| Agriculture Development Bank of Pakistan |
|
|
|
|
|
|
|
|
| Annual
Report 1999 |
|
|
|
|
| AUDITORS
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed balance sheet of the Agricultural Development Bank
of Pakistan as at 30th June, 1999 and the related profit and loss account,
toga with the notes forming part
thereof |
| for
the year then ended, in which are incorporated the un-audited certified
returns from the branches except for 20 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 Agricultural Development Bank Ordinance 1961 and the Rules made
thereunder and the Companies |
| Ordinance
1984 and the returns referred to above received from the branches have been
found edequate 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 provisions of the said Rules of the
Bank, 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 me
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 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 and loss account
together with the notes forming part |
|
| therefor
give the information required by the said Rules of the Bank, 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 30th June, 1999 and
its true balance of the profit for the year then ended; |
|
|
| d)
in our opinion, Zakat deductible at source under the Zakat & Ushr
Ordinance, 1980 was deducted by the Bank and deposited in the Central Zakat
Fund established under Section 7 of that |
| Ordinance; |
|
|
| c)
without qualifying our opinion; |
|
|
| (i)
we draw attention to note 9.1 of the accounts which explains the reason for
deferment of the amount paid to the employees under optional retirement
scheme. |
|
|
| (ii)
we draw attention to the fact mentioned in Note 19 that State Bank of
Pakistan (SBP) has accepted to adjust R.5. 125.742 million being SBP share of
Ioss for the year 1997-98 |
|
| out
of its share Of profit for 1998-99 and figures of 1997-98 are restated
accordingly. |
|
|
| M.
YOUSUF ADIL SALEEH & CO |
|
IBRAHIM 5HAIKH & CO |
|
| Chartered
Accountants |
|
Chartered Accountants |
|
|
| Islamabad. |
|
| 11 December 1999 |
|
|
|
| BALANCE
SHEET AS ON JUNE 30, 1999 |
|
|
Note |
(Rupees in
'000) |
|
|
1998 |
1999 |
|
|
|
|
(Restarted) |
|
| ASSETS |
|
|
|
| Cash |
|
|
4 |
440,020 |
692,149 |
|
| Balances
with other banks |
|
5 |
869,619 |
1,167,070 |
|
| Money
at call and short notice |
|
|
1,351,206 |
4,631,650 |
|
| Investments |
|
6 |
3,357,073 |
3,308,207 |
|
| Advances
- Net of Provision |
|
7 |
62,268,889 |
51,653,577 |
|
| Operating
fixed assets |
|
8 |
368,168 |
358,954 |
|
| Capital
work in progress |
|
|
-- |
227 |
|
| Other assets |
|
|
9 |
7,693,909 |
7,591,192 |
|
|
|
|
----------- |
----------- |
|
|
|
|
76,348,884 |
69,403,026 |
|
| LIABILITIES |
|
| Deposits
and other accounts |
|
10 |
2,466,119 |
2,058,662 |
|
| Borrowings
from other banks, agents etc. |
|
11 |
61,221,455 |
60,561,914 |
|
| Bills payable |
|
|
400,272 |
14,393 |
|
| Other
liabilities |
|
12 |
7,306,947 |
3,574,502 |
|
|
|
|
----------- |
----------- |
|
|
71,394,793 |
66,209,471 |
|
|
----------- |
----------- |
|
| Net Assets |
|
4,954,091 |
3,193,555 |
|
|
========== |
========== |
|
| REPRESENTED
BY: |
|
| Share capital |
|
13 |
3,214,323 |
3,214,323 |
|
| Reserve
fund and other reserves |
|
14 |
1,739,768 |
-- |
|
|
----------- |
----------- |
|
|
|
|
4,954,091 |
3,214,323 |
|
| Un-appropriated
loss |
