| ATLAS LEASE LIMITED |
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| ANNUAL REPORT 1997 |
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| Constantly
endeavour |
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| to
contribute towards |
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| economic
development |
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| of the Country. Lead |
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| the
industry by |
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| providing
quality |
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| service
to customers |
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| and
ensure continuous |
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| growth in the |
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| shareholders'
value |
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| through
a youthful goal |
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| oriented
team. |
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| CONTENTS |
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| Corporate
Data |
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| Notice
of Meeting |
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| Directors'
Report |
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| Chairman's
Review |
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| Pattern
of Shareholding |
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| Financial
Highlights |
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| Graphic
Presentation |
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| Auditors'
Report |
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| Balance Sheet |
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| Profit
and Loss Account |
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| Cash
Flow Statement |
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| Notes
to the Accounts |
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| Atlas
Group Companies |
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| CORPORATE
DATA |
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| BOARD
OF DIRECTORS: |
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| CHAIRMAN |
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| Mr.
Yusuf H. Shirazi |
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| CHIEF
EXECUTIVE |
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| Mr.
Khaleeq-ur-Rahman Khan |
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| MEMBERS |
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| Mr.
A.K.M. Sayeed |
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| Mr.
Iftikhar H. Shirazi |
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| Mr.
Kenichi Nakagawa |
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| Mr.
Razi-ur-Rahman Khan |
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| Mr.
Sanaullah Qureshi |
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| Mr.
Toshiki Miyazaki |
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| COMPANY
SECRETARY |
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| Mr.
Muhammad Rafique Umer |
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| GROUP
EXECUTIVE COMMITTEE: |
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| CHAIRMAN |
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| Mr.
Yusuf H. Shirazi |
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| MEMBERS |
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| Mr.
Jawaid Iqbal Ahmed |
|
| Mr.
Frahim Ali Khan |
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| Mr.
Iftikhar H. Shirazi |
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| Mr.
Aamir H. Shirazi |
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| Mr.
Saquib H. Shirazi |
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| SECRETARY |
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| Mr.
Amjad Hussain |
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| GROUP
PERSONNEL COMMITTEE: |
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| CHAIRMAN |
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| Mr.
Yusuf H. Shirazi |
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| GROUP
AUDIT COMMITTEE: |
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| CHAIRMAN |
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| Mr.
Sanaullah Qureshi |
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| AUDITORS: |
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| Ford,
Rhodes, Robson, Morrow |
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| Chartered
Accountants |
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| LEGAL
ADVISORS: |
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| Mohsin
Tayebaly & Co. |
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| BANKERS
& LENDING INSTITUTIONS: |
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| BANKERS: |
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| ABN AMRO Bank |
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| Allied
Bank of Pakistan Limited |
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| ANZ
Grindlays Bank plc |
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| Askari
Commercial Bank Limited |
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| Faysal
Bank Limited |
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| Habib
Bank AG Zurich |
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| Habib
Bank Limited |
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| Standard
Chartered Bank |
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| The
Bank of Tokyo-Mitsubishi, Limited |
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| The
Hongkong and Shanghai Banking Corporation |
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| United
Bank Limited |
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| LENDING
INSTITUTIONS: |
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| AI-Faysal
Investment Bank Ltd. |
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| Asian
Development Bank (ADB) |
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| Commonwealth
Development Corporation (CDC) |
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| First
International Investment Bank Ltd. |
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| German
Investment and Development Company (DEG) |
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| International
Finance Corporation (IFC) |
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| National
Discounting Services Ltd. |
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| Netherlands
Development Finance Company (FMO) |
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| Pakistan
Kuwait Inv. Co. (Pvt.) Ltd. |
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| Saudi
Pak Industrial & Agricultural Inv. Co. (Pvt.) Ltd. |
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| REGISTERED
OFFICE & HEAD OFFICE ' |
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| Federation
House, Sharae Firdousi, |
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| Clifton,
Karachi - 75600 |
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| Tel:
(92-21) 5866817 - 20, 5866919 - 20 Fax: 5870543 |
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| E-mail:
all @atlasgrouppk.com
~'-~J |
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| atlasl
@ paknet3.ptc.pk |
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| BRANCH OFFICES: |
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| LAHORE
OFFICE: |
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| 1st
Floor, Emirates Bank Building, |
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| 14
- Egerton Road, Lahore
~, , |
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| Tel:
(92-42) 6366170 - 74,6364941 Fax: 6365058 |
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| ISLAMABAD
OFFICE: |
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| 2nd
Floor, Saudi Pak Tower, |
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| Blue
Area, Islamabad |
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| Tel:
(92-51) 824906, 824909 Fax: 821377 |
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| NOTICE
OF MEETING |
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| Notice
is hereby given that the Tenth Annual General Meeting of the members of ATLAS
LEASE |
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| LIMITED
will be held on Thursday the November 20, 1997 at 11.00 a.m. at Registered
Office of the |
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| Company
at Federation House, Sharae Firdousi, Clifton, Karachi to transact the
following |
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| business: |
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| ORDINARY BUSINESS: |
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| 1.
To confirm the Minutes of the last Extra-ordinary General Meeting held on
April 29, 1997. |
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| 2.
To receive, consider and adopt the Audited Accounts of the Company for the
year ended |
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| June
30, 1997 together with the Directors' and Auditors' Report thereon. |
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| 3.
To appoint Auditors and fix their remuneration for the year 1997-98. The
retiring Auditors |
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| M/s.
Ford, Rhodes, Robson, Morrow, Chartered Accountants, being eligible, offer
them- |
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| selves
for reappointment. |
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| SPECIAL
BUSINESS: |
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| 4.
To approve the remuneration of the Chief Executive and the working Director. |
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| OTHER BUSINESS: |
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| 5.
To transact any other business as may be placed before the meeting with the
permission of |
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| the Chair. |
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|
| A
statement under section 160 of the Companies Ordinance, 1984 pertaining to
the Special |
|
| Business
referred to above is annexed to this Notice of Meeting. |
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| NOTES: |
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| i)
The Register of Members of the Company will remain closed from 14/11/1997 to |
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| 20/11/1997
(both days inclusive). |
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| ii)
A member entitled to attend and vote at this meeting may appoint another
member as his / |
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| her
proxy to attend and vote on his / her behalf. The instrument appointing a
Proxy and the |
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| power
of attorney or other authority under which it is signed or a notarially
certified copy of |
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| the
power of authority must be received at the Registered Office of the company
duly |
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| stamped,
signed and witnessed not later than 48 hours before the meeting. A form of
Proxy |
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| is enclosed. |
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| iii)
Members are requested to notify any change in their addresses immediately. |
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| STATEMENT
UNDER SECTION 160 OF THE COMPANIES ORDINANCE,1984 |
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| This
statement sets out the material facts concerning the Special Business to be
transacted at the |
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| Tenth
Annual General Meeting of Atlas Lease Limited to be held on November 20,
1997. |
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| Approval
of the shareholders will be sought for the remuneration payable to the Chief
Executive |
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| and
working Director in accordance with their terms and conditions of service.
For this purpose, it |
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| is
intended to pass following resolution as an Ordinary Resolution, namely · |
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| RESOLVED |
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| "that
the Company hereby authorises the holding of offices of profit and payment as
remuneration |
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| to
Mr. Khaleeq-ur-Rahman Khan, Chief Executive and Mr. Iftikhar H. Shirazi,
working Director, not |
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| exceeding
in the aggregate Rs.4.0 million per annum for the year ending June 30, 1998
together |
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| with
other benefits as per Company policy." |
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| The
Chief Executive and the working Director are interested in the remuneration
payable to them. |
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| DIRECTORS'
REPORT |
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| The
Directors have pleasure in submitting Annual Report of the Company together
with the |
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| Audited
Accounts and the Auditors' Report thereon for the year ended June 30, 1997. |
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|
| Financial
Results: |
|
1997 |
1 996 |
|
|
Rupees |
Rupees |
|
|
---------- |
---------- |
|
| Net
profit for the year after charging all |
|
| expenses
and doubtful debts |
|
17,722,779 |
41,733,087 |
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| Previous
profit brought forward |
35,731 |
81,234 |
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|
---------- |
---------- |
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| Profit
available for appropriation |
17,758,510 |
41,81 4,321 |
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| Appropriations: |
|
---------- |
---------- |
|
| Transfer
to Statutory Reserve |
3,544,556 |
- |
|
| Transfer
to General Reserve |
|
10,000,000 |
26,000,000 |
|
| Cash dividend |
|
- |
15,778,590 |
|
|
---------- |
---------- |
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|
13,544,556 |
41,778,590 |
|
|
---------- |
---------- |
|
| Unappropriated
profit carried forward |
4,213,954 |
35,731 |
|
|
========== |
========== |
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| Chairman's Review: |
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| The
accompanying Chairman's Review deals with the performance of the Company
during the |
|
| year
and future outlook. The Directors of the Company endorse the contents of the
review. |
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|
| Pattern
of Shareholding: |
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| The
pattern of shareholding of the Company is annexed. |
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|
| Auditors |
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| The
present Auditors Messrs. Ford, Rhodes, Robson, Morrow, Chartered Accountants
retire and |
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| being
eligible offer themselves for reappointment. |
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|
|
| CHAIRMAN'S
REVIEW |
|
| I
have the pleasure to present the 10th Annual |
January and February
1997. The Karachi Stock |
|
| Report
of your Company for the year ended |
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Exchange-100 index which
was 1703 at the |
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| June
30, 1997. |
|
start of the year dropped
to 1565 during the |
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| During
the year under review, your company |
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| made
net profit after tax of Rs.17.72 million as |
THE GROUP PERFORMANCE |
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| compared
to Rs.41.73 million last year. The |
The Atlas Group, of which
your company is a |
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| fall
in profit was mainly due to a disputed extra |
constituent member,
relies on intellectual |
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| ordinarychargeofRs.19.92millionbytheState |
|
capital. Harmonizing
human capital, owners |
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| Bank
of Pakistan relating to Foreign Exchange |
capital and market
capital i.e. the Group image |
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| Cover
Fee payment. |
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at the government,
business and international |
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|
levels - remaining within
the bounds of law, |
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|
is our |
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| THE ECONOMY |
|
entrepreneural brand
equity. |
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| The
country's economy did not fare well. The |
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| GDP
growth rate declined to 3.1% from 4.6% |
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| of
the last year. In Agriculture sector, it was |
The Atlas Group is a
diversified group dealing |
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| down
to 0.7% compared to 5.3% of the previous |
in engineering, financial
services, trading, office |
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| year.
