| Dawood Leasing Company Limited |
|
|
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|
| Annual
Report 2000 |
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|
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| CONTENTS |
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| Corporate Information |
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|
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| Notice of Meeting |
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| Financial
Highlights |
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| Directors'
Report |
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| Auditors' Report |
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| Balance
Sheet |
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| Profit & Loss Account |
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| Cash Flow Statement |
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| Statement of Changes in Equity |
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| Notes
to the Financial Statements |
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|
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| Statement
& Report Under Section 237 |
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| of
the Companies Ordinance, 1984 |
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|
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| Pattern of Share Holding |
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|
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| Consolidated
Accounts of Dawood Leasing Company Ltd. and its Subsidiaries |
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| Auditors'
Report |
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|
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| Balance Sheet |
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|
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| Profit & Loss Account |
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|
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| Cash Flow Statement |
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|
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| Statement
of Changes in Equity |
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|
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| Notes to the Financial
Statements |
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| CORPORATE
INFORMATION |
|
|
| Board
of Directors |
Mr. Rafique Dawood |
Chairman & Chief
Executive |
|
|
Mr. Rasheed Y. Chinoy |
|
|
Mr. Ayaz Dawood |
|
|
Mr. Asadullah Khawaja |
|
|
Mr. Muhammad Latif |
(Nominee of SLIC) |
|
|
Mr. Abdul Latif Uqaili |
(Nominee of ICP) |
|
|
Mr. Ahmed Kamran |
(Nominee of AI-Faysal
Inv. Bank) |
|
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| Company
Secretary |
Syed Jamal Macdi |
|
|
|
| Auditors |
|
M. Yousuf Adil Saleem
& Co. |
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|
|
Chartered Accountants. |
|
|
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| Legal Advisors |
|
Mohsin Tayebaly & Co. |
|
|
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| Bankers |
|
American Express Bank
Ltd. |
|
|
Bank Al-Habib Ltd. |
|
|
Bank of Khyber |
|
|
Bank of Punjab |
|
|
Faysal Bank Ltd. |
|
|
Gulf Commercial Bank Ltd. |
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|
Habib Bank Ltd. |
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|
Metropolitan Bank Ltd. |
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|
Muslim Commercial Bank
Ltd. |
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|
Oman International Bank
S.A.O.G. |
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|
Prime Commercial Bank
Ltd. |
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|
Societe Generale, The
French & International Bank |
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|
Soneri Bank Ltd. |
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|
United Bank Ltd. |
|
|
Union Bank Ltd. |
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| Registered
Office, |
5-B, Lakson Square
Building # 1, |
|
| Head Office and |
|
Sarwar Shaheed Road,
Karachi-74200 |
|
| Share
Registrars |
Tel. |
: (021) 568 7778 |
|
|
Fax |
: (021) 568 5830 |
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|
E-mail : dlc@khi.compol.com |
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| Branch Offices |
|
Office No. 20 & 21,
Beverly Centre, 1 st Floor, |
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|
56-G, Jinnah Avenue,
Islamabad-44000 |
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|
Tel. : (051) 276 367
& 274 194-5 |
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|
E-mail:
moeen@comsats.net.pk |
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|
327/2, C-1I, Township,
Lahore |
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|
Tel. : (042) 511 8141 |
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E-mail:
ennpak@netscape.net |
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|
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| NOTICE
OF SIXTH ANNUAL GENERAL MEETING |
|
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| Notice
is hereby given that the Sixth Annual General Meeting of DAWOOD LEASING
COMPANY |
|
| LIMITED
will be held at the Registered Office, 5-B, Lakson Square Building # 1.
Sarwar Shaheed |
|
| Road,
Karachi on Tuesday December 26, 2000 at 8:00 a.m. to transact the following
business: |
|
|
| 1.
To receive, consider and adopt the Audited Accounts of the Company for the
year ended June |
|
| 30,
2000 together with the Directors' and Auditors' Report thereon. |
|
|
| 2.
To approve payment of Cash Dividend @ Rs. 1.00 per share to the shareholders
for the year ended |
|
| June 30, 2000. |
|
|
| 3.
To appoint Auditors and to fix their remuneration. |
|
|
|
By the Order of the Board |
|
|
| November
24, 2000 |
|
Syed Jamal Macdi |
|
| Karachi. |
|
Company Secretary |
|
|
| Notes: |
|
|
| 1. The share transfer books of the Company
will remain closed from December 15, 2000 to December |
|
| 26,
2000 (both days inclusive). |
|
|
| 2.
