| 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 |
|
|
| We
have audited the annexed balance sheet of Crescent Leasing Corporation
Limited as at |
|
| June
30, 1998 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 except for the |
|
| changes
as stated in notes 2.2, 2.9 and 2.10 with which we concur; |
|
|
| (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 of the company's affairs
as at |
|
| June
30, 1998 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. |
|
|
|
|
| Deloitte
Touche |
|
Khalid Majid Husain
Rahman |
|
| Tohmatsu |
|
Chartered Accountants |
|
| International |
|
Karachi 25 SEP 1998 |
|
|
|
|
| Balance
Sheet As At June 30th 1998 |
|
|
|
|
1998 |
1997 |
|
|
|
Note |
Rupees |
Rupees |
|
|
|
|
|
| SHARE
CAPITAL AND RESERVES |
|
|
|
|
|
|
| Authorised
Capital |
|
|
|
| 30,000,000
ordinary shares of Rs. 10/- each |
|
300,000,000 |
300,000,000 |
|
|
|
========== |
========== |
|
|
| Issued,
subscribed and paid-up capital |
|
|
|
| 15,000,000
ordinary Shares of Rs. 10/- each |
|
|
|
| fully
paid in cash |
|
|
150,000,000 |
150,000,000 |
|
|
|
|
|
| Reserves |
|
|
3 |
145,396,852 |
105,204,041 |
|
|
|
|
--------------- |
--------------- |
|
|
|
|
|
295,396,852 |
255,204,041 |
|
|
| ALLOWANCE FOR POTENTIAL |
|
|
|
|
| LEASE
LOSSES |
|
2.10 |
8,421,509 |
844,236 |
|
|
|
|
|
|
|
|
| LONG-TERM
FINANCES |
|
4 |
246,303,680 |
254,447,627 |
|
|
|
|
|
|
|
|
| LIABILITIES
AGAINST ASSETS SUBJECT |
|
|
|
|
| TO
FINANCE LEASES |
|
5 |
813,213 |
88,850 |
|
|
|
|
|
|
|
|
| LONG-TERM
DEPOSITS |
|
6 |
54,430,049 |
47,676,392 |
|
|
|
|
|
|
|
| CURRENT
LIABILITIES |
|
|
|
|
|
|
|
--------------- |
--------------- |
|
|
| Current
maturity of long-term liabilities |
7 |
88,691,504 |
61,038,525 |
|
|
| Certificates
of investment |
|
8 |
50,000,000 |
10,000,000 |
|
|
| Short-term
finances |
|
9 |
63,537,633 |
22,929,237 |
|
|
| Creditors,
accrued and other liabilities |
|
10 |
27,897,260 |
36,679,210 |
|
|
| Proposed
dividend |
|
|
-- |
22,500,000 |
|
|
|
|
|
--------------- |
--------------- |
|
|
|
|
230,126,397 |
153,146,972 |
|
|
| COMMITMENTS |
|
11 |
--------------- |
--------------- |
|
|
|
|
835,491,700 |
711,408,118 |
|
|
|
|
|
========== |
========== |
|
|
|
| TANGIBLE
FIXED ASSETS |
|
12 |
14,664,836 |
16,487,600 |
|
|
|
|
|
|
|
|
| NET
INVESTMENT IN LEASES |
|
14 |
410,501,510 |
346,069,343 |
|
|
|
|
|
|
|
|
| LONG-TERM
INVESTMENTS |
|
15 |
4,125,000 |
4,125,000 |
|
|
|
|
|
|
|
|
| LONG-TERM
DEPOSITS AND DEFERRED COSTS |
16 |
18,711,558 |
23,418,217 |
|
|
|
|
|
|
|
|
| LONG-TERM
LOAN |
|
17 |
-- |
1,699,990 |
|
|
|
|
|
|
|
| CURRENT
ASSETS |
|
|
|
|
|
|
|
--------------- |
--------------- |
|
|
| Current
maturity/of net investment in leases |
14 |
223,425,370 |
165,758,773 |
|
|
| Short-term
investments |
|
18 |
29,315,413 |
55,435,000 |
|
|
| Advances,
deposits, prepayments and |
|
|
|
|
|
| other
receivables |
|
19 |
23,121,491 |
25,094,955 |
|
|
| Cash
and bank balances |
|
20 |
111,626,522 |
73,319,240 |
|
|
|
|
|
--------------- |
--------------- |
|
|
|
|
|
387,488,796 |
319,607,968 |
|
|
|
|
--------------- |
--------------- |
|
|
|
|
835,491,700 |
711,408,118 |
|
|
|
========== |
========== |
|
|
| The
annexed notes form an integral part of these financial statements. |
|
|
|
|
|
|
|
|
|
|
|
|
| Profit
And Loss Account For The Year Ended June 30, 1998 |
|
|
|
|
1998 |
1997 |
|
|
Note |
Rupees |
Rupees |
|
|
| Income
from lease operations |
|
|
106,041,312 |
89,380,983 |
|
| Other income |
|
21 |
10,940,384 |
7,981,890 |
|
|
|
|
--------------- |
--------------- |
|
|
|
|
116,981,696 |
97,362,873 |
|
|
|
|
--------------- |
--------------- |
|
| Administrative
and operating expenses |
22 |
13,391,752 |
10,973,688 |
|
| Financial
charges |
|
23 |
53,969,150 |
47,984,514 |
|
| Allowance
for potential lease losses |
|
|
7,577,273 |
473,187 |
|
| Other charges |
|
24 |
583,641 |
491,105 |
|
|
|
|
--------------- |
--------------- |
|
|
|
|
75,521,816 |
59,922,494 |
|
|
|
--------------- |
--------------- |
|
| Operating
profit |
|
|
41,459,880 |
37,440,379 |
|
|
|
|
|
| Taxation |
|
26 |
1,267,069 |
1,032,323 |
|
|
|
|
--------------- |
--------------- |
|
| Profit
after taxation |
|
|
40,192,811 |
36,408,056 |
|
|
|
|
| Unappropriated
profit brought forward |
|
19,924,727 |
15,945,174 |
|
|
|
|
--------------- |
--------------- |
|
|
|
|
60,117,538 |
52,353,230 |
|
| Appropriations: |
|
|
|
|
|
|
| Transfer to: |
|
|
|
|
| -
reserve under NBFI regulations |
|
|
8,038,562 |
7,281,611 |
|
| -
reserve for doubtful debts |
|
|
-- |
2,646,892 |
|
| -
general reserve |
|
|
51,961,438 |
|
|
| Transfer
to proposed dividend @ 15% |
|
-- |
-- |
|
|
|
--------------- |
--------------- |
|
|
|
|
60,000,000 |
32,428,503 |
|
|
|
|
--------------- |
--------------- |
|
| Unappropriated
profit carried forward |
|
117,538 |
19,924,727 |
|
|
|
|
========== |
========== |
|
|
|
|
|
| The
annexed notes form an integral part of these financial statements. |
