| Jahangir Siddiqui Investment Bank Limited |
|
|
|
|
|
| Annual
Report 2000 |
|
|
|
| CONTENTS |
|
|
| Company
information |
|
| Notice
of Meeting |
|
| Directors'
Report to the Shareholders |
|
| Auditors'
Report to the Members |
|
| Balance Sheet |
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|
| Profit
and Loss Account |
|
| Cash
Flow Statement |
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| Notes
to the Accounts |
|
| Pattern
of Shareholding |
|
|
|
| COMPANY
INFORMATION |
|
|
| Board
of Directors |
Mr. Mazharul Haq Siddiqui |
|
Chairman |
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|
Mr. All Jameel |
|
Chief Executive &
Managing Director |
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|
Mr. Abid Hussain Zuberi |
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Vice Chairman |
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|
Mr. Muhammad Sajid |
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|
Mr. Adil Matcheswala |
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|
Mr. Nauzer A. Dinshaw |
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|
Mr. Suleman Lalani |
|
|
Dr. Amjad Waheed |
|
|
| Company
Secretary |
Mr. Hadi All Khan |
|
|
| Auditors |
|
Messrs, Ford, Rhodes,
Robson, Morrow |
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|
Chartered Accountants |
|
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| Bankers |
|
Citibank N.A, |
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|
Bank AI Habib Ltd. |
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|
Metropolitan Bank Ltd. |
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| Share
Registrars |
Uni Corporate &
Financial Services |
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|
Westland Trade centre, |
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|
Opp: Flyover,
Shaheed-e-Millat Road, |
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|
Karachi. |
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| Registered
Office |
House No. 7, F-6/3, Agha
Khan Road, |
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|
Islamabad. |
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| Branch Office |
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1301-1303, 13th Floor, |
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Chapal Plaza, |
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Hasrat Mohani Road, |
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Karachi. |
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| NOTICE
OF SEVENTH ANNUAL GENERAL MEETING |
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| Notice
is hereby given that the Seventh Annual General Meeting of Jahangir Siddiqui
Investment Bank Limited |
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| [Formerly,
Citicorp Investment Bank (Pakistan) Limited] will be held at Chandni
Extension, Pearl-Continental |
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| Hotel,
Club Road, Karachi on Saturday, September 30, 2000 at 10:30 a.m. to transact
the following business: |
|
|
| Ordinary
Business |
|
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| 1.
To confirm the minutes of the Extraordinary General Meeting held on July 8,
2000. |
|
|
| 2.
To receive and consider the Accounts of the Company for 18 months ended June
30, 2000 together |
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| with
the Directors' Operational Review and Auditors' Report thereon. |
|
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| 3.
To approve 10% final cash dividend and 40% stock dividend (this is in
addition to the interim cash |
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| dividend
of 15% already paid) to those shareholders whose names appear as members on
the Register |
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| of
Members of .the Company on the closing of September 19, 2000 as recommended
by the Board |
|
| of
Directors of the Company. |
|
|
| 4.
To appoint the auditors and fix their remuneration. Messrs. Ford, Rhodes,
Robson, Morrow, Chartered |
|
| Accountants,
retire and offer themselves for re-appointment. |
|
|
| Special
Business |
|
|
| 5.
To consider and if thought fit pass following resolution as Special
Resolution: |
|
|
| "Resolved,
as Special Resolution that Mr. All Jameel, the Chief Executive of the Company
be and is hereby |
|
| authorised
to make investments in associated companies that are listed on Stock
Exchanges in Pakistan |
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| from
time to time and vary and liquidate such investments on behalf of the
Company, provided that such |
|
| investments
are within the parameters of Section 208 of the Companies Ordinance, 1984,
including |
|
| that
the aggregate amount of investments in associated companies at any time shall
not exceed 30% |
|
| of
the paid-up capital, plus free reserves of the Company. This authority shall
remain in force until |
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| revoked
by the shareholders." |
|
|
| 6.
