| GHANDHARA LEASING COMPANY LTD |
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| (ANNUAL
REPORT 1997) |
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| CONTENTS |
|
| Company
Information |
|
| Notice
of Annual General Meeting |
|
| Financial
Highlights |
|
| Graphic
Presentation |
|
| Chairman's
Review |
|
| Directors'
Report |
|
| Pattern
of Shareholding |
|
| Auditors'
Report to the Members |
|
| Balance
Sheet |
|
| Profit
& Loss Account |
|
| Statement
of Changes in Financial Position |
|
| Notes
to the Accounts |
|
| Form
of Proxy |
|
|
| COMPANY
INFORMATION |
|
|
| BOARD
OF DIRECTORS |
|
| Mr.
Salahuddin Qureshi |
Chairman |
|
Nominee of NIT |
|
| Mr.
Raza Kuli Khan Khattak |
|
Nominee
of GNL * |
|
| Mr.
Ahmed Kuli Khan Khattak |
|
Nominee of GNL |
|
| Begum
Tehmina Habibullah Khan |
|
Nominee of GNL |
|
| Mr.
Humayaun Sultan Mufti |
|
Nominee of GNL |
|
| Dr.
Adil Sultan Mufti |
|
Nominee of GNL |
|
| Mr.
Shahid Ghaffar |
|
Nominee of NIT |
|
| Mr.
Mushtaq Ahmed Khan |
|
Nominee of GNL |
|
| Mr.
Kazunori Namekata (Alternate Mr. M. Tanaka) |
Nominee of Marubeni |
|
| Mr.
Haroon A. Zuberi |
Chief Executive |
|
Nominee of GNL |
|
| * GNL: Ghandhara Nissan Limited |
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|
| COMPANY
SECRETARY |
|
| Mr.
Muhammad Shabbir Kasbati |
|
LEGAl ADVISORS |
|
|
Shaukat Law Associates, |
|
|
217, Central Hotel
Annexe, |
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| REGISTERED
OFFICE |
|
Abdullah Haroon Road, |
|
| 2nd
Floor, State Life Building, |
|
Karachi. |
|
| 34,The Mail, Peshawar Cantt. |
|
Ph: 5681495, 5686223 |
|
|
| HEAD
OFFICE |
|
SHARE REGISTRARS |
|
| l-D,
3rd Floor, Sunset Tower, |
|
THK Associates (Pvt) Ltd. |
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| Sunset
Boulevard, Karachi. |
|
Ground Floor, |
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| Ph:
5890751-5 |
|
Shaikh Sultan Trust, |
|
| Fax:
5888513, 5880687 |
|
Building No. 2, |
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|
Beaumont Road, |
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|
Karachi-75530 |
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| BANKERS
TO THE COMPANY |
|
Ph: 5686658, 5685687 |
|
| American
Express Bank Ltd. |
|
| Allied
Bank of Pakistan Ltd. |
|
| National
Bank of Pakistan Ltd. |
|
| Societe
Generale, The French & International Bank |
|
| Standard
Chartered Bank |
|
| The
Bank of Tokyo |
|
|
| AUDITORS |
|
| Taseer
Hadi Khalid & Co. |
|
| Chartered
Accountants, |
|
| 1st
Floor, Shaikh Sultan Trust, |
|
| Building
No. 2, Beaumont Road, |
|
| Karachi-75530 |
|
| Ph:
5681912, 5671761-63 |
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|
| NOTICE
OF ANNUAL GENERAL MEETING |
|
| Notice
is hereby given that the Sixth Annual General Meeting of the Company will be
held on Monday, 29th day of |
|
| December,
1997 at Hotel Pearl Continental, Peshawar Cantt., Peshawar at 11.00 a.m. to
transact the following |
|
| business: |
|
|
| ORDINARY
BUSINESS |
|
| - receive, consider and adopt the audited
accounts together with the Directors' and Auditors' Report for the |
|
| year
ended 30 June, 1997. |
|
|
| -
To appoint Auditors and fix their remuneration. The present Auditors Messrs.
Taseer Hadi Khalid & Co., |
|
| Chartered
Accountants, retire and being eligible offer themselves for re-appointment. |
|
|
| OTHER
BUSINESS |
|
| To
transact any other business as may be placed before the meeting with the
permission of the Chairman. |
|
|
|
By order of the Board |
|
|
|
|
|
M.Shabbir
Kasbati |
|
|
Company Secretary |
|
| Karachi:
3 December, 1997 |
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|
| NOTES: |
|
|
| 1.
The Register of members of the company will remain closed from 24 December,
1997 to 29 December, 1997 |
|
| (both
days inclusive). |
|
|
|
| 2.
A member entitled to attend and vote at this meeting may appoint another
member as his/her proxy to attend |
|
| the
meeting and vote on his behalf. No person shall act as proxy who is not a
member of the company. |
|
| Proxies
in order to be effective must be received by the Company not less than 48
hours before the meeting. |
|
|
| 3.
Shareholders are requested to immediately notify the Company of any change in
their addresses. |
|
|
| FINANCIAL
HIGHLIGHTS |
|
|
|
|
30 June |
30 June |
31 Dec |
31 Dec |
31 Dec |
|
|
1997 |
1996 |
1994 |
1993 |
1992 |
|
|
|
|
| Balance
sheet (Rupees in million) |
|
| Net
investment in leases |
|
519.82 |
496.88 |
339,581 |
191.29 |
55.52 |
|
| Total
equity |
|
172.53 |
160.77 |
72.87 |
66.55 |
55.16 |
|
| Total
assets |
|
631,294 |
581.05 |
438.00 |
259.03 |
126.18 |
|
| Break-up
value (Amount in rupees) |
20.89 |
19.46 |
14.57 |
13.31 |
11.03 |
|
| Income
statement (Rupees in million) |
|
| Gross
income |
|
99.83 |
137.60 |
66.42 |
30.09 |
8.97 |
|
| Financial
charges |
|
67.34 |
87.67 |
37.51 |
11.71 |
0.36 |
|
| Other
expenses |
|
16.13 |
26.31 |
12.09 |
6.85 |
3.44 |
|
| Net profit |
|
11,759 |
22.93 |
16.32 |
11.39 |
5.16 |
|
| Lease
portfolio (Percentage) |
|
| Plant
& machinery |
|
73.10 |
66.33 |
77.00 |
78.60 |
74.00 |
|
| Equipments |
|
10.31 |
923 |
11.50 |
9.20 |
10.80 |
|
| Private
vehicles |
|
7.05 |
9.67 |
11.00 |
9.40 |
8.10 |
|
| Commercial
vehicles |
|
9.54 |
14.77 |
0.50 |
2.80 |
7.10 |
|
|
|
|
|
|
|
| CHAIRMAN'S
REVIEW |
|
| It
gives me great pleasure in presenting to you the 6th Annual Report of the
company together with the |
|
| audited
accounts for the year ended on 30 June 1997, |
|
|
| An
Overview |
|
|
| The
year under review followed the same pattern of stagnation as of previous
year. The major reason was |
|
| political
instability during the year. The overall economic activities witnessed the
negative growth as the |
|
| GDP
declined to 3.1% from 4.6%. The financial sector also suffered from this
decline, specially, due to |
|
| retarded
growth rate in manufacturing sector, which reduced to 1.8% from 4.4%.
