FINANCIAL ACCOUNTING ASSIGNMENT-3rd

(ASSIGNMENT# SEMESTER FALL-2020)

Submission Date (04 FEB, 2021)

BY

Zubair Mehmood

ROLL#

20016820-014

FINANCIAL ACCOUNTING (MGT-315)

BBA 2 YEARS

SUBMITTED TO

MUHAMMAD AWAIS

Department of Administration sciences

UNIVERSITY OF GUJRAT
Table Of Content
Acknowledgment………………………………………. ………...
Objective……………………………………………………………

Summary…………………………………………………… ………

Introduction of organization……………………………………....

Organizational Hierarchy………......……………………….……..

Core Business Operation of the Organization………….

Accounting System Details………………………………………….

Accounting cycle

And Its Application in the Organization:…………………

Financial Statement and Performance.…………………………....

Information about the Stakeholder ………………………….…….

Organization Polices…………………………………………………

Key fundamental issues…………………………………………….

Conclusion……………………………………………….…………..
 : Purpose of Study

The purpose of the study is to work in real life situation and learn banking practice
by doing account opening, clearing, remittances, online transactions, and other
work at branch This study is confined to banking operations. An attempt along
with all its limitations, to collect financial data and general statistics of the bank
has been made. Keeping in view the purpose of the study, which is to make an
acquaintance with practical doings in the bank, this seems a comprehensive effort .
Executive Summary

This report contains the details of the experience during my work at Habib Bank
Limited Pakistan Chowk, Gujrat Branch. This is one of biggest branches of the
bank and deals in general banking, credits and foreign trade. Efforts have been
made to compile this report in such a way that activates its salient features not only
for students but also for the layman. I have divided this report into different
Chapters.

HBL is the prime bank in country established in 1941 having a registered head
office in Karachi. It was nationalized in 1974, but on February 2004, it has been
privatized by Government of Pakistan and is taken over by Aga Khan Fund for
Economic Development (AKFED). They acquired 51 percent of shares of HBL.

It is one of the largest banks of Pakistan with 1439 branches and having total assets
of Rs. 434,931,930,000. HBL is the largest bank having 56 branches in Gujrat
District.At last I must say that this curiosity about management practices of Habib
bank Ltd. of Pakistan. And to raise reader’s consciousness about the banking
system working in Pakistan.is designed to stimulate the curiosity about
management practices of Habib bank Ltd. of Pakistan. And to raise reader’s
consciousness about the banking system working in Pakistan.
 Acknowledgement

Starting with the name of ALLAH the most beneficent and the most
merciful whose blessings are abundant and favors are unlimited.” As a
mater a fact, people tend to forget those who are behind their
achievements and have stood for them whenever they need assistant.
Our gratitude will be meaningless if we are not grateful to almighty
Allah for His kindness upon us. His benevolence and blessings have
made us capable. We are extremely grateful to our course instructor Mr
oWAIS. who spent a lot of valuable time with us and gave all the related
information and expertise very generously about related courses.
 Introduction to Bank

About HBL

Originally established in 1941,

HBL moved its operations to Pakistan
in 1947 at the request of Muhammad
Ali Jinnah, hence becoming the
first commercial bank to lay its foundation in the country. Embarking on a
progressive journey, HBL continued to grow and expand in the successive years.
The Bank's first international branch opened in Colombo, Sri Lanka in 1951, while
the construction of the iconic Habib Bank Plaza was completed in 1972, the year
that also marked the commemoration of HBL's 25th anniversary.

With a sizeable domestic share, HBL was nationalized in 1974. The Bank became
a trendsetter in the banking industry, acquiring the lion's share in inward foreign
remittances and a major market share in loans to small industries, traders and
farmers. International operations expanded and HBL now operates in over 20
countries across four continents. economy of the country through initiatives like CPEC,
HBL continues to enrich lives of Pakistanis around the world.
In February 2004, the bank was privatized and the management control of the bank
was handed over to AKFED. By April 2015, the Government of Pakistan divested
its entire shareholding of 41.5% through the Privatization Commission of Pakistan,
thereby officially making HBL Pakistan's largest private bank.

HBL has not just been a pioneer in the banking industry, but has also been a
platform that has enabled dreams for millions of people. It has repeatedly, proven
to be a catalyst for change. by initiatives that have elevated Pakistan’s image and
reputation. From bringing back international cricket to Pakistan through the
HBLPSL, to helping economy of the country through initiatives like CPEC, HBL
continues to enrich lives of Pakistanis around the world. HBL, Pakistan’s largest
bank, was the first commercial bank to be established in Pakistan in 1947. Over the
years, HBL has grown its branch network to over 1,700 branches and +2,100
ATMs globally, serving 14 million customers and clients.

