| InterAsia Leasing Company Limited |
|
|
|
|
|
|
|
|
| Annual
Report 2001 |
|
|
|
| Contents |
|
|
| Company
Information |
|
| Notice
of Meeting |
|
| Directors'
Report and Chairman's Review |
|
| Auditors'
Report to the Members |
|
| Balance
Sheet |
|
| Profit
and Loss Account |
|
| Cash
Flow Statement |
|
| Statement
of Changes in Equity |
|
| Notes
to the Accounts |
|
| Pattern
of Shareholding |
|
|
|
| Company
Information |
|
|
| Board
of Directors as on June 30, 2001 |
|
| Muhammad
Younas Khan |
|
Chairman / Chief
Executive |
|
| Majid
Ahmed Jhumra |
|
Director |
|
| Saiyed
Hashim Ishaque |
|
Director |
|
| Abdus
Samad Khan |
|
(Nominee of Saudi Pak
Industrial & Agricultural |
|
|
Investment Co. (Pvt)
Ltd.) |
|
| Muhammad
Azam Khan |
|
Director |
|
| Ahmed
Mohiuddin Khan |
|
Director |
|
| Jameel
ur Rehman |
|
Director |
|
|
| Deputy
Secretary |
|
| Fakher
Hussain |
|
|
| Bankers |
|
| Gulf
Commercial Bank Ltd. |
|
| The
Bank of Khyber |
|
| Emirates
Bank International |
|
|
| Legal
Advisors |
|
Ahmer Bilal Soofi,
Advocates & Solicitors |
|
|
|
| Auditors |
|
M/s Husain Rahman,
Chartered Accountants |
|
|
| Registrar
and Share |
|
Universal Management
Services (Pvt) Ltd. |
|
| Transfer
Office |
|
Room No. 205, 2nd Floor,
Central Hotel Building, |
|
|
Civil Lines, Karachi. |
|
|
Phone: 5654037 |
|
|
| Registered
Office |
|
101, 82-East, Fazal ul
Haq Road, Blue Area, |
|
|
Islamabad-44000. |
|
|
Phone: (92-51)
2206731-2206272 |
|
|
Fax: (92-51) 2201380 |
|
|
| Head Office |
|
B-601-602, 6th Floor,
Lakson Square Building # 03, |
|
|
Sarwar Shaheed Road,
Karachi. |
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|
Phone: (92-21) 5654795-98 |
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|
Fax: (92-21) 55688534 |
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|
|
| Notice
of the Meeting |
|
|
| Notice
is hereby given that 9th Annual General Meeting of INTERASIA LEASING COMPANY
LIMITED will be held at Hotel |
|
| Holiday
Inn, Islamabad, at 11.00 a.m. on Saturday the December 29, 2001 to transact
the following business. |
|
|
| ORDINARY
BUSINESS |
|
| 1.
To confirm the Minutes of 04th Extra Ordinary General Meeting held on August
27, 2001. |
|
|
| 2.
To receive, consider and adopt the audited Accounts of the Company for the
year ended June 30, 2001 together with |
|
| the
Directors' and Auditor's report thereon. |
|
|
| 3.
To appoint Auditors for the financial year 2001-2002 and fix their
remuneration. The present auditors M/s. Husain Rehman, |
|
| Chartered
Accountants retire and being eligible, offer themselves for re-appointment. |
|
|
| 4.
To transact any other business with the permission of the Chair. |
|
|
|
By order of the Board |
|
|
|
|
| Islamabad: |
|
FAHKER HUSSAIN |
|
| December
7, 2001 |
|
Deputy Secretary |
|
|
| Notes: |
|
| 1.
The Register of Members of the Company will remain closed from December 21,
2001 to December 28, 2001, (both |
|
| days
inclusive). |
|
|
| 2.
A member entitled to attend and vote at the meeting is entitled to appoint a
proxy to attend and vote for him/her. A proxy |
|
| need
not be a member of the Company. |
|
|
| 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 attorney in order to be valid must be deposited at the
registered office at the Company |
|
| not
less than 48 hours before the time of the meeting. |
|
|
| 4.
Members are advised to lodge shares for transfer at the office of Company
Registrar, Universal Management Services |
|
| (Pvt)
Ltd., Room No. 205, 2nd Floor, Central Hotel Building, Civil Lines, Karachi.
Phone No. 5654037. |
|
|
| 5.
CDC shareholders desiring to attend the Meeting are requested to bring their
original National Identity Cards, account |
|
| and
participant's ID number, for identification purpose, and in case of proxy, to
enclose an attested copy of his/her |
|
| National
Identity Card. |
|
|
| 6.
Members are requested to notify any change in their address immediately. |
|
|
|
| Directors'
Report and Review by the Chairman |
|
|
| The
Board of Directors of InterAsia Leasing Company Limited presents the Ninth
Annual Report alongwith Audited Accounts |
|
| for
the year ended June 30, 2001. |
|
|
| GENERAL
REVIEW: |
|
| The
country's economy was badly affected due to the water crises in the year
under review a GDP growth of 2.6% was recorded |
|
| against
the target of 4.5%. The fiscal deficit showed an improvement this year as a
result of tight monetary policy; inflation |
|
| was
also kept under check in the single digit. Overall the economy remained
sluggish and there was lack of investment by |
|
| both
local and foreign investors. Generally though some investments came in the
oil an gas and textile sectors. Our recovery |
|
| process
continued to be slow due to the prevailing legal system. The management did
their best to generate fresh liquidity |
|
| but
without much success. The induction of new staff also did not produce desired
results as far as liquidity position of the |
|
| company
is concerned. The problematic clients were pursued and wherever possible
recoveries were made and court decrees |
|
| were
implemented. In order to take the company forward one merger application was
filed with the besides pursuing SECP |
|
| and
other options were pursued. |
|
|
| OPERATING
PERFORMANCE: |
|
| During
the year under review the liquidity problem became more acute, as the company
could not generate any liquidity from |
|
| the
credit facilities anticipated from the banking sector. Certain banks and
financial institution with a stake in the company was |
|
| approached
but without any success. The existing financial position and past association
with BEL appeared to be the impediments |
|
| in
getting the necessary credit facilities. Traditionally leasing sector's
working capital is generated from the banking sector |
|
| through
loans, over drafts or commercial paper. We also tapped individual depositors
for liquidity through COl's. Inspite of our |
|
| best
efforts only a marginal success was achieved. As a result of lack of
resources, income from lease financing declined from |
|
| Rs.
33 million in the previous year to Rs. 28.5 million during the year under
review. Overall expenses recorded a decline of |
|
| Rs.
2.4 million. This was achieved by a decrease in financial and other charges.
This downward trend was some what negated |
|
| by
an increase in administrative, traveling expenses and staff salaries.
Contributory factors were prior year's rent booked this |
|
| year,
due to the meetings held with the regulators and other business travel and
additional staff employed to generate more |
|
| deposits.
Major contributors to the loss was diminution in the value of investments Rs.
4.6 million and provision of deferred |
|
| taxation
of similar amount. |
|
|
| The
problematic clients were pursued diligently and some positive results are
expected in the near future. |
|
|
| Financial
Results |
|
Rupees |
|
| Net
Investment in leases |
|
79,905,658 |
|
| Revenue |
|
28,934,071 |
|
| Expenditure |
|
37,222,203 |
|
| Provision
for diminution in the |
|
|
|
| value
of investments (marked to market) |
|
4,686,320 |
|
|
|
|
| Provision
for taxation deferred and current |
|
4,678,560 |
|
| Loss
after tax |
|
17,653,012 |
|
|
| FUTURE
OUT LOOK: |
|
| As
mentioned earlier the business could not be built-up due to lack of
liquidity. Matching credit facilities from a foreign bank |
|
| could
not be utilized, as the clients referred to them did not come up to their
standard. Your management decided that the only |
|
| way
for survival of the company and its future growth was in a merger with some
other financial institutions. Already an application |
|
| for
merger with First Interfund Modaraba is pending with the SECP for their
approval. |
|
|
| Also
plans are well in an advance stage to merge the Company with another
financial institution. This will have the advantage |
|
| of
increasing the size of the Balance Sheet, reducing the expenditure and
achieve other synergies. The process is expected |
|
| to
be completed before the end of current financial year. |
|
|
| A
little more patience is therefore required from the shareholders. Once we
create liquidity in the merged company, income |
|
| will
be generated by acquiring good quality assets. |
|
|
| AUDITORS: |
|
| U/s.
Husain Rahman, Chartered Accountants, who have offered themselves for
re-election, are proposed as auditors for the |
|
| ensuing
financial year. |
|
|
| ACKNOWLEDGMENT: |
|
|
| The
Board takes the opportunity to appreciate the efforts made by the management
and staff and their dedication and hard |
|
| work.
