| English Leasing Limited |
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| Annual Report 1999 |
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| CONTENTS |
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| Company Information |
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| Notice
of Annual General Meeting |
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| Director's Report |
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| Auditor's Report |
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| Balance Sheet |
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| Profit & Loss Account |
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| Statement
of Changes in Financial Position |
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| Notes to the Accounts |
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| Pattern of Shareholding |
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| COMPANY
INFORMATION |
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| BOARD OF DIRECTORS |
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| Sheikh Javaid Mahmood |
|
Chairman & Managing
Director |
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| Sheikh Manzoor Elahi |
|
Chief Executive |
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| Sheikh Irshad Ahmad |
|
Director Marketing |
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| Mr.
Muhammad Rashid Zahir |
Nominee of SAPICO |
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| Mrs. Farzana Munaff |
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Nominee of NIT |
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| Mr. Shahid Mahmood |
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Nominee of lCP |
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| Mrs. Taskeen Javaid |
|
Director |
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| COMPANY SECRETARY |
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| Mr. Azhar Hussain |
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| BANKERS |
|
| Allied
Bank of Pakistan Limited |
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| Muslim
Commercial Bank Limited |
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| The Bank of Punjab |
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| Prudential
Commercial Bank Limited |
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| Indus Bank Limited |
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| AUDITORS |
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| Rahim Iqbal Rafiq & Co. |
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| Chartered Accountants |
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| LEGAL ADVISOR |
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| Mr. Haq Nawaz Chatta |
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| International Legal Services |
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| REGISTRARS
& SHARE TRANSFER OFFICE |
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| C
& K Management Associates (Pvt.) Limited |
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| 404,
Trade Tower, Abdullah Haroon Road, |
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| Near
Metropole Hotel, Karachi. |
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| REGISTERED OFFICE |
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| 801,
8th Floor, Fortune Centre |
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| 45-A,
Block-6, P.E.C.H.S., Shahrah-e-Faisal, Karachi. |
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| Tel:
92 21 4529061-64 (4 Lines) |
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| Fax: 92 21 4529065 |
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| PRINCIPAL OFFICE |
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| M. K. Arcade |
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| 32-Davis Road, Lahore. |
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| Tel: 6303855-58 |
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| Fax: 92 42 6304251 |
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| Email: ell@pol.com.pk |
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| NOTICE
OF ANNUAL GENERAL MEETING |
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| Notice
is hereby given that Eighth Annual General Meeting of the shareholders of
English Leasing Limited will be held at its |
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| Registered
Office 801, 8th Floor, Fortune Centre Shahrah-e-Faisal Karachi on Tuesday,
December 21, 1999 at 10:30 a.m. to transact |
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| the following business: |
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| 1.
To confirm the Minutes of Seventh Annual General Meeting held on December 31,
1998. |
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| 2.
To receive, consider and adopt the Audited Accounts of the Company for the
year ended June 30, 1999 together with the |
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| Directors'
and Auditors' Report thereon. |
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| 3.
To approve Cash Dividend of Rs. 1.25 per share (12.50%) for the year ended
June 30.1999 as recommended by the Board |
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| of Directors. |
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| 4.
To appoint Auditors for the year 1999-2000 and fix their remuneration. The
present Auditors M/s Rahim Iqbal Rafiq & |
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| Co.
Chartered Accountants, retire and being eligible. offer themselves for
reappointment. |
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| 5.
To transact any other business which may be placed before the Meeting with
the permission of the Chair. |
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| Karachi: November 26, 1999 |
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By Order of the Board |
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|
(Azhar Hussain) |
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|
Company Secretary |
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| Notes: |
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| 1.
The Share Transfer Books of the Company will remain closed from December 14,
1999 to December 21, 1999, (both days |
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| inclusive). |
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| 2.
A member entitled to attend and vote at this Meeting is entitled to appoint
another member as his/her proxy, in order to |
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| be
effective. must be received at the Registered Office of the Company not less
than 48 hours before the time for holding |
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| the meeting |
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| 3.
Filing of Declaration for Exemption of Zakat. members are requested to file
their declaration under the Zakat and Ushr |
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| Ordinance,
1980 on Non judicial Stamp Paper of Rs. 20/- for exemption of Zakat to the
Registrar, C & K Management |
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| Associates
(Pvt) Limited, 4th Floor, Trade Tower, Abdullah Haroon Road, Near Metropole
Hotel, Karachi. |
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| 4.
Members are required to notify the change of address, if any, immediately. |
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| 5.
As per rules, no gift will be given to the shareholders. |
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| DIRECTORS'
REPORT |
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| The
Directors of your Company are pleased to present the 8th Annual Report
together with the Audited Accounts of the Company |
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| for
the year ended June 30, 1999. |
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| Financial Results: |
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| The
financial results of the Company for the year ended June 30, 1999 are as
follows: |
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|
(Rupees) |
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| Profit Before Taxation |
|
16,068,749 |
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| Taxation |
|
|
|
| Current Year |
|
(578,667) |
|
| Previous Year |
|
(901,340) |
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| Net Profit after Taxation |
|
14,588,742 |
|
| Unappropriated
Profit brought forward |
|
905,147 |
|
| Profit
available for appropriation |
|
15,493,889 |
|
|
| Appropriation: |
|
|
|
|
| Transferred
to Statutory Reserve |
|
(2,917,748) |
|
| Transferred
to Contingencies Reserve |
|
(894,358) |
|
| Transferred
from General Reserve for deferred taxation |
14,000,000 |
|
| Transferred
to ,Capital Reserve for deferred taxation |
|
(14,000,000) |
|
| Proposed
Cash Dividend (12.5%) |
|
(10,000,000) |
|
| Unappropriated
Profit carried forward |
|
1,681,783 |
|
| Earning per share |
|
1.82 |
|
|
| Operational Review: |
|
|
| The
year 1998-99 has been yet another difficult and challenging year for the
leasing sector. While overall economic performance |
|
| of
the country remained mixed in face of difficulties and deepening of global
economic recession and slowing down of the country's |
|
| real
GDP growth rate. Measures taken by the Government after economic sanctions
like reduction in import duties, rationalizing |
|
| of
duty drawback, enlarging the scope of items for export refinance, |
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| lowering
of interest rates and electricity tariff for large industries, |
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| could
not boost up the economy. With the fall in industrial growth, |
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| good
clientage and business remained very hard to find while default |
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| ratio
mounted high. The management took strategic decision and |
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| restricted
itself to the lessees enjoying high creditability with low |
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| risk
profile and inspire of all constraints your Company, by the |
|
| grace
of Almighty Allah has been able to maintain its normal growth. |
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| During
the FY 1998-99, the company made gross disbursements |
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| of
Rs. 102.832 million raising total gross disbursements to Rs. |
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| 678.597
million, thus reflecting an increase of 18% over the |
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| previous
year figure of Rs. 575.765 million. The net investment |
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| in
leases registered an increase of 13% from Rs. 241.855 |
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| million
in 1998 to Rs. 272.703 million in 1999. Total revenue |
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| generated
by the company was Rs. 51.173 million reflecting |
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| a
minor fall of 1.16% from the previous year figure of Rs. |
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| 51.714
million. The company earned pretax profit of Rs. 16.443 |
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| million
as against Rs. 22.330 million of the previous year. |
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| Due
to bleak economic conditions, uncertainty in the stock |
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| market
persisted. However, market value of long term |
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| investment
of the company, which was Rs. 3.301 million in |
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| 1998
improved to Rs. 5.604 million. Similarly values of short |
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| term
investment improved from Rs. 0.386 M to Rs. 0.600 M, |
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| thus
instead of further depletion in the values of both Short |
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| Term
and Long Term Investments, there had been significant |
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| improvement
of Rs. 2.515 million. |
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| The
investment made by your company in leases are well balanced and diversified.
