| Bank Al Habib Limited |
|
|
|
|
|
|
|
|
| Annual
Report 2000 |
|
|
|
| Contents |
|
|
| Board
of Directors |
|
| A
Tribute to (Late) Hamid D. Habib |
|
| Directors'
Report |
|
| Auditors'
Report |
|
| Balance
Sheet |
|
| Profit
and Loss Account |
|
| Cash
Flow Statement |
|
| Notes
to the Accounts |
|
| Notice
of Annual General Meeting |
|
| Pattern
of Shareholding |
|
| Branch
Network |
|
|
| Board
of Directors |
|
|
|
| Chairman |
|
| Ali
Raza D. Habib |
|
|
| Chief
Executive & Managing Director |
|
| Abbas
D. Habib |
|
|
| Directors |
|
| Faiz
N. Abdulali |
|
| Qumail
R. Habib* |
|
| Anwar
Haji Karim |
|
| Istaqbal
Mehdi |
|
| Murtaza
H. Habib |
|
| Syed
Mazhar Abbas* |
|
| Hasnain
A. Habib |
|
| Salman
H. Habib |
|
|
| *Denotes
Executive Director |
|
|
| Company
Secretary |
|
| Mahmood
S. Allarakhia |
|
|
|
| A
Tribute to (Late) Hamid D. Habib |
|
|
| The
Board of Directors, Management and Staff of Bank AL Habib Limited wish to
place on record their |
|
| profound
grief and deep sorrow on the sad demise of (Late) Hamid D. Habib, Founder
Chairman |
|
| of
the Bank, after a brief period of illness in Karachi on May 25, 2000. They
also wish to express the |
|
| invaluable
contributions made by him towards the growth, development and progress of the |
|
| Bank
since its inception. He was a source of inspiration for this institution and
will always |
|
| be
remembered as a warm and humble person. |
|
|
| He
was always held in high esteem for his strong moral and ethical values and
his presence was |
|
| always
felt wherever he went due to his charismatic and dynamic personality. He
believed in achieving |
|
| excellence
and remained successful in whatever he did through sheer perseverance and
zeal. |
|
|
| His
selfless devotion towards social and philanthropic causes was immense. He
always took |
|
| personal
interest in the welfare of orphans, widows and the poor and remained
instrumental in |
|
| the
development of orphanages, schools, hospitals and charitable trusts. On the
other side, he |
|
| was
also a keen sportsman, particularly golf, which he played till his last days. |
|
|
| May
Allah rest his soul in eternal peace. 'AAMEEN' |
|
|
|
| Directors'
Report |
|
|
| The
Board of Directors is pleased to present you the Tenth Annual Report for the
year ended December 31, |
|
| 2000. |
|
|
| AI-Hamdolillah,
the performance of the Bank during the year has been satisfactory. The
operating results for |
|
| the
year and appropriations are as follows: |
|
|
|
(Rupees in '000) |
|
| Profit
for the year before tax |
|
403,178 |
|
| Taxation |
|
(250,000) |
|
|
------------ |
|
| Profit
for the year after tax |
|
153,178 |
|
| Unappropriated
Profit brought forward |
|
2,891 |
|
|
------------ |
|
| Profit
available for Appropriation |
|
156,069 |
|
| Appropriations: |
|
| Transfer
to Statutory Reserve |
|
31,000 |
|
| Proposed
- Fully paid Bonus Shares |
|
| in
the ratio of 20 Ordinary |
|
| Shares
for every 100 shares |
|
| held |
|
120,226 |
|
|
------------ |
|
|
(151,226) |
|
|
------------ |
|
| Unappropriated
Profit carried forward |
|
4,843 |
|
|
========== |
|
| Earnings
per share (pre-tax) |
|
Rs. 6.71 |
|
|
|
| Performance
Review |
|
| By
the Grace of Allah, in the year 2000, the Bank has continued to make
satisfactory progress in all areas of |
|
| its
operations. With the continued support of the customers, deposits have
increased by Rs. 3.709 billion. The |
|
| Bank's
advances increased by Rs. 3.796 billion and foreign trade business registered
an overall growth of |
|
| Rs.
