| Al-Zamin Leasing Modaraba (Management)
Private Limited |
|
|
|
|
| Annual
Report 1999 |
|
|
|
| CORPORATE
INFORMATION |
|
|
| BOARD
Of DIRECTORS |
|
| Mr.
C. Ahsanul Haq - Chairman |
|
| Mr.
Basheer A. Chowdry - Chief Executive |
|
| Mr. S.M. Farooq |
|
| Mr.
Ansar Husain |
|
| Mr.
Manzoor Hussain Shah Kazmi |
|
| Brig.
(Retd) Luqman Mahmood |
|
| Dr.
Hasan Abbas Zaheer |
|
| Syed
Ghazanfar Ali [Nominee of Pak Libya Holding Co. (Pvt) Ltd.] |
|
|
| COMPANY
SECRETARY |
|
| Mr.
M. Moizul Haque |
|
|
| AUDITORS
OF THE MODARABA |
|
| M.
Yousuf Adil Saleem & Company, Chartered Accountants |
|
|
| AUDITORS
OF THE MODARABA COMPANY |
|
| Jalis
Ahmed & Company, Chartered Accountants |
|
|
| BANKERS |
|
| Allied
Bank of Pakistan Limited |
|
| Askari
Commercial Bank Limited |
|
| First
Women Bank Limited |
|
| Gulf
Commercial Bank Limited |
|
| Habib
Bank Limited |
|
| National
Bank of Pakistan |
|
| National
Development Finance Corporation |
|
| Pakistan
Industrial Credit & Investment Corporation |
|
| Soneri
Bank Limited |
|
|
| LEGAL
ADVISORS |
|
| Sharif
& Company, Advocates |
|
| Mansoor
Ahmed Khan & Company, Advocates |
|
|
| MODARABA
COMPANY |
|
| Al-Zamin
Modaraba Management (Private) Limited |
|
|
| REGISTERED
OFFICE & SHARES DEPARTMENT |
|
| 104-106,
Kassam Court, |
|
| BC-9,
Block 5, Clifton, |
|
| Karachi-75600 |
|
| Tel:
587 6651, 587 6652, 571725, |
|
| 587 3373, 586 7102, 574474. |
|
| Fax: 587 0408 |
|
| E-mail:
alzamin@zoooom.net |
|
|
| LAHORE
OFFICE |
|
| Suit
No. F-05, 1st Floor, Rehman Business Centre, |
|
| 32
B-III, Gulberg III, Lahore |
|
| Tel:
571 5583, 571 5584 |
|
| Fax: 571 5585 |
|
|
| CONTENTS |
|
|
| Directors'
Report |
|
| Asset
and Sector-wise Analysis of Leases |
|
| Auditors' Report |
|
| Balance Sheet |
|
| Profit
and Loss Account |
|
| Statement
of Changes in Financial Position |
|
| Notes
to the Accounts |
|
| Pattern
of Certificate Holding |
|
|
|
| DIRECTORS'
REPORT |
|
| FOR
THE YEAR 1998-99 |
|
|
| The
Board of Directors of Al-Zamin Modaraba Management (Private) Limited takes |
|
| pleasure
in presenting the Seventh Annual Report of Al-Zamin Leasing Modaraba, |
|
| together
with audited Accounts for the year ended 30th June 1999. |
|
|
| OPERATING
RESULTS |
|
|
| The
Modaraba achieved an unprecedented growth of 41.25% in the Balance Sheet |
|
| footings
during the year inspite of difficult market conditions. Consequently, total |
|
| assets
of the Modaraba increased from Rs 289.2 million to Rs 408.5 million, with a |
|
| growth
of 37.75% in net investment in leases from Rs 218.5 million to Rs 301 |
|
| million. |
|
|
| This
growth was made possible due to availability of further resources and credit |
|
| lines
which clearly indicates a continued confidence of the financial institutions
in |
|
| the
quality and strength of your Modaraba. While the short-term and term finances |
|
| from
the financial institutions and Musharaka investors increased from an overall |
|
| figure
of Rs 91.8 million to Rs 174.9 million, the investments in lease finances |
|
| increased
by over Rs 82 million and Musharaka finance investment by Rs 21 |
|
| million.
Along with a healthy and balanced growth achieved on both sides of the |
|
| balance
sheet, your Modaraba maintains enough liquidity to continue its planned |
|
| expansion.
The Board is happy to report that further credit lines have also been |
|
| approved
by financial institutions for your Modaraba, the utilization of which will |
|
| achieve
further enhancement in its size and profitability. |
|
|
| While
the capital market of the country is expanding through the introduction of |
|
| TFCs
and other debt-instruments of the financial and corporate sector, the need to |
|
| evolve
and introduce a suitable debt-instrument complying fully with the
requirements |
|
| of
Sharia is being felt by the Modaraba sector as well. Careful research and |
|
| development
work is being carried by those who are genuinely interested in promoting |
|
| the
Islamic mode of financing and it is hoped that some tangible results may be |
|
| achieved
in this regard before long. |
|
|
| Utilization
of fresh credit lines naturally resulted in the increase of financial charges |
|
| to
Rs 24.2 million which, inter-alia, generated enhanced earnings in the leasing |
|
| and
Musharaka transactions. In view of the current problems being faced by the |
|
| commercial
and industrial sectors, delays and defaults are being experienced by |
|
| the
leasing sector in lease rental recovery. Consequently, the entire sector is
faced |
|
| with
the problem of provisioning for the overdues and potential losses. Your |
|
| Modaraba
also made sufficient provisions in accordance with prudential guidelines |
|
| in
order to strengthen the balance sheet. The Board had approved setting up of a |
|
| Contingency
Reserve last year as a matter of prudence in view of the current |
|
| economic
climate to which further allocations have been made this year as well. |
|
| Specific
guidelines have been provided by the Securities & Exchange Commission |
|
| for
dealing with the deferred taxation and your Modaraba has made requisite |
|
| provisioning
to comply with the regulations. |
|
|
| After
making a transfer to Special Reserve under the statutory requirements, and |
|
| accounting
for the provisioning made, it is proposed to pay a cash dividend of |
|
| 12.5%
to the certificate holders of the Modaraba and to carry an unappropriated |
|
| profit
of Rs. 2.36 million to the next year. |
|
|
| The
operating results for the year reflect adequately the diligent and consistent |
|
| efforts
of your Management to maintain a constant growth of Modaraba inspite of |
|
| the
visible decline in the fresh investments and reduced output of the
manufacturing |
|
| sector
of the country. Various steps taken in creating suitable reserves and
provisions |
|
| conform
to the professional prudence, for building enough cushion in the balance |
|
| sheet
to take care of any effect of the declining economy on the future results of |
|
| your
Modaraba. The proposed distribution to the Certificate-holders re-affirms the |
|
| policy
of the Modaraba to share its gains with the investors and should be
maintained |
|
| in
the future as well. |
|
|
|
|
|
|
| FUTURE
PROSPECTS |
|
|
|
| Our
economy is still going through an unprecedented period of uncertainties. |
|
| Inspite
of concerted efforts being made by the government, no significant improvement |
|
| has
been seen in the balance of payment, industrial output and GDP growth. The |
|
| steps
to revive the economy would, hopefully, produce positive results in due |
|
| course
but it will take some time for the economy to feel any real impact thereof. |
|
| Consequently,
instances of delays and defaults by the clients are increasing in the |
|
| financial
sector and leasing sector in not immune to the situation. |
|
|
|
|
|
| While
your Modaraba has mobilised arrangements for substantial resources, it is |
|
| getting
difficult to find good lessees for the expansion of the leasing portfolio at
the |
|
| rates
which could sustain a sound profit stream. Those players in the market who |
|
| have
access to cheaper funds are taking away the quality business. Consequently, |
|
| medium
sized lessors have to make exceptional efforts to capture a due portion of |
|
| good
leasing business at acceptable rates of return. Nevertheless, your Board has |
|
| decided
to exercise extreme caution in handling fresh business to ensure that the |
|
| overall
quality of the portfolio is not reduced by the pressures to maintain the |
|
| business
growth. A fine balance of energetic efforts and professional prudence is |
|
| needed
to be maintained of which your Management is fully aware of and capable to |
|
| achieve.
