Welcome to PakSearch.com Pakistan's Premier Business Information Service


For business information, annual reports, laws, ordinances, regulations and articles.




Google
 
Web Paksearch.com
ATLAS LEASE LIMITED
Annual Report 1996
An ATLAS GROUP COMPANY
CONTENTS
Corporate Data 2
Notice of Meeting 4
Directors' Report 5
Chairman's Review 6
Pattern of Shareholding  11
Financial Highlights 12
Auditors' Report to the Members 13
Balance Sheet 14
Profit and Loss Account 16
Statement of Changes in Financial Position 17
Notes to the Accounts 18
The Atlas Family 33
 
CORPORATE DATA
BOARD OF DIRECTORS:
CHAIRMAN
Mr. Yusuf H. Shirazi
CHIEF EXECUTIVE
Mr. Khaleeq-ur-Rahman Khan
DIRECTORS
Mr. A. K.M. Sayeed
Mr. Hiroshi Sasaki
Mr. Iftikhar H. Shirazi
Mr. Kenichi Nakagawa
Mr. Razi-ur-Rahman Khan
Mr. Sanaullah Qureshi
COMPANY SECRETARY
Mr. Muhammad Rafique Umer
GROUP EXECUTIVE COMMITTEE:
CHAIRMAN
Mr. Yusuf H. Shirazi
MEMBERS
Mr. Jawaid Iqbal Ahmed
Mr. Frahim Ali Khan
Mr. Iftikhar H. Shirazi
Mr. Aamir H. Shirazi
SECRETARY
Mr. Amjad Hussain
GROUP PERSONNEL COMMITTEE:
CHAIRMAN
Mr. Nasim S. Mirza
GROUP AUDIT COMMITTEE:
CHAIRMAN
Mr. Sanaullah Qureshi
AUDITORS:
Ford, Rhodes, Robson, Morrow
Chartered Accountants
LEGAL ADVISORS:
Mohsin Tayebaly & Co.
BANKERS & LENDING INSTITUTIONS:
BANKERS:
ABN AMRO Bank
Allied Bank of Pakistan Limited
ANZ Grindlays Bank plc
Askari Commercial Bank Limited
Faysal Bank Limited
First International Investment Bank Limited
Habib Bank AG Zurich
Habib Bank Limited
National Bank of Pakistan
Standard Chartered Bank
The Bank of Tokyo-Mitsubishi, Limited
The Hongkong and Shanghai Banking Corporation
United Bank Limited
LENDING INSTITUTIONS:
Asian Development Bank (ADB)
Commonwealth Development Corporation (CDC)
German Investment and Development Company (DEG)
International Finance Corporation (IFC)
National Development Finance Corporation
Netherlands Development Finance Company (FMO)
REGISTERED OFFICE & HEAD OFFICE:
Federation House, Sharae Firdousi,
Clifton, Karachi- 75600
Tel: (92-21) 5866817 - 20, 5866919 - 20 Fax: 5870543
E-mail: atlasl @ paknetl.ptc.com
BRANCH OFFICES:
LAHORE OFFICE:
1st Floor, Emirates Bank Building,
14 - Egerton Road, Lahore
Tel: (92-42) 6366170 - 74,6364941 Fax: 6365058
ISLAMABAD OFFICE:
2rid Floor, Saudi PakTower,
Blue Area, Islamabad
Tel: (92-51) 824906, 824909 Fax:821377
NOTICE OF MEETING
Notice is hereby given that the Ninth Annual General Meeting of the members of ATLAS LEASE LIMITED will be held on
Monday the December 23, 1996 at 11.00 a.m. at 8th Floor, Adamjee House, I.I. Chundrigar Road, Karachi to transact the
following business:
ORDINARY BUSINESS:
1 To confirm the Minutes of the last Extraordinary General Meeting held on April 22, 1996.
2. To receive, consider and adopt the Audited Accounts of the Company for the year ended June 30, 1996 together with
  the Directors' and Auditors' Report thereon.
3. To approve Cash Dividend @ 15% for the year ended June 30, 1996 as recommended by the Board of Directors.
4. To appoint Auditors and fix their remuneration for the year 1996-97. The retiring Auditors M/s. Ford, Rhodes, Robson,
  Morrow, Chartered Accountants, being eligible, offer themselves for reappointment.
SPECIAL BUSINESS:
5. To approve the remuneration of the Chief Executive and the Working Director.
OTHER BUSINESS:
6. To transact any other business as may be placed before the meeting with the permission of the Chair.
A statement under section 160 of the Companies Ordinance, 1984 pertaining to the Special Business referred to above is
annexed to this Notice of Meeting.
By Order of the Board
MUHAMMAD RAFIQUE UMER
Company Secretary
NOTES:
i) The Register of Members of the Company will remain closed from December 16, 1996 to December 23, 1996 (both
days inclusive). Transfers received in order at the Registered Office of the Company at the close of business on
December 15, 1996 will be treated in time for the purpose of entitlement of dividend.
ii) A member entitled to attend and vote at this meeting may appoint another member as his / her proxy to attend and
vote on his / her behalf. The instrument appointing a Proxy and the power of attorney or other authority under which
it is signed or a notarially certified copy of the power of authority must be received at the Registered Office of the
company duly stamped, signed and witnessed not later than 48 hours before the meeting. A form of Proxy is
enclosed.
iii) Members are requested to notify any change in their addresses immediately.
STATEMENT UNDER SECTION 160 OF THE COMPANIES ORDINANCE,1984
This statement sets out the material facts concerning the Special Business to be transacted at the Ninth Annual General
Meeting of Atlas Lease Limited to be held on December 23, 1996.
Approval of the shareholders will be sought for the remuneration payable to the Chief Executive and working Director in
accordance with their terms and conditions of service. For this purpose, it is intended to pass following resolution as an
Ordinary Resolution, namely:
RESOLVED
"that the Company hereby authorises the holding of offices of profit and payment as remuneration to Mr. Khaleeq-ur-
Rahman Khan, Chief Executive and Mr. Iftikhar H. Shirazi, working Director, not exceeding in the aggregate Rs. 3.5 million
per annum for the year ending June 30, 1997 in addition to company maintained car with driver for each of them."
The Chief Executive and the working Director are interested in the remuneration payable to them.
DIRECTORS' REPORT
The Directors have pleasure in submitting Annual Report of the Company together with the Audited Accounts and the
Auditors' Report thereon for the year ended June 30, 1996.
Financial Results: 1996 1995
Rupees Rupees
Net profit for the year after charging all
expenses and doubtful debts 41,733,087 32,206,760
Previous profit brought forward 81,234 529,474
Profit available for appropriation 41,814,321 32,736,234
Appropriations:
Transfer to general reserve 26,000,000 26,000,000
Cash dividend 15,778,590 6,655,000
41,778,590 32,655,000
Unappropriated profit carried forward 35,731 81,234
Dividend:
The Directors are pleased to recommend a cash dividend of 15%.
Chairman's Review:
The accompanying Chairman's Review deals with the performance of the Company during the year and future outlook. The
Directors of the Company endorse the contents of the review.
Pattern of Shareholding:
The pattern of Shareholding of the Company is annexed.
Auditors:
The present Auditors Messrs. Ford, Rhodes, Robson, Morrow, Chartered Accountants retire and being eligible offer
themselves for reappointment.
for and on behalf of
BOARD OF DIRECTORS
Karachi: November 25, 1996
CHAIRMAN'S REVIEW
I have great pleasure to welcome you to the 9th Annual
General Meeting of the Company and to present a review
of the operations of your Company for the year ended June
30, 1996.
THE ECONOMY
The overall economic indicators showed an upward trend
during the year under review. The GDP grew from 4.4% of
thelastyearto6.1%duringtheyear. The Agriculture sector
witnessed growth from 5.9% last year to 6.7%. The
manufacturing sector also registered a growth of 4.8% as
compared with 2.9% last year.
Although the above statistics show improvement, yet the
country's economy generally, and of the large scale industry
particularly, continued to have problems during the period
under review. The balance of trade and the deficit finance
continued to be adverse for the past several years. The
rate of inflation also remained high in two digits resulting in
increased cost of production in the manufacturing sector.