Particularly, large scale |
|
| manufacturing
sector, which declined by 1.4%. Further, the public sector enterprises as
well as large business |
|
| houses
faced cash-flow problems due to depressed economic conditions. having chain
effect on the industry. |
|
| However,
with the change in government, upliftment of economic activities was expected
but it has not yet |
|
| come
upto the mark. |
|
|
| In
the budget for the year 1996-97, government also imposed 1% per annum Central
Excise Duty on lease |
|
| rentals,
which affected the leasing industry. However, this levy was withdrawn in the
current budget for |
|
| 1997-98. |
|
|
| During
the year under review, State Bank of Pakistan (SBP) also revised its discount
rate from 17% to |
|
| 20%.
This resulted in higher lending rates by the banks. On top of increasing the
discount rate, government |
|
| borrowed
excessive funds against STFBs at the rate as high as 17.50% per annum, which
created a liquidity |
|
| crunch
in the market. However, subsequently, SBP has readjusted the discount rate
from 20% to 19% in |
|
| June
1997 and from 19% to 18% in July 1997. |
|
|
| Review
of Operations |
|
| I
am pleased to inform that despite the difficult economic conditions, your
company performed satisfactorily |
|
| during
the year. Once again, the main emphasis remained on building of quality and
well diversified lease |
|
| portfolio
in order to avoid credit risk. The company also placed special emphasis on
leasing of commercial |
|
| vehicles
and developed it as niche market. |
|
|
| The
lease portfolio composition constituted 73.10% Plant & Machinery, 10.31%
Equipments, 7.05% Private |
|
| Vehicles
and 9.54% Commercial Vehicles, where as the disbursement during the year
followed the pattern |
|
| of
68.63% Plant & Machinery, 14.32% Equipments, 5.13% Private Vehicles and
11.92% Commercial Vehicles. |
|
|
| The
company's revenues amounted to Rs. 99.83 million, with a net profit of Rs.
1l.76 million. The major |
|
| portion
of expenses comprised of financial charges, which amounted to Rs. 67.34
million. As I have already |
|
| mentioned
that SBP had increased its discount rate, and higher returns on STFBs,
causing increase in lending |
|
| rates
by banks and DFI's which resulted in sharp increase of financial charges. To
take care of any future |
|
| lease
losses, the company has made a provision of Rs. 4.10 million, these are Rs.
3.11 million in excess |
|
| of
what is required by the leasing regulations. The company continued to
maintain its Contingency and |
|
| Statutory
reserves. Contingency reserve is 2% of net investment in lease, whereas
Statutory reserve is |
|
| 20%
of net profit. These reserves amounted to Rs. 10.51 million and Rs. 13.52
million respectively as on |
|
| 30
June 1997. |
|
|
| During
the year under review, the company also changed its name from 'Ghemni Leasing
Company Limited' |
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| to
'Ghandhara Leasing Company Limited'. |
|
|
| Fundings |
|
| Your
company has been approved for participation in 'Financial Sector
Intermediation Loan' of US $100 |
|
| million
extended by Asian Development Bank. The company has also been successful in
arranging three |
|
| additional
Rupee funding lines from investment banks and DFIs for the period of two to
three years. |
|
|
| Future
Prospects |
|
| Since
past couple of years, the overall economic activities are facing a stand
still situation, which has resulted |
|
| in
a stiff competition among leasing companies. With the change in government,
economic activities are |
|
| expected
to revive, which may result in setting up of new industries and expansion of
established ones |
|
| and
more business for the teasing sector. With the reduction in discount rate and
other steps taken by |
|
| SBP,
mark-up rates have also shown downward trend and we expect it to reduce
further, which will have a |
|
| positive
impact on the earnings of the leasing companies. |
|
|
| Staff |
|
| I
would like to congratulate the Management and all company employees for their
dedication and hard work |
|
| in
maintaining the company's efficiency during a challenging year. |
|
|
| Acknowledgment |
|
| I
would also like to thank Regulatory Authorities, DFIs, banks and investment
banks for extending their full |
|
| co-operation
and guidance to the company in achieving the results. |
|
|
|
|
|
| DIRECTOR'S
REPORT |
|
|
|
| The
Directors have pleasure in presenting the Sixth Annual Report together with
Audited Accounts and the |
|
| Auditors'
Report thereon for year ended 30 June, 1997. |
|
|
| Financial
Results |
|
|
|
Year ended |
|
Eighteen months |
|
|
30 June |
|
period ended |
|
|
1997 |
|
1996 |
|
|
| Total
income |
|
99,826,211 |
|
137.602,549 |
|
| Expenses |
|
87,567,614 |
|
113,982,542 |
|
| Net
profit before tax |
|
12,258,597 |
|
23,620,007 |
|
| Taxation
- current |
|
499,131 |
|
688,012 |
|
| Profit
after taxation |
|
11,759,466 |
|
22,931,995 |
|
| Profit
brought forward |
|
8,146,868 |
|
9,492,254 |
|
| Profit
available for appropriation |
19,906,334 |
|
32,424,249 |
|
| Appropriations |
|
| Transfer
to statutory reserve |
2,351,893 |
|
4,586,399 |
|
| Transfer
to contigency reserve |
540,759 |
|
3,171,582 |
|
| Interim cash dividend - Nil |
- |
|
8,259,700 |
|
| (1995-96'10%) |
|
|
|
|
|
| Final cash dividend - Nil |
- |
|
8,259,700 |
|
| (1995-96
· 10%) |
|
|
2,892,652 |
|
24,277,381 |
|
|
----------- |
|
----------- |
|
|
|
|
| Unappropriated profit carried |
17,013,682 |
|
8,146,868 |
|
| forward |
|
=========== |
|
=========== |
|
|
|
|
| Auditors |
|
| The
present Auditors Messrs. Taseer Hadi Khalid & Co., Chartered Accountants,
retire and being eligible |
|
| offer
themselves for re-appointment. |
|
|
| Pattern
of Shareholding |
|
| The
pattern of shareholding is annexed. |
|
|
| Staff |
|
| The
Directors would like to place on record their appreciation of the hard work
and dedication of staff members |
|
| in
achieving the results being presented. |
|
|
|
| PATTERN
OF SHAREHOLDING |
|
|
|
| As
at 30 June 1997 |
|
| No.
