| Capital Assets Leasing Corporation Limited |
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| Annual
Report 2000 |
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| CONTENTS |
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| Corporate
Information |
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| Notice
of Meeting |
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| Directors'
Report |
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| Pattern
of Shareholding |
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| Auditors'
Report |
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| Balance Sheet |
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| Profit
& Loss Account |
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| Cash
Flow Statement |
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| Notes
to the Accounts |
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| CORPORATE
INFORMATION |
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| Board
of Directors |
|
Mr. Salman Qureshi
(Chairman) |
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|
Mr. Nisar A. Memon |
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Mr. Mohammad Kalim |
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Mr. Ilyas Mohsin |
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Mr. Aamir Qureshi |
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Mr. Anwar Shaft |
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Mr. Jehangir Shah |
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| Chief
Executive Officer |
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Mr. Jehangir Shah |
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| Company
Secretary |
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Mr. Rizwan Akhtar |
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| Auditors |
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M/s Ebrahim & Company |
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Chartered Accountants |
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2nd Floor, Block
"C" |
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Lakson Square Building |
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Sarwar Shaheed Road,
Karachi. |
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| Registrars
& Share Transfer Office |
M/s Softlink (Pvt.)
Limited |
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Wings Arcade, 1-K
(Commercial) |
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Model Town, Lahore. |
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Tel.# 5839180-2
Fax#5837061 |
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| Legal Advisors |
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M/s Mohsin Tayebally
& Co., Advocates |
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M/s Rizvi, Isa & Co.,
Advocates |
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| Main Bankers |
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ABN Amro Bank |
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Askari Commercial Bank
Limited |
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Gulf Commercial Bank
Limited |
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National Bank of Pakistan |
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Platinum Commercial Bank
Limited |
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Prime Commercial Bank
Limited |
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Union Bank Limited |
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| Registered
Office |
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10/1 l-B, 3rd Floor, LDA
Flats |
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Lawrence Road, Lahore. |
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Telephone # 631 1604-5 |
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Fax#6370017 |
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Email:
calcorp@nexlinx.net.pk |
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| Branch Office |
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43/10/G, Block-VI |
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Dr. Mehmood Hussain Road, |
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PECHS, Karachi. |
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Telephone # 4544115-6 |
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Fax # 4523822 |
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Email:
calcorp@cyber.net.pk |
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| NOTICE
OF 8TH ANNUAL GENERAL MEETING |
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| Notice
is hereby given that the eighth (8th) Annual General Meeting of the
Shareholders of |
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| CAPITAL
ASSETS LEASING CORPORATION LIMITED will be held at the Registered Office of |
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| the
Company located at 10/11-B, 3rd Floor, LDA Flats, Lawrence Road, Lahore on
Friday, 15th |
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| December
2000 at 10:30 a.m. to transact the following business: |
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| 1.
To confirm the minutes of 7th Annual General Meeting of the company held on |
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| December
30, 1999. |
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| 2.
To receive, consider and adopt the Audited Accounts of the Company for the
year |
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| ended
June 30, 2000 together with the Directors' and Auditors' Reports thereon. |
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| 3.
To appoint Auditors of the Company and to fix their remuneration. The present |
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| Auditors
M/s Ebrahim & Company Chartered Accountants, retire and being eligible |
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| offer
themselves for reappointment. |
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| Special
Business |
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| 4.
To approve the remuneration of Chief Executive. |
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| 5.
To transact any other business with the permission of the Chair. |
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BY ORDER OF THE BOARD |
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| Lahore |
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|
(Rizwan Akhtar) |
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| November 24, 2000 |
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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 7th December |
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| 2000
to 15th December, 2000 (both days inclusive). |
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| 2.
A member eligible to attend and vote at this Meeting is entitled to appoint
another |
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| member
as his/her proxy to attend and vote instead of him/her. A proxy must be a |
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| member
of the company. Proxies in order to be effective, must be received at the |
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| Registered
Office of the Company not less than 48 hours before the time of Meeting. |
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|
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| 3.
Any individual/beneficial owner of Central Depository Company (CDC), entitled
to |
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| vote
at this meeting must bring his/her National Identity Card to prove his/her |
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| identity.
In case of proxy must enclose an attested copy of his/her National Identity |
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| Card.
Representatives of corporate members should bring the usual documents |
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| required
for such purpose |
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| 4.
A Statement under Section 160 of Companies Ordinance 1984 pertaining to the |
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| Special
Business is being sent to the shareholders along with this notice. |
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| 5.
Members are requested to notify the changes of address, if any, to the
Company's |
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| Share
Registrars M/s. Softlink (Pvt.) Ltd. Wings Arcade, 1-K (Commercial) |
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| Model
Town Lahore, immediately. |
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| DIRECTORS'
REPORT |
|
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| The
Board of Directors is pleased to place before the Shareholders the 8th Annual
Report of the |
|
| Company
together with its Accounts for the year ended June 30, 2000. |
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| Financial
Results: |
|
Rupees in
thousand |
|
|
| Gross revenues |
|
29,577 |
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| Total expenses |
|
25,836 |
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|
------------------ |
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| Operating
profit for the year |
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3,741 |
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| Provisions |
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| For
potential losses (Lease) |
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|
3,377 |
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| For
potential losses (Morabaha/short-term) |
|
(2,950) |
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| For
potential losses (Other receivables) |
|
