| Crescent Leasing Corporation Limited |
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| Annual
Report 2000 |
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| Mission
Statement |
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| Creslease
is committed to pursuing the improvement in shareholders |
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| value
through development of a dedicated human resource and |
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| efficient
systems base capable of effectively participating in a |
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| competitive
business environment. Creslease would endeavor to |
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| extend
the reach of the credit delivery system to stimulate the |
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| economic
development. |
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| Contents |
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| Company
Information |
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| Notice
of Meeting |
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| Directors'
Report |
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| Auditors'
Report |
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| Financial
Statements of the Company |
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| Pattern
of Holding of Shares |
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| Company
Information |
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| BOARD
OF DIRECTORS |
|
| Mr.
Aftab Ahmed Khan |
Chairman |
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| Mr.
Javed A. Callea |
Chief Executive |
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|
| Mr.
David V. Johns |
|
| Mr.
Istaqbal Mehdi |
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| Mr.
Mahmood Ahmed |
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| Mr.
Nessar Ahmed |
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| Mr.
Rashid Ahmed |
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| Mr.
Saeed Jamal Tariq |
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| CORPORATE
SECRETARY |
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| Mr.
Rashid Sadiq |
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| AUDITORS |
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| Khalid
Majid Hussain Rahman & Co. |
Chartered Accountants |
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|
| LEGAL
ADVISOR |
|
| Cornelius
Lane & Mufti |
|
Advocates &
Solicitors |
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| RATING
AGENCY |
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| The
Pakistan Credit Rating Agency (Private) Limited |
|
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| BANKS
& LENDING INSTITUTIONS |
|
| Commonwealth
Development Corporation |
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| Allied
Bank of Pakistan |
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| Habib Bank Ltd. |
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| Saudi
Pak Industrial & Agricultural Investment Co. (Pvt.) Ltd. |
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| National
Discounting Services Ltd. |
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| Pak-Kuwait
Investment Co. (Pvt). Ltd. |
|
| United
Bank Ltd. |
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| HEAD OFFICE |
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| B-801
& 802, 8th Floor, Lakson Square Bldg. # 3, Sarwar Shaheed Road, Karachi. |
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| Phone:
021-566-1938, 48,58 Fax: 021-566-1988 |
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| Email:
crescent@super.net.pk |
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| cresleas@cyber.net.pk |
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| BRANCH
OFFICE |
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| Suit
No, F-7 (B) 1st Floor, Rahman Business Suites, 32-B-III, Gulberg-III, Lahore, |
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| Phone:
042 5717415-6 Fax: 042 5717417 |
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| REGISTERED
AND SHARE TRANSFER OFFICE |
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| 83
Babar Block, New Garden Town, Lahore |
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| Phone:
042 588-1974 & 75 Fax: 042 588-1976 |
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| Email:
rashid.sadiq@cressoft.com.pk |
|
|
| *For
a copy of this report write to our Head Office/Registered Office |
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| NOTICE
OF ANNUAL GENERAL MEETING |
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| NOTICE
is hereby given that the 13th Annual General Meeting of the shareholders of
Crescent Leasing Corporation |
|
| Limited,
will be held on Monday, the November 13, 2000 at 3.00 p.m. at Registered
Office 83-Babar Block, |
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| New
Garden Town, Lahore to transact the following business: |
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| 1.
To receive, consider and adopt the audited accounts of the company for the
year ended June |
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| 30,
2000 together with Directors' and Auditors' Reports thereon. |
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|
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| 2.
To issue Bonus Shares. The Directors have recommended the issue of Bonus
Shares in the proportion |
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| of
One share for every Six shares held i.e. 16.67% out of premium on issuance of
right shares account. |
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| 3.
To appoint auditors and fix their remuneration. |
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By Order of the Board |
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RASHID SADIQ |
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|
Corporate .Secretary |
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| REGISTERED
OFFICE: |
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| 83-Babar
Block, New Garden Town, Lahore. |
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| Phone
No.: (042) 5881974-75, 5839631 |
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| Fax
No.: (a42) 5881976 |
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| Email:
rashid.sadiq@cressoft.com.pk |
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| Dated:
September 26, 2000 |
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|
| NOTE: |
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|
| 1.
The Members Register will remain closed from November 07, 2000 to November
13, 2000 (both days |
|
| inclusive).Transfer
received in order at the Registered Office by the close of business hours on
November |
|
| 06,
2000 will be treated in time for the entitlement of Bonus Shares. |
|
|
| 2.
A member eligible to attend and vote at this meeting may appoint another
member as proxy to attend |
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| and
vote in the meeting. Proxies in order to be effective must be received by the
company at the |
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| Registered
Office not later than 48 hours before the time of holding the meeting. |
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| 3.
