table of contents - sindh leasing company ltd. · 2017. 11. 6. · muhammad nadeem khan suite #...

Quarterly Report March 2016Quarterly Report March 2016

Table of Contents

Directors’ Report

Corporate Information

Balance Sheet

Profit and Loss Account

Cash Flow Statement

Statement of Changes in Equity

Notes to the Financial Information

Statement of Comprehensive Income

Vision & Mission Statements

Board of Directors

- Non-Executive Director

- Independent Non-Executive Director

Company Secretary

Mr. Rehan Anjum

Audit Committee

Syed Shahnawaz Nadir Shah Imran MalikSyed Saeed Reza - Chairman

- Member - Member

Banker

Sindh Bank Limited

Mr. Imran MalikMr. Bilal SheikhMr. Sohail Khan Rajpot

Chairman - Non-Executive Director-

Chief Executive-

Auditors

BDO Ebrahim & Co.Chartered Accountants2nd Floor, Block C Lakson Square Building-1Sarwar Shaheed Road Karachi.

Legal Advisor

Muhammad Nadeem Khan Suite # 28-A, 2nd FloorFareed Chamber Abdullah Haroon Road Karachi

Bank Islami Pakistan Limited

Mr. Muhammad Bilal Sheikh

Mr. Sohail Khan Rajput

Syed Shahnawaz Nadir Shah

Syed Saeed Reza

Mr. Muhammad Imran Malik

Mr. Ali Murtaza Kazmi

Mr. Naim Farooqui

Mr. Rehan Anjum

Human Resource Committee

- Chairman - Member - Member

United Bank Limited

Registered Office

Third Floor, Imperial Court Building

Dr. Ziauddin Ahmed Road, Karachi

Branch Offices

Larkana / Naudero BranchRaza Shah Mohallah, VIP RoadLarkana

Hyderabad Branch

Web: www.sindhleasingltd.com

Plot No. 11Faraz Villas Housing SchemeTaluka QasimabadHyderabad

Rawalpindi BranchFirst Floor,K-583, Chaudary Maula dad Khan RoadMurree RoadRawalpindi Lahore BranchSecond Floor,Plot No.S-19 R-30Sharah-e-Quaid-e-AzamLahore

Directors’ Report

On behalf of the Board of Directors of Sindh Leasing Company Limited, I am pleased to present the Directors' review along with the unaudited condensed interim financial information for the nine months period ended March 31, 2016.

Operating Results and Business overview

The Company earned net revenue of Rs. 83.88 million during the nine months period under review as against a budgeted net revenue of Rs 75.04 million. Total administrative expenses for the period amounted to Rs 43.89 million versus a budgeted amount of Rs 42.41 million. The company recorded an after tax profit of Rs 23.57 million as against a budgeted after tax profit of Rs 18.62 million.

The after tax profit for the period under review is lesser than the comparative period by Rs.5.45 million this is primarily due to the addition of general provision for potential lease losses which was not present in the corresponding period. Moreover setting up of two branches in the North region has further increased administrative expenses. Revenue nevertheless has increased despite a fall in KIBOR by SBP, this showcases execution of sound marketing strategy and growth in good portfolio.

Pakistan is experiencing an economic growth due to the current macroeconomic stability and improved law and order situation, particularly in Karachi. Moreover China Pakistan Economic Corridor related investments bode well for the future prospects for foreign direct investments. It is the decline in export receipts that is worrisome. General weakness in global trade further accentuates this risk.

Hence, the current improved domestic environment provides for the necessary conditions to develop products by bringing in value addition and diversify markets for sustainable growth of exports. In these conditions we can expect opportunities for off take of loan by the private sector and developing/deepening of relations with them.

JCR-VIS Credit Rating Company Limited has rated the Company for long-term as ‘A’ (Single A), and for short term ‘A-2’ (A minus two). Outlook on the assigned rating is 'Stable'.

On behalf of the Board of Directors’ of SLCL, we are obliged to express our thanks to our customers for having shown confidence in us. Our appreciation cannot be complete without acknowledging the absolute support forwarded to us by the Government of Sindh. SECP’s support and guidance has always been available when required.

The Board also wishes to place on record its appreciation for the hard work and dedication shown by the staff during these extra ordinary circumstances.