In finance and investment sector the Credit Deposit Ratio
(CDR) was done away with as an instrument of credit
control. The floor rate on all bank lending was increased by
1%. The Capital Market recorded an all time low during
the Year. Consequently, the decline was witnessed despite
floatation of several large issues. Out of 764 listed
companies, 548 companies could not make any distribution
of profits during 1995 as compared to 272 companies out
of a total of 542 listed companies in 1991 (vide table on
page 10). In other words, the number of companies on the
KSE paying dividend reduced from 50% in 1991 to 28% in
1995.
In the Atlas Group, out of 7 companies listed on the stock
exchanges, 5 paid dividends in 1995 including your
Company. Your Company has an uninterrupted record of
payout to its shareholders since 1992, the third year of
operations. It paid 10% cash and 10% stock dividend, every
year, from 1992 to 1994, and 10% cash dividend in 1995
alongwith a Right issue at 50%. A Right issue was made,
first, at 150% during 1990.
THE LEASING INDUSTRY
The inflow of new entrants slowed down during the period
under review and only two more companies entered the
field since my last report to you. At present, 30 leasing
companies and 34 modaraba companies engaged in
leasing business are listed on the stock exchanges of the
country. The competition kept on growing as industry
grew. The lease financing aggregated over Rs. 11.0 billion
in 1996. Leasing companies have opened up a non-
traditional avenue for diversification of long-term capital
financing and have made substantial contribution towards
promoting industrial expansion in the country, particularly
in financing the small and medium sized enterprises. The
Government is aware of the growth of the lease business.
The Corporate Law Authority, for example, with due
consultation with the relevant quarters, has amended the
leasing rules for the good of the industry. The changes in
the rules are expected to bring about improvement in the
image and working of the leasing companies in Pakistan.
THE COMPANY'S GROWTH
Your Company's equity grew to Rs.196.05 million on June
30, 1996 from IRs.21.23 million in 1990, the first year of
your Company's operations. The gross lease disbursements
touched an amount of Rs. 2.96 billion in 1996 from Rs.
118.97 million during 1990. In order to meet the growing
needs of the business, long term foreign and local loans
arranged stood at Rs.746.46 million and Rs.37.40 million
respectively at the end of the year under review as against
Rs.20.0 million long term local currency loan initiated in
1991.
During the period under review, the Company earned a post
tax profit of Rs. 41.73 million as against Rs.1.85 million in
1990. The ROE after tax increased to 21.29% in 1996 from
8.71% in 1990 and EPS increased to Rs.3.97 in 1996 from
Rs.0.93 in 1990.
The overall progress of your Company during these
years is as follows:
THE OPERATIONS
I am pleased to report that your Company is growing
steadily. It achieved 16.92% growth in lease disbursement,
amounting to Rs.713.69 million during the year under review
as against Rs.610.42 million during the last year. The
portfolio comprised of 61.38% in machinery, 33.14% in
vehicles and 5.48% in office equipment. Net investment
in lease finance grew by 30.70% from Rs. 1,269.81 million
in June 1995 to Rs. 1,659.58 million in June 1996. The
sectoral exposure at the end of the year stood diversified:
it comprised of 17.57% investment in textile sector, 13.89%
in chemical & fertilizer, 10.65% in cement, 9.92% in food,
tobacco and beverages, 7.74% in electrical & electronic
goods, and 7.31% in steel, engineering & automobiles.
297 contracts were executed during the year under review
as compared to 173 contracts during last year.
The sectoral exposure as on June 30, 1997 (See Image)
The total revenues for the year amounted to Rs. 288.58
million, up 34.20%, from Rs.215.03 million in the previous
year. The financial charges and administrative expenses
were incurred to the tune of Rs. 203.67 million and Rs.33.94
million respectively during the year. The recovery position
remained satisfactory. An amount of Rs. 7.80 million was
charged as general provision for potential lease losses
bringing the aggregate to Rs. 33.19 million. This provision
is in accordance with the Companys prudent policy being
followed from the beginning. The profit after tax stood at
Rs. 41.73 million, 29.56% higher from the previous year's
Rs.32.21 million. A sum of Rupees 14.85 million was paid
to exchequer during the period under review by way of tax
deducted at source and turnover tax.
FUNDING
The Capital base of your Company expanded from Rs.
66.55 million last year to Rs.105.19 million during the year
under review. The increase was due to the issue of Right
shares at par of Rs. 33.27 million and IFC's exercising
their option of converting a part of their loan into equity
worth Rs.5.37 million. A total of 536,560 shares were issued
to IFC at a conversion price of Rs.20.85 per share. The
proceeds were utilised in the last quarter of the year under
review.
In line with the Group's trends and sustained growth, your
Company got full support from the financial institutions,
banks, etc. Adequate funds remained available to the
Company. The I FC's second loan amounting to USS 2.2
million was utilised during the period under review. Efforts
were also made to raise local funds through COl, which
stood at Rs.336.32 million as against Rs. 80.81 million
last year. The two approved foreign currency credit lines
of USS 10.0 million and NLG 10.0 million (equivalent to
USS 6.0 million). of ADB and FMO respectively are in the
process of being utilised. Efforts are on way to diversify
sources of funding and to explore other means of financing
to meet growing demand of the business.
CHANGE IN BOARD OF DIRECTORS
Mr. T. Nakano, on relinquishing charge as the General
Manager of The Bank of Tokyo-Mitsubishi Ltd., Karachi
was replaced by Mr. K. Nakagawa on April 22, 1996 and
Mr. M. Asadullah Shaikh on relinquishing charge as
Chairman and Managing Director of NIT was replaced by
Mr. Razi-ur-Rahman Khan, Chairman & Managing Director
of NIT subsequent to the period under review. May I place
on record appreciation of the contribution made by Messrs:
T. Nakano and M.Asadullah Shaikh and welcome Messrs:
K. Nakagawa and Razi-ur-Rahman Khan on the Board and
look forward to their support in managing the affairs of
your Company.
ATLAS PHILOSOPHY AND FUTURE OUTLOOK
Atlas Group of companies, of which your Company is a
constituent member, had a record growth. During the period
under review, despite unfavourable economic conditions,
all group companies performed better than the previous
year as your Company. Atlas believes in steady and
sustainable growth. We have travelled a long way to be,
where we are today. It firmly believes in what Willian G.
Jordan said:
"Everything that is great in life is the product of slow
growth; the greater and higher, the nobler the work,
the slower the growth, the surer is its lasting success.
Mushrooms attain their full power in a night; Oaks
require decades."
The Federal Budget 1996 levied Central Excise Duty on
lease finance @ 1/12th of 1% of each lease amount
outstanding at the end of each calendar month. The Sindh
Government has introduced a levy @ 0.5% on the services
provided by leasing companies. All these will ultimately
increase the cost of lease financing, thus effecting the
growth of the industrial investment in the country.
The recent mini budget and repeated devaluation of Pak
Rupee have further burdened the economy. These
continuing adverse factors are responsible for the loss of
Rupee value against other currencies. With the three
massive downward exchange adjustments in Rupee within
a short span of one year - October-95 to October-96 - the
impact is of more than 22 percent.
The devaluation, levies on POL, gas distribution and
withholding tax on imports and supplies will directly add to
the cost of production. Inflation which is officially running
at about 11% may get worse. All this is causing a
dampening effect on the economy and the pace of industrial
activity could further decline.
Your Company, however, by adopting a steady and
sustained growth pattern in line with the philosophy of the
Group is focusing on the Group synergy, market penetration,
stricter credit evaluation, other avenues of income, human
resource development and providing quality product and
service. We are sure, we will continue to endeavour for a
higher level of achievement year after year.
(If the vision is clear and direction set,
it is then the commitment that matters)
ACKNOWLEDGEMENTS
May I, on behalf of the Board, thank the CEO and his team
for their dedication and hardwork, The Bank of Tokyo-
Mistubishi, Ltd. and National Investment Trust for their
advice and guidance provided to the Company. May I also
thank the State Bank of Pakistan, financial institutions for
their help and support and all our clients for the trust and
confidence reposed in your Company.
