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The Bank of Punjab
Annual Report 1999
Board of Directors
Mr. Tariq Sultan
Mr. Muhammad Saleem Jan
Mr. Muhammad Akram
M. Mukhtar Masood
Mr. Afzal Hussain Tarar
Sh. Muhammad Asif
Mr. Masaud Ahmed Shaikh
Auditors
Ford, Rhodes, Robson, Morrow
Chartered Accountants
Registered Office
7-Egerton Road, Lahore - Pakistan
PBX: 6372303-12
Fax: 6310534, 6370464, 6369549
Contents
1. Chairman's Review.
2. Directors' Report.
3.  Notice of Annual General Meeting.
4. Annual Accounts of The Bank of Punjab.
a. Auditors' Report to the Members
b. Balance Sheet
c. Profit and Loss Account
d. Cash Flow Statement
e. Notes to the Accounts
5. Annual Accounts of the
Punjab Modaraba Services (Pvt.) Ltd.
a. Auditors' Report to the Member
b. Balance Sheet
c. Profit & Loss Account
d. Cash Flow Statement
e. Notes to the Accounts
6. Consolidated Annual Accounts of The Bank of
Punjab and its Subsidiary
Punjab Modaraba Services (Pvt.) Ltd.
a. Auditors' Report to the Members
b. Consolidated Balance Sheet
c. Consolidated Profit & Loss Account
d. Consolidated Cash Flow Statement
e. Consolidated Notes to the Accounts
8. List of Foreign Correspondents Bank.
Chairman's Review
I am pleased to present the 10th annual report of the Bank together with audited accounts for the year ended
December 31, 1999.
The operational performance of the bank during 1999 remained satisfactory particularly if viewed in the context
of prevailing economic conditions. During the year the bank earned a pre-tax profit of Rs. 124.739 million and
has maintained steady growth by generating income from advances, fee based business and other activities. The
Bank's pre-provision and pre-tax adjusted profit was Rs. 205.969 million as against a profit of Rs. 39.273 million
for the year 1998. This clearly indicates the improved performance of the Bank during the
year 1999.
The Bank's paid-up capital has increased by 10% during the year 1999 i.e. from 774.436 million to
Rs. 851.880 million. The equity base of the Bank has also increased to Rs. 1,823.154 million with a Reserves level
of Rs. 971.049 million.
The new capital adequacy guidelines of State Bank of Pakistan are being continuously met and bank has a
comfortable Capital Adequacy Ratio of 18.79% as on December 31, 1999 as against a requirement of 8%.
Special emphasis has been given to restructuring the deposit mix thereby ensuring a positive spread. The deposits
of the Bank as on 31.12.99 stood at Rs. 15,019.100 million.
Investments were at Rs. 4,990.619 million at the end of the year under review. During the year, in the presence
of low yield investment opportunities in inter-bank money market, the advances portfolio has been given due
attention. This primary business activity stands at Rs. 6,150.648 million showing an increase of 10%
over the year 1998.
The foreign trade business has increased during the year 1999 as a result of capturing new markets and providing
improved services to the existing clients. The Bank has executed import & export business to the tune of Rs. 2.500
billion during the year 1999 and in the year 2000 we expect to further increase our participation in
this field of activity.
During the era of automation, the Bank is continuously following the advanced technologies in the field of
computerization. Besides, due consideration has been given to improving personnel skills by conducting training
courses at the Bank's Training Institute and nominating staff for special courses conducted by
various financial agencies.
I and all members of the Board are thankful to the Government of Punjab for their continued support, the clients
for their trust, SBP for their guidance and the shareholders for their confidence in the management which has
assisted us in achieving targeted results.
To conclude, I pray to Almighty Allah to provide us with the vision which will enable us to achieve better results,
safeguard the interest of our institution and to assist us in our march towards progress and future prosperity.
TARIQ SULTAN
  CHAIRMAN
Directors' Report to Shareholders
The Board of Directors feels pleasure in presenting the 10th Annual Report of the Bank together with Audited
Accounts and Auditors' Report thereon for the year ended December 31, 1999. The Bank's financial
results are as follows:
(Rupees in thousand)
Profit for the year before taxation 124,739
Provision for taxation - current 96,500
-----------
Profit after taxation 28,239
Unappropriated profit brought forward 136
-----------
Profit available for appropriations 28,375
Appropriations:
- Statutory Reserve 5,650
- Special Reserve 12,500
- General Reserve 10,000 28,150
----------- -----------
Balance carried forward 225
-----------
Auditors:
The retiring auditors, M/s Ford, Rhodes, Robson, Morrow, Chartered Accountants being eligible for reappointment
and some other firms namely M/s Hameed Chaudhry & Co., M/s A.F. Ferguson & Co., M/s Sidat Hyder Qamar
& Co., and M/s Avais Hyder Zaman Rizwani & Co., Chartered Accountants offer themselves for appointment for
the year ending December 31, 2000.
Chairman's Review:
The Directors of the Bank endorse the accompanying Chairman's Review on the performance of the Bank.
Pattern of Shareholding:
A statement showing the pattern of shareholding in the Bank as at 31 December 1999 is attached.
For and on behalf of the Board
Chairman
Notice of Annual General Meeting
Notice is hereby given that the Tenth Annual General Meeting of the members of the Bank will be held at Hotel
Pearl Continental, Lahore on Thursday the 18th May, 2000 at 9: 00 a.m., to transact the following ordinary
business:-
1. To confirm minutes of the Ninth Annual General Meeting.
2. To receive and adopt the audited accounts of the Bank for the year ended 31 st December, 1999, together with
the report of the Board of Directors and the Auditors.
3. To appoint Auditors for the year ending 31 st December, 2000 and to fix their remuneration.
4. Any other item of ordinary business with the permission of the Chair.
By the order of the Chairman
Masaud Ahmad Shaikh
Secretary
NOTES:
1. Share Transfer Books of the Bank shall remain closed for transfer from 19th April, 2000 to 3rd May, 2000
(both days inclusive).
2. All members are entitled to attend the meeting, however, the right of vote is restricted to those who are
registered as such for a period of not less than three months prior to the date of the meeting.
3. CDC shareholders are requested to bring with them their National Identity Card alongwith the participant's
ID number and their account number at the time of attending the Annual General Meeting in order to facilitate
identification of the respective shareholders.
4. A member entitled to attend the meeting as per para 2 of the note is entitled to appoint a proxy to attend and
speak for him/her. A proxy must be a member of the Bank.
5. The members should quote their folio number in all correspondence with the Bank and at the time of attending
the Annual General Meeting.
6. The instrument of proxy and the Power of Attorney or other authority (if any) under which it is singed or
notarially certified, a copy of such power of attorney/authority in order to be valid, must be deposited at
the Head Office of the Bank at 7-Egerton Road, Lahore not less than 48 hours before the time
appointed for the meeting.
7. Members are requested to notify the change in the address, if any, immediately to our Shares Department,
The Bank of Punjab, Head Office, 7-Egerton Road, Lahore.
8. Entry of the member or his/her duly authorised person will be on strict identification as per specimen signature
on Bank's record.
Auditors' Report to the Members
We have audited the annexed balance sheet of The Bank of Punjab 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,
in which are incorporated the unaudited certified returns from the branches, except for 19 branches which have
been audited by us, 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 by The Bank of Punjab as required by The
Bank of Punjab Act, 1989, 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 Bank of Punjab Act, 1989, and the Banking Companies Ordinance,
1962 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 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 cash flow statement together with the notes
forming part thereof give the information required by The Bank of Punjab Act, 1989, and the
Banking Companies Ordinance, 1962 in the manner so required and give a true and fair view of
the state of the Bank's affairs as at December 31, 1999 and of its true balance of the profit and 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 Bank and deposited in the Central Zakat Fund established under section 7 of that Ordinance.
