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| Annual
Report 1996 |
|
| ASIAN
LEASING CORPORATION LTD. |
|
|
| COMPANY
INFORMATION |
|
|
|
| Board
of Directors : |
|
| Mr.
Mohammad Aslam Khan |
|
Chairman |
|
| Mr.
Mohammad Zafamllah Khan |
|
Director |
|
| Dr.
Iftekhar A. Khan |
|
Director |
|
| Mr.
Khalid Iqbal |
|
Director |
|
| Syed
Ghulam Abbas |
|
Director |
|
| Mrs.
Roohi Raees Khan |
|
Director |
|
| Mr.
Muhammad Bashir Chaudhry |
|
Director |
|
| Syed
Manzar Alam |
|
Director |
|
| Mr.
Khalid Niaz Khawaja |
|
Director/Chief Executive
Officer |
|
|
| Company
Secretary : |
|
| Mr.
Ahsan Iqbal (ACA) |
|
|
| Bankers
to the Company: |
|
| Allied
Bank of Pakistan Limited |
|
| Al
Baraka Islamic Investment Bank Limited |
|
| Al
Faysal Investment Bank Limited |
|
| Al-Towfeek
Investment Bank Limited |
|
| Bank
of Punjab |
|
| Crescent
Investment Bank Limited |
|
| Faysal
Bank Limited |
|
| Fidelity
Investment Bank Limited |
|
| Habib
Bank Limited |
|
| Indus
Bank Limited |
|
| Muslim
Commercial Bank Limited |
|
| National
Development Finance Corporation |
|
| Prime
Commercial Bank Limited |
|
| Prudential
Commercial Bank Limited |
|
| United
Bank Limited |
|
|
| Auditors : |
|
| Ford,
Rhodes, Robson, Morrow |
|
| Chartered
Accountants |
|
|
| Legal
Advisor: |
|
| Mr.
Masood Javaid |
|
| Advocate,
Supreme Court of Pakistan |
|
|
| Registrars
and Share Transfer Office: |
|
| Noble
Computer Services (Private) Ltd. |
|
| 1st
Floor, Al-Mansoor Building, |
|
| Dr.
Ziauddin Ahmed Road, Karachi. |
|
|
| Registered
Office 8: Head Office : |
|
| 85-B,
Gulberg (Jail) Road, |
|
| LAHORE-
54000 |
|
| Tel
7584417, 7584381 |
|
| 7584247,
7573766, 7578836 |
|
| Tlx
44013 ALC PK. |
|
| Fax
(042) 7584418 |
|
|
| Branch
Office : |
|
| 204-Clifton
Centre |
|
| Khayaban-e-Roomi,
Clifton, Karachi. |
|
| Tel
: 5835936, 5866095 |
|
| Fax:
5873573 |
|
|
| NOTICE
OF ANNUAL GENERAL MEETING |
|
| Notice
is hereby given that the TENTH ANNUAL GENERAL MEETING OF ASIAN LEASING |
|
| CORPORATION
LIMITED will be held on Thursday 26th December, 1996 at the registered office |
|
| of
the Company, i.e. 85-B, Gulberg (Jail) Road, Lahore at 9.00 a.m. to transact
the following business: |
|
| 1.
To confirm the minutes of Extra Ordinary General Meeting of the Company held
on 30th |
|
| June,
1996. |
|
|
| 2.
To receive, consider and adopt the audited accounts for the period of
eighteen months |
|
| ended
June 30, 1996 together with the Directors' and Auditors' reports thereon. |
|
|
| 3.
To declare cash dividend @ Rs. 1.00 per share (10%) as recommended by the
Board |
|
| of
Directors. |
|
|
| 4.
To appoint Auditors and fix their remuneration. The present Auditors, |
|
| Messrs.
Ford, Rhodes, Robson, Morrow, Chartered Accountants, retire and being
eligible, |
|
| offer
themselves for re-appointment. |
|
|
| 5.
