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Ghandhara Leasing Company Limited
Annual Report 2000
Contents
Company Information
Notice of Annual General Meeting
Financial Highlights
Graphic Presentation
Pattern of Shareholding
Directors' Report
Auditors' Report to the Members
Balance Sheet
Profit & Loss Account
Cash Flow Statement
Statement of Changes in Equity
Notes to the Accounts
Company Information
BOARD OF DIRECTORS
1. Mr. C. Ahsanul Haq (Chairman/Chief Executive) Nominee of A1-Zamin Leasing Modaraba
2. Mr. Basheer Ahmed Chowdry Nominee of A1-Zamin Leasing Modaraba
3. Mr. Ansar Husain Nominee of A1-Zamin Leasing Modaraba
4. Sheikh Mohammad Farooq Nominee of A1-Zamin Leasing Modaraba
5. Mr. M. Moizul Haque Nominee of A1-Zamin Leasing Modaraba
6. Mr. Mohammad Zahid Nominee of Zahidjee Brothers (Pvt.) Limited
7. Mrs. Huma Zahid Nominee of Zahidjee Brothers (Pvt.) Limited
8. Ms. Aaliya K. Dossa Nominee of National Investment Trust
9. Mr. Anis Wahab Zuberi Nominee of National Investment Trust
10. Mr. A.G. Budhani Nominee of Investment Corporation of Pakistan
COMPANY SECRETARY LEGAL ADVISORS
Mr. M. Moizul Haque Shaukat Law Associates
217, Central Hotel Annexe
Abdullah Haroon Road
REGISTERED OFFICE Karachi
2nd Floor, State Life Building Phone: 5681495, 5686223
34th, The Mall Peshawar Cantt,
Peshawar.
SHARE REGISTRARS
THK Associates (Pvt.) Ltd.
KARACHI OFFICE Ground Floor
104-108 Kassam Court, Shaikh Sultan Trust
BC-9, Block-5, Clifton Karachi. Building No. 2
Phone: 111-111-303 Beaumont Road
Karachi-75530
BANKERS TO THE COMPANY Ph: 5686658-5685687
American Express Bank Ltd.
Allied Bank of Pakistan Ltd.
National Bank of Pakistan Ltd.
Standard Chartered Bank
The Bank of Tokyo
The Bank of Khyber
The Bank of Punjab
AUDITORS
Taseer Hadi Khalid & Company
Chartered Accountants
1st Floor, Shaikh Sultan Trust
Building No.2, Beaumont Road
Karachi-75530
Ph: 5681912, 5682290, 5680934, 5671761-63
Notice of Annual General Meeting
Notice is hereby given that the 9th Annual General Meeting of Ghandhara Leasing Company Limited will
be held on Tuesday, 16th January, 2001 at 2nd Floor, State Life Building, 34 The Mall,
Peshawar Cantt., Peshawar at 9:00 a.m. to transact the following business:
ORDINARY BUSINESS
* To receive, consider and adopt the Audited Accounts of the company for the year ended 30th June,
2000 together with Directors' Report and Auditors' Report thereon.
* To appoint Auditors and fix their remuneration. The present Auditors Messrs. Taseer Hadi Khalid
& Co., Chartered Accountants, retire and being eligible, offer themselves for re-appointment.
SPECIAL BUSINESS
To consider and approve, with or without modifications the following resolution as Special
Resolution:
"Resolved that the name of the company be and is hereby changed to A1-Zaamin Leasing Limited".
Further Resolved that clause-1 of Memorandum of Association be amended as under:
The name of the Company is "Al-Zaamin Leasing Limited".
Further Resolved that the above change in the name of the company shall be subject to approval by
the Registrar of Companies, Securities & Exchange Commission of Pakistan and any change in the
new name and or wording of this Special Resolution, if any, suggested by him or his office shall be
deemed to have the approval of this meeting.
Further Resolved that wherever the existing name appears in the Memorandum and Articles of
Association and other documents, may be substituted with the new name.
Further Resolved that the Chairman/Chief Executive be authorized to take steps necessary of
change of name.
OTHER BUSINESS
To transact any other business as may be placed before the meeting with the permission of
the Chair.
By Order of the Board
M. Moizul Haque
Karachi: 19th December, 2000 (Company Secretary)
Notes:
1. The Share Transfer Books of the company will remain closed from 8th January 2001 to
15th January, 2001 (both days inclusive).
2. A member entitled to attend and vote at this meeting may appoint another member as his /her
proxy to attend the meeting and vote for him / her. No person shall act as proxy who is not a
member of the Company. Proxies in order to be effective must be received by the Company not
less than 48 hours before the meeting.
3. Share holders are requested to immediately notify the company if any change in their addresses.
CDC Account Holders will further have to follow the undermentioned guidelines as laid
down in Circular 1 dated 26th January, 2000 issued by the Securities and Exchange
Commission of Pakistan:
A. For Attending the Meeting:
i. In case of individuals, the account holder or sub-account holder and/or the person whose
securities are in group account and their registration details are uploaded as per the Regulations,
shall, authenticate his identity by showing his original National Identity Card (NIC) or original
passport at the time of attending the meeting.
ii. In case of corporate entity, the Board of Directors' resolution/power of attorney with specimen
signature of the nominee shall be produced (unless it has been provided earlier) at the time of the
meeting.
B. For Appointing Proxies:
i. In case of individuals, the account holder or sub-account holder and/or the person whose
securities arc in group account and their registration details arc uploaded as per the Regulations,
shall submit the proxy form as per the above requirement.
ii. The proxy form shall be witnessed by two persons whose names, addresses and NIC numbers
shall be mentioned on the form.
iii Attested copies of NIC or the passport of the beneficial owners and the proxy shall be furnished
with the proxy form.
iv. The proxy shall produce his original NIC or original passport at the time of meeting.
v. In case of corporate entity the Board of Directors' resolution/power of attorney with specimen
signature shall be submitted (unless it has been provided earlier) alongwith proxy form to the
Company.
STATEMENT UNDER SECTION 160 OF THE COMPANIES ORDINANCE, 1984
This statement is annexed to the Notice of Annual General Meeting and sets out the material facts
concerning special business to be transacted at the meeting.
The change in the name of company has been proposed due to the following reasons:
Ghandhara Nissan Limited desired to change the name of company at the time of its
disinvestments by them to A1-Zamin Leasing Modaraba and Associates and to avail the
benefits of creditability and good will of A1-Zamin's name particularly with lenders.
None of the Directors have any special or other interest in the property or profits or the company
other than that as holders of ordinary shares in the capital of the company.
