| Grays 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 THE MEETING |
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| DIRECTORS'
REPORT |
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| AUDITORS'
REPORT |
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| BALANCE
SHEET |
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| PROFIT
AND LOSS ACCOUNT |
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| STATEMENT
OF SOURCES AND APPLICATION OF FUNDS |
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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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Mr. William Gray |
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Chairman |
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Mr. Khawar Anwar Khawaja |
Vice Chairman |
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Mr. Abdul Rashid Mir |
Chief Executive |
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Mr. Harold John Gray |
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Mr. Ronald George Blake |
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Mr. Muhammad Tahir Butt |
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Mr. Khurram Anwar Khawaja |
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Mr. Saeed Ahmad Jabal |
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Mr. Muhammad Farooq |
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Mrs. Nuzhat Khawar
Khawaja |
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| AUDITORS |
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Riaz Ahmad & Company |
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Chartered Accountants |
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8-Mall Mansion, 30
Shahrah-e-Quaid-e-Azam, |
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Lahore - 54000 - Pakistan |
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Tel: (042) 7233324-26 |
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Fax: (042) 7235762 |
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E-mail:
sarfrazm@paknet4.ptc.pk. |
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| MANAGEMENT
CONSULTANT |
Sarfraz Mahmood (Pvt)
Ltd, |
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| CORPORATE
SECRETARY |
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Mr. Abdul Ghaffar |
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| LEGAL
ADVISOR |
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International Legal
Services |
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| REGISTERED
AND HEAD OFFICE |
41-A, Lawrence Road,
Lahore, |
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Tel: (042) 6372159-61 |
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Fax: (042) 6371898 |
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E-mail:_gll@ms.netpk. |
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| BANKERS |
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ANZ Grindlays |
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Bank Alfalah Ltd. |
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The Bank of Punjab. |
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The Bank of Khyber |
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Askari Commercial Bank
Ltd. |
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Muslim Commercial Bank
Ltd. |
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Faysal Bank Ltd. |
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First Women Bank Ltd. |
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Prime Commercial Bank
Ltd. |
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Habib Bank Ltd. |
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| NOTICE
OF THE 4TH ANNUAL GENERAL MEETING |
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| Notice
is hereby given that the 4th Annual General Meeting of the Company will be
held on November 02, 1999 at |
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| 11.00
a.m. at the Registered Office of the Company located at 41-A, Lawrence Road,
Lahore to transact the following |
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| business: |
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| 1.
to confirm the minutes of 3rd Annual General Meeting held on December 17,
1998, |
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| 2.
to receive, consider and adopt the audited accounts of the company for the
year ended June 30, 1999 |
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| together
with Directors and Auditors' report thereon. |
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| 3.
to approve the payment of cash dividend @ 15% (Rs. 1.5 per share) as
recommended by the directors for |
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| the
year ended June 30, 1999. |
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| 4.
to appoint Auditors and to fix their remuneration. The present Auditors
Messers. Riaz Ahmad & Company, |
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| Chartered
Accountants, retire and being eligible, offer themselves for re-appointment. |
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| 5.
to elect 10 directors of the company for a period of three years as fixed by
the Board of Directors under |
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| section
178(1) of the Companies Ordinance, 1984. Following are the names of retiring
directors: |
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| 1.
Mr. William Gray |
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6. Mr. Muhammad Tahir
Butt |
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| 2.
Mr. Khawar Anwar Khawaja |
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7. Mr. Khurram Anwar
Khawaja |
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| 3.
Mr. Abdul Rashid Mir |
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8. Mr. Saeed Abroad Jabal |
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| 4.
Mr. Harold John Gray |
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9. Mr. Muhammad Farooq |
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| 5.
Mr. Ronald George Blake |
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10. Mrs. Nuzhat Khawar
Khawaja |
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| 6.
to transact any other business with the permission of the chair. |
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BY THE ORDER OF THE BOARD |
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ABDUL GHAFFAR |
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| Lahore:
October 11, 1999 |
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(COMPANY SECRETARY) |
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| NOTES: |
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| 1.
Any person who seeks to contest election of the office of the directors shall
file with the company not later |
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| than
14 days before the date of the meeting notice of his intention to offer
himself for election as director in |
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| terms
of section 178(3) of the Companies Ordinance, 1984; |
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| 2.
A member entitled to attend and vote at the meeting may appoint another
member as his/her proxy to |
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| attend,
speak and vote at the meeting. The instrument of proxy in order to be
effective must be received at |
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| the
Registered Office of the Company not later than 48 hours before the meeting; |
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| 3.
Members are requested to immediately notify the change in address, if any; |
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| 4.
Account holders and sub-account holders holding book entry securities of the
Company in Central |
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| Depository
System of Central Depository Company of Pakistan Limited are requested to
bring original I.D. |
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| Card
or attested copy of I.D. Card for identification purpose. |
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| DIRECTORS'
REPORT |
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| With
profound gratitude to the Almighty Allah, I, on behalf of the board, present
before you the fourth annual report of |
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| your
company for the year ended 30th June, 1999. |
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| FINANCIAL
RESULTS |
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| The
financial results of the Company for the year are as under: |
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|
RUPEES |
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| Total revenue |
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|
46 923 931 |
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| Total
expenditure |
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24 423 404 |
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------------------ |
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| Profit
before tax |
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22 500 527 |
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| Provision
for taxation |
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2 100 000 |
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------------------ |
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| Profit after tax |
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|
20 400 527 |
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| Un-appropriated
profit brought forward |
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53 903 |
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------------------ |
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| Profit
available for appropriation |
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20 454 430 |
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| Appropriations |
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| Transfer
to statutory reserve |
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4 000 000 |
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| Proposed
dividend @ 15% |
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15 000 000 |
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------------------ |
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|
19 000 000 |
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------------------ |
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| Un-appropriated
Profit |
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1 454 430 |
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========== |
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| Earning
Per Share |
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2.04 |
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========== |
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| REVIEW
OF OPERATIONS |
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| The
fiscal 1998-99 has again been quite difficult for Pakistan as the expected
turnaround in economy could not |
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| materialize
due to the numerous reasons - mainly the adversities of severe economic
turmoil in the South East Asian |
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| region
coupled with the aftermath of nuclear tests in May, 1998. However, amidst an
extremely unfavorable business, |
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| industrial
and economic atmosphere, your company has performed well in every area of its
operations and |
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| succeeded
in attaining the pre-determined objectives. |
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| During
the year, the company transacted business worth Rs.179.361 million generating
a respectable lease portfolio |
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| comprising
164 leases (including 14 cases consisting of 397 contracts with corporate
consumers) as against |
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| Rs.
142.809 million placed in 126 leases in 1998 - growth being 25.60 percent.
These lessees were very carefully |
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| selected
after in depth scrutiny of their operations; most of them have a past record
of demonstrated successful |
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| performance
which has again been substantiated through their excellent rental payment
behaviour. |
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| The
gross revenue from operations Was Rs. 46.924 million (Rs, 28.682 million in
1998) and net |
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| profit
before and after tax were Re, 22.501 million and Rs. 20.401 million
respectively as compared |
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| to
Rs. 16.852 million and Rs. 16.392 million during 1998, You will surely
appreciate that income |
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| from
lease operations has increased from 90 percent of the total revenue in 1998
to 99 percent in |
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| 1999
which reflects sheer dedication to our very basic objective. |
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| Dear
shareholders, our major emphasis still remains on small to medium size leases
and a blend of |
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| assets
with high degree of concentration on productive assets financing. The
analysis of the |
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| portfolio
shows that over 66 percent of the leased assets represent our support to the
industrial |
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| sector
to finance its requirements of balancing, modernization and replacement of
plant and |
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| machinery. |
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| A
nominal decrease in the ratio of assets comprising plant and machinery
financed during the |
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| current
year as compared to the previous year's figure is visible from the above but
it does not |
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| represent
any change in our policy. This is just a reflection of the persistent
recession in the market, |
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| which
has slowed down the industrial activity for some considerable time. |
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| At
the same time, we have also been quite vigilant about risk diversification
and have endeavoured |
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| to
maintain a balanced sectoral exposure. The sector wise analysis of our lease
portfolio shows |
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| that
20-25 percent is the maximum investment in any single sector. |
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|
| CREDIT
RATING |
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| You
are surely aware that last year DCR-VIS Credit Rating Company Limited awarded
your company with a |
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| respectable
medium to long-term entity rating of Triple-B Minus which reflects
"adequate credit quality with |
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| reasonable
and sufficient protection factors" and Short-term entity rating of D-3
which indicates "satisfactory liquidity |
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| and
other protection factors" qualifying your company for the investment
grade. At the same time, the company was |
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| the
first in the leasing sector which offered itself to DCR-VIS for equity rating
and was rated at PE-3 which signifies |
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| high
quality returns to the shareholders. |
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| This
year, the Rating Agency has upgraded the medium to long-term entity rating
from Triple. B minus to Triple B and |
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| short-term
rating from D-3 to D-2. The equity rating has also been maintained at PE-3.
