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ANNUAL

Audit Report 2015-16

T&T ECHS Telegraph & Telephone Employees Cooperative Housing Society F-17 Islamabad


01

List of Managing Committee

02

02

Balance Sheet

04

03

Income Expenditure Statement

05

04

Receipts and Payments Account

06

05

Fixed Assets Schedule

07

06

Annual Audit Report

09

07

Annexure - C

40


managing committee

T&T ECHS

ANNUAL Audit Report

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As on 30 june 2016

01

Mr. Iftikhar A. Jogezai

President

02

Mr. Muhammad Adnan

Vice President

03

Mr. Azher Ahmed Khan Balouch

General Secretary

04

Mr. Tariq Mehmood

Finance Secretary

05

Mr. Azhar Jokhio

Member Executive Committee

06

Mr. Masood M.Siddiqui

Member Executive Committee

07

Mr. Naveed Rauf Khan

Member Executive Committee

08

Mr. Saleem Akhtar

Member Executive Committee

09

Mr. Ali Arshad Qureshi

Member Executive Committee

Azher Balouch General Secretay

02 T & T EMPLOYEES COOPERATIVE HOUSING SOCIETY (REGD.) ISLAMABAD


Balance Sheet Income Expenditure Statement Receipts and Payments Account Fixed Assets Schedule


BALANCE SHEET

T&T ECHS

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2 0 1 5 - 1 6

As on 30-06-2016

Ref. Report Para

(R u p e e s) 2016

2015

CAPITAL & LIABILITIES Share Capital Accumulated (deficit) / surplus

3 4

1,714,300 (20,144,095) (18,429,795)

1,853,100 (2,944,940) (1,091,840)

Interest in Suspense Members’ Deposits Cost of Land Cost of Development Cost of Under-ground Electrification Escalation charges

5

115,284,840

115,284,840

6.1 6.2 6.3 6.4

1,217,748,870 688,062,306 51,450,292 19,950,156 1,977,211,624

968,421,805 585,459,475 29,260,762 1,583,142,042

Current Liabilities Retention Money Withholding tax payable Cost of land payable Bills Payables Other Liabilities

7.2 7.3 7.4 7.5 7.6

1,215,343 9,415,167 16,365,000 5,457,895 22,353,990 54,807,395

2,382,865 2,746,998 93,637,224 625,072 22,353,990 121,746,149

2,128,874,064

1,819,081,191

12,126,320 (4,704,538) 7,421,782

10,144,293 (3,700,828) 6,443,465

PROPERTY & ASSETS 8

Fixed Assets Cost Less Accumulated Depreciation Land Purchased Development Expenditure Receivable by order u/s 50-A Capital Work in Process (Premium on buyback)

9 10 11 12

1,112,814,540 468,956,769 422,067,500 52,658,333

1,053,161,255 278,098,766 437,857,500 -

Current Assets Advances for purchase of land Advances and receivables Security Deposit Capital Value Tax receivable

13 14 15 16

38,289,000 10,423,472 1,075,000 869,000 50,656,472

11,963,013 26,871,753 75,000 1,000,000 39,909,766

12,337 14,286,331 14,298,668

640,655 2,969,784 3,610,439

2,128,874,064

1,819,081,191

17

Cash and Bank Balance Cash in hand Cash at Bank

The paragraphs of the annexed long form report form an integral part of these financial statements.

Rafiq Shahid

Tariq Mehmood

Azher Balouch

Manager Accounts

Finance Secretary

General Secretay

04 T & T EMPLOYEES COOPERATIVE HOUSING SOCIETY (REGD.) ISLAMABAD


INCOME EXPENDITURE STATEMENT

T&T ECHS

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For The Period Ended on 30.06.2016

(R u p e e s) 30 June, 2016 INCOME

Operational Income Membership Fee Services Charges Transfer Fee Surcharge Possession Charges Construction drawing approval fee

30 June, 2015

77,200 2,315,443 4,272,865 3,561,630 807,033 291,990 11,326,161 331,521 11,657,682

150,000 3,459,207 2,909,875 8,009,363 839,740 15,368,185 1,399,247 16,767,432

5,721,030 5,532,763 4,334,440 1,317,056 1,665,500 16,640 88,190 844,575 86,181 379,186 106,350 193,827 381,336 825,753 976,680 63,890 370,529 713,323 975,000 408,435 17,212 262,866 560,300 286,333 15,861

Balance Brought forward from last year

5,668,552 3,429,000 3,902,560 1,612,000 1,298,018 7,520 214,230 741,235 134,114 203,257 181,000 497,963 409,419 478,015 1,052,295 55,200 177,280 1,891,434 1,275,000 1,435,575 40,518 96,190 1,784,910 600,000 286,584 381,258 1,003,710 28,856,837 (17,199,155) (2,944,940)

697,385 26,840,641 (10,073,209) 7,128,269

Deficit for the year

(20,144,095)

(2,944,940)

Bank Profit

EXPENDITURE Salaries Advertisement Consultancy and professional charges Litigation Charges Petrol Compensation (Ex-Finance Secretary's Widow) EOBI contribution Conveyance charges Entertainment Postage Telephone and talex Computer and photo copies Electricity Printing and stationery Vehicle running Rent rate and taxes Sui gas Repair and maintenance Business promotion Meeting allowance Welfare Bank charges Withholding tax AGM expenses Audit fee Miscellaneous expenses Loss on sale of fixed assets Income tax of prior years Depreciation

The paragraphs of the annexed long form report form an integral part of these financial statements.

Rafiq Shahid

Tariq Mehmood

Azher Balouch

Manager Accounts

Finance Secretary

General Secretay

05 T & T EMPLOYEES COOPERATIVE HOUSING SOCIETY (REGD.) ISLAMABAD


RECEIPTS AND PAYMENTS ACCOUNT

T&T ECHS

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For The Year Ended on 30.06.2016

(R u p e e s) 30 June, 2016

30 June, 2015

RECEIPTS DURING THE YEAR Members Deposit Receivable u/s 50-A Operational & Other Income

281,729,994 15,000,000 11,349,485 308,079,479

342,768,202 16,856,422 359,624,624

29,506,300 65,483,790 91,631,170 4,710,000 1,643,749 73,637,224 5,484,747 6,454,478 2,945,000 4,192,560 1,612,000 560,029 7,520 203,960 741,235 134,114 181,257 181,000 497,963 372,019 350,695 1,052,295 55,200 177,280 1,078,861 1,275,000 1,435,575 39,167 96,190 601,961 600,000 381,258 67,654 297,391,250

275,291,878 38,880,671 34,834,766 3,632,079 3,111,021 5,739,950 3,616,762 6,863,940 469,864 16,640 87,110 844,575 86,181 154,186 106,350 193,827 206,496 334,300 591,480 63,890 190,529 95,216 975,000 158,435 12,978 219,335 560,300 286,333 377,624,092

10,688,229

(17,999,468)

3,610,439

21,609,907

14,298,668

3,610,439

PAYMENTS DURING THE YEAR Land Development Advances for purchase of land & others

Litigation charges and other payments pertaining to u/s50-A

Fixed Assets Creditors liability paid Other Liabilities Salaries Advertisement Consulting & Professional Charges Litigation charges Petrol EOBI Contribution Conveyance Charges Entertainment Postage Telephone & Telex Computer & Photo Copies Electricity Printing & Stationery Vehicle Running Rent Rate & Taxes Sui Gas Repair & Maintenance Business Promotion Meeting Allowance Welfare Bank Charges Withholding Tax deducted by bank AGM Expenses Audit Fee Income Tax of prior periods Mis.Expenses

Surplus/(Deficit) during the year Cash & Bank Balances- Beginning of year Cash & Bank Balances- End of year

Rafiq Shahid

Tariq Mehmood

Azher Balouch

Manager Accounts

Finance Secretary

General Secretay

06 T & T EMPLOYEES COOPERATIVE HOUSING SOCIETY (REGD.) ISLAMABAD


FIXED ASSETS SCHEDULE

T&T ECHS

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2 0 1 5 - 1 6

As on 30-06-2016

Particulars

Building

Furniture & Fixture

Office Equipment

Vehicle

5%

10%

20%

20%

Total

Cost Opening Balance Addition during the year Deletions during the year Closing Balance

4,589,172 4,589,172

3,825,035 40,939 3,865,974

1,027,086 1,856,088 2,883,174

703,000 85,000 788,000

10,144,293 1,982,027 12,126,320

2,108,048 124,056 2,232,104

773,773 309,220 1,082,993

478,247 480,985 959,233

340,760 89,448 430,208

3,700,828 1,003,710 4,704,538

2016

2,357,068

2,782,981

1,923,941

357,792

7,421,782

2015

2,481,124

3,051,262

548,839

362,240

6,443,465

Accumulated Depreciation Opening Balance Depreciation for the Year Adjustments during the year Closing Balance

