| 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) |
-- |
|
|
========== |
========== |
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
| STATEMENT
OF SOURCES AND APPLICATION OF FUNDS |
|
| FOR
THE YEAR ENDED JUNE 30, 1997 |
|
|
|
|
1997 |
1996 |
|
|
Rupees |
Rupees |
|
| CASH
FLOW FROM OPERATING ACTIVITIES |
|
|
| Net
profit after taxation |
|
(7,768,826) |
10,161,929 |
|
| Adjustment
for: |
|
| Depreciation |
|
1,225,502 |
1,037,935 |
|
| amortization
of deferred costs |
|
998,405 |
1,099,271 |
|
| (Profit)
on sale of fixed assets |
|
(259,852) |
(159,468) |
|
| Bad
debts written off |
|
-- |
9,663,938 |
|
| Provision
for doubtful receivables |
|
9,883,181 |
(3,874,822) |
|
|
---------- |
---------- |
|
|
11,847,236 |
7,766,854 |
|
|
---------- |
---------- |
|
| Operating
profit before working capital changes |
4,078,410 |
17,928,783 |
|
| (Increase)/decrease
in: |
|
| Short
term finances (other than provision for doubtful |
|
| and
current portion) |
|
802,313 |
10,461,865 |
|
| Advances,
deposits, prepayments and other |
|
| receivables
(other than provision for doubtful) |
(1,471,973) |
7,945,268 |
|
|
---------- |
---------- |
|
|
(669,660) |
18,407,133 |
|
| Increase/(Decrease)
in: |
|
| Current
liabilities (other than current maturity |
|
| of
long term loans, COI's and dividends) |
|
13,013,575 |
1,898,093 |
|
|
---------- |
---------- |
|
| NET
CASH FROM OPERATING ACTIVITIESI |
|
16,422,325 |
38,234,009 |
|
|
|
1997 |
1996 |
|
|
Rupees |
Rupees |
|
| Brought
forward |
|
16,422,325 |
38,234,009 |
|
| CASH
FLOW FROM INVESTING ACTIVITIES |
|
|
|
| Acquisition
of fixed assets |
|
(1,991,580) |
(1,688,902) |
|
| Sale
proceeds of fixed assets |
|
311,382 |
729,950 |
|
| Deferred
costs |
|
(548,328) |
(1,225,020) |
|
| Net
investment in lease finance recovered |
|
176,854,714 |
140,900,234 |
|
| Net
investment in lease finance provided |
|
(87,962,748) |
(176,320,958) |
|
| Marginal
deposits on lease arrangements received |
11,235,642 |
24,550,943 |
|
| Marginal
deposits on lease arrangements repaid |
|
(20,500,035) |
(11,949,310) |
|
| Long
term investments |
|
(3,000,000) |
(747,500) |
|
| Long
term finances |
|
4,449,563 |
2,206,184 |
|
|
---------- |
---------- |
|
| Net
cash used in Investing Activities |
|
78,848,610 |
(23,544,379) |
|
|
| CASH
FLOW FROM FINANCING ACTIVITIES |
|
| Dividends |
|
(10, 227,904) |
-- |
|
| Long
term loans |
|
37,000,000 |
79,069,520 |
|
| Customers'
deposits - COIs |
|
(2,975,000) |
13,497,000 |
|
| Repayment
of long term loans |
|
(126,851,188) |
(107,143,131) |
|
|
| Set
cash used in financing activities |
|
(103,054,092) |
(14,576,611) |
|
|
---------- |
---------- |
|
| Set
(decrease)/increase in cash and cash equivalents |
(7,783,157) |
113,019 |
|
| Cash
and bank balances at the beginning of the period |
27,080,252 |
26,967,233 |
|
|
---------- |
---------- |
|
| Cash
and bank balances at the end of the period |
19,297,095 |
27,080,252 |
|
|
========== |
========== |
|
|
|
|
|
|
| NOTES
TO THE ACCOUNTS |
|
| FOR
THE YEAR ENDED JUNE 30, 1997 |
|
|
| 1.
THE COMPANY AND ITS OPERATION |
|
|
| The
company is a public limited company and is listed on the Karachi, Lahore and
Islamabad Stock |
|
| Exchanges.
The company is engaged in the business of lease financing. |
|
|
| 2.
COMPLIANCE WITH I A S |
|
|
| These
accounts comply with International Accounting Standards in all material
respects. |
|
|
| 3.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
|
|
| 3.1
Accounting convention |
|
| The
financial statements are prepared under the historical cost convention. |
|
|
| 3.2
Tangible fixed assets and depreciation |
|
|
| Fixed
assets for own use are stated at cost less accumulated depreciation.
Depreciation on these |
|
| assets
is calculated applying the straight line method whereby the cost of assets is
written off |
|
| over
estimated useful lives, |
|
|
| A
full one year depreciation is charged in the year of addition and no
depreciation is charged in |
|
| tile
year of deletion, |
|
|
| Rel)airs
and maintenance costs are expensed out as and when incurred, however, major |
|
| betterments
are capitalised. |
|
|
| 3.3
Deferred costs |
|
|
| These
costs are to be written off over a period of five years from the year of
incurfence. |
|
|
| 3.4 Taxation |
|
|
| Current
tax l)rovision is based on profits as adjusted for tax purposes after taking
into account |
|
| all
available allowances and credits. |
|
|
| The
company determines deferred tax on all major timing differences using the
liability method |
|
| (Note:
26). |
|
|
| 3.5
Revenue recognition |
|
|
| The
company recognises all "sale and lease back" and "direct
leases" as finance leases. |
|
| Accordingly,
the excess of aggregate lease rentals over the net investments in the cost of
leased |
|
| assets
is deferred and amortised to income over the term of the lease according to
the annuity |
|
| method.
