| Escorts Investment Bank Ltd - 2003 |
=================================================================================== BALANCE SHEET AS AT JUNE 30, 2003 NOTE 2003 2002 Rupees Rupees =================================================================================== ASSETS Cash and bank balances 3 68,446,192 143,297,475 Placements 4 323,093,425 337,223,425 Investments 5 1,104,770,424 601,437,050 Morabaha financing 6 375,653,895 207,013,553 Advances, deposits, prepayments and other receivable 7 134,489,582 109,734,428 Membership card 8 7,170,000 - Operating fixed assets 9 13,207,575 13,398,054 2,026,831,093 1,412,103,985 LIABILITIES Borrowings from financial institutions 10 777,900,000 310,000,000 Certificates of investments 11 692,667,583 731,581,496 Subordinated loans 12 84,030,171 84,030,171 Liabilities against assets subject to finance leases 13 3,235,381 5,122,719 Creditors, accrued and other liabilities 14 18,831,898 15,073,121 Provision for taxation 15 36,262,083 21,762,083 Proposed dividend 16 30,045,002 12,043,368 Deferred tax liability 17 49,932,547 - 1,692,904,665 1,179,612,958 Net assets 333,926,428 232,491,027 Represented by: Share Capital 18 200,000,000 200,000,000 Reserves 19 22,638,911 11,126,490 Unappropriated profits 18,555,643 2,505,957 241,194,554 213,632,447 Surplus on revaluation of securities 20 92,731,874 18,858,580 333,926,428 232,491,027 Contingencies and commitments 21 =================================================================================== =================================================================================== PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED JUNE 30, 2003 NOTE 2003 2002 Rupees Rupees =================================================================================== INCOME Profit on morabaha financing 41,378,249 26,535,001 Profit on placements 40,338,196 43,816,246 Return on investments 70,909,596 42,377,239 Gain on repurchase transactions 12,690,735 5,219,267 Profit on sale of investments 59,195,907 19,905,374 Profit on bank deposits 6,875,408 8,715,622 Fees and commission 22 2,077,839 1,150,035 Other income 340,225 74,005 233,916,155 147,792,789 EXPENDITURE Cost/return on deposits, borrowings etc. 115,310,205 88,004,259 Administrative and other operating expenses 23 44,535,824 31,730,620 Financial charges 24 699,830 707,575 160,545,859 120,442,454 73,370,296 27,350,335 OPERATING PROFIT Provision against non-performing morabaha financing 6.3 1,305,879 8,067,665 OPERATING PROFIT BEFORE TAXATION 72,064,417 19,282,670 PROVISION FOR TAXATION 25 Current year 14,500,000 7,000,000 Prior year 2,310 - 14,502,310 7,000,000 PROFIT AFTER TAXATION 57,562,107 12,282,670 UNAPPROPRIATED BROUGHT FORWARD 2,505,957 4,679,821 PROFIT AVAILABLE FOR 60,068,064 16,962,491 APPROPRIATIONS Transferred to statutory reserve 19 11,512,421 2,456,534 Proposed dividend 15% (2002: 6%) 30,000,000 12,000,000 41,512,421 14,456,534 UNAPPROPRIATED PROFIT CARRIED FORWARD 18,555,643 2,505,957 EARNINGS PER SHARE 26 Rs. 2.878 Rs. 0.614 =================================================================================== ===================================================================================
CASH FLOW STATEMENT FOR THE YEAR ENDED JUNE 30, 2003
2003 2002
Rupees Rupees
===================================================================================
CASH FLOW FROM OPERATING ACTIVITIES
Profit before taxation 72,064,417 19,282,670
Adjustments for non cash charges
Depreciation 3,151,232 2,361,345
Provision against non performing financing 1,305,879 8,067,665
Loss/(gain) on sale of fixed assets 9,550 (191,765)
4,466,661 10,237,245
Decrease/(Increase) in operating assets
Advances, deposits, prepayments and other
Receivable 2,956,798 (41,487,528)
Morabaha financing (169,946,221) (91,529,921)
Placements (net) 14,130,000 (20,000,000)
(152,859,423) (153,017,449)
(Decrease)/Increase in operating liabilities
Certificates of investment (38,913,913) 415,381,791
Borrowings 467,900,000 (170,000,000)
Creditors, accrued and other liabilities 4,824,827 2,359,441
433,810,914 247,741,232
357,482,569 124,243,698
Income tax paid (28,780,312) (17,281,259)
Net cash flow from operating activities 328,702,257 106,962,439
CASH FLOW FROM INVESTING ACTIVITIES
Additions to fixed assets (3,281,697) (4,770,475)
Proceeds from sale of fixed assets 311,394 500,000
Investments (net) (379,527,533) (96,624,919)
Purchase of membership card (7,170,000) -
Net cash outflow from investing activities (389,667,836) (100,895,394)