463 |
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| For
taxation (including Deferred Taxation) |
|
311 |
1,201 |
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------------------ |
------------------ |
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| Profit
after taxation |
|
2,540 |
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| Unappropriated
profit brought forward |
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22,170 |
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------------------ |
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| Profit
available for appropriation |
|
24,710 |
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| Appropriations |
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| Transfer
to statutory reserves @ 20% |
|
508 |
508 |
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------------------ |
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| Unappropriated
profit carried forward |
|
24,202 |
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|
------------------ |
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| Review
of Operations: |
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| During
the year under review, your company's Balance Sheet has grown to Rs.261
million and we are |
|
| pleased
to point out that the company is showing steady growth in balance sheet size.
126 lease |
|
| contracts
were signed. Gross lease disbursements totaled Rs. 120.65 million. Net yield
on the lease |
|
| portfolio
for the year was 23.35%. Short term financing facilities extended during the
year were to the |
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| tune
of Rs. 10.485 million. The management ensured that minimum 70% funds were
deployed in |
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| leasing
business as per rules. During the year under review leasing operations
contributed the largest |
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| revenue,
Rs.28.76 million towards the profit of the company. |
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| Your
Directors are pleased to inform you that the company has continued to market
for quality |
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| business
and adhered to its strict standards for evaluating proposals, a policy which
is helping to keep |
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| its
lending portfolios healthy. |
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| Fresh
lease disbursements were made both to existing lessees with good track
records and new |
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| lessees
having market reputation. The assets leased during the year were mainly
vehicles, both |
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| commercial
& private, and also machinery and equipment. Our support to the Education
and |
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| Information
Technology sectors continue with very encouraging results. |
|
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| Though
the general economic and business activities remained weak during the year
despite the |
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| Governments
efforts to encourage the business community and investors, your company's
balance |
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| sheet
continued to grow |
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| The
pace of recoveries continued to be accelerated, and again during the year
under review overall |
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| satisfactory
recoveries were made. Where legal action was necessitated, such action had
been |
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| initiated
and we are pleased that favourable decrees are being awarded to us by the
Courts based on |
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| strong
documentation and assets strength. |
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| Resource
Mobilization: |
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| Our
creditor financial institutions continue to support us and our relationships
are being stronger. The |
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| management
ensures that the company's commitments are met on time. |
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| We
received permission to launch our Certi£1cates of Investment in June, and
this is expected to be a |
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| profitable
source for resource mobilization due to their economic cost factor. |
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| Regular
lease rental receipts were also a major source of resource mobilization. |
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| Entity Rating: |
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| DCR-VIS
Credit Rating Company completed our Entity Rating. We are pleased to inform
you that |
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| the
company has obtained the following ratings:- |
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| Medium
to Long Term: |
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BBB- |
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| Short Term: |
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D3 |
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| These
are satisfactory ratings and qualify the entity / issue as to investment
grade. |
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| Future
Outlook: |
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| Business
activity is picking up as the overall economic scenario emerges clearer
especially due to the |
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| Governments
efforts to encourage investment. As activity picks-up so also do financial
institutions |
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| become
active. We are encouraged by the fact that the year just ended had a very
satisfactory ending |
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| and
we are positive the new financial year would be even better for us. |
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| Leasing
business has now become a popular mode for acquisition and financing of
assets and we |
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| expect
it to continue to grow in demand, resulting in further growth of the sector,
of which your |
|
| company
is an active part. |
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|
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| The
issue of increase in Paid-up Capital to Rs 200 million by leasing companies
is to be addressed by |
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| the
Board and Shareholders during this financial year. The Securities &
Exchange Commission |
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| requires
the affected companies to raise their Capital by June 30th, 2001. However the |
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| circumstances
in the capital markets prevalent presently and the overall state of economy
make it a |
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| major
challenge to be successfully handled. We are also in contact with the Leasing
Association of |
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| Pakistan
on this matter. |
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| We
assure you your Directors and the company's management are fully aware and
conscious of their |
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| responsibilities
towards their shareholders interests, the company's growth and the country's |
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| prosperity,
and are working keeping these in focus. |
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| Board
of Directors: |
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| Choudhry
Fazal-i-Hussain resigned as a Director of the company and Mr. Ilyas Mohsin
was inducted |
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| to
complete remainder of the tenure. |
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| Auditors: |
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| The
Company's Auditors M/s Ebrahim & Company, Chartered Accountants, retire
and being eligible |
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| offer
themselves for re-appointment. |
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| Acknowledgments: |
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| We
take this opportunity to thank our valued clients, shareholders, creditor
financial institutions, the |
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| Securities
& Exchange Commission of Pakistan, State Bank of Pakistan, Leasing
Association of |
|
| Pakistan
and all three Stock Exchanges of Pakistan, for their continued support and
guidance. The |
|
| Board
expresses its appreciation and thanks to the management and staff of the
company for their |
|
| commitment
and dedicated hard work without which these results would not have been
possible. |
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| Pattern
of Shareholding: |
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| Pattern
of shareholding as on June 30th 2000 is annexed to this report. |
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|
On behalf of the Board of Directors |
|
|
|
|
|
|
|
|
Jehangir Shah |
|
Salman Qureshi |
|
| Lahore |
|
|
Managing Director & |
|
Chairman |
|
| November
15, 2000 |
|
Chief Executive |
|
|
|
|
| PATTERN
OF HOLDING OF SHARES |
|
| HELD
BY THE SHAREHOLDERS AS AT 30TH JUNE 2000 |
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| No. of |
Shareholding |
Total |
|
| shareholders |
From |
To |
shares held |
|
|
|
| 31 |
1 |
100 |
2900 |
|
|
| 425 |
101 |
500 |
198100 |