To transact any other business with the permission of the Chair. |
|
|
| BY
ORDER OF THE BOARD |
|
| AHSAN
IQBAL |
|
| CORPORATE
SECRETARY |
|
|
| NOTES: |
|
| 1.
The Register of Members of the Company will remain closed from 21st December,
1996 |
|
| to
27th December, 1996 (both days inclusive) and no transfer of shares will be
made during |
|
| the
period the register is closed. |
|
|
| 2.
A member entitled to attend and vote at the General Meeting is entitled to
appoint one |
|
| person
as his proxy to attend and vote on his behalf. |
|
|
| 3.
Instrument appointing proxy and the power of attorney or other authority
under which it |
|
| is
signed or a naturally certified copy of the power or authority must be
deposited at the |
|
| registered
office of the Company atleast 48 hours before the time of the meeting. |
|
|
| 4.
Shareholders are requested to notify any change in address immediately. |
|
|
| DIRECTORS'
REPORT TO THE MEMBERS |
|
| The
Board of Directors have pleasure in presenting their report together with
audited accounts of your |
| Company
for a period of eighteen months from January 1995 to June 1996. To comply
with the requirements |
| of
Finance Act, 1995, your Company has changed its accounting year from calendar
to fiscal: |
|
|
| FINANCIAL
RESULTS |
|
| The
financial results of the Company for the period under review are summarised
as follows: |
|
|
|
(Rupees) |
|
|
|
|
| Revenue |
|
135,973,224 |
|
| Expenditure |
|
103,803,894 |
|
| Profit
before taxation |
|
32,169,330 |
|
| Provision
for taxation |
|
19,400,000 |
|
| Profit
after taxation |
|
12,769,330 |
|
| Un-appropriated
profit brought forward |
|
84,413 |
|
| Transfer
from General Reserve |
|
154,523 |
|
| Profit
available for appropriation |
|
13,008,266 |
|
|
| Appropriations |
|
| - Transfer to Special Reserve |
|
2,553,866 |
|
| -
Proposed dividend |
|
10,454,400 |
|
| -
Un-appropriated profit carried forward |
|
- |
|
|
| DIVIDEND |
|
| Your
company believes in sharing its profits with its shareholders and in view of
this policy, the Board |
| of
Directors have recommended a cash dividend @ Re. 1.00 per share (10%) for the
period under review. |
|
| REVIEW
OF OPERATIONS |
|
| Despite
unfavorable economic scenario, continued recession in the economy and
constraints faced in |
|
| resource
mobilization during the period under review, Asian Leasing Corporation
Limited maintained its |
| total
portfolio of net investment in lease finance and disbursed Rs. 224.21 million
including Rs. 176.32 |
| million
from July, 1995 to June, 1996 as against Rs. 163.36 million in 1994 - an
overall increase of |
| 37.25%
and generated Revenue of Rs. 135.97 million including Rs. 90.47 million from
July, |
|
| 1995
to June, 1996 as against Rs. 91.50 million in 1994 - an overall increase of
48.60%. |
|
|
| Profit
after tax for the period under review registered a fall of Rs. 9.99 million
as compared to that of |
| year
1994 due to the impact of heavy taxation and the reduction in cushion
available between average |
| rate
of return on lease financing and rate of mark-up on loans. Profit before tax
for the period under |
| review
recorded a growth of 19.35% at Rs. 32.17 million including Rs. 19.56 million
from July, 1995 to |
| June,
1996 as against Rs. 26.95 million in 1994. Management kept a strict control
on the overall |
|
| expenditure
of the company. However, as a result of increase in salaries and benefits to
staff, raise in |
| mark-up
rates on the financial facilities given by the lending agencies and high
inflation in the economy, |
| financial
charges and administrative expenses increased by Rs. 35.30 million (59.35%)
during the period |
| of
eighteen months as against expenses of Rs. 59.48 million during the year
1994. |
|
|
| Your
company has followed a balanced and prudent policy to build up a quality and
diversified portfolio |
| of
lease financing. The sector-wise and asset-wise disbursement of lease
portfolio of the company are |
| as under: |
|
|
|
SECTOR-WISE PORTFOLIO |
|
|
Sector |
|
Percentage |
|
|
|
Spinning |
|
14.58% |
|
|
Weaving |
|
6.86% |
|
|
Knitting |
|
7.94% |
|
|
Textile Composite |
|
487% |
|
|
