| First Leasing Corporation Limited |
|
|
|
|
|
|
|
|
|
| Annual
Report 2000 |
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|
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| CONTENTS |
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| Company Information |
|
|
| Notice of Meeting |
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|
| Directors' Report |
|
|
| Auditors' Report |
|
|
| Balance
Sheet |
|
|
|
| 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 Accounts |
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|
| Pattern of Shareholding |
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|
| Categories
of Shareholders |
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| COMPANY
INFORMATION |
|
|
| BOARD
OF DIRECTORS |
|
| Mr.
Khurshid Hadi |
|
Chairman / Chief
Executive |
|
| Mr.
Arshad Nawab |
|
Director |
|
| Mr.
Shoaib Qureshi |
|
Director |
|
| Mr.
Zaigham Mehmood Rizvi |
|
(Nominee - Pak Libya
Holding Company (Pvt) Ltd.) |
|
| Mr.
Ramadan A. Haggiagi |
|
(Nominee - Pak Libya
Holding Company (Pvt) Ltd.) |
|
| Mr.
S. Zubair Ahmed |
|
(Nominee - National
Investment Trust) |
|
| Mr.
K. M. M. Shah |
|
(Nominee - National
Investment Trust) |
|
|
| COMPANY
SECRETARY |
|
| Mrs.
Hina Usmani |
|
|
| REGISTERED
AND HEAD OFFICE |
|
| 5th
Floor, Block C, Finance & Trade Centre, |
|
| Shahrah-e-Faisal,
Karachi-74400 |
|
| Tel:
5661843 Fax: 5685329 |
|
|
| BRANCH
OFFICES |
|
| 5th
Floor, Davis Hytes, Davis Road, Lahore |
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| Ground
Floor, State Life Building, Peshawar |
|
|
| AUDITORS: |
|
| Ford,
Rhodes, Robson, Morrow |
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| Chartered
Accountants |
|
|
| LEGAL
ADVISORS |
|
| Orr
Dignam & Co. Advocates |
|
| Ahmer
Bilal Soofi Advocate |
|
|
| REGISTRAR
AND SHARE TRANSFER OFFICE |
|
| THK
Associates (Pvt) Limited, |
|
| Ground
Floor, Shaikh Sultan Trust Building No. 2 |
|
| Beaumont
Road, Karachi. |
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| Tel:
5688808, 5685805 |
|
|
| BANKERS |
|
| Albaraka
Islamic Bank |
|
| Emirates
Bank International |
|
| Habib
Bank Limited |
|
| Muslim
Commercial Bank Limited |
|
| National
Bank Limited |
|
| Standard
Chartered Grindlays Bank Limited |
|
| The
Bank of Khyber |
|
|
|
| NOTICE
OF MEETING |
|
|
| Notice
is hereby given that the Eight Annual General Meeting of First Leasing
Corporation Limited will be held |
|
| at
FTC Conference Room, Finance & Trade Centre, Shahrah-e-Faisal, Karachi on
Wednesday 20th December, 2000 |
|
| at
4.00 p.m to transact the following business: |
|
|
| Ordinary
Business |
|
|
| 1.
To confirm the minutes of the Seventh Annual General Meeting held on 22na
December, 1999~ |
|
|
| 2.
To receive, consider and adopt the audited accounts together with the
Directors' and Auditors' Report |
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| thereon
for the year ended June 30, 2000. |
|
|
| 3.
To appoint Auditors for the year 2000-2001. The present Auditors, Messrs,
Ford, Rhodes, Robson, Morrow, |
|
| Chartered
Accountants retire and being eligible have offered themselves for
reappointment. |
|
|
| 4.
Any other business with the permission of the Chair. |
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|
|
By Order of the Board |
|
|
|
Hina Usmani |
|
|
Company Secretary |
|
|
| Notes: |
|
| 1.
The share transfer books of the company will remain closed from December 13,
2000 to December 20, 2000 |
|
| (both
days inclusive) and no transfer of share will be made during the period the
register is closed. |
|
|
| 2.
A member entitled to attend, speak and vote at the meeting is entitled to
appoint a proxy to attend, speak |
|
| and
vote for him/her. |
|
|
| 3.
An instrument of proxy and the power of attorney or other authority (if any)
under which it is signed |
|
| or
a notarially certified copy of such power of authority, in order to be valid,
must be deposited at the |
|
| registered
office of the company not less than 48 hours before the time of the meeting. |
|
|
| 4.
Members are requested to notify any change in their address immediately. |
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|
|
| DIRECTORS'
REPORT |
|
|
| BUSINESS
ENVIRONMENT |
|
| For
the past several years we have anxiously awaited rational and consistent
policies aimed at the promotion |
|
| of
sustainable economic activity. The intent of the current economic managers is
unambiguous and policies aimed |
|
| at
reduction in fiscal imbalances and at price and monetary stability are
relentless and consistent. Despite optimism |
|
| though,
tangible evidence of the impact of structural reforms is still till elusive.
Nevertheless there is no denying |
|
| the
impact of this government's unyielding efforts at reform at the enterprise
level. It is a matter of enormous |
|
| relief
that all organizations and agencies involved with the financial sector - the
State Bank, SECP, CBR, BOI |
|
| and
the banks are all pulling in the same direction. They are open to all
reasonable debate and are a support |
|
| to
the private sector financial institutions. |
|
|
| Nevertheless
for the financial institutions the problems of the past years
persist-sourcing of long-term fund |
|
| at
economic pricing, non-performing assets and persistent increase in overdue
installments. Many of these problems |
|
| would
become automatically manageable with the revival of industrial and commercial
activity - but this, a |
|
| prospect
not clearly in evidence. Amidst these difficult business conditions, the
leasing sector has been unable |
|
| to
develop its potential and despite commendable organization and managerial
skills continues to be vulnerable |
|
| to
fluctuating business trends that are beyond its control. The management of
your company has constantly |
|
| strived
to meet these challenges and adjust business strategy accordingly as the
business environment changes. |
|
|
| OPERATING
RESULTS |
|
| The
operating results for the year ended 30th June 2000 demonstrate an
improvement in operating performance |
|
| and
an increase of 173% over the previous year. Financial costs comprise 86%
lease income an increase of 4% |
|
| was
the previous year whereas overheads have been kept maintained at the same
level as last year; a further |
|
| rationalization
during the current year will result in further cost control. |
|
|
| These
accounts have incorporated full provisions required under prevalent
prudential regulations and further- |
|
| more
the Board has determined that full provision against the diminution in value
of long-term investment is |
|
| to
made at this time. Your company had made a strategic investment in the
privatization of Bankers Equity |
|
| Limited,
which despite an undertaking to buy-back our investment at our purchase
price, the buyer has been |
|
| unable
to fulfill. As there appears to be a permanent impairment we have provided
for the diminution in asset |
|
| value.
This has resulted in a loss for the first time. However we have approached
the Securities and Exchange |
|
| Commission
of Pakistan to approve the write-back of the special reserve created from
profits over the past seven |
|
| years
as a set-off against the carried forward loss. As such the company will be
able to post a profit for the current |
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| year,
which would be available for distribution. |
|
|
| The
comparative results for the year 2000 and 1999 are as follows: |
|
|
|
2000 |
1999 |
|
|
(Rupees in million) |
|
|
|
| Income
from finance lease operations |
|
144.62 |
160.78 |
|
| Profit
from operating leases |
|
9.55 |
6.61 |
|
| Corporate
finance & treasury operations |
|
15.29 |
11.62 |
|
| Capital gains |
|
20.75 |
3.79 |
|
|
----------- |
----------- |
|
|
190.21 |
182.80 |
|
| Operating cost |
|
172.95 |
176.49 |
|
|
----------- |
----------- |
|
| Operating
profit before provision for long-term investment |
|
17.26 |
6.31 |
|
| Provision
for diminution in value of long-term quoted investment |
|
(45.02) |
(0.45) |
|
|
----------- |
----------- |
|
|
(27.76) |
5.86 |
|
| Provision
for taxation |
|
0.65 |
(1.96) |
|
|
----------- |
----------- |
|
|
(27.11) |
3.90 |
|
| Unappropriated
profit brought forward |
|
6.06 |
2.94 |
|
|
----------- |
----------- |
|
|
(21.05) |
6.84 |
|
|
| APPROPRIATIONS |
|
| Special reserve |
|
-- |
0.78 |
|
|
| Unappropriated
profit carried forward |
|
(21.05) |
6.06 |
|
|
========== |
========== |
|
| The
historical trend in respect of growth and profitability is set out below: |
|
|
|
18 months to |
12 months to |
12 months to |
12 months to |
12 months to |
|
|
30th June |
30th June |
30th June |
30th June |
31st December |
|
|
1996 |
1997 |
1998 |
1999 |
2000 |
|
|
| Net
investment in leases |
|
855.65 |
908.65 |
862.12 |
861.18 |
879.87 |
|
| Income
from finance lease operations |
208.80 |
180.26 |
153.86 |
160.78 |
144.62 |
|
| Operating
profit before provision |
|
| for
long-term investment |
|
45.39 |
46.24 |
31.70 |
6.31 |
17.26 |
|
|
| Operating
profit |
|
45.39 |
46.24 |
31.70 |
5.86 |
27.76 |
|
|
| DIVIDENDS |
|
| In
view of the continuing depressed business environment and in view of the
material write-down of its strategic |
|
| investment
in Bankers Equity Limited, your Board has considered it proper and prudent
not to declare a divi- |
|
| dend
for the year ended 30'h June, 2000. |
|
|
| DIRECTORS |
|
| Mr.
