| Crescent Leasing Corporation Limited |
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| Annual
Report 1998 |
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| Contents |
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| Company
Information |
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| Notice
of Meeting |
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| Directors'
Report |
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| Financial
Highlights |
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| Graphs |
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| Pattern
of Shareholding |
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| Auditors'
Report |
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| Balance Sheet |
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| Profit
and Loss Account |
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| Statement
of Changes in Financial Position |
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| Notes
to the Accounts |
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| Company
Information |
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| Board
Of Directors |
|
| Mr.
Aftab Ahmed Khan |
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| Chairman |
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| Mr.
Javed A. Callea |
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| Chief
Executive |
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| Mr.
Altaf M. Saleem |
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| Mr.
Manzur-uI-Haq |
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| Mr.
Rashid Ahmed |
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| Mr.
Nessar Ahmed |
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| Mr.
Shabbir Hashmi |
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| Company
Secretary |
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| Mr.
Zaheer A. Shaikh |
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| Mr.
Rashid Sadiq |
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| Auditors |
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| Khalid
Majid Husain Rahman & Co. |
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| Chartered
Accountants |
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| Legal
Advisors |
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| Cornelius
Lane & Mufti |
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| Advocates
& Solicitors |
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| Lenders
& Bankers |
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| Commonwealth
Development Corporation |
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| Allied
Bank of Pakistan |
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| Saudi-Pak
Industrial & Agricultural Investment Co. (Pvt) Ltd. |
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| National
Discounting Services Ltd. |
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| Orix
Investment Bank Ltd. |
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| Pak-Kuwait
Investment Co. (Pvt) Ltd. |
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| Bank
of America(NT&SA) |
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| The
Hongkong & Shanghai Banking Corp. |
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| Registered
and Share Transfer Office |
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| 83-Babar
Block, New Garden Town, Lahore |
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| Phone:
042- 588-1974 & 75 Fax: 042- 588-1976 |
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| Email:
rashid.sadiq@cressoft.com.pk |
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|
| Head Office |
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| B-801
& 802, 8th Floor, Lakson Square, Bldg. # 3, Sarwar Shaheed Road, Karachi. |
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| Phone:
021 - 566-1938, 48 & 58 Fax: 021 - 566-1988 |
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| Email:
crescent@super. net.pk |
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| *For
a copy of this report write to our Head Office/Registered Office |
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| Notice
Of Annual General Meeting |
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| NOTICE
is hereby given that the 11th Annual General Meeting of the shareholders of |
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| Crescent
Leasing Corporation Limited will be held on Monday, October 26, 1998, at |
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| 11:00
a.m. at Registered Office, 83-Babar Block, New Garden Town, Lahore to
transact |
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| the
following business:- |
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| ORDINARY
BUSINESS |
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| 1.
To receive, consider and adopt the audited accounts of the company for the
year |
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| ended
June 30, 1998 together with Directors' and Auditors' Reports thereon. |
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| 2.
To approve, as recommended by the Directors, the issue of bonus shares @ 15%
for |
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| the
year ended June 30, 1998. |
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| 3.
To appoint Auditors (for the year ending June 30, 1999) and fix their
remuneration. |
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| The
present Auditors M/S Khalid Majid Husain Rahman, Chartered Accountants, |
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| retire
and being eligible, offer themselves for re-appointment. |
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|
| BOOK
CLOSURE |
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| The
share transfer books of the company will remain closed from October 17, 1998
to |
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| October
26, 1998 (both days inclusive). Transfer received in order at the registered |
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|
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| office
by the close of business hours on October 16, 1998 will be treated in time
for |
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| the
issue. of bonus shares. |
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|
BY ORDER OF THE BOARD |
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|
ZAHEER. A. SHAIKH |
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|
Corporate Secretary |
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| REGISTERED
OFFICE: |
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| 83-Babar
Block, New Garden Town |
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| LAHORE. |
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| Telephone
No. (042) 5881974-75, 5839631 |
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| Fax
No. (042) 5881976 |
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|
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| Dated:
October 2nd, 1998. |
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| NOTE: |
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|
| 1.
A member eligible to attend and vote at this Meeting may appoint another |
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| member
as his/her proxy to attend and vote instead of him/her. |
|
|
| 2.
The instrument appointing a proxy and the power of attorney or other
authority |
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| under
which it is signed or a notarially certified copy of the power of attorney
must |
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| be
deposited at the registered office of the company at least 48 hours before
the |
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| meeting.
