| Network Leasing Corporation Limited |
|
|
|
|
|
|
|
| Annual
Report 2000 |
|
|
|
| CONTENTS |
|
|
| Management |
|
|
| Directors'
Report |
|
| Operational
Review |
|
| Auditors'
Report |
|
| Financial
Statements |
|
| Pattern
of Shareholding |
|
| Company
Information |
|
| Notice
of the Annual General Meeting |
|
|
|
| MANAGEMENT |
|
|
| Board
of Directors |
|
| Mr.
Mohammed Elias |
|
| Ms.
Musaret Siddiqi |
|
| Mr.
Zaigham M. Rizvi |
|
| Mr.
Hanif A. Sattar |
|
| Mr.
Emile HJ Groot |
|
| Dr.
Mahfooz All |
|
| Mr.
Abdul Qayyum Bux |
|
| Mr.
Yusuf A. Sattar |
|
| Mr.
Asif Siddiqi |
|
|
| Executive
Management |
|
| Mr.
Asif Siddiqi FCA |
|
Managing Director &
CEO |
|
| Mr.
Yusuf A.'Sattar FCMA |
|
Executive Director-
Finance |
|
| Ms.
Musaret Siddiqi FCA |
|
Executive Director-
Operations |
|
|
|
| DIRECTORS'
REPORT |
|
| TOTHE
SHAREHOLDERS |
|
|
| Your
directors have pleasure in presenting to the shareholders the results and the
Annual Report for |
|
| the
year ended June 30, 2000. |
|
|
| Financials |
|
| The
operating profit for the year ended June 30, 2000 was Rs. 10,083,420. The
profit after tax for the |
|
| year
was Rs. 7,652,925 while the after tax profit for the year ended June 30, 1999
was Rs. 2,624,783. |
|
|
| Deferred
tax, which was previously explained only by way of a note in the accounts by
all leasing |
|
| companies,
has actually been provided for in this year's accounts, under the direction
from the |
|
| Securities
& Exchange Commission of Pakistan, as a result of the requirement of
IAS-12. |
|
|
| With
regard to the company's profitability, your directors are confident that with
the expected stablisation |
|
| of
the economic conditions, the profitability of your company will improve
further during the financial |
|
| year
ending June 2001. |
|
|
| The
profit is proposed to be appropriated as under: |
|
|
|
2000 |
1999 |
|
|
Rupees |
Rupees |
|
|
| Operating
profit |
|
10,083,420 |
8,170,354 |
|
| Taxation: |
|
|
|
| Current |
|
(2,430,495) |
(589,552) |
|
| Prior |
|
-- |
(4,956,019 |
|
|
---------- |
---------- |
|
| Profit
after tax |
|
7,652,925 |
2,624,783 |
|
| Unappropriated
profit brought forward |
|
3,668,073 |
4,439,634 |
|
|
---------- |
---------- |
|
|
11,320,998 |
7,064,417 |
|
|
|
|
| Appropriations: |
|
|
|
| Transfer
to special reserve |
|
(1,5301585) |
(524,957 |
|
| Capital
reserve for deferred taxation |
|
(1,039,565) |
(2,871,387 |
|
| Proposed
dividend |
|
(7,500,000) |
-- |
|
|
---------- |
---------- |
|
| Unappropriated
profit carried forward |
|
1,250,848 |
3,668,073 |
|
|
========== |
========== |
|
|
| Directors |
|
| Ms.
Samina H. Khan retired on August 1,2000 after completing the three years
tenure and Mr. Zaigham |
|
| M.
Rizvi was elected from that date. The Board wishes to thank Ms. Samina H.
Khan for her valuable |
|
| services
and welcomes Mr. Zaigham M. Rizvi as a Board member. |
|
|
| Year
2000 computer compliance |
|
| The
managment had thoroughly re-examined all the systems, software, and hardware.
They have |
|
| successfully
crossed the year 2000 baseline. |
|
|
| Auditors |
|
| The
retiring auditors Messrs Ford Rhodes Robson Morrow, Chartered Accountants,
being eligible, |
|
| offer
themselves for re-appointment. |
|
|
| Shareholding
pattern |
|
| A
statement reflecting the pattern of shareholding is attached to the Annual
Report. |
|
|
| Acknowledgment |
|
| The
directors wish to place on record their appreciation for the hard work put in
and the dedication |
|
| displayed
by the staff and the management in performance of their duties. |
|
|
| On
behalf of the Board |
|
|
| Mohammed
Elias |
|
| Chairman |
|
|
| Karachi. |
|
| November
16, 2000 |
|
|
|
| OPERATIONAL
REVIEW |
|
|
| Overview |
|
| On
30th June 2000, the company completed its fifth year of full operations. With
everyone's |
|
| support
and undertstanding, we have managed to make steady progress. |
|
|
| Network
Leasing was formed to provide lease financing and developmental support
services to |
|
| micro
and small enterprises and cottage industries as its main business. |
|
|
| These
enterprises form a vital part of the country's economy. They produce goods
and services |
|
| for
the vast majority of the people and at the same time provide employment
opportunities in |
|
| urban
as well as in rural areas. |
|
|
| The
progress during the period under review was better than the previous year.
The economic |
|
| situation
is expected to imporve and we hope to expand our outreach further during the
current |
|
| year. |
|
|
| Leasing
Operations |
|
| Our
clients include cottage industrial units, primary and secondary schools in
low income areas, |
|
| small
hospitals and clinics, service and repair workshops, small stores, upcoming
professionals |
|
| such
as doctors, lawyers and engineers, small fishermen, small farmers and dairy
farmers in |
|
| the
rural areas. |
|
|
| Health
and education have been identified as the two key areas which not only effect
the present |
|
| but
coming generations as well. Consequently, considerable efforts are directed
towards these |
|
| sectors
in all low income areas. Women and children are the main beneficiaries in
these sectors. |
|
| As
mentioned earlier, our portfolio includes primary schools, high schools,
technical training |
|
| institutes,
clinics, maternity homes and small hospitals. |
|
|
| The
separate Women Division established in the previous years is now functioning
reasonably |
|
| satisfactorily. |
|
|
| Our
endeavor during the period has been to reach the women at the grass root
level. We have |
|
| succeeded
to a certain extent by extending our outreach to the main cities and
surrounding |
|
| villages,
but this process will take time since we accord high priority to the clients'
income |
|
| generating
capabilities in order to make the operation sustainable. |
|
|
| Geographical
Coverage |
|
| During
the period under review, regular visits were made by our senior executives as
well as the |
|
| programme
officers to the villages and semi-urban areas in Sindh, Punjab and NWFR |
|
|
| The
Lahore office has now been functioning for over 3 years and the client base
there is |
|
| expanding.
The Peshawar office is presently in the process of being re-inforced and
activated |
|
| further
as we are endeavoring to increase the operations in the NWFR |
|
|
| Since
we started our operations from Karachi, a large number of our clients are
urban based. |
|
| The
cottage and small industries are in the sub-urban areas and agriculture and
fisheries based |
|
| clients
are rural. As we expand our outreach to more agricultural based activities,
the proportion |
|
| of
the rural clients will increase. |
|
|
| Institutional
Development |
|
| The
internal systems and controls for monitoring the clients were further
strengthened during the |
|
| period.
Since the number of clients had increased, a number of tasks that were
previously done |
|
| manually,
had to be computerised. Special emphasis was laid on the recovery systems and
client |
|
| monitoring.
Due to increa~e in the number of client=, the number of late payer3 and
problem ca3e3 |
|
| naturally
increased. In order to cope with that, additional staff was hired and
trained. |
|
|
| Support
and Training to the Clients |
|
| Assisting
the client in preparing the financial statements is now standardized. |
|
|
| Our
staff prepare the client's financial statements for the last 3 years, with
the help of the |
|
| information
and figures provided by the clients. This procedure is followed in each and
every |
|
| case
where the clients cannot prepare the statements themselves. In cases where
the clients |
|
| have
a little knowledge but have not prepared the accounts, our staff help them
prepare the |
|
| statements. |
|
|
| Recoveries |
|
| The
rental recovery continues to be satisfactory. The overdue rental position of
over 3 months |
|
| on
30 June 2000 was 2.24% of the total portfolio. |
|
|
| Most
of the over dues are with prior arrangement, and are recoverable eventually.
There were |
|
| some
willful default cases. These lessees have been take to the banking court. We
are reasonably |
|
| hopeful
that in the end the amounts will be recovered. In other cases the assets were |
|
| repossessed. |
|
|
| Resource
Mobilisation |
|
| During
the year we mobilized Rs. 125 million from various financial institutions. |
|
|
| Credit
Rating |
|
| Pakistan
Credit Rating Agency (PACRA) who are the affiliates of Fitch Inc., New York,
rated |
|
| Network
Leasing Corporation Limited and assigned A-3, short term and BBB long term
for its |
|
| entity
rating. These ratings are investment grade and denote a low expectation of
credit risk |
|
| and
adequate capacity to service financial obligations on a timely basis. |
|
|
| Acknowledgement |
|
| We
are grateful to FMO, SDC (the Government of Switzerland), the World Bank
Group, the |
|
| Asian
Development Bank and the Ministry of Finance, the Government of Pakistan for
the |
|
| confidence
they reposed in us. |
|
|
| We
owe special gratitude to our shareholders and the clients for their kindness
and support. |
|
|
| We
take this opportunity to thank the Securities & Exchange Commission of
Pakistan for their |
|
| continued
support and understanding. Our thanks also to the State Bank of Pakistan for
their |
|
| valuable
advice and guidance. |
|
|
| Musaret
Siddiqi (Ms.) |
|
| Executive
Director- Operations |
|
|
| Karachi |
|
| November
17, 2000 |
|
|
|
| AUDITORS'
REPORTTOTHE MEMBERS |
|
|
| We
have audited the annexed balance sheet of NETWORK LEASING CORPORATION LIMITED |
|
| as
at June 30, 2000 and the related profit and loss account, cash flow statement
and statement |
|
| of
changes in equity together with the notes forming part thereof, for the year
then ended and |
|
| we
state that we have obtained all the information and explanations which, to
the best of our |
|
| knowledge
and belief, were necessary for the purposes of our audit. |
|
|
| It
is the responsibility of the company's management to establish and maintain a
system of |
|
| internal
control, and prepare and present the above said statements in conformity with
the |
|
| approved
accounting standards and the requirements of the Companies Ordinance, 1984.
