Director's Report

The Directors are pleased to present the 12^th Annual Report along with the Auditors' Report for the year ended June 30,2001.

FINANCIAL RESULTS
The Exchange recorded a surplus (before tax) of Rs. 1.47 million which represents a marked improvement over last year's surplus of Rs. 0.90 million. This improvement was the result of 36.90 % increase in gross revenue from Rs. 10.76 million in the year 2000 to Rs. 14.73 million in 2001.
The main source of revenue was fees charged on annual renewals of listings and additional listing fees charged on bonus and right issues of companies listed on the Exchange as well as trading fee received from the Members.
The year under review witnessed a rise of 34.50% in expenditure from Rs. 9.86 million in 2000 to Rs. 13.26 million in 2001. The Major increase took place under the heads depreciation (101%), seminar, meeting & entertainment (111.5%), insurance (80%) and utilities (37.4%). Besides amounts of Rs. 0.66 million and Rs. 0.091 million were also incurred during 2001 towards software maintenance charges and Safe membership fee respectively.

ACHIEVEMENTS DURING THE YEAR
Apart from the financial improvement during the year under review the ISE also made a score of landmark achievements in the areas of development and reformation. On top of the ISE's achievements is the listing of Hubco on our Exchange, a long due demand of our members. This remarkable feat was achieved as a result of personal efforts and interest taken by the Chairman, SECP. Certain Articles were amended to incorporate changes in the mode of nominating non-member Directors, reduction in the tenure of Chairman/Directors, SECP's prior consent to the appointment/renewal/removal of Managing Director. Another couple of vital developments during the year under review brought our Exchange at par with bourses of the developed countries. First, the introduction of T+3 trading system which has replaced the traditional balance order settlement in line with other two Exchanges of the country. Second was the materialization of the National Clearing and Settlement System by incorporation of the National Clearing Company of Pakistan Limited. The integrated system of "Clearing and Settlement" is likely to come on stream by end this year.

CHANGES IN MEMBERSHIP DURING THE YEAR
Following is the list of new members admitted to the Islamabad Stock Exchange during the year under review by way of nomination of the Membership or obtained Membership through bid in open auction of defaulters' seats.
 

LEGAL CASES
a total of 16 legal cases filed by/against ISE which are pending in different courts.

ELECTION OF DIRECTORS AND CHAIRMAN
The Directors and the Chairman retire on the date of Annual General Meeting and election would be held at the AGM in accordance with the provisions prescribed in the Articles of Association of the Islamabad Stock Exchange (Guarantee) Limited.

AUDITORS
The present auditors, M/s S. M. Masood & Co. Chartered Accountants, stand retired and being eligible have offered themselves for re-appointment as auditors of the Exchange for the year 2001-02

ACKNOWLEDGEMENT
The Board of Directors is pleased to place on record its appreciation to Securities & Exchange Commission of Pakistan for their continued guidance and support to the Islamabad Stock Exchange.
The Directors take this opportunity to thank the Members for the confidence and trust reposed in them. The Directors also wish to express their appreciation to the Exchange staff for their dedication and hard work.