In the Name of

The Most Gracious, The Most Merciful

ALLAH

Contents
Corporate Information Notice of the 18th Annual General Meeting Directors’ Report to the Shareholders Statement of Compliance with the Best Practices of the Code of Corporate Governance Review Report to the Members on Statement of Compliance with Best Practices of the Code of Corporate Governance Statement on Internal Controls Auditors’ Report to the Members Balance Sheet Profit and Loss Account Statement of Comprehensive Income Cash Flow Statement Statement of Changes in Equity Notes to and forming part of the Financial Statements Consolidated Financial Statements of Bank and its Subsidiary Company Pattern of Shareholding Branch Network Form of Proxy 02 03 05 10 12 13 14 15 16 17 18 19 20 93 175 181

Abdulla Nasser Hawaileel Al-Mansoori Director Mr. Ikram Ul-Majeed Sehgal Director Mr. Khalid Mana Saeed Al Otaiba Director Mr. Adil Rashid Member Mr. Khalid Mana Saeed Al Otaiba Mr. Building I. Sirajuddin Aziz Chief Executive Officer Board Audit Committee Mr. I. Arfa Waheed Malik Member Mr. Iftikhar Shabbir Board Risk Management Committee Mr.com 02 . Haroon Khalid Director Director Director Secretary Director Director Director Secretary Director Director Director Secretary Central Management Committee Mr. Abdulla Khalil Al Mutawa Mr. Bakhtiar Khawaja Member Mr. Yasar Rashid Board Credit.H. Shakil Sadiq Member Mr. Parvez A. Nadeem Iqbal Sheikh Director Mr. Sheikh Hamdan Bin Mubarak Al Nahayan Chairman Mr. Khalid Mana Saeed Al Otaiba Mr. Jamall Auditors A. Shakil Sadiq Company Secretary Mr. Finance and HR Committee Mr. Khalid Mana Saeed Al Otaiba Mr. Abdulla Khalil Al Mutawa Mr. Website www.Corporate Information Board of Directors H. Ikram-ul-Majeed Sehgal Mr. F. Abdulla Khalil Al Mutawa Mr. Qureshi Secretary Chief Operating Officer Mr. Chundrigar Road Karachi.bankalfalah. Zahid Ali H. Nadeemul Haq Member Mr. Shahid Co-Chairman Mr. Nadeem Iqbal Sheikh Mr. Ijaz Farooq Member Mr. Hamid Ashraf Chief Financial Officer Mr. Nadeem Iqbal Sheikh Mr. Sirajuddin Aziz Chairman Mr. M. Chartered Accountants Registered / Head Office B. Ferguson & Co. Mohammad Yousuf Member Mr. Ashfaq A. A. Abdulla Khalil Al Mutawa Director Mr.

" 6. By Order of the Board Karachi Dated: 22nd March 2010 NOTES: 1. . M/s. not less than 48 hours before the time of the Meeting. and vote at the Meeting is entitled to appoint another member as a proxy to attend.e. as disclosed in notes 27 and 36 of the audited Annual Accounts of the Bank for the year ended December 31. 17th Floor. 14th April 2010 at 12:00 PM at Crystal Ballroom. 8%. 2009 and to pass the following resolution as an Ordinary Resolution: "RESOLVED that the remuneration paid to the non-executive directors of the Bank for attending Board meetings and meetings of the Board Committees.Chundrigar Road. Karachi Marriott hotel. To approve the remuneration paid to the non-executive directors of the Bank for attending Board meetings and meetings of the Board Committees for the year ended December 31. 2009. 03 Annual Report 2009 3. Karachi. 2. To appoint Auditors of the Bank for the year 2010 and fix their remuneration. Special Business: 5. An instrument of proxy and a Power of Attorney or other authority (if any) under which it is signed. i. 4. Saima Trade Tower. To receive. The Share Transfer Books of the Bank will remain closed from 7th April 2010 to 14th April 2010 (both days inclusive). D. HAMID ASHRAF Company Secretary The statement of material facts under Section 160(1)(b) of the Companies Ordinance 1984 relating to the aforesaid Special Business to be transacted at the Annual General Meeting is being sent to the Members with the Notice. To confirm the Minutes of the Extra-Ordinary General Meeting held on 27th May 2009. I. before the close of business on 6th April 2010 will be treated in time for the purpose of entitlement of cash dividend. A corporation being a member may appoint as its proxy any of its official or any other person whether a member of the Bank or otherwise. 1700-A. To transact any other business with the permission of the Chair. 4.D. F. to transact the following business: Ordinary Business: 1.NOTICE OF THE 18TH ANNUAL GENERAL MEETING NOTICE is hereby given that the 18th Annual General Meeting of Bank Alfalah Limited will be held on Wednesday. be and is hereby approved. Registrar Services (SMC-Pvt) Limited. 2009 together with Directors' Report and Auditors' Report thereon. Registrar Services (SMCPvt) Limited. Karachi. 2. speak and vote on his/her behalf. or notarized copy of such Power of Attorney must be valid and deposited at the Share Registrar of the Bank. A member entitled to attend. F. consider and adopt the audited Annual Accounts and Consolidated Accounts of the Bank for the year ended December 31. 3. Transfers received at the office of our Share Registrar. payment of cash dividend @80 paisa per share.I. To approve as recommended by the Board of Directors.

to each Pakistani director for each Board Committee meeting attended by him. numbers must be deposited alongwith the Form of Proxy with our Share Registrar as per paragraph No.000/-. the Board of Directors' Resolution/Power of Attorney with specimen signature of the nominee shall be produced at the time of the meeting (unless it has been provided earlier to the Share Registrar). to our Share Registrar. if any. Except the Chairman and Mr Ikram ul-Majeed Sehgal. Those shareholders.250/. Account and Participant's I. non-executive director.D. subject to a maximum of USD 25.000/.to each foreign director and Pak Rs 45.500/. whose shares are deposited with Central Depository Company of Pakistan Ltd. Shareholders are requested to notify change in their address.000/.000/. as the case may be.respectively during a calendar year.and Rs 500.000/.or Rs 500. Registrar Services (SMCPvt) Limited.NOTICE OF THE 18TH ANNUAL GENERAL MEETING 5. If the remuneration already paid/to be paid to a non-executive director on the basis of scale of remuneration fixed by the Board of Directors in the 70th Board meeting dated 25th March 2008 for attending Board Committee(s) meetings already held so far in year 2009 exceeds the maximum limit of USD 50. F. In case of Proxy for corporate members. Annual Report 2009 04 . USD 4. no further remuneration will be payable to him for attending Board Committee(s) meetings which may be held subsequently in year 2009. In case of Proxy.respectively during a calendar year for all meetings of all Board Committees. attested copies of proxy's CNIC or passport.000/. 5 Pursuant to Prudential Regulation G-1(C) the Board of Directors on 29th June 2009 fixed the following remuneration to be paid to the non-executive directors of the Bank for attending Board/Board Committee meetings: USD 6.D.to each Pakistani director for each Board meeting attended by him.000/. STATEMENT OF MATERIAL FACTS UNDER SECTION 160(1)(b) OF THE COMPANIES ORDINANCE 1984 CONCERNING THE AGENDA ITEM NO. the other non-executive directors are interested to the extent stated above in the Special Business. 4 above. No remuneration is being paid to the Chairman of the Bank for attending Board meetings. Mr Ikram ul-Majeed Sehgal.to each foreign director and Pak Rs 125. is not taking any remuneration for attending Board and Board Committee meetings.000/. subject to a maximum of USD 50. 6. (CDC) are requested to bring their original Computerized National Identity Card (CNIC) alongwith participant's ID number and their account/subaccount numbers in CDC to facilitate identification at the time of Annual General Meeting.and Rs 500.