Our |
|
| responsibility
is to express an opinion on these statements based on our audit. |
|
|
| We
conducted our audit in accordance with the auditing standards as applicable
in Paksitan. |
|
| 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 accounts have been kept by the company as
required by |
|
| the
Companies Ordinance, 1984; |
|
|
| (b)
in our opinion: |
|
|
| (i)
the balance sheet and profit and loss account together with the notes thereon |
|
| have
been drawn up in conformity with the Companies Ordinance, 1984 and are |
|
| in
agreement with the books of account and are further in accordance with |
|
| accounting
policies consistently applied; |
|
|
| (ii)
the expenditure incurred during the year was for the purpose of the company's |
|
| business;
and |
|
|
| (iii)
the business conducted, investments made and the expenditure incurred during |
|
| the
year were in accordance with the objects of the company; |
|
|
| (c)
in our opinion and to the best of our information and according to the
explanations given |
|
| to
us, the balance sheet, profit and loss account, cash flow statement and
statement of |
|
| changes
in equity together with the notes forming part thereof conform with approved |
|
| accounting
standards as applicable in Pakistan, and, give the information required by |
|
| the
Companies Ordinance, 1984 in the manner so required and respectively give a
true |
|
| and
fair view of the state of the company's affairs as at June 30, 2000 and of
the profit, |
|
| its
cash flows and changes in equity for the year then ended; and |
|
|
| (d)
in our opinion no Zakat was deducted
at source under the Zakat and
Ushr Ordinance. |
|
| 1980. |
|
|
| Karachi |
|
Ford, Rhodes, Robson, Morrow |
|
| November
15, 2000 |
|
Chartered Accountants |
|
|
|
| BALANCE
SHEET AS AT JUNE 30, 2000 |
|
|
|
Note |
2000 |
1999 |
|
|
|
Rupees |
Rupees |
|
| ASSETS |
|
| NON-CURRENT
ASSETS |
|
| Tangible
fixed assets |
|
3 |
14,102,467 |
15,658,677 |
|
|
| Minimum
lease payments receivable |
|
394,922,565 |
283,957,492 |
|
| Residual
value of leased assets |
|
52,498,565 |
42,653,695 |
|
|
----------- |
----------- |
|
| Installment
contract receivable |
|
447,421,130 |
326,611,187 |
|
| Unearned
finance income |
|
(90,805,679 |
(67,644,273 |
|
|
----------- |
----------- |
|
| Net
investment in leases |
|
356,615,451 |
258,966,914 |
|
| Current
maturity of net investment in leases |
|
(136,610,961 |
(109,003,217 |
|
| Provision
for potential lease losses |
|
5 |
(2,336,964 |
(2,330,702 |
|
|
|
----------- |
----------- |
|
|
|
217,667,526 |
147,632,995 |
|
|
|
|
|
| Long
term deposits |
|
6 |
440,505 |
457,505 |
|
| Certificate
of investment |
|
7 |
6,685,000 |
6,685,000 |
|
| Deferred
costs |
|
8 |
8,999,857 |
9,770,504 |
|
|
|
----------- |
----------- |
|
| TOTAL
NON-CURRENT ASSETS |
|
247,895,355 |
180,204,681 |
|
|
|
|
| CURRENT
ASSETS |
|
|
|
| Current
maturity of net investment in leases |
|
136,610,961 |
109,003,217 |
|
| Short
term investments |
|
9 |
700,000 |
700,000 |
|
| Advances,
deposits, prepayments and |
|
|
|
| other
receivables |
|
10 |
25,070,903 |
19,429,087 |
|
| Cash
and bank balances |
|
11 |
86,181,852 |
29,040,794 |
|
|
|
----------- |
----------- |
|
| TOTAL
CURRENT ASSETS |
|
248,563,716 |
158,173,098 |
|
|
----------- |
----------- |
|
| TOTAL
ASSETS |
|
496,459,071 |
338,377,779 |
|
|
========== |
========== |
|
| 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 |
|
12 |
100,000,000 |
100,000,000 |
|
| Reserves |
|
13 |
13,335,626 |
13,182,701 |
|
|
|
----------- |
----------- |
|
|
|
113,335,626 |
113,182,701 |
|
| NON-CURRENT
LIABILITIES |
|
|
|
| Long
term loans and finances |
|
14 |
164,627,748 |
151,254,900 |
|
| Long
term deposits |
|
15 |
39,084,465 |
30,335,814 |
|
|
----------- |
----------- |
|
| TOTAL
NON-CURRENT LIABILITIES |
|
203,712,213 |
181,590,714 |
|
| CURRENT
LIABILITIES |
|
| Current
maturity of long term liabilities |
|
16 |
38,157,384 |
30,033,781 |
|
| Short
term loans and finances |
|
17 |
75,000,000 |
-- |
|
| Musharika
arrangements |
|
18 |
10,000,000 |
3,333,334 |
|
| Morabaha
arrangements |
|
19 |
10,000,000 |
-- |
|
| Short
term running finances |
|
20 |
22,332,730 |
-- |
|
| Creditors,
accrued and other liabilities |
|
21 |
16,256,558 |
10,067,594 |
|
| Unclaimed
dividend |
|
164,560 |
169,655 |
|
| Proposed
dividend |
|
7,500,000 |
-- |
|
|
----------- |
----------- |
|
| TOTAL
CURRENT LIABILITIES |
|
179,411,232 |
43,604,364 |
|
| CONTINGENCIES
AND COMMITMENTS |
22 |
-- |
-- |
|
|
----------- |
----------- |
|
| TOTAL
EQUITY AND LIABILITIES |
|
496,459,071 |
338,377,779 |
|
|
========== |
========== |
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
Mohammed Elias |
|
Asif Siddiqi |
|
|
Chairman / Director |
|
Chief Executive |
|
|
|
| PROFIT
AND LOSS ACCOUNT |
|
| FOR
THE YEAR ENDED JUNE 30, 2000 |
|
|
|
|
Note |
2000 |
1999 |
|
|
|
Rupees |
Rupees |
|
|
| INCOME |
|
| Income
from leasing operations |
|
59,929,541 |
45,256,658 |
|
| Other
Income |
|
23 |
8,630,050 |
1,992,882 |
|
|
|
----------- |
----------- |
|
|
68,559,591 |
47,249,540 |
|
|
| EXPENDITURE |
|
| Direct
cost of leases |
|
4,478,460 |
3,244,718 |
|
| .Administrativeand
operating expenses |
|
24 |
16,426,140 |
11,970,154 |
|
| Financial
charges |
|
25 |
35,724,720 |
21,180,965 |
|
| Amortization
of deferred costs |
|
|
770,647 |
1,837,360 |
|
| Provision
and write offs on lease portfolio |
26 |
1,076,204 |
845,989 |
|
|
|
----------- |
----------- |
|
|
|
58,476,171 |
39,079,186 |
|
|
|
----------- |
----------- |
|
| Operating
profit for the year |
|
10,083,420 |
8,170,354 |
|
|
| Taxation |
|
27 |
|
| Current |
|
2,430,495 |
589,552 |
|
| Prior |
|
-- |
4,956,019 |
|
|
----------- |
----------- |
|
|
2,430,495 |
5,545,571 |
|
|
----------- |
----------- |
|
| Profit
for the year |
|
7,652,925 |
2,624,783 |
|
| Unappropriated
profit brought forward |
|
3,668,073 |
4,439,634 |
|
|
----------- |
----------- |
|
| Profit
available for appropriation |
|
11,320,998 |
7,064,417 |
|
| Appropriations |
|
|
| Transfer
to special reserve |
|
13.1 |
1,530,585 |
524,957 |
|
| Transfer
to capital reserve for deferred taxation |
13.2 |
1,039,565 |
2,871,387 |
|
| Proposed
dividend - Re. 0.75 (7.5%) per share |
|
|
| (1999:
Rs. Nil) |
|
|
7,500,000 |
-- |
|
|
|
----------- |
----------- |
|
|
|
10,070,150 |
3,396,344 |
|
|
|
----------- |
----------- |
|
| Unappropriated
profit carried forward |
|
|
1,250,848 |
3,668,073 |
|
|
|
|
========== |
========== |
|
| Basic
earnings per share |
|
28 |
0.77 |
0.26 |
|
|
|
========== |
========== |
|
| Diluted
earnings per share |
|
28 |
0.70 |
0.24 |
|
|
========== |
========== |
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
Mohammed Elias |
|
Asif Siddiqi |
|
|
Chairman / Director |
|
Chief Executive |
|
|
|
| STATEMENT
OF CHANGES IN EQUITY |
|
| FORTHEYEAR
ENDED JUNE 30, 2000 |
|
|
|
Capital reserves Revenue
reserve |
|
| Issued,
subscribed |
|
Deferred |
Unappropriated |
Total |
|
|
and paid-up |
reserve |
taxation |
profit |
|
|
capital |
|
reserve |
|
|
Rupees |
Rupees |
Rupees |
Rupees |
|
|
| Balance
as at July 1, 1998 |
|
100,000,000 |
6,118,284 |
-- |
4,439,634 |
110,557,918 |
|
|
|
|
| Profit
after taxation |
|
-- |
-- |
-- |
|
2,624,783 |
|
| Transfer
to special reserve |
|
-- |
524,957 |
-- |
|
-- |
|
|
| Transfer
to deferred taxation reserve |
-- |
-- |
2,871,387 |
|
-- |
|
|
|
|
|
| Balance
as at June 30, 1999 |
|
100,000,000 |
6,643,241 |
2,871,387 |
3,668,073 |
113,182,701 |
|
| Profit
after taxation |
|
-- |
-- |
-- |
7,652,925 |
7,652,925 |
|
| Transfer
to special reserve |
|
-- |
1,530,585 |
-- |
(1,530,585) |
-- |
|
| Transfer
to deferred taxation reserve |
-- |
-- |
1,039,565 |
(1,039,565) |
-- |
|
| Proposed
dividend |
|
-- |
-- |
-- |
(7,500,000) |
(7,500,000) |
|
| Balance
as at June 30, 2000 |
|
100,000,000 |
8,173,826 |
3,910,952 |
1,250,848 |
113,335,626 |
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
| Mohammed Elias |
Asif Siddiqi |
|
| Chairman / Director |
Chief Executive |
|
|
| 10 |
|
|
| N ~T~ |
|
|
| CASH
FLOW STATEMENT |
|
| FORTHEYEAR
ENDED JUNE 30, 2000 |
|
|
|
Note |
2 0 0 0 |
|
1 9 9 9 |
|
|
Rupees |
|
Rupees |
|
| CASH
FLOW FROM OPERATING ACTIVITIES |
|
| Cash generated from operations |
29 |
44,366,767 |
|
22,416,340 |
|
| Income
tax paid |
(7,094,348) |
|
(3,184,818)1 |
|
| Interest/mark-up
paid |
(30,003,003) |
|
(17,852,727 )J |
|
| Interest/mark-up
received |
5,291,164 |
|
2,182,453 |
|
| Long
term deposits |
|
92,000 |
(224,015)~ |
|
|
(31,714,187) |
|
(19,079,107) |
|
| Net
cash generated from operating .activities |
12,652,580 |
|
3,337,233 |
|
| CASH
FLOW FROM INVESTING ACTIVITIES |
|
|
|
Purchase of fixed assets |
(1,040,958) |
|
(1,691,931) |
|
|
Sale proceed of fixed assets |
170,000 |
|
219,280 |
|
|
Gain on sale of shares |
782,570 |
|
-- |
|
|
Purchase of certificate
of investments |
-- |
(6,685,000 |
|
|
Net investment in leases - net of
repayments |
(97,648,537 |
|
(70,734,659 |
|
|
Net cash used in investing
activities |
(97,736,925 |
|
(78,892,310 |
|
| CASH
FLOW FROM FINANCING ACTIVITIES |
|
|
| Long
term loans and finances obtained |
45,649,869 |
103,162,862 |
|
| Long
term loans and finances repaid |
(26,360,730 |
(19,281,990 |
|
| Short
term loans and finances obtained |
75,000,000 |
|
-- |
|
| Mushadka
arrangement obtained |
10,000,000 |
5,000,000 |
|
| Musharika
arrangement repaid |
(3,333,334 |
(1,666,666 |
|
| Morabaha
arrangement obtained |
10,000,000 |
|
-- |
|
| Short
term advance (given)/repaid |
(2,014,000 |
3,451,000 |
|
| Obligations
under finance lease obtained |
-- |
(96,228) |
|
| Obligations
under finance lease repaid |
(347,608 |
(240,406) |
|
| Long
term deposits obtained |
11,303,571 |
9,358,843 |
|
| Dividend
paid |
|
(5,095 |
(23,312) |
|
| Deferred
costs |
|
-- |
(10,237,495 ) |
|
| Net
cash generated from financing activities |
119,892,673 |
89,426,608 |
|
| Net
increase in cash and cash equivalents |
34,808,328 |
13,871,531 |
|
| Cash
and cash equivalent as at the |
|
|
beginning of the year |
29,040,794 |
15,169,263 |
|
| Cash
and cash equivalent as at the end of the year |
63,849,122 |
29,040,794 |
|
| Cash
and cash equivalent comprise of |
|
|
|
Cash and bank balances |
11 |
86,181,852 |
29,040,794 |
|
|
Short term running finances |
20 |
(22,332,730) |
|
-- |
|
|
|
63,849,122 |
29,040,794 |
|
|
The annexed notes form an
integral part of these accounts. |
|
|
| Mohammed Elias |
Asif Siddiqi |
|
| Chairman / Director |
Chief Executive |
|
|
| 11 |
|
|
| NETWORK |
|
|
| NOTES
TO THE ACCOUNTS |
|
| FOR
THE YEAR ENDED JUNE 30, 2000 |
|
|
| 1.
