Pakistan Afghanistan Joint Chamber of Commerce & Industry (PAJCCI)

Financial Statements

For the year ended

June 30, 2017

PAKISTAN CHAPTER

%REANDAReanda Haroon Zakaria & CompanyChartered Accountants

AUDITORS'REPORT TO THE MEMBERS

We have audited the annexed balance sheet of PAKISTAN AFGHANISTAN JOINT

CHAMBER OF COMMERCE AND INDUSTRY as at June 30, 2017 and the related

statement of income and expenditure, statement of comprehensive income, statement of cash

flows and statement of changes in net assets (general fund) 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 ofour 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approved accounting standards and the requirements of the repealed Companies Ordinance,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 accounts have been kept by the company as requiied by

the repealed Companies Ordinance, 1984;

(b) in our opinion:

i. the balance sheet and income and expenditure account together wjth the notes

thereon have been drawn up in conformity with repealed Companies Ordinarlce,

1984, and are in agreement with the books of account and are further in

accordance with accounting policies consistently applied;

M

Room No. M1-M4, Mezzanine Floor, Progressive Plaza, Plot No.5-CL-10,Civil Lines Quarter,Beaumont Road, Near Dawood Centre, Karachi-75530 Pakistan.Phone: +9221 35674741-44 | Fax: +92 21 35674745Emai l: info@hzco.com.pk I URL: http://www.hzco.com. pk

%REANDA

the expenditure incurred during the year was for the purpose of the company's

business; and

the business conducted, investments made and the expenditure incurred during

the year were in accordance with the objects of the company;

in our opinion, and to the best of our information and according to the explanations

given to us, the balance sheet, statement of income and expenditure, statement of

comprehensive income, statement of cash flows and statement of changes in net assets

(general fund) together with the notes forming part thereof conform with approved

accounting standards as applicable in Pakistan, and give the information required by the

repealed 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 June 30,2017 and of the

deficit, its comprehensive loss, its cash flows and changes in net assets (general fund)

for the year then ended; and

in our opinion, no Zakatwas deductible at source under the Zakatand Ushr Ordinance,

1980.

ii.

lll.

(c)

(d)

%*"*uaD--*, -at@;<Lc--Reanda Haroon Zakaria & Company

Chartered Accountants

Engagement Partner:Muhammad lqbal

Place: KarachiDated: 29AUG20tI

PAKISTAN AFGIUNISTAN TOINT CHAMBER OF COMMERCE AND INDASTRYBAI,ANCE SHEET

AS AT JUNE 30,2017

2017Rupees

2016

RupeesNote

ASSETS

Non-Current Assets

Property and equipmentIntangible assets

Current Assets

Subscription receivable from First DirectorsAdvances

Cash and bank balances

Total Assets

FUND AND LIABILITIES

General fund

Current Liabilities

Advance subscriptionOther payables

Total Fund and Liabilities

The annexed notes from 1 to 14 form an integral part of these financial statements.

7r5gl,2lg36,384

7,524,0_90

71617,603 7,524,090

275,000

I1,947278

275,000

4,000

1,773,895

2,052,895

9,564,ggl 9,576,985

9,654,926 9,119,175

856,267

788

910,055

392,810

65.000

457,810

9,564,881 9,576,985

Director

PAKISTAN AFGHANISTAN JOINT CHAMBER OF COMMERCE AND INDUSTRYSTATEMENT OF INCOME AND EXPENDITURE

FOR THE YEAR ENDED TUNE 30, 2017

2017 2016Note Rupees Rupees

INCOME

Grant from CIPE

Grant from TAFMembership income

Trade delegation

Profit on short term investmentsIssuance of visa recommendation letterGain on disposal of fixed assets

Other service income

10

8

EXPENDITARE

Salaries and other benefits

DepreciationAmortizationRent

Utilities. Communication and postage

Board meeting expenses

Advertisement and promotionsPrinting and stationeryFee and subscription

Auditors' remuneration

Annual trade conference - TAFTravel and entertainment' Bank charges

Website maintenance charges - TAFMiscellaneous expense

@eficit) / surplus for the year

The annexed notes from I to 14 form an integral part of these financial statements.

