| InterAsia Leasing Company Limited |
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|
(Annual Report 1996) |
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CONTENTS |
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| Corporate
Information |
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2 |
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| Directors'
Report And Chairmans' Review |
4 |
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| Notice
of Meeting |
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7 |
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| Auditors'
Report |
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8 |
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| Balance
Sheet |
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10 |
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| Profit
And Loss Account |
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12 |
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| Cash
Flow Statement |
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13 |
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| Notes
To The Accounts |
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14 |
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| Pattern
Of Shareholding |
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24 |
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CORPORATE INFORMATION |
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| Board
of Directors |
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| Inam-ul-Haq,
Chairman. |
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| Rauf
Baksh Kadri. |
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| Naveed
A. Khan, Chief Executive. |
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| Rashid
Zahir, Nominee Director (SAPICO). |
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| Shahid
Ghaffar, Nominee Director (NIT). |
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| Khalid
Malik. |
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| Fahim-ul-Haq. |
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| Managing
Director |
|
Haroon Sharif |
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| Company
Secretary |
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Syed Fazal Ahmed |
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| Bankers |
|
Crescent Investment Bank
Ltd. |
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|
Deutsche Bank Ltd., |
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|
Schon Bank Ltd. |
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| Legal
Advisers |
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| Cornelius
Lane & Mufti, Advocates & Solicitors, |
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| Nawa-i-Waqt
House, 4-Fatima Jinnah Road, |
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| Lahore-54000,
Pakistan. |
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|
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| Auditors |
|
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| Khalid
Majid Husain Rahman, Chartered Accountants, |
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| 2nd
floor, A1-Malik Center, 70 West, G-7/F-7, |
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| Jinnah
Avenue, Islamabad, Pakistan. |
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| Registrar
and Share |
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| Transfer
office |
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| Universal
Management Services (Ptv.) Ltd., |
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| Room
No. 205, Central Hotel, |
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| Abdullah
Haroon Road, Karachi, Pakistan. |
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| Ph:
5688094. |
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| Registered
Office |
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| 26-D,
1 st Floor, Kashmir Plaza, |
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| Jinnah
Avenue, Blue Area, |
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| Islamabad,
Pakistan. |
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| Ph:
270365, 270366, 270367. |
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| Fax:
814868. |
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| Year
of Establishment |
1993 |
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|
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| Credit
Rating |
BB+ (Long term) by PACRA. |
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| Senior
Management |
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| Munawar
Suleman, Senior Vice President (Branch Manager Karachi) |
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| Zargham
K. Durrani, Vice President (Branch Manager Lahore). |
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| Khawaja
Zia Abbas, Assistant Vice President. |
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| Listings |
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Karachi and Islamabad
Stock Exchange. |
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| Liaison
Offices |
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| Karachi: |
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| 415,
Clifton Centre, Khayaban-e-Roomi, |
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| Clifton,
Karachi-75600, Pakistan. |
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| Ph:
5862565, 5863051, |
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| Fax:
(92-21) 5865499. |
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| Lahore: |
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| F-2,
First Floor, Empire Centre, |
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| Main
Boulevard, Gulberg III, |
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| Lahore,
Pakistan. |
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| Ph:
5750761,5755723. |
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| Fax:
5755391. |
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|
| Other
LTV Group Companies |
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| Bankers
Equity Limited. |
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| Long
Term Venture Capital Modaraba. |
|
| First
Interfund Modaraba. |
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| LTV
Housing Finance Limited (formally Interfund Housing Finance Ltd.) |
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| DIRECTORS'
REPORT AND REVIEW BY THE CHAIRMAN |
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| The
Directors have great pleasure in presenting the fourth Annual Report together
with |
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| Audited
Accounts of InterAsia Leasing Company Limited for the period July 01, 1995 to |
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| June
30, 1996. Your company has managed to achieve a reasonable level of growth in
all |
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| major
areas of business. Looking at the existing slow down in economic activity in
the |
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| country,
it was only achievable because of management's prudent approach towards |
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| building
up a productive and performing investment portfolio. |
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|
| The
Business |
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| After
completing the third profitable year of operations, the company is clearly
committed |
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| to
further extend lease financing for industrial development. Looking at the all
time low |
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| performance
of the capital market in Pakistan, InterAsia did not play any active role in
the |
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| stock
market during the year under review. However, as part of the LTV Consortium,
the |
|
| company
has taken a long term strategic equity stake of Rs. 15 million in Bankers
Equity |
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| Limited.