of Shareholders |
|
Shareholding |
|
Total |
|
|
From |
|
to |
shares held |
|
|
| 83 |
|
1 |
|
100 |
8,300 |
|
| 393 |
|
101 |
|
500 |
172,400 |
|
| 156 |
|
501 |
|
1,000 |
152,900 |
|
| 66 |
|
1,001 |
|
5,000 |
153,000 |
|
| 21 |
|
5,001 |
|
10,000 |
165,100 |
|
| 8 |
|
10,001 |
|
15,000 |
96,000 |
|
| 3 |
|
15,001 |
|
20,000 |
59,000 |
|
| 1 |
|
25,001 |
|
30,000 |
28,000 |
|
| 2 |
|
30,001 |
|
35,000 |
64,500 |
|
| 2 |
|
50,001 |
|
55,000 |
105,800 |
|
| 1 |
|
125,001 |
|
130,000 |
125,500 |
|
| 1 |
|
295,001 |
|
300,000 |
300,000 |
|
| 1 |
|
335,001 |
|
430,000 |
337,700 |
|
| 1 |
|
495,001 |
|
500,000 |
500,000 |
|
| 1 |
|
1,245,001 |
|
1,250,000 |
1,250,000 |
|
| 1 |
|
1,840,001 |
|
1,845,000 |
1,841,500 |
|
| 1 |
|
2,895,001 |
|
2,900,000 |
2,900,000 |
|
| --------- |
|
|
|
|
--------- |
|
| 742 |
|
Total |
8,259,700 |
|
| ========= |
|
========= |
|
|
|
|
|
| CATEGORIES
OF SHAREHOLDERS |
|
|
|
|
| As
at 30 June 1997 |
|
|
| Categories |
|
|
No. of |
Share held |
Percentage |
|
|
Shareholders |
|
|
| Individuals |
|
728 |
865,200 |
10.48 |
|
| Insurance
Companies |
|
1 |
337,700 |
4.09 |
|
| Joint
Stock Companies |
|
6 |
4,257,800 |
51.55 |
|
| Financial
Institutions |
|
6 |
2,229,000 |
2,783 |
|
| Foreign
Companies |
|
1 |
500,000 |
6.05 |
|
|
----------- |
----------- |
----------- |
|
|
742 |
8,259,700 |
100.00 |
|
|
============= |
============= |
============= |
|
|
|
|
| AUDITOR'S
REPORT TO THE MEMBERS |
|
| We
have audited the annexed balance sheet of Ghandhara Leasing Company Limited
(Formerly Ghemni Leasing |
|
| Company
Limited) as at 30 June 1997 and the related profit and loss account and
statement of changes in |
|
| financial
position, 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 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, 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 ot the Company's |
|
| affairs
as at 30 June 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. |
|
|
|
| Karachi'
2 December 1997 |
|
Taseer Hadi Khalid &
Co. |
|
|
Chartered Accountants |
|
|
|
| BALANCE
SHEET |
|
| As
at 30 June 1997 |
|
|
|
|
|
30 June |
30 June |
|
|
Note |
1997 |
1996 |
|
| ASSETS |
|
|
|
|
|
|
|
|
|
|
| Fixed assets - at cost less |
3 |
6,673,072 |
4,822,120 |
|
| accumulated
depreciation |
|
|
|
|
|
| Net
investment in leases |
|
4 |
326,698,202 |
324,069,532 |
|
| Long
term investments |
|
5 |
11,935,759 |
11,935,759 |
|
| Deferred
cost |
|
6 |
1,422,701 |
2,234,526 |
|
| CURRENT
ASSETS |
|
|
|
|
|
| Current
maturity of net investment |
|
193,124,341 |
172,811,582 |
|
| in
leases including overdue rentals |
|
|
|
|
| Investments |
|
|
50,000 |
50,000 |
|
| Advances against lease
commitments |
|
7,019,470 |
6,005,659 |
|
| - unsecured |
|
|
|
|
|
| Advances,
deposits, prepayments |
|
|
|
|
| and
other receivables |
|
7 |
23,083,060 |
9,400,670 |
|
| Cash
and bank balances |
|
8 |
61,288,308 |
49,721,694 |
|
|
|
|
|
|
|
|
284,565,179 |
237,989,605 |
|
|
|
---------- |
---------- |
|
|
Rupees |
631,294,913 |
581,051,542 |
|
|
|
=========== |
=========== |
|
|
|
|
|
|
| SHAREHOLDERS'
EQUITY AND LIABILITIES |
|
|
|
|
|
| Share
capital |
|
9 |
82,597,000 |
82,597,000 |
|
| Share
premium |
|
|
48,895,500 |
48,895,500 |
|
| Reserves |
|
10 |
24,024,713 |
21,132,061 |
|
| Unappropriated
profit |
|
|
17,013,682 |
8,146,868 |
|
| Shareholders'
equity |
|
|
172,530,895 |
160,771,429 |
|
| Long
term financing - secured |
11 |
141,946,301 |
192,148,535 |
|
| Certificates
of investment |
12 |
40,200,000 |
- |
|
| Long
term deposits |
|
13 |
56,580,431 |
55,925,877 |
|
|
|
|
|
| CURRENT
LIABILITIES |
|
|
|
| Current
maturity of long financing, |
|
|
| long
term deposited and lease |
|
|
| facility |
|
14 |
133,709,158 |
18,147,213 |
|
|
|
|
|
|
| Finance under mark-up
arrangements |
|
|
| -secured |
|
15 |
46,415,458 |
126,200,001 |
|
| Certificates
of Investment |
12 |
25,325,000 |
- |
|
| Accrued expenses and other |
|
|
| liabilities |
|
16 |
13,311,616 |
15 095,574~ |
|
| Provision
for taxation |
|
|
707,954 |
769,798 |
|
| Dividend
payable |
|
|
508,040 |
11,993,115 |
|
|
|
|
|
|
219,277,226 |
172,205,701 |
|
| CONTINGENCIES
AND COMMITMENTS |
17 |
-- |
-- |
|
|
|
---------- |
---------- |
|
|
Rupees |
631,294,913 |
581,051,524 |
|
|
|
|
| These
accounts should be read in conjunction with the attached notes. |
|
|
|
|
|
|
|
|
|
|
| PROFIT
AND LOSS ACCOUNT |
|
|
|
| For
the year ended 30 June 1997 |
|
|
|
|
|
Year ended |
Eighteen months |
|
|
|
30 June |
period ended |
|
|
Note |
1997 |
30 June 1996 |
|
|
|
|
| REVENUE |
|
|
|
|
|
|
| Income from leasing |
|
18 |
97,361,040 |
134,962,810 |
|
| operations |
|
|
|
|
| Income
on investments |
|
19 |
1,205,433 |
929,997 |
|
| Other
income |
|
20 |
1,259,738 |
1,709,742 |
|
|
|
----------- |
----------- |
|
|
|
99,826,211 |
137,602,549 |
|
| EXPENDITURE |
|
|
|
| Administrative and |
|
21 |
15,315,630 |
19,276,008 |
|
| operating
expenses |
|
|
|
|
|
|
811,825 |
1,487,012 |
|
| Amortisation of |
|
22 |
67,343,628 |
87,670,306 |
|
| deferred
cost |
|
|
|
|
|
|
83,471,083 |
108,433,326 |
|
|
|
----------- |
----------- |
|
| Profit
before provisions |
|
|
16,355,128 |
29,169,223 |
|
|
|
|
| Provision for diminution in
the |
|
- |
4,270,593 |
|
| value
of investments |
|
|
|
|
|
| Provision for doubtful |
|
23 |
4,096,531 |
1,278,623 |
|
| bets |
|
|
|
|
|
|
4,096,531 |
5,549,216 |
|
|
|
----------- |
----------- |
|
| Profit
before taxation |
|
|
12,258,597 |
23,620,007 |
|
|
|
|
| TAXATION |
|
|
|
|
|
|
| Current |
|
|
499,131 |
688,012 |
|
|
|
----------- |
----------- |
|
| Profit
after taxation |
|
|
11,759,466 |
22,931,995 |
|
| Unappropriated
profit brought forward |
|
8,146,868 |
9,492,254 |
|
|
|
----------- |
----------- |
|
| Profit
available for appropriation |
|
19,906,334 |
32,424,249 |
|
|
|
|
|
| APPROPRIATIONS |
|
|
|
|
|
|
| Statutory |
reserve @20% of profit |
|
2,351,893 |
4,586,399 |
|
