| Bank Al Habib Limited |
|
|
|
|
|
|
|
|
| ANNUAL
REPORT 1997 |
|
|
| Contents |
|
| Board
of Directors |
|
| Branch
Network |
|
| Notice
of Annual General Meeting |
|
| Directors'
Report |
|
| Balance Sheet |
|
|
| Profit
and Loss Account |
|
| Cash
Flow Statement |
|
| Notes
to the Accounts |
|
| Auditors'
Report |
|
| Pattern
of Shareholdings |
|
|
|
| Board
of Directors |
|
|
| Chairman |
|
| Hamid
D. Habib |
|
|
| Chief
Executive & Managing Director |
|
| Abbas
D. Habib |
|
|
| Directors |
|
| Ali
Raza D. Habib |
|
| Mohammad
Usman Kushtiwala* |
|
| Faiz
N. Abdulali |
|
| Anwar
Haji Karim |
|
| Liaquat
H. Merchant |
|
| Imran Azim |
|
| Qumail
R. Habib* |
|
| *
Denotes Executive Director |
|
|
|
| Company
Secretary |
|
| Mahmood
S. Allarakhia |
|
|
| Registered
Office and Head Office |
Principal Office |
|
|
|
|
|
| 126-C,
Old Bahawalpur Road, |
|
Mackinnons Building, |
|
| Multan. |
|
I.I. Chundrigar Road,
Karachi. |
|
| Phones:
(92-61) 580314-I6, 544539 |
Phones:(92-21)
2412986-89, 2417065-68 |
|
| & 111-786-110 |
|
& 111-786-110 |
|
| Fax:
(92-61) 582471 |
|
Fax: (92-21) 2419752 |
|
| Telex:
42336 ALHML PK |
|
Telex: 21285 ALHAB PK |
|
|
| Branch
Network |
|
| Karachi |
|
Lahore |
|
Islamabad |
|
| Main Branch |
|
Main Branch |
|
90-91, Razia Sharif
Plaza, |
|
|
87,
Shahrah-e-Quaid-e-Azam, |
|
Jinnah Avenue, Blue Area. |
|
| Mackinnons
Building, I.I. Chundrigar Road. |
Phones: (92-42)
6305042-46 & 111-786-110 |
Phones: (92-51) 270883-4,
814388 - 89 |
|
| Phones:
(92-21) 2412986-89, 2417065-68 & |
Fax: 92-42) 6368864 |
|
& 111-786-110 |
|
| 111-786-110 |
|
Telex: 44610 BAHLR PK |
|
Fax: (92-51) 270885 |
|
| Fax:
(92-21) 2419752, 2425423 & 2412028 |
|
Telex: 54726 BAHID PK |
|
| Telex:
21286 ALHAB PK |
|
Garden Town Branch |
|
|
Awami Complex, 1-4 Usman
Block, |
Rawalpindi |
|
| Shahrah-e-Faisal
Branch |
|
Front Block V, New Garden
Town. |
M-101 -A, Midjac House,
Bank Road, |
|
| 20-A-1, Block 6, P.E.C.H.S., |
Phones: (92-42)
5869365-69 |
|
Rawalpindi Cantt. |
|
| Shahrah-e-Faisal. |
|
Fax: (92-42) 5869370 |
|
Phones: (92-51) 519936-38 |
|
| Phones:
(92-21) 4530140-42 |
|
Fax: (92-51) 519939 |
|
| Fax:
(92-21) 4530143 |
|
Gulberg Branch |
|
|
3-E, Block E, Ground
Floor, |
|
Gujrat |
|
| Gulshan-e-Iqbal
Branch |
|
Main Market, Gulberg II. |
|
Ground Floor, Soufi
Hotel, G.T. Road. |
|
| B-39,
AI-Shams Centre, Block 13-A, |
Phones.: (92-42) 5762502
& 5754586 |
Phones:(92-4331) 525623,
& 111-786-110 |
|
| University
Road, Gulshan-e-Iqbal. |
Fax: (92-42) 5762501 |
|
Fax: (92-4331) 525628 |
|
| Phones:
(92-21) 4989162-63 |
|
| Fax:
(92-21) 4989164 |
|
Multan |
|
Dinga (Distt. Gujrat} |
|
|
Main Branch |
|
Opp. Civil Hospital. |
|
| Zamzama
Branch |
|
126-C, Old Bahawalpur
Road. |
|
Phone: (92-43317) 2737 |
|
| 16-C,
Commercial Lane 3, |
|
Phones: (92-61) 544539 |
|
Fax: (92-43317) 2737 |
|
| Phase
V, Zamzama Boulevard, |
|
580314-16 &
111-786-110 |
|
| Defence
Housing Authority. |
|
Fax: (92-61) 582471 |
|
Peshawar |
|
| Phones:
(92-21) 5863986, 5861804 |
Telex: 42336 ALHML PK |
|
105-106, F.C. Trust
Building, |
|
| & 5861407 |
|
Sonehri Masjid Road. |
|
| Fax:
(92-21) 5863914 |
|
Hussain Agahi Road Branch |
|
Phones: (92-91) 279814,
279856, |
|
|
Hussain Agahi Road. |
|
& 111-786-110 |
|
| S.I.T.E.
