| Asian Leasing Corporation Limited |
|
|
|
|
|
|
|
| Annual
Report 1999 |
|
|
|
| CONTENTS |
|
|
| Company
Information |
|
| Notice
of the Meeting |
|
| Directors'
Report |
|
| Pattern
of Shareholding |
|
| Auditors'
Report |
|
| Balance Sheet |
|
| Profit
and Loss Account |
|
| Statement
of Sources and Application of Funds |
|
| Notes
to the Accounts |
|
|
|
| COMPANY
INFORMATION |
|
|
| Board
of Directors: |
|
| Mr.
Humayun Raza |
|
Chairman |
|
| Mr.
Muhammad Aslam Khan |
Director |
|
| Mr.
Muhammad Zafarullah Khan |
Director |
|
| Dr.
Iftikhar Ali Khan |
|
Director |
|
| Mr.
Zafar Iqbal |
|
Director |
|
| Mr.
Humayun Sadiq |
|
Nominee Director- NDFC |
|
| Mr.
Taslim Haider Zaidi |
|
Nominee Director - NDFC |
|
| Mr.
Usfandiar Sukhia |
|
Nominee Director- NIT |
|
| Ms.
Aaliya K. Dossa |
|
Nominee Director- NIT |
|
| Mrs.
Rodhi R. Khan |
|
Chief Executive Officer |
|
|
| Company
Secretary: |
|
| Mr.
Imran-ur-Rehman |
|
|
| Bankers
to the Company: |
|
| National
Development Finance Corporation |
|
| Bank
of Punjab |
|
| Crescent
Investment Bank Limited |
|
| Faysal
Bank Limited |
|
| Muslim
Commercial Bank Limited |
|
| National
Bank of Pakistan |
|
|
| Auditors: |
|
| Ford,
Rhodes, Robson, Morrow |
|
| Chartered
Accountants |
|
|
| Legal
Advisor: |
|
| Mr.
Tariq Kamal Qazi |
|
| Advocate
High Court/Supreme Court |
|
|
| Registrars
and Share Transfer Office: |
|
| Noble
Computer Services (Private) Ltd. |
|
| 6th
Floor, Hirani Centre |
|
| I.I.
Chundrigar Road, Karachi |
|
|
| Registered
Office & Head Office: |
|
| 10-Happy
Homes, |
|
| 38-A,
Main Gulberg, Lahore |
|
| Tel: 5717367-9 |
|
| Fax:
(042) 5717504 |
|
| Email:
alc@brain.net.pk |
|
|
| Branch
Office: |
|
| 204-Clifton
Centre |
|
| Khayaban-e-Roomi,
Clifton |
|
| Karachi. |
|
| Tel:
5835936, 5866095 |
|
| Fax:
(021)5873573 |
|
|
|
| NOTICE
OF ANNUAL GENERAL MEETING |
|
|
| Notice
is hereby given that the THIRTEENTH ANNUAL GENERAL MEETING of ASIAN LEASING |
|
| CORPORATION
LIMITED will be held on Friday, 31st December, 1999 at the registered office
of the |
|
| Company
at 10-Happy Homes, 38-A Main Gulberg. Lahore at 11.30 a.m. to transact the
following business :- |
|
|
| 1.
To confirm the minutes of Extra-Ordinary General Meeting of the Company held
on 30th June, 1999. |
|
|
| 2.
To receive, consider and adopt the audited accounts for the year ended June
30, 1999 together with the |
|
| Directors'
and Auditors' reports thereon. |
|
|
| 3.
To appoint Auditors and fix their remuneration. The present Auditors Messrs.
Ford, Rhodes. Robson. |
|
| Morrow,
Chartered Accountants. retire and being eligible, offer themselves for
re-appointment. |
|
|
| BY
ORDER OF THE BOARD |
|
|
| Lahore; |
|
IMRAN-UR-REHMAN |
|
| 30th
November, 1999 |
|
COMPANY SECRETARY |
|
|
| NOTES: |
|
|
| 1.
The Register of Members of the Company will remain closed from 22rid
December, 1999 to 29th |
|
| December,
1999 (both days inclusive) and no transfer of shares will be made during the
period the register |
|
| is closed. |
|
|
| 2.
A member entitled to attend and vote at the General Meeting is entitled to
appoint another member as his |
|
| proxy
to attend and vote on his behalf. |
|
|
| 3.
Instrument appointing proxy and the power of attorney or other authority
under which it is signed or a |
|
| notarially
certified copy of the power or authority must be deposited at the registered
office of the Company |
|
| atleast
48 hours before the time of the meeting. |
|
|
| 4.
Shareholders are requested to notify any change in address immediately. |
|
|
|
| DIRECTORS'
REPORT TO THE MEMBERS |
|
|
| The
Board of Directors presents to its members the 13th Annual Report together
with Audited Accounts and the |
|
| Auditors
Report thereon for the year ended June 30, 1999. |
|
|
| The
period 1998-99 was marked with a bold step taken by ALC Board to enter into a
merger, as the leasing as well |
|
| as
banking sector needs to consolidate. This step was also in line with the SECP
requirement that all leasing |
|
| companies
should raise their paid up capital to Rs.200 million by November, 1999.
Unfortunately, this being the first |
|
| merger,
the merging companies developed certain difference of opinion on various
aspects. The merger process |
|
| which
took almost a year did not materialize despite the fact that ALC had
completed all the required formalities by |
|
| March.