A form of proxy is enclosed. |
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| 3.
Shareholders are requested to immediately notify the change in address, if
any. |
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|
| Directors'
Report |
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| Your
Directors have pleasure in presenting the Audited Accounts for the period
from |
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| July,
1997 to June, 1998. |
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|
| The
financial results of the Company for the period under review are summarized
as |
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| follows: |
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1998 |
1997 |
|
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|
Rs. ('000) |
Rs. ('000) |
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|
|
|
| Revenue |
|
116,982 |
97,363 |
|
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| Expenditure |
|
75,522 |
59,923 |
|
|
|
|
|
|
|
| Profit
before taxation |
|
41,460 |
37,440 |
|
|
| Provision
for taxation |
|
1,267 |
1,032 |
|
|
|
|
--------------- |
--------------- |
|
|
| Profit
after taxation |
|
40,193 |
36,408 |
|
|
|
|
|
| Unappropriated
profit brought forward |
19,925 |
15,945 |
|
|
|
|
--------------- |
--------------- |
|
|
| Profit
available for appropriation |
|
60,118 |
52,353 |
|
|
|
|
|
| Appropriations |
|
|
|
| Transfer
to reserve under NBFI regulations |
8,039 |
7,282 |
|
|
| Transfer
to general reserve |
|
51,961 |
2,647 |
|
|
| Proposed
Cash Dividend @ 15% |
|
-- |
22,500 |
|
|
|
|
--------------- |
--------------- |
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|
|
|
60,000 |
32,429 |
|
|
|
--------------- |
--------------- |
|
|
| Unappropriated
profit carried forward |
118 |
19,924 |
|
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|
========== |
========== |
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| OPERATING
RESULTS |
|
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| AI
Hamdolillah, the company continued to follow the path of overall progress.
New |
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| leases
executed during the period amounted to Rs. 276 million (1997, Rs. 244
million). |
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| The
Net Investment in leases thus rose from Rs. 512 million in 1997, to Rs. 634
million in |
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| 1998.
Correspondingly, lease income also improved from Rs. 89 million in 1997 to
Rs. 106 |
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| million
in 1998, increasing the profit after tax figure from Rs.36 million to Rs.40
million and |
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| earning
per share from Rs.2.42 to Rs.2.68.The company also adopted a more prudent |
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| income
recognition and provision for doubtful debts policy. |
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|
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| Profit
After Tax |
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| The
company continued to pursue its policy of focussing on small and medium
ticket |
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| leases
and thus kept the average lease size at Rs. 2.0 million approx. The company
has |
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| also
successfully ventured into consumer leasing where its main thrust is on
creditable |
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| corporate
clients. The emphasis on sectoral diversification enabled to restrict maximum |
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| exposure
in any one sector to 13.61% down from 18% last year. |
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| Lease
Portfolio By Type of Customer |
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| Plant
& Machinery retained. its position as the major leased asset at 69% of
the portfolio |
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| followed
by automobiles at 27% and office equipment at 4%, The tight monitoring |
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| efforts
contributed towards achieving a recovery rate of over 95%, |
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|
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| The
foreign currency credit line of US $ 5 million sanctioned in the last quarter
of FY 1998 |
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| went
into limbo in the post nuclear option scenario. The company however, arranged |
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| both
short and long term financing from local avenues to comfortably tide over the
year. |
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| The
Entity rating of CresLease for long-term obligations was upgraded from |
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| BBB-(minus)
to BBB during the year reflecting the sound position of the company. |
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| FUTURE
OUTLOOK |
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| The
economic outlook for FY 1999 does not appear to be showing signs of much |
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| improvement
over existing levels. The key fundamentals for economic revival i.e., |
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| complete
lifting of sanctions, restoration of local and overseas investors confidence |
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| and
improved economic management are uncertain especially for the latter two. |
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| Capital
Investments would remain to be low, both, in public and private sector on |
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| account
of resource constraints and economic contraction, respectively. Sectors with |
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| high-income
elasticity would remain under pressure and experience more losses. |
|
| Devaluation
of rupee alongwith increased domestic liquidity would fuel inflation to |
|
| cross
double-digit levels. A resolution on sanctions by late this year / early next
year |
|
| would
prevent economic fall out and induce liquidity into real estate and stock
market. |
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| However,
the domestic engines of growth would be difficult to start without consistent |
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| and
transparent economic policies. FY 1999, in general would remain to be an |
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| unpredictable
and difficult year. |
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| Your
company intends to continue with consolidation and extend business in sectors |
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| with
low risk profile. It would endeavor towards diversification of resource
mobilization |
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| particularly
from domestic resources. |
|
|
| Given
the uncertainty in economic environment on the one hand and with the |
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| objective
of balancing the uncertainty in the economic environment with the interest |
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| of
shareholders the directors have recommended an issue of bonus shares out of |
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| capital
reserve created for premium on issue of right shares @ 15% for the year ended |
|
| June 30, 1998. |
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|
| The
Board wishes to record their appreciation of the valuable contribution of |
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| Mr.
