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Atlas Leasing Limited
Annual Report 1999
Contents
Notice of Meeting
Corporate Data
Directors' Report
Chairman's Review
Pattern of Shareholding
Decade at a glance
Graphic Presentation
Auditors' Report
Balance Sheet
Profit and Loss Account
Cash Flow Statement
Notes to the Accounts
Atlas Group Companies
NOTICE OF MEETING
Notice is hereby given that the Twelfth Annual General Meeting of the members of ATLAS LEASE
LIMITED will be held on Wednesday, December 22, 1999 at 10.30 a.m. at Registered Office of the
Company at Federation House, Sharae Firdousi, Clifton, Karachi to transact the following business:
ORDINARY BUSINESS :
1. To confirm the Minutes of the Eleventh Annual General Meeting held on December 14, 1998.
2. To receive, consider and adopt the Audited Accounts of the Company for the year ended June
30, 1999 together with the Directors' and Auditors' Report thereon.
3. To appoint Auditors and fix their remuneration for the year ending June 30, 2000. The present
Auditors M/s. Ford, Rhodes, Robson, Morrow, Chartered Accountants, retire and being eligi-
ble, offer themselves for reappointment.
SPECIAL BUSINESS:
4. To approve the issue of Bonus Shares @ 15% for the year ended June 30, 1999 as recom-
mended by the Board of Directors and in this regard to pass with or without modifications the
relative Ordinary Resolution.
5. To approve the issue of Right Shares @ 50% at par as recommended by the Board of Direc-
tors and in this regard to pass with or without modifications the relative Special Resolution.
6. To approve the remuneration of the Chief Executive of the Company as recommended by the
Board of Directors.
OTHER BUSINESS:
7. To transact any other business as may be placed before the meeting with the permission of the
Chair.
A statement under section 160 (1) (b) of the Companies Ordinance, 1984 pertaining to the Special
Business referred to above is annexed to this Notice of Meeting.
			By Order of the Board
			MUHAMMAD RAFIQUE UMER
Karachi: November 12, 1999			Company Secretary
NOTES :
i) The Register of Members of the Company will remain closed from 11/12/1999 to
17/12/1999 (both days inclusive). Transfers received in order at the Registered Office of the
Company at the close of business on December 10, 1999 will be treated in time for the pur-
pose of entitlement of Bonus and Right shares.
ii) A member entitled to attend and vote at this meeting may appoint another member as his / her
proxy to attend and vote on his / her behalf. The instrument appointing a Proxy and the power
of attorney or other authority under which it is signed or a notarially certified copy of the power
of attorney must be received at the Registered Office of the Company duly stamped, signed
and witnessed not later than 48 hours before the meeting.
iii) Shareholders whose shares are deposited with Central Depository System (CDS) are re-
quested to bring their National Identity Card (NIC) alongwith their Account Number in CDS for
verification.
iv) Members are requested to notify any change in their addresses immediately.
CORPORATE DATA
BOARD OF DIRECTORS :
			LEGAL ADVISORS :
CHAIRMAN			Mohsin Tayebaly & Co.
Mr. Yusuf H. Shirazi
			BANKS & LENDING INSTITUTIONS:
CHIEF EXECUTIVE
Mr. Khaleeq-ur-Rahman Khan			BANKS:
			ABN AMRO Bank
MEMBERS			Allied Bank of Pakistan Limited
Dr. Amjad Waheed			Askari Commercial Bank Limited
Mr. Masanori Okuda			Faysal Bank Limited
Mr. Muhammad Shafi			Habib Bank AG Zurich
Mr. Sanaullah Qureshi			Habib Bank Limited
Mr. Saquib H. Shirazi			Muslim Commercial Bank Limited
Mr. Talat Mahmood			The Bank of Tokyo-Mitsubishi, Limited
Mr. Toshiki Miyazaki			The Hongkong and Shanghai
			Banking Corporation Limited
COMPANY SECRETARY
Mr. Muhammad Rafique Umer			LENDING INSTITUTIONS :
			Al-Faysal Investment Bank Limited
GROUP EXECUTIVE COMMITTEE:			Asian Development Bank (ADB)
CHAIRMAN			Commonwealth Development Corporation (CDC)
Mr. Yusuf H. Shirazi			German Investment and Development Co.(DEG)
			International Finance Corporation (IFC)
MEMBERS			Netherlands Development Finance Co. (FMO)
Mr. Jawaid Iqbal Ahmed			Pakistan Kuwait Investment Co., (Pvt.) Limited
Mr. Frahim Ali Khan
Mr. Iftikhar H. Shirazi			REGISTERED OFFICE & HEAD OFFICE ·
Mr. Aamir H. Shirazi			Federation House, Sharae Firdousi,
Mr. Saquib H. Shirazi			Clifton, Karachi - 75600
			Tel · (92-21) 5866817 - 20, 5866919 - 20
SECRETARY			Fax :  (92-21) 5870543
Mr. Amjad Hussain			E-mail: all@atlasgrouppk.com
GROUP PERSONNEL COMMITTEE:
			BRANCH OFFICES :
CHAIRMAN			LAHORE OFFICE :
Mr. Yusuf H. Shirazi			1st Floor, Emirates Bank Building,
			14- Egerton Road, Lahore
GROUP AUDIT COMMITTEE :			Tel: (92-42) 6366170 - 74,6364941,
			6305439, 6305449
CHAIRMAN			Fax: (92-42) 6365058
Mr. Sanaullah Qureshi
			ISLAMABAD OFFICE:·
AUDITORS:			2nd Floor, Saudi Pak Tower,
Ford, Rhodes, Robson, Morrow			Blue Area, Islamabad
Chartered Accountants			Tel: (92-51) 824906, 824909
			Fax: (92-51) 821377
DIRECTORS' REPORT
The Directors have pleasure in submitting Annual Report of the Company together with the
Audited Accounts and the Auditors' Report thereon for the year ended June 30, 1999.
Financial Results:			1999	1998
			Rupees	Rupees
Net profit for the year after charging all
expenses and doubtful debts			25,311,230	19,712,909
Previous profit brought forward			205,691	4,213,954
			---------------------	---------------------
Profit available for appropriation			25,516,921	23,926,863
Appropriations:
Transfer to statutory reserve			5,062,246	3,942,582
Transfer from general reserve for deferred taxation			(14,740,000)	--
Transfer to capital reserve for deferred taxation			24,440,000	--
Transfer to reserve for issue of bonus shares			9,956,914	--
Transfer to general reserve			--	4,000,000
Cash dividend			--	15,778,590
			---------------------	---------------------
			24,719,160	23,721,172
			---------------------	---------------------
Unappropriated profit carried forward			797,761	205,691
			============	============
Dividend:
The Directors are pleased to recommend a stock dividend / issuance of bonus shares in proportion
of three (3) shares for every twenty (20) shares held, i.e. 15% out of current year's profit and
premium on shares account.
Chairman's Review:
The accompanying Chairman's Review deals with the performance of the Company during the
year and future outlook. The Directors of the Company endorse the contents of the review.
Pattern of Shareholding:
The pattern of shareholding of the Company is annexed.
Auditors:
The present Auditors Messrs Ford, Rhodes, Robson, Morrow, Chartered Accountants, retire and
being eligible, offer themselves for reappointment.
for and on behalf of
BOARD OF DIRECTORS
SANAULLAH QURESHI		KHALEEQ-UR-RAHMAN KHAN		YUSUF H. SHIRAZI
Director		Chief Executive		Chairman
Karachi: November 12, 1999
CHAIRMAN'S REVIEW
I am pleased to present the Twelfth Annual Report
of your Company for the year ended June 30,
1999.
THE ECONOMY
The adverse backlash of the nuclear explosions
of last year was quite marked as the economy
witnessed a continuous slump during the year
under review. The first half was completely
dominated by the effects of the sanctions imposed
by the world financial and other institutions with
respect to inflow of foreign loans and aid packages.
The foreign currency reserves hit rock bottom
as the country slipped into a worst ever economic
crisis with almost no investment taking place
in the country. The economy was also affected
by the slow down of the global economic activity
particularly in South East Asia.
During the second half of the year under review,
things however began to look better with the
easing of sanctions and the successful negotiation
of the Government with the foreign donors and
lending agencies which resulted in rescheduling
of existing debts and the resumption of fresh
funds inflow. The Government also embarked
on the path of adjustment and reforms and a
series of wide ranging measures were taken;
these included rolling back of several measures
taken after the economic sanctions. However,
before the economy could actually get back on
the track to recovery, the momentum was hampered
by the worsening of the Indo-Pak relationship
due to the Kargil conflict.
The GDP registered a meager growth of 3.1%
during the year as against 4.3% of last year.
Exports were 11.7% lower than last year. Value
addition in the manufacturing sector was also
below expectations at 4.7% during the year as
against an impressive 7.9% last year. The economic
sanctions, discouragement of imports, uncertain
economic environment and lower demand for
exports due to global economic recession adversely
affected the growth in this sector. The agricultural
sector also suffered a set back due to unfavorable
weather conditions. It registered a paltry growth
of 0.35% as against 3.8% of the previous year.
