| Arif Habib Securities Ltd - 2005 |
==================================================================================== BALANCE SHEET AS AT JUNE 30, 2005 ==================================================================================== (Rupees) Notes 2005 2004 ==================================================================================== SHARE CAPITAL AND RESERVES AUTHORISED CAPITAL: 50,000,000 (2004: 25,000,000) Ordinary shares of Rs 10/- each 500,000,000 250,000,000 ISSUED, SUBSCRIBED AND PAID-UP CAPITAL: 20,000,000 (2004: 8,000,000) Ordinary shares of Rs 10/- each 200,000,000 80,000,000 Reserve for issue of bonus shares - 120,000,000 General reserve 4,000,000,000 2,500,000 Deficit on revaluation of investments (6,000,000) - Unappropriated profit 1,303,872,082 300,499,996 5,497,872,082 3,000,499,996 CURRENT LIABILITIES: Short term running finance - secured 4 1,098,780,748 - Margin Finance-banks 5 1,072,032,900 - Creditors, accrued & other liabilities 6 112,836,893 53,155,203 Taxation 7 56,400,000 49,100,000 Proposed dividend - 120,000,000 2,340,050,541 222,255,203 Contingencies & commitments 8 7,837,922,623 3,222,755,199 Operating fixed assets - tangible 9 6,755,485 3,061,770 Stork exchange memberships & licenses 10 36,600,000 41,600,000 Long term investments 11 436,120,080 17,000,000 Long term loan and advance 12 583,049,345 68,600,000 Long term deposits 13 2,931,000 3,896,000 CURRENT ASSETS: Marketable securities 14 5,002,211,259 1,993,370,205 Trade debts 15 304,352,629 30,772,285 Sale proceed receivables 16 - 445,441,070 Margin trading - clients 17 1,072,728,675 - Advances, deposits, prepayments & other receivables 18 94,364,398 64,800,078 Cash & bank balances 19 28,809,752 554,213,791 6,502,466,713 3,088,597,429 7,837,922,623 3,222,755,199 ==================================================================================== ==================================================================================== PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED JUNE 30, 2005 ==================================================================================== (Rupees) Notes 2005 2004 ==================================================================================== Operating revenue 20 793,062,395 434,067,416 Capital gain on investments - net 2,160,001,445 1,464,663,280 2,953,063,840 1,898,730,696 Operating expenses 21 129,966,119 97,970,102 Operating profit 2,823,097,721 1,800,760,594 Financial charges 22 (109,657,306) (32,295,713) Other charges - (8,503) Other income 23 6,976,697 5,928,634 Net reversal due to change in fair value of marketable securities (80,452,145) (20,480,928) (183,132,754) (46,856,510) Profit before taxation 2,639,964,967 1,753,904,083 Provision for taxation 7 (56,592,881) (48,565,547) Profit after taxation 2,583,372,086 1,705,338,536 Un-appropriated profit brought forward 300,499,996 85,161,461 Profit available for appropriations 2,883,872,082 1,790,499,996 APPROPRIATIONS: Transferred to general reserve (1,500,000,000) (1,250,000,000) INTERIM: - Dividend @ 100% or Rs 10/- per share (80,000,000) (120,000,000) (2004: @ 150% or Rs 15 per share) - Proposed issue of bonus shares Nil - (120,000,000) (2004: 150% i.e. 3 shares for every 2 shares) - Final proposed issue of bonus shares 50% 2.2.1 - - i.e. 1 share for every 2 shares (1,580,000,000) (1,490,000,000) Un-appropriated profit carried forward 1,303,872,082 300,499,996 Earnings per share-basic and diluted 25 129.17 85.27 ==================================================================================== ====================================================================================
CASH FLOW STATEMENT FOR THE YEAR ENDED JUNE 30, 2005
====================================================================================
(Rupees)
2005 2004
====================================================================================
CASH FLOW FROM OPERATING ACTIVITIES:
Profit before taxation 2,639,964,967 1,753,904,083
ADJUSTMENT FOR:
Depreciation 1,429,085 1,423,790
Gain/Loss on sale of fixed assets - 8,503
Dividend income (373,932,338) -
Interest income (6,517,001) -
K.E.S.C deposit written off - 20,000
Financial charges 109,657,306 32,295,713
(269,362,948) 33,748,006
Operating profit before working capital changes 2,370,602,019 1,787,652,089
CHANGES IN WORKING CAPITAL
(INCREASE)/DECREASE IN CURRENT ASSETS:
Trade debts (273,580,343) (8,094,365)
Advances, deposits and other receivables (18,599,980) (22,723,017)
INCREASE/(DECREASE) IN CURRENT LIABILITIES:
Accrued and other liabilities 50,541,635 7,075,446
(241,638,688) (23,741,936)
Cash generated from operating activities 2,128,963,331 1,763,910,153
Income Tax paid (78,163,789) (33,998,822)
Financial charges paid (100,517,252) (30,034,371)
Net cash generated from operating activities 1,950,282,291 1,699,876,960
CASH FLOW FROM INVESTING ACTIVITIES:
Fixed capital expenditure (5,122,800) (746,535)
Memberships & licenses 5,000,000 -
Proceed from sale of fixed assets - 13,000
Dividend received 392,280,981 -
Interest received 6,074,925 -
Long term investment (425,120,080) (1,000,000)
Short term loan - -
Long term loan to associated undertaking (784,449,345) (20,000,000)
Long term deposit 965,000 (2,572,000)
Net cash used in investing activities (810,371,319) (24,305,535)
CASH FLOW FROM FINANCING ACTIVITIES:
Dividend paid (200,000,000) (60,000,000)
Net cash used in financing activities (200,000,000) (60,000,000)
Increase in cash and cash equivalents 939,910,972 1,615,571,425
Cash and bank balance
at beginning of the period 2,993,025,066 1,377,453,640
Cash and cash equivalent
at end of the period 3,932,936,038 2,993,025,066
====================================================================================
======================================================================================================================================================= STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED JUNE 30, 2005 ======================================================================================================================================================= (Rupees) Share Share Reserve for General Surplus/(deficit) Accumu- Total Capital Premium issue of Reserve on revaluation of lated Notes Reserve Bonus Shares investment Profit ======================================================================================================================================================= Balance as at June 30, 2003 60,000,000 - 20,000,000 1,250,000,000 - 85,161,460 1,415,161,460 as previously reported Effect of Change in accounting policy 2.2.1 - 20,000,000 (20,000,000) - - 60,000,000 60,000,000 Balance as at June 30, 2003 as restated 60,000,000 20,000,000 - 1,250,000,000 - 145,161,460 1,475,161,460 Profit for the year - - - - - 1,705,338,536 1,705,338,536 APPROPRIATIONS: