| Ghemni Leasing Company Limited |
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(Fifth Annual Report
1996) |
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| CONTENTS |
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Page No. |
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| 1.
Company Information |
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2 |
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| 2. Notice of Annual General
Meeting |
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3 |
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| 3.
Financial Highlights |
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4 |
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| 4.
Graphic Presentation |
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5 |
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| 5.
Chairman's Review |
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11 |
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| 6.
Directors' Report |
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13 |
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| 7.
Pattern of Shareholding |
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14 |
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| 8.
Auditors' Report to the Members |
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15 |
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| 9.
Balance Sheet |
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16 |
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| l0.
Profit & Loss Account |
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17 |
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| 11.
Statement of changes in Financial Position |
18 |
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| 12.
Notes to the Accounts |
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19 |
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| 13.
Form of Proxy |
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Company Information |
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| BOARD
OF DIRECTORS |
|
| Mr.
Salahuddin Qureshi |
|
Chairman |
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| Mr.
Raza Kuli Khan Khattak |
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| Mr.
Ahmed Kuli Khan Khattak |
|
| Begum
Tehmina Habibullah Khan |
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| Mr.
Humayaun Sultan Mufti |
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| Dr.
Adil Sultan Mufti |
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| Mr.
Shahid Ghaffar |
|
| Mr.
Mushtaq Ahmed Khan |
|
| Mr.
Kazunori Namekata |
(Alternate Mr. M. Tanaka) |
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| Mr.
Haroon A. Zuberi |
|
Chief Executive |
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| Registered
Office |
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| 2nd
Floor, State Life Building, |
Legal Advisors |
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| 34,
The Mall, Peshawar Cantt. |
Shaukat Law Associates, |
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|
217, Central Hotel
Annexe, |
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| Head Office |
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|
Abdullah Haroon Road, |
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| l-D,
3rd Floor, Sunset Tower, |
Karachi. |
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| Sunset
Boulevard, Karachi. |
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Ph: 5681495, 5686223 |
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| Ph:
5890751-4, 5880687 |
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| Fax:
5888513, 5890755 |
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Share Registrars |
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|
THK Associates (Pvt) Ltd. |
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| Bankers
of the Company |
|
Ground Floor, |
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| Allied
Bank of Pakistan Ltd. |
Shaikh Sultan Trust, |
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| National
Bank of Pakistan Ltd. |
Building No. 2, |
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| Societe Generale, |
|
Beaumont Road, |
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| The
French & International Bank |
Karachi-75530 |
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| Standard
Chartered Bank |
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Ph: 5686658, 5685687 |
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| The
Bank of Tokyo |
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|
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| Auditors |
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| Taseer
Hadi Khalid & Co. |
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| Chartered
Accountants, |
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| 1 st Floor, |
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| Shaikh
Sultan Trust, |
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| Building
No. 2, |
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| Beaumont
Road, |
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| Karachi-75530 |
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| Ph:
5681912, 5682290, 5680934, 5671761-63 |
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|
Notice of Annual General
Meeting |
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| Notice
is hereby given that the Fifth Annual General Meeting of the Company will be
held on 13th day of |
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| November,
1996 at Hotel Pearl Continental, Peshawar Cantt., Peshawar at 12:00 noon to
transact the following |
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| business: |
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| ORDINARY
BUSINESS |
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| --
To receive, consider and adopt the Audited Accounts together with the
Directors' and Auditors' Report for |
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| the
eighteen (18) months ended 30thJune, 1996. |
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|
| --
To approve 20% cash dividend approved by the Board of Directors (10% final
and 10% interim). |
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|
| --
To appoint Auditors and fix their remuneration. The present Auditors Messrs.
Taseer Hadi Khalid & Go., |
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| Chartered
Accountants, retire and being eligible offer themselves for re-appointment. |
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| OTHER
BUSINESS |
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| To
transact any other business as may be placed before the meeting with the
permission of the Chairman. |
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|
By Order of the Board |
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|
Haroon A. Zuberi |
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| Karachi:
22nd October, 1996 |
Chief Executive |
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| NOTES: |
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| 1.
The Share Transfer Books of the company will remain closed from 6th November,
1996 to 13th November, |
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| 1996
(both days inclusive). |
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|
| 2.
A member entitled to attend and vote at this meeting may appoint another
member as his/her proxy to |
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| attend the meeting and vote for him/her. No
person shall act as a proxy who is not a member of the |
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| company. Proxies h~ order to be effective
must be received by the Company not less than 48 hours before |
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| the meeting. |
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| 3.
Shareholders are requested to immediately notify the Company of any change in
their addresses. |
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|
| Ghemni
Leasing Company Limited |
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| l-D,
3rd Floor, Sunset Tower, |
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| Sunset
Boulevard, D.H.A., Karachi-75500 |
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| Tel:
5890751-4, 5880687 Fax: 5888513, 5890755 |
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| E-mail:
ghemni@glc.khi.erum.com.pk |
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| Internet:
glc@biruni.erum.com.pk |
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|
Financial Highlights |
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|
(Rs. in Million) |
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|
30 June, 1996 |
31 Dec. 1994 |
31 Dec. 1993 |
31 Dec. 1992 |
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|
|
(18 months) |
(12 months) |
(12 months) |
(6 months) |
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|
|
|
| Gross Income |
|
137.60 |
66.42 |
30.09 |
8.97 |
|
| Gross
Expenses |
|
113.98 |
49.60 |
18.56 |
3.80 |
|
| Net Profit |
|
22.93 |
16.32 |
11.39 |
5.16 |
|
| Net
Investment in Leases |
|
496.88 |
339.58 |
191.29 |
55.52 |
|
| Total Equity |
|
160.77 |
72.87 |
66.55 |
55.16 |
|
| Total Assets |
|
581.05 |
438.00 |
259.03 |
126.18 |
|
|
| INVESTMENT
IN SHARES |
|
| Cost |
|
15.26 |
15.75 |
3.24 |
5.70 |
|
| Provision
for Diminution in value of Shares |
4.27 |
1.70 |
- |
- |
|
| Book Value |
|
10.99 |
14.06 |
4.57 |
5.91 |
|
| Market Value |
|
6.46 |
14.06 |
4.57 |
5.91 |
|
|
| LEASE
PORTFOLIO (Disbursement during the year) |
|
| Plant
& Machinery |
|
66.33% |
77.00% |
78.60% |
74.00% |
|
| Equipments |
|
9.23% |
11.50% |
9.20% |
10.80% |
|
| Private
Vehicles |
|
9.67% |
11.00% |
9.40% |
8.10% |
|
| Commercial
Vehicles |
|
14.77% |
0.50% |
2.80% |
7.10% |
|
|
|
-------- |
-------- |
-------- |
-------- |
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|
100.00 % |
100.00 % |
100.00 % |
100.00 % |
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|
| FINANCIAL
RATIOS |
|
| Current
Ratio |
|
1.38:1 |
1.03:1 |
1.34:1 |
5.33:1 |
|
| Debt
Equity Ratio |
|
54:46 |
60:40 |
57:43 |
47:53 |
|
| Return
on Average Equity |
|
20.31% |
23.40% |
18.72% |
-- |
|
| Earning
Per Share (Rs.) |
|
3.77 |
3.26 |
2.28 |
1.03 |
|
| Break-up
Value of Share (Rs.) |
|
19.46 |
14.57 |
13.31 |
11.03 |
|
| Leverage
(times) |
|
2.61 |
5.01 |
2.89 |
1.29 |
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|
Chairman's Review |
|
|
| It
gives me great pleasure in presenting to you the 5th Annual Report together
with the Audited Accounts for the 18 |
|
| months
ended 30th June, 1996. |
|
|
| REVIEW
OF OPERATIONS: |
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| The
economic condition of the country remained subdued during the period under
review. However, your company |
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| performed
well considering the overall economic situation and stiff competition. |
|
|
| During
the period under review, your company faced problems in disbursement because
only a limited number of good |
|
| customers
were available for leasing. Further, due to slow down of economic activities,
setting up of new projects as well as |
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| BMR
also remained shy. The main emphasis remained on building of quality and tax
efficient lease portfolio. The |
|
| maximum
exposure of 16.80% was taken in Cement sector, followed by Transport &
Communication and Food & |
|
| Beverages,
constituting of 14.43% and 9.55% respectively of the total disbursement
during the period under review. |
|
|
| The
operating results of the company were encouraging as compared to overall
economic condition. The profit before tax |
|
| and
provision for doubtful debts rose from Rs. 17.27 million to Rs. 24.90
million, registering a growth of 44.18%. The total |
|
| revenue
increased to Rs. 137.60 million from Rs. 66.42 million, whereas lease income
increased from Rs. 63.54 million to |
|
| Rs.