Nasim Beg, nominee of National Investment Trust, resigned on 13th October,
2000 and has been replaced |
|
| by
Mr. S. Zubair Ahmed. We are grateful to Mr. Beg for his counsel and welcome
Mr. S. Zubair Ahmed to the |
|
| Board. |
|
|
| ACKNOWLEDGMENT |
|
| The
Board of Directors wish to place on record their sincere appreciation of the
devoted services of our staff |
|
| and
to reemphasize our commitment to the development of their professional
careers and to their well-being. |
|
| The
board also acknowledges the support of all our institutional lenders. |
|
|
| For
and on behalf of the Board |
|
|
| Khurshid Hadi |
|
| Chairman/Chief
Executive |
|
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed balance sheet of FIRST LEASING CORPORATION LIMITED
as at |
|
| June
30, 2000 and the related profit and loss account, cash flow statement and
statement of |
|
| changes
in equity together with the notes forming part thereof, for the year then
ended and we state |
|
| that
we have obtained all the information and explanations which, to the best of
our knowledge and |
|
| belief,
were necessary for the purposes of our audit. |
|
|
| It
is the responsibility of the company's management to establish and maintain a
system of internal |
|
| control,
and prepare and present the above said statements in conformity with the
approved |
|
| accounting
standards and the requirements of the Companies Ordinance, 1984. Our responsibility is |
|
| to
express an opinion on these statements based on our audit. |
|
|
| We
conducted our audit in accordance with the auditing standards as applicable
in Pakistan. These |
|
| standards
require that we plan and perform the audit to obtain reasonable assurance
about whether |
|
| the
above said statements 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 loss, its cash flows and changes in equity for the year
then |
|
| ended; and |
|
|
| (d)
in our opinion no Zakat was deductible at source under the Zakat and Ushr |
|
| Ordinance,
1980 (XVIII of 1980). |
|
|
| Karachi - |
|
| November
28, 2000 |
|
Chartered Accountants. |
|
|
|
|
|
|
| BALANCE
SHEET |
|
| AS
AT JUNE 30, 2000 |
|
|
|
|
2000 |
1999 |
|
|
Note |
Rupees |
Rupees |
|
|
| FIXED
ASSETS-Tangible |
|
3 |
101,266,320 |
115,377,300 |
|
| INVESTMENT
IN LEASES |
|
|
|
|
| Instalment
contracts receivable |
|
4 |
939,256,144 |
993,062,668 |
|
| Residual
value of leased assets |
|
|
103,282,052 |
100,650,532 |
|
|
|
----------- |
----------- |
|
| Gross
investment in lease finance |
|
|
1,042,538,196 |
1,093,713,200 |
|
| Less:
Unearned income |
|
|
(162,665,691) |
(232,532,097) |
|
|
|
----------- |
----------- |
|
| Net
investment in leases |
|
|
879,872,505 |
861,181,103 |
|
| Less:
Current portion of net investment in leases |
|
|
(442,250,427) |
(320,796,338) |
|
|
|
----------- |
----------- |
|
|
|
437,622,078 |
540,384,765 |
|
| Less:
Provision for lease losses and doubtful receivables |
5 |
(44,788,257) |
(36,381,575) |
|
|
|
----------- |
----------- |
|
|
|
392,833,821 |
504,003,190 |
|
|
|
|
|
| LONG-TERM
FINANCE, ADVANCES AND RECEIVABLE |
6 |
17,314,775 |
5,660,660 |
|
| LONG-TERM
INVESTMENTS |
|
7 |
37,247,342 |
96,929,094 |
|
| LONG-TERM
DEPOSIT AND DEFERRED COSTS |
8 |
1,536,748 |
1,448,469 |
|
| CURRENT
ASSETS |
|
|
|
| Current
portion of net investment in leases |
|
442,250,427 |
320,796,338 |
|
| Current
maturity of long-term finance, advances and receivables |
9 |
8,758,437 |
10,831,122 |
|
| Short-term
and morabaha finances |
|
10 |
24,127,984 |
58,320,729 |
|
| Advances,
deposits, prepayments and other receivables |
11 |
82,113,415 |
100,072,764 |
|
| Investment
in marketable securities |
|
12 |
25,285,960 |
31,314,456 |
|
| Cash
and bank balances |
|
13 |
13,448,261 |
17,189,891 |
|
|
----------- |
----------- |
|
|
595,984,484 |
538,525,300 |
|
|
----------- |
----------- |
|
|
1,146,183,490 |
1,261,944,013 |
|
| SHARE
CAPITAL AND RESERVES |
|
|
|
| Authorised |
|
|
|
| 50,000,000
ordinary shares of Rs. 10/~ each |
|
500,000,000 |
500,000,000 |
|
|
| Issued,
subscribed and paid-up capital |
|
14 |
272,782,340 |
272,782,340 |
|
| Reserves |
|
15 |
24,573,631 |
51,689,719 |
|
|
----------- |
----------- |
|
| Shareholders'
equity |
|
297,355,971 |
324,472,059 |
|
|
| LONG-TERM
FINANCES UNDER |
|
| MUSHARIKA
ARRANGEMENTS |
|
16 |
19,818,754 |
105,945,655 |
|
| LONG-TERM
FINANCES |
|
17 |
134,850,407 |
149,223,514 |
|
| OBLIGATIONS
UNDER FINANCE LEASE |
|
18 |
2,428,511 |
6,267,061 |
|
| LONG-TERM
DEPOSITS AND LIABILITIES |
|
19 |
74,826,747 |
119,810,508 |
|
| CURRENT
LIABILITIES |
|
| Current
maturity of long-term liabilities |
|
20 |
206,666,617 |
155,004,022 |
|
| Other
current liabilities |
|
21 |
410,236,483 |
401,221,194 |
|
|
----------- |
----------- |
|
|
616,903,100 |
556,225,215 |
|
| COMMITMENTS |
|
22 |
|
|
----------- |
----------- |
|
|
1,146,183,490 |
1,261,944,013 |
|
|
========== |
========== |
|
| The
annexed notes form an integral part of these accounts. The auditors' report
is annexed hereto. |
|
|
|
|
Khurshid Hadi |
|
Zaigham Mehmood Rizvi |
|
|
Chairman / Chief Executive |
|
Director |
|
|
|
|
| PROFIT
AND LOSS ACCOUNT |
|
| FOR
THE YEAR ENDED JUNE 30, 2000 |
|
|
|
|
|
|
2000 |
1999 |
|
|
Note |
Rupees |
Rupees |
|
| Income |
|
| Income
from finance lease operations |
|
23 |
144,621,942 |
160,778,505 |
|
| Profit
from operating leases |
|
24 |
9,551,355 |
6,611,985 |
|
| Corporate
finance and treasury operations |
|
25 |
15,297,199 |
11,622,877 |
|
| Gain
on marketable securities |
|
|
20,745,875 |
3,788,357 |
|
|
|
----------- |
----------- |
|
|
|
190,216,371 |
182,801,724 |
|
| Expenditure |
|
|
|
| Financial
and bank charges |
|
26 |
124,663,860 |
131,396,128 |
|
| Selling
general and administrative expenses |
|
27 |
31,528,891 |
31,452,029 |
|
| Provision
for diminution in value of short-term investments |
|
4,244,383 |
4,706,352 |
|
| Provision
for lease losses and doubtful receivables |
|
12,288,295 |
8,745,484 |
|
| Write
off of net investment in lease finance |
|
226,488 |
188,763 |
|
|
----------- |
----------- |
|
|
172,951,917 |
176,488,756 |
|
|
----------- |
----------- |
|
| Operating
profit before provision for long-term investments |
|
17,264,454 |
6,312,968 |
|
| Provision
for diminution in value of long-term quoted investments |
|
45,026,335 |
450,000 |
|
|
----------- |
----------- |
|
| (Loss)/profit
for the year before taxation |
|
(27,761,881) |
5,862,968 |
|
| PROVISION
FOR TAXATION |
|
| - current |
|
(1,743,203) |
(1,746,878) |
|
| - prior years |
|
2,388,996 |
(219,674) |
|
|
----------- |
----------- |
|
|
645,793 |
(1,966,552) |
|
|
----------- |
----------- |
|
| (Loss)/profit
for the year after taxation |
|
(27,116,088) |
3,896,416 |
|
| Unappropriated
profit brought forward |
|
6,060,896 |
2,943,763 |
|
|
----------- |
----------- |
|
|
(21,055,192) |
6,840,179 |
|
| APPROPRIATIONS: |
|
|
|
| Transfer
to special reserve |
|
-- |
779,283 |
|
|
----------- |
----------- |
|
| Unappropriated
(loss)/profit carried forward |
|
(21,055,192) |
6,060,896 |
|
|
========== |
========== |
|
| Earning
per share |
|
30 |
(0.99) |
0.14 |
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
Khurshid Hadi |
|
Zaigham Mehmood Rizvi |
|
|
Chairman / Chief Executive |
|
Director |
|
|
|
| CASH
FLOW STATEMENT |
|
| FOR
THE YEAR ENDED JUNE 30, 2000 |
|
|
|
2000 |
1999 |
|
|
Rupees |
Rupees |
|
| CASH
FLOWS FROM OPERATING ACTIVITIES |
|
| (Loss)/profit
for the year before taxation |
|
(27,761,881) |
5,862,968 |
|
| Adjustments
for: |
|
| Depreciation
on fixed assets |
|
16,639,085 |
15,213,350 |
|
| Amortization
of deferred costs |
|
602,739 |
859,956 |
|
| Provision
for lease losses and doubtful receivables |
|
12,288,295 |
8,745,484 |
|
| Provision
for diminution in value of investments |
|
| - short-term |
|
4,244,383 |
4,706,352 |
|
| - long-term |
|
45,026,335 |
450,000 |
|
| (Gain)
on sale of marketable securities |
|
(18,593,537) |
(4,038,357) |
|
| (Gain)/loss
on sale of long-term investments |
|
(2,152,338) |
250,000 |
|
| (Profit)
on sale of fixed assets |
|
(1,179,090) |
(585,901) |
|
| Finance/mark-up
expenses |
|
124,056,509 |
130,606,887 |
|
| Investment
income |
|
(11,998,713) |
(10,325,064) |
|
|
------------ |
------------ |
|
|
168,933,668 |
145,882,707 |
|
|
------------ |
------------ |
|
| Operating
profit before working capital changes |
|
141,171,787 |
151,745,675 |
|
|
| (Increase)/Decrease
in current assets |
|
| Short-term
finances and morabaha finances |
|
341,927,451 |
(4,841,703) |
|
| Investment
in marketable securities |
|
22,529,988 |
(8,559,451) |
|
| Advances,
deposits, prepayments and other receivables |
|
25,007,887 |
(42,928,368) |
|
|
------------ |
------------ |
|
|
81,730,620 |
(56,329,522) |
|
| Increase/(Decrease)
in current liabilities |
|
|
|
| Certificates
of Investment |
|
13,215,000 |
(22,010,000) |
|
| Short-term
finances |
|
64,345,392 |
181,306,791 |
|
| Finance
under mark-up arrangements |
|
(52,108,784) |
17,571,707 |
|
| Accrued
and other liabilities |
|
(16,632,571) |
4,456,567 |
|
|
------------ |
------------ |
|
|
8,819,037 |
181,325,065 |
|
| Cash
generated from operations |
|
| Income
taxes paid |
|
(1,810,396) |
(3,066,488) |
|
| Finance/mark-up
paid |
|
(123,612,614) |
(133,235,261) |
|
| Investment
income received |
|
7,406,364 |
14,382,830 |
|
|
------------ |
------------ |
|
|
(118,016,646) |
(121,918,919) |
|
|
------------ |
------------ |
|
| Net
cash generated from operating activities |
|
113,704,798 |
154,822,299 |
|
|
| CASH
FLOWS FROM INVESTING ACTIVITIES |
|
| Long-term
investment |
|
(5,344,583) |
2,250,000 |
|
| Capital
expenditure |
|
(26,921,934) |
(28,361,236) |
|
| Long-term
deposits and deferred costs |
|
(691,018) |
(297,730) |
|
| Net
investment in lease finance (net of repayments) |
|
(18,691,402) |
935,167 |
|
| Advance
against shares |
|
20,000,000 |
(24,999,990) |
|
| Purchases
of long-term investment |
|
-- |
(10) |
|
| Sale
of fixed assets |
|
25,572,918 |
2,958,453 |
|
| Long-term
advances (disbursement) |
|
(8,742,800) |
(1,194,887) |
|
| Long-term
receivable |
|
(8,170,000) |
-- |
|
| Recovery
of long-term advances |
|
3,244,709 |
456,784 |
|
|
------------ |
------------ |
|
| Net
cash (used in) investing activities |
|
(19,744,110) |
(48,253,449) |
|
|
|
|
| CASH
FLOWS FROM FINANCING ACTIVITIES |
|
|
|
| Issue/(repayments)
of Certificates of Investment |
|
(37,872,607) |
(41,355,000) |
|
| Long-term
loans |
|
140,000,000 |
30,000,000 |
|
| Repayment
of long-term loans |
|
(67,476,627) |
(92,178,493) |
|
| Dividend paid |
|
(42,594) |
(27,938,602) |
|
| Long-term
advances and deposits |
|
(1,002,859) |
(22,736,967) |
|
| Musharika
finance |
|
(131,307,631) |
45,484,477 |
|
|
------------ |
------------ |
|
| Net
cash (used in) generated from financing activities |
|
(97,702,318) |
(108,724,585) |
|
|
------------ |
------------ |
|
| Net
(decrease)/increase in cash and bank balances |
|
(3,741,630) |
(2,155,735) |
|
| Cash
and bank balances at the beginning of the year |
|
17,189,891 |
19,345,626 |
|
|
------------ |
------------ |
|
| Cash
and bank balance at the end of the year |
|
13,448,261 |
17,189,891 |
|
|
========== |
========== |
|
|
|
Khurshid Hadi |
|
Zaigham Mehmood Rizvi |
|
|
Chairman / Chief Executive |
|
Director |
|
|
|
|
| STATEMENT
OF CHANGES IN EQUITY |
|
| FOR
THE YEAR ENDED JUNE 30, 2000 |
|
|
|
Issued, |
Revenue
reserves |
Capital
reserves |
|
|
subscribed |
Premium |
|
|
|
and paid-up |
on |
Special |
Unappropriated |
|
|
|
Capital |
shares |
reserve |
profit |
Total |
|
|
| Balance
as at July 1, 1998 |
272,782,340 |
6,274,730 |
38,574,810 |
2,943,763 |
320,575,643 |
|
| Net
profit for the year |
-- |
-- |
-- |
3,896,416 |
3,896,416 |
|
| Transferred
during the year |
-- |
-- |
779,283 |
(779,283) |
-- |
|
|
------------ |
------------ |
------------ |
------------ |
------------ |
|
| Balance
as at June 30, 1999 |
272,782,340 |
6,274,730 |
39,354,093 |
6,060,896 |
324,472,059 |
|
| Net
(loss) for the year |
-- |
-- |
-- |
(27,116,088) |
(27,116,088) |
|
|
------------ |
------------ |
------------ |
------------ |
------------ |
|
| Balance
as at June 30, 2000 |
272,782,340 |
6,274,730 |
39,354,093 |
(21,055,192) |
297,355,971 |
|
|
------------ |
------------ |
------------ |
------------ |
------------ |
|
|
|
Khurshid Hadi |
|
Zaigham Mehmood Rizvi |
|
|
Chairman / Chief Executive |
|
Director |
|
|
|
|
| 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 31, 1991. The company is
listed on the Karachi and |
|
| Lahore
Stock Exchanges and is principally engaged in leasing of assets and providing
corporate finance |
|
| services. |
|
|
| 2.
