| InterAsia Leasing Company Limited |
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| Annual
Report 1999 |
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| CONTENTS |
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| Company
Information |
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| Directors'
Report and Review |
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| Notice
of Meeting |
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| Auditor's
Report |
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| Balance Sheet |
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| Profit
and Loss Account |
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| Cash
Flow Statement |
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| Notes
to the Accounts |
|
| Pattern
of shareholding |
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| CORPORATE
INFORMATION |
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|
| Board
of Directors |
Mr. Muhammad Younas Khan |
Chairman |
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|
Mr. Jameel ur Rehman |
Chief Executive |
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|
Mr. Talha Qureshi |
Director |
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|
Mr. Muhammad Azam Khan |
Director |
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|
Ms. Parveen A. Malik |
(Nominee of Saudi Pak
Industrial & |
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|
Agricultural Investment
Co. (Pvt) Ltd,) |
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|
Mr. Abdul Qudus Siddiqi |
Director |
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|
Mr. Hashim Ishaq |
Director |
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| Company
Secretary |
Salman Rashid, (ACMA) |
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| Bankers |
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Gulf Commercial Bank Ltd. |
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|
Crescent Investment Bank
Ltd, |
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Bank of Khyber |
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First Women Bank Ltd, |
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Trust Investment Bank
Ltd. |
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| Legal Advisors |
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Ahmer Bilal Soofi,
Advocates & Solicitors |
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| Auditors |
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Khalid Majid Husain
Rahman, Chartered Accountants, |
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| Registrar
and Share |
Universal Management
Services (Ptv) Ltd. |
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| Transfer Office |
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Room No. 205, 2nd Floor,
Central Hotel Building, |
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Civil Lines, Karachi,
Pakistan |
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Phone: 5654037 |
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| Registered
Office/ |
101, 82 -East, Fazal ul
Haq Road, F-7/G-7, Blue Area |
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| Head Office |
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Islamabad - 44000,
Pakistan. |
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Phone: (92 51) 206731
-206272 |
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Fax: (92 51) 201380 |
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| Liaison
Office Lahore: |
Room No. 1, 3rd Floor,
Leeds Centre, |
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11-E-2, Main Boulevard,
Lahore, |
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Phone: (92 42) 5717295-
96 |
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Fax: (92 42) 5717297 |
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| DIRECTORS'
REPORT AND REVIEW BY THE CHAIRMAN |
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| The
Board of Directors of InterAsia Leasing Company Limited presents the Seventh
Annual Report along with |
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| the
Annual Audited Accounts of the Company for the year ended June 30, 1999. |
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|
| STATE
OF ECONOMY |
|
| The
year under review was once again a very difficult year for the financial
sector in general and leasing sector |
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| in
particular. The real GDP recorded a decline from 4.3% to 3.1%. This resulted
from poor performance of |
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| agriculture
sector coupled with weaker performance of manufacturing and services sectors.
The agricultural |
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| sector
grew by a mere 0.35% whereas manufacturing and services sector registered a
growth of 4,7% and |
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| 4.1%,
respectively. The commodity-producing sector has registered a growth of 2.1%
as compared to 5.3% of |
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| last
year. The government continued to resort to deficit financing. The debt
burden also increased. The much |
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| needed
structural reform of the economy was not implemented. The foreign exchange
reserves remained under |
|
| pressure.
Also the uncertainty that prevailed due to nuclear detonation dampened the
economic growth |
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| resulting
in slowing the demand for credit. Consequently, the leasing activity also
remained subdued as a result |
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| of
uncertain economic environments. |
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|
| PERFORMANCE
REVIEW |
|
| Your
company continued to adopt a conservative approach towards lending and
maximum effort was put in |
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| towards
the recovery. As a result of that new investment in leases for the year was
Rs. 95.7 million being 11.4% |
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| less
than last year. On the other hand recovery from investment in leases was to
the tune of Rs. 138 million, |
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| which
was 57% more than that of last year. The management was able to keep a check
on administrative and |
|
| operating
expenses which were reduced by 7.26% as compared to last year, However,
financial expenses were |
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| 2.75%
higher as compared to prior year, owing mainly to higher markup rates for the
year. |
|
|
| The
lease portfolio continued to remain well diversified with the major
concentration of risk of 19.03% in sugar |
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| and
allied industries. The average lease size also remained on the lower side. |
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| Financial
Results |
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| Net
Investment in Leases |
|
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|
Rs. 230,924,864 |
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| Revenue |
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|
Rs. 53,671,702 |
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| Expenditure |
|
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|
Rs. 45,919,031 |
|
| Provisions
for potential lease losses |
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|
Rs. 37,714,190 |
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| Provision
for diminution in the |
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|
|
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| value
of investments (marked to market) |
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|
Rs. 17,158,201 |
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| Provision
for taxation- deferred |
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| and current |
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|
Rs. 9,378,582 |
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| Loss after tax |
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|
Rs. 56,498,302 |
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| The
new management ushered in the fall of 1999 was immediately entrusted with the
responsibility of taking out |
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| annual
audited accounts for the financial year 1998 99, After a careful analysis the
management decided to |
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| consolidate
the position of your company by making prudent provisioning on investments
made in leases and |
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| listed
securities, As a result the equity of the company was adversely affected. Due
to the requirements of |
|
| International
Accounting Standard (IAS) No. 12, the Securities and Exchange Commission of
Pakistan adopted |
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| the
IAS on September 10, 1999 under its circular No. 16. Therefore it became
mandatory for each leasing |
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| company
to make a provision for deferred taxation. You will observe that this new
requirement has further |
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| worsened
the position of the profit of the company. |
|
|
| As
a result of provisions made on lease investments the lease portfolio of your
company has become clean and |
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| performing
to a large extent, Another major provision of Rs. 17.15 million was made on
investment in shares of |
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| listed
securities. The investment comprises securities of Bankers Equity Limited at
a cost of Rs, 15 million |
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| (approx).
Although the investment is classified as long-term, yet the management felt
that it is prudent to make |
|
| provision
on that investment owing to the diminution in the market value of this stock, |
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|
| CHANGE
IN DIRECTORSHIP |
|
| Rauf
B. Kadri, Ashfaq Tola, Inam-ul Haq, Haroon Sharif, Naveed A, Khan, M, Aslam
tendered their resignation |
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| as
directors of the company. The new board includes Muhammad Younas Khan, Jameel
ur Rehman, Hashim |
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| Ishaq,
Abdul Quddus Siddiqi, Talha Qureshi, Muhammad Azam Khan and Ms, Parveen
Malik, Nominee of Saudi |
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| Pak.
The new board brings with it decades of in-depth experience in banking,
financial sector and management, |
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| This
augurs well for the future of the company. |
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|
| ORGANIZATIONAL
CHANGES |
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| Mr.
Jameel ur Rehman, CEO a fellow of the Institute of Chartered Accountants in
England & Wales and the |
|
| Institute
of Chartered Accountants of Pakistan is well experienced in financial matters
and modern |
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| management.
He brings with him well diversified experience. Mr. Muhammad Younas Khan,
chairman, is fellow |
|
| of
the Institute of Chartered Accountants in England & Wales and fellow of
the Institute of Bankers, Pakistan. |
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| Your
Chairman has a rich experience in international banking in multinational
environment, He also brings with |
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| him
deep understanding of Pakistan's economy, financial sector and business
environment. He is well |
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| connected
in Government, Private and Public sector. The management philosophy is target
oriented and well |
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| focussed.