To consider any other business with the permission of the Chair. |
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|
By Order of the Board |
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|
Hadi All Khan |
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|
Company Secretary |
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| Karachi:
August 29, 2000 |
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|
| Notes |
|
|
| (i)
Share Transfer Books of the Company will remain closed from September 20,
2000 to September 27, |
|
| 2000
(both days inclusive) for determining entitlement to the final cash dividend
and stock dividend |
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| as
recommended by the Board of Directors. |
|
|
| (ii)
A member of the Company entitled to attend and vote may appoint another
member as his/ her |
|
| proxy
to attend and vote instead of him/her. |
|
|
| (iii)
Proxies must be received at the Head Office of the Company not less than 48
hours before the time |
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| of the meeting. |
|
|
| (iv)
In pursuance of Circular No. 1 of 2000 of Securities and Exchange Commission
of Pakistan dated |
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| January
28, 2000 the beneficial owners of the shares registered in the name of
Central Depository |
|
| Company
(CDC) and/ or their proxies are required to produce their original National
Identity Card |
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| (NIC)
or passport for identification purpose at the time of attending the meeting,
The form of the proxy |
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| must
be submitted with the Company within the stipulated time, duly witnessed by
two persons whose |
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| names,
addresses and NIC numbers must be mentioned on the form, alongwith attested
copies of the |
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| NIC
or the passport of the beneficial owner and the proxy. |
|
|
| (v)
Shareholders are requested to notify immediately of any change in their
address, |
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|
| Statement
Under Section 160 of the Companies Ordinance, 1984 |
|
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| The
Company has been making investments in and has been trading in shares of
listed companies from time |
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| to
time and creating reasonable investment portfolio on its own account as an
Investment Company. Because |
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| of
the directorships of Directors in other listed companies, such other
companies became associated companies |
|
| of
the Company and the investments in such other companies necessitate Special
Resolution under Section |
|
| 208
of the Companies Ordinance, 1984. With the prevailing lower market prices at
the Stock Exchanges, it is |
|
| desirable
to develop a reasonable investment portfolio to reap substantial capital
gains in future. Due to |
|
| common
directorships of the Directors of the Company on the board of some prominent
listed companies, |
|
| it
is necessary to authorize such investments by Special Resolutions. Since it
is not practicable to pass a Special |
|
| Resolution
under Section 208 of Companies Ordinance, 1984, each time the Company makes
an investment |
|
| in
such listed companies, it has become necessary to give a standing authority
to the Chief Executive to make, |
|
| vary
or withdraw investments in the listed companies, as associated companies,
from time to time, subject |
|
| to
the limitations laid down under Section 208 of the Companies Ordinance, 1984. |
|
|
| The
Directors have no personal interest in the above matters, except for
following limited interest: |
|
|
| Some
of the directors may possibly be on the Board of the associated companies for
which the Chief Executive |
|
| is
being granted the authority to make investments under Section 208 of the
Companies Ordinance, 1984. |
|
|
|
| DIRECTORS'
REPORT TO THE SHAREHOLDERS |
|
|
| Dear
Shareholders: |
|
|
| On
behalf of the Board of Directors, we have the pleasure of presenting the
Annual Report and Audited |
|
| Accounts
of Jahangir Siddiqui Investment Bank Ltd, (JSIBL) for 18 months ended June
30, 2000, |
|
|
| As
you are aware your Company was formerly named Citicorp Investment Bank
(Pakistan) Ltd, (CIBPL), which |
|
| was
changed to Jahangir Siddiqui Investment Bank Ltd, consequent to the
acquisition of majority shareholding |
|
| of
60% by Jahangir Siddiqui & Co, Ltd, from Citibank Overseas Investment
Corporation (COIC), The |
|
| change
