| Orix Leasing Pakistan Limited |
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| Annual
Report 1999 |
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| CONTENTS |
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| COMPANY
INFORMATION |
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| ORIX
CORPORATION, JAPAN |
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| ASSOCIATED
COMPANIES |
|
| NOTICE
OF MEETING |
|
| REPORT
OF THE DIRECTORS |
|
| AUDITORS'
REPORT |
|
| FINANCIAL
STATEMENTS OF THE COMPANY |
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| PATTERN
OF SHAREHOLDING |
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| ORIX
GROUP DIRECTORY |
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| COMPANY
INFORMATION |
|
|
| BOARD
OF DIRECTORS |
|
| Mr.
Yoshihiko Miyauchi |
(alternate Mr. Takafumi
Kanda) |
|
Chairman |
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|
| Mr.
Shakirullah Durrani |
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|
Vice Chairman |
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| Mr.
Takeshi Sato |
(alternate Mr. Yuki
Ohshima) |
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| Mr.
Genichi Fujinaga |
(alternate Mr. Nagaaki
Esaki) |
|
| Dr.
Najeeb Samie |
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| Mr.
Shaheen Amin |
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| Mr.
Mohammad Qamrul Haq |
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| Mr.
Humayun Murad |
|
Chief Executive |
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| COMPANY
SECRETARY |
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| Mr.
Ramon Alfrey - ACA |
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| BANKS
AND LENDING INSTITUTIONS |
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| Banks |
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| ABN-AMRO
Bank N.V. |
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| AI
Faysal Investment Bank Limited |
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| AI-Meezan
Investment Bank Limited |
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| ANZ
Grindlays Bank Limited |
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| Bank
of America NT & SA |
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| Citibank N.A. |
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| Faysal
Bank Limited |
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| First
International Investment Bank Limited |
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| Habib
Bank Limited |
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| Muslim
Commercial Bank Limited |
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| Oman
International Bank SAOG |
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| Standard
Chartered Bank |
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| The
Bank of Tokyo-Mitsubishi Limited |
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| United
Bank Limited |
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| DFIs
and Lending Institutions |
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| Asian
Development Bank |
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| F.
M. O., The Netherlands |
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| International
Bank for Reconstruction and Development |
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| International
Finance Corporation |
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| Pakistan
Kuwait Investment Company (Private) Limited |
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| Saudi
Pak Industrial & Agricultural Investment Company (Private) Limited |
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| AUDITORS |
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| Sidat
Hyder Qamar & Co., Chartered Accountants |
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| LEGAL
ADVISORS |
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| Mansoor
Ahmad Khan & Co. |
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| Walker
Martineau & Saleem |
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| REGISTRARS
AND SHARE TRANSFER OFFICE |
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| Noble
Computer Services (Private) Limited |
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| 2nd
Floor, AI-Manzoor Building |
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| Dr.
Ziauddin Ahmed Road, Karachi |
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| REGISTERED
OFFICE & HEAD OFFICE |
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| Overseas
Investors Chamber of Commerce Building |
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| Talpur
Road, Karachi - 74000 |
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| Tel:
2426020-9 Fax: 2425897 |
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| BRANCH
OFFICES |
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|
| Lahore |
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| State
Life Building, Sir Aga Khan III Road (Davis Road), Lahore- 54000. |
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| Tel:
6369946, 6301527, 6302620, 6304258, 6301866 |
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| and
6302897 Fax: 6305024 |
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| Faisalabad |
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| 2nd
Floor, Sitara Towers, Bilal Chowk, Civil Lines, Faisalabad. |
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| Tel:
633926 and 633811-3 Fax: 633927 |
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| Sialkot |
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| 1st
Floor, Goolam Kadir Arcade, Aziz Shaheed Road, Sialkot Cantt. |
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| Tel:
260767, 260616 and 260877 Fax: 269548 |
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| Peshawar |
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| 1st
Floor, State Life Building, The Mall, Peshawar. |
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| Tel:
279789 and 278647 Fax: 273389 |
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| Universal
Access Number (UAN): 111- 24 24 24 |
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| E-mail:
olp@orix-pak.com |
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| Website:
www.orix-pak.com |
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| ORIX
CORPORATION |
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| Japan's
Leading Diversified Financial Services Institution |
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| ORIX
Corporation is Japan's leading diversified financial services institution
with assets in |
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| excess
of US $ 45 billion. Founded as a leasing specialist in 1964, ORIX has
developed niche |
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| markets,
including those for installment loans, life insurance and real estate
services in Japan |
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| and
21 countries overseas. In addition to being a listed Company in Japan, in
September 1998 |
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| ORIX
listed its shares on the New York Stock Exchange, (NYSE), becoming the
twelfth |
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| Japanese
Company on the NYSE. |
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| Business
Operations- |
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| ORIX's
strength lies in its ability to anticipate change and create new business
based on fresh |
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| concepts
that go beyond existing frameworks. The Company is known for its flexibility
and |
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| provides
specialised, innovative support across a broad range of financial services
including |
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| lease
financing, rentals, loans (corporate finance, housing and card loans),
installment loans, |
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| securities
related services, venture capital, life insurance, trust and banking,
commodity funds |
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| and
management of real estate. |
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| ORIX
has approximately 241,000 vehicles under automobile leasing, the largest
number in the |
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| Japanese
automobile leasing industry. The Company owns and maintains 23 Airbus 320 |
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| aircraft
and one Boeing 737 aircraft which are given on operating lease to airlines
around the |
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| world.
As a pioneer of equipment rental business in Japan, ORIX has approximately
20,000 |
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| types
of equipment and more than 350,000 individual items under rental. ORIX Life
Insurance |
|
| Corporation
provides "ORIX Direct" insurance which is Japan's first range of
whole life, |
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| endowment
and term life insurance products offered through direct channels. |
|
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| International
Activities: |
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| Since
entering Hong Kong in 1971, ORIX has actively expanded its international
activities and |
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| has
built a network of 45 companies in 21 countries. ORIX's approach to
international |
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| expansion
has been to either establish wholly owned operations or set-up joint ventures
with |
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| strong
local partners. In Singapore, Malaysia, Hong Kong and Taiwan ORIX offers
automobile |
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| maintenance
leases in addition to direct financing leases. In the United States, ORIX has |
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| undertaken
a diverse range of financial and real estate related businesses, including
corporate |
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| finance
and real estate development and financing operations. |
|
|
| (For
full directory see pages 42 to 48) |
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| ORIX
GROUP, JAPAN |
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|
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| FINANCIAL
HIGHLIGHTS |
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|
(For the year ended March 31) |
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|
Translation
into |
|
|
|
|
|
Japanese Yen
(millions) |
US Dollars
(thousands) |
|
|
|
|
|
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|
1999 |
1998 |
1999 |
1998 |
|
|
| Total Revenues |
|
593,941 |
507,143 |
5,015,123 |
4,282,217 |
|
|
| Net
Profit after Tax |
25,621 |
23,731 |
216,339 |
200,380 |
|
|
| Shareholders'
Equity |
327,843 |
313,821 |
2,768,242 |
2,649,844 |
|
|
| Total Assets |
|
5,347,636 |
5,574,309 |
45,154,403 |
47,068,386 |
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|
|
| Note:
The dollar amounts above represent translations of Japanese yen at an
exchange rate of |
|
| ¥
11843 to US $1. |
|
|
| ORIX'S
PRINCIPAL ACTIVITIES |
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| DIRECT
FINANCE LEASES |
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| Aircraft
and Marine Vessels |
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| Automobiles |
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| Industrial
Equipment |
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| Information
related and office equipment |
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| OPERATING
LEASES |
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| Aircraft |
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| Marine Vessels |
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| Measuring
Analytical Equipment |
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| Information-related
Equipment |
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| Automobiles |
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| INSTALLMENT
LOANS |
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| Corporate
Finance |
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| Housing Loans |
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| Card Loans |
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| OTHER
OPERATIONS |
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| Life insurance |
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| Trust
and Banking |
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| Securities
Brokerage |
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| Securities
Investment |
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| Real
Estate and Development Brokering |
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| Venture
Capital Investment |
|
| Futures
and Options Trading |
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| Commodities
Funds |
|
| Computer
Software Development |
|
| Insurance
Agency Services |
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| Ship
Management |
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| Commercial
Mortgage Servicing |
|
|
| ASSOCIATED
COMPANIES |
|
|
| OVERSEAS
JOINT VENTURES |
|
|
| 1.Oman
ORIX Leasing Company SAOG (Oman ORIX) |
|
|
| Oman
ORIX in which ORIX Leasing Pakistan Limited holds 20.25% of equity and
provides |
|
| management
support, achieved strong growth in volume and profits in 1998. Net profit
after tax rose |
|
| by
64% to Rial Omani (RO) 542,403 (Pak Rs. 72.1 million) from RO 331,833 (Pak
Rs. 38.9 million) |
|
| enabling
the Company to declare a dividend of 11%. Purchase cost of new business
written during |
|
| the
year increased to RO 13.6 million (Pak Rs. 1.8 billion) compared to RO 10
million (Pak Rs. 1.2 |
|
| billion)
last year and gross lease receivables increased by 39% to RO 18 million (Pak
Rs. 2.39 |
|
| billion).
Oman ORIX has total assets of RO 18.4 million (Pak Rs. 2.4 billion) and a net
worth of RO |
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| 5.134
million (Pak Rs. 682.8 million). |
|
|
| Oman
ORIX wrote 1,469 contracts for all type of assets including motor cars,
construction, |
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| earthmoving
and transportation equipment, information technology equipment and plant and |
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| machinery.
The Company's lessees include individuals, small and medium size companies
and |
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| large
sub contractors in diverse economic sectors including services, trading and
contracting, |
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| construction
and manufacturing. |
|
|
| Oman
ORIX continues to focus on its core business of lease and hire purchase
financing and plans |
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| to
expand geographical reach of the business by opening branches in other main
cities of the |
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| Sultanate. |
|
|
| 2.ORIX
Leasing Egypt SAE (ORIX Egypt) |
|
|
| ORIX
Corporation, Japan and ORIX Leasing Pakistan each hold 23% of ORIX Egypt's
equity. The |
|
| Company
started operations in November 1997 and has established a good business base.
ORIX |
|
| Egypt's
first accounting period ended on December 31, 1998 representing fourteen
months |
|
| commercial
operations. |
|
|
| ORIX
Egypt earned a profit before tax of Egyptian Pounds (EP) 904,160 (Pak Rs.
13.1 million) in its |
|
| first
accounting period. Business volume was good with purchase cost of leases
written amounting |
|
| to
EP 24.4 million (Pak Rs. 355.5 million) and related gross lease receivables
of EP 30.5 million |
|
| (Pak
Rs. 444.4 million). The Egyptian economy is performing well and ORIX Egypt is
well placed to |
|
| avail
business opportunities which will increase as the concept of leasing which is
new in Egypt |
|
| becomes
familiar. The Company continues to focus on needs of small and medium sized
business |
|
| which
enables it to diversify risk and earn good spreads. |
|
|
| JOINT
VENTURE IN PAKISTAN |
|
|
| ORIX
Investment Bank Pakistan Limited (OIB) |
|
|
| ORIX
Corporation, Japan and ORIX Leasing Pakistan hold 20% and 15% respectively of
OIB's |
|
| equity.
OIB earned a profit of Rs. 32.2 million for the year to June 30, 1999. The
bank continues to |
|
| concentrate
on maintaining a high quality loan portfolio while seeking to improve fee
based income |
|
| from
advisory services. As experienced by other financial institutions in
Pakistan, OIB's business is |
|
| also
impacted by the slow economic conditions prevailing in the Country. The Bank
is primarily |
|
| engaged
in providing a range of investment banking products which include corporate
advisory |
|
| services,
project packaging, structuring and placement of capital market debt products,
issuance |
|
| and
discounting of bankers acceptance and treasury operations. At June 30, 1999
OIB had total |
|
| assets
in excess of Rs. 1.8 billion. |
|
|
| NOTICE
OF MEETING |
|
|
| Notice
is hereby given that the Thirteenth Annual General Meeting of the Company
will be held |
|
| at
Overseas Investors Chamber of Commerce Building, Talpur Road, Karachi on,
Tuesday, |
|
| November
2,1999 at 11:30 am to transact the following business: |
|
|
| ORDINARY
BUSINESS |
|
|
| 1.To
receive, consider and adopt the audited accounts together with the Directors'
and |
|
| Auditors'
Report for the year ended dune 30, 1999. |
|
|
| 2.
To approve the payment of cash dividend to the Shareholders at the rate of
Rs. 4/- per share |
|
| of
Rs. 10/- each for the year ended dune 30,1999. |
|
|
| 3.To
appoint Auditors and fix their remuneration. The present Auditors Messrs.
Sidat Hyder |
|
| Qamar
& Co., Chartered Accountants, retire and being eligible, offer themselves
for re- |
|
| appointment. |
|
|
| 4.
To elect 8 (eight) Directors of the Company as fixed by the Board of
Directors for a period of |
|
| three
years under Section 178 of the Companies Ordinance, 1984. |
|
|
| The
following are the retiring Directors who being eligible have notified their
intention to offer |
|
| themselves
for election. |
|
|
| 1.
Mr. Yoshihiko Miyauchi |
|
5. Dr. Najeeb Samie |
|
| 2.
Mr. Shakirullah Durrani |
|
6. Mr. Shaheen Amin |
|
| 3.
