| Bolan Bank Limited |
|
|
|
|
|
|
|
|
| Annual
Report 1997 |
|
|
|
|
| CONTENTS |
|
| Corporate
Information |
|
| Chairman's
Review |
|
| Directors'
Report |
|
| Auditors'
Report |
|
| Balance
Sheet |
|
| Profit
and Loss Account |
|
| Cash
Flow Statement |
|
| Notes
to the Accounts |
|
| Notice
of Annual General Meeting |
|
| Pattern
of Shareholdings |
|
| Offices
/ Branch Network |
|
|
|
| CORPORATE
INFORMATION |
|
| BOARD
OF DIRECTORS |
|
|
| Mr.
Javed Yunus |
|
| Chairman |
|
|
| Mr.
Mirza Ghulam Mustafa |
|
| Vice
Chairman |
|
|
| Mr.
Pervez Yunus |
|
| Mr.
Naved Yunus |
|
| Mr.
Maheen Yunus |
|
| Mrs.
R.J. Yunus |
|
| Mrs.
S.P.Yunus |
|
| Mrs.
Arabteen Naved Yunus |
|
| Mrs.
Najmus Sehar Mustafa |
|
| Mr.
Mirza Ghulam Mujtaba |
|
| Mr.
Syed ljaz Hussain Shah |
|
| Mr.
Ziaul Hasan Laj |
|
| Mr.
A.K.M. Sayeed (NIT Nominee) |
|
|
| SECRETARY |
|
| Mr.
Shabbir Ali Kanchwala |
|
|
| MANAGEMENT |
|
| Mr.
Syed ljaz Hussain Shah |
|
| President
& Chief Executive |
|
|
| Mr.
Ziaul Hasan Laj |
|
| Managing
Director |
|
|
| AUDITORS |
|
| Taseer
Hadi Khalid & Co. |
|
| Chartered
Accountants |
|
|
| Taher
Moochhala & Co. |
|
| Chartered
Accountants |
|
|
| SHARE
REGISTRARS |
|
| Bema
Associates (Private) Limited |
|
| 515,Qamar
House, |
|
| M.A.
Jinnah Road, Karachi. |
|
|
|
|
| CHAIRMAN'S
REVIEW |
|
|
| it
is a pleasure for me to present to you the 6th Annual Report of Bolan Bank
Limited |
|
| for
the year ended December 31, 1997. |
|
|
| Performance
Review |
|
|
| Our
Bank continued to make satisfactory progress on sound footing in all areas of
its |
|
| operation
despite unprecedented recession in our economy during the year under |
|
| review.
Under the circumstances, your bank adopted a cautious approach with strict |
|
| monitoring
of its risk assets, care in deployment of funds and controlled expenses. |
|
|
| The
highlights of your Bank are as follows:- |
|
|
|
|
|
(Rupees in Million) |
|
|
1997 |
1996 |
Increase/ |
% age |
|
|
|
(Decrease) |
|
| 1.
Paid up Capital |
|
322.500 |
300.000 |
22.500 |
7.50 |
|
| 2.
Shareholders Equity |
442.453 |
407.236 |
35.217 |
8.64 |
|
| 3.
Total Assets |
|
6507.429 |
4055.544 |
2451.885 |
60.46 |
|
| 4.
Deposits |
|
5761.170 |
3445.099 |
2316.071 |
67.22 |
|
| 5.
Advances |
|
3139.256 |
1974.338 |
1164.918 |
59.00 |
|
| 6.
Investments |
|
1440.842 |
660.738 |
780.104 |
118.06 |
|
| 7.
Import/Export Business |
2268.000 |
2936.000 |
(668.000) |
(22.75) |
|
| 8.
Pre- Tax Profit |
|
70.217 |
88.130 |
(17.913) |
(20.32) |
|
|
| During
the year under review, deposits have increased by Rs. 2,316.071 Million i.e.
by |
|
| 67.22%
total advances have increased by Rs. 1,164.918 Million i.e. 59% and total |
|
| investments
have increased by Rs.780.104 Million i.e. 118.06% as compared to the |
|
| previous
year. Under the present circumstances a pretax profit of 70.217 Million for
the |
|
| year
1997 showing a decrease of 20.32% is due to fall in our foreign trade
business by |
|
| Rs.