l1

5,644,137

678,233

120,000

5,000

I8rl73ro52

1,480,950

901,101

12,127

196,435

77,81620,165

50,334

40,655

2,147,39450,000

2r711,670

398,815

16,462

514,467

19,010

(8,637,401)

_(464,349)(8,019,995)

2,353,496

2,707,8894,853,400

1,630,390

676,296

134,080

220,000

151,336

10,373,3 81

1,282,394

186,960

883,520

31,790

127,366

134,595

5,300

46,130

943,025

65,000

3,593,600

380,169

33,7_30

t6

W Director

lJ)'rL: ''

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i:

l

.,F

PAKISTANAFGHANISTAN TOINT CHAMBER OF COMMERCE AND IND(ISTRYSTATEMENT O F COT,IPREHENSIW INCOME

FOR THE YEAR ENDED TUNE 30,2017

I

1'.l''

2017Rupees

(464,349)

2016

Rupees

2,353,496@eficit) / surplus for the year

Other cornprehensive income for the year

Total comprehensive (loss) / income for the year ______ltf!f!2- 2,353,496

The annexed notes from I to 14 form an integral part of these financial statpments.

President

PAKISTAN AFGHANISTAN TOINT CHAMBER OF COMMERCE AND INDUSTRYSTATEMENT OF CASH FLOWS

FOR THE YEAR ENDED JANE 30, 2017

A. CASH FLOIY FROM OPERATIINGACTIYITIES

@eficit) / surplus for the yearAdjustment for:

Depreciation

Gain on disposal of fixed assets

Amortization

Operating cash inflows before working capital changes

Working capital changes(Increase) / decrease in current assets

Profit accrued on short term investmentsAdvances

Inerease / (decrease) in current liabilitiesUnearned grant income from CIPEAdvance subscriptionOther payables

Net cash generated from / (used in) operating activities

B. CASH FLOW FROM INVESTING ACTIVITIES

Capital expenditure incurredSale proceed from disposal offixed assets

Short term investments matured

Net cash (used in) / generated from investing activities

C. CASH FLOW FROM FINANCINGACTIVITIES

Net decrease in cash and cash equivalents (A+B+C)

Cash and cash equivalents at the beginning of the year

Cash and cash equivalents at the end ofthe year

2017Rupees

(464,349\

901,101

L2,127

908,228

201 6

Rupees

2,353,496

186,960

186.960

443,879 2,540,456

4,000

463,457

tt.2t2456,245

900,124

299,472

(4,000)

(2,458,410)(402,790\

1,101,950)(3,667,678)

(1,127,222)

(1,006,741)

5,000

(7,404,399)

7,500,000

(1,001,741) 95,601

(101,617)

1,773,895

(1,031,621)

2,905,516

1,672,278

The annexed notes from 1 to 14 form an integral part ofthese financial statements.

Director

1,773,895

, l.rl,i :rI rllirl

I

PAKISTAN AFGHANISTAN JOINT CHAMBER OF COMMERCE AND INDASTRYSTATEMENT OF CHANGES IN NET A,S,SET^S . GENERAL FUND

FOR THE YEAR ENDED TUNE 30,2017

RestrictedNet Assels

Balance as at June 30r 2015

Total comprehensive income for the year

Net increase in restricted net assets during the year

Balance as at June 30, 2016

Total comprehensive loss for the year

Net increase in restricted net assets during the year

Balance as at.fune 30,2017 71617,603

The annexed notes from I to 14 form an integral part of these financial statements.

UnrestrictedNet Assets

TotalNet Assets

306,650

7,2r7,440

6,459,029

2,353,496

(7,217,440)

6,765,679

2,353,496

7,524,090

93,513

1,595,095

(464,349)

(93,513)

g,llg,l75

(464,349)

1,037,223 8,654,826

Director

PAKISTAN AFGHANISTAN TOINT CHAMBER OF COMMERCE AND INDUSTRYNOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED JUNE 30, 2017

I LEGAL STATUSAND NATURE OF OPERATIONS

Pakistan Afghanistan Joint Chamber of Commerce and Industry (the Company) was incorporated in Pakistan

on November 18,2011 as a Company limited by guarantee under Section 42 of the repealed Companies

Ordinance, 1984 (now the Companies Ac! 2017). The principal object of the Company is to establish Joint

Chamber and to promote commerce and business relations between Pakistan and Afghanistan. The registered

office of the Company is situated at lst Floor, KCCI Building, Shahrah-e-Liaqat, Karachi.

