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CRESCENT LEASING CORPORATION LIMITED
Annual Reports 2002
Contents
Company Information
Shareholders Information
Trend of key financial data
Notice of Annual General Meeting
Directors' Report
Statement of Compliance with best
practices of code of corporate governance
Auditors' Report to the Members
Balance Sheet
Profit & Loss Account
Cash Flow Statement
Statement of Changes in equity
Notes to the Financial Statements
Pattern of Shareholding
Company Information
Board of Directors
Mr. Aftab Ahmad Khan	5*	Chairman
Mr. Javed A. Callea	5*	Chief Executive
Mr. Feroz-ud-din A. Cassim	4*	Director
Mr. Mahmood Ahmed	2*	Director
Mr. Nessar Ahmed	1*	Director
Mr. Raza Mirza	3*	Director
Mr. Rashid Ahmed	5*	Director
Mr. Saeed Jamal Tariq	3*	Director
Audit Committee
Mr. Feroz-ud-din A. Cassim	Chairman
Mr. Raza Mirza	Member
Mr. Saeed Jamal Tariq	Member
Corporate Secretary
Mr. Asif Haider Mirza
Auditors
Husain Rahman
Chartered Accountants
Legal Advisor
Cornelius Lane & Mufti		Advocates & Solicitors
Credit Rating Agency
		Long Term	Short Term
JCR - VIS		A+	A1
PACRA	\	A	A1
Banks & Lending Institutions
Askari Commercial Bank Ltd.
Bank of Khyber
CDC Group PLC, UK
Habib Bank Ltd.
Muslim Commercial Bank
National Discounting Services Ltd.
Pak-Kuwait Investment Co. (Pvt.) Ltd.
Saudi Pak Industrial & Agricultural Investment Co. (Pvt.) Ltd.
Swiss Development Agency
Small Business Finance Corporation
Union Bank Ltd.
United Bank Ltd.
Head Office
B-801 & 802, 8th Floor, Lakson Square Bidg. # 3,
Sarwar Shaheed Road, Karachi.
Tel: 021-5661938, 48,58 Fax: 021-5661988
UAN: 111-667788
E-mail: crescent@super.net.pk
cresleas@cyber. net. pk
Website: www.creslease.com
Branch Offices
Lahore      Suit No. F-7 (B) 1st Floor, Rehman Business Suites, 32-B-III, Gulberg-lll, Lahore.
Tel: 042-5717415-6 Fax: 042-5717417 Mobile: 0300-8455710, E-mail: cresleas@nexlinx.net.pk
Islamabad   Mezzanine Floor, 52-E, Dodhy Plaza, Jinnah Avenue, Blue Area, Islamabad
Tel: 051-2824866 Fax: 051-2271157, Mobile: 0303-7758022, E-mail: cresleas@isb.paknet.com.pk
Registered and share transfer office
2nd Floor, 131-A, E/1, Main Boulevard Gulberg-lll, Lahore
Tel: 042-5712036, 5710759 Fax: 042-5712446, E-mail: tariqaleem@hotmail.com
* Number of board meeting attended during the year
• For a copy of this report write to our Head Office/Registered Office
Trend of key financial data
		2002	2001	2000	1999	1998	1997
		RUPEES IN MILLIONS
Balance Sheet
Stock Holders Equity		413	381	338	308	295	255
Current Liability		763	490	383	384	230	153
Current Assets		817	546	491	530	387	320
Total Assets		1,678	1,138	975	1,008	827	711
Income Statement
Lease Income		172	133	116	119	106	89
Total Revenue		261	194	174	172	155	97
Financial Expenses		134	115	109	115	92	48
Total Provisioning		42	11	10	9	8	-
Profit Before Taxation		56	46	34	31	41	37
Profit After Taxation		52	42	31	30	40	36
Financial Indicators
Profit after tax ratio		20.00%	21.80%	17.70%	17.20%	26.00%	37.40%
Price earning ratio		2.71	3.27	3.63	3.8	3.3	3.52
Return on capital employed		23.60%	21.00%	17.80%	17.10%	26.80%	24.30%
Market value per share (Average price)		6.4	6.25	5.05	5.07	6	5.79
Debt Equity Ratio		75:25	67:33	65:35	69:31	64:36	64:36
Current Ratio		1.07	1.11	1.28	1.38	1.68	2.09
Times Interest Coverage ratio		1.42	1.4	1.31	1.27	1.45	1.78
Earning per share		2.36	1.91	1.39	1.33	1.82	1.64
Return on Equity		12.68%	11.10%	9.09%	9.60%	13.61%	14.27
Book value per share		18.65	18.92	19.62	17.84	19.69	17.01
Gross Lease Disbursements		747	508	333	332	276	244
Statement of Value added and how distributed
Value Addition (RS. in million)
				2002	2001
TOTAL				68	54
• Employees as remuneration				16	12
• Government as taxes				4	3
• Shareholders as dividends				33	15
• Retained within the Business				15	24
Notice of Fifteenth Annual General Meeting
Notice is hereby given that the 15th Annual General Meeting of the company will be held at 2nd Floor,
131 A-E/1, Main boulevard, Gulberg-lll, Lahore on Monday, October 28, 2002 at 12:00 Noon to transact
the following business:
ORDINARY BUSINESS
1. To receive, consider and adopt the audited accounts of the company for the year ended June 30,
2002 together with Directors' and Auditors' Reports thereon.
2. To approve the payment of Cash Dividend to the shareholders at the rate of Re.1 per share of
Rs. 10/- each and the issue of Bonus Shares in proportion of one share for every twenty shares held
i.e. 5% for the year ended June 30, 2002.
3. To appoint auditors and fix their remuneration.
SPECIAL BUSINESS
4. To consider and if deemed appropriate, approve alteration in the relevant clause of Articles of
Association of the company to incorporate the change in the fee of Directors for attending the Board
Meeting.
A statement under section 160(1) (b) of the Companies Ordinance, 1984 and the draft of the resolution
proposed to be considered by the shareholders at the Annual General Meeting of the company as
required by section 164(1) of the Companies Ordinance, 1984 are enclosed.
By Order of the Board
Karachi
August 12th, 2002
Asif Haider Mirza
Corporate Secretary
Statement under section 160(1 )(b) of the Companies Ordinance, 1984 in respect of Special Business
and draft resolution.
Item No. 4 of Agenda- Alteration in Articles of Association (Revision in fee of Directors for attending
the board meeting.)
Material facts concerning the special business to be transacted at Annual General meeting and the
proposed special resolution related thereto are given below.
Material Facts
Approval of shareholders is required for amendment in the clause 109 of the Articles of Association
which relates to the " Remuneration of Directors" in order to incorporate the revision in fee paid to
Directors for attending the Board Meeting as recommended by the Board of Directors of the company.
For this purpose, it is intended to propose the following resolution to be passed as special resolution:
Draft of the resolution.
"Resolved that, the following amendment in Articles of Association be and is hereby approved:
In Article 109 under the heading " Remuneration of Directors" after the word "exceed" at the end of
the first line of the paragraph the words " Rs 500 and a " be replaced by the words " Rs 2,500 or any
amount approved by the shareholders in their meeting from time to time."
Further resolved that the Company Secretary and the Chief Executive be authorized, either singly
or jointly to do all acts, deeds, sign and execute all documents necessary in this regard.
The Directors are interested to the extent of the fee payable to them individually.
