| Network Leasing Corporation Limited |
|
|
|
|
|
|
|
|
| Annual
Report 2001 |
|
|
|
| Contents |
|
|
| Company
Information |
|
| Directors'
Report |
|
| Operational
Review |
|
| Notice
of the Annual General Meeting |
|
| Auditors'
Report |
|
| 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 |
|
|
| Mr.
Mohammed Elias |
Dr. Mahfooz Ali |
|
| Ms.
Musaret Siddiqi |
Mr. Abdul Qayyum Bux |
|
| Mr.
Zaigham M. Rizvi |
Mr. Yusuf A. Sattar |
|
| Mr.
Hanif A. Sattar |
Mr. Asif Siddiqi |
|
|
| Company
Secretary |
|
| Mr.
M. Nadeem Ahmed |
|
|
| Registered
& Head Office |
301-302, Gul Tower, |
|
|
|
I.I. Chundrigar Road,
Karachi-74000, Pakistan. |
|
|
|
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| Telephone |
|
(92-21) 242-4616,
242-4655 |
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| Telefax |
|
(92-21) 242-5366,
244-3547 |
|
| e-mail |
|
micleas@artglobal.net |
|
|
| Lahore Office |
|
67-A/2, Gulberg III,
Lahore. |
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| Telephone |
|
(042) 575-0429 |
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| Telefax |
|
(042) 571-1919 |
|
|
|
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| Peshawar
Office |
No.6, 2nd Floor, Fawad
Plaza, |
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|
University Road,
Peshawar. |
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| Telephone |
|
(091) 45 571 |
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| Telefax |
|
(091) 45 571 |
|
|
| Lenders
& Bankers |
The World Bank |
|
|
|
The Asian Development
Bank |
|
|
|
Swiss Agency for
Development and Cooperation |
|
|
|
Pak-Libya Holding Co.
(Pvt.) Limited |
|
|
|
United Bank Limited |
|
|
|
ABN-Amro Bank |
|
|
|
Muslim Commercial Bank
Limited |
|
|
|
Oman International Bank
S.A.O.G. |
|
|
|
Habib Bank Limited |
|
|
|
Allied Bank Limited |
|
|
|
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| Auditors |
|
Ford Rhodes Robson
Morrow, Chartered Accountants |
|
|
|
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| Legal Advisors |
|
Mehrab Gul, Advocates |
|
|
|
| DIRECTORS'
REPORT TO THE SHAREHOLDERS |
|
|
| Your
directors have pleasure in presenting to the shareholders the results and the
Annual Report for |
|
| the
year ended June 30, 2001. |
|
|
| Financials |
|
| Profit
after tax for the year ended June 30, 2001 was Rs. 5,608,820, while the
profit after tax for the |
|
| year
ended June 30, 2000 was Rs. 7,652,925. |
|
|
| The
operating profit decrease considerably due to higher financial charges.
Disbursements of new long |
|
| term
loans negotiated during the year were delayed. In order to continue with the
leasing operations, |
|
| short
term borrowings were obtained at higher rates. Due to difficult economic and
business situation, |
|
| the
corresponding lease rates could not be increased. During the current year
(from July 2001) however, |
|
| long
term Loans have been obtained and the expensive short term borrowings have
been repaid. |
|
|
| Your
directors are hopeful that the business conditions would stabilise soon and
your company's |
|
| profitability
would improve during the financial year ending June 2002. |
|
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| During
the year under review, the company was due to receive technical assistance
from development |
|
| financial
institutions, amounting to Rs. 6,779,683 in respect of micro and small
enterprise development |
|
| costs.
The amount is expected to be re-imbursed in the current financial year. |
|
|
| The
profit is proposed to be appropriated as under: |
|
|
|
|
|
2001 |
2000 |
|
|
|
|
Rupees |
Rupees |
|
|
| Operating profit |
|
|
|
1,127,338 |
10,083,420 |
|
|
| Taxation: |
|
| Deferred |
|
(6,500,353) |
-- |
|
| Current |
|
1,424,536 |
2,430,495 |
|
| Prior |
|
594,335 |
-- |
|
|
|
------------------ |
------------------ |
|
|
|
(4,481,482) |
2,430,495 |
|
|
|
------------------ |
------------------ |
|
| Profit after tax |
|
|
5,608,820 |
7,652,925 |
|
| Unappropriated
profit brought forward |
|
1,250,848 |
3,668,073 |
|
|
|
------------------ |
------------------ |
|
|
|
6,859,668 |
11,320,998 |
|
|
|
| Appropriations: |
|
| Transfer
to special reserve |
|
|
1,121,764 |
1,530,585 |
|
| Capital
reserve for deferred taxation |
|
-- |
1,039,565 |
|
| Proposed
dividend |
|
|
-- |
7,500,000 |
|
|
|
|
|
------------------ |
------------------ |
|
|
|
1,121,764 |
10,070,150 |
|
|
|
------------------ |
------------------ |
|
| Unappropriated
profit carried forward |
|
5,737,904 |
1,250,848 |
|
|
========== |
========== |
|
|
| Directors |
|
| Mr.
Emile H.J. Groot (nominee director of FMO) resigned during the year under
review. FMO's normal |
|
| period
of investment in financial institutions is six years which were completed in
August 2000 and the |
|
| shares
sold in February 2001 .The board wishes to put on record its deep
appreciation for the services |
|
| rendered
by Mr. Groot and the support extended by FMO in the development of your
company. |
|
| Since
the number of the remaining directors is eight, no new appointment was
considered necessary. |
|
|
| Share
capital enhancement |
|
| As
per the approval of Securities and Exchange Commission of Pakistan, your
company will increase |
|
| its
capital to Rs. 200 million by: |
|
|
| i)
issuing 7.5 million ordinary right shares at Rs. 7/- (at a discount of 30%). |
|
| ii)
utilizing the reserves towards the enhancement of the capital. |
|
|
| Auditors |
|
| Notice
has been received under section 253(2) of the Companies Ordinance, 1984, from
a shareholder, |
|
| proposing
the name of M/s Muniff Ziauddin & Co., Chartered Accountants to be
appointed as the |
|
| Auditors
at the forthcoming Annual General Meeting, in place of the retiring Auditors
M/s Ford Rhodes |
|
| Robson
Morrow. |
|
|
| Shareholding
pattern |
|
| A
statement reflecting the pattern of shareholding is attached to the Annual
Report 2001. |
|
|
| Acknowledgment |
|
| The
directors wish to place on record their appreciation for the hard work put in
and the dedication |
|
| displayed
by the staff and the management in performance of their duties. |
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|
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|
On behalf of the Board |
|
|
|
|
|
| Karachi. |
|
Mohammed Elias |
|
| 21st November, 2001 |
|
Chairman |
|
|
|
|
| OPERATIONAL
REVIEW |
|
|
| Overview |
|
| On
30th June 2001, the company completed its 6th year of full operations. With
everyone's |
|
| support
and understanding, we have managed to make steady progress. We are cautiously |
|
| optimistic
that the economic situation would improve and we would be able to expand our
outreach |
|
| further
during the current year. |
|
|
| Leasing
Operations |
|
| In
accordance with our mission, leasing to micro and small enterprises (MSE) has
been progressing |
|
| reasonably
well on a nationwide basis. |
|
|
| Health
and education have been identified as the two key areas which not only effect
the present |
|
| but
coming generations as well. Consequently, considerable efforts are directed
towards these |
|
| sectors
in all low income areas. Women and children are the main beneficiaries in
these sectors. |
|
|
| The
separate Women Division established is now functioning reasonably
satisfactorily. Our |
|
| endeavour
during the period has been to reach the women at the grass root level. We
have |
|
| succeeded
to a certain extent by extending our outreach to the main cities and
surrounding |
|
| villages,
but this process will take time since we accord high priority to the clients'
income |
|
| generating
capabilities in order to make the operation sustainable. |
|
|
| Geographical
Coverage |
|
| During
the period under review, regular visits were made by our senior executives as
well as the |
|
| program
officers to the villages and semi-urban areas in Sindh, Punjab and NWFR |
|
|
| The
Lahore office has now been functioning for over 4 years and the client base
there is expanding. |
|
| The
Peshawar office is gradually being re-inforced and activated further as we
are endeavoring to |
|
| increase
the operations in the NWFR |
|
|
| Institutional
Development |
|
| The
internal systems and controls for monitoring the clients were further
strengthened during the |
|
| period.
Since the number of clients had increased, a number of tasks that were
previously done |
|
| manually,
had to be computerized. Special emphasis was laid on the recovery systems and |
|
| clients
monitoring. Due to increase in the number of clients, the number of late
payers and |
|
| problem
cases naturally increased. In order to cope with that, additional staff was
hired and |
|
| trained. |
|
|
| Support
and Training to MSE Clients |
|
| Assisting
the client in preparing the financial statements remains standardized. |
|
|
| Our
staff prepare the client's financial statements for the last 3 years, with
the help of the |
|
| information
and figures provided by the clients. The procedure is followed in each and
every case |
|
| where
the clients cannot prepare the statements themselves. In cases where the
clients have a |
|
| little
knowledge but have not prepared the accounts, our staff help them prepare the
statements. |
|
|
| Recoveries |
|
| The
rental recovery continues to be satisfactory. The overdue rental position of
over 3 months on |
|
| 30
June 2001 was 3.47% of the total portfolio. |
|
|
| There
were some willful default cases. These lessees have been taken to the banking
court. We |
|
| are
reasonably hopeful that in the end the amounts will be recovered. In other
cases the assets |
|
| were
repossessed. |
|
|
| Resource
Mobilization |
|
| During
the year we mobilized Rs. 130 million on short term basis from various
financial institutions. |
|
| In
addition we raised Rs. 100 million through the issuance of Term Finance
Certificates. |
|
|
| Credit Rating |
|
| Pakistan
Credit Rating Agency (PACRA) who are the affiliates of Fitch Inc., in
February 2001, |
|
| maintained
their assigned A-3, short term and BBB long term for our entity rating. |
|
|
| Acknowledgement |
|
| We
are grateful to FMO, SDC (the Government of Switzerland), the World Bank
Group, the Asian |
|
| Development
Bank and the Ministry of Finance for their continued support. |
|
|
| We
owe special gratitude to our shareholders and the clients for their kindness
and support. |
|
|
| We
take this opportunity to thank the Securities and Exchange Commission of
Pakistan and the |
|
| State
Bank of Pakistan for their support and understanding. |
|
|
| Karachi. |
|
Musaret Siddiqi (Ms.) |
|
| 22nd
November, 2001 |
|
Executive Director - Operations |
|
|
|
|
| NOTICE
OF THE ANNUAL GENERAL MEETING |
|
|
| Notice
is hereby given that the Eighth Annual General Meeting of Network Leasing
Corporation |
|
| Limited
will be held at Beach Luxury Hotel, Moulvi Tamizuddin Khan Road, Karachi, on
Friday 21 |
|
| December
2001 at 9.00 a.m. to transact the following business: |
|
|
| 1.
To confirm the Minutes of the Extra Ordinary General Meeting held on 13 March
2001. |
|
|
|
|
| 2.
To receive, consider and adopt the Audited Accounts of the Company for the
year ended 30 |
|
| June
2001, together with the Directors' and Auditors' Reports thereon. |
|
|
|
|
| 3.
To appoint auditors. |
|
|
|
| Notice
has been received under section 253(2) of the Companies Ordinance, 1984, from
a |
|
| shareholder,
proposing the name of M/s Muniff Ziauddin & Co., Chartered Accountants,
to be |
|
| appointed
as the Auditors in place of the retiring Auditors M/s Ford Rhodes Robson
Morrow. |
|
|
|
|
| 4.
