| ABN Amro Bank
N.V. |
|
|
|
|
|
|
|
|
|
|
|
| (Incorporated
in The Netherlands with limited liability) |
|
| PAKISTAN
BRANCHES |
|
| ACCOUNTS
FOR THE YEAR ENDED DECEMBER 31, 2000 |
|
|
|
|
| AUDITORS'
REPORT TO THE DIRECTORS |
|
|
| We
have audited the annexed balance sheet of ABN AMRO BANK N.V. - PAKISTAN
BRANCHES as at |
|
| December
31, 2000 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 ABN
AMRO BANK N.V. -- 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 accordance with
accounting policies |
|
| consistently
applied, except for the change as stated in note 3.2 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 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- |
|
| ance
sheet and the profit and loss account and the 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 |
|
| Branches'
affairs as at December 31,2000 and its true balance of the profit 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. |
|
|
|
|
| Karachi |
|
|
Ford, Rhodes, Robson, Morrow |
|
| 21st
February 2001 |
|
Chartered Accountants. |
|
|
|
|
|
|
|
| BALANCE
SHEET AS AT DECEMBER 31, 2000 |
|
|
|
Note |
2000 |
1999 |
|
|
|
Rupees in
'000 |
|
|
|
| ASSETS |
|
|
|
| CASH |
|
4 |
2,108,684 |
4,194,238 |
|
| BALANCES
WITH OTHER BANKS |
5 |
35,675 |
16,198 |
|
| MONEY
AT CALL AND SHORT NOTICE |
|
1,880,614 |
-- |
|
| INVESTMENTS |
|
6 |
8,244,523 |
3,020,077 |
|
| ADVANCES
-- NET OF PROVISIONS |
7 |
21,526,026 |
17,023,952 |
|
| OPERATING
FIXED ASSETS |
|
8 |
1,038,646 |
585,141 |
|
| CAPITAL
WORK-IN-PROGRESS (Buildings) |
|
-- |
2,478,361 |
|
| OTHER
ASSETS |
|
9 |
2,685,777 |
2,821,378 |
|
|
|
------------------ |
------------------ |
|
|
|
37,519,945 |
27,908,820 |
|
|
| LIABILITIES |
|
|
|
| DEPOSITS AND OTHER ACCOUNTS |
10 |
29,575,978 |
19,936,750 |
|
| BORROWINGS
FROM OTHER BANKS, AGENTS ETC. |
11 |
4,737,704 |
4,788,001 |
|
| BILLS
PAYABLE |
|
199,063 |
216,768 |
|
| OTHER
LIABILITIES |
|
12 |
2,481,928 |
2,369,915 |
|
|
|
------------------ |
------------------ |
|
|
|
38,994,673 |
27,311,434 |
|
|
|
------------------ |
------------------ |
|
| NET
ASSETS |
|
525,272 |
597,386 |
|
|
========== |
========== |
|
|
| REPRESENTED
BY |
|
| HEAD
OFFICE CAPITAL ACCOUNT |
13 |
|
| SURPLUS ON REVALUATION OF
INVESTMENTS |
3,589 |
-- |
|
| UNREMITTED
PROFIT |
|
521,683 |
597,386 |
|
|
------------------ |
------------------ |
|
|
525,272 |
597,386 |
|
|
|
========== |
========== |
|
|
|
|
|
| MEMORANDUM
ITEMS |
|
| BILLS
FOR COLLECTION |
|
14 |
3,372,379 |
1,672,025 |
|
| ACCEPTANCES,
ENDORSEMENTS AND OTHER |
|
|
|
|
| OBLIGATIONS |
|
|
9,801,518 |
5,520,241 |
|
| CONTINGENT
LIABILITIES AND COMMITMENTS |
15 |
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
MOHAMMAD AURANGZEB |
|
YAMEEN KERAI |
|
|
COUNTRY MANAGER |
|
COUNTRY FINANCIAL OFFICER |
|
|
|
| PROFIT
AND LOSS ACCOUNT FOR THE YEAR ENDED DECEMBER 31, 2000 |
|
|
|
Note |
2000 |
1999 |
|
|
|
Rupees in
'000 |
|
|
| Mark-up/interest
and discount and/or return earned |
3,453,153 |
3,250,710 |
|
| Less:
Cost/Return on deposits, borrowings etc. |
|
2,663,789 |
2,587,270 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
789,364 |
663,440 |
|
|
| Fees,
commission and brokerage |
|
424,434 |
370,069 |
|
| Other
operating income |
|
16 |
265,090 |
268,330 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
689,524 |
638,399 |
|
|
------------------ |
------------------ |
|
|
|
1,478,888 |
1,301,839 |
|
|
| Operating