in management took place on September 18, 1999, after completion of all the
regulatory formalities, |
|
|
| Although
this report pertains to 18 months, the review mainly encompasses the period
after the change in |
|
| management, |
|
|
| As
a result of COIC negotiations with JSCL, business activity of your Company
was curtailed until the change |
|
| in
management, Soon after this change the current management decided to declare
and pay the shareholders |
|
| cash
dividend of 15%, During the month of October, 1999 we were in the process of
implementing |
|
| our
risk management process and devising our investment and credit policies
keeping in view the |
|
| conservative
and prudent approach adopted by our predecessors and our holding Company, |
|
| Jahangir
Siddiqui & Company Limited, |
|
|
| During
the period under review your Company has made reasonable progress and
demonstrated growth, |
|
| However,
the issue of taxation has plagued the entire industry including your Company,
A detailed note to |
|
| this
has been provided in note no, 10, This issue has been facing the industry
ever since its inception, |
|
|
| Performance |
|
|
| Your
Company during the period of operations from October 1999 to June 30, 2000
remained active in Money |
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| Market,
Debt and Equity markets as well as corporate finance and other advisory and
fee based activities, |
|
|
| Subsequent
to the change in management, your Company has been successful in securing
lines of credit |
|
| from
Banks, NBFIs and DFIs, This has enhanced our ability to participate in money
market activities more |
|
| effectively,
The management is also focusing its efforts on deposit mobilization, The
funds so raised can be |
|
| channeled
into profitable investments like Term Finance Certificates, UTP Units and a
portfolio of advances, |
|
|
| We
have launched a new product namely "Portfolio Trading Services"
which facilitates investors to trade on |
|
| the
equity market against securities pledged with us, We anticipate this product
would enhance our retail |
|
| client
base and encourage small investors to participate in equity market activity, |
|
|
| Your
Company is also active in providing corporate finance services, We expect
that the Economic Revival |
|
| Plan
initiated by the government would result in increased corporate finance
activity and therefore higher |
|
| fee
based income next year, |
|
|
| Financial
Review |
|
|
| Your
Company earned an after tax profit of Rs, 20,042 million during the 18 months
under review, The Company |
|
| changed
its accounting policy in respect of valuation of marketable securities,
Marketable securities are now |
|
| valued
at lower of cost or market value on an individual basis, as against the
earlier method of valuation on |
|
| the
market value or where the market value is not available at their estimated
realizable value, |
|
|
| The
Company has also changed its accounting estimate for additions to fixed
assets and is providing for |
|
| depreciation
for the whole year irrespective of the date of acquisition of the asset
compared to the previous |
|
| policy
of providing for depreciation on a monthly basis from the date of
acquisition, Had this change not been |
|
| made
the depreciation charge would have been lower by Rs, 0,330 million and the
profit for the year would |
|
| have
been higher by the same amount, |
|
|
| The
financial results for the eighteen months ended June 30, 2000 are: |
|
|
| Results |
|
(Rs. in '000) |
|
|
| Profit
after taxation |
|
20,042 |
|
| Unappropriated
profit brought forward |
|
126,647 |
|
|
---------- |
|
| Profit
available for appropriation |
|
146,689 |
|
| Appropriation |
|
| Interim
dividend @ 15% |
|
15,000 |
|
| Proposed
final dividend @ 10% |
|
10,000 |
|
| Transfer
to Capital Reserve for issue of Bonus Shares |
40,000 |
|
| Transfer
to special reserve |
|
4,008 |
|
| (Mandatory
legal reserve) |
|
---------- |
|
|
| Unappropriated
profit carried forward |
|
69,008 |
|
|
---------- |
|
| Earnings
per Share |
|
77,681 |
|
|
========== |
|
| The
after tax earnings per share for 18 months of operation works out to Rs,
2.00. |
|
|
| Future Outlook |
|
|
|
| The
future performance of your company is correlated to economic conditions
prevalent in the country. We |
|
| are
hopeful that the Government's efforts to revive the economy will boost the
capital markets and revive |
|
| corporate
finance activity, |
|
|
| Change
in Management |
|
|
| The
new board was formed and appointed to fill the casual vacancies created by
the outgoing previous |
|
| directors
after obtaining all the required regulatory approvals, on September 18, 1999.
