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NatLease 
NATIONAL ASSET LEASING CORPORATION LIMITED
Annual Report 1996
CONTENTS
Company Information 1
Notice of Meeting 2
Directors' Report 3
Auditors' Report to the Members 5
Balance Sheet 6
Profit and Loss Account 8
Statement of Changes in Financial Position 9
Notes to the Accounts 11
Pattern of Share Holding 23
COMPANY INFORMATION
Chairman
Dr. Khalid Iqbal
Chief Executive/Managing Director
Mohammad Ashiq Rehmani
Directors
Azhar Tariq Khan
Syed Naveed Zaidi
Rana M. Abu Obaida
Shamira I. Junejo
Sohail Ali
Company Secretary
Ayyaz Ahmad
Bankers of the Company
Crescent Investment Bank Limited
Habib Bank Limited
National Development Finance Corporation
Muslim Commercial Bank Limited
Auditors
Ford, Rhodes, Robson, Morrow
Chartered Accountants,
Finlay House, I. I. Chundrigar Road, Karachi.
Share Registrars
Noble Computer Services (Private) Limited
2nd Floor, AI-Manzoor Building
Dr. Ziauddin Ahmed Road, Karachi.
Registered Office
l-B, First Floor, All Plaza,
Khayaban-e-Quaid-e-Azam,
Blue Area, Islamabad
Phones: 270626 & 822513
Fax: (92-51) 272506
Head Office
9th Floor, Lakson Square, Building No 1,
265 R. A. Lines, Karachi.
Phones: 5687412, 5687419, 5689580 & 5682027
Fax: (92-21) 5684259
Telex: 20538 ASSET PK.
NOTICE OF MEETING
Notice is hereby given that the Sixth Annual General Meeting of National Asset Leasing
Corporation Limited will be held at l-B, First Floor, All Plaza, Khayabon e Quaid-e-Azam, Blue
Area, Islamabad on Tuesday, December 31, 1996 at 11.00 a.m. to transact the following business.
Ordinary Business:
1. To confirm the Minutes of the Fifth Annual General Meeting held on July 20, 1995.
2. To receive, consider and adopt the Audited Accounts of the Company together with
Directors' and Auditors' report thereon for the eighteen months ended June 30, 1996.
3. To appoint Auditors and to fix their remuneration for the year 1996 97. M/s. Ford, Rhodes,
  Robson, Morrow, Chartered Accountants, the present Auditors, retire and being eligible,
  offer themselves for reappointment.
4. To transact any other business with the permission of the Chair.
By Order Of the Board
AYYAZ AHMAD
Company Secretary
Islamabad: December 3, 1996
NOTES:
1. The Share Transfer Books of the Company will remain closed from December 24, 1996
to December 31, 1996 (both days inclusive).
2. A member entitled to attend and vote at this meeting may appoint another member
  as his/her proxy to attend and vote on his/her behalf. Proxies in order to be effective
  must be received at the Company's Registered Office at Islamabad at least 48 hours
  before the time of holding the meeting.
3. The members are requested to please notify to the Company any change in their addresses.
DIRECTORS' REPORT
On behalf of the Board of Directors of National Asset Leasing Corporation Limited, I am pleased
to present the Fifth Annual Report together with the audited accounts for the period ended
June 30, 1996.
Financial Results
Faced with trying circumstances of economic environment and scarcity of funds we are grateful
as ever for Allah's boundless mercy to enable NatLease to meet the challenge and maintain
reasonable financial results for the period ended June 30, 1996, as appended below:
Rupees
Gross Income 57,315,287
Expenditure 48,679,217
-----------
Profit before provisions 8,636,070
Provisions 910,021
-----------
Net profit after provisions 7,726,049
Unappropriated profit brought forward 1,555,301
-----------
Profit available for appropriations 9,281,350
===========
Appropriations:
Transfer to reserve fund 1,545,210
Unappropriated profit carried forward 7,736,140
-----------
9,281,350
===========
Operations:
During the eighteen months ended June 30, 1996 the major sources of revenue include;
Income from leasing operations 89.80%
Income from bank deposits 2.98%
Income from investment 3.15%
Capital gain 3.90%
Others 0.17%
The operations of the period under review reflect our untiring efforts to achieve a desirable
performance despite continued recession in the economy hampering broad business base
and constrains of resource mobilization.
Despite all above, NatLease had posted Rs. 7.726 million profit for the .period ended 30th June
1996.
We do acknowledge that due to our assessment of the present times, we have been very
conservative on comparative basis. We have laid more stress on recovery efforts and paying
off liabilities rather than enchanting our operations.
Our management made extra efforts to minimise expensive borrowing and work with selectivity
and caution and minimise sensitive exposure to maintain profitability,
Future Prospects
NatLease continues to concentrate on its core business of lease finance and enhance its facility
to operating leases and consumers durables as part of future plans, we have enchanced and
geared up professionals ability to meet the requirement of newly evolved marketing strategy
for better profitability in future.
