Soneri Bank: Quarterly Financial Report - 30 September 2017

Transcription

1. Journey of Excellence Third Quarterly Report September 2017
3. Third Quarterly Report September 2017 (Un-audited)
4. Contents 04 05 09 10 11 Corporate Information Directors ’ Review Statement of Financial Position Profit and Loss Account Statement of Comprehensive Income
5. 12 13 14 35 Cash Flow Statement Statement of Changes in Equity Notes to the Financial Information List of Branches
6. Soneri Bank Limited | Third Quarterly Report September 2017 Corporate Information CHAIRMAN MR. ALAUDDIN FEERASTA LEGAL ADVISORS MANAN ASSOCIATES, ADVOCATES CHIEF EXECUTIVE OFFICER MR. MOHAMMAD AFTAB MANZOOR REGISTERED OFFICE RUPALI HOUSE 241-242, UPPER MALL SCHEME, ANAND ROAD, LAHORE - 54000 DIRECTORS MR. NOORUDDIN FEERASTA MR. AMIN A. FEERASTA (EXECUTIVE DIRECTOR) MR. MUHAMMAD RASHID ZAHIR MR. MANZOOR AHMED (NIT NOMINEE) MR. INAM ELAHI MR. JAMIL HASSAN HAMDANI CHIEF FINANCIAL OFFICER MS. ANJUM HAI COMPANY SECRETARY MR. MUHAMMAD ALTAF BUTT AUDITORS A.F. FERGUSON & CO. CHARTERED ACCOUNTANTS SHARI’AH BOARD MUFTI EHSAN WAQUAR AHMAD (CHAIRMAN) MUFTI BILAL QAZI (MEMBER) MUFTI MUHAMMAD ZAHID (RESIDENT MEMBER) CENTRAL OFFICE 10TH FLOOR, PNSC BUILDING, M.T. KHAN ROAD, KARACHI REGISTRAR AND SHARE TRANSFER AGENT THK ASSOCIATES (PRIVATE) LTD., 1ST FLOOR, 40-C BLOCK-6, P.E.C.H.S., KARACHI - 75400 UAN: (021) 111-000-322 FAX: (021) 341 68271
7. 05 Directors ’ Review On behalf of the Board of Directors, we are pleased to present the Directors’ Review of Soneri Bank Limited (‘the Bank’) along with the un-audited condensed interim financial statements for the nine months ended 30 September 2017. Economy The outgoing quarter Jul-Sep’17 started on a promising note with Large Scale Manufacturing (LSM) Index showing strong growth of 13 percent in July’17. As per State Bank of Pakistan (SBP), manufacturing activity is expected to benefit from higher development spending, growing investments in China Pakistan Economic Corridor (CPEC) related projects, improvement in security situation and low borrowing costs. This along with favorable initial estimates of major crops and growth in credit offtake is expected to take the country’s Gross Domestic Product (GDP) growth to 6 percent during the current fiscal year FY18 (compared to 5.3 percent during FY17), as per SBP. The Government managed to bring down budget deficit to 0.9 percent of GDP in first quarter of the current fiscal year from 1.3 percent in the same period last year. This improvement was achieved through better tax collection and lower expenditure, which if maintained will help achieve the annual target of 4.1 percent. Inflation continued to be low in the outgoing quarter and averaged 3.4 percent vs. 3.9 percent in the corresponding period last year. Inflation for FY18 is expected to remain below government’s target of 6 percent. During the quarter, trading at the local bourse remained volatile due to negativity led by political apprehensions. Foreign exchange (FX) reserves of the country declined to US$20 billion as of 22 September compared to US$21.4 billion as of June end, down by 6.4 percent. This is because the current account deficit (CAD) increased to US$2.6 billion during Jul-Aug’17, more than twice the deficit witnessed last year of US$1.2 billion due to higher imports, which were up 28 percent to US$9.0 billion compared to US$7.0 billion last year. The significant rise in imports offset the healthy growth of 18 percent in exports (reported at US$3.9 billion) and 13 percent in remittances (reported at US$3.5 billion) during JulAug’17. On the flip side, higher foreign direct investment (FDI) was up 2.5 times to US$456 million as compared to last year. Improvement in the country’s external account will depend upon timely realization of official flows and structural reforms to improve trade competitiveness. Operating Results and Business Overview The summarized operating results of the Bank for the nine months ended 30 September 2017 along with key financial indicators are presented as follows:- Profit & Loss Account Net Interest Margin & Non Markup Income Non Mark-up Expenses Profit before Tax & Provisions Profit before Tax Profit after Tax Earnings Per Share (Rupees) Statement of Financial Position Shareholders Equity (excluding Surplus) Deposits Advances - net Investments - net 30 September 2017 30 September 2016 ----------------- (Rs. in million) ----------------7,435.57 7,425.55 5,236.10 4,832.93 2,199.48 2,592.62 2,099.71 2,619.75 1,231.35 1,541.71 1.1169 1.3984 30 September 2017 31 December 2016 ----------------- (Rs. in million) ----------------15,874.89 15,944.77 214,846.38 209,925.45 155,851.31 125,305.77 132,959.80 117,883.96 Variance % 0.14 8.34 (15.16) (19.85) (20.13) (20.13) Variance % (0.44) 2.34 24.38 12.79
