| FIRST
INTERNATIONAL INVESTMENT BANK LIMITED |
|
|
|
|
|
| Annual
Report 1997 |
|
|
|
|
|
|
| CONTENTS |
|
| Company
Information |
|
| Notice
of Meeting |
|
| Directors' Report. |
|
| Auditors'
Report |
|
| Balance
Sheet |
|
| Profit
& Loss Account |
|
| Statement
of Changes in Financial Position |
|
| Notes
to the Accounts |
|
| Pattern
of Shareholding |
|
|
|
|
|
| COMPANY
INFORMATION |
|
| Board
of Directors |
|
| Syed
Babar All |
|
| Chairman |
|
|
| Mr.
Fakir Syed Aijazuddin |
|
| Managing
Director & Chief Executive |
|
|
| Mr.
Kassim Dada |
|
| Mr.
Pir All Gohar |
|
| Mr.
S. Lachlan Hough |
|
| Mr.
Tawfiq A. Husain |
|
|
| Company
Secretary |
|
| Mr.
Arif Masud Mirza |
|
|
| Auditors |
|
| Messrs.
Ford, Rhodes, Robson, Morrow |
|
| Chartered
Accountants |
|
|
| Legal
Advisers |
|
| Messrs.
Orr, Dignam & Co. |
|
| Advocates |
|
|
| Messrs.
Moshin Tayebaly & Co. |
|
| Advocates
& Legal Consultants |
|
|
| Bankers |
|
| American
Express Bank Ltd. |
|
| Muslim
Commercial Bank Ltd. |
|
|
| Registrars |
|
| Noble
Computer Services (Pvt.) Ltd. |
|
| AI-Manzoor
Building, |
|
| Dr.
Ziauddin Ahmed Road, |
|
| Karachi. |
|
|
|
| Lahore |
|
| Registered
Office |
|
| 2nd Floor, |
|
| Babar
All Foundation Building, |
|
| 308,
Upper Mall, Lahore. |
|
| Telephones:
(042) 5753414-6, 5710597, |
|
| 111-234-234 |
|
| Fax:
(042) 5710598/111 567 567 |
|
|
| Karachi
Office |
|
| 7th Floor, |
|
| Shaheen
Commercial Complex, |
|
| Dr.
Ziauddin Ahmed Road, |
|
| Karachi. |
|
| Telephones:
(021) 2639042-46, |
|
| 111-234-234 |
|
| Fax:
(021) 2630678 / 111 567 567 |
|
|
| Islamabad
Office |
|
| Mezzanine
Floor, |
|
| Razia
Sharif Plaza, |
|
| 90,
Blue Area, G-7, Islamabad. |
|
| Telephone:
(051) 275256-58, 111-234-234 |
|
| Fax:
(051) 273861 / 111 567 567 |
|
|
|
| NOTICE
OF THE SEVENTH ANNUAL GENERAL MEETING |
|
| Notice
is hereby given that the seventh Annual General Meeting of First
International Investment |
|
| Bank
Limited will be held at 2nd Floor, Babar All Foundation Building, 308, Upper
Mall, Lahore, on |
|
| Friday,
October 24, 1997 at 10.00 a.m, to transact the following ordinary business
& special |
|
| business: |
|
|
| ORDINARY
BUSINESS: |
|
| 1.
To receive and consider the Accounts of the Company for the twelve months
ended June 30, |
|
| 1997
together with the Director's and Auditors' Reports thereon. |
|
|
| 2.
To declare a final, dividend @ 12.5% for the year ended June 30, 1997 |
|
|
| 3.
To appoint auditors and to fix their remuneration. |
|
|
| 4.
To elect Directors in accordance with the provisions of section 178 of the
Companies |
|
| Ordinance,
1984 for a term of three years commencing from the date of their retirement. |
|
|
| As
decided by the Board of Directors the number of Directors to be elected would
be seven |
|
| as
at present. |
|
|
| The
present Directors of the Company will retire at the ensuing General Meeting.
The retiring |
|
| Directors
namely, Syed Babar Ali, Fakir Syed Aijazuddin, Mr, Tawfiq A, Husain, Mr.
Kassim |
|
| Dada,
Mr. S. Lachlan Hough, Pit All Gohar and Mr. Rashid Zahir, being eligible,
have notified |
|
| their
intention to offer themselves for re-election as Directors for a fresh term
of three years |
|
| from
the date of holding of this Annual General Meeting. |
|
|
| SPECIAL
BUSINESS: |
|
| 5.