Branch |
|
Fax: (92-91) 279861 |
|
| B/76,
S.S. Chambers, S.I.T.E. |
Faisalabad |
|
| Phones: (92-21 )
2571710-11 & 2571521 |
Bank Square, Outside
Kutchery Bazar. |
|
| Fax:
(92-21) 2571522 |
|
Phones: (92-41) 637301-3
& 111-786-110 |
Mirpur (Azad Kashmir) |
|
|
Fax: (92-41) 614266 |
|
82-A/B, AIlama Iqbal
Road, Sector B-4. |
|
| Bahadurabad
Branch |
|
Telex: 43528 ALHAB PK |
|
Phone: (92-58)25064 |
|
| Central
Commercial Area, B.C.H.S., |
|
Fax: (92-58) 24766 |
|
| Bahadurabad. |
|
Sialkot |
|
| Phones:
(92-21)4915803-5 |
|
Paris Road. |
|
Sahiwal |
|
| Fax:
(92-21 ) 4915802 |
|
Phones: (92-432) 592747, |
|
271, Block-2, |
|
|
86055 & 111-786-110 |
|
High Street (Jinnah
Road). |
|
| M.
A. Jinnah Road Branch |
|
Fax: (92-432) 592747. |
|
Phones: (92-441) 66021
& 67021 |
|
| Godrej
Kandawalla Building, |
|
Telex: 46426 ALHAB PK |
|
Fax: (92-441) 64031 |
|
| M.
A. Jinnah Road. |
|
| Phones:
7228494, 7228450, 7228458 |
Sheikhupura |
|
Quetta |
|
| 7228462,
7228508 & 7219481 |
|
B-IX-64-95/A, |
|
Mannan Chowk, M.A. Jinnah
Road. |
|
| Fax:
(92-21) 7219468 |
|
Sarghoda Road. |
|
Phones: (92-81) 844125,
844131 |
|
|
Near Sharif Plaza. |
|
& 111-786-110 |
|
| Cloth
Market Branch |
|
Phones: (92-4931) 612906
& 111-786-110 |
Fax: (92-81) 844125 |
|
| Ground
Floor, Lotus Manzil, |
|
Fax: (92-4931) 612877 |
|
| BR-2,
New Nham Road, |
|
Sukkur |
|
| Cloth Market. |
|
Nawabshah |
|
C-63 I/8, Minara Road. |
|
|
Masjid Road. |
|
Phones: (92-71) 22287 |
|
| Hyderabad |
|
Phones: (92-241) 62738
& 62854 |
Fax: (92-71) 22287 |
|
| Mezzanine
Floor, |
|
Fax: (92-241) 62737 |
|
| F-2,
Shelter Cantt. Shopping Mall, |
|
| Saddar Cantt. |
|
| Phones:
781955 & 28195 |
|
| Fax:
(92-221) 781955 |
|
|
|
| Notice
of Annual General Meeting |
|
|
| Notice
is hereby given that the Seventh Annual General Meeting of Bank AL Habib
Limited will be held at the |
|
| Registered
Office of the Bank located at 126-C, Old Bahawalpur Road, Multan, on
Wednesday, March 25, 1998, |
|
| at
12:30 p.m., to transact the following business: |
|
|
| 1.
