| Lease Pak Limited |
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| Annual
Report 2000 |
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| CONTENTS |
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| Company
Information |
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| Notice
of Annual General Meeting |
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| Directors'
Report |
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| Auditors'
Report |
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| Balance Sheet |
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| Profit
& Loss Account |
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| Statement
of Changes in Equity |
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| Cash
Flow Statement |
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| Notes
to the Cash Flow Statement |
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| Notes
to the Accounts |
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| Pattern
of Shareholding |
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| COMPANY
INFORMATION |
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| Chairman |
|
Mian Misbah-ur-Rehman |
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| President
& CEO |
M.T. Farooqui |
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| Directors |
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Mr. Abdul Rehman |
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|
Mr. Tariq Rehman |
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Mr. Naveed Masud |
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|
Agha Najeeb Raza |
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|
Mr. Immad Iftikhar Malik |
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|
Mian Assad
Shuja-ur-Rehman |
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| Company
Secretary |
Agha Najeeb Raza |
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| Auditors |
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Ford, Rhodes, Robson,
Morrow |
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Chartered Accountants |
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|
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| Bankers |
|
Allied Bank of Pakistan
Limited |
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|
Albaraka Islamic Bank
B.S.C. (E.C) |
|
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|
Muslim Commercial Bank
Limited |
|
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|
Pak-Libya Holding Company
(Pvt) Limited |
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| Legal Advisor |
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Cornelius Lane &
Mufti Advocates & Solicitors |
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| Share
Registrars |
M/s. Softlink (Pvt)
Limited |
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| Registered
Office & Head Office |
11-C, Main Gulberg,
Lahore |
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Tel: 92 42 576 4631, 576
4641, 575 6358 |
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Fax: 92 42 571 3080 |
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Email:
Iplpak@brain.net.pk |
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| NOTICE
OF ANNUAL GENERAL MEETING |
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| Notice
is hereby given that the 9th Annual General Meeting of Lease Pak Limited will
be held at its Registered Office at |
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| 11-C,
Main Gulberg, Lahore on Saturday, 30 December 2000 at 11:00 a.m. to transact
the following business: |
|
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| 1.
To confirm the minutes of the 8th Annual General Meeting held on 23 December
1999. |
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|
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| 2.
To receive and adopt the audited accounts of the Company for the year ended
30th June, 2000 together with |
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| Directors'
and Auditors' Report thereon. |
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|
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| 3.
To appoint auditors of the Company for the year 2000-2001 and fix their
remuneration. The present auditors M/s |
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| Ford,
Rhodes, Robson, Morrow, Chartered Accountants retire and being eligible offer
themselves for re-appointment. |
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|
|
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| 4.
To transact any other business with the permission of the Chair. |
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|
By Order of the Board |
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| Lahore: |
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|
Agha Najeeb Raza |
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| Date:
December 7, 2000 |
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(Company Secretary) |
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| NOTES: |
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| 1.
The share transfer books of the Company will remain closed from December 24,
2000 to December 30, 2000 |
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| (both
days inclusive) |
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|
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| 2.
A member of the company entitled to attend and vote may appoint another
member as his/her proxy to attend |
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| and
vote instead of him/her, proxies must be received at the Registered office of
the Company not less than 48 |
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| hours
before the time of holding the meeting. |
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|
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| 3.
Members are advised to lodge shares at the office of our Registrar M/s.
Softlink (Pvt) Limited, Wings Arcade, 1-K |
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| (commercial),
Model Town, Lahore. |
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|
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| 4.