This investment certainly adds strength to InterAsia's corporate image and
will |
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| compliment
resources for future business growth. |
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| Leasing
operations as well as revenues and income have shown a significant growth
over |
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| the
figures of last year. The company has consolidated its net worth and to
strengthen its |
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| balance
sheet it has made a provision for contingencies, in addition to provision for
turn |
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| overtax
and outstanding receivables. The growth however does not actually depict the |
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| attainment
of budgetary targets mainly due to depressed industrial activity in the
country. |
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| On
the whole, results of 1996 indicate an overall healthy trend for your company
as |
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| summarized
below. |
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|
Comparative Financial
Highlights (Rs. ) |
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|
1996 |
|
1995 |
|
1994 |
|
|
|
(June) |
(June/6months) |
(December) |
|
|
|
| Lease
investments |
305, 821,853 |
245,030,349 |
|
194,842,230 |
|
| Revenues |
|
35,904,296 |
16,852,516 |
|
26,689,286 |
|
| Expenditure |
25,302, 570 |
11,723,360 |
|
9, 987,604 |
|
| Profit |
|
10,206,722 |
5,129,156 |
|
16,701,682 |
|
| Net
Worth |
127,788,458 |
117,581,736 |
|
112,452,580 |
|
|
|
|
| The
Investment Portfolio |
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| InterAsia
has a lease portfolio of about Rs. 300 million which is well diversified in
terms |
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| of
geographical risk, sectoral distribution and asset wise exposures. The major
sectors |
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| where
leases have been disbursed include: |
|
| 1. |
Textiles |
|
15.0 |
|
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| 2. |
Cement |
|
13.0 |
|
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| 3. |
Chemicals |
|
11.0 |
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| 4. |
Food & Allied |
|
10.0 |
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| 5. |
Transport &
Communications |
11.0 |
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| 6. |
Pharmaceutical |
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4.5 |
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| 7. |
Engineering |
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7.0 |
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| 8. |
SMEs |
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15.0 |
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| 9. |
Others |
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13.5 |
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| The
company strongly supports small and medium sized enterprises (SMEs) and
currently |
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| over
15% of the investment portfolio is in the SMEs. The company makes a conscious |
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| effort
to keep its investment portfolio well diversified. |
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| Credit
Rating |
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| InterAsia
has been assigned a long term credit rating of BB+ in 1996 from Pakistan
Credit |
|
| Rating
Agency (Pvt.) Limited (PACRA) which is an associate of London based IBCA, the |
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| third
largest credit rating agency in the world. IBCA is recognized by Securities
and |
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| Exchange
Commission in the USA and by authorities in all major financial markets. |
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| InterAsia's
credit rating is also being published in Financial Times Credit Ratings in |
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| Emerging
Markets. |
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|
| Certificates
of Investment (COIs) |
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| After
receiving formal approval from the Corporate Law Authority (CLA), Government |
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| of
Pakistan, InterAsia launched several lucrative saving schemes through
certificates of |
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| investments
(COIs). The Company has managed to raise over Rs. 60 million through |
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| COIs
in 1995-1996 which reflects the market's confidence in the management. |
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|
| Human
Resource Development |
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| The
company has strengthened its human resource base by posting a senior
executive from |
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| one
of its group companies having an excellent record of performance as Managing |
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| Director
at its head office in Islamabad. As a part of special emphasis on human
resource |
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| development,
a number of executives were deputed to participate in management training |
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| programmes
conducted by reputable institutions as well as in those organized in house. |
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| Macro
Economic Environment |
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| The
general politico economic conditions especially the outlook of industry
affect the |
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| demand
for leasing and the size of fiscal deficit determines the availability of
private |
|
| savings
to the private sector institutions influencing the supply side of leasing.