Issue of bonus shares 2.2.1 20,000,000 (20,000,000) - - - - - Final Dividend for the year - - - - - (60,000,000) (60,000,000) ended June 30, 2003 2.2.1 Interim proposed Issue of bonus shares - - 120,000,000 - - (120,000,000) - Transferred to general reserves - - - 1,250,000,000 - (1,250,000,000)) - Interim Dividend - - - - - (120,000,000) (120,000,000) Balance as at June 30, 2004 80,000,000 - 120,000,000 2,500,000,000 - 300,499,996 3,000,499,996 Profit for the period - - - - - 2,583,372,086 2,583,372,086 APPROPRIATIONS: Issue of bonus shares against interim 120,000,000 - (120,000,000) - - - - declaration of 2004 Transferred to general reserves - - - 1,500,000,000 - (1,500,000,000)) - Interim Dividend for the year - - - - - (80,000,000) (80,000,000) ended June 30, 2005 Surplus (Deficit) on revaluation of investments - - - - (6,000,000) - (6,000,000) Balance as at June 30, 2005 200,000,000 - - 4,000,000,000 (6,000,000) 1,303,872,082 5,497,872,082 =======================================================================================================================================================NOTES TO THE ACCOUNTS FOR THE YEAR ENDED JUNE 30, 2005 1. STATUS AND NATURE OF BUSINESS 1.1. The company was incorporated on November 14, 1994 as a Public Limited Company under the Companies Ordinance, 1984. It was given a certificate of commencement of business on April 23, 1995 and started its commercial operations from July 1, 1995. It acquired Corporate membership of Stock Exchanges on February 08, 1999 and was listed on Karachi, Lahore and Islamabad Stock Exchanges in June 2001. The company is principally engaged in the business of financial consultancy, brokerage, underwriting, portfolio management and securities research. 1.2. During the year, the company resolved to buy back its own shares from its shareholders at a price of Rs 360/- per share pursuant to section 95-A of the Companies Ordinance, 1984 and companies (Buy-back of shares) Rules, 1999. Subsequent to the balance sheet date, the company acquired its two million shares against written offers received from shareholders in response to its tender notice published in the month of June 2005. Consequently subsequent to the balance sheet date the capital of the company shall stand reduced by Rs 20 million and its unappropriated profit shall be reduced by Rs 700 million. 1.3. During the year, the authorised capital of the company was increased to Rs 500 million. The Memberships of the company of Islamabad Stock Exchange and National Commodity Exchange was transferred to AHL, its wholly owned subsidiary company. 1.4. During the year, the company increased its shareholding in Arif Habib Investment Management Limited to 78% (2004: 40%) with the acquisition of 1.520 million shares at a cost of Rs 15.20 million and the said company is now its majority owned subsidiary. 2. SIGNIFICANT ACCOUNTING POLICIES 2.1. BASIS OF PREPARATION These financial statements have been prepared under the 'historical cost convention', except for investments classified under held for trading and available for sale, which are stated at fair value. 2.2. STATEMENT OF COMPLIANCE These financial statements have been prepared in accordance with approved accounting standards as applicable in Pakistan and the requirements of the Companies Ordinance, 1984. Approved accounting standards comprise of such International Accounting Standards as notified under the provisions of the Companies Ordinance, 1984. Wherever, the requirements of the Companies Ordinance, 1984 or directives issued by the Securities and Exchange Commission of Pakistan differ with the requirements of these standards, the requirements of the Companies Ordinance, 1984 or the requirements of the said directives take precedence. 2.2.1. "During the year, the SECP substituted the Fourth Schedule of Companies Ordinance, 1984 which is effective from financial year ending on or after July 5, 2004. This has resulted in the change in accounting policy pertaining to the recognition of dividends proposed subsequent to the year's end. The company, effective from the current year, has not recognised the proposed issue of one bonus share for every two shares amounting to Rs 90 million, proposed subsequent to the year end, to comply with the substituted Fourth Schedule to the Companies Ordinance, 1984. Such a change in policy has been accounted for retrospectively. This has not resulted in restatement of comparative financial statements for the year ended June, 2004 reason that only interim dividend had been declared and no final dividend had been declared." 2.3. STAFF RETIREMENT BENEFITS The company operates an unrecognised provident fund for all of its eligible employees. Equal monthly contributions at the rate of 12.50% of basic salary are made respectively by the company and the employees. 2.4. TAXATION Provision for current taxation is based on taxable income at current rates of taxation after taking into account tax rebates and tax credit available, if any. The company provides for deferred taxation on liability method for all major temporary differences, if any. Net deferred tax debits, if any, on account of temporary differences have not been recognised. 2.5. OPERATING FIXED ASSETS AND DEPRECIATION Fixed assets are stated at cost less accumulated depreciation. Depreciation on fixed assets is charged on quarterly basis to income by applying reducing balance method at the rates specified in fixed assets note. Gains and losses on disposal of fixed assets, are taken to profit and loss account currently. Normal repairs and maintenance are charged to income as and when incurred. 2.6. MEMBERSHIP CARDS AND LICENSE These intangibles assets are stated at acquisition cost. Provision is made for decline, in value of these assets, if required. 2.7. INVESTMENTS IN ASSOCIATED UNDERTAKING AND SUBSIDIARIES The company accounts for investment in associated and subsidiary companies using the cost method. 2.8. INVESTMENT IN MARKETABLE SECURITIES The management determines the appropriate classification of its investments in accordance with the requirements of International Accounting Standard 39; 'Financial Instruments: Recognition and Measurement', at the time of purchase and re-evaluates this classification on a regular basis. Investments are categorised as follows: -- Held for Trading Securities Investments, which are acquired principally for the purpose of generating profit, from short - term fluctuations in price or dealer's margins, are classified as held for trading. These investments are initially recognised at cost and subsequently measured at fair value, being their market value at balance sheet date. The resulting gain or loss is included in profit or loss for the year. Whereas, cost is calculated on moving average basis. -- Held to Maturity Investments Investments with fixed maturity that the management has the intent and liability to hold the maturity are classified as held to maturity and are initially measured at cost and at subsequent reporting dates measured at amortised cost using the effective yield method. -- Available for Sale Securities Investments classified as available for sale are initially measured at cost, being the fair value of consideration given. At subsequent reporting dates, these investments are remeasured at of fair value (quoted market price), unless fair value cannot be reliably measured. The investments for which a quoted market price is not available, are measured at cost as it is not possible to apply any other valuation methodology. Realised and unrealised gains and losses arising from changes in fair value are charged to equity of the company. 