| Credit Agricole Indosuez |
|
|
|
|
|
|
|
| The
Global French Bank |
|
| Annual
Report 2000 |
|
|
|
| AUDITORS'
REPORT TO THE DIRECTOR |
|
|
| We
have audited the annexed balance sheet of the Pakistan branches of Credit
Agricole Indceuez The Global |
|
| French
Bank - Pakistan branches as at December 31, 2000 and the related profit and
loss account and the |
|
| cash
flow statement, together with the notes forming pert thereof for the year
then ended, and we state that we |
|
| have
obtained all the information and explanations which to the best of our
knowledge and belief were neces- |
|
| sary
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 branches as
required by the Companies |
|
| Ordinance,
1984; |
|
|
| (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 except for the matters referred to in note 3.5 with
which we concur, |
|
|
| (ii)
the expenditure incurred during the year was for the purpose of the branches'
business; and |
|
|
| (iii)
the business conducted, investments made and the expenditure incurred during
the year were in |
|
| accordance
with the objects of the branches and the transactions of the branches which
have |
|
| come
to our notice have been within the powers of the branches; |
|
|
| (c)
in our opinion and to the best of our information and according to the
explanations given to us the |
|
| balance
sheet, the profit and loss account and the cash flow statement, together with
the notes forming pert |
|
| thereof
give the information required by the Banking Companies Ordinance, 1962 and
the Companies |
|
| Ordinance,
1984 in the manner so required and except for the matter referred to in note
17, give a true |
|
| and
fair view of the state of the branches' affairs as at December 31, 2000 and
their true balance of the |
|
| profit
and cash flows for the year then ended; and |
|
|
| (d)
in our opinion Zakat deductible at source under the Zakat and Ushr Ordinance,
1980 was deducted by |
|
| the
branches and deposited in the Central Zakat Fund established under section 7
of that Ordinance. |
|
|
| KARACHI |
|
A.F. FERGUSON & CO. |
|
| DATED:
MARCH 20, 2001 |
|
Chartered Accountants |
|
|
|
| BALANCE
SHEET AS AT DECEMBER 31, 2000 |
|
|
|
|
2000 |
1999 |
|
|
Notes |
(Rupees in
thousand) |
|
| ASSETS |
|
| Cash |
|
4 |
551,278 |
1,389,942 |
|
| Balances
with other banks |
|
5 |
113,811 |
15,733 |
|
| Money
at call and short notice |
|
-- |
550,000 |
|
| Investments |
|
6 |
2,225,074 |
791,527 |
|
| Advances
- net of provision |
|
7 |
4,493,627 |
3,683,448 |
|
| Operating
fixed assets |
|
8 |
49,261 |
57,201 |
|
| Capital
work in progress |
|
|
2,235 |
-- |
|
| Other assets |
|
9 |
707,994 |
591,110 |
|
|
------------ |
------------ |
|
|
8,143,280 |
7,078,961 |
|
| LIABILITIES |
|
| Deposits
and other accounts |
|
10 |
3,983,632 |
3,549,305 |
|
| Borrowings
from other banks, agents etc. |
|
11 |
3,339,069 |
2,723,332 |
|
| Bills payable |
|
|
23,158 |
28,547 |
|
| Other liabilities |
|
12 |
695,734 |
589,344 |
|
|
|
------------ |
------------ |
|
|
8,041,593 |
6,890,528 |
|
|
------------ |
------------ |
|
| NET ASSETS |
|
101,687 |
188,433 |
|
|
|
========== |
========== |
|
| REPRESENTED
BY |
|
| Capital |
|
13 |
-- |
-- |
|
| Unremitted
profits |
|
100,642 |
1,068,433 |
|
| Surplus
on revaluation of investments |
|
1,045 |
-- |
|
|
------------ |
------------ |
|
|
101,687 |
168,433 |
|
|
|
|
========== |
========== |
|
| MEMORANDUM
ITEMS |
|
| Bills
for collection |
