| ASKARI LEASING |
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| (Annual
Report 1996) |
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CONTENTS |
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| Corporate
Information |
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2 |
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| Notice
of Meeting |
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3 |
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| Directors'
Report |
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4 |
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| Auditors'
Report to the Members |
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7 |
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| Balance
Sheet |
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8 |
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| Profit
and Loss Account |
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9 |
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| Statement
of Changes in Financial Position |
10 |
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| Notes
to the Accounts |
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11 |
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| Pattern
of Shareholding |
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21 |
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| Financial
Highlights |
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22 |
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| Proxy Form |
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CORPORATE INFORMATION |
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| BOARD
OF DIRECTORS |
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| Lt.
Gen. (R) Farrakh Khan |
Chairman |
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| Brig.
(R) Khalid Latif |
|
Director |
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| Brig.
(R) Sajjad Ahmed Nazim |
Director |
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| Brig.
(R) Zafar Ahmed |
|
Director |
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| Brig.
(R) Khalid Raza |
|
Director |
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| Dr.
Safdar Ali Butt |
|
Director |
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| Mr.
Shujat Ali Khan |
|
Director |
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| Mr.
Wazir Ali Khoja |
|
Director |
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|
(NIT Nominee) |
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| CHIEF
EXECUTIVE |
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| Mr.
Taimur Afzal |
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| COMPANY
SECRETARY |
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| Mr.
Shujat Ali Khan |
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| BANKERS |
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| Askari
Commercial Bank Ltd. |
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| Allied
Bank of Pakistan |
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| American
Express Bank |
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| ANZ
Grindlays Bank |
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| Bank
of America NT & SA |
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| Banque
Indosuez |
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| Bank
of Punjab |
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| Deutsche
Bank |
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| Faysal
Bank Ltd. |
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| Habib
American Bank |
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| Prime
Commercial Bank Ltd. |
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| Standard
Chartered Bank Ltd. |
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| AUDITORS |
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| Taseer
Hadi Khalid & Co. |
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| Chartered
Accounts |
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| LEGAL
ADVISOR |
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| Walker
Martineau Saleem |
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| REGISTRAR
AND SHARE |
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| TRANSFER
OFFICE |
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| Askari
Associates (Pvt.) Ltd. |
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| 6th
floor, AWT Plaza |
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| The
Mall, Rawalpindi. |
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| Telephone:
(051) 514370 - 71 |
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| REGISTERED
OFFICE/HEAD OFFICE |
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| 5th
Floor, AWT Plaza, |
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| The
Mall, Rawalpindi |
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| Telephone:
(051) 511309 - 11, 566216, |
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| 566153,
515267 |
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| Fax:
(051) 565670 |
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| BRANCH
OFFICES |
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| 1. 3rd Floor, AWT Plaza |
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| I.I.
Chundrigar Road, Karachi. |
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| Telephone:
(021) 2634614 - 5, 2627347 - 8 |
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| Fax:
(021) 2630338 |
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| 2. 4 Corps. Garrison Mess, |
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| Tufail
Road, Lahore Cantt. |
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| Telephone:
(042) 6673384, 6667784 - 5 |
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| Fax:
(042) 6673385 |
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| 3. 32, The Mall, |
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| Peshawar. |
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| Tel:
(0351) 376918 |
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NOTICE OF THE FOURTH |
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|
ANNUAL GENERAL MEETING |
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| Notice
is hereby given that the Fourth |
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| Annual
General Meeting of Askari Leasing |
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| Limited
will be held on Tuesday the |
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| November
26, 1996 at 9.30 a.m. in Blue |
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| Lagoon
Complex, opposite Pearl Continental |
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| Hotel
outward gate, Rawalpindi to transact |
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| the
following business:- |
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| 1.
To confirm the minutes of the Third |
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| Annual
General Meeting held on |
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| December
27, 1995. |
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| 2.
To receive, consider and adopt the |
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| Audited
Accounts together with |
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| Directors'
and Auditors' Reports thereon |
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| for
the year ended June 30, 1996. |
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| 3.
