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International Multi Leasing Corporation Limited
Annual Report 2000
CONTENTS
Corporate Information
Notice of Annual General Meeting
Directors' Report
Auditors' Report to the Members 
Balance Sheet as at June 30, 2000
Profit & Loss Account for the year ended June 30, 2000 
Cash Flow Statement for the year ended June 30, 2000 
Statement of Changes in Equity for the year ended June 30, 2000
Notes to the Accounts
Pattern of Shareholding as at June 30, 2000 
CORPORATE INFORMATION
Board of Directors
Sh. Amjad Rashid Director
Mr. Muhammad Arshad Naeem Director
Sh. Atif Rashid Director
Mr. Muhammad Toufique Amdani Director
Mr. Muhammad Sarwar Sh. Director
Mr. Arshad A'la Syed Director ICP-Nominee
Mr. Muhammad Rafiq Chief Executive / Director
Company Secretary
Mr. Fazal H. Rizwan
Auditors
M/s Ford, Rhodes,' Robson, Morrow
Chartered Accountant
Bankers & Lending Institutions
Allied Bank of Pakistan Limited
National Development Finance Corporation
Habib Bank AG Zurich
Metropolitan Bank Limited
Bank of Punjab
Legal Advisor
Bokhari Aziz & Karim
Advocates & Solicitors
Registrars & Share Transfer Office
Software (Pvt) Limited
5/79, Usman Block,
New Garden Town, Lahore.
Phone: 5865794-5
Registered Office & Head Office
2nd Floor, 89-C,
Jail Road, Lahore.
(042) 7586235-6
(042) 7586234
imlcpk@brain.net.pk
Karachi Office
1106-1110 Kashif Centre,
Shahrah-e-Faisal, Karachi.
Tel: (021) 5662054
Fax:    (021) 5683010
NOTICE OF ANNUAL GENERAL MEETING
Notice is hereby given that the Tenth Annual General Meeting of the shareholders of INTERNATIONAL MULTI
LEASING CORPORATION LIMITED will be held on Monday, November 27, 2000, at 11 a.m. at its Registered
Office at 2nd Floor, 89-C, Jail Road, Lahore, to transact the following business:
Ordinary Business
1. To confirm the Minutes of the Extra Ordinary General Meeting held on October 21, 2000.
2. To receive, consider and adopt the Audited Accounts for the year ended June 30, 2000, together with Directors'
and Auditors' Report thereon.
3. To appoint auditors and fix their remuneration. The present auditors M/s Ford, Rhodes, Robson, Morrow,
Chartered Accountants, retire and being eligible offer themselves for re-appointment.
4. Any other business with the permission of the Chair.
BY ORDER OF THE BOARD
2nd floor, 89-C, Jail Road, Lahore Fazal H. Rizwan
November 4, 2000 Company Secretary
NOTES:
1. The Share Transfer Books of the Company will remain closed from November19, 2000, to November 27,
2000. (both days inclusive).
2. A member eligible to attend and vote at this meeting may appoint another member as his / her proxy to attend
and vote instead of him/her. Proxies in order to be effective must be received by the company at the Registered
Office not less than 48 hours before the time for holding the meeting.
3. An individual beneficial owner of CDC, entitled to attend and vote at this meeting, must bring his / her original
NIC or Passport to provide his / her identity, in case of proxy must enclose an attested copy of his / her NIC
or Passport. In case of institution being the beneficial owner, notarially certified copy of the power of attorney
or other authority, together with the proof of identity of such nominee, is required for admittance to the meeting.
4. Shareholders are requested to notify the change of address, if any, to Registrars, M/s Software (Pvt) Limited,
5/79 Usman Block, New Garden Town, Lahore. Telephone 5865794-5.
DIRECTORS' REPORT
The directors are pleased to present their 10th Annual Report together with the Audited Accounts of INTERNATIONAL
MULTI LEASING CORPORATION LIMITED for the year ended June 30, 2000.
Financial Results Rupees
Income from Operation 23,906,425
EXPENDITURE
Administrative and operating expenses 14,558,339,339
Financial charges 4,537,431
19,095,770
Net profit before tax 4,810,655
Less: Taxation 300,000
Profit after tax 4,510,655
Unappropriated Profit Brought Forward 17,078,545
Profit available for Appropriations 21,589,200
Appropriations
Transfer to Capital reserve - Statutory Reserve 902,131
Transfer to Capital reserve - Deferred Taxation 600,000
----------
1,502,131
==========
Unappropriated Profit Carried Forward 20,087,069
Operating Results
The year under review was a difficult year due to economic and political uncertainty in the country. Leasing operations
were adversely affected due to declining opportunities for investments and increase in the operating costs. However,
your company managed to maintain the pattern of profitability and earned a net profit before tax of Rs. 4.810 million
while gross investment in leases stood at Rs. 133.216 million. In line with its declared policy, the company followed
its lending practices by diversifying its exposure and concentrating on small leases instead of big ones. Its portfolio
is evenly spread and the recovery of lease rentals was also satisfactory.
