| First Allied Bank Modaraba |
|
|
|
|
|
|
|
| Annual
Report 1999 |
|
|
|
| CONTENTS |
|
|
| CORPORATE
INFORMATION |
|
| CHAIRMAN'S
REVIEW |
|
| AUDITOR'
S REPORT |
|
| BALANCE
SHEET |
|
| PROFIT
& LOSS ACCOUNT |
|
| STATEMENT
OF CHANGES IN FINANCIAL POSITION |
|
| NOTES
TO THE ACCOUNTS |
|
| PATTERN
OF CERTIFICATE HOLDING |
|
|
|
| CORPORATE
INFORMATION |
|
|
| MODARABA
COMPANY |
|
| Allied
Management Services (private) Limited. |
|
| A
Wholly owned subsidiary of |
|
| Allied
Bank of Pakistan Limited. |
|
|
| BOARD
OF DIRECTORS |
|
|
| Mr.
Rashid M, Chaudhry |
Chairman |
|
| Mr.
M. Salim Shaikh |
Director |
|
| Syed
Jauhar Husain |
Director |
|
| Mr. I.A. Usmani |
|
Director |
|
| Mr.
Zahoor A. Siddiqui |
Director |
|
| Mr.
Akhter Ali Khan |
Director |
|
| Mr.
Tahir Saeed Effendi |
Chief Executive |
|
|
| COMPANY
SECRETARY |
|
| Mr.
Salman A. Qazalbash |
|
|
| AUDITORS |
|
| Rahim
Iqbal Rafiq & Company |
|
| Chartered
Accountants |
|
|
| Saeed
Kamran Patel & Company |
|
| Chartered
Accountants |
|
|
| BANKERS
TO THE MODARABA |
|
| Allied
Bank of Pakistan Limited. |
|
|
| PRINCIPAL
PLACE OF BUSINESS |
|
| 17th
Floor, N.I.C. Building, Abbasi Shaheed Road; |
|
| Off:
Shahrae Faisal, Karachi. |
|
| Tel: 5674024 - 6 |
|
| Fax:
5674023 & 5660136 |
|
| Email:
fabm@digicom.net.pk |
|
|
| SHARES
REGISTRAR |
|
| Uni
Corporate & Financial Services, |
|
| Westland
Trade Centre, Shaheed-e-Millat Road, |
|
| Karachi.
Tel: 4313205 - 4313206 Fax: 4313207 |
|
|
|
| CHAIRMAN'S
REVIEW |
|
|
| On
behalf of the Board of Directors of Allied Management Services (Private)
Limited, |
|
| The
Managers of First Allied Bank Modaraba, ! take pleasure in presenting the 6th |
|
| Annual
Report of First Allied Bank Modaraba together with the Audited Accounts for
the |
|
| year
ended June 30, 1999, duly approved by the Board of Directors in the meeting
held at |
|
| Karachi
on 24.11.1999. |
|
|
| FINANCIAL
RESULTS |
|
|
|
|
(Rupees in
000's) |
|
|
|
|
June, 30 |
June, 30 |
|
|
|
|
1999 |
1998 |
|
|
|
|
| Net
Profit before Management Fee |
|
|
62,831 |
74,879 |
|
| Less:
Modaraba Company's Management Fee |
|
|
622 |
741 |
|
| Profit
for the year |
|
|
62,209 |
74,138 |
|
| Less: Taxation |
|
|
4,277 |
8,000 |
|
|
|
|
------------------ |
------------------ |
|
| Net
Profit after Taxation |
|
|
57,932 |
66,138 |
|
| Add:
Unappropriated Profit brought forward |
|
|
652 |
302 |
|
|
|
|
------------------ |
------------------ |
|
| Available
for Appropriation |
|
|
58,584 |
66,440 |
|
|
|
|
========== |
========== |
|
|
|
|
|
| Appropriations: |
|
|
|
| Transfer
to Statutory Reserve |
|
|
11,586 |
13,288 |
|
| Cash Dividend |
|
|
43,750 |
52,500 |
|
| Unappropriated
Profit carried forward |
|
|
3,248 |
652 |
|
| Earning
per Certificate before Taxation & Management Fee |
|
Rs.1.79 |
Rs.2.14 |
|
| Earning
per Certificate after Taxation |
|
|
Rs.1.65 |
Rs. 1.89 |
|
| Dividend
per Certificate |
|
|
Rs.1.25 |
Rs.l.50 |
|
|
|
|
| OPERATIONS |
|
| The
economic conditions of the country during the period under review, remained |
|
| sluggish,
even then your Modaraba has achieved satisfactory results. Total Assets as
well |
|
| as
total income have increased over the previous years. Operating results are
summarized |
|
| as under: |
|
|
| Increase
in volume of business: |
|
|
|
(Rupees in
'000's) |
|
|
|
June 30, |
June 30, |
% Increase |
|
|
|
1999 |
1998 |
(Decrease) |
|
|
|
|
|
|
| Total Assets |
|
860,607 |
837,425 |
3 |
|
| Leasing (Net) |
|
275,854 |