THE COMPANY AND ITS OPERATIONS |
|
|
| The
company was incorporated in Pakistan on August 19, 1993. Commercial operation
effectively |
|
| began
in January 1995. The company is listed on the Karachi, Lahore and Islamabad
Stock |
|
| Exchanges
and is principally engaged in lease financing of assets. |
|
|
| 2.
SIGNIFICANT ACCOUNTING POLICIES |
|
|
| 2.1
Accounting convention |
|
|
|
These accounts have been
prepared under the historical cost convention. |
|
|
| 2.2
Revenue recognition |
|
|
|
Lease income |
|
|
| The
company follows the financing method in accounting for recognition of lease
income. |
|
| Under
this method the unearned lease income, that is the excess of aggregate lease |
|
| rental
and estimated residual value over the cost of leased asset, is taken to
income over |
|
| the
term of the lease. A portion of unearned lease income approximating the costs
incurred |
|
| in
writing the lease is taken to "income from leasing" at the time of
execution of the lease. |
|
| The
remainder of unearned lease income is taken to income over the term of the
lease, so |
|
| as
to produce a systematic return on net investment in leases. |
|
|
|
Income pertaining to the
periods falling between rentals due and the year end is recognized |
|
|
on an accrual basis. |
|
|
|
Other income |
|
|
| Return
on bank deposits, PLS accounts, savings accounts, musharika arrangements, |
|
| certificates
of investment and government securities is recognized on an accrual basis. |
|
|
| 2.3 Taxation |
|
|
|
Current |
|
|
|
Income for the purpose of
computing current taxation is determined under the provisions |
|
|
of income tax law whereby
lease income received or receivable is deemed to be income. |
|
|
Provision for taxation is
thus based on income determined in accordance with the |
|
|
requirements of the
income tax law. |
|
|
|
Deferred |
|
|
|
The tax effect for
deferred taxation as calculated using the liability method on all major |
|
|
temporary differences and
is being dealt with as stated in note 13.2 to the accounts. |
|
|
| 2.40 |
Fixed assets and
depreciation |
|
|
Owned |
|
| The
fixed assets are stated at cost less accumulated depreciation. Depreciation
is charged |
|
| to
income applying the straight line method, whereby the cost of an asset is
written-off |
|
|
| NET~ |
|
|
|
over its useful life at
the rates specified in note 3 to the accounts. Major renewals during the |
|
|
year are capitalized. |
|
|
|
Leased |
|
|
|
Fixed assets acquired
through finance lease are included as tangible fixed assets. The |
|
|
outstanding obligations
under lease, less finance charges allocated to future periods are |
|
|
shown as a liability. The
financial charge is calculated at the mark-up rate implicit in the |
|
|
lease. Depreciation is
charged at the rates used for owned assets. |
|
|
| 2.50 |
Deferred costs |
|
|
|
Costs relating to company
formation and share flotation are amortized over a period of five |
|
|
years from the date of
their incurrence. Arrangement fees for lease are amortized over the |
|
|
term of the respective
leases. |
|
|
| 2.60 |
Provision for potential
lease losses |
|
|
|
The provision for
potential lease losses is maintained at a level which, in the judgement of |
|
|
the management, is
adequate to provide for potential losses on the lease porfolio that can |
|
|
reasonably be
anticipated. |
|
|
| 2.70 |
Staff retirement benefits |
|
|
|
The company operates a
contributory provident fund for all its confirmed employees. |
|
|
Contributions are made by
the company and the employees in accordance with the rules |
|
|
of the fund. |
|
|
| 2.80 |
Short term investments |
|
|
These are stated at lower
of cost and market value. |
|
| 2.90 |
Foreign currency
translations |
|
|
| Transactions
in foreign currencies are accounted for in Rupees at the rate of exchange |
|
| prevailing
on the date of the transaction. Monetary assets and liabilities in foreign
currencies |
|
| are
translated into Rupees at the rates of exchange which approximate those
prevailing at |
|
| the
balance sheet date except for those that are covered under an exchange risk
coverage |
|
| scheme
which are translated at the contracted rate. Exchange gains and losses are |
|
| included
in income currently. |
|
|
| 2.10
Off-setting of financial assets and financial liabilities |
|
|
| A
financial asset and a financial liability is offset and the net amount is
reported in the |
|
| balance
sheet if the company has a legally enforceable right to set-off the
transaction and |
|
| also
intends either to settle on a net basis or to realize the asset and settle
the liability |
|
| simultaneously.
Income and expenses arising from such assets and liabilities are also |
|
| accordingly
offset. |
|
|
| $ E'-'~-O R K |
|
|
| 3. |
TANGIBLE FIXED ASSETS |
|
|
| C |
O |
|
T |
DEPRECIATION |
|
|
Written |
|
| Description |
|
Adjustments |
|
down value |
|
|
As at Additions/ |
As at |
Charge on transfer/ As at
June |
|
as at |
|
| July1,1999
(Disposals)Adjustments |
|
July1,1999 fortheyear (disposals) |
Rate |
|
302,000 |
June30,2000 |
|
|
Rupees |
Rupees |
Rupees |
Rupees |
% |
Rupees |
Rupees |
Rupees |
Rupees |
Rupees |
|
| Owned |
|
|
9,388,585 |
|
-- |
-- |
9,388,585 |
708,325 |
|
234,715 |
943,040 |
8,445,545 |
|
|
1,027,257 |
|
-- |
-- |
1,027,257 |
381,881 |
|
102,726 |
484,607 |
542,650 |
|
|
524,000 |
|
-- |
-- |
-- |
82,967 |
|
8,733 |
-- |
-- |
|
|
(for lease and resale) |
(524,000) |
|
(91,700) |
|
|
3,429,169 |
|
421,825 |
-- |
3,850,994 |
976,395 |
|
361,821 |
|
2,512,778 |
|
|
|
1,978,814 |
224,110 |
-- |
21,981,004 |
|
992,234 |
|
-- |
|
1,409,252 |
788,752 |
|
(4,920) |
|
(3,526) |
|
|
|
815,885 |
91,715 |
-- |
901,100 |
|
305,545 |
|
-- |
|
393,695 |
507,405 |
|
(6,500) |
|
(720) |
|
|
|
Motor vehicles |
3,794,296 |
303,308 |
728,228 |
4,770,432 |
20 |
2,323,218 |
778,944 |
402,636 |
3,465,095 |
1,305,337 |
|
(55,400) |
|
(39,703) |
|
|
20,958,006 |
1,040,958 |
728.23 |
22,136,372 |
|
5,770,565 |
1,996,353 |
402,636 |
8,033,905 |
14,102,467 |
|
(590,820) |
|
(135,649) |
|
| Leased |
|
|
|
Motor vehicles |
728,228 |
-- |
(728,228) |
-- |
20 |
256,992 |
145,644 |
(402,636) |
-- |
-- |
|
728,228 |
-- |
(728,228) |
-- |
|
256,992 |
145,644 |
(402,636) |
-- |
-- |
|
|
21,686,234 |
1,040,958 |
-- |
22,136,372 |
|
6,027,557 |
|
2,141,997 |
402,636 |
8,033,905 |
14,102,467 |
|
(590,820) |
|
(538,285) |
|
|
| ! 9 9 9 |
20,240,158 |
1,788,159 |
-- |
21,686,234 |
|
4,136,599 |
|
2,035,934 |
93,234 |
6,027,557 |
15,658,677 |
|
(342,083) |
|
(238,210) |
|
|
| 3.1
The followin9 owned assets were disposed off during the year: |
|
|
|
Accumulated |
Net book |
Sale |
Gain/(loss) |
Mode of |
Particulars |
|
| D e s c r i p t i o n |
Cost |
depreciation |
value |
proceed |
on disposal |
disposal |
of the buyer |
|
|
|
Rupees |
Rupees |
Rupees |
Rupees |
Rupees |
|
|
| PLANT
& MACHINERY |
|
| (for lease and resale) |
524,000 |
91,700 |
432,300 |
120,000 |
(312,300) Negotiation |
Fateh Mohammad, |
|
|
Lahori Gate, |
|
|
Lahor~ |
|
|
|
COMPUTER EQUIPMENT |
|
| Monitor |
|
4,920 |
3,526 |
1,394 |
500 |
(894) Negotiation |
Realtech System
Solutions, |
|
|
Sasi Acrade, Clifton, |
|
|
Karachi. |
|
|
| O
F FI E.C._~._~U I P M E NT |
|
| Mobile
Phone |
6,500 |
720 |
5,780 |
1,500 |
(4,280) Negotiation |
R.'E Electronic, |
|
|
Shop No.23, Feroz Market, |
|
|
Abduliah Haroon Road, |
|
|
Karachi. |
|
|
| MOTOR
VEHICLES. |
|
| HondaCD-70 |
|
55,400 |
39,703 |
15,697 |
48,000 |
32,303 |
Insurance Eastern
FederalUnion |
|
|
claim Insurance Limited, Karachi. |
|
|
|
590,820 |
135,649 |
455,171 |
170,000 |
{285,171 ) |
|
| 1 9 9 9 |
342,083 |
144,976 |
197,107 |
219,280 |
|
22,173 |
|
|
| 14 |
|
|
| N E T~K |
|
|
| 4.