Operating Results During the year the bank's profit before taxation stood at Rs. Profit before provision and Taxation Provisions Profit before Taxation Taxation Profit After Taxation Earnings per share 4.035 Rs.200 800 400 - PROFIT BEFORE TAX 0 DEPOSITS ADVANCES (Gross) IMPORTS EXPORTS Dividend The Directors recommend the payment of Cash dividend @ 8 % subject to approval of the Shareholders.316 million compared to Rs. seven foreign branches five in Bangladesh and two in Afghanistan and one offshore banking unit in Bahrain. We continue to strengthen our presence in the market place and as of year end 2009.301.717 (2.016. Bank has availed the FSV benefit.301 Rs.016. in Million DEC-09 DEC-08 AT A GLANCE 330000 275000 220000 165000 110000 55000 DEC-09 DEC-08 2. efforts and key developments Bank is continuing its drive towards centralization of back office functions.694.794.488 million approx.830.035. At this stage.281) 897.000 1.600 1. Initiatives.DIRECTORS' REPORT TO THE SHAREHOLDERS 2009 2008 (Rupees in ‘000) The Board of Directors is pleased to present the audited financial statements of the Bank for the year 2009.41 Rs. we have a network of 321 branches that includes 60 Islamic Banking branches. The additional profit arising from availing the FSV benefit -net of tax at year end which is not available for either cash or stock dividend to shareholders amounted to Rs.316 (119. 0.710. the centralization segment has been almost completed.997) 1.546) 1.794.720 (493.71 3.720 million for the previous year. 1. 05 Annual Report 2009 . Centralization of processes has led to marked improvement in turnaround times and greater customer satisfaction for more focus and improvement in procedure controls and delivery channels.862 (3.562. Branches are operating as customer contact points providing a clutter free environment and better customer service. 1.419) 1.1. 1.

Implementation of modules like Internet Banking.6% in December 2009 largely helped by high base effect and decline in commodity prices . After a peak of 25. The learning Centre has been conducting training activities in full swing. has rated the Bank 'AA' (double A). Annual Report 2009 06 . the SBP projects 14. Entity Rating for Long Term and A1+ (A one plus) for the Short Term. Credit Rating PACRA. real GDP growth of 3%.7% in the year 2009. respectively. the unsecured subordinated debt (Term Finance Certificates) of the Bank has been awarded a credit rating of AA. These ratings denote a very low expectation of credit risk.3% in August 2008. Economic Overview Pakistan's economy has witnessed gradual improvement in a number of macroeconomic indicators such as lower current account deficit. Automation of Overseas Operations. headline inflation has receded to 10. Telecommunication upgrade to provide connectivity to Centralized Operations. T-Risk. Fiscal discipline has been difficult to maintain because of lower than expected revenue collection and uncontrolled public spending. Pakistan's real GDP growth was 2. A computerized program of Learning Needs Assessment has been introduced in branches and is running successfully whereby Branch managers can objectively assess training needs of their subordinates prior to sending nominations for relevant courses offered at the learning centre. Anti Money Laundering.DIRECTORS' REPORT TO THE SHAREHOLDERS Based on bank strategy to realign its IT setup towards T-24 platform. a premier rating agency of the country. The fundamental outlook for banking sector is changing from neutral to positive. strong capacity for timely payment of financial commitments in the long term and by highest capacity for timely repayment in the short term. as the banking sector remains to be resilient. Further. The Employee portal has been heavily advertising the launch of new courses including business communication courses which is to be rolled out via video conferencing from Learning Centre South to Lahore and Islamabad. Going forward the average industry spreads are expected to contract because of expected reduction in discount rate and lowering of KIBOR. relocation and succession planning initiatives. branches and units are continuously and steadily migrating to this new world renowned IT platform. The next phase includes rollout of T24 in rest of the branches and Islamic Banking module's Implementation. The decrease can be attributed primarily to the drop in lending rates towards the end of the year. Banking spreads have registered a decline in year 2009.5% gowth in broad money (M2). After incorporating improved BoP and inflation outlook. Presently 11 branches and both car and home finance hubs are working on T-24. thereby diluting the impact of monetary policy. rebuilding of forex reserves and declining inflation. and fully Automated Regulatory Reporting System is under process.(double A minus). HR initiatives are now targeting at consolidating existing human resource and devising training.Fiscal expansion fueled by large outlays to counter the ongoing terrorist activities augment the pressure on internal government finance.

5 dated June 13. 2002. Book value of investments and placements by Staff Provident Fund and Staff Gratuity Fund as at December 31. Summarized key operating and financial data of last eight years is annexed to the audited accounts. Abdulla Nasser Hawaileel Al Mansoori Mr.1. 2009 is: Staff Provident Fund Staff Gratuity Fund j) Rs. Proper books of accounts of the bank have been maintained. 6.908 million Rs.DIRECTORS' REPORT TO THE SHAREHOLDERS Corporate Governance 1. Ikram Ul-Majeed Sehgal Mr. 2. 2009. The system of internal control is sound in design and has been effectively implemented and monitored. 7. Sheikh Hamdan Bin Mubarak Al Nahayan Mr. H. Statement under clause XIX of the Code: a) b) c) d) e) The financial statements prepared by the management of the Bank.Nadeem Iqbal Sheikh Mr. 07 Annual Report 2009 .563 million 2. Abdulla Khalil Al Mutawa Mr. The Bank has implemented the requirements of the Code of Corporate Governance relevant for the year ended December 31. f) g) h) i) The number of Board meetings held during 2009 were 4 and attended by directors as under: No. the result of its operations. 702. Khalid Mana Saeed Al Otaiba Mr.443. have been followed in preparation of financial statements. There has been no material departure from the best practices of corporate governance. the state of affairs. cash flows and changes in equity. 5.Sirajuddin Aziz 4 3 4 4 3 4 4 k) The pattern of shareholding is attached with this report. 3. Appropriate accounting policies have been consistently applied in preparation of financial statements and accounting estimates are based on reasonable and prudent judgment. There are no doubts about the Bank's ability to continue as a going concern. as detailed in the listing regulations duly adopted by the State Bank of Pakistan vide BSD Circular No. of Meetings attended 1. as applicable to banks in Pakistan. A prescribed statement by the management together with the Auditors' Review Report thereon is annexed. H. Bank is in the process of adopting an internationally accepted COSO internal Control-Integrated Framework as per SBP Guidelines. International Accounting Standards. present fairly. 4.

Subsidiary Company Bank Alfalah Limited has 76% shareholding in Alfalah Securities (Private) Limited. 12. Almost all the policies and procedures of the Bank are reviewed from the risk perspective. Basel II and the capital calculation approaches. The Bank has established a Treasury Middle Office to effectively monitor day-to-day trading activities of the dealing room. A separate 'Research & Help Desk' has been created in this regard that helps in creating awareness about Risk Management. Annual Report 2009 SIRAJUDDIN AZIZ Director & Chief Executive Officer March 15. the State Bank of Pakistan. and Operational risk and a team of suitable personnel have been hired. Ministry of Finance and other regulatory authorities for their continuous guidance and support with whom we enjoy a very cordial relationship.570 million have been made during the year to the education and health services organizations. An independent risk review function exists at our Bank through our internal audit group that reports directly to the Board Audit Committee. Market. A dedicated Risk Management Division (RMD) has been created with the Head RMD reporting directly to the Chief Executive Officer. liquidity risk and operational risk as evidenced by its Board approved "Risk Management Policy and Risk Management & Internal Control" manual. Bank Alfalah has been a major sponsor of upgrading and maintaining the civil infrastructure in major cities of Pakistan. Acknowledgement The Board would like to thank our valued customers for their continued patronage and support. The Board would also like to place on record its appreciation for the hard work. Donations of Rs. Risk Management Division has been structured to address Credit. 2010 Abu Dhabi 08 . An Operational Loss Database. Risk & Control Self Assessment (RCSA) exercise and Key Risk Indicators (KRIs) are being developed and implemented across the organization. The Board of Directors through its sub-committee called 'Board Risk Management Committee' (BRMC) oversees the overall risk of the Bank. professionalism and sincere efforts of the senior management. Operational Risk Function and business / support units are involved and regularly collaborate in determining and reviewing the strategy. we plan to open more branches all over Pakistan. The Bank's major focus has been on supporting education and special education. risk awareness culture is being encouraged by communicating the principles of proper risk management to all Bank employees. market risk. dedication. Our belief is that positive contributions made to causes focused on addressing human development challenges is a major responsibility. We are committed to embracing Risk Management and Basel II implementation at our bank not just as a regulatory compliance exercise but as means to adopt best international practices to enhance stakeholders' value. Bank Alfalah has been donating generously to non-profit institutions working on improving healthcare and education in Pakistan. All the business / support units are responsible for ensuring compliance with policies and procedures in their day-to-day activities and monitoring key operational risk exposures. Corporate Social Responsibility As a 'Caring Bank' it has been a primary concern of Bank Alfalah to ensure it is continuously contributing to community development initiatives and programmes across Pakistan. officers and staff of the Bank at all levels. Future Plans In 2010. At Bank Alfalah. in order to use it as an action plan in improving the operational risk & control system at the organizational and business / support unit levels.DIRECTORS' REPORT TO THE SHAREHOLDERS Risk Management The Bank has in place an approved integrated risk management framework for managing credit risk. and the recommendations of RMD are taken into consideration before their approval at the appropriate level.