All areas of business have been evaluated and proper procedures, checks and
balances are being |
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| introduced
where ever necessary. The COl rates and lending rates have been rationalized
meeting the current |
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| rate
scenario of the country. |
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|
| Y2K
COMPLIANCE |
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| You
will be pleased to know that the company has upgraded its I.T both in terms
of hardware and software and |
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| became
fully compliant to Y2K. |
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| FUTURE
OUTLOOK |
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| The
consolidation of the operations, implementation of prudent credit and
business policies coupled with |
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| modern
management techniques will take the company to sound health. The board of
directors and |
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| management
will do their best to produce good results in the future years. However, much
will also depend on |
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| the
economic environment of the country. The shareholders will have to be a
little patient. We are hopeful that |
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| the
steps taken now for the good of the company will enhance shareholders value
in future. |
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| AUDITORS |
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| The
auditors, M/s Khalid Majid Hussain Rehman, Chartered Accountants, retire and
being eligible offer |
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| themselves
for reappointment. |
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| ACKNOWLEDGMENT |
|
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| The
board takes the opportunity of thanking the management and staff for their
dedication and hard work in |
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| trying
circumstances. Thanks to the shareholders for their patience and
understanding, and to the Securities |
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| and
Exchange Commission of Pakistan for their guidance and support. |
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|
For and on behalf of |
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|
the Board of Directors |
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-sd- |
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| Islamabad |
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|
Muhammad Younas Khan |
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| January 20, 2000 |
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|
Chairman |
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| NOTICE
OF THE MEETING |
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| Notice
is hereby given that Seventh Annual General Meeting of INTERASIA LEASING
COMPANY LIMITED |
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| will
be held at Meeting Room No. 57, Hotel Holiday Inn, 0/6, Civic Centre,
Islamabad, on Tuesday, February 22, |
|
| 2000
at 11 A.M. to transact the following business. |
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| ORDINARY
BUSINESS |
|
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| 1.
To confirm the Minutes of the Sixth Annual General Meeting held on December
31, 1998, |
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|
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| 2.
To receive, consider and adopt the audited accounts of the Company for the
period ended June |
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| 30,
1999 together with the Directors' and auditors' report thereon. |
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| 3.
To appoint Auditors for the year 1999-2000 and fix their remuneration. The
present auditors, M/s |
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| Khalid
Majid Husain Rehman, Chartered Accountants retire and being eligible, offer
themselves |
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| for
reappointment. |
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| 4.
To transact any other business with the permission of the Chair, |
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By order of the Board |
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|
SALMAN RASHID |
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| Islamabad;
January 29, 2000 |
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|
Company Secretary |
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| NOTES: |
|
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| 1.
The Register of Members of the Company will remain closed from February 15,
2000 to February 21, |
|
| 2000
(both days inclusive) |
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|
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| 2.
A member entitled to attend and vote at the meeting is entitled to appoint a
proxy to attend and |
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| vote
for him/her. A proxy need not to be a member of the Company, |
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|
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|
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| 3.
An instrument of proxy and the Power of Attorney or other authority (if any)
under which it is signed, |
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| or
a notarially certified copy of such power of attorney, in order to be valid
must be deposited at the |
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| registered
office of the Company not less than 48 hours before the time of the meeting. |
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|
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| 4.
Members are advised to lodge shares for transfer at the office of our
Registrar, Universal |
|
| Management
Services (Pvt) Ltd, Room No. 205-Central Hotel, Civil Lines, Karachi |
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| Tel.
No. 5654037. |
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| 5.
Members are requested to notify any change in addresses immediately. |
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| AUDITOR'S
REPORT TO THE MEMBERS |
|
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| We
have audited the annexed balance sheet of InterAsia Leasing Company Limited
as at June 30, 1999 |
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| and
the related profit and loss account and cash flow statement, 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 accounts have been kept by the Company as
required by the |
|
| Companies
Ordinance, 1984; |
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|
|
|
|
| b)
in our opinion: |
|
|
|
|
|
|
| (i)
The balance sheet and profit and loss account together with the notes thereon
have been |
|
| drawn
up in conformity with the Companies Ordinance, 1984, and are in agreement
with |
|
| the
books of account and are further in accordance with accounting policies
consistently |
|
| applied; |
|
|
|
|
|
|
| (ii)
The expenditure incurred during the year was for the purposes 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 accordance with the objects of the Company; |
|
|
| c)
in our opinion and to the best of our information and according to the
explanations given to us, the |
|
| balance
sheet, the profit and loss account and the cash flow statement, 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 loss and the cash flow statement 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 central Zakat fund established under section
7 of that |
|
| ordinance. |
|
|
|
|
| Without
qualifying our opinion we draw attention to the note 12 of the financial
statements. |
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|
|
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|
KHALID MAJID HUSAIN RAHMAN |
|
| Islamabad,
January 26, 2000 |
|
Chartered Accountants |
|
|
|
| BALANCE
SHEET AS AT JUNE 30, 1999 |
|
|
|
|
June 30, |
June 30, |
|
|
|
1999 |
1998 |
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|
Note |
(RUPEES) |
(RUPEES) |
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| SHARE
CAPITAL AND RESERVES |
|
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| Authorised
Capital |
|
|
|
|
|
|
| 20,000,000
ordinary |