|
|
| 128 |
501 |
1000 |
118050 |
|
|
| 123 |
1001 |
5000 |
288000 |
|
|
| 16 |
5001 |
10000 |
132500 |
|
|
| 6 |
10001 |
15000 |
76000 |
|
|
| 1 |
15001 |
20000 |
18000 |
|
|
| 6 |
20001 |
25000 |
136750 |
|
|
| 1 |
25001 |
30000 |
30000 |
|
|
| 1 |
30001 |
35000 |
30500 |
|
|
| 1 |
35001 |
40000 |
40000 |
|
|
| 1 |
45001 |
50000 |
50000 |
|
|
| 2 |
95001 |
100000 |
200000 |
|
|
| 1 |
115001 |
120000 |
116600 |
|
|
| 1 |
140001 |
145000 |
143000 |
|
|
| 1 |
145001 |
150000 |
150000 |
|
|
| 1 |
160001 |
165000 |
164600 |
|
|
| 1 |
165001 |
170000 |
168300 |
|
|
| 1 |
200001 |
205000 |
203800 |
|
|
| 1 |
265001 |
270000 |
269300 |
|
|
| 2 |
370001 |
375000 |
750000 |
|
|
| 2 |
385001 |
380000 |
771700 |
|
|
| 1 |
450001 |
455000 |
455000 |
|
|
| 1 |
495001 |
500000 |
499500 |
|
|
| 1 |
1610001 |
1615000 |
1611350 |
|
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|
------------------ |
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|
|
6623950 |
|
|
|
------------------ |
|
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| With
Central Depository Company of Pakistan |
|
|
| 2 |
1 |
100 |
200 |
|
|
| 29 |
101 |
500 |
14250 |
|
|
| 26 |
501 |
1000 |
25000 |
|
|
| 41 |
1001 |
5000 |
100550 |
|
|
| 6 |
5001 |
10000 |
36500 |
|
|
| 4 |
10001 |
15000 |
48800 |
|
|
| 1 |
15001 |
20000 |
16500 |
|
|
| 1 |
25001 |
30000 |
27000 |
|
|
| 2 |
45001 |
50000 |
95150 |
|
|
| 1 |
55001 |
60000 |
59000 |
|
|
| 1 |
75001 |
80000 |
77500 |
|
|
| 2 |
125001 |
130000 |
257000 |
|
|
| 1 |
145001 |
150000 |
150000 |
|
|
| 1 |
195001 |
200000 |
199500 |
|
|
| 1 |
245001 |
250000 |
250000 |
|
|
| 1 |
250001 |
255000 |
254400 |
|
|
| ------------------ |
|
------------------ |
|
|
| 120 |
|
1611350 |
|
|
| ========== |
|
========== |
|
|
|
|
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|
|
| Categories
of Shareholders (including CDC) |
Number |
Share Held |
Percentage |
|
|
|
|
| 1. Individuals |
|
843 |
3310350 |
49.975 |
|
| 2.
Investment Companies |
|
3 |
79300 |
1.197 |
|
| 3.
Insurance Companies |
|
3 |
205050 |
3.096 |
|
| 4.
Joint Stock Companies |
|
9 |
14700 |
0.222 |
|
| 5.
Financial Institution |
|
14 |
2057550 |
31.062 |
|
| 6.
Modaraba Companies |
|
1 |
500 |
0.008 |
|
| 7.
Leasing Companies |
|
1 |
2000 |
0.030 |
|
| 8. Others |
|
2 |
954500 |
14.410 |
|
|
|
------------------ |
------------------ |
------------------ |
|
| Total |
|
876 |
6623950 |
100.00 |
|
|
|
========== |
========== |
========== |
|
|
|
|
|
|
| Others |
|
| Association |
|
|
| Abandoned
Property |
|
-- |
-- |
-- |
|
| Governments
Authorities |
|
-- |
-- |
-- |
|
| Modarbas
Management |
|
-- |
-- |
-- |
|
| Non-Resident |
|
|
-- |
-- |
-- |
|
| Foreign
Company |
|
-- |
-- |
-- |
|
| Trust |
|
2 |
954500 |
14.41 |
|
|
|
------------------ |
------------------ |
------------------ |
|
| Total |
|
2 |
954500 |
14.41 |
|
|
========== |
========== |
========== |
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed balance sheet of CAPITAL ASSETS
LEASING CORPORATION |
|
| LIMITED as at June 30, 2000 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 purposes 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 arc free of any material misstatement. An audit includes
examining, on a 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 above said statements. We believe that our audit
provides a |
|
| reasonable
basis for our opinion and, after due verification, we report that: |
|
|
| a)
in our opinion, proper books of accounts have been kept by the Company as
required by the |
|
| Companies
Ordinance, 1984; |
|
|
|
|
|
|
| b)
in our opinion: |
|
|
|
|
|
|
| i)
the balance sheet and profit and loss account together with the notes thereon
have |
|
| been
drawn up in conformity with the Companies Ordinance, 1984, and are in |
|
| agreement
with the books of account and are further in accordance with accounting |
|
| policies
consistently applied except for the change as explained in note 2.4 with |
|
| which
we concur; |
|
|
|
|
| ii)
the expenditure incurred during the year was for the purpose of the Company's |
|
| business; and |
|
|
|
|
|
|
| iii)
the business conducted, investments made and the expenditure incurred during
the |
|
| year
were in accordance with the objects of the Company; |
|
|
| c)
in our opinion and to the best of our information and according to the
explanations given to |
|
| us,
the balance sheet, profit and loss account, 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's affairs as at June 30, 2000 and of the profit, its cash
flows and changes |
|
| in
equity for the year then ended; and |
|
|
|
|
|
| d)
in our opinion, no Zakat was deductible at source under the Zakat and Ushr
Ordinance, 1980. |
|
|
| Karachi |
|
|
Ebrahim & Company. |
|
| November
15, 2000 |
|
Chartered Accountants |
|
|
|
|
|
|
|
| BALANCE
SHEET AS AT JUNE 30, 2000 |
|
|
|
|
2000 |
1999 |
|
|
NOTE |
Rupees |
Rupees |
|
|
| SHARE
CAPITAL AND RESERVES |
|
| Authorised
capital |
|
| 10,000,000
ordinary shares of |
|
| Rs. 10 each |
|
|
100,000,000 |
100,000,000 |
|
|
|
|
========== |
========== |
|
| Issued,
subscribed and paid-up capital |
|
| 6,623,950
ordinary shares of |
|
| Rs.10
each fully paid in cash |
|
|
66,239,500 |
66,239,500 |
|
| Reserves |
|
|
3 |
8,120,448 |
7,612,407 |
|
| Unappropriated
profit |
|
24,201,855 |
22,169,693 |
|
|
|
|
------------------ |
------------------ |
|
|
98,561,803 |
96,021,600 |
|
|
| LONG
TERM LOANS |
|
4 |
10,416,668 |
-- |
|
|
|
|
|
|
| LIABILITIES
AGAINST ASSETS |
|
|
|
| SUBJECT
TO FINANCE LEASE |
5 |
3,078,729 |
659,831 |
|
|
|
|
|
|
| DEFERRED
LIABILITIES |
|
6 |
2,920,770 |
3,197,170 |
|
| LONG
TERM DEPOSITS |
|
7 |
25,796,929 |
25,252,421 |
|
| CURRENT
LIABILITIES |
|
|
|
| Current
portion of long term liabilities |
8 |
28,775,990 |
19,219,928 |
|
| Short
term loans and running finances |
9 |
82,513,755 |
58,367,704 |
|
| Creditors,
accrued and other liabilities |
10 |
6,306,378 |
5,721,938 |
|
| Provision
for taxation |
|
|
1,467,000 |
1,430,351 |
|
| Dividend |
|
11 |
885,415 |
3,854,481 |
|
|
|
------------------ |
------------------ |
|
|
|
119,948,538 |
88,594,402 |
|
| CONTINGENCIES
AND COMMITMENTS |
12 |
|
|
------------------ |
------------------ |
|
|
|
260,723,437 |
213,725,424 |
|
|
|
========== |
========== |
|
| TANGIBLE
FIXED ASSETS |
|
13 |
6,832,040 |
4,090,303 |
|
|
|
|
|
|
|
|
| INVESTMENTS
IN LEASE AND HIRE |
|
|
|
|
| PURCHASE
FINANCES |
|
14 |
102,577,245 |
76,622,351 |
|
|
|
|
|
|
|
|
| LONG
TERM INVESTMENTS |
|
15 |
250,000 |
250,000 |
|
|
| LONG
TERM ADVANCES |
|
16 |
8,366,568 |
-- |
|
|
| LONG
TERM DEPOSITS AND DEFERRED COST |
17 |
1,012,400 |
636,712 |
|
|
|
|
|
|
|
|
| CURRENT
ASSETS |
|
|
|
| Current
portion of long term investment in lease, |
|
| hire
purchase finance and long term advance |
18 |
105,826,622 |
89,941,348 |
|
| Morabaha
and short term finances |
19 |
10,766,740 |
20,401,060 |
|
| Advances,
deposits, prepayments and other |
|
|
|
| receivables |
|
20 |
6,065,163 |
5,048,111 |
|
| Cash
and bank balances |
|
21 |
19,026,659 |
16,735,539 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
141,685,184 |
132,126,058 |
|
|
------------------ |
------------------ |
|
|
|
260,723,437 |
213,725,424 |
|
|
========== |
========== |
|
| NOTE:
The annexed notes from an integral part of these accounts. |
|
|
|
Salman Qureshi |
|
Jehangir Shah |
|
Aamir Qureshi |
|
|
Chairman |
|
Managing Director/CEO |
|
Director |
|
|
|
| PROFIT
AND LOSS ACCOUNT |
|
| FOR
THE YEAR ENDED JUNE 30, 2000 |
|
|
|
|
|
2000 |
1999 |
|
|
NOTE |
Rupees |
Rupees |
|
|
| Income
from leasing operations |
|
22 |
28,759,942 |
25,651,892 |
|
|
| Other income |
|
23 |
817,267 |
5,859,068 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
29,577,209 |
31,510,960 |
|
|
|
|
------------------ |
------------------ |
|
|
| Administrative
and operating expenses |
24 |
15,374,308 |
13,108,210 |
|
|
| Financial
charges |
|
25 |
10,461,691 |
9,003,344 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
25,835,999 |
22,111,554 |
|
|
|
|
------------------ |
------------------ |
|
|
| Operating
profit before provisions |
|
3,741,210 |
9,399,406 |
|
|
|
|
|
|
| Provision/(reversal
of provision) for losses |
|
|
|
| For
lease transactions |
|
|
3,376,863 |
(986,300) |
|
|
| For
morabaha and short term finances |
|
(2,950,000) |
3,272,500 |
|
|
| For
other receivables |
|
|
463,007 |
-- |
|
|
|
|
|
------------------ |
------------------ |
|
|
|
889,870 |
2,286,200 |
|
|
|
------------------ |
------------------ |
|
|
| Operating
profit for the year |
|
2,851,340 |
7,113,206 |
|
|
|
|
|
|
| Provision
for taxation |
|
|
|
| Current year |
|
|
26 |
455,000 |
402,000 |
|
|
| Prior year |
|
|
62,137 |
234,099 |
|
|
| Deferred |
|
|
(206,000) |
3,059,000 |
|
|
|
|
|
------------------ |
------------------ |
|
|
|
311,137 |
3,695,099 |
|
|
|
------------------ |
------------------ |
|
|
| Net
profit after taxation |
|
2,540,203 |
3,418,107 |
|
|
| Unappropriated
profit brought forward |
|
22,169,693 |
22,747,182 |
|
|
|
------------------ |
------------------ |
|
|
| Profit
available for appropriation |
|
24,709,896 |
26,165,289 |
|
|
|
|
|
|
| Appropriations |
|
|
|
| Proposed
dividend at Nil (1999: 5%) |
|
-- |
3,311,975 |
|
|
| Transfer
to reserves |
|
508,041 |
683,621 |
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
508,041 |
3,995,596 |
|
|
|
|
|
------------------ |
------------------ |
|
|
| Unappropriated
profit carried forward |
|
24,201,855 |
22,169,693 |
|
|
|
========== |
========== |
|
|
| EARNINGS
PER SHARE |
|
27 |
0.38 |
0.52 |
|
|
|
|
========== |
========== |
|
|
|
| NOTE:
The annexed notes form an integral part of these accounts. |
|
|
|
Salman Qureshi |
|
Jehangir Shah |
|
Aamir Qureshi |
|
|
Chairman |
|
Managing Director/CEO |
|
Director |
|
|
|
|
| STATEMENT
OF CHANGES IN FINANCIAL POSITION |
|
| (CASH
FLOW STATEMENT) FOR THE YEAR ENDED JUNE 30, 2000 |
|
|
|
|
|
2000 |
1999 |