|
|
|
| Statement
Of Changes In Financial Position (Cash Flow Statement) |
|
| For
The Year Ended June 30, 1998 |
|
|
|
|
|
1998 |
1997 |
|
|
|
|
|
Rupees |
Rupees |
|
|
| Cash
flows from operating activities |
|
|
|
|
|
|
| Operating
profit before taxation |
|
41,459,880 |
37,440,379 |
|
|
|
|
|
|
|
| Adjustments
for: |
|
|
|
|
| Deferred
costs amortized |
|
488,750 |
491,305 |
|
|
| Depreciation |
|
2,617,883 |
2,077.11 |
|
|
| Provision
for doubtful debts |
|
7,577,273 |
473,187 |
|
|
| Loss/(gain)
on disposal of fixed assets |
|
48,322 |
(200) |
|
|
|
|
--------------- |
--------------- |
|
|
| Operating
profit before working capital changes |
|
52,192,108 |
40,481,785 |
|
|
|
|
|
| (Decrease)/increase
in creditors, accrued and other liabilities |
(8,786,668) |
23,190,059 |
|
|
| Decrease/(increase)
in advances, deposits, prepayments |
|
|
|
| and
other receivables |
|
2,605,996 |
(11,100, 213) |
|
|
|
|
--------------- |
--------------- |
|
|
| Cash
flows from operations |
|
46,011,436 |
52,571,631 |
|
|
| Income
taxes (paid)/recovered |
|
(2,699,605) |
449,806 |
|
|
|
|
--------------- |
--------------- |
|
|
| Net
cash flows from operating activities |
|
43,311,831 |
53,021,437 |
|
|
| Cash
flows from investing activities |
|
|
|
|
--------------- |
--------------- |
|
|
| Increase
in net investment in leases |
|
|
(122,098,764) |
(128,681,023) |
|
|
| Purchase
of fixed assets |
|
(1,818,167) |
(1,262,760) |
|
|
| Proceeds
from sale of fixed assets |
|
974,726 |
353,168 |
|
|
| Long-term
investments |
|
|
-- |
(4,125,000) |
|
|
| Long-term
loan -net |
|
2,499,994 |
(1,799,996) |
|
|
| Decrease/(increase)
in long term deposits and deferred cost |
4,217,909 |
(6,847,086) |
|
|
|
|
--------------- |
--------------- |
|
|
| Net
cash used in investing activities |
|
(116,224,302) |
(142,362,697) |
|
|
|
|
|
| Cash
flows from financing activities |
|
|
|
|
--------------- |
--------------- |
|
|
| Increase
in long-term finances |
|
4,946,208 |
145,417,494 |
|
|
| Increase
in long-term deposits from customers |
|
21,336,806 |
12,682,157 |
|
|
| Proceeds
from certificates of Investment |
|
40,000,000 |
10,000,000 |
|
|
| Increase
in shod-term finances |
|
40,608,396 |
19,229,143 |
|
|
| Increase/(decrease)
in lease obligations |
|
704,038 |
(539,662) |
|
|
| Payment
of dividend |
|
(22,495,282) |
(22,429,638) |
|
|
|
|
--------------- |
--------------- |
|
|
| Net
cash flows from financing activities |
|
85,100,166 |
164,359,494 |
|
|
|
--------------- |
--------------- |
|
|
| Net
increase in cash and cash equivalents |
|
12,187,695 |
75,018,234 |
|
|
| Cash
and cash equivalents at beginning of the year |
|
128,754,240 |
53,736,006 |
|
|
|
|
--------------- |
--------------- |
|
|
| Cash
and cash equivalents at the end of the year (Note A) |
140,941,935 |
128,754,240 |
|
|
|
|
========== |
========== |
|
|
|
|
|
|
|
| Note
A. Cash and cash equivalents at the end of the year |
|
|
|
| Cash
and bank balances |
|
111,626,522 |
73,319,240 |
|
|
| Short-term
Investments |
|
29,315,413 |
55,435,000 |
|
|
|
--------------- |
--------------- |
|
|
|
|
140,941,935 |
128,754 |
|
|
|
========== |
========== |
|
|
|
|
|
|
|
| Notes
To The Financial Statements |
|
| For
The Year Ended June 30, 1998 |
|
|
| 1.
LEGAL STATUS AND NATURE OF BUSINESS |
|
| The
company was incorporated in Pakistan as a public limited company on April 7,
1987. |
|
| The
company commenced commercial operations in August 1989, and is listed |
|
| on
all Stock Exchanges in Pakistan. Its prime business is leasing, and it is
classified as |
|
| a
Non-Banking Financial Institution (NBFI) by the State Bank of Pakistan and is |
|
| regulated
by the Corporate Law Authority. |
|
|
| 2.
SIGNIFICANT ACCOUNTING POLICIES |
|
| 2.1
Accounting convention |
|
|
| These
financial statements have been prepared under the historical cost |
|
| convention. |
|
|
| 2.2
Fixed assets and depreciation |
|
| (a)
Owned assets |
|
|
| Fixed
assets are stated at cost less depreciation to date. Depreciation is |
|
| charged
to income by applying reducing balance method. Full year's |
|
| depreciation
is charged on acquisitions during the year while no |
|
| depreciation
is charged on fixed assets disposed off during the year. |
|
|
| However,
effective from current year, the assets given to employees as per |
|
| the
company policy are to be charged to income applying the straight line |
|
| method
whereby the cost of an asset is written off over four years. |
|
| Depreciation
on such additions is charged from the month in which the |
|
| asset
is put to use and on disposals in the month in which disposal is made. |
|
|
| As
a result of this change in accounting estimate, depreciation for the year |
|
| has
been increased by Rs. 528,673 and the profit for the year has been |
|
| decreased
by the same amount. |
|
|
| Normal
repairs and maintenance are charged to income as and when |
|
| incurred.
