| ASIAN LEASING CORPORATION LTD. |
|
|
|
|
|
|
|
| Annual
Report 1997 |
|
|
| CONTENTS |
|
| Company
Information |
|
| Notice
of the Meeting |
|
| Directors'
Report |
|
| Chairman's
Review |
|
| Pattern
of Shareholding |
|
| Auditors'
Report |
|
| Balance
Sheet |
|
| Profit
and Loss Account |
|
| Statement
of Sources and Application of Funds |
|
| Notes
to the Accounts |
|
|
|
|
|
| COMPANY
INFORMATION |
|
|
| Board
of Directors: |
|
| Mr.
Mohammad Aslam Khan |
Chairman |
|
| Mr.
Mohammad Zafarullah Khan |
Director |
|
| Dr.
fftekhar A. Khan |
|
Director |
|
| Mr,
Shahid Hassan |
|
Nominee Director - NDFC |
|
| Syed
Ghulam Abbas |
|
Nominee Director - NDFC |
|
| Mrs.
Roohi Raees Khan |
|
Nominee Director - NDFC |
|
| Mr.
Muhammad Bashir Chaudhry |
Nominee Director - NDFC |
|
| Syed
Manzar Alam |
|
Nominee Director - NIT |
|
| Mr.
Muhammad Aslam |
|
Chief Executive
Officer/Director |
|
|
| Company
Secretary: |
|
| Mr.
Waqar Asghar |
|
|
| Bankers
to the Company: |
|
| Bank
of Punjab |
|
| Crescent
Investment Bank Limited |
|
| Faysal
Bank Limited |
|
| Muslim
Commercial Bank Limited |
|
| National
Bank of Pakistan |
|
| National
Development Finance Corporation |
|
|
| Auditors: |
|
| Ford,
Rhodes, Robson, Morrow |
|
| Chartered
Accountants |
|
|
| Legal
Advisor: |
|
| Khawaja
M. Azeem |
|
| Advocate
High Court |
|
|
| Registrars
and Share Transfer Office: |
|
| Noble
Computer Services (Private) Ltd. |
|
| 6tb
Floor, Hirani Centre, I. 1. Chundrigar Road, |
|
| Karachi |
|
|
| Registered
Office & Head Office: |
|
| 12-Ahmed
Block, New Garden Town, Lahore |
|
| Tel:
5882806-9 |
|
| Fax:
(042)5882669 |
|
|
| Branch
Office: |
|
| 204-Clifton
Centre, Khayaban-e-Roomi, Clifton |
|
| Karachi. |
|
| Tel:
5835936, 5866095 |
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| Fax:
5873573 |
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|
|
| NOTICE
OF ANNUAL GENERAL MEETING |
|
|
| Notice
is hereby given that the ELEVENTH ANNUAL GENERAL MEETING of ASIAN LEASING
CORPORATION |
|
| LIMITED will be held on Tuesday, 30th December, 1997 at the registered
office of the Company at 12-Ahmed |
|
| Block,
New Garden Town, Lahore at 9.00 a.m. to transact the following business: |
|
|
| 1.
To confirm the minutes of loth Annual General Meeting of the Company held on
26th December, 1996. |
|
|
| 2.
To receive, consider and adopt the audited accounts for the year ended June
30, 1997 together with the |
|
| Directors'
and Auditors' reports thereon. |
|
|
| 3.
To appoint Auditors and fix their remuneration. The present Auditors, Messrs.
Ford, Rhodes, Robson, |
|
| Morrow,
Chartered Accountants, retire and being eligible, offer themselves for
re-appointment. |
|
|
| 4.
To transact any other business with the permission of the Chair. |
|
|
| Lahore: |
|
|
| 6th
December, 1997 |
|
|
| NOTES: |
|
|
| 1.
The Register of Members of the Company will remain closed from 24th December,
1997 to 30th |
|
| December,
1997 (both days inclusive) and no transfer of shares will be made during the
period the |
|
| register
is closed. |
|
|
| 2.