The following directors |
|
| were
appointed to fill the casual vacancies: |
|
|
| Mr,
M, W, Farooqui |
Chairman |
|
| Mr.
A, H, Zuberi |
|
| Mr,
Mohammad All Jameel |
|
| Mr,
Munaf Ibrahim |
|
| Mr,
Adil Matcheswala |
|
| Mr,
Nauzer A. Dinshaw |
|
|
| Since
the term of this board expired on June 2, 2000, a new board has since been
elected on July 8, 2000 for |
|
| the
next term of three years. We would like to express our sincere gratitude to
the outgoing directors for their |
|
| involvement
and help in the early months soon after the change in management. Our former
Chairman |
|
| Mr,
M. W, Farooqui and director Mr, Munaf Ibrahim have provided us the foundation
to continue building your |
|
| Company
and we are extremely grateful to them for their time and patience, The names
of the elected |
|
| directors
are as under: |
|
|
| Mr,
Mazharul Haq Siddiqui |
Chairman |
|
| Mr,
A, H, Zuberi |
Vice Chairman |
|
| Mr.
Adil Matcheswala |
|
| Mr,
Suleman Lalani |
|
| Mr.
Muhammad Sajid |
|
| Mr.
Nauzer A, Dinshaw |
|
| Dr,
Amjad Waheed |
|
|
| Auditors |
|
|
| Messrs,
Ford, Rhodes, Robson, Morrow, Chartered Accountants, Auditors of the Company,
retire and offer |
|
| themselves
for reappointment, |
|
|
| Pattern
of Shareholding |
|
|
| The
statement of pattern of shareholding in the Company (JSIBL) as at June 30,
2000 appears on page 26, |
|
|
| Acknowledgement |
|
|
|
| We
would like to thank the team at Jahangir Siddiqui Investment Bank Ltd, for
their full support, |
|
| contribution
and dedication in its first year of operation under new management, We would
also like to |
|
| thank
our customers and financial institutions for reposing confidence in us,
Lastly, we are grateful to the State |
|
| Bank
of Pakistan, the Securities and Exchange Commission of Pakistan and the Stock
Exchanges for their |
|
| cooperation
and guidance, |
|
|
|
All Jameel |
|
Abid Hussain Zuberi |
|
|
Chief Executive & Managing Director |
|
Vice Chairman |
|
|
| Karachi:
July 20, 2000 |
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed balance sheet of Jahangir Siddiqui investment Bank
Limited [formerly, Citicorp |
|
| Investment
Bank (Pakistan) Limited 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
forming part thereof, for the |
|
| eighteen
months 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 and, after due verification |
|
| thereof,
we report that: |
|
|
| (a)
in our opinion, proper books of account 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, |
|
| except
for the changes in accounting policies referred to in note 2,5 to the
accounts, with |
|
| which
we concur; |
|
|
| the
expenditure incurred during the period was for the purpose of the company's
business; and |
|
|
| (iii)
the business conducted, investments made and the expenditure incurred during
the period |
|
| were
in accordance with the objects of the company; |
|
|
| 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 and statement of changes in financial position
(cash flow |
|
| statement),
together with the notes forming part thereof, 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 and the changes in
