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| ASKARI
COMMERCIAL BANK LIMITED |
|
| Annual
Report 1996 |
|
| A
Security Bank - A Name to Trust |
|
|
| Contents |
|
| Corporate
Information |
|
|
|
1 |
|
| A
Glimpse of first five years of Operations |
2-3 |
|
| Directors'
Report |
|
5-11 |
|
| Auditors'
Report |
|
13 |
|
| Balance
Sheet |
|
14-21 |
|
| Profit
& Loss Account |
|
22-23 |
|
| Notes
to the Accounts |
|
24-27 |
|
| Pattern
of Shareholding |
|
28 |
|
| Foreign
Correspondents |
|
29-33 |
|
| Notice
of Annual General Meeting |
|
36-37 |
|
| Branch
Network |
|
|
| Corporate
Information |
|
|
| BOARD
OF DIRECTORS |
|
| Lt.
Gen. Zia Ullah Khan |
|
Chairman |
|
| Lt.
Gen. (R) Farrakh Khan |
|
|
| Mr.
Shameera Ahmed |
|
President & Chief
Executive |
|
| Brig.
(R) Khalid Latif |
|
| Brig.
(R) Zafar Ahmed |
|
| Brig.
(R) Khalid Raza |
|
| Brig.
(R) Sultan Mahmud |
|
| Dr.
Safdar Ali Butt |
|
|
| Mr.
Zafar Alam Khan Sumbal |
Secretary |
|
| Mr.
Shahid Hafeez Azmi |
|
| Mr.
Sultan Ahmed Abbasi |
|
| Mr.
Razi-ur-Rahman Khan (NIT Nominee) |
|
|
| AUDITORS |
|
| Taseer
Hadi Khalid & Co. |
|
| Chartered
Accountants |
|
|
|
| LEGAL
ADVISORS |
|
| Afridi
Angell & Khan |
|
|
| REGISTRAR
& SHARE TRANSFER OFFICE |
|
| Askari
Associates (Pvt.) Limited, |
|
| 6th
Floor, AWT Plaza, The Mall, |
|
| P.O.
Box 678, Rawalpindi. |
|
| Tel:
(051) 514370-71, 516108 |
|
| Fax:
(051) 516109 |
|
|
| REGISTERED
OFFICE/HEAl) OFFICE |
|
| AWT
Plaza, The Mall, |
|
| P.O.
Box No. 1084, |
|
| Rawalpindi-Pakistan. |
|
| Tel:
(051) 518117-20 |
|
| Fax:
(051) 563704 |
|
|
| Directors'
Report |
|
| It
is a pleasure for us to share with |
|
| you
the performance of Askari |
|
| Commercial
Bank Limited (ACBL) |
|
| for
the year ended December 31, |
|
| 1996,
a year which marks the |
|
| successful
completion of fifth year |
|
| of
its operations. |
|
|
| Despite
turbulent political condi |
|
| tions
and under performance of the |
|
| economy
during the year under |
|
| review,
Askari Commercial Bank |
|
| Limited
continued to scale new |
|
| heights
in all areas of its operations. |
|
| The
safety and security of deposi- |
|
| tors'
funds, customer service |
|
| excellence,
high productivity, and |
|
| optimum
use of technology are the |
|
| hallmarks
of our corporate strength. |
|
| We
have continued to strive hard to |
|
| maintain
our unique position in the |
|
| financial
market. Domestic and |
|
| international
financial institutions |
|
| and
prestigious national and |
|
| international
publications continued |
|
| to
recognize our strong position. |
|
|
| During
the year under review, |
|
| Askari
Commercial Bank Limited |
|
| received
A1+ rating for the short |
|
| term
which is the highest in the |
|
| category
and A+ for the long term, |
|
| from
the Pakistan Credit Rating |
|
| Agency
(Pvt.) Ltd. (PACRA), an |
|
| affiliate
of IBCA Ltd. UK. ACBL is |
|
| the
first Pakistani Bank in the private |
|
| sector
to voluntarily obtain a rating |
|
| from
PACRA. |
|
|
| The
Bank earned a Pre tax Profit of |
|
| Rs.