|
|
200,000,000 |
200,000,000 |
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| shares
of Rs. 10/- each |
|
|
========== |
========== |
|
|
|
|
| Issued,
subscribed and paid up capital |
|
|
|
|
|
| 10,000,000
ordinary shares of |
|
|
100,000,000 |
100,000,000 |
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| Rs.
10/- each fully paid in cash |
|
|
|
|
|
|
| Revenue
reserves |
|
|
|
| Statutory |
|
|
13,759,493 |
13,759,493 |
|
| General |
|
|
10,000,000 |
10,000,000 |
|
| Contingencies |
|
3 |
3,339,892 |
3,339,892 |
|
| Un-appropriated
profit |
|
|
(49,800,222) |
6,698,080 |
|
|
|
|
------------------ |
------------------ |
|
|
25 |
77,299,163 |
133,797,465 |
|
|
|
|
|
|
| DEFERRED
LIABILITY |
|
4 |
9,081,878 |
-- |
|
| LONG
TERM DEPOSITS |
|
5 |
35,961,381 |
42,655,868 |
|
|
|
|
|
| LONG
TERM CERTIFICATES OF |
|
|
|
| INVESTMENTS |
|
6 |
3,562,375 |
62,510,000 |
|
|
|
|
|
| LONG
TERM FINANCES |
|
7 |
8,146,401 |
17,728,401 |
|
|
|
|
|
| CURRENT
LIABILITIES |
|
|
|
| Current
portion of Long Term Deposits |
|
|
18,534,100 |
15,937,645 |
|
| Current
portion of Certificates of Investment |
|
|
77,763,410 |
14,266,800 |
|
| Current
maturity of Long Term Finances |
|
|
10,082,000 |
14,546,000 |
|
| Finance
Under Markup arrangements |
|
8 |
78,965,305 |
85,481,336 |
|
| Accrued
& Other Liabilities |
|
9 |
39,190,799 |
41,984,042 |
|
| Dividend
Payable |
|
|
550,006 |
11,010,229 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
225,085,620 |
183,226,052 |
|
|
|
|
| CONTINGENCIES
AND COMMITMENTS |
|
10 |
-- |
-- |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
359,136,818 |
439,917,786 |
|
|
|
|
========== |
========== |
|
|
| OPERATING
FIXED ASSETS |
|
|
|
| -TANGIBLE |
|
11 |
2,602,878 |
3,645,171 |
|
|
|
|
|
| NET
INVESTMENT IN LEASES |
|
12 |
|
|
|
|
| Minimum
lease payment receivable |
|
|
375,659,630 |
417,147,817 |
|
| Add:
Residual value of leased Assets |
|
|
54,324,985 |
58,593,513 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
429,984,615 |
475,741,330 |
|
| Less:
Unearned Lease Income |
|
|
(138,125,915 |
(141,752,108) |
|
|
|
|
------------------ |
------------------ |
|
| Net
Investment In Leases |
|
|
291,858,700 |
333,989,222 |
|
| Less:
Current portion of net |
|
|
|
|
| investment
in leases |
|
|
(60,933,836) |
(85,204,774) |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
230,924,864 |
248,784,448 |
|
|
|
|
|
| LONG
TERM INVESTMENTS |
|
13 |
22,014,411 |
40,353,608 |
|
|
|
|
|
|
| LONG
TERM DEPOSITS |
|
|
393,070 |
188,070 |
|
|
|
|
|
|
| DEFERRED
COSTS |
|
14 |
1,157,491 |
2,078,198 |
|
|
|
|
|
| CURRENT
ASSETS |
|
|
|
|
| Current
portion of net investment in lease |
|
15 |
60,933,836 |
85,204,774 |
|
| Advances,
Prepayments & Other |
|
|
|
| Receivables |
|
16 |
34,252,474 |
54,729,992 |
|
| Cash
and bank balances |
|
17 |
6,857,794 |
4,933,525 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
102,044,104 |
144,868,291 |
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
359,136,818 |
439,917,786 |
|
|
|
|
========== |
========== |
|
| The
annexed notes form an integral pad of these financial statements. |
|
|
-Sd- |
|
|
-Sd- |
|
|
Chief Executive |
|
|
Director |
|
|
|
|
|
| PROFIT
AND LOSS ACCOUNT FOR THE PERIOD ENDED JUNE 30, 1999 |
|
|
|
|
June 30, |
June 30, |
|
|
|
1999 |
1998 |
|
|
Note |
(RUPEES) |
(RUPEES) |
|
|
|
|
| REVENUES |
|
|
|
|
| Income
from leasing operations |
|
18 |
59,356,023 |
62,078,422 |
|
| Income/(Loss)
from Investments |
|
19 |
-- |
(1,998,770) |
|
| Other income |
|
20 |
(5,684,321) |
692,382 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
53,671,702 |
60,772,034 |
|
|
|
|
| EXPENSES |
|
|
|
| Administrative
& operating expenses |
|
21 |
10,332,366 |
11,141,898 |
|
| Financial
Charges |
|
22 |
35,586,665 |
34,633,299 |
|
|
|
|
------------------ |
------------------ |
|
|
|
45,919,031 |
45,775,197 |
|
|
|
------------------ |
------------------ |
|
| Profit/(Loss)
before provisions |
|
7,752,671 |
14,996,837 |
|
| Provision
for diminution in value of Investments |
|
|
17,158,201 |
-- |
|
| Provision
for Potential lease losses |
|
16.3 |
37,714,190 |
463,881 |
|
|
|
|
------------------ |
------------------ |
|
| Profit/(Loss)
before Taxation |
|
|
(47,119,720) |
14,532,956 |
|
|
|
|
| Provision
for taxation |
|
|
|
| Current |
|
26.1 |
296,704 |
313,448 |
|
| Deferred |
|
26.2 |
9,081,878 |
-- |
|
|
|
|
------------------ |
------------------ |
|
| Profit/(Loss)
after taxation |
|
(56,498,302) |
14,219,508 |
|
| Un-appropriated
profit brought forward |
|
6,698,080 |
5,524,716 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
49,800,222 |
19,744,224 |
|
|
|
|
|
| Appropriation: |
|
|
|
| Transfer
to statutory reserve |
|
|
-- |
2,843,902 |
|
| Transfer
to contingencies reserve |
|
|
-- |
202,242 |
|
| Proposed
dividend |
|
|
-- |
10,000,000 |
|
|
|
|
------------------ |
------------------ |
|
|
-- |
13,046,144 |
|
|
|
|
------------------ |
------------------ |
|
| Un-appropriated
profit/(Loss) carried to balance sheet |
|
(49,800,222) |
6,698,080 |
|
|
|
|
========== |
========== |
|
|
|
-Sd- |
|
|
-Sd- |
|
|
Chief Executive |
|
Director |
|
|
|
| CASH
FLOW STATEMENT FOR THE PERIOD FROM JULY 01, 1998 TO JUNE 30, 1999 |
|
|
|
|
June 30, |
June 30, |
|
|
|
1999 |
1998 |
|
|
|
(RUPEES) |
(RUPEES) |
|
| CASH
FLOWS FROM OPERATING ACTIVITIES |
|
|
| Net
profit/(Loss) after taxation |
|
(56,498,302) |
14,219,508 |
|
| Adjustments
for: |
|
|
|
|
| Depreciation |
|
990,464 |
1,024,163 |
|
| Deferred
costs amortized |
|
920,707 |
1,675,846 |
|
| (Income)loss
from investments |
|
-- |
1,998,770 |
|
| (Gain)/loss
on sale of fixed assets |
|
1,609 |
32,439 |
|
| Provision
for deferred tax |
|
9,081,878 |
-- |
|
| Provision
for diminution in value of investments |
|
17,158,201 |
-- |
|
|
|
------------------ |
------------------ |
|
| Operating
profit/(loss) before working capital changes |
|
(28,345,443) |
18,950,726 |
|
|
|
|
| Decrease
in advances, prepayments and other receivables |
|
20,477,518 |
(20,094,708) |
|
| Decrease
in investment in leases |
|
(95,728,734) |
(108,051,028) |
|
| Recoveries
from investment in leases |
|
137,859,256 |
87,826,851 |
|
| Increase
in long term deposits received |
|
450,953 |
4,727,490 |
|
| Increase/(decrease)
in accrued and other liabilities |
|
(2,793,243) |
4,682,047 |
|
| Increase
in long term deposits |
|
(205,000) |
-- |
|
|
|
------------------ |
------------------ |
|
| Cash
generated from operations |
|
|
|
60,060,750 |
(30,909,348) |
|
|
|
|
|
------------------ |
------------------ |
|
| Net
cash generated/(used)in operating activities |
|
|
31,715,307 |
(11,958,622) |
|
|
|
------------------ |
------------------ |
|
|
|
|
|
| CASH
FLOWS FROM INVESTING ACTIVITIES |
|
|
|
| Increase
in deferred cost |
|
|
|
-- |
(135,000) |
|
| Purchase
of fixed assets |
|
|
|
(410,850) |
(2,440,631) |
|
| Proceeds
from sale of fixed assets |
|
|
|
461,070 |
966,157 |
|
| (Increase)/Decrease
in long term investments |
|
|
1,180,996 |
2,149,920 |
|
| Income/(loss)
from investments |
|
|
|
-- |
(1,998,770) |
|
| Dividend Paid |
|
|
|
(10,460,223) |
(11,648,737) |
|
|
|
|
|
------------------ |
------------------ |
|
| Net
cash generated/(used) in investing activities |
|
|
(9,229,007) |
(13,107,061) |
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
|
| CASH
FLOWS FROM FINANCING ACTIVITIES |
|
|
|
| Finances
under mark-up arrangements |
|
|
(20,562,031) |
24,893,958 |
|
|
|
|
|
------------------ |
------------------ |
|
| Net
cash generated/(used)in financing activities |
|
|
(20,562,031) |
24,893,958 |
|
|
|
------------------ |
------------------ |
|
|
|
|
|
| NET(DECREASE)/INCREASE
IN CASH AND |
|
|
|
| CASH
EQUIVALENTS |
|
|
|
1,924,269 |
(171,725) |
|
| CASH
AND CASH EQUIVALENTS AT JULY 01, |
|
|
4,933,525 |
5,105,250 |
|
| CASH
AND CASH EQUIVALENTS AT JUNE 30, 1999 |
|
------------------ |
------------------ |
|
| AND
JUNE 30, 1998 RESPECTIVELY |
|
|
6,857,794 |
4,933,525 |
|
|
|
|
|
========== |
========== |
|
|
|
-Sd- |
|
|
-Sd- |
|
|
Chief Executive |
|
|
Director |
|
|
|
| NOTES
TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 1999 |
|
|
| 1.
THE COMPANY AND ITS OPERATIONS |
|
| The
Company was incorporated in Pakistan on November 30, 1992, as a public
limited company and is |
|
| listed
on the Karachi and Islamabad Stock Exchanges. The licence to carry on leasing
business was |
|
| granted
on April 26, 1993 and the certificate of commencement of business was
obtained on May 2, |
|
| 1993.
The main business activity of the Company is leasing. |
|
|
|
|
| 2.