We also thank the Securities & Exchange Commission of Pakistan for their
continued support and guidance. |
|
|
| PATTERN
OF SHAREHOLDING: |
|
| The pattern of
shareholding as at June 30, 2001 |
|
|
|
On behalf of the Board |
|
|
|
|
| Karachi: |
|
MUHAMMAD YOUNAS KHAN |
|
| December
7, 2001 |
|
Chairman |
|
|
|
| Auditors'
Report to the Members |
|
|
| We
have audited the annexed balance sheet of InterAsia Leasing Company Limited
as at June 30, 2001 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 thereof, 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: |
|
| 1.
the balance sheet and profit and loss account together with the notes thereon
have been drawn up in |
|
| conformity
with the Companies Ordinance, 1984, and are in agreement with the books of
account and |
|
| are
further in accordance with accounting policies consistently applied; |
|
|
| 2.
the expenditure incurred during the year was for the purpose of the Company's
business; and |
|
|
| 3.
the business conducted, investments made and the expenditure incurred during
the year were in accordance |
|
| with
the objects of the company; |
|
|
| c)
in our opinion and to the best of our information and according to the
explanations given to us the balance sheet, |
|
| the
profit and loss account, cash flow statement and statement of changes in
equity together with the notes |
|
| forming
part thereof conform with approved accounting standards as applicable in
Pakistan, and, give the information |
|
| required
by the Companies Ordinance, 1984, in the manner so required and respectively
give true and fair view |
|
| of
the state of the Company's affairs as at June 30, 2001 and of the loss and
cash flows and changes in equity |
|
| for
the year then ended; and |
|
|
| d)
in our opinion, zakat deductible at source under the Zakat and Ushr
Ordinance, 1980 was deducted and deposited |
|
| in
the Central Zakat Fund established under section 7 of that ordinance. |
|
|
|
HUSAIN RAHMAN |
|
| Islamabad:
November 27, 2001 |
|
Chartered Accountants |
|
|
|
| Balance
Sheet As at June 30, 2001 |
|
|
|
|
2001 |
2000 |
|
|
NOTE |
RUPEES |
RUPEES |
|
| EQUITY
AND LIABILITIES |
|
| SHARE
CAPITAL AND RESERVES |
|
| Authorised
Capital |
|
| 20,000,000
ordinary shares of |
|
| Rs. 10 each |
|
200,000,000 |
200,000,000 |
|
|
========== |
========== |
|
| Issued,
subscribed and paid up capital |
|
| 10,000,000
ordinary shares of |
|
| Rs.
10 each fully paid up in cash |
|
3 |
100,000,000 |
100,000,000 |
|
|
|
|
| Reserves |
|
|
|
| Capital |
|
38,342,065 |
33,805,866 |
|
| Revenue |
|
(69,723,819) |
(52,070,807) |
|
|
----------- |
----------- |
|
|
68,618,246 |
81,735,059 |
|
| NON-CURRENT
LIABILITIES |
|
| Long
term loans |
|
4 |
-- |
1,906,401 |
|
| Certificates
of investment |
|
5 |
6,275,000 |
4,307,376 |
|
| Liability
against asset subject to finance lease |
6 |
1,664,405 |
642,837 |
|
| Long
term deposits |
|
7 |
8,379,544 |
14,774,813 |
|
| Deferred
liability |
|
8 |
529,091 |
439,621 |
|
|
----------- |
----------- |
|
|
16,848,040 |
22,071,048 |
|
| CURRENT
LIABILITIES |
|
| Current
portion of long term liabilities |
|
9 |
11,293,451 |
18,907,155 |
|
| Finance
under mark-up arrangements |
|
10 |
44,936,211 |
58,336,211 |
|
| Certificates
of investment |
|
5 |
71,262,358 |
71,577,667 |
|
| Accrued
and other liabilities |
|
11 |
28,430,723 |
23,676,708 |
|
| Provision
for taxation |
|
|
1,288,356 |
1,145,995 |
|
| Unclaimed
Dividend |
|
|
400,946 |
497,282 |
|
|
|
----------- |
----------- |
|
|
|
157,612,045 |
174,141,018 |
|
| CONTINGENCIES
AND COMMITMENTS |
12 |
-- |
-- |
|
|
|
|
----------- |
----------- |
|
|
243,078,331 |
277,947,125 |
|
|
========== |
========== |
|
| ASSETS |
|
| NON-CURRENT
ASSETS |
|
| Tangible
fixed assets |
|
13 |
7,333,582 |
3,168,836 |
|
| Net
investment in finance leases |
|
14 |
42,857,102 |
113,869,587 |
|
| Long
term investments |
|
15 |
16,032,100 |
16,398,691 |
|
| Long
term deposits |
|
|
1,079,670 |
886,670 |
|
| Deferred
costs |
|
16 |
-- |
236,783 |
|
|
|
----------- |
----------- |
|
|
67,302,454 |
134,560,567 |
|
|
| CURRENT
ASSETS |
|
|
|
| Current
portion of net investment in finance leases |
14 |
37,048,556 |
51,691,415 |
|
| Advances,
prepayments and other receivable |
17 |
134,925,256 |
85,192,727 |
|
| Short
term investment in shares |
|
18 |
1,607,250 |
-- |
|
| Cash
and bank balances |
|
19 |
2,194,815 |
6,502,416 |
|
|
|
----------- |
----------- |
|
|
175,775,877 |
143,386,558 |
|
|
----------- |
----------- |
|
|
243,078,331 |
277,947,125 |
|
|
========== |
========== |
|
| The
annexed Notes form an integral part of these Financial Statements |
|
|
|
CHIEF EXECUTIVE |
|
DIRECTOR |
|
|
|
| Profit
and Loss Account For the year ended June 30, 2001 |
|
|
|
|
2001 |
2000 |
|
|
NOTE |
RUPEES |
RUPEES |
|
| REVENUE |
|
| Income
from lease financing |
|
20 |
28,465,617 |
32,727,339 |
|
| Income
from investments |
|
|
25,014 |
2,850 |
|
| Other
Income |
|
21 |
443,440 |
702,858 |
|
|
|
---------- |
---------- |
|
|
|
28,934,071 |
33,433,047 |
|
| EXPENDITURE |
|
|
|
|
| Administrative
and operating expenses |
|
22 |
19,137,198 |
16,230,592 |
|
| Financial
and other charges |
|
23 |
17,848,222 |
22,499,878 |
|
| Amortization
of deferred costs |
|
236,783 |
920,708 |
|
|
---------- |
---------- |
|
|
37,222,203 |
39,651,178 |
|
|
---------- |
---------- |
|
|
(8,288,132) |
(6,218,131) |
|
| PROFIT/(LOSS)
BEFORE PROVISIONS |
|
| Provision
for potential lease losses |
|
-- |
(17,580,903) |
|
| Provision
for diminution in value of Investments |
|
4,686,320 |
3,666,240 |
|
|
---------- |
---------- |
|
|
4,686,320 |
(13,914,663) |
|
|
---------- |
---------- |
|
|
(12,974,452) |
7,696,532 |
|
| Reversal
of Kashmir Sugar Mills |
|
|
|
| Income
Recognised in the previous year |
|
-- |
12,178,877 |
|
|
---------- |
---------- |
|
| PROFIT/(LOSS)
BEFORE TAXATION |
|
(12,974,452) |
(4,482,345) |
|
| PROVISION
FOR TAXATION |
|
24 |
4,678,560 |
7,788,240 |
|
|
|
|
|
---------- |
---------- |
|
| (Loss)
AFTER TAXATION |
|
(17,653,012) |
(12,270,585) |
|
| ACCUMULATED
(LOSS) BROUGHT FORWARD |
|
(62,070,807) |
(49,800,222) |
|
|
|
---------- |
---------- |
|
| ACCUMULATED
(LOSS) CARRIED TO EQUITY |
|
(79,723,819) |
(62,070,807) |
|
|
========== |
========== |
|
| (LOSS)
PER SHARE |
|
25 |
(1.77) |
(1,23) |
|
|
| The
annexed notes form an integral part of these Financial Statements |
|
|
|
CHIEF EXECUTIVE |
|
DIRECTOR |
|
|
|
| Cash
Flow Statement For the year ended June 30, 2001 |
|
|
|
2001 |
2000 |
|
|
RUPEES |
RUPEES |
|
|
| CASH
