| ASKARI LEASING LIMITED |
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| ANNUAL
REPORT 2003 |
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| BOARD
OF DIRECTORS |
|
| Lt. Gen. (R) Masood
Parwaiz |
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| Brig. (R) Muhammad
Ayub |
Chairman |
|
| Brig. (R) Muhammad
Bashir Baz |
Director |
|
| Mr. Muhammad
Jamaluddin |
Director |
|
| Mr. Javed Ahmed
Noel |
Director |
|
| Mr. Shujat All
Khan |
Director |
|
| Mr. AghaAlilmam |
Director |
|
| Mr. Manzoor Ahmed |
|
Director (NIT
Nominee) |
|
| CHIEF
EXECUTIVE |
|
| Mr.
Nasier Sheikh |
|
| COMPANY
SECRETARY |
|
| Mr.
Zafar Alam Khan Sumbal |
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| BANKERS |
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| Askari
Commercial Bank Limited |
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| American
Express Bank Limited |
|
| ABN-AMROBankN.V. |
|
| Standard
Chartered Grindlays Bank Limited |
|
| The
Bank of Punjab Limited |
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| Citibank
N.A. |
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| Habib
American Bank |
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| United
Bank Limited |
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| Muslim
Commercial Bank Limited |
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| AUDITORS |
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| TaseerHadiKhalid&Co. |
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| Chartered
Accountants |
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| LEGAL
ADVISORS |
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| Rizvi,
Isa, Afridi & Angell |
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| REGISTERED
OFFICE/HEAD OFFICE |
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| 5th
Floor, AWT Plaza, The Mall, Rawalpindi Cantt. |
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| Telephone:
(051) 9272368-73 |
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| UAN
111-111-345 Fax: (051) 9272148 |
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| E.Mail:
info@all.com.pk |
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| REGISTRAR
AND SHARE TRANSFER OFFICE |
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| Askari
Associates (Pvt.) Ltd. |
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| 6th
Floor, AWT Plaza, The Mall, |
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| P.O.
Box 678, Rawalpindi Cantt. |
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| Telephone:
(051) 9272442-44 Fax: (051) 9272447 |
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| E.Mail:
askari@isb.compol.com |
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| 8. To trade in listed securities, both
equity and non-equity instruments, to provide professional analysis of |
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| securities
to both institutional and individual investors; to manage portfolios of
stocks and shares, pension |
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| and
provident funds, participation term certificates and other negotiable and
debt instruments for both |
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| individual
and institutional clients on a discretionary as well as non-discretionary
basis, to provide margin |
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| loans
to individual and institutional investors; to offer cash management accounts,
security management |
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| accounts
and to facilitate clients, to open letters of credit for corporate clients
for the import of machinery |
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| for
installation, expansion, balancing, modernization and replacement. |
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| 9. To act as adviser and financial agent for
companies in obtaining bank loans, syndicated loans, export credits, |
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| leases
and project finances, both domestically and internationally, to assist
companies in private placement |
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| of
debt and equity, domestically and abroad, to act as adviser to companies in
corporate or financial |
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| restructuring
as well as in the preparation of resource mobilization plans, to act as
adviser to companies in |
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| mergers,
acquisition and divestitures. |
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| 10. To act as authorized seller for securities
and certificates, denominated in local or foreign currency, issued |
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| by
Federal or Provincial Governments, statutory bodies, and state-owned
corporations, including instruments |
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| of
National Savings Schemes, to provide safe deposit vaults to clients. |
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| 11. To buy, sell hold or otherwise acquire
stocks, transferable shares, scrips, Modaraba Certificates, notes, |
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| debentures,
debenture stocks, participation term certificates, bonds, investment
contracts, and pre-organisation |
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| certificates
or subscription, and, any instrument commonly known as a security and the
company may |
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| incorporate,
float and manage open ended schemes and closed-end investment companies
(Mutual Funds), |
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| to
provides Investment Advisory and Asset Management services as defined in The
Non- Banking Finance |
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| Companies
(Establishment And Regulation) Rules, 2003 as amended. |
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| After
above alterations the existing sub-clause numbered 3 to 29 shall be read as
sub-clause numbered 12 to 38. |
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| "RESOLVED
that words appearing as " investment, bank or" in line 13 & 14
of the existing sub-clause 27 are |
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| hereby
deleted and words appearing as "business of an investment" in line
3 of sub-clause 29 are also hereby |
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| deleted." |
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| "RESOLVED
that this resolution will be effective subject to the approval of the
Securities & Exchange Commission |
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| of
Pakistan" |
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| "RESOLVED
that Clause V of the Memorandum of Association of the Company be and is
hereby altered and |
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| replaced
by the following: |
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| V. The Authorized Capital of the Company is
Rs. 1 , 000,000,000 (Rupees one billion only) divided in to 70,000,000 |
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| (Seventy
million) ordinary shares of Rs.10 (Rupees ten) each and 30,000,000 (Thirty
million) preferred |
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| shares
of Rs.10 (Rupees ten) each with attached thereto respectively such
preferential, deferred, qualified |
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| or
special rights, privileges, or conditions as provided in the Articles of
Association of the Company, or in |
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| accordance
with the Companies Ordinance, 1984 and to vary, modify or, abrogate any such
right, privileges |
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| or
conditions in such manner as may be permitted by the Company Ordinance, 1984
and to increase and/ |
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| or
reduce the capital and to divide shares in the capital into several classes
and to consolidate. |
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| "RESOLVED
that Article No.7 of the Articles of Association of the Company be and is
hereby altered and |
|
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| replaced
by the following: |
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| 7 The Authorized Capital of the Company is
Rs. 1,000,000,000 (Rupees one billion only) divided in to |
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| 70,000,000
(Seventy million) ordinary shares of Rs.10 (Rupees ten) each and 30,000,000
(Thirty million) |
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| preferred
shares of Rs.10 (Rupees ten) each. The Company shall have powers to increase
or reduce |
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| the
capital of the Company and to divide shares in the capital for the time being
into several classes. |
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| The
rights as between various classes of ordinary shares, if any, as to profits,
votes and other benefits |
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| shall
be strictly proportionate to the paid-up value of shares. |
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|
| "RESLOVED
that following Chapter and sub-clauses be and are hereby inserted after the
existing Chapter |
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| No.
XXVI and sub-clause 159: |
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| XXVII
PREFERENCE SAHRES |
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| 160. The directors of the Company may at any
time, and from time to time, allot and issue one or more classes |
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| of
Preference Shares conferring on the holders thereof the following one or more
rights and subject to such |
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| company")
will be held on Friday October 24, 2003 at 1000 hours, in Blue Lagoon
Complex, opposite outward of |
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| Continental
Hotel, Rawalpindi, to transact the following business: - |
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| 1
. To confirm the minutes of the 10th
AGM of the company held on 26 December 2002. |
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| 2. To receive, consider and adopt the
Audited Accounts of the company together with Directors' and Auditors' |
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| Reports
thereon for the year ended June 30, 2003. |
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| 3. To appoint Auditors of the company for
the year ending June 30, 2004 and to fix their remuneration. The present |
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| Auditors
of the company being eligible offer themselves for re-appointment. |
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| 4. To approve the payment of 15 % cash dividend (Rs 1.50 per share)
as recommended by the Board of Directors |
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| for
the year ended June 30, 2003 |
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| purchasing
or making any additions, alterations or improvements to or in any property,
to establish or |
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| manage
housing schemes without engaging in real estate business or work as
subsidiary or holding company |
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| or
as joint venture of construction business, to carry out surveys and valuation
of land and properties, to |
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| arrange
for insurance of the pledged property, to manage mortgage investment as
agent, to manage public |
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| or
private sector housing projects, to make loans and advances for house
building or non-residential properties |
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| to
individuals, corporate, projects and housing companies and to finance against
property by way of mortgage. |
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| To
carry on the business of discount, acceptance and guarantee house by issue,
purchase, sale, distribute, |
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| arrange,
accept, co-accept, discount, rediscount, underwrite and guarantee of
Securities, Certificate of |
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| Investments,
Certificate of Deposit, Commercial Paper, Participation Term Certificate,
Term Finance Certificates, |
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| Bonds
and bills or any financial instrument issued in and outside Pakistan by any
government or any authority |
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| or
body corporate, entity, corporation, association, persons, whether in public
or private sector, both in |
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| primary
or secondary market or money market, to purchase receivables and book debts,
to manage cash |
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| and
funds for others, to borrow with or without security in any currency from any
source, to negotiate loans, |
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| and
to act as primary dealer, market maker, agent and broker in Government debt
instruments and other |
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| securities. |
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| To
effect, insure, guarantee, underwrite and participate in managing and
carrying out of any issue, public |
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| or
private, government, municipal or other loans or of shares, stock, modaraba
certificates, bonds, debentures, |
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| debenture
stock of any government, local, company, corporation, statutory corporation,
modaraba, association, |
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| trust
or foundation and to give guarantee in relation to payment of debentures,
debenture stocks, modaraba |
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| certificates,
bonds, obligations, or securities and carry on and transact every kind of
guarantee, counter- |
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| guarantee
and indemnity business, and in particular to guarantee any moneys, including
principal, or markup |
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| or
interest, or other moneys payable under any debentures, mortgages, loan
agreements, contracts, obligations |
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| and
securities. |
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| To
undertake and carry on the office or offices and duties of trustee custodian,
trustee executor, administrator, |
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| liquidator,
receiver, committee, attorney or nominee of or for any person, corporation,
association, government |
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| state,
municipal or other body public or corporate. |
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| To
issue certificates of deposit or short-term paper of its own or investments,
to trade in commercial paper |
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| issued
by the Company's client, Government securities, promissory notes, bankers'
acceptances and other |
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| money
market instruments, to assist in the issue of commercial paper, including
introduction of companies |
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| to
the money market, preparation of documentation, distribution and market
making. |
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|
| Statement
under section 160(1) (b) of the Companies Ordinance, 1984 |
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| The
material information pertaining to the special business to be transacted at
the Annual General Meeting of the company |
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| be held on October 24, 2003 is given in this
statement. |
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| The
Securities and Exchange Commission of Pakistan (SECP) has formulated
"The Non-Banking Finance Companies |
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| (Establishment
and Regulation) Rules, 2003". These rules have come into force with
effect from April 01, 2003. Under these |
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| Tiles
the Company being an NBFC is allowed to undertake the following business
activities: |
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| The
Company can undertake these business activities provided that the objects
clause in the Memorandum of Association |
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| of
the Company has corresponding provisions relating to these business
activities. To incorporate provisions relating to |
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| NBFCs
permissible business activities in the Memorandum of Association of the
Company, amendments in the Memorandum |
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| of
Association are proposed for approval of shareholders. |
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| The
main objective of implementation of NBFCs concept is to provide a broader
platform to financial companies to have |
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| multiple
products available to their customers under one roof. This will promote the
idea of much needed "Financial |
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| Supermarkets"
and would serve to strengthen the overall financial sector. |
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| The
amendment in Memorandum and Articles of Association of the Company is also
proposed to enhance the authorized |
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| capital
of the company to one billion and to insert provisions to enable the Company
to issue preference shares. The |
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| enhancement
in authorized capital will enable the Company to meet its growth in future. |
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|
| The
directors of the Company have no interest directly or indirectly in the
amendments to or alteration of the Memorandum |
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| and
Articles of Association of the Company, except that they are shareholders / directors in the Company. |
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| NOTES |
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| 1. CLOSURE OF SHARE TRANSFER BOOKS |
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| The
Share Transfer Books of the Company will remain closed from Saturday October
18, 2003 to Friday October |
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| 24,
2003 (both days inclusive). |
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| 2. CHANGE IN ADDRESS AND
CONSOLIDATION OF FOLIOS |
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| Members
of the company are requested to immediately notify the change of address, if
any, and ask for consolidation |
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| of
folio numbers, provided any member holds more than one folio, to our
Registrar, Askari Associates (Private) |
|
| Limited
, 6th Floor, AWT Plaza, The Mall, Rawalpindi Cantt. |
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| 3 PARTICIPATION IN GENERAL MEETING |
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| (a) A member entitled to attend and vote at
the Meeting is entitled to appoint a proxy to attend the Meeting |
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| and
vote for him/her. The Form of proxy, duly completed in order to be effective
must be received by the |
|
|
| Company
at its Registered Office at least 48 hours before the Meeting. |
|
| (b) Individual beneficial owners of CDC
entitled to attend and vote at the meeting must bring his/her participant |
|
| ID
and account/sub-account number alongwith original NIC or passport to
authenticate his/her identity. |
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|
| In
case of corporate entity, resolution of the Board of Directors/power of
attorney with specimen signature |
|
|
| of
nominees shall be produced (unless provided earlier) at the time of meeting. |
|
| (c) For appointing proxies, the individual
beneficial owners of CDC shall submit the proxy form as per above |
|
| requirement
alongwith participant ID and account/sub-account number together with
attested copy of their |
|
|
| NIC
or passport. The proxy form shall be witnessed by two witnesses with their
names, addresses and NIC |
|
| numbers.
