| National Asset Leasing Corporation Limited |
|
|
|
|
|
| Annual
Report 1998 |
|
|
|
| CONTENTS |
|
|
| Company
Information |
|
| Notice
of Meeting |
|
| Directors'
Report |
|
| Auditors'
Report to the Members |
|
| Balance
Sheet |
|
| Profit
and Loss Account |
|
| Statement
of Changes in Financial Position |
|
| Notes
to the Accounts |
|
|
| Pattern
of Share Holding |
|
|
|
| COMPANY
INFORMATION |
|
|
| Chairman |
|
| Dr.
Khalid Iqbal |
|
|
| Chief
Executive/Managing Director |
|
| Shamim
I. Junejo |
|
|
| Directors |
|
| Mohammad
Ashiq Rehmani |
|
| Azhar
Tariq Khan |
|
| Syed
Naveed H. Zaidi |
|
| Rana
M. Abu Obaida |
|
| Sohail Ali |
|
|
| Company
Secretary |
|
| Zafar
A. Badami |
|
|
| Bankers
of the Company |
|
| Crescent
Investment Bank Limited |
|
| Habib
Bank Limited |
|
| Muslim
Commercial Bank Limited |
|
| National
Development Finance Corporation |
|
| National
Bank of Pakistan |
|
| Bank
of Punjab |
|
|
| Auditors |
|
| Ford,
Rhodes, Robson, Morrow |
|
| Chartered
Accountants, |
|
| Finlay
House, I. I. Chundrigar Road, Karachi. |
|
|
| Share
Registrars |
|
| Noble
Computer Services (Private) Limited |
|
| 2nd
Floor, AI-Manzoor Building, |
|
| Dr.
Ziauddin Ahmed Road, Karachi. |
|
|
| Registered
Office |
|
| l-B,
First Floor, All Plaza, |
|
| Khayaban-e-Quaid-e-Azam, |
|
| Blue
Area, Islamabad |
|
| Phones:
270626 & 822513 |
|
| Fax:
(92-51) 272506 |
|
|
| Head Office |
|
| 9th
Floor, Lakson Square, Building No. 1, |
|
| 265
R. A. Lines, Karachi. |
|
| Phones:
5687412, 5687419, 5689580 & 5682027 |
|
| Fax:
(92-21) 5684259 |
|
| Telex:
20538 ASSET PK. |
|
| E-mail:
natlease@khi.fascom.com |
|
|
|
|
| NOTICE
OF MEETING |
|
|
| Notice
is hereby given that the Eighth Annual General Meeting of National Asset
Leasing |
|
| Corporation
Limited will be held at l-B, First Floor, Ali Plaza, Khayaban-e-Quaid-e-Azam,
Blue |
|
| Area,
Islamabad on Tuesday, December 29, 1998 at 11.00 a.m. to transact the
following business: |
|
|
| ORDINARY
BUSINESS |
|
| 1.
To confirm the Minutes of the Seventh Annual General Meeting held on December
29, 1997. |
|
|
| 2.
To receive, consider and adopt the Audited Accounts of the Company together
with |
|
| Directors'
Report thereon for the year ended June 30, 1998. |
|
|
| 3.
To appoint Auditors and to fix their remuneration for the year 1998-99. M/s.
Ford, Rhodes, |
|
| Robson,
Morrow, Chartered Accountants, the present Auditors, retire and being
eligible, |
|
| offer
themselves for reappointment. |
|
|
| 4.
To transact any other business with the permission of the Chair. |
|
|
|
By order of the Board |
|
|
|
|
|
Zafar A. Badami |
|
| Islamabad:
December 05, 1998 |
|
Company .Secretary |
|
|
| NOTES: |
|
| 1.
The Share Transfer Book of the Company will remain closed from December 23 to
December |
|
| 29,
1.998 (both days inclusive). |
|
|
| 2.
