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Askari Leasing Limited
Annual Report 2000
FINANCIAL HIGHLIGHTS 1996-2000
(Rupees in '000)
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%
CONTENTS
Corporate Information
Notice of Meeting
Directors' Report
Auditors' Report
Balance Sheet
Profit and Loss Account
Statement of Changes in Financial Position
Statement of Changes in Equity
Notes to the Accounts
Pattern of Shareholding
CORPORATE INFORMATION
BOARD OF DIRECTORS Lt. Gen. (R) Mohammad Afsar Chairman
Brig. (R) Ikram-ul-Hasan Director
Brig. (R) Muhammad Ayub Director
Brig. (R) Gul Zaman Satti Director
Mr. Javed Ahmed Noel Director
Mr. Khalid Sharwani Director
Mr. Shujat Ali Khan Director
Dr. Amjad Waheed Director (NIT Nominee)
CHIEF EXECUTIVE Mr. Taimur Afzal
COMPANY SECRETARY Mr. Zafar Alam Khan Sumbal
BANKERS Askari Commercial Bank Limited
American Express Bank Limited
ABN-AMRO Bank N.V.
Standard Chartered Grindlays Bank Limited
The Bank of Punjab Limited
Citibank N.A.
Emirates Bank International PJSC
Habib American Bank
United Bank Limited
The Hang Kong and Shanghai Banking Corporation Limited
Muslim Commercial Bank Limited
AUDITORS Taseer Hadi Khalid & Co.
Chartered Accountants
LEGAL ADVISORS Walker Martineau Saleem
Mr. M. Hanif Bhatti
REGISTERED
OFFICE/HEAD OFFICE 5th Floor, AWT Plaza,
The Mall, Rawalpindi.
Telephone: (051) 5511309-11, 5566153, 5515289
UAN 111-111-345
Fax: (051) 5565670
REGISTRAR AND SHARE
TRANSFER OFFICE Askari Associates (Pvt.) Ltd.
6th Floor, AWT Plaza, The Mall, P.O. Box 678, Rawalpindi.
Telephone: (051) 5514370-71,5516108
Fax: (051) 5516109
E.Mail: askari@isb.compol.com
NOTICE OF THE SEVENTH ANNUAL GENERAL MEETING
Notice is hereby given that the Eighth Annual General Meeting of Askari Leasing Limited will be held on Saturday, December
23, 2000 at 0930 hours, in Blue Lagoon Complex, Opposite Pearl Continental Hotel outward gate, Rawalpindi to transact
the following business:-
1. To confirm the minutes of the 7th Annual General Meeting of the company held on December 24, 1999.
2. To receive, consider and adopt the Audited Accounts together with Directors' and Auditors' Reports thereon for
the year ended June 30, 2000.
3. To appoint Auditors of the company for the year ending June 30, 2001 and to fix their remuneration. The present
Auditors being eligible, offer themselves for re-appointment.
4. To approve the payment of 20% cash dividend (Rs. 2.00 per share) as recommended by the Board of Directors
for the year ended June 30, 2000.
5. To transact any other business with the permission of the Chair.
By Order of the Board
Dated: November 21, 2000 Zafar Alam Khan Sumbal
Place: Rawalpindi Company Secretary
NOTES:
1. Closure of Share Transfer Books
The Share Transfer Books of the company will remain closed from December 16, 2000 to December 23, 2000
(both days inclusive). Cash dividend will be paid to the shareholders whose names appear on the Register of
Members on December 16, 2000.
2. Change in Address and Consolidation of Folios
Members are requested to immediately notify the change of address, if any, and ask for consolidation of folio
numbers, provided any member holds more than one folio, to our Registrar, Askari Associates (Private) Limited,
6th Floor, AWT Plaza, The Mall, Rawalpindi.
3. Participation in General Meeting
A member entitled to attend and vote at the meeting is entitled to appoint a proxy to attend the meeting and
vote for him/her. The form of proxy, duly completed, in order to be effective must be received by the company
at its Registered Office at least 48 hours before the meeting.
DIRECTORS' REPORT
The Board of Directors of your company is pleased to present the eighth annual report with audited accounts of the company for the
year ended June 30, 2000:
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
our collections. However, management of bad debts remains a major focus and we hope that the new institutional mechanism will
effectively deal with this issue. Leasing companies over the last fifteen years of operations in Pakistan have found a niche for themselves
in the financial market. They have proved to be an efficient and effective delivery vehicle for financial services. They have also played
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
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
become central to the marketing strategy and we feel it will be the
engine of growth for the next couple of years. The total disbursement
of Rs. 3.0 billion was represented by Rs. 2.0 billion in auto financing
while Rs. 1.0 billion was disbursed for machinery and equipment. Net
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
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
portfolio. We are exploring term finance certificates (TFCs) as part of
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
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)
Disposal of operating fixed assets 876,442 76,502
Long term advances (501,670) 82,562
Investment in lease finance (net) (1,272,307,827) (331,091,624)
------------------ ------------------
Net cash used in investing activities (1,298,191,169) (339,657,798)
Cash flows from Financing Activities
Deferred costs -- (909,000)
Issue of right shares 84,000,000 --
Redeemable capital (83,333,250) (83,333,250)
Certificates of investment 1,189,370,284 607,497,380
Deposits on lease contracts 125,494,437 133,815,458
Loans from financial institutions 3,791,258 (159,470,449)
Dividend paid (49,517,653) (45,162,947)
------------------ ------------------
Net cash from financing activities 1,269,805,076 452,437,192
------------------ ------------------
Net increase in cash and cash equivalents (65,890,626) 215,614,380
Cash and cash equivalents at the beginning of the year 406,955,514 191,341,134
------------------ ------------------
Cash and cash equivalents at the end of the year 341,064,888 406,955,514
========== ==========
Rawalpindi Lt. Gen. (R) Mohammad Afsar Taimur Afzal
November 21, 2000 CHAIRMAN / DIRECTOR CHIEF EXECUTIVE
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED JUNE 30, 2000
Share Reserve General Deferred tax Reserve for Unappropriated
capital fund reserve reserve contingencies profit
Balance as at June 30,1998 (Rs.)  240,000,000 76,359,438 171,000,000 -- -- 6,437,751
Net profit for the year 62,401,427
Proposed dividend (48,000,000)
Transferred from:
