| Modaraba Al-Mali |
|
|
|
|
|
|
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|
| Annual
Report 2000 |
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| CONTENTS |
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| Corporate
Information |
|
| Directors'
Report |
|
| Auditors'
Report |
|
| Balance Sheet |
|
|
| Profit
and Loss Account |
|
| Cash
Flow Statement |
|
| Notes
to the Accounts |
|
| Pattern
of Certificate Holdings |
|
| Notice
of Meeting |
|
|
|
| CORPORATE
INFORMATION |
|
|
| BOARDS
OF DIRECTORS |
|
| Mr.
Syed Iradat Husain |
Chairman |
|
| Mr.
Maqbool Hussain |
Managing Director &
Vice Chairman |
|
| Mr.
Mohammad Kamil |
Director |
|
| Mr.
Ashraf Kalam |
Director |
|
| Mr.
Ahmad H.I.Dada |
Director |
|
| Mr. Imdad Ali |
|
Director |
|
| Mr.
Faisal Hussain |
Director |
|
| Mr.
Zafar H. Naqvi |
Chief Executive |
|
|
| MANAGEMENT
TEAM |
|
| Mr.
Zafar H. Naqvi |
Chief Executive |
|
| Mr.
S. Shakeel-ur-Rehman |
Chief Manager |
|
| Mr.
S. Masood Akhter |
Chief Manager |
|
| Mr. D.V. Karia |
|
Chief Manager |
|
| Mr. Omair Jamal |
|
Company Secretary |
|
|
| AUDITORS |
|
| Ford,
Rhodes, Robson, Morrow |
|
| Chartered
Accountants |
|
| Finlay House |
|
| I.I.
Chundrigar Road |
|
| Karachi. |
|
|
| BANKERS
& FINANCERS |
|
| Muslim
Commercial Bank Limited |
|
| Askari
Commercial Bank Limited |
|
| Metropolitan
Bank Limited |
|
| Allied
Bank of Pakistan Limited |
|
| Pak-Libya
Holding Co. (Pvt) Limited |
|
|
| REGISTERED
OFFICE |
|
| 10th
Floor, Progressive Square |
|
| Opposite
Nursery, Sharea Faisal |
|
| Karachi. |
|
| Phones:
4547521-5 |
|
| Fax
: (92-21) 4547526 |
|
|
|
| DIRECTOR'S
REPORT |
|
|
| The
Board of Directors of Al-Mal Corporation Limited have pleasure in presenting
the 14th Report of Modaraba |
|
| Al-Mali
together with Audited Accounts for the year ended June 30, 2000. |
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|
| 1.
Operating Results: |
|
|
| The
summarized results for the period under report are as under: |
|
|
|
|
|
(Rs. in
"000") |
|
|
|
2000 |
1999 |
|
|
| Total
Operating income |
|
138,765 |
128,067 |
|
|
|
========== |
========== |
|
| Net
profit before management fee & taxation |
|
33,127 |
32,989 |
|
| Less:
Management fee |
|
3,313 |
2,999 |
|
|
|
------------------ |
------------------ |
|
|
|
29,814 |
29,990 |
|
| Less:
Provision for Taxation |
|
-- |
412 |
|
|
|
------------------ |
------------------ |
|
|
|
29,814 |
29,578 |
|
| Add:
Unappropriated profit |
|
1,215 |
374 |
|
|
|
------------------ |
------------------ |
|
| Profit
available for appropriation |
|
31,029 |
29,952 |
|
| Appropriation: |
|
|
|
| --
Statutory reserves |
|
2,981 |
5,916 |
|
| --
Cash dividend @ 15% (1999: 12.5%) |
|
27,386 |
22,821 |
|
|
------------------ |
------------------ |
|
|
|
30,367 |
28,737 |
|
|
|
------------------ |
------------------ |
|
| Unappropriated
profit carried forward |
|
662 |
1,215 |
|
|
========== |
========== |
|
| Basic
earnings per certificate |
|
|
1.63 |
1.62 |
|
|
========== |
========== |
|
|
|
|
| 2.
PROFIT DISTRIBUTION |
|
| Directors
take pleasure in announcing distribution of cash dividend @15%, that is Rs.
1.50 per |
|
| certificate. |
|
|
|
|
| 3.