Written Down Value

Rafiq Shahid

Tariq Mehmood

Azher Balouch

Manager Accounts

Finance Secretary

General Secretay

07 T & T EMPLOYEES COOPERATIVE HOUSING SOCIETY (REGD.) ISLAMABAD


08


ANNUAL

Annual Audit Report 2015-16


ANNUAL REPORT ANNUAL Audit Report

T&T ECHS 2 0 1 5 - 1 6

AUDITORS’ REPORT TO THE MEMBERS We have audited the annexed balance sheet of T&T Employees Co-operative Housing Society (Regd.) Islamabad as at June 30, 2016, the related income and expenditure account and receipts and payments account together with notes forming part thereof (here-in-after referred to as the financial statements for the year then ended). It is the responsibility of the management committee to establish and maintain a system of internal control, and prepare and present the financial statements in conformity with the generally accepted accounting principals and the requirements of the Co-operative Societies Act, 1925. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting policies used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion. Except for the matters stated in our long form report of even date addressed to The Registrar Cooperative Societies Department, Islamabad Capital Territory, Islamabad and to the extent to which these may have an effect on the results and state of affairs of the Society, in our opinion these financial statements present fairly in all material respects the financial position of T&T Employees Co-operative Housing Society (Regd.) Islamabad as at June 30, 2016 and the results of its operations for the year then ended.

Islamabad:

KRESTON HYDER BHIMJI & CO. CHARTERED ACCOUNTANTS (Engagement Partner – Syed Aftab Hameed, FCA)

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Year Ended At 30th June, 2016

HB/16-

October 4, 2016

The Registrar, Co-operative Societies Department, Islamabad Capital Territory (ICT), Islamabad. T&T EMPLOYEES COOPERATIVE HOUSING SOCIETY (REGD.), ISLAMABAD AUDIT OF ACCOUNTS FOR THE YEAR ENDED JUNE 30, 2016 In pursuance to our appointment as auditors of the above named society vide your letter no. 2352/CR/ICT/B dated 30-08-2016 ; we have completed the audit of accounts of this Society for the captioned period. We are now pleased to enclose one copy each of the balance sheet as at June 30, 2016 of the said society and the income and expenditure account for the year then ended. Our comments / reservations on these accounts and related affairs of the society are summarised in the following paragraphs:

1.

THE SOCIETY AND ITS OPERATION The Telegraph and Telephone Employees Cooperative Housing Society was registered with the Co-operatives Societies Department ICT, Islamabad on 25thJanuary, 1981 vide registration no. 4, under the provisions of Cooperative Societies Act, 1925. The main objects of the society are to purchase land, develop it for construction of residential houses and buildings for onward allotment / sale to its members as approved by the executive committee of the society. The area of its operation is restricted to the Federal Territory, Islamabad. The registered office of the society is situated at Apartment No.1 Block A, Abu Dhabi Towers, F-11 Markaz, Islamabad. Nine members Managing Committee elected on 25/6/2014 for three years including President, Vice President, General Secretary, Finance Secretary and five Executive Members to manage the business/affairs of the Society. A list of the present Managing Committee with the relevant particulars is attached as Annexure “A”.

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SIGNIFICANT ACCOUNTING POLICIES 2.1 Basis of preparation These financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) so far as applicable and relevant to such kind of entities, as well as the rules prevalent to the cooperative societies in Pakistan. 2.2 Accounting convention These financial statements have been prepared under the historical cost convention. 2.3 Revenue recognition Revenue from profit on bank deposits and other sources is recognized on receipt basis. 2.4 Expense recognition Expenses are recognized when actually incurred except for the items essentially required to be accounted for on accrual basis. 2.5 Operating fixed assets – tangible These are stated at cost less accumulated depreciation. The depreciation charge is being computed on reducing balance method at the rates specified in the schedule of fixed assets. Depreciation on additions to the fixed asset is charged for the year in which it is purchased, while no depreciation is provided for the year, the asset is disposed of. 2.6 Taxation The society is registered with the Federal Board of Revenue having NTN # 2560594-1 and is regularly filing its Income Tax Returns under the Income Tax Ordinance, 2001. 2.7 Figures Figures in these financial statements have been rounded off to the nearest rupees.

3.

SHARE CAPITAL 3.1 The movement in this account is as under: Particulars Balance at July 01, Add: Receipts during the year Less: Amount Merged in other files Less: Transferred to Annual Charges Balance at June 30,

Rs. 1,714,300 2016

2015

Rupees

Rupees

1,853,100

1,740,500

49,200

112,600

(113,000)

-

(75,000)

-

1,714,300

1,853,100

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3.2 The receipts during the year have been verified from the supporting documents provided to us, and found to be in order. 3.3 Authorized share capital of the society consists of undetermined number of shares of Rs. 1,000 each [Bye-law 17]. 3.4 Share certificates have not been issued to the members so far as issuance of shares certificates is not in practice of the society 3.5 All shares are fully paid up and liability of each member is limited to 10 times of the value of shares purchased by them, [Bye-law 15]. 3.6 Members desiring to have a residential plot will have to purchase shares at the following rates [Bye-law 18]: Size of Plot

Shares to be purchased

Up to 5 Marla

One Share

6 to 10 Marlas

Two Shares

11 to 1 Kanal

Four Shares

More than 1 Kanal but less than 2 kanals

Eight Shares

2 Kanals or More

Ten Shares

3.7 Members desiring to have a Commercial plot will have to purchase shares at the following rates [Bye-law 19]: Size of Plot

Shares to be purchased

Up to 3 Marla

Two Shares

3 to 5 Marlas

Three Shares

More than 5 Marlas

Five Shares

3.8 The shares have not been issued according to the parameters specified in clause 3.5 and 3.6 above; and there-instead only one share is issued to each member notwithstanding the size of plot. 3.9 A proper and computerized members’ register is being maintained by the society. 3.10 Buyback and merger Policy of plots of defaulters The society, through newspaper advertisement published on 27.11.2015 gave an option to its defaulted members to get their files merged with their other files/plots, if any, in order

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avoid the possibility of cancellation of their plots on account of default. Furthermore keeping in view of magnanimous loss, between the rate of plots offered to members, currently in default, and the rate at which the plot is costing the society at current market price of land & development, the society also initiated a buyback plan at 20% premium on area above 500sq yds and 25% premium on area below 500 Sq yds . The approval for buy back was duly obtained from the general body in its 16th Annual General Meeting held on 6th December 2015 under agenda item No. 24, which is reproduced as under: While referring to initial topics of the speech, the General Secretary/GM(Opns) formally asked for the concurrence of the members regarding initiating the development work partially on self-execution basis, installation of camaras on site, adaption of plots buyback policy, laying of PTCL cabling and various options of the future vision of launching its Phase II, affiliation or merger with any private developer or firm of individuals to meet the requirement of the housing industry and to manage its funds shortages in the best interest of the members of the society. The members unanimously approved initiation of development work partially on self-execution basis till finalization of new contractor or extension to present contractor, installation of Camaras at the site, adoption of plots buy back/refund policy, laying of PTCL cabling and the future vision of launching the phase-II, affiliation or merger with any private developer or firm of individuals to meet the requirement of the housing industry and to manage its funds shortages in the best interest of the members of the society. As such, during the year; share money amounting to Rs. 113,000 was transferred to other files/plots as recovery against dues, the detail of which is as under: Sr#

Size of Plot

No. of Plots

1

50x90

62

2

40x80

-

-

3

35x70

7

7,000

4

30x60

44

44,0000

113

113,000

Amount 62,000

3.11 For further detail and comments on this matter, please refer to paragraph 12.3 of this report. 3.12 During the year, the society refunded the amount of 15 commercial files on account of default. The amount of share money @ Rs.5,000 per file amounting to Rs.75,000 was not refunded and adjusted as mandatory deduction by transferring the amount to annual charges account.

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ANNUAL Audit Report

4.

2 0 1 5 - 1 6

ACCUMULATED (DEFICIT)

Rs. (20,144,095)

4.1 The movement in this head of account is as under: Particulars

Note

2016

2015

Rupees

Rupees

(2,944,940)

7,128,269

(16,817,897)

(10,073,209)

Balance at July 01, Less: deficit before income tax Less: Income tax

4.2

(381,258)

Balance at June 30,

-

(17,199,155)

(10,073,209)

(20,144,095)

(2,944,940)

4.2 This represents the amount of income tax deposited by the society against the Notices of demand under section 137(2) of the income Tax Ordinance, 2001 for the following years:

5.

