| First 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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| Auditors'
Report |
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| Balance
Sheet |
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| Profit
and Loss Account |
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| Cash
Flow Statement |
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| Notes
to the Accounts |
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| Pattern
of Shareholding |
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| Categories
of Shareholders |
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| COMPANY
INFORMATION |
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| BOARD
OF DIRECTORS |
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| Mr.
Khurshid Hadi |
|
Chairman/Chief Executive |
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| Mr.
Arshad Nawab |
|
Director |
|
| Mr.
Shoaib Qureshi |
|
Director |
|
| Mr.
Jahangir Siddiqui |
|
Director |
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| Mr.
Zaigham Mehmood Rizvi |
(Nominee - Pak Libya
Holding Company (Pvt) Ltd.) |
|
| Mr.
Ramadan A. Haggiagi |
|
(Nominee - Pak Libya
Holding Company (Pvt) Ltd.) |
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| Mr.
Naseem Beg |
|
(Nominee - National
Investment Trust) |
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| COMPANY
SECRETARY |
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| Mrs.
Hina Usmani |
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| REGISTERED
AND HEAD OFFICE |
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| 5lb
Floor, Block C, Finance & Trade Centre, |
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| Shahrah-e-Faisal,
Karachi-74400 |
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| Tc1:5661843-49
Fax:5685329 |
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| BRANCH
OFFICES |
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| 5th
Floor, Davis Hytes, Davis Road, Lahore |
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| 1st
Floor, State Life Building, Peshawar |
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| AUDITORS |
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| Ford,
Rhodes, Robson, Morrow |
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| Chartered
Accountants |
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| LEGAL
ADVISORS |
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| Orr
Dignam & Co. Advocates |
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| REGISTRAR
AND SHARE TRANSFER OFFICE |
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| THK
Associates (Pvt) Limited, |
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| Ground
Floor, Shaikh Sultan Trust Building No.2, |
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| Beaumont
Road, Karachi. |
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| Tei:5688808,
5685805 |
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| BANKERS |
|
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| *
Allied Bank of Pakistan Limited |
* Bank of America |
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| *
Credit Agricole Indosuez |
* Emirates Bank
International |
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| *
Habib Bank Limited |
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* Muslim Commercial Bank
Limited |
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| *
National Bank of Pakistan |
* Standard Chartered Bank |
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| *
The Bank of Khyber |
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* The Hong Kong and
Shanghai Banking Corporation Ltd. |
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| NOTICE
OF MEETING |
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| Notice
is hereby ,given that the Sixth Annual General Meeting of First Leasing
Corporation Limited will be held at |
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| FTC
Auditorium, Finance & Trade Centre, Shahrah-e-Faisal, Karachi on
Wednesday 23rd December, ! 998 at 9.00 a.m |
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| to
transact the following business: |
|
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| Ordinary
Business |
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| 1.
To confirm the minutes of the Fifth Annual General Meeting held on December
1, 1997. |
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|
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| 2.
To receive, consider and adopt the audited accounts with the Directors' and
Auditors' Report for the year ended |
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| June
30, 1998. |
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| 3.
To consider and approve cash dividend of 10% as recommended by the Board, as
final dividend for the year |
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| ended
June 30,1998. |
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| 4.
To appoint Auditors and fix their remuneration. The present Auditors, Messrs.
Ford, Rhodes, Robson, Morrow, |
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| Chartered
Accountants retire and being eligible have offered themselves for
reappointment. |
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| 5.
To elect 7 Directors of the company for a period of three years as fixed by
the Board of Directors under Section |
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| 178(1)
of the Companies Ordinance, 1984. The following retiring directors are
eligible for re-election. |
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|
| 1.
Mr. Khurshid Hadi |
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| 2.
Mr. Arshad Nawab |
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| 3.
Mr. Shoaib Qureshi |
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| 4.
Mr. Jehangir Siddiqui |
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| 5.
Mr. Zaigham M. Rizvi |
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Nominee - Pak Libya
Holding Co. (Pvt) Ltd. |
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| 6.
Mr. Ramadan Haggiagi |
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Nominee - Pak Libya
Holding Co. (Pvt) Ltd. |
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| 7.
Mr. Naseem Beg |
|
Nominee - National
Investment Trust |
|
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| 6.
Any other business with the permission of the Chair. |
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| Karachi:
November 26,1998 |
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By Order of the Board |
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|
Hina Usmani |
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|
Company Secretary |
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| Notes: |
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| 1.
The share transfer books of the company will remain closed from December 20,
1998 to December 30, 1998. |
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| (both
days inclusive). |
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| 2.
A member entitled to attend, speak and vote at the meeting is entitled to
appoint a proxy to attend, speak and |
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| vote
for him/her. |
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| 3.
An instrument of proxy and the power of Attorney or other authority (if any)
under which it is signed or a |
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| notarially
certified copy of such power of authority, in order to be valid, must be
deposited at the registered |
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| office
of the company not less than 48 hours before the time of the meeting. |
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| 4.
Members are requested to notify any change in their address immediately. |
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| DIRECTORS'
REPORT |
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| No
purpose is served by adding to the cacophony of voices imploring successive
governments for rational and consistent |
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| economic
management, nor to plead the relentless state of stag flation for the
difficulties facing corporate managers. |
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| Suffice
it to presume that our shareholders are familiar with the prevalent economic
environment and recognize that |
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| industry
and commerce survives and prospers within defined commercial circumstances
and under recognized rules of |
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| business.
Such circumstances have not been in evidence for a considerable period of
time. |
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|
| Your
company has over the past two and a half year limited its expansion 10r lack
of viable leasing opportunities and |
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| lack
of economically priced credits. Our investment in finance leases over the
past three fiscal years is as follows:- |
|
|
| 1996 |
|
Rs. 446 million |
|
| 1997 |
|
Rs. 241 million |
|
| 1998 |
|
Rs. 186 million |
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| Our
operations have been marred by persistent high finance cost as a consequence
of a generally high interest rate |
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| regime
and slow recovery rates as a consequence of a generally desultory economic
environment. |
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| STRATEGY |
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| Your
Board has for several years recognized the perils for a financial services
company in a relentless recession and |
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| the
limitations for the development of full payout financial leasing operations.
This company was established to meet |
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| the
leasing needs of the medium to large ticket industrial lessees but the
development of capital and secondary markets |
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| was
an integral element in the liberalization of the financial sector. This did
not happen and our ground breaking plans |
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| for
resource mobilization through TFC's, convertibles and other deposit
investments remain unimplemented. |
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| As
such our strategy has over the past years been to consolidate our existing
portfolio of financial leases, closely monitor |
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| recovery
of rentals and nurture growth very carefully both in terms of the quality of
client and tile type o1' asset. This |
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| has
resulted in a reduced growth rate and a very aggressive policy on
repossession and litigation. As a consequence |
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| during
the year we repossessed assets valued in our books at Rs. 20 million, which
comprise mainly generators that |
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| are
now under our own management and being leased out on an operating lease
basis. |
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| Operating
leases, which entail the rental of assets for short-periods after which the
asset reverts to the lessor, has been |
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| the