STATUTORY RESERVES |
|
| In
accordance with the Prudential Regulations for Modarabas issued by the
Securities & Exchange |
|
| Commission
of Pakistan, your Directors have decided to appropriate 10% of the current
year's profit |
|
| to
Statutory Reserves until it equals the Certificate capital of the Modaraba. |
|
|
|
|
| 4.
BUSINESS OPERATIONS |
|
| The
operating results of your Modaraba was adversely affected by the rate war
prevailing in financial |
|
| market,
particularly in the leasing sector. Despite a reasonable growth achieved in
gross operating |
|
| income,
the net results could not register relative increase due to above reason. We
concentrated on |
|
| increasing
volume of leasing business and could write new leases of Rs. 118.860 million
as against |
|
| Rs.
117.008 million during last year and were able to maintain the level of net
profit at Rs. 29.814 million, |
|
| almost
similar to the last year's net profit amounting to Rs. 29.578 million. |
|
|
| Operating
cost have registered corresponding increase due mainly to amortization of
leased assets and |
|
| salaries
and allowances where adjustment was overdue. Other expenses were kept under
regular control |
|
| notwithstanding
spiraling inflation and other factors beyond management control. |
|
|
| 5.
ADHERENCE TO SHARIA |
|
| It
has been constant endeavour of your Directors to take all necessary steps for
Sharia compliance. |
|
| Pursuing
policy guideline provided by the Religious Board, late payment charges on
rentals recovered |
|
| from
the customers of the Modaraba are not taken to income but used for-charitable
purpose only. |
|
| Another
step forward, your Directors had also decided that from 1st January, 1994
profit received on |
|
| PLS
bank accounts should also not be taken to income account until final ruling
by the competent |
|
| authority
was issued, which now according to the decision of the Honorable Supreme
Court of Pakistan |
|
| (Shariat
Appellate Bench) is un-lslamic. Hence your Board of Directors have decided
that accumulated |
|
| amount
of Rs. 4,637,008/= is not to be recognised as income but used only for
charitable purpose. |
|
|
| 6.
FUTURE PROSPECTS |
|
| Despite
various measures taken by the Government to put the economy back on track,
the overall aura |
|
| of
uncertainty and gloom is still there. In this scenario any substantial growth
in operation is not expected. |
|
| However,
considering the fact that lease finance is one of the permissible modes of
financing in Islam, |
|
| your
Directors see a favourable attention from the Government in the back drop of
Islamization of |
|
| economy
required from year 2001. Your Directors believe that Modaraba's present trend
of operating |
|
| results
will continue and efforts in all directions will be made to achieve
quantitative and qualitative |
|
| result
to maintain existing level of earnings per share. |
|
|
| 7. AUDITORS |
|
|
|
| The
present auditors, Messrs Ford, Rhodes, Robson, Morrow, Chartered Accountants,
are due for |
|
| retirement,
and being eligible, offer themselves for re-appointment for the year
2000-2001. |
|
|
| 8.
PATTERN OF CERTIFICATE HOLDING |
|
| The
pattern of certificate holding is attached. |
|
|
| 9.
ACKNOWLEDGMENT |
|
| The
Directors take this opportunity to extend their appreciation and thanks to
Certificate holders for |
|
| their
trust in the Modaraba, to the authorities for their continued guidance and to
all members of |
|
| management
and staff for their hard work and commitment. |
|
|
|
|
On the behalf of the Board |
|
|
|
|
|
|
|
S. Iradat Husain |
|
| Karachi:
Dated 17th November, 2000. |
|
Chairman |
|
|
|
| AUDITOR'S
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 |
|
| the
Cash Flow Statement together with the notes to the Accounts for the year
ended June 30, 2000 of Modaraba |
|
| Al-Mali
which are modaraba company's (Al-Mal Corporation Limited) representation and
we state that we |
|
| have
obtained all the information and explanation 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 |
