| DAWOOD LEASING COMPANY LIMITED |
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| (ANNUAL
REPORT 1997) |
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| CONTENTS |
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| Corporate
Information |
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| Notice
of Meeting |
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| Directors'
Report |
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| Auditors'
Report |
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| Balance
Sheet |
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| Profit
& Loss Account |
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| Statement
of Changes in Financial Position |
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| Notes
to the Accounts |
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| Pattern
of Share Holding |
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| CORPORATE
INFORMATION |
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| Board
of Directors |
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| Mr.
Rafique Dawood |
Chairman & Chief
Executive |
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| Mr.
Mehboob G. Rawjee |
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| Mr.
Ayaz Dawood |
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| Mr.
Asadullah Khawaja |
(Nominee of ICP) |
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| Mr.
A.K.M. Sayeed |
(Nominee of NIT) |
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| Mr.
Bashir A. Sheikh |
(Nominee of A1-Faysal
Inv. Bank) |
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| Mr.
Muizuddin Ahmed |
(Nominee of SLIC) |
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| Mr.
Muzafar Ali Shah |
(Alternate Nominee of
SLIC) |
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| Company
Secretary |
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| Mr.
Salman Rasheed |
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| Auditors |
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| M.
Yousuf Adil & Co., |
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| Chartered
Accountants |
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| Legal
Advisors |
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| Sattar
& Sattar Associates |
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| Mohsin
Tayebaly & Co. |
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| Bankers |
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| ANZ
Grindlays Bank plc. |
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| Faysal
Bank Ltd. |
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| Habib
Bank Ltd. |
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| Muslim
Commercial Bank Ltd. |
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| Oman
International Bank S.A.O.G. |
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| Prudential
Commercial Bank Ltd. |
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| Societe
Generale, The French & International Bank |
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| Registered
Office |
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| and
Head Office |
5-B, Lakson Square
Building # 1, |
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Sarwar Shaheed Road,
Karachi - 74200 |
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Tel: (021) 568 7778-9 |
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Fax:' (021) 568 5830 |
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E-Mail: dlc @
khi.compol.com |
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| Branch
Office |
2nd Floor, Gulberg
Heights, 6-H, Gulberg, Lahore |
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Tel: (042) 571 1308 |
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Fax: (042) 571 0296 |
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| Shares
Department |
513, Clifton Centre,
Khayaban-e-Roomi, |
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Clifton Karachi - 75600. |
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Tel: (021) 575 714 |
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| NOTICE
OF THE THIRD ANNUAL GENERAL MEETING |
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| Notice
is hereby given that the Third Annual General Meeting of the Company will be
held in the Auditorium |
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| of
The Institute of Chartered Accountants of Pakistan, G-31, Block 8, Clifton,
Karachi on December 12, 1997 |
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| at
11 A.M. to transact the following business: |
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| Ordinary
business |
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| 1.
To confirm the Minutes of the Second Annual General Meeting held on November
14, 1996. |
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| 2.
To receive, consider and adopt the Audited Accounts of the Company for the
year ended June 30, 1997 |
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| together
with the Directors' and Auditors' Report thereon. |
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| 3.
To approve payment of Cash Dividend to the Shareholders @ Rs. 1.25 per share
of Rs. 10/- each for |
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| the
year ended June 30, 1997 as recommended by the Board of Directors. |
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| 4.
To appoint Auditors for the year 1997-98 and to fix their remuneration. The
retiring Auditors being |
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| eligible
offer themselves for re-appointment. |
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| Special
business |
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| 1.
To consider and approve, if deemed fit, changes in the Object Clause of the
Memorandum of |
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| Association
of the Company. |
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| 2.
To consider and approve, increase in Authorised Capital of the Company from
Rs. 300 million to |
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| Rs.
500 million. As such, Capital Clause of the Memorandum of Association and
Article 5 of the |
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| Articles
of Association. be accordingly amended to give affect to the proposed
increase in the |
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| Authorized
Capital of the Company. |
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| 3.
To consider and approve, the remuneration of Chief Executive and whole time
Working Director. |
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| Any
other business |
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| 1.
To transact any other business as may be placed before the meeting with the
permission of the Chair. |
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| Statements
required under section 160 of the Companies Ordinance, 1984 and draft
Resolutions pertaining to
i:~.~ |
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| the
Special business are being sent to the shareholders alongwith this
notice.
~5~ |
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| November
20, 1997 |
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| Karachi. |
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| Notes |
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| 1.
The Register of Members of the Company will remain closed from December 3,
1997 to |
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| December
12, 1997 (both days inclusive). |
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| 2.
A member entitled to attend and vote at a General Meeting is entitled to
appoint a Proxy to attend and |
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| vote
instead of him/her. No person other than a member shall act as a Proxy. |
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| 3.
An instrument appointing a Proxy and the Power-of-Attorney or other Authority
(if any) under which |
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| it
is signed or a notarially certified copy of the Power or Authority, in order
to be valid, must be |
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| deposited
at the Registered Office of the Company, at the latest by 11 A.M. on December
10, 1997 |
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| and
must be duly stamped, signed and witnessed. |
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| 4.
The Shareholders are requested to notify any change in their address
immediately. |
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| STATEMENTS
IN REGARD TO SPECIAL BUSINESS AS REQUIRED UNDER SECTION 160 OF |
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| THE
COMPANIES ORDINANCE, 1984. |
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| The
following three statements set out the material facts concerning the special
business to be transacted at the |
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| Third
Annual General Meeting of Dawood Leasing Company Limited to be held on
December 12, 1997. These |
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| statements
include the draft resolutions. |
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| Statement
pertaining to special business # 1 and draft resolutions: |
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| Approval
of the shareholders is sought for amending the Object Clause of the
Memorandum of Association of |
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| the Company. |
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| The
directors of the Company are of the opinion that the alteration in the Object
Clause of the Memorandum |
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| of
Association as proposed was necessitated to bring it in line with the
requirements of the NBFI Rules of |
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| Business
and to undertake such other businesses which could conveniently be undertaken
by the Company with |
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| its
main object, i.e. leasing business and arc also permissible under the Rules. |
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| None
of the director has any special interest in this special business other than
to the extent of his interest in |
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| the Company. |
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| For
this purpose it is intended that the following Resolutions be passed, with or
without modification, as Special |
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| Resolutions. |
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| "Resolved that the following addition be made in Sub Clauses 1.5 and 1.7
of clause 1 (a) of the Object Clause |
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| of
the Company's Memorandum of Association: |
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| In
sub clause 1.5 after the word "years" following be added. "or
any other shorter period prescribed from time |
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| to
time by the Competent Authority responsible for regulating the conduct of
leasing companies in the country." |
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| In
sub clause 1.7 at the end of the sentence, after full stop the following new
sentence be added. "The |
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| company
however, may be entitled to provide funds to construction companies,
builders, developers, |
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| companies
dealing in real-estate and to any other businesses, provided that the
Competent Authority |
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| responsible
for regulating the conduct of leasing companies in the country permits
leasing companies to fund |
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| and
finance such activities." |
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| Further
Resolved that the sub clauses 1.2 and 1.6 of clause l(a) be
and are hereby deleted from the Object |
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| Clause
of the Memorandum of Association of the Company, and subsequent sub clauses
be renumbered. |
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| Further
Resolved that the following five clauses be and are hereby
inserted after clause 9 in the Object Clause |
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| of
the Memorandum of Association of the Company and subsequent clauses be
renumbered. |
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| Clause 10 |
To solicit, mobilize,
accept local and foreign currency capital and/or funds and credit lines |
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for leasing and
establishing operations thereof. |
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| Clause 11 |
To issue certificates of
investment in local and foreign currencies after obtaining permission |
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from the Corporate Law
Authority and/or the State Bank of Pakistan. |
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| Clause 12 |
To draw, make, accept,
endorse, establish, discount, execute and issue bills of exchange, |
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guarantees, foreign or
inland letters of credit, leases and other negotiable instruments for |
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itself or on behalf of
its clients, subject to any permission required by the law. |
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| Clause 13 |
To invest funds in
Federal Investment Bonds, Certificate of Investments, Term Finance |
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Certificates, Treasury
Bills, Securities, Shares, Portfolio Management, Modaraba Certifi- |
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cates, Bonds and in any
other instrument of similar nature and to sponsor, participate and |
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underwrite the issue or
conversion of shares and securities including Term Finance |
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Certificates, debentures
and bonds issued or being issued by the bodies corporate or |
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-otherwise, either in
Pakistan or abroad subject to restrictions applicable to leasing compa- |
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nies. |
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| Clause 14 |
To provide and/or assist
in acquiring general assistance and consultancy services in the |
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identification,
development, promotion, re-organization and financing of the projects in the |
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industrial, agricultural,
commercial and other sectors of the economy. |
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| Further
Resolved that the Chairman & Chief Executive and/or
Company Secretary be and is hereby |
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| authorized
to take all steps necessary to give effect to the above resolutions,
including the formalities of the |
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| Corporate
Law Authority and the Registrar, Company Registration Office." |
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| The
Shareholders hereby confirm and ratify and shall be bound to confirm and
ratify all acts, deeds and things |
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| of
the Chairman & Chief Executive and/or Company Secretary that they may be
required to do in order to |
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| give
effect to the above Resolutions. |
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| Statement
pertaining to special business # 2 and draft resolutions: |
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| In
order to provide for increase in capital for future growth, the Board of
Directors proposes that the Authorised |
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| Capital
be increased from Rs. 300,000,000/- to Rs. 500,000,000/-. |
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| None
of the director has any special interest in this special business other than
to the extent of his interest in |
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| the Company. |
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| For
this purpose it is intended that the following Resolutions be passed, with or
without modification, as Special |
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| Resolution. |
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| "Resolved that the Authorized Capital of the Company be and is hereby
increased from |
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| Rs.