Economy
The economy during the year under review was characterized by ups and downs, and expectations and apprehensions.
At the end of fiscal year 1999-2000, a number of favourable developments did emerge. The GDP growth rate improved
mainly due to excellent performance of the agriculture sector. The exports also registered increase and went up to $
8.50 billion from approximately $ 8.00 billion during the previous year. Despite above the industrial performance had
been very poor. The government has declared the recovery of economy as its foremost important priority. The seriousness
of the government can be gauged from the fact that it had remained firm to document economy despite stiff resistance
from the trading community. It is expected that with the implementation of the government's economy recovery
plan, revival will soon be witnessed.
Auditors
The Auditors M/s Ford, Rhodes, Robson, Morrow Chartered Accountants, retire and offer themselves for reappointment.
Pattern of Shareholding
The pattern of shareholdings as On June 30, 2000 is enclosed in the Annual Report.
Staff
The Directors are pleased to place on record their appreciation for the hard work and dedicated efforts of all the staff
members.
On behalf of Board
Lahore Muhammad Rafiq
October 21, 2000 Chief Executive
AUDITORS' REPORT TO THE MEMBERS
We have audited the annexed balance sheet of INTERNATIONAL MULTI 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 oŁ 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 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 -
(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 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
iii) the business conducted, investments made and the expenditure incurred during the year were
in accordance with the objects of the company;
(c) in our opinion and to the best of our information and according to the explanations given to us, the
balance sheet, profit and loss account, cash flow statement and statement of changes in equity together
with the notes forming part thereof conform with approved accounting standards as applicable in
Pakistan, and, give the information required by the Companies Ordinance, 1984, in the manner so
required and respectively give a true and fair view of the state of the company's affairs as at June
30, 2000 and of the profit its cash flow and changes in equity for the year then ended; and
(d) in our opinion, Zakat deductible at source under the Zakat and Ushr Ordinance, 1980 (XVIII of 1980),
was deducted by the company and deposited in the Central Zakat Fund established under section 7
of the Ordinance.
Lahore Ford, Rhodes, Robson, Morrow
October 21, 2000 Chartered Accountants
BALANCE SHEET
AS AT JUNE 30, 2000
Notes 2000 1999
Rupees Rupees
Tangible fixed assets 3 1,657,488 2,101,738
Investment in lease finance 4
Minimum lease payments receivable 115,141,623 125,601,753
Add: Residual value of leased assets 18,074,410 17,121,383
----------- -----------
Gross lease payment receivable 133,216,033 142,723,136
Less: Un-earned mark-up (22,841,732) (31,619,402)
----------- -----------
Net investment in lease finance 110,374,301 111,103,734
Less: Current maturity (50,525,607) (39,684,383)
----------- -----------
59,848,694 71,419,351
Long term deposits 5 269,500 550,060
Long term investments 6 1,689,540 1,489,540
----------- -----------
63,465,222 75,560,689
Current assets
Short term finance 7 23,900,000 21,498,776
Net investment in lease finance-Current maturity 8 40,735,178 32,237,517
Security deposits - current portion 277,560 348,800
Advances, prepayments and other receivables 9 4,425,230 7,322,326
Cash and bank balances 10 1,307,436 6,730,101
----------- -----------
70,645,404 68,137,520
Current liabilities 11 (31,044,916) (45,500,1351
----------- -----------
Working capital 39,600,488 22,637,385
----------- -----------
Total capital employed 103,065,710 98,198,074
Less: Long term and deferred liabilities
Long term loan - secured 12 -- --
Obligations under finance lease 13 208,617 961,737
Marginal deposits on lease arrangements 14 16,047,199 15,123,538
Deferred liabilities - Gratuity 842,751 656,311
----------- -----------
17,098,567 16,741,586
----------- -----------
Net capital employed 85,967,143 81,456,488
========== ==========
REPRESENTED BY
Share capital 15 54,000,000 54,000,000
Capital reserve - Statutory reserve 16 9,280,074 8,377,943
Capital reserve - Deferred taxation 17 2,600,000 2,000,000
Unappropriated profits 20,087,069 17,078,545
Contingencies and commitments 27 -- --
----------- -----------
85,967,143 81,456,488
========== ==========
The annexed notes form an integral part of these accounts.