The proxy shall produce his/her original NIC or passport at the time of
meeting. In case of corporate |
|
| entity,
resolution of the Board of Directors/power of attorney with specimen
signature shall be submitted |
|
|
| (unless
submitted earlier) alongwith the proxy form. |
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|
|
|
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| terms
and conditions which shall be approved by the shareholders by a special
resolution for the issuance |
|
| of
Preference Shares. |
|
|
| 161. The right to a preferential dividend
(whether cumulative or otherwise) on the paid up or credited as paid |
|
| up
capital in respect of Preference Shares of the Company (to the extent of and
from such profits as are |
|
|
| available
for distribution and are declared by the Company in General Meeting and after
deducting such |
|
|
| amounts
therefrom as have been carried to reserves or otherwise set aside as the
Company may by law be |
|
| required)
in respect of the relevant period at such rates as may be determined by the
shareholders. It is |
|
| clarified
that the right of the holders of Preference Shares to receive preferential
dividend (whether cumulative |
|
| or
otherwise) shall be in priority to any payment of dividend to the holders of
any other shares in the capital |
|
| of
the Company. |
|
| Preference Shares shall be redeemable in
accordance with terms and conditions and after such period as |
|
| may
from time to time be determined by the members through Special Resolution and
subject to the |
|
|
| provisions
of the Ordinance. No such shares shall be redeemed unless they are fully
paid. |
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|
| No such shares shall be redeemed except
out of the profits of the Company which would otherwise be |
|
|
| available
for dividend or from out of a sinking fund created for this purpose or out of
the proceeds of fresh |
|
|
| issue
of shares made for the purpose of redemption or out of sale proceeds of any
property of the Company. |
|
| Where any such shares are redeemed
otherwise than out of the proceeds of a fresh issue, there shall out |
|
| of
profits which would otherwise have been available for dividend be transferred
to a reserve fund, to be |
|
| called
"the capital redemption reserve fund", a sum equal to the amount
applied in redeeming the shares, |
|
|
| and
the provisions of the Ordinance relating to the reduction of the share
capital of the Company shall, : |
|
|
| except
as provided in Section 85 of the Ordinance, apply as if the Capital
Redemption Reserve fund were |
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| paid-up
share capital of the Company. |
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|
| Where any such shares are redeemed out of
the proceeds of a fresh issue, the premium, if any, payable on |
|
| redemption
must have been provided for out of the profits of the Company before the
shares are redeemed |
|
|
| or
out of the share premium account. |
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|
| Through Special Resolution Preference
Shares at any time before redemption may be converted into Ordinary |
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| Shares
at value and terms determined by the members in the general meeting. |
|
|
| Preference Shares on winding up shall
have the first right, before the Ordinary Shareholders over the assets |
|
| of
the Company, limited to the nominal value of the shares held by the
Preference Shareholders, reduced |
|
|
| by
the amounts already redeemed, if any, prior to winding-up. |
|
| The holders of the Preference Shares
shall not be entitled to notice of or to attend any meeting of the |
|
|
| Company
or vote on any resolution of the Company unless, and only to the extent as
may be expressly |
|
|
| required
by the Companies Ordinance, 1984. |
|
| The Preference Shares shall have no
further rights to participate in the profits in any other surplus of the |
|
| Company
other than to the specified preferential dividend. |
|
|
| The members through Special Resolution
may vary rights and privilege attached to the Preference Shares |
|
| from
time to time. |
|
|
| To
transact any other business with the permission of the Chair. |
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|
|
|
| Financial
Results |
|
|
|
Rupees |
|
|
Total Revenue |
1,056,306,763 |
|
|
Total Expenditure |
915,755,739 |
|
|
Profit for the year |
140,551,024 |
|
|
Un-appropriated profit |
|
|
brought forward |
1,299,961 |
|
|
Profit available for |
|
|
appropriation |
141,850,985 |
|
|
Appropriations: |
|
|
|
Transferred to |
|
| Name of Directors |
|
Reserve fund |
|
28,110,205 |
|
| Lt. Gen. (R) Masood
Parwaiz |
Deferred tax reserve |
|
23,400.00 |
|
| Brig. (R) Muhammad
Ayub |
|
General reserve |
|
40,000.00 |
|
| Brig. (R) Muhammad Bashir
Baz |
Proposed dividend |
48,600.00 |
|
| Brig. (R)
Ikram-ul-Hasan |
|
Un-appropriated profit |
|
|
| Brig. (R)Tariq
Bashir |
|
carried forward |
1,740,780 |
|
| Mr. Muhammad
Jamaluddin |
Earnings per share -
basic |
4.34 |
|
| Mr. Javed Ahmed
Noel |
|
| Mr. Shujat AH
Khan |
Meetings Attended |
|
| Mr. Manzoor Ahmed |
|
7 |
|
| Mr. Agha All
Imam |
|
7 |
|
| Syed Haroon
Rashid |
0 |
|
| Leave
of absence was granted to the Directors |
6 |
|
| who
could not attend the meetings held |
|
3 |
|
| during
the period they remained Directors |
3 |
|
| of
the company. |
|
2 |
|
| Brig
(R) Ikram-ul-Hasan (Director), |
|
6 |
|
| Brig.
(R) Tariq Bashir (Director) and Syed |
1 |
|
| Haroon
Rashid (Director) retired from the |
4 |
|
| board.
