| Pak-Gulf Leasing Co Ltd - 2002 |
=================================================================================== BALANCE SHEET AS AT JUNE 30, 2002 =================================================================================== NOTE 2002 2001 Rupees Rupees =================================================================================== EQUITY AND LIABILITIES SHARE CAPITAL AND RESERVES Authorised capital 20,000,000 ordinary shares of Rs. 10 each 200,000,000 200,000,000 Issued subscribed and paid up capital 14,000,000 (2001: 10,000,000) ordinary shares of Rs. 10 each fully paid in cash 140,000,000 100,000,000 Statutory reserve 11,901,748 9,548,295 Reserve for bonus shares 18,100,000 - unappropriated profit 1,037,737 9,693,180 171,039,485 119,241,475 DEFERRED TAXATION 7,976,258 6,689,500 LONG TERM LOANS 3 1,388,882 4,722,218 LIABILITY AGAINST ASSETS SUBJECT TO FINANCE LEASE 4 389,991 231,033 LONG TERM DEPOSITS 5 46,942,226 30,250,486 CURRENT LIABILITIES Current portion of liability against assets subject to finance lease 368,589 462,351 Current portion of long term loan 3,333,336 3,333,336 Short term loans 6 25,000,000 20,000,000 Short term finances under mark-up arrangements - secured 7 2,760,706 - Accrued expenses and other liabilities 8 5,073,526 2,435,809 Unclaimed dividend 380,109 408,819 36,916,266 26,640,315 264,653,108 187,775,027 TANGIBLE FIXED ASSETS 9 15,193,264 11,234,689 INVESTMENTS 10 1,173,030 1,108,680 DEFERRED COST 11 11,600,000 - NET INVESTMENT IN LEASE FINANCE - secured 12 141,004,567 98,904,622 LONG TERM LOANS AND DEPOSITS 13 522,625 455,333 CURRENT ASSETS Current portion of net investment in leases 67,473,661 63,074,967 Advances, prepayments and other receivable 14 24,758,344 10,266,587 Cash and bank balances 15 2,927,617 2,730,149 95,159,622 76,071,703 264,653,108 187,775,027 =================================================================================== =================================================================================== PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED JUNE 30, 2002 =================================================================================== NOTE 2002 2001 Rupees Rupees =================================================================================== Income from leasing operations 16 24,310,244 22,917,783 Other income 17 1,294,377 1,939,256 25,604,621 24,857,039 Administrative and operating expenses 18 (8,760,061) (8,077,804) Financial charges 19 (2,328,517) (2,773,794) Provision for potential lease losses (1,047,020) - Profit before taxation 13,469,023 14,005,441 Taxation 20 � Current (415,000) (161,700) � Deferred (1,286,758) (2,162,500) (1,701,758) (2,324,200) Net profit after taxation 11,767,265 11,681,241 Earnings per share 21 1.08 1.14 =================================================================================== =================================================================================== CASH FLOW STATEMENT FOR THE YEAR ENDED JUNE 30, 2002 =================================================================================== 2002 2001 Rupees Rupees =================================================================================== CASH FLOW FROM OPERATING ACTIVITIES Profit before taxation 13,469,023 14,005,441 Adjustments for non cash items Depreciation 1,380,855 875,132 Amortization of deferred costs 400,000 - Financial charges 2,328,517 2,773,794 Gain on re-measurement of investments (33,605) - Profit on disposal of fixed assets (91,118) - Provision for potential lease losses 1,047,020 - 18,500,692 17,654,367 Changes in operating, assets/liabilities Advances, prepayments and other liabilities excluding advance income tax (14,188,150) 1,318,275 Accrued expenses and other liabilities 3,028,218 768,119 Net investment in leases (47,545,659) (40,484,519) Deposits from lessees 16,691,740 10,152,668 Long term loans and deposits (67,292) 90,318 (42,081,143) (28,155,139) Cash used in operations (23,580,451) (10,500,772) Financial charges paid (2,618,691) (1,898,352) Taxes paid (718,607) (1,663,737) (3,337,298) (3,562,089) Net cash flow from operating activities (26,917,749) (14,062,861) CASH FLOW FROM INVESTING ACTIVITIES Capital expenditure incurred (4,813,312) (4,885,670) Proceeds from disposal of fixed assets 169,000 - Net cash flows from investing activities (4,644,312) (4,885,670) CASH FLOW FROM FINANCING ACTIVITIES Dividend paid (28,710) (8,595,574) Proceeds from issue of right shares 28,000,000 - Proceeds from borrowings 5,000,000 30,000,000 Repayment of long term loan (3,333,336) (1,944,446) Repayment of liability against assets subject to finance lease (639,131) (661,078) Cash flows from financing activities 28,998,823 18,798,902 Net decrease in cash and cash equivalents (2,563,238) (149,629) Cash and cash equivalents at beginning of the year 2,730,149 2,879,778 Cash and cash equivalents at the end of the year 22 166,911 2,730,149 ===================================================================================NOTES TO THE ACCOUNTS FOR THE YEAR ENDED JUNE 30, 2002 3. LONG TERM LOAN This represents long-term finance facility of Rs. 10 million obtained from a Commercial Bank for a period of three years. The facility is secured by hypothecation charge over specific leased assets and related receivables of the company. The facility carries mark-up of approximately 16.5% per annum. The loan is repayable in 36 equal monthly installments commencing from 27 November 2000. 4. LIABILITY AGAINST ASSETS SUBJECT TO FINANCE LEASE � SECURED ======================================================================================================