Rehan Anjum Chief Executive

April 26, 2016

Future Outlook

Credit Rating

Acknowledgements

Balance SheetMarch 31,

2016June 30,

------------- (PKR Million)----------------Paid-up capital 1,000.00 1,000.00Total equity 1,083.31 1,059.75Fixed assets 28.90 32.37Net investment in Finance lease 855.18 444.18Working Capital loan and others 222.12 3.88

Profit & Loss

July 01, 2015to

March 31, 2016

July 01, 2014to

March 31, 2015

Revenue –Net 83.88 76.92Administrative expenses 43.89 33.51Provisions 5.83 -Profit before tax 34.15 43.41Profit after tax 23.57 29.02

Board of Directors

- Non-Executive Director

- Independent Non-Executive Director

Company Secretary

Mr. Rehan Anjum

Audit Committee

Syed Shahnawaz Nadir Shah Imran MalikSyed Saeed Reza - Chairman

- Member - Member

Banker

Sindh Bank Limited

Mr. Imran MalikMr. Bilal SheikhMr. Sohail Khan Rajpot

Chairman - Non-Executive Director-

Chief Executive-

Auditors

BDO Ebrahim & Co.Chartered Accountants2nd Floor, Block C Lakson Square Building-1Sarwar Shaheed Road Karachi.

Legal Advisor

Muhammad Nadeem Khan Suite # 28-A, 2nd FloorFareed Chamber Abdullah Haroon Road Karachi

Bank Islami Pakistan Limited

Mr. Muhammad Bilal Sheikh

Mr. Sohail Khan Rajput

Syed Shahnawaz Nadir Shah

Syed Saeed Reza

Mr. Muhammad Imran Malik

Mr. Ali Murtaza Kazmi

Mr. Naim Farooqui

Mr. Rehan Anjum

Human Resource Committee

- Chairman - Member - Member

United Bank Limited

Registered Office

Third Floor, Imperial Court Building

Dr. Ziauddin Ahmed Road, Karachi

Branch Offices

Larkana / Naudero BranchRaza Shah Mohallah, VIP RoadLarkana

Hyderabad Branch

Web: www.sindhleasingltd.com

Plot No. 11Faraz Villas Housing SchemeTaluka QasimabadHyderabad

Rawalpindi BranchFirst Floor,K-583, Chaudary Maula dad Khan RoadMurree RoadRawalpindi Lahore BranchSecond Floor,Plot No.S-19 R-30Sharah-e-Quaid-e-AzamLahore

Directors’ Report

On behalf of the Board of Directors of Sindh Leasing Company Limited, I am pleased to present the Directors' review along with the unaudited condensed interim financial information for the nine months period ended March 31, 2016.

Operating Results and Business overview

The Company earned net revenue of Rs. 83.88 million during the nine months period under review as against a budgeted net revenue of Rs 75.04 million. Total administrative expenses for the period amounted to Rs 43.89 million versus a budgeted amount of Rs 42.41 million. The company recorded an after tax profit of Rs 23.57 million as against a budgeted after tax profit of Rs 18.62 million.

The after tax profit for the period under review is lesser than the comparative period by Rs.5.45 million this is primarily due to the addition of general provision for potential lease losses which was not present in the corresponding period. Moreover setting up of two branches in the North region has further increased administrative expenses. Revenue nevertheless has increased despite a fall in KIBOR by SBP, this showcases execution of sound marketing strategy and growth in good portfolio.

Pakistan is experiencing an economic growth due to the current macroeconomic stability and improved law and order situation, particularly in Karachi. Moreover China Pakistan Economic Corridor related investments bode well for the future prospects for foreign direct investments. It is the decline in export receipts that is worrisome. General weakness in global trade further accentuates this risk.

Hence, the current improved domestic environment provides for the necessary conditions to develop products by bringing in value addition and diversify markets for sustainable growth of exports. In these conditions we can expect opportunities for off take of loan by the private sector and developing/deepening of relations with them.

JCR-VIS Credit Rating Company Limited has rated the Company for long-term as ‘A’ (Single A), and for short term ‘A-2’ (A minus two). Outlook on the assigned rating is 'Stable'.

On behalf of the Board of Directors’ of SLCL, we are obliged to express our thanks to our customers for having shown confidence in us. Our appreciation cannot be complete without acknowledging the absolute support forwarded to us by the Government of Sindh. SECP’s support and guidance has always been available when required.

The Board also wishes to place on record its appreciation for the hard work and dedication shown by the staff during these extra ordinary circumstances.

