| Doha Bank Limited |
|
|
|
|
|
|
|
|
|
| Annual
Report 1999 |
|
| (INCORPORATED
IN THE STATE OF QATAR) |
|
| Pakistan
Branches |
|
|
|
| Auditors'
Report to the Directors |
|
|
| We
have audited the annexed balance sheet of DOHA BANK LIMITED - PAKISTAN
BRANCHES as at |
|
| December
31, 1999 and the related profit and loss account and the cash flow statement,
together with the |
|
| notes
forming part 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 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 of DOHA BANK LIMITED -
PAKISTAN |
|
| 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
accor- |
|
| dance
with accounting policies consistently applied; except for the change in
accounting policy |
|
| referred
to in note 3 to the financial statements, 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 |
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| 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 bal- |
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| ance
sheet and the profit and loss account and the cash flow statement, together
with the notes form- |
|
| ing
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
Branches' affairs as at December 31, 1999 and its true balance of the loss
and the cash flow |
|
| statement
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. |
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|
|
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|
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|
Sd/- |
|
| Karachi - |
|
|
FORD, RHODES, ROBSON, MORROW |
|
| February
2, 2000 |
|
Chartered Accountants. |
|
|
|
|
|
| BALANCE
SHEET AS AT DECEMBER 31, 1999 |
|
|
|
|
Note |
1999 |
1998 |
|
|
|
|
Rupees in
'000 |
|
|
|
|
| ASSETS |
|
|
|
| CASH |
|
5 |
977,825 |
817,588 |
|
| BALANCES
WITH OTHER BANKS |
|
6 |
12,087 |
14,561 |
|
| MONEY
AT CALL AND SHORT NOTICE |
|
|
50,000 |
50,000 |
|
| INVESTMENTS |
|
7 |
9,770 |
150,210 |
|
| ADVANCES
- NET OF PROVISION |
|
8 |
1,641,537 |
1,492,667 |
|
| OPERATING
FIXED ASSES |
|
9 |
7,574 |
4,162 |
|
| CAPITAL
WORK IN PROGRESS - PROPERTY |
|
10 |
128,400 |
128,400 |
|
| OTHER ASSES |
|
11 |
295,128 |
263,478 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
3,122,321 |
2,921,066 |
|
|
|
|
| LIABILITIES |
|
|
|
| DEPOSITS
AND OTHER ACCOUNTS |
|
12 |
2,337,420 |
1,877,555 |
|
| BORROWINGS
FROM OTHER BANKS, AGENTS ETC. |
13 |
347,647 |
589,501 |
|
| BILLS
PAYABLE |
|
|
7,004 |
6,039 |
|
| OTHER
LIABILITIES |
|
14 |
834,414 |
722,808 |
|
|
|
|
------------------ |
------------------ |
|
|
|
3,526,485 |
3,195,903 |
|
|
|
------------------ |
------------------ |
|
| NET ASSETS |
|
(404,164) |
(274,837) |
|
|
|
|
|
|
========== |
========== |
|
|
|
|
|
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| REPRESENTED
BY: |
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|
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| HEAD
OFFICE CAPITAL ACCOUNT |
|
15 |
|
| ACCUMULATED
LOSS |
|
|
(404,164) |
(274,837) |
|
|
|
|
========== |
========== |
|
| MEMORANDUM
ITEMS: |
|
|
|
|
|
|
| BILLS
FOR COLLECTION |
|
16 |
357,972 |
341,276 |
|
| ACCEPTANCES,
ENDORSEMENTS AND OTHER |
|
|
| OBLIGATIONS |
|
|
139,403 |
333,474 |
|
| CONTINGENT
LIABILITIES AND COMMITMENTS |
17 |
|
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
Sd/- |
|
Sd/- |
|
|
AHMED HUSSAIN KHAN |