12.088 billion, as compared to the corresponding year. In spite of the low
interest margins during the first |
|
| half
of the year, the Bank's profitability has increased mainly due to increase in
yields on Treasury Bills that |
|
| consequently
led to an increase in lending rates in the last quarter. |
|
|
| The
financial highlights are as under: |
|
|
(Rupees in
million) |
|
|
Dec. 31, 2000 |
Dec. 31, 1999 |
|
| Total
Customers' Deposits |
|
17,822.60 |
14,112.90 |
|
| Total
Advances |
|
14,722.10 |
10,925.30 |
|
| Shareholders'
Equity |
|
1,322.20 |
1,169.00 |
|
| Foreign
Trade Business |
|
38,613.80 |
26,525.50 |
|
|
| In
order to provide additional services to customers, the Bank entered into an
agreement with a local |
|
| commercial
bank to sell their Rupee Travellers' Cheques at all branches. Further, Sui
gas bills of account |
|
| holders
can now be paid at all our Karachi branches, a facility which shall
Insha-Allah be extended to all |
|
| branches.
The Bank obtained membership of SWIFT (Society for World-wide Inter-bank
Financial Telecom- |
|
| munication)
to expeditiously facilitate settlement of cross border transactions
pertaining to international |
|
| trade
and foreign exchange business. |
|
|
| The
Bank's outlook for the year 2001 is optimistic in view of the steps taken by
the Government to revive the |
|
| economy
and we are hopeful that the Bank shall Insha-Allah continue to maintain its
progress. The Bank has |
|
| embarked
on a programme of automation to link all the branches of the Bank throughout
the Country via |
|
| satellite
communication network to further improve operational efficiency and customer
services. |
|
|
| Branch
Network |
|
| The
Bank opened branches at Jodia Bazar, Karachi and Rahim Yar Khan during the
year, bringing the total |
|
| number
of branches to 32. Insha-Allah, in 2001, we plan to continue the expansion of
our branch network. |
|
|
| Directors |
|
| After
the sad demise of the Founder Chairman of our Bank, Mr. Hamid D. Habib, the
Board appointed the |
|
| undersigned
as Chairman of the Bank and to fill up the casual vacancy, Mr. Salman H.
Habib was co-opted |
|
| as Director. |
|
|
| During
the year, Mr. Liaquat H. Merchant, resigned as a Director of the Bank owing
to personal commitments. |
|
| The
Board acknowledges his invaluable contributions and dedicated support during
his tenure as Director |
|
| with
the Bank. To fill up the casual vacancy, Mr. Syed Mazhar Abbas, a banker by
profession was appointed |
|
| as Director. |
|
|
| Pattern
of Shareholding |
|
| The
statement of pattern of shareholding of the Bank as at December 31,2000. |
|
|
| Auditors |
|
| Our
present auditors, Messrs Hyder Bhimji & Company, Chartered Accountants,
retire and being eligible, |
|
| offer
themselves for reappointment. |
|
|
| General |
|
| We
are grateful to our customers for their support, to the State Bank of
Pakistan for their continued guidance |
|
| and
to our foreign and local correspondent banks for their valuable services. We
also thank all our staff |
|
| members
for their sincere and dedicated services, which enabled the Bank to achieve
these results. |
|
|
|
On Behalf of the Board of Directors |
|
|
|
ALI RAZA D. HABIB |
|
| Karachi:
February 26, 2001. |
|
Chairman |
|
|
|
| Auditors'
Report to the Members |
|
|
| We
have audited the annexed Balance Sheet of Bank AL Habib Limited as at
December 31,2000, and the |
|
| related
Profit and Loss Account and Statement of Changes in Financial Position (Cash
Flow Statement) |
|
| together
with the notes forming part thereof for the year then ended, in which are
incorporated the unaudited |
|
| certified
returns from all the branches except for eleven 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 Bank AL Habib
Limited 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 and Statement of Changes in
Financial Position |
|
| (Cash