Lahore - March 28, 2000 Ford, Rhodes, Robson, Morrow
Chartered Accountants
Balance Sheet as at December 31, 1999
Note 1999 1998
(Rupees in thousands)
ASSETS
CASH 4 2,021,955 3,629,570
BALANCE WITH OTHER BANKS 5 2,071,514 2,415,827
MONEY AT CALL AND SHORT NOTICE 1,750,000 250,000
INVESTMENTS 6 4,990,619 6,580,583
ADVANCES - NET OF PROVISION 7 6,150,648 5,611,527
OPERATING FIXING ASSETS 8 230,646 233,601
CAPITAL WORK IN PROGRESS 9 33,749 44,807
OTHER ASSETS 10 965,776 1,119,723
----------- -----------
18,214,907 19,885,638
LIABILITIES
DEPOSITS & OTHER ACCOUNTS 11 15,019,100 17,101,481
BORROWINGS FROM BANKS, AGENTS ETC. 12 712,944 295,262
BILLS PAYABLE 159,434 248,047
OTHER LIABILITIES 13 497,275 442,933
DEFERRED LIABILITIES 14 3,000 3,000
----------- -----------
16,391,753 18,090,723
----------- -----------
NET ASSETS 1,823,154 1,794,915
REPRESENTED BY:
SHARE CAPITAL 15 851,880 774,436
RESERVE FUND & OTHER RESERVES 16 971,049 1,020,343
UNAPPROPRIATED PROFIT 225 136
----------- -----------
SHAREHOLDERS' EQUITY 1,823,154 1,794,915
========== ==========
MEMORANDUM ITEMS
BILLS FOR COLLECTION 17 202,254 261,252
ACCEPTANCES, ENDORSEMENTS AND
OTHER OBLIGATIONS 1,001,008 905,581
CONTINGENT LIABILITIES AND COMMITMENTS 18
The annexed notes form an integral part of these accounts.
CHAIRMAN MANAGING DIRECTOR DIRECTOR DIRECTOR
Profit and loss Accounts for the year ended December 31, 1999
Note 1999 1998
(Rupees in thousands)
Mark-up/interest and discount and return earned 2,260,770 2,259,608
Less: Cost/Return on deposits, borrowings etc. 1,510,145 1,755,443
---------- ----------
750,625 504,165
Fees, commission & brokerage 67,546 58,521
Loss from investment securities (2,357) (474)
Dividend income 71,258 46,738
Other operating income 19 25,725 26,150
---------- ----------
162,172 130,935
---------- ----------
912,797 635,100
Operating expenses:
Administrative expenses 20 722,009 601,368
Provision against non-performing advances 7.2 81,230 (123,615)
Provision for diminution in value of investment -- 27,273
Bad debts written off directly 7.3 -- 337
---------- ----------
803,239 505,363
---------- ----------
109,558 129,737
Other income 21 17,269 7,561
---------- ----------
126,827 137,298
Other charges 22 2,088 1,683
---------- ----------
Profit before taxation 124,739 135,615
Taxation - Current 23 96,500 12,500
---------- ----------
Profit after taxation 28,239 123,115
Unappropriated profit brought forward 136 465
---------- ----------
Profit available for appropriation 28,375 123,580
APPROPRIATIONS
Transfer to:
Statutory reserve 5,650 25,000
Special reserve 12,500 --
Reserve for issue of bonus shares -- 77,444
General reserve 10,000 21,000
---------- ----------
28,150 123,444
---------- ----------
Unappropriated profit carried forward 225 136
========== ==========
Earnings per Share - (Rupees) 32 0.33 1.45
========== ==========
The annexed notes form an integral part of these accounts.
CHAIRMAN MANAGING DIRECTOR DIRECTOR DIRECTOR
Cash Flow Statements for the year ended December 31, 1999
Note 1999 1998
(Rupees in thousands)
CASH FLOW FROM OPERATING ACTIVITIES
Profit before taxation 124,739 135,615
Add/Less: loss/(profit) from:
Investment Securities 2,357 474
Dividend income (71,258) (46,738)
Profit on disposal of fixed assets (2,692) (55)
---------- ----------
53,146 89,296
Adjustment for non-cash charges
Depreciation 26,160 29,730
Provision for diminution in the value of investments 27,273
Provision against non-performing advances 81,230 (123,615)
Amortization of deferred cost 2,088 1,683
---------- ----------
109,478 (64,929)
---------- ----------
162,624 24,367
(Increase)/decrease in operating assets
Government securities 1,404,885 637,000
Advances (620,351) (423,388)
Other assets (excluding advance tax, deferred cost
and accrued dividend) 102,908 385,999
---------- ----------
887,442 599,611
Increase/(decrease) in operating liabilities
Deposits & other accounts (2,082,381) 1,304,006
Bills payable (88,613) 33,884
Other liabilities (excluding provision for taxation) 54,342 (8,326)
---------- ----------
(2,116,652) 1,329,564
---------- ----------
Cash flow before tax (1,066,586) 1,953,542
Income tax paid (47,549) (193,186)
---------- ----------
Net cash flow from operating activities (1,114,135) 1,760,356
---------- ----------
CASH FLOW FROM INVESTING ACTIVITIES
Investment Securities purchased (415,829) (1,366,185)
Net sale proceeds of Investment Securities 598,550 732,226
Dividend income 71,258 167,413
Fixed capital expenditure (13,123) (22,885)
Sale proceeds of fixed assets 3,669 362
---------- ----------
Net cash used in investing activities 244,525 (489,069)
---------- ----------
CASH FLOW FROM FINANCING ACTIVITIES
Borrowings from other banks 417,682 86,295
---------- ----------
Net cash flow from financing activities 417,682 86,295
---------- ----------
Increase/(decrease) in cash and cash equivalents for the year (451,928) 1,357,582
Cash and cash equivalents at the beginning of the year 6,295,397 4,937,815
---------- ----------
Cash and cash equivalents at the end of the year 5,843,469 6,295,397
========== ==========
Cash and cash equivalents
Cash 2,021,955 3,629,570
Balances with other banks 2,071,514 2,415,827
Money at call and short notice 1,750,000 250,000
---------- ----------
5,843,469 6,295,397
========== ==========
CHAIRMAN MANAGING DIRECTOR DIRECTOR DIRECTOR
Notes to the Accounts for the year ended December 31, 1999
1. THE BANK AND ITS BUSINESS
The Bank of Punjab was constituted in pursuance of The Bank of Punjab Act, 1989, and was given the
status of scheduled bank by the State Bank of Pakistan on September 19, 1994. The Bank is listed on
Lahore & Karachi Stock Exchanges. The majority shares of the bank are held by the Government of the
Province of the Punjab.
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 utilised and the appropriate portion of mark up thereon.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
3.1 Accounting Convention
These accounts have been prepared under the historical cost convention and are in conformity with
the generally accepted accounting principles of banking institutions in Pakistan.
3.2 Retirement Benefits
The management of the bank approved a Provident Fund Scheme, effective from July 01, 1997,
covering all its permanent employees. Equal monthly contributions are made, both by the bank and
the employees to the fund, at the rate of 8.33% of basic pay. Gratuity Scheme is under contemplation,
which will be introduced in due course. The rules and regulations pertaining to the same are in
process of being finalized.
3.3 Taxation 
Provision for taxation is based on taxable income after taking into account applicable exemptions
and rebates, if any, as laid down in the Income Tax Ordinance, 1979.