Tax Year

Reference

Dated

2009

DCR No. 77/8

30.06.2015

44,247

2010

DCR No. 78/8

30.06.2015

48,571

2011

DCR No. 79/8

30.06.2015

120,935

2012

DCR No. 80/8

30.06.2015

167,505

Total

381,258

INTEREST IN SUSPENSE

Amount

Rs. 115,284,840

5.1 There is no movement during the year in this account. 5.2 It represents the amount of interest that was being accrued on the investments made by the society in two organizations during the period from 08-06-2001 to 30-06-2011. This amount remained unrecovered since 08-06-2001. However, the interest on these investments was not charged after 30-06-2011, when a legal recourse was initiated by the society against such organizations (for the recovery of investments along with profit) as well as the deposed Managing Committee. 5.3 The corresponding amount of interest accrued until 30-06-2011 was being credited to “retained earnings” through profit & loss account. However, this amount was transferred from “retained earnings” to “interest in suspense account” in the books of account of the society for the year ended June 30, 2013, when the matter of recovery of such interest went into litigation.

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5.4 The interest accrued and recorded for the period from 08-06-2001 to 30-06-2011 was recoverable from the following organizations until the date of this report: 2016

2015

Particulars

Rupees

Rupees

Telecom Support Services (Pvt) Ltd.

71,795,964

71,795,964

Messrs Islamabad Green Acers (Pvt) Ltd.

43,488,876

43,488,876

(115,284,840)

115,284,840

Balance at June 30,

5.5 In terms of order of the Director (Dev & Fin) / Registrar Cooperative Societies, ICT, Islamabad dated 09.06.2016 against Execution Petition for Recovery of Decretal Amount Under Section 50-A of Cooperative Societies Act, 1925 with reference to settlement agreement dated 31.05.2016 between the respondents arrayed at serial No.12, 12-A and 12-E, in the decree passed vide order dated 21.05.2015 and the society, Messrs. Mumtaz Shaheen (through his attorney Mr. Khuram Ameen) and Mr. Akhtar Bhatti, the judgmental debtors who are Directors of M/s. Islamabad Green Acres Pvt Limited have consensually settled their individual principal liabilities @ Rs.7,500,000/- each. However as a good will gesture, the judgmental debtors would resolve the long standing dispute of title since 2003 regarding two commercial shops bearing No. 9 and 10, plot No.20-B, F-7 Markaz Islamabad through their inuence over the title holders of the shops. In lieu of which, the decree holder society has agreed to grant waiver of the interest accrued on the decretal amount except to the extent of a plot owned by Mr. Mumtaz Shaheen in T&TECHS for which the society will get a complete waiver of interest claimed on decretal amount from its members in the AGM. Total & individual per director Liabilities of M/s. Islamabad Green Acres Pvt Limited as on 31.05.2016 is as follows: Total

Individual

Principal

37,500,000

7,500,000

Mark up

68,510,549

13,702,110

5.1 For further detail and comments on this matter, please refer to paragraph 11.5 of this report.

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2 0 1 5 - 1 6

MEMBERS’ DEPOSITS 6.1

COST OF LAND

Rs. 1,217,748,870

a) The movement in this account during the year is as under:

Note Balance at July 01

2016

2015

Rupees

Rupees

968,421,805

671,778,275

183,290,057

254,998,030

Addition: (b)

Amount received from Members during year

-

Adjustment against Legal and Professional Bills

3,780,000

(c)

35,300,000

Adjustment against Purchase of Land

(d)

3,500,000

Adjustment against files merged in

(e)

64,959,014

Less: Refunded during the Year

(f)

(11,139,300)

Less: Adjustment against files merged out

(g)

(26,582,706)

Adjustment against Final bill of Contractor, consultant & others

Balance at June 30,

1,217,748,870

37,865,500 -

968,421,805

b) The amounts received from members during the year were verified from the supporting documents on test basis and found to be in order. c) These represent the adjustment / settlement of final bills of Consolidated Perfect Engineers Pvt Limited and Designmen Consulting Engineers (Pvt) Limited, against the cost of plots allotted to them by the society. d) These represent the adjustment / settlement of the cost of land purchased from the land owners against the cost of plots allotted / sold to them in the society rather than making the actual payments. e) With reference to para 3.10 above, these represent the adjusted amount of cost of land merged in / from other files/plots, as per detail below:

Sr#

Plot Size

No of Plots

Amount

1

50X60

1

10,001,200

2

50X50

2

24,002,600

3

50X90

23

14,693,750

4

40X80

1

368,667

5

35X70

11

5,530,997

6

30X60

43

10,362,000

Total

81

64,959,014

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f) These represent the amounts of 15 files refunded to members during the year. g) With reference to para 3.10 above, these represent the amount of members deposit against cost of land merged out into other files/plots as per their consent..

Sr#

Plot Size

No of Plots

Amount

1

50X90

62

20,159,375

2

35X70

7

1,143,331

3

30X60

44

5,280,000

Total

113

26,582,706

h) For further detail and comments on point “f” & “g” above, please refer to paragraph 12.3 of this report.

6.2

COST OF DEVELOPMENT

Rs. 688,062,306

a) The movement in this account during the year is as under:

Note Balance at July 01

2016

2015

Rupees

Rupees

585,459,475

507,308,209

73,111,831

75,313,766

Addition: Amount received from Members during year

(b)

-

Adjustment against Legal & Professional Bills

(c)

17,357,500

Adjustment against Purchase of Land

(d)

1,594,500

Adjustment against files merged

(e)

10,539,000

Adjustment against Final bill of Contractor &

2,268,000

Developer

Balance at June 30,

688,062,306

569,500

585,459,475

b) Members’ receipts from members were checked with bank books, bank statements and society’s receipts on test check basis and found the same in order. c) These represent the adjustment / settlement of final bills of Consolidated Perfect Engineers Pvt Limited and Designmen Consulting Engineers Pvt against the cost of plots allotted to them by the society. d) These represent the adjustment / settlement of the cost of land purchased from the land owners against the cost of plots sold / allotted to them in the society rather than making payments.

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e) With reference to para 3.10 above, these represent the adjusted amount of Development charges merged from other files/plots, as per detail below;

Sr#

Plot Size

No of Plots

Cost of Land

1

50X90

21

4,200,000

2

40X80

1

473,333

3

35X70

11

220,667

4

30X60

43

5,645,000

Total

76

10,539,000

f) For further detail and comments on point “e” above, please refer to paragraph 12.3 of this report.

6.3

UNDER GROUND ELECTRIFICATION

Rs. 51,450,292

a) The movement in this account during the year is as under:

Note

2016

2015

Rupees

Rupees

29,260,762

Balance at July 01,

-

Addition: Amount received from Members during year

(b)

21,019,530

Adjustment against Ex-Developers

(c)

-

Adjustment against Final bill of consultant

(d)

60,000

Adjustment against Purchase of Land

(e)

150,000

60,000

Adjustment against files merged

(f)

960,000

-

226,800 -

-

Less: Refunded during the Year

Balance at June 30,

28,973,962

51,450,292

29,260,762

b) Members’ receipts were checked with bank books, bank statements and society’s receipts on test check basis and found the same in order. c) These represent the adjustment / settlement of the outstanding bills of the ex-developers of the society against the cost of plots allotted / sold to them in the society. d) These represent the adjustment / settlement of the outstanding bills of the consultant of the society against the cost of plots allotted / sold to them in the society.

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T&T ECHS

ANNUAL Audit Report

2 0 1 5 - 1 6

e) These represent the adjustment / settlement of the cost of land purchased from the land owners against the cost of plots allotted / sold to them in the society rather than making actual payments. f) With reference to para 3.10 above, these represent the adjusted amount of Development charges merged from other files/plots, as per detail below;

Sr#

Plot Size

No of Plots

Cost of Land

1

30X60

43

960,000

Total

43

960,000

f) For further detail and comments on point “e” above, please refer to paragraph 12.3 of this report.

6.4

ESCALATION CHARGES

Rs. 19,950,156

a) The movement in this account during the year is as under:

Note Balance at July 01,

2016

2015

Rupees

Rupees

-

-

Addition: Amount received from Members during year

(c)

16,954,156

-

Adjustment against Purchase of Land

(d)

500,000

-

Adjustment against files merged in

(e)

2,496,000

-

19,950,150

-

Balance at June 30,

b) The society, in line with the approval of General Body in its 15th Annual General Meeting held on 23rd February 2014 under agenda item No. 15, formed a high powered committee of members for evaluating and justifying levy of additional charges on defaulting members of the society. The committee in its report recommended that levy of additional charges on all the members of the society is inevitable and proposed additional charges equivalent to differential market rate ranging between Rs.5,000/- to Rs.7,500/sq.yd. As such the society in its 16th Annual General Meeting held on 6th December 2015 through agenda item No. 12 & 13 levied additional / escalation charges as per following categories: Escalation charges @ Rs.5,000 per Sq.Yd. on all defaulting members including those allotted during 2012-14 at the then prevailing market rate. Escalation charges @ Rs.1,000 per Sq.Yd. on all regular members.

