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ASIAN LEASING CORPORATION LTD.
CONTENTS
Company Information
Notice of the meeting
Directors' Report
Key Financial Data
Pattern of Shareholding
Statement of Compliance
Auditors' Report
Balance Sheet
Profit and Loss Account
Cash Flow Statement
Statement of Changes in Equity
Notes to the Accounts
COMPANY INFORMATION
Board of Directors:
Mr Muhammad Aslam Khan
Mr. Muhammad Zafamllah Khan
Dr Iftikhar All Khan
Mr. Sardar Hassan Sadiq
Mr. Manzoor Ahmed			Nominee - NIT
Mr. Hasan Aziz Bilgrami			Nominee - NIT
Mr. Karim Hatim			Nominee - NBP
Mr. Shafique Khan			Nominee - NBP
Mr. Rizwan A. Punjwani			Nominee - NBP
Mr. Arif Ahmad			Chief Executive
Company Secretary & CFO
Mr. Muhammad Tahir
Bankers to the Company:
The Bank of Punjab
Faysal Bank Limited
Muslim Commercial Bank Limited
National Bank of Pakistan
Industrial Development Bank of Pakistan
Auditors:
Ford, Rhodes. Robson. Morrow
Chartered Accountants
Legal Advisor:
Mr. Tariq Kama! Qazi
Advocate High Court / Supreme Court
Registrars and Share Transfer Office:
Noble Computer Services (Private) Ltd.-
14-Banglore Town Housing Society, Sharae Faisal,
Karachi.
Registered Office
& Head Office;
Happy Home # 10.
38 - A. Main Guibcrg. Lahore.
Tel: (042)571 7367-9
Fax;(042)571 7504
E-mail : alc:aj.bram.net.pk
Branch Office:
204 - Clifton Centre.
Khayaban-e-Roomi. Clifton.
Karachi.
Tel : (042) 583 5936 , 586 6095
Fax: (042)5873573
NOTICE OF ANNUAL GENERAL MEETING
Notice is hereby given that the SIXTEENTH ANNUAL GENERAL MEETING of ASIAN LEASING
CORPORATION LIMITED will be held on Thursday 24th October. 2002 at the registered office of the
company at Happy Home # 10 , 38 - A. Main Gulberg. Lahore at 11.00 a.m. to transact the following
business:-
1  To confirm the minutes of 15th Annual General Meeting of the Company held on 3P1 January 2002
2. To receive, consider and adopt the Audited Accounts for the year ended June 30. 2002 together
with the Directors' and Auditors' reports thereon,
3  To appoint Auditors and fix their remuneration. The present Auditors Messrs Ford- Rhodes.
Robson- Morrow. Chartered Accountants, retire and being eligible, offer themselves for re-
appointment.
4  To transact anv other business with the permission of the Chair.
BY ORDER OF THE BOARD
Lahore				MUHAMMAD TAHIR
30 September. 2002				COMPANY SECRETARY
NOTES:
1       Tlie Register of Members of tlic Company will remain closed from 18'11 October. 2002 to 24''' October.
2002 (bolh days inclusive) and no transfer of shares will be made during llie period llic register is closed.
2.      A member entitled to attend and vole at the General Meeting is enlitled to appoint another member as his /'
her proxy to allend and vote on his / her behalf.
3       Instrument appointing proxy and the power of attorney or oilier authority under which it is signed or a
nolariall\ certified copy of the power or authority must be deposited at tlie registered office ofllic
Company at leasi 4S liours before the time ofllie meeting.
4       Shareholders arc requested to notify any change in address immediately.
DIRECTORS' REPORT TO THE MEMBERS
The Board of Directors of Asian Leasing Corporation Limited, feels pleasure in presenting the 16th
Annual Report together with Audited Accounts of the company and Auditor's Report thereon for the
year ended June 30, 2002.
The past few years of economic turmoil that developed in South-East Asia affected manv countries in
the region including Pakistan, especially the terrorist attack in New York on II* September 2001
drastically changed the geo-political situation of the world economies
Another factor, which has brought negative economic pressure on the economies of the region was the
Indian troops concentration along with Pakistani borders.
Under the difficult circumstances narrated above, it is a pleasure to inform vou that the company had
been able to post an after tax profit ofRs. 118.440/- as compared to last year's loss of Rs.(33.645,848)
Financial Results
Following are the financial results of the Company for the period under review:
				2002	2001
				(Rupees)	(Rupees)
Revenue				11,410,875	14,312,217
Expenditure				12.602.435	40,703,789
Profit/(Loss) before tax				1191,56	26,391,572
Taxation				1,310,000	7,254,276
Profit/(Loss) after Tax				118,44	33,645,848
Transferred to Special Reserve				23,688	-
Accumulated loss earned forward				84,058,457	84,153,209
Despite the economic conditions narrated above. ALC was still able to maintain its operations and as a
result Rs.23 million were recovered during the year 2001-2002. However, due to cancellation of the
Company's license to operate as a leasing company, new business could not be generated by the
company. It affected the Balance Sheet footing which reduced from Rs.134,134,742/- to
Rs.l 16.667.735/- The company was able to pay off its loan installments of Long Term Loan and other
financial obligations in time.
From the financial highlights given above- it can be observed that there has been a major change in the
Financial Charges and Administrative and operating expenses, which have been reduced b> 43% and
21% respectively during the period under review.
FUTUREOLI LOOK
As in the past the C ompanv continues its efforts to conform to the requirement of SECP to raise the
company's paid-up capital to Rs. 200 million. In tins regard an attempt was made to merge ALC'L's
operations \with another leasing company. Unfortunate^ it did not fall through due to certain reasons.