CASH FLOW FROM FINANCING ACTIVITIES
Subrodinated loans - 84,030,171
Payment of lease obligation under finance lease (1,887,338) (1,197,220)
Dividend paid (11,998,366) (156)
Net cash inflow from financing activities (13,885,704) 82,832,795
Net (decrease)/increase in cash and
cash equivalents (74,851,283) 88,899,840
Cash and cash equivalents at the beginning of
the year 143,297,475 54,397,635
Cash and cash equivalents at the end of the year 68,446,192 143,297,475
===================================================================================NOTES TO THE ACCOUNTS FOR THE YEAR ENDED JUNE 30, 20033. CASH AND BANK BALANCES ===================================================================================
NOTE 2003 2002
Rupees Rupees
===================================================================================
Cash with banks
Current accounts 3.1 8,761,029 6,689,241
Profit and loss sharing accounts 3.2 59,685,163 136,608,234
68,446,192 143,297,475
===================================================================================3.1. These include Rs. 8.171 million (2002: Rs. 5.867 million) deposited with State Bank of Pakistan.3.2. The rates of return on these accounts range from 3.00% to 4.50% per annum. 4. PLACEMENTS ===================================================================================
2003 2002
Rupees Rupees
===================================================================================
Unsecured
Due within one year 255,870,000 270,000,000
Due after one year 67,223,425 67,223,425
323,093,425 337,223,425
===================================================================================These represent unsecured placements with a non-banking financial institutions, maturing upto March 29, 2005 and carry rates of rates of ranging from 5.10% to 12.50% per annum.5. INVESTMENTS ===================================================================================
NOTE 2003 2002
Rupees Rupees
===================================================================================
Available for sale
Federal Investment Bonds - 50,000,000
Term Finance Certificates 5.1, 5.2 & 5.3 123,244,881 92,315,243
Surplus on revaluation of securities 20 11,282,027 2,977,435
134,526,908 95,292,678
Pakistan Investment Bonds 5.5 & 5.6 632,446,900 365,228,740
Surplus on revaluation of securities 20 129,252,100 16,496,260
761,699,000 381,725,000
WAPDA Bonds (Note: 5.7) 50,000,000 -
Surplus on revaluation of securities 20 2,250,000 -
52,250,000 -
Investment in listed shares 5.8 135,414,222 29,034,487
(Deficit) on revaluation of shares 20 (119,706) (615,115)
135,294,516 28,419,372
1,083,770,424 255,437,050
Held to maturity
Musharika investment 5.9 21,000,000 31,000,000
Certificates of investment - 15,000,000
21,000,000 46,000,000
1,104,770,424 601,437,050
===================================================================================5.1. These certificates carry expected profit rates ranging from 10% to 19% per annum. The aggregate market value as at June 30, 2003 was Rs. 134.527 million (2002: 95.293 million).5.2. The amount under this head includes Rs. 54.704 million (2002: Rs. 20.000 million) given as collateral against borrowings. 5.3. Particulars of investments in Term Finance Certificates (TFC�s) of listed companies are as follows: ===================================================================================
Name of company Number of certificate Rupees Rupees
NOTE 2003 2002 2003 2002
===================================================================================
Dewan Salman Fibre Limited 212,225 374,570 21,600,748 37,835,248
Pakistan Industrial Leasing
Corporation Limited 5,244 6,994 538,506 713,436
Sigma Leasing Corporation Ltd. - 14,000 - 1,421,309
Atlas Investment Bank Limited 41,633 49,970 4,163,333 4,997,000
Al-Noon Sugar Mills Limited 31,238 43,733 3,123,750 4,373,250
Paramount Leasing Limited 50,000 88,000 5,000,000 8,800,000
Crescent Leasing Corporation Ltd. 49,980 50,000 4,998,000 5,000,000
Union Leasing Limited 99,960 100,000 9,996,000 10,000,000
Saudi Pak Leasing Limited 41,733 41,750 4,173,330 4,175,000
Orix Leasing Company Limited 50,000 50,000 5,000,000 5,000,000
Shahmurad Sugar Mills Limited 99,960 100,000 9,996,000 10,000,000
Maple Leaf Cement Company Limited 199,960 - 19,996,000 -
Security Leasing Corporation Limited 49,985 - 5,260,974 -
Engro Chemicals Limited 43,982 - 4,398,240 -
KASB Leasing Limited 100,000 - 10,000,000 -
Itehad Chemicals Limited 5.4 100,000 - 10,000,000 -