582 million, higher by 29 percent |
|
| over
the last year's profit of Rs. 450 |
|
| million.
The shareholders' equity |
|
| increased
from Rs. 893 million in |
|
| 1995
to Rs. 1,581 million in 1996, |
|
| which
shows a rise of over 77 |
|
| percent.
The enhanced capital base |
|
| improved
the Capital Adequacy |
|
| Ratio
thus placing the Bank in a |
|
| comfortable
position to expand its |
|
| balance
sheet. |
|
|
| The
balance sheet footing of |
|
| the
Bank attained the level of |
|
| Rs.
30.7 billion, a rise of 35 |
|
| percent
over 1995. The Assets |
|
| grew
by 40 percent over |
|
| previous
year and stood at Rs. |
|
| 17.9
billion at the end of 1996. |
|
| The
stimulus to the asset base |
|
| was
provided by customer |
|
| deposits
which went up by 43 |
|
| percent from Rs. 9.9 billion in |
|
| 1995
to Rs. 14.1 billion this year. |
|
|
| These
figures reflect the confi- |
|
| dence
reposed by our customers. |
|
|
| We
are strengthening the |
|
| resource
base through intensive |
|
| marketing
and resource mobiliza- |
|
| tion
campaigns which are |
|
| Proving
very successful and the |
|
| Bank
is recording impressive |
|
| growth.
The market impulse |
|
| regarding
our product line and |
|
| service
standard is received by |
|
| the
Management on a continu- |
|
| 0us
basis. Our products like |
|
| "Askari
Special Deposit |
|
| Account"
(ASDA) and "Askari |
|
| Advantage"
are quite popular |
|
| amongst
Business circles and |
|
| offer
competitive rates. In line |
|
| with
the policy of the State Bank |
|
| of
Pakistan, we increased the |
|
| rates
on all categories of PLS |
|
| Deposits
during the year 1996 to |
|
| give
better return to the Deposi- |
|
| tors. |
|
|
| Despite
difficult economic |
|
| conditions
and under perfor- |
|
| mance
in the export sector, the |
|
| Bank
transacted exports and |
|
| imports
business to the tune of |
|
| Rs.
19.3 billion as against last |
|
| year's
business of Rs. 17.9 billion |
|
| and
secured Guarantee business |
|
| of
more than Rs. 4.7 billion in the |
|
| year
1996 as against Rs. 2.8 |
|
| billion
in 1995. |
|
|
| Askari
Commercial 'Bank Ltd. is |
|
| one
of the first local private |
|
| banks
to offer innovative |
|
| products
and services to its |
|
| customers
like 24 hours Auto- |
|
| mated
Teller Machines (ATMs), |
|
| Telephone
Banking etc. Elec- |
|
| tronic
cash dispensing facilities |
|
| are
now available at major |
|
| centers
like Karachi, Lahore and |
|
| Rawalpindi.
All these ATMs and |
|
| branches
in the major urban |
|
| centers
are limited through |
|
| state-of-the-art
satellite based |
|
| communication
system offering |
|
| real
time 24 hours service. In |
|
| 1997,
we plan to install more |
|
| ATMs
and extend this on4ine |
|
| facility
to other operating centers |
|
| of
the Bank. |
|
|
| The
Bank is already offering |
|
| credit
cards like VISA Interna- |
|
| tional
and MasterCard Interna- |
|
| tional
in collaboration with an |
|
| international
financial services |
|
| organization.
In order to enable |
|
| us
to render more personalized |
|
| services,
we have finalized |
|
| arrangements
to offer VISA |
|
| International
and MasterCard |
|
| International
directly to our |
|
| customers. |
|
|
| The
focus of the Bank's |
|
| commercial
lending activities |
|
| continues
to be short term, trade |
|
| related
financing on a secured |
|
| and
self-liquidating basis |
|
| whereby
a major portion of the |
|
| advances
portfolio has a maturity |
|
| of
less than one year. The Bank |
|
| also
continues its emphasis on |
|
| diversification
of its assets to |
|
| avert
large single industry or |
|
| group
exposure. The advances |
|
| portfolio
of the Bank is ad- |
|
| equately
secured. |
|
|
| Askari
Commercial Bank Limited |
|
| is
the only private sector bank |
|
| that
has been approved by the |
|
| World
Bank as a Participating |
|
| Financial
Institution for the USS |
|
| 200
million line of credit sanc- |
|
| tioned
to the Government of |
|
| Pakistan
for the Financial Sector |
|
| Deepening
and Intermediation |
|
| Project.