|
14 |
481,779 |
303,072 |
|
| Acceptances,
endorsements and other obligations |
|
973,123 |
1,068,723 |
|
| Contingent
liabilities and commitments |
|
15 |
|
|
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
J.P. Fontaine |
|
J.P. Raynaud |
|
|
Chief Operating Officer |
|
Senior Country Officer |
|
|
|
| PROFIT
AND LOSS ACCOUNT FOR THE YEAR ENDED DECEMBER 31, 2000 |
|
|
|
|
|
2000 |
1999 |
|
|
|
Notes |
(Rupees in
thousand) |
|
| Mark
up / interest and discount and / or return earned |
|
779,341 |
844,321 |
|
| Less:
Cost / return on deposits, borrowings etc. |
|
694,545 |
736,533 |
|
|
------------- |
------------- |
|
|
84,796 |
107,788 |
|
|
| Fees,
commissions and brokerage |
|
34,437 |
38,657 |
|
| Other
operating income - income from dealing |
|
| in
foreign currencies |
|
87,533 |
108,809 |
|
|
------------- |
------------- |
|
|
121,970 |
147,466 |
|
|
------------- |
------------- |
|
|
206,766 |
255,254 |
|
| Operating
expenses: |
|
| Administrative
expenses |
|
16 |
147,568 |
142,272 |
|
| Net
reversal against non-performing advances |
|
7.2 |
(2,937) |
(31,700) |
|
|
------------- |
------------- |
|
|
144,631 |
110,572 |
|
|
|
|
|
62,135 |
144,682 |
|
| Profit
on disposal of fixed assets |
|
390 |
75 |
|
|
------------- |
------------- |
|
| Profit
before taxation |
|
62,525 |
144,757 |
|
| Taxation: |
|
| - Current |
|
10,600 |
25,400 |
|
| - Prior |
|
(25,000) |
-- |
|
| - Deferred |
|
15,040 |
15,177 |
|
|
------------- |
------------- |
|
|
640 |
40,577 |
|
|
------------- |
------------- |
|
| Profit
after taxation |
|
61,885 |
104,180 |
|
| Unremitted
profit brought forward |
|
188,433 |
111,450 |
|
|
------------- |
------------- |
|
| Profit
available for remittance |
|
250,318 |
215,630 |
|
| Remittance
to Head Office |
|
(149,676) |
(27,197) |
|
|
------------- |
------------- |
|
|
100,642 |
188,433 |
|
|
========== |
========== |
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
J.P. Fontaine |
|
J.P. Raynaud |
|
|
Chief Operating Officer |
|
Senior Country Officer |
|
|
|
|
|
| CASH
FLOW STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2000 |
|
|
|
|
|
2000 |
1999 |
|
|
(Rupees in
thousand) |
|
| CASH
FLOW FROM OPERATING ACTIVITIES |
|
|
|
| Profit
before taxation |
|
62,525 |
144,757 |
|
| Adjustment
for non-cash charges |
|
|
|
| Depreciation |
|
12,749 |
11,968 |
|
| (Gain)
/ loss on disposal of fixed assets |
|
(390) |
(75) |
|
| (Net
reversal) / provision against non-performing advances |
|
(2,937) |
(31,700) |
|
|
------------- |
------------- |
|
|
9,422 |
(19,807) |
|
|
------------- |
------------- |
|
|
71,947 |
124,950 |
|
| Decrease
/ (increase) in operating assets |
|
| Government
securities |
|
(1,432,502) |
238,136 |
|
| Advances |
|
(807,242) |
( 131,069) |
|
| Other
assets (excluding taxation and deferred tax) |
|
(64,597) |
(179,394) |
|
|
------------- |
------------- |
|
|
(2,394,341) |
(72,327) |
|
|
| (Decrease)
/ Increase in operating liabilities |
|
| Deposits and other accounts |
. |
|
434,327 |
(610,526) |
|
| Bills payable |
|
(5,389) |
(11,424) |
|
| Other liabilities |
|
106,390 |
(33,150) |
|
|
------------- |
------------- |
|
|
535,328 |
(655,100) |
|
|
------------- |
------------- |
|
| Cash
flow before tax |
|
(1,697,066) |
(602,477) |
|
| Income tax paid |
|
(52,927) |
(94,045) |
|
|
------------- |
------------- |
|
| Net
cash flow from operating activities |
|
(1,749,993) |
(696,522) |
|
|
| CASH
FLOW FROM INVESTING ACTIVITIES |