|
| Modaraba
Al-Mali 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 the 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 of the Profit and Cash Flows
for the year ended |
|
| on that date; |
|
|
|
|
| (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 expenditure incurred by the
Modaraba are in |
|
| accordance
with the objects, terms and conditions of the Modaraba. |
|
|
|
|
|
|
Ford, Rhodes, Robson,
Morrow |
|
| Karachi:
27th November, 2000 |
|
Chartered Accountants |
|
|
|
|
|
| BALANCE
SHEET AS AT JUNE 30, 2000 |
|
|
|
Note |
2000 |
1999 |
|
|
|
Rupees |
Rupees |
|
|
| ASSETS |
|
|
|
| NON-CURRENT
ASSETS |
|
| Fixed
assets - Tangible |
|
3 |
|
| Assets
given on lease |
|
3.1 |
240,877,873 |
225,469,455 |
|
| Assets
in own use |
|
3.2 |
10,018,366 |
10,508,663 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
250,896,239 |
235,978,118 |
|
| Long
term investments |
|
4 |
6,885,986 |
6,631,599 |
|
| Long
term morabaha finances |
|
5 |
4,646,246 |
-- |
|
| Long
term deposit |
|
|
300,000 |
300,000 |
|
| Deferred
expenditure |
|
6 |
-- |
25,613 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
262,728,471 |
242,935,330 |
|
|
|
|
|
|
| CURRENT
ASSETS |
|
|
|
| Current
maturity of long term morabaha finances |
5 |
6,040,550 |
-- |
|
| Short
term musharaka finance |
|
|
-- |
7,079,532 |
|
| Short
term morabaha finances |
|
7 |
5,771,242 |
11,040,108 |
|
| Short
term investments |
|
8 |
12,479,509 |
5,013,195 |
|
| Lease
rentals receivable |
|
9 |
6,784,182 |
7,317,482 |
|
| Advances,
prepayments and other receivables |
10 |
4,975,457 |
6,356,988 |
|
| Cash
and bank balances |
|
11 |
7,882,634 |
11,766,802 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
43,933,574 |
48,574,107 |
|
|
|
------------------ |
------------------ |
|
| TOTAL
ASSETS |
|
|
306,662,045 |
291,509,437 |
|
|
========== |
========== |
|
|
|
|
| EQUITY
AND LIABILITIES |
|
|
|
| CAPITAL
AND RESERVES |
|
| Certificate
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 |
|
12 |
182,574,000 |
182,574,000 |
|
|
| Reserves |
|
|
|
| Capital reserve |
|
|
|
|
| Statutory
reserves |
|
13 |
23,352,781 |
20,371,319 |
|
|
|
|
|
| Revenue
reserve |
|
|
|
| Unappropriated
profit |
|
|
661,964 |
1,214,903 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
24,014,745 |
21,586,222 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
206,588,745 |
204,160,222 |
|
| NON-CURRENT
LIABILITIES |
|
|
|
| Long
term morabaha finances |
|
15 |
6,250,000 |
1,192,826 |
|
| Deferred liability |
|
16 |
27,457,943 |
28,442,256 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
33,707,943 |
29,635,082 |
|
|
|
|
|
| CURRENT
LIABILITIES |
|
|
|
| Current
maturity of morabaha finances |
15 |
3,692,826 |
4,179,159 |
|
| Current
maturity of deferred liability |
16 |
18,427,152 |
15,131,143 |
|
| Creditors,
accrued and other liabilities |
17 |
8,315,476 |
9,714,749 |
|
| Rentals
received in advance |
|
|
6,624,457 |
4,706,383 |
|
| Unclaimed
dividend |
|
|
1,919,346 |
1,160,949 |
|
| Proposed
dividend |
|
|
27,386,100 |
22,821,750 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
66,365,357 |
57,714,133 |
|
| CONTINGENCIES |
|
18 |
------------------ |
------------------ |
|
| TOTAL
EQUITY AND LIABILITIES |
|
306,662,045 |
291,509,437 |
|
|
|
|
========== |
========== |
|
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
Zafar H. Naqvi |
|
Maqbool Hussain |
|
S. Iradat Husain |
|
|
Chief Executive |
|
Managing Director |
|
Chairman |
|
|
|
|
| PROFIT
AND LOSS ACCOUNT |
|
| FOR
THE YEAR ENDED JUNE 30, 2000 |
|
|
|
|
|
|
Note |
2000 |
1999 |
|
|
|
|
Rupees |
Rupees |
|
|
|
|
|
|
| Operating
income |
|
19 |
138,765,330 |
128,066,933 |
|
|
|
|
|
| Operating costs |
|
20 |
104,707,861 |
95,418,931 |
|
| Profit
distribution on borrowings |
|
21 |
1,763,739 |
1,733,967 |
|
|
------------------ |
------------------ |
|
|
|
|
106,471,600 |
97,152,898 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
32,293,730 |
30,914,035 |
|
| Other income |
|
22 |
905,776 |
921,558 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