To transact any other business with the permission of the Chairman. |
|
|
|
|
|
|
|
By Order of the Board |
|
|
|
|
|
|
|
|
|
|
M. Nadeem Ahmed |
|
| Karachi:
24th November 2001 |
|
|
Company Secretary |
|
|
|
| Notes: |
|
|
| a)
The Share Transfer Books of the Company will remain closed from December 15,
2001 to |
|
| December
21,2001 (both days inclusive).The Share Department of the company is located |
|
| at
404,TradeTower, Abdullah Haroon Road, Karachi. (Phone No. 568-7839 and
568-5930). |
|
|
|
|
| b)
A member entitled to attend and vote at the meeting may appoint another
member as his/ |
|
| her
proxy to attend and vote on his/her behalf. Proxies, in order to be
effective, must be |
|
| received
at the Registered Office of the Company located at 301- 302, Gul Tower, I.I. |
|
| Chundrigar
Road, Karachi, (Phone No. 242-4655 and 242-4616) duly stamped, signed |
|
| and
witnessed, not later than 48 hours before the meeting. |
|
|
|
|
| c)
Members are requested to notify any changes in their addresses immediately. |
|
|
|
|
| d)
Account holders and sub-account holders holding book entry securities of the
Company |
|
| in
Central Depository Company of Pakistan Limited, who wish to attend the Annual
General |
|
| Meeting,
are requested to bring original National Identity Card for identification
purpose. |
|
|
|
| AUDITORS
REPORT TOTHE MEMBERS |
|
|
| We
have audited the annexed balance sheet of Network Leasing Corporation 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,
we report that - |
|
|
| (a)
in our opinion, proper books of accounts have been kept by the company as
required by |
|
| the
Companies Ordinance, 1984. |
|
|
|
|
|
| (b)
in our opinion - |
|
|
|
| (i)
the balance sheet and profit and loss account together with the notes thereon
have |
|
| been
drawn up in conformity with the Companies Ordinance, 1984, and are in |
|
| agreement
with the books of account and are further in accordance with accounting |
|
| policies
consistently applied; |
|
|
|
| (ii)
the expenditure incurred during the year was for the purpose of the company's |
|
| business; and |
|
|
| (iii)
the business conducted, investments made and the expenditure incurred during
the |
|
| year
were in accordance with the objects of the company; |
|
|
| (c)
in our opinion and to the best of our information and according to the
explanations given to |
|
| us,
the balance sheet, profit and loss account, cash flow statement and statement
of |
|
| changes
in equity together with the notes forming part thereof conform with approved |
|
| accounting
standards as applicable in Pakistan, and give the information required by the |
|
| Companies
Ordinance, 1984, in the manner so required and respectively give a true and |
|
| fair
view of the state of the company's affairs as at June 30, 2001 and of the
profit, its cash |
|
| flow
and changes in equity for the year then ended; |
|
|
| 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 that Ordinance; and |
|
|
|
| e)
without qualifying our opinion we draw attention to note 9.6 of the financial
statements |
|
| which
indicates that there is uncertainty with respect to the extent and timing of
recovery |
|
| in
respect of which no provision has been made in the annexed financial
statements. |
|
|
| Karachi. |
|
|
FORD, RHODES, ROBSON, MORROW |
|
| 19th
November, 2001 |
|
|
Chartered Accountants |
|
|
|
| BALANCE
SHEET AS AT JUNE 30, 2001 |
|
|
|
|
|
2001 |
2000 |
|
|
|
Note |
Rupees |
Rupees |
|
|
|
| ASSETS |
|
|
|
| Tangible
fixed assets |
|
3 |
47,026,027 |
14,102,467 |
|
| Investment
in leases |
|
4 |
|
|
|
| Minimum
lease payments receivable |
|
482,179,061 |
394,922,565 |
|
| Residual
value of leased assets |
|
|
69,431,183 |
52,498,565 |
|
|
|
|
------------------ |
------------------ |
|
| Installment
contracts receivable |
|
|
551,610,244 |
447,421,130 |
|
| Unearned
finance income |
|
|
(91,008,714) |
(90,805,679) |
|
|
|
|
------------------ |
------------------ |
|
| Net
investment in leases |
|
|
460,601,530 |
356,615,451 |
|
| Current
maturity of net investment in leases |
|
(189,155,582) |
(136,610,961) |
|
| Provision
for potential lease losses |
5 |
(8,751,429) |
(2,336,964) |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
262,694,519 |
217,667,526 |
|
| Long
term investments |
|
6 |
34,170,000 |
6,685,000 |
|
| Long
term loans, deposits and deferred costs |
7 |
12,830,791 |
9,440,362 |
|
| Deferred
taxation |
|
26 |
6,500,353 |
-- |
|
|
| CURRENT
ASSETS |
|
| Current
maturity of net investment in leases |
|
189,155,582 |
136,610,961 |
|
| Short
term investments |
|
8 |
25,698,000 |
700,000 |
|
| Advances,
deposits, prepayments and |
|
|
| other
receivables |
|
9 |
26,796,746 |
25,079,724 |
|
| Cash
and bank balances |
|
10 |
45,100,991 |
86,181,852 |
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
286,751,319 |
248,572,537 |
|
|
|
|
------------------ |
------------------ |
|
| TOTAL
ASSETS |
|
649,973,009 |
496,467,892 |
|
|
|
========== |
========== |
|
|
|
|
|
| EQUITY
AND LIABILITIES |
|
|
|
| SHARE
CAPITAL AND RESERVE |
|
| Authorised
capital |
|
| 30,000,000
(2000: 20,000,000) ordinary |
|
| shares
of Rs. 10/- each |
|
300,000,000 |
200,000,000 |
|
|
|
|
========== |
========== |
|
| Issued,
subscribed and paid-up capital |
11 |
100,000,000 |
100,000,000 |
|
| Reserves |
|
|
18,944,446 |
13,335,626 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
118,944,446 |
113,335,626 |
|
|
|
|
| Redeemable
capital |
|
12 |
99,940,000 |
-- |
|
| Long
term loans and finances |
|
13 |
150,431,797 |
164,627,748 |
|
| Deposits
on lease contracts |
|
14 |
52,042,659 |
39,084,465 |
|
|
|
|
|
|
| CURRENT
LIABILITIES |
|
|
|
| Current
maturity of long term liabilities |
15 |
51,972,166 |
38,157,384 |
|
| Short
term loans and finances |
|
16 |
95,000,000 |
95,000,000 |
|
| Short
term running finances |
|
17 |
58,302,566 |
22,332,730 |
|
| Creditors,
accrued and other liabilities |
18 |
23,339,375 |
23,929,939 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
228,614,107 |
179,420,053 |
|
| COMMITMENTS |
|
19 |
|
|
|
|
|
------------------ |
------------------ |
|
| TOTAL
EQUITY AND LIABILITIES |
|
649,973,009 |
496,467,892 |
|
|
|
========== |
========== |
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
Mohammed Elias |
|
Asif Siddiqi |
|
|
Chairman |
|
Chief Executive |
|
|
|
|
| PROFIT
AND LOSS ACCOUNT FORTHEYEAR ENDED JUNE 30, 2001 |
|
|
|
|
2001 |
2000 |
|
|
Note |
Rupees |
Rupees |
|
|
|
|
| INCOME |
|
|
|
| Income
from lease operations |
|
20 |
83,957,387 |
59,929,541 |
|
| Investment
income |
|
21 |
5,753,198 |
2,657,247 |
|
| Other income |
|
|
22 |
7,649,284 |
5,972,803 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
97,359,869 |
68,559,591 |
|
|
| EXPENDITURE |
|
| Direct
cost of leases |
|
|
4,364,634 |
4,478,460 |
|
| Administrative
and operating expenses |
23 |
19,885,823 |
16,426,140 |
|
| Financial
charges |
|
24 |
63,644,522 |
35,724,720 |
|
| Amortization
of deferred costs |
|
|
1,226,669 |
770,647 |
|
| Provision
and write offs on lease portfolio |
25 |
7,110,883 |
1,076,204 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
96,232,531 |
58,476,171 |
|
|
|
|
------------------ |
------------------ |
|
| Operating
profit for the year |
|
|
1,127,338 |
10,083,420 |
|
|
| Taxation |
|
|
|
|
| Deferred |
|
|
|
(6,500,353) |
-- |
|
| Current |
|
|
|
1,424,536 |
2,430,495 |
|
| Prior |
|
|
|
594,335 |
-- |
|
|
|
|
------------------ |
------------------ |
|
|
|
26 |
(4,481,482) |
2,430,495 |
|
|
|
|
------------------ |
------------------ |
|
| Profit
for the year |
|
|
5,608,820 |
7,652,925 |
|
| Unappropriated
profit brought forward |
|
1,250,848 |
3,668,073 |
|
|
|
|
------------------ |
------------------ |
|
| Profit
available for appropriation |
|
|
6,859,668 |
11,320,998 |
|
|
|
| Appropriations |
|
| Transfer
to special reserve |
|
|
1,121,764 |
1,530,585 |
|
| Transfer
to capital reserve for deferred taxation |
|
-- |
1,039,565 |
|
| Proposed
final dividend - Re. Nil |
|
|
|
|
| [2000:
Re. 0.75 (7.5%) per share] |
|
|
-- |
7,500,000 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
1,121,764 |
10,070,150 |
|
|
|
|
------------------ |
------------------ |
|
| Unappropriated
profit carried forward |
|
5,737,904 |
1,250,848 |
|
|
|
|
|
========== |
========== |
|
| Basic
earnings per share |
|
27 |
0.56 |
0.77 |
|
|
|
|
|
========== |
========== |
|
| Diluted
earnings per share |
|
27 |
0.52 |
0.70 |
|
|
|
|
========== |
========== |
|
|
|
|
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
|
Mohammed Elias |
|
Asif Siddiqi |
|
|
Chairman |
|
Chief Executive |
|
|
|
| CASH
FLOW STATEMENT FOR THE YEAR ENDED JUNE 30, 2001 |
|
|
|
|
2001 |
2000 |
|
|
Note |
Rupees |
Rupees |
|
|
|
|
| CASH
FLOW FROM OPERATING ACTIVITIES |
|
|
| Cash
generated from operations |
|
28 |
64,179,109 |
44,366,767 |
|
|
|
|
|
|
| Income tax paid |
|
|
|
(1,549,612) |
(7,094,348) |
|
| Interest/mark-up
paid |
|
|
(57,612,383) |
(30,003,003) |
|
| Interest/mark-up
received |
|
|
8,372,195 |
5,291,164 |
|
| Net
investment in leases - net of repayments |
|
(103,986,079) |
(97,648,537) |
|
| Long
term loans and deposits |
|
|
(1,021,900) |
92,000 |
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
(155,797,779) |
(129,362,724) |
|
|
|
|
------------------ |
------------------ |
|
| Net
cash used in operating activities |
|
(91,618,670) |
(84,995,957) |
|
|
|
| CASH
FLOW FROM INVESTING ACTIVITIES |
|
| Purchase
of fixed assets |
|
(36,897,643) |
(1,040,958) |
|
| Sale
proceed of fixed assets |
|
552,400 |
170,000 |
|
| Gain
on sale of shares |
|
|
-- |
782,570 |
|
| Purchase
of long term investments |
|
(27,485,000) |
-- |
|
| Purchase
of short term investments |
|
(24,998,000) |
-- |
|
|
|
------------------ |
------------------ |
|
| Net
cash used in investing activities |
|
(88,828,243) |
(88,388) |
|
|
|
| CASH
FLOW FROM FINANCING ACTIVITIES |
|
| Redeemable
capital - net of repayment |
|
99,980,000 |
-- |
|
| Long
