tsbl of directors mr. naveed gilani chairman mr. abdul basit chief executive mrs. neena jaffar...

Half Yearly ReportDecember 31, 2010(Un-Audited)

TSBL

Trust Securities & Brokerage Limited

COMPANY INFORMATION

DIRECTORS’ REPORT

INDEPENDENT AUDITORS’ REVIEW REPORT TO THE MEMBERS

CONDENSED INTERIM BALANCE SHEET

CONDENSED INTERIM PROFIT AND LOSS ACCOUNT

CONDENSED INTERIM STATEMENT OF COMPREHENSIVE INCOME

CONDENSED INTERIM CASH FLOW STATEMENT

CONDENSED INTERIM STATEMENT OF CHANGES IN EQUITY

NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS

CONTENTS

Trust Securities & Brokerage Limited TSBL

1

Board of Directors

Mr. Naveed Gilani Chairman Mr. Abdul Basit Chief Executive Mrs. Neena Jaffar Director Mr. Syed Javed Hussain Director Mr. Syed Mahmood Ali Director Mr. Mohammed Talha Qureshi (Nominee of Emirates Investment Group LLC) Director Mr. Abdul Basit Pracha Asi Nizami Director

Audit Committee

Mr. Naveed Gilani Chairman Mr. Syed Javed Hussain Member Mr. Mohammad Talha Qureshi Member

Company Secretary

Ms. Nadia Haider

Auditors

Haroon Zakaria & Company Chartered Accountants

Legal Advisor

Mr. Abdul Majid Advocate

Bankers

Bank Alfalah Limited MCB Bank Limited Al Baraka Bank (Pakistan) Limited Habib Metropolitan Bank Limited

Registered Office

3rd Floor, Associated House, Building # 1& 2, 7-Kashmir Road, Lahore-Pakistan. Telephone : (042) 3637 3041-43 Fax : (042) 3637 3040

Lahore Stock Exchange Office

Room # 607, Lahore Stock Exchange Building, 19-Khayaban-e-Aiwan-e-Iqbal, Lahore - Pakistan. Telephone : (042) 3637 4710, 3630 0181

Website: www.trustsecu.com E-mail: [email protected] & [email protected]

Trust Securities & Brokerage Limited TSBLCOMPANY INFORMATION

2

ABDUL BASIT

3

For and on behalf of the Board

Lahore February 25, 2011 CHIEF EXECUTIVE

DIRECTORS’ REPORT The Directors are pleased to submit the interim financial statements of the company for the half year ended December 2010.

Financial Results

December 31, 2010

The summarized financial results are as follows: Rupees

Operating revenue 762,325 Gain on sale of securities 258,414

Loss on re-measurement of investments (10,934) 1,009,805 Operating and administrative expenses Finance cost

(8,783,401) (8,589)

Operating loss (8,791,990) (7,782,185)

Other operating income 387,853

Loss before taxation (7,394,332)

Taxation 626,679 Loss after taxation (6,767,653) Loss per share- basic and diluted ( 0.68 )

During this period, KSE-100 index opened at 9,722 and closed at 12,022 points, sharply rising almost 23.6 percent within six months. The company earned total revenue of Rs. 1,397,658 during the half year ended December 31, 2010, as compared to Rs. 2,306,963 in the corresponding period of last year. On the expenditure side, the operating expenses were Rs. 8,783,401 including a provision of bad debts for Rs.5,186,717. This resulted in net loss of Rs. 6,767,653 during the period under review. We would like to avail this opportunity to convey our deep appreciation to the clients for their continued confidence during these hard days. We would also like to thank SECP, Banks, Karachi and Lahore Stock Exchanges for their continuous cooperation and guidance.

4

INDEPENDENT AUDITORS’ REPORT ON REVIEW OF CONDENSED INTERIM FINANCIAL INFORMATION TO THE MEMBERS

INTRODUCTION: We have reviewed the accompanying condensed interim balance sheet of TRUST SECURITIES AND BROKERAGE LIMITED as at December 31, 2010, and the related condensed interim profit and loss account, condensed interim statement of comprehensive income, condensed interim cash flow statement and condensed interim statement of changes in equity together with the condensed notes forming part thereof (here-in-after referred to as the “Interim financial information”) for the six months period ended December 31, 2010. Management is responsible for the preparation and presentation of this interim financial information in accordance with approved accounting standards as applicable in Pakistan. Our responsibility is to express a conclusion on this interim financial information based on our review. SCOPE OF REVIEW: We conducted our review in accordance with the International Standard on Review Engagements 2410, “Review of Interim Financial Information Performed by the Independent Auditor of the Entity”. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly we do not express an audit opinion. CONCLUSION: Based on our review, nothing has come to our attention that causes us to believe that the annexed interim financial information are not presented fairly, in all materials respects, in accordance with approved accounting standards as applicable in Pakistan. The figures of the condensed profit and loss account for the quarters ended December 31, 2010 and 2009 have not been reviewed as we are required to review only the cumulative figures for the six months period ended December 31, 2010.