2002 2001
Minimum Financial Principal Minimum Financial Principal
lease charges outstanding lease Charges outstanding
payments for future payments for future
periods periods
======================================================================================================
Not later than one year 434,316 65,727 368,589 527,040 64,689 462,351
Later than one year and
not later than five years 422,221 32,230 389,991 242,160 11,127 231,033
Rupees 856,537 97,957 758,580 769,200 75,816 693,384
======================================================================================================This represents vehicles acquired under lease agreements from leasing companies. Lease rentals include financial charges ranging between 17.25 percent to 17.9 percent per annum which have been used as discounting factor and are payable on monthly basis.The Company has an option to purchase the assets upon completion of lease period by adjusting the security deposits and has intention to exercise the option. 5. LONG TERM DEPOSITS These represent interest free security deposits received against lease contracts and are refundable/ adjustable at the expiry/termination of the respective leases. 6. SHORT TERM LOAN ===================================================================================
2002 2001
Note Rupees Rupees
===================================================================================
Short term loan 1 � unsecured - 5,000,000
Short term loan 2 � unsecured - 5,000,000
Short term loan 3 � secured - 10,000,000
Short term loan 4 � secured 6.1 10,000,000 -
Short term loan 5 � secured 6.1 5,000,000
Short term loan 6 � unsecured 6.2 5,000,000 -
Short term loan 7 � unsecured 6.2 5,000,000 -
25,000,000 20,000,000
===================================================================================6.1. This represent discounting facilities obtained from a Non Banking Finance Company. The facilities are secured by first charge on specific leased assets and the related lease rental receivables.These facilities carries discounting rate of 12.57% per annum payable quarterly. The facilities are repayable in 4 installments by 21 June 2003 and 28 June 2003 respectively. 6.2. This represent unsecured facilities obtained from the directors of the Company. These facilities carry mark-up of 13% per annum payable quarterly. These facilities are repayable by 31 March 2003 and 30 June 2003 respectively. 7. SHORT TERM FINANCES UNDER MARK-UP ARRANGEMENTS � SECURED This represent a running finance facility of Rs. 10 million obtained from a Commercial bank. The facility is secured by first charge on specific leased assets. The facility carries a mark-up of 13% per annum payable quarterly. The facility is maturing on 31 October 2002. 8. ACCRUED EXPENSES AND OTHER LIABILITIES ===================================================================================
2002 2001
Rupees Rupees
===================================================================================
Accrued expenses 319,182 309,403
Advance rentals 269,315 493,619
Accrued financial charges 322,180 712,681
Other liabilities 4,162,849 920,106
5,073,526 2,435,809
===================================================================================9. TANGIBLE FIXED ASSETS===================================================================================================================================================
COST DEPRECIATION Written
down
Additions/ value Deprecia-
As at (Deletions) As at As at Charge for As at as at tion
1 July during the Adjust- 30 June 1 July the year/ Adjust- 30 June 30 June rate
2001 year ments 2002 2001 (deletions) ments 2002 2002 %
===================================================================================================================================================
Owned
Leasehold premises 7,516,400 4,733,862 - 12,250,262 62,636 415,266 - 477,902 11,772,360 5
Leasehold
improvement 548,846 - - 548,846 30,488 182,928 - 213,416 335,430 33.33
Furniture
and fixtures 1,389,240 3,200 - 1,392,440 464,112 125,100 - 589,212 803,228 10
Equipments 2,031,737 76,250 - 2,107,987 1,292,049 251,853 - 1,543,902 564,085 20
Vehicles 990,298 (311,525) 992,000 1,670,773 544,147 184,008 458,800 953,312 717,461 20
(233,643)
Leased Assets
Vehicles 1,672,000 604,000 (992,000) 1,284,000 520,400 221,700 (458,800) 283,300 1,000,700 20
2002 Rupees 14,148,521 5,417,312 - 19,254,308 2,913,832 1,380,855 - 4,081,044 15,193,264
(311 525) (233,643)
2001 Rupees 5,761,061 8,643,870 - 14,148,521 2,295,110 875,132 - 2,913,832 11,234,689
(256,410) (256,410)
===================================================================================================================================================9.1. DETAILS OF DELETIONS DURING THE YEAR===================================================================================================================
Accumulated Book Sale Mode of Particulars of
Description Cost Depreciation Value Proceeds disposal Purchasers
===================================================================================================================
Vehicles 311,525 233,643 77,882 169,000 Tender Mr. Mohammad Tariq, Karachi.