Mr. Takeshi Sato |
|
7. Mr. Mohammad Qamrul
Haq |
|
| 4.
Mr. Genichi Fujinaga |
|
8. Mr. Humayun Murad |
|
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| SPECIAL
BUSINESS: (STATEMENTS ATTACHED) |
|
|
| 5.
To approve investment in a joint venture leasing company in the Kingdom of
Saudi Arabia. |
|
| 6.
To approve the remuneration of Executive Directors including the Chief
Executive. |
|
| 7.
To transact any other business, with permission of the Chair. |
|
|
| Karachi:
September 22, 1999 |
|
BY ORDER OF THE BOARD |
|
|
|
|
|
|
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|
RAMON ALFREY - ACA |
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|
Company Secretary |
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|
|
|
|
| Notes: |
|
|
| i)
The Register of Members of the Company will be closed from October 4, 1999 to
October 11, |
|
| 1999
(both days inclusive). Transfers received at our registrars, Messrs. Noble
Computer |
|
| Services
(Private) Limited, 2nd Floor, AI-Manzoor Building, Dr. Ziauddin Ahmed Road, |
|
| Karachi
at the close of business on October 3, 1999, will be treated in time for the
purpose of |
|
| payment
of dividend, issuing of notices and annual reports to the transferees. |
|
|
| ii)
A Member entitled to attend and vote at the General Meeting of Members is
entitled to |
|
| appoint
a proxy to attend and vote on his behalf. A proxy need not be a Member of the |
|
| Company. |
|
|
| iii)
The instrument appointing a proxy and the power of attorney or other
authority under which it |
|
| is
signed or a notarially certified copy of the power of attorney must be
deposited at the |
|
| registered
office of the Company at least 48 hours before the meeting. A form of proxy
is |
|
| enclosed.
Shareholders are requested to notify any change of address immediately. |
|
|
| Statement
under section 160 of the Companies Ordinance, 1984, |
|
| in
respect of Special business and related draft resolutions |
|
|
| Material
facts concerning the special business to be transacted at the Annual General
Meeting |
|
| and
the proposed resolutions related thereto are given below. |
|
|
| Item
no. 5 of Agenda - Investment in Joint Venture Leasing Company in Kingdom of |
|
| Saudi Arabia |
|
|
| I.
The Directors recommend the Company's participation, as one of the sponsors,
in a |
|
| leasing
company being established in the Kingdom of Saudi Arabia. The proposed |
|
| company
will be named Saudi ORIX Leasing Company. The Government of Saudi Arabia |
|
| has
been actively following a policy to develop the non-oil sectors and is keen
to promote |
|
| the
development of small and medium sized industrial enterprises. Leasing is
expected to |
|
| contribute
towards this objective as it has demonstrated in many other countries. ORIX
will |
|
| be
a pioneer of leasing in Saudi Arabia, which offers attractive opportunities
for the |
|
| promotion
of leasing business. The investment will be financed from the Company's |
|
| internal
resources. This will be OLP's third investment overseas and together with |
|
| operations
in Oman and Egypt will form a sound base for foreign currency earnings in |
|
| future.
The sponsoring shareholders of Saudi ORIX Leasing Company are: |
|
|
| Sponsor's
Name |
|
Share of
Equity |
Shareholding |
|
|
|
Saudi Rial |
Pak Rupees* |
% |
|
|
(in
millions) |
|
|
| Saudi
Investment Bank |
|
18 |
270 |
30% |
|
| Saudi
Business Group |
|
18 |
270 |
30% |
|
| ORIX
Corporation, Japan |
|
12 |
180 |
20% |
|
| ORIX
Leasing Pakistan Limited |
|
6 |
90 |
10% |
|
| IFC
- Washington |
|
6 |
90 |
10% |
|
|
|
------------------ |
------------------ |
------------------ |
|
| Total
sponsor's holding |
|
60 |
900 |
100% |
|
|
========== |
========== |
========== |
|
|
|
|
| *Saudi
Rial 1 = approximately Rs. 15 |
|
|
| The
proposal has been examined and is being recommended for the following
reasons: |
|
|
| a)
The viability of the project has been identified and a sound and profitable
future is |
|
| forecast. |
|
|
| b)
The strength of institutional sponsorship demonstrates confidence in the
proposed |
|
| project. |
|
|
| c)
The investment will add to the growing international business of ORIX Leasing
Pakistan |
|
| Limited
in the Middle East Region. |
|
|
| d)
Shares in Saudi ORIX Leasing Company will be acquired at par value by ORIX
Leasing |
|
| Pakistan
Limited from its own resources. |
|
|
|
| II.
The Directors of ORIX Leasing Pakistan Limited have no interest in the above
investment. |
|
|
| It
is proposed to pass the following special resolution. |
|
|
| "Resolved that: |
|
|
| The
Company be and is hereby authorised to invest the rupee equivalent of Saudi
Rial (SR) |
|
| 6
million representing 10% equity interest in a proposed joint venture leasing
company in |
|
| the
Kingdom of Saudi Arabia, subject to such permissions as may be required in
this behalf |
|
| from
the Government of Pakistan and Saudi Arabia and departments acting on their
behalf. |
|
|
| Further
resolved that the Managing Director be and is hereby authorised on behalf of
the |
|
| Company
to sign such documents and take such steps from time to time as may be |
|
| necessary
to acquire the said equity interest in the said company." |
|
|
| Item
no. 6 of Agenda - Remuneration of Chief Executive and Executive Directors |
|
|
| Shareholder's
approval is required for the holding of office of profit by any of the
Directors |
|
| as
well as of their remuneration. It is therefore proposed to pass the following
as an |
|
| Ordinary
Resolution. |
|
|
| "Resolved that: |
|
|
| Approval
is hereby given for the holding of office of profit with the Company by all
the |
|
| Executive
Directors including the Chief Executive, namely, Mr. Humayun Murad, Mr. |
|
| Shaheen
Amin and Mr. Mohammad Qamrul Haq, and for payment of remuneration to the |
|
| Executive
Directors amounting in aggregate to Rs. 5.6 million actual for the year
ending |
|
| June
30, 1999, and Rs. 7.1 million estimated for the year ending June 30, 2000,
together |
|
| with
other benefits in accordance with rules of the Company." |
|
|
| The
Executive Directors are interested to the extent of the remuneration payable
to them |
|
| individually. |
|
|
| REPORT
OF THE DIRECTORS |
|
|
| The
Directors are pleased to present the thirteenth Annual Report together with
the audited |
|
| accounts
of the Company for the year ended June 30, 1999. |
|
|
| FINANCIAL
RESULTS |
|
|
|
|
RUPEES |
|
|
| Net
profit for the year after charging all expenses |
|
150,463,752 |
|
| Less: Taxation |
|
|
20,000,000 |
|
|
|
|
------------------ |
|
|
|
|
130,463,752 |
|
| Unappropriated
profit brought forward |
|
6,037,576 |
|
|
|
|
------------------ |
|
|
|
|
136,501,328 |
|
| Appropriations: |
|
|
|
|
|
| Transfer
to Statutory reserve |
|
7,000,000 |
|
| Transfer
to Capital reserve for deferred tax |
|
48,700,000 |
|
| Cash dividend |
|
|
80,554,764 |
|
|
|
|
------------------ |
|
|
|
|
136,254,764 |
|
|
|
|
------------------ |
|
| Unappropriated
profit carried forward |
|
246,564 |
|
|
|
|
========== |
|
|
| DIVIDEND |
|
| The
Directors recommend a cash dividend of 40% for the year. Last year's
distribution was |
|
| 20%
cash and 25% bonus shares. |
|
|
| REVIEW
OF OPERATIONS |
|
| The
slowdown in economic activity and depressed conditions for investment posed
new |
|
| challenges
for our business. These were primarily on three fronts: |
|
|
| -
low investment in plant and machinery has a direct bearing on leasing
business which is |
|
| asset-based
financing thus necessitating new marketing strategies to develop sufficient |
|
| volume
of business; |
|
|
| -
foreign currency loans as a major source of funding dried completely due to
the inability to |
|
| hedge
the exchange rate risk forcing all funding to be raised from domestic
sources; |
|
|
| -
weakness of the corporate and business sector required new measures to be
taken to |
|
| ensure
that the lease portfolio quality did not deteriorate. |
|
|
| I
am pleased to report that the Company managed its operations successfully,
and in particular, |
|
| was
able to overcome the challenges mentioned above by making the necessary
adjustments |
|
| in
our business strategy and day to day operations. |
|
|
| Machinery
and industrial equipment traditionally used to account for more than half of
our lease |
|
| disbursements
but this share has been declining in recent years. In the year under review
37% |
|
| of
disbursements were towards this segment. To make up for this fall, steps were
taken in the |
|
| previous
years to boost leasing of other assets. The results of these efforts bore
fruit in 1999 |
|
| with
total lease disbursements increasing by 44% over 1998 to Rs. 2.04 billion,
the highest |
|
| volume
ever achieved by the Company. Commercial vehicles and saloon cars accounted
for |
|
| 57%
of the volume and office equipment for 6%. Financial assistance was provided
to 1,289 |
|
| business
enterprises, majority of which were small and medium sized businesses. |
|
|
| Profit
before tax increased by 12% to Rs. 150.4 million (1998:Rs. 133.9 million)
thus reversing |
|
| the
trend of declining profits witnessed in the last two years. In the year under
review, |
|
| earnings
per share were recorded at Rs. 6.48 per share (1998: Rs. 5.16 per Share). New
rent |
|
| receivables
of Rs. 2.9 billion were added and total income from all operations increased
by |
|
| 7.8%
to Rs. 905.1 million. Although finance lease remains our main product,
increasing |
|
| contribution
was made by short-term rental of equipment under operating lease contracts
and |
|
| automobile
leases for individual customers. Consumer finance side maintained steady |
|
| progress
and has developed a firm market niche for its product. |
|
|
| Financial
charges represent 73% of the total expenses and show an increase of 2.6% over
the |
|
| previous
year. Since the average total borrowings of Rs. 3 billion during the year
were higher |
|
| than
the previous year by 5% the financial costs reflect an improvement in
borrowing rates. |
|
| Although
short-term rates have improved by 3-4%, the overall reduction in our
borrowing costs |
|
| will
not be so prominent as our business relies on medium to long-term loans for
which rates |
|
| have
decreased marginally. During the year Rs. 1.76 billion of new loans were
taken which |
|
| were
all from domestic sources. No foreign currency loan was utilised, and due to
the difficulty |
|
| in
arranging satisfactory hedge for exchange rate risk, an undrawn amount of US
$10.2 million |
|
| from
Asian Development Bank loan was recently cancelled. Our repayment obligations
to all |
|
| foreign
lenders are now current. |
|
|
| Tight
control was maintained on selling, general and administrative costs which
increased by |
|
| 6.2%
to Rs. 122.3 million. This is a modest increase considering the impact of
inflation and the |
|
| continuous
increase in expenditure for our expanding business. The charge for general
provision |
|
| for
potential bad leases was Rs. 31.8 million (1998 Rs. 28.1 million) and the
accumulated general |
|
| provision
now amounts to Rs. 135.2 million which is equal to 3.72% of the net exposure
on rent |
|
| receivables.
As mentioned earlier in the Report one of the challenges faced by management |
|
| was
to ensure that the lease portfolio did not impair in the current economic
scenario. I am |
|
| pleased
to report that due to rigorous monitoring and tight credit checks our
infected portfolio was |
|
| lower
than 1998 and our recovery rate continues to be excellent. |
|
|
| CREDIT
RATING |
|
|
| The
Pakistan Credit Rating Agency (PACRA) maintained the Company's credit rating
for the |
|
| fourth
consecutive year. Based on results for the year to June 30,1998, AI+ and A1
were |
|
| accredited
to the Company's short and long term debt respectively. The Company continues |
|
| to
enjoy the highest rating in the leasing sector for both categories of debt
awarded by PACRA. |
|
|
| ASSOCIATED
COMPANIES |
|
|
| Oman
ORIX Leasing Company SAOG (OOL) in which your Company holds 20.25% equity and |
|
| provides
management support, continued to show strong progress. For the year ended |
|
| December
31, 1998 it earned pre-tax profit equivalent to Rs. 75.5 million (1997 Rs.
41.7 |
|
| million)
and had total assets of Rs. 2.4 billion. OOL declared 11% as dividend which
resulted |
|
| in
an income of Rs. 11.8 million (1997 Rs. 4.7 million) for your Company which
amount is |
|
| included
in the results under review. OOL, which is headquartered in Muscat, recently |
|
| inaugurated
its second branch office in the city of Sohar. |
|
|
| ORIX
Leasing Egypt (OLE) concluded its first accounting period on December 31,
1998 |
|
| representing
fourteen months operation. In this period it earned pre-tax profit equivalent
to Rs. |
|
| 13.1
million on an asset base of Rs. 387.7 million. OLE's business is developing
satisfactorily. |
|
| Your
Company holds 23% of OLE's equity and provides management support. |
|
|
| ORIX
Investment Bank Pakistan Limited (OIBP) earned a profit before tax of Rs.