Pacific Leasing Company Limited
5.4 50,000 - 5,000,000 -
123,244,881 92,315,243
Add: Surplus on revaluation of
Add: securities 11,282,027 2,977,435
134,526,908 95,292,678
===================================================================================5.4. These TFC�s were received subsequent to the balance sheet date.5.5. Pakistan Investment Bonds have been issued by the Government of Pakistan and carry profit at rates ranging from 9% to 13% per annum. 5.6. The amount under this head includes Rs. 530.000 million (220.000 million) given as collateral against borrowings. 5.7. The coupon rate of these bonds carry expected rate of profit at 7.25% per annum. 5.8. Particulars of investments in ordinary shares of listed companies are as follows: ===================================================================================
Name of company Number of certificate Rupees Rupees
2003 2002 2003 2002
===================================================================================
Pakistan State Oil Company Ltd. 90,000 20,400 20,539,363 2,851,971
Hub Power Company Limited 625,000 57,000 23,655,515 1,325,250
Adamjee Insurance Company Ltd. 86,000 28,750 5,129,900 1,176,200
Ibrahim Fibers Limited - 125,000 - 2,032,910
Dewan Salman Fiber Limited 200,000 100,000 3,510,000 1,385,000
Pakistan Telecommunication
Company Limited 300,000 385,000 8,550,000 6,619,146
ICI Pakistan Limited 25,000 35,000 1,343,750 1,403,500
Fauji Fertilizers Company Limited 20,000 24,900 1,719,612 1,140,420
Engro Chemicals (Pakistan) Ltd. 47,000 7,500 4,077,250 450,750
Sui Northern Gas Pipelines
Company Limited 400,000 200,000 13,200,000 2,896,740
Nishat Mills Limited 200,000 87,000 7,020,000 1,357,200
D.G. Khan Cement Company Ltd. 400,000 150,000 12,360,000 1,417,500
Bank of Punjab 100,500 100,000 1,934,625 1,140,000
Fauji Jordan Fertilizer
Company Limited 600,000 160,500 8,130,000 1,019,175
National Bank of Pakistan 325,000 136,500 8,965,000 2,818,725
Fauji Cement Limited 50,000 - 423,552 -
PICIC Commercial Bank Limited 350 - 5,431 -
Pak Premier Fund 35,000 - 528,000 -
Pakistan International Airlines 275,000 - 3,465,000 -
Attock Refinery Limited 500 - 47,775 -
Karachi Electricity Supply
Corporation Limited 500,000 - 3,300,000 -
Lucky Cement Limited 30,000 - 541,500 -
Muslim Commercial Bank Limited 51,000 - 1,915,050 -
Maple Leaf Cement 75,000 - 1,218,750 -
Southern Electric Company 135,000 - 2,315,250 -
Sui Southern Gas Pipelines Limited 18,000 - 378,900 -
World Call Limited 75,000 - 1,140,000 -
135,414,221 29,034,487
Less: Deficit on revaluation of
securities at market value (119,706) (615,115)
135,294,515 28,419,372
===================================================================================5.9. This is unsecured and represents investment with non-banking financial institution. The expected rate of return is 11% per annum.6. MORABAHA FINANCING ===================================================================================
NOTE 2003 2002
Rupees Rupees
===================================================================================
Secured
Considered good and performing
Associated company 6.1 20,000,000 20,000,000
Executive 6.1 925,110 467,216
Others 320,459,494 145,153,848
341,384,604 165,621,064
Considered doubtful and non performing
Others 49,742,835 55,560,154
Less: Provisions for doubtful: morabaha
Less financing 6.3 15,473,544 14,167,665
34,269,291 41,392,489
375,653,895 207,013,553
===================================================================================6.1. The maximum balances outstanding at the end of any month during the year were as follows:===================================================================================
2003 2002
Rupees Rupees
===================================================================================
Associated company
Escorts Pakistan Limited 20.000 20.000
Executive 1.641 0.467
===================================================================================6.2. Morabaha financing facilities are secured by hypothecation of or charge on \ assets, mortgage of property, lien over bank deposits and pledge of stocks.The expected rates of return range from 5.25% to 18% per annum. 6.3. PARTICULARS OF PROVISION AGAINST NON-PERFORMING ADVANCES: ===================================================================================
2003 2002
Rupees Rupees
===================================================================================
Opening balance 14,167,665 6,100,000
Charge for the year 1,305,879 8,067,665