The Government of Pakistan (GOP) privatized HBL in 2004 through which Aga
Khan Fund for Economic Development (AKFED) acquired 51% of the Bank's
shareholding and the management control. The remaining 41.5% shareholding by
the GOP was divested in April 2015. AKFED continues to retain 51%
shareholding in HBL while individuals hold the remaining shareholding, local and
foreign institutions and funds including CDC Group Plc, which holds 5%, and
International Finance Corporation, which holds 3%.

Organizational Hierarchy
Core Business operations
HBL Branch Banking group consists of multiple divisions which leverage HBL’s
1,600+ branch network. These functions include Distribution (19 regions), Sales
Management, and Retail Products. Branch Banking primarily represents the
‘business / sales’ wing of the branch network.

Distribution

The Distribution structure of Branch Banking is divided in 1,600+

branches, 150 Areas, 19 Regions, & 6 HUBs with each HUB being
managed by a Senior Regional Chief & each region by a Regional
Chief. South HUB (Karachi, Hyderabad, Sukkur), Multan HUB
(Multan, Bahawalpur, Sahiwal), Central HUB (Lahore, Gujrat,
Gujranwala), Faisalabad HUB (Faisalabad, Sialkot, Sargodha), AJK
HUB (Mirpur, Jhelum, Muzaffarabad), North HUB (Islamabad,
Mardan, Peshawar), & Quetta being managed as a separate region.
Distribution is primarily responsible for the sales of all liability,
wealth, consumer, & lending products benchmarked against yearly
Key Performance Indicators.
Sales Management

Sales Management is a vital area under Branch B anking that

primarily focuses on effective implementation of sales practices. It
provides the branch network with sales support services that include
Customer Engagement Techniques and CRM platforms that help
enable the network to deliver more effectively on the business results.
Retail Products

HBL Branch Banking is committed to stay at the pinnacle retail

banking through its diverse set of product offerings. It is imperative to
have the right product for the right customer. Retail Products
encompasses product development & maintenance of both liability &
wealth management products, management information systems
(business analytics), product marketing, portfolio management,
network optimization, self-service channels etc. Retail Products has
also launched a strong NISA proposition (banking for women), while
Prestige Banking for high net-worth Individuals is under development
& set to be launched by Dec, 2020. Roshan Digital Account (a joint
initiative of GoP & SBP) was launched in Sep, 2020.

Accounting system details

HBL offers a range of products & services to facilitate the demands of partners.
These include:

1. Trade Finance

Opening, advising, confirmation and negotiation of letters of credit.

Discounting of LCs including providing bankers acceptances.

Trade loan syndications.

Risk participations.

Pre/post, export financing.

Issuance of financial guarantees/SBLCs.

Documentary collections.

2. Cash Management

Specialized Deposit Slips – conventional collection model.

Internet Banking – electronic collection (non-individual/business customers). Cash

in Transit – CIT

Direct Debit Collection – SIDA (Standing Instructions for Debit Authority).

Utility Bills Payments – UBP

HBL at Work (HAW) – payroll solution.

Vostro account services.

Commercial Payments – SSI

3. HBL Express – payments platform

4. Remittances

With a substantial market share in distribution of incoming home remittances into

Pakistan, HBL has built-up capacity to serve overseas FIs wishing to remit funds
for beneficiaries in Pakistan as well as in other specific locations.

5. Treasury

Money smarket placements.

FX/Swaps.

Bonds /TFCs.

Private placements & other debt instruments.

6. Bilateral Loans
Customized bilateral products are available to fulfill financing requirements of
NBFIs, which includes term loans and SBLC facilities.

7. Bank deposits

Deposits are to the bank as a backbone is to the body of a man. They are the
lifeblood of the bank. HABIB BANK LIMITED and all other commercial banks
perform the function of deposit accepting from the public by offering suitable

suitable rates of interest on them, or on simply a promise to repay on demand.

Accounting Cycle and its Application

. Opening of account by an individual:
After entering into bank premises, the person goes through the following steps for opening an
account in the bank and for becoming a bank customer.
An introduction:
The first important step to take place in bank is to get satisfactory introduction of the person,
who wants to become bank’s customer by putting various questions.
In HBL (Katchery Chowk Branch), the branch manager takes great care of this step and is
introduced with the person himself. His main intention is to determine the prospective
customer’s integrity, respectability, occupation, and nature of business he is doing at the time of
opening an account.
Account opening form & specimen signature card:
Now the person is provided with an application form known as Account Opening Form.
This form contains:
i. Title of account
ii. Address
iii. I.D. Card number
iv. Telephone No. (Office and Residence)
 v. Introductory reference (all above-mentioned particulars of introducer)
vi. Signatures of the applicant
vii. Amount deposited
In addition to this, the customer is required to attach a copy of National Identity Card with the
form.
Account opening register:
Now the name of the customer will be recorded in account opening register, and from here the
account no. of the customer will be written on (top most corners) account opening form and on
specimen signature card.
Issuance of chequebook:
The chequebook will ordinarily be issued to all customers desiring to have drawing facility.
Chequebook consists of 10, 25, 50, or 100 pages depending upon customer requirement.