The growth rate in manufacturing sector |
equipment and information
technology. It |
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| fell
down to 1.8% against 4.4% of the last year. |
consists of seven public
limited companies |
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| The
large scale manufacturing registered a |
|
quoted on the stock
exchanges in Pakistan and |
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| decline
of1.4%. Heavier taxation, higher costs |
six private limited
companies. Atlas |
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| of
raw materials, loans and utilities were the |
shareholders equity has
grown to Rs. 2 billion |
|
| main
reasons, which impeded the growth of |
|
over the years; assets
have increased to over |
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| the
industrial sector. |
|
Rs. 8 billion; personnel
strength is over 2500 ': |
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|
and sales have crossed
the Rs. 8 billion mark. |
|
| Despite
imposition of additional taxes of |
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| Rs.40.8
billion in the budget 1996-97 and |
|
The group paid taxes of
Rs. 2.4 billion being |
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| further
Rs.13.0 billion through another |
|
30% of the total turnover
and your company's |
|
| package
announced in October 1996, the fiscal |
share of Rs.5.11 million
being 2% of its total |
|
| deficit
widened to 6.2% of GDP as against |
|
revenue. |
|
| budgeted
target of 4.0%. The high deficit |
|
| financing
at 6.3% had corresponding |
|
The total Paid-up capital
of 7 listed companies |
|
| inflationary
impact of 11.6%. As a result the |
stood at Rs. 855 million
and free reserves and |
|
| Balance
of Payment came under pressure |
|
surplus at Rs. 903
million: the total equity in |
|
| during
the year. The exports decreased by |
|
listed companies was at
Rs. 1,758 million. The |
|
| 5.4%,
imports decreased at 1.47% and the |
|
Break-up Value per
Rs.10/- worked out to Rs. |
|
| trade
deficit increased to $3.37 billion. High |
20.56. Out of these 7
companies, two |
|
| rates
of interest-upto 23%, kept the economy |
companies have been rated
'A+' and three 'A' |
|
| depressed. |
|
|
by the credit rating and
other evaluating |
|
|
agencies. Your company is
among the 'A' rated |
|
|
companies. Your company
is also among the |
|
| The
slowdown of the economy was also |
|
top 6 leasing companies
and ranked 1.6 amon9 |
|
| reflected
in the quantum index numbers for |
|
205 financial companies
(out of total 782 |
|
| import
of machinery and transport equipment. |
companies) listed on the
Karachi Stock |
|
| In
the first three quarters of 1995-96, the index |
Exchange. |
|
| numbers
were 344.5, 206.6 and 247.3 for the |
|
| respective
quarters. These figures were |
|
The seven companies, set
up at different times |
|
| drastically
down for 1996-97 and stood at |
|
- the earliest in 1963
with a paid up capital of |
|
| 191.1,
186.4 and 146.5 respectively. The |
|
Rs. 2.0 million and the
latest in 1993 with a |
|
| general
wholesale price index and the general |
paid up capital of Rs.
400.0 million - have paid |
|
| consumer
price index kept rising and stood at |
cash dividend of Rs.
244.28 million and bonus |
|
| 207.76
and 196.96 respectively (base: 1990- |
at Rs. 166.55 million
(market value Rs. 404.43 |
|
| 91=100).
The equity market remained |
|
million) against the
paid-up capital of |
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| depressed
with short lived spurts during |
|
Rs.855.15 million upto
the year under review. |
|
|
| Your
company was set up in 1989 with a paid |
the market penetration at
a low level. The credit |
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| up
capital of Rs. 20.00 million which has grown |
risk is a necessary
element in the leasing |
|
| to
Rs. 105.19 million. The total equity is at Rs. |
business. It can not be
avoided. But a lot of |
|
| 213.77
million which includes reserves and |
|
hastle, time and money,
can be saved which is |
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| unappropriated
profit of Rs. 108.58 million. |
spent on follow up of
recovery, re-structuring |
|
| During
this period, your company made right |
and re-scheduling leases,
and finally ending |
|
| issues
at par of Rs. 30.00 million in 1990 and |
up in unnecessary time
spent and loss of |
|
| Rs.
33.27 million in 1995. It has paid dividend |
money in the courts. If
our court procedures |
|
| of
Rs. 38.98 million and bonus Rs. 16.55million |
are improved and recovery
is made speedy |
|
| (market
value Rs. 43.03 million) against the |
through the courts of
law, it will help the industry |
|
| shareholders'
investment of Rs. 94.46 million. |
a lot. If, for example,
it is made mandatory/for |
|
|
lessors and lessees that
the lessors will receive |
|
| THE
LEASING INDUSTRY |
|
cheques from the lessees
in advance for the |
|
| Presently
32 Leasing Companies having a total |
entire lease rentals and
the bouncing of |
|
| paid-up capital
of Rs.4.3 billion (equity Rs. 6.9 |
cheques will be treated
as a criminal offence |
|
| billion),
are operating in the country. Besides, |
and the punishment awarded within a
fortnight |
|
| there
are over 34 Modarabas having a total |
|
on the evidence of the
bounced cheque, the |
|
| paid-up
capital of Rs. 5.97 billion (equity |
defaults will
tremendously go down. |
|
| Rs.
6.59 billion), 15 investment banks having a |
The industry is also
facing the problem of |
|
| total paid-up
capital of Rs. 3.15 billion (equity |
double taxation on sale
and leaseback |
|
| Rs. 4.55 billion) and 14
Commercial Banks |
|
transactions and
with-holding tax. This needs |
|
| having
a total paid-up capita! of Rs. 8.25 billion |
an early redressal. |
|
| (equity
Rs. 14.81 billion), which are also |
|
| engaged
in leasing business directly or |
|
THE COMPANY'S RESULTS |
|
| indirectly.
The total outstanding lease portfolio |
|
| amounts
to Rs.20 billion. The market |
|
During-the year under
review, your |
|
| penetration
is still only 7% which is low. The |
company disbursed new
leases of Rs.587.04 |
|
| two
main limiting factors, i.e. non-availability of |
million. Net investment
in lease finance thus |
|
| funds
and rising risk of defaults, are keeping |
increased from
Rs.1,659.58 million in June |
|
| 1996
to Rs.1,849.13 million in June 1997, up |
Similarly the loan of US$
10.0 million |
|
| 11.42%.
The lease portfolio comprised of |
|
sanctioned by ADB was
also. fully drawn in the |
|
| 62.70%
in machinery, 34.37% in vehicles and |
second half. Additional
financial arrangements |
|
| 2.93%
in office equipment. The sectoral |
|
of Rs.115.0 million in
the form of Demand/Term |
|
| exposure
at the end of the year stood fairly |
Finances, Morabaha,
Promissory Discount |
|
| diversified,
comprising of 15.10% investment |
Notes and enhancement of
Running Finance |
|
| in
textile, 12.84% in chemical, fertilizer & |
facilities have been
negotiated with different |
|
| pharmaceuticals,
9.78% in cement, 8.58% in |
|
financial institutions
locally. These funds |
|
| steel,
engineering & automobiles, 7.41% in |
|
would be available in the
current year. Other |
|
| food,
tobacco & beverages and 6.94% in |
|
areas of resource
mobilization are also being |
|
| electrical
& electronic goods. |
|
considered. |
|
|
| The
revenue for the year under review at |
|
HUMAN RESOURCE |
|
| Rs.324.71
million, was 13.6% higher than |
|
Investment in people and
human resource |
|
| Rs.285.87
million in the previous year. The |
development in the Atlas
Group is a continuous |
|
| financial
charges at Rs.242.42 million were |
process. We send people
for higher education |
|
| 20.6%
higher than Rs.200.95 million in the |
|
and training to such
institutions as Harvard |
|
| previous
year. The administrative expenses |
|
Business School,
Stanford, The Wharton |
|
| rose
by 5.7% from Rs.28.57 million to Rs.30.22 |
School of Finance and
Economics, INSEAD, |
|
| million.
The profit before tax and extra ordinary |
Claremont, IMD, Notre
Dame, Eton College, |
|
| charge
by State Bank of Pakistan stood at |
|
IBA, LUMS, PIM, etc. All
the members of our |
|
| Rs.44.56
million compared with Rs.43.18 |
|
senior management team
have had exposure |
|
| million
of tile previous year. During the year |
to such institutions. The
others have had |
|
| the
State Bank of Pakistan charged Rs.19.92 |
exposure to various other
institutions of related |
|
| million
for late payment of Exchange Risk |
|
field of interest and
technology in and outside |
|
| Cover
Fee in connection with the loans |
|
the country. |
|
| registered-under
the Exchange Risk Coverage |
|
| Scheme.
Although the company was paying |
|
The group manpower
includes 152 employees |
|
| excess
amount at the time of loan installment |
with service of over 25
years, 232 with over 20 |
|
| remittance
which was accumulating with the |
|
years, 575 with over 15
years, and .753 with |
|
| State
Bank of Pakistan, and infact the State |
over 10 years service.
Among them, 153 are |
|
| Bank
of Pakistan had made a refund after |
|
post graduates, 493
graduates and the rest |
|
| deducting
the Exchange Cover Fee and the |
|
diploma holders,
intermediates, matriculates |
|
| additional
charge of Rs.19.92 million, yet the |
and skilled workers.
Group employees turnover |
|
| payment
was considered late. The matter is |
|
is around 5%. |
|
| being
followed up at appropriate level to seek |
|
| redressal.
Thus, after providing for tax and the |
Your company started with
a staff of 6 persons |
|
| extra
ordinary charge by the State Bank of |
|
in 1989. The number has
now increased to 49 |
|
| Pakistan,
the net profit stood at Rs.17.72 million |
persons by June 30, 1997.
As a policy the |
|
| as
compared with Rs.41.73 million last year. |
number of staff is
maintained at a low level with |
|
| The
profit situation would have been better but |
emphasis on employing
well-qualified and |
|
| for
the extra ordinary charge as explained |
|
skilled persons.
Presently, the staff include 1 |
|
| above. |
|
Chartered Accountant, 8
MBAs, 8 Post- |
|
|
graduates and 21
Graduates. |
|
| FUNDING |
|
| Your
company had two approved foreign |
|
CHANGE IN THE BOARD OF
DIRECTORS |
|
| currency
credit lines in hand. Out of the |
|
Mr. H. Sasaki, on
relinquishing charge as the |
|
| approved
loan of NLG 10.0 million (equivalent |
Deputy General Manager of
The Bank of Tokyo- |
|
| to
US$ 5.8 million) from Netherlands |
|
Mitsubishi Ltd, Karachi
was replaced by Mr. T. |
|
| Development
Finance Company (FMO), the |
|
Miyazaki on December 21,
1996. May I place |
|
| first
tranche of US$ 3.0 million was drawn in |
on record appreciation
for the contribution |
|
| the
first half of the year under review, whereas |
made by Mr. Sasaki and
welcome Mr. Miyazaki |
|
| the
second tranche of US$ 2.8 million was |
|
on the Board and look
forward to his support in |
|
| drawn
in the beginning of the second half. |
|
managing the affairs of
your Company. |
|
|
| FUTURE
OUTLOOK |
|
strategies in place and
your company is fully |
|
| The
economy of the country is showing signs |
geared to take advantage
of improved situation. |
|
| of
improvement due to steps being taken by |
|
| the
Government to reinvigorate the business |
There is none of the
despairs: |
|
| sector
and improve the investment climate in |
there are hopes - hopes,
full of bright future. |
|
| the
country. The steps to bring interest rates |
Limited |
|
| down
and increase liquidity in the money market |
|
| will
also help. The Government has announced |
ACKNOWLEDGMENTS |
|
| packages
for different sectors of business to |
I would like to thank the
Bank of Tokyo- |
|
| provide
tax relief as well as an environment |
Mitsubishi and the NIT
for their advice and |
|
| which
is friendly to business growth. In view of |
guidance provided to the
management of your |
|
| these
measures, the economy should pick up |
|
Company. Thanks are also
due to the financial |
|
| soon. |
|
institutions for their
help and support and all |
|
|
the clients for reposing
confidence in your |
|
| On
the other hand, our efforts to improve |
|
company. I also thank the
Group Executive |
|
| productivity,
credit evaluation, close monitoring |
Committee and the Chief
Executive and his |
|
| of
the portfolio, strengthening research & |
|
team and all the staff
members for their devotion |
|
| development
base, exploring cheaper sources |
and hard work. |
|
| of
funds, controlling operating expenses, and |
|
| developing
staff's level of competence are the |
|
|
|
| PATTERN
OF SHAREHOLDING |
|
| AS
AT JUNE 30, 1997 |
|
|
|
| ---------- |
---------- |
---------- |
---------- |
---------- |
|
| Number of |
|
Shareholding |
|
Total |
|
| Shareholders |
From |
|
To |
Shares Held |
|
| ---------- |
---------- |
---------- |
---------- |
---------- |
|
| 28 |
1 |
- |
100 |
1,520 |
|
| 34 |
101 |
- |
500 |
8,817 |
|
| 27 |
501 |
- |
1,000 |
22,824 |
|
| 64 |
1,001 |
- |
5,000 |
156,048 |
|
| 4 |
5,001 |
- |
10,000 |
37,915 |
|
| 4 |
10,001 |
- |
15,000 |
45,270 |
|
| 2 |
15,001 |
- |
20,000 |
36,800 |
|
| 1 |
20,001 |
- |
25,000 |
22,959 |
|
| 1 |
25,001 |
- |
30,000 |
28,749 |
|
| 2 |
50,001 |
- |
55,000 |
107,406 |
|
| 1 |
95,001 |
- |
100,000 |
99,825 |
|
| 2 |
150,001 |
- |
155,000 |
305,878 |
|
| 1 |
175,001 |
- |
180,000 |
175,125 |
|
| 1 |
215,001 |
- |
220,000 |
220,000 |
|
| 1 |
265,001 |
- |
270,000 |
267,043 |
|
| 1 |
275,001 |
- |
280,000 |
280,000 |
|
| 1 |
295,001 |
- |
300,000 |
300,000 |
|
| 1 |
380,001 |
- |
385,000 |
382,000 |
|
| 1 |
440,001 |
- |
445,000 |
442,557 |
|
| 1 |
500,001 |
- |
505,000 |
502,461 |
|
| 1 |
535,001 |
- |
540,000 |
536,560 |
|
| 4 |
840,001 |
- |
845,000 |
3,364,083 |
|
| 1 |
885,001 |
- |
890,000 |
888,442 |
|
| 1 |
2,285,001 |
- |
2,290,000 |
2,286,778 |
|
| ---------- |
---------- |
---------- |
---------- |
---------- |
|
| 185 |
|
TOTAL |
|
10,519,060 |
|
| ---------- |
---------- |
---------- |
---------- |
---------- |
|
|
|
| The slabs representing NIL holding have been
omitted. |
|
| ---------- |
---------- |
---------- |
---------- |
---------- |
|
| Categories of |
|
Number of |
Number of |
Percentage of |
|
| Shareholders |
|
Shareholders |
Shares held |
Shares held |
|
| ---------- |
---------- |
---------- |
---------- |
---------- |
|
| 1.