Financial Highlights
June-1996
PARTICULARS June-2000 June-1999 June-1998 June-1997 (18 months)
Balance Sheet (Rupees in Million)
Net Investment in Lease 192.11 352.01 538.56 519.82 496.88
Total Equity 88.24 109.38 147.94 172.53 160.77
Total Assets 242.41 401.98 612.67 631.29 581.05
Break-up Value (Amount in rupees) 10.68 13.24 17.91 20.89 19.46
Income Statement (Rupees in Million)
Gross Income 36.80 65.22 92.17 99.83 137.60
Financial Charges 29.63 58.24 72.71 67.34 87.67
Other Expenses/Provisions     23.31 44.18 41.30 16.13 26.31
Net (Loss)/Profit (21.14) (38.56) (24.59) 11.76 22.93
Lease Portfolio (Percentage)
Plant & Machinery 77.23 69.38 56.96 73.10 66.33
Equipment 4.58 5.65 9.20 10.31 9.23
Private Vehicles 8.01 6.12 8.79 7.05 9.67
Commercial Vehicles 10.19 18.85 25.05 9.54 14.77
Pattern of Shareholding
as at 30 June 2000
NO. OF HAVING SHARES SHARES HELD PERCENTAGE
SHARE FROM TO
HOLDERS
55 1 100 5500 .0665
312 101 500 144600 1.7516
149 501 1000 146400 1.7724
64 1001 5000 159500 1.9310
22 5001 10000 177100 2.1441
7 10001 15000 84700 1.0254
5 15001 20000 97500 1.1804
1 20001 25000 23500 .2845
1 25001 30000 27800 .3365
2 30001 35000 64500 .7809
2 50001 55000 104300 1.2627
1 85001 90000 87000 1.0533
1 95001 100000 100000 1.2106
1 335001 340000 337700 4.0885
1 495001 500000 500000 6.0534
1 510001 515000 513000 6.2108
1 590001 595000 592800 7.1771
1 705001 710000 708200 8.5741
1 940001 945000 943600 11.4241
1 1245001 1250000 1250000 15.1337
1 2190001 2195000 2192000 26.5384
------------------ ------------------ ------------------
630 8,259,700 100.0000
========== ========== ==========
Categories of Shareholders
As at 30 June 2000
PARTICULARS SHARE SHARE PERCENTAGE
HOLDERS HOLDING
INDIVIDUAL 606 954600 11.5573
INVESTMENT COMPANIES 1 500 .0063
INSURANCE COMPANIES 1 337700 4.0885
JOINT STOCK COMPANIES 12 2586000 31.3086
FINANCIAL INSTITUTIONS 7 1687900 20.4353
MODARABAS 2 2193000 26.5506
FOREIGN COMPANIES 1 500000 6.0534
------------------ ------------------ ------------------
TOTAL 630 8,259,700 100.0000
========== ========== ==========
Directors' Report
The Board of Directors of Ghandhara Leasing Company Limited is pleased to present 9th Annual Report
together with the Audited Accounts of the Company for the year ended 30th June, 2000.
Economic Scenario
The economy has shown a real GDP growth of 4.5 percent (1999: 3.2 percent) against the target of 5
percent. This recovery was possible due to agriculture sector on account of better cotton and wheat
crops. Manufacturing sector did not perform well and showed growth of 1.6 percent only. However,
service sector has shown a slight growth and stood at 4.5 percent against 4.1 percent last year.
External trade has also shown improvements but due to additional burden of increased oil prices on
Pakistan's economy, the foreign exchange position did not show any improvement.
During the year under review, leasing industry did not show any significant recovery as it is directly
related to the manufacturing sector. The industry is facing a number of problems including paucity of
leases from quality customers, rate-competition amongst the leasing companies and entry of some of
the banks and DFIs in the leasing sector offering very low rates. However, many leasing companies
have diversified their risks to attain the required volume of business and are doing car leasing and small
ticket leasing to small and medium organizations besides the usual corporate sector leasing.
Operating Results
Your company had been facing a difficult time since early 1998. The company's original sponsors were
facing difficulties in their industrial concern's operations, resultantly the lender banks reported their
overdues and defaults to the Credit Information Bureau (CIB) of State Bank of Pakistan. Your company's
CIB report was clean but due to negative CIB report of the sponsors, Ghandhara Leasing was facing
difficulty in raising additional funds for new leases. Your company somehow managed to achieve 12
times growth in 5 years (company started business with equity of Rs.50 million in 1992 and total assets
were Rs.631 million on 30th June, 1997). During this period your company also paid 40% cash dividend.
To resolve their problems, sponsors of the company decided to disinvest their holdings in your company.
At that moment borrowings ofrs.399 million by your company were outstanding. To keep afloat, your
company decided that full lease rental recovery would be used to pay markup at due dates and balance
amount to reduce principal outstandings where lenders demand repayment. During last 2 I/2 years, i.e.,
upto 30th June, 2000 your company recovered Rs.512 million from its lessees, most of which was used
to meet operating expenses, payment of financial charges and repayment of loans. only a small sum
was used for writing new business. Your company incurred losses in the years 1998 to 2000 mainly due
to suspension of income and setting aside provisions on some customers who are defaulters to the
financial sector across the board.
In these circumstances A1-Zamin Leasing Modaraba and its Associates, Zahidjee Brothers (Pvt.) Limited
decided to acquire controlling shares and management of your Company from Ghandhara Nissan
Limited.
A1-Zamin Leasing Modaraba is a multipurpose modaraba extending lease financing since 1992. It is one of
the best managed modarabas, paying dividend to its certificate holders. A1-Zamin Leasing Modaraba holds
credit rating B-3 (B-Three) which is described as "Good Credit Quality, Sound Financial Condition, Financial
condition protection factors are adequate".
Al-Zamin Leasing Modaraba and its Associates have nominated 6 Directors on the company's Board. The
new sponsors are fully committed to growth of your company as the capability of handling of leasing
business of A1-Zamin Group has been substantially enhanced. A1-Zamin's nominated Directors are fully
involved in company's business for better coordination between the entities. Although, for the time being,
legal status of both entitles will remain independent; a merger in the future may be in the best interest of
shareholders, in view of the capital adequacy requirements of Rs.200 million under the Leasing Rules,2000.
Securities & Exchange Commission of Pakistan (SECP) approved the purchase of controlling shares by A1-
Zamin Leasing Modaraba and its Associates and also the change of directors, on 22nd April,2000.
As on 30th June,2000 the total assets of the company have been reduced to Rs.242 million from Rs.401
million as no lease was executed during the previous year and net recovery was used to repay loans and
other financial commitments. The company has incurred a loss after tax of Rs.21. 142 million against
Rs.38.561 million of the last year. Total revenue during the year was reduced to Rs.36.798 million against
Rs.65.218 million of the last year as old leases matured and new leases were not executed during the year.
Total expenses were reduced to Rs.52.941 million against Rs. 102.412 million of the last year mainly due
to reduction ofrs.28.605 million in financial charges and reduction in provisions for potential lease losses.
A number of recoveries were also made from a number of defaulted lessees. Admin expenses show increase
due to payment of gratuity amounting to Rs. 4.000 million to the outgoing Chief Executive.
A provision of Rs.5 million on account of current taxation has been created to meet the tax liability, which
may occur due to reversal of depreciation as during the last two years no major lease disbursement was
made. To meet the SECP guidelines, your management has also decided to create a capital reserve for
deferred tax amounting to Rs.4,079,419/=. Since the lease portfolio has been reduced, as explained above.
a sum of Rs.4.1 million was transferred from the contingency reserve as per our policy.
Future Prospects
Your management is confident that better days are ahead and the takeover by A1-Zamin will significantly
benefit the company. A1-Zamin holds respectable position in lenders market. Immediately after the takeover,
the lenders of the company agreed to renew our facilities amounting to Rs.87 million, which includes
conversion of Rs.62 million from short-term to long term facilities.