| Contingency reserve @2% of
lease |
|
540,759 |
3,171,582 |
|
| contract
receivables |
|
|
|
|
| Proposed
dividend · |
|
|
|
|
| Interim'
NH (1996: 10%) |
|
|
- |
8,259,700 |
|
| Final'
Nil (1996'10%) |
|
|
- |
8,259,700 |
|
|
|
2,892,652 |
24,277,381 |
|
| Unappropriated profit |
|
|
----------- |
----------- |
|
| carried
forward |
|
Rupees |
17,013,682 |
8,146,868 |
|
|
=========== |
=========== |
|
|
| These
accounts should be read in conjunction with the attached notes. |
|
|
|
| STATEMENT
OF CHANGES IN FINANCIAL POSITION |
|
| For
the year ended 30 June 1997 |
|
|
|
Year ended |
Eighteen months |
|
|
30 June |
period ended |
|
| CASH
FLOWS FROM OPERATING ACTIVITIES |
|
1997 |
30 June 1996 |
|
| Net
profit before taxation |
|
12,258,597 |
23,620,007 |
|
| Adjustment
for |
|
|
|
|
|
| Depreciation |
|
1,603,837 |
1,456,149 |
|
| Amortisation
of deferred cost |
|
811,825 |
1,487,012 |
|
| Accrued
mark-up |
|
66,636,972 |
86,781,852 |
|
| Provision
for doubtful debts |
|
4,096,531 |
1,278,623 |
|
| Provision for diminution in
the value |
|
- |
4,270,593 |
|
| of
investments |
|
|
|
|
| Income
on investments |
|
(1,205,433) |
(929,997) |
|
| Gain
on sale of fixed assets |
|
- |
(277,152) |
|
|
----------- |
----------- |
|
|
84,202,329 |
117,687,087 |
|
| Increase/Decrease
in operating assets / liabilities |
|
|
| (Increase) in Investment in
leases |
|
(27,037,960) |
(158,579,041) |
|
| (Increase) / Decrease in advance |
|
|
|
| against lease commitments |
|
(1,013,811) |
35,813,091 |
|
| (Increase) / Decrease in
advances, |
|
|
|
| deposit, prepayment 'and other |
|
| receivables |
|
(12,304,474) |
2,458,470I |
|
| Increase
in long term security deposits |
|
2,814,912 |
24,149,039 |
|
| Increase / (Decrease) in accrued |
|
|
|
| expense
and 'other liabilities |
|
315,850 |
(1,357,593) |
|
|
(37,225,483) |
(97,516,034) |
|
|
----------- |
----------- |
|
|
46,976,846 |
20,171,053 |
|
| Mark-up
paid |
|
(68,736,780) |
(92,657,367) |
|
| Taxes paid |
|
(1,938,891) |
(1,207,689) |
|
|
----------- |
----------- |
|
| Net
cash used in operating activities |
|
(23,698,825) |
(73,694,003) |
|
|
|
|
| CASH
FLOWS FROM INVESTING ACTIVITIES |
|
|
|
| Additions
to 1ixed assets |
|
(3,454,789) |
(4,266,482) |
|
| Long
term investment in |
|
| Federal
Investment Bonds |
|
- |
(500,000) |
|
| Purchase
of marketable securities - net |
|
- |
(1,197,147) |
|
| Decrease
in long term lease deposits |
|
- |
(57,726) |
|
| Proceed from safe of marketable |
|
- |
1,358,884 |
|
| securities - net |
|
|
|
|
| Mark-up
on Federal investment bonds |
|
142,500 |
179,155 |
|
| Income
from deposits account |
|
783,154 |
544,967 |
|
| Dividend
income - net |
|
279,779 |
246,904 |
|
|
|
|
| Sale proceeds from sale of
fixed asset |
|
- |
1,541,980 |
|
|
|
|
|
| Net
cash used in investing activities |
|
(2,249,356 |
(2,034,013 |
|
|
|
|
| CASH
FLOWS FROM FINANCING ACTIVITIES |
|
|
| increase
in long term financing |
|
63,199,413 |
89,080,210 |
|
|
|
|
| Increase
in certificates of investment |
|
65,585,000 |
-- |
|
| Payment
of lease liability |
|
-- |
(230,077) |
|
| (Decrease)/Increase in finance
under |
|
(79,784,543) |
(52,878,627) |
|
| mark-up arrangements |
|
|
|
| Proceeds
from right issue |
|
-- |
81,492,500 |
|
| Increase
in deferred cost |
|
-- |
(2,371,170) |
|
| Dividend
paid |
|
(11,485,075) |
(14,526,285) |
|
| Net cash generated from
financing |
|
|
|
| activities |
|
37,514,795 |
100,566,551 |
|
|
----------- |
----------- |
|
| Net
increase in cash and bank balances |
|
11,566,614 |
24,838,535 |
|
| Cash and bank balances at
beginning |
|
|
|
| of
year/period |
|
49,721,694 |
24,883,159 |
|
| Cash and bank balances at end
of |
|
----------- |
----------- |
|
| year
/ period |
|
Rupees |
61,288,308 |
49,721,694 |
|
|
=========== |
=========== |
|
|
|
| NOTES
TO THE ACCOUNTS |
|
|
|
| For
the year ended 30 June 1997 |
|
|
|
|
| 1.
STATUS AND NATURE OF BUSINESS |
|
| The
Company was incorporated on 12th May I991 as a public limited company under
the Companies |
|
| Ordinance,
1984. The Company is listed on all the Stock Exchanges in Pakistan. During
the year |
|
| name
of the company was changed from Ghemni Leasing Company Limited to Ghandhara
Leasing |
|
| Company
Limited. The principal activity of the Company is leasing of movable assets. |
|
|
| 2.
SIGNIFICANT ACCOUNTING POLICIES |
|
|
| 2.1
Accounting convention |
|
|
| These
accounts have been prepared under the historical cost convention. |
|
|
| 2.2
Fixed assets and depreciation |
|
|
| a)
Fixed assets are stated at cost less accumulated depreciation. |
|
|
| b)
A full year's depreciation is charged on all fixed assets capitalised during
the year |
|
| while
no depreciation is charged in the year fixed assets are disposed off or
scrapped. |
|
|
| c)
Depreciation on fixed assets is charged on written down values at the rates
given in |
|
| note
3 to the accounts. |
|
|
| d)
Normal repairs and maintenance are charged to income as and when incurred, |
|
|
| e)
Gains and losses on disposal of assets, if any, are taken to profit and loss
account. |
|
|
| 2.3
Investments |
|
| Long term |
|
|
|
| These
are stated at cost net of provision made for decline other than temporary in
value of |
|
| investment,
if any. |
|
|
| Short term |
|
|
| These
are stated at lower of average cost and market value on an aggregate
portfolio basis. |
|
|
| 2.4
Deferred cost |
|
| Deferred
cost including preliminary expenses is being amortised over a period of five
years. |
|
|
| 2.5
Reserve for potential lease losses |
|
|
| A
reserve is maintained as an appropriation from unappropriated profit for
potential losses |
|
| on
lease portfolio which, in the judgement of management, can be reasonably
anticipated. |
|
|
| 2.6 Revenue recognition |
|
|
| a)
Lease Income |
|
|
| The
Company follows the 'financing method' in accounting for recognition of lease |
|
| income.
