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Annual Report 1996
Ibrahim  Leasing Limited
Pattern of Shareholding as at June 30, 1996
FORM A
No of    Having Shares Shares Percentage
Shareholders From To Held
84 1 100 8400 0.0840
8168 101 500 4072900 40.7290
43 501 1000 43000 0.4300
117 1001 5000 374200 3.7420
15 5001 10000 140500 1.4050
1 10001 15000 15000 0.1500
13 15001 20000 260000 2.6000
2 20001 25000 50000 0.5000
1 25001 30000 27500 0.2750
2 35001 40000 80000 0.8000
4 45001 50000 200000 2.0000
1 50001 55000 50500 0.5050
6 75001 80000 480000 4.8000
2 85001 90000 180000 1.8000
5 95001 100000 500000 5.0000
1 145001 150000 150000 1.5000
3 155001 160000 478000 4.7800
1 195001 200000 200000 2.0000
1 245001 250000 250000 2.5000
1 435001 440000 440000 4.4000
4 495001 500000 2000000 20.0000
-------- -------- --------
8475 10000000 100.0000
========= ========= =========
Categories of Shareholders
Shareho- Shareho- Perce-
Particulars lders lding ntage
INDIVIDUALS 8466 7,573,500 75.74
INVESTMENT COMPANIES 4 1,251,000 12.51
PRIVATE COMPANIES 1 500 0.01
INSURANCE COMPANIES 1 25,000 0.25
JOINT STOCK COMPANIES 1 150,000 1.50
FINANCIAL INSTITUTIONS 1 500,000 5.00
MODARABA COMPANIES 1 500,000 5.00
---------- ---------- ----------
8475 10,000,000 100.00
============ ============ ============
Company Information
Chief Executive
Abdul Aziz
Directors
Sheikh Mukhtar Ahmed
Sheikh Muhammad Yaseen
Mr. Muhammad Naeem Mukhtar
Mr. Muhammad Waseem Mukhtar
Mr. Asim Yaseen
Mr. Pervez Ifiikhar Khan
(Nominee of Pakistan-Kuwait Investment
Company (Pvt.) Ltd.)
Secretary
S.M. Hasnain Rizvi
Auditors
M. Yousuf Adil & Co.
Chartered Accountants,
Karachi.
Tax Consultants
F.R. Merchant & Co.
Chartered Accountants,
Karachi.
System Consultants
KPMG Peat Marwick Associates (Pvt) Ltd.
Karachi.
Bankers
Askari Commercial Bank Ltd.
Al-Faysal Investment Bank Ltd.
Al-Baraka Islamic Investment Bank
The Bank of Punjab
Registered Office /
Share Department
Ibrahim Centre
GK-7/59,
Bagh-e-Zehra Street,
Kharadar, Karachi.
Head Office
Ibrahim Centre
I-A, Ahmed Block,
New Garden Town,
Lahore.
Notice of Meeting
Notice is hereby given that the 3rd Annual General Meeting of the shareholders of the Company
will be held on 31-12-1996 at 10:00 A.M., at Karachi Sheraton Hotel, Club Road, Karachi to
transact the following business:-
1. To confirm the minutes of the preceding meeting of the shareholders of the Company.
2. To consider and approve the Annual Audited Accounts, comprising Balance Sheet,
Profit & Loss Account of the Company for the year ending June 30, 1996 together with
Directors' and Auditors' reports thereon.
3. To approve Cash Dividend @ 15% as recommended by the board of Directors.
4. To appoint Auditors for the year 1996/97 and to fix their remuneration. The present
auditors M/s. M. Yousuf Adil & Co., Chartered Accountants, being eligible for
appointment, offer themselves for re-appointment.
5. To transact any other business with the permission of the chair.
By Order of the Board
(S.M. Hasnain Rizvi)
Company Secretary
NOTES:
i) The share transfer books of the Company shall remain closed from 24-12-1996 to
31-12-1996 (both days inclusive) to determine the names of members entitled to
Dividend payment and to attend the meeting. Transfers received in order at the
Registered Office of the Company at the close of business on 23-12-I996 will be
treated in time.
ii) A member entitled to attend and vote at the meeting may appoint another member as
  his/her proxy to attend and vote on his/her behalf.
iii) The proxies, in order to be effective, must be received by the Company atleast
  48 hours before the time for holding the meeting.