134.96 million, an increase of Rs. 71.42 million. |
|
|
| On
the expense side, total expenses other than provisions increased to Rs.
112.70 million from Rs. 49.14 million. The |
|
| major
contribution towards expenses was that of financial charges, which increased
from Rs. 37.51 million to Rs. 87.67 |
|
| million.
Since finance is the lifeblood of any financial institution and specially for
growth it is unavoidable and lately there |
|
| has
been a liquidit5, crunch in the local market, which has increased the cost of
funds. |
|
|
| Further,
the company also had to make provision for diminution in the value of shares
which amounted to Rs. 4.27 million. |
|
| Profit
after tax and provision amounted to Rs. 22.93 million as against Rs. 16.31
million for the year ended 31st December, |
|
| 1994.
The statutory and contingency reserve amounted to Rs. 4.59 million and Rs.
3.17 million respectively. |
|
|
| During
the period under review, company's Paid-up Capital increased through right
issue from Rs. 50.0 million to Rs. 82.6 |
|
| million.
As a result, the company's Earning Per Share (EPS) has diluted. However,
Weighted Average EPS stood at Rs. 3.77 |
|
| per
share as against Rs. 3.26 per share for the year ended 31st December, 1994.
The current ratio has also improved to |
|
| 1.38:1
as compared to 1.03:1 of the last year. |
|
|
| The
company is also reducing its outstanding exposure in textile sector due to
the problems faced by this sector. So far the |
|
| company
has reduced its outstanding exposure from 28.31% as on 31st December, 1994 to
17.65% as on 30thJune, 1996. |
|
|
| The
government has also levied a Central Excise Duty @ 1%, with effect from 1st
July, 1996, which will affect the leasing |
|
| business
in future. |
|
|
| DIVIDEND: |
|
| The
Board of Directors of the company in their meeting held on 12th March, 1996,
announced a 10% interim cash |
|
| dividend.
Apart from interim dividend, the Board is pleased to announce a 10% final
cash dividend. |
|
|
|
| FUNDINGS: |
|
| During
the period under review, the financial sector remained under stress,
specially due to the pressure of State Bank of |
|
| Pakistan
on commercial banks to bring their lendings down. Recently the State Bank has
issued a Credit Plan to the |
|
| commercial
banks for extending credit facilities to different sectors of the economy.
Despite liquidity crunch in the |
|
| financial
market, your company had managed to arrange fresh credit facilities of Rs.
259.75 million during the period |
|
| under
review and is still trying to arrange long term credit lines from
multilateral agencies. |
|
|
| CERTIFICATES
OF INVESTMENT (COIs): |
|
| Permission
by Corporate Law Authority (GLA) to issue COIs by your company was also
granted in the month of June, 1996. |
|
|
|
| RECOVERY: |
|
| Due
to adverse law and order situation of Karachi in particular and overall
country in general, the economic activities |
|
| remained
slow, due to which almost all the sectors of the economy were affected. As a
result your company faced problems |
|
| in
recovery, but with the timely interference of management and intensive
recovery efforts, rentals were recovered almost |
|
| on time. |
|
|
| FUTURE
PROSPECTS: |
|
| We
are optimistic that in the next few months, the economic situation will
further improve and new industries as well as |
|
| BMR
activities will start again. The improvement in economic activities mean more
business for financial sector. |
|
|
| STAFF: |
|
| In
order to survive in the competitive sector of leasing, we have hired a number
of qualified professionals, who will provide |
|
| their
full support for the betterment of the company. Further, to keep them abreast
with the latest technologies and |
|
| concepts
in the leasing business, we provide them every opportunity to attend the
training workshops and seminars etc. to |
|
| enhance
their knowledge and skill. |
|
|
|
| ACKNOWLEDGMENT: |
|
| I
would also like to acknowledge the support and guidance of Regulatory
Authorities, DFI's, Banks and Institutions, which |
|
| has
enabled us to operate effectively during the period. My special appreciations
are for the members of our team, for their |
|
| hard
work, motivation and professional skills which has led us in achieving the
set targets for the period under review. |
|
|
|
|
Directors' Report |
|
|
|
|
| The
directors have pleasure in submitting the Fifth Annual Report together with
Audited Accounts and the |
|
| Auditors'
Report thereon for 18 months ended 30thJune, 1996. |
|
|
| FINANCIAL RESULTS |
|
|
|
|
Rupees |
|
|
|
1995-96 |
1994 |
|
|
|
|
(18 months) |
(12 months) |
|
|
| Total Income |
|
|
137,602,549 |
66,416,153 |
|
| Expenses |
|
|
113,982,542 |
49,601,575 |
|
|
|
|
---------- |
---------- |
|
| Net
profit before tax |
|
|
23,620,007 |
16,814,578 |
|
| Taxation
- Current |
|
|
688,012 |
500,000 |
|
|
|
|
---------- |
---------- |
|
| Profit
after taxation |
|
|
22,931,995 |
16,314,578 |
|
| Profit
brought forward |
|
|
9,492,254 |
9,415,626 |
|
|
|
|
---------- |
---------- |
|
| Profit
available for appropriation |
|
32,424,249 |
25,730,204 |
|
| Appropriations |
|
| Transfer
to statutory reserve |
|
4,586,399 |
3,262,916 |
|
| Transfer
to contingency reserve |
|
3,171,582 |
2,975,034 |
|
| Interim
cash dividend @ 10% |
|
8,259,700 |
- |
|
| Proposed
final cash dividend @ 10% (1994: 20%) |
8,259,700 |
10,000,000 |
|
|
---------- |
---------- |
|
|
|
|
24,277,381 |
16,237,950 |
|
|
|
|
---------- |
---------- |
|
| Unappropriated
profit carried forward |
|
8,146,868 |
9,492,254 |
|
|
|
|
========== |
========== |
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|
|
|
|
|
| AUDITORS |
|
| The
present Auditors Messrs. Taseer Hadi Khalid & Co., Chartered Accountants,
retire and being eligible |
|
| offer
themselves for re-appointment. |
|
|
| PATTERN
OF SHAREHOLDING |
|
| The
pattern of shareholding is annexed. |
|
|
| STAFF |
|
| The
directors would like to place on record their appreciation of the hard work
and dedication of staff |
|
| members
in achieving the results being presented. |
|
|
|
|
Pattern of Shareholdings
as at 30 June, 1996 |
|
|
| No. of |
H a v i n g |
S h a r e s |
Shares |
Percentage |
|
| Share Holders |
From |
To |
Held |
|
|
| 82 |
1 |
100 |
8,200 |
0.10 |
|
| 389 |
101 |
500 |
169,000 |
2.05 |
|
| 153 |
501 |
1,000 |
150,400 |
1.82 |
|
| 67 |
1,001 |
5,000 |
153,600 |
1.86 |
|
| 21 |
5,001 |
10,000 |
165,200 |
2.00 |
|
| 7 |
l0,001 |
15,000 |
83,500 |
1.01 |
|
| 4 |
15,001 |
20,000 |
75,700 |
0.92 |
|
| 2 |
25,001 |
30,000 |
56,000 |
0.68 |
|
| 1 |
30,001 |
35,000 |
31,000 |
0.38 |
|
| 1 |
50,001 |
55,000 |
52,200 |
0.63 |
|
| 1 |
55,001 |
60,000 |
56,300 |
0.68 |
|
| 1 |
155,001 |
160,000 |
156,400 |
1.89 |
|
| 1 |
295,001 |