|
|
|
|
Rupees |
Rupees |
|
|
|
|
|
| CASH
FLOW FROM OPERATING ACTIVITIES |
|
| Profit
before taxation |
|
2,851,340 |
7,113,206 |
|
|
| Adjustments
for non cash charges/(credit) and other items |
|
|
|
| Gratuity |
|
6,400 |
-- |
|
|
| Depreciation |
|
2,020,077 |
1,396,649 |
|
|
| (Gain)
on disposal of fixed assets . |
|
(467,994) |
(378,034) |
|
|
| Amortization
of deferred cost |
|
122,122 |
149,651 |
|
|
| Financial
charges |
|
10,461,691 |
9,003,344 |
|
|
| Provision
for losses |
|
889,870 |
2,286,200 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
15,883,506 |
19,571,016 |
|
|
| (Increase)
in current assets |
|
|
|
|
| Advances,
prepayments and other receivables |
|
(1,359,785) |
(397,200) |
|
|
|
| (Decrease)/increase
in current liabilities |
|
| Creditors,
accrued and other liabilities |
|
798,121 |
(3,721,249) |
|
|
|
------------------ |
------------------ |
|
| Cash
generated from operations |
|
15,321,842 |
15,452,567 |
|
|
| Financial
charges paid |
|
(10,675,372) |
(6,954,641) |
|
| Tax paid |
|
|
|
(612,061) |
(524,144) |
|
| Gratuity paid |
|
|
|
-- |
(85,834) |
|
| Net
investment in lease and hire purchase finances |
(38,650,419) |
(20,856,114) |
|
| Morabaha
and short term finances |
|
(2,348,810) |
(2,286,190) |
|
| Lease
security deposits |
|
|
293,570 |
6,238,786 |
|
|
|
|
|
------------------ |
------------------ |
|
| Net
cash from operating activities |
|
(36,671,250) |
(9,015,570) |
|
|
| CASH
FLOW FROM INVESTING ACTIVITIES |
|
| Addition
to fixed assets |
|
(381,421) |
(963,478) |
|
| Proceeds
from sale of fixed assets |
|
1,003,500 |
384,530 |
|
| Long
term deposits |
|
(497,810) |
(243,410) |
|
|
|
------------------ |
------------------ |
|
| Net
cash from investing activities |
|
124,269 |
(822,358) |
|
|
|
|
|
|
| CASH
FLOW FROM FINANCING ACTIVITIES |
|
| Repayment
of liabilities against assets subject to finance lease |
(1,088,884) |
(33,315) |
|
| Dividend
and Zakat paid |
|
|
(2,969,066) |
(630,090) |
|
| Short
term loans and running finances |
|
24,146,051 |
10,876,670 |
|
| Long
term loans |
|
|
18,750,000 |
-- |
|
|
------------------ |
------------------ |
|
| Net
cash from financing activities |
|
38,838,101 |
9,915,265 |
|
|
|
|
------------------ |
------------------ |
|
| Net
increase in cash and cash equivalents |
|
2,291,120 |
77,337 |
|
| Cash
and cash equivalents at the beginning of the year |
16,735,539 |
16,658,202 |
|
|
|
|
------------------ |
------------------ |
|
| Cash
and cash equivalents at the end of the year |
|
19,026,659 |
16,735,539 |
|
|
========== |
========== |
|
|
|
|
|
| STATEMENT
OF CHANGES IN EQUITY |
|
| FOR
THE YEAR ENDED JUNE 30, 2000 |
|
|
|
ISSUED |
|
UNAPPRO- |
|
|
|
SUBSCRIBED |
|
PRIATED |
|
|
|
AND PAID UP |
RESERVES |
PROFIT |
TOTAL |
|
|
CAPITAL |
|
|
|
| Balance
as at June 30, 1998 |
66,239,500 |
6,928,786 |
22,747,182 |
95,915,468 |
|
| Profit
after taxation |
-- |
-- |
3,418,107 |
3,418,107 |
|
| Transfer
to reserves |
-- |
683,621 |
(683,621) |
-- |
|
| Dividend |
|
-- |
-- |
(3,311,975) |
(3,311,975) |
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
|
| Balance
as at June 30, 1999 |
66,239,500 |
7,612,407 |
22,169,693 |
96,021,600 |
|
| Profit
after taxation |
-- |
-- |
2,540,203 |
2,540,203 |
|
| Transfer
to reserves |
-- |
508,041 |
(508,041) |
-- |
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
|
| Balance
as at June 30, 2000 |
66,239,500 |
8,120,448 |
24,201,855 |
98,561,803 |
|
|
========== |
========== |
========== |
========== |
|
|
|
Salman Qureshi |
|
Jehangir Shah |
|
Aamir Qureshi |
|
|
Chairman |
|
Managing Director/CEO |
|
Director |
|
|
|
| NOTES
TO THE ACCOUNTS |
|
| FOR
THE YEAR ENDED JUNE 30, 2000 |
|
|
| 1.
NATURE AND STATUS OF BUSINESS |
|
| The
Company was incorporated on April 1, 1992 in Pakistan as a public limited
company |
|
| and
its shares are quoted on all Stock Exchanges in Pakistan. The principal
activity of the |
|
| Company
is to carry on leasing business. |
|
|
| 2.
SIGNIFICANT ACCOUNTING POLICIES |
|
|
|
|
| 2.1
Basis of preparation |
|
|
| These
accounts have been prepared in accordance with requirements of the |
|
| Companies
Ordinance, 1984 and the International Accounting Standards, as |
|
| applicable
in Pakistan. |
|
|
|
|
|
| 2.2
Accounting convention |
|
|
| These
accounts have been prepared under the historical cost convention without any |
|
| adjustments
for the effect of inflation or current values. |
|
|
|
|
| 2.3
Staff retirement benefits |
|
|
| The
Company operates a funded contributory provident fund scheme covering all |
|
| regular
employees. Equal monthly contributions are made by the Company and |
|
| employees
to the fund. |
|
|
|
|
|
| Provision
for gratuity represents the amounts due to staff upto the date of |
|
| introduction
of provident fund scheme. |
|
|
| 2.4
Compensated absences |
|
| The
International Accounting Standard 19 - Employee Benefits became applicable |
|
| for
all financial statements covering periods beginning on or after January 01, |
|
| 1999.
This standard requires that liability in respect of accumulated compensated |
|
| absences
of employees should be accounted for in the period in which these |
|
| absences
are earned. |
|
|
|
| According
to the previous accounting policy of the Company these absences were |
|
| accounted
for on payment basis. Accordingly, the management has decided to |
|
| change
the accounting policy of the Company and has made a total |
|
| provision
of Rs. 0.208 million in respect of accumulated compensated |
|
| absences
as at June 30, 2000. Had the policy not been changed, the profit before |
|
| taxation
for the year would have higher by Rs. 0.208 million. The comparative |
|
| information
has not been restated as it was considered impracticable to do so. |
|
|
| 2.5
Revenue recognition |
|
|
|
| Lease
income is recognised using the 'Finance Method'. Under this method the |
|
| unearned
finance income represented by the excess of the aggregate of lease rentals |
|
| and
the estimated residual value over the cost of leased assets is allocated to
income |
|
| on
a systematic basis over the period of the lease term. |
|
|
| Profit
on morabaha and short term finances is recognised on prorata basis taking
into |
|
| account
the relevant buy-back date. |
|
|
| Front
end fee, project examination fee and other commissions are recognised as |
|
| income
on receipt. |
|
|
|
|
|
| 2.6 Taxation |
|
|
|
| Provision
for current taxation is the higher of the amount computed on taxable |
|
| income
at the current tax rates after taking into account tax rebates and |
|
| minimum
tax computed at the prescribed rate on turnover. |
|
|
|
|
| The
Company accounts for deferred taxation using the liability method on all |
|
| significant
timing differences excluding those that are not likely to reverse in |
|
| foreseeable
future as stated more fully in Note: 6.1. |
|
|
|
|
|
| 2.7
Tangible fixed assets |
|
| 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 at the rates given in relevant note. |
|
|
|
|
| Full
year's depreciation is charged on additions while no depreciation is charged
on |
|
| disposal
during the year. |
|
|
|
|
|
|
| Minor
repairs and maintenance are charged to revenue. Major repairs, renewals and |
|
| improvements
are capitalised. |
|
|
|
|
|
|
| Gains
and losses on disposal of fixed assets are charged to income. |
|
|
| 2.8
Accounting for leases |
|
|
|
| The
Company accounts for assets operated under financial lease by recording the |
|
| assets
and related liability. |
|
|
|
|
|
|
| The
amounts are determined on the basis of discounted value of total minimum
lease |
|
| payments
and residual value of the assets at the end of the lease period to be paid by |
|
| the Company. |
|
|
|
|
|
|
| Financial
charges are allocated to accounting periods in a manner so as to provide |
|
| constant
periodic rate of charge on the outstanding liability. |
|
|
|
|
| Depreciation
is charged at rates specified in the related note to write off the assets |
|
| over
its estimated useful life in view of certainty of the ownership of the assets
at the |
|
| end
of the lease. |
|
|
|
|
| 2.9
Provision for potential losses |
|
| Provision
for potential losses against lease, morabaha finances, short term finances, |
|
| long
term advances and other receivables represents provision which in the opinion |
|
| of
the management, is required to cover potential losses that can be reasonably |
|
| anticipated.
The allowance is increased by provision charged to income and |
|
| decreased
by charge net of recoveries. |
|
|
|
|
| 2.10
Investments |
|
|
|
| Long
term investments are stated at cost. Provision is made for diminution in the |
|
| value
of investments if considered permanent. |
|
|
|
| 2.11
Deferred costs |
|
| These
costs are amortized over a period of five years commencing from the year in |
|
| which
they are incurred. |
|
|
|
|
|
|
|
|
2000 |
1999 |
|
|
|
Rupees |
Rupees |
|
| 3. RESERVES |
|
|
| Opening
balance |
|
7,612,407 |
6,928,786 |
|
| Transfer
from profit and loss account |
|
508,041 |
683,621 |
|
|
|
------------------ |
------------------ |
|
|
|
8,120,448 |
7,612,407 |
|
|
|
========== |
========== |
|
|
| This
reserve represents the amounts set aside out of after tax profits in
accordance with State |
|
| Bank
of Pakistan NBFI Circular No. 1 dated December 5, 1991. Under this Circular
20% of |
|
| the
after tax profits are to be credited to reserves till such time that such
reserves equal the |
|
| paid up capital. |
|
|
|
|
| 4.
LONG TERM LOANS |
|
| Secured |
|
| Financial
institution |
|
| Morabaha
financing (Note: 4.1) |
|
|
18,750,000 |
-- |
|
| Less:
Current portion |
|
|
8,333,332 |
-- |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
10,416,668 |
-- |
|
|
|
|
========== |
========== |
|
|
| 4.1
These loans are secured against first pari passu charge on leased assets and
related |
|
| receivables.