Closing balance 15,473,544 14,167,665
===================================================================================7. ADVANCES, DEPOSIS, PREPAYMENTS AND OTHER RECEIVABLES===================================================================================
NOTE 2003 2002
Rupees Rupees
===================================================================================
Advances � considered goods
To staff � considered good
Secured
Executive 7.1 & 7.2 1,354,398 1,402,814
Unsecured
Executives 7.2 1,503,652 1,513,938
Other employees 97,148 73,970
1,600,800 1,587,908
Income Tax 71,164,699 42,386,697
Others 83,859 398,320
71,248,558 42,785,017
74,203,756 45,775,739
Security deposits 1,574,932 1,270,432
Prepayments
Office rent 4,003,955 5,306,420
Others 418,591 622,621
4,422,546 5,929,041
Other receivables (considered good)
Receivables against sale of shares 27,511,450 26,890,637
Accrud markup on investments and
morabaha financing 7.3 20,693,388 24,056,060
Income tax refundable 5,808,854 5,808,854
Others 274,656 3,665
54,288,348 56,759,216
134,489,582 109,734,428
===================================================================================7.1. This is secure against equitable mortgage of property and carries mark-up at 7% per annum.7.2. The maximum amount due from Executive at the end of any month during the year was Rs. 1.398 million (2002: Rs. 3.245 million). 7.3. These include a balance due from an associated company, Escorts Pakistan Limited amounting to Rs. 0.483 million (2002: Rs. 0.759 million). Maximum amount due from the associated company at the end of any month during the year was Rs. 1.026 million (2002: Rs. 0.907 million). 8. MEMBERSHIP CARD ===================================================================================
NOTE 2003 2002
Rupees Rupees
===================================================================================
Corporate membership of Lahore Stock
Exchange (Guarantee) Limited 7,170,000 -
===================================================================================9. TANGIBLE FIXED ASSETS==============================================================================================================================================
(Amount in Rupees)
COST DEPRECIATION WRITTEN
RATE DOWN VALUE
PARTICULARS AS AT ADDITIONS ADJUSTMENT AS AT % AS AT (ADJUSTMENT) For the AS AT AS AT
01-07-2002 (DISPOSAL) 30-06-2003 01-07-2002 Year 30-06-2003 30-06-2003
==============================================================================================================================================
Owned
Improvements on lease
hold premises 3,073,737 1,406,725 - 4,480,462 20 2,041,562 - 487,780 2,529,342 1,951,120
Office furnitures 2,056,717 749,350 - 2,806,067 10 429,296 - 237,677 666,973 2,139,094
Computer equipments 1,642,447 749,797 - 2,392,244 33.33 480,241 - 637,271 1,117,512 1,274,732
Office equipments 1,995,961 71,625 (14,500) 2,053,086 10 677,313 (1,450) 137,722 813,585 1,239,501
Vehicles 6,227,012 2,649,500 (939,620) 7,936,892 20 4,565,800 (302,326) 734,684 4,998,158 2,938,734
14,995,874 5,626,997 (954,120) 19,668,751 8,194,212 (303,776) 2,235,134 10,125,570 9,543,181
Leased
Vehicles 6,873,815 - (675,000) 6,198,815 20 1,947,723 (329,400) 916,098 2,534,421 3,664,394
Capital work in progress
Improvements on lease
hold premises 1,670,300 478,275 (2,148,575) - - - - - -
Total Rupees�2003 23,539,989 6,105,272 (3,777,695) 25,867,566 10,141,935 (633,176) 3,151,232 12,659,991 13,207,575
Total Rupees�2002 15,877,359 8,603,290 (940,660) 23,539,989 8,413,015 (632,425) 2,361,345 10,141,935 13,398,054
==============================================================================================================================================Depreciation on computer equipment has been revised during the year from 10% to 33.33% per annum. If there has been no change in rate the profit for the year and unappropriated profits have been higher by Rs. 0.446 million.9.1. THE FOLLOWING ASSETS WERE DISPOSED OFF DURING THE YEAR: ======================================================================================================================================
PARTICULARS COST ACCUMULATED WRITTEN SALE MODE OF PARTICULARS OF
DEPRECIATION DOWN PROCEEDS DISPOSAL PURCHASER
VALUE
(Rupees) (Rupees) (Rupees) (Rupees)
======================================================================================================================================
Owned asset
