Welcome to PakSearch.com Pakistan's Premier Business Information Service


For business information, annual reports, laws, ordinances, regulations and articles.




Google
 
Web Paksearch.com
Askari Commercial Bank
The Security Bank -- A Name to Trust
Annual Report 1999
Head Office: AWT Plaza, The Mall,
P.O. Box No. 1084, Rawalpindi-Pakistan
Tel: (051) 518117 Fax: (051) 563704 UAN (City Code) 111-000-786
Auditors' Report to the Members
We have audited the annexed balance sheet of Askari Commercial Bank Limited ("the Bank") as at 
31 December 1999 and the related profit and loss account and the statement of changes in financial
position, 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 ten branches which have
audited by us and we state that we have obtained all the informations and explanations which
to the best of our knowledge and belief were necessary for the purposes of our audit and after the
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 purpose 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 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 and the statement of changes in financial position
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 31 December 1999 and its true balance of
the profit and the changes in financial position 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 Bank and deposited in the Central Zakat Fund established under section 7 of that
Ordinance.
Islamabad Taseer Hadi Khalid,
February 14, 2000 Chartered Accountant
Balance Sheet
as at December 31, 1999
1999 1998
Note (Rupees (Rupees
in '000) in '000)
Assets
Cash 4 3,035,275 2,302,964
Balances with other banks 5 1,265,147 226,160
Money at call and shod notice 2,910,000 975,000
Investments 6 8,678,879 13,888,475
Advances 7 13,056,146 9,708,350
Operating fixed assets 8 464,633 340,965
Capital work in progress 9 71,193 159,622
Other assets 10 1,545,572 1,129,567
--------------- ---------------
31,026,845 28,731,103
Liabilities
Deposits and other accounts 11 24,357,594 23,413,153
Borrowings from other banks, agents etc. 12 3,243,678 2,316,400
Bills payable 217,651 213,839
Other liabilities 13 891,219 725,414
Liabilities against assets subject
to finance lease 14 37,282 55,732
Deferred liability for taxation 22 233,000 70,000
--------------- ---------------
28,980,424 26,794,538
--------------- ---------------
Net assets 2,046,421 1,936,565
--------------- ---------------
Represented By:
Share capital 15 986,226 986,226
Reserve fund & other reserves 16 1,059,675 949,775
Un-appropriated profit 520 564
--------------- ---------------
Shareholders' equity 2,046,421 1,936,565
========= =========
Memorandum Items:
Bills for collection 17 4,949,349 4,594,316
Acceptance, endorsements and
other obligations 4,272,083 1,906,859
Contingent liabilities and commitments 18 -- --
The annexed notes form an integral part of these accounts.
Zafar Alam Khan Sumbal  Kalim-ur-Rahman   Lt. Gen. (R)Mohammad Afsar  Lt. Gen. Amjad Shuaib
Director President & Chief Executive Director Chairman
Rawalpindi
February 14, 2000
Profit and Loss Account
for the year ended December 31, 1999
1999 1998
Note (Rupees (Rupees
in'000) in '000)
Mark up / interest and discount and/or
return earned 3,350,131 3,475,421
Less: Cost/return on deposits, borrowing etc. 2,485,796 2,510,671
--------------- ---------------
864,335 964,750
Fees, commission & brokerage 318,567 288,371
(Loss)/Profit from investment securities (19) 4,289
Dividend income 8,827 5,634
Other operating income 19 207,089 261,244
--------------- ---------------
534,464 559,538
--------------- ---------------
1,398,799 1,524,288
Operating expenses
Administrative expenses 20 588,595 569,061
Provisions against non-performing advances 7.2 102,004 60,600
Provision for diminution in value
of investments -- 40,600
Debts written off directly 7.4 23 20
--------------- ---------------
690,622 670,281
--------------- ---------------
708,177 854,007
Other income 21 4,269 127
--------------- ---------------
Profit before taxation 712,446 854,134
Taxation -Current 267,000 425,000
- Deferred 22 163,000 70,000
--------------- ---------------
430,000 495,000
--------------- ---------------
Profit after taxation 282,446 359,134
Un-appropriated profit brought forward 564 675
--------------- ---------------
Profit available for appropriation 283,010 359,809
Appropriations
Transfer to reserve for contingencies 50,000 90,000
Transfer to general reserve 2,000 --
Transfer to statutory reserve 57,000 72,000
Proposed dividend @ 17.5%  (1998: @ 20%) 172,590 197,245
--------------- ---------------
282,490 359,245
--------------- ---------------
Un-appropriated profit carried forward 520 564
========= =========
Earnings Per Share-(Rupees) 2.86 3.64
========= =========
The annexed notes form an integral part of these accounts.