300,000 |
300,000 |
3.63 |
|
| 1 |
335,001 |
340,000 |
337,700 |
4.09 |
|
| 1 |
495,001 |
500,000 |
500,000 |
6.05 |
|
| 1 |
1,245,001 |
1,250,000 |
1,250,000 |
15.13 |
|
| 1 |
1,810,001 |
1,815,000 |
1,814,500 |
21.97 |
|
| 1 |
2,895,001 |
2,900,000 |
29,000,000 |
35.11 |
|
| ---------- |
|
---------- |
---------- |
|
| 735 |
|
8,259,700 |
100.00 |
|
| ========== |
|
========== |
========== |
|
|
|
|
|
| Categories
of Shareholders |
|
|
| Particulars |
|
Shareholders |
Shareholding |
Percentage |
|
|
|
|
| I
n d i v i d u a 1 s |
719 |
845,900 |
10.24 |
|
| Insurance
Companies |
1 |
337,700 |
4.09 |
|
| Joint
Stock Companies |
7 |
4,261,000 |
51.59 |
|
| Financial
Institutions |
6 |
2,307,100 |
27.93 |
|
| Foreign
Companies |
1 |
500,000 |
6.05 |
|
| Others |
|
1 |
8,000 |
0.10 |
|
|
|
---------- |
---------- |
---------- |
|
|
|
735 |
8,259,700 |
100.00 |
|
|
|
========== |
========== |
========== |
|
|
|
|
Auditors' Report to the
Members |
|
|
| We
have audited the annexed balance sheet of GHEMNI LEASING COMPANY LIMITED as
at 30 June 1996and the |
|
| related
profit and loss account and statement of changes in financial position,
together with the notes forming part |
|
| thereof,
for the eighteen months 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 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 Ordi- |
|
| nance, 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 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 30June 1996 and of |
|
| the
profit and the changes in financial position for the eighteen months period
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. |
|
|
|
|
|
|
Balance Sheet |
|
|
As at 30 June, 1996 |
|
Rupees |
|
|
|
|
30 June |
31 December |
|
|
|
|
NOTE |
1996 |
1994 |
|
| ASSETS |
|
| FIXED
ASSETS - at cost less accumulated depreciation |
3 |
4,822,120 |
3,276,614 |
|
|
|
|
|
|
| NET
INVESTMENT IN LEASES |
|
|
4 |
324,069,532 |
212,619,908 |
|
| LONG
TERM INVESTMENTS |
|
|
5 |
11,935,759 |
450,000 |
|
| LONG
TERM DEPOSITS AND DEFERRED COST |
|
6 |
2,234,526 |
!,408,094 |
|
| CURRENT
ASSETS |
|
|
|
|
|
| Current
maturity of net investment in leases |
|
172,811,582 |
126,960,788 |
|
| Investments |
|
|
|
5 |
50,000 |
14,109,205 |
|
| Advance
against lease commitment |
|
|
6,005,659 |
41,818,750 |
|
| Advances,
deposits, prepayments |
|
|
|
|
| and
other receivables |
|
7 |
9,400,670 |
12,469,579 |
|
| Cash
and bank balances |
|
|
8 |
49,721,694 |
24,883,159 |
|
|
|
|
--------- |
--------- |
|
|
|
|
237,989,605 |
220,241,481 |
|
|
|
|
--------- |
--------- |
|
|
|
|
581,051,542 |
437,996,097 |
|
|
|
|
========= |
========= |
|
| SHAREHOLDERS'
EQUITY AND LIABILITIES |
|
|
|
|
|
|
|
|
|
| SHARE
CAPITAL |
|
|
9 |
82,597,000 |
50,000,000 |
|
| SHARE
PREMIUM |
|
|
|
48,895,500 |
-- |
|
| RESERVES |
|
|
|
10 |
21,132,061 |
13,374,080 |
|
| UNAPPROPRIATED
PROFIT |
|
|
|
8,146,868 |
9,492,254 |
|
|
|
|
--------- |
--------- |
|
| SHAREHOLDERS'
EQUITY |
|
|
|
160,771,429 |
72,866,334 |
|
|
|
|
|
|
| LONG
TERM FINANCING - Secured |
|
11 |
192,148,535 |
107,497,352 |
|
| LONG
TERM DEPOSITS |
|
|
12 |
55,925,877 |
43,696,534 |
|
| LONG
TERM SECURITY DEPOSIT ON LEASES |
|
|
|
|
| LIABILITIES
AGAINST ASSETS SUBJECT TO |
|
|
|
|
| FINANCE
LEASE |
|
|
13 |
-- |
145,482 |
|
|
|
|
|
|
| CURRENT
LIABILITIES |
|
|
|
|
|
| Current
maturity of long term financing, long term |
|
|
|
| deposits
and lease facility |
|
14 |
18,147,213 |
1,883,085 |
|
| Finance
under mark-up arrangements - Secured |
15 |
126,200,001 |
179,078,628 |
|
| Accrued
expenses and other liabilities |
|
16 |
15,095,574 |
22,328,682 |
|
| Provision
for taxation |
|
|
|
769,798 |
500,000 |
|
| Dividend
payable |
|
|
|
11,993,115 |
10,000,000 |
|
|
|
|
--------- |
--------- |
|
|
|
|
|
172,205,701 |
213,790,395 |
|
| CONTINGENCIES
AND COMMITMENTS |
|
17 |
|
|
|
|
|
--------- |
--------- |
|
|
|
|
581,051,542 |
437,996,097 |
|
|
|
========= |
========= |
|
| These
accounts should be read in conjunction with the attached notes. |
|
|
|
|
|
Profit and Loss Account
for the |
|
|
eighteen months period
ended 30 June, 1996 |
|
|
|
|
|
|
|
Rupees |
|
|
|
|
18 Months |
Year Ended |
|
|
|
|
|
Period Ended |
31 December, |
|
|
|
Note |
30 June, 1996 |
1994 |
|
|
|
|
| REVENUE |
|
|
|
| Income
from leasing operations |
|
18 |
134,962,810 |
63,538,836 |
|
| Income
on investments |
|
19 |
929,997 |
2,108,923 |
|
| Other Income |
|
20 |
1,709,742 |
768,394 |
|
|
--------- |
--------- |
|
|
|
|
137,602,549 |
66,416,153 |
|
|
| EXPENDITURE |
|
|
| Administrative
and operating expenses |
|
21 |
19,276,008 |
9,257,119 |
|
| Provision
for diminution in the value of investments |
|
4,270,593 |
1,695,053 |
|
| Provision
for doubtful debts |
|
|
1,278,623 |
460,000 |
|
| Amortisation
of deferred cost |
|
|
1,487,012 |
675,183 |
|
| Financial
charges |
|
22 |
87,670,306 |
37,514,220 |
|
|
--------- |
--------- |
|
|
|
|
113,982,542 |
49,601,575 |
|
|
|
|
--------- |
--------- |
|
| PROFIT
FOR THE PERIOD BEFORE TAXATION |
|
|
23,620,007 |
16,814,578 |
|
|
|
|
|
|
| TAXATION |
|
| Current year |
|
688,012 |
500,000 |
|
|
|
--------- |
--------- |
|
| Profit
for the period after taxation |
|
22,931,995 |
16,314,578 |
|
| Unappropriated
profit brought forward |
|
9,492,254 |
9,415,626 |
|
|
|
--------- |
--------- |
|
| Profit
available for appropriation |
|
32,424,249 |
25,730,204 |
|
|
|
|
|
| APPROPRIATIONS |
|
|
| Statutory
reserve @20% of profit |
|
4,586,399 |
3,262,916 |
|
| Contingency
reserve @2% of lease contract receivable |
|
3,171,582 |
2,975,034 |
|
| Proposed
Dividend |
|
| Interim
@ 10% (1994: Nil) |
|
|
8,259,700 |
-- |
|
| Final
@ 10% (1994: 20%) |
|
|
8,259,700 |
10,000,000 |
|
|
|
|
|
24,277,381 |
16,237,950 |
|
|
|
|
--------- |
--------- |
|
| Unappropriated
profit carried forward |
|
|
8,146,868 |
9,492,254 |
|
|
|
|
========= |
========= |
|
| These
accounts should be read in conjunction with the attached notes. |
|
|
|
|
Statement of Changes in
Financial Position for the |
|
|
eighteen months period
ended 30 June, 1996 |
|
|
Rupees |
|
|
18 Months |
Year Ended |
|
|
Period Ended |
31 December, |
|
|
30June, 1996 |
1994 |
|
| CASH
FLOWS FROM OPERATING ACTMTIES |
|
|
|
| Net
profit before taxation |
|
23,620,007 |
16,814,578 |
|
| Adjustment
for |
|
|
|
| Depreciation |
|
1,456,149 |
525,725 |
|
| Amortisation
of deferred cost |
|
1,487,012 |
675,183 |
|
| Accrued
mark-up |
|
86,781,852 |
36,975,597 |
|
| Provision
for doubtful debts |
|
1,278,623 |
460,000 |
|
| Provision
for diminution in the value of investments |
|
4,270,593 |
1,695,053 |
|
| Income
on investments |
|
(929,997) |
(2,108,923) |
|
| Gain
on sale of fixed assets |
|
(277,152) |
(49,975) |
|
|
|
--------- |
--------- |
|
|
|
117,687,087 |
54,987,238 |
|
|
|
| Increase
in Investment in leases |