A member entitled to attend and vote at the General Meeting is entitled to
appoint one person as his |
|
| proxy
to attend and vote on his behalf. |
|
|
| 3.
Instrument appointing proxy and the power of attorney or other authority
under which it is signed or a |
|
| notarially
certified copy of the power or authority must be deposited at the registered
office of the |
|
| Company
atleast 48 hours before the time of the meeting. |
|
|
| 4.
Shareholders are requested to notify any change in address immediately. |
|
|
|
| DIRECTORS'
REPORT TO THE MEMBERS |
|
|
| The
Board of Directors have pleasure in presenting to the members 1lth Annual
Report together with Audited |
|
| Accounts
and the Auditors' Report thereon for the year ended June 30, 1997. |
|
|
| FINANCIAL
RESULTS |
|
| The
financial results of the company for the year under review are summarised as
follows: |
|
|
|
(Rupees) |
|
|
| Revenue |
|
81,609,860 |
|
| Expenditure |
|
(69,878,686) |
|
| Profit
before tax |
|
11,731,174 |
|
| Taxation |
|
(19,500,000) |
|
| Loss
after tax |
|
(7,768,826) |
|
|
| CHAIRMAN'S
REVIEW |
|
| The
accompanying Chairman's review deals with the performance of the company
during the year and future |
|
| outlook. |
|
|
| PATTERN
OF SHAREHOLDING |
|
| The
Pattern of share holding of the Company is annexed |
|
|
| AUDITORS |
|
| The
present Auditors M/s. Ford, Rhodes, Robson, Morrow, Chartered Accountants
retire and being eligible offer |
|
| themselves
for re-appointment. |
|
|
|
|
| CHAIRMAN'S
REVIEW |
|
| The
year under review was full of crisis for the financial sector. It was
characterized by both despair and hope. |
|
| Political
uncertainty during the year affected the economy and business environments.
The economic activity, |
|
| more
or less, remained stand still and the financial institutions were forced to
re-evaluate the credit policies, |
|
| increase
monitory activities and focus on provisioning policies. Frequent currency
devaluation's, tight monitory |
|
| policy,
high cost of borrowings combined with depressed econolnic activity has
adversely affected business activity |
|
| all
around. |
|
|
| The
availability of Credit lines from the local institutions was affected because
of the liquidity crunch caused by |
|
| deficit
financing to support the economy. The management had therefore two options
before it; use the funds |
|
| from
the recovery to write new leases and consequently maintain lease portfolio at
the same level and to default |
|
| with
the lenders or to meet commitments with tile lenders. The management chopped
to follow the sound |
|
| financial
management policies in meeting commitments with all tile lenders and
depositors. The corporation |
|
| recovered
Rs. 211 million during the year under review as compared to Rs. 204 million
during the last year. The |
|
| corporation
also raised Rs. 70 million from the local institutions and Rs. 6.7 million
from the public deposits. The |
|
| management
met all financial obligations and other commitments. |
|
|
| Income
Tax in tile Leasing industry has peculiar phenomena. Leasing companies are
taxed on the basis of gross |
|
| rentals
receivable, whilst they recognize only mark up income in the accounts. This
results in the desparity |
|
| between
accounting income and tax provision. This aspect of the income tax is a
threat on very survival of the |
|
| industry.
Leasing Association of Pakistan has taken up the matter with the Government.
This is one of the major |
|
| factors
which has affected the profitability of your company. |
|
|
| In
view of the above position your company has been able to invest Rs. 87.96
million in leases and generated |
|
| revenue
of Rs. 81.61 million. Profit before tax is Rs. 11.73 million after providing
for Rs. 9.8 million as provision |
|
| for
doubtful receivables. Profit & Loss account is showing an after tax loss
of Rs. 7.77 million for reasons noted |
|
| above
and reduction in spread available between average return on lease financing
and rate of mark-up on loans. |
|
| Management
has been exercising strict control over expenditure of the corporation.