85 54.70 5.43 29.00 18.702 1.502 239.406 100.67 26.738 248.264 6.918 8. Rs.753 98.net of provision Deposits and other accounts OTHERS Imports Exports RATIOS Capital Adequacy Profit before Tax ratio (PBT/Gross mark up income) Gross spread ratio (Net mark up income/gross mark up income) Income/Expense ratio Return on Average Equity (ROE) Return on Average Assets (ROA) Advances/Deposits Ratio Cash Dividends Stock Dividend Book value per share excluding revaluation of Assets Book value per share including revaluation of Assets Basic Earnings per share No.807 78.92 7.686 149.679 4.057 46.67 62.314 118.24 57.536 1.504 8.80 33.59 35.184 948 895 446 7.543 9.416 31.82 3.91 6.56 25.760 33.246 1.59 64.70 19.95 0.609 19.71 4. Rs.345 10.17 25 100.12 4.304 44.904 76.352 8.573 275.616 65.216 28.966 3.46 24.895 171.84 25.289 9.503 129.17 0.506 2.289 197.45 86.16 36.27 21.54 3.65 0.199 88.48 12.22 0.952 49.79 25 33.002 4. % Times % % % % % % % 5.167 28.273 57.67 30.931 35. Rs.317 71.63 33.08 2.906 3.133 8.41 7.790 188.425 1.472 116.470 51.85 17.48 21.89 0.95 3.831 1.00 17.59 9.05 3.733 324.822 35.305 190.566 4.93 41.092 1.042 75.864 57.69 2.160 300.743 11.34 30.65 16.49 2.43 56.698 4.38 63.803 3.32 1.563 2.03 5.763 3.04 62.685 3. of Employees (other than outsourced) No.973 99.371 8.879 33.130 1.344 5.72 1.92 5.319 24.174 14.070 191.016 897 1.00 21.90 12.53 2.16 29.301 40.86 68.416 222.12 79.11 28.13 20.67 3.789 2.33 16.715 6.62 4.026 2.86 30.67 31.654 2.EIGHT YEAR FINANCIAL SUMMARY All Figures are in Rs.79 8.41 Annual Report 2009 0.991 389.515 24.493 8.509 13.23 1.210 119.711 1.957 2.84 53.77 23.123 7. million 2007 2008 2009 2002 2003 2004 2005 2006 OPERATIONAL RESULTS Total Income Operating Expenses Profit before Income Tax and Provision Profit before Income Tax Profit after Taxation BALANCE SHEET Shareholders' Equity Total Assets Advances .46 12 22.999 56.90 3.770 348.218 9.090 93.593 3.37 0.77 15% 23% 18.937 184.88 3.46 2.15 24.844 79.584 12.492 273.835 88.17 3.92 49.847 70.net of provision Investments .5% 14.18 24.66 20.369 154.140 14.71 7.767 328.462 09 .33 21.795 1.48 2.

all the other directors are non-executive directors. 2009. vi) vii) All the powers of the Board have been duly exercised and decisions on material transactions. The Bank has prepared a "Statement of Ethics and Business Practices". There was no new appointment of CFO. The Board of Directors have met four times in the year and written notices on the Board meeting. including the bank. has been declared as a defaulter by that Stock Exchange. None of the directors of the bank are serving as a director in ten or more listed companies.STATEMENT OF COMPLIANCE WITH THE BEST PRACTICES OF THE CODE OF CORPORATE GOVERNANCE FOR THE YEAR ENDED DECEMBER 31. The bank applies the principles contained in the Code in the following manner: i) ii) Except for the Chief Executive Officer. whereby a listed company is managed in compliance with the best practices of corporate governance. viii) The meetings of the Board were presided over by the Chairman. the Bank's Memorandum and Articles of Association and the Code of Corporate Governance. none of the Directors have defaulted in payment of any loan to a banking company. 2009 This statement is presented to comply with the Code of Corporate Governance contained in Regulation G-1 of the Prudential Regulations for Corporate / Commercial Banking issued by the State Bank of Pakistan. iii) All the resident Directors of the bank are registered as Tax payers and to the best of our knowledge. overall corporate strategy and significant policies of the Bank. were circulated at least seven days before the meetings. a Development Financial Institution (DFI) or a Non Banking Financial Institution (NBFI) or being a member of a Stock Exchange. including appointment and determination of remuneration and terms and conditions of employment of the Chief Executive Officer are approved by the Board. or Head of Internal Audit during the year ended December 31. The minutes of the meetings were appropriately recorded and circulated to all concerned. Lahore and Islamabad Stock Exchanges for the purpose of establishing a framework of good governance. No casual vacancy occurred during the period under review. Listing regulations of the Karachi. The Board has already adopted its vision/mission statement. which has been signed by all the directors and employees of the Bank. ix) The Directors have been provided with the copies of the listing regulations of the Stock Exchange. along with agenda and working papers. x) xi) Annual Report 2009 xii) The Board has setup an effective internal audit function within the Bank. 10 . Company Secretary. The Directors are well conversant with their duties and responsibilities. A complete record of particulars of significant policies along with the dates on which they were approved or amended has been maintained. iv) v) None of the Directors or their spouses is engaged in the business of Stock Exchange.

STATEMENT OF COMPLIANCE WITH THE BEST PRACTICES OF THE CODE OF CORPORATE GOVERNANCE xiii) The Directors' Report for this year has been prepared in compliance with the requirements of the Code and fully describes the salient matters required to be disclosed. xvii) The Board has formed an audit committee. xiv) The financial statements of the bank have been duly endorsed by the Chief Executive Officer and the Chief Financial Officer before approval of the Board. that they or any of the partners of the firm. their spouses and minor children do not hold shares of the Bank and the firm and all its partners are in compliance with International Federation of Accountants (IFAC) guidelines on code of ethics as adopted by the Institute of Chartered Accountants of Pakistan. xxi) The Board considers and approves the related party transactions on an annual basis after review of the Board Audit Committee. xix) The statutory auditors of the bank have confirmed that they have been given a satisfactory rating under the quality control review programme of the Institute of Chartered Accountants of Pakistan. xxii) We confirm that all other material principles contained in the Code have been complied with. 2010 Abu Dhabi . xv) The bank has complied with all the applicable corporate and financial reporting requirements of the Code. all of whom are nonexecutive directors of the bank. It comprises three members. xx) The statutory auditors or the persons associated with them have not been appointed during the period to provide other services except in accordance with the listing regulations and the auditors have confirmed that they have observed IFAC guidelines in this regard. CEO and executives do not hold any interest in the shares of the Bank other than that disclosed in the pattern of shareholding. For and on behalf of the Board 11 Annual Report 2009 Sirajuddin Aziz Director & Chief Executive Officer March 15. xvi) The Directors. The terms of reference of the committee have been formed and advised to the committee for compliance. The Statement of Compliance with best practices of corporate governance is being published and circulated along with the annual report of the bank. xviii)The meetings of the audit committee were held at least once every quarter prior to approval of interim and final results of the Bank and as required by the Code.

