Csibl Y04

AUDITORS’ REPORT TO THE MEMBERS
We have audited the annexed balance sheet of CRESCENT STANDARD INVESTMENT BANK LIMITED
(Formerly First Standard Investment Bank Limited) as at December 31, 2004, and the profit and loss account,
cash flow statement and statement of changes in equity together with the notes forming part thereof, for the
year then ended and we state that we have obtained all the information and explanations which, to the best of
our knowledge and belief, were necessary for the purposes of our audit.
It is the responsibility of the company’s management to establish and maintain a system of internal control, and
prepare and present the above said statements in conformity with the approved accounting standards and the
requirements of the Companies Ordinance, 1984. Our responsibility is to express an opinion on these statements
based on our audit.
We conducted our audit in accordance with the auditing standards as applicable in Pakistan. These standards
require that we plan and perform the audit to obtain reasonable assurance about whether the above said
statements are free of any material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the above said statements. An audit also includes assessing the
accounting policies and significant estimates made by management, as well as evaluating the overall presentation
of the above said statements. We believe that our audit provides a reasonable basis for our opinion and, after
due verification, we report that:
(a) in our opinion, proper books of account have been kept by the company as required by the Companies
Ordinance, 1984;
(b) in our opinion:
(i) the balance sheet and profit and loss account together with the notes thereon have
been drawn up in conformity with the Companies Ordinance, 1984, and are in agreement
with the books of account and are further in accordance with accounting policies
consistently applied except for the changes as stated in notes 2.3, 2.6 & 2.9 with which
we concur;
(ii) the expenditure incurred during the year was for the purpose of the company’s business;
and
(iii) the business conducted, investments made and the expenditure incurred during the
year were in accordance with the objects of the company;
(c) in our opinion and to the best of our information and according to the explanations given to us, the
balance sheet, profit and loss account, cash flow statement and statement of changes in equity,
together with the notes forming part thereof conform with approved accounting standards as applicable
in Pakistan, and, give the information required by the Companies Ordinance, 1984, in the manner so
required and respectively give a true and fair view of the state of the company’s affairs as at December
31, 2004 and of the profit and its cash flows and changes in equity for the year then ended; and
(d) in our opinion, Zakat deductible at source under the Zakat and Ushr Ordinance, 1980 (XVIII of 1980)
was deducted by the company and deposited in the Central Zakat Fund established under section 7
of that Ordinance.
SYED HUSAIN & CO.

Lahore : March 16, 2005 Chartered Accountants
ANNUAL REPORT 2004 25

BALANCE SHEET
AS AT DECEMBER 31, 2004
Notes 2004 2003
(Rupees in ‘000’)
ASSETS
Cash and bank balances 3 106,663 235,298

Investments 4 1,434,773 949,712
Placements of funds 5 1,302,032 716,994
Musharika, morabaha and other finances 6 2,218,933 778,121
Net Investment in finance lease 7 2,511,861 2,834,436
Advances, deposits, prepayments,
deferred and other assets 8 596,087 653,668
Accrued income and other receivables 9 472,106 244,208
Tangible fixed assets 10 749,704 249,911
Intangible assets 11 15,000 1,000
9,407,159 6,663,348
LIABILITIES
Redeemable capital 12 637,657 786,458

Security deposits 13 566,695 588,408
Customers' deposits 14 3,870,096 1,862,914
Borrowings 15 1,781,910 2,021,562
Liabilities against assets subject to finance lease 16 2,962 7,255
Accrued and other liabilities 17 486,051 665,931
Unclaimed dividend 7,458 7,466
7,352,829 5,939,994
CONTINGENCIES AND COMMITMENTS 18 - -
NET ASSETS 2,054,330 723,354
REPRESENTED BY:
SHARE CAPITAL AND RESERVES
Authorized share capital

250,000,000 (2003: 250,000,000) ordinary
shares of Rupees 10 each 2,500,000 2,500,000
Issued, subscribed and paid up share capital 19 1,257,613 1,257,613

Reserves 307,379 (577,058)
1,564,992 680,555
Surplus on revaluation of fixed assets 22 422,609 -
Supplementary capital 23 66,729 42,799
2,054,330 723,354
The annexed notes form an integral part of these financial statements.
Chief Executive Officer Chairman
26 CRESCENT STANDARD INVESTMENT BANK LIMITED

PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED DECEMBER 31, 2004
Notes 2004 2003
INCOME
Lease revenue 306,738 342,318

Return on finances and placements made 477,876 177,220
Return on investments 24 298,394 239,737
Other income 25 45,084 57,687
1,128,092 816,962
EXPENDITURES
Financial charges 26 457,306 637,705

Administrative and operating expenses 27 178,844 159,906
Amortization of deferred cost 8 6,187 6,160
642,337 803,771
PROFIT BEFORE PROVISIONS AND ADJUSTMENTS

FOR REMEASUREMENT OF INVESTMENTS HELD
FOR TRADING 485,755 13,191
PROVISION FOR DOUBTFUL RECEIVABLES 28 (6,698) (109,586)
ADJUSTMENTS FOR REMEASUREMENT OF

INVESTMENTS HELD FOR TRADING 2.6 (7,591) -
PROFIT / (LOSS) BEFORE TAXATION 471,466 (96,395)

PROVISION FOR TAXATION 29 (11,000) (13,576)
PROFIT / (LOSS) AFTER TAXATION 460,466 (109,971)
EARNINGS / (LOSS) PER SHARE –

BASIC [2003: Restated] (Rupees) 30 3.66 (0.87)
Appropriations have been reflected in the statement of changes in equity.

CASH FLOW STATEMENT
Note 2004 2003
CASH FLOW FROM OPERATING ACTIVITIES

Profit/(Loss) before taxation 471,466 (96,395)
Adjustments for non cash and other items:
Gain on disposal of fixed assets (343) (18,587)
Depreciation 36,825 20,099
Provision for doubtful receivables 6,698 109,586
Adjustment for remeasurement of investments held for trading 7,591 -
Amortization of deferred cost 6,187 6,160
56,958 117,258
Cash generated from operating activities before
working capital changes 528,424 20,863
Adjustments for working capital changes:
(Increase) / decrease in operating assets:
Musharika, morabaha and other finances (1,446,642) 456,217
Advances, deposits, prepayments, accrued income
and other receivables 23,146 (303,607)
Increase / (decrease) in operating liabilities:
Customers' deposits 2,007,182 859,264
Borrowings (239,652) 211,894
Accrued and other liabilities (184,173) 351,445
159,861 1,575,213
688,285 1,596,076
Income tax paid (15,525) (20,039)
Net cash generated from operating activities 672,760 1,576,037
CASH FLOW FROM INVESTING ACTIVITIES

Investments-net (280,866) (163,402)
Net investment in finance lease 321,707 22,421
Purchase of fixed assets - Net (110,606) (133,563)
Net cash used in investing activities (69,765) (274,544)
CASH FLOW FROM FINANCING ACTIVITIES

Supplementary capital 23,930 42,799
Redeemable capital (148,801) (1,085,000)
Security deposits (21,713) 117,784
Dividend paid (8) (759)
Net cash used in financing activities (146,592) (925,176)
NET INCREASE IN CASH AND CASH EQUIVALENTS 456,403 376,317

CASH AND CASH EQUIVALENTS AT BEGINNING
OF THE YEAR 952,292 575,975
CASH AND CASH EQUIVALENTS AT THE END
OF THE YEAR 32 1,408,695 952,292

STATEMENT OF CHANGES IN EQUITY
Reserves
Capital Reserves Revenue Reserves
Issued, Share Statutory Reserve for Reserve for Reserve for Surplus on Gain on Accumulated Total Shareholders’
Subscribed Premium Reserve Contingencies Deferred Lease Revaluation Remeasure- Profit/ Reserves Equity
and paid-up (Note 20) (Note 21) Tax Losses of Intangible ment of (Loss)
Share Capital Assets Investments
(Note 11) Available for
Sale
( R u p e e s i n '000' )
Balance as on January 01, 2003 - Restated 1,160,648 6,275 155,600 - 39,225 - - - (638,189) (437,089) 723,559
Loss for the year - - - - - - - - (109,971) (109,971) (109,971)
Transferred to/(from) reserves:
Statutory reserve - - 4,286 - - - - - (4,286) - -
Reserve for lease losses - - - - - 18,169 - - (18,169) - -
Reserve for deferred tax - - - - (4,856) - - - 4,856 - -
Deferred tax liability - - - - (34,369) - - - - (34,369) (34,369)
Issuance of shares as a consequence of merger 96,965 (6,275) (90,116) - - (18,169) - - 17,595 (96,965) -
Adjustments for remeasurement of investments
Held for trading investments (Note 4.3) - - - - - - - - (1,933) (1,933) (1,933)
Available for sale investments - - - - - - - 103,269 - 103,269 103,269
Balance as on December 31, 2003 1,257,613 - 69,770 - - - - 103,269 (750,097) (577,058) 680,555
Profit for the year - - - - - - - - 460,466 460,466 460,466
Transfer to reserve for contingencies - - - 35,000 - - - - (35,000) - -
Surplus on revaluation of intangible asset - - - - - - 14,000 - - 14,000 14,000
Gain on remeasurement of investments available for sale - - - - - - - 211,786 - 211,786 211,786
Adjustment of incremental depreciation on revalued assets - - - - - - - - 3,059 3,059 3,059
Adjustment of deferred tax asset (Note 8.1) - - - - - - - - 195,126 195,126 195,126
Transfer to statutory reserve - - 93,000 - - - - - (93,000) - -
Balance as on December 31, 2004 1,257,613 - 162,770 35,000 - - 14,000 315,055 (219,446) 307,379 1,564,992
ANNUAL REPORT 2004

29
NOTES TO THE ACCOUNTS
1. STATUS AND NATURE OF BUSINESS
1.1 Crescent Standard Investment Bank Limited (formerly First Standard Investment Bank Limited) is
a public limited company incorporated in Pakistan in May, 1990 under the Companies Ordinance,
1984. The company is engaged in investment finance activities, in accordance with the licence granted
by the Securities and Exchange Commission of Pakistan and additionally in various other modes of
funding and business, including leasing consequent to the mergers of former Pacific Leasing Company
Limited, Paramount Leasing Limited and First Leasing Corporation Limited with and into the Company.
Securities and Exchange Commission of Pakistan supervises and regulates the Company, under the
Non-Banking Finance Companies (Establishment and Regulation) Rules, 2003. The Company's
registered office is in Lahore and it operates four branches, one each in Karachi, Lahore, Islamabad
and Peshawar. Its shares are quoted on all the stock exchanges of Pakistan.
1.2 The Merger
Effective July 1, 2003, Pacific Leasing Company Limited, Paramount Leasing Limited and First Leasing
Corporation Limited have been merged with and into Crescent Standard Investment Bank Limited in
accordance with the scheme of arrangement sanctioned, on May 26, 2004, by Securities and Exchange
Commission of Pakistan in terms of Section 282L of the Companies Ordinance, 1984. These accounts
reflect the combined results of the merging entities on a uniting of interest basis in accordance with the
International Accounting Standard No. 22, “Business Combinations”, by eliminating all inter-company
transactions. The assets and liabilities of the merging entities are adjusted to conform with the uniformity
of the accounting policies of the combining enterprises and applying to all periods presented.
The merger has been accounted for by recording following assets and liabilities of the merging
entities on effective dates, as per schemes of arrangement:
Assets Liabilities
Rupees in ‘000’
Pacific Leasing Company Limited 858,518 611,441