YUSUF H. SHIRAZl
LISTED COMPANIES DISTRIBUTION
Dividend, Bonus & Issue of Right Shares
Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31,
PARTICULARS 1991 1992 1993 1994 1995
Rs. in Million
Paid Up Capital 37,024.343 58,t98.532 69,476.15 104,137.24 134,372.32
No. of Listed Companies 542 628 653 724 764
Announcements:
Cash Dividend
No. of Companies 139 157 138 156 139
% of Total Listed Companies 26% 25 % 21% 22% 18%
Bonus Shares Issued
No of Companies 36 55 70 57 37
% of Total Listed Companies 7% 9% 11% 8% 5%
Cash + Bonus Issued
No. of Companies 42 42 58 42 23
% of Total Listed Companies 8% 7% 9% 6% 3%
Cash + Right Issued
No. of Companies 26 10 10 15 6
% of Total Listed Companies 5% 2% 2% 2% 1%
Bonus + Right Issued
No. of Companies 18 10 14 18 9
% of Total Listed Companies 3% 2% 2% 2% 1%
Cash + Bonus + Right Issued
No. of Companies 9 4 3 4 2
% of Total Listed Companies 2% 1% 0% 1% 0%
Right Shares Offered
No. of Companies 36 15 16 45 17
% of Total Listed Companies 7% 2% 2% 6% 2%
--------- --------- --------- --------- --------- --------- --------- --------- ---------
Total Companies announced
Cash and Bonus 270 278 293 292 216
% of Total Listed Companies 50% 44% 45% 40% 28%
--------- --------- --------- --------- --------- --------- --------- --------- ---------
Total Companies Issued/Offered
Right Shares 89 39 43 82 34
% of Total Listed Companies 16% 6% 7% 11% 4%
--------- --------- --------- --------- --------- --------- --------- --------- ---------
PATTERN OF SHAREHOLDING
ASATJUNE 30, 1996
Number of Shareholding Total
Shareholders From To Shares Held
29 1 - 100 1,602
33 101 - 500 7,481
27 501 - 1,000 22,688
63 1,001 - 5,000 151,813
4 5,001 - 10,000 37,915
3 10,001 - 15,000 33,935
2 15,001 - 20,000 36,135
1 20,001 - 25,000 22,959
1 25,001 - 30,000 28,749
1 50,001 - 55,000 52,406
1 95,001 - 100,000 99,825
1 150,001 - 155,000 152,878
1 175,001 - 180,000 175,125
1 265,001 - 270,000 268,043
1 440,001 - 445,000 442,557
1 495,001 - 500,000 499,125
1 500,001 - 505,000 502,461
1 535,001 - 540,000 536,560
4 840,001 - 845,000 3,364,083
1 885,001 - 890,000 888,442
1 905,001 - 910,000 907,500
1 2,285,001 - 2,290,000 2,286,778
--------- ---------
179 TOTAL 10,519,060
========= =========
The slabs representing NIL holding have been omitted.
Categories of Number of Numbers of Percentage of
Shareholders Shareholders Shares held Shares held
1. Individuals 158 3,782,475 35.96
2. Investment Companies 2 513,801 4.89
3. Insurance Companies 1 28,749 0.27
4. Joint Stock Companies 7 99,364 0.94
5. Financial Institutions 5 2,808,786 26.70
6. Modaraba Companies 1 11,701 0.11
7. Foreign Investors 5 3,274,184 31.13
--------- --------- --------- --------- --------- --------- --------- ---------
TOTAL 179 10,519,060 100.00
--------- --------- --------- --------- --------- --------- --------- ---------
FINANCIAL HIGHLIGHTS (1990-1996)
(Rupees in million)
1990 1991 1992 1993
FINANCIAL POSITION
Authorised Capital 50.00 100.00 100.00 100.00
Paid-up Capital 20.00 50.00 50.00 55.00
Reserves & Surplus 1.23 9.82 19.20 26.90
Shareholders' Equity 21.23 59.82 69.20 81.90
Long Term Loans - Foreign -- -- 131.32 461.17
Long Term Loans - Local -- 20.00 70.00 47.98
Certificates of Investment -- -- -- 0.98
Operating Fixed Assets 2.83 3.26 5.86 9.73
Net Investment in Lease   106.73 305.01 551.89 740.02
Total Assets 114.44 310.65 569.06 810.08
OPERATING POSITION
Lease Disbursements 118.97 25,013 376.83 396.69
Income from leasing Operations 9.85 36.81 82.03 130.93
Total Expenses 9.17 28.54 68.57 111.91
Profit Before Taxation 1.85 8.59 14.39 20.78
Profit After Taxation 1.85 8.59 14.39 18.20
Earning per share (in Rupees) 0.93 1.72 2.88 3.31
Return on Equity (in percentage) 8.73 14.35 20.79 22.22
Book value per share (in Rupees) 10.61 11.96 13.84 14.89
DISTRIBUTION
Cash Dividend -- -- 10% 10%
Stock Dividend -- -- 10% 10%
--------- --------- --------- ---------
Total -- -- 20% 20%
RIGHT ISSUE 150% -- -- --
1994 1995 1996
FINANCIAL POSITION
Authorised Capital 100.00 100.00 200.00
Paid-up Capital 60.50 66.55 105.19
Reserves & Surplus 39.58 59.08 90.86
Shareholders' Equity 100.08 125.63 196.05
Long Term Loans - Foreign 601.40 815.64 746.46
Long Term Loans - Local 43.44 95.33 37.40
Certificates of Investment 10.92 80.81 336.32
Operating Fixed Assets 13.76 13.83 17.51
Net Investment in Lease ' 973.03 1,269.81 1,659.58
Total Assets 1,018.56 1,402.64 1,807.56
OPERATING POSITION
Lease Disbursements 493.57 610.42 713.69
Income from leasing Operations 159.52 204.14 273.81
Total Expenses 143.54 181.65 245.41
Profit Before Taxation 26.34 33.38 43.18
Profit After Taxation 24.23 32.21 41.73
Earning per share (in Rupees) 4.00 4.84 3.97
Return on Equity (in percentage) 24.21 25.64 21.29
Book value per share (in Rupees) 16.54 18.88 18.64
DISTRIBUTION
---------- ---------- ----------
Cash Dividend 10% 10% 15%
Stock Dividend 10% -- --
---------- ---------- ----------
Total 20% 10% 15%
RIGHT ISSUE -- 50% --
AUDITORS' REPORT TO THE MEMBERS
We have audited the annexed balance sheet of ATLAS LEASE LIMITED as at June 30, 1996 and the related profit and loss
account and statement of changes in financial position, 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 and, after due verification thereof, we report that:
(a) in our opinion, proper books of account 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 conform-
ity with the Companies Ordinance, 1984 and are in agreement with the books of account and are further in
accordance with accounting policies consistently applied;
(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 and the statement of changes in financial position, together with the notes forming part
thereof, 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, 1996 and of the profit and the changes
in financial position for the year then ended; and
(d) in our opinion Zakat deductible at source under the Zakat and Ushr Ordinance, 1980 was deducted by the company
and deposited in the Central Zakat Fund established under section 7 of that Ordinance.
