| Interasia Leasing Company Limited |
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| Annual
Report 2000 |
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| CONTENTS |
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| Company
Information |
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| Notice
of Meeting |
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| Directors'
Report and Chairman's Review |
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| Auditors'
Report to the Members |
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| Balance Sheet |
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|
| Profit
and Loss Account |
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| Cash
Flow Statement |
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| Statement
of Changes in Equity |
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| Notes
to the Financial Statements |
|
| Pattern
of Shareholdings |
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| COMPANY
INFORMATION |
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|
| Board
of Directors |
Mr. Muhammad Younas Khan |
Chairman |
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| As
at June 30, 2000 |
Mr. Jameel ur Rehman |
|
Chief Executive |
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|
Mr, Talha Qureshi |
|
Director |
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|
Mr. Muhammad Azam Khan |
Director |
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|
Mr. Abdus Samad Khan |
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(Nominee of Saudi Pak
Industrial & |
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|
Agricultural Investment
Co (Pvt) Ltd) |
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|
Mr. Abdul Quddus Siddiqi |
|
Director |
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|
Saiyed Hashim Ishaque |
|
Director |
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| Company
Secretary |
Muhammad Salman Haider
(ACA) |
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| Bankers |
|
Gulf Commercial bank Ltd |
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The Bank of Khyber |
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|
Trust Investment Bank Ltd |
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| Legal
Advisors |
Ahmer Bilal Soofi,
Advocates & Solicitors |
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| Auditors |
|
M/s Khalid Majid Husain
Rahman, Chartered Accountants |
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| Registrar
and Share |
Universal Management
Services (Pvt) Ltd |
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| Transfer
Office |
Room No.205, 2nd Floor,
Central Hotel Building |
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|
Civil Lines, Karachi |
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Phone: 5654037 |
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| Registered
Office |
101, 82-East, Fazal ul
Haq Road, Blue Area |
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Islamabad - 44000 |
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Phone: (92 51) 2206731 -
2206272 |
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|
Fax: (92 51) 2201380 |
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| Head Office |
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Suite # 1, 3rd Floor,
Leeds Centre |
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|
11-E-2, Main Boulevard,
Gulberg-III, Lahore |
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Phone: (92 51) 5717295 -
96 |
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Fax: (92 51) 5717297 |
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| NOTICE
OF THE MEETING |
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| Notice
is hereby given that the Eighth Annual General Meeting of INTERASIA LEASING COMPANY LIMITED will be |
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| held
at Hotel Holiday Inn, Islamabad on Saturday, December 30, 2000 at 1500 hours
to transact the following |
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| business. |
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| ORDINARY
BUSINESS |
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| 1.
To confirm minutes of the Third Extra Ordinary General Meeting of the Company
held on April 03, 2000. |
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| 2.
To receive, consider and adopt the audited accounts of the Company for the
year ended June 30, 2000 |
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| together
with the Directors' and Auditor's report thereon. |
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| 3.
To appoint Auditors for the year 2000-2001 and fix their remuneration. |
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| 4.
To transact any other business with the permission of the Chair. |
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|
By Order of the Board |
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|
| Islamabad: |
|
MUHAMMAD SALMAN HAIDER |
|
| November
25, 2000 |
|
Company Secretary |
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| NOTES: |
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| 1.
The Register of Members of the Company will remain closed from December 22,
2000 to December 29, 2000 |
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| (both
days inclusive). |
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| 2.
A member entitled to attend and vote at the meeting is entitled to appoint a
proxy to attend and vote for |
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| him/her.
A proxy need not be a member of the Company. |
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|
| 3.
An instrument of proxy and the power of attorney or other authority (if any)
under which it is signed, or a |
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| notarially
certified copy of such power of attorney in order to be valid must be
deposited at the registered |
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| office
of the Company not less than 48 hours before the time of the meeting. |
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|
| 4.
Members are advised to lodge shares for transfer at the office of the Company
Registrar, Universal |
|
| Management
Services (Pvt) Ltd., Room No.205, 2rid Floor, Central Hotel Building, Civil
Lines, Karachi. |
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|
| 5.
CDC shareholders desiring to attend the meeting are requested to bring their
original national identity cards, |
|
| account
and participant's ID number for identification purpose and, in case of proxy,
to enclose an attested |
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| copy
of his/her national identity card. |
|
|
| 6.
Members are requested to notify any change in address immediately. |
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| DIRECTORS'
REPORT AND REVIEW BY THE CHAIRMAN |
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| The
Board of Directors of InterAsia Leasing Company Limited presents the Eighth
Annual Report alongwith Audited |
|
| Accounts
for the year ended June 30, 2000. |
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|
| GENERAL
REVIEW: |
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| The
country's economy, which was being poorly managed in the past, did not show
any sign of recovery during the |
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| year
under review. The prevailing investment climate and the business environment
failed to attract fresh local or |
|
| foreign
investment. The only positive signs came from the bumper agricultural crop
and good performance of the |
|
| textile
sector. Naturally the sluggish economy did not provide any inputs to the
leasing sector. The businesses whose |
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| leasing
facilities had become problematic also did not show any sign of recovery.
Consequently the recovery process |
|
| continued
to be slow and a futile exercise. Your management continued to focus its
attention on the recoveries and |
|
| generation
of new deposits to generate fresh resources. In this regard, some new members
of staff have been |
|
| inducted
who have started producing results. The past association of your Company with
the BEL fiasco has resulted |
|
| in
a lack of confidence from the banks, which we are trying to restore. Money
market brokers have been approached to |
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| get
overnight funds and efforts are being made to induct more staff who could
deliver institutional deposits. The new |
|
| management
has continued to pay back liabilities from the recoveries being made in order
to lesson the debt burden. |
|
| Small
amounts of leases are also being written. |
|
|
| OPERATING
PERFORMANCE: |
|
| Owing
to the severe liquidity crunch, our lease operations were restricted and the
income from lease financing |
|
| declined
from Rs. 59.4 million in the previous year to Rs. 33 million during the year
under review. The management |
|
| continued
to pay attention to expenses. However the increase in administrative expenses
from Rs. 9.4 million to Rs. |
|
| 16.2
million is attributable to the charges which the Company had to absorb fully
this year which previously were being |
|
| shared
with other group companies. As a results of our intensified efforts, improved
recovery position due to |
|
| retirement
of the debts and the marketing of new COIs financial charges have been
reduced considerably from Rs. 35 |
|
| million
to Rs. 22 million. Despite an overall reduction in the lending rates in the
market, your Company had to pay |
|
| higher
mark up on its borrowings because of its prior commitments. |
|
|
| Your
Company is still stuck with certain inherited poor performing portfolio which
is being pursued vigorously for early |
|
| recoveries.
The archaic legal system is the biggest impediment in effecting recoveries.
Even after a decree is issued, |
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| there
is no guarantee that it will be executed speedily. Easy grant of the stay
orders is yet another stumbling block in |
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| the
prompt implementation of decrees. |
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|
| Financial Results |
Rupees |
|
| Net
investment in leases |
|
165,561,002 |
|
| Revenue |
|
33,433,047 |
|
| Expenditure |
|
51,830,055 |
|
| Provision
for potential lease losses |
|
(17,580,903) |
|
| Provision
for diminution in the |
|
|
|
| value
of investments (marked to market) |
|
3,666,240 |
|
|
|
|
| Provision
for taxation deferred and current |
|
7,788,240 |
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| Loss after tax |
|
12,270,585 |
|
|
| REVERSAL
OF KASHMIR SUGAR MILLS LIMITED (KSML) LEASE: |
|
| Your
Company participated in a lease syndication of Kashmir Sugar Mills Limited
(KSML) in the year 1997-98 to the |
|
| tune
of Rs. 40 m. The legal documentation with Bankers Equity Limited was very
weak and the lessee i.e KSML also |
|
| refused
to recognize ILCL as its lessor. The issue was discussed with BEL, being the
lead syndicate member, and it |
|
| was
resolved that both the companies will reverse the lease. Consequently, income
of Rs. 12.2 m booked in the |
|
| previous
years had to be reversed this year. |
|
|
| REFERENCE
TO NOTE NO.14.3 IN THE AUDITORS' REPORT: |
|
| This
refers to two leases (I) Syed Bhais Lighting Limited and (2) Nimir Industrial
Chemicals Limited which were |
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| disbursed
in 1997 and 1995 respectively. At the time of disbursement the conditions of
SRO 345(I)/96 of Leasing |
|
| Companies
(Establishment and Regulation Rules 1996) were fulfilled because of
sufficient equity. However, as a |
|
| result
of the losses incurred during the year 1999 the equity of the Company shrank
from Rs. 134 million to Rs. 86.381 |
|
| million,
resulting in a higher exposure than prescribed by the SRO 345(I)/96. |
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| Subsequently,
the SECP issued SRO 663(1)/2000 Leasing Companies (Establishment and
Regulation) Rules, 2000 |
|
| on
September 25, 2000 allowing a single group exposure of maximum 20% of the net
investment in leasing |
|
| transactions.