668 Million i.e. 22.75% as compared to the previous year as it has been the
main |
|
| business
of our Bank. |
|
|
| Further,
we have issued bonus shares @ 7.5% per share to our shareholders during the |
|
| year
as a result of which paid up capital has increased by RS.22.500 Million
making total |
|
| to
RS.322.500 Million. |
|
|
| lnshallah,
we are hopeful that the Bank will be able to improve its growth in 1998 |
|
| subject
to upturn in import and export trade of the country. |
|
|
| Branch
Network |
|
|
| The
key branches of the bank are acquired in strategic and thriving markets on |
|
| ownership
basis giving a boost to the assets structure of the bank. The long term |
|
| expansion
programme of our branch network is the indispensable factor in' widening |
|
| our
scope of commercial banking activities across the country through all stratas
of the |
|
| population.
By the grace of "Almighty Allah" today in respect of branch
network, Bolan |
|
| Bank
is leading among new commercial banks with 50 branches all across the
country. |
|
| All
these branches are fully automated/computerized and providing full range of
banking |
|
| services.
Customers service and convenience is on top of our priorities. It is our |
|
| organizational
commitment to facilitate our client with zeal enthusiasm, respect and |
|
| financial
integrity. |
|
|
| Gratitude |
|
|
| I
wish to place on record my sincere thanks to all our Account Holders for
their |
|
| wholehearted
support and confidence in our bank. I would also like to appreciate the |
|
| hard
work devotion and commitment of all our Executives, Officers and staff who
are |
|
| running
this bank. |
|
|
| I
would also like to express my deepest gratitude and thanks to the Ministry of
Finance |
|
| and
the State Bank of Pakistan for the invaluable guidance and support available
at all |
|
| times
to run our Bank within the frame work of the Prudential Regulations and on
sound |
|
| financial
lines. |
|
|
| May
Allah Almighty bless you all. |
|
|
| Quetta:
March 09,1998. |
|
|
|
|
| DIRECTORS'
REPORT TO SHAREHOLDERS |
|
|
| Your
Directors are pleased to present the 6th Annual Report of the bank together
with Audited |
|
| Accounts
and Auditors' Report thereon for the year ended December 31, 1997. The Bank's |
|
| financial
results are as follows:- |
|
|
|
|
(Rupees) |
|
|
| Profit
for the year before taxation |
|
70,216,631 |
|
| Taxation |
|
|
| Current |
|
|
32,000,000 |
|
| Deferred |
|
|
3,000,000 |
|
|
|
|
---------- |
|
|
|
|
35,000,000 |
|
|
|
|
---------- |
|
| Profit
after taxation |
|
35,216,631 |
|
| Unappropriated
Profit brought forward |
|
136,207 |
|
|
|
|
---------- |
|
| Profit
available for appropriation |
|
35,352,838 |
|
|
|
|
| Transfer
to statutory reserve |
|
7,100,000 |
|
| Transfer
to revenue reserve |
|
28,000,000 |
|
|
|
|
---------- |
|
|
|
|
35,100,000 |
|
|
|
|
---------- |
|
| Balance
carried forward |
|
252,838 |
|
|
|
|
========== |
|
| Earning
per share (Before tax) |
|
2.18 |
|
|
========== |
|
| Auditors |
|
|
| The
retiring auditors M/s Taseer Hadi Khalid & Co. Chartered Accountants and
M/s Taher |
|
| Moochhala
& Co. Chartered Accountants being eligible, offer themselves for
re-appoinment. |
|
|
| Pattern
Of Share Holding |
|
| A
statement showing the pattern of share holding of the company as at December
31, 1997 |
|
| is
annexed with the report. |
|
|
| Thanks |
|
|
| The
Board thanks all Executives, Officers and Staff of our Bank for their loyalty
and dedicated |
|
| services
to implement our Bank's policies to make Bolan Bank a truly progressive,
strong and |
|
| dependable
Financial Institution. |
|
|
| Quetta:
March 09, 1998. |
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed balance sheet of Bolan Bank Limited as at 31
December, 1997 |
|
| and
the related profit and loss account and cash flow statement together with the
notes |
|
| forming
part thereof , for the year then ended, in which are incorporated the
unaudited |
|
| certified
returns from the branches excepts for thirteen branches which have been
audited by |
|
| us
arid, 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 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 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; |