To receive and adopt the audited Accounts of the Bank for the year ended
December 31, 1997, |
|
| together
with the Directors' and Auditors' Reports thereon. |
|
|
| 2.
To approve payment of cash dividend @ 20% i.e. Rs. 2.00 per share of Rs. 10
each for the year ended |
|
| December
31, 1997 as recommended by the Directors. |
|
|
| 3.
To approve the issue of bonus shares as recommended by the Directors and in
this regard to pass the |
|
| following
Ordinary Resolutions: |
|
| "RESOLVED
that a sum of Rs. 49,500,000 (Rupees forty nine million five hundred thousand
only) out |
|
| of
current year's profit be capitalized and distributed by issuing 4,950,000
fully paid ordinary shares |
|
| of
Rs 10 each as bonus shares in the proportion of fifteen shares for every
hundred shares held, to those |
|
| members
whose names appear in the register of members as at the close of business on
March 10, |
|
| 1998
and that the shares so distributed shall be treated for all purposes as an
increase in the paid-up |
|
| capital
of the Bank. |
|
|
| FURTHER
RESOLVED that the bonus shares so distributed shall rank pari passu in all
respects with |
|
| the
existing shares of the Bank except that they shall not qualify for dividend
for the year ended |
|
| December
31,1997. |
|
| FURTHER
RESOLVED that members entitled to a fraction of a share shall be given the
sale proceeds |
|
| of
their fractional entitlement, for which purpose the Directors be and are
hereby authorized to |
|
| consolidate
the fractions into whole shares and sell the shares in the stock market. |
|
|
| FURTHER
RESOLVED that the Directors be and are hereby authorized and empowered to
give effect |
|
| to
this resolution and to do or cause to be done all acts, deeds and things that
may be necessary or |
|
| required
for the issue, allotment and distribution of 4,950,000 shares." |
|
|
| 4.
To appoint Auditors for the year 1998 and to fix their remuneration. Messrs
Hyder Bhimji & Company, |
|
| Chartered
Accountants, being eligible, offer themselves for reappointment. |
|
|
| 5.
To consider any other business of the Bank with the permission of the Chair. |
|
|
| Notes: |
|
|
| (i)
A member entitled to attend and vote at this meeting is entitled to appoint a
proxy to attend and vote |
|
| on
his/her behalf. A proxy must be a member of the Bank. Proxy forms in order to
be effective must |
|
| be
received at the Registered Office of the Bank duly stamped and signed not
less than 48 hours before |
|
| the meeting. |
|
|
| (ii)
The share transfer books of the Bank will remain closed from Wednesday, March
11, 1998 to |
|
| Wednesday,
March 25, 1998, both days inclusive. |
|
|
| (iii)
Members are requested to promptly communicate to the Bank any change in their
address. |
|
|
|
| Directors'
Report |
|
| The
Board of Directors is pleased to present to you the Seventh Annual Report of
the Bank for the year ended |
|
| December
31, 1997. |
|
|
| The
operating results and appropriations as recommended by the Board of Directors
are as follows: |
|
|
|
(Rupees in '000) |
|
| Profit
for the year before tax |
|
442,395 |
|
| Taxation |
|
(243,751) |
|
| Profit
for the year after tax |
|
198,644 |
|
| Unappropriated
Profit brought forward |
|
475 |
|
| Profit
available for Appropriation |
|
199,119 |
|
| Appropriations: |
|
|
|
| 1
Transfer to Statutory Reserve Fund |
|
40,000 |
|
| -Transfer
to Special Reserve |
|
20,000 |
|
| Transfer
to General Reserve |
|
20,000 |
|
| Proposed
- Fully paid Bonus Shares |
|
|
|
| in
the ratio of 15 Ordinary |
|
|
|
| Shares
for every |
|
|
|
| 100
shares held |
|
49,500 |
|
| -
Cash Dividend @ 20% |
|
| i.e.