Major renewals and betterments are capitalized. |
|
|
| Gains
and losses on disposal of fixed assets, if any, are included in income |
|
| currently. |
|
|
| (b)
Assets subject to finance leases |
|
|
| These
are stated at the lower of present value of minimum lease payments |
|
| and
fair value of assets acquired on lease. Assets so acquired are |
|
| depreciated
over the shorter of the lease term or its useful life. Financial |
|
| charges
is allocated to accounting periods in a manner so as to produce |
|
| a
constant periodic rate of charge on the outstanding liability. |
|
|
| 2.3
Deferred costs and amortization |
|
| Deferred
costs are written off during a period not exceeding five years |
|
| commencing
from the year such costs are incurred. |
|
|
| 2.4
Investments |
|
| Long-term
investments |
|
| Long-term
investments are stated at cost and carrying amount is reduced to |
|
| recognize
the decline other than temporary in the value of investments. |
|
|
|
|
| Short-term
investments |
|
| Investments
are valued at the lower of cost and market value determined |
|
| on
an aggregate portfolio basis. |
|
|
| 2.5 Taxation |
|
| (a) Current |
|
| Provision
is made on taxable income at the prevailing rates of taxation after |
|
| taking
into account tax credits available, if any. |
|
|
| (b) Deferred |
|
| The
company accounts for deferred taxation on all major timing |
|
| differences
likely to reverse in the foreseeable future, using the liability |
|
| method. |
|
|
| 2.6
Foreign exchange transactions |
|
| Transactions
in foreign currencies are accounted for in Rupees at the rate of |
|
| exchange
ruling on the date of transaction. Assets and liabilities in foreign |
|
| currencies
are converted into Rupees at the rate of exchange at the |
|
| balance
sheet date. Net exchange differences arising due to hedging |
|
| mechanism
are accounted for as deferred revenue/costs as the case may |
|
| be
and are credited/amortized to income over the term of the underlying |
|
| transactions. |
|
|
| 2.7
Off-setting |
|
| A
financial asset and a financial liability is off-set and the net amount |
|
| reported
in the balance sheet if the Company has a legal enforceable right |
|
| to
set-off the transactions and also intents either to settle on a net basis or
to |
|
| realize
the asset and settle the liability simultaneously. Corresponding |
|
| income
on the asset and charge on the liability is also netted off. |
|
|
| 2.8
Employees' retirement benefits |
|
| The
company operates a contributory provident fund for all its confirmed |
|
| employees
and contributions are made by the company and the |
|
| employees
in accordance with the fund rules. |
|
|
| 2.9
Revenue recognition |
|
| The
company follows the financing method in accounting for recognition of |
|
| lease
income. At the time of the execution of a lease, a portion of unearned |
|
| lease
income which approximates the initial direct costs incurred in writing |
|
| the
leases, is taken to "Income from lease operations". The remainder
of the |
|
| unearned
lease income is then allocated over the lease term on a pattern |
|
| reflecting
a constant periodic return on the company's net investment |
|
| outstanding
in respect of the lease. Until last year, the total unearned lease |
|
| income
was being taking to income over the lease term. This change was |
|
| made
to match cost and revenue more accurately. Due to change in |
|
| pattern
of allocation, the profit for the year is increased by Rs. 7.443 million. |
|
|
| Front
end, commitment and other fees, if any, are taken to income when |
|
| realized. |
|
|
| 2.10
Allowance for potential lease losses |
|
| The
allowance for potential lease losses is maintained at a level which, in the |
|
| judgment
of the management, is sufficient to provide for any potential lease |
|
| losses.
The recognition of annual charge and income of such amount would |
|
| be
taken through the income statement. The allowance would be |
|
| increased
by the provision charged to income and would be decreased by |
|
| charge
off, net of recoveries. Until last year, allowance for potential lease |
|
| losses
was provided as per NBFI's regulations. Had there been no change in |
|
| the
company's policy for allowance for potential lease losses, the profit for |
|
| the
year would have been increased by Rs. 6.275 million. |
|
|
| 3.
RESERVES |
|
| Capital
reserves |
|
|
|
Premium on |
For issue of |
1998 |
1997 |
|
|
|
|
issuance of |
proposed |
Total |
Total |
|
|
|
|
right shares |
bonus shares |
|
|
|
|
|
Rupees |
Rupees |
Rupees |
Rupees |
|
|
|
|
|
| Balance
at the beginning of the year |
|
56,250,000 |
-- |
56,250,000 |
56,250,000 |
|
|
|
|
|
| Premium
on issue of right shares utilized |
|
|
|
| for
issue of 15% proposed bonus shares |
(22,500,000) |
22,500,000 |
-- |
-- |
|
|
|
-------------------------------------------------------------------------------- |
|
|
|
33,750,000 |
22,500,000 |
56,250,000 |
56,250,000 |
|
|
| Revenue
reserves |
|
================================================== |
|
|
|
|
|
|
|
General |
Under NBFI |
For doubtful |
|
|
|
|
regulations |
debts |
|
|
|
Rupees |
Rupees |
Rupees |
|
|
|
|
|
| Balance
at the beginning for the year |
-- |
18,792,752 |
10,236,562 |
|
29,029,314 |
19,100,811 |
|
| Transfer
from profit and loss account |
51,961,438 |
8,038,562 |
-- |
|
60,000,000 |
9,928,503 |
|
|
------------------------------------------------------------------------------------------------------ |
|
|
|
51,961,438 |
26,831,314 |
10,236,562 |
|
89,029,314 |
29,029,314 |
|
|
=================================== |
|
|
| Unappropriated
profit |
|
|
117,538 |
19,924,727 |
|
|
|
|
--------------- |
--------------- |
|
|
|
|
89,146,852 |
48,954,041 |
|
|
|
|
--------------- |
--------------- |
|
|
|
Total |
145,396,852 |
105,204,041 |
|
|
|
========== |
========== |
|
|
|
| As
a prudent business practice, in addition to allowance for potential lease
losses, an amount has been set aside out of |
|
| profits
to meet future business losses, if any. |
|
|
|
| 4.