300,000,000/- (Rupees three hundred million) divided into 30,000,000 (thirty
million) Ordinary Shares of |
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| Rs.
10/- each to Rs. 500,000,000/- (Rupees five hundred million) divided into
50,000,000 (fifty million) |
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| Ordinary
Shares of Rs. 10/- each, and as such, the Capital Clause of the Memorandum of
Association and |
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| Article
5 of the Articles of Association of the Company be amended accordingly to
affect the changes proposed |
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| and
approved in the Capital of the Company. |
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| Further
Resolved that the Chairman & Chief Executive and/or
Company Secretary be and is hereby |
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| authorized
to take all steps necessary to give effect to the above resolutions,
including the formalities of the |
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| Corporate
Law Authority and the Registrar, Company Registration Office." |
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| The
Shareholders hereby confirm and ratify and shall be bound to confirm and
ratify all acts, deeds and things |
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| of
the Chairman & Chief Executive and/or Company Secretary that they may be
required to do in order to give |
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| effect
to the above Resolutions. |
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| Statement
pertaining to special business # 3 and draft resolution: |
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| The
Shareholders of the Company in the First Annual General Meeting held on
December 6, 1995 had approved |
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| an
aggregate amount of remuneration of Rs. 1.56 million per annum to the Chief
Executive and Rs. 1.94 million |
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| per
annum to the two. Working Directors. The Shareholders further approved that
these remuneration are |
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| exclusive
of perquisites and retirement benefits to which they are entitled under the
terms of employment |
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| approved
by the Board. The Board, after considering the factors such as devaluation,
inflation and the |
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| remuneration
package provided by other leasing companies is of the opinion that present
remuneration package |
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| requires
revision. |
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| With
this background, approval of the Shareholders is sought for the remuneration
payable to the Chairman |
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| &
Chief Executive and whole time Working Director in accordance with the terms
and conditions of service |
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| approved
by the Board. For this purpose it is intended to propose that the following
Resolution be passed as |
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| an
Ordinary Resolution, namely: |
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| "Resolved that the Company hereby approves and authorized the holding of
office of profit and payment as |
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| remuneration
consisting of salary and allowances to: |
|
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| a)
Mr. Rafique Dawood, Chairman & Chief Executive in an aggregate amount not
exceeding |
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| Rs.
2 million (two million) per annum exclusive of bonuses, perquisites and
retirement benefits |
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| to
which he is entitled under the terms of employment and policy of the Company
approved by |
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| the Board. |
|
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| b)
Mr. Ayaz Dawood, Working Director in an aggregate amount not exceeding Rs. 1
million (one |
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| million)
per annum exclusive of bonuses, perquisites and retirement benefits to which
he is |
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| entitled
under the terms of employment and policy of the Company approved by the
Board." |
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|
| Mr.
Rafique Dawood, Chairman and Chief Executive and Mr. Ayaz Dawood, Working
Director of the |
|
| Company
are interested in the business of the Company to the extent of their
shareholding in the Company and |
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| their
remuneration. |
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|
| DIRECTORS'
REPORT |
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| We
are pleased to present your Company's Third Annual Report for the year ended
June 30, 1997. You will |
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| note
that the performance and growth of your company has gained momentum. |
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|
| Operating
Results |
|
1997 |
1996 |
|
|
Rupees |
Rupees |
|
|
| Lease Income |
|
121,291,858 |
84,664,664 |
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| Other Income |
|
670,720 |
4,452,231 |
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|
121,962,578 |
89,116,895 |
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|
========== |
========== |
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| Allowance
for Potential Lease Losses |
|
11,500,000 |
5,000,000 |
|
|
========== |
========== |
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| Profit
Before Taxation |
|
46,406,524 |
46,210,588 |
|
| Provision
for Taxation |
|
1,243,016 |
1,273,702 |
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|
---------- |
---------- |
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| Profit
After Taxation |
|
45,163,508 |
44,936,886 |
|
| Unappropriated
Profit Brought Forward |
|
1,533,416 |
4,333,907 |
|
|
| Profit
Available for Appropriation |
|
46,696,924 |
49,270,793 |
|
|
| Appropriations |
|
| Transfer
to Statutory Reserve |
|
9,032,702 |
8,987,377 |
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| Transfer
to General Reserve' |
|
5,000,000 |
7,500,000 |
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| Proposed
Cash Dividend |
|
31,250,000 |
31,250,000 |
|
|
|
45,282,702 |
47,737,377 |
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|
---------- |
---------- |
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| Unappropriated
Profit Carried Forward |
|
1,414,222 |
1,533,416 |
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|
========= |
========= |
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| Proposed
Cash Dividend Per Share |
|
1.25 |
1.25 |
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| Book
Value Per Share |
|
11.82 |
11.26 |
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|
|
| Review
of Operations |
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|
| The
fiscal 1996-97 was a tough year for the country. GDP growth slowed down with
a sharp decline in the |
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| output
of agricultural and manufacturing sector. The textile sector, the backbone of
our economy, continued |
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| to
languish. There was a noticeable decline in other sectors as well. Frequent
devaluation, political |
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| uncertainty,
imposition of heavy taxes, overnight increase of 3% in State Bank discount
rate in October 1996, |
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| resulted
in higher cost of funds. Utility tariffs and support prices of agricultural
commodities were increased, |
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| further
augmenting the inflation rate and depressing the economic activity in our
country. |
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| The
performance of stock market has also been adversely affected on account of
economic conditions and |
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| lackluster
interest of foreign fund managers. Only fourteen new companies were listed on
the Karachi Stock |
|
| Exchange
out of which twelve companies were significantly under subscribed. Investment
climate was |
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| extremely
negative and very little new capital investment had taken place.
Additionally, the differences with |
|
| IMF
over the management of the economy had shied away investors. However, with
the new elected |
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| government
in place, and with its swift and timely initiation of reforms in various
fields, a ray of hope on the |
|
| horizon
has emerged. |
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|
| We
are pleased to report that despite depressed economic conditions, the lease
income of your company has |
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| jumped
from Rs. 84.66 million to Rs. 121.29 million showing a significant increase
of 43.3% over the past year. |
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| New
leases worth Rs. 248.68 million were written during the year under review.
The net investment in lease |
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| finance
has gone-up from Rs. 510.57 million to Rs. 620.50 million showing an increase
of 21.5%. |
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| In
continuation of our prudent accounting approach, after writing off the entire
pre-operational expenditure of |
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| Rs.