area of operation that this company has been advocating and pursuing over the
last three years. Revenues in this |
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| operation
have grown from Rs. 2.29 million in 1997 to Rs. 16.80 million in 1998 and
projected to be Rs. 32.57 million |
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| next
year. Investment in operating lease assets which stood at Rs. 14.72 million
in 1997 rose to Rs. 95.09 in the year |
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| under
review and is projected at Rs. 128.49 million next year. |
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| The
Board continues to advocate a strategy of investment to the maximum
permissible levels, in activities which are |
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| in
harmony with our objectives and which seek to maximize yields for our
shareholders. In this regard we are, in a joint |
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| venture
with our principal financial institution shareholder, exploring the area of
real-estate as a fresh vehicle for leasing |
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| activities;
we are actively representing to the Corporate Law Authority the value of
freeing this area of activity for |
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| leasing
companies. |
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| With
tile objective of achieving economies of scale, eliminating duplication of
costs and developing an asset size that |
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| would
attract future lenders and depositors, this company has been identifying
appropriate opportunities for merger with |
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| other
leasing companies. This is a course which has been categorically encouraged
by international lending agencies |
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| and
local financial institutions. As such on 19th June 1998 we concluded a
Memorandum of Understanding with Asian |
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| Leasing
Corporation Limited for the merger of the two companies. |
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| A
scheme of arrangement as required under Sections 284-288 of tile Companies
Ordinance, 1984 has been prepared |
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| and
valuation of shares undertaken by an independent valuer to permit the
respective Boards to approve a share-swap. |
|
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| Meanwhile
we have been in discussion with another leasing company to include that
company into the arrangement |
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| and
an independent advisor has been appointed to recommend the bases of merger
and a share swap arrangement. |
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| The
full scheme is to be presented to the respective Boards of all concerned
companies shortly and on approval and |
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| completion
of various legal requirements will be placed before the shareholders for
their approval, |
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|
| OPERATING
RESULTS OF THE COMPANY |
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| The
accompanying charts reflect our diversified lease portfolio over various
industry segments and the asset mix: |
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| First
Leasing earned a pre-tax profit of Rs. 31.70 million and the recommended
appropriation thereof is as follows:- |
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|
|
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|
1998 |
1997 |
|
|
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|
Rupees in million |
|
|
|
|
| Income
from finance lease operations |
|
|
153.86 |
180.26 |
|
| Profit/(loss)
from operating leases |
|
|
3.50 |
(0.25) |
|
|
| Corporate
finance & treasury operations |
|
23.48 |
19.18 |
|
|
| Capital
gains/(losses) |
|
|
|
4.14 |
(1.76) |
|
|
|
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|
---------- |
---------- |
|
|
|
|
|
|
184.98 |
197.43 |
|
| Operating
cost |
|
|
|
153.28 |
151.19 |
|
|
|
---------- |
---------- |
|
| Operating
profit |
|
31.70 |
4,624 |
|
| Provision
for taxation |
|
369 |
3.89 |
|
|
|
---------- |
---------- |
|
| Profit
after taxation |
|
28.01 |
42.35 |
|
| Unappropriated
profit brought forward |
|
7.81 |
17.57 |
|
|
|
---------- |
---------- |
|
|
|
35.82 |
59.92 |
|
| APPROPRIATIONS |
|
|
|
|
| Special
reserve |
|
|
15.60 |
18.47 |
|
| Dividend
10% (1997:16%) |
|
|
27.27 |
43.65 |
|
|
|
|
|
---------- |
---------- |
|
|
|
32.87 |
52.12 |
|
|
|
---------- |
---------- |
|
| Unappropriated
profit carried forward |
|
2.95 |
7.80 |
|
|
|
========== |
========== |
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| The
historical trend in respect of growth and profitability is set out below: |
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| Rupees
in million |
|
|
|
12 months to |
12 months to |
18 months to |
12 months to |
12 months to |
|
|
31st December |
3lst December |
30th June |
30th June |
30Ih June |
|
|
1993 |
1994 |
1996 |
1997 |
1998 |
|
|
|
|
| Net
investment in leases |
|
286.30 |
532.30 |
855.65 |
908.65 |
862.12 |
|
| Income
from finance lease operations |
43.80 |
83.80 |
208.80 |
180.26 |
153.86 |
|
| Operating
profit |
|
30.40 |
34.40 |
45.39 |
46.24 |
31.70 |
|
|
|
| Under
the terms of Technical Release 23 (Revised) of the Institute of Chartered
Accountants of Pakistan (ICAP), any |
|
| diminution
in the value of an investment which persists for three years after its
occurrence is deemed to be a permanent |
|
| diminution
and the asset written down accordingly. As the specified period of three
years has not yet elapsed and |
|
| pursuant
to a letter of comfort received from the major shareholding group of Bankers
Equity Ltd., which offers to |
|
| redeem
our investment in Bankers Equity at our purchase price, the Directors are of
the opinion that no provision is |
|
| required
against this investment, In the future the Board has resolved to follow the
provisions of the ICAP recommendations |
|
| as
and when such events materialise. We are aware of the implications of the
year 2000 problem and have taken all |
|
| adequate
steps in this regard. |
|
|
|
| DIVIDENDS |
|
| The
Board is pleased to recommend a cash dividend of 10 percent for the year
ended 30th June, 1998. |
|
|
| ELECTION
OF DIRECTORS |
|
| In
terms of the provisions of Section 180 (l) of the Companies Ordinance 1984,
the term of the Board of Directors |
|
| expires
on 15th February 1999. The Board has fixed the number of directors to be
elected at the Annual General Meeting |
|
| at
7 and the retiring directors being eligible may offer themselves for
re-election. |
|
|
| During
the year the CEO resigned from that office and the Board appointed the
Chairman to concurrently assume the |
|
| responsibilities
of the Chief Executive from 19th May 1998 and Mr. Shoaib Qureshi, Executive
Director was appointed |
|
| to
the Board to fill the vacancy. Mr. Abdullah Raft who had been a member of our
Board since 28th February 1993, |
|
| resigned
and was replaced by Mr. Zaigham Mehmood Rizvi, Managing Director of Pak Libya
Holding Co (Pvt) Ltd., |
|
| on
16th February, 1998. Furthermore Mr. Naseem Beg replaced Mr. A.K.M. Sayeed as
the nominee of National |
|
| Investment
Trust. Mr. Faridullah Khan nominee of Saudi Pak Industrial & Agricultural
Investment Co. (Pvt) Ltd., |
|
| resigned
from the Board on the sale of their shareholding to Pak- Libya. The Board
acknowledges the contribution and |
|
| valuable
guidance of the outgoing directors and welcomes the incoming directors and we
look forward to their support |
|
| and
wise counsel. |
|
|
| ACKNOWLEDGMENT |
|
| Tim
Board of Directors wish to place on record their sincere appreciation of the
devoted services of our staff and to |
|
| reemphasize
our commitment to the development of their professional careers and to their
well-being. The Board also |
|
| acknowledges
the support of all our institutional lenders. |
|
|
| For
and on behalf of the Board |
|
|
| Khurshid
Hadi |
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| Chairman/Chief
Executive |
|
|
| Karachi:
27th November, 1998 |
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|
|
| AUDITOR'S
REPORT TO THE MEMBERS |
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|
| FORD,
RHODES, ROBSON, MORROW |
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|
|
|
| Chartered
Accountants |
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| Finlay
House, |
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| I.I.
Chundrigar Road |
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| P.O.
Box 4719 |
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| Karachi
74000, |
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| Pakistan |
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|
|
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| Telephone
H.O: (92-21) 241 5582 |
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| Branch:
(92-21) 240 1081 |
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| Telefax:
(92-21) 241 9592 |
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| E
Mail: frrm@cyber.net.pk. |
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed balance sheet of FIRST LEASING CORPORATION |
|
| LIMITED
as at June 30, 1998 and the related profit and loss account and c. ash flow |
|
| statement,
together with the notes forming part thereof, for the year then ended and we |
|
| state
that we have obtained all the information and explanations which to the best
of our |
|
| knowledge
and belief were necessary for the purposes of our audit and, after due |
|
| verification
thereof, we report that: |
|
|
| a)
in our opinion, proper books of account have been kept by the company as |
|
| required
by the Companies Ordinance, 1984; |
|
|
|
|
| b)
In our opinion; |
|
|
| i)
the balance sheet and profit and loss account, together with the notes |
|
| thereon
have been drawn up in conformity with the Companies |
|
| Ordinance,
1984 and are in agreement with the books of account and are |
|
| further
in accordance with accounting policies consistently applied; |
|
|
|
|
| ii)
the expenditure incurred during the year was for the purpose of the |
|
| company's
business; and |
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|
|
|
|
| iii)
the business conducted, investments made and the expenditure incurred |
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| during
the year were in accordance with the objects of the company; |
|
|
|
| c)
in our opinion and to the best of our information and according to the |
|
| explanations
given to us, the balance sheet, profit and loss account and the |
|
| cash
flow statement, together with the notes forming part thereof, give the |
|
| information
required by the Companies Ordinance, 1984 in the manner so |
|
| required
and respectively give a true and fair view of the state of the company's |
|
| affairs
as at June 30, 1998 and of the profit and of the cash flows for the year |
|
| then
ended; and |
|
|
| d)
in our opinion Zakat deductible at source under the Zakat and Ushr Ordinance, |
|
| 1980
was deducted by the company and deposited in the Central Zakat Fund |
|
| established
under section 7 of that Ordinance. |
|
|
| Karachi - |
|
|
FORD, RHODES, ROBSON, MORROW |
|
| 27-Nov-98 |
|
Chartered Accountants |
|
|
|
| BALANCE
SHEET AS AT JUNE 30, 1998 |
|
|
|
|
|
|
|
|
1998 |
1997 |
|
|