A member entitled to attend and vote at a General Meeting is entitled to
appoint a Proxy to attend |
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| and
vote on his behalf. No person other than a member shall act as a Proxy. |
|
|
| 3.
Duly completed forms of Proxy must be deposited with the Company Secretary at
the Registered |
|
| Office
of the Company not later than 48 hours before the time appointed for the
meeting. |
|
|
| 4.
Account holders and sub-account holders' holding book entry securities of the
Company in Central |
|
| Depository
System of Central Depository Company of Pakistan Limited who wish to attend
the |
|
| Annual
General Meeting are requested to please bring original I.D. Card with copy
thereof duly |
|
| attested
by their Bankers for identification purpose. |
|
|
| FINANCIAL
HIGHLIGHTS |
|
|
|
2000 |
1999 |
1998 |
1997 |
1996 |
1995 |
|
|
Rupees in Million |
|
|
| Authorized
Capital |
500.00 |
500.00 |
500.00 |
300.00 |
300.00 |
300.00 |
|
| Paid-up Capital |
|
250.00 |
250.00 |
250.00 |
250.00 |
250.00 |
250.00 |
|
| Shareholders'
Equity |
306.72 |
300.62 |
305.59 |
295.52 |
281.60 |
267.92 |
|
| Total Assets |
|
1529.65 |
1520.99 |
926.58 |
680.10 |
539.45 |
340.45 |
|
| Net
Investment in Leases |
1117.79 |
1036.38 |
791.63 |
620.50 |
510.57 |
253.37 |
|
| Provision
for Lease Losses |
49.00 |
34.00 |
26.50 |
16.50 |
5.00 |
-- |
|
| Revenue |
|
214.41 |
163.21 |
141.34 |
121.96 |
89.12 |
28.00 |
|
| Income
from Leasing Operations |
171.04 |
154.05 |
133.36 |
121.29 |
84.66 |
21.19 |
|
| Profit
before Taxation |
41.65 |
35.29 |
28.06 |
46.41 |
46.21 |
18.09 |
|
| Taxation |
|
10.55 |
15.35 |
17.89 |
1.24 |
1.27 |
0.17 |
|
| Profit
after Taxation |
31.10 |
19.94 |
10.17 |
45.16 |
44.94 |
17.92 |
|
| Current Ratios |
|
1:1.04 |
1:1.32 |
1:1.26 |
1:1.53 |
1:0.91 |
1:6.74 |
|
| Book
Value Per Share |
12.27 |
12.02 |
12.22 |
11.82 |
11.26 |
10.71 |
|
| Earning
Per Share - After Tax |
1.24 |
0.80 |
0.40 |
1.81 |
1.79 |
0.71 |
|
| Return
on Equity - Pre-Tax |
13.86% |
11.50% |
9.50% |
16.48% |
17.25% |
6.75% |
|
| Dividend
Per Share (Rs.) |
1.00 |
1.00 |
-- |
1.25 |
1.25 |
-- |
|
|
| *
6 months of operations. |
|
|
|
| DIRECTORS'
REPORT |
|
|
| We
are pleased to present your company's Sixth Annual Report for the year ended
June 30, 2000 |
|
| Operating
Results |
|
|
2000 |
1999 |
|
|
|
Rupees |
Rupees |
|
|
|
|
|
| Lease Income |
|
171,044,261 |
154,046,674 |
|
|
| Other Income |
|
43,371,017 |
9,160,518 |
|
|
|
|
|
|
214,415,278 |
163,207,192 |
|
|
|
|
|
| Profit
Before Tax |
|
41,658,305 |
35,291,304 |
|
|
| Provision
for Tax |
|
10,554,455 |
15,352,971 |
|
|
|
|
|
|
31,103,850 |
19,938,333 |
|
|
| Unappropriated
Profit Brought Forward |
|
499,823 |
9,549,157 |
|
|
| Profit
Available for Appropriation |
|
31,603,673 |
29,487,490 |
|
|
|
|
|
| Appropriations |
|
|
|
| Transfer
to Statutory Reserve |
|
6,220,770 |
3,987,667 |
|
|
| Proposed
Cash Dividend |
|
25,000,000 |
25,000,000 |
|
|
| Un-appropriated
Profit Carried Forward |
|
382,903 |
499,823 |
|
|
|
|
| Review
of Operations |
|
| .During.
the year under review 1999-2000, lease disbursements of Rs. 461 million were
made resulting |
|
| m
net investment in leases of Rs. 1.1 billion, which surpassed targets.
