| Askari Leasing Limited |
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| Annual
Report 2000 |
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| FINANCIAL
HIGHLIGHTS 1996-2000 |
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|
(Rupees in '000) |
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|
|
|
1996 |
1997 |
1998 |
1999 |
2000 |
|
|
|
|
| BALANCE
SHEET |
|
| Authorised
Capital |
500,000 |
500,000 |
500,000 |
500,000 |
500,000 |
|
| Paid-up Capital |
|
200,000 |
200,000 |
240,000 |
240,000 |
324,000 |
|
| Total Equity |
|
349,742 |
469,816 |
493,798 |
528,199 |
638,852 |
|
| Allowance
for potential lease losses |
31,287 |
74,670 |
120,000 |
131,591 |
162,214 |
|
| Long
Term & Deferred Liabilities |
1,238,570 |
2,118,780 |
2,083,829 |
2,823,710 |
4,690,094 |
|
| Current
Liabilities |
1,119,343 |
1,340,280 |
2,449,526 |
2,265,777 |
1,892,268 |
|
| Current assets |
|
1,302,790 |
1,782,176 |
2,545,973 |
2,810,393 |
3,810,835 |
|
| Total Assets |
|
2,738,942 |
4,003,546 |
5,027,152 |
5,617,686 |
7,221,214 |
|
|
|
|
| INCOME
STATEMENT |
|
| Lease Income |
|
312,582 |
524,528 |
593,665 |
638,103 |
767,042 |
|
| Total Revenue |
|
379,289 |
630,976 |
716,009 |
797,590 |
992,664 |
|
| Financial
Expenses |
236,489 |
420,440 |
529,952 |
665,419 |
794,482 |
|
| Profit
before Taxation |
100,238 |
135,075 |
99,981 |
70,901 |
100,554 |
|
| Profit
after Taxation |
95,738 |
120,075 |
71,981 |
62,401 |
91,454 |
|
|
|
|
| FINANCIAL
INDICATORS |
|
| Earning
per Share (before tax) |
6.68 |
6.75 |
4.54 |
2.95 |
3.10 |
|
| Return
on average Equity |
36.87% |
32.96% |
20.75% |
13.42% |
15.74% |
|
| Current Ratio |
|
1.16 |
1.30 |
1.04 |
1.24 |
2.01 |
|
| Book
value (Rs. per share) |
17.48 |
23.49 |
20.57 |
22.00 |
19.72 |
|
| Return
to share holders |
20% |
20% |
20% |
20% |
20% |
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| CONTENTS |
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|
| Corporate
Information |
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| Notice
of Meeting |
|
| Directors'
Report |
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| Auditors'
Report |
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| Balance Sheet |
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|
| Profit
and Loss Account |
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| Statement
of Changes in Financial Position |
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| Statement
of Changes in Equity |
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| Notes
to the Accounts |
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| Pattern
of Shareholding |
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| CORPORATE
INFORMATION |
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| BOARD
OF DIRECTORS |
Lt. Gen. (R) Mohammad
Afsar |
Chairman |
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|
Brig. (R) Ikram-ul-Hasan |
Director |
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|
Brig. (R) Muhammad Ayub |
Director |
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|
Brig. (R) Gul Zaman Satti |
Director |
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|
Mr. Javed Ahmed Noel |
Director |
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|
Mr. Khalid Sharwani |
Director |
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|
Mr. Shujat Ali Khan |
Director |
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|
Dr. Amjad Waheed |
Director (NIT Nominee) |
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| CHIEF
EXECUTIVE |
Mr. Taimur Afzal |
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| COMPANY
SECRETARY |
Mr. Zafar Alam Khan
Sumbal |
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| BANKERS |
|
Askari Commercial Bank
Limited |
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American Express Bank
Limited |
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|
ABN-AMRO Bank N.V. |
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|
Standard Chartered
Grindlays Bank Limited |
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|
The Bank of Punjab
Limited |
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|
Citibank N.A. |
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|
Emirates Bank
International PJSC |
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|
Habib American Bank |
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United Bank Limited |
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The Hang Kong and
Shanghai Banking Corporation Limited |
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Muslim Commercial Bank
Limited |
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| AUDITORS |
|
Taseer Hadi Khalid &
Co. |
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|
Chartered Accountants |
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| LEGAL
ADVISORS |
Walker Martineau Saleem |
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|
Mr. M. Hanif Bhatti |
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| REGISTERED |
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| OFFICE/HEAD
OFFICE |
5th Floor, AWT Plaza, |
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|
The Mall, Rawalpindi. |
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Telephone: (051)
5511309-11, 5566153, 5515289 |
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UAN 111-111-345 |
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Fax: (051) 5565670 |
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| REGISTRAR
AND SHARE |
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| TRANSFER
OFFICE |
Askari Associates (Pvt.)