1999. Meanwhile due to the fact that ALC was being viewed as a merging
entity, fresh credit lines could not |
|
| be
contracted and the lease portfolio could not be built up. The year 1999-2000,
therefore, requires the company to |
|
| gear
itself to arrange fresh funding in the form of credit lines and look for
equity partners for fresh equity injection to |
|
| strengthen
the financial standing of the company. The company has started making efforts
in both the areas. ALC |
|
| plans
to accommodate the existing clients with good track record with ALC as well
as with other financial institutions. |
|
| ALC
would also target new clients. |
|
|
| Since
ALC is presently carrying the portfolio built up over the last ten years,
1998-99 was marked with clearing the |
|
| portfolio
through rejuvenating the efforts for recovery/settlements/rescheduling. We
are pleased to report that |
|
| marked
movement in stuck up financing has been made. |
|
|
| FINANCIAL
RESULTS |
|
|
1997-98 |
1998-99 |
|
|
Rupees |
Rupees |
|
|
| Revenue |
|
57,507,647 |
29,751,198 |
|
| Expenditure |
|
|
|
| Financial
Charges |
|
30,269,079 |
16,628,935 |
|
| Provision/Bad
Debts |
|
21,153,298 |
18,872,183 |
|
| Others |
|
14,673,206 |
14,986,145 |
|
| Profit/(Ioss)
before tax |
|
(8,587,936) |
(20,736,065) |
|
| Taxation |
|
(44,510,667) |
14,414,506 |
|
| Profit/(Ioss)
after tax |
|
(53,098,603) |
(6,321,559) |
|
|
| The
profitability/operational results remained under strain due to
non-availability of sufficient credit lines in the past |
|
| few
years. The overall deficit of the company reduced in 1998-99 compared to last
year as expenses were |
|
| substantially
brought down as well as lease portfolio was corrected. The earning per share,
remain negative, |
|
| improved
in the period 1998-1999. The benefit in the area of taxation was realized as
deferred tax, fully provided, |
|
| was
partly reversed this year. |
|
|
| FUTURE
OUTLOOK |
|
|
| The
year 1999-2000 could be termed as a year in which all efforts would be made
to turn around the company. The |
|
| Board
has decided to strengthen the financial position of the company by building
its lease portfolio through prudent |
|
| and
selective lending. 1999-2000 would also witness further efforts in the
reduction of the stuck up financing. Equity |
|
| injection
from sound financial groups/individuals would be pursued in the overall
interest of the company. |
|
|
| CHANGE
IN THE BOARD |
|
|
| The
election of the Directors was held on June 30th 1999 on expiry of the term of
the serving Directors. The new |
|
| directors
who have joined the Board as a result of the election are as follows: |
|
|
| Mr.
Muhammad Aslam Khan |
Private Sector |
|
| Dr.
Iftikhar Ali Khan |
|
Private Sector |
|
| Mr.
Humayun Raza |
|
Nominee NDFC |
|
| Mr.
Taslim Haider Zaidi |
|
Nominee NDFC |
|
| Mr.
Usfandiar Sukhia |
|
Nominee NIT |
|
|
| Mr.
Humayun Raza was elected as the Chairman of the Board. |
|
|
| COMPLIANCE
WITH SECP REQUIREMENT ON YEAR :ZOO0 |
|
|
| ALC
fully meets the computerised system requirement of the SECP for the
millennium problem. |
|
|
| PATTERN
OF SHAREHOLDING |
|
|
| The
pattern of shareholding of the Company is annexed. |
|
|
| AUDITORS |
|
|
| The
present Auditors Messrs. Ford, Rhodes, Robson, Morrow, Chartered Accountants,
retire and being eligible, offer |
|
| themselves
for re-appointment. |
|
|
| ACKNOWLEDGMENT |
|
|
| The
company is thankful to the authorities of the State Bank of Pakistan and
Securities and Exchange Commission |
|
| of
Pakistan for their continued guidance. We would also like to thank our
valuable clients, financial institutions and |
|
| shareholders
for their continued support and co-operation. Appreciation is also placed on
record for the dedicated |
|
| hard
work put in by the staff of the Corporation. |
|
|
| ON
BEHALF OF THE BOARD |
|
|
| Lahore: |
|
ROOHI R. KHAN |
|
| 30th
November, 1999. |
|
CHIEF EXECUTIVE |
|
|
|
| PATTERN
OF SHAREHOLDINGS AS AT JUNE 30, 1999 |
|
|
| Number of |
|
Shareholding |
Total Shares Held |
|
| Shareholders |
From |
To |
|
| 314 |
1 |
100 |
14,924 |
|
| 363 |
101 |
500 |
89,867 |
|
| 155 |
501 |
1,000 |
114,222 |
|
| 323 |
1,001 |
5,000 |
620,320 |
|
| 48 |
5,001 |
10,000 |
334,220 |
|
| 5 |
10,001 |
15,000 |
56,103 |
|
| 2 |
15,001 |
20,000 |
35,738 |
|
| 3 |
20,001 |
25,000 |
64,852 |
|
| 1 |
25,001 |
30,000 |
26,136 |
|
| 1 |
40,001 |
45,000 |
41,817 |
|
| 1 |
45,001 |
50,000 |
47,844 |
|
| 1 |
50,001 |
55,000 |
50,772 |
|
| 1 |
55,001 |
60,000 |
55,806 |
|
| 2 |
65,001 |
70,000 |
134,489 |
|
| 1 |
70,001 |
75,000 |
72,600 |
|
| 1 |
75,001 |
80,000 |
79,500 |
|
| 1 |
100,001 |
105,000 |
104,544 |
