| National Asset Leasing Corporation Limited |
|
|
|
|
|
|
|
| Annual Report 1999 |
|
|
| CONTENTS |
|
|
| Company Information |
|
|
| Notice
of Meeting |
|
|
| Directors' Report |
|
|
|
| Auditors' Report to the Members |
|
| Balance
Sheet |
|
|
| Profit and Loss Account |
|
| Statement of Changes in
Financial Position |
|
|
| Notes
to the Accounts |
|
|
| Pattern of Share Holding |
|
|
|
|
|
| COMPANY
INFORMATION |
|
|
| Chairman |
|
| Dr. Khalid Iqbal |
|
|
| Chief
Executive/Managing Director |
|
| Shamim I. Junejo |
|
|
| Directors |
|
| Muhammad
Ashiq Rehmani |
|
| Azhar Tariq Khan |
|
| Syed Naveed H. Zaidi |
|
| Rana M.Abu Obaida |
|
| Sohail Ali |
|
|
| Company Secretary |
|
| Zafar A. Badami |
|
|
| Bankers
Of The Company |
|
| Crescent
Investment Bank Limited |
|
| Habib Bank Limited |
|
| Muslim
Commercial Limited |
|
| National
Development Finance Corporation |
|
| National
Bank of Pakistan |
|
| Bank of Punjab |
|
| Allied
Bank of Pakistan Limited |
|
|
| Auditors |
|
| Ford,
Rhodes, Robson, Morrow |
|
| Chartered Accountant |
|
| Finlay
House, I.I. Chundrigar Road, Karachi |
|
|
| Share Registrar |
|
| Noble
Computer Services (Private) Limited |
|
| 2na
Floor, AI Manzoor Building, |
|
| Dr.
Ziauddin Ahmed .Road, Karachi |
|
|
| Registered Office |
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| l-B, 1st Floor, Ali Plaza, |
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| Khayaban-e-Qauid-e-Azam, |
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| Blue Area, Islamabad |
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| Phones: 270626 & 822513 |
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| Fax No. (92-51) 272506 |
|
|
| Head Office |
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| 9th
Floor, Lakson Square Building No. 1, |
|
| 265 R. A. Lines, Karachi. |
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| Phones:
5687412, 5687419, 5689580 & 5682027 |
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| Fax No. (92-21) 5684259 |
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| Telex
No. 20538 ASSET PK. |
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| E-mail:
n atlease@Khi.fascom.com |
|
|
|
| NOTICE
OF MEETING |
|
|
| Notice
is hereby given that the Ninth Annual General Meeting of National Asset
Leasing |
|
| Corporation
Limited will be held at l-B, First Floor, All Plaza, Khayaban-e-Quaid-e-Azam,
Blue |
|
| Area,
Islamabad on Thursday, December 30, 1999 at 12.00 p.m to transact the
following |
|
| business · |
|
|
| ORDINARY BUSINESS |
|
|
| 1.
To confirm the Minutes of the Eight Annual General Meeting held on December
29, 1998. |
|
|
|
|
| 2.
To received, consider and adopt the Audited Accounts of the company together
with |
|
| Director's
report thereon for the year ended June 30, 1999. |
|
|
|
|
| 3.
To appoint Auditors and o fix their remuneration for the year 1999-2000. M/s.
Ford, |
|
| Rhodes,
Robson, Morrow, Chartered Accountants, the present Auditors, retire and being |
|
| eligible,
offer themselves for reappointment. |
|
|
|
|
| 4.
To transact any other business with the permission of the chair. |
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|
|
|
By order of the Board |
|
|
| Islamabad
· December 07, 1999. |
|
Zafar A. Badami |
|
|
|
|
Company Secretary |
|
|
| Notes: |
|
|
| 1.
The Share Transfer Books of the company will remain dosed from December 24 to |
|
| December
30, 1999 (both days inclusive). |
|
|
| 2.
A member entitled to attend and vote at this meeting may appoint another
member as his/her |
|
| proxy to attend and vote on his/her behalf.
Proxies in order to be effective must be received |
|
| at the company's Registered office at
Islamabad at least 48 hours before the time of holding |
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| the meeting. |
|
|
| 3.
The member are requested to please notify to the company any change in their
addresses. |
|
|
|
|
| DIRECTORS'
REPORT |
|
|
| The
Board of Directors is pleased to present the 9th full year of operational
review together with |
|
| the
Audited Annual Report of the Company for the year ended June 30, 1999. |
|
|
| Financial Results |
|
|
| The
operational result of the company during the year ended June 30, 1999 are
summarized as |
|
| follows: |
|
|
|
|
|
1999 |
1998 |
|
|
|
|
Rupees |
Rupees |
|
|
| Gross Revenue |
|
32,949,413 |
43,578,270 |
|
| Expenditure |
|
21,599,858 |
38,064,553 |
|
|
|
------------------- |
------------------- |
|
| Net
Profit before Provisions |
|
11,349,555 |
6,513,817 |
|
| Provisions & Write-off |
|
24,575,792 |
500,000 |
|
|
|
------------------- |
------------------- |
|
| Net profit/(Loss) |
|
(13,226,237) |
6,013,817 |
|
|
=========== |
=========== |
|
|
| The
financial results of the company show a net loss of 13.23 million for the
year ended June |
|
| 30,1999.
The loss is due to suspension of leasing income against certain leases and
making of |
|
| adequate
provision & write-offs to inject total prudence in the financial results
of the company. |
|
| The
company has also provided Rs. 5.25 million against the diminution in value of
investments in |
|
| shares
as required by Technical Release - 23 issue by the Institute of Chartered
Accountants of |
|
| Pakistan.
However, the company has earned a profit of Rs.11.35 million which shows a
good sign |
|
| considering
the present economic conditions of the country. |
|
|
| The
major part of suspended income and provision made during the year pertains to
lease |
|
| facilities
extended to M/s Mohib Textile Mills. Nevertheless, the company has filed a
suit in the |
|
| Court
of law against the lessee and very hopeful for the recovery. |
|
|
| The Economy |
|
|
| The
overall economy remained under recession, with the result that availability
of quality customers were |
|
| limited.
With the general declining trend in new industrial investment and expansion,
creditworthy clients |
|
| were
becoming difficult to identify, However, with the assumption of present
Government's determination to |
|
| complete
the job of overall reconstruction politico-economic situation, it is expected
that economic revival |
|
| would
lead the country to the greater opportunities for viable investments and the
country would be again on |
|
| its
desired track of growth in the years to come. |
|
|
| The
highlighted issue is the requirement of Security & Exchange Commission of
Pakistan, under |
|
| which
the leasing companies are required to raise their paid-up capital to Rs.200
million by |
|
| November
1999. Under present circumstances and condition of stock market the company
does |
|
| not
have any option but to approach' Securities & Exchange Commission of
Pakistan, Islamabad |
|
| with
a request to extend the period for increasing paid-up capital. |
|
|
| Business Prospects |
|
|
|
| The
business prospects of the company depends on availability of funds on
competitive rates. |
|
| Negotiations
are under way for procuring credit lines at reasonable mark-up rates. The |
|
| management
of the company is confident that it has the professional capability to manage |
|
| profitable
business operations by broadening the funding base through various means and |
|
| enhancing
professional techniques to meet the challenges and achieve the desired
results. |
|
|
| Auditors |
|
|
| The
auditors M/s Ford, Rhodes, Robson, Morrow, Chartered Accountants, retire and
offer |
|
| themselves
for re-appointment. |
|
|
| Pattern of Shareholding |
|
|
| The
pattern of shareholding as on June 30, 1999 is annexed. |
|
|
| Acknowledgment |
|
|
| The
board likes to place on record the commitment, dedication and hard work of
all 22 staff |
|
| members
at Karachi & Islamabad offices. Sincere thanks to our clients, financial
institutions and |
|
| shareholders.
We would also like to thank Security & Exchange Commission of Pakistan, |
|
| Leasing
Association of Pakistan, Stock Exchanges & State Bank of Pakistan for
their support and |
|
| guidance.