The board places on record its |
|
1 |
|
| appreciation
for the valuable contribution |
|
| made
by the retiring Directors towards the |
|
| growth
of the company. |
|
|
|
|
|
| Auditors |
|
| The
auditors M/S Taseer Hadi Khalid & Co |
|
| Chartered
Accountants retire and being |
|
|
| eligible,
offer themselves for re-appointment. |
|
| The
Audit Committee has recommended |
|
| re-appointment
of retiring Auditors. |
|
|
| Acknowledgement |
|
| The
directors are pleased to put on record |
|
| their
appreciation for the commendable |
|
| dedication,
hard work and commitment of |
|
| the
employees for the growth of the company |
|
| and
to the shareholders for their confidence |
|
| in
the company. Furthermore, our gratitude |
|
| to
the Securities & Exchange Commission |
|
| of
Pakistan (SECP) and State Bank of Pakistan |
|
| (SBP)
for their continued guidance and |
|
|
| support. |
|
|
|
|
| Key
Financial Indicators |
|
|
| The
key financial indicators of the company's |
|
| performance
for the last six years are annexed |
|
| to
the report. |
|
|
| Credit
Rating |
|
|
| The
Pakistan Credit Rating Agency (PACRA) |
|
| has
maintained Askari Leasing's entity rating |
|
| of
'A Plus" for long term and "Al" for short |
|
| term
obligations based on the |
|
| results
of June 30, 2002. |
|
|
| Pattern
of Share Holding |
|
|
| The
pattern of share holding of the company |
|
| as
at June 30, 2003 is annexed to the |
|
| report. |
|
|
| Retirement
Schemes / |
|
|
| Provident
Fund |
|
|
| The
value of investments of provident fund |
|
| is
Rs. 6.10 million. The company has also |
|
| provided
for Rs. 5.906 million for |
|
| compensated
absences for un-availed leaves |
|
| of
the employees. |
|
|
|
|
| BALANCE
SHEET |
1998 |
1999 |
2000 |
2001 |
2002 |
2003 |
|
| Authorised
Capital |
500,000 |
500,000 |
500,000 |
500,000 |
500,000 |
500,000 |
|
| Paid
up Capital |
240,000 |
240,000 |
324,000 |
324,000 |
324,000 |
324,000 |
|
| Total
Equity |
493,798 |
528,199 |
638,852 |
703,335 |
755,176 |
1,011,783 |
|
| Allowance
for potential |
|
|
| lease
losses |
120,000 |
131,591 |
162,214 |
223,129 |
290,960 |
281,834 |
|
| Long
Term Liabilities |
2,083,829 |
2,823,710 |
4,690,094 |
5,328,309 |
5,353,817 |
5,061,011 |
|
| Current
Liabilities |
2,449,526 |
2,265,777 |
1,892,268 |
1,774,665 |
2,317,998 |
1,833,740 |
|
| Current
Assets |
2,545,973 |
2,810,393 |
3,810,835 |
3,812,841 |
3,991,898 |
3,878,258 |
|
| Total
Assets |
5,027,152 |
5,617,686 |
7,221,214 |
7,806,309 |
8,426,990 |
7,906,533 |
|
| INCOME
STATEMENT |
|
|
| Lease
Income |
593,665 |
638,103 |
767,042 |
988,743 |
928,896 |
800,567 |
|
| Total
Revenue |
716,009 |
797,590 |
992,664 |
1,171,509 |
1,194,993 |
1,056,307 |
|
| Financial
Expenses |
529,952 |
665,419 |
794,482 |
937,772 |
951,010 |
745,564 |
|
| Profit
before Taxation |
99,981 |
70,901 |
100,554 |
77,483 |
21,115 |
140,551 |
|
| Profit
after Taxation |
71,981 |
62,401 |
91,454 |
64,483 |
21,115 |
140,551 |
|
| FINANCIAL
INDICATORS |
|
|
| Earnings per share |
4.54 |
2.95 |
3.1 |
2.39 |
0.65 |
4.34 |
|
| Return
on Average Equity |
20.75% |
13.42% |
15.74% |
9.61% |
2.90% |
15.91% |
|
| Current
Ratio |
1.04 |
1.24 |
2.01 |
2.15 |
1.72 |
2.11 |
|
| Book
value (Rs. per share) |
20.57 |
22 |
19.72 |
21.71 |
23.31 |
31.23 |
|
| Return
to share holders |
20% |
20% |
20% |
|
- |
15% |
|
|
|
|
| CORPORATE
GOVERNANCE |
|
|
|
|
| We
have reviewed the Statement of Compliance with the best practices contained
in the Code of Corporate |
|
| Governance
prepared by the Board of Directors of Askari Leasing Limited to comply with
the Listing Regulations |
|
| of
the Stock Exchanges where the Company is listed. |
|
|
|
|
| The
responsibility for compliance with the Code of Corporate Governance is that
of the Board of Directors of |
|
| the
Company. Our responsibility is to review, to the extent where such compliance
can be objectively verified, |
|
| whether
the Statement of Compliance reflects the status of the Company's compliance
with the provisions of |
|
| the
Code of Corporate Governance and report if it does not. A review is limited
primarily to inquiries of the |
|
| Company
personnel and review of various documents prepared by the Company to comply
with the Code. |
|
|
| As
part of our audit of financial statements we are required to obtain an
understanding of the accounting and |
|
| internal
control systems sufficient to plan the audit and develop an effective audit
approach. We have not carried |
|
| out
any special review of the internal control system to enable us to express an
opinion as to whether the Board's |
|
| statement
on internal control covers all controls and the effectiveness of such
internal controls. |
|
|
| Based
on our review, nothing has come to our attention which causes us to believe
that the Statement of |
|
| Compliance
does not appropriately reflect the Company's compliance, in all material
respects, with the best |
|
| practices
contained in the Code of Corporate Governance, effective as at June 30,2003. |
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
| OF
ASKARI LEASING LIMITED |
|
|
| We
have audited the annexed balance sheet of Askari Leasing Limited as at 30
June 2003 and the related |
|
| profit
and loss account, cash flow statement and statement of changes in equity
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 purpose of |
|
| our
audit. |
|
|
|
|
| It
is the responsibility of the company's management to establish and maintain a
system of internal |
|
| control,
and prepare and present the above said statements in conformity with the
approved accounting |
|
| standards
and the requirements of the Companies Ordinance, 1984. Our responsibility is
to express an |
|
| opinion
on these statements based on our audit. |
|
|
| We
conducted our audit in accordance with the auditing standards as applicable
in Pakistan. These |
|
| standards
require that we plan and perform the audit to obtain reasonable assurance
about whether |
|
| the
above said statements are free of any material misstatement. An audit
includes examining, on test |
|
| basis,
evidence supporting the amounts and disclosures in the above said statements.
An audit also |
|
| includes
assessing the accounting policies and significant estimates made by
management, as well as, |
|
| evaluating
the overall presentation of the above said statements. We believe that our
audit provides a |
|
| reasonable
basis for our opinion and, after due verification, we report that: |
|
|
| (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, cash flow statement and statement of
changes in equity |
|
| together
with the notes forming part thereof conform with approved accounting
standards as |
|
| applicable
in Pakistan, and, 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^ |
|
| affairs
as at 30 June 2003 and of the profit, its cash flows and changes in equity
for the year then |
|
| ended;
and |
|
|
| (d) in our opinion Zakat deductible at source
under the Zakat and Ushr Ordinance, 1980 (XVIII of |
|
| 1980),
was deducted by the company and deposited in the Central Zakat Fund
established under |
|
| Section
7 of that Ordinance. |
|
|
|
|
|
|
|
|
|
|
|
| Cash
flows from Operating Activities |
|
|
| Profit
before taxation |
|
| Adjustments
for : |
|
|
| Depreciation |
|
|
| Allowance
for potential lease losses |
|
| Provision
for imapirment of receivables |
|
| Amortisation
of deferred costs |
|
| Profit
on disposal of fixed assets |
|
|
2003 |
2002 |
|
| Profit
on certificates of investment |
|
|
(Rupees) |
(Rupees) |
|
| Mark
up expense on borrowings |
|
|
|
| Provision/
(reversal) for diminution in value of shares |
|
|
140,551,024 |
21,114,689 |
|
|
|
|
|
|
|
| Operating
profit before working capital changes |
|
|
22,065,252 |
26,433,606 |
|
| Changes
in operating assets and liabilities |
|
|
54,617,027 |
67,830,624 |
|
| (Increase)/decrease
in : |
|
|
4,000,000 |
24,809,107 |
|
| Investments |
|
|
|
1,063,800 |
|
| Financing
against deposits |
|
|
|
142421 |
-4,602,376 |
|
| Money
market placements |
|
|
4,828,171 |
872,566,177 |
|
| Advances,
prepayments and other receivables etc. |
|
|
423S0 |
71,102,218 |
|
|
|
|
|
689,385 |
|
| Increase/
(decrease) in current liabilities |
|
|
|
814,970,019 |
1,058,813,771 |
|
| Cash
generated from operations |
|
|
|
9,521,043 |
1,079,928,460 |
|
| Profit
paid on certificates of investment |
|
|
|
|
| Mark
up paid on borrowings |
|
|
5221,89 |
-635,706,069 |
|
| Income
taxes paid |
|
|
153838 |
1,637,471 |
|
|
|
|
|
9373.047 |
294,515,903 |
|
| Net
cash generated from/fused in) operating activities |
|
7455.527 |
5,056,451 |
|
| Cash
flows from Investing Activities |
|
|
1,379,710 |
347,884,088 |
|
| Fixed
capital expenditure |
|
|
8,965,981 |
77,738,254 |
|
| Sale
proceeds of operating fixed assets |
|
|
1,030,034,772 |
809,782,626 |
|
| Long
term loans (net) |
|
|
72,594,912 |
852,167,844 |
|
| Investment
in lease finance (net) |
|
|
86555 |
79,019,669 |
|
| Net
cash generated from /(used in) investing activities |
|
4142 |
24,228,857 |
|
| Cash
flows from Financing
Activities |
|
|
14121 |
955,416,370 |
|
| Certificates
of investment |
|
|
14241 |
145,633,744 |
|
| Deposits
on lease contracts |
|
|
3 |
|
|
| Dividend
paid |
|
|
14212 |
34,297,804 |
|
| Loans
from financial institutions |
|
|
4565 |
52,432,769 |
|
| Net
cash (used in) /generated from financing activities |
|
4,608,040 |
214,979 |
|
| Net
decrease in cash and cash equivalents |
|
45236 |
379,296,882 |
|
| Cash
and cash equivalents at the beginning of the vear |
|
|
360,946,938 |
|
|
|
|
|
|
|
|
|
338,233,160 |
|
| COMPANY
AND ITS OPERATIONS |
|
|
|
217,880,184 |
|
| Askari
Leasing Limited ("the company") was incorporated in Pakistan as a
public limited company on August |
419,657 |
|
| 1,
1993 and was granted certificate of commencement of business on November 3,
1993. The company is listed |
4123 |
77,072,447 |
|
| on
the Karachi, Lahore and Islamabad Stock Exchanges and principally carries on
the business of leasing. |
9385 |
478,621,240 |
|
| SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES |
|
14256 |
27,959,442 |
|
| 2
. 1 Statement of Compliance |
|
|
4155 |
234,532,554 |
|
| These
accounts are prepared in accordance with approved accounting standards as
applicable in Pakistan |
1123 |
206,573,112 |
|
| and
the requirements of the Companies Ordinance, 1984. Approved accounting
standards comprise |
|
| of
such International Standards as notified under the provisions of the
Companies Ordinance, 1984 |
|
| and
the directives issued by Securities and Exchange Commission of Pakistan
(SECP). Wherever the |
|
|
| requirements
of the Companies Ordinance, 1984 or directives issued by the SECP differ with
the |
|
|
| requirements
of these standards, the requirements of the Companies Ordinance, 1984 or the
requirements |
|
| of
the said directives take precedence. |
|
|
| 2.2 Accounting Convention |
|
| These
accounts have been prepared under the historical cost convention except that
investments in |
|
|
| available
for sale securities are stated at fair value. |
|
|
| 2.3 Revenue Recognition |
|
|
| The
company changed its revenue recognition policy for lease contracts executed
on or after July 1, |
|
|
| 1998.The
change of policy was made in 1998-99 to comply with the provisions of revised
International |
|
| Accounting
Standard for Leases (IAS17) and to adhere to the directive dated August 1,
1999 issued by |
|
|
| the
Institute of Chartered Accountants of Pakistan. |
|
| Finance
Lease |
|
| For
Lease Contracts Executed to June 30, 1998 |
|
|
| At
the commencement of lease, total unearned lease income consists of excess of
aggregate lease |
|
| contract
receivable over the cost of the leased asset. At the time a lease is executed
, a portion of |
|
| unearned
lease income which equals the allowance for potential lease losses is charged
to income. The |
|
|
| remainder
of unearned lease income is taken to income over the term of lease, starting
from the month |
|
|
| in
which the lease is executed, so as to produce a systematic return on the net
investment in the lease. |
|
|
| For
Lease Contracts Executed after June 30, 1998 |
|
| The
company follows the "Finance Method " to recognize income on
finance leases. At the commencement |
|
| of
lease, total unearned lease income consists of excess of aggregate lease
contract receivable over the |
|
| cost
of the leased asset. Unearned finance income is amortized to income over the
lease term by |
|
|
| applying
the annuity method to produce a constant rate of return on net investment in
the lease. |
|
|
|
|
| Balance
as at June 30, 2001 (Rupees) |
|
|
| Net
profit for the year |
|
|
| Effect
of remeasurement of available for |
|
| sale
investments to fair value held as at |
Reserve |
General |
Deferred tax |
Reserve for |
Un realised gain on |
Unappropriated |
|
| fund |
reserve |
reserve |
contingencies |
revaluation of |
profit |
|
| Transferred
to / (from) during the year |
|
available for sale |
|
| Balance
as at June 30, 2002 (Rupees) |
|
investments to |
|
|
| Net
profit for the year |
|
their fair value |
|
|
| Gain
on sale of available for sale |
|
324,000,000 |
120,027,057 |
41,000,000 |
112,900,000 |
105,000,000 |
|
|
| investements
recycled to profit and |
|
408,210 |
|
|
| loss
account |
|
21,114,689 |
|
|
| Effect
of remeasurement of available |
|
|
| for
sale investments to fair value held |
|
30,725,605 |
|
|
|
| as
at the year end |
|
4,222,938 |
-7,000,000 |
23,000,000 |
|
|
| Transfers
during the year |
|
324,000,000 |
124,249,995 |
34,000,000 |
135,900,000 |
105,000,000 |
|
| Provision
for deferred tax |
|
30,725,605 |
|
|
| Proposed
Dividend @ Rs 1.50 per share |
|
28,110,205 |
40,000,000 |
23,400,000 |
-20,222,938 |
|
|
| Balance
as at June 30, 2003 (Rupees) |
|
324,000,000 |
152,360,200 |
74,000,000 |
159,300,000 |
1,299,961 |
|
|
|
|
140,551,024 |
|
|
|
| Investment
property |
|
|
-7,614,353 |
|
|
| The
company has adopted IAS 40 " Investment Property " from the
financial year beginning July 01, |
|
195,381,692 |
|
|
| 2002.
