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DAWOOD  LEASING  COMPANY  LIMITED
Annual Report
June 1996
CONTENTS
Corporate Information 3
Notice of Meeting 4
Directors' Report 5
Auditors' Report 9
Balance Sheet 10
Profit & Loss Account 12
Statement of Changes in Financial Position 13
Notes to the Accounts 14
Pattern of Share Holding 22
CORPORATE INFORMATION
Board of Directors
Mr. Rafique Dawood Chairman & Chief Executive
Mr. Mehboob G. Rawjee
Mr. Ayaz Dawood
Mr. Asadullah Khawaja (Nominee of ICP)
Mr. A.K.M. Sayeed (Nominee of NIT)
Mr. Bashir A. Sheikh (Nominee of Al Faysal Inv. Bank)
Mr. S. Gulrez Yazdani (Nominee of SLIC)
Company Secretary
Mr. Salman Rasheed
Auditors
M. Yousuf Adil & Co.,
Chartered Accountants
Legal Advisors
Sattar & Sattar Associates
Mohsin Tayebaly & Co.
Bankers
ANZ Grindlays Bank plc.
Askari Commercial Bank Ltd.
Faysal Bank Ltd.
Habib Bank Ltd.
Muslim Commercial Bank Ltd.
Oman International Bank S.A.O.G.
Societe Generale, The French & International Bank
Registered Office
and Head Office
5-B, Lakson Square Building # 1,
Sarwar Shaheed Road, Karachi - 74200
Tel: (021) 568 7778-9
Fax: (021) 568 5830
Branch Office
2nd floor, Gulberg Heights, 6-H, Gulberg, Lahore
Tel: (042) 571 1308
Fax: (042) 571 0296
Share Department
513, Clifton Centre, Khayaban-e-Roomi,
Clifton Karachi-75600.
NOTICE OF SECOND ANNUAL GENERAL MEETING
Notice is hereby given that the Second Annual General Meeting of the Company will be held in the Auditorium
of the Institute of Chartered Accountants of Pakistan, G-31, Block 8, Clifton, Karachi on November 14, 1996 at
1130 hours to transact the following business:
1. To receive, consider and adopt the Audited Accounts of the Company for the year ended June 30, 1996
together with Directors' and Auditors' Reports thereon.
2. To approve payment of Cash Dividend to the Shareholders @ Rs. 1.25 per share of Rs. 10/= each for
the year ended June 30, 1996 as recommended by the Board of Directors.
3. To appoint Auditors to hold office till the conclusion of the Third Annual General Meeting and to fix
their remuneration. The retiring Auditors Messrs M. Yousuf Adil & Company, Chartered Accountants,
being eligible, offer themselves for re-appointment.
4. Any other business with the permission of the chair.
By order of the Board
Notes
1. The Register of members of the Company will remain closed from November 5, 1996 to
November 14, 1996 (both days inclusive).
2. A member entitled to attend and vote at a General Meeting is entitled to appoint a proxy to attend and
vote instead of him/her. No person other than a member shall act as a proxy.
3. An instrument appointing a proxy and the power-of-attorney or other authority (if any) under which it is
signed or a naturally certified copy of the power or authority, in order to be valid, must be deposited at
the Registered Office of the Company, at the latest by 1130 hours on November 12, 1996 and must be
duly stamped, signed and witnessed.
4. The Shareholders are requested to notify any changes in their address immediately.
DIRECTORS REPORT
We are pleased to present your Company's Second Annual Report for the year ended June 30, 1996. Dawood
Leasing commenced business operations on January 1, 1995 and this is our first report depicting a full year of
operation.