According to the rating |
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| company's
standards, the medium to long-term entity rating of Triple B means
"adequate credit quality, protection |
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| factors
are reasonable and sufficient, risk factors are considered variable if
changes occur in the economy. The |
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| short-term
entity rating of B-2 means good certainty of timely payment, liquidity
factors and company fundamentals |
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| are
sound. Although ongoing funding needs may enlarge total financing
requirements, access to capital markets is |
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| good.
Risk factors are small. The equity rating of PE-3 means that returns are
sensitive to changing market |
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| conditions.
While displaying variability of returns to shareholders, these possess
adequate stability over long period |
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| of holding, |
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| Dear
shareholders, this upgrading by DCR-VIS are obviously based on our financial
performance during 1998-99 |
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| when
the company, despite the economic downturn, depicted significant growth in
net investment in leases and profit |
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| after
tax. Besides improving efficiency and maintaining asset quality, the
management has also demonstrated ability |
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| to
enhance credit facilities. |
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| RESOURCE
MOBILIZATION |
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| During
the year under review, we utilised credit lines of Rupees 90 million. It
comprises of Rupees 18.5 million drawn |
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| against
the credit line of Rupees 50 million from ANZ Grindlays Bank Limited, Rupees
15 million from Bank Alflah |
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| Limited
and remaining from Investment Banks. We are further negotiating with
different financial institutions for |
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| raising
long term funds to the tune of 150 million rupees to finance our planned
future activities. |
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| Further,
we have fulfilled the criteria of obtaining permission for issuance of
Certificates of Investment. After getting |
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| this
permission, we will have another important avenue of resource mobilization,
which has never lost sight of the |
|
| management
of your company for furtherance of business in future. |
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|
| Human
resource development is also an important area where we have concentrated all
along to develop a team of |
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| dedicated
and devoted persons in the marketing as well as administration departments
according to the specific |
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| requirements
of the company. |
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|
|
| THE
ECONOMY AND LEASING SECTOR |
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|
| The Economy |
|
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| The
overall economy has witnessed a significant deceleration in growth and a
severe strain on all major macro- |
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| economic
indicators. There is little to cheer about as the chances for revival are
very bleak. The fiscal accounts are |
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| under
strain because of the severe downturn in the domestic economy. At the same
time, there has been no |
|
| significant
new investment, particularly, the direct foreign investment which plummeted
to $ 376 million against the |
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| preceding
year's inflow of $ 601.3 million. |
|
|
| Certainly,
the direct foreign investment can contribute a lot to economic growth and
development - it is not a |
|
| panacea;
it can complement and catalyze economic activities and the performance of
domestic enterprise but in |
|
| some
circumstances it may also hinder them, Hence, we should first of all restore
the confidence of the domestic |
|
| investors
which is more important for economic revival. Once we succeed to mobilize our
domestic investment, the |
|
| overseas
investors would surely be allured and the international investment would
automatically come to Pakistan. |
|
|
| Public
policy does matter at the national and international levels. It is important
in creating the conditions that attract |
|
| foreign
direct investment and enhance its benefits. The government should maximize
the positive contribution that |
|
| foreign
direct investment can make to the development and minimize any negative
effects it may have. |
|
|
| Another
factor that continues to impede economic progress and deter foreign private
investment and external aid is |
|
| widespread
civil conflict and political unrest in the country. Every government in
Pakistan might be thinking liberally |
|
| on
the economic front. On the social and political fronts, it demonstrates a
conservative emotion, |
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|
| Last
but not the least is the change in our approach. While the primary
responsibility for development rests with the |
|
| government,
corporations also have a responsibility, not only to their shareholders but
to the society at large. They |
|
| must
be encouraged and motivated to assume this responsibility more forcefully. |
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|
| The
Leasing Sector |
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|
| Leasing
industry having demonstrated a significant role in acceleration of local
economy during early 1990's is in dire |
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| strait
.The challenge being faced by the industry are two folds; one is to sustain
the required growth rate against |
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| depressed
economic situations and second is the dearth of long term resources. |
|
|
| Though
Government has bestowed the leasing industry with incentives like exemption
of withholding tax on sale and |
|
| lease
back transaction and acceptance of residual value as transfer value but in
order to bring it back on "Road to |
|
| Recovery"
following issues demands an immediate patronage by the competent authorities: |
|
|
| 1-
Revamping of legal infrastructure |
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| 2-
Long term funds |
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| 3-
Convenient and economically viable foreign exchange risk coverage |
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| 4-
Depreciation Allowances |
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| FUTURE
OUTLOOK |
|
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| GLL
has undertaken profound Successful operations during last two financial years
now focus is on two main areas; |
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| first
to attain our targeted growth in terms of size and secondly, to produce safe
investment portfolio. With a view to |
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| accomplish
this goal, special emphasis will be given on the following: |
|
|
| Extra
cautious evaluation policy(s) will be adopted. |
|
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| A
vigilant approach will be followed to assess changing trends in the economy
and their impact on |
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| commercial
& Industrial sectors. |
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| New
product development - credit will be made available to corporate consumers. |
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|
| Geographical
diversification - New offices in areas enriched with business potential |
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| Human
resource development to increase efficiency |
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| No
compromise on internal as well as external rules and regulations |