Conservative targets had been |
|
| set
keeping in view the downturn in the economy and the low availability of good
leasing prospects. |
|
| The
asset mix of the portfolio has not changed significantly since last year. The
sector wise portfolio |
|
| was
changed to accommodate investments in growing businesses like the
communications and information |
|
| technology
sectors. |
|
|
| Following
our conservative provisioning policies a further provision for lease losses
amounting to Rs. |
|
| 15
million has been done. The total provisioning now stands at Rs. 49 million
which is about 4.22% |
|
| of
net investment in lease finance. Hence the sum of all reserves, allowances
and provisions is 60% |
|
| (49%
in 1999) of the paid-up capital of your Company. |
|
|
| Having
surplus funds, due to good treasury management, the Company was able to make
noteworthy |
|
| returns.
Deposits and investments income increased more than 3.7 times from Rs. 8.7
million to |
|
| Rs. 33 million. |
|
|
| The
Company was also able to earn a substantial return on its stock market
portfolio. We remain |
|
| conservative
in our stock market operations understanding that our stock market has yet
not developed |
|
| and
does not offer adequate hedging instruments. |
|
|
| Credit Rating |
|
| Your
Company is pleased to inform you that we have been successfully upgraded to a
credit rating of |
|
| A
minus for long term and A2 for short term from PACRA. This denotes rating of
High Credit Quality" |
|
| from
the previously held "Good Credit Quality." |
|
|
| Underwriting
and Pre-lnitial Public Offerings |
|
| Your
Company successfully participated in the Pre-IPO of every Term Finance
Certificates (TFCs) issue |
|
| during
the year. We also underwrote the equity issues of Dewan Farooque Motors
Limited, World Call |
|
| Pay
Phones Limited and the TFCs issues of Paramount Leasing Limited and Pakistan
Industrial Leasing |
|
| Corporation.
All these issues were oversubscribed. This made your company one of the
leading players |
|
| in
the nascent TFC market as well as the equity market. |
|
|
| Resource
Mobilization |
|
| Your
Company is the proud recipient of US$ 6.66 million (Rs. 355 million) 15 years
credit facility from |
|
| the
Asian Development Bank, under the Financial Sector Intermediation Loan
Facility. The total amount |
|
| has
been disbursed in leasing but unfortunately due to difficulties and financial
sector technicalities, |
|
| the
authorized Development Financial Institutions have not issued the requisite
guarantees so that all |
|
| the
funds may be brought into the country. |
|
|
| Future
Prospects |
|
| The
leasing sector has lost much of the steep growth experienced during the past
years due mainly to |
|
| improper
tax incentives and unavailability of low interest credit lines. A major
threat to the leasing |
|
| industry
is the permission granted to commercial banks to acquire a leasing license.
In essence this will |
|
| be
the death-knell for this industry. The banks, with their large financial base
and huge credit generating |
|
| facilities,
are competition that the leasing sector and its medium size companies with
low credit generating |
|
| capacities
cannot compete with. |
|
|
| Acquisitions |
|
| The
consolidation process of Guardian Modaraba Management (Pvt.) Limited and
General Modaraba |
|
| Services
(Pvt.) Limited and Pakistan Venture Capital Limited has been successfully
completed. |
|
|
| Auditors |
|
| The
present auditors, M. Yousuf Adil Saleem & Co. retire and being eligible
offer themselves for |
|
| reappointment. |
|
|
| Acknowledgments |
|
| We
would like to thank our valuable customers and stakeholders for their
confidence in the management. |
|
| We
remain grateful to the Ministry of Finance, the State Bank of Pakistan and
the SECP for their |
|
| encouragement
and continuing support, not to forget fortitude in listening to our financial
proposals. |
|
|
| We
praise our staff and executive team for their hard work and dedication to the
Company. |
|
|
|
On behalf of the Board, |
|
|
|
Rafique Dawood |
|
| November
14, 2000 |
|
Chairman & CEO |
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed balance sheet of
DAWOOD LEASING COMPANY LIMITED as at |
|
| June
30, 2000 and the related profit and loss account, cash flow statement and
statement of changes |
|
| in
equity 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. |
|
|
| It
is the responsibility of the Company's management to establish and maintain a
system of internal |
|
| control,
and prepare and present the above said statements in conformity with the
approved accounting |
|
| standards
and the requirements of the Companies Ordinance, 1984. Our responsibility is
to express an |
|
| opinion
on these statements based on our audit. |
|
|
| We
conducted our audit in accordance with the auditing standards as applicable
in Pakistan. These |
|
| standards
require that we plan and perform the audit to obtain reasonable assurance
about whether the |
|
| above
said statements are free of any material misstatement. An audit includes
examining, on a test |
|
| basis,
evidence supporting the amounts and disclosures in the above said statements.