- General reserve (115,000,000) 115,000,000
- Deferred tax liability 20,000,000
Transferred to:
- Reserve fund 12,480,285 (12,480,285)
- Deferred tax reserve 46,900,000 (46,900,000)
- Reserve for contingencies 75,000,000 (75,000,000)
------------------ ------------------ ------------------ ------------------ ------------------ ------------------
Balance as at June 30,1999 (Rs.)  240,000,000 88,839,723 56,000,000 66,900,000 75,000,000 1,458,893
========== ========== ========== ========== ========== ==========
Issue of right shares 84,000,000
Net profit for the year 91,453,533
Proposed dividend (64,800,000)
Transferred from:
- General reserve (15,000,000) 15,000,000
Transferred to:
- Reserve fund 18,290,710 (18,290,710)
- Deferred tax reserve 23,000,000 (23,000,000)
------------------ ------------------ ------------------ ------------------ ------------------ ------------------
Balance as at June 30,2000 (Rs.)  324,000,000 107,130,433 41,000,000 89,900,000 75,000,000 1,821,716
========== ========== ========== ========== ========== ==========
Rawalpindi Lt. Gen. (R) Mohammad Afsar Taimur Afzal
November 21, 2000 CHAIRMAN / DIRECTOR CHIEF EXECUTIVE
NOTES TO THE ACCOUNTS
FOR THE YEAR ENDED JUNE 30,2000
1. COMPANY AND ITS OPERATIONS
Askari Leasing Limited ("the company") was incorporated in Pakistan as a public limited company on August 1, 1993 and
is listed on the Karachi, Lahore and Islamabad Stock Exchanges. The company principally carries on the business of leasing
and providing finance.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
2.1 Basis for Preparation
The accounts have been prepared in accordance with the accounting standards issued by the International Accounting
Standards Committee (IASC) and interpretations issued by Standing Interpretations Committee of the IASE, as
adopted in Pakistan and the requirements of the Companies Ordinance, 1984.
2.2 Accounting Convention
These accounts have been prepared under the historical cost convention.
2.3 Revenue Recognition
The company changed its revenue recognition policy for lease contracts executed on or after July 1, 1998. The
change of policy was made in 1998-99 to comply the provisions of revised International Accounting Standard for
Leases (IAS17) and to adhere to the directive dated August 1, 1999 issued by the Institute of Chartered Accountants
of Pakistan.
Lease Income
For Lease Contracts Executed to June 30, 1998
At the commencement of lease, total unearned lease income consists of excess of aggregate lease contract receivable
over the cost of the leased asset. At the time a lease is executed, a portion of unearned lease income which equals
the allowance for potential lease losses is charged to income. The remainder of unearned lease income is taken to
income over the term of lease, starting from the month in which the lease is executed, so as to produce a systematic
return on the net investment in the lease.
For Lease Contracts Executed after June 30, 1998
The company follows the "Finance Method "to recognize income on finance leases. At the commencement of lease,
total unearned lease income consists of excess of aggregate lease contract receivable over the cost of the leased
asset. Unearned finance income is amortized to income over the lease term by applying the annuity method to
produce a constant rate of return on net investment in the lease.
Income on Bank deposits and Investments
Profit on short term investments and bank deposits is accounted for on accrual basis.
2.4 Allowance for Potential Lease Losses
The allowance for potential lease losses is maintained at a level which, in the judgement of the management, is
adequate to provide for potential losses on lease portfolio that can be reasonably anticipated. The allowance
is increased by provisions charged to income and is decreased by charge off, net of
recoveries.
2.5 Fixed Assets and Depreciation
These are stated at cost less accumulated depreciation.
Depreciation is charged to income applying the straight line method whereby cost of the asset is written off over
its estimated useful life. In respect of additions and deletions of assets during the year, depreciation is charged
proportionately from the month of acquisition and up to deletion respectively. Minor maintenance and repairs are
charged to income as and when incurred.
Major renewals and improvements are capitalized and the assets so replaced, if any, are retired. Gains and losses
on disposal of assets, if any, are taken to profit and loss account.
2.6 Investments
Long term
These are stated at cost. Provision for diminution in value of investments is made, if considered permanent.
Short term
These are stated at lower of average cost and market value determined on an aggregate portfolio basis.
2.7 Taxation
Current
The charge for current taxation is based on taxable income at the current tax rates after taking into account tax
credits and tax rebates available, if any.
Deferred
Deferred tax is accounted for by using the liability method on all major timing differences arising due to recognition
of lease income by using different methods both for tax and accounting purposes.
2.8 Deferred Costs
These are written off within a period of five years from the date of occurrence.
2.9 Foreign Currency Transactions
Transactions in foreign currencies are accounted far in rupees at the rates of exchange ruling on the date of the
transactions. Monetary assets and liabilities in foreign currencies are translated into rupees at the rate of exchange
ruling at the balance sheet date, except for liabilities covered under State Bank of Pakistan exchange risk cover
scheme, which are translated at contracted rates. Exchange gains and losses are taken to the profit
and loss account.
2.10 Staff Retirement Benefits
The company operates a Staff Provident Fund scheme for all eligible employees. Equal monthly
contributions are made to the fund by the company and the staff at the rate of 8.33% of the basic
salary.
2.11 Offsetting of Financial Assets and Financial Liabilities
Financial assets and financial liabilities are offset at the year end and net amount is reported in the balance
sheet, if the company has a legally enforceable right to set off the recognized amounts and also intends to
settle the liabilities simultaneously. Corresponding income on assets and charge on liabilities are reported at
net amount.