INVESTMENT IN LEASES |
|
|
|
Gross investment in lease
together with the present value of the minimum lease payments |
|
|
receivable are as
follows: |
|
| 2000 |
1999 |
|
|
|
Investment |
|
Investment |
Present |
|
|
in Lease |
|
in Lease |
Value |
|
|
Rupees |
|
Rupees |
Rupees |
|
| Within one year |
188,696,293 |
|
148,446,875 |
109,003,217 |
|
| After one year but not more than five years |
258,724,837 |
|
178,164,312 |
149,963,697 |
|
|
| Minimum
lease payments receivable |
447,421,130 |
356,615,451 |
326,611,187 |
258,966,914 |
|
| Unearned
finance income |
(90,805,679) |
-- |
(67,644,273) |
-- |
|
| Present
value of minimum lease |
|
|
payments receivable |
356,615,451 |
356,615,451 |
258,966,914 |
258,966,914 |
|
| Current
portion shown under current assets |
(136,610,961) |
(136,610,961) |
(109,003,217) |
(109,003,217) |
|
|
220,004,490 |
220,004,490 |
149,963,697 |
149,963,697 |
|
|
| The
leases made by the company are subject to a term of 3 - 5 years and a
security deposit |
|
| is
obtained generally upto 10% at the time of disbursement. The company insures
the leased |
|
| assets
in its favour and requires lessees to maintain certain financial ratios.
Additional lease |
|
| rentals
are chargeable on delayed payments. The rate of return implicit in the lease
ranges |
|
| from
18% to 24% (1999: 19% to 25.5%). |
|
|
| Note |
2 0 0 0 |
1 9 9 9 |
|
|
Rupees |
Rupees |
|
|
| 5. PROVISION FOR POTENTIAL LEASE LOSSES |
2,336,964 |
2,330,702 |
|
|
| A
general provision for potential lease losses has been made in accordance with
the accounting |
|
| policies
stated in note 2.6. No specific provision is required. However, to comply
with the Leasing |
|
| Companies
(Establishment and Regulation) Rules 2000, an amount of Rs. 2,336,964 |
|
| (1999:
Rs. 2,101,148) has been allocated towards the provision required by the said
Rules. |
|
|
| 6.
LONG TERM DEPOSITS |
|
|
| Security
deposits |
180,080 |
200,080 |
|
| Lease
key money |
-- |
75,000 |
|
| Other
deposits |
260,425 |
257,425 |
|
|
440,505 |
532,505 |
|
| Current
maturity of lease key money shown under |
|
| current assets |
10 |
-- |
(75,000) |
|
|
440,505 |
457,505 |
|
|
| 15 |
|
|
| NE~'ORK |
|
|
| Note |
2 0 0 0 |
I 9 9 9 |
|
|
Rupees |
Rupees |
|
|
| 7. |
CERTIFICATE OF INVESTMENT |
7.10 |
6,685,000 |
6,685,000 |
|
|
| 7.10 |
This has been obtained
from Bankers Equity Limited (BEL) for a term of 5 years. The |
|
|
certificate has a
maturity value of Rs. 15,509,200 after 5 years. The certificate has |
|
|
been obtained as a
precondition for obtaining a guarantee to secure repayment of a |
|
|
long term loan obtained
from the Asian Development Bank. |
|
|
| 8. |
DEFERRED COSTS |
|
|
|
Company formation and share
floatation expenses |
I 6,324,377 I |
|
6,324,377 |
|
|
Amortization - to date |
(6,324,377) |
(6,294,377 |
|
| 30,000 |
|
|
|
Arrangement fee for leases |
[1,062,947I |
|
1,062,947 |
|
|
Amortization - to date |
(1,062,947) |
(1,004,809 |
|
| 58,138 |
|
|
| Deferred
hedging cost |
[ 10,237,495 I |
|
I 10,237,4951 |
|
| Amortization
- to date |
|
(1,237,638) |
(555,129 )J |
|
| 8,999,857 |
|
9,682,366 |
|
| 8,999,857 |
|
9,770,504 |
|
|
| The
above costs have been carried forward as they confer benefit to future years. |
|
|
| 9.
SHORTTERM INVESTMENTS |
|
|
| Government securities |
9.10 |
700,000 |
700,000 |
|
|
| 9.10 |
These represent Federal
Investment Bonds which have been purchased to comply |
|
|
with Regulation for
Non-Banking Financial Institutions. The rate of return on these |
|
|
bonds is 15% (1999: 15%)
per annum. |
|
|
| 16 |
|
|
| NET~K |
|
|
| Note |
2 0 0 0 |
I 9 9 9 |
|
|
Rupees |
Rupees |
|
|
| 10.
ADVANCES, DEPOSITS, PREPAYMENTS AND |
|
| OTHER
RECEIVABLES |
|
|
| Advances
- considered good |
|
|
|
To Chief Executive |
10.10 |
-- |
-- |
|
|
To Executive Director |
10.20 |
-- |
-- |
|
|
To staff |
|
633,094 |
360,087 |
|
|
Advance against assets to
be leased out |
2,014,000 |
-- |
|
|
Other |
|
1,075,325 |
-- |
|
|
3,722,419 |
360,087 |
|
| Deposits |
|
|
| Current maturity of lease key money |
6[ |
-- |
|
75,000] |
|
| Others |
|
1,250 |
1,250 |
|
|
|
1,250 |
76,250 |
|
| Prepayments |
3,610,895 |
4,263,138 |
|
| Other
receivables |
|
|
| Accrued
income/return on |
|
|
| certificate
of investment |
2,954,295 |
1,184,618 |
|
| short
term investments |
20,137 |
20,137 |
|
| local
currency deposit |
924,055 |
-- |
|
| PLS
accounts |
254,531 |
204,846 |
|
|
4,153,018 |
1,409,601 |
|
| Income
tax - net |
6,426,472 |
1,762,619 |
|
| Reimbursable expenses |
10.30 |
6,776,281 |
8,623,480 |
|
| Receivable
from State Bank of Pakistan |
-- |
2,590,344 |
|
| Others |
|
380,568 |
343,568 |
|
|
17,736,339 |
14,729,612 |
|
|
25,070,903 |
19,429,087 |
|
|
| 10.10 |
The maximum aggregate
amount due from Chief Executive in respect of advance at the |
|
|
end of any month during
the year was Rs.59,592 (1999:Rs.13,099). |
|
|
| 10.2
The maximum aggregate amount due from an Executive Director in respect of
advance |
|
| at the end of any month during the year was
Rs.94,354 (1999: Rs.48,000). |
|
|
| 10.30 |
This represents amounts
recoverable on account of small and micro enterprise training |
|
|
and development costs. |
|
|
| 17 |
|
|
| N~r~ |
|
|
|
Note |
2000 |
1 999 |
|
|
Rupees |
Rupees |
|
| 11.
CASH AND BANK BALANCES |
|
|
| At banks on |
|
|
|
special account with SBP |
11.10 |
50,000 |
50,000 |
|
|
local currency deposit account |
11.20 |
32,000,000 |
474,943 |
|
|
foreign currency saving
account |
6,963,534 |
3,280,534 |
|
|
PLS accounts |
11.30 |
46,507,342 |
24,229,290 |
|
|
current accounts |
437,718 |
912,030 |
|
|
85,958,594 |
28,946,797 |
|
| Cash in hand |
|
223,258 |
93,997 |
|
|
86,181,852 |
29,040,794 |
|
|
| 11.1
These represent non-interest bearing deposit with the State Bank of Pakistan
as required |
|
| under Regulation for Non-Banking Financial
Institutions to maintain liquidity against certain |
|
| liabilities. |
|
|
| 11.20 |
Local currency deposit
account |
|
|
Local currency deposit |
11.2.1 |
32,000,000 |
32,000,000 |
|
|
Credit facility availed |
20.10 |
-- |
(31,525,057) |
|
|
32,000,000 |
474,943 |
|
|
| 11.2.1
This representsTerm Deposits with a commercial bank for a term of 5 years |
|
| and carries a profit at the rate of Re
0.472 per thousand per day |
|
| (1999: Re 0.472 per thousand per day). The
deposits are kept as security |
|
| against a running finance facility. In the
prior year, the deposit was offset in |
|
| accordance with the company policy
described in note 2.10. |
|
|
| 11.30 |
Included in the above is
an amount of Rs. 44,353,957 which was at the |
|
|
balance sheet date held
in a bank account in the name of the chief |
|
|
executive for logistical
reasons. Subsequently, the entire amount |
|
|
including mark-up thereon
has been transferred into the company's |
|
|
name. |
|
|
| 12.
ISSUED, SUBSCRIBED AND PAID-UP CAPITAL |
|
|
| 10,000,000
ordinary shares of Rs. 10 each fully |
|
| paid-up
in cash |
|
100,000,000 |
100,000,000 |
|
|
| Under
the terms of the loan agreement, the Swiss Agency for Development and
Corporation |
|
| (SDC)
has an option to convert at any time during the period of five years from the
date of |
|
| full
disbursement of the loan an aggregate amount of upto Rs.10,000,000 of the
principal |
|
| amount
of the loan into fully paid-up shares of the company ranking pari passu in
all respects |
|
| with
the shares already issued by the company at the time of the exercise of the
option. In |
|
| terms
of the investment, the shares are to be issued to the agency, at the break-up
value |
|
| per
share of the company at the time when the option for conversion is exercised
by the |
|
| agency
(see note t4.4). |
|
|
| 18 |
|
|
|
Note |
2 0 0 0 |
I 9 9 9 |
|
|
Rupees |
Rupees |
|
| 13.