Vehicle � Honda Civic 939,620 631,726 307,894 307,894 By negotiation Mr. Muhammad Naeem Khan Chief Operating Officer
Telephone set 14,500 1,450 13,050 3,500 By negotiation Abdul Samad Munir, Authorised Dealer
======================================================================================================================================10. BORROWINGS FROM FINANCIAL INSTITUTIONS===================================================================================
NOTE 2003 2002
Rupees Rupees
===================================================================================
Unsecured
From Banks and Non Banking Financial
Institutions 10.1 150,000,000 20,000,000
Secured
From Banks and Non Banking Financial
Institutions 10.2 627,900,000 290,000,000
777,9000,000 310,000,000
===================================================================================10.1. These borrowings carry markup at rates ranging from approximately 3.75% to 11.00% per annum.10.2. These represent borrowings against repurchase transactions and carry markup at rates ranging from 2.10% to 3.25% per annum. The borrowings are secured against related investments (See note 5). 11. CERTIFICATES OF INVESTMENTS ===================================================================================
2003 2002
Rupees Rupees
===================================================================================
Due within one year 528,638,305 599,453,740
Due after one year 164,029,278 132,127,756
692,667,583 731,581,496
===================================================================================11.1. Certificates of Investment are issued for periods ranging from one month to five and half years. The expected rate of return payable on these Certificates of Investments (COIs) range from approximately 3.90% to 15.00% per annum for Pak rupee COIs.12. SUBORDINATED LOANS This represents unsecured loans from sponsor directors and shareholders. The balances carry markup at the rate of 14.00% per annum and are repayable after the Company has met the minimum capital requirements. 13. LIABILITIES AGAINST ASSETS SUBJECT TO FINANCE LEASES ===================================================================================
2003 2002
Rupees Rupees
===================================================================================
Due with in one year 1,285,748 1,884,281
Due after one year 1,949,633 3,238,438
3,235,381 5,122,719
===================================================================================The above liability represents the unpaid balance of the total of minimum lease payments and the residual value payable at the end of lease period discounted at rates ranging from 16.00% to 22.50% per annum.Remaining aggregate rentals of Rs. 3.578 million inclusive of mark-up are payable in 20 equal monthly installments latest by February 2005. Future lease payments are as follows: =====================================================================================================
2003 Rupees 2002 Rupees
Within More than Within More than
one year one year Total one year One year Total
and upto and upto
five years Five years
=====================================================================================================
Minimum lease payments 1,574,332 2,004,622 3,578,954 2,397,452 3,692,307 6,089,759
Less: Financial charges
allocated to future periods 288,584 54,989 343,573 513,171 453,869 967,040
Present value of minimum
lease payments 1,285,748 1,949,633 3,235,381 1,884,281 3,238,438 5,122,719
=====================================================================================================At the end of lease period, the ownership of assets shall be transferred to the Company on payment of residual value.The cost of operating and maintaining the leased assets is borne by the Company. This liability represents the unpaid balance of the total of minimum lease payments and the residual value payable at the end of lease period discounted at rates ranging from 16.00% to 21.34% per annum. 14. CREDITORS, ACCRUED AND OTHER LIABILITIES ===================================================================================
2003 2002
Rupees Rupees
===================================================================================
Customer credit balances 3,918,179 -
Accrued return on certificates of investment 9,104,203 9,238,527
Accrued mark-up on subordinated loans 966,922 966,922
Accrued mark-up on unsecured borrowings 609,589 972,192
Accrued return on repurchase transactions 1,274,500 2,298,534