Ford, Rhodes, Robson, Morrow
Chartered Accountants
Karachi :- November 25, 1996
BALANCE SHEET
ASATJUNE 30, 1996
1996 1995
Note Rupees Rupees
SHARE CAPITAL AND RESERVES
Share Capital
Authorised
20,000,000 (1995:10,000,000)
ordinary shares of Rs. 10 each 200,000,000 100,000,000
============== ==============
Issued, subscribed and paid-up 3 105,190,600 66,550,000
Reserves 4 90,857,407 59,081,234
-------------- --------------
196,048,007 125,631,234
LONG TERM LOANS 5 582,631,280 715,716,509
LONG TERM DEPOSITS 6 150,212,991 119,476,295
CERTIFICATES OF INVESTMENT 7 11,897,628 5,575,000
DEFERRED REVENUE 8 1,494,533 --
CURRENT LIABILITIES
Current portion of long term loans 201,231,308 195,257,165
Current portion of long term deposits 43,041,347 30,178,125
Certificates of investment 7 324,423,355 75,233,227
Shod term finances - Unsecured 9 86,650,000 --
Finance under mark-up arrangements 10 59,509,913 43,119,748
Accrued and other liabilities 11 133,197,010 85,387,728
Taxation 33,772 407,482
Proposed dividend 15,778,590 6,655,000
-------------- --------------
863,865,295 436,238,475
CONTINGENCIES AND COMMITMENTS 12
-------------- --------------
1,806,149,734 1,402,637,513
============== ==============
TANGIBLE FIXED ASSETS
Operating fixed assets 13 17,514,163 13,830,097
CAPITAL WORK IN PROGRESS -- 2,269,700
NET INVESTMENT IN LEASE FINANCE 14
Minimum lease payments receivable 1,195,062,665 1,569,195,968
Residual value of leased assets 222,565,907 169,457,158
-------------- --------------
2,195,628,572 1,738,653,126
Unearned finance income (536,047,646) (468,842,847)
-------------- --------------
Net investment in lease finance 1,659,580,926 1,269,810,279
Current portion of net investment (546,800,474) (364,713,544)
Provision for doubtful debts (33,191,618) (25,396,206)
1,079,588,834 879,700,529
-------------- --------------
LONG TERM INVESTMENTS 15 24,875,616 6,494,000
LONG TERM LOANS, DEPOSITSAND
DEFERRED COSTS 16 9,289,480 7,484,191
CURRENT ASSETS
Current portion of net investment
in lease finance 546,800,474 364,713,544
Short term investments -- 39,484,340
Advances, deposits, prepayments
and other receivables 17 112,786,451 83,248,931
Cash and bank balances 18 15,294,716 5,412,181
-------------- --------------
674,881,641 492,858,996
-------------- --------------
1,806,149,734 1,402,637,513
============== ==============
The annexed notes form an integral part of these accounts.
The auditors report is annexed hereto.
YUSUF H. SHIRAZI
Chairman
PROFITAND LOSSACCOUNT
FOR THE YEAR ENDED JUNE 30, 1996
1996 1995
Note Rupees Rupees
REVENUE
Income from leasing operations 19 273,808,831 204,137,838
Other Income 20 14,774,669 10,895,716
-------------- --------------
288,583,500 215,033,554
EXPENDITURE
Financial charges 21 203,668,984 142,647,955
Administrative and operating expenses 22 28,576,591 27,252,149
Provision for doubtful debts 7,795,412 5,935,577
Provision for diminution in value of investments 15 896,400 1,494,000
Amortization of deferred costs 4,470,108 4,324,289
-------------- --------------
245,407,495 181,653,970
-------------- --------------
Profit for the year before taxation 43,176,005 33,379,584
Turnover tax
Current 1,442,918 1,075,168
Prior -- 97,656
-------------- --------------
1,442,918 1,172,824
-------------- --------------
Profit for the year after taxation 41,733,087 32,206,760
Accumulated profit brought forward 81,234 529,474
Profit available for appropriation 41,814,321 32,736,234
APPROPRIATIONS:
Transfer to general reserve 26,000,000 26,000,000
Proposed dividend @ 15% (1995:10%) 15,778,590 6,655,000
-------------- --------------
41,778,590 32,655,000
-------------- --------------
Unappropriated profit carried forward 35,731 81,234
============== ==============
The annexed notes form an integral part of these accounts,
STATEMENT OF CHANGES IN FINANCIAL POSITION
(CASH FLOW STATEMENT) FOR THE YEAR ENDED JUNE 30, 1996
1996 1995
Rupees Rupees
CASH FLOW FROM OPERATING ACTIVITIES
Profit for the year before taxation 43,176,005 33,379,584
Add: Adjustment to reconcile profit to
net cash provided by operating activities
Depreciation on fixed assets 2,915,437 2,487,355
Amortization of deferred costs 4,470,108 4,324,289
Provision for doubtful debts 7,795,412 5,935,577
Provision for diminution in value of investments 896,400 1,494,000
(Profit)/Loss on sale of fixed assets 445,520 (162,042)
Exchange gain (298,907) --
-------------- --------------
16,223,970 14,079,179
-------------- --------------
Net cash provided by operating activities 59,399,975 47,458,763
(Increase)/Decrease in current assets 14,655,622 (83,496,502)
Increase/(Decrease) in current liabilities 400,039,575 68,682,540
-------------- --------------
Net cash from operating activities before income tax 474,095,172 32,644,801
Income tax 1,816,628 1,343,678
-------------- --------------
Net cash from operating activities after income tax 472,278,544 31,301,123
CASH FLOW FROM INVESTING ACTIVITIES
Long term investments (19,278,016) (5,000,000)
Dividend paid (6,655,000) (6,050,000)
Capital expenditure (9,794,707) (5,884,345)
Long term deposits and deferred costs (6,294,603) (13,350)
Net investment in lease finance (net of repayments) (394,453,858) (302,609,222)
Repayment of long term loans (204,794,406) (114,111,488)
Loan to executive (176,988) (174,729)
-------------- --------------
Net cash used in investing activities (641,447,578) (433,843,134)
CASH FLOW FROM FINANCING ACTIVITIES
Issue of right shares 33,275,000 --
Issue of shares to IFC 11,187,276 --
Issue of certificates of investment 6,322,628 (45,000)
Long term loans 77,683,320 380,251,000
Deferred revenue 1,793,440 --
Sale of fixed assets 5,019,383 1,214,350
Long term advances and deposits 43,599,918 23,313,992
Recovery of loan to executive 170,604 148,350
-------------- --------------
Net cash generated from financing activities 179,051,569 404,882,692
-------------- --------------
Net increase/(decrease) in cash activities 9,882,535 2,340,681
CASH AND BANK BALANCES AT BEGINNING OF THE YEAR 5,412,181 3,071,500
-------------- --------------
CASH AND BANK BALANCES AT END OF THE YEAR 15,294,716 5,412,181
============== ==============
NOTES TO THEACCOUNTS
FOR THE YEAR ENDED JUNE 30, 1996
1. THE COMPANY AND ITS OPERATIONS
The company is incorporated in Pakistan and is listed on the Karachi, Lahore and Islamabad stock exchanges. It
essentially carries on the business of leasing.
2. SIGNIFICANTACCOUNTING POLICIES
2.1 Accounting convention
These accounts have been prepared under the historical cost convention.
2.2 Revenue recognition
The company follows the "Finance Method" in accounting for recognition of lease income. Under this method
the unearned lease income, that is the excess of aggregate lease rentals and the residual value over the cost
of leased asset is deferred and then amortized to income over the term of the lease, applying the annuity
method to produce a constant rate of return on the net cash investment in the lease.
Front-end fee is taken to income on a receipt basis.
Return on investment is recognized on an accrual basis on the assumption that such investments will be held
till the next terminal date.
2.3 Tangible fixed assets
These are stated at cost less accumulated depreciation. Depreciation is charged to income applying the
reducing balance method at the rates specified in note 13 to the accounts. In respect of additions during the
year, depreciation is charged for full year, however, no depreciation is charged in the year of disposal.
Profit or loss on disposal of assets is included in income currently.
2.4 Deferred costs
Processing charges of long term loans and other deferred costs are being amortized over a period of three
years from the year of incurrence.
2.5 Investments
Long Term Investments
These are stated at cost. Provision for diminution in value of investments is made, if considered permanent.
Short Term Investments
These are stated at lower of cost or market value.
2.6 Taxation
Current:
The charge for current taxation for the year, if required, is based on taxable income, which is computed as if all
leases are operating leases.
Deferred:
The company accounts for deferred taxation using the liability method on all significant timing differences,
excluding tax effect on those timing differences which are not likely to reverse in the foreseeable future.