Individuals |
164 |
5,189,975 |
49.34 |
|
| 2.
Investment Companies |
4 |
766,504 |
7.29 |
|
| 3.
Insurance Companies |
1 |
28,749 |
0.27 |
|
| 4.
Joint Stock Companies |
9 |
99,489 |
0.95 |
|
| 5.
Financial Institutions |
3 |
2,555,083 |
24.29 |
|
| 6.
Modaraba Companies |
1 |
11,701 |
0.11 |
|
| 7.
Foreign Investors |
3 |
1,867,559 |
17.75 |
|
| ---------- |
---------- |
---------- |
---------- |
---------- |
|
| TOTAL |
|
185 |
10,519,060 |
100.00 |
|
| ---------- |
---------- |
---------- |
---------- |
---------- |
|
|
|
|
|
| FINANCIAL
HIGHLIGHTS (1990 - 1997) |
|
| ---------- |
---------- |
---------- |
---------- |
---------- |
---------- |
---------- |
---------- |
---------- |
---------- |
---------- |
|
|
(Rupees in million) |
|
|
|
1990 |
1991 |
1992 |
1993 |
1994 |
1995 |
1996 |
1997 |
|
| FINANCIAL
POSITION |
|
---------- |
---------- |
---------- |
---------- |
---------- |
---------- |
---------- |
---------- |
|
|
|
|
|
| Authorised
Capital |
|
50.00 |
10,000 |
100.00 |
100.00 |
10,000 |
100.00 |
200.00 |
200.00 |
|
| Paid-up
Capital |
|
20.00 |
50.00 |
50.00 |
55.00 |
60.50 |
66.55 |
105.19 |
105.19 |
|
| Reserves
& Surplus |
|
1.23 |
9.82 |
19.20 |
26.90 |
39.58 |
59.08 |
90.86 |
108.58 |
|
| Shareholders'
Equity |
|
21.23 |
59.82 |
69.20 |
81.90 |
100.08 |
125.63 |
196.05 |
213.77 |
|
| Long
Term Loans-Foreign |
|
- |
- |
131.32 |
461.17 |
601.40 |
815.64 |
746.46 |
1,226.45 |
|
| Long
Term Loans- Local |
|
- |
20.00 |
70.00 |
47.98 |
43.44 |
95.33 |
37.40 |
10.56 |
|
| Certificates
of Investment |
|
- |
- |
- |
0.98 |
10.92 |
80.81 |
336.32 |
275.00 |
|
| Operating
Fixed Assets |
|
2.83 |
3.26 |
5.86 |
9.73 |
13.76 |
13.83 |
17.51 |
16.20 |
|
| Net
Investment in Lease |
|
106.73 |
305.01 |
551.89 |
740.02 |
973.03 |
1,269.81 |
1,659.58 |
1,849.13 |
|
| Total Assets |
|
114.44 |
310.65 |
569.06 |
810.08 |
1,018.56 |
1,402.64 |
1,804.66 |
2,206.17 |
|
| OPERATING
POSITION |
|
|
|
| Lease
Disbursements |
|
118.97 |
250.13 |
376.83 |
396:69 |
493.57 |
610.42 |
713.69 |
587.04 |
|
| Income
from leasing Operations |
9.85 |
36.81 |
82.03 |
130.93 |
159.52 |
204.14 |
273.81 |
312.95 |
|
| Total
Expenses |
|
9.17 |
28.54 |
68.57 |
111.91 |
143.54 |
181.65 |
242.69 |
280.15 |
|
| Profit
Before Taxation |
|
1.85 |
8.59 |
14.39 |
20.78 |
26.34 |
33.38 |
43.18 |
24.63 |
|
| Profit
After Taxation |
|
1.85 |
8.59 |
14.39 |
18.20 |
24.23 |
32.21 |
41.73 |
1,772 |
|
| Earning
per share (in Rupees) |
0.93 |
1.72 |
2.88 |
3.31 |
4.00 |
4.84 |
3.97 |
1.68 |
|
| Return
on Equity (in percentage) |
8.73 |
14.35 |
20.79 |
22.22 |
24.21 |
25.64 |
21.29 |
8.29 |
|
|
|
|
| Book
value per share (in Rupees) |
10.61 |
11.96 |
13.84 |
14.89 |
16.54 |
18.88 |
18.64 |
20.32 |
|
|
---------- |
---------- |
---------- |
---------- |
---------- |
---------- |
---------- |
---------- |
|
| DISTRIBUTION |
|
| Cash Dividend |
|
- |
- |
10% |
10% |
10% |
10% |
15% |
- |
|
| Stock
Dividend |
|
- |
- |
10% |
10% |
10% |
- |
- |
- |
|
|
---------- |
---------- |
---------- |
---------- |
---------- |
---------- |
---------- |
---------- |
|
| Total |
|
- |
- |
20% |
20% |
20% |
10% |
15% |
- |
|
|
|
|
| RIGHT ISSUE |
|
150% |
- |
- |
- |
- |
50% |
- |
- |
|
|
---------- |
---------- |
---------- |
---------- |
---------- |
---------- |
---------- |
---------- |
|
|
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
| We
have audited the annexed balance sheet of ATLAS LEASE LIMITED as at June 30,
1997 and |
|
| the
related profit and loss account and cash flow statement, 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 books of account have been kept by the company as
required by the |
|
| Companies
Ordinance, 1984; |
|
|
| (b)
in our opinion: |
|
|
| (i)
the balance sheet and profit and loss account together with the notes thereon
have |
|
| been
drawn up in conformity with the Companies Ordinance, 1984 and are in agree- |
|
| ment
with the books of account and are further in accordance with accounting poli- |
|
| cies
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 cash flow statement,
together with ~--~ |
|
| the
notes forming part thereof, give the information required by the Companies
Ordinance, ~_~ |
|
| 1984
in the manner so required and respectively give a true and fair view of the
state of the |
|
| company's
affairs as at June 30, 1997 and of the profit and of the cash flows 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. |
|
|
| Karachi:
October 06,1997 |
|
Ford, Rhodes, Robson,
Morrow |
|
|
Chartered Accountants |
|
|
|
| BALANCE SHEET AS AT JUNE 30, 1997 |
|
|
|
1997 |
1996 |
|
|
Note |
Rupees |
Rupees |
|
~!i |
|
|
|
|
| SHARE
CAPITAL AND RESERVES |
|
|
|
~ |
|
| Share Capital |
|
|
|
| Authorised |
|
|
|
: ~ |
|
| 20,000,000
ordinary shares |
|
|
|
| of
Rs. 10 each |
|
|
200,000,000 |
200,000,000 |
|
|
|
========== |
========== |
|
| Issued,
subscribed and paid-up |
3 |
105,190,600 |
105,190,600 |
|
|
|
|
|
| Reserves |
|
4 |
108,580,186 |
90,857,407 |
|
|
|
---------- |
---------- |
|
|
|
213,770,786 |
196,048,007 |
|
|
|
|
|
| LONG
TERM LOANS |
|
5 |
1,018,565,188 |
582,631,280 |
|
| LONG
TERM DEPOSITS |
|
6 |
163,794,601 |
150,212,991 |
|
| CERTIFICATES
OF INVESTMENT |
|
7 |
32,511,654 |
11,897,628 |
|
|
|
|
|
|
| CURRENT
LIABILITIES |
|
|
---------- |
---------- |
|
| Current
maturity of long term loans |
|
218,441,221 |
201,231,308 |
|
| Current
maturity of long term deposits |
|
64,773,920 |
43,041,347 |
|
| Certificates
of investment |
|
7 |
242,485,788 |
324,423,355 |
|
| Short
term finances |
|
8 |
106,300,000 |
86,650,000 |
|
| Finance
under mark-up arrangements |
9 |
28,396,762 |
59,509,913 |
|
| Accrued
and other liabilities |
10 |
115,298,951 |
133,197,010 |
|
| Taxation |
|
|
1,831,731 |
33,772 |
|
| Proposed
dividend |
|
|
- |
15,778,590 |
|
|
|
---------- |
---------- |
|
|
|
777,528,373 |
863,865,295 |
|
| CONTINGENCIES
AND COMMITMENTS |
11 |
|
|
|
---------- |
---------- |
|
|
|
2,206,170,602 |
1,804,655,201 |
|
|
========== |
========== |
|
| TANGIBLE
FIXED ASSETS |
|
| Operating
fixed assets |
|
12 |
16,205,606 |
17,514,163 |
|
|
|
|
|
| NET
INVESTMENT IN LEASE FINANCE |
13 |
|
|
|
---------- |
---------- |
|
| Minimum
lease payments receivable |
|
2,148,361,505 |
1,973,062,665 |
|
| Residual
value of leased assets |
|
264,505,577 |
222,565,907 |
|
|
---------- |
---------- |
|
|
2,412,867,082 |
2,195,628,572 |
|
| Unearned
finance income |
|
(563,740,040 |
(536,047,646) |
|
|
---------- |
---------- |
|
| Net
investment in lease finance |
|
1,849,127,042 |
1,659,580,926 |
|
| Current
portion of net investment in lease finance |
(713,194,717) |
(546,800,474) |
|
| Provision
for doubtful debts |
|
(36,982,541 |
(33,191,618) |
|
|
---------- |
---------- |
|
|
1,098,949,784 |
1,079,588,834 |
|
|
| LONG
TERM INVESTMENTS |
|
14 |
25,875,616 |
24,875,616 |
|
|
|
|
| LONG
TERM LOANS, DEPOSITS AND |
|
---------- |
---------- |
|
| DEFERRED
COSTS |
|
15 |
17,790,922 |
7,794,947 |
|
|
| CURRENT
ASSETS |
|
|
| Current
portion of net investment |
|
|
|
| in
lease finance |
|
713,194,717 |
546,800,474 |
|
| Short
term investments |
|
16 |
25,000,000 |
- |
|
| Short
term finance |
|
17 |
2,000,000 |
- |
|
| Advances,
prepayments |
|
|
|
|
| and
other receivables |
|
18 |
79,116,486 |
112,786,451 |
|
| Cash
and bank balances |
|
19 |
228,037,471 |
15,294,716 |
|
|
|
---------- |
---------- |
|
|
|
1,047,348,674 |
674,881,641 |
|
|
|
---------- |
---------- |
|
|
2,206,170,602 |
1,804,655,201 |
|
|
========== |
========== |
|
| The
annexed notes form an integral part of these accounts. |
|
| The
auditors' report is annexed hereto. |
|
|
|
| PROFIT
AND LOSS ACCOUNT |
|
| FOR
THE YEAR ENDED JUNE 30, 1997 |
|
|
|
|
|
1997 |
1996 |
|
|
Note |
Rupees |
Rupees |
|
|
|
---------- |
---------- |
|
| REVENUE |
|
|
|
| Income
from leasing operations |
20 |
312,948,160 |
273,808,831 |
|
| Other Income |
|
21 |
11,758,849 |
12,058,135 |
|
|
|
---------- |
---------- |
|
|
|
324,707,009 |
285,866,966 |
|
| EXPENDITURE |
|
|
---------- |
---------- |
|
| Financial
charges |
|
22 |
242,419,819 |
200,952,450 |
|
| Administrative
and operating expenses |
23 |
30,223,816 |
28,576,591 |
|
| Provision
for doubtful debts |
|
|
3,790,923 |
7,795,412 |
|
| Provision
for diminution in value of investments |
- |
896,400 |
|
| Amortization
of deferred costs |
|
3,713,415 |
4,470,108 |
|
|
|
---------- |
---------- |
|
|
|
280,147,973 |
242,690,961 |
|
| Charged
by State Bank of Pakistan as penalty |
|
| on
late payment of exchange risk cover fees |
19,924,134 |
- |
|
|
|
---------- |
---------- |
|
|
|
300,072,107 |
242,690,961 |
|
|
|
---------- |
---------- |
|
| Profit
for the year before taxation |
|
24,634,902 |
43,176,005 |
|
|
|
|
| Taxation |
|
|
|
|
| Current |
|
24 |
3,361,122 |
1,442,918 |
|
| Prior |
|
|
3,551,001 |
- |
|
|
|
---------- |
---------- |
|
|
|
6,912,123 |
1,442,918 |
|
|
|
---------- |
---------- |
|
| Profit
after taxation |
|
|
17,722,779 |