Members are requested to notify any change in their address immediately to
the share Registrar of the Company. |
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| DIRECTORS'
REPORT |
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| The
Directors have pleasure in presenting the audited accounts for the financial
year ended 30 June, 2000. |
|
|
| Operating
Performance |
|
| The
overall success during the period has been modest. As expected the company
earned only a nominal |
|
| operating
profit. The prudent policy of providing sufficient cushion for non-performing
lease assets and for |
|
| diminution
in the market value of equities portfolio resulted in a loss of Rs. 4.85
million. This loss is however |
|
| offset
with the revaluation reserve created on another asset of the company, which
has been put up for sale |
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| subsequent
to the finalization of the balance sheet for the financial year. |
|
|
| The
company during the year further consolidated its core leasing business. It
launched a new product for |
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| lease
financing of automobiles for consumers in varied income groups. The initial
response to this product |
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| was
strong, though its potential could only be partially realized due to the
paucity of funds. Still, the net |
|
| investment
in lease finance registered a reduction of only 32 million rupees as compared
with 103 million |
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| rupees
over the previous year. The company managed to disburse Rs. 91 million in the
year under review as |
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| compared
to Rs. 22 million in previous year. |
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|
| Resource
Mobilization |
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| The
company realizes that any growth or indeed the maintenance of present asset
base, depends on securing |
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| fresh
credit lines. Lease Pak is exploring new avenues for resource mobilization. A
step forward has been |
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| taken
towards this goal by signing a letter of Mandate to raise funds through a
medium term TFC. |
|
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| Pending
the TFC, the company secured some fresh credit at competitive rates thus
further reducing its average |
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| cost of funds. |
|
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| Future Outlook |
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| The
overall spreads of the leasing industry have been adversely affected by the
slowdown in business and |
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| investment
activity in the country coupled with the conservative approach to lend by the
banks and other |
|
| financial
institutions. The companies that can weather the storm are those with a
larger capital base, established |
|
| clientele,
availability of credit lines at low cost and an assurance to offer quality
service. |
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| The
primary focus of Lease Pak is Small and Medium Enterprises (SMEs) and vehicle
lease to consumers. Lease |
|
| Pak
team is geared to analyze and select quality lease opportunities. Recently,
Lease Pak launched vehicle |
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| lease
product under the brand name of smartcar. The product is highly attractive
and ensures a better return |
|
| when
compared with the lease business in other sectors. The company foresees that
the trend would be |
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| continued
with the availability of long to medium term funds for which a step ahead has
been taken. |
|
|
| The
company's survival strategy revolves around a proactive search for a possible
merger with a comparable |
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| company
in the foreseeable future. |
|
|
| Acknowledgements: |
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| We
would like to acknowledge our deep appreciation to the various financial
institutions and individuals who |
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| have
extended helping hand in' our resource mobilization effort. |
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For and on behalf of the Board of Directors |
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|
