| First Al-Noor Modaraba |
|
|
|
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|
|
|
| Annual
Report 1999 |
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| CONTENTS |
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| Corporate
Information |
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| Directors
Report |
|
| Auditor's
Report |
|
| Profit
and Loss Account |
|
| Statement
of changes in Financial Position |
|
| Notes
to the Financial Statements |
|
| Pattern
of Certificate Holding |
|
|
|
|
|
| CORPORATE
INFORMATION |
|
|
| BOARD
OF DIRECTORS |
|
|
| Mr.
Ismail H. Zakaria |
Chairman |
|
|
| Mr.
S.M. Aminullah |
Chief Executive |
|
|
| Mr.
Ellias H. Zakaria |
Director |
|
|
| Mr.
Yusuf Ayoob |
Director |
|
|
| Mr.
Suleman Ayoob |
Director |
|
|
| Mr.
A. Aziz Ayoob |
Director |
|
|
| Mr.
Zohair Zakaria |
Director |
|
|
| Mr.
Zain Ayoob |
Director |
|
|
| Mr.
Qaisar P. Mufti |
Director |
|
|
|
| MODARABA
MANAGEMENT COMMITTEE |
|
|
| Mr.
Ismail H. Zakaria |
Chairman |
|
| Mr.
S.M. aminullah |
Chief Executive |
|
| Mr.
Zohair Zakaria |
Director |
|
| Mr.
Zain Ayoob |
Director |
|
| Mr.
Yakoob Admaney |
Company Secretary |
|
| Mr.
M. Iqbal Ghazipur |
Executive vice President |
|
|
| SECRETARY |
|
| Mr.
M. Yakoob Admaney |
|
|
| AUDITORS |
|
| Khalid
Majid Husain Rahman |
|
| Chartered
Accountants |
|
|
| LEGAL
ADVISORS |
|
| Chundrigar
& Co. |
|
|
| BANKERS |
|
| Al-Baraka
Islamic Investment Bank Limited |
|
| Bank
of America |
|
| Citibank, N. A. |
|
| Credit
Agricole Indosuez |
|
| Habib
Bank Limited |
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| Metropolitan
Bank Limited |
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| Muslim
Commercial Bank Limited |
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| National
Bank of Pakistan |
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| Prime
Commercial Bank Limited |
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| REGISTERED
OFFICE |
|
| First
Al-Noor Modaraba |
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| 96-A,
Sindhi Muslim Society |
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| Karachi. |
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| Telephone
No(s): |
455 8268 |
455 3067 |
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|
455 2974 |
455 2943 |
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| Telex |
|
20357 Noor PK |
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| Fax |
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455 3137 |
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| INVESTORS
INFORMATION |
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| STOCK
EXCHANGE LISTING |
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| First
Al-Noor Modaraba is listed on the Stock |
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|
| Exchanges
of Karachi & Lahore. |
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| Daily
quotations on the Modaraba Stock |
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| can
be obtained from leading newspapers. |
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| First
Al-Noor Modaraba is listed under |
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|
| "Modaraba". |
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| CERTIFICATE
HOLDERS INFORMATION |
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| Enquiries
concerning lost Modaraba |
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| certificates,
dividend payments, change of |
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| address,
verification of transfer deeds and |
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| certificate
transfer should be directed to our |
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| Registered
Office. |
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|
|
| SEVENTH
REPORT OF THE DIRECTORS OF |
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| MODARABA
COMPANY FOR THE YEAR ENDED JUNE 30, 1999 |
|
|
| The
Board of Directors of Al-Noor Modaraba Management (Private) Limited the |
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| Management
Company of First AI-Noor Modaraba (FAM) has pleasure in presenting |
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| the
Seventh Directors' report of FAM together with audited accounts for the year
ended |
|
| June
30, 1999. |
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|
| FINANCIAL
RESULTS: |
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|
| Financial
results are summarized below: |
|
|
|
|
|
|
Year ended |
Year ended |
|
|
|
|
|
30.06.1999 |
30.06.1998 |
|
|
|
|
| Profit
after taxation |
|
|
16,461,853 |
11,158,767 |
|
| Add:
Unappropriated profit brought forwards |