Paramount Leasing Limited 2,499,420 2,166,956
First Leasing Corporation Limited 448,861 448,763
3,806,799 3,227,160
The company issued its ordinary shares to the shareholders of the merging entities as under:
Shares Issued Swap

(Number) Ratio
Pacific Leasing Company Limited 19,819,800 0.555

Paramount Leasing Limited 26,802,875 0.513
First Leasing Corporation Limited 5,366,231 3.268
51,988,906
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
2.1 Basis of preparation
These financial statements have been prepared in accordance with approved accounting standards as
applicable in Pakistan and the requirements of the Companies Ordinance, 1984, including applicable directives,
notifications and regulations of the Securities and Exchange Commission of Pakistan. Where requirements
of the Companies Ordinance, 1984, directives, notifications and regulations differ with the requirements of
International Accounting Standards, the requirements of the Companies Ordinance, 1984 and directives,
notifications and regulations of the Securities and Exchange Commission of Pakistan take precedence.
2.2 Basis of measurement
These financial statements have been prepared under the historical cost convention as modified
by revaluation of fixed assets (Note 2.3), remeasurement of intangible assets (Note 2.4),
remeasurement of investments (Note 2.6) and exchange differences (Note 2.16).

2.3 Tangible fixed assets and depreciation
Assets in own use
These are stated at cost / revalued amounts less accumulated depreciation except capital work-in-
progress and freehold land. Capital work-in-progress is stated at cost and freehold land is stated at
revalued amount. The revaluation of freehold land and buildings/office premises was carried out
by an independent valuer on October 31, 2004, on the basis of prevailing market values. In previous
years, buildings/office premises were stated at cost less accumulated depreciation and freehold
land was stated at cost. This change has been made to reflect these assets at fair values for
appropriate presentation in accordance with the requirements of International Accounting Standards.
Had these assets not been revalued, the value of fixed assets would have been lower by Rupees
422.609 million (Note 22) and profit for the year would have been higher by Rupees 3.059 million.
Depreciation on operating fixed assets is charged to income on straight line method over the
expected useful lives as given in Note 10.1. Full year's depreciation is charged on additions while
no depreciation is charged on assets disposed of during the year. In respect of revalued depreciable
assets, incremental depreciation for the year is transferred from “Surplus on Revaluation of Fixed
Assets Account” to “Un-appropriated Profit” through “Statement of Changes in Equity” to record
realization of surplus to the extent of incremental depreciation charged.
Minor renewals, replacements, maintenance, repairs and gains or losses on disposal of fixed assets
are taken into income currently. Major renewals and improvements are capitalized.
Leased assets in own use
These are stated at lower of present value of minimum lease payments under the lease agreements
and the fair value of assets acquired on lease. Aggregate amount of obligations relating to assets
subject to finance lease is accounted for at net present value of liabilities. Assets so acquired are
depreciated on the basis and rates similar to that of owned assets. Depreciation of leased assets
is charged to income.
Assets leased out
Assets leased out under operating lease arrangements are included in tangible fixed assets and
stated at cost less accumulated depreciation and impairment, if any. Depreciation is charged to
income over the expected useful lives of the assets as given in Note 10.3.
The major portfolio of operating leases have been disclosed as finance lease as a result of
conforming to the accounting policies of the combining enterprises and applying to all periods
presented. This change in accounting policy has no significant impact on the profit for the year.
2.4 Intangible assets
Intangible assets are initially recognized at cost, being the fair value of the consideration given
including charges associated with the acquisition of assets. Subsequent to the initial recognition,
intangible assets are carried at the revalued amounts for fair presentation in accordance with the
International Accounting Standards.
2.5 Net investment in finance lease
Leases where the company transfers substantially all the risks and rewards incidental to ownership
of an asset to the lessees are classified as finance leases. Receivable against finance lease is
recognised at an amount equal to present value of the minimum lease payments including any
guaranteed residual value.

2.6 Investments
The company determines appropriate classification of its investments at the time of purchases as:
Held for trading: These are held for short period of time mainly to make gains / profits from short
term price fluctuations or dealer's margins.
Held to maturity: These investments are for a fixed period of time where the management has
firm intention and ability to hold till maturity.
Available for sale: Investments which do not fall under the category of 'held for trading' or 'held to
maturity' and may be sold in response to the need for liquidity or changes in
yield rates and equity instruments of other enterprises.
Investments in securities are initially recognized at cost, being the fair value of the consideration
given including charges associated with the purchase of investments. Subsequent to the initial
recognition, investments in quoted securities are determined with reference to rates quoted at
stock exchange at close of business on the reporting date. The difference, if any, between the
carrying value and the revalued amounts on investment held for trading is taken into income and in
case of investments available for sale, is recognized directly into equity through statement of changes
in equity. Investments in held to maturity securities are measured at amortized cost using the
effective interest rate method. Gain or loss is recognized in net profit or loss when these investments
are derecognized. Permanent impairment in value of investments available for sale and held to
maturity is taken to income. In previous year, surplus / (deficit) on revaluation of investments was
stated below shareholders’ equity in accordance with State Bank of Pakistan's BSD Circular No.
20 dated August 4, 2000. The change has been made to comply with the requirements of the
revised Fourth Schedule to the Companies Ordinance 1984 effective from July 1, 2004 as notified
under S.R.O. 589 (1) 2004 dated July 5, 2004. Had there been no change in policy, the income for
the year would have been increased by Rupees 7.591 million (2003: Rupees 1.933 million) and
shareholders’ equity would have been reduced by Rupees 305.531 million as at December 31,
2004 (December 31, 2003: Rupees 101.336 million) including the effect relating to previous periods.
Investments in unquoted securities are stated at cost. Any permanent impairment in value of
investments is charged to income.
2.7 Sale and repurchase agreements (repo / reverse repo)

Assets sold with a simultaneous commitment to re-purchase (repo) at a specified future date are
retained in the financial statements and the counterpart liability for amounts received under these
arrangements is included in borrowings. The difference between sale and re-purchase price is
amortized as expense over the life of the respective repo agreement.
Assets purchased with a corresponding commitment to resell at a specified future date (reverse
repo) are not recognized in the financial statements. Amounts paid under these arrangements are
recorded as funds placements. The difference between purchase and resale price is accounted for
as income over the life of reverse repo arrangement.
2.8 Business acquisition
These are initially stated at cost and are re-measured on the balance sheet date by applying equity
method. Post acquisition gain/loss is charged to income.
2.9 Deferred costs

These are amortized over a period not exceeding five years from the year of incurrence. During the
year, the company has changed its accounting policy in respect of recognition of deferred costs to
comply with Circular No.1 of 2005 dated January 19, 2005 issued by the Securities and Exchange
Commission of Pakistan. As per new policy, no cost shall be recorded as “deferred cost” after July
05, 2004. This change in accounting policy did not have any impact on the profit and loss account
for the current year.

2.10 Stock in trade
This is valued at lower of average cost and net realizable value. Net realizable value signifies the
prevailing market price in the ordinary course of business less estimated selling expenses.
2.11 Cash and cash equivalents
Cash and cash equivalents comprise of cash and bank balances and short term placements of funds.
2.12 Fiduciary assets
Assets held in trust or in fiduciary capacity are not recognized as assets of the company and
accordingly are not included in these financial statements.
2.13 Provision for taxation
Current taxation
Provision for current taxation is based on taxable income at current rates of taxation after taking into
account tax credits and rebates available, if any, and any adjustments in respect of prior years.
Deferred taxation
Deferred income tax is provided, using the liability method, on all temporary differences at the
balance sheet date between the tax basis of assets and liabilities and their carrying values for the
financial reporting purposes.
Deferred tax liabilities are recognized for all taxable temporary differences. Deferred tax assets
are recognized for all deductible temporary differences, un-absorbed tax losses to the extent that
it is probable that taxable profit will be available against which the deductible temporary differences
and un-absorbed tax losses can be utilized.
The carrying amount of deferred tax asset is reviewed at each balance sheet date and reduced to
the extent that it is no longer probable that sufficient taxable profit will be available to allow all or
part of the deferred tax asset to be utilized.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the
period when the asset is realized or the liability is settled.
2.14 Employees benefits
Defined contribution plan

The company operates a recognized provident fund scheme for all permanent employees. The
company and its employees make equal monthly contributions at the rate of 10% of basic salary.
2.15 Revenue recognition

Profit/mark-up/return on finances provided and placements with banks and financial institutions,
etc, is recognized on time proportion basis. Return on term finance certificates (TFCs) is recognized
on time proportion basis. Fees and commissions are recognized as income when earned.
In case of finance leases, the unearned finance income is amortized to income over the lease term
by applying the annuity method to produce a constant rate of return on net investment in the lease.
Operating lease rentals are recognized as income on accrual basis over the lease period.
Dividend from equity securities is recognized when the right to receive payment is established.
Gain/loss on sale of investments is recognized as income currently. Revenue from sale of goods
is recognized on delivery of goods to customers.
When recovery is considered doubtful or expectations of ultimate collection are uncertain, the
income is recognized on actual receipt basis.