term loans and finances - net of repayment |
|
(4,309,751) |
19,289,139 |
|
| Short
term loans and finances - net of repayment |
|
-- |
91,666,666 |
|
| Advance
repaid / (given) |
|
2,014,000 |
(2,014,000) |
|
| Obligations
under finance lease repaid |
|
|
(347,608) |
|
| Deposits
on lease contracts - net |
|
16,846,776 |
11,303,571 |
|
| Dividend paid |
|
|
(7,368,191) |
(5,095) |
|
| Deferred costs |
|
|
(3,766,6182 |
-- |
|
|
|
|
------------------ |
------------------ |
|
| Net
cash generated from financing activities |
|
103,396,216 |
119,892,673 |
|
|
|
|
------------------ |
------------------ |
|
| Net
(decrease) / increase in cash and cash equivalents |
(77,050,697) |
34,808,328 |
|
| Cash
and cash equivalent as at the beginning of the year |
63,849,122 |
29,040,794 |
|
|
|
|
------------------ |
------------------ |
|
| Cash
and cash equivalent as at the end of the year |
|
(13,201,575) |
63,649,122 |
|
|
|
========== |
========== |
|
|
|
|
|
| Cash
and cash equivalent comprise of: |
|
|
| Cash
and bank balances |
|
10 |
45,100,991 |
86,181,852 |
|
| Short
term running finances |
|
17 |
(58,302,566) |
(22,332,730) |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
(13,201,575) |
63,849,122 |
|
|
|
========== |
========== |
|
|
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
Mohammed Elias |
|
|
Asif Siddiqi |
|
|
Chairman |
|
|
Chief Executive |
|
|
|
| STATEMENT
OF CHANGES IN EQUITY FORTHEYEAR ENDED JUNE 30, 2001 |
|
|
|
|
Capital
reserves |
Revenue reserve |
|
|
|
Issued, |
Special |
Deferred |
Unappropriated |
Total |
Total |
|
|
|
subscribed |
reserve |
taxation |
profit |
reserves |
|
|
|
|
and paid-up |
|
reserve |
|
|
|
capital |
|
|
|
|
Rupees |
Rupees |
Rupees |
Rupees |
Rupees |
Rupees |
|
|
|
|
| Balance
as at July 1, 1999 |
100,000,000 |
6,643,241 |
2,871,387 |
3,668,073 |
13,182,701 |
113,182,701 |
|
| Profit
after taxation |
-- |
-- |
-- |
7,652,925 |
7,652,925 |
7,652,925 |
|
| Transfer
to special reserve |
-- |
1,530,585 |
-- |
(1,530,585) |
-- |
-- |
|
| Transfer
to deferred taxation reserve |
-- |
-- |
1,039,565 |
(1,039,565) |
-- |
-- |
|
| Proposed
dividend |
-- |
-- |
-- |
(7,500,000) |
(7,500,000) |
(7,500,000) |
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
| Balance
as at June 30, 2000 |
100,000,000 |
8,173,826 |
3,910,952 |
1,250,848 |
13,335,626 |
113,335,626 |
|
|
|
|
|
| Profit
after taxation |
-- |
-- |
-- |
5,608,820 |
5,608,820 |
5,608,820 |
|
| Transfer
to special reserve |
-- |
1,121,764 |
-- |
(1,121,764) |
-- |
-- |
|
| Transfer
from deferred taxation reserve |
-- |
-- |
(3,910,952) |
3,910,952 |
-- |
-- |
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
| Balance
as at June 30, 2001 |
100,000,000 |
9,295,590 |
-- |
9,648,856 |
18,944,446 |
118,944,446 |
|
|
|
========== |
========== |
========== |
========== |
========== |
========== |
|
|
| The
special reserve represents profit set aside as required under the relevant
provision of the Leasing |
|
| Companies
(Establishment and Regulation) Rules, 2000. |
|
|
|
Mohammed Elias |
|
Asif Siddiqi |
|
|
Chairman |
|
Chief Executive |
|
|
|
| NOTES
TO THE ACCOUNTS FOR THE YEAR ENDED JUNE 30, 2001 |
|
|
| 1.
THE COMPANY AND ITS OPERATIONS |
|
| The
company was incorporated in Pakistan on August 19, 1993. Commercial operation
effectively |
|
| began
in January 1995. The company is listed on all of the Stock Exchanges of the
country and |
|
| is
principally engaged in lease financing of assets, which is conducted through
offices in Karachi, |
|
| Lahore
and Peshawar. The company is classified as a Non-Banking Financial
Institution by the |
|
| State
Bank of Pakistan and is regulated by the Securities and Exchange Commission
of Pakistan. |
|
|
| 2.
SIGNIFICANT ACCOUNTING POLICIES |
|
|
|
| 2.1
Basis of preparation |
|
|
|
| These
financial statements have been prepared in accordance with the requirements
of the |
|
| Companies
Ordinance, 1984 and approved accounting standards as applicable in Pakistan. |
|
|
| 2.2
Accounting convention |
|
| These
accounts have been prepared under the historical cost convention. |
|
|
|
|
| 2.3
Revenue recognition |
|
|
|
|
|
|
| Finance
lease Income |
|
| The
company follows the financing method in accounting for recognition of lease
income. |
|
| Under
this method the unearned lease income, that is the excess of aggregate lease
rental |
|
| and
estimated residual value over the cost of leased asset, is taken to income
over the |
|
| term
of the lease. A portion of unearned lease income approximating the costs
incurred in |
|
| writing
the lease is taken to "income from lease operations" at the time of
execution of the |
|
| lease.
The remainder of unearned lease income is taken to income over the term of
the |
|
| lease,
so as to produce a systematic return on net investment in leases. |
|
|
| Income
pertaining to the periods falling between rentals due and the year end is
recognised |
|
| on
an accruals basis. |
|
|
|
|
|
| Operating
lease income |
|
|
| Rental
income from assets given on operating lease is recognised on accruals basis
over |
|
| the lease period. |
|
|
| Other Income |
|
|
|
| Return
on bank deposits, investments and government securities is recognised on an |
|
| accruals basis. |
|
|
|
|
|
|
| 2.4 Taxation |
|
|
|
|
|
|
|
| Current |
|
|
|
| Income
for the purpose of computing current taxation is determined under the
provisions of |
|
| income
tax law whereby lease rentals received or receivable is deemed to be income. |
|
| Provision
for taxation is thus based on income determined in accordance with the |
|
| requirements
of the income tax law. |
|
|
|
|
| Deferred
tax is calculated using the liability method on all temporary differences at
the |
|
| balance
sheet date, between the tax bases of the assets and liabilities and their
carrying |
|
| amounts.
Deferred tax assets are recognised for all deductible temporary differences
to the |
|
| extent
that it is probable that the temporary differences will reserve and
sufficient taxable |
|
| income
will be available against which the temporary differences can be utilised. |
|
|
|
|
| The
carrying amount of all deferred tax assets is reviewed at each balance sheet
date and |
|
| reduced
to the extent that is no longer probable that sufficient taxable profits will
be available |
|
| to
allow all or part of the deferred tax assets to be utilised. |
|
|
|
|
| Deferred
tax assets and liabilities are measured at the tax rates that are expected to
apply |
|
| to
the period when the asset is realised or the liability is settled, based on
the tax rates (and |
|
| tax
laws) that have been enacted at the balance sheet date. |
|
|
| 2.5
Tangible fixed assets and depreciation |
|
|
|
|
|
|
| Owned |
|
|
|
| Fixed
assets are stated at cost less accumulated depreciation. Depreciation is
charged to |
|
| income
applying the straight line method, whereby the cost of an asset is
written-off over |
|
| its
useful life at the rates specified in note 3 to the accounts. In respect of
additions and |
|
| disposals
of assets during the year, depreciation is charged from the month of
acquisition |
|
| and
upto the month preceding the disposal respectively. |
|
|
|
|
| Gains
and losses on disposal of fixed assets are taken to profit and loss account. |
|
|
|
|
| Normal
repairs and maintenance are charged to income as and when incurred. Major
renewals |
|
| and
improvements are capitalised and assets so replaced, if any, are retired. |
|
|
|
|
| Operating
lease assets |
|
|
|
| Operating
lease assets are stated at cost less accumulated depreciation. Depreciation
is |
|
| charged
to income applying the straight line method, whereby the cost of an asset in |
|
| written-off
over its useful life at the rates specified in note 3 to the accounts. |
|
|
|
|
| Normal
repairs and maintenance are charged to income as and when incurred. Major
renewals |
|
| and
improvements are capitalised and the assets so replaced, if any, are retired. |
|
|
| 2.6
Deferred costs |
|
|
|
| Cost
relating to increase in share capital and issuance of term finance
certificates are |
|
| amortised
over a period of five years from the dated of their incurrence. |
|
|
|
|
| Cost
incurred for hedging mechanism on foreign currency loans are amortised over
the |
|
| term
of the respective loan. |
|
|
|
|
| 2.7
Provision for potential lease losses |
|
| The
provision for potential lease losses is maintained at a level which, in the
judgement of |
|
| the
management, is adequate to provide for potential losses on the lease
portfolio that can |
|
| reasonably
be anticipated. |
|
|
|
| 2.8
Staff retirement benefits |
|
|
|
|
|
|
| Provident fund |
|
|
|
| The
company operates a contributory provident fund for all its confirmed
employees, for |
|
| which
equal monthly contributions are made by both the company and the employees at |
|
| 10%
of basic pay in accordance with the rules of the fund. |
|
|
| 2.9 Investments |
|
|
|
|
| Long
term investments |
|
| These
are stated at cost. However, cost is reduced to recognise any decline
thereof, other |
|
| than temporary. |
|
|
|
|
|
| Dividend
income is recognised when the right to receive such dividend becomes vested. |
|
|
|
|
| Short
term investments |
|
| These
are stated at lower of cost and market value on a portfolio basis. |
|
|
| 2.10
Foreign currency translations |
|
| Transactions
in foreign currencies are accounted for in rupees at the rate of exchange |
|
| prevailing
on the date of the transaction. Monetary assets and liabilities in foreign
currencies |
|
| are
translated into rupees at the rates of exchange prevailing at the balance
sheet date. |
|
| Realised
and unrealised exchange gains and losses are dealt with in the profit and
loss |
|
| account
other than those described in note 2.6. Foreign currency loans registered
under |
|
| Exchange
Risk Coverage Scheme of the State Bank of Pakistan are translated into rupees |
|
| at
the contracted rate. |
|
|
| 3.