Directors' Report to the Shareholders
The Board of Directors of Ibrahim Leasing Limited takes pleasure in presenting the third annual
report of your company together with audited accounts for the year ended June 30,1996.
Financial results of your company for the period under review are summarized as follows:
For the  For nine
year ended months 
June 30, ended
1996 June 30, 
1995
(Rupees) (Rupees)
Gross revenue 26,141,553 14,334,251
Expenditure 9,864,221 5,410,175
Profit before tax 16,277,332 8,924,076
Provision for tax 192,706 950,000
Profit after tax 16,084,626 7,974,076
Unappropriated profit brought forward 6,379,261 -
Profit available for appropriation 22,463,887 7,974,076
Your Directors are pleased to recommend 15%Cash Dividend i.e.Rs.l.5 per share out of the
profits earned. The appropriation of the profit will be.
Appropriation
Proposed dividend 15,000,000 -
Transferred to special reserve 3,216,925 1,594,815
Unappropriated profit carried forward 4,246,962 6,379,261
Inspite of adverse economic conditions, the performance of your company was satisfactory and
the net profit after tax has increased by 102% as compared to the previous period.
The company continued its prudent policy in selection of the sector and clientage for granting
lease facilities. Net investment in lease finance of Rs. 86.5 million as at June 30, 1995 recorded
an increase of 96.5% and amounted to Rs. 169.98 million as on June 30, 1996 and the
composition of lease portfolio is as under:
Sector        1996         1995
      % age         % age
     Rs. (000)       Rs. (000)
Textile 41,816 24.60 35,821 41.42
Pharmaceuticals/chemicals 32,720 19.25 11,888 13.74
Cement 29,505 17.36 7,657 8.85
Fuel & energy 21,638 12.73 10,456 12.09
Paper  & board 14,395 8.47 16,953 19.60
Auto & allied engineering 8,096 4.76 - -
Engineering 6,987 4.11 - -
Sugar 3,918 2.31 260 0.30
Electrical goods 802 0.47 1,168 1.35
Miscellaneous 10,099 5.94 2,286 2.65
---------- ---------- ---------- ----------
169,976 100 86,489 100.00
---------- ---------- ---------- ----------
The recovery of your company is satisfactory which is attributed to the effective monitoring
efforts at all levels of the Management and Staff.
During the period under review the company obtained credit lines of Rs.55 million from
different local financial institutions. The management of the company is in constant contact
with local financial institutions for further facilities and also in the process of negotiating for
long term credit facilities from foreign lending institutions.
The company is planning, in addition to industrial creditworthy customers to diversify lease
operations to small industries, consumer products and equipment to the professionals for broad
based and better yield portfolio. This will assist to counterbalance the adverse effects of
problems like high cost of borrowing and levy of excise duty, being faced by leasing sector
these days.
We wish to place on record our thanks to all regulatory bodies for their guidance and support,
banks/financial institutions for extending credit lines. We would also like to thank the
management and staff of the company for their devotion, dedications and concerted efforts
towards the steady growth of the company.