expenses: |
|
| Administrative
expenses |
|
17 |
688,717 |
628,180 |
|
| Provision
against non-performing advances |
7.2 |
42,980 |
(25,000) |
|
| Bad
debts written off directly |
|
|
239 |
-- |
|
|
|
------------------ |
------------------ |
|
|
|
|
(731,936) |
(603,180) |
|
|
------------------ |
------------------ |
|
|
|
|
746,952 |
698,659 |
|
| Other income |
|
|
18 |
9,448 |
5,410 |
|
|
|
|
------------------ |
------------------ |
|
| Profit
before taxation |
|
|
756,400 |
704,069 |
|
|
|
------------------ |
------------------ |
|
| Taxation
-current |
|
19 |
280,000 |
340,000 |
|
| - prior |
|
|
|
(62,000) |
76,000 |
|
| - deferred |
|
|
102,000 |
(6,300) |
|
|
|
------------------ |
------------------ |
|
|
|
320,000 |
409,700 |
|
|
|
------------------ |
------------------ |
|
| Profit
after taxation |
|
|
436,400 |
294,369 |
|
|
|
| Unremitted
profit brought forward |
|
|
597,386 |
574,713 |
|
|
|
------------------ |
------------------ |
|
|
|
|
1,033,786 |
869,082 |
|
|
| Remittance
to Head Office |
|
|
(512,103) |
(271,696) |
|
|
|
|
------------------ |
------------------ |
|
| Unremitted
profit carded forward |
|
|
521,683 |
597,386 |
|
|
|
========== |
========== |
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
MUHAMMAD AURANGZEB |
|
YAMEEN KERAI |
|
|
COUNTRY MANAGER |
|
COUNTRY FINANCIAL OFFICER |
|
|
|
|
|
| CASH
FLOW STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2000 |
|
|
|
|
|
Note |
2000 |
1999 |
|
|
|
Rupees in
'000 |
|
|
| CASH
FLOW FROM OPERATING ACTIVITIES |
|
| Profit
before taxation |
|
756,400 |
704,069 |
|
| Adjustment
for non-cash items: |
|
|
|
| Depreciation |
|
105,741 |
95,258 |
|
| Provision
against non-performing advances |
|
42,980 |
|
|
| Bad
debts written off directly |
|
239 |
-- |
|
| Net
profit on sale of fixed assets |
|
(1,838) |
(2,381) |
|
|
|
------------------ |
------------------ |
|
|
|
147,122 |
67,877 |
|
|
|
------------------ |
------------------ |
|
|
|
903,522 |
771,946 |
|
|
|
| (Increase)/decrease
in operating assets: |
|
| Investments |
|
(5,220,857) |
792,380 |
|
| Advances |
|
(4,545,293) |
(702,674) |
|
| Other
assets (excluding tax) |
|
251,030 |
(1,604,728) |
|
|
------------------ |
------------------ |
|
|
|
(9,515,120) |
(1,515,022) |
|
|
|
| Increase/(decrease)
in operating liabilities: |
|
| Deposits
and other accounts |
|
9,639,228 |
(1,094,371) |
|
| Bills payable |
|
|
|
(17,705) |
(100,492) |
|
| Other liabilities |
|
99,913 |
696,473 |
|
|
|
------------------ |
------------------ |
|
|
|
9,721,436 |
(498,390) |
|
|
|
------------------ |
------------------ |
|
| Cash
flow before tax |
|
1,109,838 |
(1,241,468) |
|
| Income-tax paid |
|
|
(423,329) |
(398,371) |
|
|
|
------------------ |
------------------ |
|
| Net
cash inflow/(outflow) from operating activities |
|
686,509 |
(1,639,837) |
|
|
|
|
|
|
| CASH
FLOW FROM INVESTING ACTIVITIES |
|
|
|
| Fixed
capital expenditure |
|
|
(316,207) |
(340,599) |
|
| Sale
proceeds of fixed assets |
|
|
6,635 |
8,313 |
|
|
|
|
------------------ |
------------------ |
|
| Net
cash used in investing activities |
|
(309,572) |
(332,468) |
|
|
|
| CASH
FLOW FROM FINANCING ACTIVITIES |
|
| Borrowings
from other banks, agents etc. |
|
(50,297) |
2,868,451 |
|
| Remittance
to Head Office |
|
|
(512,103) |
(271,696) |
|
|
|
|
------------------ |
------------------ |
|
| Net
cash (outflow)/inflow from financing activities |
|
(562,400) |