To appoint Auditors of the company for |
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| the
year ending June 30, 1997 and to fix |
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| their
remuneration. The present |
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| Auditors
M/s Taseer Hadi Khalid & Co., |
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| Chartered
Accountants, being eligible |
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| offer
themselves for reappointment. |
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| 4.
To approve the payment of 20% cash |
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| dividend
(Rs. 2.00 per share) as recom- |
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| mended
by the Board of Directors for the |
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| year
ended June 30, 1996. |
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| 5.
To transact any other business with the |
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| permission
of the Chair. |
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| NOTES: |
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| 1.
CLOSURE OF SHARE TRANSFER |
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| BOOKS |
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| The
Share Transfer Books of the |
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| Company
will be closed from November |
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| 17,
1996 to November 26, 1996 (both days |
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| inclusive).
Cash Dividend will be paid to |
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| the
shareholders whose names appear on |
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| the
Register of Members on November |
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| 17, 1996. |
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| 2.
CHANGE IN ADDRESS AND |
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| CONSOLIDATION
OF FOLIOS |
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| Members
are requested to immediately |
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|
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| notify
the change of address, if any, and |
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| ask
for consolidation of folio numbers, |
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| provided
any member holds more than |
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|
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| one
folio, to our Registrar, Askari |
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| Associates
(Private) Limited, 6th Floor, |
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| AWT
Plaza, The Mall, Rawalpindi Cantt. |
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| 3.
PARTICIPATION IN GENERAL |
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| MEETING |
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| A
member entitled to attend and vote at |
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| the
Meeting is entitled to appoint a |
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| proxy
to attend the Meeting and vote for |
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| him/her.
The Form of proxy, duly com- |
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| pleted,
in order to be effective must be |
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| received
by the Company at its |
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| Registered
Office at least 48 hours before |
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| the
Meeting. |
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BY ORDER OF THE BOARD |
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| Rawalpindi |
|
Shujat Ali Khan |
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| October
26, 1996 |
Company Secretary |
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|
DIRECTORS' REPORT |
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| The
Board of directors of your company feels |
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| pleasure
in presenting the Fourth Annual |
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| Report
for the year ended June 30, 1996. |
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|
| FINANCIAL
RESULTS: |
|
RUPEES |
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| Total
Revenue |
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379,288,925 |
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| Total
Expenditure |
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279,051,234 |
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| Profit
for the Year |
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100,237,691 |
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| Less:
Tax Provision |
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4,500,000 |
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| Profit
after Tax |
|
95,737,691 |
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| Unappropriated
profit |
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| brought forward |
|
1,203,136 |
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| Profit
available for |
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|
|
| appropriation |
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96,940,827 |
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| APPROPRIATIONS |
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| Transfer
to Statutory |
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| reserve |
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19,147,538 |
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| Transfer
to General |
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|
| reserve |
|
36,000,000 |
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| Proposed
Cash |
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| Dividend
20% |
|
40,000,000 |
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| Un
appropriated profit |
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|
|
| carried
forward |
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1,793,289 |
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| DIVIDEND: |
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| The
Board of Directors has recommended a |
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| cash
dividend @ 20% for the year ended June |
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| 30, 1996. |
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| CHANGE
OF FINANCIAL YEARS: |
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| The
Finance Act, 1995 abolished the adop- |
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| tion
of calendar year as financial year and |
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| accordingly,
your company also changed its |
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| financial
year from December to June start- |
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| ing
last year i.e. June 1995. Due to this |
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| change
the present report covers the period |
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| July
1995 - June 1996 representing 12 months |
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| of
operations, but the previous year figures |
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| represent
only six months of operations i.e. |
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| January
- June 1995. |
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|
| REVIEW
OF OPERATIONS: |
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| This
year, your company joined the exclusive |
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| group
of leasing companies with total assets |
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| in
excess of Rs. 2 billion. This land mark has |
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| been
achieved within a short span of three |
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| years,
while other leasing companies in this |
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| group
have an operational history ranging |
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| from
6 to 11 years. This consistent high |
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| growth
rate achieved by your company is |
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| even
more material given the slow down in |
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| the
industrial investment in the country and |
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| the
increasing competition in the leasing sec- |
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| tor
during the last three years. |
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| The
company's balance sheet footing |
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| increased
from Rs. 1.3 billion to Rs. 2.7 billion |
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| showing
growth rate in excess of 100%. The |
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| lease
investment portfolio also grew by over |
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| 100%
from Rs. 896 million in 1995 to Rs. 1.9 |
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| billion
in 1996. The paid up capital has |
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| increased
from Rs. 100 million to Rs. 200 mil- |
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| lion
and the reserves have also moved up |
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| substantially.