National savings declined to 11.1% of GNP as
compared with 14.2% last year. Only the service
sector showed improvement: it recorded a growth
of 4.1% compared to a growth of 3.2% during
the previous year. Net foreign private investment
inflows stood at US$ 300.7 m during July-March,
1998-99 as against US$ 639.9 m in the comparable
period last year, a sizeable decline indeed.
MONETARY DEVELOPMENTS
At the beginning of the year, the State Bank
of Pakistan introduced a dual exchange rate
in an attempt to stabilize the exchange rate.
The aim was to preserve foreign exchange reserves
as well as to force the liquidation of frozen foreign
currency accounts. During the second half of
the year, the government, however, announced
unification of rates for both foreign currency
deposits and trade finance. This was handled
through a newly introduced inter bank rate
mechanism.
During the .first half of the year, the State Bank
of Pakistan also placed a moratorium on the
repayment of foreign loans by the private sector.
This caused a serious situation which was later
alleviated when permission for remittances was
re-allowed in December 1998 at the inter bank
rate.
During most of the year, the stock market remained
under pressure with the index starting at 863.17
points on July 1,1998, and touching the lowest
mark of 765 points later in the same month.
The index reached a high of 1416 points in May
1999 and came back to 1054 points at the end
of June 1999.
WORLD REGULATORY ORGANIZATIONS
The business activity is directly related to the
national business environment. Leasing plays
a critical role in the financial sector of the economy
particularly. Being a signatory to the World Trade
Organization (WTO), Pakistan, in this respect,
is obliged to make certain changes in the laws
relating to Trade Policy, custom valuation and
other trade related matters which are affecting
' country's local trade, finance and industry. These
changes basically aim at further liberalization
of trade and are to be implemented from this
year. These will have a great bearing on the
leasing business too. The Ministry of Commerce,
Government of Pakistan, is of the view that a
major change is expected in the concessionary
regime replacing it with the tariff incentives driven
regime which may affect local trade and industry
as it is and, as such, the leasing industry also
as it is!:
(It so happens when friends turn unfriendly!)
Yae Kahan Kee Dosti Hay Kaa Banay Hayan Dost Nasa
This agreement was signed by the Ministry of
Commerce on behalf of the Government of
Pakistan. Obviously, neither any debate was
carried out, nor any consultation made which
is the norm in such major decisions. In most
countries of the world, private sector is associated
with such decision making of great importance.
No such due diligence was made at any quarters.
The private sector did not even know that such
an agreement was signed-in 1995 !. On the
contrary, the private sector was, at the same
time, being encouraged to invest and, in fact,
coerced with compulsory localization programs
involving huge investment having serious
repercussions without a concessionary regime.
However, the Ministry of Industries, Government
of Pakistan, duly supported by an expert view
on WTO, believe on continuing with the existing
policy. The Ministry has thus approached the
WTO in this respect. The Ministry's approach,
if implemented, will have a far-reaching effect
on the trade and other related industries as a
whole, and consequently would benefit the leasing
industry. Some countries have recently obtained
such extensions and exceptions. Whatever the
case, there is a need to protect the huge investment
made in this behalf in the industry, the local
trade and services as well as other related
initiatives, in the larger interest of the country.
It is generally felt by the industrial and various
trade bodies also that Pakistan like other developing
countries should take up such matters that hurt
its industry, trade and services at the next round
of WTO multilateral trade negotiations particularly
as according to Andy Rowel, a well known
economic writer "WTO represents 1% of 1 (0.01%)
of the richest corporations and individuals in
the world ....... and last decade saw increase
of wealth 70 to 85% in the richest 20 countries
as against 2% decline in the 20 poorest countries
of the world". The World Bank Chief, James
Wolfensohn, further reinforces to say "...the
searing image of desperation, hopelessness
and decline - of people who once had hope,
but will have it no more..." if the present globalization
of economy - though IMF and WTO imperatives
persists in its present form!
Further, The Wall Street Journal of November
12-13, 1999 in its editorial wrote ". ...... Michel
Camdessus ....... has given us all something serious
to talk about ...-Not least is just what is the
proper role of the International Monetary Fund ......
in the past year, individuals calling for the abolition
of the IMF have included George Shultz, William
Simon and Walter Wriston .......... their utter
seriousness about maintaining a sound system
of global finance and trade ..... the truth is that
the IMF, in its current exalted incarnation, deserves
a sober reassessment from its primary funding
members of its ability to perform that function ......
The IMF also needs to get rid of its bias toward
devaluation, which is supposed to "revive" exports
even as the inevitable, resulting inflation quickly
diminishes the resident population's incomes
and assets. Impoverishing people in this way
is morally indefensible and politically
unsustainable ........"
All this needs a thoughtful consideration in the
interest of world economy, itself.
THE LEASING INDUSTRY
The year under review remained difficult for the
leasing industry. This was mainly due to economic
slowdown and default culture. The overall lease
disbursement in the industry dropped by
approximately 2.5% to Rs. 9.9 billion from Rs.
10.15 billion in 1997-98. Your company, on the
other hand, improved its market share by 0.87%
to hold 6.22% as its share in the lease disbursement
during 1998-99.
Regulatory issues also had a negative impact
on the depressing state of affairs. The Central
Excise Duty (CED) levied in June 1996 was
withdrawn in June 1997, yet the demand was
raised by the Excise Department. The concerned
leasing companies contested it but ultimately
had to pay. The matter of allowing depreciation
of vehicles with the enhanced limit of Rs.l.0
m is still pending and has been taken up with
the authorities at the forum of Leasing Association
of Pakistan. For other matters like enhancement
of paid up capital, a committee comprised of
representatives of Securities and Exchange
Commission of Pakistan (SECP) and leasing
companies has been formed to look into the
matter.
On the other hand, it is encouraging to note
that the Government has resolved a few other
issues favorably. The leasing companies were
declared exempt by the Central Board of Revenue
from levy of 10% income tax on reserves in
excess of 50% of their paid up capital. In the
matter of Deferred Taxation, the SECP has advised
to start providing for deferred tax liability every
year. This is a prudent step to strengthen the
Balance Sheet of the leasing companies. The
companies have been allowed to make up the
deficiency in deferred tax provision within five
years.
The leasing sector has taken a turn towards
the betterment. Majority of the leasing companies
have started to focus on BMR requirement of
the industry as well as financing small ticket
consumer leases. This has also developed higher
competition among the leasing companies in
the rates being offered to the consumers.
THE COMPANY'S RESULTS
During the year under review, lease disbursement
of Rs. 616.36 m was made, up 13.22% from
last year. Net investment in lease finance as
on June 30, 1999 amounted to Rs. 1,910.08
m, by no means a small amount !. The lease
portfolio comprised of 66.67% in machinery,
29.30% in vehicles and 4.03% in office equipment.
The sectoral exposure as on June 30, 1999,
was fairly diversified and comprised of 10.64%
in Services followed by 10.18% in Textile Spinning,
9.25% in Steel, Engineering & Automobiles, 8.90%
in Chemicals, Fertilizers & Pharmaceuticals, 8.83%
in Cement, 6.66% in Food, Tobacco & Beverages,
6.51% in Consumer, 6.32% in Electrical &
Electronic Goods, 5.35% in Textile Weaving /
Knitting, etc. This is quite a diversified portfolio
in the current situation.
Gross revenue during the year amounted to Rs.
341.09 m, compared to Rs. 339.35 m of the
previous year, up 0.51%. Financial charges
amounted to Rs. 255.53 m after taking effect
of refund of Rs. 11.01 million received from the
State Bank of Pakistan in respect of Rs. 17.56
m, paid during the year 1996-97, on account
of late payment of exchange risk fee. These
charges were slightly lower by 0.49% as compared
with Rs. 256.78 m of the previous year.
Administrative expenses rose by 12.45% to Rs.
38.85 m from Rs. 34.55 m. Provision for doubtful
debts amounted to Rs. 15.44 m compared to
Rs. 5.18 m last year. Cumulative provision for
doubtful debts amounted to Rs. 56.54 m which
is 2.96% of net investment in lease finance.
This provision may be sufficient if the present
default culture countrywide does not persist.
Your company has however been suspending
income on non-performing leases.
The profit before tax for the year amounted to
Rs. 23.74 m compared to Rs. 34.36 m last year.
After reversing the liability of Rs. 5.5 m provided
for deferred tax in the previous year and providing
for current taxation liability of Rs. 3.92 m, the
profit after tax for the year amounted to
Rs. 25.31 m as compared to Rs. 19.71 m of
the previous year. On account of deferred tax
liability an amount of Rs. 24.44 m was appropriated
in the year under review which comprised of
Rs. 14.74 m, being one-fifth of the deferred tax
liability of Rs. 73.72 m of the previous years
and Rs 9.7 m for current year as per the requirement
of SECP. The remaining provision will be made
in the next four years as required.
The Return on Equity (ROE) improved to 10.41%
from 9.05 % in the previous year, which is quite
comparable with the industry average. Likewise
is the Earning per Share (EPS), which improved
to Rs.2.41 from Rs. 1.87 last year.
A sum of Rs.15.35 m was paid to the exchequer
during the period under review by way of tax
deducted at source and turn over tax. On
cumulative basis, a sum of Rs. 139.77m has
been paid to the exchequer on these two accounts.
PAYOUT AND RIGHT ISSUE
Your Board has recommended issue of Bonus
shares @ 15% and Right shares @ 50% at par.