Rehan Anjum Chief Executive

April 26, 2016

Future Outlook

Credit Rating

Acknowledgements

Balance SheetMarch 31,

2016June 30,

------------- (PKR Million)----------------Paid-up capital 1,000.00 1,000.00Total equity 1,083.31 1,059.75Fixed assets 28.90 32.37Net investment in Finance lease 855.18 444.18Working Capital loan and others 222.12 3.88

Profit & Loss

July 01, 2015to

March 31, 2016

July 01, 2014to

March 31, 2015

Revenue –Net 83.88 76.92Administrative expenses 43.89 33.51Provisions 5.83 -Profit before tax 34.15 43.41Profit after tax 23.57 29.02

Condensed Interim Balance Sheet (Un-audited)As at March 31, 2016

The annexed notes 1 to 11 form an integral part of these condensed interim financial information.

___________ ___________________Chairman Chief Executive

March 31 June 302016 2015

(Un-audited) (Audited)

Note ---------------------Rupees----------------------ASSETS

Non-current assets

Property and equipment 27,870,608 32,369,754

Intangible Assets 1,034,737 611,003

Net investment in finance leases 4 677,005,256 357,053,069

Long term loans and deposits 25,675,221 13,805,819

731,585,822 403,839,645

Current assets

Short term investment 5 309,771,732 347,669,705

Accrued Mark up 317,808 3,270,961

Current maturity of non-current assets 6 180,060,470 85,698,795

Working Capital Loan, Advances and prepayments 195,600,147 3,887,259

Taxation - Net - 5,686,994

Cash and bank balances 84,664,842 392,385,487

770,414,999 838,599,201

Total assets 1,502,000,821 1,242,438,846

EQUITY AND LIABILITIES

Share capital and reserves

Authorized share capital 1,000,000,000 1,000,000,000

Issued, subscribed and paid-up share capital 1,000,000,000 1,000,000,000

Reserves 83,314,626 59,748,636

Total equity 1,083,314,626 1,059,748,636

LIABILITIES

Non-current liabilities

Long term security deposits against leases 7 139,236,217 70,250,138

Long term Placement - Government of Sindh 250,000,000 -

Deferred Tax & other liabilities 7,481,991 6,124,085

396,718,208 76,374,223

Current liabilities

Trade & other payables 9,150,817 10,506,040

Advance against lease 6,628,128 -

Mark up accrued on borrowings 6,189,042 809,947

Short term borrowings - 95,000,000

21,967,987 106,315,987

Total liabilities 418,686,195 182,690,210

Total equity and liabilities 1,502,000,821 1,242,438,846

Condensed Interim Profit and Loss Account (Un-audited)

For the nine months period ended March 31, 2016

2016 2015 2016 2015

INCOME

Income from operationsIncome from finance leases 55,442,922 11,221,704 21,122,796 5,584,689

Income from Auto & Working Capital Loan 5,346,039 - 4,237,980 -

60,788,961 11,221,704 25,360,776 5,584,689

Income from other operating activities

Return earned on investment and deposit 29,430,518 65,562,394 8,207,473 18,128,778

Other income 107,599 135,987 16,500 78,85829,538,117 65,698,381 8,223,973 18,207,636

TOTAL INCOME 90,327,078 76,920,085 33,584,749 23,792,325

EXPENSES

Finance Cost 6,452,392 - 4,703,172 -

Administrative expenses 9 43,888,459 33,508,324 13,354,569 12,259,425

5,832,618 - 3,314,205 -

56,173,469 33,508,324 21,371,946 12,259,425

Profit before Taxation 34,153,609 43,411,761 12,212,803 11,532,900

Taxation 10,587,619 14,388,899 4,166,716 3,868,225

Profit after taxation 23,565,990 29,022,862 8,046,087 7,664,675

Earning per share - basic and diluted 0.24 0.29 0.08 0.08

---------------------------------------Rupees----------------------------------

Nine Months Period Ended 31 March

Three Months Period Ended 31 March

Provision for WWF & Potential Lease Losses

CONTINGENCIES AND COMMITMENTS 8

Condensed Interim Balance Sheet (Un-audited)As at March 31, 2016

March 31 June 302016 2015

(Un-audited) (Audited)