We trust and pray for Allah's blessings, mercy and guidance for achieving
desired |
|
| results
in years to come (Ameen). |
|
|
| Y2K Compliance |
|
|
| The
Company has successfully complied with the year 2000 issue, in respect of the |
|
| millennium bug. |
|
|
|
|
Dr. Khalid Iqbal |
|
| Islamabad:
December 03, 1999 |
|
Chairman |
|
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed balance sheet of NATIONAL ASSET LEASING CORPORATION |
|
| LIMITED
as at June 30, 1999 and the related profit and loss account and statement of
changes in |
|
| financial
position (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 account have been kept by the company as
required by the |
|
| Companies
Ordinance, 1984; |
|
|
| (b) in our opinion: |
|
|
|
| (i)
the balance sheet and profit and loss account together with the notes thereon
have |
|
| been
drawn up in conformity with the Companies Ordinance, 1984, and are in |
|
| agreement
with the books of account and are further in accordance with accounting |
|
| policies
consistently applied; |
|
|
|
| (ii)
the expenditure incurred during the year was for the purpose of the company's |
|
| business; and |
|
|
|
|
| (iii)
the business conducted, investments made and the expenditure incurred during
the |
|
| year
were in accordance with the objects of the company; |
|
|
| (c)
in our opinion and to the best of our information and according to the
explanations given to us, |
|
| the
balance sheet, profit and loss account and the statement of changes in
financial position |
|
| (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 changes in financial position (cash flows) for the year then ended; and |
|
|
| (d)
in our' opinion no Zakat was deductible at source under the Zakat and Ushr
Ordinance, 1980. |
|
|
|
Sd/- |
|
|
|
|
FORD, RHODES, ROBSON,
MORROW |
|
| Karachi:
December 03, 1999 |
|
Chartered Accountants |
|
|
|
| BALANCE
SHEET AS AT JUNE 30, 1999 |
|
|
|
|
1999 |
1998 |
|
|
|
Note |
Rupees |
Rupees |
|
|
| SHARE
CAPITAL AND RESERVES |
|
| Share capital |
|
|
| Authorised |
|
|
|
| 10,000,000 ordinary shares
of Rs.10 each |
|
|
100,000,000 |
100,000,000 |
|
|
|
|
============ |
============ |
|
|
| Issued,
subscribed and paid-up |
|
|
|
|
| 9,536,800
(1998: 9,536,800) ordinary shares of |
|
|
|
|
|
| Rs.10
each fully paid in cash |
|
|
95,368,000 |
95,368,000 |
|
|
|
| Reserves |
|
|
|
| Reserve
fund (capital reserve) |
|
3 |
9,828,840 |
9,828,840 |
|
|
| Unappropriated
(loss)/profit |
|
(3,421,361) |
10,104,876 |
|
|
|
--------------------- |
--------------------- |
|
|
|
6,407,479 |
19,933,716 |
|
|
|
--------------------- |
--------------------- |
|
|
|
101,775,479 |
115,301,716 |
|
|
|
| REDEEMABLE
CAPITAL - SECURED |
|
4 |
16,859,092 |
41,464,385 |
|
|
| LONG
TERM FINANCE - SECURED |
|
5 |
13,333,332 |
20,000,000 |
|
|
| OBLIGATIONS
UNDER FINANCE LEASE |
|
6 |
l ,045,704 |
585,498 |
|
|
| CERTIFICATES
OF INVESTMENT |
|
7 |
200,000 |
2,100,000 |
|
|
| LEASE KEY MONEY |
|
8 |
6,448,969 |
15,989,396 |
|
|
|
|
|
|
|
|
| CURRENT LIABILITIES |
|
| Current
portion of redeemable capital |
|
4 |
29,925,882 |
9,968,949 |
|
|
| Current
portion of long term finance |
|
5 |
29,163,536 |
23,996,868 |
|
|
| Current
portion of obligations under finance lease |
6 |
907,226 |
920,772 |
|
|
| Certificates of investment |
|
7 |
6,400,000 |
9,000,000 |
|
|
| Current
portion of lease key money |
|
|
9,337,467 |
3,907,045 |
|
|
| Short term finances |
|
9 |
19,012,379 |
17,207,628 |
|
|
| Book
overdraft with banks/DFI |
|
|
-- |
1,517,435 |
|
|
| Accrued
and Other liabilities |
|
10 |
33,512,029 |
31,521,021 |
|
|
|
|
--------------------- |
--------------------- |
|
|
|
|
128,258,519 |
98,039,718 |
|
|
| CONTINGENCIES
AND COMMITMENTS |
|
11 |
|
|
|
|
|
--------------------- |
--------------------- |
|
|
267,921,095 |
293,480,713 |
|
|
|
============ |
============ |
|
|
|
| TANGIBLE
FIXED ASSETS |
|
12 |
5,375,228 |
6,245,715 |
|
| NET
INVESTMENT IN LEASE FINANCE |
|
13 |
134,362,645 |
150,567,507 |
|
| LONG
TERM INVESTMENTS |
|
14 |
33,331,046 |
43,061,046 |
|
| LONG
TERM DEPOSITS AND PREPAYMENTS |
15 |
220,650 |
477,750 |
|
|
| CURRENT ASSETS |
|
| Current
portion of net investment in lease finance |
13 |
58,388,112 |
74,883,050 |
|
| Short term investment |
|
16 |
3,500,000 |
- |
|
| Advances,
deposits, prepayments and |
|
| other receivables |
|
17 |
7,630,170 |
3,750,980 |
|
| Cash and bank balances |
|
18 |
25,113,242 |
14,454,663 |
|
|
--------------------- |
--------------------- |
|
|
|
94,631,524 |
93,088,693 |
|
|
--------------------- |
--------------------- |
|
|
|
|
267,921,095 |
293,480,713 |
|
|
|
|
============ |
============ |
|
| The
annexed notes form an integral part of these accounts. |
|
|
| DR. KHALID IQBAL |
|
SHAMIM I. JUNEJO |
M.A. REHMANI |
|
| Chairman |
|
Chief Executive |
|
Director |
|
|
|
|
|
|
|
|
|
|
|
| PROFIT
AND LOSS ACCOUNT |
|
| FOR
THE YEAR ENDED JUNE 30, 1999 |
|
|
|
|
1999 |
1998 |
|
|
|
Note |
Rupees |
Rupees |
|
|
|
|
| REVENUE |
|
| Income
from leasing operations |
|
19 |
30,713,354 |
41,117,507 |
|
| Income
from Government securities |
|
|
(161,350) |
(359,709) |
|
| Dividend income |
|
|
224,775 |
293,971 |
|
| Income
from bank deposits |
|
|
2,587,378 |
2,519,185 |
|
| (Loss)/Profit
on disposal of fixed assets |
|
|
(414,744) |
416 |
|
| Other income |
|
|
- |
7,000 |
|
|
|
|
--------------------- |
--------------------- |
|
|
|
|
32,949,413 |
43,578,370 |
|
|
| EXPENDITURE |
|
|
| Return
and financial charges |
|
20 |
20,289,280 |
25,106,462 |
|
| Excess
mark-up provided, written back |
|
9.3 |
(8,795,944) |
- |
|
| Administrative
and operating expenses |
|
21 |
10,106,522 |
11,958,091 |
|
|
|
|
--------------------- |
--------------------- |
|
|
|
|
21,599,858 |
37,064,553 |
|
|
|
|
--------------------- |
--------------------- |
|
| PROFIT
BEFORE PROVISIONS |
|
|
11,349,555 |
6,513,817 |
|
|
|
| PROVISIONS |
|
| Provision
for doubtful receivables |
|
|
10,550,042 |
-- |
|
| Write
offs of lease receivable |
|
|
8,775,750 |
-- |
|
| Provision
for diminution in value of investment |
|
5,250,000 |
500,000 |
|
|
|
|
|
--------------------- |
--------------------- |
|
|
|
24,575,792 |
500,000 |
|
|
|
--------------------- |
--------------------- |
|
|
| (LOSS)/PROFIT
BEFORE TAXATION |
|
|
(13,226,237.00) |
6,013,817 |
|
|
| TAXATION |
|
|
| -
current year |
|
|
22 |
300,000 |
500,000 |
|
|
| -
prior years |
|
|
- |
610,693 |
|
|
|
|
|
--------------------- |
--------------------- |
|
|
|
300,000 |
1,110,693 |
|
|
|
--------------------- |
--------------------- |
|
|
| (LOSS)/PROFIT
AFTER TAXATION |
|
(13,526,237) |
4,903,124 |
|
|
| UNAPPROPRIATED
PROFIT BROUGHT FORWARD |
|
10,104,876 |
6,182,377 |
|
|
|
|
|
--------------------- |
--------------------- |
|
|
|
(3,421,361) |
11,085,501 |
|
|
|
| APPROPRIATION |
|
| Transfer to reserve fund |
|
- |
980,625 |
|
|
|
|
|
--------------------- |
--------------------- |
|
|
| UNAPPROPRIATED
(LOSS)/PROFIT CARRIED FORWARD |
|
(3,421,361) |
10,104,876 |
|
|
|
|
============ |
============ |
|
|
| BASIC
(LOSS)/EARNINGS PER SHARE |
|
28 |
(1.42) |
0.51 |
|
|
|
|
|
============ |
============ |
|
|
|
|
|
|
|
|
| The
annexed notes form an integral part of these accounts |
|
|
| DR. KHALID IQBAL |
|
SHAMIM I. JUNEJO |
M.A. REHMANI |
|
| Chairman |
|
Chief Executive |
|
Director |
|
|
|
| STATEMENT
OF CHANGES IN FINANCIAL POSITION |
|
| (CASH
FLOW STATEMENT) |
|
| FOR
THE YEAR ENDED JUNE 30, 1999 |
|
|
|
|
|
1999 |
1998 |
|
|
|
|
Rupees |
Rupees |
|
|
|
| CASH
FLOWS FROM OPERATING ACTIVITIES |
|
| Net
(loss)/profit for the year before tax |
|
|
(13,226,237) |
6,013,817 |
|
|
|