41,733,087 |
|
| Accumulated
profit brought forward |
|
35,731 |
81,234 |
|
|
|
---------- |
---------- |
|
| Profit
available for appropriation |
|
17,758,510 |
41,814,321 |
|
|
|
|
|
| APPROPRIATIONS: |
|
|
|
|
| Transfer
to statutory reserve |
|
3,544,556 |
- |
|
| Transfer
to general reserve |
|
|
10,000,000 |
26,000,000 |
|
| Proposed
dividend Nil (1996:15%) |
|
- |
15,778,590 |
|
|
|
---------- |
---------- |
|
|
|
13,544,556 |
41,778,590 |
|
|
|
---------- |
---------- |
|
| Unappropriated
profit carried forward |
|
4,213,954 |
35,731 |
|
|
|
========== |
========== |
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
| CASH
FLOW STATEMENT |
|
| FOR
THE YEAR ENDED JUNE 30, 1997 |
|
|
1997 |
1996 |
|
|
Rupees |
Rupees |
|
|
---------- |
---------- |
|
| CASH
FLOWS FROM OPERATING ACTIVITIES |
|
| Profit
for the year before taxation |
|
24,634,902 |
43,176,005 |
|
|
| Adjustments
for: |
|
---------- |
---------- |
|
| Depreciation
on fixed assets |
|
3,953,350 |
2,915,437 |
|
| Amortization
of deferred costs |
|
3,713,415 |
4,470,108 |
|
| Provision
for doubtful debts |
|
3,790,923 |
7,795,412 |
|
| Provision
for diminution in value of investments |
- |
896,400 |
|
| (Profit)/Ioss
on sale of fixed assets |
|
(295,045) |
445,520 |
|
| Exchange
Ioss/(gain) |
|
2,193,425 |
(298,907) |
|
| Interest/mark-up
expense (net of interest |
|
| income
on foreign currency deposits) |
|
131,221,145 |
117,673,887 |
|
| Investment
income |
|
(8,518,909) |
(8,824,535) |
|
|
---------- |
---------- |
|
|
136,058,304 |
125,073,322 |
|
|
---------- |
---------- |
|
| Operating
profit before working capital changes |
160,693,206 |
168,249,327 |
|
|
| (Increase)/Decrease
in current assets |
|
---------- |
---------- |
|
| Shod
term finances |
|
2,000,000) |
- |
|
| Shod
term investments |
|
25,000,000) |
39,484,340 |
|
| Advances,
prepayments and other receivables |
35,026,761 |
(23,315,630 |
|
|
---------- |
---------- |
|
|
8,026,761 |
16,168,710 |
|
|
|
| Increase/(Decrease) in
current liabilities |
|
---------- |
---------- |
|
| Certificates
of investment |
|
(81,937,566) |
249,190,128 |
|
| Short
term finances |
|
19,650,000 |
86,650,000 |
|
| Finance
under mark-up arrangement |
|
(31,113,151) |
16,390,165 |
|
| Accrued
and other liabilities |
|
(35,443,924) |
55,460,594 |
|
|
---------- |
---------- |
|
|
128,844,641 |
407,690,887 |
|
|
---------- |
---------- |
|
| Cash
generated from operations |
|
39,875,326 |
592,108,924 |
|
| Income
taxes paid |
|
(5,114,164) |
(1,816,628) |
|
| Interest/mark-up
paid (net of receipt from |
|
|
|
| interest
on foreign currency deposits) |
|
(110,958,746) |
(128,041,730) |
|
| Investment
income received |
|
7,999,207 |
10,027,978 |
|
|
---------- |
---------- |
|
| Net
cash (used in)/generated from |
|
| operating
activities |
|
(68,198,377) |
472,278,544 |
|
|
| CASH
FLOWS FROM INVESTING ACTIVITIES |
|
| Long
term investments |
|
(1,000,000) |
(19,278,016) |
|
| Capital
expenditure |
|
(3,232,060) |
(9,794,707) |
|
| Long
term deposits and deferred costs |
|
47,962 |
(6,294,603) |
|
|
(176,000) |
(176,988) |
|
| Net
investment in lease finance (net of repayments) |
(193,070,800) |
394,453,858) |
|
| Sale
of fixed assets |
|
882,312 |
5,019,383 |
|
| Loan
to executive |
|
(176,000) |
(176,988) |
|
| Recovery
of loan to executive |
|
196,193 |
170,604 |
|
|
---------- |
---------- |
|
| Net
cash (used in) investing activities |
|
(196,352,393) |
(424,808,185) |
|
|
|
|
|
|
1997 |
1996 |
|
|
Rupees |
Rupees |
|
|
|
|
| CASH
FLOWS FROM FINANCING ACTIVITIES |
|
|
|
|
| Issue
of right shares |
|
- |
33,275,000 |
|
| Issue
of shares to IFC |
|
- |
11,187,276 |
|
| Issue
of Certificates of Investment |
|
20,614,026 |
6,322,628 |
|
| Long
term loans |
|
635,487,267 |
77,683,320 |
|
| Repayment
of long term loans |
|
(182,343,446) |
(204,794,406) |
|
| Deferred
(cost)/revenue |
|
(15,999,915) |
1,793,440 |
|
| Dividends
paid |
|
(15,778,590) |
(6,655,000) |
|
| Long
term advances and deposits |
|
35,314,183 |
43,599,918 |
|
|
---------- |
---------- |
|
| Net
cash generated from/(used in) |
|
| financing
activities |
|
477,293,525 |
(37,587,824) |
|
|
---------- |
---------- |
|
| Net
increase in cash activities |
|
212,742,755 |
9,882,535 |
|
| Cash
and bank balances at the beginning of the year |
15,294,716 |
5,412,181 |
|
|
---------- |
---------- |
|
| Cash
and bank balances at the end of the year |
228,037,471 |
15,294,716 |
|
|
========== |
========== |
|
|
| NOTES
TO THE ACCOUNTS |
|
| FOR
THE YEAR ENDED JUNE 30, 1997 |
|
|
|
|
| 1.
THE COMPANY AND ITS OPERATIONS |
|
|
| The
company is incorporated in Pakistan and is listed on the Karachi, Lahore and
Islamabad |
|
| stock
exchanges. It essentially carries on the business of leasing. |
|
|
| 2.
SIGNIFICANT ACCOUNTING POLICIES |
|
|
| 2.1
Accounting convention |
|
| These
accounts have been prepared under the historical cost convention. |
|
|
| 2.2
Revenue recognition |
|
| The
company follows the "Finance Method" in accounting for recognition
of lease |
|
| income.
Under this method the unearned lease income i.e. the excess of aggregate |
|
| lease
rentals and the residual value over the cost of leased asset is deferred and
then |
|
| amortized
to income over the term of the lease, applying the annuity method to produce |
|
| a
constant rate of return on the net cash investment in the lease. |
|
| Other
lease related income is recognised as and when realised. |
|
| Return
on government investments is recognized on an accrual basis on the assumption |
|
| that
such investments will be held upto the next terminal date. |
|
|
| 2.3
Tangible fixed assets |
|
| These
are stated at cost less accumulated depreciation. Depreciation is charged to |
|
| income
applying the reducing balance method at the rates specified in note 12 to the |
|
| accounts.
In respect of additions during the year, depreciation is charged for the full |
|
| year,
however, no depreciation is charged in the year of disposal. The company has |
|
| revised
the rate of depreciation from 10% to 25% on computer equipment and |
|
| accordingly
the depreciation for the year on computer equipment has been charged |
|
| on
revised rates. Had the rate not been revised, the profit for the year would
have been ' |
|
| higher
by Rs. 1,095,872. |
|
| Profit
or loss on disposal of assets is included in income currently. |
|
|
| 2.4 Deferred costs |
|
| Processing
charges of long term loans and other deferred costs are being amortized |
|
| over
a period of three years from the year of incurrence. |
|
|
| 2.5
Investments |
|
| Long
Term Investments |
|
| These
are stated at cost. Provision for diminution in value of investments is made,
if |
|
| considered
permanent. |
|
|
| Short
Term Investments |
|
| These
are stated at lower of cost or market value. |
|
|
| 2.6 Taxation |
|
| Current: |
|
| The
charge for the current taxation for the year, if required, is based on
taxable income, |
|
| which
is computed as if all leases are operating leases. |
|
|
| Deferred: |
|
| The
company accounts for deferred taxation using the liability method on all
significant |
|
| timing
differences, excluding those timing differences which are not likely to
reverse in |
|
| the
foreseeable future. |
|
|
| 2.7
Foreign currency translations |
|
| Assets
and liabilities in foreign currencies are translated at the rates of exchange |
|
| which
approximate those prevailing at the balance sheet date except for liabilities |
|
| covered
under an exchange risk coverage scheme which are translated at the rate |
|
| prevailing
on the date of disbursement. Exchange differences arising as a result of |
|
| obtaining
cover under these schemes are being .amortized over the period of loan. Net |
|
| exchange
differences arising due to hedging mechanism are accounted for as deferred |
|
| revenue/deferred
costs as the case may be and are credited/amortised to the income |
|
| over
the term of the underlying transactions. |
|
|
| 2.8
Off-setting of financial assets and financial liabilities |
|
| A
financial asset and a financial liability is offset and the net amount
reported in the |
|
| balance
sheet if the company has a legally enforceable right to set-off the
transaction |
|
| and
also intends either to settle on a net basis or to realize the asset and
settle the |
|
| liability
simultaneously. |
|
|
| 2.9
Employees' retirement benefits |
|
| The
company operates a contributory provident fund for all its permanent
employees |
|
| and
contributions are made monthly in accordance with the fund rules. |
|
|
| 2.10
Provision for doubtful debts |
|
| Keeping
in view the nature of leasing business, the company, as a prudent policy, |
|
| makes
this provision at a reasonable level, which as per management's anticipation
is |
|
| adequate
for potential losses on the lease portfolio. |
|
|
|
|
1997 |
1996 |
|
|
|
Note |
Rupees |
Rupees |
|
|
---------- |
---------- |
|
| 3.