Note ---------------------Rupees----------------------ASSETS

Non-current assets

Property and equipment 27,870,608 32,369,754

Intangible Assets 1,034,737 611,003

Net investment in finance leases 4 677,005,256 357,053,069

Long term loans and deposits 25,675,221 13,805,819

731,585,822 403,839,645

Current assets

Short term investment 5 309,771,732 347,669,705

Accrued Mark up 317,808 3,270,961

Current maturity of non-current assets 6 180,060,470 85,698,795

Working Capital Loan, Advances and prepayments 195,600,147 3,887,259

Taxation - Net - 5,686,994

Cash and bank balances 84,664,842 392,385,487

770,414,999 838,599,201

Total assets 1,502,000,821 1,242,438,846

EQUITY AND LIABILITIES

Share capital and reserves

Authorized share capital 1,000,000,000 1,000,000,000

Issued, subscribed and paid-up share capital 1,000,000,000 1,000,000,000

Reserves 83,314,626 59,748,636

Total equity 1,083,314,626 1,059,748,636

LIABILITIES

Non-current liabilities

Long term security deposits against leases 7 139,236,217 70,250,138

Long term Placement - Government of Sindh 250,000,000 -

Deferred Tax & other liabilities 7,481,991 6,124,085

396,718,208 76,374,223

Current liabilities

Trade & other payables 9,150,817 10,506,040

Advance against lease 6,628,128 -

Mark up accrued on borrowings 6,189,042 809,947

Short term borrowings - 95,000,000

21,967,987 106,315,987

Total liabilities 418,686,195 182,690,210

Total equity and liabilities 1,502,000,821 1,242,438,846

Condensed Interim Profit and Loss Account (Un-audited)

2016 2015 2016 2015

INCOME

Income from operationsIncome from finance leases 55,442,922 11,221,704 21,122,796 5,584,689

Income from Auto & Working Capital Loan 5,346,039 - 4,237,980 -

60,788,961 11,221,704 25,360,776 5,584,689

Income from other operating activities

Return earned on investment and deposit 29,430,518 65,562,394 8,207,473 18,128,778

Other income 107,599 135,987 16,500 78,85829,538,117 65,698,381 8,223,973 18,207,636

TOTAL INCOME 90,327,078 76,920,085 33,584,749 23,792,325

EXPENSES

Finance Cost 6,452,392 - 4,703,172 -

Administrative expenses 9 43,888,459 33,508,324 13,354,569 12,259,425

5,832,618 - 3,314,205 -

56,173,469 33,508,324 21,371,946 12,259,425

Profit before Taxation 34,153,609 43,411,761 12,212,803 11,532,900

Taxation 10,587,619 14,388,899 4,166,716 3,868,225

Earning per share - basic and diluted 0.24 0.29 0.08 0.08

---------------------------------------Rupees----------------------------------

Provision for WWF & Potential Lease Losses

CONTINGENCIES AND COMMITMENTS 8

Condensed Interim Statement of Comprehensive Income (Un-audited)

2016 2015 2016 2015

Other comprehensive income - - - -

Total comprehensive income for the period 23,565,990 29,022,862 2,207,803 7,664,675

--------------------------------------Rupees--------------------------------------

Condensed Interim Cash Flow Statement (Un-audited)

2016 2015

------------------------Rupees--------------------------

CASH FLOW FROM OPERATING ACTIVITIES

Profit before taxation 34,153,609 43,411,761Adjustment for:- Depreciation & amortization 5,818,527 3,900,742- Provision for potential lease loss 5,832,618 -- Finance Cost 6,189,042 -- Unrealised Gain on Investments & loans (12,291,455) -- Provision for Provident, Gratuity fund & Bonus 4,629,946 -

10,178,678 3,900,742Operating profit before working capital changes 44,332,287 47,312,503

Movement in working Capital(Increase) / decrease in operating assets- Advances, prepayments and working capital loan (191,712,888) 940,240- Accrued mark up 2,953,153 692,503- Net investment in lease finances (414,809,474) (196,341,042)- Stamp papers in hand (619,270) 16,830- Long term loan to staff, autos & deposits (11,373,790) (6,865,857)

Increase / (decrease) in operating liabilities- Accrued and other liabilities 4,023,872 (12,851,796)- Advance against lease 6,628,128 -- Short term borrowings (95,000,000) -- Long term security deposits against leases 68,986,079 43,571,500

(630,924,190) (170,837,622)Cash generated from operations (586,591,903) (123,525,119)

Finance paid (2,688,859) -

Taxes paid (5,607,033) (11,870,758)(8,295,892) (11,870,758)

Net cash generated/ (utilised) from operating activities (594,887,795) (135,395,877)