LONG-TERM FINANCES-Secured |
|
|
|
|
1998 |
1997 |
|
|
|
|
Rupees |
Rupees |
|
|
|
|
|
| Foreign
currency |
|
|
|
| From
Commonwealth Development |
|
|
|
| Corporation
U.K (Note 4.1) |
|
|
290,937,750 |
310,991,542 |
|
|
|
|
|
| Local
currency |
|
|
|
| From
an investment company (Note 4.2) |
|
25,000,000 |
-- |
|
|
|
--------------- |
--------------- |
|
|
|
|
|
315,937,750 |
310,991,542 |
|
|
| Less:
Current maturity of long-term finances (Note 7) |
|
69,634,070 |
56,543,915 |
|
|
|
|
|
--------------- |
--------------- |
|
|
|
|
|
246,303,680 |
254,447,627 |
|
|
|
========== |
========== |
|
|
|
| 4.1
This represents Pounds Sterling 5 million loan obtained from Commonwealth |
|
| Development
Corporation, UK. The loan is repayable in twelve equal semi- |
|
| annual
installments commenced from May 1997. The rate of interest is 11.5% |
|
| per
annum and is secured by floating pari-passu charge, through hypothecation, |
|
| over
certain present assets and first floating charge over certain present and all |
|
| future
assets of the company. |
|
|
| 4.2
This represents Rs. 25 million loan under mark-up arrangement. The loan is |
|
| repayable
in 12 equal quarterly installments commencing from October 199& |
|
| The
loan carries mark-up at the rate of Re. 0.53 per Rs. 1,000 per day and is |
|
| secured
by joint pari-passu charge over all present and future assets of the company |
|
|
| 5.
LIABILITIES AGAINST ASSETS SUBJECT TO FINANCE LEASES |
|
|
|
|
|
|
1998 |
1997 |
|
|
|
|
Rupees |
Rupees |
|
|
|
|
|
| Minimum
lease payments (Note 5.1) |
|
1,411,822 |
448,819 |
|
|
| Less:
Finance charges not yet due |
|
294,371 |
35,406 |
|
|
|
|
--------------- |
--------------- |
|
|
|
|
1,117,451 |
413,413 |
|
|
| Less:
Current. maturity of liabilities against |
|
|
|
|
| assets
subject to finance leases (Note 7) |
|
304,238 |
324,563 |
|
|
|
|
--------------- |
--------------- |
|
|
|
|
813,213 |
88,850 |
|
|
|
========== |
========== |
|
|
|
|
| 5.1
The company has entered into lease agreements with leasing companies for |
|
| financing
to acquire motor vehicles and office equipment. Payments under these |
|
| agreements
include finance charges ranging from 19.17% to 20.75% per annum, |
|
| which
are used as discounting factors. The future payments due are as follows: |
|
|
| Year ending |
|
|
1998 |
1997 |
|
|
|
|
|
Rupees |
Rupees |
|
|
|
|
|
| June 30, 1998 |
|
|
-- |
358,969 |
|
|
| June 30, 1999 |
|
|
532,402 |
89,850 |
|
|
| June 30, 2000 |
|
|
447,408 |
-- |
|
|
| June 30, 2001 |
|
|
360,858 |
-- |
|
|
| June 30, 2002 |
|
|
71,154 |
-- |
|
|
|
--------------- |
--------------- |
|
|
|
|
1,411,822 |
448,819 |
|
|
|
|
========== |
========== |
|
|
| 6.
LONG-TERM DEPOSITS |
|
|
|
| Security
deposits on leases (Note 6.1) |
|
73,183,245 |
51,846,439 |
|
|
| Less:
Current maturity of long-term |
|
|
|
|
| deposits
(Note 7) |
|
18,753,196 |
4,170,047 |
|
|
|
|
--------------- |
--------------- |
|
|
|
|
54,430,049 |
47,676,392 |
|
|
|
========== |
========== |
|
|
|
| 6.1
These represent interest free security deposits received against lease
contracts |
|
| and
are repayable/adjustable at the expiry/termination of the respective leases. |
|
|
| 7.
CURRENT MATURITY OF LONG-TERM LIABILITIES |
|
|
|
|
1998 |
1997 |
|
|
|
|
Rupees |
Rupees |
|
|
|
|
|
| Long-term
finances (Note 4) |
|
69,634,070 |
56,543,915 |
|
|
| Liabilities
against assets subject to finance |
|
|
|
|
| leases (Note 5) |
|
304,238 |
324,563 |
|
|
| Security
deposits on leases (Note 6) |
|
18,753,196 |
4,170,047 |
|
|
|
|
--------------- |
--------------- |
|
|
|
|
88,691,504 |
61,038,525 |
|
|
|
|
========== |
========== |
|
|
|
| 8.
CERTIFICATES OF INVESTMENT |
|
|
| The
company has a scheme of registered Certificates of Investment (COIs) for |
|
| resource
mobilization as per permission from Corporate Law Authority, |
|
| Government
of Pakistan. The term of these (COIs) ranges from three months to six |
|
| months
and expected return is paid on a profit and loss sharing basis. |
|
|
|
| 9.
SHORT-TERM FINANCE |
|
|
|
|
1998 |
1997 |
|
|
|
|
Rupees |
Rupees |
|
| Secured |
|
|
| Running
finance from commercial banks (Note 9.1) |
|
28,537,633 |
2,929,237 |
|
| Pro-note
discounting facility from a |
|
|
| financial
institution (Note 9.2) |
|
|
25,000,000 |
-- |
|
|
|
|
|
--------------- |
--------------- |
|
|
|
|
|
53,537,633 |
2,929,237 |
|
| Unsecured |
|
|
--------------- |
--------------- |
|
| From
an investment bank |
|
-- |
20,000,000 |
|
| Others |
|
|
10,000,000 |
-- |
|
|
|
--------------- |
--------------- |
|
|
|
|
10,000,000 |
20,000,000 |
|
|
|
|
--------------- |
--------------- |
|
|
|
|
63,537,633 |
22,929,237 |
|
|
========== |
========== |
|
|
|
|
| 9.1
This represents finance facility sanctioned aggregating upto Rs. 50 million |
|
| (1997:
Rs. 10 million) on yearly renewal basis at a mark-up rate ranges between |
|
| Re.