Haroon Zakaria & Company Place: Karachi Chartered Accountants Dated: February 25, 2011 Engagement Partner: Zakaria

5

Chief Executive Director

CONDENSED INTERIM BALANCE SHEET (UN-AUDITED)AS AT DECEMBER 31, 2010

_________________ ________________

(Un-Audited) (Audited)December 31, June 30,

2010 2010Note Rupees Rupees

ASSETSNon-Current Assets

Property and equipments 5 2,664,880 2,936,789 Intangibles 4,262,600 4,262,600 Long term investments 6 153,983 127,585 Long term advance 100,000 100,000 Long term deposits 986,649 938,649

8,168,112 8,365,623 Current Assets

Short term invetments 7 6,796,200 6,600,000 Trade debts 8 46,675,565 51,039,881 Loans and advances 473,669 389,000 Trade deposits and short term prepayments 170,062 292,176 Other receivable 312,501 134,196 Cash and bank balances 7,249,048 12,353,377

61,677,045 70,808,630 Total Assets 69,845,157 79,174,253

EQUITY AND LIABILITIES

Share Capital and ReservesAuthorized capital

10,000,000 ordinary shares of Rs.10/- each 100,000,000 100,000,000

Issued, subscribed and paid-up capital10,000,000 ordinary shares of Rs.10/- each 100,000,000 100,000,000

Reserves General reserve 3,500,000 3,500,000 Capital reserve - fair value reserve 26,399 - Accumulated losses (47,842,412) (41,074,759)

(44,316,013) (37,574,759) Shareholders' Equity 55,683,987 62,425,241

Non-Current LiabilitiesDeferred liability 1,999,004 2,022,340

Current LiabilitiesCurrent portion of lease liability against assets subject to finance lease 9 - 298,205 Trade and other payables 12,112,166 13,751,788 Provision for taxation - net 50,000 676,679

12,162,166 14,726,672 Contingencies and Commitments 10 - - Total Equity and Liabilities 69,845,157 79,174,253

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

6

_________________ ________________Chief Executive Director

CONDENSED INTERIM PROFIT AND LOSS ACCOUNT (UN-AUDITED)FOR THE HALF YEAR ENDED DECEMBER 31, 2010

Note Half year ended Quarter ended December December December December

2010 2009 2010 2009

Operating revenue 762,325 2,056,414 560,702 903,520

Gain on sale of securities 258,414 16,170 243,258 16,170

Loss on re-measurement of investments (10,934) - (10,934) - 1,009,805 2,072,584 793,026 919,690

Operating and administrative expenses (8,783,401) (4,174,414) (6,990,473) (2,123,330)

Finance cost (8,589) (482,093) (3,223) (119,469) (8,791,990) (4,656,507) (6,993,696) (2,242,799)

Operating loss (7,782,185) (2,583,923) (6,200,670) (1,323,109)

Other operating income 387,853 234,379 178,471 117,383 Loss before taxation (7,394,332) (2,349,544) (6,022,199) (1,205,726)

Taxation 11 626,679 (80,000) 35,000 (30,000) Loss after taxation (6,767,653) (2,429,544) (5,987,199) (1,235,726)

Loss per share - basic and diluted (0.68) (0.24) (0.60) (0.12)


- - - - - - - - - - - - - - - Rupees - - - - - - - - - - - - - - -

7

_________________Chief Executive

________________Director

CONDENSED INTERIM STATEMENT OF COMPREHENSIVE INCOME (UN-AUDITED)FOR THE HALF YEAR ENDED DECEMBER 31, 2010

Half year ended Quarter ended December December December December

2010 2009 2010 2009

Loss after tax for the period (6,767,653) (2,429,544) (5,987,199) (1,235,726)

Other comprehensive income for the period

Available-for-sale financial assets Gain arising due to remeasurement 26,399 41,047 18,876 8,232

Total comprehensive loss for the period (6,741,254) (2,388,497) (5,968,323) (1,227,494)