Notes:
1.  Closure of share transfer books
The Members register will remain closed from 22nd October, 2002 to 28th October 2002 (both days inclusive). Transfers received
in order at the Registered Office by the close of business hours on 21st October, 2002 will be treated in time for the entitlement
of Bonus Shares and Cash Dividend.
2.  Participation in general meeting
A member eligible to attend and vote at this meeting may appoint another member as proxy to attend and vote in the meeting.
Proxies in order to be effective must be received by the company at the registered office not later than 48 hours before the time
of holding the meeting.
3.  Change in address
Shareholders are requested to notify the change of their addresses, if any, at our registered office.
1.   CDC account holders will further have to follow the under mentioned guidelines as laid down in circular No. 1 dated 26th January,
2000 of the Securities and Exchange Commission of Pakistan for attending the meeting:
i)   In case of individuals, the account holder or sub-account holder and /or the person whose securities are in group account; and
their registration details are uploaded as per the regulations, shall authenticate his/her identity by showing his original National
Identity Card (NIC) or original passport at the time of attending the meeting. The shareholders registered on CDS are also required
to bring their Participants I.D. Numbers and account numbers in CDS.
ii)   In case of corporate entity, the Board of Directors resolution /power of attorney with specimen signature of the nominee shall
be produced (unless it has been provided earlier) of the meeting.
Annual General Meeting
Your Directors have pleasure In presenting the Audited Accounts for the year ended June 30, 2002.
The financial results of the company for the period under review are summarized as follows:
Financial Results				2002	2001
Revenue				261,399	193,633
Expenditure				163,106	137,484
Operating Profit before provisions				98,293	56,149
Provisions				42,169	10,538
Profit before taxation				56,124	45,611
Taxation				3,770	3,350
Profit after taxation				52,350	42,261
Un-appropriated Profit brought forward				5,879	6,259
Profit available for appropriation				58,229	48,521
Appropriations:
Transfer to:
- reserve under NBFI regulation				10,470	8,452
- reserves for deferred taxation				-	19,058
- reserves for issue of bonus shares				11,069	15,131
- proposed cash dividend @ 10% (2001: Nil)				22,138	-
Net profit for the year after charging all expenses, including allowance for potential lease losses and
provisions amounted to Rs 52.350 million. This is higher by 19.27 percent than previous year profit
of Rs 42.261 million.
DIVIDEND
The Board of Directors have recommended to declare a 10% cash dividend & 5% bonus shares for the
year ended 30th June, 2002.
ECONOMIC SCENARIO
The occurrence of the September 11 and subsequent events along with the tension on our eastern
borders overshadowed the year under review. The business climate thus remained subdued. The
external sector, however, gained strength on account of higher remittances, favourable debt reprofiling
and increased foreign inflows. The foreign exchange reserves thus exceeded six billion dollars for
the first time. Weak investment demand on the other hand promoted a highly liquid market and
declining interest rate regime. During the period under review, the leasing industry experienced
the start of consolidation phase largely driven by the regulatory requirement of enhanced capital
base. The commercial banks, on the other hand aggressively, entered the leasing business, given the
magnitude of their financial resource and the lack of leasing regulatory framework on them, this has
created a un-level playing field in the leasing sector.
OPERATING RESULTS
Your company continued with its strategy of positioning itself in the emerging scenario of consolidations
in the leasing industry. The marketing focus continued to be on entities and sectors with low risk
profile, with emphasis on auto leasing and consumer leasing. New leases written during the period
increased by 47 percent and were placed at Rs 747 million in comparison to Rs 508 million written
in the previous period. The net investment in leases thus stood at Rs 1,290 million as on June 30,
2002 an increase of 34.6 percent over the previous year figure of Rs 958 million. Lease income during
the period amounted to Rs 171.60 million compared with Rs 132.915 million of previous year showing
an increase of 29.1 percent. Income from other business activities was placed at Rs 89.798 million
significantly better than comparable figure of Rs 60.718 million for the previous year showing an
increase of 47.9 percent. The increase in other income is largely reflective of the realization of the
gain on sale of securities and dividends accruing on investments. Your company was thus able to post
a net profit after taxation and provisions of Rs 52.350 million surpassing the previous year's figure
by Rs 10.09 million or 19.22 percent.
The post tax earning per share is placed at Rs 2.36.
The business policy of your company continued to focus on market penetration with quality risks and
better client service for a broader client base. SMEs, vehicle leasing and consumer finance continues
to be the focus area where increased market penetration is targeted. Eight hundred and thirty five
new contracts were added in consumer finance during the period.
The risk profile of your company remained at prudent levels. The average lease size (excluding
consumer finance) is placed at Rs 1.840 million as against Rs 1.731 of last year. Exposure in a single
industrial sector (textile) does not exceed 19.7 percent compared with 19.1percent in textile sector
last year. The remaining exposure is spread over twelve sectors of the economy.
Plant and machinery remained the major leased asset of the total portfolio at 69 percent followed
by vehicles at 27 percent and remaining being in office and other equipment. Concerted efforts on
follow-up and recovery were undertaken during the period particularly in the backdrop of weak
business environment. The recovery position was thus held at 95 percent.
Your company made its maiden issue of TFCs amounting to Rs. 250 million during the period. The
TFC assigned A+ rating by PACRA was well received and was over subscribed by Rs. 11.78 million.
In respect of resources, the company attracted Rs. 91.5 million more in its COI scheme than the
previous year figure of Rs.157.28 million. It also broad based its financial relationship with premier
financial institutions and raised Rs. 70 million in long-term finance and Rs. 636 million in short-term
finance to expand its operations.
The entity rating of your company is placed at A for long term and A1 for short term by PACRA. The
rating assigned by JCR-VIS are A+ for long term and A1 for short term. These rating denote a low
risk profile for the company.
The company recognizes the need for development of an efficient human resource base. To achieve
this the company places emphasis on the important aspects of an efficient human resource  base
i.e. business environment compatible training, merit based reward system and interactive organizational
structure. Out of 22 operational personnel 18 attended various training and seminars during the
period. Leasing proposals having an unfavourable impact on environment were generally avoided
during the period.
FUTURE OUTLOOK
The global fallout of the 9/11 event and the crisis in corporate America has hurt the investment
sentiment and consumer confidence the world over. In our region this has been further hurt by the
border tension resulting in weak business conditions for the current year. The year also being an
election year, could result in reduced economic activity in the pre and post election period. Fiscal
2003 thus poses acute challenges for the business environment in general and for the financial sector
in particular. The balance of payment position is likely to remain comfortable in the current year.
The weak economy may however impact the government revenues which in turn would reduce
development expenditure. The kick start of the economy is likely to remain doubtful, Sectorally,
the demand for plant and machinery for leasing is likely to remain flat. Emphasis is likely to shift
towards new products in consumer finance and on operating leases to benefit from better risk profiling
available in these products. Demand for vehicle leasing is expected to stabilise as a sizeable base
has been established and requisite employment growth in eligible consumers may not be available
to sustain higher levels. Demand for consumer durables is likely to sustain given the trend of emerging
life styles. Pricing of business risks would continue to be intensely competitive given the increasing
competition from commercial banks. This would not only affect the margins but the credit risk as
well. The windfall capital gains and dividend income is not likely to repeat itself in the current year.
Your company intends to continue with its strategy of market penetration. This is planned to be
achieved through increased focus on quality financing in SME sector, auto leasing and consumer
financing. To achieve the above objective the market reach of the company would be extended
through opening of two more branches in Hyderabad and Gujranwala. The product of web based
marketing launched last year lacked attraction; this is targeted to be addressed this year to make
it more attractive.