The bank provides for deferred tax by using the liability method on all temporary differences.
Deferred tax debits are not accounted for.
3.4 Investments
Investment securities are stated at cost less provision for permanent diminution in value. Profit and
loss on sale of investments is dealt with through the profit and loss account in the year in which
that arises.
The bank enters into transactions of re-purchase and re-sale of registered Government securities
at contracted rates for specified period of time with other financial institutions. These are recorded
as follows:
a) In case of sale under re-purchase obligations, the 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 the respective original cost; and
b) In case of purchase under re-sale obligations, the securities are booked at the contracted purchase
price and the differential of the contracted purchase price and re-sale price is amortised over
the period of their contract and recorded under mark up/interest and discount and/or return
earned.
3.5 Advances
Loans and advances are stated at their principal amounts, net of the provisions for loan losses. The
specific provisions for possible loan losses are determined on the basis of Prudential Regulations
issued by the State Bank of Pakistan. Mark up recoverable on classified advances is excluded from
income in the profit and loss account.
3.6 Tangible Fixed Assets
Fixed assets, other than land which is not depreciated, are stated at cost less accumulated depreciation.
Depreciation is computed over the useful economic lives of the related assets and charged to income
applying diminishing balance method except motor vehicles and computer equipment on which the
depreciation is charged on straight line method. Full year's depreciation is charged in the year of
acquisition of an asset where the asset has been in use for more than six months in the accounting
year. No depreciation is provided in the year of disposal.
Maintenance and normal repairs are charged to income as and when incurred. Major repairs and
improvements are capitalized. Gains or losses, if any, on disposal of fixed assets are included in
current income.
3.7 Revenue Recognition
Profit on advances and investments is recognized on accrual basis.
Dividends are recognized as and when right to receive is established.
3.8 Deferred Cost
The expenditure incidental to the opening of new branches is deferred and written off over a period
of 36 months from the month of incurrence.
3.9 Foreign currencies
Assets and liabilities in foreign currencies have been translated into Pak Rupees at the rate of
exchange approximating those ruling at the balance sheet date except those covered at contracted
rates. Foreign bills purchased and foreign exchange contracts other than those relating to foreign
currency deposits are valued at the rate applicable to the respective maturities of relevant foreign
bills purchased and foreign exchange contracts. Exchange gains and losses on translation are dealt
with through profit and loss account.
Note 1999 1998
(Rupees in thousands)
4. CASH
In hand - local currency 415,363 368,965
- foreign currencies 9,639 31,329
With State Bank of Pakistan in:
Foreign currency deposit account 41,519 --
Current account 796,182 1,081,337
With National Bank of Pakistan
In current account 759,252 2,147,939
----------- -----------
2,021,955 3,629,570
========== ==========
5. BALANCES WITH OTHER BANKS
In Pakistan
in Current Account (Note:5.1) 2,011,648 1,723,566
in Deposit Account 21,300 617,764
----------- -----------
2,032,948 2,341,330
Outside Pakistan
in Current Account 38,566 37,631
in Deposit Account -- 36,866
----------- -----------
38,566 74,497
----------- -----------
2,071,514 2,415,827
========== ==========
5.1 It includes interest bearing current account.
6. INVESTMENTS (at cost less provision)
Dealing Securities:
Federal and Provincial Governments Securities:
Federal Investment Bonds 225,000 513,000
Government of Pakistan Market Treasury Bills 144,010 --
Investment Securities:
Federal and Provincial Governments Securities:
Federal Investment Bonds 650,000 1,248,000
Government of Pakistan Market Treasury Bills -- 651,195
Foreign Exchange Bearer Certificates -- 11,700
Investments in subsidiary companies and
associated undertakings (Note: 6.1 ) 40,000 40,000
Fully paid-up ordinary shares
Listed companies 91,305 98,769
Unlisted companies 1,500 1,500
Debentures, Bonds, Participation Term Certificates
and Term Finance Certificates 114,562 13,733
Other investments
National Investment Trust Units (Note:6.2) 2,184,359 2,164,359
Certificates of Investment/Deposits 784,785 1,381,000
Placements with financial institutions 780,000 485,000
----------- -----------
5,015,521 6,608,256
Less: Provision for diminution in the value of investments (24,902) (27,673)
----------- -----------
4,990,619 6,580,583
========== ==========
(Market value of quoted investments Rs.(thousand) 2,642,993 (1998: Rs.(thousand) 1,038,545) and book
value of unquoted investments Rs.(thousand) 1,772,015 (1998: Rs.(thousand) 4,333,028)).
Investment in National Investment Trust units includes units having book value of
Rs.(thousand) 238,920 (1998: Rs.(thousand) 239,458) pledged with National Bank of Pakistan against
Running Finance facilities.
6.1 This represents investment in 4,000,000 shares of Rs. 10 each as 100% investment in the equity of
Punjab Modaraba Services (Pvt.) Limited a subsidiary company (Break-up value as per audited accounts
as at December 31, 1999 :Rs.(thousand) 42,045 (1998: Rs.(thousand) 40,856)). This has been
accounted for, using Investment method.
6.2 The Government of Pakistan has issued a letter of comfort in favour of the bank under which a guaranteed
price of Rs. 13.70 for each National Investment Unit for redemption has been assured, provided that
the bank holds this investment for a minimum period of five years.
1999 1998
(Rupees in thousands)
7. ADVANCES
Loans, cash credits, overdrafts etc:
In Pakistan 6,186,864 5,568,220
Outside Pakistan -- --
----------- -----------
6,186,864 5,568,220
Bills discounted and purchased
(excluding, Government Treasury Bills)
Payable in Pakistan 53,899 73,301
Payable outside Pakistan 143,945 122,836
----------- -----------
197,844 196,137
----------- -----------
6,384,708 5,764,357
General and specific provision for
non-performing advances (Note: 7.2) (234,060) (152,830)
----------- -----------
6,150,648 5,611,527
========== ==========
Advances include Rs. (thousand) 1,025,416 (1998: Rs. (thousand) 849,012)
which have been placed on non-performing status as per the Prudential
Regulations of State Bank Of Pakistan.
7.1 Particulars of Advances
In local currency 6,150,648 5,611,527
In foreign currencies -- --
---------- ----------
6,150,648 5,611,527
========== ==========
Debts considered good in respect of
which the bank is fully secured 6,046,852 5,610,841
Debts considered good for which the bank holds no other
security than the debtors' personal security -- --
Debts considered good secured by the personal liabilities
of one or more parties in addition to the personal
security of the debtors 103,796 686
Debts considered doubtful or bad not provided for -- --
---------- ----------
6,150,648 5,611,527
========== ==========
Balance Maximum
outstanding amount
as at during
Dec. 31, 1999 the year
Debts due by directors or executives of the bank or any
of them either severally or jointly with any other persons 114,738 128,574
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 45,567 135,635
These represent the aggregate amount of advances outstanding. The maximum amount has been
calculated by reference to month end balances.
1999 1998
(Rupees in thousands)
7.2 Particulars of provision against non-performing advances
Opening balance 152,830 276,445
Charge for the year 164,265 60,757
Reversals (83,03 5) ( 184,3 72)
----------- -----------
81,230 (123,615)
----------- -----------
Closing balance 234,060 152,830
========== ==========
Provision against:
Advances to banks -- --
Advances to others 234,060 152,830
----------- -----------
234,060 152,830
========== ==========
7.3 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 rupees or above
allowed to a person(s) during the year ended December 31, 1999 is given at Annexure-I.