211,508 |
30 |
|
| Musharika/Morabaha
(Net) |
|
397,414 |
422,511 |
(6) |
|
| Other Assets
including Trading Stock, Investment etc. |
187,339 |
203,406 |
(8) |
|
|
|
|
|
|
|
|
|
June, 30 |
June, 30 |
% Increase |
|
|
|
1999 |
1998 |
(Decrease) |
|
|
|
|
|
| Increase
in Income: |
|
|
|
| Total Income |
|
124,321 |
122,371 |
2 |
|
| Income
from Lease Financing |
|
38,403 |
30,201 |
27 |
|
| Income
from Musharika / Morabaha Financing |
|
67,365 |
79,242 |
(15) |
|
| Equity
/ Shares Net of Provision |
|
3,169 |
(7,044) |
145 |
|
| Trading |
|
2,485 |
3,367 |
(26) |
|
| Others |
|
12,899 |
6,605 |
(22) |
|
|
| Musharika
/ Morabaha Financing continued to be the core business segment forming 46% |
|
| share
of the total assets and contributed 54% to the total revenue generated during
the |
|
| period
under review. The lease portfolio registered a growth of 23% over the last
year. |
|
| Lease
financing forms 32% share of the total assets and it generated total revenue
of |
|
| Rs.38.403
Million, an increase of 27%, over the last year. |
|
|
| The
base of lease portfolio was widened during the last year, through micro
leasing to the |
|
| private
sector. As a result we have been able to accommodate small borrowers,
including |
|
| salaried
class persons thereby diversifying our portfolio and clientele. Recovery
position |
|
| in
respect of micro leasing is 100% and no default has occurred. It has
encouraged us to |
|
| allocate
more funds to this sector and further diversify our micro leasing. |
|
|
| During
the period, the corporate results and announcements were generally
disappointing |
|
| and
investment in various companies exposed to high risk due to low business
activities. |
|
| Hence,
the stock market remained sluggish through out the period. Since your
Modaraba |
|
| has
been pursuing a prudent policy of making full provision on account of
diminution in |
|
| the
value of stock exchange securities, hence, the adverse impact there of has
not been felt. |
|
|
| CASH
DIVIDEND |
|
| The
Board takes great pleasure in declaring a Cash Dividend @12.5% i.e. Rs.1.25
per |
|
| certificate
for the year ending June 30, 1999. The management of First Allied Bank |
|
| Modaraba
believes in distributing entire profit to its certificate holders hence, as
against |
|
| 10%
entitlement it has retained only 1% of the Profit, as management fee. |
|
|
| FUTURE
STRATEGY |
|
| In
the perspective of the revised priorities of the Government and the efforts
being made |
|
| at
domestic and international 1ĒvĒ1 we expect that economy will pick-up in near
future |
|
| thus
opening up new profitable avenues for investment. The strengthening of'
institutional |
|
| frame
work, decentralization of powers down the line and implementation of
transparent |
|
| policies
aiming at good governance will help creating healthy financial and economic |
|
| environment
and reversing the trend of falling profitability. Your Modaraba is well |
|
| poised
to avail the opportunities. |
|
|
| Anticipating
healthy investment environment the Board of Directors has approved |
|
| floating
Musharika Based Valuable Income Securities (M-VIS) of Rs. 100.00 Million for |
|
| raising
long term funds at competitive rates from capital market in a purely Islamic
way. |
|
| The
mandate for the rating of M-VIS Investment has been awarded to DCR-VIS Credit |
|
| Rating
Company Limited. |
|
|
| ACKNOWLEDGMENTS |
|
| The
Board wishes to place on record its appreciation and gratefulness to the