Zafar Alam Khan Sumbal  Kalim-ur-Rahman Lt. Gen. (R) Mohammad Afsar  Lt. Gen. Amjad Shuaib
Director President & Chief Executive  Director Chairman
Rawalpindi
February 14, 2000
Statement of Changes in Financial Position
for the year ended December 31, 1999
1999 1998
(Rupees (Rupees
in'000) in '000)
Cash Flow From Operating Activities
Profit before taxation 712,446 854,134
Add/Less: Loss/(Profit) from investment securities 19 (4,289)
Dividend income (8,827) (5,634)
--------------- ---------------
703,638 844,211
Adjustments:
Depreciation 68,411 632,241
Provision for diminution in the value of investments -- 40,600
Provisions against non-performing advances 102,004 60,600
Net profit on sale of fixed assets (4,269) (127)
Finance charge on leased assets 9,268 13,469
--------------- ---------------
175,414 177,766
(Increase)/decrease in operating assets
Government securities 5,432,936  '(1,785,429)
Advances (3,449,800) (632,563)'
Other assets (98,869)  (77,075)
--------------- ---------------
1,884,267 (2,495,067)
Increase/(decrease) in operating liabilities 944,441 3,931,251
Deposits & other accounts 38,121 (67,716)
Other liabilities 1,904,601 144,224
--------------- ---------------
1,138,713 4,007,759
--------------- ---------------
Cash flow before tax 3,902,032 2,534,669
Income tax paid (584,136) (619,467)
--------------- ---------------
Net cash flow from operating activities 3,317,896 1,915,202
Cash Flow From Investing Activities
Purchase of investments other than
Government securities (302,292) (396,017)
Net proceeds from sale of investments/
redemption of term finance certificates 78,933 30,917
Dividend income 8,827 5,634
Fixed capital expenditure (105,743) (84 442)
Sale proceeds of fixed assets 6,362 708
--------------- ---------------
Net cash used in investing activities (313,913) (443,200)
--------------- ---------------
carried forward 3,003,983 1,472,002
brought forward 3,003,983 1,472,002
Cash Flow From Financing Activities
Borrowings from other banks, agents' etc. 927,278 358,175
Payment of lease obligations (44,083) (41,554) 
Leases during the year 16,365 11,314
Dividends paid (197,245) (117,408)
--------------- ---------------
Net cash flow from financing activities 702,315 210,527
Increase in cash & cash equivalents
for the year 3,706,298 1,682,529
Cash & cash equivalents at the beginning of the year 3,504,124 1,821,595
--------------- ---------------
Cash & cash equivalents at the end of the year 7,210,422 3,504,124
========= =========
Cash & cash equivalents
Cash 3,035,275 2,302,964
Balances with other banks 1,265,147 226,160
Money at call and shod notice 2,910,000 975,000
--------------- ---------------
7,210,422 3,504,124
========= =========
The annexed notes form an integral pad of these accounts. 
Zafar Alam Khan Sumbal  Kalim-ur-Rahman Lt. Gen. (R) Mohammad Afsar  Lt. Gen. Amjad Shuaib
Director President & Chief Executive  Director Chairman
Notes to the Accounts
for the year ended December 31, 1999
1. STATUS AND NATURE OF BUSINESS
Askari Commercial Bank Limited ("the Bank") was incorporated in Pakistan on October
09, 1991 as a Public Limited Company, and is listed on the Karachi, Lahore & Islamabad
Stock Exchanges. The Bank obtained its business commencement certificate on
February 26,1992 and started operations from April 01,1992.
The Bank is a scheduled commercial bank and is principally engaged in the business of
banking as defined in the Banking Companies Ordinance, 1962.
2. BASIS OF PRESENTATION
2.1 In accordance with the directives of the Federal Government regarding shifting of
the banking system to Islamic modes, the State Bank of Pakistan has issued a
number of circulars. One permissible form of trade related mode of financing
comprises of purchase of goods by the banks from their customers and resale to
them at appropriate mark-up in price on deferred payment basis. The purchases
and sales arising under these arrangements are not reflected in these accounts as
such but are restricted to the amount of facilities actually utilized and the
appropriate portion of mark-up thereon.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
·
3.1. Statement of compliance
These accounts have been prepared in accordance with the accounting standards
issued by the International Accounting Standards Committee ("IASC") and
interpretation issued by the Standing Interpretation Committee of the IASC, as
applicable in Pakistan and the requirements of the Banking Companies Ordinance,
1962 and the Companies Ordinance, 1984.
3.2 Accounting Convention
These accounts have been prepared using the historical cost convention in conformity
with the accepted practice of banking institutions in Pakistan.
3.3 Fixed Assets
a) Owned
Fixed assets are stated at cost less accumulated depreciation. Capital work in
progress is stated at cost. Depreciation is computed over the estimated useful
lives of the related assets at varying rates, as set out in note 8. The cost of assets is
depreciated on the diminishing balance method, except for vehicles, carpets and
renovation costs which are depreciated on a straight line basis. Depreciation is 
charged for the full month on purchase / acquisition of an asset while no
depreciation is charged in the month of disposal of an asset.
