| 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 |
|
| l-B, 1st Floor, Ali Plaza, |
|
| Khayaban-e-Qauid-e-Azam, |
|
| Blue Area, Islamabad |
|
| Phones: 270626 & 822513 |
|
| Fax No. (92-51) 272506 |
|
|
| Head Office |
|
| 9th
Floor, Lakson Square Building No. 1, |
|
| 265 R. A. Lines, Karachi. |
|
| Phones:
5687412, 5687419, 5689580 & 5682027 |
|
| Fax No. (92-21) 5684259 |
|
| Telex
No. 20538 ASSET PK. |
|
| 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. |
|
|
|
|
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 |
|
| 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 |
|