On behalf of the Board
Abdul Aziz Khan
Chief Executive
Auditors' Report to the Member
We have audited the annexed balance sheet of IBRAHIM LEASING LIMITED as at
June 30, 1996 and the related profit and loss account and statement of changes in financial
position, together with the notes forming part thereof, for the year then ended and we state that
we have obtained all the information and explanations which to the best of our knowledge and
belief were necessary for the purpose of 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 year was for the purpose of the
Company's business; and
iii) the business conducted, investments made and the expenditure
incurred during the year were in accordance with the objects of the
Company;
c) in our opinion and to the best of our information and according to the
explanations given to us, the balance sheet and 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 Company's affairs as at June 30, 1996 and of the profit and the
changes in the financial position for the year 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
CAPITAL AND RESERVES
Authorized
10,000,000 ordinary shares of Rs. 10/- each 100,000,000 100,000,000
============ ============
Issued, subscribed and paid-up
10,000,000 ordinary shares of Rs. 10/- each
fully paid in cash 100,000,000 100,000,000
Special reserve 3 4,811,740 1,594,815
Unappropriated profit 4,246,962 6,379,261
------------ ------------
109,058,702 107,974,076
REDEEMABLE CAPITAL 4 2,500,000 --
LIABILITIES AGAINST ASSETS
SUBJECT TO FINANCE LEASE 5 115,530 293,736
LONG TERM SECURITY DEPOSITS 6 21,068,217 9,992,133
DEFERRED LIABILITIES
Gratuity 303,046 74,466
CURRENT LIABILITIES
Short term bank borrowings 7 29,743,703 --
Current portion of long term liabilities 8 15,178,206 143,292
Creditors, accrued and other liabilities 9 611,858 114,626
Proposed dividend 15,000,000 --
Provision for taxation 1,142,706 950,000
------------ ------------
61,676,473 1,207,918
CONTINGENCIES AND COMMITMENTS 10 -- --
------------ ------------
194,721,968 119,542,329
============ ============
The annexed notes from 1 to 27 form an integral part of these accounts.
1996 1995
Note Rupees Rupees
TANGIBLE OPERATING FIXED ASSETS 11 1,067,502 1,266,153
NET INVESTMENT IN LEASE FINANCE 12 135,191,838 73,336,776
LONG TERM INVESTMENTS IN SECURITIES 13 16,066,800 16,066,800
LONG TERM DEPOSITS AND DEFERRED COSTS 14 2,028,787 2,636,777
CURRENT ASSETS
Short term investment in securities 15 4,926,500 4,926,500
Current portion of net investment
in lease finance 16 34,784,411 13,152,397
Advances, deposits, prepayments 
and other receivables 17 586,102 697,962
Cash and bank balances 18 70,028 7,458,964
------------ ------------
40,367,041 26,235,823
------------ ------------
194,721,968 119,542,329
============ ============
Profit and Loss Account for the year ended June 30, 1996
1996 1995
Note Rupees Rupees
REVENUE
Income from lease operations 19 25,600,812 8,667,362
Profit on bank deposits and short term placements     20 235,631 5,566,889
Gain on sale of securities 287,350
Other income 21 17,760 100,000
------------ ------------
26,141,553 14,334,251
EXPENDITURE
Financial charges 22 5,444,760 133,029
Administrative and operating expenses 23 3,811,471 2,482,653
Diminution in value of securities 15 -- 2,338,500
Deferred cost amortized 14.1 607,990 455,993
------------ ------------
9,864,221 5,410,175
------------ ------------
PROFIT BEFORE TAXATION 16,277,332 8,924,076
PROVISION FOR TAXATION
For the year 192,706 950,000
------------ ------------
NET PROFIT AFTER TAXATION 16,084,626 7,974,076
UNAPPROPRIATED PROFIT BROUGHT FORWARD 6,379,261 --
------------ ------------
PROFIT AVAILABLE FOR APPROPRIATION 22,463,887 7,974,076
APPROPRIATION
Proposed dividend 15% 150,000,001 --
Transferred to special reserve 3,216,925 1,594,815
------------ ------------
18,216,925 1,594,815
------------ ------------
UNAPPROPRIATED PROFIT CARRIED FORWARD 4,246,962 6,379,261
============ ============
The annexed notes from 1 to 27 form an integral part of these accounts.