certificate |
|
| holders
for their continued confidence in the Modaraba, Securities and Exchange |
|
| Commission,
Registrar Modaraba Companies and Modarabas and State Bank of Pakistan |
|
| especially
NBFIs Department, for the guidance provided by them from time to time and |
|
| to
the staff' for their dedication and hard work, who made the achievement of
these results |
|
| possible. |
|
|
|
|
For and on behalf of the Board |
|
|
|
|
|
|
| Karachi |
|
|
RASHID M. CHAUDHRY |
|
| November 24, 1999 |
|
CHAIRMAN |
|
|
|
|
| RAHIM
IQBAL RAFIQ & CO. |
|
SAEED KAMRAN PATEL &
CO. |
|
| Chartered
Accountants |
|
Chartered Accountants |
|
| 180
- Sindhi Muslim Co-operative |
|
2nd Floor, Blund Markaz,
Blue Area |
|
| Housing
Society, Karachi |
|
Islamabad. |
|
|
|
|
|
| AUDITORS'
REPORT TO THE CERTIFICATE HOLDERS |
|
|
| We
have audited the annexed Balance Sheet as at June 30, 1999 and the related
Profit and Loss Account |
|
| and
Cash Flow Statement, together with the notes to the accounts for the year
then ended June 30, 1999 |
|
| of
First Allied Bank Modaraba which are Modaraba Company's [Allied Management
Services (Private) |
|
| Limited]
representation and we state that we have obtained all the information and
explanations which |
|
| we
required and alter due verification thereof we report that: |
|
|
| (a)
In our opinion, proper books of accounts have been kept by the Modaraba
Company in respect |
|
| of
First Allied .Bank 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, 1081; 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
arc in agreement with the books of account, exhibits respectively a true and
fair |
|
|
| view
of the state of the Modaraba's affairs as at June 30, 1999; and the profit
and the |
|
|
| changes
in financial position 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, investment made and expenditure incurred by the
Modaraba |
|
| are
in accordance with the Objects, terms and conditions of the Modaraba. |
|
|
|
|
RAHIM IQBAL RAFIQ & CO. |
|
SAEED KAMRAN PATEL & CO, |
|
|
|
Chartered Accountants |
|
Chartered Accountants |
|
|
|
| Karachi: |
|
| Dated:
Nov, 24, 1999. |
|
|
|
| BALANCE
SHEET AS AT JUNE 30, 1999 |
|
|
|
|
|
1999 |
1998 |
|
|
|
Note |
Rupees |
Rupees |
|
| CAPITAL
AND RESERVES |
|
|
|
|
|
|
|
| Authorised |
|
|
|
| 50,000,000
(1997: 50,000,000) |
|
|
|
| Modaraba
certificates of Rs. 10/-each |
|
500,000,000 |
500,000,000 |
|
|
|
|
========== |
========== |
|
|
|
|
|
|
| Issued,
Subscribed, and Paid - up capital |
|
3 |
350,000,000 |
350,000,000 |
|
| Statutory
Reserve |
|
4 |
71,074,746 |
59,488,243 |
|
| Unappropriated
profit |
|
|
3,248,270 |
652,263 |
|
|
|
|
|
|
|
|
424,323,016 |
410,140,506 |
|
| LONG
TERM MUSHARIKA FINANCE |
|
5 |
300,000,000 |
270,000,000 |
|
| LONG
TERM SECURITY DEPOSITS |
|
|
23,195,385 |
26,640,948 |
|
|
|
|
|
|
|
| CURRENT
LIABILITIES |
|
|
|
| Short
Term Musharika Finance |
|
6 |
28,000,000 |
33,000,000 |
|
| Current
portion of Long Term Security |
|
|
| Deposits |
|
|
8,624,860 |
-- |
|
| Accrued
and Other Liabilities |
|
7 |
22,113,975 |
21,392,387 |
|
| Unclaimed Profit |
|
|
9,599,760 |
7,451,138 |
|
| Proposed
Profit Distribution |
|
|
43,750,000 |
52,500,000 |
|
| Taxation |
|
|
1,000,000 |
16,300,000 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
113,088,595 |
130,643,525 |
|
|
|
|
------------------ |
------------------ |
|
| CONTINGENCIES
& COMMITMENT |
|
8 |
|
|
|
|
|
860,606,996 |
837,424,979 |
|
|
|
|