|
MASOOD HUSSAIN KHAN |
|
|
Chief Manager/Principal Officer |
|
General Manager - Pakistan |
|
|
|
| PROFIT
AND LOSS ACCOUNT FOR THE YEAR ENDED DECEMBER 31, 1999 |
|
|
|
|
Note |
1999 |
1998 |
|
|
|
|
Rupees in
'000 |
|
|
|
|
| Mark-up/Interest
and discount and/or return earned |
|
190,660 |
220,768 |
|
| Less:
Cost/Return on deposits, borrowings etc. |
|
|
307,874 |
296,920 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
(117,214) |
(76,152) |
|
|
|
|
|
|
| Fees,
commissions and brokerage |
|
|
10,622 |
7,867 |
|
| Other
operating income |
|
|
18 |
24,720 |
26,213 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
35,342 |
34,080 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
(81,872) |
(42,072) |
|
|
|
|
|
|
| Operating
expenses: |
|
|
|
|
| Administrative
expenses |
|
|
19 |
49,082 |
61,442 |
|
| Provisions
against non-performing advances |
|
8.2 |
1,458 |
51,982 |
|
| Bad
debts written off directly |
|
|
8.3 |
1,247 |
-- |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
51,787 |
113,424 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
(133,659) |
(155,496) |
|
| Other income |
|
|
20 |
4,332 |
4,266 |
|
|
|
|
------------------ |
------------------ |
|
| Loss
before taxation |
|
|
|
(129,327) |
(151,230) |
|
| Taxation |
|
|
21 |
-- |
-- |
|
|
|
|
------------------ |
------------------ |
|
| Loss
after taxation |
|
|
|
(129,327) |
(151,230) |
|
| Accumulated
(loss) brought forward |
|
|
(274,837) |
(123,607) |
|
|
|
|
------------------ |
------------------ |
|
| Accumulated
loss carried forward |
|
|
(404,164) |
(274,837) |
|
|
|
|
========== |
========== |
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
|
Sd/- |
|
Sd/- |
|
|
AHMED HUSSAIN KHAN |
|
MASOOD HUSSAIN KHAN |
|
|
Chief Manager/Principal Officer |
|
General Manager - Pakistan |
|
|
|
| CASH
FLOW STATEMENT FOR THE YEAR ENDED DECEMBER 31, 1999 |
|
|
|
|
|
1999 |
1998 |
|
|
|
|
Rupees in
'000 |
|
| CASH
FLOW FROM OPERATING ACTIVITIES |
|
|
| Loss
before taxation |
|
|
|
(129,327) |
(151,230) |
|
| Adjustment
for non-cash charges: |
|
|
|
|
| Depreciation |
|
|
|
3,049 |
1,979 |
|
| Provisions
against non-performing advances |
|
|
1,458 |
51,982 |
|
| Gain
on sale of fixed assets |
|
|
|
(932) |
(591) |
|
| Amortization
of deferred cost |
|
|
|
176 |
176 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
3,751 |
53,546 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
(125,576) |
(97,684) |
|
|
|
|
|
|
| (Increase)/decrease
in operating assets: |
|
|
| Government
securities |
|
|
|
140,440 |
252,859 |
|
| Advances |
|
|
|
(150,328) |
99,239 |
|
| Other
assets (excluding advance tax) |
|
|
18,087 |
154,345 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
8,199 |
506,443 |
|
|
|
|
|
|
| Increase/(decrease)
in operating liabilities: |
|
|
| Deposits
and other accounts |
|
|
|
459,865 |
(363,189) |
|
| Bills payable |
|
|
|
965 |
(3,541) |
|
| Other liabilities |
|
|
|
(6,673) |
(22,329) |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
454,157 |
(389,059) |
|
|
|
|
------------------ |
------------------ |
|
| Cash
flow before tax |
|
|
|
336,780 |
19,700 |
|
| Income tax paid |
|
|
|
(49,913) |
(68,135) |
|
|
|
|
------------------ |
------------------ |
|
| Net
cash inflow/(outflow) from operating activities |
|
|
286,867 |
(48,435) |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