|
|
| Adjustments for: |
|
|
|
| Depreciation
on fixed assets |
|
|
1,481,451 |
1,467,485 |
|
| Income
from long term investments |
|
161,350 |
359,709 |
|
| Gain/(loss)
on sale of fixed assets |
|
414,744 |
(416) |
|
| Provision
for doubtful receivables |
|
9,120,450 |
- |
|
|
| Write
offs of lease receivables |
|
8,775,750 |
- |
|
|
| Provision
for diminution in value of investment |
|
5,250,000 |
500,000 |
|
| Provision
against other receivables |
|
1,429,592 |
- |
|
|
| Return
and financial charges on borrowings |
|
|
18,833,530 |
21,514,827 |
|
|
|
|
--------------------- |
--------------------- |
|
|
|
45,466,867 |
23,841,605 |
|
|
|
--------------------- |
--------------------- |
|
|
|
32,240,630 |
29,855,422 |
|
|
|
|
|
| (Increase)/decrease
in advances, prepayments and other |
|
| receivables |
|
(4,899,261) |
935,282 |
|
| Increase
in accrued and other liabilities |
|
1,991,008 |
6,304,358 |
|
| Payment of income tax |
|
|
(295,257) |
(509,877) |
|
| (Increase)
in long term deposits |
|
(157,200) |
(63,450) |
|
| (Decrease)
in certificate of investments |
|
(4,500,000) |
(5,200,000) |
|
| (Decrease)
in lease key money |
|
(4,110,005) |
(4,817,711) |
|
|
--------------------- |
--------------------- |
|
|
|
|
(11,970,715) |
(3,351,398) |
|
|
|
|
--------------------- |
--------------------- |
|
| Net
cash generated from operating activities |
|
|
20,269,915 |
26,504,024 |
|
|
| CASH
FLOWS FROM INVESTING ACTIVITIES |
|
|
| Purchase of fixed assets |
|
|
(1,685,500) |
(1,491,611) |
|
| Sale of fixed assets |
|
|
659,800 |
228,750 |
|
| Investment
in lease finance (net of recoveries) |
|
14,823,600 |
19,114,581 |
|
| (Increase)
in income from government securities |
|
(161,350) |
(359,709) |
|
|
|
|
--------------------- |
--------------------- |
|
| Net
cash generated from investing activities |
|
|
13,636,550 |
17,492,011 |
|
|
|
|
--------------------- |
--------------------- |
|
| Total carried forward |
|
|
33,906,465 |
43,996,035 |
|
|
|
|
|
|
| Total brought forward |
|
|
33,906,465 |
43,996,035 |
|
|
| CASH
FLOWS FROM FINANCING ACTIVITIES |
|
|
| (Decrease)/increase
in redeemable capital |
|
|
(4,648,350) |
7,845,754 |
|
| (Decrease)
in long term finance |
|
|
(1,500,000) |
(7,331,150) |
|
| Increase/(decrease)
in obligation under finance lease |
|
446,660 |
(7,728) |
|
| Increase/(decrease)
in short term finance |
|
|
2,804,770 |
(7,448,742) |
|
| Return
and financial charges on borrowings |
|
|
(18,833,531) |
(21 ;514,827) |
|
|
|
|
--------------------- |
--------------------- |
|
| Net
cash (used) in financing activities |
|
|
(21,730,451) |
(28,456,693) |
|
|
|
|
--------------------- |
--------------------- |
|
| Net
increase in cash and cash equivalents |
|
|
12,176,014 |
15,539,342 |
|
| Cash
and cash equivalents at July 1, 1998/1997 |
|
12,937,228 |
(2,602,114) |
|
|
|
|
--------------------- |
--------------------- |
|
| Cash
and cash equivalents at June 30, 1999/1998 |
|
25,113,242 |
12,937,228 |
|
|
============ |
============ |
|
|
|
|
| DR. KHALID IQBAL |
|
SHAMIM I. JUNEJO |
M.A. REHMANI |
|
| Chairman |
|
Chief Executive |
|
Director |
|
|
|
|
| NOTES
TO THE ACCOUNTS |
|
| FOR
THE YEAR ENDED JUNE 30, 1999 |
|
|
| 1.
LEGAL STATUS AND NATURE OF BUSINESS |
|
|
| The
Company is incorporated in Pakistan as a public limited company and is Iisted
on the Karachi, Lahore |
|
| and
Islamabad Stock Exchanges. It essentially carries on the business of leasing. |
|
|
| 2.
SIGNIFICANT ACCOUNTING POLICIES |
|
|
| 2.1
Accounting convention |
|
|
| The
financial statements have been prepared under the historical cost convention. |
|
|
| 2.2
Tangible fixed assets and depreciation thereon |
|
|
| These
are stated at cost less accumulated depreciation. Depreciation is charged to
income applying |
|
| the
straight line method whereby the cost of the asset less estimated residual
value is written off over |
|
| its
estimated useful life. Depreciation on fixed assets is charged
proportionately from the month of |
|
| acquisition
(full month's depreciation being charged in the month of acquisition) upto
the month prior |
|
| to deletion. |
|
|
| Assets
obtained under finance leases are included as tangible fixed assets and
depreciation thereon |
|
| is
charged over the .useful life of the assets or the lease term whichever is
shorter. However, if there |
|
| is
reasonable certainty that the ownership of the assets would transfer to the
company at the end of |
|
| the
lease term, the asset is depreciated at the same rates as the Company's own
assets. |
|
|
| Profit
or loss on disposal of fixed assets is included in income currently. |
|
|
| 2.3
Employees' retirement benefits |
|
|
| The
company operates a contributory provident fund for all its permanent
employees and |
|
| contributions
are made by the Company and the employees in accordance with the fund rules. |
|
|
| 2.4 Investments |
|
|
| Long
term investments: These are stated at moving average cost of the respective
entities' |
|
| shares/certificates.
Provision is made for any diminution in value, if considered permanent. |
|
|
| Short
term investments: These are stated at lower of moving average cost of the
respective |
|
| entities'
shares/certificates and market value on a portfolio basis. |
|
|
| Profit
or loss on sale of investments is accounted for currently. |
|
|
| 2.5
Government securities repurchase/resale transactions |
|
|
|
| The
Company enters into transactions of repurchase or resale in registered
Government securities at |
|
| contracted
rates for specified periods of time. These are recorded as follows: |
|
|
| (a)
in the case of sale under repurchase obligations the securities are deleted
from the books at |
|
| cost (whilst the coupon income continues to
be accrued) and the charges arising from the |
|
| differential in sale and repurchase values
are accrued on a pro-rata basis and recorded under |
|
| income from Government securities. Upon
repurchase the securities are reinstated at their |
|
| respective original cost. |
|
|
| (c)
in the case of purchases under resale obligations the securities are booked
at the contracted |
|
| purchase
price and the differential of the contracted purchase and resale prices is
amortized |
|
| over
the period of the contract and recorded under income from Government
securities. |
|
|
| 2.6 Revenue recognition |
|
|
|
|
|
| The
Company follows the "financing method" in recognizing income on
lease contracts. Under this |
|
| method
the unearned income i.e. the excess of aggregate lease rentals and the
estimated residual |
|
| value
over the cost of the leased asset is deferred and then amortized over the
term of the lease, so |
|
| as
to produce a constant rate of return on net investment in the lease. |
|
|
|
|
| Dividend
income from quoted entities is recognized at the time of closure of share
transfer books of |
|
| the
company declaring the dividend. |
|
|
|
|
| Income
on Government securities is recognized by pro-rata accruals of the
differential in cost and |
|
| maturity
values and/or the coupon rate applicable. |
|
|
|
|
| Project
examination, consultancy, commitment and other charges are taken to income
when realized. |
|
|
|
|
| 2.7 Taxation |
|
|
| Current: |
|
|
| The
charge for current taxation is based on taxable income which is computed as
if all leases are |
|
| accounted
for as operating leases. |
|
|
|
|
| Deferred: |
|
|
| The
Company accounts for deferred taxation expense using the liability method on
all significant |
|
| temporary
differences. This is being dealt with as stated in note 22.2. |
|
|
|
|
1999 |
1998 |
|
|
|
Rupees |
Rupees |
|
| 3.