A member entitled to attend and vote at the meeting may appoint another
member |
|
| as
his/her proxy to attend and vote on his/her behalf. Proxies in order to be
effective |
|
| must
be received at the Company's Registered Office at Islamabad at-least 48 hours |
|
| before
the time of holding the meeting. |
|
|
| 3.
The members are requested to please notify to the Company any change in their
addresses. |
|
|
|
| DIRECTORS'
REPORT |
|
|
| The
Board of Directors of National Asset Leasing Corporation Limited is pleased
to present the |
|
| Annual
Report of the Company for the year ended June 30, 1998. |
|
|
| Financial
Results: |
|
|
|
1998 |
1997 |
|
|
|
Rupees |
Rupees |
|
|
|
|
| Gross
Revenue |
|
|
43,578,270 |
42,200,174 |
|
| Expenditure |
|
|
37,064,553 |
39,792,525 |
|
|
|
---------- |
---------- |
|
| Net
profit before provisions |
|
|
6,513,817 |
2,407,649 |
|
| Provisions |
|
|
(500,000) |
(3, 961,412) |
|
|
|
---------- |
---------- |
|
| Net
(Loss)/Profit |
|
|
6,013,817 |
(1,553,763) |
|
|
|
========== |
========== |
|
|
| The
financial results for the year ended June 30, 1998 show an improvement over
previous |
|
| year's
performance, yet it does not reflect the true picture due to the economic
turmoil faced |
|
| by
the country in general and the industry in particular. The leasing business
is directly related |
|
| to
the performance of the business and industry which has gone through adverse
conditions. |
|
| The
economic experts have been regularly writing and giving fair opinion about
the economic |
|
| situation
and does not need any further explanation and elaboration to defend the
results |
|
| of
your leasing company. |
|
|
| Nevertheless,
the management of the company adopted prudent policies which enable the |
|
| company
not only to achieve a net profit of Rs. 6,013,817/-, an increase of Rs.
7,567,580/- |
|
| over
previous year, but also controlling the level of provisions. |
|
|
| Business
Prospects |
|
| The
business prospects of the company depends on availability of long term funds
on competitive |
|
| rates.
Negotiations are under way for procuring credit from foreign and local
lending agencies. |
|
| The
company is also preparing to launch an aggressive marketing of Certificate of
Investment |
|
| at
reasonable profit rates. The management of the company is confident that it
has the |
|
| professional
capability to manage profitable business operations by broadening the funding |
|
| base
through various means and enchancing professional techniques to meet the
challenges |
|
| to
achieve the desired results. |
|
|
| Auditors |
|
| The
auditors, M/s. Ford, Rhodes, Robson, Morrow, Chartered Accountants, retire
and 'offer |
|
| themselves
for re-appointment. |
|
|
|
|
| Pattern
of Shareholding |
|
|
| The
pattern of shareholding as on June 30, 1998 is annexed. |
|
|
| Acknowledgement |
|
| The
board likes to place on record the commitment, dedication and hard work of
all staff |
|
| members
and sincere thanks to our clients, financial institutions and shareholders.
We would |
|
| also
like to thank Corporate Law Authority and State Bank of Pakistan for their
support and |
|
| guidance.