Rs. 2.00 per share |
|
| of
Rs. 10 each |
|
66,000 |
|
|
----------- |
|
|
(195,500) |
|
|
----------- |
|
| Unappropriated
Profit carried forward |
|
3,619 |
|
|
========== |
|
| Performance
Review |
|
|
|
|
(Rs. in million) |
|
|
Dec. 31, 1997 |
Dec. 31, 1996 |
Increase over 1996 |
|
|
Amount |
Amount |
Amount |
% |
|
|
|
| Pre-Tax
Profit 442.3 |
442.3 |
340.90 |
101.40 |
29.70 |
|
| Post-Tax
Profit |
198.60 |
152.90 |
45.70 |
29.90 |
|
| Shareholders'
Equity |
851.1 |
718.40 |
132.70 |
18.40 |
|
| Total
Customers' Deposits |
13,445.10 |
8,572.50 |
4,872.60 |
56.80 |
|
| Total
Advances |
7,371.90 |
5,663.70 |
1,708.20 |
30.10 |
|
| Foreign
Trade Business |
19,768.60 |
17,320.3 |
2,448.30 |
14.10 |
|
|
| By
the Grace of Allah, the Bank has continued to make satisfactory progress in
1997 in all areas of its |
|
| operations.
With the continued support of the customers, deposits have increased by Rs.
4,872.6 million i.e. |
|
| by
56.8% over the previous year. In line with the credit policy of the Bank, the
total advances also |
|
| proportionately
increased mainly through short term and export finance facilities provided to
the clients. |
|
|
| Inshallah,
we are hopeful that the Bank will continue to maintain a steady growth in
1998. |
|
|
| In
terms of the directives issued by the State Bank of Pakistan, all banks
operating in Pakistan must have |
|
| a
minimum paid-up capital of Rs. 500.0 million by December 31, 1998 and in
order to comply with these |
|
| directives,
your Bank is taking appropriate steps. |
|
|
| Branch
Network |
|
| During
the year, the Bank has opened five more branches, bringing the total number
of branches to |
|
| twenty
seven and, Inshallah, we plan to continue expansion of our branch network
during 1998. |
|
|
| Directors |
|
| Since
our last report, Mr. Habib Mohamed D. Habib, Mr. Mehr A. Barias, Mr. Asghar
D. Habib and Mr. Murtaza |
|
| H.
Habib, have resigned and the Board acknowledges the services rendered by them
as Directors of the |
|
| Bank. |
|
|
| Pattern
of Shareholdings |
|
|
| The
statement of pattern Of shareholdings of the Bank as at December 31, 1997, is
shown on page 27. |
|
| Auditors |
|
| Our
present auditors, Messrs Hyder Bhimji & Company, Chartered Accountants,
retire and being eligible, |
|
| offer
themselves for reappointment. |
|
|
| General |
|
| We
are grateful to our customers for their support, to the State Bank of
Pakistan for their continued guidance |
|
| and
to our foreign and local correspondent banks for their valuable services. We
also thank all our staff |
|
| members
for their sincere and dedicated services, which enabled the Bank to achieve
these results. |
|
|
|
|
| Balance
Sheet as at December 31, 1997 |
|
|
1997 |
1996 |
|
|
Note |
(Rupees in '000) |
|
|
| ASSETS |
|
|
| Cash |
|
4 |
949,717 |
2,117,051 |
|
| Balances
with Other Banks |
|
5 |
46,185 |
41,793 |
|
| Money
at Call and Short Notice |
|
|
- |
300,000 |
|
| Investments |
|
6 |
7,439,737 |
2,489,068 |
|
| Advances
- (net of provision) |
|
7 |
7,371,934 |
5,663,722 |
|
| Operating
Fixed Assets |
|
8 |
108,100 |
115,352 |
|
| Capital
Work-in-Progress |
|
9 |
1,589 |
1,030 |
|
| Other Assets |
|
10 |
597,244 |
520,478 |
|
|
|
----------- |
----------- |
|
|
|
16,514,506 |
11,248,494 |
|
| LIABILITIES |
|
|
|
| Deposits
and Other Accounts |
|
11 |
113,445,196 |