SIGNIFICANT ACCOUNTING POLICIES |
|
| 2.1
Accounting convention |
|
| These
accounts have been prepared under the historical cost convention. |
|
|
| 2.2
Revenue recognition |
|
| Lease income |
|
| Finance lease |
|
| The
company follows the financing method in accounting for recognition of lease
income. To more |
|
| accurately
match income and expenditure, a portion of unearned lease income
approximating the |
|
| costs
incurred in writing the lease, including a general provision for potential
lease losses, 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 period |
|
| end
is recognized on an accrual basis. |
|
|
| Operating
Lease |
|
| Rental
income is recognized on an accrual basis over the lease period. |
|
|
| Corporate
finance and treasury operations |
|
| Commitment
fee and other commissions are taken to income when realized. Return on term
deposits |
|
| and
fees for corporate finance services are recognized on an accrual basis. |
|
|
| 2.3
Provision for potential lease losses and doubtful receivables |
|
| Provision
for lease losses and doubtful receivables is maintained at a level which is
adequate to |
|
| provide
for any foreseen and unforeseen doubtful receivables. |
|
|
| 2.4
Tangible fixed assets and depreciation |
|
| Owned |
|
| These
are stated at cost less accumulated depreciation. Depreciation is charged to
income applying |
|
| the
straight line method, whereby the cost of an asset is written off over its
estimated useful life. |
|
| In
respect of additions to owned assets during the year, depreciation is charged
for the full year, |
|
| however,
no depreciation is charged in the year of disposal. Leased out assets
repossessed are accounted |
|
| for
at lower of original cost, fair value or present carrying amount.
Depreciation is charged on assets |
|
| acquired
for operating leases from the date of acquisition on a straight line basis.
Maintenance and |
|
| normal
repairs are charged to income as and when incurred. Major renewals and
improvements are |
|
| capitalised.
Profit/loss on disposal of fixed assets is included in the profit and loss
account of current |
|
| year. |
|
|
| Leased |
|
| Assets
acquired through lease finance are included as tangible fixed assets. The
outstanding lease |
|
| obligations
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 over the useful |
|
| life
of the assets or lease term whichever is shorter. However, if there is
reasonable certainty that |
|
| the
ownership of the assets would transfer to the company at the end of the lease
term, the asset |
|
| is
depreciated over its useful life. |
|
|
| 2.5
Deferred costs. |
|
| Deferred
costs are amortized over a period of five years commencing from the year such
cost are |
|
| incurred. |
|
|
| 2.6
Investments |
|
| Long-term
investments |
|
| These
are stated at cost. Provision is made for any diminution in value, if
considered permanent. |
|
|
| Short-term
investments |
|
| These
are stated at lower of cost or market value on a portfolio basis. |
|
|
| 2.7 Taxation |
|
| Current |
|
| Income
for the purpose of computing current taxation is determined under the
provisions of the tax |
|
| law
whereby lease income received or receivable are deemed to be income.
Provision for taxation |
|
| is
thus based on income determined in accordance with the requirements of the
tax law. |
|
|
| Deferred |
|
| The
company accounts for deferred taxation using the liability method on timing
differences arising |
|
| from
using different methods in the recognition of lease income for tax and
accounting purposes, |
|
| as
well as for all other significant timing differences. However, deferred tax
is not provided if it can |
|
| be
established with reasonable certainty that these timing differences will not
reverse in the fore- |
|
| seeable future. |
|
|
| 2.8
Foreign currency translation |
|
| Assets
and liabilities in foreign currencies are translated into rupees at the rates
of exchange pre- |
|
| vailing
at the balance sheet date except for instances where forward exchange risk
cover has been |
|
| taken.
Such amounts are stated at the contracted rate. Exchange gains and losses are
included in |
|
| current income. |
|
|
| 2.9.
Employees' benefits |
|
| The
company operates a contributory Provident Fund for all its permanent
employees and contri- |
|
| butions
are made monthly in accordance with the fund rules. |
|
|
| Commencing
this year, the company provides for all accumulating compensated absences, in
the |
|
| period
in which service is rendered, in accordance with the requirements of
International Account- |
|
| ing
Standard 19 - Employee Benefits. |
|
|
| 3.
FIXED ASSETS-Tangible |
|
|
COST |
DEPRECIATION |
|
| Description |
|
|
Disposal/ |
|
Accumulated |
|
Accumulated |
Written |
|
|
|
As at |
Additions |
adjustment |
As at |
as at |
|
as at |
down value |
Deprecia- |
|
|
July 1, |
during the |
during the |
June 30, |
July, 1, |
Charge for |
On |
June 30, |
as at |
tion |
|
|
1999 |
year |
year |
2000 |
1999 |
the year |
disposal |
2000 |
June 30, 2000 |
Rate |
|
|
|
|
|
Rupees |
Rupees |
Rupees |
Rupees |
Rupees |
Rupees |
Rupees |
Rupees |
Rupees |
% |
|
| OWNED |
|
|
| Office building |
|
1,403,300 |
-- |
-- |
1,403,300 |
378,902 |
70,165 |
-- |
449,067 |
954,233 |
5 |
|
| Leasehold
improvements |
2,278,987 |
10,600 |
-- |
2,289,587 |
1,505,021 |
202,708 |
-- |
1,707,729 |
581,858 |
15 |
|
| Furniture
and fixtures |
1,951,981 |
23,750 |
-- |
1,975,731 |
1,631,791 |
128,516 |
-- |
1,760,307 |
215,424 |
20 |
|
| Office
equipment |
1,802,319 |
25,910 |
-- |
1,828,229 |
1,352,131 |
175,688 |
-- |
1,527,819 |
300,410 |
20 |
|
| Computer
Equipment |
2,382,008 |
359,115 |
-- |
2,741,123 |
1,910,370 |
384,592 |
-- |
2,294,962 |
446,161 |
25 |
|
| Air
conditioners and |
|
|
|
| household
equipment |
2,143,210 |
3,500 |
100,000 |
2,046,710 |
1,451,604 |
377,804 |
25,000 |
1,804,408 |
242,302 |
25 |
|
| Motor vehicles |
|
9,945,231 |
490,000 |
-- |
10,435,231 |
7,393,659 |
1,421,810 |
-- |
8,815,469 |
1,619,762 |
25 |
|
|
|
|
| Plant
and machinery |
|
|
|
| (for
lease and re-sale) |
10,332,000 |
-- |
10,332,000 |
-- |
4,164,176 |
-- |
4,164,176 |
-- |
-- |
10 |
|
|
----------- |
----------- |
----------- |
----------- |
----------- |
----------- |
----------- |
----------- |
----------- |
|
|
|
32,239,036 |
912,875 |
10,432,000 |
22,719,911 |
19,787,654 |
2,761,283 |
4,189,176 |
18,359,761 |
4,360,150 |
|
|
|
========== |
========== |
========== |
========== |
========== |
========== |
========== |
========== |
========== |
|
|
| LEASED |
|
|
|
| Motor vehicles |
|
1,652,000 |
-- |
-- |
1,652,000 |
606,000 |
413,000 |
-- |
1,019,000 |
633,000 |
25 |
|
|
----------- |
----------- |
----------- |
----------- |
----------- |
----------- |
----------- |
----------- |
----------- |
|
|
|
33,891,036 |
912,875 |
10,432,000 |
24,371,911 |
20,393,654 |
3,174,283 |
4,189,176 |
19,378,761 |
4,993,150 |
|
|
========== |
========== |
========== |
========== |
========== |
========== |
========== |
========== |
========== |
|
| FOR
OPERATING LEASE |
|
|
| OWNED |
|
| Plant
and machinery |
101,027,847 |
24,169,059 |
14,260,505 |
110,936,401 |
14,341,460 |
11,670,342 |
627,781 |
25,384,021 |
85,552,380 |
10 |
|
| Office
equipment |
350,000 |
|
-- |
350,000 |
46,667 |
70,000 |
|
116,667 |
233,333 |
20 |
|
| Vehicle |
|
-- |
1,840,000 |
-- |
1,840,000 |
-- |
115,000 |
|
115,000 |
1,725,000 |
25 |
|
|
----------- |
----------- |
----------- |
----------- |
----------- |
----------- |
----------- |
----------- |
----------- |
|
|
|
101,377,847 |
26,009,059 |
14,260,505 |
113,126,401 |
14,388,127 |
11,855,342 |
627,781 |
25,615,688 |
87,510,713 |
|
|
| LEASED |
|
========== |
========== |
========== |
========== |
========== |
========== |
========== |
========== |
========== |
|
|
| Plant
and machinery |
18,724,348 |
-- |
6,311,388 |
12,412,960 |
3,834,150 |
1,609,460 |
1,793,107 |
3,650,503 |
8,762,457 |
10 |
|
|
----------- |
----------- |
----------- |
----------- |
----------- |
----------- |
----------- |
----------- |
----------- |
|
|
|
120,102,195 |
26,009,059 |
20,571,893 |
125,539,361 |
18,222,277 |
13,464,802 |
2,420,888 |
29,266,191 |
96,273,170 |
|
|
|
========== |
========== |
========== |
========== |
========== |
========== |
========== |
========== |
========== |
|
|
|
153,993,231 |
26,921,934 |
31,003,893 |
149,911,272 |
38,615,931 |
16,639,085 |
6,610,064 |
48,644,952 |
101,266,320 |
|
|
|
========== |
========== |
========== |
========== |
========== |
========== |
========== |
========== |
========== |
|
|
| 1999 |
|
130,807,426 |
28,361,236 |
5,175,431 |
153,993,231 |
26,205,460 |
15,213,350 |
2,802,879 |
38,615,931 |
115,377,300 |
|
|
|
========== |
========== |
========== |
========== |
========== |
========== |
========== |
========== |
========== |
|
|
|
| 3.1
Disposal Of Assets |
|
| Description |
|
Cost |
Accumu- |
Book |
Sale |
Profit |
Mode of |
|
Sold/Transferred to |
|
Address |
|
|
|
lated |
value |
proceeds |
|
disposal |
|
|
|
|
deprecia- |
|
|
|
|
|
tion |
|
|
|
|
Rupees |
Rupees |
Rupees |
Rupees |
|
| Air
conditioners and |
|
| household
equipment |
100,000 |
25,000 |
75,000 |
75,000 |
-- |
As per service rules |
Mr. Zahid A. Jamal |
|
|
|
|
Ex-employee |
|
| Plant
& Machinery |
10,332,000 |
4,164,176 |
6,167,824 |
7,940,000 |
1,772,176 |
Negotiation |
|
Raja Weaving Mills Ltd., |
F-352, S.I.T.E. Karachi. |
| Equipment |
|
11,690,621 |
584,531 |
11,106,090 |
11,106,090 |
-- |
Negotiation |
|
M.C.R. (Pvt) Ltd., |
7th floor, Shahnaz Acade, |
|
(an associated
undertaking) |
Shaheed-e-Millat Road, |
|
Karachi. |
|
|
| Generator |
|
2,541,388 |
592,991 |
1,948,397 |
2,012,000 |
63,603 |
Insurance claim |
EFU General |
|
7th Floor, Business
Plaza, |
|
|
|
Insurance Co. Ltd., |
Mumtaz |
|
|
|
|
Hussain Road, Karachi. |
| Generator |
|
1,297,509 |
43,250 |
1,254,259 |
935,000 |
(319,259) |
Negotiation |
|
Euromode |
|
L/32/E, Federal B, Area, |
|
|
|
Karachi. |
|
|
|
|
| Generator |
|
1,272,375 |
-- |
1,272,375 |
935,000 |
(337,375) |
Negotiation |
|
Makhdoom Enterprises, |
Suite # 6, 2nd Floor, |
|
Madras Building, |
|
Adamjee Daud Road, |
|
Jodia Bazar, Karachi. |
|
----------- |
----------- |
----------- |
----------- |
----------- |
|
| TOTAL |
|
27,233,893 |
5,409,948 |
21,823,945 |
23,003,090 |
1,179,145 |
|
|
========== |
========== |
========== |
========== |
========== |
|
| 1999 |
|
5,175,431 |
2,802,879 |
2,372,552 |
2,958,453 |
585,901 |
|
|
========== |
========== |
========== |
========== |
========== |
|
|
|
|
|
2000 |
1999 |
|
|
Rupees |
Rupees |
|
| 4.