Extra efforts are being made to minimise the effect of the overdue rentals |
|
| on
your profit stream while pursuing the default cases vigorously. |
|
|
|
| YEAR
2000 PROBLEM |
|
|
|
| The
Board is happy to report that your Modaraba has successfully handled Y2K |
|
| problem
and is now fully complaint having a properly tested software. |
|
|
|
|
| CREDIT
RATING |
|
|
|
| The
credit rating awarded by the DCR-VIS Credit Rating Company Limited during |
|
| the
previous year was re-confirmed for the year under review as well. Your
Modaraba |
|
| enjoys
a respectable medium to long term entity rating of Triple B Minus which |
|
| reflects
"adequate credit quality with reasonably sufficient prudence factors..
Short |
|
| term
entity rating of D-3 indicates satisfactory liquidity and other prudence
factors, |
|
| qualifying
the Modaraba for the investment grade. |
|
|
|
|
|
| ACKNOWLEDGMENTS |
|
|
|
| The
Directors are pleased to put on record their appreciation of the devoted
efforts |
|
| made
by the staff for the successful operation of the Modaraba and valuable |
|
| guidance
provided by the Registrar Modaraba and Securities & Exchange Commission |
|
| of Pakistan. |
|
|
|
|
|
|
|
For and on behalf of the Board of Directors |
|
|
|
|
|
| Karachi: |
|
|
Basheer A. Chowdry |
|
| 30th
October, 1999 |
|
Chief Executive |
|
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
|
|
|
| We
have audited the annexed balance sheet as at June 30, 1999, and the related
profit |
|
| and
loss account and statement of changes in financial position (cash flow
statement), |
|
| together
with the notes to the accounts for the year ended June 30, 1999 of Al-Zamin |
|
| Leasing
Modaraba, which are Modaraba Company's (Al-Zamin 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 |
|
| in
respect of Al-Zamin Leasing 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 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, 1981, and are |
|
| further
in accordance with accounting policies consistently applied. |
|
|
|
|
|
| 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 statement of |
|
| changes
in financial position (cash flow statement), which are in agreement |
|
| with
the books of account, exhibit 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 the financial position for the year ended on that date; |
|
|
|
|
|
| ii)
in our opinion, no Zakat was deductible at source under the Zakat and |
|
| Ushr
Ordinance, 1980. |
|
|
|
|
|
|
| iii)
the business conducted, investments made and the expenditure incurred |
|
| by
the Modaraba are in accordance with objects, terms and conditions of |
|
| the Modaraba. |
|
|
|
|
|
|
| Karachi: |
|
|
M. Yousuf Adil Saleem & Co. |
|
| Date:
30th October 1999 |
|
|
Chartered Accountants |
|
|
|
|
|
|
| BALANCE
SHEET |
|
| AS
AT JUNE 30, 1999 |
|
|
|
|
|
|
|
1999 |
1998 |
|
|
|
Note |
Rupees |
Rupees |
|
| CAPITAL
AND RESERVES |
|
|
|
| Certificate
Capital |
|
|
|
| Authorised |
|
|
|
| 20,000,000
Modaraba |
|
|
|
| Certificates of Rs. 10 each |
|
|
|
200,000,000 |
200,000,000 |
|
|
|
|
|
|
========== |
========== |
|
| Issued,
subscribed and paid up |
|
|
3 |
126,500,000 |
126,500,000 |
|
| Reserves
and unappropriated profit |
|
4 |
26,590,040 |
31,551,979 |
|
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
153,090,040 |
158,051,979 |
|
|
|
|
|
|
| LONG
TERM FINANCES |
|
|
5 |
25,615,367 |
27,491,612 |
|
|
|
|
|
|
|
| LONG
TERM SECURITY DEPOSITS |
|
|
|
| ON LEASE CONTRACTS |
|
|
6 |
43,176,280 |
25,536,300 |
|
| DEFERRED TAXATION |
|
|
|
1,000,000 |
1,000,000 |
|
|
|
|
|
| CURRENT
LIABILITIES |
|
|
|
| Current
portion of long term finances |
|
|
35,893,718 |
20,971,033 |
|
| Current
portion of long term security |
|
|
|
|
| deposits
on lease contracts |
|
|
|
10,811,099 |
5,340,489 |
|
| Short term finances |
|
|
7 |
113,393,249 |
43,299,330 |
|
| Advance
lease rent/security deposits |
|
|
2,603,414 |
1,670,427 |
|
| Accrued and other liabilities |
|
|
8 |
6,300,687 |
2,155,338 |
|
| Taxation |
|
|
|
|
-- |
2,831,707 |
|
| Dividend |
|
|
|
9 |
16,607,555 |
829,764 |
|
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
185,609,722 |
77,098,088 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
408,491,409 |
289,177,979 |
|
|
|
|
========== |
========== |
|
|
|
|
| FIXED ASSETS - TANGIBLE |
|
|
10 |
5,671,574 |
5,292,511 |
|
| LONG TERM INVESTMENTS |
|
|
11 |
851,032 |
729,296 |
|
|
|
|
|
|
|
| NET
INVESTMENT IN LEASE |
|
|
|
| FINANCE |
|
|
|
| Net Investment |
|
|
12 |
300,979,162 |
218,542,065 |
|
| Current portion |
|
|
|
(118,475,648) |
(91,769,515) |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
182,503,514 |
126,772,550 |
|
|
|
|
|
|
| CURRENT
ASSETS |
|
|
|
| Current
portion of net Investment |
|
|
|
| in lease finance |
|
|
|
118,475,648 |
917,695,151 |
|
| Musharaka finance |
|
|
13 |
61,261,944 |
39,991,096 |
|
| Short term Investments |
|
|
14 |
483,717 |
422,501 |
|
| Advances,
deposits and |
|
|
|
|
| prepayments |
|
|
15 |
1,445,562 |
2,152,765 |
|
| Other receivables |
|
|
16 |
4,875,359 |
3,483,835 |
|
| Cash and bank balances |
|
|
17 |
32,920,059 |
18,563,910 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
219,465,289 |
156,383,622 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
408,491,409 |
289,177,979 |
|
|
|
|
========== |
========== |
|
|
| The annexed notes from 1 to 27
form |
|
| an
integral. part of these accounts. |
|
|
|
Basheer A. Chowdry |
|
C. Ahsanul Haq |
|
M.H.S Kazmi |
|
|
Chief Executive |
|
Chairman |
|
Director |
|
|
|
| PROFIT
AND LOSS ACCOUNT |
|
| FOR
THE YEAR ENDED JUNE 30, 1999 |
|
|
|
|
|
1999 |
1998 |
|
|
|
Note |
Rupees |
Rupees |
|
| REVENUE |
|
|
|
| Income from leasing operations |
|
|
44,832,817 |
42,365,678 |
|
| Profit
on Musharaka transactions |
|
|
9,705,744 |
7,473,280 |
|
| Profit
on investment in securities |
|
|
-- |
175,015 |
|
| Profit on PLS deposit
accounts |
|
|
726,345 |
566,666 |
|
| Other
income |
|
|
18 |
234,675 |
245,559 |
|
|
|
|
------------------ |
------------------ |
|
|
|
55,499,581 |
50,826,198 |
|
| OPERATING
AND FINANCIAL COSTS |
|
|
|
|
| Operating
expenses |
|
19 |
14,226,482 |
13,275,479 |
|
| Financial charges |
|
20 |
24,273,066 |
13,953,046 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
(38,499,548) |
(27,228,525) |
|
|
|
|
------------------ |
------------------ |
|
|
|
17,000,033 |
23,597,673 |
|
| OTHER
CHARGES |
|
|
| (Reversal)/Provision
for diminution |
|
|
| in
value of investments |