ISSUED, SUBSCRIBED AND PAID-UP CAPITAL |
|
| 8,864,060
ordinary shares of Rs.10 each |
|
| fully
paid in cash |
|
3.1 |
88,640,600 |
88,640,600 |
|
| 1,655,000
ordinary shares of Rs.10 each |
|
| issued
as fully paid bonus shares |
|
16,550,000 |
16,550,000 |
|
|
---------- |
---------- |
|
|
105,190,600 |
105,190,600 |
|
|
========== |
========== |
|
|
| 3.1
Includes 536,560 ordinary shares of Rs.10 each issued to International
Finance |
|
| Corporation
at premium of Rs.10.85 per share upon exercise of their option to convert |
|
| a
portion of its loan into equity based on financial statements as at June 30,
1995 as |
|
| per
the loan agreement (Refer to note 5.9). |
|
|
|
|
1997 |
1996 |
|
|
Note |
Rupees |
Rupees |
|
| 4. RESERVES |
|
---------- |
---------- |
|
|
| Capital
Reserves |
|
---------- |
---------- |
|
| Premium
on Shares |
|
3.1 |
5,821,676 |
5,821,676 |
|
| Statutory
Reserve |
|
4.1 |
29,695,461 |
- |
|
|
|
---------- |
---------- |
|
|
|
35,517,137 |
5,821,676 |
|
| Revenue
Reserves |
|
|
---------- |
---------- |
|
| General
Reserve |
|
4.2 |
68,849,095 |
85,000,000 |
|
| Unappropriated
Profit |
|
|
4,213,954 |
35,731 |
|
|
|
---------- |
---------- |
|
|
|
73,063,049 |
85,035,731 |
|
|
---------- |
---------- |
|
|
108,580,186 |
90,857,407 |
|
| 4.1
Statutory Reserve |
|
========== |
========== |
|
|
| Transfer
from General Reserve |
|
26,150,905 |
- |
|
| Transfer
from profit and loss account |
|
3,544,556 |
- |
|
|
---------- |
---------- |
|
|
29,695,461 |
- |
|
|
========== |
========== |
|
| This
represents 20% of after tax profit as required under the relevant provision
of the |
|
| State
Bank of Pakistan rules for Non Banking Financial Institutions. |
|
|
| 4.2
General Reserve |
|
|
| Balance
as at July 1 |
|
85,000,000 |
59,000,000 |
|
| Transfer
from General Reserve to Statutory Reserve |
(26,150,905) |
- |
|
| Transfer
from profit and loss account |
|
10,000,000 |
26,000,000 |
|
|
---------- |
---------- |
|
|
68,849,095 |
85,000,000 |
|
|
========== |
========== |
|
|
| 5.
LONG TERM LOANS - Secured |
|
| Foreign
currency loans |
|
|
---------- |
---------- |
|
| Commonwealth
Development Corp. I |
|
- |
26,475,137 |
|
|
|
|
|
| Commonwealth
Development Corp. II |
5.2 |
55,920,766 |
79,605,966 |
|
| Asian
Development Bank I |
|
5.3 |
42,086,162 |
63,131,955 |
|
| Asian
Development Bank II |
|
5.40 |
407,028,000 |
- |
|
|
|
|
|
| Netherlands
Development Finance Co. I |
5.5 |
85,941,252 |
110,317,339 |
|
| Netherlands
Development Finance Co. II |
5.6 |
236,956,153 |
- |
|
| German
Investment and Development Co. I |
5.7 |
39,144,043 |
50,307,007 |
|
| German
Investment and Development Co. II |
5.8 |
53,212,459 |
65,023,414 |
|
| International
Finance Corporation (Loan A) |
5.9 |
242,225,430 |
279,489,607 |
|
| International
Finance Corporation (Loan B) |
5.10 |
67,159,620 |
77,683,320 |
|
|
|
---------- |
---------- |
|
|
|
1,229,673,885 |
752,033,745 |
|
| Less:
Exchange differences not yet due |
|
3,223,019 |
5,573,423 |
|
|
|
---------- |
---------- |
|
|
|
1,226,450,866 |
746,460,322 |
|
| Local
currency loans |
|
|
---------- |
---------- |
|
| From
a development financial institution - loan 1 |
- |
3,513,385 |
|
| From
a banking company - loan 2 |
5.11 |
8,333,335 |
25,000,001 |
|
| From
a banking company - loan 3 |
5.12 |
2,222,208 |
8,888,880 |
|
|
---------- |
---------- |
|
|
10,555,543 |
37,402,266 |
|
|
---------- |
---------- |
|
|
1,237,006,409 |
783,862,588 |
|
| Less:
Current maturity |
|
218,441,221 |
201,231,308 |
|
|
---------- |
---------- |
|
|
1,018,565,188 |
582,631,280 |
|
|
========== |
========== |
|
|
|
|
| 5.1
All the loans stated in note 5 above are secured by pari-passu floating
charge on the |
|
| present
and future leased assets, hypothecation of movable assets and receivables of |
|
| the
company and demand promissory notes. The foreign currency loans are
registered |
|
| with
the State Bank of Pakistan. |
|
|
| 5.2
This represents balance of a loan facility of Pound Sterling 2,500,000
obtained from |
|
| Commonwealth
Development Corporation (CDC) for financing lease operations. The |
|
| loan
is repayable in 10 equal semi-annual instalments which commenced from |
|
| January
25, 1995. |
|
|
| The
liability of this loan has been fixed in Pakistani Rupees under the exchange
risk |
|
| cover
scheme of State Bank of Pakistan and the rate of interest and exchange risk |
|
| cover
fee is 10.5% and 6.93% per annum respectively, payable half-yearly. In case
the |
|
| company
fails to pay any amount on the due date, it shall be liable to pay liquidated |
|
| damages
at the rate of 1% per annum over and above the interest rate. |
|
|
| 5.3
This represents balance of a loan facility of US$ 5,000,000 obtained from
Asian |
|
| Development
Bank (ADB) for financing lease operations. The loan is repayable in 12 |
|
| equal
semi-annual instalments which commenced from December 15, 1993. |
|
|
| The
liability of this loan has been fixed in Pakistani Rupees under the exchange
risk |
|
| cover
scheme of State Bank of Pakistan. The rate of interest and exchange risk
cover |
|
| fee
is 9.4% and 7.08% per annum respectively, payable half-yearly. In case the
company |
|
| fails
to pay any amount on the due date, it shall be liable to pay liquidated
damages at |
|
| the
rate of 1% per annum over and above the interest rate. |
|
|
| 5.4
This represents balance of a second loan facility of US $ 10,000,000 obtained
from |
|
| Asian
Development Bank (ADB) for financing lease operations. The loan is repayable |
|
| in
10 equal semi-annual instalments commencing from March 15, 1999. |
|
|
| The
interest rate is LIBOR plus 2.25% per annum payable half yearly. In case the |
|
| company
fails to pay any amount on the due date, It shall be liable to pay liquidated |
|
| damages
at the rate of 1% per annum over and above the interest rate. |
|
|
| 5.5
This represents balance of a loan facility of Netherland Guilders (NLG)
10,000,000 |
|
| comprising
of two equal tranches of NLG 5,000,000 each and was obtained from |
|
| Netherlands
Development Finance Company (FMO) for financing lease operations. |
|
| The
loan is repayable in 14 equal semi-annual instalments which commenced from |
|
| November
1, 1994 for the first tranche and November 1, 1995 for the second tranche. |
|
|
| The
liability of this loan has been fixed in Pakistani Rupees under the exchange
risk |
|
| cover
scheme. The rate of interest and exchange risk cover fee is 10.7% and 5% per |
|
| annum
respectively, payable half-yearly. In case the company fails to pay any
amount |
|
| on
the due date, it shall be liable to pay liquidated damages at the rate of 2%
per |
|
| annum
over and above the interest rate. |
|
|
| 5.6
This represent the balance of a second loan facility of US $ 5,821,618
equivalent to |
|
| Netherland
Guilders (NLG) 10,000,000 obtained from Netherlands Development |
|
| Finance
Company (FMO) for financing lease operations. The loan has been drawn in |
|
| two
tranches and is repayable in 10 equal semi-annual instalments commencing from |
|
| November
1, 1997 and May 1, 1998 respectively. |
|
|
| The
interest rate for the first tranche is 10.50% per annum and for the second
tranche |
|
| is
10.25% per annum payable half yearly. In case the company fails to pay any
amount |
|
| on
the due date, it shall be liable to pay liquidated damages at the rate of 2%
per |
|
| annum
over and above the interest rate. |
|
|
| 5.7
This represents the balance of a loan facility of Deutsche Marks 5,000,000
obtained |
|
| from
German Investment and Development Company (DEG) for financing lease |
|
| operations.
The loan is repayable in 15 equal semi-annual instalments which |
|
| commenced
from October 30, 1993. |
|
|
| The
liability of this loan has been fixed in Pakistani Rupees under the exchange
risk |
|
| cover
scheme of State Bank of Pakistan. The rate of interest and exchange risk
cover |
|
| fee
is 10.5% and 5% per annum respectively, payable half-yearly. In case the
company |
|
| fails
to pay any amount on the due date, it shall be liable to pay liquidated
damages at |
|
| the
rate of 2% per annum over and above the interest rate. |
|
|
| 5.8
This represents the balance of a loan facility of Deutsche Marks 5,000,000
obtained |
|
| from
German Investment and Development Company (DEG) for financing lease |
|
| operations.
The loan is repayable in 15 equal semi-annual instalments which |
|
| commenced
from October 30, 1994. |
|
|
| The
liability of this loan has been fixed in Pakistani Rupees under the exchange
risk |
|
| cover
scheme of State Bank of Pakistan. The rate of interest and exchange risk
cover |
|
| fee
is 10.6% and 5.77% per annum respectively, payable half-yearly. In case the |
|
| company
fails to pay any amount on the due date, it shall be liable to pay liquidated |
|
| damages
at the rate of 2% per annum over and above the interest rate. |
|
|
| 5.9
This represents the balance of a loan facility (A) of US $ 10,000,000
obtained from |
|
| International
Finance Corporation (IFC) for financing lease operations. The loan is |
|
| repayable
in 16 equal semi-annual instalments which commenced from June 15, |
|
| 1996. |
|
|
| In
accordance with the loan agreement IFC has exercised its conversion option of
loan |
|
| into
equity (refer to note 3.1) |
|
|
| The
liability of this loan has been fixed in Pakistani Rupees under the exchange
risk |
|
| cover
scheme of State Bank of Pakistan. The rate of interest and exchange risk
cover |
|
| fee
is 8.5% and 6.66% per annum respectively, payable half-yearly. In case the
company |
|
| fails
to pay any amount on the due date, it shall be liable to pay liquidated
damages at |
|
| the
rate of 2% per annum over and above the interest rate. |
|
|
| 5.10
This represents the balance of a loan facility (B) of US $ 2,200,000 obtained
from |
|
| International
Finance Corporation (IFC) for financing lease operations. The loan is |
|
| repayable
in 4 equal semi annual instalments which commenced from June 15, 1997. |
|
|
| The
interest rate is LIBOR plus 2.75% per annum payable half yearly. In case the |
|
| company
fails to pay any amount on the due date, it shall be liable to pay liquidated |
|
| damages
at the rate of 2% per annum over and above the interest rate. |
|
|
| 5.11
This represents the balance of a loan facility of Rs. 50,000,000 obtained
from a banking |
|
| company
for financing the leasing operations of the company. The loan is repayable in |
|
| 6
equal semi-annual instalments which commenced from February 16, 1995 and |
|
| carries
mark-up at the rate of 49.31 paisas per thousand Rupees per day. |
|
|
| 5.12
This represents the balance of a loan facility of Rs. 20,000,000 obtained
from a banking |
|
| company
for financing the leasing operations of the company. The loan is repayable in |
|
| 36
equal monthly instalments which commenced from November 1994 and carries |
|
| mark-up
at the rate of 52.05 paisas per thousand Rupees per day. |
|
|
|
1997 |
1996 |
|
|
Note |
Rupees |
Rupees |
|
| 6.