Operating Results July 1, 1995 January 1, 1995
to to
June 30, 1996 June 30, 1995
Rupees Rupees
Income
Lease Income 84,664,664 21,190,592
Non Lease Income 4,452,231 6,811,018
----------- -----------
89,116,895 28,001,610
=========== ===========
Profit Before Taxation 46,210,588 18,087,384
Provision for Taxation 1,273,702 170,000
----------- -----------
Profit after Taxation 44,936,886 17,917,384
Unappropriated Profit Brought Forward 4,333,907 --
----------- -----------
Profit Available for Appropriation 49,270,793 17,917,384
Appropriations
Transfer to Statutory Reserve 8,987,377 3,583,477
Transfer to General Reserve 7,500,000 10,000,000
Proposed Cash Dividend 31,250,000 --
----------- -----------
47,737,377 13,583,477
----------- -----------
Unappropriated Profit Carried Forward 1,533,416 4,333,907
=========== ===========
Earnings per Share 1.80 1.43
(Annualized)
Proposed Cash Dividend 1.25
Review of Operations
The lease income of your Company has increased from Rs. 21.19 million to Rs. 84.66 million during the year.
New leases worth Rs. 282.8 million have been written, taking the total leases written since the start of business
operations to Rs. 575.6 million. We are pleased to report that all lease rentals due for the year have been
received.
Dawood Leasing has followed a conservative policy for writing leases. We have continued to maintain a fairly
diversified lease portfolio with exposure to any sector not exceeding 16%. Last year, our maximum exposure
was 27% to the cement sector. That has now been reduced to 15%. This year, power generation is at the top of
the list with an exposure of 16%
Due to our conservative accounting approach, we had written-off the entire deferred expenditure of Rs. 2.3 million
in the last period accounts. This year, a general provision of Rs. 5.0 million has been made to build-up a reserve
for potential lease losses. The total of mandatory statutory reserve, general reserve and allowance for potential
lease losses is now 6.8% of net investment in lease finance.
During the year, Dawood Leasing has been successful in arranging for various lease syndications worth over
Rs. 1.0 billion. Thus, we have not only serviced our valued clients but also shared the risk and rewards with
other leasing companies. We strongly believe that leasing companies are complementary to each other. Lease
syndication not only provides the benefit of multiple risk evaluation criterion but also of risk sharing.
Your Company's target market has been towards infrastructure and related projects, small business as well as
consumer lease financing. We have also embarked upon leasing to the health sector and technical training
institutions.
As reported earlier, your Company had entered the consumer finance business by providing lease facilities to
Diners Club card holders. This scheme has been well received by the card holders and over 600 leases worth a
total of Rs. 21.7 million have been written so far. It is anticipated that, by June 1997, over 1,000 card leases will
be written.
We are pleased to report, that despite bearish stock market conditions, an amount of Rs. 2.2 million was
contributed by capital gains.
Future Business Prospects
In Pakistan, leasing still has a vast potential for growth, as less than 10% of the capital investment in the country
is being financed through leasing. Nevertheless, in the presence of sluggish economic growth and a growing
number of leasing companies, it is prudent to have a long-term view and strive for sustainable and steady
growth.
With this perspective, your Company plans to maintain a well diversified portfolio of leases. Our objective is to
create the right mix between big-ticket leasing, small enterprise leasing and consumer lease financing. Your
Company plans to continue to serve viable, environment friendly and socio-economically beneficial entities.
The 1996-97 budget has levied Central Excise Duty @ 1/12 of 1% per month on the lease financing. This levy is
a pass through cost and will make the lease finance expensive. This incremental cost, together with other taxes
levied on the corporate sector, may further hamper the pace of industrial growth in the country. The management
is fully aware of the challenging domestic environment in which it has to operate.
As a resource mobilisation measure, your Company is in the process of negotiating a number of additional credit
lines from both local and multilateral institutions. We are also in the process of preparing a comprehensive
scheme to launch Certificates of Investment (COIs). With the introduction of COIs, we hope to enhance our
competitive position in the leasing industry.
You would be pleased to know, that on the initiative of your Company, Pakistan Credit Rating Agency
(PACRA) has already started evaluating Dawood Leasing. We are confident that this credit rating, once done,
will add to the stockholders' faith in the Company.
Pattern of Share Holding
The pattern of Share-holding appears on page 22.
Auditors
The retiring auditors, Messrs M. Yousuf Adil & Company, Chartered Accountants, being eligible, offer
themselves for re-appointment.
