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May 20 -June 02, 2002

Mr. Zaigham Mahmood Rizvi, Managing Director of Pakistan Kuwait Investment Company (Pvt.) Limited (Pak Kuwait) gave a briefing about the various measures being adopted by the Company to maintain its strategic position, as well as initiatives being undertaken by Pak Kuwait to act as a catalyst to assist in revival of investment activities in Pakistan.

The Company is actively involved in a number of diversified activities, which include short/long term finance, project finance, leasing, local capital market and Treasury operations, as well as advisory activities, including privatization, debt/equity syndications, bond issues mergers/acquisitions, and other advisory activities.

During the year 2001, Pak Kuwait has made considerable progress towards achieving its medium-term strategic objectives. Key achievements include balance sheet growth (both in the loan and deposit portfolios), successful implementation of an equity market investment strategy and prudent risk management. Operating profit during this period increased 44% from Rs. 685 million in FY2000 to Rs. 984 million in FY2001. The initiatives and prudent approach adopted by Pak Kuwait resulted in operating profit of Rs. 984 million, this was the highest in the history of the Company and a growth in balance sheet occurring by Rs. 905 million (9%) against a net worth of more than Rupees 4 billion. Pak Kuwait continues its highly impressive record of dividend pay-outs. An interim dividend of Rs. 165 million out of the first quarterly accounts of the year 2002 was paid along with the dividend of Rs. 200 million declared for the year 2001.

During the year ended December 31, 2001, Pak Kuwait sanctioned 60 credit facilities in the total amount of Rs.3.0 billion and disbursements stood at Rs. 2.6 billion, registering an appreciation of 28% in amounts sanctioned and 25% in disbursements, in diversified sectors.

Cognisant of the need to maintain and improve asset quality, particularly in view of the stagnant economic environment, efforts were made to diversify the client base and book new loans. Carefully targeted marketing resulted in the loan portfolio of Pak Kuwait being well diversified. Due to strict credit controls and project monitoring, loan portfolio quality has been maintained despite the difficult economic environment.

The Company has undertaken several initiatives to streamline internal processes through the introduction of Digital Archiving of records and via ISO-certification. This would enable Pak Kuwait to establish a strong organizational foundation, documentation and manualization for improvement of internal management and control systems required to meet international standards.

Pak Kuwait has promoted Islamic mode of financing in the country. The Company has made a concerted effort to move towards offering financing facilities via introduction of Shariah compliant instruments, along with the conventional financing products. Moreover, in order to achieve its long-standing vision of establishing an Islamic bank, Pak Kuwait sponsored Al Meezan Investment Bank Ltd in 1997, whose mandate is to conduct investment banking purely on the basis of Shariah. By the grace of Allah (SWT) the Islamic investment bank has now been converted to and is operational as the country's premier Islamic Bank - Meezan Bank Limited, which would conduct banking operations based entirely on Islamic principles.

Other companies sponsored by Pak Kuwait include A1 Meezan Investment Management Ltd. (an investment advisory company), Al Meezan Mutual Fund (a Rs.250 million closed ended Mutual Fund). Additionally, Pak Kuwait has taken the initiative for investment and promotion of Information Technology in Pakistan via establishment of Al Meezan Education Development Services and floatation of an Information Technology venture capital fund in the name of TMT-PKIC Fund. Pak-Kuwait is committed to being in the forefront of such transactions in the future.

In view of the policy decision by the Government of Pakistan to encourage small and medium sized businesses, Pak Kuwait set-up a Micro Finance Cell as a pilot project to survey the market, in addition to financing to small and medium enterprises.

Pak Kuwait has established the Micro Finance Cell to offer financial services for the benefit of disadvantaged section of the population. This Cell will design products and provide financial assistance to Micro Entrepreneurs for initiating or expanding income generating activities in commercial, industrial, agricultural and service sector. The Cell will promote formation and capacity building of community based micro-finance institutions.

While initiating and expanding income-generating activities, the Cell will collaborate with welfare associations and other institutions which are close to potential customers. It will provide a variety of support services, which would include, motivating and organizing the poor, extending financial training, helping build backward and forward linkages. The Cell will give priority to people below poverty line, 'special persons' and women. The Cell will also guide and encourage skilled workers and educated unemployed youth to start their own careers as micro entrepreneurs. The Micro Finance Cell will initially serve the Customers residing in Karachi, particularly in the rural areas and Goths adjacent to Karachi.

Pak Kuwait envisages playing a dynamic role in the area of Micro Finance. Mr. Zaigham Mahmood Rizvi, the Managing Director of Pak Kuwait has stated that Micro Finance can play a major role in employment generation and poverty alleviation.

Micro Finance Cell was formally launched on 6th of May 2002 by disbursement being effected to its first two customers, who have migrated to Karachi from Kohlo, Baluchistan. Presently they buy cloth from the market and sell in rural areas of Katror, Lasbela, Thatta, etc.

The Company continues to fulfil its responsibilities towards making useful contribution to social, charitable, educational and public welfare causes. Pak Kuwait has allocated Rs. 6.00 million towards the 'Trust Fund' established by the President of Pakistan for human development projects related to poverty alleviation, provide basic health care facilities and primary education programs.

It is a matter of pride for Pak Kuwait that the Company is the first 'AAA' (triple A) rated financial institution in Pakistan with the highest medium to long term credit rating as well as the highest short term rating of A1 + (A one plus). This rating has been reaffirmed for the third consecutive year by JCR-VIS Credit Rating Company Limited. Mr. Zaigham Mahmood Rizvi, the Managing Director of Pak Kuwait has stated that achievement of this rating would enable Pak-Kuwait to meet new challenges for an improved benchmark. The reaffirmation of Pak-Kuwait's 'AAA' (triple A) credit rating is recognition of the institution's strength. Insha Allah this rating will be maintained in the future.