The issue of right shares will not only enhance
the company's borrowing capacity but will also
result in increasing the level of business with
the existing customers having excellent track
record.
The company was setup in 1989 with a paid
up capital of Rs. 20.0 m which has grown to
Rs. 105.19 m. The total equity stands at Rs.
243.02 m which includes reserves and un-
appropriated profit of Rs.137.83 m. During this
period your company made right issues at par
of Rs. 30.0 m in 1990 and Rs. 33.27 m in 1995.
It has paid cash dividend of Rs. 54.76 m and
Bonus at Rs. 32.33 m (market value Rs. 90.52
m) against the shareholders investment of Rs.
94.46 m or 92.20 % of the amount invested.
CREDIT RATING
Pakistan Credit Rating Agency maintained rating
of your company at "A2 "and "A-" for short
term and long term respectively which denote
a low expectation credit risk and strong capacity
of timely payment of financial commitments.
FUNDING
Despite tight liquidity in the money market that
remained during major part of the year and scarcity
of long-term funds, funding position of your
company during the period under review remained
satisfactory. The company managed to avail credit
lines of Rs. 150 million from Habib Bank Limited,
Rs. 50 million from Askari Commercial Bank
Limited and Rs. 10 million from Allied Bank
of Pakistan Limited.
Further, your company has initiated to raise funds
through TFC to the tune of Rs. 200 million. The
instrument has already been rated 'A' by PACRA,
but the same was not floated during the year.
Though institutional investors in TFC were allowed
exemption from withholding tax, still issuing TFC
at this point of time was not found to be viable
due to high rates and ancillary costs. However,
all formalities pertaining to the issue have been
completed and we will go ahead with it, if needed.
In the mean time, the company opted to take
opportunity of borrowing at lower rates mostly
during the last quarter of the financial year when
local financial institutions were having excess
liquidity.
We do not foresee any problem in raising the
necessary funds.
HUMAN RESOURCE
The Group Personnel Committee headed by the
Chairman is continuously working to make
personnel policies, which will carry forward to
the new millennium. The Group, of which your
company is a constituent member, believes that
it is through motivated employees that the company
can sustain growth.
The Group further believes in that it is the
intellectual capital, which leads to good
governance. Human resource development thus
has been the hallmark of the Group. Furthering
that cause the Group further engaged Hay's
management consultants for job evaluations to
enable the Group to restructure, among others,
compensation to employees according to their
contribution in meeting the company's objectives.
Performance bonus has been introduced as also
Group medical scheme for self and families.
Your company started with a staff of 6 persons
in 1989. The number has now increased to 54
persons by June 30, 1999. Our emphasis has
always been on hiring well qualified and well
paid fewer staff. At this point of time, they include
a Chartered Accountant, 16 MBAs, 5 Postgraduates
and 19 Graduates at three locations, at Karachi,
Lahore and Islamabad.
Three employees earned Long Service Awards
during 1999-2000.
CHANGE IN BOARD OF DIRECTORS
Mr. Razi-ur-Rahman Khan, on relinquishing charge
as Chairman and Managing Director of NIT,
resigned from the Board and was replaced by
Dr. Amjad Waheed, Head of Asset Management,
NIT. May I place on record appreciation for the
contribution made by outgoing Director and
welcome incoming Director on the Board and
look forward to his support in managing the affairs
of your Company.
YEAR 2000 COMPLIANCE
Since your Company deals with its lenders and
customers for medium to long term, it is well
aware of year 2000 problems. It has made adequate
arrangements in its software and hardware
installations so that millennium bug does not
affect its operations. We are also in the process
of inquiring and evaluating the level of compliance
by our customers, suppliers and lenders.
FUTURE OUTLOOK
Globalization of the economy, as it is, is being
widely questioned. It thus needs harmonization
in the interest of the world economy as a whole.
The next WTO meeting being held in Seattle,
USA must address this issue and I hope developing
countries generally and Pakistan particularly
will be able to benefit from global initiatives duly
dovetailed with national priorities. The Government
has encouraged a team of representatives of
the private sector to join these discussions with
their official delegations for the deliberation
at the WTO's next meeting in USA.
Internally, the future prospects of the entire leasing
industry and your company depend on economic
revival in the country. However, with the needed
assistance from international lending agencies
and sound and serious economic policies of
the government, we can perceive a moderate
growth in economy and increase in corporate
activities. Our focus will remain on slow but stable
growth as well as improving the quality of financing,
speed-up recovery of stuck-up payments, ensuring
comfortable liquidity and rationalizing the overall
expense base. I believe that your Company is
well positioned to face these challenges of the
· new millennium and maintain the growth rate
if not improve upon it!.
(In self-reliance lies the survival!)
ACKNOWLEDGMENT
I thank the Board of Directors, Group Executive
Committee members, the Chief Executive Officer,
Mr. Khaleeq-ur-Rahman Khan, and his team for
their commitment, dedicated efforts and valuable
contribution. I also thank our valued clients and
financial institutions and place on record my
gratitude to the State Bank of Pakistan, Securities
and Exchange Commission of Pakistan and the
Central Board of Revenue for their support and
guidance.
I am also thankful to the shareholders for the
confidence reposed in the company.
YUSUF H. SHIRAZl
PATTERN OF SHAREHOLDING
AS AT JUNE 30, 1999
Number of		Shareholding		Total
Shareholders	From		To	Shares Held
60	1	--	100	3,968
42	101	--	500	12,797
36	501	--	1,000	31,704
59	1,001	--	5,000	140,018
5	5,001	--	10,000	43,872
3	10,001	--	15,000	33,935
2	15,001	--	20,000	36,800
1	20,001	--	25,000	22,959
1	25,001	--	30,000	26,406
1	50,001	--	55,000	55,000
1	90,001	--	95,000	93,749
2	150,001	--	155,000	305,878
1	175,001	--	180,000	175,125
1	220,001	--	225,000	225,000
1	265,001	--	270,000	265,143
1	275,001	--	280,000	280,000
1	295,001	--	300,000	300,000
1	435,001	--	440,000	435,461
1	440,001	--	445,000	442,557
1	510,001	--	515,000	512,825
1	535,001	--	540,000	536,560
4	840,001	--	845,000	3,364,083
1	885,001	--	890,000	888,442
1	2,285,001	--	2,290,000	2,286,778
----------------------	----------------------	----------------------	----------------------	----------------------
228	TOTAL			10,519,060
The slabs representing NIL holding have been omitted.
S. No.	Categories of	Number of	Number of	Percentage of
	Shareholders	Shareholders	Shares held	Shares held
1.	Individuals	207	5,332,878	50.70
2.	Investment Companies	2	446,801	4.25
3.	Insurance Companies	1	93,749	0.89
4.	Joint Stock Companies	9	58,680	0.56
5.	Financial Institutions	5	2,707,692	25.74
6.	Modaraba Companies	1	11,701	0.11
7.	Foreign Companies	3	1,867,559	17.75
		----------------------	----------------------	----------------------
	TOTAL	228	10,519,060	100.00
DECADE AT A GLANCE
						(Rupees in million)
	1999	1998	1997	1996	1995	1994	1993	1992	1991	1990
FINANCIAL POSITION
Authorized Capital	20,000	200.00	20,000	200.00	10,000	10,000	100.00	100.00	100.00	50.00
Paid-up Capital	105.19	105.19	105.19	10,519	66.55	60.50	55.00	50.00	50.00	20.00
Number of Shares issued	10.52	10.52	10.52	10.52	666	6.05	5.50	5.00	5.00	2.00
Reserves & Surplus	137.83	112.51	108.58	90.86	59.08	39.58	26.90	1,920	9.82	1.23
Shareholders' Equity	243.02	217.70	213.77	196.05	125.63	100.08	81.90	69.20	59.82	2,123
Long Term Loans-Foreign	923.79	1,107.14	1,226.45	746.46	815.64	601.40	461.17	131.32	-	l
Long Term Loans-Local	16,645	61.10	10.56	3,740	95.33	43.44	47.98	70.00	20.00	-
Certificates of Investment	319.50	275.00	275.00	33,632	8,081	10.92	98	-	-	-
Operating Fixed Assets	1,700	14.30	1,620	1,751	1,383	13.76	9.73	5.86	3.26	283
Net Investment in Lease Finance	1,910.08	1,874.10	1,849.13	1,659.58	1,269.81	973.03	740.02	55,189	305.01	106.73
Total Assets	2,203.23	211,457	2,206.17	180,466	1,402.64	1,018.56	81,008	569.06	31,065	114.44
OPERATING POSITION
Lease Disbursements	616.36	544.41	587.04	71,369	610.42	493.57	396.69	376.83	250.13	118.97
Income from leasing operations	311.92	317.76	317.42	273.81	20,414	159.52	130.93	82.03	36.81	985
Total Revenue	341.09	339.35	324.70	285.87	215.03	169.88	132.69	8,296	37.12	11.02
Total Expenses	317.35	304.99	300.07	24,269	181.65	143.54	111.91	68.57	28.54	9.17
Profit Before Taxation	23.74	34.36	24.63	4,318	3,338	26.34	20.78	1,439	8.58	185
Profit After Taxation	25.31	19.71	17.72	4,173	3,221	24.23	18.20	14.39	8.58	185
Earning per share (Rs.)	2.41	1.87	1.68	3.97	4.84	4.00	3.31	288	1.72	0.93
Return on Equity (%)	10.41	905	8.29	21.29	25.64	24.21	22.22	2,079	14.34	8.71
Break-up value per share (Rs.)	23.10	20.70	20.32	18.64	1,888	16.54	14.89	13.84	11.96	10.62
	-----------------------	-----------------------	-----------------------	-----------------------	-----------------------	-----------------------	-----------------------	-----------------------	-----------------------	-----------------------
DISTRIBUTION
Cash Dividend	--	15.00%	--	15.00%	10.00%	10.00%	10.00%	1000%	--	--
Stock Dividend	15.00%	--	--	--	--	10.00%	10.00%	1000%	--	--
	-----------------------	-----------------------	-----------------------	-----------------------	-----------------------	-----------------------	-----------------------	-----------------------	-----------------------	-----------------------
Total	15.00%	15.00%	-	15.00%	10.00%	20.00%	20.00%	20.00%	--	--
RIGHT ISSUE	50.00%	--	--	--	50.00%	--	--	--	--	150.00%
	-----------------------	-----------------------	-----------------------	-----------------------	-----------------------	-----------------------	-----------------------	-----------------------	-----------------------	-----------------------
AUDITORS' REPORT TO THE MEMBERS
We have audited the annexed balance sheet of ATLAS LEASE LIMITED as at June 30,
1999 and the related profit and loss account and cash flow statement, 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 and, after due verification thereof, we report
that:
a) in our opinion, proper books of account 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 and the
cash flow statement, together with the notes forming part thereof, 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, 1999 and of the profit and of the cash flows for the year
then ended; and
d) in our opinion Zakat deductible at source under the Zakat and Ushr Ordinance,
1980 was deducted by the company and deposited in the Central Zakat Fund
established under section 7 of that Ordinance.