TANGIBLE FIXED ASSETS |
|
|
|
|
|
COST |
|
DEPRECIATION |
|
Written |
|
|
|
|
down value |
|
|
|
As at |
Additions/ |
As at June |
|
As at |
Charge |
On adjustments/ |
As at June |
as at |
|
|
|
July 1, 2000 |
(Disposals) |
30, 2001 |
Rate |
July 1, 2000 |
for the year |
(disposals) |
30, 2001 |
June 30, 2001 |
|
|
|
Rupees |
Rupees |
Rupees |
% |
Rupees |
Rupees |
Rupees |
Rupees |
Rupees |
|
| Owned |
|
|
|
|
| Office permises |
|
9,388,585 |
-- |
9,388,585 |
25 |
943,040 |
234,715 |
-- |
1,177,755 |
8,210,830 |
|
| Leasehold
improvements |
1,027,257 |
14,714 |
1,041,971 |
10 |
434,607 |
103,329 |
-- |
587,936 |
454.04 |
|
| Furniture
and fixtures |
3,850,994 |
408,720 |
4,259,714 |
10 |
1,338,216 |
410,126 |
-- |
1,748,342 |
2,511,372 |
|
| Computer
equipment |
2,198,004 |
960,284 |
3,158,288 |
20 |
1,409,252 |
421,013 |
-- |
1,830,265 |
1,328,023 |
|
| Office
equipment |
901,100 |
309,812 |
1,030,043 |
10 |
393,695 |
95,475 |
-- |
391,820 |
638,223 |
|
|
|
|
(180,869) |
|
|
|
(97,350) |
|
|
| Motor vehicles |
|
4,770,432 |
2,043,493 |
5,961,776 |
20 |
3,465,095 |
580,716 |
3,580,821 |
-- |
2,380,955 |
|
|
|
|
(852,149) |
|
|
|
(464,990) |
|
|
|
|
------------------ |
------------------ |
------------------ |
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
|
|
22,136,372 |
3,737,023 |
24,840,377 |
|
8,033,905 |
1,845,374 |
-- |
9,316,939 |
15,523,438 |
|
|
|
|
(1,033,018) |
|
(562,340) |
|
|
|
|
------------------ |
------------------ |
------------------ |
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
| For
operating lease |
|
| Machinery
and equipment |
-- |
33,160,620 |
33,160,620 |
10 |
-- |
1,658,031 |
-- |
1,658,031 |
31,502,589 |
|
|
------------------ |
------------------ |
------------------ |
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
|
-- |
33,160,620 |
33,160,620 |
|
-- |
1,658,031 |
-- |
1,658,031 |
31,502,589 |
|
|
------------------ |
------------------ |
------------------ |
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
| 2001 |
|
22,136,372 |
36,897,643 |
58,000,997 |
|
8,033,905 |
3,503,405 |
-- |
10,974,970 |
47,026,027 |
|
|
|
|
(1,033,018) |
|
|
|
(562,340) |
|
|
|
|
========== |
========== |
========== |
|
========== |
========== |
========== |
========== |
========== |
|
| 2000 |
|
21,686,234 |
1,040,958 |
22,136,372 |
|
6,027,557 |
2,141,997 |
402,636 |
8,033,905 |
14,102,467 |
|
|
|
|
(590,820) |
|
|
(538,285) |
|
|
|
========== |
========== |
========== |
|
========== |
========== |
========== |
========== |
========== |
|
|
| 3.1
The following owned assets were disposed off during the year: |
|
|
|
|
Accumulated |
Net book |
Sale |
Gain/(loss) |
Mode of |
Particulars |
|
|
| Description |
Cost |
depreciation |
value |
proceeds |
on disposal |
disposal |
of the buyer |
|
|
|
Rupees |
Rupees |
Rupees |
Rupees |
Rupees |
|
|
| OFFICE
EQUIPMENT |
|
| Photocopier |
180,869 |
97,350 |
83,519 |
35,000 |
(48,519) |
Trade-in |
Shirazi Trading Co.
(Pvt.) Ltd. |
|
|
|
|
3rd Floor, Ebrahim
Estate, |
|
|
|
|
Shahrah-e-Faisal,
Karachi. |
|
| MOTOR
VEHICLES |
|
|
|
| Suzuki Potohar |
392,049 |
376,267 |
15,782 |
150,000 |
134,218 |
Negotiation |
Zabta Khan |
|
|
|
C/o New Universal Motors, |
|
|
|
69-P, Khalid Bin Waleed
Road, |
|
|
|
Karachi. |
|
|
|
|
|
| Vespa Scooter |
62,700 |
29,260 |
33,440 |
23,500 |
(9,940) |
Negotiation |
Irfan Autos |
|
|
|
|
Frere Road, Karachi. |
|
|
|
|
|
| Vespa Scooter |
59,300 |
41,509 |
17,791 |
19,000 |
209 |
Negotiation |
Irfan Autos |
|
|
|
|
Frere Road, Karachi. |
|
|
|
|
|
| Honda CD-70 |
71,500 |
1,192 |
70,308 |
69,000 |
(1,308) |
Insurance |
Shaheen Insurance Co.
Ltd. |
|
|
claim |
605, 6th Floor, |
|
|
|
Progressive Plaza, |
|
|
|
Beaumont Road, Karachi. |
|
|
|
|
| Honda CD-70 |
71,500 |
-- |
71,500 |
69,000 |
(2,500) |
Insurance |
Shaheen Insurance Co.
Ltd. |
|
|
|
claim |
605, 6th Floor, |
|
|
|
|
Progressive Plaza, |
|
|
|
|
Beaumont Road, Karachi. |
|
|
|
|
|
| Honda CD- 70 |
71,500 |
3,576 |
67,924 |
69,000 |
1,076 |
Insurance |
Shaheen insurance Co.
Ltd. |
|
|
|
claim |
605, 6th Floor, |
|
|
|
|
Progressive Plaza, |
|
|
|
|
Beaumont Road, Karachi. |
|
|
|
|
|
| Hero RF- 70 A |
52,100 |
6,076 |
46,024 |
49,900 |
3,876 |
Insurance |
Shaheen Insurance Co.
Ltd. |
|
|
claim |
605, 6th Floor, |
|
|
|
Progressive Plaza, |
|
|
|
Beaumoot Road, Karachi. |
|
|
|
|
| Honda
CD-70 |
71,500 |
7,110 |
64,390 |
69,000 |
4,610 |
Insurance |
Gulf Insurance Company
Ltd. |
|
|
|
claim |
Gulf House, l-A, |
|
|
Link Mcleod Road, Lahore. |
|
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
| 2001 |
1,033,018 |
562,340 |
470,678 |
552,400 |
81,722 |
|
|
========== |
========== |
========== |
========== |
========== |
|
| 2000 |
590,820 |
135,649 |
455,171 |
170,000 |
(285,171) |
|
|
========== |
========== |
========== |
========== |
========== |
|
|
|
|
|
| 4.
INVESTMENT IN LEASES |
|
| Gross
investment in leases together with the present value of the minimum lease
payments |
|
| receivable
are as follows: |
|
|
|
2001 |
|
2000 |
|
|
|
|
Gross |
|
|
|
|
Investment |
Present |
Investment |
Present |
|
|
|
in Leases |
Value |
in Leases |
Value |
|
|
|
Rupees |
Rupees |
Rupees |
Rupees |
|
|
| Within one year |
|
234,554,234 |
189,155,582 |
188,696,293 |
136,610,961 |
|
| After
one year but not more than five years |
317,026,010 |
271,445,948 |
258,724,837 |
220,004,490 |
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
|
| Minimum
lease payments receivable |
551,610,244 |
460,601,530 |
447,421,130 |
356,615,451 |
|
| Unearned
finance income |
(91,008,714) |
-- |
(90,805,679) |
-- |
|
|
|
|
|
| Present
value of minimum lease |
------------------ |
------------------ |
------------------ |
------------------ |
|
| payments
receivable |
460,601,530 |
460,601,530 |
356,615,451 |
356,615,451 |
|
|
========== |
========== |
========== |
========== |
|
|
| The
leases made by the company are subject to a term of 3 - 5 years and a
security deposit |
|
| is
obtained generally upto 10% at the time of disbursement. The company insures
the leased |
|
| assets
in its favour and requires lessees to maintain certain financial ratios.
Additional lease |
|
| rentals
are chargeable on delayed payments. The rate of return implicit in the lease
ranges |
|
| from
15% to 25% (2000: 18% to 24%). |
|
|
|
|
2001 |
2000 |
|
|
Note |
Rupees |
Rupees |
|
|
| 5.
PROVISION FOR POTENTIAL LEASE LOSSES |
8,751,429 |
2,336,964 |
|
|
========== |
========== |
|
|
| A
general provision for potential lease losses has been made in accordance with
the accounting |
|
| policies
stated in note 2.7. No specific provision is required. However, to comply
with the Leasing |
|
| Companies
(Establishment and Regulation) Rules 2000, an amount of Rs. 8,265,945 |
|
| (2000:
Rs. 2,336,964) has been allocated towards the provision required by the said
Rules. |
|
|
|
|
| 6.
LONGTERM INVESTMENTS |
|
| Certificates
of investment |
|
6.1 |
6,685,000 |
6,685,000 |
|
| NIT Units |
|
6.2 |
27,485,000 |
-- |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
34,170,000 |
6,685,000 |
|
|
========== |
========== |
|
|
| 6.1
This has been obtained from Development Financial Institution (DFI) for a
term of 5 |
|
| years.
The certificate has a maturity value of Rs. 15,509,200 after 5 years. The
certificate |
|
| has
been obtained as a precondition for obtaining a guarantee to secure repayment
of |
|
| a
long term loan obtained from the Asian Development Bank. |
|
|
| 6.2
This represent investment made in 2,300,000 Units (2000: Nil) of National
Investment |
|
| Trust
(NIT), an open ended mutual fund. These NIT Units are under Lien as a
security |
|
| against
a running finance facility. Market value as at June 30, 2001 was Rs.
22,310,000. |
|
|
| 7.
LONGTERM LOANS, DEPOSITS |
|
| AND
DEFERRED COSTS |
|
| Loans
-secured, considered good |
|
| To executive |
|
440,000 |
-- |
|
| To staff |
|
|
310,050 |
-- |
|
|
|
|
------------------ |
------------------ |
|
|
|
7.1 |
750,050 |
-- |
|
| Current portion |
|
9 |
(171,420) |
-- |
|
|
|
|
------------------ |
------------------ |
|
|
|
578,630 |
-- |
|
|
|
| Deposits |
|
| Security
deposits |
|
195,080 |
180,080 |
|
| Other deposits |
|
|
260,425 |
517,275 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
440,505 |
712,355 |
|
| Deferred Costs |
|
7.2 |
8,999,857 |
11,539,806 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
9,440,362 |
12,830,791 |
|
|
|
========== |
========== |
|
|
|
|
| 7.1
These represents house loans to an executive and to staff which are repayable
in 60 |
|
| monthly
installments and carry mark-up at the rate of the 33% of the latest audited
cost |
|
| of
funds on reducing balance. The loans are secured by equitable mortagage and
deposit |
|
| of
title deeds of property. |
|
|
| Maximum
amount outstanding at the end of any month during the year against loan to |
|
| executive
was Rs. 530,000 (2000: Nil). |
|
|
| 7.1.1
Outstanding for periods exceeding three years |
-- |
-- |
|
| Others |
|
|
750,050 |
-- |
|
|
------------------ |
------------------ |
|
|
|
750,050 |
-- |
|
|
========== |
========== |
|
|
| 7.2
Deferred costs |
|
|
| Increase
in authorised share capital |
|
250,000 |
-- |
|
| Deferred
hedging cost |
|
7.2.1 |
10,237,495 |
10,237,495 |
|
| TFC
floatation expenses |
|
|
3,516,618 |
-- |
|
|
|
|
------------------ |
------------------ |
|
|
|
14,004,113 |
10,237,495 |
|
| Amortised
to-date |
|
(2,464,307) |
(1,237,638) |
|
|
|
------------------ |
------------------ |
|
|
|
11,539,806 |
8,999,857 |
|
|
========== |
========== |
|
|
| 7.2.1
Deferred hedging costs |
|
| Opening
balance |
|
10,237,495 |
10,237,495 |
|
| (Credit)
/debit during the year |
|
-- |
-- |
|
|
|
------------------ |
------------------ |
|
|
|
10,237,495 |
10,237,495 |
|
| Amortised
to-date |
|
(1,920,147) |
(1,237,638) |
|
|
|
------------------ |
------------------ |
|
| Closing balance |
|
8,317,348 |
8,999,857 |
|
|
|
|
========== |
========== |
|
|
|
|
| The
above have been carried forward as they confer benefit to future years. |
|
|
| 8.
