| Modaraba Al-Tijarah |
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| Annual
Report 2001 |
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| CONTENTS |
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| Corporate
Information |
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| Directors'
Report |
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| Auditors'
Report |
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| Balance Sheet |
|
|
| Profit
and Loss Account |
|
| Cash
Flow Statement |
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| Notes
to the Accounts |
|
| Pattern
of Shareholdings |
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| Notice
of Meeting |
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|
|
| CORPORATE
INFORMATION |
|
|
| BOARD
OF DIRECTORS |
|
| Mr.
Syed Iradat Husain |
Chairman |
|
| Mr.
Maqbool Hussain |
Vice Chairman & |
|
|
|
Managing Director |
|
| Mr.
Ashraf Kalam |
Director |
|
| Mr.
Ahmad H. I. Dada |
Director |
|
| Mr. Imdad Ali |
|
Director |
|
| Mr.
Faisal Hussain |
Director |
|
| Mr.
Mohammad Azeem Khan |
Director |
|
| Mr.
Zafar H. Naqvi |
Chief Executive |
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|
| MANAGEMENT
TEAM |
|
| Mr.
Zafar H. Naqvi |
Chief Executive |
|
| Mr. Omair Jamal |
|
Chief Operating Officer
& |
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|
Company Secretary |
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| Mr. Zulfiqar Ali |
|
Manager Finance |
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| AUDITORS |
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| Ford,
Rhodes, Robson, Morrow |
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| Chartered
Accountants |
|
| Finaly House |
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| I.
I. Chundrigar Road |
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| Karachi. |
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| BANKERS
& FINANCERS |
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| Allied
Bank of Pakistan |
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| Muslim
Commercial Bank Limited |
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| Metropolitan
Bank Limited |
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| REGISTERED
OFFICE |
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| 10th
Floor, Progressive Square |
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| Opposite
Nursery, Sharae Faisal, Karachi. |
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| Phones:
4547521-5 Fax: (92-21) 4547526 |
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| E-mail:
mali-tij@cyber.net.pk |
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| DIRECTORS'
REPORT |
|
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| The
Board of Directors of Al-Mal Corporation Limited have pleasure in presenting
10th Annual Report of Modaraba Al-Tijarah |
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| together
with Audited Accounts for the year ended June 30, 2001. |
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| 1.
Operating Results: |
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| A
summary of the operating results for the year ended 30th June, 2001 are
presented as under: |
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|
(Rs. in
"000") |
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|
2001 |
2000 |
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| Profit
after taxation |
|
51 |
1,319 |
|
|
|
|
========== |
========== |
|
| Operating
income / (Loss) |
|
|
1,753 |
(3,970) |
|
| Operating cost |
|
|
(2,122) |
(2,049) |
|
|
------------------ |
------------------ |
|
|
|
|
(369) |
(6,019) |
|
| Other Income |
|
455 |
451 |
|
|
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|
------------------ |
------------------ |
|
|
|
|
86 |
(5,568) |
|
| Provision
for doubtful debts |
|
|
(1,502) |
(971) |
|
| Provision
for diminution in value of stock in trade |
|
-- |
(249) |
|
| Provision
written back |
|
|
1,550 |
8,218 |
|
|
------------------ |
------------------ |
|
| Profit
before taxation |
|
134 |
1,430 |
|
| Taxation |
|
(83) |
(111) |
|
|
------------------ |
------------------ |
|
| Profit
after taxation |
|
51 |
1,319 |
|
|
| Loss
brought forward |
|
(48,151) |
(49,338) |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
(48,100) |
(48,019) |
|
|
| Transfer
to statutory reserves |
|
(5) |
(132) |
|
|
|
|
------------------ |
------------------ |
|
|
| Loss
Carried to the balance sheet |
|
(48,105) |
(48,151) |
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|
|
|
========== |
========== |
|
|
| Earnings
per certificate |
|
0.01 |
0.17 |
|
|
|
|
========== |
========== |
|
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| 2.
Statutory Reserve |
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| In
accordance with Prudential Regulation for Modarabas issued by Securities
& Exchange Commission of Pakistan, your |
|
| Directors
have decided to appropriate 10% of the current year profit to Statutory
Reserves. |
|
|
| 3.
Business Operations |
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| The
year under review once again witnessed suspension of negative results in
business operation of Modaraba Al-Tijarah |
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| for
consecutive third year. However, improvement in country's economy could not
yield significant effect on the results |
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| due
to some problems specific to Modaraba Al-Tijarah, like liquidity crunch. |
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| All
Items of gross operating income have shown a positive trend as compared to
the last years figures. Gross operating |
|
| income
was recorded at Rs. 1.75 million as against gross loss of Rs. 3.97 million
during the last year. Operating cost |
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| remained
under strict control of management and restricted to last year's level of Rs.