8. Soneri Bank Limited | Third Quarterly Report September 2017 Directors’ Review The Bank posted profit before tax (PBT) of Rs. 2,099.71 million and profit after tax of Rs. 1,231.35 million for the nine months ended 30 September 2017. This translates into earning per share of Rs. 1.1169 versus Rs. 1.3984 in the corresponding period last year. The Bank’s total revenue (total of net markup income and non-markup income) stood at the same level as last year. It is noteworthy as the Bank managed to sustain the pressure on net markup income line after maturity of high yielding bonds last year. This is a systemic theme across the industry impacting banking results. The focus on low cost deposits and increase in non mark up income offset the negative impact of compressing spreads. The strategy of delivering right growth and managing spreads contained the decline in net mark-up income to 6.73 percent. Non Mark-up expenses increased by 8.34 percent as compared to corresponding period last year owing mainly to increase of 6 branches in branch network, full year impact of 22 branches opened last year and inflationary impact. The Bank currently has 286 fully operational branches. Eight branches were closed during nine months in view of their limited prospects. The provision for non-performing loans made in line with the regulatory requirements amounted to Rs. 99.76 million during the nine months ended 30 September 2017 (30 September 2016: Reversal Rs. 20.54 million). Your Bank’s Net assets (including surplus) decreased to Rs. 17.12 billion as at 30 September 2017 from 2016 base of Rs. 18.29 billion as a result of appropriation of 2016 final cash dividend during the first quarter. Deposits grew by 2.34 percent during the period closing at Rs. 214.85 billion (31 December 2016: Rs. 209.93 billion). Net Advances grew by 24.38 percent standing at Rs. 155.85 billion (31 December 2016: Rs.125.30 billion). It is with great satisfaction that we inform you that your Bank continues to operate with adequate liquidity and capital adequacy levels and enjoys respectable standing with the international financial institutions. We are confident that with an effective risk management, strong internal controls and compliance systems the Bank will remain satisfactorily compliant with all the regulatory requirements and will continue to maintain the present trend of growth in business and profitability. Credit Rating The Pakistan Credit Rating Agency (PACRA) maintained the long term credit rating of AA- (Double A Minus) and short term rating of A1+ (A One Plus) through its notification dated: 16 June, 2017 [2016: long term AA- (Double A Minus): short term A1+ (A One Plus)] PACRA has also maintained credit rating of unsecured, subordinated and listed Term Finance Certificates (TFC – 2) issue of worth PKR 3,000 million at A+ (Single A plus) vide its notification dated: 16 June, 2017. Acknowledgment We would like to take this opportunity to thank the State Bank of Pakistan, the Securities and Exchange Commission of Pakistan and the Ministry of Finance for their continued support and guidance. We are also thankful to our valued customers for their continued patronage and confidence and want to extend our appreciation to the Bank employees as the driving force in the growth of the Bank over the years. MOHAMMAD AFTAB MANZOOR President & CEO Lahore: 18 October 2017 ALAUDDIN FEERASTA Chairman
9. 07 2016 30 2017 30 0 .14 7,425.55 7,435.57 8.34 4,832.93 5,236.10 (15.16) 2,592.62 2,199.48 (19.85) 2,619.75 2,099.71 (20.13) 1,541.71 1,231.35 (20.13) 1.3984 1.1169 2016 31 2017 30 (0.44) 15,944.77 15,874.89 2.34 209,925.45 214,846.38 24.38 125,305.77 155,851.31 12.79 117,883.96 132,959.80
10. Soneri Bank Limited | Third Quarterly Report September 2017
