PakSearch.com - Pakistan's Best Business site with Annual Reports, Laws and Articles

For business information, annual reports, laws, ordinances, regulations and articles.

KHADIM ALI SHAH BUKHARI

& CO. LIMITED

Annual Report 1994-95

CONTENTS

Page No.

COMPANY INFORMATION

Board of Directors

Nasir Ali Shah Bukhari

(Chairman and Chief Executive)

Arif Ali Shah Bukhari

Qazi Mazharul Haque

Zahid Q. Noorani

Waqar Ahmed Siddiqui

Shabbir Hamza Khandwala

Mohammad Saleem

Company Secretary

Qazi Mazharul Haque

Auditors

Taseer Hadi Khalid & Co.

Legal Advisors

Bawaney & Partners

Registered Office

94-95, Stock Exchange Building

Stock Exchange Road

Karachi-74000, Pakistan

Ph: 2412911-4 & 111-222-000

Fax: (92-21) 2415762

Corporate Office

6th Floor, Trade Centre

I.I. Chundrigar Road,

Karachi-74200, Pakistan

Ph: 2635501 (10 lines) & 111-222-000

Fax: (92-21) 2630202

Islamabad Office

Suite C, 1st. Floor, Saudi Pak Tower

61-A, Jinnah Avenue, Blue Area

Islamabad-44000, Pakistan

Ph: 821870-71 & 111-222-000

Fax: (92-51) 811940

Lahore Office

Suite # 1, 2nd Floor, Centre Point

Main Boulevard, Gulberg III

Lahore-54660, Pakistan

Ph: 5763087-89 & 111-222-000

Fax: (92-42) 5756865

Registrar and Share

THK Associates (Pvt.) Ltd.

Transfer Office

Shaikh Sultan Trust Bldg No.2, Beaumont Road

Karachi-75530. Pakistan

Key Personnel

G. Mustafa Noor

Assim Jang

Zahid Rafique

Syed Tahir Ali

Syed Ijaz Haider

Khadim Ali Shah Bukhari & Co. Limited

BOARD OF DIRECTORS

Mr. Arif Ali Shah Bukhari

Mr. Nasir Ali Shah Bukhari

Mr. Oazi Mazharul Haque

Mr. Mohammad Saleem

Mr. Zahid Q. Noorani

Mr. Shabbir Hamza Khandwala

NOTICE OF ANNUAL GENERAL MEETING

Notice is hereby given that the Fourth Annual General Meeting of Khadim Ali Shah Bukhari & Co. Limited will be

held on Saturday, December 9, 1995 at 10:00 a.m. at the Corporate Office of the Company, 6th Floor, Trade Centre,

I.I. Chundrigar Road, Karachi to transact the following business:

Ordinary Business:

To confirm the minutes of the Third Annual General Meeting of the Company held on November 27, 1994.

To receive, consider and adopt the audited accounts of the Company together with the Directors' and the

Auditors' reports thereon for the year ended June 30, 1995

To approve payment of cash dividend of Re. 0.50 per share (@ 5%) as recommended by the Board of Directors.

To elect 7 (seven) directors of the Company, as fixed by the Board of Directors, in accordance with the

provisions of section 178 of the Companies Ordinance, 1984 for a term of three years. The retiring directors are

i) Mr. Nasir Ali Shah Bukhari, ii) Mr. Arif Ali Shah Bukhari, iii) Mr. Qazi Mazharul Haque, iv) Mr. Zahid Q.

Noorani, v) Mr. Waqar Ahmed Siddiqui. vi) Mr. Shabbir Hamza Khandwala; and vii) Mr. Mohammad .Saleem.

To appoint auditors of the company for the year ending June 30, 1996 and to fix their remuneration. The present

auditors, Messrs Taseer Hadi Khalid & Co., Chartered Accountants, retire and being eligible, offer themselves

for reappointment.