The company has opted for the "Cost Model" for measurement of its
investment property and |
|
277,475,969 |
|
|
|
| the
investment property is measured at cost less accumulated depreciation and any
accumulated |
|
-91,510,205 |
|
|
| impairment
losses. The adoption of this IAS has resulted in recognition of depreciation
expense |
|
-105,205,529 |
|
|
|
| amounting
to Rs. 4,566,356 for the financial year ended June 30, 2003. The opening
balances have not |
|
-48,600,000 |
|
|
| been
restated as the amount was not material. |
|
105,000,000 |
|
|
|
| Had
there been no change in policy, profit for the year and carrying value of
investment property would |
|
| have
been higher by Rs. 4,566,356. |
|
| Depreciation
is charged to income applying the straight line method whereby cost of the
investment |
|
| property
is written off over its estimated useful life. In respect of additions during
the year, depreciation |
|
| is
charged proportionately from the month of acquisition and up to deletion
respectively. Minor |
|
| maintenance
and repairs are charged to income as and when incurred. Major renewals and
improvements |
|
| are
capitalized and the assets so replaced, if any, are retired. Gains and losses
on disposal of investment |
|
| property,
if any, are taken to the profit and loss account. |
|
| Investments |
|
|
| Investment
in Associates |
|
| These
are stated at cost. Provision for diminution in value of investments is made,
if considered |
|
| permanent. |
|
|
| Held
for trading |
|
|
| Investments
which are acquired principally for the purposes of generating profit from
short term |
|
| fluctuations
in price or dealer's margins are classified as held for trading. Short term
has been defined |
|
| as
a period of one month. These are stated at fair values with any resulting
gains or losses recognized |
|
| in
profit and loss account. |
|
| Held
to maturity |
|
| Investments
with fixed maturity, where management has both the intent and the ability to
hold to |
|
| maturity
are classified as held to maturity and are stated at amortised cost. The
resultant change in |
|
| values
are reported directly in profit and loss account. |
|
| Available
for sale |
|
|
| Investments
which could not be classified as held for trading or held to maturity are
classified as held |
|
| for
sale and are stated at fair value, with any resultant gain or loss being
recognized directly in equity |
|
| through
the statement of changes in equity. Any impairment loss that has been
recognized in equity |
|
| is
removed from equity and recognized in profit and loss account for the period. |
|
| All
investments whether held for trading , held to maturity and available for
sale are initially recognized |
|
| at
cost and are recognized/ derecognized by the company on the date it commits
to purchase/sell off |
|
| investments. |
|
|
| The
fair value of those investments representing listed equity and other
securities iie.debt instruments |
|
| are
determined on the basis of year-end bid prices obtained from stock exchange
quotations and quotes |
|
| from
brokers. |
|
|
|
|
|
| Front
end fee, commitment charges, fines and penalties, gain on termination of
lease contracts etc. are |
|
| recognized
as income when they are realised. |
|
|
| Operating
Lease |
|
|
| Rental
income from assets given on operating lease is recognized on time proportion
basis. |
|
| Income
on Bank deposits and Investments |
|
|
| Profit
on short term investments and bank deposits is accounted for on time
proportion basis. |
|
| Dividend
Income |
|
| Dividend
income is recorded at the time of closure of share transfer books of the
company declaring |
|
| the
dividend. |
|
|
| Gain
on sale of Investments |
|
|
| Gain
and loss on sale of Investments is taken / charged to income in the period in
which it arises. |
|
| Net
Investment in Lease Finance |
|
|
| These
are stated at present value of minimum lease payments under the agreements. |
|
| The
allowance for potential lease losses is maintained at a level which, in the
judgement of the |
|
| management,
is adequate to provide for potential losses on lease portfolio that can be
reasonably |
|
| anticipated.
The allowance is increased by provisions charged to income and is decreased
by charge |
|
| off,
net of recoveries. The company maintains provision for potential lease losses
in accordance with |
|
| Prudential
Regulations for Non-Banking Finance Companies Undertaking the Business of |
|
| Leasing
Only. |
|
|
| Fixed
Assets and Depreciation |
|
| Operating
Assets - Own Use |
|
|
| These
are stated at cost less accumulated depreciation. |
|
|
| Depreciation
is charged to income applying the straight line method whereby cost of the
asset is written |
|
| off
over its estimated useful life. In respect of additions and deletions of
assets during the year, |
|
| depreciation
is charged proportionately from the month of acquisition and up to deletion
respectively. |
|
| Minor
maintenance and repairs are charged to income as and when incurred. Major
renewals and |
|
| improvements
are capitalized and the assets so replaced, if any, are retired. Gains and
losses on disposal |
|
| of
assets, if any, are taken to profit and loss account. |
|
| Fixed
Assets on Operating Leases |
|
| Fixed
Assets on operating lease are stated at cost less accumulated depreciation.
Depreciation is charged |
|
| to
income applying the straight line method whereby cost of the asset is written
off over its estimated |
|
| useful
life. |
|
|
|
|
|
| Foreign
Currency Transactions |
|
|
| Transactions
in foreign currencies are accounted for in rupees at the rates of exchange
ruling on the |
|
|
| date
of the transactions. Monetary assets and liabilities in foreign currencies
are translated into rupees |
|
| at
the rate of exchange ruling at the balance sheet date, except for liabilities
covered under State Bank |
|
| of
Pakistan exchange risk cover scheme, which are translated at contracted
rates. Exchange gains and |
|
|
| losses
are taken to the profit and loss account. |
|
|
| Staff Retirement Benefits |
|
| The
company operates a Staff Provident Fund scheme as a defined contribution plan
for all eligible |
|
| employees.
Equal monthly contributions are made to the fund by the company and the staff
at the rate |
|
| of
8.33% of the basic salary. |
|
|
| The
company also provides for compensated absences of its employees on unavailed
leaves. |
|
| Receivables |
|
|
| Known
impaired debts are written off, while debts considered doubtful of recovery
are fully |
|
| provided
for. |
|
|
| Provisions |
|
| A
provision is recognized in the balance sheet when the company has a legal or
constructive obligation |
|
| as
a result of past event and it is probable that an outflow of resources
embodying economic benefits |
|
| will
be required to settle the obligation and a reliable estimate can be made of
the amount of obligation. |
|
| Impairment |
|
|
| The
carrying amount of the company's assets are reviewed at each balance sheet
date, to determine |
|
| whether
there is any indication of impairment. If such indication exists the assets'
recoverable amount |
|
| is
estimated. An impairment loss is recognised wherever the carrying amount of
the asset exceeds its |
|
| recoverable
amount. Impairment losses are recognised in profit and loss account. |
|
| Financial Instruments |
|
|
| Financial
assets and liabilities: |
|
|
| Financial
assets and liabilities are classified and stated at values determined
according to the substance |
|
| of
contractual arrangements. Significant financial assets include long term
loans, long term investments, |
|
| net
investment in leases, short term investments and cash and bank balances.