We have to restrict sensitive exposure, evolve innovative modes and professional techniques
and gear-up funding requirement at reasonable cost to meet this challenge and give the
expected results.
Management is confident that it will come up with the expectations of its share holders and
achieve the self-assigned challenge in shape of better results.
Acknowledgment
We wish to place on record our gratitude to our valuable clients, financial institutions, Corporate
Law Authority, State Bank of Pakistan and our share holders for their continued valued support,
guidance and cooperation.
The contribution of all staff members is note-worthy and we take pride in their devotion, hard-
work and dedication. We earnestly feel that nothing was possible without Allah's blessings and
infinite mercy.
We pray for Allah's blessing, mercy and guidance for achieving better results in years to come
(Ameen).
M. A. Rehmani
Managing Director
Islamabad: December 3,1996
AUDITORS' REPORT TO THE MEMBERS
We have audited the annexed balance sheet of NATIONAL ASSET LEASING CORPORATION
LIMITED as at June 30, 1996 and the related profit and loss account and statement of changes
in financial position (cash flow statement), together with the statement of accounting policies
and notes forming part thereof, for the eighteen months 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 a,~ 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 eighteen months was for the purpose of the
company's business; and
(iii) the business conducted, investments made and the expenditure incurred during
the eighteen months 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 (cash flow statement), together with the statement of accounting policies
  and notes forming part thereof, give the information required by the Companies Ordi-
  nance, 1984, in the manner so required and respectively give a true and fair view of
  the state of the company's affairs as at June 30, 1996 and of the profit and the changes
  in financial position for the eighteen months 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,
Sd/-
FORD, RHODES, ROBSON, MORROW
Chartered Accountants
Karachi: December 3, 1996
BALANCE SHEET
AS AT JUNE 30, 1996
June 30, December 31,
1996 1994
Note Rupees Rupees
Share Capital And Reserves
Authorised
10,000,000 ordinary shares of
Rs. 10 each 100,000,000 100,000,000
=========== ===========
Issued, subscribed and paid-up
9,536,800 (1994: 9,536,800) ordinary
shares of Rs. 10 each fully paid in cash 95,368,000 95,368,000
Reserves
Reserve fund (capital reserve) 3 8,848,215 7,303,005
Unappropriated profit 7,736,140 1,555,301
----------- -----------
16,584,355 8,858,306
----------- -----------
111,952,355 104,226,306
REDEEMABLE CAPITAL-SECURED 4 27,987,978 7,026,664
LONG TERM FINANCE-SECURED 5 20,000,000 1,866,374
OBLIGATION UNDER FINANCE LEASE 6 612,828 413,318
LEASE KEY MONEY 7 19,457,073 22,888,931
CERTIFICATES OF INVESTMENT 8 7,800,000 9,300,000
CURRENT LIABILITIES
Current portion of redeemable capital 5,976,029 5,596,580
Current portion of long term finance 17,994,685 4,907,229
Current portion of obligation under
finance leases 422,542 342,498
Current portion of lease key money 5,624,744 3,939,146
Certificates of investment 8 33,500,000 20,000,000
Short term finance 9 19,506,562 43,732,177
Book overdraft with banks/DFI 29,082,779 16,038,889
Accrued and other liabilities 10 15,387,727 5,727,172
Proposed dividend -- 14,305,200
----------- -----------
127,495,068 114,588,891
COMMITMENTS AND CONTINGENCIES 11
----------- -----------
315,305,302 260,310,484
=========== ===========
June 30, December 31,
1996 1994
Note Rupees Rupees
TANGIBLE FIXED ASSETS 12 6,317,481 4,701,690
NET INVESTMENT IN LEASE FINANCE 13 154,698,238 103, 511,421
LONG TERM INVESTMENTS 14 43,581,048 27,667,281
LONG TERM DEPOSITS, PREPAYMENTS
AND DEFERRED COSTS 15 1,750,596 628,416
CURRENT ASSETS
Current portion of net investment
in lease finance 13 89,079,020 73,927,020
Advances, deposits, prepayments
and other receivables 16 18,290,647 37,635,028
Cash and bank balances 17 1,588,272 12,239,628
----------- -----------
108,957,939 123,801,676
----------- -----------
315,305,302 260,310,484
=========== ===========
The annexed notes form an integral part of these accounts,
The auditors' report is annexed hereto,
PROFIT AND LOSS ACCOUNT
FOR THE EIGHTEEN MONTHS ENDED JUNE 30, 1996
Eighteen Year
months ended ended
June 30, Dec. 31,
1996 1994
Note Rupees Rupees
REVENUE
Income from leasing operations 18 51,471,095 23,274,677
Profit on sale of investments 2,235,117 10,348,163
Other income from investments/
Government securities 1,804,238 729,288