nothing has come to our attention which causes us to believe that the Statement of Compliance does not appropriately reflect the Bank's compliance. in all material respects. Annual Report 2009 A. Further. As part of our audit of the financial statements. whether the Statement of Compliance reflects the status of the Bank's compliance with the provisions of the Code of Corporate Governance and report if it does not. Lahore and Islamabad Stock Exchanges where the Bank is listed. A review is limited primarily to inquiries of the Bank personnel and review of various documents prepared by the Bank to comply with the Code. related party transactions distinguishing between transactions carried out on terms equivalent to those that prevail in arm's length transactions and transactions which are not executed at arms' length price recording proper justification for using such alternate pricing mechanism. all such transactions are also required to be separately placed before the audit committee. Lahore and Islamabad Stock Exchanges require the Bank to place before the board of directors for their consideration and approval. Chartered Accountants Karachi Dated: March 16. 2010 12 . to the extent where such compliance can be objectively verified. We are only required and have ensured compliance of the above requirement to the extent of approval of related party transactions by the Board of Directors and placement of such transactions before the audit committee. Our responsibility is to review. Listing Regulations of the Karachi. Based on our review. with the best practices contained in the Code of Corporate Governance as applicable to the Bank for the year ended December 31. The responsibility for compliance with the Code of Corporate Governance is that of the Board of Directors of the Bank. we are required to obtain an understanding of the accounting and internal control systems sufficient to plan the audit and develop an effective audit approach. We have not carried out any procedures to determine whether the related party transactions were undertaken at arm's length prices or not.REVIEW REPORT TO THE MEMBERS ON STATEMENT OF COMPLIANCE WITH THE BEST PRACTICES OF THE CODE OF CORPORATE GOVERNANCE We have reviewed the Statement of Compliance with the best practices contained in the Code of Corporate Governance prepared by the Board of Directors of Bank Alfalah Limited ('the Bank') to comply with Regulation G-1 of the Prudential Regulations for Corporate / Commercial Banking issued by the State Bank of Pakistan and Listing Regulations of the Karachi. We have not carried out any special review of the internal control system to enable us to express an opinion as to whether the board's statement on internal control covers all controls and the effectiveness of such internal controls. 2009. F. Ferguson & Co.

Going forward. It is the responsibility of the bank's management to establish and maintain an adequate and effective system of Internal Control and every endeavor is made to implement sound control procedures and to maintain a suitable control environment. aims and objectives and to evaluate the nature and extent of those risks and to manage them efficiently. comprehensive management testing plans and framework are also planned to be developed for ensuring on-going operating effectiveness of key controls.STATEMENT ON INTERNAL CONTROLS This Statement of Internal Controls is based on an ongoing process designed to identify the significant risks in achieving the bank's policies. the bank plans to develop detailed remediation plans to address the gaps identified and ensure implementation of planned initiatives to adequately remediate the gaps in a timely manner. further Internal Control improvements are expected from the bank's adoption of COSO framework. the bank has completed a detailed documentation of the existing processes and controls. 2010 Abu Dhabi . The management believes that the bank's existing system of Internal Control is considered reasonable in design and is being effectively implemented and monitored. as envisaged under the State Bank of Pakistan's (SBP) Internal Control Guidelines. as described above. The system of Internal Control is designed to manage rather than eliminate the risk failure to achieve the bank's business strategies and policies.procedures and controls and reports significant deviations regularly to the Board Audit committee but also regularly reviews the adequacy of the Internal Control system. as suggested by SBP. In addition. It can therefore only provide reasonable and not absolute assurance against material misstatement and loss. In accordance with this Programme.Integrated Framework. The bank has devised a well-defined and comprehensive Internal Control Programme along the lines of staged roadmap. In addition. together with a comprehensive gap analysis of the control design. For and on behalf of the Board. This process has been continuously in place for the year ended December 31. The bank is currently in the process of adopting an internationally accepted COSO Internal Control . The observations and weaknesses pointed out by the external auditors are also addressed promptly and necessary steps are taken by the management to eliminate such weaknesses. effectively and economically. 13 Annual Report 2009 Sirajuddin Aziz Director & Chief Executive Officer March 15. 2009. and the work under these two stages is currently being reviewed by the bank's external auditors under the SBP Internal Control Guidelines. The Board of Directors have instituted an effective Internal Audit division which not only monitors compliance with the bank's policies .

and in our opinion Zakat deductible at source under the Zakat and Ushr Ordinance.2 to the financial statements. An audit also includes assessing the accounting policies and significant estimates made by management. (d) Annual Report 2009 A. We conducted our audit in accordance with the International Standards on Auditing as applicable in Pakistan. (c) in our opinion and to the best of our information and according to the explanations given to us the balance sheet. and the Companies Ordinance. 1962 (LVII of 1962). cash flow statement and statement of changes in equity together with the notes forming part thereof (here-in-after referred to as the 'financial statements') for the year then ended. except for the changes as stated in note 3. cash flow statement and statement of changes in equity together with the notes forming part thereof conform with the approved accounting standards as applicable in Pakistan. evidence supporting the amounts and disclosures in the financial statements.AUDITORS' REPORT TO THE MEMBERS We have audited the annexed balance sheet of Bank Alfalah Limited as at December 31. statement of comprehensive income. proper books of account have been kept by the bank as required by the Companies Ordinance. and (iii) the business conducted. 1984 (XLVII of 1984). its cash flows and changes in equity for the year then ended. and the Companies Ordinance. 1984 (XLVII of 1984). 1984 (XLVII of 1984). statement of comprehensive income. These standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of any material misstatement. in our opinion: (i) the balance sheet and profit and loss account together with the notes thereon have been drawn up in conformity with the Banking Companies Ordinance. and the returns referred to above received from the branches have been found adequate for the purposes of our audit. 1962 (LVII of 1962). An audit includes examining. in which are incorporated the un-audited certified returns from the branches except for thirty eight branches which have been audited by us and seven branches audited by auditors abroad and we state that we have obtained all the information and explanations which. we report that: (a) in our opinion. on a test basis. 2009. 2010 Karachi 14 . and are in agreement with the books of account and are further in accordance with accounting policies consistently applied. in the manner so required and give a true and fair view of the state of the bank's affairs as at December 31. 1984 (XLVII of 1984). We believe that our audit provides a reasonable basis for our opinion and after due verification. 2009 and the related profit and loss account. Our responsibility is to express an opinion on these statements based on our audit. It is the responsibility of the bank's management to establish and maintain a system of internal control. which in the case of loans and advances covered more than sixty percent of the total loans and advances of the bank. to the best of our knowledge and belief. and give the information required by the Banking Companies Ordinance. were necessary for the purposes of our audit. and the Companies Ordinance. with which we concur. and its true balance of profit. Chartered Accountants Engagement Partner: Salman Hussain Dated: March 16. profit and loss account. 1962 (LVII of 1962). as well as. evaluating the overall presentation of the financial statements. F. 1980 (XVIII of 1980) was deducted by the bank and deposited in the Central Zakat Fund established under section 7 of that Ordinance. investments made and the expenditure incurred during the year were in accordance with the objects of the bank and the transactions of the bank which have come to our notice have been within the powers of the bank. Ferguson & Co. (b) (ii) the expenditure incurred during the year was for the purpose of the bank's business. and prepare and present the financial statements in conformity with the approved accounting standards and the requirements of the Banking Companies Ordinance.

436.420 13.608.739 13 14 15 16 17 18 19 20 21 The annexed notes 1 to 44 and Annexures I and II form an integral part of these financial statements.858 2.BALANCE SHEET AS AT DECEMBER 31.363.181 179.786 366.144 20.770.653.523 2.492.467 14.752 7.031 13.166.452.587.net of tax CONTINGENCIES AND COMMITMENTS 6 7 8 9 10 11 12 35.790.728 19.160 22.936.722.293 9.563 3.921 324.420 32.759.006.581.070. 15 Annual Report 2009 Chief Executive Officer Director Director Chairman .739 7.851 10. 2009 Note 2009 2008 (Rupees in ‘000) ASSETS Cash and balances with treasury banks Balances with other banks Lendings to financial institutions Investments Advances Fixed assets Deferred tax assets Other assets LIABILITIES Bills payable Borrowings Deposits and other accounts Sub-ordinated loans Liabilities against assets subject to finance lease Deferred tax liabilities Other liabilities NET ASSETS REPRESENTED BY Share capital Reserves Unappropriated profit Surplus on revaluation of assets .043 3.465 11.260 2.367 348.222 300.012 22.969 2.042.995.056 3.380 389.732.687.315.335 21.690.639 14.773.280 331.055 3.238 191.946.438 14.957 188.690.000 3.435 99.649.570.766.044.216 17.947.869.133.988 13.571.447.491.159.194 14.044.500 75.973.056.990.169 208.764 3.291.133.025 17.635 22.