CASH FLOW FROM INVESTING ACTIVITIESShort term investments (799,440,769) 700,000,000Proceeds against sale of investments 838,351,033 -Acquisitions of fixed and intangible asset (1,743,114) (3,529,827)Net cash generated / (utilised) from investing activities 37,167,150 696,470,173

CASH FLOW FROM FINANCING ACTIVITIESProceeds against fund received - Government of Sindh 250,000,000 -Net cash generated from financing activities 250,000,000 -

Net increase / (decrease) in cash and cash equivalents (307,720,645) 561,074,296

Cash and cash equivalent at the beginning of the period 392,385,487 82,012,465Cash and cash equivalent at the end of the period 84,664,842 643,086,761

Condensed Interim Statement of Comprehensive Income (Un-audited)

2016 2015 2016 2015

Other comprehensive income - - - -

Total comprehensive income for the period 23,565,990 29,022,862 2,207,803 7,664,675

--------------------------------------Rupees--------------------------------------

Condensed Interim Cash Flow Statement (Un-audited)

2016 2015

------------------------Rupees--------------------------

CASH FLOW FROM OPERATING ACTIVITIES

Profit before taxation 34,153,609 43,411,761Adjustment for:- Depreciation & amortization 5,818,527 3,900,742- Provision for potential lease loss 5,832,618 -- Finance Cost 6,189,042 -- Unrealised Gain on Investments & loans (12,291,455) -- Provision for Provident, Gratuity fund & Bonus 4,629,946 -

10,178,678 3,900,742Operating profit before working capital changes 44,332,287 47,312,503

Movement in working Capital(Increase) / decrease in operating assets- Advances, prepayments and working capital loan (191,712,888) 940,240- Accrued mark up 2,953,153 692,503- Net investment in lease finances (414,809,474) (196,341,042)- Stamp papers in hand (619,270) 16,830- Long term loan to staff, autos & deposits (11,373,790) (6,865,857)

Increase / (decrease) in operating liabilities- Accrued and other liabilities 4,023,872 (12,851,796)- Advance against lease 6,628,128 -- Short term borrowings (95,000,000) -- Long term security deposits against leases 68,986,079 43,571,500

(630,924,190) (170,837,622)Cash generated from operations (586,591,903) (123,525,119)

Finance paid (2,688,859) -

Taxes paid (5,607,033) (11,870,758)(8,295,892) (11,870,758)

Net cash generated/ (utilised) from operating activities (594,887,795) (135,395,877)

CASH FLOW FROM INVESTING ACTIVITIESShort term investments (799,440,769) 700,000,000Proceeds against sale of investments 838,351,033 -Acquisitions of fixed and intangible asset (1,743,114) (3,529,827)Net cash generated / (utilised) from investing activities 37,167,150 696,470,173

CASH FLOW FROM FINANCING ACTIVITIESProceeds against fund received - Government of Sindh 250,000,000 -Net cash generated from financing activities 250,000,000 -

Net increase / (decrease) in cash and cash equivalents (307,720,645) 561,074,296

Cash and cash equivalent at the beginning of the period 392,385,487 82,012,465Cash and cash equivalent at the end of the period 84,664,842 643,086,761

Condensed Interim Statement Of Changes In Equity (Un-audited)

For the nine months and quarter ended March 31, 2016

Issued,

subscribed and

paid-up capital

appropriated

profit

Shareholders

Equity

Balance as at June 30, 2014 1,000,000,000 5,407,992 21,631,967 1,027,039,959

Total comprehensive income

for the period:

Profit for the period ended

March 31, 2015 - - 29,022,862 29,022,862

Total Comprehensive Income for

the period - - - -

29,022,862 29,022,862

Transfer to statutory revserve - 5,804,572 (5,804,572) -

Balance as at March 31, 2015 1,000,000,000 11,212,564 44,850,257 1,056,062,821

for the period:

March 31, 2016- - 23,565,990 23,565,990

Other comprehensive Income for

the period- - - -

- - 23,565,990 23,565,990

Transferred to statutory reserve - 11,782,995 (11,782,995) -

Balance as at March 31, 20161,000,000,000 33,545,325 49,769,301 1,083,314,626

Reserves

Statutory

reserve

----------------------------------------------------- Rupees ---------------------------------------------------

Notes to the Condensed Interim Financial Information (Un-audited)For the nine months period ended March 31, 2016

1. STATUS AND NATURE OF BUSINESS

2. BASIS OF PREPARATION

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Sindh Leasing Company Limited (the Company) was incorporated in Pakistan on December 16, 2013 as an unlisted public Company under the Companies Ordinance, 1984. The Company was granted licence on March 27, 2014 to carry out leasing business as a Non-Banking Finance Company (NBFC) under the Non-Banking Finance Companies (Established and Regulations) Rules, 2003. The registered office of the Company is situated at 3rd Floor, Imperial court building, Dr. Ziauddin Ahmad Road, Karachi.