CORPORATE GOVERNANCE
The board of directors of the company held five meetings (attendance is on page # 2)during the year
to review operations discuss and formulate policy matters. The Board on a quarterly basis also
reviewed the operational performance of the company. The Board considered and approved the
business plan and budgets for the ensuing year. An Audit Committee was constituted during the
period comprising of three non-executive directors. The Audit Committee held three meeting during
the period under review. The Audit Guideline, Audit Manual and Audit Plan recommended by the
Audit Committee were approved by the Board of Directors.
STATEMENTS
a) The financial statements, prepared by the management of the listed company, present fairly its state of affairs, the results
of its operations, cash flows and changes in equity.
b) Proper books of account of the listed company have been maintained.
c) Appropriate accounting policies have been consistently applied in preparation of financial statements except for the change
stated in note 2.5.1(b) with which external auditors have concurred and accounting estimates are based on reasonable
and prudent judgement.
d) Applicable International Accounting Standards and relevant directives from the regulating bodies have followed and any
departure therefrom if any has been adequately disclosed.
e) The value of investments in provident & gratuity funds are Rs. 6.112 million and Rs. 1.072 million respectively.
f) There was no trading in company shares by directors, chief executive, chief financial officer & company secretary and
their spouses and minor children during the year.
g) The system of internal control is sound in design and has been effectively implemented and monitored.
h) There are no doubts upon the listed company's ability to continue as a going concern.
i) There has been no material departure from the best practices of corporate governance, as detailed in the listing regulations.
TREND OF KEY OPERATING AND FINANCIAL DATA*
	2002	2001	2000	1999	1998	1997
Total Income	261	194	174	172	155	97
Profit after tax	52	42	31	29	40	36
Earning Per Share	2.36	1.91	1.39	1.33	1.82	1.64
Total Assets	1,678	1,138	975	1,008	835	711
Networth	413	381	338	308	295	255
Cash Dividend	10.00%	-	-	10.00%	-	15.00%
Stock Dividend	5.00%	10.00%	16.67%	-	15.00%	-
Total Payout	15.00%	10.00%	16.67%	10.00%	15.00%	15.00%
ACKNOWLEDGMENT
The Board acknowledges the support of the regulatory authorities, banks and lending institutions. IT
Board also appreciates the dedication and hard work of the company personnel.
AUDITORS
The auditors Husain Rahman, Chartered Accountants retire and being eligible offer themselves f(
reappointment.
PATTERN OF SHAREHOLDING
The pattern of shareholding as on June 30, 2002 is annexed to this report.
On behalf of the Board
Review report to the members on statement of compliance with best
practices of code of corporate governance
We have reviewed the Statement of Compliance with the best practices contained in the Code of
Corporate Governance prepared by the Board of Directors of Crescent Leasing Corporation Limited
(the Company) to comply with the relevant Listing Regulations of the Karachi, Lahore and Islamabad
Stock Exchanges where the Company is listed.
The responsibility for compliance with the Code of Corporate Governance is that of the Board of
Directors of the Company. Our responsibility is to review, to the extent where such compliance can
be objectively verified, whether the Statement of Compliance reflects the status of the Company's
compliance with the provisions of the Code of Corporate Governance and report if it does not. A
review is limited primarily to inquiries of the Company personnel and review of various documents
prepared by the Company to comply with the Code.
As part of our audit of financial statements we are required to obtain an understanding of the
accounting and internal control systems sufficient to plan the audit and develop an effective audit
approach. We are not required to consider whether the Board's statement on internal control covers
all risks and controls or to form an opinion on the effectiveness of such internal controls, the
Company's corporate governance procedures and risks.
Based on our review, nothing has come to our attention which causes us to believe that the Statement
of Compliance does not appropriately reflect the Company's compliance, in all material respects,
with the best practices contained in the Code of Corporate Governance.
Chartered Accountants
Karachi.
Auditors' Report to the Members
We have audited the annexed balance sheet of Crescent Leasing Corporation Limited as at June 30,
2002 and the related profit and loss account, cash flow statement and statement of changes in equity
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 of our 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 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 statement. 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 required by the Companies
Ordinance, 1984;
(b)    in our opinion:
(i) the balance sheet and profit and loss account together with the notes thereon have been drawn up in
conformity with the Companies Ordinance, 1984, and are in agreement with the books of accounts and
are further in accordance with accounting policies consistently applied;
except for the change as stated in note 2.5.1(b) with which we concur:
(ii) the expenditure incurred during the year was for the purpose of the company's business; and
(iii) the business conducted, investments made and the expenditure incurred during the year were in
accordance with the objects of the company;
(c)    in our opinion and to the best of our information and according to the explanations given to us, the
balance sheet, profit and loss account, cash flow statement and statement of changes in equity together
with the notes forming part thereof conform with approved accounting standards as applicable in
Pakistan, and, give the information required by the 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,
2002 and of the profit, its cash flows and changes in equity for the year then ended; and
(d)    in our opinion, no Zakat was deductible at source under the Zakat and Ushr Ordinance, 1980.
Balance Sheet
ASSETS			Notes	2002	2001
				Rupees	Rupees
OPERATING FIXED ASSETS			3	20,957,972	15,171,229
NET INVESTMENT IN LEASES AND
INSTALMENT LOANS
Instalment contract receivables				1,291,275,087	991,751,747
Add: Residual value				234,612,035	165,496,647
Gross instalment contract receivables				1,525,887,122	1,157,248,394
Less: Unearned finance income				235,763,601	198,753,881
Net investment			4	1,290,123,521	958,494,513
Less: Current maturity				441,538,638	376,917,718
Allowance for potential lease losses - General				39,278,750	24,041,688
- Specific				16,612,370	6,093,376
				497,429,758	407,052,782
				792,693,763	551,441,731
LONG-TERM INVESTMENTS			5	43,151,301	23,385,400
LONG TERM LOAN			6	2,101,701	—
LONG-TERM DEPOSITS, PREPAYMENTS
AND DEFERRED COSTS			7	1,506,570	2,081,504
CURRENT ASSETS
CURRENT MATURITY OF NET INVESTMENT			4	441,538,638	376,917,718
CURRENT MATURITY OF LONG TERM LOANS			6	212,032	—
SHORT-TERM FINANCES			8	835,630	2,254,911
SHORT-TERM INVESTMENTS			9	268,517,510	90,205,047
SHORT-TERM PLACEMENTS			10	37,862,169	16,000,000
ADVANCES, DEPOSITS, PREPAYMENTS
AND OTHER RECEIVABLE			11	39,545,574	36,969,629
CASH AND BANK BALANCES			12	28,851,022	23,847,761
				817,362,575	546,195,066
				1,677,773,882	1,138,274,930
As at June 30, 2002
			Notes	2002	2001
				Rupees	Rupees
SHARE CAPITAL AND RESERVES
AUTHORISED CAPITAL
30,000,000 (2001: 30,000,000) Ordinary shares
ofRs. 10/- each				300,000,000	300,000,000
ISSUED, SUBSCRIBED AND PAID-UP CAPITAL			13	221,381,330	2,012,557,501
RESERVES				188,707,655	179,479,953
				410,088,985	380,735,703
SURPLUS/DEFICIT ON REVALUATION OF SECURITIES			14	2,817,126	-
				412,906,111	380,735,703
DEFERRED INCOME			15	-	158,649
REDEEMABLE CAPITAL			16	290,065,979	133,108,575
LONG-TERM CERTIFICATES OF INVESTMENT			17	17,521,674	5,587,000
LIABILITIES AGAINST ASSETS SUBJECT
TO FINANCE LEASES			18	3,785,489	3,074,036
LONG-TERM DEPOSITS			19	190,699,671	125,549,698
CURRENT LIABILITIES
CURRENT MATURITY OF LONG-TERM LIABILITIES			20	162,056,645	213,493,761
CURRENT MATURITY OF LIABILITIES
AGAINST ASSETS SUBJECT TO FINANCE LEASES			18	1,242,035	2,151,167
SHORT-TERM CERTIFICATES OF INVESTMENT			17	175,594,390	150,425,000
SHORT-TERM FINANCES			21	350,000,000	55,700,000
RUNNING FINANCES UNDER MARK-UP
ARRANGEMENTS			22	20,425,605	36,348,323
CREDITORS, ACCRUED AND OTHER LIABILITIES			23	31,338,150	31,943,018
PROPOSED CASH DIVIDEND				22,138,133	-
				762,794,958	490,061,269
COMMITMENTS			24
				1,677,773,882	1,138,274,930
The annexed notes form an integral part of these financial statements.