11.3 million for |
|
| the
half year to December 31, 1998 in comparison to Rs 7.1 million earned in the
corresponding |
|
| period
in 1997. OIBP has a high quality loan portfolio and is making steady
progress. |
|
| Investment
banking business, however is more sensitive to economic environment and until
there |
|
| is
an upturn in business conditions, OIBP will be expanding conservatively. |
|
|
| NEW
VENTURE IN SAUDI ARABIA |
|
|
| Your
Directors are pleased to recommend the Company's participation, as one of the
sponsors in |
|
| a
new leasing company being established in Saudi Arabia. The Government of
Saudi Arabia is |
|
| encouraging
investment in the non-oil sector and is keen to promote the development of
small and |
|
| medium
sized enterprises. Leasing is expected to contribute towards this objective
as it has |
|
| demonstrated
in many other countries. Saudi Arabia has a population of 20 million and GDP
of |
|
| US$
141 billion. The proposed company which will be a pioneer of leasing in Saudi
Arabia will be |
|
| named
Saudi ORIX Leasing Company and will start with a paid up capital of Saudi
Riyal 60 |
|
| million,
equivalent to approximately Rs. 900 million at current exchange rate. Your
Company |
|
| proposes
to take 10% equity in the new venture together with other sponsoring
shareholders |
|
| ORIX
Corporation, Japan (20%), International Finance Corporation (10%) Saudi
Investment Bank |
|
| (30%)
and a private business group consisting of eminent Saudi bankers and
businessmen (jointly |
|
| holding
30%). This will be your Company's third overseas investment and together with |
|
| operations
in Oman and Egypt will form a sound base for foreign currency earnings in
future. |
|
|
| FUTURE
PROSPECTS |
|
|
| Leasing
now has an established market niche which generates a certain volume of lease
based |
|
| transactions.
Business conditions allowing, we expect a steady growth in our volume of
leases |
|
| together
with greater consolidation of the new products already launched. Income from
overseas |
|
| operations
should provide increasing returns as these companies become more established. |
|
|
| DIRECTORS |
|
|
| Dr.
Najeeb Samie, Chairman of State Life Insurance Corporation (SLIC) succeeded
Sayed |
|
| Muzafar
All Shah on the Board due to the latter's transfer from SLIC. Mr. Takashi
Koizumi, |
|
| Managing
Director, International Operations of ORIX Corporation, relinquished his seat
on the |
|
| Board
in favour of Mr. Genichi Fujinaga. The Directors place on record their
appreciation of the |
|
| services
of Sayed Muzafar All Shah and Mr. Takashi Koizumi and welcome Dr. Najeeb
Samie |
|
| and
Mr. Genichi Fujinaga on the Board. |
|
|
| HOLDING
COMPANY |
|
|
| The
Company is a subsidiary of ORIX Corporation which is incorporated in Japan. |
|
|
| INFORMATION
TECHNOLOGY |
|
|
| The
Company has taken measures to ensure that its computer applications, systems
and |
|
| hardware
are year 2000 compliant. |
|
|
| STAFF |
|
|
| The
Board places on record its appreciation of the performance of all staff
members which has |
|
| resulted
in strong results in challenging market conditions. |
|
|
| AUDITORS |
|
|
| The
present auditors, Sidat Hyder Qamar and Company, Chartered Accountants,
retire and |
|
| being
eligible offer themselves for re-appointment. |
|
|
| PATTERN
OF SHAREHOLDING |
|
|
| The
pattern of shareholding as on June 30, 1999 is shown on page 41. |
|
|
| On
behalf of the Board |
|
|
| Humayun
Murad |
|
| Chief Executive |
|
|
Dated: September 22, 1999 |
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed balance sheet of ORIX Leasing Pakistan Limited as at
June |
|
| 30,1999
and the related profit and loss account and statement of changes in financial |
|
| position,
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 statement of changes in
financial position, |
|
| together
with the notes forming part thereof, give the information required by the
Companies |
|
| Ordinance,
1984 in the manner so required and respectively give a true and fair view of
the |
|
| state
of the Company's affairs as at June 30, 1999 and of the profit and the
changes in |
|
| financial
position 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 the Central Zakat Fund established under |
|
| Section
7 of that Ordinance. |
|
|
|
|
|
|
SIDAT HYDER QAMAR & CO. |
|
| Karachi:
September 22, 1999. |
|
|
|
CHARTERED ACCOUNTANTS |
|
|
|
| FINANCIAL
STATEMENTS OF THE COMPANY |
|
|
| BALANCE
SHEET |
|
| PROFIT
AND LOSS ACCOUNT |
|
| STATEMENT
OF CHANGES IN FINANCIAL POSITION |
|
| NOTES
TO THE ACCOUNTS |
|
|
|
| BALANCE
SHEET AS AT JUNE 30, 1999 |
|
|
|
NOTE |
1999 |
1998 |
|
|
|
|
| ASSETS |
|
|
|
| Fixed
assets - tangible |
|
3 |
147,826,077 |
85,212,954 |
|
| Net
investment in leases and installment loans |
|
|
|
| Installment
contract receivables |
|
|
4,541,466,561 |
4,221,596,985 |
|
| Add
· Residual value |
|
|
956,348,542 |
795,433,479 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
5,497,815,103 |
5,017,030,464 |
|
| Less:
Unearned finance income |
|
|
971,212,297 |
853,542,773 |
|
|
|
|
------------------ |
------------------ |
|
| Net investment |
|
|
4,526,602,806 |
4,163,487,691 |
|
|
|
|
------------------ |
------------------ |
|
| Less:
Current portion |
|
|
2,020,003,733 |
1,854,335,260 |
|
| Allowance
for potential lease and |
|
|
|
| installment
loan losses |
|
|
135,157,988 |
132,568,444 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
2,155,161,721 |
1,986,903,704 |
|
|
|
|
------------------ |
------------------ |
|
|
|
4 |
2,371,441,085 |
2,176,583,987 |
|
|
|
|
|
| Long
term investments |
|
5 |
280,168,029 |
126,412,619 |
|
| Long term loans |
|
6 |
26,243,454 |
23,626,007 |
|
| Long
term deposits and deferred costs |
|
7 |
22,847,566 |
30,050,611 |
|
| Current assets |
|
8 |
2,379,694,934 |
2,148,643,045 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
Rupees |
5,228,221,145 |
4,590,529,223 |
|
|
|
|
|
========== |
========== |
|
|
|
|
| SHARE
CAPITAL AND LIABILITIES |
|
|
| Share
capital and reserves |
|
|
|
| Authorised |
|
|
|
| 25,000,000
Ordinary shares of Rs. 10/- each |
|
|
250,000,000 |
250,000,000 |
|
|
|
|
========== |
========== |
|
| Issued,
subscribed and paid-up |
|
9 |
201,386,910 |
161,109,530 |
|
| Reserves |
|
10 |
669,381,483 |
659,749,875 |
|
|
|
|
------------------ |
------------------ |
|
| Shareholders
'equity |
|
|
870,768,393 |
820,859,405 |
|
|
|
|
| Long term loans |
|
11 |
1,983,877,063 |
1,699,670,218 |
|
| Long
term certificates of investment |
|
12 |
11,533,308 |
7,378,238 |
|
| Deferred
liability - gratuity |
|
|
13,536,985 |
10,604,575 |
|
| Long
term advances and deposits |
|
13 |
679,389,666 |
576,215,899 |
|
| Current
liabilities |
|
14 |
1,669,115,730 |
1,475,800,888 |
|
| Contingencies
and commitments |
|
15 |
-- |
-- |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
Rupees |
5,228,221,145 |
4,590,529,223 |
|
|
|
|
========== |
========== |
|
|
|
|
| AUDITORS'
REPORT ANNEXED |
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
SHAKIRULLAH DURRANI |
|
HUMAYUN MURAD |
|
|
VICE CHAIRMAN |
|
CHIEF EXECUTIVE |
|
|
|
| PROFIT
AND LOSS ACCOUNT FOR THE YEAR ENDED JUNE 30, 1999 |
|
|
|
NOTE |
1999 |
1998 |
|
|
|
|
| REVENUES: |
|
|
|
| Finance leases |
|
16 |
720,455,539 |
713,931,367 |
|
| Installment
loans |
|
|
42,255,279 |
43,516,669 |
|
| Operating leases |
|
|
35,607,248 |
9,104,378 |
|
| Other income |
|
17 |
106,799,885 |
72,530,240 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
905,117,951 |
839,082,654 |
|
| Less: |
|
|
|
| EXPENSES |
|
|
|
| Finance
and bank charges |
|
18 |
551,139,244 |
536,988,511 |
|
| Selling,
general and administrative expenses |
|
19 |
122,385,746 |
115,171,699 |
|
| Direct
cost of leases |
|
|
|
| Finance
lease and installment loans |
|
20.1 |
28,811,001 |
21,635,198 |
|
| Operating Lease |
|
20.2 |
20,433,625 |
3,276,437 |
|
| Allowance
for potential lease and |
|
|
| installment
loan losses |
|
|
31,884,583 |
28,117,240 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
754,654,199 |
705,189,085 |
|
|
|
|
| Profit
before taxation |
|
|
150,463,752 |
133,893,569 |
|
| Provision
for taxation - current |
|
23 |
20,000,000 |
30,000,000 |
|
|
|
|
------------------ |
------------------ |
|
| Net
profit after taxation |
|
|
130,463,752 |
103,893,569 |
|
| Unappropriated
profit brought forward |
|
|
6,037,576 |
4,643,293 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
136,501,328 |
108,536,862 |
|
|
|
|
|
|
| APPROPRIATIONS |
|
|
|
| Transfer
to Statutory reserve |
|
7,000,000 |
-- |
|
| Transfer
to Capital reserve for deferred tax |
|
48,700,000 |
-- |
|
| Proposed
dividend @ 40% (1998: @20%) |
|
80,554,764 |
32,221,906 |
|
| Transfer
to General reserve |
|
-- |
30,000,000 |
|
| Transfer
to Reserve for issue of bonus shares |
|
-- |
40,277,380 |
|
|
|
------------------ |
------------------ |
|
|
|
136,254,764 |
102,499,286 |
|
|
|
------------------ |
------------------ |
|
| Unappropriated
profit carried forward |
|
Rupees |
246,564 |
6,037,576 |
|
|
|
|
========== |
========== |
|
| Earning
Per Share- Basic and Diluted |
|
27 |
6.48 |
5.16 |
|
|
|
|
========== |
========== |
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
SHAKIRULLAH DURRANI |
|
HUMAYUN MURAD |
|
|
VICE CHAIRMAN |
|
CHIEF EXECUTIVE |
|
|
|
| STATEMENT
OF CHANGES IN FINANCIAL POSITION FOR THE YEAR ENDED JUNE 30, 1999 |
|
|
|
|
|
1999 |
1998 |
|
| CASH
FLOWS FROM OPERATING ACTIVITIES |
|
|
|
| Profit
for the year |
|
150,463,752 |
133,893,569 |
|
| Add:
Adjustment to reconcile profit to |
|
|
|
| net
cash provided by operating activities |
|
|
|
| Depreciation
and amortisation |
|
36,893,445 |
31,781,829 |
|
| Allowance
for potential lease and installment loan losses - net |
|
2,589,544 |
558,390 |
|
| Provision
for staff retirement benefits - net |
|
2,932,410 |
2,947,664 |
|
| Provision
for mark-up on long - term finance |
|
-- |
533,574 |
|
| Loss
/ (Gain) on sale of fixed assets |
|
2,024 |
(1,052,557) |
|
|
|
------------------ |
------------------ |
|
| Net
cash provided by operating activities |
|
192,881,175 |
168,662,469 |
|
| (Increase)
in current assets |
|
(117,987,042) |
(16,151,344) |
|
| (Decrease)
/Increase in current liabilities |
|
(2,150,035) |
3,884,829 |
|
|
|
------------------ |
------------------ |
|
| Cash
generated from operations |
|
72,744,098 |
156,395,954 |
|
| Income
taxes paid |
|
(36,789,403) |
(21,947,565) |
|
|
|
------------------ |
------------------ |
|
| Net
cash from operating activities |
|
35,954,695 |
134,448,389 |
|
|
|
|
| CASH
FLOWS FROM INVESTING ACTIVITIES |
|
|
|
| Investment
in leases - net |
|
|
|
(363,115,114) |
70,824,179 |
|
| Investments |
|
|
|
(152,521,770) |
12,500,000 |
|
| Capital
expenditure |
|
|
|
(88,712,496) |
(59,168,546) |
|
| Long-term
loans - net |
|
|
|
(3,217,506) |
(3,375,143) |
|
| Proceeds
from sale of fixed assets |
|
|
|
4,299,072 |
3,729,941 |
|
|
|
|
|
------------------ |
------------------ |
|
| Net
cash (used in)/generated from investing activities |
|
(603,267,814) |
24,510,431 |
|
|
|
|
| CASH
FLOWS FROM FINANCING ACTIVITIES |
|
|
|
| Long term loans |
|
|
|
1,515,200,218 |
657,786,970 |
|
| Short
term loans and running finance |
|
|
(48,494,182) |
(235,085,656) |
|
| Certificates
of investment |
|
|
|
(186,940,016) |
145,332,777 |
|
| Deposits
from lessees - net |
|
|
|
167,878,799 |
114,025,574 |
|
| Repayment
of redeemable capital and mark up |
|
|
-- |
(19,902,976) |
|
| Repayment
of long term loans |
|
|
|
(892,187,714) |
(653,145,097) |
|
| Long
term deposits and deferred cost |
|
|
(7,892,125) |
(9,407,401) |
|
| Payment
of dividend |
|
|
|
(32,221,906) |
(72,499,289) |
|
|
|
|
|
------------------ |
------------------ |
|
| Net
cash generated from / (used in) financing activities |
|
515,343,074 |
(72,895,098) |
|
|
|
|
|
------------------ |
------------------ |
|
| Net
(decrease) /increase in cash activities |
|
|
(51,970,045) |
86,063,722 |
|
| Cash
and bank balances at beginning of the year |
|
|
211,151,202 |
125,087,480 |
|
|
|
|
|
------------------ |
------------------ |
|
| Cash
and bank balances at end of the year |
|
|
159,181,157 |
211,151,202 |
|
|
|
========== |
========== |
|
|
|
|
|
SHAKIRULLAH DURRANI |
|
HUMAYUN MURAD |
|
|
VICE CHAIRMAN |
|
CHIEF EXECUTIVE |
|
|
|
| NOTES
TO THE ACCOUNTS FOR THE YEAR ENDED JUNE 30, 1999 |
|
|
|
| 1.