2.1 Statement of Compliance

These condensed interim financial information have been prepared in accordance with approved accounting standards as applicable in Pakistan. Approved accounting standards comprise of such International Financial Reporting Standards (IFRS) issued by the International Accounting Standard Board as are notified under the Companies Ordinance, 1984, provisions of and directives issued under the Companies Ordinance, 1984, and Non-Banking Finance Companies and Notifies Entities Regulations, 2008 (NBFC Regulations). Incase requirements differ, provision or directives of the Companies Ordinance, 1984, and Non Banking Finance Companies and Notified Entities Regualtions, 2008 shall prevail.

2.2 Basis of Measurement

These condensed interim financial information have been prepared under the historical cost convention.

2.3 Functional and Presentation Currency

These condensed interim financial information are presented in Pak Rupees, which is the functional and presentation currency of the company and have been rounded to the nearest rupee.

The accounting policies adopted in the preparation of these condensed interim financial information are the same as those applied in the preparation of the annual audited financial statements of the Company for the year ended June 30, 2015.

March 31, 2016 June 30, 2015 4 NET INVESTMENT IN LEASE FINANCES

Lease rentals receivable 871,563,514 465,589,270

Add: Residual value of leased assets 139,236,217 70,250,138

Gross investment in finance leases 1,010,799,731 535,839,408

Less: Unearned finance lease income (146,409,183) (91,653,385)

Net investment in finance lease 864,390,548 444,186,023

Less: Current maturity of net investment in finance leases 6 (178,184,241) (83,326,954)

Less: Provision for potential lease losses (9,201,051) (3,806,000)

677,005,256 357,053,069

----------------Rupees---------------------

5 SHORT TERM INVESTMENT

Held to Maturity

- Certificate of Investment (COI) - 100,000,000

- Term deposit reciepts5.1 JS Bank Limited 100,000,000 100,000,000

100,000,000 200,000,000

5.2 209,771,732 147,669,705

309,771,732 347,669,705

At fair value through Profit and loss units of open ended mutual funds

Condensed Interim Statement Of Changes In Equity (Un-audited)

For the nine months and quarter ended March 31, 2016

Issued,

subscribed and

paid-up capital

appropriated

profit

Shareholders

Equity

for the period:

March 31, 2015 - - 29,022,862 29,022,862

Total Comprehensive Income for

the period - - - -

29,022,862 29,022,862

Transfer to statutory revserve - 5,804,572 (5,804,572) -

Balance as at March 31, 2015 1,000,000,000 11,212,564 44,850,257 1,056,062,821

for the period:

March 31, 2016- - 23,565,990 23,565,990

Other comprehensive Income for

the period- - - -

- - 23,565,990 23,565,990

Transferred to statutory reserve - 11,782,995 (11,782,995) -

Balance as at March 31, 20161,000,000,000 33,545,325 49,769,301 1,083,314,626

Reserves

Statutory

reserve

----------------------------------------------------- Rupees ---------------------------------------------------

Notes to the Condensed Interim Financial Information (Un-audited)For the nine months period ended March 31, 2016

1. STATUS AND NATURE OF BUSINESS

2. BASIS OF PREPARATION

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Sindh Leasing Company Limited (the Company) was incorporated in Pakistan on December 16, 2013 as an unlisted public Company under the Companies Ordinance, 1984. The Company was granted licence on March 27, 2014 to carry out leasing business as a Non-Banking Finance Company (NBFC) under the Non-Banking Finance Companies (Established and Regulations) Rules, 2003. The registered office of the Company is situated at 3rd Floor, Imperial court building, Dr. Ziauddin Ahmad Road, Karachi.