- - - - - - - - - - - - - - - Rupees - - - - - - - - - - - - - - -

8

CONDENSED INTERIM CASH FLOW STATEMENT (UN-AUDITED)FOR THE HALF YEAR ENDED DECEMBER 31, 2010

December 31, December 31,2010 2009

Rupees RupeesA. CASH FLOW FROM OPERATING ACTIVITIES

Loss before taxation (7,394,332) (2,349,544)

Adjustment for non-cash charges and other itemsDepreciation 246,338 312,725 Profit on saving account (387,637) (237,612) Provision for bad debts 5,186,717 - Finance cost 8,589 482,093 Loss on disposal of fixed assets 4,923 3,233 Gain on sale of investments (247,480) (16,170)

4,811,450 544,269 Operating loss before working capital changes (2,582,882) (1,805,275)

Changes in Working Capital(Increase) / decrease in current assets

Trade debts (822,401) 10,082,692 Loans and advances (21,000) (23,290) Trade deposits & short term prepayments (129,136) (50,576) Other receivable (178,305) (5,280)

(1,150,842) 10,003,546 (Decrease) / Increase in trade and other payables (1,639,622) 976,362

(2,790,464) 10,979,908 Cash (used in) / generated from operations (5,373,346) 9,174,633

Finance cost paid (8,587) (1,146,360) Taxes paid (63,669) (115,816) Payment of employees compensated absences (23,336) (2,300) Long term deposits - net (48,000) (3,999) Profit received on saving account 387,637 237,612

244,045 (1,030,863)

Net cash (used in) / generated from operating activities (5,129,301) 8,143,770

B. CASH FLOW FROM INVESTING ACTIVITIES

Acquisition of property and equipment - (91,834) Proceeds from sale of property and equipment 20,648 6,500 Purchase of short term investment (207,135) - Proceed from sale of investments 258,414 16,170

Net cash generated from / (used in) investing activities 71,927 (69,164)

9


December 31, December 31,2010 2009

Rupees Rupees

C. CASH FLOW FROM FINANCING ACTIVITIES

Repayment of lease obligation (46,955) (130,693) Repayment of short term borrowings - (7,000,000)

Net cash (used in) financing activities (46,955) (7,130,693)

Net (decrease) / increase in cash and cash equivalents (A+B+C) (5,104,329) 943,913 Cash and cash equivalents at the beginning of the period 12,353,377 4,282,398

Cash and cash equivalents at the end of the period 7,249,048 5,226,311


10

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11

NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS (UN-AUDITED)FOR THE HALF YEAR ENDED DECEMBER 31, 2010

1 THE COMPANY AND ITS OPERATION

Trust Securities And Brokerage Limited (the Company) was incorporated in Pakistan on October 19, 1993 as a public limited company under the Companies Ordinance, 1984 (The Ordinance). The Company is listed on Karachi and Lahore Stock Exchanges in Pakistan. The Company is a Corporate Member of Lahore Stock Exchange (Guarantee) Limited. The company is principally engaged in shares brokerage, consultancy and underwriting services. The registered office of the Company is situated at 3rd Floor, Associated House, Building # 1 & 2, 7 – Kashmir Road, Lahore.

2 BASIS OF PREPARATION

2.2

2.1

Functional and Presentation Currency

Statement of ComplianceThis condensed interim �nancial report of the company for the six months period ended December 31, 2010 has been prepared in accordance with the requirements of the International Accounting Standard 34 - Interim Financial Reporting and provisions of and directives issued under the Companies Ordinance, 1984. In case where requirements di�er, the provisions of or directives issued under the Companies Ordinance, 1984 have been followed.

These condensed interim �nancial statements are unaudited but subject to limited scope review by auditors. These condensed interim �nancial statements do not include all of the information and disclosures required in the �nancial statements, and should be read in conjunction with the Company's annual �nancial statements for the year ended June 30, 2010.

3 SIGNIFICANT ACCOUNTING POLICIES The accounting policies and the methods of computation adopted in the preparation of this condensed interim �nancial report are the same as those applied in the preparation of the �nancial statements for the year ended June 30, 2010.

Certain standards, amendments and interpretations to the approved accounting standards are e�ective for accounting periods beginning on or after July 1, 2010 but are considered not to be relevant or have any signi�-cant e�ect on the Company's operation and are therefore not detailed in this condensed interim �nancial report.

These condensed interim �nancial statements have been presented in Pakistan Rupees, which is the functional currency of the Company.

The preparation of condensed interim �nancial statements requires management to make judgments, estimates and assumptions that a�ect the application of accounting policies and the reported amounts of assets and liabilities, income and expenses. Actual results may di�er from these estimates. The signi�cant judgments made by the management in applying the Company's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the �nancial statements for the year ended June 30, 2010.