The allowance for potential |
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| lease
losses have been increased to Rs. 31.3 |
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| million.
This is especially prudent in the pre- |
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| sent
economic environment where more and |
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| more
companies are facing financial distress. |
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| Profit
before tax increased by 56.9% over last |
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| 12
months. Total revenue for the period was |
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| Rs.
379.3 million while lease income was Rs. |
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| 312.6
million - lease income was 82.4% of the |
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| total
revenue showing our continuing com- |
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| mitment
to the core business. Financial |
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| charges
of Rs. 236 million represented the |
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| major
portion of the total expenditure of |
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| Rs.
279.1 million. Operational expenses were |
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| effectively
controlled by the company and |
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| kept
at a reasonable level of 6.68% of total |
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| revenue
and 0.93% of total assets (lowest |
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| among
top rated leasing companies in |
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| Pakistan). |
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| Long
term investment strategy of your com- |
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| pany
from inception has been dynamic which |
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| takes
into account our future growth require- |
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| ments
while minimizing risk. This year we |
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| took
major exposure in the gas distribution |
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| area
(SNGPL & SSGC). Sectoral diversifica- |
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| tion
has been a corner stone of your compa- |
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| ny's
.investment decisions. As on June 30, |
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| 1996
Askari has a lease portfolio of over Rs. |
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| 1.9
billion with an average size of Rs. 4.0 mil- |
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| lion
(481 leases). An analysis of the lease port- |
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| folio
size-wise would show 344 leases of less |
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| than
Rs. 1 million, 102 leases ranging |
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| between
Rs. 1 million to Rs. 10 million and 35 |
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| leases
of over Rs. 10 million. A geographic |
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| breakdown
shows that almost 42% of leases |
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| are
Karachi based, 40.3% are Lahore based |
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| while
balance of 17.7% is distributed in |
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| Rawalpindi
/ Islamabad and Faisalabad. |
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| Sectoral
analysis of leases uptil June 30, 1996 |
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| shows
33.25% in fuel & energy, 10.7% in |
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| power,
10.2% in cement, 8% in textile, 6% in |
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| services,
5% in banking while the rest is bro- |
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| ken
in 12 sectors ranging from 3.35% in chem- |
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| ical
& pharmaceutical to .03% in tiles and |
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| ceramics.
In line with these investments, we |
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| see
future growth of lease portfolio in public |
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| sector
companies like OGDC, WAPDA, |
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| KESC,
PTC, etc. In addition, our growth will |
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| come
from AAA private sector companies |
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| and
small enterprises in the far flung areas of |
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| the
country. |
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| As
required by the Corporate Law |
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| Authority,
your company completed its rat- |
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| ing
process through Pakistan Credit Rating |
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| Agency
(PACRA) and we are pleased to |
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| report
that we received an A rating for long- |
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| term
obligations and A1 rating for short- |
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| term
obligations. |
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| The
State Bank of Pakistan, recently, permit- |
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| ted
your company to open branches in |
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| Peshawar
and Islamabad. Our Peshawar |
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| Branch
is operational while Islamabad |
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| Branch
is expected to be operational before |
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| the
end of the year. |
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|
| The
government has imposed central excise |
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| duty
(CED) on lease transactions from July |
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| 1996
at the rate of 1% per annum. This has |
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| had
a negative impact on competitiveness of |
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| the
leasing sector. The Leasing Association of |
|
| Pakistan
is making representation to the gov- |
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| ernment
for its withdrawal or atleast imposi- |
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| tion
of CED only on new lease transactions. |
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| We
hope that the government will look at |
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| this
situation sympathetically. We believe |
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| that
the leasing sector needs regulatory sup- |
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| port
from the government for the sector to |
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| play
its due role in the development of the |
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| country
through efficient allocation of finan- |
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| cial
resources. |
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| RES0URCE
MOBILIZATION |
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| Anza
Certificates of Investments (COIs) have |
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| been
a resounding success. Our total COIs |
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| increased
from Rs. 432 million at end June |
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| 1995
to Rs. 1.7 billion at end June 1996. Even |
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| more
importantly 60% of the COIs were long |
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| term
while only 40% were short term. This |
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| has
appreciably improved our asset/liability |
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| matching
position. |
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| This
success has been achieved by a contin- |
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| ued
focus on our long term strategy (of |
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| which
COIs form the centerpiece), accep- |
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| tance
of "ASKARI" as a significant corporate |
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| brand
name by the public and continued |
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| support
of our sponsors "Army Welfare |
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| Trust".