Karachi -	FORD, RHODES, ROBSON, MORROW
November 12, 1999	Chartered Accountants
BALANCE SHEET AS ON JUNE 30, 1999
			1999	1998
		Note	Rupees	Rupees
ASSETS
NON-CURRENT ASSETS
Tangible Fixed Assets
Operating fixed assets		3	17,008,727	14,297,585
Net investment in lease finance		4
Minimum lease payments receivable			2,116,178,752	2,181,378,711
Residual value of leased assets			302,585,622	269,108,263
			---------------------	---------------------
			2,418,764,374	2,450,486,974
Unearned finance income			(508,686,318)	(576,391,394)
			---------------------	---------------------
Net investment in lease finance			1,910,078,056	1,874,095,580
Current portion of net investment in lease finance			(905,185,395)	(792,033,092
Provision for doubtful debts			(56,538,310)	(42,167,151
			---------------------	---------------------
			948,354,351	1,039,895,337
Long term investments		5	33,500,000	40,875,616
Long term loans, deposits and deferred cost		6	28,400,289	30,359,960
CURRENT ASSETS
Current portion of net investment in lease finance			905,185,395	792,033,092
Short term investments		7	10,000,000	10,000,000
Advances, prepayments and other receivables		8	61,215,026	53,230,583
Cash and bank balances		9	199,564,948	133,882,522
			---------------------	---------------------
			1,175,965,369	989,146,197
			---------------------	---------------------
			2,203,228,736	2,114,574,695
			============	============
EQUITY AND LIABILITIES
SHARE CAPITAL AND RESERVES
Share capital
Authorised
20,000,000 ordinary shares of Rs. 10 each			200,000,000	200,000,000
			============	============
Issued, subscribed and paid-up		10	105,190,600	105,190,600
Reserves		11	137,825,735	112,514,505
			---------------------	---------------------
			243,016,335	217,705,105
NON-CURRENT LIABILITIES
Long term loans		12	768,959,616	881,485,093
Long term deposits		13	177,166,446	164,491,598
Certificates of investment		14	21,995,000	22,538,191
Deferred taxation			--	5,500,000
CURRENT LIABILITIES
Current maturity of long term loans			321,284,672	286,750,724
Current maturity of long term deposits			88,093,847	65,568,216
Certificates of investment		14	297,504,026	252,467,438
Short term finances		15	198,583,130	92,000,000
Finance under mark-up arrangements		16	348,705	11,961,167
Accrued and other liabilities		17	86,276,959	98,328,573
Proposed dividend			--	15,778,590
			---------------------	---------------------
			992,091,339	822,854,708
			---------------------	---------------------
COMMITMENTS		18
			2,203,228,736	2,114,574,695
			============	============
The annexed notes form an integral part of these accounts.
The auditors' report is annexed hereto.
SANAULLAH QURESHI	KHALEEQ-UR-RAHMAN KHAN		YUSUF H. SHIRAZI
Director	Chief Executive		Chairman
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED JUNE 30, 1999
			1999	1998
		Note	Rupees	Rupees
REVENUE
Income from leasing operations		19	311,923,488	317,763,732
Other income		20	29,167,179	21,586,915
			---------------------	---------------------
			341,090,667	339,350,647
EXPENDITURE
Financial charges		21	255,527,808	256,784,551
Administrative and operating expenses		22	38,855,132	34,548,857
Provision for doubtful debts			15,437,530	5,184,610
Amortization of deferred costs			7,534,531	8,471,859
			---------------------	---------------------
			317,355,001	304,989,877
			---------------------	---------------------
PROFIT FOR THE YEAR BEFORE TAXATION			23,735,666	34,360,770
TAXATION
Current		23	3,924,436	3,745,021
Prior			--	5,402,840
Deferred		11.4	(5,500,000	5,500,000
			---------------------	---------------------
			(1,575,564)	14,647,861
PROFIT AFTER TAXATION			25,311,230	19,712,909
Accumulated profit brought forward			205,691	4,213,954
			---------------------	---------------------
Profit available for appropriation			25,516,921	23,926,863
APPROPRIATIONS:
Transfer to statutory reserve			5,062,246	3,942,582
Transfer from general reserve for deferred taxation			(14,740,0001	--
Transfer to capital reserve for deferred taxation			24,440,000	--
Transfer to reserve for issue of bonus shares		11.20	9,956,914	--
Transfer to general reserve			--	4,000,000
Proposed dividend: Nil (1998:15%)			--	15,778,590
			---------------------	---------------------
			24,719,160	23,721,1 72
			---------------------	---------------------
Unappropriated profit carried forward			797,761	205,691
			============	============
Basic earnings per share		24	2.41	1.87
			============	============
The annexed notes form an integral part of these accounts.
SANAULLAH QURESHI	KHALEEQ-UR-RAHMAN KHAN		YUSUF H. SHIRAZI
Director	Chief Executive		Chairman
CASH FLOW STATEMENT
FOR THE YEAR ENDED JUNE 30, 1999
			1999	1998
			Rupees	Rupees
CASH FLOWS FROM OPERATING ACTIVITIES
Profit for the year before taxation			23,735,666	34,360,770
Adjustments for:
Depreciation on fixed assets			4,334,683	3,513,745
Amortization of deferred costs			7,534,531	8,471,859
Provision for doubtful debts			15,437,530	5,184,610
Profit on sale of shares			(675,195)	--
Profit on sale of fixed assets			(457,574)	(97,157)
Interest/mark-up expense (net of interest
income on foreign currency deposits)			239,072,069	220,984,064
Investment income			(24,836,363)	(20,743,911)
			---------------------	---------------------
			240,409,681	217,313,210
			---------------------	---------------------
Operating profit before working capital changes			264,145,347	251,673,980
(Increase)/decrease in current assets
Short term finances			--	2,000,000
Short term investments			--	15,000,000
Advances, prepayments and other receivables			(12,940,61	32,207,749
			---------------------	---------------------
			(12,940,615)	49,207,749
Increase/(decrease) in current liabilities
Certificates of investment			45,036,588	9,981,650
Short term finances			106,583,130	(14,300,000)
Finance under mark-up arrangements			(11,612,462)	(16,435,595)
Accrued and other liabilities			(18,197,589)	(32,623,944)
			---------------------	---------------------
			121,809,667	(53,377,889)
			---------------------	---------------------
Cash generated from operations			373,014,399	247,503,840
Income taxes paid			(4,059,185)	(13,494,474)
Interest/mark-up paid (net of receipt from
interest on foreign currency deposits)			(232,926,095)	(205,330,498)
Investment income received			24,877,459	19,428,956
Net cash generated from operating activities			---------------------	---------------------
			160,906,578	48,107,824
CASH FLOWS FROM INVESTING ACTIVITIES
Long term investments			8,050,811	(15,000,000)
Capital expenditure			(9,093,065)	(4,410,994)
Long term deposits			(10,000)	(224,700)
Net investment in lease finance (net of repayments)			(31,831,206)	(27,591,696)
Sale of fixed assets			2,504,814	2,902,427
Loans to executives			(4,934,778)	(1,766,366)
Recoveries of loans to executives			654,665	235,118
			---------------------	---------------------
Net cash used in investing activities			(34,658,759)	(45,856,211)
CASH FLOWS FROM FINANCING ACTIVITIES
Issue of Certificates of Investment			(543,191)	(9,973,463
Long term loans			150,000,000	73,105,579
Repayment of long term loans			(227,91,529)	(141,876,171)
Deferred costs			(1,452,562)	(19,153,800)
Dividends paid			(15,778,590)	--
Long term advances and deposits			35,200,479	1,491,293
			---------------------	---------------------
Net cash used in financing activities			(60,565,393)	(96,406,562)
			---------------------	---------------------
Net increase/(decrease) in cash activities			65,682,426	(94,154,949)
Cash and bank balances at the beginning of the year			133,882,522	228,037,471
			---------------------	---------------------
Cash and bank balances at the end of the year			199,564,948	133,882,522
			============	============
SANAULLAH QURESHI	KHALEEQ-UR-RAHMAN KHAN		YUSUF H. SHIRAZI
Director	Chief Executive		Chairman
NOTES TO THE ACCOUNTS
FOR THE YEAR ENDED JUNE 30, 1999
1. THE COMPANY AND ITS OPERATIONS
The company is incorporated in Pakistan and is listed on the Karachi, Lahore and Islamabad
stock exchanges. It essentially carries on the business of leasing.