Acknowledgment
We wish to record our appreciation for the continued support and confidence of our esteemed clients and
shareholders, especially the small investors, We value the support and guidance provided by the Ministry of
Finance, the State Bank of Pakistan and the Corporate Law Authority. We are grateful to our lease syndicate
partners and lending institutions for their support and confidence. The commitment, dedication and hard work
demonstrated by the management and staff members of the Company in achieving these results are fully rec-
ognized and acknowledged. We convey our special thanks to Sui Northern Gas Pipelines Limited and Habib
Bank Limited who are the largest customers of your Company.
We pledge to continue to work towards social responsibility and national development, in the best interests of
our Shareholders.
On behalf of the Board
Rafique Dawood
Chairman & Chief Executive
September 25, 1996
Karachi.
AUDITORS REPORT TO THE MEMBERS
We have audited the annexed balance sheet of Dawood Leasing Company 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 period 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 purpose 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 conformity 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 period was for the purpose of the company's
business; and
(iii) the business conducted, investments made and the expenditure incurred during the
period were in accordance with the object 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 period then ended; and
d) in our opinion, no Zakat was deductible at source under the Zakat and Ushr Ordinance, 1980.
M.Yousuf Adil & Co.,
Chartered Accountants
BALANCE SHEET AS AT JUNE 30, 1996
1996 1995
Note Rupees Rupees
SHARE CAPITAL AND RESERVES
Authorized
30,000,000 Ordinary Shares of Rs. 10/- each. 300,000,000 300,000,000
=========== ===========
Issued, Subscribed and Paid up
25,000,000 Ordinary Shares of Rs. 10/- each
Fully Paid in Cash 250,000,000 250,000,000
Statutory Reserve 3 12,570,854 3,583,477
General Reserve 4 17,500,000 10,000,000
Unappropriated Profit 1,533,416 4,333,907
-----------------------
281,604,270 267,917,384
REDEEMABLE CAPITAL 5 59,890,256 30,000,000
LIABILITY AGAINST ASSET SUBJECT TO 
FINANCE LEASE 6 165,424 187,742
LONG TERM LEASE DEPOSITS 7 40,605,063 27,154,120
ALLOWANCE FOR POTENTIAL LEASE LOSSES 5,000,000 --
CURRENT LIABILITIES
Short Term Borrowings 8 42,325,635 10,000,000
Current Maturity of Redeemable Capital 61,733,662 --
Current Maturity of Lease Liability 95,228 89,878
Accrued and Other Liabilities 9 15,635,987 4,933,328
Proposed Cash Dividend 31,250,000 --
Taxation 1,142,790 170,000
-----------------------
152,183,302 15,193,206
CONTINGENCY AND COMMITMENT 10
-----------------------
539,448,315 340,452,452
=======================
The annexed notes from 1 to 21 form an integral part of these accounts.
OPERATING ASSETS 11 11,221,240 12,441,246
NET INVESTMENT IN LEASE FINANCE
Minimum Lease Payments Receivable 655,910,575 348,480,877
Residual Value of Lease Assets 51,324,880 27,023,921
-----------------------
707,235,455 375,504,798
Unearned Income (196,659,686) (122,129,781)
-----------------------
Net Investment in Lease Finance 510,575,769 253,375,017
Current Portion of Net Investment in Lease Finance (121,544,593) (27,794,042)
-----------------------
389,031,176 225,580,975
CURRENT ASSETS
Current Portion of Net Investment in Lease Finance 121,544,593 27,794,042
Short Term Investments 12 7,188,400 30,647,860
Advances Against Lease Commitment 3,750,000 37,000,000
Advances, Deposits and Prepayments 13 1,438,887 550,483
Other Receivables 14 1,237,871 795,558
Cash and Bank Balances 15 4,036,148 5,642,288
-----------------------
139,195,899 102,430,231
-----------------------
539,448,315 340,452,452
=========================
Rafique Dawood
Chairman & Chief Executive
S. Gulrez Yazdani
Director