We trust and pray for Allah's blessings, mercy and guidance for achieving
desired |
|
| results
in years to come (Ameen) |
|
|
|
|
|
Dr. Khalid Iqbal |
|
|
| Islamabad:
December 2, 1998 |
|
Chairman |
|
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed balance sheet of NATIONAL ASSET LEASING CORPORATION |
|
| LIMITED
as at June 30, 1998 and the related profit and loss account and statement of
changes |
|
| in
financial position (cash flow statement), together with the notes forming
part thereof, for |
|
| the
year then ended and we state that we have obtained oil the information and
explanations |
|
| which
to the best of our knowledge and belief were necessary for the purposes of
our audit |
|
| and,
after due verification thereof, we report that: |
|
|
| (a)
in our opinion, proper books of account have been kept by the company as
required |
|
| by
the Companies Ordinance, 1984; |
|
|
| (b)
in our opinion: |
|
|
| (i)
the balance sheet and profit and loss account together with the notes thereon
have |
|
| been
drawn up in conformity with the Companies Ordinance, 1984, and are in |
|
| agreement
with the books of account and are further in accordance with accounting |
|
| policies
consistently applied; |
|
|
| (ii)
the expenditure incurred during the year was for the purpose of the company's |
|
| business;
and |
|
|
| (iii)
the business conducted, investments made and the expenditure incurred during |
|
| the
year were in accordance with the objects of the company; |
|
|
| (c)
in our opinion and to the best of our information and according to the
explanations given |
|
| to
us, the balance sheet, profit and loss account and the statement of changes
in financial |
|
| position
(cash flow statement), together with the notes forming part thereof, give the |
|
| information
required by the Companies Ordinance, 1984, in the manner so required and |
|
| respectively
give a true and fair view of the state of the company's affairs as at June |
|
| 30,
1998 and of the profit and the changes in financial position (cash flows) for
the year |
|
| then
ended; and |
|
|
| (d)
in our opinion, no Zakat was deductible at source, under Zakat and Ushr
Ordinance, 1980. |
|
|
|
|
|
Sd/- |
|
|
|
|
FORD, RHODES, ROBSON, MORROW |
|
| Karachi:
December 2, 1998 |
|
Chartered Accountants |
|
|
|
|
| BALANCE
SHEET AS AT JUNE 30, 1998 |
|
|
|
|
1998 |
1997 |
|
|
Note |
Rupees |
Rupees |
|
|
|
|
| SHARE
CAPITAL AND RESERVES |
|
|
|
|
|
| Authorised |
|
|
|
| 10,000,000
ordinary shares of |
|
|
| Rs. 10 each |
|
|
|
100,000,000 |
100,000,000 |
|
|
|
========== |
========== |
|
| Issued,
subscribed and paid-up |
|
|
| 9,536,800
(1997: 9,536,800) ordinary |
|
|
| shares
of Rs. 10 each fully paid in cash |
|
95,368,000 |
95,368,000 |
|
|
|
|
| Reserves |
|
|
|
| Reserve
fund (capital reserve) |
|
3 |
9,828,840 |
8,848,215 |
|
| Unappropriated
profit |
|
|
10,104,876 |
6,182,377 |
|
|
|
|
---------- |
---------- |
|
|
|
|
19,933,716 |
15,030,592 |
|
|
|
|
---------- |
---------- |
|
|
|
|
115,301,716 |
110,398,592 |
|
|
|
|
|
|
| REDEEMABLE
CAPITAL-SECURED |
|
4 |
41,464,385 |
34,374,511 |
|
| LONG
TERM FINANCE-SECURED |
|
5 |
20,000,000 |
26,716,001 |
|
| OBLIGATION
UNDER FINANCE LEASES |
|
6 |
585,498 |
942,073 |
|
| LEASE
KEY MONEY |
|
7 |
15,989,396 |
19,160,216 |
|
| CERTIFICATES
OF INVESTMENT |
|
8 |
2,100,000 |
7,800,000 |
|
|
|
|
|
|
| CURRENT
LIABILITIES |
|
|
|
|
| Current
portion of redeemable capital |
4 |
9,968,949 |
9,213,069 |
|
| Current
portion of long term finance |
5 |
23,996,868 |
