| First International Investment Bank Limited |
|
|
|
|
|
|
| Annual
Report 2001 |
|
|
|
| CONTENTS |
|
|
| Company
Information |
|
| Notice
of Meeting |
|
| Directors'
Report |
|
| Auditors'
Report |
|
| Balance Sheet |
|
|
| Profit
& Loss Account |
|
| Cash
Flow Statement |
|
| Statement
of Changes in Equity |
|
| Notes
to the Accounts |
|
| Pattern
of Shareholding |
|
|
|
| COMPANY
INFORMATION |
|
|
| Board
of Directors |
|
Syed Babar All, Chairman |
|
|
Pir Ali Gohar |
|
|
Nasim Beg |
|
|
A. Saeed Siddiqui,
Managing Director & Chief Executive |
|
|
Nadeem Karamat |
|
|
Kamal A. Chinoy |
|
|
Azhar Ahmed (since August
29, 2001) |
|
|
| Company
Secretary |
|
Syed Zia ul Hasan |
|
|
| Auditors |
|
Messrs. Ford, Rhodes,
Robson, Morrow |
|
|
Chartered Accountants |
|
|
| Legal Advisers |
|
Messrs. Orr, Dignam &
Co. |
|
|
Advocates |
|
|
|
Messrs. Mohsin Tayebaly
& Co. |
|
|
Advocates & Legal
Consultants |
|
|
| Bankers |
|
American Express Bank
Ltd. |
|
|
ABN-AMRO Bank N.V. |
|
|
Bank AL Habib Ltd. |
|
|
Citibank, N. A. |
|
|
Metropolitan Bank Ltd. |
|
|
Muslim Commercial Bank
Ltd. |
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|
Soneri Bank Ltd. |
|
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| Registrars |
|
Noble Computer Services
(Pvt.) Ltd. |
|
|
14, Banglore Town Housing
Society, |
|
|
Main Shahrah-e-Faisal,
Karachi. |
|
|
| Lahore |
|
2nd Floor, Babar All
Foundation Building, |
|
|
|
| Registered
Office |
|
308, Upper Mall, Lahore. |
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|
Telephones: (042)
575-3414/16, 571-0597 |
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|
Fax: (042) 571-0598 |
|
|
E-mail: fiibl.lhr@
interbank.com.pk |
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|
| Karachi Office |
|
7th Floor, Shaheen
Commercial Complex, |
|
|
Dr. Ziauddin Ahmed Road,
Karachi. |
|
|
Telephones: (021)
263-9042/46 |
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|
Fax: (021) 263-0678 |
|
|
E-mail: fiibl.khi @
interbank.com.pk |
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|
| Islamabad
Office |
|
Mezzanine Floor, Razia
Sharif Plaza, |
|
|
90, Blue Area, G / 7,
Islamabad. |
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|
Telephones: (051)
227-5256/58 |
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|
Fax: (051) 227-3861 |
|
|
E-mail: fiibl.isl @
interbank.com.pk |
|
|
| Universal
Access Numbers |
|
Telephone: 111-234-234 |
|
|
Fax: 111-567-567 |
|
|
| Website |
|
www.interbank.com.pk |
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| NOTICE
OF THE ELEVENTH ANNUAL GENERAL MEETING |
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| Notice
is hereby given that the Eleventh 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 12, 2001 at 4.00 p.m. to transact the following ordinary
business: |
|
|
| ORDINARY
BUSINESS: |
|
| 1.
To receive and consider the Accounts of the Company for the financial year
ended June |
|
| 30,
2001 together with the Directors' and Auditors' Reports thereon. |
|
|
| 2.
To declare a final dividend @15% for the year ended June 30, 2001. |
|
|
| 3.
To appoint auditors and to fix their remuneration. M/s Ford, Rhodes, Robson,
Morrow, |
|
| Chartered
Accountants, being eligible offer themselves for re-appointment. |
|
|
| 4.
To transact any other business with the permission of the Chair. |
|
|
|
BY ORDER OF THE BOARD |
|
|
|
|
| Lahore: |
|
SYED ZIA UL HASAN |
|
| September
20, 2001. |
|
Company Secretary |
|
|
| NOTES: |
|
|
| 1.
The share transfer books of the Company will remain closed from October 5,
2001 to |
|
| October
12, 2001 (both days inclusive). |
|
|
| 2.
A member entitled to attend and vote at the Annual General Meeting is
entitled to appoint |
|
| a
proxy in writing to attend the meeting and to vote on a member's behalf. A
proxy need |
|
| not
be a member of the Company. |
|
|
| 3.