11. 09 Condensed Interim Statement of Financial Position As at 30 September 2017 Note ASSETS Cash and balances with treasury banks Balances with other banks Lendings to financial and other institutions Investments - net Advances - net Operating fixed assets Deferred tax assets - net Other assets - net 7 8 9 10 11 12 LIABILITIES Bills payable Borrowings Deposits and other accounts Sub-ordinated loans Liabilities against assets subject to finance lease Deferred tax liabilities - net Other liabilities 13 14 15 NET ASSETS REPRESENTED BY Share capital Reserves Unappropriated profit Surplus on revaluation of assets - net of tax (Un-audited) (Audited) 30 September 31 December 2017 2016 ----------(Rupees in ‘000)------------18,968,315 875,157 11,650,624 132,959,804 155,851,305 5,112,845 5,788,133 331,206,183 18,278,840 822,689 5,536,577 117,883,960 125,305,765 5,138,424 5,554,451 278,520,706 4,304,973 87,577,940 214,846,378 2,997,600 701,395 3,657,086 314,085,372 4,163,509 38,905,078 209,925,453 2,998,800 1,137,530 3,101,109 260,231,479 17,120,811 18,289,227 11,024,636 1,670,098 3,180,152 15,874,886 11,024,636 1,423,829 3,496,305 15,944,770 1,245,925 17,120,811 2,344,457 18,289,227 16 CONTINGENCIES AND COMMITMENTS The annexed notes 1 to 26 form an integral part of this condensed interim financial information. CHIEF FINANCIAL OFFICER CHAIRMAN PRESIDENT AND CHIEF EXECUTIVE OFFICER DIRECTOR DIRECTOR
12. Soneri Bank Limited | Third Quarterly Report September 2017 Condensed Interim Profit And Loss Account (Un-audited) For the Nine Months and Quarter Ended 30 September 2017 For the nine months ended For the quarter ended Note 30 September 30 September 30 September 30 September 2017 2016 2017 2016 ------------------------- (Rupees in ‘000) --------------------Mark-up / return / interest earned Mark-up / return / interest expensed Net mark-up / return / interest income Provision / (reversal of provision) against loans and advances - net Reversal of provision against diminution in the value of investments - net Bad debts written off directly Net mark-up / return / interest income after provisions Non mark-up / interest income Fee, commission and brokerage income Dividend income Income from dealing in foreign currencies-net Unrealised gain / (loss) on revaluation of investments classified as held-for-trading - net Gain on sale of securities - net Other income Total non mark-up / interest income 17 Non mark-up / interest expenses Administrative expenses Provision against other assets - net Other charges Total non mark-up / interest expenses Extraordinary / unusual items Profit before taxation 13,653,406 8,747,880 4,905,526 13,373,490 8,113,752 5,259,738 4,954,029 3,305,471 1,648,558 4,044,584 2,581,017 1,463,567 99,756 (20,541) (30,386) (92,216) 12 99,768 4,805,758 (6,941) 355 (27,127) 5,286,865 (30,386) 1,678,944 (92,216) 1,555,783 1,041,700 146,048 283,787 946,736 122,544 238,030 348,191 62,078 139,935 289,596 42,267 54,860 3,298 1,032,986 22,227 2,530,046 7,335,804 (19,580) 856,320 21,758 2,165,808 7,452,673 15,072 164,069 7,672 737,017 2,415,961 (6,411) 247,373 5,191 632,876 2,188,659 5,165,321 70,775 5,236,096 2,099,708 2,099,708 4,767,541 65,387 4,832,928 2,619,745 2,619,745 1,751,191 15,033 1,766,224 649,737 649,737 1,605,634 11,933 1,617,567 571,092 571,092 731,903 22,456 114,002 868,361 1,231,347 936,726 161,371 (20,064) 1,078,033 1,541,712 197,273 35,273 (2,304) 230,242 419,495 201,817 (2,185) 5,253 204,885 366,207 18 Taxation - Current - Prior - Deferred Profit after taxation Earnings per share - basic and diluted 19 --------------------------------(Rupees)---------------------------------1.1169 1.3984 0.3805 0.3322 The annexed notes 1 to 26 form an integral part of this condensed interim financial information. CHIEF FINANCIAL OFFICER CHAIRMAN PRESIDENT AND CHIEF EXECUTIVE OFFICER DIRECTOR DIRECTOR