Ltd. |
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|
6th Floor, AWT Plaza, The
Mall, P.O. Box 678, Rawalpindi. |
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Telephone: (051)
5514370-71,5516108 |
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Fax: (051) 5516109 |
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E.Mail:
askari@isb.compol.com |
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| NOTICE
OF THE SEVENTH ANNUAL GENERAL MEETING |
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| Notice
is hereby given that the Eighth Annual General Meeting of Askari Leasing
Limited will be held on Saturday, December |
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| 23,
2000 at 0930 hours, in Blue Lagoon Complex, Opposite Pearl Continental Hotel
outward gate, Rawalpindi to transact |
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| the
following business:- |
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| 1.
To confirm the minutes of the 7th Annual General Meeting of the company held
on December 24, 1999. |
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|
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| 2.
To receive, consider and adopt the Audited Accounts together with Directors'
and Auditors' Reports thereon for |
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| the
year ended June 30, 2000. |
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| 3.
To appoint Auditors of the company for the year ending June 30, 2001 and to
fix their remuneration. The present |
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| Auditors
being eligible, offer themselves for re-appointment. |
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| 4.
To approve the payment of 20% cash dividend (Rs. 2.00 per share) as
recommended by the Board of Directors |
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| for
the year ended June 30, 2000. |
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| 5.
To transact any other business with the permission of the Chair. |
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By Order of the Board |
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| Dated:
November 21, 2000 |
|
Zafar Alam Khan Sumbal |
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| Place:
Rawalpindi |
|
Company Secretary |
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| NOTES: |
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| 1.
Closure of Share Transfer Books |
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| The
Share Transfer Books of the company will remain closed from December 16, 2000
to December 23, 2000 |
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| (both
days inclusive). Cash dividend will be paid to the shareholders whose names
appear on the Register of |
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| Members
on December 16, 2000. |
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| 2.
Change in Address and Consolidation of Folios |
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| Members
are requested to immediately notify the change of address, if any, and ask
for consolidation of folio |
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| numbers,
provided any member holds more than one folio, to our Registrar, Askari
Associates (Private) Limited, |
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| 6th
Floor, AWT Plaza, The Mall, Rawalpindi. |
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| 3.