Chief Executive Director Director
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED JUNE 30, 2000
Notes 2000 1999
Rupees Rupees
REVENUE
Income from lease operations 18 18,653,669 18,266,752
Other income 19 5,252,756 6,308,534
----------- -----------
23,906,425 24,575,286
EXPENDITURE
Administrative and operating expenses 20 14,558,339 11,518,548
Financial charges 21 4,537,431 5,710,393
----------- -----------
19,095,770 17,228,941
----------- -----------
Profit before tax 4,810,655 7,346,345
Taxation 22 300,000 120,986
----------- -----------
Profit after tax 4,510,655 7,225,359
Unappropriated profit brought forward 17,078,545 18,701,258
----------- -----------
Profit available for appropriation 21,589,200 25,926,617
Appropriations -
Transfer to capital reserve - Statutory reserve 902,131 1,448,072
Transfer to capital reserve - Deferred taxation 600,000 2,000,000
Proposed dividend @ nil (1999: 10%) -- 5,400,000
----------- -----------
1,502,131 8,848,072
----------- -----------
Unappropriated profit carried forward 20,087,069 17,078,545
========== ==========
Earning per share 23 0.84 1.34
========== ==========
The annexed notes form an integral part of these accounts.
Chief Executive Director Director
CASH FLOW STATEMENT
FOR THE YEAR ENDED JUNE 30, 2000
2000 1999
Rupees Rupees
Cash flow from operating activities
Profit before tax 4,810,655 7,346,345
Adjustment for:
Depreciation 809,463 768,649
Profit on disposal of fixed assets (37,921) (142,019)
provision for doubtful debts 4,157,640 1,953,950
Deferred liabilities - Gratuity 322,874 213,758
----------- -----------
5,252,056 2,794,338
----------- -----------
10,062,711 10,140,683
(Increase)/Decrease in current assets
Short term finance (2,401,224) (1,154,505)
Advances, deposits, prepayments and other receivables
(other than provision for doubtful debts) (2,673,454) (462,833)
----------- -----------
(5,074,678) (1,617,338)
Increase/(Decrease) in current liabilities
Current liabilities (4,462,606) 1,514,605
----------- -----------
525,427 10,037,950
Tax paid (1,443,780) (133,143)
Gratuity paid (136,434) --
Dividend paid (5,221,789) --
----------- -----------
Net cash from operating activities and
balance carried forward (6,276,576) 9,904,807
Cash flow from investing activities
Purchase of operating fixed assets (389,654) (1,091,200)
Sale proceeds of fixed assets 62,360 456,000
Net investment in lease finance 729,433 (1,092,906)
Long term deposits 351,800 (240,910)
Marginal deposits on lease arrangements 1,657,527 816,093
Long term investments (200,000) (700,000)
----------- -----------
Net cash used in investing activities 2,211,466 (1,852,923)
Cash flow from financing activities
Long term loans - repayments (400,000) (1,800,000)
Obligations under finance lease -- 645,000
Payment of obligation under finance lease (957,555) (682,257)
----------- -----------
Net cash used in financing activities (1,357,555) (1,837,257)
----------- -----------
Net increase/(decrease) in cash and cash equivalents (5,422,665) 6,214,627
Cash and cash equivalents at the beginning of the year 6,730,101 515,474
----------- -----------
Cash and cash equivalents at the end of the year 1,307,436 6,730,101
========== ==========
Chief Executive Director Director
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED JUNE 30, 2000
Share Statutory Capital Unappropriated profit Total
capital Reserve Reserve Profit for the year
Rupees Rupees Rupees Rupees Rupees Rupees
Balance as at July 01, 1998 54,000,000 6,929,871 -- 18,701,258 -- 79,631,129
Net profit for the year -- -- -- -- 7,225,359 7,225,359
Appropriations
Capital reserve - Statutory reserve -- 1,448,072 -- (1,448,072) --
Capital reserve - deferred taxation -- -- 2,000,000 -- (2,000,000) --
Proposed dividend -- -- -- -- (5,400,000) (5,400,000)
Unappropriated profit -- -- -- ( 1,622,713) 1,622,713 --
------------ ------------ ------------ ------------ ------------ ------------
Balance as at June 30, 1999 54,000,000 8,377,943 2,000,000 17,078,545 -- 81,456,488
Net profit for the year -- -- -- -- 4,510,655 4,510,655
Appropriations
Capital reserve - Statutory reserve -- 902,131 -- -- (902,131 ) --
Capital reserve - Deferred taxation -- -- 600,000 -- (600,000) --
Unappropriated profit -- -- -- -- (3,008,524) --
------------ ------------ ------------ ------------ ------------ ------------
Balance as at June 30, 2000 54,000,000 9,280,074 2,600,000 20,087,069 -- 85,967,143
========== ========== ========== ========== ========== ==========
Chief Executive Director Director
NOTES TO THE ACCOUNTS
FOR THE YEAR ENDED JUNE 30, 2000
1. THE COMPANY AND ITS OPERATIONS
The Company was incorporated in Pakistan as a public limited company on April 25, 1990 and is listed on
the Lahore, Karachi and Islamabad Stock Exchanges. The Company is engaged in the business of lease
financing.