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| YEAR
2K COMPLIANCE |
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| All
the computer system of your company including hardware and software are duly
Y2K complaint. |
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|
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| AUDITORS |
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| The
present auditors Messrs, Riaz Ahmad and Company, Chartered Accountants,
retire and being eligible, offer |
|
| themselves
for re-appointment. |
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|
| PATTERN
OF SHAREHOLDING |
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| A
statement showing pattern of shareholdings in the company as on June 30, 1999
appears on page 30 of the report. |
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|
| ACKNOWLEDGMENT |
|
| I
would like to thank the banks and financial institutions for their support,
the clients who provided us opportunity to |
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| serve
them and extend a very special thanks and appreciation to company employees
for their noteworthy, tireless |
|
| and
dedicated efforts which enabled the company to produce these good results. |
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FOR AND ON BEHALF OF THE BOARD |
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|
ABDUL RASHID MIR |
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| Lahore:
September 07, 1999 |
|
Chief Executive |
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|
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| AUDITORS'
REPORT TO THE MEMBERS |
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| We
have audited the annexed balance sheet of GRAYS LEASING LIMITED as at June
30, 1999 and the related |
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| profit
and loss account and statement of sources and application of funds, together
with the notes forming part |
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| 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 |
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| report that: |
|
|
| (a)
in our opinion, proper books of account have been kept by the company as
required by the Companies |
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| Ordinance,
1984; |
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|
|
|
|
| (b)
in our opinion: |
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|
|
|
|
|
| (i)
the balance sheet and profit and loss account together with the notes thereon
have been drawn up |
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| 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; |
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|
|
|
| (ii)
the expenditure incurred during the year was for the purpose of the company's
business; and |
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|
|
|
| (iii)
the business conducted, investments made and the expenditure incurred during
the year were in |
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| accordance
with objects of the company; |
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|
|
|
| (c)
in our opinion and to the best of our information and according to the
explanations given to us, the balance |
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| 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 the Zakat and Ushr
Ordinance, 1980. |
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|
RIAZ AHMAD & COMPANY |
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| Lahore:
07 September, 1999 |
|
Chartered Accountants |
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|
|
| BALANCE
SHEET AS AT 30 JUNE 1999 |
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|
|
|
NOTE |
1999 |
1998 |
|
|
|
|
Rupees |
Rupees |
|
| EQUITY
AND LIABILITIES |
|
|
|
|
|
|
|
| SHARE
CAPITAL AND RESERVES |
|
|
|
|
|
|
| Authorized
capital |
|
|
|
| 20,000,000
ordinary shares of |
|
|
|
| Rupees
10 each |
|
|
200 000 000 |
200 000 000 |
|
|
|
|
========== |
========== |
|
| Issued,
subscribed and paid |
|
|
|
| up capital |
|
3 |
100 000 000 |
100 000 000 |
|
| Capital reserve |
|
4 |
8 700 000 |
4 700 |
|
| General
reserve |
|
|
15 000 000 |
15 000 000 |
|
| Unappropriated
profit |
|
|
1 454 430 |
53 903 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
125 154 430 |
119 753 903 |
|
|
|
|
|
| NON-CURRENT
LIABILITIES |
|
|
|
| Redeemable
capital |
|
5 |
43 392 362 |
20 384 615 |
|
| Liabilities
against assets subject to |
|
|
|
|
| finance lease |
|
6 |
746 338 |
1 320 642 |
|
| Long
term security deposits |
|
7 |
34 599 114 |
26 748 306 |
|
| Deferred
taxation |
|
|
1 500 000 |
-- |
|
| Employees'
retirement gratuity |
|
|
486 166 |
396 001 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
80 723 980 |
48 849 564 |
|
|
|
|
|
| CURRENT
LIABILITIES |
|
|
|
|
| Current
portion of long term liabilities |
|
8 |
31 092 593 |
10 553 793 |
|
| Short
term finances |
|
9 |
49 650 009 |
19 000 000 |
|
| Accrued
and other liabilities |
|
10 |
3 718 379 |
3 740 221 |
|
| Proposed
dividend |
|
|
15 000 000 |
-- |
|
| Provision
for taxation |
|
|
1 201 840 |
601 840 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
100 662 821 |
33 895 854 |
|
|
|
|
| CONTINGENCIES
AND COMMITMENTS |
|
|
-- |
-- |
|
|
|
|
------------------ |
------------------ |
|
|
|
306 541 231 |
202 499 321 |
|
|
|
|
========== |
========== |
|
|
| ASSETS |
|
|
|
|
|
|
|
| NON-CURRENT
ASSETS |
|
|
|
| Tangible operating
fixed assets |
|
11 |
3 353 603 |
3 130 194 |
|
| Investment
in finance leases |
|
|
|
| Lease
rentals receivable |
|
323 239 555 |
208 597 827 |
|
| Guaranteed
residual value of leased assets |
|
46 639 664 |
28 817 236 |
|
|
|
------------------ |
------------------ |
|
| Gross
investment in leases |
|
369 879 219 |
237 415 063 |
|
| Less:
Unearned finance income |
|
76 239 016 |
50 224 798 |
|
|
|
------------------ |
------------------ |
|
| Net
investment in finance leases |
|
293 640 203 |
187 190 265 |
|
|
|
|
------------------ |
------------------ |
|
| Less:
Current portion |
|
118 234 042 |
61 243 337 |
|
| Provision
for doubtful receivables |
|
137 331 |
9 608 |
|
|
|
|
------------------ |
------------------ |
|
|
|
118 371 373 |
61 252 945 |
|
|
|
|
|
|
|
175 268 830 |
125 937 320 |
|
| Long
term investment |
|
12 |
600 247 |
98 508 |
|
| Long
term deposits and deferred cost |
|
13 |
955 414 |
1 358 346 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
180 178 094 |
130 524 368 |
|
|
|
|
|
| CURRENT
ASSETS |
|
|
|
| Current
portion of investment in finance leases |
|
|
118 234 042 |
61 243 337 |
|
| Advances,
deposits, prepayments |
|
|
|
| and
other receivables |
|
14 |
3 606 404 |
1 986 341 |
|
| Short
term investment |
|
15 |
50 214 |
-- |
|
| Cash
and bank balances |
|
16 |
4 472 477 |
8 745 275 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
126 363 137 |
71 974 953 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
306 541 231 |
202 499 321 |
|
|
|
|
========== |
========== |
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
CHIEF EXECUTIVE |
|
DIRECTOR |
|
|
|
|
|
|
|
|
| PROFIT
AND LOSS ACCOUNT FOR THE YEAR ENDED 30 JUNE 1999 |
|
|
|
NOTE |
1999 |
1998 |
|
|
|
Rupees |
Rupees |
|
|
|
|
| REVENUE |
|
|
|
| Income
from lease financing |
|
|
46 243 884 |
25 712 755 |
|
| Other income |
|
17 |
680 047 |
2 969 120 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
46 923 931 |
28 681 875 |
|
|
|
|
|
| EXPENDITURE |
|
|
|
| Administrative
and other operating expenses |
|
18 |
9 949 856 |
9 306 605 |
|
| Financial
and other charges |
|
19 |
14 473 548 |
2 523 120 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
24 423 404 |
11 829 725 |
|
|
|
|
------------------ |
------------------ |
|
| PROFIT
BEFORE TAXATION |
|
|
22 500 527 |
16 852 150 |
|
| PROVISION
FOR TAXATION |
|
20 |
2 100 000 |
460 000 |
|
|
|
|
------------------ |
------------------ |
|
| PROFIT
AFTER TAXATION |
|
|
20 400 527 |
16 392 150 |
|
| UNAPPROPRIATED
PROFIT |
|
|
|
| BROUGHT
FORWARD |
|
|
53 903 |
2 661 753 |
|
|
|
|
|
------------------ |
------------------ |
|
| PROFIT
AVAILABLE FOR |
|
|
|
| APPROPRIATION |
|
20 454 430 |
19 053 903 |
|
|
|
|
|
| APPROPRIATIONS |
|
|
|
| Capital reserve |
|
|
4 000 000 |
4 000 000 |
|
| General
reserve |
|
|
-- |
15 000 000 |
|
| Proposed
dividend per share |
|
|
|
|
| Rupees
1.50 (1998: NIL) |
|
|
15 000 000 |
-- |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
19 000 000 |
19 000 000 |
|
|
|
|