Under this method the unearned lease income is taken to income over the |
|
| term
of lease, starting with the month in which the lease is executed, so as to
produce |
|
| a
systematic return on the net investment in the lease. |
|
|
| Front-end-fee,
commitment fee and other commissions are taken to income. When |
|
| these
are realised and financing is approved. |
|
|
| b)
Long term investments |
|
|
| Return
on investment is recognised at the rates specified in the respective
investment |
|
| schemes
and accrued for the period. The income is recognised on the assumption |
|
| that
such investments will be held till maturity. |
|
|
| c)
Dividend income |
|
|
| Dividend
income is recorded at the time of closure of share transfer books of the |
|
| Company
declaring the dividend and is shown net of Zakat. |
|
|
| d)
Marketable securities |
|
|
| Sale
and purchase of securities are recognised on the date of contract. Capital
gain |
|
| and
loss on sale of marketable securities is taken to income in the period in
which it |
|
| arises. |
|
|
| 2.7
Foreign currencies |
|
|
| Transactions
m foreign currencies are accounted for in rupees at the rate prevailing on
the |
|
| date
of the transaction. Assets and liabilities in foreign currencies are
translated into rupees |
|
| at
the rate of exchange prevailing at the balance sheet date. Exchange
gains/losses are recorded |
|
| in
income currently. |
|
|
| 2.8
Taxation |
|
|
|
| Current |
|
|
| Income
for the purpose of computing current taxation is determined under the
provisions of |
|
| the
tax laws whereby lease rentals received or receivable are deemed to be
income. Provision |
|
| for
taxation is thus based on income determined in accordance with the
requirements of the |
|
| tax law. |
|
|
| Deferred |
|
|
| The
company accounts for deferred taxation using the liability method on all
significant timing |
|
| differences.
However, deferred tax is not provided if it can be established with
reasonable |
|
| probability
that these timing differences will not reverse in the foreseeable future. |
|
|
| 2.9 Staff retirement benefits |
|
|
| The
company operates a provident fund scheme for all eligible employees. Equal
contributions |
|
| are
made monthly both by the company and the employees in accordance with the
rules of |
|
| the
scheme at 7.5% of basic pay. |
|
|
| 3.
FIXED ASSETS- at cost less accumulated depreciation. |
|
|
|
|
C O S T |
|
D E P R E C I A T I 0 N |
|
|
|
As at 1 |
Additions |
(Disposal) |
As at 30 |
Rate |
As at 1 |
Disposal |
For the |
As at 30 |
Written down |
|
July |
|
June |
% |
July |
|
year / |
June |
value as at |
|
1996 |
|
1,997 |
|
1996 |
|
period |
1996 |
30-Jun |
|
|
1997 |
|
|
| Furniture
and fixture |
1,053,364 |
111,252 |
- |
1,164,616 |
10% |
312,202 |
- |
116,462 |
428,664 |
735,952 |
|
| Office
equipments |
2,335,803 |
1,410,437 |
- |
3,746,240 |
10% |
655417 |
- |
374,624 |
1,030,041 |
2,716,199 |
|
| Vehicles |
|
3,630,653 |
1,933,100 |
- |
5,563,753 |
20% |
1,230,081 |
- |
1,112,751 |
2,342,832 |
3,220,921 |
|
|
------------ |
------------ |
------------ |
------------ |
------------ |
------------ |
------------ |
------------ |
------------ |
------------ |
|
| Rupees |
|
| 1997 |
|
7,019,820 |
3,454,789 |
- |
10,474,609 |
|
2,197,700 |
- |
1,603,837 |
3,801,537 |
6,673,072 |
|
|
============ |
============ |
============ |
============ |
============ |
============ |
============ |
============ |
============ |
============ |
|
| Rupees |
|
| 1996 |
|
4,767,170 |
4,266,482 |
(2,013,832) |
7,019,820 |
|
1,490,557 |
(749,006) |
14,456,149 |
2,197,700 |
4,8622,120 |
|
|
|
============ |
============ |
============ |
============ |
============ |
============ |
============ |
============ |
============ |
============ |
|
|
|
|
|
|
|
|
|
|
|
|
|
Note |
30 ,June |
30 June |
|
| 4. NET INVESTMENT IN LEASES |
|
1997 |
1996 |
|
|
|
|
| Installment
contract receivables |
|
662,969,473 |
626,499,440 |
|
| Unearned
income |
|
(137,311,776) |
(127,879,703) |
|
|
----------- |
----------- |
|
| Net
Investment in leases |
|
4.10 |
525,657,697 |
498,619,737 |
|
| Current
maturity including overdue rentals shown |
|
|
|
| under
current assets |
|
(193,124,341) |
(172,811,582) |
|
| Provision for doubtful debts |
|
(5,835,154) |
(1,738,623) |
|
|
|
----------- |
----------- |
|
|
Rupees |
326,698,202 |
324,069,532 |
|
|
=========== |
=========== |
|
|
| 4.1
The company's aggregate exposure under lease financing exceeding 20% of the
paid-up capital |
|
| and
free reserves in respect of two listed companies amounted to Rs. 99.92
million (1996:5 |
|
| listed
companies Rs. 189.63 million). |
|
|
| 5. LONG TERM INVESTMENTS -
SECURED |
|
| Federal Investment Bonds |
|
5.1 |
950,000 |
950,000 |
|
| (10
years maturity) |
|
|
|
| Investment
in listed securities |
|
5.20 |
10,985,759 |
10,985,759 |
|
|
|
----------- |
----------- |
|
|
Rupees |
11,935,759 |
11,935,759 |
|
|
=========== |
=========== |
|
|
|
|
| 5.1
Investment in Federal investment Bonds (FIB's) has been made under the
relevant provisions |
|
| of
the State Bank of Pakistan's rules for non-banking financial institutions to
maintain liquidity |
|
| against
liabilities. The profit on FIBs' is 15% per annum which is payable half
yearly from |
|
| the
date of issue. |
|
|
|
30 June |
30 June |
|
| 5.2 |
|
1997 |
1996 |
|
| 30 June |
30 June |
|
Cost |
Cost |
|
| 1997 |
1996 |
|
| (No.
of Shares) |
|
| 14,100 |
14,100 |
19th ICP Mutual Fund |
|
238,290 |
2,38,290 |
|
|
|
|
|
152,750 |
152,750 |
|
| 32,500 |
32,500 |
1st Elite Capital Modaraba |
|
471,935 |
471,935 |
|
| 51,020 |
51,020 |
1st Punjab Modaraba |
|
178,850 |
178,850 |
|
| 36,500 |
36,500 |
1st Mehran Modaraba |
|
7,223 |
7,223 |
|
| 1,070 |
1,070 |
1st HBL Modaraba |
|
|
292,000 |
292,000 |
|
| 29,200 |
292,000 |
Natover Leasing Limited |
|
103,251 |
103,251 |
|
| 5,000 |
103,251 |
Standard Chartered
Merchantile Leasing |
|
|
Co. Ltd |
|
113,383 |
113,383 |
|
| 2,945 |
2,945 |
Al-Faisal Investment Bank
Ltd |
|
800,625 |
800,625 |
|
| 30,500 |
30,500 |
Al-Towfeek Investment
Bank Ltd |
588,750 |
588,750 |
|
| 16,500 |
15,000 |
Bank Commercial Al-Habib
Ltd |
|
83,655 |
83,655 |
|
| 2,145 |
2,145 |
Crescent Investment Bank
Ltd |
|
958,125 |
958,125 |
|
| 36,500 |
36,500 |
Pakistan Industrial
Credit & Invt Corp |
324,875 |
324,875 |
|
| 15,208 |
13,225 |
Prime Commercial Bank Ltd |
|
76,250 |
76,250 |
|
| 5,000 |
5,000 |
Faisal Spinning Mills Ltd |
|
| 4,124 |
4,124 |
Saif Textile Mills
Limited |
|
10,305 |
10,305 |
|
| 69 |
69 |
Kohinoor Textile Mills
Limited |
966 |
966 |
|
| 1,710 |
1,710 |
Sangbar Sugar Mills
Limited |
|
36,604 |
36,604 |
|
| 2,156 |
1,960 |
Shahmurad Sugar Mills
Limited |
|
27,000 |
27,000 |
|
|
| 52,625 |
52,625 |
Cherat Cement Company
Limited |
|
3,104,875 |
3,104,875 |
|
| 17,480 |
17,460 |
D.G. Khan Cement Company
Limited |
744,072 |
744,072 |
|
| 16,170 |
14,700 |
Essa Cement Industries
Limited |
433,400 |
433,400 |
|
|
157,500 |
157,500 |
|
| 15,000 |
15,000 |
Baifo Industries Limited |
|
230,000 |
230,009 |
|
| 5,000 |
5,000 |
Wah Noble Chemical
Limited |
|
|
| 26,400 |
24,000 |
Century Paper & Board
Mills Limited |
907,500 |
907,500 |
|
| 34,040 |
29,600 |
Sui Northern Gas
Pipelines Limited |
943,575 |
943,575 |
|
|
|
---------- |
---------- |
|
|
Rupees |
10,985,759 |
10,985,759 |
|
|
========== |
========== |
|
|
|
|
| The
aggregate market value of investments in listed companies as at 30 June 1997
amounted to |
|
| Rs.