Only reputed and financially sound clients have |
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| been
entertained. Asset-wise lease portfolio comprise of Machinery 86%, Vehicle
10%, Equipment 4%. Sector-wise exposure in |
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| Textile
Processing, Weaving & Spinning 15%, Knitting 14%, Dyeing & Printing
8%, Engineering 18%, Sugar 12%, Electronics |
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| 6%,
Services 7%, Pharmaceutical 3%, Synthetic & Fibre 5% and Miscellaneous
12%. |
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| Deferred Taxation: |
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| As
at June 30, 1999 to fulfil the Securities & Exchange Commission
requirements and meet the requirement of IAS-12 for the |
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| creation
of capital revenue against deferred tax liability arising due to timing
difference between book and income tax revenue or |
|
| charges
was estimated at Rs. 34.20 million. The Company has transferred Rs. 14.16
million (Rs. 9.15 million for the current year |
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| and
Rs. 5.01 million being 1/5th of the total deferred tax liability of Rs. 25.05
for the previous years) leaving Rs. 20.05 million as |
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| unprovided
deferred tax liability to be appropriated to capital revenue in equal
instalments by June 20, 2003. |
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|
| Recoveries: |
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| The
management has always attached highest priority to the recoveries of its
lease rentals, overdues and its stuck up portfolio and |
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| taken
various steps like exercising more vigilance in selection of clients,
securing of collateral and effective monitoring through |
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| close
follow up of each and every case to ensure maximum recoveries and minimize
infected portfolio, but inspite of all measures |
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| the
recovery rate dropped due to unfavourable economic conditions and slowing
down of industrial activity. In view of the recent |
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| drive
for the recoveries coupled with stem action contemplated against defaulters
and promulgation of fresh recovery ordinance, |
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| it
is hoped that the situation will improve. |
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|
| Funding: |
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|
| It
has always been our endeavour to secure maximum long term credit facilities
from the Banks and DFIs, but Banks generally avoid |
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| long
term accommodation. However, your company has been able to secure Rs. 10.00
million from Pak-Libya for three years while |
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| Rs.
20:00 million from them is under documentation. First Allied Bank Modaraba
also has agreed to extend long term credit line |
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| of
Rs. 40.00 million for three years. Funding of Rs. 20.00 million is being
negotiated with A1-Faysal Investment Bank Limited. |
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| Besides,
the company has availed short term facilities aggregating Rs. 154.00 million
during the year from Investment Banks and |
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| Financial Institutions. |
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| Credit Rating: |
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| The
Company was assigned long term credit rating as BB+ (Double B plus) and short
term rating as B (single B) for the pervious |
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| year,
which is being reviewed by DCR-VIS Credit Rating Company Limited and latest
Credit Rating is expected to be finalized |
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| very
shortly. |
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| Future
Outlook: |
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| Contrary
to expectations due to unsatisfactory economic conditions, the leasing sector
continued to face the challenges like non- |
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| availability
of long term funding, shrinkage of spreads, paucity of good clients, mounting
competition etc., the Company could not |
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| achieve
the desired level. However, in the light of expected bumper crops of Cotton
and Rice this year, overall economy and industrial |
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| activity
is expected to improve bringing some much needed relief for the Leasing
Sector. While entering into new millennium, we |
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| have
resolved to intensify our efforts still further for the progress and
prosperity of our Company. |
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|
| Year 2000 Compliance: |
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| We
are pleased to mention that necessary modification and additions in the
Hardware and our Systems have been made which is |
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| now
fully year 2000 compliant. |
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|
| Shareholding Pattern: |
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| The
pattern of shareholding has been incorporated in the Annual Report at the
end., |
|
|
| Auditors: |
|
| The
present Auditors, M/s Rahim Iqbal Rafiq & Co., Chartered Accountants
retire and being eligible offer themselves for reappointment. |
|
|
| Acknowledgment: |
|
| We
convey our thanks to the State Bank of Pakistan, Securities & Exchange
Commission of Pakistan, Banks, Financial Institutions |
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| for
extending their continued support and guidance. We are also grateful to our
valued clients and shareholders for their cooperation |
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| and
the trust reposed in our Company. We also place our appreciation on record
for the commitment and hardwork put in by the |
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| members of the staff. |
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|
For and on Behalf of the
Board |
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|
| Karachi: |
|
(SHEIKH JAVAID MAHMOOD) |
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| Dated: 26th November, 1999 |
|
Chairman & Managing
Director |
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|
|
| AUDITORS
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed Balance Sheet of English Leasing Limited as at June
30, 1999 and the related Profit and Loss Account |
|
| and
Statement of Changes in Financial Position 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
the 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 and |
|
| Profit
and Loss Account and the Statement of Changes in Financial Position, 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 Financial |
|
| Position
for the year then ended; and |
|
|
| (d)
in our opinion, Zakat deductible at source under the Zakat and Ushr
Ordinance, 1980 was deducted by the company and |
|
| deposited
in the Central Zakat Fund established under section 7 of that Ordinance. |
|
|
| (e)
Without qualifying our opinion, we draw attention to Note 15.2 whereby long
term investment are carried at cost and no |
|
| provision
has been made for the decline by Rs. 13. 707 million market value of these
investments. |
|
|
| Lahore: |
|
Rahim Iqbal Rafiq &
Co. |
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| Dated: 26th November, 1999 |
|
Chartered Accountants |
|
|
|
| BALANCE
SHEET AS AT JUNE 30, 1999 |
|
|
|
|
1999 |
1998 |
|
|
Note |
Rupees |
Rupees |
|
|
| EQUITY AND LIABILITIES |
|
|
| SHARE
CAPITAL AND RESERVES |
|
|
| Authorised Share Capital |
|
|
| 50,000,000
Ordinary shares of Rs. 10 each |
|
500,000,000 |
500,000,000 |
|
|
============= |
============= |
|
|
| Issued,
Subscribed and Paid-up Share Capital |
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| 8,000,000
Ordinary shares of Rs. 10 each |
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| fully paid in cash |
|
80,000,000 |
80,000,000 |
|
|
| Reserves |
|
| Capital reserves |
|
3 |
34,947,025 |
18,029,277 |
|
| Revenue reserves |
|
4 |
13,874,618 |
26,980,260 |
|
| Unappropriated profit |
|
1,681,783 |
905,147 |
|
|