494.116.180 10.822.017.957.818 300.447.943 914.454 11.357 6.928.301 (767.613) 493.758 9.312 24.923.472.071.727 25 9.132 3.301 4.419 1.720 1.21 10.301.527 5.71 1.41 The annexed notes 1 to 44 and Annexures I and II form an integral part of these financial statements. commission and brokerage income Dividend income Income from dealing in foreign currencies Gain on sale of securities Unrealized gain / (loss) on revaluation of investments classified as held for trading Other income Total non-mark-up / interest income Non mark-up / interest expenses Administrative expenses (Reversal) / provision against off-balance sheet obligations Other charges Total non-mark-up / interest expenses Extra ordinary / unusual items Profit before taxation Taxation .858 10.298 3.924 11.247.019) (85.835.507 (1.419) 79.016.582 122.2 28 29 (Rupees) Basic / Diluted earnings per share 30 0.PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED DECEMBER 31.926 2.571) 1.794.654. Annual Report 2009 Chief Executive Officer Director Director Chairman 16 .628 4.924 2.281 897.309.369.730.23 26 27 18.6 35.527 6.907.182.net of tax Profit available for appropriation 23 24 10.467 24.694.605 1.966.546 317.151.217 1.Prior years Profit after taxation Unappropriated profit brought forward Transferred from surplus on revaluation of fixed assets .062 28.817 4.051 (1.Current .586 6.794.850 9.542 1.253 12.751.016.5 9.845 424.849 1.283 2.164 59.561.638 20.001.004 248.674) 119.019.696 4.177.479.130 1.316 1.346) (179.035 3.Deferred .732 688.543.355 10.066.840 24. 2009 Note 2009 2008 (Rupees in ‘000) Mark-up / return / interest earned Mark-up / return / interest expensed Net mark-up / interest income Provision against loans and advances Provision for diminution in value of investments Bad debts written off directly Net mark-up / interest income after provisions Non mark-up / interest income Fee.805.261 (181.198 30.997 1.316 1.851.913.790 28.035.720 1.

264 * Surplus / deficit arising on revaluation of fixed assets and 'available for sale' securities is required to be shown separately below equity as 'surplus / deficit on revaluation of assets' in accordance with the requirements specified by the State Bank of Pakistan.139.301 242.035 1. Accordingly.301.STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED DECEMBER 31.963 1. The annexed notes 1 to 44 and Annexures I and II form an integral part of these financial statements.541 490. it has not been reflected in the Statement of Comprehensive Income. 2009 2009 2008 (Rupees in ‘000) Profit after taxation Other comprehensive income*: Exchange differences on translation of net investment in foreign branches Total comprehensive income for the year 897.792.506 1. Chief Executive Officer Director Director Chairman 17 Annual Report 2009 .

113 6.967 7.521) 189.035.308.477 519.513.997) 142.512 242.177) (686.419) (2.849) 59.217) 768.606 12. 2009 Note 2009 2008 (Rupees in ‘000) 1.479.493.166 (25.540.099 1.000.499.130.448.568 (1.045) 19.000) (1.017 1.582.997 1.963 8.699 24.314 3.785.996.500 8.963.205.929 (142.218) 298.026.015 6.903.298 (77.972 (11.766.002) 253.536.624.817 (43.656.291) (3.456) 112.352) (1.945.792 2.740 21.853.694.582 181.164 (1.557.926 5.905.984 20.776) 5.745.515) 223.751 2.489.720 (300.793) (1.698 57.212) (7.583.180 48.397) 2. Chief Executive Officer 18 Director Director Chairman .997.769.475) 27.546 317.583.316 (248.016.454.202 (22.047 The annexed notes 1 to 44 and Annexures I and II form an integral part of these financial statements.237.169 57.000 (988) 3.692.062 28.794.324 (189.784 64.814.034 31.873 6.279.687.943) 1.926) (1.878 CASH FLOWS FROM OPERATING ACTIVITIES Profit before taxation Less: Dividend income Adjustments: Depreciation Amortisation Provision against loans and advances Provision for diminution in value of investments (Reversal) / provision against off-balance sheet obligations Unrealized (gain) / loss on revaluation of investments classified as held for trading Bad debts written-off directly Gain on sale of fixed assets Provision for gratuity (Increase) / decrease in operating assets Lendings to financial institutions Held-for-trading securities Advances Other assets Increase / (decrease) in operating liabilities Bills payable Borrowings Deposits and other accounts Other liabilities Gratuity paid Income tax paid Net cash flow from operating activities CASH FLOWS FROM INVESTING ACTIVITIES Net investments in available-for-sale securities Net investments in held-to-maturity securities Investment in associated companies Dividend income received Investments in fixed assets Proceeds from sale of fixed assets Net cash (used in) / generated from investing activities CASH FLOWS FROM FINANCING ACTIVITIES Issuance of sub-ordinated loans Redemption of sub-ordinated loans Issuance of right shares Dividend paid Net cash generated from / (used in) financing activities Exchange difference on translation of the net investments in foreign branches Increase in cash and cash equivalents Cash and cash equivalents at beginning of the year Annual Report 2009 Cash and cash equivalents at end of the year 31 61.238 (3.927 (16.433.689) 490.467.623.894 144.565) (23.403.621 (705.777 1.300 (649.CASH FLOW STATEMENT FOR THE YEAR ENDED DECEMBER 31.878 1.487.813) (4.255.506 3.270.853.689) (975.388) 314.039) (242.172) (5.211.352 5.052) (7.825 105.999 3.364) (16.571 28.559.

407) (1. 2009 representing additional profit arising from availing FSV benefit for determining provisioning requirement is not available to the bank for the purposes of distribution of dividend to shareholders.491.442 1. 2008 Changes in equity for 2009 Comprehensive income for the year ended December 31.506 820.767.840 13.541 24.673 Balance at January 1.035 1.459 million) as at December 31.775 87.766. 2008 Changes in equity for 2008 Comprehensive income for the year ended December 31.608.000) (1.447.260) 1.net of tax Transfer to statutory reserve Issue of right shares Transfer to reserve for issue of bonus shares Issue of bonus shares for the year ended December 31.5% Balance at December 31.527 897.058 4.499.770.063) - 242.586 - 1.260 - 490. 2009 (a) (b) 6.000 - 2.407 2.500 19. The annexed notes 1 to 44 and Annexures I and II form an integral part of these financial statements.495.264 24.851.000) 3.021 (975.301.495.499.139.499.063 13.327.467 (975.488 million (2008: Rs.1.499.562.997.696 (179.523 3.495.963 - 1. 2009 Share Capital Exchange Unappropriated Reserve Statutory for issue of Translation Reserve Profit Total Bonus Shares Reserve (a) (b) ----------------------------------------------------(Rupees in ' 000)---------------------------------------------------Share Premium 2. As more fully explained in note 10.500.588.STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED DECEMBER 31.500 1. 404.000) 14. 2008 Transfer from surplus on revaluation of fixed assets .260 This represents reserve created under section 21(i)(a) of the Banking Companies Ordinance.net of tax Transfer to statutory reserve Final cash dividend for the year ended December 31.495.301 24.000 7. 2007 declared subsequent to the year end at Rs.586 (260.063 (1.995.063) 2.1 of these financial statements balance of Rs. 1962.696 3.000 - - 260.035 24. 2009 Transfer from surplus on revaluation of fixed assets . 1.000 (1. Chief Executive Officer Director Director Chairman 19 Annual Report 2009 . 2008 @ 12.792.000) - 578.5 per share Transfer to reserve for issue of bonus shares Issue of bonus shares Balance at December 31.690.563 - 179.997.5.728 1.