|
| 1 |
120,001 |
125,000 |
121,000 |
|
| 1 |
155,001 |
160,000 |
155,300 |
|
| 3 |
260,001 |
265,000 |
783,004 |
|
| 2 |
520,001 |
525,000 |
1,045,440 |
|
| 1 |
525,001 |
530,000 |
527,720 |
|
| 1 |
565,001 |
570,000 |
569,329 |
|
| 1 |
2,610,001 |
2,615,000 |
2,612,600 |
|
| 1 |
2,695,001 |
2,700,000 |
2,696,253 |
|
| ---------- |
---------- |
---------- |
---------- |
|
| 1,234 |
|
10,454,400 |
|
| ========== |
========== |
========== |
========== |
|
|
|
| CATEGORIES
OF SHAREHOLDERS AS AT JUNE 30, 1999 |
|
|
| Categories
of Shareholders |
|
Number |
Shares Held |
Percentage |
|
|
of shareholders |
|
|
| INDIVIDUALS |
|
1,209 |
3,609,038 |
34.52 |
|
| INVESTMENT
COMPANIES |
4 |
263,073 |
2.52 |
|
| INSURANCE
COMPANIES |
|
2 |
611,146 |
5.85 |
|
| JOINT
STOCK COMPANIES |
9 |
378,199 |
3.62 |
|
| FINANCIAL
INSTITUTIONS |
3 |
5,381,453 |
51.48 |
|
| MODARABA |
|
4 |
95,622 |
0.92 |
|
| FOREIGN
INVESTORS |
|
0 |
0 |
0 |
|
| CO-OPERATIVE
SOCIETIES |
2 |
112,733 |
1.08 |
|
| CHARITABLE
TRUSTS |
|
1 |
3,136 |
0.03 |
|
| OTHERS |
|
0 |
0 |
0 |
|
|
---------- |
---------- |
---------- |
|
| TOTAL |
|
1,234 |
10,454,400 |
100.00 |
|
|
========== |
========== |
========== |
|
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed balance sheet of Asian Leasing Corporation Limited
as at June |
|
| 30,
1999 and the related profit and loss account and statement of sources and
application of funds, 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 and, after |
|
| due
verification thereof, we report that: |
|
|
| (a)
in our opinion, proper books of account 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
except for the |
|
| change
in the accounting policy for deferred tax as explained in Note: 2.4 to the
accounts with |
|
| which
we concur; |
|
|
| ii)
the expenditure, incurred during the year were 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; |
|
|
| ©
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 and the statement of sources and application of
funds, together with the notes |
|
| forming
part thereof, 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, |
|
| 1999
and of the profit and the changes in sources and application of funds for the
year then ended; and |
|
|
| (d)
in our opinion no Zakat was deductible at source under Zakat and Ushr
Ordinance, 1980. |
|
|
| Lahore' |
|
FORD, RHODES, ROBSON,
MORROW |
|
| 30th
November, 1999 |
|
CHARTERED ACCOUNTANTS |
|
|
|
| BALANCE
SHEET AS AT JUNE 30, 1999 |
|
|
|
Notes |
1999 |
1998 |
|
| CAPITAL
AND RESERVES |
|
|
Rupees |
Rupees |
|
| Authorised
capital |
|
| 25,000,000
(1998:25,000,000 ) ordinary |
|
| shares
of Rs. 10/- each |
|
250,000,000 |
250,000,000 |
|
|
========== |
========== |
|
| Issued,
subscribed and paid-up capital |
|
3 |
104,544,000 |
104,544,000 |
|
| Special
Reserve |
|
4 |
7,104,821 1 |
7,104,821 |
|
| General
Reserve |
|
31,336,477 |
31,336,477 |
|
| Accumulated
loss |
|
(67,188,988) |
(60,867,429 |
|
|
---------- |
---------- |
|
|
(28,747,690) |
(22,426,131 |
|
|
---------- |
---------- |
|
|
75,796,310 |
82,117,869 |
|
| LONG
TERM AND DEFERRED LIABILITIES |
|
| Long
term loans- secured |
|
5 |
16,666,669 |
52,639,036 |
|
| Obligation
under finance lease |
|
6 |
-- |
193,381 |
|
| Marginal
deposits on lease arrangements |
|
7 |
27,037,618 |
33,258,916 |
|
| Customers'
deposits- COIs |
|
8 |
400,000 |
575,000 |
|
| Provision
for gratuity |
|
25,277 |
25,277 |
|
| Provision
for deferred taxation |
|
3,240,000 |
22,900,000 |
|
|
---------- |
---------- |
|
|
47,369,564 |
109,591,610 |
|
| CURRENT
LIABILITIES |
|
| Current
portion of long term loans |
|
32,851,598 |
69,627,277 |
|
| Current
portion of obligation under finance lease |
|
-- |
112,109 |
|
| Current
portion of marginal deposits |
|
7 |
11,128,505 |
19,984,764 |
|
| Current
portion of Customers' deposits- COIs |
8 |
150,000 |
-- |
|
| Accrued
liabilities |
|
325,004 |
557,431 |
|
| Mark-up
accrued on secured loans |
|
370,716 |
1,200,511 |
|
| Mark-up
accrued on Certificates of Investment |
|
16,742 |
17,654 |
|
| Provision
for taxation |
|
47,592,294 |
45,399,129 |
|
| Central
Excise duty payable |
|
-- |
145,596 |
|
| Others |
|
310,650 |
797,800 |
|
| Dividends |
|
240,306 |
240,306 |
|
|
---------- |
---------- |
|
|
92,985,815 |
138,082,577 |
|
| CONTINGENCIES
AND COMMITMENTS |
9 |
-- |
-- |
|
|
---------- |
---------- |
|
|
216,151,689 |
329,792,056 |
|
|
========== |
========== |
|
|
| TANGIBLE
FIXED ASSETS |
|
10 |
4,471,708 |
5,974,703 |
|
| NET
INVESTMENT IN LEASE FINANCE |
|
|
|
| Lease
payments receivable |
|
173,099,000 |
268,374,847 |
|
| Residual
value |
|
37,731,162 |
53,346,258 |
|
|
---------- |
---------- |