Income from bank deposits 1,709,118 2,005,778
Profit/(Loss) on disposal of fixed assets 95,719 25,324
Other income -- 65,486
----------- -----------
57,315,287 36,448,716
EXPENDITURE
Return and financial charges 19 33,030,822 13,748,464
Administrative and operating expenses 20 15,185,775 7,350,775
Amortisation of deferred costs 462,620 408,945
----------- -----------
48,679,217 21,508,184
----------- -----------
PROFIT FOR THE YEAR BEFORE PROVISIONS 8,636,070 14,940,532
PROVISIONS
For doubtful debts 410,021 353,285
For diminution in value of investments -- (348,185)
----------- -----------
410,021 5,100
----------- -----------
PROFIT FOR THE YEAR BEFORE TAXATION 8,226,049 14,935,432
PROVISION FOR TAXATION
Current 500,000 715,496
Prior -- 551,951
----------- -----------
500,000 1,267,447
----------- -----------
NET PROFIT FOR THE YEAR AFTER TAXATION 7,726,049 13,667,985
UNAPPROPRIATED PROFIT BROUGHT FORWARD 1,555,301 4,926,113
----------- -----------
9,281,350 18,594,098
APPROPRIATIONS
Transfer to reserve fund 1,545,210 2,733,597
Proposed dividend 14,305,200
----------- -----------
1,545,210 17,038,797
----------- -----------
UNAPPROPRIATED PROFIT CARRIED FORWARD 7,736,140 1,555,301
=========== ===========
The annexed notes form an integral part of these accounts.
STATEMENT OF CHANGES IN FINANCIAL POSITION
(CASH FLOW STATEMENT)
FOR THE EIGHTEEN MONTHS ENDED JUNE 30, 1996
Year Eighteen
ended months ended
Dec, 31, June 30,
1994 1996
Rupees Rupees
CASH FLOWS FROM OPERATING ACTIVITIES
Net Profit for the period/year before tax 8,226,049 14,935,432
Adjustments for:
Depreciation on fixed assets 1,651,459 863,402
Amortisation of deferred costs 462,620 408,945
Income from long term investments (1,402,917) (685,098)
(Gain)/Loss on sale of fixed assets (95,719) (25,324}
Provision for diminution in value of investments -- (348,185)
Provision for doubtful debts 410,021 353,285
Return and financial charges on borrowings 24,604,141 10,130,320
----------- -----------
25,629,605 10,697,345
----------- -----------
33,855,654 25,632,777
(Increase)/decrease in advances, prepayments
and other receivables 17,344,380 (30,603,363)
Increase/(decrease) in accrued and other
liabilities 9,660,555 (9, 291,255)
(Increase)/decrease in long term deposits (84,800) 100,376
Increase/(decrease) in Certificates of
Investment 12,000,000 10,000,000
Increase/(decrease) in lease key money (1,746,260) 10,946,718
Decrease in short term investments -- 2,308,380
(Increase)/decrease in Government securities -- (1,000,000)
----------- -----------
37, 173,875 (17,539,144)
----------- -----------
Net cash generated/(used)in operating activities 71,029,529 8,093,633
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of fixed assets (4,438,530) (2,205,822)
Sale of fixed assets 1,267,000 422,700
Investment in lease finance (net of recoveries) (66,748,838) (36,402,075)
(Increase)/decrease in long term investments (15,913,767) 29,966,562
Income from investments 1,402,917 685,098
----------- -----------
Net cash generated/(used)in investing activities (84,431,218) (7,533,537)
----------- -----------
Total carried forward (13,401,689) 560,096
Eighteen Year
months ended ended
June 30, Dec 31,
1996 1994
Rupees Rupees
Total brought forward (13,401,689) 560,096
CASH FLOWS FROM FINANCING ACTIVITIES
Increase/(decrease) in redeemable capital 21,340, 763 (4,991,433)
Increase/(decrease) in long term finance 31,221,082 (4,017,782)
Increase/(decrease) in obligation under
finance leases 279,554 (709,070)
Dividend paid (14,305,200) --
Increase/(decrease) in short term finance (24,225,615) 2,688,641
Return and financial charges on borrowings (24,604,141) (10,130,320)
----------- -----------
Net cash generated/(used) in financing activities (10,293,557) (17,159,964)
----------- -----------
Net (decrease)/increase in cash and cash
equivalents (23,695,246) (16,599,868)
Cash and cash equivalents
at January 1, 1995/1994 (3,799,261) 12,800,607
Cash and cash equivalents
----------- -----------
at June 30 1996/December 31, 1994 (27,494,507) (3,799,261)
=========== ===========
NOTES TO THE ACCOUNTS FOR THE EIGHTEEN MONTHS
ENDED JUNE 30, 1996
1. LEGAL STATUS AND NATURE OF BUSINESS
The Company is incorporated in Pakistan as a public limited company and is listed on
the Karachi, Lahore and Islamabad Stock Exchanges, It essentially carries on the business
of leasing. It is classified as a Non-Banking Financial Institution by the State Bank of Pakistan
under the Banking Companies Ordinance, 1962,
2. SIGNIFICANT ACCOUNTING POLICIES
2.1 Accounting convention
  The Financial Statements have been prepared under the historical cost convention.