This |
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| scenario
imposes constraints on lease financing forcing leasing institutions to make |
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| appropriate
adjustments in terms of lease size and sectoral exposures. The performance of |
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| the
economy as a whole has shown a mixed trend during the year under review. With |
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| improvements
in the economy, we can expect a marked increase in business. |
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|
| Future
Outlook |
|
| According
to a recent report published by International Finance Corporation (IFC), in |
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| many
developing economies, leasing has been growing very rapidly. Between 1988 and |
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| 1994,
new leases grew from US$ 15 billion to USS 44 billion. Pakistan is following
the |
|
| same
trend and leasing industry is bound to grow in future as the country has to
broaden |
|
| and
modernize its industrial base. Our country has a tremendous potential for
long term |
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| economic
development. It is our earnest hope that with a more sustainable macro |
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| economic
frame-work, privatization and financial sector reform, more favourable |
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| conditions
will prevail for the future growth of business and greater prosperity of the |
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| country. |
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|
| Acknowledgment |
|
| The
Directors would like to place on record their thanks to the shareholders for
their |
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| confidence
in the Company, to our clients for their continued support and the executives |
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| and
staff for the hard work put in by them for their commitment, competent
management, |
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| and
conduct of company's business. |
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|
For and on behalf of
Board of Directors |
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|
-Sd- |
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| Islamabad |
|
Inam-ul Haq |
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| September
26, 1996 |
Chairman |
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| NOTICE
OF MEETING |
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| Notice
is hereby given that Fourth Annual General Meeting of INTERASIA LEASING |
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| COMPANY
LIMITED will be held at the registered office of the Company, 26-D, |
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| Kashmir
Plaza, Jinnah Avenue, Blue Area, Islamabad, on Thursday October 31, 1996 at |
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| 4.00
P.M. to transact the following business. |
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| ORDINARY
BUSINESS |
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| 1.
To confirm the Minutes of the Third Annual General Meeting held on Monday, |
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| February
26, 1996. |
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| 2.
To receive, consider and adopt the audited accounts of the Company for the |
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| period
ended June 30, 1996 together with the Directors' and auditors' report |
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| thereon. |
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| 3.
To appoint Auditors for the year 1996 and fix their remuneration. The present |
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| auditors,
M/s. Khalid Majid Husain Rehman, Chartered Accountants retire and |
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| being
eligible, to offer themselves for reappointment. |
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|
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| 4.
To transact any other business with the permission of the Chair. |
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|
By order of the Board |
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|
SYED FAZAL AHMED |
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| Karachi:
October 9, 1996. |
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Company Secretary |
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| NOTES: |
|
| 1.
The Register of Members of the Company will remain closed from October 19, |
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| 1996
to October 27, 1996 (both days inclusive) |
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|
|
| 2.
A member entitled to attend and vote at the meeting is entitled to appoint a
proxy |
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| to
attend and vote for him/her. A proxy need not to be a member of the Company. |
|
|
|
| 3.
An instrument of proxy and the power of Attorney or other authority (if any) |
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| under
which it is signed, or a notarially certified copy of such power of attorney, |
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| in
order to be valid must be deposited at the registered office of the Company
not |
|
| less
than 48 hours before the time of the meeting. |
|
|
|
| 4.
Members are advised to lodge shares for transfer at the office of our
Registrar, |
|
| Universal
Management Service (Pvt.) Ltd., Room Nos. 205-Central Hotel, |
|
| Abdullah
Haroon Road, Karachi, Tel. No. 5688094. |
|
|
| 5.
Members are requested to notify any change in addresses immediately. |
|
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|
|
| AUDITORS
REPORT TO THE MEMBERS |
|
| We
have audited the annexed balance sheet of Inter Asia Leasing Company Limited
as at June 30, |
|
| 1996
and the related profit and loss account and cash flow statement, 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
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 and cash flow statement
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 purposes 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 cash flow statement,
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 cash flow
statement for |
|
| the
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. |
|
|
|
Khalid Majid Husain
Rahman |
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| Islamabad:
September 26, 1996 |
Chartered Accountants |
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|
BALANCE SHEET AS |
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|
June 30, |
June 30, |
|
|
Note |
1996 |
1995 |
|
|
|
Rupees |
Rupees |
|
| SHARE
CAPITAL AND RESERVES |
|
|
|
| Authorised
Capital |
|
|
|
| 20,000,000
ordinary |
|
| shares
of Rs. 10 each |
|
200,000,000 |
200,000,000 |
|
|
|
========== |
========== |
|
| Issued,
subscribed and paid up capital |
|
| 10,000,000
ordinary shares of |
|
| Rs.