An audit also |
|
| includes
assessing the accounting policies and significant estimates made by
management, as well as, |
|
| evaluating
the overall presentation of the above said statements. We believe that our
audit provides a |
|
| reasonable
basis for our opinion and, after due verification, 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, cash flow statement and
statement of |
|
| changes
in equity together with the notes forming part thereof conform with approved |
|
| accounting
standards as applicable in Pakistan, and, 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, 2000 and of the profit,
its cash flows |
|
| and
changes in equity for the year then ended; and |
|
|
| d)
in our opinion, zakat deductible at source under the Zakat and Ushr
Ordinance, |
|
| 1980
(XVIII of 1980), was deducted by the Company and deposited in the Central |
|
| Zakat
Fund established under Section 7 of that Ordinance. |
|
|
| Dated:
November 14, 2000 |
|
M. Yousuf Adil Saleem
& Co |
|
| Karachi. |
|
Chartered Accountants |
|
|
|
| BALANCE
SHEET AS AT JUNE 30, 2000 |
|
|
|
|
2000 |
1999 |
|
|
Note |
Rupees |
Rupees |
|
| SHARE
CAPITAL AND RESERVES |
|
| Authorized |
|
| 50,000,000
Ordinary Shares |
|
| of Rs. 10/- each |
|
500,000,000 |
500,000,000 |
|
|
========== |
========== |
|
| Issued,
Subscribed and Paid-up |
|
|
|
| 25,000,000
Ordinary Shares of |
|
|
|
| Rs.
10/- each. Fully Paid in Cash |
|
250,000,000 |
250,000,000 |
|
| Statutory
Reserve |
|
33,845,727 |
27,624,957 |
|
| General Reserve |
|
22,500,000 |
22,500,000 |
|
| Unappropriated
Profit |
|
382,903 |
499,823 |
|
|
----------- |
----------- |
|
|
306,728,630 |
300,624,780 |
|
|
|
|
| LONG
TERM LIABILITIES |
|
|
|
| Redeemable
Capital |
|
3 |
5,218,349 |
14,274,989 |
|
| Long
Term Loans |
|
4 |
297,859,954 |
405,057,869 |
|
| Liabilities
against Assets |
|
|
|
|
| subject
to Finance Lease |
|
5 |
|
|
| Lease Deposits |
|
6 |
112,511,804 |
99,152,824 |
|
| Certificates
of Investment |
|
7 |
36,100,000 |
11,400,000 |
|
|
----------- |
----------- |
|
|
451,690,107 |
529,885,682 |
|
| DEFERRED
LIABILITIES |
|
|
|
| Taxation |
|
37,200,000 |
29,000,000 |
|
| Staff Gratuity |
|
1,392,973 |
858,033 |
|
|
----------- |
----------- |
|
|
38,592,973 |
29,858,033 |
|
|
|
|
| CURRENT
LIABILITIES |
|
|
|
| Short
Term Borrowings |
|
8 |
496,539,425 |
433,548,078 |
|
| Certificates
of Investment |
|
7 |
66,000,000 |
50,500,000 |
|
| Current
Portion of Long Term Liabilities |
|
9 |
95,293,682 |
108,339,332 |
|
| Accrued
and Other Liabilities |
|
10 |
47,213,529 |
391,355,848 |
|
| Taxation |
|
2,600,000 |
4,100,000 |
|
| Proposed
Dividend |
|
25,000,000 |
25,000,000 |
|
|
----------- |
----------- |
|
|
732,646,636 |
660,622,994 |
|
| COMMITMENTS |
|
11 |
|
|
|
----------- |
----------- |
|
|
1,529,658,346 |
1,520,991,489 |
|
|
========== |
========== |
|
|
| TANGIBLE
FIXED ASSETS |
|
12 |
26,402,077 |
23,798,900 |
|
| NET
INVESTMENT IN LEASE FINANCE |
|
13 |
|
| Minimum
Lease Payment Receivables |
|
1,338,939,163 |
1,204,287,306 |
|
| Residual
Value of Leased Assets |
|
159,531,402 |
148,456,873 |
|
|