Significant financial |
|
| liabilities
include certificates of investment, long term loans and short term facilities
under mark-up |
|
| arrangements. |
|
|
|
|
|
| Taxation |
|
| Current |
|
| The
charge for current taxation is based on taxable income at the current tax
rates after taking into |
|
|
| account
tax credits and tax rebates available, if any. |
|
|
| Deferred |
|
|
| The
company's policy is to provide deferred tax using the balance sheet liability
method on temporary |
|
| differences
between the carrying amounts of assets and liabilities for financial
reporting purposes and |
|
| the
amounts used for taxation purposes. The provision is made in the manner
described below: |
|
| The
amount of deferred tax provided is based on the expected manner of
realisation or settlement of |
|
| the
carrying amount of assets and liabilities, using tax rates enacted at the
balance sheet date. A deferred |
|
| tax
asset is recognised only to the extent that it is probable that future
taxable profits will be available |
|
| against
which the asset can be utilised. Deferred tax assets are reduced to the
extent that it is no longer |
|
| probable
that the related tax benefits will be realised. |
|
| Securities
and Exchange Commission of Pakistan (SECP), vide circular number 16 dated
September 10, |
|
| 1999
directed that in order to achieve compliance with International Accounting
Standard-12, all leasing |
|
| companies
during each of five financial years from July 01, 1998 to June 30, 2003 shall
provide for |
|
| deferred
tax liability arising in that year together with an additional amount equal
to one fifth of |
|
| unprovided
deferred liability relating to the preceeding years. If the amount to be
provided is transferred |
|
|
| to
a deferred tax reserves, it would be considered a compliance with the
requirements of IAS-12. |
|
| Accordingly
the company is currently transferring the requisite amount to the reserve
created pursuant |
|
| to
this circular. |
|
|
| The
revised IAS-12: Income Taxes became applicable during the current year on
financial statements |
|
| covering
the periods beginning on or after January 01, 2002. Aa a result the company
has recognised |
|
| deferred
tax liability on unrealized gain on available for sale investments. The
resultant liability is adjusted |
|
| against
the related gain. |
|
|
| In
accordance with the allowed alternative treatment prescribed in IAS-8
"Net Profit or Loss for the |
|
| Period,
Fundamental Errors and Change in Accounting Policies", the effect of
this change in accounting |
|
| policy
has been recognised in the current year. The Proforma information relating to
the change in the |
|
| accounting
policy on unrealised gain on available for sale investments is given below: |
|
|
|
|
|
|
|
|
| Balance
of unrealised gain on available for sale investments |
|
|
| as
on June 30, 2002 as previously reported |
|
| Effect
of change in accounting policy with respect to recognition of |
|
|
| deferred
tax liability on unrealised gain on available for sale investments |
|
|
| Balance
as on June 30, 2002 - restated |
|
|
| The
adoption of the IAS has resulted in a decrease in reserves by Rs. 105 million
at the year end. |
|
|
| "B"
are issued for profit on principal portion of restructured liabilities. The
TFCs are redeemable in 13 semi |
|
| annual
installments starting from June 30, 2003 till final payment by June 30, 2009.
The TFCs of series "A" are |
|
| carrying
profit rate of 16% per annum. The value of TFCs has been recognised at
amortised value of lease |
|
|
| facilities
aginst which the TFCs are issued, since the management is of the view that
recoverability is dependent |
|
| upon
future profitable operations by PCL. The difference between the face value of
the TFCs and the amortised |
|
| value
of the lease facility has been taken, as impairment loss. The TFCs are
secured by way of pan passu charge/ |
|
| mortgage
in respect of/ over the securities and additional securities to be created in
favour of the Trustee |
|
| (National
Bank of Pakistan). |
|
| The
Securities and Exchange Commission of Pakistan (SECP) vide its letter No.
SC/LES/ED(SC)/537/2001 dated |
|
| October
16, 2001 granted relaxation to the leasing companies pertaining to the
provisioning requirement |
|
|
| under
Leasing Companies (Establishment and Regulations) Rules 2000 for the
facilities extended to PCL. The |
|
| SECP
permitted the leasing companies to retain the provision against the PCL's
liabilities made up to June 30, |
|
| 2001.
Further more as the restructuring arrangement has been implemented as
approved by the Sindhg High |
|
| Court,
the SECP, vide its letter No. SEC/NBFC (1) -JD/735/2003 dated September 11,
2003, further deferred |
|
| the
applicability of note 4 to Regulation 7 of Prudential Regulations for Non
Banking Finance Companies |
|
|
| Undertaking
the Business of Leasing Only, notified through Circular No. 23 of 2003,
(Previously Note 4 to Rule |
|
| 10
of the Leasing Compnies (Establishment and Regulations) Rules 2000) up to
June 30, 2004 for the treatment |
|
| of
lease financing facilities provided to PCL by the Leasing Companies. |
|
|
| FINANCING
AGAINST DEPOSITS |
|
|
| These
are secured against lien on certificates of investment (COIs) issued by the
company. The expected rate |
|
| of
profit ranges between 12% to 14% per annum. |
|
|
| Advance against leases |
|
|
| This
represents advances given to suppliers on behalf of lessees in respect of
assets to be leased. Lessees |
|
| are
being charged with mark-up ranging between 36.30 to 52.05 paisas per thousand
per diem against |
|
|
| these
advances. |
|
|
|
|
|
| No.
of Certificates |
|
|
|
|
|
|
|
|
|
|
| Sui
Southern Gas Company limited |
|
|
| Engro
Asahi Polymer Chemical Limited |
|
|
| Engro
Asahi Polymer Chemical Limited |
|
| Pakistan
PTA Limited |
|
| Dewan
Salman Fibers Limited |
|
2003 |
|
2002 |
|
| Dawood
Leasing Limited |
Profit |
Rates Face |
Maturity |
Caning rake |
Fair value t |
Caning value |
|
| Engro
Chemical Pakistan Limited |
|
| repayment |
% value per |
Date |
Rupees |
Rupees : |
Rupees |
|
| Engro
Chemical Pakistan limited |
|
frequency |
Certificate |
|
| |
|
| Union
Bank Limited |
100 |
100 |
Semi annually |
nm 100,000 |
01.06,2006 |
10,832,000 |
10,391,680 |
9,996,000 |
|
| Bank
Alfalah limited |
12 |
12 |
Semi annually |
14.50% 5,000 |
15.06,2006 |
60,553 |
60,550 |
59,976 |
|
|
93 |
93 |
Semi annually |
14.50% 100,000 |
15.06.2006 |
9,385,697 |
9,385,489 |
9,296,280 |
|
|
-100 |
100 |
Semi annually |
16.00% 100,000 |
01.08.2006 |
10,530,293 |
10,582,147 |
9,998,000 |
|
| These
TFCs have been issued persuant to the approval of
The Sindh High Court for scheme of arrangement |
15 |
15 |
Quarterly |
16.00% 1,000,000 |
22.06.2005 |
14,976,000 |
15,125,760 |
14,988,000 |
|
| under
the provisions of section 284 and 285 of the
Companies Ordinance 1984 for restructuring of Pakland |
50 |
50 |
Semi annually |
14,00% 100,000 |
07.09.2007 |
5,000,000 |
5,000,000 |
5,000,000 |
|
| Cement
Limited(PCL). The TFCs of series "A"
comprises of principal portion of liabilities and TFCs of series |
33 |
33 |
Semi annually |
17.00% 50,000 |
27.11.2006 |
1,656,348 |
1,681,990 |
1,649,670 |
|
|
|
8 |
8 |
Semi annually |
17.00% 5,000 |
27.11.2006 |
|
40,774 |
39,992 |
|
|
|
5,521.00 |
- |
Semi annually |
15.00% 5,000 |
21.06.2008 |
, 21,080,537, |
35,042,041 |
- |
|
|
|
- |
Semi annually |
15,00% 5,000 |
19.12.2008 |
4,014,197 |
4,947,498 |
- |
|
| 9.1 Movement of allowance for potential
lease losses |
|
10533438? |
111,984,328 |
87,701,203 |
|
| Balance
as at July 1 |
|
| Provision
for the year |
|
|
|
| Less:
Transfer of provision to PCL's TFCs |
|
| :
Provision written off during the year |
|
| Balance
as at June 30 |
|
2003 |
2002 |
|
| 10 LONG TERM LOANS - considered good |
|
(Rupees) |
(Rupees) |
|
| Chief
Executive |
|
|
|
| Executives |
|
290,959,966 |
223,129,342 |
|
| Others |
|
|
54,617,027 |
67,830,624 |
|
|
|
345,576,993 |
290,959,966 |
|
| Less:
Current maturity |
|
|
48,989,000 |
- |
|
|
|
|
14,754,121 |
- |
|
| These
are analysed as follows : |
|
281,833,872 |
290,959,966 |
|
| Repayable
in one year |
|
|
|
|
| More
than one year |
|
275,757 |
2,668,757 |
|
|
|
|
1,416,767 |
3,815,971 |
|
| Maximum
aggregate amount outstanding |
|
3,039,997 |
2,855,833 |
|
| during
the year in respect of Chief Executive and Executives |
'4,732,521 |
9,340,561 |
|
|
|
|
579,485 |
996,513 |
|
| Loan
to the Chief Executive represents the outstanding balance of house loan given
in accordance with |
4,153,036 |
8,344,048 |
|
| terms
of employment. The loan carries a mark-up of 5% per annum and is repayable
within two years. |
|
|
| The
loan to the previous Chief Executive was settled in full. |
|
579,485 |
996,513 |
|
|
|
|
4,153,036 |
8,344,048 |
|
| Loans
to executives represent house, transport and personal loans granted in
accordance with Employees' |
4,732,521 |
9,340,561 |
|
| Service
Regulations. These are repayable within a period of 2 to 20 years and carry
mark-up at rates |
|
|
| ranging
between 5% to 7.5% per annum. |
|
6,426,431 |
7,459,188 |
|
|
| 11 LONG TERM INVESTMENTS |
|
|
| This
represents investment in 817,411 (June 2002: 760,436) ordinary shares of Rs.