2. SIGNIFICANT ACCOUNTING POLICIES
2.1 Accounting convention
The financial statements are prepared under the historical cost convention.
2.2 Tangible fixed assets and depreciation
Own
Fixed assets for own use are stated at cost less accumulated depreciation. Depreciation on these assets
is calculated applying the straight line method whereby the cost of assets is written off over their
estimated useful lives.
Full year's depreciation is charged in the year of addition and no depreciation is charged in the year
of deletion.
Repairs and maintenance costs are expensed out as and when incurred. However, major betterments
are capitalized. Gain/(Loss) on disposal of fixed assets is taken to income currently.
Leased
Leased assets held under finance lease are stated at cost less accumulated depreciation at the rates and
basis applicable to company owned assets. The outstanding obligations under the lease less finance
charges allocated to future periods are shown as liability. The finance charges are calculated at the
interest rate implicit in the lease and are charged to profit and loss account.
2.3 Employees' retirement benefits
The Company operates a recognized contributory provident fund for all its permanent employees and
contributions are made by Company and the employees in accordance with the employment rules.
An unapproved gratuity scheme is adopted by the company for those employees who have completed
specified period of continuous service with the company. Provision has been made to cover the
obligation.
2.4 Deferred costs
Deferred costs if any, are written off over a period of five years from the year of incurrence.
2.5 Investments
These are stated at average cost. However, average cost is reduced to recognize any decline thereof,
other than temporary. Profit or loss on sale of investment is taken to income currently.
2.6 Revenue Recognition
The Company recognizes all leases including hire purchase contracts of financing nature as finance
leases. Accordingly, the excess of aggregate lease rentals over the net investments in the cost of leased
assets is deferred and amortized to income over the term of the lease according to the annuity method.
Front end fees, lease document fees, commitment and other charges are taken to income on receipt
basis. Other income is accounted for when it becomes receivable.
Mark-up earned on finance under musharika agreement is recognized on a time proportion basis.
Profit on Modaraba Certificates is recognized on receipt basis.
Income on government securities is recognized by prorata accruals and / or coupon rate applicable.
2.7 Taxation
Current tax provision is based on profits as adjusted for tax purposes after taking into account all
available allowances and credits.
Deferred tax is accounted for by using liability method on all major timing differences excluding those
that are not likely to reverse in foreseeable future. However, as a matter of prudence, the company has
decided to provide for each year, a part of its estimated deferred tax liability in order to conform with
the requirements of the revised International Accounting Standard 12 "Accounting for taxes on Income"
by January 01,2001 i.e. effective date for compulsory compliance thereof.
2.8 Provision for doubtful receivables
Provision for doubtful receivables is made as required by SPB's Rules of Business (Prudential
Regulation) and which, in the judgment of the management, is sufficient to provide for any potential
lease losses.
3. TANGIBLE FIXED ASSETS
OWNED ASSETS
Accumulated Book Value
C O S T Depreciation as at DEPRECIATION
July 01, Additions/ June 30, June 30, June 30, Charge for Rate
Particulars 1999 (Deletions) 2000 2000 2000 the year %
(Rupees)
Leasehold improvements 1,124,287 -- 1,124,287 1,124,287 -- -- 15
Furniture & fixtures 473,560 77,497 551,057 386,134 164,923 50,341 10-15
Computers 741,336 6,500 747,836 691,482 56,354 72,667 20
Office and Electric
equipments 1,111,556 232,202 1,235,204 1,024,999 210,205 62,942 15
(108,554)
Vehicles (Note: 3.1) 325,084 1,312,247 1,592,247 1,114,524 477,723 70,691 20
(45,084)
------------ ------------ ------------ ------------ ------------ ------------
3,775,823 1,628,446 5,250,631 4,341,426 909,205 256,641
(153,638)
ASSETS SUBJECT TO
FINANCE LEASE
Vehicles 2,764,122 (1,238,792) 1,525,330 777,047 748~283 552,824 20
------------ ------------ ------------ ------------ ------------ ------------
6,539,945 1,628,446 6,775,961 5,118,473 1,657,488 809,465
(1,392,430)
========== ========== ========== ========== ========== ==========
1999 6,429,715 1,428,965 6,539,945 4,438,207 2,101,738 768,649
(1,318,735)
========== ========== ========== ========== ========== ==========
3.1 These include assets costing Rs. 1,238,792 having accumulated depreciation of Rs. 987,833 transferred from
assets subject to finance lease to owned assets.