8. OPERATING FIXED ASSETS
Cost
Additions/ Depreciation Book value Rate of
At Jan. 01 (Deletions)/  At Dec. 31  At Jan. 01  Charge for  (Deletions)/ At At Dec. 31 Depreciation
1998 Adjustments 1999 1998 the year Adjustments  Dec. 31 1999 1999 %
(Rupees in thousands)
Land - freehold 49,982 33 50,015 -- -- -- -- 50,015 --
Buildings on
freehold land 109,101 13,855 122,956 18,845 4,520 23,352 99,604 5
(13)
Furniture, fixture and
office equipments 154,144 6,921 161,072 78,361 12,564 (72) 90,783 70,289 10 to 30
(207) (70)
214
Vehicles 60,621 3,084 60,886 43,041 9,076 (3,904) 50,148 10,738 20
(4,746) 1,935
1,927
----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
373,848 23,893 394,929 140,247 26,160 (3,976)    164,283 230,646
(4,953) 1,852
2,141
========== ========== ========== ========== ========== ========== ========== ==========
1998 354,364 13,404 373,848 105,332 29,730 (323) 140,247 233,601
(630) 5,508
6,710
========== ========== ========== ========== ========== ========== ========== ==========
8.1 Buildings on freehold land include building (cost Rs.(thousand) 13,605) transferred from Capital Work
  in Progress during the year, for which bank is in process of obtaining legal title.
8.2 Disposal of Fixed Assets
Book Sale Mode of Particulars of
Particulars of assets Cost Value Proceeds Disposal Purchasers
(Rupees in thousands)
Vehicles 733 147 440 Negotiation Mr. Asif Jamshed Shah
Ex- M.D
Vehicles 187 -- 143 Negotiation Mr. S.K. Durrani
Ex-Employee
Vehicles 439 88 215 Negotiation Mr. M. Shaft Arshad
Ex- M.D
Vehicles 427 85 215 Negotiation Mr. Ziaullah Qureshi
Ex-GM
Vehicles 427 85 215 Negotiation Mr. Tariq Hameed
Ex-GM
Vehicles 54 28 43 Insurance M/S New Jubilee
claim Insurance Co.
Vehicles 206 -- 136 Auction Mr. Imran Inam
Vehicles 210 42 161 Auction Mr. Latif Ahmed
Vehicles 210 42 108 Auction Mr. Mirza Imtiaz Ahmed
Vehicles 210 42 148 Auction Mr. Faisal Butt
Vehicles 210 42 158 Auction Mr. Faisal Butt
Vehicles 223 561 Auction Mr. Bahadur Khan
Vehicles 235 47 180 Auction Mr. Naveed Yousaf
Vehicles 240 48 180 Auction Mr. Naveed Yousaf
Vehicles 180 36 132 Auction Mr. M. Aleem
Vehicles 556 111 385 Auction Mr. M. Saeed
1999 1998
(Rupees in thousands)
9. CAPITAL WORK IN PROGRESS 33,749 44,807
This represents advance payments for purchase of premises. ========== ==========
10. OTHER ASSETS
Stationery and stamps on hand 16,121 14,911
Income/mark-up accrued on advances and investments 370,185 454,450
Prepaid exchange risk fee 2,625 7,165
Other advances, deposits, advance rent and other prepayments 41,087 30,722
Taxation (payments less provisions) 446,436 495,387
Deferred costs -- 1,134
Branch adjustment account 21,307 17,802
Suspense account 810 16,765
Excise duty recoverable 19,316 9,822
Receivable from Fidelity Investment Bank Ltd. -- 33,462
Receivable from National Investment Trust (Note: 10.1) 32,047 28,892
Due from State Bank of Pakistan 8,609
Others 7,233 9,211
----------- -----------
965,776 1,119,723
=========== ===========
10.1 This represents Zakat deducted by National Investment
Trust on dividend paid. The Bank of Punjab has filed suit
against National Investment Trust for the recovery of this
amount. The matter is still pending in court.
11. DEPOSITS AND OTHER ACCOUNTS
Fixed deposits 4,273,426 7,091,933
Savings deposits 6,505,669 5,740,354
Current accounts 3,207,114 3,770,046
Margin deposits 75,622 99,702
Deposits and other accounts of banks 758,832 177,198
Call deposits 162,737 196,315
Sundry deposits 35,700 25,933
------------ ------------
15,019,100 17,101,481
=========== ===========
11.1 Particulars of deposits and other accounts
In local currency 14,718,177 16,471,454
In foreign currencies 300,923 630,027
15,019,100 17,101,481
=========== ===========
12. BORROWINGS FROM OTHER BANKS, AGENTS ETC.
In Pakistan 712,944 295,262
Outside Pakistan -- --
------------ ------------
712,944 295,262
=========== ===========
12.1 Particulars of borrowings from other banks,
agents etc.
In local currency 712,944 295,262
In foreign currencies -- --
------------ ------------
712,944 295,262
=========== ===========
12.2 Secured
Loans from banks and other financial Institutions -- --
Loans from subsidiary companies, managed
modarabas and associated undertakings -- --
Loans from directors (including chief executive) of the bank -- --
Loans from State Bank of Pakistan
- Export refinance 212,944 295,262
Unsecured
Money at call borrowings from other banks 500,000 --
------------ ------------
712,944 295,262
=========== ===========
The rate of mark-up on above borrowing is 6% to
12% per annum (1998: 6% per annum).
13. OTHER LIABILITIES
Mark-up / Interest on loans / borrowings 46,994 25,839
Profit payable on PLS deposits and other accounts 353,749 371,972
Interest on foreign currency deposits 4,750 4,544
Mark-up received in advance 4,464 --
Accrued expenses 16,751 2,018
Sundry creditors 70,029 37,817
Withholding tax payable 479 732
Others 59 11
----------- -----------
497,275 442,933
=========== ===========
14. DEFERRED LIABILITIES
Deferred Tax provision 3,000 3,000
=========== ===========
15. SHARE CAPITAL
Authorized
100,000,000 (1998: 100,000,000) ordinary
shares of Rs. 10/- each 1,000,000 1,000,000
=========== ===========
Issued, subscribed and paid-up:
15,750,000 (1998: 15,750,000) ordinary
shares of Rs. 10/- each issued for cash 157,500 157,500
69,437,976 (1998: 61,693,615) ordinary
shares of Rs. 10/- each issued as fully paid bonus shares 694,380 616,936
----------- -----------
851,880 774,436
=========== ===========
16. RESERVE FUND AND OTHER RESERVES
Reserve for
Capital Statutory Special  bonus shares  General 1999 1998
(Rupees in thousands)
Balance at the beginning
of the year 2,049 179,000 -- 77,444 761,850 1,020,343 967,302
Bonus shares issued
during the year -- -- -- (77,444) -- (77,444) (70,403)
Transfer from profit and
loss account -- 5,650 12,500 -- 10,000 28,150 123,444
----------- ----------- ----------- ----------- ----------- ----------- -----------
Balance at the end of the year  2,049 184,650 12,500 -- 771,850 971,049 1,020,343
========== ========== ========== ========== ========== ========== ==========
1999 1998
(Rupees in thousands)
17. BILLS FOR COLLECTION
Payable in Pakistan 75,484 92,005
Payable outside Pakistan 126,770 169,247
----------- -----------
202,254 261,252
========== ==========
18. CONTINGENT LIABILITIES AND COMMITMENTS
CONTINGENCIES
Money for which the bank is contingently liable:
a) Contingent liability in respect of guarantees given
on behalf of directors or officers or any of them
(severally or jointly) with any other person,
subsidiaries and associated undertakings -- --
