| Capital Assets Leasing Corporation Limited |
|
|
|
|
|
|
|
| Annual
Report 2001 |
|
|
|
| CONTENTS |
|
|
| Corporate
Information |
|
| Notice of Meeting |
|
| Directors'
Report |
|
| Pattern of Shareholding |
|
| Auditors'
Report |
|
| Balance Sheet |
|
|
| Profit & Loss Account |
|
| Cash Flow Statement |
|
| Statement
of Changes in Equity |
|
| Notes
to the Accounts |
|
|
|
| CORPORATE
INFORMATION |
|
|
| Board
of Directors |
|
| Mr.
Salman Qureshi (Chairman) |
|
| Mr.
Nisar A. Memon |
|
| Mr.
Mohammad Kalim |
|
| Mr.
Ilyas Mohsin |
|
| Mr.
Anwar Shafi |
|
| Mr.
Bashir Hussain Shaikh |
|
|
| Chief
Executive Officer |
|
| Mr.
Bashir Hussain Shaikh |
|
|
| Company
Secretary |
|
| Mr.
Rizwan Akhtar |
|
|
| Auditors |
|
| M/s
Ebrahim & Company |
|
| Chartered
Accountants |
|
| 2nd
Floor, Block "C" |
|
| Lakson
Square Building |
|
| Sarwar
Shaheed Road, Karachi. |
|
|
| Registrars
& Share Transfer Office |
|
| M/s
Corplink (Pvt) Limited |
|
| Wings
Arcade, 1-K (Commercial) |
|
| Model
Town, Lahore. |
|
| Tel.
# 5839182-5887262, Fax: 5869037 |
|
|
| Legal
Advisors |
|
| M/s
Mohsin Tayebally & Co., Advocates |
|
| M/s
Rizvi, Isa & Co., Advocates |
|
|
| Main
Bankers |
|
| ABN
Amro Bank |
|
| Allied
Bank of Pakistan Limited |
|
| Askari
Commercial Bank Limited |
|
| First
Women Bank Limited |
|
| Muslim
Commercial Bank Limited |
|
| National
Bank of Pakistan Limited |
|
| PICIC
Commercial Bank Limited |
|
| Platinum
.Commercial Bank Limited |
|
| Prime
Commercial Bank Limited |
|
| Soneri
Bank Limited |
|
| Union
Bank Limited |
|
|
| Registered
Office |
|
| 10/1
l-B, 3rd Floor, LDA Flats |
|
| Lawrence
Road, Lahore. |
|
| Telephone
# 6311604-5 |
|
| Fax # 6370017 |
|
| Email:
calcorp@nexlinx.net.pk |
|
|
| Branch Office |
|
| 43/10/G,
Block-VI |
|
| Dr.
Mehmood Hussain Road, |
|
| PECHS,
Karachi. |
|
| Telephone
# 4544115-6 |
|
| Fax # 4523822 |
|
| Email:
calcorp@cyber.net.pk |
|
|
|
| NOTICE
OF 9TH ANNUAL GENERAL MEETING |
|
|
| Notice
is hereby given that the ninth (9th) Annual General Meeting of the
shareholders of |
|
| CAPITAL
ASSETS LEASING CORPORATION LIMITED will been held at the Registered |
|
| Office
of the Company located at 10/1 l-B, 3rd Floor, LDA Flats, Lawrence Road,
Lahore on |
|
| Monday,
31st December 2001 at 11:00 a.m. to transact the following business: |
|
|
| 1.
To confirm the minutes of eighth (8th) Annual General Meeting of the
shareholders |
|
| held
on December 15, 2000. |
|
|
| 2.
To receive, consider and adopt the Audited Accounts of the Company for the
year |
|
| ended
June 30, 2001 together with the Directors' and Auditors' Reports thereon. |
|
|
| 3.