|
(158,579,041) |
(148,751,763) |
|
| Decrease/(Increase)
in advance against lease commitments |
35,813,091 |
(14,692,756) |
|
| Decrease/(Increase)
in advances, deposits, prepayments |
|
|
| and
other receivables |
|
2,458,470 |
(4,892,704) |
|
| Increase
in long term security deposits |
|
24,149,039 |
24,920,726 |
|
| (Decrease)/Increase
in accrued expenses and other liabilities |
(1,357,593) |
1,118,597 |
|
|
|
--------- |
--------- |
|
|
|
(97,516,034) |
(142,297,900) |
|
|
--------- |
--------- |
|
| Cash
generated from/ (used) in operations |
|
20,171,053 |
(87,310,662) |
|
|
|
|
| Mark-up paid |
|
(92,657,367) |
(27,204,743) |
|
| Taxes paid |
|
(1,207,689) |
(177,816) |
|
|
--------- |
--------- |
|
| Net
cash used in operating activities |
|
(73,694,003) |
(114,693,221) |
|
|
| CASH
FLOWS FROM INVESTING ACTMTIES |
|
|
|
| Addition
in fixed assets |
|
(4,266,482) |
(749,808) |
|
| Purchase
of long term investment in Federal Investment Bonds |
(500,000) |
(250,000) |
|
| Purchase
of marketable securities - net |
|
(1,197,147) |
(12,519,694) |
|
| Decrease
in long term lease deposits |
|
57,726 |
65,313 |
|
| Proceed
from sale of marketable securities - net |
|
1,358,884 |
1,715,668 |
|
| Mark-up
on Federal Investment Bonds |
|
179,155 |
55,250 |
|
| Income
from deposits account |
|
544,967 |
258,166 |
|
| Dividend
income - net |
|
246,904 |
41,000 |
|
| Sale
proceeds against sale of fixed assets |
|
1,541,980 |
140,000 |
|
|
|
--------- |
--------- |
|
| Net
cash used in investing activities |
|
(2,034,013) |
(11,244,105) |
|
|
|
|
|
| CASH
FLOWS FROM FINANCING ACTIVITIES |
|
|
|
| Increase in long term financing |
|
89,080,210 |
18,096,664 |
|
| Payment of lease liability |
|
(230,077) |
(153,032) |
|
| (Decrease)/Increase
in finance under mark-up arrangements |
(52,878,627) |
108,542,753 |
|
| Proceeds
from right issue |
|
81,492,500 |
-- |
|
| Increase
in deferred cost |
|
(2,371,170) |
-- |
|
| Dividend
paid |
|
|
(14,526,285) |
-- |
|
|
--------- |
--------- |
|
| Net
cash generated from financing activities |
|
100,566,551 |
126,486,385 |
|
|
--------- |
--------- |
|
| Net
increase in cash and bank balances |
|
24,838,535 |
549,059 |
|
| Cash
and bank balances at beginning of period |
|
24,883,159 |
24,334,100 |
|
|
|
|
--------- |
--------- |
|
| Cash
and bank balances at end of period |
|
49,721,694 |
24,883,159 |
|
|
|
|
========= |
========= |
|
|
|
|
Notes to the Accounts |
|
|
for the eighteen months
period ended 30 June, 1996 |
|
|
| 1.
STATUS AND NATURE OF BUSINESS |
|
| The
Company was incorporated on 12 May 1991 as a public limited company under the
Companies |
|
| Ordinance,
1984. The company is listed on the Stock Exchange in Pakistan. The principal
activity of the |
|
| Company
is leasing of movable assets. |
|
|
| 2.
SIGNIFICANT ACCOUNTING POLICIES |
|
|
|
| 2.1
Accounting Convention |
|
| These
accounts have been prepared under the historical cost convention. |
|
|
| 2.2
Fixed Assets and Depreciation |
|
|
|
| a)
Fixed assets are stated at cost less accumulated depreciation. |
|
|
| b)
A full year's depreciation is charged on all fixed assets capitalised during
the year while no |
|
| depreciation is charged in the year fixed
assets are disposed off or scrapped. However, eighteen |
|
| month's depreciation has been provided for
the current period. |
|
|
| c)
Depreciation on fixed assets is charged on written down values at the rates
given in Note 3 to the |
|
| accounts. |
|
|
| d)
Normal repairs and maintenance are charged to income as and when incurred. |
|
|
| e)
Gains and losses on disposal of assets, if any, are taken to profit and loss
account. |
|
|
| 2.3
Assets subject to Finance Lease |
|
|
| These
are stated at lower of present value of minimum lease payments under the
lease agreement and |
|
| the
fair value of the assets acquired on lease. The related obligations under the
lease are accounted for as |
|
| liabilities.
Depreciation is charged on written down values at the rates given in Note 3
to the accounts. |
|
|
| 2.4
Investments |
|
|
| Long term |
|
| These
are stated at cost net off provision made for decline other than temporary in
value of investment, if |
|
| any. |
|
|
| Short term |
|
| These
are stated at lower of average cost and market value on an aggregate
portfolio basis. |
|
|
| 2.5
Deferred Cost |
|
| Deferred
cost including preliminary expenses is being amortised over a period of five
years. |
|
|
| 2.6
Reserve for potential lease losses |
|
| A
reserve is maintained as an appropriation from unappropriated profit for
potential losses on lease |
|
| portfolio,
which, in the judgment of management, can be reasonably anticipated. |
|
|
| 2.7
Revenue Recognition |
|
|
|
| (a)
Lease Income |
|
|
|
| The
Company follows the "financing method" in accounting for
recognition of lease income. Under |
|
| this
method the unearned lease income is taken to income over the term of lease,
starting with the |
|
| month
in which the lease is executed, so as to produce a systematic return on the
net investment in |
|
| the lease. |
|
|
|
|
| Front-end-fee,
Commitment fee and other commissions are taken to income, when these are
realised |
|
| and
financing is approved. |
|
|
|
|
| b)
Long Term Investments |
|
|
| Return
on investment is recognised at the rates specified in the respective
investment schemes and |
|
| accrued
for the period. The income is recognised on the assumption that such
investments will be |
|
| held
till maturity. |
|
|
|
|
|
|
| c)
Dividend Income |
|
|
| Dividend
income is recorded at the time of closure of share transfer books of the
Company declaring |
|
| the
dividend and is shown net off Zakat. |
|
|
|
|
| d)
Marketable Securities |
|
|
| Sale
and purchase of securities are recognised on the date of contract. Capital
gain and loss on sale of |
|
| marketable
securities is taken to income in the period in which it arises. |
|
|
|
|
| 2.8
Foreign Currencies |
|
|
|
| Transactions
in foreign currencies are accounted for in rupees at the rate prevailing on
the date of the |
|
| transaction.
Assets and liabilities in foreign currencies are translated into rupees at
the rate of exchange |
|
| prevailing
at the balance sheet date. Exchange gains/losses are recorded in income
currently. |
|
|
|
|
| 2.9 Taxation |
|
|
|
| Current |
|
|
|
|
| Income
for the purpose of computing current taxation is determined under the
provisions of the tax laws |
|
| whereby
lease rentals received or receivable are deemed to be income. Provision for
taxation is thus |
|
| based
on income determined in accordance with the requirements of the tax law. |
|
|
|
|
| Deferred |
|
| The
company accounts for deferred taxation using the liability method on all
significant timing |
|
| differences.