========== |
========== |
|
|
| FIXED
ASSETS - TANGIBLE |
|
9 |
158,590 |
219,050 |
|
| DEFERRED
COSTS |
|
10 |
-- |
955,416 |
|
|
|
|
|
| NET
INVESTMENT IN |
|
|
|
| LEASE
FINANCE |
|
11 |
206,111,511 |
168,754,841 |
|
|
|
|
|
| LONG
TERM MUSHARIKA |
|
12 |
73,759,010 |
81,170,571 |
|
| FINANCE |
|
|
|
|
|
|
|
| LONG
TERM INVESTMENT |
|
13 |
28,399,000 |
25,619,000 |
|
| LONG
TERM DEPOSIT |
|
14 |
400,000 |
-- |
|
|
|
|
|
|
| CURRENT
ASSETS |
|
|
|
| Stock
- in - Trade |
|
|
4,598,415 |
17,875,367 |
|
| Trade
Debts - Secured |
|
15 |
10,254,251 |
11,415,256 |
|
| Current
Portion of Long Term Assets |
|
16 |
110,925,764 |
97,053,330 |
|
| Short
Tern Morabaha Finance - Secured |
|
17 |
25,000,000 |
55,000,000 |
|
| Short
Tern Musharika Finance - Secured |
|
18 |
257,472,649 |
232,039,806 |
|
| Short
Term Investments |
|
19 |
23,759,005 |
18,122,093 |
|
| Accrued Profit |
|
20 |
98,974,260 |
58,708,716 |
|
| Advances,
Prepayments, and |
|
|
|
| Other
Receivables |
|
21 |
5,293,095 |
13,171,942 |
|
| Cash
and Bank Balance |
|
22 |
15,501,446 |
57,319,585 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
551,778,885 |
560,706,101 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
860,606,996 |
837,424,979 |
|
|
|
|
========== |
========== |
|
| The
annexed notes form an integral part of these financial statements. |
|
|
|
Tahir Saeed Effendi |
|
Akhter Ali Khan |
|
I.A. Usmani |
|
|
Chief Executive |
|
Director |
|
Director |
|
|
|
| PROFIT
AND LOSS ACCOUNT |
|
| FOR
THE YEAR ENDED JUNE 30, 1999 |
|
|
|
|
1999 |
1998 |
|
|
Note |
Rupees |
Rupees |
|
|
|
|
| INCOME |
|
|
23 |
115,295,075 |
116,748,634 |
|
|
|
|
|
| EXPENDITURES |
|
|
|
| Operating
Expenses |
|
24 |
5,706,437 |
5,439,730 |
|
| Financial
Charges |
|
|
52,405,061 |
38,439,175 |
|
| Adjustment
in Provision for diminution in the |
|
|
|
|
| Value
of Short Term Investments |
|
|
(3,167,345) |
775,822 |
|
| Provision
for doubtful debts |
|
|
3,378,121 |
3,613,000 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
(58,322,274) |
(48,267,727) |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
56,972,801 |
68,480,907 |
|
|
|
|
|
|
| OTHER
INCOME |
|
25 |
5,859,068 |
6,398,620 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
62,831,869 |
74,879,527 |
|
|
|
|
| Modaraba
Company's Management Fee |
|
26 |
(622,098) |
(741,381) |
|
|
|
|
------------------ |
------------------ |
|
| Profit
for the year before taxation |
|
62,209,771 |
74,138,146 |
|
|
|
|
| Provision
for Taxation |
|
27 |
|
|
| -Prior |
|
|
3,277,261 |
-- |
|
| -Current |
|
|
1,000,000 |
8,000,000 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
(4,277,261) |
(8,000,000) |
|
|
|
|
------------------ |
------------------ |
|
| Profit
for the year after taxation |
|
|
57,932,510 |
66,138,146 |
|
| Unappropriated
Profit brought forward |
|
|
652,263 |
302,182 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
58,584,773 |
66,440,328 |
|
|
|
|
|
|
| APPROPRIATION |
|
|
|
| Transferred
to Statutory Reserves |
|
|
(11,586,503) |
(13,288,065) |
|
| Amount
of profit distribution @ 12.5 % |
|
|
|
| (1998
- Amount of profit distribution @ 15%) |
|
(43,750,000) |
(52,500,000) |
|
|
|
|
------------------ |
------------------ |
|
| Unappropriated
Profit carried forward |
|
3,248,270 |
652,263 |
|
|
|
========== |
========== |
|
| Earning
Per Share - Basic |
|
28 |
1.65 |
1.89 |
|
|
|
|
|
|
|
|
|
|
|
| These
accounts should be read in conjunction with the annexed notes. |
|
|
|
Tahir Saeed Effendi |