NET INVESTMENT IN LEASE FINANCE |
|
| The
expected maturities of gross investment in lease finance are as follows |
|
|
| Not
later than one year |
|
535,531,908 |
462,395,508 |
|
| Later
than one year and not later than five years |
|
507,006,288 |
631,317,692 |
|
|
----------- |
----------- |
|
|
1,042,538,196 |
1,093,713,200 |
|
|
| The
expected maturities of net investment in lease finance are as follows: |
|
|
| Not
later than one year |
|
442,250,427 |
320,796,338 |
|
| Later
than one year and not later than five years |
|
437,622,078 |
540,384,765 |
|
|
----------- |
----------- |
|
|
879,872,505 |
861,181,103 |
|
|
========== |
========== |
|
| Includes
in the above is Rs. 27,455,279 (1999: Rs. 26,822,118) in respect of
associated undertakings. Maxi- |
|
| mum
amount due at the end of any month during the year was Rs. 29,275,152 (1999:
Rs. 37,251,620). |
|
|
| The
leases made by the company are subject to a term of 3-5 years and security
deposit generally upto |
|
| 10%
at the time of disbursement. The company requires the lessees to insure the
leased assets in the favor |
|
| of
the company and to maintain financial ratios required by regulations for
Leasing Companies. Refer note |
|
| 33
for average rate of return implicit in the lease. |
|
|
|
Note |
2000 |
1999 |
|
|
|
Rupees |
Rupees |
|
|
| 5. PROVISION FOR LEASE LOSSES |
|
44,788,257 |
36,381,575 |
|
|
========== |
========== |
|
| A
general provision for doubtful receivables has been made and in the opinion
of the management no |
|
| specific
provision is required. 'However, to comply with regulations governing Non
Banking Financial |
|
| Institutions,
an amount of Rs. 44.78 million (1999: Rs. 36.38 million) has been allocated
towards provision |
|
| required
under prudential regulations. |
|
|
| 6.
LONG-TERM FINANCE, ADVANCES AND RECEIVABLE |
|
| Long-term
finance |
|
6.1 |
12,938,709 |
12,938,709 |
|
| Long-term
advances |
|
6.2 |
11,433,858 |
6,140,815 |
|
| Long-term
receivable |
|
8,170,000 |
-- |
|
|
------------ |
------------ |
|
|
32,542,567 |
19,079,524 |
|
|
|
|
| Less:
Current maturity of long-term finance |
|
12,938,709 |
12,938,709 |
|
| Current
maturity of long-term advances |
|
655,083 |
480,155 |
|
| Current
maturity of long-term receivable |
|
1,634,000 |
-- |
|
|
------------ |
------------ |
|
|
15,227,792 |
13,418,864 |
|
|
------------ |
------------ |
|
|
17,314,775 |
5,660,660 |
|
|
========== |
========== |
|
|
|
|
| 6.1
The finance is secured by the pledge of directors' shares of the borrowing
company (Cosmopolitan |
|
| Development
Corporation) and the personal guarantees of the directors. The finance
carries a mark- |
|
| up
at the rate of Rs. 0.495 per Rs. 1,000 per day (see note 9.1) |
|
|
| 6.2
The advances under this scheme have been provided to the executives of the
company to facilitate |
|
| the
construction of houses. The advance is repayable in equal monthly instalments
upto a period |
|
| of
15 years alongwith a 5% service charges per annum on the monthly outstanding
balance. The |
|
| advance
is secured by a deposit of the title deed of the properties. Maximum amount
due at the end |
|
| of
any month during the year was Rs. 13,945,806 (1999: Rs. 6,560,399) |
|
|
|
Note |
2000 |
1999 |
|
|
|
Rupees |
Rupees |
|
| 7.
LONG-TERM INVESTMENTS |
|
| Quoted: |
|
| First
Capital Securities Limited |
|
| 239,300
(1999: 470,250) ordinary shares of Rs. 10/- each |
|
2,290,412 |
5,401,085 |
|
|
| First
Capital Mutual Fund |
|
| 150,000
ordinary shares of Rs. 10/- each |
|
1,500,000 |
1,500,000 |
|
|
| Bankers
Equity Limited |
|
| 2,702,700
ordinary shares of Rs. 10./- each |
|
50,566,870 |
50,566,870 |
|
|
| ICP S.E.M.F |
|
| 969,500
(1999: 692,000) ordinary share of Rs. 10/- each |
|
23,366,395 |
14,911,139 |
|
|
----------- |
----------- |
|
|
77,723,677 |
72,379,094 |
|
|
| Unquoted: |
|
| Maghrib
Development Corporation (Pvt.) Limited |
|
| (an
associated undertaking) |
|
| 1
ordinary share of Rs. 10 each |
|
10 |
10 |
|
|
| Advance
against share capital |
|
4,999,990 |
24,999,990 |
|
|
----------- |
----------- |
|
|
5,000,000 |
25,000,000 |
|
|
----------- |
----------- |
|
|
82,723,677 |
97,379,094 |
|
| Provision
for diminution in value of investments |
|
| Banker's
Equity Limited |
|
(45,026,335) |
-- |
|
| First
Capital Mutual Fund |
|
(450,000) |
(450,000) |
|
|
----------- |
----------- |
|
|
(45,476,335) |
(450,000) |
|
|
----------- |
----------- |
|
|
37,247,342 |
96,929,094 |
|
|
========== |
========== |
|
| Aggregate
market value of quoted long-term investments as on June 30,2000 was Rs.
23,361,245 (1999: |
|
| Rs.
23,448,323). The break-up value of investment in the unquoted share is Rs.
9.83 (1999 - Rs. 10.00) |
|
|
| 8.
LONG-TERM DEPOSIT AND DEFERRED COSTS |
|
|
| Long-term
deposit |
|
|
1,536,748 |
845,730 |
|
| Deferred costs |
|
8.1 |
-- |
602,739 |
|
|
|
----------- |
----------- |
|
|
|
1,536,748 |
1,448,469 |
|
|
========== |
========== |
|
|
|
| 8.1
Deferred costs |
|
| Registration
fees |
|
1,045,710 |
1,045,710 |
|
| Formation
expenses |
|
88,133 |
88,133 |
|
| Underwriting
commission |
|
260,000 |
260,000 |
|
| Brokerage |
|
223,324 |
223,324 |
|
| Share
issue expenses |
|
3,026,965 |
3,026,965 |
|
| Pre-operating
expenses |
|
224,239 |
224,239 |
|
| Commitment
fee on long-term loans |
|
1,914,777 |
1,914,777 |
|
|
----------- |
----------- |
|
|
6,783,148 |
6,783,148 |
|
| Less:
Amortization to date |
|
(6,783,148) |
(6,180,409) |
|
|
----------- |
----------- |
|
|
-- |
602,739 |
|
|
========== |
========== |
|
|
|
|
| 9.
CURRENT MATURITY OF LONG-TERM FINANCE, |
|
| ADVANCES
AND RECEIVABLE |
|
| Long-Term
Finance |
|
9.1 |
12,938,709 |
12,938,709 |
|
| Long-Term
Advance |
|
|
655,083 |
480,155 |
|
| Long-Term
Receivable |
|
|
1,634,000 |
-- |
|
|
----------- |
----------- |
|
|
15,227,792 |
13,418,864 |
|
| Less:
provision on long-term finance |
|
(6,469,355) |
(2,587,742) |
|
|
----------- |
----------- |
|
|
8,758,437 |
10,831,122 |
|
|
========== |
========== |
|
| 9.1
The finance is considered good, as a compromise decree has been passed by the
banking tribunal. |
|
| The
finance is now recoverable in 10 equal quarterly instalments which became due
from March 18, |
|
| 1998.
However, to comply with regulations for NBFIs, a provision has been made
there against. (See |
|
| note 6.1) |
|
|
| 10.
SHORT-TERM AND MORABAHA FINANCES-Considered good |
|
| Short-term
finances |
|
1,584,444 |
1,789,444 |
|
| Morabaha
finances |
|
22,543,540 |
56,531,285 |
|
|
----------- |
----------- |
|
|
24,127,984 |
58,320,729 |
|
|
========== |
========== |
|
| Short-term
and morabaha finances have been extended to clients on mark-up/profit basis
from 3 months |
|
| to
1 year and are secured by equitable mortgage of immovable properties, lien on
stocks, pledge of COIs, |
|
| promissory
notes and personal guarantees in accordance with individual agreements with
the clients. Mark- |
|
| up
rates/profit vary from Re.0.52 per Rs. 1000 to Re. 0.71 per Rs. 1000 per day. |
|
|
| The
maximum amount due at the end of any month from an associated undertaking
during the year was |
|
| Rs.
4,260,000 (1999: Rs. 4,260,000) |
|
|
| 11.