| CASH
FLOW FROM INVESTING ACTIVITIES |
|
|
| Fixed
capital expenditure |
|
|
|
(6,514) |
(131,415) |
|
| Sale
proceeds of fixed assets |
|
|
|
986 |
1,019 |
|
|
|
|
------------------ |
------------------ |
|
| Net
cash used investing activities |
|
|
(5,528) |
(130,396) |
|
|
|
|
|
|
| CASH
FLOW FROM FINANCING ACTIVITIES |
|
|
| Borrowings
from other banks, agents etc. |
|
|
(241,854) |
245,216 |
|
| Capital
injected during the year (inclusive of exchange revaluation) |
|
118,278 |
416,636 |
|
|
|
|
------------------ |
------------------ |
|
| Net
cash inflow from financing activities |
|
|
(123,576) |
661,852 |
|
|
|
|
|
------------------ |
------------------ |
|
| Increase
in cash and cash equivalents for the year |
|
157,763 |
483,021 |
|
| Cash
and cash equivalents at the beginning of the year |
|
882,149 |
399,128 |
|
|
|
|
|
------------------ |
------------------ |
|
| Cash
and cash equivalents at the end of the year |
|
|
1,039,912 |
882,149 |
|
|
|
|
========== |
========== |
|
|
|
|
| Cash
and cash equivalents |
|
|
|
| Cash |
|
|
|
977,825 |
817,588 |
|
| Balances
with other banks |
|
|
|
12,087 |
14,561 |
|
| Money
at call and short notice |
|
|
|
50,000 |
50,000 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
1,039,912 |
882,149 |
|
|
|
|
========== |
========== |
|
|
|
Sd/- |
|
Sd/- |
|
|
AHMED HUSSAIN KHAN |
|
MASOOD HUSSAIN KHAN |
|
|
Chief Manager/Principal Officer |
|
General Manager - Pakistan |
|
|
|
|
|
| NOTES
TO THE ACCOUNTS FOR THE YEAR ENDED DECEMBER 31, 1999 |
|
|
| 1.
STATUS AND NATURE OF BUSINESS |
|
| Doha
Bank Limited (the Bank") was incorporated in the State of Qatar in 1979
as a Qatari shareholding |
|
| company
under Emiri Decree No. 51 of 1978. The Bank is engaged in commercial banking
services |
|
| and
operates through its Head Office and branches established in Qatar, The
United States of America |
|
| and
at Karachi and Lahore in Pakistan. |
|
|
|
|
|
|
| 2.
BASIS OF PRESENTATION |
|
|
|
| These
financial statements have been prepared in accordance with the requirements
of the State Bank |
|
| of
Pakistan (under the powers conferred upon it under the Banking Companies
Ordinance, 1962) to |
|
| conform
with BPRD Circular No. 31 dated August 13, 1997. |
|
|
|
|
|
| 3.
CHANGE IN ACCOUNTING POLICY |
|
|
| From
the current year, in these financial statements, Head Office expenses have
not been accounted |
|
| for.
This change has been made to reflect a more realistic position in the
financial statements. Had this |
|
| change
not been made, there would have been an increase in loss before taxation by
Rs. 13.8 million. |
|
|
| 4.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
|
|
|
|
| 4.1
Accounting convention |
|
|
|
| These
financial statements are prepared under the historical cost convention. |
|
|
| 4.2
Staff retirement benefits |
|
|
|
| The
bank operates an approved contributory provident fund scheme for all
permanent employees. |
|
| Contributions
are made monthly in accordance with fund rules. |
|
|
|
| 4.3 Taxation |
|
|
|
|
|
| -- Current |
|
|
| Provision
for current taxation is based on the assessable income for the year after
taking into |
|
| account
tax credits available, if any. |
|
|
|
| --
Deferred |
|
|
|
| Deferred
taxation is computed and recorded, on all material temporary timing