To consider and if thought fit to approve the remuneration payable to the
Managing Director |
|
| and
Chief Executive, |
|
|
| 6.
To transact any other business with the permission of the Chair, |
|
|
| Notes |
|
| 1.
The share transfer books of the Company will remain closed from October 17,
1997 to |
|
| October
24, 1997 (both days inclusive). |
|
|
| 2.
A member entitled to attend and vote at the General Meeting is entitled to
appoint a proxy |
|
| to
attend and vote instead of him. |
|
|
| 3.
The instrument appointing a proxy must be received at the Registered Office
of the Company |
|
| not
later than forty-eight hours before the time appointed for the Meeting. A
member shall |
|
| not
be entitled to appoint more than one proxy. If a member appoints more than
one proxy |
|
| and
more than one instrument of proxy are deposited by a member with the Company,
all |
|
| such
instruments of proxy shall be rendered invalid. |
|
|
|
| DIRECTORS'
REPORT |
|
| The
Board of Directors of First International Investment Bank Limited (Interbank)
has pleasure in |
|
| presenting
its Report and the Accounts for the twelve months ended June 30, 1997 to the
seventh |
|
| Annual
General Meeting, |
|
|
| This
twelve months period has been one of maintaining competitiveness, market
share and |
|
| continual
diversification. |
|
|
| Interbank's
pre-tax profit for the twelve months ended June 30, 1997 was Rs. 37.37
million. |
|
|
| SUMMARY: |
|
|
Rs, million |
|
| After
tax the Bank made a profit of |
|
26.07 |
|
| Adding
thereto the unappropriated |
|
| profit
at 1 July 1996, |
|
1.85 |
|
|
---------- |
|
| makes
available for appropriation a sum of |
|
27.92 |
|
|
| from
which the Directors recommend |
|
| transfer
to special reserve |
|
530 |
|
| final
dividend |
|
22.50 |
|
|
---------- |
|
| and
propose to carry forward the balance of |
|
0.12 |
|
|
| After
consideration of the results for the twelve months ended June 30, 1997, the
Board of Directors |
|
| decided
to recommend a dividend at the rate of 12.5 percent of the paid up capital,
representing |
|
| Rs.
1.25 per ordinary share, |
|
|
| The
Bank's after tax profit of Rs. 26.07 million was up on the pro-rata amount
recorded last year. |
|
| This
was achieved through improved spreads and diversification of Interbank's
product range. |
|
|
| The
business focus of your Bank continues to be mobilisation of local and foreign
currency |
|
| deposits,
with an emphasis on long term deposits. Financing facilities have been
diversified with |
|
| the
inclusion of Leasing Operations. |
|
|
| Your
Bank obtained formal permission from the Corporate Law Authority through
their letter, |
|
| reference
no: 7 (1)/LC/96 dated 31 December 1996, permitting the Bank to undertake
Lease |
|
| Financing.
This further verified the Bank's commitment to provide a complete range of
financial |
|
| products
and services. |
|
|
| This
new business for your Bank promises to yield good returns in the forthcoming
year. |
|
|
| Before
concluding, we would like to place on record the management's appreciation of
its most |
|
| valuable
asset - the employees at all levels - who have worked with dedication and
commitment |
|
| for
the progress of Interbank, |
|
|
|
For and on behalf of the
Board |
|
|
| Lahore: |
|
FAKIR SYED AIJAZUDDIN |
|
| August
28, 1997 |
|
Managing Director &
Chief Executive |
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed balance sheet of FIRST INTERNATIONAL INVESTMENT BANK
LIMITED |
|
| as
at June 30, 1997 and the related profit and loss account and statement of
changes in financial |
|
| position
(cash flow statement), together with the statement of accounting policies and