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ANNUAL REPORT

T&T ECHS

ANNUAL Audit Report

2 0 1 5 - 1 6

c) Members’ receipts were checked with bank books, bank statements and society’s receipts sis and found the same in order. d) These represent the adjustment / settlement of the cost of land purchased from the land owners against the cost of plots allotted / sold to them in the society rather than making actual payments. e) With reference to para 3.10 above, these represent the adjusted amount of Development charges merged in from other files/plots, as per detail below;

Sr#

Plot Size

No of Plots

Cost of Land

1

30X60

16

2,496,000

Total

16

2,496,000

f) For further detail and comments on point “e” above, please refer to paragraph 12.3 of this report.

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ANNUAL REPORT

T&T ECHS

ANNUAL Audit Report

7.

2 0 1 5 - 1 6

CURRENT LIABILITIES

Rs. 54,807,395

7.1 The breakup and movement in the accounts grouped under this main heading during the year is given below a) The movement in this account during the year is as under:

Account Head

Note

Balance at 30-06-2015

Net Addition

Net Payments / Adjustments

Balance at 30-06-2016

(Rupees) Retention Money

7.2

2,382,865

1,054,000

2,221,522

1,215,343

Withholding Tax Payable

7.3

2,746,998

6,684,169

16,000

9,415,167

Cost of Land Payable

7.4

93,637,224

16,365,000

93,637,224

16,365,000

11,156,988

6,324,165

Bills Payable

7.5

625,072

Other Liabilities

7.6

22,353.990

-

-

22,353,990

121,746,149

35,260,157

102,198,911

54,807,395

7.2

Retention Money

5,457,895

Rs. 1,215,343

a) It represents the amounts deducted from the running bills of the contractors at the agreed rates, which stands as security for the work done by them. It is to be released after the completion of the maintenance period of the contracts or otherwise as mentioned in the respective agreements executed with the contractors. b) The retention money at the terminal dates was payable to the following contractors, etc.:

Contractors’ Name

2016

Town Planning

Rupees

31,827

Messrs. CPE (Pvt.) Ltd.

-

Messrs. Margalla Engineers

129,516

Balance against final bill of Mian Javed Chargeable against

2015 31,827 2,221,522 129,516

1,054,000

-

1,215,343

2,382,865

Akmal Contractor bill

Total

c) The account of contractors namely Mian Javed and Margalla Engineers are of running nature but the account with Town Planning needs early settlement / adjustment, as also advised by us for early settlement in our last year’s report..

7.3

Withholding Tax Payable

Rs. 9,415,167

It represent the income tax deducted at source amounting Rs.9,415,167 out of the payments made to contractors / employees, which are to be deposited with the government treasury within the prescribed time limit subsequent to the year end. It was, however noted that the tax so deducted was not being deposited into the government treasury within the prescribed period of time, thereby calling for additional tax / penal action.

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ANNUAL Audit Report

7.4

2 0 1 5 - 1 6

Cost of Land Payable

Rs. 16,365,000

a) Party-wise break up and cheques issued against these payable amounts are detailed below: Particular

Cheque No

Date

2016

2015

Amjad Azam S/o Muhammad Amin

31999251

01.07.2015

-

1,000,000

Amjad Azam S/o Muhammad Amin

31999252

01.08.2015

-

950,000

Mian Muhammad Amjad

33978106

12.09.2015

-

20,000,000

Mian Muhammad Amjad

33978104

20.10.2015

-

37,200,000

Qaisar Abbas

32583306

01.08.2015

-

10,000,000

Qaisar Abbas

32583309

15.08.2015

-

10,000,000

Qaisar Abbas

32583310

01.09.2015

-

10,000,000

Qaisar Abbas

32583308

15.09.2015

-

4,487,224

Haji Ghulam Hussain

36735486

24.06.2016

1,700,000

Haji Ghulam Hussain

39748238

15.07.2016

2,800,000

Haji Ghulam Hussain

39748242

15.07.2016

390,000

Haji Ghulam Hussain

36735487

21.07.2016

1,530,000

Saeed Ahmed

38316936

01.06.2016

1,500,000

Saeed Ahmed

38316937

01.07.2016

1,500,000

Saeed Ahmed

38316938

01.08.2016

1,000,000

Malik Muhammad Mumtaz

38316941

01.06.2016

1,310,000

Malik Muhammad Mumtaz

38316942

01.07.2016

1,035,000

Basit Khan

39748245

20.07.2016

400,000

Basit Khan

39748246

20.08.2016

400,000

Basit Khan

39748247

20.09.2016

400,000

Basit Khan

Plot Total

2,400,000 16,365,000

93,637,224

b) These payments were conďŹ rmed from the bank statements of the subsequent period and found to be in order.

23 T & T EMPLOYEES COOPERATIVE HOUSING SOCIETY (REGD.) ISLAMABAD


ANNUAL REPORT ANNUAL Audit Report

7.5

Bills Payable

T&T ECHS 2 0 1 5 - 1 6

Rs. 5,457,895

a) It comprised of:

Particular

2016

2015

Rupees

Rupees

118,212

118,212

Salaries Payable for June

-

490,860

Advertisement expenses payable

-

16,000

Sadat Enterprises/Town Planner

Merged File balance payable

234,400

Final bill of Mian Javed-Contractor

1,509,500

Final Bill of CPE-Contractor

3,595,783

Total

5,457,895

625,072

b) While the salaries for the June 2015 were paid subsequent to June 30, 2015, which have been verified from the underlying record and found to be in order, the remaining amounts were outstanding until the date of this report those require immediate intention of the management for early clearance / adjustment thereof.

7.5

Other Liabilities

Rs. 22,353,990

There is no movement in this account during this year. This amount is appearing in the books of account of the society since 2011-2012 and there is no settlement / adjustment of this amount thereafter. It is explained to us that the Society in its efforts to reconcile the Land Account in the year 2011-12 revealed that the effect of land acquired in previous years amounting to Rs. 23,645,790 have not been properly accounted for in the books of account. Subsequently, an amount of Rs. 1,291,800 was reconciled and the balance amount of Rs.22, 353,990 remained un-reconciled / unadjusted until the date of this report. The reasons for non-reconciliation / non-adjustment were explained that the particulars of land owners were not found tallied with those to whom advance for the purchase of land was given and thus appearing as such in both the accounts i.e. “Other Liabilities (note – 7.6)” and “Receivable By Order Under Section 50-A of the Cooperative Societies Act 1925” (Note – 11.5)”. An early adjustment / reconciliation of this amount is required to have an authentic and updated record of the society’s land and the related accounts.

8.

FIXED ASSETS

Rs. 7,421,782

8.1 The movement and breakup of this account is given in a separate schedule attached as Annexure “B”. 8.2 Society has maintained a proper fixed asset register as required by its Bye-Laws. 8.3 All the additions and deletions made in this head during the year have been verified by us and were found to be in order. 8.4 As mentioned in the audit report of 2014-15, the society is in possession of two shops at F-7, Islamabad having cost of Rs. 4,500,000, which are not being under the use of the society or rented out. We were told that the matter has already been taken up and the society intends to sell these shops, for which approval from members in AGM has also been obtained (please refer to Agenda item No. 11 of 14th AGM held on August 04,2012.

24

T & T EMPLOYEES COOPERATIVE HOUSING SOCIETY (REGD.) ISLAMABAD


FIXED ASSETS SCHEDULE

T&T ECHS

ANNUAL Audit Report

2 0 1 5 - 1 6

Since there were certain technical complications as regard to the sale and transfer of these shops, having been in the name of a society, necessary legal remedies are being taken. Further, the shops have not been given on rent to avoid any further complications, in the best interest of the society. The matter is, however, expected to be resolved soon, as asserted by the society’s sta.

9.

LAND PURCHASED 9.1 The movement in this account during the year is as under:

Balance at July 01 Purchased during the year (Annexure - C) Balance at June 30

Rs. 1,112,814,540 2016

2015

Rupees

Rupees

1,053,161,255

578,590,694

59,653,285

474,570,561

1,112,814,540

1,053,161,255

9.2 During the year, Society has purchased land measuring 45K 1M and 36F along with additional possession of land measuring 38Kanals and 6marlas for Rs. 59,653,285 the breakup of which is tabulated below: 2016 2015 Particular

Rupees

Cost of land

26,490,000

410,558,133

Possession /Qabza Obtained

25,135,000

46,415,000

7,777,085

15,365,738

251,200

2,231,690

59,653,285

474,570,561

Mutation & Zila Council Fee, etc. Other charges Total

Rupees

9.3 The society has purchased land against payments as well as issuance of plots of the society to the land owners, as per detail below: Particular

Rupees

Payments and adjustment of advance

36,998,285

Cost of land payable

16,365,000

Plots issued / adjusted (note 9.5) Total

6,290,000 59,653,285

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2 0 1 5 - 1 6

9.4 The society has purchased land against payments as well as issuance of plots of the society to the land owners, as per detail below: Size in sq. ft.