Special Business:

To approve the issue of bonus shares in the ratio of one ordinary share for every ten ordinary shares held (10%)

as recommended by the Board of Directors and, if thought fit, to pass with or without modification(s) the

following resolution:

"Resolved that a sum of Rs. 10,108,800 out of the share premium of the Company be capitalized and be applied

for the issue of 1,010,880 ordinary shares of Rs. 10 each and allotted as fully paid up bonus shares to the

members of the Company, who are registered in the books of the Company as at November 27, 1995, in the

proportion of one ordinary share for every ten ordinary shares held and that such new ordinary shares shall rank

pari-passu with the existing ordinary shares of the Company."

To consider any other business with the permission of the Chair.

A statement under section 160 of the Companies Ordinance, 1984 setting up all material facts concerning the

resolution contained in item 6 of the notice which will be considered for adoption at the meeting is annexed to this

notice of meeting being sent to members.

By order of the Board

Karachi:

QAZI MAZHARUL HAQUE

November 12, 1995

Company Secretary

NOTES:

The share transfer books of the company will remain closed from November 27, 1995 to December 9, 1995

(both days inclusive) for determining entitlement of dividend and bonus shares.

A member entitled to attend and vote at the meeting is entitled to appoint a proxy to attend, speak and vote for

him/her. A proxy must be a member of the Company.

In order to be valid, an instrument of proxy and the power of attorney or other authority (if any) under which it

is signed, or a notarially certified copy of such power of attorney, must be deposited at the Registered Office of

the Company, 94-95, Stock Exchange Building, Stock Exchange Road, Karachi not less than 48 hours before

the time of the meeting.

Members are requested to notify any change in their registered addresses immediately.

STATEMENT UNDER SECTION 160 OF THE COMPANIES ORDINANCE, 1984

This statement is annexed to the notice of the Fourth Annual General Meeting of Khadim Ali Shah Bukhari &

Co. Limited to be held on December 9, 1995 at which certain special business is to be transacted. The special

business is to issue bonus shares. The purpose of this statement is to set for the material facts concerning such

special business.

Item 6 of the Agenda

The Board of Directors recommend that taking Into account the financial position of the Company the issued

capital of the Company be increased by capitalization of Rs. 10,108,800 out of the share premium of the

Company to enable issue of bonus shares in the ratio of one ordinary share for every ten ordinary shares held.

The directors of the Company are interested in the business to the extent of their entitlement to bonus shares as

shareholders.

DIRECTORS' REPORT TO THE SHAREHOLDERS

The Directors take pleasure in placing their report and

audited accounts for the year ended June 30, 1995. The

total revenue has fallen from Rs. 136.47 million in 1994 to

Rs. 95.19 million in 1995 resulting in an after tax profit of

Rs. 3.51 million against Rs. 79.25 million for the preceding

year.

The basic reason for this fall in revenue is decline in equity

brokerage, earnings from our trading position, rise in our

administrative expenses and provision for diminution in

value of investments. The third and fourth quarter of the

fiscal year saw a steep fall in our revenue as market

witnessed significant fall in values and volumes as well.

By resolutely focusing on clients' needs and our efforts to

act as their trusted advisors, KASB has always endeavored

for shareholder value. The year in review has, however,

been marred by continuing political unrest, a prolonged

recession in textile sector and global impact of Mexican

crisis affecting Pakistan's capital market.

In general terms, your company grew from total staff of

106 professionals at the end of financial year 1994 to a

total of 159 professionals at the end of this financial year.

In order to serve clients in the capital city of Pakistan,

Islamabad and provincial capital of Punjab, Lahore,

branches have been established there and they have come

into full operation during the year. It is in line with our

objectives to provide every Pakistani a chance to reap the

benefits of our growing capital markets. We have also

added more professionals in our sales team to further

strengthen our existing efforts. Our activities in corporate

finance and investment advisory areas have also now been

well established.

As a result of our investments in these areas, total costs

increased significantly, with administration expenses of Rs.

70 million compared with Rs. 51 million in the preceding

year. This reflects the fact that despite the slowdown in

overall activity, we chose to continue our investment to

improve the quality of our service to clients. This fact is

also reflected in our selection by Euromoney as "the Best

Domestic Securities Firm in Pakistan" for the second year

in a row.