CDC account holders will further have to follow the under mentioned
guidelines as laid down in |
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| circular
No. 1 dated January 26, 2000 of the Securities and Exchange Commission of
Pakistan for |
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| attending
the meeting: |
|
|
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| i)
In case of individuals, the account holder or sub-account holder and/or-the
person whose |
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| securities
are in group account; and their registration details are uploaded as per the
Regu- |
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| lations,
shall authenticate his/her identity by showing his original National Identity
card (NIC) |
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| or
original passport at the time of attending the meeting. The shareholders
registered on CDS |
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| are
also requested to bring their Participants I.D. numbers and account numbers
in CDS. |
|
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| ii)
In case of corporate entity, the Board of Directors resolution/power of
attorney with specimen |
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| signature
of the nominee shall be produced (unless it has been provided earlier) at the
time |
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| of meeting. |
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| DIRECTORS'
REPORT |
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| Your
Directors have pleasure in presenting the Audited Accounts for the period
from July 1, 1999 |
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| to June 30, 2000. |
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| The
financial results of the company for the period under review are summarized
as follows: |
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|
Rupees in million |
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|
|
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| Revenue |
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|
173.943 |
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| Expenditure |
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|
130.421 |
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| Operating
Profit Before Provisions |
|
43.522 |
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| Provisions |
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|
9.739 |
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| Profit
before taxation |
|
33.783 |
|
| Provision
for taxation |
|
3.000 |
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| Profit
after taxation |
|
30.783 |
|
| Un-appropriated
profit brought forward |
|
0.015 |
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| Profit
available for appropriation |
|
30.798 |
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| Appropriations |
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| Transfer
to reserves under NBFI regulations |
|
6.157 |
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| Transfer to reserve for
deferred taxation |
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18.382 |
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| Un-appropriated
profit carried forward |
|
6.259 |
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| Net
profit for the year after charging all expenses, including allowance for
potential lease losses |
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| and
provision for doubtful finance amounted to Rs 30.783 million. |
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| An
amount Rs 18.382 million has been transferred to Reserve for Deferred
Taxation. With the |
|
| transfer
of this amount not only the compliance of policy for deferred taxation
prescribed by |
|
| the
SECP for the leasing companies has been achieved but also full provision for
the deferred |
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| taxation
has been made. |
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| The
performance of your company needs to be reviewed in the light of the economic
and |
|
| policy
factors affecting the business environment in general and the long term
investment climate |
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| in
particular, in the review period. |
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|
| ECONOMIC
SCENARIO |
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| Fiscal
2000 not only witnessed a significant change in the political scene in
October 1999 but |
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| also
a halt in the overall deterioration of the economy. A significant drop in
inflation rate, good |
|
| production
of major crops and a pick-up in textile sector's output provided the
much-needed |
|
| stability
to the economy. The economic managers strove hard to put the economy on a
respectable |
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| growth
path. They successfully implemented a Tax Amnesty Scheme yielding over Rs. 10
billion |
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| in
revenue and after tough negotiations with the traders imposed GST. |
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| The
positive indicators on supply side of the economy however were not reflected
in |
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| investments.
Thus the share of private investment as percent of GDP declined, and credit |
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| utilization
remained low. Efforts aimed at restoring investors confidence must continue.
The money |
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| market
was awash with liquidity during the review period. This in combination with
low investment |
|
| demand
made risk pricing highly competitive. |
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| OPERATING
RESULTS |
|
| Taking
into consideration the uncertain economic environment and increased
competition in |
|
| business
your company focused on retaining its market share in the lease market. New
leases |
|
| executed
during the period amounted to Rs 333 million (1999, Rs 331 million). The net
investment |
|
| in
leases is placed at Rs 768 million (1999, Rs 704 million). Lease income
during the review period |
|
| amounted
to Rs 116 million (1999, Rs 119 million). Income from other business
activities increased |
|
| from
Rs 53 million in 1999 to Rs 58 million in 2000. The average lease size
(excluding consumer |
|
| leasing)
is placed at Rs 1.560 million. The company posted a net profit after taxation
and provisions |
|
| of
Rs 30.783 million (1999, Rs 29.545 million). The post-tax earning per share
is placed at Rs. 1.53. |
|
|
| The
business strategy during the year targetted on market penetration, increased
emphasis on |
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| vehicle
leasing, better client service and expansion of the consumer leasing
activity. The lease |
|
| portfolio
of your company is prudently diversified over the major industrial and
services sectors |
|
| in
Pakistan. The individual exposure in any single sector (Textile) does not
exceed 12.95 percent |
|
| (1999
in Textile at 13 percent). |
|
|
| To
improve the risk profile of the lease portfolio a greater emphasis during the
period was placed |
|
| on
vehicle leasing. 43 percent of the new investment during the year went into
vehicles. Total |
|
| investment
in vehicles thus stood at 31.7 percent of the lease portfolio. Plant and
Machinery, |
|
| however,
remained the major leased asset at 64.3 percent of the portfolio followed by
office |
|
| equipment
at 4 percent. Weak business conditions placed pressures on recovery during
the |
|
| year.