However, deferred tax is not provided if it can be established with
reasonable probability that |
|
| these
timing differences will not reverse in the foreseeable future. |
|
|
| 2.10
Staff Retirement Benefits |
|
|
| The
company operates a provident fund scheme for all eligible employees. Equal
contributions are made |
|
| monthly
both by the company and the employees in accordance with the rules of the
scheme at 7.5% of |
|
| basic pay. |
|
|
|
|
|
| 3.
FIXED ASSETS -- At cost less accumulated depreciation |
|
|
|
COST |
|
|
DEPRECIATION |
|
|
AS AT 01 |
ADDITIONS |
DISPOSAL |
AS AT 30 |
RATE |
AS AT 01 |
DISPOSAL |
FOR THE |
AS AT 30 |
WRITTEN DOWN |
|
|
JANUARY |
|
JUNE |
|
JANUARY |
|
YEAR |
JUNE |
VALUE AS AT |
|
|
1995 |
|
1996 |
|
1995 |
|
1996 |
30 JUNE |
|
|
|
|
| OWNED
ASSETS: |
|
| Furniture |
|
| and fixture |
930,766 |
122,598 |
-- |
1,053,364 |
10% |
181,409 |
-- |
130,793 |
312,202 |
741,169 |
|
|
| Office |
|
| equipment |
1,747,408 |
681,395 |
(93,000) |
2,335,803 |
10% |
384,081 |
(25,203) |
996,539 |
655,417 |
1,680,386 |
|
|
|
|
|
|
|
|
|
|
| Vehicles |
1,729,747 |
3,462,489 |
1,554,583) |
3,630,653 |
20% |
783,945 |
(581,981) |
1,098,817 |
1,230,081 |
2,400,572 |
|
|
--------- |
--------- |
--------- |
--------- |
|
--------- |
--------- |
--------- |
--------- |
--------- |
|
|
4,400,921 |
4,966,482 |
1,647,583) |
7,019,820 |
|
1,348,735 |
(607,184) |
1,456,149 |
2,197,700 |
4,829,190 |
|
|
| LEASED
ASSETS: |
|
| Vehicles |
366,249 |
-- |
'(366,249) |
-- |
20% |
141,822 |
'(141,822) |
-- |
-- |
-- |
|
|
--------- |
--------- |
--------- |
--------- |
|
--------- |
--------- |
--------- |
--------- |
--------- |
|
| Rs. 1995-96 |
4,767,170 |
4,266,482 |
2,013,832) |
7,019,820 |
|
1,490,557 |
(749,006) |
1,456,149 |
2,197,700 |
4,822,120 |
|
|
========= |
========= |
========= |
========= |
|
========= |
========= |
========= |
========= |
========= |
|
| Rs. 1994 |
4,158,026 |
749,808 |
(140,664) |
4,767,170 |
|
1,015,470 |
(50,639) |
525,725 |
1,490,556 |
3,276,614 |
|
|
========= |
========= |
========= |
========= |
|
========= |
========= |
========= |
========= |
========= |
|
|
|
|
|
|
| 3.1
Particulars of disposal of tangible fixed assets during the period |
|
|
| Description |
No. |
Original |
Accumu- |
Written |
Claim/Sale |
Profit/ |
Mode of |
Sold to/Claim from |
|
|
|
cost |
lated |
down |
proceed |
(Loss) |
disposal |
|
|
|
depre- |
value |
|
|
|
|
ciation |
|
|
| OWNED
ASSETS: |
|
|
| Photo Copier |
1 |
93,000 |
25,203 |
67,797 |
37,000 |
(30,797) |
Negotiation |
Jaffer Brothers (Pvt)
Limited |
|
|
|
|
Jaffer Chamber 28,
Karachi |
|
| Suzuki Khyber |
2 |
460,515 |
224,731 |
235,784 |
422,300 |
186,516 |
Negotiation |
Jahangir Iqbal, 69/1, 3rd
Comm. Street |
|
|
|
|
Phase V, D.H.A., Karachi |
|
| Nissan Sunny |
1 |
700,368 |
341,780 |
358,588 |
425,000 |
66,412 |
Insurance |
Universal Insurance
Company |
|
|
|
claim |
Uni Centre, I.I.
Chundrigar Road, Karachi |
| Honda CD 70 |
1 |
31,700 |
15,469 |
16,231 |
24,800 |
8,569 |
Insurance |
Universal Insurance
Company |
|
| Model 1991 |
|
|
claim |
Uni Centre, I.I.
Chundrigar Road, Karachi |
| Honda CD 70 |
1 |
51,000 |
-- |
51,000 |
44,500 |
(6,500) |
Insurance |
Universal Insurance
Company |
|
| Model 1995 |
|
|
claim |
Uni Centre, I.I.
Chundrigar Road, Karachi |
| Suzuki Khyber |
1 |
311,000 |
-- |
311,000 |
270,000 |
(41,000) |
Insurance |
Universal Insurance
Company |
|
| Model 1995 |
|
claim |
Uni Centre, I.I.
Chundrigar Road, Karachi |
|
--------- |
--------- |
--------- |
--------- |
--------- |
|
|
1,647,583 |
607,183 |
1,040,400 |
1,923,600 |
183,200 |
|
|
--------- |
--------- |
--------- |
--------- |
--------- |
|
| LEASED
ASSETS: |
|
| Motor Bike |
1 |
50,200 |
10,040 |
40,160 |
50,200 |
10,040 |
Insurance |
First General Leasing
Modaraba, |
|
| CG 125 |
|
claim |
10th Floor, Medhi Tower,
A-115, |
|
|
SMCHS, Karachi |
|
| Suzuki ALTO |
1 |
175,385 |
63,138 |
112,247 |
179,891 |
58,644 |
Insurance |
Universal Insurance
Company |
|
|
claim |
Uni Centre, I.I.
Chundrigar Road, Karachi |
| Suzuki ALTO |
1 |
140,664 |
68,643 |
72,021 |
97,289 |
25,268 |
Negotiation |
Ghazanfar Ali - Employee |
|
|
--------- |
--------- |
--------- |
--------- |
--------- |
|
|
366,249 |
141,891 |
224,428 |
318,380 |
93,952 |
|
|
--------- |
--------- |
--------- |
--------- |
--------- |
|
| Rupees
1995-96 |
2,013,832 |
749,004 |
1,264,828 |
1,541,980 |
277,152 |
|
|
--------- |
--------- |
--------- |
--------- |
--------- |
|
| Rupees 1994 |
|
140,664 |
50,639 |
90,025 |
140,000 |
49,975 |
|
|
========= |
========= |
========= |
========= |
========= |
|
|
|
|
|
|
|
Rupees |
|
|
|
|
30 June |
31 December |
|
|
|
1996 |
1994 |
|
| 4.
NET - INVESTMENT IN LEASES |
|
| Instalment
contract receivable |
|
|
626,499,440 |
429,851,663 |
|
| Unearned
income |
|
|
(127,879,703) |
(89,810,967) |
|
|
| Net
Investment in leases |
|
4.1 |
498,619,737 |
340,040,696 |
|
| Current
maturity shown under current assets |
|
(172,811,582) |
(126,960,788) |
|
| Provision
for doubtful debts |
|
|
(1,738,623) |
(460,000) |
|
|
--------- |
--------- |
|
|
|
|
324,069,532 |
212,619,908 |
|
|
========= |
========= |
|
|
|
|
| 4.1
The company's aggregate exposure under lease financing exceeding 20% of the
paid-up capital and free reserves |
|
| in respect of 5 listed companies amounted
to Rs. 189.63 million (1994:3 listed companies Rs. 93.70 million). |
|
|
| 5.
LONG TERM INVESTMENTS |
|
|
| Federal
Investment Bonds |
|
5.1 |
950,000 |
450,000 |
|
| Investment
in listed securities |
|
5.2 |
10,985,759 |
-- |
|
|
|
|
--------- |
--------- |
|
|
|
|
11,935,759 |
450,000 |
|
|
========= |
========= |
|
| 5.1
Federal Investment Bonds- 3 years |
|
50,000 |
50,000 |
|
| - 10 years |
|
|
950,000 |
450,000 |
|
|
--------- |
--------- |
|
|
|
1,000,000 |
500,000 |
|
| FIB's
maturing within 12 months included under current assets |
(50,000) |
(50,000) |
|
|
|
|
--------- |
--------- |
|
|
|
950,000 |
450,000 |
|
|
|
========= |
========= |
|
| 5.1.1
Investment in Federal Investment Bonds (FIB's) has been made under the
relevant provisions of the State Bank |
|
| of Pakistan's rules for non-banking
financial institution to maintain liquidity against liabilities. The profit
on |
|
| FIB's varies from 13% to 15% per annum
payable half yearly from the date of issue. |
|
|
| 5.2
The Board of Directors of the company decided to reclassify investment in
listed securities as long term. These |
|
| investments
were transferred to long term at lower of cost or market value and the
diminution in value |
|
| amounting
to Rs. 5,965,646 on transfer date was adjusted from the cost of the shares.