|
-- |
(20,768) |
|
|
----------- |
----------- |
|
| Shareholders'
equity |
|
4,954,091 |
3,193,555 |
|
|
========== |
========== |
|
| MEMORANDUM
ITEMS: |
|
|
| Bills
for collection |
|
-- |
-- |
|
| Acceptance,
endorsements and other obligations |
|
31,463 |
31,463 |
|
| Contingent
liabilities and commitments |
|
15 |
-- |
-- |
|
|
|
| PROFIT
AND LOSS ACCOUNT FOR THE YEAR ENDED JUNE 30, 1999 |
|
|
|
|
|
Note |
(Rupees in
'000) |
|
|
|
1998 |
1999 |
|
|
|
(Restarted) |
|
|
|
|
| Mark
up / interest and discount and/or return earned |
|
10,396,943 |
8,399,878 |
|
| Less:
Cost / Return on deposits, borrowings etc. |
|
3,947,016 |
929,500 |
|
|
---------- |
---------- |
|
| (Including
Rs. 2,509,653 thousand profit payable to SBP) |
|
6,449,927 |
7,470,378 |
|
|
|
|
| Fees,
commissions and brokerage |
|
104,673 |
74,183 |
|
| Other
operating income |
|
-- |
-- |
|
|
---------- |
---------- |
|
|
104,673 |
74,183 |
|
|
---------- |
---------- |
|
|
6,554,600 |
7,544,561 |
|
| Operating
Expenses |
|
|
| Administrative
expenses |
|
16 |
1,955,788 |
1,840,514 |
|
|
| Provisions
against non--performing advances |
|
7.2 |
2,938,747 |
9,586,973 |
|
|
|
|
---------- |
---------- |
|
|
|
4,894,535 |
11,427,487 |
|
|
---------- |
---------- |
|
|
1,660,065 |
(3,882,926) |
|
| Other
income |
|
17 |
463,972 |
384,163 |
|
|
|
|
---------- |
---------- |
|
|
2,124,037 |
(3,498,763) |
|
| Other
charges |
|
18 |
363,501 |
323,342 |
|
|
|
---------- |
---------- |
|
| Profit/(Loss)
before taxation |
|
1,760,536 |
(3,822,105) |
|
| Un-appropriated
bee adjusted as per SBP |
|
|
|
| directive |
|
19 |
(20,768) |
-- |
|
|
|
---------- |
---------- |
|
| Profit
available for appropriation |
|
1,739,768 |
(3,822,105) |
|
|
========== |
========== |
|
| APPROPRIATIONS |
|
| Transfer to: |
|
| Revenue
reserve |
|
1,739,768 |
(3,675,595) |
|
| State
Bank of Pakistan under PLS borrowings |
|
-- |
(125,742) |
|
|
| un-appropriated
loss carried forward |
|
-- |
(20,768) |
|
|
---------- |
---------- |
|
|
1,739,758 |
(3,822,105) |
|
|
========== |
========== |
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
|
|
| CASH
FLOW STATEMENT FOR THE YEAR ENDED JUNE 30, 1999 |
|
|
Note |
(Rupees in
'000) |
|
|
1998 |
1999 |
|
|
|
(Restarted) |
|
| CASH
FLOW FORM OPERATING ACTIVITIES |
|
|
|
|
| Profit
/ (Loss) before taxation |
|
1,760,536 |
(3,822,105) |
|
| Less:
Profit / (Loss) form investment |
|
(1,468) |
-- |
|
|
---------- |
---------- |
|
| Adjustment
for non-cash/charges |
|
| Depreciation |
|
41,838 |
52,733 |
|
| Provision
against non-performing advances |
|
2,938,747 |
9,586,973 |
|
| Profit
on disposal of fixed assets |
|
(9,166) |
(10,491) |
|
| Amortization
of deferred cost |
|
363,501 |
323,342 |
|
| Other assets |
|
-- |
-- |
|
|
---------- |
---------- |
|
|
3,334,920 |
9,952,557 |
|
|
---------- |
---------- |
|
|
5,093,988 |
6,130,452 |
|
| (Increase
/ (decrease) in operating assets |
|
| Government
securities |
|
(51,266) |
(231,180) |
|
| Advances |
|
(13,554,059) |
(10,594,005) |
|
| Other assets |
|
(466,218) |
(2,147,313) |
|
|
---------- |
---------- |
|
|
(14,071,543) |
(12,972,498) |
|
| (Increase
/ (decrease) in operating liabilities |
|
| Deposits
and other accounts |
|
407,457 |
564,673 |
|
| Other
payable |
|
385,879 |
(177,227) |
|
| Other
liabilities |
|
3,732,445 |
(1,405,476) |
|
|
---------- |