3. FIXED ASSETS- TANGIBLE
Cost Cost of Cost Accumulated Book Value Depreciation Rate of
Particulars as at additions / as at depreciation as at as at for the year / depreciation
July 1,1999 (deletions) June 30,2000 June 30,2000 June 30,2000 (on deletions) per annum
Leasehold improvements
and structures 15,111,810 9,265,751 24,060,155 14,634,621 9,425,534 6,063,178 33%
(317,406) (274,722)
Furniture 2,020,482 4,571,166 5,959,148 695,897 5,263,251 329,384 10%
(632,500) (268,058)
Office equipment 15,284,617 8,835,312 22,528,537 9,390,160 13,138,377 3,474,186 20%
(1,591,392) (1,147,072)
Motor vehicles 9,914,460 3,585,885 13,344,766 5,993,748 7,351,018 2,003,500 20%
(155,579) (130,583)
------------------ ------------------ ------------------ ------------------ ------------------ ------------------
2000 (Rs.) 42,331,369 26,258,114 65,892,606 30,714,426 35,178,180 11,870,248
(2,696,877) (1,820,435)
========== ========== ========== ========== ========== ==========
1999 (Rs.) 33,895,415 8,725,369 42,331,369 20,664,599 21,666,770 7,794,178
(289,416) (275,668)
========== ========== ========== ========== ========== ==========
3.1 Disposals of fixed assets during the year
Description Cost Accumulated Book Sale Profit/(loss) Mode of Particulars
depreciation value proceeds on disposal disposal of purchaser
Almirah 8,500 1,133 7,367 1,500 (5,867) By Negotiation Fakhar Hussain (Employee)
Carpet 23,617 12,339 11,278 5,000 (6,278) By Negotiation Nasrullah Niazi (Employee)
Carpet 51,084 19,667 31,417 10,000 (21,417) By Negotiation Qaseem Ahmad (Employee)
Computers 105,500 68,575 36,925 9,000 (27,925) Trade in Leo Computers
Computers 181,000 117,650 63,350 18,000 (45,350) Trade in Leo Computers
Computers 156,000 119,600 36,400 23,400 (13,000) Trade in Leo Computers
Computers 151,350 97,536 53,814 21,689 (32,125) Trade in Leo Computers
Computers 151,350 97,537 53,813 21,689 (32,124) Trade in Universal Computers
Computers 452,500 286,583 165,917 64,954 (100,963) Trade in Leo Computers
Computer Table 6,500 704 5,796 1,500 (4,296) By Negotiation Babar Rafique (Employee)
Conference Chairs 22,000 14,483 7,517 5,000 (2,517) By Negotiation Artec (Pvt) Ltd., Islamabad
Corner Tables 40,500 26,662 13,838 1,500 (12,338) By Negotiation Artec (Pvt) Ltd., Islamabad
Wall Cabnets 82,000 23,233 58,767 25,000 (33,767) By Negotiation Artec (Pvt) Ltd., Islamabad
File Cabnets 20,250 4,556 15,694 3,000 (12,694) By Negotiation Artec (Pvt) Ltd., Islamabad
M Cycle-CD 70 45,073 24,790 20,283 17,000 (3,283) By Negotiation Iftikhar Ali Haider
Mobile 26,500 17,225 9,275 9,275 -- Insurance Claim AGICO
Mobile 15,000 9,750 5,250 5,250 -- Insurance Claim AGICO
Mobile 23,500 5,091 18,409 18,409 -- Insurance Claim AGICO
Office Table 21,600 7,020 14,580 8,000 (6,580) By Negotiation Artec (Pvt) Ltd. Islamabad
Planters 24,999 16,458 8,541 5,000 (3,541) By Negotiation Artec (Pvt) Ltd. Islamabad
Rev Chairs 22,000 14,483 7,517 5,000 (2,517) By Negotiation Artec (Pvt) Ltd. Islamabad
Rev Chairs 36000 11,100 24,900 15,000 (9,900) By Negotiation Artec (Pvt) Ltd. Islamabad
Rev Chairs 16,800 5,180 11,620 8,000 (3,620) By Negotiation Artec (Pvt) Ltd. Islamabad
Side Racks 21,600 14,220 7,380 5,000 (2,380) By Negotiation Artec (Pvt) Ltd. Islamabad
Side Racks 13,600 4,420 9,180 7,000 (2,180) By Negotiation Artec (Pvt) Ltd. Islamabad
Side Racks 38,880 11,988 26,892 18,000 (8,892) By Negotiation Artec (Pvt) Ltd. Islamabad
Sofa Set 7,470 2,303 5,167 2,000 (3,167) By Negotiation Artec (Pvt) Ltd Islamabad
Tables 39,600 12,210 27,390 18,000 (9,390) By Negotiation Maj. (R) Naseem Baz
Table 6,500 975 5,525 2,000 (3,525) By Negotiation Artec (Pvt) Ltd. Islamabad
Table/Side Racks 24,300 7,492 16,808 8,450 (8,358) By Negotiation Artec (Pvt) Ltd. Islamabad
Visiting Chairs 35,200 23,173 12,027 8,000 (4,027) By Negotiation Artec (Pvt) Ltd. Islamabad
Visiting Chairs 37,200 11,470 25,730 15,000 (10,730) By Negotiation Artec (Pvt) Ltd., Islamabad
Visiting Chairs 10,000 3,083 6,917 3,000 (3,917) By Negotiation Artec (Pvt) Ltd., Islamabad
Miscellaneous
Assets having
WDV less than
Rs. 5,000 each 778,904 727,746 51,158 207,256 156,098 By Negotiation Various parties/
employees
------------------ ------------------ ------------------ ------------------ ------------------
2000: (Rs.) 2,696,877 1,820,435 876,442 595,872 (280,570)
========== ========== ========== ========== ==========
1999: (Rs.) 289,416 275,668 13,748 76,502 62,754
========== ========== ========== ========== ==========
2000 1999
(Rupees) (Rupees)
4. LONG TERM ADVANCES- considered good
Chief Executive 2,774,703 2,905,609
Executives 5,590,103 6,047,393
Others 2,298,902 1,209,036
------------------ ------------------
10,663,708 10,162,038
Less: Installments recoverable within one year 1,701,769 999,315
------------------ ------------------
8,961,939 9,162,723
========== ==========
These are analysed as follows:
Outstanding for over three years 7,922,843 9,071,624
Others 1,039,096 91,099
------------------ ------------------
8,961,939 9,162,723
========== ==========
Maximum aggregate amount Outstanding
during the year in respect of Chief Executive and Executives 8,365,806 9,329,134
========== ==========
4.1 Advance to the Chief Executive represents an outstanding balance of house loan of Rs. 3,000,000 given in accordance
with the terms of agreement. The approval of the regulatory agency requires recovery of house loan to he made
within ten years. House loan carries a mark-up of 10% per annum.