Both the leases in question are covered within the new prescribed limit. |
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|
| CREDIT
RATING: |
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| The
Pakistan Credit Rating Agency (Pvt) Ltd. (PACRA) has rated your Company as
'BB' (Double B) for long term and |
|
| 'B'
(Single B) for short term. |
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|
| FUTURE
OUT LOOK: |
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| The
initial liquidity problems have been overcome somewhat with the availability
of sizeable matching credit facility |
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| from
a premier international bank. Negotiations for further credit lines are in
progress with some financial institutions. |
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| The
current ratio has also improved to 1: 0.58 (as per NBFI Regulations) that
will help in negotiating further credit lines. |
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| Drive
for COIs is also being geared up. With access to additional funds it will be
possible to step up our efforts to |
|
| progressively
increase the volume of lease business. We seek indulgence of the shareholders
and would ask them to |
|
| bear
with us a little longer, as we are just about to turn the corner for the
better. |
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|
| AUDITORS: |
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| The
name of M/S Hussain Rahman, Chartered Accountants, who have offered
themselves for appointment, is being |
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| proposed
as auditors. |
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|
| ACKNOWLEDGMENT: |
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| The
Board takes the opportunity of appreciating the efforts of the management and
staff for their dedication and hard |
|
| work.
We also thank the Securities & Exchange Commission of Pakistan and the
State Bank of Pakistan for their |
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| continued
support and guidance. |
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|
| PATTERN
OF SHAREHOLDING: |
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| The
pattern of shareholdings as at June 30, 2000 is given on page No.28 |
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|
|
On behalf of the Board |
|
|
| Islamabad: |
|
MUHAMMAD YOUNAS KHAN |
|
| November
25, 2000 |
|
Chairman |
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed Balance Sheet of InterAsia Leasing Company 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 statement 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 there of, 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: |
|
|
| 1.
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; |
|
|
| 2.
The expenditure incurred during the year was for the purpose of the Company's
business; and |
|
|
| 3.
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,
the 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 loss and cash |
|
| flows
and changes in equity for the year then ended; and |
|
|
| d)
in our opinion, Zakat deductible at source under the Zakat and Ushr
Ordinance, 1980 was deducted by the |
|
| Company
and deposited in the Central Zakat Fund established under Section 7 of that
Ordinance. |
|
|
| Without
qualifying our opinion we draw attention to note 14.3. |
|
|
| Islamabad, |
|
KHALID MAJID HUSSAIN
RAHMAN |
|
| November
27, 2000 |
|
Chartered Accountants |
|
|
|
| BALANCE
SHEET AS JUNE 30, 2000 |
|
|
|
|
2000 |
1999 |
|
|
NOTE |
RUPEES |
RUPEES |
|
|
| EQUITY
AND LIABILITIES |
|
| SHARE
CAPITAL AND RESERVES |
|
|
| Authorised
Capital |
|
| 20,000,000
ordinary shares of |
|
| Rs. 10 each |
|
200,000,000 |
200,000,000 |
|
|
========== |
========== |
|
| Issued,
subscribed and paid up capital |
|
| 10,000,000
ordinary shares of |
|
| Rs.
10 each fully paid up in cash |
|
3 |
100,000,000 |
100,000,000 |
|
|
|
|
| Reserves |
|
|
|
| Capital |
|
33,805,866 |
26,181,263 |
|
| Revenue |
|
(52,070,807) |
(39,800,222) |
|
|
----------- |
----------- |
|
|
81,735,059 |
86,381,041 |
|
|
| NON-CURRENT
LIABILITIES |
|
| Long
term loans |
|
4 |
1,906,401 |
8,146,401 |
|
| Certificates
of investment |
|
5 |
4,307,376 |
3,562,375 |
|
| Liability
against asset subject to finance lease |
|
6 |
642,837 |
-- |
|
| Long
term deposits |
|
7 |
14,774,813 |
35,961,381 |
|
| Deferred
liability |
|
8 |
439,621 |
-- |
|
|
|
----------- |
----------- |
|
|
22,071,048 |
47,670,157 |
|
|
| CURRENT
LIABILITIES |
|
| Current
portion of long term liabilities |
|
9 |
18,907,155 |
28,616,100 |
|
| Finance
under mark-up arrangements |
|
10 |
58,336,211 |
78,965,305 |
|
| Certificates
of investment |
|
5 |
71,577,667 |
77,763,410 |
|
| Accrued
and other liabilities |
|
11 |
23,676,708 |
38,208,441 |
|
| Provision
for taxation |
|
1,145,995 |
982,358 |
|
| Unclaimed
dividend |
|
497,282 |
550,006 |
|
|
----------- |
----------- |
|
|
174,141,018 |
225,085,620 |
|
|
| CONTINGENCIES AND COMMITMENTS |
|
12 |
-- |
-- |
|
|
----------- |
----------- |
|
|
277,947,125 |
359,136,818 |
|
|
========== |
========== |
|
| ASSETS |
|
| NON-CURRENT
ASSETS |
|
| Tangible
fixed assets |
|
13 |
3,168,836 |
2,602,878 |
|
| Net
investment in finance leases |
|
14 |
113,869,587 |
199,673,901 |
|
| Long
term investments |
|
15 |
16,398,691 |
22,014,411 |
|
| Long
term deposits |
|
|
886,670 |
393,070 |
|
| Deferred costs |
|
16 |
236,783 |
1,157,491 |
|
|
|
134,560,567 |
225,841,751 |
|
| CURRENT
ASSETS |
|
|
|
| Current
portion of net investment in finance leases |
14 |
51,691,415 |
79,087,031 |
|
| Advances,
prepayments and other receivables |
17 |
85,192,727 |
47,350,242 |
|
| Cash
and bank balances |
|
18 |
6,502,416 |
6,857,794 |
|
|
|
----------- |
----------- |
|
|
143,386,558 |
133,295,067 |
|
|
----------- |
----------- |
|
|
277,947,125 |
359,136,818 |
|
|
========== |
========== |
|
| The
annexed notes form an integral part of these financial statements. |
|
|
|
CHIEF EXECUTIVE |
|
DIRECTOR |
|
|
|
| PROFIT
AND LOSS ACCOUNT FOR THE YEAR ENDED JUNE 30, 2000 |
|
|
|
|
2000 |
1999 |
|
|
NOTE |
RUPEES |
RUPEES |
|
| REVENUE |
|
| Income
from lease financing |
|
19 |
32,727,339 |
59,356,023 |
|
| Income
from investments |
|
|
2,850 |
-- |
|
| Other Income |
|
20 |
702,858 |
913,403 |
|
|
|
------------ |
------------ |
|
|
|
33,433,047 |
60,269,426 |
|
|
|
|
|
| EXPENDITURE |
|
|
|
|
| Administrative
and operating expenses |
|
21 |
16,230,592 |
9,411,659 |
|
| Financial
and other charges |
|
22 |
22,499,878 |