2.00 million. Thus, modaraba could |
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| manage
to book a net profit of Rs. 0.051 million viz a viz Rs. 1.30 million during
the year 1999-2000. |
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| 4.
Future Prospects |
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| The
Modaraba has re-established its export division which contributed over Rs.
0.400 million towards gross revenue for |
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| the
year 2000-2001 and is expected to reflect much better results in the year
2001-2002. At the same time we understand |
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| that
export business is susceptible to adverse international market due to various
geo-political reasons. However, the |
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| management
of your Modaraba is committed to re-establish the foundation for sustainable
growth of Modaraba, for which |
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| a
number of business plans are under active consideration. |
|
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| 5. Auditors |
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|
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| 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 2001-2002. |
|
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| 6.
Pattern of Certificate Holdings |
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| The
pattern of certificate holding is attached. |
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| 7.
Acknowledgement |
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| The
Directors take this opportunity to extend their appreciation and thanks to
Certificate holders for their trust in Modaraba. |
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| to
the authorities for their guidance and to all members of management and staff
for their hard work and commitment. |
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|
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|
On the behalf of the Board |
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|
|
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|
Syed Iradat Husain |
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| Karachi:
Dated 21st November, 2001 |
|
Chairman |
|
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| AUDITORS'
REPORT TO THE |
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| CERTIFICATE
HOLDERS |
|
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| We
have audited the annexed Balance Sheet as at June, 30, 2001 and the related
Profit and Loss Account and the Cash Flow |
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| Statement,
together with the Notes to the Accounts for the year ended June 30, 2001 of
Modaraba Al-Tijarah which are |
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| modaraba
company's (Al-Mal Corporation Limited) representation and we state that we
have obtained all the information and |
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| 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 Modaraba Al-Tijarah |
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| as
required by the Modaraba Companies and Modaraba (Floatation and Control)
Ordinance, 1980 and Modaraba |
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| Companies
and Modaraba Rules, 1981; |
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|
|
|
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| (b)
In our opinion, the Balance Sheet and the Profit and Loss Account have been
drawn up in conformity with the |
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| Modaraba
Companies and Modaraba (Floatation and Control) Ordinance, 1980, and Modaraba
Companies and |
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| Modaraba
Rules, 1981; and |
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|
|
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| (c)
In our opinion and to the best of our information and according to the
explanations given to us; |
|
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| (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 Modaraba's |