Note |
Rupees |
Rupees |
|
|
|
|
| FIXED
ASSETS-Tangible |
|
3 |
104,601,958 |
31,781,916 |
|
| INVESTMENT
IN LEASES |
|
|
|
| Installment
contract receivables |
|
|
1,092,551,893 |
1,145,039,208 |
|
| Less:
Unearned income |
|
|
(230,435,623) |
(236,385,535) |
|
|
|
|
---------- |
---------- |
|
| Net
investment in leases |
|
|
862,116,270 |
908,653,673 |
|
| Less:
Current portion of net investment in leases |
|
(391,906,203) |
(365,058,171) |
|
|
|
|
---------- |
---------- |
|
|
|
|
470,210,067 |
543,595,502 |
|
| LONG-TERM
FINANCE |
|
4 |
5,893,330 |
7,112,608 |
|
|
|
|
---------- |
---------- |
|
|
|
|
476,103,397 |
550,708,110 |
|
| Less:
Provision for lease losses and doubtful receivables |
5 |
(30,223,833) |
(26,196,352) |
|
|
|
|
---------- |
---------- |
|
|
|
445,879,564 |
524,511,758 |
|
| LONG-TERM
ADVANCES |
|
|
6 |
5,115,169 |
5,402,712 |
|
| LONG-TERM
INVESTMENTS |
|
|
7 |
74,879,094 |
59,967,955 |
|
| LONG-TERM
DEPOSIT AND DEFERRED COSTS |
|
8 |
2,010,695 |
1,716,178 |
|
| CURRENT
ASSETS |
|
|
|
---------- |
---------- |
|
| Current
portion of net investment in leases |
|
391,906,203 |
365,058,171 |
|
| Current
maturity of long-term finance |
|
|
7,045,379 |
- |
|
| Current
maturity of long-term advances |
|
287,543 |
273,549 |
|
| Short-term
and morabaha finances |
|
9 |
53,479,025 |
56,385,600 |
|
| Advances,
deposits, prepayments and other receivables |
10 |
62,317,624 |
43,778,309 |
|
| Investment
in marketable securities |
|
11 |
23,423,000 |
16,602,913 |
|
| Cash
and bank balances |
|
|
12 |
19,345,626 |
79,074,458 |
|
|
|
|
---------- |
---------- |
|
|
|
|
557,804,400 |
561,173,000 |
|
|
|
|
---------- |
---------- |
|
|
|
|
1,190,290,880 |
1,184,553,519 |
|
|
|
|
========== |
========== |
|
| SHARE
CAPITAL AND RESERVES |
|
|
|
|
| Authorised
50,000,000 ordinary shares of Rs. 10 each |
500,000,000 |
500,000,000 |
|
|
|
|
========== |
========== |
|
| Issued,
subscribed and paid-up capital |
13 |
272,782,340 |
272,782,340 |
|
| Reserves |
|
|
14 |
47,793,303 |
47,056,888 |
|
|
|
|
---------- |
---------- |
|
| Shareholders'
equity |
|
|
320,575,643 |
319,839,228 |
|
| LONG-TERM
FINANCES UNDER |
|
|
|
|
| MUSHARIKA
ARRANGEMENTS |
|
15 |
97,995,801 |
98,397,694 |
|
| LONG-TERM
FINANCES |
|
|
16 |
170,527.46 |
194,256,381 |
|
| OBLIGATIONS
UNDER FINANCE LEASE |
|
17 |
11,963,892 |
5,879,864 |
|
| LONG-TERM
DEPOSITS AND LIABILITIES |
|
18 |
162,119,995 |
120,021,899 |
|
| CURRENT
LIABILITIES |
|
|
|
---------- |
---------- |
|
| Current
maturity of long term liabilities |
19 |
174,429,597 |
195,284,746 |
|
| Other
current liabilities |
|
20 |
225,400,261 |
207,228,533 |
|
| Proposed
dividend |
|
|
|
27,278,234 |
43,645,174 |
|
|
|
|
---------- |
---------- |
|
|
|
|
427,108,092 |
446,158,453 |
|
| COMMITMENTS |
|
|
|
21 |
|
|
|
|
|
|
|
---------- |
---------- |
|
|
|
|
1,190,290,880 |
1,184,553,519 |
|
|
========== |
========== |
|
|
| The
auditors' report is annexed hereto. The annexed notes form an integral part
of these accounts. |
|
|
|
Khurshid Hadi |
|
Zaigham Mehmood Rizvi |
|
|
Chairman/Chief Executive |
|
Director |
|
|
|
| PROFIT
AND LOSS ACCOUNT FOR THE YEAR ENDED JUNE 30, 1998 |
|
|
|
|
1998 |
1997 |
|
|
Note |
Rupees |
Rupees |
|
|
|
|
| INCOME |
|
|
|
|
| Income
from finance lease operations |
|
22 |
153,864,305 |
180,255,582 |
|
| Profit/(loss)
from operating leases |
|
23 |
3,502,973 |
(247,670) |
|
| Corporate
finance and treasury operation |
24 |
23,482,449 |
19,180,226 |
|
| Gain/(loss)
on marketable securities |
|
|
4,142,492 |
(1,756,410) |
|
|
|
|
|
---------- |
---------- |
|
|
|
|
184,992,219 |
197,431,728 |
|
|
|
|
|
| EXPENDITURE |
|
|
|
|
| Direct
cost of leases |
|
|
- |
96,097 |
|
| Financial
and bank charges |
|
25 |
114,587,370 |
114,185,680 |
|
| Selling,
general and administrative expenses |
26 |
31,509,734 |
27,169,208 |
|
| Provision
for diminution in value of investments |
|
3,156,147 |
(1,550,655) |
|
| Provision
for lease losses and doubtful receivables |
|
4,027,481 |
11,292,683 |
|
|
---------- |
---------- |
|
|
|
153,280,732 |
151,193,013 |
|
|
|
---------- |
---------- |
|
| OPERATING
PROFIT |
|
|
31,711,487 |
46,238,715 |
|
| PROVISION
FOR TAXATION |
|
|
|
|
|
|
|
|
| - current year |
|
|
|
3,696,839 |
2,517,341 |
|
| -
prior years |
|
|
|
- |
1,367,817 |
|
|
|
---------- |
---------- |
|
|
|
3,696,839 |
3,885,158 |
|
|
|
|
---------- |
---------- |
|
| PROFIT
AFTER TAXATION |
|
|
28,014,648 |
42,353,557 |
|
| UNAPPROPRIATED
PROFIT BROUGHT FORWARD |
|
7,810,278 |
17,572,606 |
|
|
|
---------- |
---------- |
|
|
|
35,824,926 |
59,926,163 |
|
|
|
|
| APPROPRIATIONS: |
|
|
|
|
|
|
|
|
| Transfer
to special reserve |
5,602,929 |
8,470,711 |
|
| Dividend
@ 10% (1997: 16%) |
|
27,278,234 |
43,645,174 |
|
|
|
|
|
---------- |
---------- |
|
|
|
32,881,163 |
52,115,885 |
|
|
|
---------- |
---------- |
|
| UNAPPROPRIATED
PROFIT CARRIED FORWARD |
|
2,943,763 |
7,810,278 |
|
|
|
|
========== |
========== |
|
|
|
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
Khurshid Hadi |
|
Zaigham Mehmood Rizvi |
|
|
Chairman/Chief Executive |
|
Director |
|
|
|
| CASH
FLOW STATEMENT FOR THE YEAR ENDED JUNE 30, 1998 |
|
|
|
|
|
|
1998 |
1997 |
|
|
|
|
|
Rupees |
Rupees |
|
|
|
|
| CASH
FLOW FROM OPERATING ACTIVITIES |
|
|
| Profit
for the year before taxation |
|
3,711,487 |
46,238,715 |
|
| Adjustment
for: |
|
|
|
|
| Depreciation
on fixed assets |
|
11,441,352 |
7,857,142 |
|
| Amortization
of deferred costs |
|
253,483 |
1,272,288 |
|
| Provision
for lease losses and doubtful receivables |
|
4,027,481 |
11,292,683 |
|
| Provision
for diminution in value of investments |
|
3,156,147 |
(1,550,655) |
|
| (Profit)
on sale of fixed assets |
|
( 105,716) |
(23,413) |
|
| Finance/mark-up
expenses |
|
114,041,378 |
113,452,657 |
|
| Investment
income |
|
(21,383,611) |
(16,901,503) |
|
|
---------- |
---------- |
|
|
|
|
111,430,514 |
115,398,999 |
|
|
|
|
|
|
| Operating
profit before working capital changes |
|
143,142,001 |
161,637,714 |
|
| (Increase)/Decrease
in current assets |
|
|
|
| Short-term
finances and morabaha finances |
|
2,906,575 |
6,614,400 |
|
| Investments
in marketable securities |
|
(9,976,234) |
29,175,684 |
|
| Advances,
deposits, prepayments and other receivables |
(26,270,509) |
(7,163,613) |
|
|
---------- |
---------- |
|
|
|
(33,340,168) |
28,626,471 |
|
|
|
|
| Increase/(Decrease)
in current liabilities |
|
|
|
| Certificates
of investment |
|
4,525,000 |
23,080,000 |
|
| Short-term
finances |
|
(18,680,000) |
(59,972,159) |
|
| Finance
under mark-up arrangements |
|
19,547,887 |
(20,112,906) |
|
| Accrued
and other liabilities |
|
12,177,427 |
(5,506,954) |
|
|
|
---------- |
---------- |
|
|
|
17,570,314 |
(62,512,019) |
|
|
|
|
| Cash
generated from operations |
|
|
|
| Income
taxes paid |
|
(3,980,468) |
(2,777,736) |
|
| Finance/mark-up
paid |
|
(114,361,482) |
(123,922,525) |
|
| Investment
income received |
|
29,114,806 |
5,386,297 |
|
|
|
|
---------- |
---------- |
|
|
|
|
|
(89,227,144) |
(121,313,964) |
|
|
|
|
|
---------- |
---------- |
|
| Net
cash generated from operating activities |
|
38,145,003 |
6,438,202 |
|
|
|
|
|
|
|
|
|
| CASH
FLOWS FROM INVESTING ACTIVITIES |
|
| Long-term
investments |
|
(14,911,139) |
- |
|
| Capital
expenditure |
|
(86,367,373) |
(17,348,983) |
|
| Long-term
deposits and deferred costs |
|
(548,000) |
(908,392) |
|
| Net
investment in lease finance (net of repayments) |
|
46,537,403 |
(53,002,951) |
|
| Sale
of fixed assets |
|
221 |
|
|
| Long-term
advances |
|
- |
(5,808,000) |
|
| Recovery
of loan to directors |
|
273,549 |
131,739 |
|
|
---------- |
---------- |
|
| Net
cash (used in) investing activities |
|
(52,803,865) |
(73,789,437) |
|
|
|
|
|
| CASH
FLOWS FROM FINANCING ACTIVITIES |
|
|
|
| Issue
of right shares |
|
- |
118,461,670 |
|
| Issue
of Certificates of Investment |
|
57,525,000 |
25,754,000 |
|
| Long-term
loans |
|
85,000,000 |
- |
|
| Repayment
of long-term loans |
|
(83,684,494) |
(51,279,412) |
|
| Dividend
paid |
|
(42,440,027) |
(28,121,677) |
|
| Long-term
finance |
|
(5,826,101) |
- |
|
| Long-term
advances and deposits |
|
5,259,448 |
10,751,176 |
|
| Musharika
finance |
|
(60,903,796) |
52,496,367 |
|
|
---------- |
---------- |
|
| Net
cash (used in)/generated from financing activities |
(45,069,970) |
128,062,124 |
|
|
|
---------- |
---------- |
|
| Net
(decrease)/increase in cash and bank balances |
|
(59,728,832) |
60,710,889 |
|
| Cash
and bank balances at the beginning of the year |
|
79,074,458 |
18,363,569 |
|
|
---------- |
---------- |
|
| Cash
and bank balances at the end of the year |
|
19,345,626 |
79,074,458 |
|
|
========== |
========== |
|
|
|
Khurshid Hadi |
|
|
Zaigham Mehmood Rizvi |
|
|
Chairman/Chief Executive |
|
Director |
|
|
|
|
|
|
|
|
| NOTES
TO THE ACCOUNTS FOR THE YEAR ENDED JUNE 30, 1998 |
|
|
| 1.
THE COMPANY AND ITS OPERATIONS |
|
| The
company was incorporated in Pakistan on August 31, 1991. The company is
listed on the Karachi and Lahore |
|
| Stock
Exchanges and is principally engaged ill leasing of assets and providing
corporate finance services. |
|
|
| 2.
SIGNIFICANT ACCOUNTING POLICIES |
|
| 2.1
Accounting convention |
|
| These
accounts have been prepared under the historical cost convention. |
|
|
| 2.2
Revenue recognition |
|
|
| Lease
Income |
|
|
| Finance
Lease |
|
|
| The
company follows the financing method in accounting for recognition of lease
income. To more |
|
| accurately
match income and expenditure, a portion of unearned lease income
approximating the costs |
|
| incurred
in writing the lease, including a general provision for potential lease
losses, is taken to "income |
|
| from
leasing" at the lime of execution of the least. The remainder of
unearned lease income is taken to |
|
| income
over tile term of tile lease, so as to produce a systematic return on net
investment in leases. Income |
|
| pertaining
to the periods falling between rentals due and the period end is recognized
on an accrual basis. |
|
|
| Operating
Lease |
|
|
| Rental
income is recognized on an accrual basis over file lease period. |
|
|
| Corporate
Finance and Treasury Operations |
|
| Commitment
fee and other commissions are taken to income when realized. Return on term
deposits and |
|
| fees
for corporate finance services are recognized on an accrual basis. |
|
|
| 2.3
Provision for potential lease losses and doubtful receivables |
|
| Provision
for leases losses and doubtful receivables is maintained at a level which is
adequate to provide |
|
| for
any foreseen and unforeseen doubtful receivables. |
|
|
| 2.4
Tangible fixed assets and depreciation |
|
| Owned |
|
|
| These
are stated at cost less accumulated depreciation. Depreciation is charged to
income applying the |
|
| straight
line method, whereby the cost of an asset is written off over its estimated
useful life. In respect |
|
| of
additions during the year, depreciation is charged for the full year,
however, no depreciation is charged |
|
| in
the year of disposal. Leased out assets repossessed are accounted for at
lower of original cost, fair value |
|
| or
present carrying amount. Depreciation is charged on assets acquired for
operating leases from the date |
|
| of
acquisition on a straight line basis. Maintenance and normal repairs are
charged to income as and when |
|
| incurred,
Major renewals and improvements are capitalized. Profit/loss on disposal of
fixed assets is |
|
| included
in the profit and loss account of current year. |
|
|
| Leased |
|
|
| Assets
acquired through lease finance are included as tangible fixed assets, The
outstanding lease |
|
| obligation
less finance charges allocated to future periods are shown as a liability.