2,596,755 |
|
|
|
|
------------------ |
------------------ |
|
| (Decrease)/Increase
in cash and cash equivalents for the year |
(185,463) |
624,450 |
|
| Cash
and cash equivalents at the beginning of the year |
4,210,436 |
3,585,986 |
|
|
|
|
------------------ |
------------------ |
|
| Cash
and cash equivalents at the end of the year |
|
4,024,973 |
4,210,436 |
|
|
|
|
========== |
========== |
|
|
|
| Cash
and cash equivalents |
|
| Cash |
|
|
2,108,684 |
4,194,238 |
|
| Balances
with other banks |
|
|
35,675 |
16,198 |
|
| Money
at call and short notice |
|
|
1,880,614 |
-- |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
4,024,973 |
4,210,436 |
|
|
========== |
========== |
|
|
|
MUHAMMAD AURANGZEB |
|
YAMEEN KERAI |
|
|
COUNTRY MANAGER |
|
COUNTRY FINANCIAL OFFICER |
|
|
|
| NOTES
TO THE ACCOUNTS FOR THE YEAR ENDED DECEMBER 31, 2000 |
|
|
| 1.
STATUS AND NATURE OF BUSINESS |
|
| ABN
AMRO Bank N.V. was incorporated in the Netherlands in 1825. Pakistan
operations commenced in |
|
| 1948
and are currently being conducted in Pakistan through five branches in
Karachi, Lahore and |
|
| Islamabad.
It is engaged in banking business permitted under the Banking Companies
Ordinance, 1962. |
|
|
| 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 confirm with |
|
| the
B.P.R.D circular number 31 dated August 13, 1997. Consistent with prior
years, expenses of the Head |
|
| Office
allocable to the, Pakistan branches are not incorporated in these accounts. |
|
|
| 3.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
|
|
|
| 3.1
Accounting convention |
|
| These
financial statements are prepared on the historical cost convention except
for certain investments |
|
| which
are stated on mark to market basis as described in note 3.2 and 3.6 to these
accounts. |
|
|
| 3.2
Change in Accounting Policy |
|
| Commenting
from the current year, the bank marks to market its investments in government
securities, |
|
| excluding
Pakistan Investment Bonds and securities obtained under reverse repurchase
transactions, in |
|
| accordance
with the guidelines contained in State Bank of Pakistan BSD circular number
20 dated August |
|
| 4,
2000. Any difference between the carrying value and the revalued amount is
taken to a surplus/deficit on |
|
| revaluation
accounts and shown separately in the balance sheet below Head Office Capital
account. |
|
|
| Previously
these investments were carried at cost less amortization of premium or
discount, where applicable. |
|
| Had
this change not been made, the value of the bank's investments would be lower
by Rs 3.589 million |
|
| as
at December 31,2000. However, there is no effect on the profit and loss
account. |
|
|
| 3.3
Staff Retirement Benefits |
|
| The
bank operates an approved gratuity fund scheme for all its permanent
employees who have completed |
|
| 5
years service or more. Monthly contribution is made by the bank as per
actuarial advice. |
|
|
|
|
| The
bank also operates an approved provident fund scheme for all its permanent
employees. Equal |
|
| monthly
contributions are made, both by the bank and the employees to the fund at the
rate of 10% of |
|
| basic salary. |
|
|
|
|
|
|
| 3.4 Taxation |
|
|
|
| Provision
for taxation is based on taxable income at the current rates of taxation
after taking into account |
|
| tax
credits available, if any. |
|
|
|
|
|
|
| Deferred
taxation is computed and recorded, using the liability method, on all