Duly completed form of proxy must be received at the Registered Office of the
Company |
|
| not
later than forty-eight hours before the time appointed for the Meeting. |
|
|
| 4.
Account holders and sub-account holders holding book entry securities of the
Company |
|
| in
the Central Depository Company of Pakistan Limited, who wish to attend the
Annual |
|
| General
Meeting, are requested to bring original National Identity Cards with copies |
|
| thereof
duly attested by their bankers for identification purposes. |
|
|
|
| DIRECTORS'
REPORT TO THE SHAREHOLDERS |
|
|
| The
Board of Directors of First International Investment Bank Limited (Interbank)
is pleased to |
|
| present
the annual report and audited accounts for the year ended June 30, 2001 to
the eleventh |
|
| Annual
General Meeting of the shareholders. |
|
|
| BUSINESS
OPERATIONS |
|
| After-tax
profit of Interbank for the year under review is Rs. 45.9 million as against
Rs. 26.2 million |
|
| for
the previous year. The improvement is mainly due to increase in income from
lease finance, |
|
| trading
gains and exchange gains, accompanied by decrease in financial charges and
operational |
|
| expenses. |
|
|
| Total
assets declined to Rs. 2.431 billion from Rs. 2.748 billion last year. This
was mainly due to |
|
| withdrawal
of long-term foreign currency deposits on their maturity dates. These
deposits were held |
|
| as
collateral for financing facilities provided by us and the corresponding
facilities were also paid |
|
| off
simultaneously. Thus, the net outflow of liquidity on account of depletion of
foreign currency |
|
| deposits
has been manageable. Our local currency deposits, however, increased to Rs.
878 million |
|
| from
Rs. 635 million last year, while lease finance increased to Rs. 459 million
from Rs. 339 million. |
|
|
| As
a result of steps taken by us to rationalize staff strength and control
expenses, our financial |
|
| charges
decreased to Rs. 51 million from Rs. 67 million last year, while operational
expenses |
|
| decreased
to Rs. 57 million from Rs. 69 million. |
|
|
| Our
treasury .operations have performed well during the year, mainly through
money market |
|
| activities
and selective trading positions in government securities. We have continued
to expand our |
|
| relationships
with banks and financial institutions, which enables us to take advantage of
available |
|
| market
opportunities. |
|
|
| We
have also continued to bring about significant innovations in the corporate
bond market. We |
|
| structured
an unsecured and perpetual TFC issue for Packages Limited, with put and call
options |
|
| every
four years. This will be the first unsecured and perpetual TFC issue in
Pakistan. We have also |
|
| structured
an unsecured TFC issue for Interbank, comprising two types of instruments
offered |
|
| through
one prospectus, which will be another first in Pakistan. The two instruments
are: Regular |
|
| Income
TFCs (on which profit will be payable monthly) and Money Multiplier TFCs (on
which profit |
|
| will
be payable on maturity). We trust that these innovations will contribute to
further growth and |
|
| development
of the bond market in Pakistan. |
|
|
| APPROPRIATIONS |
|
| The
Directors recommend payment of cash dividend of Rs. 1.50 per share of Rs.
10.00 each. |
|
| Accordingly,
the following appropriations are being made: |
|
|
|
(Rupees) |
|
| Profit
for the year after taxation |
|
45,940,400 |
|
| Unappropriated
profit brought forward |
|
828,403 |
|
|
---------- |
|
| Available
for appropriation |
|
46,768,803 |
|
| Appropriations: |
|
| Transfer
to special reserve |
|
9,206,000 |
|
| Transfer
to general reserve |
|
7,000,000 |
|
| Proposed
cash dividend of Rs.1.50 per share |
|
30,000,000 |
|
|
---------- |
|
|
46,206,000 |
|
|
---------- |
|
| Unappropriated
profit carried forward |
|
562,803 |
|
|
========== |
|
|
|
| CREDIT
RATING |
|
| Based
on financial results for the year ended June 30, 2000, The Pakistan Credit
Rating Agency |
|
| (PACRA)
maintained the long-term credit rating of Interbank at 'A' and the short-term
rating at 'A1 '. |
|
| Credit
rating of our secured TFC issue of December 1998 was also maintained at 'A+'. |
|
|
| Our
forthcoming issue of unsecured TFCs, viz. Regular Income TFCs and Money
Multiplier TFCs, |
|
| have
both been awarded credit ratings of 'A' by PACRA. |
|
|
| DIRECTORS |
|
| During
the year, Mr. M. Rashid Zahir retired, and the Board appointed Mr. Kamal A.