2. SIGNIFICANT ACCOUNTING POLICIES
2.1 Accounting convention
These accounts have been prepared under the historical cost convention.
2.2 Revenue recognition
The company follows the "Finance Method" in accounting for recognition of lease income.
Under this method the unearned lease income i.e. the excess of aggregate lease rentals
and the residual value over the cost of leased asset is deferred and then amortized to
income over the term of the lease, applying the annuity method to produce a constant
rate of return on the net investment in the lease.
Other lease related income is recognised as and when realised.
Return on government investments is recognized on an accrual basis on the assumption
that such investments will be held upto the next terminal date.
Dividends from equity securities are recognised when the right to receive such dividends
becomes vested.
2.3 Tangible fixed assets
These are stated at cost less accumulated depreciation. Depreciation is charged to
income applying the reducing balance method at the rates specified in note 3 to the
accounts. In respect of additions during the year, depreciation is charged for the full
year, however, no depreciation is charged in the year of disposal.
Profit or loss on disposal of assets is included in income currently.
2.4 Deferred cost
Processing charges of long term loans and other deferred cost is being amortized over
a period of three years from the year of incurrence.
2.5 Investments
Long term investments
These are stated at cost. Provision for diminution in value of investments is made, if
considered permanent.
Short term investments
These are stated at lower of cost and market value.
2.6 Taxation
Current
The charge for the current taxation for the year, if required, is based on taxable income,
which is computed as if all leases are operating leases.
Deferred
The tax effect for deferred taxation is calculated using the liability method on all major
temporary differences and is being dealt with as stated in note 11.2 to the accounts.
2.7 Foreign currency translations
Assets and liabilities in foreign currencies are translated at the rates of exchange which
approximate those prevailing at the balance sheet date except for liabilities covered
under an exchange risk coverage scheme which are translated at the rate prevailing on
the date of disbursement. Exchange differences arising as a result of obtaining cover
under these schemes are being amortized over the period of loan. Net exchange
differences arising due to hedging mechanism are accounted for as deferred revenue/
deferred cost as the case may be and are credited/amortized to the income over the
term of the underlying transactions.
2.8 Off-setting 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 a 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. Income and expenses arising from such assets and liabilities
are also accordingly offset.
2.9 Employees' retirement benefits
The company operates a contributory provident fund for all its permanent employees
and contributions are made monthly in accordance with the fund rules.
2.10 Provision for doubtful debts
Keeping in view the nature of leasing business, the company, as a prudent policy,
makes this provision at a reasonable level, which as per management's anticipation is
adequate for potential losses on the lease portfolio.
3.    OPERATING FIXED ASSETS
		Cost				Depreciation		Accumulated	Written down	Depre-
				As at	Accumulated			as at	value as at	ciation
	As at			June 30,	as at	Charge for	On	June 30,	June 30,	Rate
Description	1-Jul-98	Additions	Disposals	1999	1-Jul-98	the year	disposals	1999	1999	on
	Rupees	Rupees	Rupees	Rupees	Rupees	Rupees	Rupees	Rupees	Rupees	WDV
										%
Leasehold improvements	1,637,935	135,000	--	1,772,935	704,148	106,879	--	811,027	961,908	10
Furniture and fixtures	1,489,287	9,500	81,666	1,417,121	596,492	86,822	47,590	635,724	781,397	10
Office equipment	1,441,439	17,500	111,485	1,347,454	482,828	89,885	34,223	538,490	808,964	10
Computer equipment	10,219,032	3,415,710	--	13,634,742	5,157,073	2,119,417	--	7,276,490	6,358,252	25
Electrical equipment	1,260,122	99,000	113,000	1,246,122	571,459	74,297	68,308	577,448	668,674	10
Motor vehicles	10,294,420	5,416,355	3,442,057	12,268,718	4,532,650	1,857,383	1,550,847	4,839,186	7,429,532	20
	--------------------	--------------------	--------------------	--------------------	--------------------	--------------------	--------------------	--------------------	--------------------
	26,342,235	9,093,065	3,748,208	31,687,092	12,044,650	4,334,683	1,700,968	14,678,365	17,008,727
	============	============	============	============	============	============	============	============	============
1 9 9 8	26,435,142	4,410,994	4,503,901	26,342,235	10,229,536	3,513,745	1,698,631	12,044,650	14,297,585
	============	============	============	============	============	============	============	============	============
3.1 DISPOSAL OF ASSETS
		Accumulated	Written	Sale	Mode of
Description	Cost	depreciation	down value	proceeds	disposal	Sold to
	Rupees	Rupees	Rupees	Rupees
Furniture and fixture	3,500	2,144	1,356	1,406	Tender	Mr. Saad Kamal
						B-109, Block H.N. Nazimabad
						Karachi
Furniture and fixture	3,578	2,192	1,386	1,410	Tender	Mr. Saad Kamal
						B-109, Block H.N. Nazimabad
						Karachi
Furniture and fixture	3,300	2,021	1,279	1,365	Tender	Mr. Muhammad Qasim
						R,437. Block 14, F.B. Area,
						Karachi.
Furniture and fixture	4,000	2,450	1,550	1,605	Tender	Mr. M.I. Hashmi
						R,298, Block 1, F.B Area,
						Karachi.
Furniture and fixture	56,600	32,235	24,365	500	Negotiation	Mr. Abdul Karim
						Baldia Town, Karachi.
Furniture and fixture	1,838	1,126	712	50	Negotiation	Mr. Abdul Karim
						Baldia Town, Karachi.
Furniture and fixture	7,200	4,411	2,789	100	Negotiation	Mr. Abdul Karim
						Baldia Town, Karachi.
Furniture and fixture	1,650	1,011	639	50	Negotiation	Mr. Abdul Karim
						Baldia Town, Karachi.
Office equipment	7,250	2,969	4,281	1,500	Trade-in	Image Service Shop
						55B, Chamber Lane Road
						Lahore
Office equipment	70,000	6,878	13,122	500	Negotiation	Memon Electronics
						Saddar, Karachi
Office equipment	3,100	1,066	2,034	300	Negotiation	Mr. Abdul Rauf
						Arambag Road, Karachi.
Office equipment	2,635	1,716	919	150	Negotiation	Mr. Abdul Rauf
						Arambag Road, Karachi.
Office equipment	18,000	6,190	11,810	600	Negotiation	Memon Electronics
						Saddar, Karachi
Office equipment	17,500	6,019	11,481	600	Negotiation	Memon Electronics
						Saddar, Karachi
Office equipment	15,000	4,065	10,935	500	Negotiation	Memon Electronics
						Saddar, Karachi
Office equipment	28,000	5,320	22,680	500	Negotiation	Memon Electronics
						Saddar, Karachi
Electrical equipment	104,000	63,708	40,292	14,000	Negotiation	General Airconditioning
						AI-Burhan Centre, Saddar
						Karachi
Electrical equipment	4,500	2,757	1,743	200	Negotiation	Mr Abdul Karim
						Baldia Town, Karachi.
Electrical equipment	4,500	1,843	2,657	200	Negotiation	Mr. Abdul Karim
						Baldia Town, Karachi.
Motor vehicle	720,478	351,593	368,885	565,000	Tender	Mr. Mohammad Saeed
						101 Block 7/8, CPBS, Karachi
Motor vehicle	223,944	44,789	179,155	179,155	Company	Mr. Shoaib Qureshi
					Policy	Employee
Motor vehicle	280,000	56,000	224,000	280,000	Insurance	Muslim Insurance Co.
					Claim	2nd Floor Ameejee Chambers
						Campbell Steet, Karachi.
Motor vehicle	668,635	326,294	342,341	342,341	Company	Mr. M. Salim Yusuf
					Policy	Ex-Employee
Motor vehicle	364,000	268,579	95,421	266,000	Tender	Mr. Mohammad All Mirza
						5C, 27th Commercial Street
						Phase V, DHA, Karachi.