2002 Rupees 311,525 233,643 77,882 169,000
2001 Rupees 256,410 256,410 - - Scrap
===================================================================================================================10. INVESTMENTS===================================================================================
2002 2001
Rupees Rupees
===================================================================================
Held to maturity investments:
� Federal Investment Bonds - 10 years 1,000,000 1,000,000
Available for sale:
� National Investment Trust Units 173,030 200,200
Provision for diminution in value of investments - (91,520)
173,030 108,680
1,173,030 1,108,680
===================================================================================11. DEFERRED COST===================================================================================
2002 2001
Rupees Rupees
===================================================================================
Discount on issue of right shares 12,000,000 -
Amortisation of discount on issue of right shares (400,000) -
11,600,000 -
===================================================================================12. NET INVESTMENT IN LEASE FINANCE � SECURED============================================================================================================================
2002 2001
Later than Later than
one year and one year and
Not later than less than five No later than less than five
one year years Total one year years Total
============================================================================================================================
Lease rentals receivables 80,386,228 120,876,006 201,262,234 74,788,132 91,652,671 166,440,803
Estimated residual
value of leased assets 10,893,384 37,940,835 48,834,199 8,543,040 23,640,790 32,183,830
Minimum lease payments 91,279,592 158,816,841 250,096,433 83,331,172 115,293,461 198,624,633
Unearned lease income (23,805,931) (16,765,254) (40,571,185) (20,256,205) (16,388,839) (36,645,044)
Provision for potential
Lease losses - (1,047,020) (1,047,020) - - -
Rupees 67,473,661 141,004,567 208,478,228 63,074,967 98,904,622 161,979,589
============================================================================================================================The company has entered into various lease agreements with mark-up rates ranging from 25.35 percent to 15.75 percent per annum. The agreements usually are for a three years period.In certain leases, the company has security, in addition to leased assets, in the form of corporate / personal guarantee of associated companies / directors. 13. LONG TERM LOANS AND DEPOSITS ===================================================================================
2002 2001
Rupees Rupees
===================================================================================
Deposits 485,000 424,200
Loans to employees � considered good 37,625 31,133
522,625 455,333
===================================================================================14. ADVANCES, PREPAYMENTS AND OTHER RECEIVABLES===================================================================================
2002 2001
Rupees Rupees
===================================================================================
Advance income tax (net of provision) 6,774,694 6,471,087
Advance against lease 12,526,000 -
Prepayments 316,084 296,270
Accrued return on investments 173,297 127,978
Net receivable against terminated leases 2,148,795 1,856,653
Other receivables 2,759,474 1,384,679
Advances others 60,000 129,920
24,758,344 10,266,587
===================================================================================15. CASH AND BANK BALANCES===================================================================================
2002 2001
Note Rupees Rupees
===================================================================================
Cash in hand 25,815 8,180
Cash at bank � deposit account 15.1 2,901,802 2,721,969
2,927,617 2,730,149
===================================================================================15.1. IT INCLUDES RS. 74,570 (2001: RS. 74,570) DEPOSITED WITH THE STATE BANK OF PAKISTAN16. INCOME FROM LEASING OPERATIONS ===================================================================================
2002 2001
Rupees Rupees
===================================================================================
Income on lease contracts 23,449,272 22,115,593
Front end fee 166,771 331,340
Documentation income 190,180 167,426
Gain on lease termination 36,297 242,682
Other income 467,724 60,742
24,310,244 22,917,783
===================================================================================17. OTHER INCOME===================================================================================
2002 2001
Rupees Rupees
===================================================================================
Profit on bank accounts
Return on other investments 515,715 1,069,846
163,942 175,025
Profit on disposal of fixed assets 91,118 -
Miscellaneous income 523,602 694,385
1,294,377 1,939,256
===================================================================================18. ADMINISTRATIVE AND OPERATING EXPENSES===================================================================================
2002 2001
Note Rupees Rupees
===================================================================================
Directors� fee 28,500 15,000
Salaries, allowances and benefits 18.1 3,583,081 3,472,339
[including provident contribution
Rs. 122,107 (2001: Rs.104,175)]
Office maintenance 235,088 151,510
Insurance expenses 137,315 121,405