Further diminution in |
|
| value
subsequent to this date has not been accounted for as in the opinion of the
management this decline is |
|
| temporary. |
|
|
|
| Unless
stated otherwise the holdings are in ordinary shares / certificates of Rs.
10/- each. |
|
|
| NUMBER OF |
|
NAME OF |
|
| SHARES/ |
|
COMPANY/ |
|
| CERTIFICATES |
|
INSTITUTION |
|
|
|
| 30-Jun |
31 December |
|
| 1996 |
1994 |
|
|
|
Rupees |
|
|
30 June |
31 December |
|
|
|
|
1996 |
1994 |
|
|
| 14,100 |
-- |
19th ICP Mutual Fund |
|
|
238,290 |
- |
|
| 1,070 |
-- |
First Habib Bank Modaraba |
|
|
7,223 |
- |
|
| 4,500 |
-- |
Standard Chartered
Mercantile Leasing Go. Ltd. |
103,251 |
- |
|
| 52,625 |
-- |
Cherat Cement Company
Limited |
|
3,104,875 |
- |
|
| 17,460 |
-- |
D.C. Khan Cement Limited |
|
|
744,072 |
- |
|
| 1,710 |
-- |
Sanghar Sugar Mills
Limited |
|
36,604 |
- |
|
| 1,960 |
-- |
Shahmurad Sugar Mills
Limited |
|
27,000 |
- |
|
| 4,124 |
-- |
Saif Textile Mills
Limited |
|
|
10,305 |
- |
|
| 32,500 |
-- |
First Elite Capital
Modaraba |
|
152,750 |
- |
|
| 51,020 |
-- |
First Punjab Modaraba |
|
|
471,935 |
- |
|
| 36,500 |
-- |
First Mehran Modaraba |
|
|
178,850 |
- |
|
| 29,200 |
-- |
Natover Motor Leasing
Limited |
|
292,000 |
- |
|
| 2,945 |
-- |
A1-Faysal'Investment Bank
Limited |
|
113,383 |
- |
|
| 30,500 |
-- |
AI-Towfeek Investment
Bank Limited |
|
800,625 |
- |
|
| 15,000 |
-- |
Bank A1-Habib Limited |
|
|
588,750 |
- |
|
| 2,145 |
-- |
Crescent Investment Bank
Limited |
|
83,655 |
- |
|
| 36,500 |
-- |
Pakistan Industrial
Credit & Investment Cor. Ltd. |
958,125 |
- |
|
| 13,225 |
-- |
Prime Commercial Bank
Limited |
|
324,875 |
- |
|
| 5,000 |
-- |
Faisal Spinning Mills
Limited |
|
76,250 |
- |
|
| 69 |
-- |
Kohinoor Textile Mills
Limited |
|
966 |
- |
|
| 14,700 |
-- |
Essa Cement Industries
Limited |
|
433,400 |
- |
|
| 15,000 |
-- |
Biafo Industries Limited |
|
|
157,500 |
- |
|
| 5,000 |
-- |
Wah Noble Chemicals
Limited |
|
230,000 |
- |
|
| 24,000 |
-- |
Century Paper & Board
Mills Limited |
|
907,500 |
- |
|
| 29,600 |
-- |
Sui Northern Gas
Pipelines Limited |
|
943,575 |
- |
|
|
--------- |
--------- |
|
|
|
|
|
10,985,759 |
- |
|
|
========= |
========= |
|
| 6.
LONG TERM DEPOSITS AND DEFERRED COST |
|
|
| Long
term lease deposits |
|
|
-- |
57,726 |
|
| Deferred
cost |
|
6.1 |
2,234,526 |
1,350,368 |
|
|
--------- |
--------- |
|
|
|
|
2,234,526 |
1,408,094 |
|
| 6.1
DEFERRED COST |
|
========= |
========= |
|
|
| Preoperating
expenses |
|
|
1,976,727 |
1,976,727 |
|
| Preliminary
expenses |
|
|
131,374 |
131,374 |
|
| Share
issue expenses |
|
|
1,267,816 |
1,267,816 |
|
| Right
share issue expenses |
|
|
2,371,170 |
- |
|
|
--------- |
--------- |
|
|
|
5,747,087 |
3,375,917 |
|
| Amortised
to date |
|
|
(3,512,561) |
(2,025,549) |
|
|
|
--------- |
--------- |
|
|
|
2,234,526 |
1,350,368 |
|
|
========= |
========= |
|
|
|
Rupees |
|
|
|
30 June |
31 December |
|
|
|
1996 |
1994 |
|
| 7.
ADVANCES, DEPOSITS, PREPAYMENTS AND OTHER RECEIVABLES |
|
|
| Advances |
|
|
| Staff |
|
412,201 |
- |
|
| Taxation |
|
1,008,721 |
219,247 |
|
| Expenses |
|
259,323 |
574,888 |
|
| Others |
|
235,864 |
555,864 |
|
|
|
--------- |
--------- |
|
|
|
1,916,109 |
1,349,999 |
|
| Deposits |
|
1,112,058 |
1,421,749 |
|
| Prepayments |
|
934,898 |
411,088 |
|
|
| Other
receivables |
|
| Accrued
return on investments |
|
1,091,173 |
1,091,173 |
|
| Against
sale of shares |
|
125,809 |
1,525,722 |
|
| Mark-up
on advance against lease commitment |
|
1,024,072 |
2,198,928 |
|
| Lease
rentals |
|
3,037,152 |
3,050,114 |
|
| From
State Bank of Pakistan |
|
-- |
1,166,400 |
|
| Others |
|
159,399 |
254,406 |
|
|
--------- |
--------- |
|
|
|
5,437,605 |
9,286,743 |
|
|
|
--------- |
--------- |
|
|
|
9,400,670 |
12,469,579 |
|
|
|
========= |
========= |
|
| 8.
CASH AND BANK BALANCES |
|
|
| Cash
at bank in: |
|
| Current
account - Pak Rupees |
|
4,570,795 |
426,230 |
|
| Term
deposit account- Pak Rupees |
|
39,000,000 |
19,500,000 |
|
| Deposit
account - Foreign currency |
|
8.1 |
6,141,131 |
4,953,843 |
|
|
--------- |
--------- |
|
|
|
|
49,711,926 |
24,880,073 |
|
|
|
| Cash in Hand |
|
|
9,768 |
3,086 |
|
|
|
|
--------- |
--------- |
|
|
|
49,721,694 |
24,883,159 |
|
|
|
========= |
========= |
|
| 8.1
This represents amount under lien with a financial institution against
borrowing of funds. |
|
|
|
|
| 9.
SHARE CAPITAL |
|
|
| Authorised |
|
| 20,000,000
(1994: 20,000,000) |
|
| ordinary
shares of Rs. 10/- each |
|
200,000,000 |
200,000,000 |
|
|
========= |
========= |
|
| Issued,
subscribed and paid up |
|
| 8,259,700
(1994: 5,000,000) ordinary |
|
| shares
of Rs. 10/-each fully |
|
| paid in cash |
|
82,597,000 |
50,000,000 |
|
|
|
========= |
========= |
|
|
|
|
|
|
| 10. RESERVES |
|
| Statutory
reserve |
|
10.1 |
11,159,666 |
6,573,267 |
|
| Contingency
reserve |
|
10.2 |
9,972,395 |
6,800,813 |
|
|
|
|
--------- |
--------- |
|
|
|
|
21,132,061 |
13,374,080 |
|
|
========= |
========= |
|
| 10.1
Statutory reserve |
|
| At
beginning of the period / year |
|
6,573,267 |
3,310,351 |
|
| Transferred
from profit and loss account |
|
4,586,399 |
3,262,916 |
|
|
--------- |
--------- |
|
|
|
11,159,666 |
6,573,267 |
|
|
|
========= |
========= |
|
| 10.2
Contingency reserve |
|
|
|
| At
beginning of the period / year |
|
|
6,800,813 |
3,825,779 |
|
| Transferred
from profit and loss account |
|
3,171,582 |
2,975,034 |
|
|
--------- |
--------- |
|
|
|
|
9,972,395 |
6,800,813 |
|
|
|
|
========= |
========= |
|
| 11.