Motor vehicle	300,000	146,400	153,600	201,942	Tender	Mrs. Samina Lotia
						808 Bridge View Apt.,
						Frere Town, Clifton Karachi
Motor vehicle	280,000	0	280,000	280,000	Company	Ms. Rabia Akbar
					Policy	Ex-Employee
Motor vehicle	275,000	162,360	112,640	112.64	Company	Mr. Samih Hassan Khan
					Policy	Employee
Motor vehicle	330,000	194,832	135,168	252,200	Tender	Amjad Motors
	--------------------	--------------------	--------------------	--------------------		16-Sharae Fatima
	3,748,208	1,700,968	2,047,240	2,504,814		Jinnah, Lahore
	============	============	============	============
4. NET INVESTMENT IN LEASE FINANCE
Includes Rs. 26,277,161 (1998: Rs. 32,925,656) in respect of associated companies. Maxi-
mum amount due at the end of any month during the year was Rs. 31,903,068 (1998:
Rs. 32,563,112).
5. LONG TERM INVESTMENTS
		No. of	No. of		Average
		ordinary	ordinary	Break up value	cost	1999	1998
		shares	shares	1999	per share	Cost	Cost
	Note	1999	1998	Rupees	Rupees	Rupees	Rupees
Shares in companies:
Quoted:
Cost						--	9,766,016
Less: Provision for diminution in value
of quoted investments						--	2,390,400
						--------------------	--------------------
						--	7,375,616
Unquoted:
Arabian Sea Country Club
(Chief Operating Officer: Mr. Aslam Mohsin Ali)	5.1	100,000	100,000	619,000	10.00	1,000,000	1,000,000
						--------------------	--------------------
						1,000,000	8,375,616
Government Securities:
Federal Investment Bonds	5.2					32,500,000	32,500,000
						--------------------	--------------------
						33,500,000	40,875,616
						===========	===========
5.1 The break-up value of these shares is as per June 30, 1998 audited financial
statements.
5.2 These investments have been made in compliance with the State Bank of Pakistan's
regulations for Non-Banking Financial Institutions to maintain the liquidity requirement
against certain liabilities. These investments carry a rate of return of 15% per annum
and have terms of 10 years maturing upto November 22, 2004.
5.3 The aggregate market/break-up value of investments in shares as at June 30, 1998
was Rs. 5,936,102.
			1999	1998
6. LONG TERM LOANS, DEPOSITS AND		Note	Rupees	Rupees
DEFERRED COST
Loans to executives - secured, considered good		6.1	7,556,497	3,276,383
Less: Current portion			261,805	93,989
			----------------------	----------------------
		6.1.1	7,294,692	3,182,394
Deposits			734,486	724,486
Deferred cost		6.20	20,371,111	26,453,080
			----------------------	----------------------
			28,400,289	30,359,960
			============	============
6.1 This represents house loans to the Chief Executive Officer and 4 executives which are
repayable in 144 (in case of Chief Executive) and 180 (in case of executives) monthly
instalments respectively and carry mark-up at the rate of 10% per annum. The loans
are secured by registered mortgage of the property and assignment of life insurance
policies.
Maximum amount outstanding at the end of any month during the year against loan to
Chief Executive Officer was Rs. 1,692,077 (1998: Rs. 1,745,135) and Executives was
Rs. 5,864,420 (1998: Rs. 1,531,247)
			1999	1998
		Note	Rupees	Rupees
6.1.1 Recoverable after three years			6,000,941	3,113,082
Others			1,293,751	69,312
			----------------------	----------------------
			7,294,692	3,182,394
			============	============
6.2 Deferred cost
Front-end fee on long term loans			--	1,357,948
Net exchange difference arising due
to hedging mechanism		6.2.1	20,371,111	25,095,132
			----------------------	----------------------
			20,371,111	26,453,080
			============	============
6.2.1 Net exchange difference arising due
to hedging mechanism
Opening balance			33,659,182	14,505,382
Debit during the year			1,452,562	19,153,800
			----------------------	----------------------
			35,111,744	33,659,182
Amortized to-date			(14,740,633)	(8,564,050)
			----------------------	----------------------
			20,371,111	25,095,132
			============	============
The above is being carried forward as it
confers benefit to future years.
7. SHORT TERM INVESTMENTS
Federal investment bond			10,000,000	10,000,000
			============	============
This investment has been made in compliance with the State Bank of Pakistan's regulations
for Non-Banking Financial Institutions to maintain the liquidity requirement against certain
liabilities. The investment carries a rate of return of 12% per annum and shall mature on
August 07, 1999.
			1999	1998
		Note	Rupees	Rupees
8. ADVANCES, PREPAYMENTS AND
OTHER RECEIVABLES
Advances - considered good
-- against assets to be leased out		8.1	7,441,079	8,758,777
-- for capital expenditure			--	1,300,000
-- for expenses			78,669	300,000
-- to employees			387,141	489,798
-- to customers against COIs			860,000	--
			----------------------	----------------------
			8,766,889	10,848,575
Current portion of loan to executives			261,805	93,989
Prepayments			979,983	2,561,262
Accrued lease income		8.2	23,595,967	27,747,237
Accrued profit on long term investments			2,073,287	2,291,917
Accrued profit on short term investments			177,534	--
Advance Income Tax			2,649,631	2,514,882
Other charges recoverable from lessees		8.3	17,872,816	6,531,947
Repossessed asset held for sale			3,247,446	--
Other receivables			1,589,668	640,774
			----------------------	----------------------
			61,215,026	53,230,583
			============	============
8.1 Included in the above are advances against assets to be leased out amounting to Rs.
4,577,721 (1998: Rs. 4,577,721) to an associated undertaking. The lease has been
executed subsequently. The maximum amount outstanding at the end of any month
during the year was Rs. 4,577,721 (1998: Rs. 7,577,721).
8.2 Included in the above is Rs. 2,975,163 (1998: Rs. 1,917,797) mark-up charged on an
advance against lease to an associated undertaking. This has been received subse-
quently. The maximum amount due at the end of any month during the year was Rs.
2,975,163 (1998: Rs. 1,917,797).
8.3 Other charges recoverable from lessee
Considered good			17,872,816	6,531,947
Considered doubtful			1,066,371	--
			----------------------	----------------------
			18,939,187	6,531,947
Less: Provision for doubtful receivables			1,066,371	--
			----------------------	----------------------
			17,872,816	6,531,947
			============	============
9. CASH AND BANK BALANCES
Cash in hand			39,238	22,563
Stamps in hand			31,860	48,251
Cheques in hand			8,404,137	6,245,180
With banks on
current accounts			12,380,243	1,758,624
local currency deposit account			7,956,526	5,449
foreign currency deposit account			122,059	109,310
foreign currency deposit accounts		9.1	169,130,885	124,193,145
special account with SBP		9.2	1,500,000	1,500,000
			----------------------	----------------------
			199,564,948	133,882,522
			============	============
9.1 Foreign currency deposits		9.1.1	656,367,447	712,785,825
Less: Credit facilities availed			487,236,562	588,592,680
			----------------------	----------------------
			169,130,885	124,193,145
			============	============
9.1.1 The foreign currency deposits are under lien with respect to credit facilities availed
on a matching facility basis and have been offset in accordance with note 2.8.
The rate of interest on the deposits ranges from 6.81% to 7.91% per annum.
The rate of mark-up on the credit facility availed ranges from 14% to 15.30% per
annum. The maturity of credit facilities and foreign currency deposits are upto
September 15, 2003.
9.2 This represents the amount kept with State Bank of Pakistan to comply with the regu-
lations of State Bank of Pakistan for Non-Banking Financial Institutions to maintain the
liquidity requirement against certain liabilities.
10. ISSUED, SUBSCRIBED AND PAID-UP CAPITAL
8,864,060	ordinary shares of Rs.10 each
	issued as fully paid in cash	10.1	88,640,600	88,640,600
1,655,000	ordinary shares of Rs.10 each
	issued as fully paid bonus shares		16,550,000	16,550,000
----------------------			----------------------	----------------------
10,519,060			105,190,600	105,190,600
============			============	============
10.1 Includes 536,560 ordinary shares of Rs.10 each issued to International Finance
Corporation at premium of Rs.10.85 per share upon exercise of their option to convert
a portion of its loan into equity based on financial statements as at June 30, 1995 as
per the loan agreement (refer to note 12.8).
11. RESERVES
Capital reserves
Premium on shares		11.1	--	5,821,676
Reserve for issue of bonus shares		11.2	15,778,590	--
Statutory reserve		11.3	38,700,289	33,638,043
Reserve for deferred taxation		11.4	24,440,000	--
			----------------------	----------------------
			78,918,879	39,459,719
Revenue reserves
General reserve		11.5	58,109,095	72,849,095
Unappropriated profit			797,761	205,691
			----------------------	----------------------
			58,906,856	73,054,786
			----------------------	----------------------
			137,825,735	112,514,505
			============	============
11.1 Premium on shares
Balance at the beginning of the year    10.1			5,821,676	5,821,676
Transfer to reserve for issue of bonus shares			(5,821,676)	--
			----------------------	----------------------
			--	5,821,676
			============	============
11.2 Reserve for issue of bonus shares
Transfer from profit and loss
appropriation account			9,956,914	--
Transfer from premium on shares account			5,821,676	--
			----------------------	----------------------
			15,778,590	--
			============	============
Proposed issue of bonus shares
is in the ratio of 3:20 (1998: Nil)
11.3 This represents 20% of after tax profit as required under the relevant provision of the
State Bank of Pakistan regulations for Non Banking Financial Institutions.