Participation in General Meeting |
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| A
member entitled to attend and vote at the meeting is entitled to appoint a
proxy to attend the meeting and |
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| vote
for him/her. The form of proxy, duly completed, in order to be effective must
be received by the company |
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| at
its Registered Office at least 48 hours before the meeting. |
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|
| DIRECTORS'
REPORT |
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| The
Board of Directors of your company is pleased to present the eighth annual
report with audited accounts of the company for the |
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| year
ended June 30, 2000: |
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|
| FINANCIAL
RESULTS |
|
Rupees |
|
|
| Total Revenue |
|
|
992,663,723 |
|
| Total
Expenditure |
|
892,110,190 |
|
| Profit
for the year |
|
100,553,533 |
|
| Provision
for taxation |
|
9,100,000 |
|
| Un-appropriated
profit brought forward |
|
1,458,893 |
|
| Transferred
from general reserve |
|
15,000,000 |
|
| Profit
available for appropriation |
|
107,912,426 |
|
| Transferred
to reserve fund |
|
18,290,710 |
|
| Transferred
to deferred tax reserve |
|
23,000,000 |
|
| Proposed
cash dividend |
|
64,800,000 |
|
| Un-appropriated
profit carried forward |
|
1,821,716 |
|
|
| DIVIDEND |
|
| The
Board of Directors has recommended 20% cash dividend for the year ended June
30, 2000. |
|
|
| REVIEW
OF OPERATIONS |
|
| The
general outlook of the economy during the year remained unfavourable
along-with major changes in the political environment. |
|
| The
new administrative setup's emphasis on documentation is expected to improve
the business environment in the long-run. The |
|
| company
benefited from the government's focus on loan defaulters. This policy coupled
with the company's own efforts improved |
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| our
collections. However, management of bad debts remains a major focus and we
hope that the new institutional mechanism will |
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| effectively
deal with this issue. Leasing companies over the last fifteen years of
operations in Pakistan have found a niche for themselves |
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| in
the financial market. They have proved to be an efficient and effective
delivery vehicle for financial services. They have also played |
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| a
role in the documentation of the economy and contributed significantly to the
revenue collection. |
|
|
| Askari
Leasing, during the year under review disbursed leases in excess of Rs. 3.0
billion. This is the largest disbursement ever made |
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| by
any leasing company in Pakistan during a 12 month period. This level of
disbursement is reflective of the commitment of the |
|
| employees
of your company beyond the call of duly, market oriented strategy, strength
of the organization and timely decision |
|
| making. |
|
|
| As
reported lost year, our car financing scheme" askar "has |
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| become
central to the marketing strategy and we feel it will be the |
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| engine
of growth for the next couple of years. The total disbursement |
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| of
Rs. 3.0 billion was represented by Rs. 2.0 billion in auto financing |
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| while
Rs. 1.0 billion was disbursed for machinery and equipment. Net |
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| investment
in leases as at June 30, 2000 was Rs. 5.4 billion compared |
|
| to
Rs. 4.1 billion for the previous year. Our liquidity position during |
|
| the
year remained strong and we continued to fund our leases primarily |
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| through
certificates of investment (COls). As of June 30, 2000 long- |
|
| term
COIs were Rs. 3.9 billion and short-term COIs were Rs. 0.8 billion |
|
| compared
to Rs. 2.2 billion and Rs. 1.4 billion respectively for the |
|
| previous
year. Askari Leasing has taken a progressive approach to |
|
| various
forms of fund raising in-order to keep a diversified resource |
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| portfolio.
We are exploring term finance certificates (TFCs) as part of |
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| this strategy. |
|
|
| Total
revenue for the year was Rs. 993 million compared to Rs. 798 |
|
| million
for the previous year representing an increase of 24.3%. Total |
|
| expenditure
increased by Rs. 165 million which represent an increase |
|
| of
22.8%. The major component of the expenses was financial charges |
|
| which
increased by 19.4% reflecting increased investment in |
|
| leases.
Administrative expenses increased from Rs. 50 million |
|
| to
Rs. 67 million pertaining primarily to advertisement, depreciation |
|
| and
communication expenses reflective of higher business volume and |
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| increased
emphasis on consumer financing "askar". Administrative |
|
| expenses
were less than 1% of the total assets. |
|
|
| Asset
wise lease analysis shows a significant change in favour of auto |
|
| financing.
Break-up of lease portfolio as of June 30, 2000 is 50% |
|
| vehicles,
43% machinery and 7% equipment. These ratios will |
|
| continuously
tilt towards vehicles. Geographic distribution is getting |
|
| wider
dispersal- Lahore Rs. 1.9 billion, Karachi Rs. 1.7 billion, |
|
| Rawalpindi/Islamabad
Rs. 1.2 billion, Faisalabad Rs. 0.4 billion, |
|
| Multan
Rs. 0.4 billion while the balance is distributed in Peshawar and |
|
| Sialkot.