LEGAL STATUS AND NATURE OF BUSINESS |
|
|
| The
Company was incorporated in Pakistan as a private limited company on July 1,
1986 and |
|
| was
converted into a public limited company on December 23, 1987. The Company is
listed on |
|
| Karachi,
Lahore and Islamabad Stock Exchanges. The main business activity is leasing
of |
|
| moveable
assets. |
|
|
| 2.
SIGNIFICANT ACCOUNTING POLICIES |
|
|
| 2.1
Accounting convention |
|
| These
financial statements have been prepared under the historical cost convention. |
|
|
| 2.2
Basis of preparation |
|
| These
financial statements have been prepared in accordance with International
Accounting |
|
| Standards
as applicable in Pakistan. |
|
|
| 2.3
Revenue Recognition |
|
|
| 2.3.1.
Finance Lease and Installment Loans |
|
|
| The
Company follows the 'financing method' in accounting for recognition of lease
and |
|
| installment
loan income. |
|
|
| At
the commencement of a lease, the total unearned finance income consists of
the excess of |
|
| aggregate
installment contract receivables over the cost of the leased equipment. At
the time a |
|
| lease
is executed, a portion of unearned finance income which approximates the
initial costs |
|
| directly
associated with negotiating and consummating the lease plus an amount equal
to the |
|
| allowance
for potential lease losses is taken into income. The remainder of the
unearned |
|
| finance
income is taken into income over the term of the lease, starting with the
month in which |
|
| the
lease is executed applying the sum of digits method, so as to produce a
systematic return |
|
| on
the net investment in lease. This method was applicable for all leases
executed upto 30 |
|
| June
1999.The Institute of Chartered Accountants of Pakistan through its Circular
no. 9/99 of |
|
| August
10, 1999, requires that income should be allocated using the annuity method
for all |
|
| leases
commencing after June 30, 1999. In compliance with ICAP's directive, with
effect from |
|
| July
01, 1999, the Company will be using the annuity method to recognise lease
income. |
|
|
| Front
end fee and other lease related income is recognised as income when realized. |
|
|
| 2.3.2
Operating lease |
|
| Rental
income from assets given on operating lease is recognised on accrual basis
over the |
|
| lease period. |
|
|
| 2.4
Allowance for potential lease and installment loan losses |
|
| The
allowance for potential lease and installment loan losses is maintained at a
level which, in |
|
| the
judgement of management, is adequate to provide for potential losses on lease
portfolio |
|
| that
can be reasonably anticipated. The allowance is increased by provisions
charged to |
|
| income
and is decreased by charge offs, net of recoveries. |
|
|
| 2.5
Tangible fixed assets and depreciation |
|
|
| 2.5.1
Operating assets - own use |
|
| Operating
assets are stated at cost less accumulated depreciation. Depreciation is
charged to |
|
| income
applying the straight line method, whereby cost of an asset is written-off
over its |
|
| estimated
useful life. In respect of additions and deletions of an asset during the
year, |
|
| depreciation
is charged from the month of acquisition and upto the month preceding the |
|
| deletion
respectively. |
|
|
| Maintenance
and repairs are charged to income as and when incurred. Major renewals and |
|
| improvements
are capitalised and the assets so replaced, if any, are retired. Gains and
losses |
|
| on
disposal of assets, if any, are included in income currently. |
|
|
| 2.5.2
Operating lease assets |
|
| Operating
lease assets are stated at cost less accumulated depreciation. From the
current |
|
| year
depreciation is charged to income applying straight line method instead of
previous years' |
|
| annuity
method, whereby the depreciable values of assets are written-off over their
estimated |
|
| useful life. |
|
|
| Maintenance
and repairs are charged to income as and when incurred. Major renewals and |
|
| improvements
are capitalised and the assets so replaced, if any, are retired. Gains and
losses |
|
| on
disposal of assets, if any, are included in income currently. |
|
|
| 2.6
Long-term investments |
|
| These
are stated at cost. Investment made in foreign currency other than investment
in |
|
| associates
are translated into rupees at the rate of exchange prevailing at the balance
sheet |
|
| date.
Realised and unrealised exchange gains and losses are dealt within the profit
and loss |
|
| account.
Return on investment is recognised at rates specified in the respective
investment |
|
| schemes
and accrued for the period. Income is recognised on the assumption that such |
|
| investments
will be held till the terminal date. |
|
|
| Investment
in associated companies is stated at cost. Provision for diminution in value
of |
|
| investments
other than temporary, if any, is made in income in the year of occurrence. |
|
| Dividend
income is recognised when the right to receive the dividend is established. |
|
|
| 2.7
Deferred costs |
|
|
| 2.7.1 Loans |
|
| Loan
originating costs, front-end fee and documentation costs are amortised over
the loan |
|
| period
or five years, whichever is shorter. |
|
|
| 2.7.2
Project development costs |
|
| Expenditure
incurred in connection with development of various projects and joint
ventures are |
|
| classified
as project development costs and upon completion of such projects or joint
ventures |
|
| are
amortised over a period of five years. |
|
|
| 2.8
Staff retirement benefits |
|
| The
Company operates an unfunded gratuity scheme covering all its permanent
employees |
|
| who
have completed the minimum qualifying period of six months. Provision is made
annually |
|
| to
cover obligation under the scheme. |
|
|
| 2.9
Foreign currencies |
|
| Transactions
in foreign currencies are accounted for in rupees at the rate prevailing on
the |
|
| date
of transaction. Monetary assets and liabilities in foreign currencies are
translated into |
|
| rupees
at the rate of exchange prevailing at the balance sheet date. Realised and
unrealised |
|
| exchange
gains and losses are dealt within the profit and loss account. Foreign
currency loans |
|
| registered
under Exchange Risk Coverage Scheme of the State Bank of Pakistan (SBP) are |
|
| translated
into rupees at the rate prevailing on the date of disbursement. |
|
|
| 2.10
Offsetting of financial assets and financial liabilities |
|
| A
financial asset and a financial liability is offset and the net amount
reported in the balance |
|
| sheet,
if the Company has the legal enforceable right to set off the transaction and
also intends |
|
| either
to settle on a net basis or to realise the asset and settle the liability
simultaneously. |
|
|
| 2.11 Taxation |
|
|
| 2.11.1 Current |
|
| Income
for the purposes of computing current taxation is determined under the
provisions of |
|
| tax
law whereby lease rentals received or receivable by the Company are deemed to
be |
|
| income.
Provision for taxation is thus based on income determined in accordance with
the |
|
| accounting
policy explained in Note 2.3 and adjusted in accordance with the requirements
of |
|
| the tax law. |
|
|
| 2.11.2 Deferred |
|
| The
Company accounts for deferred taxation using the liability method on timing
differences |
|
| arising
from using the different methods in the recognition of lease income for tax
purposes |
|
| and
accounting purposes as well as for all other significant timing differences. |
|
|
|
|
|
|
NOTE |
1999 |
1998 |
|
|
|
|
| 3.
FIXED ASSETS - tangible |
|
|
|
|
|
|
| Operating
assets - own use |
|
3.1 |
34,446,408 |
39,329,690 |
|
| Operating
lease assets |
|
3.2 |
113,379,669 |
45,883,264 |
|
|
|
|
------------------ |
------------------ |
|
|
Rupees |
147,826,077 |
85,212,954 |
|
|
|
|
========== |
========== |
|
|
|
| 3.1
Operating assets - Own use |
|
|
|
|
|
Additions/ |
|
Accumulated |
Book |
Depreciation |
|
|
|
|
Cost at |
(Deletions)/ |
Cost at |
depreciation at |
value at |
For |
Rate |
|
|
|
July 1, 1998 |
(Transfer)* |
June 30, 1999 |
June 30,1999 |
June 30, 1999 |
the year |
% |
|
|
| Leasehold
improvements |
15,010,196 |
527,839 |
15,538,035 |
11,967,841 |
3,570,194 |
1,034,627 |
15 |
|
|
|
|
|
|
|
| Furniture
and office equipment |
29,773,787 |
3,259,915 |
32,352,788 |
18,519,247 |
13,833,541 |
3,987,609 |
15 |
|
|
|
|
(184,887) |
|
|
|
|
|
|
(496,027)* |
|
|
|
|
|
|
|
|
|
| Motor vehicles |
|
37,828,174 |
6,413,500 |
40,146,029 |
23,103,356 |
17,042,673 |
7,431,428 |
20 |
|
|
|
|
(4,095,645) |
|
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
| Rupees |
|
82,612,157 |
10,201,254 |
88,036,852 |
53,590,444 |
34,446,408 |
12,453,664 |
|
|
|
|
(4,280,532) |
|
|
|
|
(496,027)* |
|
|
|
========== |
========== |
========== |
========== |
========== |
========== |
========== |
|
| 1998-Rupees |
|
76,629,306 |
14,483,346 |
82,612,157 |
43,282,467 |
39,329,690 |
12,270,300 |
|
|
|
|
(5,598,445) |
|
|
|
|
(2,902,050)* |
|
|
|
========== |
========== |
========== |
========== |
========== |
========== |
========== |
|
|
| *
Represents assets transferred to operating lease assets. |
|
|
| 3.1.1
Movement of accumulated depreciation during the year · |
|
|
|
Accumulated |
Depreciation |
Adjustment |
Accumulated |
|
|
depreciation |
charged |
on disposal/ |
depreciation |
|
|
as at |
during the |
transfer |
as at |
|
|
July 1, 1998 |
year |
during the year |
June 30, 1999 |
|
|
| Leasehold
improvements |
10,933,214 |
1,034,627 |
-- |
11,967,841 |
|
| Furniture
& office equipment |
14,670,435 |
3,987,609 |
138,797 |
18,519,247 |
|
| Motor vehicles |
|
17,678,818 |
7,431,428 |
2,006,890 |
23,103,356 |
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
|
| Rupees |
|
43,282,467 |
12,453,664 |
2,145,687 |
53,590,444 |
|
|
|
========== |
========== |
========== |
========== |
|
| 1998- R u pees |
|
34,246,524 |
12,270,300 |
3,234,357 |
43,282,467 |
|
|
|
========== |
========== |
========== |
========== |
|
|
| 3.1.2
Assets deleted during the year · |
|
|
|
|
|
Accumulated |
Book |
Sale |
Mode of |
Sold |
|
| Description |
|
Cost |
depreciation |
Value |
Proceeds |
Disposal |
to |
|
|
| Suzuki Khyber |
|
393,750 |
275,604 |
118,146 |
152,245 |
Company Policy |
Effat Kadri (Employee) |
|
| Yamaha Motor Cycle |
26,000 |
25,999 |
1 |
23,000 |
Insurance Claim |
Adamjee Insurance Co.
Ltd. |
|
| Suzuki Mehran |
|
319,000 |
143,559 |
175,441 |
183,385 |
Company Policy |
Qamar ul Islam (Employee) |
|
| Suzuki Margalla |
|
470,750 |
266,764 |
203,986 |
280,122 |
Company Policy |
Giasuddin Khan (Employee) |
|
| Suzuki Margalla |
|
470,750 |
266,764 |
203,986 |
276,993 |
Company Policy |
Hiralal Bharwani
(Employee) |
|
| Suzuki Mehran |
|
235,895 |
121,892 |
114,003 |
147,000 |
Negotiation |
Owais Ahmed |
|
| Suzuki Khyber |
|
393,750 |
255,918 |
137,832 |
178,916 |
Company Policy |
Azaz Ahmed (Employee) |
|
| Suzuki Khyber |
|
393,750 |
249,356 |
144,394 |
187,197 |
Company Policy |
Mohd Shakeb (Employee) |
|
| Suzuki Mehran |
|
315,000 |
141,750 |
173,250 |
194,250 |
Insurance Claim |
Adamjee Insurance Co.
Ltd. |
|
| Suzuki Mehran |
|
280,000 |
18,667 |
261,333 |
261,333 |
Insurance Claim |
Adamjee Insurance Co.
Ltd. |
|
| Suzuki Mehran |
|
315,000 |
152,250 |
162,750 |
183,750 |
Insurance Claim |
Adamjee Insurance Co.
Ltd. |
|
| Suzuki Margalla |
|
482,000 |
88,367 |
393,633 |
401,000 |
Leased |
Transfer to Installment
loans |
|
| Furniture |
|
50,000 |
24,119 |
25,881 |
25,881 |
Company Policy |
Effat Kadri (Employee) |
|
| Mobile Phone |
|
15,887 |
1,589 |
14,298 |
14,000 |
Negotiation |
Mobile Communication |
|
| Fax Machine |
|
24,000 |
23,100 |
900 |
5,000 |
Negotiation |
Laser Tech Office
Automation |
|
| Computer
Note Book |
95,000 |
5,937 |
89,063 |
85,000 |
Insurance Claim |
EFU General Insurance Co.