Sugar |
|
5.04% |
|
|
Cement |
|
1235% |
|
|
Engineering |
|
14.98% |
|
|
Energy, Oil & Gas |
|
3.42% |
|
|
Financial Institutions |
|
0.59% |
|
|
Chemical |
|
11.46% |
|
|
Leather |
|
2.28% |
|
|
Construction |
|
2.82% |
|
|
Service |
|
2.20% |
|
|
Others |
|
10.61% |
|
|
--------- |
|
--------- |
|
|
TOTAL |
|
100.00% |
|
|
========= |
|
========= |
|
|
|
ASSET-WISE PORTFOHO |
|
|
TYPE OF ASSETS |
|
PERCENTAGE |
|
|
|
Machinery |
|
84.40% |
|
|
Vehicle |
|
12.86% |
|
|
Equipment |
|
162% |
|
|
Computer |
|
1.12% |
|
|
--------- |
|
--------- |
|
|
TOTAL |
|
100.00% |
|
|
========= |
|
========= |
|
|
| The
company has managed to keep a balance of all important sectors of industry in
disbursement and |
|
| also
made investment in such items which are necessary for the increase of
productivity of the |
|
| industrial
sector. |
|
|
| RESOURCE
MOBIHZATION |
|
| Inspite
of increased competition in the field of resource mobilization and tight
conditions prevailing in |
| the
capital market due to micro and macro economic factors, your company has
managed to get credit |
|
| lines
of nearly Rs. 100 million from the Local Financial Institutions during the
period under review. |
|
| Most
of the funds available from financial institutions have short term maturity
and, in such circumstances, |
| fund
generation through Certificates of Investments (COIs) has become increasingly
important and the |
| ability
of a company to issue its own COIs would lower currently high cost of
borrowings thereby increasing |
| margins
which would ultimately lead to higher profitability. Your company has been
quite successful |
|
| in
mobilizing funds through the COIs in an environment where every nationalized
and private bank, |
|
| investment
'banks, development financial institutions, non-banking financial
institutions and even the |
| Government
itself is trying to attract investors by offering increased returns. COIs
which were launched |
| in
1994 continued to be a success and a strategy has been devised to intensify
efforts by concentrating |
| on
potential market for deposits. Management is confident that in future scheme
of COIs will prove to |
| be
a useful source of funds. |
|
|
| The
company is grateful to the following financial institutions who have helped
or are helping in extending |
| facilities
to the company and without their assistance the progress as above could not
be possible. |
|
|
| ·
Asian Development Bank |
|
| ·
National Development Finance Corporation |
|
| ·
Crescent Investment Bank Limited |
|
| ·
Faysal Bank Limited |
|
| ·
AI-Faysal Investment Bank Limited |
|
| ·
Allied Bank of Pakistan Limited |
|
| ·
Fidelity Investment Bank Limited |
|
| ·
Muslim Commercial Bank Limited |
|
| ·
AI-Towfeek Investment Bank Limited |
|
| ·
Saudi Pak Agricultural and Investment Co. (Pvt) Ltd. |
|
| ·
Prudential Commercial Bank Limited |
|
|
| FUTURE
PROSPECTS |
|
| State
Bank of Pakistan has made it mandatory for Non-Banking Financial Institutions
to maintain a cash |
| reserve
of 1% of its liabilities. No return is paid on this deposit. Further,
requirement for maintaining |
| liquidity
has also been enhanced from 15% to 19% from December 31, 1996. These steps
will have a |
|
| negative
impact on cost of funds of leasing companies. |
|
|
| The
Finance Act, 1996 has introduced central excise duty for services rendered in
respect of leasing. This |
| will
not only increases the cost of leasing of assets but also increases
administrative cost for the lessor |
| in
recovering excise duty from the lessee. |
|
|
| The
growth for 1996-97 is expected to be affected and we have set ourselves
realistic budgetary targets |
| keeping
in view the socio-economic conditions of the country. We expect the
conditions to improve |
|
| in
near future and look forward for the better results. |
|
|
| DIRECTORS |
|
| During
the period under review, members of the company, at the Extra-ordinary
General Meeting held |
|
| on
June 30, 1996, approved the increase in the number of directors on the Board
and consequently, |
|
| Syed
Manzar Alam, Nominee of NIT was elected as a director of your company. The
directors welcome |
|
| Mr.