LONG TERM DEPOSITS |
|
---------- |
---------- |
|
|
| From lessees |
|
| Security
deposits on lease |
|
|
|
| contracts |
|
6.1 |
227,860,032 |
192,794,369 |
|
| From
employees |
|
6.2 |
708,489 |
459,969 |
|
|
|
---------- |
---------- |
|
|
228,568,521 |
193,254,338 |
|
| Less:
Current maturity of security deposits on |
|
|
| lease
contracts |
|
64,773,920 |
43,041,347 |
|
|
---------- |
---------- |
|
|
163,794,601 |
150,212,991 |
|
|
========== |
========== |
|
| 6.1
These represent security deposits received against lease contracts and are
repayable/ |
|
| adjustable
at the expiry of respective lease periods. |
|
|
| 6.2
This represents deposits from employees under the Company's Car scheme. |
|
|
| 7.
CERTIFICATES OF INVESTMENT |
|
| The
company has a scheme of registered Certificates of Investment (COl) for
resource |
|
| mobilization
as per permission from the Corporate Law Authority, Government of Pakistan.
It |
|
| is
based on the profit and loss sharing principle. Returns are presently being
paid at rates |
|
| negotiated
with customers. Terms range from three months to five years. |
|
|
| 8.
SHORT TERM FINANCES |
|
| From
a bank - secured |
|
8.1 |
20,000,000 |
- |
|
| From
a financial institution - secured |
8.2 |
5,800,000 |
- |
|
| From
financial institutions - unsecured |
8.3 |
80,500,000 |
86,650,000 |
|
|
|
---------- |
---------- |
|
|
106,300,000 |
86,650,000 |
|
|
========== |
========== |
|
|
|
|
| 8.1
This represents morabaha facility obtained from a bank and is secured by pari
passu |
|
| floating
charge on the present and future leased assets, hypothecation of movable |
|
| assets
and receivables of the company and demand promissory notes. The mark-up |
|
| rate
is 50.68 paisas per thousand Rupees per day. The facility amounts to Rs. 20 |
|
| million. |
|
|
| 8.2
This represents shod term finance obtained from a financial institution and
is secured |
|
| by
lien on foreign currency deposits of the company. The, mark-up rate is 54.79
paisas |
|
| per
thousand Rupees per day. The facility amounts to Rs. 5.8 million. |
|
|
| 8.3
These represent shod term finance obtained from various financial
institutions. The |
|
| mark-up
rate ranges from 52 to 57 paisas per thousand Rupees per day. The amounts |
|
| have
been subsequently repaid. |
|
|
| 9.
FINANCE UNDER MARK-UP ARRANGEMENTS |
|
| Running
finances from banks utilized |
|
| under
mark-up arrangements - secured |
|
28,396,762 |
59,509,913 |
|
|
========== |
========== |
|
|
| The
facilities from commercial banks amount to Rs.108.50 million (1996:Rs.88.50
million) |
|
| and
the mark-up rates range from 51 to 55 paisas per thousand rupees per day and
are |
|
| payable
currently. The arrangements are secured by pari-passu charge on leased assets |
|
| and
hypothecation of rentals receivable. |
|
|
|
Note |
Rupees |
Rupees |
|
| 10.
ACCRUED AND OTHER LIABILITIES |
|
| Accrued expenses |
|
1,041,983 |
628,374 |
|
| Mark-up on secured |
|
| - long term loans |
|
19,008,615 |
12,096,240 |
|
| -
credit facility availed (net of accrued interest on |
|
| foreign currency
deposits Rs. 16,814,826 - refer to |
|
| note
19.1 ) |
|
9,520,878 |
- |
|
| - running finances |
|
980,978 |
1,189,651 |
|
| - short term finances |
|
602,904 |
- |
|
| Mark-up on unsecured
short term finances |
|
1,214,863 |
496,482 |
|
| Exchange risk cover fee
payable |
|
49,057,908 |
90,000,079 |
|
| Guarantee
commission, commitment and other |
|
| charges on long term loans |
|
2,276,235 |
3,494,579 |
|
| Profit payable on
Certificates of Investment |
9,707,629 |
9,034,381 |
|
| Payable to
State Bank of Pakistan as penalty on late |
|
| payment of exchange risk cover
fee |
|
2,363,810 |
- |
|
| Other
liabilities |
|
| Advance from customers pending |
|
| lease execution |
|
2,051,607 |
2,812,717 |
|
| Advance lease rentals from
lessees |
|
7,752,439 |
8,517,590 |
|
| Payments from lessees
received on account |
9,117,359 |
4,024,117 |
|
| Unclaimed dividends |
|
19,482 |
12,252 |
|
| Other |
|
582,261 |
890,548 |
|
|
|
---------- |
---------- |
|
|
19,523,148 |
16,257,224 |
|
|
---------- |
---------- |
|
|
115,298,951 |
133,197,010 |
|
|
========== |
========== |
|
| 11.
CONTINGENCIES AND COMMITMENTS |
|
| 11.1
Contingencies |
|
| Counter-guarantee
issued to an associated |
|
| undertaking in
respect of financing transactions |
11,875,147 |
- |
|
|
|
========== |
========== |
|
| 11.2
Commitments |
|
| Letters of comfort
against letters of credit |
8,000,000 |
37,039,952 |
|
| Lease commitments |
|
19,187,273 |
36,894,000 |
|
| Capital
expenditure for computer software |
|
| (associated undertaking) |
|
1,000,000 |
- |
|
|
|
---------- |
---------- |
|
|
28,187,273 |
73,933,952 |
|
|
========== |
========== |
|
| 12. OPERATING FIXED ASSETS |
|
|
|
Cost |
|
Depreciation |
|
|
Accumulated |
|
Written down |
Depre- |
|
As at |
|
As at |
As at |
Charge for |
On |
Accumulated |
value as at |
ciation |
|
July 1, 1996 |
Additions |
Disposals |
June 30, 1997 |
July 1, 1996 |
the year |
disposals |
As at |
June 30. |
Rate |
|
Rupees |
Rupees |
Rupees |
Rupees |
Rupees |
Rupees |
Rupees |
June 30, 1997 |
1997 |
on WDV % |
|
|
Rupees |
Rupees |
|
|
|
| Leasehold
improvements |
1,637,935 |
- |
- |
1,637,935 |
485,111 |
115,283 |
- |
600,394 |
1,037,541 |
10 |
| Furniture
and fixtures |
1,111,861 |
364,326 |
24,600 |
1,451,587 |
404,186 |
105,772 |
10,323 |
499,635 |
951,952 |
10 |
| Office
equipment |
1,371,654 |
283,600 |
44,136 |
1,611,118 |
367,090 |
125,973 |
15,704 |
477,359 |
1,133,759 |
10 |
| Computer
equipment |
8,489,245 |
654,087 |
105,000 |
9,038,332 |
1,757,700 |
1,826,454 |
25,183 |
3,558,971 |
5,479,361 |
25 |
| Electrical
equipment |
1,535,737 |
29,300 |
- |
1,565,037 |
597,996 |
96,704 |
- |
694,700 |
870,337 |
10 |
| Motor
vehicles |
10,475,360 |
1,900,747 |
1,244,974 |
11,131,133 |
3,495,546 |
1,683,164 |
780,233 |
4,398,477 |
6,732,656 |
20 |
|
---------- |
---------- |
---------- |
---------- |
---------- |
---------- |
---------- |
---------- |
---------- |
---------- |
|
24,621,792 |
3,323,060 |
1,418,710 |
26,435,142 |
7,107,629 |
3,953,350 |
831,443 |
10,229,536 |
16,205,606 |
|
|
========== |
========== |
========== |
========== |
========== |
========== |
========== |
========== |
========== |
========== |
|
1996 |
21,565,249 |
12,064,406 |
9,007,863 |
24,621,792 |
7,735,152 |
2,915,437 |
3,542,960 |
7,107,629 |
17,514,163 |
|
|
========== |
========== |
========== |
========== |
========== |
========== |
========== |
========== |
========== |
========== |
|
|
| 12.1
DISPOSAL OF ASSETS |
|
|
Cost |
Accumulated |
Book value |
Sale |
Mode of |
|
| Description |
|
Rupees |
depreciation |
Rupees |
Proceeds |
disposal |
Sold to |
|
|
Rupees |
|
Rupees |
|
|
| Furniture
& Fixture |
6,000 |
3,130 |
2,870 |
1,655 |
Negotiation |
Mr. Raza Hasan |
|
|
|
|
56-D, Block 2,
P.E.C.H.S., |
|
|
|
|
Karachi. |
|
| Furniture
& Fixture |
14,300 |
4,951 |
9,349 |
7,049 |
Negotiation |
Mr. Altaf Abbas |
|
|
|
|
20 Lucky Apartment |
|
|
|
|
Block 17, Gulshan-e-lqbal |
|
|
|
|
Karachi. |
|
| Furniture
& Fixture |
2,150 |
1,121 |
1,029 |
405 |
Negotiation |
Mr. Imran Arif |
|
|
|
|
2nd Floor, Room No. 216 |
|
|
|
|
Sane Centre, Aslam Road, |
|
|
|
|
Karachi. |
|
| Furniture
& Fixture |
2,150 |
1,121 |
1,029 |
355 |
Negotiation |
Mr. Abdul Wahid |
|
|
|
|
R-767, Sector 15-A-3, |
|
|
|
|
Buffer Zone, Karachi. |
|
| Office
Equipment |
4,000 |
1,638 |
2,362 |
- |
Damaged |
- |
|
| Office
Equipment |
36,136 |
12,428 |
23,708 |
- |
Damaged |
- |
|
| Office
Equipment |
4,000 |
1,638 |
2,362 |
2,362 |
Negotiation |
Mr. Khizar Pasha |
|
|
|
|
Ex-employee |
|
| Computer
Equipment |
14,000 |
6,560 |
7,440 |
5,500 |
Negotiation |
M/s. Dadi Associates
(Pvt) Ltd. |
|
|
|
|
1st Floor, Ocean Centre, |
|
|
|
|
40, Talpur Road, Karachi. |
|
| Computer
Equipment |
19,000 |
8,903 |
10,097 |
7,750 |
Negotiation |
Pakistan Supply Agency |
|
|
|
|
Karachi. |
|
|
|
|
|
| Computer
Equipment |
28,000 |
5,320 |
22,680 |
14,300 |
Negotiation |
M/s. Gohar & Co. |
|
|
|
|
5/10, Tara Mukhi Lane, |
|
|
|
|
Bombay Bazar, Karachi. |
|
| Computer
Equipment |
27,000 |
2,700 |
24,300 |
17,300 |
Negotiation |
Ocean Trading Agency, |
|
|
|
|
179, Zoological Garden
Mkt., |
|
|
|
|
Nishter Road, Karachi. |
|
|
|
|
|
| Computer
Equipment |
8,500 |
850 |
7,650 |
3,000 |
Negotiation |
Mr. Salman Aziz, |
|
|
|
|
|
|
6-B, Zainab Plaza, |
|
|
|
|
|
|
Fatima Jinnah Colony,
Karachi. |
|
| Computer
Equipment |
8,500 |
850 |
7,650 |
3,000 |
Negotiation |
Mr. M. Amin |
|
|
|
|
7 Sunny Side Villa, |
|
|
|
|
Off. Bleak House Road, |
|
|
|
|
Civil Line, Karachi. |
|
|
|
|
|
| Motor Vehicle |
|
199,487 |
97,349 |
102,138 |
221,500 |
Tender |
M/s. A. P. Motors, |
|
|
|
|
Karachi. |
|
| Motor Vehicle |
|
595,000 |
495,175 |
99,825 |
220,000 |
Tender |
Mr. Muhamad Hasan Khan |
|
|
|
|
House No. 351, D Khudadad |
|
|
|
|
Colony, Shahrah Quaideen,
Kar. |
|
| Motor Vehicle |
|
251,000 |
90,360 |
160,640 |
222,136 |
Tender |
M/s. Car Sale, Lahore. |
|
|
|
|
|
| Motor Vehicle |
|
199,487 |
97,349 |
102,138 |
156,000 |
Tender |
Mr. Muhammad Aqil |
|
|
106 Defence Housing
Authority, |
|
|
Main Korangi Road,
Karachi. |
|
|
---------- |
---------- |
---------- |
---------- |
|
|
1,418,710 |
831,443 |
587,267 |
882,312 |
|
|
========== |
========== |
========== |
========== |
|
|
| 13.