33,199,506 |
31,835,593 |
|
| Provisions
made/(written back) |
|
23 |
72,147 |
(1,153,752) |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
33,127,359 |
32,989,345 |
|
| Modaraba
company's management fee |
|
(3,312,736) |
(2,999,031) |
|
|
|
|
------------------ |
------------------ |
|
| Profit
before taxation |
|
|
29,814,623 |
29,990,314 |
|
| Taxation
- Prior years |
|
24 |
-- |
(411,915) |
|
|
|
|
------------------ |
------------------ |
|
| Profit
after taxation |
|
|
29,814,623 |
29,578,399 |
|
| Unappropriated
profit brought forward |
|
1,214,903 |
373,934 |
|
| Available
for appropriation |
|
|
31,029,526 |
29,952,333 |
|
| Appropriations |
|
| Proposed
dividend @ 15% (1999: 12.5%) |
|
(27,386,100) |
(22,821,750) |
|
| Transfer
to statutory reserve @ 10% (1999: 20%) |
|
(2,981,462) |
(5,915,680) |
|
|
------------------ |
------------------ |
|
|
(30,367,562) |
(28,737,430) |
|
|
------------------ |
------------------ |
|
| Balance
carried forward |
|
|
661,964 |
1,214,903 |
|
|
|
|
========== |
========== |
|
| Basic
earning per certificate |
|
25 |
1.63 |
1.62 |
|
|
|
|
========== |
========== |
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
Zafar H. Naqvi |
|
Maqbool Hussain |
|
S. Iradat Husain |
|
|
Chief Executive |
|
Managing Director |
|
Chairman |
|
|
|
| CASH
FLOW STATEMENT |
|
| FOR
THE YEAR ENDED JUNE 30, 2000 |
|
|
|
Note |
2000 |
1999 |
|
|
|
Rupees |
Rupees |
|
|
| CASH
FLOWS FROM OPERATING ACTIVITIES |
|
| Net
Profit before management fee and taxation |
|
33,127,359 |
32,989,345 |
|
| Adjustment
of non-cash and other items |
26 |
89,339,818 |
82,319,948 |
|
|
------------------ |
------------------ |
|
|
122,467,177 |
115,309,293 |
|
| Changes
in working capital |
|
| Decrease/(Increase)
in trade and other receivables |
|
9,651,087 |
(380,128) |
|
| (Increase)
/ Decrease in short term investments |
|
(7,045,020) |
508,568 |
|
| Increase
/ (Decrease) in trade payables |
|
78,908 |
(3,699,555) |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
125,152,152 |
111,738,178 |
|
|
| Profit
distribution on borrowings paid |
|
(1,717,502) |
(1,876,544) |
|
| Income
taxes refund/(paid) |
|
|
1,689,022 |
(347,756) |
|
| Management
fee paid - net |
|
|
(3,365,000) |
(1,489,000) |
|
| Profit
received from bank |
|
|
445,920 |
676,430 |
|
|
------------------ |
------------------ |
|
| Net
cash from operating activities |
|
122,204,592 |
108,701,308 |
|
|
|
|
| CASH
FLOWS FROM INVESTING ACTIVITIES |
|
| Purchase
of fixed assets - Leased out |
|
(118,859,902) |
(117,008,237) |
|
|
- Owned |
|
|
(843,222) |
(95,174) |
|
| Proceeds
from sale of fixed assets - Leased out |
|
15,977,541 |
14,199,826 |
|
|
|
- Owned |
|
541,000 |
374,500 |
|
| Disbursement
of long term morabaha finance - net |
|
(10,686,796) |
-- |
|
| Proceeds
from sale of long term investments |
|
2,267,671 |
540,350 |
|
| Dividend
received |
|
695,764 |
696,426 |
|
| Customers'
security deposits received - net |
|
2,311,696 |
6,572,677 |
|
|
|
|
------------------ |
------------------ |
|
| Net
cash used in investing activities |
|
(108,596,248) |
(94,719,632) |
|
|
|
|
| CASH
FLOWS FROM FINANCING ACTIVITIES |
|
| Long
term morabaha borrowings |
|
|
4,570,841 |
(5,346,067) |
|
| Dividend paid |
|
|
|
(22,063,353) |
(53,623) |
|
|
|
|
|
------------------ |
------------------ |
|
| Net
cash used in financing activities |
|
(17,492,512) |
(5,399,690) |
|
|
| NET
(DECREASE) / INCREASE IN CASH AND |
|
| CASH
EQUIVALENTS |
|
|
(3,884,168) |
8,581,986 |
|
|
| CASH
AND CASH EQUIVALENTS AT |
|
| BEGINNING
OF THE YEAR |
|
11,766,802 |
3,184,816 |
|
|
|
| CASH
AND CASH EQUIVALENTS AT |
|
------------------ |
------------------ |
|
| END
OF THE YEAR |
|
11 |
7,882,634 |
11,766,802 |
|
|
|
|
|
========== |
========== |
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
Zafar H. Naqvi |
|
Maqbool Hussain |
|
S. Iradat Husain |
|
|
Chief Executive |
|
Managing Director |
|
Chairman |
|
|
|
| NOTES
TO THE ACCOUNTS |
|
| FOR
THE YEAR ENDED JUNE 30, 2000 |
|
|
| 1.