etc. 1984. In addition. 3. Pakistan Banks Association and Modaraba Association of Pakistan have taken up the issue with SBP and SECP.standards. Building. Banking Companies Ordinance. 1984. 1962 and the directives issued by State Bank of Pakistan (SBP). 1992 as a public limited company under the Companies Ordinance. provisions of and directives issued under the Companies Ordinance. concurrent application with other approved accounting standards in place for conventional banks. Financial Instruments: Disclosures (IFRS 7) on banking companies vide SRO 411(I) / 2008 till further orders. 'Financial Instruments: Recognition and Measurement' and International Accounting Standard (IAS) 40. Key financial figures of the Islamic Banking branches are disclosed in Annexure II to these financial statements. the State Bank of Pakistan has issued various circulars from time to time. IFAS 1 was effective for financial periods beginning on or after January 1.g. Securities and Exchange Commission of Pakistan (SECP) has notified the Islamic Financial Accounting Standard (IFAS) 1 . 1962 and the directives issued by SBP prevail. 2006. 2002 till further instructions. Permissible form of trade-related modes of financing includes purchase of goods by banks from their customer and immediate resale to them at appropriate mark-up in price on deferred payment basis. but are restricted to the amount of facility actually utilized and the appropriate portion of mark-up thereon. 1984. recording of inventories. 1992. Approved accounting standards comprise of such International Financial Reporting Standards issued by the International Accounting Standards Board as are notified under the Companies Ordinance. I. The State Bank of Pakistan has deferred the applicability of International Accounting Standard (IAS) 39. distinguished from the assets in own use. The standard has not been adopted by stand alone Islamic branches of conventional banks pending resolution of certain issues e. I. 2 BASIS OF PRESENTATION In accordance with the directive of the Federal Government regarding the shifting of the banking system to Islamic modes. interpretations and amendments to published approved accounting standards that are effective in the current year a) Islamic Financial Accounting Standard -2 (IFAS 2): "Ijarah" (effective from January 1. 3 3. 2009 1 STATUS AND NATURE OF BUSINESS Bank Alfalah Limited (the Bank) is a banking company incorporated in Pakistan on June 21. 20 .NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31. after eliminating material inter branch transaction / balances. However. The purchases and sales arising under these arrangements are not reflected in these financial statements as such. invoicing of goods. Chundrigar Road. Lahore and Islamabad Stock Exchanges. the requirements of these standards have not been considered in the preparation of these financial statements. investments have been classified and valued in accordance with the requirements prescribed by the State Bank of Pakistan through various circulars. including depreciation on the assets given on ijarah incurred in earning the ijarah income shall be recognised as an expense.1 STATEMENT OF COMPLIANCE These financial statements have been prepared in accordance with approved accounting standards as applicable in Pakistan.A. In addition the Securities and Exchange Commission of Pakistan has also deferred the applicability of International Financial Reporting Standard 7. The financial results of the Islamic banking branches have been consolidated in these financial statements for reporting purpose. Costs. 'Investment Property' for Banking Companies through BSD Circular No. 2009). Banking Companies Ordinance. 10 dated August 26. In case the requirements differ. 7 overseas branches (2008: 7 branches). The Bank's registered office is at B. 1962 and is operating through 253 conventional banking branches including 4 sub branches (2008: 226 branches). the provisions of and directives issued under the Companies Ordinance. 60 Islamic banking branches (2008: 48 branches) and 1 offshore banking unit (2008: 1 unit).Murabaha issued by the Institute of Chartered Accountants of Pakistan.2 Changes in accounting policies and disclosures . Karachi and is listed on the Karachi. It commenced its banking operations on November 01. ijarah transactions entered into by the Bank during the current period are required to be accounted for as follows: Annual Report 2009 - Mujir (lessors) shall present the assets subject to ijarah in their balance sheet according to the nature of the asset. Accordingly. The Bank is engaged in banking services as described in the Banking Companies Ordinance. 1984. In accordance with IFAS 2.

IAS 23 (Amendment) applies to qualifying assets for which the commencement date for capitalization is on or after January 1. c) IAS 23 (Amendment) 'Borrowing Costs' (effective from January 1. construction or production of a qualifying asset (one that takes a substantial period of time to get ready for use or sale) as part of the cost of that asset. 2009). the adoption of this standard did not require any restatement. such disbursements were reflected in the financial statements as a finance lease in accordance with IAS 17. the Bank has accounted for all ijarah disbursements made in 2009 in line with the requirements set out in IFAS 2. IAS 19 has been amended to be consistent. ‘Presentation of financial statements’. ‘non-owner changes in equity’) in the statement of changes in equity. Accordingly. The bank has elected to show elements of comprehensive income in a separate statement. During the year the Bank has changed its accounting policy in respect of borrowing costs to comply with the requirements of IAS 23 (Amendment). b) IAS 1 (Revised). The amendment clarifies that a plan amendment that results in a change in the extent to which benefit promises are affected by future salary increases is a curtailment. the definition of borrowing cost has been amended so that interest expense is calculated using the effective interest method defined in IAS 39 'Financial instruments: Recognition and Measurement'. 2009. "Leases".NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS - Ijarah income shall be recognised in income on an accrual basis as and when the rental becomes due. Comparative information has been represented so that it is also in conformity with the revised standard. Where entities restate or reclassify comparative information. 21 . d) IAS 19 (Amendment). Pursuant to IBD Circular No. 2009 and does not affect qualifying assets for which the commencement date for capitalisation is earlier than the transition date. The definition of return on plan assets has been amended to state that plan administration costs are deducted in the calculation of return on plan assets only to the extent that such costs have been excluded from measurement of the defined benefit obligation. 2009 issued by the State Bank of Pakistan. Previously. the change in accounting policy has had no effect on the financial statements of the Bank for the current or prior years. and has accordingly changed its accounting policy to comply with the new requirements of IAS. The option of immediately expensing those borrowing costs has been removed. The change in presentation has not affected the net assets of the Bank for either the current or any of the prior periods and there is no impact on the earnings per share. ‘Provisions. It requires non-owner changes in equity to be presented separately from owner changes in equity. but entities can choose whether to present one performance statement (the statement of comprehensive income) or two statements (the income statement and statement of comprehensive income). 2009). “Borrowing Costs”. Annual Report 2009 - - The distinction between short term and long term employee benefits will be based on whether benefits are due to be settled within or after 12 months of employee service being rendered. The revised standard prohibits the presentation of items of income and expenses (that is. IAS 37. This standard requires an entity to capitalise borrowing costs directly attributable to the acquisition. borrowing costs were recognised as an expense in the period in which they were incurred. in addition to the current requirement to present statements of financial position at the end of the current period and comparative period. contingent liabilities and contingent assets'. 1 dated January 27. All nonowner changes in equity are required to be shown in a performance statement. The Bank did not have any qualifying assets whose commencement date for capitalisation was on or after January 1. Previously. 2009. As the requirements of IFAS 2 have only been applied to ijarah contracts entered into on or after January 1. requires contingent liabilities to be disclosed. Further. while an amendment that changes benefits attributable to past service gives rise to a negative past service cost if it results in a reduction in the present value of the defined benefit obligation. was issued in September 2007. which are not recognised. The Bank has applied IAS 1(revised) during the current period. they are required to present a restated statement of financial position as at the beginning comparative period. ‘Employee benefits’ (effective from January 1. unless another systematic basis is more representative of the time pattern in which the benefit of the use derived from the leased asset is diminished.

At present. 2009. “Customer Loyalty Programmes” (effective from financial years beginning on or after July 1. 2009. 2006. 'Segment reporting'. ‘Impairment of assets’ (effective from January 1. 3. f) IAS 38 (Amendment). segment information disclosed in these financial statements is based on the requirements laid down by SBP. As per IFRIC 13 where goods or services are sold together with a customer loyalty incentive. disclosures equivalent to those for value-in-use calculation should be made. In addition. 2009). amendments and interpretations to existing standards have been published and are mandatory for the Bank's accounting periods beginning on or after January 1. the arrangement is a multi-element arrangement and the consideration receivable is allocated between the components of the arrangement using fair values. g) IFRIC 13.NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS The bank has adopted the aforementioned amendments from January 1. The amended standard states that a prepayment may only be recognised in the event that payment has been made in advance of obtaining right of access to goods or receipt of services. A dividend obligation is recognised when the dividend was authorised by the appropriate entity and is no longer at the discretion of the entity. 2008). 2009. effective from the accounting year ended December 31. If a third party supplies the awards and the entity is collecting the consideration on its own account. under which segment information is presented on the same basis as that used for internal reporting purposes. segments are reported in a manner that is more consistent with the internal reporting provided to the chief operating decision-maker. ‘Intangible assets’ (effective from January 1. The difference between the dividend paid and the amount carried forward of the net assets distributed should be recognised in profit and loss. Additional disclosures are to be made if the net assets being held for distribution to owners meet the definition of a discontinued operation. IFRS 8 replaces IAS 14. The management of the bank believes that presently this amendment does not have any impact on the bank's financial statements. 2009. (effective from January 1. 2010: IFRIC 17 'Distribution of Non-cash Assets to Owners' was issued in November 2008 and is applicable for financial years beginning on or after July 1. where fair value less costs to sell is calculated on the basis of discounted cash flows. The management of the bank believes that this amendment does not have any impact on the bank's financial statements. the management believes that the afore-mentioned interpretation is not expected to have any impact on the Bank's financial statements.4 Annual Report 2009 22 . The management of the bank believes that as the SBP has defined the segment categorisation in the above mentioned circular. 2006. 2009. The bank has adopted the aforementioned amendments from January 1. Standards. The Bank has adopted IFRIC 13 from January 1. 2009 but are considered not to be relevant or to have any significant effect on the bank's operations and are therefore not detailed in these financial statements. 2009). IFRIC 18 ‘Transfers of assets from customers’ was issued in January 2009 and is applicable for financial years beginning on or after July 1. 2009). It clarifies how to account for transfers of items of property. e) IAS 36 (Amendment). The management of the bank believes that this amendment does not have any impact on the bank's financial statements.3 IFRS 8 'Operating segments'. Accordingly. The bank has adopted the aforementioned amendments from January 1. As per the new requirements. the SBP requirements prevail over the requirements specified in IFRS 8. The new standard requires a 'management approach'. All banking companies in Pakistan are required to prepare their annual financial statements in line with the format prescribed under BSD Circular No. 'Revised Forms of Annual Financial Statements'. This dividend obligation should be recognised at the fair value of the net assets to be distributed. It addresses how the non-cash dividends distributed to the shareholders should be measured. and the entity must then use that item to provide the customer with ongoing access to supply of goods and/or services. the management believes that the afore-mentioned interpretation is not expected to have any impact on the Bank's financial statements. plant and equipment by entities that receive such transfers from their customers. interpretations and amendments to published approved accounting standard that are not yet effective The following standards. The interpretation also applies to agreements in which an entity receives cash from a customer when that amount of cash must be used only to construct or acquire an item of property. plant and equipment. At present. 2009. 4 dated February 17. it shall measure its revenue as the gross consideration allocated to the award credits and recognise the revenue when it fulfils its obligations in respect of the awards. h) There are other amendments to the approved accounting standards and interpretations that are mandatory for accounting periods beginning on or after January 1. 3. The management of the Bank believes that the adoption of this interpretation has not made any material impact on the financial statements.