Accrued expenses 2,175,073 1,547,071
Unearned fee income 783,432 49,875
18,831,898 15,073,121
===================================================================================15. PROVISION FOR TAXATION15.1. TAX RATE The Company has used income tax rates applicable to listed companies (other than banking companies) in computing the tax liabilities for the assessment years upto 2003-2004. In the initial assessments made by Deputy Commissioner of Income Tax (DCIT), the rate applicable to banking companies had been used for the assessment years 1997-98 to 2000-2001, for which Company had filed appeals with the Commissioner of Income Tax (Appeals). Commissioner of Income Tax (Appeals) directed the DCIT to apply the rates applicable to listed companies for assessment years 1997-98 and 1998-99 against which the department preferred appeals before Income Tax Appellate Tribunal (ITAT). ITAT has rejected these appeals against which Commissioner of Income Tax has filed a reference application before the ITAT, who have referred the case to the Honourable Lahore High Court for their authoritative resolution. The management is confident that the outcome of the case will be in their favour. 15.2. WITHHOLDING TAX In the assessments for the assessment years 1999-2000 and 2000-2001 no disallowances were made by the DCIT on the issue for non-deduction of tax on return on deposits from financial institutions, on the grounds that Company has been assigned the status of a banking company. This treatment, however, is subject to the decision of an appeal filed by the department in the Honourable Lahore High Court against the decision of ITAT on the same issue for previous assessment years (see 15.1 above). The management is of the opinion that these amounts are clean borrowings from the banks/NBFI�s and not deposits and, therefore, withholding tax provisions do not apply. 15.3. PENDING APPEALS Appeals for the assessment years 1999-2000 and 2000-2001 are pending before the Commissioner of Income Tax (Appeals). 16. DIVIDEND ===================================================================================
NOTE 2003 2002
Rupees Rupees
===================================================================================
Unclaimed 45,002 43,368
Proposed 30,000,000 12,000,000
30,045,002 12,043,368
===================================================================================17. DEFERRED TAX LIABILITY===================================================================================
NOTE 2003 2002
Rupees Rupees
===================================================================================
Taxable temporary differences on surplus on revaluation
of securities 20 49,932,547 -
===================================================================================18. SHARE CAPITAL===================================================================================
2003 2002
Rupees Rupees
===================================================================================
20,000,000 ordinary shares of Rs. 10 each fully
paid in Cash 200,000,000 200,000,000
===================================================================================19. RESERVES===================================================================================
2003 2002
Rupees Rupees
===================================================================================
Balance brought forward 11,126,490 8,669,956
Transferred from profit and loss account 11,512,421 2,456,534
Balance carried forward 22,638,911 11,126,490
===================================================================================This represents statutory reserves created in compliance with Rules of Business for NBFI�s Circular No. 1 dated December 05, 1991.20. SURPLUS ON REVALUATION OF SECURITIES ===================================================================================
NOTE 2003 2002
Rupees Rupees
===================================================================================
Government securities 5 131,502,100 16,496,260
Other securities 5 11,282,027 2,977,435
Shares of listed companies 5 (119,706) (615,115)
142,664,421 18,858,580
Less: Related deferred tax liability
Prior year 6,600,503 -
Current year 43,332,044 -
49,932,547 -
92,731,874 18,858,580