The financial charge |
|
| is
calculated at the mark-up rate implicit in the lease. Depreciation is charged
over the useful life of the |
|
| assets
or lease term whichever is shorter. However, if there is reasonable certainty
that the ownership of |
|
| the
asset would transfer to the company at the end of the lease term, the asset
is depreciated over its useful life. |
|
|
| 2.5
Deferred costs |
|
| Deferred
costs are amortized over a period of five. years commencing from the year
such costs are |
|
| incurred. |
|
|
|
| 2.6
Investments |
|
| Long-term
investments |
|
| These
are stated at cost. Provision is made for any diminution in value, if
considered permanent. |
|
|
|
| Short-term
investments |
|
| These
are stated at lower of cost or market value on a portfolio basis. |
|
|
| 2.7
Taxation |
|
| Current |
|
|
| Income
for the purpose of computing current taxation is determined under the
provisions of the Tax Law |
|
| whereby
lease income received or receivable are deemed to be income. Provision for
taxation is thus based |
|
| on
income determined in accordance with the requirements of the tax law. |
|
|
| Deferred |
|
|
| The
company accounts for deferred taxation using the liability method on timing
differences arising from |
|
| using
different methods in the recognition of lease income for tax and accounting
purposes, as well as |
|
| for
all other significant timing differences. However, deferred tax is not
provided if it can be established |
|
| with
reasonable certainty that these timing differences will not reverse in the
foreseeable future. |
|
|
| 2.8
Foreign currency translation |
|
| Assets
and liabilities in foreign currencies are translated into rupees at the rates
of exchange prevailing |
|
| at
the balance sheet date except for instances where forward exchange risk cover
had been taken. Such |
|
| amounts
are stated at the contracted rate. Exchange gains and losses are included in
current income. |
|
|
| 2.9
Employees' retirement benefits |
|
| The
company operates a contributory Provident Fund for all its permanent
employees and contributions |
|
| are
made monthly in accordance with the fund rules. |
|
|
|
| 3.
FIXED ASSETS - Tangible |
|
|
|
|
COST |
|
DEPRECIATION |
|
|
|
|
|
|
|
Disposal/ |
|
Written |
|
|
|
|
Additions |
adjustment |
|
Accumulated |
|
Accumulated |
Down Value |
|
|
|
As at |
during the |
during the |
As at June, |
as at July |
Charge for |
|
as at June |
as at June, |
Depreciation |
|
|
July 1, 1997 |
year |
year |
30, 1998 |
1, 1997 |
the year |
On disposal |
30, 1998 |
30, 1998 |
% |
|
|
|
Rupees |
Rupees |
Rupees |
Rupees |
Rupees |
Rupees |
Rupees |
Rupees |
Rupees |
Rupees |
|
| OWNED |
|
|
| Office
Building |
1,403,300 |
- |
- |
1,403,300 |
238,573 |
70,165 |
- |
308,738 |
1,094,562 |
5 |
|
| Leasehold
improvements |
2,043,987 |
210,000 |
- |
2,253,987 |
938,510 |
338,098 |
- |
1,276,608 |
977379 |
15 |
|
| Furniture
and fixtures |
1,638,012 |
206,619 |
- |
1,844,631 |
1,376,899 |
108,908 |
- |
1,485,807 |
358,824 |
20 |
|
| Office
equipment |
1,346,516 |
422,953 |
54,500 |
1,714,969 |
907,668 |
265,297 |
52,050 |
1,120,915 |
594,054 |
20 |
|
| Computer
equipment |
2,038,558 |
135,600 |
41,800 |
2,132,358 |
1,287,840 |
235,617 |
28,400 |
1,495,057 |
637,301 |
25 |
|
| Air
conditioners and |
|
|
|
|
|
|
|
|
| household
equipment |
1,886,145 |
632,225 |
163,600 |
2,354,770 |
821,867 |
558,048 |
82,500 |
1,297,415 |
1,057,355 |
25 |
|
| Motor
vehicles |
11,347,951 |
3,611,961 |
2,054,180 |
12,905,732 |
6,158,797 |
2,648,076 |
745,151.00 |
8,061,722 |
4,844,010 |
25 |
|
| Plant
and machinery |
|
|
|
|
|
|
|
| (for
lease and re-sale) |
10,332,000 |
- |
- |
10,332,000 |
2,066,400 |
1,064,076 |
- |
3,130,976 |
7,201,024 |
10 |
|
|
|
------------------------------------------------------------------------------------------------------------------------ |
|
|
32,036,469 |
5,219,358 |
2,314,080 |
4,941,747 |
13,796,554 |
5,288,785 |
908,101 |
18,177,238 |
16,764,509 |
|
|
------------------------------------------------------------------------------------------------------------------------ |
|
| LEASED |
|
| Motor
vehicle |
800,000 |
772,000 |
800,000 |
772,000 |
100,000 |
193,000 |
100,000 |
193,000 |
579,000 |
25 |
|
|
|
------------------------------------------------------------------------------------------------------------------------ |
|
|
32,836,469 |
5,991,358 |
3,114,080 |
35,713,747 |
13,896,554 |
5,481,785 |
1,008,101 |
18,360,238 |
17,343,509 |
|
|
|
======================================================================================================================== |
|
|
|
|
|
|
| FOR
OPERATING LEASE |
|
|
|
|
|
|
| OWNED |
|
| Plant
and machinery |
6,462,664 |
68,865,665 |
- |
75,328,331 |
1,589,666 |
4,214,599 |
- |
5,804,265 |
69,524,066 |
10 |
|
| Office
equipment |
- |
350,000 |
- |
350,000 |
- |
11,667 |
- |
11,667 |
338,333 |
10 |
|
|
------------------------------------------------------------------------------------------------------------------------ |
|
|
|
6,462,664 |
69,215,667 |
- |
75,678,331 |
1,589,666 |
4,226,266 |
- |
5,815,932 |
69,862,399 |
|
|
|
|
------------------------------------------------------------------------------------------------------------------------ |
|
| LEASED |
|
|
|
|
|
| Plant
and machinery |
8,255,000 |
11,160,348 |
- |
19,415,348 |
285,997 |
1,733,301 |
- |
2,019,298 |
17,396,050 |
10 |
|
|
------------------------------------------------------------------------------------------------------------------------ |
|
|
14,717,644 |
80,376,015 |
- |
95,093,679 |
1,875,663 |
5,959,567 |
- |
7,835,230 |
87,258,449 |
|
|
|
------------------------------------------------------------------------------------------------------------------------ |
|
|
|
47,554,13 |
86,367,373 |
3,114,080 |
130,807,426 |
15,772,217 |
11,441,352 |
1,008,101 |
26,205,468 |
104,601,958 |
|
|
|
======================================================================================================================== |
|
|
|
|
|
|
|
|
| Depreciation
charge to |
|
|
|
|
|
|
|
|
| Bankers
equity Limited |
|
| (1997:
Rs. 748,738) |
|
(187,188) |
|
|
---------- |
|
| Net charge |
|
11,254,164 |
|
|
========== |
|
| 1997 |
|
34,360,257 |
17,348,983 |
4,155,107 |
47,554,133 |
8,946,445 |
7,857,142 |
1,031,370 |
15,772,217 |
31,781,916 |
|
|
======================================================================================================================== |
|
|
| During
the year company has changed the depreciation rate for charging depreciation
on plant and machinery |
|
| from
16% to 10% due to an increase in their estimated useful life. Had the company
not changed the rate, net |
|
| income
for the year and reserves would have been lower by Rs. 4,214,486. |
|
|
|
|
|
| 3.2
Disposal of Assets |
|
|
|
|
Accumulated |
Book |
Sale |
|
|
|
Cost |
depreciation |
Value |
Proceeds |
Profit |
Mode of disposal |
Sold/transferred to |
|
|
|
Rupees |
Rupees |
Rupees |
Rupees |
Rupees |
|
|
| Office
Equipment |
|
30,000 |
30,000 |
- |
15,000 |
15,000 |
Negotiations |
Office Automation |
|
| Office
Equipment |
|
24,500 |
22,050 |
2,450 |
15,000 |
12,550 |
Negotiations |
Lahore Office Products |
|
| Computer
Equipment |
|
41,800 |
28,400 |
13,400 |
13,000 |
(400) |
Negotiation |
|
Reckon Technology |
|
| AC
and household Equipment |
43,600 |
|
43,600 |
40,875 |
(2,725) |
An per service rules |
Employee |
|
| Ac
and household Equipment |
60,000 |
37,500 |
22,500 |
15,000 |
(7,500) |
As per service rules |
Employee |
|
| AC
and household Equipment |
60,000 |
45,000 |
15,000 |
15,000 |
- |
As per service rules |
Employee |
|
| Motor
vehicle |
|
40,500 |
35,438 |
5,062 |
25,000 |
19,938 |
Negotiation |
|
Ali Imran |
|
| Motor
vehicle |
|
693,800 |
452,223 |
241,577 |
241,577 |
- |
As per service rules |
Employee |
|
| Motor
vehicle |
|
69,000 |
17,250 |
51,750 |
60,000 |
8,250 |
Insurance claim |
EFU General Insurance Co.
Ltd. |
| Motor
vehicle |
|
630,880 |
159,970 |
479,910 |
460,000 |
(19,910) |
Negotiation |
|
Ishrat Jahan |
|
| Motor
vehicle |
|
290,000 |
- |
290,000 |
282,000 |
(8,000) |
Insurance claim |
EFU General Insurance Co.
Ltd. |
| Motor
vehicle |
|
321,000 |
80,270 |
240,730 |
278,000 |
37,270 |
Insurance claim |
EFU General Insurance Co
Ltd, |
| Motor
vehicle |
|
800,000 |
100,000 |
700,000 |
751,243 |
51,243 |
Insurance claim |
EFU General Insurance Co.
Ltd. |
|
---------------------------------------------------------------------- |
|
| TOTAL |
|
3,114,080 |
1,008,101 |
2,105,979 |
2,211,695 |
105,716 |
|
|
|
---------------------------------------------------------------------- |
|
| 1097 |
|
1,404,601 |
1,031,370 |
373,231 |
396,644 |
23,413 |
|
|
|
|
====================================================================== |
|
|
|
|
|
|
1998 |
1997 |
|
|
|
|
Rupees |
Rupees |
|
|
|
|
| LONG-TERM
FINANCE-Considered Good |
|
12,938,709 |
7,112,608 |
|
| Less:
Current maturity shown under current assets |
|
(7,045,379) |
- |
|
|
|
---------- |
---------- |
|
|
5,893,330 |
7,112,608 |
|
|
========== |
========== |
|
|
| Tim
finance is secured by a pari-passu equitable mortgage of immovable property
and pledge of directors' shares |
|
| of
the borrowing company and the personal guarantees of the directors. The loan
carries a mark-up rate of |
|
| Re.0.495
per Rs. 1,000 per day. |
|
|
| The
finance is considered good, as a compromise decree has been passed by the
banking tribunal. The finance |
|
| is
now recoverable in 12 equal quarterly installments which became due from
March 18, 1998. As a result and |
|
| in
accordance with the decree mark-up accrued of Rs, 5,826,101 has been
captialised above. |
|
|
|
|
|
|
1998 |
1997 |
|
|
|
|
Rupees |
Rupees |
|
|
|
|
| 5.