SIGNIFICANT ACCOUNTING POLICIES |
|
|
|
| 2.1
Overall valuation policy |
|
|
| These
financial statements have been prepared under the historical cost convention, |
|
|
| 2.2
Revenue recognition |
|
|
|
|
|
|
| 2.2.1 Lease |
|
| The
Company follows "financial method" in accounting for recognition of
lease |
|
| income,
Accordingly unearned lease income is taken over the term of the lease, |
|
| starting
from the period in which the lease is executed, so as to produce a constant |
|
| return
on the net investment in the lease. |
|
|
| Front
end fee, commitment fee and other commissions are taken to income when
realised. |
|
|
| 2.2.2
Investments |
|
| Dividend
income is recognised when the right to receive payment is established. |
|
| Gain/profit
on trading of investments are taken to income when it is realised. |
|
|
| 2.2.3 Other |
|
|
|
| Other
income is recognised when earned. |
|
|
|
| 2.3
Operating fixed assets-tangible and depreciation |
|
|
| Operating
assets are stated at cost less accumulated depreciation. Depreciation is
charged to |
|
| income
applying the straight line method. In respect of additions and deletions of
assets during |
|
| the
year, depreciation is charged proportionately from/to the month of
acquisition and deletion |
|
| respectively. |
|
|
|
|
|
|
| Major
extensions, renewals and improvements are capitalised. |
|
|
|
| Maintenance
and minor improvements are charged to income as and when incurred, Gains |
|
| and
losses on disposal of fixed assets are included in current income. |
|
|
|
|
| 2.4 Investments |
|
|
|
| 2.4.1
Long term investments are carried at cost. Provision is made for permanent
diminution |
|
| in
value of investments, if any. |
|
|
|
|
| 2.4.2
Short term investments are valued at the lower of average cost and market
value |
|
| determined
on an aggregate portfolio basis in total, using Karachi Stock Exchange |
|
| quotations. |
|
|
|
|
| 2.5 Taxation |
|
|
|
|
|
|
| 2.5.1 Current |
|
|
|
| Provision
is made on taxable income at the prevailing rates of taxation after taking
into |
|
| account
tax credits available, if any. |
|
|
|
| 2.5.2 Deferred |
|
|
|
| The
Company accounts for deferred taxation using the liability method on timing |
|
| differences
likely to reverse in the foreseable future. |
|
|
|
|
|
| 2.6
Deferred costs |
|
|
|
| Deferred
costs are amortised during the period not exceeding five years from the year
of |
|
| incurrence
thereof. |
|
|
|
|
| 2.7
Employees' retirement benefits |
|
|
|
| The
Company operates a contributory provident fund under a separate trust for all
its |
|
| permanent
employees and contributions are recorded monthly in accordance with the fund |
|
| rules. |
|
|
|
|
| 3.
CONTINGENCIES RESERVE |
|
| This
is a reserve created at 1% of Minimum Lease Payment Receivable as of balance
sheet |
|
| date
to meet any contingencies that may arise on lease rentals receivable. |
|
|
| 4.
DEFERRED LIABILITY |
|
|
|
| This
represents deferred tax liability as explained in note 26.2. |
|
|
|
|
June 30, |
June 30, |
|
|
|
1999 |
1998 |
|
|
|
Rupees |
Rupees |
|
|
|
|
| 5.
LONG TERM DEPOSITS |
|
|
| Security
deposits (note 5.1) |
|
54,495,481 |
58,593,513 |
|
| Less:
Current portion |
|
(18,534,100) |
(15,937,645) |
|
|
|
------------------ |
------------------ |
|
|
|
|
35,961,381 |
42,655,868 |
|
|
|
|
|
========== |
========== |
|
|
| 5.1
These represent interest free security deposits received from lessees under
lease contracts |
|
| and
are repayable/adjustable at the expiry of the respective lease period. |
|
|
|
|
|
|
|
June 30, |
June 30, |
|
|
|
|
|
1999 |
1998 |
|
|
|
|
|
Rupees |
Rupees |
|
|
|
|
| 6.
LONG TERM CERTIFICATES OF |
|
|
| INVESTMENTS |
|
|
|
| Certificates
of investments |
|
(note 6.1) |
81,325,785 |
76,776,800 |
|
| Less:
Current portion |
|
|
(77,763,410) |
(14,266,800) |
|
|
|
|
------------------ |
------------------ |
|
|
|
3,562,375 |
62,510,000 |
|
|
|
|
|
========== |
========== |
|
|
|
|
| 6.1
These are registered PLS certificates of investments, issued for the periods
from three months |
|
| to
three years with the facility of pro-mature encashment after minimum three
months. The |
|
| mark-up
rate range, from 17.25% to 23.5% per annum depending upon the period of
maturity. |
|
|
|
|
| 7.
LONG TERM FINANCES. SECURED |
|
|
| CASH
FINANCE |
|
|
|
| Crescent
Investment Bank |
|
(note 7.1) |
3,000,000 |
10,000,000 |
|
| Bankers
Equity Ltd. |
|
(note 7.2) |
9,398,401 |
13,108,401 |
|
| Gulf
Commercial Bank Ltd. |
|
(note 7.3) |
5,830,000 |
9,166,000 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
18,228,401 |
32,274,401 |
|
| Less:
Current maturity of long term finances |
|
|
(10,082,000) |
(14,546,000) |
|
|
|
|
------------------ |
------------------ |
|
|
|
8,146,401 |
17,728,401 |
|
|
|
========== |
========== |
|
|
| 7.1
This facility carries mark-up at the rate of 21% per annum. The repayment is
on monthly |
|
| installments
and is secured by way of hypothecation of specific moveable leased assets and |
|
| related
specific book debt, promissory note and discounting agreement of Rs.
11,843,972 |
|
| respectively.
This facility will mature in September 1999. |
|
|
|
|
|
|
| 7.2
This represents two lines of credit amounting to Rs. 7,986,154 and Rs.
1,412,247 from an |
|
| investment
bank and carries mark-up at the rate of 21.5% and 23.5% respectively. This
facility |
|
| is
secured against endorsement of promissory notes and first charge on leased
assets in |
|
| favour
of the bank. These facilities will mature on October 06, 2001 and January 11,
2002 |
|
| respectively. |
|
|
|
|
| 7.3
This facility represents a term finance facility for a period of three years
and carries mark-up at |
|
| the
rate of 20.5% per annum payable quarterly. The facility is secured by way of
registered |
|
| hypothecation
charge of specific leased assets amounting to Rs. 14 million. This facility
will |
|
| mature
on December 30, 2000. |
|
|
|
|
|
|
|
June 30, |
June 30, |
|
|
|
|
1999 |
1998 |
|
|
|
|
Rupees |
Rupees |
|
|
|
|
| 8.
FINANCE UNDER MARK-UP |
|
|
|
| ARRANGEMENT
- SECURED |
|
|
|
| Running
finance |
|
(Note 8.1) |
12,283,792 |
19,200,945 |
|
| Cash finances. |
|
(Note 8.2) |
|
|
| Bank of Khyber |
|
(8.2.1) |
5,000,000 |
5,000,000 |
|
| Saudi
Pak Industrial & |
|
|
|
|
| Agricultural
Investment Co. (Pvt) Ltd. |
|
(8.2.2) |
2,000,000 |
5,000,000 |
|
| Fidelity
Investment Bank Ltd, |
|
|
-- |
10,000,000 |
|
| Pak
Libya Holding Company Ltd. |
|
|
-- |
9,000,000 |
|
| English
Leasing Company Ltd. |
|
(8.2.3) |
10,000,000 |
10,000,000 |
|
| Trust
Investment Bank Limited |
|
(8.2.4) |
25,000,000 |
-- |
|
| Musharika
Financing |
|
|
(Note 8.3) |
|
|
| First
Ibrahim Morabaha |
|
-- |
5,000,000 |
|
| Trust
Investment Bank Ltd. |
|
(8.3.1) |
24,681,513 |
20,280,391 |
|
| Other |
|
-- |
2,000,000 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
78,965,305 |
85,481,336 |
|
|
|
|
========== |
========== |
|
|
| 8.1
The Company has obtained a running finance facility from Gulf Commercial Bank
Ltd. |
|
| (Formerly
Schon Bank Ltd.) of Rs. 15.00 million under mark-up arrangement and is
secured by |
|
| first
hypothecation charge of Rs. 26.7 million over specific lease assets of the
company and |
|
| related
receivables. This facility carries mark-up at the rate of 20.50% per annum
payable |
|
| quarterly.