2.1 Statement of Compliance

These condensed interim financial information have been prepared in accordance with approved accounting standards as applicable in Pakistan. Approved accounting standards comprise of such International Financial Reporting Standards (IFRS) issued by the International Accounting Standard Board as are notified under the Companies Ordinance, 1984, provisions of and directives issued under the Companies Ordinance, 1984, and Non-Banking Finance Companies and Notifies Entities Regulations, 2008 (NBFC Regulations). Incase requirements differ, provision or directives of the Companies Ordinance, 1984, and Non Banking Finance Companies and Notified Entities Regualtions, 2008 shall prevail.

2.2 Basis of Measurement

These condensed interim financial information have been prepared under the historical cost convention.

2.3 Functional and Presentation Currency

These condensed interim financial information are presented in Pak Rupees, which is the functional and presentation currency of the company and have been rounded to the nearest rupee.

The accounting policies adopted in the preparation of these condensed interim financial information are the same as those applied in the preparation of the annual audited financial statements of the Company for the year ended June 30, 2015.

March 31, 2016 June 30, 2015 4 NET INVESTMENT IN LEASE FINANCES

Lease rentals receivable 871,563,514 465,589,270

Add: Residual value of leased assets 139,236,217 70,250,138

Gross investment in finance leases 1,010,799,731 535,839,408

Less: Unearned finance lease income (146,409,183) (91,653,385)

Net investment in finance lease 864,390,548 444,186,023

Less: Current maturity of net investment in finance leases 6 (178,184,241) (83,326,954)

Less: Provision for potential lease losses (9,201,051) (3,806,000)

677,005,256 357,053,069

----------------Rupees---------------------

5 SHORT TERM INVESTMENT

Held to Maturity

- Certificate of Investment (COI) - 100,000,000

- Term deposit reciepts5.1 JS Bank Limited 100,000,000 100,000,000

100,000,000 200,000,000

5.2 209,771,732 147,669,705

309,771,732 347,669,705

At fair value through Profit and loss units of open ended mutual funds

Notes to the Condensed Interim Financial Information (Un-audited)For the six months period ended December 2015 31,

5.1 This represents a Term Deposit Receipt for a period of three months having a maturity date of June 16, 2016 @ 7.25%.

6 CURRENT MATURITY OF NON CURRENT ASSETS

178,184,241 83,326,954

1,876,229 2,371,841

180,060,470 85,698,795

Net investment in finance leases

Long term loans and advances

7 LONG TERM SECURITY DEPOSIT AGAINST LEASE 139,236,217 70,250,138

March 31, 2016 June 30, 2015

----------------Rupees---------------------

These represent deposits received from lessee against finance lease and are adjustable against the residual value of the asset leased at the expiry of respective lease term.

Contingencies

A letters of comfort issued on behalf of the client for opening letter of credit amounting to Rs 42.35 million against lease disbursement.

Commitments

Finance lease contracts committed but not executed at the balance sheet date amounted to Rs. 340 million.

8 CONTINGENCIES AND COMMITMENTS

5.2 Units of Open ended Mutual Funds

Mutual Funds Number of

March 31, 2016

June 30, 2015

March 31, 2016

June 30, 2015

March 31, 2016

June 30, 2015

NIT- Government Bond Fund 9,649,059) - 109,059,636 - 97,669,705 - (11,389,931)

ABL- Government Securities Fund B

NIL (June 2015:

4,983,852) - 50,000,000 - 50,000,000 - -

NAFA - Income Opportunity Fund

18,508,998

(June 2015:

Nil) 204,994,860 - 209, 771,732 - -159,059,636 209,771,732 147,669,705 (11,389,931)

----------------------------------------------------(Rupees)----------------------------------------------------

Cost Net Asset Value (NAV) Surplus / (deficit)

4,776,9724,776,972

NIL (June 2015:

204,994,860

2016 2015

9 ADMINISTRATIVE AND OPERATING EXPENSES

Salaries and Benefits 25,593,126 19,822,280

Conveyance & Travelling 621,692 1,852,335

Insurance Expenses 1,230,405 647,853

Repair and maintenance 903,394 820,354

Depreciation & Amortization 5,818,527 3,900,742

Postage and Communication Expense 592,168 280,420

Advertising, Printing and stationary 493,357 557,472

Directors' meeting fees 640,000 360,000

Legal, subscription & professional charges 1,379,146 954,909

Rents, rates, electricity and taxes 5,073,649 3,310,230

Auditors Remuneration 670,917 115,500

Security expenses 454,812 512,787

Other operating expenses 417,266 373,442

43,888,459 33,508,324

------------------Rupees------------------

10 RELATED PARTY TRANSACTIONS

The Company has a related party relationship with its Associated Company, staff retirement funds and key management personnel.