financial position (cash |
|
| flows)
for the period then ended; and |
|
|
| (d)
in our opinion, Zakat deductible at source under the Zakat and Ushr
Ordinance, 1980 was deducted |
|
| by the Company and deposited in the Central
Zakat Fund established under section 7 of that Ordinance, |
|
|
| Karachi:
July 20, 2000 |
|
Ford, Rhodes, Robson, Morrow |
|
|
Chartered Accountants |
|
|
|
| BALANCE
SHEET AS AT JUNE 30, 2000 |
|
|
|
June 30, |
December |
|
|
Note |
2000 |
31, 1998 |
|
|
(Rs. in
'000) |
|
| Assets |
|
| Non-current
assets |
|
|
| Fixed
assets - tangible |
|
3 |
2,322 |
-- |
|
| Long-term
deposits |
|
|
986 |
200 |
|
| Investment
in an associated undertaking |
|
4 |
15,821 |
-- |
|
| Long-term
investments |
|
5 |
35,000 |
10,925 |
|
| Long-term
demand promissory note (DPN) |
|
-- |
57,000 |
|
|
---------- |
---------- |
|
|
54,129 |
68,125 |
|
| Current assets |
|
|
| Current
maturity of long-term investments |
|
5 |
2,760 |
16,709 |
|
| Short-term
investments |
|
6 |
330,270 |
24,804 |
|
| Fund
placements with financial institutions |
|
7 |
160,000 |
-- |
|
| Receivables
against sale of marketable securities |
|
8 |
117,132 |
-- |
|
| Prepayments,
accruals and other receivables |
|
9 |
10,582 |
12,835 |
|
| Taxation - net |
|
10 |
91,123 |
82,810 |
|
| Cash
and bank balances |
|
11 |
6,033 |
221,1 56 |
|
|
---------- |
---------- |
|
|
717,900 |
358,314 |
|
|
---------- |
---------- |
|
|
772,029 |
426,439 |
|
| Equity
and Liabilities |
|
|
| Share
capital and reserves |
|
|
| Authorised
capital |
|
| 20,000,000
ordinary shares of Rs, 10 each |
|
200,000 |
200,000 |
|
|
========== |
========== |
|
| Issued,
subscribed and paid-up capital |
|
|
|
| 10,000,000
ordinary shares of Rs, 10 each |
|
|
|
| fully
paid in cash |
|
12 |
100,000 |
100,000 |
|
|
|
|
|
| Reserves |
|
13 |
158,869 |
163,827 |
|
|
|
---------- |
---------- |
|
|
258,869 |
263,827 |
|
| Non-current
liabilities |
|
|
|
|
| Liabilities
against assets subject to finance lease |
|
14 |
457 |
-- |
|
| Certificates
of investment |
|
15 |
-- |
76,998 |
|
|
|
---------- |
---------- |
|
|
457 |
76,998 |
|
| Current
liabilities |
|
|
| Current
maturity of liabilities against assets |
|
| subject
to finance lease |
|
14 |
345 |
-- |
|
| Certificates
of investment |
|
15 |
184,588 |
32,679 |
|
| Running
finance utilised under markup arrangement |
16 |
106,404 |
-- |
|
| Borrowings
from banks/ NBFIs |
|
17 |
162,000 |
-- |
|
| Advances,
accrued expenses and other liabilities |
|
18 |
49,366 |
12,935 |
|
| DPNs
sold under repurchase agreements |
|
|
-- |
40,000 |
|
| Final
dividend payable |
|
|
10 000 |
-- |
|
|
|
----------- |
----------- |
|
|
|
|
512,703 |
85,614 |
|
| Contingencies |
|
19 |
|
|
----------- |
----------- |
|
|
772,029 |
426,439 |
|
|
========== |
========== |
|
| The
annexed notes form an integral part of these accounts, |
|
|
|
All Jameel |
|
Abid Hussain Zuberi |
|
|
Chief Executive & Managing Director |
|
Vice Chairman |
|
|
|
|
|
| PROFIT
AND LOSS ACCOUNT |
|
| For
the eighteen months ended June 30, 2000 |
|
|
|
|