----------------------- |
----------------------- |
|
|
50,503,426 |
45,914,684 |
|
|
----------------------- |
----------------------- |
|
|
130,503,426 |
125,914,684 |
|
| NON-CURRENT
LIABILITIES |
|
| Long Term Loans |
|
5 |
58,856,013 |
41,927,005 |
|
| Obligations
under Finance Lease |
6 |
2,171,243 |
2,890,903 |
|
| Long Term Deposits |
|
7 |
34,087,151 |
24,913,582 |
|
| Long
Term Certificates of Investment |
8 |
10,055,447 |
12,282,344 |
|
| DEFERRED LIABILITIES |
|
|
| Gratuity |
|
|
435,784 |
259,991 |
|
|
----------------------- |
----------------------- |
|
|
|
105,605,638 |
82,273,825 |
|
| CURRENT LIABILITIES |
|
| Current
portion of obligations |
|
| under finance lease |
|
719,660 |
600,655 |
|
| Current
maturity of long term loans |
|
32,926,496 |
42,068,607 |
|
| Short term finances |
|
9 |
42,499,707 |
5,000,000 |
|
| Short
term certificates of investment |
8 |
5,100,000 |
4,475,000 |
|
| Accrued and other liabilities |
|
10 |
6,485,393 |
6,770,458 |
|
| Taxation |
|
|
-- |
108,255 |
|
| Dividend payable |
|
11 |
10,504,088 |
16,255,513 |
|
|
|
|
----------------------- |
----------------------- |
|
|
|
|
98,235,344 |
75,278,488 |
|
| CONTINGENCIES
AND COMMITMENTS |
12 |
-- |
-- |
|
|
----------------------- |
----------------------- |
|
|
|
334,344,408 |
283,466,997 |
|
|
|
============== |
============== |
|
|
|
| ASSETS |
|
|
| NON-CURRENT ASSETS |
|
|
| Tangible Fixed Assets |
|
13 |
8,398,526 |
8,669,673 |
|
| Net
Investment in finance leases |
14 |
133,566,358 |
152,346,487 |
|
| Long Term Investments |
|
15 |
19,310,875 |
18,310,875 |
|
| Long Term Deposits |
|
16 |
822,155 |
577,155 |
|
|
|
|
----------------------- |
----------------------- |
|
|
|
|
162,097,914 |
179,904,190 |
|
| CURRENT ASSETS |
|
|
|
|
|
| Current
portion of net investment in leases |
|
135,164,555 |
85,536,073 |
|
| Investment
in quoted shares against |
|
|
|
|
| sale purchase contract |
|
|
-- |
4,107,022 |
|
| Short term investments |
|
17 |
386,285 |
386,285 |
|
| Short term finances |
|
18 |
31,000,000 |
-- |
|
| Advances,
prepayments and other receivables |
19 |
2,898,506 |
884,239 |
|
| Cash and bank balances |
|
20 |
2,797,148 |
12,649,188 |
|
|
----------------------- |
----------------------- |
|
|
|
172,246,494 |
103,562,807 |
|
|
|
|
|
----------------------- |
----------------------- |
|
|
334,344,408 |
283,466,997 |
|
|
============== |
============== |
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
| CHIEF EXECUTIVE |
|
CHAIRMAN |
|
|
|
| PROFIT
AND LOSS ACCOUNT |
|
| for
the year ended June 30, 1999 |
|
|
|
1999 |
1998 |
|
|
Note |
Rupees |
Rupees |
|
|
| REVENUE |
|
| Income
from lease operations |
21 |
47,167,456 |
48,609,552 |
|
| Gain on sale of securities |
|
|
567,106 |
1,094,018 |
|
| Other income |
|
22 |
3,438,657 |
2,070,200 |
|
|
|
|
----------------------- |
----------------------- |
|
|
|
|
51,173,219 |
51,773,770 |
|
|
|
|
|
|
| EXPENDITURE |
|
|
|
|
| Financial and bank charges |
|
23 |
23,328,566 |
18,486,053 |
|
| Administrative
and operating expenses |
24 |
11,775,904 |
10,459,951 |
|
| Provision
for diminution in investment |
|
-- |
497,965 |
|
|
|
|
----------------------- |
----------------------- |
|
|
|
|
35,104,470 |
29,443,969 |
|
|
|
|
----------------------- |
----------------------- |
|
| PROFIT
BEFORE TAXATION |
|
16,968,749 |
22,329,801 |
|
| TAXATION |
|
|
|
|
| Current year |
|
25 |
578,667 |
8,490,611 |
|
| Prior year |
|
|
901,340 |
686,939 |
|
|
|
|
----------------------- |
----------------------- |
|
|
|
|
1,480,007 |
1,536,000 |
|
|
|
|
----------------------- |
----------------------- |
|
| PROFIT
AFTER TAXATION |
|
14,588,742 |
20,793,801 |
|
|
|
|
|
|
| UNAPPROPRIATED
PROFIT BROUGHT FORWARD |
905,147 |
366,629 |
|
|
|
|
----------------------- |
----------------------- |
|
| PROFIT
AVAILABLE FOR APPROPRIATION |
|
15,493,889 |
21,160,430 |
|
|
|
| APPROPRIATIONS |
|
| Transferred
from general reserve |
|
14,000,000 |
-- |
|
| Transferred
to statutory reserve |
|
(2,917,748) |
(4,158,760) |
|
| Transferred
to contingencies reserve |
|
(894,358) |
(96,523) |
|
| Transferred
to capital reserve-deferred tax |
|
(14,000,000) |
- |
|
| Proposed
dividend @ 12.5% (1998: @ 20%) |
|
(10,000,000) |
(16,000,000) |
|
|
|
----------------------- |
----------------------- |
|
|
|
(13,812,106) |
(20,255,283) |
|
|
|
----------------------- |
----------------------- |
|
| UNAPPROPRIATED
PROFIT CARRIED FORWARD |
1,681,783 |
905,147 |
|
|
============== |
============== |
|
| Earning per share |
|
1.82 |
2.60 |
|
|
|
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
| CHIEF EXECUTIVE |
|
CHAIRMAN |
|
|
|
| STATEMENT
OF CHANGES IN EQUITY AND RESERVES |
|
| for
the year ended June 30, 1999 |
|
|
|
Issued, |
Statutory |
General |
Contingency |
Capital Reserve |
Un- |
Total |
Total |
|
|
subscribed & |
Reserves |
Reserves |
Reserves |
for deferred |
appropriated |
1999 |
1998 |
|
|
paid up capital |
|
tax |
profit |
|
|
|
|
Rupees |
Rupees |
Rupees |
Rupees |
Rupees |
Rupees |
Rupees |
Rupees |
|
|
|
|
| Balance as at July 01 |
80,000,000 |
18,029,277 |
22,500,000 |
4,480,260 |
-- |
905,147 |
125,914,684 |
121,120,883 |
|
|
|
| Movement during the year |
|
| Net Profit for the year |
|
|
14,588,742 |
14,588,742 |
20,793,801 |
|
|
| Add:
Transferred from P & L a/c to |
|
| Statutory reserves |
|
2,917,748 |
|
|
|
2,917,748 |
4,158,760 |
|
| General reserve |
|
|
| Contingency reserve |
|
|
|
894,358 |
|
|
894,358 |
96,523 |
|
|
---------------------- |
---------------------- |
|
|
18,400,848 |
25,049,084 |
|
| Transferred
from general reserve |
|
| to P & L a/c |
|
(14,000,000) |
|
14,000,000 |
|
|
| Statutory reserves |
|
|
|
(2,917,748) |
(2,917,748) |
(4,158,760) |
|
| General reserve |
|
|
| Contingency reserve |
|
|
|
(894,358) |
(894,358) |
(96.523) |
|
| Capital
Reserve for deferred tax |
|
|
14,000,000 |
(14,000,000) |
-- |
-- |
|
| Proposed Dividends |
|
|
|
(10,000,000) |
(10,000,000) |
(16,000,000) |
|
|
---------------------- |
---------------------- |
|
|
|
|
|
(13,812,106) |
(20,255,283) |
|
|
---------------------- |
---------------------- |
|
| Balance as at June 30 |
80,000,000 |
20,947,025 |
8,500,000 |
5,374,618 |
14,000,000 |
1,681,783 |
130,503,426 |
125,914,684 |
|
|
============= |
============= |
|
| CHIEF EXECUTIVE |
CHAIRMAN |
|
|
|
|
|
| STATEMENT
OF CHANGES IN FINANCIAL POSITION |
|
| for
the year ended June 30, 1999 |
|
|
|
|
|
|
|
1999 |
1998 |
|
|
|
|
Note |
Rupees |
Rupees |
|
|
|
|
|
| CASH
FLOW FROM OPERATING ACTIVITIES |
|
|
|
|
|
|
|
|
| Profit before taxation |
|
16,068,749 |
22,329,801 |
|
|
| Add:
Adjustment to reconcile profit to net cash |
|
| provided
by operating activities |
|
|
| Depreciation |
|
|
1,380,436 |
1,407,225 |
|
| Provision
for diminution of investment |
|
-- |
497,965 |
|
| Provision for gratuity |
|
|
175,793 |
150,191 |
|
|
--------------------- |
--------------------- |
|
| Operating
profit before working capita1 changes |
|
17,624,978 |
24,385,182 |
|
|
| Decrease/(Increase)
in current assets |
|
(28,907,245) |
10,910,656 |
|
| (Decrease)/Increase
in current liabilities |
|
37,839,642 |
(7,312,700) |
|
|
--------------------- |
--------------------- |
|
| Net
cash from operating activities before income tax |
|
26,557,375 |
27,983,138 |
|
| Income tax paid |
|
(1,588,262) |
(2,070,052) |
|
|
--------------------- |
--------------------- |
|
| Net
cash inflow/( outflow) from operating activities |
|
24,969,113 |
25,913,086 |
|
|
| CASH
FLOW FROM INVESTING ACTIVITIES |
|
| Investment in leases - net |
|
|
(30,848,353) |
(32,606,685) |
|
| Long term investment |
|
|
(1,000,000) |
-- |
|
| Capital Expenditure |
|
|
(1,109,289) |
(2,587,957) |
|
|
|
--------------------- |
--------------------- |
|
| Set
cash from investing activities |
|
(35,194,642) |
(35,194,642) |
|
|
|
|
| CASH
FLOW FROM FINANCING ACTIVITIES |
|
| Long term loans |
|
|
7,473,891 |
29,129,114 |
|
| Proceeds
from lease obligations |
|
(600,655) |
2,355,356 |
|
| Certificates of Investment |
|
|
(2,226,897) |
(6,944,358) |
|
| Deposits from lessees |
|
|
9,486,575 |
(3,930,269) |
|
| Long
term deposits and deferred cost |
|
(245,000) |
(328,245) |
|
| Payment of dividend |
|
|
(15,751,425) |
(7,826) |
|
|
|
--------------------- |
--------------------- |
|
| Net
cash (used)/generated from financing activities |
|
(1,863,511) |
20,273,772 |
|
|
| Net
increase, (decrease) in cash |
|
(9,852,040) |
10,992,216 |
|
| Cash
and bank balances at beginning of the year |
|
12,649,188 |
1,656,972 |
|
|
|
--------------------- |
--------------------- |
|
| Cash
and bank balances at the end of the year |
|
2,797,148 |
12,649,188 |
|
|
============= |
============= |
|
|
| NOTES
TO THE ACCOUNTS |
|
| for
the year ended June 30, 1999 |
|
|
| 1.