Sector wise, significant investment is in textiles, services, |
|
| power,
cement, etc. None of the sectors represent higher than 13% |
|
| except
textiles and allied at 17.3%. |
|
|
| Due
to change of focus on auto financing and marketing penetration |
|
| our
employee strength has increased substantially. Our human resource |
|
| strategy
is a critical factor in the given organizational growth and retail |
|
| oriented
strategy. As an organization we are cognizant of the significance |
|
| of
this' area and are committed to invest the necessary resources in- |
|
| order
to sustain our growth. The devotion and hard work of the |
|
| employees
is appreciated and we are aware that the results of the |
|
| company
are reflective of their commitment and diligence. |
|
|
| CREDIT
RATING |
|
| The
Pakistan Credit Rating Agency (PACRA), has maintained Askari |
|
| Leasing's
entity rating at "A" for long term and "A1" for short
term |
|
| obligations
based on the results of June 30, 1999. |
|
|
| AUDITORS |
|
| The
Auditors, M/s Taseer Hadi Khalid & Company, Chartered Accountants, |
|
| retire
and being eligible offer themselves for re appointment. |
|
|
| PATTERN
OF SHARE HOLDING |
|
| The
Pattern of share holding of the Company as at June 30, 2000 is |
|
| annexed
to the financial statements. |
|
|
| ACKNOWLEDGEMENT |
|
|
| The
Board wishes to place on record its thanks to our customers, COI |
|
| holders,
bankers, credit rating agency and shareholders for their |
|
| undeterred
support to the company. We take this opportunity to thank |
|
| Securities
and Exchange Commission of Pakistan, State Bank of |
|
| Pakistan
and other regulatory authorities for their on-going guidance |
|
| and support. |
|
|
|
|
|
| Rawalpindi |
|
|
Lt. Gen. ( R ) Mohammad Afsar |
|
| November21,
2000 |
|
CHAIRMAN/DIRECTOR |
|
|
|
| Taseer
Hadi Khalid & Co |
|
| Chartered
Accountants |
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
| OF
ASKARI LEASING LIMITED |
|
|
| We
have audited the annexed balance sheet of Askari Leasing Limited as at 30
June 2000 and the related profit and |
|
| loss
account, cash flow statement and statement of changes in equity 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 purpose of our audit. |
|
|
| It
is the responsibility of the company's management to establish and maintain a
system of internal control, and |
|
| prepare
and present the above said statements in conformity with the approved
accounting standards and the requirements |
|
| of
the Companies Ordinance, 1984. Our responsibility is to express an opinion on
these statements based on |
|
| our audit. |
|
|
| We
conducted our audit in accordance with the auditing standards as applicable
in Pakistan. These standards require that |
|
| we
plan and perform the audit to obtain reasonable assurance about whether the
above said statements are free of any |
|
| material
misstatement. An audit includes examining, an test basis, evidence supporting
the amounts and disclosures in |
|
| the
above said statements. An audit also includes assessing the accounting
policies and significant estimates made by |
|
| management,
as well as, evaluating the overall presentation of the above said statements.