To approve, as recommended by the Directors in their meeting held on
Thursday, |
|
| December
06, 2001, the final Bonus Shares ~ 17.50% (i.e. seventeen and a half |
|
| shares
for every one hundred shares held) of the paid up capital for the year ended |
|
| June 30, 2001 . |
|
|
| 4.
To appoint Auditors of the Company and to fix their remuneration. The present |
|
| Auditors
M/s Ebrahim & Company Chartered Accountants, retire and being eligible |
|
| offer
themselves for reappointment. |
|
|
| Special
Business |
|
| 1.
To approve the increase in Authorized Capital of the Company from Rs. 100
million |
|
| to
Rs. 200 million as recommended by the Directors in their meeting held on |
|
| December
06, 2001. |
|
|
| 2. To approve the remuneration of Chief
Executive. |
|
|
| To
transact any other business with the permission of the Chair. |
|
|
|
BY ORDER OF THE BOARD |
|
|
|
|
| Lahore |
|
(Rizwan Akhtar) |
|
| December
09, 2001 |
|
Company Secretary |
|
|
| Notes: |
|
| 1.
The Share Transfer Books of the Company will remain closed from 21st December |
|
| 2001
to 31st December, 2001 (both days inclusive). |
|
|
| 2.
A member eligible to attend and vote at this Meeting is entitled to appoint
another |
|
| member
as his/her proxy to attend and vote instead of him/her. A proxy must be a |
|
| member
of the company. Proxies in order to be effective, must be received at the |
|
| Registered
Office of the Company not less than 48 hours before the time of the |
|
| Meeting. |
|
|
| 3.
Any individual/beneficial owner of Central Depository Company (CDC), entitled
to |
|
| vote
at this meeting must bring his/her National Identity Card to prove his/her |
|
| indentity.
In case of proxy, must enclose an attested copy of his/her National |
|
| Identity
Card. Representatives of corporate members should bring the usual |
|
| documents
required for such purpose. |
|
|
| 4. A Statement under Section 160 of Companies
Ordinance 1984 pertaining to the |
|
| Special
Business is being sent to the shareholders along with this notice. |
|
|
| 5.
Members are requested to notify the changes of address, if any, to the
Company's |
|
| Share
Registrars M/s Corplink (Pvt.) Ltd. Wings Arcade, 1-K (Commercial) Model |
|
| Town
Lahore, immediately. |
|
|
|
| DIRECTORS'
REPORT |
|
|
| We
are pleased to present before you the 9th annual report along with the
audited financial statements for |
|
| the
year 2000-2001. |
|
|
| Financial
Results |
|
| Financial
Results: |
|
(Rs. In '000) |
|
| Gross revenue |
|
42,700 |
|
| Total
expenses |
|
38,037 |
|
|
---------- |
|
| Operating
profit for the year |
|
4,663 |
|
| Provisions |
|
| For
potential losses (Lease) |
|
(289) |
|
| For
potential losses (Morabaha / short-term) |
|
(1,079) |
|
| For
potential losses (Other receivables) |
|
1,485 |
|
| For
taxation (including Deferred Taxation) |
|
2,312 |
|
|
---------- |
|
| Profit
after taxation |
|
2,429 |
|
|
---------- |
|
| Un-appropriated
profit brought forward |
|
2,234 |
|
| Profit
available for appropriation |
|
24,202 |
|
|
---------- |
|
| Appropriations |
|
26,436 |
|
| Transfer
to statutory reserves |
|
447 |
|
| Proposed
Bonus Shares (6 17.50%) |
|
11,592 |
|
|
---------- |
|
|
12,039 |
|
|
---------- |
|
| Un-appropriated
profit carried forward |
|
14,397 |
|
|
---------- |
|
| Bonus
Share Issue |
|
| The
directors are pleased to recommend a bonus issue @ 17.50%, i.e. seventeen and
a half shares for |
|
| every
one hundred shares held. This would contribute Rs. 11.592 M towards the Paid
up Capital, thus the |
|
| paid
up capital of your Company would increase from existing Rs.66.24 M to Rs.