Chinoy as |
|
| Director
to fill the casual vacancy in place of Mr. Zahir. The Board welcomes Mr.
Chinoy and records |
|
| its
appreciation of the valuable services rendered by Mr. Zahir during his tenure
of office as Director |
|
| of Interbank. |
|
|
| AUDITORS |
|
| The
present auditors Ford, Rhodes, Robson, Morrow, Chartered Accountants, retire
and have |
|
| offered
themselves for re-appointment. |
|
|
| FUTURE |
|
| Our
focus will continue to be on bringing innovative products and services to the
market, improving |
|
| the
efficiency and cost-effectiveness of our operations, and building the
professional skills of our |
|
| people.
As before, we are confident that Interbank will continue to innovate and grow
in the years |
|
| ahead. |
|
|
| ACKNOWLEDGEMENT |
|
| The
Directors thank all members of the staff for their dedication and commitment. |
|
|
| For
and on behalf of the Board. |
|
|
|
SYED BABAR ALI |
|
A. SAEED SIDDIQUI |
|
|
Chairman |
|
Managing Director & Chief Executive |
|
|
| Lahore: |
|
| September
7, 2001 |
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed balance sheet of FIRST INTERNATIONAL INVESTMENT BANK |
|
| LIMITED
as at June 30, 2001 and the related profit and loss account, cash flow
statement |
|
| and
statement of changes in equity together with the 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. |
|
|
| It
is the responsibility of the company's management to establish and maintain a
system of |
|
| internal
control, and prepare and present the above said statements in conformity with
the |
|
| approved
accounting standards and the requirements of the Companies Ordinance, 1984.
Our |
|
| responsibility
is to express an opinion on these statements based on our audit. |
|
|
| We
conducted our audit in accordance with the auditing standards as applicable
in Pakistan. |
|
| These
standards require that we plan and perform the audit to obtain reasonable
assurance |
|
| about
whether the above said statements are free of any material misstatement. An
audit |
|
| includes
examining on a test basis, evidence supporting the amounts and disclosures in
the |
|
| above
said statements. An audit also includes assessing the accounting policies and
significant |
|
| estimates
made by management, as well as evaluating the overall presentation of the
above |
|
| said
statements. We believe that our audit provides a reasonable basis for our
opinion and, |
|
| after
due verification, we report that - |
|
|
| (a)
In our opinion, proper books of accounts 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, except for the changes as stated |
|
| in
note 2.2 to the accounts with which we concur; |
|
|
| (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
us, the balance sheet, profit and loss account, cash flow statement and |
|
| statement
of changes in equity together with the notes forming part thereof conform |
|
| with
approved accounting standards as applicable in Pakistan, and 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, 2001 and of the profit, its cash flows and changes in equity for the year |
|
| then ended; and |
|
|
| (d)
in our opinion, Zakat deductible at source under the Zakat and Ushr
Ordinance, |
|
| 1980
(XVIII of 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 |
|
| September
7, 2001 |
|
Chartered Accountants |
|
|
|
| BALANCE
SHEET AS AT JUNE 30, 2001 |
|
|
|
|
2001 |
2000 |
|
| ASSETS |
|
Note |
Rupees |
Rupees |
|
| NON-CURRENT
ASSETS |
|
| Tangible
fixed assets |
|
3 |
9,107,407 |
8,745,870 |
|
| Long-term
Investments |
|
4 |
137,976,577 |
134,462,129 |
|
| Long-term
finance |
|
5 |
226,336,330 |
446,069,654 |
|
| Net
investment in lease finance |
|
6 |
338,943,851 |
229,999,857 |
|
| Long-term