8,572,525 |
|
| Borrowings
From Other Banks, Agents etc. |
|
12 |
1,564,225 |
1,269,067 |
|
| Bills Payable |
|
|
238,352 |
190,660 |
|
| Other
Liabilities |
|
13 |
397,234 |
497,767 |
|
| Deferred
Liabilities for Taxation |
|
|
18,380 |
- |
|
|
|
----------- |
----------- |
|
|
|
15,663,387 |
10,530,019 |
|
|
|
----------- |
----------- |
|
| Net Assets |
|
|
851,119 |
718,475 |
|
|
|
========== |
========== |
|
| REPRESENTED
BY: |
|
|
|
|
|
|
| Share Capital |
|
14 |
330,000 |
300,000 |
|
| Reserve
Fund and Other Reserves |
|
15 |
517,500 |
418,000 |
|
| Unappropriated
Profit |
|
|
3,619 |
475 |
|
|
|
----------- |
----------- |
|
| Shareholders'
Equity |
|
|
851,119 |
718,475 |
|
|
|
========== |
========== |
|
| MEMORANDUM
ITEMS: |
|
|
|
|
|
|
| Bills
for Collection |
|
16 |
1,269,289 |
1,658,782 |
|
| Acceptances,
Endorsements and Other |
|
|
|
| Obligations |
|
|
1,885,258 |
1,314,080 |
|
| Contingent
Liabilities and Commitments |
|
17 |
12,554,102 |
9,246,722 |
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
| Profit
and Loss Account for the year ended December 31, 1997 |
|
|
|
1997 |
1996 |
|
|
Note |
(Rupees in '000) |
|
|
|
|
| Mark
up /Interest and discount and / or return earned |
|
1,848,480 |
1,217,480 |
|
| Less:
Cost / Return on deposits, borrowings etc. |
|
(1,280,433) |
(819,814 |
|
|
---------- |
---------- |
|
|
568,047 |
397,666 |
|
|
| Fees,
commissions and brokerage |
|
63,773 |
62,219 |
|
| Dividend
income |
|
3,852 |
3,245 |
|
| Other
operating income |
|
18 |
113,201 |
110,774 |
|
|
|
---------- |
---------- |
|
|
|
180,826 |
176,238 |
|
|
|
---------- |
---------- |
|
|
|
748,873 |
573,904 |
|
|
|
|
| Operating
Expenses: |
|
|
|
| Administrative
expenses |
|
19 |
264,163 |
222,958 |
|
| Provisions
against non-performing advances |
|
7.2 |
37,167 |
11,238 |
|
| Provision
for diminution in value of investments |
6 |
6,328 |
- |
|
|
|
---------- |
---------- |
|
|
(307,658) |
(234,196 |
|
|
441,215 |
339,708 |
|
| Other income |
|
20 |
1,180 |
1,252 |
|
|
|
---------- |
---------- |
|
| Profit
before taxation |
|
|
442,395 |
340,960 |
|
|
|
|
|
| Taxation |
- current |
|
21 |
225,371 |
188,000 |
|
|
- deferred |
|
18,380 |
- |
|
|
---------- |
---------- |
|
| Profit
after taxation |
|
(243,751) |
(188,000 |
|
|
---------- |
---------- |
|
| Unappropriated
Profit brought forward |
|
198,644 |
152,960 |
|
| Profit
available for appropriation |
|
475 |
5,515 |
|
|
---------- |
---------- |
|
|
199,119 |
158,475 |
|
| APPROPRIATIONS |
|
| Transfer to: |
|
|
|
| Statutory
Reserve Fund |
|
40,000 |
69,000 |
|
| Special
Reserve |
|
20,000 |
14,000 |
|
| General
Reserve |
|
20,000 |
- |
|
| Reserve
for issue of Bonus Shares |
|
49,500 |
30,000 |
|
| Proposed
cash dividend |
|
66,000 |
45,000 |
|
|
---------- |
---------- |
|
|
(195,500) |
(158,000 |
|
|
---------- |
---------- |
|
| Unappropriated
profit carried forward |
|
3,619 |
475 |
|
|
========== |
========== |
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
| Cash
Flow Statement for the year ended December 31, 1997 |
|
|
|
1997 |
1996 |
|
|
(Rupees in '000) |
|
|
| Cash
Flow From Operating Activities |
|
|
| Profit
before taxation |
|
442,395 |
340,960 |
|
| Less:
Dividend income |
|
3,852 |
3,245 |
|
|
---------- |
---------- |
|
|
438,543 |
337,715 |
|
| Add:
Adjustment for non-cash charges |
|