------------------ |
------------------ |
|
| UNAPPROPRIATED
PROFIT |
|
|
1 454 430 |
53 903 |
|
|
|
|
========== |
========== |
|
| EARNINGS
PER SHARE |
|
21 |
2.04 |
1.64 |
|
|
|
|
|
|
|
|
|
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
CHIEF EXECUTIVE |
|
|
DIRECTOR |
|
|
|
|
|
| STATEMENT
OF SOURCES AND APPLICATION OF FUNDS |
|
| FOR
THE YEAR ENDED 30 JUNE 1999 |
|
|
|
|
1999 |
1998 |
|
|
|
Rupees |
Rupees |
|
|
|
|
| CASH
FLOWS FROM OPERATING ACTIVITIES |
|
| Profit
before taxation |
|
|
22 500 527 |
16 852 150 |
|
| Adjustments
to reconcile profit with net |
|
|
| cash
provided by operating activities |
|
|
|
|
|
| Depreciation |
|
|
768 792 |
697 511 |
|
| Deferred
cost amortized |
|
|
280 307 |
280 307 |
|
| Provision
for gratuity |
|
|
319 515 |
243 335 |
|
| Financial
charges |
|
|
13 998 841 |
2 231 455 |
|
| Provision
for doubtful receivables |
|
|
127 723 |
9 608 |
|
| Loss
on disposal of fixed assets |
|
|
68 677 |
1 750 |
|
| Profit
on placement of funds, bank deposits |
|
|
|
|
| and
term finance certificates |
|
|
(680 047) |
(2 989 120) |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
14 881 808 |
494 846 |
|
|
|
|
------------------ |
------------------ |
|
| Operating
profit before working capital changes |
|
|
37 382 335 |
17 346 996 |
|
|
|
|
|
| Increase
in advances, deposits, prepayments |
|
|
| and
other receivables |
|
|
(250 025) |
(273 480) |
|
|
|
|
|
|
| Increase/(decrease)
in accrued and other |
|
|
|
|
| liabilities |
|
|
(1 067 015) |
1 216 366 |
|
|
|
|
------------------ |
------------------ |
|
| Cash
generated from operations |
|
|
36 065 295 |
18 289 882 |
|
|
|
|
| Financial
charges paid |
|
|
(12 951 668) |
(513 751) |
|
| income
tax paid |
|
|
(1 435 584) |
(910 609) |
|
| Gratuity paid |
|
|
(229 350) |
(5 334) |
|
|
|
|
------------------ |
------------------ |
|
| Net
cash from operating activities |
|
|
21 448 693 |
16 860 188 |
|
|
|
|
|
|
|
|
|
|
1999 |
1998 |
|
|
|
|
|
Rupees |
Rupees |
|
|
|
|
| CASH
FLOWS FROM INVESTING ACTIVITIES |
|
|
| Net
Investment in finance leases |
|
|
(106 449 938) |
(112 090 360 |
|
| Assets
purchased for own use |
|
|
(542 871) |
(235 145) |
|
| Long
term deposits |
|
|
122 625 |
(299 813) |
|
| Sale
proceeds of fixed assets |
|
|
254 941 |
5 500 |
|
| Long
term investments |
|
|
(501 739) |
(48 084) |
|
| Short
term investment |
|
|
(50 214) |
-- |
|
| Profit
on placement of funds, bank deposits and |
|
|
|
|
| term
finance certificates |
|
|
745 593 |
3 652 070 |
|
|
|
|
------------------ |
------------------ |
|
| Net
cash used in investing activities |
|
|
(106 421 603) |
(109 015 832) |
|
|
|
|
| CASH
FLOWS FROM FINANCING ACTIVITIES |
|
|
| Redeemable
capital |
|
|
33 392 362 |
30 000 000 |
|
| Shod
term finances |
|
|
30 650 009 |
19 000 000 |
|
| Long
term security deposits |
|
|
17 685 598 |
16 580 041 |
|
| Liabilities
against assets subject to finance lease |
|
(1 027 857) |
(702 010) |
|
|
|
------------------ |
------------------ |
|
| Net
cash from financing activities |
|
|
80 700 112 |
64 878 031 |
|
|
|
|
| NET
DECREASE IN CASH AND CASH |
|
|
| EQUIVALENTS |
|
|
(4 272 798) |
(27 277 613) |
|
|
|
|
|
|
| CASH
AND CASH EQUIVALENTS AT |
|
|
|
|
| BEGINNING
OF THE YEAR |
|
|
8 745 275 |
36 022 888 |
|
|
|
|
| CASH
AND CASH EQUIVALENTS AT THE END |
|
|
------------------ |
------------------ |
|
| OF THE YEAR |
|
|
4 472 477 |
8 745 275 |
|
|
|
|
========== |
========== |
|
|
|
|
|
|
|
CHIEF EXECUTIVE |
|
DIRECTOR |
|
|
|
| NOTES
TO THE ACCOUNTS FOR THE YEAR ENDED 30 JUNE 1999 |
|
|
| 1.
LEGAL STATUS AND NATURE OF BUSINESS |
|
|
| The
company was incorporated in Pakistan as public limited company on 31 August
1995. The company is |
|
| listed
on Karachi and Lahore Stock Exchanges. The company is principally engaged in
the leasing business |
|
| and
also provides financial and advisory services. It is classified as a
non-banking financial institution (NBFI) |
|
| by
the State Bank of Pakistan and is regulated by the Securities and Exchange
Commission of Pakistan. |
|
|
|
|
| 2.
SIGNIFICANT ACCOUNTING POLICIES |
|
|
|
|
|
|
| 2.1
Accounting convention |
|
|
|
| These
financial statements have been prepared under the historical cost convention. |
|
|
|
|
| 2.2
Revenue recognition |
|
|
|
| The
company follows the 'Finance Method' to recognize the income on finance
leases, The unearned |
|
| finance
income i.e. the excess of aggregate lease rentals and the residual value over
the cost of leased |
|
| assets
is amortized to income over the lease term by applying the annuity method to
produce a constant |
|
| rate
of return on the net cash investment in the lease. |
|
|
|
|
|
|
| Income
on bank deposits and other investments is recognized on time proportion basis
taking into account |
|
| the
principal outstanding and applicable rate of mark-up/profit thereon. Dividend
income, fees, commissions |
|
| and
commitment charges etc; are accounted for on receipt basis. |
|
|
|
|
| 2.3
Tangible operating fixed assets |
|
|
|
|
|
|
| Owned |
|
|
|
| These
are stated at cost less accumulated depreciation. Depreciation is charged to
income applying the |
|
| diminishing
balance method to write off the cost of assets over their expected useful
life. No depreciation is |
|
| charged
on assets deleted during the year. Maintenance and repairs are charged to
income as and when |
|
| incurred.
Major renewals and improvements are capitalized. |
|
|
|
| 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
Accounts receivables |
|
| Provision
for doubtful receivables is made/adjusted after a review of the outstanding
portfolio at year end on |
|
| the
basis of Prudential Regulations as applicable to leasing companies and
management's own judgement. |
|
|
| 2.5
Deferred cost |
|
| These
costs are amortized over a period of five years commencing from the year in
which they are incurred. |
|
|
| 2.6
Investments |
|
| Long
term investments are stated at cost. Provision for diminution in value of
investments is made if |
|
| considered
permanent. Short term investments are stated at lower of cost and market
value determined on |
|
| an
aggregate portfolio basis. |
|
|
| 2.7
Employees retirement benefits |
|
| The
company operates an unfunded gratuity scheme covering all its permanent
employees who have |
|
| completed
the minimum qualifying period of six months, Provision is made annually to
cover the obligation. |
|
|
| 2.8 Taxation |
|
| The
charge for current taxation is based on taxable income at the current tax
rates after taking into account |
|
| the
tax credits and tax 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 foreseable future. As a measure of prudence, deferred tax debits are not
accounted for. |
|
|
|
|
| 2.9
Foreign currency transactions |
|
|
|
|
| Transactions
in foreign currency are accounted for in Pak Rupees at the rates of exchange
ruling at the date |
|
| of
the transactions. Assets and liabilities in foreign currency are translated
into Pak Rupees at the rate of |
|
| exchange
ruling at the balance sheet date. Exchange gain/loss is charged to current
year's income. |
|
|
|
|
|
|
1999 |
1998 |
|
|
|
Rupees |
Rupees |
|
| 3.
ISSUED, SUBSCRIBED AND PAID UP CAPITAL |
|
| 10
000 000 ordinary shares of Rupees 10 each |
|
|
| fully
paid up in cash (Note 3.1) |
|
|
100 000 000 |
100 000 000 |
|
|
|
|
========== |
========== |
|
|
|
|
| 3.1
This includes 3,000,000 (1998: 3 000 000) ordinary shares held by the
associated undertakings. |
|
|
|
|
| 4.
CAPITAL RESERVE |
|
|
|
|
|
| This
represents the statutory reserve created to comply with rules of business for
non-banking financial |
|
| institutions
(NBFIs). |
|
|
|
|
|
|
|
|
| 5.
REDEEMABLE CAPITAL |
|
|
|
| Trust
Investment Bank Limited (Note 5.1) |
|
30 392 362 |
15 000 000 |
|
| Askari
Commercial Bank Limited (Note 5.2) |
|
5 000 000 |
10 000 000 |
|
| Escort
Investment Bank Limited (Note 5.3) |
|
28 000 000 |
-- |
|
| Islamic
Investment Bank Limited |
|
-- |
5 000 000 |
|
|
|
------------------ |
------------------ |
|
|
|
63 392 362 |
30 000 000 |
|
| Less:
Current portion |
|
20 000 000 |
9 615 385 |
|
|
|
------------------ |
------------------ |
|
|
|
|
43 392 362 |
20 384 615 |
|
|
|
|
========== |
========== |
|
|
| 5.1
These represent two placement facilities of Rupees 15 million and Rupees
15.392 million obtained |
|
| for
financing lease operations. These are unsecured and carry mark-up at the rate
of 21 percent and 16 |
|
| percent
per annum and repayable on 30 August 1999 and 30 September 2000 respectively.
