Asset Investment Bank Limited - Annual Reports 2003

ASSET INVESTMENT BANK LIMITED.

Annual Reports 2003

OUR MISSION

Our mission is to first come out of all the crises

by doing all our best efforts and than make

and keep the distinctive position in

the non- banking financial

sector with trust and

faith of our stakeholders and

keep their valuable debts in safe

custody and bring goods results by using

qualitative, professional, and

technological services.

Contents

COMPANY INFORMATION

CHAIRMAN & DIRECTOR

M.A. Rehmani

CHIEF EXECUTIVE & DIRECTOR

Syed Naveed H. Zaidi

DIRECTORS

Mr. Khalid Iqbal

Azhar Tariq Khan

Rana M Abu Obaida (Nominee Director National Asset Leasing Corporation Ltd.)

Shamim I. Junejo (Nominee Director National Asset Leasing Corporation Ltd.)

COMPANY SECRETARY

Sohail Ahmed Noor

AUDIT COMMITTEE

M.A. Rehmani - Chairman

Azhar Tario, Kahn - Member

Rana M. Abu Obaida - Member

Dr. Khalid Iqbal - Member

BANKERS

Muslim Commercial Bank Limited

The Bank of Punjab

Habib American Bank

Platinum Commercial Bank Limited

Union Bank Limited

AUDITORS

Ijaz Tabussum & Co.,

Chartered Accountants

REGISTRAR

Nobel Computer Services (Pvt) Limited

14-Banglore Town, Housing Society, Shahrah-e-Faisal, Karachi

Phones: (021) 4546978, 4520121

Fax: (021)4314962

REGISTERED OFFICE

301 & 302, 3^rd Floor

Muhammad Gulistan Khan House,

Blue Area, Islamabad

Phone: (051) 2270621, 2822513

Fax:(051)2272506

LIAISON OFFICE

309, Annum Empire, Plot No. ZICC, Block 7/B

Near Duty Free Shop, K.C.H.S. Union Limited, Karachi.

Phone:(021)4529225,4527246

Fax: (021)4527232

NOTICE OF ANNUAL GENERAL MEETING

Notice is hereby given that the 11 th Annual General Meeting of Asset Investment Bank Limited will be held

at 301 & 302,3^rt floor, Muhammad Gulistan Khan House, 82-East, Fazal-ul-Haq Road, Blue Area, Islamabad

on Wednesday, October 29,2003, at 10.00 a.m. to transact the following business:

ORDINARY BUSINESS

1) To confirm the minutes of Annual General Meeting held on October 21, 2002.

2) To receive, consider and adopt the audited accounts of the Company for the year ended June 30,

2003 together with the Directors' and Auditors' Reports thereon.

3) To appoint Auditors for the next term and fix their remuneration. M/s. Ijaz Tabussum & Co.

Chartered Accountants, being illegible offer themselves for reappointment.

4) To transact any other business with the permission of the chair.

By order of the Board

Islamabad Sohail Ahmed Noor

October 08, 2003 Company Secretary

Notes:

1. A member entitled to attend and vote at the above meeting may appoint any other person as his/her proxy. The instrument

appointing a proxy should be signed by the member or his/her attorney duly authorized in writing. If a member is a

corporation, either it's common seal be affixed to the proxy form or the Board of Directors' resolution/power of attorney

along with specimen signature of the nominee shall be submitted with the proxy form. The proxy shall have a right to attend,

speak and vote in the place of the member.

2. Proxies in order to be effective must be received at the Registered Office of the Company not later than forty-

eight hours before the ^t!rne of the meeting and must be duly stamped, signed and witnessed.

3. Proxy need not be a member.

4. CDC account holder will further have to follow the under mentioned guidelines specified by the Securities and

Exchange Commission of Pakistan:

i. In case of individuals, the account holder or sub-account holder and/or the person whose securities are in

group account and their registration details are uploaded as per the Regulations, shall submit the proxy

form as per the above requirement.

ii. The proxy form shall be witnessed by two persons whose names, addresses and NIC numbers shall be

mentioned on the form.

iii Attested copies of NIC or the passport of the beneficial owners and the proxy shall be furnished with the

proxy form.

iv. The proxy shall produce his original NIC or original passport at the time of the meeting.

v. In case of corporate entity, the Board of Directors' resolution/power of attorney with specimen signature of

the nominee shall be submitted along with proxy form to the company.