Mark-up income on morabaha finances is recognised on receivable basis as
stated i~ |
|
| their
respective agreements. Front end fees (project examination fees) are taken to
income on |
|
| receipt
basis while commitment fees are recorded on accrual basis. Other income is
accounted |
|
| for
when it becomes receivable. |
|
|
| 3.6
Foreign currency translation |
|
|
| Transactions
in foreign currencies are accounted for at the rates prevailing on the date
of |
|
| transaction.
Assets and liabilities in foreign currencies are translated at the rate of
exchange |
|
| prevailing
on the balance sheet date except for foreign currency loans registered under
the |
|
| Exchange
Risk Cover Scheme of the Government of Pakistan which are, if any, recorded
at the |
|
| rate
prevailing on the date of disbursement. Exchange difference, if any, arising
from translation |
|
| at
year end rates is taken to profit and loss account. |
|
|
| 3.7
Staff retiremeut benefits |
|
|
| The
company had established an unfunded gratuity scheme for all permanent
employees uptil |
|
| March,
1992 whereafter the scheme of Recognized Provident Fund has been introduced
in place |
|
| of
gratuity scheme under a trust established for this purpose. |
|
|
| 3.8 Provision for doubtful receivables |
|
|
| The
company makes a provision for doubtful receivables equivalent to 2% (1996:
2%) of net |
|
| lease
receivables, including advances against leases and long/short term finances,
in pursuance |
|
| to
loan conditions of Asian Development Bank (Note: 7.1). |
|
|
| Provision
for doubtful receivables is made at the higher of SBP's Rules of Business
(Prudential |
|
| Regulations)
or 2% ms specified by Asian Development Bank on an aggregate basis. |
|
|
| 3.9
Long term investments |
|
|
| These
are stated at cost. |
|
|
1997 |
1996 |
|
| 4.
ISSUED, SUBSCRIBED AND PMD-UP CAPITAL |
|
Rupees |
Rupees |
|
|
| 5,000,000
(1996: 5,000,000) ordinary shares of |
|
| Rs.
10/- each fully paid in cash |
|
50,000,000 |
50,000,000 |
|
| 5,454,400
(1996: 5,454,400) ordinary shares of |
|
| Rs.10
each issued as fully paid bonus shares |
|
54,544,000 |
54,544,000 |
|
|
---------- |
---------- |
|
|
104,544,000 |
104,544,000 |
|
|
========== |
========== |
|
| 5.
SPECIAL RESERVES |
|
|
| Opening
balance |
|
7,104,821 |
5,072,435 |
|
| Transfer
from Profit & Loss Account |
|
-- |
2,032,386 |
|
|
---------- |
---------- |
|
|
7,104,821 |
7,104,821 |
|
|
========== |
========== |
|
|
| This
represents special reserve created under Rule-3 of SBP's Rules of Business
(Prudential Regulations) |
|
| for
Non-Banking Financial Institutions. |
|
|
|
|
1997 |
1996 |
|
| 6.
GENERAL RESERVES |
|
Rupees |
Rupees |
|
|
| Opening
balance |
|
31,336,477 |
31,491,O00 |
|
| Transfer
to Profit and Loss Account |
|
-- |
(154,523) |
|
|
---------- |
---------- |
|
|
31,336,477 |
1 31,336,477 |
|
| 7.
LONG TERM LOANS - SECURED |
|
========== |
========== |
|
| Foreign
Currency Loans |
|
| Asian
Development Bank |
|
| Loan
No. 1 (US $ 250,000) (Note: 7.1) |
|
5,598,755 |
16,796,261 |
|
| Loan
No. 2 (US $ 2,916,669) (Note: 7.2) |
|
80,922,529 |
113,291,327 |
|
| Loan
No. 3 (US $ 333,340) (Note: 7.3) |
|
7,754,364 |
15,508,550 |
|
| Local
Currency Loans |
|
| National
Development Finance Corporation |
|
| Loan
No. 4 (Note: 7.4) |
|
5,000,000 |
10,000,000 |
|
| Loan
No. 5 (Note: 7.5) |
|
7,272,726 |
16,363,636 |
|
| Loan
No. 6 (Note: 7.6) |
|
16,666,666 |
25,000,000 |
|
| Crescent
Investment Bank Ltd. |
|
| Loan
No. 1 (Note 7.7) |
|
-- |
4,999,997 |
|
| Loan
No. 2 (Note 7.8) |
|
5,000,002 |
8,333,334 |
|
| Loan
No. 3 (Note 7.9) |
|
5,833,335 |
9,166,667 |
|
| Loan
No. 4 (Note: 7.10) |
|
10,000,000 |
|
|
| A1-Faysal
Investment Bank Limited (Note: 7.11) |
|
7,500,000 |
9,534,761 |
|
| Allied
Bank of Pakistan Ltd. (Note 7.12) |
|
-- |
15,000,000 |
|
| Muslim
Commercial Bank Ltd. |
|
| Loan
No. 1 (Note: 7.13) |
|
4,545,453 |
8,181,818 |
|
| Loan
No. 2 (Note: 7.14) |
|
7,273,000 |
-- |
|
| Fidelity
Investment Bank Ltd. (Note: 7.15) |
|
3,333,330 |
9,999,998 |
|
| Prudential
Commercial Bank Ltd. (Note: 7.16) |
|
5,625,000 |
-- |
|
|
---------- |
---------- |
|
|
172,325,160 |
262,176,349 |
|
| Less:
Current Maturity |
|
93,865,603 |
111,972,050 |
|
|
---------- |
---------- |
|
|
78,459,557 |
150,204,299 |
|
|
========== |
========== |
|
| 7.1
A.D.B. Loan No. 1 |
|
|
| This
represents the balance of a loan of US $ 3,000,000 sanctioned by Asian
Development Bank |
|
| for
financing of lease operations. |
|
|
| The
loan carries interest at the rate of 10.8% p.a. payable semi-annually on
15thJune and 15th |
|
| December
in each year. |
|
|
| The
loan is repayable in 12 equal semi-annual instalments of US $ 250,000 each
commencing |
|
| on
June 15, 1992. |
|
|
| The
loan is secured by (i) a pari-passu floating charge on the leased assets
purchased out of the |
|
| proceeds
of the loan, (ii) hypothecation of moveable assets and receivables of the
company and |
|
| (iii)
demand promissory note. |
|
|
| The
conditions of the loan agreement requires the company to, inter alia,
maintain (i) a debt |