We believe that our audit |
|
| provides
a reasonable basis far our opinion and, after due verification, we report
that: |
|
|
| (a)
in our opinion, proper books of accounts have been kept by the company 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 policies consistently applied; |
|
|
| (ii)
the expenditure incurred during the year was for the purpose of the company's
business; and |
|
|
| (iii)
the business conducted, investments made and the expenditure incurred during
the year 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, cash flow statement and statement of changes in equity
together with the notes forming |
|
| part
thereof conform with approved accounting standards as applicable in Pakistan,
and, 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 2000 and of the profit, its
cash flows and changes in equity |
|
| for
the year then ended; and |
|
|
| (d)
in our opinion Zakat deductible at source under the Zakat and Ushr Ordinance,
1980 (XVIII of 1980), was deducted |
|
| by
the company and deposited in the Central Zakat Fund established under Section
7 of that Ordinance. |
|
|
| ISLAMABAD |
|
|
TASEER HADI KHALID & CO. |
|
| November
21, 2000 |
|
CHARTERED ACCOUNTANTS |
|
|
|
| BALANCE
SHEET AS AT JUNE 30, 2000 |
|
|
|
|
|
2000 |
1999 |
|
|
|
Note |
(Rupees) |
(Rupees) |
|
|
|
| ASSETS |
|
| Fixed
Assets- Tangible |
|
3 |
35,178,180 |
21,666,770 |
|
| Long
Term Advances |
|
4 |
8,961,939 |
9,162,723 |
|
| Deferred Costs |
|
|
|
333,300 |
1,363,566 |
|
| Long
Term Investments |
|
5 |
5,000,000 |
5,000,000 |
|
|
| Net
Investment in Lease Finance |
|
| Minimum
lease payments |
|
|
6,384,965,976 |
4,762,160,950 |
|
| Add:
Residual value |
|
|
787,968,712 |
692,964,511 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
7,172,934,688 |
5,455,125,461 |
|
| Less:
Unearned finance income |
|
|
1,782,882,836 |
1,337,381,464 |
|
|
|
|
------------------ |
------------------ |
|
| Net
investment in lease finance |
|
6 |
5,390,051,852 |
4,117,743,997 |
|
| Less:
Current portion |
|
|
1,866,931,936 |
1,216,053,481 |
|
| Allowance
for potential lease losses |
2.4 |
162,213,941 |
131,591,211 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
3,360,905,975 |
2,770,099,305 |
|
|
| Current Assets |
|
7 |
3,810,834,939 |
2,810,393,318 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
7,221,214,333 |
5,617,685,682 |
|
|
|
========== |
========== |
|
|
|
|
| CAPITAL
AND LIABILITIES |
|
| Share
Capital and Reserves |
|
|
|
| Share capital |
|
8 |
324,000,000 |
240,000,000 |
|
| Reserves |
|
9 |
313,030,433 |
286,739,723 |
|
| Unappropriated
profit |
|
|
1,821,716 |
1,458,893 |
|
|
|
|
|
------------------ |
------------------ |
|
|
|
638,852,149 |
528,198,616 |
|
|
|
|
| Redeemable
Capital |
|
10 |
-- |
83,333,167 |
|
| Long
Term Liabilities |
|
11 |
4,690,094,116 |
2,740,377,414 |
|
| Current
Liabilities |
|
12 |
1,892,268,068 |
2,265,776,485 |
|
| Contingencies
and Commitments |
|
13 |
------------------ |
------------------ |
|
|
|
|
7,221,214,333 |
5,617,685,682 |
|
|
|
========== |
========== |
|
|
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
|
| Rawalpindi |
|
Lt. Gen. ( R ) Mohammad Afsar |
|
Taimur Afzal |
|
| November
21, 2000 |
CHAIRMAN / DIRECTOR |
|
CHIEF EXECUTIVE |
|
|
|
| PROFIT
AND LOSS ACCOUNT |
|
| FOR
THE YEAR ENDED JUNE 30, 2000 |
|
|
|
|
Note |
2000 |
1999 |
|
|
|
|
(Rupees) |
(Rupees) |
|
| REVENUE |