However. the company has signed a M.O.U. with one of the leading Investment Banks to merge its
operations. Currenth its due diligence is in process.
The management believes that the merger \vitli linestment Bank will be of greater advantage and
benefit to the shareholders in the long run.
CODE OF CORPORATE Ci0\ERNANCE
Earning Per Share
The earning per share for the period under review is Rs. 0.01 as compared to Rs (3.22) in vear 2001.
Summary of key Operating and I manual data of last six years
A summarv ofkev operating and financial results for the last six vears is annexed to this report.
Outstanding Statutory Payments
There are no outstanding statutory payments on account of taxes- duties, levies and charges except of a
normal and routine nature
Significant Plans and Decisions
The company is making all out efforts to meet the capital adequacy requirement of Rs 200 million and
to merge its operations with some sound Financial Institution so that the shareholders could be benefited
in the long run.
Provident Fund
The company lias an established Provident Fund. The trustees of the Fund are managing the funds
axailable in this account which amounts to Rs. 1.777.371/- as on June 30. 2002.
Meetings of the Board of Directors
Three meetings of the Board of Directors of the Company were held in the period under review i.e. on
7 January 2002. 27 February 2002 and 16 March 2002".
Following is the attendance of the directors:
Names of Directors                           No. of Meetings attended
Mr. M Aslam Khan		2
Mr M. Zafarullah Khan		3
Dr Iftikhar A Khan		3
Sardar Hassan Sadiq		-		*
Mr. Manzoor Ahmed Khan		3
Mr. Hasan Aziz Bilgrami		1		**
Mr. Karim Hatim		3
Mr Rizwan A. Punjwani		-
Mr. Shafique Khan		2
*      Appointed on the Board of Directors of Asian Leasing Corporation on 30-06-2002.
**     Co-Opted on the Board of A.L.C.L. as Nominee NIT. on 16th March. 2002 in place
of Mr. Syed Haroon Rashid
Corporate Review
During the period under review, a Committee of the executive staff has been formed to frame policies in
compliance of the Code of Corporate Governance and revamp the Company's operations
Statement in compliance of the Code of Corporate Governance
The directors state that:
a. The financial statements prepared by the management present a true and fair state of the affairs
of the company.
b. Proper books of accounts 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 the
preparation of the financial statements and any departure there from has been adequately
disclosed.
e. The system of internal control is reasonably sound and has been effectively implemented and
monitored.
f. With reference to last paragraph of Auditor's report, we don't foresee any doubt regarding the
company's ability to continue as going concern, as the SECP has cancelled the license to
operate as a leasing company only.
g. There has been no material departure from the best practices of corporate governance, as
detailed in the listing regulations.
Audit Committee
The Board of Directors in compliance to the Code of Corporate Governance has established an Audit
Committee and it comprises of the following members:
1      Mr M Aslam Khan		(Director)
2      Mr M Zafarullah Khan
3.     Mr. Sardar Hassan Sadiq
Pattern ofSli;ireholding
The statement of pattern of shareholding as at June 30. 2002 is annexed to this report.
Auditors
The present auditors. Messers Ford. Rhodes. Robson, Morrow- Chartered Accountants retire and being
eligible to offer themselves for re-appointment for the year 2002-2003.
Acknowledgement
The Directors \vould like to express their gratitude to the authorities of State Bank of Pakistan and
Securities and Exchange Commission of Pakistan for their continued support and encouragement. We
would also like to thank our valuable clients- financial institutions and shareholders for their continued
support and cooperation Appreciation is also placed on record for the dedicated hard work put in bv the
staff of the Corporation.
ON BEHALF OF THE BOARD
Lahore : 30 September. 2002			ARIF AHMAD
			CHIEF EXECUTIVE
KEY FINANCIAL AND OPERATING DATA
(Rupees in thousands)
		2002	2001	2000	1999	1998	1997	1996
Total Assets		116.667	134,135	177.094	216,152	329,792	432,541	539,615
Net Investment in Leasing		127,397	146,503	152,802	169.885	265,823	373,031	461 923
Gross Lease Receivable		173,167	198,410	203.373	210,830	321.721	455,119	578,883
Current Assets		74,215	54,312	58,601	108,640	170627	205,763	253,580
Current Liabilities		39,107	43,669	49,998	92,986	138,083	148,638	165,059
Shareholders' Equity		58,951	58,832	92,478	75,796	82,118	135,216	142.985
Paid up Capital		104,544	104,544	104,544	104.544	104,544	104.544	104.544
Total Debt		6,634	16,543	25,000	49,518	122,266	172,325	262.176
Total Revenue		11,411	14,312	17,256	29,751	57,508	81,610	90,467
Profit / (Loss) after Tax		118	33,646	16,682	6.322	53,099	7,769	10,162
Earning per share - Rs.		0.01	-3.22	1.6	-0.6	-5.08	-0.74	-0.97
PATTERN OF SHAREHOLDINGS AS AT JUNE 30, 2002
Number Of	Shareholdings
Shareholders	From	TO	Total Shares Held
318	1	100	15,025
367	101	500	90,492
153	501	1,000	110,416