24,612,017 |
|
| Current
portion of obligation under |
|
|
|
| finance
leases |
|
6 |
920,772 |
571,925 |
|
| Current
portion of lease key money |
|
|
3,907,045 |
5,553,936 |
|
| Certificates
of investment |
|
8 |
9,000,000 |
8,500,000 |
|
| Short
term musharika fund and finance |
9 |
17,207,628 |
24,656,371 |
|
| Book
overdraft with banks/DFI |
|
|
1,517,435 |
8,321,502 |
|
| Accrued
and other liabilities |
|
10 |
31,521,021 |
25,216,663 |
|
|
|
|
---------- |
---------- |
|
|
|
|
98,039,718 |
106,645,483 |
|
| COMMITMENTS
AND CONTINGENCIES |
|
11 |
---------- |
---------- |
|
|
|
|
293,480,713 |
306,036,876 |
|
|
|
|
========== |
========== |
|
|
|
|
| TANGIBLE
FIXED ASSETS |
|
12 |
6,245,715 |
6,449,932 |
|
| NET
INVESTMENT IN LEASE FINANCE |
|
13 |
150,587,507 |
136,956,655 |
|
| LONG
TERM INVESTMENTS |
|
14 |
43,08.1,048 |
43,581,048 |
|
| LONG
TERM DEPOSITS, PREPAYMENTS |
|
|
|
| AND
DEFERRED COSTS |
|
15 |
477,750 |
1,099,100 |
|
|
|
|
|
| CURRENT
ASSETS |
|
|
|
|
| Current
portion of net investment |
|
|
|
| in
lease finance |
|
13 |
74,883,050 |
107,628,486 |
|
|
|
|
|
| Advances,
deposits, prepayments |
|
|
|
| and
other receivables |
|
16 |
3,750,980 |
4,602,267 |
|
|
|
|
| Cash
and bank balances |
|
17 |
14,454,663 |
5,719,388 |
|
|
|
|
---------- |
---------- |
|
|
|
|
93,088,693 |
117,950,141 |
|
|
|
|
---------- |
---------- |
|
|
|
|
|
293,480,713 |
306,036,876 |
|
|
|
|
|
========== |
========== |
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
| DR.
KHALID IQBAL |
|
SHAMIM I. JUNEJO |
|
M.A. REHMANI |
|
| Chairman |
|
Chief Executive |
|
Director |
|
|
|
|
| PROFIT
AND LOSS ACCOUNT |
|
| FOR
THE YEAR ENDED JUNE 30, 1998 |
|
|
|
|
|
|
|
|
1998 |
1997 |
|
| REVENUE |
|
Note |
Rupees |
Rupees |
|
|
|
|
| Income
from leasing operations |
|
18 |
41,117,507 |
40,627,995 |
|
| Income
from Government securities |
|
|
(359,709) |
892,154 |
|
| Dividend
income |
|
|
293,971 |
285,742 |
|
| Income
from bank deposits |
|
|
2,519,185 |
364,283 |
|
| Profit
on disposal of fixed assets |
|
|
416 |
- |
|
| Other
income |
|
|
7,000 |
30,000 |
|
|
|
|
---------- |
---------- |
|
|
|
|
43,578,370 |
42,200,174 |
|
|
|
|
|
| EXPENDITURE |
|
|
|
|
| Return
and .financial charges |
|
19 |
25,106,462 |
28,233,403 |
|
| Administrative
and operating expenses |
20 |
11,958,091 |
11,505,429 |
|
| Amortisation
of deferred costs |
|
|
- |
53,693 |
|
|
|
|
---------- |
---------- |
|
|
|
|
37,064,553 |
39,792,525 |
|
|
|
|
---------- |
---------- |
|
| PROFIT
BEFORE PROVISIONS |
|
|
6,513,817 |
2,407,649 |
|
| PROVISIONS |
|
|
|
| Provision
for doubtful debts |
|
|
- |
3,461,412 |
|
| Provision
for diminution in value of investment |
|
500,000 |
- |
|
|
|
|
---------- |
---------- |
|
|
|
|
500,000 |
3, 461,412 |
|
|
|
|
---------- |
---------- |
|
| PROFIT/(LOSS)
BEFORE TAXATION |
|
|
6,013,817 |
(1,053,763) |
|
| TAXATION |
|
21 |
|
|
| -
current year |
|
|
500,000 |
500,000 |
|
| -
prior years |
|
610,693 |
- |
|
|
|
---------- |
---------- |
|
|
|
1,110,693 |
500,000 |
|
|
|
---------- |
---------- |
|
| PROFIT/(LOSS)
AFTER TAXATION |
|
4,903,124 |
(1,553,763) |
|
| UNAPPROPRIATED
PROFIT BROUGHT FORWARD |
|
6,182,377 |
7,736,140 |
|
|
|
|
---------- |
---------- |
|
| APPROPRIATION |
|
11,085,501 |
6, 182,377 |
|
| Transfer
to reserve fund |
|
980,625 |
- |
|
|
|
---------- |
---------- |
|
| UNAPPROPRIATED
PROFIT CARRIED FORWARD |
|
10,104,876 |
6,182,377 |
|
|
|
|
========== |
========== |
|
|
| The
annexed notes form an integral part of these accounts |
|
|
| DR.