42,184,389 |
|
| Amortization
of deferred cost |
|
|
920,708 |
920,707 |
|
|
------------ |
------------ |
|
|
39,651,178 |
52,516,755 |
|
|
------------ |
------------ |
|
| PROFIT/(LOSS)
BEFORE PROVISIONS |
|
(6,218,131) |
7,752,671 |
|
| Provision
for potential lease losses |
|
(17,580,903) |
37,714,190 |
|
| Provision
for diminution in value of Investments |
|
3,666,240 |
17,158,201 |
|
|
------------ |
------------ |
|
|
(13,914,663) |
54,872,391 |
|
|
------------ |
------------ |
|
|
7,696,532 |
(47,119,720) |
|
| Reversal
of Kashmir Sugar Mills Income |
|
| Recognised
in previous year |
|
17.2 |
12,178,877 |
|
|
------------ |
------------ |
|
| (LOSS)
BEFORE TAXATION |
|
(4,482,345) |
(47,119,720) |
|
| PROVISION
FOR TAXATION |
|
23 |
7,788,240 |
9,378,582 |
|
|
|
|
------------ |
------------ |
|
| (LOSS)
AFTER TAXATION |
|
12,270,585) |
(56,498,302) |
|
| UN-APPROPRIATED
PROFIT/(LOSS) |
|
|
|
| BROUGHT
FORWARD |
|
49,800,222) |
6,698,080 |
|
|
|
------------ |
------------ |
|
| UN-APPROPRIATED
(LOSS) |
|
62,070,807) |
(49,800,222) |
|
|
========== |
========== |
|
| (LOSS)
PER SHARE |
|
24 |
(1.23) |
(5.65) |
|
|
========== |
========== |
|
| The
annexed notes form an integral part of these financial statements |
|
|
|
CHIEF EXECUTIVE |
|
DIRECTOR |
|
|
|
| CASH
FLOW STATEMENT FOR THE YEAR ENDED YEAR JUNE 30, 2000 |
|
|
|
|
|
2000 |
1999 |
|
|
|
|
RUPEES |
RUPEES |
|
| CASH
FLOWS FROM OPERATING ACTIVITIES |
|
| (Loss)
before taxation |
|
(4,482,345) |
(47,119,720) |
|
| Adjustments
for: |
|
|
|
| Depreciation |
|
1,219,845 |
990,464 |
|
| Deferred
costs amortized |
|
920,708 |
920,707 |
|
| Financial
charges |
|
22,102,718 |
35,586,665 |
|
| (Gain)/loss
on sale of fixed assets |
|
-- |
1,609 |
|
| Provision
for diminution in the value of investments |
|
3,666,240 |
17,158,201 |
|
| Provision
for potential lease losses |
|
(13,170,580) |
37,714,190 |
|
| Provision
for gratuity |
|
812,004 |
|
|
|
----------- |
----------- |
|
|
15,550,935 |
92,371,836 |
|
|
----------- |
----------- |
|
| Operating
Profit/(Loss) before working capital changes |
|
11,068,590 |
45,252,116 |
|
|
| (Increase)/decrease
in advances, prepayments and |
|
| other
receivable |
|
(37,491,722) |
(16,470,305) |
|
| Increase/(decrease)in
accrued and other liabilities |
|
(30,385,203) |
(3,285,681) |
|
|
----------- |
----------- |
|
|
(67,491,722) |
(19,755,986) |
|
|
----------- |
----------- |
|
| Cash
(used)/generated from operations |
|
(56,808,335) |
25,496,130 |
|
| Payments for |
|
| Income tax |
|
(277,953) |
(1,066,367) |
|
| Dividend |
|
(52,724) |
10,460,223) |
|
| Financial
charges |
|
(12,340,547) |
35,090,931) |
|
| Gratuity |
|
(372,383) |
|
|
|
----------- |
----------- |
|
| Net
cash (used) in operating activities |
|
(69,851,942) |
(21,121,391) |
|
|
| CASH
FLOWS FROM INVESTING ACTIVITIES |
|
| Purchase
of fixed assets |
|
(736,803) |
(410,850) |
|
| Proceeds
from sale of fixed assets |
|
-- |
461,070 |
|
| Increase
in long term security deposits |
|
(493,600) |
(205,000) |
|
| Investment
in leases finance- net |
|
126,297,698 |
42,130,522 |
|
| Decrease
in long term investments |
|
1,949,480 |
1,180,996 |
|
|
----------- |
----------- |
|
| Net
cash generated from investing activities |
|
127,016,775 |
43,156,738 |
|
|
| CASH
FLOWS FROM FINANCING ACTIVITIES |
|
| Long
term loans paid |
|
(8,830,000) |
14,046,000) |
|
| Short
term finances obtained |
|
15,000,000 |
98,500,000 |
|
| Short
term finances paid |
|
33,283,792) |
(105,016,031) |
|
| Certificates
of investment |
|
(5,440,743) |
4,548,985 |
|
| Lease
money settled |
|
24,810,948) |
(4,098,032) |
|
| Payments
of lease obligations |
|
(154,728) |
-- |
|
|
----------- |
----------- |
|
| Net
cash (used) in financing activities |
|
57,520,211) |
(20,111,078) |
|
|
----------- |
----------- |
|
| NET
(DECREASE)/INCREASE IN CASH AND |
|
| CASH
EQUIVALENTS |
|
(355,378) |
1,924,269 |
|
|
----------- |
----------- |
|
| Cash
and cash equivalents at the beginning of the year |
|
6,857,794 |
4,933,525 |
|
|
|
----------- |
----------- |
|
| CASH
AND CASH EQUIVALENTS AT THE END OF THE YEAR |
6,502,416 |
6,857,794 |
|
|
========== |
========== |
|
|
|
CHIEF EXECUTIVE |
|
DIRECTOR |
|
|
|
|
| STATEMENT
OF CHANGES IN EQUITY FOR THE YEAR ENDED JUNE 30, 2000 |
|
|
|
Share Capital |
Capital
Reserve |
Revenue
Reserve |
|
|
|
Reserve for |
Reserve for |
Statutory |
Sub-Total |
General |
Un-appropriated |
Sub-Total |
|
|
|
|
Contingencies |
Deferred Tax |
Reserve |
|
Reserve |
profit/(Loss) |
|
Total |
|
|
NOTE 3 |
NOTE 3.1 |
Liability |
|
|
|
Rupees |
Rupees |
Rupees |
Rupees |
Rupees |
Rupees |
Rupees |
Rupees |
Rupees |
|
|
| Balance
as at July 01, 1998 |
100,000,000 |
3,339,892 |
-- |
13,759,493 |
17,099,385 |
10,000,000 |
6,698,080 |
16,698,080 |
133,797,465 |
|
| Net
profit / (loss) for the year |
-- |
-- |
-- |
-- |
-- |
-- |
(47,416,424) |
(47,416,424) |
(47,416,424) |
|
| Transfer
to reserve for deferred |
|
|
| tax liability |
|
-- |
-- |
9,081,878 |
-- |
9,081,878 |
-- |
(9,081,878) |
(9,081,878) |
-- |
|
|
----------- |
----------- |
----------- |
----------- |
----------- |
----------- |
----------- |
----------- |
----------- |
|
| Balance
as at June 30, 1999 |
100,000,000 |
3,339,892 |
9,081,878 |
13,759,493 |
26,181,263 |
10,000,000 |
(49,800,222) |
(39,800,222) |
86,381,041 |
|
| Net
profit / (loss) for the year |
-- |
-- |
-- |
-- |
-- |
-- |
(4,645,982) |
(4,645,982) |
(4,645,982) |
|
| Transfer
to reserve for deferred |
|
|
| tax liability |
|
-- |
-- |
7,624,603 |
-- |
7,624,603 |
-- |
(7,624,603) |
(7,624,603) |
-- |
|
|
----------- |
----------- |
----------- |
----------- |
----------- |
----------- |
----------- |
----------- |
----------- |
|
| Balance
as at June 30, 2000 |
100,000,000 |
3,339,892 |
16,706,481 |
13,759,493 |
33,805,866 |
10,000,000 |
(62,070,807) |
(52,070,807) |
81,735,059 |
|
|
========== |
========== |
========== |
========== |
========== |
========== |
========== |
========== |
========== |
|
| The
annexed notes form an integral part of these financial statements. |
|
|
|
CHIEF EXECUTIVE |
|
DIRECTOR |
|
|
|
|
|
|
|
| NOTES
TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2000 |
|
|
| 1.
THE COMPANY AND ITS OPERATIONS |
|
| The
Company was incorporated in Pakistan on November 30, 1992, as a public
limited company and is listed |
|
| on
the Karachi and Islamabad Stock Exchanges. The licence to carry on leasing
business was granted on |
|
| April
26, 1993 and the certificate of commencement of business was obtained on May
02, 1993. The main |
|
| business
activity of the company is leasing. |
|
|
| 2.