Negotiations are also |
|
| underway
for a credit line from |
|
| International
Finance Corporation |
|
| (IFC). |
|
|
| A
financial institution has to give |
|
| due
emphasis to its network |
|
| expansion
because with the passage |
|
| of
time the graph of growth through |
|
| existing
network attains the point of |
|
| saturation
We are very particular |
|
| here
and open branches at appropri- |
|
| ate
time and in the areas where we |
|
| find
it profitable and feasible. |
|
| During
1996, Askari Commercial |
|
| Bank
Limited added 5 new branches |
|
| to
its network taking the total |
|
| number
of branches to 23. We plan |
|
| to
further expand our branch |
|
| network
in 1997. |
|
|
| In
1996, the process of expanding |
|
| ACBL's
network of international |
|
| correspondents
continued on the |
|
| global
basis with the aim of |
|
| providing
efficient foreign trade |
|
| and
exchange related services to |
|
| our
clients. To this effect, new |
|
| relationships
with some 44 |
|
| reputed
banks were established, |
|
| taking
the. total number of |
|
| correspondents
to 159. |
|
|
| Human
resource development |
|
| and
management is a high |
|
| priority
in the Askari. We are |
|
| manning
the Bank with the |
|
| talented
professionals. As a part |
|
| of
its commitment to the devel- |
|
| opment
of human resources, |
|
| your
Bank has instituted its own |
|
| training
facility under the |
|
| management
of a senior banker |
|
| having
vast experience in the |
|
| area
of training and develop- |
|
| ment.
The training arm of the |
|
| Bank
organized a range of |
|
| training
courses and seminars in |
|
| the
areas of general banking, |
|
| foreign
trade, credit analysis & |
|
| management,
treasury manage- |
|
| ment
and management informa- |
|
| tion
system. The executives and |
|
| officers
of the Bank were also |
|
| nominated
to programs offered |
|
| by
other agencies within Pakistan |
|
| and
abroad. |
|
|
| We
take this opportunity to thank |
|
| our
valued customers for their |
|
| continuous
trust and confidence |
|
| in
our Bank. We also express our |
|
| gratitude
to the State Bank of |
|
| Pakistan
for their support and |
|
| guidance.
We would also like to |
|
| congratulate
all staff members for |
|
| the
professionalism, dedication |
|
| and
commitment they have |
|
| shown
in achieving our goals. |
|
|
| Given
the prudent banking |
|
| policies,
enhanced focus on |
|
| automation,
improved capital |
|
| adequacy
ratio, expanded branch |
|
| network
and solid resource base |
|
| of
the Bank, We are sanguine |
|
| about
our future prospects. |
|
|
| On
behalf of the Board |
|
|
| Lt.
Gen.. Zia Ullah Khan |
|
| Chairman |
|
|
| Rawalpindi |
|
| February
13, 1997 |
|
|
| Auditors'
Report to the Members |
|
|
| We
have audited the annexed |
|
| balance
sheet of Askari |
|
| Commercial
Bank Limited ("the |
|
| Bank")
as at December 31,1996 |
|
| and
the related profit and loss |
|
| account,
together with the notes |
|
| forming
part thereof for the year |
|
| then
ended, in which are |
|
| incorporated
the unaudited |
|
| certified
returns from the |
|
| branches
except for six branches |
|
| which
have been audited by us |
|
| and
we state that we have |
|
| obtained
all the information and |
|
| explanations
which to the best of |
|
| our
knowledge and belief were |
|
| necessary
for the purposes of our |
|
| audit
and, after due verification |
|
| thereof,
found them satisfactory |
|
| and,
we report that: |
|
|
| a)
in our Opinion proper books |
|
| of
account have been kept |
|
| by
the Bank as required by |
|
| the
Companies Ordinance, |
|
| 1984
and the returns referred |
|
| to
above received from the |
|
| branches
have been found |
|
| adequate
for the purposes of |
|
| our
audit; |
|
|
| b)in
our opinion: |
|
|
| i.