|
Akhter Ali Khan |
|
I.A. Usmani |
|
|
Chief Executive |
|
Director |
|
Director |
|
|
|
| STATEMENT
OF CHANGES IN FINANCIAL POSITION |
|
| (CASH
FLOW STATEMENT) |
|
| FOR,
THE YEAR ENDED JUNE 30, 1999 |
|
|
|
|
|
1999 |
1998 |
|
|
|
|
Rupees |
Rupees |
|
|
|
|
| CASH
FLOW FROM OPERATING ACTIVITIES |
|
|
| Profit
for the year |
|
|
62,209,771 |
74,138,146 |
|
|
|
|
|
|
| Adjustment for: |
|
|
|
|
|
| Amortization
of deferred cost |
|
955,416 |
636,044 |
|
| Depreciation |
|
85,460 |
80,460 |
|
| Diminution
in value of investments - net |
|
(3,167,345) |
775,822 |
|
| Financial
Charges |
|
52,405,061 |
38,439,175 |
|
| Provision
for doubtful debts |
|
3,378,121 |
3,613,000 |
|
|
|
------------------ |
------------------ |
|
|
|
53,656,713 |
43,545,101 |
|
|
|
------------------ |
------------------ |
|
|
|
115,866,484 |
117,683.25 |
|
|
|
|
|
|
| CHANGES
IN WORKING CAPITAL |
|
|
|
|
|
|
| (INCREASE)/DECREASE
IN CURRENT ASSETS |
|
|
| Stock - in - trade |
|
|
13,276,952 |
22,893,170 |
|
| Trade debts |
|
|
(91,286) |
(7,276,560) |
|
| Short
term morabaha finance |
|
30,000,000 |
24,313,000 |
|
| Short
term musharika finance |
|
(25,432,843) |
(64,048,206) |
|
| Short
term investments |
|
(2,469,567) |
22,598,867 |
|
| Certificate
of investment |
|
-- |
10,000,000 |
|
| Accrued profit |
|
|
(40,265,544) |
(15,274,739) |
|
| Advances,
prepayments & other receivables |
|
7,878,847 |
(2,186,777) |
|
|
|
|
------------------ |
------------------ |
|
| Net
(Increase) / decrease in current assets |
|
(17,103,441) |
(8,981,245) |
|
|
|
|
|
| INCREASE
/ (DECREASE) IN CURRENT LIABILITIES |
|
| Security
deposits |
|
-- |
(152,000) |
|
| Current
portion of long term security deposits |
|
8,624,860 |
-- |
|
| Accrued
& other liabilities |
|
(5,156,768) |
6,505,047 |
|
|
|
|
------------------ |
------------------ |
|
| Net
Increase / (decrease) in current liabilities |
|
|
3,468,092 |
6,353,047 |
|
|
|
|
------------------ |
------------------ |
|
| Cash
(outflow)/generated from operation |
|
|
102,231,134 |
115,055,049 |
|
|
|
|
|
|
|
|
|
|
|
1999 |
1998 |
|
|
|
|
|
Rupees |
Rupees |
|
|
|
|
| Dividend paid |
|
|
(50,351,378) |
(50,393,096) |
|
| Taxes paid |
|
|
(19,577,261) |
-- |
|
| Financial
Charges paid |
|
(46,526,704) |
(35,012,807) |
|
| Long
term security deposits received |
|
|
(3,445,563) |
9,857,396 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
119,900,906) |
(75,548,507) |
|
|
|
|
------------------ |
------------------ |
|
| Net
cash (used in) / from operating activities |
|
|
(17,669,772) |
39,506,542 |
|
|
|
|
|
| CASH
FLOW FROM INVESTING ACTIVITIES |
|
|
|
|
|
| Purchased
fixed assets |
|
|
(25,000) |
(173,281) |
|
| Long
term musharika finance |
|
|
20,354,064 |
(54,675,363) |
|
| Deferred
expenditure |
|
|
-- |
(41,250) |
|
| Long
term investments |
|
|
(2,780,000) |
(23,619,000) |
|
| Long
term deposit |
|
|
(400,000) |
-- |
|
| Assets
leased out |
|
|
(66,297,431) |
(80,965,843) |
|
|
|
|
------------------ |
------------------ |
|
| Net
cash used in investing activities |
|
|
(49,148,367) |
(159,474,737) |
|
|
|
|
|
|
| CASH
FLOW FROM FINANCING ACTIVITIES |
|
|
|
|
|
| Musharika
finance obtained |
|
25,000,000 |
150,000,000 |
|
|
|
------------------ |
------------------ |
|
| Net
cash from financing activities |
|
25,000,000 |
150,000,000 |
|
|
|
|
|
------------------ |
------------------ |
|
| Net
increase / (decrease) in cash & bank balances |
|
|
(41,818,139) |
30,031,805 |
|
|
|