|
| equity
ratio not exceeding 10:1, (ii) a debt service coverage ratio equaling or
exceeding 1.25:1, |
|
| (iii)
a provision for doubtful accounts equivalent to 2% of the total risk assets
as defined in the |
|
| agreement
and (iv) not to distribute more than 60% of the unrestricted after tax
profits of any |
|
| year. |
|
|
| 7.2
A.D.B. Loan No. 2 |
|
|
| This
represents the balance of a loan of US $ 7,000,000 sanctioned by Asian
Development Bank |
|
| for
financing of lease operations. |
|
|
| The
loan carries interest at the rate of 9.4% per annum, payable semi-annually on
15th June |
|
| and
15th December in each year. |
|
|
| Tile
loan is repayable in 11 equal semi-annual instalments of US $ 583,333 each
commencing |
|
| on
June 15, 1994 and one final instalment of Rs $ 583,337. |
|
|
| Other
conditions of security and financial restrictions are the same as in Loan No.
1 except |
|
| financial
restrictions as extended by (v) to maintain, at all times, a current ratio
equal to at least |
|
| 1.25:1
and (vi) to maintain, at all times, in cash or Government Securities an
amount |
|
| equivalent
in value at least 10% of the principal amount of outstanding Certificates of |
|
| Investment. |
|
|
| 7.3 A.D.B. Loan No. 3 |
|
|
| This
represents the balance of a loan of US $ 2,000,000 sanctioned by Asian
Development Bank |
|
| for
financing lease operations. |
|
|
| The
loan carries interest at the rate of 1.5% p.a. above LIBOR, payable
semi-annually on 15th |
|
| June
and 15th December in each year. |
|
|
| The
loan is repayable in 11 equal semi-annual instalments of US $166,666 each
commencing |
|
| on
December 15, 1992 and one final instalment of US $166,674. |
|
|
| Other
conditions of security and financial restriction are the same as of loan No.
1. |
|
|
| 7.4 N.D.F.C. Loan No. 4 |
|
| The
loan has been obtained under a sale and repurchase agreement for financing
the leasing |
|
| operations
of tile company. |
|
|
| Tile
sale price of Rs. 20,000,000 has a repurchase price of Rs. 31,509,608/- which
is repayable |
|
| in
8 equal half-yearly instalments commencing from August 08, 1994. |
|
|
| The
payment of the repurchase price is secured by an agreement to (a) mortgage of
immovable |
|
| properties
including building, plant, machinery and equipment and replacements thereof
and |
|
| additions
thereto plus other properties as N.D.F.C. may determine, (b) create a
floating charge |
|
| on
the business, under taking and all properties and assets of the company, (c)
pledge / |
|
| hypothecation
of all fixed assets, book debts and benefits of contracts for supply of goods
for the |
|
| purposes
of business, (d) hypothecation of assets acquired by the company from the
finance |
|
| provided
by N.D.F.C. and (e) demand promissory note. |
|
|
| 7.5 N.D.F.C. Loan No. 5 |
|
|
| Tile
loan has been obtained under a sale and repurchase agreement for financing
the leasing |
|
| operations
of the company. |
|
|
| The
sale price of Rs.20,000,000 has a repurchase price of Rs.27,380,540 which is
repayable in |
|
| 11
equal quarterly instalments commencing from January, 02,1996. |
|
|
| The
payment of the repurchase price is secured by way of (a) hypothecation charge
on the entire |
|
| assets
and undertakings of the company, (b) mortgage charge on all the present and
future |
|
| fixed
assets of the company and (c) demand promissory note. The charge so created
shall rank |
|
| pari
passu with all other existing loan creditors. |
|
|
| 7.6 N.D.F.C. Loan No. 6 |
|
|
| This
loan has been obtained under a sale and repurchase agreement for financing
the leasing |
|
| operations
of tile company. |
|
|
| The
sale price of Rs. 25,000,000 has a repurchase price of Rs. 33,937,900 which
is repayable in |
|
| 6
equal half-yearly installments commencing from November 26, 1996. |
|
|
| The
payment of tile repurchase price is secured by way of (a) hypothecation
charge on the entire |
|
| assets
and undertakings of the company, (b) mortgage charge on all the present and
future |
|
| Fixed
assets of the company and (c) demand promissory note. |
|
|
| 7.7
Crescent Investment Bank Ltd. - 1 |
|
|
| The
loan of Rs. 20,000,000 has been obtained under a sale and repurchase
agreement for |
|
| financing
the leasing operations of the company. The repurchase price is Rs.26,163,289
which |
|
| is
repayable in 12 equal quarterly instalments commencing from May 12,1994. |
|
|
| Tile
payment of tile repurchase price is secured by an agreement to (a) create
first charge over |
|
| fixed
assets of the company (b) an undertaking by the company to maintain a minimum
credit |
|
| balance
of Rs.5.00 million with Cres Bank during the currency of the facility (c)
undertaking |
|
| that
if the promissory note is not paid upon maturity, company shall become liable
to pay |
|
| liquidated
damages @ 20% per annum for each day' the payment is delayed, (d) demand |
|
| promissory
note. |
|
|
| 7.8
Crescent Investment Bank Ltd. - 2 |
|
|
| This
facility of Rs.10.00 million has been obtained for financing the leasing
operations of the |
|
| company.