2.2 Tangible fixed assets and depreciation thereon
These are stated at cost less accumulated depreciation. Depreciation is charged
to income applying the straight line method whereby the cost of the asset less
estimated residual value is written off over its estimated useful life. Depreciation on
fixed assets is charged proportionately from the month of acquisition (full months
depreciation being charged in the month of acquisition) upto the month prior to
deletion.
Assets obtained under finance leases are included as tangible fixed assets and
depreciation thereon is charged at the same rates as on the Company's own assets
except when the lease term is shorter than the life of the asset.
Profit or loss on disposal of fixed assets is included in income currently.
2.3 Employees' retirement benefits
The Company operates a contributory provident fund for all its permanent employees
and contributions are made by the Company and the employees in accordance
with the fund rules.
2.4 Deferred costs
Since the benefit of these costs covers an extended period, these are being amortised
over five financial years from the year of incurrence.
2.5 Investments
Long Term Investments: These are stated at moving average cost of the respective
entities shares/certificates.
Short Term Investments: These are stated at moving average cost of the respective
entities shares/certificates less provision for diminution in market value. The adjustment
in respect of diminution in market value is determined on a portfolio basis and is
charged or credited to income currently.
Profit or loss on sale of investments is accounted for currently.
2.6 Government securities repurchase/resale transactions.
The Company enters into transactions of repurchase or resale in registered Govern--
ment securities at contracted rates for specified periods of time. These are recorded
as follows:
(a) in the case of sale under repurchase obligations the securities are deleted from
  the books at cost (whist the coupon income continues to be accrued) and
  the charges arising from the differential in sale and repurchase values are
  accrued on a pro-rata basis and recorded under income from Government
  securities. Upon repurchase the securities are reinstated at their respective
  original cost,
(b) in the case of purchases under resale obligations the securities are booked
at the contracted purchase price and the differential of the contracted purchase
and resale prices is amortised over the period of the contract and recorded
under income from Government securities.
2.7 Revenue recognition
The Company follows the "financing method" in recognising income on lease con-
tracts. Under this method the unearned income - i.e. the excess of aggregate lease
rentals and the estimated residual value over the cost of the leased asset is deferred
and then amortised over the term of the lease, so as to produce a constant rate
of return on net investment in the lease.
Dividend income from quoted entitles is recognised at the time of closure of share
transfer books of the company declaring the dividend,
Income on Government securities is recognised by pro-rata accruals of the
differential in cost and maturity values and/or the coupon rate applicable.
Project examination, consultancy, commitment and other charges are taken to
income when realised.
2.8 Taxation
Current -
The charge for current taxation, is based on taxable income, which is corrupted
as if all leases are accounted for as operating leases.
Deferred -
The Company accounts for deferred taxation expense using the liability method on
all significant timing differences which are expected to reverse within the next three
years.
3. RESERVE FUND (CAPITAL RESERVE) June 30, Dec. 31,
1996 1994
Rupees Rupees
At January 1, 1995/1994 7,303,005 4,569.41
Transfer from profit and loss account 1,545,210 2,733,597
----------- -----------
At June 30, 1996/Dec. 31, 1994 8,848,215 7,303,005
=========== ===========
The reserve fund is created by transferring 20% of the profit for the year. This reserve is
required to be maintained under the provisions of the regulations issued by the State Bank
of Pakistan for Non-Banking Financial Institutions.
June 30, Dec. 31,
1996 1994
Note Rupees Rupees
4. REDEEMABLE CAPITAL-SECURED
Musharika fund 4.1 726,835 3,726,840
Finance against TFC's 4.2 33,237,172 8,896,404
----------- -----------
33,964,007 12,623,244
Less: Current portion 5,976,029 5,596,580
----------- -----------
27,987,978 7,026,664
=========== ===========
4.1 This represents the balance of musharika fund of Rs. 10 million obtained from a
  commercial bank. The profit and loss is to be shared between the bank and the
  Company in an agreed ratio after adjusting operating expenses. The principal and
  share of profit is payable in quarterly instalments commencing from the date the
  funds are drawn by the Company. The share of profit of the bank for the period
  ended June 30, 1996 is Rs. 1,296,829 (1994: Rs. 863,867). The fund is secured by way
  of hypothecation of book debts, present and future assets of the Company.