ADVANCES, DEPOSITS, PREPAYMENTS |
|
| AND
OTHER RECEIVABLES |
|
| Advances
to suppliers and contractors |
|
|
2,143,198 |
23,869,959 |
|
| Advances
to employees |
|
11.1 |
1,039,828 |
4,996,370 |
|
|
|
------------ |
------------ |
|
|
|
3,183,026 |
28,866,329 |
|
|
|
|
| Security
deposits |
|
|
-- |
754,487 |
|
| Prepayments |
|
|
2,763,793 |
3,397,075 |
|
|
|
------------ |
------------ |
|
|
|
2,763,793 |
4,151,562 |
|
| Mark-up
receivable |
|
|
|
| Financial
institutions |
|
|
3,398,454 |
2,045,339 |
|
| Others |
|
12,259,883 |
9,020,649 |
|
|
------------ |
------------ |
|
|
15,658,337 |
11,065,988 |
|
| Other
charges recoverable from lessees |
|
9,329,773 |
13,728,210 |
|
| Operating
lease rentals receivable |
|
6,422,316 |
8,220,712 |
|
| Other assets |
|
11.2 |
20,000,000 |
20,000,000 |
|
| Advance tax |
|
1,340,727 |
(1,115,462) |
|
| Receivable
against sale of shares |
|
7,880,600 |
-- |
|
| Other
receivables |
|
15,534,843 |
15,155,425 |
|
|
------------ |
------------ |
|
|
82,113,415 |
100,072,764 |
|
|
========== |
========== |
|
| 11.1
The maximum amount due at the end of any month during the year was Rs.
5,202,582, (1999: Rs. |
|
| 6,394,944) |
|
|
| 11.3
This represent lease assets repossessed stated at original cost. |
|
|
| 12.
INVESTMENTS IN MARKETABLE SECURITIES |
|
|
2000 |
1999 |
|
|
No. of |
Cost |
No. of |
Cost |
|
|
ordinary |
|
ordinary |
|
|
|
shares of |
Rupees |
shares of |
Rupees |
|
| Description |
|
Rs. 10 each |
|
Rs. 10 each |
|
|
| Quoted |
|
| First
Capital Mutual Fund |
|
76,000 |
760,000 |
76,000 |
760,000 |
|
| Adamjee
Insurance Co. Ltd. |
|
-- |
-- |
5,500 |
323,100 |
|
| EFU
General Insurance Co. Ltd. |
15,000 |
757,350 |
12,000 |
757,350 |
|
| Hub
Power Company Ltd. |
|
-- |
-- |
100,000 |
1,944,250 |
|
| A1-Meezan
Mutual Fund Ltd. |
|
250,000 |
2,500,000 |
250,000 |
2,500,000 |
|
| ICI
Pakistan Ltd. |
|
-- |
-- |
50,000 |
731,140 |
|
| Packages Ltd. |
|
250 |
9,924 |
250 |
9,924 |
|
| ICP SEMF |
|
-- |
-- |
585,500 |
8,596,105 |
|
| Engro
Chemicals Ltd. |
|
200 |
-- |
-- |
-- |
|
| Karachi
Electric Supply Corporation Ltd. |
-- |
-- |
428,000 |
6,044,259 |
|
| Biofo
Industries Ltd. |
|
191,000 |
2,992,913 |
200,000 |
905,620 |
|
| PICIC |
|
-- |
-- |
25,000 |
270,750 |
|
| Crescent
Investment Bank Ltd. |
65,000 |
1,692,373 |
-- |
-- |
|
| Pakistan
International Air Lines |
-- |
-- |
85,000 |
1,402,796 |
|
| Dhan
Fibres Ltd. |
|
225,000 |
4,227,500 |
100,000 |
457,500 |
|
| Shell
Pakistan Ltd. |
|
-- |
-- |
15,000 |
2,893,322 |
|
| Fauji
Fertilizer Ltd. |
|
27,500 |
1,796,713 |
75,000 |
4,217,250 |
|
| Tri
Pack Films Ltd. |
|
-- |
-- |
50,000 |
542,265 |
|
| Golden
Arrow Mutual Fund |
|
363,500 |
1,740,656 |
-- |
-- |
|
| Japan
Power Ltd. |
|
100,000 |
929,500 |
-- |
-- |
|
| Maple
Leaf Electric Ltd. |
|
327,000 |
4,213,330 |
-- |
-- |
|
| Pakistan
Telecommunication Corporation Ltd. |
350,000 |
11,614,005 |
-- |
-- |
|
| Pakistan
State Oil Ltd. |
|
15,000 |
3,903,919 |
-- |
-- |
|
| Sui
Southern Gas Pipelines Ltd. |
|
25,000 |
503,750 |
28,750 |
|
| 286,143 |
|
| Telecard Ltd. |
|
25,000 |
815,730 |
-- |
-- |
|
|
----------- |
|
----------- |
|
|
38,457,661 |
|
32,641,774 |
|
| Government
securities |
|
-- |
|
7,600,000 |
|
|
----------- |
|
----------- |
|
|
38,457,661 |
|
40,241,774 |
|
| Provision
for diminution in value of investments |
|
(13,171,701) |
|
(8,927,318) |
|
|
----------- |
|
----------- |
|
| Aggregate
market value at June 30, |
|
25,285,960 |
|
31,314,456 |
|
|
========== |
|
========== |
|
|
|
|
|
|
|
Note |
2000 |
1999 |
|
|
|
Rupees |
Rupees |
|
| 13.
CASH AND BANK BALANCES |
|
| Balance
with banks on current accounts |
|
2,399,662 |
1,544,663 |
|
| Deposit
accounts - LCY account (not 13.1) |
|
10,808,402 |
15,484,529 |
|
| - FCY account |
|
27,269 |
32,835 |
|
|
----------- |
----------- |
|
|
13,235,333 |
17,062,027 |
|
| Cash in hand |
|
212,928 |
127,864 |
|
|
----------- |
----------- |
|
|
13,448,261 |
17,189,891 |
|
|
========== |
========== |
|
| 13.1
Rs. 1.06 million (1999: Rs. 1.10 million) has been deposited with State Bank
of Pakistan relevant pro- |
|
| visions
of the regulations for Non-Banking Financial Institutions to maintain
liquidity against cer- |
|
| tain liabilities. |
|
|
| 14.
ISSUED SUBSCRIBED AND PAID-UP SHARE CAPITAL |
|
| Fully
paid-up ordinary share of Rs. 10/- each |
|
| Issued for cash |
|
|
| 2000 |
1999 |
|
| Number of shares |
|
| 27,278,234 |
27,278,234 |
|
272,782,340 |
272,782,340 |
|
| ========== |
========== |
|
========== |
========== |
|
|
|
|
|
| 15.
RESERVES |
|
| Capital Reserve |
|
| Share premium |
|
6,274,730 |
6,274,730 |
|
| Special
Reserve |
|
15.1 |
39,354,093 |
39,354,093 |
|
|
|
----------- |
----------- |
|
|
45,628,823 |
45,628,823 |
|
| Revenue
Reserve |
|
| Unappropriated
(loss)/profit |
|
(21,055,192) |
6,060,896 |
|
|
----------- |
----------- |
|
|
24,573,631 |
51,689,719 |
|
|
========== |
========== |
|
|
|
|
| 15.1
Opening balance |
|
39,354,093 |
38,574,810 |
|
| Add:
Transferred from profit and loss |
|
| appropriation
account |
|
-- |
779,283 |
|
|
----------- |
----------- |
|
|
39,354,093 |
39,354,093 |
|
|
========== |
========== |
|
| The
above represented 20% of after tax profit as required under the relevant
provision of the regulations |
|
| for
Non Banking Financial Institutions. |
|
|
|
2000 |
1999 |
|
|
Rupees |
Rupees |
|
|
| 16.
LONG-TERM FINANCES UNDER MUSHARIKA |
|
| ARRANGEMENTS |
|
| Musharika
finances |
|
38,798,024 |
170,105,655 |
|
| Less:
Current maturity shown under current liabilities |
|
(18,979,270) |
(64,160,000) |
|
|
----------- |
----------- |
|
|
19,818,754 |
105,945,655 |
|
|
========== |
========== |
|
| Musharika
finances include Rs. 38.80 million (1999: Rs. 130.10 million) which are
unsecured. The musharika |
|
| earned
an average rate of 17.24 % per annum (1999: 18.08%) on these musharika
arrangements. The terms |
|
| of
repayment of principal and profit range from monthly to end of term basis. |
|
|
| 17.
LONG-TERM FINANCES-Secured, considered good |
|
| Foreign
currency loan |
|
| International
Finance Corporation |
|
17.1 |
53,959,500 |
69,376,500 |
|
| Less:
Exchange difference not yet due |
|
(417,550) |
(536,850) |
|
|
----------- |
----------- |
|
|
53,541,950 |
68,839,650 |
|
| Local
currency finances |
|
| From
banking companies |
|
| Finance A |
|
-- |
20,000,000 |
|
| Finance B |
|
17.2 |
75,000,000 |
-- |
|
|
|
|
|
| From
financial Institutions |
|
|
|
|
| Finance C |
|
17.3 |
20,000,000 |
-- |
|
| Finance D |
|
17.4 |
25,000,000 |
-- |
|
| Finance E |
|
17.5 |
25,000,000 |
25,000,000 |
|
| Finance F |
|
17.6 |
20,000,000 |
-- |
|
| Finance G |
|
|
-- |
10,000,000 |
|
| Finance H |
|
17.7 |
4,195,778 |
11,453,343 |
|
| Finance I |
|
17.8 |
9,938,418 |
18,193,114 |
|
| Finance K |
|
17.9 |
6,666,668 |
13,333,334 |
|
| Finance L |
|
17.1 |
50,000,000 |
50,000,000 |
|
|
------------ |
------------ |
|
|
235,800,864 |
147,979,791 |
|
|
------------ |
------------ |
|
|
289,342,814 |
216,819,441 |
|
| Less:
Current maturity shown under current liabilities |
|
(154,492,407) |
(67,595,927) |
|
|
------------ |
------------ |
|
|
134,850,407 |
149,223,514 |
|
|
========== |
========== |
|
|
|
| 17.1 IFC Loan |
|
| The
International Finance Corporation (IFC) has extended a loan for financing of
lease operations |
|
| which
is repayable in sixteen semi-annual equal instalments which commenced from
June 15,1996. |
|
| The
loan carries interest at the rate of 8.5% payable semi-annually secured by
hypothecation of leased |
|
| assets
and related lease receivables, ranking pari-passu with the charges created or
which may be |
|
| created
in favour of other lenders. The loan is registered under the exchange risk
coverage scheme |
|
| of
the State Bank of Pakistan. The rate of exchange risk cover fee is 6.66% per
annum. In case the |
|
| company
fails to pay any amount on the due date, it shall be liable to pay liquidated
damages at |
|
| the
rate of 2% per annum over and above the interest rate. |
|
|
| 17.2 Finance B |
|
| This
has been obtained from a financial institution on a sale and repurchase
agreement for financing |
|
| the
leasing operations of the company and secured by specific charge on operating
lease assets. |
|
|
| The
sale price was Rs. 75,000,000 With a purchase price of Rs. 97,019,180 and is
repayable in twelve |
|
| equal
quarterly instalments commencing from September 28,2000. |
|
|
| 17.3 Finance C |
|
|
| This
has been obtained from a financial institution on a sale and repurchase
agreement for financing |
|
| the
leasing operations of the company and is secured by hypothecation of leased
assets. |
|
|
| The
sale price was Rs. 20,000,000 with a purchase price of Rs. 25,741,095 and is
repayable in six semi- |
|
| annually
instalments commencing from August 02, 2000. |
|
|
| 17.4 Finance D |
|
| This
has been obtained from a financial institution on a sale and repurchase
agreement for financing |
|
| the
leasing operations of the company and is secured by hypothecation of leased
assets. |
|
|
| The
sale price was Rs. 25,000,000 with a purchase price of Rs. 33,062,500 and is
repayable in twelve |
|
| quarterly
instalments commencing from February 02, 2001 |
|
|
| 17.5 Finance E |
|
| This
has been obtained from a financial institution on a mark-up rate of 16% per
annum payable |
|
| quarterly.