Manzar Alam on the Board and .are hopeful of benefiting from his guidance and
suggestions as a |
|
| Director. |
|
|
| AUDITORS |
|
| The
auditors Ford, Rhodes, Robson, Morrow, Chartered Accountants retire and being
eligible offer themselves |
| for
re-appointment. |
|
|
| PATTERN
OF SHAREHOLDING |
|
| The
pattern of Shareholding as of June 30, 1996 is enclosed. |
|
|
| ACKNOWLEDGEMENT |
|
| The
company is thankful to the authorities of the State Bank of Pakistan,
Corporate Law Authority and |
| our
valuable clients, financial institutions and shareholders for their continued
support and co-operation. |
| An
appreciation is also placed on record for the dedication, commitment and hard
work put in by the |
|
| staff
of the Company. |
|
|
| In
the last the Board thank all concerned agencies once again who helped,
patronised and assisted in |
| our
progress; particularly, I record my appreciation in fayour of the management
of NDFC for their all- |
| out
support. |
|
|
| ON
BEHALF OF THE BOARD |
|
| (KHALID
NIAZ KHAWAJA) |
|
| CHIEF
EXECUTIVE |
|
|
| PATTERN
OF SHARE HOLDINGS AS AT JUNE 30, 1996 |
|
|
|
| Shareholding |
|
| Number
of Shareholders |
From |
To |
|
Total Shares Held |
|
|
| 291 |
|
1 |
100 |
|
14,141 |
|
| 33 |
|
101 |
500 |
|
77,881 |
|
| 138 |
|
501 |
1000 |
|
99,477 |
|
| 328 |
|
1001 |
5000 |
|
603,805 |
|
| 44 |
|
5001 |
10000 |
|
297,279 |
|
| 6 |
|
10001 |
15000 |
|
67,057 |
|
| 2 |
|
15001 |
20000 |
|
35,738 |
|
| 3 |
|
20001 |
25000 |
|
65,052 |
|
| 1 |
|
25001 |
3000 |
|
26,136 |
|
| 1 |
|
40001 |
45000 |
|
41,817 |
|
| 1 |
|
50001 |
55000 |
|
52,272 |
|
| 1 |
|
55001 |
60000 |
|
57,306 |
|
| 2 |
|
65001 |
70000 |
|
134,489 |
|
| 1 |
|
70001 |
75000 |
|
72,600 |
|
| 1 |
|
80001 |
85000 |
|
81,416 |
|
| 1 |
|
100001 |
105000 |
|
104,544 |
|
| 1 |
|
120001 |
125000 |
|
121,000 |
|
| 1 |
|
135001 |
140000 |
|
139,800 |
|
| 1 |
|
140001 |
145000 |
|
143,244 |
|
| 1 |
|
245001 |
250000 |
|
249,284 |
|
| 2 |
|
260001 |
265000 |
|
522,720 |
|
| 3 |
|
520001 |
525000 |
|
1,568,160 |
|
| 1 |
|
565001 |
570000 |
|
569,329 |
|
| 1 |
|
2610001 |
2615000 |
|
2,613,600 |
|
| 1 |
|
2695001 |
2700000 |
|
2,696,253 |
|
| --------- |
|
|
|
--------- |
|
| 1,166 |
|
TOTAL |
|
10,454,400 |
|
| ========= |
|
|
|
========= |
|
|
| There
is no Shareholding falling in the slab which have not been included above. |
|
|
| CATEGORIES
OF SHAREHOLDERS AS AT 31ST DECEMBER, 1994 |
|
|
| Categories
of Shareholders |
|
Number |
Shares Held |
Percentage |
|
|
| 1.