|
| affairs
as at June 30, 2001 and of the Profit and Cash Flows for the year ended on
that date; |
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|
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| (ii)
no Zakat was deductible at source under the Zakat and Ushr Ordinance, 1980;
and |
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| (iii)
the business conducted, investments made and expenditure incurred by the
Modaraba are in accordance |
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| with
the objects, terms and conditions of the Modaraba. |
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|
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|
Ford, Rhodes, Robson, Morrow |
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| Karachi:
21st November, 2001 |
|
Chartered Accountants. |
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|
|
| BALANCE
SHEET AS AT JUNE 30, 2001 |
|
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|
|
2001 |
2000 |
|
|
Note |
Rupees |
Rupees |
|
|
| ASSETS |
|
|
| NON-CURRENT
ASSETS |
|
|
|
| Fixed
assets- tangible |
|
3 |
4,527,001 |
4,962,092 |
|
| Long
term investments |
|
4 |
3,756,881 |
4,630,967 |
|
| Deferred
expenditure |
|
5 |
76,158 |
358,493 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
8,360,040 |
9,951,552 |
|
|
|
|
|
| CURRENT
ASSETS |
|
|
|
| Stock-in-trade |
|
6 |
1,467,144 |
12,233,600 |
|
| Short
term investments |
|
7 |
997,626 |
2,068,814 |
|
| Trade debts |
|
8 |
8,964,937 |
-- |
|
| Short
term musharaka |
|
9 |
4,926,514 |
2,439,554 |
|
| Short
term morabaha |
|
10 |
-- |
-- |
|
| Advances,
deposits, prepayments and other receivables |
11 |
4,222,464 |
4,549,635 |
|
| Cash
and bank balances |
|
12 |
7,781,771 |
4,692,525 |
|
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|
------------------ |
------------------ |
|
|
|
|
28,360,456 |
25,984,128 |
|
|
------------------ |
------------------ |
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| TOTAL
ASSETS |
|
|
36,720,496 |
35,935,680 |
|
|
========== |
========== |
|
|
| EQUITY
AND LIABILITIES |
|
|
|
| CAPITALAND
RESERVES |
|
|
|
| Certificate
capital |
|
| Authorised
- 10.000,000 (2000: 10,000,000) |
|
|
|
| Certificates
of Rs. 10 each |
|
|
100,000,000 |
100,000,000 |
|
|
|
|
========== |
========== |
|
| Issued,
subscribed and paid-up |
|
13 |
75,778,150 |
75,778,150 |
|
|
|
|
|
| Reserves |
|
|
14 |
(47,610,835) |
(47,662,265) |
|
|
|
|
|
------------------ |
------------------ |
|
| Certificate
holder's equity |
|
|
28,167,315 |
28,115,885 |
|
|
|
|
|
| NON-CURRENT
LIABILITIES |
|
|
|
|
| Long
term advance |
|
15 |
1,500,000 |
1,500,000 |
|
|
|
|
|
| CURRENT
LIABILITIES |
|
|
|
| Creditors,
accrued and other liabilities |
16 |
6,657,566 |
5,908,804 |
|
| Unclaimed
profit distribution |
|
|
395,615 |
410,991 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
7,053,181 |
6,319,795 |
|
| COMMITMENT
AND CONTINGENCY |
17 |
|
|
|
------------------ |
------------------ |
|
| TOTAL
EQUITY AND LIABILITIES |
|
36,720,496 |
35,935,680 |
|
|
|
|
========== |
========== |
|
|
| 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, 2001 |
|
|
|
|
2001 |
2000 |
|
|
Note |
Rupees |
Rupees |
|
|
| Operating
income/(loss) |
|
18 |
1,753,265 |
(3,969,847) |
|
| Operating cost |
|
19 |
2,121,794 |
2,048,600 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
(368,529) |
(6,018,447) |
|
|
|
|
|
|
| Other income |
|
20 |
454,599 |
450,752 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
86,070 |
(5,567,695) |
|
| Provisions
written back |
|
21 |
48,122 |
6,998,486 |
|
|
|
------------------ |
------------------ |
|
| Profit
before taxation |
|
|
134,192 |
1,430,791 |
|
| Taxation |
|
|
82,762 |
111,341 |
|
|
|
|
------------------ |
------------------ |
|
| Profit
after taxation |
|
|
51,430 |
1,319,450 |
|
| Transfer
to statutory reserve: 10% (2000: 10%) |
|
(5,143) |
(131,945) |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
46,287 |
1,187,505 |
|
| Accumulated
losses brought forward |
|
(48,150,562) |
(49,338,067) |
|
|
|
|
------------------ |
------------------ |
|
| Accumulated
losses carded forward |
|
(48,104,275) |
(48,150,562) |
|
|
|
|
========== |