THE COMPANY AND ITS ACTIVITIES |
|
| English
Leasing Limited is a Public Limited Company incorporated in Pakistan and its
shares are quoted on the |
|
| Stock
Exchanges o£ Pakistan. The Company is mainly engaged in the business of
Leasing. |
|
|
| 2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
|
|
| 2.1 Accounting convention |
|
|
| These
accounts have been prepared under the historical cost convention. |
|
|
| 2.2
Employees' provident fund & gratuity |
|
| The
Company is in the process of establishing a provident fund scheme covering
all its permanent employees and |
|
| working
directors. Equal monthly contributions are made both by the company and
employees @ 10% of the |
|
| basic salaries to the fund. |
|
|
|
| The
company operates an unfunded gratuity covering all its employees. |
|
| Provision
is made annually to cover the liability under the scheme. |
|
|
| 2.3
Tangible operating fixed assets and depreciation |
|
|
| Owned |
|
|
| Tangible
operating fixed assets are stated at cost less accumulated depreciation. Cost
of these assets consists of |
|
| historical
cost and directly attributable cost of bringing the assets to working
conditions. |
|
|
| Depreciation
is charged to income applying the reducing balance method to write off the
cost over their expected |
|
| remaining useful life. |
|
|
| Full
year's depreciation is charged on additions, while no depreciation is charged
on deletion during the year. |
|
| Repairs
and maintenance costs are expensed out as and when incurred, however, major
betterment's are capitalized. |
|
| Gains
and losses on disposal of assets, if any, are included in income currently. |
|
|
| Leased |
|
|
| These
are stated at lower of present value of minimum lease payments under the
lease agreements and fair value |
|
| of
assets acquired on lease. The related obligations under the lease agreements
are accounted for as liabilities. |
|
| Depreciation
is charged on the basis and rates similar to those applied for owned assets. |
|
|
| 2.4 Investments |
|
| Long
term investments are stated at cost, provision for diminution in value of
investment is made, if considered |
|
| permanent. |
|
|
| Short
term investment are stated at lower of cost and market value. |
|
|
| 2.5 Taxation |
|
| The
charge for the current taxation is based on taxable income at the current tax
rates after taking into account |
|
| the
tax credits and rebates available, if any. Deferred tax is accounted for by
using the liability method on all |
|
| major
timing differences excluding tax effect on those timing differences which are
not likely to reverse in the |
|
| foreseeable future. |
|
|
| As
a matter of prudence, deferred tax debits are not accounted for. |
|
|
| 2.6 Revenue Recognition |
|
| The
company follows the "Finance Method" to recognize the Income on
lease i.e. the excess of aggregate lease |
|
| rentals
and the residual value over the cost of leased assets is deferred and then
amortized to income over the lease |
|
| term
by applying the annuity method to produce a constant rate of return on the
net investment in the lease. |
|
|
| Income
on bank accounts, loans and advances is recognized on a time proportion basis
taking into account the |
|
| principal/net
investment outstanding and applicable rate of mark-up/profit thereon. |
|
|
| Income
from fees, commission, commitment charges, term deposits and investment etc.;
is recognized as and |
|
| when received. |
|
|
| 2.7
Provision for Doubtful Debts |
|
| Provision
for doubtful debts is made/adjusted at the year end after review of
outstanding lease and advances |
|
| portfolio
on the basis of State Bank of Pakistan prudential regulations as applies to
leasing companies. |
|
|
| 2.8
Foreign currency transactions |
|
| Transactions
in foreign currencies are accounted for in Rupees at the rates of exchange
ruling on the date of the |
|
| transaction.
Monetary assets and liabilities in foreign currencies are translated into
Rupees at the rate of exchange |
|
| ruling
at the balance sheet date except where exchange risk cover has been obtained. |
|
|
| Foreign
currency loans registered under the exchange risk coverage scheme of The
State Bank of Pakistan are |
|
| translated
into Rupees at the rates prevailing on the dates of disbursements. Exchange
risk fee, exchange gains |
|
| and
losses are charged to the current year's income. |
|
|
|
|
|
1999 |
1998 |
|
|
Note |
Rupees |
Rupees |
|
|
|
|
| 3. CAPITAL RESERVES |
|
| Statutory reserve |
|
| Opening balance |
|
|
18,029,277 |
13,870,517 |
|
| Add:
Appropriated from profit |
|
2,917,748 |
4,158,760 |
|
|
---------------------- |
---------------------- |
|
|
20,947,025 |
18,029,277 |
|
| Capital
reserve for deferred tax |
25 |
14,000,000 |
-- |
|
|
|
|
---------------------- |
---------------------- |
|
|
|
34,947,025 |
18,029,277 |
|
|
|
============= |
============= |
|
|
| 3.1
Statutory reserve has been created in pursuance of |
|
| NBFI's
regulations, whereby every NBFI is required |
|
| to
create reserve fund with an amount not less than |
|
| 20%
of its after tax profit till such time the reserve |
|
| equals
the amount of paid up capital, thereafter, 5% |
|
| of
Profit after Tax will be credited to this reserve. |
|
| This
reserve is not considered as free reserve for |
|
| distribution of dividend. |
|
|
|
| 4. REVENUE RESERVES |
|
| General Reserve |
|
4.1 |
8,500,000 |
22,500,000 |
|
| Contingency Reserve |
|
4.2 |
5,374,618 |
4,480,260 |
|
|
|
|
---------------------- |
---------------------- |
|
|
|
|
13,874,618 |
26,980,260 |
|
|
|
============= |
============= |
|
| 4.1 General Reserve |
|
|
| Balance
at the beginning of the year |
|
22,500,000 |
22,500,000 |
|
| Transferred
to profit and loss account |
|
(14,000,000) |
-- |
|
|
---------------------- |
---------------------- |
|
|
8,500,000 |
22,500,000 |
|
|
|
============= |
============= |
|
| 4.2 Contingencies Reserve |
|
|
|
| Balance
at the beginning of the year |
|
4,480,260 |
4,383,737 |
|
| Transferred
from profit during the year |
|
894,358 |
96,523 |
|
|
---------------------- |
---------------------- |
|
|
5,374,618 |
4,480,260 |
|
|
============= |
============= |
|
|
|
|
| 4.3
Contingency reserve has been created to meet |
|
| any
potential lease losses on lease portfolio that |
|
| can
be reasonably anticipated. |
|
|
| 5. LONG TERM LOANS |
|
|
|
|
| In foreign currency |
|
| Asian Development Bank |
|
5.2 |
40,169,730 |
-- |
|
|
|
|
| In
local currency |
|
|
|
| Muslim
Commercial Bank Ltd. |
5.3 |
5,722,320 |
9,288,554 |
|
| Saudi
Pak Industrial & Agricultural |
|
|
|
| Investment
Company (Pvt) Ltd. |
|
-- |
1,536,259 |
|
| First Allied Bank Modaraba |
|
5.4 |
15,000,000 |
40,000,000 |
|
| Allied
Bank of Pakistan Limited |
5.5 |
12,727,272 |
20,000,000 |
|
| Prudential
Commercial Bank Limited |
|
-- |
2,500.00 |
|
| Pak
Libya Holding Co. (Pvt) Ltd. |
5.6 |
11,212,672 |
4,033,290 |
|
|
|
|
---------------------- |
---------------------- |
|
|
|
|
44,662,264 |
77,358,103 |
|
|
---------------------- |
---------------------- |
|
|
|
84,831,994 |
77,358,103 |
|
| Less: Current maturity |
|
|
(25,975,981) |
(35,431,098) |
|
|
|
---------------------- |
---------------------- |
|
|
|
58,856,013 |
41,927,005 |
|
|
|
============= |
============= |
|
|
| 5.1
All the local currency loans have been obtained for financing lease
operations of the company and arc secured |
|
| by
pari passu floating charge on the present and future leased assets,
hypothecation of movable assets, demand |
|
| promissory
notes and personal guarantees of the directors. Muslim Commercial Bank
Limited loan is further |
|
| secured
by assignment of lease agreements/rentals. |
|
|
| 5.2
This represents loan facility of US $873,255 obtained from Asian Development
Bank (ADB) for financing lease |
|
| operations.