77.831 M. The decrease |
|
| in
earning per share due to bonus issue will be compensated by increase in the
total number of shares held |
|
| by
the shareholder(s). |
|
|
| Review
of Operations |
|
| The
year was a difficult year for Pakistani businesses in general and for Leasing
industry in particular. |
|
| Multinationals
have been hit by global economic downturn and plummeting profits. They are
not in the |
|
| expansion
phase, they are facing a deep recession. Local business concerns also face a
similar scenario. IT |
|
| bubble
has shrunk if not burst. IT educational institutes and software houses are
facing the crunch. |
|
| Inflation
was higher this year due to an increase in the prices of fuel, transport
& communication and |
|
| medicine.
Government's efforts to increase tax revenues (tax survey, self-assessment
scheme, extension of |
|
| GST,
etc.) resulted in the lowering of purchasing power. Hence, Pakistan's
aggregate growth was only 2.6 |
|
| per
cent this year against a target of 5 per cent. As a result, our business
suffered a slow-down too. |
|
|
| All
the above factors, of course, had an impact on the business operations of
your Company, with the |
|
| result
that we could not achieve the growth rate as targeted. However, your Company,
by the grace of |
|
| Allah
and with the commitment of its managers and staff, has maintained a steady
growth rate. Gross |
|
| Lease
disbursements were Rs.103.314 M. Net yield on leases was 21.83%. Income from
leasing |
|
| operations
grew from Rs.28.8 M last year to Rs. 37.3M an increase of about 30%.
Significant increase in |
|
| other
income was achieved - Rs. 0.8 M to Rs. 5 M - an increase of 525%. The Balance
Sheet size has |
|
| grown
to Rs.264.9 M from Rs.259.1 M last year - a modes[increase of 2.2 %. |
|
|
| Substantial
reversal of provisions is a proof of our continued effort towards recoveries.
Profit before tax |
|
| registered
a rise of about 59.5%; however, due to deferred taxation, the net profit
after tax became Rs.2.2 |
|
| M
- slightly lower than that of last year. |
|
|
| Our
working strategy remained centered around writing leases to existing lessees
and to new clients with |
|
| established
market reputation. The asset-wise break-up of leases written this year is as
follows: |
|
|
| Plant
& Machinery |
|
22% |
|
| Vehicles |
|
45% |
|
| Others |
|
33% |
|
|
| As
in the past, your Company continues to support Education Sector, Small
Businesses, and high net |
|
| worth
individuals. This policy, together with a rigorous lease appraisal procedure
ensures the requisite |
|
| asset
strength and minimal lease provisions. A sector-wise break-up of our lease
portfolio is shown below: |
|
|
| Sectors |
|
%age |
|
| Educational
Institutions |
|
31.53% |
|
| . Trading |
|
7.20% |
|
| Electric
& Electric Goods |
|
7.05% |
|
| Food
& Tobacco |
|
5.78% |
|
| Information
Technology |
|
5.31% |
|
| Health Care |
|
5.17% |
|
| Steel
& Engineering |
|
3.67% |
|
| Transport
& Communication |
|
3.59% |
|
| Chemicals,
Fertilizers & Pharmaceuticals |
|
3.38% |
|
| Textiles |
|
2.94% |
|
| Advertisement |
|
2.25% |
|
| Security
Services |
|
2.21% |
|
| Insurance
Companies |
|
2.02% |
|
| Banaspati
& Allied |
|
1.53% |
|
| Hotels |
|
1.04% |
|
| Printing
& Packaging |
|
0.71% |
|
| Paper
& Boards |
|
0.68% |
|
| Construction |
|
0.64% |
|
| Energy
Oils & Gas |
|
0.09% |
|
| Glass
& Ceramics |
|
0.09% |
|
| Others |
|
13.12% |
|
|
---------- |
|
|
100.00% |
|
|
========== |
|
| Overall,
the operating results of your Company reflect the prudent approach of the
management to carry |
|
| out
leasing and financing business as per the policy in designated niches, and
simultaneously emphasizing |
|
| on
timely recoveries to safeguard the interest of our Shareholders. |
|
|
| Funds
Mobilization |
|
| The
quantum of high-cost short-term funds has been reduced this year from Rs.82.5
M to Rs.65.9 M to |
|
| improve
the profitability. We are negotiating availability of medium term funds at
affordable rates to |
|
| reduce
the mismatch in lease terms and borrowed funds terms. Moreover, the Company
has successfully |
|
| issued
COI's worth Rs. 10.6 M this year. |
|
|
| The
lease rentals continue to become a source of funds to write new leases. |
|
|
| Credit Rating |
|
| JCR-VIS
Credit Rating Company assigned the following rating to the Company: |