13. 11 Condensed Interim Statement of Comprehensive Income (Un-audited) For the Nine Months and Quarter Ended 30 September 2017 For the nine months ended For the quarter ended Note 30 September 30 September 30 September 30 September 2017 2016 2017 2016 ------------------------- (Rupees in ‘000) --------------------1,231,347 1,541,712 419,495 366,207 6,509 (2,278) 4,231 (19,329) 6,765 (12,564) 2,170 (759) 1,411 (6,443) 2,255 (4,188) 1,235,578 1,529,148 420,906 362,019 (1,578,329) (103,079) (791,474) (277,045) (i) 552,415 (1,025,914) 36,078 (67,001) 277,016 (514,458) 96,966 (180,079) (ii) - - - - 209,664 1,462,147 (93,552) 181,940 Profit after taxation for the period Other comprehensive income Items that will not be reclassified to profit and loss account Components of comprehensive income reflected in equity Remeasurements of defined benefit plan Tax on remeasurements of defined benefit plan Comprehensive income transferred to equity Items that may be reclassified subsequently to profit and loss account Components of comprehensive income not reflected in equity Net change in value of "available-for-sale" securities Deferred tax asset on changes in value of “available-for-sale” securities Surplus on revaluation of operating fixed assets Total comprehensive income / (loss) (i) Surplus / (deficit) on revaluation of "available-for-sale securities-net of tax" has been shown in the Statement of Comprehensive Income in order to comply with the revised "Prudential Regulations for Corporate / Commercial Banking" issued by the State Bank of Pakistan. (ii) Surplus on revaluation of operating fixed assets net of tax is presented under separate head below equity as "Surplus / (deficit) on revaluation of assets" in accordance with the requirements of section 235 of the Companies Ordinance, 1984. The annexed notes 1 to 26 form an integral part of this condensed interim financial information. CHIEF FINANCIAL OFFICER CHAIRMAN PRESIDENT AND CHIEF EXECUTIVE OFFICER DIRECTOR DIRECTOR
14. Soneri Bank Limited | Third Quarterly Report September 2017 Condensed Interim Cash Flow Statement (Un-audited) For the Nine Months Ended 30 September 2017 CASH FLOWS FROM OPERATING ACTIVITIES Note 30 September 30 September 2017 2016 (Rupees in ‘000) 2,099,708 (146,048) 1,953,660 2,619,745 (122,544) 2,497,201 426,998 61,090 90,885 27,649 99,756 - 432,685 74,432 62,563 10,247 (20,541) (6,941) (3,298) 12 (8,128) 694,964 2,648,624 19,580 355 (7,780) 564,600 3,061,801 (6,114,047) (36,526,627) (30,706,398) 420,604 (72,926,468) (7,018,690) (1,073,950) 13,341,734 2,276,155 7,525,249 141,464 48,507,325 4,920,925 562,486 54,132,200 (16,145,644) (1,389,676) (17,535,320) (70,972) (8,246,729) 16,744,456 407,645 8,834,400 19,421,450 (1,589,377) 17,832,073 22,344,221 (2,469,197) 127,806 (524,013) 12,188 19,491,005 (16,377,478) 1,375,350 105,651 (822,917) 30,351 (15,689,043) Payments against sub-ordinated loans Dividend paid Net cash used in financing activities (1,200) (1,378,079) (1,379,279) (1,200) (1,378,079) (1,379,279) Increase in cash and cash equivalents Cash and cash equivalents at the beginning of the period Cash and cash equivalents at the end of the period 576,406 18,963,729 19,540,135 763,751 18,346,786 19,110,537 18,968,315 875,157 (303,337) 19,540,135 18,211,625 898,912 19,110,537 Profit before taxation Less: Dividend income Adjustments for non-cash and other items: Depreciation on operating fixed assets Depreciation on ijarah assets Amortisation of intangible assets Operating fixed assets written off directly Provision / (reversal) of provision against non-performing loans and advances - net Reversal of provision against diminution in the value of investments-net Unrealised (gain) / loss on revaluation of investments classified as held-for-trading-net Bad debts written off directly Gain on sale of fixed assets (Increase) / decrease in operating assets Lendings to financial and other institutions Held-for-trading securities Advances-net Others assets (excluding advance taxation) Increase / (decrease) in operating liabilities Bills payable Borrowings Deposits and other accounts Other liabilities Income tax paid Net cash flows (used in) / generated from operating activities CASH FLOWS FROM INVESTING ACTIVITIES Net investments in available-for-sale securities Net investments in held-to-maturity securities Dividends received Purchases of operating fixed assets (including intangible assets) Sales proceeds on disposal of operating fixed assets Net cash flows generated / (used in) from investing activities CASH FLOWS FROM FINANCING ACTIVITIES CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD Cash and balances with treasury banks Balances with other banks Overdrawn nostro accounts 7 8 13 The annexed notes 1 to 26 form an integral part of this condensed interim financial information. CHIEF FINANCIAL OFFICER CHAIRMAN PRESIDENT AND CHIEF EXECUTIVE OFFICER DIRECTOR DIRECTOR