We also recognize and commend the |
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| critical
role played by Askari Bank in con- |
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| tributing
to the success and acceptance of the |
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| corporate
brand name "ASKARI". |
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| Financial
institutions in Pakistan - both local |
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| and
foreign - have supported the growth of |
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| your
company considerably and we contin- |
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| ue
to work towards building these relation- |
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| ships
on sound footings for mutual benefit. |
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| In
addition to the above, we are exploring |
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| other
avenues of resource mobilization both |
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| within
the country and from international |
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| institutions.
We are confident that with pas- |
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| sage
of time, we will be able to harness these |
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| other
sources with a view to diversifying our |
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| resource
base. |
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|
| HUMAN
RES0URCE |
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| Service
sector companies are highly depen- |
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| dent
on competent and qualified personnel. |
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| The
continued success of your company is |
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| also
dependent on this resource and its con- |
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| tinuous
availability to achieve the required |
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| growth.
Your company has invested substan- |
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| tial
resources in personnel. We expect this |
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| investment
to provide excellent returns in |
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| the
future. The Board of Directors places on |
|
| record
the commendable effort and hard |
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| work
put in by the employees and officers of |
|
| your
company in achieving the present |
|
| results. |
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|
| INFORMATION
TECHNOLOGY |
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| Your
company has an ongoing commitment |
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| to
information technology which is signified |
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| by
the investment in hardware represented |
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| in
the fixed assets of the company. Even |
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| more
importantly is our investment in soft- |
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| ware
and human resources in this area. We |
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| continue
to believe that, in financial services, |
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| information
technologies play a critical role |
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| in
delivering the services efficiently and |
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| effectively
while minimizing transaction |
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| costs
and providing a competitive advan- |
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| tage. |
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|
| AUDITORS |
|
| The
Auditors, M/s Taseer Hadi Khalid and |
|
| Company,
retire and being eligible offer |
|
| themselves
for reappointment. |
|
|
| PATTERN
OF SHAREHOLDING |
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| The
pattern of share holding of the Company |
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| as
at June 30, 1996 is shown. |
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|