|
|
2,603,227 |
76,214 |
|
|
|
|
------------------ |
------------------ |
|
| Profit
available for appropriation |
|
|
19,065,080 |
11,234,981 |
|
|
|
|
|
|
| Appropriation: |
|
|
|
|
| Profit
Distribution @ 7 1/2 % (1998: 5%) |
|
|
15,750,000 |
10,500,000 |
|
| Statutory
Reserve |
|
|
3,292,370 |
2,231,754 |
|
| General
Reserve |
|
|
-- |
(4,100,000) |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
19,042,370 |
8,831,754 |
|
|
|
|
------------------ |
------------------ |
|
| Unappropriated
profit carried forward |
|
|
22,710 |
2,603,227 |
|
|
|
|
|
========== |
========== |
|
|
| PROFIT
DISTRIBUTION |
|
| The
Boards in its meeting held on December 22, 1999 has approved the distribution
of |
|
| profit
of Rs. 0.75 (7 1/2%) per certificate of Rs. 10 each, subject to deduction of
zakat |
|
| and
tax at source where applicable, for the year ended June 30, 1999. |
|
|
| An
amount of Rs. 3,292,370 has been transferred to statutory reserve in
compliance with |
|
| statutory
requirements. |
|
|
| REVIEW
OF OPERATIONS |
|
| Net
profit for the year ended June 30, 1999 of Rs. 16,461,853 was 47.52% higher
than |
|
| the
profit during the corresponding period of last year. This performance has
been |
|
| achieved
against a backdrop of difficult and uncertain economic conditions by
optimizing |
|
| all
available avenues particularly tight control over operating expenses and
aggressive |
|
| but
practical financial strategies. |
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|
| TAXATION |
|
| The
Finance Act 1999 has brought an amendment whereby the income of Modaraba on |
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| account
of trading shall be treated as a separate block of income under presumptive
tax |
|
| regime
under sections 80 C and 80 CC at the applicable rates. As a result we had to |
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| provide
an additional amount of Rs. 25 million under the head "taxation".
The effective |
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| rate
of current year taxation is 74% as against 25% concessional rate of tax made |
|
| applicable
for modaraba by the Government. In fact our pay out to certificate holders |
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| would
have been atleast 20%, if we were subject to normal rate of taxation
applicable |
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| to Modarabas. |
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|
| MILLENNIUM
COMPLIANCE |
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| FAM
has taken all necessary steps in order to address the millennium compliance
issue |
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| of Y2K. |
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|
| BUSINESS
OUTLOOK |
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| The
expected turnaround in the economy did not materialize during the year under
review |
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| due
to continuing recession. The upcoming year is of special significance with
reference |
|
| to
country's economy which is likely to remain under pressure internally as well
as |
|
| externally.
The steps to revive the economy would hopefully provide positive results in |
|
| due
course but it will take some time for economy to feel any real impact
thereof. |
|
|
| While
your Modaraba has mobilized arrangements for substantial resources yet your |
|
| Board
has decided to exercise extreme caution in handing trading business to ensure |
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| to
maintain the business growth. A fine balance of energetic efforts and
professional |
|
| prudence
is needed to be maintain of which your management is fully aware of and |
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| capable
to achieve. |
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|
| ACKNOWLEDGMENT |
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| The
Boards thanks the regulatory authorities for their continuous guidance and |
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| co-operation
and placed on record its appreciation of the services rendered by the |
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| staff
members for their hard work, dedication and commitment in discharge of their |
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| responsibilities
in a difficult situation. |
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| AUDITORS |
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| The
present auditors Messrs Khalid Majid Hussain Rehman & Company, Chartered |
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| Accountants
