |
|
|
----------- |
----------- |
|
|
71,987,316 |
21,108,263 |
|
|
----------- |
----------- |
|
| Cash
used in operations |
|
(19,725,408) |
(22,112,776) |
|
|
|
|
| Income tax paid |
|
(112,935) |
(3,721,215) |
|
| Financial
charges paid |
|
(17,279,680) |
(8,490,351) |
|
|
----------- |
----------- |
|
| Net
cash used in operating activities |
|
(37,118,023) |
(34,324,342) |
|
|
|
|
| CASH
FLOWS FROM INVESTING ACTIVITIES |
|
|
|
| Purchase
of assets in own use |
|
(879,000) |
(147,000) |
|
| Proceeds
from sale of fixed assets |
|
561,000 |
2,143,539 |
|
| Proceeds
from long term morabaha arrangement |
|
19,208,496 |
(616,860) |
|
| Long
term deposits |
|
-- |
151,859 |
|
| Dividend
received |
|
2,147,004 |
1,574,839 |
|
|
----------- |
----------- |
|
| Net
cash generated from investing activities |
|
21,037,500 |
3,106,377 |
|
|
|
|
| CASH
FLOWS FROM FINANCING ACTIVITIES |
|
|
|
| Paid
back obligation under finance lease |
|
-- |
(1,752,573) |
|
| Security
deposit paid |
|
(90,000) |
(397,366) |
|
| Profit
distribution paid |
|
(11,464,059) |
(193,180) |
|
|
----------- |
----------- |
|
| Net
cash used in financing activities |
|
(11,554,059) |
2,343,119) |
|
|
----------- |
----------- |
|
| Net
decrease in cash and cash equivalents |
|
(27,634,582) |
(33,561,084) |
|
| Cash
and cash equivalents at the beginning of the year |
|
28,774,172 |
62,335,256 |
|
|
----------- |
----------- |
|
| Cash
and cash equivalents at the end of the year |
|
1,139,590 |
28,774,172 |
|
|
========== |
========== |
|
|
|
Chief Executive |
|
Director |
|
Director |
|
|
IBL Modaraba Management |
|
IBL Modaraba Management |
|
IBL Modaraba Management |
|
|
( Private ) Limited |
|
( Private ) Limited |
|
( Private ) Limited |
|
|
|
|
| NOTES
TO THE ACCOUNTS |
|
| FOR
THE YEAR ENDED JUNE 30, 2000 |
|
|
| 1.
LEGAL STATUS AND NATURE OF BUSINESS |
|
| First
IBL Modaraba is registered under the Modaraba Companies and Modaraba
(Floatation |
|
| and
Control) Ordinance, 1980 and the rules framed thereunder and is managed by
IBL |
|
| Modaraba
Management (Private) Limited, a company incorporated in Pakistan. The |
|
| Modaraba
is perpetual and multi-purpose, engaged in the business of morabaha,
operating |
|
| lease,
musharika, trading, investment in marketable securities and other related
business. |
|
| The
Modaraba is listed on Karachi, Lahore and Islamabad Stock Exchanges. |
|
|
| 2.
SIGNIFICANT ACCOUNTING POLICIES |
|
| 2.1
Basis for preparation of the accounts |
|
| These
accounts have been prepared in compliance with the requirements of |
|
| Modaraba
(Floatation and Control) Ordinance, 1980 and International Accounting |
|
| Standards
as adopted by the Institute of Chartered Accountants of Pakistan which |
|
| are
applicable to the Modaraba. |
|
|
| 2.2
Overall valuation policy |
|
| These
accounts have been prepared under the historical cost convention. |
|
|
| 2.3
Fixed assets and depreciation. |
|
| These
are stated at cost less accumulated depreciation. Depreciation is charged |
|
| to
income applying the straight-line method, whereby the cost of an asset is
written |
|
| off
over its estimated useful life. Full year's depreciation is charged on
additions |
|
| while
no depreciation is charged on assets disposed off during the year. |
|
|
| Major
repairs and renewals are capitalized. Maintenance and normal repairs are |
|
| charged
to income as and when incurred. Gain or loss, if any, on disposal of fixed |
|
| assets
is included in profit and loss account currently. |
|
|
| 2.3.1
Assets leased out and amortization |
|
| Leased
assets are stated at cost less accumulated amortization. Amortization is |
|
| charged
to profit and loss account applying the annuity method, whereby the |
|
| original
cost less residual value of assets is amortized over the lease period. |
|
|
| Gain
or loss on disposal of assets leased out is included in profit and loss
account |
|
| currently. |
|
|
| 2.3.2
Leased assets |
|
| Assets
acquired under finance lease are included in fixed assets at present value |
|
| of
minimum lease payments. Financial charges are calculated at the markup |
|
| rate
implicit in the lease and charged to profit and loss account. |
|
|
| 2.4
Rates of exchange |
|
| Transactions
in foreign currencies are converted into Pak rupees at the rates of exchange |
|
| ruling
on the date of transactions. Assets and liabilities in foreign currencies are
translated |
|
| into
Pak rupees at the rate of exchange ruling at the balance sheet date, while
those |
|
| covered
under forward exchange contracts are valued at the contracted rates. |
|
|
| Exchange
gains and losses are included in income currently |
|
|
| 2.5
Trade debts and other receivables |
|
| Debts
considered irrecoverable are written off and provision is made against those |
|
| considered
doubtful of recovery in accordance with Prudential Regulations issued by |
|
| Securities
and Exchange Commission of Pakistan. |
|
|
| 2.6
Trading stock |
|
| Trading
stock is valued at lower of cost or market value. Goods in transit are stated
at |
|
| invoice
value plus other charges paid thereon. |
|
|
| 2.7 Investment |
|
| Long
term investments are valued at cost less provision for permanent diminution
in the |
|
| value
of investments. |
|
|
| Short
term marketable securities are valued at lower of average cost or market
value on |
|
| an
aggregate portfolio basis, in total, and the resulting diminution in value,
if any, is |
|
| charged
to profit and loss account. The provision for diminution in value is reversed
to |
|
| the
extent of subsequent improvement in the value of marketable securities. |
|
|
| Profit
or loss on sale of investment is accounted for in the year in which it
arises. |
|
|
| 2.8
Revenue recognition |
|
| Profit
on sale of goods is recognized on dispatch of goods to customer. |
|
|
| Dividend
income is recognized when right is established which usually coincide with
the |
|
| date
of book closure of the entities declaring the dividends. |
|
|
| Profit
on morabaha and musharika arrangements are recognized on the accrual basis, |
|