LONG TERM FINANCING - SECURED |
|
|
|
|
| From |
Limit |
Mark-up rate |
|
|
Rupees |
(Per annum) |
|
| Commercial |
|
| Banks |
70,000,000 |
19% to 20% |
|
11.1 |
61,971,333 |
47,497,352 |
|
| Financial |
|
|
|
|
| Institutions |
138,250,000 |
16% to 20% |
|
11.2 |
130,177,202 |
60,000,000 |
|
|
--------- |
--------- |
|
|
|
192, 148,535 |
107,497,352 |
|
|
========= |
========= |
|
|
|
|
| The
above financing are for lease operations and are secured against
hypothecation of leased assets, lease rentals and |
|
| floating
charge on the movable assets of the company. |
|
|
| 11.1
Commercial Banks |
|
|
| Due date |
Mode of |
Mode of Payment |
|
Principal Outstanding |
|
|
principal |
of mark-up |
|
|
|
|
repayment |
|
|
|
|
|
|
| 31-12-1997 |
On due date |
Quarterly |
|
|
41,971,333 |
47,497,352 |
|
| 28-04-1998 |
On due date |
Quarterly |
|
|
20,000,000 |
- |
|
|
|
--------- |
--------- |
|
|
|
61,971,333 |
47,497,352 |
|
| 11.2
Financial Institutions |
|
|
========= |
========= |
|
|
|
|
| 12-09-1998 |
On due date |
Semi annually |
|
20,000,000 |
20,000,000 |
|
| 30-09-1998 |
On due date |
Annually |
|
40,000,000 |
40,000,000 |
|
| 20-09-1995 to |
16 Quarterly |
|
|
|
|
| 20-06-1999 |
installments |
Quarterly |
|
11,927,202 |
- |
|
| 27-06-1998 |
On due date |
Quarterly |
|
8,250,000 |
- |
|
| 11-I 2-1997 |
On due date |
Quarterly |
|
20,000,000 |
- |
|
| 17-06-1998 |
On due date |
Quarterly |
|
20,000,000 |
- |
|
| 30-09-1997 |
On due date |
Quarterly |
|
10,000,000 |
- |
|
|
--------- |
--------- |
|
|
|
130,177,202 |
60,000,000 |
|
|
|
========= |
========= |
|
|
|
|
|
Rupees |
|
|
30 June |
31 December |
|
|
1996 |
1994 |
|
|
|
|
|
|
|
|
| 12.
LONG TERM DEPOSITS |
|
|
|
|
|
| Customer
security deposits on lease |
12.1 |
69,554,991 |
45,401,253 |
|
| Repayable
within 12 months shown under |
|
|
|
|
|
|
| current
liabilities |
|
(13,718,186) |
(1,798,490) |
|
|
|
|
|
|
|
|
|
|
|
|
55,836,805 |
43,602,763 |
|
| Others |
|
|
89,072 |
93,771 |
|
|
|
|
--------- |
--------- |
|
|
|
|
55,925,877 |
43,696,534 |
|
|
|
|
========= |
========= |
|
|
|
|
|
|
| 12.1
This represents sum received from lessees under lease contracts and are
repayable/adjustable at the expiry of the |
|
| lease period. |
|
|
| 13.
LIABILITIES AGAINST ASSETS SUBJECT |
|
| TO
FINANCE LEASE |
|
|
| Minimum
lease payments |
|
|
230,077 |
383,109 |
|
| Add:
Addition during the period/year |
|
-- |
50,200 |
|
|
|
|
--------- |
--------- |
|
|
|
|
230,077 |
433,309 |
|
| Payment
made/Adjustments |
|
|
(230,077) |
(203,232) |
|
|
|
|
--------- |
--------- |
|
|
|
|
-- |
230,077 |
|
| Current
maturity |
|
|
-- |
(84,595) |
|
|
--------- |
--------- |
|
|
|
-- |
145,482 |
|
|
========= |
========= |
|
| 14.
CURRENT MATURITY OF LONG TERM FINANCE, |
|
| DEPOSITS
AND LEASE FACILITY |
|
|
| Long
term finance |
|
|
4,429,027 |
-- |
|
| Long
term deposits |
|
|
13,718,186 |
1,798,490 |
|
| Lease
liability |
|
|
-- |
84,595 |
|
|
--------- |
--------- |
|
|
|
|
18,147,213 |
1,883,085 |
|
|
|
|
========= |
========= |
|
| 15.
FINANCE UNDER MARK-UP ARRANGEMENTS |
|
| Banks
and financial institutions - short term loan |
61,117,715 |
89,200,903 |
|
| Running
finance under mark-up arrangements |
20,082,286 |
9,877,725 |
|
| Morabaha
finance |
|
|
20,000,000 |
30,000,000 |
|
| Others |
|
|
25,000,000 |
50,000,000 |
|
|
|
|
--------- |
--------- |
|
|
|
|
126,200,001 |
179,078,628 |
|
|
========= |
========= |
|
|
|
|
| The
Company has financing facilities from various banks, financial institutions
and others aggregating to Rs. 131 |
|
| million
(1994: Rs. 179.20 million) at mark-up ranging from 52.06 to 53.42 paisas per
Rs. 1,000/- per day. These |
|
| arrangements
are generally for a period of upto one year and are renewable. Short term
loan from a financial |
|
| institution
of Rs. 5.1 million (1994: Rs. 4.2 million) has been borrowed against the lien
on company's foreign currency |
|
| deposits
with the financial institution. |
|
|
| Fifth Annual Report 1996 |
Ghemni Leasing Company
Limited |
|
|
|
|
Rupees |
|
|
|
30 June |
31 December |
|
|
|
1996 |
1994 |
|
| 16.
ACCRUED EXPENSES AND OTHER LIABILITIES |
|
| Mark up on |
|
| Long
term finance |
|
7,323,486 |
13,680,~25 |
|
| Short
term loan |
|
1,107,465 |
1,208,130 |
|
| Running
finance |
|
895,789 |
134,139 |
|
| Morabaha
finance |
|
137,398 |
386,028 |
|
| Others |
|
|
693,526 |
624,657 |
|
| Advance
lease rentals |
|
3,331,165 |
4,348,924 |
|
| Accrued
expenses |
|
45,000 |
6,067 |
|
|
| OTHER
LIABILITIES |
|
| Tax
deducted at source |
|
5,529 |
35,208 |
|
| Due
to associated Companies |
|
-- |
544,819 |
|
| Unearned
front end fee |
|
742,389 |
439,570 |
|
| Others |
|
813,827 |
920,915 |
|
|
|
--------- |
--------- |
|
|
|
15,095,574 |
22,328,682 |
|
|
|
========= |
========= |
|
| 17.
CONTINGENCY AND COMMITMENTS |
|
|
| No
provision has been made in respect of Zakat deducted by a financial
institution amounting to Rs. 629,315 |
|
| (1994:
Rs. 629,315) as in the opinion of the directors the Company did not fall
under the definition of Sahib-e- |
|
| Nisab
under the provision of Zakat & Ushr Ordinance, 1980, at the time of
deduction. |
|
|
| Commitments
for lease disbursements |
|
86.2 million |
65 million |
|
|
|
========= |
========= |
|
| Letter
of credit outstanding |
|
7.5 million |
- |
|
|
|
========= |
========= |
|
|
|
|
|
| 18.
INCOME FROM LEASING OPERATIONS |
|
18 Months |
Year Ended |
|
|
|
Period Ended |
31 December, |
|
|
|
30 June, 1996 |
1994 |
|
|
|
|
| Income
on lease contracts |
|
123,803,025 |
57,447,645 |
|
| Front-end
and commitment fee |
|
4,249,077 |
3,305,324 |
|
| Return
on advance against leases |
|
5,765,500 |
2,464,654 |
|
| Gain
on cancellation of lease contracts |
|
244,727 |
29,213 |
|
| Arrangement
fee |
|
-- |
200,000 |
|
| Other
lease income |
|
900,481 |
92,000 |
|
|
|
--------- |
--------- |
|
|
|
134,962,810 |
63,538,836 |
|
|
|
|
========= |
========= |
|
| 19.