FLOWS FROM OPERATING ACTIVITIES |
|
| LOSS
before Taxation |
|
(12,974,452) |
(4,482,345) |
|
| Adjustments
for: |
|
|
|
| Depreciation |
|
1,396,205 |
1,219,845 |
|
| Deferred
costs amortized |
|
236,783 |
920,708 |
|
| Financial
charges |
|
14,681,973 |
22,102,718 |
|
| Loss
on sale of fixed assets |
|
55,992 |
-- |
|
| Provision
for diminution in the value of investment |
|
4,686,320 |
3,666,240 |
|
| Provision
for potential lease losses |
|
-- |
(13,170,580) |
|
| (Gain)
on share transactions |
|
(25,014) |
-- |
|
| Return
on PIBs |
|
(102,776) |
(173,773) |
|
| Obligation
for gratuity |
|
303,228 |
812,004 |
|
|
----------- |
----------- |
|
|
21,232,711 |
15,377,162 |
|
|
----------- |
----------- |
|
| Operating
profit/(loss) before working capital changes |
|
8,258,259 |
10,894,817 |
|
|
| (Increase)/decrease
in advances, prepayments and |
|
| other
receivables |
|
(49,544,253) |
(37,491,722) |
|
| Increase/(decrease)
in accrued & other liabilities |
|
4,754,015 |
(30,385,203) |
|
|
----------- |
----------- |
|
|
(44,790,238) |
(67,876,925) |
|
|
----------- |
----------- |
|
| Cash
(used)/generated from operations |
|
(36,531,979) |
(56,982,108) |
|
| Income tax |
|
(188,276) |
(277,953) |
|
| Dividend |
|
(96,336) |
(52,722) |
|
| Financial
charges |
|
(14,681,973) |
(12,340,547) |
|
| Return
on PIBs |
|
102,776 |
173,773 |
|
| Gratuity |
|
(213,758 ) |
(372,383) |
|
|
| Net
cash (used) in operating activities |
|
(51,609,546) |
(69,851,942) |
|
| CASH
FLOW FROM INVESTING ACTIVITIES |
|
| Purchase
of fixed assets |
|
(5,121,843) |
(736,803) |
|
| Proceeds
from sale of fixed assets |
|
1,404,900 |
-- |
|
| Increase
in long term security deposits |
|
(193,000) |
(493,600) |
|
| Investments
in lease finance |
|
(10,112,400) |
(5,218,862) |
|
| Lease
finances settled/terminated |
|
95,767,744 |
131,516,560 |
|
| Investment
made in PIBs |
|
(2,000,000) |
-- |
|
| FIBs
encashed |
|
4,103,600 |
-- |
|
| Shares
transaction with other Listed Companies |
|
(13,993,380) |
-- |
|
| Proceed
from shares transaction with Listed Companies/Modarabas |
5,987,814 |
1,949,480 |
|
|
----------- |
----------- |
|
| Net
cash generated from investing activities |
|
75,843,435 |
127,016,775 |
|
| CASH
FLOW FROM FINANCING ACTIVITIES |
|
|
|
| Long
term loans settled |
|
(3,746,000) |
(8,830,000) |
|
| Short
term financing obtained |
|
-- |
15,000,000 |
|
| Short
term finances settled |
|
(13,400,000) |
(33,283,792) |
|
| Certificate
of Investments |
|
1,652,315 |
(5,440,743) |
|
| Security
Deposits obtained |
|
2,447,170 |
857,334 |
|
| Security
Deposits settled |
|
(15,150,251 ) |
(25,668,282) |
|
| Payments
for lease obligations |
|
(344,724) |
(154,728) |
|
|
----------- |
----------- |
|
| Net
cash (used) in financing activities |
|
(28,541,490) |
(57,520,211) |
|
|
|
----------- |
----------- |
|
| NET
(DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS |
(4,307,601) |
(355,378) |
|
| Cash
and cash equivalents at the beginning of the year |
|
6,502,416 |
6,857,794 |
|
|
|
----------- |
----------- |
|
| CASH
AND CASH EQUIVALENTS AT THE END OF THE YEAR |
2,194,815 |
6,502,416 |
|
|
========== |
========== |
|
|
|
|
CHIEF EXECUTIVE |
|
DIRECTOR |
|
|
|
| Statement
of Changes in Equity |
|
| For
the year ended June 30, 2001 |
|
|
|
CAPITAL RESERVES |
REVENUE RESERVES |
|
|
Share |
Reserve for |
Reserve for |
Statutory |
Sub |
General |
Unappro- |
Sub- |
Total |
|
Capital |
Contingencies |
Deferred Tax |
Reserve |
Total |
Reserve |
priated |
Total |
|
|
(NOTE 3) |
(NOTE 3.1) |
Liability |
|
Profit |
|
|
Rupees |
Rupees |
Rupees |
Rupees |
Rupees |
Rupees |
Rupees |
Rupees |
Rupees |
|
| Balance
as on July 01, 1999 |
|
100,000,000 |
3,339,892 |
9,081,878 |
13,759,493 |
26,181,263 |
10,000,000 |
(49,800,222) |
(39,800,222) |
86,381,041 |
| Net
profit/(loss) for the year |
-- |
-- |
-- |
-- |
-- |
-- |
(4,645,982) |
(4,645,982) |
(4,645,9821 |
| Transfer
to reserve for deferred |
|
|
| tax liability |
|
-- |
-- |
7,624,603 |
-- |
7,624,603 |
-- |
(7,624,603) |
(7,624,603) |
-- |
|
---------- |
---------- |
---------- |
---------- |
---------- |
---------- |
---------- |
---------- |
---------- |
| Balance
as on June 30, 2000 |
100,000,000 |
3,339,892 |
16,706,481 |
13,759,493 |
33,805,866 |
10,000,000 |
(62,070,807) |
(52,070,807) |
81,735,059 |
| Net
Profit/(loss) for the year |
-- |
-- |
-- |
-- |
-- |
-- |
(13,116,813) |
(13,116,813) |
(13,116,813) |
| Transfer to reserve for
deferred |
-- |
-- |
-- |
-- |
-- |
-- |
-- |
-- |
-- |
| Tax liability |
- |
|
-- |
-- |
4,536,199 |
-- |
4,536,199 |
-- |
(4,536,199) |
(4,536,199) |
-- |
|
---------- |
---------- |
---------- |
---------- |
---------- |
---------- |
---------- |
---------- |
---------- |
| Balance
as on June 30, 2001 |
100,000,000 |
3,339,892 |
21,242,680 |
13,759,493 |
38,342,065 |
10,000,000 |
(79,723,819) |
(69,723,819) |
68,618,246 |
|
========== |
========== |
========== |
========== |
========== |
========== |
========== |
========== |
========== |
| The
annexed notes form an integral part of Financial Statements. |
|
|
|
CHIEF EXECUTIVE |
|
DIRECTOR |
|
|
|
| Notes
to the Financial Statements For the year ended June 30, 2001 |
|
|
| 1.
THE COMPANY AND ITS OPERATIONS |
|
| The
Company was incorporated in Pakistan on November 30, 1992, as a public
limited company and is listed on the |
|
| Karachi
and Islamabad Stock Exchanges. The licence to carry on leasing business was
granted on April 26, 1993 and |
|
| the
certificate of commencement of business was obtained on May 02, 1993. The
main business activity of the company |
|
| is leasing. |
|
|
| 2.
SIGNIFICANT ACCOUNTING POLICIES |
|
| 2.1
Overall valuation policy |
|
| These
financial statements have been prepared under the historical cost convention. |
|
|
| 2.2
Compliance with International Accounting Standards (IAS) |
|
| These
financial statements have been prepared in compliance with International
Accounting Standards (IAS) as |
|
| applicable
in Pakistan in all material aspects. |
|
|
| 2.3
Revenue recognition |
|
| 2.3.1 Lease |
|
| The
Company follows "financial method" in accounting for recognition of
lease income. Accordingly unearned |
|
| lease
income is taken over the term of the lease, starting from the period in which
the lease is executed, |
|
| so
as to produce a constant return on net investment in the lease. |
|
|
| Front
end fee, commitment fee and other commissions are taken to income when
realised. |
|
|
| 2.3.2
Investments |
|
| Dividend
income is recognised when the right to receive payment is established.