Shams-ul-lslam and Mr. Shahid Ghaffar, during their term. The Board welcomes |
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| Mr.
Shabbir Hashmi on the Board. |
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| ACKNOWLEDGMENT |
|
| The
Board acknowledges the support of the regulatory authorities, banks and
lending |
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| institutions.
The Board wishes to place on record its appreciation of the hard work and |
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| dedication
shown by the company personnel. |
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|
| AUDITORS |
|
| The
auditors, Khalid Majid Husain Rahman, Chartered Accountants retire and being |
|
| eligible,
offer themselves for re-appointment. |
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|
| PATTERN
OF SHAREHOLDING |
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| The
pattern of shareholding as on June 30, 1998, is annexed to this report. |
|
|
| On
behalf of the Board. |
|
|
September 18th, 1998 |
Javed A. Callea |
|
|
Karachi. |
|
Chief Executive |
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|
|
| Five
Years At A Glance |
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|
|
|
| BALANCE
SHEET AS AT |
|
30th June, 98 |
30th June, 97 |
30th June, 96 |
30th June, 95 |
31st Dec, 94 |
|
|
|
(For 18 Months) |
(For 6 Months) |
|
|
|
| SHARE
CAPITAL AND RESERVES |
|
|
|
(RS. IN '000) |
|
|
|
| Authorized
Capital |
|
300,000 |
300,000 |
300,000 |
200,000 |
100,000 |
|
|
|
================================================================ |
|
| Paid-up capital |
|
|
150,000 |
150,000 |
150,000 |
150,000 |
75,000 |
|
| Reserves |
|
145,397 |
105,204 |
91,296 |
81,496 |
13,877 |
|
|
|
------------------------------------------------------------------------------------------------------ |
|
| Net Worth |
|
|
295,397 |
255,204 |
241,296 |
231,496 |
88,877 |
|
|
|
|
|
|
| ALLOWANCE
FOR POTENTIAL LEASE LOSSES |
8,422 |
844 |
371 |
89 |
46 |
|
| LONG-TERM
FINANCES |
|
246,304 |
254,448 |
152,466 |
1,045 |
2,984 |
|
|
|
|
|
| LIABILITIES
AGAINST ASSETS SUBJECT |
|
|
| TO
FINANCE LEASE |
|
813 |
89 |
599 |
521 |
-- |
|
|
|
|
| LONG-TERM
DEPOSITS |
|
54,430 |
47,676 |
33,175 |
20,209 |
13,924 |
|
|
|
|
|
| CURRENT
LIABILITIES |
|
------------------------------------------------------------------------------------------------------ |
|
| Current
maturity of long-term liabilities |
|
88,692 |
61,039 |
19,491 |
7,903 |
12,154 |
|
| Certificates
at investment |
|
50,000 |
10,000 |
-- |
-- |
-- |
|
| Short-term
finances |
|
63,538 |
22,929 |
3,700 |
10,000 |
35,000 |
|
| Creditors,
accrued and other liabilities |
|
27,896 |
36,679 |
13,419 |
1,586 |
1,892 |
|
| Proposed
dividend |
|
-- |
22,500 |
22,500 |
-- |
-- |
|
|
|
------------------------------------------------------------------------------------------------------ |
|
|
|
230,126 |
153,147 |
59,110 |
19,489 |
49,046 |
|
|
|
------------------------------------------------------------------------------------------------------ |
|
|
|
835,492 |
711,408 |
486,977 |
272,849 |
154,877 |
|
|
|
================================================================ |
|
|
|
|
|
| TANGIBLE
FIXED ASSETS |
|
14,665 |
16,488 |
17,655 |
12,313 |
2,568 |
|
| NET
INVESTMENT IN LEASES |
|
410,502 |
346,069 |
272,409 |
127,857 |
97,557 |
|
| LONG
TERM INVESTMENTS |
|
4,125 |
4,125 |
-- |
-- |
-- |
|
| LONG-TERM
DEPOSITS AND DEFERRED COSTS |
18,712 |
23,418 |
17,062 |