---------- |
|
|
4,525,781 |
(1,018,030) |
|
|
---------- |
---------- |
|
| Net
cash flow from activities |
|
4,451,774) |
(7,860,076) |
|
|
| CASH
FLOW FROM INVESTING ACTIVITIES |
|
|
| Net
(purchase) / sale proceeds of investment securities |
|
3,868 |
-- |
|
| Fixed
capital expenditure |
|
(43,430) |
(64,882) |
|
| Sale
proceeds of fixed assets |
|
1,771 |
26,056 |
|
|
---------- |
---------- |
|
| Net
cash flow from investing activities |
|
(37,791) |
(38,826) |
|
|
---------- |
---------- |
|
| CASH
FLOW FROM FINANCING ACTIVITIES |
|
| Borrowings
from other banks, agents etc. |
|
659,541 |
7,762,821 |
|
|
---------- |
---------- |
|
| Net
cash flow from financing activities |
|
659,541 |
7,762,821 |
|
|
| (Decrease)
/ increase in cash |
|
| and
cash equivalents during the year |
|
(3,830,024) |
(136,081) |
|
|
|
| Cash
and cash equivalents at |
|
| the
beginning of the year |
|
6,490,869 |
6,626,950 |
|
|
---------- |
---------- |
|
| Cash
and cash equivalents at the end of the year |
|
2,660,845 |
6,490,869 |
|
|
========== |
========== |
|
| Cash
and cash equivalents: |
|
| Cash |
|
440,020 |
692,149 |
|
| Balance
with other banks |
|
869,619 |
1,167,070 |
|
| Money
at call and short notice |
|
1,351,206 |
4,631,650 |
|
|
---------- |
---------- |
|
|
2,660,845 |
6,490,869 |
|
|
---------- |
---------- |
|
|
|
| NOTES
TO THE ACCOUNTS FOR THE YEAR ENDED JUNE 30, 1999 |
|
|
| 1.
STATUS AND NATURE OF BUSINESS |
|
| The
Agricultural Development Bank of
Pakistan was established under the Agriculture |
|
| Development
Bank Ordinance, 1961, by merger of
former Agricultural Development Finance |
|
| Corporation
and Agricultural Bank of Pakistan, in February, 1961 to provide better credit |
|
| facilities
for the promotion, expansion and development of agriculture and persons
engaged |
|
| therein. |
|
|
| 2.
BASIS OF PRESENTATION |
|
|
| These
accounts are prepared in accordance with the requirements of the State Bank
of |
|
| Pakistan's
BPRD Circular No.31 dated August 13, 1997. |
|
|
| 3.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
|
| 3.1
Historical Cost Convention |
|
| These
accounts have been prepared on the historical cost convention |
|
|
| 3.2
Staff Retirement Benefits |
|
| The
bank operates an approved funded gratuity scheme for all its permanent |
|
| employees.
The contributions are made in accordance with the rules of the scheme. |
|
|
| 3.3 Taxation |
|
| ADBP
is exempt from Income Tax, Super Tax, Wealth Tax, Gift Tax and Business
Profit |
|
| Tax
under Agricultural Development Bank Ordinance, 1.961. |
|
|
| 3.4
Advances |
|
| Advances
are stated net of Provision for bad and doubtful debts. Provisions are made |
|
| in
accordance with the Prudential Regulations of the State Bank of Pakistan. |
|
|
| 3.5
Investments |
|
| Investments
in shares are stated at cost. Gains / Losses arising on disposal of' |
|
| investments
during the year are taken to Profit and Loss Account. |
|
|
| 3.6
Operating Fixed Assets and Depreciation |
|
| Fixed
Assets other than land which is not depreciated, are stated at cost less |
|
| accumulated
depreciation. Deprecation is charged to income whereby the cost of |
|
| assets
will be written off over the estimated useful lives of buildings, vehicles
and |
|
| other
assets at varying rates and methods, depending on the nature of the
respective |
|
| assets.