Ltd. |
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
|
|
| Rupees |
|
4,280,532 |
2,061,635 |
2,218,897 |
2,599,072 |
|
|
|
========== |
========== |
========== |
========== |
|
|
| 3.2
Operating lease assets |
|
|
|
|
Additions/ |
|
Accumulated |
Book |
Depreciation |
Rate |
|
|
Cost at |
(Deletions)/ |
Cost at |
depreciation at |
value at |
for |
% |
|
|
July 1, 1998 |
(Transfer)* |
June 30, 1999 |
June 30, 1999 |
June 30, 1999 |
the year |
|
|
|
| Machinery and equipment |
30,528,200 |
60,878,124 |
91,406,324 |
5,668,394 |
85,737,930 |
5,152,134 |
10%-33.33% |
|
| Office
equipment |
385,000 |
496,027 * |
881,027 |
335,072 |
545,955 |
230,754 |
33.33% |
|
| Commercial
vehicles |
16,674,050 |
17,633,118 |
31,798,868 |
4,703,084 |
27,095,784 |
3,961,723 |
15% |
|
|
|
|
(2,508,300) |
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
| Rupees |
|
47,587,250 |
78,511,242 |
124,086,219 |
10,706,550 |
113,379,669 |
9,344,611 |
|
|
|
|
496,027 * |
|
|
|
|
(2,508,300) |
|
|
|
========== |
========== |
========== |
========== |
========== |
========== |
========== |
|
| 1998-Rupees |
|
-- |
44,685,200 |
47,587,250 |
1,703,986 |
45,883,264 |
1,390,690 |
|
|
|
|
2,902,050* |
|
|
========== |
========== |
========== |
========== |
========== |
========== |
========== |
|
|
| 3.2.1
Movement of accumulated depreciation during the year: |
|
|
|
|
Accumulated |
Depreciation |
Adjustment |
Accumulated |
|
|
|
depreciation |
charged |
on (disposal)/ |
depreciation |
|
|
|
as at |
during the |
transfer* during |
as at |
|
|
|
July 1, 1998 |
year |
the year |
June 30,1999 |
|
|
| Machinery
and equipment |
516,260 |
5,152,134 |
-- |
5,668,394 |
|
|
|
| Office
equipment |
20,263 |
230,754 * |
84,055 |
335,072 |
|
|
|
| Motor vehicles |
|
1,167,463 |
3,961,723 |
(426,102) |
4,703,084 |
|
|
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
|
|
|
| Rupees |
|
1,703,986 |
9,344,611 |
(342,047) |
10,706,550 |
|
|
|
|
|
========== |
========== |
========== |
========== |
|
|
|
| 1998-Rupees |
|
-- |
1,390,690 |
313,296 |
1,703,986 |
|
|
|
|
|
========== |
========== |
========== |
========== |
|
|
|
|
| *Represents
assets transferred from operating assets. |
|
|
|
| 3.2.2
Assets deleted during the year: |
|
|
|
|
|
Accumulated |
Book |
Sale |
Mode of |
Sold |
|
| Description |
|
Cost |
depreciation |
Value |
Proceeds |
Disposal |
to |
|
|
| Mitsubishi
Pajero |
1,289,425 |
215,859 |
1,073,566 |
900,000 |
Leased |
Transfer to finance lease |
|
| Mitsubishi
Pajero |
1,218,875 |
210,243 |
1,008,632 |
800,000 |
Leased |
Transfer to finance lease |
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
|
|
Rupees |
2,508,300 |
426,102 |
2,082,198 |
1,700,000 |
|
|
========== |
========== |
========== |
========== |
|
|
| 3.2.3
The Company has reviewed the expected pattern of economic benefits that will
flow to the |
|
| Company
in future years from operating lease assets and consequently the method of |
|
| depreciation
has been changed from annuity method to straight line method for all
operating |
|
| lease
assets. The management of the Company is of the view that the new method of |
|
| providing
depreciation is more conservative and will give a fair presentation of the
Company's |
|
| results
and financial position. Had the depreciation been charged under the annuity
method at |
|
| the
rates consistent with prior year, the depreciation charge for the year would
have been |
|
| lower
by Rs. 2.9 million and accordingly profit would have been higher by the same
amount. |
|
|
| 4.
NET INVESTMENT IN LEASES AND INSTALLMENT LOANS |
|
| The
company's mark-up rate on leases and installment loans ranges between 21.5
percent to |
|
| 25.5 percent. |
|
|
| 5.
LONG TERM INVESTMENTS |
|
|
| Federal
investment bonds |
|
5.1 |
7,915,000 |
7,915,000 |
|
| Special
US dollar bonds |
|
5.2 |
65,217,240 |
|
| In
associated companies |
|
|
|
| - Quoted |
|
5.3 |
152,512,222 |
63,974,052 |
|
| - Unquoted |
|
5.4 |
54,523,567 |
54,523,567 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
207,035,789 |
118,497,619 |
|
|
|
|
------------------ |
------------------ |
|
|
Rupees |
280,168,029 |
126,412,619 |
|
|
|
|
========== |
========== |
|
|
|
| 5.1
Represents investment made in Government Securities as required under the
relevant |
|
| provision
of the State Bank of Pakistan's Rules for Non-Bank Financial Institutions to
maintain |
|
| liquidity
against certain liabilities. The securities are redeemable within a period of
six months |
|
| (included
in short term investments as per note 8) to ten years and earn mark-up
varying from |
|
| 14.15%
per annum to 15% per annum receivable half yearly from the date of issue. |
|
|
| 5.2
Represents investment made in special US dollar bonds issued by the
Government of |
|
| Pakistan
upon conversion of the Company's frozen foreign currency accounts. The bonds
have |
|
| maturity
period of three years, are tradable at Stock Exchanges in Pakistan and carry
a |
|
| markup
of LIBOR plus two percent per annum receivable half yearly from the date of
issue. |
|
|
| 5.3 Quoted |
|
|
| Name of |
|
Equity held |
No. of |
Currency of |
Cost price |
Cost of |
Cost of |
Market value |
|
| associated |
|
(%) |
shares |
investment |
per share |
investment |
investment |
of investment |
|
| company |
|
|
held |
|
as at |
as at |
as at |
|
|
|
|
June 30, 1999 |
June 30, 1999 |
June 30,1999 |
|
|
| Oman
ORIX Leasing |
|
| Company SAOG |
|
20.25 |
800,000 |
Rial Omani |
RO 1 each |
RO 1,000,000 |
122,512,222 |
196,824,756 |
|
|
|
|
|
|
|
| ORIX
Investment Bank |
|
|
|
|
| Pakistan Limited |
|
15.00 |
3,000,000 |
Pak Rupees |
Rs. 10 each |
Rs. 30,000,000 |
30,000,000 |
15,000,000 |
|
|
|
|
------------------ |
------------------ |
|
|
|
Rupees |
152,512,222 |
211,824,756 |
|
|
========== |
========== |
|
|
|
| 5.4 Unquoted |
|
|
| Name of |
|
Equity heir |
No. of |
Currency of |
Cost price |
Cost |
Cost of |
|
| associated |
|
(%) |
shares |
investment |
per share |
investment |
investment |
|
| company |
|
|
held |
|
as at |
as at June 30, 1999 |
|
|
|
June 30, 1999 |
Rupees |
|
|
| ORIX
Leasing Egypt SAE |
23.00 |
46,000 |
Egyptian Pounds |
EP. 100 each |
EP. 4,600,000 |
54,523,567 |
|
|
|
| The
net asset value per share was equivalent to Rs.1,640/- per share(1998:
Rs.1,366/-). |
|
|
| 5.5
Investments in associated companies are stated at cost. Had the equity method
been applied, the |
|
| total
profit for the year would have increased by Rs. 12,913,243/- (1998 · Rs.
6,727,515/-) while |
|
| the
unappropriated profit brought forward would have been higher by
Rs.11,688,543/- (1998 ' Rs. |
|
| 4,961,029).
In addition, unrealised exchange gains on investments in foreign associates
would |
|
| have
increased shareholders equity by Rs. 24,975,635/- (1998 · Rs. 21,943,178) and
long term |
|
| investment
would have increased by Rs. 49,577,421/- (1998 · Rs. 33,631,721/-). |
|
|
| 6.
LONG-TERM LOANS -secured, considered good |
|
|
|
|
| Loans
to employees: |
|
|
|
|
|
|
| Chief Executive |
|
|
|
3,401,722 |
3,537,273 |
|
|
| Directors |
|
|
|
3,004,117 |
1,652,939 |
|
|
| Executives |
|
|
|
22,426,615 |
20,601,061 |
|
|
| Other
employees |
|
|
682,261 |
505,936 |
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
29,514,715 |
26,297,209 |
|
|
| Less: Current portion |
|
|
3,271,261 |
2,671,202 |
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
Rupees |
26,243,454 |
23,626,007 |
|
|
|
|
|
========== |
========== |
|
|
| Recoverable
after three years |
|
Rupees |
23,046,570 |
20,955,612 |
|
|
| Others |
|
Rupees |
3,196,884 |
2,670,395 |
|
|
|
|
|
========== |
========== |
|
|
|
| Loans
to Chief Executive, working Directors and Executives include house loans in |
|
| accordance
with terms of the Company's employment policy, repayable within a period of
20 |
|
| years
or retirement date whichever is earlier except for the loan to Chief
Executive which is |
|
| repayable
within ten years. The loan to Chief Executive was disbursed in 1992 with
prior |
|
| approval
of Securities and Exchange Commission of Pakistan (SECP), formerly Corporate
Law |
|
| Authority.
Loans to other working Directors were made prior to their becoming Directors
and |
|
| have
been duly notified to the SECP. The loans are secured against equitable
mortgage on the |
|
| property
by depositing the title documents of the property with the Company and carry
mark-up |
|
| of
5% per annum. Loans to other employees includes motor cycle loans, repayable
within a |
|
| period
of five years and do not carry any mark-up. |
|
|
| Maximum
amount outstanding at the end of any month during the year against loans to
Chief |
|
| Executive,
working Directors and Executives is Rs. 29,687,301/- (1998: Rs. 26,930,915/-) |
|
|
|
|
| 7.
LONG-TERM DEPOSITS AND DEFERRED COSTS |
|
|
|
|
|
|
|
NOTE |
1999 |
1998 |
|
|
|
|
| Deposits |
|
|
3,223,313 |
2,877,813 |
|
| Deferred costs |
|
7.1 |
19,624,253 |
27,172,798 |
|
|
|
|
------------------ |
------------------ |
|
|
|
Rupees |
22,847,566 |
30,050,611 |
|
|
|
|
========== |
========== |
|
|
|
|
|
| 7.1
Deferred costs |
|
|
|
|
|
|
| Loan
originating cost |
|
7.1.1 |
5,495,390 |
5,298,669 |
|
| Commitment
charges |
|
|
-- |
186,291 |
|
| Exchange
differences on: |
|
|
|
|
| -
Repayment of foreign currency loans |
|
7.1.2 |
2,492,512 |
4,532,068 |
|
| -
Hedging of foreign currency loans |
|
7.1.3 |
6,022,449 |
10,189,928 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
8,514,961 |
14,721,996 |
|
| Project
development costs |
|
7.1.4 |
5,613,902 |
6,965,842 |
|
|
|
|
------------------ |
------------------ |
|
|
Rupees |
19,624,253 |
27,172,798 |
|
|
|
|
========== |
========== |
|
|
| 7.1.1
Represents loan originating cost paid to lending institutions on signing of
various loans. These |
|
| are
being written off over loan period or five years, whichever is shorter. |
|
|
| 7.1.2
Represents the increase in the amount of foreign currency loans resulting
from the difference |
|
| in
buying and selling rates of foreign currency as determined by the SBP.
Receipts of loans are |
|
| at
buying rates and are the actual amount realised in Pak rupees. Repayments,
when due, will |
|
| be
made at selling rates in accordance with the SBP rules. The difference
arising from the use |
|
| of
above mentioned rates is treated as deferred costs to be written off over
loan period or five |
|
| years,
whichever is shorter. |
|
|
| 7.1.3
In the absence of Exchange Risk Cover by the SBP, the Company had adopted an
alternative |
|
| method
to hedge foreign exchange risk associated with its foreign currency
borrowings. This |
|
| involved
purchasing foreign currency from the secondary market, placing the foreign
currency |
|
| on
deposit and obtaining credit facilities against these deposits in local
currency on matching |
|
| basis.
Premium paid on purchase of foreign currency from the secondary market is
deferred |
|
| and
is written off over the loan period or five years whichever is shorter. |
|
|
| Since
opening of new foreign currency deposit accounts is no longer feasible, this
method of |
|
| hedging
will not be available for future foreign currency loans. |
|
|
| 7.1.4
This represents expenditure in connection with development of projects
already completed and |
|
| new
joint ventures and are being amortised in accordance with the policy
mentioned in Note 2.7.2. |
|
|
|
|
|
|
NOTE |
1999 |
1998 |
|
|
|
|
| 8.