1,347 |
1,054 |
|
| LONG-TERM
LOAN |
|
-- |
1,700 |
500 |
-- |
164 |
|
|
|
|
|
| CURRENT
ASSETS |
|
------------------------------------------------------------------------------------------------------ |
|
| Current
maturity of net investment in leases |
|
223,425 |
165,759 |
110,738 |
52,853 |
40,179 |
|
| Short-term
investments |
|
29,315 |
55,435 |
40,935 |
56,917 |
8,925 |
|
| Advances,
deposits, prepayments and |
|
|
| other
receivables |
|
23,121 |
25,095 |
14,877 |
19,669 |
2,986 |
|
| Cash
and bank balances |
|
111,627 |
73,319 |
12,801 |
1,893 |
1,445 |
|
|
|
------------------------------------------------------------------------------------------------------ |
|
|
|
387,488 |
319,608 |
179,351 |
131,332 |
53,534 |
|
|
|
------------------------------------------------------------------------------------------------------ |
|
|
|
835,492 |
711,408 |
486,977 |
272,849 |
154,877 |
|
|
|
================================================================ |
|
|
|
|
|
| PROFIT
AND LOSS ACCOUNT |
|
|
|
|
------------------------------------------------------------------------------------------------------ |
|
| Income
from lease operations |
|
106,041 |
89,381 |
61,237 |
13,838 |
21,854 |
|
| Other income |
|
|
10,940 |
7,982 |
15,670 |
4,771 |
2,232 |
|
|
|
------------------------------------------------------------------------------------------------------ |
|
| Total revenue |
|
116,982 |
97,363 |
76,907 |
18,610 |
24,086 |
|
|
|
------------------------------------------------------------------------------------------------------ |
|
| Administrative
and operating expenses |
|
13,392 |
10,974 |
13,656 |
3,902 |
6,501 |
|
| Financial
charges |
|
53,969 |
47,985 |
17,876 |
2,935 |
7,233 |
|
| Allowance
for potential lease loss |
|
7,577 |
473 |
353 |
241 |
-- |
|
| Other charges |
|
|
584 |
491 |
728 |
-- |
393 |
|
|
|
------------------------------------------------------------------------------------------------------ |
|
| Total Expenses |
|
75,522 |
59,923 |
32,613 |
7,078 |
14,127 |
|
| Operating
profit |
|
41,460 |
37,440 |
44,295 |
11,531 |
9,959 |
|
|
|
|
| Taxation |
|
1,267 |
1,032 |
626 |
162 |
406 |
|
| Profit
after taxation |
|
40,193 |
36,408 |
43,669 |
11,369 |
9,553 |
|
|
|
|
| Unappropriated
profit brought forward |
|
19,925 |
15,945 |
8,345 |
8,345 |
3,457 |
|
|
|
------------------------------------------------------------------------------------------------------ |
|
|
|
60,118 |
52,353 |
52,014 |
19,714 |
13,010 |
|
| Appropriations: |
|
|
|
| Transfer to |
|
|
------------------------------------------------------------------------------------------------------ |
|
| -
reserve under NBFI regulations |
|
8,039 |
7,282 |
8,734 |
-- |
1,911 |
|
| -
reserve for doubtful debts |
|
-- |
2,647 |
-- |
-- |
-- |
|
| -
general reserve |
|
51,961 |
-- |
4,835 |
-- |
2,755 |
|
| Proposed
Cash Dividend @ 15% |
|
-- |
22,500 |
22,500 |
-- |
-- |
|
|
|
------------------------------------------------------------------------------------------------------ |
|
|
|
60,000 |
32,428 |
36,069 |
--- |
4,665 |
|
|
|
------------------------------------------------------------------------------------------------------ |
|
| Unappropriated
profit carried forward |
|
118 |
19,925 |
15,945 |
19,714 |
8,345 |
|
|
|
================================================================ |
|
| Key Ratios |
|
|
|
| 1.
Earning Per Share |
|
2.68 |
2.43 |
2.91 |
0.76 |
1.27 |
|
| 2.
Breakup Value |
|
19.69 |
17.01 |
16.09 |
15.43 |
11.85 |
|
| 3.