The total finance and mark-up is repayable by October 31, 1999. |
|
|
|
| 8.2
Cash finance |
|
|
| 8.2.1
This represent demand finance facility and carries mark-up at the rate of 20%
per |
|
| annum
with markup payable quarterly, and is secured by way of hypothecation of |
|
| leased
assets valuing Rs. 6.7 million. This facility will mature on May 2000. |
|
|
|
|
| 8.2.2
This represents discounting facility and carries mark-up at the rate of 20%
per annum. |
|
| The
principal and markup is payable monthly. This facility is secured by way of
pari |
|
| passu
charge to the extent of Rs. 10 million on specific assets of the company and |
|
| assignment
of lease rentals. This facility is repayable in monthly equal installments |
|
| and
will be maturing in October 1999. |
|
|
|
|
| 8.2.3
This represents a short-term facilities of Rs 5 million each for a period of
45 days and |
|
| carries
mark-up at the rate of 19.50% per annum & 19.60% per annum respectively |
|
| payable
on maturity. These facilities will mature in July 1999. |
|
|
| 8.2.4
This represents short-term facility of Rs. 5 million and Rs. 20 million each
for a |
|
| period
of three months and six months carrying mark-up at the rate of 20.65% per |
|
| annum
and 20.40% per annum respectively payable on maturity. These facilities will |
|
| be
maturing on August and September 1999 respectively. |
|
|
| Musharika
financing |
|
|
| 8.3.1
This represents Musharika Investment Agreement carrying profit at the rate of
21% |
|
| per
annum payable half yearly. The facility will mature in July 1999. |
|
|
|
|
|
|
June 30, |
June 30, |
|
|
|
|
1999 |
1998 |
|
|
|
|
Rupees |
Rupees |
|
|
|
|
|
| 9.
ACCRUED AND OTHER LIABILITIES |
|
|
| Accrued
liabilities |
|
|
124,000 |
112,948 |
|
| Accrued
financial charges-secured finances |
|
|
9,957,025 |
9,461,291 |
|
| Advance
front - end fee and commission |
|
|
167,911 |
939,299 |
|
| Provision
for taxation |
|
|
982,358 |
985,654 |
|
| Tax
Payable - deducted at source |
|
|
629,752 |
477,793 |
|
| Payable
to lossee's |
|
|
4,602,850 |
3,217,271 |
|
| Other Payables |
|
|
2,584,509 |
2,928,780 |
|
| Payable
to associated undertakings |
|
|
20,142,394 |
23,861,006 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
39,190,799 |
41,984,042 |
|
|
|
|
========== |
========== |
|
|
| 10.
CONTINGENCIES AND COMMITMENTS |
|
|
|
| There
were no contingencies and capital commitments as at the end of the year. |
|
|
| 11.
OPERATING FIXED ASSETS-TANGIBLE |
|
|
(Amount in Rupees) |
|
|
COST |
|
RATE |
|
DEPRECIATION |
|
WDV |
|
| DESCRIPTION |
AS AT July 01, |
ADDITIONS |
DELETIONS |
AS AT June 30, |
% |
AS AT July 01, |
TOTAL FOR |
AS AT June 30, |
AS AT June 30, |
|
1998 |
|
|
1999 |
|
1998 |
THE YEAR |
1999 |
1999 |
|
| LEASE
HOLD IMPROVEMENTS |
566,564 |
48,250 |
-- |
614,814 |
10.00% |
178,949 |
56,656 |
235,605 |
379,209 |
| ELECTRIC
FITTINGS |
78,116 |
2,100 |
-- |
80,216 |
10.00% |
33,356 |
7,830 |
41,186 |
39,030 |
| EQUIPMENT |
|
2,036,731 |
12,580 |
33,000 |
2,016,311 |
20.00% |
987,907 |
405,326 |
1,370,642 |
645,669 |
| FURNITURE
AND FIXTURES |
675,907 |
10,920 |
-- |
686,827 |
10.00% |
231,372 |
68,340 |
299,712 |
387,115 |
| VEHICLES |
|
2,551,997 |
337,000 |
521,850 |
2,367,147 |
20.00% |
832,560 |
452,312 |
1,215,292 |
1,151,855 |
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
| 1999 |
|
5,909,315 |
410,850 |
554,850 |
5,765,315 |
|
2,264,144 |
990,464 |
3,162,437 |
2,602,878 |
|
|
========== |
========== |
========== |
========== |
========== |
========== |
========== |
========== |
========== |
| 1998 |
|
4,892,409 |
2,440,631 |
1,423,725 |
5,909,315 |
|
1,665,110 |
1,024,163 |
2,264,144 |
3,645,171 |
|
========== |
========== |
========== |
========== |
========== |
========== |
========== |
========== |
========== |
|
| 11.1 Deletions |
|
|
| The
following assets were sold during the year: |
|
|
|
(Amount in
Rupees) |
|
|
| Description |
|
Cost |
Accumulated |
Book |
Sale |
Gain/ |
Sold to |
|
Mode |
|
|
|
|
depreciation |
value |
proceeds |
(Loss) |
|
|
| Vehicles |
|
| Suzuki Margalla |
|
521,850 |
69,580 |
452,270 |
452,270 |
-- |
Banker's Equity Ltd. |
Negotiation |
|
|
|
|
|
|
|
| Office
Equipment |
|
|
|
| Mobile Phone |
|
11,500 |
5,750 |
5,750 |
5,000 |
(750) |
G. Ali |
|
Negotiation |
|
| Printer |
|
21,500 |
16,841 |
4,659 |
3,800 |
(859) |
Dynamic |
|
Exchanged |
|
|
|
|
Communication Plus |
|
| Electric
Fittings |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
| 1999 |
|
554,850 |
92,171 |
462,679 |
461,070 |
(1,609) |
|
|
|
========== |
========== |
========== |
========== |
========== |
|
| 1998 |
|
1,422,725 |
425,129 |
998,596 |
968,157 |
(32,439) |
|
|
========== |
========== |
========== |
========== |
========== |
|
|
|
|
| 12.
Net Investment in Leases |
|
| The
Company has provided facilities to the below mentioned parties in excess of
twenty percent or more |
|
| of
its paid capital and reserve which is in accordance with requirements of
Statutory Regulatory |
|
| Order
345(1)/96 of Leasing Companies (Established and regulation Rules, 1996). |
|
|
| a.
Kashmir Sugar Mills Limited |
|
| b,
Nimir Industries Limited |
|
| c.
Syed Bhais Lighting Limited |
|
|
|
| 13.