|
| Gross
lease payments receivable |
|
210,830,162 |
321,721,105 |
|
| Less:
Unearned mark-up |
|
(38,785,206) |
(55,898,189) |
|
|
---------- |
---------- |
|
|
172,044,956 |
265,822,916 |
|
| Bad
debts written off |
|
(2,159,964) |
-- |
|
|
---------- |
---------- |
|
| Net
investment in lease finance |
|
169,884,992 |
265,822,916 |
|
| Less:
Current portion |
|
(46,577,043) |
(105,638,175) |
|
| Provision
for doubtful receivables |
|
(29,921,616) |
(17,681,126) |
|
|
---------- |
---------- |
|
|
93,386,333 |
142,503,615 |
|
| LONG
TERM INVESTMENTS |
|
11 |
8,617,000 |
8,617,000 |
|
| DEFERRED
COST |
|
12 |
1,036,538 |
2,069,538 |
|
| CURRENT
ASSETS |
|
|
| Current
portion of net investment in lease finance |
|
46,577,043 |
105,638,175 |
|
| Short
term finances |
|
13 |
-- |
2,266,573 |
|
| Other
investments |
|
14 |
-- |
10,000,000 |
|
| Advances,
deposits, prepayments and other receivables 15 |
|
33,389,527 |
18,218,602 |
|
| Cash
and bank balances |
|
16 |
28,673,540 |
34,503,850 |
|
|
---------- |
---------- |
|
|
108,640,110 |
170,627,200 |
|
|
---------- |
---------- |
|
|
216,151,689 |
329,792,056 |
|
| The
annexed notes form an integral part of these accounts. |
|
|
| CHIEF
EXECUTIVE |
|
DIRECTOR |
|
|
|
| PROFIT
AND LOSS ACCOUNT |
|
| FOR
THE YEAR ENDED JUNE 30, 1999 |
|
|
|
Notes |
1999 |
1998 |
|
|
|
Rupees |
Rupees |
|
| REVENUE |
|
|
| Income
from lease operations |
|
17 |
20,287,495 |
48,284,177 |
|
| Mark-up
income |
|
18 |
9,375,106 |
7,468,206 |
|
| Other income |
|
19 |
88,597 |
1,755,264 |
|
|
|
---------- |
---------- |
|
|
|
29,751,198 |
57,507,647 |
|
| EXPENDITURE |
|
|
|
|
| Direct
cost of leases |
|
|
7,850 |
27,431 |
|
| Financial
charges |
|
20 |
16,628,935 |
30,269,079 |
|
| Administrative
and operating expenses |
|
21 |
9,601,591 |
11,805,615 |
|
| Depreciation |
|
10 |
1,225,317 |
1,377,993 |
|
| Amortisation
of deferred cost |
|
12 |
1,033,000 |
1,187,167 |
|
| Provision
for doubtful receivables |
|
|
18,872,183 |
21,153,298 |
|
| Bad
debts written off directly |
|
|
3,118,387 |
-- |
|
| Provision
for diminution in value of investment |
|
-- |
275,000 |
|
|
|
---------- |
---------- |
|
|
|
50,487,263 |
66,095,583 |
|
|
|
---------- |
---------- |
|
| Loss
before tax |
|
|
(20,736,065) |
(8,587,936) |
|
| Taxation |
|
22 |
(14,414,506) |
44,510,667 |
|
|
---------- |
---------- |
|
| Loss after tax |
|
(6,321,559) |
(52098,603) |
|
| Accumulated
loss brought forward |
|
(60,867,429) |
(7,768,826) |
|
|
---------- |
---------- |
|
| Accumulated
loss carried forward |
|
(67,188,988) |
(60,867,429) |
|
|
========== |
========== |
|
| Earning
per Share |
|
24 |
-0.60 |
-5.08 |
|
|
========== |
========== |
|
| The
annexed notes form an integral part of these accounts. |
|
|
| CHIEF
EXECUTIVE |
|
DIRECTOR |
|
|
|
|
| STATEMENT
OF SOURCES AND APPLICATION OF |
|
| FUNDS
(CASH FLOW) |
|
| FOR
THE YEAR JUNE 30, 1999 |
|
|
|
1999 |
1998 |
|
|
Rupees |
Rupees |
|
| CASH
FLOW FROM OPERATING ACTIVITIES |
|
| Net
loss after taxation |
|
(6,321,559) |
(53,098,603) |
|
| Adjustment
for: |
|
| Depreciation |
|
1,225,317 |
1,377,993 |
|
| Amortisation
of deferred cost |
|
1,033,000 |
1,187,167 |
|
| (Profit)
on sale of fixed assets |
|
-- |
(1,398,077) |
|
| Provision
for doubtful receivables |
|
18,872,183 |
21,153,298 |
|
| Provision
for deferred tax |
|
(19,660,000) |
22,900,000 |
|
| Provision
for diminution in value of investments |
|
-- |
275,000 |
|
| Bad
debts written off directly |
|
3,118,387 |
-- |
|
|
---------- |
---------- |
|
|
4,588,887 |
45,495,381 |
|
|
---------- |
---------- |
|
| Operating
profit before working capital changes |
|
(1,732,672) |
(7,603,222) |
|
| (Increase)/decrease
in: |
|
| Short
term finances |
|
523,150 |
569,249 |
|
| Other
investments |
|
10,000,000 |
(10,000,000) |
|
| Advances,
deposits, prepayments and other receivables |
|
(21,802,618) |
(14,649,255) |
|
|
---------- |
---------- |
|
|
(11,279,468) |
(24,080,006) |
|
| Increase/(Decrease)
in: |
|
| Current
liabilities (other than current portion |
|
| of
long term loan, COl's and dividends) |
|
497,285 |
(5,407,554 |
|
|
---------- |
---------- |
|
| Cash
generated from operation |
|
12,514,855) |
(37,090,782) |
|
| Gratuity
paid. - |
|
-- |
(29,808) |
|
|
---------- |
---------- |
|
| NET
CASH FROM OPERATING ACTIVITIES |
|
12,514,855) |
(37,120,590) |
|
|
|
1999 |
1998 |
|
|
Rupees |
Rupees |
|
|
| Brought
forward |
|
(12,514,855) |
(37,120,590) |
|
| CASH
FLOW FROM INVESTING ACTIVITIES |
|
| Acquisition
of fixed assets |
|
(19,700) |
(2,271,230) |
|
| Sale
proceeds of fixed assets |
|
297,378 |
1,526,595 |
|
| Deferred
costs |
|
-- |
(1,522,917) |
|
| Net