Profit and Loss Account
For the year ended June 30, 2002
				2002	2001
			Note	Rupees	Rupees
Income from lease operations				171,601,596	132,914,854
Income on investments			25	86,984,045	56,434,342
Other Income			26	2,813,536	4,283,699
				261,399,177	193,632,895
Financial charges			27	133,659,501	114,799,815
Administrative and operating expenses			28	29,446,307	22,683,833
				163,105,808	137,483,648
Operating profit before provisions				98,293,369	56,149,247
Allowance for potential lease losses - General				152,370,621	67,304,231
- Specific				10,518,994	1,530,660
Provision against Pakland TFC				15,588,000	-
Provision against Central Excise duty				886,461	-
Provision for doubtful finance				-	2,215,246
(Reversal)/Provision for diminution in value of investments				(61,623)	61,623
				42,168,894	10,537,952
Profit before taxation				56,124,475	45,611,295
Taxation			30	3,774,000	3,350,000
Profit after taxation				52,350,475	42,261,295
Unappropriated profit brought forward				5,878,797	6,259,269
Profit available for appropriation				58,229,272	48,520,564
Appropriations:
Transfer to:
- reserve under NBFIs rules				(10,470,095)	(8,452,259)
- reserve for deferred taxation				-	(19,058,183)
- reserve for issue of bonus shares				(11,069,067)	(15,131,325)
- proposed cash dividend @ 10% (2001: Nil)				(22,138,133)	-
				(43,677,295)	(42,641,767)
Unappropriated profit carried forward				-	5,878,797
Earnings per share - Basic			31	2.36	1.91
- Diluted				N/A	N/A
The annexed notes form an integral parts of these financial statement.
Cash Flow Statement
For the year ended June 30, 2002
				2002	2001
				Rupees	Rupees
Cash flows from operating activities
Profit before taxation				56,124,475	45,611,295
Adjustments for:
Amortization of deferred income				(158,649)	(158,664)
Depreciation				3,806,554	2,913,729
Financial Charges				133,659,501	114,304,765
Allowance for potential lease losses				25,756,056	8,261,083
Provision against Pakland TFC				15,588,000	-
Provision against Central Excise Duty				886,461	-
(Reversal)/provision for diminution in value of investment				(61,623)	61,623
Provision for doubtful finance				-	2,215,246
Gain on sale of operating fixed assets				(168,848)	(22,900)
Operating profit before working capital changes				235,431,927	173,186,177
Increase in creditors, accrued and other liabilities				2,527,696	1,418,328
(lncrease)/decrease in advances, deposits, prepayments and
other receivables				(3,887,987)	9,899,307
Cash generated from operations				234,071,636	184,503,812
Income taxes paid				(3,348,419)	(2,483,956)
Financial charges paid				(136,015,535)	(104,362,293)
Net cash flows from operating activities				94,707,682	77,657,563
Cash flows from investing activities
Increase in net investment in leases and instalment loans				(331,629,008)	(193,595,869)
Purchase of operating fixed assets				(7,423,412)	(677,452)
Proceeds from sale of operating fixed assets				553,981	206,300
(Purchase)/sale of long-term investments				(35,673,930)	8,882,736
(Purchase) /sale of short-term investments				(197,834,914)	4,330,005
Increase in long-term deposits,
prepayments and deferred costs				(201,596)	(165,300)
Increase in long-term loan				(2,313,733)	-
Decrease in short-term finances				1,419,281	1,491,208
Net cash used in investing activities				(573,103,331)	(179,528,372)
Cash flows from financing activities
Increase in redeemable capital				101,963,844	64,850,290
Increase in long-term deposits				68,681,417	17,963,379
Increase certificates of investment				37,129,064	81,812,000
lncrease/(decrease) in short-term finances				294,300,000	(49,300,000)
Decrease in liabilities against assets subject to finance leases				(2,752,697)	(2,282,512)
Payment of dividend				-	(53,505)
Net cash flow from financing activities				499,321,628	112,989,652
Net increase in cash and cash equivalents				20,925,979	11,118,843
Cash and cash equivalents at the beginning of the year				(12,500,562)	(23,619,405)
Cash and cash equivalents at the end of the year (Note A)				8,425,417	(12,500,562)
Note A. Cash and cash equivalents at the end of the year
Cash and bank balances				28,851,022	23,847,761
Running finances under mark-up arrangements				(20,425,605)	(36,348,323)
				8,425,417	(12,500,562)
Statement Of Changes In Equity
For The Year Ended June 30, 2002
	Reserve
				Capital			Revenue
	Issued,	Premium on	Reserve	Reserve	Reserve
	subscribed	issuance	for	under	for issue of	General	Reserve	Un		Surplus/deficit
	and paid-up	of	deferred	NBFI's	proposed	reserve	for doubtful	appropriated	Total	on Revaluation
	capital	right shares	taxation	'rules	bonus shares		debts	profit		of securities	Grand Total
	Rupees
Balance as
at June 30, 2000	172,500,000	4,994,250	33,031,751	38,896,826	28,755,750	43,800,000	10,236,562	6,259,269	165,974,408	-	338,474,408
Net profit for
the year	-	-	-	-	-	-	-	42,261,295	42,261,295	-	42,261,295
Transfer from
profit and
loss account	-	-	19,058,183	8,452,259	-	-	-	(27,510,442)	-	-	-
Issue of bonus	28,755,750	-	-	-	(28,755,750)		-	-	(28,755,750)	-	-
shares
Proposed Issue of	-	(4,994,250)	-	-	20,125,575	' -	-	(15,131,325)	-	-	-
bonus shares
Balance as
at June 30, 2001	201,255,750	-	52,089,934	47,349,085	20,125,575	43,800,000	10,236,562	5,878,797	179,479,953		380,735,703
Prior period
adjustment to
absorb fair value
depreciation	-	-	-	-	-	-	-	(859,065)	(859,065)	-	(859,065)
Restated as at
June 30, 2001	201,255,750	-	52,089,934	47,349,085	20,125,575	43,800,000	10,236,562	5,019,732	178,620,888	-	379,876,638
Net profit for
the year	-	-	-	-	5	-	-	52,350,475	52,350,480	-	52,350,480
Issue of
bonus shares	20,125,580	-	-	-	(20,125,580)	-	-	—	(20,125,580)		-
Transfer from
profit and loss
account	-	-	-	10,470,095	-	-	-	(10,470,095)	-	-	-
Increase in
fair value of
available for sale
investments	-	-	-	-	-	-	-	-	-	2,817,126	2,817,126
Proposed issue of
bonus shares	-	-	-	-	11,069,067	-	-	(11,069,067)	-	-	-
Proposed cash
dividend	-	-	-	-	-	-	-	(22,138,133)	(22,138,133)	-	(22,138,133)
Balance as
at June 30, 2002	221,381,330	-	52,089,934	57,819,180	11,069,067	43,800,000	10,236,562	13,692,912	188,707,655	2,817,126	412,906,111
Notes to the Financial Statements
For the year ended June 30, 2002
1.   LEGAL STATUS AND NATURE OF BUSINESS
Crescent Leasing Corporation Limited (the company) is incorporated in Pakistan as a public
limited company under Companies Ordinance 1984, on April 7, 1987. The company commenced
commercial operations in August 1989, and is listed on all Stock Exchanges in Pakistan. Its prime
business is leasing, and it is classified as a Non-Banking Financial Institution (NBFI) by the State
Bank of Pakistan and is regulated by the Securities and Exchange Commission of Pakistan, under
the Leasing Companies (Establishment & Regulation) Rules 2000.