Further, a short-term loan of Rs.30 million to a sister concern of the previous sponsors was recovered
subsequent to the close of accounts.
Considering Al-Zamin Leasing Modaraba and Zahidjee Brothers (Pvt.) Limited as our strength, DCR-VIS
the Credit Rating Agency has rated our COIs as Investment Grade i.e. Triple B Minus (BBB-), which is
described as:
"Adequate credit quality, Protection factors are reasonable and sufficient, Risk factors are considered variable
if changes occur in the economy."
The company is concentrating on BMR, small ticket leasing, car leasing and is avoiding green field projects
due to high risks.
Your company is also committed to introducing new products. "ANY CAR" is the first introduction, which
is targeted to individual customer that allows leasing of new and used cars upto 3 to 4 years old.
However, uncertainty remains in the forefront. It is expected that the power crisis being experienced for
the last few months will create further delays in recovery of rentals, which in turn will increase financial
cost of the company. However, textile and IT sectors have witnessed an upsurgence, which we intend to
capitalize.
Our economy is passing through a transitory period of adjustments and therefore, your company is expected
to expose to mismatching of funds and markup rates.
The Government is doing its best particularly to control revenue expenditure and is also fully committed
to multifarious reforms, but the revival of leasing sector including your company is dependent on the overall
revival of the economy.
Directors
M/s. C. Ahsanul Haq, Basheer A. Chowdry, Ansar Husain and Sheikh Mohammad Farooq nominees of A1-
Zamin Leasing Modaraba and Mr. Mohammad Zahid and Ms. Huma Zahid, nominees of Zahidjee Brothers
(Pvt) Limited had succeeded M/s. Raza Kuli Khan Khattak, Lt. Gen. (Retd) Ali Kuli Khan Khattak, Ahmed
Kuli Khan Khattak, Jamil Ahmed Shah, Mushtaq Ahmed Khan and K.U. Rehman due to purchase of
Controlling Shares by A1-Zamin Leasing Modaraba and Zahidjee Brothers (Pvt.) Limited and Associates.
Mr. Michio Kuwahara had resigned subsequent to close of accounts and Mr. M. Moizul Haque was appointed
director to fill casual vacancy.
Mr. Haroon Ahmed Zuberi had resigned as Chief Executive of the Company and Mr. C. Ahsanul Haq was
appointed as Chairman/Chief Executive of the Company by the Board of Directors. Mr. A.W. Zuberi nominee
of National Investment Trust (NIT) has succeeded Mr. Nasim Beg due to latters resignation from NIT.
The Directors place on record their appreciation of the services of outgoing Chief Executive and Directors,
Information Technology
The company has successfully handled Y2K problem.
Staff
The Board places on record its appreciation for the performance of all staff members particularly in difficult
days.
Auditors
The present Auditors M/s. Taseer Hadi Khalid & Co., Chartered Accountants retire and being eligible offer
themselves for re-appointment.
Pattern of Shareholding and Loss per share
The pattern of shareholding as on 30th June,2000 and loss per share are shown on page number 10 and 16
respectively.
On behalf of the Board
C. Ahsanul Haq
Karachi: 19th December, 2000 Chairman and Chief Executive
Auditors' Report to the Members
We have audited the annexed balance sheet of Ghandhara Leasing Company Limited as at 30th June 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 are 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 the 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 account have been kept by the company as required by the
Companies Ordinance, 1984;
b) in our opinion:
i) the balance sheet and profit and loss account together with the notes thereon have been drawn
up in conformity with the Companies Ordinance, 1984, and are in agreement with the books of
account and are further in accordance with accounting policies consistently applied;
ii) the expenditure incurred during the year was for the purpose of the company's business; and
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
manners so required and respectively give a true and fair view of the state of the company's affairs as
at 30th June 2000 and of the loss, its cash flows and changes in equity for the year then ended; and
d) In our opinion no Zakat was deducted at source under the Zakat and Ushr Ordinance, 1980
(XVIII of 1980).
Date: 19th December, 2000 Taseer Hadi Khalid & Co.
Karachi Chartered Accountants
Balance Sheet as at 30 June 2000
ASSETS Note 2000 1999
OPERATING FIXED ASSETS 3 5,031,854 5,889,840
LONG TERM DEPOSITS 405,322 307,322
LONG TERM INVESTMENTS 4 4,041,187 3,951,187
NET INVESTMENT IN LEASE FINANCE - Secured 5 34,937,098 124,117,091
DEFERRED COST 6 -- 474,227
CURRENT ASSETS
Current maturity of net investment in lease finance and
overdue lease rentals 7 157,175,606 227,894,346
Federal Investment Bond 8 50,000 50,000
Short term advances-Secured 9 29,935,415 30,056,780
Advances, deposits, prepayments and other receivables 10 13,788,911 8,772,519
Cash and bank balances 11 593,599 468,352
------------------ ------------------
201,543,531 267,241,997
------------------ ------------------
Rupees 245,958,992 401,981,664
========== ==========
EQUITY AND LIABILITIES
SHARE CAPITAL 12 82,597,000 82,597,000
SHARE PREMIUM 48,895,500 48,895,500
RESERVES 13 19,510,996 19,531,577
ACCUMULATED LOSS (59,213,760) (41,642,343)
------------------ ------------------
91,789,736 109,381.73
LONG TERM FINANCES-Secured 14 35,406,514 9,744,859
CERTIFICATES OF INVESTMENT 15 1,306,491 12,196,991
LONG TERM DEPOSITS 16 22,257,799 43,780,052
CURRENT LIABILITIES
Current maturity and installments due of long term finances 17 10,410,133 29,442,415
Current maturity of long term deposits 16 25,777,536 17,941,253
Certificates of Investment 15 & 18 10,817,030 47,875,029
Short term Musharika-Secured 19 10,000,000 --
Short term finances-Secured 20 22,145,534 113,811,212
Accrued expenses and other liabilities 21 6,154,123 12,859,773
Provision for taxation 9,476,046 4,476,046
Unclaimed dividend 418,050 472,300
------------------ ------------------
95,198,452 226,878,028
COMMITMENTS ------------------ ------------------
Rupees 245,958,992 401,981,664
========== ==========
These accounts should be read in conjunction with the attached notes.