|
|
(182,952) |
4,019,360 |
|
| Allowance
for potential lease losses |
|
|
4,599,183 |
24,438 |
|
| Balances written off |
|
|
382,496 |
-- |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
(4,798,727) |
(4,043,798) |
|
|
|
|
------------------ |
------------------ |
|
| Profit
before taxation |
|
|
12,201,306 |
19,553,875 |
|
| Modaraba
Company's Management Fee |
|
|
(1,109,210) |
(1,777,625) |
|
|
|
|
------------------ |
------------------ |
|
| Profit for the year |
|
|
11,092,096 |
17,776,250 |
|
| Taxation |
|
|
|
|
|
| Current |
|
|
|
-- |
2,000,000 |
|
| Prior year |
|
|
|
241,535 |
272,144 |
|
| Deferred |
|
|
|
|
-- |
500,000 |
|
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
|
(241,535) |
(2,772,144) |
|
|
|
|
|
|
------------------ |
------------------ |
|
| Profit
after taxation |
|
|
|
10,850,561 |
15,004,106 |
|
| Unappropriated
profit brought forward |
|
|
11,892,530 |
889,245 |
|
|
|
|
|
|
------------------ |
------------------ |
|
| Profit
available for appropriation |
|
|
|
22,743,091 |
15,893,351 |
|
|
|
|
|
|
|
|
| APPROPRIATIONS |
|
|
|
| Dividend
@ Re. 1.25 per Certificate (1998-Nil) |
|
|
158,125,000 |
-- |
|
| Transferred
to special reserve |
|
|
|
2,170,112 |
3,000,821 |
|
| Transferred
to contingency reserve |
|
|
1,000,000 |
1,000,000 |
|
| Transferred
to reserve for deferred taxation |
|
|
1,400,000 |
-- |
|
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
|
(20,382,612) |
(4,000,821) |
|
|
|
|
|
|
------------------ |
------------------ |
|
| Unappropriated
profit carried forward |
|
|
2,360,479 |
11,892,530 |
|
|
|
|
|
|
========== |
========== |
|
| Earning
per Certificate |
|
|
26 |
0.86 |
1.19 |
|
|
|
|
|
|
|
|
|
| The
annexed notes from 1 to 27 form |
|
| an
integral part of these accounts. |
|
|
|
|
|
Basheer A. Chowdry |
|
C. Ahsanul Haq |
|
M.H.S Kazmi |
|
|
Chief Executive |
|
Chairman |
|
Director |
|
|
|
|
| STATEMENT
OF CHANGES IN FINANCIAL POSITION |
|
| (CASH
FLOW STATEMENT) FOR THE YEAR ENDED JUNE 30, 1999 |
|
|
|
|
|
1999 |
1998 |
|
|
|
|
Rupees |
Rupees |
|
|
|
|
| A.
CASH FLOW FROM OPERATING ACTIVITIES |
|
| Profit
after taxation |
|
|
|
10,850,561 |
15,004,106 |
|
| Adjustments |
|
|
|
|
|
|
| Financial charges |
|
|
|
24,273,066 |
13,953,046 |
|
| Depreciation |
|
|
|
|
1,397,672 |
1,173,813 |
|
| Provision
for diminution |
|
|
|
|
|
| in
value of investments |
|
|
|
(182,952) |
4,019,360 |
|
| Provision
for deferred tax |
|
|
|
-- |
500,000 |
|
| Allowance for potential
lease losses |
|
|
4,599,183 |
24,438 |
|
| Gain
on sale of fixed assets |
|
|
|
(49,170) |
(16,300) |
|
| Gain
on sale of investments |
|
|
|
-- |
(175,015) |
|
|
|
|
|
|
------------------ |
------------------ |
|
| Operating profit
before working capital changes |
|
|
40,888,360 |
34,483,448 |
|
|
|
|
|
|
|
|
| (Increase)/decrease
in current assets |
|
|
|
|
| Advances,
deposits and prepayments |
|
|
704,203 |
(795,616) |
|
| Other
receivables |
|
|
|
(1,391,524) |
(1,446,496) |
|
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
|
(687,321) |
(2,242,112) |
|
|
|
|
|
|
|
|
| Increase/(decrease)
in current liabilities |
|
|
| Advance
lease rent/security deposits |
|
|
932,987 |
69,006 |
|
| Accrued
and other liabilities |
|
|
|
677,399 |
(415,756) |
|
| Taxation |
|
|
|
|
(2,831,707) |
1,264,480 |
|
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
|
(1,221,321) |
917,730 |
|
|
|
|
|
|
------------------ |
------------------ |
|
| Cash
generated from operations |
|
|
|
38,979,718 |
33,159,066 |
|
| Financial charges paid |
|
|
|
(20,805,116) |
(13,999,076) |
|
|
|
|
|
|
------------------ |
------------------ |
|
| Net
cash from operating activities |
|
|
|
18,174,602 |
19,159,990 |
|
|
|
|
========== |
========== |
|
|
|
|
|
|
|
1999 |
1998 |
|
|
|
|
|
Rupees |
Rupees |
|
|
|
|
| B.
CASH FLOW FROM INVESTING ACTIVITIES |
|
|
| Fixed
capital expenditure |
|
(1,835,315) |
(1,322,742) |
|
| Investment
in listed securities |
|
|
-- |
(516,750) |
|
| Net
investment in leased assets |
|
|
(87,036,280) |
(5,301,621) |
|
| Proceeds
from sale of investments |
|
|
-- |
1,351,640 |
|
| Musharaka
financing |
|
|
(21,270,848) |
(4,250,014) |
|
| Proceeds
from disposal of fixed assets |
|
107,750 |
325,000 |
|
|
|
------------------ |
------------------ |
|
| Net
cash used in investing activities |
|
(110,034,693) |
(9,714,487) |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
| C.
CASH FLOW FROM FINANCING ACTIVITIES |
|
|
| Long
term Musharaka finance obtained |
|
|
45,000,000 |
30,000,000 |
|
| Security
deposits on lease contracts |
|
|
23,110,590 |
2,251,659 |
|
| Increase
in short term Musharaka finance |
|
|
70,093,919 |
9,147,136 |
|
| Repayment
of long term Musharaka finance |
|
|
(31,953,560) |
(18,538,596) |
|
| Dividend |
|
|
(34,709) |
(21,040,885) |
|
|
|
|
------------------ |
------------------ |
|
| Net
cash from financing activities |
|
|
106,216,240 |
1,819,314 |
|
|
|
|
------------------ |
------------------ |
|
| Net
increase in cash and cash equivalents |
|
|
14,356,149 |
11,264,817 |
|
| Cash
and bank balances at the beginning of the year |
|
18,563,910 |
7,299,093 |
|
|
|
|
------------------ |
------------------ |
|
| Cash
and bank balances at the end of the year |
|
|
32,920,059 |
18,563,910 |
|
|
|
|
========== |
========== |
|
|
|
Basheer A. Chowdry |
|
C. Ahsanul Haq |
|
M.H.S Kazmi |
|
|
Chief Executive |
|
Chairman |
|
Director |
|
|
|
| NOTES
TO THE ACCOUNTS |
|
| FOR
THE YEAR ENDED JUNE 30, 1999 |
|
|
| 1.
LEGAL STATUS AND NATURE OF BUSINESS |
|
| Al-Zamin
Leasing Modaraba has been formed under the Modaraba Companies |
|
| and
Modaraba (Floatation and Control) Ordinance, 1980 and the Rules framed |
|
| thereunder
and is managed by Al-Zamin Modaraba Management (Private) |
|
| Limited,
a Company incorporated in Pakistan under the Companies Ordinance, |
|
| 1984
and registered with the Registrar of Modaraba Companies and Modarabas |
|
| under
the Modaraba Companies and Modaraba (Floatation and Control) |
|
| Ordinance, 1980. |
|
|
| The
Modaraba is listed on Karachi, Lahore and Islamabad Stock Exchanges. |
|
| The
Modaraba started its operation as a specific purpose Modaraba with |
|
| leasing
as its main business. With the approval of the Corporate Law Authority, |
|
| the
Modaraba was converted into Multi-purpose Modaraba in 1995 thereby |
|
| allowing
to undertake various business transactions under the Islamic Modes |
|
| of Financing. |
|
|
| 2.