11.4 Deferred taxation arising due to timing differences computed under the liability method
is estimated at Rs. 83.42 million of which Rs. 9.7 million is in respect of the current year
(1998: Rs. 73.72 million, for the year Rs. 15.18 million). The company has appropriated
Rs. 24.44 million in the current financial year (being one-fifth of the opening balance of
deferred tax liability plus a further sum of Rs. 9.7 million for current year) to achieve
compliance with Circular 16 of 1999 issued by Securities and Exchange Commission of
Pakistan. Deferred tax liability due to timing differences amounting to Rs. 58.98 million,
therefore remain to be appropriated over the next four years. As a result, deferred tax
provision previously made of Rs. 5.5 million has been written back.
11.5 General reserve
Balance as at beginning of the year			72,849,095	68,849,095
Transfer to profit and loss appropriation account
for deferred taxation			(14,740,000)	--
Transfer from profit and loss appropriation account			--	4,000,000
			----------------------	----------------------
			58,109,095	72,849,095
			============	============
12. LONG TERM LOANS- Secured
Foreign currency loans
Commonwealth Development Corp. II		12.2	11,110,604	33,515,685
Asian Development Bank I			--	21,040,369
Asian Development Bank II		12.3	467,100,000	464,200,000
Netherlands Development Finance Co. I		12.4	37,042,965	61,565,164
Netherlands Development Finance Co. II		12.5	195,943,260	229,305,516
German Investment and Development Co. I 12.6			16,818,114	27,981,079
German Investment and Development Co. II 12.7			29,590,549	41,401,504
International Finance Corporation (Loan A)		12.8	167,697,076	204,961,253
International Finance Corporation (Loan B)			--	25,531,000
			----------------------	----------------------
			925,302,568	1,109,501,570
Less: Exchange differences not yet due			1,510,746	2,364,071
			----------------------	----------------------
			923,791,822	1,107,137,499
Local currency loans from
Investment bank - loan 1		12.9	7,500,000	22,500,000
banking company -loan 2		12.1	50,000,000	26,250,000
banking company - loan 3		12.1	8,952,466	12,348,318
banking company - loan 4		12.1	100,000,000	--
			----------------------	----------------------
			166,452,466	61,098,318
			----------------------	----------------------
			1,090,244,288	1,168,235,817
Less: Current maturity			321,284,672	286,750,724
			----------------------	----------------------
			768,959,616	881,485,093
			============	============
12.1 All the loans stated in note 12.2 to 12.12 above are secured by pari-passu floating
charge on the present and future leased assets, hypothecation of movable assets and
receivables of the company and demand promissory notes. The foreign currency loans
are registered with the State Bank of Pakistan.
12.2 This represents balance of a second loan facility of Pound Sterling 2,500,000 obtained
from Commonwealth Development Corporation (CDC) for financing lease operations.
The loan is repayable in 10 equal semi-annual instalments which commenced from
January 25, 1995.
The liability of this loan has been fixed in Pakistani Rupees under the exchange risk
cover scheme of State Bank of Pakistan and the rate of interest and exchange risk
cover fee is 10.5% and 6.93% per annum respectively, payable half-yearly. In case the
company fails to pay any amount on the due date, it shall be liable to pay liquidated
damages at the rate of 1% per annum over and above the interest rate.
12.3 This represents balance of a second loan facility of US $ 10,000,000 obtained from
Asian Development Bank (ADB) for financing lease operations. The loan is repayable in
10 equal semi-annual instalments which commenced from March 15, 1999.
The interest rate is LIBOR plus 2.25% per annum payable half-yearly. In case the
company fails to pay any amount on the due date, it shall be liable to pay liquidated
damages at the rate of 1% per annum over and above the interest rate.
12.4 This represents balance of a loan facility of Netherland Guilders (NLG) 10,000,000
comprising of two equal tranches of NLG 5,000,000 each and was obtained from
Netherlands Development Finance Company (FMO) for financing lease operations. The
loan is repayable in 14 equal semi-annual instalments which commenced from November
1, 1994 for the first tranche and November 1, 1995 for the second tranche.
The liability of this loan has been fixed in Pakistani Rupees under the exchange risk
cover scheme of State Bank of Pakistan. The rate of interest and exchange risk cover
fee is 10.7% and 5% per annum respectively, payable half-yearly. In case the company
fails to pay any amount on the due date, it shall be liable to pay liquidated damages at
the rate of 2% per annum over and above the interest rate.
12.5 This represents the balance of a second loan facility of US $ 5,821,618 equivalent to
Netherland Guilders (NLG) 10,000,000 obtained from Netherlands Development Finance
Company (FMO) for financing lease operations. The loan has been drawn in two tranches
and is repayable in 10 equal semi-annual instalments which commenced from
November 1, 1997 and May 1, 1998 respectively.
The interest rate for the first tranche is 10.50% per annum and for the second tranche is
10.25% per annum payable half-yearly. In case the company fails to pay any amount
on the due date, it shall be liable to pay liquidated damages at the rate of 2% per annum
over and above the interest rate.
12.6 This represents the balance of a loan facility of Deutsche Marks 5,000,000 obtained
from German Investment and Development Company (DEG) for financing lease
operations. The loan is repayable in 15 equal semi-annual instalments which commenced
from October 30, 1993.
The liability of this loan has been fixed in Pakistani Rupees under the exchange risk
cover scheme of State Bank of Pakistan. The rate of interest and exchange risk cover
fee is 10.5% and 5% per annum respectively, payable half-yearly. In case the company
fails to pay any amount on the due date, it shall be liable to pay liquidated damages at
the rate of 2% per annum over and above the interest rate.
12.7 This represents the balance of a loan facility of Deutsche Marks 5,000,000 obtained
from German Investment and Development Company (DEG) for financing lease
operations. The loan is repayable in 15 equal semi-annual instalments which commenced
from October 30, 1994.
The liability of this loan has been fixed in Pakistani Rupees under the exchange risk
cover scheme of State Bank of Pakistan. The rate of interest and exchange risk cover
fee is 10.6% and 5.77% per annum respectively, payable half-yearly. In case the company
fails to pay any amount on the due date, it shall be liable to pay liquidated damages at
the rate of 2% per annum over and above the interest rate.
12.8 This represents the balance of a loan facility (A) of US $ 10,000,000 obtained from
International Finance Corporation (IFC) for financing lease operations. The loan is
repayable in 16 equal semi-annual instalments which commenced from June 15, 1996.
In accordance with the loan agreement IFC has exercised its conversion option of loan
into equity (refer to note10.1).
The liability of this loan has been fixed in Pakistani Rupees under the exchange risk
cover scheme of State Bank of Pakistan. The rate of interest and exchange risk cover
fee is 8.5% and 6.66% per annum respectively, payable half-yearly. In case the company
fails to pay any amount on the due date, it shall be liable to pay liquidated damages at
the rate of 2% per annum over and above the interest rate.
12.9 This represents the balance of a loan facility of Rs. 30,000,000 obtained from an
investment bank for financing the leasing operations of the company. The loan is
repayable in 24 equal monthly instalments which commenced from January 27~ 1998
and carries mark-up at the rate of 54.79 paisas per thousand Rupees per day.
12.10 This represents the balance of a loan facility of Rs. 50,000,000 obtained from a banking
company for financing the leasing operations of the company. The loan is repayable in
12 equal quarterly instalments which will commence from September 30, 1999 and
carries mark-up at the rate of 46.58 paisas per thousand Rupees per day.
12.11 This represents the balance of a loan facility of Rs. 13,105,579 obtained from a banking
company for financing the leasing operations of the company. The loan is secured by
second charge on leased assets of the company. The loan is repayable in 12 quarterly
instalments which commenced from April 01, 1998 and carries mark-up at the rate of
50.68 paisas per thousand Rupees per day.
12.12 This represents the balance of a loan facility of Rs. 100,000,000 obtained from a banking
company for financing the leasing operations of the company. The loan is repayable in
6 equal semi annual instalments which will commence from September 20,1999 and
carries mark-up at the rate of 48.63 paisas per thousand Rupees per day.
			1999	1998
		Note	Rupees	Rupees
13. LONG TERM DEPOSITS
From lessees
Security deposits on lease
contracts		13.1	264,325,200	229,170,160
From employees		13.2	935,093	889,654
			---------------------	---------------------
			265,260,293	230,059,814
Less: Current maturity of security deposits on
lease contracts			88,093,847	65,568,216
			---------------------	---------------------
			177,166,446	164,491,598
			============	============
13.1 These represent security deposits received against lease contracts and are repayable/
adjustable at the expiry of respective lease periods.
13.2 These represent deposits from employees under the company's car scheme.
14. CERTIFICATES OF INVESTMENT
The company has a scheme of registered Certificates of Investment (COl) for resource
mobilization as per the permission from the Corporate Law Authority (now SECP) Government
of Pakistan. The terms of these Certificates of Investment range from three months to five
years and the return is paid on agreed profit and loss sharing basis.
15. SHORT TERM FINANCES
From financial institutions - unsecured			190,000,000	57,000,000
From others - unsecured			8,583,130	35,000,000
			---------------------	---------------------
			198,583,130	92,000,000
			============	============
The mark-up rate on the above ranges from 37.67 to 49.73 paisas per thousand Rupees per
day.