In the event of the Company being wound up, every member of the Company undertakes to contribute to the

assets of the Company while he is a member or within one year afterwards, for the payment of the liabilities ofthe Company and costs, changes and expenses of winding up and for adjustment of the rights of the

contributories among themselves such amount as my be required but not exceeding rupees ten thousand.

2 BASIS OF PREPARATION

2.1 Statement of compliance

These financial statements have been prepared in accordance with the approved accounting standards, as

applicable in Pakistan. Approved accounting standards comprise of International Financial ReportingStandards for Small and Medium Sized Entities (IFRS for SMEs) issued by lnternational AccountingStandards Board (IASB) and Accounting Standards for Not-For-Profit Organizations (NPOs) issued bythe Institute of Chartered Accountants of Pakistan (ICAP), as are notified under the repealed Companies

Ordinance, 1984, and provisions of and directives issued under the repealed Companies Ordinance, 1984.

In case the requirements differ, the provisions or directives of the repealed Companies Ordinance, 1984

shall prevail.

Considering the practical difficulties faced by the companies to comply with the requirements of the

recently promulgated Companies Act, 2017, Securities and Exchange Commission of Pakistan (SECP),

vide its circular no. 17 of 2017 dated July 20,2017 , has decided that the companies whose financial year

closes on or before June 30, 2017 shall prepare their financial statements in accordance with theprovisions of the repealed Companies Ordinance, 1984.

2.2 Basis of Measurement

These financial statements have been prepared underthe historical cost convention. Further, accrual basis

of accounting is followed except for cash flow information.

2.3 Functional and presentation currency

The financial statements are presented in Pakistani rupees, which is the Company's functional and

presentation currency.

2.4 Use of Estimates and fudgment

The preparation of financial statements in conformity with approved accounting standards requiresmanagement to make estimates, assumptions and use judgments that affect the application of policies and

reported amounts of assets and liabilities and income and expenses. Estimates, assumptions andjudgments are continually evaluated and are based on historical experience and other factors, includingreasonable expectations of future events. Revisions to accounting estimates, if any, are recognizedprospectively commencing from the period of revision.

Judgments and estimates made by the management that may have a significant risk of materialadjustments to the financial statements in the subsequent year are as follows:

Property and equipment

The Company's management determines the estimated useful lives and related depreciation charge for itsproperty and equipment. This also includes estimating the residual values and depreciable lives. Further,the Company reviews the value of the assets for possible impairment on an annual basis. Any change inthe estimates in future years might affect the carrying amounts of the respective items of property andequipments with a corresponding affect on the depreciation charge and impairment.

3 SAMMARY OF SIGNIFICANTACCOUNTING POLICIES

3.1 Property and equipment

These are initially measured at cost. Subsequent to initial recognition these are measured at cost less

accumulated depreciation and impairment loss if any.

Depreciation is charged to income applying straight line method at the rates given in the relevant note.Depreciation is charged on additions from the month when the asset is available for use while nodepreciation is charged from the month of disposal.

Maintenance and normal repairs are charged to income as and when incurred while major improvements,if any, arc capitalized. Gains and losses on disposal of assets are included in the income and expenditureaccount.

The carrying values of tangible fixed assets are reviewed for impairment when event or changes incircumstances indicate that the carrying value may not be recoverable. If indication of impairment existsand where the carrying values exceed the estimated recoverable amount, the assets are written down totheir recoverable amounts.

3.2 Intangible assets

Intangible assets are stated at cost less accumulated amortization and any identified impairment loss.

Amortization is changed to income applying the straight line method at the rate given in the relevant note.Full year's amortization is charged on additions from the month of acquisition, while no amortization is

charged in the month of disposal.

3.3 Cash and cash equivalents

These include cash in hand and bank balances and are carried at cost.