5. with some significant changes. 2010. with contingent payments classified as debt subsequently re-measured through the income statement. These estimates and assumptions are reviewed on an ongoing basis. and a gain or loss is recognised in profit or loss. 2010.5 Early adoption of standards The Bank did not early adopt new or amended standards in 2009. any remaining interest in the entity is re-measured to fair value. The Bank will apply IFRS 3 (revised) prospectively to all business combinations from January 1. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period. all payments to purchase a business are to be recorded at fair value at the acquisition date. There are certain other new standards.10 and 34) 5 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Annual Report 2009 The principal accounting policies applied in the preparation of these financial statements are set out below. 2010 or later periods but are considered not to be relevant or to have any significant effect on the Bank's operations and are therefore not disclosed in these financial statements. “Consolidated and Separate Financial Statements” applicable for financial years beginning on or after July 1.1 Cash and cash equivalents Cash and cash equivalents comprises cash and balances with treasury bank. The standard also specifies the accounting when control is lost. The financial statements are presented in Pakistani Rupees. estimates and assumptions that affect the reported amounts of assets and liabilities and income and expenses. The amounts are rounded to nearest thousand. Significant accounting estimates and areas where judgements were made by the management in the application of accounting policies are as follows: i) classification and provisioning against investments (notes 5. or in the period of revision and future periods if the revision affects both current and future periods. 2009 requires the effects of all transactions with non-controlling interests to be recorded in equity if there is no change in control and these transactions will no longer result in goodwill or gains and losses. 23 . “Business Combinations” applicable for financial years beginning on or after July 1.1 BASIS OF MEASUREMENT Accounting convention These financial statements have been prepared under the historical cost convention except that certain fixed assets are stated at revalued amounts. All acquisition related costs should be expensed.9 and 29) iv) accounting for defined benefit plan (notes 5. 3. It also requires management to exercise judgement in application of its accounting policies.NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS Revised IFRS 3. For example.2 Critical accounting estimates and judgements The preparation of financial statements in conformity with approved accounting standards as applicable in Pakistan requires management to make judgements. balances with other banks and call lendings for the purpose of the cash flow statement. and held for trading and available for sale investments and derivative financial instruments are measured at fair value. 4 4. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances. 4. 2009 continues to apply the acquisition method to business combinations. on an acquisition basis.3 and 9) ii) classification and provisioning against advances (notes 5. The Bank will apply IAS 27 (revised) prospectively to transactions with non-controlling interests from January 1. to measure the non-controlling interest in the acquiree either at fair value or at the non-controlling interest’s proportionate share of the acquiree’s net assets.4 and 10) iii) income taxes (notes 5. There is a choice. which is the Bank's functional and presentation currency. IAS 27. amendments and interpretations that are mandatory for accounting periods beginning on or after January 1.

For investments classified as held to maturity. All purchases and sales of equity investments that require delivery within the time frame established by regulation or market convention are recognised at trade date. other than those in subsidiaries and associates. The proceeds received are reported in borrowings. A significant or prolonged decline in fair value of an equity investment below its cost is also considered an objective evidence of impairment. Investments sold under repurchase agreements (repo) continue to be recognized in the balance sheet and are measured in accordance with the accounting policy for investments. Investments purchased subject to commitment to resell them at a future date (reverse repo) are not recognized. Available for sale These are investments. Provision for diminution in the value of term finance certificates is made as per the Prudential Regulations issued by the State Bank of Pakistan. In accordance with the requirements of State Bank of Pakistan. dealers margin or are securities included in a portfolio in which a pattern of short-term profit taking exists. Surplus / (deficit) arising on revaluation of securities classified as 'available for sale' is taken to a separate account shown in the balance sheet below equity. Impairment loss in respect of investments classified as available for sale (except term finance certificates) and held to maturity is recognised based on management's assessment of objective evidence of impairment as a result of one or more events that may have an impact on the estimated future cashflows of the investments. Annual Report 2009 24 . 5. interest rate movements. which is the date at which the Bank commits to purchase or sell the investments. Gains or losses on disposals of investments during the year are taken to the profit and loss account.3 Investments The Bank classifies its investments as follows: Held for trading These are investments. as the Bank does not obtain control over the assets. The amounts paid are recognized as lendings to financial institutions. The difference between the purchase / (sale) and resale / (repurchase) consideration is recognized on a time proportion basis over the period of the transaction and is included in mark-up / return / interest earned or expensed. Investments other than those categorised as 'held for trading' are initially recognised at fair value which includes transaction costs associated with the investment. investments classified as 'held to maturity' are carried at amortized cost. Unquoted equity securities. quoted securities other than those classified as 'held to maturity' are subsequently remeasured to market value. the cumulative loss that has been recognised directly in surplus on revaluation of securities on the balance sheet below equity is removed therefrom and recognised in the profit and loss account. Investments classified as 'held for trading' are initially recognised at fair value and transaction costs are expensed in the profit and loss account.NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 5. In accordance with the requirements specified by the State Bank of Pakistan. the impairment loss is recognised in profit and loss account. Investments in subsidiaries and associates are carried at cost. which are either acquired for generating a profit from short-term fluctuations in market prices. which do not fall under the 'held for trading' and 'held to maturity' categories. less accumulated impairment losses. In case of impairment of available for sale securities. excluding investments in subsidiaries and associates are valued at the lower of cost and break-up value.2 Sale and repurchase agreements The Bank enters into arrangements for purchase / (sale) of investments under agreements to resell / (repurchase) investments at a certain date in the future at a fixed price. if any. Surplus / (deficit) arising on revaluation of quoted securities which are 'held for trading' is taken to the profit and loss account. Held to maturity These are investments with fixed or determinable payments and fixed maturities and the Bank has the positive intent and ability to hold them till maturity. Break-up value of equity securities is calculated with reference to the net assets of the investee company as per the latest available audited financial statements.