Advances to executives represent house, transport and personal loans granted in accordance with Employees' Service
Regulations. These are recoverable within a period of 2 to 20 years and carry mark-up rates ranging between 5%
to 7.5% per annum.
5. LONG TERM INVESTMENTS
This represents investment in 575,000 (1999:500,000) ordinary shares of Rs. 10 each as 10% investment in the equity
of Askari General Insurance Company Limited- an associated listed company (market value as at June 30, 2000 Rs.
6,008,750 (1999: Rs. 6,000,000)}.
Investment in associated company is shown at cost. Had the equity method been applied, the total profit for the year would
have been higher by Rs.1,017,249 (1999:Rs.927,969) and carrying value of investment would be Rs. 7.625 million
(1999:Rs.6.608 million).
6. NET INVESTMENT IN LEASE FINANCE
This includes lease financing provided to the following customers having exposure of more than 20% of the company's equity
at the year end.
(Rupees)
Zaman Energy Limited 271 Million
Packages Limited 158 Million
Gharibwal Cement Limited 149 Million
Nishat Mills Limited 130 Million
Shell Pakistan Limited 124 Million
2000 1999
(Rupees) (Rupees)
7. CURRENT ASSETS
Current portion of net investment in lease finance 1,866,931,936 1,216,053,481
Short term investments 7.1 1,134,482,506 902,717,968
Advances, prepayments and other receivables 7.2 468,355,609 284,666,355
Cash and bank balances 7.3 341,064,888 406,955,514
------------------ ------------------
3,810,834,939 2,810,393,318
========== ==========
7.1 Short term Investments
Federal investment bonds 7.1.1 333,774,893 14,000,000
Treasury bills -- 29,323,036
Musharika financing -- 64,402
Financing agreements 7.1.2 35,916,877 22,721,418
Repurchase agreements 7.1.2 771,916 1,893,549
Short term placements 7.1.3 550,234,038 661,738,182
Term finance certificates 7.1.4 212,624,582 151,555,231
Equity investment 7.1.5 1,160,200 21,422,150
------------------ ------------------
1,134,482,506 902,717,968
========== ==========
Short term investment is shown net of purchase and resale agreement amounting to Rs.50 million for WAPDA Bonds.
7.1.1 This represents investment in federal investment bonds (FIBs) on which profit is receivable semi annually
@ 15% per annum. This includes FIBs of Rs. 83 million purchased uder reverse-repo arrangement.
7.1.2 These are secured against lien on shares of listed companies and certificates of investment (COIs) issued
by the company. The expected rate of profit ranges from 14.5% to 22.6% per annum.
7.1.3 These represent unsecured placement of funds with financial institutions. Rate of return on these placements
ranges between 14.75%to 19% per annum.
2000 1999
(Rupees) (Rupees)
7.1.4 Term finance certificates- Quoted
Gatron Industries Limited
4,000 (1999: 4,000) certificates of Rs. 5,000 each 19,984,000 19,992,000
ICI Pakistan Limited
21,648 (1999: 21,648) certificates of Rs. 5,000 each 55,260,523 92,253,940
Saudipak Leasing Company Limited
1,800 (1999: 1800) certificates of Rs. 5,000 each 6,880,659 9,181,424
First International Investment Bank Limited
100 (1999:100)certificates of Rs. 5,000 each 499,400 499,800
Dewan Salman Fibers Limited
3,000 certificates of Rs. 5,000 each 15,000,000 --
Sui Southern Gas Company Limited
200 certificates of Rs. 100,000 each -- 20,000,000
Packages Limited
2,000 certificates of Rs. 5,000 each -- 10,000,000
------------------ ------------------
Carried forward 97,624,582 151,927,164
Brought forward 97,624,582 151,927,164
Karachi Electric Supply Corporation Limited
23,000 certificates of Rs. 5,000 each 115,000,000 --
------------------ ------------------
212,624,582 151,927,164
Less: Provision for diminution in value -- 371,933
------------------ ------------------
212,624,582 151,555,231
========== ==========
The aggregate market value/agreed sale price of term finance certificates is Rs. 215.892 million (1999:
Rs. 152.673 million). Power Bonds of Karachi Electric Supply Corporation Limited are purchased under
reverse-repo arrangement.
7.1.5 Equity investment
Cost of investment 4,837,050 24,837,050
Less: Provision for diminution in value 3,676,850 3,414,900
------------------ ------------------
1,160,200 21,422,150
========== ==========
This represents investment in 352,600 ordinary shares of Rs. 10 each of 5hifa International Hospitals Ltd.
(Market value Rs. 1,145,950 (1999:Rs.1,410,400)) and 500 ordinary shares of Rs. 10 each of Sitara
Energy Ltd. {Market Value Rs.14,250 (1999:Rs.11,750)]..
7.2 Advances, prepayments and other receivables
Advances to employees 4 1,701,769 999,315
Advance against leases 7.2.1 22,131,637 8,178,380
Advance income tax 38,155,368 35,837,523
Recoverable from tax department-paid against demands 94,965,632 58,548,536
Other advances 5,962,862 12,250,576
Prepayments 865,076 2,577,818
Accrued income 209,769,090 144,352,744
Receivable from associated undertakings 7.2.2 9,058,214 8,604,368
Advances for purchase of vehicles 56,644,600 --
Others 7.2.3 29,101,361 13,317,095
------------------ ------------------
468,355,609 284,666,355
========== ==========
7.2.1 This represents advances given to suppliers for assets to he leased on behalf of lessees. Lessees are
being charged with mark-up of 49.32 to 63.01 paisas per thousand per day against these
advances.
7.2.2 These are made up as follows:
Army Welfare Trust 7,561,754 7,927,376
Askari General Insurance Co. Limited 1,496,460 676,992
------------------ ------------------
9,058,214 8,604,368
========== ==========
The maximum aggregate amount receivable at the end of any month during the year from associated
undertakings was Rs. 9,058,214 (1999: Rs. 11,095,760).
