During the year under review, one would agree that Al-Zamin's performance has been rather impressive. It has been able to achieve fresh disbursements of lease contracts amounting to Rs 594 million during the financial year under review compared to the disbursement of Rs 299 million achieved in the previous year.
The year also witnessed Al-Zamin achieve significant land mark of crossing the figure of Rupee One Billion for its total assets and generating record level of business volume.
Net investment in leases increased from Rs 633 million to Rs 829 million indicating an increase of 31%.
During the year its total income and net profit substantially increased. Fresh credit lines totalling Rs 155 million were mobilised in order to finance increase in the business volume.
During the year its long term credit rating has been upgraded from BBB to BBB+ by JCR-VIS Credit Rating Company Limited.
The Musharaka based TFCs being issued by Al-Zamin has been rated as A-(Single A Minus).
Al-Zamin Leasing Modaraba has been formed in 1991 under the Modaraba Companies and Modaraba (Floatation and Control) Ordinance, 1980. It is managed by Al-Zamin Modaraba Management (Private) Limited.
The Modaraba is listed on Karachi, Lahore and Islamabad Stock Exchanges. During the last 52 weeks the 10-rupee certificate of the Modaraba appreciated to Rs 6.15 per certificate from Rs 2.30.
At present the certificate is trading at Rs 5.15 per certificate at 48.5% of the par value.
The legacy of the Modaraba sector is that the market value of the most of the Modaraba sector has remained quite low.
Out of forty two Modarabas only 7 Modarabas' certificates are trading above the par value.
The highest price is being quoted for Grindlays Modaraba Certificate at Rs 39.30 followed by Imrooz Modaraba at Rs 36 per certificate.
Al-Zamin Modaraba is a multipurpose Modaraba allowed to undertake various business transactions under Islamic Modes of Financing. Its main business is financing under leasing.
Its business includes leasing of industrial equipment, transport fleets, computer hardware and office equipment.
The Modaraba also provides financial advisory services on leasing, syndication for leasing of large projects, assistance in private placement of long and short term financing.
It also handles trading, equity market operations, project financing, management of stocks and share portfolios.
Total revenues of the Modaraba increased from Rs 142.78 million to Rs 154.91 million in the previous year registering 8.5% increase over the preceding year's figure.
Lease income works out to 86.43% of total revenue as against 91.30% in the preceding year.
The second significant profit centre has been income from Musharaka at Rs 13.42 million constituting 8.66% of the total revenue as against 5.60% in the preceding year.
During the year under review the enterprise has witnessed significant expansion/growth both internally and externally.
Externally, the expansion owes to the entrepreneur-ship of mainly its CEO Basheer A. Chowdry.
He seems to have started with the building of long term strategy to implement the statutory requirement of capital.
The pioneering expansions work has glimpses of his international outlook as he has been an international banker also.
He reasoned "In line with global trends, the financial market in Pakistan is going through a phase of consolidation and transformation by way of mergers and acquisitions.
The regulatory authorities are continuously encouraging amalgamations in order to achieve stronger and viable entities instead of fragmented units of smaller sizes."
The inner title page of the Modaraba's Eleventh Annual Report mentions that these are consolidated annual accounts of Al-Zamin Leasing Modaraba subsequent to the merger of First Professional Modaraba.
The merger of these two entities happened in FY 2002-03. He says the synergies obtained from the merger would result in greater effectiveness and efficiency thereby increasing the yields and future dividend distribution capacity of the merged entity.
Earlier in FY 2000-01, Ghandhara Leasing Co Ltd was merged with the company Al-Zamin has now achieved an equity base of Rs 319 million and crossed the one billion rupees threshold in total assets booking Rs 1.193 billion.
Its net profit improved to Rs 10.36 billion from Rs 5.46 million in the preceding year. This is a remarkable rise of 89% in Net Profit.
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Performance Statistics (Million Rupees)
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June 30 2003 2002
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Certificate Capital-Paid-up: 254.72 254.72
Reserves & Unappropriated Profit: 63.84 57.16
Certificate Holders' Equity: 318.56 311.88
Liabilities
Accrued & Other Liabilities: 38.65 36.66
Musharaka & Morabaha Finances: 595.07 402.34
Security Deposits On
Lease Contracts: 233.08 156.11
Certificates of Investment: 2.75 6.61
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Liabilities Against Assets
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Subject to Finance Lease: 0.54 0.94
Deferred Taxation: 3.90 1.00
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Assets
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Cash & Bank Balances: 42.14 54.29
Lease Rentals Receivable: 3.60 4.19
Net Investments in Lease Finance: 828.97 633.26
Musharaka Finances: 86.35 23.14
Investments: 97.95 91.05
Advances & Prepayments: 47.91 33.21
Other Receivable: 9.84 7.43
Security Deposits: 0.77 1.12
Fixed Assets Own: 17.07 17.94
Fixed Assets-Leased Out: 57.95 49.91
Total Assets: 1,192.55 915.54
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Revenue, Profit & Pay Out
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Revenue Lease Operations: 133.90 130.36
Musharaka Operations: 13.42 7.30
Return on PLS Deposit Accounts: 1.74 1.61
Other Income: 5.85 3.51
Gross Revenue: 154.91 142.78
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Expenditure
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Financial (Charges): (75.58) (69.75)
Operating (Expenses): (36.39) (39.90)
(Depreciation) on Assets
Leased Out: (22.01) (21.67)
Other (Charges & Provisions): (5.19) (5.49)
Total (Expenditure & Provisions): (139.17) 136.81
Modaraba Company's Management Fee: 1.57 (0.51)
Profit Before Taxation: 14.17 5.46
Profit After Taxation: 10.31 5.46
Dividend Nil
(2000: Rs 0.25/certificate): - 4.43
Earnings (Loss) Per
Certificate (Rs): 0.40 0.21
Modaraba Certificate
Price (Rs) Dated 12-1-2004: 5.15 -
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Financial Ratios
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Price/Earning Ratio: 12.87 -
Book Value Per Certificate (Rs): 12.50 12.24
Price Book Value Ratio: 0.41 -
Lease Income/Total Income (%): 86.43 91.30
Net Profit/Total Income (%): 6.65 4.19
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COMPANY INFORMATION: Modaraba Company: Al-Zamin Modaraba Management (Private) Limited; Chairman: Zafar Iqbal; Vice Chairman: S.M. Farooq, Chief Executive: Basheer A. Chowdry; Director: M. Kamal Abdul Nassir; Company Secretary: Ms. Hameeda Aqeel; Chief Financial Officer: M. Naim Ashraf; Registered Office: 104-106, Kassam Court BC-9-Block-5 Clifton Karachi 75600; Other Offices: Chanab Plaza Blue Area Islamabad, Rehman Business Centre Gulberg III Lahore; Faisal Complex, Bilal Road Faisalabad.
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