2.9. TRADE DATE ACCOUNTING All "regular way" purchases and sales of listed shares are recognised on the trade date, that is the date that the company commits to purchase / sell the asset. Regular way purchases or sales of listed shares delivered on T+3 basis as per stock exchange regulations. 2.10. TRADE DEBTS These are stated net of provision for doubtful debts. Full provision is made against the debts considered doubtful. 2.11. PROVISIONS Provisions are recognised when the company has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation, and a reliable estimate of the amount can be made. 2.12. FINANCIAL INSTRUMENTS Financial instruments carried on the balance sheet include investments, receivables, cash and bank balances, finances under the mark-up arrangements, other payables, deposits, creditors, accrued and other liabilities. The particular recognition methods adopted are disclosed in the individual policy statements associated with each item. 2.13. FOREIGN CURRENCIES Foreign currency transactions are translated into Pak rupees at the rate of exchange prevailing on the date of each transaction. Assets and liabilities denominated in foreign currencies are translated into Pak rupee at the rate of exchange ruling on the balance sheet date. Exchange differences are included in income currently. 2.14. BORROWING COSTS Borrowing cost is charged to profit and loss account as incurred. 2.15. CASH AND CASH EQUIVALENTS For the purposes of the cash flow statement, cash and cash equivalents comprises of cash in hand, bank balances, marketable securities, receivables against trading of securities and short term running finance. 2.16. RELATED PARTY TRANSACTIONS AND TRANSFER PRICING The company had adopted accounting policy in respect of related party transactions and transfer pricing to account for all transactions at arm's length prices determined by using the Comparable Uncontrolled Price Method. 2.17. REVENUE RECOGNITION (i) Capital Gain or Loss Capital gains and losses on sale of marketable securities are recorded on the date of sale. (ii) Dividend / Return on Securities Dividend income is recognised when the right to receive payment is established. Whereas, return on securities other than shares is recognised on accrual basis. (iii) Brokerage Brokerage income is recognised as and when such services are provided. (iv) Underwriting Commission Underwriting commission is recognised when the agreement is executed. (v) Mark-up Interest Mark-up income is recognised on a time proportion basis that takes into account the effective yield. (vi) Income on Carry Over Transaction Income on carry over transactions is recognised on accrual basis. 3. ISSUED, SUBSCRIBED AND PAID UP CAPITAL ====================================================================================
(Rupees)
2005 2004
====================================================================================
4,000,000 Ordinary shares of Rs 10/- each
issued at par fully paid in cash
(June 2004: 4,000,000 shares) 40,000,000 40,000,000
1,000,000 Ordinary shares of Rs 10/- each
issued at a premium of Rs 30/- per share fully
paid in cash. (June 2004: 1,000,000 shares) 10,000,000 10,000,000
15,000,000 Ordinary shares of Rs 10/- each
issued as fully paid up bonus shares
(June 2004: 3,000,000 shares) 150,000,000 30,000,000
200,000,000 80,000,000
====================================================================================4.====================================================================================
(Rupees)
2005 2004
====================================================================================
Short Term Running Finance - secured 1,098,780,748 644,968,482
====================================================================================This represents aggregate short term running finance facilities obtained under mark-up arrangements of Rs 4,400 million (2004: Rs 2,040 million) from various commercial banks having mark-up ranging from 4.5% to 9.46% (2004: 4.5% to 6.0%) per annum calculated on a daily product basis payable quarterly.The arrangements are secured against pledge of marketable securities. 5. MARGIN FINANCE BANKS During the year, the company obtained margin finance facilities for its clients under mark-up arrangements of Rs 1,190 million in aggregate (2004: Rs Nil) from various commercial banks having mark-up ranging from 9.67% to 10.71% (2004: Nil) per annum calculated on a daily product basis and payable quarterly. The arrangements are secured against pledge of marketable securities. 6. CREDITORS, ACCRUED EXPENSES AND OTHER LIABILITIES ====================================================================================
(Rupees)
Note 2005 2004
====================================================================================
Creditors 80,686,538 43,504,657
Accrued expenses 17,066,276 5,003,056
Accrued markup 11,401,396 2,261,342
Due to KSE members 52,497 -
Advance from customer - 687,683
Unclaimed dividend 160,100 -
Staff provident fund 6.1 2,214,469 1,207,293
Other liabilities 1,255,617 491,172
112,836,893 53,155,203
====================================================================================6.1. Subsequent to the balance sheet date full payment has been transferred to the fund account.The company has applied for recognition of its provident fund to the Income Tax Department, which is pending for approval. 7. TAXATION ====================================================================================
(Rupees)
2005 2004
====================================================================================
Opening balance 49,100,000 15,000,000
PROVIDED DURING THE YEAR:
Current 56,400,000 48,565,547
Prior 192,881 -
56,592,881 48,565,547
Adjusted during the year (49,292,881) (11,465,547)
Closing balance 56,400,000 49,100,000