NET INVESTMENT IN LEASE FINANCE |
|
| Includes
Rs. 17,028,548 (1996: Rs. 952,020)in respect of associated companies. Maximum |
|
| amount
due at the end of any month during the year was Rs. 17,028,548 (1996: Rs.
1,023,780). |
|
|
| 14.
LONG TERM INVESTMENTS |
|
| Shares
in listed companies |
|
|
|
No. of |
No. of |
Market value/ |
Average |
|
|
ordinary |
ordinary |
Break up value |
cost |
1997 |
1996 |
|
|
shares |
shares |
1997 |
per share |
Cost |
Cost |
|
|
1997 |
1996 |
Rupees |
Rupees |
Rupees |
Rupees |
|
| Quoted: |
|
|
| J.D.W.
Sugar Mills Ltd. |
298,800 |
298,800 |
642,420 |
10.00 |
2,988,000 |
2,988,000 |
|
| Engro
Chemicals Pak. Ltd. |
6,000 |
6,000 |
858,000 |
131.67 |
790,000 |
790,000 |
|
| Muslim
Insurance Co. Ltd. |
|
| (associated
undertaking) |
27,438 |
24,944 |
521,322 |
19.64 |
538,790 |
538,790 |
|
| Atlas
Battery Ltd. |
|
| (associated
undertaking) |
80,018 |
80,018 |
3,480,783 |
68.10 |
5,449,226 |
5,449,226 |
|
|
---------- |
|
---------- |
---------- |
|
|
5,502,525 |
|
9,766,016 |
9,766,016 |
|
| Less:
Provision for diminution in value |
|
|
|
| of
quoted investments |
|
(2,390,400) |
(2,390,400) |
|
|
---------- |
---------- |
|
|
7,375,616 |
7,375,616 |
|
| Unquoted: |
|
| Arabian Sea
Country Club (note 14.1 ) (Chief Executive |
|
| Mr.
Zaeem Lutfi) |
100,000 |
-- |
100,000 |
10.00 |
1,000,000 |
-- |
|
|
|
---------- |
|
---------- |
---------- |
|
|
6,502,525 |
|
8,375,616 |
7,375,616 |
|
| Government Securities: |
|
========== |
|
|
|
| Federal
Investment Bonds (note 14.2) |
|
17,500,000 |
17,500,000 |
|
|
---------- |
---------- |
|
|
25,875,616 |
24,875,616 |
|
|
========== |
========== |
|
| 14.1
The break-up value of these shares is as per June 30, 1996 audited financial |
|
| statements. |
|
|
| 14.2
These investments have been made in compliance with the State Bank of
Pakistan's |
|
| Rules
for Non-Banking Financial Institutions to maintain the liquidity requirement
against |
|
| certain
liabilities. The rate of return ranges from 14% to 15% per annum and mature
on |
|
| May
5, 1999, January 25, 2002 and November 22, 2004 respectively. |
|
|
| 14.3
The aggregate market value of quoted investments as at June 30, 1996 was |
|
| Rs. 7,408,907. |
|
|
|
|
|
1997 |
1996 |
|
,. , |
|
|
Note |
Rupees |
Rupees |
|
|
|
|
| 15.
LONG TERM LOANS, DEPOSITS AND DEFERRED COSTS |
|
|
|
|
|
| Loan
to executive - secured, considered good |
15.1 |
1,745,135 |
1,765,329 |
|
~.~----~ |
|
| Less:
Current portion |
|
|
225,1 38 |
196,1 94 |
|
|
|
|
|
|
|
1,519,997 |
1,569,135 |
|
| Deposits |
|
|
499,786 |
475,536 |
|
| Deferred
costs |
|
15.2 |
15,771,139 |
5,750,276 |
|
|
|
---------- |
---------- |
|
|
17,790,922 |
7,794,947 |
|
|
========== |
========== |
|
|
|
|
| 15.1
This represents house loan to the Chief Executive Officer which is repayable
in 144 |
|
| monthly
instalments and carries mark-up @ 10% per annum. The loan is secured by |
|
| registered
mortgage of property and assignment of life insurance policy. |
|
|
| Maximum
amount outstanding at the end of any month during the year against loan to |
|
| Chief
Executive was Rs. 1,765,115 (1996: Rs. 1,768,467). |
|
|
|
|
1997 |
1996 |
|
|
Note |
Rupees |
Rupees |
|
| 15.2
Deferred costs |
|
|
| Front-end fee on long term loans |
15.2.1 |
|
7,244,809 |
3,459,182 |
|
| Net
exchange difference arising due |
|
| to hedging mechanism |
15.2,2 |
|
(1,494,533) |
12,311,957 |
|
|
|
15,771,139 |
5,750,276 |
|
| 15.2.1
Front-end fee on long term loans |
|
| Opening
Balance |
|
19,183,544 |
12,879,841 |
|
| (Refunds)/additions
during the year |
|
(72,212) |
6,303,703 |
|
|
|
19,111,332 |
19,183,544 |
|
| Amortized
to-date |
|
(15,652,150) |
(11,938,735) |
|
|
---------- |
---------- |
|
|
3,459,182 |
7,244,809 |
|
|
========== |
========== |
|
|
|
|
| The
above expenditure is carried forward as it confers the benefit of the same to |
|
| future years. |
|
|
| 15.2.2
Net exchange difference arising due to |
|
| hedging
mechanism |
|
|
| Opening
balance |
|
(1,793,440) |
- |
|
| Debit/(credit)
during the year |
|
16,298,822 |
(1,793,440) |
|
|
---------- |
---------- |
|
|
14,505,382 |
(1,793,440) |
|
| Amortized
to-date [expense/(income)] |
|
2,193,425 |
(298,907) |
|
|
---------- |
---------- |
|
|
12,311,957 |
(1,494,533) |
|
|
========== |
========== |
|
| 16. SHORT TERM INVESTMENTS |
|
| Short
term federal bonds |
|
25,000,000 |
- |
|
|
========== |
========== |
|
|
| This
investment has been made in compliance with the State Bank of Pakistan's
Rules for |
|
| Non-Banking
Financial Institutions to maintain the liquidity requirement against certain |
|
| liabilities.
The investment carries a rate of return of 16.45% per annum. These
investments |
|
| are
expected to be held till their maturity. |
|
|
| 17.
SHORT TERM FINANCE ON MARK-UP BASIS |
|
| -
SECURED - CONSIDERED GOOD |
|
2,000,000 |
- |
|
|
========== |
========== |
|
|
|
|
| This
represents balance outstanding of a facility to a customer secured against
first charge |
|
| on
property and carries a rate of mark-up of 23.50% per annum. The finance has
been |
|
| subsequently
recovered. |
|
|
|
Note |
Rupees |
Rupees |
|
| 18.
ADVANCES, PREPAYMENTS AND |
|
|
|
| OTHER
RECEIVABLES |
|
|
|
|
|
|
| Advances
- considered good |
|
|
|
| against
assets to be leased out |
|
18.1 |
17,438,020 |
15,200,000 |
|
| for
capital expenditure |
|
18.2 |
1,000,000 |
- |
|
| for expenses |
|
|
8,153 |
22,590 |
|
| to employees |
|
|
480,493 |
163,326 |
|
| others |
|
|
- |
50,000 |
|
|
|
---------- |
---------- |
|
|
|
18,926,666 |
15,435,916 |
|
| Current
portion of loan to an executive |
|
|
225,138 |
196,194 |
|
| Prepayments |
|
|
1,877,261 |
2,068,015 |
|
| Due
from associated undertakings |
|
18.3 |
3,002,384 |
2,729,052 |
|
| Accrued
lease income |
|
|
23,708,679 |
20,183,996 |
|
| Accrued
profit on long term investments |
|
|
936,712 |
457,260 |
|
| Accrued
profit on short term investments |
|
|
40,250 |
- |
|
| Accured
interest on long term deposits |
|
|
- |
2,716,534 |
|
| Exchange
difference refundable from SBP |
|
|
24,484,568 |
64,134,348 |
|
| Repossessed
asset held for sale |
|
18.4 |
1,005,376 |
2,094,629 |
|
| Other
charges recoverable from lessees |
|
|
3,203,709 |
2,420,342 |
|
| Other
receivables |
|
|
1,705,743 |
350,165 |
|
|
|
---------- |
---------- |
|
|
|
79,116,486 |
112,786,451 |
|
|
|
========== |
========== |
|
| 18.1
Included in the above are advances against assets to be leased out amounting
to |
|
| Rs.
7,577,721 to an associated undertaking. The maximum outstanding at the end of |
|
| any
month during the year was Rs. 7,577,721 (1996: Rs. Nil). |
|
|
| 18.2
The above represents advance for capital expenditure to an associated
undertaking. ~-~ |
|
| The
maximum outstanding at the end of any month during the year was Rs. 1,000,000 |
|
| (1996:
Rs. Nil) |
|
|
| 18.3
The above represents dues from an associated undertaking. The maximum due at
the |
|
| end
of any month during the year was Rs. 3,002,384 (1996: Rs. 4,399,314). |
|
|
| 18.4
The company has subsequently sold the asset for a higher value. |
|
|
| 19.
CASH AND BANK BALANCES |
|
|
| Cash in hand |
|
12,019 |
26,157 |
|
| Stamps
in hand |
|
31,475 |
11,060 |
|
| Cheques
in hand |
|
6,430,803 |
2,380,490 |
|
| With banks |
|
| on
current accounts |
|
766,852 |
3,485,009 |
|
| on
foreign currency deposit account |
|
166,254,400 |
- |
|
| on
foreign currency deposit account |
|
19.1 |
53,041,922 |
8,292,000 |
|
| on
special account with SBP |
|
|
1,500,000 |
1,100,000 |
|
|
|
---------- |
---------- |
|
|
|
228,037,471 |
15,294,716 |
|
|
|
========== |
========== |
|
|
|
|
|
| 19.1
Foreign currency deposits |
|
'19.1.1 |
556,297,328 |
83,292,000 |
|
| Less
: Credit facility availed |
|
|
503,255,406 |
75,000,000 |
|
|
---------- |
---------- |
|
|
53,041,922 |
8,292,000 |
|
|
========== |
========== |
|
|
|
|
| 19.1.1
The foreign currency deposits are under lien with respect to credit
facilities availed |
|
| and
short term finance under mark-up arrangement (refer to note 8.2). The credit |
|
| facilities
availed on a matching facility basis have been offset in accordance with note |
|
| 2.8.
