Lease Pak limited - Annual Reports 2003



Lease Pak Limited
Annual Reports 2003

CONTENTS

Company Information
Notice of Annual General Meeting
Directors' Report
Six Years' Financial Summary
Pattern of Shareholding
Statement of Compliance
Auditors' review report on code
Auditors' Report to the Members
Balance Sheet
Profit & Loss Account
Cash Flow Statement
Notes to the Cash Flow Statement
Statement of Changes in Equity
Notes to the Accounts

COMPANY INFORMATION

Chairman	Mian Omer Rehman

CEO/Director	Immad Iftikhar Malik

Directors	Mr. Tariq Rehman
	Agha Najeeb Raza
	Mian Assad Shuja-ur-Rehman
	Mr. Khurshid Ahmad
	Mr. Ansar Sohail Malik

Audit Committee	Mian Misbah-ur-Rehman
	Mr. Tariq Rehman
	Mian Assad Shuja-ur-Rehman

Company Secretary	Mr. Yousaf Mehmood

Auditors	Anjum Asim Shahid Rahman
	Chartered Accountants

Bankers	Prime Commercial Bank Limited
	Allied Bank of Pakistan Limited

Legal Advisor	Cornelius Lane & Mufti Advocates & Solicitors

Share Registrars	M/s. Softlink (Pvt) Limited
	183 Attaturk Block, New Garden Town, Lahore.

Registered Office & Head Office	5/7-B, 7-Canal Bank Road,
	Aziz Avenue, Gulberg-V, Lahore
	Tel: 92 42 576 463 1,576 4641
	UAN: 111 111505
	Fax: 92 42 571 3080
	Email: lplpak@dancoml.com.pk

NOTICE OF ANNUAL GENERAL MEETING

Notice is hereby given that the 12^th Annual General Meeting of Lease Pak Limited will be held at its
Registered Office at 5/7-B, 7-Canal Bank Road, Aziz Avenue, Gulberg V, Lahore on Monday, 8^th
December 2003 at 11:00 A.M to transact the following business:

ORDINARY BUSINESS

1. To confirm minutes of the 11^th Annual General Meeting held on 31 December 2002.

2. To receive and adopt the audited accounts of the Company for the year ended 30"' June, 2003
together with Directors' and Auditors' Reports thereon.

3. To transact any other business with the permission of the Chair.

SPECIAL BUSINESS

4. As special business pass with or without amendment the following special resolution.
RESOLVED that the Company be de-listed from the Karachi Stock Exchange (Guarantee)
Limited at buy-back price of Rs. 4/- per share. Mr. Immad Iftikhar Malik Chief Executive and
Mr. Yousaf Mahmood Secretary of the Company are hereby authorized to take necessary action
as deemed fit in this regard.

By Order of the Board

Lahore: Yousaf Mahmood

Date: 17^th November 2003 (Company Secretary)

NOTES:

1. The share transfer books of the Company will remain closed from December 02,2003 to December
08, 2003 (both days inclusive)

2. A member entitled to vote at the meeting may appoint another member as his/her proxy. Proxies
in order to be effective must be received at the registered office of the Company duly stamped,
signed and witnessed not later than 48 hours before the meeting.

3. Shareholders are requested to notify the Company of any change in their address.

4. Statement u/s 160(1) (b) of the Companies Ordinance, 1984 is sent to the members along with
this notice.

STATEMENT U/S 160(I)(b) OF THE COMPANIES ORDINANCE, 1984

Due to inability of the company in raising the Paid up Share Capital to the desired limit the Directors
of the company decided to surrender their leasing license to Securities and Exchange Commission of
Pakistan and also decided to de-list the company from the stock exchanges of Pakistan.
Further, it was decided by the Directors of the Company that financial position of the Company is not
good and due to closure of the leasing business, the company is not in a position to meet the rules &
regulations of the Exchanges and Corporate Governance.

Subsequently, the Company requested for its de-listing from Karachi Stock Exchange.