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED JUNE 30,1996
Six Months
ended June 30,
Note 1996 1995
Rupees Rupees
Income
Lease Income 84,664,664 21,190,592
Return on Deposits and Investments 16 2,164,772 4,148,662
Gain on Sale of Investments 2,227,421 2,662,356
Other Income 60,038 -
------------------------
89,116,895 28,001,610
Expenditure
Administration and Operating Expenses 17 14,448,630 6,517,877
Financial Charges 18 23,457,677 1,055,701
Allowance for Potential Lease Losses 5,000,000 -
------------------------
42,906,307 7,573,578
------------------------
Operating profit 46,210,588 20,428,032
Incorporation, Listing and Other - Net - 2,340,648
------------ ------------
Profit Before Taxation 46,210,588 18,087,384
Provision for Taxation
Current Year 546,042 170,000
Prior Year 727,660 -
1,273,702 170,000
Profit After Taxation 44,936,886 17,917,384
Unappropriated Profit Brought Forward 4,333,907 --
------------ ------------
Profit Available for Appropriation 49,270,793 17,917,384
Appropriations
Transferred to Statutory Reserve 8,987,377 3,583,477
Transferred to General Reserve 7,500,000 10,000,000
Proposed Cash Dividend 31,250,000 --
------------ ------------
47,737,377 13,583,477
------------ ------------
Unappropriated Profit Carried Forward 1,533,416 4,333,907
========================
The annexed notes from 1 to 21 form an integral part of these accounts
STATEMENT OF CHANGES IN FINANCIAL POSITION
FOR THE YEAR ENDED JUNE 30, 1996
1996 1995
Rupees Rupees
A. CASH FLOW FROM OPERATING ACTIVITIES
Profit after Taxation 44,936,886 17,917,384
Adjustment to Determine Net Cash Flows
Depreciation 2,021,468 1,947,642
Gain on Sale of Investment (2,227,421 ) (2,662,356)
Financial Charges 23,457,677 1,055,701
Gain on Sale of Assets (60,038) --
Allowance for Potential Lease Losses 5,000,000 --
----------- -----------
Operating Profit Before Working Capital Changes 73,128,572 18,258,371
Working Capital Changes
Advances, Deposits and Prepayments (888,404) (550,483)
Other Receivables (442,313) (795,558)
Accrued and Other Liabilities 3,525,230 3,901,342
Taxation 972,790 170,000
----------- -----------
3,167,303 2,725,301
----------- -----------
76,295,875 20,983,672
Less: Financial Charges Paid (16,280,248) (23,715)
----------- -----------
Net Cash Provided by Operating Activities 60,015,627 20,959,957
B. CASH FLOW FROM FINANCING ACTIVITIES
Issue of Share Capital -- 250,000,000
Redeemable Capital Obtained 105,000,000 30,000,000
Lease Finance Obtained 349,000 343,500
Redemption of Redeemable Capital (13,376,082)
Repayment of Lease Liability (365,968) (65,880)
Long Term Lease Deposits 13,450,943 27,154,120
Short Term Borrowings 32,325,635 10,000,000
----------- -----------
Net Cash Provided by Financing Activities 137,383,528 317,431,740
C. CASH FLOW USED IN INVESTING ACTIVITIES
Investment in Leases (Net) (257,200,752) (253,375,017)
Capital Expenditure (1,076,262) (15,388,888)
Proceeds from Sale of Fixed Assets 334,838 1,000,000
Investment in Marketable Securities (15,348,500) (60,418,604)
Sale Proceeds of Marketable Securities 41,035,381 32,433,100
Advance Against Lease Commitment 33,250,000 (37,000,000)
----------- -----------
Net Cash Used in Investing Activities (199,005,295) (332,749,409)
Net (decrease)/increase in cash and cash  ----------- -----------
equivalent (A + B + c) (1,606,140) 5,642,288
Cash and cash equivalent at the beginning 
of the year 5,642,288 -
----------- -----------
Cash and cash equivalent at the end of the year 4,036,148 5,642,288
=========================
NOTES TO THE ACCOUNTS - JUNE 30, 1996
1. THE COMPANY AND ITS OPERATIONS
The Company was incorporated on June 22, 1994 as a public limited company and is listed on the
Karachi and Islamabad Stock Exchanges. The Company primarily carries on the business of leasing.
2. SIGNIFICANT ACCOUNTING POLICIES
2.1 Accounting Convention
These financial statements have been prepared under the "historical cost convention".