INCOME ON INVESTMENTS |
|
|
|
|
|
|
| (Loss)/Gain
on sale of marketable securities- net |
19.1 |
(41,029) |
1,754,507 |
|
| Mark-up
on Federal Investment Bonds |
|
|
179,155 |
55,250 |
|
| Return
on deposit account |
|
|
544,967 |
258,166 |
|
| Dividend
income - net |
|
19.2 |
246,904 |
41,000 |
|
|
|
|
--------- |
--------- |
|
|
|
|
929,997 |
2,108,923 |
|
|
========= |
========= |
|
|
|
|
| 19.1
(Loss)/Gain on sale of marketable securities |
|
| Capital gain |
|
|
-- |
2,120,774 |
|
| Brokerage
and commission |
|
|
(1,977) |
(350,336) |
|
| Share
transfer stamps fee |
|
|
(39,052) |
(15,931) |
|
|
--------- |
--------- |
|
|
|
|
|
|
(41,029) |
1,754,507 |
|
|
|
|
|
|
========= |
========= |
|
| 19.2
Dividend income |
|
|
|
| Dividend
income |
|
|
273,868 |
43,880 |
|
| Zakat
deducted |
|
|
(26,964) |
(2,880) |
|
|
--------- |
--------- |
|
|
|
|
246,904 |
41,000 |
|
|
|
|
========= |
========= |
|
| 20.
OTHER INCOME |
|
| Mark
up, commission and fee income |
|
|
307,109 |
898,419 |
|
| Gain
on disposal of fixed assets |
|
|
277,152 |
49,975 |
|
| Exchange
gain / (loss) |
|
|
655,824 |
(180,000) |
|
| Liabilities
written back |
|
|
469,657 |
- |
|
|
--------- |
--------- |
|
|
|
1,709,742 |
768,394 |
|
|
|
========= |
========= |
|
| 21.
ADMINISTRATIVE AND OPERATING EXPENSES |
|
|
| Salaries,
wages and other benefits |
|
|
6,846,810 |
3,241,490 |
|
| Staff
welfare and training |
|
|
655,724 |
59,235 |
|
| Productivity
incentive to staff |
|
|
- |
374,750 |
|
| Rent,
rates and taxes |
|
|
1,300,844 |
511,488 |
|
| Travelling
and conveyance |
|
|
2,056,430 |
730,788 |
|
| Legal
and professional |
|
|
919,361 |
564,978 |
|
| Telephone,
telex and postage |
|
|
769,412 |
581,558 |
|
| Printing
& stationery |
|
|
723,226 |
402,504 |
|
| Depreciation |
|
|
|
1,456,149 |
525,725 |
|
| Fees
and subscription |
|
|
591,165 |
167,424 |
|
| Utilities |
|
|
|
1,222,866 |
706,562 |
|
| Advertisement |
|
|
389,318 |
331,170 |
|
| Auditors'
Remuneration |
|
21.1 |
103,550 |
38,440 |
|
| Repair
and Maintenance |
|
|
895,402 |
175,414 |
|
| Entertainment |
|
|
270,612 |
174,261 |
|
| Insurance |
|
|
|
486,109 |
12,990 |
|
| Donation |
|
|
|
-- |
6,000 |
|
| General
expenses |
|
|
341,294 |
162,889 |
|
| Penalty |
|
|
|
- |
271,800 |
|
| Contribution
to Provident Fund |
|
|
247,736 |
100,742 |
|
|
|
|
--------- |
--------- |
|
|
|
|
19,276,008 |
9,257,119 |
|
|
========= |
========= |
|
|
| 21.1
AUDITORS' REMUNERATION |
|
|
| Audit fee |
|
|
45,000 |
20,000 |
|
| Other
advisory services and certifications |
|
-- |
7,500 |
|
| Special
Audit |
|
|
50,000 |
-- |
|
| Out
of Pocket expenses |
|
|
8,550 |
10,940 |
|
|
|
--------- |
--------- |
|
|
|
|
103,550 |
38,440 |
|
|
========= |
========= |
|
| 22.
FINANCIAL CHARGES |
|
| Mark up on |
|
|
|
37,308,326 |
15,324,159 |
|
| Long
term financing |
|
|
6,692,068 |
692,800 |
|
| Running
finance |
|
|
18,034,349 |
12,629,388 |
|
| Short
term finance |
|
|
6,466,988 |
5,300,274 |
|
| Morabaha
finance |
|
|
18,266,666 |
2,967,123 |
|
| Others |
|
|
13,455 |
61,853 |
|
| Financial
charges on lease |
|
|
888,454 |
538,623 |
|
|
|
|
--------- |
--------- |
|
| Bank
and other charges |
|
|
87,670,306 |
37,514,220 |
|
|
|
|
========= |
========= |
|
|
| 23. TAXATION |
|
|
| Current |
|
| The
provision for current period taxation has not been made in view of brought
forward tax losses. However, provision |
|
| for
minimum tax under section 80(D) of the Income Tax Ordinance, 1979 has been
made in these accounts. |
|
|
| The
income tax assessments of the company have been finalised upto and including
assessment year 1995-96. The |
|
| assessment
for assessment year 1993-94 has been set aside by the Commissioner of Income
Tax (Appeals). The |
|
| company
has preferred appeals against certain disallowances for assessment years
1994-95 and 1995-96. In case of |
|
| adverse
decision in appeals an additional tax liability of Rs. 4.723 million would
arise which has not been provided in |
|
| the
accounts, as the management expects a favourable outcome of appeals. |
|
|
| Deferred |
|
| Deferred
tax arising due to timing differences computed under the liability method is
estimated at Rs. 18.58 million |
|
| (1994:
Rs. 32.952 million) for the current period. Timing differences are not likely
to reverse in the foreseeable future |
|
| and
therefore, no accrual for deferred tax has been made in these accounts. |
|
|
| 24.
TRANSACTIONS WITH ASSOCIATED UNDERTAKINGS |
|
|
| Rentals
for the use of office & other charges |
|
-- |
324,000 |
|
|
|
|
========= |
========= |
|
| Underwriting
commission paid |
|
2,343,750 |
-- |
|
|
|
|
========= |
========= |
|
| Mark-up paid |
|
|
5,063,500 |
-- |
|
|
========= |
========= |
|
|
|
| 25.
REMUNERATION OF CHIEF EXECUTIVE AND EXECUTIVES |
|
|
|
|
Rupees |
|
|
|
|
Chief Executive |
Executives |
|
|
|
|
18 Months |
Year Ended |
18 Months |
Year Ended |
|
|
Period Ended |
31 December, |
Period Ended |
31 December, |
|
|
30June, 1996 |
1994 |
30June, 1996 |
1994 |
|
|
| Managerial
remuneration |
1,285,000 |
516,000 |
936,344 |
346,853 |
|
| House rent |
|
558,000 |
228,000 |
365,910 |
154,514 |
|
| Providend
fund |
93,150 |
38,700 |
59,394 |
18,742 |
|
| Utilities |
|
101,948 |
50,528 |
225,510 |
107,310 |
|
| Medical |
|
115,684 |
47,897 |
72,889 |
17,346 |
|
| Others |
|
96,000 |
36,000 |
-- |
-- |
|
|
|
--------- |
--------- |
--------- |
--------- |
|
|
|
2,249,782 |
917,125 |
1,660,047 |
644,765 |
|
|
|
========= |
========= |
========= |
========= |
|
| No.
of persons |
1 |
1 |
2 |
3 |
|
|
========= |
========= |
========= |
========= |
|
|
| The
chief executive and executives are provided with company owned and maintained
cars. |
|
|
| The
aggregate amount charged in the accounts for fee to eleven non-salaried
directors was Rs. 31,000/- (1994: |
|
| Rs.12,500
to eleven non-salaried directors). |
|
|
| 26. GENERAL |
|
|
|
|
| 26.1
Previous year's figures have been re-arranged where ever necessary to
facilitate comparison. |
|
|
| 26.2
Figures have been rounded off to the nearest rupee. |
|
|
|
|
|
|
|
|
|
|
|
|
|