investment in lease finance recovered |
|
95,559,460 |
125,508,892 |
|
| Net
investment in lease finance provided |
|
(1,781,500) |
(18,300,420) |
|
| Marginal
deposits on lease arrangements received |
|
444,825 |
2,087,053 |
|
| Marginal
deposits on lease arrangements repaid |
|
(15,522,382 |
(17,289,945) |
|
| Long
term investments |
|
-- |
(4,000) |
|
| Long
term finances |
|
785,000 |
14,503,217 |
|
|
---------- |
---------- |
|
| Net
Cash used in Investing Activities |
|
79,763,081 |
104,237,245 |
|
|
|
|
| CASH
FLOW FROM FINANCING ACTIVITIES |
|
| Obligation
under lease finance |
|
-- |
382,000 |
|
| Repayment
of obligation under lease finance |
|
(305,490) |
(76,510) |
|
| Dividends |
|
-- |
(6,540) |
|
| Long
term loans |
|
-- |
50,000,000 |
|
| Customers'
deposits- COIs |
|
(25,000) |
(2,150,000) |
|
| Repayment
of Iong term loans |
|
(72,748,046) |
(100,058,850) |
|
|
---------- |
---------- |
|
| Net
cash used in financing activities |
|
(73,078,536) |
(51,909,900) |
|
|
---------- |
---------- |
|
| Net
(decrease)/increase in cash and cash equivalents |
|
(5,830,310) |
15,206,755 |
|
| Cash
and bank balances at the beginning of the year |
|
34,503,850 |
19,297,095 |
|
|
---------- |
---------- |
|
| Cash
and bank balances at the end of the year |
|
28,673,540 |
34,503,850 |
|
|
========== |
========== |
|
| CHIEF
EXECUTIVE |
|
DIRECTOR |
|
|
|
|
| These
are for the period ranging from two years to three years and the return on
these deposits |
|
| range
from 17% to 18% p.a. |
|
|
| 9.
CONTINGENCIES AND COMMITMENTS |
|
|
| Nil |
|
|
| 10.
TANGIBLE FIXED ASSETS |
|
| These
are for company's own use :- |
|
|
|
C O S T |
|
Book Value |
DEPRECIATION |
|
|
To |
|
To |
Accumulated |
As at |
|
|
|
Jul-01 |
Additions/ |
June 30, |
Upto June 30, |
June 30, |
Charge for |
Rate |
|
|
1998 |
(Deletions) |
1999 |
1999 |
1999 |
The year |
% |
|
|
|
(Rupees) |
|
| Building - freehold |
2,430,520 |
-- |
2,430,520 |
911,445 |
1,519,075 |
121,526 |
5 |
|
| Leasehold improvements |
362,915 |
|
362,915 |
353,836 |
9,079 |
54,436 |
15 |
|
| Airconditioning
plant and |
|
|
|
| electric
installations |
804,570 |
-- |
804,570 |
479,147 |
325,423 |
120,686 |
15 |
|
| Furniture and fixtures |
852,723 |
-- |
852,723 |
508,121 |
344,602 |
68,698 |
10 |
|
| Office
machines and |
|
| equipments |
|
2,830,334 |
19,700 |
2,850,034 |
1,692,789 |
1,157,245 |
371,647 |
15 |
|
| Vehicles* |
|
3,185,062 |
'
(743,442) |
2,441,620 |
1,325,336 |
1,116,284 |
488,324 |
20 |
|
|
----------- |
----------- |
----------- |
----------- |
----------- |
----------- |
|
| 1999 |
|
10,466,124 |
19,700 |
9,742,382 |
5,270,674 |
4,471,708 |
1,225,317 |
|
|
(743,442) |
|
| 1998 |
|
11,151,953 |
2,271,230 |
10,466,124 |
7,319,962 |
5,974,703 |
1,377,993 |
|
|
(2,957,059) |
|
|
========== |
========== |
========== |
========== |
========== |
========== |
|
| *
This include vehicle costing Rs.406,268 having accumulated depreciation of
Rs.81,254 transferred from assets |
|
| subject
to finance lease to own assets during the year. |
|
|
| Detail
of fixed assets sold during the year. |
|
|
|
|
Accumulated |
Book |
Sale |
Profit/ |
Mode |
Particulars |
|
| Particulars |
|
Cost |
Depreciation |
Value |
Proceeds |
(Loss) |
of sale |
of Purchaser |
|
| Motor
Vehicle |
|
|
| Toyota
Corolla |
743,442 |
446,064 |
297,378 |
297,378 |
-- |
Negotiation Ex Chief
Executive |
|
|
Mr. M. Aslam |
|
|
52-B/8 Gulshan Iqbal |
|
|
Karachi |
|
|
|
1999 |
1998 |
|
|
Rupees |
Rupees |
|
| 11.
LONG TERM INVESTMENTS |
|
|
| Government
securities |
|
|
| Federal
Investment Bonds (Note: 11.1) |
|
7,800,000 |
7,800,000 |
|
|
| Listed
companies |
|
|
| Muslim
Commercial Bank Ltd. |
|
588,000 |
588,000 |
|
|
| 14,160
(1998: 14,160) ordinary shares of Rs. 10/- each |
|
| Market
value Rs. 20.05 (1998: Rs. 18.60) per share (Note: 11.2) |
|
|
| Lease
Pak Limited |
|
500,000 |
500,000 |
|
|
| 50,000
(1998: 50,000) ordinary shares of Rs. 10/- each |
|
| Market
value Rs.3.00 (1998: Rs. 4.50) per share |
|
|
| Less:
Provision for diminution in market value |
|
(275,000 |
(275,000 |
|
|
---------- |
---------- |
|
|
|
225,000 |
225,000 |
|
|
|
|
| Prudential
Discount and Guarantee House Ltd. |
|
4,000 |
4,000 |
|
|
| 2,000
ordinary shares of Rs. 10/- each |
|
| Market
value Rs. 2.25 (1998: Rs. 2.0) per share |
|
|
---------- |
---------- |
|
|
8,617,000 |
8,617,000 |
|
|
========== |
========== |
|
| 11.1
These investments have been made to comply with SBP's Rules of Business |
|
| (Prudential
Regulations ) for Non-Banking Financial Institutions. FIBs have face value |
|
| of
Rs. 7,800,000 (1998: Rs. 7,800,000) and maturity period range from three to
ten |
|
| years.