----------- |
----------- |
|
|
1,498,470,565 |
1,352,744,179 |
|
| Unearned
Finance Income |
|
(380,678,513) |
(316,364,297) |
|
|
----------- |
----------- |
|
| Net
Investment in Lease Finance |
|
1,117,792,052 |
1,036,379,882 |
|
| Provision
for Lease Losses |
|
(27,050,000) |
(34,000,000) |
|
|
----------- |
----------- |
|
|
1,090,742,052 |
1,002,379,882 |
|
| Current
Portion of Net Investment in Lease Finance |
|
(429,288,511) |
(426,289,808) |
|
|
----------- |
----------- |
|
|
661,453,541 |
576,090,074 |
|
| INVESTMENT
IN SUBSIDIARIES |
|
|
|
| AND
ASSOCIATE |
|
14 |
51,530,850 |
45,793,350 |
|
|
|
|
|
| LONG
TERM RECEIVABLE |
|
15 |
21,950,000 |
-- |
|
| LONG
TERM DEPOSIT |
|
|
300,000 |
300,000 |
|
| LONG
TERM LOANS |
|
16 |
2,899,224 |
1,719,112 |
|
|
| CURRENT
ASSETS |
|
| Current
Portion of Net Investment in Lease Finance |
|
429,288,511 |
426,289,808 |
|
| Short
Term Investments |
|
17 |
297,765,560 |
189,799,680 |
|
| Short
Term Morabaha Finance |
|
18 |
7,000,000 |
103,051,816 |
|
| Advances
Against Lease Commitments |
|
|
2,850,000 |
9,700,000 |
|
| Advances,
Deposits and Prepayments |
|
19 |
4,507,617 |
6,162,379 |
|
| Other
Receivables |
|
20 |
15,109,408 |
27,249,820 |
|
| Cash
and Bank Balances |
|
21 |
8,601,558 |
111,036,550 |
|
|
----------- |
----------- |
|
|
765,122,654 |
873,290,053 |
|
|
----------- |
----------- |
|
|
1,529,658,346 |
1,520,991,489 |
|
|
========== |
========== |
|
| The
annexed notes form an integral part of these financial statements. |
|
|
|
|
Rafique Dawood |
|
Ahmed Kamran |
|
|
Chairman & Chief Executive |
|
Director |
|
|
|
|
| PROFIT
AND LOSS ACCOUNT |
|
| FOR
THE YEAR ENDED JUNE 30, 2000 |
|
|
|
|
2000 |
1999 |
|
|
Note |
Rupees |
Rupees |
|
| Income |
|
| Lease Income |
|
171,044,261 |
154,046,674 |
|
| Return
on Deposits and Investments |
|
22 |
33,351,769 |
8,746,096 |
|
| Gain
on Sale of Securities |
|
|
9,294,278 |
136,734 |
|
| Other Income |
|
|
724,970 |
277,688 |
|
|
|
------------ |
------------ |
|
|
|
214,415,278 |
163,207,192 |
|
|
|
|
|
| Expenditure |
|
|
|
|
| Administration
and Operating Expenses |
|
23 |
26,585,556 |
23,565,327 |
|
| Financial
Charges |
|
24 |
132,925,298 |
99,883,895 |
|
| Provision
for Lease Losses |
|
15;000,0001 |
7,500,000 |
|
| Reversal
of Diminution in Value of Investments |
|
(1,753,881) |
(3,033,334)J |
|
|
172,756,973 |
127,915,888 |
|
|
------------ |
------------ |
|
| Profit
Before Taxation |
|
41,658,305 |
35,291,304 |
|
|
|
|
| Provision
for taxation |
|
25 |
|
|
| Current |
|
2,600,000 |
2,100,000 |
|
| Prior |
|
(245,545) |
142,971 |
|
| Deferred |
|
8,200,000 |
13,110,000 |
|
|
------------ |
------------ |
|
|
10,554,455 |
15,352,971 |
|
|
------------ |
------------ |
|
| Profit
After Taxation |
|
31,103,850 |
19,938,333 |
|
| Unappropriated
Profit Brought Forward |
|
499,823 |
9,549,157 |
|
|
|
------------ |
------------ |
|
| Profit
Available for Appropriation |
|
31,603,673 |
29,487,490 |
|
|
|
|
| Appropriations |
|
|
|
| Transferred
to Statutory Reserve |
|
6,220,770 |
3,987,667 |
|
| Proposed
Cash Dividend Rs. 1/- (1999-Rs. 1/-) Per Share |
|