SIGNIFICANT ACCOUNTING POLICIES |
|
| 2.1
Overall valuation policy |
|
| These
financial statements have been prepared under the historical cost convention. |
|
|
| 2.2
Compliance with International Accounting Standards (IAS) |
|
| These
financial statements have been prepared in compliance with International
Accounting |
|
| Standards
(IAS) as applicable in Pakistan in all material aspects. |
|
|
| 2.3Revenue
recognition |
|
| 2.3.1 Lease |
|
|
| The
Company follows "financial method" in accounting for recognition of
lease income. |
|
| Accordingly
unearned lease income is taken over the term of the lease, starting from the |
|
| period
in which the lease is executed, so as to produce a constant return on net
investment |
|
| in the lease. |
|
|
| Front
end fee, commitment fee and other commissions are taken to income when
realised. |
|
|
| 2.3.2
Investments |
|
| Dividend
income is recognised when the right to receive payment is established. |
|
| Gain/profit
on trading of investments are taken to income when it is realised. |
|
|
| 2.3.3 Other |
|
|
| Other
income is recognised when earned. |
|
|
| 2.4
Tangible fixed assets and depreciation |
|
| Operating
fixed assets are stated at cost less accumulated depreciation. Depreciation
is charged to |
|
| income
applying the straight line method. In respect of additions and deletions of
assets during the |
|
| year,
depreciation is charged proportionately from/to the month of acquisition and
deletion |
|
| respectively. |
|
|
| Major
extensions, renewals and improvements are capitalised. |
|
|
| Maintenance
and minor improvements are charged to income as and when incurred. Gains and |
|
| losses
on disposal of fixed assets are included in current income. |
|
|
| 2.5
Investments |
|
| 2.5.1
Long term investments are carried at cost. Provision is made for diminution
in value of |
|
| investments,
if any. |
|
|
| 2.5.2
Short term investments are valued at the lower of average cost and market
value |
|
| determined
on an aggregate portfolio basis, using Karachi Stock Exchange quotations. |
|
|
| 2.6 Taxation |
|
|
| 2.6.1 Current |
|
| Provision
is made on taxable income at the prevailing rates of taxation after taking
into |
|
| account
tax credits and rebates available, if any. |
|
|
| 2.6.2 Referred |
|
|
| The
company accounts for deferred taxation arising on all major timing
differences using |
|
| the
liability method. |
|
|
| 2.7
Deferred costs |
|
| Deferred
costs are amortised during the period not exceeding five years from the year
of |
|
| incurrence
thereof. |
|
|
| 2.8
Employees' retirement benefits |
|
| The
Company operates a contributory provident fund under a separate trust for all
its permanent |
|
| employees
and contributions are recorded monthly in accordance with the fund rules. The
Company |
|
| also
operates gratuity scheme for its permanent employees under the terms of their
appointments. |
|
| The
benefits are payable to the employees on completion of prescribed qualifying
period of service. |
|
|
| 3.
ISSUED, SUBSCRIBED AND PAID UP CAPITAL |
|
| It
includes 2,601,300 (1999: 2,612,300) ordinary shares of Rupees 10 each held
by the associated |
|
| undertakings. |
|
|
| 3.1
CONTINGENCIES RESERVE |
|
| This
represents a reserve created to meet any contingencies that may arise on the
lease rentals |
|
| receivable. |
|
|
|
2000 |
1999 |
|
|
Notes |
RUPEES |
RUPEES |
|
| 4.
LONG TERM LOANS |
|
|
| Bankers
Equity Ltd |
|
4.1 |
5,652,401 |
9,398,401 |
|
| Crescent
Investment Bank Ltd |
|
|
-- |
3,000,000 |
|
| Gulf
Commercial Bank Ltd |
|
|
-- |
5,830,000 |
|
|
|
------------ |
------------ |
|
|
|
5,652,401 |
18,228,401 |
|
| Less:
Current portion |
|
9 |
3,746,000 |
10,082,000 |
|
|
|
------------ |
------------ |
|
|
1,906,401 |
8,146,401 |
|
|
========== |
========== |
|
|
| 4.1
This represents two lines of credit amounting to Rs. 4,786,154 and Rs.
866,247 obtained for |
|
| financing
lease operations and carries mark-up at the rate of 21.5 and 23.5 percent per
annum |
|
| respectively.
This facility is secured against endorsement of promissory notes and first
charge on |
|
| leased
assets in favour of the bank. These facilities will mature on October 06,
2001 and January 11, |
|
| 2002
respectively. |
|
|
|
|
2000 |
1999 |
|
|
Notes |
RUPEES |
RUPEES |
|
| 5.
CERTIFICATES OF INVESTMENT |
|
|
| Balance
at the end of year |
|
5.1 |
75,885,043 |
81,325,785 |
|
| Less:
Due within one year |
|
71,577,667 |
77,763,410 |
|
|
------------ |
------------ |
|
|
4,307,376 |
3,562,375 |
|
|
========== |
========== |
|
| 5.1
The Company has a scheme of Registered PLS Certificates of Investment for
raising funds directly |
|
| from
local resources. These certificates have been issued for maturity periods of
three months to |
|
| five
years with the facility of pre-mature encashment after minimum three months.
The return on |
|
| these
certificates ranges from 14.00 percent to 26.00 percent per annum depending
upon the period |
|
| of maturity. |
|
|
| 6.
LIABILITY AGAINST ASSET SUBJECT TO FINANCE LEASE |
|
| The
rate of interest used as discounting factor, implicit in lease, is
approximately 22 percent per annum. |
|
| The
amount of future payments and periods during which they fall due are: |
|
|
| Year
ended 30 June |
|
| 2001 |
|
377,700 |
-- |
|
| 2002 |
|
377,700 |
-- |
|
| 2003 |
|
335,700 |
-- |
|
|
|
------------ |
------------ |
|
|
1,091,100 |
-- |
|
| Less:
Unamortised finance charges |
|
196,828 |
-- |
|
|
|
------------ |
------------ |
|
|
894,272 |
-- |
|
| Less:
Current portion |
|
9 |
251,435 |
-- |
|
|
|
|
------------ |
------------ |
|
|
642,837 |
-- |
|
|
========== |
========== |
|
| The
lease rentals are payable in monthly instalments. The amount of rentals
payable in the year |
|
| 2003
includes the amount of salvage value of Rupees 209,800 adjustable at the end
of the lease |
|
| term.
The lease agreement carries renewal and purchase option at the end of lease
period. There |
|
| are
no financial restrictions in lease agreement. The lease is secured by deposit
of Rs. 209,800 |
|
| included
in long term security deposits. |
|
|
| 6.1
Minimum lease payments and their present value are grouped as below: |
|
|
|
2000 |
1999 |
|
|
Minimum |
Present Value |
Minimum |
Present Value |
|
|
Lease |
of Minimum |
Lease |
of Minimum |
|
|
Payments |
Lease |
Payments |
Lease |
|
|
|
Payments |
|
Payments |
|
|
Rupees |
Rupees |
Rupees |
Rupees |
|
|
| Due
not later than one year |
|
377,700 |
251,436 |
-- |
-- |
|
| Due
later than one year but not |
|
|
|
| later
than five years |
|
713,400 |
642,836 |
-- |
-- |
|
|
----------- |
----------- |
----------- |
----------- |
|
|
1,091,100 |
894,272 |
-- |
-- |
|
|
========== |
========== |
========== |
========== |
|
|
|
|
|
|
2000 |
1999 |
|
|
Notes |
RUPEES |
RUPEES |
|
| 7. LONG TERM DEPOSITS |
|
|
| Balance
at the end of year |
|
7.1 |
29,684,533 |
54,495,481 |
|
| Less:
Current portion |
|
9 |
14,909,720 |
18,534,100 |
|
|
|
----------- |
----------- |
|
|
14,477,813 |
35,961,381 |
|
|
========== |
========== |
|
| 7.1
These represent the interest free security deposits received against lease
contracts and are |
|
| repayable/adjustable
at the expiry/termination of the respective leases. |
|
|
| 8.
DEFERRED LIABILITY |
|
| Provision
for gratuity |
|
439,621 |
-- |
|
|
|
|
========== |
========== |
|
|
|
|
|
|
| 9.