b) Contingent liability in respect of guarantees given favouring:
i) Government 229,375 233,068
ii) Banking companies and other financial institutions 17,283 36,396
iii) Others 30,318 48,101
c) Liability on bills of exchange rediscounted -- --
----------- -----------
276,976 317,565
Claims against the bank not acknowledged as debts 251,000 284,462
----------- -----------
527,976 602,027
========== ==========
COMMITMENTS
Commitments in respect of forward exchange contracts
Sale 25,893 68,686
Purchase 181,288 611,876
Commitments in respect of 'Repo' transactions
Repurchase 1,260,000 1,638,972
Resale 535,000 994,454
----------- -----------
2,002,181 3,313,988
2,530,157 3,916,015
========== ==========
19. OTHER OPERATING INCOME
Income from dealing in foreign currencies 20,267 22,919
Miscellaneous charges recovered 5,458 3,231
----------- -----------
25,725 26,150
========== ==========
20. ADMINISTRATIVE EXPENSES
Salaries, allowances etc. 433,895 370,030
Staff Retirement benefits 10,762 9,590
Brokerage and commission 5,627 2,638
Rent, taxes, insurance, electricity etc. 87,687 76,322
Legal and professional charges 4,169 6,346
Communication expenses 20,008 23,217
Repairs and maintenance 10,896 8,870
Stationery and printing 14,755 11,641
Advertisement and publicity 3,631 3,808
Auditors' remuneration (Note: 20.1) 539 419
Depreciation (Note: 8) 26,160 29,730
Others 103,880 58,757
----------- -----------
722,009 601,368
========== ==========
20.1 Auditors' remuneration
Audit fee 220 200
Special certifications/examinations and
sundry advisory services 265 165
Out of pocket expenses 54 54
----------- -----------
539 419
========== ==========
21. OTHER INCOME
Rent 2,094 1,512
Net profit on sale of fixed assets 2,692 55
Other receipts 12,483 5,994
----------- -----------
17,269 7,561
========== ==========
22. OTHER CHARGES
Amortization of preliminary, formation and pre-
operating expenses 2,088 1,683
----------- -----------
2,088 1,683
========== ==========
23. TAXATION
Charge for the year 96,500 12,500
----------- -----------
96,500 12,500
========== ==========
24. REMUNERATION OF DIRECTORS AND EXECUTIVES
The aggregate amount charged in the accounts for remuneration including all benefits, to the Chairman
and Managing Director of the bank was as follows:
Chairman              Managing Director
1999 1998 1999 1998
(Rupees in thousand)
Managerial remuneration 1,356 -- -- --
Rent and house maintenance 509 -- -- --
Utilities 46 205 -- --
Medical 18 18 -- --
Others 34 21 -- --
----------- ----------- ----------- -----------
1,963 244 -- --
========== ========== ========== ==========
Number of persons 1 1 -- --
========== ========== ========== ==========
24.1 Remuneration to Chairman includes arrears of salary and benefits
(amounting to Rs.(thousand) 1,865) paid to Ex-Chairman.
25. MATURITIES OF ASSETS AND LIABILITIES
Over one Over one
Upto one month to year to Over
Total month one year five years five years
(Rupees in thousand)
ASSETS
Cash 2,021,955 2,021,955 -- -- --
Balance with other banks 2,071,514 2,050,214 21,300 -- --
Money at call and short notice 1,750,000 700,000 1,050,000 -- --
Investments 4,990,619 308,795 1,771,937 2,868,387 41,500
Advances 6,150,648 1,807,300 2,954,964 902,579 485,805
Operating fixed assets 230,646 2,529 26,373 48,297 153,447
Capital work in progress 33,749 -- 33,749 -- --
Other assets 965,776 30,997 919,957 11,807 3,015
----------- ----------- ----------- ----------- -----------
18,214,907 6,921,790 3,831,070 683,767
========== ========== ========== ========== ==========
LIABILITIES
Deposits and other accounts 15,019,100 7,812,831 4,592,006 2,129,722 484,541
Borrowings from other banks 712,944 -- 712,944 -- --
Bills payable 159,434 109,271 47,901 770 1,492
Other liabilities 497,275 420,271 77,004 -- --
Deferred liability for taxation 3,000 -- -- -- 3,000
----------- ----------- ----------- ----------- -----------
16,391,753 8,342,373 5,429,855 2,130,492 489,033
========== ========== ========== ========== ==========
NET BALANCE 1,823,154 (1,420,583) 1,348,425 1,700,578 194,734
Represented by ========== ========== ========== ========== ==========
share holders' equity 1,823,154
==========
26. SEGMENT ANALYSIS
26.1 Geographic segment Acceptance,
endorsements
Profit before Total assets Net assets Bills for and other
taxation employed employed collection obligations
(Rupees in thousand)
Pakistan 124,739 18,214,907 1,823,154 202,254 1,001,008
========== ========== ========== ========== ==========
26.2 Segment by class of business
Deposits Advances
Rupees Percentage Rupees Percentage
in '000' in '000'
Agri., Forestry, Hunting & Fishing 84,034 0.56% 700,490 11.39%
Chemical & Chemical Products 7,986 0.05% 155,937 2.54%
Food Industry 55,522 0.37% 84,106 1.37%
Insurance 10,377 0.07% -- 0.00%
Cement 13,157 0.09% 535,000 8.70%
Textile 34,715 0.23% 1,407,640 22.88%
Mining & Quarrying 11,179 0.07% -- 0.00%
Manufacturing Industries 89,133 0.60% 598,609 9.72%
Real Estate Dealers 26,278 0.17% -- 0.00%
Services 180,921 1.20% -- 0.00%
Transport & Communication 417,015 2.78% 183,182 2.98%
Wholesale & Retail Traders 738,000 4.92% 505,937 8.22%
Financial Institutions 680,034 4.53% 352,915 5.74%
Electricity, Gas, Water &
Sanitation Services 116,983 0.78% 285,139 4.64%
Construction 386,531 2.57% 116,739 1.90%
Trust and Non profit Organizations 179,196 1.19% -- 0.00%
Others 11,988,039 79.82% 1,224,954 19.92%
---------- ---------- ---------- ----------
15,019,100 100.00% 6,150,648 100.00%
========== ========== ========== ==========
26.3 Segment by sector
Deposits Advances
Rupees Percentage Rupees Percentage
in '000' in '000'
Public/Government  5,072,151 33.77% 333,167 5.42%
Private 9,946,949 66.23% 5,817,481 94.58%
---------- ---------- ---------- ----------
15,019,100 100.00% 6,150,648 100.00%
========== ========== ========== ==========
27. CURRENCY BREAK DOWN OF ASSETS AND LIABILITIES
Assets Liabilities
Rupees Rupees
in '000' Percentage in '000' Percentage
Pak Rupees 18,125,189 99.51% 17,913,984 98.35%
U.S. Dollars 83,367 0.46% 263,375 1.45%
Pound Sterlings 3,413 0.02% 26,091 0.14%
Destsche Marks 711 0.00% 11,457 0.06%
Japanese Yen 202 0.00% -- 0.00%
Other Currencies 2,025 0.01% -- 0.00%
---------- ---------- ---------- ----------
18,214,907 100.00% 18,214,907 100.00%
========== ========== ========== ==========
1999 1998
(Rupees in thousands)
28. TRANSACTIONS WITH ASSOCIATED UNDERTAKINGS
i) Advances given during the year 180,000 150,000
ii) Advances repaid during the year 150,000 150,000
iii) Placements 150,000 150,000
iv) Deposits (at the year end) 64 30
v) Mark-up/return earned 3 8,832 49,153