However, as a result of |
|
| increase
in salaries & benefits to the staff and high inflationary pressure,
administration expenses have increased |
|
| by
Rs. 2.2 million. Financial expenses have however decreased as the corporation
repaid all loans which fell |
|
| during
the year. |
|
|
| Diversification
of our lease portfolio remains focal point in our risk management strategy.
Your company has |
|
| build
np diversified quality lease portfolio. The sector wise and asset wise
disbursement of lease portfolio is as |
|
| under. |
|
|
| SECTOR-WISE
PORTFOLIO |
|
|
|
|
| Sector |
|
Percentage |
|
| Sugar
& Allied |
|
2.04% |
|
| Cement |
|
16.71% |
|
| Energy,
Oil and Gas |
|
4.21% |
|
| Steel,
Engineering, Automobiles |
|
8.02% |
|
| Electrical
& Electrical Goods |
|
10.49% |
|
| Chemical/Fertilizers/Pharmaceutical |
9.99% |
|
| Textile |
|
25.81% |
|
| Paper
and Board |
|
O.14% |
|
| Construction |
|
1.03% |
|
| Leather,
Footwear, Tanneries |
|
0.75% |
|
| Food,
Tobacco, Beverages |
|
0.88% |
|
| Glass
and Ceramics |
|
0.64% |
|
| Health
care |
|
0.75% |
|
| Dairy
and Poultry |
|
8.30% |
|
| Miscellaneous |
|
10.24% |
|
|
---------- |
|
| Total |
|
100.00% |
|
|
========== |
|
| CATEGORY-WISE
PORTFOLIO |
|
| Type
of Assets |
|
Percentage |
|
| Machinery |
|
77.79% |
|
| Equipment |
|
2.39% |
|
| Vehicle |
|
19.37% |
|
| Computer |
|
0.45% |
|
|
---------- |
|
| Total |
|
1OO.OO% |
|
|
========== |
|
| RESOURCE
MOBILIZATION |
|
|
| Your
company has made new initiative in this field. We have made a number of
applications to the Multilateral |
|
| Financial
Institutions and are pursuing the same. The local financial institutions are
now taking short term |
|
| positions
and the funds needed for lease financing are made available on a highly
selective basis. This has |
|
| checked
the growth of your company. |
|
|
| The
Corporation is grateful to the banks and financial institutions, in
particular those mentioned below, for |
|
| providing
timely financial assistance and guidance. |
|
|
| ·
Al Faces Investment Bank Limited |
|
| ·
AI-Twofer Investment Bank Limited. |
|
| ·
Asian Development Bank |
|
| ·
Asian Finance & Investment Corporation |
|
| ·
Crescent Investment Bank |
|
| ·
Faces Bank Limited |
|
| ·
Fidelity, Investment Bank Limited |
|
| ·
Muslim Commercial Bank Limited |
|
| ·
National Development Finance Corporation |
|
| ·
Saudi Pak Agricultural and Investment Co. (Pvt) Ltd. |
|
|
| FUTURE
PROSPECTS |
|
| The
economy of the country is showing signs of improvement due to steps taken by
the Government to |
|
| reinvigorate
the business sector and improve investment climate in tile country. Reduction
in tax rates and |
|
| Government
borrowings from the Banking sector will infuse new vitality in trade and
industry. Moreover |
|
| reduction
in liquidity requirements from 19% to 14% will have positive effect on the
cost of funds. Abolition of |
|
| central