PROVISION FOR LEASE LOSSES AND |
|
|
| DOUBTFUL
RECEIVABLES |
|
30,223,833 |
26,196,352 |
|
|
|
|
|
========== |
========== |
|
|
|
|
| A
general provision for doubtful receivables has been made and in the opinion
of the management no specific |
|
| provision
is required. However, to comply with State Bank of Pakistan regulations
governing Non Banking |
|
| Financial
Institutions, an amount of Rs. 30.22 million (1997: Rs. 15.7 million) has
been allocated towards |
|
| provision
required for prudential regulations. |
|
|
| 6.
LONG-TERM ADVANCE - considered good |
|
5,402,712 |
5,676,261 |
|
| Less:
Current maturity shown under current assets |
|
(287,543) |
(273,549) |
|
|
|
---------- |
---------- |
|
|
|
5,115,169 |
5,402,712 |
|
|
|
========== |
========== |
|
|
| The
loan under the scheme has been provided to the chief executive of the company
to facilitate the construction |
|
| of
house. The loan is repayable in equal monthly installments over a period of
15 years which commenced from |
|
| January
31,1997 along with a 5% service charge per annum on the monthly outstanding
balance. The loan is |
|
| secured
by a deposit of the title deed of the property. Maximum amount due at the end
of any month during the |
|
| year
was Rs. 5,653,983 (1997: Rs. 5,786,271). |
|
|
| 7.
LONG-TERM INVESTMENTS |
|
| Quoted: |
|
|
| First
Capital Securities Ltd. |
|
| 418,000
ordinary shares of Rs. 10 each |
|
5,401,085 |
5,401,085 |
|
|
|
|
| Network
Leasing, Corporation Ltd. |
|
|
| (an
associated undertaking) |
|
|
| 250,000
ordinary shares of Rs. 10 each |
|
2,500,000 |
2,500,000 |
|
|
|
|
| First
Capital Mutual Fund |
|
|
| (an
associated undertaking) |
|
|
| 150,000
ordinary shares of Rs. 10 each |
|
1,500,000 |
1,500,000 |
|
|
|
|
| Bankers
Equity Limited |
|
|
|
| 2,702,700
ordinary shares of Rs. 10 each |
|
50,566,870 |
50,566,870 |
|
|
|
|
| ICP
S.E.M.F. |
|
|
|
| 692,000
ordinary shares of Rs. 10 each |
|
14,911,139 |
- |
|
|
|
---------- |
---------- |
|
|
|
74,879,094 |
59,967,955 |
|
|
========== |
========== |
|
|
| Aggregate
market value of quoted long-term investments as on June 30,1998 was Rs.
19,745,380 (1997: |
|
| Rs.30,219,975). |
|
|
|
|
|
|
|
|
|
|
1998 |
1997 |
|
|
|
Rupees |
Rupees |
|
|
|
|
| 8.
LONG-TERM DEPOSIT AND DEFERRED COSTS |
|
| Long-term
deposit |
|
|
548,000 |
- |
|
| Deferred
costs |
|
8.1 |
1,462,695 |
1,716,178 |
|
|
|
|
---------- |
---------- |
|
|
|
|
2,010,095 |
1,716.18 |
|
|
|
|
========== |
========== |
|
|
|
|
| 8.1
DEFERRED COSTS |
|
|
| Registration
fees |
|
|
1,045,710 |
1,045,710 |
|
| Formation
expenses |
|
|
88,133 |
88,133 |
|
| Underwriting
commission |
|
|
260,000 |
260,000 |
|
| Brokerage |
|
|
223,324 |
223,324 |
|
| Share
issue expenses |
|
|
3,026,965 |
3,026,965 |
|
| Pre-operating
expenses |
|
|
224,239 |
224,239 |
|
| Commitment
fee on long-term loans |
|
|
1,914,777 |
1,914,777 |
|
|
|
|
---------- |
---------- |
|
|
|
6,783,148 |
6,783,148 |
|
| Less:
Amortization to date |
|
(5,320,453) |
(5,066,970) |
|
|
|
|
---------- |
---------- |
|
|
|
|
1,462,695 |
1,716,178 |
|
|
|
|
|
========== |
========== |
|
|
|
|
| The
above costs have been carried forward as they confer benefit to future
periods. |
|
|
| 9.
SHORT-TERM AND MORABAHA |
|
| FINANCES-considered
good |
|
|
| Short-term
finances |
|
1,000,000 |
1,000,000 |
|
| Morabaha
finances |
|
52,479,025 |
55,385,600 |
|
|
|
---------- |
---------- |
|
|
|
53,479,025 |
56,385,600 |
|
|
|
========== |
========== |
|
|
| Short-term
and morabaha finances have been extended to clients on mark-up/profit basis
from 3 months to I year |
|
| and
are secured by equitable mortgage of immovable properties, lien on stocks,
pledge of COIs, promissory notes |
|
| and
personal guarantees in accordance with individual agreements with the
clients. Mark-up/profit rates vary |
|
| from
Re. 0.52 to Re. 0.71 per Rs. 1000 per day. |
|
|
| The
maximum amount due at the end of any month from an associated undertaking
during the year was |
|
| Rs.
5,700,000 (1997: Rs. 3,700,000). |
|
|
|
|
|
1998 |
1997 |
|
|
Note |
Rupees |
Rupees |
|
|
|
|
| 10.
ADVANCES, DEPOSITS, PREPAYMENTS |
|
|
| AND
OTHER RECEIVABLES |
|
|
|
|
|
| Advance
- unsecured, considered good |
|
|
| Advances
to suppliers and contractors |
|
|
3,254,066 |
1,582,870 |
|
| Advance to |
|
|
|
|
| Chief
Executive |
|
10.1 |
1,415,241 |
267,388 |
|
| - Directors |
|
|
10.2 |
1,613,398 |
- |
|
| - Employees |
|
|
|
926,428 |
2,446,186 |
|
|
|
|
---------- |
---------- |
|
|
|
|
7,209,133 |
4,296,444 |
|
|
|
|
| Security
deposits |
|
|
680,767 |
442,150 |
|
| Prepayments |
|
|
|
1,018,306 |
687,573 |
|
|
|
|
---------- |
---------- |
|
|
|
|
1,699,073 |
1,129,723 |
|
|
|
|
| Mark-up
receivable |
|
|
| -
Financial institutions |
|
|
1,051,321 |
7,353,080 |
|
| - Others |
|
|
|
14,072,433 |
15,501,868 |
|
|
|
|
---------- |
---------- |
|
|
|
|
15,123,754 |
22,854,948 |
|
|
|
|
| Receivable
against sale of marketable securities |
|
- |
5,600,532 |
|
| Exchange
difference due from SBP |
|
- |
3,923,307 |
|
| Receivable
from associated undertaking |
|
- |
511,026 |
|
| Other
charges recoverable from lessees |
|
11,244,057 |
1,684,859 |
|
| Operating
lease rentals receivables |
|
1,952,839 |
- |
|
| Other
assets |
|
10.3 |
20,000,000 |
- |
|
| Other
receivables |
|
5,088,768 |
3,777,470 |
|
|
|
|
---------- |
---------- |
|
|
|
|
62,317,624 |
43,778,309 |
|
|
|
|
========== |
========== |
|
|
| 10.1
The maximum amount, due at the end of any month during the year was Rs.
3,341,152. (1997: Rs. 141,795) |
|
|
|
|
| 10.2
The maximum amount due at the end of any month during the year was Rs.
1,838,098 (1997: |
|
| Rs.
6,349,670). |
|
|
| 10.3
This represents leased assets repossessed stated at original cost. |
|
|
|
| 11.
INVESTMENTS IN MARKETABLE SECURITIES |
|
|
|
1998 |
|
1997 |
|
|
|
No. of |
|
No. of |
|
|
|
|
ordinary |
|
ordinary |
|
|
|
|
Shares of |
Cost |
Shares of |
Cost |
|
| Description |
|
Rs. I0 each |
Rupees |
Rs. I0 each |
Rupees |
|
|
|
|
| AI-Meezam
Mutual Fund Ltd. |
|
250,000 |
2,500,000 |
250,000 |
2,500,000 |
|
| Adamjee
Insurance Co. Ltd. |
|
27,500 |
1,504,425 |
- |
- |
|
| EFU
General Insurance Co. Ltd. |
|
12,000 |
757,350 |
10,000 |
757,350 |
|
| Engro
Chemicals Ltd. |
|
25,000 |
1,791,820 |
- |
- |
|
| F.F.C.
Jordan |
|
125,000 |
1,817,975 |
- |
- |
|
| First
Capital Mutual Fund |
|
76,000 |
760,000 |
760,000 |
76,000 |
|
| ICI
Pakistan Ltd. |
|
150,000 |
1,900,850 |
- |
- |
|
| Karachi
Electric Supply Corporation Ltd. |
50,000 |
555,471 |
- |
- |
|
| Maple
Leaf Electric Company Ltd. |
|
- |
- |
39,000 |
1,217,658 |
|
| Muhammad
Farooq Textile Mills Ltd., |
|
- |
- |
6,701 |
233,824 |
|
| Pakistan
Telecommunication Corporation Ltd. |
215,000 |
4,215,125 |
- |
- |
|
| Pakistan State Oil
Ltd. |
10,000 |
1,152,100 |
- |
- |
|
| Southern
Electric Power Ltd. |
|
75,000 |
386,125 |
759,890 |
7,598,900 |
|
| Sui
Northern Gas Pipe Lines Ltd. |
|
150,000 |
1,685,425 |
- |
- |
|
| Sui
Southern Gas Co. Ltd. |
|
100,000 |
1,017,300 |
- |
- |
|
|
|
|
---------- |
|
---------- |
|
|
|
20,043,966 |
|
13,067,732 |
|
| Government
securities (Note 11.1) |
|
7,600,000 |
|
4,600,000 |
|
|
|
---------- |
|
---------- |
|
|
|
27,643,966 |
|
17,667,732 |
|
| Provision
for diminution m value of investment |
|
(4,220,966) |
|
(1,064,819) |
|
|
|
---------- |
|
---------- |
|
| Aggregate
market value at June 30, |
|
23,423,000 |
|
16,602,913 |
|
|
|
|
========== |
|
========== |
|
|
|
| 11.1
These represent investment in government securities as required under the
relevant provision of the State |
|
| Bank
of Pakistan rules for Non-Banking Financial Institutions to maintain
liquidity against certain |
|
| liabilities. |
|
|
|
|
|
|
|
1998 |
1997 |
|
|
|
Note |
Rupees |
Rupees |
|
| 12.