Gains / losses on disposal of fixed assets are taken to the Profit and Loss |
|
| Account. |
|
|
| 3.7
Revenue Recognition |
|
| Revenue
from advances is recognized on accrual basis except in case of loans |
|
| classified
under the Prudential Regulations on which return is taken to suspense |
|
| account
until realized. Commission is recognized when earned. |
|
|
| 3.8
Foreign Currencies |
|
| The
bank operates foreign currency transactions through State Bank of Pakistan in |
|
| local
currency by paying exchange fluctuation risk fee to the State Bank of
Pakistan. |
|
|
| 3.9
Deferred Costs |
|
| These
are amortized over a maximum period of five years commencing from the year in |
|
| when
mesa are incurred. |
|
|
|
(Rupees in
'000) |
|
|
1998 |
1999 |
|
|
|
|
|
(Restarted) |
|
| 4. CASH |
|
| In
hand - local currency |
|
78,522 |
71,669 |
|
|
- foreign currencies |
|
-- |
-- |
|
| With
State Bank of Pakistan in: |
|
|
| Special
deposit account |
|
|
- Export refinance |
|
-- |
-- |
|
|
- Other |
|
-- |
-- |
|
| Current
account |
|
310,398 |
566,376 |
|
| With
National Bank of Pakistan in current account |
|
51,100 |
54,104 |
|
|
|
|
----------- |
----------- |
|
|
440,020 |
692,149 |
|
|
========== |
========== |
|
| 5.
BALANCE IN/TH OTHER BANKS |
|
|
| In Pakistan |
|
| Current
accounts |
|
869,619 |
1,167,070 |
|
| Deposits
accounts |
|
-- |
-- |
|
| Outside
Pakistan |
|
| Current
accounts |
|
-- |
-- |
|
| Deposits
accounts |
|
-- |
-- |
|
|
----------- |
----------- |
|
|
869,619 |
1,167,070 |
|
|
========== |
========== |
|
| 6.
INVESTMENTS (at cost less provision) |
|
|
|
|
|
|
| Federal
and Provincial Governments Securities: |
|
| Federal
Investment Bonds |
|
1,645,000 |
670,000 |
|
| Short
Term Federal Bonds |
|
300,000 |
2,170,000 |
|
| Federal
Government Securities |
|
1,356,266 |
406,000 |
|
| Provincial
Government Securities (note 6.1) |
|
12,509 |
16,509 |
|
| Investments
in subsidiary companies and associated |
|
| undertakings: |
|
| Fully
paid up ordinary shares |
|
| - Listed companies |
|
11,801 |
11,801 |
|
| - Unlisted companies |
|
31,497 |
31,897 |
|
| Debentures,
Bonds, Participation Term Certificates |
|
| and
Term Finance Certificates |
|
-- |
-- |
|
|
---------- |
---------- |
|
|
3,357,073 |
3,308,207 |
|
| Less:
Provision for diminution in the value of investments |
|
-- |
-- |
|
|
---------- |
---------- |
|
|
3,357,073 |
3,308,207 |
|
|
=========== |
=========== |
|
|
|
|
| (Market
value of listed investments Rs. 41,518 thousand (1998: Rs. 29,851 thousand)
and |
|
|
| book
value of unlisted investments Rs. 31, 497 thousand (1998: Rs. 33,897
thousand) |
|
|
|
|
|
| 6.1
Provincial Government securities |
|
|
|
|
|
|
| Punjab |
|
162 |
162 |
|
| Sindh |
|
4,347 |
4,347 |
|
| NWFP |
|
|
2,000 |
4,000 |
|
| Baluchistan |
|
6,000 |
8,000 |
|
|
---------- |
---------- |
|
|
12,509 |
16,509 |
|
|
=========== |
=========== |
|
|
|
(Rupees in
'000) |
|
|
1998 |
1999 |
|
| 7.
