ASKARI LEASING LIMITED

Jan 12 - 18, 2004

Askari Leasing Limited has established itself as a frontrunner in the Leasing Industry. Its Askar Auto Leasing Product is well recognized. It is also active in leasing of Equipment, Machinery and Consumer Durables Products. Mr. Nasier Sheikh is the Chief Executive Officer of the Company. He joined Askari Leasing Ltd, on October 1, 2002. He brings with him more than thirty (30) years of experience in senior banking and management positions, with both local and foreign banks. His last position, prior to joining Askari Leasing Limited was being SEVP/Group Head of Askari Commercial Bank Ltd. His other assignments include senior banking positions with prominent bank in the Gulf and Sri Lanka.

Askari Leasing Limited (ALL), a subsidiary of Army Welfare Trust (AWT), was incorporated in August, 1993 with an authorized share capital of Rs. 500 million and is listed on all three Stock Exchanges of the country. The company has generated enough resources to adequately finance its leasing operations, mainly by securing funds through Certificates of Investment, which is reflective of the confidence of COI holders repose in the company's management and its business potential. The company's operations are based on sound appraisal criteria and standards and are focussed on quality lease business. Major areas of financing include consumer auto leasing and big ticket leasing to large local and multinational companies. Askar, the auto lease package has firmly placed the company in auto finance market. Funds have been deployed in a well diversified lease portfolio and the company is successfully playing its role in the growth of national economy.

PERFORMANCE HIGHLIGHTS (2002-2003)

The past year was characterized by difficult environment for the leasing industry, contributed in part by the existing low interest rate regimes, lack of credit appetite in the corporate sector and very aggressive posturing by the large commercial banks in the consumer and auto lease sector. In this difficult business environment, the management of the company embarked upon the strategies to counter the unfavourable trends. Company entered into marketing alliances with vehicle manufactures to ensure prompt delivery to costumers of small cars. This had the desired positive effect on the brand name "Askar". In order to diversify the portfolio to areas other than auto financing, the management also decided to enter into lease financing of consumer Durable Products, which has been initially launched in major cities of Pakistan under the brand name Asklife. Similarly the management plans to introduce further product.

The company has managed to post better financial results in spite of constant decline in lending rates and extremely competitive environment prevalent in the last year. The total disbursement in the year 2002-2003, amounted to Rs. 2,280 million. The total Lease Assets portfolio stood at Rs. 7,906 million, whereas the Net Income for the year was Rs. 141 Million. This resulted in the Return on Equity of 13.93%. This was contributed by an increase in investment income by 32.59%. The financial charges were reduced to Rs. 745.564 million from Rs. 951.010 million, i.e. a reduction of 21.6% over the previous year. The better performance was noticed by the general public, and, it reflects in the share price of the company which increased from Rs.7.85 to Rs. 18.05, percentage increase of 130%.

Administrative expenses were curtailed from Rs. 130.23 million to Rs. 111.57 million, a reduction of 14.32%. The profit before provision, thus improved from Rs. 113.754 million to Rs. 199.168 Million, an increased of 75.09%. Resultantly the company was able to close the year with much respectable figures compared to the previous year, with a pre-tax profit of Rs. 140.551 million, against the previous years, pre-tax profit of Rs. 21.115 million. The independent Credit Rating Agency PACRA has maintained Askari Leasing's entity rating of "A plus" for long term and "Al" for short term obligation based on the result of June 30, 2002.

FINANCIAL HIGHLIGHTS

Rs. In Million

30TH JUNE, REPORTING MONTH

1999

2000

2001

2002

2003

EQUITY

Issued, Sub. & Paid up Capital

240

324

324

324

324

Reserve & Retained Earning

288

315

379

431

688

Total Equity

528

639

703

755

1,012

LIABILITIES

Long Term Liabilities

2,824

4,690

5,328

5,354

5,060

Short Term Liabilities

2,266

I ,892

1,775

2,318

1,834

Total Liabilities

5,618

7,221

7,806

8,427

7906

ASSETS

Tangible Fix Assets

22

35

94

55

46

Net Investment in Lease Finance

2,770

3,361

3,885

4,322

3,931

Total Current Assets

2,810

3,812

3,813

3,992

3,878

Total Assets

5,618

7,221

7806

8,427

7,906

INCOME STATEMENT

Lease Income

638

767

989

929

800

Total Income

798

993

1,172

1,195

1,056

Operating Expenses

49

67

96

130

112

Financial Expenses

665

795

938

951

745

Profit Before Taxation

71

100

77

21

141

Net Profit

62

91

64

21

141

SHARE PRICE

As on 30th June

2002

2003

Per Share Market Value

Rs. 7.85

Rs. 18.05