2.   SIGNIFICANT ACCOUNTING POLICIES
2.1   Basis of preparation
These financial statements have been prepared in accordance with the requirements of
Companies Ordinance 1984 and International Accounting Standards (lASs) as applicable in
Pakistan.
2.2 Accounting convention
These financial statements have been prepared under the historical cost convention except
for the revaluation of certain financial instruments.
2.3  Operating fixed assets and depreciation
(a)  Owned assets
Fixed assets are stated at cost less depreciation to date. Depreciation is charged to income
by applying reducing balance method. Full year's depreciation is charged on acquisitions during
the year while no depreciation is charged on fixed assets disposed off during the year.
As per the company's policy, depreciation on assets given to employees is charged to income
by applying the straight-line method. Depreciation on such additions is charged from the month
in which the asset is put to use and on disposals in the month in which disposal is made.
Normal repairs and maintenance are charged to income as and when incurred. Subsequent to
initial recognition, expenditure on fixed assets is capitalised only when the expenditure improves
the condition of assets beyond its originally assessed standard of performance.
Gains and losses on disposal of fixed assets, if any, are included in income currently. However,
gains on sale and leaseback transaction that results in a finance lease, is deferred and amortised
over the lease term.
(b)   Assets subject to finance leases
These are stated at the lower of present value of minimum lease payments and fair value of
assets acquired on lease. Assets so acquired are depreciated over the shorter of the lease term
or its useful life. Financial charges are allocated to accounting periods in a manner so
as to produce a constant periodic rate of charge on the outstanding liability.
2.4  Deferred costs and amortisation
Deferred costs are written off during a period not exceeding five years commencing from the
year when such costs are incurred.
2.5  Financial instruments
Financial assets and financial liabilities are recognised on the company's balance sheet when
the company has become a party to the contractual provisions of the instrument.
2.5.1 Investments
a) Initial measurement
Investments in securities are recognised on a trade-date basis and are initially measured
at cost.
Subsequent measurement
Held-to-maturity
These are securities with fixed or determinable payments and fixed maturity that the
company has the positive intent and ability to hold to maturity and are measured at
amortised cost, less any impairment loss recognised to reflect irrecoverable amounts.
Held-for-trading
These are securities which are either acquired for generating a profit from short-term
fluctuation in prices or dealer's margin, or are securities included in a portfolio in which
a pattern of short-term profit taking exists.
Held-for-trading investments are measured at subsequent reporting dates at fair value.
Unrealised gains and losses are included in the net profit or loss for the period.
Available-for-sale
These are investments that do not fall under held-for-trading or held-to-maturity.
Available-for-sale investments are measured at subsequent reporting dates at fair value.
Unrealised gains and losses are recognised directly in equity, until the security is disposed
off or is determined to be impaired.
b) During the year, the company has changed its policy for recording of repo and reverse repo
transactions. Previously the securities sold subject to repurchase agreements (repo) were
. derecognised and securities purchased under agreement to resell (reverse repo) were
recognised as securities in the financial statements. The difference between the sale and
repurchase price was treated as mark- up/return earned and expensed.
From the current year, the securities sold subject to repurchase agreements (repo) are
retained in the financial statements as investment and the counterparty liability is included
in borrowings from financial institutions. Similarly the securities purchased under agreement
to resell (reverse repo) are included in short-term placements. The difference between
sale and repurchase price is treated as mark-up/return earned and expensed.
Had the policy not been revised the total assets and liabilities of the company would have
been lowered by Rs. 200 million.
2.6      Taxation
(a)   Current
Current tax is the expected tax payable on the taxable income for the year using tax
rates prescribed by the tax law and after incorporating tax credits or adjustments
available, if any.
(b)   Deferred
Deferred tax is provided using the balance sheet liability method providing for
temporary differences between the carrying amount of assets and liabilities for
financial reporting purposes and the amount used for taxation purposes.
A deferred tax asset is recognised only to the extent that it is probable that future
taxable profits will be available and credits can be utilised. Deferred tax assets are
reduced to the extent that it is no longer probable that the related tax benefit will
be realised.
2.7  Foreign exchange transactions
Transactions in foreign currencies are accounted for in Pak rupees at the rate of exchange
ruling on the date of transactions. Monetary assets and liabilities in foreign currencies are
translated into rupees at the rate of exchange at the balance sheet date.
Net exchange differences arising due to hedging mechanism are accounted for as deferred
revenues/costs as the case may be and are credited/amortised to income over the term of the
underlying transactions or five years whichever is shorter.
2.8   Off-setting
A financial asset and a financial liability is off-set and the net amount reported in the balance
sheet if the company has a legally enforceable right to set-off the recognised amounts and
also intends either to settle on a net basis, or to realise the asset and settle the liability
simultaneously.
2.9 Employees' retirement benefits
The Company operates funded Gratuity Scheme for its permanent employees whose period of
service is five years or more. Provision is made annually to cover obligation under the Scheme.
In addition, the Company operates a Provident Fund Scheme for its permanent employees.
Equal monthly contributions are made to the Fund both by the company and the employees,
at the rate of 10 percent of basic salary.
2.10 Revenue recognition
2.10.1 Finance lease and instalment loans
The Company follows the 'financing method' in accounting for recognition of lease and instalment
loan income.
At the commencement of a lease, the total unearned lease income consists of the excess of
aggregate lease contract receivables over the cost of the leased equipment. At the time a lease
is executed, a portion of unearned lease income which approximates the initial cost directly
associated with negotiating and consummating the lease plus an amount equal to the allowance
for potential lease losses is taken into income. The remainder of the unearned lease income
is taken into income over the term of the lease, applying the annuity method, so as to produce
a systematic return on the net investment.
Front end fee and other lease related income is recognised as income when realised.
2.10.2 Deposits and securities
Return on deposits and securities are recognised on a time proportion basis.
2.10.3 Dividend income
Dividend income is recognised when the right to receive dividend has been established.