2.16 Foreign currency translation
Transactions in foreign currencies are accounted for in Pak Rupees at the rates of exchange ruling
at the date of transaction. Monetary assets and liabilities in foreign currencies are translated into
Pak Rupees at the rate of exchange ruling at the balance sheet date. Exchange gains/losses on
translations are taken into income currently.
2.17 Provision for doubtful assets
Classified assets are stated at net of provisions, made in accordance with the Prudential Regulations
for NBFCs. The provision made/reversed during the year is taken to the profit and loss account.
Assets are written off when there are no realistic prospects of their realizability. Once a financial
asset has been classified, income is not recognized in accordance with Prudential Regulations for
NBFCs until actually realized.
2.18 Financial instruments
All the financial assets and liabilities are recognized at the time when the company becomes a
party to the contractual provisions of the instruments. Any gain/loss on de-recognition of the financial
assets or liabilities is included in the profit/loss for the period to which it relates.
2.19 Offsetting of financial assets and liabilities
Financial assets and financial liabilities are offset and the net amount is reported in the balance
sheet, when there is a legally enforceable right to set off the recognized amounts and the company
intends to either settle on net basis or to realize the asset and settle the liability simultaneously.
Corresponding income on assets and charge on liability is also offset.
2.20 Related party transactions
Transactions between the company and a related party are measured at arm's length rates,
determined in accordance with the 'Comparable Uncontrolled Price Method'.
Notes 2004 2003

3. CASH AND BANK BALANCES
Bank balances:
Current accounts:
With State Bank of Pakistan 6,474 17,990
Others 52,580 43,456
59,054 61,446
Saving / PLS accounts 47,575 173,647
106,629 235,093
Cash in hand 34 205
106,663 235,298
4. INVESTMENTS
Available for Sale
Shares and certificates - quoted 4.1 698,237 167,885
Shares - unquoted 4.2 57,970 33,220
756,207 201,105
Held for Trading
Shares and certificates - quoted 4.3 467,541 474,859
Term finance certificates – quoted 4.4 22,094 72,477
489,635 547,336
Held to Maturity
Term finance certificates - unquoted 4.5 188,931 201,271
1,434,773 949,712

4.1 Shares and certificates - Quoted
2004 2003
Sector and Name of Company No. of Cost Market / No. of Cost Market/
shares/ Fair shares/ Fair
certificates Value certificates Value
( Rupees in ‘000) ( Rupees in ‘000)
ASSOCIATED UNDERTAKINGS
Investment Companies and Banks
Pakistan Industrial Credit and
Investment Corporation Limited 1,525,979 52,568 135,965 1,154,419 9,984 66,148
[Equity held 0.73% (2003: 1%)]
Commercial Bank
PICIC Commercial Bank Limited 18,500 654 788 - - -
[Equity held 0.10% (2003: Nil)]
Mutual Funds
Safeway Mutual Fund Limited 6,343,060 73,638 152,550 3,244,670 26,606 26,282
[Equity held 13.98% (2003: 19.67%)]
Asian Stocks Fund Limited 20,753,500 204,302 257,343 - - -
Modaraba
Crescent Standard Modaraba (Formerly
Financial Link Modaraba) 728,500 2,360 3,825 728,500 2,360 2,332
[Equity held 3.64% (2003: 5.20%)]
Leasing Company
Crescent Leasing Corporation Limited 6,169,759 49,660 147,766 4,062,393 25,666 73,123
[Equity held 15.29% (2003: 15.29%)]
383,182 698,237 64,616 167,885
Gain on remeasurement of investments 315,055 - 103,269 -
698,237 698,237 167,885 167,885
4.2 Shares - Un-quoted

2004 2003
No. of Cost No. of Cost
Sector and Name of Company Share/ Share/ Rupees in
Units Rupees in ‘000’ Units ‘000’
Crescent Standard Brokerage and Investment
Services Limited (Formerly Crescent
Brokerage and Investment Services Limited) 2,000,000 20,000 2,000,000 20,000
[Equity held 34.78% (2003: 34.78%)]
International Housing Finance Limited (Note 4.2.1) 500,000 6,250 - -
OTHERS
Fuel and Energy
Crescent Powertech Limited 500,000 5,000 500,000 5,000
Jamshoro Joint Venture Limited 1,200,000 12,000 - -
Investment Advisory Company
First Capital Investment (Private) Limited 250,000 2,500 250,000 2,500
Textile Composite
Crescent Bahuman Limited 300,000 3,000 300,000 3,000
Mutual Fund
Crossby Dragon Fund 76,518 7,500 75,000 7,500
Technology & Communication
Crescent Standard Telecommunications Limited 150,000 1,500 - -
Transport
Sialkot International Airport Limited 5,000 5,000 - -
62,750 38,000
Provision for permanent impairment in value of investments (4,780) (4,780)
57,970 33,220
4.2.1 Subsequently, the company has been provisionally listed on Karachi Stock Exchange. ANNUAL REPORT 2004 35
4.3 Shares & Certificates - Quoted
2004 2003
No. of No. of
Sector and Name of company shares/ Cost Market / shares/ Cost Market /
Certificates Fair Value Certificates Fair Value
Mutual Funds
PICIC Investment Fund 320,341 4,849 4,901 - - -
First Capital Mutual Fund Limited 30,000 210 158 - - -
Pakistan Premier Fund Limited 28,125 308 385 22,500 200 308
Pakistan Strategic Allocation Fund Limited 150,000 1,500 1,470 - - -
PICIC Growth Fund Limited 130,000 3,472 4,783 460,000 17,085 22,034
Pakistan Capital Market Fund Limited 100,000 1,019 1,020 - - -
Faysal Balanced Growth Fund Limited 1,000,000 10,000 10,000 - - -
Abamco Composite Fund Limited 2,389,697 23,458 20,312 - - -
First National Equities Limited 4,035,500 42,556 45,198 - - -
BSJS Balanced Fund Limited 510,800 6,806 5,185 300 3 4
Meezan Balanced Fund 750,000 7,500 7,500 - - -
Atlas Fund of Funds 1,500,000 15,000 15,000 - - -
Modarabas
Ist National Bank Modaraba 332,500 3,769 2,710 - - -
First Al-Noor Modaraba - - - 60,400 244 272
First Allied Bank Modaraba 15,000 114 94 - - -
Modaraba Al-Tijarah 167,000 977 618 - - -
First Equity Modaraba - - - 8,000 49 131
First Fidelity Leasing Modaraba 629,273 1,479 1,333 590,000 1,033 1,298
Leasing Companies
Network Leasing Limited 62,000 442 422 - - -
Javed Umer Vohra and Company Limited 500 305 195 - - -
Atlas Investment Bank Limited 50 1 1 10,500 708 214
Commercial Banks
The Bank of Punjab 15 1 1 20,015 673 700
Faysal Bank Limited - - - 50,000 1,596 1,800
Askari Commercial Bank Limited - - - 13 - 1
Muslim Commercial Bank Limited - - - 403,250 17,881 20,727
National Bank of Pakistan 28,500 1,207 2,290 222,500 9,338 12,060
Prime Commercial Bank Limited 20,540 291 401 114,000 1,748 1,778
Meezan Bank Limited - - - 20,000 323 310
Crescent Commercial Bank Limited 1,213,489 12,734 14,683 1,164,500 12,148 14,847
Insurance
New Jubilee Life Insurance Company Limited 770,900 26,336 19,118 - - -
Pakistan Reinsurance Company Limited 167,800 10,102 10,068 173,000 12,114 9,688
The Premier Insurance Company of Pakistan Limited 77,000 1,591 2,041 59,000 892 1,003
Askari General Insurance Company Limited 125 3 3 - - -
Adamjee Insurance Company Limited 80,649 4,098 5,291 - - -
Textile
Crown Textile Mills Limited 445,155 111 - 445,155 111 -
Nazir Cotton Mills Limited 1,300 114 66 317,000 3,042 1,553
Taj Textile Mills Limited 239,000 1,520 1,243 - - -
Azgard Nine Limited 155,108 3,684 4,839 13,608 34 225
Nishat Mills Limited 50,000 2,056 3,870 200,000 8,224 6,450
Crescent Textile Mills Limited 17,500 412 884 17,500 412 411
Punjab Cotton Mills Limited 12,499 50 62 14,200 817 856
Maqbool Textile Mills Limited 72,000 756 1,552 72,000 756 1,008
Sally Textile Mills Limited 10,000 39 55 10,500 41 32
Service Industries (Textile) Limited 50,000 180 325 50,000 180 200
Shaheen Cotton Mills Limited 48,500 641 437 545,000 7,220 4,088
Mohib Textile Mills Limited 39,500 79 - 39,500 79 -
Yousuf Weaving Mills Limited - - - 172,000 525 542
Mehmood Textile Mills Limited 3,199 166 259 3,199 166 205
Zahur Textile Mills Limited 237,100 237 237 237,100 237 237
Sugar
Shakarganj Mills Limited - - - 124,000 1,352 3,689
Sakrand Sugar Mills Limited 198,000 1,244 941 198,000 1,244 446
Sind Abadgars Sugar Mills Limited 600 5 6 600 5 5

2004 2003
No. of No. of
Sector and Name of company shares/ Cost Market / shares/ Cost Market /
certificates Fair Value certificates Fair Value
Cement
Dandot Cement Company Limited 29,000 274 277 - - -
Cherat Cement Company Limited 40,000 980 980 40,000 980 2,042
Fauji Cement Limited 1,059,100 14,556 16,893 425,000 5,093 4,675
D.G. Khan Cement Company Limited - - - 730,000 32,992 33,361
Lucky Cement Limited - - - 50,000 951 1,233
Saadi Cement Limited 309,500 3,654 4,024 - - -
Pioneer Cement Limited 320,000 5,869 5,904 - - -
Zeal Pak Cement Limited 695,000 6,994 7,157 - - -
Gharibwal Cement Limited 366,000 5,136 5,344 - - -
Dadabhoy Cement limited 1,850 17 20 350 2 3
Fecto Cement Limited 100 1 2 100 1 1
Fuel and Energy
Attock Refinery Limited - - - 231,600 15,271 15,425
Bosicor Pakistan Limited 240,000 3,511 4,630 25,000 651 599
Japan Power Generation Limited 79,000 460 561 2,382,000 12,030 11,672
Kohinoor Power Company Limited 122,000 1,629 1,708 - - -
Karachi Electric Supply Corporation Limited 809,000 6,451 6,027 739,000 4,700 4,988
Southern Electric Power Company Limited 26,000 371 337 1,461,500 23,406 24,261
Hub Power Company Limited 1,555,500 49,695 49,937 115,000 4,463 4,422
Pakistan State Oil Company Limited 211,500 56,974 60,648 142,400 32,996 41,090
Sui Northern Gas Pipeline Limited 50,250 2,081 2,970 848,750 32,027 34,969
Sui Southern Gas Company Limited 406,100 9,949 10,518 280,600 6,287 8,017
Oil and Gas Development Company Limited 60 2 4 600,000 32,888 32,238
Pakistan Oilfields Limited - - - 141,000 33,198 33,248
Altern Energy Limited 3,800,000 38,108 23,940 4,711,500 47,248 28,269
Engineering
Sazgar Engineering Works Limited 600,000 16,200 13,350 904,000 24,408 11,888
Automobile Assembler
Millat Tractors Limited 300 17 73 200 17 48
Pak Suzuki Motors Company Limited - - - 150,000 20,648 21,758
General Tyre and Rubber Company Limited - - - 54,500 2,519 2,278
Transport and Communication
Pakistan International Airlines Corporation Limited - A 77,500 1,031 1,062 347,000 5,137 7,131
Pakistan International Container Limited 318,000 7,035 7,314 8,000 152 161
Pakistan Telecommunication Company Limited 25,000 948 1,105 145,000 5,493 5,314
TRG Pakistan Limited 959,500 12,653 12,330 311,000 4,614 4,883
Callmate Tellips Limited 256,000 3,749 4,557 - - -
Telecard Limited 87,500 1,184 1,100 45,500 1,126 1,087
Worldcall Communications Limited 500 7 6 80,000 1,359 1,140
Southern Networks Limited 354,000 3,059 2,744 - - -
Fertilizers
Engro Chemical Pakistan Limited 57,500 5,234 7,435 110,200 8,936 10,227
Fauji Fertlizer Bin Qasim Limited 240,267 9,178 7,352 500,000 8,846 8,880
Chemical and Pharmaceuticals
Searle Pakistan Limited 20 - 1 20 - 1
ICI Pakistan Limited - - - 50,000 3,626 4,250
Glaxo Smithkline Pakistan Limited - - - 1,200 140 229
Pakistan PTA Limited 1,075,000 14,231 12,900 25,000 301 334
Nimir Industrial Chemicals Limited 109,500 638 673 - - -
Biafo Industries Limited 500 6 8 500 5 5
Packaging
Packages Limited - - - 1,770 138 297
Glass and Ceramics
Balochistan Glass Company Limited 176,500 2,182 2,030 - - -
Emco Industries Limited 19,000 255 367 - - -
Synthetics
Dewan Salman Fibre Limited 69,500 1,324 1,296 - - -
Miscellaneous
National Investment Trust Limited - - - 258,865 3,663 7,313
477,065 467,541 476,792 474,859
Loss on remeasurement of investments (9,524) - (1,933) -
467,541 467,541 474,859 474,859