319	1,001	5,000	628,521
37	5,001	10,000	251,089
4	10,001	15,000	45,113
4	15,001	20,000	72,288
3	20,001	25,000	64,852
2	25,001	30,000	55,580
1	40,001	45,000	41,817
1	50,001	55,000	50,272
1	65,001	70,000	66,245
1	75,001	80,000	77,900
1	90,001	95,000	93,000
1	100,001	105,000	104,544
1	250,001	255,000	250,884
2	260,001	265,000	522,720
2	520,001	525,000	1,045,440
1	525,001	530,000	527,720
1	565,001	570,000	569.329
1	740,001	745,000	743,700
1	2,160,001	2,165,000	2,163,853
1	2,860,001	2,865,000	2,863,600
1,223			10,454,400
CATEGORIES OF SHAREHOLDERS AS AT JUNE 30, 2002
Categories of Shareholders		Number of	Shares Held	Percentage
		shareholders		(%)
INDIVIDUALS		1,199	3,461,807	33.113
INVESTMENT COMPANIES		4	253,649	2.426
INSURANCE COMPANIES		2	611,146	5.846
JOINT STOCK COMPANIES		7	885,954	8,474
FINANCIAL INSTITUTIONS		4	5,034,053	48.152
MODARBAS		4	91,922	0.879
FOREIGN INVESTORS		0	0	0
CO-OPERATIVE SOCIETIES		2	112,733	1.078
CHARITABLE TRUSTS		1	3,136	0.03
OTHERS		0	0	0
TOTAL		1,223	10,454,400	100
AUDITORS' REPORT TO THE MEMBERS
We have audited the annexed balance sheet of Asian Leasing Corporation Limited as at June 30, 2002 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 purposes 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 on a 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 for 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 accounts and are further in accordance with accounting policies consistently
applied, except for those mentioned in Note 2.4 to these accounts with which we concur;
(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,
except for the efforts of the matter referred to in paragraph (a) above, the balance sheet, profit
and loss account, cash flow statement and statement of changes in equity together with the notes
forming part thereof confirm 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 June 30,2002 and
of the profit, its cash flows and changes in equity for the year then ended: and
(d)    in our opinion no Zakat was deductible at source under the Zakat and Ushar Ordinance, 1980.
Without qualifying our opinion, we draw your attention to Note 1 to these accounts, which states that the
company's license to operate as a leasing company has been cancelled by the Securities and Exchange
Commission of Pakistan on December 24. 2001. This indicates that there is material uncertainty which
casts doubt about the company's ability to continue its leasing operations and, consequently, as a going
concern.
Lahore: September 30, 2002				FORD, RHODES, ROBSON, MORROW
				CHARTERED ACCOUNTANTS
BALANCE SHEET AS AT JUNE 30, 2002
			Notes	2002	2001
				(Rupees)	(Rupees)
EQUITY AND LIABILITIES
Capital and Reserves
Authorized Capital
25,000,000 (2001: 25,000,000) ordinary				250,000,000	250,000,000
shares of Rs.10/- each.
Issued subscribed and paid - up capital			3
Reserves
Special reserve			4	7,128,509	7,104,821
Generel reserve				31,336,477	31,336,477
Accumulated loss				84,058,457	84,153,209
				45,593,471	45,711,911
				58,950,529	58,832,089
NON - CURRENT LIABILITIES
Long Term and Deferred Liabilities
Long term loans - secured			5	-	6,633,969
Security deposits on lease arrangements			6	5,329,782	10,299,898
Provision for deferred tax				13,280,000	14,700,000
				18,609,782	31,633,867
CURRENT LIABILITIES
Current portion of long term liabilities			7	22,183,218	25,399,518
Accrued and other liabilities			8	16,730,774	10,075,836
Unclaimed dividend				193,432	193,432
				39,107,424	43,668,786
CONTINGENCIES			9	-	-
The annexed notes form an integral part of these accounts.
			Note	2002	2001
				Rupees	Rupees
ASSETS
NON CURRENT ASSETS
Tangible Fixed Assets			10	1,583,094	2,232,644
Net Investment in Lease Finance			11	40,278,695	69,331,473
Investments			12	591,080	8,258,296
				42,452,869	79,822,413
CURRENT ASSETS
Current portion of net investment in lease finance			11	28,618,199	18,698,139
Current portion of investments			13		-
Short term finance			14	-	-
Advances, deposits, prepayments
and other receivables			15	27,128,184	25,528,092
Cash and bank balances			16	10,668,483	10,086,098
				74,214,866	54,312,329
				116,667,735	134,134,742
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED JUNE 30, 2002
			Note	2002	2001
				Rupees	Rupees
REVENUE
Income from lease operations			17	9,152,662	8,260,562
Mark - up income			18	1,351,993	2,802,151
Other income			19	906,220	3,249,504
				11,410,875	14,312,217
EXPENDITURE
Administrative and operating expenses			20	9,152,662	11,559,498
Financial charges			21	2,307,787	4,054,326
Provision for diminution in value of long
term investments				-	358,704
Provision for doubtful receivables				1,275,185	24,731,261
				12,602,435	40,703,789
Loss before tax				1,191,560	26,391,572
Taxation			22	1,310,000	7,254,276
Profit / (Loss) after tax				118,440	33,645,848
Accumulated loss brought forward				884,153,209	50,507,361
Appropriations				84,034,769	84,153,209
Transfer to special reserve				23,688	-
Accumulated loss carried forward				84,058,457	84,153,209
Earning per share				0.01	3.22
The annexed notes form an integral part of these accounts.