Gain/profit on trading |
|
| of
investments are taken to income when it is realised. |
|
|
| 2.3.3 Other |
|
| Other
income is recognised when earned. |
|
|
| 2.4
Tangible fixed assets and depreciation |
|
| Operating
fixed assets are stated at cost less accumulated depreciation. Depreciation
is charged to income |
|
| applying
the straight line method. In respect of additions and deletions of assets
during the year, depreciation |
|
| is
charged proportionately from/to the month of acquisition and deletion
respectively. |
|
|
| Major
extensions, renewals and improvements are capitalised. |
|
|
| Maintenance
and minor improvements are charged to income as and when incurred. Gains and
losses on dis- |
|
| posal
of fixed assets are included in current income. |
|
|
| 2.5
Investments |
|
| 2.5.1
Long term investments are carried at cost. Provision is made for diminution
in value of investments, if |
|
| any. |
|
|
| 2.5.2
Short term investments are valued at the lower of average cost and market
value determined on an |
|
| aggregate
portfolio basis, using Karachi Stock Exchange quotations. |
|
|
| 2.6 Taxation |
|
| 2.6.1
Current |
|
| Provision
is made on taxable income at the prevailing rates of taxation after taking
into account tax credits |
|
| and
rebates available, if any. |
|
|
| 2.6.2
Deferred |
|
| The
company accounts for deferred taxation arising on all major timing
differences using the liability |
|
| method. |
|
|
| 2.7
Deferred costs |
|
| Deferred
costs are amortised during the period not exceeding five years from the year
of incurrence thereof. |
|
|
| 2.8
Employees' retirement benefits |
|
| The
Company operates a contributory provident fund under a separate trust for all
its permanent employees and |
|
| contributions
are recorded monthly in accordance with the fund rules. The Company also
operates gratuity scheme |
|
| for
its permanent employees under the terms of their appointments. The benefits
are payable to the employees |
|
| on
completion of prescribed qualifying period of service. |
|
|
| 3.
ISSUED, SUBSCRIBED AND PAID UP CAPITAL |
|
| It
includes 2,597,800 (2000: 2,601,300) ordinary shares of Rupees 10 each held
by the associated undertakings. |
|
|
| 3.1
CONTINGENCIES RESERVE |
|
| This
represents a reserve created to meet any contingencies that may arise on, the
lease rentals receivable. |
|
|
|
|
2001 |
2000 |
|
|
Notes |
Rupees |
Rupees |
|
| 4.
LONG TERM LOANS |
|
| Bankers
Equity Ltd. |
|
4.1 |
1,906,401 |
5,652,401 |
|
|
|
---------- |
---------- |
|
|
|
1,906,401 |
5,652,401 |
|
| Less:
Current portion |
|
9 |
1,906,401 |
3,746,000 |
|
|
---------- |
---------- |
|
|
-- |
1,906,401 |
|
|
========== |
========== |
|
|
|
|
| 4.1
This represents two lines of credit amounting to Rupees 1,586,154 and Rupees
320,247 obtained for financing |
|
| lease
operations and carries mark-up at the rate of 21.5 and 23.5 percent per annum
respectively. This facility |
|
| is
secured against endorsement of promissory notes and first charge on leased
assets in fayour of the bank. |
|
| These
facilities will mature on October 06, 2001 and January 11, 2002 respectively. |
|
|
|
|
2001 |
2000 |
|
|
NOTES |
RUPEES |
RUPEES |
|
| 5.
CERTIFICATES OF INVESTMENT |
|
| Balance
at the end of year |
|
77,537,358 |
75,885,043 |
|
| Less:
Due within one year |
|
71,262,358 |
71,577,667 |
|
|
---------- |
---------- |
|
|
6,275,000 |
4,307,376 |
|
|
========== |
========== |
|
|
|
|
| 5.1
The Company has a scheme of Registered PLS Certificates of Investment for
raising funds directly from local |
|
| resources.
These certificates have been issued for maturity periods of three months to
five years with the facility |
|
| of
pre-mature encashment after minimum three months. The return on these
certificates is ranging from 12.00 |
|
| percent
to 26.00 percent per annum depending upon the period of maturity. |
|
|
| 6.
LIABILITY AGAINST ASSETS SUBJECT TO FINANCE LEASE |
|
| The
rates of interest used as discounting factor, implicit in leases, are
approximately 22%, 19.5% and 19% per annum. |
|
| The
amount of future payments and periods during which they fall due are: |
|
|
|
2001 |
2000 |
|
|
22% |
19.50% |
19% |
Total |
|
|
|
RUPEES |
RUPEES |
RUPEES |
RUPEES |
RUPEES |
|
| Year
ended June 30 |
|
| 2002 |
|
377,700 |
217,740 |
524,220 |
1,119,660 |
377,700 |
|
| 2003 |
|
335,700 |
217,740 |
524,220 |
1,077,660 |
377,700 |
|
| 2004 |
|
-- |
200,660 |
615,035 |
815,695 |
335,700 |
|
|
---------- |
---------- |
---------- |
---------- |
---------- |
|
|
713,400 |
636,140 |
1,663,475 |
3,013,015 |
1,091,100 |
|
| Less:
Unamortised |
|
| finance
charges |
70,565 |
130,742 |
362,160 |
563,467 |
196,828 |
|
|
---------- |
---------- |
---------- |
---------- |
---------- |
|
|
642,835 |
505,398 |
1,301,315 |
2,449,548 |
894,272 |
|
| Less:
Current portion |
312,703 |
142,217 |
330,223 |
785,143 |
251,435 |
|
|
---------- |
---------- |
---------- |
---------- |
---------- |
|
|
330,132 |
363,181 |
971,092 |
1,664,405 |
642,837 |
|
|
========== |
========== |
========== |
========== |
========== |
|
| The
lease rentals are payable in monthly instalments. The amount of rentals
payable in the year 2003 and 2004 includes |
|
| the
amount of salvage value of Rupees 209,800 and 190,000 respectively are
adjustable at the end of the lease term. |
|
| The
lease agreement carries renewal and purchase option at the end of lease
period. There are no financial restrictions |
|
| in
lease agreements. The leases are secured by deposit of Rupees 209,800/-,
55,500/- and 134,500/- included in long |
|
| term
security deposits. |
|
|
| 6.1
Minimum lease payments and their present values are regrouped as below: |
|
|
2001 |
2000 |
|
|
Minimum |
Present value |
Minimum |
Present value |
|
|
Lease |
of minimum |
Lease |
of minimum |
|
|
Payments |
lease payments |
Payments |
lease payments |
|
| Due
not later than one year |
|
1,119,660 |
785,143 |
377,700 |
251,436 |
|
| Due
later than one year but not later |
|
| than
five years |
|
1,893,355 |
1,664,405 |
713,400 |
642,836 |
|
|
---------- |
---------- |
---------- |
---------- |
|
|
3,013,015 |
2,449,548 |
1,091,100 |
894,272 |
|
|
========== |
========== |
========== |
========== |
|
|
|
|
|
|
2001 |
2000 |
|
|
Notes |
Rupees |
Rupees |
|
| 7.
LONG TERM DEPOSITS |
|
| Balance
at the end of year |
|
(7.1) |
16,981,452 |
29,684,533 |
|
| Less:
Current Portion |
|
(9) |
8,601,908 |
14,909,720 |
|
|
|
---------- |
---------- |
|
|
8,379,544 |
14,774,813 |
|
|
========== |
========== |
|
|
|
|
| 7.1
These represent the interest free security deposits received against lease
contracts and are repayable/adjustable |
|
| at
the expiry/termination of the respective leases. |
|
|
|
|
2001 |
2000 |
|
|
Notes |
Rupees |
Rupees |
|
| 8.
DEFERRED LIABILITY |
|
| Provision
for gratuity |
|
529,091 |
439,621 |
|
|
========== |
========== |
|
|
|
|
| 9.
CURRENT PORTION OF LONG TERM LIABILITIES |
|
| Long
term loans |
|
(4) |
1,906,401 |
3,746,000 |
|
| Liability
against assets subject to finance lease |
(6) |
785,143 |
251,435 |
|
| Long
term deposits |
|
(7) |
8,601,908 |
14,909,720 |
|
|
---------- |
---------- |
|
|
11,293,452 |
18,907,155 |
|
|
========== |
========== |
|
|
| 10.