The mark-up receivable is 15% per annum. |
|
|
| 11.2
No provision has been made for the diminution in value amounting to Rs.
378,592 |
|
| (1998:
Rs.324,624) as it is considered temporary in the context of the company's
intention |
|
| to
hold this investment on a long term basis. |
|
|
| 12.
DEFERRED COSTS |
|
|
|
|
Loan |
|
|
|
negotiation |
Share issue |
Total |
Total |
|
|
expenses |
expenses |
1999 |
1998 |
|
|
|
Rupees |
Rupees |
Rupees |
Rupees |
|
| Opening
balance |
|
1,992,946 |
76,592 |
2,069,538 |
1,733,788 |
|
| Add:
Incurred during the year |
-- |
-- |
-- |
1,522,917 |
|
| Less:
Amortised during the year |
985,126 |
47,874 |
1,033,000 |
1,187,167 |
|
|
---------- |
---------- |
---------- |
---------- |
|
|
1,007,820 |
28,717 |
1,036,538 |
2,069,538 |
|
|
========== |
========== |
========== |
========== |
|
|
|
|
|
1999 |
1998 |
|
|
|
Rupees |
Rupees |
|
|
|
|
|
| 13.
SHORT TERM FINANCE- SECURED |
|
| Short
term morabaha finances |
|
207,335 |
207,335 |
|
| Current
portion of long term morabaha |
|
| finances
-overdue |
|
958,423 |
2,266,573 |
|
| Bad
Debt Written off |
|
|
(958,423) |
-- |
|
|
---------- |
---------- |
|
|
-- |
2,266,573 |
|
|
---------- |
---------- |
|
|
207,335 |
2,473,908 |
|
| Less:
Provision for doubtful finance |
|
207,335 |
207,335 |
|
|
---------- |
---------- |
|
|
-- |
2,266,573 |
|
|
========== |
========== |
|
| These
have been provided under morabaha agreements with aggregate resale price of
Rs.230,145'(1998: |
|
| Rs.
230,145) repayable within one year. These are secured by demand promissory
notes and personal |
|
| guarantees
of the directors of the respective Loanee companies. |
|
|
| 14.
OTHER INVESTMENTS |
|
|
| These
represent short term placements under resale (Reverse Repo) arrangements with
other NBFIs |
|
| secured
against Government securities. This was matured during the year. |
|
|
|
1999 |
1998 |
|
| 15.
ADVANCES, DEPOSITS, PREPAYMENTS |
|
Rupees |
Rupees |
|
| AND
OTHER RECEIVABLES |
|
|
| Advances
to employees |
|
t92,146 |
194,079 |
|
| Exchange
rate difference recoverable from |
|
|
|
| State
Bank of Pakistan |
|
15,764,188 |
273,909 |
|
| Deposits |
|
161,700 |
199,900 |
|
| Prepayments |
|
138,772 |
539,580 |
|
| Accrued
income (Note: 15.1) |
|
899,432 |
2,802,966 |
|
| Advance
tax paid |
|
15,598,248 |
14,190,152 |
|
| Other
receivables |
|
635,041 |
18,016 |
|
|
---------- |
---------- |
|
|
33,389,527 |
18,218,602 |
|
|
========== |
========== |
|
|
|
|
| 15.1
Accrued income |
|
|
|
| Long
term investment |
|
539,959 |
434,959 |
|
| Bank
deposits |
|
-- |
425,382 |
|
| On
lease operation |
|
27,836,365 |
22,787,824 |
|
| On
morabaha finances and advances |
|
-- |
35,828 |
|
|
---------- |
---------- |
|
|
28,376,324 |
23,683,993 |
|
| Less:
Provision against doubtful income |
|
|
|
| Lease
operations |
|
27,476,892 |
20,845,199 |
|
| Morabaha
finance |
|
-- |
35,828 |
|
|
---------- |
---------- |
|
|
27,476,892 |
20,881,027 |
|
|
---------- |
---------- |
|
|
899,432 |
2,802,966 |
|
|
========== |
========== |
|
| 16.
CASH AND BANK BALANCES |
|
| On
deposit accounts |
|
27,590,463 |
33,417,295 |
|
| On
current accounts (Note: 16.1) |
|
1,016,037 |
1,000,405 |
|
| Cash in hand |
|
67,040 |
86,150 |
|
|
---------- |
---------- |
|
|
28,673,540 |
34,503,850 |
|
|
========== |
========== |
|
|
|
|
| 16.1
It includes an interest free deposit of Rs. 509,913 (1998 Rs. 509,913)
maintained with State Bank |
|
| of
Pakistan under Rule 6 of SBP's Rules of Business (Prudential Regulations) for
Non-Banking |
|
| Financial
Institutions. |
|
|
| 17.
INCOME FROM LEASE OPERATIONS |
|
|
| Mark-up
on lease operations |
|
20,269,680 |
48,107,997 |
|
| Front end fee |
|
17,815 |
162,073 |
|
| Commitment
fee |
|
-- |
14,107 |
|
|
---------- |
---------- |
|
|
20,287,495 |
48,284,177 |
|
|
========== |
========== |
|
| 18.
MARK-UP INCOME |
|
|
|
| Federal
Investment Bonds |
|
1,170,000 |
1,170,582 |
|
| Bank
deposits |
|
8,183,866 |
3,812,814 |
|
| Morabaha
finance |
|
-- |
2,371,894 |
|
| Advance
against leases |
|
-- |
62,916 |
|
| Dividend
income |
|
21,240 |
50,000 |
|
|
---------- |
---------- |
|
|
9,375,106 |
7,468,206 |
|
|
========== |
========== |
|
|
| 19.