5,699,636 (1996:Rs. 6,500,417). The carrying value of these investments have
not been reduced |
|
| as
in the opinion of the directors of the company, the decline is temporary. |
|
|
|
30 June |
30 June |
|
|
Note |
1997 |
1996 |
|
| 6.
DEFERRED COST |
|
|
|
|
|
|
| Pre-operating
expenses |
|
|
1,976,727 |
1,976,727 |
|
| Preliminary
expenses |
|
|
131,374 |
131,374 |
|
| Share
issue expenses |
|
|
1,267,816 |
1,267,816 |
|
| Right
share issue expenses |
|
|
2,371,170 |
2,371,170 |
|
|
|
----------- |
----------- |
|
|
|
5,747,087 |
5,747,087 |
|
| Amortised
to date |
|
|
(4,324,386) |
(3,512,561) |
|
|
'Rupees |
1,422,701 |
2,234,526 |
|
|
=========== |
=========== |
|
|
|
|
| 7.
ADVANCES, DEPOSIT, PREPAYMENTS AND |
|
| OTHER
RECEIVABLES |
|
|
| Advances |
|
| Staff |
|
286,000 |
412,201 |
|
| Taxation |
|
2,386,637 |
1,008,721 |
|
| Expenses |
|
744,940 |
259,323 |
|
| Others |
|
|
235,864 |
235,864 |
|
|
|
|
----------- |
----------- |
|
|
3,653,441 |
1,916,109 |
|
|
| Deposits |
|
112,058 |
1,112,058 |
|
| Prepayments |
|
226,583 |
934,898 |
|
|
| Other
receivables |
|
| Accrued
return on investment |
|
1,584,632 |
1,091,173I |
|
| Mark-up on advance against
lease |
|
1,363,234 |
1,024,072 |
|
| commitments |
|
|
|
| Lease
rentals |
|
7,097,361 |
3,037,152 |
|
| Overdue
lease rentals |
|
7.10 |
8,566,616 |
-- |
|
| Others |
|
|
479,135 |
285,208 |
|
|
|
19,090,978 |
5,437,605 |
|
|
|
----------- |
----------- |
|
|
Rupees |
23,083,060 |
9,400,670 |
|
|
========== |
========== |
|
|
| 7.1
The company subsequent to the year end has repossessed stock of generators
and the |
|
| management
is confident that the proceeds from the disposal of such generators would be |
|
| sufficient
to fully adjust these receivables. |
|
|
|
|
|
|
30 June |
30 June |
|
|
Note |
1997 |
1996 |
|
| 8.
CASH AND BANK BALANCES |
|
|
|
|
|
|
| Cash
at bank in: |
|
|
|
| -
Current account - Pak rupees |
|
|
61,288,308 |
4,570,795 |
|
| -
Term deposit account - Pak rupees |
|
|
- |
39,000,000 |
|
| -
Deposit account - Foreign currency |
|
|
- |
6,141,131 |
|
|
|
------------ |
------------ |
|
|
|
61,288,308 |
49,711,926 |
|
| Cash
in hand |
|
|
- |
9,768 |
|
|
|
------------ |
------------ |
|
|
Rupees |
61,288,308 |
49,721,694 |
|
|
|
============ |
============ |
|
| 9.
SHARE CAPITAL |
|
|
|
| Authorised |
|
|
|
| 20,000,000
(1996: 20,000,000) |
|
|
|
| ordinary
shares of Rs. 10/- each |
|
Rupees |
200,000,000 |
200,000,000 |
|
|
|
============ |
============ |
|
| Issued,
subscribed and paid up |
|
|
|
| 8,259,700
(1996: 8,259,700) ordinary |
|
|
|
| shares of Rs. 10/- each fully
paid in |
|
|
|
| cash |
|
Rupees |
82,597,000 |
82,597,000 |
|
|
|
|
============ |
============ |
|
|
|
|
|
|
| 10.
RESERVES |
|
|
|
| Statutory
reserve |
|
10.10 |
13,511,559 |
11,159,666 |
|
| Contingency
reserve |
|
10.20 |
10,513,154 |
9,972,395 |
|
|
|
----------- |
----------- |
|
|
Rupees |
24,024,713 |
21,132,061 |
|
|
|
============ |
============ |
|
| 10.
Statutory Reserve |
|
|
|
| At
beginning of the year/period |
|
|
11,159,666 |
6,573,267 |
|
| Transferred
from profit and loss account |
|
|
2,351,893 |
4,586,399 |
|
|
|
----------- |
----------- |
|
|
Rupees |
13,511,559 |
11,159,666 |
|
|
|
============ |
============ |
|
| 10. Contingency Reserve |
|
|
|
| At
begining of the year/period |
|
|
9,972,395 |
6,800,813 |
|
| Transferred
from profit and loss account |
|
|
540,759 |
3,171,582 |
|
|
|
----------- |
----------- |
|
|
Rupees |
10,513,154 |
9,972,395 |
|
|
|
============ |
============ |
|
|
|
|
|
| 11.
LONG TERM FINANCING - SECURED |
|
|
30 June |
30 June |
|
|
Note |
1997 |
1996 |
|
| From |
Limit |
Mark-up rate |
|
|
(Rupees) |
(Per annum) |
|
|
| Commercial |
50,000,000 |
20% to 23% |
11.1 |
44,599,773 |
61,971,333 |
|
| Banks |
|
|
|
|
|
| Financial Institutions |
125,000,000 |
19.5% to 22.75% |
11.2 |
97,346,588 |
130,177,202 |
|
|
|
|
|
------------ |
------------ |
|
|
Rupees |
141,946,361 |
192,148,535 |
|
|
|
============ |
============ |
|
|
| The
above financings are for lease operations and are secured against
hypothecation of leased assets, |
|
| lease
rentals and floating charge on the moveable assets of the company. |
|
|
| 11.1 Commercial banks |
|
|
|
30 June |
30 June |
|
|
1997 |
1996 |
|
| Due date |
|
Number of |
|
|
installments |
|
Principal Outstanding |
|
|
| 31-12-1998 |
|
On due date |
|
44,599,773 |
41,971,333 |
|
| 28,04,1998 |
|
On due date |
|
-- |
20,000,000 |
|
|
|
------------ |
------------ |
|
|
Rupees |
44,599,773 |
61,971,333 |
|
|
|
============ |
============ |
|
| 11.2 Financial institutions |
|
|
|
|
30 June |
30 June |
|
|
1997 |
1996 |
|
| Due date |
|
Number of |
|
|
installments |
|
Principal Outstanding |
|
|
| I2-09-1998 |
|
On due date |
|
- |
20,000,000 |
|
| 30-09-1998 |
|
On due date |
|
40,000,000 |
40,000,000 |
|
| 20-09-1995
to |
16 Quarterly |
|
|
|
| 20-06-1999 |
|
installments |
|
6,543,693 |
11,927,202 |
|
| 22-03-1999 |
|
4 Semi-annual
installments |
10,000,000 |
- |
|
| 28-05-1999 |
|
4 Semi-annual
installments |
7,500,000 |
- |
|
| 30-06-2000 |
|
12 Quarterly installments |
18,302,895 |
- |
|
| 15-07-1998 |
|
On due date |
|
5,000,000 |
- |
|
| 27-06-1998 |
|
On due date |
|
- |
8,250,000 |
|
| 11-12-1997 |
|
On due date |
|
- |
20,000,000 |
|
| 17-06-1998 |
|
On due date |
|
- |
20,000,000 |
|
| 30-09-1997 |
|
On due date |
|
- |
10,000,000 |
|
| 30-09-1998 |
|
4 Quarterly installments |
10,000,000 |
- |
|
|
------------ |
------------ |
|
|
Rupees |
97,346,588 |
130,177,202 |
|
|
============ |
============ |
|
|
|
|
| 12.
