Leasing Companies: SECURITY LEASING CORPORATION LIMITED - Nine Months Ending March 31 2005

SLCL is a public limited company and was incorporated in the province of Sindh on December 6, 1963 and started its operations on May 21, 1995. As regards ownership structure, Security Leasing Corporation Ltd's major shareholders are Merrill Lynch, Pierce Fenner and Smith Inc USA which has 42.5% stake in its equity. Its remaining shareholding is held by its directors and public investors.
SLCL enjoys an excellent reputation in the financial and leasing sector due to the high professional standing of its sponsors directors and management.
The company is listed on Karachi Stock Exchange (Guarantee) Ltd and at present its share is trading at Rs 17.65 per share carrying 76.5% premium over the par value. Within a year the market value of its share shot up by 80% to Rs 22.50 from Rs 12.50 per share.
The capital structure of the company comprises 28.20 million paid up shares out of which are 13.2 million ordinary shares of Rs 10 each and remaining are 15 million shares redeemable preference shares (class A) of Rs 10 each. These preference shares carry participatory rights are held by the financial and investment companies and carry dividend upto 9.1%.
Its core business is leasing assets to both individuals and institutions. Medium to large ticket-leases of the company has been considered as corporate leases. These basically comprise plant and machinery, equipment commercial vehicles, large scale medical equipment's. These leases are normally required for expansion and BMR programmes (Balancing Modernisation and Replacement) and to some extent for project financing.
Its other business segment is operating lease. An operating lease is typically shorter than capital lease which is a rental arrangement whereby lessee can acquire the use of equipment for a fraction of its useful life with SLCL retaining the risks of ownership at the end of the lease term. Unlike traditional leases a lessee can either renew the lease or return the asset to SLCL at the end of the lease without any residual obligation.
The other business segment is the automobile lease in SLCL this lease is called "Apnicar Lease" and the lease is flexible or tailored to clients needs/pockets in terms of tenure and down payment. The beauty of this scheme is that it has interactive website www.seclease.com for explaining various options.
The company continued to scale new heights in growth. Total assets of the company increased Rs 3.381 billion on 31st March 2005 from Rs 2.294 billion on 30th June 2004 showing increase amounting to Rs 1.089 billion which is an impressive growth performance. The net investment in leases increased to Rs 21.38 billion from Rs 1.542 billion. The revenue amounted to Rs 214.35 million (9M 2003-04 Rs 155.61 million) registering 37.7% increase. The profit after tax was Rs 71.8 million compared to Rs 36.06 million posted in the corresponding nine months of the last financial year. The directors have recommended the issue of 25% bonus shares which would be in addition to the 10% bonus issue in the quarter ended September 30, 2004 and 20% bonus.

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Performance Statistics                (Million Rupees)

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Balance sheet                                  -As At-

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                                 March 31      June 30

                                     2005         2004

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Share Capital-Paid-up:             282.00       250.00

Reserves & Profit:                 153.46        86.18

Shareholders Equity:               435.46       336.18

L.T. Debts:                        832.19       602.06

Privately Placed L.T. TFCs:        225.00       300.00

L.T. Deposits:                     397.20       299.13

Deferred Liability:                  6.52         5.04

Current Liabilities:             1,485.55       751.85

Fixed Assets-Tangible:             117.62        69.24

Net Investments in Leases:       1,323.50       972.46

Deferred Costs:                      4.75         5.83

L T Deposits:                        1.04         1.03

L T Finance:                        20.00            -

L T Investments:                   292.96       229.55

Current Assets:                  1,622.05     1,016.15

Total Assets:                    3,381.92     2,294.26

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Profit & Loss A/c for Nine Months Ended

 March 31                            2005         2004

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Revenues From

Leasing Operations:                112.49        93.07

Other Income:                      101.86        62.54

Gross Income:                      214.35       155.61

Total Expenses & Provisions:     (134.60)     (117.76)

Profit Before Taxation:             79.75        37.85

Profit After Taxation:              71.85        36.06

Earnings Per Share (Rs):             6.22         2.76

Share Price (Rs) on 01-06-2005:     17.65            -

Price/Earning Ratio:                 2.84            -

Book Value Per Share (Rs):          15.44        13.44

Debt/Equity Ratio:                  66:34        64:36

Current Ratio:                       1.09         1.35

Lease Income/Total Income (%):      52.48        59.80

Net Profit/Total Income (%):        33.51        23.17

R.O.E. (%):                         16.50        10.73

R.O.A. (%):                          2.12         1.57

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