|
For the |
For the |
|
|
|
eighteen months |
year ended |
|
|
|
ended June 30, |
December |
|
|
Note |
2000 |
31, 1998 |
|
|
|
(Rs. in
'000) |
|
| Income |
|
|
| Income
from investments |
|
20 |
21,714 |
41,052 |
|
| Capital
gains on disposal of investments - net |
|
31,704 |
1,305 |
|
| Income
from demand promissory note (DPN) |
|
13,756 |
114,413 |
|
| Return
on fund placements with financial institutions |
|
8,486 |
13,759 |
|
| Consultancy
and corporate advisory fees |
|
2,686 |
20,185 |
|
| Exchange gain |
|
18,315 |
11,070 |
|
| Commission
and fees |
|
2,072 |
180 |
|
| Profit
on sale of assets |
|
-- |
417 |
|
| Other income |
|
3,624 |
21,440 |
|
|
---------- |
---------- |
|
|
102,357 |
223,821 |
|
| Operating
expenses |
|
|
|
|
| Administrative
and operating expenses |
|
21 |
22,741 |
24,069 |
|
| Return
on certificates of investment |
|
25,122 |
123,638 |
|
| Markup
on borrowings from banks/NBFIs |
|
27,984 |
1,267 |
|
| Return
on DPNs sold under repurchase agreements |
|
-- |
21,261 |
|
| Markup
on short-term running finance |
|
4,787 |
1,319 |
|
| Provision
for diminution in value of investments |
|
22 |
681 |
-- |
|
|
---------- |
---------- |
|
|
(81,315) |
(171,554) |
|
|
---------- |
---------- |
|
| Profit
before taxation |
|
21,042 |
52,267 |
|
|
| Taxation |
|
10 |
(1,000) |
(16,377 ) |
|
|
|
---------- |
---------- |
|
| Profit
after taxation |
|
20,042 |
35,890 |
|
| Unappropriated
profit brought forward |
|
126,647 |
97,957 |
|
|
---------- |
---------- |
|
| Profit
available for appropriation |
|
146,689 |
133,847 |
|
| Appropriations |
|
| Transfer
to special reserve |
|
13 |
4,008 |
7,200 |
|
| Transfer
to capital reserve for issue of bonus shares |
|
40,000 |
-- |
|
| Interim
dividend at the rate of Rs. 1.50 |
|
|
|
| (1998:
nil) per share |
|
28 |
15,000 |
-- |
|
| Final
dividend at the rate of Rs. 1.00 (1998: nil) per share |
|
10,000 |
-- |
|
|
---------- |
---------- |
|
|
(69,008) |
(7,200) |
|
|
---------- |
---------- |
|
| Unappropriated
profit carried forward |
|
77,681 |
126,647 |
|
|
========== |
========== |
|
| Basic
Earnings per share |
|
29 |
2.00 |
3.59 |
|
| The
annexed notes form an integral part of these accounts. |
|
========== |
========== |
|
|
|
|
All Jameel |
|
Abid Hussain Zuberi |
|
|
Chief Executive & Managing Director |
|
Vice Chairman |
|
|
|
|
|
| CASH
FLOW STATEMENT |
|
|
| For
the eighteen months ended June 30, 2000 |
|
For the |
For the |
|
|
|
|
eighteen months |
year ended |
|
|
|
|
|
|
ended June 30, |
December |
|
|
|
|
Note |
2000 |
31, 1998 |
|
|
|
|
|
|
(Rs. in
'000) |
|
| Cash
flows from operating activities: |
|
|
|
|
| Profit
for the period/year before taxation |
|
21,042 |
52,267 |
|
| Adjustments
for: |
|
|
|
| Depreciation
on fixed assets |
|
683 |
1,759 |
|
| Provision
for staff bonus |
|
900 |
-- |
|
| Exchange gain |
|
(18,315) |
(11,700) |
|
| (Gain)
on sale of fixed assets |
- |
|
-- |
(417) |
|
| Provision
for Diminution in the value of investment |
|
681 |
-- |
|
| Loss
on sale of long-term investments |
|
-- |
2,470 |
|
| Lease
finance charges |
|
50 |
-- |
|