SHORTTERM INVESTMENTS |
|
| Government
securities |
|
8.1 |
700,000 |
700,000 |
|
| Short
term placement |
|
8.2 |
15,000,000 |
-- |
|
| Term
finance certificates (TFC's) |
|
8.3 |
9,998,000 |
-- |
|
|
|
------------------ |
------------------ |
|
|
|
25,698,000 |
700,000 |
|
|
|
========== |
========== |
|
|
|
|
| 8.1
This represents Federal Investment Bonds which have been purchased to comply
with |
|
| regulations
for Non-Banking Financial Institutions. The rate of return on these bonds is |
|
| 15%
(2000: 15%) per annum. |
|
|
|
| 8.2
This represents placement of fund with a financial institution under letter
of placement. |
|
| The
mark-up rate on the above placement is 19% (2000: Nil) per annum. |
|
|
| 8.3
Listed term finance certificates (TFCs) |
|
|
|
|
|
2001 |
|
2000 |
|
|
|
|
Market Value |
Market Value |
Cost |
Cost |
|
|
|
Rupees |
Rupees |
Rupees |
Rupees |
|
|
|
|
| Al
Noor Sugar Mills Limited |
9,998,000 |
9,998,000 |
-- |
-- |
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
|
|
|
9,998,000 |
9,998,000 |
-- |
-- |
|
|
|
========== |
========== |
========== |
========== |
|
|
| 8.3.1
These represent 2000 (2000: Nil) certificates having a face value of Rs.5,000
each. |
|
| These
Term Finance Certificates carry a floating rate of mark-up receivable half
yearly |
|
| in
arrears and will mature in November 2005. The floating rate of mark-up is
taken as |
|
| the
State Bank of Pakistan discounted rate on the first day of the half yearly
installment |
|
| period
plus 2.5% per annum, subject to a minimum of 16.5% per annum and a maximum |
|
| of
18.5% per annum. |
|
|
| 9.
ADVANCES, DEPOSITS, PREPAYMENTS AND |
|
| OTHER
RECEIVABLES |
|
| Advances
- considered good |
|
| To
chief executive |
|
9.1 |
-- |
-- |
|
| To
executive director |
|
9.2 |
-- |
-- |
|
| To executives |
|
9.3 |
266,214 |
177,460 |
|
| To staff |
|
|
657,006 |
455,634 |
|
| Advance
against assets to be leased out |
|
|
2,014,000 |
|
| Current
portion of loans to employees |
7 |
171,420 |
|
|
| Others |
|
|
645,000 |
1,075,325 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
1,739,640 |
3,722,419 |
|
|
|
|
|
| Deposits |
|
|
|
1,250 |
1,250 |
|
| Prepayments |
|
|
9.4 |
3,236,950 |
3,610,895 |
|
| Other
receivables |
|
|
| Accrued income |
|
|
9.5 |
7,623,544 |
4,153,018 |
|
| Income tax - net |
|
|
26 |
5,957,213 |
6,426,472 |
|
| Reimbursable
expenses |
|
9.6 |
6,779,683 |
6,776,281 |
|
| Insurance
claims |
|
|
1,010,689 |
6,543 |
|
| Others |
|
|
|
447,777 |
382,846 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
21,818,906 |
17,745,160 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
26,796,746 |
25,079,724 |
|
|
========== |
========== |
|
|
| 9.1
The maximum aggregate amount due from the chief executive in respect of
advances at |
|
| the
end of any month during the year was Rs.92,567 (2000: Rs.59,592). |
|
|
| 9.2
The maximum aggregate amount due from an executive director in respect of
advances |
|
| at
the end of any month during the year was Rs.309,335 (2000: Rs.94,354). |
|
|
| 9.3
The maximum aggregate amount due from executives in respect of advances at
the end |
|
| of
any month during the year was Rs. 266,214 (2000: Rs.177,460). |
|
|
| 9.4
This includes exchange risk coverage fee of Rs. 1,354,172 (2000: Rs.
1,199,191) paid to |
|
| the
State Bank of Pakistan against ADB FSIL Loan No. 1371. |
|
|
| 9.5
This includes Rs. 4,719,137 (2000: Rs. 2,954,295) in respect of mark-up
receivable on |
|
| certificates
of investment (note 6.1). |
|
|
| 9.6
These represent amounts recoverable on account of small and micro enterprise
training |
|
| and
development costs. A partial amount is covered under an agreement dated
December |
|
| 1998
and the remainder is expected to be agreed on the same basis, in respect of
which |
|
| the
company is in communication with the institution. However, the process has
been |
|
| presently
put on hold. Since there is a long standing relationship with the institution |
|
| which
has been providing this assistance on an on-going basis, the company is
confident |
|
| that
funds would be released in due course. |
|
|
| 10.
CASH AND BANK BALANCES |
|
| At banks on |
|
| deposit
accounts |
|
10.1 |
32,050,000 |
32,050,000 |
|
| foreign
currency savings accounts |
|
8,446,254 |
6,963,534 |
|
| PLS accounts |
|
1,991,304 |
46,507,342 |
|
| current
accounts |
|
2,494,131 |
437,718 |
|
|
------------------ |
------------------ |
|
|
44,981,689 |
85,958,594 |
|
| Cash in hand |
|
119,302 |
223,258 |
|
|
------------------ |
------------------ |
|
|
45,100,991 |
86,181,852 |
|
|
========== |
========== |
|
|
| 10.1
Includes non- interest bearing deposit Rs. 50,000 (2000: Rs. 50,000) with the
State Bank |
|
| of
Pakistan as required under regulations for Non-Banking Financial Institutions
to maintain |
|
| liquidity
against certain liabilities. |
|
|
|
|
|
| Includes
Rs. 32,000,000 term deposits with a commercial bank for a term of 5 years and |
|
| carries
a profit at the rate of Re.0.472 per thousand per day (2000:Re.0.472 per
thousand |
|
| per
day). The deposit is kept as a security against a running finance facility. |
|
|
| 11.
ISSUED, SUBSCRIBED AND PAID-UP CAPITAL |
|
| 10,000,000
ordinary shares of Rs. 10 each fully |
|
| paid-up in cash |
|
|
100,000,000 |
100,000,000 |
|
|
========== |
========== |
|
|
| Under
the terms of the loan agreement, the Swiss Agency for Development and
Co-operation |
|
| (SDC)
has an option to convert at any time during the period of five years from the
date of full |
|
| disbursement
of the loan an aggregate amount of upto Rs. 10,000,000 of the principal
amount |
|
| of
the loan into fully paid-up shares of the company ranking pari passu in all
respects with |
|
| the
shares already issued by the company at the time of the exercise of the
option. In terms |
|
| of
the investment, the shares are to be issued to the agency, at the break-up
value per share |
|
| of
the company at the time when the option for conversion is exercised by the
institution (see |
|
| note 13.3). |
|
|
| As
per Rule 7(3) of the Leasing Companies (Establishment and Regulation) Rules,
2000 and |
|
| subsequent
amendments, all leasing companies are required to enhance their paid-up
capital, |
|
| statutory
and free reserves to Rs. 200 million by June 30, 2001. Since the company has
not |
|
| met
this condition, in accordance with the requirements of the Securities and
Exchange |
|
| Commission
of Pakistan (SECP), the company has submitted plans for early subsequent |
|
| compliance.
Consequently, the SECP has given approval to the company for issue of right |
|
| shares. |
|
|
| 12.
REDEEMABLE CAPITAL-secured |
|
| Term
finance certificates (TFC) |
|
12.1 |
99,980,000 |
-- |
|
| Current
maturity shown under current liabilities |
15 |
(40,000) |
-- |
|
|
|
|
------------------ |
------------------ |
|
|
|
99,940,000 |
-- |
|
|
========== |
========== |
|
|
|
| 12.1
An amount of Rs. 100,000,000 in cash has been raised by way of redeemable
capital |
|
| through
an issue of five year TFCs at a rate of 16.25% per annum payable
semi-annually. |
|
| The
aggregate face value of 20,000TFCs issued was Rs. 5,000 each and are listed
on |
|
| the
Lahore Stock Exchange (LSE). The TFC issue, rated 'BBB+' by the Pakistan
Credit |
|
| Rating
Agency, is secured by a first charge over the company's specific leased
assets |
|
| and
associated lease rentals receivables in favour of the trustee. |
|
|
| 13.
LONGTERM LOANS AND FINANCES - secured |
|
|
|
| Lender |
|
Commencement |
Mode of |
|
|
2001 |
2000 |
|
|
|
of repayment |
repayment |
|
Note |
Rupees |
Rupees |
|
|
|
|
|
|
| Foreign
currency loan |
|
|
|
| Asian
Development Bank |
March 15, 2002 |
24 equal semi-annual
installments |
13.1 |
56,923,704 |
50,206,159 |
|
|
|
|
|
|
|
| Local
currency loan |
|
|
|
|
| The
World Bank |
March 2, 2001 |
14 equal semi-annual
installments |
13.2 |
68,491,321 |
70,364,380 |
|
|
|
|
|
|
|
| Swiss
Agency for Development |
|
|
|
|
| and
Co-operation (SDC) |
March 15, 1997 |
8 equal semi-annual
installments |
-- |
|
2,812,500 |
|
|
|
|
|
|
|
| Swiss
Agency for Development |
|
|
|
|
| and
Co-operation (SDC) |
January 1,2000 |
5 equal annual
installments |
13.3 |
21,703,800 |
28,938,400 |
|
|
|
|
|
|
|
| Pak
Libya Holding Company |
|
|
|
|
| (Private) Limited |
|
June 30, 2000 |
8 equal semi-annual
installments |
13.4 |
13,392,860 |
18,750,000 |
|
|
|
|
|
|
| Oman
International Bank SAOG |
October 31, 1997 |
12 equal quarterly
installments |
|
-- |
416,663 |
|
| Oman
International Bank SAOG |
November 30, 1998 |
12 equal quarterly
installments |
13.5 |
833,337 |
4,166,669 |
|
| Oman
International Bank SAOG |
February 29, 2000 |
6 equal semi-annual
installments |
13.6 |
10,000,001 |
16,666,667 |
|
| Allied
Bank of Pakistan |
January 6, 2001 |
36 equal monthly
installments |
13.7 |
16,666,664 |
-- |
|
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
|
188,011,687 |
192,321,438 |
|
| Current
maturity shown under current liabilities |
|
|
15 |
(37,579,890) |
(27,693,690) |
|
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
|
150,431,797 |
164,627,748 |
|
|
|
|
|
|
========== |
========== |
|
|
| 13.1
The loan has been extended under the Financial Sector Intermediation Loan
(FSIL) No. |
|
| 1371
programme on a tripartite arrangement with the Government of Pakistan and |
|
| participating
financial institutions. The mark-up on the loan is on a variable Ordinary |
|
| Capital
Resources rate for dollars [presently 6.7% (2000: 6.24%)].The loan repayments |
|
| are
semi-annual and secured by guarantee of a DFI. The guarantee is secured
against |
|
| first
charge on debts, first floating charge by way of hypothecation on
undertakings and |
|
| assets.
The company has also deposited 15% of the guarantee amount in the DFI's |
|
| certificates
of investment (COIs). The DFI is paid a guarantee commission at the rate of |
|
| 1.8%
per annum. This loan is registered with the State Bank of Pakistan and the
liability |
|
| of
this loan has been fixed in Pakistani rupees under the exchange risk cover
scheme of |
|
| the
State Bank of Pakistan. The exchange risk cover fee is 8% per annum. |
|
|
| 13.2
Eight tranches of the microenterprise loan have been extended. The mark-up on
the |
|
| above
loan is 14% per annum. The loan repayments are semi-annual and secured by |
|
| guarantee
of a DFI. The guarantee is secured by way of first floating charge on |
|
| undertakings
and assets. The DFI is paid a guarantee commission at the rate of 2% per |
|
| annum. |
|
|
|
|
|
|
| 13.3
This has been obtained under a sale and repurchase agreement for financing
leases to |
|
| small
and micro entrepreneurs with a sale price of Rs.36,173,000 and a purchase
price of |
|
| Rs.