SIGNIFICANT ACCOUNTING POLICIES |
|
|
| 2.1
Accounting convention |
|
| These
accounts have been prepared under the 'historical cost convention'. |
|
|
| 2.2
Staff retirement benefits |
|
| Modaraba
operates a contributory provident fund scheme for it's |
|
| employees
eligible under the scheme. Equal monthly contributions |
|
| are
made by the Modaraba and the employees in accordance with the |
|
| rules. |
|
|
| 2.3 Taxation |
|
|
|
| Current |
|
| Provision
for current taxation is based on taxable income at current |
|
| tax
rates after taking into account tax exemption, rebates and tax |
|
| credits
available, if any. |
|
|
| Deferred |
|
| Deferred
tax is accounted for by using the liability method on all major |
|
| timing
differences excluding tax effect on those timing differences |
|
| which
are not likely to reverse in the foreseeable future. As a measure |
|
| of
prudence, deferred tax debits are not accounted for. |
|
|
| 2.4
Fixed assets and depreciation |
|
| Fixed
assets are stated at cost less accumulated depreciation. |
|
|
| Depreciation
is charged to income applying the straight line method. |
|
|
| Depreciation
on additions/disposals during the year is charged |
|
| proportionately
for the period of use. |
|
|
| Gain
or loss on disposal of assets is accounted for in the year in which |
|
| it arises. |
|
|
| 2.5 Investments |
|
|
|
| a)
Long term investment in quoted shares are stated at cost. Provision |
|
| is
made for the decline, other than temporary in the value of |
|
| investment. |
|
|
| b)
Short term investment in quoted shares are stated at lower of |
|
| cost
and market value determined on an aggregate portfolio |
|
| basis. |
|
|
| 2.6
Provision for Doubtful Debts |
|
| Provision
for doubtful debts on potential lease losses is made at the |
|
| year
end after review of outstanding lease portfolio on the basis of |
|
| State
Bank of Pakistan Prudential Regulations as applies to Modaraba. |
|
|
| 2.7
Deferred cost |
|
| Deferred
cost is written off over a maximum period of five years from |
|
| the
year of deferment. |
|
|
| 2.8
Lease accounting |
|
| The
Modaraba provides assets on leasing arrangements to its clients |
|
| under
lease agreements as approved by the Religious Board. These |
|
| leases
are recorded in the books of accounts as finance lease in line |
|
| with
International Accounting Standard 17. |
|
|
| 2.9
Revenue recognition |
|
|
|
| a)
For leasing transactions, the unearned finance income is deferred |
|
| and
amortized to income over the term of lease applying the |
|
| annuity
method to produce a constant rate of return on the net |
|
| investment
in leases. Unrealized lease income on potential lease |
|
| losses
is excluded from the income from leasing operations in |
|
| accordance
with the requirement of State Bank of Pakistan |
|
| Prudential
Regulations as applies to Modaraba. |
|
|
| b)
Profit from Morabaha transactions is recognised on pro-rata accrual |
|
| basis,
calculated on number of days funds were utilised. |
|
|
| c)
Profit on Musharaka investments and finance is accounted for on |
|
| the
basis of the projected rate of profit. The effect of adjustments, |
|
| if
any, between actual rate and projected rate of profit is accounted |
|
| for
at the time of determination of the actual rate. Unrealized |
|
| Musharaka
income is excluded from profit on Musharaka in |
|
| accordance
with the requirement of SBP Prudential Regulations. |
|
|
| d)
Profit on short term placements, term deposits and investments |
|
| is
recognised on accrual basis. |
|
|
| e)
Capital gain/(loss) on sale of investments is accounted for in the |
|
| year
in which it arises. |
|
|
| f)
Dividend income from shares is recognized at the time of closure |
|
| of
the shares transfer books of the company declaring the dividend |
|
| and
is shown net of Zakat. |
|
|
| g)
Income from fee and commission is recognised as and when it |
|
|
| 3.
ISSUED, SUBSCRIBED AND PAID UP CAPITAL |
|
| Fully
paid Modaraba Certificates of Rs. 10 each. |
|
|
|
| 1999 |
1998 |
|
|
|
1999 |
1998 |
|
| Certificates |
Certificates |
|
|
|
Rupees |
Rupees |
|
|
|
|
| 10,000,000 |
10,000,000 |
Fully paid in cash |
|
100,000,000 |
100,000,000 |
|
| 2,650,000 |
2,650,000 |
Issued as fully paid |
|
|
|
bonus certificates |
|
26,500,000 |
26,500,000 |
|
| ------------------ |
------------------ |
|
|
|
------------------ |
------------------ |
|
| 12,650,000 |
12,650,000 |
|
|
|
126,500,000 |
126,500,000 |
|
| ========== |
========== |
|
|
|
========== |
========== |
|
|
|
|
| 4.
RESERVES AND UNAPPROPRIATED PROFIT |
|
|
|
|
|
|
|
| 4.1
Capital Reserve |
|
|
|
| Special Reserve |
|
|
|
|
| Opening balance |
|
|
|
13,659,449 |
10,658,628 |
|
| Transferred during the year |
|
|
|
2,170,112 |
3,000,821 |
|
| Balance at the end of the year |
|
|
|
15,829,561 |
13,659,449 |
|
| Contingency
Reserve |
|
|
|
|
|
| Opening balance |
|
|
|
6,000,000 |
-- |
|
| Transferred from general
reserve |
|
|
|
-- |
5,000,000 |
|
| Transferred during the year |
|
|
|
1,000,000 |
1,000,000 |
|
| Balance at the end of the year |
|
|
|
7,000,000 |
6,000,000 |
|
| Deferred
Tax Reserve (Note No. 22) |
|
|
|
|
| Transferred during the year |
|
|
|
1,400,000 |
-- |
|
|
|
|
|
|
| 4,2
General Reserve |
|
|
|
| General Reserve |
|
|
|
|
| Opening balance |
|
|
|
-- |
5,000,000 |
|
| Transferred
to contingency reserve |
|
|
-- |
(5,000,000) |
|
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
|
-- |
-- |
|
| 4.3 Unappropriated profit |
|
|
|
2,360,479 |
11,892,530 |
|
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
26,590,040 |
31,551,979 |
|
|
|
|
========== |
========== |
|
|
| Special
reserve represents appropriation @ 20% of profit after tax as per the |
|
| rules
of State Bank of Pakistan for non-banking financial institutions. |
|
|
| Contingency
reserve has been created as a matter of prudence specifically to |
|
| provide
for possible losses on lease receivables. In view of the prevailing |
|
| economic
climate, the directors consider this reserve not available for distribution |
|
| at present. |
|
|
|
|
|
|
|
1999 |
1998 |
|
| 5.
LONG TERM MORAHABA FINANCES |
|
|
Rupees |
Rupees |
|
| Finance
from financial institutions |
|
|
|
| Opening balance |
|
|
|
48,462,645 |
37,001,241 |
|
| Obtained during the year |
|
|
|
45,000,000 |
30,000,000 |
|
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
93,462,645 |
67,001,241 |
|
| Paid
during the year |
|
|
|
(31,953,560) |
(18,538,596) |
|
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
61,509,085 |
48,462,645 |
|
| Payable
within one year |
|
|
|
|
|
| shown
under current liabilities |
|
|
|
(35,893,718) |
(20,971,033) |
|
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
25,615,367 |
27,491,612 |
|
|
|
|
========== |
========== |
|
|
|
|
|
|
| Amount |
|
|
|
|
90,000,000 |
70,000,000 |
|
| Marked-up Price |
|
|
|
116,212,068 |
99,712,939 |
|
| Rate
of profit |
|
|
|
|
18.25%/21.50% |
20% / 21.50% |
|
|
|
|
| 5.1
The finances are payable in quarterly and half yearly installments and are |
|
| secured
against hypothecation of specific leased out assets and charge on |
|
| receivables. |
|
|
|
|
|
|
|
|
|
1999 |
1998 |
|
| 6.
