| InterAsia Leasing Company Limited |
|
|
|
|
|
|
|
| Annual
Report 1999 |
|
|
|
| CONTENTS |
|
|
| Company
Information |
|
| Directors'
Report and Review |
|
| Notice
of Meeting |
|
| Auditor's
Report |
|
| Balance Sheet |
|
|
| Profit
and Loss Account |
|
| Cash
Flow Statement |
|
| Notes
to the Accounts |
|
| Pattern
of shareholding |
|
|
|
|
|
| CORPORATE
INFORMATION |
|
|
| Board
of Directors |
Mr. Muhammad Younas Khan |
Chairman |
|
|
|
Mr. Jameel ur Rehman |
Chief Executive |
|
|
|
Mr. Talha Qureshi |
Director |
|
|
|
Mr. Muhammad Azam Khan |
Director |
|
|
|
Ms. Parveen A. Malik |
(Nominee of Saudi Pak
Industrial & |
|
|
|
|
Agricultural Investment
Co. (Pvt) Ltd,) |
|
|
|
Mr. Abdul Qudus Siddiqi |
Director |
|
|
|
Mr. Hashim Ishaq |
Director |
|
|
| Company
Secretary |
Salman Rashid, (ACMA) |
|
|
|
|
| Bankers |
|
Gulf Commercial Bank Ltd. |
|
|
|
Crescent Investment Bank
Ltd, |
|
|
|
Bank of Khyber |
|
|
|
First Women Bank Ltd, |
|
|
|
Trust Investment Bank
Ltd. |
|
|
|
| Legal Advisors |
|
Ahmer Bilal Soofi,
Advocates & Solicitors |
|
|
|
|
| Auditors |
|
Khalid Majid Husain
Rahman, Chartered Accountants, |
|
|
|
|
| Registrar
and Share |
Universal Management
Services (Ptv) Ltd. |
|
| Transfer Office |
|
Room No. 205, 2nd Floor,
Central Hotel Building, |
|
|
|
Civil Lines, Karachi,
Pakistan |
|
|
|
Phone: 5654037 |
|
|
| Registered
Office/ |
101, 82 -East, Fazal ul
Haq Road, F-7/G-7, Blue Area |
|
| Head Office |
|
Islamabad - 44000,
Pakistan. |
|
|
|
Phone: (92 51) 206731
-206272 |
|
|
|
Fax: (92 51) 201380 |
|
|
|
| Liaison
Office Lahore: |
Room No. 1, 3rd Floor,
Leeds Centre, |
|
|
|
11-E-2, Main Boulevard,
Lahore, |
|
|
|
Phone: (92 42) 5717295-
96 |
|
|
|
Fax: (92 42) 5717297 |
|
|
|
| DIRECTORS'
REPORT AND REVIEW BY THE CHAIRMAN |
|
|
| The
Board of Directors of InterAsia Leasing Company Limited presents the Seventh
Annual Report along with |
|
| the
Annual Audited Accounts of the Company for the year ended June 30, 1999. |
|
|
| STATE
OF ECONOMY |
|
| The
year under review was once again a very difficult year for the financial
sector in general and leasing sector |
|
| in
particular. The real GDP recorded a decline from 4.3% to 3.1%. This resulted
from poor performance of |
|
| agriculture
sector coupled with weaker performance of manufacturing and services sectors.
The agricultural |
|
| sector
grew by a mere 0.35% whereas manufacturing and services sector registered a
growth of 4,7% and |
|
| 4.1%,
respectively. The commodity-producing sector has registered a growth of 2.1%
as compared to 5.3% of |
|
| last
year. The government continued to resort to deficit financing. The debt
burden also increased. The much |
|
| 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 |
|
| resulting
in slowing the demand for credit. Consequently, the leasing activity also
remained subdued as a result |
|
| of
uncertain economic environments. |
|
|
| PERFORMANCE
REVIEW |
|
| Your
company continued to adopt a conservative approach towards lending and
maximum effort was put in |
|
| towards
the recovery. As a result of that new investment in leases for the year was
Rs. 95.7 million being 11.4% |
|
| less
than last year. On the other hand recovery from investment in leases was to
the tune of Rs. 138 million, |
|
| 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 |
|
| 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 |
|
| and
allied industries. The average lease size also remained on the lower side. |
|
|
| Financial
Results |
|
|
| Net
Investment in Leases |
|
|
|
Rs. 230,924,864 |
|
| Revenue |
|
|
|
Rs. 53,671,702 |
|
| Expenditure |
|
|
|
Rs. 45,919,031 |
|
| Provisions
for potential lease losses |
|
|
Rs. 37,714,190 |
|
| Provision
for diminution in the |
|
|
|
|
| value
of investments (marked to market) |
|
|
Rs. 17,158,201 |
|
|
|
|
|
|
| Provision
for taxation- deferred |
|
|
| and current |
|
|
Rs. 9,378,582 |
|
|
|
|
| Loss after tax |
|
|
Rs. 56,498,302 |
|
|
|
| The
new management ushered in the fall of 1999 was immediately entrusted with the
responsibility of taking out |
|
| annual
audited accounts for the financial year 1998 99, After a careful analysis the
management decided to |
|
| consolidate
the position of your company by making prudent provisioning on investments
made in leases and |
|
| 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 |
|
| the
IAS on September 10, 1999 under its circular No. 16. Therefore it became
mandatory for each leasing |
|
| company
to make a provision for deferred taxation. You will observe that this new
requirement has further |
|
| 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 |
|
| performing
to a large extent, Another major provision of Rs. 17.15 million was made on
investment in shares of |
|
| listed
securities. The investment comprises securities of Bankers Equity Limited at
a cost of Rs, 15 million |
|
| (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, |
|
|
| CHANGE
IN DIRECTORSHIP |
|
| Rauf
B. Kadri, Ashfaq Tola, Inam-ul Haq, Haroon Sharif, Naveed A, Khan, M, Aslam
tendered their resignation |
|
| as
directors of the company. The new board includes Muhammad Younas Khan, Jameel
ur Rehman, Hashim |
|
| Ishaq,
Abdul Quddus Siddiqi, Talha Qureshi, Muhammad Azam Khan and Ms, Parveen
Malik, Nominee of Saudi |
|
| Pak.