2.2 Revenue Recognition
The Company follows the finance method in recognizing income on lease contracts. Under this
method the unearned income i.e, the excess of aggregate lease rentals and the estimated residual
value over the cost of the leased asset is deferred and then amortized over the terms of the lease,
so as to produce a constant rate of return on net investment in the lease.
Front end fee, commitment fee and other commissions are taken to income when realized.
The transaction of purchase and resale obligation of Government Securities at contracted rates for
specified periods of time are recorded at the contracted purchase price and the differential of the
contracted purchase and resale prices is taken to income.
Return on securities is recognized on accrual basis.
Dividend income is recognized at the time of closure of the shares transfer book of the company
declaring the dividend.
2.3 Staff Retirement Benefits
The Company operates a funded contributory Provident Fund Scheme for its employees. The
employees are also entitled to gratuity after completion of three years continuous service in accor-
dance with the service rules of the Company.
2.4 Allowance for Potential Lease Losses
The Company, as a prudent policy, makes a general provision at a reasonable level, which in the
judgment of management is adequate to provide for potential losses on lease portfolio that can be
reasonably anticipated. The allowance is created by charge to income.
2.5 Taxation
The charge for current taxation is based on taxable income at the current rates of taxation. On
lease income, it is computed as if all leases are operating leases, after taking into account
allowances available for depreciation in respect of fixed assets under lease.
The tax effect for deferred taxation is calculated using the liability method on all major timing
differences which are expected to reverse in foreseeable future. As a measure of prudence
deferred tax debits are not accounted for.
2.6 Tangible Fixed Assets and Depreciation
Operating assets are stated at cost less accumulated depreciation. Depreciation is charged to
income, applying the straight line method whereby cost of an asset is written-off over its estimated
useful life. A full year's depreciation is charged on all assets acquired during the year while no
depreciation is charged on assets disposed off during the year.
Normal repairs and maintenance are charged to income as and when incurred. Gains and losses on
disposal, if any, are taken to the Profit and Loss Account.
2.7 Investments
Short term investments are stated at lower of moving average cost and market/break-up value on
aggregate portfolio basis.
3. STATUTORY RESERVE
1996 1995
Rupees Rupees
Opening 3,583,477 --
Transferred during the year 8,987,377 3,583,477
--------------------------
12,570,854 3,583,477
==========================
The reserve is created by transferring 20% of the after tax profit for the year which is required
under Rule-3 of State Bank of Pakistan's Prudential Regulations for Non-Banking Financial
Institutions.
4. GENERAL RESERVE
1996 1995
Rupees Rupees
Opening balance 10,000,000 -
Transferred during the year 7,500,000 10,000,000
--------------------------
17,500,000 10,000,000
==========================
5. REDEEMABLE CAPITAL - SECURED (NON-PARTICIPATORY)
Term Finance Certificate Morabaha Finance Under 1996 1995
Finance Mark-up Rupees Rupees
I II Arrangement
Opening Balance -- -- 30,000,000 -- 30,000,000 30,000,000
Obtained during the year 50,000,000 50,000,000 -- *5,000,000 105,000,000 --
----------- ----------- ----------- ----------- ----------- -----------
50,000,000 50,000,000 30,000,000 5,000,000 135,000,000 30,000,000
Paid during the year 6,688,041 6,688,041 -- -- 13,376,082 --
----------- ----------- ----------- ----------- ----------- -----------
43,311,959 43,311,959 30,000,000 5,000,000 121,623,918 30,000,000
Payable within one year
shown under current
liabilities 15,182,899 15,182,899 30,000,000 1,367,864 61,733,662 --
----------- ----------- ----------- ----------- ----------- -----------
Rupees 28,129,060 28,129,060 -- 3,632,136 59,890,256 30,000,000
=========== =========== =========== =========== =========== ===========
Repayment period Jan 17, 1996- Mar 03,1996- Lumpsum on Nov 06, 1996-
Aug 17, 1998 Oct 23, 1996 Oct 23, 1996 Mar 06, 1999
Sale Price Rs. 50,000,000 50,000,000 30,000,000 20,000,000
Purchase Price Rs. 68,882,214 68,882,214 38,063,014 31,708,440
Prompt Payment Bonus Rs. 2,503,968 2,503,968 -- 4,357,080
These are secured against hypothecation of all properties and assets including book debts of the Company ranking
pari passu with each other and with the charge created to secure short term borrowing (Refer Note 8).