LONG TERM INVESTMENTS |
|
June 30, |
June 30, |
|
|
|
1999 |
1999 |
|
| Number of |
|
Rupees |
Rupees |
|
| Shares/Certi- |
|
|
|
|
| ficates |
Listed modarabas: |
|
|
|
-Associated undertaking |
|
|
|
First Interfund Modaraba |
|
-- |
1,830,751 |
|
|
(Managed by Universal
Management |
|
|
Services (Pvt) Ltd.) |
|
|
|
Certificates of Rupees
10/- each |
|
|
|
|
|
| 445,237 |
Long Term Venture Capital
Modaraba |
|
|
(Managed by National
Technology |
|
|
Development Corporation
Ltd.) |
|
|
|
Certificates of Rupees
5/- each |
|
5,068,395 |
5,068,395 |
|
|
|
|
| 29,992 |
Long Term Venture Capital
Modaraba |
|
|
(Redeemable Capital
Certificates) |
|
1,949,480 |
2,399,360 |
|
|
|
|
|
|
|
(NOTE 13.1) |
7,017,875 |
9,298,506 |
|
|
|
|
|
Listed Companies: |
|
|
|
- Associate undertaking |
|
|
| 810,810 |
Bankers Equity Limited |
|
15,152,602 |
15,152,602 |
|
|
Shares of Rupees 10/-
each (at cost) |
|
|
|
|
|
|
-OTHER |
|
|
| 117,562 |
Medi Glass Company
Limited |
|
|
|
Shares of Rupees 10/-
each (at cost) |
|
752,397 |
752,397 |
|
|
|
|
|
|
|
(NOTE 13.2) |
15,904,999 |
15,904,999 |
|
|
|
|
|
Unlisted: |
|
|
|
|
- Associated undertaking |
|
|
| 1,250,000 |
LTV Housing Finance Ltd. |
|
12,500,000 |
12,500,000 |
|
|
Ordinary shares of |
|
|
|
Rupees. 10/-each (NOTE 13.3) |
|
|
|
|
|
|
-OTHER |
|
|
| 59,536 |
Federal Investment Bonds |
|
4,103,600 |
4,103,600 |
|
|
Return @ 14% per annum |
|
|
|
Payable on half yearly
basis |
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
39,526,474 |
41,807,105 |
|
| Less: |
|
|
|
|
| Provision
for Diminution in value of Investments: (Note 13.4) |
|
(17,512,063) |
(1,453,497) |
|
|
|
|
------------------ |
------------------ |
|
|
|
22,014,411 |
40,353,608 |
|
|
|
|
========== |
========== |
|
|
| 13.1
The aggregate market value of listed modaraba certificates at the end of the
financial year |
|
| amounted
to Rupees. 2,550,550 (1998: Rs. 3,228,018) |
|
|
| 13.2
The aggregate market rate of listed shares at the end of June 30, 1999 is Rs.
3,447,761 (1998: |
|
| Rs.2,903,707) |
|
|
|
|
| 13.3
The aggregate break-up value of the investments at the end of June 30, 1999
is Rs. 11,912,500 |
|
| (1998:
Rs. 11,088,506) based on the un-audited accounts. |
|
|
| Provision
has been made in the annual accounts against diminution in value of long term |
|
| investment
in shares, The provision has been made against the shares of Long Term
Venture |
|
| Capital
Modaraba, Bankers Equity Limited, Medi Glass Company Limited and LTV Housing |
|
| Finance Limited. |
|
|
|
|
|
|
June 30 |
June 30 |
|
|
|
1999 |
1998 |
|
|
|
|
Rupees |
Rupees |
|
| 14.
DEFERRED COSTS |
|
|
|
| Preliminary
expenses |
|
|
-- |
136,921 |
|
| Expenses
on issue of shares |
|
|
|
|
| (including
brokerage, bankers' |
|
|
|
|
| and
underwriters' commission) |
|
|
-- |
286,150 |
|
| Others |
|
|
|
2,078,198 |
3,330,973 |
|
|
|
|
|
------------------ |
------------------ |
|
|
|
2,078,198 |
3,754,044 |
|
| Less:
Amortized during the period |
|
920,707 |
1,675,846 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
1,157,491 |
2,078,198 |
|
|
|
|
========== |
========== |
|
|
|
|
| 15.
CURRENT PORTION OF NET |
|
|
| INVESTMENT
IN LEASES |
|
|
|
|
|
|
| Total
Lease rental receivable during the year amounts to Rs. 107,936,193 out of
which Rs. 60,933,836 |
|
| represents
current maturity of principal portion. The balance amount represents the
financial income |
|
| receivable
by the company against its lease investments during 1999-2000. |
|
|
|
|
|
|
| 16.
ADVANCES, PREPAYMENTS & OTHER RECEIVABLES |
|
| Advances-
considered good |
|
|
|
|
| to
Chief Executive |
|
(note 16.1) |
840,934 |
735,276 |
|
| to staff |
|
|
1,367,022 |
1,652,953 |
|
| Taxation
(deduced at source) |
|
|
2,525,526 |
1,759,159 |
|
| Prepayments |
|
|
702,260 |
14,988 |
|
| Receivables
against sale of investments |
|
(16.2) |
-- |
6,396,115 |
|
| Accrued
return on investments |
|
|
4,175,633 |
2,336,460 |
|
| Others |
|
|
3,809,873 |
2,221,332 |
|
| Rental
receivables |
|
(16.3) |
20,831,226 |
39,613,709 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
34,252,474 |
54,729,992 |
|
|
|
|
========== |
========== |
|
|
| 16.1
Maximum amount due from Chief Executive at the end of any month during the
period |
|
| was
Rupees 0.857 million. This relates to house rent advance to the CEO during
the period.. |
|
| (1998:
0.735 million). |
|
|
|
|
|
|
|
|
|
June 30, |
June 30, |
|
|
|
1999 |
1998 |
|
|
|
Rupees |
Rupees |
|
|
|
|
| 16.2
RECEIVABLES AGAINST SALE OF INVESTMENTS |
|
| Receivable
against sale of investment |
|
|
6,396,115 |
6,396,115 |
|
| Less:
Written off |
|
(6,396,115) |
-- |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
-- |
6,396,115 |
|
|
|
|
|
|
========== |
========== |
|
|
|
|
|
|
| 16.3
RENTAL RECEIVABLES |
|
|
|
| Rental
receivables against leases |
|
|
58,545,416 |
40,077,590 |
|
| Less:
Provision for potential lease losses |
|
(37,714,190) |
(463,881) |
|
|
|
|
------------------ |
------------------ |
|
|
|
20,831,226 |
39,613,709 |
|
|
|
|
========== |
========== |
|
|
|
|
|
| 17.
CASH AND BANK BALANCES |
|
|
| Cash in hand |
|
|
10,988 |
1,911 |
|
| Cash
with banks- Current accounts |
|
6,711,161 |
4,775,544 |
|
|
- PLS accounts |
|
125,645 |
156,070 |
|
|
|
------------------ |
------------------ |
|
|
|
6,857,794 |
4,933,525 |
|
|
|
|
========== |
========== |
|
|
|
|
| 18.
INCOME FROM LEASING OPERATIONS |
|
|
| Income
on lease contracts |
|
58,855,984 |
60,971,544 |
|
| Front-end
fee and documentation charges |
|
500,039 |
1,106,878 |
|
|
|
------------------ |
------------------ |
|
|
|
59,356,023 |
62,078,422 |
|
|
|
|
========== |
========== |
|
|
|
|
|
|
|
| 19.
(LOSS)/INCOME FROM INVESTMENTS |
|
|
| Net
gain/(loss) on sale of listed securities |
|
|
-- |
(1,998,770) |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
-- |
(1,998,770) |
|
|
|
|
|
========== |
========== |
|
|
|
|
|
| 20.
OTHER INCOME |
|
|
|
| Return
on Government Securities |
|
574,000 |
613,356 |
|
| Gain/(Loss)
on disposal of fixed assets |
|
(1,609) |
(32,439) |
|
| Profit
on bank accounts |
|
376 |
9,405 |
|
| Other Income |
|
|
339,027 |
102,060 |
|
| Receivable
written off |
|
(6,596,115) |
-- |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
(5,684,321) |
692,382 |
|
|
|
|
========== |
========== |
|
|
|
|
|
June 30, |
June 30, |
|
|
|
1999 |
1998 |
|
|
|
Rupees |
Rupees |
|
|
|
|
| 21.
ADMINISTRATIVE AND OPERATING EXPENSES |
|
| Salaries,
allowances and benefits |
|
|
5,536,452 |
5,589,611 |
|
| Conveyance
and travelling |
|
|
371,908 |
230,704 |
|
| Rent,
rates and taxes |
|
|
-- |
458,400 |
|
| Electricity,
g as and water |
|
|
156,739 |
131,114 |
|
| Advertisements |
|
|
|
30,500 |
53,800 |
|
| Printing,
stationery and supplies |
|
|
105,539 |
203,313 |
|
| Postage
and courier |
|
|
70,674 |
90,641 |
|
| Fax
and Telephone |
|
|
157,192 |
186,334 |
|
| Newspapers,
books and magazines |
|
11,067 |
17,676 |
|
| Fees
and Subscription |
|
|
907,922 |
832,292 |
|
| Entertainment |
|
|
|
2,729 |
38,308 |
|
| Insurance |
|
|
|
657,453 |
135,654 |
|
| Repairs
and up-keeps |
|
|
246,414 |
335,979 |
|
| Legal |
|
|
|
3,457 |
13.35 |
|
| Auditors'
remuneration: |
|
|
|
| Audit
fee- statutory |
|
|
40,000 |
40,000 |
|
| - others |
|
|
62,820 |
-- |
|
| Out
of pocket reimbursements |
|
|
9,000 |
15,748 |
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
111,820 |
55,748 |
|
| Deferred
costs amortized |
|
|
920,707 |
1,675,846 |
|
| Depreciation |
|
|
|
990,464 |
1,024,163 |
|
| Misc. Expenses |
|
|
|
51,329 |
68,965 |
|
|
|
------------------ |
------------------ |
|
|
|
10,332,366 |
11,141,898 |
|
|
|
|
========== |
========== |
|
|
|
|
|
| 22.