|
| Fixed
capital expenditure |
|
(5,639) |
(6,984) |
|
| Capital
work in progress |
|
(2,235) |
-- |
|
| Sale
proceeds of fixed assets |
|
1,220 |
264 |
|
|
------------- |
------------- |
|
| Net
cash used in investing activities |
|
(6,654) |
(6,720) |
|
| CASH
FLOW FROM FINANCING ACTIVITIES |
|
| Borrowings
from other banks, agents etc. |
|
615,737 |
1,982,068 |
|
| Remittances
to Head Office |
|
(149,676) |
(27,197) |
|
|
------------- |
------------- |
|
| Net
cash flow from financing activities |
|
466,061 |
1,954,871 |
|
|
------------- |
------------- |
|
| increase
/ (Decrease) in cash and cash equivalents for the year |
(1,290,586) |
1,251,629 |
|
| Cash
and cash equivalents at the beginning of the year |
|
1,955,675 |
794,046 |
|
|
------------- |
------------- |
|
| Cash
and cash equivalents at end of the year |
|
665,089 |
1,955,675 |
|
|
========== |
========== |
|
| Cash
and cash equivalents |
|
| Cash |
|
551,278 |
1,389,942 |
|
| Balances
with other banks |
|
113,811 |
15,733 |
|
| Money
at call and short notice |
|
-- |
550,000 |
|
|
------------- |
------------- |
|
|
665,089 |
1,955,675 |
|
|
========== |
========== |
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
|
|
J.P. Fontaine |
|
J.P. Raynaud |
|
|
Chief Operating Officer |
|
Senior Country Officer |
|
|
|
|
|
|
|
|
|
|
|
| NOTES
TO THE ACCOUNTS FOR THE YEAR ENDED DECEMBER 31, 2000 |
|
|
|
|
|
|
| 1.
STATUS AND NATURE OF BUSINESS |
|
| Credit
Agricole Indosuez The Global French Bank is incorporated in France with
limited liability. It |
|
| is
operating in Pakistan as a Commercial Bank under Banking Companies Ordinance,
1962 |
|
| through
two branches located at Karachi and Lahore. |
|
|
| 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.
One permissible form of trade-related mode of financing comprises of purchase
of goods by |
|
| the
bank from their customers and immediate resale to them at appropriate mark-up
in price on |
|
| deferred
payment basis. The purchase and sale arising under these arrangements are not |
|
| reflected
in the accounts as such but are restricted to the amount of facility actually
utilised and |
|
| the
appropriate portion of mark-up thereon |
|
|
| 3.
SIGNIFICANT ACCOUNTING POLICIES |
|
| 3.1
Accounting convention |
|
| These
accounts have been prepared under the historical cost convention except for
certain |
|
| investments
which are stated on the mark to market basis as disclosed in note 3.5. |
|
|
| 3.2
Staff retirement benefits |
|
| The
branches operate an approved funded gratuity scheme for all its employees who
have |
|
| completed
5 years' service or more. Contributions allowable under Income Tax rules have |
|
| been
made to the fund. |
|
|
| 3.3 Taxation |
|
| Taxation
charge in the accounts is based on taxable income. The branches account for |
|
| deferred
taxation on timing differences using the liability method. |
|
|
| 3.4 Advances |
|
| Advances
are stated at cost less provision for bad and doubtful balances. The
provision for |
|
| bad
and doubtful advances is made in accordance with the Prudential Regulations
of the |
|
| State
Bank of Pakistan. |
|
|
| 3.5
Investments |
|
| During
the year, the bank has decided to value Treasury bills on mark to market
basis. The |
|
| difference
between the carrying value and the revalued amount is taken to a surplus /
deficit |
|
| on
revaluation account and shown separately in the balance sheet below capital.