2.34 million in June 1995 accounts, the company has continued to build-up a
non-specific reserve as |
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| Allowance
for Potential Lease Losses. This year, an amount of Rs. 11.50 million has
been added to increase |
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| the
Allowance for Potential Lease Losses to Rs. 16.50 million, which is around
2.7% of net investment in lease |
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| finance.
The total of mandatory Statutory Reserve, General Reserve and Allowance for
Potential Lease Losses |
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| has
grown from 6.8% to 9.8% of net investment in lease finance. The philosophy of
building reserves will |
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| strengthen
your Company's ability to mitigate any negative eventuality, which is a
significant part of its |
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| business
strategies. |
|
|
| Dawood
Leasing has continued to follow a cautious policy of writing leases. We have
always maintained a |
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| fairly
diversified portfolio. This year, the energy and natural gas sector is at the
top of the list with an exposure |
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| of 18%. |
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| Your
company's target market has been and will continue to be the infrastructure
related projects, small |
|
| businesses
and consumer lease financing. We encourage leasing computers to technical
training institutions and |
|
| individuals.
As of June 30, 1997, our total customer base has risen to 838 leases written
to 821 clients. |
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|
| We
are pleased to report that this year too, despite bearish stock market
conditions, we were able to realize a |
|
| modest
capital gain and achieve a 23.1% value increase in our stock portfolio. |
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| Future
Business Prospects |
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|
| The
new Government has announced a host of packages to address the issue of
economic stagnation prevalent |
|
| in
the country. These packages address the following: |
|
|
| ·
Replacement of demand management economic policies with supply-side economic
policies, |
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| ·
Tighter control on government borrowings, |
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| ·
Allowing private sector greater access to credit, |
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| ·
Rightsizing in government departments and state owned enterprises, |
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| ·
Preparing public sector financial institutions for privatization through
rightsizing and debt recovery |
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| process, |
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| ·
Reduction in tax rates, mark-up rates and State Bank of Pakistan's discount
rate in two steps from |
|
| 20% to 18.5%, |
|
| ·
Limiting increase in Utility prices and privatization plan of utility
companies, |
|
| ·
Elimination of Central Excise duty on bank borrowings and lease financing,
and |
|
| ·
Negotiation of $ 1.6 billion ESAF/EFF while terminating SBA with IMF. |
|
|
| We
hope and pray that these initiatives of the present government should assist
the economy in its revival, |
|
| although
some economists have a rather different view on the possibility of success of
supply-side economic |
|
| policies. |
|
|
| With
this perspective, your Company has adopted a more cautious and prudent
approach to assess new lease |
|
| proposals,
select viable sectors and continue to maintain a well-diversified portfolio
of leases. We strongly |
|
| support
the initiative of the government in the field of Information Technology and
Computer Education, and |
|
| hence
are already providing lease financing to a number of educational institutions
and individuals. Your |
|
| company
shall continue to serve promising, feasible, environmentally friendly and
socio-economically |
|
| beneficial
entities. |
|
|
| Resource
mobilization |
|
|
| Your
Company has been extremely successful and is continuing the process of
negotiating a number of |
|
| additional
credit lines from both local and multilateral institutions. Your Company on
September 18, 1997 |
|
| signed
an agreement with the Asian Development Bank, to participate in the $100
million Financial Sector |
|
| Intermediation
Loan Project (FSIL). This line is available on a first come first serve basis
to a selected group |
|
| of
financial institutions. This is a long-term fifteen year line including a
three year grace period. We expect to |
|
| draw
down against this line some time early next year, after completion of all
related formalities. |
|
|
| We
are applying to the Corporate Law Authority for their permission to issue
Certificate of Investments |
|
| (COI's).
We expect to issue COI's early next year to enhance our competitive position
in the leasing industry. |
|
|
| Your
Company also expects to be chosen by at least one other multilateral agency
within the next twelve |
|
| months
for long-term funding. Our bankers have demonstrated their confidence in
Dawood Leasing by |
|
| enhancing
our existing credit lines. |
|
|
| Your
Company believes in borrowing from a wide range of selected financial
institutions, and we have been |
|
| successful
in establishing a relationship with nineteen different financial
institutions. |
|
|
| Pattern
of Share Holding |
|
|
| The
pattern of Share-holding appears on page 29. |
|
|
| Auditors |
|
|
| The
retiring auditors, being eligible, offer themselves for re-appointment. |
|
|
| Board
of Directors |
|
|
| During
the year under report, Mr. Muizuddin Ahmed, Chairman State Life Insurance
Corporation has joined |
|
| the
Board in place of Mr. S. Gulrez Yazdani. The Board wishes to place on record
its appreciation for the |
|
| valuable
services rendered to the company by Mr. S. Gulrez Yazdani. |
|
|
| The
Directors are pleased to welcome Mr. Muizuddin Ahmed on the Board and Mr.
Muzafar Ali Shah, as his |
|
| alternate
Director. |
|
|
| Acknowledgement |
|
|
| We
would like to endorse our appreciation for the confidence and support of our
valuable customers and |
|
| shareholders
in making this year a success. The support and guidance provided by the
Ministry of Finance, the |
|
| Corporate
Law Authority and the State Bank of Pakistan is highly appreciated. We are
also grateful to our |
|
| various
lease syndicate partners, lending institutions for their support and
confidence and above all, the |
|
| dedication
and hard work of our team members that has made it all possible. |
|
|
| We
reiterate our mission to work with dedication and dynamism for the benefit of
all the stakeholders. |
|
|
| October
14, 1997 |
|
| Karachi. |
|
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed balance sheet of Dawood Leasing Company Limited as
at June 30, |
|
| 1997
and the related profit and loss account and the statement of changes in
financial position (cash |
|
| flow
statement) together with the notes forming part thereof, for the year ended
on that date 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 |
|
| forming