51,546,525. The loan is secured by a hypothecation charge on the company's
specific |
|
| leased
assets and related receivables. The development agency has the option to
convert |
|
| part
of its loan into equity as explained in note 11. |
|
|
| 13.4
This has been obtained under a sale and repurchase agreement for financing
leasing |
|
| operations
of the company with a sale price of Rs.20,000,000 and a purchase price of |
|
| Rs.
28,516,672. The loan is secured by a charge on the company's specific leased |
|
| assets
and related receivables. |
|
|
|
|
|
|
| 13.5
This has been obtained under a sale and repurchase agreement for financing
leasing |
|
| operations
of the company with a sale price of Rs. 10,000,000 and a purchase price of |
|
| Rs.
13,364,908. The loan is secured by a registered hypothecation charge on the
company's |
|
| specific
leased assets and related receivables. The facility is also secured by a
demand |
|
| promissory
note. |
|
|
|
|
| 13.6
This has been obtained under a sale and repurchase agreement for financing
leasing |
|
| operations
of the company with a sale price of Rs. 20,000,000 and a purchase price of |
|
| Rs.
26,071,872. The loan is secured by a registered hypothecation charge on the
company's |
|
| specific
leased assets and related receivables. The facility is also secured by a
demand |
|
| promissory
note. |
|
|
| 13.7
This has been obtained under a sale and repurchase agreement for financing
leasing |
|
| operations
of the company with a sale price of Rs. 20,000,000 and a purchase price of |
|
| Rs.
23,970,043. The loan is secured by a registered hypothecation charge on the
company's |
|
| specific
leased assets and related receivables. The facility is also secured by a
demand |
|
| promissory
note. |
|
|
|
|
|
|
|
|
|
2001 |
2000 |
|
|
|
Note |
Rupees |
Rupees |
|
|
|
| 14.
DEPOSITS ON LEASE CONTRACTS |
|
|
|
| Security
deposits on lease contracts |
|
66,394,935 |
49,548,159 |
|
| Current
maturity shown under current liabilities 15 |
|
(14,352,276) |
(10,463,694) |
|
|
|
|
------------------ |
------------------ |
|
|
|
52,042,659 |
39,084,465 |
|
|
========== |
========== |
|
|
| These
represent security deposits received against lease contracts and are
repayable / adjustable |
|
| at
the expiry / termination of the respective leases. |
|
|
| 15.
CURRENT MATURITY OF LONGTERM LIABILITIES |
|
| Current
maturity of |
|
|
|
| redeemable
capital |
|
12 |
40,000 |
-- |
|
| long
term loans and finances |
|
13 |
37,579,890 |
27,693,690 |
|
| deposits
on lease contracts |
|
14 |
14,352,276 |
10,463,694 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
51,972,166 |
38,157,384 |
|
|
========== |
========== |
|
|
| 16.
SHORT TERM LOANS AND FINANCES |
|
| From
financial institutions |
|
| Under
letter of placement - unsecured |
16.1 |
85,000,000 |
65,000,000 |
|
| Under
discounting agreement - secured |
|
-- |
10,000,000 |
|
| Under
musharika arrangement - unsecured |
|
-- |
10,000,000 |
|
| Under
morabaha arrangement - secured |
16.2 |
10,000,000 |
10,000,000 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
95,000,000 |
95,000,000 |
|
|
|
========== |
========== |
|
|
| 16.1
These represent short term finances utilized against aggregate facilities of
Rs. 85.00 |
|
| million
(2000: Rs. 65.00 million) obtained from various financial institutions for
financing |
|
| leasing
operations of the company. These finances carry mark up rates ranging from |
|
| 17.75%To
18.40% per annum (2000: 15.25% to 18.15% per annum).These facilities are |
|
| repayable
on various dates by June 2002. |
|
|
| 16.2
This represents finance obtained from a financial institution for financing
leasing operations |
|
| of
the company under morabaha arrangement with a sale price of Rs. 10,000,000
and a |
|
| purchase
price of Rs. 11,725,000. The morabaha is secured by registered hypothecation |
|
| charge
on the company's specific lease rentals receivables and demand promissory
note |
|
| and
is repayable in lump sum by February 2002. |
|
|
| 17.
SHORT TERM RUNNING FINANCES |
|
| Running
finances from banks utilised under |
|
| mark-up
arrangements - secured |
|
17.1 |
58,302,566 |
22,332,730 |
|
|
|
|
========== |
========== |
|
|
| 17.1
The above facilities have been obtained for short term working capital
requirements of the |
|
| company.
The aggregate facility of Rs. 89.30 million (2000: Rs. 38.40 million) carries |
|
| mark-up
at rates ranging from Re. 0.384 to Re. 0.486 per thousand per day
(2000:Re.0.356 |
|
| to
Re. 0.486 per thousand per day) and are secured by a registered first
hypothecation |
|
| charge
on the company's specific leased assets and related lease rentals, demand |
|
| promissory
note, lien on term deposit account and lien on foreign currency savings
account. |
|
|
| 18.
CREDITORS, ACCRUED AND OTHER LIABILITIES |
|
| Creditors |
|
1,189,972 |
736,622 |
|
| Mark-up
/ return accrued on |
|
|
|
| redeemable
capital |
|
|
3,828,001 |
-- |
|
| long
term loans and finances |
|
18.1 |
10,550,264 |
9,141,300 |
|
| short
term loans and finances |
|
|
|
|
| - secured |
|
|
212,671 |
1,003,095 |
|
| - unsecured |
|
|
2,461,961 |
2,088,116 |
|
| short
term running finances |
|
|
1,049,913 |
98,731 |
|
|
------------------ |
------------------ |
|
|
18,102,810 |
12,331,242 |
|
| Lease
rentals received in advance |
|
|
3,090,709 |
2,019,387 |
|
| Withholding
tax payable |
|
|
114,208 |
331,014 |
|
| Accrued
expenses |
|
|
351,040 |
664280 |
|
| Payable
to N LCL provident fund |
|
|
109,586 |
70,110 |
|
| Unclaimed
dividend |
|
|
296,369 |
164,560 |
|
| Proposed
final dividend |
|
|
-- |
7,500,000 |
|
| Other liabilities |
|
|
84,681 |
112,724 |
|
|
|
------------------ |
------------------ |
|
|
23,338,375 |
23,929,939 |
|
|
========== |
========== |
|
|
| 18.1
This includes guarantee commission amounting to Rs. 1,436,447 (2000: Rs.
634,365) |
|
| and
administrative fee amounting to Rs. 193,496 (2000: Rs. 85,440) payable to a
DFI in |
|
| respect
of a foreign currency loan (notes 6.1,9.5 and 13.1). |
|
|
| 19.
COMMITMENTS |
|
| For
lease financing |
|
|
1,075,100 |
7,672,500 |
|
|
|
|
========== |
========== |
|
|
| 20.
INCOME FROM LEASE OPERATIONS |
|
| Income
from finance lease operations |
|
83,112,018 |
59,929,541 |
|
| Income
from operating lease |
|
20.1 |
845,369 |
-- |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
83,957,387 |
59,929,541 |
|
|
|
========== |
========== |
|
|
|
|
| 20.1
Income from operating lease |
|
| Rentals |
|
2,610,000 |
-- |
|
| Depreciation |
|
1,658,031 |
-- |
|
| Operating
expenses |
|
106,600 |
-- |
|
|
------------------ |
------------------ |
|
|
|
1,764,631 |
-- |
|
|
|
------------------ |
------------------ |
|
|
|
845,369 |
-- |
|
|
========== |
========== |
|
|
|
| 21.
INVESTMENT INCOME |
|
| Return
on long term investments |
|
21.1 |
4,524,842 |
1,769,677 |
|
| Return
on short term investments |
|
21.2 |
1,228,356 |
105,000 |
|
| Gain
on sale of shares |
|
|
-- |
782,570 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
5,753,198 |
2,657,247 |
|
|
|
|
========== |
========== |
|
|
| 21.1
Return on long term investments |
|
| Certificates
of investment |
|
1,764,842 |
1,769,677 |
|
| Dividend
income |
|
2,760,000 |
-- |
|
|
|
------------------ |
------------------ |
|
|
|
4,524,842 |
1,769,677 |
|
|
|
|
========== |
========== |
|
|
| 21.2
Return on short term investments |
|
| Government
Securities |
|
|
105,000 |
105,000 |
|
| Term
finance certificates |
|
1,123,356 |
-- |
|
|
|
------------------ |
------------------ |
|
|
|
1,228,356 |
105,000 |
|
|
|
|
========== |
========== |
|
|
|
|
|
|
| 22.
OTHER INCOME |
|
| Return
on bank deposits |
|
|
6,054,524 |
6,159,904 |
|
| Net
gain/(loss) on disposal of fixed assets |
|
81,722 |
(285,171) |
|
| Commission
and exchange gain |
|
22.1 |
1,513,038 |
98,070 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
7,649,284 |
5,972,803 |
|
|
|
|
========== |
========== |
|
|
| 22.1
Commission and exchange gain |
|
| Commission |
|
|
|
35,000 |
-- |
|
| Net
exchange gain |
|
1,478,038 |
98,070 |
|
|
|
------------------ |
------------------ |
|
|
|
1,513,038 |
98,070 |
|
|
|
|
========== |
========== |
|
|
|
|
|
|
| 23.
ADMINISTRATIVE AND OPERATING EXPENSES |
|
| Salaries
and benefits |
|
23.1 |
11,268,353 |
8,480,258 |
|
| Staff
welfare and training |
|
|
388,112 |
190,120 |
|
| Depreciation |
|
|
1,845,374 |
2,141,997 |
|
| Rent,
rates and taxes |
|
|
357,918 |
434,571 |
|
| Travelling
and conveyance |
|
|
100,567 |
463,492 |
|
| Vehicle
running and maintenance |
|
|
1,812,404 |
1,387,171 |
|
| Utilities |
|
|
1,313,178 |
1,060,703 |
|
| Entertainment |
|
|
80,835 |
49,399 |
|
| Fee
and subscriptions |
|
|
433,385 |
369,229 |
|
| Printing
and stationery |
|
|
606,215 |
490,238 |
|
| Postage
and courier |
|
|
167,252 |
119,239 |
|
| Legal
and professional charges |
|
|
337,129 |
226,071 |
|
| Auditors'
remuneration |
|
23.2 |
284,388 |
251,659 |
|
| Office
repairs and maintenance |
|
|
613,309 |
578,304 |
|
| Advertisement
and promotional expenses |
|
165,492 |
62,185 |
|
| Insurance |
|
|
81,234 |
86,701 |
|
| Others |
|
|
30,678 |
34,803 |
|
|
------------------ |
------------------ |
|
|
|
23.3 |
19,885,823 |
16,426,140 |
|
|
========== |
========== |
|
|
| 23.1
Salaries and benefits include Ns. 555,466 (2000: Rs. 304,863) in respect of
staff retirement |
|
| benefits. |
|
|
|
| 23.2
Auditors' remuneration |
|
| Audit fee |
|
115,000 |
85,000 |
|
| Tax
consultancy fee |
|
117,000 |
120,000 |
|
| Other services |
|
18,500 |
23,000 |
|
| Out
of pocket expenses |
|
33,888 |
23,659 |
|
|
|
------------------ |
------------------ |
|
|
|
284,388 |
251,659 |
|
|
========== |
========== |
|
|
| 23.3
These are stated net of Rs.108,406 (2000: Rs.1,684,449) recoverable on
account of |
|
| small
and micro enterprise training and development costs. |
|
|
| 24.