====================================================================================7.1. The income tax assessments of the company have been finalised up to and including the tax year 2004.8. CONTINGENCIES AND COMMITMENTS Contingency The company is contesting alongwith other defendants, for suits filed by M/s. Diamond Industries Limited and Mr Iftikhar Shafi (The Plaintiffs), in the year 2002-2003 and by M/s. Shafi Chemicals Industries Limited and Mr Nisar Elahi (The Plaintiffs), for damages jointly against Mr Saleem Chamdia, Mr Arif Habib, Mr Aqil Karim Dedhi, Mr A. Ghaffar Usman Moosani, Mr Shahid Ghaffar, the Karachi Stock Exchange (Guarantee) Limited (KSE), the Securities and Exchange Commission of Pakistan, the Central Depository Company of Pakistan (CDC), M/s. Saleem Chamdia Securities (Private) Limited, M/s. Arif Habib Securities Limited, M/s. Moosani Securities Limited and M/s. Aqil Karim Dedhi Securities Limited. The suits are for recovery of damages amounting to Rs 10,989,948,199/-, Rs 5,606,611,760/-, Rs 1,701,035,843/- and Rs 428,440,971/- respectively against the decision of the Karachi Stock Exchange in respect of Risk Management System of its Clearing House during the year 2000. As the Chairman and Chief Executive of the Company was the Chairman of the Board of Directors of the KSE of the year 2000, the Company has been made party to the suits by the plaintiff. All the suits at present are pending before the Sindh High Court, Karachi. While individual liability of respective individuals and undertakings is not quantifiable, in the opinion of the legal advisor of the Company the suits are likely to be dismissed as these are not based on factual or legal basis and no financial liability is expected to accrue as a consequence of the said suits against the company. The company has hence not made any provision in this respect in thee financial statements. Commitment ====================================================================================
(Rupees)
2005 2004
====================================================================================
COMMITMENT TO KSE:
Clearing House in respect
of trading in securities-(receivable)/payable (52,874,410) (3,625,495)
====================================================================================9. OPERATING FIXED ASSETS - TANGIBLE========================================================================================================================
COST DEPRECIATION Written down
Particulars As at Additions/ As at Rate As at For the year As at value as at
July 1, 04 (Deletions) June % July /(Adjustment) June June
30, 2005 01, 2004 30, 2005 30, 2005
========================================================================================================================
Computer & allied 2,114,638 1,932,550 3,324,738 33 1,138,004 771,926 1,187,480 2,137,258
(722,450) (755,450)
Office equipment 848,881 156,250 967,931 10 190,316 91,751 244,867 723,064
(37,200) (37,200)
Furniture and fixtures 476,003 - 452,555 10 213,020 34,828 224,400 228,155
(23,448) (23,448)
Vehicles 2,906,000 3,034,000 5,940,000 20 1,742,412 530,580 2,272,992 3,667,008
Total Rupees 2005 6,345,522 5,122,800 10,685,224 3,283,752 1,429,085 3,929,739 6,755,485
(783,098) (783,098)
Total Rupees 2004 7,267,237 746,535 6,345,522 3,506,709 1,423,790 3,283,752 3,061,770
(1,688,250) (1,646,747)
========================================================================================================================9.1. Where written down value of a fixed asset falls below Rs 10,000 or any addition is made up to Rs 10,000, the same is charged directly to Profit & Loss Account.10. STOCK EXCHANGE - MEMBERSHIP AND LICENSES ====================================================================================
(Rupees)
Notes 2005 2004
====================================================================================
MEMBERSHIP:
- Karachi Stock Exchange (Guarantee) Limited 15,000,000 15,000,000
- Lahore Stock Exchange (Guarantee) Limited 7,000,000 7,000,000
- Islamabad Stock Exchange (Guarantee) Limited 1.3 - 4,000,000
- National Commodity Exchange
of Pakistan Limited 1.3 - 1,000,000
22,000,000 27,000,000
OFFICES:
- 05 at Karachi (2004: 05 offices) 10,500,000 10,500,000
- 01 at Lahore (2004: 01 office) 2,000,000 2,000,000
12,500,000 12,500,000
BOOTHS:
- 03 at Karachi (2003: 03 booths) 2,100,000 2,100,000
36,600,000 41,600,000
====================================================================================11. LONG TERM INVESTMENTS====================================================================================
(Rupees)
Notes 2005 2004
====================================================================================
Investment in Subsidiaries 11.1 81,230,000 16,000,000
Available for sale 11.2 134,010,000 1,000,000
Other investment 11.3 220,880,080 -
436,120,080 17,000,000
====================================================================================11.1. INVESTMENT IN SUBSIDIARY COMPANIESThese shares are of Rs 10/- each unless stated otherwise. =================================================================================================================================================
Break up value per
Number of shares Particular Activity Auditors Holding (%) Cost Share
2005 2004
=================================================================================================================================================
2005 2004 2005 2004 2005 2004 Un audited Audited
Rupees
3,120,000 1,600,000 Arif Habib Investment Asset Tasser Hadi 78 40 31,200 000 16,000,000 66.16 29.83
Management Ltd. (Unquoted) Management Khalid &
Chief Executive Mr. Nasim Baig Company
5,003,000 - Arif Habib Limited Brokrage Rahim Iqbal 100 - 50,030,000 - 9.72
Rafiq & Co.
81,230,000 16,000,000
=================================================================================================================================================During the year, the company increased its shareholding in Arif Habib Investment Management Limited to 78% (2004: 40%) with the acquisition of 1.520 million shares at a cost of Rs 15.20 million and the said company is now its majority owned subsidiary.11.2. AVAILABLE FOR SALE INVESTMENT =================================================================================================
Number of Share Particular Cost Fair Value
2005 2004 2005 2004 2005 2004
Unaudited Audited
=================================================================================================
UNQUOTED:
10,000 10,000 Sun Biz (Private) Limited 1,000,000 1,000,000 1,000,000 1,000,000
Activity: Telebusiness
Auditor: Rao & Company
Chartered Accountant
1,901,000 - Rozgar Micro Finance
Bank Limited 19,010,000 - 19,010,000 -
Activity: Bank
Auditor: Ibrahim & Co.
Chartered Accountant
QUOTED:
4,000,000 - Al-Abbas Cement Limited 120,000,000 114,000,00 -
(Formerly Essa Cement Ltd.)
Chief Executive: Mr Shunaid Qureshi
Activity: Cement Industry
Auditor: Sikandar & Co.