RESERVE FUND (CAPITAL RESERVE) |
|
|
|
| At
the beginning of the year |
|
9,828,840 |
8,848,215 |
|
| Transfer
from profit and loss account |
|
|
- |
980,625 |
|
|
|
|
|
--------------------- |
--------------------- |
|
| At the end of the year |
|
9,828,840 |
9,828,840 |
|
|
============ |
============ |
|
|
| The
reserve fund is created by transferring 20% of the profit after tax for the
year. This reserve is required to |
|
| be
maintained under the provisions of the regulations issued by the State Bank
of Pakistan for Non-Banking |
|
| Financial Institutions. |
|
|
|
|
|
|
1999 |
1998 |
|
|
|
Note |
Rupees |
Rupees |
|
|
|
|
|
| 4.
REDEEMABLE CAPITAL - SECURED |
|
| Musharika funds |
|
4.1 |
19,422,224 |
21,433,334 |
|
| Term finance |
|
4.2 |
27,362,750 |
30,000,000 |
|
|
|
|
--------------------- |
--------------------- |
|
|
|
|
46,784,974 |
51,433,334 |
|
| Less: Current portion |
|
|
29,925,882 |
9,968,949 |
|
|
|
|
--------------------- |
--------------------- |
|
|
|
|
16,859,092 |
41,464,385 |
|
|
============ |
============ |
|
|
|
|
| 4.1 This includes: |
|
|
| Rs.13,000,000
Musharika fund obtained from a Modaraba for a period of three years. The
share in the |
|
| profit
between the Company and the Modaraba is in the ratio of their respective
contributions. The |
|
| share
of the Modaraba during the year was Rs.2,405,000. The profit is payable in
quarterly |
|
| installments
which commenced from September 1997. The facility is secured by charge on
leased |
|
| assets
and persona/guarantee of directors. |
|
|
| Rs.6,422,224
Musharika fund obtained from a commercial bank. The balance represents two
lines of |
|
| Rs.6
million and Rs.4 million repayable in 60 and 36 equal installments which
commenced from |
|
| October
10, 1997 and December 26, 1997 respectively. The expected rate of mark-up is
19.5%. This |
|
| facility
is secured by a mortgage or charge on present and future book debts of the
company and |
|
| hypothecation
of plant and machinery. |
|
|
| 4.2
This represents credit line obtained from a DFI. The finance is repayable in
four half-yearly and |
|
| eleven
quarterly installments. The facility carries mark-up at the rate of 20.5% per
annum. The |
|
| installments
commenced from October 1, 1998. The facility is secured by way of assignment
of lease |
|
| rentals
and personal guarantees of the directors of the company. |
|
|
| 5.
LONG TERM FINANCE- SECURED |
|
| From - |
|
|
| Commercial bank |
|
|
5.1 |
31,143,685 |
31,143,685 |
|
| Modaraba |
|
|
5.2 |
11,353,183 |
12,853,183 |
|
|
|
|
--------------------- |
--------------------- |
|
|
42,496,868 |
43,996,868 |
|
| Less: Current portion |
|
|
29,163,536 |
23,996,868 |
|
|
--------------------- |
--------------------- |
|
|
13,333,332 |
20,000,000 |
|
|
============ |
============ |
|
|
| 5.1
This represents balance of two term finance facilities of Rs.20 million each
obtained from a |
|
| commercial
bank. 'The facilities carry a mark-up rate of Re.0.48 per Rs.l,000 per day.
The two lines |
|
| are
repayable in four and twelve quarterly installments. The installments
commenced from |
|
| September
30, 1998 and September 30, 1999 respectively. The facilities are secured by
registered |
|
| deed
of assignment of lease rentals of specific leases. Several of the
installments were overdue as at |
|
| June
30, 1999. Presently negotiations are in progress for rescheduling of the
same. |
|
|
| 5.2
This represents Morabaha finance facility of Rs.20 million obtained from a
Modaraba. The facility |
|
| carries
a mark-up rate of Re.0.50 per Rs. 1,000 per day. The finance is repayable in
three equal |
|
| annual
installments alongwith mark-up. The installments commenced from August 17,
1996. The |
|
| facility
is secured by deed of assignment of lease rentals of specific leases and
personal guarantees |
|
| of
Directors of the company. The entire amount is overdue as at June 30,. 1999.
Presently |
|
| negotiations
are in progress for rescheduling of the same. |
|
|
|
|
|
|
|
|
1999 |
1998 |
|
|
|
|
Note |
Rupees |
Rupees |
|
|
|
| 6.
OBLIGATIONS UNDER FINANCE LEASE |
|
| Liabilities
against lease finance |
|
6.1 |
1,952,930 |
1,506,270 |
|
| Less:
Current maturity shown under current liabilities |
|
907,226 |
920,772 |
|
|
--------------------- |
--------------------- |
|
|
1,045,704 |
585,498 |
|
|
|
============ |
============ |
|
| 6.1 Year to June 30, 1999 |
|
|
|
- |
1,138,565 |
|
| Year to June 30, 2000 |
|
|
|
1,093,177 |
451,777 |
|
| Year to June 30, 2001 |
|
|
|
855,245 |
213,845 |
|
| Year to June 30, 2002 |
|
|
|
342,100 |
- |
|
|
|
|
|
--------------------- |
--------------------- |
|
|
|
|
|
2,290,522 |
1,804,187 |
|
| Less:
Finance charges allocated to future periods |
|
337,592 |
297,917 |
|
|
|
|
|
--------------------- |
--------------------- |
|
|
|
1,952,930 |
1,506,270 |
|
|
|
============ |
============ |
|
|
| These
obligations represent acquisition of assets under finance lease facility. The
average rate of return |
|
| used
as the discounting factor ranges from 17.89% to 20.32% per annum. The lease
rentals are payable in |
|
| monthly installments. |
|
|
| At
the end of the lease the ownership of the asset shall be transferred to the
company on payment of residual |
|
| value
amounting to Rs.419,750 (1998: Rs.262,550). |
|
|
| 7.
CERTIFICATES OF INVESTMENT |
|
| The
certificates of investment are issued for maturity periods of three months to
five years. The return on |
|
| certificates
ranges from 14.5% to 18.5%. |
|
|
|
| 8. LEASE KEY MONEY |
|
| This
represents the security deposits received against lease contracts. The
amounts are refundable at the |
|
| expiry
of the respective lease periods. |
|
|
|
|
|
1999 |
1998 |
|
|
|
Note |
Rupees |
Rupees |
|
|
|
|
| 9. SHORT TERM FINANCES |
|
|
| From investment bank |
|
9.1 |
4,000,000 |
5,000,000 |
|
| From
a leasing company - unsecured |
|
9.2 |
2,804,751 |
- |
|
| From commercial banks |
|
9.3 |
12,207,628 |
12,207,628 |
|
|
|
|
--------------------- |
--------------------- |
|
|
|
|
19,012,379 |
17,207,628 |
|
|
============ |
============ |
|
|
| 9.1
This represents placement made by an investment bank of Rs. 4,000,000 ( 1998:
Rs 5,000,000) |
|
| repayable
on August 11, 1999 carrying markup at the rate of 19.75% per annum. This is
secured |
|
| by
pledge of WAPDA bonds (note 14). |
|
|
| 9.2
This represents placement received from a leasing company. The rate of
mark-up is 20.5% per |
|
| annum. |
|
|
| 9.3
Represents running finance availed out of total sanctioned facility of Rs. 15
million from a |
|
| commercial
bank. The facility is secured by way of registered hypothecation of leased
assets. The |
|
| rate
of mark-up charged by the bank is Re. 0.50 per Rs.l,000 per day. This is
stated after taking |
|
| credit
of Rs. 8.795 million for settlement with the bank. Documentation in this
respect is pending. |
|
|
|
|
|
1999 |
1998 |
|
|
|
Note |
Rupees |
Rupees |
|
|
|
|
|
| 10.
ACCRUED AND OTHER LIABILITIES |
|
| Accrued
return/mark-up on secured loans and finance |
|
28,863,504 |
28,828,993 |
|
| Accrued
return on Certificates of investment |
|
|
2,647,558 |
1,999,393 |
|
| Accrued
operating expenses |
|
|
330,656 |
352,221 |
|
| Unclaimed. dividend |
|
|
148,678 |
149,778 |
|
| Other liabilities |
|
10.1 |
1,521,633 |
190,636 |
|
|
|
|
--------------------- |
--------------------- |
|
|
|
|
33,512,029 |
31,521,021 |
|
|
|
|
============ |
============ |
|
|
|
|
|
|
| 10.1
This includes Rs.1,500,000 (1998: Rs. Nil) received as advance against sale
of short-term |
|
| investment (note 11.3) |
|
|
|
|
| 11.
CONTINGENCIES AND COMMITMENTS |
|
|
|
|
| Contingencies |
|
| 11.1
Guarantees given for repayment of finances amount to Rs. 21,773,300 (1998:Rs.