LEGAL STATUS AND NATURE OF BUSINESS |
|
| Modaraba
AI-Mali is a multipurpose, perpetual Modaraba formed under the Modaraba
Companies and |
|
| Modaraba
(Floatation and Control) Ordinance, 1980 and the rules framed thereunder and
is managed |
|
| by
Al-Mal Corporation Limited. It is listed on the Karachi, Lahore and Islamabad
Stock Exchanges. It |
|
| is
engaged in the business of leasing, morabaha , musharaka financing and other
related business. |
|
|
| 2.
SIGNIFICANT ACCOUNTING POLICIES |
|
|
|
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| (a)
Accounting Convention |
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| These
accounts have been prepared under the historical cost convention. |
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| (b)
Employee Benefits |
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| (i) Staff gratuity |
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| The
Modaraba participates in an approved group funded gratuity scheme for all its
employees, |
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| who
have completed minimum qualifying period of service. Contribution to the fund
have been |
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| made
on the basis of actuarial recommendation at the rate of 8.33% per annum of
basic salaries. |
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| The
actuarial valuation is normally carried out once in every three years. The
latest valuation |
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| was
carried out as at June 30, 1999. The fair value of the scheme's assets and
liabilities of past |
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| services
of the employees relating to the Modaraba at the latest valuation date were
Rs. 0.643 |
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| million
and Rs. 0.997 million respectively. The projected unit credit method using
the following |
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| significant
assumptions is used for the valuation of the scheme. |
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| --
Expected long term rate of increase in salary level 12 percent per annum. |
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| --
Expected long term rate of interest 12 percent per annum. |
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| --
Discount rate used to determine the actuarial present value is 12 percent per
annum. |
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| (ii)
Staff Provident Fund |
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| The
Modaraba contributes to an approved group provident fund scheme covering all
its |
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| employees
who are eligible under the scheme. Equal monthly contribution are made by the |
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| Modaraba
and the employees to the fund. |
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| (c) Fixed assets |
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| (i)
Assets given on lease and amortization |
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| All
lease transactions are accounted for as operating leases. |
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| Leased
assets are stated at cost to the Modaraba less accumulated amortization.
Amortization |
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| is
charged to income applying the annuity method whereby the amortizable value
of assets' |
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| is
amortized over the lease period, which is considered to be the estimated
useful life of the |
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| assets. |
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| (ii)
Assets in own use and depreciation |
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| Assets
in own use are stated at cost less accumulated depreciation. Depreciation is
charged |
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| to
income applying the straight line method whereby the cost of an asset is
written off over |
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| its
estimated useful life. In respect of additions and disposals during the year,
depreciation is |
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| charged
proportionately for the period of use. |
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| Maintenance
and normal repairs are charged to income as and when incurred. |
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| (iii)
Gain or loss on disposal |
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| Gain
or loss on disposal of assets, if any, is included in income currently. |
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| (d)
Deferred expenditure |
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| Deferred
expenditure incurred in connection with the floatation of Modaraba and
right/bonus issue |
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| is
being written-off over the period of five years from the date of incurrence. |
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| (e) Investments |
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| Long
term investments are stated at cost. Provision is made for decline other than
temporary, if |
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| any,
in the value of these investments. Short term investments are carried at
lower of moving average |
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| cost
and market value determined on an aggregate portfolio basis. |
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| (f)
Revenue recognition |
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| (i)
Lease rentals are recognised as income when due on a systematic basis over
the lease period. |
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| Income
pertaining to the periods falling between the due dates and the period end is
recognised |
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| on
an accrual basis. |
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| (ii)
Dividend income is recorded at the time of closure of share transfer books of
the company |
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| declaring
dividend. |
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