CASH AND BANK BALANCES |
|
|
|
|
|
| Balance
with banks on current accounts |
|
972,518 |
1,081,128 |
|
| Deposit
accounts |
|
12.1 |
18,282,162 |
77,897,662 |
|
|
|
|
---------- |
---------- |
|
|
|
|
19,254,680 |
78,978,790 |
|
| Cash
in hand |
|
|
90,946 |
95,668 |
|
|
|
|
---------- |
---------- |
|
|
|
|
19,345,626 |
79,074,458 |
|
|
|
|
========== |
========== |
|
|
|
| 12.1
Included in the above are Rs. 15.00 million (1997: Rs. 64.89 million) held
with an investment bank of |
|
| which
Rs. 8.72 million (1997: Rs. 6.13 million) were held in foreign currency
deposit account. Furthermore, |
|
| Rs.
6.28 million (1997: Rs. 5.35 million) of these deposits are held as
collateral against short-term loans |
|
| from
a bank (refer to hole 20.1). Furthermore Rs. 1.0 million (1997: Rs. 0.90
million) has been deposited |
|
| with
State Bank of Pakistan as required under the relevant provisions of the SBP
rules for Non-Banking |
|
| Financial
Institutions to maintain liquidity against certain liabilities. |
|
|
|
|
|
1998 |
1997 |
|
|
|
Note |
Rupees |
Rupees |
|
| 13.
ISSUED SUBSCRIBED AND PAID-UP |
|
|
| SHARE
CAPITAL |
|
|
|
|
|
|
|
|
| Fully
paid-up ordinary shares of Rs. 10 each |
|
|
| Issued
for Cash |
|
|
|
|
|
|
| 1998 |
1997 |
|
|
|
| Number of Shares |
|
|
|
|
|
|
| 27,278,234 |
15,432,067 |
At the beginning of the
year |
272,782,340 |
154,320,670 |
|
| - |
11,846,167 |
Issued during the year |
|
- |
118,461,670 |
|
| ---------- |
---------- |
|
|
---------- |
---------- |
|
| 27,278,234 |
27,278,234 |
|
272,782,340 |
272,782,340 |
|
| ========== |
========== |
|
|
========== |
========== |
|
|
|
|
| 14.
RESERVES |
|
|
|
| Capital
Reserves |
|
|
|
| Share
premium |
|
|
6,274,730 |
6,274,730 |
|
| Special
reserve |
|
14.1 |
38,574,810 |
32,971,880 |
|
|
|
|
|
---------- |
---------- |
|
|
|
|
|
44,849,540 |
39,246,610 |
|
| Revenue
Reserve |
|
|
|
| Unappropriated
profit |
|
2,943,763 |
7,810,278 |
|
|
|
---------- |
---------- |
|
|
|
47,793,303 |
47,056,888 |
|
|
|
========== |
========== |
|
|
|
|
| 14.1
Opening Balance |
|
32,971,880 |
24,501,169 |
|
| Add:
Transferred from profit and loss account |
|
5,602,930 |
8,470,711 |
|
|
|
---------- |
---------- |
|
|
|
38,574,810 |
32,971,880 |
|
|
|
========== |
========== |
|
|
|
|
| The
above represents 20% of after lax profit as required under the relevant
provision of the State Bank |
|
| of
Pakistan rules for Non Banking Financial Institutions. |
|
|
|
|
| 15.
LONG-TERM FINANCES UNDER |
|
|
| MUSHARIKA
ARRANGEMENTS |
|
|
|
|
|
|
| Musharika
finances |
|
124,621,178 |
185,524,974 |
|
| Less:
Current maturity shown under current liabilities |
(26,625,377) |
(87,127,280) |
|
|
|
---------- |
---------- |
|
|
|
|
97,995,801 |
98,397,694 |
|
|
|
|
========== |
========== |
|
|
| Musharika
finances includes Rs. 84.62 million (1997: Rs. 135.52 million) which are
unsecured. The balance of |
|
| Rs.
40.00 million is secured by hypothecation of company's assets. The mushariks
earned an average rate of |
|
| 18.92%
per annum (1997: 19.35% per annum) on these musharika arrangements. The terms
of repayment of |
|
| principal
and profit range from monthly to end of term basis. |
|
|
|
|
|
|
1998 |
1997 |
|
|
|
|
Note |
Rupees |
Rupees |
|
|
|
|
| 16.
LONG-TERM FINANCES-Secured |
|
|
| Foreign
currency loan |
|
|
|
| International
Finance Corporation |
|
16.1 |
84,793,500 |
100,210,500 |
|
| Less:
Exchange differences not yet due |
|
(656,150) |
(775,450) |
|
|
|
|
---------- |
---------- |
|
|
|
|
84,137,350 |
99,435,050 |
|
|
|
|
| Local
currency finance |
|
|
|
| From
banking institutions |
|
|
| Finance A |
|
|
16.2 |
20,000,000 |
20,000,000 |
|
| Finance B |
|
|
|
- |
16,900,000 |
|
|
|
|
| From
financial institutions |
|
|
| Finance C |
|
|
16.3 |
11,271,436 |
25,000,000 |
|
| Finance D |
|
|
16.4 |
4,151,524 |
11,383,265 |
|
| Finance E |
|
|
16.5 |
25,000,000 |
25,000,000 |
|
| Finance F |
|
|
16.6 |
7,027,163 |
14,964,112 |
|
| Finance G |
|
|
|
- |
20,000,000 |
|
| Finance H |
|
|
16.7 |
25,000,000 |
25,000,000 |
|
| Finance I |
|
|
16.8 |
20,000,000 |
20,000,000 |
|
| Finance J |
|
|
16.9 |
17,410,460 |
- |
|
| Finance K |
|
|
16.10 |
25,000,000 |
- |
|
| Finance L |
|
|
16.11 |
20,000,000 |
- |
|
| Finance M |
|
|
16.12 |
20,000,000 |
- |
|
|
|
|
---------- |
---------- |
|
|
|
|
194,860,583 |
178,247,377 |
|
|
|
|
---------- |
---------- |
|
|
|
278,997,933 |
277,682,427 |
|
| Less:
Current maturity shown under current liabilities |
(108,470,476) |
(83,426,046) |
|
|
|
|
---------- |
---------- |
|
|
|
|
170,527,457 |
194,256,381 |
|
|
|
|
========== |
========== |
|
|
| 16.1
IFC Loan |
|
|
| The
International Finance Corporation (IFC) has extended a loan for financing of
lease operations which |
|
| is
repayable in sixteen semi-annual equal installments which commenced from June
15, 1996. The loan |
|
| carries
interest at the rate of 8.5% payable semi annually secured by hypothecation
of leased assets and |
|
| related
lease receivables, ranking pari-passu with the charges created or which may
be created in favour |
|
| of
other lenders. The loan is registered under the exchange risk coverage scheme
of the State Bank of |
|
| Pakistan.
In case the company fails to pay any amount on the due date, it shall be
liable to pay liquidated |
|
| damages
at the rate of 2% per annum over and above the interest rate. |
|
|
| I6.2
Finance A |
|
| This
has been obtained from a banking institution at a mark-up rate of 19% per
annum, payable quarterly. |
|
| The
loan is repayable in lumpsum on August 1,1999 and is secured by hypothecation
of leased assets. |
|
|
| 16.3
Finance C |
|
| This
has been obtained from a financial institution on a sale and repurchase
agreement for financing the |
|
| leasing
operations of the company and is secured by hypothecation of leased assets. |
|
|
| The
sale price was Rs. 25,000,000 with a purchase price of Rs. 44,389,024 subject
to a prompt payment |
|
| rebate
of Rs. 7,936,704, which is repayable in eight equal quarterly installments
which commenced from |
|
| June
16, 1997. |
|
|
| 16.4
Finance D |
|
| This
has been obtained from a financial institution on a sale and repurchase
agreement for financing the |
|
| leasing
operations of the company and is secured by hypothecation of leased assets. |
|
| The
sale price was Rs. 20,000,000 with a purchase price of Rs. 26,697,645, is
repayable in twelve equal |
|
| quarterly
installments which commenced from January 7, 1996. |
|
|
| 16.5
Finance E |
|
| This
has been obtained from a financial institution at a mark-up rate of 20% per
annum. The loan is |
|
| repayable
in lumpsum on February 28, 1999 and is secured by hypothecation of leased
assets. |
|
|
| 16.6
Finance F |
|
| This
has been obtained from a financial institution on a sale and repurchase
agreement for financing the |
|
| leasing
operations of the company and is secured by hypothecation of leased assets. |
|
| The
sale price of Rs. 20,000,000 with a purchase price of Rs, 27,693,920 is
repayable in ten equal |
|
| quarterly
installments which commenced from October 30, 1996. |
|
|
| 16.7
Finance H |
|
| This
has been obtained from a financial institution on a sale and repurchase
agreement for financing the |
|
| leasing
operations of the company and secured by hypothecation of leased assets. |
|
|
|
|
| The
sale price was Rs. 25,000,000 with a purchase price of Rs. 35,682,790 subject
to a prompt payment |
|
| rebate
of Rs. 3,901,540 is repayable in ten installments which commenced from
September 16, 1997. |
|
|
| 16.8
Finance I |
|
| This
has been obtained from a financial institution at a mark-up rate of 20.5% per
annum, payable |
|
| quarterly.
The loan is repayable in lumpsum on August 28,1999 and is secured by
hypothecation of leased |
|
| assets. |
|
|
| 16.9
Finance J |
|
| This
has been obtained from a financial institution on a sale and repurchase
agreement for financing the |
|
| leasing
operations of the company, and secured by hypothecation of leased assets. |
|
| The
sale price was Rs. 20,000,000 with a purchase price of Rs. 27,078,100 and is
repayable in twelve |
|
| equal
quarterly installments which commenced from March 29, 1998. |
|
|
| 16.10
Finance K |
|
| This
has been obtained from a financial institution on a sale and repurchase
agreement for financing the |
|
| leasing
operations of the company, and is secured by hypothecation of leased assets. |
|
| The
sale price was Rs. 25,000,000 with a purchase price of Rs. 33,847,624 and is
repayable in twelve |
|
| equal
quarterly installments which commenced from September 02, 1998. |
|
|
| 16.11
Finance L |
|
| This
has been obtained from a financial institution on a sale and repurchase
agreement for financing the |
|
| leasing
operations of the company, and is secured by hypothecation of leased assets. |
|
| The
sale price was Rs.20,000,000 with a purchase price of Rs. 26,43{),229 and is
repayable in six semi- |
|
| annual
installments which commenced from September 23, 1998. |
|
|
| 16.12
Finance M |
|
| This
has been obtained from a financial institution at a mark-up rate of 18.4% per
annum, payable |
|
| quarterly.
The loan is repayable in lumpsum on October 28,1999, and is secured by
hypothecation of |
|
| leased
assets. |
|
|
|
|
|
1998 |
1997 |
|
|
Note |
Rupees |
Rupees |
|
|
| 17.
