ASKARI LEASING LIMITED

Dec 27, 2004 - Jan 02, 2005

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 includes 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 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 (2003-2004)

Askari Leasing Limited has established itself as a frontrunner in the Leasing Industry. Its "Askar" Auto Leasing Product is well recognized brand name. It is also active in leasing of Equipment, Machinery and Consumer Durables Products. The year in study was characterized by difficult environment for the Leasing industry as whole, 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 further diversify the portfolio to areas other than auto financing, the management also decided to enter into House Finance and Bill Discounting, for which license from SECP have already been received. Management is confident of favourable impact on disbursement as well as profitability during the year follow. Our newly launched product "Asklife" in the meanwhile is also gaining ground slowly but gradually.

The company has managed to disburse Rs. 2.7 billion in its leasing business, which include a disbursement of Rs. 1.9 billion in auto financing. Total disbursement under the year under review showed an increase of 19.43% as compared to previous year. In addition to that company also marketed Auto Finance business of Rs. 867 million for Askari Commercial Bank Limited, a group company of AWT. During period under review our lease income reduced to 659.54 million as compared to 800.56 million for preceding year in spite of 19.43% increase in disbursement. This erosion in lease income by 17.62% can mainly be attributed to abnormal premature terminations, as well as re-pricing of existing lease, and the generation of additional business at market driven lower rates. To offset the unfavourable effect to the lease income, the management successfully implemented prudent measures to reduce the financial cost by 29.4% through repricing of the company's liabilities.

Through effective measures, the cost is reduced to Rs. 526.09 million as compared to Rs. 745.56 million in the preceding year. The net spread of lease and investment income over financial cost has improved and the company has managed to earn pre-tax profit for the year of Rs. 139.44 million as compared to Rs. 140.55 million for previous year.

FINANCIAL HIGHLIGHTS
Rs. In Million

30th JUNE, REPORTING MONTH

2000

2001

2002

2003

2004

EQUITY

Issued, Sub. & Paid up Capital

324

324

324

324

324

Reserve Retained Earning

315

379

431

528

450

Total Equity

639

703

755

852

774

LIABILITIES

Long Term Liabilities

4,690

5,328

5,354

5,583

4,602

Short Term Liabilities

1,892

1,775

2,318

1,823

2,605

Total Liabilities

7,221

7,806

8,427

7,406

7,207

ASSETS

Tangible Fix Assets

35

94

55

46

50

Net Investment in Lease Finance

3,361

3,885

4,322

4,294

4,300

Total Current Assets

3,812

3,813

3,992

3,867

3,584

Total Assets

7,221

7806

8,427

8,258

7,982

INCOME STATEMENT

Lease Income

767

989

929

800

659

Total income

993

1,172

1,195

1,056

832

Operating Expenses

67

96

130

112

141

Fmancial Expenses

795

938

951

745

526

Profit Before Taxation

100

77

21

141

139

Net Profit

91

64

21

117

109

SHARE PRICE

AS on 30th June

2003

2004

Per share Market Value

Rs. 18.05

Rs. 20.90