OTHER INCOME |
|
| Miscellaneous
and Documentation charges recovered |
|
88,597 |
357,187 |
|
| Profit
on sale of fixed assets |
|
-- |
1,398,077 |
|
|
---------- |
---------- |
|
|
88,597 |
1,755,264 |
|
|
========== |
========== |
|
|
|
|
| 20.
FINANCIAL CHARGES |
|
|
|
| Mark-up
on long term secured loans |
|
13,731,567 |
21,690,345 |
|
| Mark-up
on short term secured loans |
|
-- |
2,841,233 |
|
| Mark-up
on certificates of investment |
|
101,118 |
288,368 |
|
| Foreign
exchange risk coverage fee |
|
2,556,275 |
4,995,573 |
|
| Exchange
loss |
|
212,567 |
306,165 |
|
| Others |
|
27,409 |
147,395 |
|
|
---------- |
---------- |
|
|
16,628,935 |
30,269,079 |
|
|
========== |
========== |
|
|
|
|
| 21.
ADMINISTRATIVE AND OPERATING EXPENSES |
|
|
| Salaries
and benefits |
|
5,658,054 |
5,881,336 |
|
| Rent |
|
578,159 |
528,621 |
|
| Utilities |
|
228,501 |
329,821 |
|
| Stationery
and supplies |
|
281,147 |
353,558 |
|
| Repairs
and maintenance |
|
618,332 |
895,471 |
|
| Insurance |
|
190,838 |
295,856 |
|
| Telephone,
telex and postage |
|
561,796 |
610,862 |
|
| Travelling |
|
106,211 |
377,251 |
|
| Boarding
and lodging |
|
36,068 |
124,147 |
|
| Legal
and professional charges |
|
451,251 |
691,223 |
|
| Advertisement |
|
115,250 |
328,163 |
|
| Auditors'
remuneration (Note 21.1) |
|
65,000 |
217,270 |
|
| Donations
(Note 21.2) |
|
-- |
500 |
|
| Corporate
expenses |
|
159,880 |
168,992 |
|
| Zakat |
|
501 |
6,093 |
|
| Other
expenses |
|
550,603 |
996,451 |
|
|
---------- |
---------- |
|
|
9,601,591 |
11,805,615 |
|
|
========== |
========== |
|
| 21.1
Auditors' Remuneration- |
|
| Audit fee |
|
65,000 |
65,000 |
|
| Tax
and other consultancy |
|
-- |
137,500 |
|
| Expenses
reimbursed |
|
-- |
14,770 |
|
|
---------- |
---------- |
|
|
65,000 |
217,270 |
|
|
========== |
========== |
|
| 21.2
None of the directors or their spouses had any interest in any of the donees. |
|
|
|
|
1999 |
1998 |
|
|
Rupees |
Rupees |
|
| 22.
TAXATION |
|
| Current |
|
| For the year |
|
11,500,000 |
19,000,000 |
|
| Corporate
Assets Tax (Note; 22.1) |
|
-- |
2,610,667 |
|
|
---------- |
---------- |
|
|
11,500,000 |
21,610,667 |
|
| Deferred |
|
(19,660,000) |
22,900,000 |
|
| Prior
years' adjustment |
|
(6,254,506) |
-- |
|
|
---------- |
---------- |
|
|
(14,414,506) |
44,510,667 |
|
|
========== |
========== |
|
|
|
|
| 22.1
Provision for Corporate Assets Tax includes Additional Tax and Penalty
aggregating Rs.1,610,667 |
|
| levied
for alleged late payment of the tax and filing of return. The company does
not accept that it |
|
| is
subject to this tax and is contesting the levies in appeals. |
|
|
| 22.2
The company has reversed the deferred tax amounted to Rs.22.9 million as
provided against all |
|
| timing
differences in the financial statements for the year ended June 30, 1998 and
opted to make |
|
| the
provision for deferred tax in accordance with the requirements as stated in
the circular No.16 |
|
| dated
September 09, 1999 of Securities and Exchange Commission of Pakistan under
which |
|
| Rs.3.24
million being equivalent to one fifth of deferred tax liability has been
provided as on June |
|
| 30,
1999. The deferred tax of Rs.11.62 million, for the timing differences,
therefore, remain |
|
| unprovided. |
|
|
| 23. REMUNERATION OF CHIEF EXECUTIVE,
DIRECTORS AND EXECUTIVES |
|
|
|
Chief Executive |
Executives |
|
|
|
1999 |
1998 |
1999 |
1998 |
|
|
Rupees |
Rupees |
Rupees |
Rupees |
|
|
| Managerial remuneration |
|
334,677 |
760,000 |
349,200 |
298,764 |
|
| Bonus |
|
-- |
120,000 |
28,000 |
-- |
|
| Accommodation |
|
126,000 |
342,000 |
157,140 |
193,889 |
|
| Utilities |
|
80,000 |
90,000 |
34,920 |
25,726 |
|
| Medical expenses |
|
15,537 |
60,022 |
61,111 |
120,650 |
|
| Club subscription |
|
-- |
13,493 |
-- |
-- |
|
| Residential
telephone |
|
|
|
| Bills reimbursed |
|
40,522 |
34,942 |
6,060 |
6,000 |
|
|
---------- |
---------- |
---------- |
---------- |
|
|
596,736 |
1,420,457 |
636,431 |
645,029 |
|
|
========== |
========== |
========== |
========== |
|
| Number of persons |
|
1 |
1 |
2 |
3 |
|
|
========== |
========== |
========== |
========== |
|
|
| The
Chief Executive and 2 Executives are provided with company owned and
maintained cars. |
|
|
| Fees
paid to 5 non-executive Directors for attending meetings during the year Rs.