The facility carries mark-up @ 19% p.a. This facility is repayable in 12
equal |
|
| quarterly
instalments commencing from January 09, 1996. |
|
| The
loan is secured against (a) first charge on fixed assets of the company. (b)
undertaking that |
|
| if
the promissory note is not paid upon maturity, company shall become liable to
pay liquidated |
|
| damages @ 20% p.a. for each day the payment
is delayed. (c) demand promissory note. |
|
|
| 7.9
Crescent Investment Bank Ltd. - 3 |
|
|
| This
facility of Rs. 10.00 million has been obtained for financing the leasing
operations of the |
|
| company.
The facility carries mark-up @ 18.5% p.a. This facility is repayable in 12
equal |
|
| quarterly
instalments commencing from May 27, 1996. |
|
|
| The
loan is secured against (a) first charge on fixed assets of the company. (b)
undertaking that |
|
| if
the promissory note is not paid upon maturity, company shall become liable to
pay liquidated |
|
| damages
@ 19.5% p.a. for each day the
payment is delayed. |
|
|
| 7.10
Crescent Investment Bank Ltd. - 4 |
|
|
| This
facility of Rs. 10.00 million has been obtained for the financing the leasing
operations of |
|
| the
company. The facility carries mark-up @ 21% p.a. This facility is repayable
in 12 equal |
|
| quarterly
instalments commencing from August 26, 1997. |
|
|
| The
loan is secured against (a) first charge on fixed assets of the company. (b)
undertaking that |
|
| if
the promissory note is not paid upon maturity, company shall become liable to
pay liquidated |
|
| damages
@ 22% p.a. each day payment is delayed. |
|
|
| 7.11
Al-Faysal Investment Bank Ltd. |
|
|
| The
morabaha finance facility has been obtained for financing the leasing
operations of the |
|
| company. |
|
|
| The
sale price of Rs. 9,500,000 has a repurchase price of Rs.11,647,671 which is
repayable in 8 |
|
| equal
quarterly installments commencing from February 16, 1997. The loan is secured
against |
|
| hypothecation
of already existing fixed assets worth Rs. 22.375 million. |
|
|
| 7.12
Allied Bank of Pakistan Limited |
|
|
| This
loan has been obtained under a sale and repurchase agreement for financing
the leasing |
|
| operations
of the company. |
|
|
| The
sale price of Rs. 30,000,000 has a repurchase price of Rs. 39,200,000 which
is repayable in |
|
| 6
equal half-yearly instalments commencing from December 25, 1995. |
|
|
| The
payment of the repurchase price is secured by an agreement to (a)
registration of first |
|
| charge
on present and future assets of the company ranking pari passu with the
senior |
|
| creditors,
(b) registered hypothecation charge on the leased assets of the company. |
|
|
| 7.13
Muslim Commercial Bank Ltd. - 1 |
|
|
| The
demand finance facility of Rs. 10.00 million has been obtained for financing
the leasing |
|
| operations
of the company. The facility carries mark-up @ 18.25% p.a. The facility is
repayable |
|
| in
11 equal quarterly installments commencing from March 31, 1996. The loan is
secured |
|
| against
first pari passu charge on the current/fixed including leased assets of the
company to the |
|
| extent
of Rs. 12.00 (M). |
|
|
| 7.14
Muslim Commercial Bank Ltd. - 2 |
|
|
| The
demand finance facility of RS. 10.00 million has been obtained for financing
the leasing |
|
| operations
of the company. The facility carries mark-up @ 18.98% p.a. This facility is
repayable |
|
| in
11 equal quarterly instalments commencing from September 30, 1996. The loan
is secured |
|
| against
first pari passu charge on current/fixed assets of the company. |
|
|
| 7.15
Fidelity Investment Bank Ltd. |
|
|
| The
placement line of RS.20.00 million has been obtained for financing the
leasing operations of |
|
| the
company. The facility carries mark-up @ 19% per annum. This facility is
repayable in 12 |
|
| equal
quarterly instalments commencing from March 26, 1995. The facility is secured
against |
|
| charge
on leased assets of the company. |
|
|
| 7.16
Prudential Commercial Bank Ltd. |
|
|
| The
demand finance facility of RS. 7.500 million has been obtained for the
working capital |
|
| requirement.
The facility carries mark-up @ 20% per annum. This facility is repayable in 8 |
|
| equal
quarterly instalments commencing from March 01, 1997. The facility is secured
against |
|
| registered
hypothecation charge on assets and receivables/book debts of the company for |
|
| Rs.
10.00 million. |
|
|
1997 |
1996 |
|
| 8.
CUSTOMERS' DEPOSITS - COls |
|
Rupees |
Rupees |
|
|
| Certificates
of investment (Note: 8.1) |
|
2,725,000 |
5,700,000 |
|
| Less:
Current maturity (Note: 10) |
|
(1,000,000) |
(2,100,000) |
|
|
---------- |
---------- |
|
|
1,725,000 |
3,600,000 |
|
|
========== |
========== |
|
|
| 8.1
These represent deposits accepted by the company from other companies and
individuals in |
|
| accordance
with the permission to issue registered certificates of deposit granted by
the |
|
| Corporate
Law Authority. |
|
|
| The
terms and conditions of these deposits are the same as stated in Note: 10.1
except these are |
|
| for
the period ranging from two years to three years and the return on these
deposits range from |
|
| 17%
to 18% p.a. |
|
|
|
1997 |
1996 |
|
|
Rupees |
Rupees |
|
| 9.