2.10.4 Capital gain
Capital gains or loses arising on sale of investments are taken to income in the period in which
they arise.
2.11 Allowances for doubtful balances and potential lease losses
The allowances for doubtful balances and potential lease losses is maintained at a level, which
in the judgment of management is sufficient to provide for and that is reasonably anticipated.
The allowances would be increased by the provision charged to income and would be decreased
by charge off, net of recoveries.
The recognition of annual charge / income of such amount is taken to the profit and loss
account.
2.12 Cash and cash equivalents
Cash and cash equivalents comprises of cash on hand, demand deposits and short-term highly
liquid investments that are readily convertible to known amounts of cash and which are subject
to an insignificant risk of changes in value.
3. OPERATING FIXED ASSETS
		Cost			Depreciation
								Written down	Depreciation
		As on	Additions/	As at	As on	For the	As at	value as at	Rates
		July1,	(deletions)	June 30,	Juty1,	year/(on	June 30,	June 30,	%
		2001		2002	2001	deletions)	2002	2002	per annum
		Rupees
TANGIBLE
Owned
Office premises		12,133,827	4,881,510	17,015,337	3,326,459	684,444	4,010,903	13,004,434	5
Furniture and fixtures		1,360,573	377,633	1,738,206	914,389	225,429	1,139,818	598,388	15, 25 & 33.33
Motor vehicles		1,141,857	1,204,500	2,149,857	866,186	328,749	1,034,493	1,115,364	20, 25 & 33.33
			(196,500)			(160,442)
Office equipment		2,641,819	959,769	3,601,588	1,907,580	484,637	2,392,217	1,209,371	15 & 33.33
		17,278,076	7,423,412	24,504,988	7,014,614	1,723,259	8,577,431	15,927,557
			(196,500)			(160,442)
Leased
Furniture and fixtures		373,387	-	373,387	250,875	122,512	373,387		33.33
Motor vehicles		6,686,000	2,519,000	7,215,000	2,569,387	1,280,136	2,208,598	5,006,402	20, 25, & 33.33
			(1,990,000)			(1,640,925)
Office equipment		2,842,608	36,018	2,878,626	2,173,966	680,647	2,854,613	24,013	33.33 & 50
		9,901,995	2,555,018	10,467,013	4,994,228	2,083,295	5,436,598	5,030,415
			(1,990,000)			(1,640,925)
2002		27,180,071	9,978,430	34,972,001 1	2,008,842	3,806,554 1	4,014,029	20,957,972
			(2,186,500)			(1,801,367)
2001		24,938,680	3,620,452	27,180,071 1	0,290,774	2,913,729 1	2,008,842	15,171,229
			-1,379,061			-1,195,661
3.1  The following assets were disposed off during the year :
Description		Cost	Written	Sale	Mode of	Particulars of
			Down	proceeds	Disposal	Purchaser
			Value
		RUPEES
Motor vehicle		196,500	36,058	150,000	Insurance	EFU General
					claim	Insurance, Karachi
Motor vehicle		277,000	65,095	86,560	Negotiation	Lt. CMDR (R)
						Mazaruddin, Karachi
Motor vehicle		313,000	143,980	177,421	Negotiation	Nighat Sajid,
						Karachi
Motor vehicle		1,400,000	140,000	140,000	Negotiation	Rao Hamad All
						Khan, Karachi
4. NET INVESTMENT IN LEASES AND INSTALMENT LOANS
		2002			2001
		Gross			Gross
		Instalment	Unearned	Net	Instalment	Unearned	Net
		contract	finance	investment	contract	finance	investment
		receivables	income		receivables	income
		Rupees
Not later than one year		569,748,657	128,210,019	441,538,638	487,542,869	110,625,151	376,917,718
Later than one year and
not later than five years		956,138,465	107,553,582	848,584,883	648,607,267	80,420,264	568,187,003
Later than five years		-	-	-	21,098,258	7,708,466	13,389,792
Total 1		1,525,887,122	235,763,601	1,290,123,521	1,157,248,394	198,753,881	958,494,513
5. LONG-TERM INVESTMENTS				2002 Rupees	2001 Rupees
Available for sale investments
In associated undertakings (Note 5.2) Others (Note 5.3 )				3,770,000	41,250,001
				8,078,301	19,260,400
				11,848,301	23,385,400
Held to maturity investment
Proposed issue of Pakland Term Finance Certificates (Note 5.4)				31,303,000	-
				43,151,301	23,385,400
5.1	Breakup of fair value - Available-for-sale investments
As at July 1, 2001					2002 Rupees
- as originally stated (cost)					23,385,400
- prior period adjustment to absorb fair value depreciation					-1,622,320
Fair value as at July 1, 2001 (restated)					21,763,080
Disposed during the year
Increase in fair value					-11,217,070
					1,302,291
Fair value as at June 30, 2002
					11,848,301
5.2 In associated undertakings
		Note	Place of	Principal	2002	2001
			incorporation	activity	Rupees	Rupees
			and operation
. Listed
100,000(2001: 100,000)
ordinary shares of Rs.10/- each
of Trust Investment Bank Ltd.		5.2.1	Pakistan	Investment
Holding 1 percent				Bank	645,000	1,000,000
(2001: 1 percent) of the
paid-up capital of the bank.
• Unlisted
312,500(2001: 312,500)
ordinary shares of Rs. 10/- each
of International Housing		5.2.2	Pakistan	Housing	3,125,000	3,125,000
Finance Ltd. Holding				Finance
2.5 percent (2001: 2.5 percent)
of the paid-up capital of
the company.					3,770,000	4,125,000
5.2.1 Market value as at June 30, 2002 is Rs. 645,000 (2001: Rs. 1,300,000). ^H
5.2.2 The carrying value approximates the fair value. ^^1
5.2.3 Had these investments been accounted for using the equity method, the value of investment on R^B
the basis of latest available audited financial statements for the year ended June 30, 2001 of the B^B
investees and the effect on profit and loss account would have been as follows: R^B
				2002	2002
				Value of	Effect on
				investments	profit
				under equity
				method
				Rupees	Rupees
Trust Investment Bank Ltd.				1,440,370	440,370
International Housing Finance Ltd.				3,549,573	424,573
				4,989,943	864,943
5.3	Others
				2002	2001
				Rupees	Rupees
2002	2001	Listed
No. of ordinary
shares of Rs. 10 each
-	505,000	Pakistan Telecommunication Limited		-	10,987,070
699,420	719,420	Meezan Bank Limited		8,078,301	8,273,330
				8,078,301	19,260,400
5.3.1 Aggregate market value of these shares was Rs. 8.078 million (2001: Rs. 17.34 million).
5.4  Proposed issue of Pakland Term Finance Certificates
		Series A	Series B	Total
		Rupees
Proposed issue of Pakland TFC		32,803,000	14,088,000	46,891,000
Provision against doubtful debt		(1,500,000)	(14,088,000)	(15,588,000)
		31,303,000	-	31,303,000
A scheme of proposals for the compromise of debts and rehabilitation of the operations of Pakland
Cement Ltd. (PCL) has been agreed between PCL, sponsor shareholders of PCL, and its majority
creditors under section 284, 285, 286 and 288 of the Companies Ordinance, 1984.
Under this scheme two series of TFCs namely series "A" and "B" are proposed to be issued.
The "A" series of TFCs contains principal portion of the amount agreed by PCL to be payable to
creditors.
The "B" series of TFCs contains the component of profit/markup on the principal portion of the
amount agreed by PCL to be payable to the creditors.