10 each fully paid in cash |
|
100,000,000 |
100,000,000 |
|
|
|
|
|
| Revenue
reserves |
|
| Statutory |
|
8,136,692 |
6,016,347 |
|
| General |
|
10,000,000 |
6,600,718 |
|
| Contingencies |
|
3 |
2,313,600 |
- |
|
| Un-appropriated
profit |
|
|
7,338,166 |
4,964,671 |
|
|
|
---------- |
---------- |
|
|
|
|
127,788,458 |
117,581,736 |
|
|
|
|
|
|
|
| LONG
TERM DEPOSITS |
|
4 |
29,618,140 |
29,488,424 |
|
|
|
|
|
|
| CURRENT
LIABILITIES |
|
|
|
| Current
portion of long term |
|
|
|
|
| deposits |
|
|
34,289,121 |
2,536,006 |
|
| Finances
under mark-up |
|
|
|
|
| arrangements |
|
5 |
98,681,839 |
74,990,391 |
|
| Accrued
and other liabilities |
6 |
11,847,799 |
3,201,582 |
|
| Dividend
payable |
|
|
160,665 |
519,515 |
|
|
|
---------- |
---------- |
|
|
|
144,979,424 |
81,247,494 |
|
|
|
---------- |
---------- |
|
|
|
302,386,022 |
228,317,654 |
|
|
|
========== |
========== |
|
|
|
|
|
| The
annexed notes form an integral part of these financial statements. |
|
|
|
|
|
|
|
AT JUNE 30, 1996 |
|
|
|
|
June 30, |
June 30, |
|
|
|
|
|
1996 |
1995 |
|
|
|
|
Note |
Rupees |
Rupees |
|
|
| OPERATING
FIXED ASSETS |
|
|
|
| -TANGIBLE |
|
7 |
3,028,115 |
3,451,034 |
|
|
|
|
|
| NET
INVESTMENT IN LEASES |
|
|
|
| Minimum
lease payment receivables |
|
268,171,977 |
214,945,919 |
|
| Add:
Residual value of leased assets |
|
37,649,876 |
30,084,430 |
|
|
---------- |
---------- |
|
|
|
305,821,853 |
245,030,349 |
|
| Less:
Unearned lease income |
|
(74,461,849) |
(59,011,061) |
|
|
---------- |
---------- |
|
| Net
investment in leases |
|
|
231,360,004 |
186,019,288 |
|
| Less:
Current portion of net |
|
|
| investment in leases |
|
(74,210,255) |
(55,500,517) |
|
|
|
---------- |
---------- |
|
|
|
157,149,749 |
130,518,771 |
|
| LONG
TERM INVESTMENTS |
|
8 |
41,351,768 |
24,154,343 |
|
| LONG
TERM DEPOSITS |
|
|
161,150 |
141,250 |
|
| DEFERRED
COSTS |
|
9 |
2,935,622 |
3,425,450 |
|
|
|
|
| CURRENT
ASSETS |
|
|
|
| Current
portion of net investment in leases |
74,210,255 |
55,500,517 |
|
| Advances,
prepayments and other |
|
|
|
| receivables |
|
10 |
20,811,828 |
10,333,886 |
|
| Cash
and bank balances |
|
11 |
2,737,535 |
792,403 |
|
|
|
---------- |
---------- |
|
|
|
|
97,759,618 |
66,626,806 |
|
|
|
|
|
|
|
---------- |
---------- |
|
|
|
302,386,022 |
228,317,654 |
|
|
|
========== |
========== |
|
|
|
|
|
|
PROFIT AND LOSS ACCOUNT
FOR |
|
|
|
|
THE PERIOD ENDED JUNE 30,
1996 |
|
|
For the period |
For the period |
|
|
from July 01, |
from January 01, |
|
|
|
Note |
1995 to June |
1995 to June |
|
|
|
30, 1996 |
30, 1995 |
|
|
Rupees |
Rupees |
|
| REVENUES |
|
| Income
from leasing operations |
12 |
35,409,723 |
17,946,771 |
|
| Income/(Loss)
from investments |
13 |
(67,376) |
(1,318,205) |
|
| Other
Income/(charges) |
|
14 |
561,949 |