Type

No

50 x 90

Residential

1

3,590,000

30 X 60

Residential

1

2,700,000

Total

Rupees

6,290,000

9.5 The society has duly obtained approval of the Circle Registrar for purchase of land and sale of Commercial/Mixed used area vide Circle Registrar letter No. 2009/CR/ICT/B dated 27.11.2012 and No. 573/CR/CT/B dated 21.03.2013 along with latest approval no.2282/CR/ICT/B dated 09-10-2015. Besides having approval of the Circle Registrar, the society has also obtained approval of the General Body, in its meeting held on 6th December 2015 under Agenda Item No.7, to purchase land either through sale/allotment of commercial plots/ mixed used area or against hard cash through crossed cheques. The General Body also approved issuance of memberships to land owners/ open market against purchase and possession of land, development work along with all transfers, inclusion and exit of members. 9.6 During the course of our audit on test check basis, it is observed that approvals are available in the shape of resolutions duly passed by the managing committee, supported by mutation record sheets/ inteqaal and agreements with the land owners. 9.7 We have checked land ownership documents of the society on test basis to conďŹ rm that land ownership is in its name of the society.

26 T & T EMPLOYEES COOPERATIVE HOUSING SOCIETY (REGD.) ISLAMABAD


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T&T ECHS

ANNUAL Audit Report

2 0 1 5 - 1 6

10. DEVELOPMENT EXPENDITURE

Rs. 468,956,769

10.1 The movement in this account is as under: 2016

2015

Rupees

Rupees

Balance at July 01

278,098,766

206,711,547

Development expenditure incurred during the year

190,858,003

71,387,219

Balance at June 30

468,956,769

278,098,766

10.2 The detail of the development work carried out and paid for during the year is given below: S. No.

Particulars

Purpose

1

Designmen Consulting Engineers

Consultancy

2

Messrs. Consolidated Perfect Engineers

Development Work

3

Messrs Gul Amin Sub Contractor Earth Filling & Boundary Wall

4

Messrs Saadat Enterprises

5

Capital Development Authority

6

Messrs Margalla Engineers

7

Messrs Khydra Synergy Pvt Limited

Horticulture

8

Pakistan Railways

9 10

Others Messrs IESCO/WAPDA

11

Arrears of Development work Fee & other charges for Revised LOP Electric Poles

2016 Rupees

2015 Rupees

3,800,000

3,480,800

79,554,552

34,105,234

-

1,000,000

-

3,990,234 4,932,261

6,145,831

4,403,929

125,811

1,843,200

Railway/NHA Crossing Misc. Work Demand Note, etc.

33,375,033

14,565,776

7,780,183 5,091,296

3,065,785 -

Various Vendors

23,672,549

12

Construction Material(cement, bricks, steel, sand etc) Contractor/ Sub Contractor

Mian Javed

17,744,325

13

The Urban Solutions Pvt Ltd

14

Vertex International

Consultancy & Supervision Development Work

-

236,116 13,332,307 190,858,003

71,387,219

27 T & T EMPLOYEES COOPERATIVE HOUSING SOCIETY (REGD.) ISLAMABAD


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T&T ECHS

ANNUAL Audit Report

2 0 1 5 - 1 6

10.3 The development expenditure incurred during the year has been verified from the supporting documents on test basis and found to be order. 10.4 Besides core development cost, the site office expenses and guard’s salaries have been accounted for in the development cost being part of development activities at site. 10.5 During the year, consequent upon completion of contract period, the following Consultants/ Developers were disengaged by the society:

• •

Messrs. Designmen Consulting & Engineers Pvt. Limited Islamabad. Messrs Consolidated Perfect Engineers Pvt. Limited.

10.6 During the year, the following Consultants/ Developers were engaged by the society:

• • •

Messrs. The Urban Solutions Pvt. Limited Messrs. Vertex International Pvt. Limited Messrs. Shoukat Ali & Company

10.7 During the year, the following Consultants/ Developers continued to work with the society:

• • • • •

Messrs. Chaghi Enterprises Messrs. Margalla Engineers, Islamabad Messrs. Malik Consulting Engineers Islamabad Messrs. IESCO/ WAPDA Messrs. Royal Enterprises

10.8 Consequent upon completion of contract of the developer, the society has initiated the development work on self-execution basis under the supervision of Messrs The Urban Solutions Pvt. Limited, whereby the material is provided by the society and the labour work is carried out through contractors/ sub-contractors.

11. RECEIVABLE BY ORDER UNDER SECTION 50-A OF THE COOPERATIVE SOCIETIES ACT, 1925

Rs.422,067,500

11.1 As per the order of the Additional Deputy Commissioner (Revenues Exercising Powers of Registrar Cooperative Societies) ICT, Islamabad, vide letter No. 2256/CR/ICT/B dated 21 December, 2010, an FIR bearing no 117/11, dated 12-03-2011 was registered in Police Station Kohsar, Islamabad and a case under section 50-A of the Cooperative Societies Act, 1925 was also filed for the recovery of the embezzled / misappropriated amounts of the Society from some of the members of the Ex-Managing Committee involved in such activities.

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T&T ECHS

ANNUAL Audit Report

2 0 1 5 - 1 6

11.2 The Deputy Registrar Cooperatives, Islamabad passed an order under section 50-A of the Cooperative Societies Act, 1925 on May 21, 2015 and determined a criminal liability amounting to Rs. 438,977,145 along with markup @ 15% until the date of order. The same amount was applied for obtaining decree against the persons held responsible through the above said order of the Deputy Registrar Cooperatives, Islamabad on 23-07-2015, along with a markup @ 15% until the date of such order i.e. 21-05-2015. 11.3 Likewise the society has also entered into an agreement with Haji Ghulam Hussain for supply of land, against which the amount receivable from Haji Ghulam Hussain will be adjusted accordingly. To this effect vide agreement No. 411 dated 13.05.2016 the society has purchased land measuring 7 kanal 8 marla along with additional possession of land measuring 1 Kanal 6 Marla under khasra Nos. 579,581,582,584,585,586 & 587 vide mutation No. 1004 from Muhammad Din S/o Mansab Dar for Rs. 16,670,000/- through Haji Ghulam Hussain. As per terms of agreement a sum of Rs. 5,500,000/- (25% approx. of amount receivable from him u/s. 50-A) has been adjusted as recovery under section 50-A of the Cooperative Societies Act 1925 along with previous adjustment of Rs.2,500,000/- being amount advanced through society’s representative and balance payment was made through crossed cheques. It has been agreed between the society and Haji Ghulam Hussain that for every future purchase the society will adjust the amount receivable under section 50-A from him accordingly, till such time the total recoverable against him will be fully adjusted. 11.4 The society has not accounted for the amount of Rs. 120,172,500 on account of sale of society’s land measuring 114 kanals and 9 marals at the rates lower than the market rate at the material time, which allegation was also decided by the Deputy Registrar Cooperatives, Islamabad in his order dated May 21, 2015 and which amount has also been included in the amounts applied for obtaining the decree. The management of the society is of view that the case has been put before the Honourable Courts for the execution of order u/s 50-A of the Cooperative Societies Act 1925. As such the above said amount cannot be incorporated in the books of account of the society until finalization of the execution of order. In addition to this, the society has also planned to claim the following amounts, which remained un-decided by the Deputy Registrar Cooperatives, Islamabad in his order for want of jurisdiction, by filing application / case in the court of appropriate jurisdiction / Particulars

Rupees

Damages on account of non-purchase of land measuring 600 Kanal

660,000,000

Escalation Charges

825,000,000 1,485,000,000

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T&T ECHS

ANNUAL Audit Report

2 0 1 5 - 1 6

11.5 With reference to para 5.5 above, the current status of the amount receivable under section 50-A is summarized as under:

Sr#

1

Particulars

Receivable against

Receivable as on 30.06.2015

Balance Addition Received/ as on during the adjustments year during the year 30.06.2016 190,827,670

190,827,670

-

37,500,000

-

15,000,000

22,500,000

28,125,000

-

5,500,000

22,625,000

600,000

-

-

600,000

10,169,000

-

-

10,169,000

6,686,814

-

-

6,686,814

1,000,000

-

-

1,000,000

500,000

-

-

500,000

33,000,176

-

-

33,000,176

-

17,114,000

-

115,284,840

-

1,760,000

-

TSSL 2

Receivable against Green Acres

3

Receivable against Ghulam Hussain

4

Receivable against Zaigham

5

Receivable against M A Bokhari

6

Receivable against Sher Bahadur

7

Receivable against Ashaba Powers

8

Receivable against Sardar Sikandar

9

Receivable against Malik Jamil

10

Litigation Charges

11

Interest Accrued

12

Receivable against

14,164,000 115,284,840

2,950,000 1,760,000

Malik Jamil on account of misappropriation of amount deposited by Daughters of Mr. Sher Dil Total

437,857,500

4,710,000

20,500,000 422,067,500

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T&T ECHS

ANNUAL Audit Report

2 0 1 5 - 1 6

11.6 In view of the above, we strongly recommend that vigorous efforts should be made to recover such a huge amount as early as possible for the due benefit to the society and its members.