10 each as 10% investment |
|
| in
the equity of Askari General Insurance Company Limited - an associated listed
company. The market value |
|
| of
investment as at June 30,2003 was Rs.12,342,906 (June 2002: Rs. 8,592,927). |
|
|
| Investment
in associated company is shown at cost .Had the equity method been applied,
the total profit for |
|
| the
year would have been higher by Rs. 1,239,552 (2002: Rs. 1,578,650) and the
carrying value of investment |
|
| would
have been Rs. 10.56 million (2002: Rs. 9.915 million). |
|
|
| INVESTMENT
PROPERTY |
|
|
|
|
|
| Gross
carrying value |
|
| Less:
Depreciation for the year and accumulated as at June 30 |
|
| Net
carrying value as at June 30, 2003 |
|
|
|
|
|
|
|
|
| 8.2 Receivable from associated undertakings |
|
2003 |
2002 |
|
| These
are made up as follows : |
|
(Rupees) |
(Rupees) |
|
| Army
Welfare Trust |
|
45,663,512 |
45,663,552 |
|
| Askari
General Insurance Co. Limited |
|
4,566,356 |
|
|
|
|
41,097*196' |
45,663,552 |
|
|
| The
maximum aggregate amount receivable at the end of any month during the year
from associated |
2003 |
2002 |
|
| undertakings
was Rs. 8,236,207 (2002: Rs. 9,058,214). |
|
(Rupees) |
(Rupees) |
|
|
|
|
|
|
| 8.3 This includes an amount of Rs. 978,830
(2002: Rs. 978,830) receivable from the State Bank of Pakistan |
|
| on
premature termination of foreign exchange risk contracts. |
7,561,754 |
7,561,754 |
|
|
|
|
674,453 |
674,453 |
|
|
|
8,236,207 |
8,236,207 |
|
| 9 NET INVESTMENT IN LEASE FINANCE |
|
2003 |
2002 |
|
| Minimum
lease payments |
|
(Rupees) |
(Rupees) |
|
| Add:
Residual value |
|
6,450,098,588 |
7,418,010,681 |
|
| Gross
Investment in lease finance |
|
1,125,831,839 |
1,097,338,975 |
|
| Less:
Unearned finance income |
|
7,575,930,427 |
8,515,349,656 |
|
| Net
investment in lease finance |
|
1,490,213,957 |
1,838,491,622 |
|
| Less:
Allowance for potential lease losses |
|
6,085,716,470 |
6,676,858,034 |
|
| Current
maturity |
|
281,833,872 |
290,959,966 |
|
|
|
|
1,872,715,829 |
2,064,318,440 |
|
|
|
|
2,154,549,701 |
2,355,278,406 |
|
|
|
|
3,931,166,769 |
4,321,579,628 |
|
| Disposal
of fixed assets during the year |
|
|
|
|
| Description |
Cost |
Accumulated |
Book |
Sale |
Proflt/(loss) |
Mode of |
Particulars of |
Note |
|
|
|
|
depreciation |
value |
proceeds |
on disposal |
disposal |
purchaser |
|
|
| Vehicles |
367,222 |
116,286 |
250,936 |
315,000 |
64,064 |
Negotiation |
Fayyaz Ahmed, Rawalpindi |
|
| Daihatsu
Coure |
281,000 |
201,383 |
79,617 |
218,950 |
139,333 |
Negotiation |
Zaka ur Rehman, Lahore |
|
| Suzuki
Mehran |
368,000 |
331,200 |
36,800 |
245,700 |
208,900 |
Lease |
Farhanjaved, Lahore |
|
| Suzuki
Mehran |
65,500 |
34,933 |
30,567 |
62,000 |
31,433 |
Insurance claim |
Askari General Insurance Company
Ltd. |
1311 |
|
| Honda
CD/70 |
649,000 |
475,933 |
173,067 |
580,000 |
406,933 |
Lease |
Adnan Rafique Khan,
Lahore |
|
| Toyota
Corolla |
351,335 |
117,112 |
234,223 |
320,000 |
85,777 |
Negotiation |
Syed Naveed
Abbas,Islamabad |
|
| Daihatsu
Coure |
405,645 |
405,645 |
- |
139,764 |
139,764 |
Company policy |
Qaseem Ahmed - Company
Executive |
| Suzuki
Khyber |
390,780 |
371,635 |
19,145 |
240,000 |
220,855 |
Insurance claim |
Askari General Insurance Company
Ltd. |
1311 |
|
| Suzuki
Khyber |
572,355 |
448,345 |
124,010 |
262,154 |
138,144 |
Company policy |
Taimur Afzal (Ex Chief
Executive Officer) |
| Suzuki
Baleno |
727,250 |
716,018 |
11,232 |
246,255 |
235,023 |
Company policy |
Taimur Afzal (Ex Chief
Executive Officer) |
| Honda
Civic |
419,000 |
153,633 |
265,367 |
330,000 |
64,633 |
Negotiation |
Zameer Haider Mirza,
Rawalpindi |
|
| Daihatsu
Coure |
60,770 |
60,770 |
- |
28,000 |
28,000 |
Negotiation |
Ghulam Sarwar, Peshawar |
|
| Honda
CD/70 |
431,598 |
115,093 |
316,505 |
340,000 |
23,495 |
Negotiation |
Malik M,Ikram,Sialkot |
|
| Daihatsu
Coure |
67,345 |
40,407 |
26,938 |
55,000 |
28,062 |
Insurance claim |
Askari General Insurance Company
Ltd. |
13.1.1 |
|
| Honda
CD/70 |
426,325 |
408,558 |
17,767 |
140,114 |
122,347 |
Company policy |
Aftab Ali Malik - Company
Executive |
|
| Suzuki
Khyber |
68,500 |
29,577 |
38,923 |
45,000 |
6,077 |
Negotiation |
Nasir Shahzad
Bhatti,Islamabad |
|
| Honda
CD/70 |
68,500 |
29,577 |
38,923 |
45,000 |
6,077 |
Negotiation |
Nasir Shahzad
Bhatti.Islamabad |
|
| Honda
CD/70 |
64,600 |
43,066 |
21,534 |
33,000 |
11,466 |
Insurance claim |
Askari General Insurance Company
Ltd. |
13.1.1 |
|
| Honda
CD/70 |
280,000 |
228,666 |
51,334 |
175,000 |
123,666 |
Insurance claim |
Askari General Insurance Company
Ltd. |
13.1.1 |
|
| Suzuki
Mehran |
419,000 |
188,550 |
230,450 |
325,000 |
94,550 |
Lease |
Ashfaq Ahmed, Rawalpindi |
|
| Daihatsu
Coure |
525,000 |
525,000 |
- |
183,770 |
183,770 |
Company policy |
Kashaf Faisal -Company
Executive |
|
| Suzuki
Margaila |
595,000 |
595,000 |
- |
208,250 |
208,250 |
Company policy |
Ayyaz Ahmed -Company
Executive |
|
| Toyota
Corolla |
65,500 |
39,300 |
26,200 |
60,000 |
33,800 |
Insurance claim |
Askari General Insurance Company
Ltd. |
1311 |
|
| Honda
CD/70 |
292,800 |
292,800 |
- |
170,000 |
170,000 |
Negotiation |
Anwar Kamal - Company
Executive |
|
| Suzuki
Alto |
65,500 |
39,300 |
26,200 |
62,000 |
35,800 |
Insurance claim |
Askari General Insurance Company
Ltd. |
1311 |
|
| Honda
CD/70 |
684,000 |
45,600 |
638,400 |
625,000 |
-13,400 |
Lease |
Maj(R)Tariq Hassan |
|
| Kia
Spectra |
8,711,525 |
6,053,387 |
2,658,138 |
5,454,957 |
2,796,819 |
|
|
|
|
| 13.1.1 Askari Commercial Bank Limited and Askari
General Insurance Company Limited are associated companies of |
|
| the
company. |
|
|
| The
gross carrying amount represents the appraised value plus transaction costs
related to property at Ellahi |
|
| Arcade,
26 Empress road Lahore, which has been taken over by the company for partial
adjustment of lease |
|
| facilities
to Gharibwal Cement Company Limited. Based on the valuation of M/S
Engineering Pakistan (Pvt) |
|
| Ltd,
the fair value of the investment property as at June 30,2003 is Rs. 44
million. Depreciation is being charged |
|
| i
per annum. |
|
|
| FDCEDASSCTS-TAMGIl |
|
|
|
| Particulars |
|
|
| Fixed
Assets - Own use |
|
| Leasehold
improvements |
|
|
| Furniture
and fixtures |
|
|
|
|
Cost |
Cost of |
Cost |
Accumulated |
Book Value |
Depreciation |
Rate of |
|
| Office
equipment |
as at |
additions |
as at |
depreciation as at |
as at |
for the year/ |
depreciation |
|
|
July 1,2002 |
(deletions) |
June 30, 2003 |
June 30, 2003 |
June 30, 2003 |
(on deletions) |
per annum |
|
| Computers |
|
adjustment |
|
|
|
| Motor
vehicles |
|
|
|
|
|
29,745,844 |
473,423 |
29,246,478 |
26,936,782 |
2,309,696 |
; J,dlQ,46S" |
33% |
|
|
|
-972,789 |
|
' (832,682) |
|
|
|
|
14,737,540 |
2,046,875 |
16,352,580 |
4,173,387 |
12,179,193 |
1,544,852 |
10% |
|
|
|
|
-431,835 |
|
-119,520 |
|
|
|
|
14,367,390 |
643,254 |
14,654,714 |
9,732,488 |
4,922,226 |
2,370,502 |
20% |
|
|
|
|
-355,930 |
|
-109,229 |
|
|
|
|
25,465,074 |
1,996,450 |
27,461,524 |
21,837,069 |
5,624,455 |
5,692,757 |
20%-33% |
|
| Union
Bank Limited |
21,816,949 |
8,707,178 |
21,812,602 |
8,300,799 |
13,511,803 |
3,754,095 |
20% |
|
| Muslim
Commercial Bank Limited |
|
-8,711,525 |
|
-6,053,387 |
|
|
| Muslim
Commercial Bank Limited |
106,132,797 |
13,867,180 |
109,527,898 |
70,980,525 |
38,547,373 |
16,372,674 |
|
|
| Islamic
Investment Bank Limited |
|
-7,114,818 |
|
|
| BankofKhyber |
|
| Union
Bank Limited |
|
|
|
|
2003 |
2002 |
|
|
|
|
Note |
(Rupees) |
(Rupees) |
|
|
|
|
|
|
2,569,052 |
|
|
|
|
17.1 |
52,800,000 |
88,000,000 |
|
| This
represents finance provided by the bank by discounting promissory notes of
Packages Limited. |
17.2 |
8,646,609 |
15,520,055 |
|
| The
facility is repayable in quarterly installments within a period of five years
commencing from January |
17.3 |
15,967,254 |
29,356,767 |
|
| 29,
2000 and carries a yield at last six months average Treasury Bills rate plus
2.0% per annum with a |
17.4 |
1001014 |
100,000,000 |
|
| cap
of 15.75%. This is secured against hypothecation of assets leased and
assignment of lease rentals |
17.5 |
6,491,111 |
10,986,527 |
|
| receivable
from Packages Limited. |
|
|
183,905,174 |
246,432,401 |
|
| This
represents a term finance facility of Rs. 25 million repayable in 20 equal
quarterly installments |
|
|
160,404,569 |
|
| begining
April 21, 2000. The facility carries a mark-up of 47.95 paisas per thousand
per diem and is |
|
1252 |
86,027,832 |
|
| secured
by first charge on specific leased assets and related receivables. |
|
| This
represents a term finance facility of Rs. 50 million repayable in 16 equal
quarterly installments |
|
| begining
July 24, 2000. The facility carries a mark-up of 49.32 paisas per thousand
per diem and is |
|
| secured
by first charge on specific leased assets and related receivables. |
|
|
| This
represents a term finance facility of Rs. 100 million repayable at maturity
on July 3, 2003. The facility |
|
| is
secured by first charge on specific leased assets and related receivables.