being due for retirement, have offered themselves for re-appointment for |
|
| the
year ending June 30, 2000. Subject to approval by Registrar of Modaraba
Companies |
|
| &
Modarabas, their appointment has been confirmed by the Board. |
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|
On behalf of the Board |
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|
S. M. AMINULLAH |
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| Karachi:
December 22, 1999 |
|
Chief Executive |
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| AUDITOR'S
REPORT TO CERTIFICATE HOLDERS |
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| We
have audited the annexed Balance Sheet as at June 30, 1999 and the related
Profit |
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| and
Loss Account and Statement of Changes in Financial Position together with the
Notes |
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| to
the Financial Statements for the year ended June 30, 1999 of First Al-Noor
Modaraba |
|
| which
are Modaraba Company's [Al-Noor Modaraba Management (Private) 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 |
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| in
respect of First Al-Noor Modaraba as required by the Modaraba Companies |
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| and
Modaraba (Floatation and Control) Ordinance, 1980, and Modaraba Companies |
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| and
Modaraba Rules, 1981; |
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|
|
|
|
|
| b)
in our opinion, the Balance Sheet and the Profit and Less Account have been |
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| drawn
up in conformity with the Modaraba Companies and Modaraba (Floatation |
|
| and
Control) Ordinance, 1980, and Modaraba Companies Rules, 1981; and |
|
|
| 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 Statement |
|
|
| of
Changes in Financial Position, which are in agreement with the books |
|
|
| of
account, exhibit respectively a true and fair view of the state of the |
|
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| Modaraba's
affairs as at June 30, 1999 and the profit and the changes in |
|
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| the
financial position for the year ended on that date; |
|
|
|
| ii)
Zakat deductible at source under the Zakat and Ushr Ordinance, 1980; |
|
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| was
deducted and deposited in the Central Zakat Fund under Section 7 |
|
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| of
that Ordinance; and |
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|
|
|
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| iii)
the business conducted, investments made and expenditure incurred by |
|
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| the
Modaraba are in accordance with the objects, terms and conditions |
|
|
| of
the Modaraba. |
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|
|
|
|
|
|
|
Khalid Majid Husain Rahman |
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| Karachi:
December 22, 1999 |
|
Chartered Accountants |
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|
|
|
| BALANCE
SHEET AS AT JUNE 30, 1999 |
|
|
|
|
|
|
RUPEES |
|
|
Note |
1999 |
1998 |
|
|
|
|
| CAPITAL
AND RESERVES |
|
|
|
| Authorized
capital |
|
|
|
| 40,000,000
modaraba certificates of |
|
|
| Rs. 10 each |
|
|
400,000,000 |
400,000,000 |
|
|
|
|
========== |
========== |
|
| Issued,
subscribed and paid up |
|
|
|
| capital |
|
3 |
210,000,000 |
210,000,000 |
|
| Statutory
reserve |
|
4 |
20,419,709 |
17,127,339 |
|
| Unappropriated
profit |
|
|
22,710 |
2,003,227 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
230,442,419 |
229,730,566 |
|
| DEFERRED
LIABILITY - Staff gratuity |
|
|
1,179,547 |
-- |
|
|
|
|
|
|
|
| CURRENT
LIABILITIES |
|
|
|
| Short
term running finance |
|
5 |
59,987,752 |
-- |
|
| Creditors,
accrued expenses and |
|
|
|
|
| other liabilities |
|
6 |
13,854,025 |
5,086,305 |
|
| Management
fee payable |
|
|
5,108,437 |
2,368,877 |
|
| Income
tax payable |
|
|
9,578,111 |
11,545,189 |
|
| Profit payable |
|
|
15,750,000 |
10,500,000 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
104,278,325 |
29,500,371 |
|
| CONTINGENCIES |
|
8 |
-- |
-- |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
335,900,291 |
259,230,937 |
|
|
|
|
========== |
========== |
|
|
| TANGIBLE
FIXED ASSETS |
|
9 |
2,292,858 |
2,624,878 |
|
|
|
|
| CURRENT
ASSETS |
|
|
|
|
| Stock-in-trade |
|
10 |
93,900,906 |
14,652,518 |
|
| Trade debts |
|
11 |
5,346,863 |
5,597,087 |
|
| Morabaha
receivables |
|
12 |
34,098,000 |
25,627,125 |
|
| Musharika
investments |
|
13 |
65,000,000 |
-- |
|
| Investment