12. PREMIUM ON BUY BACK

Rs. 52,658,333

12.1 The Society initiated a strategy of buying back recently issued plots of the defaulting members whose plots are in the non-possessed area, either directly or indirectly @ 20% to 25% profit on the cost of the plot or the margin between cost and market value of the plots, as the case may be, and their reissuance to land owners inclusive of premium against purchase of such plots. The same was also got ratified from the General Body in the 16th Annual General Meeting held on 6th December 2015 under Agenda item No. 24. 12.2 Although the society reserves the right to cancel the plots of the defaulters, but in order to avoid unnecessary litigation cost and time, the society is of the view that the buyback option was considered to be more effective. As such plots issued vide Resolution No.128 dated 13.02.2014 were negotiated on buy back/merge option basis and after due deliberations it was agreed between the parties that these plots should be bought back at a premium of 20% to 25% on the cost of the plots to be merged in other plots. Besides having no cash outflow affect, the premium on this transaction will be charged as an asset to be adjusted against future purchase of land from land owners against issuance of these plots inclusive of premium. 12.3 The status of this scheme may be summarized as follows: Files Merged Out Total

30X60

35X70

40X80

50X90

Particulars

50X60

50X50-

No of Files

-

-

62

-

7

44

113

Share Money

-

-

62,000

-

7,000

44,000

113,000

Land

-

-

20,159,375

-

1,143,331

5,280,000

26,582,706

Premium

-

-

36,600,000

-

2,858,333 13,200,000

52,658,333

Total

-

-

56,821,375 Files Merged In

-

4,008,664 18,524,000 79,354,039

50X60

50X50

50X90

40X80

Particulars

2

23

1

10,001,200 24,002,400

14,693,750

368,667

4,200,000

473,333

1

No of Files Land Development

-

-

Electricity Charges

-

-

Annual Charges

-

-

Escalation Charges

-

-

Bills Payable

-

Total

234,400

10,001,200 24,236,800

T & T EMPLOYEES COOPERATIVE HOUSING SOCIETY (REGD.) ISLAMABAD

Total

30X60

35X70

43

81

5,530,997 10,362,000

64,959,014

5,645,000

10,539,000

11 220,667

-

-

960,000

960,000

85,625

-

-

80,000

165,625

-

-

-

2,496,000

2,496,000

-

-

-

18,979,375

842,000

-

234,400

5,751,664 19,543,000 79,354,039

31


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T&T ECHS

ANNUAL Audit Report

2 0 1 5 - 1 6

13. ADVANCE FOR PURCHASE OF LAND

Rs. 38,289,000 2016

2015

Rupees

Rupees

11,963,013

158,277,490

-

(78,877,490)

11,963,013

79,400,000

Add: Advance made during the year

30,125,987

13,463,013

Less: Adjustment made during the year

(3,800,000)

(80,900,000)

Balance at June 30,

38,289,000

11,963,013

Balance at July 01, Less: Amount transferred to “receivable under 50-A order”

13.1 The breakup of this account is as under: Particulars Advance to Siddique Khan Advance to Ashraf Randhawa Advance to Haq Nawaz Advance to Nazir Advance to Mohsin Khan Iftikhar Ahmed ShahidRafique Abdul Qayyum Saleem Raza Azher Ahmed Munawar Khan Tariq Mehmood Rab Nawaz Muhammad Yasin Haji Ghulam Hussain Total-Rupees

Opening Balance

4,000,000 1,000,000 2,000,000 1,500,000 3,000,000 463,013 11,963,013

Amount advanced during the year

Amount transferred to Land account

9,500,000 9,500,000 700,000 400,000 900,000 836,987 600,000 850,000 739,000 5,100,000 1,000,000 30,125,987

2,500,000 1,300,000 3,800,000

Closing Balance Rupees

9,500,000 9,500,000 4,000,000 700,000 1,400,000 2,000,000 1,500,000 500,000 900,000 Nill 600,000 850,000 739,000 5,100,000 1,000,000 38,289,000

13.2 The present management is facing shortage of funds and has entered into agreements with different land owners for purchase of land by issuing token money, by virtue of which the land owners are bound not to sell their land to any other party. As soon as the funds are generated/ arranged, the society will settle these advances against purchase of land.

32 T & T EMPLOYEES COOPERATIVE HOUSING SOCIETY (REGD.) ISLAMABAD


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13.3 The management should take necessary steps for timely adjustment of long outstanding advances against purchase of land to avoid mis-utilization of society’s fund.

14. ADVANCES AND RECEIVABLES

Rs. 10,423,472

14.1 It comprised of:

2016

2015

Rupees

Rupees

Advances to: Staff & For Office Use

2,348,002

1,836,441

Suppliers

8,075,470

24,600,000

10,423,472

26,436,441

-

435,312

10,423,472

26,871,753

Other receivables

13.3 The detail and purpose of advances given to the staff and suppliers / parties is tabulated below: Name

Particulars

Advances to Staff

Amir Hashmi Taimor Minhas Abdul Qayyum Azher Jokhio Azher Baloch Naveed Rauf Muhammad Riaz Haroon Arshad

2016

Advance against Salary Advance against Salary Advance against Salary Advance against Office Expenses Advance against Office Expenses Advance against Office Expenses Advance against Salary Advance against Salary Sub Total

209,000 600,000 500,000 414,095 300,000 24,907 300,000 2,348,002

Unadjusted amount of furniture Unadjusted amount of furniture Advance against installation of CCTV Cameras Advance against advertisement Advance against installation of Gas Lines Advance against Railway & NHA approvals Advance against printing of report etc Advance against computerization Advance against development work Advance against development work Adjustment against cash Advance against supply of steel Sub Total:

300,000 800,000 1,500,000 Nil 334,450 1,000,000 500,000 2,317,930 300,000 1,023,090 8,075,470

2015 21,000 26,000 600,000 500,000 689,441

1,836,441

Advances to Suppliers

National Furnitures Anam Furnitures Sunny Electronics Super Media Communications Chagi Enterprises Royal Enterprises Creative Kiosk Horizon Teletech Innovations Mehrer Liaqat Ali Akmal Abbass Taimoor Mirza Nay Engineering

300,000 800,000 200,000 500,000 1,500,000 21,300,000

24,600,000

33 T & T EMPLOYEES COOPERATIVE HOUSING SOCIETY (REGD.) ISLAMABAD


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Particulars

Name

2016

Other Receivables

ABL ABL

Accrued Profit on Bank Deposit F-11 Branch Islamabad Accrued Profit on Bank Deposit F-7 Branch Islamabad Sub Total: Grand Total:

2015

-

191,987

-

243,325 435,312

10,423,472

26,871,753

14.3 The advances given to staff and parties have been verified with the underlying record and found in order. 14.4 We have noted certain balances as apparent from the above schedule which have no movement in this year, the management should take necessary steps for timely adjustment of these advances to avoid mis-utilization of society’s fund.

15. SECURITY DEPOSIT

Rs. 1,075,000

15.1 It comprised of:

Note

2016

2015

Rupees

Rupees

Balance at July 01,

15.2

75,000

Security deposited during the year

15.3

1,000,000

Less: Adjustment made during the year

15.2

Balance at June 30,

315,000 240,000

1,075,000

75,000

15.2 The amount of security deposit amounting to Rs.315,000 pertaining to financial year 2014-15 comprised of amount paid against office premises hired on rent, out of which Rs.240,000 adjusted against old office premises got vacated last year and Rs. 75,000 paid against the new premises hired on rent. 15.3 During the year the society has entered into an agreement with M/s. The Urban Solutions Pvt Limited against consultancy services and supervision charges of development work carried out by the society on self-execution basis. The amount represents approximate amount of three month’s consultancy and supervision charges.