CERTIFICATES OF INVESTMENT |
|
|
| These
represent the mobilization of funds under the scheme of certificates of
investment issued |
|
| with
the permission of Corporate Law Authority. The scheme is based on profit and
loss sharing |
|
| basis.
The certificates are for terms ranging from three months to five years. |
|
|
|
|
30 June |
30 June |
|
|
Note |
1997 |
1996 |
|
| 13.
LONG TERM DEPOSITS |
|
|
| Customer security |
|
13.10 |
72,369,903 |
69,554,991 |
|
| deposit
on lease |
|
|
|
|
| Repayable
within 12 months shown under |
|
|
|
| current
liabilities |
|
|
(15,878,544) |
(13,718,186) |
|
|
|
----------- |
----------- |
|
|
|
56,491,359 |
55,836,805 |
|
| Others |
|
89,072 |
89,072 |
|
|
|
|
----------- |
----------- |
|
|
Rupees |
56,580,431 |
55,925,877 |
|
|
|
|
=========== |
=========== |
|
|
|
|
|
|
| 13.1
This represents sum received from lessees under lease contracts and are
repayable/adjustable |
|
| at
the expiry of the lease period. |
|
|
| 14.
CURRENT MATURITY OF LONG TERM FINANCE, DEPOSITS |
|
| AND
LEASE FACILITY |
|
|
|
| Long
term finance |
|
117,830,614 |
4,429,027 |
|
| Long
term deposits |
|
13 |
15,878,544 |
13,718,186 |
|
|
|
----------- |
----------- |
|
|
Rupees |
133,709,158 |
18,147,213 |
|
|
=========== |
=========== |
|
| 15.
FINANCE UNDER MARK-UP ARRANGEMENTS |
|
|
| Banks
and financial institutions - short term loan |
|
- |
61,117,715 |
|
| Running
finance under mark-up arrangements |
|
29,415,458 |
20,082,286 |
|
| Morabaha
finance |
|
- |
20,000,000 |
|
| Musharika
finance |
|
7,000,000 |
- |
|
| Others |
|
10,000,000 |
25,000,000 |
|
|
----------- |
----------- |
|
|
Rupees |
46,415,458 |
126,200,001 |
|
|
=========== |
=========== |
|
|
|
|
| The
Company has financing facilities from various banks, financial institutions
and others aggregating |
|
| to
Rs. 87 million (1996: Rs. 131 million) at mark-up ranging from 18.5% to 22%
per annum. These |
|
| arrangements
are generally for a period of upto one year and are renewable. |
|
|
| The
above financings are for lease operations and are secured against
hypothecation of leased assets, |
|
| lease
rentals and floating charge on the moveable assets of the company. |
|
|
|
|
| 16.
ACCRUED EXPENSES AND OTHER LIABILITIES |
|
|
30 June |
30 June |
|
|
1997 |
1996 |
|
|
| Mark-up
on ' |
|
| Long
term finance |
|
4,724,478 |
7,323,486 |
|
| Short
term loan |
|
181,644 |
1,107,465 |
|
| Running
finance |
|
979,196 |
895,789 |
|
| Morabaha
finance |
|
- |
137,398 |
|
| Musharika
finance |
|
23,726 |
- |
|
| Certificates
of Investment |
|
1,819,497 |
- |
|
| Others |
|
329,315 |
693,526 |
|
|
| Advance
lease rentals |
|
3,291,983 |
3,331,165 |
|
| Accrued
expenses |
|
40,000 |
45,000 |
|
|
|
|
| Other
Liabilities |
|
|
|
| Advertisement
payable |
|
116,250 |
- |
|
| Tax
deducted at source |
|
49,784 |
5,529 |
|
| Excise
Duty on lease rental |
|
233,618 |
- |
|
| Unearned
front end fee |
|
390,389 |
742,389 |
|
| Bonus |
|
236,315 |
308,272 |
|
| Others |
|
895,421 |
505,555 |
|
|
---------- |
---------- |
|
|
Rupees |
13,311,616 |
15,095,574 |
|
|
|
|
========== |
========== |
|
|
| 17. CONTINGENCY AND COMMITMENTS |
|
|
|
| 17.1
No provision has been made in respect of Zakat deducted by a financial
institution amounting |
|
| to
Rs. 629,315 (1996 Rs. 629,315) as in the opinion of the directors the Company
did not |
|
| fall
under the definition of Sahib-e-Nisab under the provisions of Zakat &
Ushr Ordinance, |
|
| 1980
at the time of deduction. |
|
|
| 17.2 Commitments for |
|
| lease
disbursements |
|
Rupees |
15.5 million |
86.2 million |
|
| 17.3 Letter of credit |
|
|
============ |
============ |
|
| outstanding |
|
Rupees |
- |
7.5 million |
|
|
|
============ |
============ |
|
|
|
Year Ended |
Eighteen months |
|
|
30 June |
period ended |
|
|
1997 |
30 June 1996 |
|
| 18.
INCOME FROM LEASING OPERATIONS |
|
|
| Income
on lease contracts |
|
90,991,501 |
123,803,025 |
|
| Front-end
and commitment fee |
|
99,166 |
4,249,077 |
|
| Return
on advance against leases |
|
3,273,726 |
5,765,500 |
|
| Gain
on cancellation of lease contracts |
|
79,317 |
244,727 |
|
| Other
lease income |
|
2,917,330 |
900,481 |
|
|
---------- |
---------- |
|
|
Rupees |
97,361,040 |
134,962,810 |
|
|
============== |
============== |
|
|
|
|
|
|
Year Ended |
Eighteen months |
|
|
30 June |
period ended |
|
|
Note |
1997 |
30 June 1996 |
|
| 19.