ADVANCES |
|
|
|
|
|
|
| Loans,
cash credits, overdrafts |
|
|
| in Pakistan |
|
87,277,969 |
74,482,524 |
|
| Outside
Pakistan |
|
-- |
-- |
|
|
---------- |
---------- |
|
|
87,277,969 |
74,482,574 |
|
| Bill
discounted and purchased |
|
|
|
| Payable
In Pakistan |
|
-- |
-- |
|
| Payable
outside Pakistan |
|
-- |
-- |
|
|
| Less:
General and specific provision for |
|
| non-performing
advances - note 7.2 |
|
(25,009,080) |
(22,828,947) |
|
|
---------- |
---------- |
|
|
62,268,889 |
51,653,577 |
|
|
========== |
========== |
|
|
|
|
| Advances
include Rs. 41,801,824 thousand (1998: Rs. 36,249,045 thousand) which have
been placed on non-performing status |
|
|
| 7.1
Particular of advances |
|
|
|
|
| In
local currency |
|
62,268,889 |
51,653,577 |
|
| In
foreign currencies |
|
-- |
-- |
|
|
|
|
---------- |
---------- |
|
|
|
|
62,268,889 |
51,653,577 |
|
|
|
|
========== |
========== |
|
| Debts
considered good in respect of which the |
|
|
|
| bank
is fully secured |
|
62,220,427 |
51,604,883 |
|
|
| Debts considered
good for which the bank holds no |
|
|
|
| other
security than the debtors' personal security |
|
|
|
|
| Debts considered good
secured by the personal |
|
| liabilities
of one or more parties in addition to the |
|
| personal
security of the debtors |
|
48,462 |
48,694 |
|
| Debts
considered doubtful or bad provided for |
|
-- |
-- |
|
|
|
|
---------- |
---------- |
|
|
|
62,268,889 |
51,653,577 |
|
|
========== |
========== |
|
|
|
|
|
Balance as |
Maximum |
|
|
at June 30, |
during |
|
|
1990 |
the year |
|
|
(Rupees in
'000) |
|
| Debts
due by directors or executives of the bank or any |
|
|
|
| of
them either severally or jointly with any other person |
|
-- |
-- |
|
|
|
|
| Debts
due by companies or firms in which the directors |
|
| of
the bank are interested as directors, partners or in the |
|
| case
of private companies, as members |
|
-- |
-- |
|
|
| Debts
clue by subsidiary companies, controlled firms, |
|
| managed
modarabas and other associated undertakings |
|
-- |
-- |
|
|
| 7.2
Particulars of provision against non performing advances |
|
|
|
|
(Rupees in
'000) |
|
|
|
|
1998 |
1999 |
|
|
| Opening
balance |
|
22,828,947 |
13,344,476 |
|
| Exchange
adjustments |
|
-- |
-- |
|
| Charge
for the year |
|
2,938,747 |
9,586,973 |
|
| Amounts
written off -note 7.3 |
|
(157,495) |
(102,502) |
|
| Reversals |
|
(601,119) |
-- |
|
| Other
movements |
|
-- |
-- |
|
|
---------- |
---------- |
|
| Closing
balance |
|
25,009,080 |
22,828,947 |
|
|
========== |
========== |
|
|
|
|
| Advances
to bank |
|
-- |
-- |
|
| Advances
to bank |
|
25,009,080 |
22,828,947 |
|
|
---------- |
---------- |
|
|
25,009,080 |
22,828,947 |
|
|
| 8.
OPERATING FIXED ASSETS |
|
|
|
|
|
|
|
C O S T |
|
|
DEPRECIATION |
|
Book value |
Rate of |
|
| Particulars |
|
As at July |
Additions |
As at June |
As at July |
Change for |
Accum. Dep. |
As at June |
As at June |
Depreciation |
|
|
01, 1998 |
(deletions) |
30, 1999 |
01, 1998 |
the year |
on Deletions |
30, 1999 |
30, 1999 |
% |
|
|
| Land
- freehold |
5,590 |
-- |
5,590 |
-- |
-- |
-- |
-- |
5,590 |
-- |
|
| -
leasehold |
|
6,075 |
-- |
6,075 |
-- |
-- |
-- |
-- |
6,075 |
-- |
|
| Building
on freehold land |
159,709 |
15,769 |
174,105 |
20,258 |
2,427 |
(1,046) |
21,639 |
152,466 |
5 |
|
|
(1,373) |
|
| Buildings
on leasehold land |
119,092 |
1,407 |
120,499 |
55,681 |
3,194 |
-- |
58,875 |
61,624 |
5 |
|
| Furniture, Fixture and |
|
| office
equipment |
310,770 |
1,511 |
312,056 |
230,362 |
13,327 |
(4,840) |
238,849 |
73,207 |
10-20 |
|
|
(225) |
|
| Vehicles |
|
353,981 |
24,970 |
372,085 |
289,962 |
22,890 |
(9,973) |
302,879 |
69,206 |
20 |