Return on Equity |
|
14.60% |
14.66% |
18.47% |
4.98% |
11.21% |
|
| 4. Gearing |
|
|
1.73 |
1.56 |
0.87 |
0.17 |
0.72 |
|
| 5.
Time Interest Earned Ratio |
|
1.74 |
1.76 |
3.44 |
4.87 |
2.32 |
|
|
|
|
|
| Pay Out |
|
|
|
|
|
|
|
| Cash |
|
|
-- |
-- |
-- |
-- |
-- |
|
| Bonus |
|
|
15% |
15% |
15% |
15% |
15% |
|
|
|
| Pattern
of Shareholding As At 30th June 1998 |
|
|
| No. of |
From |
To |
Total |
|
| Shareholders |
|
Shares Held |
|
| 9 |
1 |
100 |
670 |
|
| 38 |
101 |
500 |
15350 |
|
| 54 |
501 |
1000 |
47370 |
|
| 107 |
1001 |
5000 |
241740 |
|
| 29 |
5001 |
10000 |
238360 |
|
| 13 |
10001 |
15000 |
159080 |
|
| 3 |
15001 |
20000 |
49600 |
|
| 10 |
20001 |
25000 |
239500 |
|
| 6 |
25001 |
30000 |
168140 |
|
| 3 |
30001 |
35000 |
91860 |
|
| 3 |
35001 |
40000 |
116500 |
|
| 1 |
40001 |
45000 |
41500 |
|
| 1 |
45001 |
50000 |
49000 |
|
| 1 |
50001 |
55000 |
52000 |
|
| 4 |
55001 |
60000 |
233900 |
|
| 1 |
60001 |
65000 |
63950 |
|
| 1 |
75001 |
80000 |
75300 |
|
| 1 |
80001 |
85000 |
85000 |
|
| 1 |
90001 |
95000 |
90500 |
|
| 1 |
95001 |
100000 |
96000 |
|
| 1 |
385001 |
390000 |
386900 |
|
| 1 |
400001 |
405000 |
403800 |
|
| 1 |
535001 |
540000 |
537000 |
|
| 1 |
640001 |
645000 |
644800 |
|
| 1 |
875001 |
880000 |
877000 |
|
| 1 |
1245001 |
1250000 |
1249100 |
|
| 1 |
1695001 |
1700000 |
1696880 |
|
| 1 |
1755001 |
1760000 |
1758200 |
|
| 1 |
2290001 |
2295000 |
2291000 |
|
| 1 |
2995001 |
3000000 |
3000000 |
|
| ---------------------------------------------------------------------------- |
|
| 297 |
|
15000000 |
|
| ================================================ |
|
|
| Categories
of Shareholders |
|
Number |
Shares Held |
Percentage |
|
|
| Individuals |
|
261 |
1367620 |
9.12 |
|
| Investment
Companies |
|
2 |
112640 |
0.75 |
|
| Insurance
Companies |
|
2 |
71200 |
0.47 |
|
| Joint
Stock Companies |
|
12 |
3483800 |
23.23 |
|
| Financial
Institutions |
|
7 |
3911500 |
26.08 |
|
| Modaraba
Companies |
|
1 |
644800 |
4.30 |
|
| Others |
|
12 |
5408440 |
36.05 |
|
| ------------------------------------------------------------------------------------------------------------------- |
|
| Total |
|
297 |
15000000 |
100.00 |
|
| ======================================================================== |
|
| Others |
|
|
| Modarabas |
|
10 |
2394840 |
1,596 |
|
| Central
Depository Co. of Pak |
|
1 |
13600 |
0.09 |
|
| Non Residents |
|
1 |
3000000 |
20.00 |
|
| ------------------------------------------------------------------------------------------------------------------- |
|
| Total |
|
12 |
5408440 |
36.05 |
|
| ======================================================================== |
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
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| We
have audited the annexed balance sheet of Crescent Leasing Corporation
Limited as at |
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| June
30, 1998 and the related profit and loss account and statement of changes in
financial |
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| position,
together with the notes forming part thereof, for the year then ended and we
state |
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| that
we have obtained all the information and explanations which to the best of
our |
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| knowledge
and belief were necessary for the purposes of our audit and, after due |
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| verification
thereof, we report that: |
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| (a)
in our opinion, proper books of account have been kept by the company as |
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| required
by the Companies Ordinance, 1984; |
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| (b)
in our opinion: |
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