The rate of interest on the deposits ranges from 6.0% to 7.75% per annum. The |
|
| rate
of mark-up on the credit facility availed ranges from 12.54% to 15.07% per
annum. |
|
| The
maturity of credit facilities and foreign currency deposits are upto
September 15, |
|
| 2003. |
|
|
|
|
1997 |
1996 |
|
|
Note |
Rupees |
Rupees |
|
|
| 20.
INCOME FROM LEASING OPERATIONS |
|
312,948,160 |
273,808,831 |
|
|
========= |
========= |
|
|
| The
above includes all income arising on account of |
|
| leasing
operations. |
|
|
| 21.
OTHER INCOME |
|
|
| Return
on long term investments: |
|
| Government
securities |
|
2,643,904 |
1,910,561 |
|
| Dividends
[including Rs. 273,006 from associated |
|
| undertakings
(1996: Rs. Nil)] |
|
321,005 |
20,000 |
|
|
2,964,909 |
1,930,561 |
|
| Return
on short term investments |
|
5,875,005 |
6,913,974 |
|
| Exchange
gains |
|
- |
298,907 |
|
| Mark-up
on short term finance |
|
317,500 |
1,469,917 |
|
| Mark-up
on loan to executive |
|
176,000 |
176,988 |
|
| Gain
on cancellation of lease contracts |
|
1,045,01 2 |
878,067 |
|
| Profit/(loss)
on sale of fixed assets |
|
295,045 |
(445,520) |
|
| Guarantee
commission |
|
46,690 |
- |
|
| Arrangement
fee |
|
111,129 |
210,130 |
|
| Miscellaneous |
|
927,559 |
625,111 |
|
|
---------- |
---------- |
|
|
11,758,849 |
12,058,135 |
|
|
========== |
========== |
|
|
| 22.
FINANCIAL CHARGES |
|
| Mark-up
on secured |
|
| -
long term loans |
|
90,249,612 |
86,864,923 |
|
| -
credit facilities availed [net of interest on foreign |
|
| currency
deposits Rs. 20,844,565 |
|
| (1996:
Rs. 2,716,534) - refer to note 19.1 ] |
|
15,358,892 |
2,168,484 |
|
| -
running finances |
|
5,257,622 |
3,857,273 |
|
|
| Mark-up
on short term finance |
|
20,355,019 |
24,783,207 |
|
| Profit
on Certificates of Investment |
|
66,597,760 |
29,002,590 |
|
| Exchange
risk cover fee |
|
37,572,975 |
47,419,496 |
|
| Exchange loss |
|
2,492,332 |
- |
|
| Commitment
charges, guarantee commission and |
|
| other
charges on long term loans |
|
3,260,824 |
4,663,647 |
|
| Bank charges |
|
1,215,611 |
2,135,870 |
|
| Other |
|
59,172 |
56,960 |
|
|
---------- |
---------- |
|
|
242,419,819 |
200,952,450 |
|
|
========== |
========== |
|
|
|
|
1997 |
1996 |
|
|
Note |
Rupees |
Rupees |
|
|
| 23.
ADMINISTRATIVE AND OPERATING EXPENSES |
|
|
| Salaries,
allowances and benefits |
|
11,61 7,884 |
10,509,003 |
|
| Rent,
rates and taxes |
|
2,341,121 |
2,348,078 |
|
| Gas,
electricity and utilities |
|
558,271 |
530,459 |
|
| Printing
and stationery |
|
1,146,240 |
1,220,004 |
|
| Insurance |
|
913,637 |
803,994 |
|
| Repairs
and maintenance |
|
1,270,683 |
1,475,536 |
|
| Travelling
and conveyance |
|
851,017 |
1,417,331 |
|
| Staff
training expenses |
|
81,128 |
79,723 |
|
| Membership
and subscription |
|
554,646 |
475,156 |
|
| Canteen
and entertainment expenses |
|
1,671,132 |
1,286,361 |
|
| Postage
expenses |
|
147,858 |
103,060 |
|
| Telephone
expenses |
|
2,295,115 |
1,829,963 |
|
| Legal
and professional charges |
|
360,930 |
287,732 |
|
| Vehicle
running expenses |
|
1,623,050 |
1,320,431 |
|
| Advertisement |
|
214,597 |
574,763 |
|
| Depreciation |
|
3,953,350 |
2,915,437 |
|
| Stamps
and fees |
|
252,055 |
232,261 |
|
| Freight
and packing |
|
400 |
657,848 |
|
| Security
service charges |
|
31,283 |
68,211 |
|
| Penalties
levied by State Bank of Pakistan |
|
14,200 |
|
| Auditors'
remuneration |
|
| Audit Fee |
|
65,000 |
65,000 |
|
| Taxation
services |
|
44,092 |
12,500 |
|
| Special
audit fee |
|
65,000 |
45,000 |
|
| Other
certifications |
|
27,625 |
19,470 |
|
|
| Out-of-pocket
expenses |
|
15,077 |
8,295 |
|
|
|
216,794 |
150,265 |
|
|
| Donations |
|
23.1 |
5,000 |
5,000 |
|
| Professional
tax |
|
85,000 |
150,000 |
|
| Miscellaneous |
|
32,625 |
121,775 |
|
|
---------- |
---------- |
|
|
30,223,816 |
28,576,591 |
|
|
========== |
========== |
|
|
| 23.1
Recipients of donation do not include any donee in whom any director or his
spouse |
|
| had
an interest. |
|
|
| 24. TAXATION |
|
| Assessments
have been finalised upto assessment year 1996-97. Provision for current |
|
| taxation
has been made on the basis of minimum tax under section 80D of the Income Tax |
|
| Ordinance,
1979. The company has appealed against addition made by the Commissioner |
|
| of
Income-tax in respect of assessment year 1991-92 to 1996-97 resulting in
demand of |
|
| Rs.
3,551,001. The company has made full provision for the above additions. |
|
| Deferred
taxation arising due to timing differences computed under the liability
method is |
|
| estimated
at Rs. 106.245 million of which Rs. 18.878 million credit is in respect of
the current |
|
| year
(1996: Rs. 87.3 million, credit for the year Rs. 13.076 million). The
liability for deferred |
|
| taxation
is not likely to reserve in the foreseeable future and therefore no provision
has been |
|
| made
in these accounts. |
|
|
| 25.
TRANSACTIONS WITH ASSOCIATED UNDERTAKINGS |
|
|
| Insurance
premium expense |
|
91 3,637 |
803,994 |
|
| Advance
for software development |
|
1,000,000 |
- |
|
| Services
provided by |
|
1,221,055 |
987,977 |
|
| Services
provided to |
|
6,327 |
66,1 14 |
|
| Expenses
charged by |
|
21,714 |
22,405 |
|
| Expenses
charged to |
|
3,002,384 |
2,443,442 |
|
| Lease
rentals received |
|
3,333,620 |
90,200 |
|
| Cost
of assets leased |
|
19,816,111 |
810,500 |
|
| Issue
of Certificates of investment |
|
46,000,000 |
15,000,000 |
|
| Acquisition
of fixed assets |
|
370,334 |
6,585,018 |
|
| Proceeds
from sale of fixed assets |
|
- |
203,294 |
|
| Advance
against assets to be leased out |
|
7,577,721 |
- |
|
| Short
term finance obtained |
|
40,000,000 |
- |
|
| Mark-up
on short term finance obtained |
|
1,753,972 |
- |
|
| Profit
on Certificates of Investment paid |
|
2,123,068 |
31,644 |
|
|
|
|
| Transactions
with associated undertakings are entered into in the normal course of
business |
|
| at
contracted rates and terms determined in accordance with market rates. |
|
|
| 26.
REMUNERATION OF CHIEF EXECUTIVE, DIRECTOR AND EXECUTIVES |
|
| Remuneration
in respect of the above charged in these accounts is as follows · |
|
|
|
|
1997 |
|
1996 |
|
|
-------------------------------------------------- |
-------------------------------------------------- |
|
|
Chief |
|
Chief |
|
|
|
Executive |
Director |
Executives |
Total |
Executive |
Director |
Executives |
Total |
|
|
Rupees |
Rupees |
Rupees |
Rupees |
Rupees |
Rupees |
Rupees |
Rupees |
|
|
-------------------------------------------------- |
-------------------------------------------------- |
|
| Managerial |
|
| remuneration |
|
590,000 |
730,000 |
3,145,537 |
4,465,537 |
716,793 |
690,000 |
2,536,228 |
3,943,021 |
|
| Housing and |
|
|
|
|
|
| utilities |
|
280,500 |
346,500 |
1,451,437 |
2,078,437 |
265,128 |
330,000 |
1,213,288 |
1,808,416 |
|
|
|
|
|
|
| Medical
and other |
|
|
|
|
|
| expenses |
|
58,873 |
187,193 |
327,182 |
573,248 |
67,842 |
97,984 |
298,159 |
463,985 |
|
| Provident
fund |
51,000 |
63,000 |
276,060 |
390,060 |
51,197 |
60,000 |
214,770 |
325,967 |
|
|
---------- |
---------- |
---------- |
---------- |
---------- |
---------- |
---------- |
---------- |
|
|
980,373 |
1,326,693 |
5,200,216 |
7,507,282 |
1,100,960 |
1,177,984 |
4,262,445 |
6,541,389 |
|
|
========== |
========== |
========== |
========== |
========== |
========== |
========== |
========== |
|
| Number
of persons |
1 |
1 |
16 |
|
1 |
1 |
15 |
|
|
========== |
========== |
========== |
========== |
========== |
========== |
========== |
========== |
|
|
|
|
| 26.1
The Chief Executive and Director are also provided with free user of
telephones and |
|
| company
maintained cars. |
|
|
| 26.2
Fees totalling Rs.7,000 (1996: Rs.7,500) were paid to three directors (1996:
four |
|
| directors)
for attending Board Meetings during the year. |
|
|
| 26.3
The remuneration of Chief Executive in 1996 is in respect of two persons for
two |
|
| separate
portions of the year. |
|
|
| 27. GENERAL |
|
| 27.1
Figures have been rounded off to the nearest rupee. |
|
|
| 27.2
Previous year's figures have been rearranged wherever necessary for the |
|
| purpose
of comparison. |
|
|
| ATLAS
GROUP COMPANIES |
|
Year of Establishment |
|
|
Acquisition* |
|
| Shirazi
Investment (Pvt) Ltd. |
1962 |
|
| Atlas
Honda Ltd |
|
1963 |
|
| Atlas
Battery Ltd |
|
1966 |
|
| Shirazi
Trading Co. (Pvt) Ltd |
1973 |
|
| Atlas
Warehousing (Pvt) Ltd. |
|
1979 |
|
| Atlas
Office Equipment (Pvt) Ltd |
1979* |
|
| Muslim
Insurance Co. Ltd |
|
1980* |
|
| Allwin
Engineering Industries Ltd. |
1981* |
|
| Atlas
Lease Ltd. |
|
1989 |
|
| Atlas
Investment Bank Ltd. |
|
1990 |
|
| Honda
Atlas Cars (Pakistan) Ltd. |
1993 |
|
| Honda
Atlas Services (Pvt) Ltd |
1994 |
|
| Atlas
Information Technology (Pvt) Ltd. |
1996 |
|
|
|
|
|
|
|
|
|
|
|
|
|