in listed securities |
|
14 |
18,562,620 |
19,583,955 |
|
| Short
term investments |
|
15 |
68,596,000 |
122,966,411 |
|
| Advances,
deposits, prepayments |
|
|
| and
other receivables |
|
16 |
17,846,927 |
6,382,735 |
|
| Cash
and bank balances |
|
17 |
30,256,117 |
61,796,228 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
333,607,433 |
256,606,059 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
335,900,291 |
259,230,937 |
|
|
|
|
========== |
========== |
|
| The
annexed notes form an integral part of these financial statements. |
|
|
|
Chief Executive |
|
Director |
|
Director |
|
|
|
|
|
|
| PROFIT
AND LOSS ACCOUNT |
|
| FOR
THE YEAR ENDED JUNE 30, 1999 |
|
|
|
|
|
RUPEES |
|
|
|
Note |
1999 |
1998 |
|
|
|
|
| Profit
from trading operations |
|
18 |
33,122,376 |
631,140 |
|
| Profit
from morabaha operations |
|
19 |
1,911,942 |
4,219,000 |
|
| Return
on investments |
|
20 |
27,697,461 |
23,059,752 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
62,761,779 |
27,909,892 |
|
|
|
|
------------------ |
------------------ |
|
| Operating
expenses |
|
21 |
8,915,376 |
7,473,567 |
|
| Financial
charges |
|
22 |
1,085,996 |
2,296,423 |
|
|
|
|
------------------ |
------------------ |
|
|
|
10,001,372 |
9,769,990 |
|
|
|
|
------------------ |
------------------ |
|
| Operating profit |
|
|
52,760,407 |
18,139,902 |
|
| Other income |
|
23 |
2,250,508 |
11,854,478 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
55,010,915 |
29,994,380 |
|
| (Reversal
of)/provision for diminution in |
|
|
| the
value of investments |
|
|
(1,181,891) |
3,936,736 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
56,192,806 |
26,057,644 |
|
| Modaraba
Company's management fee |
|
24 |
5,108,437 |
2,368,877 |
|
|
|
|
------------------ |
------------------ |
|
| Profit
before taxation |
|
|
51,084,369 |
23,688,767 |
|
| Provision
for taxation |
|
25 |
34,622,516 |
12,530,000 |
|
|
|
|
------------------ |
------------------ |
|
| Profit
after taxation |
|
|
16,461,853 |
11,158,767 |
|
| Unappropriated
profit brought forward |
|
|
2,803,227 |
76,214 |
|
|
|
|
------------------ |
------------------ |
|
| Profit
available for appropriations |
|
|
19,065,080 |
11,234,981 |
|
|
|
|
|
|
| APPROPRIATIONS: |
|
|
|
| Profit
distribution in cash @71/2 % (1998: @ 5%) |
|
15,750,000 |
10,500,000 |
|
| Transfer
to statutory reserve |
|
|
3,292,370 |
2,231,754 |
|
| Transfer
from general reserve |
|
|
-- |
(4,100,000) |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
19,042,370 |
8,631,754 |
|
|
|
|
------------------ |
------------------ |
|
| Unappropriated
profit carried forward |
|
|
22,710 |
2,603,227 |
|
|
|
|
========== |
========== |
|
| Earnings
per certificate - Basic |
|
26 |
0.78 |
0.53 |
|
|
|
|
|
|
|
|
|
| The
annexed notes form an integral part of these financial statements. |
|
|
|
Chief Executive |
|
Director |
|
Director |
|
|
|
| STATEMENT
OF CHANGES IN FINANCIAL POSITION |
|
| (CASH
FLOW STATEMENT) |
|
| FOR
THE YEAR ENDED JUNE 30, 1999 |
|
|
|
|
|
RUPEES |
|
|
|
|
Note |
1999 |
1998 |
|
|
|
|
| Cash
flows from operating activities |
|
27 |
(154,952,391) |
32,703,868 |
|
|
|
|
|
| Cash
flows from investing activities |
|
|
| Additions
to fixed assets |
|
(214,325) |
(326,100) |
|
| Sale
proceeds of fixed assets |
|
200,000 |
200,000 |
|
|
|
------------------ |
------------------ |
|
| Dividend
received |
|
380,374 |
775,828 |
|
|
|
|
| Return
on investment in portfolio management |
|
|
| schemes |
|
5,968,939 |
16,605,901 |
|
|
|
|
|
| Return
on certificate of investment under |
|
|
|
| PLS
term deposit |
|
-- |
165,487 |
|
|
|
|
| Return
on musharika investments |
|
10,991,918 |
-- |
|
| Investment
in listed securities |
|
2,203,226 |
34,074,942 |
|
|
|
------------------ |
------------------ |
|
| Net
cash from investing activities |
|
19,530,132 |
51,496,058 |
|
|
|
|
|
| Cash
flows from financing activities |
|
|
| Dividend paid |
|
|
(10,476,015) |
(15,750,000) |
|
|
|
------------------ |
------------------ |
|
| Net
cash (used in) financing activities |
|
(10,476,015) |
(15,750,000) |
|
|
|
------------------ |
------------------ |
|
| Net
(decrease)/increase in cash and cash |
|
|
|
| equivalents |
|
(145,898,274) |
68,449,926 |
|
|
|
|
|
| Cash
and cash equivalents at beginning |
|
|
|
| of the year |
|
184,762,639 |
116,312,713 |
|
|
|
|
|
|
| Cash
and cash equivalents at end of |
|
|
------------------ |
------------------ |
|
| the year |
|
28 |
38,864,365 |
184,762,639 |
|
|
|
|
========== |
========== |
|
|
| The
annexed notes from an integral part of these financial statements. |
|
|
|
Chief Executive |
|
Director |
|
Director |
|
|
|
| NOTES
TO THE FINANCIAL STATEMENTS |
|
| FOR
THE YEAR ENDED JUNE 30, 1999 |
|
|
| 1.