material timing differences |
|
| except
those which are considered not likely to reverse in the foreseeable future. |
|
|
|
| 3.5 Advances |
|
|
|
| Advances
and mark-up are stated net of provisions for possible losses and reserved
mark-up, respectively. |
|
| Provisions
for advances (and relevant mark-up) are made against specific non-performing
advances, in |
|
| compliance
with the requirements of the Prudential Regulations of the State Bank of
Pakistan. |
|
|
| 3.6 Investments |
|
|
|
| Investments
in government securities are marked to market in accordance with BSD circular
No. 20 dated |
|
| August
4, 2000, except for investments acquired under reverse repurchase
transactions and Pakistan |
|
| Investment
Bonds (PIB). The difference between the carrying value, representing cost
adjusted for amortization |
|
| of
discount or premium, and the revalued amount is recognised in the
surplus/deficit on revaluation |
|
| account,
until realised. |
|
|
|
|
|
|
| Investment
in unquoted securities and PIB's are recorded at cost, adjusted for
amortization of premium or |
|
| discount,
where applicable. |
|
|
|
|
|
|
| The
bank 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 and the |
|
| charges
arising from the differential in sale and repurchase values are accrued on
pro-rata basis |
|
| and
recorded as expense. Upon repurchase the securities are reinstated. |
|
|
| (b)
In the case of purchase under resale obligations the securities are booked at
the contracted purchase |
|
| price
and the differential of the contracted purchase and resale price is amortised
over the |
|
| period
of their contract and recorded as income. |
|
|
|
| 3.7
Operating fixed assets and depreciation |
|
|
| Fixed
assets are stated at cost less accumulated depredation. Depreciation is
charged over the estimated |
|
| useful
lives of the related assets at the rates specified in note 8 on straight line
method except for buildings, |
|
| on
which depreciation is calculated using the reducing balance method. |
|
|
| 3.8
Revenue recognition |
|
|
|
| Interest/Mark-up
income is recognised on an accrual basis except if the recovery is considered
doubtful, |
|
| recognition
is deferred until if is received. Commission and fees are generally
recognised as income at the |
|
| time
of affecting the transaction to which they relate. |
|
|
|
| 3.9
Foreign currencies |
|
|
|
| Assets
and liabilities in foreign currencies have been translated into rupees at the
rates of exchange |
|
| approximating
to those ruling at the balance sheet date except those in respect of which
forward exchange |
|
| cover
is available. Exchange gains and losses are included in income currently. |
|
|
|
|
2000 |
1999 |
|
|
|
Rupees in
'000 |
|
|
|
| 4. CASH |
|
| In hand: |
|
| - Local currency |
|
|
150,376 |
289,160 |
|
| -
Foreign currency |
|
59,005 |
199,935 |
|
|
|
------------------ |
------------------ |
|
|
|
209,381 |
489,095 |
|
|
|
|
| With
State Bank of Pakistan: |
|
|
|
|
| Special
deposit account |
|
-- |
1,141,777 |
|
| Capital
deposited in foreign currency |
|
1,744,031 |
1,561,155 |
|
| Current
accounts |
|
155,117 |
1,001,980 |
|
|
|
------------------ |
------------------ |
|
|
|
1,899,148 |
3,704,912 |
|
| With
National Bank of Pakistan in current account |
|
155 |
231 |
|
|
|
------------------ |
------------------ |
|
|
|
2,108,684 |
4,194,238 |
|
|
========== |
========== |
|
|
| 5.