CASH FLOW STATEMENT
FOR THE YEAR ENDED JUNE 30, 2002
				2002	2001
				Rupees	Rupees
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss before taxation				1,191,560	26,391,572
Adjustments for non - cash items
Depreciation				649,549	1,192,000
Amortization of deferred cost				-	109,652
Financial charges				2,307,787	4,054,326
Provision for doubtful receivables				1,257,185	24,731,261
Provision for diminution in value of
long term investments				-	358,704
Unrealized gain on investments				132,784	-
Interest income				1,219,209	3,232,535
				2,862,528	27,213,408
Operating profit before working capital changes				1,670,968	821,836
(Increase) / decrease in current assets
Advances, deposits, prepayments and other receivables				457,262	98,913
Increase / (decrease) in current liabilities
Current liabilities				1,455,062	291,547
				241,356	1,212,296
Tax paid				2,374,687	7,040,067
Financial charges paid				2,307,787	4,197,830
Gratuity paid				-	12,644
Interest received				1,219,209	2,229,352
				3,463,265	9,021,189
NET CASH FLOWS FROM OPERATING ACTIVITIES
AND BALANCE CARRIED FORWARD				3,704,621	7,808,893
				2002	2001
				Rupees	Rupees
Balance brought forward
CASH FLOWS FROM INVESTING ACTIVITIES
Net investment in lease finance recovered				22,483,717	33,612,543
Net investment in lease finance provided				3,376,326	27,314,050
Security deposits on lease arrangements received				384,950	3,531,294
Security deposits on lease arrangements repaid				5,295,514	7,037,544
Acquisition of fixed assets				-	37,450
Net cash from investing activities				14,196,827	2,754,793
CASH FLOWS FROM FINANCING ACTIVITIES
Customers' deposits - COIs				-	550,000
Repayment of long term loan				9,909,461	8,456,570
Net cash used in financing activities				9,909,461	9,006,570
Net increase / (decrease) in cash and cash equivalents				582,745	14,060,670
Cash and cash equivalents at the beginning of the year				10,086,098	24,146,768
Cash and cash equiavalents at the end of the year              A				10,668,843	10,086,098
A : Cash and cash equivalents
Cash and cash equivalents included in the csh flow statement comprise only cash and bank balances
as appearing in Note : 16 of these accounts.
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED JUNE 30, 2002
		Share		General	Accumulated
		Capital	Special Reserve	Reserve	Losses	Total
		RUPEES
Balance as on June 30,2000		104,544,000	7,104,821	31,336,477	50,507,361	92,477,937
Net loss for the year		-	-	-	33,645,848	33,645,848
Balance as on June 30, 2001		104,544,000	7,104,821	31,336,477	84,153,209	58,832,089
Net profit for the year		-			118,440	118,440
Transfer to Special Reserve		-	23,688	-	23,688	-
Balance as on June 30,2002		104,544,000	7,128,509	31,336,477	84,058,457	58,950,529
NOTES TO THE ACCOUNTS
FOR THE YEAR ENDED JUNE 30, 2002
1.    THE COMPANY AND ITS OPERATIONS
The company is a public limited company and is listed on the Karachi, Lahore and Islamabad Stock
Exchanges, The company is engaged in the business of lease financing.
The Leasing Companies (Establishment and Regulation) Rules, 2000 require that minimum paid up
capital of the company has to be Rs.200 (million) by the end of June 30. 2001. On December 24,
2001, the company's license to operate as a leasing company was cancelled by the SECP due to
non-compliance with the above requirement. Subsequent to the year end the company has signed a
Memorandum of Understanding (MOU) with an investment bank for merger.
2.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
2.1     Basis of preparation
These financial statements have been prepared in accordance with the requirements of
Companies Ordinance, 1984 and International Accounting standards as applicable in
Pakistan.
2.2    Accounting convention
The financial statements are prepared under the historical cost convention except investment
in listed securities which are being measured at fair value of these securities as at balance
sheet date.
2.3    Change in accounting policies
The company has adopted International Accounting Standard (IAS) 39 "Financial Instruments:
Recognition and Measurements" for the year ended June 30, 2002.   This has resulted
change in accounting policy of the company in respect of recognition and measurement of
financial instruments. There is no effect on the profit and loss account, assets and liabilities
due to adoption of IAS-39 except for, as stated in Note.2.11 to these accounts.
2.4    Tangible fixed assets and depreciation
Tangible fixed assets for own use are stated at cost less accumulated depreciation.
Depreciation on these assets is calculated applying the straight - line method at the rates
specified in Note 10 to these accounts, which are considered appropriate to write off the cost
of assets over their useful lives.
Full year depreciation is charged in the year of addition and no depreciation is charged in the
year of deletion.
Repair and maintenance costs are expensed out as and when incurred, however, major
renewals and improvements are capitalized. Gains and losses on disposal of assets, if any,
are recognized in profit and loss.
2.5    Deferred costs
These costs are to be written off over a period of five years from the year of incurrence.
2.6    Taxation
Current
Income for the purposes of computing current taxation is determined under the provisions of
tax law whereby lease rentals received or receivable by the company are deemed to be the
income. Provision for taxation is based on the taxable income at the current rate of tax after
taking into account applicable tax credits, rebates and exemptions available, if any, or on
0.5 % of the lease rentals receivable during the year (as per provisions of the section SOD of
the Income Tax Ordinance, 1979), which ever is higher.
Deferred
Deferred tax is provided using the liability method on all temporary differences arising at the
balance sheet date. between the tax bases of the assets and liabilities and their carrying
amounts.
The tax rates enacted at the balance sheet date are used to determine deferred income tax.
2.7    Revenue recognition
The company recognizes all "sales and lease back" and "direct leases" as finance leases.