However, the rentals collected during the period placed the recovery at 92%
(1999: 95%). |
|
| Some
cross defaults persist in the industry for which supportive actions are
needed by the government. |
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| The
long-term entity rating of your company is placed in the band of high credit
quality at |
|
| A
minus (A-), For short-term obligations it is placed at A2 indicating a low
expectation of credit risk. |
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| Your
company raised Rs. 110 million in long term credit from premier financial
institutions at competitive |
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| rates.
In addition short-term credits of Rs. 396 million were also negotiated. |
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| FUTURE
OUTLOOK |
|
| The
economic revival would basically depend upon the outcome of measures for
deepening |
|
| and
broadening of the tax base and an overall improvement in governance. A lower
fiscal |
|
| deficit
would enable the government to ensure macro economic stability while higher
revenue |
|
| mobilization
would make more resources available for public sector development programs, |
|
| a
key element for kick starting the economy. On the external side the
uncertainties relating to |
|
| IMF
funding are likely to be removed by the year-end. This would send a positive
signal to both |
|
| local
and foreign investors. However, given the time lag in responding to these
achievements, |
|
| the
demand outlook for investment financing is expected to remain lacklustre for
most part of |
|
| the
year. The competition in regard to pricing business risks would thus continue
unabated and |
|
| extend
to consumer financing as well. Your company intends to meet effectively the
competition |
|
| in
quality credit risks and retain its market share. |
|
|
| With
the objective of balancing the uncertainty in the economic environment with
the interest |
|
| of
shareholders as also to strengthen the equity base the directors have
recommended an issue |
|
| of
bonus shares out of capital reserves created for premium on issue of right
shares @ 16.67 percent |
|
| for
the year ended June 30, 2000. |
|
|
| YEAR
2000 COMPLIANCE |
|
| All
the systems and procedures and software and hardware packages have
successfully crossed |
|
| the
Y2K baseline. |
|
|
| ACKNOWLEDGEMENT |
|
| Consequent
to the election of directors the board has been reconstituted as follows Mr.
Aftab |
|
| A.
Khan, Mr. Ferozuddin A. Cassim, Mr. Istaqbal Mehdi, Mr. Mahmood Ahmed, Mr.
Nessar Ahmed, |
|
| Mr.
Rashid Ahmed and Mr. Saeed Jamal Tariq. The Board appreciates the valuable
contribution |
|
| made
by the outgoing directors during their tenure. |
|
|
| The
Board acknowledges the support of the regulatory authorities, banks and
lending institu- |
|
| tions.
The Board wishes to place on record its 'appreciation of the hard work and
dedication |
|
| shown
by the company personnel. |
|
|
| AUDITORS |
|
| The
auditors, Khalid Majid Husain Rahman, Chartered Accountants retire and being
eligible, |
|
| offer
themselves for re-appointment. |
|
|
| PATTERN
OF SHAREHOLDING |
|
| The
pattern of shareholding as on June 30, 2000, is annexed to this report. |
|
|
|
|
On behalf of the Board |
|
|
|
|
|
| September
26th, 2000 |
|
Javed A. Callea |
|
| Karachi |
|
Chief Executive |
|
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed balance sheet of Crescent Leasing Corporation
Limited as at June |
|
| 30,
2000 and the related profit and loss account and the statement of changes in
financial position |
|
| (cash
flow statement), together with the notes forming part thereof, for the year
then ended and |
|
| we
state that we have obtained all the information and explanations which to the
best of our |
|
| knowledge
and belief were necessary for the purposes of our audit and, after due
verification |
|
| thereof,
we report that: |
|
|