FINANCE UNDER MARK-UP ARRANGEMENTS |
|
| Cash
Finances |
|
| Ban
k of Khyber |
|
(10.1) |
5,000,000 |
5,000,000 |
|
| English
Leasing Ltd. |
|
(10.2) |
2,500,000 |
13,000,000 |
|
| Trust
Investment Bank Ltd. |
|
(10.3) |
9,900,000 |
18,000,000 |
|
| Musharika
Financing |
|
|
|
|
| Financial
Institution |
|
(10.4) |
22,336,211 |
22,336,211 |
|
| Non
Financial Institution |
|
(10.5) |
5,000,000 |
-- |
|
| Individual |
|
(10.6) |
200,000 |
-- |
|
|
---------- |
---------- |
|
|
44,936,211 |
58,336,211 |
|
|
========== |
========== |
|
|
|
|
| 10.1
This represents demand finance facility carrying mark-up at the rate of 16
percent per annum. The mark-up is |
|
| payable
quarterly. It is secured by way of hypothecation of leased assets valuing
Rupees 6.7 million. The loan |
|
| has
matured in May 2001. However, a roll over request has been made with the bank
which is under consideration. |
|
|
| 10.2
This represents a short-term facility of Rupees 15 million and carries
mark-up at the rate of 19.5 percent per |
|
| annum
payable monthly. The facility was matured on April 2000. However as per
understanding with the lender |
|
| the
loan is being paid in instalments. |
|
|
| 10.3
This represents short-term facilities of Rupees 5 million and Rupees 20
million carrying mark-up at the rate of |
|
| 19
percent and 20.40 percent per anum respectively and payable monthly. These
facilities have already been |
|
| matured,
however as per understanding with the lender the loan is being paid
gradually. |
|
|
| 10.4
This represents Musharika Investment Agreement carrying profit at the rate of
21 percent per annum payable half yearly. |
|
|
|
| 10.5
This represents Musharika investment Agreement carrying profit at the rate of
16.60 percent per annum payable at maturity. |
|
|
|
| 10.6
This represents Musharika Investment Agreement carrying profit at the rate of
12.50 percent per annum payable at maturity. |
|
|
|
|
2001 |
2000 |
|
|
Notes |
Rupees |
Rupees |
|
| 11.
ACCRUED AND OTHER LIABILITIES |
|
| Accrued
liabilities |
|
521,606 |
476,629 |
|
| Accrued
financial charges-secured finances |
|
23,956,965 |
19,719,196 |
|
| Tax
Payable - deducted at source |
|
795,217 |
664,870 |
|
| Payable
to lessees |
|
681,206 |
432,043 |
|
| Other
payable |
|
2,475,729 |
2,151,939 |
|
| Payable
to associated undertaking |
|
-- |
232,031 |
|
|
---------- |
---------- |
|
|
28,430,723 |
23,676,708 |
|
|
========== |
========== |
|
|
|
|
| 12.
CONTINGENCIES AND COMMITMENTS |
|
| There
were no contingencies and capital commitments as at the end of the year. |
|
|
| 13.
TANGIBLE FIXED ASSETS |
|
|
BOOK |
|
|
COST |
|
DEPRECIATION |
VALUE |
|
|
As at |
|
As at |
|
As at |
|
Charge |
As at |
As at |
|
|
July 01, |
Additions/ |
June 30, |
Rate |
July 01, |
Adjust- |
for the |
June 30, |
June 30, |
|
| DESCRIPTION |
2000 |
(Deletions) |
2001 |
|
2000 |
merits |
year |
2001 |
2001 |
|
| OWNED |
|
| Leasehold
improvements |
817,592 |
1,836,833 |
2,654,425 |
10 |
311,924 |
-- |
186,508 |
498,432 |
2,155,993 |
|
| Electric
and Gas Fitting |
109,016 |
13,270 |
122,286 |
10 |
51,148 |
-- |
11,566 |
62,714 |
59,572 |
|
| Equipments |
|
2,292,536 |
825,000 |
3,117,536 |
20 |
1,785,503 |
-- |
533,186 |
2,318,689 |
798,847 |
|
| Furniture
and Fixtures |
686,827 |
86,240 |
773,067 |
10 |
368,395 |
-- |
74,079 |
442,474 |
330,593 |
|
| Vehicles |
|
2,568,867 |
2,348,500 |
3,380,867 |
20 |
1,698,165 |
(75,608) |
339,749 |
1,962,306 |
1,418,561 |
|
|
|
(1,536,500) |
|
|
|
---------- |
---------- |
---------- |
---------- |
---------- |
---------- |
---------- |
---------- |
---------- |
|
|
6,474,838 |
5,109,843 |
10,048,181 |
|
4,215,135 |
(75,608) |
1,145,088 |
5,284,615 |
4,763,566 |
|
|
(1,536,500) |
|
|
| LEASED |
|
|
|
| Vehicles |
|
1,049,000 |
1,912,000 |
2,961,000 |
-- |
139,867 |
-- |
251,117 |
390,984 |
2,570,016 |
|
|
---------- |
---------- |
---------- |
---------- |
---------- |
---------- |
---------- |
---------- |
---------- |
|
| June 30, 2001 |
Rupees |
7,523,838 |
7,021,843 |
13,009,181 |
-- |
4,355,002 |
(75,608) |
1,396,205 |
5,675,599 |
7,333,582 |
|
|
|
|
(1,536.500) |
|
|
|
|
========== |
========== |
========== |
========== |
========== |
========== |
========== |
========== |
========== |
|
| June 30, 2000 |
Rupees |
5,765,315 |
1,795,723 |
7,523,838 |
-- |
3,162,437 |
(27,280) |
1,219,845 |
4,355,002 |
3,168,836 |
|
|
(37,200) |
|
|
========== |
========== |
========== |
========== |
========== |
========== |
========== |
========== |
========== |
|
|
|
|
| 13.1
Disposal |
|
|
|
Accumulated |
Book |
Sale |
Gain(Loss) |
Mode of |
|
| Particulars |
|
Cost |
Depreciation |
Value |
Proceed |
on disposal |
Disposal |
|
Sold to |
|
|
| Vehicles |
|
| Toyota
Corolla |
200,000 |
53,333 |
146,667 |
59,900 |
(86,767) |
Negotiation |
|
Mr. Talha Qureshi |
|
| Toyota Corolla |
1,336,500 |
22,275 |
1,314,225 |
1,345,000 |
30,775 |
(under sale & lease |
ORIX LEASING |
|
|
back agreement) |
PAKISTAN LTD. |
|
|
---------- |
---------- |
---------- |
---------- |
---------- |
|
| June 30, 2001 |
Rupees |
1,536,500 |
75,608 |
1,460,892 |
1,404,900 |
(55,992) |
|
|
========== |
========== |
========== |
========== |
========== |
|
| June 30, 2000 |
Rupees |
37,200 |
27,280 |
9,920 |
9,920 |
-- |
|
|
========== |
========== |
========== |
========== |
========== |
|
|
|
|
2001 |
2000 |
|
|
|
Rupees |
Rupees |
|
| 14.
NET INVESTMENT IN FINANCE LEASES |
|
| Lease
rentals receivable |
|
81,440,364 |
198,271,666 |
|
| Guaranteed
residual value of leased assets |
|
16,526,171 |
29,514,037 |
|
|
---------- |
---------- |
|
| Gross
investment in finance leases |
|
97,966,535 |
227,785,703 |
|
| Less:
Unearned finance income |
|
18,060,877 |
62,224,701 |
|
|
---------- |
---------- |
|
| Net
investment in lease finances |
|
79,905,658 |
165,561,002 |
|
| Less:
Current portion of net investment in finance leases |
|
37,048,556 |
51,691,415 |
|
|
---------- |
---------- |
|
|
42,857,102 |
113,869,587 |
|
|
========== |
========== |
|
|
|
|
| 14.1
Lease payments and guaranteed residual value due within next twelve months
ending on June 30, 2002 are |
|
| Rupees
48.729 million (June 30, 2001 · Rupees 77.307 million) out of which Rupees
28.731 million (June 30, |
|
| 2001
: Rupees 36.782 million) represents current maturity of principal portion. |
|
|
| 14,2
Minimum lease payments and their present values are regrouped as below: |
|
|
|
2001 |
2000 |
|
|
Minimum |
Present value |
Minimum |
Present value |
|
|
Lease |
of minimum |
Lease |
of minimum |
|
|
Payments |
lease payments |
Payments |
lease payments |
|
|
Rupees |
Rupees |
Rupees |
Rupees |
|
| Due
not later than one year |
|
48,728,612 |
37,048,556 |
77,307,647 |
51,691,415 |
|
|
| Due
later than one year but not later |
|
| than
five years |
|
49,237,923 |
42,857,102 |
150,478,056 |
113,869,587 |
|
|
----------- |
----------- |
----------- |
----------- |
|
|
|
97,966,535 |
79,905,658 |
227,785,703 |
165,561,002 |
|
|
========== |
========== |
========== |
========== |
|
|
|
|
| 14.3
The Company exposure to Syed Bhais Lighting Limited exceeds 20% of its Net
Investment in Lease Finance, |
|
| which
is in contraindication to the requirement of The Leasing Companies
(Establishment & Regulation) Rules |
|
| 2000.
However over-run in exposure was due to subsequent re-scheduling of lease
facility. |
|
|
|
|
2001 |
2000 |
|
|
Notes |
Rupees |
Rupees |
|
| 15.