7.2.3 This includes an amount of Rs.978,830(1999: Rs.934,852) receivable from the State Bank of Pakistan
on premature termination of foreign exchange risk contracts.
7.3 Cash and bank balances
Cash in hand 137,497 74,473
Cash at bank on
Current accounts with:
State Bank of Pakistan 54,693,435 33,496,590
Commercial banks 19,747,128 3,928,940
Deposit accounts 255,779,318 358,568,003
Escrow account 10,707,510 10,887,508
------------------ ------------------
340,927,391 406,881,041
------------------ ------------------
341,064,888 406,955,514
========== ==========
8. SHARE CAPITAL
8.1 Authorized share capital
50,000,000 ordinary shares of Rs. 10/- each 500,000,000 500,000,000
========== ==========
8.2 Issued, subscribed and paid up share capital
28,400,000 (1999:20,000,000) ordinary shares of
Rs. 10/- each fully paid in cash. 284,000,000 200,000,000
4,000,000 ordinary shares of Rs. 10/-
each issued as fully paid bonus shares. 40,000,000 40,000,000
------------------ ------------------
324,000,000 240,000,000
========== ==========
8.2.1 Army Welfare Trust held 18,673,499 (1999: 12,874,800) ordinary shares of Rs. 10 each as on 30th
June 2000.
9. RESERVES
2000 1999
(Rupees) (Rupees)
Reserve Deferred tax Reserve For
General Fund Reserve Contingencies Total General Reserve Deferred tax Reserve For Total
Reserve (Note 9.1) (Note 9.2) (Note 9.3) Reserve Fund Reserve Contingencies
Balance as at 1st July 56,000,000 88,839,723 66,900,000 75,000,000 286,739,723 171,000,000 76,359,438 -- -- 247,359,438
Transferred from provision for
deferred taxation 20,000,000
Transferred from (to) Profit and
loss account (15,000,000) 18,290,710 23,000,000 26,290,710 (115,000,000) 12,480,285 46,900,000 75,000,000 39,380,285
------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------
Balance as at 30th June 41,000,000 107,130,433 89,900,000 75,000,000 313,030,433 56,000,000 88,839,723 66,900,000 75,000,000 286,739,723
========== ========== ========== ========== ========== ========== ========== ========== ========== ==========
9.1 Reserve fund
The reserve fund is created by transferring 20% of the profit after tax to the reserve fund. This reserve is required
to be maintained under the regulations for Non Banking Financial Institutions.
9.2 Deferred tax reserve
The International Accounting Standard for Taxes (IAS-12) requires that full amount of deferred tax liability should
be recognized during the year in which it arises. Securities & Exchange Commission of Pakistan in its circular No.16
dated September10,1999 states that in order to achieve compliance with the revised IAS-12, all leasing companies
during each of the five financial years commencing from July 1,1998 and ending on June 30,2003 should provide
for deferred tax liability arising in these years alongwith an additional amount of one-fifth of the unprovided deferred
tax liability for the previous years. Circular further states that if the amount required to be provided for deferred
taxation is transferred to a deferred tax reserve then such transfer would be considered as compliance to the
requirement of IAS-12.
The total deferred tax liability as of June 30,2000 amounts to Rs.159.3 million (1999:Rs.159.3 million). An            '
amount of Rs.23 million has been transferred to the deferred tax reserve against the unprovided liability for deferred
taxation for previous years.
9.3 Reserve for contingencies
This is a specific purpose reserve created to provide for possible losses on lease rentals receivable, which at present
is not available for distribution.
2000 1999
(Rupees) (Rupees)
10. REDEEMABLE CAPITAL
Term finance certificates 83,333,250 166,666,500
Less: Current portion 83,333,250 83,333,333
------------------ ------------------
-- 83,333,167
========== ==========
These represent non-participatory and registered term finance certificates issued by the company to commercial banks and
financial institutions. Profit on these term finance certificates is payable on semi annual basis at an expected rate of 17.1%
per annum. Term finance certificates are redeemable in six semi annual installments. These are secured by charge on specific
leased assets and related receivables. Face value of each certificate is Rs. 1 million.
11. LONG TERM LIABILITIES
Certificates of investment 11.1 3,892,927,401 2,202,495,843
Deposits on lease contracts 11.2 572,585,111 435,214,839
Long term loans 11.3 224,581,604 102,666,732
------------------ ------------------
4,690,094,116 2,740,377,414
========== ==========
11.1 Certificates of Investment
Balance as at June 30 4,757,051,601 3,567,681,317
Less: Current portion 864,124,200 1,365,185,474
------------------ ------------------
3,892,927,401 2,202,495,843
========== ==========
Balance of long term certificates of investment
is made up as follows:
Certificates of investment 3,805,319,897 2,154,023,305
Profit payable 87,607,504 48,472,538
------------------ ------------------
3,892,927,401 2,202,495,843
========== ==========
The certificates of investment (COIs) are issued for a period of three months to five years on a profit and loss sharing
basis at expected rates of profit ranging from 10.5% to 18.6% per annum.
11.2 Deposits on lease contracts
Balance as at 30th June 646,521,641 521,027,204
Less: Current portion 73,936,530 85,812,365
------------------ ------------------
572,585,111 435,214,839
========== ==========
These represent security deposits received from lessees under lease contracts and are refundable/adjustable at the
expiry/termination of the respective leases.
11.3 Long term loans
These are made up as follows:
Emirates Bank International P.J.S.C 11.3.1 16,664,667 49,997,000
Emirates Bank International P.J.S.C 11.3.2 23,344,434 32,373,447
Standard Chartered Grindlays Bank Limited 11.3.3 -- 4,166,666
Emirates Bank International P.J.S.C 11.3.4 6,700,000 --
The Bank of Punjab Limited 11.3.5 21,304,841 32,876,348
Standard Chartered Grindlays Bank Limited 11.3.5 21,304,841 32,876,348
Muslim Commercial Bank Limited 11.3.5 20,051,616 30,942,446
Muslim Commercial Bank Limited 11.3.6 158,353,590 --
Muslim Commercial Bank Limited 11.3.7 24,202,165 --
Islamic Investment Bank Limited 11.3.8 50,000,000 --
------------------ ------------------
341,926,154 183,232,255
Less: Current portion 117,344,550 80,565,523
------------------ ------------------
224,581,604 102,666,732
========== ==========
11.3.1 This represents a term finance facility of Rs. 100 million. The facility is repayable alongwith mark-up in 12
quarterly installments. The facility carries mark-up of 47.26 paisas per thousand per day and is secured
by first charge on specific leased assets and related receivables.