RESERVES |
|
|
| Capital
reserve |
|
|
Special reserve |
13.10 |
8,173,826 |
6,643,241 |
|
|
Deferred tax reserve |
13.20 |
3,910,952 |
2,871,387 |
|
|
| 12,084,778 9,514,628 |
|
| Revenue
reserve |
|
|
| Unappropriated profit |
1,250,848 |
3,668,073 |
|
|
13,335,626 |
13,182,701 |
|
|
| 13.1
The special reserve represents profit set aside as required under the
relevant provision |
|
| of the Leasing Companies (Establishment and
Regulation) Rules, 2000. |
|
|
| 13.20 |
Deferred taxation arising
due to timing differences computed under the liability method |
|
|
is estimated at Rs.7.063
million (1999:Rs.7.075 million) of which Rs.0.012 million debit |
|
|
(1999:Rs.1.821 million
credit) is in respect of the current year. The company has |
|
|
appropriated Rs.1.039
million in the current financial year (being one fifth of the opening |
|
|
balance of deferred tax
liability less debit of Rs.0.012 million for the current year) to |
|
|
achieve compliance with
circular 16 of 1997, issued by Securities and Exchange |
|
|
Commission of Pakistan.
Deferred tax liability amounting to Rs.3.152 million, therefore |
|
|
remains to be
appropriated over the next three years. |
|
|
| 14.
LONG TERM LOANS AND FINANCES - secured |
|
| Foreign
currency |
|
|
From the Asian Development Bank |
14.10 |
50,206,159 |
44,556,290 |
|
| Local
currency |
|
|
From The World Bank |
14.20 |
70,364,380 |
70,364,380 |
|
|
From a development agency
and a |
|
|
financial institution |
|
|
Swiss Agency for
Development and |
|
|
Co-operation (SDC) |
14~3 |
2,812,500 |
8,437,500 |
|
|
Swiss Agency for
Development and |
|
|
Co~operation (SDC) |
14.40 |
28,938,400 |
36,173,000 |
|
|
Financial institution (A)
-loan 1 |
-- |
2,751,131 |
|
|
Financial institution (A) -loan 2 |
14.50 |
18,750,000 |
-- |
|
|
50,500,900 |
47,361,631 |
|
|
From banking companies |
|
|
Bank (A)- loan 1 |
-- |
1,166,666 |
|
|
Bank (B) - loan 1 |
14.60 |
416,663 |
2,083,331 |
|
|
Bank (B)- loan 2 |
14.70 |
4,166,669 |
7,500,001 |
|
|
Bank (B)- loan 3 |
14.80 |
16,666,667 |
-- |
|
|
21,249,999 |
10,749,998 |
|
|
142,115,279 |
128,476,009 |
|
|
192,321,438 |
173,032,299 |
|
| Current
maturity shown under current liabilites 16 |
(27,693,690) |
(21,777,399) |
|
|
164,627,748 |
151,254,900 |
|
|
| 19 |
|
|
| 14.1
The Asian Development Bank has extended a loan under the Financial Sector |
|
| Intermediation Loan No. 1371 programme on a
tripartite arrangement with the |
|
| Government of Pakistan and participating
financial institutions. The mark-up on the loan |
|
| is on a variable Own Capital Resources rate
for dollars [presently 6.24% (1999: 6.38%)]. |
|
| Bankers Equity Limited (BEL) is paid a
guarantee commission at the rate of 1.8% per |
|
| annum. The loan is secured by a charge over
the company's assets. The loan is repayable |
|
| in fifteen years with a grace period of
three years in twenty-four equal semi-annual |
|
| installments. This loan is registered with
the State Bank of Pakistan and the liability of |
|
| this loan has been fixed in Pakistani
Rupees under the exchange risk cover scheme of |
|
| the State Bank of Pakistan. The exchange
risk cover fee is 8% per annum. |
|
|
| 14.2
The World Bank has extended eight tranches of the microenterprise loan. The
first seven |
|
| tranches were received through Bankers
Equity Limited (BEL) which is the guarantor. The |
|
| mark-up on the above loan is 14% per annum.
BEL is paid a guarantee commission at the |
|
| rate of 2% per annum. The loan is repayable
in ten years from the date of each draw down (in |
|
| fourteen equal half yearly installments)
with a grace period for principal of three years. The |
|
| loan is secured by a charge over the
company's assets. |
|
|
| 14.3
This has been obtained from the Swiss Agency for Development and Co-operation
under a |
|
| sale and repurchase agreement for financing
leases to small and micro entrepreneurs with |
|
| a sale price of Rs.22,500,000 and a
purchase price of Rs.30,178,125. The loan is secured |
|
| by a hypothecation charge on the company's
specific leased assets and related receivables. |
|
| The facility is repayable in eight equal
semi-annual installments which commenced from |
|
| March 15, 1997. |
|
|
| 14.4
This has been obtained from the Swiss Agency for Development and Co-operation
under a |
|
| sale and repurchase agreement for financing
leases to small and micro entrepreneurs with |
|
| a sale price of Rs. 36,173,000 and a
purchase price of Rs. 51,546,525. The loan is secured |
|
| by a hypothecation charge on the company's
specific leased assets and related receivables. |
|
| The facility is repayable in five equal
annual installments which commenced from |
|
| January 1, 2000. The development agency has
the option to convert part of its loan into |
|
| equity as explained in note 12. |
|
|
| 14.5
This has been obtained from a financial institution under a sale and
repurchase agreement |
|
| for financing leasing operations of the
company with a sale price of Rs.20,000,000 and a |
|
| purchase price of Rs.28,516,672. The loan
is secured by a floating charge on the company's |
|
| specific leased assets and related
receivables. The facility is repayable in eight semi-annual |
|
| installments which commenced from June 30,
2000. |
|
|
| 14.6
This has been obtained from a commercial bank under a sale and repurchase
agreement for |
|
| financing leasing operations of the company
with a sale price of Rs.5,000,000 and a purchase |
|
| price of Rs.6,798,058. The loan is secured
by a registered hypothecation charge on the |
|
| company's specific leased assets and
related receivables. The facility is also secured by a |
|
| demand promissory note and is repayable in
twelve equal quarterly installments which |
|
| commenced from October 31, 1997. |
|
|
| 14.7
This has been obtained from a commercial bank on a sale and repurchase
agreement for |
|
| financing leasing operations of the company
with a sale price of Rs. 10,000,000 and a purchase |
|
| price of Rs.13,364,908. The loan is secured
by a registered hypothecation charge on the |
|
| company's specific leased assets and
related receivables. The facility is also secured by a |
|
| demand promissory note and is repayable in
twelve equal quarterly installments which |
|
| commenced from November 30, 1998. |
|
|
| 20 |
|
|
| NET~ |
|
|
| 14.8
This has been obtained from a commercial bank under a sale and repurchase
agreement |
|
| for financing leasing operations of the
company with a sale price of Rs.20,000,000 and a |
|
| purchase price of Rs.26,071,872. The loan
is secured by a registered hypothecation charge |
|
| on the company's specific leased assets and
related receivables. The facility is also secured |
|
| by a demand promissory note and is
repayable in six equal semi annual installments which |
|
| commenced from February 29, 2000. |
|
|
|
Note |
2 0 00 |
1 9 9 9 |
|
|
Rupees |
Rupees |
|
| 15.
LONG TERM DEPOSITS - secured |
|
|
| Lease
key money |
38,244,588 |
|
| Current
maturity shown under current liabilities 16 |
(7,908,774) |
|
|
30,335,814 |
|
|
| These
represent non-interest bearing security deposits received against lease
contracts and are |
|
| repayable/adjustable
at the expiry/termination of the respective leases. |
|
|
| 16.
CURRENT MATURITY OF LONG TERM LIABILITIES |
|
|
| Current
maturity of |
|
|
| long term loans and finances |
14 |
27,693,690 |
21,777,399 |
|
| obligations
under finance lease |
-- |
347,608 |
|
| long term deposits |
15 |
10,463,694 |
7,908,774 |
|
|
38,157,384 |
30,033,781 |
|
|
| 17.
SHORT TERM LOANS AND FINANCES |
|
|
| From
financial institutions - clean |
|
|
| Financial instituion (A) -loan 1 |
17.10 |
15,000,000 |
-- |
|
| Financial instituion (A) -loan 2 |
17.20 |
5,000,000 |
-- |
|
| Financial instituion (A) -loan 3 |
17.30 |
15,000,000 |
-- |
|
| Financial instituion (A) - loan 4 |
17.40 |
10,000,000 |
-- |
|
| Financial instituion (A) - loan 5 |
17.50 |
5,000,000 |
-- |
|
| Financial instituion (B) - loan 1 |
17.60 |
10,000,000 |
-- |
|
| Financial instituion (B) - loan 2 |
17.70 |
5,000,000 |
-- |
|
|
65,000,000 |
-- |
|
| From
financial institution - secured |
|
|
| Financial institution - (A) loan 1 |
17.80 |
10,000,000 |
-- |
|
|
75,000,000 |
-- |
|
| 17.1
This has been obtained from a financial institution for financing leasing
operations of the |
|
| company with a sale price of Rs.15,000,000
and a purchase price of Rs.17,336,610.The |
|
| facility is repayable in lump sum on
February 3, 2001. |
|
|
| 17.2
This has been obtained from a financial institution for financing leasing
operations of the |
|
| company with a sale price of Rs.5,000,000
and a purchase price of Rs.5,787,500. The |
|
| facility is repayable in lump sum on March
9, 2001. |
|
|
| 17.3
This has been obtained from a financial institution for financing leasing
operations of the |
|
| company with a sale price of Rs.15,000,000
and a purchase price of Rs.17,249,897.The |
|
| facility is repayable in lump sum on April
5, 2001. |
|
|
| 21 |
|
|
| NE~ORK |
|
|
| 17.4
This has been obtained from a financial institution for financing leasing
operations of the |
|
| company with a sale price of Rs.10,000,000
and a purchase price of Rs.11,495,754. The |
|
| facility is repayable in lump sum on April
5, 2001. |
|
|
| 17.5
This has been obtained from a financial institution for financing leasing
operations of the |
|
| company with a sale price of Rs.5,000,000
and a purchase price of Rs.5,394,521. The |
|
| facility is repayable in lump sum on
December 23, 2000. |
|
|
| 17.6
This has been obtained from a financial institution for financing leasing
operations of the |
|
| company with a sale price of Rs. 10,000,000
and a purchase price of Rs. 10,390,685. The |
|
| facility is repayable in lump sum on
September 21,2000. |
|
|
| 17.7
This has been obtained from a financial institution for financing leasing
operations of the |
|
| company with a sale price of Rs.5,000,000
and a purchase price of Rs.5,195,342. The |
|
| facility is repayable in lump sum on
September 26, 2000. |
|
|
| 17.8
This has been obtained from a financial institution for financing leasing
operations of the |
|
| company with a sale price of Rs.10,000,000
and a purchase price of Rs.11,805,000. The |
|
| facility is secured by a registered
hypothecation charge on the company's specific leased |
|
| assets. The loan is also secured by a
demand promissory note. The loan is repayable in |
|
| lump sum on October 31,2000. |
|
|
|
Note |
2 0 0 0 |
I 9 9 9 |
|
|
Rupees |
Rupees |
|
| 18.