The equity market has continued to fall since beginning of

fiscal year '95, with the KSE 100 Index losing

approximately 31% sliding from 2333 points on July 1,

1994 to 1611 points on June 30, 1995. This long spell of

decline, due to political unrest in the country coupled with

global crisis of confidence in the emerging markets, has

adversely affected our brokerage revenue.

The portfolio that your company maintains is divided into

three basic areas;

1. Short term special situation and unquoted new issues.

2. Re-rating opportunities and

3. Long term investments

Although we are able to take advantage of a number of

opportunities in categories 1 and 2, the overall effect on the

profit for the year of the provision for diminution in these

categories is Rs. 13.683 million. However, we have chosen

quite deliberately to hold onto certain stocks that we believe

will rebound in the coming months.

Our Equities business is the core of the company, and our

strength in this area will continue to provide the bulk of the

growth that we expect to see in the near and medium term.

We are adding a new trading floor at Karachi to cater to the

needs of our high net worth and retail clients. Moreover,

efforts are continuing to add on to new branches in our

network. Our equity business has been further strengthen

by investing in communication and computer systems

enabling our sales and settlement departments to handle a

much larger client base and higher volumes. The new

system enables them on-line monitoring of clients' position

and improves our ability to provide better service to clients

through on-line access to critical account information.

Our focus and investment in providing high quality

research for our clients and for our various departments

cannot be overstated. Our research output has increased in

both quality and scope. We now have the largest research

department covering capital markets of Pakistan and

Bangladesh.

The growing needs of raising capital in the country,

provides us an opportunity to play our due role. Our

Corporate Finance Department has established its

credentials in the market, providing a solid foundation for

future growth. The efforts of the government towards

economic democracy has led to privatization of various

corporations and public utilities in the country. During the

year, our Corporate Finance Department successfully

handled the advisory for domestic offering of Pakistan

Telecommunication Corporation to general public and

employees of the corporation. It has, so far, been the

largest public offering in Pakistan. We will continue to add

selectively to the headcounts in this area. We are confident

of ongoing success in the Corporate Finance.

Our Corporate Finance Department continues to work with

Merrill Lynch on selective deals to help raise financing for

Pakistani corporates. Merrill Lynch has also been

providing on job training to our staff at their offices in

Singapore and Hong Kong.

Our Money Market and fixed income department has been

actively involved in introducing new instruments and con

tinues to be a leader in secondary market for Federal

Government securities. State Bank of Pakistan has now

allowed us SGL facilities. This would enable us to attract

retail clients to trade in Federal Government securities.

Moreover, we would also be able to act as primary dealer

for these securities.

The growth of market for Term Finance Certificates pro

vides us opportunities to set the standard in client service.

We act as market makers for TFCs of renowned Pakistani

corporates, rated by PACRA. We believe this area of our

business would grow fast, and the next year will continue to

see an investment of various types of resources in it.

Foreign exchange brokerage business has continued to

shrink as it has remained restricted to Rupee-Dollar inter

bank trading. Inspite of our efforts to raise volumes, bro

kerage revenues have been below expectations due to cuts

in brokerage rates. Unless corporates and other businesses

are brought into this market, forex business is likely to

remain under pressure.

Our Investment Advisory group's efforts have been reward

ed by launching of KASB Premier Fund Ltd., a closed end

mutual fund. Plans for the establishment of open-end funds

in collaboration with foreign partners will be formalised

during the course of the current year. This area of business

has great potential to grow in the country.

The Central Depositary Company of Pakistan is expected to

start operations in the next fiscal year. It would also pave

way for setting up of automated trade matching within the

Stock Exchanges. We believe that future developments and

growth of Equities and Money Markets in Pakistan are

greatly dependent upon use of modern technology enabling

investors in all corners of the country to participate in the

growth of our capital markets.