29. STATEMENT OF CHANGES IN EQUITY
Reserve for Un-
Share Capital Statutory  Special Issue of     General appropriated
Capital Reserve Reserve  Reserve bonus shares  Reserve Profit Total
(Rupees in thousand )
Balance as at January 1, 1998 704,033 2,049 154,000 70,403 -- 740,850 465 1,671,800
Profit for the year -- -- -- -- -- -- 123,115 123,115
Bonus shares issued during the year 70,403 -- -- (70,403) -- -- -- --
Transferred from profit & loss account -- -- 25,000 77,444 -- 21,000 (123,444) --
----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
Balance as at January 1, 1999 774,436 2,049 179,000 -- 77,444 761,850 136 1,794,915
Profit for the year .... -- -- -- -- -- -- 28,239 28,239
Bonus shares issued during the year 77,444 -- -- -- (77,444) -- -- --
Transferred from profit & loss account -- -- 5,650 12,500 -- 10,000 (28,150) --
----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
Balance as at December 31, 1999 851,880 2,049 184,650 12,500 -- 771,850 225 1,823,154
========== ========== ========== ========== ========== ========== ========== ==========
30. FINANCIAL ASSETS AND LIABILITIES
30.1 Exposure to interest rate risk and sensitivity of financial assets and financial liabilities of the bank
based on earlier of contractual re-pricing or maturity dates are summarized below:
Exposed to interest rate risk
Over one Over one Not exposed Effective
Upto one month to year to five Over five to interest interest
Total month one year year years rate risk rate
ASSETS
Cash 2,021,955 800,771 -- -- -- 1,221,184 5.00%to 10.00%
Balance with other banks 2,071,514 1,951,517 21,300 -- -- 98,697 6.00% to 12.00%
Money at call and short notice 1,750,000 700,000 1,050,000 -- -- -- 11.85% to 14.50%
Investments 4,990,619 308,240 1,682,622 707,496 -- 2,292,261 11.20%to20.00%
Advances 6,150,648 1,807,300 2,954,964 902,579 485,805 -- 5.00% to 19.00%
Other assets 456,893 -- -- -- -- 456,893 --
---------- ---------- ---------- ---------- ---------- ----------
17,441,629 5,567,828 5,708,828 1,610,075 485,805 4,069,035
========== ========== ========== ========== ========== ==========
LIABILITIES
Deposits and other accounts 15,019,100 4,331,514 4,592,006 2,129,722 484,541 3,481,317 5.00% to 13.00%
Borrowings from other banks 712,994 -- 712,994 -- -- -- 6.00% to 12.00%
Bills payable 159,434 -- -- -- -- 159,434 --
Other liabilities 476,844 -- -- -- -- 476,844 --
---------- ---------- ---------- ---------- ---------- ----------
16,368,372 4,331,514 5,305,000 2,129,722 484,541 4,117,595
========== ========== ========== ========== ========== ==========
Sensitivity gap 1,073,257 1,236,314 403,886 (519,647) 1,264 (48,560)
Cumulative sensitivity gap 1,640,200 1,120,553 1,121,817 1,073,257
30.2 Credit Risk
Appropriate investigation/analysis are conducted at the time of investment or credit approvals in order
to ensure high credit quality in the portfolio. The risk is managed and reduced by obtaining adequate
collaterals as well as by diversifying the portfolios which also helps in avoiding the concentrations. As
a matter of prudence, provisions against non-performing advances and also for the diminution in value
of investments are fully provided for in accordance with the relevant Prudential Regulations issued by
the State Bank of Pakistan from time to time.
Concentration of credit risk in different industrial and geographical segments is disclosed in note 26.
30.3 Foreign Exchange Risk Management
Foreign exchange risk associated with the foreign currency assets and liabilities due to their translation
and conversion into Pakistan Rupees is appropriately covered through forward exchange contracts with
the State Bank of Pakistan.
31. FAIR VALUE OF FINANCIAL INSTRUMENTS
Carrying value of financial instruments approximates their fair value expect for investments as explained
in note 6.
1999 1998
(Rupees in thousands)
32. EARNINGS PER SHARE
Net profit for the year attributable
to ordinary share holders (Rs. 000) 28,239 123,115
Weighted average number of ordinary
shares outstanding during the year 85,187,976 85,187,976
---------- ----------
Earnings per share (Rupees) 0.33 1.45
=========== ===========
3,185 3,304
33. AVERAGE NO. OF EMPLOYEES
34. GENERAL
- Previous year's figure have been rearranged, wherever necessary, for the purpose of comparison.
- Figures have been rounded off to the nearest rupees in the financial statements.
CHAIRMAN MANAGING DIRECTOR DIRECTOR DIRECTOR
Statement showing written-off loans or any other financial relief of five hundred thousand
rupees or above provided during the year ended December 31, 1999
Outstanding
Name of individuals / liabilities on the Other
Sr. Name and address Partner / Directors opening day of Amount  financial relief Total
No. of the person (with NIC No.) Father's Name          year written-off provided (6+7)
1 2 3 4 5 6 7 8
(Rupees in thousand)
1. Manzoor-ul-Hassan Industries Mian Manzoor-ul-Hassan Ghulam Hussain 678 -- 678 678
39/40, Small Business Estate, 224-37-117559
Gujranwala.
2 M. Anwar Waheed             M. Anwar Waheed      Ch. Muhammad Bux               4,631 -- 2,173 2,173
301-Lahore Stock Exchange Building,  270-31-257287
Lahore.
3. Jallo Textile (Pvt.) Ltd. 1) Rashid Ahmed Gardee Ibrahim Yousaf 1,750 -- 1,500 1,500
A1-Faisal Town 267-39-181048
Lahore Cantt. 2) Hajran Rashid Gardee W/O Rashid Ahmed Gardee
267-39-181051
3) Rubina Rashid Gardee D/O Rashid Ahmed Gardee
267-63-181049
4) Ibrahim Rashid Gardee Rashid Ahmed Gardee
267-87-181050
5) Mohammad Ali Gardee Ibrahim Rashid Gardee
6) Iftikhar Ali Qureshi Haji Ehsan Ali
7) Zafar Iqbal Ghulam Haider
277-89-031681
4. Tariq Nazir Tariq Nazir Muhammad Nazeer 3,630 -- 817 817
22-D, Officers Colony, 277-50-321166
Ghazi Road, Lahore
5. N.Q. Printers Naeem Aftab Qureshi M. Aftab Qureshi 4,320 -- 845 845
6-Tape Road, 265-39-027249
Lahore.
6. Muhammad Farooq Mustafa Mohammad Farooq Mustafa Ch. Charagh Din 11,506 -- 902 902
H. No. D-3, Phase IV, Ghazi St. 517-62-342650
Defence Housing Society,
Karachi.
7. Naureen Azhar Wali Muhammad Naureen Azhar Wali Muhammad W/O Azhar Wali Muhammad  10,432 -- 920 920
H. No. D-3, Phase IV, Ghazi St. 514-51-210809
Defence Housing Society,
Karachi.
8. Zafar Ara Begum Zafar Ara Begum W/o Ch. Charagh Din 11,265 -- 843 843
H. No. D-3, Phase IV, Ghazi St. 514-86-082288
Defence Housing Society,
Karachi.
9. Azhar Wali Muhammad Azhar Wali Muhammad Wali Mohammad 10,848 -- 920 920
H. No. D-3, Phase IV, Ghazi St. 514-93-059329
Defence Housing Society,
Karachi.
10. Sh. Muhammad Anwar Sh. Muhammad Anwar Sh. Nazir Armed 1,183 -- 633 633
12-New Tolinton Market, 272-89-163796
Shadman, Lahore.
Punjab Modaraba Services (Pvt.) Ltd.