11.3.2 This represents a facility of Rs.40 million repayable in 48 equal monthly installments. The facility carries a
mark-up of 46.58 paisas per thousand per day and is secured by assignment of lease rentals.
11.3.3 This represents a term finance facility of Rs. 25 million repayable in six semi annual installments. The facility
carries a mark-up of 47.95 paisas per thousand per day and is secured by first charge on specific leased
assets and related receivables.
11.3.4 This represents a term finance facility of Rs. 6.7 million repayable in 12 equal quarterly installments. The
facility carries a mark-up of 41.10 paisas per thousand per day and is secured by first charge on specific
leased assets and related receivables.
11.3.5 These represent discounting of promissory notes of Shell Pakistan Limited representing rentals receivable. These
carry yield of 18.4% per annum and are payable in quarterly installments within 3 years commencing from
January 7, 1999. These are secured against hypothecation of assets leased to and assignment of lease
rentals receivable from Shell Pakistan Limited.
11.3.6 This represents discounting of promissory notes of Packages Limited representing rentals receivable and            ,
carries yield of average rate of last six months T. Bills plus 2.0% per annum adjustable quarterly with the
cap of 15.8% per annum and is payable in quarterly installments within 3 years commencing from January
29,2000. This is secured against hypothecation of assets leased to and assignment of lease rentals receivable            ,
from Packages Limited.
11.3.7 This represents a term finance facility of Rs. 25 million repayable in 20 equal quarterly installments. The
facility carries a mark-up of 47.95 paisas per thousand per day and is secured by first charge on specific
leased assets and related receivables.
11.3.8 This represents a term finance facility of Rs. 50 million repayable in 16 equal quarterly installments. The
facility carries a mark-up of 49.32 paisas per thousand per day and is secured by first charge on specific
leased assets and related receivables.
12. CURRENT LIABILITIES
Current portion of:
- Redeemable capital 10 83,333,250 83,333,333
- Certificates of investment 11.1 864,124,200 1,365,185,474
- Deposits on lease contracts 11.2 73,936,530 85,812,365
- Long term loans 11.3 117,344,550 80,565,523
Short term facilities 12.1 204,995,000 359,897,641
Advance receipts against leases 244,202,850 71,487,251
Creditors 16,559,395 6,825,479
Accrued mark-up on loans 12.2 12,841,129 9,349,061
Accrued mark-up on certificates of investment 168,242,680 120,031,628
Other accrued liabilities 12.3 4,843,714 368,962
Provision for taxation 27,760,140 27,098,967
Unclaimed dividend 1,490,260 3,007,913
Proposed dividend 64,800,000 48,000,000
Other liabilities 7,794,370 4,812,888
------------------ ------------------
1,892,268,068 2,265,776,485
========== ==========
12.1 These are made up as follows:
Standard Chartered Grindlays Bank Limited -- 39,939,124
The Hong Kong and Shanghai Banking Corp. Ltd. -- 30,000,001
Habib Bank Limited -- 100,000,000
Soneri Bank Limited 12.1.1 80,000,000 50,000,000
United Bank Limited -- 99,958,516
The Hong Kong and Shanghai Banking Corp. Ltd. -- 40,000,000
ABN Amro Bank N.V. 12.1.2 49,995,000 --
The Bank of Punjab Limited 12.1.3 50,000,000 --
National Discounting Services Limited 12.1.4 25,000,000 --
------------------ ------------------
204,995,000 359,897,641
========== ==========
12.1.1 This represents unsecured term finance facilities of Rs 55 and Rs 25 million obtained for a period of 6 &
3 months respectively. These facilities are payable on 15th November 2000 & 1st September 2000 and
carry a mark-up rate of 33.70 & 33.56 paisas per thousand per day respectively.
12.1.2 This running finance facility of Rs. 50 million is secured against specific leased assets and related receivables
and carries mark-up of 35.62 paisas per thousand per day.
12.1.3 This unsecured term finance facility for a period of 3 months is repayable on 29th July 2000. Mark-up rate
on this facility is 30.82 paisas per thousand per day.
12.1.4 This represents an unsecured term finance facility obtained for a period of 1 month and is payable on 31st
July 2000. It carries a mark-up rate of 36.98 paisas per thousand per day.
2.2 This includes Rs. 878,452 (1999: Rs 1,854,724) profit payable against term finance certificates.
2.3 This includes an amount of Rs. Nil (1999: Rs.109,500) due to an associated company.
13. CONTINGENCIES AND COMMITMENTS
The company has given undertakings for payments / issued purchase orders on behalf of lessees of Rs.274.092 million
(1999: Rs.187.994 million) approximately for the assets to be leased by the company.
14. LEASE INCOME
Lease income is recognized in accordance with the accounting policy explained in Note 2.3.