Karachi Stock Exchange (Guarantee) Ltd., vide its letter no. KSE/C 836-8630 dated November 5, 2003
has accepted Company's request and approved De-listing. The Karachi Stock Exchange has further
required the Sponsor to Buy-Back the shares of the Company from the Minority Share Holders at Rs.
4/- per share and seek voluntary De-Listing of the Company from the Exchange under the Listing
Regulation No. 32. This price was approved by the Karachi Stock Exchange.

The Board of Directors, therefore, considers it appropriate to seek the approval of the Share Holder in
this regard.

IN THE NAME OF ALLAH, MOST GRACIOUS, MOST MERCIFUL

REPORT OF THE DIRECTORS
FOR THE YEAR ENDED JUNE 30, 2003

The Board of Directors of your company feel pleasure in presenting the Audited Financial Statement for the perioi
ended June 30, 2003. The financial statements annexed to this report, present fairly its state of affairs, the result o
its operations, cash flows and changes in equity. Proper books of account have been maintained. Appropriate accountinj
policies have been consistently applied in preparation of financial statements and accounting estimates arc based 01
reasonable and prudent judgment. International Accounting Standards, as applicable in Pakistan, have been followei
in preparation of financial statements and any departure there from has been adequately disclosed

FINANCIAL RESULTS & REVIEW OPERATIONS

As informed earlier the Company ceased to operate as a leasing company following voluntarily surrendering of tin
leasing license to the Securities & Exchange Commission of Pakistan due to our failure to raise the capital of tin
company to Rs.200.0 million as required under Leasing Rules. As a result the management reduced its expense
substantially and made all efforts to settle the debts, with nearly all the financial institutions. No new business wa
undertaken during the year under review. Since most of the leases have matured hence the gross revenue decreaset
to Rs. 19.40 million from Rs.54.62 million as compared to last year, but also reducing the administrative expense
from Rs.20.95 million of last year to Rs.15.93 million (exclusive of write-off amount of Rs. 16.0 million of PEI
DAEWOO) during the fiscal year 2003.

The operating results for the year under review are given below:

Gross revenue	Rs. 19.40 million
Administrative charges	Rs.3 1.93 million
Financial charges	Rs.2 1.72 million
Net Loss for the year	Rs.36.24 million

As stated above, the Company could not declare any dividend / bonus for the year under review.

SECTORAL DISTRIBUTION OF LEASES

As the Company's going concern is to focus on recovery, and there was no lease disbursements during the year so
there is no sector wise disbursement. However the break up of net exposure of outstanding leases in different sectors
at 30^m June 2003 was as under.

SECTORS			NET INVESTMENT	PERCENTAGE

Sugar & Allied			2,060,000	1.96
Energy,Oil, Gas			13,106,912	12.48
Steel, Engineering & Automobile			1,034,048	0.98
Electrical & Electrical Goods			15,038,567	14.32
Transport & Communication			2,597,393	2.47
Chemical /Fertilizer/Pharmasoticals			682,879	0.65
Textile			5,202,339	4.95
Banaspati & Allied			622,620	0.59
Construction			828,148	0.79
Leather,Footwear & Tanneries			2,093,219	1.99
Food, Tobacco & Beverages			9,519,940	9.07
Health			685,869	0.65
Idividuals			51,539,614	49.08
Total			105,011,548	100

AUDITOR'S REPORT

A perusal of the Auditors report would indicate that the management has achieved considerable improvement in the
financials of the company. Further, most of the qualifications mentioned in the last Auditors report have duly been
addressed. Qualifications which do not find mention in this report have been duly addressed to the entire satisfaction
of the new Auditors including the PEL Daewoo matter involving Rs.36.609 million and the issue relating to the Ex
Chief Executive involving a sum of Rs.6.5 million which has been recovered. As far as the matter of outstanding
leases is concerned as mentioned in the report, the management has made substantial and bona fide efforts to follow
up recoveries from the lessees with a reasonable degree of success. As far as the loans are concerned complete
disclosures are made in the accounts and would be completely settled in the near future. We are hopeful that the
situation will improve during the current year.