The policy |
|
| has
been changed to comply with the requirements of State Bank of Pakistan's BSD |
|
| Circular
No. 20 of August 4, 2000. |
|
|
| Previously
these investments were carried at cost. Had the policy remained unchanged the |
|
| value
of investments would have been lower by Rs. 1.045 million. However there is
no |
|
| effect
on profit and loss account due to the change in policy. |
|
|
| All
other investments are stated at cost and adjusted for amortization of premium
/ discount. |
|
|
| 3.6
Operating fixed assets and depreciation |
|
| Fixed
assets are stated at cost less accumulated depreciation. Depreciation is
charged to |
|
| income
applying the straight line method. A full month's depreciation is charged in
the |
|
| month
of addition while no depreciation is charged for the month in which the
disposal is |
|
| made. |
|
|
| Gains
and losses on the disposal of fixed assets are included in income currently. |
|
|
| 3.7
Revenue recognition |
|
| Profit
/ return on advances and investments are recognised on an accrual basis. |
|
| Fees,
commissions and brokerage income is recognised when earned. |
|
|
| 3.8
Foreign currencies |
|
| Assets
and liabilities in foreign currencies are translated into Pak rupees at the
rates of |
|
| exchange
approximating those prevailing at the balance sheet date, except those
foreign |
|
| currency
deposits against which forward cover has been obtained from the State Bank of |
|
| Pakistan,
which are stated at contracted rates. |
|
|
| Outstanding
forward exchange contracts are translated on a mark to market basis. |
|
|
| Exchange
gains or losses are included in the profit and loss account. |
|
|
|
2000 |
1999 |
|
|
|
(Rupees in
thousand) |
|
| 4. CASH |
|
|
| In hand |
|
| - local currency |
|
21,680 |
55,281 |
|
| -
foreign currencies |
|
16,765 |
9,991 |
|
|
------------ |
------------ |
|
|
38,445 |
65,272 |
|
| With
State Bank of Pakistan in |
|
| Special
deposit account |
|
453,629 |
424,789 |
|
| -
head office capital account |
|
-- |
674,560 |
|
| -
deposit account |
|
59,204 |
225,321 |
|
| Current
account |
|
------------ |
------------ |
|
|
551,278 |
1,389,942 |
|
|
========== |
========== |
|
|
|
|
| 5. BALANCES WITH OTHER BANKS |
|
| Current
Accounts |
|
| - In Pakistan |
|
-- |
500 |
|
| -
Outside Pakistan |
|
113,811 |
15,233 |
|
|
------------ |
------------ |
|
|
113,811 |
15,733 |
|
|
========== |
========== |
|
|
|
|
| 6. INVESTMENTS (at cost less provisions) |
|
| Investment
securities |
|
|
| Federal
Government Securities |
|
| -
Federal investment Bonds |
|
-- |
70,000 |
|
| - Long Term Bonds |
|
173,460 |
289,100 |
|
| -
Treasury Bills |
|
2,051,614 |
432,360 |
|
| Others |
|
|
|
|
| Term
Finance Certificates - listed |
|
|
|
-- |
67 |
|
|
|
|
|
------------ |
------------ |
|
|
|
|
|
2,225,074 |
791,527 |
|
|
|
|
|
========== |
========== |
|
|
|
|
|
|
|
| Book
value of unquoted investments Rs. 2.23 billion (1999: Rs 721.46 million). |
|
|
| Treasury
bills having face value of Rs. 68 million (book value Rs. 68.04 million) have
been deposited |
|
| with
the State Bank of Pakistan pursuant to section 13 (2) of the Banking
Companies Ordinance, 1962. |
|
|
|
2000 |
1999 |
|
|
(Rupees in
thousand) |
|
| 7. ADVANCES |
|
|
| Loans,
cash credits, overdrafts etc. |
|
| In Pakistan |
|
3,651,752 |
3,142,843 |
|
| Bills
discounted and purchased |
|
| Payable
in Pakistan |
|
574,874 |
393,771 |
|
| Payable
outside Pakistan |
|
385,869 |
268,639 |
|
|
------------- |
------------- |
|
|
960,743 |
662,410 |
|
|
------------- |
------------- |
|
|
4,612,495 |
3,805,253 |
|
| General
and specific provision for non-performing |
|
| advances
- note 7.2 |