notes |
|
| forming
part thereof, for the year then ended and we 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 : |
|
|
| (I)
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 statement of changes in
financial |
|
| position
(cash flow statement), together with the statement of accounting policies and |
|
| notes
forming part thereof, give the information required by the Companies
Ordinance, |
|
| 1984,
in the manner so required and respectively give a true and fair view of the
state of the |
|
| Company's
affairs as at June 30, 1997 and of the profit and the changes in financial
position |
|
| 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. |
|
|
| Karachi: |
|
FORD, RHODES, ROBSON,
MORROW |
|
| August
28, 1997 |
|
Chartered Accountants |
|
|
|
| FINANCIAL
INFORMATION |
|
|
|
|
| BALANCE
SHEET |
|
| AS
JUNE 30, 1997 |
|
|
|
June 30, |
June 30, |
|
|
1997 |
1996 |
|
|
Note |
Rupees |
Rupees |
|
| SHARE
CAPITAL AND RESERVES |
|
|
| Authorised
capital |
|
| 20,000,000
ordinary shares of Rs, 10 each |
|
20,000,000 |
20,000,000 |
|
|
========== |
========== |
|
| Issued
and paid-up-capital |
|
3 |
180,000,000 |
180,000,000 |
|
|
| Capital
reserves |
|
| Special
reserve |
|
4 |
28,494,000 |
23,294,000 |
|
| Share
premium |
|
70,000,000 |
70,000,000 |
|
|
---------- |
---------- |
|
|
98,594,000 |
93,294,000 |
|
| Revenue
reserves |
|
| General
reserve |
|
44,000,000 |
44,000,000 |
|
| Unappropriated
profit |
|
121,557 |
1,854,920 |
|
|
---------- |
---------- |
|
|
44,121,557 |
45,854,920 |
|
|
---------- |
---------- |
|
|
|
322,715,557 |
319,148,920 |
|
| DEFERRED
LIABILITIES |
|
| Provision
for gratuity |
|
485,786 |
-- |
|
| LONG
TERM DEPOSITS |
|
6 |
1,470,322,665 |
1,389,547,665 |
|
| DEPOSITS
ON LEASE CONTRACTS |
|
7 |
2,680,285 |
-- |
|
|
|
|
|
|
|
| CURRENT
LIABILITIES AND PROVISIONS |
|
| Deposits |
|
8 |
1,065,197,806 |
1,059,484,578 |
|
| Accrued
expenses and other liabilities |
9 |
74,836,274 |
67,009,471 |
|
| Proposed
final dividend |
|
22,500,000 |
-- |
|
|
---------- |
---------- |
|
|
1,162,534,080 |
1,126,494,049 |
|
| CONTINGENCIES
AND COMMITMENTS |
|
10 |
-- |
-- |
|
|
---------- |
---------- |
|
|
2,958,738,373 |
2,835,190,634 |
|
|
========== |
========== |
|
|
|
|
|
| CURRENT
ASSETS |
|
|
|
|
|
|
|
|
| Cash
and bank balance |
|
11 |
31,659,243 |
29,543,926 |
|
| Trading
investment |
|
12 |
395,246,677 |
379,452,438 |
|
| Net
investment in lease finance |
|
13 |
3,533,726 |
-- |
|
| Finance |
|
14 |
807,779,457 |
725,830,346 |
|
| Fund
placements with investment banks/ |
|
|
|
| other
companies |
|
15 |
446,000,000 |
622,000,000 |
|
| Bill
receivables |
|
|
-- |
50,997,835 |
|
| Bankers'
acceptances |
|
|
18,000,000 |
-- |
|
| Income
accured or receivable |
|
|
84,985,274 |
81,493,760 |
|
| Other
receivable |
|
16 |
5,562,584 |
11,296,891 |
|
| Payments
less provision for taxation |
|
17 |
21,864,039 |
3,138,944 |
|
| Prepayments |
|
18 |
80,224,802 |
76,651,580 |
|
|
|
---------- |
---------- |
|
|
|
1,894,855,802 |
1,980,405,720 |
|
| LONG
TERM INVESTMENTS |
|
19 |
61,129,620 |
49,929,620 |
|
| NET
INVESTMENT IN LEASE FINANCE |
|
13 |
23,316,306 |
-- |
|
| LONG
TERM FINANCE |
|
20 |
887,320,530 |
795,115,613 |
|
| LONG
TERM DEMAND PROMISSORY NOTES |
|
21 |
78,000,000 |
-- |
|
| LONG
TERM DEPOSITS AND DEFERRED COSTS |
|
22 |
3,850,212 |
171,960 |
|
| TANGIBLE
FIXED ASSETS |
|
23 |
10,265,903 |
9,567,721 |
|
|
|
---------- |
---------- |
|
|
|
2,958,738,373 |
2,835,190,634 |
|
|
|
========== |
========== |
|
| The
annexed notes from an integral part of these accounts. |
|
|
|
|
|
|
|
|
|
|
| PROFIT
AND LOSS ACCOUNT |
|
|
|
|
| FOR