The details of significant related party transactions and balances as at March 31, 2016 are as follows:

Associated

Company

related party

management

personnel

Directors

TRANSACTIONS DURING THE PERIOD

Profit on Daily product account 5,446,954 - -

Remuneration paid - - 13,951,203 -

Retirement benefits - - 1,479,946 -

Directors' meeting fees - - - 480,000

Rent Paid to Sindh Bank Ltd. 1,800,000 - - -

Transactions with Sindh Insurance Co. Ltd. - 1,578,080 - -

--------For the nine months period ended March 31, 2016 ---------

Profit on Term Deposit Receipt account 44,630,136

----------For the nine months period ended March 31, 2015 ---------

March 31

5.1 This represents a Term Deposit Receipt for a period of three months having a maturity date of June 16, 2016 @ 7.25%.

6 CURRENT MATURITY OF NON CURRENT ASSETS

178,184,241 83,326,954

1,876,229 2,371,841

180,060,470 85,698,795

Net investment in finance leases

Long term loans and advances

7 LONG TERM SECURITY DEPOSIT AGAINST LEASE 139,236,217 70,250,138

March 31, 2016 June 30, 2015

----------------Rupees---------------------

These represent deposits received from lessee against finance lease and are adjustable against the residual value of the asset leased at the expiry of respective lease term.

Contingencies

A letters of comfort issued on behalf of the client for opening letter of credit amounting to Rs 42.35 million against lease disbursement.

Commitments

Finance lease contracts committed but not executed at the balance sheet date amounted to Rs. 340 million.

8 CONTINGENCIES AND COMMITMENTS

5.2 Units of Open ended Mutual Funds

Mutual Funds Number of

March 31, 2016

June 30, 2015

March 31, 2016

June 30, 2015

March 31, 2016

June 30, 2015

NIT- Government Bond Fund 9,649,059) - 109,059,636 - 97,669,705 - (11,389,931)

ABL- Government Securities Fund B

NIL (June 2015:

4,983,852) - 50,000,000 - 50,000,000 - -

NAFA - Income Opportunity Fund

18,508,998

(June 2015:

Nil) 204,994,860 - 209, 771,732 - -159,059,636 209,771,732 147,669,705 (11,389,931)

----------------------------------------------------(Rupees)----------------------------------------------------

Cost Net Asset Value (NAV) Surplus / (deficit)

4,776,9724,776,972

NIL (June 2015:

204,994,860

2016 2015

9 ADMINISTRATIVE AND OPERATING EXPENSES

Salaries and Benefits 25,593,126 19,822,280

Conveyance & Travelling 621,692 1,852,335

Insurance Expenses 1,230,405 647,853

Repair and maintenance 903,394 820,354

Depreciation & Amortization 5,818,527 3,900,742

Postage and Communication Expense 592,168 280,420

Advertising, Printing and stationary 493,357 557,472

Directors' meeting fees 640,000 360,000

Legal, subscription & professional charges 1,379,146 954,909

Rents, rates, electricity and taxes 5,073,649 3,310,230

Auditors Remuneration 670,917 115,500

Security expenses 454,812 512,787

Other operating expenses 417,266 373,442

43,888,459 33,508,324

------------------Rupees------------------

10 RELATED PARTY TRANSACTIONS

The Company has a related party relationship with its Associated Company, staff retirement funds and key management personnel.

The details of significant related party transactions and balances as at March 31, 2016 are as follows:

Associated

Company

related party

management

personnel

Directors

Rent Paid to Sindh Bank Ltd. 1,800,000 - - -

Transactions with Sindh Insurance Co. Ltd. - 1,578,080 - -

--------For the nine months period ended March 31, 2016 ---------

Profit on Term Deposit Receipt account 44,630,136

----------For the nine months period ended March 31, 2015 ---------

March 31

Associated

Company

related party

management

personnel

Directors

BALANCES

Daily product account 82,428,648 - - -

Fund Placed by Govt. of Sindh - 250,000,000 - -

Loan to employees - - 14,545,462 -

BALANCES

Daily product account 391,489,464 - - -

---------------------------------As at June 30, 2015 --------------------------------

------------------------------ As at March 31, 2016 -----------------------------

11 DATE OF AUTHORIZATION FOR ISSUE

These condensed interim financial information were authorized for issue by the Board of directors on April 26, 2016.

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