The total unearned finance income, which consists of excess of aggregate lease rentals over
the cost of the asset, is deferred and amortized to income over the lease term using annuity
method so as to produce a systematic return on net investment in lease finance. This method
is applicable from July1, 1999 so as to comply with directive of ICAP issued through its
circular no. 9/99 of August, 1999. Income on leases disbursed prior to July 1. 1999 is
recognized on sum of the year digit method. Front-end fee and other lease related income is
recognized on receipt basis.
Bank profits and profits on investments are recognized on accrual basis.
Dividend on investments is recognized on receipt basis.
2.8    Foreign currency translation
Transactions in foreign currencies are accounted for at the rates prevailing on the date of
transaction. Assets and liabilities in foreign currencies are translated at the rate of exchange
prevailing on the balance sheet date except for foreign currency loans registered under the
Exchange Risk Cover Scheme of the Government of Pakistan, which are, if any, recorded at
the rate prevailing on the date of disbursement. Exchange difference, if any, arising from
translation at year-end rates is taken to profit and loss account.
2.9    Staff retirement benefits
The company had established an unfunded gratuity scheme for all permanent employees up
to March 1992 where after the scheme of Recognized Provident Fund has been introduced in
place of gratuity scheme under a trust established for this purpose. In this scheme, the
company and the employees both make equal contribution at the rate of 10% of the basic
salary of the employee.
2.10   Provision for doubtful receivables
A provision for doubtful receivables is maintained at a level, which, in the judgment of
management, is adequate and it can be reasonably anticipated. The provision made in the
accounts is in accordance with The Leasing Companies (Establishment and Regulation)
Rules, 2000, letters and circulars issued subsequently by the Securities and Exchange
Commission of Pakistan.
2.11   Investments
All investments are initially recognized at cost, being fair value of the consideration given
including acquisition charges associated with investments and are classified as either
available for sale or held to maturity.
After initial recognition, investments, which are classified as available for sale, are measured
at fair value. Investments intended to be held for an indefinite period of time which may be
sold in response to needs for liquidity or change in interest rates are classified as available for
sale. These are classified as non current unless management has intention of holding them
for less than 12 months from the balance sheet date in which case they are classified as
current assets.
Investments with fixed maturity for which management has intended and ability to hold till
maturity are classified as held to maturity investments. These are included in current or non
current assets keeping in view their period of maturity as at balance sheet date Investments
which are maturing in the twelve months from balance sheet date are classified as current and
the remaining are as non current.
Gains and losses (realized or unrealized) arising from a change in the fair value of
investments available for sale are recognized in the income.
All purchases and sales of investments are recognized on the trade date. which is the date on
which the company commits to purchase or sell the investments
Previously long term investments were stated at average cost less provision tor permanent
diminution in the value of investments if any in accordance with IAS 25 "Accounting for
Investments" and Technical Release 23 issued by the Institute of Chartered Accountants of
Pakistan, Had this change not been made, the value of investments as at June 30. 2002 and
Loss before tax for the year ended June 30, 2002 would have been, lower and higher
respectively by Rs.132,784/-
The fair value of the publicly traded investments is based on quoted market prices at the
balance sheet date.
2.12   Cash and cash equivalents
For the purpose of the cash flow statement, cash and cash equivalents comprise cash in hand
and at banks.
2.13   Financial instruments
Financial assets
Financial assets of the company comprise net investment in lease finance, investments in
securities, cash and bank balances and advance against leases. Net investment in leases is
shown at their nominal values as reduced by its provision while all other financial assets,
except investments, are stated at cost.
Financial liabilities
Financial liabilities are classified according to the substance of contractual agreement entered
into. Significant financial liabilities are long term loans and security deposits on lease
arrangements. Long term loans are shown at book value and significant terms and conditions
along with collateral policy is stated in Note 5 to these accounts. Security deposits are shown
at cost.
2.14   Offsetting of financial assets and financial liabilities
A financial asset and a financial liability is offset and the net amount is reported in the balance
sheet, if the company has the legally enforceable right to set off the transaction and also
intends either to settle on a net basis or to realize the asset and settle the liability
Simultaneously.
				2002	2001
				Rupees	Rupees
3.    ISSUED, SUBSCRIBED AND PAID-UP CAPITAL
5,000,000 (2001: 5,000,000) ordinary shares of
Rs.10/-each fully paid in cash				50,000,000	50,000,000
5,454,400 (2001:5,454,400) ordinary shares of
Rs.10/- each as fully paid bonus shares				54,544,000	54,544,000
				104,544,000	104,544,000
4.    SPECIAL RESERVE
This represents special reserve created under Rule-7 (vi) of The Leasing Companies (Establishment
and Regulation) Rules, 2000 issued by Securities and Exchange Commission of Pakistan (SECP), on
September 25, 2000.
				2002	2001
				Rupees	Rupees
5.    LONG TERM LOAN - SECURED
National Bank of Pakistan (NBP)				6,633,969	16,543,430
Less: Current portion			(Note : 7)	6,633,969	9,909,461
				-	6,633,969
5.1    The loan of Rs.50.000,000/- has been obtained from NBP (former NDFC) under a sale and
repurchase agreement for financing leasing operations of the company The repurchase price
is Rs.79,271,070/- which was repayable in 6 equal semi annual installments commencing
from December 15, 1998.   However, after the payment of third installment the remaining
balance has been rescheduled and is payable in 6 equal semi annual installments with a
mark-up rate of 16.5% per annum.
The facility is secured by way of (a) hypothecation charge on the entire assets and
undertakings of the company, (b) mortgage charge on all present and future fixed assets of
the company, (c) floating charge on all property, assets of the company and (d) demand
promissory note.