DIRECTOR CHIEF EXECUTIVE
Profit and Loss Account
for the year ended 30 June2000
Note 2000 1999
REVENUE
Lease income 22 35,278,547 64,587,893
Mark-up on short term advances 1,319,572 798,851
Other income/(charges) 23 200,601 (168,885)
------------------ ------------------
36,798,720 65,217,859
EXPENDITURE
Administrative expenses 24 18,701,698 16,816,706
Financial charges 25 29,630,893 58,235,786
Amortisation of deferred cost 474,221 474,234
Provision against repossessed asset -- 195,825
Provision for diminution in value of investments -- 224,849
Provision for potential lease losses 583,906 30,533,736
Reversal of separation benefits -- (4,068,900)
------------------ ------------------
49,390,718 102,412,236
------------------ ------------------
LOSS BEFORE TAXATION (12,591,998) (37,194,377)
TAXATION
Current 5,000,000 1,161,876
Prior -- 204,501
------------------ ------------------
5,000,000 1,366,377
------------------ ------------------
LOSS AFTER TAXATION (17,591,998) (38,560,754)
ACCUMULATED LOSS BROUGHT FORWARD (41,642,343) (7,552,954)
------------------ ------------------
(59,234,341) (46,113,708)
APPROPRIATIONS
Transfer from contingency reserve 4,100,000 4,471,365
Transfer to capital reserve for deferred tax (4,079,419) --
------------------ ------------------
20,581 4,471,365
ACCUMULATED LOSS CARRIED FORWARD Rupees (59,213,760) (41,642,343)
------------------ ------------------
LOSS PER SHARE 28 2.13 4.67
========== ==========
These accounts should be read in conjunction with the attached notes.
DIRECTOR CHIEF EXECUTIVE
Cash Flow Statement
for the year ended 30 June 2000
2000 1999
CASH FLOWS FROM OPERATING ACTIVITIES
Loss before taxation (12,591,998) (37,194,377)
Adjustment for:
Depreciation 868,920 1,045,655
Amortisation of deferred cost 474,221 474,234
Accrued mark-up 29,630,893 58,095,991
Provision for potential lease losses 583,906 30,533,736
Provision for diminution in value of investments -- 224,849
Provision for gratuity 3,001,675 633,179
Reversal of separation benefits -- (4,068,900)
Income on investments (200,601) (209,264)
Loss on sale of fixed assets -- 609,919
------------------ ------------------
21,767,016 50,145,022
Changes in operating assets and liabilities
Increase in long term deposits (98,000) (76,400)
Decrease in investment in lease finance 143,851,904 223,568,249
Decrease/(Increase) in overdue lease rentals 15,462,923 (67,554,229)
Decrease in advance against lease commitments -- 7,529,750
Decrease in short term advances 121,365 11,105,633
Decrease in advances, deposits, prepayments and other receivables (2,708,408) 5,893,813
Decrease in long term deposits (13,685,970) (16,283,682)
Increase/(Decrease) in accrued expenses and other liabilities 928,509 (1,530,842)
------------------ ------------------
143,872,323 162,652,292
------------------ ------------------
165,639,339 212,797,314
Gratuity paid (4,649,200) --
Separation benefits paid -- (630,000)
Mark-up paid (35,617,527) (59,322,693)
Taxes paid (2,307,978) (2,546,417)
------------------ ------------------
Net cash generated in operating activities 123,064,634 150,298,204
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to fixed assets (39,350) (455,000)
Additions to investment (90,000) --
Mark-up on Federal Investment Bond 142,500 142,500
Income from deposit accounts -- 9,880
Dividend income - net 58,101 56,884
Proceeds from sale of fixed assets 28,416 32,001
------------------ ------------------
Net cash used in investing activities 99,667 (213,735)
CASH FLOWS FROM FINANCING ACTIVITIES
Long term finances 67,629,373 (22,659,314)
Certificates of investment (47,948,499) (106,274,970)
Short term Musharika 10,000,000 --
Short term finances (91,665,678) (21,113,886)
Dividend paid (54,250) 9,425
------------------ ------------------
Net cash used in financing activities (123,039,054) (150,038,745)
------------------ ------------------
Net increase in cash and bank balances 125,247 45,724
Cash and bank balances at beginning of the year 468,352 422,628
------------------ ------------------
Cash and bank balances at end of the year Rupees 593,599 468,352
========== ==========
DIRECTOR CHIEF EXECUTIVE
Statement of Changes in Equity
as at 30 June 2000
Share Share Capital Reserves Contingency (Accumulated Total
Capital Premium Statutory Deferred Reserve losses)/
Tax Unappropriated
profit
Balance as at 30 June 1998 82,597,000 48,895,500 13,511,559 -- 10,491,383 (7,552,954) 147,942,488
Loss for the year 1998-99 -- -- -- -- -- (38,560,754) (38,560,754)
Transferred -- -- -- -- (4,471,365) 4,471,365 --
------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------
Balance as at 30 June 1999 82,597,000 48,895,500 13,511,559 -- 6,020,018 (41,642,343) 109,381,734
Loss for the year 1999-2000 -- -- -- -- -- (17,591,998) (17,591,998)
Reserve for deferred tax -- -- -- 4,079,419 -- (4,079,419) --
Transferred -- -- -- -- (4,100,000) 4,100,000 --
------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------
Balance as at 30 June 2000 82,597,000 48,895,500 13,511,559 4,079,419 1,920,018 (59,213,760) 91,789,736
========== ========== ========== ========== ========== ========== ==========
Notes to the Accounts
for the year ended 30 June 2000
1. STATUS AND NATURE OF BUSINESS
Ghandhara Leasing Company Limited was incorporated on 12th May 1991 as a public limited
company under the Companies Ordinance, 1984 and was listed on all the Stock Exchanges in
Pakistan. During the year ended 30th June 1997, the name of the company was changed from Ghemni
Leasing Company Limited to Ghandhara Leasing Company Limited
Its principal activity is leasing of machineries, equipments and vehicles. Other activities are short
term advancing and investment in securities.
1.1 Change of ownership
Ghandhara Nissan Limited and Marubeni Corporation of Japan held 35% and 6% share capital
of the company. On 19th April 2000 these shares were sold to A1-Zamin Leasing Modaraba and
Zahidjee Brothers (Private) Limited and effectively the controlling interest was acquired by A1-
Zamin Leasing Modaraba and Zahidjee Brothers (Private) Limited. Approval from Securities and
Exchange Commission of Pakistan has been received
2. SIGNIFICANT ACCOUNTING POLICIES
2.1 Accounting Convention
These accounts have been prepared under the historical cost convention.
2.2 Statement of Compliance
These financial statements have been prepared in accordance with the accounting standards issued
by the International Accounting Standards Committee (IASC) and interpretations issued by the
Standing Interpretations Committee of the IASC, as applicable in Pakistan and the requirements of
the Companies Ordinance, 1984.
2.3 Operating fixed assets and depreciation
The cost of operating fixed assets is depreciated over the useful life of related assets under the
declining balance 1nethod; full year's depreciation is charged on assets acquired during the year,
whereas no depreciation is charged in the year of disposal. Gains and losses on disposal of assets
are included in income currently. Normal repairs and maintenance are charged to income as and
when incurred.
2.4 Investments
Long term investments are stated at cost less provision for diminution in value to recognise a
decline other than temporary. Short term investments are valued at lower of cost and market value
determined on an aggregate portfolio basis. Cost is determined on moving average basis and the
market values are taken from closing rates of the Karachi Stock Exchange (Guarantee) Limited on
the last working day of the income year.
2.5. Deferred cost
This is amortised over a period of five years.
2.6. Net investments in lease finance
This is stated at cost less specific provision. Specific provision is made in accordance with the
requirements of Non Bank Financial Institutions Regulations issued by the State Bank of Pakistan.