Statement of Changes in financial Position (Cash Flow Statement) for the year ended June 30, 1996
1996 1995
Rupees Rupees
A. CASH FLOW FROM OPERATING ACTIVITIES
Profit before taxation 16,277,332 8,924,076
Changes not affecting working capital
Provision for diminution in value of securities      --     2,338,500
Provision for gratuity 228,580 74,466
Amortization of deferred costs 607,990 455,993
Financial charges 5,444,760 133,029
Depreciation 201,791 244,347
------------ ------------
6,483,121 3,246,335
------------ ------------
Operating profit before working capital changes 22,760,453 12,170,411
Changes in working capital
(Increase)/decrease in current assets
Advances, deposits, prepayments and other receivables 150,954 (160,888)
Increase/(decrease) in current liabilities
Loan from associated companies -- (1,044,116)
Creditors, accrued and other liabilities (46,840) (675,093)
------------ ------------
(46,840) (1,719,209)
------------ ------------
Net (Increase)/decrease in working capital 104,114 '(1,880,097)
Financial charges paid (4,900.688) '(133,029)
Tax paid (39,094)  '(508,305)
------------ ------------
Net cash from operating activities 17,924,785 9,648,980
=========== ===========
B. CASH FLOW FROM INVESTING ACTIVITIES
Investment in lease - Net (83,487,076)  (86,489,173)
Investments in securities - Net     --     '(23,331,800)
Capital expenditure (3,140) '(1,506,360)
-Deferred expenditure (50,095)
Long term security deposit (52,820)
------------ ------------
Net cash used in investing activities (83,490,216)  '(111,430,248)
=========== ===========
1996 1995
Rupees Rupees
C. CASH FLOW FROM FINANCING ACTIVITIES
Share capital -- 50,000,000
Long term security deposits 11,076,084 9,992,133
Redeemable capital 22,500,000 --
Repayment of' redeemable capital (5,000,000)
Short term bank borrowings 29,743,703 --
Finance lease -- 528,206
Share deposit money -- (800,000)
Repayment of lease liability (143,292) (91,178)
------------ ------------
Net cash from financing activities 58,176,495 59,629,161
=========== ===========
NET INCREASE/(DECREASE)IN CASH AND BANK BALANCES (A+B+C) (7,388,936) (42,152,107)
CASH AND BANK BALANCES AT THE BEGINNING OF THE YEAR 7,458,964 49,611,071
------------ ------------
CASH AND BANK BALANCES AT THE END OF THE YEAR 70,028 7,458,964
=========== ===========
Notes to the Accounts for the year ended June 30, 1996
 
1. STATUS AND ACTIVITIES
The Company was incorporated as a public limited company on July 26, 1993 and is
listed on the Stock Exchanges in Pakistan.
The Company is classified as a non-banking financial institution by the State Bank of
Pakistan under the Banking Companies Ordinance, 1962 and is mainly engaged in the
business of leasing.
2. SIGNIFICANT ACCOUNTING POLICIES
2.1 Accounting Convention
These accounts have been prepared under the "historical cost convention".
2.2 Staff Retirement Benefits
The Company operates an unfunded gratuity scheme covering all its employees.
Provision is made annually to cover the liability under the scheme.
2.3 Operating Assets
Owned
Operating assets, are stated at cost less accumulated depreciation.
Depreciation is charged to income applying the reducing balance method at the
rates specified in operating assets note.
Depreciation on additions during the year is charged on the basis of whole year
while no depreciation is charged on deletions during the year.
Leased
The company accounts for the assets acquired under finance lease by recording
the assets and related liabilities. Financial charges are allocated to accounting
periods in a manner so as provide a constant periodic rate of charge on the
outstanding liability. Depreciation is charged at the rates specified in the related
note, to write off the assets over estimated useful life in view of the certainty of
ownership of the assets at the end of the lease period.
2.4 Deferred Costs
These will be amortized in a maximum period of five years from the year of
de ferment.
2.5 Lease Accounting
All leasing agreements are accounted for in accordance with the International
Accounting Standard 17 "Accounting for leases"
2.6 Investments
Short Term
Investment in securities are stated at lower of moving average cost and market
value on overall portfolio basis. Permanent differences in value is charged to
current income.
Long Term
These are stated at cost.
2.7 Taxation
The charge for current taxation is based on taxable income at the current tax
rate after taking into account tax credit and tax rebates available, if any.
Deferred tax is accounted for by using the liability method on all major liming
differences excluding tax effects on those timing differences which are not likely
to reverse in foreseeable future. As measure of prudence deferred tax debits are
not accounted for.
2.8 Revenue recognition
Lease Revenue
The company follows the financing method in accounting for and recognition of
lease income. Under this method the earned income i.e. the excess of aggregate
lease rental and estimated residual value over the net investment (cost of leased
assets) is deferred and then amortized to income over the term of the lease,
applying the annuity method to produce a constant rate of return on the net
investment in lease.