4.4 Term Finance Certificates - Quoted
2004 2003
Sector and Name of Company No of Cost No of Cost

Certificates (Rupees Certificates (Rupees
in ’ 000 ) in ‘000)
Leasing/Investment Banks
Al-zamin Leasing Limited - - 1,000 2,500

Atlas Investment Bank Limited - - 500 5,000
Trust Leasing Corporation Limited - - 379 1,886
Network Leasing Corporation Limited 1,168 2,916 1,168 6,241
Commercial Banks
Union Bank Limited - - 1,400 7,000

NDLC-IFIC Bank Limited - - 2,000 3,697
Crescent Commercial Bank Limited - - 1,275 3,247
Chemicals
Ittehad Chemicals Limited - - 180 902

Sitara Chemical Limited - - 90 450
Pakistan PTA Limited - - 20 100
Sugar
Shakarganj Mills Limited 22 49 1,922 8,001

Shahmurad Sugar Mills Limited 150 450 1,238 5,355
Chaudhary Sugar Mills Limited 1,000 4,706 1,000 5,000
Sindh Abadgar Sugar Mills Limited 2,000 9,474 - -
Al-Noor Sugar Mills Limited 2,000 2,499 2,000 5,398
Engineering
Crescent Steel and Allied Products Limited 400 2,000 - -
Fuel and Energy
First Oil and Gas Securities Limited - - 3,540 17,700
22,094 72,477
4.4.1 Terms and conditions of Term Finance Certificates

Face Value Profit Rate
Tenure Commence- Maturity
Name of Company Term
(Years) ment Date Date
Rupees % p.a.
Network Leasing Corporation Limited 5,000 Bi-Annual 5 Oct 2000 Oct 2005 16.25
Shakarganj Mills Limited 5,000 Bi-Annual 4 10.04.2001 10.04.2005 12.25
Shahmurad Sugar Mills Limited 5,000 Bi-Annual 4 21.05.2001 21.05.2005 15.50
Chaudhary Sugar Mills Limited 5,000 Quarterly 5 30.12.2003 30.12.2008 9.50
Sindh Abadgar Sugar Mills Limited 5,000 Quarterly 4 Nov 2003 Nov 2007 9.00
Al-Noor Sugar Mills Limited 5,000 Bi-Annual 5 Nov 2000 Nov 2005 16.50
Crescent Steel and Allied Products Limited 5,000 Bi-Annual 5 27.09.2004 27.09.2009 9.00

4.5 Term Finance Certificates - Unquoted
Name of company 2004 2003

Series A Series B Total Series A Series B Total
(Rupees in ‘000)
Pakland Cement Limited 129,212 73,396 202,608 138,274 73,395 211,669

Saadi Cement Limited 37,848 5,766 43,614 40,502 5,766 46,268
167,060 79,162 246,222 178,776 79,161 257,937
Less: Provision (61,666) (61,666)
184,556 196,271
Orient Petroleum Incorporation 4,375 5,000
188,931 201,271
The above TFCs have been issued against the amount due from Pakland Cement Limited (PCL) and
Saadi Cement Limited (SCL). As per scheme of arrangement arrived at by the creditors with PCL and
SCL, and approved by the Honourable High Court, Sindh, Karachi, the outstanding exposure has been
converted into TFCs. These are secured by a pari passu charge / mortgage over the assets and securities
of PCL and SCL created in favour of the Trustees appointed on behalf of the TFC holders / creditors. The
management of the above companies have been changed and now assumed by Dewan Mushtaq Group.
The new management has requested restructuring of the terms of the TFCs and waiver of certain liabilities.
As per the revised terms, in respect of the TFCs Series 'A' will be repaid in seven years in semi annual
installments commencing from July 15, 2004 to July 15, 2011. The mark-up / return will be paid at six
months ASK KIBOR plus 2.5 percent per annum. The rescheduled amount of TFCs Series 'B' will be
paid over a period of two years commencing from January 15, 2012 in four semi-annual installments.
The revised TFCs of the Series 'B' will not earn any profit. The company has accorded approval for the
revised terms of the scheme. Necessary provision regarding these TFCs has already been made in
previous years which includes general provision to the extent of Rupees 6.253 million (2003: Rupees
6.253 million).
4.6 Face value of all ordinary shares/certificates of investee entities is Rupees 10 each, unless stated
otherwise.
4.7 Investments valuing Rupees 318.697 million (2003: 394.372 million) are pledged against borrowings.
2004 2003
5. PLACEMENTS OF FUNDS
Considered good
Funds placed with financial institutions - Unsecured 105,503 209,471
Funds placed with others - Unsecured 17,625 -
Securities purchased under resale agreements - Secured 1,178,904 507,523
1,302,032 716,994
These represent funds placed and securities purchased under resale agreements at the weighted average
mark-up rate 13.80% (2003: 9.21%) per annum. It includes Rupees 82.483 million (2003: Rupees 32.05
million) placed with associated undertakings.

Notes 2004 2003
6. MUSHARIKA, MORABAHA AND OTHER FINANCES
Morabaha finance 6.1 1,043,532 655,614
Less: Provision against doubtful morabaha (139,073) (136,559)
904,459 519,055
Musharika receivables 6.2 1,210,443 160,536
Less: Provision for doubtful receivables (4,625) (4,625)
1,205,818 155,911
Other finances 6.3 108,656 103,155
2,218,933 778,121
6.1 The Company has sold goods under morabaha arrangements whereby payment is deferred along with
specified profit margin. These are secured by hypothecation charge on assets of customers, mortgage
of properties, lien over deposits, bank/personal guarantees, demand promissory notes and pledge of
shares of listed companies and stocks.
6.2 These represent the amounts invested in NBFCs and other institutions under musharika arrangements
on profit and loss sharing basis. These are partly secured against musharika deposits, charge on assets,
demand promissory notes and personal guarantees. Expected weighted average rate of profit is
12.54% (2003: 14.32%) per annum.
6.3 These represent the various finance facilities provided to customers for a period of medium to long term
arrangements. These are secured against charge on assets, demand promissory notes and personal
guarantees. Expected weighted average rate of profit is 10.49% (2003: 7.15%) per annum. It includes
Rupees 19.724 million (2003: Nil) due from an associated undertaking.
2004 2003
7. NET INVESTMENT IN FINANCE LEASE
Minimum lease rentals receivable 2,472,351 2,971,300
Add: Residual value 574,109 572,915
Gross investment in finance lease 3,046,460 3,544,215
Less: Unearned finance income (300,150) (476,199)
Net investment in finance lease 2,746,310 3,068,016

Provision for potential lease losses (234,449) (233,580)
2,511,861 2,834,436
7.1 Gross investment in lease and present values of minimum lease payments due are as follows:
2004 2003
Gross Present Value of Gross Present Value of

Investment in Minimum Lease Investment in Minimum Lease
Finance Lease Payments Finance Lease Payments
(Rupee in ‘000’)
Due not later than one year 1,313,748 1,104,372 1,628,582 1,326,667
Due later than one year but not later
than five years 1,732,713 1,641,938 1,915,633 1,741,349
Due later than five years - - - -
3,046,461 2,746,310 3,544,215 3,068,016

7.2 The company has entered into various lease agreements with weighted average rate of return at
14.44% (2003: 15.33%) per annum. Generally leased assets are held as securities. In certain
cases, the company has also obtained additional securities.
Note 2004 2003

8. ADVANCES, DEPOSITS, PREPAYMENTS,
DEFERRED AND OTHER ASSETS
Advances - Considered good

To staff 7,258 3,397
Income tax - net of provision 84,776 89,101
92,034 92,498
Prepayments 70,823 38,235
Sale tax receivable 5,767 5,238
Due from lessees - Considered good 12,650 21,778
Less: Provision for doubtful receivable (4,683) (4,683)
7,967 17,095
Assets repossessed 67,995 76,814
Less: Provision for impairment of repossessed assets (42,849) (42,849)
25,146 33,965
Due from brokers and clients - Considered good 124,556 390,872
Security deposits 15,768 11,632
Deferred cost:
Opening balance 22,198 28,208
Addition during the year 954 150
Less: Amortization during the year (6,187) (6,160)
16,965 22,198
Deferred tax: 8.1
Opening balance of deferred tax asset 41,935 116,997
Less: Opening balance of deferred tax liability
of merging entities - (42,836)
Less: Transferred from reserves to liability in
case of merging entities - (34,369)
Deferred tax asset booked for the year 195,126 -
Provision made during the year - 2,143
237,061 41,935
596,087 653,668
8.1 Deferred taxation comprises of deferred tax asset arising in respect of unused tax losses of Rupees
1,725.656 million (December 31, 2003: Rupees 1,348.043 million) as reduced by taxable temporary
differences.
Deferred tax asset arising from unused tax losses of merged entities related to the periods prior to
the date of merger has been reflected/adjusted through statement of changes in equity in accordance
with International Accounting Standard 12 "Income Taxes", only to the extent that these timing
differences would be recovered in the foreseeable future period.