differences. |
|
| Deferred
tax debits are not accounted for. |
|
|
|
|
|
| 4.4 Investments |
|
|
|
| Investments
in government securities are stated at cost. Profits and losses arising on
disposals are |
|
| taken
to income currently. |
|
|
|
|
|
|
| The
bank also enters into transactions of repo/reverse repo of securities at
contracted rates for specific |
|
| periods
of time. These are recorded as follows: |
|
|
|
|
| (a)
In the case of sale under repurchase obligations the securities are deleted
from the books at cost |
|
| and
the charges arising from the differential in sale and repurchase values are
accrued on a pro- |
|
| rata
basis and recorded as expense. Upon repurchase the securities are reinstated
at their |
|
| respective
original cost. |
|
|
|
| (b)
In the case of purchase under resale obligation the securities are booked at
the contracted pur- |
|
| chase
price and the differential of the contracted purchase and resale price is
amortized over the |
|
| period
of their contract and recorded as income. |
|
|
|
| 4.5 Advances |
|
|
|
| Loans
and advances are stated at their' principal amounts, net of the provision for
loan losses. The spe- |
|
| cific
provisions for possible loan losses have been made as considered necessary
after taking into con- |
|
| sideration
the realizable value of assets held by the bank as security. |
|
|
|
|
|
| 4.6
Operating fixed assets and depreciation |
|
|
|
| Fixed
assets are stated at cost less accumulated depreciation. Depreciation is
computed over the useful |
|
| lives
of the related assets and charged to income applying the straight line
method. Full year's deprecia- |
|
| tion
is charged for assets purchased before June 30 and half-year depreciation is
charged for assets |
|
| purchased
after June 30. Gains or losses on disposal of fixed assets are included in
income currently. |
|
| Normal
repairs and maintenance are charged to income as and when incurred. |
|
|
|
| 4.7
Revenue recognition |
|
| Mark-up/return
on advances and investments is recognized on an accrual basis, except if
recovery is |
|
| considered
doubtful. Commission is recognized on a receipt basis. |
|
|
| 4.8
Foreign currencies translation |
|
|
|
| Foreign
currency balances are translated into Pakistan rupees at the relevant rate of
exchange at the |
|
| balance
sheet date or where appropriate at contractual rate. Exchange gains or losses
on translation |
|
| are
included in income currently. |
|
|
|
|
|
|
|
|
1999 |
1998 |
|
|
|
|
|
Rupees in
'000 |
|
|
|
|
|
|
| 5. CASH |
|
|
|
| In
hand - local currency |
|
|
25,561 |
22,719 |
|
| - foreign currencies |
|
|
17,357 |
38,758 |
|
| With
State Bank of Pakistan in: |
|
|
|
| Special
deposit account |
|
|
|
|
| Capital
deposited in foreign currency |
|
744,165 |
625,887 |
|
| Placement
of foreign currency deposits |
|
77,843 |
-- |
|
| Current account |
|
|
|
|
112,899 |
130,224 |
|
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
977,825 |
817,588 |
|
|
|
|
========== |
========== |
|
|
|
|
|
|
| 6.
BALANCES WITH OTHER BANKS |
|
|
| In Pakistan |
|
|
|
|
| current account |
|
|
|
|
1,889 |
6,466 |
|
| Outside
Pakistan |
|
|
|
| current
accounts |
|
|
|
10,198 |
8,095 |
|
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
12,087 |
14,561 |
|
|
|
|
========== |
========== |
|
|
|
|
|
|
| 7.