LONG TERM INVESTMENT |
|
| SHARES
OF QUOTED COMPANIES |
|
151 |
|
| Bankers
Equity Limited |
|
| 810,810
ordinary shares of Rupees 10 each |
|
15,152,602 |
15,152,602 |
|
|
|
|
| Medi
Glass Limited |
|
|
|
| 117,562
ordinary shares of Rupees 10 each |
|
752,397 |
752,397 |
|
|
|
|
| Nimir
Industrial Chemicals Limited |
|
|
|
| 1,578,520
ordinary shares of rupees 10 each |
|
|
|
| issued
at discount of 60% |
|
6,314,080 |
-- |
|
|
---------- |
---------- |
|
|
22,219,079 |
15,904,999 |
|
| MODARABA
CERTIFICATES-QUOTED |
|
15.2 |
|
| Associated
Undertakings |
|
| Long
Term Venture Capital Modaraba |
|
| (Managed
by National Technology |
|
| Development
Corporation Ltd.) |
|
| 445,237
ordinary certificates of Rupees 5 each |
|
5,068,395 |
5,068,395 |
|
|
---------- |
---------- |
|
|
5,068,395 |
5,068,395 |
|
|
| SHARES
OF UNQUOTED COMPANIES |
|
15.3 |
|
| Associated
Undertaking |
|
| LTV
Housing Finance Ltd. |
|
| 1,250,000
ordinary shares of Rupees 10 each |
|
12,500,000 |
12,500,000 |
|
| (Chief
Executive: Mr. Javed I Qureshi) |
|
|
| OTHER
QUOTED INVESTMENTS |
|
| Federal
Investment Bonds |
|
-- |
4,103,600 |
|
| OTHER
UN-QUOTED INVESTMENT |
|
|
| Pakistan
Investment Bonds |
|
2,000,000 |
-- |
|
|
---------- |
---------- |
|
|
41,787,474 |
37,576,994 |
|
| Less:
Provision for diminution in value of investments |
|
25,755,373 |
21,178,303 |
|
|
---------- |
---------- |
|
|
16,032,101 |
16,398,691 |
|
|
========== |
========== |
|
|
| 15.1
The aggregate market value of listed companies at the end of financial year
is Rs. 307,902 (2000: 1,820,263). |
|
|
| 15.2
The aggregate market value of listed modaraba certificates at the end of
financial year is |
|
| Rs.
222,619 (2000: 556,546). |
|
|
| 15.3
The aggregate break-up value of unquoted investments at the end of financial
year is Rs. 7,187,500 |
|
| (2000:9,918,282). |
|
|
|
|
2001 |
2000 |
|
|
Notes |
Rupees |
Rupees |
|
| 16.
DEFERRED COSTS |
|
| Balance
at the beginning of the year |
|
236,783 |
1,157,491 |
|
| Less:
Amortized during the period |
|
236,783 |
920,708 |
|
|
---------- |
---------- |
|
|
-- |
236,783 |
|
|
========== |
========== |
|
|
|
|
| 17.
ADVANCES, PREPAYMENTS AND OTHER RECEIVABLES |
|
| Advances-Considered
good |
|
| To
company's employees |
|
892,025 |
1,098,000 |
|
| Advance
Income Tax |
|
3,134,116 |
2,803,479 |
|
|
| Prepayments |
|
1,212,529 |
807,257 |
|
| Due
from associated undertakings |
|
(17.1) |
822,752 |
1,724,181 |
|
| Profit
accrued on investment |
|
|
2,234,481 |
2,397,433 |
|
| Receivable
from Bankers Equity Limited |
|
(17.2) |
23,862,562 |
23,862,562 |
|
| Excise
Duty receivable |
|
|
2,480,293 |
2,528,841 |
|
| Other
receivables |
|
|
629,307 |
670,755 |
|
| Receivable
from Nimir Industrial Chemicals Limited |
(17.3) |
42,556,855 |
-- |
|
|
| Due
from lessees |
|
85,185,979 |
77,385,866 |
|
| Less:
Provision for doubtful receivables |
|
28,085,643 |
28,085,647 |
|
|
----------- |
----------- |
|
| Considered
good |
|
57,100,336 |
49,300,219 |
|
|
----------- |
----------- |
|
|
134,925,256 |
85,192,727 |
|
|
|
|
========== |
========== |
|
|
|
|
|
|
| 17.1
This represents receivable from the following associated |
|
|
| undertakings
on account of share of common expenses: |
|
|
| LTV
Capital Modaraba |
|
(17.1.1 ) |
722,752 |
1,624,181 |
|
| First
Interfund Modaraba |
|
100,000 |
100,000 |
|
|
----------- |
----------- |
|
|
822,752 |
1,724,181 |
|
|
========== |
========== |
|
|
| 17.1.1
The aggregate maximum balance due from associated undertakings at the end of
any month during the year |
|
| was
Rupees 0.8 million (2000: Rupees 1.7 million). |
|
|
| 17.2
The balance is net of certain inter company transactions and adjustments as
agreed in principle in a meeting |
|
| of
the Company's Management with BEL's Executives on May 20, 2000. |
|
|
| 17.3
This represent amount receivable/adjustable from Nimir Industrial Chemical
Limited against lease financed to |
|
| them
as per MOU between them and other syndicate members. |
|
|
|
2001 |
2000 |
|
|
Rupees |
Rupees |
|
| 18
SHORT TERM INVESTMENTS |
|
| SHARE
IN QUOTED COMPANIES |
|
| ICI Limited |
|
| 50,000
ordinary shams of Rs. 10 each |
|
508,750 |
-- |
|
| Japan
Power Limited |
|
|
|
| 80,000
ordinary shares of Rs. 10 each |
|
352,000 |
-- |
|
| Muslim
Commercial Bank Limited |
|
|
|
| 35,000
ordinary shares of Rs. 10 each |
|
855,750 |
-- |
|
|
----------- |
----------- |
|
|
1,716,500 |
-- |
|
| Less:
Provision for diminution in value of investments |
|
109,250 |
-- |
|
|
----------- |
----------- |
|
|
1,607,250 |
-- |
|
|
========== |
========== |
|
| The
aggregate market value of listed companies at the end |
|
| of
financial year is Rs. 1,607,250 (2000:NA). |
|
|
| 19
CASH AND BANK BALANCES |
|
| Cash in hand |
|
5,342 |
7 |
|
| Cash
with banks |
|
| Current
account (Note 19.1 ) |
|
679,563 |
963,314 |
|
| Deposit
account |
|
1,509,910 |
5,539,095 |
|
|
----------- |
----------- |
|
|
2,194,815 |
6,502,416 |
|
|
========== |
========== |
|
|
|
|
| 19.1
This includes interest free deposit of Rupees 494,000 (2000: Rupees 494,000)
with the State Bank of Pakistan |
|
| as
was required under Prudential Regulation for Non Banking Financial
Institutions (NBFIs) as was applicable |
|
| to
leasing companies. |
|
|
|
|
2001 |
2000 |
|
|
Notes |
Rupees |
Rupees |
|
| 20
INCOME FROM LEASE FINANCING |
|
| Lease
income |
|
26,107,336 |
31,557,680 |
|
| Front-end
fee and documentation charges |
|
2,358,281 |
1,169,659 |
|
|
----------- |
----------- |
|
|
28,465,617 |
32,727,339 |
|
|
========== |
========== |
|
|
|
|
| 21
OTHER INCOME |
|
| Profit
on Federal/Pakistan Investment Bonds |
|
102,776 |
173,773 |
|
| Return
on bank deposits |
|
316,472 |
386,220 |
|
| Other
income |
|
24,192 |
142,865 |
|
|
----------- |
----------- |
|
|
443,440 |
702,858 |
|
|
========== |
========== |
|
|
|
|
| 22
ADMINISTRATIVE AND OPERATING EXPENSES |
|
| Staff
salaries and other benefits |
|
22.1 |
8,720,589 |
7,745,896 |
|
| Travelling
and conveyance |
|
|
1,553,068 |
645,855 |
|
| Rent,
rates and taxes |
|
22.3 |
2,652,011 |
958,500 |
|
| Electricity,
gas and water |
|
351,547 |
353,128 |
|
| Advertisement |
|
67,654 |
332,230 |
|
| Printing,
stationery and supplies |
|
602,191 |
419,197 |
|
| Postage
and courier |
|
62,731 |
80,311 |
|
| Telephone
and fax |
|
420,680 |
551,014 |
|
| Newspapers,
books and magazines |
|
17,565 |
20,406 |
|
| Fees
and subscriptions |
|
1,009,305 |
674,100 |
|
| Entertainment |
|
203,481 |
-- |
|
| Insurance |
|
872,525 |
1,855,094 |
|
| Repair
and maintenance |
|
248,730 |
738,620 |
|
| Legal
and professional charges |
|
725,113 |
408,658 |
|
|
|
|
| Auditors'
remuneration |
|
|
|
| Audit
fee - Statutory |
|
50,000 |
50,000 |
|
| - other |
|
75,000 |
100,000 |
|
| Out
of pocket expenses |
|
32,600 |
18,679 |
|
|
----------- |
----------- |
|
|
157,600 |
168,679 |
|
| Depreciation |
|
1,396,205 |
1,219,845 |
|
| Miscellaneous
expenses |
|
76,203 |
59,059 |
|
|
----------- |
----------- |
|
|
19,137,198 |
16,230,592 |
|
|
========== |
========== |
|
|
|
|
| 22.1
It includes Rupees 303,228 and Rupees 172,757 on account of staff Gratuity
and provident fund respectively. |
|
| 22.2
Number of employees at the end of year was 20 (2000: 19) |
|
| 223
This represents office premises rent charged by the associated company for
the year ended June 30,2000 after |
|
| the
finalization of our Annual accounts for the year ended June 30, 2000. |
|
|
|
|
2001 |
2000 |
|
|
Notes |
Rupees |
Rupees |
|
| 23
FINANCIAL AND OTHER CHARGES |
|
| Financial
charges |
|
| Mark-up
on long term loans |
|
3,084,003 |
4,227,245 |
|
| Return
