20000303

Brief

recordings

- BY SCANNER -

Leasing

InterAsia Leasing Company Limited

Year Ended June 30, 1999

Overview.........

The directors reported that the new management ushered in the fall of 1999. The new Board of Directors was formed with Mohammad Younas Khan as Chairman and Jameel-ur-Rahman as CEO. Rauf B. Kadri, Ashfaq Tola, Haroon Sharif, Naveed A. Khan, M. Aslam tendered their resignation. The new management took some far reaching initiatives such as large provisions in the lease and equity investment portfolios. Resultantly, the bottom line was in the red and the company's net investment in leases declined by 12.6% to Rs 291.86 million and long term investment portfolio also decreased by 45.4%. The company posted loss after taxation at Rs 47.12 million as compared to profit after taxation at Rs 14.22 million. Chairman has positive views about future prospects. He said, "the consolidation of the operations, implementation of prudent credit policies coupled with modern management techniques will take the company to sound health."

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InterAsia Leasing Company Limited was incorporated as a public limited company on November 30, 1992 and was listed at Karachi Stock Exchange in the following year. The share capital of this leasing company has remained constant at Rs 100 million since it commenced commercial operation.

At the last count on 30th June 1999, the closing date of the financial year 1998-99, there were 482 shareholders out of whom 410 shareholders were in the individual investors category. Their aggregate stake in the equity of the company was to the extent of 17.9%. Among the institutional investors, the largest category of investors comprised eleven financial institutions who owned 41.5% of the company's stock. This was followed by the eight Modarabas who held 28.3% of the company's stock. Three investment companies and three joint stock companies owned 1.07% and 3.47% respectively of the company's stock. Central Depository Company owned 5.9% of the company's stock.

Since, 1994 the company has paid cash dividend only twice, in 1994 and 1997 at 12.5% in each year.

The share in the company is listed in two stock exchanges i.e. Karachi and Islamabad. Since 1994, the highest price of its share was quoted in 1994 at Rs 31.50 per 10-rupee share. After that the share value met with wide fluctuations between above - par and below - par value. The lowest price of Rs 3.50 was quoted in 1996. The present ruling price is around the same and quoted at Rs 3.20 which is at 68% discount. The company has suffered massive loss during the year under review, therefore it is apprehended it will longer take time to restore the profitability in the enterprise. In the foreseeable future the situation can improve only with the assistance of the financial institutions who have also large stake in its equity.

During the period under review the company's income from leasing operations at Rs 59.4 million and gross revenue at Rs 53.67 million reflected 4.3% and 11.63% respectively decline as compared to preceding year's corresponding figures of Rs 62.08 million and Rs 60.77 million.

On the other hand, the investment portfolio did not generate income. In the preceding year the company turned net loss of Rs 1.99 million on account of the sale of listed securities.

The company's receivables were written off to the extent of 6.59 million so the "other" income's net balance turned into negative figure of Rs 5.68 million.

Administrative and operating expenses slightly decreased to Rs 10.33 million from Rs 11.14 million in the previous year. But financial charges increased to Rs 35.59 million from Rs 34.63 million in the previous year.

InterAsia Leasing remained profitable before booking the province for diminution in value of investments and potential lease losses.

But it booked large provision for Rs 17.16 million on account of diminution in the value of investments. Provision for potential lease losses were even large at Rs 37.71 million. Together, these provisions aggregated to Rs 54.87 million more than half of the paid-up capital.

The company turned pre-tax loss of Rs 47.12 million as compared to the pre-tax profit of Rs 14.53 million the preceding year.

Loss after taxation at Rs 56.50 million replaced the net profit figure of Rs 14.22 posted in the preceding year.

Long term investment portfolio was slashed by 45% from previous year's Rs 40.35 million and thus figure for 1998-99 was reduced to Rs 22.01 million only.

About 90% of the investment portfolio comprised investment in the securities of the associated undertakings, First Interfund Modaraba, Long Term Venture Capital Modaraba, Bankers Equity Limited and LTV Housing Finance Limited. The remaining 10% was in the FIB's with fixed income @ 14% p.a.

The core business of the company remains leasing. During the period under review, the company's net investment in lease finance declined by Rs 42.13 million from Rs 333.99 million in the previous year to Rs 291.86 million.

There was substantial decline in the net investment in lease financial while recovery position was better. Chairman, Mohammad Younas Khan informed "the new management ushered in the fall of 1999, was immediately entrusted with the responsibility of taking out annual audited accounts for the year 1998-99."

He informed about the change in the directorship of the company.

"Rauf B. Kadri, Ashfaq Tola, Inam-ul-Haq, Haroon Sharif, Naveed A. Khan tendered their resignation as directors of the company."

About the organisational changes he further informed,

"M. Jameel-ur-Rehman CEO a fellow of the Institute of Chartered Accountants in England and Wales and the Institute of Chartered Accountants of Pakistan, is well experienced in financial matters and modern management. He brings with him well diversified experience. M. Mohammad Younas Khan, Chairman is fellow of the Institute of Chartered Accountants in England & Wales and a fellow of Institute of Bankers, Pakistan. Your Chairman has rich experience in international banking in multinational environment. He is well connected in government, private and public sector.

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Performance Statistics (Million Rupees)

June 30 1999 1998

Capital & Liabilities.........

Paid-up Capital: 100.00 100.00

Reserves: 27.10 27.10

Unapp. Profit/(Loss): (49.80) 6.70

Shareholders' Equity: 77.30 133.80

L.T. Debts: 8.15 17.73

L.T. Cert/Investment: 3.56 62.51

L.T. Security Deposits on Leases: 35.96 42.66

Deferred Liabilities Taxation: 908 -

Current Liabilities: 225.09 183.22

Assets.........

Operating Fixed Assets - Tangible: 2.60 3.64

Net Investment in Leases: 230.92 248.78

L.T. Investments: 22.01 40.35

Other Non Current Assets: 1.57 2.28

Current Assets: 102.04 144.87

Total Assets: 359.14 439.92

Revenue, Profit & Payout.........

Lease Income: 59.36 62.08

Investment Income/(Loss): - (2.00)

Other Income: (5.69) 0.69

Gross Revenue: 53.67 60.77

Total Expenses & Provisions: 100.79 46.24

Profit/(Loss) Before Taxation: (47.12) 14.53

Profit/(Loss) After Taxation: (56.50) 14.22

Financial Ratios.........

Share Price (Rs) 24/2/2000: 3.20 -

Book Value Per Share (Rs): 7.73 13.38

Price/Book Value Ratio: 0.41 -

Debt/Equity Ratio: 10:90 12:88

Current Ratio: 0.45 0.79

Leasing Income/Total Income (%): 110.61 102.15

Net Profit/Total Income (%): (105.27) 23.33

Net EPS (Rs): (5.65) 1.42

Price/Earning Ratio: (-) -

R.O.E. (%): (-) 10.63

R.O.A. (%): (-) 3.23

R.O.C.E. (%): (-) 5.53

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Company information: Chairman: Mohammad Younas Khan. Chief Executive: Jameel-ur-Rehman. Director Nominee Saudi-Pak: M/s. Perveen A. Malik. Company Secretary: Salman Rashid ACMA. Registered Office/Head Office: 101, 82-East Fazalul Haq Road, F-7/G-7, Blue Area, Islamabad. Phone: (92-51) 206731-206272. Fax: (92-51) 201380.