3.2 Detail of fixed assets sold during the year
particulars Cost Book Sale Profit/ Mode Particulars of
Value Proceeds (Loss) of sale purchaser
(Rupees)
Motor Cycle
Lox-963 45,084 9,017 15,000 5,983 Negotiation Mrs. Ireen Munnawar Jhon
Model 1995 Lahore
Generator 34,154 13,662 25,600 11,938 Insurance Claim New Jubilee Insurance Co.
EP-2500 Genset Lahore
1995 -96
Xerox Photocopier 62,000 -- 20,000 20,000 Trade off Sherazi Trading Co. (Pvt.) Ltd.
Drum RX 5014 8,000 Lahore
1991-92
Calculator 4,400 1,760 1,760 -- Negotiation Mr. Khalid Mahmood
HP-12c Ex-Company Secretary
3.3  No assets were sold to Chief Executive, Directors, Executives or Shareholders with more than 10% of paid-up capital.
2000 1999
Rupees Rupees
4. INVESTMENT IN LEASE FINANCE
4.1 Minimum Lease payments Receivable
Less than one year 50,701,397 49,290,396
More than one year and less than five years 64,440,226 76,311,357
More than five years -- --
----------- -----------
115,141,623 125,601,753
========== ==========
4.2 Gross Lease Payments Receivable
Less than one year 55,182,602 53,162,988
More than one year and less than five years 78,033,431 89,560,148
More than five years -- --
----------- -----------
133,216,033 142,723,136
========== ==========
4.3 Net Investment in Lease Finance
Less than one year 50,525,607 39,684,383
More than one year and less than five years 59,848,694 71,419,351
More than five years -- --
----------- -----------
110,374,301 111,103,734
========== ==========
5. LONG TERM DEPOSITS
Deposit with commercial bank (Note 5.1) 100,000 100,000
Security deposit with leasing companies 242,060 590,860
----------- -----------
342,060 690,860
Less: Current portion (277,560) (348,800)
Other deposits 205,000 208,000
----------- -----------
269,500 550,060
========== ==========
5.1 This deposit has been made with Habib Bank Limited under the Prime Minister National Debts
Retirement Program as a Qarz-e-Hasna for a period of two years.
6. LONG TERM INVESTMENTS
Listed company -
First Hajveri Modaraba (Note 6.1) 500,000 500,000
Less: Provision for diminution in value (260,460) (260,460)
----------- -----------
239,540 239,540
Government Securities - (Note 6.2)
Federal Investment Bonds 250,000 50,000
Special Saving Certificates 1,200,000 1,200,000
----------- -----------
1,689,540 1,489,540
========== ==========
6.1 This consists of 68,440 (1999: 68,440) Modaraba certificates of Rs. 10/- each in First Hajveri Modaraba
including 18,440 bonus modaraba certificates of Rs. 10/- each. The market value of these certificates
as on balance sheet date was Rs. 376,420- (1999: Rs. 307,980).
6.2 These investments have been made to comply with SBP's Rules of Business (prudential Regulations)
for Non-Banking Financial Institutions. The mark-up receivable on FIBs is 15% per annum and on
Special Saving Certificate it is 14% to 18% per annum.
2000 1999
Rupees Rupees
7. SHORT TERM FINANCE - SECURED, CONSIDERED GOOD
Finance under musharika arrangements (Note: 7.1 ) 23,900,000 21,498,776
========== ==========
7.1 It is provided against promissory notes, personal guarantee of directors and hypothecation of stock.
The expected rate of profit ranges from 19% to 23% per annum.
8. NET INVESTMENT IN LEASE FINANCE -CURRENT MATURITY
Current portion of investment in lease finance 50,525,607 39,684,383
Less: provision for doubtful receivable 9,790,429 7,446,866
----------- -----------
40,735,178 32,237,517
========== ==========
9. ADVANCES, PREPAYMENTS AND OTHER RECEIVABLES
Advances to employees - Considered good (Note: 9. I) 596,743 556,820
Advances to suppliers 215,000 215,000
Less: Provision for doubtful advances (215,000) 215,000
-- --
Income tax receivable -- 3,756,473
Prepayments 137,446 143,137
Accrued mark-up (Note: 9.2) 3,016,186 2,619,418
Accrued income 177,213 35,000
Other receivables 497,642 211,478
----------- -----------
4,425,230 7,322,326
========== ==========
9.1 These include advance to executives amounting to Rs. 334,964 (1999: Rs. 363,704). Maximum amount
outstanding at the end of any month against advance to executives is Rs. 397,552 (1999: Rs. 428,640).