Profit is |
|
| payable
annually and six months basis respectively. |
|
|
| 5.2
This represents the balance of the facility of Rupees 10 million obtained for
financing the lease |
|
| operations.
It carries mark-up at the rate of 18.25 percent per annum. This facility is
secured against pari |
|
| passu
charge over leased assets and assignment of lease rentals upto Rupees 13.34
million and repayable |
|
| in
8 equal quarterly installments commenced from 30 September 1996. |
|
|
| 5.3
This represents placement facility utilized for financing of lease
operations. This is unsecured and |
|
| carries
mark-up at the rate of 17 percent per annum payable on half yearly basis. The
placement will mature |
|
| on
22 June 2001. |
|
|
|
|
|
|
| 6.
LIABILITIES AGAINST ASSETS SUBJECT TO FINANCE LEASE |
|
| The
rate of interest used as the discounting factor, implicit in leases, ranges
from 21 percent to 24 percent |
|
| per
annum. The amount of future payments and periods during which they fall due
are: |
|
|
|
|
|
1999 |
1998 |
|
|
|
|
Rupees |
Rupees |
|
| Year
ended 30 June |
|
|
|
| 1999 |
|
-- |
1 276 356 |
|
| 2000 |
|
1 492 745 |
1 212 033 |
|
| 2001 |
|
602 968 |
233 921 |
|
| 2002 |
|
215 304 |
-- |
|
|
|
------------------ |
------------------ |
|
|
|
2 311 017 |
2 722 310 |
|
| Less:
Unamortized finance charges |
|
306 876 |
463 260 |
|
|
|
------------------ |
------------------ |
|
|
|
2 004 141 |
2 259 050 |
|
| Less:
Current portion |
|
1 257 803 |
938 408 |
|
|
|
------------------ |
------------------ |
|
|
|
746 338 |
1 320 642 |
|
|
|
|
========== |
========== |
|
|
|
|
| 6.1
The lease rentals are payable in monthly installments. The amount of rentals
payable in the years |
|
| 2000,
2001 and 2002 includes the amount of salvage value of Rupees 185,713, Rupees
99,812 and |
|
| Rupees
92,288 respectively adjustable at the end of the lease term. The lease
agreements carry renewal |
|
| and
purchase option at the end of lease period. There are no financial
restrictions in lease agreements. |
|
| These
are secured by deposits of Rupees 192,100 and Rupees 185,713 included in long
term security |
|
| deposits
and short term security deposits respectively and demand promissory notes. |
|
|
|
|
| 7.
LONG TERM SECURITY DEPOSITS |
|
|
|
|
| Security
deposits on leases (Note 7.1) |
|
44 433 904 |
26 748 306 |
|
| Less:
Current portion |
|
9 834 790 |
-- |
|
|
|
------------------ |
------------------ |
|
|
|
34 599 114 |
26 748 306 |
|
|
|
========== |
========== |
|
|
|
|
| 7.1
These represent the interest free security deposits received against lease
contracts and are |
|
| repayable/adjustable
at the expiry/termination of the respective leases. |
|
|
|
|
|
1999 |
1998 |
|
|
|
Rupees |
Rupees |
|
|
|
|
|
| 8.
CURRENT PORTION OF LONG TERM LIABILITIES |
|
| Redeemable
capital |
|
20 000 000 |
9 615 385 |
|
| Liabilities
against assets subject to finance lease |
|
1 257 803 |
938 408 |
|
| Long
term security deposits |
|
9 834 790 |
-- |
|
|
|
------------------ |
------------------ |
|
|
|
31 092 593 |
10 553 793 |
|
|
|
|
========== |
========== |
|
|
|
|
| 9.
SHORT TERM FINANCES |
|
|
|
| From
banking companies |
|
|
|
| ANZ
Grindlays Bank Limited (Note 9.1) |
|
18 500 000 |
-- |
|
| Bank
Alfalah Limited (Note 9.2) |
|
6 250 000 |
-- |
|
|
|
------------------ |
------------------ |
|
|
|
24 750 000 |
-- |
|
| From
financial institutions (Note 9.3) |
|
24 900 009 |
19 000 000 |
|
|
|
------------------ |
------------------ |
|
|
|
49 650 009 |
19 000 000 |
|
|
|
|
========== |
========== |
|
|
|
|
| 9.1
This represents the balance drawn against the facility of Rupees 50 million.
This carries mark-up at |
|
| the
rate of 17 percent per annum payable quarterly and is secured against pari
passu charge over leased |
|
| assets
and lease rentals for Rupees 68 million. Each draw-down will be repaid in
full within six months and |
|
| is
eligible for redrawing. |
|
|
|
|
|
|
|
|
|
|
| 9.2
This represents balance of the aggregate credit facility of Rupees 15
million. Mark-up rate is 19 |
|
| percent
per annum and is secured by specific first charge on the leased assets of
Rupees 26 million, |
|
| assignment
of lease rentals and personal guarantees of two directors. |
|
|
|
|
|
|
|
|
| 9.3
These represent unsecured placement facilities carry mark-up ranging from
15.5 to 17.25 percent |
|
| per annum. |
|
|
|
|
|
|
|
|
| 10.
ACCRUED AND OTHER LIABILITIES |
|
|
| Mark-up
on redeemable capital |
|
|
|
|
|
|
|
|
| Secured |
|
-- |
8 016 |
|
| Unsecured |
|
2 304 221 |
1 672 068 |
|
|
|
|
|
| Mark-up
on secured short term finances |
|
209 178 |
-- |
|
| Mark-up
on unsecured short term finances |
|
258 427 |
46 569 |
|
| Lease
rentals in advance |
|
197 962 |
335 188 |
|
| Income
tax withheld |
|
2 462 |
1 015 855 |
|
| Accrued
liabilities |
|
324 689 |
607 525 |
|
| Lessees'
accounts payable |
|
421 440 |
55 000 |
|
|
|
------------------ |
------------------ |
|
|
|
3 718 379 |
3 740 221 |
|
|
|
|
========== |
========== |
|
|
|
| 11.
TANGIBLE OPERATING FIXED ASSETS |
|
|
|
|
COST |
|
ACCUMULATED DEPRECIATION |
|
DEPRECIATION |
|
|
BOOK VALUE |
|
|
As at |
Additions/ |
As at |
As at |
Adjustment |
As at |
AS AT |
Charge for |
Rate |
|
01 July |
(Deletions) |
30 June |
30 June |
|
30 June |
30 JUNE |
the year |
% |
|
1998 |
|
1999 |
1998 |
|
1999 |
1999 |
|
| Owned |
|
| Furniture
and fixtures |
454 557 |
27 700 |
482 257 |
57 559 |
-- |
100 029 |
382 228 |
42 470 |
10 |
| Office
equipments |
379 774 |
512 471 |
638 498 |
73 001 |
(37 275) |
139 514 |
498 984 |
103 788 |
10-30 |
|
|
(253 747) |
|
|
| Vehicles |
|
4 750 |
2 700 |
5 075 |
1 204 |
(601) |
1 497 |
3 578 |
894 |
20 |
|
|
(2 375) |
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
|
839 081 |
542 871 |
1 125 830 |
131 764 |
(37 876) |
241 040 |
884 790 |
147 152 |
|
|
|
(256 122) |
|
|
|
|
|
| Leased |
|
|
|
| Vehicles
(Note 11.2) |
2 563 325 |
669 130 |
2 940 455 |
596 143 |
(73 974) |
1 005 826 |
1 934 629 |
483 657 |
20 |
|
|
(292 000) |
|
|
| Office
equipments |
583 935 |
216 472 |
800 407 |
128 240 |
-- |
266 223 |
534 184 |
137 983 |
10-30 |
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
| 30 June 1999 Rupees |
3 986 341 |
1 428 473 |
4 866 692 |
856 147 |
(111 850) |
1 513 089 |
3 353 603 |
768 792 |
|
|
|
(584 122) |
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
| 30 June 1998 Rupees |
2 760 571 |
1 233 270 |
3 986 341 |
158 886 |
(250) |
856 147 |
3 130 194 |
697 511 |
|
|
|
(7 500) |
|
|
|
========== |
========== |
========== |
========== |
========== |
========== |
========== |
========== |
|
|
| 11.1
Detail of fixed assets disposed of during the year under reference. |
|
|
|
|
|
COST |
ACCUMULATED |
BOOK VALUE |
SALE |
MODE OF |
PARTICULARS OF |
|
| DESCRIPTION |
|
DEPRECIATION |
|
PROCEEDS |
DISPOSAL |
PURCHASER |
|
|
|
Rupees |
Rupees |
Rupees |
Rupees |
|
|
| OFFICE
EQUIPMENTS |
|
|
|
| Computers |
|
253 747 |
37 275 |
216 472 |
253 747 |
Sale and |
Al-Zamin Leasing |
|
|
|
|
lease back |
Modaraba, |
|
|
|
|
|
Clifton, Karachi, |
|
| VEHICLES |
|
|
|
|
| Bi-cycle |
|
2 375 |
601 |
1 774 |
1 194 |
Negotiation |
Mr. Waheed, Ex-employee, |
|
|
|
|
Gulberg, Lahore. |
|
|
| 11.2
Deletion represents the termination/transfer of lease facility to ex-chief
executive at price of |
|
| Rupees
149 929 against book valuing Rupees 218 026. |
|
|
|
|
|
1999 |
1998 |
|
|
|
Rupees |
Rupees |
|
| 12.