* The sanctioned amount of finance under mark-up arrangement is Rs. 20 Million out of which Rs. 5 Million
was received on May 07, 1996.
1996 1995
Rupees Rupees
6. LIABILITY AGAINST ASSET SUBJECT
   TO FINANCE LEASE
Opening balance 311,970
Acquired during the year 349,000 343,500
------------- -------------
660,970 343,500
Paid during the year (365,418) (31,530)
------------- -------------
295,552 311,970
Security deposit (34,900) (34,350)
------------- -------------
260,652 277,620
Payable within one year
shown under current liabilities (95,228) (89,878)
------------- -------------
165,424 187,742
=========================
This represents a vehicle acquired under finance lease agreement from a leasing company.
The cost plus financial charges are payable in 36 monthly installments of Rs. 11,501/-. Implicit rate of
return is 17% per annum.
The future minimum lease payments to which the company is committed as at June 30, 1996 are as
under:-
Year ended June 30, Rupees
1997 138,012
1998 138,012
1999 57,505
------------
333,529
Financial Charges Allocated to Future Period (72,877)
------------
260,652
=============
7. LONG TERM DEPOSITS
These represent the security deposits received from lessees under lease contracts and are repayable at
the expiry of their respective lease period.
8. SHORT TERM BORROWINGS
Limit in 1996 1995
Rs. million Rupees Rupees
Secured
From Commercial Bank
Morabaha Finance (8.1) 15 15,000,000 5,000,000
Running Finance (8.2) 35 17,325,635 -
From Investment Bank
Finance against bills (8.3) 10 10,000,000 5,000,000
-------------------------
42,325,635 10,000,000
==========================
Facilities are secured against hypothecation of all properties and assets including book debts
ranking pari passu with each other and with the charge created to secure redeemable capital
(Refer Note 5).
8.1 The repurchase price of the facility is Rs. 16.368 (Million).
8.2 It is subject to mark-up of Rs. 0.5480 per Rupees 1,000/- per day.
8.3 It is subject to mark-up of Rs. 0.5137 per Rupees 1,000/- per day.
1996 1995
Rupees Rupees
9. ACCRUED AND OTHER LIABILITIES
Mark-up on Secured
Redeemable Capital 7,048,668 1,009,178
Short-term Borrowings 1,160,747 22,808
Advance from Clients 6,108,086 1,349,203
Withholding Tax 51,616 653,012
Accrued Expenses 660,477 295,331
Syndication and Front End Fee 500,000 1,285,554
Others 106,393 318,242
-------------------------
15,635,987 4,933,328
==========================
10. CONTINGENCY AND COMMITMENTS
10.1 Contingency
A portion of the tax demand amounting to Rs. 1.2 Million in respect of assessment year 1995-96
not acknowledged as in the opinion of the management, the company has good case and
favorable decision is expected from the Income Tax Appellate Commissioner, where appeal is
pending.
10.2 Commitments
Lease financing contracts committed but not executed at the balance sheet date were Rs. 126.8
million (1995: Rs. 17.3 million).