9.2 Accrued mark-up
Unrealized mark-up on lease operation 3,989,112 1,676,945
Mark-up on short term finances 2,261,825 2,363,147
----------- -----------
6,250,937 4,040,092
Less: Provision for unrealized mark-up 3,234,751 1,420,674
----------- -----------
3,016,186 2,619,418
========== ==========
10. CASH AND BANK BALANCES
Cash at bank - Deposit account 115,000 115,000
- PLS saving account 2,038 2,038
- Current accounts 1,174,735 6,610,400
Cash in hand 15,663 2,663
----------- -----------
1,307,436 6,730,101
========== ==========
10.1 It includes an interest free deposit of Rs. 115,000 (1999: Rs. 115,000) maintained with State Bank of
Pakistan under Rule 6 of SBP's Rules of Business (Prudential Regulations) for Non-Banking Financial
Institutions.
11. CURRENT LIABILITIES
Current portion of marginal deposits
on lease arrangement (Note: 14) 4,606,458 3,872,592
Current portion of long term loans (Note: 12) -- 400,000
Current portion of obligation under
finance lease (Note: 13) 404,324 608,759
Running finance under mark-up
arrangement - secured (Note: 11.1 ) 24,524,707 29,051,464
Accrued expenses 715,480 256,418
Mark-up on secured loan -- 394,913
Provision for taxation 544,121 5,444,374
Proposed dividend -- 5,400,000
Unclaimed dividend 249,826 71,615
------------ ------------
31,044,916 45,500,135
========== ==========
11.1 Running finance under mark-up arrangements - secured
This represents running finance utilized against aggregate facilities from commercial banks of Rs. 30
million (1999: Rs. 30 million). The mark-up rates range from Rs. 0.438 to Rs. 0.46 per Rs. 1,000/- per
day and is payable quarterly. The repurchase price is payable within one year.
The finance is secured by way of first pari passu charge on all the present and future assets of the
Company ranking pari passu with the senior creditors, hypothecation of the leased assets of the company,
assignment of rental income and personal guarantees of directors.
12. LONG TERM LOAN - SECURED
Habib Bank AG Zurich -- 400,000
Less: Current maturity -- 400,000
----------- -----------
-- --
========== ==========
13. OBLIGATIONS UNDER FINANCE LEASE
The rate of interest used as the discounting factor (i.e. implicit in the lease) ranges from 22% to 23% per
annum. The amounts of future payments and the periods during which they fall due are:
2000 1999
Year ending June 30, Rupees Rupees
2000 -- 1,110,460
2001 462,915 462,915
2002 220,250 220,250
----------- -----------
683,165 1,793,625
Less: Unamortized finance charges 70,224 223,129
----------- -----------
612,941 1,570,496
Less: Current portion shown under current
liabilities (Note - 11) 404,324 608,759
----------- -----------
208,617 961,737
========== ==========
The lease rentals are payable in monthly installments. The amount of rentals payable in 2001 and 2002 include
Rs. 177,560 and Rs. 64,500 respectively being the amount of salvage value adjustable at the end of the lease
term. The lease agreements, carry renewal and purchase option at the end of the lease period. There are no
financial restrictions in lease agreements.
14. MARGINAL DEPOSITS ON LEASE ARRANGEMENTS
Security deposits on leases 20,653,657 18,996,130
Less: Current maturity shown under
current liabilities (Note: 11) 4,606,458 3,872,592
----------- -----------
16,047,199 15,123,538
========== ==========
These represent interest free security deposits received from lessees against lease contracts. The amounts are
adjustable / repayable at the expiry of the respective lease period.
15. SHARE CAPITAL
Authorized -
10,000,000 (1999: 10,000,000) ordinary
shares of Rs. 10/- each 100,000,000 100.000,000
Issued, subscribed and paid up - ========== ==========
5,000,000 (1999: 5,000,000) ordinary shares
of Rs. 10/-each fully paid up in cash 50,000,000 50,000,000
400,000 ordinary shares of Rs. 10/- each issued as fully
paid up bonus shares 4,000,000 4,000,000
----------- -----------
54,000,000 54,000,000
========== ==========
16. CAPITAL RESERVE - STATUTORY RESERVE
Opening balance 8,377,943 6,929,871
Transfer from profit and loss account 902,131 1,448,072
----------- -----------
9,280,074 8,377,943
========== ==========
This represents special reserve created under Rule 3 of the Prudential Regulations for Non-Banking
Financial Institutions.