LONG TERM INVESTMENT |
|
|
| Quoted |
|
|
|
|
| National
Investment Trust |
|
|
|
| 51,347
units of Rupees 10 each |
|
600 247 |
-- |
|
| (Market
value on :30 June 1999 Rupees 390 237) |
|
|
|
| Packages
Limited |
|
|
|
|
| 29
term finance certificates of Rupees 5,000 each (Note 15.1) |
|
-- |
98 508 |
|
| (Market
value on 30 June 1998 Rupees 97,555) |
|
|
|
|
|
------------------ |
------------------ |
|
|
|
600 247 |
98 508 |
|
|
|
========== |
========== |
|
|
|
|
| 13.
LONG TERM DEPOSITS AND DEFERRED COST |
|
| Long
term security deposits |
|
394 801 |
517 426 |
|
|
|
|
|
| Deferred
cost (Note 13.1) |
|
840 920 |
1 121 227 |
|
| Less:
Amortized during the year |
|
280 307 |
280 307 |
|
|
|
------------------ |
------------------ |
|
|
|
560 613 |
840 920 |
|
|
|
------------------ |
------------------ |
|
|
|
955 414 |
1 358 346 |
|
|
|
|
========== |
========== |
|
|
|
|
| 13.1
This represents the unamortized portion of preliminary, share issue and other
pro-operating |
|
| expenses. |
|
|
|
|
|
|
|
|
| 14.
ADVANCES, DEPOSITS, PREPAYMENTS AND |
|
| OTHER
RECEIVABLES |
|
|
|
| Advance
income tax |
|
|
2 777 293 |
1 341 709 |
|
| Advances-
Considered good |
|
|
|
|
|
|
|
|
| To
company's executives (Note 14.1) |
|
56 500 |
21 500 |
|
| To
company's staff |
|
32 522 |
-- |
|
| To consultants |
|
234 000 |
298 725 |
|
|
|
|
|
|
|
323 022 |
320 225 |
|
| Profit
accrued on placement of funds, deposits |
|
|
|
| and
investments |
|
43 709 |
109 255 |
|
| Short
term security deposits |
|
185 713 |
-- |
|
| Short
term prepayments |
|
156 323 |
146 171 |
|
| Insurance
claims receivable |
|
98 687 |
68 981 |
|
| Due
from lessees |
|
21 657 |
-- |
|
|
|
|
------------------ |
------------------ |
|
|
|
3 606 404 |
1 986 341 |
|
|
|
|
========== |
========== |
|
|
| 14.1
Maximum balance due from executives at the end of any month during the year
was |
|
| Rupees
74,500 (1998: Rupees 21,500). |
|
|
|
|
|
|
1999 |
1998 |
|
|
|
|
Rupees |
Rupees |
|
|
|
|
| 15.
SHORT TERM INVESTMENT |
|
|
|
|
|
|
| Quoted |
|
|
|
|
|
|
| Packages
Limited |
|
|
|
| 29
term finance certificates of Rupees 5,000 each (Note 15.1) |
|
50 214 |
-- |
|
|
|
|
========== |
========== |
|
|
|
|
| 15.1
These term finance certificates are being redeemed over a period of five
years ending on 19 |
|
| February
2000. The rate of profit is 18.50 percent per annum payable semi annually.
Market value of these |
|
| certificates
as on 30 June 1999 was Rupees 89,552. |
|
|
|
|
|
| 16.
CASH AND BANK BALANCES |
|
|
|
|
|
|
| Cash in hand |
|
-- |
45 885 |
|
|
|
|
|
| Cash
with banks |
|
|
|
| On
current accounts (Note 16.1) |
|
1 831 096 |
803 480 |
|
| On
deposit accounts |
|
2 641 381 |
7 895 910 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
4 472 477 |
8 699 390 |
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
4 472 477 |
8 745 275 |
|
|
|
|
|
========== |
========== |
|
|
|
|
| 16.1
It includes Rupees 20,000 kept with State Bank of Pakistan as required by
rules of business for |
|
| non-banking
financial institutions (NBFIs). It is an interest free deposit. |
|
|
|
|
| 17.
OTHER INCOME |
|
|
|
| Profit
on placement of funds with NBFIs |
|
|
30 297 |
2 565 913 |
|
| Profit
on term finance certificates |
|
|
14 644 |
15 659 |
|
| Profit
on bank deposits |
|
|
635 106 |
387 548 |
|
|
|
|
------------------ |
------------------ |
|
|
|
680 047 |
2 969 120 |
|
|
|
|
========== |
========== |
|
|
|
|
|
1999 |
1998 |
|
|
|
|
Rupees |
Rupees |
|
|
|
|
|
| 18.
ADMINISTRATIVE AND OTHER OPERATING EXPENSES |
|
| Staff
salaries and other benefits inclusive of employees' |
|
| retirement
gratuity Rupees 319,515 (1998: 243,335) (Note 18.1) |
|
5 386 002 |
5 109 489 |
|
| Repair
and office maintenance |
|
192 945 |
161 325 |
|
| Rent,
rates and taxes |
|
628 551 |
656 884 |
|
| Postage
and telephone |
|
423 132 |
397 666 |
|
| Vehicles'
running |
|
551 260 |
393 535 |
|
| Electricity,
water and gas |
|
207 253 |
217 483 |
|
| Legal
and professional |
|
274 360 |
197 223 |
|
| Insurance |
|
353 043 |
317 404 |
|
| Fee
and subscription |
|
377 900 |
461 777 |
|
| Travelling
and conveyance |
|
229 312 |
238 226 |
|
| Printing
and stationery |
|
300 016 |
222 995 |
|
| Auditors'
remuneration |
|
|
|
|
|
|
| Audit fee |
|
75 000 |
50 000 |
|
| Out
of pocket expenses |
|
5 460 |
2 476 |
|
|
|
|
------------------ |
------------------ |
|
|
|
80 460 |
52 476 |
|
| Entertainment |
|
102 256 |
72 802 |
|
| Advertisement |
|
57 070 |
39 200 |
|
| Newspapers
and periodicals |
|
14 251 |
13 005 |
|
| Miscellaneous |
|
3 253 |
57 604 |
|
| Depreciation |
|
168 192 |
697 511 |
|
|
|
------------------ |
------------------ |
|
|
|
9 949 856 |
9 306 605 |
|
|
|
|
========== |
========== |
|
|
|
|
| 18.1
Number of employees, including chief executive and 4 executives as on 30 June
1999 were 17 |
|
| (1998: 15). |
|
|
|
|
|
|
| 19.