0.37 to Re. 0.49 (1997: Re. 0.46) per Rs. 1,000 per day. Out of these loans, |
|
| sanctioned
amount of Rs. 20 million secured by way of deposit of Federal |
|
| Investment
Bonds of Rs. 10 million included in note 18 and hypothecation of |
|
| lease
rental receivables, whereas the remaining sanctioned amount is secured |
|
| by
way of joint pari-passu charge on all present and future assets of the
company. |
|
|
| 9.2
This represents a finance facility carrying mark-up at the rate of Re. 0.50
per |
|
| Rs.
1,000 per day and is secured by second charge over all present and future |
|
| assets
of the company. |
|
|
| 10.
CREDITORS, ACCRUED AND |
|
| OTHER
LIABILITIES |
|
|
|
|
1998 |
1997 |
|
|
|
Rupees |
Rupees |
|
|
| Advance
lease rentals |
|
|
3,939,080 |
1,044,721 |
|
| Accrued
liabilities |
|
|
1,663,866 |
1,465,210 |
|
| Mark-up
payable on secured finances |
|
19,273,793 |
32,116,934 |
|
| Mark-up
payable on un-secured finances |
|
200,344 |
963,232 |
|
| Excise duty |
|
|
265,828 |
203,947 |
|
| Unclaimed
dividend |
|
|
75,080 |
70,362 |
|
| Other liabilities |
|
|
2,479,269 |
814,804 |
|
|
|
|
--------------- |
--------------- |
|
|
|
|
27,897,260 |
36,679,210 |
|
|
========== |
========== |
|
| 11.
COMMITMENTS |
|
|
| Lease
proposals approved Rs. 30.021 million (1997: Rs. 31 million). |
|
|
|
| 12.
Tangible Fixed Assets - At cost less accumulated depreciation |
|
|
|
|
|
------------------------------------------------------------------------------------------------------------------------------------------------------------------ |
|
|
|
Cost |
|
Depreciation |
Written |
|
|
|
------------------------------------------------------------------------------------------------------------------- |
down |
|
Depreciation |
|
|
As on |
Inter transfer |
Additions/ |
As at |
For the |
As at |
value |
|
rate % |
|
|
July 1, |
owned/leased |
(deletions) |
June 30, |
year |
June 30, |
as at |
|
per annum |
|
|
1997 |
assets |
1998 |
1998 |
|
1998 |
June 30, |
|
|
|
|
|
|
|
|
|
|
1998 |
|
|
|
|
------------------------------------------------------------------------------------------------------------------------------------------------------------------ |
|
|
Rupees |
|
|
|
|
------------------------------------------------------------------------------------------------------------------------------------------------------------------ |
|
| Owned |
|
|
|
| Office
premises |
12,096,011 |
-- |
67,435 |
12,163,446 |
540,826 |
1,887,752 |
10,275,694 |
|
5 |
|
|
|
|
|
|
|
|
|
| Furniture
and fixture |
1,225,528 |
-- |
273,100 |
1,239,628 |
268,702 |
516,766 |
722,862 |
|
15 & 25 |
|
|
|
|
(259,000) |
|
|
|
|
|
|
|
|
| Motor vehicles |
|
3,628,900 |
411,800 |
3,985 |
2,767,585 |
686,593 |
2,064,741 |
702,844 |
|
20 & 25 |
|
|
|
|
(1,277,100) |
|
|
|
|
|
|
|
|
|
|
| Office
equipment |
2,966,014 |
550,000 |
54,600 |
3,533,119 |
309,876 |
1,777,152 |
1,755,967 |
|
15 |
|
|
|
|
(37,495) |
|
|
|
|
|
|
|
|
|
|
| Computer
software |
336,750 |
-- |
236,750 |
573,500 |
74,451 |
151,613 |
421,887 |
|
15 |
|
|
|
---------------------------------------------------------------------------------------------------------------------------------------------- |
|
|
|
|
20,253,203 |
961,800 |
635,870 |
20,277,278 |
1,880,448 |
6,398,024 |
13,879,254 |
|
|
|
|
|
(1,573,595) |
|
|
|
|
|
---------------------------------------------------------------------------------------------------------------------------------------------- |
|
|
| Leased |
|
|
|
|
| Motor vehicles |
|
411,800 |
-- |
544,000 |
544,000 |
305,789 |
159,084 |
384,916 |
|
25 & 33.33 |
|
|
|
|
(411,800) |
|
|
|
|
|
|
|
|
| Office
equipment |
550,000 |
-- |
601,000 |
601,000 |
431,646 |
200,334 |
400,666 |
|
33.33 |
|
|
|
|
(550,000) |
|
|
|
|
|
---------------------------------------------------------------------------------------------------------------------------------------------- |
|
|
|
|
961,800 |
-- |
1,145,000 |
1,145,000 |
737,435 |
359,418 |
785,582 |
|
|
|
|
(961,800) |
|
|
|
|
|
---------------------------------------------------------------------------------------------------------------------------------------------- |
|
|
| 1998 |
|
21,215,003 |
-- |
1,780,870 |
21,422,278 |
2,617,883 |
6,757,442 |
14,664,836 |
|
|
|
|
|
(1,573,595) |
|
|
|
|
|
|
======================================================================================== |
|
|
| 1997 |
|
20,547,743 |
-- |
1,262,760 |
21,215,003 |
2,077,114 |
4,727,403 |
16,487,600 |
|
|
|
|
|
(595,500) |
|
|
|
|
|
======================================================================================== |
|
|
|
| 13.