The new board brings with it decades of in-depth experience in banking,
financial sector and management, |
|
| This
augurs well for the future of the company. |
|
|
| ORGANIZATIONAL
CHANGES |
|
| 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 |
|
| 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. |
|
| Your
Chairman has a rich experience in international banking in multinational
environment, He also brings with |
|
| him
deep understanding of Pakistan's economy, financial sector and business
environment. He is well |
|
| connected
in Government, Private and Public sector. The management philosophy is target
oriented and well |
|
| focussed.
All areas of business have been evaluated and proper procedures, checks and
balances are being |
|
| introduced
where ever necessary. The COl rates and lending rates have been rationalized
meeting the current |
|
| rate
scenario of the country. |
|
|
| Y2K
COMPLIANCE |
|
| You
will be pleased to know that the company has upgraded its I.T both in terms
of hardware and software and |
|
| became
fully compliant to Y2K. |
|
|
| FUTURE
OUTLOOK |
|
| The
consolidation of the operations, implementation of prudent credit and
business policies coupled with |
|
| modern
management techniques will take the company to sound health. The board of
directors and |
|
| management
will do their best to produce good results in the future years. However, much
will also depend on |
|
| the
economic environment of the country. The shareholders will have to be a
little patient. We are hopeful that |
|
| the
steps taken now for the good of the company will enhance shareholders value
in future. |
|
|
| AUDITORS |
|
| The
auditors, M/s Khalid Majid Hussain Rehman, Chartered Accountants, retire and
being eligible offer |
|
| themselves
for reappointment. |
|
|
| ACKNOWLEDGMENT |
|
|
| The
board takes the opportunity of thanking the management and staff for their
dedication and hard work in |
|
| trying
circumstances. Thanks to the shareholders for their patience and
understanding, and to the Securities |
|
| and
Exchange Commission of Pakistan for their guidance and support. |
|
|
|
|
For and on behalf of |
|
|
|
the Board of Directors |
|
|
|
|
|
|
|
|
-sd- |
|
| Islamabad |
|
|
Muhammad Younas Khan |
|
| January 20, 2000 |
|
|
Chairman |
|
|
|
| NOTICE
OF THE MEETING |
|
|
| Notice
is hereby given that Seventh Annual General Meeting of INTERASIA LEASING
COMPANY LIMITED |
|
| 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. |
|
|
| ORDINARY
BUSINESS |
|
|
| 1.
To confirm the Minutes of the Sixth Annual General Meeting held on December
31, 1998, |
|
|
|
|
| 2.
To receive, consider and adopt the audited accounts of the Company for the
period ended June |
|
| 30,
1999 together with the Directors' and auditors' report thereon. |
|
|
|
|
|
| 3.
To appoint Auditors for the year 1999-2000 and fix their remuneration. The
present auditors, M/s |
|
| Khalid
Majid Husain Rehman, Chartered Accountants retire and being eligible, offer
themselves |
|
| for
reappointment. |
|
|
|
|
|
|
| 4.
To transact any other business with the permission of the Chair, |
|
|
|
|
|
|
|
|
|
By order of the Board |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SALMAN RASHID |
|
| Islamabad;
January 29, 2000 |
|
|
|
Company Secretary |
|
|
|
|
| NOTES: |
|
|
| 1.
The Register of Members of the Company will remain closed from February 15,
2000 to February 21, |
|
| 2000
(both days inclusive) |
|
|
|
|
|
|
| 2.
A member entitled to attend and vote at the meeting is entitled to appoint a
proxy to attend and |
|
| vote
for him/her. A proxy need not to be a member of the Company, |
|
|
|
|
|
| 3.
An instrument of proxy and the Power of Attorney or other authority (if any)
under which it is signed, |
|
| or
a notarially certified copy of such power of attorney, in order to be valid
must be deposited at the |
|
| registered
office of the Company not less than 48 hours before the time of the meeting. |
|
|
|
|
| 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 |
|
| Tel.
No. 5654037. |
|
|
|
|
|
|
| 5.
Members are requested to notify any change in addresses immediately. |
|
|
|
| AUDITOR'S
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed balance sheet of InterAsia Leasing Company Limited
as at June 30, 1999 |
|
| 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; |
|
|
|
|
|
|
| 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 |
|
|
|
|
| (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. |
|
|
|
|
|
KHALID MAJID HUSAIN RAHMAN |
|
| Islamabad,
January 26, 2000 |
|
Chartered Accountants |
|
|
|
| BALANCE
SHEET AS AT JUNE 30, 1999 |
|
|
|
|
June 30, |
June 30, |
|
|
|
1999 |
1998 |
|
|
Note |
(RUPEES) |
(RUPEES) |
|
|
|
|
| SHARE
CAPITAL AND RESERVES |
|
|
|
|
|
| Authorised
Capital |
|
|
|
|
|
|
| 20,000,000
ordinary |
|
|
200,000,000 |
200,000,000 |
|
| shares
of Rs. 10/- each |
|
|
========== |
========== |
|
|
|
|
| Issued,
subscribed and paid up capital |
|
|
|
|
|
| 10,000,000
ordinary shares of |
|
|
100,000,000 |
100,000,000 |
|
| 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 |
|
|
|
|
|
------------------ |
------------------ |
|