LONG TERM SECURITY DEPOSITS |
|
|
Rupees |
Rupees |
|
| ON
LEASE CONTRACTS |
|
|
|
|
|
| Customer's
security deposits |
|
|
|
53,987,379 |
30,876,789 |
|
| Payable
within one year shown |
|
|
|
|
|
| under
current liabilities |
|
|
|
(10,811,099) |
(5,340,489) |
|
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
43,176,280 |
25,536,300 |
|
|
|
|
|
|
========== |
========== |
|
|
|
|
|
|
| 7.
SHORT TERM FINANCES |
|
|
|
| Musharaka
finance (7.1) |
|
|
|
| Financial institutions |
|
|
|
63,000,000 |
-- |
|
| Leasing companies |
|
|
|
12,798,776 |
11,569,589 |
|
| Investment company |
|
|
|
-- |
4,000,000 |
|
| Individuals |
|
|
|
|
19,710,000 |
7,635,000 |
|
| Morabaha
finance (7.2) |
|
|
|
|
|
| Banking companies |
|
|
|
17,884,473 |
20,094,741 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
113,393,249 |
43,299,330 |
|
|
|
|
========== |
========== |
|
|
|
|
| 7.1
These finances have been obtained for a period of 90 days to 365 days at a |
|
| profit
rate ranging from 16.25% to 20.50% (1998 - 18% to 21%) per annum. |
|
| These
are secured by way of demand promissory notes and/or pledge of |
|
| marketable
securities. |
|
|
|
|
|
|
| 7.2
The Modaraba has financing facilities from Scheduled Commercial Banks |
|
| and
are secured against pledge of marketable securities and/or hypothecation |
|
| of
leased assets and receivables. The aggregate sale price of Morabaha |
|
| financing
is Rs. 28 million with a repurchase price of Rs. 34.372 million. |
|
|
|
|
|
|
|
1999 |
1998 |
|
|
|
|
Rupees |
Rupees |
|
| 8.
ACCRUED AND OTHER LIABILITIES |
|
|
| Profit payable on
secured Musharaka finances |
|
|
4,941,484 |
1,473,534 |
|
| Accrued expenses |
|
|
|
636,475 |
681,804 |
|
| Lease termination |
|
|
|
720,780 |
-- |
|
| Withholding tax |
|
|
|
1,948 |
-- |
|
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
6,300,687 |
2,155,338 |
|
|
|
|
========== |
========== |
|
|
|
|
|
|
|
| 9. DIVIDEND |
|
|
|
|
| Proposed |
|
|
|
15,812,500 |
-- |
|
| Unclaimed |
|
|
|
795,055 |
829,764 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
16,607,555 |
829,764 |
|
|
|
|
========== |
========== |
|
|
| 10.
FIXED ASSETS - TANGIBLE |
|
|
| Particulars |
|
Cost as at |
Additions/ |
Cost as at |
Accumulated |
Depreciation |
Accumulated |
Book |
Rate |
|
July 01, |
(deletion) |
June 30, |
depreciation |
for the year/ |
depreciation |
Value at |
% |
|
1998 |
during the |
1999 |
at July 01, |
(on deletions) |
at June 30, |
June 30, |
|
|
|
year |
|
1998 |
|
1999 |
1999 |
|
|
| Office
equipment |
1,733,125 |
302,700 |
2,026,425 |
441,464 |
187,886 |
626,452 |
1,399,973 |
10 |
|
|
(9,400) |
|
(2,898) |
|
|
| Furniture
and fixtures |
1,419,987 |
284,765 |
1,704,752 |
238,851 |
169,077 |
407,928 |
1,296,824 |
10 |
| Vehicles |
|
4,673,437 |
1,247,850 |
5,680,925 |
1,853,723 |
1,040,709 |
2,706,148 |
2,974,777 |
20 |
|
|
(240,362) |
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
| 1999 Rupees |
|
7,826,549 |
1,835,315 |
9,412,102 |
2,534,038 |
1,397,672 |
3,740,528 |
5,671,574 |
|
|
|
(249,762) |
|
(191,182) |
|
|
|
========== |
========== |
========== |
========== |
========== |
========== |
========== |
|
| 1998 Rupees |
|
6,881,807 |
1,322,742 |
7,826,549 |
1,429,525 |
1,173,813 |
2,534,038 |
5,292,511 |
|
|
|
(378,000) |
|
(69,300) |
|
|
|
========== |
========== |
========== |
========== |
========== |
========== |
========== |
|
|
| 10.1
Disposal of Fixed Assets |
|
|
| Particulars |
|
Cost |
Accumulated |
Book |
Sale |
Particulars of |
|
|
|
depreciation |
Value |
Proceed |
purchaser |
|
|
| Motor
vehicle |
|
240,362 |
188,284 |
52,078 |
106,250 |
Mr. Akif Tufail |
|
|
|
House No. 5/A, Hussain
Street, |
|
|
|
|
Muslim Town, Lahore |
|
| Equipment |
|
9,400 |
2,898 |
6,502 |
1,500 |
World Net |
|
|
|
|
Shop No. 13, D-33,
Block-N, |
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
North Nazimabad, Karachi. |
|
| 1999
Rupees |
|
249,762 |
191,182 |
58,580 |
107,750 |
|
|
|
========== |
========== |
========== |
========== |
|
| 1998 Rupees |
|
378,000 |
69,300 |
308,700 |
325,000 |
|
|
|
========== |
========== |
========== |
========== |
|
|
|
|
|
| 11.
LONG TERM INVESTMENTS |
|
|
|
|
|
|
| Name
of the Company |
|
No. of shares |
Market |
1999 |
1998 |
|
|
|
/certificates |
value |
Rupees |
Rupees |
|
|
|
|
|
|
| Maple Leaf Cement Factory
Limited |
38,250 |
109,013 |
2,089,800 |
2,089,800 |
|
| Pakistan
Telecommunication |
|
|
|
| Corporation Limited |
|
20,000 |
397,000 |
1,011,100 |
1,011,100 |
|
| Dhan Fibres Limited |
|
20,000 |
92,000 |
234,750 |
234,750 |
|
| Indus Motors Limited |
|
5,000 |
62,500 |
123,300 |
123,300 |
|
| ICP 21st Mutual Fund |
|
5,000 |
7,500 |
111,025 |
111,025 |
|
| KESC Limited |
|
2,200 |
18,920 |
105,980 |
105,980 |
|
| ICP 19th Mutual Fund |
|
2,500 |
25,125 |
77,900 |
77,900 |
|
| Hub Power Company Limited |
|
5,000 |
70,500 |
69,700 |
69,700 |
|
| Askari Commercial Bank Limited |
|
2,656 |
32,005 |
65,320 |
65,320 |
|
| Kashmir
Polytex Limited |
|
5,000 |
5,000 |
61,575 |
61,575 |
|
| Nishat Chunian Limited |
|
1,500 |
12,525 |
54,240 |
54,240 |
|
| Agri Autos Limited (Face value
Rs. 5) |
2,000 |
5,900 |
43,135 |
43,135 |
|
| Reliance Spinning Mills Limited |
|
1,500 |
12,750 |
41,445 |
41,445 |
|
| Fauji Cement Limited |
|
100 |
295 |
1,000 |
1,000 |
|
|
|
|
------------------ |
------------------ |
------------------ |
|
|
|
851,033 |
4,090,270 |
4,090,270 |
|
|
|
|
|
|
| Less:
Provision for diminution in value |
|
|
|
| Opening balance |
|
|
3,360,974 |
-- |
|
| Provision / (Reversal) during
the year |
|
(121,736) |
3,360,974 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
(3,239,238) |
(3,360,974) |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
851,032 |
729,296 |
|
|
|
|
========== |
========== |
|
| 11.1
The face value of above fully paid shares / certificates unless otherwise |
|
|
|
| mentioned
is Rs. 10 each. |
|
|
|
|
|
|
|
|
|
|
|
1999 |
1998 |
|
|
|
Rupees |
Rupees |
|
| 12.
