JSCL was incorporated as a public unquoted company on May 4, 1991 under the Companies Ordinance, 19984. JSCL is presently listed on Karachi Stock Exchange. The company is a corporate member of Karachi Stock Exchange and Islamabad Stock Exchange. The principal activities of the company are equity trading, money market transactions, investment advisory and advisory services, underwriting, etc.
Associated companies of JSCL are: (i) Azgard Nine Limited, and (ii) BSJS Balanced Fund Limited; while DCD JS Factor (Private) Limited is a joint venture. The subsidiaries of JSCL as on June 30, 2006 were (i) Jahangir Siddiqui Investment bank Limited, (ii) JS ABAMCO Limited, (iii) Jahangir Siddiqui Capital Markets Limited, (iv) JS Infocom Limited, and (v) Js International Limited. The Overview hereunder is that of JSCL alone, without consolidation with its subsidiaries.
As against authorised capital of Rs 1,500 million (50 million ordinary shares of Rs 10/- each and 100 million preference shares of Rs 10/- each), JSCL's paid up capital as on June 30, 2006 was Rs 350 million (comprising ordinary shares only) which was held by 966 shareholders, of which 914 individuals held nearly 62% shares. Ali Jehangir Siddiqui held 41% shares while Al-Baraka Investment Company Limited held 12% shares. Holding by the Directors (including Ali Jehangir Siddiqui), CEO, their spouses and minor children was 44%. The rest of the shares were held by corporate entities including banks and DFIs.
As per the notice of the next AGM of the company, SECP has granted its approval for the issuance of Class "A" Preference Shares. As one of the conditions, SECP has directed the company to alter its Articles of Association for including specific provisions for conversion of Preference Shares into Ordinary Shares and to incorporate some amendments to the Special Resolution passed on April 29, 2006. The Shareholders at an EOGM of the company held on April 29, 2006 had passed a Special Resolution approving the issue of 70 million Class "A" Preference Shares of Rs 10/- of the aggregate subscription amount of Rs 700 million.
The Directors' Report has a section on Significant Plans and Decisions, according to which JSCL and its subsidiary company, Jahangir Siddiqui Investment Bank Limited, entered into a Framework Agreement with American Express Bank Limited, New York on November 10, 2205 for taking over commercial banking business of American Express Bank in Pakistan. Accordingly a new banking company, JS Bank Limited was incorporated on March 15, 2006. A restricted Banking License was issued to JS Bank Limited by the State Bank of Pakistan on March 23, 2006.
On June 5, 2006, a subscription and shareholders' agreement was executed between JSCL, Global Investment House K.S.C.C., (Global) and Jahangir Siddiqui Capital Markets Limited (JSCM), a subsidiary of JSCL. Under the said agreement, Global has committed to make an equity investment in JSCM to the extent of up to 10,350,000 Ordinary Shares of JSCM at a subscription price of Rs 217 per share. A larger capital base would enable JSCM to grow its brokerage business, open up the offices in different parts of the country / cities, to get retail customers and to compete effectively.
JSCL's total assets experienced 59% growth to Rs 11.509 billion on June 30, 2006 compared to Rs 7.259 billion as on June 30, 2005. Both short term and long term investments more than doubled and largely contributed for the increase in total assets. Current ratio has been above one throughout. On June 30, 2006, debt: equity is 24:76 (2005: 29:71). The increase in assets has been financed through short term borrowings and retention of profits.
JSCL saw 31% increase in total income for year ended June 30, 2006 to Rs 1.754 billion as compared to Rs 1.341 billion for the previous year. Main source of company's income were return on investments (32% of total income) and gain on sale of investments (62% of total income). The company made a provision of Rs 84.821 million for impairment against investment in subsidiaries, etc and booked gain of Rs 187.583 million on account of gain on revaluation of investments. Accordingly, total adjusted income rose to Rs 1.857 billion for 2006 (2005: Rs 1.240 billion).