2.7 Foreign currency translations
Assets and liabilities in foreign currencies are translated into rupees at the rates of exchange which approximate
those prevailing at the balance sheet date except for liabilities covered under an exchange risk coverage
scheme, which are translated at the rate prevailing on the date of disbursement. Exchange differences arising
as a result of obtaining cover under these schemes are being amortized over the period of loan. Net exchange
differences arising due to hedging mechanism are accounted for as deferred revenue/deferred costs as the
case may be and are credited/amortised to income over the term of the underlying transactions.
2.8 Off-setting of financial assets and financial liabilities
A financial asset and a financial liability is offset and the net amount reported in the balance sheet if the
company has a legal enforceable right to set-off the transaction and also intends either to settle on a net
basis or to realize the asset and settle the liability simultaneously.
2.9 Employees' retirement benefits
The company operates a contributory provident fund for all its permanent employees and contributions are
made monthly in accordance with the fund rules to cover the obligations.
2.10 Provision for doubtful debts
Keeping in view the nature of leasing business, the company, as a prudent policy, makes this provision at a
reasonable level, which as per the management's anticipation is adequate for potential losses on the lease
portfolio.
1996 1995
3. ISSUED, SUBSCRIBEDAND PAID-UP CAPITAL Note Rupees Rupees
8,864,060 (1995: 5,000,000) ordinary
shares of Rs.10 each fully paid in cash 3.1 88,640,600 50,000,000
1,655,000 (1995: 1,655,000) ordinary shares of
Rs. 10 each issued as fully paid bonus shares 16,550,000 16,550,000
-------------- --------------
105,190,600 66,550,000
============== ==============
3.1 Includes 536,560 ordinary shares of Rs.10 each issued to International Finance Corporation at a premium of
Rs.10.85 per share upon exercise of their part option to convert a portion of its loan into equity based on
financial statements as at June 30, 1995 as per the loan agreement. (Refer note 5.8)
4. RESERVES
Capital Reserves
Premium on Shares 3.1 5,821,676 --
Revenue Reserves
General Reserve 4.1 85,000,000 59,000,000
Unappropriated Profit 35,731 81,234
-------------- --------------
85,035,731 59,081,234
-------------- --------------
90,857,407 59,081,234
============== ==============
1996 1995
Note Rupees Rupees
4.1 General Reserve
Balance as at June 30, 59,000,000 33,000,000
Transfer from profit and loss account 26,000,000 26,000,000
-------------- --------------
85,000,000 59,000,000
============== ==============
5. LONG TERM LOANS - Secured
Foreign currency loans
Commonwealth Development Corporation I 5.2 26,475,137 53,026,036
Commonwealth Development Corporation II 5.3 79,605,966 102,428,100
Asian Development Bank 5.4 63,131,955 84,177,749
Netherlands Development Finance Company 5.5 110,317,339 134,693,426
German Investment and Development Company I 5.6 50,307,007 61,469,972
German Investment and Development Company II 5.7 65,023,414 76,834,368
International Finance Corporation (Loan A) 5.8 279,489,607 310,151,057
International Finance Corporation (Loan B) 5.9 77,683,320 --
-------------- --------------
752,033,745 822,780,708
Less: Exchange differences not yet due 5,573,423 7,136,522
-------------- --------------
746,460,322 815,644,186
Local currency loans
National Development Finance Corporation 5.1 3,513,385 8,107,269
Bank of Punjab -- 30,000,000
ANZ Grindlays Bank plc 5.11 25,000,001 41,666,667
Askari Commercial Bank Ltd. 5.12 8,888,880 15,555,552
-------------- --------------
37,402,266 95,329,488
-------------- --------------
783,862,588 910,973,674
Less: Current maturity 201,231,308 195,257,165
-------------- --------------
582,631,280 715,716,509
============== ==============
5.1 All the loans stated in note 5 above are secured by pari-passu floating charge on the present and future leased
  assets, hypothecation of movable assets and receivables of the company and demand promissory notes. The
  foreign currency loans are registered with the State Bank of Pakistan.
5.2 This represents the balance of a loan of Pound Sterling 3,000,000 obtained from Commonwealth Development
Corporation for financing lease operations. The loan is repayable in ten equal semi-annual instalments which
commenced from September 25, 1992.
The liability of this loan has been fixed in Pakistani Rupees under the exchange risk cover scheme and the
rate of interest and exchange risk cover fee is 11% and 5% per annum respectively, payable half-yearly. In
case the company fails to pay any amount on the due date, it shall be liable to pay liquidated damages at the
rate of 1% per annum over and above the interest rate.
5.3 This represents loan of Pound Sterling 2,500,000 obtained from Commonwealth Development Corporation for
financing lease operations. The loan is repayable in ten equal semi-annual instalments which commenced
from January 25, 1995.
The liability of this loan has been fixed in Pakistani Rupees under the exchange risk cover scheme and the
rate of interest and exchange risk cover fee is 10.5% and 6.93% per annum respectively, payable half-yearly.
In case the company fails to pay any amount on the due date, it shall be liable to pay liquidated damages at
the rate of 1% per annum over and above the interest rate.
5.4 This represents a facility of US $ 5,000,000 obtained from Asian Development Bank for financing lease
operations. The loan is repayable in twelve equal semi-annual instalments which commenced from December
15, 1993.
The liability of this loan has been fixed in Pakistani Rupees under the exchange risk cover scheme. The rate
of interest and exchange risk cover fee is 9.4% and 7.08% per annum respectively, payable half-yearly. In
case the company fails to pay any amount on the due date, it shall be liable to pay liquidated damages at the
rate of 1% per annum over and above the interest rate.
5.5 This loan of Netherlands Guilders (NLG) 10,000,000 comprising of two equal tranches of NLG 5,000,000 each
was obtained from Netherlands Development Finance Company (FMO). The loan is for financing of lease
operations and is repayable in fourteen semi-annual instalments which commenced from November 1,1994
for the first tranche and November 1,1995 for the second tranche.
The liability of this loan has been fixed in Pakistani Rupees under the exchange risk cover scheme. The rate
of interest and exchange risk cover fee is 10.7% and 5% per annum respectively, payable half-yearly. In case
the company fails to pay any amount on the due date, it shall be liable to pay liquidated damages at the rate
of 2% per annum over and above the interest rate.
5.6 This represents a loan of Deutsche Marks 5,000,000 obtained from German Investment and Development
  Company (DEG) for financing lease operations. The loan is repayable in fifteen equal semi-annual instalments
  which commenced from October 30, 1993.
The liability of this loan has been fixed in Pakistani Rupees under the exchange risk cover scheme. The rate
of interest and exchange risk cover fee is 10.5% and 5% per annum respectively, payable half-yearly. In case
the company fails to pay any amount on the due date, it shall be liable to pay liquidated damages at the rate
of 2% per annum over and above the interest rate.
5.7 This represents a loan of Deutsche Marks 5,000,000 obtained from German Investment and Development
Company (DEG) for financing lease operations. The loan is repayable in fifteen equal semi-annual instalments
which commenced from October 30, 1994.
The liability of this loan has been fixed in Pakistani Rupees under the exchange risk cover scheme. The rate
of interest and exchange risk cover fee is 10.6% and 5.77% per annum respectively, payable half-yearly. In
case the company fails to pay any amount on the due date, it shall be liable to pay liquidated damages at the
rate of 2% per annum over and above the interest rate.
5.8 This represents loan (A) of US $10,000,000 obtained from International Finance Corporation (IFC) for financing
lease operations. The loan is repayable in sixteen equal semi-annual instalments which commenced from
June 15, 1996.
In accordance with the loan agreement IFC has exercised its conversion option of loan into equity. (Refer note
3.1)
The liability of this loan has been fixed in Pakistani Rupees under the exchange risk cover scheme. The rate
of interest and exchange risk cover fee is 8.5% and 6.66% per annum respectively, payable half-yearly. In
case the company fails to pay any amount on the due date, it shall be liable to pay liquidated damages at the
rate of 2% per annum over and above the interest rate.
5.9 This represents loan (B) of US $ 2,200,000 obtained from International Finance Corporation (IFC) for financing
lease operations. The loan will be repayable in 4 equal semi annual instalments commencing from June 15,
1997.
The interest rate is Libor plus 2.75% per annum payable half yearly. In case the company fails to pay any
amount on the due date, it shall be liable to pay liquidated damages at the rate of 2% per annum over and
above the interest rate.