Flow Statement) 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 purpose of the Bank's business; and |
|
|
| iii)
the business conducted, investments made and 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 and Loss Account and Statement of Changes in Financial
Position (Cash |
|
| Flow
Statement) 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, 2000, 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, 1980, was deducted |
|
| and
deposited in the Central Zakat Fund established under Section 7 of that
Ordinance. |
|
|
| Karachi:
February 26, 2001. |
|
HYDER BHIMJI & CO. |
|
|
Chartered Accountants |
|
|
|
| Balance
Sheet as at December 31, 2000 |
|
|
|
2000 |
1999 |
|
|
Note |
(Rupees in
'000) |
|
|
| ASSETS |
|
| Cash |
|
4 |
1,437,760 |
1,839,504 |
|
| Balances
with Other Banks |
|
5 |
1,785,533 |
1,590,050 |
|
| Money
at Call and Short Notice |
|
|
1,490,000 |
180,000 |
|
| Investments |
|
6 |
3,783,664 |
4,600,990 |
|
| Advances
- (net of provision) |
|
7 |
14,722,099 |
10,925,299 |
|
| Operating
Fixed Assets. |
|
8 |
255,615 |
241,841 |
|
| Capital
Work-in-Progress |
|
9 |
35,189 |
20,869 |
|
| Other
Assets |
|
10 |
627,834 |
471,634 |
|
|
------------ |
------------ |
|
|
24,137,694 |
19,870,187 |
|
| LIABILITIES |
|
| Deposits
and Other Accounts |
|
11 |
17,822,654 |
14,112,870 |
|
| Borrowings
From Other Banks, Agents etc. |
|
12 |
4,327,974 |
4,035,320 |
|
| Bills Payable |
|
|
121,078 |
146,985 |
|
| Other
Liabilities |
|
13 |
555,674 |
405,993 |
|
|
------------ |
------------ |
|
|
22,827,380 |
18,701,168 |
|
|
------------ |
------------ |
|
| Net Assets |
|
1,310,314 |
1,169,019 |
|
|
========== |
========== |
|
| REPRESENTED
BY: |
|
| Share Capital |
|
14 |
601,128 |
500,940 |
|
| Reserve
for proposed issue of Bonus Shares |
|
|
120,226 |
100,188 |
|
| Reserve
Fund and Other Reserves |
|
15 |
596,000 |
565,000 |
|
| Unappropriated
Profit |
|
4,843 |
2,891 |
|
|
------------ |
------------ |
|
| Shareholders'
Equity |
|
1,322,197 |
1,169,019 |
|
| Deficit
on Revaluation of Securities |
|
(11,883) |
-- |
|
|
------------ |
------------ |
|
|
1,310,314 |
1,169,019 |
|
| MEMORANDUM
ITEMS: |
|
| Bills
for Collection |
|
16 |
3,185,123 |
2,619,786 |
|
| Acceptances,
Endorsements and Other |
|
| Obligations |
|
3,936,717 |
2,064,833 |
|
| Contingent
Liabilities and Commitments |
|
17 |
-- |
-- |
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
Ali RAZA D. HABIB |
|
ABBAS D. HABIB |
|
ANWAR HAJI KARIM |
|
FAIZ N. ABDULALI |
|
|
Chairman |
|
Chief Executive and |
|
Director |
|
Director |
|
| Karachi:
February 26, 2001. |
|
Managing Director |
|
|
|
|
| Profit
and Loss Account for the year ended December 31, 2000 |
|
|
|
2000 |
1999 |
|
|
Note |
(Rupees in
'000) |
|
| Mark-up
/ Interest and Discount and / or Return Earned |
|
1,961,055 |
1,878,610 |
|
| Less:
Cost/Return on Deposits, Borrowings etc. |
|
(1,493,632) |
(1,443,206) |
|
|
------------ |
------------ |
|
|
467,423 |
435,404 |
|
| Fees,
Commissions and Brokerage |
|
115,908 |
82,270 |
|
| Profit
from Investment Securities |
|
14,185 |
10,496 |
|
| Dividend
Income |
|
7,778 |
1,854 |
|
| Other
Operating Income |
|
18 |
229,169 |
160,498 |
|
|
|
------------ |
------------ |
|
|
|
367,040 |
255,118 |
|
|
|
------------ |
------------ |
|
| Operating
Expenses: |
|
|
834,463 |
690,522 |
|
| Administrative
Expenses |
|
19 |
402,498 |
333,088 |
|
| Provisions
against Non-Performing Advances |
7.2 |
29,741 |
4,423 |
|
| Provision
for Diminution in Value of Investments |
6 |
-- |
(16,974) |
|
|
|
------------ |
------------ |
|
|
|
(432,239) |
(320,537) |
|
|
|
------------ |
------------ |
|
|
|
402,224 |
369,985 |
|
| Other
Income |
|
20 |
954 |
2,743 |
|
|
|
------------ |
------------ |
|
| Profit
before Taxation |
|
|
403,178 |
372,728 |
|
| Taxation
- Current |
|
21 |
(250,000) |
(220,000) |
|
|
|
------------ |
------------ |
|
| Profit
after Taxation |
|
153,178 |
152,728 |
|
| Unappropriated
Profit Brought Forward |
|