|
|
| Medium
to Long Term |
|
BBB- |
|
| Short Term |
|
A3 |
|
|
| These
are satisfactory ratings and qualify the entity / issue as 'investment
grade'. Our entity rating |
|
| continues
to be the 'investment grade' though with a negative outlook which is maily
due to the Paid-up |
|
| Capital issue. |
|
|
| Paid
Up Capital |
|
| As
per requirements of Leasing Companies (Establishment and Regulation) Rules
2000 issued by SECP, |
|
| the
minimum paid up capital is required to be raised to Rs. 200 M. We are pleased
to inform you that the |
|
| Securities
and Exchange Commission of Pakistan has allowed us to meet the requirement by
September |
|
| 30,
2002 by issuing right shares at a discount. The management is in constant
contact with SECP and is |
|
| endeavoring
to resolve the issue involved in this regard. |
|
|
| Issues
Confronting the Leasing Sector |
|
| During
the year, the Leasing Sector vigorously pursued two important tax issues
namely restoration of |
|
| initial
depreciation/first year allowance and tax demands raised on lease key
money/security deposit by the |
|
| tax
authorities. Both these issues stand resolved by the CBR. The matter of tax
on lease key money had |
|
| been
settled due to favorable decision of the Commissioner of Income Tax (Appeals)
as our appeals had |
|
| been
accepted. Your Company played a key role in resolution of issues confronting
leasing sector. |
|
|
| Moreover,
in the draft Income Tax Ordinance 2001, tax laws relating to leasing sector
were omitted |
|
| entirely.
A comprehensive representation comprising each and every omission has been
made to CBR by |
|
| LAP
for incorporating all existing tax laws relating to leasing in the new
Ordinance. |
|
|
| Special Audit |
|
| On
directives of Securities & Exchange Commission of Pakistan, M/s S.M.
Masood & Co., Chartered |
|
| Accountants,
Lahore, undertook a Special Audit of your Company. We are pleased to state
that their |
|
| report
was Satisfactory, and the SECP has acknowledged the same to the Company. |
|
|
| Future
Outlook |
|
| After
the September 11 attacks on the WTC, New York and Pentagon, Washington D.C.,
world has |
|
| become
a new place. The decision .taken by our government was a difficult one, but
time proved the |
|
| veracity
of the decision, and Alhamdollilah, Pakistan came out of the crisis
successfully. Thought the |
|
| expectations
of economic gains as a result of joining the coalition against terrorism were
not met to the |
|
| extent
that was envisaged by the government, yet Pakistan is better off relatively
in terms of now having a |
|
| stronger
rupee, reserves more than 4 billion dollars, promises of EU quota
relaxations, and possible |
|
| similar
treatment form USA. |
|
|
| United
Nations, coalition partners and other groups are discussing the setting up of
broad-based govt. and |
|
| rebuilding
of Afghanistan, which is at the center of the crisis. This is not an easy
task, as diverse ethnic |
|
| groups
and their international backers are involved. Yet it is hoped that the
process of restructuring will |
|
| meet
some measure of success in not too distant a future. This will have positive
economic benefits for |
|
| Pakistan
- especially in the area of infrastructure building e.g. cement, electrical
generation & distribution, |
|
| and
other manufacturing and consumer goods including food items, pharmaceuticals
etc. It is hoped that |
|
| leasing
industry will derive due benefits due to this additional demand. However, one
possible specter of |
|
| smuggling
as a result of Afghan Transit Trade might wipe out the benefits. The
government should be |
|
| aware
of such pitfalls while devising future policies. |
|
|
| The
issuing of TFCs by leasing companies took a sharp turn this year. Six have
been issued so far. The |
|
| growing
interest of issuing medium-term debt instruments by leasing companies
exhibits the increasing |
|
| popularity
of leasing consumer durables. Your Company is aware of the market trends and
is making |
|
| conscious
efforts in these directions. |
|
|
| Despite
the modulations in economy and geopolitical changes, we stand committed to
take the Company |
|
| to
new heights to effect recoveries in the times of low business activity and
keep searching for new |
|
| business
sectors for our business growth. |
|
|
| Directors |
|
| Mr.