===================================================================================21. CONTINGENCIES AND COMMITMENTS21.1. CONTINGENCIES a. Guarantees Outstanding guarantees as on balance sheet date were Rs. 75.561 million (2002: Rs. 22.946 million). b. Taxation In the event of unfavourable decisions in pending tax matters detailed in Note: 15, the Company would be faced with maximum tax liability of Rs. 8.619 (2002: Rs. 10.192 million) and maximum charge against profits in respect of provisions not made amounting to Rs. 27.071 million (2002: Rs. 27.071 million). 21.2. COMMITMENTS ===================================================================================
2003 2002
Rupees Rupees
===================================================================================
Forward sale contracts 50,000,000 250,000,000
Forward purchase contracts - 400,000,000
Capital expenditure - 339,585
===================================================================================22. FEES AND COMMISSION===================================================================================
2003 2002
Rupees Rupees
===================================================================================
Guarantee commission 1,137,894 347,665
Processing fee 218,065 485,605
Consultancy and corporate advisory fee 300,000 -
Brokerage commission 309,380 -
Underwriting commission 112,500 125,000
Gain on sale of fixed assets - 191,765
2,077,839 1,150,035
===================================================================================23. ADMINISTRATIVE AND OTHER OPERATING EXPENSES===================================================================================
2003 2002
Rupees Rupees
===================================================================================
Salaries, wages, other benefits and allowances 20,504,782 16,038,987
Advertisement and business promotion 1,019,381 982,484
Rent, rates and taxes 3,874,375 2,951,311
Travelling and subsistence 1,316,404 1,324,801
Utilities 1,593,660 1,423,914
Auditors remuneration
Audit fee 125,000 75,000
Review of half yearly accounts 35,000 -
Audit fee of Provident Fund Trust 8,000 -
Certification and consultancy charges 170,000 -
Out of pocket expenses 16,362 32,830
354,362 107,830
Telephone charges 1,255,723 1,273,692
Vehicle running and maintenance 1,436,590 937,713
Entertainment 761,286 465,789
Printing and stationery 599,870 439,775
Brokerage and commission 3,040,856 517,859
Insurance premium 688,156 430,750
Repair and maintenance � office 1,435,366 617,376
Repair and maintenance � equipment 93,627 133,429
Fee and subscription 1,128,564 305,300
Legal and professional charges 1,371,635 1,171,714
Books and periodicals 58,639 50,976
Postage and courier service 139,022 111,850
Terminal activation and services charges 115,287 -
Depreciation (Note: 9) 3,151,233 2,361,345
Penalty paid to State Bank of Pakistan 486,500 -
Loss on sale of fixed assets 9,550 -
Amortization of premium on TFCs 21,309 -
Miscellaneous expenses 79,647 83,725
44,535,824 31,730,620
===================================================================================This includes Company�s contribution to provident fund amounting to Rs. 0.911 million (2002: Rs. 0.623 million).24. FINANCIAL CHARGES ===================================================================================
2003 2002
Rupees Rupees
===================================================================================
Mark-up on finance leases 600,544 472,084
Exchange loss - 21,829
Bank and other charges 99,286 213,662
699,830 707,575
===================================================================================25. NUMERICAL RECONCILIATION BETWEEN THE AVERAGE EFFECTIVE TAX RATE AND THE APPLICABLE TAX RATE===================================================================================
2003 2002
Rupees Rupees
===================================================================================
Applicable tax rate 35.00 35.00
Tax effect of amounts that are:
(Taxable)/not deduction for tax purposes (0.53) 13.24
Chargeable to tax at lower rates (0.31) (0.24)
Effect of exempt income (14.04) (11.70)
(14.88) 1.30
Average effective tax rate charged to Profit and
loss account 20.12 36.30
===================================================================================26. EARNINGS PER SHARE � BASIC AND DIALUTED===================================================================================
2003 2002
Rupees Rupees
===================================================================================
Profit for the year after taxation 57,562,107 12,282,670
Number of shares
Average issued ordinary shares 20,000,000 20,000,000
Rupees
Earnings per share 2.878 0.614
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