FINANCIAL AND OTHER CHARGES |
|
|
| Financial |
|
|
|
|
| Mark up on: |
|
|
|
|
| Redeemable
capital |
|
5 396 055 |
1 675 084 |
|
| Short
term finances |
|
8 002 681 |
51 569 |
|
| Financial
charges on liabilities against assets |
|
|
|
| subject
to finance lease |
|
415 685 |
450 219 |
|
| Commission
and other bank charges |
|
182 420 |
54 583 |
|
|
|
------------------ |
------------------ |
|
|
|
13 996 841 |
2 231 455 |
|
| Others |
|
|
|
|
| Amortization
of deferred cost |
|
280 307 |
280 307 |
|
| Loss
on disposal of fixed assets |
|
68 677 |
1 750 |
|
| Provision
for doubtful receivables |
|
127 723 |
9 608 |
|
|
|
------------------ |
------------------ |
|
|
|
14 473 548 |
2 523 120 |
|
|
|
|
========== |
========== |
|
|
|
|
|
1999 |
1998 |
|
|
|
Rupees |
Rupees |
|
|
|
|
|
| 20.
PROVISION FOR TAXATION |
|
| Current
year (Note 20.1) |
|
600 000 |
460 000 |
|
| Deferred
(Note 20.2) |
|
1 500 000 |
-- |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
2 100 000 |
460 000 |
|
|
|
|
========== |
========== |
|
|
|
|
| 20.1
This represents the provision for minimum tax as required under section 80D
of the Income Tax |
|
| Ordinance,
1979. In view of tax losses of Rupees 29.3 million (1998: Rupees 9 million),
no provision for |
|
| current
taxation except minimum tax is required. |
|
|
|
|
|
|
| 20.2
The revised International Accounting Standard IAS-12 "Accounting for
Taxes on Income", effective |
|
| for
financial statements beginning on or after 01 January 2002, requires full
recognition of deferred tax |
|
| balances
in the relevant period. The management has decided to progressively provide
for its deferred tax |
|
| liability
for the mandatory compliance of the IAS-12 by 01 January 2002, inspire it may
not reverse in |
|
| foreseeable
future. The total amount of deferred tax liability as at 30 June 1999 is
estimated at Rupees 10.9 |
|
| million
(1998: Rupees 4 million). Rupees 1.5 million have been provided in the
current year for deferred tax |
|
| liability. |
|
|
|
|
| 20.3
The company has filed appeal with Commissioner of Income Tax (Appeals)
against the order of |
|
| Deputy
Commissioner of Income Tax for levying tax amounting to Rupees 1.588 million
on other income for |
|
| the
pro-operating period. Due to pending outcome of the appeal, no provision has
been made in the |
|
| accounts
thereagainst. |
|
|
|
|
| 21.
EARNINGS PER SHARE |
|
| There
is no dilutive effect on the basic earnings per share of the company, which
is based on: |
|
|
|
|
|
|
| Profit
after taxation |
|
20 400 527 |
16 392 150 |
|
| Number
of ordinary shares |
|
10 000 000 |
10 000 000 |
|
| Earnings
per share |
|
2.04 |
1.64 |
|
|
|
|
|
| 22.
STATEMENT OF CHANGES IN EQUITY |
|
|
|
Share |
Capital |
General |
Unappropriated |
Total |
|
|
|
Capital |
Reserve |
Reserve |
Profit |
|
|
|
|
Rupees |
Rupees |
Rupees |
Rupees |
Rupees |
|
|
|
|
|
|
|
| Balance
as at 01 July 1997 |
100 000 000 |
700 000 |
-- |
2 661 753 |
103 361 753 |
|
|
| Net
profit for the year |
-- |
-- |
-- |
16 392 150 |
16 392 150 |
|
|
| Appropriations |
|
|
|
| Capital reserve |
|
-- |
4 000 000 |
-- |
(4 000 000) |
-- |
|
|
| General
reserve |
-- |
-- |
15 000 000 |
(15 000 000) |
-- |
|
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
|
| Balance
as at 30 June 1998 |
100 000 000 |
4 700 000 |
15 000 000 |
53 903 |
119 753 903 |
|
|
| Net
profit for the year |
-- |
-- |
-- |
20 400 527 |
20 400 527 |
|
|
| Appropriations |
|
|
|
| Capital reserve |
|
-- |
4 000 000 |
-- |
(4 000 000) |
-- |
|
|
| General
reserve |
-- |
-- |
-- |
-- |
-- |
|
|
| Proposed
dividend |
-- |
-- |
-- |
(15 000 000) |
(15 000 000) |
|
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
|
| Balance
as at 30 June 1999 |
100 000 000 |
8 700 000 |
15 000 000 |
1 454 430 |
125 154 430 |
|
|
|
|
========== |
========== |
========== |
========== |
========== |
|
|
|
|
| 23.
FINANCIAL INSTRUMENTS AND RELATED DISCLOSURES |
|
|
|
|
| 23.1
INTEREST/MARK-UP RATE |
|
| The
company's exposure to interest/mark-up rate risk and effective rates on its
financial assets and financial |
|
| liabilities
are summarized as follows: |
|
|
|
|
|
|
1999 |
|
|
FINANCIAL |
INTEREST/MARK.
UP |
NON- |
|
|
|
INSTRUMENTS |
BEARING |
INTEREST/ |
|
|
|
|
Within One |
One Year |
MARK-UP |
|
|
|
|
Year |
To Five |
BEARING |
|
|
|
|
Years |
|
|
|
|
Rupees |
Rupees |
Rupees |
Rupees |
|
|
|
|
|
| ASSETS |
|
|
|
| Net
investment in finance leases |
|
293 640 203 |
118 234 042 |
175 406 161 |
-- |
|
| Long
term investment |
|
600 247 |
-- |
-- |
600 247 |
|
| Long
term deposits |
|
394 801 |
-- |
-- |
394 801 |
|
| Advances,
deposits and other receivables |
672 788 |
-- |
-- |
672 788 |
|
| Short
term investment |
|
50 214 |
50 214 |
-- |
-- |
|
| Bank balances |
|
4 472 477 |
2 641 381 |
-- |
1 831 096 |
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
|
|
|
299 830 730 |
120 925 637 |
175 406 161 |
3 498 932 |
|
|
|
========== |
========== |
========== |
========== |
|
|
|
|
| LIABILITIES |
|
|
|
|
|
| Redeemable
capital |
|
63 392 362 |
20 000 000 |
43 392 362 |
-- |
|
| Liabilities
against assets subject to finance lease |
2 004 141 |
1 257 803 |
746 338 |
-- |
|
| Long
term security deposits |
|
44 433 904 |
-- |
-- |
44 433 904 |
|
| Short
term finances |
|
49 650 009 |
49 650 009 |
-- |
-- |
|
| Accrued
and other liabilities |
|
3 517 955 |
-- |
-- |
3 517 955 |
|
| Proposed
dividend |
|
15 000 000 |
-- |
-- |
15 000 000 |
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
|
|
|
177 998 371 |
70 907 812 |
44 138 700 |
62 951 859 |
|
|
|
========== |
========== |
========== |
========== |
|
| Total
interest/mark-up rate sensitivity gap |
121 832 359 |
50 017 825 |
131 267 461 |
(59 452 927) |
|
|
|
========== |
========== |
========== |
========== |
|
| Cumulative
interest/mark-up rate sensitivity gap |
-- |
50 017 825 |
181 285 286 |
121 832 359 |
|
|
|
========== |
========== |
========== |
========== |
|
|
| 23.2
EFFECTIVE INTEREST/MARK-UP RATES |
|
|
|
| Financial
assets |
|
| Net
investments in finance leases |
20.25 to 30.50 percent
per annum |
|
| Short
term investment |
|
18.50 percent per annum |
|
| Deposits
with banks |
|
9.00 to 12.50 percent per
annum |
|
| Financial
liabilities |
|
|
| Redeemable
capital |
|
16 to 21 percent per
annum |
|
| Liabilities
against assets subject to |
|
| Finance lease |
|
21 to 24 percent per
annum |
|
| Short
term finances |
|
15.50 to 19 percent per
annum |
|
|
| 23.3
INTEREST/MARK-UP RATE |
|
| The
company's exposure to interest/mark-up rate risk and effective rates on its
financial assets and financial liabilities |
|
| are
summarized as follows: |
|
|
|
|
|
|
1998 |
|
|
FINANCIAL |
INTEREST/MARK.