Mark-up is repayable in 12 |
|
| quarterly
installments at the following rates: |
|
|
| First
Year 38.36 paisas per
thousand per diem |
|
|
| Second
Year 39.73 paisas per
thousand per diem |
|
|
| Third
year 40.41 paisas per
thousand per diem |
|
|
| This
represents a term finance facility of Rs. 14 million repayable in 12 equal
quarterly installments. The |
|
| facility
carries a mark-up of 35.62 paisas per thousand per diem and is secured by
assignment of specific |
|
| lease
rentals. |
|
|
|
|
|
|
|
|
|
|
| CREDITORS,
ACCRUED AND OTHER LIABILITIES |
|
| Creditors |
|
|
| Advance
receipt against leases |
|
|
| Accrued
mark-up on secured loans |
|
|
| Accrued
mark-up on unsecured borrowings |
|
| Accrued
mark-up on certificates of investments |
|
| Provision
for taxation |
|
| Proposed
dividend |
|
2003 |
2002 |
|
| Unclaimed
dividend |
|
(Rupees) |
(Rupees) |
|
| Other
accrued liabilties |
|
29,875,421 |
25,662,810 |
|
|
248,019,023 |
259,074,241 |
|
|
|
7,195,395 |
3,992,920 |
|
| SHORT
TERM BORROWINGS |
|
2,587,397 |
- |
|
| Short
term borrowings represent overdraft facility and short term borrowings from commercial banks at |
62,257,450* |
91,724,091 |
|
| mark-up
rates ranging from 10.96 paisas to 19.18 paisas per
thousand per diem. The overdraft facility has a |
31,270,459 |
31,270,459 |
|
| limit
of Rs. 40 million and is secured by charge on specific leased assets and related receivables. |
48,600,000 |
- |
|
| This
represents term finance facilities obtained from banks at varying rates of mark-up ranging from 30.14 |
14141 |
3,158,316 |
|
| paisas
to 47.95 paisas per thousand per diem. These finances
are secured by charge on specific leased assets |
55225 |
20,366,049 |
|
| and
related receivables. |
|
435,248,886 |
|
|
|
General |
Reserve |
Deferred tax |
Reserve for |
Unrealized gain/ |
Total |
|
| Balance
as at July 1 |
Reserve |
Fund |
Reserve |
Contingencies |
(loss) on |
|
|
| Transferred
from (to) Profit |
|
(Note 21.1) |
(Note 21.2) |
(Note 21.3) |
to fair value |
|
|
| and
loss account |
41,000,000 |
120,027,057 |
112,900,000 |
105,000,000 |
|
378,927,057 |
|
| Effect
of remeasurement of |
-7,000,000 |
4,222,938 |
23,000,000 |
|
20,222,938 |
|
| available
for sale investment tc |
|
30,725,605 |
30,725,605 |
|
| fair
value held at the year end |
34,000,000 |
124,249,995 |
135,900,000 |
105,000,000 |
30,725,605 |
429,875,600 |
|
| Balance
as at June 30 |
|
|
|
|
| Reserve
fund |
|
| The
reserve fund is being maintained as pd' requirements of Rule 1(A) of
Prudential Regulations |
|
|
| for
Non-Banking Finance Companies Undertaking the Business of Leasing Only. |
|
| Deferred
tax reserve |
|
|
| Securities
and Exchange Commisssion of Pakistan (SECP), vide circular number 16 dated
September |
|
|
| 10,
1999 directed that in order to achieve compliance with International
Accounting Standard-12, all |
|
|
| leasing
companies during each of five financial years from July 01, 1998 to June 30,
2003 shall provide |
|
| for
deferred tax liability arising in that year together with an additional
amount equal to one fifth of |
|
| unprovided
deferred liability relating to the preceding years. If the amount to be
provided is transferred |
|
| to
a deferred tax reserve, it would be considered a compliance with the
requirements of IAS-12. |
|
| The
total deferred tax liability of the company as at June 30, 1999 amounted to
Rs. 159.3million and |
|
| in
accordance with the SECP circular No. 16 of September 10, 1999, an amount of
Rs. 23 million is being |
|
| transferred
to the deferred tax reserve annually for a period of five years. The deferred
tax liability at |
|
| June
30, 2003 does not exceed the amount transferred to the reserve. |
|
|
| Reserve
for contingencies |
|
|
| This
is a specific purpose reserve for contingencies which at present is not
available for distribution. |
|
|
|
|
| CONTINGENCIES
AND COMMITMENTS |
|
|
|
|
|
| The
company has given guarantee amounting to Rs. 100 Million to a commercial bank
on behalf of a lessee. |
|
| The
company has given undertakings for payments / issued purchase orders on
behalf of lessees of Rs. 10.68 |
|
| million
(2002: Rs. 4.70 million) for the assets to be leased by the company. |
|
|
|
|
| This
represents mobilisation of funds on profit and loss sharing basis under the
scheme of investment introduced |
|
| with
the permission of Securities and Exchange Commission of Pakistan. These
Certificates of investments |
|
| (COIs)
are issued for a period of three months to five years. Expected rate of
profit range from 5% to 16% per |
|
| annum. |
|
|
|
|
| DEPOSITS
ON LEASE CONTARCTS |
|
| Balance
as at June 30 |
|
| Less
: Current portion |
|
|
|
|
| Army Welfare Trust held 18,673,499
(2002:18,673,499) ordinary shares of Rs. 10 each as on June 30,2003. |
|
|
| RESERVES |
|
2003 |
2002 |
|
|
|
|
(Rupees) |
(Rupees) |
|
| This
includes Rs. 969,385 (2002: 832,244) charged on account of staff retirement
benefits. |
998,510,200 |
999,124,671 |
|
| The
directors and their spouses do not have any interest in the donee
institutions. |
277,305,884 |
315,477,419 |
|
|
|
|
721.8H3&, |
683,647,252 |
|
|
|
| Auditors'
remuneration |
|
| Annual
audit fee |
|
| Tax
advisory services |
|
|
| Other
certifications |
|
| Out
of pocket expenses |
|
| The
remuneration and other benefits to Chief Executive include Rs. 429,243 paid
to Ex Chief Executive. |
|
| Company
maintained cars are provided to the Chief Executive and certain Executives. |
|
|
|
|
2003 |
2002 |
|
| EARNING
PER SHARE - Basic |
|
140,000 |
140,000 |
|
| Net
profit for the year attributable to ordinary |
|
576,000 |
480,000 |
|
| shareholders |
|
130,000 |
28,700 |
|
| Weighted
average number of ordinary shares |
|
99,950 |
648,700 |
|
| outstanding
during the year |
|
945,950 |
4523 |
|
| Earnings
Per Share-Basic |
|
|
|
|
| LEASE
INCOME |
|
2003 |
2002 |
|
| Finance
lease income |
|
|
|
| Mark up on advance against lease |
Rupees |
|
1,140,551,024 |
14552 |
|
| Upfront
fee, penalties, gain on lease terminations etc |
|
44424 |
|
|
| Operating
lease income |
|
Numbers |
1,400,000 |
|
|
|
|
Rupees |
14552 |
|
| INCOME
FROM SHORT TERM INVESTMENTS |
|
| Return
on government securities |
|
2003 |
2002 |
|
| Profit
on term finance certificates |
|
(Rupees) |
(Rupees) |
|
| Mark
up on financing against deposits |
|
756,642,848 |
897,350,004 |
|
| Return
on placements |
|
1,227,956 |
11,481,469 |
|
| Dividend
on shares |
|
|
39,125,864 |
19,247,063 |
|
| Mark
up on advances to staff |
|
3,569,854 |
817,747 |
|
| Capital
gain on available for sale investments recycled from reserve |
800,566,522 |
928,896,283 |
|
| Capital
gain on sale of government securities |
|
|
|
|
|
|
104,04,721 |
86,005,082 |
|
| FINANCE
AND BANK CHARGES |
|
15,226,892 . |
15,846,106 |
|
| Profit
on certificates of investment |
|
|
4,680,370 |
6,086,464 |
|
| Mark-up
on long term bank borrowings |
|
. 6,587,727 |
5,068,346 |
|
| Mark-up
on short term bank borrowings |
|
2,367,216 |
- |
|
| Premium
on securities |
|
412,676 |
885,449 |
|
| Bank
charges and commission |
|
7,614,353 |
- |
|
|
|
|
98,260,875 |
66,507,273 |
|
| GENERAL
AND ADMINISTRATIVE EXPENSES |
|
239,197,830 |
180,398,720 |
|
| Salaries,
allowances and benefits |
|
|
|
| Rent |
|
|
694,828,471 |
872,566,177 |
|
| Staff
training |
|
|
30,595,171 |
39,509,282 |
|
| Travelling
and vehicle running |
|
|
12,048,169 |
26,069,573 |
|
| Insurance
of operating assets |
|
3,935,465 |
5,523,363 |
|
| Legal
and professional charges |
|
4,156,733 |
7,341,742 |
|
| Telephone
and utilities |
|
745,564,009 |
951,010,137 |
|
| Donations |
|
|
|
| Subscription |
|
|
39,154,940 |
46,605,312 |
|
| Auditors'
remuneration |
|
10,409,277 |
10,447,573 |
|
| Printing
and stationery |
|
155,476 |
384,936 |
|
| Depreciation |
|
3,516,332 |
4,977,566 |
|
| Repairs
and maintenance |
|
1,942,616 |
5,583,011 |
|
| Advertisement |
|
5,289,344 |
4,304,466 |
|
| Provision
for diminution in value of investments |
|
13,906,877 |
14,965,531 |
|
| Amortization
of deferred costs |
|
|
45,000 |
22,500 |
|
| General
expenses |
|
65,364 |
87,462 |
|
|
|
|
945,950 |
648,700 |
|
|
|
|
3,390,779 |
3,970,303 |
|
| INTEREST
RATE RISK EXPOSURE |
|
22,065,252 |
26,433,606 |
|
|
|
|
2,930,215 |
2,820,135 |
|
| The
company manages this risk by matching the repricing of assets and
liabilities. The company's interest |
6,739,798 |
5,902,463 |
|
| rate
sensitivity position, based on the earlier of contractual repricing or
maturity dates, is as under: |
- |
-389,385 |
|
|
|
|
- |
1,063,800 |
|
|
|
|
1,017,483 |
2,400,823 |
|
|
|
111,574,703 |
130,228,802 |
|
|
|
|
|
|