3.4 Other payables

Other payables are carried at cost which is the fair value of the consideration to be paid in the future forservices received, whether or not billed to the Company

3.5 Toxation

The Company is granted tax credit equal to 100% of the tax payable as per section 100C of the IncomeTax Ordinance, 2001.

3.6 Provisions

Provisions are recognized when the Company has a present legal or constructive obligation, as a result ofpast events and it is probable that an outflow of resources embodying economic benefits will be requiredto settle the obligation and a reliable estimate can be made of the amount of obligation.

3.7 Revenue Recognition

- Membership subscription and other income are recognized on occurrence of transactions.

- Service income is recognized at the time when the services are rendered to the clients.

- The Company follows deferral method of accounting for the recognition of contribution. Recognition ofrestricted contribution is deferred till the date when the conditions associated with the contribution havebeen fulfilled by the Company.

Therefore grants are recognized where there is reasonable assurance that the grants will be received andall attached conditions will be complied with. If the grant relates to the expenses, then, it is initiallyrecognized as liability and transferred gradually to income over the period necessary to match the granton a systematic basis to the costs that it is intended to compensate.

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Note

2017

Rupees

9,000

203,511

90,000

302,511(266,127)

36,384

2016

Rupees

9,000

155,000' 90,000

254,000(254,000)

5 INTANGIBLE ASSETS

Domain registration

Website development

Hosting charges

Amortization

Rate %

5.1 Amortizution

Opening

Charge for the year

6 CASHAND BANKBALANCES

Cash in hand

Cash at banks - current accounts

8 ADVANCE SABSCRIPTION

Opening balance

Membership received during the year

Membership income transferred to income and

expenditure account

9 OTHERPAYABLES

Auditor's remuneration payable

Other payables

5.1

330h 33%

254,000

12,127

254,000

266,127 2s4.000

1,672,279 1,773,895

7 GENERAL FUND 8,654,826 9,119,175

7.1 General fund represents the total net assets of the Company. Out of total net assets, assets subject tointernal restrictions amounting to Rs. 7.618 (2016: Rs. 7.524) million representing the total fixed assets

as on the balance sheet date. There are no external restrictions over the remaining net assets.

74,692

1,597,586

2017Rupees

392,810

1,1411690

(678,23?)

856,267

90,499

1,683,396

2016Rupees

795,600

1,227,590

(1,630,380)

392,810

50,000

3,788

65,000

53,788 65,000

Note

2017

Rapees

201 6

Rupees

4,853,40010 GRANT FROM TAF

Salaries and other benefitsFee and subscriptionTravel trade delegation

Website maintenance charges

11 OTHER SERVICE INCOME

10.I 5,644,137

10.1 The Company has extended the existing collaboration with "The Asia Foundation" (TAF - Phase II) forachieving the shared objectives of the "Enhancing Trade and Regional Cooperation between Pakistan andAfghanistan". The grant is for limited time period i.e. (July 2016 - March 2017). This grant was alsogiven to facilitate the Company by expanding its association with allied chambers by co-sponsoring tradeevents (matchmaking, conferences trade promotions & expos etc.) held during the year. This grant wasgiven against the specified expenses which have been incurred and classified in these financial statementsunder the following heads of accounts:

2017

Rupees

618,000

1,goo,ooo

2,711,670

5t4,4675,644,137

2016

Rupees

659,800

600,000

3.593 600

4,853,400

_1-51,336_

11.1 This represents services rendered to various clients / members on account of facilitating them toparticipate in various trade events and providing them with travel and accommodation facilities.

1.725.682

2017

Note Rupees

275,0001,672,279

2016

Rupees

t2 FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

12,1 Financial Instruments by Category

Financial Assets

Subscription receivable from First DirectorsCash and bank balances

Financial LiabilitiesOther payables

275,0001,773,895

1,947,278 2,048,89s

53,788

13 GENERAL

- Number of employees as at June 30, 2017 were a Q0$:3).

- Figures have been rounded offto the nearest Rupees.

14 DATE OF AATHORIZATION FOR ISSUE

These financial statements have been authorized for issue by the Board of Directors of the Company on

-1*--

6s.000