15. INCOME FROM SHORT TERM INVESTMENTS
Profit on short term investment 70,882,373 47,758,522
Capital gains 36,134,839 --
------------------ ------------------
107,017,212 47,758,522
========== ==========
16. FINANCE AND BANK CHARGES
Profit on certificates of investment 692,190,490 557,496,177
Mark-up on long term bank borrowings 66,594,103 63,610,368
Mark-up on short term bank borrowings 10,796,654 6,328,353
Mark-up on term finance certificates 20,398,711 34,785,615
Bank charges and commission 4,502,169 3,197,875
------------------ ------------------
794,482,127 665,418,388
========== ==========
17. GENERAL AND ADMINISTRATIVE EXPENSES
Salaries, allowances and benefits 17.1 17,074,609 17,070,062
Rent 5,314,975 5,590,792
Staff training 431,341 80,755
Travelling and vehicle running 3,044,378 2,200,432
Insurance of operating assets 1,659,602 2,034,912
Legal and professional charges 3,717,202 2,126,911
Telephone and utilities 6,232,724 4,260,189
Donations 17.3 20,000 20,000
Subscription 59,880 57,970
Auditors' remuneration 17.4 401,320 331,000
Printing and stationery 2,813,553 1,432,969
Depreciation 11,870,248 7,794,178
Repairs and maintenance 4,423,890 725,322
Advertisement 8,670,150 3,928,991
Provision for diminution in value of investments (109,983) 543,983
Amortization of deferred costs 1,030,266 978,767
General expenses 358,049 501,855
------------------ ------------------
67,012,204 49,679,088
========== ==========
171. This includes Rs.524,061(1999: 487,431) contributed to the staff provident fund scheme.
17.2 Number of employees at the end of the year was 70 (1999: 56)
17.3 Donations
The directors and their spouses do not have any interest in the donee institutions.
17.4 Auditors' remuneration
Audit fee 100,000 90,000
Tax advisory services 278,000 210,000
Out of pocket expenses 23,320 31,000
------------------ ------------------
401,320 331,000
========== ==========
18. REMUNERATION OF CHIEF EXECUTIVE, DIRECTORS AND EXECUTIVES
The aggregate amount charged in the accounts for remuneration, including certain benefits, to the Directors, Chief Executive
and other Executives of the company is as follows:
2000 (Rupees) 1999 (Rupees)
Directors Chief Executive Executives Directors Chief Executive Executives
Managerial remuneration 900,000 2,666,002 534,192 3,188,700
Housing and utilities 450,000 1,540,020 240,384 1,716,020
Medical expenses 90,000 266,600 53,424 308,550
Provident fund contribution 74,936 223,608 44,496 273,232
Meeting fees 14,500 14,500
------------------ ------------------ ------------------ ------------------ ------------------ ------------------
14,500 1,514,936 4,696,230 14,500 872,496 5,486,502
========== ========== ========== ========== ========== ==========
No of persons 8 1 13 8 1 17
========== ========== ========== ========== ========== ==========
Company maintained cars are provided to the Chief Executive and other Executives.
2000 1999
(Rupees) (Rupees)
19. EARNING PER SHARE-Basic and Diluted
Net profit for the year attributable to ordinary shareholders 91,453,533 62,401,427
========== ==========
Weighted average number of ordinary shares
outstanding during the year 25,400,000 24,000,000
========== ==========
Earnings Per Share-Basic 2.82 2.60
Earnings Per Share- Diluted 3.60 2.60
========== ==========
20. INTEREST RATE RISK
Exposure to interest rate risk and sensitivity of financial liabilities and financial assets of company are summarized below:
2000 (Rupees)
Total Within one More than one More than Not exposed Interest
year and less than five to interest Rate
five years years rate risk
ASSISTS
Long term advances 10,663,708 1,701,769 2,987,519 5,974,420 5% to 10.0%
Long term investments 5,000,000 5,000,000
Net investment in lease finance    5,227,837,911 1,866,931,936 3,360,905,975 12.75% to 25%
Short term investments 1,134,482,506 1,133,322,306 1,160,200 14.5% to 19%
Advances, prepayments and other
receivables 466,653,840 22,131,637 444,522,203 18% to 23%
Cash and bank balances 341,064,888 292,705,187 48,359,701 10.5% to 12.5%
------------------ ------------------ ------------------ ------------------ ------------------ ------------------
7,185,702,853 3,316,792,835 3,363,893,494 5,974,420 499,042,104
------------------ ------------------ ------------------ ------------------ ------------------ ------------------
LIABILITIES
Redeemable capital 83,333,250 83,333,250 17.10%
Certificates of investment 4,757,051,601 864,124,200 3,892,927,401 10.5% to 18.6%
Deposits on lease contracts 646,521,641 646,521,641
Long term loans 341,926,154 117,344,550 224,581,604 15.5% to 18%
Short term facilities 204,995,000 204,995,000 11.49% to 13.0%
Creditors and other
accrued liabilities 483,734,538 483,734,538
------------------ ------------------ ------------------ ------------------ ------------------ ------------------
6,517,562,184 1,269,797,000 4,117,509,005 -- 1,130,256,179
------------------ ------------------ ------------------ ------------------ ------------------ ------------------
Total interest rate sensitivity gap 2,046,995,835 (753,615,511) 5,974,420 (631,214,075)
========== ========== ========== ==========
Cumulative interest rate sensitivity gap 2,046,995,835 1,293,380,324 1,299,354,744 668,140,669
========== ========== ========== ==========
1999 (Rupees)
Total Within one More than one More than Not exposed Interest
year and less than five to interest Rate
five years years rate risk
ASSETS 5%to 10.0%
Long term advances 10,162,038 999,315 9,162,723
Long term investments 5,000,000 5,000,000 18.1% to 25%
Net investment in lease finance   3,986,152,786 1,216,053,481 2,770,099,305
Short term investments 902,717,968 881,295,818 21,422,150 13.95% to 19%
Advances, prepayments and other
receivables 283,667,040 8,178,380 275,488,660 18.1% to 25%
Cash and bank balances 406,955,514 358,568,003 48,387,511 10.5% to12.5%
------------------ ------------------ ------------------ ------------------ ------------------ ------------------
5,594,655,346 2,465,094,997 2,779,262,028 -- 350,298,321
------------------ ------------------ ------------------ ------------------ ------------------ ------------------
LIABILITIES
Redeemable capital 166,666,500 83,333,333 83,333,167 17.10%
Certificates of investment 3,567,681,317 1,365,185,474 2,202,495,843 13% to 18.6%
Deposits on lease contracts 521,027,204 521,027,204 --
Long term loans 183,232,255 80,565,523 102,666,732 18.4% to 17%
Short term facilities 359,897,641 359,897,641 12.65% to 17.5%
Creditors and other accrued liabilities  290,982,149 290,982,149
------------------ ------------------ ------------------ ------------------ ------------------ ------------------
5,089,487,066 1,888,981,971 2,388,495,742 -- 812,009,353
------------------ ------------------ ------------------ ------------------ ------------------ ------------------
Total interest rate sensitivity gap 576,113,026 390,766,286 -- (461,711,032)
========== ========== ========== ==========
Cumulative interest rate sensitivity gap 576,113,026 966,879,312 966,879,312 505,168,280
========== ========== ========== ==========
21. CREDIT RISK AND CONCENTRATION OF CREDIT RISK
Credit risk is the risk that if a financial obligation will not be honored by a counterparty then it will result in a loss. The
company follows various methodologies to control such credit risk. This involves monitoring of credit exposure, assessment
of credit worthiness of client, assessment of the quality of the assets leased and diversification both sectoral and geographic.