INVESTMENTS - at cost |
|
|
|
| Investment
securities - unquoted |
|
|
|
| Federal
and Provincial Government Securities |
|
|
|
|
| Federal
Investment Bonds - note 7.1 |
|
|
9,770 |
39,060 |
|
| Market
Treasury Bills |
|
|
|
-- |
111,150 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
9,770 |
150,210 |
|
|
|
|
========== |
========== |
|
|
|
|
|
|
| Book
value of unquoted investments - Rs. 9.770 million (1998: Rs. 150.210
million). |
|
|
|
|
|
|
|
|
| 7.1
Investments of the face value of Rs. 10.0 million (1998: Rs. 10.0 million)
are pledged with the State |
|
|
| Bank
of Pakistan against TT/DD discounting facilities granted by them. |
|
|
|
|
|
|
|
|
| 8. ADVANCES |
|
|
|
|
|
| Loans,
cash credits, overdrafts etc: |
|
|
|
|
| In Pakistan |
|
|
|
1,800,431 |
1,679,301 |
|
| Bills
discounted and purchased |
|
|
|
|
|
| (excluding
Government Treasury Bills) |
|
|
|
|
| Payable
in Pakistan |
|
|
|
5,997 |
8,973 |
|
| Payable
outside Pakistan |
|
|
|
109,449 |
77,276 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
115,446 |
86,249 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
1,915,877 |
1,765,550 |
|
| Provision
for non-performing advances - note 8.2 |
|
|
(274,340) |
(272,883) |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
1,641,537 |
1,492,667 |
|
|
|
|
========== |
========== |
|
|
|
|
|
|
|
1999 |
1998 |
|
|
|
|
Rupees in
'000 |
|
|
|
|
| 8.1
Particulars of advances |
|
|
| In
local currency |
|
1,532,088 |
1,415,391 |
|
|
|
| In
foreign currencies |
|
109,449 |
77,276 |
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
1,641,537 |
1,492,667 |
|
|
|
|
|
========== |
========== |
|
|
|
|
|
|
| Debts
considered good in respect of which the bank |
|
|
| is fully secured |
|
|
1,504,570 |
1,264,186 |
|
|
|
|
|
| Debts
considered good for which the bank holds no |
|
|
| other
security than the debtors' personal security |
|
27,531 |
50,087 |
|
|
|
|
| Debts
considered good secured by the personal liabilities |
|
| of
one or more parties in addition to the personal security |
|
| of the debtors |
|
|
|
109,436 |
178,394 |
|
|
|
|
------------------ |
------------------ |
|
|
|
1,641,537 |
1,492,667 |
|
|
|
|
========== |
========== |
|
|
|
|
|
|
Maximum total amount of |
|
|
|
|
|
advances including |
|
|
Balance outstanding |
|
temporary advances granted |
|
|
December 31, 1999 |
|
during the year |
|
|
|
|
Rupees in '000 |
|
|
|
|
| Debts
due by executives of the bank |
|
| or
any of them either severally or |
|
|
| jointly
with any other persons |
|
1,686 |
|
1,842 |
|
|
| 8.2
Particulars of provision against non-performing advances |
|
|
|
|
|
|
|
1999 |
1998 |
|
|
|
|
|
|
|
Rupees in
'000 |
|
|
|
|
|
|
|
|
| Specific |
|
|
|
|
|
| Opening
balance |
|
272,883 |
222,390 |
|
|
|
| Charge
for the year |
|
7,004 |
107,305 |
|
|
|
| Amount
written off - note 8.3 |
|
-- |
(1,489) |
|
|
|
| Reversals |
|
(5,546) |
(55,323) |
|
|
|
| Other
movements |
|
-- |
-- |
|
|
|
|
|
|
------------------ |
------------------ |
|
|
274,340 |
272,883 |
|
|
|
|
========== |
========== |
|
| Closing
balance |
|
|
|
| Provisions
against: |
|
|
| Advances
to banks |
|
-- |
-- |
|
| Advances
to others |
|
274,340 |
272,883 |
|
|
|
------------------ |
------------------ |
|
|
|
274,340 |
272,883 |
|
|
|
|
========== |
========== |
|
|
|
| 8.3
Amount written off during the year |
|
| In
terms of Sub-Section (3) of section 33A of the Banking Companies Ordinance,
1962 the statement in |
|
| respect
of written-off loans or any other financial relief of five hundred thousand
or above allowed to a |
|
| person(s)
during the year ended 31st December 1999 is given in Annexure-1. |
|
|
|
|
| 9.
OPERATING FIXED ASSETS |
|
|
|
|
COST |
|
DEPRECIATION |
|
Book value |
|
|
|
|
At |
At |
|
At |
at |
Rate of |
|
|
At January |
Additions/ |
December |
January |
Charge for |
December |
December |
Depreciation |
|
|
1, 1999 |
(deletions) |
31, 1999 |
1, 1999 |
the year |
31, 1999 |
31, 1999 |
% |
|
|
|
Rupees in
'000 |
|
| Lease hold |
|
| improvements |
|
-- |
1,344 |
1,344 |
-- |
317 |
317 |
1,027 |
25 |
|