CURRENT PORTION OF LONG TERM LIABILITIES |
|
| Long
term loans |
|
4 |
3,746,000 |
10,082,000 |
|
| Liability against
asset subject to finance lease |
6 |
251,435 |
-- |
|
| Long
term deposits |
|
7 |
14,909,720 |
18,534,100 |
|
|
|
----------- |
----------- |
|
|
18,907,155 |
28,616,100 |
|
|
========== |
========== |
|
|
|
|
| 10.
FINANCE UNDER MARK-UP ARRANGEMENTS |
|
| Running
Finance |
|
|
-- |
12,283,792 |
|
| Cash
Finances: |
|
|
|
| The
Bank of Khyber |
|
10.1 |
5,000,000 |
5,000,000 |
|
| Saudi
Pak Industrial & Agricultural |
|
|
|
|
| Investment
Co.(Pvt) Ltd |
|
|
-- |
2,000,000 |
|
| English
Leasing Ltd |
|
10.2 |
13,000,000 |
10,000,000 |
|
| Trust
Investment Bank Ltd |
|
10.3 |
18,000,000 |
25,000,000 |
|
| Musharika
Financing |
|
|
|
|
| Trust
Investment Bank Ltd |
|
10.4 |
22,336,211 |
24,681,513 |
|
|
|
------------ |
------------ |
|
|
|
58,336,211 |
78,965,305 |
|
|
========== |
========== |
|
| 10.1
This represents demand finance facility carrying mark-up at the rate of 20
percent per annum. The |
|
| mark-up
is payable quarterly. It is secured by way of hypothecation of leased assets
valuing Rs. 6.7 |
|
| million.
The loan has matured in May 2000. However, a rollover request has been made
with bank |
|
| which
is under consideration. |
|
|
| 10.2
This represents a short-term facility of Rs. 15 million and carries mark-up
at the rate of 19.5 percent |
|
| per
annum payable monthly. The facility matured on April 2000. However as per
understanding with |
|
| the
lender the loan is being paid in monthly instalments. |
|
|
| 10.3
This represents short-term facilities of Rupees 5 million and Rupees 20
million carrying mark-up at |
|
| the
rate of 19 percent and 20.40 percent per annum respectively and payable
monthly. These |
|
| facilities
are being rolled-over on monthly basis. |
|
|
| 10.4
This represents Musharika Investment Agreement carrying profit at the rate of
21 percent per |
|
| annum
payable half yearly. |
|
|
|
2000 |
1999 |
|
|
RUPEES |
RUPEES |
|
| 11. ACCRUED AND OTHER LIABILITIES |
|
| Accrued
liabilities |
|
476,629 |
124,000 |
|
| Accrued
financial charges-secured finances |
|
19,719,196 |
9,957,025 |
|
| Advance
front-end fee and commission |
|
167,911 |
|
| Tax
payable - deducted at source |
|
664,870 |
629,752 |
|
| Payable
to lessees |
|
432,043 |
4,602,850 |
|
| Other payable |
|
2,151,939 |
2,584,509 |
|
| Payable
to associated undertakings |
|
232,031 |
20,142,394 |
|
|
------------ |
------------ |
|
|
23,676,708 |
38,208,441 |
|
|
========== |
========== |
|
|
| 12.
CONTINGENCIES AND COMMITMENTS |
|
| There
were no contingencies and capital commitments as at the end of the year. |
|
|
| 13.
TANGIBLE FIXED ASSETS |
|
|
C O S T |
|
DEPRECIATION |
BOOK VALUE |
| DESCRIPTION |
As at |
Additions/ |
As at |
|
As at |
Adjustments |
Charge for |
As at |
As at |
|
|
July 01, 1999 |
(Deletions) |
June 30, 2000 |
Rate |
July 01,1999 |
|
the year |
June 30, 2000 |
June 30, 2000 |
|
|
Rupees |
Rupees |
Rupees |
% |
Rupees |
Rupees |
Rupees |
Rupees |
Rupees |
|
| OWNED |
|
| Leasehold
Improvements |
614,814 |
202,778 |
817,592 |
10 |
235,605 |
-- |
76,319 |
311,924 |
505,668 |
|
| Electric
and Gas Fittings |
80,216 |
28,800 |
109,016 |
10 |
41,186 |
-- |
9,962 |
51,148 |
57,868 |
|
| Equipments |
|
2,016,311 |
276,225 |
2,292,536 |
20 |
1,370,642 |
-- |
414,861 |
1,785,503 |
507,033 |
|
| Furniture
and Fixtures |
686,827 |
-- |
686,827 |
10 |
299,712 |
-- |
68,683 |
368,395 |
318,432 |
|
| Vehicles |
|
2,367,147 |
238,920 |
2,568,867 |
20 |
1,215,292 |
(27,280) |
510,153 |
1,698,165 |
870,702 |
|
|
|
(37,200) |
|
|
|
------------ |
------------ |
------------ |
------------ |
------------ |
------------ |
------------ |
------------ |
------------ |
|
|
5,765,315 |
746,723 |
6,474,838 |
|
3,162,437 |
(27,280) |
1,079,978 |
4,215,135 |
2,259,703 |
|
|
|
(37,200) |
|
|
| LEASED |
|
| Vehicle |
|
1,049,000 |
1,049,000 |
|
139,867 |
139,867 |
909,133 |
|
|
------------ |
------------ |
------------ |
|
------------ |
------------ |
------------ |
------------ |
------------ |
|
| June 30, 2000 Rupees |
5,765,315 |
1,795,723 |
7,523,838 |
|
3,162,437 |
(27,280) |
1,219,845 |
4,355,002 |
3,168,836 |
|
|
(37,200) |
|
|
========== |
========== |
========== |
========== |
========== |
========== |
========== |
========== |
========== |
|
| June30,1999 Rupees |
5,909,315 |
410,850 |
5,765,315 |
|
2,264,144 |
(92,171) |
990,464 |
3,162,437 |
2,602,878 |
|
|
(554,850) |
|
|
========== |
========== |
========== |
========== |
========== |
========== |
========== |
========== |
========== |
|
| 13.1
Deletion represents trade-in of motorcycle registration No. LOM 8161 with new
one. |
|
|
|
|
2000 |
1999 |
|
|
|
RUPEES |
RUPEES |
|
| 14.
NET INVESTMENT IN FINANCE LEASES |
|
| Lease
rentals receivable |
|
198,271,666 |
375,659,630 |
|
| Guaranteed
residual value of leased assets |
|
29,514,037 |
54,324,985 |
|
|
------------ |
------------ |
|
| Gross
investment in finance leases |
|
227,785,703 |
429,984,615 |
|
| Less:
Unearned finance income |
|
62,224,701 |
138,125,915 |
|
|
------------ |
------------ |
|
| Net
investment in lease finances |
|
165,561,002 |
291,858,700 |
|
| Less:
Current portion of net investment |
|
|
|
| In
finance leases |
|
51,691,415 |
79,087,031 |
|
| :Provision
for doubtful receivables |
|
-- |
13,097,768 |
|
|
------------ |
------------ |
|
|
51,691,415 |
92,184,799 |
|
|
------------ |
------------ |
|
|
113,869,587 |
199,673,901 |
|
|
========== |
========== |
|
| 14.1
Lease payments and guaranteed residual value due within next twelve months
ending on June 30, |
|
| 2001
are Rs. 77.307 million (June 30, 2000: Rs. 125.886 million) out of which Rs.
36.782 million |
|
| (June
30, 2000: Rs. 60.933 million) represent current maturity of principal
portion. |
|
|
| 14.2
Minimum lease payments and their present value are regrouped as below: |
|
|
|
2000 |
1999 |
|
|
Minimum |
Present Value |
Minimum |
Present Value |
|
|
Lease |
of Minimum |
Lease |
of Minimum |
|
|
Payments |
Lease |
Payments |
Lease |
|
|
|
Payments |
|
Payments |
|
|
| Due
not later than one year |
77,307,647 |
51,691,415 |
125,886,068 |
79,087,031 |
|
| Due
later than one year but |
|
| not
later than five years |
150,478,056 |
113,869,587 |
304,098,547 |
212,771,669 |
|
|
----------- |
----------- |
----------- |
----------- |
|
|
227,785,703 |
165,561,002 |
429,984,615 |
291,858,700 |
|
|
========== |
========== |
========== |
========== |
|
| 14.3
The Company has provided facilities to the below mentioned parties in excess
of twenty percent or |
|
| more
of its paid up capital and reserve which is in contradiction to the
requirements of Statutory |
|
| Regulatory
Order 345(I)/96 of Leasing Companies (Establishment and Regulation Rules,
1996). |
|
|
| 1.