| a)
in our opinion, proper books of account have been kept by the Company as
required by the |
|
| Companies
Ordinance, 1984; |
|
|
| b)
in our opinion: |
|
|
| i)
the balance sheet and profit and loss account together with the notes thereon
have been |
|
| drawn
up in conformity with the Companies Ordinance, 1984 and are in agreement with |
|
| the
books of account and are further in accordance with accounting policies
consistently |
|
| applied; |
|
|
|
|
| ii)
the expenditure incurred during the period was for the purpose of the
Company's business; and |
|
|
| iii)
the business conducted, investments made and the expenditure incurred during
the period |
|
| were
in accordance with the objects of the Company; |
|
|
| c)
in our opinion and to the best of our information and according to the
explanations given |
|
| to
us, the balance sheet, profit and loss account and the statement of changes
in financial |
|
| position
(cash flow statement), together with the notes forming part thereof, give the |
|
| information
required by the Companies Ordinance, 1984 in the manner so required and |
|
| respectively
give a true and fair view of the state of the Company's affairs as at June
30, 2000 |
|
| and
of the profit and the changes in financial position for the year then ended;
and |
|
|
| d)
in our opinion, Zakat deductible at source, under the Zakat and Ushr
Ordinance, 1980, was deducted |
|
| by
the company and deposited in the Central Zakat Fund established under Section
7 of that |
|
| Ordinance. |
|
|
Khalid Majid Husain
Rahman |
|
|
|
Chartered Accountants |
|
| Karachi:
October 09, 2000 |
|
|
|
|
|
| BALANCE
SHEET AS AT JUNE 30, 2000 |
|
|
|
|
2000 |
1999 |
|
|
Note |
Rupees |
Rupees |
|
|
|
|
| SHARE
CAPITAL AND RESERVES |
|
|
| Authorised
capital |
|
|
|
| 30,000,000
ordinary shares of Rs. 10 each |
|
|
300,000,000 |
300,000,000 |
|
|
|
|
========== |
========== |
|
| Issued,
subscribed and paid-up capital |
|
3 |
172,500,000 |
172,500,000 |
|
| Reserves |
|
4 |
165,974,408 |
135,191,390 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
338,474,408 |
307,691,390 |
|
| DEFERRED
INCOME |
|
5 |
317,313 |
475,977 |
|
| LONG-TERM
FINANCES |
|
6 |
122,673,104 |
198,756,310 |
|
| LONG-TERM
CERTIFICATES OF INVESTMENT |
|
7 |
3,175,000 |
21,100,000 |
|
| LIABILITIES
AGAINST ASSETS SUBJECT |
|
|
|
| TO
FINANCE LEASES |
|
8 |
2,534,241 |
3,974,707 |
|
| LONG-TERM
DEPOSITS |
|
9 |
124,847,271 |
92,033,209 |
|
|
|
|
|
|
|
| CURRENT
LIABILITIES |
|
|
|
| Current
maturity of long-term liabilities |
|
10 |
161,717,990 |
103,122,410 |
|
| Current
maturity of assets subject to finance leases |
|
2,030,474 |
1,662,743 |
|
| Short-term
certificates of investment |
|
7 |
51,125,000 |
80,000,000 |
|
| Short-term
finances |
|
11 |
105,000,000 |
80,000,000 |
|
| Running
finances under mark-up arrangement |
|
12 |
37,228,966 |
75,972,271 |
|
| Creditors,
accrued and other liabilities |
|
13 |
26,111,837 |
26,239,049 |
|
| Proposed
dividend |
|
|
-- |
17,250,000 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
383,214,267 |
384,246,473 |
|
| COMMITMENTS |
|
14 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
975,235,604 |
1,008,278,066 |
|
|
|
|
========== |
========== |
|
|
| OPERATING
FIXED ASSETS |
|
15 |
14,647,906 |
17,059,171 |
|
|
|
|
|
|
| NET
INVESTMENT IN LEASES |
|
16 |
|
| Minimum
lease rental receivables |
|
|
7,560,850,721 |
739,150,538 |
|
| Residual value |
|
163,958,775 |
129,577,427 |
|
|
|
------------------ |
------------------ |
|
| Lease
contract receivables |
|
|
920,043,847 |
868,727,965 |
|
| Less:
Unearned finance income |
|
|
152,053,412 |
164,853,846 |
|
|
|
|
------------------ |
------------------ |
|
| Net
investment in leases |
|
767,990,435 |
703,874,119 |
|
|
|
|
| Less:
Current maturity |
|
|
313,014,165 |
270,162,303 |
|
| Allowance
for potential lease losses - General |
|
|
17,580,742 |
12,849,656 |
|
|
- Specific |
|
|
7,385,030 |