Auditors' Report to the Members
We have audited the annexed Balance Sheet of Punjab Modaraba Services (Private) Limited as at December 31,
1999 and the related Profit and Loss Account and Statement of Changes in Financial Position (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, we report that:-
(a) in our opinion, proper books of account have been kept by the Company 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 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 company's business; and
iii) the business conducted, investments made and the expenditure incurred during the year were
in accordance with the objects of the company.
(c) in our opinion and to the best of our information and according to the explanations given to us, the
Balance Sheet, Profit and Loss Account and the Statement of Changes in Financial Position (Cash
Flow Statement), together with the notes forming part thereof, give the information required by
the Companies Ordinance, 1984 in the manner so required and respectively give a true and fair
view of the state of the company's affairs as at December 31, 1999 and of the profit and the changes
in financial position for the year then ended; and
(d) in our opinion, no zakat was deductible at source under the Zakat and Ushr Ordinance, 1980.
Lahore - March 28, 2000 Ford, Rhodes, Robson, Morrow
Chartered Accountants
Balance Sheet as December 31, 1999
Note 1999 1998
(Rupees) (Rupees)
PROPERTY AND ASSETS
Tangible fixed assets 3 347,504 566,123
Long term investments 4 40,000,000 40,000,000
Prepayments and receivables 5 4,069,884 2,401,488
Balance at bank - Current account 811 811
---------- ----------
44,418,199 42,968,422
========== ==========
CAPITAL AND LIABILITIES
Share capital 6 40,000,000 40,000,000
Unappropriated profit 2,020,406 856,020
---------- ----------
42,020,406 40,856,020
Accrued and other liabilities 7 2,397,793 2,112,402
Contingencies and commitments 8 -- --
---------- ----------
44,418,199 42,968,422
========== ==========
The annexed notes form an integral part of these accounts.
CHIEF EXECUTIVE DIRECTOR
Profit and loss Accounts for the year ended December 31, 1999
Note 1999 1998
(Rupees) (Rupees)
Revenue 9 3,016,462 --
Less: Administrative Expenses 10 867,076 812,788
---------- ----------
Profit / (Loss) before taxation 2,149,386 (812,788)
Provision for taxation 985,000 --
---------- ----------
Profit / (Loss) after taxation 1,164,386 (812,788)
Unappropriated profit brought forward 856,020 1,668,808
---------- ----------
Unappropriated profit carried forward 2,020,406 856,020
---------- ----------
Earnings per share - basic 11 0.29 (0.20)
========== ==========
The annexed notes form an integral part of these accounts.
CHIEF EXECUTIVE DIRECTOR
Cash Flow Statement for the year ended December 31, 1999
1999 1998
(Rupees) (Rupees)
CASH FLOW FROM OPERATING ACTIVITIES
Profit / (Loss) after taxation 1,164,386 (812,788)
Items not involving movement of funds
Depreciation 218,619 218,619
Operating profit before ---------- ----------
working capital changes 1,383,005 (594,169)
(Increase)/decrease in:
Prepayments and receivables (1,668,396) 4,436
---------- ----------
(285,391) (589,733)
---------- ----------
Increase/(decrease) in:
Accrued and other liabilities 285,391 589,733
NET CASH FLOW FROM OPERATING ACTIVITIES -- --
CASH FLOW FROM INVESTING ACTIVITIES -- --
CASH FLOW FROM FINANCING ACTIVITIES -- --
---------- ----------
NET INCREASE/(DECREASE) IN CASH AND BANK BALANCES -- --
CASH AND BANK BALANCES AT THE BEGINNING OF THE YEAR 811 811
---------- ----------
CASH AND BANK BALANCES AT THE END OF THE YEAR 811 811
=========== ===========
CHIEF EXECUTIVE DIRECTOR
Notes to the Accounts for the year ended December 31, 1999
1. THE COMPANY AND ITS OPERATIONS
The company was incorporated in Pakistan as a Private Limited Company and is wholly owned by The
Bank of Punjab. It is primarily engaged in the promotion of modarabas.
2. ACCOUNTING POLICIES
2.1 Revenue Recognition
Investment income is recognised on the basis of establishment of the right to receive.
Management fee is recognised on the basis of accrual by managed modarabas.
2.2 Taxation
Provision for Income tax is made on the basis of taxable income at the current rates of taxation.
2.3 Investment
These are recorded at average cost, however, provision is made for permanent
diminution, if any.
2.4 Tangible Fixed Assets
Fixed assets are stated at cost less accumulated depreciation. Depreciation is provided on straight
line basis at rates disclosed in the fixed assets note which are considered appropriate to write off
the assets over their respective useful lives.
Depreciation is charged from date of acquisition in the year of purchase and upto the date of disposal
in the year in which an asset is disposed off. Gains or losses on disposal are included in income
currently.
3. TANGIBLE FIXED ASSETS
Furniture Motor
and fixture vehicle 1999 1998
Rupees Rupees Rupees Rupees
Cost
Opening balance 20,000 1,083,094 1,103,094 1,103,094
Additions -- -- -- --
---------- ---------- ---------- ----------
Closing balance 20,000 1,083,094 1,103,094 1,103,094
Accumulated depreciation 12,170 743,420 755,590 536,971
---------- ---------- ---------- ----------
Book value 7,830 339,674 347,504 566,123
========== ========== ========== ==========
Depreciation charge
for the year 2,000 216,619 218,619 218,619
========== ========== ========== ==========
Depreciation rates 10% 20%
1999 1998
(Rupees) (Rupees)
4. LONG TERM INVESTMENTS
Managed Modaraba - Quoted -
First Punjab Modaraba
5,232,194 (1998:5,232,194) shares
of Rs. 10/- each 40,000,000 40,000,000
========== ==========
4.1 Market value of above quoted shares at balance sheet
date amounted to Rs. 16,481,411 (1998: Rs. 10,464,388).
Provision for diminution in the value of investments has not
been made as it is considered temporary in view of the manage-
ement intention to hold these investments on long term basis.
5. PREPAYMENTS AND RECEIVABLES
Prepayments 62,847 28,498
Income tax receivable 1,387,990 2,372,990
Dividend Receivable 2,619,047 --
----------- -----------
4,069,884 2,401,488
6. SHARE CAPITAL ========== ==========
Authorised -
5,000,000 (1998: 5,000,000)
Ordinary shares of Rs. 10/- each 50,000,000 50,000,000
========== ==========
Issued, subscribed and paid up -
4,000,000 (1998: 4,000,000)
Ordinary shares of Rs. 10/- each
fully paid up in cash 40,000,000 40,000,000
========== ==========
7. ACCRUED AND OTHER LIABILITIES
Due to Managed Modaraba -
First Punjab Modaraba 2,291,293 1,606,884
Accrued Expenses 106,500 505,518
---------- ----------
2,397,793 2,112,402
========== ==========
8. CONTINGENCIES AND COMMITMENTS
- Additional taxes levied Rs. 15.285 million (1998: Rs. 15.285 million) in respect of prior years not acknowledged
and contested by the company. Out of these additional taxes, a sum of Rs. 2.250 million has been deposited
but not charged to Profit and Loss Account.