Notes 2004 2003
9. ACCRUED INCOME AND OTHER RECEIVABLES
Profit /return and other charges receivable - considered good

Morabaha, musharika and other finances 226,667 105,551
Placements and TFCs 33,092 14,770
259,759 120,321
Other receivables 258,374 169,914

Less: Provision doubtful receivables (46,027) (46,027)
Considered good 212,347 123,887
472,106 244,208
10. TANGIBLE FIXED ASSETS

Operating fixed assets 10.1 666,584 194,453
Assets subject to finance lease 10.2 292 5,090
Assets leased out under operating lease
arrangements 10.3 22,578 27,118
Capital work in progress - Office buildings 60,250 23,250
749,704 249,911
10.1 Operating fixed assets - held for own use
Cost / Revalued Amounts Accumulated Depreciation Written down

As at Additions Deletions/ Surplus/ As at As at Adjust- Charge As at value as at Rate
Description January Adjustments (deficit) on December January ments for the December December per
01, 2004 revaluation of 31, 2004 01, 2004 year 31, 2004 31, 2004 annum
fixed assets
( R u p e e s i n '000' ) %
Freehold land 5,500 25,700 - 58,600 89,800 - - - - 89,800 -

Building on freehold land 13,969 7,617 - (4,739) 16,847 1,499 - 1,050 2,549 14,298 5
Office premises (Note 10.4) 162,187 17,037 - 371,807 551,031 9,198 - 12,050 21,248 529,783 5
Office equipments 36,979 15,601 (1,975) - 50,605 26,714 (256) 11,006 37,464 13,141 33
Furniture and fixtures 11,166 13,689 (88) - 24,767 8,185 (76) 3,844 11,953 12,814 20
Leasehold improvements 13,227 300 (1,000) - 12,527 5,325 - 826 6,151 6,376 10
Books 549 93 - - 642 433 - 52 485 157 20
Vehicles 14,089 56 (5,693) - 8,452 11,606 (4,751) 1,382 8,237 215 25
Sub total 257,666 80,093 (8,756) 425,668 754,671 62,960 (5,083) 30,210 88,087 666,584
10.2 Assets subject to finance lease
Vehicles 13,969 - (7,351) - 6,618 9,132 (4,249) 1,443 6,326 292 25
Sub total 13,969 - (7,351) - 6,618 9,132 (4,249) 1,443 6,326 292
10.3 Assets leased out under operating lease arrangements

Owned
Plant and machinery 47,547 632 - - 48,179 22,867 - 4,818 27,685 20,494 10
Leased
Plant and machinery 3,536 - - - 3,536 1,098 - 354 1,452 2,084 10
Sub total 51,083 632 - - 51,715 23,965 - 5,172 29,137 22,578
December 31, 2004 322,718 80,725 (16,107) 425,668 813,004 96,057 (9,332) 36,825 123,550 689,454
December 31, 2003 169,215 170,137 (16,634) - 322,718 84,015 (8,057) 20,099 96,057 226,661

10.4 It represents properties owned and in possession of the company at Crescent Standard Tower,
Lahore and Fortune Centre, Karachi.
10.5 Land and buildings/office premises have been revalued as at October 31, 2004 by an independent
valuer, Messrs Hasib Associates, Lahore, approved on the panel of Pakistan Bankers Association for
this purpose. Had there been no revaluation, the cost, accumulated depreciation and book value of
freehold land and buildings/office premises would have been as follows as on December 31, 2004:
Cost Accumulated Book Value

Depreciation
( Rupees in '000' )
Freehold land 31,200 - 31,200
Buildings / office premises 200,810 20,738 180,072
10.6 Detail in respect of fixed assets sold during the year ended December 31, 2004:
Description of Asset Cost Accumulated Book Sale Gain / Mode of Buyers’

Depreciation Value Proceeds (Loss) disposal particulars
( R u p e e s in ‘000’ )
Vehicles
Motor Cycle 55 55 - 24 24 As per policy Mr. Nadeem Khan, Employee
Mercedez Benz 3,171 3,154 17 100 83 As per policy Mr. Khurshid Hadi, Ex-Employee
Honda Civic 1,135 852 283 455 172 As per policy Mr. Khurshid Hadi, Ex-Employee
Suzuki Cultus 555 449 106 183 77 As per policy Mr. Jawad Ahmed, Ex-Employee
Toyota Corolla 889 533 356 356 - As per policy Mr. Razi Aziz, Ex-Employee
Suzuki Baleno 705 423 282 353 71 As per policy Mr. Hameed Rabani, Ex-Employee
Suzuki Cultus 525 367 158 269 111 As per policy Mr. Shahid A. Khan, Ex-Employee
Suzuki Alto 469 234 235 360 125 Negotiation Mr. Usman, Ex-Employee
Toyota Estima Van 1,905 952 953 975 22 Negotiation Mr. Abdul Hameed, Ex-Employee
Toyota Corolla 774 309 465 650 185 Negotiation Messrs Muslim Construction
(Private) Limited
Motor Cycle 65 58 7 13 6 As per policy Mr. Sarwar Zohaib, Employee
Toyota Corolla 1,169 440 729 673 (56) As per policy Mr. Wasif Mustafa Khan, Ex-
Employee
Honda Civic 980 980 - 48 48 As per policy Mr. S. M. Yusuf, Employee
Suzuki Cultus 647 194 453 453 - As per policy Mr. S. M. Yusuf, Employee
Office Equipments
Computer 128 - 128 127 (1) Negotiation Messrs Zaheer Electronics
Laptop 139 70 69 27 (42) As per policy Mr. Ahsen Sharaz, Ex-Employee
Note Book Sony XG 39 114 114 - 11 11 As per policy Mr. Shahid Latif Dar, Employee
Computer 145 72 73 14 (59) As per policy Mr. Wasif Mustafa Khan, Ex-
Employee
Generator 1,449 - 1,449 940 (509) Negotiation Gulberg Hospital, Lahore.
Furniture and Fixtures

Furniture 20 8 12 12 - As per policy Mr. Ahsen Sharaz, Ex-Employee
Furniture 68 68 - 75 75 Negotiation Mr. Saad Yahya Malik, Employee
15,107 9,332 5,775 6,118 343
10.7 Cost of fully depreciated assets in use is Rupees 31.313 million as on December 31, 2004.

Notes 2004 2003
11. INTANGIBLE ASSETS
Opening balance 1,000 1,000

Add: Surplus on remeasurement 14,000 -
15,000 1,000
11.1 This represents fair value of the membership card of National Commodity Exchange Limited and
has been remeasured on the basis of market/fair value, being price offered by independent third
parties.
12. REDEEMABLE CAPITAL
This represents Term Finance Certificates (TFCs) issued as fully paid scripts of Rupees 5,000
denomination on July 08, 2003 and August 05, 2004. These TFCs are redeemable in a period of four
years and two and a half years in eight and five semi-annual installments comprising of both principal
and profit, in which the principal is repayable in six and five equal semi-annual installments in arrears,
respectively. The profit is payable at the State Bank of Pakistan discount rate + 2% and KIBOR + 2.5%,
respectively. These TFCs have been secured by a first pari passu charge over the leased assets and
related lease rentals receivables of the Company with 25% margin.
13. SECURITY DEPOSITS
These represent interest free security deposits received under lease arrangements and are repayable/
adjustable at the expiry / termination of the respective arrangements.
14. CUSTOMERS' DEPOSITS
Foreign currency deposits 19,933 15,597

Local currency deposits 3,850,163 1,847,317
3,870,096 1,862,914
14.1 Certificates of deposits issued by the Company range in maturity from 30 days to 5 years and
offer expected weighted average rate of return at 8.13% (2003: 9.81%) per annum for Pak Rupees
deposits and 2.67% (2003: 1.65%) per annum for foreign currency deposits.
14.2 Foreign currency deposits of US $ 335,566 (2003: US $ 268,620), equivalent to Pak Rupees
16.208 million (2003: Pak Rupees 15.436 million) are under lien with the Company under reverse
repo agreement.
15. BORROWINGS
Term finance facilities 15.1 & 15.2 833,581 593,536

Running finance facilities 15.3 173,360 176,886
Placements of funds - Unsecured 15.4 543,977 1,204,640
Borrowings under repurchase agreement 15.5 228,492 -
Finances under morabaha arrangements - 46,500
Others - Unsecured 15.6 2,500 -
1,781,910 2,021,562

15.1 Term Finance Facilities
Outstanding Maturity Tenure Repayment

Amount Date
(Rs. in 000) Years
Albaraka Islamic Bank - I 34,369 26.01.2005 1 At Maturity

Albaraka Islamic Bank - II 15,631 15.02.2005 1 At Maturity
Albaraka Islamic Bank - III 35,000 23.09.2005 1 Quarterly
Askari Commercial Bank Limited - I 1,750 25.07.2005 3 Quarterly
Askari Commercial Bank Limited - II 200,000 22.12.2007 3 Quarterly
Escorts Investment Bank Limited 6,667 13.11.2005 3 Quarterly
Faysal Bank Limited 7,500 20.09.2005 3 Quarterly
Meezan Bank Limited 5,000 24.03.2005 1.5 Quarterly
International Housing Finance Limited 70,747 25.07.2009 6 Monthly
Metropolitan Bank Limited 10,331 31.10.2005 3 Monthly
National Bank of Pakistan 41,700 01.01.2007 4 Monthly
Orix Investment Bank Limited - I 6,776 23.06.2005 2.5 Quarterly
Orix Investment Bank Limited - II 100,000 22.11.2007 3 Monthly
Pak Libya Holding Company Limited - I 24,818 12.08.2005 3 Monthly
Pak Libya Holding Company Limited - II 31,417 01.08.2005 3 Quarterly
Saudi Pak Industrial and Agricultural
Investment Company (Private) Limited - I 10,708 23.06.2006 3 Quarterly
Saudi Pak Industrial and Agricultural
Investment Company (Private) Limited - II 50,000 30.08.2008 3.5 Quarterly
Saudi Pak Commercial Bank Limited 19,500 08.06.2005 1 Quarterly
Saudi Pak Commercial Bank Limited 36,667 31.10.2005 1 Quarterly
The Bank of Punjab 125,000 26.05.2007 3 Quarterly
833,581
15.2 The above finances have been obtained from banking companies and other financial institutions
and are secured by charge on leased assets and related lease rentals receivable and fixed assets.
It includes Rupees 70.747 million (2003: Rupees 83.77 million) received from associated
undertaking.
15.3 These represent finances obtained against aggregate facilities of Rupees 182.5 million (2003:
Rupees 227.5 million) from banking companies and other financial institutions. These facilities are
secured by charge on leased assets and pledge of shares. It includes Rupees 99.799 million
(2003: Nil) received from associated undertaking.
15.4 These represent unsecured placements of funds obtained from banking companies and other
financial institutions. It includes Rupees 90 million (2003: Rupees 10 million) received from
associated undertaking.
15.5 These represent funds borrowed from banking companies and financial institutions. These are
secured against sale proceeds of shares.
15.6 This represents unsecured placement of funds by a Trust for a short period.
15.7 Weighted average mark-up rate of total borrowings is 9.98% per annum (2003: 11.12% per annum).