15. 13 Condensed Interim Statement of Changes in Equity (Un-audited) For the Nine Months Ended 30 September 2017 Share capital Discount on issue of shares Capital reserves Share Statutory premium reserve (a) Unappropriated profit (b) General reserve Total ------------------------------------------ (Rupees in ‘000) -----------------------------------------11,024,636 (1,001,361) Balance as at 1 January 2016 Changes in equity for the nine months ended 30 September 2016 Profit after tax for the nine months ended 30 September 2016 Transfer from unappropriated profit to statutory reserve Discount on issue of shares adjusted against share premium / unappropriated profit Other comprehensive income for the period Remeasurement of defined benefit plan Tax on remeasurement of defined benefit plan Transfer from surplus on revaluation of fixed assets to unappropriated profit - net of tax Transactions with owners recognised directly in equity Final cash dividend for the year ended 31 December 2015 at Rs. 1.25 per share 1,405 1,048,060 - 4,263,217 15,335,957 - - - 308,342 - 1,541,712 (308,342) 1,541,712 - - 1,001,361 (1,405) - - (999,956) - - - - - - (19,329) 6,765 (12,564) (19,329) 6,765 (12,564) - - - - - 86,296 86,296 - - - - 11,024,636 - - 1,356,402 - - - - 67,427 - 337,132 (67,427) 337,132 - - - - - - 792 (277) 515 792 (277) 515 - - - - - 33,801 33,801 11,024,636 - - 1,423,829 - 3,496,305 15,944,770 - - - 246,269 - 1,231,347 (246,269) 1,231,347 - - - - - - 6,509 (2,278) 4,231 6,509 (2,278) 4,231 Transfer from surplus on revaluation of fixed assets to unappropriated profit - net of tax - - - - - 72,617 72,617 Transactions with owners recognised directly in equity Final cash dividend for the year ended 31 December 2016 at Rs. 1.25 per share - - - - - (1,378,079) (1,378,079) 11,024,636 - - 1,670,098 Balance as at 30 September 2016 Changes in equity during quarter ended 31 December 2016 Profit after tax for the quarter ended 31 December 2016 Transfer from unappropriated profit to statutory reserve Other comprehensive income for the period Remeasurement of defined benefit plan Tax on remeasurement of defined benefit plan Transfer from surplus on revaluation of fixed assets to unappropriated profit - net of tax Balance as at 31 December 2016 (Audited) Changes in equity for the nine months ended 30 September 2017 Profit after tax for the nine months ended 30 September 2017 Transfer from unappropriated profit to statutory reserve Other comprehensive income for the period Remeasurement of defined benefit plan Tax on remeasurement of defined benefit plan Balance as at 30 September 2017 - (1,378,079) (1,378,079) - 3,192,284 15,573,322 3,180,152 15,874,886 (a) (b) This represents reserve created under section 21 (i) (a) of the Banking Companies Ordinance, 1962. As more fully explained in note 11.4 of this condensed interim financial information, unappropriated profit includes an amount of Rs 844.564 million net of tax as at 30 September 2017 (31 December 2016: Rs 716.711 million) representing additional profit arising from availing forced sale value benefit for determining provisioning requirement which is not available for the purpose of distribution of dividend to shareholders. The annexed notes 1 to 26 form an integral part of this condensed interim financial information. CHIEF FINANCIAL OFFICER CHAIRMAN PRESIDENT AND CHIEF EXECUTIVE OFFICER DIRECTOR DIRECTOR
16. Soneri Bank Limited | Third Quarterly Report September 2017 Notes to and Forming Part of the Condensed Interim Financial Information (Un-audited) For the Nine Months Ended 30 September 2017 1 STATUS AND NATURE OF BUSINESS Soneri Bank Limited (“the Bank”) was incorporated in Pakistan on 28 September 1991 as a public limited company under the repealed Companies Ordinance, 1984. Its registered office is situated at Rupali House 241-242, Upper Mall Scheme, Anand Road, Lahore, Punjab and its shares are quoted on Pakistan Stock Exchange Limited. The Bank is engaged in banking services as described in the Banking Companies Ordinance, 1962 and operates with 286 branches including 19 Islamic banking branches (31 December 2016: 288 branches including 16 Islamic banking branches) in Pakistan. Based on the financial statements of the Bank for the year ended 31 December 2016, the Pakistan Credit Rating Agency Limited (PACRA) has maintained the Bank’s long term rating as AA- and short term rating as A1+. 