FINANCIAL CHARGES |
|
|
|
| Financial
expenses |
|
|
35,405,748 |
34,405,104 |
|
| Bank charges |
|
|
|
180,917 |
228,195 |
|
|
|
------------------ |
------------------ |
|
|
|
35,586,665 |
34,633,299 |
|
|
|
|
========== |
========== |
|
|
|
|
| 23.
TRANSACTIONS WITH ASSOCIATED UNDERTAKINGS |
|
| Expenses
sharing charged to |
|
981,378 |
228,769 |
|
|
|
------------------ |
------------------ |
|
| Expenses
sharing charged by |
|
-- |
549,802 |
|
|
|
------------------ |
------------------ |
|
| Profit
paid on COI |
|
3,933,418 |
-- |
|
|
|
------------------ |
------------------ |
|
| Fixed
assets transferred to |
|
-- |
569,266 |
|
|
|
------------------ |
------------------ |
|
| Leases
transferred from |
|
24,352,185 |
275,613 |
|
|
|
------------------ |
------------------ |
|
| Leases
transferred to |
|
22,285,190 |
-- |
|
|
|
------------------ |
------------------ |
|
| Others |
|
|
19,246,210 |
19,251,225 |
|
|
|
|
------------------ |
------------------ |
|
|
| 24.
FINANCIAL INSTRUMENT AND RELATED DISCLOSURES |
|
|
|
| 24.1
Credit Risk |
|
| Credit
risk arises from the possibility of asset impairment that occurs because
counter parties cannot |
|
| meet
their obligations in transactions involving financial instruments. The
company controls its credit risk |
|
| by
the following methods: |
|
|
| a)
Monitoring credit exposures. |
|
| b)
Evaluating transactions with specific counterparts. |
|
| c)
Assessing credit worthiness of counterparts. |
|
|
| The
procedures followed by the company include both internal guidelines and
NFBI's regulations. |
|
|
| The
management is of the view that it is not exposed to significant concentration
of credit risk as its |
|
| financial
assets are adequately diversified in organisation of sound financial standing
covering various |
|
| industrial
sectors and segments. Further an allowance for potential lease losses is
maintained at a level |
|
| which
in the judgement of management, is adequate to provide for potential lease
losses on lease |
|
| portfolio
that can be reasonably anticipated. |
|
|
| A
sector wise break up of lease portfolio is as follows: |
|
June 30, |
|
|
|
|
|
|
1999 |
|
|
|
|
|
|
Rupees |
% age |
|
|
|
|
| Chemical |
|
|
|
49,516,154 |
16.97 |
|
| Textile |
|
|
|
25,034,667 |
8.58 |
|
| Sugar and allied |
|
|
|
55,531,614 |
19.03 |
|
| Cement |
|
|
|
15,060,887 |
5.16 |
|
| Electrical
goods manufacturing |
|
|
|
31,095,393 |
10.65 |
|
| Steel and allied |
|
|
|
7,823,389 |
2.68 |
|
| Light
engineering |
|
|
|
2,082,977 |
0.71 |
|
| Heavy
engineering |
|
|
|
2,284,614 |
0.78 |
|
| Computer
and allied manufacturing |
|
|
484,824 |
0.17 |
|
| Auto
and allied manufacturing |
|
|
|
473,883 |
0.16 |
|
| Transportation
and communication |
|
|
8,390,959 |
2.88 |
|
| DFI's |
|
|
|
481,407 |
0.16 |
|
| Pharmaceuticals |
|
|
|
2,148,736 |
0.74 |
|
| Paper and board |
|
|
|
726,092 |
0.25 |
|
| Vanaspati
and allied |
|
|
|
5,449,181 |
1.87 |
|
| Construction
company |
|
|
|
10,753,210 |
3.68 |
|
| Hotel
and restaurants |
|
|
|
2,128,619 |
0.73 |
|
| Food and allied |
|
|
|
14,395,911 |
4.93 |
|
| Brokerage
houses |
|
|
|
442,852 |
0.15 |
|
| Utility
companies |
|
|
|
940,693 |
0.32 |
|
| Fuel
and energy distribution |
|
|
|
457,664 |
0.16 |
|
| Trading
company |
|
|
|
1,581,050 |
0.54 |
|
| Distribution
company |
|
|
|
3,327,244 |
1.14 |
|
| Dairy
and poultry |
|
|
3,600,846 |
1.23 |
|
| Health care |
|
|
5,269,229 |
1.81 |
|
| Individuals |
|
|
21,350,007 |
7.32 |
|
| Importer
and exporter |
|
|
497,202 |
0.17 |
|
| Consultants |
|
|
974,041 |
0.33 |
|
| Engineers/contractors |
|
|
2,113,911 |
0.72 |
|
| Education |
|
|
476,038 |
0.16 |
|
| Manufacturing |
|
|
162,370 |
0.06 |
|
| Plastic |
|
|
174,607 |
0.06 |
|
| Tobacco |
|
|
1,801,527 |
0.62 |
|
| Others |
|
|
14,026,102 |
5.08 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
291,850,700 |
100 % |
|
|
|
|
|
|
========== |
========== |
|
|
|
|
| 24.2
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. |
|
|
| 24.3
Exposure to Mark up Rate Risk |
|
|
| The
company's exposure to risk associated with mark up rates on its financial
assets and liabilities are |
|
| as follows: |
|
|
|
|
|
Mark up
Bearing |
Non-Mark up
Bearing |
|
|
Within |
One year to |
Within |
One year to |
|
|
|
one year |
five years |
one year |
five years |
Total |
|
|
Rupees |
Rupees |
Rupees |
Rupees |
Rupees |
|
|
|
|
| Financial
Assets |
|
| Long term |
|
|
| investments |
|
-- |
6,053,080 |
-- |
15,961,331 |
22,014,441 |
|
|
| Net investment |
|
|
|
| in lease finance |
|
60,933,836 |
230,924,864 |
-- |
-- |
291,858,700 |
|
|
| Cash and |
|
|
|
| bank balance |
|
135,645 |
-- |
6,722,149 |
-- |
6,857,794 |
|
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
|
|
|
61,069,481 |
236,977,944 |
6,722,149 |
15,961,331 |
320,730,905 |
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
|
|
|
Mark up
Bearing |
Non-Mark up
Bearing |
|
|
Within |
One year to |
Within |
One year to |
|
|
|
one year |
five years |
one year |
five years |
Total |
|
|
Rupees |
Rupees |
Rupees |
Rupees |
Rupees |
|
|
|
|
| Financial
Liabilities |
|
|
| Long term loans |
|
-- |
-- |
18,534,100 |
35,961,381 |
54,495,481 |
|
| Long term COI |
|
77,763,410 |
3,562,375 |
-- |
-- |
81,325,785 |
|
| Long
term finance |
10,082,000 |
8,146,401 |
-- |
-- |
18,228,401 |
|
| Finances under |
|
|
|
| markup |
|
|
|
| arrangement |
|
78,965,305 |
-- |
-- |
-- |
78,965,305 |
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
|
|
166,810,715 |
11,708,776 |
18,534,100 |
35,961,381 |
233,014,972 |
|
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
| Net financial |
|
|
|
| asset/liability |
|
(105,741,234) |
225,269,168 |
(11,811,951) |
(20,000,050) |
87,715,933 |
|
|
|
========== |
========== |
========== |
========== |
========== |
|
|
| 24.4
EFFECTIVE MARK UP RATE |
|
| The
effective mark up rates for the Company's financial assets and liabilities
are as follows: |
|
|
|
|
| Financial
Assets (%) |
|
|
| Investment
in lease finance |
|
15.00 - 46.59 |
|
| Long
term investments |
|
14.00 |
|
|
|
|
|
| Financial
liabilities (%) |
|
|
| Long term COI |
|
17.25-23.50 |
|
| Long
term finance |
|
20.50-23.50 |
|
| Finances
under mark up |
|
|
| arrangements |
|
19.50-21.00 |
|
|
| 25.