5. The members are requested to immediately notify the change in address, if any.

6. The Share transfer books of the Company will remain closed from October 23, 2003 to October 29, 2003 both days

inclusive

DIRECTORS' REPORT

The Directors of Asset Investment Bank Limited are submitting the annual accounts of the bank for the

year ended June 30,2003.

REVIEW OF OPERATIONS

During the period under review, the bank had registered a loss of Rs.17.126 million. The operational

losses, which are largely the result of a large accumulation of non-earning assets in the shape of non-

performing loans and un-remunerative investments. The management has thus made strenuous efforts

in all critical areas of the banks' operations to improve the quality of its assets and mange its liabilities in

as cost effective way as possible. At the operating level the management has been closely looking at the

banks' operative and administrative expenditures. As a result they came down considerably during the

year under review. The management is taking further measures towards consolidation of its operations

leading to substantial reduction in costs. The bank has classified its all doubtful debts and income from

these debts is charged to suspense account and will be reversed upon its receipt. During the year the

bank has revised its rate of returns as per current prevailing market rates resultantly our cost of fund has

reduced significantly.

FUTURE OUTLOOK

As explained earlier in our preceding reports that the. management of your bank is all along, rigorously

pursuing the institutional lenders to convert their liabilities in to equity of the bank. By grace of

Almighty Allah, the three major institutional lenders that includes Army Welfare Trust, National Asset

Leasing Corporation Limited and Habib Bank Limited has consented to our proposals. Two creditable

parties have also shown their willingness to enter in to equity and mobilization of funds. The

conversions of these liabilities in to equity of the bank combined with fresh injection of capital will not

only increase the paid up capital to the desked level required by the Securities and Exchange

Commission of Pakistan but also provide the bank with required leverage to resume its functions

confidently. After conversion of these liabilities into the equity the bank will carry a very small portfolio

of its interest bearing liabilities which can be matched and easily managed with the existing assets of the

bank which are stated at the fair value and the bank will be in a position to restart its normal business

activities.

Shares of Asset Investment Bank Limited have been actively traded on the Stock Exchanges and the

market price of the share has increased from Rs.1.40 to Rs.7.30 per share and is currently trading at

R.s.4.50 per share and only in the month of July & August 2003 more than 7.20 million shares of Asset

Investment Bank Limited have been traded.

The bank had concentrated on lending in its earlier years but later it has primarily focused on providing

corporate finance and advisory services. We are emphasizing to provide non-fund based facilities and

services to our clients. We have various definite business proposals that can change the financial health

of the bank to its betterment. By taking the above-mentioned measures Asset Investment Bank Limited

will be in a position to earn substantial amount beneficial to the financial health of the bank.

Securities & Exchange Commission of Pakistan (SECP) has again filed petition for winding-up against

the Company in the Lahore High Court-Rawalpindi Bench, under section 305 and 309 of the

Companies Ordinance, 1984 that was earlier taken back by them. While the case is still pending for the

court's judgment, the Company has applied for the fresh license required under rule 5 of the NBFC's

Rules, 2003 but SECP has refused to accede to our request at this point, as the matter is pending in the

court. The Management of the bank is planning to hold a meeting with SECP in the current month to

present and discuss the restructuring plan of the bank and wididrawal of winding up petition.

The managements' views on the issues raised by the auditors in their report are as fallows:

• The dispute with the Commercial bank will hopefully be decided in favour of the bank and the

investments in equities is pledged with them and our bank is in dispute so due to their non

cooperation, our bank could not receive the confirmation, as the commercial banks want the

settlement first.

• The institutional depositor is charging interest on compounding interest method with higher

rate.

CODE OF CORPORATE GOVERNANCE

CORPORATE AND FINANCIAL REPORTING FRAMEWORK

The Board is mindful of its responsibilities as established by Code of Corporate Governance issued by

Securities and Exchange Commission of Pakistan in assistance with Institute of Chartered Accountants

of Pakistan. The Directors hereby confirm the following as required by clause (xix) of the Code of

Corporate Governance, issued by Securities and Exchange Commission of Pakistan.

a. The financial statements, prepared by the management of the Company, present fairly its state

of affairs, the result of its operations, cash flows and changes in equity.

b. Proper books of accounts of the company have been maintained.

c. Appropriate accounting policies have been consistently applied in preparation of the financial

statements and accounting estimates are based on reasonable and prudent judgment.

d. International Accounting Standards, as applicable in Pakistan, have been followed in

preparation of financial statements and any departure there from has been adequately disclosed.

e. The system of Internal Control is sound in design and has been effectively implemented and

monitored.