INCOME ON INVESTMENTS |
|
|
|
|
|
|
| Gain/(Loss)
on sale of marketable securities - net |
19.10 |
- |
(41,029) |
|
| Mark-up
on Federal Investment Bonds |
|
|
142,500 |
179,155 |
|
| Return
on deposit account |
|
|
783,154 |
544,967 |
|
| Dividend
income-net |
|
19.20 |
279,779 |
246,904 |
|
|
|
----------- |
----------- |
|
|
Rupees |
1,205,433 |
929,997 |
|
|
|
|
============== |
============== |
|
|
| 19.1
Gain/(Loss) on sale of marketable securities |
|
| Brokerage
and commission |
|
- |
(1,977) |
|
| Share
transfer stamps fees |
|
- |
(39,052) |
|
|
----------- |
----------- |
|
|
Rupees |
- |
(41,029) |
|
|
|
=========== |
=========== |
|
| 19.2
Dividend income |
|
|
|
| Dividend
income |
|
|
285,066 |
273,868 |
|
| Zakat
deducted |
|
|
(5,287) |
(26,964) |
|
|
|
----------- |
----------- |
|
|
Rupees |
279,779 |
246,904 |
|
|
=========== |
=========== |
|
| 20. OTHER INCOME |
|
|
|
| Mark
up commission and fee income |
|
5,497 |
307,109 |
|
| Gain
on disposal of fixed assets |
|
- |
277,152 |
|
| Exchange
gain |
|
1,208,241 |
655,824 |
|
| Liabilities
written back |
|
- |
469,657 |
|
| Others |
|
46,000 |
- |
|
|
----------- |
----------- |
|
|
Rupees |
1,259,738 |
1,709,742 |
|
|
=========== |
=========== |
|
|
|
|
| 21. ADMINISTRATIVE AND
OPERATING EXPENSES |
|
|
| Salaries,
wages and other benefits |
|
5,269,880 |
6,561,810 |
|
| Staff
welfare and training |
|
986,782 |
655,724 |
|
| Bonus |
|
238,044 |
285,000 |
|
| Rent,
rates and taxes |
|
1,020,567 |
1,300,844 |
|
| Travelling
and conveyance |
|
1,558,619 |
2,056,430 |
|
| Legal
and professional |
|
588,772 |
919,36! |
|
| Telephone,
telex and postage |
|
542,815 |
769,412 |
|
| Printing
and stationery |
|
424,911 |
723,226 |
|
| Depreciation |
|
1,603,837 |
1,456,149 |
|
| Fees
and subscription |
|
244,213 |
591,165 |
|
| Utilities |
|
605,822 |
1,222,866 |
|
| Advertisement |
|
276,989 |
389,318 |
|
| Auditors'
remuneration |
|
21.1 |
90,000 |
103,550 |
|
| Repair
and maintenance |
|
417,135 |
895,402 |
|
| Entertainment |
|
211,780 |
270,612 |
|
| Insurance |
|
488,790 |
486,109 |
|
| General
expenses |
|
445,896 |
341,294 |
|
| Contribution
to provident fund |
|
200,778 |
247,736 |
|
|
----------- |
----------- |
|
|
Rupees |
15,315,630 |
19,276,008 |
|
|
============ |
============ |
|
|
|
|
|
|
|
Year Ended |
Eighteen months |
|
|
30 June |
period ended |
|
|
1997 |
30 June 1996 |
|
| 21.1
Auditors' Remuneration |
|
|
| Audit fee |
|
40,000 |
45,000 |
|
| Special
audit |
|
50,000 |
50,000 |
|
| Out
of pocket expenses |
|
- |
8,550 |
|
|
----------- |
----------- |
|
|
Rupees |
90,000 |
103,550 |
|
|
=========== |
=========== |
|
|
|
|
| 22. FINANCIAL CHARGES |
|
| Mark
up on: |
|
|
|
| Long
term financing |
|
36,155,033 |
37,308,326 |
|
| Running
finance |
|
5,168,159 |
6,692,068 |
|
| Short
term finance |
|
5,938,549 |
18,034,349 |
|
| Morabaha
finance |
|
3,700,820 |
6,466,988 |
|
| Musharika
finance |
|
367,699 |
- |
|
| Certificates
of Investment |
|
11,861,746 |
- |
|
| Others |
|
3,444,966 |
18,266,666 |
|
| Financial
charges on lease |
|
- |
13,455 |
|
| Bank
and other charges |
|
706,656 |
888,454 |
|
|
----------- |
----------- |
|
|
Rupees |
67,343,628 |
87,670,306 |
|
|
============ |
============ |
|
|
|
|
| 23.
PROVISION FOR DOUBTFUL DEBTS |
|
|
|
| Provision
made under Rule 14 of Rules of Business for NBFI's |
989,609 |
1,278,623 |
|
| Other
provisions |
|
3,106,922 |
- |
|
|
----------- |
----------- |
|
|
Rupees |
4,096,531 |
1,278,623 |
|
|
|
|
============ |
============ |
|
| 24.
TAXATION |
|
| Current |
|
| The
provision for current period taxation has not been made in view ot brought
forward tax losses. |
|
| However,
provision for minimum tax under section 80(D) of the Income Tax Ordinance,
1979 has |
|
| been
made in these accounts. |
|
|
| The
income tax assessments of the company have been finalised upto and including
assessment |
|
| year
1996-97. The assessment for assessment year 1993-94 has been set aside by the
Commissioner |
|
| of
Income Tax (Appeals). The company has preferred appeals against certain
disallowances for assessment |
|
| years
1994-95, 1995-96 and 1996-97. In case of adverse decision in appeals an
additional tax liability |
|
| of
Rs. 4.084 million would arise which has not been provided in the accounts, as
the management |
|
| expects
a favourable outcome of appeals. |
|
|
| Deferred |
|
| Deferred
tax arising due to timing differences computed under the liability method is
estimated at |
|
| Rs.
40.587 million (1996: Rs. 18.58 million). Timing differences are not likely
to reverse in the foreseeable |
|
| future
and therefore, no accrual for deferred tax has been made in these accounts. |
|
|
|
|
|
Year Ended |
Eighteen months |
|
|
30 June |
period ended |
|
|
1997 |
30 June 1996 |
|
| 25. TRANSACTIONS WITH
ASSOCIATED UNDERTAKINGS |
|
|
| Lease disbursements |
|
| - NIT |
|
Rupees |
1,344,810 |
- |
|
| Underwriting commission |
|
| paid |
|
Rupees |
- |
2,343,750 |
|
| Mark-up
paid |
|
Rupees |
- |
5,063,500 |
|
|
| 26.
REMUNERATION OF CHIEF EXECUTIVE AND EXECUTIVES |
|
|
|
|
Chief Executive |
|
Executives |
|
|
Year ended |
Eighteen months |
Year ended |
Eighteen months |
|
|
30 June |
period ended |
30 June |
period ended |
|
|
1997 |
30 June 1996 |
1997 |
30 June 1996 |
|
|
| Managerial
remuneration |
828,000 |
1,285,000 |
561,896 |
936,344 |
|
| House rent |
|
372,000 |
558,000 |
244,010 |
365,910 |
|
| Provident
fund |
62,100 |
93,150 |
29,741 |
59,394 |
|
| Utilities |
|
82,800 |
101,948 |
58,572 |
225,510 |
|
| Medical |
|
82,800 |
115,684 |
38,225 |
72,889 |
|
| Others |
|
84,000 |
96,000 |
- |
- |
|
|
|
-------------- |
-------------- |
-------------- |
-------------- |
|
| Rupees |
|
1,511,700 |
2,249,782 |
932,444 |
1,660,047 |
|
|
============== |
============== |
============== |
============== |
|
| No.
of persons |
1 |
1 |
2 |
2 |
|
|
============== |
============== |
============== |
============== |
|
|
|
|
| The
chief executive and executives are provided with company owned and maintained
cars. |
|
|
| The
aggregate amount charged in the accounts for fee to eleven non-salaried
directors was Rs. 19,500/- |
|
| (1996:
Rs. 31,000) |
|
|
| 27.
GENERAL |
|
|
| 27.1
Previous year's figures have been re-arranged wherever necessary to
facilitate comparison. |
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| 27.2
Figures have been rounded off to the nearest rupee. |
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