5.10 This has been obtained from National Development Finance Corporation on a sale and repurchase agreement
  for financing the leasing operations of the company.
The sale price of Rs.20,000,000 has a marked-up price of Rs.34,511,424 subject to prompt payment rebate of
Rs.4,085,512 and is repayable in eight equal semi-annual instalments which commenced from March 1,1993.
5.11 This has been obtained from ANZ Grindlays Bank plc for financing the leasing operations of the company. It is
  -repayable in 6 semi-annual instalments which commenced from February 16, 1995. It carries markup at the
  rate of 49.31 paisas per thousand Rupees per day.
5.12 This has been obtained from Askari Commercial Bank Limited for financing the leasing operations of the
  company. It is repayable in 36 equal monthly instalments which commenced from November, 1994. It carries
  markup at the rate of 52.05 paisas per thousand Rupees per day.
5.13 The Netherlands Development Finance Company (FMO) has sanctioned Loan of USS 6.00 million. The
  interest rate is 10.5% per annum payable half yearly. The loan will be repayable in ten semi-annual instalments
  commencing from November 01,1997. No drawdowns have been made upto June 30, 1996.
5.14 The Asian Development Bank (ADB) has sanctioned loan of USS 10.0 million. The interest rate is Libor plus
  2.25% per annum payable half yearly. The loan will be repayable in ten semi-annual instalments commencing
  from March 15, 1999. No drawdowns have been made upto June 30, 1996.
1996 1995
6. LONG TERM DEPOSITS Note Rupees Rupees
From lessees
Security deposits on lease contracts 6.1 192,794,369 149,200,003
From employees 6.2 459,969 454,417
-------------- --------------
193,254,338 149,654,420
Less: Current maturity 43,041,347 30,178,125
-------------- --------------
150,212,991 119,476,295
============== ==============
6.1 These represent security deposits received against lease contracts and are repayable/adjustable at the expiry
  of respective lease periods.
6.2 This represents deposits from employees under the Company's Car scheme.
7. CERTIFICATES OF INVESTMENT
The company has a scheme of registered Certificates of Investment (COl) for resource mobilization as per permission
from the Corporate Law Authority, Government of Pakistan. The terms of these Certificates of Investment range from
three months to five years and the return is paid on a profit and loss sharing basis.
8. DEFERRED REVENUE
Net exchange gain 2.7 1,793,440 --
Transferred to profit and loss 298,907 --
-------------- --------------
1,494,533 --
============== ==============
9. SHORT TERM FINANCE - Unsecured
These represents short term finance obtained from various institutions. The mark-up rate ranges from 50 to 52
paisas per thousand rupees per day. The amounts have been subsequently repaid.
10. FINANCE UNDER MARK-UPARRANGEMENTS
Running finances from banks utilized
under mark-up arrangements - secured 10.10 59,509,913 43,119,748
============== ==============
10.1 The facilities from commercial banks amount to Rs.88.50 million (1995:Rs.73.50 million) and the mark-up
  rates range from 45 to 50 paisas per thousand rupees per day and is payable currently. The arrangements are
  secured by a pari-passu charge on leased assets and hypothecation of rentals receivable.
1996 1995
Note Rupees Rupees
11. ACCRUED AND OTHER LIABILITIES
Accrued expenses 628,374 1,191,998
Mark-up on secured - long term finances 12,096,240 19,743,954
- running finances 1,189,651 767,553
Mark-up on unsecured short term finances 496,482 922,178
Exchange risk fee, guarantee commission,
commitment and other charges on
long term loans 93,494,658 52,797,212
Profit payable on certificates of investment 9,034,381 2,068,567
Due to associated undertakings -- 83,702
Other liabilities
Advance from customers pending lease execution 2,812,717 4,953,131
Advance lease rentals from lessees 8,517,590 1,359,005
Lease rentals received on account 4,024,117 745,182
Unclaimed dividend 12,252 19,335
Others 890,548 735,911
-------------- --------------
16,257,224 7,812,564
-------------- --------------
133,197,010 85,387,728
============== ==============
12. CONTINGENCIES AND COMMITMENTS
12.1 Commitments
Letters of comfort against letters of credit 37,039,952 45,250,000
Lease commitments 36,894,000 --
Capital commitments for computer system -- 656,250
-------------- --------------
73,933,952 45,906,250
============== ==============
13. OPERATING FIXED ASSETS
       Cost
As at As at
July  Additions Disposals  June 30,1996
11,995
Description Rupees Rupees Rupees Rupees
Leasehold improvements 834,417    948,352 4,634 1,778,135
Furniture and fixtures 1,218,397    218,700 325,238 1,111,861
Office equipment 5,733,760  4,435,357 448,418 9,720,699
Electrical equipment 2,125,290     62,800 652,353 1,535,737
Motor vehicles 11,653,385  6,399,197 7,577,222 10,475,360
---------- ---------- ---------- ----------
21,565,249 12,064,406 9,007,863 24,621,792
========== ========== ========== ==========
1 9 9 5 19,611,794 3,614,646 1,661,191 21,565,249
========== ========== ========== ==========
      Depreciation Rate
written down of
value as at Depre-
As at Charge for    On       As at June 30, ciation
Description July 1,1995 the year  disposals  June30,1996 1996 on WDV
Rupees  Rupees  Rupees  Rupees  Rupees %
Leasehold improvements 357,900 142,111 880 499,131 1,279,004 10
Furniture and fixtures 452,508 78,631 126,953 404,186 707,675 10
Office equipment 1,399,260 845,548 134,038 2,110,770 7,609,929 10
Electrical equipment 716,980 104,194 223,178 597,996 937,741 10
Motor vehicles 4,808,504 1,744,953 3,057,911 3,495,546 6,979,814 20
---------- ---------- ---------- ---------- ---------- ----------
7,735,152 2,915,437 3,542,960 7,107,629 17,514,163
========== ========== ========== ========== ========== ==========
1 9 9 5 5,856,679 2,487,355 608,882 7,735,152 13,830,097
========== ========== ========== ========== ========== ==========
13.1 Disposal of assets.
Accumulated
Cost depreci- Book value Sale Mode of
Description Rupees ation Rupees Proceeds disposal Sold to
Rupees Rupees
Leasehold Improvements 4,634 880 3,754 -- Scrapped / --
Damaged
Furniture and Fixture 81,191 35,365 45,826 31,800 Negotiation Mrs. Rasheeda Begum
D.H.A. Karachi.
Furniture and Fixture 10,667 2,474 8,193 3,500 Negotiation Mr. M.H. Khan
Federal 'B' Area Karachi.
Furniture and Fixture 23,200 7,090 16,110 8,750 Negotiation Mr. Shabbir Aziz
F.J.Colony, Karachi.
Furniture and Fixture 8,600 3,360 5,240 1,750 Negotiation Mrs. Amina Abubaker
Sharfabad, Karachi.
Furniture and Fixture 5,500 2,870 2,630 700 Negotiation M/s Gulf Electronics
Gizri Road, Karachi
Furniture and Fixture 120,862 55,758 65,104 14,000 Negotiation Mr. Faisal Jadoon
D.H.A. Karachi.
Furniture and Fixture 11,950 2,939 9,011 -- Scrapped / --
Damaged
Furniture and Fixture 3,350 1,570 1,780 1,200 Negotiation Mr. Aamir
Lyari, Karachi.
Furniture and Fixture 41,936 7,968 33,968 2,500 Negotiation Mujahil Khan
Light House, Karachi.
Furniture and Fixture 1,560 731 829 -- Scrapped / --
Damaged
Furniture and Fixture 16,420 6,828 9,592 -- Scrapped / --
Damaged
Office Equipment 26,400 7,154 19,246 3,000 Negotiation M/s Mobile Communications
Gulberg, Lahore.
Office Equipment 23,000 10,777 12,223 1,200 Negotiation Mr. Fahad Ghani
Gari Khata, Karachi.