SHORT TERM LOANS - Secured |
|
| Al-Towfeek
Investment Bank Ltd. (Note: 9.1) |
|
-- |
7,500,000 |
|
| Saudi
Pak Industrial & Agricultural Investment Co. (Pvt.) Ltd. |
|
| Loan
No. 1 (Note: 9.2) |
|
10,000,O00 |
-- |
|
| Loan
No. 2 (Note: 9.3) |
|
5,000,000 |
-- |
|
|
---------- |
---------- |
|
|
15,000,000 |
7,500,000 |
|
|
========== |
========== |
|
|
| 9.1
Short term loan has been obtained from AI-Towfeek Investment Bank Limited
under a |
|
| Morabaha
agreement. The sale price of Rs.7,500,000 has a repurchase price of
Rs.8,406,550 |
|
| which
is repayable in four quarterly instalments starting from August 08, 1996. The
loan is |
|
| secured
against pari passu charge on assets of the company to the extent of Rs. 8.407
million |
|
| and
assignment of rentals receivable by the company. |
|
|
| 9.2
Short term facility of Rs. 10.00 million has been obtained from Saudi Pak
Industrial & |
|
| Agricultural
Investment Company (PvL) Ltd. The facility carries mark-up (~ 20% p.a.
payable |
|
| quarterly
commencing from March 31, 1997. Principal shall be repayable at expiry of 12 |
|
| months
from December 31, 1996. |
|
|
| The
loan is secured against (a) leased assets of an aggregate value not less than
Rs. 20.00 |
|
| million.
(b) assignment of lease rentals receivables by the company. |
|
|
| 9.3
Short term facility of Rs. 5.00 million has been obtained from Saudi Pak
Industrial & |
|
| Agricultural
Investment Company (Pvt,) Ltd. The facility carries mark-up (ct) 21% p.a.
payable |
|
| biannually
commencing from December 12, 1997. Principal shall be repayable at expiry of
12 |
|
| months
from June 13, 1997. |
|
|
| The
loan is secured against (a) first charge on all leased assets of the company
of an aggregate |
|
| value
not less than RS. 10.00 million. (b) assignment of lease rentals receivable
by the company. |
|
|
| 10.
SHORT TERM CUSTOMER DEPOSITS -COls |
|
|
| Local
currency (Note: 10.1) |
|
900,000 |
14,150,000 |
|
| Foreign
currency (US $ 20,000) (Note: 10.2) |
|
802,400 |
-- |
|
|
---------- |
---------- |
|
|
1,702,400 |
14,150,000 |
|
| Current
portion of long term certificate |
|
| of
investment (Note: 8) |
|
1,000,000 |
2,100,000 |
|
|
---------- |
---------- |
|
|
2,702,400 |
16,250,000 |
|
|
========== |
========== |
|
|
| 10.1
These represents short term deposits ranges between three months to one year
accepted by the |
|
| company
from other companies and individuals in accordance with the permission to
issue |
|
| registered
certificates of deposits granted by the Corporate Law Authority. The return
is paid on |
|
| predetermined
rates as negotiated with respective customers and range from 14% to 16% p.a. |
|
|
|
| 10.2
These represents foreign currency deposits received from an individual
accepted for a term of |
|
| one
year under tile permission granted by C.L.A. and these are also approved by
S.B.P. The |
|
| company
has a foreign exchange risk covered from S.B.P. @ 40.12. The return is paid
on |
|
| predetermined
rate 6.5625% per annum. |
|
|
1997 |
1996 |
|
| 11.
DIVIDENDS |
|
Rupees |
Rupees |
|
|
| Unclaimed
dividend |
|
246,846 |
20,350 |
|
| Proposed
dividend |
|
-- |
10,454,400 |
|
|
---------- |
---------- |
|
|
246,846 |
10,474,750 |
|
|
========== |
========== |
|
| 12.
CONTINGENCIES AND COMMITMENTS |
|
|
|
| Nil
(1996: Nil) |
|
|
| 13.