2 BASIS OF PRESENTATION 2.1 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 Bank from its customers and immediate resale to them at appropriate mark-up in price on deferred payment basis. The purchase and sales arising under these arrangements are reflected in this condensed interim financial information to the extent that these represent the amount of facility actually utilised and the appropriate portion of mark-up thereon. 2.2 The financial results of the Islamic banking branches of the Bank have been consolidated in this condensed interim financial information for reporting purposes, after eliminating material intra branch transactions / balances. The financial results of the Islamic banking branches is disclosed in note 23 of this condensed interim financial information. 2.3 The Companies Ordinance, 1984 has been repealed after the enactment of the Companies Act, 2017. However, as allowed by the SECP vide its circular No. 23 dated 04 October 2017, these unconsolidated condensed interim financial information have been prepared in accordance with the provisions of the repealed Companies Ordinance, 1984. 3 STATEMENT OF COMPLIANCE 3.1 This condensed interim financial information has been prepared in accordance with the approved accounting standards as applicable in Pakistan. The approved accounting standards comprise of such International Financial Reporting Standards (IFRSs) issued by the International Accounting Standards Board and Islamic Financial Accounting Standards (IFASs) issued by the Institute of Chartered Accountants of Pakistan, as are notified under the Companies Ordinance, 1984, provisions of and the directives issued under the Companies Ordinance, 1984, the Banking Companies Ordinance, 1962, and the directives issued by the Securities and Exchange Commission of Pakistan (SECP) and the State Bank of Pakistan (SBP). Wherever the requirements of the Companies Ordinance, 1984, the Banking Companies Ordinance, 1962, IFASs notified under the Companies Ordinance, 1984, or the directives issued by the SECP and SBP differ with the requirements of IFRSs, the provisions of and the directives issued under the Companies Ordinance ,1984, the Banking Companies Ordinance, 1962, and IFASs notified under the Companies Ordinance, 1984 and the directives issued by the SECP and the SBP prevail. 3.2 The State Bank of Pakistan has deferred the applicability of International Accounting Standard (IAS) 39, ‘Financial Instruments: Recognition and Measurement’ and International Accounting Standard (IAS) 40, ‘Investment Property’ for Banking Companies through BSD Circular No. 10 dated: 26 August 2002 till further instructions. In addition, the Securities and Exchange Commission of Pakistan has deferred the applicability of International Financial Reporting Standard 7, Financial Instruments: Disclosures (IFRS 7) vide SRO 411(I) / 2008 dated: 28 April 2008 till further orders. Accordingly, the requirements of these standards have not been considered in the preparation of this condensed interim financial information. However, investments and non-banking assets have been classified and valued in accordance with the requirements prescribed by the State Bank of Pakistan through various circulars. 3.3 The SBP vide its BSD Circular No. 07 dated: 20 April 2010 has clarified that for the purpose of preparation of financial statements in accordance with International Accounting Standard - 1 (Revised), ‘Presentation of Financial Statements’, two statement approach shall be adopted i.e. separate ‘Profit and Loss Account’ and ‘Statement of Comprehensive Income’ shall be presented, and Balance Sheet shall be renamed as ‘Statement of Financial Position’. Furthermore, the surplus / (deficit) on revaluation of available for sale (AFS) securities shall be included in the ‘Statement of Comprehensive Income’. However, it should continue to be shown separately in the Statement of Financial Position below equity. Accordingly, the above requirements have been adopted in the preparation of this condensed interim financial information.