DISPOSAL OF OPERATING ASSETS |
|
|
|
|
| Particulars |
|
Cost |
Accumulated |
Written |
Sale |
Mode of |
Buyer |
|
|
|
depreciation |
down |
proceeds |
disposal |
|
|
|
value |
|
|
|
|
|
| Rupees |
|
|
|
|
|
| Furniture
and fixture |
|
|
| Furniture |
|
250,000 |
69,375 |
180,625 |
84,006 |
Company policy |
Mr. Abdul Jabbar Kasim |
|
|
|
|
|
Former Chief Executive,
Karachi |
|
|
|
|
|
|
| Furniture |
|
9,000 |
1,350 |
7,650 |
9,000 |
Negotiation |
Mr. Muhammed Nisar,
Karachi |
|
|
|
|
| Motor
vehicles |
|
|
| Honda Civic |
|
748,000 |
269,280 |
478,720 |
478,720 |
Company policy |
Mr. Abdul Jabbar Kasim |
|
|
|
|
|
Former Chief Executive,
Karachi |
|
|
|
|
|
|
| Toyota Corolla |
|
529,100 |
189,516 |
339,584 |
400,000 |
Negotiation |
Leased out to CBM
Plastic, |
|
|
|
|
|
Karachi |
|
|
|
|
|
|
| Office
equipment |
|
|
|
|
| Mobile
telephone |
|
25,000 |
8,531 |
16,469 |
3,000 |
Negotiation |
Mr. Zia-uI-Hasan, Karachi |
|
|
|
| 14.
NET INVESTMENT IN LEASES |
|
|
|
|
|
1998 |
1997 |
|
|
|
|
Rupees |
Rupees |
|
|
|
|
|
| Minimum
lease rentals receivable |
|
745,995,449 |
603,824,422 |
|
|
| Add:
Residual value |
|
52,427,150 |
53,006,290 |
|
|
|
|
--------------- |
--------------- |
|
|
|
|
798,422,599 |
656,830,712 |
|
|
| Less:
Unearned finance income |
|
164,495,719 |
145,002,596 |
|
|
|
|
--------------- |
--------------- |
|
|
| Net
investment in leases |
|
633,926.88 |
511,828,116 |
|
|
| Less:
Current maturity of net investment |
|
|
|
|
| in leases |
|
223,425,370 |
165,758,773 |
|
|
|
|
--------------- |
--------------- |
|
|
|
|
410,501,510 |
346,069,343 |
|
|
|
========== |
========== |
|
|
| 15.
LONG-TERM INVESTMENTS |
|
|
|
|
|
|
| These
represent investments in 312,500 and 100,000 ordinary shares of Rs. 10 each
of |
|
| International
Housing Finance Ltd. and Trust Investment Bank Ltd. both are associated |
|
| undertakings. |
|
|
|
|
|
|
| 16.
LONG-TERM DEPOSITS AND DEFERRED COSTS |
|
|
|
|
1998 |
1997 |
|
|
|
|
Rupees |
Rupees |
|
|
|
|
|
| Long-term
deposits |
|
486,035 |
106,130 |
|
|
| Deferred
costs (Note 16.1) |
|
18,225,523 |
23,312,087 |
|
|
|
|
--------------- |
--------------- |
|
|
|
|
18,711,558 |
23,418,217 |
|
|
|
========== |
========== |
|
|
| 16.1
Deferred Costs |
|
|
|
Opening |
Additions |
Closing |
Amortization |
Accumulated |
Unamortized |
|
|
balance |
|
balance |
during 1998 |
amortization |
balance |
|
|
|
Rupees |
|
|
| Fund
utilization |
|
26,989,065 |
-- |
26,989,065 |
5,397,813 |
10,019,097 |
16,969,968 |
|
|
|
|
| Others |
|
3,741,879 |
800,000 |
4,541,879 |
488,750 |
3,286,324 |
1,255,555 |
|
|
|
-------------------------------------------------------------------------------------------------------------------------- |
|
| 1998 |
|
30,730,944 |
800,000 |
31,530,944 |
5,886,563 |
13,305,421 |
18,225,523 |
|
|
|
============================================================================ |
|
| 1997 |
|
20,276,206 |
10,454,739 |
30,730,945 |
4,064,758 |
7,418,858 |
23,312,087 |
|
|
============================================================================ |
|
|
| 16.2
Fund utilization represents expenses incidental to foreign currency finance. |
|
|
|
1998 |
1997 |
|
|
|
Rupees |
Rupees |
|
| 17.
LONG-TERM LOAN (un-secured) |
|
| Considered
good |
|
|
|
|
| Loan
to Chief Executive |
|
-- |
2,499,994 |
|
|
| Less:
Current maturity of long-term |
|
|
|
|
| loan (Note19) |
|
-- |
800,004 |
|
|
|
|
--------------- |
--------------- |
|
|
|
|
-- |
1,699,990 |
|
|
|
|
========= |
========= |
|
|
| Outstanding
for periods exceeding three years |
|
-- |
-- |
|
|
| Others |
|
-- |
2,499,994 |
|
|
|
| Maximum
aggregate amount due from Chief Executive at the end of any month |
|
| during
the period was Rs. 2.499 million (1997: Rs. 2.533 million). |
|
|
|
|
| 18.
SHORT TERM INVESTMENTS |
|
|
|
|
1998 |
1997 |
|
|
|
|
Rupees |
Rupees |
|
|
|
|
|
| Certificates
of Investment |
|
-- |
31,000,000 |
|
|
| Federal
Investment Bonds (Note 18.1) |
|
20,925,000 |
24,435,000 |
|
|
| Term
Finance Certificates (Note 18.2) |
|
8,390,413 |
-- |
|
|
|
|
--------------- |
--------------- |
|
|
|
|
29,315,413 |
55,435, 000 |
|
|
|
|
========= |
========= |
|
|
|
| 18.1
This includes investments as per NBFI regulations, issued by the State Bank
of Pakistan. |
|
|
| 18.2
Term Finance Certificates (TFCs) |
|
|
|
|
1998 |
1997 |
|
|
|
|
Rupees |
Rupees |
|
|
| Packages
Limited |
|
|
|
| 10
Certificates of face value Rs. 5,000 each and |
|
|
|
| 12
Certificates of face value Rs. 100,000 each |
|
861,097 |
-- |
|
|
| Nishat-Tek
Limited |
|
|
|
|
| 75
Certificates of face value Rs. 100,000 each |
|
7,529,316 |
-- |
|
|
|
|
--------------- |
--------------- |
|
|
|
|
8,390,413 |
-- |
|
|
|
|
========= |
========= |
|
|
|
| The
amount of TFCs represents redeemed value till year end and carry expected |
|
| profit
ranging from Re. 0.49 to Re. 0.50 per Rs. 1,000 per day and is redeemable in |
|
| semi
annual installments. |
|
|
|
| 19.