The loan is repayable in lumpsum on August 26,2001 and secured by
hypothecation of |
|
| leased assets. |
|
|
| 17.6 Finance F |
|
| This
has been obtained from a financial institution at a mark-up rate of 17.75%
per annum payable |
|
| quarterly.
The loan is repayable in lumpsum on February 10,2001 and secured by
hypothecation of |
|
| leased assets |
|
|
| 17.7 Finance H |
|
| This
has been obtained from a financial institution on a sale and repurchase
agreement for financing |
|
| the
leasing operation of the company and is secured by hypothecation of leased
assets. |
|
|
| The
sale price was Rs. 20,000,000 with a purchase price of Rs. 27,078,100 and is
repayable in twelve |
|
| equal
quarterly instalments which commenced from March 20,1998. |
|
|
| 17.8 Finance I |
|
| This
has been obtained from a financial institution on a sale and repurchase
agreement for financing |
|
| the
leasing operations of the company and is secured by hypothecation of leased
assets. |
|
|
| The
sale price was Rs. 25,000,000 with a purchase price of Rs. 33,847,624 and is
repayable in twelve |
|
| equal
quarterly instalments which commenced from September 01,1998. |
|
|
| 17.9 Finance K |
|
| This
has been obtained from a financial institution on a sale and repurchase
agreement for financing |
|
| the
leasing operations of the company and is secured by hypothecation of leased
assets. |
|
|
| The
sale price was Rs. 20,000,000 with a purchase price of Rs. 26,430,229 and is
repayable in six semi- |
|
| annually
instalments which commenced from September 23, 1998. |
|
|
| 17.10
Finance L |
|
| This
has been obtained from a financial institution at a mark-up rate of 16.5% per
annum payable |
|
| quarterly.
The loan is repayable in lumpsum on July 27,2001 and secured by hypothecation
of leased |
|
| assets |
|
|
| 18.
OBLIGATIONS UNDER FINANCE LEASE |
|
| Future
minimum lease payments under finance leases together with the present value
of net minimum |
|
| lease
payments are as follows: |
|
|
|
|
2000 |
1999 |
|
|
Minimum |
Present |
Minimum |
Present |
|
|
lease |
value |
lease |
value |
|
|
payments |
|
payments |
|
|
|
Rupees |
Rupees |
Rupees |
Rupees |
|
|
| Within
one year |
|
3,164,568 |
2,489,240 |
7,940,403 |
6,087,316 |
|
| After
one year but not later than five years |
2,515,061 |
2,428,511 |
6,347,656 |
6,267,061 |
|
|
----------- |
----------- |
----------- |
----------- |
|
| Total
minimum lease payments |
5,679,629 |
4,917,751 |
14,288,059 |
12,354,377 |
|
| Less:
Amounts representing finance charges |
(761,878) |
-- |
(1,933,682) |
-- |
|
|
----------- |
----------- |
----------- |
----------- |
|
| Present
value of minimum lease payments |
4,917,751 |
4,917,751 |
12,354,377 |
12,354,377 |
|
| Less:
Current portion |
|
(2,489,240) |
(2,489,240) |
(6,087,316) |
(6,087,316) |
|
|
----------- |
----------- |
----------- |
----------- |
|
|
2,428,511 |
2,428,511 |
6,267,061 |
6,267,061 |
|
|
========== |
========== |
========== |
========== |
|
| These
represent finance lease entered into with leasing companies for plant and
machinery and vehicles |
|
| Rates
of financial charges ranging from 19.41% to 21.85% per annum are used as
discounting factors. The |
|
| lease
rentals are payable in monthly installment. |
|
|
| At
the end of the lease term the ownership of the asset shall be transferred to
the company on payment |
|
| of
residual value amounting to Rs.727,998 (1999: Rs. 1,267,867) |
|
|
| These
are secured by demand promissory notes and security deposits in addition to
assets being in the |
|
| name
of the lessors. |
|
|
|
2000 |
1999 |
|
|
Rupees |
Rupees |
|
| 19.
LONG-TERM DEPOSITS AND LIABILITIES |
|
| Deposits |
|
| Deposits
on leases |
|
99,605,054 |
93,171,287 |
|
| Less:
Current maturity shown under current liabilities |
|
(30,705,700) |
(17,160,779) |
|
|
----------- |
----------- |
|
|
68,899,354 |
76,010,508 |
|
| Certificates
of investment |
|
19.1 |
5,927,393 |
43,800,000 |
|
|
----------- |
----------- |
|
|
74,826,747 |
119,810,508 |
|
|
========== |
========== |
|
| 19.1
The Company has a scheme of registered Certificate of Investment (COIs) for
resource mobilisation |
|
| as
per permission from the Corporate Law Authority, (now SECP) Government of
Pakistan. These |
|
| certificate
are issued under profit and loss sharing basis at rates of profit and loss
sharing basis at |
|
| rates
of profit ranging from 16.00% to 18.00% per annum. The COIs are for terms of
2 years to 5 years. |
|
|
| 20.
CURRENT MATURITY OF LONG-TERM LIABILITIES |
|
| Current
maturity of long-term finances under |
|
| musharika
arrangements |
|
18,979,270 |
64,160,000 |
|
| Current
maturity of long-term finances |
|
154,492,407 |
67,595,927 |
|
| Current
maturity of obligations under finance lease |
|
2,489,240 |
6,087,316 |
|
| Current
maturity of long-term deposits |
|
30,705,700 |
17,160,779 |
|
|
----------- |
----------- |
|
|
206,666,617 |
155,004,022 |
|
|
========== |
========== |
|
|
|
|
| 21.
OTHER CURRENT LIABILITIES |
|
| Short-term
finances from financial institutions |
|
21.1 |
291,010,524 |
226,665,133 |
|
| Running
finance under mark-up arrangement |
|
21.2 |
-- |
52,108,784 |
|
| Certificates
of investments |
|
21.3 |
83,310,000 |
70,095,000 |
|
| Creditors,
accrued and other liabilities |
|
21.4 |
34,353,944 |
50,747,668 |
|
| Unclaimed
dividend |
|
|
1,562,015 |
1,604,609 |
|
|
----------- |
----------- |
|
|
410,236,483 |
401,221,194 |
|
|
========== |
========== |
|
| 21.1
Short-term finances from banks and financial institutions |
|
|
| Represent
short-term finances utilised against aggregate facilities of Rs. 291.01
million (1999: Rs. |
|
| 226.66
million). These finances carry mark-up at rates ranging from 13.25% to
17.50%. Included in |
|
| these
are un-secured finances of Rs. 281.01 million (1999: Rs. 190.01 million) |
|
|
| Security
for the balance of the finances is as follows: |
|
| Pledge
of marketable securities (Rs. in million) |
|
14.29 |
36.65 |
|
|
| 21.2
Running finance under mark-up arrangement |
|
| Represents
running finance against aggregate facilities of Rs. 25 million (1999:75
million) from commercial |
|
| bank.
The average rate of mark-up is Re. 0.42 per Rs. 1,000 per day. The
arrangement is secured by |
|
| hypothecation
of leased assets. |
|
|
| 21.3
Certificate of Investments |
|
| The
Company has a scheme of registered Certificates of Investments (COIs) for
resource mobilisation |
|
| as
per permission from the Corporate Law Authority (now SECP) Government of
Pakistan. These |
|
| certificates
are issued under profit and loss sharing basis at rates of profit ranging
from 13% to 17.55% |
|
| per
annum. The COIs are for terms of 3 months to 1 year. |
|
|
|
2000 |
1999 |
|
|
Rupees |
Rupees |
|
| 21.4
Creditors, accrued and other liabilities |
|
| Creditors |
|
21.4.1 |
3,130,417 |
22,674,511 |
|
| Accrued
expenses |
|
1,078,764 |
649,533 |
|
| Other payables |
|
5,541,656 |
4,046,143 |
|
| Advances
from customers against pending |
|
|
|
| lease
executions |
|
366,681 |
364,090 |
|
| Tax
deducted at source |
|
227,581 |
176,850 |
|
| Mark-up
payable |
|
|
|
| Financial
institutions - secured |
|
12,020,442 |
12,743,484 |
|
| - unsecured |
|
7,421,507 |
5,703,815 |
|
| Exchange
risk fee payable to SBP |
|
157,532 |
174,410 |
|
| Others
- secured |
|
772,375 |
-- |
|
| - unsecured |
|
1,360,584 |
2,666,836 |
|
|
----------- |
----------- |
|
|
21,732,440 |
21,288,545 |
|
| Advance rental |
|
2,276,405 |
1,547,996 |
|
|
----------- |
----------- |
|
|
34,353,944 |
50,747,668 |
|
|
========== |
========== |
|
| 21.4.1
This includes an amount of Rs. 0.23 million (1999: Rs. 12.51) payable to a
supplier for acquisition |
|
| of
assets to be given on operating leases. |
|
|
| 22.
COMMITMENTS |
|
| Commitments
for lease finance |
|
32,210,000 |
70,640,000 |
|
|
========== |
========== |
|
|
| 23.
INCOME FROM FINANCE LEASE OPERATIONS |
|
| Lease income |
|
144,621,942 |
160,778,505 |
|
|
========== |
========== |
|
| The
above includes all income arising on account of finance lease operations. |
|
|
| 24.
INCOME FROM OPERATING LEASES |
|
| Rentals |
|
31,855,558 |
32,066,324 |
|
| Depreciation |
|
13,464,802 |
10,473,423 |
|
| Operating
expenses |
|
8,839,401 |
14,980,916 |
|
|
----------- |
----------- |
|
|
22,304,203 |
25,454,339 |
|
|
----------- |
----------- |
|
|
9,551,355 |
6,611,985 |
|
|
========== |
========== |
|
|
|
|
| 25.
CORPORATE FINANCE AND TREASURY OPERATIONS |
|
| Financial
services fee |
|
400,000 |
-- |
|
| Arrangement
fee |
|
15,000 |
100,000 |
|
| Dividend
income |
|
3,398,800 |
2,900,519 |
|
| Return
on term deposits |
|
1,129,018 |
1,466,137 |
|
| Return
on government securities |
|
1,490,399 |
1,143,434 |
|
| Return
on short-term morabaha finances [(net after charging |
|
|
|
| financial
costs of Rs. 7,260,000 (1999: Rs. 7,505,000)] |
|
5,979,417 |
4,811,783 |
|
| Gain
on disposal of fixed assets |
|
1,179,146 |
585,901 |
|
| Exchange gain |
|
1,079 |
3,191 |
|
| Miscellaneous
income |
|
1,704,340 |
611,912 |
|
|
----------- |
----------- |
|
|
15,297,199 |
11,622,877 |
|
|
========== |
========== |
|
|
|
|
| 26.