NET INVESTMENT IN LEASE FINANCE |
|
|
|
| Minimum
lease payments receivable (12.1) |
|
326,287,974 |
248,076,497 |
|
| Residual
value of leased assets |
|
|
58,734,378 |
34,560,788 |
|
|
|
|
------------------ |
------------------ |
|
| Lease contracts receivable |
|
|
385,022,352 |
282,637,285 |
|
|
|
|
|
|
| Less: |
|
|
|
|
|
| Unearned
lease income |
|
|
78,096,794 |
62,748,007 |
|
| Provision
for potential lease losses |
|
5,946,396 |
1,347,213 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
(84,043,190) |
(64,095,220) |
|
|
|
|
------------------ |
------------------ |
|
| Net investment |
|
|
|
300,979,162 |
218,542,065 |
|
|
|
|
========== |
========== |
|
|
| 12.1
Minimum lease rentals receivable |
|
|
|
|
| Due within one year |
|
|
|
152,275,089 |
109,731,717 |
|
| Due
after one year but not |
|
|
|
| later than 5 years |
|
|
|
174,012,885 |
138,344,780 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
326,287,974 |
248,076,497 |
|
|
|
|
========== |
========== |
|
|
|
|
| The
amounts are generally secured against leased assets, personal guarantees |
|
| and
promissory notes by the lessees. |
|
|
|
|
|
| The
income of Rs. 9,371,916/- (1998 - Rs 3,769,106/-) has been transferred |
|
| to
suspense account and deducted from income on lease operations. Till |
|
| last
year, the unrealized income was shown together with provision in profit |
|
| and
loss account and reduced separately under allowances for potential |
|
| lease losses. |
|
|
|
|
|
|
|
|
|
|
1999 |
1998 |
|
|
|
|
|
Rupees |
Rupees |
|
| 13.
MUSHARAKA FINANCE |
|
|
|
| Secured |
|
|
|
61,261,944 |
39,991,096 |
|
|
|
|
========== |
========== |
|
|
|
|
| It
represents investments under Musharaka basis for working capital. Bank
Guarantee |
|
| and
Shares are kept as security. Expected rate of profit ranges between 19% to
24% |
|
| (1998-21%
to 24%) per annum. |
|
|
| 14.
SHORT TERM INVESTMENTS |
|
|
|
| Name
of the Company |
|
No. of shares |
Market |
1999 |
1998 |
|
|
|
/certificates |
value |
|
|
|
|
|
| Financial Link Modaraba |
|
11,800 |
7,080 |
118,000 |
118,000 |
|
| Cherat Cement Limited |
|
2,500 |
32,500 |
111,650 |
111,650 |
|
| Adamjee
Insurance Company Limited |
1,663 |
82,479 |
99,400 |
99,400 |
|
| Indus Motors Limited |
|
2,000 |
25,000 |
92,820 |
92,820 |
|
| Bank Al-Habib Limited |
|
2,590 |
63,828 |
70,200 |
70,200 |
|
| Sui
Northern Gas Company Limited |
1,600 |
13,280 |
55,244 |
55,244 |
|
| Ghandara
Leasing Company Limited |
1,000 |
4,500 |
54,740 |
54,740 |
|
| ICP
SEMF |
|
|
1,500 |
15,825 |
49,075 |
49,075 |
|
| Pakistan
International Airlines |
|
|
| Corporation |
|
|
2,200 |
28,380 |
42,768 |
42,768 |
|
| Saif Textile Mills Limited |
|
1,210 |
8,470 |
38,660 |
38,660 |
|
| KASB Premier Fund Limited |
|
5,000 |
12,500 |
36,450 |
36,450 |
|
| Bolan
Casting Limited |
|
1,000 |
18,000 |
35,160 |
35,160 |
|
| Engro Chemicals (Pakistan)
Limited |
287 |
25,422 |
27,505 |
27,505 |
|
| D.G. Khan Cement Company
Limited |
470 |
1,998 |
27,216 |
27,216 |
|
| Union Bank Limited |
|
726 |
6,534 |
26,801 |
26,801 |
|
| Kohinoor Power Company Limited |
600 |
1,950 |
21,120 |
21,120 |
|
| Bank Al-Habib Limited |
|
400 |
7,200 |
20,601 |
20,601 |
|
| Agri
Auto Industries Limited |
|
1,000 |
2,950 |
18,090 |
18,090 |
|
| Lever
Brothers Pakistan Limited |
|
|
| (Face Value Rs. 50) |
|
24 |
18,240 |
17,923 |
17,923 |
|
| ICP
12th Mutual Fund |
|
500 |
5,500 |
15,564 |
15,564 |
|
| First
Mehran Modaraba |
|
1,200 |
3,000 |
15,336 |
15,336 |
|
| Pakistan
State Oil Limited |
|
314 |
34,780 |
15,264 |
15,264 |
|
| Sakrand Sugar Mills Limited |
|
1,300 |
13,000 |
13,094 |
13,094 |
|
| First Ibrahim Modaraba |
|
1,100 |
4,565 |
11,844 |
11,844 |
|
| Adamjee Insurance Company
Limited |
180 |
6,993 |
11,764 |
11,764 |
|
| Pak Suzuki Motor Company
Limited |
200 |
5,000 |
11,700 |
11,700 |
|
| Maqbool Textile Mills Limited |
|
1,000 |
4,250 |
11,340 |
11,340 |
|
| Elite
Capital Modaraba |
|
1,000 |
850 |
11,687 |
11,687 |
|
| ICP
6th Mutual Fund |
|
500 |
5,975 |
10,624 |
10,624 |
|
| Singer Pakistan Limited |
|
125 |
6,600 |
10,589 |
10,589 |
|
| Ciba Geigy (Pakistan) Limited |
|
100 |
3,600 |
8,465 |
8,465 |
|
| Ravi
Textile Mills Limited |
|
1,000 |
1,000 |
8,340 |
8,340 |
|
| Dewan Salman Fibre Limited |
|
209 |
5,256 |
7,224 |
7,224 |
|
| Pakistan
Industrial Credit and |
|
|
| Investment Corporation Limited |
|
198 |
1,416 |
6,859 |
6,859 |
|
| Fauji
Fertilizer Company Limited |
|
100 |
4,110 |
5,209 |
5,209 |
|
| Zahur
Textile Mills Limited |
|
380 |
646 |
4,828 |
4,828 |
|
| Trust Modaraba |
|
|
182 |
590 |
1,859 |
1,859 |
|
| First Hajveri Modaraba |
|
100 |
450 |
984 |
984 |
|
|
|
|
------------------ |
------------------ |
------------------ |
|
|
|
|
483,717 |
1,145,997 |
1,145,997 |
|
| Less:
Provision for diminution in value |
|
| Opening balance |
|
|
723,496 |
65,110 |
|
| Provision/(Reversal)
during the year |
|
(61,216) |
658,386 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
(662,280) |
(723,496) |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
483,717 |
422,501 |
|
|
|
|
========== |
========== |
|
|
|
|
| 14.1
The face value of above fully paid shares/certificates |
|
| unless
otherwise mentioned is Rs. 10 each. |
|
|
|
|
|
1999 |
1998 |
|
|
|
|
Rupees |
Rupees |
|
|
|
|
|
| 15.
ADVANCES, DEPOSITS AND PREPAYMENTS |
|
| Advance income tax |
|
|
|
112,748 |
1,356,350 |
|
| Short term deposits |
|
|
|
340,900 |
40,900 |
|
| Short
term prepayments |
|
|
|
789,537 |
560,532 |
|
| Other |
|
|
|
205,377 |
194,983 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
1,448,562 |
2,152,765 |
|
|
|
|
========== |
========== |
|
|
|
|
| 16.