BALANCES WITH OTHER BANKS |
|
| In Pakistan: |
|
|
| -
current accounts |
|
33,045 |
15,520 |
|
| Outside
Pakistan: |
|
|
|
| -
current accounts |
|
2,630 |
678 |
|
|
|
------------------ |
------------------ |
|
|
|
35,675 |
16,198 |
|
|
|
========== |
========== |
|
|
|
|
| 6.
INVESTMENTS |
|
| Investment
securities -- unquoted: |
|
| Federal
and Provincial Government securities: |
|
| Treasury Bills |
|
|
|
7,328,429 |
2,267,937 |
|
| Pakistan
Investment Bonds |
|
|
50,000 |
-- |
|
| Federal
Investment Bands - note 6.1 |
|
826,094 |
530,473 |
|
|
------------------ |
------------------ |
|
|
|
|
8,204,523 |
2,798,410 |
|
| Term
Finance Certificates |
|
|
40,000 |
76,667 |
|
| Certificates
of Investment |
|
|
-- |
145,000 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
8,244,523 |
3,020,077 |
|
|
|
|
========== |
========== |
|
|
|
|
|
|
| 6.1
Includes Federal Investment Bonds of Rs. 50 million which are under pledge
with the State Bank of |
|
| Pakistan. |
|
|
|
|
|
|
|
|
|
| Book
value of unquoted investments Rs. 8,244.523 (1999: Rs. 3,020.08) million. |
|
|
|
|
|
|
|
| 7. ADVANCES |
|
| Loans,
cash credits, overdrafts etc. |
|
| In Pakistan |
|
|
20,256,481 |
15,919,786 |
|
|
|
|
|
|
| Bills
discounted and purchased: |
|
|
|
|
|
| Payable
in Pakistan |
|
|
695,694 |
831,864 |
|
| Payable
outside Pakistan |
|
|
627,699 |
403,375 |
|
|
|
------------------ |
------------------ |
|
|
|
1,323,393 |
1,235,239 |
|
|
|
------------------ |
------------------ |
|
|
|
21,579,874 |
17,155,025 |
|
| Provisions
for non-performing advances -- note 7.2 |
|
(53,848) |
(131,073) |
|
|
|
------------------ |
------------------ |
|
|
|
21,526,026 |
17,023,952 |
|
|
|
========== |
========== |
|
|
| Advances
include Rs 190.151, (1999: Rs. 198.009) million which have been placed on
non-performing |
|
| status. |
|
|
|
| 7.1
Particulars of advances |
|
| In
local currency |
|
|
20,898,327 |
16,620,577 |
|
| In
foreign currencies |
|
|
627,699 |
403,375 |
|
|
|
|
|
------------------ |
------------------ |
|
|
|
21,526,026 |
17,023,952 |
|
|
|
========== |
========== |
|
|
| Debts
considered good in respect of which the bank |
|
| is fully secured |
|
|
18,513,859 |
13,880,568 |
|
| Debts
considered good for which the bank holds no |
|
|
|
| other
security than the debtors' personal security |
|
7,268 |
7,414 |
|
| Debts
considered good secured by the personal |
|
|
|
|
| liabilities
of one or more parties in addition to the |
|
|
|
|
| personal
security of the debtors |
|
|
3,004,899 |
3,135,970 |
|
| Debts
considered doubtful or bad not provided for |
|
-- |
-- |
|
|
|
------------------ |
------------------ |
|
|
|
21,526,026 |
17,023,952 |
|
|
|
========== |
========== |
|
|
|
|
Maximum total |
|
|
|
amount of |
|
|
|
advance |
|
|
Balance |
including |
|
|
Outstanding |
temporary |
|
|
December |
advances grant |
|
|
31, 2000 |
during 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 persons |
|
202,817 |
202,817 |
|
|
|
|
|
| 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
due by subsidiary companies, |
|
|
|
| controlled
firms, managed modarabas and |
|
|
|
| other
associated undertakings |
|
-- |
-- |
|
|
| 7.2
Particulars of provisions against non-performing advances |
|
|
|
|
|
|
|
|
|
Total |
|
|
Specific |
2000 |
1999 |
|
|
|
Rupees in
'000 |
|
|
|
|