Chartered Accountant
Deficit on revaluation on
inves(6,000,000)
134,010,000 1,000,000
=================================================================================================11.3. During the year, Arif Habib Group and Fatima Group decided to bid for the acquisition of Pak Arab Fertiliser Company Limited through Reliance Export (Private) Limited in which both groups made equal investments in the shape of equity and advances.Subsequent to the balance sheet date, the management and control of Pak Arab Fertiliser Company Limited was taken over by Reliance Export (Private) Limited with the approval of the Privatisation Commission. The above represents the amount invested by the company for acquiring 30% equity in the said company (also refer note 12.1). 12. LONG TERM LOAN AND ADVANCE UNSECURED - CONSIDERED GOOD ====================================================================================
(Rupees)
Notes 2005 2004
====================================================================================
Advance to Reliance Export (Pvt) Ltd, 12.1 784,449,345 -
(Associated undertaking)
Loan to Arif Habib Investment
Management Limited (Subsidiary) 12.2 68,600,000 68,600,000
853,049,345 68,600,000
====================================================================================12.1.As mentioned in detail in note 11.3, this represents the advance given by the company during the year to its associated company for the purpose of acquisition of Pak Arab Fertiliser Company Limited. 12.2. The loan carries a rate of return of 9.5% (2004: 9.5%) percent per annum on daily product basis receivable quarterly. The limit is Rs 100 million (2004: 100 million) and the tenure is 5 years (2004: 3 years). Maximum balance due from associated undertaking with reference to month end balance was Rs 71,885,283 (2004: Rs 69,870,814/-). 13. LONG TERM DEPOSITS ====================================================================================
(Rupees)
2005 2004
====================================================================================
Karachi Stock Exchange (Guarantee) Limited 860,000 515,000
Lahore Stock Exchange (Guarantee) Limited 1,480,000 580,000
Islamabad Stock Exchange (Guarantee) Limited - 100,000
National Commodity Exchange Limited - 2,200,000
National Clearing Company of Pakistan 500,000 400,000
Central Depository Company Limited 12,500 25,000
Telephone 78,500 76,000
2,931,000 3,896,000
====================================================================================14. INVESTMENT IN MARKETABLE SECURITIES=====================================================================================================================================================================================================================
No of Shares Name of Script/ Cost Rate Average Cost Market Rate Market Value Profit/(Loss)
Jun. '05 Jun. '04 Company Jun. '05 Jun. '04 Jun. '05 Jun. '04 Jun. '05 Jun. '04 Jun. '05 Jun. '04 Jun. '05 Jun. '04
Open End Mutual Funds
=====================================================================================================================================================================================================================
20,000 20,000 Atlas Income Fund 500,000 500,000 10,000,000 10,000,000 545.92 518.86 10,918,400 10,377,200 918,400 377,200
40,000 - Atlas Stock Mkt Fund 500.00 - 20,000,000 - 563.39 - 22,535,600 - 2,535,600 -
100,000 100,000 Faysal Bank B.G. Fund 100.00 100.00 10,000,000 10,000,000 114.00 98.70 11,400,000 9,870,000 1,400,000 (130,000)
227,228 200,000 Meezan Islamic Fund 44.00 50.00 10,000,000 10,000,000 75.72 61.25 17,210,218 12,250,000 7,210,218 2,250,000
387,288 320,000 50,000,000 30,000,000 62,064,218 32,497,200 12,064,218 2,497,200
Close End Mutual Funds
2,500,000 - 1st. Dawood M.Fund 10.00 - 25,000,000 - 10.00 - 25,000,000 - - -
125,000 - Abamco Composite 8.50 - 1,062,025 - 6.90 - 862,500 - (199,525) -
2,800,954 - BSJS Balance Fund 8.91 - 24,946,700 - 8.25 - 23,107,871 - (1,838,830) -
1,019,329 - Meezan Balance Fund 10.00 - 10,193,290 - 8.20 - 8,358,498 - (1,834,792) -
38,000,000 5,792,500 Pak Cap. Market Fund 10.05 10.12 382,082,674 58,601,925 11.95 10.25 454,100,000 59,373,125 72,017,326 771,200
45,118,000 - Pak Strateg. Alloc. Fund 8.98 - 404,962,125 - 9.65 - 435,388,700 - 30,426,575 -
11,300,573 - Pakistan Premier Fund 12.06 - 136,288,026 - 14.85 - 167,813,509 - 31,525,483 -
14,817,000 - PICIC Investment Fund 14.23 - 210,829,525 - 15.00 - 222,255,000 - 11,425,475 -
115,680,856 5,792,500 1,195,364,365 58,601,925 1,336,886,077 59,373,125 141,521,712 771,200
Modaraba
1,522,500 - B.R.R. Int'l Modaraba 10.40 - 15,834,000 - 7.95 - 12,103,875 - (3,730,125) -
Leasing Companies
113,000 - Ibrahim Leasing 20.22 - 2,284,675 - 20.22 - 2,284,675 - - -
Investment Bank
1,089,375 - 1st, Dawood Inv. Bank 13.14 - 14,317,500 - 16.40 - 17,865,750 - 3,548,250 -
Commercial Bank
4,627,020 - Askari Comm. Bank 89.66 - 414,867,669 - 78.00 - 360,907,560 - (53,960,109) -
5,738,500 2,050,000 Bank of Punjab 71.35 47.19 409,416,031 96,734,475 83.75 52.20 480,599,375 107,010,000 71,183,344 10,275,525
121 - Bank Fl-Falah 20.00 - 2,420 - 40.75 - 4,931 - 2,511 -
3,601,900 - Faysal Bank Ltd. 49.96 - 179,933,830 - 53.80 - 193,782,220 - 13,848,390 -
797,500 - Muslim Comm. Bank 62.13 - 49,550,285 - 79.30 - 63,241,750 - 13,691,465 -
- - Muslim Com. Bank R - - - - - - - - - -
11,002,000 15,674,500 N.I.B. 16.00 10.21 176,082,834 160,049,276 23.00 20.00 253,046,000 313,490,000 76,963,166 153,440,724
20 9,803,700 National Bank Pak 99.35 62.23 1,987 610,117,310 107.95 66.45 2,159 651,455,865 172 41,338,556
3,989,225 - Union Bank Limited 42.98 - 171,440,825 - 39.50 - 157,574,388 - (13,866,438) -
29,756,286 27,528,200 1,401,295,881 866,901,061 1,509,158,382 1,071,955,865 107,862,501 205,054,804
Insurance
4,521 - Century Insurance 38.90 - 175,867 - 36.70 - 165,921 - (9,946) -
250,000 - Pakistan Reinsurance 44.95 - 11,237,475 - 51.55 - 12,887,500 - 1,650,025 -
254,521 - 11,413,342 - 13,053,421 - 1,640,079 -
Textile Spinning
979,185 - Dewan Spinning Mills 10.00 - 9,791,850 - 8.80 - 8,616,828 - (1,175,022) -
208,200 173,500 Din Textile 26.61 31.93 5,539,375 5,539,375 38.50 48.90 8,015,700 8,484,150 2,476,325 2,944,775
287,300 122,000 Gadoon Textile 77.18 38.14 22,174,681 4,653,425 82.05 69.00 23,572,965 8,418,000 1,398,284 3,764,575
216,700 216,700 Gulistan Textile 25.28 25.28 5,479,200 5,479,200 29.75 43.70 6,446,825 9,469,790 967,625 3,990,590