2.7. Revenue recognition
Lease revenue
The company follows the finance method in accounting for lease income. Under this method, the
unearned lease income (excess of the sum of total lease rentals and estimated residual value over
the cost of leased assets) is deferred and taken to income over the term of lease so as to produce a
constant periodic rate of return on the outstanding net investment in lease
Unrealised lease income is suspended, where necessary, in accordance with the requirements of Non
Bank Financial Institutions Regulations issued by the State Bank of Pakistan.
Commitment charges, gains on termination of lease contracts, documentation charges, late payment
surcharge and other lease income are recognised as income when they are realised.
Markup income
This is recognised on a time proportion basis.
Dividend income
This is recognised at the time of closure of share transfer books of the company declaring the dividend.
Capital gains and losses
These are recorded on the date of sale of investment.
2.8. Foreign Currencies
Foreign Currency transactions are translated into Pak Rupees at exchange rates prevailing on the
date of the transaction. Assets and liabilities in foreign currencies at the year end are translated into
Pak Rupees at the rates of exchange prevailing at the balance sheet date. Exchange gains and losses
are included in the profit and loss account currently.
2.9. Taxation
Current
The charge for current taxation is based on taxable income at the current rates of taxation after
taking into account tax credits and tax rebates, if any. Income for the purposes of computing
current taxation is determined under the provision of the tax laws whereby lease rentals received or
receivable are deemed to be income.
Deferred
The company accounts for deferred taxation using the liability method on all major timing
differences. Deferred tax is not provided if it can be established with reasonable probability that
these differences will not reverse in the foreseeable future. However, deferred tax debits are not
accounted for.
2.10. Staff retirement benefits
Defined contribution plan
The company operates an approved provident fund scheme for all its eligible employees. Equal
monthly contributions are made, both by the company and its employees, to the fund at the rate of
7.5 per cent of basic salary
Defined benefit plan
The company operates an approved gratuity fund scheme for all its eligible employees. Provision
is made for all eligible employees for company' s obligation under the plan as approved by the
Board of Directors.
3. OPERATING FIXED ASSETS - At cost less accumulated depreciation
COST Rate DEPRECIATION
As at 1 Additions Disposals As at 30 % As at 1 For the Disposals As at 30 Written down
July 1999 June 2000 July 1999 year June 2000 value as at 30
June 2000
Furniture and fixtures 1,227,468 -- -- 1,227,468 10 619,017 60,845 -- 679,862 547,606
Office equipments 4,175,088 39,350 -- 4,214,438 10 1,710,539 250,390 -- 1,960,929 2,253,509
Vehicles 5,504,881 -- (55,500) 5,449,381 20 2,688,041 557,685 (27,084) 3,218,642 2,230,739
------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------
2000 Rupees 10,907,437 39,350 (55,500) 10,891,287 5,017,597 868,920 (27,084) 5,859,433 5,031,854
========== ========== ========== ========== ========== ========== ========== ========== ==========
1999 Rupees 11,265,937 455,000 (813,500) 10,907,437 4,143,522 1,045,655 (171,580) 5,017,597 5,889,840
========== ========== ========== ========== ========== ========== ========== ========== ==========
3.1 Disposal of Fixed Assets
Mode of Cost Accumulated Book value Sales Particulars of buyers Particulars of assets sold
disposal depreciation proceeds
Negotiation 55,500 27,084 28,416 28,416 Mr. Shaheen Akhtar Suzuki Samurai
2000 1999
4. LONG TERM INVESTMENTS
Federal Investment Bonds 4.1 1,040,000 950,000
Listed securities 4.2 3,001,187 3,001,187
------------------ ------------------
Rupees 4,041,187 3,951,187
========== ==========
4.1 Federal Investment Bonds
This investment has been made to meet the liquidity requirement under the Non Bank Financial Institutions Regulations
issued by the State Bank of Pakistan. The bonds are maturing from December 2001 to April 2005 and carry markup at a rate of 15 per
cent per annum payable on half yearly basis. The face value of these bonds is Rs. 1,040,000.
4.2. Listed Securities
Number of Cost
shares/certificates
2000 1999 2000 1999
Mutual Funds
14,100 14,100 19th ICP Mutual Fund 238,290 238,290
Modarabas
32,500 32,500 First Elite Capital Modaraba 152,750 152,750
51,020 51,020 First Punjab Modaraba 471,935 471,935
36,500 36,500 First Mehran Modaraba 178,850 178,850
1,070 1,070 First HBL Modaraba 7,223 7,223
Leasing Companies
29,700 29,200 Natover Motor Lease Limited 292,000 292,000
5,500 5,500 Saudi Pak Leasing Company Limited 103,251 103,251
Investment Companies/Banks
3,681 3,681 Al-Faysal Investment Bank Limited 113,383 113,383
30,500 30,500 A1-Towfeek Investment Bank Limited 800,625 800,625
30,056 25,047 Bank Al-Habib Limited 588,750 588,750
2,509 2,509 Crescent Investment Bank Limited 83,655 83,655
36,500 36,500 Pakistan Industrial Credit and Investment Corporation Ltd. 958,125 958,125
15,208 15,208 Prime Bank Ltd. 324,875 324,875
Textile Spinning
5,000 5,000 Faisal Spinning Mills Limited 76,250 76,250
4,536 4,536 Saif Textile Mills Limited 10,305 10,305
Textile Composite
69 69 Kohinoor Textile Mills Limited 966 966
Sugar and Allied
1,710 1,710 Sanghar Sugar Mills Limited 36,604 36,604
2,156 2,156 Shahmurad Sugar Mills Limited 27,000 27,000
Cement
52,625 52,625 Cherat Cement Company Limited. 3,104,875 3,104,875
17,460 17,460 D.G. Khan Cement Company Limited. 744,072 744,072
19,565 17,787 Essa Cement Industries Limited 433,400 433,400
Chemical and Pharmaceutical
15,000 15,000 Biafo Industries Limited 157,500 157,500
5,000 5,000 Wah Noble Chemicals Limited 230,000 230,000
Paper and Board
29,040 29,040 Century Paper and Board Mills Limited 907,500 907,500
Energy
45,017 45,017 Sui Northern Gas Pipelines Limited 943,575 943,575
------------------ ------------------
10,985,759 10,985,759
Provision for diminution in value (7,984,572) (7,984,572)
------------------ ------------------
Rupees 3,001,187 3,001,187
========== ==========
4.3 All the holdings are in modaraba certificate and ordinary shares of Rs. 10 each.
4.4 The aggregate market value of investments in listed securities as at 30th June 2000 amounted to
Rs. 4,620,690 (1999: Rs. 3,001,187).
2000 1999
5. NET INVESTMENT IN LEASE FINANCE
Lease rentals receivable 199,345,970 375,387,556
Estimated residual value of leased assets 51,227,194 67,640,594
------------------ ------------------
Minimum lease payments 250,573,164 443,028,150
Unearned income (15,687,685) (48,827,844)
------------------ ------------------
Present value of minimum lease payments 234,885,479 394,200,306
Provision for potential lease losses (42,772,775) (42,188,869)
Current maturity (79,439,112) (134,694,929)
Overdue lease rentals (77,736,494) (93,199,417)
------------------ ------------------
Rupees 34,937,098 124,117,091
========== ==========
5.1.