16. LIABILITIES AGAINST ASSETS SUBJECT TO FINANCE LEASE
Future minimum lease payments under finance leases and present value of minimum lease payments
are as follows:
2004 2003
Financial Present Minimum Financial Present
Minimum Charges Value of Lease Charges Value of
Lease Allocated Minimum Payments Allocated Minimum
Payments to Future Lease to Future Lease
Years Payments Years Payments
Rupees in '000'
Not later than one year 2,702 111 2,591 5,219 501 4,718
Later than one year but not later
than five years 396 25 371 2,945 408 2,537
3,098 136 2,962 8,164 909 7,255
The weighted average rate of mark-up used as the discounting factor (i.e. Implicit in the lease ) is 11.76% (2003:
12.20%) per annum. Rentals are payable in monthly and quarterly installments. The company has the option to
purchase the leased assets at the end of lease term and has intention to exercise it.
2004 2003
17. ACCRUED AND OTHER LIABILITIES
Profit / return payable on redeemable capital,

deposits and borrowings 124,538 157,775
Payable to stock brokers 35,704 100,688
Accrued expenses and other liabilities 225,056 253,936
Margin deposits 9,570 53,196
Lease rentals received in advance 84,970 100,103
Due to employees' provident fund trust 5,469 183
Income tax withheld 744 50
486,051 665,931
18. CONTINGENCIES AND COMMITMENTS
18.1 Contingencies
Acceptances/undertakings against documentary credits

and guarantees issued in normal course of business in favour of:
Banking companies and other financial institutions 25,491 15,744

Corporate and other government and non
government institutions 45,720 177,530
71,211 193,274
18.2 (a) The company has filed appeals before the Commissioner of Income Tax (Appeals) against
the orders passed by the taxation officer for the assessment years 1998-99, 1999-2000 and
2000-01 raising income tax demands of Rupees 13.746 million, Rupees 33.192 million and
Rupees 14.471 million respectively on account of certain add backs, assigning the status to
the company as banking company, ignoring the exemption on certificates of investment in
foreign currencies.

(b) In case of Pacific Leasing Company Limited (an amalgamated entity), the taxation officer
has raised income tax demand of Rupees 16.619 million for the assessment year 2001-02
on account of certain add backs. The company has filed appeal before Commissioner of
Income Tax (Appeals) against the order.
(c) In case of First Crescent Modaraba (an amalgamated entity), the Commissioner of Income
Tax (Appeals) has upheld the disallowance of exemption claimed under caluse 102E of Part I
of the Second Schedule to the repealed Income Tax Ordinance, 1979 and set-aside the add
backs for the assessment year 2001-02. Appeal has been filed with Income Tax Appellate
Tribunal in this respect which is still awaited to be heard. The likely impact of uphold the
disallowance of exemption under clause 102E of the repealed Income Tax Ordinance, 1979
is Rupees 7.4 million. Proceedings for assessment for other add backs are yet to commence.
Pending outcome of the appeals, no provision has been made in the accounts as the management
has strong ground to believe, based on favourable orders available in the previous years in case of
the company as well as parallel cases, that the favourable decisions are expected.
The income tax proceedings of the company has been finalized upto tax year 2004 subject to the
aforementioned matters under appeals.
2004 2003
18.3 Commitments
Commitments for disbursement of leases 59,061 107,900

Letters of credit issued in favour of clients - 69,989
Forward exchange contracts with State Bank of Pakistan
in respect of foreign currency deposits 16,525 15,745
19. ISSUED, SUBSCRIBED AND PAID-UP SHARE CAPITAL
31,000,000 (2003: 31,000,000) ordinary shares of

Rupees 10 each fully paid up in cash 310,000 310,000
94,761,324 (2003: 94,761,324) ordinary shares of

Rupees 10 each issued in accordance with the
Schemes of Arrangement for Amalgamation 947,613 947,613
1,257,613 1,257,613
19.1 Included herein are 31,350,248 (2003: 14,127,546) ordinary shares of Rupees 10 each held by
the associated undertakings.
20. STATUTORY RESERVES
This represents the reserve fund created in order to meet the requirements of the Prudential Regulations
for NBFCs.
21. RESERVE FOR CONTINGENCIES
This reserve has been created to strengthen the soundness of the Company and is earmarked by the
Board of Directors for meeting unforeseeable future contingencies.

22. SURPLUS ON REVALUATION OF FIXED ASSETS
Revalued Book
amount value as at Surplus
31.10.2004
(Rupees in '000')
Freehold land 89,800 31,200 58,600

Buildings / office premises 531,442 164,374 367,068
621,242 195,574 425,668
Less: Incremental depreciation transferred to

statement of changes in equity (3,059)
422,609
22.1 The revaluation of freehold land and buildings was carried out on October 31, 2004 on the basis of
prevailing market values. Surplus on revaluation of fixed assets has been reflected in balance
sheet after share capital and reserves in accordance with section 235 of the Companies Ordinance,
1984. However, International Accounting Standard 16 “Property, Plant and Equipment” permits
the inclusion of surplus on revaluation of fixed assets into equity.
23. SUPPLEMENTARY CAPITAL
This represents free of charge contributory fund under Financial Deepening Challenge Fund provided
by Enterplan Limited, United Kingdom, on the arrangement that the Company will also contribute double
the amount contributed by the Fund as supplementary capital of the Company. The fund so contributed
will be invested under SME financing window project. The amount equal to the income generated
thereupon will also be reinvested into the project. The Fund committed to contribute a sum of Pound
Sterling 1.00 million over a period of three years ending March 2005.
2004 2003
24. RETURN ON INVESTMENTS
Dividend income 51,698 12,650

Income / return from sale/ trading in investments 246,696 227,087
298,394 239,737
25. OTHER INCOME

Gain on disposal of fixed assets 343 18,587
Fees and commission 18,702 3,364
Other income 26,039 35,736
45,084 57,687
26. FINANCIAL CHARGES

Return on customers’ deposits 238,169 129,751
Profit on redeemable capital 74,672 84,770
Profit/return on borrowings and other charges 144,465 423,184
457,306 637,705

Notes 2004 2003
27. ADMINISTRATIVE AND OPERATING EXPENSES
Salaries and other benefits 27.1 63,849 61,781

Directors' fee 178 93
Rent, rates and taxes 5,654 6,886
Traveling and conveyance 7,667 6,687
Telephone and postage 5,349 7,087
Legal and other consultancy charges 14,117 20,748
Subscriptions and fees 4,256 2,829
Utilities 5,549 4,833
Repairs and maintenance 5,373 4,711
Depreciation 10 36,825 20,099
Printing and stationery 5,208 3,027
Lease rentals 6,132 6,787
Entertainment 2,167 2,049
Insurance 3,574 2,058
Auditors’ remuneration 27.2 1,030 1,060
Security services 403 283
Advertising and promotion 1,628 2,365
CDC services fees 2,080 237
Morabaha and other direct write offs 650 -
Miscellaneous 7,155 6,286
178,844 159,906
27.1 These include staff provident fund contribution of Rupees 2.930 million (2003: Rupees 1.575 million).
27.2 Auditors' Remuneration
2004 2003
Ford, Rhodes,
Syed Husain Syed Husain Sidat, Hyder Total
& Co. & Co. & Co. / Taseer
Hadi Khalid & Co./
Sandhu & Co.
(Rupees in '000')
Statutory audit fee 400 450 230 680

Special audit, half yearly
review and certification fee 553 75 211 286
Tax services 45 - - -
Out of pocket expenses 32 57 37 94
1,030 582 478 1,060
28. PROVISION FOR DOUBTFUL RECEIVABLE

Musharika Morabaha Investment Assets Due from Other
Finance Finance in Finance Repossessed Leasses Receivables 2004 2003
Lease
( Rupees in '000' )
Opening balance 4,625 136,559 233,580 42,849 4,683 46,027 468,323 358,738
Net charge during the year - 5,829 869 - - - 6,698 109,586
Amount written off (Note 28.1) - (3,315) - - - - (3,315) -
Closing balance 4,625 139,073 234,449 42,849 4,683 46,027 471,706 468,324
Note numbers 6 6 7 8 8 9

28.1 Statement showing written off musharika, morabaha, other finances, lease portfolio or any other
financial relief of Rupees five hundred thousands or above allowed during the period ended
December 31, 2004:
Name & Address Full name of directors / Fathers Name of / N.I.C. No. Outstanding Principal Other Total
of Borrower partner / proprietors borrower/director liability as Amount Financial
at January Written Relief
1, 2004 Off Allowed
(A) (B) (A+B)
( Rupees in '000' )
"M&J Engineering (Private) "1. Mr. Hamid Jameel, Mr. Barkat Ali 517-88-416903 9,815 3,315 - 3,315
Limited Plot No. F-5, Resident of 61/A/1,
Sector 50-0, Korangi South Central Avenue,
Industrial Area, Karachi." Phase 11, Defence
Officers Housing Authority,
Karachi. "
"2. Mrs. Muzaffar Jameel,

Resident of 61/A/1, South
Central Avenue, Phase 11,
Defence Officers Housing
Authority, Karachi. " W/o Mr. Hamid Jameel 517-88-416904
"3. Mr. Shahid Jameel,

Resident of 61/A/1, South
Central Avenue, Phase 11,
Defence Officers Housing
Authority, Karachi. " Mr. Hamid Jameel 517-90-416906
2004 2003
29. PROVISION FOR TAXATION
Current:
For the year 11,000 8,507
Prior years - 7,212
11,000 15,719
Deferred - (2,143)
11,000 13,576
29.1 In view of the available tax losses, no provision for current taxation except minimum tax is required.
The current provision for the year, therefore, represents the minimum tax due under section 113 of
the Income Tax Ordinance, 2001.
30. EARNINGS PER SHARE
There is no dilutive effect on the basic earnings per

share of the company which is based on:
Profit / (loss) after taxation Rupees in ‘000’ 460,466 (109,971)