M. T. Farooqui |
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|
President & CEO |
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| AUDITORS'
REPORT TO THE MEMBERS |
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| We
have audited the annexed balance sheet of Lease Pak Limited as at June 30, 2000 and the related profit |
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| and
loss account, cash flow statement and statement of changes in equity together
with the notes forming part |
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| thereof,
for the year then ended and we state that we have obtained all the
information and explanations which, |
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| to
the best of our knowledge and belief, were necessary for the purposes of our
audit. |
|
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| It
is the responsibility of the company's management to establish and maintain a
system of internal control, |
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| and
prepare and present the above said statements in conformity with the approved
accounting standards and |
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| the
requirements of the Companies Ordinance, 1984. Our responsibility is to
express an opinion on these |
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| statements
based on our audit. |
|
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| We
conducted our audit in accordance with the auditing standards as applicable
in Pakistan. These standards |
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| 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 include
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 - |
|
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| (a)
in our opinion, proper books of accounts have been kept by the company as
required by the |
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| Companies
Ordinance, 1984; |
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|
|
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| (b)
in our opinion - |
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|
|
|
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| i)
the balance sheet and profit and loss account together with the notes thereon
have |
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| been
drawn up in conformity with the Companies Ordinance, 1984, and are in |
|
| agreement
with the books of accounts 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 |
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|
|
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| iii)
the business conducted, investments made and the expenditure incurred during
the year were in |
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| 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 |
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| 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 |
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| state
of the company's affairs as at June 30, 2000 and of the loss its cash flow
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 |
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|
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|
Ford, Rhodes, Robson, Morrow |
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| Lahore
- 27 November 2000 |
|
Chartered Accountants |
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| BALANCE
SHEET AS AT JUNE 30, 2000 |
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|
Notes |
2000 |
1999 |
|
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|
Rupees |
Rupees |
|
|
|
| Capital
and Liabilities |
|
|
|
| Share
Capital and Reserves |
|
|
| Authorised
capital |
|
| 30,000,000
(1999: 30,000,000) |
|
| ordinary
shares of Rs. 10/- each |
|
300,000,000 |
300,000,000 |
|
|
|
========== |
========== |
|
|
|
|
| Issued,
subscribed and paid-up capital |
|
133,201,800 |
133,201,800 |
|
|
| Reserves |
|
|
|
| Capital reserve |
|
4 |
7,639,000 |
7,639,000 |
|
| Reserve
for contingencies |
|
5 |
6,500,000 |
6,500,000 |
|
| Unappropriated
(loss) |
|
|
(46,343,053) |
(41,493,012) |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
(32,204,053) |
(27,354,012) |
|
|
| Surplus
on revaluation of fixed assets |
6 |
8,486,782 |
-- |
|
| Redeemable
capital |
|
7 |
10,000,000 |
20,000,000 |
|
| Long
term loans |
|
8 |
86,382,459 |
90,905,940 |
|
| Obligation
against assets |
|
|
|
|
| subject
to finance lease |
|
9 |
2,024,837 |
1,646,764 |
|
| Deposit