21,773,300). |
|
|
|
|
| Commitments |
|
--------------------- |
--------------------- |
|
| 11.2
Repurchase obligations of FIBs [Note 2.5(a)] |
|
5,419,180 |
4,164,548 |
|
|
============ |
============ |
|
|
|
|
| 11.3
The Company has executed an agreement to sell its total investment in shares
of Safa Rice |
|
| Mills
at a price of Rs.14.6 per share (note 16). |
|
|
|
|
|
| 12.
TANGIBLE FIXED ASSETS |
|
|
|
|
Cost at the |
Additions/ |
Cost at the |
Accumulated |
|
|
|
beginning |
(disposals)/ |
end of the |
depreciation |
Book value |
|
|
|
of the year |
adjustments |
year |
at the end of |
at the end of |
Depreciation |
Depreciation |
|
|
Rupees |
Rupees |
Rupees |
the year |
the year |
for the year |
rates |
|
|
|
Rupees |
Rupees |
Rupees |
Rupees |
|
| Owned- |
|
|
| Office premises and |
|
| car
parking |
369,000 |
-- |
369,000 |
150,678 |
218,322 |
18,450 |
5 |
|
|
| Office equipment |
1,770,5..39 |
113,500 |
1,884,039 |
1,031,125 |
852,914 |
131,737 |
20 |
|
|
| Furniture and fixtures |
1,117,747 |
-- |
1,117,747 |
522,153 |
595,594 |
100,597 |
10 |
|
|
| Office renovation |
2,150,641 |
-- |
2,150,641 |
1,901,183 |
249,458 |
405,189 |
3333 |
|
|
| Vehicles |
4,481,188 |
-- |
2,957,061 |
2,079,070 |
888,798 |
280,704 |
33 |
|
|
|
-1,513,320 |
|
|
|
|
|
--------------------- |
--------------------- |
--------------------- |
--------------------- |
--------------------- |
--------------------- |
|
| Sub-total |
9,889,115 |
113,500 |
8,489,295 |
5,684,209 |
2,805.09 |
936,677 |
|
|
|
(1,513,320) |
|
|
|
|
============ |
============ |
============ |
============ |
============ |
============ |
|
|
|
|
| Under Finance Lease - |
|
|
|
| Vehicles |
2,659,660 |
1,572,000 |
3,383,680 |
813,518 |
2,570,142 |
544,774 |
20 |
|
|
|
(848,000) |
|
|
--------------------- |
--------------------- |
--------------------- |
--------------------- |
--------------------- |
--------------------- |
|
| Sub- total |
2,659,660 |
1,572,000 |
3,383,660 |
813,518 |
2,570,142 |
544,774 |
|
|
|
|
(848,000) |
|
|
--------------------- |
--------------------- |
--------------------- |
--------------------- |
--------------------- |
--------------------- |
|
|
12,548,775 |
1,685,500 |
11,872,955 |
6,497,727 |
5,375,228 |
1,481,451 |
|
|
|
(2,361,320) |
|
|
|
|
|
============ |
============ |
============ |
============ |
============ |
============ |
|
| 1 9 9 8 |
11,833,394 |
1,491,611 |
12,548,775 |
6,303,060 |
6,245,715 |
1,467,405 |
|
|
|
(776,230) |
|
|
|
============ |
============ |
============ |
============ |
============ |
============ |
|
|
|
|
| 12.1
Particulars of disposals of fixed assets |
|
|
|
|
|
Original |
Accumulated |
Written down |
Sale |
Mode of |
|
|
cost |
depreciation |
value |
proceeds |
disposal |
Particulars of purchaser |
|
|
| Motor vehicle |
143,000 |
107,250 |
35,750 |
80,000 |
Negotiation |
Mr. Mukhtar Ahmed, Karachi |
|
| Motor vehicle |
396,000 |
297,000 |
99,000 |
120,000 |
Negotiation |
Mr. Nasir, Islamabad |
|
| Motor vehicle |
974,320 |
511,516 |
482,804 |
375,000 |
Negotiation |
Mr. Farukh Shabeer Guari, Islamabad |
|
| Motor vehicle |
848,000 |
371,010 |
476,990 |
84,800 |
Negotiation |
Mr. Badar-e-Munir Patel,
Gulshan-e-Iqbal, Karachi |
|
|
--------------------- |
--------------------- |
--------------------- |
--------------------- |
|
|
2,361,320 |
1,286,776 |
1,074,544 |
656,800 |
|
|
|
============ |
============ |
============ |
============ |
|
| 1 9 9 8 |
776,230 |
547,896 |
228,334 |
226,750 |
|
|
|
============ |
============ |
============ |
============ |
|
|
|
|
|
1999 |
1998 |
|
|
Note |
Rupees |
Rupees |
|
| 13.
NET INVESTMENT IN LEASE FINANCE |
|
| Minimum
lease payments receivable |
|
249,404,337 |
245,112,404 |
|
| Add: Residual value |
|
|
20,309,727 |
24,172,441 |
|
|
|
|
--------------------- |
--------------------- |
|
|
269,714,064 |
269,284,845 |
|
| Less:
Unear ned finance income |
|
58,730,264 |
39,493,569 |
|
|
|
|
--------------------- |
--------------------- |
|
| Net
investment in lease finance |
|
210,983,800 |
229,791,276 |
|
| Less:
Current portion of net investment in lease finance |
13.1 |
76,621,155 |
79,203,769 |
|
|
|
|
|
--------------------- |
--------------------- |
|
|
|
134,362,645 |
150,587,507 |
|
|
|
============ |
============ |
|
| 13.1
Current portion of net investment in lease finance |
|
76,621,155 |
79,203,769 |
|
| Less:
Provision for doubtful debts |
|
|
18,233,043 |
4,320,719 |
|
|
|
|
--------------------- |
--------------------- |
|
|
58,388,112 |
74,883,050 |
|
|
============ |
============ |
|
|
| 13.2
Included in the above is Rs. 42,844,947 in respect of a lessee company whose
management has |
|
| been
taken over by the company along with its associated companies. The management
of the |
|
| company
is confident that the borrower will soon be in a position to repay the
outstanding balance as |
|
| per
the revised repayment plan approved by the company and thus no provision is
required. |
|
|
| 14.
LONG TERM INVESTMENTS |
|
| 15%
10 year registered WAPDA Bonds (maturity 2002) |
|
4,500,000 |
4,500,000 |
|
| 15%
10 year Federal Investment Bonds (maturity 2003) |
14.1 |
- |
1,000,000 |
|
|
|
|
--------------------- |
--------------------- |
|
|
|
4,500,000 |
5,500,000 |
|
|
| The
above investments are made to meet the liquidity requirement as per NBFIs
regulations. |
|
|
| Investment in - |
|
|
|
| Associated
unlisted undertaking |
|
14.2 |
2,500,000 |
2,500,000 |
|
| Listed
companies/modarabas |
|
| [Aggregate
market value Rs.19,867,308 |
|
| (1998: Rs.21,306,182)] |
|
|
14.3 |
32,081,048 |
32,081,048 |
|
| Other unlisted company |
|
| Nil
(1998: 350,000) ordinary shares |
|
|
- |
3,500,000 |
|
|
|
--------------------- |
--------------------- |
|
|
|
34,581,048 |
38,081,048 |
|
| Less:
Provision for diminution in value of shares |
|
5,750,000 |
500,000 |
|
|
|
--------------------- |
--------------------- |
|
|
|
33,331,048 |
43,081,048 |
|
|
|
============ |
============ |
|
|
|
|
|
| 14.1
As at June 30, 1999 the company sold Government securities valuing. Rs.
5,000,000 |
|
| (1998:
4,000,000) under repurchase arrangement for a specified period of time. |
|
|
| 14.2
Investment in associated unlisted undertaking |
|
|
|
|
1999 |
1998 |
|
|
|
Note |
Rupees |
Rupees |
|
|
| National
Industrial Management Limited |
|
| 250,000
(1998: 2501000) ordinary shares |
|
14.2.1 |
2,500,000 |
2,500,000 |
|
|
|
|
============ |
============ |
|
|
| 14.2.1
Percentage of equity held in the investee company is 25% of its capital. The
name of Chief Executive of |
|
| of
the associated company is Mr. Rana M. Abu Obaida. As per last available
audited accounts for the |
|
| the
year ended June 30, 1997, the break-up per share including surplus on
revaluation of fixed assets is |
|
| Rs.