|
|
| the
expenditure incurred during the year was for the purpose of the Bank's |
|
| ii)
business; and |
|
|
| the
business conducted, investments made and the expenditure incurred during the |
|
| iii)
year, were in accordance with the objects of the Bank and 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 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
31 December 1997 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 by the Bank and deposited in the Central Zakat fund established
under |
|
| Section
7 of that Ordinance. |
|
|
| Karachi: |
|
| Date
: March 09,1998 |
|
|
|
| Balance sheet |
|
| As
at 31 December. 1997 |
|
|
|
|
Notes |
1997 |
1996 |
|
| Assets |
|
|
| Cash |
|
|
4 |
953,606,568 |
683,140,433 |
|
| Balances
with other banks |
|
|
5 |
62,186,293 |
80,767,505 |
|
| Money
at call and short notice |
|
|
|
|
135,000,000 |
|
| Investments |
|
|
6 |
1,440,841,975 |
660,738,000 |
|
| Advances
net of provision |
|
|
7 |
3,139,255,693 |
1,974,338,413 |
|
| Operating
fixed assets |
|
|
8 |
368,138,120 |
213,356,670 |
|
| Capital
work in progress |
|
|
9 |
149,661,066 |
130,998,858 |
|
| Net
investment in finance lease |
|
|
|
|
|
| Other
assets |
|
|
10 |
393,739,560 |
177,204,288 |
|
|
|
|
|
----------- |
----------- |
|
|
|
|
|
6,507,429,275 |
4,055,544,167 |
|
| Liabilities |
|
|
|
|
|
|
|
|
|
|
|
| Deposits
and other accounts |
|
|
11 |
5,761,170,061 |
3,445,098,602 |
|
| Borrowings
from other banks, agents, etc. |
|
12 |
94,133,936 |
57,662,000 |
|
| Bills
Payable |
|
|
|
135,105,050 |
77,676,888 |
|
| Other
liabilities |
|
|
13 |
71,567,390 |
67,870,470 |
|
| Liability
against assets subject to finance lease |
|
-- |
-- |
|
| Deferred
liability for taxation |
|
3,000,000 |
-- |
|
|
|
|
|
----------- |
----------- |
|
|
|
|
6,064,976,437 |
3,648,307,960 |
|
|
| Net assets |
Rupees |
|
|
442,452,838 |
407,236,207 |
|
| Represented
by : |
|
| Share
capital |
|
14 |
322,500,000 |
300,000,000 |
|
| Reserve
fund and other reserves |
|
15 |
119,700,000 |
107,100,000 |
|
| Unappropriated
profit |
|
|
252,838 |
136,207 |
|
| Surplus
on revaluation of fixed assets |
|
-- |
-- |
|
| Sub-ordinated
debt |
|
-- |
-- |
|
|
----------- |
----------- |
|
| Shareholders
equity |
|
|
Rupees |
442,452,838 |
407,236,207 |
|
|
=========== |
=========== |
|
| Memorandum
Items |
|
| Bills
for collection |
|
16 |
233,757,162 |
211,914,038 |
|
| Acceptances,
endorsements and other obligations |
|
925,485,294 |
700,659,846 |
|
| Contingent
liabilities and commitments |
|
17 |
|
|
| These
accounts should be read in conjunction with the attached notes. |
|
|
|
| Profit
and Loss Account |
|
| For
the year ended 31 December. 1997 |
|
|
|
|
Note |
1997 |
1996 |
|
|
| Mark-up/lnterest
and/or return earned |
|
538,948,370 |
386,645,072 |
|
| Less
: Cost/Return on deposits, borrowings etc. |
|
(296,350,064) |
(197,067,720) |
|
|
|
|
----------- |
----------- |
|
|
|
|
242,598,306 |
189,577,352 |
|
|
| Fees, commissions, exchange |
and |
brokerage income |
|
|
46,349,494 |
83,985,758 |
|
| Other
operating income |
|
18 |
1,223,824 |
1,284,084 |
|
|
|
|
|
----------- |
----------- |
|
|
|
|
47,573,318 |
85,269,842 |
|
|
|
|
----------- |
----------- |
|
|
|
|
290,171,624 |
274,847,194 |
|
| Operating
expenses |
|
|
| Administrative
expenses |
|
19 |
202,967,238 |
181,698,248 |
|
| Provisions
against non-performing advances |
|
7.2 |
18,608,884 |
6,324,060 |
|
|
|
|
----------- |
----------- |
|
|
|
|
(221,576,122) |
(188,022,308) |
|
|
|
|
----------- |
----------- |
|
|
|
68,595,502 |
86,824,886 |
|
|
| Other
income |
|
|
|
20 |
1,621,129 |
1,304,966 |
|
|
|
|
|
|
----------- |
----------- |
|
| Profit
before taxation |
|
|
|
70,216,631 |
88,129,852 |
|
| Taxation
- current |
|
|
|
21 |
32,000,000 |
60,000,000 |
|
|
- deferred |
|
|
|
3,000,000 |
-- |
|
|
|
|
|
|
----------- |
----------- |
|
|
|
|
(35,000,000) |
(60,000,000) |
|
|
----------- |
----------- |
|
| Profit
after taxation |
|
35,216,631 |
28,129,852 |
|
|
| Unappropriated
profit brought forward |
|
|
136,207 |
6,355 |
|
|
|
|
----------- |
----------- |
|
| Profit
available for appropriation |
|
|
35,352,838 |
28,136,207 |
|
|
| Appropriations |