part thereof have been drawn up in conformity with the Companies |
|
| Ordinance,
1984, and are in agreement with the books of account and are |
|
| further
in accordance with accounting policies consistently applied; |
|
|
| (ii)
the expenditure incurred during the year was for the purpose of the |
|
| Company's
business; and |
|
|
| (iii)
the business conducted, investments made and the expenditure incurred |
|
| during
the year were in accordance with the objects of the company; |
|
|
| c)
in our opinion and to the best of our information and according to the
explanations |
|
| given
to us, the balance sheet, profit and loss account and the statement of
changes |
|
| in
financial position (cash flow statement), together with the notes thereon,
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 financial position 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. |
|
|
| October
14, 1997 |
|
M. Yousuf Adil & Co. |
|
| Karachi. |
|
Chartered Accountants |
|
|
|
|
| BALANCE
SHEET AS AT JUNE 30, 1997 |
|
|
1997 |
1996 |
|
|
Note |
Rupees |
Rupees |
|
| SHARE
CAPITAL AND RESERVES |
|
|
| Authorized |
|
| 30,000,000
Ordinary Shares of Rs. 10/- each |
|
300,000,000 |
300,000,000 |
|
|
========= |
========= |
|
| Issued,
Subscribed and Paid-up |
|
| 25,000,000
Ordinary Shares of Rs. 10/- each. |
|
| Fully
Paid in Cash |
|
250,000,000 |
250,000,000 |
|
|
| Statutory
Reserve |
|
3 |
21,603,556 |
12,570,854 |
|
| General
Reserve |
|
4 |
22,500,000 |
17,500,000 |
|
| Unappropriated
Profit |
|
1,414,222 |
1,533,416 |
|
|
295,517,778 |
281,604,270 |
|
| ALLOWANCE
FOR POTENTIAL LEASE LOSSES |
|
16,500,000 |
5,000,000 |
|
| REDEEMABLE
CAPITAL |
|
5 |
82,014,234 |
59,890,256 |
|
| LONG
TERM LOANS |
|
6 |
55,000,000 |
-- |
|
| LIABILITIES
AGAINST ASSETS SUBJECT TO |
|
|
|
| FINANCE
LEASE |
|
|
7 |
283,980 |
165,424 |
|
|
|
|
|
| LONG
TERM LEASE DEPOSITS |
|
8 |
62,157,679 |
40,605,063 |
|
| CURRENT
LIABILITIES |
|
|
|
| Short
Term Borrowings |
|
9 |
65,984,771 |
42,325,635 |
|
| Current
Maturity of Redeemable Capital |
|
50,317,202 |
61,733,662 |
|
| Current
Maturity of Lease Liabilities |
|
|
209,377 |
95,228 |
|
| Current
Maturity of Lease Deposits |
|
|
4,998,876 |
|
| Accrued
and Other Liabilities |
|
10 |
14,031,459 |
15,635,987 |
|
| Proposed
Cash Dividend |
|
|
31,250,000 |
31,250,000 |
|
| Taxation |
|
|
1,831,850 |
1,142,790 |
|
|
|
168,623,535 |
152,183,302 |
|
| CONTINGENCY
AND COMMITMENT |
|
11 |
|
|
|
|
---------- |
---------- |
|
|
680,097,206 |
539,448,315 |
|
|
========== |
========== |
|
|
| The
annexed notes from 1 to 23 form an integral part of these accounts. |
|
|
|
| FIXED
ASSETS - TANGIBLE |
|
12 |
11,497,216 |
11,221,240 |
|
| NET
INVESTMENT IN LEASE FINANCE |
|
| Minimum
Lease Payments Receivable |
|
740,402,106 |
655,910,575 |
|
| Residual
Value of Lease Assets |
|
81,982,870 |
51,324,880 |
|
|
---------- |
---------- |
|
|
822,384,976 |
707,235,455 |
|
| Unearned
Income |
|
(201,881,334) |
-196,659,686 |
|
|
---------- |
---------- |
|
| Net
Investment in Lease Finance |
|
620,503,642 |
510,575,769 |
|
| Current Portion
of Net Investment in Lease Finance |
|
(212,364,724) |
(121,544,593) |
|
|
---------- |
---------- |
|
|
|
408,138,918 |
389,031,176 |
|
| LONG
TERM LOANS - STAFF |
|
13 |
1,650,427 |
-- |
|
| CURRENT
ASSETS |
|
| Current Portion of Net
Investment in |
|
| Lease
Finance |
|
212,364,724 |
121,544,593 |
|
| Short
Term Investments |
|
14 |
29,456,702 |
7,188,400 |
|
| Advances
Against Lease Commitment |
|
|
|
3,750,000 |
|
| Advances,
Deposits and Prepayments |
|
15 |
3,311,333 |
1,438,887 |
|
| Other
Receivables |
|
16 |
521,590 |
1,237,871 |
|
| Cash
and Bank Balances |
|
17 |
13,156,296 |
4,036,148 |
|
|
258,810,645 |
139,195,899 |
|
|
---------- |
---------- |
|
|
680,097,206 |
539,448,315 |
|
|
========== |
========== |
|
|
|
|
| PROFIT
& LOSS ACCOUNT |
|
| FOR
THE YEAR ENDED JUNE 30, 1997 |
|
|
|
|
1997 |
1996 |
|
|
Note |
Rupees |
Rupees |
|
| Income |
|
|
|
|
|
| Lease Income |
|
121,291,858 |
84,664,664 |
|
| Return
on Deposits and Investments |
|
18 |
461,924 |
2,164,772 |
|
| Gain
on Sale of Investments |
|
143,663 |
2,227,421 |
|
| Other Income |
|
65,133 |
60,038 |
|
|
|
|
|
121,962,578 |
89,116,895 |
|
| Expenditure |
|
|
|
| Administration
and Operating Expenses |
|
19 |
18,822,394 |
14,448,630 |
|
| Financial
Charges |
|
20 |
45,233,660 |
23,457,677 |
|
| Allowance
for Potential Lease Losses |
|
11,500,000 |
5,000,000[ |
|
|
---------- |
---------- |
|
|
75,556,054 |
42,906,307 |
|
|
---------- |
---------- |
|
| Profit
Before Taxation |
|
46,406,524 |
46,210,588 |
|
|
|
|
| Provision
for Taxation |
|
| Current Year |
|
10,360,001 |
546,042 |
|
| Prior Year |
|
207,016 |
727,660 |
|
|
---------- |
---------- |
|
|
1,243,016 |
1,273,702 |
|
|
| Profit
After Taxation |
|
45,163,508 |
44,936,886 |
|
| Unappropriated
Profit Brought Forward |
|
1,533,416 |
4,333,907 |
|
|
---------- |
---------- |
|
| Profit
Available for Appropriation |
|
46,696,924 |
49,270,793 |
|
|
|
|
| Appropriations |
|
| Transferred
to Statutory Reserve |
|
9,032,702 |
8,987,377 |
|
| Transferred
to General Reserve |
|
5,000,000 |
7,500,000 |
|
| Proposed
Cash Dividend @ 12.5% (1996 : 12.5%) |
|
31,250,000 |
31,250,000 |
|
|
---------- |
---------- |
|
|
45,282,702 |
47,737,377 |
|
|
---------- |
---------- |
|
| Unappropriated
Profit Carried Forward |
|
1,414,222 |
1,533,416 |
|
|
========== |
========== |
|
|
| The
annexed notes from 1 to 23 form an integral part of these accounts. |
|
|
|
| STATEMENT
OF CHANGES IN FINANCIAL POSITION |
|
| FOR
THE YEAR ENDED JUNE 30, 1997 |
|
|
1997 |
1996 |
|
| A.
CASH FLOW FROM OPERATING ACTIVITIES |
|
Rupees |
Rupees |
|
|
| Profit
After Taxation |
|
45,163,508 |
44,936,886 |
|
| Adjustment
to Determine Net Cash Flows: |
|
|
|
| Depreciation |
|
2,712,529 |
2,021,468 |
|
| Gain
on Sale of Investment |
|
(143,663) |
(2,227,421 ) |
|
| Financial
Charges |
|
45,233,660 |
23,457,677 |
|
| Loss
/ (Gain) on Sale of Assets |
|
6,712 |
(60,038) |
|
| Allowance
for Potential Lease Losses |
|
11,500,000 |
5,000,000 |
|
|
|
59,309,238 |
28,191,686 |
|
|
---------- |
---------- |
|
| Operating
Profit Before Working Capital Changes |
|
104,472,746 |
73,128,572 |
|
|
| Working
Capital Changes: |
|
| Advances,
Deposits and Prepayments |
|
(1,705,721) |
(888,404) |
|
| Other
Receivables |
|
716,281 |
(442,313) |
|
| Accrued
and Other Liabilities |
|
(2,616,830) |
3,525,230 |
|
| Taxation |
|
689,060 |
972,790 |
|
|
---------- |
---------- |
|
|
(2,917,210) |
3,167,303 |
|
|
---------- |
---------- |
|
|
101,555,536 |
76,295,875 |
|
| Less
: Financial Charges Paid |
|
(44,522,588) |
(16,280,248) |
|
|
---------- |
---------- |
|
|
| Net Cash Provided By
Operating Activities |
|
57,032,948 |
60,015,627 |
|
|
| B.
CASH FLOW FROM FINANCING ACTIVITIES |
|
|
| Redeemable
Capital Obtained |
|
75,000,000 |
105,000,000 |
|
| Long
Term Loans Obtained |
|
55,000,000 |
-- |
|
| Lease
Finance Obtained |
|
1,186,000 |
349,000 |
|
| Redemption
of Redeemable Capital |
|
(64,292,482) |
(13,376,082) |
|
| Repayment
of Lease Liability |
|
(914,595) |
(365,418) |
|
| Security
Deposit |
|
(38,7001) |
(550) |
|
| Long
Term Lease Deposits |
|
26,551,492 |
13,450,943 |
|
| Short
Term Borrowings |
|
23,659,136 |
32,325,635 |
|
| Dividend
Paid |
|
(30,948,770) |
-- |
|
|
| Net
Cash Provided By Financing Activities |
|
85,202,081 |
137,383,528 |
|
|
| C.