This loan is secured by way of floating and hypothecation charges on all
companies assets (present |
|
| and
future) including assets leased by the company. The loan is repayable in 15
years with three grace period on |
|
| annual
installments basis which will commence from Oct 1, 2000. The liability of
this loan has been fixed in |
|
| Pakistani
rupees under the exchange risk cover scheme of State Bank of Pakistan. The
rate of interest and exchange |
|
| risk
cover fee is 6.38% and 7% per annum respectively. Mark up is repayable in
semi annual installments |
|
| commencing
from March 15, 1999. |
|
|
| 5.3
Muslim Commercial Bank Ltd. loan carries mark-up rate of 17.52% p.a. on
reducing balances and is repayable |
|
| in
08 equal half yearly installments commencing from September 01,1997 while
mark-up is payable quarterly. |
|
|
| 5.4
Loan from First Allied Bank Modaraba carries mark-up rate of 22% and 23% p.a.
on reducing balances and is |
|
| repayable
in 12 equal half yearly installments commencing from March 15. 1995 and
November 18. 1996, whereas |
|
| mark-up
is payable on quarterly basis. |
|
|
| 5.5 Loan from Allied Bank of Pakistan Ltd.,
carries mark-up rate 17% p.a. on reducing balances, the principal and |
|
| mark-up
is repayable in 11 installments commencing from September 30, 1998 on
quarterly basis. |
|
|
| 5.6
These represent loan from Pak Libya Holding Co. (Pvt) Limited. Carrying
mark-up rate of 21% and 22% per |
|
| annum
on reducing balance repayable in 12 equal quarterly instalments commenced
from October 25, 1997 and |
|
| 36
equal monthly installment from January 08, 1999 respectively. |
|
|
|
|
1999 |
1998 |
|
|
|
Rupees |
Rupees |
|
| 6.
OBLIGATIONS UNDER FINANCE LEASE |
|
|
|
|
| Balance
of obligation under finance lease |
|
2,890,903 |
3,491,558 |
|
| Less:
Current portion shown under current liabilities |
|
(719,660) |
(600,655) |
|
|
----------------------- |
----------------------- |
|
|
2,171,243 |
2,890,903 |
|
|
============= |
============= |
|
|
| The
obligations under finance lease arc reported at aggregate of minimum |
|
| lease
payments, implicitly discounted by using the rate of 22%. |
|
|
|
|
| The
future payments due are as follows: |
|
|
| Year ended June 30, |
|
|
|
| 1998 |
|
-- |
600655.00 |
|
| 1999 |
|
719,660 |
719,660 |
|
| 2000 |
|
612,872 |
612,872 |
|
| 2001 |
|
727,911 |
727,911 |
|
| 2002 |
|
830,460 |
830,460 |
|
|
------------------------ |
------------------------ |
|
|
2,890,903 |
3,491,558 |
|
|
============= |
============= |
|
|
|
|
| 7. LONG TERM DEPOSITS |
|
|
| Security, deposit on leases |
|
41,037,666 |
31,551,091 |
|
| Less: Current portion |
|
(6,950,515) |
(6,637,509) |
|
|
------------------------ |
------------------------ |
|
|
34,087,151 |
24,913,582 |
|
|
|
|
============= |
============= |
|
|
| These
represent interest free security deposits (Lease key money) received |
. |
|
| on
lease contracts and are repayable/adjustable |
|
| at
the expiry of respective lease periods. |
|
|
| 8.
CERTIFICATES OF INVESTMENT |
|
|
| Rapid Growth |
|
|
3,442,489 |
3,998,742 |
|
| Preference Investment |
|
|
4,102,958 |
5,773,602 |
|
| Shashmahi Amdan |
|
|
10,000 |
10,000 |
|
| Mahana Amdan |
|
|
2,500,000 |
2,500,000 |
|
|
|
|
------------------------ |
------------------------ |
|
|
|
|
10,055,447 |
12,282,344 |
|
|
|
============= |
============= |
|
|
| These
represent Registered Certificates of Investment (COl's) issued according to
the permission granted by the |
|
| Government
of Pakistan for raising funds directly from the local resources. These COI's
have been issued for maturity |
|
| period
ranging from three months to five years. The return on COI's is payable on
uniform basis ranging from 15% to |
|
| 19.5% per annum. |
|
|
|
1999 |
1998 |
|
|
Rupees |
Rupees |
|
|
|
|
| 9.
SHORT TERM FINANCES |
|
|
| Secured |
|
9.1 |
7,499,707 |
5,000,000 |
|
| Un-secured |
|
9.2 |
35,000,000 |
-- |
|
|
------------------------ |
------------------------ |
|
|
42,499,707 |
5,000,000 |
|
|
|
|
============= |
============= |
|
|
|
|
|
|
| 9.1
It is secured against pari passu charge with other creditors on all assets of
the company for Rs.42 Million |
|
| and
personal guarantees of three working directors. The rate of mark up is 17%
per annum and is repayable |
|
| periodically.
The facility is obtained against a sanctioned limit of Rs. 7.5 Million. |
|
|
| 9.2
These short term placements have been obtained from banking companies and
financial institutions. Rate of mark |
|
| up
ranges from 18% to 20.75%. |
|
|
| 10.
ACCRUED AND OTHER LIABILITIES |
|
|
| Accrued
mark-up on long term loans |
|
1,046,660 |
1,312,409 |
|
| Profit payable on COI's |
|
3,084,737 |
3,245,512 |
|
| Advance lease rentals |
|
36,760 |
61,567 |
|
| Accrued expenses |
|
1,250,784 |
683,515 |
|
| Provident fund |
|
74,485 |
635,219 |
|
| Other liabilities |
|
991,967 |
832,236 |
|
|
|
------------------------ |
------------------------ |
|
|
|
6,485,393 |
6,770,458 |
|
|
|
============= |
============= |
|
|
|
|
|
|
| 11. DIVIDEND PAYABLE |
|
|
| Unclaimed dividend |
|
504,088 |
255,513 |
|
| Proposed dividend |
|
10,000,000 |
16,000,000 |
|
|
------------------------ |
------------------------ |
|
|
|
10,504,088 |
16,255,513 |
|
|
============= |
============= |
|
| 12.