The profit and appropriations for the year are as follows:

The net profit of the company

for the year before provision for

diminution in value of investments

and taxation is

15,701

Provision for diminution

in value of investments

(13,683)

---------------

Profit before taxation

2,018

Taxation -Current

2,044

-Bonus shares

1,011

-Prior years

(4,548)

---------------

(1,493)

---------------

Profit after taxation

3,511

Unappropriated profit brought forward

97429

---------------

Profit available for appropriation

100,940

Appropriations:

Proposed cash dividend @ 5%

5,054

Transfer from share premium

10,109

Proposed bonus shares @ 10%

10,109

---------------

Unappropriated profit carried forward

95,886

========

The directors have recommended a cash dividend of 5%

and bonus shares in the ratio of one ordinary share for

every ten ordinary shares to be paid and issued to

shareholders whose names appear in the Register of

Members on November 27, 1995.

You are requested to appoint auditors for 1996 and fix their

remuneration. The present auditors, Taseer Hadi Khalid &

Co., Chartered Accountants retire and offer themselves for

reappointment.

Since the holding of the last Annual General Meeting on

November 27, 1994, Mrs Farhat Nasira and Mr. Salman A.

Shoaib resigned and Mr. Mohammad Saleem and Mr.

Shabbir Hamza Khandwala were appointed in their place.

The Board of Directors wish to record their appreciation of

the valuable services rendered by the outgoing directors

and extend their warm welcome to the new directors.

The pattern of shareholdings as required by section 236 of

the Companies Ordinance, 1984 is enclosed.

Finally, the Directors would like to thank our shareholders,

and our staff for their support over the past year for

keeping up our values, striving hard for our corporate

strategy and strengthening our culture. We also wish to

thank our clients for their continued patronage. We love

our clients.

ACCOUNTS

KHADIM ALI SHAH BUKHARI

& CO. LIMITED

KPMG Taseer Hadi Khalid & Co.

Chartered Accountants

First( Floor

Telephone

521761-3 5681912

Sheikh Sultan Trust Building No 2

5682290 5680934

Beaumount Road

Fax

92 (21) 5685095

Karachi 75530 Pakistan

AUDITORS' REPORT TO THE MEMBERS

We have audited the annexed Balance Sheet of KHADIM Al I SHAH BUKHARI & CO. LIMITED

as at 30 June 1995 and the related Profit and Loss Account and Cash Flow Statement, together with the

notes forming part thereof, for the ear then ended and e 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:

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;

ii)

the expenditure incurred during the year was for the purpose of the Company's

business: and

iii)

the business conducted. investments made and the expenditure incurred during the year

were in accordance with the objects of the Company;

(c)

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 the 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 give a true and fair view of the state of the Company's affairs as at 30

June 1995 and of the profit and cash flow for the year 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.

Sd/-

TASEER HADI KHALID & CO

KARACHI, 29, October 1995,

Chartered Accountants

BALANCE SHEET

AS AT JUNE 30, 1995

Note

1995

1994

(Rupees in thousand)

SHARE CAPITAL AND RESERVES

Authorised capital

40,000,000 (1994: 15,000,000)

ordinary shares of Rs. 10 each

400,000

150,000

=======

Issued, subscribed and paid-up capital

10,108,800 (1994:7,020,000) ordinary shares

of Rs. 10 each

101,088

70,200

Share premium

70,004

49,927

Reserve for issue of bonus shares

10,109

16,848

Unappropriated profit

95,886

97,429

---------------

277,087

234,404

LIABILITIES AGAINST ASSETS SUBJECT

TO FINANCE LEASE

282

230

DEFERRED LIABILITIES

Staff retirement gratuity

540

618

CURRENT LIABILITIES

Short term finance

121,989

14,925

Running finance under mark-up arrangements

58,435

Current maturity of assets subject

to finance lease

425

1,939

Creditors, accrued and other liabilities

165,384

175,747

Taxation

13,316

Proposed dividend

5,054

8,424

351,287

214,351

---------------

629,196

449,603

=======

Note

1995

1994

(Rupees in thousand)

FIXED ASSETS

33,822

23,439