Office rent and utilities 456,927 1,035,503
Vehicle running expenses 540,183 646,820
Traveling and conveyance 40,928 24,857
Advertisement expenses 80,990 157,848
Subscriptions, printing and stationery 515,929 416,493
Entertainment expenses 20,762 25,737
Postage and courier 45,513 30,745
Internet expenses 1,500 1,350
Legal and professional charges 635,238 575,003
Auditors� remuneration 18.2 76,575 56,250
Depreciation 1,380,855 875,132
Amortization of deferred costs 400,000 -
Commission and brokerage 128,502 18,055
Computerization expenses 100,225 148,725
General meeting expenses 117,349 145,511
Security vault fee 11,087 10,002
Bank charges 30,495 57,668
Repair and maintenance 53,033 20,585
Kitchen and canteen expenses 59,222 52,825
Security guard fee 46,000 -
Zakat 3,324 -
Miscellaneous 31,440 18,441
8,760,061 8,077,804
===================================================================================Total number of employees as at 30 June 2002 were 16 (2001: 14).18.1. REMUNERATION OF DIRECTORS, CHIEF EXECUTIVE AND EXECUTIVES ====================================================================================================================
Directors Chief Executive Executive Total
2002 2001 2002 2001 2002 2001 2002 2001
====================================================================================================================
Managerial remuneration - - 587,957 503,220 733,811 852,396 1,321,768 1,355,616
Housing and utilities - - 323,378 276,780 183,589 476,004 506,967 752,784
Provident fund
contribution - - 81,250 - 27,817 71,033 109,067 71,033
Meeting tee 28,500 15,000 - - - - 28,500 15,000
Rupees 28,500 15,000 992,585 780,000 945,217 1,399,433 1,966,302 2,194,433
Number of persons 8 8 1 1 4 5 13 14
====================================================================================================================The chief executive and certain executives of the company are also entitled to free use of company maintained vehicles.18.2. AUDITORS� REMUNERATION ===================================================================================
2002 2001
Rupees Rupees
===================================================================================
Annual audit fee 75,000 50,000
Out of pocket expenses 1,575 6,250
76,575 56,250
===================================================================================19. FINANCIAL CHARGES===================================================================================
2002 2001
Rupees Rupees
===================================================================================
Mark-up on:
- Long term finance 1,046,735 1,076,103
- Short term finance 1,181,455 1,534,930
Mark-up on lease financing 100,327 162,761
2,328,517 2,773,794
===================================================================================20. TAXATIONCURRENT The income tax assessments of the company have been finalised upto and including the assessment year 2001-2002. Further, various appeals have been filed by the company and the tax department in respect of certain disallowances for assessment years 1997-98 to 1999-2000 which are pending before the appellate authorities. In case of adverse decision in appeals described above, further tax liability amounting to Rs. 3.8. million may arise, for which no provision has been made in these accounts as management expects favorable outcome of such appeals. DEFERRED Deferred tax arising due to timing differences computed under the liability method is estimated at Rs. 8.5 million (2001: Rs. 7.711 million). The unprovided liability as on 30 June 2002 amounts to Rs. 0.511 million (2001: Rs. 1.022 million). As per International Accounting Standard (IAS) 12 �Accounting for taxes on income (revised)�, full liability against deferred tax should be provided in the year to which it relates. The Securities and Exchange Commission of Pakistan vide circular No. 16 dated 9 September 1999 has directed that in order to achieve compliance with the revised IAS 12, all leasing companies, during each of the five financial years beginning 1 July 1998 and ending 30 June 2003 shall provide deferred tax liability arising in that year together with a further amount equal to one-fifth of the unprovided deferred tax liability as at the beginning of the financial year ending 30 June 2000. Compliance with the above directive shall also be deemed where the company may appropriate equivalent amount as a capital reserve out of profits available for appropriation. Consequently the company has made full provision for deferred tax liability for the year and one fifth of the unprovided liability as on 1 July 1998. 21. EARNINGS PER SHARE - BASIC AND DILUTED ===================================================================================
2002 2001
===================================================================================
Net profit after tax (Rupees) 11,767,265 11,681,241
Weighted average number of ordinary shares 10,825,181 10,190,217
Earnings per share 1.08 1.14
===================================================================================22. CASH AND CASH EQUIVALENTSCash and cash equivalents comprises of the following items as included in the balance sheet: ===================================================================================
2002 2001
Rupees Rupees
===================================================================================
Short term running finance (2,760,706) -
Cash and bank balances 2,927,617 2,730,149
166,911 2,730,149
===================================================================================19 |