|
|
| Transfer
to : |
|
| Revenue
reserve |
|
'28,000,000 |
10,000,000 |
|
| -
Statutory reserve |
|
|
7,100,000 |
18,000,000 |
|
|
|
|
----------- |
----------- |
|
|
|
|
|
(35,100,000) |
(28,000,000) |
|
|
----------- |
----------- |
|
| Unappropriated profit carried forward |
Rupees |
|
|
252,838 |
136,207 |
|
|
=========== |
=========== |
|
| These
accounts should be read in Conjunction with the attached notes. |
|
|
|
| Cash
Flow Statement |
|
| For
the year ended 31 December, 1997 |
|
1997 |
1996 |
|
| CASH
FLOW FROM OPERATING ACTIVITIES |
|
|
|
|
| Profit
before taxation |
|
70,216,631 |
88,129,852 |
|
| Less
: Profit from investment securities |
|
(171,056,008) |
(124,344,829) |
|
|
|
|
----------- |
----------- |
|
|
|
|
(100,839,377) |
(36,214,977) |
|
| Adjustments
for non-cash charges |
|
|
|
| Depreciation |
|
|
36,034,988 |
35,510,417 |
|
| Provision
for Gratuity |
|
2,795,290 |
2,400,000 |
|
| Amortization
of discount on Investments |
|
(379,000) |
(384,454 |
|
| Profit
on sale of fixed assets |
|
(582,649) |
(299,059 |
|
| Provision
for non-Performing advances |
|
18,608,884 |
6,324,060 |
|
| Mark-up on borrowing from
other banking |
|
6,798,139 |
8,600,183 |
|
| companies
& agents etc. |
|
|
|
| Amortization
of preliminary expenses and deferred costs |
|
-- |
2,997,607 |
|
|
|
|
----------- |
----------- |
|
|
|
|
63,275,652 |
55,148,754 |
|
|
|
|
----------- |
----------- |
|
|
|
|
(37,563,725) |
18,933,777 |
|
| (Increase)/Decrease
in Operating Assets |
|
| Advances |
|
|
|
(1,183,526,164) |
(875,463,658) |
|
| Other
assets (excluding advance tax) |
|
(169,595,279) |
19,524,510 |
|
|
|
|
----------- |
----------- |
|
|
|
|
(1,353,121,443) |
(855,939,148) |
|
| Increase/(Decrease)
in Operating Liabilities |
|
| Deposits
& Other Accounts |
|
|
2,316,071,459 |
1,051,042,768 |
|
| Bills
Payable |
|
|
57,428,162 |
9,599,410 |
|
| Other
Liabilities(excluding provision for taxation) |
|
7,899,890 |
23,204,259 |
|
|
|
|
----------- |
----------- |
|
|
|
|
2,381,399,511 |
1,083,846,437 |
|
|
|
|
----------- |
----------- |
|
| Net
Cash from Operating Activities |
|
990,714,343 |
246,841,066 |
|
|
| Income
tax Paid |
|
|
(55,682,448) |
(69,356,937) |
|
| Gratuity
Paid |
|
|
(95,290) |
-- |
|
|
|
|
----------- |
----------- |
|
| Net
cash flow from operating activities |
|
934,936,605 |
177,484,129 |
|
|
| CASH
FLOW FROM INVESTING ACTIVITIES |
|
|
| Return
on investments |
|
|
141,009,324 |
122,918,577 |
|
| Purchase/
sale of investments (Net) |
|
(780,103,975) |
118,528,005 |
|
| Capital
expense incurred |
|
|
(211,152,841) |
(185,784,220) |
|
| Proceeds
from sale of fixed assets |
|
2,256,844 |
2,669,646 |
|
|
|
|
----------- |
----------- |
|
| Net
Cash (used in) flow from Investing Activities |
|
(847,990,648) |
58,332,011 |
|
| CASH
FLOW FROM FINANCING ACTIVITIES |
|
|
| Other
banking companies and agents etc. |
I |
|
|
36.471.936 |
(81,483,132) |
|
| Mark-up
on borrowings from other banking companies |
|
(6,532,970) |
(9,627,000) |
|
| and agents |
|
|
|
----------- |
----------- |
|
| Net
cash flow from / (used in) financing activities |
|
29,938,966 |
(91,110,132) |
|
|
|
|
----------- |
----------- |
|
| Net
cash increase in cash and equivalents |
|
116,884,923 |
144,706,008 |
|
| Cash
and cash equivalents at the beginning of the year |
|
898,907,938 |
754,201,930 |
|
|
|
|
----------- |
----------- |
|
| Cash
and cash equivalents at the end of the year |
Rupees |
1,015,792,861 |
898,907,938 |
|
|
|
|
|
========== |
========== |
|
| Cash
and cash equivalents |
|
|
|
| Cash |
|
|
|
953,606,568 |
683,140,433 |
|
| Balances
with Other Banks |
|
|
62,186,293 |
80,767,505 |
|
| Money
at Call and Short Notice |
|
|
-- |
135,000,000 |
|
|
|
|
----------- |
----------- |
|
|
|
|
Rupees |
1,015,792,861 |
898,907,938 |
|
|
========== |
========== |
|
|
| Notes
to the Accounts |
|
| For
the year ended 31 December, 1997 |
|
|
| 1.
STATUS AND NATURE OF BUSINESS |
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| Bolan
Bank Limited is incorporated in Pakistan and is engaged in commercial banking
and |
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| related
services. The Bank is listed on Karachi and Lahore Stock Exchanges. |