3.66. The break-up value per share excluding surplus on revaluation of fixed
assets is Rs. Nil. |
|
|
|
|
| 14.3
Investment in listed companies/modarabas |
|
| Associated undertakings |
|
|
| Industrial
Capital Modaraba |
|
|
| 574,436
(1998: 574,436)-modaraba certificates |
|
|
5,742,575 |
5,742,575 |
|
| Asset
Investment Bank Limited |
|
|
| 990,000
(1998: 990,000) ordinary shares |
|
9,949,500 |
9,949,500 |
|
|
--------------------- |
--------------------- |
|
|
|
15,692,075 |
15,692,075 |
|
|
|
| Others |
|
| First Hajveri Modaraba |
|
|
|
| 193,286
(1998:193,286) modaraba certificates |
|
1,424,615 |
1,424,615 |
|
| Sui
Northern Gas Pipeline Limited |
|
|
| 26,478
(1998: 26,478) ordinary shares |
|
697,503 |
697,503 |
|
| First
International Investment Bank Limited |
|
|
| 100
(1998:100) ordinary shares |
|
3,328 |
3,328 |
|
| Pakistan
Industrial Leasing Corporation Limited |
|
|
| 6,000
(1998: 5,000) ordinary shares |
|
186,000 |
186,000 |
|
| Nayab
Spinning & Weaving Mills Limited |
|
|
| 750,000 (1998: 750,000)
ordinary shares |
|
|
7,500,000 |
7,500,000 |
|
| Caravan
East Fabrics Limited |
|
|
| 650,000
(1998: 650,000) ordinary shares |
|
6,500,000 |
6,500,000 |
|
| Pakistan
Telecommunication Corporation Limited |
|
| 2,000
(1998: 2,000) ordinary shares |
|
77,527 |
77,527 |
|
|
--------------------- |
--------------------- |
|
|
|
16,388,973 |
16,388,973 |
|
|
|
--------------------- |
--------------------- |
|
|
|
32,081,048 |
32,081,048 |
|
|
|
============ |
============ |
|
|
| 14.4
Unless otherwise stated all shares/certificates/vouchers are of Rs.10 each. |
|
|
|
|
1999 |
1998 |
|
|
Note |
Rupees |
Rupees |
|
|
|
|
| 15.
LONG TERM DEPOSITS AND PREPAYMENTS |
|
| Deposits
on lease contracts |
|
419,750 |
262,550 |
|
| Prepaid
office rent (to an associated company) |
|
300,000 |
900,000 |
|
|
|
|
--------------------- |
--------------------- |
|
|
719,750 |
1,162,550 |
|
| Less: Current portion |
|
|
499,100 |
684,800 |
|
|
|
--------------------- |
--------------------- |
|
|
220,650 |
477,750 |
|
|
============ |
============ |
|
|
|
|
| 16.
SHORT TERM INVESTMENT |
|
| Sara Rice Mills Limited |
|
|
| 350,000
(1998: Nil) ordinary shares |
|
16.1 |
3,500,000 |
- |
|
|
============ |
============ |
|
|
| 16.1
Percentage of equity held in the investee company is 12.28% of its capital.
The name of the Chief |
|
| Executive
of the investee company is Mr. Parvaiz Aslam. As per last available audited
accounts for |
|
| the
year ended August 31, 1998 of the company, the break-up value per share
including surplus on |
|
| revaluation
of fixed assets is Rs.31.44. The break-up value per share excluding surplus
on revaluation |
|
| of
fixed assets is Rs.3.82 (notes 10.1 and 11.3). |
|
|
| 17.
ADVANCES, DEPOSITS, PREPAYMENTS AND |
|
| OTHER RECEIVABLES |
|
|
|
|
| Current
portion of deposits on lease contracts |
|
199,100 |
84,800 |
|
| Current
portion of prepaid office rent |
|
300,000 |
600,000 |
|
| Prepayments |
|
|
166,657 |
110,353 |
|
| Accrued income |
|
|
17.1 |
3,835,452 |
338,789 |
|
| Advance
income tax paid net of provision for taxation |
|
76,877 |
81,656 |
|
| Other
advances and receivables |
|
17.2 |
1,050,532 |
1,918,896 |
|
| Other
charges recoverable from lessees |
|
337,816 |
616,486 |
|
| Late
payment charges receivable |
|
1,663,736 |
- |
|
|
|
|
--------------------- |
--------------------- |
|
|
7,630,170 |
3,750,980 |
|
|
============ |
============ |
|
|
| 17.1
Includes accrued income of Rs.2,557,363 (1998: Rs. Nil) receivable from an
associated undertaking. |
|
| 17.2
This is stated net of provision of Rs.1,429,592 (1998: Nil). |
|
|
| 18.
CASH AND BANK BALANCES |
|
| Cash in hand |
|
|
1,704 |
39 |
|
| Balance
with State Bank of Pakistan |
|
300,000 |
300,000 |
|
| Balance with banks/DFIs |
|
|
| - on current accounts |
|
|
|
650,081 |
58,152 |
|
| - on deposit accounts |
|
|
18.1 |
9,761,457 |
14,096,472 |
|
| Certificate
of deposits with an investment bank |
18.1 |
14,400,000 |
- |
|
|
|
|
|
--------------------- |
--------------------- |
|
|
25,113,242 |
14,454,663 |
|
|
============ |
============ |
|
|
| 18.1
This represents amount deposited with an associated investment bank. |
|
|
| 19. INCOME FROM LEASING OPERATIONS |
|
| Return on lease contracts |
|
|
|
27,829,942 |
41,038,687 |
|
| Commitment
and other fees |
|
|
69,928 |
74,470 |
|
| Mark-up
on pre-leasing advances |
|
|
- |
4,350 |
|
| Late payment charges |
|
|
|
2,813,484 |
- |
|
|
--------------------- |
--------------------- |
|
|
|
30,713,354 |
41,117,507 |
|
|
|
============ |
============ |
|
|
|
|
|
| 20.
RETURN AND FINANCIAL CHARGES |
|
| Mark-up
on long term finance |
|
|
14,024,844 |
14,030,114 |
|
| Mark-up
on short term finance |
|
|
861,801 |
1.905,145 |
|
| Musharika
profit on long term fund |
|
|
3,403,110 |
3,000,734 |
|
| Musharika
profit on short term fund |
|
|
- |
2,150,761 |
|
| Charges
on obligation under finance lease |
|
|
384,905 |
290,309 |
|
| Return
on Certificates of investment |
|
|
1,455,750 |
3,591,635 |
|
| Other financial charges |
|
|
|
158,870 |
137,764 |
|
|
|
|
|
--------------------- |
--------------------- |
|
|
|
20,289,280 |
25,106,462 |
|
|
|
============ |
============ |
|
|
|
|
|
| 21.
ADMINISTRATIVE AND OPERATING EXPENSES |
|
| Salaries,
allowances and benefits |
|
|
4,105,662 |
5,801,085 |
|
| Rent |
|
|
|
600,000 |
600,000 |
|
| Telephone,
electricity and utilities |
|
|
989,216 |
1,047,243 |
|
| Printing and stationery |
|
|
|
139,002 |
177,519 |
|
| Insurance |
|
|
|
324,762 |
354,520 |
|
| Travelling
and conveyance |
|
|
591,695 |
479,518 |
|
| Vehicle running expenses |
|
|
|
717,199 |
836,350 |
|
| Office maintenance |
|
|
|
99,556 |
180,871 |
|
| Legal
and professional charges |
|
21.1 |
397,309 |
261,513 |
|
| Depreciation
on fixed assets |
|
|
1,481,451 |
1,467,485 |
|
| Donation/Zakat |
|
|
|
- |
1,624 |
|
| Other operating expenses |
|
|
|
660,670 |
750,363 |
|
|
|
|
|
--------------------- |
--------------------- |
|
|
|
l0, l06,522 |
11,958,091 |
|
|
|
============ |
============ |
|
|
| 21.1
Legal and professional charges includes auditors' remuneration and expenses
as follows: |
|
| Audit fee |
|
|
50,000 |
50,000 |
|
| Other
advisory services (includes Rs. 30,000 relating to the prior year) |
60,000 |
- |
|
| Tax service |
|
|
135,457 |
75,000 |
|
| Out-of-pocket expenses |
|
|
10,000 |
10,000 |
|
|
|
|
--------------------- |
--------------------- |
|
|
|
|
255,457 |
135,000' |
|
|
|
|
============ |
============ |
|
|
| 22. TAXATION |
|
|
| 22.1 Current |
|
|
| The
assessments of all the years upto and including assessment year 1998-99 have
been finalized by |
|
| the
Income Tax Department. However, the company has filed appeals against all the
orders passed by |
|
| the
relevant tax authorities in respect of certain disallowances. The appeals
have been heard but the |
|
| decisions
are awaited. However, full provision for taxation has been made in these
accounts. |
|
|
| 22.2 Deferred |
|
|
| Deferred
taxation arising due to timing differences computed under the liability
method is estimated at |
|
| Rs.14.82
million (1998:Rs.19.74 million) of which Rs.4.65 million debit is in respect
of the current |
|
| year.
The company would have to appropriate Rs.3.95 million in the current
financial year (being one- |
|
| fifth
of the opening balance of deferred tax liability) to achieve compliance with
Circular 16 of 1999 |
|
| issued
by Securities and Exchange Commission of Pakistan. However, as the deferred
tax debit for |
|
| the
year exceeds this amount, no appropriation for deferred tax is required. |
|
|
| 23.