UP |
NON- |
|
|
|
INSTRUMENTS |
BEARING |
INTEREST/ |
|
|
|
|
Within One |
One Year |
MARK-UP |
|
|
|
|
Year |
To Five |
BEARING |
|
|
|
|
Years |
|
|
|
|
Rupees |
Rupees |
Rupees |
Rupees |
|
|
| ASSETS |
|
| Net
investment in finance leases |
|
187 190 265 |
61 243 337 |
125 946 928 |
-- |
|
| Long
term investment |
|
98 508 |
-- |
98 508 |
-- |
|
| Long
term deposits |
|
517 426 |
-- |
-- |
517 426 |
|
| Advances,
deposits and other receivables |
498 461 |
-- |
-- |
498 461 |
|
| Cash
and bank balances |
|
8 745 275 |
7 895 910 |
-- |
849 365 |
|
|
------------------ |
------------------ |
------------------ |
------------------ |
|
|
197 049 935 |
69 139 247 |
126 045 436 |
1 865 252 |
|
|
========== |
========== |
========== |
========== |
|
|
|
| LIABILITIES |
|
| Redeemable
capital |
|
30 000 000 |
9 615 385 |
20 384 615 |
-- |
|
| Liabilities
against assets subject to finance lease |
2 259 050 |
938 408 |
1 320 642 |
-- |
|
| Long
term security deposits |
|
26 748 306 |
-- |
-- |
26 748 306 |
|
| Short
term finances |
|
19 000 000 |
19 000 000 |
-- |
-- |
|
| Accrued
and other liabilities |
|
2 389 178 |
-- |
-- |
2 389 178 |
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
|
|
|
80 396 534 |
29 553 793 |
21 705 257 |
29 137 484 |
|
|
|
========== |
========== |
========== |
========== |
|
| Total
interest/mark-up rate sensitivity gap |
116 653 401 |
39 585 454 |
104 340 179 |
(27 272 232) |
|
|
|
========== |
========== |
========== |
========== |
|
| Cumulative
interest/mark-up rate sensitivity gap |
-- |
39 585 454 |
143 925 633 |
116 653 401 |
|
|
|
========== |
========== |
========== |
========== |
|
|
| 23.4
EFFECTIVE INTEREST/MARK-UP RATES |
|
| Financial
assets |
|
| Net
investments in finance leases |
21.16 to 30.50 percent
per annum |
|
| Long
term investment |
|
18.50 percent per annum |
|
| Deposits
with banks |
|
9.00 to 12.50 percent per
annum |
|
|
| Financial
liabilities |
|
| Redeemable
capital |
|
18.25 to 22 percent per
annum |
|
| Liabilities
against assets subject to |
|
| Finance lease |
|
|
22 to 24 percent per
annum |
|
| Short
term finances |
|
17.75 to 22 percent per
annum |
|
|
|
| 23.5
CREDIT RISK EXPOSURE |
|
| The
management of the company controls the credit risk exposure by obtaining
sufficient collateral, |
|
| monitoring
and limiting the further exposure to its clients, review of their cash flows
and making reasonable |
|
| provisions
for doubtful receivables. The management is also doing its best endeavour to
diversify its |
|
| investment
in different sectors of the economy so as to avoid concentration of credit
risk. |
|
|
| 23.6
FAIR VALUE OF FINANCIAL INSTRUMENTS |
|
| The
management is of the opinion that fair value of financial instruments, as on
the balance sheet date was |
|
| not
significantly different from their carrying amounts except for long term
investment (Note 12). |
|
|
| 24.
REMUNERATION OF CHIEF EXECUTIVE AND EXECUTIVES |
|
|
| The
aggregate amounts charged in the accounts for remuneration, including all
benefits to Chief Executive |
|
| and
Executives of the company are as follows: |
|
|
|
|
|
1999 |
|
1998 |
|
|
|
Chief |
Executives |
Total |
Chief |
Executives |
Total |
|
|
Executive |
|
Executive |
|
|
|
Rupees |
Rupees |
Rupees |
Rupees |
Rupees |
Rupees |
|
|
| Managerial
remuneration |
1 446 667 |
1 036 000 |
2 482 667 |
800 000 |
1 502 000 |
2 302 000 |
|
| Bonus |
|
-- |
129 500 |
129 500 |
-- |
-- |
-- |
|
| House rent |
|
651 000 |
466 200 |
1 117 200 |
360 000 |
675 900 |
1 035 900 |
|
| Utilities |
|
72 333 |
51 800 |
124 133 |
40 000 |
75 100 |
115 100 |
|
| Leave
fare assistance |
140 833 |
-- |
140 833 |
-- |
-- |
-- |
|
| Leave
encashment |
211 250 |
-- |
211 250 |
-- |
-- |
-- |
|
| Gratuity |
|
343 333 |
132 667 |
476 000 |
96 667 |
126 334 |
223 001 |
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
|
2 865 416 |
1 816 167 |
4 681 583 |
1 296 667 |
2 379 334 |
3 676 001 |
|
|
|
========== |
========== |
========== |
========== |
========== |
========== |
|
| Number
of persons |
1 |
4 |
|
1 |
5 |
|
|
|
| 24.1
No meeting fees were paid to directors during the year under reference. |
|
|
| 24.2
The chief executive has been provided company's maintained vehicle. Free
group medical insurance has |
|
| been
provided to chief executive and all executives of the company. |
|
|
|
|
|
| 25.
CORRESPONDING FIGURES |
|
|
|
| Corresponding
figures have been re-arranged and re-grouped wherever necessary for the
purpose of |
|
| comparison. |
|
|
|
CHIEF EXECUTIVE |
|
DIRECTOR |
|
|
|
| FORM 34 |
|
|
|
| PATTERN
OF HOLDING OF THE SHARES HELD BY THE |
|
| SHAREHOLDERS
OF GRAYS LEASING LIMITED |
|
| AS
AT JUNE 30, 1999 |
|
|
|
|
| No. of |
Shareholding |
Total |
|
| Shareholders |
From |
To |
Shares Held |
|
|
| 1075 |
101 |
500 |
54400 |
|
| 20 |
501 |
1000 |
19371 |
|
| 30 |
1001 |
5000 |
104649 |
|
| 21 |
5001 |
10000 |
200357 |
|
| 7 |
10001 |
15000 |
95150 |
|
| 18 |
15001 |
20000 |
368121 |
|
| 8 |
20001 |
25000 |
185000 |
|
| 2 |
30001 |
35000 |
60000 |
|
| 1 |
35501 |
40000 |
40000 |
|
| 11 |
45001 |
50000 |
544144 |
|
| 1 |
55001 |
60000 |
57777 |
|
| 1 |
65001 |
70000 |
70000 |
|
| 1 |
75001 |
80000 |
77036 |
|
| 5 |
90001 |
100000 |
500000 |
|
| 1 |
185001 |
190000 |
186284 |
|
| 2 |
525001 |
530000 |
1059246 |
|
| 2 |
720001 |
725000 |
1444432 |
|
| 1 |
995001 |
1000000 |
1000000 |
|
| 1 |
1440001 |
1445000 |
1444433 |
|
| 1 |
1995001 |
2000000 |
2000000 |
|
| ------------------ |
|
------------------ |
|
| 1209 |
|
10000000 |
|
| ========== |
|
========== |
|
|
| Categories of |
|
Number of |
Shares |
Percentage |
|
| Shareholders |
|
Shareholders |
Held |
|
|
|
|
| Individual |
|
1196 |
3 909 135 |
39.09 |
|
| Investment
Companies |
|
2 |
1 444 432 |
14.44 |
|
| Joint
Stock Companies |
|
11 |
4 646 433 |
46.46 |
|
|
|
------------------ |
------------------ |
------------------ |
|
| Total |
|
1209 |
10 000 000 |
100.00 |
|
|
========== |
========== |
========== |
|
|
|
|
|
|
|
ABDUL GHAFFAR |
|
|
|
(COMPANY SECRETARY) |
|
|
|
|
|
|
|
|
|
|
|
|