2,891 |
6,351 |
|
|
------------ |
------------ |
|
| Profit
Available for Appropriation |
|
156,069 |
159,079 |
|
|
| APPROPRIATIONS |
|
| Transfer to: |
|
|
31,000 |
31,000 |
|
| Special
Reserve |
|
-- |
25,000 |
|
| Reserve
for Proposed Issue of Bonus Shares |
|
120,226 |
100,188 |
|
|
------------ |
------------ |
|
|
(151,226) |
(156,188) |
|
|
------------ |
------------ |
|
| Unappropriated
Profit Carried Forward |
|
4,843 |
2,891 |
|
|
========== |
========== |
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
Ali RAZA D. HABIB |
|
ABBAS D. HABIB |
|
ANWAR HAJI KARIM |
|
FAIZ N. ABDULALI |
|
|
Chairman |
|
Chief Executive and |
|
Director |
|
Director |
|
| Karachi:
February 26, 2001. |
|
Managing Director |
|
|
|
|
|
| Cash
Flow Statement for the year ended December 31, 2000 |
|
|
|
2000 |
1999 |
|
|
(Rupees in
'000) |
|
| Cash
Flow From Operating Activities |
|
| Profit
before Taxation |
|
403,178 |
372,728 |
|
|
| Less'
Dividend Income |
|
(7,778) |
(1,854) |
|
| Gain
on Disposal of Fixed Assets |
|
(954) |
(2,743) |
|
|
------------ |
------------ |
|
|
394,446 |
368,131 |
|
|
| Add
' Adjustment for Non-Cash Charges: |
|
| Depreciation |
|
32,513 |
27,190 |
|
| Provision
Against investments |
|
-- |
(16,974) |
|
| Provision
Against Advances |
|
29,741 |
4,423 |
|
|
------------ |
------------ |
|
|
62,254 |
14,639 |
|
|
------------ |
------------ |
|
|
|
|
456,700 |
382,770 |
|
| (Increase)
/ Decrease in Operating Assets: |
|
| Government
Securities |
|
853,641 |
2,436,275 |
|
| Advances |
|
(3,826,541) |
(3,365,835) |
|
| Other
Assets (Excluding Advance Tax) |
|
(153,950) |
(155,334) |
|
|
------------ |
------------ |
|
|
(3,126,850) |
(1,084,894) |
|
|
| Increase
/ (Decrease) in Operating Liabilities: |
|
| Deposits
and Other Accounts |
|
3,709,784 |
886,925 |
|
| Bills Payable |
|
(25,907) |
12,575 |
|
| Other
Liabilities (Excluding Provision for Taxation) |
|
159,742 |
54,787 |
|
|
------------ |
------------ |
|
|
3,843,619 |
954,287 |
|
|
| Cash
Inflow Before Tax |
|
1,173,469 |
252,163 |
|
| Income
Tax Paid |
|
(271,841) |
(266,802) |
|
|
------------ |
------------ |
|
| Net
Cash Inflow / (Outflow) from Operating Activities |
|
901,628 |
(14,639) |
|
|
------------ |
------------ |
|
| Net Cash
Inflow / (Outflow) from Operating Activities |
|
901,628 |
(14,639) |
|
|
| Cash
Flow From Investing Activities |
|
| Net
(Purchase) of Investment Securities |
|
(36,315) |
(21,142) |
|
| Dividend
Income |
|
5,528 |
1,854 |
|
| Fixed
Capital Expenditure |
|
(60,711) |
(79,451) |
|
| Sale
Proceeds of Fixed Assets |
|
1,058 |
2,994 |
|
|
------------ |
------------ |
|
| Net
Cash (Outflow) from Investing Activities |
|
(90,440) |
(95,745) |
|
|
| Cash
Flow From Financing Activities |
|
| Borrowings
from Other Banks, Agents etc. |
|
292,654 |
1,952,015 |
|
| Dividend
Paid |
|
(103) |
(39,189) |
|
|
------------ |
------------ |
|
| Net
Cash Inflow from Financing Activities |
|
292,551 |
1,912,826 |
|
|
------------ |
------------ |
|
| Increase
in Cash and Cash Equivalents for the Year |
|
1,103,739 |
1,802,442 |
|
|
| Cash
and Cash Equivalents at the Beginning of the Year |
|
3,609,554 |
1,807,112 |
|
| Cash
and Cash Equivalents at the End of the Year |
|
4,713,293 |
3,609,554 |
|
|
------------ |
------------ |
|
| Cash
and Cash Equivalents |
|
| Cash
in Hand and with State Bank of Pakistan / National Bank of Pakistan |
1,437,760 |
1,839,504 |
|
| Balances
with Other Banks |
|
1,785,533 |
1,590,050 |
|
| Money
at Call and Short Notice |
|
1,490,000 |
180,000 |
|
|
------------ |
------------ |
|
|
4,713,293 |
3,609,554 |
|
|
========== |
========== |
|
|
|
|
|
Ali RAZA D. HABIB |
|
ABBAS D. HABIB |
|
ANWAR HAJI KARIM |
|
FAIZ N. ABDULALI |
|
|
Chairman |
|
Chief Executive and |
|
Director |
|
Director |
|
| Karachi:
February 26, 2001. |
|
Managing Director |
|
|
|
|
|
|
|
|
|
|
|
|
| Notes
to the Accounts for the year ended December 31, 2000 |
|
|
| 1.