Maintenance and normal repairs are charged to income as and when incurred.
Major renewals and improvements are capitalized. Gains and losses on disposal 
of fixed assets are taken to the profit and loss account.
b) Leased
Assets held under finance lease are accounted for by recording the assets and  
related liabilities at the amounts determined on the basis of lower of fair value of
the assets and the present value of minimum lease payments. Finance charge is
allocated to accounting periods in a manner so as to provide a constant periodic rate of charge on the outstanding
liability. Depreciation is charged on leased assets on the basis similar to that of owned assets.
3.4 Staff Retirement Benefits
Defined benefit plan
The Bank operates a funded gratuity scheme for its employees who complete a qualifying service period. Annual
contribution to gratuity fund is charged to income for the year. The actuarial valuation of the scheme under the Projected
Unit Credit method has been carried out at December 31, 1999. The valuation results show that sufficient funds were
transferred by the Bank to the scheme for meeting the actuarial liability of the scheme.
The significant assumptions used in the actuarial valuation are as follows:
* Expected salary increase - 13%
* Expected rate of return on funds invested - 14%
The fair value of the Plan's assets and liabilities for past services of the employees at the valuation date was Rs. 46.439
million and Rs. 44.943 million respectively.
Future contributions will be made to the scheme on the basis of actuarial recommendations.
Defined contribution plan
The Bank also operates a recognised provident fund scheme for all its permanent employees for which equal monthly
contributions are made both by the company and by the employees to the fund at the rate of 8.33% of basic pay.
3.5 Taxation
Current tax is the expected tax payable on the taxable income for the year using tax rates inacted at the balance sheet date
and any adjustment to tax payable for previous years.
Deferred tax is provided using the balance sheet liability method providing for temporary differences between the carrying
amounts of assets and liabilities for financial reporting purposes and the amount used for taxation purposes. The amount
of deferred tax provided is based on the expected manner of realization or settlement of the carrying amount of assets and
liabilities using tax rates enacted at the balance sheet date. A deferred tax asset is recognised only to the extent that it is
probable that future taxable profit will be available and credits can be utilised. Deferred tax assets are reduced to the extent
that it is no longer probable that the related tax benefit will be realized.
3.6 Investments
Investments are stated at cost, net of provisions determined by management for diminution in value.
Profits and losses on sale of investments are dealt with through the profit and loss account in the year in which these arise.
Premium/discount on purchase of investments are amortized over the term of such investments.,
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:
a) In case of sale under re-purchase obligations, 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 under cost/return on deposits,
borrowings etc'. Upon re-purchase the securities are re-instated at their respective original cost.
b) In the case of purchases under re-sale obligations, the securities are booked at the contracted purchase price and the
differential of the contracted purchase price and re-sale prices is amortised over the period of their contract and
recorded under mark-up/interest and discount and/or return earned.
3.7 Advances
Advances are stated net of provisions for non-performing advances. Provision for non-performing advances is
determined by the management keeping in view the requirements of the Prudential Regulations issued by the State Bank of
Pakistan Advances are written off when there is no realistic prospect of recovery.
3.8 Foreign Currencies
Assets and liabilities in foreign currencies are translated into Pak Rupees at the rates 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 are taken to the profit and loss account.
3.9 Revenue Recognition
Income is recognized on accrual basis except for income which is required to be carried forward in compliance with the
Prudential Regulations issued by the State Bank of Pakistan.
1999 1998
(Rupees) (Rupees)
in '000) in '000)
4. Cash
In hand - local currency 331,522 297,515
- foreign currencies 230,627 128,887
--------------- ---------------
562,149 426,402
With State Bank of Pakistan in:
Special deposit account
Foreign currency placement 1,063,852 --
Current account - Note 4.1 1,374,719 1,855,495
--------------- ---------------
2,438,571 1,855,495
With National Bank of Pakistan in current account 34,555 21,067
--------------- ---------------
3,035,275 2,302,964
========= =========
4.1 This represents statutory cash reserve maintain under section 22 of
Banking Companies Ordinance, 1962
5. BALANCES WITH OTHER BANKS
In Pakistan
Current Accounts 32,607 19,869
Deposit Accounts 320,000 --
--------------- ---------------
262,607 19,864
Outside Pakistan
Current Accounts 97,643 61,485
Deposit Accounts 904,897 144,806
--------------- ---------------
1,002,540 206,291
--------------- ---------------
1,265,147 226,160
========= =========
6. INVESTMENTS (at cost less provisions)
Investment Securities:
Federal and Provincial Government Securities
Federal Investment Bonds 2,484,862 2,348,485
GOP Market Treasury Bills 5,481,616 11,050,929
--------------- ---------------
7,966,478 13,399,414
Investment in subsidiary companies and associated undertakings- Note 6.1 7,500 7,500
Fully paid up ordinary shares
Listed companies 88,233 88,233
Unlisted companies -- --
--------------- ---------------
88,233 88,233