CASH FLOW USED IN INVESTING ACTIVITIES |
|
| Investment
in Leases (Net) |
|
(109,927,873) |
(257,200,752) |
|
| Capital
Expenditure |
|
(3,815,705) |
( 1,076,262) |
|
| Proceeds
from Sale of Fixed Assets |
|
820,488 |
334,838 |
|
| Long
Term Loans - Staff |
|
(1,817,152) |
-- |
|
| Investment
in Marketable Securities |
|
(25,801,889) |
(15,348,500) |
|
| Sale
Proceeds of Marketable Securities |
|
3,677,250 |
41,035,381 |
|
| Advance
Against Lease Commitment |
|
3,750,000 |
33,250,000 |
|
|
---------- |
---------- |
|
| Net
Cash Used in Investing Activities |
|
(133,114,881) |
(199,005,295) |
|
|
---------- |
---------- |
|
| Net
Increase/(Decrease) in Cash and Cash Equivalent |
|
9,120,148 |
(1,606,140) |
|
| Cash
and Cash Equivalent at the Beginning of the Year |
4,036,148 |
5,642,288 |
|
|
---------- |
---------- |
|
| Cash
and Cash Equivalent at the End of the Year |
|
13,156,296 |
4,036,148 |
|
|
========== |
========== |
|
|
|
|
|
|
|
| NOTES
TO THE ACCOUNTS - JUNE 30, 1997 |
|
|
| 1.
THE COMPANY AND ITS OPERATIONS |
|
|
| The
Company was incorporated on June 22, 1994 as a public limited company and is
listed on the |
|
| Karachi
and Islamabad Stock Exchanges. The Company primarily carries on the business
of leasing. |
|
|
| 2.
SIGNIFICANT ACCOUNTING POLICIES |
|
|
| 2.1
Accounting Convention |
|
| These
financial statements have been prepared under the "historical cost
convention". |
|
|
| 2.2
Revenue Recognition |
|
|
| The
company follows the finance method in recognizing income on lease contracts.
Under |
|
| this
method the unearned income i.e., the excess of aggregate lease rentals and
the estimated |
|
| residual
value over the cost of the leased asset is deferred and then amortized over
the terms |
|
| of
the lease, so as to produce a constant rate of return on net investment in
the lease. |
|
|
| Front
end fee, commitment fee and other commissions are taken to income when
realized. |
|
|
| The
transaction of purchase and resale obligation of Government Securities at
contracted rates |
|
| for
specified period of time are recorded at the contracted purchase price and
the differential |
|
| of
the contracted purchase and resale prices is taken to income. |
|
|
| Return
on securities is recognized on accrual basis. |
|
|
| Dividend
income is recognized at the time of closure of the shares transfer book of
the |
|
| company
declaring the dividend. |
|
|
| 2.3
Staff Retirement Benefits |
|
|
| The
Company operates a funded contributory Provident Fund Scheme for its
employees. The |
|
| employees
are also entitled to gratuity after completion of 3 years continuous service
in |
|
| accordance
with the service rules of the Company. |
|
|
| 2.4
Allowance for Potential Lease Losses |
|
|
| The
Company, as a prudent policy, makes a general provision at a reasonable
level, which |
|
| in
the judgement of management is adequate to provide for potential losses on
lease portfolio |
|
| that
can be reasonably anticipated. The allowance is created by charge to income. |
|
|
| 2.5 Taxation |
|
|
|
| The
charge for current taxation is based on taxable income at the current rates
of taxation. |
|
| On
lease income, it is computed as if all leases are operating leases, after
taking into account |
|
| allowances
available for depreciation in respect of fixed assets under lease. |
|
|
| The
tax effect for deferred taxation is calculated using the liability method on
all major timing |
|
| differences
which are expected to reverse in foreseeable future. As a measure of prudence |
|
| deferred
tax debits are not accounted for.
~~~~ |
|
|
| 2.6
Tangible Fixed Assets and Depreciation |
|
|
| These
are stated at cost less accumulated depreciation. Depreciation is charged to
income, |
|
| applying
the straight line method whereby cost of an asset is written-off over its
estimated |
|
| useful
life. A full year's depreciation is charged on all assets acquired during the
year while |
|
| no
depreciation is charged on assets disposed off during the year. |
|
|
| Normal
repairs and maintenance are charged to income as and when incurred. Gains and |
|
| losses
on disposal, if any, are taken to profit and loss account. |
|
|
| 2.7
Investments |
|
|
| Short
term investments are stated at lower of moving average cost and
market/break-up value |
|
| on
aggregate portfolio basis. |
|
|
|
1997 |
1996 |
|
| 3.
STATUTORY RESERVE |
|
Rupees |
Rupees |
|
|
| Opening
Balance |
|
12,570,854 |
3,583,477 |
|
| Transferred
During the Year |
|
9,032,702 |
8,987,377 |
|
|
---------- |
---------- |
|
|
21,603,556 |
12,570,854 |
|
|
========== |
========== |
|
|
| The
reserve is created by transferring 20% of the after tax profit for the year
which is required |
|
| under
Rule-3 of the State Bank of Pakistan's Prudential Regulations for Non-Banking |
|
| Financial
Institutions. |
|
|
|
1997 |
1996 |
|
| 4.
GENERAL RESERVE |
|
Rupees |
Rupees |
|
|
| Opening
Balance |
|
17,500,000 |
10,000,000 |
|
| Transferred
During the Year |
|
5,000,000 |
7,500,000 |
|
|
---------- |
---------- |
|
|
22,500,000 |
17,500,000 |
|
|
========== |
========== |
|
|
|
| 5.
REDEEMABLE CAPITAL - |
|
| SECURED
(NON-PARTICIPATORY) |
|
|
Morabaha |
Morabaha |
Finance Under |
1997 |
1996 |
|
|
Term |
Finance |
Certificates |
Finance |
Mark-up |
Arrangement |
Rupees |
Rupees |
|
|
I |
II |
III |
|
I |
II |
|
|
|
|
|
|
| Opening
Balance |
43,311,959 |
43,311,959 |
|
30,000,000 |
*5,000,000 |
-- |
121,623,918 |
30,000,000 |
|
|
| Obtained
During the Year |
-- |
-- |
25,000,000 |
30,000,000 |
-- |
20,000,000 |
75,000,000 |
105,000,000 |
|
|
---------- |
---------- |
---------- |
---------- |
---------- |
---------- |
---------- |
---------- |
|
|
43,31 1,959 |
43,311,959 |
25,000,000 |
60,000,000 |
5,000,000 |
20,000,000 |
196,623,918 |
135,000,000 |
|
|
| Paid
During the Year |
(15,182,899) |
(15,182,899) |
-- |
(30,000,000) |
(1,367,864) |
(2,558,820) |
(64,292,482) |
(13,376,082) |
|
28,129,060 |
28,129,060 |
25,000,000 |
30,000,000 |
3,632,136 |
17,441,180 |
132,331,436 121,623,918 |
|
|
| Payable
Within one Year |
|
| Shown
Under Current |
|
| Liabilities |
(17,956,149) |
(17,956,149) |
(6,804,386) |
-- |
(1,647,600) |
(5,952,918) |
(50,317,202) |
(61,733,662) |
|
---------- |
---------- |
---------- |
---------- |
---------- |
---------- |
---------- |
---------- |
|
| Rupees |
|
10,172,911 |
10,172,911 |
18,195,614 |
30,000,000 |
1,984,536 |
11,488,262 |
82,014,234 |
59,890,256 |
|
|
========= |
========= |
========= |
========= |
========= |
========= |
========= |
========= |
|
|
|
|
|
Morabaha |
Morabaha |
Finance Under |
|
|
Term |
Finance |
Certificates |
Finance |
Mark-up |
Arrangement |
|
|
|
I |
II |
III |
|
I |
II |
|
|
| Repayment |
|
Jan 17, 1996 |
Mar.03, 1996 |
Sept 27, 1997 |
Lumpsum on |
Nov. 06, 1996 |
Mar. 14, 1997 |
|
| Period |
|
Aug 17, 1998 |
Sept 03, 1998 |
Mar. 27, 2000 |
Dec. 30, 1998 |
May 06, 1999 |
Dec. 14, 1999 |
|
|
|
|
----------------(Rupees)'------------------- |
|
| Sale Price |
|
50,000,000 |
50,000,000 |
25,000,000 |
30,000,000 |
20,000.00 |
20,000,000 |
|
| Purchase
Price |
68,882,214 |
68,882,214 |
35,712,210 |
42,000,000 |
31,708,440 |
277,690,214 |
|
| Prompt
Payment |
2,503,968 |
2,503,968 |
1,271,106 |
-- |
4,357,080 |
-- |
|
| Bonus |
|
|
| These
are secured against hypothecation of all properties and assets including book
debts of the Company ranking |
|
| pari
passu with each other and with the charge created to secure long term loans
(Refer Note 6) and short term |
|
| borrowings
(Refer Note 9). |
|
|
| *
The sanctioned amount of finance under mark-up arrangement is Rs. 20 million
out of which Rs.5 million was |
|
| received
on May 07, 1996. |
|
|
|
Limit in |
1997 |
1996 |
|
| 6.