Syed Bhais Lighting Limited |
|
| 2.
Nimir Industrial Chemicals Limited |
|
|
|
2000 |
1999 |
|
|
RUPEES |
RUPEES |
|
| 15.
LONG TERM INVESTMENTS |
|
| SHARES
OF QUOTED COMPANIES |
|
| Bankers
Equity Limited |
|
| 810,810
ordinary shares of Rupees 10 each |
|
15,152,602 |
15,152,602 |
|
| Medi
Glass Limited |
|
| 117,562
ordinary shares of Rupees 10 each |
|
752,397 |
752,397 |
|
|
------------ |
------------ |
|
|
15,904,999 |
15,904,999 |
|
|
| MODARABA
CERTIFICATES- QUOTED |
|
| Associated
Undertakings |
|
| Long
Term Venture Capital Modaraba |
|
| (Managed
by National Technology |
|
| Development
Corporation (Pvt) Ltd) |
|
| 445,
237 ordinary certificates of Rupees 5 each |
|
5,068,395 |
5,068,395 |
|
| Long
Term Venture Capital Modaraba |
|
| Nil
(1999: 29,992) Redeemable Capital Certificates |
|
-- |
1,949,480 |
|
|
------------ |
------------ |
|
|
5,068,395 |
7,017,875 |
|
|
| SHARES
OF UNQUOTED COMPANIES |
|
| Associated
Undertaking |
|
| LTV
Housing Finance Ltd |
|
| 1,250,000
ordinary shares of Rupees 10 each |
|
12,500,000 |
12,500,000 |
|
| (Chief
Executive: Mr. M. Younas Khan) |
|
| OTHER
UNQUOTED INVESTMENTS |
|
|
| Federal
Investment Bonds |
|
4,103,600 |
4,103,600 |
|
|
|
------------ |
------------ |
|
|
37,576,994 |
39,526,474 |
|
| Less:
Provision for diminution in value of investments |
|
21,178,303 |
17,512,063 |
|
|
------------ |
------------ |
|
|
16,398,691 |
22,014,411 |
|
|
========== |
========== |
|
| 15.1
The aggregate market value of listed modaraba certificates at the end of
financial year is |
|
| Rs.
556,546 (1999: Rs. 2,550,550). |
|
|
| 15.2
The aggregate market value of listed companies at the end of financial year
is Rs. 1,820,263 (1999: |
|
| Rs. 3,447,761). |
|
|
| 15.3
The aggregate break-up value of unquoted investments at the end of financial
year is Rs. 9,918,282 |
|
| (1999:
Rs. 11,912,500). |
|
|
| 16.
DEFERRED COSTS |
|
| Balance
at the beginning of the year |
|
1,157,491 |
2,078,198 |
|
| Less:
Amortized during the period |
|
920,708 |
920,707 |
|
|
------------ |
------------ |
|
|
236,783 |
1,157,491 |
|
|
========== |
========== |
|
|
|
|
|
|
2000 |
1999 |
|
|
NOTE |
RUPEES |
RUPEES |
|
|
| 17. ADVANCES, PREPAYMENTS AND OTHER RECEIVABLES |
|
| Advances-Considered
good |
|
| To
Chief Executive |
|
-- |
840,934 |
|
| To
Company's employees |
|
1,098,000 |
1,367,022 |
|
|
----------- |
----------- |
|
|
1,098,000 |
2,207,956 |
|
| Advance
income tax |
|
2,803,479 |
2,525,526 |
|
| Prepayments |
|
807,257 |
702,260 |
|
|
17.1 |
1,724,181 |
-- |
|
| Profit
accrued on investments |
|
|
2,397,433 |
4,175,633 |
|
|
17.2 |
23,862,562 |
-- |
|
| Excise
duty receivable |
|
2,528,841 |
2,629,456 |
|
| Other
receivable |
|
670,755 |
1,180,417 |
|
|
|
77,385,866 |
62,087,453 |
|
| Less:
Provision for doubtful receivables |
|
28,085,647 |
28,158,459 |
|
|
----------- |
----------- |
|
| Considered
good |
|
49,300,219 |
33,928,994 |
|
|
----------- |
----------- |
|
|
85,192,727 |
47,350,242 |
|
|
========== |
========== |
|
| 17.1
This represents receivable from the following associated undertakings on
account of share of |
|
| common
expenses |
|
|
| LTV
Capital Modaraba |
|
17.1.1 |
1,624,181 |
-- |
|
| First,
lnterfund Modaraba |
|
100,000 |
-- |
|
|
----------- |
----------- |
|
|
1,724,181 |
-- |
|
|
========== |
========== |
|
| 17.1.1
It is net of redemption of Redeemable Capital Certificates amounting to Rs.
1.95 million. |
|
|
| 17.1.2
The aggregate maximum balance due from associated undertakings at the end of
any month during |
|
| the
year was Rs. 1.7 million (1999: Rs. 4.3 million). |
|
|
| 17.2
The balance is net of certain inter company transactions and adjustments as
agreed in principle in a |
|
| meeting
of the Company's Management with BEL's Executive on May 20, 2000. The
adjustments |
|
| agreed
include the reversal of lease of Kashmir Sugar Mills Limited recorded in
previous year. |
|
| Certain
other adjustments are being discussed and the reconciliation with BEL is
still in progress. |
|
|
| 18.
CASH AND BANK BALANCES |
|
| Cash in hand |
|
7 |
10,988 |
|
| Cash
with banks |
|
| Current
account |
|
18.1 |
963,314 |
6,711,161 |
|
| Deposit
account |
|
5,539,095 |
135,645 |
|
|
------------ |
------------ |
|
|
6,502,416 |
6,857,794 |
|
|
========== |
========== |
|
| 18.1
This includes interest free deposit of Rs. 494,000 (1999: Rupees 494,000)
with the State Bank of |
|
| Pakistan
as required under Prudential Regulations for Non-Banking Financial
Institutions (NBFIs) |
|
| as
applicable to leasing companies. |
|
|
|
|
2000 |
1999 |
|
|
NOTE |
RUPEES |
RUPEES |
|
| 19.
INCOME FROM LEASE FINANCING |
|
| Leasing
income |
|
31,557,680 |
58,855,984 |
|
| Front-end
fee and documentation charges |
|
1,169,659 |
500,039 |
|
|
------------ |
------------ |
|
|
32,727,339 |
59,356,023 |
|
|
========== |
========== |
|
|
|
|
| 20.
OTHER INCOME |
|
| Profit
on Federal Investment Bonds |
|
173,773 |
574,000 |
|
| Return
on bank deposits |
|
386,220 |
376 |
|
| Other income |
|
142,865 |
339,027 |
|
|
------------ |
------------ |
|
|
702,858 |
913,403 |
|
|
========== |
========== |
|
|
|
|
| 21.
ADMINISTRATIVE AND OPERATING EXPENSES |
|
| Staff
salaries and other benefits |
|
21.1 |
7,745,896 |
5,536,452 |
|
| Traveling
and conveyance |
|
645,855 |
371,908 |
|
| Rent,
rates and taxes |
|
958,500 |
-- |
|
| Electricity,
gas and water |
|
353,128 |
156,739 |
|
| Advertisement |
|
332,230 |
30,500 |
|
| Printing,
stationery and supplies |
|
419,197 |
105,539 |
|
| Postage
and courier |
|
80,311 |
70,674 |
|
| Telephone
and fax |
|
551,014 |
157,192 |
|
| Newspapers,
books and magazines |
|
20,406 |
11,067 |
|
| Fees
and subscriptions |
|
674,100 |
907,922 |
|
| Entertainment |
|
-- |
2,729 |
|
| Insurance |
|
1,855,094 |
657,453 |
|
| Repair
and maintenance |
|
738,620 |
246,414 |
|
| Legal
and professional |
|
408,658 |
3,457 |
|
| Auditors'
remuneration |
|
|
|
| Audit
fee-Statutory |
|
50,000 |
40,000 |
|
| -Other |
|
100,000 |
62,820 |
|
| Out
of pocket expenses |
|
18,679 |
9,000 |
|
|
------------ |
------------ |
|
|
168,679 |
111,820 |
|
| Depreciation |
|
1,219,845 |
990,464 |
|
| Miscellaneous
expenses |
|
59,059 |
51,329 |
|
|
------------ |
------------ |
|
|
16,230,592 |
9,411,659 |
|
|
========== |
========== |
|
| 21.1
It includes Rs. 812,004 and Rs. 184,437 on account of staff gratuity and
provident fund |
|
| respectively. |
|
| 21.2
Number of employees at the end of the year was 19 (1999: 23). |
|
|
| 22.