CONTINGENCIES AND COMMITMENTS |
|
| Contingencies |
|
-- |
-- |
|
| Commitments |
|
12.1 |
10,303,320 |
-- |
|
|
|
|
------------------------ |
------------------------ |
|
|
|
|
10,303,320 |
-- |
|
|
|
|
============= |
============= |
|
|
| 12.1
Commitments for leases approved but not disbursed to clients. |
|
|
| 13. TANGIBLE OPERATING FIXED ASSETS |
|
|
|
Cost |
|
Depreciation |
|
Depreciation |
Book value |
| PARTICULARS |
As on |
Additions/ |
As on |
As on |
Addition/ |
As on |
Depreciable |
Rate |
for the |
as at |
|
July 01, |
(Deletions) |
June 30, |
July 01, |
(Deletion) |
June 30, |
Value |
% |
year |
June 30, |
|
1998 |
|
1999 |
1998 |
Adjustment |
1999 |
|
|
1999 |
|
|
|
|
|
|
|
|
|
| Owned |
|
| Building |
2,794,681 |
-- |
2,794,681 |
272,481 |
-- |
272,481 |
2,522,200 |
5 |
126,110 |
2,396,090 |
| Furniture & Fixture |
1,050,831 |
-- |
1,050,831 |
490,614 |
-- |
490,614 |
560,217 |
10 |
56,022 |
504,195 |
| Vehicles |
3,256,061 |
1,311,715 |
3,740,040 |
2,014,639 |
-- |
1,470,404 |
2,269,636 |
20 |
453,927 |
1,815,709 |
|
|
(827,736) |
|
(544,235) |
|
| Office Equipment |
1,188,630 |
47,925 |
1,236,555 |
432,907 |
-- |
432,907 |
803,648 |
10 |
80,365 |
723,283 |
| Air Conditioners |
685,160 |
-- |
685,160 |
298,942 |
-- |
298,942 |
386,218 |
10 |
38,622 |
347,596 |
| Electric Installations |
193,574 |
23,450 |
217,024 |
89,886 |
-- |
89,886 |
127,138 |
10 |
12,714 |
114,424 |
| Lease hold |
|
| Improvements |
603,184 |
-- |
603,184 |
460,874 |
-- |
460,874 |
142,310 |
20 |
28,462 |
113,848 |
| Electrical Equipment |
112,250 |
24,200 |
121,950 |
28,899 |
-- |
28,899 |
93,051 |
10 |
9,305 |
83,746 |
|
(14,500) |
|
|
------------------------- |
------------------------- |
------------------------- |
------------------------- |
------------------------- |
------------------------- |
------------------------- |
------------------------- |
------------------------- |
------------------------- |
|
9,884,371 |
565,054 |
10,449,425 |
4,089,242 |
(544.235) |
3,545,007 |
6,904,418 |
|
805,527 |
6,098,891 |
| Leased |
|
| Vehicles |
3,839,725 |
-- |
3,839,725 |
965,181 |
-- |
965,181 |
2,874,544 |
20 |
574,909 |
2,299,635 |
|
------------------------- |
------------------------- |
------------------------- |
------------------------- |
------------------------- |
------------------------- |
------------------------- |
------------------------- |
------------------------- |
------------------------- |
| Rupees - 1999 |
3,724,096 |
565,054 |
14,289,150 |
5,054,423 |
(544,235) |
4,510,188 |
9,778,962 |
|
1,380,436 |
8,398,526 |
|
------------------------- |
------------------------- |
------------------------- |
------------------------- |
------------------------- |
------------------------- |
------------------------- |
------------------------- |
------------------------- |
------------------------- |
| Rupees - 1998 |
11,852,696 |
1,871,400 |
13,724,096 |
4,363,755 |
(7 l 6,557) |
3,647,198 |
10,076,898 |
|
1,407,225 |
8,669,673 |
|
------------------------- |
------------------------- |
------------------------- |
------------------------- |
------------------------- |
------------------------- |
------------------------- |
------------------------- |
------------------------- |
------------------------- |
|
| 13.1 Disposal of Fixed Assets |
|
|
| Description |
Cost |
Accumulated |
Book Value |
Sale |
Profit/(Loss) |
Mode of |
|
|
|
Rs. |
Depreciation |
Rs. |
Proceeds |
on Disposal |
Disposal |
Sold To |
|
|
| Suzuki Swift |
163,036 |
124,570 |
38,466 |
185,000 |
146,534 |
Negotiation |
Nadeem Waqar-ud-Din |
|
|
Karachi |
|
| Honda Civic |
664,700 |
419,665 |
245,035 |
245,035 |
-- |
Company policy |
Sh. Javaid Mahmood |
|
|
under service rules |
Director |
|
|
| Mobil Phone |
14,500 |
-- |
14,500 |
14,500 |
-- |
Insurance claim |
EFU Gen. Insurance |
|
|
Karachi |
|
|
------------------------- |
------------------------- |
------------------------- |
------------------------- |
------------------------- |
|
| Total - 1999 |
842,236 |
544,235 |
298,001 |
444,535 |
146,534 |
|
|
|
------------------------- |
------------------------- |
------------------------- |
------------------------- |
------------------------- |
|
|
| Total- 1998 |
1,038,150 |
716,557 |
321,593 |
321,593 |
-- |
|
|
------------------------- |
------------------------- |
------------------------- |
------------------------- |
------------------------- |
|
|
|
|
|
|
|
1999 |
1998 |
|
|
|
Rupees |
Rupees |
|
| 14. NET INVESTMENT IN LEASES |
|
| Minimum lease payments
receivables |
|
298,137,440 |
282,256,051 |
|
| Add: Residual value of
leased assets |
|
45,529,824 |
36,584,412 |
|
|
|
|
------------------------- |
------------------------- |
|
| Lease: contract receivables |
|
343,667,264 |
318,840,463 |
|
| Less: Unearned finance
income |
|
70,964,306 |
76,985,858 |
|
|
|
------------------------- |
------------------------- |
|
| Net investment is leases |
|
|
272,703,958 |
241,854,605 |
|
| Less: -Current portion |
|
|
135,164,555 |
85,536,073 |
|
| - Provision for doubtful debts |
|
3,972,045 |
3,972,045 |
|
|
|
|
------------------------- |
------------------------- |
|
|
|
|
139,136,600 |
89,508,118 |
|
|
|
|
------------------------- |
------------------------- |
|
|
|
133,566,358 |
152,346,487 |
|
|
|
============== |
============== |
|
| 15.
LONG TERM INVESTMENTS |
|
| Dewan Salman Fibers Ltd. |
|
8,845,000 |
8,845,000 |
|
| (90,703
Ordinary shares of Rs. 10/-each) |
|
|
|
|
|
| Pakistan Synthetics Ltd. |
|
| (125,000
Ordinary shares of Rs.10/- each) |
|
7,865,875 |
7,865,875 |
|
|
------------------------- |
------------------------- |
|
|
|
16,710,875 |
16,710,875 |
|
| Federal Investment Bonds |
|
2,600,000 |
1,600,000 |
|
|
------------------------- |
------------------------- |
|
|
|
|
19,310,875 |
18,310,875 |
|
|
============== |
============== |
|
| Aggregate Market value |
|
5,603,970 |
3,301,616 |
|
|
============== |
============== |
|
|
| 15.1
The company's holding does not exceed 10 percent of equity of any investee
company. |
|
|
| 15.2
No provision has been made for diminution in value as it is considered
temporary in the context of the company's intentions |
|
| to
hold these investments on long term basis. |
|
|
|
|
|
1999 |
1998 |
|
|
|
Rupees |
Rupees |
|
|
|
| 16.
LONG TERM DEPOSITS |
|
|
|
|
| Security deposits for |
|
|
|
| Leased assets |
|
|
383,972 |
383,972 |
|
| Rented premises |
|
172,500 |
172,500 |
|
| Others |
|
265,683 |
20,683 |
|
|
------------------------- |
------------------------- |
|
| Security deposits |
|
822,155 |
577,155 |
|
|
|
|
============== |
============== |
|
|
| 17.