11. OPERATING ASSETS
Cost at July  Additions/ Cost at June Accumulated Book Value Depreciation  Rate
Particulars 01, 1995  (Disposals) 301,996 Depreciation at at June 30, for the year %
during the  June 30, 1996 1996
year
Company Owned
Lease improvements 5,213,738 315,126 5,528,864 1,074,260 4,454,604 552,886 10
Furniture and fixture 2,895,613 -- 2,895,613 579,122 2,316,491 289,561 10
Office equipment 236,700 96,490 333,190 56,989 276,201 33,319 10
Computer Equipment 955,309 315,646 1,270,955 222,627 1,048,328 127,096 10
Vehicles 4,744,028 -- 4,744,028 1,897,612 2,846,416 948,806 20
------------ ------------ ------------ ------------ ------------ ------------
14,045,388 727,262 14,772,650 3,830,610 10,942,040 1,951,668
Under lease
Vehicle 343,500 349,000 349,000 69,800 279,200 69,800 20
(343,500)
Rupees 14,388,888 1,076,262 15,121,650 3,900,410 11,221,240 2,021,468
(343,500)
============ ============ ============ ============ ============ ============
1995 Rupees 15,388,888 14,388,888 1,947,642 12,441,246 1,947,642
(1,000,000)
============ ============ ============ ============ ============ ============
11.1 Disposal of assets
Particulars Mode of Sold to Cost Accumulated Book Sale
Disposal Depreciation Value Proceeds
Vehicle Insurance Orient Insurance
Claim Co. Ltd. Karachi.