KHALID IQBAL |
SHAMIM I. JUNEJO |
|
M.A. REHMANI |
|
| Chairman |
|
Chief Executive |
|
Director |
|
|
|
| STATEMENT
OF CHANGES IN FINANCIAL POSITION |
|
| (CASH
FLOW STATEMENT) |
|
|
|
| FOR
THE YEAR ENDED JUNE 30, 1998 |
|
|
|
|
|
|
|
|
|
1998 |
1997 |
|
|
|
|
|
Rupees |
Rupees |
|
|
|
|
| CASH
FLOWS FROM OPERATING ACTIVITIES |
|
|
| Net
profit/(loss) for the year before tax |
|
6,013,817 |
(1,053,763) |
|
| Adjustment
for: |
|
|
|
|
| Depreciation
on fixed assets |
|
|
1,467,485 |
1,337,949 |
|
| Amortisation
of deferred costs |
|
|
- |
53,693 |
|
| Income
from long term investments |
|
359,709 |
(892,154) |
|
| Gain
on sale of fixed assets |
|
(416) |
- |
|
| Provision
for doubtful debts |
|
|
- |
3,461,412 |
|
| Provision
for diminution in value of investment |
|
500,000 |
- |
|
| Return
and financial charges on borrowings |
|
21,514,827 |
21,996,236 |
|
|
|
---------- |
---------- |
|
|
|
|
|
23,841,605 |
25,957,136 |
|
|
|
|
|
---------- |
---------- |
|
|
|
|
|
29,855,422 |
24,903,373 |
|
| Decrease
in advances, prepayments and other |
|
|
| receivables |
|
935, 282 |
14,239,739 |
|
| Increase
in accrued other liabilities |
|
6,304,358 |
9,828,936 |
|
| Payment
of income tax |
|
(509,877) |
(451,360) |
|
| Increase
in long term deposits |
|
(63,450) |
(2,197) |
|
| Decrease
in lease key money |
|
(4,817,711) |
(367,665) |
|
|
|
---------- |
---------- |
|
|
|
1,848,602 |
23,247,453 |
|
|
|
---------- |
---------- |
|
| Net
cash generated in operating activities |
|
31,704,024 |
48,150,826 |
|
|
|
|
|
| CASH
FLOWS FROM INVESTING ACTIVITIES |
|
|
| Purchase
of fixed assets |
|
(1,491,611) |
(1,601,248) |
|
| Sale
of fixed assets |
|
228,750 |
130,849 |
|
| Investment
in lease finance (net of recoveries) |
|
19,114,581 |
(4,269,295) |
|
| (Increase)/decrease
in income from |
|
|
|
| Government
securities |
|
(359,709) |
892,154 |
|
|
|
---------- |
---------- |
|
| Net
cash generated/(used) in investing activities |
17,492,011 |
(4,847,540) |
|
|
|
|
|
---------- |
---------- |
|
| Total
carried forward |
|
|
49,196,035 |
43,303,286 |
|
|
|
|
|
|
|
|
| Total
brought forward |
|
49,196,035 |
43,303,286 |
|
|
|
|
|
| CASH
FLOWS FROM FINANCING ACTIVITIES |
|
|
| Increase
in redeemable capital |
|
7,845,754 |
9,623,573 |
|
| (Decrease)/increase
in long term finance |
|
(7,331,150) |
13,333,333 |
|
| (Decrease)/increase
in obligation |
|
|
|
| under
finance leases |
|
(7,728) |
478,628 |
|
| (Decrease)/increase
in short term finance |
|
(7,448,742) |
5,149,809 |
|
| Decrease
in Certificates of Investment |
|
(5,200,000) |
(25,000,000) |
|
| Return
and financial charges on borrowings |
|
(21,514,827) |
(21,996,236) |
|
|
|
---------- |
---------- |
|
| Net
cash (used) in financing activities |
|
(33,656,693) |
(18,410,893) |
|
|
|
---------- |
---------- |
|
| Net
increase in cash and cash |
|
|
|
| equivalents |
|
|
15,539,342 |
24,892,393 |
|
|
|
|
|
| Cash
and cash |
|
|
|
| equivalents
at July 1, 1997/1996 |
|
(2,602,114) |
(.27,494,507) |
|
|
|
|
|
| Cash
and cash equivalents |
|
---------- |
---------- |
|
| at
June 30, 1998/1997 |
|
12,937,228 |
(2,602,114) |
|
|
|
========== |
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| DR.