MUSHARIKA ARRANGEMENTS |
|
|
| Financial institutions - unsecured |
18.10 |
10,000,000 |
-- |
|
| Others |
|
|
-- |
3,333,334 |
|
|
| 10,000,000 |
3,333,334 |
|
|
| 18.1
This has been obtained from a financial institution for financing leasing
operations of the |
|
| co. mpany under Musharika Arrangement with
a sale price of Rs. 10,000,000 and a purchase |
|
| price of Rs.11,825,000. The mushadka is
repayable in lump sum on January 10, 2001. |
|
|
| 19.
MORABAHA ARRANGEMENTS |
|
|
| From
financial institutions |
|
|
| Morabaha
arrangement 1 |
19.1 5,000,000 |
-- |
|
| Morabaha arrangement 2 |
19.20 |
5,000,000 |
_ |
|
|
|
10,000,000 |
__ |
|
|
| 19.1
This has been obtained from a financial institution for financing leasing
operations of the |
|
| company under Morabaha Arrangement with a
sale price of Rs.5,000,000 and a purchase |
|
| price of Rs.5,877,398. The morabaha is
secured by registered hypothecation charge on |
|
| the company's specific lease rental
receivables. The morabaha is also secured by a demand |
|
| promissory note and is repayable in lump
sum on January 3, 2001. |
|
|
| 19.2
This has been obtained from a financial institution for financing leasing
operations of the |
|
| company under Morabaha Arrangement with a
sale price of Rs.5,000,000 and a purchase |
|
| price of Rs.5,877,398. The morabaha is
secured by registered hypothecation charge on |
|
| the company's specific lease rental
receivables. The morabaha is also secured by a demand |
|
| promissory note and is repayable in lump
sum on May 30, 2001. |
|
|
| 22 |
|
|
| NE~-ORK |
|
|
|
Note |
2 0 0 0 |
I 9 9 9 |
|
|
Rupees |
Rupees |
|
| 20.
SHORT TERM RUNNING FINANCES |
|
|
| From
banking companies |
|
| Bank (A) |
|
18,353,054 |
-- |
|
| Bank (B) |
|
3,979,676 |
-- |
|
| Bank (c) |
|
-- |
-- |
|
|
| 22,332,730 -- |
|
|
| 20.1
A facility has been obtained from a commercial bank for short term working
capital |
|
| requirements of the company. The aggregate
facility of Rs. 30,400,000 |
|
| (1999: Rs. 35,000,000 - refer to note 11.2)
carries mark-up at the rate of Re. 0.486 per |
|
| thousand per day (1999: Re 0.486 per
thousand per day - refer to note 11.2) is repayable |
|
| quarterly and is secured by a demand
promissory note and lien onTerm Deposit Account. |
|
| The facility expires on February 28, 2002. |
|
|
| 20.2
A facility has been obtained from a commercial bank for short term working
capital |
|
| requirements of the company. The aggregate
facility of Rs. 4,000,000 (1999: Rs. Nil) carries |
|
| a mark-up at the rate of Re. 0.356 per
thousand per day (1999: Rs. Nil), is repayable |
|
| quarterly and is secured by lien on foreign
currency saving account. The facility expires on |
|
| March 31,2001. |
|
|
| 20.3
A facility has been obtained from a commercial bank for short term working
capital |
|
| requirements of the company. The aggregate
facility of Rs, 4,000,000 (1999: Rs. 8,500,000) |
|
| carries a mark-up at the rate of Re. 0.4109
per thousand per day (1999 Re 0.5068 per |
|
| thousand per day). The facility is secured
by a registered first hypothecation charge on the |
|
| company's specific leased assets and
related receivables and a demand promissory note. |
|
| The facility expires on April 30, 2001. |
|
|
| 21.
CREDITORS, ACCRUED AND OTHER LIABILITIES |
|
|
| Creditors |
|
727,801 |
148,336 |
|
| Mark-up
accrued on secured finances |
|
|
long term loans and
finances |
9,141,300 |
6,057,303 |
|
|
short term loans and
finances |
317,845 |
167 |
|
|
mushadka arrangement |
-- |
162,501 |
|
|
morabaha arrangement |
297,261 |
-- |
|
|
short term running finance |
21.10 |
81,720 |
547,829 |
|
|
| 9,838,126 6,767,800 |
|
| Mark-up
accrued on un-secured finances |
|
|
| shorttermloansandfinances |
2,088,116] |
[ |
|
| musharika
arrangement |
405,000 |
|
-- |
|
|
|
2,493,116 |
|
-- |
|
| Payable to NLCL Employees Provident fund |
70,110 |
|
45,304 |
|
| Lease rentals received in advance |
2,019,387 |
|
2,163,120 |
|
| Withholding tax payable |
331,014 |
|
269,832 |
|
| Other liabilities |
777,004 |
|
673,202 |
|
|
16,256,558 |
|
10,067,594 |
|
|
| 21.10 |
The prior year figure is
stated net of accrued mark-up on Iooal currency deposit account |
|
|
amounting to Rs. 924,055
in accordance with the company's policy stated in note 2.10 - |
|
|
refer to note 11.2. |
|
|
| 23 |
|
|
| NETWORK |
|
|
| 22.
CONTINGENCIES AND COMMITMENTS |
|
|
Contingencies |
|
| In
finalising the company's assessment for the assessment year 1997-98, the
Deputy |
|
| Commissioner
of Income tax has treated Lease Key Money as deemed income and disallowed |
|
| certain
expenses resulting in additional tax liability of Rs. 1,684,972. The company
has filed an |
|
| appeal
before the Commissioner of IncomeTax in respect of above. No provision has
been made |
|
| for
the same in these accounts as the company is confident of a favourable
outcome. |
|
|
Note |
2 0 0 0 |
I 9 9 9 |
|
|
Rupees |
Rupees |
|
|
Commitments |
|
|
For lease financing |
7,672,500 |
947,835 |
|
| 23.
OTHER INCOME |
|
|
Return on certificate of
investment |
1,769,677 |
1,184,618 |
|
|
Return on PLS accounts |
616,636 |
710,418 |
|
|
Return on local currency deposit
account |
23.10 |
5,454,904 |
1,106,113 |
|
|
Return on foreign
currency saving accounts |
88,364 |
186,813 |
|
|
Return on short term
investments |
105,000 |
105,000 |
|
|
Return on musharika
arrangements |
-- |
3,592 |
|
|
Net (Ioss)/gain on
disposal of fixed assets |
(285,171) |
22,173 |
|
|
Net exchange gain/(Ioss) |
98,070 |
(1,325,845) |
|
|
Gain on sale of shares |
782,570 |
-- |
|
|
8,630,050 |
1,992,882 |
|
|
| 23.1
The prior year figure is stated net of financial charges on running finance
amounting to |
|
| Rs. 888,165 in accordance with the
company's policy stated in note 2.10 - refer to note 11.2. |
|
|
| 24.
ADMINISTRATIVE AND OPERATING EXPENSES |
|
|
|
Salaries and benefits |
24.10 |
8,480,258 |
5,862,686 |
|
|
Staff welfare and
training |
190,120 |
202 496 |
|
|
Depreciation |
|
2,141,997 |
2,035 934 |
|
|
Rent, rates and taxes |
434,571 |
270 273 |
|
|
Travelling and conveyance |
463,492 |
132 854 |
|
|
Vehicle running and
maintenance |
1,387,171 |
681 506 |
|
|
Utilities |
|
1,060,703 |
794 840 |
|
|
Entertainment |
49,399 |
48 005 |
|
|
Fee and subscriptions |
369,229 |
433 506 |
|
|
Printing and stationery |
490,238 |
343 640 |
|
|
Postage and courier |
119,239 |
86 282 |
|
|
Legal and professional
charges |
226,071 |
237 638 |
|
|
Auditors' remuneration |
24.20 |
251,659 |
231 980 |
|
|
Office repairs and
maintenance |
578,304 |
424 121 |
|
|
Advertisement and promotional expenses |
62,185 |
51,125 |
|
|
I nsu rance |
|
86,701 |
103,573 |
|
|
Other expenses |
34,803 |
29,695 |
|
|
24.30 |
16,426,140 |
11,970,154 |
|
|
| 24.1
Salaries and benefits include Rs. 304,863 (1 999: Rs. 265,848) in respect of
staff |
|
| retirement benefits. |
|
|
24.2 Auditors'
remuneration |
|
|
Audit fee |
85,000 |
85,000 |
|
|
Special audit fee |
-- |
65,000 |
|
|
Tax consultancy fee |
120,000 |
60,000 |
|
|
Other services |
23,000 |
10,000 |
|
|
Out of pocket expenses |
23,659 |
11,980 |
|
|
251,659 |
231,980 |
|
|
| 24.3
These are stated net of Rs.1,684,449 (1999: Rs.4,994,570) recoverable on
account of |
|
| small and micro enterprise training and
development costs. |
|
|
| 24 |
|
|
| NE~ORK |
|
|
|
Note |
2 0 0 0 |
I 9 9 9 |
|
|
Rupees |
Rupees |
|
| 25.
FINANCIAL CHARGES |
|
|
| Mark-up
on secured finances |
|
|
long term loans and finances |
28,343,906 |
19,992,174 |
|
|
short term loans and finances |
1,203,334 |
|
-- |
|
|
musharika arrangement |
-- |
|
487,501 |
|
|
morabaha arrangement |
704,993 |
|
-- |
|
|
short term running finances |
1,179,050 |
|
105,206 |
|
|
|
31,431,283 |
20,584,881 |
|
| Mark-up
on unsecured finances |
|
| shorttermloansandfinances |
[ |
-- |
|
| musharika
arrangement |
1,165,411 |
341,250 |
|
|
4,102,743 |
341,250 |
|
| Mark-up
on finance lease |
32,419 |
82,490 |
|
| Bank
charges and commission |
158,275 |
172,344 |
|
|
35,724,720 |
21,180,965 |
|
|
| 26.
PROVISION AND WRITE OFFS ON LEASE PORTFOLIO |
|
| Provision
for potential lease losses |
6,262 |
448,379 |
|
| Write
offs against lease receivables |
1,069,942 |
397,610 |
|
|
1,076,204 |
845,989 |
|
|
| 27.
TAXATION |
|
|
| Assessments
for all years upto and including assessment year 1996-97 have been finalised
by |
|
| the
Income-tax department. The asessment for the assessment year 1997-98 is
pending and |
|
| under
appeal with the Appellate Tribunal of Income Tax - refer to note 22.
Assessment for the |
|
| assessment
years 1998-99 and 1999-2000 have not been finalised. |
|
|
| 28.