========== |
|
| Earnings
per certificate |
|
22 |
0.01 |
0.17 |
|
|
|
========== |
========== |
|
|
| 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, 2001 |
|
|
|
|
2001 |
2000 |
|
|
Note |
Rupees |
Rupees |
|
|
| CASH
FLOW FROM OPERATING ACTIVITIES |
|
| Profit
before taxation |
|
134,192 |
1,430,791 |
|
|
|
|
|
|
| Adjustments
for: |
|
| Depreciation |
|
427,890 |
586,913 |
|
| Amortisation
of deferred expenditure |
|
282,335 |
282,336 |
|
| Gain
on sale of fixed assets |
|
(4,300) |
(8,200) |
|
| Provision
for diminution in value of stock-in-trade |
|
-- |
248,918 |
|
| Loss
on sale of long term investments |
|
1,656,703 |
5,938,362 |
|
| Provision
- write-back on long term investments |
|
(1,734,251) |
(7,173,979) |
|
| Profit
on sale of export quota |
|
-- |
(472,761) |
|
| Dividend |
|
(1,193,944) |
(1,138,609) |
|
|
|
|
------------------ |
------------------ |
|
| Cash
generated from operations |
|
|
(565,567) |
(1,737,020) |
|
|
|
|
------------------ |
------------------ |
|
| Operating
profit before changes in operating assets/liabilities |
(431,375) |
(306,229) |
|
|
| (Increase)/decrease
in operating assets |
|
| Stock-in-trade |
|
|
|
10,766,456 |
2,034,500 |
|
| Marketable
securities |
|
|
1,071,188 |
(534,328) |
|
| Shod
term Musharaka |
|
|
(2,486,960) |
344,187 |
|
| Shod
term Morabaha |
|
|
-- |
221,225 |
|
| Trade debts |
|
|
|
(8,964,937) |
-- |
|
| Advances,
prepayments and other receivables |
|
|
|
| excluding
advance tax and dividend |
|
292,988 |
(825,815) |
|
|
|
|
|
------------------ |
------------------ |
|
|
|
678,735 |
1,239,769 |
|
|
|
|
|
| (Decrease)/increase
in operating liabilities |
|
|
|
| Short-term
Musharaka |
|
|
-- |
(5,940,000) |
|
| Creditors,
accrued and other liabilities |
|
781,787 |
3,342,275 |
|
|
|
|
|
------------------ |
------------------ |
|
|
|
781,787 |
(2,597,725) |
|
|
|
------------------ |
------------------ |
|
| Cash
(outflow)/inflow from operating activities |
|
1,029,147 |
(1,664,185) |
|
| Financial
charges paid |
|
-- |
(1,139,532) |
|
| Income tax paid |
|
(93,094) |
(91,009) |
|
|
|
------------------ |
------------------ |
|
| Net
cash (outflow)/inflow from operating activities Total c/f. |
936,053 |
(2,894,726) |
|
|
| Net
cash (outflow)/inflow from operating activities Total b/f. |
936,053 |
(2,894,726) |
|
|
| CASH
FLOW FROM INVESTING ACTIVITIES |
|
| Purchase
of fixed assets |
|
|
-- |
(40,777) |
|
| Proceeds
from sale of fixed assets |
|
|
11,500 |
350,000 |
|
| Proceeds
from sale of long term investments |
|
951,635 |
2,911,193 |
|
| Proceeds
from sale of export quota |
|
-- |
1,486,270 |
|
| Profit
received on bank deposits |
|
|
66,975 |
30,483 |
|
| Dividend
received |
|
|
1,138,459 |
1,141,516 |
|
|
------------------ |
------------------ |
|
| Net
cash inflow/(outflow) from investing activities |
|
2,168,569 |
5,878,685 |
|
|
| CASH
FLOW FROM FINANCING ACTIVITIES |
|
| Long
term deposit |
|
|
-- |
1,500,000 |
|
| Profit paid |
|
|
(15,376) |
(8,568) |
|
| Deferred
expenditure paid |
|
|
-- |
(355,970) |
|
|
|
|
------------------ |
------------------ |
|
| Net
cash inflow I (outflow) from financing activities |
|
(15,376) |
1,135,462 |
|
|
|
|
------------------ |
------------------ |
|
| NET
INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS |
3,089,246 |
4,119,421 |
|
|
| CASH
AND CASH EQUIVALENTS AT BEGINNING OF THE YEAR |
4,692,525 |
573,104 |
|
|
|
------------------ |
------------------ |
|
| CASH
AND CASH EQUIVALENTS AT END OF THE YEAR |
12 |
7,781,771 |
4,692,525 |
|
|
|
========== |
========== |
|
|
| 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, 2001 |
|
|
| 1.
LEGAL STATUS AND NATURE OF BUSINESS |
|
| Modaraba
Al-Tijarah is a multipurpose, perpetual Modaraba formed in July, 1991 under
the Modaraba Companies and |
|
| Modaraba
(Floatation and Control) Ordinance, 1980, and Modaraba Companies and Modaraba
Rules, 1981 and is |
|
| managed
by Al-Mal Corporation Limited. It is engaged in the business of trading and
manufacturing on its own account, |
|
| providing
musharaka, morabaha finances, purchase and sale of securities and other
related business. It is listed on the |
|
| Karachi,
Islamabad and Lahore Stock Exchanges. |
|
|
| 2.