Office Equipment 49,900 17,161 32,739 7,150 Negotiation Mr. Salman Aziz
F. Jinnah Colony, Karachi.
Office Equipment 44,250 15,218 29,032 12,375 Negotiation Mr. M.A. Khan
F.B. Area, Karachi.
Office Equipment 50,000 13,550 36,450 14,000 Negotiation Mr. Min-haj-uddin
N. Nazimabad, Karachi
============ ============ ============ ============
B/F 523,420 191,693 331,727 101,925
============ ============ ============ ============
Accumulated
Cost depreci- Book value Sale Mode of
Description Rupees ation Rupees Proceeds disposal Sold to
Rupees Rupees
C/F 523,420 191,693 331,727 101,925
Office Equipment 30,000 8,130 21,870 13,000 Negotiation Mr. M Amin
Civil Lines, Karachi
Office Equipment 30,857 8,361 22,496 22,866 Negotiation Atlas Honda Ltd.
S.I.T.E. Karachi
Office Equipment 55,000 14,905 40,095 15,000 Negotiation Mr. Amjad Hussain
Tipu Sultan Road Karachi
Office Equipment 106,511 29,975 76,536 -- Scrapped / --
Damaged
Office Equipment 32,500 8,807 23,693 24,193 Negotiation Kashif Electonics
A A. Shopping Centre
Electrical Equipment 61,850 28,418 33,432 31,200 Negotiation Mrs. Rasheeda Begum
D.H.A. Karachi.
Electrical Equipment 45,300 18,214 27,086 24,327 Negotiation Mr. M.H. Khan
F.B. Area, Karachi.
Electrical Equipment 6,730 1,824 4,906 4,700 Negotiation Mrs. Amina Abubaker
Sharfabad, Karachi.
Electrical Equipment 6,800 3,547 3,253 3,000 Negotiation M/s Gulf Electronics
Gizri Road, Karachi
Electrical Equipment 1,950 1,018 932 700 Negotiation Mr. Shahab Zafar
Gulistan-e-Jauhar, Karachi.
Electrical Equipment 30,769 8,338 22,431 23,000 Negotiation Mr. Faisal Jadoon
D.H.A. Karachi.
Electrical Equipment 20,000 10,434 9,566 7,000 Negotiation M/s General Air Conditioning
Electrical Equipment 7,250 3,782 3,468 4,000 Negotiation Mr. S. Khan
Karachi.
Electrical Equipment 17,103 8,923 8,180 10,000 Negotiation Mrs. I. Hussain
D.H.A. Karachi.
Electrical Equipment 40,000 20,868 19,132 20,000 Negotiation Mrs. S.A. Ahmed
D.H.A., Karachi.
Electrical Equipment 112,528 30,495 82,033 56,000 Negotiation Mr. Muhammad Aslam
Tariq Road, Karachi.
Electrical Equipment 247,500 67,072 180,428 180,428 Negotiation M/s Shirazi Trading Co.
I.I.Chundrigar Road, Karachi.
Electrical Equipment 22,700 6,152 16,548 5,000 Negotiation Mrs. Rashida Begum
D.H.A. Karachi.
Electrical Equipment 16,193 8,411 7,782 -- Scrapped / --
Damaged
Electrical Equipment 8,430 2,285 6,145 1,500 Negotiation Mrs. Rashida Begum
D.H.A. Karachi.
Electrical Equipment 7,250 3,397 3,853 2,000 Negotiation Muhammad Zaman Khan
Kutchery Road Karachi
Motor Vehicles 199,487 71,815 127,672 170,062 Negotiation Mr. Saeed Arshad
Shahrah-e-Liaquat, Karachi.
Motor Vehicles 2,769,200 996,912 1,772,288 1,800,000 Negotiation M/s Shoaib Corporation
North Nazimabad, Karachi.
Motor Vehicles 2,05t,282 1,001,025 1,050,257 750,000 Negotiation M/s Motor Cade
Buffer Zone, North Karachi.
Motor Vehicles 388,000 189,344 198,656 199,069 Negotiation Mrs. Arifa Ahmed
Alam Road, Lahore.
Motor Vehicles 593,400 118,680 474,720 516,922 Negotiation All Bhai Motors
P.E.C.H.S. Karachi.
Motor Vehicles 365,128 131,446 233,682 338,005 Negotiation Ms. Fauzia w/o Mohsin All
Khaleeq-uz-Zaman Road,
Karachi.
Motor Vehicles 702,125 414,535 287,590 287,590 Company's car Mr. Khaleeq-ur-Rahman Khan
Scheme Employee
Motor Vehicles 197,500 116,604 80,896 80,896 Company's car Mr. Nabeel Sayeed
Scheme Employee
Motor Vehicles 285,000 -- 285,000 300,000 Insurance Claim Muslim Insurance Co. Ltd.
Campbell' Street Karachi
Motor Vehicles 26,100 17,550 8,550 27,000 Negotiation Mr. Mohib All Khan
Baldia Town, Karachi.
============ ============ ============ ============
TOTAL 9,007,863 3,542,960 5,464,903 5,019,383
============ ============ ============ ============
1996 1995
Note Rupees Rupees
14. NET INVESTMENT IN LEASE FINANCE
Includes Rs.952,020 (1995: Rs. 18,440) in respect of associated companies. Maximum amount due at the end of any
month during the year was Rs.1,023,780 (1995: Rs.784,870).
15. LONG TERM INVESTMENTS
15.1 Government Securities
- Federal Investment Bonds 15.3 17,500,000 5,000,000
-------------- --------------
15.2 Shares in listed companies:
No. of Market
Ordinary Value Cost 1995
Ordinary shares of Rs. 10/- each shares Rupees Rupees Rupees
J.D.W. Sugar Mills Ltd. 298,800 597,600 2,988,000 2,988,000
Engro Chemicals Pakistan Ltd. 6,000 960,000 790,000 --
Muslim Insurance Co. Ltd. 24,944 510,105 538,790 --
Atlas Battery Ltd. 80,018 5,341,202 5,449,226 --
-------------- -------------- --------------
7,408,907 9,766,016 2,988,000
Less: Provision for diminution in value of investments 2,390,400 1,494,000
-------------- --------------
7,375,616 1,494,000
-------------- --------------
24,875,616 6,494,000
============ ============
15.3 These investments have been made in compliance with the State Bank of Pakistan's Rules for Non-Banking
  Financial Institutions to maintain 15% liquidity against certain liabilities. The rate of return ranges from 14% to
  15% per annum and matures on May 5, 1999; January 28, 2002 and November 22, 2004 respectively.
16. LONG TERM LOANS, DEPOSITSAND DEFERRED COSTS
Loan to executive - secured, considered good 16.1 1,765,329 1,758,945
Less: Current portion 196,194 170,604
-------------- --------------
1,569,135 1,588,341
Deposits 475,536 484,636
Deferred costs 16.2 7,244,809 5,411,214
-------------- --------------
9,289,480 7,484,191
============ ============
16.1 This represents house loan to the Chief Executive Officer which is repayable in 144 monthly instalments and
  carries mark-up @ 10% per annum. The loan is secured by registered mortgage of property and assignment
  of life insurance policy.
Maximum amount outstanding at the end of any month during the year against loan to Chief Executive was
Rs. 1,768,467 (1995: Rs. 1,758,945).
1996 1995
16.2 Deferred costs Note Rupees Rupees
Front-end fee on long term loans
Opening balance 12,879,841 12,879,841
Additions during the year 6,303,703 --
-------------- --------------
19,183,544 12,879,841
Amortized to-date 11,938,735 7,468,627
-------------- --------------
7,244,809 5,411,214
============ ============
The above expenditure is carried forward as it confers the benefit of the same to future years.
17. ADVANCES, DEPOSITS, PREPAYMENTSAND
OTHER RECEIVABLES
Advances - considered good
against assets to be leased out 15,200,000 35,018,000
for expenses 22,590 6,065
to employees 163,326 171,720
Others 50,000 --
-------------- --------------
15,435,916 35,195,785
============ ============
Current portion of loan to an executive 196,194 170,604
Prepayments 2,068,015 2,170,993
Due from associated undertakings 17.1 2,729,052 4,399,314
Accrued lease income 20,183,996 15,500,787
Accrued profit on long term investments 457,260 1,660,703
Accrued mark-up on long term deposits 2,716,534 --
Exchange difference refundable from SBP 64,134,348 23,263,012
Other assets 17.2 2,094,629 --
Other receivables 2,770,507 887,733
-------------- --------------
112,786,451 83,248,931
============ ============
17.1 Maximum amount due from associated undertakings at the end of any month during the year was Rs.4,399,314
  (1995: Rs.4,399,314).