953,400 648,400 Ideal Spinning 8.29 6.54 7,899,290 4,239,465 8.95 10.60 8,532,930 6,873,040 633,640 2,633,575
2,644,785 1,160,600 50,884,396 19,911,465 55,185,248 33,244,980 4,300,852 13,333,515
Textile Weaving
56,100 51,000 Kohinoor Weaving 19.52 21.47 1,095,197 1,095,197 31.30 41.20 1,755,930 2,101,200 660,733 1,006,003
Textile Composite
35,500 - Blessed Textile 56.00 - 1,988,000 - 76.50 - 2,715,750 - 727,750 -
3,712 - Gul Ahmed Textile 70.04 - 260,000 - 55.60 - 206,387 - (53,613) -
767,000 571,000 Ishaq Textile 13.03 11.49 9,990,956 6,558,956 18.75 21.00 14,381,250 11,991,000 4,390,294 5,432,044
1,500 1,000 Nishat (Chunian) 18.36 27.55 27,545 27,545 95.10 59.00 142,650 59,000 115,105 31,455
- - Nishat Mills - - - - - - - - - -
132,000 82,000 Reliance Weaving 15.36 12.00 2,027,525 984,000 27.05 27.00 3,570,600 2,214,000 1,543,075 1,230,000
9,674 7,000 Saphire Textile 64.41 53.87 623,078 377,070 93.00 66.00 899,682 462,000 276,604 84,930
452,725 391,500 Sapphire Fibre 79.02 45.92 35,774,418 17,975,763 78.00 75.05 35,312,550 29,382,075 (461,868) 11,406,312
1,402,111 1,052,500 50,691,522 25,923,334 57,228,869 44,108,075 6,537,348 18,184,741
Sugar
29,000 - Dewan Sugar 23.90 - 693,100 - 17.25 - 500,250 - (192,850) -
5,658,894 - Shakarganj Sugar (Pref) 10.00 - 56,588,940 - 11.00 - 62,247,834 - 5,658,894 -
5,687,894 - 57,282,040 - 62,748,084 - 5,466,044 -
Cement
2,982,500 - Attock Cement 63.45 - 189,234,890 - 68.00 - 202,810,000 - 13,575,110 -
31,500 - Best way Cement 45.00 - 1,417,500 - 42.00 - 1,323,000 - (94,500) -
39,675 - Cherat Cement 72.09 - 2,860,153 - 61.50 - 2,440,013 - (420,140) -
- - Dewan Cement - - - - - - - - - -
1,471,500 - Dewan Hattar Cement 10.69 - 15,730,975 - 9.25 - 13,611,375 - (2,119,600) -
416,030 - D.G. Khan Cement 55.45 - 23,068,854 - 55.75 - 23,193,673 - 124,819 -
1,327,000 - Fauji Cement 15.11 - 20,056,676 - 12.80 - 16,985,600 - (3,071,076) -
20,200 - Kohat Cement 56.44 - 1,140,150 - 55.85 - 1,128,170 - (11,980) -
16,505,000 - Lucky Cement 45.89 - 757,345,785 - 45.50 - 750,977,500 - (6,368,285) -
6,605,500 - Maple Leaf Cement 27.88 - 184,143,350 - 21.80 - 143,999,900 - (40,143,450) -
29,398,905 - 1,194,998,333 - 1,156,469,230 - (38,529,103) -
Refinery
150,000 - Attock Refinery Ltd. 150.78 - 22,616,408 - 159.55 208.00 23,932,500 - 1,316,092 -
500,000 - Bosicor Pakistan 15.94 - 7,970,550 - 12.95 - 6,475,000 - (1,495,550) -
30,000 - National Refinery 339.01 - 10,170,340 - 316.30 - 9,489,000 - (681,340) -
680,000 - 40,757,298 - 39,896,500 - (860,798) -
Oil & Gas Marketing
9,000 1,000,000 Pakistan State Oil 375.78 253.27 3,382,000 253,273,275 - 256.75 - 256,750,000 (3,382,000) 3,476,725
169,000 - Sui Southern Gas 23.68 - 4,001,320 - 23.15 - 3,912,350 - (88,970) -
178,000 1,000,000 7,383,320 253,273,275 3,912,350 256,750,000 (3,470,970) 3,476,725
Oil & Gas Exploration
- 150,000 Pakistan Oil Field - 202.3 - 30,341,515 - 208.50 - 31,275,000 - 933,485
261,000 - Pakistan Petroleum 210.64 - 54,976,273 - 215.10 - 56,141,100 - 1,164,827 -
100.00 - O.G.D.C 103.98 - 10,397,525 - 105.30 - 10,530,000 - 132,475 -
361,000 150,000 65,373,798 30,341,515 66,671,100 31,275,000 1,297,302 933,485
Automobile Assembler
477,700 403,500 Honda Atlas Cars 50.85 45.63 24,292,657 18,410,482 57.00 70.00 27,228,900 28,245,000 2,936,243 9,834,518
879,400 215,500 Indus Motors 112.06 105.6 98,549,797 22,746,095 90.00 91.20 79,146,000 19,653,600 (19,403,797) (3,092,495)
1,892,000 844,000 Pak Suzuki Motors 121.84 132.6 230,523,656 111,899,627 100.00 115.90 189,200,000 97,819,600 (41,323,656) (14,080,027)
3,249,100 1,463,000 353,366,110 153,056,204 295,574,900 145,178,200 (57,791,210) (7,338,004)
Engineering
18,000 - Pakistan Engineering 70.00 - 1,260,000 - 82.30 - 1,481,400 - 221,400 -
Autoparts & Assess
7,000 - Agriauto Industries 40.00 - 280.000 - 50.00 - 350,000 - 70,000
Cable &n Electrical
2,500,000 - Pak Electron (Pref) 10.00 - 25,000,000 - 10.00 - 25,000,000 - - -
148,695 - Pak Electron 55.65 - 8,275,200 - 39.00 - 5,932,531 - (2,342,270) -
2,648,695 - 33,75,200 - 30,932,931 - (2,342,270) -
Power Generation
8,000 - Hub Power Co. 27.02 0.00 216.133 - 26.40 17.90 211,200 - (4,933) -
Transport
- 2,000,000 P.I.A. Corporation - 20.00 - 40,000,000 - 17.90 - 35,800,000 - (4,200,000)
Tech & Communication
212,500 1,500,000 P.T.C.L 68.78 41.70 14,614,956 62,550,500 65.95 42.15 14,014,375 63,225,000 (600,581) 674,500
1,263,000 - Telecard 13.98 - 17,662,179 - 12.15 - 15,345,450 - (2,316,729) -
500,000 - TRG Pakistan 14.52 - 7,259,225 - 10.10 - 5,050,000 - (2,209,225) -
1,975,500 1,500,000 39,536,360 62,550,500 34,409,825 63,225,000 (5,126,535) 674,500
Fertiliser
1,300,700 1,229,500 Engro Chemicals 125.26 96.78 162,924,906 118,996,335 115.25 97.50 149,905,675 119,876,250 (13,019,231) 879,915
784,000 1,000,000 F.F.B.L. 31.69 19.12 24,844,764 19,116,375 26.90 18.90 21,089,600 18,900,000 (3,755,164) (216,375)
- 488,600 Fauji Fertilizer Co. Ltd. - 118.83 - 58,058,607 - 118,85 - 58,070,110 - 11,503
- - Pakistan PTA - - - - - - - - - -
2,084,700 2,718,100 187,769,670 196,171,317 170,995,275 196,846,360 (16,774,395) 675,043
Pharmaceuticals
2,280 1,900 Glaxosmithkline 138.67 166.41 316,170 316,170 175.95 208.00 401,166 395,200 84,996 79,030
Papers & Board
36,750 - Packages Ltd. 172.38 - 6,335,000 - 140,000 - 5,145,000 - (1,190,000) -
20,000 - Security Paper 152.25 - 3,045,000 - 140.00 - 2,800,000 - (245,000) -
56,750 - 9,380,000 - 7,945,000 - (1,435,000) -
TFCs
2,578 2,578 Al-Zamin L.M 5,000.00 5,000.00 12,890,000 12,890,000 5,000.00 5,000.00 12,890,000 12,890,000 - -
8,747 - Bank Al Habib 4,990.00 - 43,726,253 - 4,999.00 - 43,726,523 - - -
400 400 Maple Leaf 2,499.00 5,000.00 999,600 1,666,000 2,499.00 5,450.00 999,600 2,180,000 - 514,000
1,000 1,000 Orix Leasing 5,000.00 5,000.00 5,000.000 5,000.000 5,010.00 5,010.00 5,010.000 5,010.000 10,000 10,000
12,725 3,978 62,615,853 19,556,000 62,625,853 20,080,000 10,000 524,000
199,275,371 44,741,778 Grand total 4,846,991,162 1,757,697,963 5,002,211,259 1,993,370,205 155,220,097 235,672,242
Changes due to fair 235,672,242 256,153,170
Market Value Opening Reversal (80,452,145) (20,480,928)
155,220,097 235,672,242
5,002,211,259 1,993,370,205
=====================================================================================================================================================================================================================15. TRADE DEBTS====================================================================================
(Rupees)