Jehangir Shah resigned as director and Chief Executive of the company, and
Mr. Bashir Hussain |
|
| Shaikh
was co-opted to complete the remainder of the tenure. The Board appreciates
the valuable |
|
| contribution
made by the outgoing director during his tenure. |
|
|
| Auditors |
|
| The
Company's Auditors M/s Ebrahim & Company, Chartered Accountants, retire
and being eligible offer |
|
| themselves
for reappointment. |
|
|
| Pattern
of Shareholding |
|
| Pattern
of shareholding as on June Both 2001 is annexed to this report. |
|
|
| Acknowledgements |
|
| We
would like to thank our valued customers, shareholders, creditor financial
institutions, the Securities & |
|
| Exchange
Commission of Pakistan, State Bank of Pakistan, Leasing Association of
Pakistan, and all three |
|
| Stock
Exchanges of Pakistan, for their continued support and guidance. |
|
|
| The
Board expresses its deep appreciation towards the tireless efforts of the
management and staff of the |
|
| company.
It is due to their hard work and sheer dedication that we have been able to
present these results |
|
| before you. |
|
|
| On
behalf of the Board of Directors |
|
|
|
Bashir Hussain Shaikh |
|
| Lahore |
|
Managing Director & |
|
Salman Qureshi |
|
| December
6, 2001. |
|
Chief Executive Officer |
|
Chairman |
|
|
|
| PATTERN
OF HOLDING OF SHARES |
|
| HELD
BY THE SHAREHOLDERS AS AT 30TH JUNE 2001 |
|
|
|
|
Shareholding |
Total |
|
| No.