6.    SECURITY DEPOSITS ON LEASE ARRANGEMENTS
Security deposits on lease arrangements				20,879,031	25,789,955
Less : Current portion			(Note : 7)	15,549,249	15,490,057
				5,329,782	10,299,898
6.1     These represent interest free security deposits received against lease contracts and are
adjustable / repayable at the expiry of their respective lease periods.
7.    CURRENT PORTION OF LONG TERM LIABILITIES
Long term loan			(Note : 5)	6,633,969	9,909,461
Security deposits on lease arrangements			(Note : 6 )	15,549,249	15,490,057
				22,183,218	25,399,518
8.    ACCRUED AND OTHER LIABILITIES
Accrued liabilities				304,333	768,992
Mark - up on secured loan				44,993	112,178
Provision for taxation (Note 8.1)				15,867,325	15,757,325
Other liabilities				514,123	1,437,341
				16,730,774	18,075,836
8.1     Provision for taxation includes provision for Corporate Assets tax that comprises
Additional Tax and penalty aggregating to Rs.2,124,667/- (2001: 2,124,667/-) levied for
alleged late payment of the tax and filing of return. The company does not accept that it
is subject to this tax and is contesting the levies in appeal.
9. CONTINGENCIES
A customer has filed suit against the company for the recovery of security deposit and mark up on
it, amounting to Rs.3,538,135/- (2001: 3,538,135/'-) which is pending in the court. The company
has also filed a counter suit for the amount receivable from this party
10. TANGIBLE FIXED ASSETS
PARTICULARS		COST			DEPRICIATION					RATE        %
		As At July 1 2001	Additions /	As At June	Accumulated	Charge For	Adjustment	Accumulated	Book Value
			Deletions	30 2001	As At July	The Year	For The Year	As At June	As At June
					01 2001			30 2002	31 2002
Building - freehold		2,430,520	-	2,430,520	1,154,499	121,526	-	1,276,025	1,154,495	5
Leasehold improvements		362,915	-	362,915	362,914	-	-	362,914	1	15
Air-conditioning plant an
electric installations		824,170	-	824,170	630,256	71,186	-	701,442	122,728	15
Furniture and fixtures		852,723	-	852,723	639,611	60,683	-	700,294	152,429	10
Office machines and
equipments		2,887,484	-	2,887,484	2,488,646	245,398	-	2,734,044	153,440	15 - 33
Vehicles		2,441,620	55,600	2,386,020	2,290,862	150,756	55,599	2,386,019	1	20
	2002	9,799,432	55,600	9,743,832	7,566,788	649,549	55,599	8,160,738	1,583,094
	2001	9,761,982	37,450	9,799,432	6,374,788	1,192,000	-	7,566,788	2,232,644
11. NET INVESTMENT IN FINANCE				2002	2001
				Rupees	Rupees
Lease payments receivable				159,771,303	176,078
Add : Residual Value				13,395	22,331,558
Gross: investment in leases				173,166,502	198,409,751
Less : Unearned finance income				45,769,965	51,906
Net investment in finance leases				127,397	146.503,928
Less : Current portion				28,618,199	18,698,139
	Provision for doubtful receivable			58,499,643	58,474,316
				40,278,695	69,331,473
11.1 The minimum lease payments and their present value are regrouped as follows:
		2002		2001
		Minumum Lease	Present Value Of	Minimum Lease	Present Value Of
		Payments	Minimun Lease	Payments	Minimun Lease
			Payment		Payment
Due not later than one year		41,207,112	28,618,199	48,050,837	18,698,140
Due later than one year
but not later than five years.		131,959,390	98,778,338	150,358,914	127,805,788
		173,166,502	127,396,537	198,409,751	146,503,928
				2002	2001
				Rupees	Rupees
14. SHORT TERM FINANCES-SECURED AND DOUBTFUL
Short term morabaha finances				207,335	207,335
Less : Provision for doubtful finance				207,335	207,335
				-	-
14.1   These have been provided under morabaha agreements with aggregate resale price of
Rs.230,145 (2001: 230,145) repayable within one year. These are secured by demand
promissory notes and personal guarantees of the directors of the respective loanee
companies.