on certificates of investment |
|
2,720,883 |
7,303,317 |
|
| Lease
financial charges |
|
161,873 |
117,930 |
|
| Mark-up
on short term finances |
|
8,651,954 |
10,367,131 |
|
| Bank
charges |
|
63,260 |
87,095 |
|
|
---------- |
---------- |
|
|
14,681,973 |
22,102,718 |
|
| Other
charges |
|
| Loss
on termination of leases |
|
-- |
397,160 |
|
| Receivable
written off |
|
3,110,257 |
-- |
|
| Loss
on disposal of fixed assets |
|
55,992 |
-- |
|
|
---------- |
---------- |
|
|
17,848,222 |
22,499,878 |
|
|
========== |
========== |
|
|
|
|
| 24
PROVISION FOR TAXATION |
|
| Current |
|
24.1 |
142,361 |
163,637 |
|
| Deferred |
|
24.2 |
4,536,199 |
7,624,603 |
|
|
---------- |
---------- |
|
|
|
4,678,560 |
7,788,240 |
|
|
========== |
========== |
|
|
|
|
| 24.1
Provision for minimum tax at 0.5% of the turnover under section 80D of the
Income Tax Ordinance, 1979 has |
|
| been
made in these financial statements, while no provision for current tax has
been made due to tax carry |
|
| forward
losses as per returns filed and appeals filed against assessment orders for
the assessment years 1994- |
|
| 95
through 2000-2001 |
|
|
| 24.2
Deferred tax credit for the current year amounting to Rs. 2,647,860 has not
been accounted. Further in accor- |
|
| dance
with the Circular No. 16 issued by the Securities and Exchange Commission of
Pakistan deferred tax of |
|
| Rs.
4,536,199 being one fifth of the unprovided deferred tax liability as at the
beginning of the financial year |
|
| ending
June 30, 1998 has been provided. |
|
|
| 25
LOSS PER SHARE |
|
| (Loss)
after taxation |
|
(17,653,012) |
(12,270,585) |
|
| Number
of ordinary shares |
|
10,000,000 |
10,000,000 |
|
|
---------- |
---------- |
|
| (Loss)
per share |
|
(1.77) |
(1.23) |
|
|
========== |
========== |
|
|
| 26
INTEREST/MARK-UP RATE RISK |
|
| Interest/mark-up
rate risk and sensitivity of the company's financial liabilities and
financial assets as at June 30, 2001 can be evaluated from the following: |
|
|
|
EXPOSED TO INTEREST/MARK-UP |
EXPOSED TO INTEREST/MARK-UP |
NOT |
|
|
|
|
RATE
PRICE RISK |
RATE CASH FLOW RISK |
EXPOSED |
|
|
More than one |
|
More than one |
|
TO INTEREST/ |
|
|
FINANCIAL |
within |
year and upto |
Above |
within |
year and upto |
Above |
MARK-UP |
|
|
INSTRUMENT |
one year |
five years |
five years |
one year |
five years |
five years |
RATE RISK |
|
|
RUPEES |
RUPEES |
RUPEES |
RUPEES |
RUPEES |
RUPEES |
RUPEES |
RUPEES |
|
|
| LIABILITIES |
|
| Long
term loans |
|
1,906,401 |
1,906,401 |
-- |
-- |
-- |
-- |
-- |
-- |
|
| Certificate
of Investment |
|
77,537,358 |
10,362,358 |
6,275,000 |
-- |
-- |
-- |
-- |
60,900,000 |
|
| Liabilities
against assets subject |
|
| to
finance lease |
|
2,449,548 |
785,143 |
1,664,135 |
-- |
-- |
-- |
-- |
-- |
|
| Long
term deposits |
|
16,981,452 |
-- |
-- |
-- |
-- |
-- |
-- |
16,981,452 |
|
| Finance
under mark-up arrangements |
44,936,211 |
44,936,211 |
-- |
-- |
-- |
-- |
-- |
-- |
|
| Accured
and other liabilities |
27,633,140 |
-- |
-- |
-- |
-- |
-- |
-- |
27,633,140 |
|
|
----------- |
----------- |
----------- |
----------- |
----------- |
----------- |
----------- |
----------- |
|
|
171,444,110 |
57,990,113 |
7,939,135 |
-- |
-- |
-- |
-- |
105,514,592 |
|
|
========== |
========== |
========== |
========== |
========== |
========== |
========== |
========== |
|
| ASSETS |
|
| Net
investment in leases |
|
79,905,658 |
37,048,556 |
42,857,102 |
-- |
-- |
-- |
-- |
-- |
|
| Long
term investment |
|
16,032,101 |
2,000,000 |
-- |
-- |
-- |
-- |
-- |
14,032,101 |
|
| Long
term deposits |
|
1,079,670 |
-- |
-- |
-- |
-- |
-- |
-- |
1,079,670 |
|
| Short
term investment |
|
1,607,250 |
-- |
-- |
-- |
-- |
-- |
-- |
1,607,250 |
|
| Advances,
and other receivable |
130,578,611 |
-- |
-- |
-- |
-- |
-- |
-- |
130,578,611 |
|
| Cash
and bank balance |
|
2,194,815 |
1,509,910 |
-- |
-- |
-- |
-- |
-- |
684,905 |
|
|
----------- |
----------- |
----------- |
----------- |
----------- |
----------- |
----------- |
----------- |
|
|
231,398,105 |
40,558,466 |
42,857,102 |
-- |
-- |
-- |
-- |
147,982,537 |
|
|
========== |
========== |
========== |
========== |
========== |
========== |
========== |
========== |
|
| Total
interest/mark-up rate sensitivity gap |
59,953,995 |
(17,431,647) |
34,917,967 |
-- |
-- |
-- |
-- |
42,467,945 |
|
|
========== |
========== |
========== |
========== |
========== |
========== |
========== |
========== |
|
|
|
|
|
|
|
|
| 26.1
INTEREST/MARK-UP RATE RISK |
|
| Interest/mark-up
rate risk and sensitivity of the company's financial liabilities and
financial assets as at June 30, 2000 can be evaluated from the following. |
|
|
|
|
|
EXPOSED TO INTEREST/MARK-UP |
EXPOSED TO INTEREST/MARK-UP |
NOT |
|
|
|
|
RATE
PRICE RISK |
RATE CASH FLOW RISK |
EXPOSED |
|
|
More than one |
|
More than one |
|
TO INTEREST/ |
|
|
|
FINANCIAL |
within |
year and upto |
Above |
within |
year and upto |
Above |
MARK-UP |
|
|
INSTRUMENT |
one year |
five years |
five years |
one year |
five years |
five years |
RATE RISK |
|
|
|
RUPEES |
RUPEES |
RUPEES |
RUPEES |
RUPEES |
RUPEES |
RUPEES |
RUPEES |
|
| LIABILITIES |
|
| Long
term loans |
|
5,652,401 |
3,746,000 |
1,906,401 |
-- |
-- |
-- |
-- |
-- |
|
| Certificate
of investments |
|
75,885,043 |
71,577,667 |
4,307,376 |
-- |
-- |
-- |
-- |
-- |
|
| Liabilities
against assets subject |
|
| to
finance lease |
|
894,272 |
251,435 |
642,837 |
-- |
-- |
-- |
-- |
-- |
|
| Long
term deposits |
|
29,684,533 |
-- |
-- |
-- |
-- |
-- |
-- |
29,664,533 |
|
| Finance
under mark-up arrangements |
58,336,211 |
58,336,211 |
-- |
-- |
-- |
-- |
-- |
-- |
|
| Accrued
and other liabilities |
23,009,472 |
-- |
-- |
-- |
-- |
-- |
-- |
23,009,472 |
|
|
----------- |
----------- |
----------- |
----------- |
----------- |
----------- |
----------- |
----------- |
|
|
193,461,932 |
133,911,313 |
6,856,614 |
-- |
-- |
-- |
-- |
52,694,005 |
|
|
========== |
========== |
========== |
========== |
========== |
========== |
========== |
========== |
|
| ASSETS |
|
| Net
investment in leases |
|
165,561,002 |
51,691,415 |
113,869,587 |
-- |
-- |
-- |
-- |
-- |
|
| Long
term investments |
|
16,398,691 |
4,103,600 |
-- |
-- |
-- |
-- |
-- |
12,295,091 |
|
| Long
term deposits |
|
886,670 |
-- |
-- |
-- |
-- |
-- |
-- |
886,670 |
|
| Advances,
and other receivables |
81,581,991 |
-- |
-- |
-- |
-- |
-- |
-- |
81,581,991 |
|
| Cash
and bank balances |
|
6,502,416 |
5,539,095 |
-- |
-- |
-- |
-- |
-- |
963,321 |
|
|
----------- |
----------- |
----------- |
----------- |
----------- |
----------- |
----------- |
----------- |
|
|
270,930,770 |
61,334,110 |
113,869,587 |
-- |
-- |
-- |
-- |
95,727,073 |
|
|
========== |
========== |
========== |
========== |
========== |
========== |
========== |
========== |
|
| Total
interest/mark-up rate sensitivity gap |
77,468,838 |
(72,577,203) |
107,012,973 |
-- |
-- |
-- |
-- |
43,033,068 |
|
|
========== |
========== |
========== |
========== |
========== |
========== |
========== |
========== |
|
|
| 26.2
Effective interest/mark-up rates for financial |
|
| assets
and financial liabilities are given below |
|
|
|
2001 |
2000 |
|
|
% |
% |
|
| ASSETS |
|
| Net
investment in leases |
|
14.00-45.82 |
14.00-45.82 |
|
| Long
term investments |
|
14 |
14 |
|
| Cash
with banks |
|
8.00-12.50 |
8.00-12.50 |
|
|
|
|
| LIABILITIES |
|
|
|
| Certificate
of investments |
|
12.00-26.00 |
14.00-23.50 |
|
| Long
term loans |
|
21.50-23.50 |
21.50-23.50 |
|
| Liabilities
against assets subject to finance lease |
|
22.00-19.00 |
22.00 |
|
| Finances
under mark up arrangements |
|
16.00-21.00 |
19.00-21.00 |
|
|
| 27.