FINANCIAL AND OTHER CHARGES |
|
| Financial
charges |
|
| Mark-up
on long term loans |
|
4,227,245 |
7,819,362 |
|
| Return
on certificates of investment |
|
7,303,317 |
14,150,917 |
|
| Lease
financial charges |
|
117,930 |
-- |
|
| Mark-up
on short term finances |
|
10,367,131 |
13,435,469 |
|
| Bank charges |
|
87,095 |
180,917 |
|
|
------------ |
------------ |
|
|
22,102,718 |
35,586,665 |
|
| Other charges |
|
|
|
| Loss
on termination of leases |
|
397,160 |
-- |
|
| Receivables
written off |
|
-- |
6,596,115 |
|
| Loss
on disposal of fixed assets |
|
-- |
1,609 |
|
|
------------ |
------------ |
|
|
22,499,878 |
42,184,389 |
|
|
========== |
========== |
|
|
|
|
| 23.
PROVISION FOR TAXATION |
|
|
|
| Current |
|
163,637 |
296,704 |
|
| Deferred |
|
7,624,603 |
9,081,878 |
|
|
------------ |
------------ |
|
|
7,788,240 |
9,378,582 |
|
|
========== |
========== |
|
| 23.1
Provision for minimum tax at 0.5% of the turnover under section 80D of the
Income Tax Ordinance, |
|
| 1979
has been made in these financial statements, while no provision for current
tax has been made |
|
| due
to tax carry forward losses as per returns filed and appeals filed against
assessment orders for |
|
| the
assessment years 1994-95 through 1998-99. |
|
|
| 23.2
Deferred tax for the current year amounting the to Rs. 3,088,404 has been
provided. Further in |
|
| accordance
with the Circular No.16 issued by the Securities and Exchange Commission of
Pakistan |
|
| deferred
tax of Rs. 4,536,199 being one fifth of the unprovided deferred tax liability
as at the |
|
| beginning
of the financial year ending June 30, 1998 has been provided. |
|
|
| 24.
LOSS PER SHARE |
|
| Loss
after taxation |
|
(12,270,585) |
(56,498,302) |
|
| Number
of ordinary shares |
|
10,000,000 |
10,000,000 |
|
|
------------ |
------------ |
|
| Loss per share |
|
(1.23) |
(5.65) |
|
|
========== |
========== |
|
|
| 25.
INTEREST / MARK-UP RATE RISK |
|
| Interest
/ mark-up rate risk and sensitivity of the Company's financial liabilities
and financial assets as at |
|
| June
30,2000 can be evaluated from the following: |
|
|
EXPOSED TO
INTEREST/MARK-UP |
EXPOSED TO
INTEREST/MARK. UP |
NOT EXPOSED |
|
|
RATE PRICE
RISK |
RATE CASH
FLOW RISK |
TO INTEREST/ |
|
|
Financial |
Within |
More than one |
Above |
Within |
More than one |
Above |
MARK-UP |
|
|
Instrument |
one year |
year and up to |
five years |
one year |
year and up to |
five years |
RATE RISK |
|
|
|
five years |
five years |
|
five years |
five years |
|
|
|
|
Rupees |
Rupees |
Rupees |
Rupees |
Rupees |
Rupees |
Rupees |
Rupees |
|
| LIABILITIES |
|
| Long term loans |
5,652,401 |
3,746,000 |
1,906,401 |
-- |
-- |
-- |
-- |
-- |
|
| Certificates
of investment |
75,885,043 |
71,577,667 |
4,307,376 |
-- |
-- |
-- |
-- |
-- |
|
| Liabilities
against assets |
|
| subject
to finance lease |
894,272 |
251,435 |
642,837 |
-- |
-- |
-- |
-- |
-- |
|
| Long
term deposits |
29,684,533 |
-- |
-- |
-- |
-- |
-- |
-- |
29,684,533 |
|
| Finance
under mark-up |
|
| arrangements |
|
58,336,211 |
58,336,211 |
-- |
-- |
-- |
-- |
-- |
-- |
|
| Accrued
and other |
|
| liabilities |
|
23,009,472 |
-- |
-- |
-- |
-- |
-- |
-- |
23,009,472 |
|
|
------------ |
------------ |
------------ |
------------ |
------------ |
------------ |
------------ |
------------ |
|
|
193,461,932 |
133,911,313 |
6,856,614 |
-- |
-- |
-- |
-- |
52,694,005 |
|
|
========== |
========== |
========== |
========== |
========== |
========== |
========== |
========== |
|
| ASSETS |
|
| Net
investment in leases |
165,561,002 |
51,691,415 |
113,869,587 |
-- |
-- |
-- |
-- |
-- |
|
| Long
term investments |
16,398,691 |
4,103,600 |
-- |
-- |
-- |
-- |
-- |
12,295,091 |
|
| Long
term deposits |
886,670 |
-- |
-- |
-- |
-- |
-- |
-- |
886,670 |
|
| Advances
and other |
|
| receivables |
|
81,581,991 |
-- |
-- |
-- |
-- |
-- |
-- |
81,581,991 |
|
| Cash
and bank balances |
6,502,416 |
5,539,095 |
-- |
-- |
-- |
-- |
-- |
963,321 |
|
|
------------ |
------------ |
------------ |
------------ |
------------ |
------------ |
------------ |
------------ |
|
|
270,930,770 |
61,334,110 |
113,869,587 |
-- |
-- |
-- |
-- |
95,727,073 |
|
| Total
interest/mark-up |
========== |
========== |
========== |
========== |
========== |
========== |
========== |
========== |
|
| rate
sensitivity gap |
77,468,838 |
72,577,203) |
107,012,973 |
-- |
-- |
-- |
-- |
43,033,068 |
|
|
========== |
========== |
========== |
========== |
========== |
========== |
========== |
========== |
|
|
| 25.1.