LONG TERM LOANS |
|
Rs. million |
Rupees |
Rupees |
|
| Secured |
|
| From
Investment Bank (6.1) |
|
20 |
20,000,000 |
-- |
|
| Unsecured |
|
|
|
| From
Development Financial Institution |
35 |
35,000,000 |
-- |
|
|
---------- |
---------- |
|
|
55,000,000 |
-- |
|
|
========== |
========== |
|
|
|
| 6.1 It is secured against hypothecation of all properties and assets
including book debts of the |
|
| Company
ranking pari passu with each other and with charge created to secure
redeemable |
|
| capital
(Refer Note 5) and short term borrowings (Refer Note 9). The loan has been
provided |
|
| on
roll over basis for two years term. |
|
|
| These
are subject to markup of Rs. 0.5479 per Rs. 1,000/- per day. |
|
|
| 7.
LIABILITIES AGAINST ASSETS SUBJECT |
|
1997 |
1996 |
|
| TO
FINANCE LEASE |
|
Rupees |
Rupees |
|
|
| Opening
Balance |
|
295,552 |
311,970 |
|
| Acquired
During the Year |
|
1,186,000 |
349,000 |
|
|
---------- |
---------- |
|
|
1,481,552 |
660,970 |
|
| Paid
During the Year |
|
(914,595) |
(365,418) |
|
|
---------- |
---------- |
|
|
566,957 |
295,552 |
|
|
|
|
| Security
Deposit |
|
(73,600) |
(34,900) |
|
|
---------- |
---------- |
|
|
493,357 |
260,652 |
|
| Payable
Within One Year |
|
|
|
| Shown
Under Current Liabilities |
|
(209,377) |
(95,228) |
|
|
---------- |
---------- |
|
|
283,980 |
165,424 |
|
|
========== |
========== |
|
|
| These
represents vehicles acquired under finance lease agreements from a leasing
company. |
|
|
| The
cost plus financial charges are payable in 36 monthly instalments of Rs.
11,501/- and |
|
| Rs.
13,082/- . Implicit rate of return is ranging between 17 to 18% per annum. |
|
|
| The
future minimum lease payments to which the Company is committed at June 30,
1997 are |
|
| as under: |
|
|
| Year
ended June 30, |
|
Rupees |
|
| 1998 |
|
294,996 |
|
| 1999 |
|
214,489 |
|
| 2000 |
|
130,820 |
|
|
|
---------- |
|
|
640,305 |
|
| Financial
Charges Allocated to Future Period |
(146,948) |
|
|
---------- |
|
|
493,357 |
|
|
========== |
|
|
|
|
| 8.
LONG TERM LEASE DEPOSITS |
|
|
| These
represent the security deposits (lease key money) received from lessees under
lease contracts |
|
| and
are repayable at the expiry of their respective lease period. |
|
|
|
Limit in |
1997 |
1996 |
|
| 9.
SHORT TERM BORROWINGS |
|
Rs. million |
Rupees |
Rupees |
|
|
| Secured
(9.1) |
|
| From
Commercial Banks |
|
| Morabaha
Finance |
|
25 |
25,000,000 |
15,000,000 |
|
| Running
Finance |
|
60 |
15,984,771 |
17,325,635 |
|
|
| From
Investment Bank |
|
| Finance
Against Bills |
|
-- |
10,000,000 |
|
|
| Unsecured |
|
| From
Investment Bank |
|
20 |
20,000,000 |
-- |
|
| From
Development Financial Institution |
5 |
5,000,000 |
-- |
|
|
---------- |
---------- |
|
|
65,984,771 |
42,325,635 |
|
|
========== |
========== |
|
|
| 9.1 These facilities are secured against hypothecation of all
properties and assets including book |
|
| debts
of the Company ranking pari passu with each other and with the charge created
to secure |
|
| redeemable
capital (Refer Note 5) and long term loans (Refer Note 6). |
|
|
| 9.2 The Repurchase price of Morabaha finance is Rs. 27.355
(million). The mark-up rate of other |
|
| borrowings
ranges between Rs. 0.4932 to Rs. 0.5479 per Rs. 1,000/- per day. |
|
|
| 10.
ACCRUED AND OTHER LIABILITIES |
|
1997 |
1996 |
|
|
Rupees |
Rupees |
|
|
| Mark-up on: |
|
| Redeemable
Capital |
|
5,282,823 |
7,048,668 |
|
| Long-term
Loans |
|
791,78l |
-- |
|
| Short-term
Borrowings |
|
2,842,984 |
1,160,747 |
|
| Financial
Charges on Lease Assets |
|
2,899 |
-- |
|
| Advance,
from Clients |
|
3,031,064 |
6,108,086 |
|
| Withholding
Tax |
|
423,235 |
51,616 |
|
| Accrued
Expenses |
|
590,823 |
660,477 |
|
| Unclaimed
Dividend |
|
301,230 |
-- |
|
| Others |
|
764,620 |
606,393 |
|
|
---------- |
---------- |
|
|
14,031,459 |
15,635,987 |
|
|
========== |
========== |
|
| 11.
CONTINGENCY AND COMMITMENT |
|
|
| CONTINGENCY |
|
|
| The
portion of tax demand amounting to Rs. 1.2 million in respect of assessment
year 1995-96 was |
|
| not
acknowledged. The Company has filed appeal before Income Tax Appellate
Commissioner, and |
|
| the
assessment order has been set aside for fresh decision. |
|
|
| COMMITMENT |
|
|
| Lease
financing contracts committed but not executed at the Balance Sheet date were
Rs. 67 million |
|
| (1996
- Rs. 126.8 million) |
|
|
| 12.