These loans carry markup at the rate of 17.5% and 18.5% per annum |
|
| and
are repayable in equal quarterly installments of Rs. 0.833 million and Rs.
1.25 |
|
| million
respectively latest by June 2003. |
|
|
|
| 5.
LIABILITIES AGAINST ASSETS |
|
| SUBJECT
TO FINANCE LEASE |
|
| 1999 - 2000 |
|
|
-- |
595,620 |
|
| 2000 - 2001 |
|
|
|
2,506,270 |
514,055 |
|
| 2001 - 2002 |
|
|
|
2,117,138 |
65,883 |
|
| 2002 - 2003 |
|
|
|
1,505,562 |
-- |
|
|
|
|
------------------ |
------------------ |
|
|
6,128,970 |
1,175,558 |
|
| Less:
Financial charges allocated to |
|
|
|
| future periods |
|
|
1,141,956 |
81,110 |
|
|
|
------------------ |
------------------ |
|
|
|
|
4,987,014 |
1,094,448 |
|
| Less:
Current portion |
|
|
1,908,285 |
434,617 |
|
|
|
|
------------------ |
------------------ |
|
|
3,078,729 |
659,831 |
|
|
========== |
========== |
|
|
| This
represent Finance lease entered into with leasing companies for vehicles and
office equipments. |
|
| This
balance of liability is payable latest by May 2003 in monthly installments. |
|
|
| Monthly
lease payables includes finance charge at rates ranging from 18 to 22 percent
per annum |
|
| which
is used as discounting factor. |
|
|
| At
the end of the lease period the ownership of assets shall he transferred to
the Company on payment |
|
| of
residual value. The cost of operating and maintaining the leased assets is
borne by the Company. |
|
| The
above liability is secured against demand promissory note. |
|
|
| 6.
DEFERRED LIABILITIES |
|
|
| Provision
for gratuity |
|
|
67,770 |
138,170 |
|
| Deferred
taxation (Note: 6.1) |
|
|
2,853,000 |
3,059,000 |
|
|
|
------------------ |
------------------ |
|
|
|
|
2,920,770 |
3,197,170 |
|
|
========== |
========== |
|
|
| 6.1
This amount comprises of provision/(reversal) of liability arising after June
30, |
|
| 1998
and two-fifths of unprovided liability as at June 30,1998 as required by the |
|
| Securities
and Exchange Commission of Pakistan's circular no. 16 dated September |
|
| 09,
1999. These amounts have been determined after taking into account tax
losses. |
|
|
| 7.
LONG TERM DEPOSITS |
|
| Lease security deposits
(Note: 7.1) |
|
44,331,302 |
44,037,732 |
|
| Less:
Current portion shown under |
|
|
| current
liabilities |
|
18,534,373 |
18,785,311 |
|
|
|
------------------ |
------------------ |
|
|
|
25,796,929 |
25,252,421 |
|
|
========== |
========== |
|
|
| 7.1
These represent interest free security deposits received from lessees under
lease |
|
| contracts
and are adjustable at the expiry of the respective lease period. |
|
|
|
| 8.
CURRENT PORTION OF LONG TERM LIABILITIES |
|
| Long
term loans (Note: 4) |
|
|
8,333,332 |
-- |
|
| Liabilities
against assets subject |
|
|
| to
finance lease (Note: 5) |
|
|
1,908,285 |
434,617 |
|
| Long
term deposit (Note: 7) |
|
|
18,534,373 |
18,785,311 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
28,775,990 |
19,219,928 |
|
|
========== |
========== |
|
|
|
|
|
|
| 9.
SHORT TERM LOANS AND RUNNING FINANCES |
|
| Short
term loans |
|
| Secured |
|
| Financial
institution |
|
| Morabaha
financing (Note: 9.1) |
|
3,000,000 |
3,000,000 |
|
| Unsecured |
|
|
|
| Financial
institutions (Note: 9.2) |
|
42,500,000 |
11,200,000 |
|
|
|
------------------ |
------------------ |
|
|
|
45,500,000 |
14,200,000 |
|
|
|
========== |
========== |
|
|
|
|
| Running
finances under markup |
|
| arrangements |
|
| Secured |
|
| Banking
companies (Note: 9.3) |
|
37,013,755 |
44,167,704 |
|
|
|
------------------ |
------------------ |
|
|
|
82,513,755 |
58,367,704 |
|
|
========== |
========== |
|
|
| 9.1
This facility is secured by first pari passu charge on leased assets and
receivables of |
|
| the
Company and carries markup at the rate of 18 percent per annum. This amount
is |
|
| repayable
by June 2001. |
|
|
| 9.2
These facilities carry mark-up at rates ranging from 14 to 18 percent per
annum. |
|
| These
borrowings comprise of ten different facilities and are repayable on various |
|
| dates
latest by April 2001. |
|
|
| 9.3
The Company can avail facilities aggregating to Rs. 37.0 million (1999: Rs.
43.954 |
|
| million)
from commercial banks. Under these arrangements goods owned by the |
|
| Company
are sold to the banks and are deemed to be immediately repurchased by |
|
| the
Company at a price paid by the bank plus mark-up computed at the rate of
43.836 |
|
| paisas
per Rs. 1,000 per diem or part thereof on the price outstanding. These |
|
| facilities
are secured by first pari passu charge on Company's leased assets, fixed |
|
| assets
and receivables and are renewable/repayable by December 2000. |
|
|
| 10.
CREDITORS, ACCRUED AND OTHER LIABILITIES |
|
| Creditors |
|
-- |
10,870 |
|
| Accrued
expenses |
|
585,981 |
488,149 |
|
| Advance
rental from lessees |
|
1,550,721 |
1,227,208 |
|
| Mark-up
accrued on secured loans and |
|
|
|
| running
finances |
|
2,831,768 |
3,628,949 |
|
| Mark-up
accrued on unsecured loans |
|
735,774 |
206,192 |
|
| Mark-up
on assets subject to finance lease |
|
66,469 |
12,551 |
|
| Income
tax payable |
|
263,669 |
-- |
|
| Sundry
deposits |
|
66,816 |
93,623 |
|
| Unclaimed
gratuity |
|
108,201 |
31,401 |
|
| Other |
|
96,979 |
22,995 |
|
|
|
------------------ |
------------------ |
|
|
|
|
|
6,306,378 |
5,721,938 |
|
|
|
|
========== |
========== |
|
|
| 11. DIVIDEND |
|
|
|
|
| Proposed |
|
|
-- |
3,311,975 |
|
| Unclaimed |
|
|
885,415 |
542,506 |
|
|
|
------------------ |
------------------ |
|
|
|
885,415 |
3,854,481 |
|
|
|
========== |
========== |
|
|
| 12.
CONTINGENCIES AND COMMITMENTS |
|
|
|
|
|
|
| 12.1
Contingencies |
|
|
|
| The
income tax assessment for the assessment year 1997-98 has been completed |
|
| determining
tax liability amounting to Rs.3.775 million which the Company is |
|
| disputing
in appeal before Income Tax Authority. In the event of adverse decision in |
|
| the
appeal, the company would be faced with a liability amounting to Rs. 3.563 |
|
| million
and a corresponding charge against profit amounting to Rs. 3.520 million. |
|
|
|
|
| 12.2
Commitments |
|
|
|
| There
were no capital commitments at the balance sheet date. |
|
|
|
|
| 13.