2000 1999
Not later Later than Total Not later Later than Total
than one one year than one one year
year and less year and less
than five than five
years years
(Rupees)
Lease rentals receivables 124,028,579 75,317,391 199,345,970 210,820,661 164,566,895 375,387,556
Residual value of leased assets 45,708,825 5,518,369 51,227,194 34,059,873 33,580,721 67,640,594
------------------ ------------------ ------------------ ------------------ ------------------ ------------------
Minimum lease payments   169,737,404 80,835,760 250,573,164 244,880,534 198,147,616 443,028,150
Unearned lease income (12,561,798) (3,125,887) (15,687,685) (16,986,188) (31,841,656) (48,827,844)
Provision for potential lease losses (42,772,775) -- (42,772,775) (42,188,869) -- (42,188,869)
------------------ ------------------ ------------------ ------------------ ------------------ ------------------
Net investment in lease finance  114,402,831 77,709,873 192,112,704 185,705,477 166,305,960 352,011,437
========== ========== ========== ========== ========== ==========
The company has entered into various lease agreements with mark-up rates ranging from 19% to
27% per annum. The agreements usually are for three to five years period.
In certain lease, the company has security, in addition to leased assets, in the form of corporate/personal
guarantee of associated companies/directors.
5.2 In terms of the requirements of Rule 7(1) (ii) of the Leasing Companies (Establishment and
Regulations) Rules, 1996, the company's aggregate exposure under lease financing exceeding
20 per cent of the paid up capital and free reserves in respect of a public limited company
amounted to Rs. 42,981,386 (1999: Rs. 43,894,182).
2000 1999
6. DEFERRED COST
Right share issue expenses 2,371,170 2,371,170
Amortised to date (2,371,170) (1,896,943)
------------------ ------------------
Rupees -- 474,227
========== ==========
7. CURRENT MATURITY OF NET INVESTMENT IN
LEASE FINANCE AND OVERDUE LEASE RENTALS
Current maturity of net investment in lease finance 79,439,112 134,694,929
overdue lease rentals 77,736,494 93,199,417
------------------ ------------------
Rupees 157,175,606 227,894,346
========== ==========
8. FEDERAL INVESTMENT BOND
This bond has matured on 14th July 1995.
9. SHORT TERM ADVANCES - Secured
These include financing given to Ghandhara Industries Limited (Formerly National Motors
Limited) amounting to Rs. 30,000,000 at a mark-up rate of 18.50 percent per annum payable
in nine monthly installments. The advance is secured by equitable mortgage on a plot of land owned
by Ghandhara Industries Limited (Formerly National Motors Limited). However, subsequent to
the year end this advance was received by the company.
These also include financing amounting to Rs. 26,388 given to an individual and carry mark-up
at the rate of 21 percent per annum payable in 35 equal installments by May 2002. This
advances is secured by lien on certificates of investment issued by Company itself.
10. ADVANCES, DEPOSITS, PREPAYMENTS AND OTHER RECEIVABLES
Advances
-Staff 94,938 116,703
-Taxation 9,087,342 6,779,358
Advance for Consultant 3,550,000 --
Markup receivable 142,500 --
C.E.D. Receivable 565,055 111,400
Deposits -- 129,600
Prepayments 348,595 458,051
Accrued mark-up on short term advances 481 6,257
Receivable against sale of repossessed asset -- 954,175
others -- 216,975
------------------ ------------------
Rupees 13,788,911 8,772,519
========== ==========
11. CASH AND BANK BALANCES
Cash with State Bank of Pakistan 11.10 220,000 220,000
Cash with commercial banks in current accounts 342,177 208,172
Cash with commercial bank in saving account -- 276
Cash with commercial banks in deposit accounts 31,422 39,904
------------------ ------------------
Rupees 593,599 468,352
========== ==========
11.1. This has been kept to meet the liquidity requirements under the Non Bank Financial Institutions
Regulations issued by the State Bank of Pakistan.
12. SHARE CAPITAL
Authorised
20,000,000 ordinary shares of Rs. 10 each 200,000,000 200,000,000
========== ==========
Issued, subscribed and paid up
8,259,700 ordinary shares of Rs. 10 each
fully paid in cash 82,597,000 82,597,000
========== ==========
15. RESERVES
Statutory reserve 13.1 13,511,559 13,511,559
Capital reserve for deferred tax 26 4,079,419 --
Contingency reserve 13.2 1,920,018 6,020,018
------------------ ------------------
Rupees 19,510,996 19,531,577
========== ==========
13.1 In accordance with the Non Bank Financial Institutions Regulations issued by the State Bank of
Pakistan, company is required to transfer 20 per cent of its after tax profit to statutory reserve
until the reserve equals its .paid up share capital. Thereafter, 5 per cent of profit after tax is
required to be transferred to the reserve.
13.2 Contingency Reserve
As at 1st July 1999 6,020,018 10,491,383
Transferred to profit and loss account (4,100,000) (4,471,365)
------------------ ------------------
as at 30th June 2000 Rupees 1,920,018 6,020,018
========== ==========
This is being maintained at the rate of 2 per cent of the present value of minimum lease payments
as an appropriation from profit available for appropriation for potential lease losses which can
reasonably be anticipated.
14. LONG TERM FINANCES - Secured
Finance A -- 12,299,537
Finance B -- 4,750,000
Finance C 14.1 3,072,517 7,292,147
Finance D 14.2 5,744,130 6,505,771
Finance E 14.3 17,000,000 --
Finance F 14.4 20,000,000 --
------------------ ------------------
45,816,647 30,847,455
Current maturity 17 (10,410,133) (21,102,596)
------------------ ------------------
Rupees 35,406,514 9,744,859
========== ==========
14.1 This represents a credit facility obtained from a development financial institution and carries
mark-up at a rate of 20% per annum. The principal and mark-up is payable in twelve equal
quarterly installments of Rs 1,128,254 from July 1998 to April 2001. The facility is secured by
first charge ranking pari passu on the leased assets of the company.
14.2 This represents a credit facility obtained from a development financial institution for three years,
which carries a mark-up rate of 20.5% per annum. The principal and mark-up is payable in
twelve equal quarterly installments of Rs. 1,136,222 from February 1999 to November 2001. The
facility is secured by pari passu charge on leased assets of the company.
14.3 This represents financing obtained from a financial institution and carries mark-up at a rate of
18 % per annum. Payment is to be made in equal quarterly installments in 3 years. The facility is
secured by first pari passu charge on assets of Ghandhara Leasing Company Limited.
14.4 This represents financing obtained from a financial institution and carries mark-up at a rate of
17.5% per annum. Mark-up is to be recovered quarterly from July 2000. The principal amount is
to be re-paid on 30th June, 2002. The facility is secured by first pari passu charge on leased assets of
the company.
15. CERTIFICATES OF INVESTMENT
Certificates of Investment 12,123,521 60,072,020
Current Maturity 15.1 (10,817,030) (47,875,029)
------------------ ------------------
Rupees 1,306,491 12,196,991
========== ==========
15.1 These represents the mobilization of funds under the scheme of certificates of investment
introduced with the permission of Corporate Law Authority (now Securities and Exchange
Commission of Pakistan). The certificates are for terms ranging from three months to five years and
carry mark-up ranging fr6m 16% to 19% per annum.