DE-LISTING OF THE COMPANY FROM THE STOCK EXCHANGES

Giving due consideration to the continuing losses of the company. It was not wise to keep on depleting the equities
of the small shareholders. Therefore, keeping this view in mind your management decided to de-list the company
by giving a premium of Rs.2/- per share to the small shareholders. After long consideration and talks with the KSE
your company managed to have a clearance from the KSE to de-list the company at Rs. 47- per share giving the

maximum benefit to the small shareholders. After having approved by the Board of Directors on the 15 November
2003 this offer is formally being placed before the shareholders of the company at the AGM, which is to be held
on the 8^th December 2003.

CORPORATE AND FINANCIAL REPORTING

Securities and Exchange Commission of Pakistan ("the SECP") in assistance with Institute of Chartered Accountants
of Pakistan formulated a Code of Corporate Governance ("the Code"). The Directors have confirmed the following
as required by clause (xix) of the Code of Corporate Governance, issued by Securities and Exchange Commission
of Pakistan;

a. The financial statements, prepared by the management present fairly the Company's state of affairs, the
result of its operations, cash flows and changes in equity.

b. Proper books of accounts have been maintained.

c. Appropriate accounting policies have been consistently applied in preparation of financial statements.

d. International Accounting Standards, as applied in Pakistan, have been followed in preparation of financial
statements.

e. The system of internal control of the company is in place and is sound in design and effectively monitored.

f. The Company is not a going concern due to heavy losses and its inability to raise capital to Rs. 200 million.
It has applied for delisting from all Stock exchanges and has got clearance subsequent to balance sheet date
from KSE to buy back shares of minority shareholders.

g. The Company has followed the best practice of Corporate Governance, as detailed in the listing regulations,
h. During the year nine meetings were held. Attendance by each director was as under:-

S. No Names of Director		Meetings Attended

1 . Mian Misbah-ur-Rehman (Ex Director)		8
2. Mr. Tariq Rehman		6
3. Agha Najeeb Raza		9
4. Mr. Abdul Rehman (Ex Director)		2
5. Immad Iftikhar Malik		9
6. Assad Shuja-ur- Rehman		6
7. Mian Omar Reham		1
8. Mr. Ansar Sohail Malik		0
9. Mr. Naveed Masud (Ex Director)		0
10. Kurshid Ahemd		0

Mr. Misbah-ur-Ranman resigned on June 06, 2003 and Mr. Ansar Sohail Malik replaced him, however he
did not attend any meeting as no meeting was held after his appointment.

Mr. Naveed Masud / Khurshid Ahmed representing ABL could not attend the Board Meeting due to his
other commitments.

i. There are no statutory payments on account of taxes, duties, levies and charges, which are outstanding,

except as disclosed in the accounts.

j. Key operating and financial data of last six years are annexed (Annexure A and B).

k. No dividend or bonus shares have been declared as the company is in the process of delisting.

1. Its Directors CEO, CFO, Company Secretary and their spouses and minor children have carried out no trade

in shares of Lease Pak Limited during the year,
m. The company due to its inability to raise its capital and heavy losses has surrendered its lease license and

has applied for delisting from all Stock exchanges. Currently the company is involved only in recovery of

existing leases and to settle the outstanding liabilities with banks and financial institutions.

PATTERN OF SHAREHOLDING

The pattern of shareholding as required by Companies Ordinance, 1984 as well as by the Code of Corporate Governance
as at June 30, 2003 are annexed (Annexure C and D).

AUDITORS

The auditors M/s Anjum Asim Shahid Rehman Chartered Accountants retire and offer themselves for re-appointment.

ACKNOWLEDGEMENT

We would like to acknowledge our deep appreciation to the various financial institutions and regulatory authorities