OBLIGATIONS UNDER FINANCE LEASE |
|
|
|
|
|
|
|
| Liabilities
against lease finance |
|
17.1 |
16,814,807 |
8,698,542 |
|
| Less:
Current maturity shown under current liabilities |
(4,850,915) |
(2,818,678) |
|
|
|
|
---------- |
---------- |
|
|
|
11,963,892 |
5,879,864 |
|
|
|
|
========== |
========== |
|
|
|
|
| 17.1
Year to June 30, 1999 |
|
7,801,944 |
4,343,477 |
|
| Year
to June 30, 2000 |
|
7,914,699 |
3,599,940 |
|
| Year
to June 30, 2001 |
|
3,981,964 |
3,712,695 |
|
| Year
to June 30, 2002 |
|
2,258,634 |
- |
|
|
|
|
---------- |
---------- |
|
|
|
21,957,241 |
11,656,112 |
|
| Less:
Finance charges allocated to future periods |
|
(5,142,434) |
(2,957,570) |
|
|
|
---------- |
---------- |
|
|
|
16,814,807 |
8,698,542 |
|
|
|
|
========== |
========== |
|
|
| These
obligations represent acquisition of equipment under finance lease facility.
The average rate of return used |
|
| as
the discounting factor is 21.58% per annum. The lease rentals are payable in
monthly installments. |
|
|
| At
the end of the lease the ownership of the asset shall be transferred to the
company on payment of residual |
|
| value
amounting to Rs. 1,009,367 (1997: Rs. 412,750) |
|
|
| 18.
LONG-TERM DEPOSITS AND LIABILITIES |
|
|
|
|
| Deposits |
|
|
|
|
| Deposits
on leases |
|
111,447,824 |
111,988,371 |
|
| Less:
Current maturity shown under current liabilities |
(34,482,829) |
(19,596,472) |
|
|
|
|
---------- |
---------- |
|
|
|
|
76,964,995 |
92,391,899 |
|
| Certificates
of investments |
|
18.1 |
85,155,000 |
27,630,000 |
|
| Liabilities
against bills discounted |
|
|
---------- |
---------- |
|
| Rental
bills outstanding |
|
|
- |
2,399,378 |
|
| Less:
Discounting charges |
|
|
- |
(83,108) |
|
|
|
|
---------- |
---------- |
|
|
|
|
- |
2,316,270 |
|
| Less:
Current maturity shown under current liabilities |
- |
(2,316,270) |
|
|
|
|
---------- |
---------- |
|
|
|
162,119,995 |
120,021,899 |
|
|
|
|
|
|
========== |
========== |
|
|
|
|
| 18.1
The Company has a scheme of registered Certificates of Investment (COl's) for
resource mobilisation as |
|
| per
permission from the Corporate Law Authority, Government of Pakistan. These
certificates are issued |
|
| under
profit and loss sharing basis at rates of profit ranging from 17.5% to 19.5%
per annum. The COI's |
|
| are
for terms of 2 years to 5 years. |
|
|
|
|
|
1998 |
1997 |
|
|
|
Note |
Rupees |
Rupees |
|
| 19.
CURRENT MATURITY OF |
|
|
| LONG-TERM
LIABILITIES |
|
|
|
|
|
| Current
maturity of long term finances under |
|
| musharika
arrangements |
|
|
26,625,377 |
87,127,280 |
|
| Current
maturity of long-term finances |
|
108,470,476 |
83,426,046 |
|
| Current
maturity of obligations under finance lease |
|
4,850,915 |
2,818,678 |
|
| Current
maturity of long-term deposits |
|
34,482,829 |
19,596,472 |
|
| Current
maturity of liabilities against bills discounted |
- |
2,316,270 |
|
|
|
|
---------- |
---------- |
|
|
|
|
|
174,429,597 |
195,284,746 |
|
|
|
|
|
========== |
========== |
|
|
|
|
| 20.
OTHER CURRENT LIABILITIES |
|
|
|
|
|
| Short-term
finances from |
|
|
|
- banks and financial
institutions |
20.1 |
45,358,341 |
55,347,817 |
|
|
- others |
|
|
- |
8,690,524 |
|
| Running
finance under mark-up arrangement |
20.2 |
34,537,077 |
14,989,190 |
|
| Certificates
of investment |
|
20.3 |
92,105,000 |
87,580,000 |
|
| Creditors,
accrued and other liabilities |
20.4 |
48,919,475 |
37,062,152 |
|
| Unclaimed
dividend |
|
|
2,264,977 |
1,059,830 |
|
| Provision
for taxation |
|
|
2,215,391 |
2,499,020 |
|
|
|
|
---------- |
---------- |
|
|
|
|
225,400,261 |
207,228,533 |
|
|
|
|
========== |
========== |
|
| 20.1
Short-term finances from banks |
|
| and
financial institutions |
|
|
| Represents
short-term finances utilised against aggregate facilities of Rs. 45.35
million (1997: Rs. 55.34 |
|
| million)
These finances carry mark-up at rates ranging from 14.2% to 19.65%. Included
in these are un- |
|
| secured
finances of Rs. 30 million (1997: Rs. 40 million). |
|
|
|
|
1998 |
1997 |
|
|
|
(Rupees in million |
|
| Security
for the balance of the finances is as follows: |
|
|
|
|
| Hypothecation
of assets leased out |
|
10.00 |
10.00 |
|
| Cash
collateral - included in bank balances in |
|
|
| deposit
accounts |
|
6.28 |
5.35 |
|
|
| 20.2
Running finance under mark-up arrangement |
|
| Represents
running finance against aggregate facilities of Rs. 85 million (1997: Rs. 81
million) from |
|
| commercial
banks. The average rate of mark-up is Re. 0.56 per Rs. 1,000 per day. These
arrangements |
|
| are
secured by hypothecation of assets leased out by the company. |
|
|
|
|
| 2.3
Certificates of investment |
|
| The
Company has a scheme of registered Certificates of Investment (COI's) for
resource mobilisation as |
|
| per
permission from the Corporate Law Authority, Government of Pakistan. These
certificates are issued |
|
| under
profit and loss sharing basis at rates of profit ranging from 13% to 19.75%
per annum. The COls |
|
| arc
for terms of 3 months to 1 year. |
|
|
|
|
1998 |
1997 |
|
|
Note |
Rupees |
Rupees |
|
|
|
|
| 20.4
Creditors, accrued and other liabilities |
|
|
|
|
| Creditors |
|
|
20.4.1 |
13,087,702 |
562,804 |
|
| Accrued
expenses |
|
|
423,760 |
402,498 |
|
| Other
payables |
|
|
4,447,973 |
3,370,184 |
|
| Excise
duty payable |
|
|
124,998 |
422,499 |
|
| Advances
from customers against |
|
|
| pending
lease executions |
|
|
482,311 |
341,936 |
|
| Tax
deducted at source |
|
|
73,020 |
153,296 |
|
| Mark-up
payable |
|
|
| Financial
institutions - secured |
|
|
13,345,210 |
11,216,455 |
|
|
- unsecured |
|
6,486,815 |
855,575 |
|
| Exchange
risk fee payable to SBP |
|
|
232,070 |
292,560 |
|
| Others
- secured |
|
|
1,102,647 |
746,741 |
|
| - unsecured |
|
|
|
2,750,168 |
11,125,692 |
|
|
|
|
---------- |
---------- |
|
|
|
|
23,916,919 |
24,237,023 |
|
| Advance
rentals |
6,362,792 |
7,571,912 |
|
|
|
|
---------- |
---------- |
|
|
|
|
48,919,475 |
37,062,152 |
|
|
|
|
========== |
========== |
|
|
| 20.4.1
This includes an amount of Rs. 12.58 million (1997: Rs. NIL) payable to a
supplier for acquisition of |
|
| assets
to be given on operating leases. |
|
|
|
|
|
| 21.
COMMITMENTS |
|
|
|
|
|
|
|
|
| Commitments
for lease finance |
|
87,339,000 |
49,990,000 |
|
| Letter
of comfort against Letters of Credit |
|
7,543,119 |
20,130,000 |
|
|
|
---------- |
---------- |
|
|
|
94,882,119 |
70,120,000 |
|
|
|
========== |
========== |
|
|
|
|
| 22.
INCOME FROM FINANCE LEASE OPERATIONS |
|
|
| Lease
income |
|
153,864,305 |
180,255,582 |
|
|
|
========== |
========== |
|
|
| The
above includes all income arising on account of finance lease operations. |
|
|
|
|
|
1998 |
1997 |
|
|
|
|
Rupees |
Rupees |
|
|
|
|
| 23.
INCOME/(LOSS) FROM OPERATING LEASES |
|
|
| Rentals |
|
16,799,226 |
2,293,520 |
|
|
|
---------- |
---------- |
|
| Depreciation |
|
5,959,567 |
1,039,000 |
|
| Operating
expenses |
|
7,336,686 |
1,502,190 |
|
|
|
---------- |
---------- |
|
|
|
|
13,296,253 |
2,541,190 |
|
|
|
|
---------- |
---------- |
|
|
|
|
3,502,973 |
(247,670) |
|
|
|
|
========== |
========== |
|
|
|
|
| 24.
CORPORATE FINANCE AND TREASURY OPERATIONS |
|
|
|
|
|
| Financial
services fee |
|
342,500 |
774,389 |
|
| Arrangement
fee |
|
22,500 |
407,548 |
|
| Dividend
income |
|
6,700,400 |
938,466 |
|
| Return
on term deposits |
|
6,373,963 |
6,336,597 |
|
| Return
on government securities |
|
993,780 |
187,500 |
|
| Return
on long-term finances |
|
2,086,818 |
5,549,002 |
|
| Return
on short-term morabaha finances |
|
|
| {net
after charging financial cost of |
|
|
| Rs.
7,505,000 (1997: Rs. 9,125,000)} |
|
4,114,600 |
3,890,138 |
|
| Gain
on disposal of fixed assets |
|
105,716 |
23,413 |
|
| Exchange
gain |
|
1,114,049 |
341,627 |
|
| Miscellaneous
income |
|
1,628,123 |
731,546 |
|
|
|
---------- |
---------- |
|
|
|
|
23,482,449 |
19,180,226 |
|
|
|
|
========== |
========== |
|
|
| 25.