demand promissory note |
|
7 |
-- |
78,000,000 |
|
| Long-term
deposits, prepayments and |
|
|
|
|
| deferred costs |
|
8 |
4,293,907 |
6,282,738 |
|
| CURRENT
ASSETS |
|
|
|
|
| Current
portion of long-term finance |
|
5 |
260,095,857 |
252,297,737 |
|
| Current
portion of net investment in |
|
|
|
|
| lease finance |
|
6.30 |
120,013,541 |
108,718,709 |
|
| Current
portion of long-term demand |
|
|
|
|
| promissory note |
|
7 |
78,000,000 |
-- |
|
| Short-term
finance |
|
9 |
199,813,864 |
193,343,406 |
|
| Fund
placements with investment banks/ |
|
|
|
|
| other
companies |
|
10 |
310,000,000 |
512,000,000 |
|
| Trading
investments |
|
11 |
434,481,257 |
380,675,340 |
|
| Prepayments
and other receivables |
|
12 |
197,170,530 |
308,177,220 |
|
| Cash
and bank balances |
|
13 |
114,337,703 |
90,097,480 |
|
|
|
---------- |
---------- |
|
|
|
1,713,912,752 |
1,845,309,892 |
|
|
|
---------- |
---------- |
|
|
|
2,430,570,824 |
2,748,870,140 |
|
|
|
========== |
========== |
|
| EQUITY
AND LIABILITIES |
|
|
|
| SHARE
CAPITAL AND RESERVES |
|
|
|
| Authorised
capital |
|
|
|
| 20,000,000
ordinary shares of Rs. 10/- each |
|
|
200,000,000 |
200,000,000 |
|
| Issued,
subscribed and paid-up capital |
|
14 |
200,000,000 |
180,000,000 |
|
| Reserves |
|
15 |
161,262,803 |
165,322,403 |
|
|
|
|
|
|
|
361,262,803 |
345,322,403 |
|
| Surplus
on revaluation of investments |
|
16 |
2,632,356 |
-- |
|
| NON-CURRENT
LIABILITIES |
|
|
|
|
| Term
finance certificates |
|
17 |
125,666,937 |
263,584,264 |
|
| Long-term
borrowing |
|
18 |
85,624,234 |
90,490,779 |
|
| Deferred
liability - provision for gratuity |
|
|
3,045,993 |
2,410,63i |
|
| Deferred
taxation |
|
|
11,580,000 |
4,580,000 |
|
| Long-term
certificates of deposit |
|
19 |
364,087,042 |
686,199,500 |
|
| Deposits
on lease contracts |
|
20 |
76,561,105 |
38,091,769 |
|
| CURRENT
LIABILITIES AND PROVISIONS |
|
|
|
|
| Current
portion of non-current liabilities |
|
21 |
611,992,888 |
618,375,745 |
|
| Short-term
finance |
|
|
-- |
50,000,000 |
|
| Short-term
certificates of deposit |
|
22 |
704,576,105 |
568,579,322 |
|
| Accrued
expenses and other liabilities |
|
23 |
53,541,361 |
63,235,727 |
|
| Proposed
final dividend |
|
|
30,000,000 |
18,000,000 |
|
|
|
----------- |
----------- |
|
|
|
|
1,400,110,354 |
1,318,190,794 |
|
| CONTINGENCIES
AND COMMITMENTS |
|
24 |
|
|
|
----------- |
----------- |
|
|
2,430,570,824 |
2,748,870,140 |
|
|
========== |
========== |
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
SYED BABAR ALI |
|
A. SAEED SIDDIQUI |
|
|
Chairman |
|
Managing Director & Chief Executive |
|
|
|
| PROFIT
AND LOSS ACCOUNT |
|
| FOR
THE YEAR ENDED JUNE 30, 2001 |
|
|
|
|
2001 |
2000 |
|
|
Note |
Rupees |
Rupees |
|
| INCOME |
|
| income
from investments |
|
25 |
111,470,235 |
121,194,783 |
|
| income
from finance provided |
|
|
114,939,108 |
126,570,108 |
|
| Income
from lease finance |
|
|
63,937,966 |
50,064,676 |
|
| Income
from bills receivable |
|
|
3,304,826 |
1,453,151 |
|
| Income
from demand promissory notes |
|
|
15,866,370 |
14,234,000 |
|
| Income
from fund placements |
|
|
46,238,274 |
92,721,220 |
|
| Commission
and fees |
|
|
1,969,280 |
5,129,613 |
|
| Other income |
|
26 |
25,011,422 |
7,091,934 |
|
|
|
----------- |
----------- |
|
|
|
382,737,481 |
418,459,485 |
|
| EXPENDITURE |
|
|
|
|
|
|
|
|
| Financial
charges |
|
27 |
50,632,416 |
67,478,924 |
|
| Return
on deposits and related costs |
|
|
202,201,799 |
242,997,159 |
|
| Administration
and operating expenses |
|
28 |
56,585,268 |
68,708,801 |
|
| Provision
for potential finance /lease losses |
|
|
1,331,423 |
684,744 |
|
| Provision
under SBP's NBFIs Regulations against |
|
|
|
| finance
/lease losses |
|
|
1,307,313 |
4,000,000 |