ADVANCES, DEPOSITS, PREPAYMENTS AND |
|
| OTHER
RECEIVABLES |
|
|
|
|
1998 |
1997 |
|
|
|
|
Rupees |
Rupees |
|
|
|
|
|
| Current
maturity of long-term loan (Note 17) |
|
-- |
800,004 |
|
|
| Advances
- Considered good |
|
|
|
|
| -
to staff (Note 19.1) ' |
|
126,756 |
181,345 |
|
|
| -
against expenses |
|
2,500 |
17,947 |
|
|
| - against leases |
|
1,971,578 |
552,998 |
|
|
| - others |
|
9,250 |
9,250 |
|
|
| Taxation |
|
|
1,533,250 |
100,714 |
|
|
| Prepayments |
|
|
569,682 |
555,446 |
|
|
| Mark-up
due on certificates/securities |
|
18,089,132 |
21,896,877 |
|
|
| Other
receivables |
|
819,343 |
980,374 |
|
|
|
|
--------------- |
--------------- |
|
|
|
|
23,121,491 |
25,094,955 |
|
|
|
|
========= |
========= |
|
|
|
| 19.1
Aggregate amount due by the executives Rs. 0.071 million (1997: Rs. 0.144
million). |
|
| Maximum
amount due from executives at the end of any month during the year |
|
| aggregated
to Rs. 0.229 million (1997: Rs. 0.205 million). |
|
|
| 20.
CASH AND BANK BALANCES |
|
|
|
|
1998 |
1997 |
|
|
|
|
Rupees |
Rupees |
|
|
|
|
|
| Cash in hand |
|
|
10,286 |
4,014 |
|
|
| Cash
with banks on |
|
|
|
|
| -
current accounts (Note 20.1 ) |
|
484,414 |
265,426 |
|
|
| -
deposit accounts (Note 20.2) |
|
110,905,696 |
72,993,962 |
|
|
| -
collection accounts |
|
538 |
538 |
|
|
| -
foreign currency deposits |
|
225,588 |
55,300 |
|
|
|
|
--------------- |
--------------- |
|
|
|
|
111,626,522 |
73,319,240 |
|
|
|
|
========= |
========= |
|
|
|
|
|
| 20.1
This includes Rs. 0.040 million (1997: Rs. 0.040 million) in current account |
|
| maintained
with State Bank of Pakistan under NBFI regulations. |
|
|
|
|
|
|
|
|
1998 |
1997 |
|
|
|
|
|
Rupees |
Rupees |
|
|
| 20.2
Deposit accounts: |
|
|
|
|
|
|
| --
Foreign currency deposits |
|
349,850,841 |
319,445,457 |
|
|
|
|
--------------- |
--------------- |
|
|
| --
Less: Credit facility availed (Note 20.3) |
|
240,845,145 |
246,453,900 |
|
|
| Credit
facility availed (Note 20.4) |
|
33,037,500 |
-- |
|
|
|
|
--------------- |
--------------- |
|
|
|
|
273,882,645 |
246,453,900 |
|
|
|
|
--------------- |
--------------- |
|
|
|
|
75,968,196 |
72,991,557 |
|
|
| --
Add: Local currency deposits |
|
34,937,500 |
2,405 |
|
|
|
|
--------------- |
--------------- |
|
|
|
|
110,905,696 |
72,993,962 |
|
|
|
========= |
========= |
|
|
|
|
|
|
|
| 20.3
The total sanctioned amount from a commercial bank and an investment company |
|
| under
mark-up arrangements amounted to Rs. 337 million (1997: Rs. 308 million). |
|
| These
loans carry mark-up ranging from Re. 0.35 to Re. 0.39 (1997: Re. 0.33 to |
|
| Re.
0.38) per Rs. 1,000 per day. The commercial bank borrowing is repayable in |
|
| twelve
semi-annual equal installments upto November 2002, whereas |
|
| investment
company borrowing is repayable in twelve equal semi-annual |
|
| installments
upto November 2002. The commercial bank and investment |
|
| company
borrowing is secured against foreign currency deposits mentioned above. |
|
|
| 20.4
This represents finance facility from a commercial bank sanctioned upto Rs. |
|
| 33.038
million on a yearly renewal basis. The loan carries mark-up at the rate of |
|
| Re.
0.38 per Rs. 1,000 per day and is secured against foreign currency deposits |
|
| and
joint pari-passu charge over all present and future assets of the company. |
|
|
| 21.
OTHER INCOME |
|
|
|
1998 |
1997 |
|
|
|
|
Rupees |
Rupees |
|
|
|
|
|
| Profit/return
earned |
|
|
10,829,371 |
7,811,302 |
|
|
| Miscellaneous |
|
|
111,013 |
170,588 |
|
|
|
|
--------------- |
--------------- |
|
|
|
|
10,940,384 |
7,981,890 |
|
|
|
========== |
========== |
|
|
|
| 22.