EARNINGS PER SHARE |
|
|
| Earnings
per share are calculated by dividing the profit after taxation for the year
by the weighted |
|
| average
number of shares outstanding during the year as follows: |
|
|
| Basic
earnings per share |
|
|
| Profit
for the year after taxation |
7,652,925 |
2,624,783 |
|
| Weighted
average number of |
|
| shares
outstanding during the year |
10,000,000 |
10,000,000 |
|
|
|
O.77 |
0.26 |
|
| Diluted
earnings per share |
|
|
Profit for the year after taxation |
7,652,925 |
2,624,783 |
|
|
Adjusted weighted average
number of |
|
|
shares outstanding during
the year |
|
|
applicable to diluted earnings per
share 10,882,613 |
10,883,527 |
|
|
|
0.70 |
0.24 |
|
|
|
Adjusted weighted average
number of shares 882,613 shares (1999:883,527 shares) |
|
|
which are potentially
convertible into ordinary shares if the option mentioned in note 12 is |
|
|
exercised. |
|
|
| 25 |
|
|
| NE~-ORK |
|
|
|
Note |
2 0 0 0 |
I 9 9 9 |
|
|
Rupees |
Rupees |
|
| 29.
CASH GENERATED FROM OPERATIONS |
|
|
| Profit
for the year before taxation |
8,170,354 |
10,083,420 |
|
| Adjustment
for: |
|
|
|
Depreciation on fixed
assets |
2,035,934 |
|
|
Amortization on deferred
costs |
1,837,360 |
|
|
Provision for potential
lease losses |
448,379 |
|
|
Net Ioss/(gain) on
disposal of fixed assets |
(22,173 |
|
|
Gain on sale of shares |
-- |
|
|
Interest/mark-up income |
(3,296,554 |
|
|
Interest/mark-up expense |
21,008,621 |
|
|
22,011,567 |
|
| Operating
profit before working capital changes |
30,181,921 |
|
| Decrease/(Increase)
in current assets |
|
|
|
Advances, deposits,
prepayments |
|
|
and other receivables |
3,704,454 |
(8,269,200)1 |
|
| Increase
in current liabilities |
|
|
|
Creditors, accrued and
other liabilities |
625,522 |
503,619 ] |
|
| Working
capital changes |
|
4,329,976 |
(7,765,581) |
|
|
44,366,767 |
22,416,340 |
|
|
| 30.
REMUNERATION OFTHE CHIEF EXECUTIVE, EXECUTIVE DIRECTORS AND |
|
| OTHER
EXECUTIVES |
|
|
| The
aggregate amount of expenditure included in the accounts for the year in
respect of |
|
| remuneration,
including benefits to the Chief Executive, Executive Directors and other
Executives |
|
| of
the company are as follows: |
|
| 2000 1999 |
|
|
| Chief
Executive |
Other |
|
Chief |
Executive |
Other |
|
| Executive
Directors |
Executives |
Total |
Executive |
Directors |
Executives Total |
|
| Rupees |
Rupees |
Rupees |
Rupees |
Rupees |
Rupees |
Rupees Rupees |
|
|
| Managerial remuneration |
648,000 |
1,440,000 |
984,000 |
3,072,000 |
648,000 |
1,440,000 |
792,000 |
2,880,000 |
|
| Allowances |
312,000 |
720,000 |
492,000 |
1,524,000 |
312,000 |
720,000 |
396,000 |
1,428,000 |
|
| Countributory
provident fund |
98,388 |
98,388 |
5,400 |
12,000 |
79,200 |
96,600 |
|
|
960,000 |
2,160,000 |
1,574,388 |
4,694,388 |
965,400 |
2,172,000 |
1,267,200 |
4,404,600 |
|
| Number of persons |
1 |
3 |
4 |
8 |
1 |
3 |
4 |
8 |
|
|
| The
Chief Executive, Executive Directors and other Executives are also entitled
to use company |
|
| maintained
cars and perquisties in accordance with the terms of their employment. All
executives |
|
| are
covered for medical and life insurance. Fee of Rs. Nil (1999: Rs. 1500) was
paid to a Director |
|
| for
attending board meetings. |
|
|
| 30.10 |
Number of employees |
|
|
The total number of
employees at the year-end were 56 (1999:51 ). |
|
|
| 26 |
|
|
| NETWORK |
|
|
| 31.
RATE OF RETURN RISK |
|
|
| Rate
of return risk (RR) arises from the possibility that changes in RR will
affect the value of |
|
| financial
instruments. A company is exposed to RR as a result of mismatches or gaps in
the |
|
| amounts
of assets and liabilities and off-balance sheet instruments that mature or
reprice over |
|
| a
given period. The risk is managed by matching the repricing of assets and
liabilities. |
|
|
| The
company's RR sensitivity position at June 30, 2000, based on the earlier of
contractual |
|
| repricing
or maturity date, is as follows: |
|
|
|
Not exposed |
|
| Exposed to RR |
to RR |
|
|
|
More than 1 |
|
|
2000 Effeclfve |
Less than year and less
More than |
|
|
I year |
than 5 years |
|
5 years |
Total |
RR |
|
|
Rupees |
Rupees |
|
Rupees |
Rupees |
% |
|
| ASSETS |
|
|
| Fixed assets |
|
_ |
-- |
-- |
14,102,467 |
14,102,467 |
-- |
|
| Net
investment in leases (net of |
|
| provision for doubtful debts) |
122,054,117 |
|
179,725,805 |
-- |
52,498,565 |
354,278,487 |
22.45 |
|
| Certificate
of investment |
-- |
6,685,000 |
-- |
-- |
6,685,000 |
18.56 |
|
| Long
term deposits and deferred cost |
-- |
-- |
-- |
9,440,362 |
9,440,362 |
-- |
|
|
-- |
-- |
|
700,000 |
15.00 |
|
| Short term investments |
700,000 |
|
-- |
|
| Income accrued or due |
_ |
-- |
|
-- |
4,153,018 |
4,153,018 |
-- |
|
| Advances,
deposits, prepayments |
|
|
-- |
20,917,885 |
20,917,885 |
-- |
|
| and other receivables |
-- |
-- |
|
| Cash and bank balances |
85,470,876 |
|
-- |
-- |
710,976 |
86,181,852 |
10.42 |
|
| Total assets |
208,224,993 |
186,410,805 |
|
-- |
101,823,273 |
496,459,071 |
|
| EQUITY
AND LIABILITIES |
|
|
|
-- |
-- |
113,335,626 |
113,335,626 |
-- |
|
| Capital and reserves |
-- |
|
| Long term loans and finances |
27,693,960 |
|
99,179,272 |
65,448,206 |
-- |
192,321,438 |
16.95 |
|
| Long term deposits |
_ |
|
-- |
-- |
49,548,159 |
49,548,159 |
-- |
|
| Short term loans and finances |
75,000,000 |
|
-- |
-- |
-- |
75,000,000 |
15.87 |
|
| Musharika arrangements |
10,000,000 |
|
-- |
-- |
-- |
10,000,000 |
18.25 |
|
| Morabaha arrangements |
10,000,000 |
|
-- |
-- |
-- |
10,000,000 |
17.50 |
|
| Short term running finances |
22,332,730 |
|
-- |
-- |
-- |
22,332,730 |
16.70 |
|
| Accrued and other liabilities |
_ |
|
-- |
-- |
16,421,118 |
16,421,118 |
-- |
|
| Proposed dividend |
-- |
|
-- |
-- |
7,500,000 |
7,500,000 |
-- |
|
|
| Total equity and liabilities |
145,026,690 |
99,179,272 |
65,448,206 |
186,804,903 |
496,459,071 |
|
| RR sensitivity gap |
63,198,303 |
87,231,533 |
(65,448,206) |
(84,981,630) |
-- |
|
| Cumulative RR sensitivity gap |
63,198,303 |
150,429,836 |
84,981,630 |
-- |
-- |
|
|
| The
total RR sensitivity gap represents the net amount of on-balance sheet items. |
|
|
| 27 |
|
|
| NE'rWORK |
|
|
| The
company's RR sensitivity position at June 30, 1999, based on the earlier of
contractual |
|
| repricing
or maturity date, is as follows: |
|
|
Not exposed |
|
|
to RR |
Exposed to RR |
|
|
More than 1 |
|
|
1999 Effective |
|
|
I year |
than 5 years |
5 years |
|
Total |
|
RR |
|
|
Rupees |
Rupees |
Rupees |
|
Rupees |
Rupees |
|
% |
|
| ASSETS |
|
|
| Fixed assets |
|
- |
|
|
- |
- |
15,658,677 |
15,658,677 |
- |
|
| Net
investment in lease (net of |
|
| provision
for doubtful debts) |
99,609,237 |
114,373,280 |
|
- |
42,653,695 |
256,636,212 |
24.06 |
|
| Certificateof
investment |
- |
|
6,685,000 |
- |
- |
6,685,000 |
18.56 |
|
| Long
term deposits and deferred cost |
- |
|
- |
- |
10,228,009 |
10,228,009 |
- |
|
| Short
term investments |
700,000 |
|
- |
- |
- |
700,000 |
15.00 |
|
| Income
accrued or due |
- |
|
|
- |
- |
1,409,601 |
1,409,601 |
- |
|
| Advances,
deposits, prepaymerits |
|
| and
other receivables |
- |
|
- |
- |
18,019,486 |
18,019,486 |
- |
|
| Cash
and bank balances |
27,984,767 |
|
- |
- |
1,056,027 |
29,040,794 |
4.63 |
|
| Total assets |
128,294,004 |
|
121,058,280 |
|
- |
89,025,495 |
338,377,779 |
|
|
| EQUITY
AND LIABILITIES |
|
|
| Capitaland reserves |
~ |
- |
|
- |
113,182,701 |
113,182,701 |
- |
|
| Long term loans and finances |
21,777,397 |
76,043,609 |
|
75,211,293 |
- |
173,032,299 |
16.78 |
|
| Obligations under finance lease |
347,608 |
- |
|
- |
- |
347,608 |
21.00 |
|
| Long term deposits |
- |
- |
|
- |
38,244,588 |
38,244,588 |
- |
|
| Musharika arrangement |
3,333,334 |
- |
|
- |
- |
3,333,334 |
19.50 |
|
| Accrued and other liabilities |
- |
- |
|
- |
10,237,249 |
10,237,249 |
- |
|
| Total Equity and liabilities |
25,458,339 |
76,043,609 |
|
75,211,293 |
161,664,538 |
338,377,779 |
|
| RR sensitivity gap |
102,835,665 |
45,014,671 |
|
(75,211,293) |
(72,639,043) |
- |
|
| Cumulative RR sensitivity gap |
102,835,665 |
147,850,336 |
|
72,639,043 |
- |
- |
|
|
| The
total RR sensitivity gap represents the net amount of on-balance sheet items. |
|
|
| 32.