INDMDUALS |
|
1,145 |
3,624,287 |
34.668 |
|
| 2.
INVESTMENT COMPANIES |
|
5 |
254,185 |
2.431 |
|
| 3.
INSURANCE COMPANIES |
|
2 |
611,146 |
5,846 |
|
| 4.
JOINT STOCK COMPANIES |
|
9 |
362,422 |
3.47 |
|
| 5.
FINANCIAL INSTITUTIONS |
|
3 |
5,382,453 |
51.49 |
|
| 6.
MODARABA COMPANIES |
|
4 |
104,038 |
0.995 |
|
| 7.
FOREIGN INVESTORS |
|
- |
- |
- |
|
| 8.
CO-OPERATIVE SOCIETIES |
|
2 |
112,733 |
1.078 |
|
| 9.
CHARITABLE TRUSTS |
|
1 |
3,136 |
0.030 |
|
| 10. OTHERS |
|
- |
- |
- |
|
|
--------- |
--------- |
--------- |
|
|
|
TOTAL |
1,166 |
10,454,400 |
100.00 |
|
|
========= |
========= |
========= |
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
| We have audited the annexed balance sheet
of Asian Leasing Corporation Limited as at June 30, |
|
| 1996
and the related profit and loss account and statement of sources and
application of funds, together |
| with
the notes forming part thereof, for the eighteen months then ended and we
state that we have |
|
| obtained
all the information and explanations which to the best of our knowledge and
belief were |
|
| necessary
for the purposes of our audit and, after due verification thereof, we report
that: |
|
|
| (a)
in our opinion, proper books of accounts have been kept by the Company as
required by the |
|
| Companies
Ordinance, 1984; |
|
|
| (b)
in our opinion: |
|
|
| i)
the balance sheet and profit and loss account together with the notes thereon
have |
|
| been
drawn up in conformity with the Companies Ordinance, 1984 and are in
agreement |
|
| with
the books of account and are further in accordance with accounting policies |
|
| consistently
applied; |
|
|
| ii)
the expenditure incurred during the period was for the purpose of the
Company's |
|
| business; and |
|
|
| iii)
the business conducted, investments made and the expenditure incurred during
the |
|
| period
were in accordance with the objects of the Company; |
|
|
| (c)
in our opinion and to the best of our information and according to the
explanations given |
|
| to us, the balance sheet, profit and loss
account and the statement of sources and .application |
|
| of funds, 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, 1996 and of the profit and the changes |
|
| in sources and application of funds for the
period then ended; and |
|
|
| (d)
in our opinion zakat deductible at source under the Zakat and Usher
Ordinance, 1980, was |
|
| deducted by the company and deposited in
the Central Zakat Fund established under |
|
| section 7 of that ordinance. |
|
|
| FORD,
RHODES, ROBSON, MORROW |
|
| Chartered
Accountants |
|
|
| BALANCE
SHEET AS AT JUNE 30, 1996 |
|
|
|
|
|
June 30 |
December 31 |
|
|
Notes |
1996 |
1994 |
|
|
|
Rupees |
Rupees |
|
|
| Tangible
fixed assets |
|
4 |
4,495,434 |
4,908,929 |
|
| Investment
in lease finance |
|
|
| Lease
payments receivable |
|
501,660,101 |
521,961,765 |
|
| Residual
value |
|
77,223,219 |
62,904,075 |
|
|
------------ |
------------ |
|
| Gross
lease payments receivable |
|
578,883,320 |
584,865,840 |
|
| Less:
Unearned mark-up |
|
112,768,230 |
122,729,716 |
|