FINANCIAL CHARGES |
|
| Mark-up/return
on |
|
|
|
| redeemable
capital |
|
|
11,552,316 |
-- |
|
| long
term loans and finances |
|
24.1 |
31,651,329 |
28,343,906 |
|
| short
term loans and finances |
|
24.2 |
15,561,896 |
6,011,070 |
|
| short
term running finances |
|
|
4,618,410 |
1,179,050 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
63,383,951 |
35,534,026 |
|
|
| Mark-up
on finance lease |
|
-- |
32,419 |
|
| Bank
charges and commission |
|
260,571 |
158,275 |
|
|
|
------------------ |
------------------ |
|
|
|
63,644,522 |
35,724,720 |
|
|
|
|
|
========== |
========== |
|
|
| 24.1
This includes Rs. 4,692,028 (2000: Rs. 3,007,212) in respect of exchange risk
cover fee |
|
| paid
to the State Bank of Pakistan and guarantee commission of Rs. 2,263,121
(2000: |
|
| Rs.
2,285,133) in respect of long term loans as described in notes 13.1 and 13.2. |
|
|
| 24.2
These are stated net of return on short term placements Rs. 2,130,205 (2000:
Rs. Nil). |
|
|
| 25.
PROVISION AND WRITE OFFS ON LEASE PORTFOLIO |
|
| Provision
for potential lease losses |
|
6,414,465 |
6,262 |
|
| Write
offs against lease receivables |
|
696,418 |
1,069,942 |
|
|
|
------------------ |
------------------ |
|
|
|
7,110,883 |
1,076,204 |
|
|
|
========== |
========== |
|
|
|
|
| 26. TAXATION |
|
|
|
|
| Current |
|
| Assessment
for all years upto and including assessment year 2000 - 2001 have been
finalised by |
|
| the
Income Tax department, in respect of which refunds amounting to Rs. 5.83
million have been |
|
| assessed. |
|
|
| Deferred |
|
| Deferred
taxation liability arising due to taxable temporary differences computed
under the liability |
|
| method
is estimated at Rs. 6.50 million as at June 30, 2001. However, due to
unabsorbed |
|
| depreciation,
tax losses carried forward as at June 30, 2001 of Rs. 51.19 million (of which |
|
| Rs.
25.04 million has been assessed upto June 30, 2000) resulting in a deferred
tax debit of Rs. |
|
| 16.89
million, no provision for deferred tax liability is required in the accounts
and deferred tax |
|
| reserve
created in prior years in accordance with SECP Circular No. 16 of 1997 has
been taken to |
|
| revenue
reserve. Based on future projections of reversal of the temporary taxable
differences, |
|
| the
company has recognised an asset of Rs. 6.50 million. |
|
|
| 27.
EARNINGS PER SHARE |
|
| Earnings
per share are calculated by dividing the profit after taxation for the year
by the weighted |
|
| average
number of shares outstanding during the year as follows: |
|
|
|
|
2001 |
2000 |
|
|
|
Rupees |
Rupees |
|
| Basic
earnings per share |
|
| Profit
for the year after taxation |
|
|
5,608,820 |
7,652,925 |
|
| Weighted
average number of |
|
|
|
| shares
outstanding during the year |
|
|
| applicable
to basic earnings per share |
|
10,000,000 |
10,000,000 |
|
|
|
========== |
========== |
|
|
|
0.56 |
0.77 |
|
|
|
========== |
========== |
|
|
|
|
|
| Diluted
earnings per share |
|
|
|
| Profit
for the year after taxation |
|
|
5,608,820 |
7,652,925 |
|
| Adjusted
weighted average number of |
|
|
|
| shares
outstanding during the year |
|
|
|
| applicable
to diluted earnings per share |
|
10,840,729 |
10,882,613 |
|
|
|
========== |
========== |
|
|
|
0.52 |
0.70 |
|
|
|
========== |
========== |
|
|
| Adjusted
weighted average number of shares include 840,729 shares (2000: 882,613
shares) |
|
| which
are potentially convertible into ordinary shares if the option mentioned in
note 11 is exercised. |
|
|
| 28.
CASH GENERATED FROM OPERATIONS |
|
| Profit
for the year before taxation |
|
|
1,127,338 |
10,083,420 |
|
| Adjustment for: |
|
|
|
|
|
| Depreciation
on fixed assets |
|
|
3,503,405 |
2,141,997 |
|
| Amortisation
of deferred costs |
|
|
1,226,669 |
770,647 |
|
| Provision
for potential lease losses |
|
6,414,465 |
6,262 |
|
| Net
(gain)/loss on disposal of fixed assets |
|
(81,722) |
285,171 |
|
| (Gain)
on sale of shares |
|
|
-- |
(782,570) |
|
| Interest/mark-up
income |
|
|
(11,842,721) |
(8,034,581) |
|
| Interest/mark-up
expense |
|
|
63,383,951 |
35,566,445 |
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
62,604,047 |
29,953,371 |
|
|
|
|
|
------------------ |
------------------ |
|
| Operating
profit before working capital changes |
|
63,731,385 |
40,036,791 |
|
|
|
|
|
|
| (Increase)/decrease
in current assets |
|
| Advances,
deposits, prepayments |
|
| and
other receivables |
|
(558,335) |
3,695,633 |
|
| Increase
in current liabilities |
|
|
|
|
| Creditors,
accrued and other liabilities |
|
1,006,059 |
634,343 |
|
| Working
capital changes |
|
|
447,724 |
4,329,976 |
|
|
|
|
|
------------------ |
------------------ |
|
|
|
64,179,109 |
44,366,767 |
|
|
|
========== |
========== |
|
|
| 29.
REMUNERATION OF THE CHIEF EXECUTIVE, EXE,CUTIVE DIRECTORS AND OTHER
EXECUTIVES |
|
| The
aggregate amount of expenditure included in the accounts for the year in
respect of remuneration, |
|
| including
benefits to the Chief Executive, Executive Directors and other Executives of
the company |
|
| are as follows: |
|
|
|
|
2001 |
|
2000 |
|
|
|
|
|
Chief |
Executive |
Other |
|
Chief |
Executive |
Other |
|
|
|
Executive |
Directors |
Executives |
Total |
Executive |
Directors |
Executives |
Total |
|
|
Rupees |
Rupees |
Rupees |
Rupees |
Rupees |
Rupees |
Rupees |
Rupees |
|
|
|
|
| Managerial
remuneration |
703,000 |
1,605,000 |
1,265,724 |
3,573,724 |
648,000 |
1,440,000 |
4,105,440 |
3,193,440 |
|
| Allowances |
|
350,500 |
802,500 |
632,856 |
1,785,856 |
312,000 |
720,000 |
552,720 |
1,584,720 |
|
| Contributory
provident fund |
70,300 |
160,500 |
126,576 |
357,376 |
-- |
-- |
110,532 |
110,532 |
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
|
|
1,123,800 |
2,568,000 |
2,025,156 |
5,716,956 |
960,000 |
2,160,000 |
1,768,692 |
4,888,692 |
|
|
|
========== |
========== |
========== |
========== |
========== |
========== |
========== |
========== |
|
| Number
of persons |
1 |
3 |
6 |
10 |
1 |
3 |
5 |
9 |
|
|
| The
Chief Executive, Executive Directors and some Executives are also entitled to
use company |
|
| maintained
cars and perquisites in accordance with the terms of their employment. All
executives |
|
| are
covered for medical and life insurance. Fee of Rs. 4,500 (2000: Rs. Nil) was
paid to a Director |
|
| for
attending board meetings. |
|
|
| 29.1
Number of employees |
|
|
|
| The
total number of employees at the year-end was 66 (2000: 56). |
|
|
| 30.
RATE OF RETURN RISK |
|
| Rate
of return risk (RR) arises from the possibility that changes in RR will
affect the value of |
|
| financial
instruments. A company is exposed to RR as a result of mismatches or gaps in
the |
|
| amounts
of assets and liabilities and off-balance sheet instruments that mature or
reprice over a |
|
| given
period. The risk is managed by matching the repricing of assets and
liabilities. |
|
|
| The
company's RR sensitivity position at June 30, 2001, based on the earlier of
contractual |
|
| repricing
or maturity date, is as follows: |
|
|
|
|
|
Exposed to RR |
|
Not exposed |
|
|
|
|
to RR |
|
|
|
|
More than 1 |
|
|
|
|
Less than |
year and less |
More than |
|
2001 |
Effective |
|
|
|
1 year |
than 5 years |
5 years |
|
Total |
RR |
|
|
|
Rupees |
Rupees |
Rupees |
Rupees |
Rupees |
% |
|
|
|
| ASSETS |
|
|
| Fixed assets |
|
-- |
-- |
-- |
47,026,027 |
47,026,027 |
-- |
|
| Net
investment in leases (net of |
|
|
|
| provision
for doubtful debts) |
171,208,350 |
211,210,568 |
-- |
69,431,183 |
451,850,101 |
22.35 |
|
| Long
term investments |
-- |
34,170,000 |
-- |
-- |
34,170,000 |
13.24 |
|
| Long
term loans, deposits |
|
|
|
| and
deferred cost |
171,420 |
578,630 |
-- |
12,252,161 |
13,002,211 |
5.59 |
|
| Deferred
taxation |
-- |
-- |
-- |
6,500,353 |
6,500,353 |
-- |
|
| Short
term investments |
25,698,000 |
-- |
-- |
-- |
25,698,000 |
14.49 |
|
| Income
accrued or due |
-- |
-- |
-- |
7,623,544 |
7,623,544 |
-- |
|
| Advances,
deposits, prepayments |
|
|
|
| and
other receivables |
-- |
-- |
-- |
19,001,782 |
19,001,782 |
-- |
|
| Cash
and bank balances |
42,437,558 |
-- |
-- |
2,663,433 |
45,100,991 |
14.27 |
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
|
| Total assets |
|
239,515,328 |
245,959,198 |
-- |
164,498,483 |
649,973,009 |
|
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
|
| EQUITY
AND LIABILITIES |
|
| Capital
and reserves |
-- |
-- |
-- |
118,944,446 |
118,944,446 |
-- |
|
| Redeemable
capital |
40,000 |
99,940,000 |
-- |
-- |
99,980,000 |
16.25 |
|
| Long
term loans and finances |
37,579,890 |
95,021,023 |
55,410,774 |
-- |
188,011,687 |
16.64 |
|
| Deposits
on lease contracts |
-- |
-- |
-- |
66,394,935 |
66,394,935 |
-- |
|
| Short
term loans and finances |
95,000,000 |
-- |
-- |
-- |
95,000,000 |
18.02 |
|
| Short
term running finances |
58,302,566 |
-- |
-- |
-- |
58,302,566 |
15.71 |
|
| Accrued
and other liabilities |
-- |
-- |
-- |
23,339,375 |
23,339,375 |
-- |
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
|
| Total
equity and liabilities |
190,922,456 |
194,961,023 |
55,410,774 |
208,678,756 |
649,973,009 |
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
| RR
sensitivity gap |
48,592,872 |
50,998,175 |
(55,410,774) |
(44,180,273) |
-- |
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
| Cumulative
RR sensitivity gap |
48,592,872 |
99,591,047 |
44,180,273 |
-- |
-- |
|
|
|
========== |
========== |
========== |
========== |
========== |
|
|
| The
total RR sensitivity gap represents the net amount of on-balance sheet items. |
|
|
| The
company's RR sensitivity position at June 30, 2000 based on the earlier of
contractual |
|
| repricing
or maturity date, is as follows: |
|
|
|
|
|
Not exposed |
|
|
|
|
Exposed to RR |
|
to RR |
|
|
|
|
|
|
|
|
|
More than 1 |
|
|
|
|
Less than |
year and less |
More than |
|
2000 |
Effective |
|
|
|
1 year |
than 5 years |
5 years |
|
Total |
RR |
|
|
Rupees |
Rupees |
Rupees |
Rupees |
Rupees |
% |
|
| ASSETS |
|
|
| Fixed assets |
|
-- |
-- |
-- |
14,102,467 |
14,102,467 |
-- |
|
| Net
investment in leases (net of |
|
|
|
| provision
for doubtful debts) |
122,054,117 |
179,725,805 |
-- |
52,498,565 |
354,278,487 |
22.45 |
|
| Long
term investments |
-- |
6,685,000 |
-- |
-- |
6,685,000 |
18.56 |
|
| Long
term loans, deposits |
|
|
|
| and
deferred cost |
-- |
-- |
-- |
9,440,362 |
9,440,362 |
-- |
|
| Short
term investments |
700,000 |
-- |
-- |
-- |
700,000 |
15.00 |
|
| Income
accrued or due |
-- |
-- |
-- |
4,153,018 |
4,153,018 |
-- |
|
| Advances,
deposits, prepayments |
|
|
|
| and
other receivables |
-- |
-- |
-- |
20,926,706 |
20,926,706 |
-- |
|
| Cash
and bank balances |
85,470,876 |
-- |
-- |
710,976 |
86,181,852 |
10.42 |
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
| Total assets |
|
208,224,993 |
186,410,805 |
-- |
101,832,094 |
496,467,892 |
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
|
|
|
|
|
|
|
|
| EQUITY
AND LIABILITIES |
|
|
|
| Capital
and reserves |
-- |
-- |
-- |
113,335,626 |
113,335,626 |
-- |
|
| Long
term loans and finances |
27,693,690 |
99,179,542 |
65,448,206 |
-- |
192,321,438 |
16.95 |
|
| Deposits
on lease contracts |
-- |
-- |
-- |
49,548,159 |
49,548,159 |
-- |
|
| Short
term loans and finances |
95,000,000 |
-- |
-- |
-- |
95,000,000 |
16.29 |
|
| Short
term running finances |
22,332,730 |
-- |
-- |
-- |
22,332,730 |
16.70 |
|
| Accrued
and other liabilities |
-- |
-- |
-- |
23,929,939 |
23,929,939 |
-- |
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
| Total
equity and liabilities |
145,026,420 |
99,179,542 |
65,448,206 |
186,813,724 |
496,467,892 |
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
| RR
sensitivity gap |
63,198,573 |
87,231,263 |
(65,448,206) |
(84,981,630) |
-- |
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
| Cumulative
RR sensitivity gap |
63,198,573 |
150,429,836 |
84,981,630 |
-- |
-- |
|
|
|
========== |
========== |
========== |
========== |
========== |
|
|
| The
total RR sensitivity gap represents the net amount of on-balance sheet items. |
|
|
|
| 31.