of Shareholders |
From |
To |
shares held |
|
| 29 |
|
1 |
100 |
2700 |
|
| 400 |
|
101 |
500 |
187000 |
|
| 122 |
|
501 |
1000 |
112500 |
|
| 107 |
|
1001 |
5000 |
251550 |
|
| 13 |
|
5001 |
10000 |
107500 |
|
| 6 |
|
10001 |
15000 |
76000 |
|
| 1 |
|
15001 |
20000 |
18000 |
|
| 5 |
|
20001 |
25000 |
115050 |
|
| 1 |
|
25001 |
30000 |
30000 |
|
| 1 |
|
30001 |
35000 |
30500 |
|
| 1 |
|
35001 |
40000 |
40000 |
|
| 1 |
|
45001 |
50000 |
50000 |
|
| 2 |
|
95001 |
100000 |
200000 |
|
| 1 |
|
115001 |
120000 |
116600 |
|
| 1 |
|
140001 |
145000 |
143000 |
|
| 1 |
|
145001 |
150000 |
150000 |
|
| 1 |
|
160001 |
165000 |
164600 |
|
| 1 |
|
165001 |
170000 |
168300 |
|
| 1 |
|
200001 |
205000 |
203800 |
|
| 1 |
|
265001 |
270000 |
269300 |
|
| 2 |
|
370001 |
375000 |
750000 |
|
| 2 |
|
385001 |
390000 |
771700 |
|
| 1 |
|
450001 |
455000 |
455000 |
|
| 1 |
|
495001 |
500000 |
499500 |
|
| 1 |
|
1710001 |
1715000 |
1711350 |
|
| ---------- |
|
---------- |
---------- |
---------- |
|
| 703 |
|
6623950 |
|
| ========== |
|
========== |
========== |
========== |
|
|
|
|
|
| With
Central depository Company of Pakistan |
|
| 3 |
|
1 |
100 |
300 |
|
| 42 |
|
101 |
500 |
18900 |
|
| 26 |
|
501 |
1000 |
25000 |
|
| 44 |
|
1001 |
5000 |
113500 |
|
| 5 |
|
5001 |
10000 |
36800 |
|
| 3 |
|
10001 |
15000 |
40600 |
|
| 1 |
|
15001 |
20000 |
16500 |
|
| 2 |
|
20001 |
25000 |
46700 |
|
| 1 |
|
25001 |
30000 |
27000 |
|
| 1 |
|
35001 |
40000 |
39000 |
|
| 1 |
|
40001 |
45000 |
43650 |
|
| 1 |
|
55001 |
60000 |
55500 |
|
| 1 |
|
60001 |
65000 |
60500 |
|
| 1 |
|
75001 |
80000 |
77500 |
|
| 2 |
|
125001 |
130000 |
258000 |
|
| 1 |
|
145001 |
150000 |
148000 |
|
| 1 |
|
195001 |
200000 |
199500 |
|
| 1 |
|
245001 |
250000 |
250000 |
|
| 1 |
|
250001 |
255000 |
254400 |
|
| ---------- |
|
---------- |
---------- |
---------- |
|
| 138 |
|
1711350 |
|
| ========== |
|
========== |
========== |
========== |
|
|
|
|
|
| Categories
of Shareholders (including CDC) |
|
|
|
Number |
Share Held |
Percentage |
|
| Individuals |
|
802 |
3428700 |
51.76% |
|
| Investment
Companies |
1 |
800 |
0.01% |
|
| Insurance
Companies |
2 |
204800 |
3.09% |
|
| Joint
Stock Companies |
17 |
107900 |
1.63% |
|
| Financial
Institution |
11 |
1923050 |
29032% |
|
| Modaraba
Companies |
1 |
500 |
0.01% |
|
| Leasing
Companies |
1 |
2000 |
0.03% |
|
| Corporate
Societies |
1 |
200 |
0.00% |
|
| Others |
|
5 |
956000 |
14.43% |
|
|
---------- |
---------- |
---------- |
|
|
841 |
6623950 |
100.00% |
|
|
========== |
========== |
========== |
|
| Others |
|
|
|
| Association |
|
-- |
-- |
-- |
|
| Abandoned
Property |
-- |
-- |
-- |
|
| Governments
Authorities |
-- |
-- |
-- |
|
| Modarabas
Management |
-- |
-- |
-- |
|
| Non-Resident |
|
-- |
-- |
-- |
|
| Foreign
Company |
-- |
-- |
-- |
|
| Trust |
|
2 |
954500 |
14.41% |
|
| Others |
|
2 |
1500 |
0.02% |
|
|
---------- |
---------- |
---------- |
|
| Total |
|
4 |
956000 |
14.43% |
|
|
========== |
========== |
========== |
|
|
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed balance sheet of CAPITAL ASSETS LEASING CORPORATION |
|
| LIMITED
as at June 30, 2001 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 above said statements. We believe that our audit
provides |
|
| reasonable
basis for our opinion and, after due verification, 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 |
|
| polices
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< |