|
(118,868) |
(121,805) |
|
|
------------- |
------------- |
|
|
4,493,627 |
3,683,448 |
|
|
========== |
========== |
|
| Advances
before p. provision for doubtful debts include Rs. 118.87 million which have
been placed on |
|
| non-performing
status. |
|
|
| 7.1
Particulars of advances |
|
| -
in local currency |
|
4,493,627 |
3,683,448 |
|
| -
in foreign currencies |
|
-- |
-- |
|
|
------------- |
------------- |
|
|
4,493,627 |
3,683,448 |
|
|
========== |
========== |
|
| Debts
considered good in respect of which the bank is |
|
| folly secured |
|
4,492,253 |
3,682,065 |
|
| Debts
considered good for which the bank holds no other |
|
| security
than the debtors' personal security |
|
1,374 |
1,383 |
|
| Debts
considered good secured by the personal liabilities |
|
| of
one or more parties in addition to the personal security |
|
| of the debtors |
|
-- |
-- |
|
| Debts
considered doubtful or bad not provided for |
|
-- |
-- |
|
|
------------- |
------------- |
|
|
4,493,627 |
3,683,448 |
|
|
========== |
========== |
|
|
Balance |
Maximum total |
|
|
outstanding at |
amount of financing |
|
|
December 31, |
including temporary |
|
|
2000 |
financing granted |
|
|
|
during the year |
|
|
2000 |
|
|
(Rupees in
thousand) |
|
| Debts
due by directors or executives of the bank or any of |
|
| them
either severally or jointly with any other persons |
|
29,965 |
40,988 |
|
| Debts
due by companies or firms in which the directors of |
|
| the
bank are interested as directors, partners or in case of |
|
| private
companies, as members |
|
-- |
-- |
|
| Debts
due by the subsidiary companies, controlled firms, |
|
| managed
modarabas and other associated undertakings |
|
14,876 |
31,691 |
|
|
|
|
|
2000 |
1999 |
|
|
(Rupees in
thousand) |
|
| 7.2
Particulars of provision against non-performing advances |
|
| Specific |
|
| Opening
balance |
|
121,805 |
153,744 |
|
| Provision
for the year |
|
17,104 |
10,000 |
|
| Reversals |
|
(20,041) |
(41,700) |
|
|
------------ |
------------ |
|
|
(2,937) |
(31,700) |
|
| Amounts
written off |
|
|
-- |
(239) |
|
|
------------ |
------------ |
|
|
118,868 |
121,805 |
|
|
========== |
========== |
|
| 7.3
During the year ended December 31, 2000, there were no write offs or
financial relief provided which |
|
| were
Rs. 500,000 or more. |
|
|
|
|
|
|
| 8.
OPERATING FIXED ASSETS - TANGIBLE |
|
|
|
|
|
|
| Description |
|
Cost as at |
Additions/ |
Cost as at |
Accumulated |
Depreciation |
Accumulated |
Net book |
Rate of |
|
|
January 1, |
(Disposal) |
December |
depreciation as |
Charge for |
Depreciation |
value at |
depreciation |
|
|
2000 |
|
31, 2000 |
at January 1, |
the year/ |
as December |
December 31, |
% per annum |
|
|
|
2000 |
(Accumulated |
31, 2000 |
2000 |
|
|
|
Depreciation |
|
|
|
on disposals) |
|
|
-----------------------------------------------(Rupees
in thousand)--------------------------------------------------------- |
|
| Furniture and fixtures |
39,740 |
318 |
40,058 |
7,484 |
4,012 |
11,496 |
28,562 |
10 |
| Office equipments |
45,032 |
5,321 |
49,155 |
20,087 |
8,737 |
28,456 |
20,699 |
20 |
|
(1,198) |
|
(368) |
|
|
|
------------ |
------------ |
------------ |
------------ |
------------ |
------------ |
------------ |
|
|
84,772 |
5,639 |
89,213 |
27,571 |
12,749 |
39,952 |
49,261 |
|
|
(1,198) |
|
(368) |
|
|
========== |
========== |
========== |
========== |
========== |
========== |
========== |
|
| 1999 |
|
78,101 |
6,984 |
84,772 |
15,727 |
11,968 |
27,571 |
57,201 |
|
|
(313) |
|
(124) |
|
|
========== |
========== |
========== |
========== |
========== |
========== |
========== |
|
|
|
|
| 8.1
Details of disposal of fixed assets |
|
|
|