REMUNERATION OF CHIEF EXECUTIVE, DIRECTORS AND EXECUTIVES |
|
|
| The
remuneration of Chief Executive and whole time working Directors and
Executives charged in these accounts is as follows: |
|
|
|
|
1999 |
|
1998 |
|
|
------------------------------------------------------------------------ |
------------------------------------------------------------------------ |
|
|
Chief |
|
Chief |
|
|
|
Executive |
Directors |
Executives |
Executive |
Directors |
Executives |
|
|
------------------------------------------------------------------------ |
------------------------------------------------------------------------ |
|
|
Rupees |
Rupees |
Rupees |
Rupees |
Rupees |
Rupees |
|
|
| Managerial remuneration |
580,644 |
- |
865,110 |
580,644 |
1,064,514 |
1,016,333 |
|
|
| Housing and utilities |
319,356 |
- |
475,807 |
319,356 |
585,485 |
519,949 |
|
|
| Reimbursement
of medical |
|
|
|
| expenses |
43,015 |
55,442 |
130,699 |
958 |
- |
126,660 |
|
|
|
--------------------- |
--------------------- |
--------------------- |
--------------------- |
--------------------- |
--------------------- |
|
|
943,015 |
55,442 |
1,471,616 |
900,958 |
1,649,999 |
1,662,942 |
|
|
============ |
============ |
============ |
============ |
============ |
============ |
|
| Number of persons |
1 |
2 |
2 |
1 |
2 |
2 |
|
|
============ |
============ |
============ |
============ |
============ |
============ |
|
|
|
|
|
|
| The
Chief Executive, Directors and Executives are also provided with free use of
company maintained cars. |
|
|
|
|
|
1999 |
1998 |
|
|
|
Rupees |
Rupees |
|
| 24.
TRANSACTIONS WITH ASSOCIATED UNDERTAKINGS/RELATED |
|
| PARTIES
OTHER THAN THOSE STATED HEREINABOVE |
|
| Rent
for office premises charged by National Industrial Management Limited |
600,000 |
600,000 |
|
| Placement
of deposit (net) with Asset Investment Bank Limited |
|
14,900,000 |
3,086,680 |
|
| Profit
on deposit from Asset Investment Bank Limited |
|
2,586,391 |
2,410,256 |
|
| Lease
rentals paid on behalf of Asset Investment Bank Limited |
|
- |
29,192 |
|
|
| 25.
CREDIT RISK AND CONCENTRATION OF CREDIT RISK |
|
| The
company's credit risk exposure is not significantly different from that
reflected in the financial statements. |
|
|
| Natlease
follows two types of guidelines. Internally, the management monitors credit
risk through review and |
|
| assessment
of the clients exposure and credit worthiness. Externally, it adheres to the
regulations issued by the |
|
| State
Bank of Pakistan and Securities and Exchange Commission of Pakistan for
Non-Banking Financial |
|
| Institution
(NBFIs). The management classifies a particular lease on the basis of rules
for conducting the |
|
| business
of NBFIs and also assess them on the basis of internal policies. |
|
|
| Detail
of the industry sector analysis of lease portfolio is given below: |
|
· |
|
|
|
|
1 999 |
|
1 998 |
|
|
|
Rupees |
% |
Rupees |
% |
|
|
| Garments |
61,144,007 |
28.98 |
61,144,007 |
26.61 |
|
| Textile composite |
47,454,372 |
22.49 |
44,806,000 |
19.50 |
|
| Chemicals and pharmaceuticals |
31,007,306 |
14.70 |
38,851,000 |
16.91 |
|
| Textile spinning |
17,707,165 |
8.39 |
27,873,000 |
12.13 |
|
| Leather and footwear |
16,916,464 |
8.02 |
28,978,000 |
12.61 |
|
| Cement |
14,752,744 |
6.99 |
5,613,000 |
2.53 |
|
| Sugar and allied |
5,000,000 |
2.37 |
4,774,993 |
2.08 |
|
| Banks and financial institutions |
1,999,000 |
0.95 |
2,149,000 |
0.94 |
|
| Others |
15,002,742 |
7.11 |
15,402,276 |
6.70 |
|
|
--------------------- |
--------------------- |
--------------------- |
--------------------- |
|
|
210,983,800 |
100.00 |
229,791,276 |
100.00 |
|
|
============ |
============ |
============ |
============ |
|
|
| In
addition, the company has made certain investments in shares and Government
Securities. For details |
|
| refer
note 14 to these accounts. |
|
|
| 26.
FAIR VALUE OF FINANCIAL INSTRUMENTS |
|
|
|
| The
table below sets out the estimated fair values of balance sheet financial
instruments with their respective book |
|
| values
as of June 30, 1999. The fair value is the amount for which an asset can be
exchanged, or a liability settled, |
|
| between
knowledgeable, willing parties in an arm's length transaction. Consequently
differences can arise between |
|
| book
value and the fair value estimates. |
|
|
|
|
Book |
|
|
|
value over |
|
|
Book value |
Fair value |
Fair value |
|
|
Rupees |
Rupees |
Rupees |
|
| Long term investments |
|
|
| Equity investments |
28,831,048 |
20,782,306 |
8,048,742 |
|
|
============ |
============ |
============ |
|
|
| The
fair value of long term quoted equity investments is based on quoted market
prices while unquoted equity |
|
| investments
are stated at the break-up values. |
|
|
| Management
intends to hold these investments for a long term period and considers the
decline in market value |
|
| temporary.
Therefore no additional provision is considered necessary. |
|
| The
estimated fair value of all other balance sheet financial instruments are not
considered significantly different |
|
| from their book values. |
|
|
| 27.
INTEREST RATE RISK MANAGEMENT |
|
| The
company manages this risk by matching the repricing of their assets and
liabilities. Interest rate risk and |
|
| sensitivity
of the company. The company's interest rate sensitivity position, based on
the earlier of contractual |
|
| repricing
or maturity dates, is as follows: |
|
|
1 9 9 9 |
|
|
|
More than one |
|
|
|
Less than |
year and less |
More than |
Not exposed |
|
|
|
|
one year |
than five years |
five years |
to IRR |
Total |
|
|
|
(Rupees) |
(Rupees) |
(Rupees) |
(Rupees) |
(Rupees) |
|
|
| ASSETS |
|
| Tangible fixed assets |
- |
- |
- |
53,752.28 |
5,375,228 |
|
|
| Net investment in lease finance |
49,050,645 |
88,607,531 |
- |
55,092,581 |
192,750,757 |
|
|
| Long term investments |
- |
4,500,000 |
- |
28,831,048 |
33,331,048 |
|
|
|
| Long term deposits and prepayments |
- |
- |
- |
220,650 |
220,650 |
|
|
| Short term investment |
3,500,000 |
- |
- |
- |
3,500,000 |
|
|
| Advances,
deposits, prepayments and |
|
|
| other receivables |
- |
- |
- |
7,630,170 |
7,630,170 |
|
|
| Cash and bank balances |
24, 811,538 |
- |
- |
301,704 |
25,113,242 |
|
|
|
--------------------- |
--------------------- |
--------------------- |
--------------------- |
--------------------- |
|
|
| A |
77,362,183 |
93,107,531 |
- |
97,451,381 |
267,921,095 |
|
|
|
============ |
============ |
============ |
============ |
============ |
|
|
| EQUITY
AND MATURITIES |
|
| Share
capital and reserves |
|
101,775,479 |
101,775,479 |
|
|
|
| Redeemable capital |
29,925,882 |
16,859,092 |
- |
- |
46,784,974 |
|
|
|
| Long term finance |
29,163,536 |
13,333,332 |
- |
- |
42,496,868 |
|
|
|
| Obligations under finance lease |
907,226 |
1,045,704 |
- |
- |
1,952,930 |
|
|
|
| Certificates of investment |
6,400,000 |
200,000 |
- |
- |
6,600,000 |
|
|
|
| Lease key money |