SIGNIFICANT ACCOUNTING POLICIES |
|
|
| 2.1
Accounting convention |
|
|
| These
accounts have been prepared under the historical cost convention. |
|
|
|
| 2.2
Staff retirement benefits |
|
|
|
| (a)
Staff gratuity |
|
| The
Modaraba participates in an approved group funded gratuity scheme for all its
employees, who have |
|
| completed
minimum qualifying period of service. Contributions to the fund have been
made on the basis of |
|
| actuarial
recommendation at the rate of 8.33 percent per annum of basic salaries. The
actuarial valuation is |
|
| normally
carried out once in every three years. The latest valuation was carried out
as at June 30, 1999. The |
|
| fair
value of the scheme's assets and liabilities of past services of the
employees relating to the Modaraba at |
|
| the
latest valuation date were Rs.0.015 million and Rs.0.023 million
respectively. The projected unit credit |
|
| method
using the following significant assumptions is used for the valuation of the
scheme: |
|
|
| -
Expected long term rate of increase in salary level 12 percent per annum. |
|
|
| -
Expected long term rate of interest 12 percent per annum. |
|
|
| -
Discount rate used to determine the actuarial present value is 12 percent per
annum. |
|
|
| (b)
Staff provident fund |
|
| The
Modaraba contributes to an approved group provident fund scheme covering all
its employees who are |
|
| eligible
under the scheme. Equal monthly contributions are made by the Modaraba and
the employees to the |
|
| fund. |
|
|
| 2.3
Fixed assets - tangible |
|
| 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. In respect of additions and |
|
| disposals
during the year, depreciation is charged proportionately for the period of
use. Gain or loss on disposal |
|
| of
assets, if any, is included in income currently. |
|
|
|
| 2.4
Long term investments |
|
|
|
| These
are stated at cost. Provision is made for decline other than temporary, if
any, in the value of these investments. |
|
|
| 2.5
Deferred expenditure |
|
| Expenses
incurred in connection with the expenses on purchase of export quota are
amortised over three years |
|
| effective
from the year of its purchase. |
|
|
|
| 2.6
Stock-in-trade |
|
| Trading
stock is stated at lower of cost and estimated net realisable value. Cost is
arrived at by using the weighted |
|
| average
basis except for stock-in-transit which is valued at actual cost. |
|
|
| 2.7
Short term investments |
|
| These
are carded at lower of moving average cost and market value determined on an
aggregate portfolio basis. |
|
| Gain
or loss on sale of investments is accounted for in the year in which it
arises, |
|
|
| 2.8
Foreign currency translation |
|
|
|
| Assets
and liabilities in foreign currencies are translated into rupees at the rates
of exchange approximating to |
|
| those
prevalent on the balance sheet date. Exchange gains or losses are taken to
income currently. |
|
|
| 2.9 Taxation |
|
|
|
|
|
|
|
| Current |
|
|
|
| Provision
for current taxation is based on taxable income at current rates of taxation
after taking into account tax |
|
| credits
and tax rebates available. |
|
|
|
|
|
|
| Deferred |
|
|
|
| Deferred
tax is provided using the liability method on all temporary differences at
the balance sheet date between |
|
| the
tax bases of assets and liabilities and the carrying amounts for financial
reporting purposes. Deferred tax debits |
|
| are
not accounted for as a matter of prudence. |
|
|
|
| 2.10
Revenue recognition |
|
| Profit
generated from morabaha transactions is recognised as income at the time of
sale. |
|
|
|
|
| Dividend
income is recognised at the time of closure of share transfer books of the
company declaring dividend. |
|
| Sales
are recorded on despatch of goods. |
|
|
|
|
| Commission
income is recognised on a receipt basis. |
|
|
|
|
| 2.11
Bad and doubtful debts |
|
| Debts
considered doubtful are provided for. |
|
|
| 3.
FIXED ASSETS - TANGIBLE |
|
|
|
|
Depreciation |
|
Net book |
|
|
|
Cost |
|
Cost as at |
Depreciation |
charged |
|
Depreciation |
Book Value |
Rate of |
|
|
July 1 |
|
June 30, |
as at July 1, |
for the |
Depreciation |
as at June 30, |
as at June 30, |
depreciation |
| Description |
|
2000 |
Disposals |
2001 |
2000 |
year |
on disposal |
2001 |
2001 |
per annum |
|
|
|
|
|
|
Rupees |
|
% |
|
|
|
|
| Leasehold
shops |
1,809,494 |
-- |
1,809,494 |
90,475 |
90,475 |
-- |
180,950 |
1,628,544 |
5 |
| Office premises |
|
3,184,406 |
-- |
3,194,406 |
583,807 |
159,220 |
-- |
743,027 |
2,441,379 |
5 |
| Furniture
and fixtures |
529,154 |
(74,508) |
454,646 |
410,772 |
87,347 |
(74,507) |
423,612 |
31,034 |
20 |
| Equipments |
|
884,439 |
-- |
864,439 |
351,947 |
86,448 |
-- |
438,395 |
426,044 |
10 |
| Vehicle |
|
24,000 |
(24,000) |
-- |
12,400 |
4,400 |
(16,800) |
-- |
-- |
20 |
|
|
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| </ |