CREDIT RISK AND CONCENTRATIONS OF CREDIT RISK |
|
| Credit
risk is the risk that one party to a financial instrument will fail to
discharge an |
|
| obligation
and cause the other party to incur a financial loss. The company attempts to |
|
| control
credit risk by monitoring credit exposures, limiting transactions with
specific |
|
| counterparties
and continually assessing the creditworthiness of counterparties. |
|
|
| The
company seeks to manage its credit risk exposure through diversification of
lending |
|
| activities
to avoid undue concentrations of risks with individuals or groups of
customers |
|
| in
specific locations or businesses. It also obtains security when appropriate. |
|
|
| Concentrations
of credit risk arise when a number of counterparties are engaged in |
|
| similar
business activities or have similar economic features that would cause their |
|
| ability
to meet contractual obligations to be similarly affected by changes in
economic, |
|
| political
or other conditions. Concentrations of credit risk indicate the relative
sensitivity |
|
| of
the company's performance to developments affecting a particular industry. |
|
|
| Detail
of industry sector analysis of lease portfolio. |
|
|
|
|
2001 |
2000 |
|
|
Rupees |
% |
Rupees |
% |
|
|
| Textile |
|
121,184,245 |
26.31 |
69,573,945 |
19.51 |
|
| Miscellaneous - including
micro leasing |
115,532,426 |
25.08 |
84,318,356 |
23.64 |
|
| Steel
/ engineering and automobile |
50,888,367 |
11.05 |
47,109,580 |
13.21 |
|
| Hotels |
|
30,648,514 |
6.65 |
28,695,379 |
8.05 |
|
| Health care |
|
24,076,761 |
5.23 |
22,878,578 |
6.42 |
|
| Transport
and communication |
22,278,685 |
4.83 |
2,046,156 |
0.57 |
|
| Chemicals,
fertilizer and pharma |
22,048,946 |
4.79 |
25,702,753 |
7.21 |
|
| Food,
tobacco and beverages |
20,526,021 |
4.46 |
24,837,030 |
6.96 |
|
| Paper and board |
|
19,848,860 |
4.31 |
20,992,031 |
5.89 |
|
| Electrical
and electronic goods |
15,574,338 |
3.38 |
16,804,474 |
4.71 |
|
| Energy,
oil and gas |
5,812,709 |
1.26 |
1,398,866 |
0.39 |
|
| Financial
institutions |
4,877,585 |
1.06 |
5,296,838 |
1.49 |
|
| Sugar and allied |
|
2,167,348 |
0.47 |
3,185,854 |
0.89 |
|
| Construction |
|
1,824,721 |
0.40 |
1,616,347 |
0.45 |
|
| Banaspati
and allied industries |
1,256,020 |
0.27 |
914,033 |
0.26 |
|
| Dairy
and poultry |
1,181,294 |
0.26 |
748,560 |
0.21 |
|
| Leather,
footwear and tanneries |
786,721 |
0.17 |
457,121 |
0.13 |
|
| Glass ceramics |
|
50,486 |
0.01 |
39,550 |
0.01 |
|
| Cement |
|
37,483 |
0.01 |
-- |
-- |
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
|
|
|
460,601,530 |
100.00 |
356,615,451 |
100.00 |
|
|
========== |
========== |
========== |
========== |
|
|
| 32.
NET FOREIGN CURRENCY EXPOSURE |
|
| For
foreign currency borrowings, appropriate forward exchange cover has been
obtained from the |
|
| State
Bank of Pakistan to hedge against foreign exchange fluctuation risks. The
company is not |
|
| materially
exposed to foreign currency risk on other foreign currency assets and
liabilities. |
|
|
| 33.
FAIR VALUE OF FINANCIAL INSTRUMENTS |
|
| Fair
value is the amount for which an asset could be exchanged, or a liability
settled, between |
|
| knowledgeable,
willing parties in an arm's length transaction. As also mentioned in note
2.1, the |
|
| company
prepares its financial statements under the historical cost convention.
Consequently, |
|
| differences
can arise between book value and the fair value estimates. |
|
|
| The
estimated fair value of long term investments (National Investment Trust
units) and book |
|
| value
as at June 30, 2001 is as follows: |
|
|
|
|
2001 |
2000 |
|
|
|
Rupees |
Rupees |
|
|
| Book value |
|
|
27,485,000 |
-- |
|
| Quoted value |
|
|
22,310,000 |
-- |
|
|
|
|
------------------ |
------------------ |
|
| Book
value over quoted value |
|
|
5,175,000 |
-- |
|
|
========== |
========== |
|
|
| No
provision for decline in book value has been made, as the decline is
considered temporary. |
|
|
| The
carrying value of all other financial instruments reflected in the financial
statements approximates |
|
| their fair values. |
|
|
| 34. GENERAL |
|
|
| 34.1
Corresponding figures of the previous year have been rearranged wherever
necessary for |
|
| the
purpose of comparison. |
|
|
| 34.2
Figures have been rounded off to the nearest rupee. |
|
|
|
Mohammed Elias |
|
Asif Siddiqi |
|
|
Chairman |
|
Chief Executive |
|
|
|
| PATTERN
OF SHAREHOLDING AS AT JUNE 30, 2001 |
|
|
| Number |
|
Share |
|
Total |
|
| of |
|
Holding |
|
Shares |
|
| Share Holders |
From |
|
To |
Held |
|
|
| 111 |
1 |
-- |
100 |
10,400 |
|
| 1555 |
101 |
-- |
500 |
775,700 |
|
| 58 |
501 |
-- |
1000 |
56,800 |
|
| 89 |
1001 |
-- |
5000 |
228,000 |
|
| 18 |
5001 |
-- |
10000 |
157,400 |
|
| 1 |
10001 |
-- |
15000 |
11,000 |
|
| 1 |
15001 |
-- |
20000 |
20,000 |
|
| 2 |
40001 |
-- |
45000 |
86,000 |
|
| 5 |
45001 |
-- |
50000 |
247,600 |
|
| 1 |
50001 |
-- |
55000 |
50,500 |
|
| 1 |
55001 |
-- |
60000 |
60,000 |
|
| 2 |
65001 |
-- |
70000 |
135,200 |
|
| 1 |
70001 |
-- |
75000 |
74,800 |
|
| 1 |
95001 |
-- |
100000 |
100,000 |
|
| 1 |
100001 |
-- |
105000 |
102,000 |
|
| 2 |
105001 |
-- |
110000 |
212,800 |
|
| 1 |
110001 |
-- |
115000 |
114,200 |
|
| 1 |
120001 |
-- |
125000 |
124,300 |
|
| 1 |
145001 |
-- |
150000 |
150,000 |
|
| 1 |
155001 |
-- |
160000 |
160,000 |
|
| 1 |
175001 |
-- |
180000 |
178,800 |
|
| 1 |
190001 |
-- |
195000 |
194,600 |
|
| 4 |
195001 |
-- |
200000 |
782,700 |
|
| 1 |
210001 |
-- |
215000 |
211,500 |
|
| 1 |
235001 |
-- |
240000 |
240,000 |
|
| 2 |
250001 |
-- |
255000 |
506,100 |
|
| 1 |
255001 |
-- |
260000 |
255,100 |
|
| 1 |
275001 |
-- |
280000 |
280,000 |
|
| 1 |
495001 |
-- |
500000 |
500,000 |
|
| 1 |
535001 |
-- |
540000 |
539,500 |
|
| 1 |
540001 |
-- |
545000 |
542,500 |
|
| 1 |
845001 |
-- |
850000 |
850,000 |
|
| 1 |
995001 |
-- |
1000000 |
1,000,000 |
|
| 1 |
1040001 |
-- |
1045000 |
1,042,500 |
|
| ------------------ |
|
------------------ |
|
| 1871 |
|
10,000,000 |
|
| ========== |
|
========== |
|
|
|
|
Number |
Total |
|
|
| Categories |
|
of |
Shares |
|
|
| of
Shareholders |
|
Share Holders |
Held |
Percentage |
|
|
|
|
| Individuals |
|
1836 |
6,293,700 |
62.93% |
|
| Investment
Companies |
|
3 |
168,800 |
1.69% |
|
| Insurance
company |
|
1 |
4,500 |
0.05% |
|
| Joint
Stock Companies |
|
24 |
58,000 |
0.58% |
|
| Financial
Institutions |
|
6 |
3,425,000 |
34.25% |
|
| Foreign Bank |
|
1 |
50,000 |
0.50% |
|
|
|
------------------ |
------------------ |
------------------ |
|
|
|
1871 |
10,000,000 |
100.00 |
|
|
========== |
========== |
========== |
|
|
|
|
|
|
|
|
|
|
|
|
|