CURRENT ASSETS |
|
|
|
|
|
|
| Current
portion of net investment in leases, |
|
|
| installment
loans and long-term loans |
|
8.1 |
2,023,274,994 |
1,857,006,462 |
|
| Short
term loans - secured - considered good |
|
8.2 |
14,500,000 |
14,500,000 |
|
| Short
term investments |
|
5.1 |
8,766,360 |
10,000,000 |
|
| Other
current assets |
|
8.3 |
173,972,423 |
55,985,381 |
|
| Cash
and bank balances |
|
8.4 |
159,181,157 |
211,151,202 |
|
|
|
|
------------------ |
------------------ |
|
|
Rupees |
2,379,694,934 |
2,148,643,045 |
|
|
|
|
========== |
========== |
|
|
|
|
| 8.1
Current maturity |
|
|
|
|
|
|
| Net
investment in leases and Installment loans |
|
|
2,020,003,733 |
1,854,335,260 |
|
| Long-term
loans - considered good |
|
|
3,271,261 |
2,671,202 |
|
|
|
|
------------------ |
------------------ |
|
|
|
Rupees |
2,023,274,994 |
1,857,006,462 |
|
|
|
|
========== |
========== |
|
|
|
| 8.2
Represents short-term finance facilities provided on secured basis in the
normal course of |
|
| business. |
|
|
|
|
| 8.3
Other current assets |
|
|
|
|
|
|
| Advances
- unsecured considered good |
|
|
2,316,348 |
2,601,629 |
|
| Advance
payment of wealth tax |
|
|
40,000 |
40,000 |
|
| Short-term
prepayments |
|
|
| Insurance |
|
|
|
| Leased assets |
|
|
|
19,354,468 |
12,257,748 |
|
| Own assets |
|
|
|
1,810,790 |
1,609,422 |
|
| Rent |
|
|
|
154,000 |
153,960 |
|
| Others |
|
|
|
4,759,241 |
3,927,937 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
26,078,499 |
17,949,067 |
|
|
|
|
| Accrued
return on investments and deposits |
|
|
30,421,618 |
30,463,366 |
|
| Net
receivable against foreign loan |
|
|
|
| payments
covered under foreign |
|
|
|
| exchange
risk cover scheme |
|
8.3.1 |
86,375,178 |
-- |
|
| Operating
lease rents receivable |
|
|
12,450,265 |
2,953,785 |
|
| Central
Excise Duty (CED) receivable |
|
8.3.2 |
14,196,776 |
-- |
|
| Other
receivables |
|
|
2,093,739 |
1,977,534 |
|
|
|
|
------------------ |
------------------ |
|
|
|
Rupees |
173,972,423 |
55,985,381 |
|
|
|
|
========== |
========== |
|
|
| 8.3.1
Represents net amount receivable from the State Bank of Pakistan (SBP) on
account of |
|
| repayments
of foreign currency loans registered under foreign exchange risk cover
scheme. |
|
| This
amount is a net balance of exchange differences refundable from SBP and
exchange risk |
|
| fee
payable to the SBP. |
|
|
| 8.3.2
Represents amount paid on account of CED recoverable from lessees. |
|
|
|
|
NOTE |
1999 |
1998 |
|
|
|
|
| 8.4
Cash and bank balances |
|
|
|
|
|
|
| Balances
with banks on: |
|
|
|
| Current
accounts |
|
|
19,046,845 |
2,581,982 |
|
| Deposit
accounts |
|
8.4.1 |
20,302,714 |
122,985,239 |
|
| Foreign
currency deposit |
|
|
|
| accounts
under lien - net |
|
8.4.2 |
119,502,960 |
85,154,703 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
158,852,519 |
210,721,924 |
|
| Cash in hand |
|
|
328,638 |
429,278 |
|
|
|
|
------------------ |
------------------ |
|
|
|
Rupees |
159,181,157 |
211,151,202 |
|
|
|
|
========== |
========== |
|
|
|
|
| 8.4.1
Includes a deposit of Rs. 1,400,000/- (1998 · Rs. 1,050,000/-) with the State
Bank of |
|
| Pakistan
(SBP) as required under the relevant provision of the SBP's Rules for
Non-Bank |
|
| Financial
Institutions to maintain liquidity against certain liabilities. The rate of
interest ranges |
|
| from
6.5% to 10% per annum on these accounts. |
|
|
|
|
|
| 8.4.2
Foreign currency deposit account under lien |
|
|
|
|
|
| Foreign
currency deposits |
|
|
459,755,918 |
489,108,626 |
|
| Credit
facilities availed |
|
8.4.2.1 |
(340,252,958) |
(403,953,923) |
|
|
|
|
------------------ |
------------------ |
|
|
|
Rupees |
119,502,960 |
85,154,703 |
|
|
|
|
========== |
========== |
|
|
| 8.4.2.1
As explained in Note 7.1.3 foreign currency deposits were created as a hedge
against |
|
| exchange
risks associated with foreign currency borrowings. Credit facilities in
Rupees have |
|
| been
availed against security of the foreign currency deposits and have been
offset in |
|
| accordance
with the policy stated in Note 2.10. The rate of mark-up ranges from 13.9% to |
|
| 15.14%
per annum while the rate of interest on foreign currency deposits ranges from
6.8% to |
|
| 7.8%
per annum. The maturity of credit facility and foreign currency deposits are
upto |
|
| September 2003. |
|
|
| 9.
ISSUED, SUBSCRIBED AND PAID-UP SHARE CAPITAL |
|
|
|
|
1999 |
1998 |
|
1999 |
1998 |
|
|
|
Number of
Shares |
|
Rupees |
|
|
| Ordinary
Shares of Rs. 10/- each |
|
| Fully
paid in Cash |
13,106,249 |
13,106,249 |
|
131,062,490 |
131,062,490 |
|
| Fully
paid bonus shares |
|
|
|
|
|
|
3,004,704 |
3,004,704 |
Beginning of the year |
30,047,040 |
30,047,040 |
|
|
|
4,027,738 |
-- |
Issued during the year |
40,277,380 |
-- |
|
|
|
------------------ |
------------------ |
|
|
------------------ |
------------------ |
|
|
|
7,032,442 |
3,004,704 |
|
70,324,420 |
30,047,040 |
|
|
|
------------------ |
------------------ |
|
------------------ |
------------------ |
|
|
|
20,138,691 |
16,110,953 |
|
201,386,910 |
161,109,530 |
|
|
|
========== |
========== |
|
========== |
========== |
|
|
| ORIX
Corporation, Japan and its nominees held 11,494,558 (1998: 9,195,647)
Ordinary |
|
| shares
of Rs. 10/- each at June 30, 1999. |
|
|
|
|
|
|
|
NOTE |
1999 |
1998 |
|
|
|
|
| 10. RESERVES |
|
|
|
|
|
|
| Capital
reserves: |
|
|
|
| Share premium |
|
|
287,216,909 |
287,216,909 |
|
| Statutory
reserve |
|
10.1 |
216,100,000 |
-- |
|
| Reserve
for deferred tax |
|
10.2 |
48,700,000 |
-- |
|
| Reserve
for issue of bonus shares |
|
|
-- |
40,277,380 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
552,016,909 |
327,494,289 |
|
| Revenue
reserves: |
|
|
|
| General reserve |
|
|
117,118,010 |
326,218,010 |
|
| Unappropriated
profit |
|
|
245,564 |
6,037,576 |
|
|
|
|
------------------ |
------------------ |
|
|
|
117,364,574 |
332,255,586 |
|
|
|
------------------ |
------------------ |
|
|
Rupees |
689,381,483 |
659,749,875 |
|
|
|
|
========== |
========== |
|
|
|
| 10.1
The Statutory reserve represents profit set aside as required under the State
Bank of Pakistan |
|
| rules
for Non-Banking Financial Institutions (NBFIs) and have been created since
inception of |
|
| NBFIs
rules. These were included in General reserves and during the year have been |
|
| reclassified
and disclosed separately. |
|
|
| 10.2
International Accounting Standard 12 "Income Taxes" (revised)
requires that full liability |
|
| against
deferred taxation should be provided in the year to which it relates.
Circular no 16 of 10 |
|
| September
1999 issued by the Securities and Exchange Commission of Pakistan (SECP) |
|
| states
that in order to achieve compliance with the revised IAS-12, all leasing
companies, |
|
| during
each of the five financial years beginning July 1, 1998 and ending June 30,
2003, shall |
|
| provide
deferred tax liability arising in that year together with a further amount
equal to one fifth |
|
| of
the unprovided deferred tax liability at the beginning of the financial year
ending June 30, |
|
| 1999.
Deferred tax will be deemed to have been provided if a leasing company
transfers such |
|
| amount
to a Capital Reserve account which would not be available for utilisation for
any |
|
| purpose
other than to provide for deferred tax liability. |
|
|
| Deferred
taxation arising due to timing differences between book and income tax
revenue or |
|
| charges
is estimated at Rs. 185.5 million (1998: Rs. 171.1 million). As at June 30,
1999, the |
|
| Company
has transferred an amount of Rs. 48.7 million (Rs. 14.5 million for the
current year |
|
| and
Rs. 34.2 million being one fifth of the total deferred tax liability for
previous years ) to |
|
| comply
with the SECP's requirement for creating Capital reserve for deferred tax.
Unprovided |
|
| deferred
tax amounting to Rs. 136.8 million shall be appropriated to Capital reserve
for |
|
| deferred
tax in equal annual installments by June 30, 2003. |
|
|
| 10.3
Statement of Changes in Equity |
|
|
|
|
|
Share Capital |
Share |
Reserve for |
General |
Statutory |
Capital reserve |
Unappropriated |
Total |
|
|
|
|
Premium |
issue of bonus |
reserve |
reserve |
for Deferred tax |
profit |
|
|
|
|
|
Shares |
|
|
|
|
|
| Balance
as at June 30, 1997 |
|
161,109,530 |
287,216,909 |
-- |
296,218,010 |
-- |
-- |
4,643,293 |
749,187,742 |
|
| Profit
for the year |
|
-- |
-- |
-- |
-- |
-- |
-- |
103,893,569 |
103,893,569 |
|
| Dividend |
|
|
-- |
-- |
-- |
-- |
-- |
-- |
(32,221,906) |
(32,221,906) |
|
| Proposed
Bonus Shares |
|
-- |
-- |
40,277,380 |
-- |
-- |
-- |
(40,277,380) |
-- |
|
| Transferred
during the year |
|
-- |
-- |
-- |
30,000,000 |
-- |
-- |
(30,000,000) |
-- |
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
| Balance
as at June 30, 1998 |
|
161,109,530 |
287,216,909 |
40,277,380 |
326,218,010 |
-- |
-- |
6,037,576 |
820,859,405 |
|
| Profit
for the year |
|
-- |
-- |
-- |
-- |
-- |
-- |
130,463,752 |
130,463,752 |
|
| Dividend |
|
|
-- |
-- |
-- |
-- |
-- |
-- |
(80,554,764) |
(80,554,764) |
|
| Bonus
shares issued during the year |
40,277,380 |
-- |
(40,277,380) |
-- |
-- |
-- |
-- |
-- |
|
| Transferred
from general reserve |
|
-- |
-- |
-- |
(209,100,000) |
209,100,000 |
-- |
-- |
-- |
|
| Transferred
during the year |
|
-- |
-- |
-- |
-- |
7,000,000 |
48,700,000 |
(55,700,000) |
-- |
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
| Balance
as at June 30, 1999 |
|
201,386,910 |
287,216,909 |
-- |
117,118,010 |
216,100,000 |
48,700,000 |
246,564 |
870,768,393 |
|
|
|
========== |
========== |
========== |
========== |
========== |
========== |
========== |
========== |
|
|
| 11.