Musharika Finance
Income from Musharika transaction is recognized on the basis of pro-rata accrual
of the profit estimated during the year.
Dividend Income
Dividend income is recorded at the time of closure of share transfer books of
the company declaring dividend.
3. SPECIAL RESERVE
Tills represents the amount set aside out of after tax profit in accordance with State
Bank of Pakistan NBFI Circular No. 1 dated December 05,1991 under this circular
20% of after tax profits are to be transferred to a special reserve till such time that this
reserve is equal to paid up capital.
1996 1995
Rupees Rupees
4. REDEEMABLE CAPITAL
Askari Commercial Bank Limited (4.1) 7,500,000 --
Al-Faysal Investment Bank Limited (4.2) 15,000,000 --
------------ ------------
22,500,000 --
Less: Paid during the year 5,000,000 --
------------ ------------
17,500,000 --
Less: Current portion 15,000,000 --
------------ ------------
2,500,000 --
============ ============
4.1 It represents term finance facility utilized against sanctioned limit of Rs. 10 million
which is secured against pari passu charge on all present and future leased assets of the
company. The finance is repayable in eight quarterly installments of Rs. 1.25 million
commencing from September 04, 1996. It is subject to mark-up @ 19% per annum.
4.2 It represents morabaha finance facility secured by part passu charge on all present and
future leased assets of the company, demand promissory note and personal guarantees
of directors. The finance is repayable in three half yearly installments commencing
from March 28, 1996. It is subject to mark-up @ 19%per annum.
1996 1995
Rupees Rupees
5. LIABILITIES AGAINST ASSETS SUBJECT TO
FINANCE LEASE
Present value of minimum lease payments 437,028 528,206
Less: Paid during the year 143,292 91,178
293,736 437,028
Less: Current portion shown under current liabilities 178,206 143,292
115,530 293,736
These represent vehicles acquired under lease agreements with First Crescent Modaraba
and Asian Leasing Corporation Limited. The purchase option is available to the company
on payment of all installments and surrender of deposit paid under the agreements.
Other significant financial terms & conditions are as under:-
Lease I  Lease II
Number of monthly installments 36 36
Installments remaining 14 17
Commenced from 26-09-94 04-12-94
Applicable rate of finance 22% 22%
Amount of installment (Rs.) 7,789 10,040
The future minimum lease payments to which the company is committed as at
June 30, 1996 are as follows:-
Year Rental Residual Total
Value
1996-97 213,948 - 213,948
1997-98 65,778 52,820 118,598
-------------
332,546
Financial charges allocated to future period 38,810
-------------
293,736
=============
6. LONG TERM SECURITY DEPOSITS
These represent interest free security deposits received from lessees under lease
contracts and are repayable/adjustable at the expiry of the respective lease periods.
7. SHORT TERM BANK BORROWINGS
Running finance (7.1) 9,743,703 -
Morabaha finance (7.2) 20,000,000 -
------------- -------------
29,743,703 -
============= =============
7.1 This facility has been obtained from The Bank of Punjab at file mark-up rate of
55 paisa per thousand per day against charge on present and future leased assets
of the company ranking pari passu with other lenders.
7.2 The facility of Rs. 20 million has been obtained from AI-Baraka Islamic Investment
Bank B.S.C. (E.C.). The facility is secured against pari passu charge on present and
future leased assets of the company, demand promissory note and personal guarantees
of the directors of company. It is subject to mark-up @ 19% per annum.
8. CURRENT PORTION OF LONG TERM LIABILITIES
Redeemable capital 15,000,000 -
Liabilities against assets subject to finance lease 178,206 143,292
------------- -------------
15,178,206 143,292
============= =============
9. CREDITORS, ACCRUED AND OTHER LIABILITIES
Sundry creditors 20,000 20,000
Accrued expenses 47,786 94,626
Accrued financial charges 544,072 --
------------- -------------
611,858 114,626
============= =============
10. CONTINGENCIES AND COMMITMENTS
Commitment
Lease contracts commited but not executed at the balance sheet date were Rs. NIL.