4.2 This includes
Rs, 3,237,172 being balance of two (1994: three)lines of credit of Rs. 5.0 million each
obtained against term finance agreements. The facilities are repayable alongwith
mark-up in 16 and 20 equal quarterly instalments of Rs. 365,064 and Rs. 450, 782 (1994:
Rs. 445,077, Rs. 365,064, Rs. 450,782) respectively. The facilities carry mark-up at the
rate of 18.71% and 20% (1994: 18%, 18.71% and 20%) per annum respectively. The
instalments of existing facilities commenced from December 30, 1992 and June 12,
1993 respectively. The facilities are secured by way of hypothecation of leased assets
of the Company and assignment of lease rentals.
Rs. 30,000,000 credit line obtained from a DFI. The finance is repayable in eight equal
half yearly installments after a grace period of one year. The mark-up of grace period
is payable on half yearly basis. The facility carries a mark-up at the rate of 20.5%
per annum. The installments commenced from April 12, 1996. The facility is Secured
by way of assignment of lease rentals and personal guarantees of the four main
Sponsoring Directors of the Company.
5. LONG TERM FINANCE - SECURED
From -
Investment bank -- 6,773,603
Commercial bank 5.10 17,994,685 --
Modaraba 5.20 20,000,000 --
----------- -----------
37,994,685 6,773,603
Less: Current portion 17,994,685 4,907,229
----------- -----------
20,000,000 1,866,374
=========== ===========
5.1 This represents balance of term finance facility of Rs, 20 million obtained from a
  commercial bank, The facility carries a mark-up rate of Rs: 0.48 per Rs. 1,000 per
  day, The finance is repayable in three equal annual installments alongwith mark-up.
  The installments commenced from June 14, 1996. The facility is secured by registered.
  deed of assignment of lease rentals of specific leases,
5.2 This represents morahaba finance facility. of Rs, 20 million obtained from a modaraba,
The facility carries a mark-up rate of Rs. 0.50 per Rs. 1,000 per day. The finance is
repayable in three equal annual installments alongwith mark-up. The installments
commenced from August 17, 1996. The facility is secured by deed of assignment
of the lease rentals of specific leases and personal guarantees of Directors of the
Company.
6. OBLIGATION UNDER FINANCE LEASES
This represents the outstanding balance against obligation under finance leases. The rate
of return used as discounting factor is 18,82% & 19,80% per annum, The lease rentals are
payable in equal monthly installments,
June 30, Dec. 31,
1996 1994
Rupees Rupees
Obligation under finance leases 1,035,370 755,816
Current liability 422,542 342,498
----------- -----------
612,828 413,318
=========== ===========
The future minimum lease payments to which the
Company is committed under the lease
agreements are due as follows:
During the period 1995-96 -- 684,270
During the year 1996-97 576,318 226,218
During the year 1997098 350,100 --
During the year 1998-99 405,725 --
----------- -----------
1,332,143 910,488
=========== ===========
7. LEASE KEY MONEY
This represents the security deposits received against lease contracts.
The amounts are refundable at the expiry of the respective lease periods,
8. CERTIFICATES OF INVESTMENT
The Company has launched a Certificates of Investment scheme for mobilisation of
resources under the permission of Corporate Law Authority.
Under the permission, the Certificates of Investment are to be issued for maturity periods
of three months to five years. The return on certificates is payable on uniform basis,
June 30, Dec. 31,
1996 1994
Note Rupees Rupees
9. SHORT TERM FINANCE
Short term finance-secured
from investment bank 91 4,500,000 30,000,000
from commercial bank 9.2 15,006,562 13,732,177
----------- -----------
19,506,562 43,732,177
=========== ===========
9.1 This represents short term finance under pro-note discounting facility from an invest-
  ment bank at a mark-up rate of 19,0% (1994: 18.0%) per annum, The facility is
  repayable alongwith mark-up in 12 equal monthly instalments, The facility is secured
  by way of pledge of shares,
9.2 This represents running finance availed out of total sanctioned facility of Rs, 15 million
from a commercial bank, The facility is secured by way of registered hypothecation
of leased assets, The rate of mark-up charged by the bank is Rs,0,52 per Rs. 1,000
per day (1994:Rs,0,52 per Rs, 1,000 per day),
10. ACCRUED AND OTHER LIABILITIES
Accrued return/mark-up on secured loans
and finance 12,096,018 2,752,816
Accrued return on Certificates of Investment 1,280,149 1,091,046