on lease contracts |
|
10 |
63,275,590 |
60,595,517 |
|
| Deferred
liability |
|
11 |
8,900,000 |
9,334,550 |
|
|
|
|
|
| Current
liabilities |
|
| Current
maturity of redeemable capital |
|
36,220,000 |
68,920,000 |
|
| Current
maturity of long term loans |
|
31,855,239 |
25,999,947 |
|
| Current
maturity of obligations against |
|
| assets
subject to finance lease |
|
|
1,328,942 |
985,506 |
|
| Current
maturity of deposits on lease contract |
|
17,536,082 |
13,542,962 |
|
| Short
term certificates of investment |
12 |
30,000,000 |
30,250,000 |
|
| Short
term finances |
|
13 |
37,550,000 |
40,234,644 |
|
| Accrued
and other liabilities |
|
14 |
28,413,621 |
41,616,608 |
|
| Unclaimed
dividend |
|
|
168,149 |
168,552 |
|
| Income
tax payable |
|
|
263,493 |
195,942 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
183,335,526 |
221,914,161 |
|
|
|
|
| Contingencies
and Commitments |
|
15 |
-- |
-- |
|
|
|
|
|
------------------ |
------------------ |
|
|
|
463,402,941 |
510,244,720 |
|
|
|
========== |
========== |
|
|
| Property
and Assets |
|
|
|
| Tangible
Fixed Assets |
|
16 |
23,534,218 |
13,617,020 |
|
| Net
Investment in Lease Finance |
|
17 |
|
| Minimum
lease payments receivable |
|
341,330,764 |
384,481,044 |
|
| Add:
Residual value |
|
|
83,946,599 |
80,736,671 |
|
|
|
|
------------------ |
------------------ |
|
| Gross
lease payments receivable |
|
|
425,277,363 |
465,217,715 |
|
| Less:
Unearned finance income |
|
|
98,303,091 |
106,045,400 |
|
|
|
|
------------------ |
------------------ |
|
| Net
investment in lease finance |
|
|
326,974,272 |
359,172,315 |
|
| Less:
Current maturity of net investment in lease finance |
146,765,330 |
116,118,883 |
|
| Less:
Provision for doubtful receivables |
|
3,251,570 |
3,534,436 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
176,957,372 |
239,518,996 |
|
|
|
| Long
Term Investments |
|
18 |
17,119,326 |
22,723,445 |
|
| Long
Term Advances |
|
19 |
150,888 |
78,995 |
|
| Long
Term Deposits and |
|
|
|
| Deferred Costs |
|
20 |
4,996,361 |
2,259,687 |
|
|
|
|
|
| Current Assets |
|
|
|
| Current
maturity of net investment in lease finance |
17.2 |
145,496,159 |
115,474,160 |
|
| Short
term finance - considered good |
21 |
37,267,597 |
40,300,000 |
|
| Advances,
deposits, prepayments |
|
|
|
| and
other receivables |
|
22 |
32,202,088 |
52,062,947 |
|
| Short
term investments |
|
23 |
-- |
1,000,100 |
|
| Accrued income |
|
24 |
18,278,960 |
22,365,037 |
|
| Cash
and bank balances |
|
25 |
7,399,972 |
844,333 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
240,644,776 |
232,046,577 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
463,402,941 |
510,244,720 |
|
|
|
========== |
========== |
|
|
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
Chief Executive |
|
Director |
|
|
|
| PROFIT
AND LOSS ACCOUNT |
|
| FOR
THE YEAR ENDED JUNE 30, 2000 |
|
|
|
|
|
|
Notes |
2000 |
1999 |
|
|
|
|
Rupees |
Rupees |
|
|
| Revenue |
|
|
|
|
|
| Income
from leasing operations |
|
26 |
55,064,827 |
77,024,493 |
|
|
| Income
from bank deposits |
|
|
276,236 |
75,455 |
|
|
| Income
on long term investments |
|
27 |
2,384,130 |
858,858 |
|
|
| Other income |
|
|
28 |
1,108,995 |
5,961,010 |
|
|
|
|
|
------------------ |
------------------ |
|
|
|
58,834,188 |
83,919,816 |
|
|
|
|
|
|
| Expenditure |
|
|
|
|
|
| Return
on borrowings and financial charges |
29 |
43,942,290 |
66,172,035 |
|
|
| Administrative
and operating expenses |
30 |
13,953,974 |
18,018,653 |
|
|
| Amortization
of deferred costs |
|
20.1 |
-- |
284,937 |
|
|
|
|
|
57,896,264 |
84,475,625 |
|
|
|
|
|
------------------ |
------------------ |
|
|
| (Loss)/profit
before provisions and tax |
|
937,924 |
(555,809) |
|
|
|
|
|
------------------ |
------------------ |
|
|
| Provision
for diminution in value of shares |
|
2,324,200 |
15,451,070 |
|
|
|
|
|
------------------ |
------------------ |
|
|
| Provision
for doubtful debts |
|
|
2,563,765 |
15,455,369 |
|
|
|
4,887,965 |
30,906,439 |
|
|
|
------------------ |
------------------ |
|
|
| (Loss)
Before Tax |
|
(3,950,041) |
(31,462,248) |
|
|
|
|
|
|
| Provision
for Taxation |
|
| - Current Year |
|
|
900,000 |
1,175,000 |
|
| - Deferred Tax |
|
|
-- |
8,900,000 |
|
|
|
900,000 |
10,075,000 |
|
|
|
------------------ |
------------------ |
|
| (Loss)
After Tax |
|
(4,850,041) |
(41,537,248) |
|
|
|
------------------ |
------------------ |
|
| (Accumulated
Loss) Brought Forward |
|
(41,493,012) |
44,236 |
|
|
|
|
------------------ |
------------------ |
|
| (Accumulated
Loss) Carried Forward |
|
(46,343,053) |
(41,493,012) |