Weighted average number of ordinary
shares (2003: Restated) 125,761,324 125,761,324
Basic earnings per share (2003: Restated) Rupees 3.66 (0.87)

31. REMUNERATION OF CHIEF EXECUTIVE AND EXECUTIVES
Chief Executive Executives Total

2004 2003 2004 2003 2004 2003
Managerial Remuneration 2,400 1,680 8,873 4,880 11,273 6,560

House Rent Allowance 1,200 1,008 3,135 1,690 4,335 2,698
Utilities 240 168 690 392 930 560
Provident Fund 240 168 448 244 688 412
Other allowances - - 579 336 579 336
4,080 3,024 13,725 7,542 17,805 10,566
Number of Persons 1 1 9 5 10 6
31.1 In addition to the above, the chief executive and certain executives are provided free use of company
maintained cars as per terms of employment.
Notes 2004 2003

32. CASH AND CASH EQUIVALENTS
Cash and bank balances 3 106,663 235,298

Placements of funds 5 1,302,032 716,994
1,408,695 952,292
33. CURRENCY WISE BREAK DOWN OF ASSETS AND LIABILITIES
Currency risk is the risk that the value of financial asset or liability will fluctuate due to changes in foreign
currency rates. The Company is exposed to foreign currency risk on its foreign currency deposits which
is managed through State Bank of Pakistan’s forward covers and other hedging arrangements. The
Company’s net exposure in foreign currency is given below:
2004 2003
Assets Liabilities Off Balance Net Foreign Assets Liabilities Off Balance Net Foreign
Sheet items Currency Sheet Items Currency
Exposure Exposure
(Rs. in ‘000’)
US Dollars 2,672 19,933 16,525 (736) 159,048 15,597 15,745 159,196

Pound Sterling 632 - - 632 20,931 - - 20,931
Euro 98 - - 98 98 - - 98
Pak Rupees 8,198,515 7,332,152 (16,525) 849,838 6,001,688 5,924,347 (15,745) 61,596
8,201,917 7,352,085 - 849,832 6,181,765 5,939,944 - 241,821

34. MATURITIES OF ASSETS AND LIABILITIES
2004
Total Within one More than one Above five
Description year year and upto years
five years
Assets
Cash and bank balances 106,663 106,663 - -
Investments 1,434,773 525,962 852,763 56,048
Placements of funds 1,302,032 1,302,032 - -
Musharika, morabaha and other finances 2,218,933 1,998,015 218,199 2,719
Net investment in finance lease 2,511,861 940,573 1,571,288 -
Advances, deposits, prepayments, deferred and other assets 596,087 391,745 204,342 -
Accrued income and other receivables 472,106 472,106 - -
Tangible fixed assets 749,704 55,228 220,912 473,564
Intangible assets 15,000 - 15,000 -
9,407,159 5,792,324 3,082,504 532,331
Liabilities
Redeemable capital 637,657 235,832 401,825 -
Security deposits 566,695 175,410 391,285 -
Customers' deposits 3,870,096 3,061,587 808,509 -
Borrowings 1,781,910 1,436,778 345,132 -
Liabilities against assets subject to finance lease 2,962 2,591 371 -
Accrued and other liabilities 486,051 486,051 - -
Unclaimed dividend 7,458 7,458 - -
7,352,829 5,405,707 1,947,122 -
2,054,330 386,617 1,135,382 532,331
Shareholders' equity 1,564,992

Supplementary capital 66,729
Surplus on revaluation of fixed assets 422,609
2,054,330
2003
Description Total Within one More than one Above five
year year and upto years
five years
Assets
Cash and bank balances 235,298 235,298 - -
Investments 949,712 575,375 280,223 94,114
Placements of funds 716,994 716,994 - -
Musharika, morabaha and other finances 778,121 591,800 186,321 -
Net investment in finance lease 2,834,436 1,093,087 1,741,349 -
Advances, deposits, prepayments, deferred and other assets 653,668 631,470 22,198 -
Accrued income and other receivables 244,208 244,208 - -
Tangible fixed assets 249,911 20,099 100,218 129,594
Intangible assets 1,000 - - 1,000
6,663,348 4,108,331 2,330,309 224,708
Liabilities
Redeemable capital 786,458 108,250 678,208 -
Security deposits 588,408 150,149 438,259 -
Customers' deposits 1,862,914 1,222,598 640,316 -
Borrowings 2,021,562 1,796,942 224,620 -
Liabilities against assets subject to finance lease 7,255 4,718 2,537 -
Accrued and other liabilities 665,931 665,931 - -
Unclaimed dividend 7,466 7,466 - -
5,939,994 3,956,054 1,983,940 -
723,354 152,277 346,369 224,708
Shareholders' equity 680,555

Supplementary capital 42,799
723,354

34.1 Liquidity Risk
Liquidity risk reflects management's inability in raising funds to meet its commitments. The
management closely monitors its liquidity and cash flow position and takes appropriate steps to
minimize the risk.
35. YIELD / MARKUP RISK

35.1 Yield / markup is the risk of decline in earnings due to adverse movement of yield curve. It arises
from the possibility that changes in yield / markup rates will affect the value of financial instruments.
The company is exposed to yield / markup rate risk as a result of mismatch or gaps in the amounts
of assets and liabilities and off balance sheet instruments that mature or reprice in a given period.
Sensitivity of the company's financial assets and liabilities to yield / markup rate can be evaluated
from the following:
2004
Exposed to Interest Rate Risk Not Exposed to Interest Rate Risk
Description Total Within one More than one Above five Within one More than one Above five
year year and upto years year year and upto years
five years five years
Assets
Cash and bank balances 106,663 47,575 - - 59,088 - -

Investments 1,434,773 525,962 852,763 38,552 - - 17,496
Placements of funds 1,302,032 1,302,032 - - - - -
Musharika, morabaha and other finances 2,218,933 1,998,015 218,199 2,719 - - -
Net investment in finance lease 2,511,861 940,573 1,571,288 - - - -
Advances, deposits and other assets 155,549 - - - 155,549 - -
Accrued income and other receivables 472,106 - - - 472,106 - -
8,201,917 4,814,157 2,642,250 41,271 686,743 - 17,496

Liabilities
Redeemable capital 637,657 235,832 401,825 - - - -
Security deposits 566,695 - - - 175,410 391,285 -
Customers' deposits 3,870,096 3,061,587 808,509 - - - -
Borrowings 1,781,910 1,436,778 345,132 - - - -
Liabilities against assets subject to finance lease 2,962 2,591 371 - - - -
Accrued and other liabilities 485,307 - - - 485,307 - -
Unclaimed dividend 7,458 - - - 7,458 - -
7,352,085 4,736,788 1,555,837 - 668,175 391,285 -
Sensitivity Gap 849,832 77,369 1,086,413 41,271 18,568 (391,285) 17,496
2003
Exposed to Interest Rate Risk Not Exposed to Interest Rate Risk
Description Total Within one More than one Above five Within one More than one Above five
year year and upto years year year and upto years
five years five years
Assets
Cash and bank balances 235,298 173,647 - - 61,651 - -
Investments 949,712 575,375 280,223 52,941 - - 41,173
Placements of funds 716,994 716,994 - - - - -
Musharika, morabaha and other finances 778,121 591,800 186,321 - - - -
Net investment in finance lease 2,834,436 1,093,087 1,741,349 - - - -
Advances, deposits, deferred and other assets 422,996 - - - 422,996 - -
Accrued income and other receivables 244,208 - - - 244,208 - -
6,181,765 3,150,903 2,207,893 52,941 728,855 - 41,173

Liabilities
Redeemable capital 786,458 108,250 678,208 - - - -
Security deposits 588,408 - - - 150,149 438,259 -
Customers' deposits 1,862,914 1,222,598 640,316 - - - -
Borrowings 2,021,562 1,796,942 224,620 - - - -
Liabilities against assets subject to finance lease 7,255 4,718 2,537 - - - -
Accrued and other liabilities 665,881 - - - 665,881 - -
Unclaimed dividend 7,466 - - - 7,466 - -
5,939,944 3,132,508 1,545,681 - 823,496 438,259 -
Sensitivity Gap 241,821 18,395 662,212 52,941 (94,641) (438,259) 41,173
35.2 Effective yield/mark-up rates for financial assets and financial liabilities have been reflected in the
respective notes.

36. CREDIT RISK
The company's credit risk exposure is not significantly different from that reflected in the financial state-
ments. The management monitors and limits company's exposure to credit risk through monitoring of
clients' credit exposure, review and conservative estimates of provisions for doubtful receivable and
through the prudent use of collateral for major amounts of credit. The management is of the view that it
is not exposed to significant concentration of credit risk as its financial assets are adequately diversified.
Detail of industry sector wise leased assets and other financial instruments are given below:
2004 2003
Morabaha / Musharika/ Morabaha / Musharika/
Leased Assets Other Finances Leased Assets Other Finances
(Rs. '000') %age (Rs. '000') %age (Rs. '000') %age (Rs. '000') %age
Chemical and pharmaceuticals 109,368 3.98 82,095 3.47 166,472 5.43 56,308 6.13
Construction 30,879 1.12 224,986 9.52 23,489 0.77 26,876 2.92
Electrical, engineering and steel 154,953 5.64 509,848 21.58 140,628 4.58 90,908 9.89
Sugar 42,578 1.55 - - 89,898 2.93 - -
Food and allied 176,340 6.42 33,119 1.40 257,741 8.40 108,530 11.81
Rubber products 11,699 0.43 - - 7,909 0.26 - -
Hospital 61,888 2.25 - - 104,971 3.42 - -
Services 8,026 0.29 123,806 5.24 - - 22,400 2.44
Paper and board 12,860 0.47 5,091 0.22 16,906 0.55 - -
Tobacco 5,013 0.18 - - - - - -
Ceramics - - 1,910 0.08 - - 50,302 5.47
Cement 130,172 4.74 233 0.01 187,936 6.13 14,261 1.55
Textiles and jute 512,214 18.65 246,603 10.44 618,791 20.17 131,350 14.29
Synthetic 13,527 0.49 - - 13,559 0.44 - -
Trading - - 10,599 0.45 100,997 3.29 57,986 6.31
Transport, travel and communication 387,166 14.10 38,500 1.63 356,504 11.62 29,007 3.16
Glass 44,903 1.64 6,929 0.29 24,990 0.81 - -
Fertilizer 1,302 0.05 - - 23,865 0.78 - -
Leather and tanneries 7,718 0.28 69,672 2.95 6,956 0.23 29,207 3.18
Vanaspati and allied 7,438 0.27 - - 20,161 0.66 - -
Energy, petroleum, oil and gas 122,452 4.46 335,000 14.18 176,168 5.74 82,914 9.02
Banks/Non banking finance companies 44,464 1.62 90,216 3.82 55,550 1.81 6,545 0.71
Hotels 89,447 3.26 - - 169,600 5.53 - -
Individuals 41,910 1.53 201,871 8.54 45,052 1.47 105,212 11.44
Miscellaneous 729,993 26.58 382,153 16.17 459,873 14.99 107,499 11.69
2,746,310 100.00 2,362,631 100.00 3,068,016 100.00 919,305 100.00
37. FAIR VALUE OF THE FINANCIAL INSTRUMENTS
The carrying value of financial assets and financial liabilities approximates their fair value as reflected in
the financial statements.