the balance sheet and |
|
| profit
and loss account |
|
| together
with the notes |
|
| thereon
have been |
|
| drawn
up in conformity |
|
| with
the Banking |
|
| Companies
Ordinance, |
|
| 1962
and the Companies |
|
| Ordinance,
1984, and |
|
| are
in agreement with |
|
| the
books of account |
|
| and
are further in |
|
| accordance
with |
|
| accounting
policies |
|
| consistently
applied; |
|
|
| ii.
the expenditure |
|
| incurred
during the year |
|
| was
for the purposes of |
|
| the
Bank's business; and |
|
|
| iii.
the business conducted, |
|
| investments
made and |
|
| the
expenditure |
|
| incurred
during the year |
|
| were
in accordance with |
|
| the
objects of the Bank |
|
| and
the transactions of |
|
| the
Bank which have |
|
| come
to our notice have |
|
| been
within the powers |
|
| of
the Bank; |
|
|
| c)
in our opinion and to the |
|
| best
of our information and |
|
| according
to the |
|
| explanations
given to us, the |
|
| balance
sheet and the profit |
|
| anti
loss account together |
|
| with
the notes forming part |
|
| thereof
give the information |
|
| required
by the Banking |
|
| Companies
Ordinance, 1962 |
|
| and
the Companies |
|
| Ordinance,
1984, in the |
|
| manner
so required and give |
|
| a
true and fair view of the |
|
| state
of the Bank's affairs as |
|
| at
December 31,1996 and its |
|
| true
balance of the profit for |
|
| the
year then ended; and |
|
|
| d)
in our opinion Zakat |
|
| deductible
at source under |
|
| the
Zakat and Ushr |
|
| Ordinance,
I980 was |
|
| deducted
by the Bank and |
|
| deposited
in the Central |
|
| Zakat
Fund established |
|
| under
section 7 of that |
|
| Ordinance. |
|
|
| Taseer
Hadi Khalid & Co. |
|
| Chartered
Accountants |
|
|
| Islamabad |
|
| February
13, 1997 |
|
|
| Balance
Sheet |
|
| as
at December 31, 1996 |
|
1996 |
1995 |
|
|
Rupees |
Rupees |
|
| CAPITAL
AND LIABILITIES |
|
|
|
| AUTHORIZED
CAPITAL |
|
| 90,000,000
Ordinary Shares of Rs. 10/- each |
|
900,000,000 |
900,000,000 |
|
|
============== |
============== |
|
| Issued,
SUBSCRIBED & |
|
| PAID-UP
CAPITAL |
|
| 67,500,000
(1995: 45,000,000) Ordinary Shares |
|
| of
Rs. 10/- each issued for cash |
|
675,000,000 |
450,000,000 |
|
|
|
|
| 14,175,000
(1995: 6,750,000) Ordinary Shares |
|
| of
Rs. 10/- each issued as frilly paid |
|
| Bonus
Shares |
|
141,750,000 |
67,500,000 |
|
|
-------------- |
-------------- |
|
|
816,750,000 |
517,500,000 |
|
|
|
|
| RESERVE
FUND & OTHER RESERVES |
|
(Note 4) |
|
763,250,000 |
374,000,000 |
|
|
|
|
|
| DEPOSITS
& OTHER Accounts |
|
| Fixed
Deposits |
|
5,635,119,679 |
4,227,161,861 |
|
| Saving
Deposits |
|
7,118,538,795 |
4,486,848,099 |
|
| Current
Accounts, Contingency Accounts, etc. |
|
1,372,671,778 |
1,136,827,034 |
|
|
-------------- |
-------------- |
|
|
14,126,330,252 |
9,850,836,994 |
|
| RIGHT
SHARES SUBSCRIPTION ACCOUNT |
|
-- |
50,264,260 |
|
| BORROWING