Concentration of credit risk arises when the company is exposed substantially to particular industry, geographic location or
class of assets resulting in the inability of the customers to meet their obligations in case of adverse changes due to economic,
political or other conditions. The company follows internal guidelines, duly approved by Board of Directors, and external
guidelines as laid down by regulatory bodies.
The composition of lease portfolio is as follows:
SECTOR 2000 1999
Rupees Share Rupees Share
Consumer facilities 1,784,742,814 33.11% 399,185,874 9.69%
Textiles and allied 931,744,590 17.29% 563,655,323 13.69%
Energy, Oil and Gas 653,293,317 12.12% 853,317,964 20.72%
Miscellaneous 574,611,230 10.66% 447,299,335 10.86%
Cement 281,328,028 5.22% 347,912,545 8.45%
Transport and Communication 256,685,715 4.76% 314,977,817 7.65%
Paper and Board 169,132,582 3.14% 3,686,993 0.09%
Chemical, Pharmaceutical and Fertilizers 148,377,061 2.75% 476,044,822 11.56%
Sugar and Allied 112,935,807 2.10% 56,598,127 1.38%
Food, Tobacco and Beverages 111,060,718 2.06% 137,289,625 3.33%
Financial Institutions 99,782,933 1.85% 77,663,796 1.89%
Glass and Ceramics 85,453,992 1.59% 260,861,091 6.34%
Hotels 45,976,863 0.85% 23,053,118 0.56%
Steel, Engineering and Automobiles 37,963,205 0.70% 36,558,040 0.89%
Security Services 34,357,421 0.63% 50,519,447 1.23%
Electrical and Electrical Goods 20,941,102 0.39% 15,702,168 0.38%
Leather and Footwear 20,428,158 0.38% 31,295,351 0.76%
Constructions 15,722,203 0.29% 12,900,595 0.31%
Health Care 4,099,303 0.08% 7,457,362 0.18%
Banaspati and Allied Industries 1,000,000 0.02% 1,000,000 0.02%
Dairy and Poultry 414,810 0.01% 764,604 0.02%
------------------ ------------------ ------------------ ------------------
5,390,051,852 100.00% 4,117,743,997 100.00%
========== ========== ========== ==========
22. FAIR VALUE OF FINANCIAL INSTRUMENTS
Carrying value of financial instruments approximates the fair value except for long term investments as given in
note 5.
23 TRANSACTIONS WITH ASSOCIATED UNDERTAKINGS
These comprise of:
Askari Commercial Bank Limited
Balance on deposit accounts as at 30th June 213,082,417 344,146,543
Profit on deposit accounts 12,263,321 8,975,125
Askari General Insurance Company Limited
Insurance premium paid 10,772,441 6,976,057
Insurance claim received 10,176,460 336,718
Balance of certificates of investment as at 30th June 21,634,846 21,635,846
Profit paid on COIs 225,220 --
Army Welfare Trust
Balance of certificates of investment as at 30th June 2,000,000 2,000,000
Profit paid on COIs 221,220 235,775
Rent paid for office premises 1,211,697 4,567,000
Mobil Askari Lubricants (Pvt.) Limited
Amount due against leases as at 30th June 3,931,533 4,482,462
Finance income charged during the year 435,105 1,553,716
Askari Aviation (Pvt.) Limited
Balance of certificates of investment as at 30th June 8,000,000 3,000,000
Profit paid on COIs 173,359 170,000
Askari Associates (Pvt.) Limited
Paid for registrar services 653,596 438,000
Askari Information Systems (Pvt.) Limited
Paid for consultancy services 95,000 52,000
Askari Guards (Pvt.) Limited
Paid against contract staff 4,096,232 --
24. TAXATION
Income tax assessments of the company have been finalised by the income tax authorities up to and including the assessment
year 1998-99 (accounting year ended 30 June 1998) creating tax demands of Rs. 91.5 million. The company is contesting
these assessments at the appellate forum and the management is confident that these demands will be deleted by the
appellate authorities.
25. GENERAL
25.1 Figures have been rounded off to the nearest rupee.
25.2 Corresponding figures have been rearranged, wherever necessary, for purposes of comparison.
Rawalpindi Lt. Gen.(R) .Mohammad Afsar Taimur Afzal
November 21, 2000 CHAIRMAN/DIRECTOR CHIEF EXECUTIVE
PATTERN OF SHAREHOLDING AS AT JUNE 30, 2000
Number of Share Holdings Total
Shares Holders From To Shares Held
72 1 100 5,542
240 101 500 69,455
276 501 1000 196,155
718 1001 5000 1,434,414
78 5001 10000 573,131
88 10001 110000 2,270,219
3 110001 210000 448,800
2 210001 310000 555,630
1 910001 1010000 947,035
1 2110001 2210000 2,167,380
1 5010001 5110000 5,058,740
1 17310001 18674000 18,673,499
------------------ ------------------
1,481 32,400,000
========== ==========
Number of Shares Percentage
Categories of Shareholders Shareholders Held
Individual 1,445 4,285,672 13.23
Investment Company 3 50,300 0.15
Insurance Company 6 1,353,310 4.18
Joint Stock Company 15 7,598,851 23.45
Financial Institution 7 346,668 1.07
Modaraba Company 2 12,300 0.04
Foreign Company 1 70,000 0.22
Charitable Trust 2 18,682,899 57.66
------------------ ------------------ ------------------
Totals 1,481 32,400,000 100.00
========== ========== ==========
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