2005 2004
====================================================================================
Due from KSE members - secured/ considered good 10,858,417 8,193,750
DUE FROM CUSTOMERS - CONSIDERED GOOD:
- secured 263,611,766 18,227,618
- unsecured 29,882,446 4,350,917
293,494,212 22,578,535
304,352,629 30,772,285
====================================================================================16.====================================================================================
(Rupees)
2005 2004
====================================================================================
Receivable Against Sale of Securities - net - 445,441,070
====================================================================================Due from Karachi Stock Exchange and its members in respect of sale of securities.17. MARGIN TRADING-CLIENTS ====================================================================================
(Rupees)
2005 2004
====================================================================================
1,0472,728,675 -
====================================================================================During the year, the company provided margin finance facilities to its clients under mark-up arrangements of Rs 1,190 million in aggregate (2004: Rs Nil) from various commercial banks having mark-up ranging from 9.67% to 10.71% (2004: Nil) per annum calculated on a daily product basis and payable quarterly.The arrangements are secured against pledge of marketable securities. 18. ADVANCES, DEPOSITS, PREPAYMENTS AND RECEIVABLES ====================================================================================
(Rupees)
2005 2004
====================================================================================
ADVANCES - CONSIDERED GOOD:
- Income tax 59,250,040 30,379,132
- Others 2,206,000 -
Prepayments 101,613 73,171
RECEIVABLES:
- Dividend 6,784,687 25,133,331
- Clearing deposit 20,553,618 6,312,431
- Accrued income 2,255,214 1,813,138
- Other receivable 3,213,226 1,088,875
94,364,398 64,800,078
====================================================================================19. CASH AND BANK BALANCES====================================================================================
(Rupees)
2005 2004
====================================================================================
Cash in hand 31,205 17,240
CASH AT BANK:
- Current account 26,564,040 418,131,677
- PLS account 2,214,507 136,064,874
28,778,547 554,196,551
28,809,752 554,213,791
====================================================================================20. OPERATING REVENUE====================================================================================
(Rupees)
2005 2004
====================================================================================
Brokerage 333,750,329 218,348,392
Underwriting commission, placement, consultancy 10,652,540 11,208,054
Dividend 373,932,338 203,190,861
Return on term finance certificates 2,745,383 1,320,109
Income on carry over transaction 70,143,996 -
Income on margin trading 1,837,809 -
793,062,395 434,067,416
====================================================================================21. OPERATING EXPENSES====================================================================================
(Rupees)
Notes 2005 2004
====================================================================================
Salaries and benefits 21.1 10,496,114 7,502,217
Printing and stationery 1,070,142 687,140
Communication 1,492,970 1,260,650
Rent rates and taxes 1,538,727 425,574
Power 362,982 441,389
Legal and professional charges 1,037,969 135,550
C.D.C & Clearing house charges 68,512,710 47,488,219
Entertainment 200,742 197,103
Travelling and conveyance 1,805,354 956,134
Depreciation 9 1,429,085 1,423,790
Repair and maintenance 738,916 373,919
Office renovation 290,070 369,748
Auditors' remuneration 21.2 250,000 245,000
Share transfer expenses 28,612 41,610
Insurance 116,308 112,869
Membership and other subscription 850,626 604,589
Advertisement, business promotion,
research and development 2,490,622 1,946,571
Meeting expenses 98,332 100,212
Commission 30,211,412 21,427,017
Consultancy and advisory - -
Donation 21.3 6,510,000 11,600,000
E.O.B.I Contribution 63,070 64,220
Others 321,356 566,581
129,966,119 97,970,102
====================================================================================21.1. This includes company's contribution to provident fund of Rs 536,819/- (2004: Rs 332,169/-).21.2. AUDITORS' REMUNERATION ====================================================================================
(Rupees)
2005 2004
====================================================================================
Audit fee 150,000 130,000
Certification including half yearly
review reporting 100,000 115,000
250,000 245,000
====================================================================================21.3. None of the directors or their spouses had any interest in donees' fund.However, the chief executive of the company is a trustee in one of the donee institution (Memon Medical Health Institution). 22. FINANCIAL CHARGES ====================================================================================
(Rupees)
2005 2004
====================================================================================
Mark-up on short term running finance 107,355,024 31,677,596
Mark-up on Margin Finance 1,207,381 -
Bank charges 1,094,901 618,117
109,657,306 32,295,713
====================================================================================23. OTHER INCOME====================================================================================
(Rupees)
2005 2004
====================================================================================
Profit on bank deposits 371,979 1,179,258
Foreign currency translation 87,717 -
Markup on loan to associated undertaking 6,517,001 4,749,376
6,976,697 5,928,634
====================================================================================24. REMUNERATION OF CHIEF EXECUTIVE, DIRECTORS AND EXECUTIVESThe Chief Executive of the company is not drawing any remuneration for holding the office. 24.1. This represents the entitlement of Directors' commission @ 10% on account of sale and purchase transaction and 7.5% on Carry over Transaction on behalf of Clients. 24.2. For the purpose of disclosure those employees are considered as executives whose basic salary exceeds five hundred thousand rupees in a financial year. =====================================================================================