TANGIBLE F1XED ASSETS |
|
| These
are for company's own use: |
|
|
|
C O S T |
|
Accumulated |
Book Value |
D E P E R E C I A T I O N |
|
|
--------------------------------- |
Depreciation |
As at |
---------------------- |
|
|
To |
|
To |
June 30, |
June 30, |
Charge for |
Rate |
|
|
July 01, |
Additions/ |
June 30, |
1997 |
1997 |
the year |
|
|
|
1996 |
(Deletions) |
1997 |
|
---------------------- |
|
|
--------------------------------- |
(R u p e e s) |
--------------------------------- |
|
|
|
| Building- freehold |
2,430,520 |
-- |
2,430,520 |
668,393 |
1,762,127 |
121,526 |
5 |
|
| leasehold
improvements |
689,651 |
-- |
689,651 |
571,696 |
117,955 |
54,436 |
15 |
|
| Air-conditioning
plant |
|
| And
electric installations |
815,330 |
12,000 |
827,330 |
703,502 |
123,828 |
54,236 |
15 |
|
| Furniture
and fixtures |
773,113 |
51,431 |
779,344 |
512,159 |
283,003 |
60,999 |
10 |
|
|
(45,200) |
|
(15,818) |
|
| Office
machine |
|
| and
equipment |
1,861,080 |
295,893 |
2,156,973 |
1,116,655 |
1,040,318 |
274,723 |
15 |
|
| Vehicles |
|
3,042,214 |
1,632,256 |
4,268,135 |
2,769,571 |
1,882,751 |
659,582 |
20 |
|
|
(406,335) |
|
(384,187) |
|
|
---------- |
---------- |
---------- |
---------- |
---------- |
---------- |
|
| 1997 |
|
9,611,908 |
1,991,580 |
11,151,953 |
6,341,976 |
5,209,982 |
1,225,502 |
|
|
(451,535) |
|
(400,005) |
|
|
========== |
========== |
========== |
========== |
========== |
========== |
|
| 1996 |
|
9,084,229 |
1,688,902 |
9,611,908 |
5,708,431 |
4,495,434 |
1,037,935 |
|
|
(l,161,223) |
|
(591,957) |
|
|
========== |
========== |
========== |
========== |
========== |
========== |
|
|
| 13.1
Detail of fixed assets sold during tile year |
|
|
|
|
|
Accumulated |
|
Sale |
Profit/ |
Mode |
Particulars |
|
| Particulars |
Cost |
Depreciation |
Value |
Proceeds |
(Loss) |
of sale |
of purchaser |
|
| Motor
Vehicle |
|
| Suzuki
Mehran |
184,157 |
162,010 |
22,147 |
182,000 |
159,853 |
Negotiation |
Mr. Amjad Aslam |
|
|
506-G Gulshan-e-Ravi,
Lahore. |
| Suzuki
Khyber |
222,178 |
222,177 |
1 |
100,000 |
99,999 |
Negotiation |
Mr. Javed Majeed Khan |
|
|
514-Z, L.C.C.H.S., |
|
|
Lahore Cantt. |
|
| Furniture
& Fixture |
|
| Residential
furniture |
45,200 |
15,818 |
29,382 |
29,382 |
-- |
Negotiation |
-do- |
|
|
---------- |
---------- |
---------- |
---------- |
---------- |
|
|
451,535 |
400,005 |
51,530 |
311,382 |
259,852 |
|
|
========== |
========== |
========== |
========== |
========== |
|
|
|
|
|
1997 |
1996 |
|
| 14.
LONG TERM INVESTMENTS |
|
Rupees |
Rupees |
|
| Government
securities |
|
| Federal
Investment Bonds (Note: 14.1) |
|
7,800,000 |
4,800,000 |
|
| Listed
companies |
|
| Muslim
Commercial Bank Ltd. (Note: 14.2) |
|
588,000 |
588,000 |
|
| Lease
Pak Limited (Note: 14.3) |
|
500,000 |
500,000 |
|
|
---------- |
---------- |
|
|
8,888,000 |
5,888,000 |
|
|
========== |
========== |
|
|
| 14.1
These investments have been made to comply with SBP's Rules of Business
(Prudential |
|
| Regulations)
for Non-Banking Financial Institutions. FIBs have face value of Rs. 7,800,000 |
|
| (1996:
Rs. 4,800,000) and their maturity period is ten years. The mark-up receivable
is 15% per |
|
| annum. |
|
|
| 14.2
This consists of 14,160 (1996:11,800) shares of Rs.10/- each in Muslim
Commercial Bank |
|
| Limited
including 2,360 bonus shares of Rs. 10/- each. The market value of these
shares as on |
|
| balance
sheet date was Rs. 463,740. No provision for diminution in value of
investment has |
|
| been
made in view of holding it on long term basis. |
|
|
| 14.3
This consists of 50,000 (1996:50,000) shares of Rs. 10/- each in Lease Pak
Limited. The market |
|
| value
of these shares as on balance sheet date was Rs. 257,500. No provision for
diminution in |
|
| value
of investment has been made in view of holding it on long term basis. |
|
|
| 15.
LONG TERM FINANCES - SECURED |
|
|
| Morabaha
finances |
|
14,503,217 |
18,952,780 |
|
| Less:
Current portion (Note: 17) |
|
(14,503,217) |
-13,463,537 |
|
|
---------- |
---------- |
|
|
-- |
5,489,243 |
|
|
========== |
========== |
|
|
| These
have been rescheduled. Rescheduled resale price has been fixed at Rs.
22,897,752 (1996: |
|
| RS.
34,033,705) repayable within one year. These are secured by demand promissory
notes and personal |
|
| guarantees
of the directors of the respective Ioanee companies. Particulars are as
follows: |
|
|
| Borrowers |
|
|
| Bilal
Fibres Ltd. |
|
9,775,516 |
12,556,753 |
|
| Sohail
Textiles Mills Ltd. |
|
4,727,701 |
6,396,027 |
|
|
---------- |
---------- |
|
|
14,503,217 |
18,952,780 |
|
|
========== |
========== |
|
| 16.
DEFERRED COSTS |
|
|
Loan |
|
|
|
negotiation |
Share issue |
Total |
Total |
|
|
expenses |
expenses |
1997 |
1996 |
|
|
Rupees |
Rupees |
Rupees |
Rupees |
|
|
|
|
| Opening
balance |
|
1,939,547 |
244,317 |
2,183,864 |
2,058,115 |
|
| Add:
Incurred during the year |
548,328 |
-- |
548,328 |
1,225,020 |
|
| Less:
amortized during the year |
(905,409) |
(92,996) |
(998,405) |
(1,099,271) |
|
|
---------- |
---------- |
---------- |
---------- |
|
|
1,582,466 |
151,321 |
1,733,787 |
2,183,864 |
|
|
========== |
========== |
========== |
========== |
|
|
|
|
|
1997 |
1996 |
|
|
Rupees |
Rupees |
|
| 17.