TANGIBLE FIXED ASSETS |
|
|
|
|
|
COST |
|
DEPRECIATION |
|
WRITTEN |
|
|
|
|
RATE |
|
DOWN |
|
AS AT |
ADDITIONS |
DISPOSAL/ |
AS AT |
% |
AS AT |
ADJUSTMENT |
FOR THE |
AS AT |
VALUE AS AT |
| PARTICULARS |
01-07-1999 |
|
ADJUSTMENT |
30-06-2000 |
|
01-07-1999 |
|
YEAR |
30-06-2000 |
30-06-2000 |
|
|
|
| Owned |
|
|
|
| Furniture
and fixtures |
942,905 |
38,572 |
-- |
981,477 |
10 |
407,844 |
-- |
98,148 |
505,992 |
475,485 |
| Air
conditioner and refrigerators |
412,031 |
-- |
-- |
412,031 |
15 |
240,130 |
-- |
44,852 |
284,982 |
127,049 |
| Electric
fitting and installation |
32,040 |
-- |
-- |
32,040 |
15 |
22,181 |
-- |
3,339 |
25,520 |
6,520 |
| Office
machines and equipments |
1,683,037 |
146,598 |
-- |
1,829,635 |
15 |
1,022,578 |
-- |
239,179 |
1,261,757 |
567,878 |
| Vehicles |
|
3,825,570 |
130,700 |
(1,556,184) |
2,400,086 |
20 |
2,266,292 |
(1,020,678) |
391,759 |
1,637,373 |
762,713 |
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
6,895,583 |
315,870 |
(1,556,184) |
5,655,269 |
-- |
3,959,025 |
(1,020,678) |
777,277 |
3,715,624 |
1,939,645 |
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
|
|
| Leased |
|
|
|
| Vehicles |
|
785,500 |
4,662,450 |
-- |
5,447,950 |
20 |
169,200 |
-- |
1,089,590 |
1,258,790 |
4,189,160 |
| Office
equipments |
702,400 |
319,000 |
-- |
1,021,400 |
15 |
164,955 |
-- |
153,210 |
318,165 |
703,235 |
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
1,487,900 |
4,981,450 |
-- |
6,469,350 |
-- |
334,115 |
-- |
1,242,800 |
1,576,955 |
4,892,395 |
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
| Total
Rupees - 2000 |
8,383,483 |
5,297,320 |
(1,556,184) |
12,124,619 |
-- |
4,293,180 |
(1,020,678) |
2,020,077 |
5,292,579 |
6,832,040 |
|
|
========== |
========== |
========== |
========== |
========== |
========== |
========== |
========== |
========== |
========== |
| Total
Rupees - 2000 |
7,192,505 |
1,993,578 |
(802,600) |
8,383,483 |
-- |
3,692,635 |
(796,104) |
1,396,649 |
4,293,180 |
4,090,303 |
|
========== |
========== |
========== |
========== |
========== |
========== |
========== |
========== |
========== |
========== |
|
|
|
| 13.1
The following assets were deleted during the year. |
|
|
|
|
| PARTICULARS |
|
COST |
ACCUMULATED |
WRITTEN |
SALE |
MODE OF |
PARTICULARS OF PURCHASERS |
|
|
DEPRECIATION |
DOWN VALUE |
PROCEEDS |
DISPOSAL |
|
|
|
|
|
| Vehicles |
|
|
|
| Toyota Corolla |
|
870,014 |
495,675 |
374,339 |
640,000 |
Negotiation |
Mubashare Ahmed |
Lahore |
|
| Suzuki Margalla |
|
308,500 |
185,100 |
123,400 |
213,500 |
Negotiation |
Asim Mehmood |
Lahore |
|
| Suzuki Margalla |
|
377,670 |
339,903 |
37,767 |
150,000 |
Negotiation |
Elmetec (Pvt.) Limited |
Lahore |
|
|
------------------ |
------------------ |
------------------ |
------------------ |
|
|
| Total
Rupees - 2000 |
1,556,184 |
1,020,678 |
535,506 |
1,003,500 |
|
|
========== |
========== |
========== |
========== |
|
| Total
Rupees - 1999 |
802,600 |
796,104 |
6,496 |
384,530 |
|
|
========== |
========== |
========== |
========== |
|
|
|
|
| 14.
INVESTMENT IN LEASE AND HIRE PURCHASE FINANCES |
|
| Minimum
lease and hire purchase rentals |
|
| receivable |
|
|
|
209,668,582 |
159,388,383 |
|
| Add:
Residual value |
|
|
45,803,419 |
44,037,732 |
|
|
|
|
|
------------------ |
------------------ |
|
| Gross
investment in lease and hire |
|
|
| purchase
finances (Note: 14.2) |
|
|
255,472,001 |
203,426,115 |
|
| Less:
Unearned finance income |
|
|
47,671,683 |
34,276,216 |
|
|
|
|
|
------------------ |
------------------ |
|
| Net
investment in lease and hire |
|
|
|
| purchase
finances (Note: 1 4.3) |
|
|
207,800,318 |
169,149,899 |
|
| Less:
Current portion of net |
|
|
|
| investment
(Note: 1 8) |
|
99,260,060 |
89,941,348 |
|
|
|
------------------ |
------------------ |
|
| Long
term portion of net |
|
|
|
| investment
(Note: 14.1) |
|
|
108,540,258 |
79,208,551 |
|
| Provision
for lease losses |
|
|
5,963,013 |
2,586,200 |
|
|
|
|
|
------------------ |
------------------ |
|
|
|
102,577,245 |
76,622,351 |
|
|
|
========== |
========== |
|
|
| 14.1
Long term net investment includes |
|
| Minimum
lease and hire purchase rentals due |
|
| after
one year but less than five years |
|
96,264,675 |
59,704,155 |
|
| Add:
Residual value |
|
27,269,046 |
25,252,421 |
|
|
|
------------------ |
------------------ |
|
|
|
123,533,721 |
84,956,576 |
|
| Less:
Unearned finance income |
|
|
14,993,463 |
5,748,025 |
|
|
|
------------------ |
------------------ |
|
|
|
108,540,258 |
79,208,551 |
|
|
========== |
========== |
|
|
| 14.2
This includes balance due from an Associated Company amounting to Rs. Nil |
|
| (1999:
Rs. 2.048 million). Maximum amount due from Associated Company at the |
|
| end
of any month during the period was Rs. 2.91 million (1999: Rs. 2.048
million). |
|
|
| These
receivable carry finance income at rates ranging from 18.50 to 30.00 percent |
|
| per annum. |
|
|
|
|
|
| 15.
LONG TERM INVESTMENTS - AT COST |
|
| Federal
Investment Bonds (Note: 15.1) |
|
200,000 |
200,000 |
|
| Shares
in listed company |
|
|
| 5,000
ordinary shares of Commercial |
|
|
| Union
Life Assurance Company |
|
|
| (Pakistan)
Ltd. (Note: 15.2) |
|
50,000 |
50,000 |
|
|
|
------------------ |
------------------ |
|
|
|
250,000 |
250,000 |
|
|
|
|
|
========== |
========== |
|
|
| 15.1
Federal Investment Bonds have been issued by Government of Pakistan and carry |
|
| profit
at the rate of 15 percent per annum. |
|
|
| 15.2
The market value of these shares at the balance sheet date was Rs. 35,000
(1999: Rs. |
|
| 38,750).
No provision for decline in market value of these shares has been made, as |
|
| in
the opinion of the management, this decline is temporary. |
|
|
| 16.
LONG TERM ADVANCES |
|
| Secured |
|
| Advances
to customers (Note: 16.1 & 16.2) |
|
16,733,130 |
-- |
|
| Less:
Current portion |
|
|
6,566,562 |
-- |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
10,166,568 |
-- |
|
| Less:
Provision for doubtful advances |
|
1,800,000 |
-- |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
8,366,568 |
-- |
|
|
========== |
========== |
|
|
| 1
6.1 These advances are secured by equitable mortgage of immovable properties
and |
|
| carry
markup at rates ranging from 18 to 19 percent per annum. These advances are |
|
| repayable
in equal quarterly installments latest by October 2004. |
|
|
| These
advances were restructured by deferring their payments and reducing markup |
|
| rate
by 6 percent per annum. |
|
|
|
|
|
| 17.
LONG TERM DEPOSITS AND DEFERRED COST |
|
| Security
deposit (Note: 17.1) |
|
1,012,400 |
514,590 |
|
| Deferred
cost (Note: 17.2) |
|
-- |
122,122 |
|
|
|
------------------ |
------------------ |
|
|
|
1,012,400 |
636,712 |
|
|
|
========== |
========== |
|
|
| 17.1
This comprises of: |
|
| Security
deposit |
|
|
1,128,980 |
514,590 |
|
| Less:
Current portion |
|
|
116,580 |
-- |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
1,012,400 |
514,590 |
|
|
========== |
========== |
|
|
| 17.2
This comprises of: |
|
| Pre-operating
expenses |
|
|
122,122 |
271,773 |
|
| Less:
Amortized during the year |
|
|
122,122 |
149,651 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
-- |
122,122 |
|
|
========== |
========== |
|
|
| 18.
CURRENT PORTION OF INVESTMENT IN LEASE AND ADVANCES |
|
| Investment
in lease and hire |
|
| purchase
(Note: 18.1) |
|
|
99,260,060 |
89,941,348 |
|
| Long
term advance (Note: 16) |
|
6,566,562 |
-- |
|
|
|
------------------ |
------------------ |
|
|
|
|
105,826,622 |
89,941,348 |
|
|
========== |
========== |
|
|
|
| 18.1
Current portion of net investment in lease |
|
|
| Minimum
lease and hire purchase rentals |
|
113,668,880 |
99,684,228 |
|
| Add:
Residual value |
|
|
18,269,400 |
18,785,311 |
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
131,938,280 |
118,469,539 |
|
| Less:
Unearned finance income |
|
|
32,678,220 |
28,528,191 |
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
99,260,060 |
89,941,348 |
|
|
|
|
========== |
========== |
|
|
| 19.