4,592,088 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
337,979,937 |
287,604,047 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
430,010,498 |
416,270,072 |
|
|
|
|
|
|
| LONG-TERM
INVESTMENTS |
|
17 |
32,268,136 |
31,764,507 |
|
| LONG-TERM
DEPOSITS, PREPAYMENTS |
|
|
|
| AND
DEFERRED COSTS |
|
18 |
7,392,319 |
13,053,360 |
|
|
|
|
|
| CURRENT
ASSETS |
|
|
|
| Current
maturity of net investment in leases |
|
|
313,014,165 |
270,162,303 |
|
| Short-term
finances |
|
19 |
5,961,364 |
4,623,036 |
|
| Advances,
deposits, prepayments and |
|
|
|
| other
receivables |
|
20 |
47,734,980 |
42,337,421 |
|
| Short-term
investments |
|
21 |
110,596,675 |
114,868,191 |
|
| Cash
and bank balances |
|
22 |
13,609,561 |
98,140,005 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
490,916,745 |
530,130,956 |
|
|
|
|
------------------ |
------------------ |
|
|
975,235,604 |
1,008,278,066 |
|
|
|
|
|
========== |
========== |
|
| The
annexed notes form an integral part of these financial statements. |
|
|
|
JAVED A. CALLEA |
|
AFTAB AHMED KHAN |
|
|
Chief Executive |
|
Chairman |
|
|
|
| Profit
and Loss Account |
|
| For
the Year Ended June 30, 2000 |
|
|
|
|
2000 |
1999 |
|
|
Note |
Rupees |
Rupees |
|
|
|
|
| Income
from lease operations |
|
|
115,669,155 |
118,758,255 |
|
| Income
on investments |
|
23 |
54,731,894 |
44,362,447 |
|
| Other income |
|
24 |
3,542,156 |
8,983,451 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
173,943,205 |
172,104,153 |
|
|
|
|
| Administrative
and operating expenses |
|
25 |
21,233,720 |
16,223,124 |
|
| Financial
charges |
|
26 |
109,132,068 |
115,303,712 |
|
| Amortisation
of deferred cost |
|
|
55,125 |
286,352 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
130,420,913 |
131,813,188 |
|
|
|
|
------------------ |
------------------ |
|
| Operating
profit before provisions |
|
43,522,292 |
40,290,965 |
|
|
|
------------------ |
------------------ |
|
| Allowance
for potential lease losses-General |
|
4,731,086 |
6,574,264 |
|
|
|
- Specific |
|
2,792,942 |
2,445,971 |
|
| Provision
for doubtful finance |
|
2,215,246 |
-- |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
9,739,274 |
9,020,235 |
|
|
|
|
------------------ |
------------------ |
|
| Profit
before taxation |
|
33,783,018 |
31,270,730 |
|
| Taxation |
|
28 |
3,000,000 |
1,726,192 |
|
|
|
|
------------------ |
------------------ |
|
| Profit
after taxation |
|
|
30,783,018 |
29,544,538 |
|
|
|
|
| Transfer
from general reserve |
|
|
-- |
8,161,438 |
|
| Unappropriated
profit brought forward |
|
15,310 |
117,538 |
|
|
|
|
------------------ |
------------------ |
|
| Profit
available for appropriation |
|
|
30,798,328 |
37,823,514 |
|
|
|
|
| Appropriations: |
|
|
|
| Transfer to: |
|
|
|
|
|
| -
reserve under NBFI rules |
|
|
(6,156,604) |
(5,908,908) |
|
| -
reserve for deferred taxation |
|
|
(18,382,455) |
(14,649,296) |
|
| -
proposed dividend @ Nil (1999: 10%) |
|
|
-- |
(17,250,000) |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
(24,539,059) |
(37,808, 204) |
|
|
|
|
------------------ |
------------------ |
|
| Unappropriated
profit carried forward |
|
|
6,259,269 |
15,310 |
|
|
|
|
========== |
========== |
|
| Earnings
per share - Basic |
|
29 |
1.53 |
1.47 |
|
|
- Diluted |
|
|
N/A |
N/A |
|
|
|
| The
annexed notes form an integral part of these financial statements. |
|
|
|
JAVED A. CALLEA |
|
AFTAB AHMED KHAN |
|
|
Chief Executive |
|
Chairman |
|
|
|
| Statement
of Changes in Financial Position (Cash Flow Statement) |
|
| For
the Year Ended June 30, 2000 |
|
|
|
|
2000 |
1999 |
|
|
Note |
Rupees |
Rupees |
|
|
|
|
| Cash
flows from operating activities |
|
|
| Profit
before taxation |
|
|
|
33,783,018 |
31,270,730 |
|
|
|
|
| Adjustments
for: |
|
|
|
| Amortization
of deferred income |
|
(158,664) |
-- |
|
| Amortization
of deferred costs |
|
55,125 |
286,352 |
|
| Depreciation |
|
|
4,048,891 |
1,511,452 |
|
| Financial
charges |
|
109,132,068 |
114,921,094 |