17. CAPITAL RESERVE - DEFERRED TAXATION
The reserve has been created to comply with the new requirements of Securities and Exchange
commission of Pakistan's circular No. 16 dated 09 September 1999. This capital reserve shall not be
available for utilization for any purpose other than to provide for deferred tax liability.
18. INCOME FROM LEASE OPERATIONS
Finance income on lease operations 18,340,809 18,100,550
Front end fees 233,860 114,702
Lease documentation fees 79,000 51,500
----------- -----------
18,653,669 18,266,752
========== ==========
19. OTHER INCOME
Profit on musharika agreements 4,749,281 4,549,072
Profit on bank deposits 1,035 206,147
Return on investments 273,472 152,000
Profit on disposal of fixed assets 37,921 142,019
Misc. income 191,047 1,259,296
----------- -----------
5,252,756 6,308,534
========== ==========
20. ADMINISTRATIVE AND OPERATING EXPENSES
Salaries and benefits 4,240,513 3,357,884
Gratuity 322,874 213,758
Rent, rates and taxes 602,192 656,256
Utilities 342,484 312,814
Printing and stationery 218,685 189,031
Repair and maintenance 146,335 64,433
Vehicle running and maintenance 624,141 553,145
Insurance 233,331 235,248
Telephone, telex and postage 531,044 626,013
Travelling 385,960 260,279
Office general expenses 248,256 239,297
Depreciation 809,463 768,649
Legal and professional charges 1,342,795 1,333,528
Advertisement 74,502 46,220
Directors fee (Note 25.1) 6,000 5,500
Auditors' remuneration (Note 20.1) 142,865 130,865
Donations (Note 20.2) 7,500 19,100
Provision for doubtful debts 4,157,640 1,953,950
Bad debts written off 121,759 552,578
------------ ------------
14,558,339 11,518,548
========== ==========
20.1 Auditors' Remuneration
Statutory audit 80,000 70,000
Special audit 50,000 50,000
Out of pocket expenses 12,865 10,865
------------ ------------
142,865 130,865
========== ==========
20.2 None of the director or their spouses had any interest in any of the donees.
21. FINANCIAL CHARGES
Mark-up on long term loan -- 240,439
Mark-up on short term loan 4,326,204 5,226,138
Finance charges on finance lease 152,914 216,900
Bank charges 58,313 26,916
------------ ------------
4,537,431 5,710,393
========== ==========
22. TAXATION
Current year (Note: 22.1) 5,000,000 3,500,000
Prior year (4,700,000) (3,379,014)
------------ ------------
300,000 120,986
========== ==========
22.1 The current year tax is charged after taking into account all available allowances and credits.
Deferred tax computed under the liability method is estimated as Rs. 7,000,000 (1999: Rs. 8,400,000).
A capital reserve of Rs. 2,600,000 including for the year amounting to Rs. 600,000 has been created
in accordance with Circular No. 16 of the Securities & Exchange Commission of Pakistan.
23. EARNING PER SHARE
2000 1999
Numerator Denominator Numerator Denominator
Rupees Shares Rupees Shares
A B A B
Profit attributable to
ordinary shareholders 4,510,655 7,225,359
Ordinary Shares 5,400,000 5,400,000
----------- ----------- ----------- -----------
4,510,655 5,400,000 7,225,359 5,400,000
========== ========== ========== ==========
Earning per share (A/B) Rs. 0.84 1.34
24. FINANCIAL INSTRUMENTS AND RELATED DISCLOSURES
24.1 Credit Risk
The company's credit risk exposure is not significantly different from that reflected in the financial
statements. The management monitors and limits company's exposure to credit risk through monitoring
of client's credit exposure, review and conservative estimates of provisions for doubtful receivables,
if any, and through the prudent use of collateral policy. The management is of the view that it is not
exposed to significant concentration of credit risk as its financial assets are adequately diversified in
organizations of sound financials covering various industrial sectors and segments.
A sector wise breakdown of lease portfolio is as follows:
2000 %
Rupees
Apparels 3,615,829 3.28
Cement 5,525,517 5.01
Chemical & Synthetics 4,932,114 4.47
Construction 3,679,729 3.33
Electrical & Power Generation 5,917,989 5.36
Engineering 380,554 0.34
Glass & Ceramics 452,195 0.41
Health Care 320,514 0.29
Hotels & Food 5,005,734 4.54
Information & Communications ! 9,082,464 17.29
Pharmaceuticals 603,759 0.55
Steel Industries 24,351,655 22.06
Sugar 3,138,506 2.84
Textile - Spinning ! 2,350,820 11.19
Wire Manufacturing 9,466,960 8.58
Miscellaneous 11,549,962 10.46
----------- -----------
110,374,301 100.00
========== ==========
24.2 Fair value of Financial Instruments
The estimated fair value of financial instruments are not significantly different from their book value
as shown in these financial statements.