4 ESTIMATES

12

(Un-Audited) (Audited) December 31, June 30,

2010 2010 Rupees Rupees

5 PROPERTY AND EQUIPMENTS

Opening written down value 2,936,789 3,464,958Total additions during the period - 111,634Total disposals during the period (56,349) (46,500)Depreciation charge for the period (246,338) (630,070)Depreciation charged on disposal 30,778 36,767Closing written down value 2,664,880 2,936,789

5.1 The additions and disposals were made during the period are given below:-

Additions Disposal Additions Disposal

OwnedComputers - (24,600) 13,200 - Furniture and Fixtures - (12,000) 6,600 - Office equipments - (19,749) 91,834 (45,600)

- (56,349) 111,634 (45,600)

6 LONG TERM INVESTMENTS- Available for sale

In Shares of Quoted Companies(Un-Audited) (Audited)

Dec. 31, June 30, December 31, June 30,2010 2010 2010 2010

Rupees Rupees

43,705 43,705 Standard Chartered Leasing Limited 124,122 93,092 36,168 36,168 Invest Capital Investment Bank Ltd 28,211 30,743

5,000 5,000 Sunshine Cotton Mills Limited 1,650 3,750 153,983 127,585

7 SHORT TERM INVESTMENT- At fair value through profit or loss

(Un-Audited) (Audited)Dec. 31, June 30, December 31, June 30,

2010 2010 2010 2010Rupees Rupees

550,000 550,000 Takaful Pakistan Limited - unquoted - related party 6,600,000 6,600,000 20,000 - The Bank Of Punjab - quoted 196,200 -

Total 6,796,200 6,600,000

Number of shares

- - - - - - - - - - - Rupees - - - - - - - - - - -

Name of Company

June 30, 2010Dec. 31, 2010

Number of sharesName of Company

13



8 TRADE DEBTS

Considered good 46,675,565 51,039,881 Considered doubtful 26,906,165 21,719,448

73,581,730 72,759,329 Provision for doubtful receivables 8.1 26,906,165 21,719,448

46,675,565 51,039,881

8.1 PROVISION FOR DOUBTFUL RECEIVABLES

Balance at beginning of the period 21,719,448 17,179,127 Additional Provision made during the period 5,204,717 4,540,321

26,924,165 21,719,448 Reversal of excess provision (18,000) - Balance at end of the period 26,906,165 21,719,448

9 LIABILITIES AGAINST ASSET SUBJECT TO FINANCE LEASE



Minimum lease payment Upto one year - 302,520 More then one year - -

- 302,520 Financial charges not yet due Upto one year - 4,315 More then one year - -

- 4,315 Present value of minimum lease paymentsUpto one year - 298,205 More then one year - -

- 298,205

Current maturity shown under current liabilities - 298,205

- -

The amount of future payments for the lease and the period in which these payments will become due are:

Effective interest rate of lease is nil (June 30, 2010: 9.04%) per annum.

14



10 COMMITMENTS

For purchase of shares 4,213,784 639,587 For sale of shares 5,028,648 306,258

(Un-Audited) (Un-Audited)Half year ended Quarter ended

December December December December2010 2009 2010 2009

11 PROVISION FOR TAXATIONTaxation for the period 50,000 80,000 35,000 30,000 Prior period (676,679) - - -

(626,679) 80,000 35,000 30,000

12 TRANSACTIONS WITH RELATED PARTIES

(Un-Audited) (Un-Audited)Half year ended Quarter ended

Dec. 31, Dec. 31, Dec. 31, Dec. 31,2010 2009 2010 2009

Rupees Rupees Rupees Rupees

Commission paid to Chief Executive/Directors 21,187 68,277 18,035 22,345 Salary drawn by Director 540,632 466,656 270,316 216,255 Expenses incurred by the Chief Executive / Directors 81,293 192,588 58,237 184,289

The related parties comprise associated undertakings, directors of the Company, key managementemployees and staff retirement benefits. The Company continues to have a policy whereby alltransactions with related parties are entered into at commercial terms and conditions.

Transactions with associated undertakings and key management personnels under the term of theiremployment, are as follows:

15


13 DATE OF AUTHORIZATION FOR ISSUE

14 GENERAL

Figures have been rounded off to the nearest rupee.

These financial statements were authorized for issue by the Board of Directors of the Company onFebruary 25, 2011.

tsbl of directors mr. naveed gilani chairman mr. abdul basit chief executive mrs. neena jaffar...

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