LONG TERM LOANS - secured |
|
|
| Note |
Sanctioned |
Utilised
amount |
Rupees |
Mark up |
Exchange |
|
|
amount |
1999 |
1998 |
1999 |
1998 |
rate |
risk fee |
|
|
(%) |
(%) |
|
|
(in millions) |
|
|
| Foreign
currency loans |
|
| US Dollars |
|
|
| 11.1 |
10.0 |
10.0 |
10.0 |
23,176,033 |
69,527,849 |
9.4 |
7.08 |
|
|
| 11.2 |
20.0 |
9.8 |
9.8 |
453,861,361 |
453,178,377 |
2.125 |
-- |
|
|
|
|
over LIBOR |
|
|
|
| 11.3 |
12.5 |
12.5 |
12.5 |
200,506,975 |
245,064,035 |
8.5 |
6.66 |
|
|
| 11.4 |
3.3 |
3.3 |
3.3 |
-- |
38,329,500 |
2.75 |
-- |
|
|
|
|
over LIBOR |
|
|
|
| 11.5 |
19.1 |
19.1 |
18.5 |
579,814,263 |
586,355,071 |
16.0 |
Inclusive in |
|
|
|
|
mark-up |
|
|
| ------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
|
|
64.9 |
54.7 |
54.1 |
1,257,358,632 |
1,392,454,832 |
|
| ------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
|
|
| Netherland
Guilders |
|
|
| 11.6 |
10.0 |
10.0 |
10.0 |
51,645,950 |
86,076,750 |
10.2 |
5.00 |
|
|
| 11.7 |
4.0 |
4.0 |
4.0 |
8,738,050 |
26,148,068 |
10.2 |
5.00 |
|
|
| ------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
|
|
14.0 |
14.0 |
14.0 |
60,384,000 |
112,224,818 |
|
| ------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
|
| Local
currency loans |
|
| Rupees |
|
|
| Note |
Sanctioned |
Utilised
amount |
Rupees |
Mark up |
|
|
amount |
1999 |
1998 |
1999 |
1998 |
rate |
|
|
(%) |
|
|
(Rupees in millions) |
|
|
| 1 1.8 |
342.5 |
342.5 |
342.5 |
-- |
114,166,666 |
18.50 |
|
|
| 1 1.9 |
50.0 |
50.0 |
50.0 |
-- |
16,666,667 |
18.00 |
|
|
| 1 1.1 0 |
50.0 |
50.0 |
50.0 |
-- |
16,666,666 |
18.00 |
|
|
| 1 1.1 1 |
25.0 |
25.0 |
25.0 |
2,639,237 |
12,079,914 |
18.50 |
|
|
| 1 1.12 |
40.0 |
40.0 |
40.0 |
-- |
19,999,999 |
18.00 |
|
|
| 1 1.13 |
100.0 |
100.0 |
100.0 |
-- |
90,000,000 |
18.00 |
|
|
| 1 1.14 |
50.0 |
50.0 |
50.0 |
16,666,666 |
33,333,333 |
19.00 |
|
|
| 1 1.15 |
100.0 |
100.0 |
100.0 |
-- |
100,000,000 |
18.00 |
|
|
| 1 1.16 |
30.0 |
30.0 |
30.0 |
16,666,668 |
30,000,000 |
18.00 |
|
|
| 1 1.17 |
120.0 |
120.0 |
120.0 |
-- |
60,000,000 |
18.50 |
|
|
| 11.18 |
100.0 |
100.0 |
100.0 |
37,500,000 |
87,500,000 |
17.25 |
|
|
| 11.19 |
50.0 |
50.0 |
50.0 |
50,000,000 |
50,000,000 |
17.65 |
|
|
| 11.20 |
40.0 |
40.0 |
40.0 |
20,000,002 |
33,333,334 |
18.00 |
|
|
| 11.21 |
50.0 |
50.0 |
50.0 |
37,500,000 |
50,000,000 |
18.50 |
|
|
| 11.22 |
100.0 |
100.0 |
100.0 |
100,000,000 |
100,000,000 |
18.50 |
|
|
| 11.23 |
50.0 |
50.0 |
50.0 |
50,000,000 |
50,000,000 |
17.50 |
|
|
| 11.24 |
50.0 |
50.0 |
50.0 |
50,000,000 |
50,000,000 |
17.75 |
|
|
| 11.25 |
400.0 |
400.0 |
-- |
333,333,333 |
-- |
Note 11.25 (a) |
|
| 11.26 |
50.0 |
50.0 |
-- |
50,000,000 |
-- |
17.25 |
|
|
| 11.27 |
170.0 |
170.0 |
-- |
169,978,786 |
-- |
18.25 |
|
|
| 11.28 |
50.0 |
50.0 |
-- |
41,666,667 |
-- |
Note 11.28 (a) |
|
| 11.29 |
80.0 |
80.0 |
-- |
70,000,000 |
-- |
18.00 |
|
|
| 11.30 |
50.0 |
50.0 |
-- |
42,567,772 |
-- |
18.25 |
|
|
| 11.31 |
50.0 |
50.0 |
-- |
50,000,000 |
-- |
18.50 |
|
|
| 11.32 |
200.0 |
200.0 |
-- |
200,000,000 |
-- |
Note 11.32 (a) |
|
| 11.33 |
15.2 |
15.2 |
-- |
15,176,970 |
-- |
16.00 |
|
|
| 11.34 |
150.0 |
150.0 |
-- |
150,000,000 |
-- |
Note 11.34 (a) |
|
| 11.35 |
100.0 |
100.0 |
-- |
100,000,000 |
-- |
18.00 |
|
|
| 11.36 |
60.0 |
60.0 |
-- |
60,000,000 |
-- |
Note 11.36 (a) |
|
| 11.37 |
60.0 |
60.0 |
-- |
60,000,000 |
-- |
15.00 |
|
|
| ------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
|
2,782.7 |
2,782.7 |
1,347.5 |
1,723,696,101 |
913,746,579 |
|
| ------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
|
3,041,438,733 |
2,418,426,229 |
|
| Less:
Current maturity |
|
1,057,561,670 |
718,756,011 |
|
|
|
------------------ |
------------------ |
|
|
Rupees |
1,983,877,063 |
1,699,670,218 |
|
|
========== |
========== |
|
|
| The
above loans are secured by hypothecation of leased assets and related lease
receivables and the exchange |
|
| risk
fee is further secured by guarantees from commercial banks. |
|
|
| The
local currency loans are obtained under sale and purchase agreements for
financing of lease operations. |
|
|
| 11.25(a) |
|
| This
loan carries a mark-up of 3 percent over six months weighted average auction
rate of Government treasury bills |
|
| with
a minimum of 18 percent and a maximum of 20 percent. |
|
|
| 11.28(a) |
|
| This
loan carries a mark-up of 2 percent over six months auction rate of
Government treasury bills with a minimum |
|
| of
16.5 percent and a maximum of 19 percent. |
|
|
| 11.32(a) |
|
| This
loan carries a mark-up of 2.5 percent over six months weighted average
auction rate of Government treasury |
|
| bills
with a minimum of 18 percent and a maximum of 20 percent. |
|
|
| 11.34(a) |
|
| This
loan carries a mark-up of 2 percent over six months auction rate of
Government treasury bills with a minimum |
|
| of
16 percent and a maximum of 19 percent. |
|
|
| 11.36(a) |
|
| This
loan carries mark-up of 16 percent with an increase of 0.5 percent after the
first year and 1 percent in the last |
|
| year of the loan. |
|
|
|
| Name of lending institutions |
|
Note |
Commencement |
Mode of |
Mode of |
|
|
|
|
|
of repayment |
Principal
repayment |
Payment of |
|
|
|
|
|
|
mark up |
|
|
| 11.1 |
Asian Development Bank |
|
15-Jan-1994 |
12 equal semi annual
installments |
Semi annual |
|
|
Loan 1133 Pak (PS) |
|
|
|
|
|
| 11.2 |
Asian Development Bank |
|
11.2.1 |
15-Mar-1999 |
10 equal semi annual
installments |
Semi annual |
|
|
Loan 1394 Pak (PS) |
|
|
|
|
|
| 11.3 |
International Finance
Corporation |
|
|
15-Jun-1996 |
16 equal semi annual
installments |
Semi annual |
|
|
Loan INT/PK 4252(A) |
|
|
|
|
|
| 11.4 |
International Finance
Corporation |
|
11.4.1 |
15-Jun-1997 |
4 equal semi annual
installments |
Semi annual |
|
|
Loan INT/PK 4252(B) |
|
|
|
| 11.5 |
International Bank for |
|
11.5.1 |
14-Sep-1996 |
Repayment in ten years
after three |
Semi annual |
|
|
Reconstruction and
Development |
|
|
|
years grace period. |
|
|
| 11.6 |
FMO Loan INT/PK 93033 |
|
|
01-Apr-1996 |
10 equal semi annual
installments |
Semi annual |
|
| 11.7 |
FMO Loan INT/PK 93032 |
|
|
01-Apr-1996 |
8 equal semi annual
installments |
Semi annual |
|
| 11.8 |
Pakistan Kuwait
Investment Company |
|
30-Dec-1996 |
3 equal annual
installments |
Quarterly |
|
|
(Private) Limited |
|
|
|
| 11.9 |
ANZ Grindlays Bank
Limited |
|
13-Dec-1996 |
6 equal semi annual
installments |
Quarterly |
|
| 11.10 |
First International
Investment Bank |
|
29-Dec-1996 |
6 equal semi annual
installments |
Semi annual |
|
|
Limited |
|
|
|
|
| 11.11 |
Saudi Pak Industrial
& Agricultural |
|
01 -Oct-1996 |
Quarterly repayments |
Quarterly |
|
|
Investment Company
(Private) Limited |
|
|
|
|
|
| 11.12 |
American Express Bank
Limited |
|
30-Jun-1997 |
6 equal semi annual
installments |
Quarterly |
|
| 11.13 |
Citicorp Investment Bank
Pakistan |
|
11-Jan-1998 |
4 semi annual
installments of Rs.10 |
Quarterly |
|
|
Limited |
|
|
|
|
million and 1 installment
of Rs.60 |
|
|
|
|
|
million thereafter. |
|
| 11.14 |
ANZ Grindlays Bank
Limited |
|
20-May-1998 |
3 equal annual
installments |
Semi annual |
|
| 11.15 |
ANZ Grindlays Bank
Limited |
|
10-Aug-1998 |
2 equal annual
installments |
Semi annual |
|
| 11.16 |
Oman International Bank
SAOG |
|
31-Ju1-1998 |
9 equal quarterly
installments |
Quarterly |
|
| 11.17 |
ABN AMRO Bank N.V. |
|
02-Ju1-1998 |
Full repayment on due
date |
Quarterly |
|
| 11.18 |
Standard Chartered Bank |
|
28-Apr-1998 |
8 equal quarterly
installments |
Quarterly |
|
| 11.19 |
Pakistan Kuwait
Investment Company |
|
30-Mar-2000 |
2 equal quarterly
installments |
Quarterly |
|
|
(Private) Limited |
|
|
after 2 years grace
period |
|
| 11.20 |
Standard Chartered Bank |
|
01-Mar-1998 |
12 equal quarterly
installments |
Quarterly |
|
| 11.21 |
The Bank of
Tokyo-Mitsubishi Limited |
|
26-Jun-1999 |
4 equal semi annual
installments |
Semi annual |
|
|
|
|
after 1 year grace period |
|
| 11.22 |
AI-Faysal Investment Bank
Limited |
|
03-Dec-2000 |
Full repayment on due
date |
Quarterly |
|
| 11.23 |
Faysal Bank Limited |
|
30-Dec-1999 |
Full repayment on due
date |
Quarterly |
|
| 11.24 |
ANZ Grindlays Bank
limited |
|
30-Ju1-1999 |
Full repayment on due
date |
Quarterly |
|
| 11.25 |
Habib Bank Limited |
|
26-Apr-1999 |
6 equal semi annual
installments |
Semi annual |
|
| 11.26 |
Al Meezan Investment Bank
Limited |
|
05-Mar-2000 |
Full repayment on due
date |
Quarterly |
|
| 11.27 |
Al-Faysal Investment Bank
Limited |
|
30-Dec-1999 |
20% loan repayable after
1 year |
|
|
|
|
|
|
|
& balance payable1
year thereafter |
Quarterly |
|
| 11.28 |
Muslim Commercial Bank
Limited |
|
29-Jun-1999 |
6 equal semi annual
installments |
Semi annual |
|
| 11.29 |
Citibank N.A. |
|
11 -Jan-1999 |
2 installments of Rs. 10
million and |
|
|
|
|
|
balance payable after 6
months |
Quarterly |
|
| 11.30 |
Saudi Pak Industrial
& Agricultural |
|
13-Jun-1999 |
6 quarterly installments |
Quarterly |
|
|
Investment Company
(Private) Limited |
|
|
|
|
|
| 11.31 |
First International
Investment Bank |
|
30-Sep-1999 |
6 equal semi annual
installments |
Quarterly |
|
|
Limited |
|
|
|
|
|
|
| 11.32 |
United Bank Limited |
|
28-Ju1-1999 |
8 equal quarterly
installments |
Quarterly |
|
| 11.33 |
Emirates International
Bank PJSC |
|
01-Sep-1999 |
12 quarterly installments |
Quarterly |
|
| 11.34 |
Muslim Commercial Bank
Limited |
|
22-Dec-1999 |
6 equal semi annual
installments |
Semi annual |
|
| 11.35 |
Pakistan Kuwait
investment Company |
|
22-Jun-2001 |
2 equal annual
installments after |
|
|
|
(Private) Limited |
|
|
2 years grace period |
Quarterly |
|
| 11.36 |
Oman International Bank
SAOG |
|
30-Dec-1999 |
6 equal semi annual
installments |
Quarterly |
|
| 11.37 |
ABN AMRO Bank N.V. |
|
30-Jul-2000 |
Full repayment on due
date |
Quarterly |
|
|
|
|
| All
loans have been obtained for financing of lease operations except for loans
from IBRD and |
|
| FMO
loan INT/PK 93032, which have been obtained for financing of small scale and
micro |
|
| enterprises. |
|
|
| 11.2.1
Represents a foreign currency loan from ADB of US$ 20.0 million to be used
for financing of |
|
| lease
operations. Commitment charges are payable semi-annually at a rate of 0.5%
per |
|
| annum.
Such commitment charges are payable (a) during the first twelve months from
the date |
|
| of
agreement, on 50% of the unutilised part of the loan and (b) thereafter, on
the entire |
|
| unutilised
part of the loan. As explained in Note 7.1.3 exchange risk is hedged by use
of an |
|
| alternate
method. |
|
|
| 11.4.1
Represents a foreign currency loan referred to as Loan 'B' for US $ 3.3
million arranged by |
|
| IFC
through a syndicate of international banks. As explained in Note 7.1.3
exchange risk is |
|
| hedged
by use of an alternate method. |
|
|
| 11.5.1
The International Bank for Reconstruction and Development (IBRD) sanctioned a
foreign currency |
|
| pool
loan equivalent to US$ 26.0 million to Government of Pakistan (GOP) for
on-lending to |
|
| approved
leasing companies in local currency for financing small scale and micro
enterprises. |
|
|
|
|
| The
loan carries charges at the rate of 16% per annum which includes interest,
administration |
|
| charge,
guarantee commission and foreign exchange risk fee. |
|
|
|
|
|
|
NOTE |
1999 |
1998 |
|
|
|
|
| 12.