LEGAL STATUS AND NATURE OF THE BUSINESS |
|
| First
Al-Noor Modaraba was formed under the Modaraba Companies and Modaraba |
|
| (Flotation
and Control) Ordinance, 1980 and the Rules framed there under end is |
|
| managed
by Al-Noor Modaraba Management (Pvt) Limited, the Modaraba Company. |
|
| The
Modaraba was floated on October 19, 1992 and commenced business on |
|
| November
2, 1992. The Modaraba is a multipurpose, perpetual modaraba and is |
|
| currently
engaged in financing, investing, and domestic and international trading |
|
| activities.
The Modaraba is listed on the Karachi and Lahore Stock Exchanges. |
|
|
| 2.
SIGNIFICANT ACCOUNTING POLICIES |
|
|
|
|
| 2.1
Accounting Convention |
|
|
|
| These
financial statements have been prepared under the historical cost |
|
| convention. |
|
|
|
|
|
|
|
|
|
| 2.2
Staff gratuity |
|
|
|
| The
Modaraba operates an unfunded gratuity scheme covering all |
|
|
| permanent
employees. Provision to cover this obligation is made annually |
|
|
| and
is calculated on the basis of last drawn salary and length of service |
|
|
| of
the employees. |
|
|
|
|
| 2.3
Fixed assets and Depreciation |
|
| Fixed
assets are stated at cost less accumulated depreciation. Depreciation |
|
| is
charged to income applying reducing balance method whereby cost of an |
|
| assets
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. Maintenance and normal repairs are charged to income |
|
| as
and when incurred. Gains and losses, if any, on disposal of fixed assets |
|
| are
taken to profit and loss account. |
|
|
| 2.4
Stock - in - Trade |
|
|
|
| Finished
goods are valued at the lower of cost determined oil the first-in-first- |
|
| out
basis and net realizable value except goods in transit which are stated |
|
| at
invoice value plus other charges paid thereon. Net realizable value |
|
| signifies
the selling price in the ordinary course of business less cost of |
|
| completion
and cost necessarily to be incurred to make the sale. |
|
|
|
| Packing
material are valued at moving average cost. |
|
|
|
|
|
| 2.5 Investments |
|
|
|
| Investments
in listed securities are carried at the lower of cost and market |
|
|
| value
determined on aggregate portfolio basis. |
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|
|
|
|
|
| Other
investments are carried at cost. |
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|
|
|
| Gains
and losses on disposal of investments are taken to profit and loss account. |
|
|
| 2.6
Revenue recognition |
|
|
| a)
Sales are recognized on dispatch of goods to customers. |
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|
|
|
|
| b)
Dividend income is recognized when right to receive dividend is established. |
|
| Until
last year, it was recognized on receipt basis. Had there been no |
|
| change
in policy, the income for the year would have been reduced by |
|
| Rs.
58,783. |
|
|
|
|
|
|
| c)
Return on investments and deposits with banks are recognized on |
|
| accrual basis. |
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|
|
|
| 2.7 Taxation |
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|
| 2.7.1 Current |
|
| Provision
for current taxation is based on taxable income at the |
|
| current
rates of taxation after taking into account tax credits available, |
|
| it
any, except for items covered under presumptive tax regime, for |
|
| which
provision is made according to the presumptive tax rates, |
|
| provided
in the Income Tax Ordinance. 1979. |
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|
| 2.7.2 Deferred |
|