34 T & T EMPLOYEES COOPERATIVE HOUSING SOCIETY (REGD.) ISLAMABAD


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ANNUAL Audit Report

2 0 1 5 - 1 6

16. CAPITAL VALUE TAX (CVT) RECEIVEABLE

Rs. 869,000

16.1 During the spot audit conducted by the Income Tax Authorities under section 175 of the Income Tax Ordinance, 2001, it was revealed that the society had failed to collect CVT on prescribed rate against transfer of properties/plots. A show cause notice no. WHT Unit-II/2015/940 dated 04.02.2015 for short deposit of Rs. 4,130,560 was served on the society. The society immediately responded and informed all the members who had short deposited the CVT to deposit the amount of tax into the Government Treasury under intimation to it. 16.2 Further, upon examining the list, it was also revealed that few amounts have been inadvertently misreported by the tax authorities, which matter is pending until the date of this report. However, the society has paid a sum of Rs.1,000,000 to the Income Tax Department as interim payment against the short deposit of CVT by the members and has accordingly been shown under the above stated heading. 16.3 A sum of Rs. 131,000 has been recovered from four members during the year. The management should take necessary steps for timely recovery/adjustment of these outstanding balances (Rs. 1000,000 – Rs. 131,000 = Rs. 869,000) to avoid mis-utilization of society’s funds.

17. CASH AND BANK BALANCES 17.1

Rs. 14,298,668

These comprised of:

Particulars Cash in hand

2015

2014

Rupees

Rupees

12,337

640,655

2,273

58,277

14,284,022

2,911,471

36

36

14,286,331

2,969,784

14,298,668

3,610,439

Cash at bank: ABL

F-7 Branch Account No. 8404-9

ABL

F-11 Branch Account No. 1003213660027

Punjab Provincial Co-operative Bank Ltd. Rawalpindi

Balance at June 30,

35 T & T EMPLOYEES COOPERATIVE HOUSING SOCIETY (REGD.) ISLAMABAD


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17.2 We could not physically count the cash in hand as at June 30, 2015, as our appointment was made subsequent to that date. However, a certificate of cash in hand, duly signed by the secretary has also been obtained. 17.3 We have received direct balance confirmations from the above banks; and we have also reconciled the bank balances as appearing in the general ledger and bank statements, provided to us by the society, wherever required.; and found the results in order

18. INCOME AND EXPENDITURE ACCOUNT We have verified the income and expenditure account by employing sampling techniques both statistical and judgmental, and found the result satisfactory. Our comments on major fluctuations in the income and expenses of the year when compared with the last year are summarized below: 18.1 The total income / receipts during the year was Rs. 11,657,682 against which the society has incurred expenses to the tune of Rs. 28,856,837 resulting into a deficit of Rs. 17,199,155 for the year. This deficit could have been avoided applying austerity drive in overall expenses especially in litigation and consultancy charges and taking appropriate measures to increase the revenue. 18.2 The major receipts are from service charges, transfer fee and surcharge and on the other hand the major expenses, mostly fixed in nature, are staff salary / wages, Advertisement, litigation charges and consultancy & professional charges. 18.3 Increases in the expenses when compared with last year are explained as under:

Business and promotion were increased due to Umrah Package of 5 Members who have cleared their dues and remained successful in lucky Draw during 16th AGM vide Agenda Item-16.

Meeting allowances were paid to the members of Managing Committee as per their attendance which have been increased due to increased number of meetings. Per meeting charges are Rs. 12,500 per person per meeting.

Welfare expenses include medical expenses, daughter’s marriage, umrah and incidental death of the dependents of employee.

Electricity expenses were increased due to installation of street lights at site.

AGM and Ground Breaking Ceremony were held in this year therefore all expenses were incurred in the same year.

36 T & T EMPLOYEES COOPERATIVE HOUSING SOCIETY (REGD.) ISLAMABAD


ANNUAL REPORT ANNUAL Audit Report

T&T ECHS 2 0 1 5 - 1 6

We have noted that the major expenses were incurred over litigations, consultancy and professional charges. These expenses were incurred to pursue the cases, heavy payments to the legal counsel and legal coordinator. These expenses should be reduced to avoid the deficit. The members can equally participate in reducing these expenses if the cases are settled at earlier basis. VIOLATION OF BY-LAWS AND GUIDELINES 18.4 Compliance of Guidelines issued by the Registrar vide Circular No.2323/CR/ICT/B dated 29-08-2016 for statutory audit of the cooperatives were checked and found that: a) No internal audit committee was formed by the society. b) The AGM for the year 2014-15 was held on December 06, 2015. c) Procedure laid down in the byelaws for admission of members was followed by the society. d) Society has ownership and possession of the land as per certified land record. e) Development work in the society is being carried out in a transparent manner and PPRA rules and Guidelines were mostly adhered to. f) The society is abiding by the Layout Plan approved by the CDA. In this regard the society has submitted revised/extended LOP with CDA for approval vide letter No. T&TECHS: OPNSD:/15 dated 12.10.15. g) Committees other than the Management Committee are Land Purchase Committee, Development Work monitoring Committee, Members Recovery Committee, Legal Issues Committee, WAPDA and Electrical Work Committee whose deliberations are overseen by the Management Committee (MC) and reported to AGM by the MC. h) Delegation of Powers to officials and segregation of duties of employees are in place. i) Circulation of or otherwise notification of important information for the benefit of members. These notifications are delivered to the members by post and also uploaded over the Website of the Society. j) Suites filed against the society including disputes raised under the Act. A list of cases in this regard is annexed with the report as Annexure-H. We circulated confirmation letters directly to the legal advisors to confirm current status of these cases but no reply received till finalization of this report. k) The Society maintained all books of account as required by the bye-laws. 18.5 As per appointment letter of Managing Committee dated April 23, 2013, it will submit its monthly progress reports to the Registrar. However, we observed that no such progress reports were prepared and submitted to the Registrar during the year, except for a quarterly report submitted to the Registrar in response to his circular no. RCS /01-03 dated March 15, 2016. 18.6 Compliance status of circular no. RCS /01-03 dated March 15, 2016 (Directions u/s 44-D and 44-E of Cooperative Societies Act, 1925 issued by the Registrar Cooperative Societies, Islamabad) has been submitted to the Registrar vide its letter no. T & T ECHS/CR/ICT/25/08 dated August 24, 2016 by the management of Society.

37 T & T EMPLOYEES COOPERATIVE HOUSING SOCIETY (REGD.) ISLAMABAD


ANNUAL REPORT ANNUAL Audit Report

T&T ECHS 2 0 1 5 - 1 6

19. SALES TAX/FED CONTINGENCY 19.1 The Assistant Commissioner, IR Audit & Enforcement Unit-I, Zone-III, Regional Tax Office Islamabad vide letter No. 1649 dated 25.02.2016 issued a Notice U/s 12 read with section 45 of the FED Act, 2005 on account of FED amounting to Rs. 126,505,500/- payable on the developed commercial / residential plots during the period from 01.07.2008 to 30.06.2011. Federal Excise Duty @ Rs. 100 per square yard was required to be paid by the society / property developers prescribed vide S.No. 12(a) of Table-II (Excisable Services) of the Federal Excise Act, 2005 (inserted through Finance Act, 2008 and omitted by Finance Act, 2011). The society has gone into appeal against the order No.4- of 2016 of the Assistant Commissioner (IR) Regional Tax Office, Islamabad communicated vide letter No. 1946 dated 28.03.2016. A recovery notice was also served to the society vide letter No. Enf-I (Zone-III/2016/2246 dated 20.05.2016. Later on the bank accounts of the society were attached and necessary instructions were communicated to the bankers of the society accordingly. The society filed a writ petition before the honorable Islamabad High Court and as per decision, the FBR was directed to hear and decide the pending appeal of the society with in sixty days and forbade taking any coercive measures against the society for recovery of disputed tax liability. Subsequent to the date of audit, FBR withdrew its letter issued to the bankers of the society and the bank accounts were de-attached accordingly. Furthermore the Commissioner Inland Revenue (Appeals-II) Islamabad in his order dated 10.08.2016, remanded the case back to the assessing officer, on the grounds that the order was passed without obtaining and examining facts and demand was raised on assumption. The FBR has also registered the society under Sales Tax Act, 1990 on its own. The society has its reservations on the applicability and correctness, if applicable, of the amount of FED/Sales Tax, for which the matter is under appeal with the FBR and the society is actively pursuing the case through its legal and tax consultants M/s. Aurangzeb Waqar & Co. 19.2 Furthermore the society has also been served with a show cause notice under section 11(2) of the Sales Tax Act, 1990 read with Islamabad Capital Territory (Tax on Services) Ordinance, 2001 and a demand has been raised for Rs. 5,148,000/- as Sales tax on Services due for the period of July 2015 to May 2016 in terms of section 2(9), 3, 6 and 26(1) of the Sales Tax Act, 1990, vide latter No. 2255 dated 23.05.2016. The services provided for specified purposes include fumigation services, maintenance and repair (including building and equipment maintenance and repair including after sales services) or cleaning services,

38 T & T EMPLOYEES COOPERATIVE HOUSING SOCIETY (REGD.) ISLAMABAD


ANNUAL REPORT ANNUAL Audit Report

T&T ECHS 2 0 1 5 - 1 6

janitorial services, dredging or de-silting services and similar services etc. However, the demand rose against the society on account of Janitorial charges per house/ shop per month received by the society. The society has also taken up the matter with the concerned department through its tax consultant, pending decision at the terminal date. 19.3 The matter pertaining to tax with specific reference to cooperative societies is complexed and lacks clarification on various issues. 19.4 We are of the opinion that all these matters must be carefully taken up immediately to avoid legal repercussions and heavy cash out flow.