MORABAHA AND SHORT TERM FINANCES |
|
| Secured |
|
|
| Morabaha
finances (Note: 19.1) |
|
2,847,410 |
3,000,000 |
|
| Short
term finances (Note: 19.2) |
|
9,119,330 |
23,351,060 |
|
|
|
------------------ |
------------------ |
|
|
|
11,966,740 |
26,351,060 |
|
| Less:
Provision for doubtful receivables |
|
1,200,000 |
5,950,000 |
|
|
|
------------------ |
------------------ |
|
|
|
10,766,740 |
20,401,060 |
|
|
|
========== |
========== |
|
|
|
|
| 19.1
These represent amounts receivable against morabaha transactions i.e. sale of
goods |
|
| on
a deferred payment basis at specified profit margin. These are secured by |
|
| equitable
mortgage of property. The rate of' profit applicable on these finances |
|
| ranges
from 25 to 28 percent per annum. |
|
|
| 19.2
These finances are secured by equitable mortgage of property and charge on |
|
| machinery.
These finances carry mark up at rates ranging from 19 to 28 percent per |
|
| annum.
These include a balance due from an Associated Company amounting to Rs. |
|
| Nil
(1999: Rs. 0.939 million). Maximum amount due from Associated Company at |
|
| the
end of any month during the period was Rs. 4.974 million (1999: Rs. 0.939
million). |
|
|
|
|
| 20.
ADVANCES, DEPOSITS, PREPAYMENTS AND OTHER RECEIVABLES |
|
| Advances
(Unsecured -Considered good) |
|
| Chief
Executive (Note: 20.1) |
|
|
84,000 |
71,000 |
|
| Executive(Note:
20.1) |
|
|
-- |
53,120 |
|
| Employee |
|
|
4,500 |
13,900 |
|
| Others |
|
|
198,107 |
98,846 |
|
|
|
------------------ |
------------------ |
|
|
|
286,607 |
236,866 |
|
| Against
purchase of leased assets |
|
600,000 |
352,695 |
|
| Income tax |
|
|
1,629,740 |
1,509,466 |
|
|
|
------------------ |
------------------ |
|
|
|
2,516,347 |
2,099,027 |
|
| Security
deposits |
|
|
116,580 |
30,000 |
|
| Prepayments |
|
|
370,459 |
330,484 |
|
| Accrued
return on bank deposits and short |
|
|
|
| term finances |
|
|
327,501 |
1,258,928 |
|
| Income
tax refundable |
|
|
274,968 |
-- |
|
|
| Other
receivable |
|
| Considered
good |
|
| Associated
company(Note:20.2) |
|
|
-- |
58,957 |
|
| Executive
(Note: 20.3) |
|
604,677 |
138,645 |
|
| Others |
|
1,854,631 |
1,132,070 |
|
|
|
------------------ |
------------------ |
|
|
|
2,459,308 |
1,329,672 |
|
| Considered
doubtful |
|
| Others |
|
463,007 |
-- |
|
| Less:
Provisions for doubtful receivables |
|
463,007 |
-- |
|
|
|
------------------ |
------------------ |
|
|
|
-- |
-- |
|
|
|
------------------ |
------------------ |
|
|
|
2,459,308 |
1,329,672 |
|
|
|
------------------ |
------------------ |
|
|
|
6,065,163 |
5,048,111 |
|
|
|
========== |
========== |
|
|
| 20.1
The maximum amount outstanding due from Chief Executive and an Executive at |
|
| the
end of any month was Rs. 0.084 million (1999: Rs. 0.071 million) and Rs. Nil |
|
| (1999:
Rs. 0.053 million) respectively. |
|
|
|
| 20.2
The maximum amount due from an Associated Company at the end of any month |
|
| during
the period was Rs. Nil (1999: Rs. 0.059 million). |
|
|
| 20.3
The maximum amount due from an Executive at the end of any month during the |
|
| year
was Rs. 0.605 million (1999: Rs. 0.139 million). |
|
|
|
| 21.
CASH AND BANK BALANCES |
|
| Cash in hand |
|
|
1,429,647 |
1,224,818 |
|
| Cash at banks |
|
|
|
| -
in current accounts |
|
824,921 |
1,172,355 |
|
| -
in deposit accounts (Note: 21.1 & 21.2) |
|
16,772,091 |
14,338,366 |
|
|
|
------------------ |
------------------ |
|
|
|
17,597,012 |
15,510,721 |
|
|
|
------------------ |
------------------ |
|
|
|
19,026,659 |
16,735,539 |
|
|
|
========== |
========== |
|
|
| 21.1
These include Rs.50,000 (1999: Rs.20,000) with State Bank of Pakistan as |
|
| required
under the rules of business for Non Banking Financial Institutions. |
|
|
| 21.2
These accounts carry profit at rates ranging from 5 to 10.5 percent per
annum. |
|
|
|
|
| 22.
INCOME FROM LEASING OPERATIONS |
|
| Income
on lease contracts |
|
|
26,448,799 |
23,871,835 |
|
| Income
from hire purchase contracts |
|
460,763 |
817,879 |
|
| Front-end fee |
|
|
880,442 |
589,646 |
|
| Documentation
charges |
|
|
258,520 |
245,590 |
|
| Late
payment and other charges |
|
|
711,418 |
126,942 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
28,759,942 |
25,651,892 |
|
|
|
|
========== |
========== |
|
|
| 23.
OTHER INCOME |
|
| Profit
on morabaha and short term finances |
|
829,920 |
2,475,282 |
|
| Return
on bank deposits |
|
|
882,497 |
679,747 |
|
| Gain
on sale of fixed assets |
|
|
467,994 |
378,034 |
|
| Gain
on purchase and sale of shares |
|
-- |
2,137,045 |
|
| Dividend
income |
|
|
-- |
145,000 |
|
| Profit
on FIB's investment |
|
|
30,000 |
30,000 |
|
| Miscellaneous |
|
|
5,761 |
13,960 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
2,216,172 |
5,859,068 |
|
| Less:
Reversal of profit on short term finances |
|
1,398,905 |
-- |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
817,267 |
5,859,068 |
|
|
========== |
========== |
|
|
| 24.
ADMINISTRATIVE AND OPERATING EXPENSES |
|
| Salaries,
allowances and benefits (Note: 24.1) |
|
5,259,593 |
5,259,689 |
|
| Travelling
and conveyance charges |
|
384,018 |
406,527 |
|
| Training
and seminars |
|
|
26,250 |
9,023 |
|
| Rent,
rates and taxes |
|
|
923,652 |
555,240 |
|
| Electricity,
gas and water |
|
|
899,805 |
588,900 |
|
| Repairs
and maintenance |
|
|
174,769 |
247,230 |
|
| Printing
and stationery |
|
|
289,201 |
315,449 |
|
| Telephone
and postage expenses |
|
1,573,461 |
1,653,005 |
|
| Advertising
expenses |
|
|
137,619 |
110,093 |
|
| Legal
and professional charges |
|
|
1,492,002 |
707,077 |
|
| Vehicle
running expenses |
|
|
920,233 |
682,086 |
|
| Insurance
expenses |
|
|
523,796 |
309,161 |
|
| Entertainment
expenses |
|
|
186,810 |
154,736 |
|
| Amortization
of deferred costs |
|
|
122,122 |
149,651 |
|
| Donation
(Note: 24.2) |
|
|
19,000 |
2,020 |
|
| Auditors'
remuneration |
|
|
| Audit fee |
|
|
40,000 |
40,000 |
|
| Out
of pocket expenses |
|
|
22,534 |
20,809 |
|
| Special
audit fee |
|
|
-- |
20,000 |
|
| Tax
and advisory services |
|
|
-- |
175,000 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
62,534 |
255,809 |
|
| Sundry
expenses |
|
|
359,366 |
305,865 |
|
| Depreciation |
|
|
2,020,077 |
1,396,649 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
15,374,308 |
13,108,210 |
|
|
========== |
========== |
|
|
| 24.1
This amount includes Rs. 0.133 million (1999: Rs. 0.140 million) in respect |
|
| of
staff retirement benefits. |
|
|
| 24.2
No Director and his spouse have any interest in the donee. |
|
|
| 25.
FINANCIAL CHARGES |
|
|
|
| Mark-up/interest
on long term loans |
|
484,402 |
-- |
|
| Short
term loans and running finances |
|
9,201,350 |
8,657,905 |
|
| Liabilities
for finance leases |
|
493,561 |
197,729 |
|
| Bank charges |
|
282,378 |
147,710 |
|
|
------------------ |
------------------ |
|
|
|
10,461,691 |
9,003,344 |
|
|
========== |
========== |
|
|
| 26.