|
| Lease income |
|
|
767,042,220 |
638,103,272 |
|
| Income
from short term investments |
|
107,017,212 |
47,758,522 |
|
| Income
from bank deposits |
|
|
117,784,215 |
111,038,374 |
|
| Other income |
|
|
820,076 |
689,946 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
992,663,723 |
797,590,114 |
|
|
| EXPENDITURE |
|
| Finance
and bank charges |
|
16 |
794,482,127 |
665,418,388 |
|
| General
and administrative expenses |
17 |
67,012,204 |
49,679,088 |
|
| Allowance
for potential lease losses |
|
30,615,859 |
11,591,211 |
|
|
|
------------------ |
------------------ |
|
|
|
|
892,110,190 |
726,688,687 |
|
|
|
|
------------------ |
------------------ |
|
| PROFIT
BEFORE TAXATION |
|
100,553,533 |
70,901,427 |
|
|
|
| PROVISION
FOR TAXATION |
|
9,100,000 |
8,500,000 |
|
|
|
|
|
| PROFIT
AFTER TAXATION |
|
91,453,533 |
62,401,427 |
|
| Unappropriated
Profit brought forward |
|
1,458,893 |
6,437,751 |
|
| Transferred
from general reserve |
|
15,000,000 |
115,000,000 |
|
|
|
------------------ |
------------------ |
|
| Profit
available for Appropriation |
|
107,912,426 |
183,839,178 |
|
|
|
|
| APPROPRIATIONS |
|
| Transferred
to reserve fund |
|
18,290,710 |
12,480,285 |
|
| Transferred
to deferred tax reserve |
|
23,000,000 |
46,900,000 |
|
| Transferred
to reserve for contingencies |
|
-- |
75,000,000 |
|
| Proposed
dividend @ 20% (1999:20%) |
|
64,800,000 |
48,000,000 |
|
|
|
------------------ |
------------------ |
|
|
|
106,090,710 |
182,380,285 |
|
|
------------------ |
------------------ |
|
| UN-APPROPRIATED
PROFIT CARRIED FORWARD |
1,821,716 |
1,458,893 |
|
|
========== |
========== |
|
|
| Earnings
Per Share-Basic |
|
19 |
2.82 |
2.60 |
|
| Earnings
Per Share-Diluted |
|
19 |
3.60 |
2.60 |
|
|
========== |
========== |
|
|
| The
annexed notes form an integral part of these accounts |
|
|
| Rawalpindi |
|
Lt. Gen. (R) Mohammad Afsar |
|
|
Taimur Afzal |
|
| November
21, 2000 |
CHAIRMAN / DIRECTOR |
|
|
CHIEF EXECUTIVE |
|
|
|
|
|
|
|
|
| STATEMENT
OF CHANGES IN FINANCIAL POSITION |
|
| FOR
THE YEAR ENDED JUNE 30, 2000 |
|
|
|
|
|
|
|
2000 |
1999 |
|
|
|
(Rupees) |
(Rupees) |
|
| Cash
flows from Operating Activities |
|
| Profit
before taxation |
|
100,553,533 |
70,901,427 |
|
| Adjustments
for: |
|
|
|
| Depreciation |
|
11,870,248 |
7,794,178 |
|
| Allowance
for potential lease losses |
|
30,615,859 |
11,591,211 |
|
| (Profit)/loss
on disposal of fixed assets |
|
280,570 |
(62,754) |
|
| Amortisation
of deferred costs |
|
1,030,266 |
978,767 |
|
| Provision
for diminution in value of shares |
|
(109,983) |
543,983 |
|
|
|
------------------ |
------------------ |
|
|
|
43,686,960 |
20,845,385 |
|
|
|
------------------ |
------------------ |
|
| Operating
profit before working capital changes |
|
144,240,493 |
91,746,812 |
|
|
|
|
|
| (Increase)/decrease
in: |
|
| Short
term investments |
|
|
(231,654,555) |
(22,511,115) |
|
| Advances,
prepayments and other receivables |
|
(182,986,800) |
(32,686,644) |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
(414,641,355) |
(55,197,759) |
|
| (Decrease)/increase
in current liabilities |
|
232,896,329 |
66,285,933 |
|
|
|
|
------------------ |
------------------ |
|
| Net
cash generated/(used) in operating activities |
|
(37,504,533) |
102,834,986 |
|
|
|
|
| Cash
flows from Investing Activities |
|
| Purchase
of operating fixed assets |
|
(26,258,114) |
(8,725,238) |