OTHER RECEIVABLES |
|
|
|
| Considered
Good |
|
|
|
| Accrued
profit |
|
|
|
2,989,997 |
2,588,699 |
|
| Receivable from Management
Company |
|
|
1,108,686 |
266,895 |
|
| Other |
|
|
|
776,676 |
628,241 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
4,875,359 |
3,483,835 |
|
|
|
|
========== |
========== |
|
|
| 17. CASH AND BANK BALANCES |
|
|
|
|
| Cash in
hand |
|
|
|
|
52,095 |
45,752 |
|
| Cash
with banks |
|
|
|
| In PLS accounts |
|
|
|
|
32,745,075 |
18,476,482 |
|
| In
current accounts |
|
|
|
122,889 |
41,676 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
32,867,964 |
18,518,158 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
32,920,059 |
18,563,910 |
|
|
|
|
========== |
========== |
|
|
|
|
|
|
| 18.
OTHER INCOME |
|
|
|
| Dividend income |
|
|
|
86,716 |
120,697 |
|
| Profit on disposal of fixed
assets |
|
|
|
49,170 |
16,300 |
|
| Miscellaneous |
|
|
|
|
98,789 |
108,562 |
|
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
234,675 |
245,559 |
|
|
|
|
========== |
========== |
|
|
|
|
| 19.
OPERATING EXPENSES |
|
|
|
| Salaries
and benefits (19.1) |
|
|
|
6,950,445 |
5,979,356 |
|
| Rent, rates and taxes |
|
|
|
987,282 |
726,589 |
|
| Telecommunication |
|
|
|
794,350 |
807,149 |
|
| Printing and stationery |
|
|
|
383,348 |
466,005 |
|
| Fees and subscription |
|
|
|
289,560 |
357,831 |
|
| Electricity and gas |
|
|
|
425,491 |
404,031 |
|
| Insurance |
|
|
|
|
777,488 |
869,420 |
|
| Legal and professional |
|
|
|
267,927 |
442,188 |
|
| Postage |
|
|
|
|
118,382 |
189,326 |
|
| Repairs and maintenance |
|
|
|
499,731 |
726,670 |
|
| Vehicles running and
maintenance |
|
|
812,051 |
585,021 |
|
| Travelling
and conveyance |
|
|
|
153,011 |
149,340 |
|
| Advertisement |
|
|
|
83,380 |
146,960 |
|
| Auditors' remuneration (19.2) |
|
|
|
43,000 |
37,500 |
|
| Newspapers
and periodicals |
|
|
|
61,508 |
60,187 |
|
| Entertainment |
|
|
|
|
68,582 |
86,585 |
|
| Depreciation |
|
|
|
|
1,397,672 |
1,173,813 |
|
| Donation (19.3) |
|
|
|
4,000 |
10,000 |
|
| Other |
|
|
|
|
109,274 |
57,508 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
14,226,482 |
13,275,479 |
|
|
|
|
========== |
========== |
|
|
|
|
| 19.1
These are in respect of officers and |
|
|
| employees
of the Modaraba. |
|
|
|
| Number
of employees at year end |
|
|
22 |
21 |
|
|
|
|
| 19.2
Auditors' remuneration |
|
|
|
| Audit
fee |
|
|
40,000 |
35,000 |
|
| Out of pocket expenses |
|
|
3,000 |
2,500 |
|
|
|
------------------ |
------------------ |
|
|
|
43,000 |
37,500 |
|
|
|
========== |
========== |
|
|
|
|
| 19.3
No director and his spouse had any |
|
|
| interest
in the donees fund. |
|
|
| 20.
FINANCIAL CHARGES |
|
|
| Profit
on long term finance |
|
|
11,835,303 |
6,294,695 |
|
| Profit on short term finance |
|
|
12,019,275 |
7,241,778 |
|
| Front
end fee and bank charges |
|
|
418,488 |
416,573 |
|
|
|
|
------------------ |
------------------ |
|
|
|
24,273,066 |
13,953,046 |
|
|
|
|
========== |
========== |
|
|
|
|
| 21.
REMUNERATION OF CHIEF EXECUTIVE AND EXECUTIVES |
|
|
| The
following emoluments were paid by the Modaraba to other Executives and |
|
| Officers: |
|
|
|
|
|
|
|
|
|
|
|
1999 |
1998 |
|
|
|
|
Rupees |
Rupees |
|
|
|
|
| Basic salary |
|
|
|
2,935,783 |
2,781,297 |
|
| House rent allowance |
|
|
|
1,267,622 |
1,250,568 |
|
| Utility allowance |
|
|
|
223,515 |
207,242 |
|
| Leave
encashment |
|
|
|
149,982 |
160,424 |
|
| Bonus |
|
|
|
171,650 |
173,600 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
4,748,552 |
4,573,131 |
|
|
|
|
|
========== |
========== |
|
| Number of persons |
|
|
|
14 |
13 |
|
|
|
|
|
|
|
|
|
|
|
| The
Chief Executive and Executives were provided with free use of company cars. |
|
|
|
|
|
|
|
|
| 22. TAXATION |
|
|
|
|
|
| There
is no tax on the Modaraba under clause 102E of Second Schedule of |
|
|
|
| Income
Tax Ordinance, 1979 for the assessment year 1999-2000, if 90% of the |
|
|
|
| profits
are distributed as a cash dividend to the certificate holders. |
|
|
|
|
|
|
|
|
| The
liability for deferred tax works out to Rs. 6.7 million (1998 - 6.9 million). |
|
|
|
| Proportionate
provision after reducing existing provision has been taken to capital |
|
|
|
| reserve
as required by Circular No. 16 dated September 09, 1999 of the Securities |
|
|
|
| and
Exchange Commission of Pakistan. |
|
|
|
|
|
|
|
| 23.
CREDIT RISK AND CONCENTRATIONS OF CREDIT RISK |
|
|
|
| The
Modaraba attempts to control credit risk by monitoring credit exposures, |
|
|
|
| limiting
transactions with specific counterparties, and continuously assessing the |
|
|
|
| credit
worthiness of counterparties. |
|
|
|
|
|
|
|
|
|
| Al-Zamin
Leasing Modaraba follows two sets of guidelines. Internally, it has its |
|
|
|
| own
operating policy duly approved by the Board of Directors of the Modaraba |
|
|
|
| Management
Company whereas, externally it adheres to the regulations issued |
|
|
|
| by
the State Bank of Pakistan. The operating policy defines the extent of
exposure |
|
|
|
| with
reference to a particular sector or group of leases. |
|
|
|
|
|
|
|
|
|
| Detail
of the industry sector analysis of lease portfolio is given below: |
|
|
|
|
|
|
|
|
1999 |
1999 |
|
|
|
|
|
Rupees |
Percentage |
|
|
|
|
|
|
|
| Textile and cotton |
|
|
|
75,453,509 |
25.07 |
|
| Chemicals and pharmaceutical |
|
|
|
32,050,023 |
10.65 |
|
| Engineering |
|
|
|
25,236,325 |
8.38 |
|
| Cement |
|
|
|
22,123,358 |
7.35 |
|
| Energy, oil and gas |
|
|
|
16,397,290 |
5.45 |
|
| Sugar |
|
|
|
15,345,813 |
5.10 |
|
| Health
care |
|
|
|
9,352,796 |
3.11 |
|
| Banks and DFI's |
|
|
|
8,779,156 |
2.92 |
|
| Transport |
|
|
|
8,328,846 |
2.77 |
|
| Construction |
|
|
|
6,594,611 |
2.19 |
|
| Food and beverages |
|
|
|
3,319,627 |
1.10 |
|
| Paper and board |
|
|
|
2,756,892 |
0.92 |
|
| Leather and footwear |
|
|
|
780,001 |
0.26 |
|
| Hotels |
|
|
|
581,951 |
0.19 |
|
| Glass
and ceramics |
|
|
|
564,467 |
0.18 |
|
| Others |
|
|
|
73,314,497 |
24.36 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
300,979,162 |
100.00 |
|
|
|
|
========== |
========== |
|
|
| In
addition, the Modaraba has placed certain funds under Musharaka |
|
| arrangements
with various companies and individuals. |
|
|
| Fair
value of financial instruments |
|
| The
carrying value of all the financial instruments reflected in the financial
statements |
|
| approximates
their fair values after making provisions as referred in Note No. 11, |
|
| 12, 13 and 14. |
|
|
| 24.