16. FINANCE UNDER MARK-UP ARRANGEMENTS
Running finances from banks utilized
under mark-up arrangements - secured			348,705	11,961,167
			============	============
The facilities from commercial banks amount to Rs. 71.5 million (1998: Rs. 68.50 million) and
the mark-up rates range from 43.84 to 47.95 paisas per thousand Rupees per day and are
payable currently. The arrangements are secured by pari-passu floating charge on present
and future leased assets and hypothecation of rentals receivable.
			1999	1998
			Rupees	Rupees
17. ACCRUED AND OTHER LIABILITIES
Accrued expenses			894,229	2,047,809
Mark-up on secured
- long term loans			25,644,934	21,069,307
- credit facilities availed [net of accrued interest on
foreign currency deposits Rs.27,881,487 -
(1998: Rs. 29,804,226) - refer to note 9.1]			12,425,879	17,176,159
- running finances			298,399	504,718
- short term finances			--	648,767
Mark-up on unsecured short term finances			3,934,014	915,938
Exchange risk cover fee and charges payable to SBP
[net of exchange difference refundable
Rs.83,762,380 (1998: Rs. 49,190,061 )]			286,385	19,917,999
Guarantee commission and other
charges on long term loans			1,186,997	1,732,239
Profit payable on Certificates of Investment			20,532,182	16,374,544
Other liabilities
Advance from customers pending
lease execution			1,180,875	1,083,660
Advance lease rentals from lessees			5,458,635	5,872,536
Payments from lessees received on account			13,242,348	9,672,635
Unclaimed dividends			11,113	18,248
Others			1,180,969	1,294,014
			---------------------	---------------------
			21,073,940	17,941,093
			---------------------	---------------------
			86,276,959	98,328,573
			============	============
18. COMMITMENTS
Letters of comfort against letters of credit			5,000,000	3,881,722
Lease commitments			4,915,950	2,801,461
Capital expenditure for computer software
(associated undertaking)			--	700,000
			---------------------	---------------------
			9,915,950	7,383,183
			============	============
19. INCOME FROM LEASING OPERATIONS			311,923,488	317,763,732
			============	============
The above includes all income arising on account of leasing operations.
20. OTHER INCOME
Return on long term investments:
Government securities			4,875,000	4,978,626
Dividends [including Rs. 321,163
(1998: Rs.100,023) from associated undertakings]			355,663	136,773
			---------------------	---------------------
			5,230,663	5,115,399
Return on deposit account			7,163,009	--
Return on short term investments			1,358,904	1,400,000
Income from shod term placements			11,439,450	14,365,285
Mark-up on short term finances			83,333	62,500
Exchange gain			1,879,138	3,039
Mark-up on loans to executives			616,545	181,366
Profit on sale of fixed assets			457,574	97,157
Profit on sale of shares			675,195	--
Guarantee commission			123,126	291,056
Miscellaneous			140,242	71,113
			---------------------	---------------------
			29,167,179	21,586,915
21. FINANCIAL CHARGES
Mark-up on secured
- long term loans			111,714,733	116,067,769
- credit facilities availed [net of interest on foreign
currency deposits Rs. 52,754,616
(1998: Rs. 58,849,901) - refer to note 9.1]			27,770,955	33,047,469
- running finances			722,579	1,444,064
- short term finances			3,134,177	6,720,385
Mark-up on shod term finance - unsecured			39,189,247	10,959,833
Profit on Certificates of Investment			56,540,378	52,744,544
Exchange risk cover fee			23,110,082	27,667,177
(Refund) / accrual in respect of late payment of
exchange risk cover fee - net			(8,475,905)	4,846,429
Guarantee commission and other charges on
long term loans			1,225,124	1,707,956
Bank charges			596,438	1,508,925
Others			--	70,000
			---------------------	---------------------
			255,527,808	256,784,551
			============	============
			1999	1998
			Rupees	Rupees
22. ADMINISTRATIVE AND OPERATING EXPENSES
Salaries, allowances and benefits			18,096,615	16,442,037
Rent, rates and taxes			2,988,433	2,688,652
Gas, electricity and utilities			535,469	652,197
Printing and stationery			1,111,913	1,036,943
Insurance			1,363,118	1,153,944
Repairs and maintenance			1,492,098	1,294,385
Travelling and conveyance			1,081,746	741,276
Staff training expenses			216,900	160,114
Membership and subscription			348,649	323,854
Canteen and entertainment expenses			445,370	694,199
Postage expenses			154,198	150,154
Telephone expenses			1,980,814	2,503,865
Legal and professional charges			1,914,605	779,033
Vehicle running expenses			1,826,687	1,416,725
Advertisement			129,313	385,480
Depreciation			4,334,683	3,513,745
Stamps and fees			306,244	196,734
Freight and packing			--	86,349
			---------------------	---------------------
Auditors' remuneration
Audit fee			90,000	90,000
Taxation services			106,934	32,896
Special audit fee			90,000	--
Other certifications			3,000	20,000
Out-of-pocket expenses			19,731	12,193
			---------------------	---------------------
			309,665	155,089
Donations			--	6,000
Professional tax			218,612	163,155
Miscellaneous			--	4,927
			---------------------	---------------------
			38,855,132	34,548,857
			============	============
23. TAXATION
Assessments have been finalised upto assessment year 1998-99. Provision for current taxa-
tion has been made on the basis of minimum tax under section 80D of the Income Tax Ordi-
nance, 1979.
24. BASIC EARNINGS PER SHARE
Basic earnings per share are calculated by dividing the net profit for the year by the weighted
average number of shares outstanding during the year as follows:
Profit after tax for the year			25,311,230	19,712,909
			============	============
Weighted average number of shares outstanding
during the year			10,519,060	10,519,060
			============	============
Basic earnings per share			2.41	1.87
			============	============
24.1 No figure for diluted earnings per share has been presented as the company has not
issued any instruments which would have an impact on earnings per share when exer-
cised.
			1999	1998
			Rupees	Rupees
25. TRANSACTIONS WITH ASSOCIATED UNDERTAKINGS
Insurance premium expense			1,052,194	1,004,717
Paid towards software development			1,105,000	300,000
Services provided by			1,476,086	1,476,098
Services provided to			--	2,513
Expenses charged by			25,184	--
Expenses charged to			--	3,772,776
Lease rentals and advances received			17,079,116	14,353,242
Cost of assets leased			4,215,000	23,036,728
Issue of Certificates of Investment			22,000,000	21,000,000
Purchase of vehicles			1,655,555	1,661,887
Sale of fixed assets			--	1,558,383
Short term finance obtained			250,000,000	70,000,000
Short term finance repaid			250,000,000	90,065,753
Mark-up on short term finance obtained			9,591,997	3,950,388
Profit on Certificates of Investment paid			1,275,001	320,124
Guarantee commission			123,126	291,056
Mark-up accrued on advance			1,057,366	1,917,797
Transactions with associated undertakings are entered into in the normal course of business
at contracted rates and terms determined in accordance with market rates.
26. REMUNERATION OF CHIEF EXECUTIVE, DIRECTOR AND EXECUTIVES
Remuneration in respect of the above charged in these accounts is as follows:
			1999			1998
	Chief				Chief
	Executive	Director	Executives	Total	Executive	Director	Executives	Total
	Rupees	Rupees	Rupees	Rupees	Rupees	Rupees	Rupees	Rupees
Managerial
remuneration	1,697,902	--	6,668,252	8,366,154	1,021,000	1,018,500	4,368,908	6,408,408
Housing and
utilities	737,431	--	2,917,783	3,655,214	514,800	502,425	2,107,948	3,125,173
Medical, allowances
and other expenses	11,337	--	308,591	319,928	66,243	493,788	484,474	1,044,505
Provident fund	134,078	--	515,568	649,646	93,600	91,350	385,053	570,003
	---------------------	---------------------	---------------------	---------------------	---------------------	---------------------	---------------------	---------------------
	2,580,748	--	10,410,194	12,990,942	1,695,643	2,106,063	7,346,383	11,148,089
	============	============	============	============	============	============	============	============
Number of persons	1	--	22		1	1	21
	============	============	============	============	============	============	============
26.1 The Chief Executive is provided with free use of company maintained car.
26.2 Fees totaling Rs. 8,OOO (1998: Rs. 7,500) were paid to five directors (1998: five direc-
tors) for attending Board Meetings during the year.
27. CREDIT RISK AND CONCENTRATIONS OF CREDIT RISK
Credit risk is the risk, which arises with the possibility that one party to a financial instrument
will fail to discharge an obligation and cause the other party to incur a financial loss. The
company attempts to control credit risk by monitoring credit exposures by undertaking trans-
actions with a large number of counterparties in various industries and by continually as-
sessing the credit worthiness of counterparties.
Concentration of credit risk arises when a number of counterparties have a similar type of
business activities. As a result, any change in economic, political or other conditions would
effect their ability to meet contractual obligations in a similar manner.
The company follows a two pronged policy. Firstly, it has developed its own prudent operating
policies duly approved by the Board of Directors. Secondly, it follows the regulations issued
by the State Bank of Pakistan. The internal policy prescribes the maximum limits of fund and
non-fund based exposures with respect to a particular sector or a business group. Extra care
is taken to ensure that per party and per sector exposures remain within limits prescribed by
the internal policy and the State Bank of Pakistan regulations.
Details of the industry sector analysis of lease portfolio is given below:
	June 30, 1999