|
------------ |
------------ |
|
|
466,115,090 |
462,136,124 |
|
| Less:
Bad debts written off |
|
(4,191,735) |
- |
|
|
------------ |
------------ |
|
| Net
investment in lease finance |
|
461,923,355 |
462,136,124 |
|
|
| Less:
Current maturity |
|
(191,375,952) |
(166,869,521) |
|
|
(2,569,681) |
(4,117,791) |
|
|
------------ |
------------ |
|
|
|
267,977,722 |
291,148,812 |
|
|
------------ |
------------ |
|
| Long
term investments |
|
5 |
5,888,000 |
4,052,500 |
|
| Long
term finances |
|
6 |
5,489,243 |
19,319,469 |
|
| Deferred
costs |
|
7 |
2,183,864 |
1,841,724 |
|
|
286,034,263 |
321,271,434 |
|
| Current
assets |
|
| Current
portion of net investment |
|
| in
lease finance |
|
191,375,952 |
166,869,521 |
|
| Short
term finances |
|
8 |
16,954,204 |
22,356,426 |
|
| Advances,
deposits, prepayments |
|
| and
other receivables |
|
9 |
18,169,876 |
21,043,139 |
|
| Cash
and bank balances |
|
10 |
27,080,252 |
47,185,178 |
|
|
------------ |
------------ |
|
|
253,580,284 |
257,454,264 |
|
| Current
liabilities |
|
11 |
(165,058,900) |
(141,583,396) |
|
|
------------ |
------------ |
|
| Working
capital |
|
88,521,384 |
115,870,868 |
|
|
|
|
|
------------ |
------------ |
|
| Total
capital employed |
|
374,555,647 |
437,142,302 |
|
|
| Less:
Long term and deferred liabilities |
|
| Long
term loans - secured |
|
12 |
150,204,299 |
227,923,046 |
|
| Marginal
deposits on lease |
|
| arrangements |
|
77,710,965 |
65,993,803 |
|
| Customers'
deposits - COIs |
|
13 |
3,600,000 |
2,500,000 |
|
| Provision
for gratuity |
|
55,085 |
55,085 |
|
|
------------ |
------------ |
|
|
|
231,570,349 |
296,471,934 |
|
|
------------ |
------------ |
|
| Net
capital employed |
|
142,985,298 |
140,670,368 |
|
|
|
============= |
============= |
|
|
|
|
June 30 |
December 31 |
|
|
Notes |
1996 |
1994 |
|
|
|
Rupees |
Rupees |
|
|
| REPRESENTED
BY |
|
| Share
capital |
|
14 |
104,544,000 |
86,400,000 |
|
|
| Reserve & Surplus |
'- Special Reserve |
|
15 |
7,104,821 |
4,550,955 |
|
|
- General Reserve |
|
16 |
31,336,477 |
31,491,000 |
|
|
- Reserve for issue of |
|
|
bonus shares |
|
17 |
-- |
18,144,000 |
|
|
- Unappropriated profit |
|
-- |
84,413 |
|
|
------------ |
------------ |
|
|
38,441,298 |
54,270,368 |
|
|
| CONTINGENCIES
AND COMMITMENTS |
|
27 |
-- |
-- |
|
|
------------ |
------------ |
|
|
142,985,298 |
140,670,368 |
|
|
============ |
============ |
|
|
| The
annexed notes form and integral part of these accounts, |
|
|
| PROFIT
AND LOSS ACCOUNT |
|
| FOR THE PERIOD FROM JANUARY 01, |
1995 TO JUNE 30, 1996 |
|
Eighteen |
|
|
|
months |
Year ended |
|
|
|
ended June 30 |
December 31 |
|
|
Notes |
1996 |
1994 |
|
|
|
Rupees |
Rupees |
|
| REVENUE |
|
| Income
from lease operations |
|
18 |
113,017,336 |
75,651,760 |
|
| Mark-up
income |
|
19 |
21,886,231 |
15,321,941 |
|
| Other
income |
|
20 |
1,069,657 |
528,038 |
|
|
--------------- |
--------------- |
|
|
135,973,224 |
91,501,739 |
|
| EXPENDITURE |
|
| Direct
cost of leases |
|
21 |
175,654 |
143,890 |
|
| Financial
Charges |
|
22 |
79,709,257 |
50,674,470 |
|
| Admin |