STATEMENT OF CHANGES IN EQUITY |
|
|
|
|
Share Capital |
Statutory |
General |
Contingencies |
Unappropriated |
Total |
|
|
|
|
Reserve |
Reserve |
Reserve |
Profit |
|
|
| Balance as at |
|
|
| June 30, 1998 |
|
100,000,000 |
13,759,493 |
10,000,000 |
3,339,892 |
6,698,080 |
133,797,465 |
|
|
|
|
|
| Loss
for the year |
-- |
-- |
-- |
-- |
(56,498,302) |
(56,498,302) |
|
| Balance as at |
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
| June 30, 1999 |
|
100,000,000 |
13,759,493 |
10,000,000 |
3,339,892 |
49,800,222 |
77,299,163 |
|
|
|
========== |
========== |
========== |
========== |
========== |
========== |
|
|
|
|
| 26. TAXATION |
|
|
|
| 26.1
Provision for minimum tax at 0.5% of the turnover under section 80D or the
Income Tax Ordinance, |
|
| 1979
has been made in these financial statements, while no provision for current
tax has been made |
|
| due
to assessed tax carry forward losses upto assessment year 1995-96 and appeals
filed against |
|
| assessment
orders for the year 1996-97, 1997-98 and 1998-99. |
|
|
|
|
| 26.2
International Accounting Standard 12, Income Taxes (Revised) requires that
full liability against |
|
| deferred
taxation is to be provided in the year in which it relates. On September 10,
1999 the Securities |
|
| and
Exchange Commission (SECP) has issued Circular No. 16 in accordance with
which all the leasing |
|
| Companies
are required to provide deferred tax liability to the current year together
with a further |
|
| amount
equal to one-fifth of the unprovided deferred tax liability as at the
beginning of the financial year |
|
| ending
June 30, 1998. |
|
|
|
|
|
|
| In
accordance with the provisions of the above mentioned Circular, the Company
has provided deferred |
|
| tax
for the current year amounting to Rs, 4,545,679 and Rs. 4,536,199 being
one-fifth of the total |
|
| unprovided
deferred tax liability as at July 01, 1998. |
|
|
|
|
| As
at June 30, 1999 the total deferred tax liability not provided is Rs.
18,144,796 (1998: Rs. 22,680,995). |
|
|
| 27.
REMUNERATION OF CHIEF EXECUTIVE DIRECTOR AND EXECUTIVES |
|
|
|
|
|
For the
period from July 01, |
|
|
For the
period from July 01, |
|
|
|
1998 to June
30, 1999 |
|
|
1997 to June
30,1998 |
|
|
|
|
|
|
Chief |
|
Chief |
|
|
|
|
Executive |
Director |
Executives |
Total |
Executive |
Director |
Executives |
Total |
|
|
|
|
|
|
| Managerial
remuneration |
408,000 |
-- |
445,200 |
853,200 |
372,540 |
-- |
670,513 |
1,043,053 |
|
| Leave passage |
|
185,904 |
400,000 |
52,500 |
638,404 |
229,900 |
-- |
113,400 |
343,300 |
|
| Perquisites
and benefits |
422,400 |
-- |
564,960 |
987,360 |
592,297 |
-- |
804,360 |
1,396,657 |
|
| Provident fund |
|
40,800 |
-- |
44,526 |
85,326 |
37,248 |
-- |
66,252 |
103,500 |
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
| Rupees |
|
1,057,104 |
400,000 |
1,107,186 |
2,564,290 |
1,231,985 |
-- |
1,654,525 |
2,886,510 |
|
|
|
========== |
========== |
========== |
========== |
========== |
========== |
========== |
========== |
|
| Number |
|
1 |
1 |
3 |
4 |
1 |
-- |
4 |
5 |
|
|
|
========== |
========== |
========== |
========== |
========== |
========== |
========== |
========== |
|
|
| 27.1
The chief executive and executives are also provided with free use of Company
maintained cars. |
|
|
| 28.
NUMBER OF EMPLOYEES |
|
|
|
|
| The
total number of the Company Employees are as follows: |
|
|
|
|
|
|
| Managerial
Staff |
|
6 |
6 |
|
| Other staff |
|
17 |
17 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
23 |
23 |
|
|
|
|
========== |
========== |
|
|
| 29. GENERAL |
|
|
| 29.1
All figures have been rounded off to the nearest rupee. |
|
|
| 29.2
Figures have been rearranged wherever necessary to facilitate comparison. |
|
| 29.3
The company is fully Y2K compliant. |
|
|
|
|
|
|
-Sd- |
|
|
-Sd- |
|
|
Chief Executive |
|
Director |
|
|
|
| PATTERN
OF SHAREHOLDING AS JUNE 30, 1999 |
|
|
| Number of |
|
Share Holdings |
|
Total Shares |
|
|
| Share-holders |
From |
|
To |
Held |
|
|
|
|
| 185 |
1 |
To |
500 |
77,000 |
|
| 108 |
501 |
To |
1,000 |
100,800 |
|
| 54 |
1,001 |
To |
2,000 |
99,500 |
|
| 14 |
2,001 |
To |
3,000 |
35,600 |
|
| 20 |
3,001 |
To |
4,000 |
67,900 |
|
| 21 |
4,001 |
To |
5,000 |
95,000 |
|
| 31 |
5,001 |
To |
10,000 |
252,800 |
|
| 16 |
10,001 |
To |
20,000 |
272,000 |
|
| 2 |
20,001 |
To |
30,000 |
60,000 |
|
| 1 |
30,001 |
To |
40,000 |
40,000 |
|
| 8 |
40,001 |
To |
50,000 |
240,500 |
|
| 8 |
50,001 |
To |
100,000 |
377,500 |
|
| 3 |
100,001 |
To |
150,000 |
218,600 |
|
| 2 |
150,001 |
To |
200,000 |
390,600 |
|
| 1 |
200,001 |
To |
250,000 |
250,000 |
|
| 1 |
250,001 |
To |
300,000 |
292,500 |
|
| 2 |
450,001 |
To |
500,000 |
980,000 |
|
| 5 |
550,001 |
To |
Above |
6,149,700 |
|
| ------------------ |
|
------------------ |
|
| 482 |
|
|
Total |
10,000,000 |
|
| ========== |
|
========== |
|
|
| Category of |
|
Number of |
|
|
|
| Share - holders |
|
Share-holders |
Shares held |
percentage |
|
|
|
| 1. Individuals |
|
410 |
1,788,700 |
17.89 |
|
| 2. Banks |
|
1 |
50,000 |
0.50 |
|
| 3.
Financial Institutions |
|
11 |
4,145,800 |
41.46 |
|
| 4.
Insurance Companies |
|
3 |
58,500 |
0.59 |
|
| 5.
Modaraba Companies |
|
8 |
2,827,800 |
28.28 |
|
| 6.
Private Ltd. Companies |
|
4 |
85,500 |
0.86 |
|
| 7.
Investment Companies |
|
3 |
106,800 |
1.07 |
|
| 8.
Joint Stock Companies |
|
3 |
346,800 |
3.47 |
|
| 9.
Central Depository Co. |
|
39 |
590,100 |
5.90 |
|
|
|
------------------ |
------------------ |
------------------ |
|
|
482 |
10,000,000 |
100.00 |
|
|
========== |
========== |
========== |
|
|
|
|
|
|
|
|
|
|
|
|