SHORT TERM FINANCE - SECURED |
|
| Short
term morabaha finances |
|
918,763 |
6,345,470 |
|
| Less:
Bad debts written off |
|
-- |
2,500,000 |
|
|
---------- |
---------- |
|
| Add:
Current portion of long term |
|
918,763 |
3,845,470 |
|
| morabaha
finances (Note: 15) |
|
14,503,217 |
13,463,537 |
|
|
---------- |
---------- |
|
|
15,421,980 |
17,309,007 |
|
| Less:
Provision for doubtful finance |
|
219,834 |
354,803 |
|
|
---------- |
---------- |
|
|
15,202,146 |
16,954,204 |
|
|
2,124,394 |
-- |
|
|
---------- |
---------- |
|
|
17,326,540 |
16,954,204 |
|
|
========== |
========== |
|
|
| These
have been provided under morabaha agreements with aggregate resale price of
Rs.2,442,335 |
|
| (1996:
Rs.18,437,600) repayable within one year. These are secured by demand
promissory notes and |
|
| personal
guarantees of the directors of the respective loanee companies. |
|
|
| 18.
ADVANCES, DEPOSITS, PREPAYMENTS |
|
| AND
OTHER RECEIVABLES |
|
|
| Advances
to employees |
|
510,158 |
687,221 |
|
| Advance
to Chief Executive (Note: 18.1) |
|
-- |
349,061 |
|
| Exchange
rate difference recoverable from |
|
|
|
| State
Bank of Pakistan |
|
273,909 |
273,909 |
|
| Deposits |
|
14,675 |
30,125 |
|
| Prepayments |
|
158,920 |
278,023 |
|
| Accrued
income (Note: 18.2) |
|
2,990,692 |
7,604,565 |
|
| advance
tax paid |
|
6,700,446 |
3,508,616 |
|
| Other
receivables |
|
3,699,139 |
5,438,356 |
|
|
---------- |
---------- |
|
|
14,347,939 |
18,169,876 |
|
|
========== |
========== |
|
|
| 18.1
This included the unpaid mark-up of Rs. 118,241 and the balance of loan of
Rs.230,820 due |
|
| from
tile Ex-Chief Executive which was interest free. |
|
| The
loan was secured against equitable mortgage of property and was approved by
the CLA. |
|
|
|
|
|
1997 |
1996 |
|
|
Rupees |
Rupees |
|
| 18.2
Accrued income |
|
| Long
term investment |
|
456,530 |
196,981 |
|
| Bank
deposits |
|
496,049 |
2,211,967 |
|
| On
lease operation |
|
11,876,387 |
10,510,305 |
|
| On
morabaha finances and advances |
|
264,161 |
2,985,037 |
|
|
---------- |
---------- |
|
|
13,093,127 |
15,904,290 |
|
| Less:
Bad debts-income |
|
| Lease
operations |
|
-- |
2,345,940 |
|
| Morabaha
finances |
|
-- |
1,145,260 |
|
|
|
-- |
3,491,200 |
|
| Provision
in against doubtful income |
|
| Lease
operations |
|
10,102,435 |
3,226,325 |
|
| Morabaha
finance |
|
-- |
1,582,200 |
|
|
10,102,435 |
8,299,725 |
|
|
---------- |
---------- |
|
|
2,990,692 |
7,604,565 |
|
|
========== |
========== |
|
| 19.
CASH AND BANK BALANCES |
|
|
| On
deposit accounts |
|
15,834,705 |
17,001,827 |
|
| On
current accounts (Note: 19.1) |
|
3,409,060 |
10,020,786 |
|
| Cash
in hand |
|
53,330 |
57,639 |
|
|
---------- |
---------- |
|
|
19,297,095 |
27,080,252 |
|
|
========== |
========== |
|
|
| 19.1
It includes an interest free deposit of Rs, 509,950 maintained with State
Bank of Pakistan under |
|
| Rule
6 of SBP's Rules of Business (Prudential Regulations) for Non-Banking
Financial |
|
| Institutions. |
|
|
| 20.
INCOME FROM LEASE OPERATIONS |
|
|
| Mark-up
on lease operations |
|
71,030,724 |
75,456,998 |
|
| Front
end fee |
|
833,887 |
1,325,763 |
|
| Commitment
fee |
|
153,743 |
191,415 |
|
|
---------- |
---------- |
|
|
72,018,354 |
76,974,176 |
|
|
========== |
========== |
|
| 21.
MARK-UP INCOME |
|
| Federal
Investment Bonds |
|
953,506 |
471,093 |
|
| Banks
deposits |
|
3,783,734 |
4,224,374 |
|
| Morabaha
finance |
|
3,909,544 |
6,911,215 |
|
| Advance
against leases |
|
56,812 |
1,068,513 |
|
|
---------- |
---------- |
|
|
8,703,596 |
12,675,195 |
|
|
========== |
========== |
|
|
|
|
| 22.
OTHER INCOME |
|
|
|
|
| Miscellaneous
and Documentation charges recovered |
628,058 |
657,662 |
|
| Profit
on sale of fixed assets (Note 13.1) |
|
259,852 |
159,468 |
|
|
---------- |
---------- |
|
|
887,910 |
817,130 |
|
|
========== |
========== |
|
| 23.
DIRECT COST OF LEASES |
|
|
| Lease
executory expenses |
|
54,397 |
60,671 |
|
| Insurance
expenses - Leased vehicles |
|
25,155 |
54,783 |
|
|
---------- |
---------- |
|
|
79,552 |
115,454 |
|
|
========== |
========== |
|
| 24.