INTEREST I MARK-UP RATE RISK |
|
| Interest
/ mark-up rate risk and sensitivity of the Company's financial liabilities
and financial assets as at |
|
| June
30,1999 can be evaluated from the following: |
|
|
EXPOSED TO
INTEREST/MARK-UP |
EXPOSED TO
INTEREST/MARK. UP |
NOT EXPOSED |
|
|
RATE PRICE
RISK |
RATE CASH
FLOW RISK |
TO INTEREST/ |
|
|
Financial |
Within |
More than one |
Above |
Within |
More than one |
Above |
MARK-UP |
|
|
Instrument |
one year |
year and up to |
five years |
one year |
year and up to |
five years |
RATE RISK |
|
|
|
five years |
five years |
|
five years |
five years |
|
|
|
|
Rupees |
Rupees |
Rupees |
Rupees |
Rupees |
Rupees |
Rupees |
Rupees |
|
| LIABILITIES |
|
| Long
term loans |
18,228,401 |
10,082,000 |
8,146,401 |
-- |
-- |
-- |
-- |
-- |
|
| Certificates
of investment |
81,325,785 |
77,763,410 |
3,562,375 |
-- |
-- |
-- |
-- |
-- |
|
| Long
term deposits |
54,495,481 |
-- |
-- |
-- |
-- |
-- |
-- |
54,495,481 |
|
| Finance
under mark-up |
|
|
| arrangements |
|
78,965,305 |
78,965,305 |
-- |
-- |
-- |
-- |
-- |
-- |
|
| Accrued
and other |
|
|
| liabilities |
|
37,375,864 |
-- |
-- |
-- |
-- |
-- |
-- |
37,375,864 |
|
|
------------ |
------------ |
------------ |
------------ |
------------ |
------------ |
------------ |
------------ |
|
|
270,390,836 |
166,810,715 |
11,708,776 |
-- |
-- |
-- |
-- |
91,871,345 |
|
|
========== |
========== |
========== |
========== |
========== |
========== |
========== |
========== |
|
| ASSETS |
|
| Net
investment in leases |
291,858,700 |
79,087,031 |
212,771,669 |
-- |
-- |
-- |
-- |
-- |
|
| Long
term investments |
22,014,411 |
6,053,080 |
-- |
-- |
-- |
-- |
-- |
15,961,331 |
|
| Long
term deposits |
393,070 |
-- |
-- |
-- |
-- |
-- |
-- |
393,070 |
|
| Advances
and other |
|
|
|
|
| receivables |
|
44,122,456 |
-- |
-- |
-- |
-- |
-- |
-- |
44,122,456 |
|
| Cash
and bank balances |
6,857,794 |
135,645 |
-- |
-- |
-- |
-- |
-- |
6,722,149 |
|
|
------------ |
------------ |
------------ |
------------ |
------------ |
------------ |
------------ |
------------ |
|
|
365,246,431 |
85,275,756 |
212,771,669 |
-- |
-- |
-- |
-- |
67,199,006 |
|
|
========== |
========== |
========== |
========== |
========== |
========== |
========== |
========== |
|
| Total
interest/mark-up |
|
| rate
sensitivity gap |
94,855,595 |
(81,534,959) |
201,062,893 |
-- |
-- |
-- |
-- |
(24,672,339) |
|
|
========== |
========== |
========== |
========== |
========== |
========== |
========== |
========== |
|
|
| 25.2
Effective interest / mark-up rates for financial assets and liabilities are
given below: |
|
|
|
2000 |
1999 |
|
|
% |
% |
|
| ASSETS |
|
| Net
investment in leases |
|
14.00-45.82 |
15.00-46.59 |
|
| Long
term investments |
|
14.00 |
14.00 |
|
| Cash
with bank |
|
8.00-12.50 |
10.00-12.00 |
|
|
| LIABILITIES |
|
| Certificates
of investment |
|
14.00-23.50 |
17.25-23.50 |
|
| Long term loan |
|
21.50-23.50 |
20.50-23.50 |
|
| Liabilities
against assets subject to finance lease |
|
22.00 |
|
|
| Finances
under mark-up arrangement |
|
19.00-21.00 |
19.60-21.50 |
|
|
| 26.
CHIEF EXECUTIVE, DIRECTOR'S AND EXECUTIVES' REMUNERATION |
|
| The
aggregate amount charged in the accounts for the year for remuneration, |
|
| including
all benefits to the chief executive, director and executives of the Company
is |
|
| as follows: |
|
|
|
CHIEF EXECUTIVE |
DIRECTOR |
EXECUTIVES |
|
|
2000 |
1999 |
2000 |
1999 |
2000 |
1999 |
|
| Remuneration |
|
800,282 |
408,000 |
696,679 |
-- |
748,770 |
445,200 |
|
| Leave passage |
|
37,233 |
185,904 |
9,599 |
400,000 |
52,778 |
52,500 |
|
| Perquisites |
|
278,735 |
422,400 |
257,807 |
-- |
578,400 |
564,960 |
|
| Retirement
benefits |
779,558 |
40,800 |
|
44,526 |
|
|
------------- |
------------- |
------------- |
------------- |
------------- |
------------- |
|
| Rupees |
|
1,895,808 |
1,057,104 |
964,085 |
400,000 |
1,379,948 |
1,107,186 |
|
|
========== |
========== |
========== |
========== |
========== |
========== |
|
| Number |
|
1 |
1 |
1 |
1 |
4 |
3 |
|
|
========== |
========== |
========== |
========== |
========== |
========== |
|
| 26.1
In addition, the chairman, chief executive, one director and three executives
have also been |
|
| provided
free use of Company's maintained vehicles. |
|
| 26.2
The aggregate amount charged in the accounts for the year for fees to 5
directors is Rs. 40,000 |
|
| (1999:
Rs. 20,000 for 6 directors). |
|
|
| 27.
CREDIT RISK |
|
| The
management is of the view that it is not exposed to significant concentration
of credit risk as its financial |
|
| statements
are adequately diversified in organizations of sound financial standing
covering various |
|
| industrial
sectors and segments. Further an allowance for potential lease losses is
maintained at a level |
|
| which
in the judgement of management is adequate to provide for potential lease
losses on the portfolio that |
|
| can
be reasonably anticipated. |
|
|
| A
sector wise break up of lease portfolio as at June 30, 2000 is as follows; |
|
|
|
EXPOSURE |
|
| SECTOR |
|
Rupees |
% |
|
| Textile |
|
11,446,498 |
6.91 |
|
| Sugar
and allied |
|
5,577,488 |
3.37 |
|
| Cement |
|
4,766,558 |
2.88 |
|
| Electrical
and engineering |
|
36,885,246 |
22.26 |
|
| Steel and allied |
|
9,998,109 |
6.03 |
|
| Transportation
and communication |
5,520,063 |
3.33 |
|
| Chemical
and pharmaceuticals |
|
51,764,076 |
31.23 |
|
| Food
and allied |
|
9,264,772 |
5.59 |
|
| Other |
|
30,507,993 |
18.40 |
|
|
------------ |
------------ |
|
|
165,730,803 |
100.00 |
|
|
========== |
========== |
|
|
|
|
| 28.
FAIR VALUE OF FINANCIAL INSTRUMENTS |
|
| The
carrying value of financial assets and liabilities approximates their fair
values as reflected in the financial |
|
| statements. |
|
|
| 29. FIGURES |
|
| -have
been rounded off to the nearest rupee. |
|
| -of
previous year have been rearranged and regrouped wherever, necessary for the
purposes of |
|
| comparison. |
|
|
|
CHIEF EXECUTIVE |
|
DIRECTOR |
|
|
|
| PATTERN
OF SHAREHOLDING AS AT JUNE 30, 2000 |
|
|
| Number of |
Share
Holdings |
Total Shares |
|
| Share-holders |
From |
To |
Held |
|
|
| 212 |
1 |
TO |
500 |
68,700 |
|
| 138 |
501 |
TO |
1,000 |
76,800 |
|
| 82 |
1,001 |
TO |
2,000 |
83,300 |
|
| 21 |
2,001 |
TO |
3,000 |
33,500 |
|
| 14 |
3,001 |
TO |
4,000 |
52,600 |
|
| 15 |
4,001 |
TO |
5,000 |
75,000 |
|
| 24 |
5,001 |
TO |
10,000 |
222,100 |
|
| 13 |
10,001 |
TO |
20,000 |
226,300 |
|
| 2 |
20,001 |
TO |
30,000 |
60,000 |
|
| 1 |
30,001 |
TO |
40,000 |
40,000 |
|
| 5 |
40,001 |
TO |
50,000 |
240,500 |
|
| 3 |
50,001 |
TO |
100,000 |
300,000 |
|
| 2 |
100,001 |
TO |
150,000 |
218,600 |
|
| 2 |
150,001 |
TO |
200,000 |
380,600 |
|
| 1 |
200,001 |
TO |
250,000 |
250,000 |
|
| 1 |
250,001 |
TO |
300,000 |
292,500 |
|
| 1 |
450,001 |
TO |
500,000 |
490,000 |
|
| 3 |
550,001 |
TO |
Above |
6,889,500 |
|
| ----------- |
|
----------- |
|
| 540 |
|
Total |
10,000,000 |
|
| ========== |
|
========== |
|
| There
are no shareholdings in the slabs which have not been included above. |
|
|
| Category of |
|
Number of |
|
|
| Share-holders |
|
Share-holders |
Shares held |
Percentage |
|
|
| Individuals |
|
355 |
1,662,200 |
16.62 |
|
| Banks |
|
1 |
50,000 |
0.50 |
|
| Financial
Institutions |
8 |
2,059,500 |
20.59 |
|
| Insurance
Companies |
3 |
56,000 |
0.56 |
|
| Modarabas
Companies |
7 |
2,801,800 |
28.02 |
|
| Private
Ltd. Companies |
3 |
70,500 |
0.71 |
|
| Investment
Companies |
2 |
28,800 |
0.29 |
|
| Joint
Stock Companies |
2 |
827,000 |
8.27 |
|
| Central Depository Company |
159 |
2,444,200 |
24.44 |
|
|
----------- |
----------- |
----------- |
|
| Total |
|
540 |
10,000,000 |
100.00 |
|
|
========== |
========== |
========== |
|
|
|
|
|
|
|
|
|
|
|
|
|