CHIEF EXECUTIVE, DIRECTOR'S AND EXECUTIVES' REMUNERATION |
|
| The
aggregate amount charged in the accounts for the year for remuneration,
including all benefits to the chief executive, |
|
| director
and executives of the company is as follow: |
|
|
(Amount in Rupees) |
|
|
CHIEF EXECUTIVE |
DIRECTOR |
EXECUTIVE |
|
|
2001 |
2000 |
2001 |
2000 |
2001 |
2000 |
|
| Remuneration |
1,145,306 |
800,282 |
693,954 |
696,679 |
1,254,585 |
748,770 |
|
| Leave
passage |
359,435 |
37,233 |
42,120 |
9,599 |
78,895 |
52,778 |
|
| Perquisites |
|
343,696 |
278,735 |
236,094 |
257,807 |
385,909 |
578,400 |
|
| Retirement
Benefits |
91,524 |
779,558 |
124,303 |
-- |
204,780 |
-- |
|
|
----------- |
----------- |
----------- |
----------- |
----------- |
----------- |
|
| Rupees |
|
1,939,961 |
1,895,808 |
1,096,471 |
964,085 |
1,924,169 |
1,379,948 |
|
|
========== |
========== |
========== |
========== |
========== |
========== |
|
| Number |
|
1 |
1 |
1 |
1 |
5 |
4 |
|
|
========== |
========== |
========== |
========== |
========== |
========== |
|
|
|
|
| 27.1
In addition, the chairman, chief executive, one director and three executives
have also been provided free use |
|
| of
company's vehicles. |
|
|
| 27.2
The aggregate amount charged in the accounts for the year for fees to 2
directors is Rupees 15,000 (2000: |
|
| Rupees
40,000 for 5 directors). |
|
|
| 28.
CREDIT RISK |
|
| The
management is of the view that it is not exposed to significant concentration
of credit risk as its financial statements |
|
| are
adequately diversified in organisation of sound financial standing covering
various industrial sectors and segments. |
|
| Further
an allowance for potential lease losses is maintained at a level which in the
judgement of management, is |
|
| adequate
to provide for potential lease losses on the portfolio that can be reasonably
anticipated. |
|
|
| A
sector wise break up of lease portfolio as on June 30, 2001 is as follows: |
|
|
|
EXPOSURE |
|
| SECTOR |
|
Rupees |
% |
|
| TEXTILE |
|
5,121,267 |
6.41 |
|
| SUGAR
& ALLIED |
|
4,390,474 |
5.49 |
|
| CEMENT |
|
3,800,000 |
4.76 |
|
| ELECTRICAL
& ENGINEERING |
|
33,413,767 |
41.82 |
|
| STEEL
AND ALLIED |
|
5,768,277 |
7.22 |
|
| TRANSPORT
& COMMUNICATION |
|
1,553,643 |
1.94 |
|
| CHEMICAL
& PHARMACEUTICALS |
|
1,011,831 |
1.27 |
|
| FOOD
& ALLIED |
|
6,721,999 |
8.41 |
|
| OTHERS |
|
18,124,400 |
22.68 |
|
|
----------- |
----------- |
|
|
79,905,668 |
100.00 |
|
|
========== |
========== |
|
|
|
|
| 29.
FAIR VALUE OF FINANCIAL INSTRUMENTS |
|
| The
carrying value of financial assets and liabilities approximates their fair
values as reflected in the financial statements. |
|
|
| 30.
CORRESPONDING FIGURES |
|
| Figures
have been re-arranged and re-grouped wherever necessary for the purpose of
comparison. |
|
|
|
Chief Executive |
|
Director |
|
|
|
| Pattern
of Shareholding As at June 30, 2001 |
|
|
| Number of |
Share Holdings |
Total Shares |
|
| Share-holdes |
From |
To |
Held |
|
| 212 |
1 |
500 |
68,700 |
|
| 138 |
501 |
1,000 |
76,800 |
|
| 82 |
1,001 |
2,000 |
83,300 |
|
| 21 |
2,001 |
3,000 |
33,500 |
|
| 14 |
3,001 |
4,000 |
52,600 |
|
| 15 |
4,001 |
5,000 |
75,000 |
|
| 24 |
5,001 |
10,000 |
222,100 |
|
| 13 |
10,001 |
20,000 |
226,300 |
|
| 2 |
20,001 |
30,000 |
60,000 |
|
| 1 |
30,001 |
40,000 |
40,000 |
|
| 5 |
40,001 |
50,000 |
240,500 |
|
| 3 |
50,001 |
100,000 |
300,000 |
|
| 2 |
100,001 |
150,000 |
218,600 |
|
| 2 |
150,001 |
200,000 |
380,600 |
|
| 1 |
200,001 |
250,000 |
250,000 |
|
| 1 |
250,001 |
300,000 |
292,500 |
|
| 1 |
450,001 |
500,000 |
490,000 |
|
| 3 |
550,001 |
Above |
6,889,500 |
|
| ---------- |
---------- |
---------- |
---------- |
|
| 540 |
|
10,000,000 |
|
| ========== |
========== |
========== |
========== |
|
|
|
| There
are no shareholdings in the slabs that have not been included above. |
|
|
| Category of |
|
Number of |
Shares |
Percentage |
|
| Share-holders |
|
Share-holders |
held |
|
|
| Individuals |
|
355 |
1,662,200 |
16.62 |
|
| Banks |
|
1 |
50,000 |
0.50 |
|
| Financial
Institutions |
|
8 |
2,059,500 |
20.59 |
|
| Insurance
Companies |
|
3 |
56,000 |
0.56 |
|
| Modarabas
Companies |
|
7 |
2,801,800 |
28.02 |
|
| Private
Ltd. Companies |
|
3 |
70,500 |
0.71 |
|
| Investment
Companies |
|
2 |
28,800 |
0.29 |
|
| Joint
Stock Companies |
|
2 |
827,000 |
8.27 |
|
| Central
Depository Company |
159 |
2,444,200 |
24.44 |
|
|
---------- |
---------- |
---------- |
|
|
540 |
10,000,000 |
100.00 |
|
|
========== |
========== |
========== |
|
|
|
|
|
|
|
|
|
|
|
|
|