15.   ADVANCES, DEPOSITS, PREPAYMENTS AND OTHER RECEIVABLES
				2002	2001
				Rupees	Rupees
Advances - Considered good and secured
- Chief Executive			(Note: 15.1)	36,741	71,489
- Executive			(Note: 15.2)	146,719	154
Employees				116,152	215,249
Accrued Income			(Note : 15.3)	2,242,724	2,155,293
Deposits 170.700				170,700	170,700
Prepayments			(Note : 15.4)	127,753	101,456
Advance against leases			(Note :15.5)	556,578	1,113,157
Advance tax paid				22,824,443	20,449,756
Other receivables - considered good and unsecured				906,374	1,096,960
				27,128,184	25,528,092
15.1   This represents advance provided to the Chief Executive for the house rent, which carries
mark- up at the rate of 12.5 % (2001 : 12.5%) per annum and is deducted in equal
monthly installments from his salary. Maximum balance outstanding during the year at
any month end was Rs.68,724/- (2001 : 71.489/-)
15.2   This represents the advances given to executives for the house rent and maintenance,
carries Mark - up at the rate of 12.5 % (2001 : 12.5%) per annum and is deducted in
monthly equal installments from their salaries. Maximum aggregate balance outstanding
during the year at any month end was Rs-192,135/- (2001 : Rs.228,7237)
				2002	2001
				Rupees	Rupees
15.3   Accrued Income
Bank deposits				540,427	557,799
Mark up in respect of advance				675,279	430,384
against lease - doubtful
Less : Provision				675,279	-
				-	430,384
FIBs				374,456	449,956
Lease operations				1,327,841	717,151
				2,242,724	2,155,293
15.4   This includes advance rent paid to Associated Undertaking amounting Rs. 60,000
(2001: Nil)
15.5   Advances against leases - Secured and doubtful
Receivable				1,113,157	1,113,157
Less : Provision for doubtful receivable				556,579	-
				556,578	1,113,157
16.   CASH AND BANK BALANCES
Cash at bank
On deposit accounts				9,676,576	9,071,806
On current accounts				866,907	919,189
Cash in hand				125,000	95,103
				10,668,483	10,086,098
17.   INCOME FROM LEASE OPERATIONS
Marks-up on lease operations				8,367,867	7,443,525
Late payment charges				767,771	469,773
Front end fees				9,024	191,104
Lease documentation charges				8,000	156,160
				9,152,662	8,260,562
18.    MARK-UP INCOME
Federal Investment Bonds				171,997	1,170,000
Unrealized gain on investments (Note:12.1)				132,784
Mark-up income				244,895	430,384
Bank deposits				802,317	1,201,767
				1,351,993	2,802,151
19.   OTHER INCOME
Bad debts written off - Now recovered				766,000	3,249,504
Miscellaneous Income				140,220
				906,220	3,249,504
				2002	2001
				Rupees	Rupees
20. ADMINISTRATIVE AND OPERATING EXPENSES
Salaries and benefits (Note 20.1)				4,115,204	4,745,616
Rent, rates and taxes				607,637	419,493
Utilities				386,110	519,392
Printing, stationery and supplies				224,854	400,684
Computer and software				-	16,000
Repairs and maintenance				625,541	891,833
Depreciation (Note :10)				649,549	1,192,000
Amortization of deferred Costs ( Note:20.4)				-	109,652
Insurance				151,351	135,747
Telephone, telex and postage				521,061	761,714
Travelling				269,055	508,079
Boarding and lodging				136,157	156,701
Legal and professional charges				491,194	927,862
Auditors' remuneration (Note : 20.2)				115,000	154,270
Penalty (Note : 20.3)				55,875	-
Advertisement				122,955	86,490
Zakat				-	3,554
Miscellaneous				565,920	530,411
				9037463	11559498
20.1 This includes contribution to recognized provident fund in respect of Chief Executive
amounting to Rs. 60,000/- (2001:47,200/-) and in respect of other employees amounting to
Rs.113,604 (2001:125,218/-)
20.2 Auditors' Remuneration
Audit fee				85,000	85,000
Accountancy Charges					50,000
Out of pocket expenses reimbursed				30,000	19,270
				115,000	154,270
20.3 Penalty was imposed by the income tax authorities due to non payment of tax in respect of
assessment year 1998 - 99
20.4 Deferred Cost
Opening balance				-	109,652
Less : Amortized during the year				-	109,652
				-	-
FINANCIAL CHARGES
Mark up on
- long term secured loans				2,268,256	3,745,383
- certificates of investment				-	3,945
Exchange loss				-	273,909
Bank charges				39,531	31,089
				2,307,787	4,054,326
TAXATION
Current				110,000	200,000
Deferred (Note 22.1)				1,420,000	6,700,000
Prior years' adjustment				-
				1,310,000	7,254,276
The company reversed the deferred tax amounted to Rs.20 million as provided against all
temporary differences in the financial statements in the year ended June 30. 1999 and opted
to make the provision for deferred tax in accordance with the requirements as stated in the
circular No.16 dated September 09, 1999 of Securities and Exchange Commission of
Pakistan (SECP).  This circular states that in order to achieve compliance with the revised
IAS 12, all leasing companies, during each of the five financial years beginning July 01,
1998 and ending June 30, 2003 shall provide deferred tax liability arising in that year
together with a further amount equal to one fifth of the un - provided deferred tax liability at
the beginning of the financial year ending June 30, 1999.
Deferred tax arising due to temporary differences is estimated at Rs.16.200,OOO/- (2001:
Rs.22,200.000/-) as at June 30. 2002.The company has reversed a deferred tax provision of
Rs.1.420.OOO/- (Comprising a reversal of Rs.6,000.000/- for the   current year and
Rs.4,580,000/- being one fifth of the deferred tax liability as June 30, 1998) to comply with the
requirements of SECP for deferred tax. Un-provided deferred tax amounts to Rs.4,580,000/-
shall be made by June 30, 2003.
REMUNERATION OF CHIEF EXECUTIVE, DIRECTORS AND EXECUTIVES
		Chief Executive		Executives
		2002	2001	2002	2001
		Rupees	Rupees	Rupees	Rupees
Managerial Remumeration		600,000	472,000	567,500	1,036,800
Bonus		-	50,000	-	77,100
Accommodation		270,000	212,400	241,965	421,560
Conveyance allowance				53,135	42,430
Utilities		120,000	20,000	65,270	121,680
Medical		65,000	99,000	61,800	90,852
Residential telephone		20,802	7,200		18,000
Bills re-imbursed		-	21,456	50,920	58,549
		1,075,802	882,056	1,040,590	1,866,971
Number of persons		1	1	5	6
The Chief Executive and 1 Executive are provided with company owned and maintained cars.