16. LONG TERM DEPOSIT
Lease key money 16.1 48,035,335 61,721,305
Current maturity (25,777,536) (17,941,253)
------------------ ------------------
Rupees 22,257,799 43,780,052
========== ==========
16.1 This represents interest free security deposits received from lessees against lease contracts and
are adjustable at the expiry/termination of the respective leases.
17. CURRENT MATURITY AND INSTALLMENTS DUE OF
LONG TERM FINANCES
Current maturity of long term finances 10,410,133 21,102,596
Installments due of long term finances -- 8,339,819
------------------ ------------------
Rupees 10,410,133 29,442,415
========== ==========
18. CERTIFICATES OF INVESTMENT
These include certificates of investment of Rs. 10,000,000 issued to a development financial
institution.
19. SHORT TERM MUSHARIKA-Secured
This represents a placement made by an associated leasing modaraba carrying a markup at a rate
of 15% per annum. The placement will mature on 18th August, 2000.
20. SHORT TERM FINANCE -Secured
Finance A -- 9,298,029
Finance B -- 603,328
Finance C -- 6,956,908
Finance D 20.1 21,645,534 46,452,947
Finance E -- 20,000,000
Finance F 20.2 500,000 23,500,000
Finance G -- 7,000,000
------------------ ------------------
Rupees 22,145,534 113,811,212
========== ==========
20.1 This represents a running financing facility of Rs. 25,000 000 obtained from a commercial bank
and carries markup at a rate of 18% per annum till 31st December 1999 and 16% per annum
onwards payable on quarterly basis. The facility is repayable by December 2000. The facility is
secured by hypothecation of leased assets, irrevocable assignment of rentals receivable under
lease contracts and floating charge on current assets of the company.
20.2 This represents a placement made by a development financial institution which carries mark-up
at a rate of 16.5% per annum. The placement will mature in August, 2000.
21. ACCRUED EXPENSES AND OTHER LIABILITIES
Accrued markup on long term finances 258,275 1,256,187
Accrued markup on short term finances 706,259 3,883,192
Accrued markup on certificates of investment 2,028,599 3,840,388
Advance lease rentals 1,544,075 1,455,468
Auditors remuneration 100,000 100,000
Excise duty on lease rentals -- 65,545
Unearned front end fee 95,000 95,000
Payable to gratuity fund 41,825 1,689,350
Others 1,380,090 474,643
------------------ ------------------
Rupees 6,154,123 12,859,773
========== ==========
22. LEASE REVENUE
Lease income 32,857,665 61,710,933
Markup on advance against leases commitments -- 668,156
Gain on cancellation of lease contracts 29,780 90,168
Documentation charges -- 15,300
Late payment surcharges 2,391,102 2,059,789
Other lease income -- 43,547
------------------ ------------------
Rupees 35,278,547 64,587,893
========== ==========
23. OTHER (CHARGES)/INCOME
Mark-up on Federal Investment Bonds 142,500 142,500
Profit on deposit accounts -- 9,604
Profit on saving account -- 276
Dividend income 58,101 56,884
Loss on disposal of fixed assets -- (609,919)
Others -- 231,770
------------------ ------------------
Rupees 200,601 (168,885)
========== ==========
24. ADMINISTRATIVE EXPENSES
Salaries and other benefits 5,752,351 5,990,764
Contribution to employees' provident fund 242,101 218,585
Staff gratuity 3,001,675 633,179
Staff welfare and training 470,478 573,186
Rent, rates and taxes 1,261,328 1,578,845
Travelling and conveyance 1,397,112 1,411,080
Legal and professional 2,406,378 2,211,587
Telephone, telex and postage 421,542 468,420
Printing and stationery 332,053 317,939
Depreciation 868,920 1,045,655
Fees and subscription 305,953 207,825
Utilities 247,713 294,038
Advertisement 181,560 40,347
Auditors' remuneration 24.1 58,925 141,429
Repairs and maintenance 997,493 569,120
Entertainment 64,405 263,971
Insurance 439,454 581,633
General expenses 202,257 269,103
Brokerage and commission 50,000 --
------------------ ------------------
Rupees 18,701,698 16,816,706
========== ==========
24.1 Auditors' Remuneration
Statutory audit fee 50,000 50,000
Out of pocket expenses 8,925 41,429
Special audit fee -- 50,000
------------------ ------------------
Rupees 58,925 141,429
========== ==========
25. FINANCIAL CHARGES
Mark-up on:
-Long term finances 5,394,029 10,772,059
-Short term finances 17,342,329 23,206,045
-Certificates of investment 6,311,763 23,782,746
Bank charges 122,791 139,795
Other financial charges 459,981 335,141
------------------ ------------------
Rupees 29,630,893 58,235,786
========== ==========
26. TAXATION
The income tax assessments Of the company have been finalised upto and including assessment
year 1997-98 (income year ended 30th June 1997). An appeal before Income Tax Appellate
Tribunal relating to assessment year 1993-94 and  appeal before Commissioner of Income
Tax (Appeals) relating to assessment year 1997-1998 against certain disallowances are pending.
In the case of adverse decisions, an additional tax liability of Rs. 16.999 million could arise,
which has not been provided in these accounts as the management expects a favourable outcome
of appeals.
Deferred
The Securities and Exchange Commission of Pakistan (SECP) vide circular No. 16 dated
9th September 1999 has directed that in order to achieve compliance with the revised IAS 12, all
leasing companies, during each of the five financial years beginning 1st July 1998 and ending
30th June 2003 shall provide deferred tax liability arising in that year together with a further amount
equal to one -fifth of the unprovided deferred tax liability as at the beginning of the financial year
ending 30th June 1999.
Compliance with the above directive shall be deemed to be met where the company consistently
transfers to a capital reserve an amount equal to aggregate amount determined in accordance with
the preceding paragraph.
Accordingly, the company has transferred Rs. 4,079,419 to capital reserve for deferred tax. The
deferred tax liability not accounted for at 30th June 2000 amounts to Rs. 4,079,419.
27. TRANSACTION WITH ASSOCIATED COMPANIES
Insurance premium Rupees -- 629,971
========== ==========
Short term finance Rupees 10,000,000 --
========== ==========
Markup on short term finance Rupees 172,603 --
========== ==========
28. LOSS PER SHARE
Net loss for the year Rupees 17,591,998 38,560,754
========== ==========
Weighted average number of outstanding ordinary shares 8,259,700 8,259,700
========== ==========
Loss per share 2.13 4.67
========== ==========
29. REMUNERATION OF CHIEF EXECUTIVE & EXECUTIVES
CHIEF EXECUTIVE EXECUTIVES
2000 1999 2000 1999
Managerial remuneration 1,583,010 828,000 1,254,303 1,254,990
House rent 155,000 372,000 539,386 553,794
Provident fund 119,947 62,100 89,282 92,514
Utilities 34,500 82,800 119,957 123,342
Medical 34,500 82,800 96,934 90,318
Others 83,333 582,900 126,516 164,580
Gratuity 2,689,000 552,000 312,675 68,820
------------------ ------------------ ------------------ ------------------
Rupees 4,699,290 2,562,600 2,539,053 2,348,358
========== ========== ========== ==========
Number of persons 2 1 8 6
========== ========== ========== ==========
The chief executive and five .executives were also entitled to free use of company maintained cars.