Accrued operating expenses 316,558 369,806
Unclaimed dividend 28,708 --
Other liabilities 1,666,294 1,513,504
----------- -----------
15,387,727 5,727,172
=========== ===========
11. COMMITMENTS AND CONTINGENCIES
Guarantees 21,773,300 21,773,300
12. TANGIBLE FIXED ASSETS
Accumulated
Cost at the Cost depreciation
beginning Additions/ at the at the end
of the (disposals)/ end of the of the
period/year adjustments period/year period/year
Owned- Rupees Rupees Rupees Rupees
Office premises
and car parking 369,000 - 369,000 95,325
Office equipment 939,514 312,300 1,251,814 696,998
Furniture and
fixtures 603,755 281,500 885,255 260,470
Office renovation 867,425 814,234 1,681,659 888,901
Vehicles 3,413,922 2,182,496 4,324,623 1,749,194
(1,271,795)
----------- ----------- ----------- -----------
Sub-total 6,193,616 3,590,530 8,512,351 3,690,888
(1,271,795)
----------- ----------- ----------- -----------
Under Finance Lease-
Vehicles  1,121,025 848,000 1,969,025 473,007
----------- ----------- ----------- -----------
Sub-total 1,121,025 848,000 1,969,025 473,007
----------- ----------- ----------- -----------
Total June 30,1996 7,314,641 4,438,530 10,481,376 4,163,895
(1,271,795)
=========== =========== =========== ===========
Total Dec, 31,1994 5,849,519 4,298,244 7,314,641 2,612,951
(2,833,122)
=========== =========== =========== ===========
Book value
at the Depreciation Depreciation
end of the for the rates
period/year period/year %
Owned- Rupees Rupees
Office premises
and car parking 273,675 27,675 5
Office equipment 554,816 243,846 20
Furniture and
fixtures 624,785 107,955 10
Office renovation 792,758 42,936 33.33
Vehicles 2,575,429 966,206 20
----------- -----------
Sub-total 4,821,463 1,388,618
----------- -----------
Under Finance Lease-
Vehicles  1,496,018 262,841 20
----------- -----------
Sub-total 1,496,018 262,841
----------- -----------
Total June 30,1996 6,317,481 1,651,459
=========== ===========
Total Dec, 31,1994 4,701,960 863,402
=========== ===========
12.1 Particulars of disposals of fixed assets
Original Accumulated Written Sale Mode of Particulars of
cost depreciation down value proceeds disposal purchaser
Rupees Rupees Rupees Rupees
Vehicle 779,487 38,974 740,513 780,000 Insurance E.F.U. Insurance
Claim Company Limited,
Karachi.
Vehicle 492,308 61,540 430,768 487,000 Insurance E.F.U. Insurance
Claim Company Limited,
Karachi.
---------- ---------- ---------- ----------
Total June 30,1996 1,271,795 100,514 1,171,281 1,267,000
========== ========== ========== ==========
Total Dec, 31,1994 740,700 343,324 397,376 422,700
========== ========== ========== ==========
June 30, Dec. 31,
1996 1994
Note Rupees Rupees
13. NET INVESTMENT IN LEASE FINANCE
Minimum lease payments receivable 317,891,007 202,538,081
Add: Residual value 29,541,239 21,909,890
---------- ----------
347,432,246 224,447,971
Less: Unearned finance income 102,795,682 46,560,245
---------- ----------
Net investment in lease finance 244,636,564 177,887,726
Less: Current portion of net investment
in lease finance 13.1 89,938,326 74,376,305
---------- ----------
154,698,238 103,511.42
========== ==========
13.1 Current portion of net investment
in lease finance 89,938,326 74,376,305
Less: Provision for doubtful debts 859,306 449,285
---------- ----------
89,079,020 73,927,020
========== ==========
14. LONG TERM INVESTMENTS
15.0% 10 years registered Wapda Bonds
(maturity 2002) 4,500,000 4,500,000
15.0% 10 years Federal Investment Bonds
(maturity 2003) 1,000,000 1,000,000
The above investments are made to meet 5,500,000 5,500,000
the liquidity requirement as per NBFis
regulations
Investment in-
Associated unlisted undertaking 14.1 2,500,000 10,000,000
Listed companies/modarabas
(Aggregate market
value Rs 13,964,676/-
(1994: Rs. 5,499,892/0 14.2 25,581,048 8,667,281
Other-unlisted companies 14.3 10,000,000 3,500,000
---------- ----------
38,081,048 22,167,281
---------- ----------
43, 581,048 27,667, 281
========== ==========
June 30, Dec. 31,
1996 1994
Note Rupees Rupees
14.1 Investment in associated
unlisted undertakings
National Industrial Management
Limited 250,000 ordinary
shares 14.1.1 2,500,000 2,500,000
Nayab Spinning & Weaving Mills
Limited Nil (1994: 750,000) ordinary
shares -- 7,500,000
---------- ----------
2,500,000 10,000,000
========== ==========
14.1.1 Percentage of equity held in the investee company is 25% of its capital. As
  per last available audited accounts for the year ended June 30, 1996 of the
  investee company the break-up value per share is Rs. 10.87.