THE YEAR ENDED JUNE 30, 1997 |
|
|
|
|
Eighteen |
|
|
|
Year ended |
months ended |
|
|
|
June 30, |
June 30, |
|
|
|
1997 |
1996 |
|
|
Note |
Rupees |
Rupees |
|
| INCOME |
|
|
| Income
from finance provided |
|
233,135,856 |
264,457,345 |
|
| Income
from bills receivable |
|
8,729,188 |
17,560,738 |
|
|
24 |
64,036,727 |
93,075,595 |
|
| Income
from lease finance |
|
89,291 |
-- |
|
| Income
from demand promissory notes |
|
12,158,793 |
-- |
|
| Income
from bankers' acceptances |
|
605,550 |
-- |
|
| Income
from fund placements |
|
74,083,084 |
109,881,403 |
|
| Commissions
and fees |
|
3,037,442 |
7,604,054 |
|
|
25 |
1,036,243 |
3,702,259 |
|
|
---------- |
---------- |
|
|
396,912, 174 |
496,281,394 |
|
| EXPENDITURE |
|
| Return
on deposits |
|
306,197,521 |
366,268,452 |
|
|
26 |
4,186,701 |
706,075 |
|
|
27 |
48,596,212 |
61,657,985 |
|
| Provision
for diminution in value of investments |
|
1,499,172 |
8,930,163 |
|
| Provision
for potential lease losses |
|
121,007 |
-- |
|
| Provision
under SBP NBFIs Regulations against |
|
| finance
debt |
|
(1,955,076) |
1,055,076 |
|
|
---------- |
---------- |
|
|
|
359,545,537 |
438,617,751 |
|
|
|
---------- |
---------- |
|
| Profit
before taxation |
|
37,366,637 |
57,663,643 |
|
| Taxation |
|
17 |
11,300,000 |
27,500,000 |
|
|
|
|
---------- |
---------- |
|
| Profit
after taxation |
|
26,066,637 |
30,163,643 |
|
| Unappropriated
profit brought forward |
|
1,854,920 |
291,277 |
|
|
---------- |
---------- |
|
| Available
for appropriation |
|
27,921,557 |
30,454,920 |
|
| APPROPRIATIONS |
|
|
|
| Transfer
to special reserve |
|
5,300,000 |
6,100,000 |
|
| Interim
dividend |
|
-- |
22,500,000 |
|
| Proposed
final dividend @ 12.5% |
|
22,500,000 |
-- |
|
|
---------- |
---------- |
|
|
27,800,000 |
28,600,000 |
|
|
---------- |
---------- |
|
| Unappropriated
profit carried forward |
|
121,557 |
1,854,920 |
|
|
=========== |
=========== |
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
|
|
|
|
| STATEMENT
OF CHANGES IN FINANCIAL POSITION |
|
| (Cash
flow statement) |
|
| FOR
THE YEAR ENDED JUNE 30, 1997 |
|
|
|
Eighteen |
|
|
Year ended |
months ended |
|
|
June 30, |
June 30, |
|
|
1997 |
1996 |
|
|
Rupees |
Rupees |
|
|
| CASH
FLOWS FROM OPERATING ACTIVITIES |
|
| Profit
before taxation |
|
37,366,637 |
57,663,643 |
|
| Adjustments
for: |
|
|
|
| Depreciation |
|
2,753,973 |
3,606,448 |
|
| Deferred
costs |
|
337,113 |
-- |
|
| (Gain)/Loss
on disposal of fixed assets |
|
(75) |
269,557 |
|
| Provision
for diminution in value of investments |
|
1,499,172 |
8,930,163 |
|
| Provision
for doubtful debts |
|
(1,055,076) |
1,055,076 |
|
| Provision
for potential lease losses |
|
121,007 |
-- |
|
| Provision
for gratuity |
|
485,786 |
-- |
|
|
---------- |
---------- |
|
|
4, 141,900 |
13,861,244 |
|
|
---------- |
---------- |
|
|
41,508,537 |
7l,524,887 |
|
| (Increase)/decrease
in current assets: |
|
| Trading
Investments |
|
(17,293,411) |
(122,641,176) |
|
| Finance |
|
(80,894,035) |
61,257,489 |
|
| Fund
placements |
|
176,000,000 |
(382,000,000) |
|
| Bills
receivable |
|
50,997,835 |
2,305,905 |
|
| Bankers'
acceptances |
|
(18,000,000) |
-- |
|
| Income
accrued or receivable |
|
(3,491,514) |
(37,760,625) |
|
| Other
receivables |
|
5,734,307 |
(3,414,209) |
|
| Prepayments |
|
-3,938,118 |
(66,258,150) |
|
|
---------- |
---------- |
|
|
109,115,064 |
(548,510,766) |
|
| (Decrease)/increase
in current liabilities: |
|
| Deposits |
|
5,713,228 |
(233,772,966) |
|
| Accrued
expenses and other liabilities |
|
8,070,692 |
35,757,086 |
|
|
---------- |
---------- |
|
|
13,783,920 |
(198,015,880) |
|
|
| Increase
in long term finance |