FINANCIAL CHARGES |
|
|
|
|
| Mark-up
on long term secured loans |
|
32,772,553 |
49,235,163 |
|
| Mark-up
on short term secured loans |
|
1,879,250 |
1,823,896 |
|
| Mark-up
on certificates of investment |
|
2,731,159 |
1,609,006 |
|
| Foreign
exchange risk coverage fee |
|
7,845,575 |
-- |
|
| Excise
duty on loan |
|
68,034 |
-- |
|
|
---------- |
---------- |
|
|
45,296,571 |
52,668,065 |
|
|
========== |
========== |
|
| 25.
ADMINISTRATIVE AND OPERATING EXPENSES |
|
|
| Salaries
and benefits |
|
6,982,483 |
5,347,013 |
|
| Rent |
|
359,890 |
302,689 |
|
| Utilities |
|
364,928 |
307,938 |
|
| Stationery
and supplies |
|
474,577 |
365,479 |
|
| Repairs
and maintenance |
|
740,400 |
481,966 |
|
| Insurance |
|
257,832 |
238,858 |
|
| Telephone,
telex and postage |
|
815,502 |
674,110 |
|
| Travelling |
|
219,032 |
150,835 |
|
| Boarding
and lodging |
|
133,795 |
378,837 |
|
| Legal
and professional charges |
|
370,988 |
386,570 |
|
| Advertisement |
|
158,000 |
222,640 |
|
| Auditors'
remuneration (Note: 25.1) |
|
146,000 |
126,611 |
|
| Donations
(Note: 25.2) |
|
18,800 |
12,700 |
|
| Corporate
expenses |
|
199,451 |
170,990 |
|
| Zakat |
|
1,778 |
3,699 |
|
| Other
expenses |
|
1,016,452 |
893,296 |
|
| Credit
rating fee |
|
134,417 |
130,500 |
|
| Penalty,
levied by State Bank of Pakistan |
|
1,150 |
-- |
|
|
---------- |
---------- |
|
|
12,395,475 |
10,194,731 |
|
|
========== |
========== |
|
| 25.1
Auditors' Remuneration |
|
|
|
|
| Audit fee |
|
60,500 |
55,000 |
|
| Tax
consultancy |
|
-- |
20,000 |
|
| Special
audits |
|
71,500 |
35,000 |
|
| Expenses
reimbursed |
|
14,000 |
16,611 |
|
|
---------- |
---------- |
|
|
146,000 |
126,611 |
|
|
========== |
========== |
|
|
| 25.2
None of the directors or their spouses had ally interest in any of the
donees. |
|
|
| 26.
TAXATION |
|
| Provision
for the year |
|
| - Normal |
|
19,500,000 |
9,400,000 |
|
|
========== |
========== |
|
| 26.1
Tax provision is based on taxable profits as adjusted for tax purposes after
taking into account |
|
| available
rebates and credits. |
|
|
| 26.2
Deferred taxation arising due to timing differences computed under the
liability method is |
|
| estimated
at Rs. 31.55 million out of which Rs. 14.47 million debit is in respect of
the current |
|
| year
(1996: Rs.46 million for the period 5.6 million debi0. |
|
|
| 27.
REMUNERATION OF CHIEF EXECUTIVE, DIRECTORS AND EXECUTIVES |
|
|
Chief Executive |
|
Executives |
|
|
|
----------------------- |
----------------------- |
|
|
1997 |
1996 |
1997 |
1996 |
|
|
Rupees |
Rupees |
Rupees |
Rupees |
|
|
----------------------- |
----------------------- |
|
| Managerial
remuneration |
623,053 |
540,000 |
453,700 |
180,000 |
|
| Bonus |
|
45,000 |
90,000 |
37,600 |
30,000 |
|
| Accommodation |
|
246,043 |
216,000 |
317,590 |
126,000 |
|
| Utilities |
|
160,935 |
60,000 |
93,588 |
17,400 |
|
| Medical
expenses |
|
31,714 |
34,737 |
71,667 |
21,855 |
|
| Club
subscription |
|
7,002 |
12,143 |
5,416 |
5,015 |
|
| Conveyance
provided |
|
271,277 |
183,974 |
135,590 |
93,894 |
|
| Residential telephone Bills |
|
| reimbursed |
|
30,250 |
29,938 |
20,258 |
6,925 |
|
|
---------- |
---------- |
---------- |
---------- |
|
|
1,415,274 |
1,166,792 |
1,135,409 |
481,089 |
|
|
========== |
========== |
========== |
========== |
|
| Number
of persons |
|
1 |
1 |
3 |
2 |
|
|
========== |
========== |
========== |
========== |
|
|
| Fees
paid to 5 non-executive Directors for attending meetings during the year Rs.
40,500 (1996:5 |
|
| Directors;
fee paid Rs. 40,000). |
|
|
| 28.
LEASES AND ADVANCES IN EXCESS OF 20% OF |
|
| PAID-UP
CAPITAL AND FREE RESERVES |
|
|
| Following
.are the parties to whom net investment in lease finance exceeded 20% (i.e.
Rs. 25,622,330) of |
|
| the
paid-up capital and free reserves of the company: |
|
|
|
1997 |
1996 |
|
|
Rupees |
Rupees |
|
| Group name |
|
|
| Nishat
group |
|
-- |
28,266,726 |
|
| Chakwal
group |
|
29,451,242 |
-- |
|
|
| 29.
GENERAL |
|
|
| -
Previous year's figures have been re-arranged wherever necessary for the
purposes of comparison. |
|
|
| -
Whilst the immediately preceding audited accounts were for the eighteen
months ended June 30, |
|
| 1996,
un-audited figures for the 12 months ended on that date have been used for
the purposes of |
|
| more
appropriate comparison. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