ADMINISTRATIVE AND OPERATING EXPENSES |
|
|
|
|
|
1998 |
1997 |
|
|
|
|
|
|
Rupees |
Rupees |
|
|
| Salaries
and allowances including |
|
|
|
| Directors
remuneration (Note 25) |
|
6,452,765 |
5,433,270 |
|
|
| Staff
training expenses |
|
|
14,800 |
62,411 |
|
|
| Rent,
rates and taxes |
|
|
105,412 |
104,230 |
|
|
| Travelling
and conveyance |
|
|
505,079 |
495,598 |
|
|
| Vehicle
running expenses |
|
|
474,549 |
409,065 |
|
|
| Utilities |
|
|
|
290,860 |
181,052 |
|
|
| Telephone
and Fax |
|
|
304,196 |
229,798 |
|
|
| Insurance |
|
|
|
480,793 |
619,119 |
|
|
| Fees,
subscriptions and periodicals |
|
|
241,612 |
279,945 |
|
|
| Printing
and stationery |
|
|
469,047 |
202,701 |
|
|
| Postage,
stamps and telegrams |
|
|
99,879 |
99,968 |
|
|
| Legal
and professional charges (Note 22.1) |
|
700,337 |
105,403 |
|
|
| Auditors'
remuneration (Note 22.2) |
|
|
126,100 |
117,861 |
|
|
| Repairs
and maintenance |
|
|
453,937 |
372,502 |
|
|
| Depreciation |
|
|
|
2,617,883 |
2,077,114 |
|
|
| Advertisement |
|
|
|
52,441 |
126,305 |
|
|
| Miscellaneous |
|
|
|
2,062 |
57,346 |
|
|
|
|
--------------- |
--------------- |
|
|
|
|
13,391,752 |
10,973,688 |
|
|
|
========== |
========== |
|
|
|
|
1998 |
1997 |
|
|
|
Rupees |
Rupees |
|
| 22.1
Legal and professional charges |
|
|
|
|
|
|
| Corporate
services |
|
380,335 |
35,000 |
|
|
| Legal service |
|
|
281,157 |
53,317 |
|
|
| Others |
|
|
38,845 |
17,086 |
|
|
|
|
--------------- |
--------------- |
|
|
|
|
700,337 |
105,403 |
|
|
|
========== |
========== |
|
|
| 22.2
Auditors' remuneration |
|
|
|
| Statutory
audit fee |
|
55,000 |
50,000 |
|
|
| Special
audit fee |
|
-- |
15,000 |
|
|
| Taxation
charges |
|
62,500 |
45,361 |
|
|
| Out-of-pocket
expenses |
|
8,600 |
7,500 |
|
|
|
|
--------------- |
--------------- |
|
|
|
|
126,100 |
117,861 |
|
|
|
========== |
========== |
|
|
| 23.
FINANCIAL CHARGES |
|
|
|
| Mark-up
on long-term finances |
|
47,408,428 |
44,530,722 |
|
|
| Mark-up
on short-term finances |
|
6,023,815 |
3,029,606 |
|
|
| Bank charges |
|
536,907 |
424,186 |
|
|
|
|
--------------- |
--------------- |
|
|
|
|
53,969,150 |
47,984,514 |
|
|
|
========== |
========== |
|
|
| 24.
OTHER CHARGES |
|
|
|
| Amortization
of deferred costs |
|
488,750 |
491,305 |
|
|
| Loss/(gain)
on sale of fixed assets |
|
48,322 |
(200) |
|
|
| Loss
on sale of investment |
|
46,569 |
-- |
|
|
|
|
--------------- |
--------------- |
|
|
|
|
583,641 |
491,105 |
|
|
|
========== |
========== |
|
|
|
|
|
| 25.
REMUNERATION OF CHIEF EXECUTIVE AND OTHER EXECUTIVES |
|
|
|
|
|
1998 |
|
|
1997 |
|
|
|
|
--------------------------------------------------- |
--------------------------------------------------- |
|
|
|
Chief |
Executive |
Total |
Chief |
Executive |
Total |
|
|
Executive |
|
Executive |
|
|
|
|
--------------------------------------------------- |
--------------------------------------------------- |
|
|
Rupees |
|
Rupees |
|
|
--------------------------------------------------- |
--------------------------------------------------- |
|
| Managerial |
|
| remuneration |
990,000 |
1,165,752 |
2,155,752 |
780,000 |
921,504 |
1,701,504 |
|
| Housing
and utility |
495,000 |
582,876 |
1,077,876 |
390,000 |
460,752 |
850,752 |
|
| Company's
contribution |
|
|
|
| to
provident fund |
99,000 |
116,575 |
215,575 |
78,000 |
92,150 |
170,150 |
|
| Leave
fare assistance |
178,875 |
263,875 |
442,750 |
-- |
60,480 |
60,480 |
|
|
|
-------------------------------------------------------------------------------------------------------------------------- |
|
| Total |
|
1,762,875 |
2,129,078 |
3,891,953 |
1,248,000 |
1,534,886 |
2,782,886 |
|
|
|
============================================================================ |
|
| Number
of Persons |
1 |
6 |
7 |
1 |
5 |
6 |
|
|
============================================================================ |
|
|
|
|
| The
Chief Executive, Chairman and Executives have been provided with free use |
|
| of
company cars. Directors were paid Rupees 9,000 (1997: Rupees 9,000) for |
|
| attending
board meetings during the year. |
|
|
| 26.
TAXATION |
|
|
|
|
1998 |
1997 |
|
|
|
|
Rupees |
Rupees |
|
|
|
|
|
| Current |
|
|
|
| For
the year (Note 26.1) |
|
|
1,267,069 |
988,440 |
|
|
| For prior years |
|
|
-- |
43,883 |
|
|
|
|
|
--------------- |
--------------- |
|
|
|
|
|
1,267,069 |
1,032,323 |
|
|
|
========== |
========== |
|
|
| Deferred |
|
| There
is no liability on account of deferred taxation as at June 30, 1998. |
|
|
| 26.1
This represents the provision for minimum tax under section 80D of the Income
Tax |
|
| Ordinance,
1979. |
|
|
| 27.
TRANSACTIONS WITH ASSOCIATED UNDERTAKINGS |
|
|
|
|
1998 |
1997 |
|
|
|
|
Rupees |
Rupees |
|
|
|
|
|
| Short-term
finance obtained |
|
|
15,000,000 |
10,000,000 |
|
|
| Lease
financing |
|
|
10,541,075 |
-- |
|
|
| Interest paid |
|
4,932 |
92,016 |
|
|
|
| 28.
CORRESPONDING FIGURES |
|
|
| Corresponding
figures have been re-arranged and re-grouped wherever |
|
| necessary
for the purpose of comparison. |
|
|
| JAVED
A. CALLEA |
|
|
AFTAB AHMED KHAN |
|
| Chief
Executive |
|
|
Chairman |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