LONG TERM CERTIFICATES OF INVESTMENT |
|
| Certificates
of Investment |
|
|
14,456,602 |
8,898,918 |
|
| Less:
Current maturity |
|
14.1 |
2,923,294 |
1,520,680 |
|
|
|
|
------------------ |
------------------ |
|
|
|
Rupees |
11,533,308 |
7,378,238 |
|
|
|
|
========== |
========== |
|
|
|
|
| Represents
long term certificates of investment issued under profit and loss sharing
basis at |
|
| expected
rates of profit ranging from 16.5% to 18% per annum. The certificates of
investment |
|
| are
for terms of two years to five years. |
|
|
|
|
|
| 13.
LONG TERM ADVANCES AND DEPOSITS |
|
|
| Security
deposit on leases |
|
13.1 |
888,752,920 |
723,419,404 |
|
| Less:
Repayable/adjustable within 12 months |
|
|
212,075,187 |
147,370,155 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
676,677,733 |
576,049,249 |
|
| Advance
lease rentals received |
|
13.2 |
2,711,933 |
166,650 |
|
|
|
|
------------------ |
------------------ |
|
|
|
Rupees |
679,389,666 |
576,215,899 |
|
|
|
|
========== |
========== |
|
|
| 13.1
Represents sums received from lessees under lease contracts and are
repayable/adjustable at |
|
| the
expiry of the lease period. |
|
|
| 13.2
Represents sums received in advance and are adjustable against last rents due
as per the |
|
| lease agreement. |
|
|
|
|
NOTE |
1999 |
1998 |
|
|
|
|
| 14.
CURRENT LIABILITIES |
|
|
|
| Current
maturity of long-term loans, |
|
|
| certificates
of investment and security deposit |
|
14.1 |
1,272,560,151 |
867,646,846 |
|
| Short-term
loans from banks - secured |
|
|
-- |
15,000,000 |
|
| Running
finance under mark-up |
|
|
|
| arrangements
- secured |
|
14.2 |
4,867,621 |
38,361,803 |
|
| Short-term
certificates of investment |
|
14.3 |
131,666,709 |
324,164,409 |
|
| Accrued
financial and related charges |
|
14.4 |
130,692,332 |
138,576,037 |
|
| Creditors |
|
|
18,630,442 |
16,250,290 |
|
| Accrued
expenses |
|
|
8,590,633 |
7,171,273 |
|
| Other liabilities |
|
14.5 |
9,080,804 |
7,146,646 |
|
| Provision
for taxation - net |
|
23 |
12,472,274 |
29,261,678 |
|
| Proposed
dividend |
|
|
80,554,764 |
32,221,906 |
|
|
|
|
------------------ |
------------------ |
|
|
Rupees |
1,669,115,730 |
1,475,800,888 |
|
|
|
|
|
|
========== |
========== |
|
|
|
|
| 14.1
Current maturity |
|
|
|
|
|
|
| Long-term loans |
|
11 |
1,057,561,670 |
718,756,011 |
|
| Certificates
of investment |
|
12 |
2,923,294 |
1,520,680 |
|
| Security
deposit on leases |
|
13 |
212,075,187 |
147,370,155 |
|
|
|
|
------------------ |
------------------ |
|
|
|
Rupees |
1,272,560,151 |
867,646,846 |
|
|
|
|
========== |
========== |
|
|
|
| 14.2
Represents running finance utilised against aggregate facilities from
commercial banks of |
|
| Rs.
289 million (1998: Rs. 317 million) for one year and are renewable. The
average rate of |
|
| mark-up
is 44 paisas per Rs.I,000/- per day on daily product basis. These
arrangements are |
|
| secured
by hypothecation of leased assets and related lease receivables. |
|
|
| 14.3
Represents short term certificates of investment issued under profit and loss
sharing basis at |
|
| expected
rates of profit ranging from 15.0% to 16.6% per annum. The certificates of |
|
| investment
are for terms of three to twelve months. |
|
|
|
|
|
1999 |
1998 |
|
|
|
|
| 14.4
Accrued financial and related charges |
|
|
|
|
|
| Mark-up
on secured loans |
|
|
|
| Long-term loans |
|
|
115,776,516 |
126,070,653 |
|
| Short-term loans |
|
|
48,573 |
2,657,898 |
|
| Running finance |
|
|
3,586,297 |
6,015,211 |
|
| Profit
on certificates of investment |
|
|
10,156,103 |
1,390,636 |
|
| Commitment
charges |
|
|
1,124,843 |
700,809 |
|
| Exchange
risk fee- net |
|
|
-- |
1,740,830 |
|
|
|
|
------------------ |
------------------ |
|
|
|
Rupees |
130,692,332 |
138,576,037 |
|
|
|
|
========== |
========== |
|
|
|
|
|
| 14.5
Other liabilities |
|
|
|
|
|
|
| Advance
from customers pending lease execution |
|
|
4,407,166 |
3,744,361 |
|
| Unclaimed
dividend |
|
|
947,361 |
1,010,808 |
|
| Others |
|
|
3,726,277 |
2,391,477 |
|
|
|
|
------------------ |
------------------ |
|
|
|
Rupees |
9,080,804 |
7,146,646 |
|
|
|
|
========== |
========== |
|
|
|
|
| 15.
CONTINGENCIES AND COMMITMENTS |
|
|
| Leasing
contracts committed but not executed at the balance sheet date were Rs. 10.3
million |
|
| (1998:
Rs. 19.8 million). |
|
|
|
|
|
|
| 16.
INCOME FROM FINANCE LEASES |
|
|
| Represents
lease income recognised in accordance with the accounting policy as explained
in |
|
| Note
2.3.1, against lease rentals received and receivable for the year, amounting
to Rs. |
|
| 2,014,579,679/-
(1998: Rs. 1,888,172,699/-). |
|
|
|
|
|
| 17.
OTHER INCOME |
|
|
|
| Return
on foreign currency deposits |
|
|
41,749,753 |
42,367,895 |
|
| Return
on deposits and investments |
|
|
20,061,885 |
15,471,434 |
|
| (Loss)
/ gain on disposal of operating and leased assets |
|
(2,024) |
1,052,557 |
|
| Other
fees and income |
|
|
14,267,912 |
9,864,104 |
|
| Exchange
gain / (loss) |
|
|
18,886,300 |
(954,831) |
|
| Dividend
income |
|
|
11,836,059 |
4,729,081 |
|
|
|
|
------------------ |
------------------ |
|
|
|
Rupees |
106,799,885 |
72,530,240 |
|
|
|
|
========== |
========== |
|
|
|
|
NOTE |
1999 |
1998 |
|
|
|
|
| 18.
FINANCE AND BANK CHARGES |
|
|
| Mark-up on |
|
|
|
| Redeemable
capital |
|
-- |
533,574 |
|
| Long-term loan |
|
|
429,199,560 |
420,227,671 |
|
| Short-term loan |
|
|
16,555,776 |
15,758,847 |
|
| Running finance |
|
|
9,247,938 |
24,588,909 |
|
| Profit
on certificates of investment |
|
52,683,149 |
22,485,380 |
|
| Commitment
charges |
|
3,234,037 |
2,284,947 |
|
| Exchange
risk fee |
|
23,832,667 |
31,716,370 |
|
| Amortisation
of deferred financial costs |
|
15,095,170 |
18,120,839 |
|
| Bank
charges and commission |
|
|
1,290,947 |
1,271,974 |
|
|
|
|
------------------ |
------------------ |
|
|
|
Rupees |
551,139,244 |
536,988,511 |
|
|
|
|
========== |
========== |
|
|
|
|
| 19.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES |
|
|
|
|
| Salaries,
allowances, welfare and training |
|
19.10 |
63,502,476 |
57,370,866 |
|
| Rent
and utilities |
|
|
14,613,829 |
12,535,972 |
|
| Travelling |
|
|
4,703,230 |
4,409,447 |
|
| Vehicle
running and maintenance |
|
|
4,641,803 |
4,083,351 |
|
| Insurance
on operating assets |
|
|
2,221,645 |
2,800,125 |
|
| Legal
and professional charges |
|
|
3,035,271 |
4,365,951 |
|
| Communication |
|
|
5,523,726 |
5,712,440 |
|
| Subscriptions |
|
|
548,636 |
484,547 |
|
| Auditors'
remuneration |
|
19.2 |
1,257,400 |
605,225 |
|
| Advertising |
|
|
1,881,871 |
3,090,754 |
|
| Printing
and stationery |
|
|
2,767,898 |
2,303,157 |
|
| Depreciation |
|
|
12,453,664 |
12,270,300 |
|
| Office
repairs and maintenance of equipment |
|
|
3,518,818 |
3,284,663 |
|
| Donations |
|
19.3 |
1,460,566 |
1,612,305 |
|
| Office
general expenses |
|
|
254,913 |
242,596 |
|
|
|
|
------------------ |
------------------ |
|
|
|
Rupees |
122,385,746 |
115,171,699 |
|
|
|
|
========== |
========== |
|
|
|
|
|
| 19.1
Includes Rs. 3.3 million (1998 · Rs. 2.5 million) in respect of defined
benefit gratuity scheme. |
|
|
|
|
| 19.2
Auditors' remuneration |
|
|
|
|
|
|
| Audit fee |
|
|
150,000 |
150,000 |
|
| Fee
for special audit and certificates |
|
|
150,000 |
-- |
|
| Tax
and corporate advisory services |
|
|
929,000 |
434,225 |
|
| Out
of pocket expenses |
|
|
28,400 |
21,000 |
|
|
|
|
------------------ |
------------------ |
|
|
|
Rupees |
1,257,400 |
605,225 |
|
|
|
|
========== |
========== |
|
|
| 19.3 Donations |
|
|
| Donations
include payments of Rs. 32,000/- and Rs. 110,000/- to the Patients' Aid |
|
| Foundation
and Marie Adelaide Leprosy Centre respectively. The Chief Executive, Mr. |
|
| Humayun
Murad, is a member of the Board of Governors of these registered charities. |
|
|
| 19.4
The average number of employees during the year were 195 (1998 · 187). |
|
|
| 20.
DIRECT COST OF LEASES |
|
|
|
|
NOTE |
1999 |
1998 |
|
|
|
|
| 20.1
Finance lease and Installment loans |
|
|
|
|
|
| Insurance |
|
|
27,227,778 |
20,301,163 |
|
| Court
fee and stamp duty |
|
1,583,223 |
1,334,035 |
|
|
|
------------------ |
------------------ |
|
|
|
Rupees |
28,811,001 |
21,635,198 |
|
|
|
|
========== |
========== |
|
|
|
|
|
| 20.2
Operating Lease |
|
|
|
|
|
|
| Maintenance
and insurance |
|
|
11,089,014 |
1,885,747 |
|
| Depreciation |
|
|
9,344,611 |
1,390,690 |
|
|
|
|
------------------ |
------------------ |
|
|
|
Rupees |
20,433,625 |
3,276,437 |
|
|
|
|
========== |
========== |
|
|
| 21.
REMUNERATION OF CHIEF EXECUTIVE, DIRECTORS AND EXECUTIVES |
|
|
|
|
|
1999 |
|
|
1998 |
|
|
|
Chief |
|
Chief |
|
|
|
Executive |
Directors |
Executives |
Total |
Executive |
Directors |
Executives |
Total |
|
|
| Managerial
remuneration |
2,250,004 |
1,429,996 |
23,270,672 |
26,950,672 |
2,190,004 |
55,000 |
21,182,516 |
23,427,520 |
|
| Housing
and utilities |
999,996 |
686,069 |
12,175,964 |
13,862,029 |
999,996 |
-- |
10,915,240 |
11,915,236 |
|
| Gratuity |
|
109,589 |
92,053 |
1,415,822 |
1,617,464 |
109,589 |
24,110 |
1,183,539 |
1,317,238 |
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
| Rupees |
|
3,359,589 |
2,208,118 |
36,862,458 |
42,430,165 |
3,299,589 |
79,110 |
33,281,295 |
36,659,994 |
|
|
|
========== |
========== |
========== |
========== |
========== |
========== |
========== |
========== |
|
| Number |
|
1 |
2 |
91 |
|
1 |
1 |
80 |
|
|
========== |
========== |
========== |
========== |
========== |
========== |
========== |
========== |
|
|
| The
Chief Executive, a working Director and certain Executives are also provided
with free use |
|
| of
Company owned and maintained cars. |
|
|
| 22.
TRANSACTIONS WITH ASSOCIATED COMPANIES |
|
|
| Dividend
Income |
|
Rupees |
11,836,059 |
4,729,081 |
|
| Subscription
to right issue |
|
|
|
|
| of
an associated company |
|
Rupees |
88,538,170 |
-- |
|
| Advisory,
placement and |
|
|
|
|
| loan
arrangement fee |
|
Rupees |
1,000,000 |
700,000 |
|
|
|
| 23. TAXATION |
|
| Assessments
have been finalised upto assessment year 1998-99 by the Deputy Commissioner |
|
| of
Income Tax (DCIT). However, certain disallowances including initial
depreciation claimed |
|
| on
certain leased assets have been made by the DCIT against which the Company
has |
|