Customer can withdraw money by signing a cheque and writing the amount he wants to
withdraw from his account.
A special chequebook register is kept to enter the name of the person having chequebook.
Recording in to general ledger:
The concerned officer records the name and amount deposited with the bank in to general ledger.
Separate ledgers are maintained for different types of accounts e.g.
i. Current Account Ledger
ii. Saving Account Ledger
iii. Fixed Deposit Account Ledger
iv. Call Deposit Account Ledger
v. As and when customer deposits the money, amount is credited the general ledger
and the withdrawal is followed by a debit entry in the ledger.

9. Types of accounts maintained by Habib Bank Limited:

The following types of accounts are maintained in HBL:
1. Current accounts.
2. Profit and loss sharing account.
3. Fixed deposit account.
4. Freedom account.
 Current accounts:
A bank account, which may be used to lodge payments or to withdraw money on demand. It’s
main
Purpose is to serve the businessperson. Form number F-53 is provided to the person to open the
account for businessperson. It is a statutory requirement to maintain current account. Its main
features are:
1. Minimum amount for opening this account is Rs.5000
2. Any person can open the account with the bank
3. According to inter banks agreement interest is not

paid on current account.

4. Bank act as custodian of money
The preparation of consolidated financial statements in conformity with approved
accounting and reporting standards as applicable in Pakistan requires the use of
certain critical accounting estimates. It also requires the management to exercise its
judgement in the process of applying the Group's accounting policies. Estimates
and judgements are continually evaluated and are based on historical experience,
including expectations of future events that are believed to be reasonable under the
circumstances. The areas where various assumptions and estimates are significant
to the Group's financial statements or where judgement was exercised in the
application of accounting policies are as follows:

i) Classification of investments
ii) Valuation and impairment of subsidiaries, associates and available-for-
sale equity investments
iii) Provision against non-performing advances
iv) Valuation and depreciation of fixed assets
v) Valuation of right-of-use assets and their related lease liability
vi) Valuation and amortization of intangible assets
vii) Valuation of non-banking assets acquired in satisfaction of claims
viii) Valuation of defined benefit plans
ix) Taxation
x) Fair value of derivatives

These consolidated financial statements have been prepared under the historical
cost convention except for- Investments classified as held-for-trading and
available-for-sale which are measured at fair value

. - Derivative financial instruments, including forward foreign exchange contracts

which are measured at fair value. - Right-of-use assets and their related lease
liability which are measured at their present values.

- Net obligations in respect of defined benefit schemes which are measured at their
present values
Information about Stakeholder
Habib Bank Limited is engaged in commercial banking and asset management
related services in Pakistan and overseas. The Bank's segments include Branch
Banking, which consists of loans, deposits and other banking services to
agriculture, consumer, small and medium-sized enterprise (SME), and commercial
customers; Corporate Banking, which consists of lending for project finance, trade
finance and working capital to corporate customers and it also provides investment
banking services, including services provided in connection with mergers and
acquisitions; Treasury, which consists of trading, fixed income, equity, derivatives
and foreign exchange businesses, and it also includes credit, lending and funding
activities with professional market counterparties; International Banking, which is
engaged in monitoring and reporting purposes and consists of its operations outside
of Pakistan, and Head Office/Others. It operates in Pakistan; Europe, Middle East
and America, and Asia and Africa.
Organizational polices Depreciation
Key Fundamental Issues

Conclusion
This report contains the details of the experience during my work at Habib Bank
Limited Pakistan Chowk, Gujrat Branch. This is one of biggest branches of the
bank and deals in general banking, credits and foreign trade. Efforts have been
made to compile this report in such a way that activates its salient features not only
for students but also for the layman. I have divided this report into different
Chapters.

HBL is the prime bank in country established in 1941 having a registered head
office in Karachi. It was nationalized in 1974, but on February 2004, it has been
privatized by Government of Pakistan and is taken over by Aga Khan Fund for
Economic Development (AKFED). They acquired 51 percent of shares of HBL.

It is one of the largest banks of Pakistan with 1439 branches and having total assets
of Rs. 434,931,930,000. HBL is the largest bank having 56 branches in Gujrat
District.At last I must say that this curiosity about management practices of Habib
bank Ltd. of Pakistan. And to raise reader’s consciousness about the banking
system working in Pakistan.is designed to stimulate the curiosity about
management practices of Habib bank Ltd. of Pakistan. And to raise reader’s
consciousness about the banking system working in Pakistan.

Annual Report
https://www.hbl.com/annualaccounts