FINANCIAL AND BANK CHARGES |
|
| Profit
on musharika finances |
|
10,529,899 |
13,422,706 |
|
| Mark-up
on long-term finances |
|
28,189,778 |
33,941,512 |
|
| Exchange
risk fee |
|
4,330,728 |
5,340,622 |
|
| Mark-up
on Certificates of Investment |
|
20,159,060 |
31,394,910 |
|
| Finance
charges on leased assets |
|
1,679,218 |
2,988,788 |
|
| Mark-up
on short-term finances - Banks and financial institutions |
|
54,623,977 |
35,525,361 |
|
| Mark-up
on running finance [net of Rs.484,241 |
|
| recovered
(1999: Rs. 859,144) |
|
4,543,849 |
7,992,988 |
|
| Bank
charges and commissions |
|
284,233 |
358,417 |
|
| Amortization
of deferred costs |
|
323,118 |
430,824 |
|
|
----------- |
----------- |
|
|
124,663,860 |
131,396,128 |
|
|
========== |
========== |
|
|
|
| 27.
SELLING, GENERAL, AND |
|
| ADMINISTRATIVE
EXPENSES |
|
| Directors' fee |
|
27.1 |
2,000 |
6,500 |
|
| Salaries
and allowances |
|
27.2 & 27.3 |
14,280,121 |
12,730,073 |
|
| Staff
welfare and training |
|
|
1,544,041 |
1,568,674 |
|
| Office rent |
|
|
1,991,635 |
1,955,751 |
|
| Travelling |
|
|
503,270 |
969,345 |
|
| Vehicle
up-keep and running |
|
|
1,756,823 |
1,546,295 |
|
| Legal
and professional charges |
|
|
1,458,117 |
968,522 |
|
| Insurance |
|
|
169,787 |
143,832 |
|
| Telephone
and fax |
|
|
1,469,637 |
1,956,180 |
|
| Postage
and courier |
|
|
155,541 |
168,815 |
|
| Electricity,
water and gas |
|
|
740,024 |
756,726 |
|
| Subscription |
|
|
363,958 |
409,236 |
|
| Auditors'
remuneration |
|
27.4 |
138,025 |
186,556 |
|
| Shares
registrar service |
|
|
590,266 |
454,925 |
|
| Advertisement |
|
|
106,566 |
120,065 |
|
| Printing
and stationery |
|
|
458,058 |
468,884 |
|
| Depreciation |
|
|
3,174,283 |
4,739,924 |
|
| Amortization
of deferred costs |
|
|
279,621 |
429,132 |
|
| Office
repairs and maintenance |
|
|
1,112,578 |
920,730 |
|
| Donations |
|
27.5 |
58,000 |
142,700 |
|
| Professional
Tax |
|
|
225,000 |
157,092 |
|
| General
Expenses |
|
|
951,540 |
615,999 |
|
| Zakat |
|
|
-- |
36,075 |
|
|
|
----------- |
----------- |
|
|
|
31,528,891 |
31,452,029 |
|
|
|
========== |
========== |
|
|
| 27.1
Fees totalling Rs. 2,000 (1999: Rs. 6,500) have been paid to directors for
attending board meetings |
|
| during
the year. |
|
|
| 27.2
This includes an amount of Rs. 627,821 (1999: Rs. 630,052) in respect of
employee provident fund |
|
| contribution. |
|
|
| 27.3
Remuneration of Chief Executive, Directors and Executives |
|
|
|
2000 |
1999 |
|
|
Chief |
|
Chief |
|
|
|
Executive |
Directors |
Executive |
Total |
Executive |
Directors |
Executive |
Total |
|
|
Rupees |
Rupees |
Rupees |
Rupees |
Rupees |
Rupees |
Rupees |
Rupees |
|
| Managerial
remuneration |
1,161,600 |
815,640 |
3,126,855 |
5,104,095 |
1,161,600 |
630,600 |
2,689,920 |
4,482,120 |
|
| Housing
and utilities |
638,400 |
448,560 |
1,585,628 |
2,672,588 |
638,400 |
346,800 |
1,430,640 |
2,415,840 |
|
| Medical
and other expenses |
687,727 |
436,090 |
431,071 |
1,554,888 |
682,625 |
241,704 |
152,638 |
1,076,967 |
|
| Provident fund |
|
116,160 |
81,564 |
301,576 |
499,300 |
116,160 |
63,070 |
268,992 |
448,222 |
|
|
----------- |
----------- |
----------- |
----------- |
----------- |
----------- |
----------- |
----------- |
|
|
2,603,887 |
1,781,854 |
5,445,130 |
9,830,871 |
2,598,785 |
1,282,174 |
4,542,190 |
8,423,149 |
|
|
========== |
========== |
========== |
========== |
========== |
========== |
========== |
========== |
|
| Number
of persons |
1 |
2 |
17 |
20 |
1 |
2 |
15 |
15 |
|
|
| In
addition the Chief Executive, working directors and certain executives are
also provided with free use |
|
| of
company cars and perquisites in accordance with the terms of their
employment. All executives are |
|
| provided
with medical insurance cover. |
|
|
|
2000 |
1999 |
|
|
Rupees |
Rupees |
|
|
| 27.4
Auditors' remuneration |
|
|
| Statutory audit |
|
125,000 |
125,000 |
|
| Advisory
services |
|
-- |
50,000 |
|
| out-of-pocket
expenses |
|
13,025 |
11,556 |
|
|
----------- |
----------- |
|
|
138,025 |
186,556 |
|
|
========== |
========== |
|
|
| 27.5 Donations |
|
| Recipients
of donation do not include any donee in whom any director or his spouse had
an interest. |
|
|
| 28.
TAXATION |
|
| Current |
|
| Assessments
for the assessment years upto 1997-98 have been finalized, in respect of
which refunds amounting |
|
| to
Rs. 2.388 million were allowed during the year. Assessments for the
assessment years 1998-99 and 1999- |
|
| 2000
have not been finalized to date. |
|
|
| Provision
for the current year has been made on the basis of minimum tax under section
80D of the Income- |
|
| tax
Ordinance, 1979. |
|
|
| Deferred |
|
| Deferred
tax liability arising due to timing differences computed under liability
method is estimated at |
|
| Rs.
103.870 million (1999: Rs. 113.209 million) of which Rs. 9.340 million debit
(1999: Rs. 8.159 million credit) |
|
| is
in respect of the current year. However, due to unabsorbed depreciation
carried forward as per tax returns |
|
| of
Rs. 354.974 million resulting in a deferred tax debit of Rs. 106.492 million,
no provision for deferred |
|
| tax
liability is required in accounts. |
|
|
|
2000 |
1999 |
|
|
Rupees |
Rupees |
|
| 29.
TRANSACTIONS WITH ASSOCIATED UNDERTAKINGS |
|
| Receipts |
|
| Lease
rentals received |
|
11,980,481 |
17,693,227 |
|
| Security
deposits on leases |
|
19,050 |
997,725 |
|
| Musharika
Finance |
|
2,037,158 |
59,500,000 |
|
| Sale
of long-term investments |
|
-- |
2,250,000 |
|
| Advance
against share capital |
|
20,000,000 |
-- |
|
|
|
|
| Inter-company
expenses |
|
7,839,733 |
-- |
|
| Sale
of operating lease assets |
|
10,521,559 |
-- |
|
|
| Payments |
|
| Leases
disbursed |
|
388,884 |
-- |
|
| Morabaha
finances |
|
-- |
4,000,000 |
|
| Musharika
Finance |
|
50,240,913 |
9,700,000 |
|
| Mark-up
paid on musharika finance |
|
3,643,412 |
1,095,685 |
|
| Advance
against share capital |
|
-- |
24,999,990 |
|
| Long-term
investment |
|
-- |
10 |
|
| Inter-company
expenses |
|
6,838,733 |
1,001,000 |
|
|
| The
transactions with the associated undertakings are in the normal course of
business at contracted rates |
|
| and
terms determined in accordance with market rates |
|
|
| 30.
EARNING PER SHARE |
|
| Earning
per share is calculated by dividing the net profit for the year by number of
shares outstanding |
|
| during
the year as follows: |
|
|
| (Loss)/profit
after tax for the year |
|
(27,116,088) |
3,896,415 |
|
|
========== |
========== |
|
| Weighted
average number of shares outstanding |
|
|
|
| during the year |
|
27,278,234 |
27,278,234 |
|
|
========== |
========== |
|
| Earnings
per share |
|
(0.99) |
0.14 |
|
|
========== |
========== |
|
| First
Leasing Corporation Ltd. |
|
|
| 31.
CREDIT RISK AND CONCENTRATIONS OF CREDIT RISK |
|
| Credit
risk is the risk, which arises with the possibility 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 by undertaking transactions with a
large number of |
|
| counterparties
in various industries and by continually assessing the credit worthiness of
counterparties. |
|
|
| Concentration
of credit risk arises when a number of counterparties have a similar type of
business activities. |
|
| As
a result any change in economic political or other conditions would effect
their ability to meet con- |
|
| tractual
obligations in a similar manner. |
|
|
| The
company monitors it credit risk by ensuring that adequately secured exposures
are made to credit |
|
| worthy
parties. Furthermore exposures to various industrial sectors are kept within
prescribed limits. |
|
| Details
of the industry sector analysis of lease portfolio is given below: |
|
|
| Industry
Sector |
|
2000 |
% |
1999 |
% |
|
|
Rupees |
|
Rupees |
|
|
| Cement |
|
174,902,095 |
19.88 |
168,130,579 |
19.52 |
|
| Services |
|
142,881,340 |
16.24 |
93,380,431 |
10.84 |
|
| Textile
Weaving and Knitting |
|
94,261,421 |
10.71 |
91,186,245 |
10.59 |
|
| Chemicals,
Fertilizers and Pharma |
90,121,591 |
10.24 |
80,801,297 |
9.38 |
|
| Steel,
Engineering and Automobile |
54,211,974 |
6.16 |
75,424,615 |
8.76 |
|
| Energy,
Oil and Gas |
|
45,892,042 |
5.22 |
51,134,787 |
5.94 |
|
| Transport
and Communication |
48,708,190 |
5.54 |
47,189,927 |
5.48 |
|
| Food,
Tobacco and Beverages |
39,902,711 |
4.54 |
41,185,784 |
4.78 |
|
| Hotels |
|
32,077,346 |
3.65 |
31,296,876 |
3.63 |
|
| Electrical
and Electronic Goods |
30,838,072 |
3.50 |
29,788,113 |
3.46 |
|
| Textile
Spinning |
|
24,093,332 |
2.74 |
24,397,183 |
2.83 |
|
| Sugar
and Allied |
|
10,423,514 |
1.18 |
18,907,834 |
2.20 |
|
| Paper
and Board |
|
11,841,480 |
1.35 |
18,579,457 |
2.16 |
|
| Synthetic
and Rayon |
|
16,417,100 |
1.87 |
17,088,712 |
1.98 |
|
| Health Care |
|
5,613,393 |
0.64 |
9,341,761 |
1.08 |
|
| Financial
Institutions |
|
10,306,766 |
1.17 |
9,245,637 |
1.07 |
|
| Construction |
|
10,096,443 |
1.15 |
8,207,056 |
0.95 |
|
| Dairy
and Poultry |
|
2,316,595 |
0.26 |
6,663,478 |
0.77 |
|
| Leather
Footwear and Tanneries |
-- |
0.00 |
1,043,994 |
0.12 |
|
| Glass
and Ceramics |
|
622,061 |
0.07 |
635,456 |
0.07 |
|
| Miscellaneous |
|
34,345,039 |
3.90 |
37,551,881 |
4.36 |
|
|
------------ |
------------ |
------------ |
------------ |
|
|
879,872,505 |
100.00 |
861,181,103 |
100.00 |
|
|
========== |
========== |
========== |
========== |
|
|
| 32.