17. 15 3 .4 The SBP vide its BPRD Circular No. 04 dated: 25 February 2015 has clarified that the reporting requirements of IFAS-3 for Islamic Banking Institutions (IBIs) relating to annual, half yearly and quarterly financial statements would be notified by SBP through issuance of specific instructions and uniform disclosure formats in consultation with IBIs. These reporting requirements have not been notified to date. Accordingly, the disclosures requirements under IFAS 3 have not been considered in this condensed interim financial information. 3.5 The disclosures made in this condensed interim financial information have been limited based on the format prescribed by the State Bank of Pakistan through BSD Circular Letter No. 2 dated: 12 May 2004 and the requirements of the International Accounting Standard 34, “Interim Financial Reporting”. This do not include all of the information required for the full set of annual financial statements and should be read in conjunction with the financial statements of the Bank for the year ended 31 December 2016. 4 BASIS OF MEASUREMENT 4.1 Accounting convention This condensed interim financial information has been prepared under the historical cost convention, except that certain fixed assets are carried at revalued amounts, certain investments and commitments in respect of certain forward exchange contracts have been marked to market and are carried at fair value. In addition, obligation in respect of staff retirement benefits is carried at present value. 4.2 Functional and presentation currency Items included in this condensed interim financial information are measured using the currency of the primary economic environment in which the Bank operates. This condensed interim financial information is presented in Pakistani Rupees, which is the Bank’s functional and presentation currency. 4.3 Critical accounting estimates and assumptions The basis and the methods used for critical accounting estimates and judgements adopted in this condensed interim financial information are the same as those applied in the preparation of the annual financial statements of the Bank for the year ended 31 December 2016. 5 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accounting policies and the methods of computation used in the preparation of this condensed interim financial information are the same as those applied in the preparation of the annual financial statements of the Bank for the year ended 31 December 2016. 6 FINANCIAL RISK MANAGEMENT The Bank’s Financial Risk Management objectives and policies are consistent with those disclosed in the annual financial statements of the Bank for the year ended 31 December 2016. 7 CASH AND BALANCES WITH TREASURY BANKS In hand Local currency Foreign currencies In transit Foreign currency With State Bank of Pakistan in Local currency current accounts Foreign currency current accounts Foreign currency deposit accounts against foreign currency deposits mobilised With National Bank of Pakistan in Local currency current accounts Un-audited Audited 30 September 31 December 2017 2016 (Rupees in ‘000) 3,768,353 838,731 3,818,859 976,734 62,176 - 11,323,413 552,347 9,225,205 697,883 1,544,385 2,000,422 878,910 18,968,315 1,559,737 18,278,840
18. Soneri Bank Limited | Third Quarterly Report September 2017 8 Un-audited Audited 30 September 31 December 2017 2016 (Rupees in ‘000) BALANCES WITH OTHER BANKS In Pakistan In current accounts In deposit accounts Outside Pakistan In current accounts 9 10 INVESTMENTS 10.1 Investments by types Note Held-for-trading securities Available-for-sale securities Held-to-maturity securities Investments at cost Provision for diminution in the value of investments Surplus on revaluation of held-for-trading securities Surplus on revaluation of available-for-sale securities Investments - net of provisions 772,950 875,157 649,449 822,689 6,000,000 1,700,000 3,950,624 11,650,624 2,500,000 300,000 1,045,985 1,690,592 5,536,577 Un-audited Audited 30 September 2017 31 December 2016 Given as Held by Given as Held by Total Total Bank collateral Bank collateral ----------------------------------(Rupees in ‘000)------------------------------------ 10.2 10.3 10.4 35,530,714 21,079,489 4,267,719 60,877,922 10.8 (114,284) - (114,284) (114,284) - (114,284) 2,495 74 2,569 - - - 284,321 318,629 602,950 2,109,200 