14.2 Investment in listed companies/modarabas
Associated undertakings
Industrial Capital Modaraba
522,315 (1994: 522,315) modaraba.
certificates 5,742,575 5,742,575
Asset Investment Bank Limited
990,000 (1994: Nil) ordinary
shares 9,949,500 -
---------- ----------
15,692,075 5,742,575
Others
First Hajveri Modaraba
190,114 (1994: 190,144) Modaraba
Certificates 1,424,615 1,424,615
Sui Northern Gas Pipeline Limited
20,024 (1994: 17,250) ordinary
shares 697,503 581,080
First International Investment
Bank Limited 100 (1994: 23,000)
Ordinary 3,328 919,011
---------- ----------
Total carried forward 2,125,446 2,924,706
June 30, Dec. 31,
1996 1994
Rupees Rupees
Total brought forward 2,125,446 2,924,706
Pakistan Industrial Leasing Corp., Ltd.,
5,000 (1994: Nil) ordinary
shares 186,000 --
Nayyab Spinning & Weaving Mills Ltd,
750,000 (1994 Nil) ordinary
shares of Rs. 10 each 7,500,000 --
Pakistan Telecommunication Corp. Ltd. (P.T.C.)
2,000 (1994: Nil) vouchers 77,527 --
---------- ----------
9,888,973 2,924,706
---------- ----------
25,581,048 8,667,281
=========== ===========
14.3 Investment in other unlisted companies
Sara Rice Mills Limited
350,000 (1994: 350,.000) ordinary
shares 14.3.1 3,500,000 3,500,000
Caravan East Fabrics Limited
650,000 (1994: Nil) ordinary
shares 14.3.2 6,500,000 --
---------- ----------
10,000.00 3,500,000
=========== ===========
14.3.1 Percentage of equity held in the investee company/ is 14.58% of its capital.
  The name of the Chief Executive of the investee company is Mr. Javed Islam
  Agha. As per last available audited accounts of the company for the year
  ended August 31,1994, the break-up value per share is Rs. 10.73.
14.3.2 The name of the Chief Executive of the investee company is Mr. Ayaz Imam,
14.4 Unless otherwise stated all shares / certificates / vouchers are of Rs. 10 each.
15. LONG TERM DEPOSITS, PREPAYMENTS
AND DEFERRED COSTS
Deposits on lease contracts 196,903 112,103
Prepaid office rent
(to an associated company) 2,100,000 --
Deferred costs 15.1 53,693 516,313
---------- ----------
2,350,596 628,416
Less: Current portion 600,000 --
---------- ----------
1,750,596 628,416
=========== ===========
June 30, Dec, 31,
1996 1994
Note Rupees Rupees
15.1 Deferred costs
Preliminary expenses 190,380 190,380
Share floatation expenses 1,292,505 1,292,505
Computer software cost 15,000 15,000
Development cost * 10,000 10,000
Right shares issue expenses 536,840 536,840
---------- ----------
2,044,725 2,044,725
Amortised to-date 1,991,032 1,528,412
---------- ----------
53,693 516,313
=========== ===========
* Development cost represents expenses incurred for preparation of legal documents
to be used by the Company in current and future years.
16. ADVANCES, DEPOSITS, PREPAYMENTS
AND OTHER RECEIVABLES
Current portion of prepaid office rent 600,000 --
Share subscription money -- 5,500,000
Prepayments 441,189 396,258
Accrued income 142,972 2,523,878
Receivable against sale of investments 14,489,400 29,331,225
Advance income tax paid net of
provision for taxation 731,102 (634,038)
Other advances and receivables 16.1 1,885,984 517,705
---------- ----------
18,290,647 37,635,028
=========== ===========
16.1 Includes expenses incurred
  Rs. 916.176/- (1994: Rs. Nil)
  receivable from a prospective lessee.
17. CASH AND BANK BALANCES
Cash' in hand 9,124 20,940
Balance with State Bank of Pakistan 200,000 --
Balance with banks/DFIs
-on current accounts 44,149 135,249
-on deposit accounts 1,334,999 12,083,439
---------- ----------
1,588,272 12,239,628
=========== ===========
June 30, Dec, 31,
1996 1994
Note Rupees Rupees
18. INCOME FROM LEASING OPERATIONS
Return on lease contracts 46,682,197 21,858,342
Commitment and other fees 1,754,659 1,117,009
Markup on pre4easing advances 3,034,239 299,326
---------- ----------
51,471,095 23,274,677
=========== ===========
19. RETURN AND FINANCIAL CHARGES
Mark-up on long term finance 13,769,803 3,837,486
Mark-up on short term finance 9,323,427 5,023,563
Musharika profit on long term fund 1,296,829 863,764
Charges on obligation under finance leases 144,999 194,251
Return on Certificates of Investment 8,426,681 3,618,144
Excise duty and other financial charges 69,083 211,256
---------- ----------
33,030,822 13,748,464
=========== ===========
20. ADMINISTRATIVE AND OPERATING EXPENSES
Salaries, allowances and benefits 7,442,642 3,058,271
Rent 900,000 529,200
Telephone, electricity and utilities 1,549,126 852,310
Printing and stationery 497,003 296,451
Insurance 521,985 228,029
Travelling and conveyance 711,874 668,073
Vehicle running expenses 633,237 265,584
Office maintenance 191,912 115,863
Legal and professional charges 20.1 618,586 297,204
Depreciation on fixed assets 1,651,459 863,402
Donation/Zakat 20.2 17,228 26,280
Other operating expenses 450,723 150,108
---------- ----------
15,185,775 7,350,775
=========== ===========
20.1 Legal and professional charges includes
auditors' remuneration and expenses as follows :
Audit fee 50,000 40,000
Special audit fee (SBP NBFI) 50,000 40,000
Tax service 159,335 7,500
Out-of-pocket expenses 5,000 7,500
---------- ----------
264,335 95,000
=========== ===========
20.2 None of the Directors or their spouses had any interest in the donees to whom the
  donation was made.