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| 2.
BASIS OF PRESENTATION |
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| In
accordance with the directives of the Federal Government, regarding the
shifting of the |
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| banking
system to Islamic modes, the State Bank of Pakistan has issued various
circulars |
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| from
time to time. One permissible form of trade related mode of financing
comprises of |
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| purchase
of goods by the banks from their customers and resale to them at appropriate |
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| markup
in price on deferred payment basis. The Purchases and sales arising under
these |
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| arrangements
are not reflected in these accounts as such but are restricted to the amount |
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| of
facility actually utilised and appropriate portion of markup thereon. |
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| 3.
SIGNIFICANT ACCOUNTING POLICIES |
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| 3.1
Accounting convention |
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| These
accounts have been prepared using the historical cost convention and are in |
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| conformity
with the accounting policies of banking institutions in Pakistan. |
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| 3.2
Taxation |
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| The
charge for taxation is based on taxable income at the current rates of
taxation after |
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| taking
into consideration available tax credits, rebates and tax losses etc. The
bank |
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| accounts
for deferred taxation using the liability method on all major timing
differences |
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| except
where these are not expected to reverse in the foreseeable future. However, |
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| deferred
tax debits are not incorporated in the accounts. |
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| 3.3
Investments |
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| Investments
are stated at cost net of provisions made for Permanent diminution in value |
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| of
investments, if any. Profit and Loss on sale of investments are dealt with
through the |
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| profit
and loss account in the year in which they arise . Premium/ Discount on
purchase |
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| of
investments are being amortised over the term of investment. |
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| Where
the bank enters into 'transactions of repurchase (Repo) and resale (Reverse
Repo) |
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| of
government securities, these are recorded/ deleted at contracted rates for
specified |
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| period
of time. |
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| 3.4
Advances |
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| Advances
are stated net of provisions for bad and doubtful debts. Specific and general |
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| provisions
for bad and doubtful debts are determined by the management keeping in view |
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| the
requirements of the Prudential Regulations issued by the State Bank Of
Pakistan. |
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| 3.5
Premises. furniture & fixtures. vehicles and other fixed assets |
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| i)
The cost of premises, furniture, fixtures and other fixed assets are
depreciated over |
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| its
estimated useful life on reducing balance method. Further, the cost of
vehicles |