| ACKNOWLEDGMENT |
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| We
wish to thank Corporate Law Authority, |
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| State
Bank of Pakistan and other regulatory |
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| authorities
for their cooperation, guidance |
|
| and
support whenever sought. |
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|
|
Lt Gen (R) Farrakh Khan |
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| October
21, 1996 |
CHAIRMAN |
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|
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|
|
AUDITORS' REPORT TO THE
MEMBERS |
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| We
have audited the annexed balance sheet |
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| of
Askari Leasing Limited as at 30 June, 1996 |
|
| and
the related profit and loss account and |
|
| the
cash flow statement, 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 and, |
|
| after
due verification thereof, we report that: |
|
|
| a)
in our opinion, proper books of |
|
| account
have been kept by the com- |
|
| pany
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 poli- |
|
| cies
consistently applied; |
|
|
| ii)
the expenditure incurred during |
|
| the
year was for the purpose of |
|
| the
company's business; and |
|
|
| iii)
the business conducted, invest- |
|
| ments
made and the expenditure |
|
| incurred
during the period were |
|
| in
accordance with the objects of |
|
| the
company; |
|
|
| c)
in our opinion and to the best of our |
|
| information
and according to the |
|
| explanations
given to us, the balance |
|
| sheet,
profit and loss account and the |
|
| cash
flow statement, together with |
|
| the
notes forming part thereof, give |
|
| the
information required by the |
|
| Companies
Ordinance, 1984 in the |
|
| manner
so required and respectively |
|
| give
a true and fair view of the state |
|
| of
the company's affairs as at 30 June |
|
| 1996
and of the profit and the |
|
| changes
in the financial position for |
|
| the
year then ended; and |
|
|
| d)
in our opinion Zakat deductible at |
|
| source
under the Zakat and Ushr |
|
| Ordinance,
1980 was deducted by |
|
| the
company and deposited in the |
|
| Central
Zakat Fund established |
|
| under
section 7 of that Ordinance. |
|
|
|
|
TASEER HADI KHALID &
CO |
|
|
|
Chartered Accountants |
|
| October
08, 1996 |
ISLAMABAD |
|
|
|
|
|
BALANCE SHEET |
|
|
AS AT JUNE 30, 1996 |
|
|
|
|
1996 |
1995 |
|
|
|
Note |
Rupees |
Rupees |
|
|
| ASSETS |
|
3 |
6,514,151 |
5,293, O88 |
|
| Fixed
Assets- Tangible |
|
|
500,000 |
700,000 |
|
| Deferred
Cost |
|
4 |
5,000,000 |
- |
|
| Long
Term Investments |
|
|
|
|
|
|
| Net
Investment in Lease Finance |
|
|
|
| Minimum lease payments |
|
|
2,264,493,574 |
1,066,255,793 |
|
| Add: Residual value |
|
|
212,732,940 |
108,825,723 |
|
|
|
--------- |
--------- |
|
|
|
|
2,477,226,514 |
1,175,081,516 |
|
| Less:
Unearned finance income |
|
|
561,750,855 |
279,058,440 |
|
|
|
--------- |
--------- |
|
| Net
investment in lease finance |
|
5 |
1,915,475,659 |
896,023,076 |
|
| Less:
Current portion |
|
|
491,337,788 |
245,16Z700 |
|
|
|
--------- |
--------- |
|
| Long
term portion of net investment |
|
|
1,424,137,871 |
65~855,376 |
|
| Current
Assets |
|
|
1,302,790,110 |
653,884,373 |
|
|
|
|
--------- |
--------- |
|
|
|
|
2,738,942,132 |
1,310,732,837 |
|
|
|
========= |
========= |
|
| CAPITAL
AND LIABILITIES |
|
|
|
|
| Share
Capital and Reserves |
|
|
|
|
| Authorised
capital |
|
|
|
|
| 50,000,000
ordinary shares of Rs. 10/- each |
|
500,000,000 |
500,000,000 |
|
|
|
========= |
========= |
|
| Issued,
Subscribed and Paid-up |
|
|
|
|
| 20,000,000
ordinary shares (10,000,000 in 1995) |
|
|
|
| of
Rs. 10/- each |
|
|
200,000,000 |
100,000,000 |
|
|
|
|
|
| Reserves |
|
|
|
|
| Reserves |
|
|
147,948,322 |
928,007,841 |
|
| Unappropriated
profit |
|
|
1,793,289 |
1,20~136~ |
|
|
|
--------- |
--------- |
|
|
|
|
149,741,611 |
94,003,920 |
|
|
|
|
--------- |
--------- |
|
|
|
|
349,741,611 |
194,003,920 |
|
|
|
|
| Allowance
for Potential Lease Losses |
|
2.3 |
31,287,281 |
14,067,276 |
|
| Bridge
Financing |
|
- |
56,000,000 |
|
| Long
Term Liabilities |
|
1,253,168,837 |
430,122,693 |
|
| Current
Liabilities |
|
1,104,744,403 |
616,538,948 |
|
|
|
--------- |
--------- |
|
|
|
2,738,942,132 |
1,310,732,837 |
|