Operating and administrative expenses for the year under review were Rs 330 million (19% of total income) compared to Rs 157 million (12% of total income) for the previous year. According to the notes to the financial statements, administrative expenses show Rs 102 million (2005: Rs 6 million) as Advisory Fee paid/payable to an individual and a director for advisory services rendered in terms of their respective Advisory agreements duly approved by the Board of Directors. Financial charges for the year under review were Rs 434 million (25% of total income) compared to Rs 170 million (13% of total income) for the previous year, largely due to higher borrowings. The company was easily able to absorb increased expenses on these two counts.
The company closed the year under review with profit after tax at 1.071 billion as compared to Rs 0.905 billion for the previous year. ROE for the year works out to 20% (2005: 25%). The company proposed 25% cash dividend for FY06 (FY05: 25%). JSCL shares these days are quoted around Rs 162.00 as against book value of Rs 153.76 as on June 30, 2006. Comparative performance statistics are given below.
==============================================================
Performance Statistics (Audited) (Rs 000)
==============================================================
Balance Sheet (On June 30) 2006 2005
==============================================================
Total current assets: 6,138,946 5,037,130
Total non current assets: 5,369,956 2,221,549
Total assets: 11,508,902 7,258,679
Total Current Liabilities: 4,386,572 2,103,513
Total capital employed: 7,122,330 5,155,166
Non current Liabilities: 1,740,628 1,490,891
Net assets: 5,381,702 3,664,275
Share capital: 350,000 350,000
Reserves: 5,031,702 3,314,275
Total equity: 5,381,702 3,664,275
Total Liabilities and Equity: 11,508,902 7,258,679
Conting. & Commitments: 127,842 500,306
--------------------------------------------------------------
Ratios:
--------------------------------------------------------------
Current Ratio: 1.40:1 2.39:1
Debt/Equity ratio: 24:76 29:71
Total Investment/Equity-X: 2.05 1.31
Total Liabilities/Equity-X: 1.14 0.98
Book Value per Share-Rs: 153.76 104.69
Market Value/share (15-12-06)- Rs: 162.00 -
Price/Book Value per share-X: 1.05 -
Conting. & Commitments/Equity: 2.4% 13.7%
Income State (Y ended June 30) 2006 2005
Total Income: 1,754,451 1,341,149
Gain on revaluing investment: 187,583 -50,721
Provision, impairment subsidiaries: -84,821 -50,496
Adjusted Total Income: 1,857,213 1,239,932
Financial cost: 434,447 170,248
Administration expenses: 330,210 157,697
Profit before Taxation: 1,092,556 911,987
Taxation: 21,750 6,895
Profit after taxation: 1,070,806 905,092
--------------------------------------------------------------
Ratios: 2006 2005
--------------------------------------------------------------
Stock Dividend: 25% 25%
Cash Dividend: 0% 0%
EPS (end of period capital)-Rs: 30.59 25.86
Price/Earnings Ratio-X: 5.30 -
Operating Profit/Total Income: 62% 68%
After tax profit/Total income: 61% 67%
Return on Equity: 20% 25%
ROA: 9% 12%
ROCE: 15% 18%
--------------------------------------------------------------
Cash Flow Summary (Full Year) 2006 2005
--------------------------------------------------------------
Net Cash flow-Operating: -693,653 -1,349,554
Net Cash Flow-Investing: -1,887,170 -419,365
Net Cash Flow-Financing: 2,581,264 1,750,792
Change in net liquidity: 441 -18,127
Net liquidity at beginning: 47094 65221
Net liquidity at end: 47,535 47,094
==============================================================
COMPANY INFORMATION: Chairman: Mazharul Haq Siddiqui; Chief Executive: Munaf Ibrahim; Director: Syed Nizam Ahmed Shah; Company Secretary: Wajahat Kazmi; Auditors: Ford Rhodes Sidat Hyder & Co, Chartered Accountants; Legal Advisors: Bawaney & Partners; Registered & Head Office: 14th Floor, Chapal Plaza, Hasrat Mohani Road, Karachi 74000; Web Address: www.js.com