- Commitments Rs. Nil (1998: Rs. Nil)
1999 1998
(Rupees) (Rupees)
9. REVENUE
Management fee 397,415 --
Dividend Income 2,619,047 --
----------- -----------
3,016,462 --
========== ==========
10. ADMINISTRATIVE EXPENSES
Salaries and allowances 470,350 470,350
Legal and professional charges 16,000 15,080
Auditor's Remuneration (Note: 10.1) 51,500 21,500
Fee and subscription 51,100 15,460
Insurance 57,967 66,779
Depreciation (Note: 3) 218,619 218,619
Professional tax 1,540 5,000
----------- -----------
867,076 812,788
========== ==========
10.1 Auditor's Remuneration
Audit Fee 50,000 20,000
Out of Pocket Expenses 1,500 1,500
----------- -----------
51,500 21,500
========== ==========
11. EARNINGS PER SHARE - BASIC
Profit attributable to ordinary Shareholders 1,164,386 (812,788)
Number of ordinary shares 4,000,000 (1998: 4,000,000)
Earnings per share - Basic 0.29 (0.20)
========== ==========
12. REMUNERATION OF CHIEF EXECUTIVE
Managerial Remuneration 195,678 195,678
Rent and House Maintenance 88,056 88,056
Utilities 90,349 90,349
Medical 54,000 54,000
Others 42,267 42,267
----------- -----------
470,350 470,350
========== ==========
No. of Persons 1 1
No fees has been paid to the directors for attending ========== ==========
Board meetings ( 1998 :Rs.Nil).
13. TRANSACTIONS WITH ASSOCIATED UNDERTAKINGS
Management Fee Received 397,415 --
Expenses paid by Associated Undertaking 1,081,824 114,113
Dividend Receivable 2,619,047 --
========== ==========
14. FINANCIAL ASSETS AND LIABILITIES
14.1 Credit Risk
The company is not exposed to significant credit risk.
14.2 Fair Value
The fair value of financial assets and liabilities approximates their carrying values except
for the investments as disclosed in Note: 4.
14.3 Interest Rate Risk
The company is not exposed to the interest rate risk.
15. STATEMENT OF CHANGES IN EQUITY
Share Unappropriated Total
Capital Profit
(Rupees)
Balance as at January 1, 1998 40,000,000 1,668,808 41,668,808
Loss for the year -- (812,788) (812,788)
---------- ---------- ----------
Balance as at January 1, 1999 40,000,000 856,020 40,856,020
Profit for the year -- 1,164,386 1,164,386
---------- ---------- ----------
Balance as at December 31, 1999 40,000,000 2,020,406 42,020,406
=========== =========== ===========
16. GENERAL
- Figures have been rounded off to the nearest of rupee.
- Corresponding figures have been re-arranged wherever necessary for the purpose of
comparison.
CHIEF EXECUTIVE DIRECTOR
Consolidated Annual Account of The Bank of Punjab and its Subsidiary
Punjab Modaraba Services (Pvt) Ltd
Auditors' Report to the Members
We have examined the annexed consolidated financial statements comprising consolidated balance sheet of The
Bank of Punjab and its subsidiary Punjab Modaraba Services (Pvt.) Ltd. as at December 31, 1999 and the related
consolidated profit and loss account and consolidated cash flow statement, together with the notes forming part
thereof, for the year then ended. We have also expressed separate opinions on the financial statements of The Bank
of Punjab and its subsidiary Punjab Modaraba Services (Pvt.) Ltd. These financial statements are the responsibility
of the Holding company's management. Our responsibility is to express an opinion on these financial statements
based on our examination.
Our examination was made in accordance with generally accepted auditing guidelines and accordingly included
such test of accounting records and such other auditing procedures as we considered necessary in the circumstances.
In our opinion the consolidated financial statements examined by us present fairly the financial position of The
Bank of Punjab and its subsidiary Punjab Modaraba Services (Pvt.) Ltd. as at December 31, 1999 and the results
of their operations for the year then ended.
Lahore - March 28, 2000 Ford, Rhodes, Robson, Morrow
Chartered Accountants
Consolidated Balance Sheet as at December 31, 1999
Note 1999 1998
(Rupees in thousands)
ASSETS
CASH 4 2,021,955 3,629,570
BALANCE WITH OTHER BANKS 5 2,071,514 2,415,827
MONEY AT CALL AND SHORT NOTICE 1,750,000 250,000
INVESTMENTS 6 4,990,619 6,580,583
ADVANCES - NET OF PROVISION 7 6,150,648 5,611,527
OPERATING FIXED ASSETS 8 230,646 234,167
CAPITAL WORK IN PROGRESS 9 33,749 44,807
OTHER ASSETS 10 969,846 1,122,124
----------- -----------
18,219,100 19,888,605
LIABILITIES
DEPOSITS &  OTHER ACCOUNTS 11 15,019,100 17,101,481
BORROWINGS FROM OTHER BANKS, AGENTS ETC. 12 712,944 295,262
BILLS PAYABLE 159,434 248,047
OTHER LIABILITIES 13 499,672 445,045
DEFERRED LIABILITIES 14 3,000 3,000
----------- -----------
16,391,753 18,092,835
----------- -----------
NET ASSETS 1,823,154 1,795,770
========== ==========
REPRESENTED BY:
SHARE CAPITAL 15 851,880 774,436
RESERVE FUND & OTHER RESERVES 16 971,049 1,020,343
UNAPPROPRIATED PROFIT 2,245 991
-----------
SHAREHOLDERS' EQUITY 1,823,154 1,795,770
========== ==========
MEMORANDUM ITEMS
BILLS FOR COLLECTION 17 202,254 261,252
ACCEPTANCES, ENDORSEMENTS AND
OTHER OBLIGATIONS
CONTINGENT LIABILITIES AND COMMITMENTS 18 1,001,008 905,581
The annexed notes form an integral part of these accounts.
CHAIRMAN MANAGING DIRECTOR DIRECTOR DIRECTOR
Consolidated Profit and Loss Account for the year ended December 31, 1999
Note 1999 1998
(Rupees in thousands)
Mark-up/interest and discount and return earned 2,260,770 2,259,608
Less: Cost/Return on deposits, borrowings etc. 1,510,145 1,755,443
---------- ----------
750,625 504,165
Fees, commission & brokerage 67,943 58,521
Loss from investment securities (2,357) (474)
Dividend income 73,877 46,738
Other operating income 19 25,725 26,150
---------- ----------
165,188 130,935
---------- ----------
915,813 635,100
Operating expenses:
Administrative expenses 20 722,875 602,181
Provision against non-performing advances 7.2 81,230 (123,615)
Provision for diminution in value of investment -- 27,273
Bad debts written off directly 7.3 -- 337
---------- ----------
804,105 506,176
---------- ----------
111,708 128,924
Other income 21 17,269 7,561
---------- ----------
128,977 136,485
Other charges 22 2,088 1,683
---------- ----------
Profit before taxation 126,889 134,802
Taxation 23 97,485 12,500
---------- ----------
Profit after taxation 29,404 122,302
Unappropriated profit brought forward 991 2,133
---------- ----------
Profit available for appropriation 30,395 124,435
APPROPRIATIONS
Transfer to:
Statutory reserve 5,650 25,000
Special reserve 12,500 --
Reserve for issue of bonus shares -- 77,444
General reserve 10,000 21,000
---------- ----------
28,150 123,444
---------- ----------
Unappropriated profit carried forward 2,245 991
========== ==========
Earnings per Share - (Rupees) 32 0.35 1.44
========== ==========
The annexed notes form an integral part of these accounts.
CHAIRMAN MANAGING DIRECTOR DIRECTOR DIRECTOR
Consolidated Cash Flow Statement for the year ended December 31, 1999
1999 1998
(Rupees in thousands)
CASH FLOW FROM OPERATING ACTIVITIES
Profit before taxation 126,889 134,802
Add/Less: loss/(profit) from:
Investment Securities 2,357 474
Dividend income (73,877) (46,738)
Profit on disposal of fixed assets (2,692) (55)
----------- -----------
52,677 88,483
Adjustment for non-cash charges