13,500 (1998 : |
|
| 5
Directors fee paid Rs. 40,500) |
|
|
| Compensation
package of Rs. 1,479,476/- was paid to Mr. Aslam (Ex. Chief Executive as
approved by the |
|
| Board on leaving the job due to merger
process). |
|
|
| 24.
EARNING PER SHARE |
|
|
| There
is no diluted effect on the basic earning per share which is based on: |
|
|
|
1999 |
|
1998 |
|
|
Numerator |
Denominator |
Numerator |
Denominator |
|
|
Rupees |
Shares |
Rupees |
Shares |
|
|
A |
B |
A |
B |
|
| Loss
attributed to |
|
| ordinary
share holders |
|
6,321,559 |
-- |
53,098,603 |
-- |
|
| Weighted
average number of |
|
|
| ordinary
shares outstanding |
|
|
| during
the year |
|
-- |
10,454,400 |
-- |
10,454,400 |
|
|
---------- |
---------- |
---------- |
---------- |
|
|
6,321,559 |
10,454,400 |
53,098,603 |
10,454,400 |
|
|
========== |
========== |
========== |
========== |
|
| Earning
per share (A/B) Rs. |
|
-0.60 |
|
-5.08 |
|
|
|
========== |
========== |
========== |
========== |
|
|
| 25. FINANCIAL INSTRUMENTS & RELATED
DISCLOSURES |
|
| 25.1
Exposure to Markup Rate Risk |
|
| The
company exposure to Risks associated with mark up rates on its financial
assets and liabilities |
|
| are
summarized as follow: |
|
|
Mark up Bearing |
Non Mark up Bearing |
|
|
Note |
Within |
One year to |
Within |
One year to |
|
|
|
|
One year |
Five years |
One year |
Five years |
Total |
|
|
|
(Rupees) |
(Rupees) |
(Rupees) |
(Rupees) |
(Rupees) |
|
| Financial
assets |
|
| Long term investments |
|
11 |
|
7,800,000 |
-- |
817,000 |
8,617,000 |
|
| Net investment in lease
finance |
|
46,577,043 |
123,307,949 |
-- |
-- |
169,884,992 |
|
| Advances,
deposits & |
|
|
|
| prepayments |
|
15 |
-- |
-- |
45,129,399 |
-- |
45,129,399 |
|
| Cash & Bank Balances |
|
16 |
27,590,463 |
|
1,083,075 |
-- |
28,673,538 |
|
|
|
---------- |
---------- |
---------- |
---------- |
---------- |
|
|
74,167,506 |
131,107,949 |
46,212,474 |
817,000 |
252,304,929 |
|
| Financial
Liabilities |
|
| Long term loan |
|
5 |
32,851,598 |
16,666,669 |
-- |
-- |
49,518,267 |
|
| Certificate of investment |
|
8 |
150,000 |
400,000 |
|
550,000 |
|
| Lease key money |
|
7 |
-- |
-- |
11,128,505 |
27,037,618 |
38,166,123 |
|
| Accrual & other
liabilities |
|
-- |
-- |
1 ,023,112 |
-- |
1,023,112 |
|
| Unclaimed dividend |
|
-- |
-- |
240,306 |
-- |
240,306 |
|
|
---------- |
---------- |
---------- |
---------- |
---------- |
|
|
33,001,598 |
17,066,669 |
12,391,923 |
27,037,618 |
89,497,808 |
|
|
---------- |
---------- |
---------- |
---------- |
---------- |
|
| Net
financial assets/ |
|
| (Liabilities) |
|
41,165,908 |
114,041,280 |
33,820,551 |
'(26,220,618) |
162,807,121 |
|
|
========== |
========== |
========== |
========== |
========== |
|
| 25.2
Effective Mark up Rate |
|
|
| The
Effective Mark up rate of company's financial assets and liabilities are as
follows: |
|
| Financial
Assets |
|
| Investment
in lease finance |
|
21 - 27% |
|
| Long
Term Investment |
|
12 - 15% |
|
| Bank
Balances |
|
8- 15% |
|
|
|
|
| Financial
liabilities |
|
|
|
|
|
|
| Long
Term Loans |
|
9.4 - 18.5% |
|
| Customers'
Certificate of |
|
|
|
| Investment |
|
17 - 18% |
|
|
| 25.3
Credit Risk |
|
|
| The
company's credit risk exposure is not significantly different from that
reflected in the financial |
|
| statements.
The management monitors and limits the company's exposure to credit risk
through |
|
| monitoring
of clients' credit exposure, reviews and conservative estimates of provisions
for doubtful |
|
| receivable,
if any, and through prudent use of collateral policy. The management is of
the view that |
|
| it
is not exposed to significant concentration of credit risk as its financial
assets are adequately |
|
| diversified
in organisations of sound financial standing covering various industrial
sectors and |
|
| segments. |
|
|
| 25.4
Fair value of financial instruments, |
|
|
| The
estimated fair value of financial instruments are not significantly different
from their book value |
|
| as
shown in these financial statements except for long term investment as
disclosed in Note 11. |
|
|
|
|
|
| 26.
LEASES AND ADVANCES IN EXCESS OF 20% OF |
|
| PAID-UP
CAPITAL AND FREE RESERVES |
|
|
| Following
are the parties to whom net investment in lease finance exceeded 20% (i.e.
Rs. 8,262,501) of the |
|
| paid
up capital and free reserves of the company. |
|
|
| Group name |
|
Rupees |
|
|
| Chakwal
group |
|
25,798,156 |
|
| Pakland
Cement |
|
18,388,588 |
|
| Chaudri
Group |
|
13,819,270 |
|
| Naseern
Saigal Group |
|
9,576,460 |
|
|
| 27.
GENERAL |
|
|
| -
Previous period figures have been re-arranged wherever necessary for the
purposes of comparison. |
|
| -
Figures have been rounded off to the nearest rupee. |
|
|
| CHIEF EXECUTIVE |
DIRECTOR |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