excise duty on lease financing coupled with Government efforts to reduce
mark-up rates will be helpful for |
|
| the
industrial activity,. |
|
|
| There
are good prospects of growth for 1997-98 and we are confident to negotiate
credit lines from local & foreign |
|
| financial
our. |
|
|
| ACKNOWLEDGMENT |
|
| Tile
company is thankful to the authorities of the State Bank of Pakistan,
Corporate Law Authority, our valuable |
|
| clients,
financial institutions and shareholders for their continued support and
co-operation. Appreciation is also |
|
| placed
on record for the dedicated llard work put in by tile staff of the
Corporation. |
|
|
| I
also thank all tile concerned agencies once again who helped, patronized and
assisted in our efforts and hope |
|
| that
they will continue to support us in future. |
|
|
| Lahore: |
|
|
| December
6, 1997 |
|
|
|
| PATTERN
OF SHARE HOLDING |
|
| AS
AT JUNE 30, 1997 |
|
|
|
| Number of |
Shareholding |
Total Shares |
|
| Shareholders |
From |
To |
Held |
|
|
| 308 |
1 |
100 |
14,725 |
|
| 361 |
101 |
500 |
88,190 |
|
| 149 |
501 |
1,000 |
109,436 |
|
| 330 |
1,001 |
5,000 |
625,855 |
|
| 49 |
5,001 |
10,000 |
339,333 |
|
| 5 |
10,001 |
15,000 |
56,603 |
|
| 2 |
15,001 |
20,000 |
35,738 |
|
| 3 |
20,001 |
25,000 |
64,852 |
|
| 1 |
25,001 |
30,000 |
26,136 |
|
| 1 |
40,001 |
45,000 |
41,817 |
|
| 1 |
45,001 |
50,000 |
48,944 |
|
| 1 |
50,001 |
55,000 |
52,272 |
|
| 1 |
55,001 |
60,000 |
55,806 |
|
| 2 |
65,001 |
70,000 |
134,489 |
|
| 1 |
70,001 |
75,000 |
72,600 |
|
| 1 |
75,001 |
80,000 |
79,514 |
|
| 1 |
100,001 |
105,000 |
104,544 |
|
| 1 |
120,001 |
125,000 |
121,000 |
|
| 1 |
145,001 |
150,000 |
145,300 |
|
| 3 |
260,001 |
265,000 |
784,904 |
|
| 2 |
520,001 |
525,000 |
1,045,440 |
|
| 1 |
525,001 |
530,000 |
527,720 |
|
| 1 |
565,001 |
570,000 |
569,329 |
|
| 1 |
610,001 |
2,615,000 |
2,613,600 |
|
| 1 |
2,695,001 |
2,700,000 |
2,696,253 |
|
| --------- |
--------- |
--------- |
--------- |
|
| 1,228 |
|
TOTAL |
10,454,400 |
|
| ========= |
========= |
========= |
========= |
|
|
| CATEGORIES
OF SHAREHOLDERS AS AT JUNE 30, 1997 |
|
|
| Categories
of Shareholder |
Number |
Shares Held |
Percentage |
|
| INDIVIDUAL |
|
1,203 |
3,615,624 |
34.584 |
|
| INVESTMENT
COMPANIES |
|
4 |
264,973 |
2.535 |
|
| INSURANCE
COMPANIES |
|
2 |
611,146 |
5.846 |
|
| JOINT
STOCK COMPANIES |
|
9 |
368,199 |
3.522 |
|
| FINANCIAL
INVESTORS |
|
3 |
5,382,453 |
51.485 |
|
| MODARABA |
|
4 |
96,136 |
0.920 |
|
| CO-OPERATIVE
SOCIETIES |
2 |
112,733 |
1.078 |
|
| CHARITABLE
TRUSTS |
|
1 |
3,136 |
0.030 |
|
| OTHER |
|
|
-- |
-- |
-- |
|
|
|
|
---------- |
---------- |
---------- |
|
| TOTAL |
|
1,228 |
10,454,400 |
100.000 |
|
|
|
========== |
========== |
========== |
|
|
|
|
|
|
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
| we
have audited the annexed balance sheet of Asian Leasing Corporation Limited
as at June 30, 1997 |
|
| and