| FINANCIAL
ASSETS |
|
| Cash and bank balances |
|
| Money
market placements |
|
| Investments |
|
| Financing
against deposits |
|
2003 ( Rupees ) |
|
|
| Advances
and other |
Up to three |
Three months |
More than one |
More than |
Not exposed |
Total |
|
| receivables |
months |
to one year |
and less than |
five years |
to interest |
|
|
| Net
investment in lease finance |
|
five years |
|
rate risk |
|
|
| Long
term loans |
|
|
| Long
term investments |
138,951,961 |
129,371,709 |
- |
- |
- |
9,580,252 |
|
|
|
,1157,144 |
11,657,144 |
- |
- |
- |
- |
|
| HNANCM
LIABILITIES |
7322042 |
37,735,653 |
33,936,558 |
96,319,957 |
1,098,046,789 |
4,283,085 |
|
| Creditors
and other accrued liabilities |
123,884 |
- |
- |
- |
- |
21,862,884 |
|
| Short
term borrowings |
|
|
|
|
| Long
term loans |
998 |
31,007,873 |
- |
- |
- |
158,408,619 |
|
| Certificates
of investment |
6,85,7l6,47 |
564,353,301 |
1,308,362,528 |
4,213,000,641 |
- |
- |
|
| Deposits
on lease contracts |
4,732,321 |
144,870 |
434,615 |
2,173,075 |
1,979,961 |
- |
|
|
|
5,626,725 |
- |
- |
- |
- |
5,626,725 |
|
| On-balance
sheet gap |
7,728,216,239 |
774,270,550 |
1,364,596,585 |
4,311,494,673 |
1,100,026,750 |
177,898,681 |
|
| Total
interest rate sensitivity gap (Rs) |
|
|
|
|
|
| Cumulative
interest rate sensitivity ga| |
419,898,565 |
- |
- |
- |
- |
419,898,565 |
|
|
|
239,692,798 |
239,692,798 |
- |
- |
- |
- |
|
| The
effective markup/ interest/ profit rate for each
of the monetary financial instrument is as follows: |
183,905,174 |
114,807,358 |
45,988,826 |
23,108,990 |
- |
- |
|
|
|
4,916,267,340 |
146,596,618 |
558,179,008 |
4,211,491,714 |
- |
- |
|
|
|
998,510,200 |
- |
- |
- |
- |
998,510,200 |
|
|
6,758,274,077 |
501,096,774 |
604,167,834 |
4,234,600,704 |
- |
1,418,408,765 |
|
| FINANCIAL
ASSETS |
970,012,162 |
273,173,776 |
760,428,751 |
76,892,969 |
1,100,026,750 |
-1,240,510,084 |
|
| Cash
and bank balances |
|
273,173,776 |
760,428,751 |
76,892,969 |
1,100,026,750 |
|
|
| Money
market placements |
|
1,033,602,527 |
1,110,495,496 |
2,210,522,246 |
|
|
| Investments |
|
| Financing
against deposits |
|
| Advances
and other receivables |
|
| Net
investment in lease finance |
|
2003 |
2002 |
|
| Long
term loans |
|
Percent |
Percent |
|
|
|
|
|
|
| CREDIT
RISK AND CONVENTRATION OF CREDIT RISK. |
|
2.0% to 6.0% |
6.0% to 12.5% |
|
|
|
|
7.554 |
- |
|
| Credit
risk is the risk that one party to a financial instrument will fail to
discharge an obligation and cause the |
11.0% to 18.0% |
14.5% to 19.0% |
|
| other
party to incur a financial loss. The company has established procedures for
effective management of |
12 to 40% |
13.0% to 19.0% |
|
| credit
risk. These procedures are based on internal guide lines duly approved by the
Board of Directors and |
:5 % to 190% |
18.0% to 23.0% |
|
| external
guide lines as laid down by the Prudential Regulations for Non-Banking Finance Companies Undertaking |
7% to 23.6% |
12.7% to 25.0% |
|
| the
Business of Leasing Only. These procedures include monitoring of credit
exposure, assessment of credit |
12 to7.5% |
5.0% to 7.5% |
|
| worthiness
of clients, credit limits and assessment of the quality of assets leased. |
|
|
|
|
| Concentration
of credit risk arises when a number of counter parties are engaged in similar
business activities |
|
| or
activities in the same geographic region, or have similar economic features
which would cause their ability |
|
| to
meet contractual obligations to be similarly affected by changes in economic,
political or other conditions. |
|
| Concentration
of credit risk indicates the relative sensitivity of the Company's
performance to developments |
|
| affecting
a particular industry or geographic location. The company manages the risk of
credit concentration |
|
| by
diversifying its lease investment portfolio in various industrial and
geographic segments. |
|
| Sector
wise composition of lease portfolio is as follows: |
|
|
|
|
| SECTOR |
|
2003 |
Share |
2002 |
Share |
|
| Consumer
Facilities |
|
Rupees |
|
Rupees |
|
| Textiles
and allied |
|
273,382,377 |
44% |
2,939,640,098 |
44.03% |
|
| Energy,
Oil and Gas |
|
9,079,785 |
|
883,596,249 |
13.23% |
|
| Miscellaneous |
|
549, 2,700 |
9.03% |
508,607,709 |
7.62% |
|
| Security
Services |
|
46,890,837 |
7.73% |
424,853,057 |
6.36% |
|
| Chemical,
Pharmaceutical and Fertilizers |
315,313,414 |
|
505,850,280 |
7.58% |
|
| Cement |
|
317,858,644 |
1422 |
218,107,492 |
3.27% |
|
| Food,
Tobacco and Beverages |
|
233,861,936 |
4532 |
173,335,031 |
2.60% |
|
| Sugar
and Allied |
|
155,780,528 |
2.56% |
229,519,436 |
3.44% |
|
| Paper
and Board |
|
110,12^936 |
f.81% |
180,893,214 |
2.71% |
|
| Steel,
Engineering and Automobiles |
|
969,454 |
1.56% |
129,728,884 |
1.94% |
|
| Financial
Institutions |
|
49,022,212 |
0.81% |
86,768,271 |
1.30% |
|
| Electrical
and Electrical Goods |
|
31,459,793 |
0.35% |
220,339,670 |
3.30% |
|
| Glass
and Ceramics |
|
21,087,593 |
0.35% |
65,268,042 |
0.98% |
|
| Hotels |
|
20,730,898 |
0.34% |
31,666,013 |
0.47% |
|
| Transport
and Communication |
|
19,444,221 |
0.32% |
24,578,208 |
0.37% |
|
| Constructions |
|
16,242,147 |
0.27% |
28,597,030 |
0.43% |
|
| Leather
and Footwear |
|
7,125,489 |
0.12% |
6,950,602 |
0.10% |
|
| Health
Care |
|
4,052,903 |
0.07% |
3,430,763 |
0.05% |
|
| Banaspati
and Allied Industries |
|
3,053,215 |
0.05% |
9,385,351 |
0.14% |
|
| Dairyjmd
Poultry |
|
2,077,242 |
0.03% |
4,043,241 |
0.06% |
|
|
|
|
0.021 |
99,393 |
0.03% |
|
|
|
6,085,716,470 |
100.00% |
6,676,858,034 |
100.00% |
|
|
|
|
|
|
|
|
| In
addition, the company has invested in Government Securities and Term Finance
Certificates. For detail refer |
|
| note
6. |
|
|
|
|
|
| FAIR
VALUE OF FINANCIAL INSTRUMENTS |
|
|
|
|
| Carrying
value of financial instruments approximates the fair value except for
investment in associated |
|
| undertaking
as given in note 11. |
|
|
|
|
|
|
|
| CASH
AND CASH EQUIVALENT |
|
| Cash
and Bank balances |
|
|
| Bank
overdraft - secured |
|
|
|
|
| TAXATION |
|
|
|
|
2003 |
2002 |
|
| Income
tax authorities have finalized tax assessments of the company up to and
including the assessment year |
(Rupees) |
(Rupees) |
|
| 2000
-2001 (income year ended 30 June 2000) creating tax demands aggregating Rs.
74.6 million. The company |
|
| successfully
contested the assessment orders before the appellate authorities on the principle issue related |
138,951,961 |
206,573,112 |
|
| to
allowance for depreciation on leased assets. The Income Tax Appellate
Tribunal ("ITAT") disapproved the |
-39,692,798 |
- |
|
| departmental
view for assessments relating to the assessment years 1994-95,1995-96 & 1996-97. Reference |
99,259,163 |
206,573,112 |
|
| applications
of the tax department filed before the ITAT, against their appellate orders
have also been rejected |
|
| by
the ITAT. Appeals for the assessment years 1997-98,1998-99 and 1999-2000 were
accepted by the Commissioner |
|
| of
Income Tax (Appeals) on the principal issue relating to allowance for
depreciation on leased asssets. The |
|
| company
and the tax department have filed appeals before the Income Tax Appellate
Tribunal against the |
|
| appellate
orders of the Commissioner of Income Tax (Appeals) for issues not decided in
their favour. |
|
|
| The
assessing officer had also held the company assesssee in default for not
withholding tax on certain lease |
|
| transactions
for the assessment year 1996-97 and created tax demand of Rs. 19 million. The
company successfully |
|
| appealed
the order before the Commissioner of Income Tax (Appeals) (CIT(A)) who
deleted the entire demand. |
|
| Against
the appelate order of the CIT(A) the departmental appeal has also been
rejected by the ITAT. Later, |
|
| the
assessing officer raised tax demand of Rs. 74.5 million on similar issues in
relation to the assessment years |
|
| 1994-95,1995-96,1997-98
and 1998-99. The company is contesting this demand before the appellate
authorities |
|
| and
the management is hopeful for a favourable outcome of related appeals. |
|
|
| Pursuant
to a show cause notice issued by the sales tax authorities for recovery of
sales tax of on leases disbursed |
|
| by
the company, the Collector (Adjudication) of the Sales Tax raised a tax
demand of Rs. 204 million against |
|
| the
company. The company is contesting the order of the Collector (Adjudication)
of the Sales Tax before the |
|
| Sales
Tax Appellate Tribunal. The management is hopeful for a favourable outcome of
the appeal. |
|
|
| GENERAL |
|
|
| Figures
have been rounded off to the nearest rupees |
|
|
|
|
|
|
|
|
|