FINANCIAL AND BANK CHARGES |
|
|
|
|
| Profit
on musharika finances |
|
22,030,166 |
14,520,988 |
|
| Mark-up
on long-term finances |
|
34,656,123 |
50,967,492 |
|
| Exchange
risk fee |
|
|
6,375,833 |
7,399,793 |
|
| Mark-up
on Certificates of Investment |
|
28,070,946 |
20,706,628 |
|
| Finance
charges on leased assets |
|
2,351,390 |
148,746 |
|
| Finance
charges - bills discounted |
|
83,109 |
1,087,653 |
|
| Mark-up on short term
finances - banks |
|
17,597,642 |
10,527,443 |
|
| and
financial institutions |
|
|
|
|
- Others |
|
250,499 |
1,155,629 |
|
| Mark-up
on running finance [net of Rs. 714,640 |
|
|
|
| recovered
(1997: Rs. 416,339) |
|
2,625,670 |
6,938,285 |
|
| Bank
charges and commissions |
|
354,514 |
350,067 |
|
| amortization
of deferred costs |
|
191,478 |
382,956 |
|
|
|
---------- |
---------- |
|
|
|
114,587,370 |
114,185,680 |
|
|
|
========== |
========== |
|
|
| 26.
SELLING, GENERAL AND |
|
|
| ADMINISTRATIVE
EXPENSES |
|
|
|
|
|
| Directors'
fees |
|
26.1 |
1,000 |
1,000 |
|
| Salaries
and allowance |
|
26.2 |
13,693,595 |
9,858,369 |
|
| Staff
welfare and training |
|
|
1,848,917 |
1,538,949 |
|
| Office rent |
|
|
1,452,369 |
1,289,579 |
|
| Traveling |
|
|
913,875 |
606,188 |
|
| Vehicle
up keep and running |
|
|
1,940,552 |
1,330,494 |
|
| Legal
and professional charges |
|
|
524,240 |
681,050 |
|
| Insurance |
|
|
47,205 |
25,297 |
|
| Telephone
and fax |
|
|
1,541,493 |
1,375.64 |
|
| Postage
and courier |
|
|
189,139 |
192,577 |
|
| Electricity,
water and gas |
|
|
733,260 |
343,393 |
|
| Subscription |
|
|
302,782 |
252,234 |
|
| Auditors'
remuneration |
|
26.3 |
120,000 |
183,537 |
|
| Shares
registrar service |
|
|
381,779 |
335,665 |
|
| Advertisement |
|
|
150,858 |
66,620 |
|
| Printing
and stationery |
|
|
684,883 |
851,473 |
|
| Depreciation |
|
|
5,294,597 |
6,069,405 |
|
| Amortization
of deferred costs |
|
|
62,005 |
889,332 |
|
| Office
repairs and maintenance |
|
|
756,724 |
761,804 |
|
| Donations |
|
26.4 |
94,000 |
60,000 |
|
| Professional
tax |
|
|
130,000 |
148,000 |
|
| General
expenses |
|
|
646,461 |
308,605 |
|
|
|
|
---------- |
---------- |
|
|
|
|
31,509,734 |
27,169,208 |
|
|
|
|
========== |
========== |
|
|
| 26.1
Fees totaling Rs. 1,000 (1997: Rs. 1,000) have been paid to directors for
attending board meetings during |
|
| the year. |
|
|
| 26.2
Remuneration of Chief Executive, Executive Directors and Executives. |
|
|
|
|
1998 |
|
1997 |
|
|
|
Chief |
Executive |
|
Chief |
|
|
|
Executive |
Director |
Executives |
Total |
Executive |
Executives |
Total |
|
|
|
Rupees |
Rupees |
Rupees |
Rupees |
Rupees |
Rupees |
Rupees |
|
|
| Managerial
remuneration |
|
1,330,362 |
1,867,600 |
2,599,201 |
5,797,163 |
940,930 |
3,424,610 |
4,365,540 |
|
| Housing
and utilities |
|
497,050 |
1,026,830 |
1,220,414 |
2,744,294 |
516,570 |
1,779,110 |
2,295,680 |
|
| Medical
and other expenses |
857,163 |
424,328 |
212,406 |
1,493,897 |
92,107 |
240,942 |
333,049 |
|
| Provident
fund |
|
90,380 |
186,760 |
227,156 |
504,296 |
96,840 |
213,834 |
310,674 |
|
|
|
---------------------------------------------------------------------------------------------- |
|
|
|
2,774,955 |
3,505,518 |
4,259,177 |
10,539.65 |
1,646,447 |
5,658,496 |
7,304,943 |
|
|
|
============================================================================================== |
|
| Number
of persons |
|
1 |
3 |
14 |
18 |
1 |
16 |
17 |
|
|
| In
addition the Chief Executive, two directors and certain executives are also
provided with free use of company |
|
| cars
and perquisites in accordance with the terms of their employment. All
executives are provided with medical |
|
| insurance
cover. |
|
|
|
|
1998 |
1997 |
|
|
|
Rupees |
Rupees |
|
| 26.3
Auditors' remuneration |
|
|
| Statutory
audit |
|
|
100,000 |
100,000 |
|
| Special
audit |
|
|
- |
55,000 |
|
| Other
certifications |
|
|
- |
8,538 |
|
| Out-of-pocket
expenses |
|
|
20,000 |
19,999 |
|
|
|
---------- |
---------- |
|
|
|
120,000 |
183,537 |
|
|
|
========== |
========== |
|
| 26.4
Donations |
|
94,000 |
60,000 |
|
|
|
========== |
========== |
|
|
| No
donation has been extended to any donee in whom any director or his spouse
had an interest. |
|
|
| 27.
DEFERRED TAXATION |
|
|
|
|
| Deferred
taxation liability is estimated at Rs. 81.7 million of which Rs. 7.96 million
is in respect of the current |
|
| year
(1997: Rs. 73.74 million, for the year Rs. 16.83 million). |
|
|
|
|
| The
liability for deferred taxation is not likely to reverse in the foreseeable
future and accordingly, no provision |
|
| for
deferred taxation has been made in these accounts. |
|
|
| 28.
TRANSACTIONS WITH ASSOCIATED UNDERTAKINGS |
|
|
| Receipts |
|
| Lease
rentals received |
|
8,739,964 |
5,682,868 |
|
| Security
deposits on leases |
|
135,150 |
53,175 |
|
| Profit
received on short-term finances |
|
1,300,170 |
358,111 |
|
| Net
funds received from trading activities |
|
5,818,325 |
2,119,541 |
|
| (1998:
Rs. 5,818,325 - 0) |
|
|
|
| (1997:
Rs. 13,119,541 - 11,000,000) |
|
|
|
| Dividend
income |
|
4,344,050 |
60,000 |
|
| Morabaha
finance |
|
9,200,000 |
- |
|
| Certificates
of Investment |
|
- |
1,000,000 |
|
|
|
|
| Payments |
|
|
|
| Profit
paid on Certificates of Investment |
|
75,000 |
14,794 |
|
| Mark-up
paid on managed fund |
|
5,498,822 |
30,875,289 |
|
| Leases
disbursed |
|
8,500,000 |
5,700,000 |
|
| Morabaha
finance |
|
2,741,123 |
- |
|
|
| The
transactions with the associated undertakings are in the normal course of
business at contracted rates and |
|
| terms
determined in accordance with market rates. |
|
|
| 29. GENERAL |
|
|
| 29.1
Figures have been rounded off to the nearest rupee. |
|
| 29.2
Previous period figures have been rearranged wherever necessary for the
purpose of comparison. |
|
|
|
Khurshid Hadi |
|
Zaigham Mehmood Rizvi |
|
|
Chairman/Chief Executive |
|
Director |
|
|
|
|
|
| PATTERN
OF SHAREHOLDING |
|
|
|
| No. of |
Having Shares |
|
| shareholders |
From |
To |
Shares Held |
Percentage |
|
|
|
|
| 108 |
1 |
100 |
10800 |
0.0395 |
|
| 1401 |
101 |
500 |
669200 |
2.4532 |
|
| 389 |
501 |
1000 |
38100 |
1.3996 |
|
| 301 |
1001 |
5000 |
823600 |
3.0192 |
|
| 70 |
5001 |
10000 |
570700 |
2.0921 |
|
| 15 |
1001 |
15000 |
193100 |
0.7076 |
|
| 10 |
15001 |
20000 |
183300 |
0.6719 |
|
| 4 |
20001 |
25000 |
90800 |
0.3328 |
|
| 6 |
25001 |
30000 |
170700 |
0.6257 |
|
| 2 |
30001 |
35000 |
65500 |
0.2401 |
|
| 3 |
35001 |
40000 |
119300 |
0.4373 |
|
| 1 |
45001 |
50000 |
46900 |
0.1719 |
|
| 2 |
50001 |
55000 |
103300 |
0.3786 |
|
| 2 |
55001 |
60000 |
117900 |
0.4322 |
|
| 1 |
90001 |
95000 |
93500 |
0.3427 |
|
| 2 |
95001 |
100000 |
200000 |
0.7331 |
|
| 1 |
105001 |
110000 |
110000 |
0.4032 |
|
| 1 |
110001 |
115000 |
114400 |
0.4193 |
|
| 1 |
115001 |
120000 |
117000 |
0.4298 |
|
| 2 |
125001 |
130000 |
256900 |
0.9417 |
|
| 1 |
165001 |
170000 |
166700 |
0.6111 |
|
| 1 |
190001 |
195000 |
191500 |
0.7020 |
|
| 1 |
220001 |
225000 |
221700 |
0.8127 |
|
| 1 |
395001 |
400000 |
400000 |
1.4663 |
|
| 1 |
1000001 |
1005000 |
1004000 |
3.6805 |
|
| 1 |
3225001 |
3230000 |
3230000 |
11.8409 |
|
| 1 |
4860001 |
4865000 |
4864134 |
17.8315 |
|
| 1 |
6325001 |
6330000 |
6326500 |
23.1924 |
|
| 1 |
6340001 |
6435000 |
6435000 |
23.5902 |
|
| ---------- |
|
---------- |
---------- |
|
| 2331 |
|
27278234 |
100.0000 |
|
|
| ========== |
|
========== |
========== |
|
|
| CATEGORIES
OF SHAREHOLDERS |
|
|
| Particulars |
|
|
Shareholders |
Shares Holding |
Percentage |
|
|
|
|
| Individuals |
|
2290 |
4825600 |
17.6902 |
|
| Investment
Companies |
|
5 |
112500 |
0.4124 |
|
| Insurance
Companies |
|
3 |
133000 |
0.4875 |
|
| Joint
Stock Companies |
|
14 |
10155400 |
37.2289 |
|
| Financial
Institutions |
|
11 |
11926234 |
43.7206 |
|
| Modaraba
Companies |
|
4 |
112500 |
0.4124 |
|
| Foreign
Companies |
|
1 |
8000 |
0.0293 |
|
| Non-Resident
(U.S.$) |
|
- |
- |
- |
|
| Non-Resident
(Pak Rs.) |
|
3 |
5000 |
0.0183 |
|
|
|
---------- |
---------- |
---------- |
|
| Company
Total |
|
2331 |
27,278,234 |
100.000 |
|
|
========== |
========== |
========== |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