20. GENERAL 20.1 As per bye-law 40(1), the accounts of society shall be audited internally twice a year, through different qualified accountants. However, no such practice was followed by the Society. 20.2 According to the section 41 of by-laws, the society has not properly maintained register showing the development and timely execution. 20.3 Section 43 of the Bye-Laws says that receipts must be received in the form of pay order / demand draft, but in certain cases cash was being deposited in the bank account of the society. 20.4 We are also enclosing herewith the following documents for your record: Sr.

Particulars

Annexure

1.

Certificate of no amendment in Bye-laws

D

2.

Detail of managing committee meeting

E

3.

List of defaulters

F

4.

List of staff members

G

5.

List of legal cases

H

We are not aware of any other matter of importance that we feel should be reported to you but would be pleased to give any other information and explanations that you may require. Yours truly, KRESTON HYDER BHIMJI & CO. CHARTERED ACCOUNTANTS

39 T & T EMPLOYEES COOPERATIVE HOUSING SOCIETY (REGD.) ISLAMABAD


40


Annex

Annexure -C


T & T EMPLOYEES COOPERATIVE HOUSING SOCIETY (REGD.) ISLAMABAD

6

3

2

1

No.

S.

Total

Through Basit Khan

Din Muhammad

Meherban Khan S/o

Total

Muhammad'

Nazir S/o Din

Amir Khan

Malik Meherban S/o

Total

Amjad

Agreement

3461

3438

02.08.2015

No.24 dated

-

1

1

1

1

4

4

4

4

-

-

18

18

18

18

-

-

-

-

F

2,400,000

2,400,000

-

-

-

-

-

Land

3

3

14

7

7

K

4

4

5

Mian Muhammad

-

-

-

M

Total

-

-

K

5

4266

MSNO 2563

Inteqaal No.

Rustam Khan

Total

Muhmmad Akram

Liaqat S/o

Total

Noor Hussain

Muhammad Riaz S/o

Noor Hussain

Muhammad Riaz S/o

Noor Hussain

Muhammad Riaz S/o

Particulars

-

-

9

9

28

9

19

24

11

13

M

-

-

-

-

-

-

-

F

1,200,000

1,200,000

-

-

3,250,000

3,250,000

2,640,000

270,000

2,370,000

9,120,000

3,590,000

4,530,000

1,000,000

Possession

-

-

-

-

-

-

Council

Zila

49,200

49,200

141,200

141,200

4,419,200

4,419,200

-

-

-

Council

& Zila

Mutation

40,142

40,142

-

202,000

202,000

-

-

-

Others

-

200,000

-

200,000

-

-

-

-

Commission

-

-

-

-

-

-

Charges

Other

-

-

-

-

-

-

Const.

Cost of

Total

3,689,346

3,689,346

341,200

141,200

200,000

4,621,200

4,621,200

3,250,014

3,250,014

2,640,031

270,009

2,370,022

9,120,038

3,590,000

4,530,018

1,000,020

2 0 1 5 - 1 6

ANNUAL Audit Report

Annex "C"

T&T ECHS

List of Land Purchased During The Year


T & T EMPLOYEES COOPERATIVE HOUSING SOCIETY (REGD.) ISLAMABAD

8

7

7

No.

S.

43

Mst

Total

Nishan

T&T & Mst Zaiwar

Total

Ghulam Hussain

Through Haji

S/o Mansab Dar

Muhammad Din

T&T & Saghir Ahmed

Exchange

4350

1004

3465

-

7

-

8

8

-

16 7

-

14

14

-

11

11

M

16

15

15

3

3

T&T & Qaiser Abbass

K

-

4379

3448

Inteqaal No.

Total

Maqsood Khan

Mahmood Khan &

Khani Zaman,

Total

Muhammad Mumtaz

Ahmed & Malik

Through Saeed

Muhammad Hussain

Zaib un Nissa D/o

Hussain &

Muhammad

Rab Nawaz S/o

Particulars

-

-

-

-

-

-

-

-

F

-

16,280,000

16,280,000

-

-

-

7,810,000

7,810,000

Land

-

1

1

-

-

3

3

K

-

-

-

6

6

9

9

M

-

-

-

-

-

F

-

390,000

390,000

-

-

1,500,000

1,500,000

1,035,000

1,035,000

Possession

-

-

-

-

-

-

Council

Zila

97,075

97,075

830,600

830,600

183,400

183,400

158,785

158,785

-

170,625

170,625

Council

& Zila

Mutation

125,000

125,000

679,714

679,714

150,084

150,084

129,940

129,940

-

100,000

100,000

Others

-

-

-

-

-

-

Commission

-

-

-

-

-

-

Charges

Other

-

-

-

-

-

-

Const.

Cost of

Total

222,075

222,075

18,180,321

18,180,321

333,484

333,484

288,725

288,725

1,500,000

1,500,000

9,115,637

9,115,637

2 0 1 5 - 1 6

ANNUAL Audit Report

Annex "C"

T&T ECHS

List of Land Purchased During The Year


T & T EMPLOYEES COOPERATIVE HOUSING SOCIETY (REGD.) ISLAMABAD

10

9

No.

S.

-

F

-

3,300,000

3,300,000

2,700,000

2,200,000

500,000

Possession

Zila

-

-

Council

Grand Total

Plots

Payments

Grand Total

Sub Total-B

Plots

Payments

Others

41

43

41

41

43

43

36

-

36

36

26,490,000

-

26,490,000

-

26,490,000

34

34

34

86

86

86

-

-

-

25,135,000

5,790,000

19,345,000

-

-

-

-

-

-

25,135,000

86

10

34

10

4

10

4

4

10

M

Sub Total-A

26,490,000

-

-

4

K

-

36

-

-

Land

-

41

-

-

F

5,790,000

43

-

-

M

19,345,000

Payments

4155

MSNO 2919

Inteqaal No.

Plots

Sub Total

Total

Others

Akhtar Nawaz

Total

Irshad Zahoor

Particulars

K

-

1,426,880

-

-

-

Others

-

6,050,085 1,426,880

-

6,050,085 1,426,880

-

-

-

-

-

6,050,085 1,426,880

-

6,050,085

-

-

-

Council

& Zila

Mutation

300,000

-

300,000

-

300,000

-

300,000

100,000

100,000

-

Commission

251,200

-

251,200

-

-

-

-

-

251,200

-

251,200

-

251,200

251,200

Charges

Other

-

-

-

-

-

-

Const.

Cost of

2 0 1 5 - 1 6

ANNUAL Audit Report

Annex "C"

T&T ECHS

List of Land Purchased During The Year

59,653,285

5,790,000

53,863,285

-

-

-

59,653,285

5,790,000

53,863,285

351,200

351,200

2,700,000

500,000

Total


MANAGING COMMITTEE CERTIFICATE OF NO AMMENDMENTS MEETINGS

T&T ECHS

ANNUAL Audit Report

2 0 1 4 - 1 5

As on 30 june 2015

DETAILS OF MANAGING COMMITTEE MEETINGS HELD CERTIFICATE OF NO AMMENDMENTS IN BYE LAWS S.No.

Meeting No.

Date

152nd Managing Committee Meeting 01 15.07.2014 This is to certify that no amendments have been made in the model ByeLawsManaging of the Society since its registration / 153rd Committee Meeting 02 09.08.2014 incorporation. 03

154th Managing Committee Meeting

07.09.2014

04

155th Managing Committee Meeting

15.11.2014

05

156th Managing Committee Meeting

05.02.2015

06

157th Managing Committee Meeting

28.02.2015

07

158th Managing Committee Meeting

15.05.2015

08

159th Managing Committee Meeting

23.05.2015

Te l e G a r d e n s , F - 1 7, I s l a m a b a d

Azher Balouch General Secretay

T&T ECHS Flat #1, Ground Floor, Abu Dhabi Tower, F-11 Markaz, Islamabad - Pakistan. T & T EMPLOYEES COOPERATIVE HOUSING SOCIETY (REGD.) ISLAMABAD

T & T EMPLOYEES COOPERATIVE HOUSING SOCIETY (REGD.) ISLAMABAD

Tel: 00 92 51 210 42 44 | Fax: 00 92 51 210 42 45


Audit Report T&TECHS