|
| (Reversal
of provision) / provision for diminution |
|
|
|
| in
value of investments |
|
29 |
(1,261,138) |
2,537,098 |
|
|
----------- |
----------- |
|
|
310,797,081 |
386,406,726 |
|
|
----------- |
----------- |
|
| Profit
for the year before taxation |
|
71,940,400 |
32,052,759 |
|
| Taxation
- current |
|
18,000,000 |
2,500,000 |
|
| - prior years |
|
1,000,000 |
(1,227,608) |
|
| - deferred |
|
7,000,000 |
4,580.00 |
|
|
----------- |
----------- |
|
|
26,000,000 |
5,852,392 |
|
|
----------- |
----------- |
|
| Profit
for the year after taxation |
|
45,940,400 |
26,200,367 |
|
| Unappropriated
profit brought forward |
|
828,403 |
928,036 |
|
|
----------- |
----------- |
|
| Available
for appropriation |
|
46,768,803 |
27,128,403 |
|
|
----------- |
----------- |
|
|
| APPROPRIATIONS |
|
|
|
| Transfer
to special reserve |
|
9,206,000 |
5,300,000 |
|
| Transfer
to general reserve |
|
7,000,000 |
3,000,000 |
|
| Proposed
final dividend @ 15% (2000: @ 10%) |
|
30,000,000 |
18,000,000 |
|
|
----------- |
----------- |
|
|
46,206,000 |
26,300,000 |
|
|
----------- |
----------- |
|
| Unappropriated
profit carried forward |
|
562,803 |
828,403 |
|
|
========== |
========== |
|
| Basic
earnings per share |
|
36 |
2.30 |
1.31 |
|
|
========== |
========== |
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
SYED BABAR ALI |
|
A. SAEED SIDDIQUI |
|
|
Chairman |
|
Managing Director & Chief Executive |
|
|
|
| CASH
FLOW STATEMENT |
|
| FOR
THE YEAR ENDED JUNE 30, 2001 |
|
|
|
2001 |
2000 |
|
|
Rupees |
Rupees |
|
| Cash
flows from operating activities: |
|
|
|
| Profit
for the year before taxation |
|
71,940,400 |
32,052,759 |
|
| Adjustments
for: |
|
|
|
| Gain
on disposal of fixed assets |
|
(869,176) |
(548,188) |
|
| Exchange gain |
|
(117,452,493) |
(990,361) |
|
| Deferred costs |
|
2,192,400 |
2,192,397 |
|
| Depreciation |
|
2,881,820 |
3,635,308 |
|
| Provision
for gratuity |
|
829,082 |
1,367,213 |
|
| (Reversal
of provision) / provision for diminution |
|
|
|
| in
value of investments |
|
(1,261,138) |
2,537,098 |
|
| Provision
for potential lease/car finance losses |
|
1,331,423 |
623,515 |
|
| Provision
under SBP's NBFIs Regulations against |
|
|
|
| finance
provided |
|
1,307,314 |
4,061,229 |
|
|
----------- |
----------- |
|
|
(11,040,768) |
12,878,211 |
|
| Operating
profit before working capital changes |
|
60,899,632 |
44,930,970 |
|
| (Increase)
/ decrease in current assets: |
|
|
|
| Prepayments
and other receivables |
|
115,227,549 |
(41,912,338) |
|
| Bill receivable |
|
-- |
40,000,000 |
|
| Fund
placements |
|
202,000,000 |
307,000,000 |
|
| Short-term
finance |
|
(6,470,458) |
(22,068,029) |
|
| Trading
investments |
|
(50,046,201) |
112,796,135 |
|
|
----------- |
----------- |
|
|
260,710,890 |
395,815,768 |
|
| Increase
/ (decrease) in current liabilities: |
|
| Deposits |
|
135,996,783 |
(176,743,639) |
|
| Short-term
finance |
|
(50,0000,000) |
50,000,000 |
|
| Accrued
expenses and other liabilities |
|
(9,873,114) |
(7,361,063) |
|
|
----------- |
----------- |
|
| Cash
generated from operations |
|
76,123,669 |
(119,382,576 |
|
|
| Decrease
in long-term finance |
|
211,699,653 |
136,050,991 |
|
| Increase
in net investment in lease finance |
|
(122,642,011) |
(88,566,478 |
|
| Increase
in long-term deposits, prepayments and |
|
|
|
| deferred costs |
|
(203,569) |
(81,142 |
|
| Decrease
in long-term deposits |
|
(346,900,167) |
(412,852,790 |
|
| Increase
in deposits on lease contracts |
|
44,105,306 |
21,338,997 |
|
|
----------- |
----------- |
|
|
(213,940,788) |
(344,110,422) |
|
|
----------- |
----------- |
|
| Net
cash from operating activities before |
|
| income
tax and gratuity |
|
|
183,793,403 |
(22,746,260) |
|