(1995: Rs. 37.5 million)
11. TANGIBLE OPERATING FIXED ASSETS
C O S T DEPRECIATION / AMORTIZATION
At Additions/ At Accumulated Written Charge Rate
Particulars 01-07-95 (Deletion) 30 06-96 At 30-06-96 Down Value For The (%)
At 30-06-96 Year
Owned
Furniture and fixture 184,000 -- 184,000 34,960 149,040 16,560 10
Computers 329,800 890 330.69 62,751 267,939 29,771 10
Office equipment 64,195 -- 64.20 12,570 51,625 5,736 10
Vehicles 368,584 2,250 370,834 133,140 237.69 59,423 20
--------- --------- --------- --------- --------- ---------
946,579 3,140 949,719 243,421 706,298 111,490
Leased
Motor vehicles 564,381 -- 564.38 203.18 361,204 90,301 20
--------- --------- --------- --------- --------- ---------
Rupees 1,510,960 3,140 1,514,100 446,598 1,067,502 201,791
========= ========= ========= ========= ========= =========
1995- Rupees 4,600 1,506,360 1,510,960 244,807 1,266,153 244,347
========= ========= ========= ========= ========= =========
1996 1995
Rupees Rupees
11.1 Depreciation/amortization for the year has been charged as follows:-
Pre-operating expenses -- 19,673
Administrative expenses 201,791 224,674
--------- ---------
201,791 244,347
========= =========
12. NET INVESTMENT IN LEASE FINANCE
Minimum lease payments receivable 209,041,248 113,458,185
Residual value of leased assets 21,068,217 9,992,133
--------- ---------
230,109,465 123,450,318
Less: Unearned finance income 60,133,216 36,961,145
--------- ---------
Net investment in lease finance 169,976,249 86,489,173
Less: Current portion of net investment 34,784,411 13,152,397
--------- ---------
135,191,838 73,336,776
========= =========
13. LONG TERM INVESTMENTS IN SECURITIES
Quoted - Associated Company
Ibrahim Fibres Limited
994,800 ordinary shares of Rs. 10/- each
[Market value - June 30, 1996: Rs. 6,316,980/-
(1995: Rs. 9,201,900/-)] 15,916,800 15,916,800
Federal Investment Bonds (13.1 ) 150,000 150,000
--------- ---------
16,066,800 16,066,800
========= =========
13.1 The investment is made to comply with the NBFI's regulations of State Bank of
Pakistan. The mark up receivable is 15% per annum.
14. LONG TERM DEPOSITS AND DEFERRED COSTS
Security deposits 52,820 52,820
Deferred costs ( 14.1 ) 1,975,967 2,583,957
--------- ---------
2,028,787 2,636,777
========= =========
14.1 Deferred Costs
Preliminary expenses 380,126 380,126
Share issue expenses 2,030,285 2,030,285
Unallocated expenditure 629,539 629,539
3,039,950 3,039,950
Less: Amortized todate 1,063,983 455,993
--------- ---------
1,975,967 2,583,957
========= =========
1996 1995
Rupees Rupees
15. SHORT TERM INVESTMENTS IN SECURITIES
Quoted - Associated Company
Muslim Commercial Bank Limited
141,600 (1995:118,000) Ordinary shares of Rs. 10/- each
Cost/Value as at July 01, 1995 4,926,500 7,265,000
Less: Diminution in value - 2,338,500
--------- ---------
4,926,500 4,926,500
========= =========
The aggregate market value as on June 30, 1996 was Rs. 5,239,200/- (1995: Rs. 4,926,500/-)
16. CURRENT PORTION OF NET INVESTMENT
IN LEASE FINANCE
This represents the principal portion of lease rentals of Rs. 62.271 million
(1995: Rs. 12.682 million) receivable within the following twelve months.