FIXED ASSETS - TANGIBLE |
|
|
|
| Particulars |
Cost at |
Additions |
Cost
at |
Accumulated |
Book Value at |
Depreciation |
Rate |
|
|
July 01, |
(Disposals) |
June 30, |
Depreciation |
June 30, |
for the |
% |
|
|
1996 |
during the |
1997 |
at June 30, |
1997 |
year |
|
|
|
|
year |
year |
1997 |
|
|
|
|
|
|
|
| Company
Owned |
|
|
|
| Lease-hold
Improvements |
5,528,864 |
-- |
5,528,864 |
1,627,146 |
3,901,718 |
552,886 |
10 |
|
| Furniture
& Fixtures |
2,895,613 |
73,714 |
2,969,327 |
876,055 |
2,093,272 |
296,933 |
10 |
|
| Equipment
and Appliances |
1,604,145 |
1,557,621 |
3,161,766 |
856,046 |
2,305,720 |
576,430 |
20 |
|
| Vehicles |
|
4,744,028 |
998,370 |
5,695,398 |
3,017,892 |
2,677,506 |
1,139,080 |
20 |
|
|
(47,000) |
|
|
|
|
---------- |
---------- |
---------- |
---------- |
---------- |
---------- |
|
|
|
14,772,650 |
2,629,705 |
17,355,355 |
6,377,139 |
10,978,216 |
2,565,329 |
|
|
| Under Lease |
|
(47,000) |
|
|
|
| Vehicles |
|
349 000 |
1,186,000 |
736,000 |
217,000 |
519,000 |
147,200 |
20 |
|
|
(799,000) |
|
|
---------- |
---------- |
---------- |
---------- |
---------- |
|
| Rupees |
|
15,121,650 |
3,815,705 |
18,091,355 |
6,594,139 |
11,497,216 |
2,712,529 |
|
|
(846,000) |
|
|
========== |
========== |
========== |
========== |
========== |
|
| Rupees
(1996) |
14,388,888 |
1,076,262 |
15,121,650 |
3,900,410 |
11,221,240 |
2,021,468 |
|
|
(343,500) |
|
|
========== |
========== |
========== |
========== |
========== |
|
|
|
|
| 12.1
Disposal of Assets |
|
|
| Particulars |
Mode of |
Sold to |
|
Cost |
Accumulated |
Book |
Sale |
|
|
disposal |
|
|
depreciation |
Value |
Proceeds |
|
|
| Vehicle
Insurance Claim Orient Insurance Co. Ltd. |
799,000 |
-- |
799,000 |
773,488 |
|
| Vehicle insurance
Claim Orient Insurance Co. Ltd. |
47,000 |
18,800 |
28,200 |
47,000 |
|
|
---------- |
---------- |
---------- |
---------- |
|
|
Rupees |
846,000 |
18,800 |
827,200 |
820,488 |
|
|
|
========== |
========== |
========== |
========== |
|
|
Rupees (1996) |
343,500 |
68,700 |
274,800 |
334,838 |
|
|
========== |
========== |
========== |
========== |
|
|
| 12.2 The rate of depreciation on equipment and appliances has been
increased from 10% to 20%. |
|
| Profit
for the year would have been higher by Rs. 260,253/-. if them had been no
change in |
|
| the
depreciation rate. |
|
|
1997 |
1996 |
|
|
Rupees |
Rupees |
|
| 13.
LONG TERM LOANS - STAFF |
|
| CONSIDERED
GOOD |
|
|
1,817,152 |
-- |
|
| Staff Loan |
|
(166,725) |
-- |
|
|
---------- |
---------- |
|
| Recoverable
Within One Year |
|
1,650,427 |
-- |
|
|
========== |
========== |
|
|
|
|
| The
loans under the scheme have been provided to executives of the Company to
facilitate |
|
| construction
or purchase of house, which are repayable over a period of 10 years with a
service charge |
|
| @
5% per annum. |
|
|
| Maximum
amount, due from executives at the end of any month during the year was Rs.
1,817,152 |
|
| (1996
- Nil) and amount outstanding for period exceeding three years is Rs.
1,405,236. |
|
|
| 14.
SHORT TERM INVESTMENTS |
|
|
No. of |
Market |
1997 |
1996 |
|
|
Shares |
Value |
Rupees |
Rupees |
|
| Quoted |
|
|
|
| Adamjee
Insurance Company Ltd. |
26,366 |
2,399,306 |
2,578,500 |
2,578,500 |
|
| Hub
Power Company Ltd. |
|
5,000 |
204,500 |
190,500 |
-- |
|
| ICI
Pakistan Ltd. |
|
6,250 |
151,563 |
139,650 |
343,500 |
|
| 25th
I.C.P. Mutual Fund |
|
500 |
2,750 |
5,000 |
5,000 |
|
| KASB
Premier Fund Ltd. |
|
50,000 |
180,000 |
500,000 |
500,000 |
|
| Pakistan
State Oil Company Ltd. |
980 |
318,990 |
215,562 |
162,400 |
|
| Pakistan
Telecommunication Co. Ltd. |
5,000 |
153,250 |
155,750 |
-- |
|
| Pakland
Cement Ltd. |
|
1,788,554 |
17,170,118 |
12,072,740 |
-- |
|
| Paramount
Leasing Company Ltd. |
9,900 |
86,130 |
99,000 |
99,000 |
|
| Saadi
Cement Ltd. |
|
2,500,000 |
14,375,000 |
12,500,000 |
-- |
|
|
|
---------- |
---------- |
---------- |
|
|
|
35,041,607 |
28,456,702 |
3,688,400 |
|
|
| Unquoted |
|
| Fidelity
Mutual Fund Ltd. |
|
-- |
2,500,000 |
|
| Government
Securities |
|
| Federal
Investment Bonds - 10 years |
|
1,000,000 |
1,000,000 |
|
|
---------- |
---------- |
|
|
29,456,702 |
7,188,400 |
|
|
========== |
========== |
|
| 15.
ADVANCES, DEPOSITS AND PREPAYMENTS |
|
| Current
Portion of Long Term Loan |
|
166,725 |
-- |
|
| Advance
Income Tax |
|
2,329,144 |
198,408 |
|
| Deposits |
|
41,000 |
41,000 |
|
| Prepayments |
|
761,464 |
1,187,479 |
|
| Other
Advances |
|
13,000 |
12,000 |
|
|
---------- |
---------- |
|
|
3,311,333 |
1,438,887 |
|
|
========== |
========== |
|
| 16.
OTHER RECEIVABLES |
|
| Considered
Good |
|
| Accrued
Profit / Interest |
|
30,000 |
381,996 |
|
| Dividend |
|
42,211 |
33,845 |
|
| Others |
|
449,379 |
822,030 |
|
|
---------- |
---------- |
|
|
521,590 |
1,237,871 |
|
|
========== |
========== |
|
|
|
|
|
| 17.
CASH AND BANK BALANCES |
|
1997 |
1996 |
|
|
Rupees |
Rupees |
|
|
| Cash in Hand |
|
23,526 |
19,857 |
|
| Cash
with Banks |
|
|
|
| In
Deposit Accounts ( 17.1 ) |
|
13,027,727 |
3,970,370 |
|
| In
Current Accounts |
|
105,043 |
45,921 |
|
|
---------- |
---------- |
|
|
13,156,296 |
4,036,148 |
|
|
========== |
========== |
|
| 17.1 This includes Rs. 50,000/- deposited with the State Bank of
Pakistan, to maintain liquidity |
|
| requirements
under Prudential Regulations. |
|
|
| 18.
RETURN ON DEPOSITS AND INVESTMENTS |
|
1997 |
1996 |
|
|
Rupees |
Rupees |
|
|
|
|
| Profit
on PLS Accounts / Bank Deposits (Net of Zakat) |
153,472 |
1,616,798 |
|
| Interest
on Securities |
|
209,602 |
335,677 |
|
| Dividend |
|
98,850 |
212,297 |
|
|
---------- |
---------- |
|
|
461,924 |
2,164,772 |
|
|
========== |
========== |
|
| 19.
ADMINISTRATION AND OPERATING EXPENSES |
|
| Salaries
and Benefits |
|
6,674,744 |
6,111,920 |
|
| Directors'
Meeting Fees |
|
3,000 |
1,500 |
|
| Rent,
Rates and Taxes |
|
225,439 |
179,471 |
|
| Insurance |
|
563,754 |
431,206 |
|
| Legal
and Professional |
|
689,239 |
411,921 |
|
| Travelling
and Conveyance |
|
1,356,829 |
1,047,896 |
|
| Postage
and Telephone |
|
1,468,634 |
877,004 |
|
| Utilities |
|
267,095 |
213,461 |
|
| Printing
and Stationery |
|
599,915 |
582,158 |
|
| Vehicles
Running and Maintenance |
|
797,950 |
426,169 |
|
| Computerisation |
|
255,554 |
71,750 |
|
| Entertainment |
|
509,085 |
436,145 |
|
| Advertisement |
|
526, 117 |
548,150 |
|
| Repairs
and Maintenance |
|
344,459 |
194,188 |
|
| Auditors'
Remuneration ( 19.1 ) |
|
145, 126 |
112,625 |
|
| Shares
Department |
|
514,281 |
497,330 |
|
| Credit
Rating |
|
269,725 |
-- |
|
| Depreciation |
|
2,712,529 |
2,021,468 |
|
| Fees
and Subscription |
|
735,140 |
186,261 |
|
| Donation
(19.2) |
|
66,145 |
18,500 |
|
| Others |
|
97,634 |
79,507 |
|
|
---------- |
---------- |
|
|
18,822,394 |
14,448,630 |
|
|
========== |
========== |
|
|
|
| 19.1
Auditors' Remuneration |
|
1997 |
1996 |
|
|
Rupees |
Rupees |
|
|
| Statutory
Audit Fee |
|
50,000 |
50,000 |
|
| Special
Audit Fee |
|
34,000 |
28,000 |
|
| Tax
and Other Consultancy |
|
56,000 |
24,000 |
|
| Out
of Pocket Expenses |
|
5,126 |
10,625 |
|
|
---------- |
---------- |
|
|
145,126 |
112,625 |
|
|
========== |
========== |
|
|
|
|
| 19.2 None of the Directors or their spouse had any interest in the
donees fund. |
|
|
|
|
1997 |
1996 |
|
|
|
Rupees |
Rupees |
|
| 20.