FROM OTHER BANKING |
|
| COMPANIES,
AGENTS, ETC. |
|
| i)
In Pakistan |
|
1,529,304,000 |
1,455,661,000 |
|
| ii)
Outside Pakistan |
|
34,610 |
43,532,417 |
|
|
-------------- |
-------------- |
|
|
1,529,338,610 |
1,499,193,417 |
|
| PARTICULARS
OF ABOVE: |
|
| i)
Secured |
|
| Refinance
facilities for exports |
|
| from
State Bank of Pakistan |
|
1,529,304,000 |
1,455,661,000 |
|
| ii)
Unsecured |
|
34,610 |
43,532,417 |
|
|
-------------- |
-------------- |
|
|
1,529,338,610 |
1,499,193,417 |
|
|
| Carried
Forward |
|
17,235,668,862 |
12,291,794,671 |
|
|
| PROPERTY
AND ASSETS |
|
| CASH |
|
| In
hand and with State Bank of Pakistan and |
|
| National
Bank of Pakistan (including foreign |
|
| currency
notes) |
|
1,225,894,203 |
930,110,612 |
|
|
| BALANCES
WITH OTHER BANKS |
|
| On
Current Accounts: |
|
| i)
In Pakistan |
|
6,006,490 |
25,447,847 |
|
| ii)
Outside Pakistan |
|
148,577,387 |
115,192,310 |
|
|
| On
Deposit Accounts: |
|
| i)
In Pakistan |
|
(Note 7) |
|
1,529,304,000 |
1,571,815,000 |
|
| ii)
Outside Pakistan |
|
-- |
|
|
-------------- |
-------------- |
|
|
1,683,887,877 |
1,712,455,157 |
|
| MONEY
AT CALL & SHORT NOTICE |
|
410,000,000 |
30,000.00 |
|
|
| INVESTMENTS |
|
| i)
Securities of the Central & Provincial |
|
| Governments
& other Trustee Securities |
|
| including
Treasury Bills of Federal & |
|
| Provincial
Governments |
|
6,038,485,158 |
2,360,950,85 |
|
| ii)
Fully paid-up Ordinary Shares |
|
88,733,60 |
61,996,123 |
|
| iii)
Term Finance Certificates |
|
53,090,485 |
50,000,000 |
|
| ix)
Other investments |
|
-- |
-- |
|
|
| (market
value of quoted investments & |
|
| book
value of other investments |
|
| Rs.
6,186 639,480 (1995: Rs. 2,460,991,973) |
|
|
-------------- |
-------------- |
|
|
6,180,308,903 |
2,472,946,981 |
|
|
|
-------------- |
-------------- |
|
| Carried
Forward |
|
9,500,090,983 |
5,145,512,750 |
|
|
|
1996 |
1995 |
|
|
Rupees |
Rupees |
|
| CAPITAL
AND LIABILITIES |
|
| brought
forward |
|
17,235,668,862 |
12,291,794,671 |
|
|
| LIABILITIES
AGAINST ASSETS |
|
| SUBJECT
TO FINANCE LEASE |
|
(Note 5) |
|
40,560,770 |
13,936,882 |
|
| BILLS
PAYABLE |
|
108,537,433 |
100,641,767 |
|
| BILLS
FOR COLLECTION BEING |
|
| BILLS
RECEIVABLE AS t)ER CONTRA |
|
| i)
Payable in Pakistan |
|
49,052,317 |
27,399,577 |
|
| ii)
Payable outside Pakistan |
|
2,385,053,151 |
1,464,515,666 |
|
|
-------------- |
-------------- |
|
|
2,434,105,468 |
1,491,915,243 |
|
| OTHER
LIABILITIES |
|
(Note 6) |
|
519,978,129 |
419,665,361 |
|
|
|
| ACCEPTANCES,
ENDORSEMENTS |
|
| &
OTHER OBLIGATIONS |
|
| AS
PER CONTRA |
|
10,320,942,564 |
8,469,915,467 |
|
|
|
-------------- |
-------------- |
|
| Carried
Forward |
|
30,659,793,226 |
22,787,869,391 |
|
|
|
1996 |
1995 |
|
|
Rupees |
Rupees |
|
| PROPERTY
AND ASSETS |
|
| brought
forward |
|
9,500,090,983 |
5,145,512,750 |
|
|
| ADVANCES |
|
| (Other
than bad & doubtful debts for which |