17. ADVANCES, DEPOSITS, PREPAYMENTS AND
OTHER RECEIVABLES
Profit / Mark-up receivable 11,250 119,489
Insurance prepaid 20,381 56,768
Advance income tax 547,399 508,305
Other receivables 7,072 13,400
--------- ---------
586,102 697,962
========= =========
18. CASH AND BANK BALANCES
Cash in hand 1,396 2,666
Cash with banks
In current account 58,632 3,907,389
In deposits account 10,000 3,548,909
--------- ---------
68,632 7,456,298
--------- ---------
70,028 7,458,964
========= =========
19. INCOME FROM LEASE OPERATIONS
Income on lease contracts 24,796,389 7,428,861
Front end fee 343,154 1,175,834
Documentation charges 56,000 34,000
Late payment charges 60,784 28,667
Commitment fee 329,759 -
Miscellaneous 14,726 -
--------- ---------
25,600,812 8,667,362
========= =========
20. PROFIT ON SHORT TERM DEPOSITS AND
SHORT TERM PLACEMENTS
Income from bank deposits 235,631 4,655,302
Income on musharika financing - 911,587
--------- ---------
235,631 5,566,889
========= =========
1996 1995
Rupees Rupees
21. OTHER INCOME
Underwriting commission -- 100,000
Miscellaneous 17,760 --
--------- ---------
17,760 100,000
========= =========
22. FINANCIAL CHARGES
Mark-up on liabilities against assets subject
to finance lease 70,656 56,992
Mark-up on redeemable capital 1,732,667 --
Mark-up on short term loans 3,525,661 61,370
Bank charges 115,776 14,667
--------- ---------
5,444,760 133,029
========= =========
23. ADMINISTRATIVE AND OPERATING EXPENSES
Directors' meeting fee 1,000 500
Staff salaries and benefits 1,857,295 1,178,597
Gratuity 234,005 74,466
Rent 60,000 45,000
Utilities 48,947 28,133
Fee & subscription 132,932 --
Printing and stationery 225,072 196,793
Travelling and conveyance 83,509 89,519
Vehicle lease rentals 291,240 218,430
Vehicles running and maintenance 196,682 59,407
Telephone & postage 75,566 52,259
Advertisement 27,080 77,620
Repairs and maintenance 15,450 12,340
Legal and professional 125,424 59,031
Depreciation 201,791 224,674
Auditors' remuneration (23.1) 65,000 56,700
Books & periodical 12,675 8,227
Insurance expense 121,324 67,311
Miscellaneous expenses 36,479 33,646
--------- ---------
3,811,471 2,482,653
========= =========
23.1 Auditors Remuneration
Special audit fee 35,000 --
Audit fee 30,000 27,500
Consultancy -- 29,200
--------- ---------
65,000 56,700
========= =========
24. TAXATION
The provision represents turnover tax.
No provision for deferred taxation is required as the timing differences on account of excess
depreciation allowances is unlikely to reverse in the foreseeable future, due to the nature of the
business of the company. The available depreciation allowances for the income year 1995-96 were
Rs. 28 million (1995: Rs. 36.1 million).
The company's income tax assessment upto the assessment year 1995-1996 have been completed,
provision regarding prior year taxation of Rs. 594,558 has not been provided for since the company
has filed appeals at appropriate forums.
25. REMUNERATION OF CHIEF EXECUTIVE, DIRECTORS AND EXECUTIVES
     CHIEF EXECUTIVE        EXECUTIVES
1996 1995 1996 1995
Rupees Rupees Rupees Rupees
Managerial Remuneration 414,000 360,000 514,650 300,375
Leave encashment -- -- 23,270 5,096
Leave fare assistance 34,500 30,000 19,400 15,500
House rent 186,300 162,000 231,595 135,173
Utilities 50,066 37,392 51,465 30,037
Medical expenses reimbursed 7,857 6,111 36,487 24,958
Club subscription 7,340 9,196 -- --
Residential telephone bills reimbursed 27,981 32,231 -- --
--------- --------- --------- ---------
728,044 636,930 876,867 511,139
========= ========= ========= =========
Number of persons 1 1 3 1
25.1 The aggregate amount charged in the accounts for the year for fees to one
director for two meetings was Rs. 1000/- ( 1995 Rs. 500/-).
25.2 In addition the Chief Executive has also been provided free use of one
company' s vehicle.
26. TRANSACTIONS WITH ASSOCIATED COMPANIES
Conveyance charges of one vehicle Rs. 291,240/- (1995: 218,430/-) paid to the associated
company.
27. GENERAL
-- Figures have been rounded off nearest to rupee.
-- Previous year's figures have been re-arranged wherever necessary for the purpose of
  comparison.
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