SHORT TERM INVESTMENTS |
|
|
|
|
| Quoted: |
|
| Fidelity
Investment Bank Ltd. |
|
| (57,500
Ordinary shares of Rs. 10/-each) |
|
2,871,500 |
2,871,500 |
|
| The Bank of Punjab |
|
|
|
| (36,179)
Ordinary shares of Rs. 10/- each) |
|
1,688,250 |
1,688,250 |
|
|
|
------------------------- |
------------------------- |
|
|
|
4,559,750 |
4,559,750 |
|
|
| Less:
Diminution in value of investments |
|
| - Opening balance |
|
4,173,465 |
3,675,500 |
|
| - Provided during the year |
|
-- |
497,965 |
|
|
|
------------------------- |
------------------------- |
|
|
4,173,465 |
4,173,465 |
|
|
|
------------------------- |
------------------------- |
|
|
386,285 |
386,285 |
|
|
|
| Aggregate
Market Value of investments |
|
600,122 |
386,285 |
|
|
============== |
============== |
|
| The
company's holding does not exceeds 10 percent of equity of any investee
company. |
|
|
| 18.
SHORT TERM FINANCE |
|
|
|
|
| Secured- considered good |
|
1,000,000 |
-- |
|
| Un secured-considered good |
|
30,000,000 |
-- |
|
|
------------------------- |
------------------------- |
|
|
31,000,000 |
-- |
|
|
============== |
============== |
|
|
| 18.1
These represent short term finance facilities provided on markup bases in the
normal course of business. |
|
|
| 19.
ADVANCES, PREPAYMENTS AND OTHER RECEIVABLES |
|
|
| Advances: |
|
|
| Employees |
|
|
113,400 |
298,710 |
|
| Income tax |
|
|
284,960 |
-- |
|
| Telephone |
|
|
4,734 |
10,329 |
|
| Exchange risk fee |
|
|
1,166,259 |
-- |
|
| Prepayments |
|
640,999 |
491,249 |
|
| Profit on bank deposits |
|
63,171 |
64,360 |
|
| Mark
up on short the advances |
|
453,549 |
-- |
|
| Other
receivables |
|
|
171,434 |
19,591 |
|
|
|
|
------------------------- |
------------------------- |
|
|
2,898,506 |
884,239 |
|
. |
|
|
============== |
============== |
|
|
| 20.
CASH AND BANK BALANCES |
|
| Cash in hand |
|
|
294,011 |
574,289 |
|
| Stamps in hand |
|
|
17,850 |
4,876 |
|
| Cash with banks |
|
|
| - Current account |
|
1,785,387 |
11,370,023 |
|
| - Deposit
account |
|
|
699,900 |
700,000 |
|
|
------------------------- |
------------------------- |
|
|
|
|
2,797,148 |
12,649,188 |
|
|
|
============== |
============== |
|
|
| 20.1
Thus includes an interest free deposit with State Bank of Pakistan |
|
| as
required under presidential regulations for Non-Banking |
|
| Financial
Institutions (NBFIs). |
|
|
|
| 21.
INCOME FROM LEASE OPERATIONS |
|
|
| Lease income |
|
44,934,849 |
47,117,749 |
|
| Front end Fees |
|
|
1,479,816 |
1,045,042 |
|
| Documentation & other
fees |
|
752,791 |
446,761 |
|
|
|
|
------------------------- |
------------------------- |
|
|
47,167,456 |
48,609,552 |
|
|
|
|
============== |
============== |
|
|
| 22. OTHER INCOME |
|
|
|
| Income from bank deposits |
|
773,753 |
399,056 |
|
| Profit/Mark-up
on short term advances |
|
2,518,370 |
1,583,677 |
|
| Dividend income |
|
-- |
51,461 |
|
| Miscellaneous income |
|
146,534 |
36,006 |
|
|
------------------------- |
------------------------- |
|
|
3,438,657 |
2,070,200 |
|
|
============== |
============== |
|
|
| 23.
FINANCIAL AND BANK CHARGES |
|
| Mark-up
on long/short term finance |
|
19,772,676 |
13,921,742 |
|
| Bank charges. |
|
51,463 |
41,928 |
|
| Loan processing fee |
|
46,027 |
327,070 |
|
| Excise
Duty on loans |
|
|
-- |
45,833 |
|
| Financial
charges on lease liability |
|
571,000 |
312,187 |
|
| Mark-up on COIs |
|
2,853,595 |
3,758,139 |
|
| Mark-up
on employees provident fund |
|
33,805 |
79,154 |
|
|
|
------------------------- |
------------------------- |
|
|
23,328,566 |
18,486,053 |
|
|
|
============== |
============== |
|
|
|
|
1999 |
1998 |
|
|
|
|
Note |
Rupees |
Rupees |
|
|
|
|
|
|
| 24.
ADMINISTRATIVE & OPERATING EXPENSES |
|
|
|
|
| Directors' remuneration |
|
|
2,583,232 |
2,433,034 |
|
| Staff
salaries and other benefits |
24.1 |
2,829,358 |
2,508,133 |
|
| Gratuity |
|
|
175,793 |
150,191 |
|
| Legal and professional |
|
|
769,634 |
502,563 |
|
| Registrar's services |
|
|
189,812 |
180,000 |
|
| Rent |
|
|
698,000 |
585,880 |
|
| Traveling and conveyance |
|
|
267,264 |
238,281 |
|
| Postage, telephone and telex |
|
|
455,711 |
383,545 |
|
| Electricity, Water & Gas |
|
|
176,461 |
202,159 |
|
| Stationery
and other supplies |
|
283,939 |
195,646 |
|
| Vehicles running |
|
669,684 |
602,764 |
|
| Auditors' remuneration |
|
24.2 |
105,000 |
90,000 |
|
| News papers & periodicals |
|
8,107 |
10,570 |
|
| Insurance |
|
548,540 |
502,886 |
|
| Entertainment |
|
|
58,101 |
74,118 |
|
| Repairs & maintenance |
|
|
299,991 |
200,424 |
|
| Fees & subscriptions |
|
|
215,408 |
103,295 |
|
| Depreciation |
|
|
1,380,436 |
1,407,225 |
|
| Advertisement |
|
61,433 |
83,237 |
|
| Donation |
|
|
-- |
6,000 |
|
200.42 |
|
|
|
|
------------------------- |
------------------------- |
|
103,295 |
|
|
11,775,904 |
10,459,951 |
|
|
============== |
============== |
|
|
| 24.1 Number of employees at the end of year
--------------- 21 (1998:21) |
|
|
| 24.2 Auditors' Remuneration |
|
|
| Audit fee |
|
|
50,000 |
40,000 |
|
40.00 |
|
| Tax consultancy |
|
|
55,000 |
50,000 |
|
50,000 |
|
|
------------------------- |
------------------------- |
|
|
105,000 |
90,000 |
|
|
============== |
============== |
|
|
|
| 25. TAXATION |
|
|
| 25.1 Current year |
|
578,667 |
671,001 |
|
|
|
|
============== |
============== |
|
|
| This
represents the minimum tax due under section 80 (d) of the Income Tax
Ordinance, 1979. |
|
|
| 25.2 Deferred |
|
|
|
| Deferred
taxation arising due to timing differences between book and income tax
revenue or charges is estimated at Rs. |
|
| 34.2
million (1998: Rs. 25.05 million), as at June 30, 1999, to meet the
requirement of International Accounting Standard |
|
| IAS-12
and comply with SECP's requirement vide circular No. 16 of 1999 dated 9th
September, 1999. The company has |
|
| transferred
Rs. 14.16 million (Rs. 9.15 million for the current year and Rs. 5.01 million
being one fifth of the total deferred |
|
| tax
liability for previous years) and un-provided deferred tax amounting to Rs.
20.05 million shall be apportioned to |
|
| Capital
Reserve in equal annual instalments by June 30, 2003. |
|
|
| 26.