STATUS AND NATURE OF BUSINESS |
|
| The
Bank was incorporated in Pakistan on October 15, 1991 as a public limited
company and its shares |
|
| are
listed on all the Stock Exchanges in Pakistan. It is a scheduled bank
principally engaged in the |
|
| business
of commercial banking. |
|
|
| 2.
BASIS OF PRESENTATION |
|
| In
accordance with the directives of the Federal Government regarding the
shifting of the banking |
|
| system
to Islamic modes, the State Bank of Pakistan has issued various circulars
from time to time. |
|
| Permissible
forms of trade-related modes of financing include purchase of goods by the
banks from |
|
| their
customers and immediate resale to them at appropriate portion of mark-up
thereon. |
|
|
| 3.
SIGNIFICANT ACCOUNTING POLICIES |
|
|
| 3.1
Accounting Convention |
|
| These
accounts have been prepared under the historical cost convention and are in
conformity |
|
| with
generally accepted accounting standards of banking institutions in Pakistan. |
|
|
| 3.2
Investments |
|
| investments
are stated at cost, less provisions, if any, for permanent diminution in
their value. |
|
| Profit
or loss on sale of investments are dealt with through the profit and loss
account in the year |
|
| in
which they arise. |
|
|
| The
Bank enters into transactions of re-purchase and re-sale of registered
Government |
|
| securities
at contracted rates for specified periods of time with other financial
institutions. These |
|
| are
recorded as follows: |
|
|
| In
case of sale under re-purchase obligations, the securities are deleted from
the books and |
|
| charges
arising from the differential in sale and re-purchase values are accrued on
prorata basis |
|
| and
recorded as expense. Upon re-purchase the securities are re-instated. |
|
|
| In
case of purchase under re-sale obligations, the securities are booked at the
contracted |
|
| purchase
price and the differential of the contracted purchase and re-sale price is
amortized over |
|
| the
period of their contract and recorded as income. |
|
|
| 3.3
Fixed Assets |
|
| Fixed
Assets are stated at cost less accumulated depreciation. Depreciation is
charged by using |
|
| the
straight line method during the estimated useful life of the assets. Half
year's depreciation |
|
| is
charged on fixed assets purchased or disposed off during the year. Gain or
loss on sale of fixed |
|
| assets
are treated as revenue items. |
|
| Maintenance
and normal repairs are charged to income as and when incurred while costs |
|
| incurred
on renovations are capitalized and amortized over a period of five years. |
|
|
| 3.4 Taxation |
|
| Provision
for taxation is based on taxable income at the current rates of taxation
after taking into |
|
| account
applicable exemptions and rebates, as permissible under the Income Tax |
|
| Ordinance,
1979. |
|
|
| The
Bank accounts for deferred taxation using the liability method on all major
timing differences |
|
| except
where these are not expected to reverse in the foreseeable future. |
|
|
| 3.5
Staff Retirement Benefits |
|
| The
Bank operates a recognized provident fund scheme which is administered by the
Board of |
|
| Trustees
and contributions thereto are charged to the profit and loss account in
accordance with |
|
| the
terms of the scheme. |
|
|
| 3.6
Advances |
|
| Advances
are stated net of provisions for bad and doubtful debts. Provisions for bad
and doubtful |
|
| debts
are determined by the management keeping in view the requirements of the
Prudential |
|
| Regulations
issued by the State Bank of Pakistan. |
|
|
| 3.7
Revenue Recognition |
|
| Income
is recognized on accrual basis, except for commission on letters of credit
and guarantees |
|
| which
is taken to income account at the time of receipt. |
|
|
| 3.8
Foreign Currencies |
|
| Assets
and liabilities in foreign currencies have been translated into rupees at the
rate of |
|
| exchange
approximating those ruling at the Balance Sheet date except those covered by
forward |
|
| exchange
contracts which are converted at contracted rates. Exchange gains and losses
have |
|
| been
accounted for in the current year's income. |
|
|
| 3.9
Operating Lease |
|
| Lease
rentals payable on assets held under operating lease are charged to profit
and loss |
|