KHALID IQBAL |
|
SHAMIM I. JUNEJO |
|
M.A. REHMANI |
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| Chairman |
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Chief Executive |
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Director |
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| NOTES
TO THE ACCOUNTS FOR THE YEAR ENDED |
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| JUNE
30, 1998 |
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| 1.
LEGAL STATUS AND NATURE OF BUSINESS |
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| The
Company is incorporated in Pakistan as a public limited company and is listed
on |
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| the
Karachi, Lahore and Islamabad Stock Exchanges. It essentially carries on the
business |
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| of leasing. |
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| 2.
SIGNIFICANT ACCOUNTING POLICIES |
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| 2.1
Accounting convention |
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| The
financial statements have been prepared under the historical cost convention. |
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| 2.2
Tangible fixed assets and depreciation thereon |
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| These
are stated at cost less accumulated depreciation. Depreciation is charged |
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| to
income applying the straight line method whereby the cost of the asset less |
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| estimated
residual value is written off over its estimated useful life. Depreciation on |
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| fixed
assets is charged proportionately from the month of acquisition (full month's |
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| depreciation
being charged in the month of acquisition) upto the month prior to |
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| deletion. |
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| Assets
obtained under finance leases are included as tangible fixed assets and |
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| depreciation
thereon is charged over the useful life of the assets or the lease term |
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| whichever
is shorter. However, if there is reasonable certainty that the ownership |
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| of
the assets would transfer to the company at the end of the lease term, the
asset |
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| is
depreciated at the same rates as the Company's own assets. |
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| Profit
or loss on disposal of fixed assets is included in income currently. |
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| 2.3
Employees' retirement benefits |
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| The
Company operates a contributory provident fund for all its permanent
employees |
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| and
contributions are made by the Company and the employees in accordance |
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| with
the fund rules. |
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| 2.4
Investments |
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| Long
term investments: These are stated at moving average cost
of the respective |
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| entities
shares/certificates Provision is made for any diminution in value, if
considered |
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| permanent. |
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| Short
term investments: These are stated at moving average cost
of the respective |
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| entities'
shares/certificates less provision for diminution in market value. The
adjust- |
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| ment
in respect of diminution in market value is determined on a portfolio basis
and |
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| is
charged or credited to income currently. |
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| Profit
or loss on sale of investments is accounted for currently. |
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| 2.5
Government securities repurchase/resale transactions |
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| The
Company enters into transactions of repurchase or resale in registered
Govern- |
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| ment
securities at contracted rates for specified periods of time. These are
recorded |
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| as follows: |
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|
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| (a)
in the case of sale under repurchase obligations the securities are deleted
from |
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| he
books at cost (whilst the coupon income continues to be accrued) and |
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| the
charges arising from the differential in sale and repurchase values are |
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| accrued
on a pro-rata basis and recorded under income from Government |
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| securities.
Upon repurchase the securities ar |