223,950 |
|
|
|
---------- |
---------- |
|
|
|
|
35,904,296 |
16,852,516 |
|
| EXPENSES |
|
|
|
| Administrative
and operating expenses |
15 |
99,016,681 |
6,496,357 |
|
| Financial
charges |
|
16 |
15,400,902 |
5,227,003 |
|
|
|
---------- |
---------- |
|
|
|
25,302,570 |
11,723,360 |
|
|
|
---------- |
---------- |
|
| Profit
for the year |
|
10,601,726 |
5,129,156 |
|
|
|
|
|
| Provision
for taxation |
|
|
|
| Current |
|
19 |
177,295I |
- |
|
| Prior year |
|
217,709 |
- |
|
|
|
---------- |
---------- |
|
|
|
395,004 |
- |
|
|
|
---------- |
---------- |
|
|
|
10,206,722 |
5,129,156 |
|
| Un-appropriated
profit |
|
|
|
| brought forward |
|
4,964,671 |
861,346 |
|
|
|
---------- |
---------- |
|
|
|
15,171,393 |
5,990,502 |
|
| Appropriations: |
|
|
|
| Transfer
to statutory reserve |
|
2,120,345 |
1,025,831 |
|
| Transfer
to contingencies reserve |
|
2,313,600 |
- |
|
| Transfer
to general reserve |
|
3,399,282 |
- |
|
|
|
---------- |
---------- |
|
|
|
7,833,227 |
1,025,831 |
|
|
|
---------- |
---------- |
|
| Un-appropriated
profit carried to balance sheet |
7,338,166 |
4,964,671 |
|
|
|
========== |
========== |
|
|
|
|
|
| The
annexed notes form an integral part of these financial statements. |
|
|
|
|
|
|
|
|
|
|
CASH FLOW STATEMENT FOR
THE PERIOD |
|
|
FROM JULY 01, 1995 TO
JUNE 30, 1996 |
|
|
|
|
|
1996 |
1995 |
|
|
|
Rupees |
Rupees |
|
|
|
|
|
| CASH
FLOWS FROM OPERATING ACTIVITIES |
|
|
|
|
|
|
|
|
| Net
profit before taxation |
|
10,206,722 |
5,129,156 |
|
| Adjustments
for: |
|
|
|
| Depreciation |
|
674,823 |
425,688 |
|
| Deferred
costs amortized |
|
1.270,862 |
604,491 |
|
| (Income)/1oss
from Investments |
|
67,376 |
1,261,147 |
|
| (Gain)
on sale of fixed assets |
|
(59,878) |
(55,668) |
|
| Provision
for diminution in the value of |
|
|
| investments |
|
- |
(149,600) |
|
| Operating
profit before working capital changes |
12,159,905 |
7,215,214 |
|
|
|
|
|
|
| Increase
in advances, prepayments and |
|
|
|
| other
receivables |
|
(10,477,942) |
(31,911) |
|
| Increase
in investment in leases |
|
(106,512,370) |
(70,739,005) |
|
| Recoveries
from investment in leases |
|
61,171,654 |
35,787,218 |
|
| Increase
in long term deposits received |
31,882.83 |
6,453,104 |
|
| Increase/(decrease)
in accrued & other liabilities |
8,646.22 |
(261,162) |
|
| Increase
in long term deposits |
|
(19,900) |
(42,000) |
|
| Cash
generated from operations |
|
(15,309,510) |
(28,833,756) |
|
|
|
---------- |
---------- |
|
| Net
cash used in operating activities |
|
(3,149,605) |
(21,618,542) |
|
|
|
|
|
| CASH
FLOWS FROM INVESTING ACTIVITIES |
|
|
|
| Increase
in deferred cost |
|
(781,034) |
- |
|
| Purchase
of fixed assets |
|
(1.237.615) |
(1,321,622) |
|
| Proceeds
from sale of fixed assets |
|
1,045.59 |
1,007,625 |
|