NET FOREIGN CURRENCY EXPOSURE |
|
| For
foreign currency borrowings, appropriate forward exchange cover has been
obtained directly from |
|
| State
Bank of Pakistan to hedge against foreign exchange fluctuation risk. The
company is not materiality |
|
| exposed
to currency risk on its other foreign currency assets and liabilities |
|
|
| 33.
MARK-UP RATE RISK |
|
| Mark-up
rate risk (MRR) arises from the possibility that changes in MRR will affect
the value of financial |
|
| instruments.
A company is exposed to MRR as a result of mismatches or gaps in the amounts
of assets |
|
| and
liabilities and off balance sheet instruments that mature or reprice in a
given period. The risk is managed |
|
| by
matching the repricing of assets and liabilities. |
|
|
| The
company's MRR sensitivity position based on the earlier of contractual
repricing or maturity date is |
|
| as follows: |
|
|
| As
at June 30, 2000 |
|
|
More than one |
|
|
Less than |
year and less |
More than |
Not exposed |
|
|
|
one year |
than five Year |
five year |
to MRR |
Total |
|
|
Rupees |
Rupees |
Rupees |
Rupees |
Rupees |
|
| Assets |
|
| Fixed
Assets-Tangible |
|
-- |
-- |
-- |
101,266,320 |
101,266,320 |
|
|
| Net
investment in leases - net of |
|
|
| provision
for lease losses |
|
366,756,470 |
365,045,726 |
-- |
103,282,052 |
835,084,248 |
|
|
| Long-term
finance, advances & receivable |
6,919,389 |
6,052,911 |
4,930,912 |
8,170,000 |
26,073,212 |
|
|
| Long-term
Investments |
|
-- |
-- |
-- |
37,247,342 |
37,247,342 |
|
|
| Long-term
deposits |
|
-- |
-- |
-- |
1,536,748 |
1,536,748 |
|
|
| Short-term
and morabaha finance |
24,127,984 |
-- |
-- |
-- |
24,127,984 |
|
|
| Advances |
|
-- |
-- |
-- |
3,183,026 |
3,183,026 |
|
|
| Prepayments |
|
-- |
-- |
-- |
2,763,793 |
2,763,793 |
|
|
| Other
receivables |
|
-- |
-- |
-- |
76,166,596 |
76,166,596 |
|
|
| Investment
in marketable securities |
-- |
-- |
-- |
25,285,960 |
25,285,960 |
|
|
| Cash
and Bank balances |
|
10,835,671 |
-- |
-- |
2,612,590 |
13,448,261 |
|
|
|
----------- |
----------- |
----------- |
----------- |
----------- |
|
|
|
A |
|
408,639,514 |
371,098,637 |
4,930,912 |
361,514,427 |
1,146,183,490 |
|
|
|
|
|
========== |
========== |
========== |
========== |
========== |
|
|
|
1999 |
|
395,904,774 |
430,712,911 |
3,441,146 |
433,000,644 |
1,263,059,475 |
|
|
|
========== |
========== |
========== |
========== |
========== |
|
|
| Liabilities |
|
|
|
| Equity
and Reserves |
|
-- |
-- |
-- |
297,355,971 |
297,355,971 |
|
|
| Long-term
finances under |
|
18,979,270 |
19,818,754 |
-- |
-- |
38,798,024 |
|
|
| musharika
arrangements |
|
|
|
| Long-term
finances |
|
154,492,407 |
134,850,407 |
-- |
-- |
289,342,814 |
|
|
| Obligation
under finance lease |
2,489,240 |
2,428,511 |
-- |
-- |
4,917,751 |
|
|
| Long-term
deposits |
|
-- |
-- |
-- |
99,605,054 |
99,605,054 |
|
| Certificates
of Investment |
|
83,310,000 |
5,927,393 |
-- |
-- |
89,237,393 |
|
|
| Other
current liabilities |
|
291,010,524 |
-- |
-- |
35,915,959 |
326,926,483 |
|
|
----------- |
----------- |
----------- |
----------- |
----------- |
|
|
|
B |
|
550,281,441 |
163,025,065 |
-- |
432,876,984 |
1,146,183,490 |
|
|
|
|
|
========== |
========== |
========== |
========== |
========== |
|
|
|
1999 |
|
486, 712,160 |
305,236,230 |
-- |
471,111,085 |
1,263,059,475 |
|
|
|
========== |
========== |
========== |
========== |
========== |
|
|
| As
at June 30, 2000 |
|
|
|
| MRR
sensitivity gap (A-B) |
|
(141,641,927) |
208,073,572 |
4,930,912 |
(71,362,557) |
-- |
|
|
|
========== |
========== |
========== |
========== |
========== |
|
|
| Cumulative
MRR sensitivity gap |
(141,641,927) |
66,431,645 |
71,362,557 |
-- |
-- |
|
|
| As
at June 30, 1999 |
|
========== |
========== |
========== |
========== |
========== |
|
|
| MRR
sensitivity gap |
|
(90,807,386) |
125,476,681 |
3,441,146 |
(38,110,441) |
-- |
|
|
|
========== |
========== |
========== |
========== |
========== |
|
|
| Cumulative
MRR sensitivity gap |
(90,807,386) |
34,669,295 |
38,110,441 |
-- |
-- |
|
| 4 |
|
========== |
========== |
========== |
========== |
========== |
|
|
| a)
The total MRR sensitivity gap represents the net amounts of on-balance sheet
items. |
|
| b)
The effective MRR for each of the monetary financial instrument is as
follows: |
|
|
|
2000 |
1999 |
|
|
Effective |
Effective |
|
|
MRR % |
MRR % |
|
| ASSETS |
|
| Net
investment in lease finance |
|
21.81 |
22.88 |
|
| Long-term
finance |
|
18.07 |
18.07 |
|
| Long-term
advances |
|
5.00 |
5.00 |
|
| Short-term
and morabaha finance |
|
20.88 |
19.78 |
|
| Investment
in marketable securities |
|
-- |
15.00 |
|
| Cash
and bank balances |
|
18.00 |
18.00 |
|
|
| LIABILITIES |
|
| Long-term
finances under |
|
| musharika
arrangements |
|
17.24 |
18.08 |
|
| Long
term finances |
|
16.81 |
17.43 |
|
| Obligation
under finance lease |
|
20.98 |
21.58 |
|
| Certificates
of Investments |
|
15.85 |
18.68 |
|
| Other
current liabilities |
|
16.01 |
18.28 |
|
|
| 34.
FAIR VALUE OF FINANCIAL INSTRUMENT |
|
| The
fair value is the amount for which an asset could be exchanged, or a
liability settled, between knowl- |
|
| edgeable,
willing parties in an arm's length transaction. Consequently difference can
arise between book |
|
| value
and the fair value estimates. |
|
|
| The
estimated fair value of balance sheet financial instruments are not
significantly different from their |
|
| book
values except for long-term equity investments as disclosed in note 7 to the
accounts. The fair value |
|
| of
long-term equity investments as disclosed in note 7 is based on quoted market
prices as at the date |
|
| of
the balance sheet. |
|
|
| No
change has been made in the classification of equity investment between long
and short term during |
|
| the
current accounting period. Management intends to hold these investments for a
long-term period and |
|
| considers
the decline in market value temporary. Therefore no additional provision is
considered neces- |
|
| sary. |
|
|
| 35. GENERAL |
|
|
| 35.1
Figures have been rounded off to the nearest rupee. |
|
| 35.2
Previous year's figures have been rearranged wherever necessary for the
purpose of comparison. |
|
|
|
Khurshid Hadi |
|
Zaigham Mehmood Rizvi |
|
|
Chairman / Chief Executive |
|
Director |
|
|
|
| PATTERN
OF SHAREHOLDING |
|
|
| NO. OF |
HEAVING
SHARES |
SHARES |
PERCENTAGE |
|
| SHAREHOLDERS |
FROM |
TO |
HELD |
|
|
| 116 |
1 |
100 |
10,880 |
0.0398 |
|
| 1211 |
101 |
500 |
583000 |
2.1372 |
|
| 372 |
501 |
1000 |
365600 |
1.3402 |
|
| 263 |
1001 |
5000 |
718920 |
2.6355 |
|
| 53 |
5001 |
10000 |
428800 |
1.5719 |
|
| 15 |
10001 |
15000 |
188600 |
0.6913 |
|
| 11 |
15001 |
20000 |
194400 |
0.7126 |
|
| 2 |
20001 |
25000 |
45500 |
0.1667 |
|
| 2 |
25001 |
30000 |
53800 |
0.1972 |
|
| 2 |
30001 |
35000 |
69000 |
0.2529 |
|
| 2 |
35001 |
40000 |
79800 |
0.2925 |
|
| 1 |
40001 |
45000 |
43700 |
0.1602 |
|
| 1 |
45001 |
50000 |
46900 |
0.1719 |
|
| 1 |
50001 |
55000 |
51300 |
0.1880 |
|
| 1 |
55001 |
60000 |
57900 |
0.2122 |
|
| 2 |
95001 |
100000 |
200000 |
0.7331 |
|
| 1 |
105001 |
110000 |
110000 |
0.4032 |
|
| 1 |
110001 |
115000 |
114400 |
0.4193 |
|
| 1 |
115001 |
120000 |
117000 |
0.4289 |
|
| 1 |
125001 |
130000 |
126500 |
0.4637 |
|
| 1 |
145001 |
150000 |
147000 |
0.5388 |
|
| 2 |
190001 |
195000 |
384500 |
1.4095 |
|
| 1 |
335001 |
340000 |
336000 |
1.2317 |
|
| 1 |
365001 |
370000 |
365200 |
1.3387 |
|
| 1 |
395001 |
400000 |
400000 |
1.4663 |
|
| 1 |
500001 |
505000 |
500500 |
1.8347 |
|
| 1 |
1000001 |
1005000 |
1004000 |
3.6805 |
|
| 1 |
3030001 |
3035000 |
3034000 |
11.1224 |
|
| 1 |
4860001 |
4865000 |
4864134 |
17.8315 |
|
| 1 |
5930001 |
5935000 |
5934900 |
21.7569 |
|
| 1 |
6700001 |
6705000 |
6702000 |
24.5690 |
|
| ----------- |
----------- |
----------- |
----------- |
----------- |
|
| 2071 |
|
27278234 |
100.0000 |
|
| ========== |
|
========== |
========== |
|
|
| CATEGORIES
OF SHAREHOLDERS |
|
| PARTICULARS |
SHAREHOLDERS |
SHAREHOLDING |
PERCENTAGE |
|
| INDIVIDUAL |
|
2008 |
4261600 |
15.6227 |
|
| INVESTMENT
COMPANIES |
3 |
35500 |
0.1301 |
|
| INSURANCE
COMPANIES |
4 |
133500 |
0.4894 |
|
| JOINT
STOCK COMPANIES |
26 |
493900 |
1.8106 |
|
| FINANCIAL
INSTITUTIONS |
17 |
21972734 |
80.5504 |
|
| MODARABAS |
|
7 |
31000 |
0.1136 |
|
| FOREIGN
COMPANIES |
1 |
4000 |
0.0146 |
|
| OTHERS |
|
1 |
5000 |
0.0183 |
|
| NON-RESIDENT
(U.S. $) |
1 |
336000 |
1.2317 |
|
| NON-RESIDENT
(PAK Rs.) |
3 |
5000 |
0.0183 |
|
|
----------- |
----------- |
----------- |
|
| COMPANY
TOTAL |
2071 |
2727834 |
100.0000 |
|
|
========== |
========== |
========== |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