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 |
|
| counterparties
and continually assessing the creditworthiness of counterparties. |
|
|
| The
company seeks to manage its credit risk exposure through diversification of
lending |
|
| activities
to avoid undue concentrations of risks with individuals or groups of
customers |
|
| in
specific locations or businesses. It also obtains security when appropriate. |
|
|
| Concentrations
of credit risk arise when a number of counterparties are engaged in |
|
| similar
business activities or have similar economic features that would cause their |
|
| ability
to meet contractual obligations to be similarly affected by changes in
economic, |
|
| political
or other conditions. Concentrations of credit risk indicate the relative
sensitivity |
|
| of
the company's performance to developments affecting a particular industry. |
|
|
| 28 |
|
|
| NETWORK |
|
|
| Detail
of industry sector analysis of lease portfolio (net of provision). |
|
|
| 2000 1999 |
|
| Rupees |
% |
Rupees |
% |
|
|
|
Individuals 82,909,630 |
23.40 |
75,308,013 |
29.34 |
|
| Textile |
69,523,055 |
19.62 |
55,271,239 |
21.54 |
|
| Steel / engineering and automobile |
46,920,139 |
13.24 |
30,089,960 |
11.72 |
|
| Hotels |
28,695,379 |
8.10 |
-- |
-- |
|
| Chemicals, fertilizer and pharma |
25,665,850 |
7.24 |
20,268,614 |
7.90 |
|
| Food, tobacco and beverages |
24,493,956 |
6.92 |
17,464,896 |
6.82 |
|
| Health care |
22,708,350 |
6.41 |
17,588,453 |
6.85 |
|
| Paper and board |
20,892,557 |
5.90 |
14,087,821 |
5.49 |
|
| Electrical and electronic goods |
16,766,246 |
4.73 |
1,410,454 |
0.55 |
|
| Financial institutions |
5,296,838 |
1.50 |
7,902,450 |
3.08 |
|
| Sugar and allied |
3,185,854 |
0.90 |
3,980,680 |
1.55 |
|
| Transport and communication |
2,046,156 |
0.58 |
1,353,315 |
0.53 |
|
| Construction |
1,616,347 |
0.46 |
1,548,143 |
0.60 |
|
| Energy, oil and gas |
1,398,866 |
0.39 |
2,880,894 |
1.12 |
|
| Banaspati and allied industries |
914,033 |
0.26 |
433,793 |
0.17 |
|
| Dairy and poultry |
748,560 |
0.21 |
505,291 |
0.20 |
|
| Leather, footwear and tanneries |
457,121 |
0.13 |
360,938 |
0.14 |
|
| Glass ceramics |
39,550 |
0.01 |
61,778 |
0.02 |
|
| Cement |
-- |
-- |
6,119,480 |
2.38 |
|
|
|
354,278,487 |
100.00 |
256,636,212 |
100.00 |
|
| 33.
NET FOREIGN CURRENCY EXPOSURE |
|
| For
foreign currency borrowings, appropriate forward exchange cover has been
obtained from |
|
| State
Bank of Paksitan to hedge against foreign exchange fluctuation risks. The
company is not |
|
| materially
exposed to foreign currency risk on other foreign currency assets and
liabilities. |
|
|
| 34.
FAIR VALUE OF FINANCIAL INSTRUMENTS |
|
|
| The
fair value is the amount of which an asset could be exchanged, or a liability
settled, between |
|
| knowledgeable,
willing parties in an arm's lenght transaction. Consequently differences can
arise |
|
| between
book values and the fair value estimates. Underlying definition of fair value
is the |
|
| presumption
that the company is a going concern without any intention or requirement to
curtail |
|
| materially
the scale of its operation or to undertake a transaction on adverse terms. |
|
|
| The
carrying value of all the financial instruments reflected in the financial
statements approximates |
|
| their
fair values. |
|
|
| 35.
GENERAL |
|
|
| 35.1
Corresponding figures of the previous year have been rearranged wherever
necessary |
|
| for the purpose of comparison. |
|
|
| 35.2
Figures have been rounded off to the nearest Rupee. |
|
|
| Mohammed Elias |
Asif Siddiqi |
|
| Chairman / Director |
Chief Executive |
|
|
| 29 |
|
|
| NET~ |
|
|
| PATTERN
OF SHAREHOLDING AS AT JUNE 30, 2000 |
|
|
| Number |
|
Share |
|
Total |
|
| of |
|
Holding |
|
Shares |
|
| Share Holders |
From |
|
To |
Held |
|
|
| 92 |
1 |
-- |
100 |
9,200 |
|
| 1705 |
101 |
-- |
500 |
850,800 |
|
| 56 |
501 |
-- |
1000 |
54800 |
|
| 72 |
1001 |
-- |
5000 |
194,700 |
|
| 19 |
5001 |
-- |
10000 |
169,900 |
|
| 3 |
10001 |
-- |
15000 |
41.00 |
|
| 1 |
15001 |
-- |
20000 |
20.00 |
|
| 1 |
25001 |
-- |
30000 |
27000 |
|
| 1 |
35001 |
-- |
40000 |
35500 |
|
| 1 |
40001 |
-- |
45000 |
42.50 |
|
| 5 |
45001 |
-- |
50000 |
247.60 |
|
| 1 |
50001 |
-- |
55000 |
50500 |
|
| 1 |
55001 |
-- |
60000 |
60.00 |
|
| 1 |
65001 |
-- |
70000 |
66700 |
|
| 1 |
70001 |
-- |
75000 |
74.80 |
|
| 1 |
75001 |
-- |
80000 |
78.80 |
|
| 1 |
80001 |
-- |
85000 |
84.60 |
|
| 1 |
95001 |
-- |
100000 |
100.00 |
|
| 1 |
105001 |
-- |
110000 |
107.20 |
|
| 1 |
110001 |
-- |
115000 |
114.20 |
|
| 1 |
130001 |
-- |
135000 |
133.00 |
|
| 1 |
135001 |
-- |
140000 |
139.50 |
|
| 2 |
150001 |
-- |
155000 |
306.10 |
|
| 1 |
155001 |
-- |
160000 |
157.00 |
|
| 1 |
190001 |
-- |
195000 |
194.60 |
|
| 4 |
195001 |
-- |
200000 |
782,700 |
|
| 1 |
200001 |
-- |
205000 |
201,000 |
|
| 1 |
210001 |
-- |
215000 |
211,500 |
|
| 1 |
235001 |
-- |
240000 |
240,000 |
|
| 1 |
255001 |
-- |
260000 |
255,100 |
|
| 1 |
470001 |
-- |
475000 |
474,700 |
|
| 1 |
495001 |
-- |
500000 |
500,000 |
|
| 1 |
535001 |
-- |
540000 |
539,500 |
|
| I |
540001 |
-- |
545000 |
542,500 |
|
| 1 |
845001 |
-- |
850000 |
850,000 |
|
| 1 |
995001 |
-- |
1000000 |
1,000,000 |
|
| 1 |
1040001 |
-- |
1045000 |
1,042,500 |
|
|
| 1986 |
|
10,000,000 |
|
|
|
Number |
Total |
|
|
Catagories |
of |
Shares |
|
| S. No. |
of Shareholders |
Share Holders |
Held |
Percentage |
|
| 1 |
Individuals |
|
1958 |
5,005,300 |
50.05 |
|
| 2 |
Investment Companies |
4 |
645,700 |
6.46 |
|
| 3 |
Insurance Companies |
2 |
4,500 |
0.05 |
|
| 4 |
Joint Stock Companies |
13 |
32,000 |
0.32 |
|
| 5 |
Financial Institutions |
8 |
3,462,500 |
34.62 |
|
| 6. |
Foreign bank |
|
1 |
850,000 |
8.50 |
|
|
| 1986 |
|
10,000,000 |
100.00 |
|
|
| 30 |
|
|
| N E |
|
|
| COMPANY
INFORMATION |
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| Registered
and Head Office |
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301 - 302 Gul Tower, |
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I. I. Chundrigar Road, |
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Karachi~74000, |
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Pakistan. |
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| Telephone |
: 242-4655, 242-4616,
242-4639 |
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| Telefax |
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(92-21) 242-5366,
244-3547 |
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| e-mail |
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micleas @ attglobal.net |
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| WorldWideWeb |
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http://members.xoom/microleasing |
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| Lahore Office |
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67-A/2, Gulberg III,
Lahore. |
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| Telephone |
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(042) 575-0429 |
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| Telefax |
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(042) 571-1919 |
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| Peshawar Office |
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Suite No.6, 2nd Floor,
Fawad Plaza, |
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University Road,
Peshawar. |
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| Telephone |
: (091) 45571 |
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| Telefax |
: (091) 45571 |
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| Bankers
& Lenders |
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| Swiss
Development Cooperation |
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| The
World Bank |
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| The
Asian Development Bank |
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| Muslim
Commercial Bank |
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| ABN-AMRO
Bank |
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| ANZ
Grindlays Bank |
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| Oman
International Bank |
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| Auditors |
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| Ford
Rhodes Robson Morrow |
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| Chartered
Accountants |
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| Legal
Advisors |
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| K.
Salahuddin |
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| Advocates |
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| High
Court & Supreme Court |
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| 31 |
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| NET~ |
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| NOTICE
OFTHE ANNUAL GENERAL MEETING |
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| Notice
is hereby given that the Seventh Annual General Meeting of Network Leasing
Corporation |
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| Limited
will be held at Beach Luxury Hotel, MoulviTamizuddin Khan Road, Karachi, on
Monday |
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| December
18, 2000 at 12 noon to transact the following business: |
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| 1. |
To confirm the minutes of
the Extra Ordinary General Meeting held on 25 July 2000. |
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| 2. |
To receive, consider and
adopt the Audited Accounts of the Company for the year ended |
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30 June 2000 together
with the Directors' and Auditors' Reports thereon. |
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| 3. |
To appoint auditors and
fix their remuneration. The present auditors, Ford Rhodes Robson |
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Morrow, Chartered
Accountants, retire and being eligible, offer themselves for |
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re-appointment. |
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| 4. |
To approve the payment of
cash dividend of 7.5 % for the year ended 30 June 2000. |
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| 5. |
To transact any other
business with the permission of the Chairman. |
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By Order of the Board |
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M. Nadeem Ahmed |
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| Karachi: November 20, 2000 |
Company Secretary |
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| a) |
The Share Transfer Books
of the Company will remain closed from December 10, 2000 |
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to December 18, 2000
(both days inclusive). The Share Department of the company is |
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located at 404,
TradeTower, Abdullah Haroon Road, Karachi. (Phone No. 568-7839 and |
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568-5930). |
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| b) |
A member entitled to
attend and vote at the meeting may appoint another member as |
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his/her proxy to attend
and vote on his/her behalf. Proxies, in order to be effective, must |
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be received at the
Registered Office of the company located at 301-302, Gul Tower, I.I. |
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Chundrigar Road, Karachi,
(Phone No. 242-4655 and 242-4616) duly stamped, signed |
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and witnessed, not later
than 48 hours before the meeting. |
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| c) |
Members are requested to
notify any changes in their addresses immediately. |
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| d) |
Account holders and
sub-account holders holding book entry securities of the Company |
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in Central Depository
Company of Pakistan Limited, who wish to attend the Annual |
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General Meeting, are
requested to bring original National Identity Card for identification |
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purpose. |
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| 32 |
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