the related profit and loss account and statement of sources and application
of funds, 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 purposes
of our audit and, after |
|
| due
verification thereof, we report that: |
|
|
| (a)
in our opinion, proper boom of account have been kept by the Company as
required by the |
|
| Companies
Ordinance, 1984; |
|
|
| (b)
in onr 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 boom 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, profit and loss account and the statement of sources and
application of |
|
| funds,
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, 1997 and of the profit and
the changes in |
|
| sources
and application of funds for the year 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. |
|
|
| Without
qualifying our opinion, we draw attention to the corresponding figures used
for profit and loss |
|
| account
together with the notes thereon which are not of the audited accounts for the
period ended from |
|
| January
01, 1995 to June 30, 1996 as explained in Note: 29. |
|
|
| Lahore: |
|
FORD, RHODES, ROBSON,
MORROW |
|
| December
6, 1997 |
|
CHARTERED ACCOUNTANTS |
|
|
|
| BALANCE
SHEET AS AT JUNE 30, 1997 |
|
|
|
1997 |
1996 |
|
|
Notes |
Rupees |
Rupees |
|
| CAPITAL
AND RESERVES |
|
|
| Authorised
capital |
|
| 25,000,000
(1996: 25,000,000) ordinary |
|
| shares
of Rs. 10/- each |
|
250,000,000 |
250,000,000 |
|
|
========== |
========== |
|
| Issued,
subscribed and paid-up capital |
4 |
104,544,000 |
104,544,000 |
|
|
| Special
Reserves |
|
5 |
7,104,821 |
7,104,821 |
|
| General
Reserves |
|
|
31,336,477 |
31,336,477 |
|
| Unappropriated
(loss)/profit |
|
(7,768,826) |
-- |
|
|
30,672,472 |
38,441,298 |
|
|
---------- |
---------- |
|
|
135,216,472 |
142,985,298 |
|
| LONG
TERM AND DEFERRED LIABILITIES |
|
| Long
term loans- secured |
|
7 |
78,459,557 |
150,204,299 |
|
| Marginal
deposits on lease arrangements |
|
68,446,572 |
77,710,965 |
|
| Customers'
deposits - COIs |
|
8 |
1,725,000 |
3,600,000 |
|
| Provision
for gratuity |
|
55,085 |
55,085 |
|
|
148,686,214 |
231,570,349 |
|
| CURRENT
LIABILITIES |
|
|
|
| Current
maturity of long term loans |
|
93,865,603 |
111,972,050 |
|
| Short
term loans - secured |
|
9 |
15,000,000 |
7,500,000 |
|
| Short
term customers' deposits - COIs |
10 |
2,702,400 |
16,250,000 |
|
| Accrued
liabilities |
|
|
322,078 |
338,942 |
|
| Mark-up
accrued on secured loans |
|
|
2,912,469 |
4,643,292 |
|
| Mark-up
accrued on Certificates of Investment |
|
86,678 |
399,215 |
|
| Provision
for taxation |
|
|
32,967,541 |
13,467,542 |
|
| Central
Excise duty payable |
|
|
65,286 |
11,714 |
|
| Others |
|
|
469,223 |
1,395 |
|
| Dividends |
|
11 |
246,846 |
10,474,750 |
|
|
|
---------- |
---------- |
|
|
|
148,638,124 |
165,058,900 |
|
| CONTINGENCIES
AND COMMITMENTS |
|
12 |
-- |
-- |
|
|
---------- |
---------- |
|
|
432,540,810 |
539,614,547 |
|
|
========== |
========== |
|
|
| TANGIBLE