PROFIT/MARKUP RATE RISK MANAGEMENT |
|
| The
Modaraba manages this risk by matching the repricing of assets and
liabilities. |
|
| The
Modaraba's markup rate sensitivity position, based on the earlier of
contractual |
|
| repricing
or maturity dates, is as follows: |
|
|
| FINANCIAL
ASSETS |
|
Less than |
One month |
Over |
Not exposed to |
Total |
|
|
|
|
one month |
to one year |
one year |
profit rate/ |
|
|
|
|
|
|
markup risk |
|
|
|
|
|
|
|
| Long
term investment |
|
-- |
-- |
-- |
851,032 |
851,032 |
|
| Net
investment in lease finance |
|
137,496 |
110,705,566 |
190,136,100 |
-- |
300,979,162 |
|
| Musharaka
finance |
|
21,781,615 |
39,480,329 |
-- |
-- |
61,261,944 |
|
| Short
term investment |
|
-- |
-- |
-- |
483,717 |
483,717 |
|
| Advances,
deposits & prepayments |
-- |
-- |
-- |
1,448,562 |
1,448,562 |
|
| Other
receivables |
|
-- |
-- |
-- |
4,875,359 |
4,875,359 |
|
| Cash
and bank balances |
|
25,338,128 |
7,459,042 |
-- |
122,889 |
32,920,059 |
|
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
|
|
Rupees |
47,257,239 |
157,644,937 |
190,136,100 |
7,781,559 |
402,819,835 |
|
|
|
|
========== |
========== |
========== |
========== |
========== |
|
|
|
|
| FINANCIAL
LIABILITIES |
|
Less than |
One month |
Over |
Not exposed to |
Total |
|
|
|
|
one month |
to one year |
one year |
profit rate/ |
|
|
|
|
|
|
markup risk |
|
|
|
|
|
|
|
| Long
term finances |
|
4,353,208 |
31,540,510 |
25,615,367 |
-- |
61,509,085 |
|
| Lease
key money |
|
-- |
-- |
-- |
53,987,379 |
53,987,379 |
|
| Short
term finances |
|
21,100,000 |
92,293,249 |
-- |
-- |
113,393,249 |
|
| Advance
lease rent/security deposits |
-- |
-- |
-- |
2,603,414 |
2,603,414 |
|
| Accrued
and other liabilities |
|
-- |
-- |
-- |
6,300,687 |
6,300,687 |
|
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
|
Rupees |
25,453,208 |
123,833,759 |
25,615,367 |
62,891,480 |
237,793,814 |
|
|
========== |
========== |
========== |
========== |
========== |
|
|
| The
effective markup rate for each of the monetary financial instrument is as
follows: |
|
|
| Financial
assets |
|
Effective profit rate% |
|
|
| Net
investment in lease finance |
|
23.34 |
|
| Musharaka
finance |
|
19-24 |
|
| Cash
and bank balances |
|
11 |
|
|
|
|
| Financial
Liabilities |
|
|
|
| Long
term finance |
|
18.25 - 21.50 |
|
| Short
term finance |
|
16.25 - 20.50 |
|
|
| 25.
OWNER'S EQUITY |
|
| Movements
owner's equity during the year are identified and adequately disclosed |
|
| in
the financial statements. |
|
|
| 26.
EARNING PER CERTIFICATE |
|
| There
is no dilutive effect on the basic earning per certificate of the Modaraba, |
|
| which
is based on:-- |
|
|
|
|
1999 |
1998 |
|
|
|
Rupees |
Rupees |
|
|
|
|
| Profit
after taxation |
|
|
10,850,561 |
15,004,106 |
|
| Weighted
average number of ordinary certificates |
|
|
12,650,000 |
12,650,000 |
|
| Earning
per Certificate |
|
|
0.86 |
1.19 |
|
|
| 27. FIGURES |
|
| These
have been bounded off to the nearest Rupee. |
|
|
| Corresponding
figures have been rearranged and regrouped wherever necessary |
|
| for
the purpose of comparison. |
|
|
|
Basheer A. Chowdry |
|
C. Ahsanul Haq |
|
M.H.S Kazmi |
|
|
Chief Executive |
|
Chairman |
|
Director |
|
|
|
| PATTERN
OF CERTIFICATE HOLDING AS AT JUNE 30, 1999 |
|
|
| Number of |
|
Certificate holding |
|
Total |
|
| Certificate |
|
Certificates |
|
| holders |
From |
|
To |
Held |
|
|
| 2,173 |
1 |
-- |
100 |
113,031 |
|
| 772 |
101 |
-- |
500 |
165,233 |
|
| 2,636 |
501 |
-- |
1,000 |
1,687,058 |
|
| 665 |
1,001 |
-- |
5,000 |
1,373,476 |
|
| 125 |
5,001 |
-- |
10,000 |
871,302 |
|
| 45 |
10,001 |
-- |
15,000 |
525,391 |
|
| 8 |
15,001 |
-- |
20,000 |
140,995 |
|
| 8 |
20,001 |
-- |
25,000 |
177,011 |
|
| 5 |
25,001 |
-- |
30,000 |
134,832 |
|
| 4 |
30,001 |
-- |
35,000 |
129,767 |
|
| 3 |
35,001 |
-- |
40,000 |
108,914 |
|
| 2 |
40,001 |
-- |
45,000 |
87,790 |
|
| 1 |
45,001 |
-- |
50,000 |
47,150 |
|
| 2 |
60,001 |
-- |
65,000 |
126,500 |
|
| 1 |
90,001 |
-- |
95,000 |
94,875 |
|
| 1 |
110,001 |
-- |
115,000 |
112,430 |
|
| 1 |
125,001 |
-- |
130,000 |
127,500 |
|
| 1 |
175,001 |
-- |
180,000 |
178,885 |
|
| 1 |
230,001 |
-- |
235,000 |
234,000 |
|
| 1 |
315,001 |
-- |
320,000 |
316,250 |
|
| 1 |
490,001 |
-- |
495,000 |
493,621 |
|
| 1 |
515,001 |
-- |
520,000 |
515,235 |
|
| 1 |
620,001 |
-- |
625,000 |
624,722 |
|
| 1 |
2,005,001 |
-- |
2,010,000 |
2,008,855 |
|
| 1 |
2,255,001 |
-- |
2,260,000 |
2,255,177 |
|
| ------------------ |
|
------------------ |
|
| 6,460 |
|
12,650,000 |
|
| ========== |
|
========== |
|
|
| CATEGORIES
OF CERTIFICATE HOLDING AS AT JUNE 30, 1999 |
|
|
| Categories of |
|
Number |
Certificates |
Percentage |
|
| Certificate
holders |
|
Certificate |
Held |
|
|
|
holders |
|
|
|
|
|
| 1.
INDIVIDUALS |
|
6422 |
5,730,783 |
45.30 |
|
| 2.
INVESTMENT COMPANIES |
|
7 |
1,023,610 |
8.09 |
|
| 3.
INSURANCE COMPANIES |
|
5 |
214,582 |
1.70 |
|
| 4.
JOINT STOCK COMPANIES |
|
9 |
176,654 |
1.40 |
|
| 5.
FINANCIAL INSTITUTIONS |
|
10 |
3,223,766 |
25.48 |
|
| 6.
MODARABA COMPANY |
|
1 |
2,008,855 |
15.88 |
|
| 7.
MODARABAS |
|
3 |
194,500 |
1.54 |
|
| 8.
OTHERS (TO BE SPECIFIED) |
|
3 |
77,250 |
0.61 |
|
|
------------------ |
------------------ |
------------------ |
|
|
6,460 |
12,650,000 |
100.00 |
|
|
========== |
========== |
========== |
|
|
|
|
|
|
|
|
|
|
|