- |
- |
- |
15,786,436 |
15,786,436 |
|
|
|
| Short term finances |
19,012,379 |
- |
- |
- |
19,012,379 |
|
|
|
| Accrued and other liabilities |
- |
- |
- |
33,512,029 |
33,512,029 |
|
|
|
|
--------------------- |
--------------------- |
--------------------- |
--------------------- |
--------------------- |
|
|
|
| B |
85,409,023 |
31,438,128 |
- |
151,073,944 |
267,921,095 |
|
|
|
|
============ |
============ |
============ |
============ |
============ |
|
| IRR Sensitivity gap (A-B) |
(8,046,840) |
61,669,403 |
- |
(53,622,563) |
|
|
| Cumulative IRR Sensitivity gap |
(8,046,840) |
53,622,563 |
53,622,563 |
- |
|
|
|
|
|
1 9 9 8 |
|
|
|
More than one |
|
|
|
Less than |
year and less |
More than |
Not exposed |
|
|
|
|
one year |
than five years |
five years |
to IRR |
Total |
|
|
|
(Rupees) |
(Rupees) |
(Rupees) |
(Rupees) |
(Rupees) |
|
|
|
|
| ASSETS |
|
| Tangible fixed assets |
- |
- |
- |
6,245,715 |
6,245,715 |
|
|
| Net investment in lease finance |
70,976,005 |
61,546,243 |
- |
92,948,309 |
225,470,557 |
|
|
| Long term investments |
- |
5,500,000 |
- |
37,581,048 |
43,081,048 |
|
|
| Long term deposits and prepayments |
- |
- |
- |
477,750 |
477,750 |
|
|
| Advance,
deposits, prepayments and |
|
|
|
| other receivables |
- |
- |
- |
3,750,980 |
3,750,980 |
|
|
| Cash and bank balances |
14,096,472 |
- |
- |
358,191 |
14,454,663 |
|
|
|
--------------------- |
--------------------- |
--------------------- |
--------------------- |
--------------------- |
|
|
| A |
85,072,477 |
67,046,243 |
- |
141,361,993 |
293,480,713 |
|
|
|
============ |
============ |
============ |
============ |
============ |
|
|
| EQUITY
AND LIABlLITIES |
|
|
| Share capital and reserves |
- |
- |
- |
115,301,71 6 |
115,301,716 |
|
|
|
|
| Redeemable capital ' |
9,968,949 |
41,464,385 |
- |
- |
51,433,334 |
|
|
| Long term finance |
23,996,868 |
20,000,000 |
- |
- |
43,996,868 |
|
|
| Obligations under finance lease |
920,772 |
585,498 |
- |
- |
1,506,270 |
|
|
| Certificates of investment |
9,000,000 |
2,100,000 |
- |
- |
11,100,000 |
|
|
| Lease
key money |
- |
- |
- |
19,896,441 |
19,896,441 |
|
|
|
|
| Short term finances |
- |
17,207,628 |
- |
- |
17,207,628 |
|
|
| Accrued and other liabilities |
1,517,435 |
- |
- |
31,521,021 |
33,038,456 |
|
|
|
|
|
--------------------- |
--------------------- |
--------------------- |
--------------------- |
--------------------- |
|
|
| B |
45,404,024 |
81,357,511 |
- |
166,719,178 |
293,480,713 |
|
|
|
|
|
============ |
============ |
============ |
============ |
============ |
|
| IRR Sensitivity gap (A-B) |
39,668,453 |
(14,311,268) |
- |
(25,357,185) |
- |
|
| Cumulative IRR Sensitivity gap |
39,668,453 |
25,357,185 |
25,357,185 |
- |
- |
|
|
| The
total IRR Sensitivity gap represents the net amounts of on - balance sheet
items. |
|
|
| The
effective interest rate for each of the monetary financial instruments is as
follows: |
|
|
|
|
|
Effective |
Effective |
|
|
|
|
interest |
interest |
|
|
|
|
rate risk |
rate risk |
|
|
|
|
1999 |
1998 |
|
|
|
|
% |
% |
|
| Assets |
|
| Net
investment in lease finance (net of provisions) |
|
16.12 |
18.94 |
|
| Long
term investments (excluding shares) |
|
|
15.00 |
15.00 |
|
| Cash and bank balances |
|
|
19 |
17.87 |
|
| Liabilities |
|
|
| Redeemable capital |
|
|
19.75 |
19.75 |
|
| Long term finance |
|
|
17.58 |
17.58 |
|
| Obligations
under finance lease |
|
|
21.00 |
20.00 |
|
| Certificates of investment |
|
|
16.45 |
17.69 |
|
| Short term finances |
|
|
20.62 |
22.87 |
|
|
|
|
|
1999 |
1998 |
|
|
|
|
Rupees |
Rupees |
|
|
| 28.
BASIC (Loss)/EARNINGS PER SHARE |
|
| Basic
(loss/earnings per share is calculated by dividing the net profit for the
year by the number of shares |
|
| outstanding
during the year as follows : |
|
|
| (Loss)/profit
after tax for the year |
|
|
(13,526,237) |
4,903,124 |
|
|
|
|
============ |
============ |
|
| Weighted
average number of shares outstanding during the year |
9,536,800 |
9,536,800 |
|
|
|
|
============ |
============ |
|
| Basic
(loss)/earnings per share |
|
|
(1.42) |
0.51 |
|
|
============ |
============ |
|
|
| 28.1
No figure for diluted (loss)/earnings per share has been presented as the
company has not issued any |
|
| instruments
which would have an impact on (loss)/earnings per share when exercised. |
|
|
| 29. GENERAL |
|
| 29.1
All figures have been rounded off to the nearest rupee. |
|
| 29.2
Previous year's figures have been re-arranged wherever necessary for the
purposes of comparison. |
|
|
|
|
| DR. KHALID IQBAL |
SHAMIM I. JUNEJO |
M.A. REHMANI |
|
| Chairman |
Chief Executive |
|
Director |
|
|
|
| PATTERN
OF SHARE HOLDINGS AS AT JUNE 30, 1999 |
|
|
|
| NUMBER OF |
|
SHAREHOLDING |
|
TOTAL |
|
| SHAREHOLDERS |
|
|
SHARE HELD |
|
| 53 |
1 |
-- |
100 |
5 300 |
|
| 211 |
101 |
-- |
500 |
85 200 |
|
| 183 |
501 |
-- |
1000 |
173600 |
|
|
| 155 |
1001 |
-- |
5000 |
435600 |
|
|
| 35 |
5001 |
-- |
10000 |
276700 |
|
|
| 8 |
10001 |
-- |
15000 |
103800 |
|
|
| 9 |
15001 |
-- |
20000 |
178500 |
|
|
| 3 |
25001 |
-- |
30000 |
86500 |
|
|
| 5 |
30001 |
-- |
35000 |
156,900 |
|
|
| 2 |
35001 |
-- |
40000 |
79 900 |
|
|
| 2 |
40001 |
-- |
45000 |
84,700 |
|
|
| 2 |
45001 |
-- |
50000 |
96,000 |
|
|
| 1 |
50001 |
-- |
55000 |
50,400 |
|
|
| 2 |
55001 |
-- |
60000 |
118,700 |
|
|
| 1 |
65001 |
-- |
70000 |
70,000 |
|
|
| 2 |
85001 |
-- |
90000 |
176,700 |
|
|
| 1 |
95001 |
-- |
100000 |
100,000 |
|
|
| 1 |
105001 |
-- |
110000 |
108 000 |
|
|
| 1 |
155001 |
-- |
160000 |
160 000 |
|
|
| 1 |
190001 |
-- |
195000 |
191 600 |
|
|
| 1 |
195001 |
-- |
200000 |
200 000 |
|
|
| 2 |
200001 |
-- |
205000 |
402 500 |
|
|
| 1 |
215001 |
-- |
220000 |
220 000 |
|
|
| 1 |
230001 |
-- |
235000 |
234 400 |
|
|
| 2 |
255001 |
-- |
260000 |
520 000 |
|
|
| 1 |
295001 |
-- |
300000 |
300,000 |
|
|
| 3 |
345001 |
-- |
350000 |
1,045,300 |
|
|
| 1 |
360001 |
-- |
365000 |
361,500 |
|
|
| 1 |
395001 |
-- |
400000 |
400,000 |
|
|
| 1 |
505001 |
-- |
510000 |
510,000 |
|
|
| 1 |
795001 |
-- |
800000 |
800,000 |
|
|
| 1 |
850001 |
-- |
855000 |
855,000 |
|
|
| 1 |
945001 |
-- |
950000 |
950,000 |
|
|
| -------------------- |
-------------------- |
-------------------- |
-------------------- |
-------------------- |
|
|
| 695 |
|
9,536,800 |
|
|
| ============ |
============ |
============ |
============ |
============ |
|
|
|
| CATEGORIES OF |
MEMBER OF |
SHARES |
PERCENTAGE |
|
|
| SHAREHOLDERS |
SHAREHOLDERS |
HELD |
|
|
|
| INDIVIDUALS |
667 |
4,850,600 |
50.862 |
|
|
| INVESTMENT COMPANIES |
8 |
1,349,600 |
14.151 |
|
|
| JOINT STOCK COMPANIES |
10 |
1,656,000 |
17.364 |
|
|
| FINANCIAL INSTITUTIONS |
3 |
811,000 |
8.504 |
|
|
| MODARABAS |
6 |
869,000 |
9.112 |
|
|
| OTHERS |
1 |
600 |
0.006 |
|
|
|
-------------------- |
-------------------- |
-------------------- |
|
|
| TOTAL |
695 |
9,536,800 |
100.00 |
|
|
|
============ |
============ |
============ |
|
|
|
|
|
|
|
|
|
|
|
|