PROVISION FOR TAXATION |
|
| The
provision for current taxation represents the minimum tax under the Income
Tax |
|
| Ordinance,
1979 after considering unabsorbed depreciation and tax losses. |
|
|
| 27.
EARNINGS PER SHARE |
|
| Net profit for the year |
|
2,540,203 |
3,418,107 |
|
|
========== |
========== |
|
|
|
|
Number of
shares |
|
|
|
|
|
| Average
issued ordinary shares |
|
6,623,950 |
6,623,950 |
|
|
========== |
========== |
|
| Earnings per share |
|
0.38 |
0.52 |
|
|
========== |
========== |
|
|
| 28.
REMUNERATION OF CHIEF EXECUTIVE, DIRECTORS AND EXECUTIVES |
|
| The
aggregate amounts charged in the accounts for remuneration, including certain |
|
| benefits
to the Chairman, Chief Executive, Directors and Executives of the |
|
| Company
were as follows: |
|
|
|
|
CHIEF
EXECUTIVE |
DIRECTORS |
EXECUTIVES |
|
|
|
2000 |
1999 |
2000 |
1999 |
2000 |
1999 |
|
|
|
Rupees |
Rupees |
Rupees |
Rupees |
Rupees |
Rupees |
|
|
|
|
| Managerial
Remuneration |
991,800 |
984,402 |
3,500 |
4,000 |
1,045,204 |
920,053 |
|
|
| Bonus |
|
-- |
100,000 |
-- |
-- |
-- |
-- |
|
|
| Utilities |
|
34,200 |
32,100 |
-- |
-- |
36,583 |
30,680 |
|
|
| Leave
encashment |
57,000 |
50,000 |
-- |
-- |
50,284 |
58,334 |
|
|
| Provident
Fund Contribution |
57,000 |
53,502 |
-- |
-- |
39,517 |
-- |
|
|
| Reimbursable
Expenses |
28,308 |
53,576 |
-- |
-- |
66,573 |
54,336 |
|
|
| Contract
for Legal Services |
-- |
-- |
60,000 |
332,600 |
-- |
-- |
|
|
| Contract
with Advisor to the Board |
-- |
-- |
-- |
-- |
930,000 |
1,423,375 |
|
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
|
| Total |
|
1,168,308 |
1,273,580 |
63,500 |
336,600 |
2,168,161 |
2,486,778 |
|
|
|
|
========== |
========== |
========== |
========== |
========== |
========== |
|
|
| Number
of persons |
1 |
1 |
4 |
4 |
5 |
5 |
|
|
|
========== |
========== |
========== |
========== |
========== |
========== |
|
|
| The
Chairman, Chief Executive, Advisor to the Board and two Executives are |
|
| provided
use of Company maintained cars and other benefits as per Company policy. |
|
|
| 29.
TRANSACTIONS WITH ASSOCIATED COMPANY |
|
| The
Company completed following transactions upto April, 2000 with an |
|
| Associated
Company in the normal course of business: |
|
|
|
|
|
2000 |
1999 |
|
|
|
|
Rupees |
Rupees |
|
|
| Leases
finance provided |
|
|
1,071,200 |
2,148,850 |
|
| Lease
rentals received |
|
|
1,212,683 |
126,835 |
|
| Interest
on lease finance |
|
|
298,472 |
38,605 |
|
| Short
term finance provided |
|
|
8,774,000 |
939,000 |
|
| Interest
on short term finance |
|
|
715,838 |
24,851 |
|
| Recoverable
expenses incurred |
|
|
-- |
58,957 |
|
|
|
| 30.
INTEREST RATE RISK |
|
| Interest
rate risk and sensitivity of the Company's financial assets and |
|
| financial
liabilities as at June 30, 2000 can be evaluated from the following: |
|
|
|
|
|
Interest/mark-up bearing |
|
Non-interest bearing |
|
Total |
|
|
|
Maturity |
Maturity |
Sub total |
Maturity |
Maturity |
Sub total |
|
|
|
upto one |
after one |
|
upto one |
after one |
|
|
|
|
year |
year |
|
year |
year |
|
|
|
|
|
|
|
| FINANCIAL
ASSETS |
|
|
|
| Net
investment in lease |
|
| and
hire purchase |
99,260,060 |
102,577,245 |
201,837,305 |
-- |
-- |
-- |
201,837,305 |
|
|
| Advances
to customers |
6,566,562 |
8,366,568 |
14,933,130 |
-- |
-- |
-- |
14,933,130 |
|
|
| Investments |
|
-- |
200,000 |
200,000 |
-- |
50,000 |
50,000 |
250,000 |
|
|
| Security
deposits |
-- |
-- |
-- |
116,580 |
1,012,400 |
1,128,980 |
1,128,980 |
|
|
| Morabaha
and other finances |
10,766,740 |
-- |
10,766,740 |
-- |
-- |
-- |
10,766,740 |
|
|
| Advances,
deposits and |
|
|
|
|
| other
receivables |
-- |
-- |
-- |
3,948,384 |
-- |
3,948,384 |
3,948,384 |
|
|
| Cash
and bank balances |
16,772,091 |
-- |
16,772,091 |
2,254,568 |
-- |
2,254,568 |
19,026,659 |
|
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
|
|
|
133,365,453 |
111,143,813 |
244,509,266 |
6,319,532 |
1,062,400 |
7,381,932 |
251,891,198 |
|
|
|
|
|
|
|
|
|
|
|
| FINANCIAL
LIABILITIES |
|
|
|
| Loans |
|
8,333,332 |
10,416,668 |
18,750,000 |
-- |
-- |
-- |
18,750,000 |
|
| Liability
against assets |
|
|
|
|
| subject
to finance lease |
1,908,285 |
3,078,729 |
4,987,014 |
-- |
-- |
-- |
4,987,014 |
|
| Deferred
liabilities |
-- |
-- |
-- |
-- |
67,770 |
67,770 |
67,770 |
|
| Security
deposits |
-- |
-- |
-- |
18,534,373 |
25,796,929 |
44,331,302 |
44,331,302 |
|
| Short
term loans and running finances |
82,513,755 |
-- |
82,513,755 |
-- |
-- |
-- |
82,513,755 |
|
| Creditors,
accrued and other liabilities |
-- |
-- |
-- |
4,755,657 |
-- |
4,755,657 |
4,755,657 |
|
| Dividend |
|
-- |
-- |
-- |
885,415 |
-- |
885,415 |
885,415 |
|
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
|
|
92,755,372 |
13,495,397 |
106,250,769 |
24,175,445 |
25,864,699 |
50,040,144 |
156,290,913 |
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
| Net
financial assets/(liabilities) |
40,610,081 |
97,648,416 |
138,258,497 |
(17,855,913) |
(24,802,299) |
(42,658,212) |
95,600,285 |
|
|
|
========== |
========== |
========== |
========== |
========== |
========== |
========== |
|
|
| 31.
CREDIT RISK |
|
| The
Company's credit risk exposure is not significantly different from that
reflected in the |
|
| financial
statements. The Management monitors and limits Company's exposure to credit |
|
| risk
through monitoring of clients' credit exposure, review and conservative
estimates of |
|
| provisions
for potential lease losses and doubtful receivables and through the prudent
use of |
|
| collateral
for large amounts of credit. The Management is of the view that it is not
exposed to |
|
| significant
concentration of credit risk as its financial assets are adequately
diversified in |
|
| different
avenues. |
|
|
| 32.
FAIR VALUE OF THE FINANCIAL INSTRUMENTS |
|
| The
carrying value of financial assets and financial liabilities approximates
their fair values |
|
| as
reflected in the financial statements except those stated as listed
securities as referred in |
|
| Note: 15.2. |
|
|
|
|
| 33.
NUMBER OF EMPLOYEES |
|
|
| Total
number of employees at the year end was 20 (1999: 20). |
|
|
|
|
| 34.
FINANCIAL RELIEF AND PROVISION AGAINST NON-PERFORMING ADVANCES |
|
| As
no relief was given or loan written off during the year under review, the
information for |
|
| statements
required to be filed under section 33A of the Banking Companies Ordinance, |
|
| 1962 is "Nil". |
|
|
| 35. GENERAL |
|
|
| i)
Figures have been rounded off to the nearest rupee. |
|
|
|
|
|
| ii)
Corresponding figures have been re-arranged wherever necessary for the
purpose of |
|
| comparison. |
|
|
|
|
|
|
|
Salman Qureshi |
|
Jehangir Shah |
|
Aamir Qureshi |
|
|
Chairman |
|
Managing Director/CEO |
|
Director |
|
|
|
|
|
|
|
|
|
|
|
|
|