72,078 2,181,278 71,909,350 132,959,804 90,970,472 61,050,454 995,913 36,526,627 70,594,734 91,674,223 4,267,719 71,590,647 132,468,569 87,177,034 1,798,522 88,975,556 26,841,410 114,018,444 1,798,522 26,841,410 115,816,966 26,913,488 117,883,960 Held-for-trading securities Market Treasury Bills 10.3 32,110 141,130 LENDINGS TO FINANCIAL AND OTHER INSTITUTIONS Call money lending Letters of placement Foreign currency placement Bai Muajjal 10.2 12,114 90,093 35,530,714 35,530,714 995,913 995,913 36,526,627 36,526,627 - - - 298,085 12,963,413 29,567,800 41,026,934 29,865,885 53,990,347 37,857,303 41,508,591 6,304,140 20,537,270 44,161,443 62,045,861 2,011,490 - 2,011,490 2,118,675 - 2,118,675 2,017,836 3,563,665 225,000 21,079,489 70,594,734 2,017,836 3,563,665 225,000 91,674,223 2,503,559 2,988,906 200,000 87,177,034 Available-for-sale securities Market Treasury Bills Pakistan Investment Bonds Government of Pakistan Ijarah Sukuks Term Finance Certificates and Sukuks Fully paid-up ordinary shares Units of mutual funds 2,503,559 2,988,906 200,000 26,841,410 114,018,444
19. 17 Un-audited Audited 30 September 2017 31 December 2016 Given as Held by Given as Held by Total Total Bank collateral Bank collateral ---------------------------------- (Rupees in ‘000)-----------------------------------10.4 Held-to-maturity securities Pakistan Investment Bonds Term Finance Certificates, Bonds and Sukuks 3,345,043 - 3,345,043 259,643 - 259,643 922,676 4,267,719 - 922,676 4,267,719 1,538,879 1,798,522 - 1,538,879 1,798,522 Note 10.5 Un-audited Audited 30 September 31 December 2017 2016 (Rupees in ‘000) Investments by segment Federal Government Securities - Market Treasury Bills - Pakistan Investment Bonds - Government of Pakistan Ijarah Sukuks Fully paid-up ordinary shares - Listed companies - Unlisted companies 10.6 10.7 Units of mutual funds - Open ended Term Finance and Sukuk Certificates - Listed Term Finance Certificates - Unlisted Term Finance Certificates - Sukuk certificates Investments at cost Provision for diminution in the value of investments Surplus on revaluation of held-for-trading securities Surplus on revaluation of available-for-sale securities Investments - net of provisions 10.8 66,392,512 57,335,390 2,011,490 125,739,392 44,161,443 62,305,504 2,118,675 108,585,622 3,546,865 16,800 3,563,665 2,972,106 16,800 2,988,906 225,000 200,000 16,269 353,506 2,570,737 2,940,512 16,269 838,850 3,187,319 4,042,438 132,468,569 (114,284) 2,569 602,950 115,816,966 (114,284) 2,181,278 132,959,804 117,883,960 10.6 This includes securities having book value of Rs 30.700 million (31 December 2016: Rs 30.700 million) pledged with the State Bank of Pakistan and National Bank of Pakistan to facilitate T. T. discounting facility for the branches of the Bank. 10.7 This includes shares of ISE Towers REIT Management Company Limited, formerly Islamabad Stock Exchange Limited (ISEL), acquired in pursuance of corporatization and demutualization of ISEL as a public company limited by shares.
20. Soneri Bank Limited | Third Quarterly Report September 2017 Note 10.8 Particulars of provision for diminution in the value of investments Opening balance Charge for the period / year Reversal made during the period / year Provision reversed on disposal Closing balance 11 114,284 125,900 - 3,773 (10,714) 114,284 (6,941) (4,675) 114,284 155,992,986 124,932,351 2,025,906 4,029,058 1,631,223 4,912,059 6,054,964 282,162 2,037,564 6,543,282 268,841 2,008,562 164,367,676 (8,457,261) (59,110) 155,851,305 133,753,036 (8,395,931) (51,340) 125,305,765 597,927 56,671 1,058,894 324,072 2,037,564 580,556 57,543 1,008,948 361,515 2,008,562 254,788 27,374 282,162 212,732 56,109 268,841 ADVANCES Loans, cash credits, running finances, etc. In Pakistan Bills discounted and purchased (excluding government treasury bills) Payable in Pakistan Payable outside Pakistan Assets held under Ijarah (IFAS-2) Advance against Islamic financings Advances - gross Provision for non-performing advances - specific Provision against consumer loans & small enterprises - general Advances - net of provisions 11.1 Un-audited Audited 30 September 31 December 2017 2016 (Rupees in ‘000) 11.1.1 11.1 11.3 11.3 Advances against islamic financings - Murabaha Car Ijarah Diminishing musharaka Salam 11.1.1 Asset held under Ijarah (IFAS-2) Motor vehicles Plant and machinery