Accordingly the company has transferred its lease exposure in Pakland Cement Ltd. into the proposed
TFCs issue. However for prudence the classification status of the company has been maintained which
is reflected in this note and in 11.2
6. LONF TERM LOAN - Secured , Considered good
				2002	2001
				Rupees	Rupees
Loan to executive (Note 6.1)				2,313,733	-
Less: Current maturity				212,032	-
				2,101,701	-
Recoverable after three years				1,645,009	-
Others				668,724	-
6.1  Loan to executive represents house loan in accordance with the house building facility for employees.
The loan is repayable in 120 monthly instalments and carries a variable mark-up rate based on State
Bank of Pakistan (SBP) discount rate prevailing on the last day of a calendar year minus 5% with
no floor and no ceiling. The loan is secured by equitable mortgage on the property by depositing
the title documents of the property with the company.
Maximum amount due from executive at the end of any month during the year aggregate Rs. 2.52
million.
7.  LONG-TERM DEPOSITS, PREPAYMENTS AND DEFERRED COSTS
				2002	2001
				Rupees	Rupees
Long-term deposits				1,506,570	1,296,805
Prepayments				-	8,169
Deferred costs (Note 7.1)				-	776,530
				1,506,570	2,081,504
7.1  Deferred costs
		As on July	Addition/	As at June	Amortis;	ition	Unamortised
		01 ,2001	(deletion)/	30, 2002	For the year	As at June	Balance as at
			(Transfer)			30, 2002	June 30, 2002
		RUPEES
Fund utilisation
(Note 7.1.1)		27,380,582	-	27,380,582	-	-	-
Others		1,448,078	-	1,448,078	-	-	-
2002		28,828,660	-	28,828,660	776,530	-	-
2001		28,828,658	-	28,828,658	5,476,117	28,052,128	776,530
7.1.1 Fund utilisation represents expenses incidental to foreign currency finances, which were adjusted
against possible recoveries or charged off as part of cost of borrowing.
8. SHORT-TERM FINANCES - Secured
				2002	2001
				Rupees	Rupees
Considered Good
Finance against certificates of investment
(note 8.1)				385,633	432,357
Pro-note discounting facility (note 8.2)				449,997	1,130,331
Short term loan				-	692,223
				835,630	2,254,911
Considered Doubtful
Short term loan (note 8.3)				4,430,491	4,430,491
Provision against doubtful debt				(4,430,491)	(4,430,491)
				-	-
				835,630	2,254,911
8.1  This represents short-term loan facilities given to individuals secured by way of lien on Certificates
of Investment issued by the company and carries mark-up at the rate of Rs. 0.44 and Rs. 0.48 per
Rs. 1,000 per day respectively.
8.2 This represents short-term facilities given to firms against mortgage on properties and carries a
mark-up at the rate of Rs. 0.66 per Rs. 1,000 per day respectively.
8.3  This represents short-term loan facility given to a company against first charge by way of hypothecation
of stocks and carries mark-up at the rate of Rs. 0.62 per Rs. 1,000 per day.
9. SHORT-TERM INVESTMENTS
				2002	2001
				Rupees	Rupees
Available-for-sale investments
Term finance certificates (Note 9.1 & 9.2)				38,460,520	29,976,745
Shares (Note 9.3)				32,479,550	4,617,550
Mutual funds				6,200,000	-
Islamic Republic of Pakistan investment bonds				6,002,440	5,110,752
Wapda bonds				-	45,500,000
Pakistan investment bonds (Note 9.4)				185,375,000	5,000,000
				268,517,510	90,205,047
9.1 Breakup of fair value - Term finance certificates
					2002
					Rupees
Available-for-sale investments
As at July 1,2001
- as originally stated (cost)					29,976,745
- Prior period adjustment to absorb fair value appreciation					763,255
Fair value as at July 1, 2001 (restated)					30,740,000
Purchased during the year					18,213,255
Disposed during the year					(10,505,000)
Increase in fair value					12,265
Fair value as at June 30, 2002					38,460,520
9.2 Term Finance Certificates (TFCs) - Listed
				2002	2001
				Rupees	Rupees
			Cost	Fair value	Cost
Sitara Chemical Industries Limited
660 (2001 : Nil) Certificates of face
value Rs. 5,000 each			3,300,000	3,300,000	-
Atlas Lease Limited
Nil (2001 : 1000) Certificates of
face value Rs. 5,000 each			-	-	4,999,000
National Development Leasing Corporation Ltd.
150 (2001: 150) Certificates of
face value Rs. 100,000 each			14,988,000	15,587,520	14,994,000
ICI Pakistan Limited
150 (2001 : 5) Certificates of
face value Rs. 100,000 each			14,997,000	14,997,000	83,745
Sui Southern Gas Company Limited
Nil (2001 : 3,000) Certificates of
face value Rs. 5,000 each and
Nil (2001 : 50) Certificates of
face value Rs. 100,000 each			-	-	5,000,000
Paramount Leasing Limited
50 (2001 : 50) Certificates of
face value Rs. 100,000 each			4,400,000	4,576,000	4,900,000
				38,460,520	29,976,745
9.2.1 The aggregate market value of TFCs Rs. 38.5 million (2001: Rs. 30.74 million) and carries expected profit
ranging from Rs.0.33 to Rs.0.47 per Rs. 1,000 per day and is redeemable in semi annual instalments.
9.2.2 The above TFCs include an amount of Rs. 35,160,520 given as collateral.
				2002	2001
				Rupees	Rupees
			Cost	Fair value	Cost
9.3 Shares - Listed
Southern Electric Power Co. Ltd.
50,000 (2001 : Nil) Shares of
face value Rs. 10 each			535,603	520,000	-
Pakistan Telecommunication Co. Ltd.
60,000 (2001 : Nil) Shares of
face value Rs. 10 each			917,107	1,029,000	-
The Hub Power Company Co. Ltd
105,000 (2001 : Nil) Shares of
face value Rs. 10 each			2,475,776	2,436,000	-
Fauji Fertilizers Co. Ltd.
27,000 (2001 : Nil) Shares of
face value Rs. 10 each			1,214,998	1,225,800	-
Pakistan State Oil Co. Ltd.
105,000 (2001 : Nil) Shares of
face value Rs. 10 each			13,496,948	14,700,000	-
Kohinoor Energy Ltd.
126,000 (2001 : Nil) Shares of
face value Rs. 10 each			1,802,919	1,701,000	-
Sui Northern Gas Pipeline Ltd.
40,000 (2001 : Nil) Shares of
face value Rs. 10 each			550,146	552,000	-
Baluchistan Wheels Limited
3,000 (2001 : 3,000) Shares of
face value Rs.10 each			77,385	63,300	77,385
Lever Brothers Pakistan Limited
5,000 (2001 : 5,500) Shares of
face value Rs. 100 each			4,295,190	4,570,000	4,102,900
Shell Pakistan Limited
25,800 (2001 : 700) Shares of
face value Rs. 100 each			5,626,488	5,682,450	170,078
Tri Pack Films Limited
Nil (2001 : 10,000) Shares of
face value Rs.10 each			-	-	328,810
				32,479,550	4,679,173
Less: Provision for diminution in
value of Investments				-	(61,623)
				32,479,550	4,617,550
10. SHORT-TERM PLACEMENTS
				2002	2001
				Rupees	Rupees
Held-to-maturity investment
Placements and deposits (Note 10.1)				37,862,169	16,000,000
10.1 These represent short-term placements and deposits with different NBFIs and individuals and carry
mark-up ranging from Rs. 0.33 to Rs. 0.52 per Rs. 1,000 per day.