The aggregate amount of fee paid to nine non salaried directors were Rs. 25,500 (1999:Rs. 9,000).
Medical insurance cover was also provided to all executives.
30. CREDIT RISK AND CONCENTRATIONS OF CREDIT RISK
Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and
cause the other party to incur a financial loss. The company attempts to control credit risk by
monitoring credit exposures, limiting transactions with specific counterparts and continuously
assessing the credit worthiness of counter parties
A sectorwise bread down of lease portfolio and short term advances as at 30 June 2000 is as follows:
2000 1999
Sectors
Cement 71,663,206 27.06% 77,460,364 18.26%
Chemical and pharmaceutical 19,390,901 7.32% 24,598,100 5.80%
Engineering, steel and auto 48,595,070 18.35% 65,399,187 15.41%
Healthcare 86,635 0.03% 2,286,362 0.54%
Sugar 5,771,789 2.18% 17,305,394 4.08%
Food and allied 7,378,663 2.79% 27,239,243 6.42%
Textile spinning 18,352,465 6.93% 12,496,150 2.95%
Textile weaving 19,025,924 7.18% 29,013,144 6.84%
Textile composite -- 0.00% 5,755,325 1.36%
Synthetic and rayon 2,249,351 0.85% 9,106,028 2.15%
Fuel and energy 23,878,864 9.02% 38,395,112 9.05%
Transport and communication 20,601,654 7.78% 49,275,041 11.61%
Paper and board 11,284,703 4.26% 28,658,364 6.75%
Vanaspati and allied 3,964,183 1.50% 1,852,742 0.44%
Others 12,577,486 4.75% 35,416,530 8.35 %
------------------ ------------------ ------------------ ------------------
Rupees 264,820,894 100.00% 424,257,086 100.00%
========== ========== ========== ==========
Present value of minimum
lease payments 157,148,985 301,000,889
Over due lease rentals 77,736,494 93,199,417
Short term advances 29,935,415 30,056,780
------------------ ------------------
Rupees 264,820,894 424,257,086
========== ==========
31. FAIR VALUE OF FINANCIAL INSTRUMENTS
The fair value of all financial instruments is estimated to approximate their carrying value.
32. INTEREST RATE CASH FLOW RISK
The information about the exposure of company to interest rate cash flow risk as at 30th June 2000
based on contractual repricing or maturity dates, whichever is earlier, is as follows:
2000
Interest bearing Non interest Total
bearing
Less than More than More than Over one
one month one month one month year
but less than but less than
one year three months
Long term deposits -- -- -- -- 405,322 405,322
Long term investments -- -- -- 1,040,000 3,001,187 4,041,187
Net investment in lease finance 3,894,818 4,219,792 5,951,383 52,274,882 48,035,335 114,376,210
Over due lease rentals -- -- -- -- 77,736,494 77,736,494
Federal Investment Bonds -- -- -- -- 50,000 50,000
Short term advances -- -- 29,809,027 26,388 100,000 29,935,415
Deposits and other receivables -- -- -- -- 4,258,036 4,258,036
Cash and bank balances 31,422 -- -- -- 562,177 593,599
------------------ ------------------ ------------------ ------------------ ------------------ ------------------
3,926,240 4,219,792 35,760,410 53,341,270 134,148,551 231,396,263
Long term finances -- (841,835) (9,568,298) (35,406,514) -- (45,816,647)
Certificates of investment (10,011,530) (473,000) (332,500) (1,306,491) -- (12,123,521)
Deposits -- -- -- -- (48,035,335) (48,035,335)
Short term finances (21,645,531) (10,500,000) -- -- -- (32,145,531)
Accrued expenses and
other liabilities -- -- -- -- (4,515,048) (4,515,048)
Unclaimed divided -- -- -- -- (418,050) (418,050)
------------------ ------------------ ------------------ ------------------ ------------------ ------------------
(31,657,061) (11,814,835) (9,900,798) (36,713,005) (52,968,433) (143,054,132)
------------------ ------------------ ------------------ ------------------ ------------------ ------------------
On balance sheet gap Rupees (27,730,821) (7,595,043) 25,859,612 16,628,265 81,180,118 88,342,131
Interest rate cash ========== ========== ========== ========== ========== ==========
flow risk gap Rupees (27,730,821) (7,595,043) 25,859,612 16,628,265
========== ========== ========== ==========
1999
Interest bearing Non interest Total
bearing
Less than More than More than Over one
one month one month one month year
but less than but less than
one year three months
Long term investments -- -- -- 950,000 3,001,187 3,951,187
Net investment in lease finance 9,866,993 4,786,084 24,007,969 158,429,669 61,721,305 258,812,020
Over due lease rentals -- -- -- -- 93,199,417 93,199,417
Federal Investment Bonds -- -- -- -- 50,000 50,000
Short term advances -- 56,780 -- -- 30,000,000 30,056,780
Deposits and other receivables -- -- -- -- 1,405,510 1,405,510
Cash and bank balances 40,180 -- -- -- 428,172 468,352
------------------ ------------------ ------------------ ------------------ ------------------ ------------------
9,907,173 4,842,864 24,007,969 159,379,669 189,805,591 387,943,266
Long term finances (8,339,819) (7,500,021) (16,392,601) (6,954,833) -- (39,187,274)
Certificates of investment (300,000) (3,169,329) (44,405,700) (12,196,991) -- (60,072,020)
Deposits -- -- -- -- (61,721,305) (61,721,305)
Short term finances (7,560,236) (30,500,000) (75,750,976) -- -- (113,811,212)
Accrued expenses and
other liabilities -- -- -- -- (11,243,760) (11,243,760)
Unclaimed dividend -- -- -- -- (472,300) (472,300)
------------------ ------------------ ------------------ ------------------ ------------------ ------------------
(16,200,055) (41,169,350) (136,549,277) (19,151,824) (73,437,365) (286,507,871)
------------------ ------------------ ------------------ ------------------ ------------------ ------------------
On balance sheet gap Rupees (6,292,882) (36,326,486) (112,541,308) 140,227,845 116,368,226 101,435,395
Interest rate cash ========== ========== ========== ========== ========== ==========
flow risk gap Rupees (6,292,882) (36,326,486) (112,541,308) 140,227,845
========== ========== ========== ========== ========== ==========
The. effective interest rates as at 30 June 2000 for financial instruments are as follows:
Assets
2000 1999
Net investment in lease finance 22.42% 22.70%
Long term investments 15.00% 15.00%
Short term advances 20.00% 22.50%
Cash and bank balance 12.00% 17.00%
Liabilities
Long term finance 19.00% 20.43%
Certificates of investment 20.15% 20.15%
Short term finances 15.83% 19.42%
33. GENERAL
33.1 Total number of employees as at 30th June 2000 is 14 (1999: 24)
33.2 Figures of the previous year have been rearranged, wherever necessary, to facilitate comparison.
33.3 Figures have been rounded off to the nearest rupee.
DIRECTOR CHIEF EXECUTIVE
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