17.2 This represents leased assets repossessed stated at principal amount receivable at the time of repossessing
  the asset. The company has finalized negotiation with a buyer in the subsequent period to sell it for a higher
  value.
1996 1995
Note Rupees Rupees
18. CASH AND BANK BALANCES
Cash in hand 26,157 25,552
Stamps in hand 11,060 16,820
Cheques in hand 2,380,490 2,169,195
With banks
on current accounts 3,485,009 3,200,614
on deposit account 18.1 8,292,000 --
on special account with SBP 1,100,000 --
-------------- --------------
15,294,716 5,412,181
============ ============
18.1 Foreign currency deposits 83,292,000 --
less: Credit facility availed 18.1 (a) 75,000,000 --
-------------- --------------
8,292,000 --
============ ============
18.1 (a) This represents a credit facility availed on a matching facility basis which is secured by a lien on the
foreign currency deposits and has been offset in accordance with policy stated in note 2.8. The rate of mark-
up ranges from 12.8% to 13.3% per annum. The maturity of credit facility and foreign currency deposits are
upto December 15, 1998.
19. INCOME FROM LEASING OPERATIONS
Income on lease contracts 267,662,559 199,893,451
Front-end fee 6,146,272 4,244,387
-------------- --------------
273,808,831 204,137,838
============ ============
20. OTHER INCOME
Return on long term investments 1,910,561 709,641
Return on short term investments 6,913,974 4,394,922
Exchange Gain 298,907 --
Mark-up on short term finance 1,469,917 3,782,271
Mark-up on loan to executive 176,988 174,729
Gain on cancellation of lease contracts 878,067 977,139
(Loss)/profit on sale of fixed assets (445,520) 162,042
Arrangement fee 210,130 --
Dividend Income 20,000 --
Interest on foreign currency deposits 2,716,534 --
Miscellaneous 625,111 694,972
-------------- --------------
14,774,669 10,895,716
============ ============
1996 1995
Note Rupees Rupees
21. FINANCIAL CHARGES
Mark-up on - long term loans 91,749,941 83,221,956
- short term finances 24,783,207 4,787,772
Mark-up on running finances 3,857,273 2,960,188
Exchange risk fee, commitment charges,
guarantee commission and other charges
on long term loans 52,083,143 44,915,823
Bank charges 2,135,870 2,114,539
Profit on certificates of investment 29,002,590 4,614,270
Loan administration fees 56,960 33,407
-------------- --------------
203,668,984 142,647,955
============ ============
22. ADMINISTRATIVE AND OPERATING EXPENSES
Salaries, allowances and benefits 10,509,003 9,883,715
Rent, rates and taxes 2,348,078 2,176,657
Gas, electricity and utilities 530,459 649,570
Printing and stationery. 1,220,004 777,091
Insurance 803,994 724,000
Repairs and maintenance 1,475,536 1,160,784
Travelling and conveyance 1,417,331 2,204,690
Staff training expenses 79,723 862,463
Membership and subscription 475,156 580,991
Canteen and entertainment expenses 1,286,361 837,746
Postage expenses 103,060 109,556
Telephone expenses 1,829,963 2,208,449
Legal and professional charges 287,732 419,909
Vehicle running expenses 1,320,431 940,653
Advertisement 574,763 599,871
Depreciation 2,915,437 2,487,355
Stamps and fees 232,261 76,229
Freight and packing 657,848 229,744
Security service charges 68,211 108,946
Penalty levied by State Bank of Pakistan 14,200 --
-------------- --------------
28,149,551 27,038,419
Auditors' remuneration
Audit fee 65,000 45,000
Taxation services 12,500 36,040
Special audit fee 45,000 45,000
Other certifications 19,470 --
Out-of-pocket expenses 8,295 6,698
-------------- --------------
150,265 132,738
Donations 22.1 5,000 --
Professional Tax 150,000 --
Miscellaneous 121,775 80,992
-------------- --------------
28,576,591 27,252,149
============ ============
22.1 Recipients of donation do not include any donee in whom any director or his spouse had an interest.
23. TAXATION
Provision for current taxation has been made on the basis of minimum tax under section 80D of the Income Tax
Ordinance, 1979.
Deferred taxation arising due to timing differences computed under the liability method is estimated at Rs.81.55
million of which Rs.7.26 million credit is in respect of the current year (1995:Rs.74.29 million, for the year Rs.34.54
million). The liability for deferred taxation is not likely to reverse in the foreseeable future and, therefore no provision
has been made in these accounts.
1996 1995
Note Rupees Rupees
24. TRANSACTIONS WITHASSOCIATED
UNDERTAKINGS
Insurance 803,994 724,000
Services Provided by 987,977 --
Services Provided to 66,114 854,405
Expenses charged by 22,405 183,133
Expenses charged to 2,443,442 4,399,314
Lease rentals 90,200 922,825
Cost of assets leased 810,500 --
Issue of Certificate of investment 15,000,000 --
Acquisition of fixed assets 6,585,018 1,537,924
Sale of fixed assets 203,294 --
-------------- --------------
27,012,944 8,621,601
============ ============
25. REMUNERATION OF CHIEF EXECUTIVE, DIRECTOR AND EXECUTIVES
Remuneration in respect of the above charged in these accounts is as follows:
         1996
Chief
Executive Director Executives Total
Rupees Rupees Rupees Rupees
Managerial
remuneration  716,793 690,000 2,536,228 3,943,021
Housing and
utilities 265,128 330,000 1,213,288 1,808,416
Medical and other
expenses  67,842 97,984 298,159 463,985
Provident fund 51,197 60,000 214,770 6,541,389
---------- ---------- ---------- ----------
1,100,960 1,177,984 4,262,445 6,541,389
========== ========== ========== ==========
Number of
persons 1 1 15 1 1 9
========== ========== ==========
         1995
Chief
Executive Director Executives Total
Rupees Rupees Rupees Rupees
Managerial
remuneration  1,003,200 620,000 1,690,740 3,313,940
Housing and
utilities 472,620 354,000 818,090 1,644,710
Medical and other
expenses  794,900 111,670 191,250 1,097,820
Provident fund 87,120 54,000 153,260 294,380
---------- ---------- ---------- ----------
2,357,840 1,139,670 2,853,340 6,350,850
========== ========== ========== ==========
Number of
persons 1 1 9
========== ========== ==========
25.1 The Chief Executive and Director are also provided with free use of telephones and company maintained cars.
25.2 Fees totalling Rs.7,500 (1995: Rs.8,000) were paid to four directors (1995: four directors) for attending Board
  Meetings during the year.
26. GENERAL
26.1 All figures have been rounded off to the nearest rupee.
26.2 Previous year's figures have been rearranged wherever necessary for the purpose of comparison.
THE ATLAS FAMILY Year of Establishment
Acquisition
ATLAS GROUP COMPANIES
Shirazi Investments (Pvt) Ltd. 1962
Atlas Honda Ltd. 1963
Atlas Battery Ltd. 1966
Shirazi Trading Co.(Pvt) Ltd. 1973
Atlas Warehousing (Pvt) Ltd. 1979
Atlas Office Equipment (Pvt) Ltd. 1979 *
Muslim Insurance Co. Ltd. 1980 *
Allwin Engineering Industries Ltd. 1981 *
Atlas Lease Ltd. 1989
Atlas Investment Bank Ltd. 1990
Honda Atlas Cars (Pakistan) Ltd. 1993
Honda Atlas Services (Pvt) Ltd. 1994
Atlas Information Technology (Pvt) Ltd. 1996
Google
 
Web Paksearch.com




Home | About Us | Contact | Information Resources