2004 2003
38. STATEMENT OF CURRENT ASSETS AND LIABILITIES
Current Assets
Cash and bank balances 106,663 235,298
Investments 525,962 575,375
Placements of funds 1,302,032 716,994
Musharika, morabaha and other finances 1,998,015 591,800
Net investment in finance lease 940,573 1,093,087
Advance, deposits, prepayments, deferred and other assets 391,745 631,470
Accrued income and other receivables 472,106 244,208
5,737,096 4,088,232
Current Liabilities
Redeemable capital 235,832 108,250
Security deposits 175,410 150,149
Customers’ deposits 3,061,587 1,222,598
Borrowings 1,436,778 1,796,942
Liabilities against assets subject to finance lease 2,591 4,718
Accrued and other liabilities 486,051 665,931
Unclaimed dividend 7,458 7,466
5,405,707 3,956,054
39. TRANSACTIONS WITH RELATED PARTIES /
Related parties comprise related group companies, associated companies, directors and executives.
The company, in the normal course of business carries out transactions with various related parties.
Amounts due from and to the related parties, amount due from executives and remuneration of directors
and executives are disclosed in the relevant notes. Other material transactions with related parties in-
clude payment of corporate service fees and reimbursement of expenses amounting to Rupees 3.289
million (2003: Rupees 3.251 million).
40. NUMBER OF EMPLOYEES
The total number of employees at the year end were 123 (2003: 106).
41. DATE OF AUTHORIZATION FOR ISSUE
These financial statements were approved and authorized for issue by the Board of Directors in their
meeting held on March 14, 2005.
42. CORRESPONDING FIGURES
42.1 Corresponding figures have been regrouped and rearranged wherever necessary to conform with
the current period's presentation.
42.2 Corresponding figures stated in these financial statements represent combined figures of the com-
pany and merged entities after elimination of inter company balances and transactions. The corre-
sponding figures have been abstracted as under:
Balance sheet as on December 31, 2003
Crescent Standard Investment Bank Limited before merger Audited accounts
Merging entities Reviewed accounts
Profit and loss account for the year ended December 31, 2003
Crescent Standard Investment Bank Limited before merger Audited accounts
Merging entities Reviewed accounts

The Companies Ordinance 1984 FORM - 34
(Section 236(1) and 464)
Pattern of Shareholding
1. Incorporation Number I - 00512
2. Name of The Company Crescent Standard Investment Bank Limited
3. Pattern of Holding of the Shares held by the Shareholders as at : December 31, 2004
4. No. of Shareholding
Shareholders From To Total Shares held
653 1 100 34,208

3,070 101 500 866,593
2,363 501 1,000 2,083,506
2,181 1,001 5,000 5,251,717
382 5,001 10,000 2,869,838
103 10,001 15,000 1,261,705
87 15,001 20,000 1,553,023
50 20,001 25,000 1,154,053
19 25,001 30,000 531,302
23 30,001 35,000 741,400
23 35,001 40,000 859,181
9 40,001 45,000 376,619
24 45,001 50,000 1,155,667
9 50,001 55,000 473,448
12 55,001 60,000 690,123
7 60,001 65,000 438,937
6 65,001 70,000 409,855
8 70,001 75,000 583,637
3 75,001 80,000 230,423
3 80,001 85,000 245,599
5 85,001 90,000 441,336
5 90,001 95,000 472,176
4 95,001 100,000 394,720
3 100,001 105,000 304,351
3 105,001 110,000 321,753
3 110,001 115,000 339,313
2 115,001 120,000 236,543
4 120,001 125,000 496,789
2 130,001 135,000 264,432
1 135,001 140,000 140,000
6 140,001 145,000 857,624
1 145,001 150,000 147,241
1 150,001 155,000 150,597
1 170,001 175,000 174,932
2 180,001 185,000 365,720
2 195,001 200,000 397,157
1 210,001 215,000 211,337
1 220,001 225,000 220,959
1 225,001 230,000 229,500
1 235,001 240,000 237,036
1 245,001 250,000 248,205
1 260,001 265,000 265,000
2 265,001 270,000 535,500
1 270,001 275,000 271,199
3 295,001 300,000 894,072

No. of Shareholding
Shareholders From To Total Shares held
1 300,001 305,000 300,536

1 340,001 345,000 342,381
1 365,001 370,000 366,500
1 405,001 410,000 407,925
1 475,001 480,000 476,235
1 485,001 490,000 485,202
1 565,001 570,000 570,000
1 935,001 940,000 935,080
1 1,490,001 1,495,000 1,495,000
1 1,545,001 1,550,000 1,550,000
1 1,895,001 1,900,000 1,900,000
1 1,915,001 1,920,000 1,915,219
1 1,995,001 2,000,000 2,000,000
1 2,435,001 2,440,000 2,436,647
1 2,855,001 2,860,000 2,856,676
1 2,865,001 2,870,000 2,867,500
1 2,880,001 2,885,000 2,884,500
1 4,645,001 4,650,000 4,650,000
1 8,015,001 8,020,000 8,015,173
1 8,995,001 9,000,000 9,000,000
1 9,585,001 9,590,000 9,589,836
1 11,920,001 11,925,000 11,921,058
1 14,060,001 14,065,000 14,064,575
1 14,300,001 14,305,000 14,302,955
9,116 125,761,324

Categories of Shareholder Shares Held % age
5.1 - Directors, Chief Executive Officer, Their Spouse

and Children
Directors
Dr. Wasim Azhar 4,100 0.01

Mr. Manzurul Haq 50,000 0.04
Mr. Tariq Aleem 2,526 0.00
56,626 0.05
5.2 Associated Companies, Undertakings & Related Parties
Asian Stocks Fund Limited 9,000,000 7.16

Crescent Standard Business Management (Pvt.) Ltd. 14,064,575 11.18
Crescent Standard Modaraba 270,000 0.21
Safeway Fund Limited 500 0.00
Safeway Mutual Fund Limited 8,015,173 6.37
Shakarganj Mills Limited 9,589,836 7.63
40,940,084 32.55
5.3 NIT & ICP
Investment Corporation of Pakistan 71,728 0.06

National Bank Of Pakistan,trustee Department 14,302,955 11.37
14,374,683 11.43
5.4 Banks, DFI's, NBFI's 5,668,103 4.51
5.5 Insurance Companies 3,139,571 2.50
5.6 Modaraba and Mutual Funds 74,042 0.06
5.7 Other Companies 20,915,809 16.63
5.8 Non Residents 7,802,438 6.20
5.9 General Public 32,789,968 26.07
125,761,324 100.00
Shareholders Holding More Than 10.00%
Crescent Standard Business Management (Pvt.) Ltd. 14,064,575 11.18

National Bank Of Pakistan,trustee Department 14,302,955 11.37
Javed Omer Vohra & Company Limited 14,788,558 11.76

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AUDITORS’ REPORT TO THE MEMBERS

(b) in our opinion:

SYED HUSAIN & CO.

ANNUAL REPORT 2004 25

Cash and bank balances 3 106,663 235,298

Redeemable capital 12 637,657 786,458

NET ASSETS 2,054,330 723,354

SHARE CAPITAL AND RESERVES

Authorized share capital

Issued, subscribed and paid up share capital 19 1,257,613 1,257,613

The annexed notes form an integral part of these financial statements.

Chief Executive Officer Chairman

26 CRESCENT STANDARD INVESTMENT BANK LIMITED

Lease revenue 306,738 342,318

Financial charges 26 457,306 637,705

PROFIT BEFORE PROVISIONS AND ADJUSTMENTS

PROVISION FOR DOUBTFUL RECEIVABLES 28 (6,698) (109,586)

ADJUSTMENTS FOR REMEASUREMENT OF

PROFIT / (LOSS) BEFORE TAXATION 471,466 (96,395)

PROFIT / (LOSS) AFTER TAXATION 460,466 (109,971)

EARNINGS / (LOSS) PER SHARE –

Appropriations have been reflected in the statement of changes in equity.

The annexed notes form an integral part of these financial statements.

Chief Executive Officer Chairman

ANNUAL REPORT 2004 27

CASH FLOW FROM OPERATING ACTIVITIES

CASH FLOW FROM INVESTING ACTIVITIES

CASH FLOW FROM FINANCING ACTIVITIES

NET INCREASE IN CASH AND CASH EQUIVALENTS 456,403 376,317

The annexed notes form an integral part of these financial statements.

Chief Executive Officer Chairman

28 CRESCENT STANDARD INVESTMENT BANK LIMITED

The annexed notes form an integral part of these financial statements.

ANNUAL REPORT 2004

Pacific Leasing Company Limited 858,518 611,441

Shares Issued Swap

Pacific Leasing Company Limited 19,819,800 0.555

30 CRESCENT STANDARD INVESTMENT BANK LIMITED

Leased assets in own use

Assets leased out

2.4 Intangible assets

2.5 Net investment in finance lease

ANNUAL REPORT 2004 31

2.7 Sale and repurchase agreements (repo / reverse repo)

2.9 Deferred costs

32 CRESCENT STANDARD INVESTMENT BANK LIMITED

2.11 Cash and cash equivalents

2.12 Fiduciary assets

2.13 Provision for taxation

2.14 Employees benefits

Defined contribution plan

2.15 Revenue recognition

ANNUAL REPORT 2004 33

Notes 2004 2003

34 CRESCENT STANDARD INVESTMENT BANK LIMITED

4.2 Shares - Un-quoted

36 CRESCENT STANDARD INVESTMENT BANK LIMITED

ANNUAL REPORT 2004 37

Sector and Name of Company No of Cost No of Cost

Al-zamin Leasing Limited - - 1,000 2,500

Union Bank Limited - - 1,400 7,000

Ittehad Chemicals Limited - - 180 902

Shakarganj Mills Limited 22 49 1,922 8,001