REMUNERATION OF CHIEF EXECUTIVE, DIRECTORS AND EXECUTIVES |
|
|
|
|
CHIEF EXECUTIVE |
|
DIRECTORS |
|
EXECUTIVES |
|
|
1999 |
1998 |
1999 |
1998 |
1999 |
1998 |
|
|
| Managerial remuneration |
445,050 |
387,000 |
848,700 |
696,600 |
490,372 |
332,178 |
|
| Bonus |
79,350 |
60,000 |
158,700 |
108,000 |
70,898 |
37,500 |
|
| House rent & utilities |
280,286 |
342,220 |
505,767 |
632,452 |
212,718 |
196,638 |
|
| Reimbursement of medical expenses |
2,852 |
6,562 |
133,143 |
100,948 |
15,864 |
12,821 |
|
| Provident fund |
44,508 |
38,700 |
84,876 |
60,552 |
39,042 |
33,218 |
|
|
------------------------- |
------------------------- |
------------------------- |
------------------------- |
------------------------- |
------------------------- |
|
|
852,046 |
834,482 |
1,731,186 |
1,598,552 |
828,894 |
612,355 |
|
|
------------------------- |
------------------------- |
------------------------- |
------------------------- |
------------------------- |
------------------------- |
|
| No. of person |
1 |
1 |
2 |
2 |
3 |
3 |
|
|
| In
addition, the Chief Executive, two Directors and three Executives are
provided with free use of company maintained |
|
| cars,
while Chief Executive and Directors are also provided with reimbursement of
residential telephone bills. |
|
| Directors
fee totaling Rs 2,000 (1998: Rs. 1,000/- to one director for attending Two
Board meetings) was paid to two |
|
| Directors
for attending two Board meetings. |
|
|
| 27.
FINANCIAL INSTRUMENTS AND RELATED DISCLOSURES |
|
|
| 27.1
Credit Risk & Concentration of Credit Risk |
|
|
| The
Company attempts to control credit risk by monitoring credit exposures,
limiting transactions with specific counterparties, |
|
| and
continuously assessing the credit worthiness of counterparties. English
Leasing Limited (ELL) follows two sets of |
|
| guidelines.
Internally, it has its own operating policy duly approved by the Board of
Directors whereas externally it |
|
| adheres
to the regulations issued by the State Bank of Pakistan and Securities and
Exchange Commission of Pakistan. |
|
| The
operating policy defines the extent of fund and non-fund based exposures with
reference to a particular sector or |
|
| group
of leases. The Management also classifies a particular lease on the basis of
Rules of business for Non-Banking |
|
| Financial Institutions. |
|
|
|
| 27.2
Fair Value of Financial Instruments |
|
|
| The
estimated fair value of financial instruments are not significantly different
from their book values as shown in these |
|
| financial
statements except for long term investment (Note 15). |
|
|
| CHIEF EXECUTIVE |
|
CHAIRMAN |
|
|
| 27.3 Exposure to Mark up Rate Risk |
|
| The
Company's interest rate sensitivity position for interest bearing financial
assets and liabilities for the year are |
|
| summarised as follows:- |
|
|
|
|
|
|
|
|
Financial |
Less than |
Over on |
Effective Interest |
|
|
Instruments |
one year |
year |
Mark-up rate |
|
|
|
% |
|
|
| Financial Assets |
|
|
| Net investment in lease finance |
272,702,958 |
135,164,555 |
137,538,403 |
22.00 - 28.00 |
|
| Short term finances |
31,000,000 |
31,000,000 |
-- |
18.00 - 19.50 |
|
|
------------------------- |
------------------------- |
------------------------- |
|
|
|
303,702,958 |
166,164,555 |
137,538,403 |
|
|
============== |
============== |
============== |
|
| Financial Liabilities |
|
|
| Long term loans |
|
| Local Currency |
44,662,264 |
25,975,981 |
18,686,283 |
17.05 - 22.00 |
|
|
| Foreign Currency |
40,169,730 |
-- |
40,169,730 |
6.38-00.00 |
|
|
|
| Long term certificates of
investment |
10,055,447 |
-- |
10,055,447 |
15.00 - 19.50 |
|
|
| Obligations under finance lease |
2,890,903 |
719,660 |
2,171,243 |
20.00 - 22.00 |
|
|
| Short term finance |
42,499,707 |
42,499,707 |
-- |
18.00 - 20.00 |
|
|
| Short term certificates of
investment |
5,100,000 |
5,100,000 |
-- |
15.00 - 18.00 |
|
|
|
------------------------- |
------------------------- |
------------------------- |
|
|
|
|
145,378,051 |
74,295,348 |
71,082,703 |
|
|
|
============== |
============== |
============== |
|
|
|
|
| 28. GENERAL |
|
| Statement
of changes in equity and reserves is annexed hereto. |
|
| Figures
have been rearranged wherever necessary for comparison purposes. |
|
| Figures
have been rounded off to the nearest rupee. |
|
|
| CHIEF EXECUTIVE |
|
CHAIRMAN |
|
|
|
|
| PATTERN
OF SHAREHOLDING |
|
| as at June 30, 1999 |
|
|
|
|
| NUMBER OF |
|
SHAREHOLDING |
|
TOTAL |
|
| SHARE HOLDERS |
FROM |
|
TO |
SHARES HELD |
|
|
| 66 |
1 |
- |
100 |
6,600 |
|
| 657 |
101 |
- |
500 |
310,800 |
|
| 160 |
501 |
- |
1,000 |
157,500 |
|
| 150 |
1,001 |
- |
5,000 |
387,700 |
|
| 34 |
5,001 |
- |
10,000 |
301,800 |
|
| 6 |
10,001 |
- |
15,000 |
75,700 |
|
| 7 |
15,001 |
- |
20,000 |
136,000 |
|
| 10 |
25,001 |
- |
30,000 |
289,500 |
|
| 2 |
30,001 |
- |
35,000 |
64,600 |
|
| 3 |
35,001 |
- |
40,000 |
109,500 |
|
| 5 |
45,001 |
- |
50,000 |
249,600 |
|
| 2 |
50,001 |
- |
55,000 |
105,900 |
|
| 1 |
60,001 |
- |
65,000 |
63,700 |
|
| 2 |
70,001 |
- |
75,000 |
143,400 |
|
| 2 |
95,001 |
- |
100,000 |
200,000 |
|
| 2 |
145,001 |
- |
150,000 |
300,000 |
|
| 1 |
245,001 |
- |
250,000 |
250,000 |
|
| 1 |
345,001 |
- |
350,000 |
350,000 |
|
| 1 |
445,001 |
- |
450,000 |
450,000 |
|
| 1 |
480,001 |
|
485,000 |
480,500 |
|
| 1 |
500,001 |
- |
505,000 |
500,100 |
|
| 1 |
595,001 |
- |
600,000 |
600,000 |
|
| 1 |
1,050,001 |
- |
1,055,000 |
1,051,900 |
|
| 1 |
1,415,001 |
- |
1,420,000 |
1,415,200 |
|
| ---------------------- |
---------------------- |
---------------------- |
---------------------- |
---------------------- |
|
| 1117 |
|
8,000,000 |
|
|
|
|
|
| S. No. |
CATEGORIES OF |
NUMBER OF |
TOTAL |
|
|
|
|
SHAREHOLDERS |
SHAREHOLDERS |
SHARES HELD |
PERCENTAGE |
|
|
|
|
|
|
| 1 |
Individual |
1096 |
4,297,000 |
53.71 |
|
|
| 2 |
Investment Companies |
10 |
562,600 |
7.03 |
|
|
| 3 |
Insurance Companies |
1 |
480,500 |
6.01 |
|
|
| 4 |
Joint Stock Companies |
2 |
9,000 |
0.11 |
|
|
| 5 |
Financial Institutions |
5 |
1,230,700 |
15.38 |
|
|
| 6 |
Modaraba Companies |
1 |
1,000 |
0.01 |
|
|
| 7 |
Others |
1 |
4,000 |
0.05 |
|
|
| 8 |
Central Depository Co. |
1 |
1,415,200 |
17.70 |
|
|
|
|
---------------------- |
---------------------- |
---------------------- |
|
|
|
1117 |
8,000,000 |
100.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