| Depreciation |
|
17,088 |
13,004 |
|
| Provision
for diminution in the value of investments |
|
6,328 |
- |
|
| Provision
against non-performing advances |
|
37,167 |
11,238 |
|
|
---------- |
---------- |
|
|
60,583 |
24,242 |
|
|
---------- |
---------- |
|
|
499,126 |
361,957 |
|
| (Increase)/Decrease
in operating assets: |
|
| Government
securities |
|
(4,956,997) |
(478,077) |
|
| Advances |
|
(1,745,379) |
(1,421,324) |
|
| Other
assets (excluding advance tax) |
|
(77,325) |
(163,032) |
|
|
---------- |
---------- |
|
|
(6,779,701) |
(2,062,433) |
|
|
| Increase
/ (Decrease) in operatin9 liabilities: |
|
| Deposits
and other accounts |
|
4,872,671 |
2,219,173 |
|
| Bills Payable |
|
47,692 |
(343,492 |
|
| Other
liabilities (excluding provision for taxation) |
|
(168,181) |
89,246 |
|
|
---------- |
---------- |
|
|
4,752,182 |
1,964,927 |
|
|
---------- |
---------- |
|
| Cash
inflow / (outflow) before tax |
|
(1,528,393) |
264,451 |
|
| Income
tax paid |
|
(179,728) |
(231,164 |
|
|
---------- |
---------- |
|
| Net cash
inflow / (outflow) from operating activities |
|
| (balance
carried forward) |
|
(1,708,121) |
33,287 |
|
|
|
---------- |
---------- |
|
|
| Net
cash inflow / (outflow) from operating activities |
|
|
| (balance brought forward) |
|
|
(1,708,121) |
33,287 |
|
|
| Cash
Flow From Investing Activities |
|
|
|
| Net
sale proceeds of investment securities |
|
- |
44,318 |
|
| Dividend
income |
|
3,852 |
3,245 |
|
| Fixed
capital expenditure |
|
(9,994) |
(70,270 |
|
| Sale
proceeds of fixed assets |
|
158 |
373 |
|
|
---------- |
---------- |
|
| Net
cash inflow/(outflow) from investing activities |
|
(5,984) |
(22,334 |
|
|
| Cash
Flow From Financing Activities |
|
| Borrowings
from other banks, agents etc. |
|
295,158 |
280,001 |
|
| Dividend paid |
|
(43,995) |
(43,537) |
|
|
---------- |
---------- |
|
| Net
cash inflow / (outflow) from financing activities |
|
251,163 |
236,464 |
|
|
| Increase
/ (Decrease) in cash and cash equivalents for the year |
(1,462,942) |
247,417 |
|
|
|
|
| Cash
and cash equivalents at the beginning of the year |
|
2,458,844 |
2,211,427 |
|
|
---------- |
---------- |
|
| Cash
and cash equivalents at the end of the year |
|
995,902 |
2,458,844 |
|
|
========== |
========== |
|
| Cash
and cash equivalents |
|
|
| Cash
in hand and with State Bank of Pakistan / National Bank of Pakistan |
949,717 |
2,117,05! |
|
| Balances
with other banks |
|
46,185 |
41,793 |
|
| Money
at call and short notice |
|
- |
300,000 |
|
|
---------- |
---------- |
|
|
995,902 |
2,458,844 |
|
|
========== |
========== |
|
|
|
|
|
|
|
| Notes
to the Accounts for the year ended December 31, 1997 |
|
|
| 1.
STATUS AND NATURE OF BUSINESS |
|
|
| The
Bank was incorporated in Pakistan on October 15, 1991, as a public limited
company and its |
|
| shares
are listed on all the Stock Exchanges in Pakistan. It is a scheduled bank
principally engaged |
|
| in
the business of commercial banking. |
|
|
| 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. |
|
| Permissible
forms of trade-related modes of financing include purchase of goods by the
banks from |
|
| their
customers and immediate 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 facility actually utilized and the
appropriate portion of mark- |
|
| up thereon. |
|
|
| 3.
SIGNIFICANT ACCOUNTING POLICIES |