|
(92,204,917) |
(744,620,413) |
|
| (Increase)/decrease
in long term deposits |
|
| and
deferred costs |
|
(4,015,365) |
1,163,134 |
|
| Increase
in long term demand promissory notes |
|
(78,000,000) |
-- |
|
| Increase
in net investment in lease finance |
|
(26,850,032) |
-- |
|
| Increase
in deposits on lease contracts |
|
2,680,285 |
-- |
|
|
---------- |
---------- |
|
|
(198,390,029) |
(743,457,279) |
|
|
---------- |
---------- |
|
| Net
cash from operating activities before income-tax |
|
(33,982,508) |
(1,418,459,038) |
|
| income-tax
paid |
|
(30,025,091) |
(41,617,528) |
|
|
---------- |
---------- |
|
| Net
cash from operating activities |
|
(64,007,599) |
(1,460,076,566) |
|
|
|
|
|
| Cash
flows from investing activities: |
|
| Long
term investments |
|
(11,200,000) |
(40,290,780) |
|
| Acquisition
of fixed assets |
|
(3,452,384) |
(6,771,901) |
|
| Sale
proceeds of fixed assets |
|
300 |
160,623 |
|
|
---------- |
---------- |
|
| Net
cash used in investing activities |
|
(14,652,084) |
(46,902,058) |
|
|
---------- |
---------- |
|
|
(78,659,683) |
(1,506,978,624) |
|
| Cash
flows from financing activities: |
|
|
|
| Payment
of dividend |
|
-- |
(22,262,086) |
|
| Long
term deposits |
|
80,775,000 |
1,386,612,665 |
|
|
---------- |
---------- |
|
| Net
cash from financing activities |
|
80,775,000 |
1,364,350,579 |
|
|
---------- |
---------- |
|
| Net
(decrease)/increase in cash |
|
2,115,317 |
(142,628,045) |
|
| Cash
and bank balances at the |
|
| beginning
of the year |
|
29,543,926 |
172,171,971 |
|
|
| Cash
and bank balances at the |
|
---------- |
---------- |
|
| end
of the year |
|
31,659,243 |
29,543,926 |
|
|
|
========== |
========== |
|
|
|
|
| NOTES
TO THE ACCOUNTS |
|
| FOR
THE YEAR ENDED JUNE 30, 1997 |
|
|
| 1.
LEGAL STATUS AND OPERATIONS |
|
|
| First
International Investment Bank Limited (Interbank) is a public limited company
incorporated |
|
| in
Pakistan under the Companies Ordinance, 1984. Interbank is licensed to carry
out all |
|
| investment
finance activities described under SRO 585(1)/87 dated July 13, 1987, issued
by |
|
| the
Ministry of Finance. Its shares are quoted on the Karachi and Lahore Stock
Exchanges. |
|
|
| 2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
|
|
| 2.1
Accounting convention |
|
| The
accounts are prepared under the historical cost convention, |
|
|
| 2.2
Taxation |
|
| Provision
for current taxation is based on taxable income at the current rate after
taking |
|
| into
account applicable tax credits, rebates and exemptions, |
|
|
| Provision
for deferred taxation is made on all material timing differences expected to |
|
| reverse
in the foreseeable future, using the liability method. |
|
|
| 2.3
Tangible fixed assets |
|
| These
are stated at cost less accumulated depreciation. Depreciation charge is
based |
|
| on
the straight line method whereby the cost of an asset is written off over its
estimated |
|
| useful
life without taking into account any residual value. Maintenance and normal |
|
| repairs
are charged to income as and when incurred. Major renewals and improvements |
|
| are
capitatised and the assets so replaced, if any, are retired, Gains and losses
on |
|
| disposal
of fixed assets are taken to profit and loss account. |
|
|
| 2.4
Investments |
|
| Long
term quoted investments are valued at cost. |
|
|
| Short
term government securities are carried at their realisable values, |
|
|
| Other
trading investments (including NIT Units) are valued at the lower of cost and |
|
| market
value on category of investment basis. |
|
| Cost
is taken as estimated realisable value for unquoted investments. |
|