21. TAXATION
The deferred tax liability on major timing differences at June 30, 1996 annuals to
million (1994: Rs. 6 million). However, since these timing differences are not expecled to
reverse within three years, no provision for deferred taxation is required.
22. REMUNERATION OF CHIEF EXECUTIVE, DIRECTORS AND EXECUTIVES
The remuneration of Chief Executive and whole time working Directors and Executives
charged in these accounts is as follows:
1996 1994
January 1995 to June 1996 January 1994 to December 1994
Chief Chief
Executive Directors Executives Executive Directors Executives
Rupees Rupees Rupees Rupees Rupees Rupees
Managerial remuneration  870,968 1,741,935 598,452 387,144 774,288 289,536
Housing and utilities 391,935 783,871 329,149 212,928 425,856 159,264
Reimbursement of medical
expenses 32,340 78,485 73,090 18,068 29,063 22,171
---------- ---------- ---------- ---------- ---------- ----------
1,295,243 2,604,291 1,000,691 618,140 1,229,207 470,971
========== ========== ========== ========== ========== ==========
No. of persons 1 2 2 1 2 3
========== ========== ========== ========== ========== ==========
June 30 Dec. 31
1996 1994
Rupees Rupees
23. TRANSACTIONS WITH ASSOCIATED UNDERTAKINGS
OTHER THAN THOSE STATED HEREIN ABOVE
Rent for office premises charged 900,000 529,200
Placement of deposit 600,000 2,000,000
Profit received on deposit 7,693 42,685
---------- ----------
1,507,693 2, 571,885
========== ==========
24. GENERAL
All figures have been rounded off to the nearest rupee.
Previous years figures have been re-arranged wherever necessary for the purpose of
comparison.
PATTERN OF SHARE HOLDINGS AS AT JUNE 30, 1996
NUMBER OF SHARE HOLDINGS TOTAL
SHADE HOLDERS SHARES HELD
48 1 -- 100 4,800
194 101 -- 500 77,900
185 501 -- 1000 174,900
156 1001 -- 5000 444,400
38 5001 -- 10000 296,200
10 10001 -- 15000 124,800
9 15001 -- 20000 178,500
2 25001 -- 30000 58,400
4 30001 -- 35000 126,500
1 35001 -- 40000 39,900
2 40001 -- 45000 84,700
2 45001 -- 50000 96,000
1 50001 -- 55000 50,400
2 55001 -- 60000 118,700
1 65001 -- 70000 70,000
1 85001 -- 90000 89,600
1 95001 -- 100000 100,000
1 105001 -- 110000 108,000
1 135001 -- 140000 139,800
1 155001 -- 160000 160,000
1 190001 -- 195000 191,600
1 195001 -- 200000 200,000
2 200001 -- 205000 405,500
1 215001 -- 220000 220,000
1 230001 -- 235000 234,400
2 255001 -- 260000 520,000
3 345001 -- 350000 1,045,300
1 360001 -- 365000 361,500
1 395001 -- 400000 400,000
1 795001 -- 800000 800,000
1 805001 -- 810000 810,000
1 850001 -- 855000 855,000
1 945001 -- 950000 950,000
--------- -----------
677 9,536,800
========= ===========
CATEGORIES OF MEMBER OF SHARES PERCENTAGE
SHARE HOLDERS SHARE HOLDERS HELD
INDIVIDUALS 656 4,872,800 51.10
INVESTMENT COMPNANIES 3 317,800 3.33
JOINT STOCK COMPANIES 8 1,660,100 17.41
FINANCIAL INSTITUTIONS 3 1,811,400 18.99
MODARABAS 6 874,100 9.17
OTHERS 1 600 0.01
--------- --------- --------- ---------
677 9,536,800 100.00
=========== =========== =========== ===========
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