24.3 Exposure to Mark up Rate Risk
The Company's exposure to risk associated with mark up rates on its financial assets and liabilities
are summarized as follows:
Mark up Bearing      Non Mark up Bearing
Notes  within One year within One year
Financial assets one year to five years one year to five years Total
(Rupees) (Rupees) (Rupees) (Rupees) (Rupees)
Long term investments 6 1,450,000 239,540 1,689,540
Net investment in lease finance 50,525,607 59,848,694 110,374,301
Short term finance 7 23,900,000 23,900,000
Security deposits 5 277,560 269,500 547,060
Advances prepayments 9 4,425,230 4,425,230
& other receivables
Cash and bank balances 1,307,436 1,307,436
----------- ----------- ----------- ----------- -----------
74,425,607 61,298,694 6,010,226 509,040 142,243,567
========== ========== ========== ========== ==========
Financial Liabilities
Obligation under lease finance 13 404,324 208,617 -- -- 612,941
Short term financing 24,524,707 -- -- -- 24,524,707
Lease key money 14 -- -- 4,606,458 16,047,199 20,653,657
Accrual and other liabilities -- -- 1,259,601 -- 1,259,601
Unclaimed dividend 11 -- -- 249,826 -- 249,826
----------- ----------- ----------- ----------- -----------
24,929,031 208,617 6,115,885 16,047,199 47,300,732
----------- ----------- ----------- ----------- -----------
Net financial assets/liabilities 49,496,576 61,090,077 (105,659) (15,538,159) 94,942,835
========== ========== ========== ========== ==========
24.4 Effective Mark up Rate
The effective mark up rates for the Company's financial assets and liabilities are as follows:
Financial assets (%)
Investment in lease finance 20.00-29.00
Long term investments 14.00-18.00
Short term investments 19.00-23.00
Financial Liabilities
Short term finance 44-46 paisas per thousand per day
Obligation under finance lease 22-23
25. REMUNERATION OF CHIEF EXECUTIVE AND EXECUTIVES
Chief Executive Executives
2000 1999 2000 1999
Rupees Rupees Rupees Rupees
Number of Persons 1 1 2 2
========== ========== ========== ==========
Managerial remuneration 922,032 789,880 396,439 410,722
Housing and utilities 434.57 328,080 218,044 208,524
Medical and other reimbursements 233,130 119,751 201,853 190,556
----------- ----------- ----------- -----------
1,589,730 1,237,711 816,336 809,802
========== ========== ========== ==========
25.1 Fees paid to 4 (1999: 4) non-executive directors for attending meetings Rs. 6,000 (1999 Rs. 5,500).
Reimbursement of travelling expenses to directors Rs. 208,093 (1999: Rs. 207,265)
25.2 The chief Executive and Executives were also provided with free use of company maintained vehicles
in accordance with the term of their appointment.
26. TRANSACTIONS WITH ASSOCIATED UNDERTAKINGS
Nil
27. CONTINGENCIES AND COMMITMENTS
Nil
28. GENERAL
- Previous year's figures have been re-arranged wherever necessary for the purposes of comparison.
- Figures have been rounded off to the nearest rupee.
Chief Executive Director Director
PATTERN OF SHAREHOLDINGS AS AT JUNE 30, 2000
AS AT JUNE 30, 2000
Shareholding No. of Total
From To Shareholders Shares Held
1 100 354 13,168
101 500 292 74,624
501 1000 577 322,004
1001 5000 296 558,352
5001 10000 29 185,476
10001 15000 8 91,628
15001 20000 6 106,920
20001 25000 7 153,100
25001 30000 2 53,136
30001 35000 6 190,576
40001 45000 2 82,668
50001 55000 1 54,000
65001 70000 1 65,124
70001 75000 1 75,000
75001 80000 1 76,680
105001 110000 1 108,000
115001 120000 1 118,800
150001 155000 1 150,500
500001 505000 1 502,848
241500 2420000 1 2,417,396
----------- -----------
1,588 5,400,000
========== ==========
Categories of No. of Share Total Percentage
Shareholders Holders Shares Held
Individuals 1,564 2,495,136 46.21
Public Limited Co. 3 134,400 2.49
Private Limited Co. 4 155,716 2.88
Banking / Inves. Co. 5 91,252 1.69
Insurance Company 1 42,120 0.78
Modaraba 6 21,300 0.39
Mutual Fund 1 5,700 0.11
Others 4 2,454,376 45.45
----------- ----------- -----------
1,588 5,400,000 100.00
========== ========== ==========
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