|
|
========== |
========== |
|
| Earning
Per Share in Rupees |
|
31 |
(0.36) |
(3.12) |
|
|
========== |
========== |
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
Chief Executive |
|
Director |
|
|
|
|
| STATEMENT
OF CHANGES IN EQUITY |
|
| FOR
THE YEAR ENDED JUNE 30, 2000 |
|
|
|
|
Reserve |
Unappro- |
|
|
|
Share |
Capital |
for |
priated |
|
|
|
Capital |
Reserve |
contingencies |
Profit |
Total |
|
|
|
|
|
|
|
Rupees |
|
|
|
|
| Balance
as on July 01, 1998 |
133,201,800 |
7,639,000 |
6,500,000 |
44,236 |
147,385,036 |
|
| Net
Profit for the year |
-- |
-- |
-- |
(41,537,248) |
(41,537,248) |
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
| Balance
as on June 30, 1999 |
133,201,800 |
7,639,000 |
6,500,000 |
(41,493,012) |
105,847,788 |
|
| Net
Profit for the year |
-- |
-- |
-- |
(4,850,041) |
(4,850,041) |
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
| Balance
as on June 30, 2000 |
133,201,800 |
7,639,000 |
6,500,000 |
(46,343,053) |
100,997,747 |
|
|
|
========== |
========== |
========== |
========== |
========== |
|
|
|
| CASH
FLOW STATEMENT |
|
| FOR
THE YEAR ENDED JUNE 30, 2000 |
|
|
|
|
Notes |
2000 |
1999 |
|
|
|
Rupees |
Rupees |
|
|
| Net
cash from operating activities |
|
A |
10,856,212 |
(65,957,173) |
|
|
| Cash
Flow From Investing Activities |
|
| Purchase
of fixed assets |
|
|
(3,274,395) |
(484,950) |
|
| Sale
proceeds on disposal of fixed assets |
|
614,300 |
493,711 |
|
| Investment
in lease finance |
|
|
(91,182,308) |
(21,593,970) |
|
| Repayment
of investment in lease finance |
|
123,380,351 |
1 24,734,021 |
|
| Long
term investments |
|
|
3,279,919 |
(751,262) |
|
| Long
term advances - disbursed |
|
|
(189,500) |
(152,898) |
|
| Long
term advances -,recovered |
|
|
704,436 |
474,777 |
|
| Long
term deposits & deferred cost |
|
(3,659,890) |
(1,212,908) |
|
|
|
|
------------------ |
------------------ |
|
| Net
cash from investing activities |
|
|
29,672,913 |
101,506,521 |
|
|
| Cash
Flow from Financing Activities |
|
| Redeemable
capital |
|
|
(42,700,000) |
(14,300,000) |
|
| Long term loan |
|
|
1,331,811 |
(18,242,780) |
|
| Obligation
under finance lease- acquired |
|
2,128,000 |
325,000 |
|
| Obligation
under finance lease- repaid |
|
(1,406,490) |
(1,596,195) |
|
| Marginal
deposit on lease arrangements |
|
14,680,549 |
6,173,171 |
|
| Marginal
deposit on lease arrangements - adjusted |
|
(8,007,356) |
(9,469,689) |
|
|
|
|
------------------ |
------------------ |
|
| Net
cash used in financing activities |
|
(33,973,486) |
(37,110,493) |
|
|
|
|
------------------ |
------------------ |
|
| Net
(decrease)/increase in cash and cash equivalents |
6,555,639 |
(1,561,145) |
|
|
| Cash
and cash equivalents at the beginning of the year |
B |
844,333 |
2,405,478 |
|
|
|
|
------------------ |
------------------ |
|
| Cash
and cash equivalents at the end of the year |
B |
7,399,972 |
844,333 |
|
|
|
========== |
========== |
|
|
|
|
Chief Executive |
|
Director |
|
|
|
| NOTES
TO THE CASH FLOW STATEMENT |
|
| FOR
THE YEAR ENDED JUNE 30, 2000 |
|
|
|
|
|
2000 |
1999 |
|
|
|
|
Rupees |
Rupees |
|
|
|
| A-Cash
Flow from Operating Activities |
|
| Net
(loss)/profit before tax |
|
|
(3,950,041) |
(31,462,248) |
|
|
|
|
|
|
| Adjustments
for: |
|
|
|
|
| Depreciation |
|
|
1,599,120 |
1,635,368 |
|
| loss/(Gain)
on disposal of fixed assets |
|
(369,441) |
170,711 |
|
| Solid
Waste Management Project Expenses |
|
-- |
2,083,620 |
|
| Provision
for doubtful debts |
|
|
2,563,765 |
15,455,369 |
|
| Provision
for permanent diminution |
|
| against
long term investments |
|
|
2,324,200 |
15,310,313 |
|
| Provision
for gratuity |
|
|
-- |
1 76,811 |
|
| Reversal
of provision for gratuity |
|
|
-- |
(1 77,876) |
|
| Amortization
of deferred costs |
|
|
923,216 |
4,643,488 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
7,040,860 |
39,297,804 |
|
|
|
|
------------------ |
------------------ |
|
| Operating
profit before working capital changes |
|
3,090,819 |
7,835,556 |
|
|
|
| (Increase)/decrease
in: |
|
| Short
term finance |
|
|
3,032,403 |
(5,000,000) |
|
| Advances,
deposits, prepayments and |
|
|
|
| other
receivables |
|
|
17,051,846 |
(25,063,851) |
|
| Short
term investments |
|
|
1,000,100 |
-- |
|
| Accrued income |
|
|
4,086,077 |
(8,022,613) |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
25,170,426 |
(38,086,464) |
|
| Increase/(decrease)
in: |
|
| Short
term certificates of investment |
|
(250,000) |
(14,750,000) |
|
| Short
term finance |
|
|
(2,684,644) |
(39,116,612) |
|
| Accrued
and other liabilities |
|
|
(13,202,987) |