FIXED ASSETS |
|
13 |
5,209,982 |
4,495,434 |
|
| NET
INVESTMENT IN LEASE FINANCE |
|
|
| Lease
payments receivable |
|
387,327,080 |
501,660,101 |
|
| Residual
value |
|
67,791,891 |
77,223,219 |
|
|
| Gross
lease payment receivable |
|
455,118,971 |
578,883,320 |
|
| Less
:' Unearned mark-up |
|
(82,087,583 |
(112,768,230) |
|
|
|
373,031,388 |
466,115,090 |
|
| Bad
debts written off |
|
-- |
(4,191,735) |
|
|
| Set
investment in lease finance |
|
373,031,388 |
461,923,355 |
|
|
| Less:
Current maturity |
|
(154,790,934) |
(191,375,952) |
|
| Provision
for doubtful receivables |
|
(7,293,921) |
(2,569,681) |
|
|
210,946,533 |
267,977,722 |
|
|
| LONG
TERM INVESTMENTS |
|
14 |
8,888,000 |
5,888,000 |
|
| LONG
TERM FINANCES - SECURED |
|
15 |
-- |
5,489,243 |
|
| DEFERRED
COST |
|
16 |
1,733,787 |
2,183,864 |
|
| CURRENT
ASSETS |
|
|
| Current
portion of net investment |
|
| In
lease finance |
|
154,790,934 |
191,375,952 |
|
| Short
term finances - secured |
|
17 |
17,326,540 |
16,954,204 |
|
| Mvances,
deposits, prepayments |
|
|
|
| and
other receivables |
|
18 |
14,347,939 |
18,169,876 |
|
| Cash
and bank balances |
|
19 |
19,297,095 |
27,080,252 |
|
|
|
---------- |
---------- |
|
|
205,762,508 |
253,580,284 |
|
|
---------- |
---------- |
|
|
432,540,810 |
539,614,547 |
|
|
=========== |
=========== |
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
| PROFIT
AND LOSS ACCOUNT |
|
| FOR
THE YEAR ENDED JUNE 30, 1997 |
|
|
|
1996 |
1997 |
|
|
Notes |
Rupees |
Rupees |
|
|
| REVENUE |
|
| Income
from lease operations |
|
72,018,354 |
76,974,176 |
|
| Mark-up
income |
|
8,703,596 |
12,675,195 |
|
| Other
income |
|
887,910 |
817,130 |
|
|
---------- |
---------- |
|
|
81,609,860 |
90,466,501 |
|
| EXPENDITURE |
|
|
|
| Direct
cost of leases |
|
23 |
79,552 |
115,454 |
|
| Financial
charges |
|
24 |
45,296,571 |
52,668,065 |
|
| Administrative
and o perati ng expenses |
25 |
12,395,475 |
10,194, 731 |
|
| Depreciation |
|
13 |
1,225,502 |
1,037,935 |
|
| Deferred
costs - Amortised |
|
16 |
998,405 |
1,099,271 |
|
| Bad
debts written off |
|
|
-- |
9,663,938 |
|
| Provision
for doubtful receivables |
|
9,883,181 |
(3,874,822) |
|
|
---------- |
---------- |
|
|
69,878,686 |
70,904,572 |
|
|
| Profit
before tax |
|
11,731,174 |
19,561,929 |
|
| Taxation |
|
26 |
19,500,000 |
9,400,000 |
|
|
---------- |
---------- |
|
| (Loss)
/ profit after tax |
|
(7,768,826) |
10,161,929 |
|
|
| Unappropriated
profit brought forward |
|
-- |
2,170,334 |
|
| Transfer
from general reserve |
|
-- |
154,523 |
|
|
---------- |
---------- |
|
| Profit
available for appropriation |
|
(7,768,826) |
12,486,786 |
|
| Appropfi
ations: |
|
| Transfer
to Special reserve |
|
-- |
2,032,386 |
|
| Proposed
dividend |
|
-- |
10,454,400 |
|
|
|
|
|
-- |
12,486,786 |
|
|
---------- |
---------- |
|
| Unappropriated
(loss) / profit carried forward |
|
(7,768,826) |
-- |
|
|
========== |
========== |
|