11. ADVANCES, DEPOSITS, PREPAYMENTS AND OTHER RECEIVABLES
				2002	2001
				Rupees	Rupees
Advances - Considered good
-to staff (Note 11.1 )				646,566	298,772
- against expenses				1,522,157	88,526
- against leases				6,539,217	1,009,130
- others				4,250	4,250
Taxation-net of provision				19,667,238	20,092,819
Prepayments				597,747	361,863
Mark-up due on certificates/securities				7,534,368	12,736,095
Interest receivable on Pakland TFC (Note 11.2)				-	-
Central Excise duty receivable (Note 11.3)				-	887,011
Other receivables				3,034,031	1,491,163
				39,545,574	36,969,629
11.1 Aggregate amount due from the executives Rs. 0.486 million (2001: Rs. 0.229 million). Maximum
amount due from executives at the end of any month during the year aggregated Rs. 0.522 million
(2001: Rs. 0.299 million).
11.2 Interest receivable on Pakland TFC
				2002	2001
				Rupees	Rupees
Interest receivable				7,851,151	-
Less: Income suspended				(7,851,151)	-
				-	-
11.3 Central Excise duty receivable
Central Excise duty receivable				886,461	887,011
Less: Provision against Central Excise duty				(886,461)	-
				-	887,011
12. CASH AND BANK BALANCES
				2002	2001
				Rupees	Rupees
Cash in hand				7,711	28,672
Cash with banks in:
- current accounts (Note 12.1 )				4,393,313	3,654,333
- net foreign currency (Note 12.2)				24,449,998	20,164,756
				28,851,022	23,847,761
12.1 This includes Rs. 0.2 million (2001: Rs. 0.2 million) in current account maintained with the State
Bank of Pakistan.
12.2 Net foreign currency
				2002	2001
				Rupees	Rupees
Foreign currency fixed deposit receipts				46,606,669	116,824,061
Less: Credit facility availed (Note 12.3)				22,166,671	96,659,305
				24,439,998	20,164,756
Other foreign currency fixed deposit receipts				10,000	-
				24,449,998	20,164,756
The foreign currency deposits were created as hedge against exchange risk associated with foreign
currency borrowings. For foreign currency loans not covered through the State Bank of Pakistan
exchange risk coverage scheme, the company has adopted an alternative method to hedge exchange
risk associated with its foreign currency borrowings which has also been recognized by the State
Bank of Pakistan. This involves purchasing foreign currency from the secondary market, placing the
foreign currency on deposits and obtaining credit facilities against these deposits in local currency
on a matching basis.
The details of hedge transactions are as follows:
Long-term foreign currency borrowings hedged by long-term deposits are as follows:
			2002		2001
		Rupees	£	Rupees	£
Loan from CDC		38,583,364	416,667	112,500,000	1,250,000
Foreign Currency Deposits
- Pak Kuwait Inv. Co.		26,756,160	291,666	78,662,500	875,000!
-ABL		19,850,509	216,389	| 38,161,561	424,489
		46,606,669	508,055	116,824,061	1,299,489
		(8,023,305)	(91,388)	(4,324,061)	(49,489)
12.3 Credit facilities amounting to Rs. 225 million (2001: 345 million) have been availed against security
of the foreign currency deposits and have been offset in accordance with the policy stated in Note
2.8. The rate of mark-up on credit facilities is 0.38 (2001: 0.37 to 0.45) per Rs. 1,000 per day, while
the rate of interest on foreign currency deposits ranges from 0.21 to 0.26 per Rs. 1,000 per day.
Maturity of credit facility and foreign currency deposits are upto November 2002.
13. ISSUED, SUBSCRIBED AND PAID-UP CAPITAL
				2002	2001
				Rupees	Rupees
15,000,000 (2001 : 15,000,000) ordinary shares of
Rs. 10 each fully paid in cash				150,000,000	150,000,000
7,138,133 (2001 : 5,125,575) ordinary shares of
Rs. 10 each issued as fully paid bonus shares				71,381,330	51,255,750
				221,381,330	201,255,750
, SURPLUS/DEFICIT ON REVALUATION OF SECURITIES
Government Securities				1,737,900	-
Quoted Shares				866,961	-
Other Securities				212,265	-
				2,817,126	-
, DEFERRED INCOME
Opening balance				158,649	317,313
Less: Amortisation for the year				158,649	158,664
Closing balance				-	158,649
15.1 This represents gain on sale and leaseback transaction that resulted in a finance lease.
16.  REDEEMABLE CAPITAL - Secured (Non-participatory)
Term Finance Certificates (Note 16.1)				261,732,643	-
Long term finance utilised under mark up
arrangement (Note 16.2)				28,333,336	133,108,575
				290,065,979	133,108,575
16.1 These represent listed Term Finance Certificates (TFCs) issued by the company. Profit on these
TFCs is payable on semi annual basis at a Base Rate + 200 bps (with a floor of 14.5% and cap of
18.0%). Base Rate is defined as the cut-off yield on the last successful State Bank of Pakistan (SBP)
auction of five year Pakistan Investment Bond (PIB). The Base Rate will be set on the last working
day before the issue date for the TFC due on the first redemption date and subsequently on the
last working day at the beginning of each semi annual period for the profit due at the end of that
semi annual period. The tenor is five years inclusive of one year grace period. TFCs are redeemable
in ten semi annual instalments. These are secured by way of charge on leased assets and its related
lease receivables.
16.2 Long term finances utilised under interest/mark-up arrangements
Name of lending institution		Commencement	Mode of	2002	2001
		of repayment	repayment	Rupees	Rupees
CDC Group PLC, UK		May 1997	12 equal semi
			annual instalments	38,583,364	112,500,000
Commercial Bank		April 2001	4 equal semi annual
			instalments	25,000,000	75,000,000
Commercial Bank		May 2001	6 equal semi annual
			instalments	25,000,000	41,645,833
Commercial Bank		January 2002	12 equal quarterly
			instalments	33,333,335	-
Commercial Bank		February 2000	8 equal quarterly
			instalments	-	49,499,998
Investment Company		October 1998	12 equal quarterly
			instalment	-	2,669,076
Investment Company		January 2002	4 equal quarterly
			instalments	15,000,000	-
Discounting House		September 2001	6 quarterly
			instalments	9,629,409	25,000,000
				146,546,108	306,314,907
Less: Current maturity (Note 20)				118,212,772	173,206,332
				28,333,336	133,108,575
The finance from CDC Group PLC, UK, an associated undertaking represents foreign currency loan amounting to
Pounds Sterling 5 million. The rate of interest is 11.5% per annum. The other finances are in local currency and carry
mark-up ranges from 0.40 to 0.45 per thousand per day. These finances are secured by joint pari-passu charge on
all present and future assets of the company.
17. CERTIFICATES OF INVESTMENT
				2002	2001
Certificates of investment issued:				Rupees	Rupees
- for one year and more				17,646,674	5,687,000
Less: current maturity (Note 20)				125,000	100,000
				17,521,674	5,587,000
- for less than one year				175,594,390	150,425,000
The company has a scheme of registered Certificates of Investment (COIs) for resource mobilisation
as per permission from the Securities and Exchange Commission of Pakistan. The term of these COIs