Fees paid to nine non - executive directors for attending meetings during the year is Rs. 6,000 (2001
9 Directors, fee paid Rs.13,500/-)
24. EARNING PER SHARE		2002		2001
		Numerator Rupees A	Denominator Shares B	Numerator Rupees A	Denominator Shares B
Profit/floss) Attributed to
ordinary share holders		118,440		33,645,848
Weighted average number of ordinary
shares outstanding during the year		-	10,454,400	-	10,454,400
		118,440	10,454,400	33,645,848	10,454,400
Earning per share (A/B) Rs		0.01		3.22
				2002	2002
				Rupees	Rupees
25. TRANSACTIONS WITH ASSOCIATED UNERTAKINGS
Rent paid				360000	360000
26. FINANCIAL INSTRUMENTS & RELATED DISCLOSURES
26.1   Effective mark-up rates
			2002		2001
				Percentage
Financial assets
Investment in leases finance			21 - 27		21 - 27
Long term investments			15		15
Bank balances			8 - 11.5		8 - 15.0
Financial liabilities
Long term loans			16.5		16.5
Credit Risk
Credit risk arises when one party to a financial instrument fails to discharge an obligation and
causes the other party to incur a financial loss.  Tlw management of the company has
established procedures to manage credit risk exposure including monitoring of client's credit
reviews, approvals by executive credit committee, conservative estimates of provision for doubtful
receivables and prudent use of collateral policy. The company also manages risk through an
independent credit and marketing department. The management is of the view that it is not
exposed to significant concentrations of credit risk as its financial assets are adequately
diversified in organizations of sound financial standing covering various industrial sectors a
segments.
A sector - wise breakdown of lease portfolio is as follows ,
		2002		2001
Cement		61,637,592	48.38	68,397,559	46.68
Energy, oil and gas		2,604,042	2.04	4,406,011	3.01
Steel, energy and automobiles		741,508	0.58	1,211,894	0.82
Electrical and electrical goods		15,473,869	12.15	15,523,869	10.6
Chemical, fertilizer and
pharmaceuticals		5,874,744	4.61	9,383,980	641
Transport communication		1,124,163	0.88	958,880	0.65
Textiles		12,587,732	9.88	14,171,713	9.67
Leather, footwear and tannery		3,957,196	3.11	5,136,201	3.51
Food, tobacco and beverage		2,207,569	1.73	2,768,444	1.89
Banaspati industries		173,778	0.14	596,839	0.41
Glass and ceramics		2,251,845	1.77	2,601,878	1.78
Miscellaneous		18,762,499	14.73	21,346,660	14.57
		127,396,537	100	146,503,928	100
26.3 Fair Value of Financial Instruments
The estimated fair value of financial instruments are not significantly different from their book value as
shown in these financial statements
26.4 Exposure to cash flow risk
The company exposure to risk associated with mark up rates on its financial assets and liaoilities
are summarized as follows :-
		2002
		Mark-Up Bearing		Non - Mark-Up Bearing		Total
		with-in One Year	One Year To	with-in One Year	One Year To
			Five Year		Five Year
		Rupees	Rupees	Rupees	Rupees
Financial assets
Long term investments		7,800,000			591,080	8,391,080
Net investment in lease finance		28,618,199	40,278,695			68,896,894
Advances, deposits &
other receivables		856,190		3,319,798		4,175,988
Cash & Bank Balances		9,676,576		991,907		10,668,483
		46,950,965	40,278,695	4,311,705	591,080	92,132,445
Financial Liabilities
Deposit Margins		-	-	15,549,249	5,329,782	20,876,031
Other liabilities		-	-	863,449	-	863,449
Unclaimed dividend		-	-	193,432	-	193,432
Current portion of Long term loan		6,633,969	-	-	-	6,633,969
		6,633,969	-	16,606,130	5,329,782	28,569,881
Net financial assets / liabilities		40,316,996	40,278,695	12,294,425	4,738,702	63,562,564
		2001
		Mark-Up Bearing		Non - Mark-Up Bearing		Total
		with-in One Year	One Year To	with-in One Year	One Year To
			Five Year		Five Year
		Rupees	Rupees	Rupees	Rupees
Financial assets
Long term investments		-	7,800,000	-	460,296	8,260,296
Net investment in lease finance		18,698,140	127,805,788	-	-	146,503,928
Advances, deposits &
other receivables		-	-	5,078,335	-	5,078,335
Cash & Bank Balances		9,071,806	-	1,014,292	-	10,086,098
		27,769,946	135,605,788	6,092,627	460,296	169,928,657
Financial Liabilities
Long term loan		9,909,461	6,633,969	-	-	16,543,430
Deposit Margins		-	-	15,490,057	10,299,898	25,789,955
Other liabilities		-	-	1,437,341	-	1,437,341
Unclaimed dividend		-	-	193,432	-	193,432
		9,909,461	6,633,969	17,120,830	10,299,898	43,964,158
Net financial assets / liabilities		17,860,485	128,971,819	11,028,203	9,839,602	125,964,499
27. LEASES AND ADVANCES IN EXCESS OF 20 % OF
PAID - UP CAPITAL AND FREE RESERVES
Following are the parties to whom net investment in lease finance exceeded 20 % of the paid up
capital and free reserves of the company.
Group name				2002
				Rupees
Gharibwal group				37,670,240
Pakland Cement				21,317,151
				2002	2001
28. NUMBER OF EMPLOYEES
	Total number of employees at year end			18	21
29. DATE OF AUTHORIZATION FOR ISSUE
	This accounts were authorised for issue on ________ by the Board of Directors of the Company
30. GENERAL
Figures have been rounded off to the nearest rupee and rearranged where necessary.
Chief Executive			Director

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