Rupees 343,500 68,700 274,800 334,838
============= ============= ============= =============
Rupees 1995 1,000,000 - 1,000,000 1,000,000
============= ============= ============= =============
12. SHORT TERM INVESTMENTS
Market/
Breakup
No. of Value 1996 1995
Shares Rupees Rupees Rupees
Quoted
Sitara Chemical Industries Ltd. - - - 16,908,000
Adamjee Insurance Company Ltd. 21,075 2,929,425 2,578,500 2,578,500
Pakistan State Oil Company Ltd. 600 252,000 162,400 703,720
Paramount Leasing Ltd. 9,900 69,300 99,000 249,000
KASB Premier Fund Ltd. 50,000 245,000 500,000 500,000
ICI Pakistan Ltd. 5,000 269,250 343,500 -
25th I.C.P. Mutual Fund 500 3,625 5,000 -
--------------- --------------- ------------
3,768,600 3,688,400 20,939,220
Unquoted
Fidelity Mutual Fund Ltd
Chief Executive - Mr. Najam Ali 250,000 2,500,000 2,500,000 2,500,000
Kohinoor Energy Ltd. - - - 6,208,640
Government Securities
Federal Investment Bonds- 10 years - 1,000,000 1,000,000
-------------------------
7,188,400 30,647,860
=========================
13. ADVANCES, DEPOSITS AND PREPAYMENTS
Advance Income Tax 198,408 300,912
Other Advances 12,000 48,232
Deposits 41,000 19,200
Prepayments 1,187,479 182,139
-------------------------
1,438,887 550,483
=========================
1996 1995
Rupees Rupees
14. OTHER RECEIVABLES
Considered Goods
Accrued Profit / Interest 381,996 505,975
Lease Arrangement Fee - 243,860
Dividend 33,845 33,750
Others 822,030 11,973
-------------------------
1,237,871 795,558
=========================
15. CASH AND BANK BALANCES
Cash in Hand 19,857 18,154
Cash with Banks
In Deposit Accounts (15.1) 3,970,370 5,622,069
In Current Accounts 45,921 2,065
-------------------------
4,036,148 5,642,288
=========================
15.1 This includes Rs. 50,000/- deposited with State Bank of Pakistan, to maintain liquidity
requirements of Prudential Regulations
16. RETURN ON DEPOSITS AND INVESTMENTS
Profit on
Bank Deposits 347,123 2,853,000
PLS Accounts (Net of Zakat) 1,269,675 565,572
Interest on Securities 335,677 690,340
Dividend 212,297 39,750
-------------------------
2,164,772 4,148,662
=========================
17. ADMINISTRATION AND OPERATING EXPENSES
Salaries and Benefits 6,111,920 2,493,864
Directors' Meeting Fees 1,500 3,000
Rent, Rates and Taxes 179,471 88,534
Insurance 431,206 69,296
Legal and Professional 483,671 152,687
Travelling and Conveyance 1,047,896 131,231
Postage and Telephone 877,004 401,053
Utilities 213,461 60,877
Printing and Stationery 582,158 236,870
Vehicles Running and Maintenance 426,169 165,653
Entertainment 436,145 156,003
Advertisement 548,150 80,805
Repairs and Maintenance 194,188 132,657
Auditors' remuneration ( 17.1 ) 112,625 35,000
Share Department 497,330 279,000
Depreciation 202,1468 1,947,642
Fees and Subscription 186,261 --
Donation (17.2) 18,500 --
Others 79,507 83,705
------------ ------------
14,448,630 6,517,877
========================
1996 1995
Rupees Rupees
17.1 Auditors' remuneration
Statutory Audit fee 50,000 35,000
Special Audit fee 28,000 -
Tax and other Consultancy 24,000 -
Out of Pocket 10,625 -
-------------------------
112,625 35,000
=========================
17.2 Directors have no interest in the donee's fund.
18. FINANCIAL CHARGES
Mark-up on
Redeemable Capital 20,251,819 1,009,178
Short Term Borrowings 2,828,350 22,808
Financial Charges on Lease Liability 53,523 18,185
Documentation, Project Examination Fee
and Bank Charges 323,985 5,530
-------------------------
23,457,677 1,055,701
=========================
19. TAXATION
The assessment of the first accounting year ended June 30, 1995, (Assessment year 1995-96) has been
finalized. The company has filed appeal against the order of the assessing officer and the appeal is
pending with the Income Tax Appellate Commissioner. The deferred taxation works out to be a debit
balance.
20. REMUNERATION TO DIRECTORS AND EXECUTIVES
June 1996 June 1995
Chief Chief
Executive  Directors Executive Executive  Directors Executive
Managerial remuneration 866,329 532,258 1,653,226 387,096 483,871 561,270
Housing and utilities 476,481 292,742 909,274 212,904 266,129 308,730
------------ ------------ ------------ ------------ ------------ ------------
Rupees 1,342,810 825,000 2,562,500 600,000 750,000 870,000
============ ============ ============ ============ ============ ============
Number of Persons 1 2 6 1 2 5
20.1 The Chief Executive, Directors and Executives are also provided with free use of company
  owned cars, medical insurance cover, provident fund contribution and travelling, the
  monetary value of these are Rs. 683,000 (1995: Rs. 216,000) approximately.
20.2 Fees of Rs. 1,500/- were paid to three non - executive directors for attending Board meetings.
21. GENERAL
Prior year's figures have been re-arranged for the purpose of comparison wherever necessary.
The comparative figures in Profit & Loss Account are for six months period, as the company started
operation from January 1, 1995.
PATTERN OF HOLDING AS AT JUNE 30, 1996
Number of SHARE             HOLDING Shares
Share Holders From                 To Held
56 1 100 5,600
4,664 101 500 2,307,000
115 501 1000 92,300
73 1001 5000 191,500
25 5001 10000 231,100
11 10001 15000 142,100
15 15001 20000 293,800
10 20001 25000 241,300
11 25001 30000 325,700
1 30001 35000 35,000
2 35001 40000 80,000
1 40001 45000 41,000
6 45001 50000 298,000
2 55001 60000 111,600
1 60001 65000 65,000
1 75001 80000 80,000
1 85001 90000 87,100
6 95001 100000 600,000
1 100001 105000 102,500
1 110001 115000 112,000
1 125001 130000 130,000
1 220001 225000 222,300
1 235001 240000 240,000
5 245001 250000 1,250,000
1 290001 295000 294,200
1 370001 375000 374,000
1 410001 415000 410,600
5 495001 500000 2,500,000
1 795001 800000 796,500
1 885001 890000 888,400
1 945001 950000 950,000
3 995001 1000000 3,000,000
1 1495001 1500000 1,500,000
1 1515001 1520000 1,516,400
1 2480001 2485000 2,485,000
1 2995001 3000000 3,000,000
----------- -------------
5,029 25,000,000
=========== =============
The slabs representing NIL holding have been omitted
Categories of Shareholders
Number of Shares Held Percentage
Shareholders
Particulars
Joint Stock Companies 10 4,035,200 16.14
Modaraba Companies 3 929,300 3.72
Insurance Companies 4 2,524,500 10.10
Investment Companies 14 8,173,100 32.69
Individuals 4998 9,337,900 37.35
------------ ------------ ------------
5029 25,000,000 100.00
------------ ------------ ------------
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