FINANCIAL CHARGES |
|
| Mark-up on: |
|
| Redeemable
Capital |
|
20,736,734 |
20,251,819 |
|
| Long
Term Loans |
|
5,940,563 |
-- |
|
| Short
Term Borrowings |
|
17,476,481 |
2,828,350 |
|
| Financial
Charges on Lease Liability |
|
156,289 |
53,523 |
|
| Documentation
and Bank Charges |
|
923,593 |
323,985 |
|
|
----------- |
----------- |
|
|
45,233,660 |
23,457,677 |
|
|
=========== |
=========== |
|
|
| 21. TAXATION |
|
| The
assessment of the Company has been finalized upto accounting year ended June
30, 1996 |
|
| (Assessment
Year 1996-97). |
|
|
| In
view of the tax loss for the year, minimum tax @ 0.5% of total turnover has
been provided in |
|
| these
accounts. |
|
|
| Deferred
taxation arising out of timing differences between accounting and income tax
revenue or |
|
| charges
is estimated at Rs. 36.9 million (1996 - Rs. 36.7 million). Provision has not
been made in |
|
| these
accounts for deferred taxation as these timing differences are not expected
to reverse in the |
|
| foreseeable
future. |
|
|
| 22.
REMUNERATION TO DIRECTORS AND EXECUTIVES |
|
|
|
1997 |
|
1996 |
|
|
----------------------------------- |
----------------------------------- |
|
|
Chief |
Director |
Executives |
Chief |
Director |
Executives |
|
|
Executive |
|
Executive |
|
|
|
----------------------------------- |
----------------------------------- |
|
| Remuneration |
|
838,710 |
335,484 |
2,205,806 |
866,329 |
532,258 |
1,653,226 |
|
| Housing
and Utilities |
461,290 |
184,516 |
1,213,194 |
476,481 |
292,742 |
909,274 |
|
|
--------- |
--------- |
--------- |
--------- |
--------- |
--------- |
|
|
Rupees |
1,300,000 |
520,000 |
3,419,000 |
1,342,810 |
825,000 |
2,562,500 |
|
|
========== |
========== |
========== |
========== |
========== |
========== |
|
| Number
of Persons |
1 |
1 |
8 |
1 |
2 |
6 |
|
|
| 22.1
The Chief Executive, Directors and Executives are also provided with free use
of company |
|
| owned cars, medical insurance cover,
provident fund contribution and travelling. The monetary |
|
| value of these are Rs. 1,052,738/- (1996 -
Rs. 916,945/-) approximately. |
|
|
| 22.2
Fees of Rs. 3,000/- were paid to three non-executive directors for attending
Board meetings. |
|
|
| 23. GENERAL |
|
| 23.1
Figures have been rounded off to the nearest Rupee. |
|
| 23.2
Corresponding figures have been re-arranged wherever necessary for the
purpose of comparison. |
|
|
| Rafique
Dawood |
|
Asadullah Khawaja |
|
| Chairman
& Chief Executive |
Director |
|
|
|
|
|
|
| PATTERN
OF SHARE HOLDING AS AT JUNE 30, 1997 |
|
| No. of |
SHARE |
|
HOLDING |
|
Shares |
|
| Shareholders |
From |
|
To |
|
Held |
|
|
| 30 |
1 |
-- |
100 |
|
3,000 |
|
| 2,462 |
101 |
-- |
500 |
|
1,219,900 |
|
| 154 |
501 |
-- |
1000 |
|
136,200 |
|
| 133 |
1001 |
-- |
5000 |
|
395,500 |
|
| 50 |
5001 |
-- |
10000 |
|
430,700 |
|
| 12 |
10001 |
-- |
15000 |
|
148,400 |
|
| 14 |
15001 |
-- |
20000 |
|
262,600 |
|
| 10 |
20001 |
-- |
25000 |
|
242,400 |
|
| 13 |
25001 |
-- |
30000 |
|
382,500 |
|
| 2 |
30001 |
-- |
35000 |
|
67,500 |
|
| 4 |
35001 |
-- |
40000 |
|
156,600 |
|
| 4 |
40001 |
-- |
45000 |
|
166,600 |
|
| 8 |
45001 |
-- |
50000 |
|
398,000 |
|
| 1 |
55001 |
-- |
60000 |
|
60,000 |
|
| 3 |
60001 |
-- |
65000 |
|
189,500 |
|
| 1 |
75001 |
-- |
80000 |
|
80,000 |
|
| 9 |
95001 |
-- |
100000 |
|
900,000 |
|
| 1 |
100001 |
-- |
105000 |
|
101,700 |
|
| 1 |
120001 |
-- |
125000 |
|
125,000 |
|
| 1 |
125001 |
-- |
130000 |
|
130,000 |
|
| 1 |
140001 |
-- |
145000 |
|
145,000 |
|
| 1 |
150001 |
-- |
155000 |
|
151,300 |
|
| 1 |
215001 |
-- |
220000 |
|
217,800 |
|
| 1 |
235001 |
-- |
240000 |
|
240,000 |
|
| 4 |
245001 |
-- |
250000 |
|
1,000,000 |
|
| 1 |
285001 |
-- |
290000 |
|
288,500 |
|
| 1 |
390001 |
-- |
395000 |
|
392,700 |
|
| 4 |
495001 |
-- |
500000 |
|
2,000,000 |
|
| 1 |
540001 |
-- |
545000 |
|
542,800 |
|
| 2 |
995001 |
-- |
1000000 |
|
2,000,000 |
|
| 1 |
1185001 |
-- |
1190000 |
|
1,188,400 |
|
| 1 |
1370001 |
-- |
1375000 |
|
1,375,000 |
|
| 1 |
1505001 |
-- |
1510000 |
|
1,506,000 |
|
| 1 |
2045001 |
-- |
2050000 |
|
2,050,000 |
|
| 1 |
2090001 |
-- |
2095000 |
|
2,093,900 |
|
| 1 |
4210001 |
-- |
4215000 |
|
4,212,500 |
|
| ---------- |
---------- |
---------- |
---------- |
---------- |
---------- |
|
| 2,936 |
|
25,000,000 |
|
| ========== |
========== |
========== |
========== |
========== |
========== |
|
| The
slabs representing NIL holding have been omitted. |
|
|
| Categories
of Shareholders |
|
|
|
Number of |
Shares Held |
Percentage |
|
| Particulars |
|
Shareholders |
|
|
|
|
|
|
|
| Joint
Stock Companies |
21 |
1,352,400 |
5.41 |
|
| Financial
Institutions |
8 |
2,940,200 |
11.76 |
|
| Modaraba
Companies |
3 |
606,700 |
2.43 |
|
| Insurance
Companies |
7 |
4,411,600 |
17.65 |
|
| Investment
Companies |
9 |
6,212,900 |
24.85 |
|
| Individuals |
|
2886 |
7,708,500 |
30.83 |
|
| Foreign
Investors |
2 |
1,767,700 |
7.07 |
|
|
---------- |
---------- |
---------- |
|
| Total |
|
2936 |
25,000,000 |
100.00 |
|
|
========== |
========== |
========== |
|
|
|
|
|
|
|
|
|
|
|
|