Directors Executives
Note 2005 2004 2005 2004
=====================================================================================
Managerial remuneration 591,450 238,956 504,006 1,877,047
Sub brokerage, commission
and performance bonus 24.1 10,227,544 6,712,110 135,000 464,992
House rent allowance 266,148 107,532 226,800 844,639
Conveyance 7,200 3,600 3,600 38,700
Utilities 59,136 23,398 50,394 187,693
Contribution to provident fund 73,932 29,874 63,000 234,630
Medical allowance 29,580 11,952 25,200 93,845
11,254,990 7,127,922 1,008,000 3,741,546
Number of persons 4 3 1 11
=====================================================================================25. PROFIT FOR THE YEAR====================================================================================
2005 2004
====================================================================================
2,583,372,086 1,705,338,536
Weighted Average Number of Ordinary Shares 20,000,000 20,000,000
Earnings Per Share - basic and diluted 129.17 85.67
====================================================================================The earning per share for June 2004 and 2005 has been adjusted for the effect of bonus share of 150%.The earning per share reflected in the financial statements of June 30, 2004 (without considering the effect of bonus issue of 150%) was 213.17 per share based on 8 million share in issue as of June 30, 2004. 26. CASH AND CASH EQUIVALENTS ====================================================================================
(Rupees)
2005 2004
====================================================================================
Cash and bank balances 28,809,752 554,213,791
Marketable securities 5,002,211,259 1,993,370,205
Receivable against trading of securities net - 445,441,070
Margin Trading 695,775 -
Short term running finance (1,098,780,748) -
3,932,936,038 2,993,025,066
====================================================================================27. RELATED PARTY TRANSACTIONS====================================================================================
(Rupees)
2005 2004
====================================================================================
BROKERAGE EARNED FROM:
- Pakistan Income Fund (PIF) 4,006,000 2,758,287
- Pakistan Stock Market Fund (PSMF) 1,519,000 885,949
- Pakistan Premier Fund (PPF) 1,136,000 559,525
- Pakistan Capital Market 1,346,000 546,143
FUND LIMITED (PCMF):
- Pakistan Strategic Allocation Fund (PSAF) 3,850,000 -
Maximum balance due at 71,885,283 69,870,814
the end of any month
Total mark-up income on loan earned
from associated undertaking 6,517,001 4,749,376
====================================================================================27.1. PIF and PSMF are open end mutual funds managed by Arif Habib Investment Management Limited.27.2. PCMF, PPF and PSAF are close end mutual funds managed by Arif Habib Investment Management Limited. 28. FINANCIAL INSTRUMENTS AND RELATED DISCLOSURES Interest/Mark-up Rate Risk Exposure Interest/markup rate risk is the risk that the value of a financial instrument will fluctuate due to changes in the market interest/markup rates. Sensitivity to interest/markup rate risk arises from mismatches of financial assets and liabilities that mature or re-price in a given period. The company manages these mismatches through risk management strategies where significant changes in gap position can be adjusted. Information about the company's exposures to mark up rate risk based on contractual refinancing and maturity dates, whichever is earlier, is as follows: ================================================================================================================================
Interest/mark-up bearing Non
One month Over Interest/
to one year one year mark-up 2005 2004
bearing Total Total
Rupees
================================================================================================================================
FINANCIAL ASSETS:
Long term investment 436,120,080 436,120,080 17,000,000
Long term loan 68,600,000 784,449,345 853,049,345 68,000,000
Long term deposits 2,931,000 2,931,000 3,896,000
Marketable securities - net 5,002,211,259 5,002,211,259 1,993,370,205
Trade debts 304,352,628 304,352,628 30,772,285
Receivables against sale of securities - - 445,441,070
Fund placed against Margin Finance 1,072,728,675 - 1,072,728,675 -
Advances, deposits, prepayments and receivables 34,483,930 34,483,930 34,347,775
Cash and bank 2,214,507 26,626,560 38,841,067 554,213,791
1,074,943,182 68,600,000 6,591,174,802 7,734,717,984 3,147,126
The average interest/mark-up rates are 3% to 12% 9.5%
FINANCIAL LIABILITIES:
Margin Finance 1,072,032,900 1,072,032,900 -
Short term running finance 1,098,780,748 1,098,780,748 -
Creditors, accrued and other liabilities 112,868,206 112,868,206 53,155,203
Proposed dividend - - 120,000,000
2,283,681,854 - - 2,283,681,854 173,155,203
================================================================================================================================The interest/mark-up rats are 4.5% to 10.71% (2004: 4.50% to 6%).28.1. Concentration of Credit Risk and Credit Exposure of the Financial Instruments. The company believes it is not exposed to major concentration of credit risk as its debts securities are marketable and readily traded on the stock exchange. The company is mainly export to credit risk on margin trading, deposits in trade debtors. The seeks to minimise the credit risk exposure through having exposure only to customers considered credit worthy and are secured against pledge of securities and makes provision against those balances considered doubtful of recover. 28.2. FAIR VALUE OF FINANCIAL INSTRUMENTS The fair value of all the financial assets and financial liabilities, except for investments referred in note 4, is estimated to approximates their carrying values. 28.3. LIQUIDITY RISK Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities. Company treasury aims at maintaining flexibility in funding by keeping regular credit lines with the banks. 29. STAFF STRENGTH Total number of employees of the company as at June 30, 2005 was 39 (204: 29). 30. DATE OF AUTHORISATION FOR ISSUE These financial statements have been authorised for issue on July 29, 2005 by the Board of Directors of the company. 31. Figures have been rounded off to the nearest rupee. |