In principle on the basis of an undertaking (promise to purchase) from the client. if any. if appropriate at each balance sheet date. The depreciation charge for the year is calculated after taking into account residual value.4 Advances Loans and advances Loans and advances including net investment in finance lease are stated net of provisions against non-performing advances. 1984. it sells it to the client at cost plus the profit agreed upon in the promise. Office premises (which includes land and buildings) is stated at revalued amount less accumulated depreciation. However. if appropriate. Intangible assets having a finite useful life are stated at cost less accumulated amortization and accumulated impairment losses. if any. depreciation is charged over the economic life of the asset using straight line basis. Assets under Ijarah are depreciated over the period of lease term. as appropriate. the Bank purchases the goods / assets subject of the Murabaha from a third party and takes the possession thereof. Specific and general provisions against Pakistan operations are made in accordance with the requirements of the Prudential Regulations issued by the State Bank of Pakistan from time to time. The residual values. Such intangible assets are amortized using the straight-line method over their estimated useful lives. Depreciation on additions is charged from the date on which the assets are available for use and ceases on the date on which they are disposed of. useful lives and depreciation method are reviewed and adjusted. only when it is probable that future economic benefits associated with the item will flow to the Bank and the cost of the item can be measured reliably. Office premises are revalued by professionally qualified valuers with sufficient regularity to ensure that the net carrying amount does not differ materially from their fair value.NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 5. Ijarah Assets leased out under 'Ijarah' are stated at cost less accumulated depreciation and accumulated impairment losses. Specific and general provisions are made in accordance with the requirements of the Prudential Regulations issued by the State Bank of Pakistan from time to time. less impairment loss. the Bank can appoint the client as its agent to purchase the goods / assets on its behalf. at each balance sheet date. Historical cost includes expenditure that is directly attributable to the acquisition of the items. if any. The surplus on revaluation of fixed assets to the extent of incremental depreciation charged on the related assets is transferred to unappropriated profit. Murabaha transactions are accounted for at gross receivable net of specific and general provisions. if any. Gain and losses on disposal of fixed assets are taken to the profit and loss account except that the related surplus on revaluation of fixed assets (net of deferred taxation) is transferred directly to unappropriated profit. Maintenance and normal repairs are charged to income as and when incurred. Subsequent costs are included in the asset's carrying amount or are recognised as a separate asset. in the event the asset is expected to be available for re-ijarah. Annual Report 2009 Intangible assets 25 . 5.5 Fixed assets Tangible Assets Fixed assets except office premises are shown at historical cost less accumulated depreciation and accumulated impairment losses. Advances are written off when there are no realistic prospects of recovery. The net provision made / reversed during the year is charged to profit and loss account and accumulated provision is netted-off against advances. Provisions pertaining to overseas advances are made in accordance with the requirements of regulatory authorities of the respective countries. Deficit arising on subsequent revaluation of fixed assets is adjusted against the balance in the above mentioned surplus account as allowed under the provisions of the Companies Ordinance. Intangible assets having an indefinite useful life are stated at acquisition cost. The useful lives and amortization method are reviewed and adjusted. Murabaha Murabaha to the purchase orderer is a sale transaction wherein the first party (the Bank) sells to the client / customer a shariah compliant asset / goods for cost plus a pre-agreed profit.2 to these financial statements. However. if any. Thereafter. Depreciation is charged to income applying the straight-line method using the rates specified in note 11. Surplus arising on revaluation is credited to the surplus on revaluation of fixed assets account.

Income tax expense is recognized in the profit and loss account except to the extent that it relates to items recognized directly in equity. If any such indication exists. A non-current asset (or disposal group) held for sale is carried at the lower of its carrying amount and the fair value less costs to sell. The Bank also recognises a deferred tax asset / liability on the deficit / surplus on revaluation of fixed assets and securities. where the timing of the reversal of the temporary difference can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future. Deferred Deferred tax is recognised using the balance sheet liability method on all temporary differences arising between the carrying amounts of assets and liabilities for financial reporting purposes and amounts used for the taxation purposes. Actuarial gains / losses in excess of 10 percent of the higher of actuarial liabilities or plan assets at the end of the last reporting year are recognized over the average lives of employees. in which case it is recognized in equity.10 Employee benefits Defined Benefit Plan The Bank operates an approved funded gratuity scheme covering eligible employees whose period of employment with the Bank is five years or more. Contributions to the fund are made on the basis of actuarial recommendations. The resulting impairment loss is taken to the profit and loss account except for impairment loss on revalued assets. Subsequent gains in fair value less costs to sell are recognized to the extent they do not exceed the cumulative impairment losses previously recorded.9 Taxation Income tax expense comprises current and deferred tax.Income Taxes. Deferred tax liability is not recognised in respect of taxable temporary differences associated with exchange translation reserves of foreign branches. The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amounts of assets and liabilities using the tax rates enacted at the balance sheet date. the recoverable amount of such assets is estimated and impairment losses are recognised immediately in the financial statements. which is adjusted against related revaluation surplus to the extent that the impairment loss does not exceed the surplus on revaluation of that asset.NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 5. Deferred tax asset is reduced to the extent that it is no longer probable that the related tax benefits will be realized. A non-current asset is not depreciated while classified as held for sale or while part of a disposal group classified as held for sale. 5. Gratuity is payable to staff on completion of the prescribed qualifying period of service under the scheme. A deferred tax asset is recognized only to the extent that it is probable that future taxable profits will be available and the credits can be utilised. if any. Annual Report 2009 26 . which is adjusted against the related surplus / deficit in accordance with the requirements of the International Accounting Standard 12 . 5. Projected Unit Credit Method is used for the actuarial valuation. 5.7 Non-Current Assets Held for Sale The Bank classifies a non-current asset (or disposal group) as held for sale if its carrying amount will be recovered principally through a sale transaction rather than through continuing use.6 Capital work in progress Capital work in progress is stated at cost less impairment losses. Current Current tax is the expected tax payable on the taxable income for the year using tax rates enacted at the balance sheet date and any adjustment to tax payable in respect of previous years. Impairment losses are recognized through the profit and loss account for any initial or subsequent write down of the non-current asset (or disposal group) to fair value less costs to sell. 5.8 Impairment The carrying amount of assets is reviewed at each balance sheet date to determine whether there is any indication of impairment of any asset or group of assets.

Commission on guarantees is recognised on time proportion basis. Ijarah income is recognized on an accrual basis as and when the rental becomes due. commission and brokerage income except income from guarantees are accounted for on receipt basis. 27 .33 percent of basic salary. Expected recoveries are recognised by debiting the customer’s account. The Bank has no further payment obligations once the contributions have been paid. 5. using the effective yield method. debt securities investments and profit on murabaha and musharika financing are recognised on a time proportion basis. it is probable that an outflow of resources will be required to settle the obligation and a reliable estimate of the amount can be made. Other provisions are recognized when the Bank has a legal or constructive obligation as a result of past events.NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS Defined Contribution Plan The Bank operates a recognised provident fund scheme for all its permanent employees to which equal monthly contributions are made both by the Bank and employees at the rate of 8. Profit on murabaha transactions for the period from the date of disbursement to the date of culmination of murabaha is recognized immediately upon the later date. Where debt securities are purchased at a premium or discount.12 Provisions Provision for guarantee claims and other off balance sheet obligations is recognised when intimated and reasonable certainty exists for the Bank to settle the obligation. commission and brokerage Fee. Fee. b) Borrowing / deposit costs are recognised as an expense in the period in which these are incurred using effective mark-up / interest rate method to the extent that they are not directly attributable to the acquisition of or construction of qualifying assets. 5.13 Acceptances Acceptances comprise undertakings by the Bank to pay bills of exchange drawn on customers. front end fee and other lease income are recognized as income when they are realised.14 Revenue recognition Advances and investments Mark-up income on loans and advances. The Bank expects most acceptances to be simultaneously settled with the reimbursement from the customers. Annual Report 2009 Profit on Murabaha is recognized on time apportioned basis. Acceptances are accounted for as off balance sheet transactions and are disclosed as contingent liabilities and commitments. 5. Borrowing costs that are directly attributable to the acquisition. The contributions are recognised as employee benefit expense when they are due. construction or production of a qualifying asset (one that takes a substantial period of time to get ready for use or sale) is capitalised as part of the cost of that asset. Provisions are reviewed at each balance sheet date and are adjusted to reflect the current best estimate. Lease financing / Ijarah Financing method is used in accounting for income from lease financing. where necessary. 5. Dividend income is recognized at the time when the Bank’s right to receive the dividend has been established. Gains / losses on termination of leased contracts. Under this method. Charge to profit and loss account is stated net-of expected recoveries.11 Borrowings / deposits and their cost a) Borrowings / deposits are recorded at the proceeds received. Unrealised lease income and mark-up / return on non-performing advances are suspended. those premiums / discounts are amortised through the profit and loss account over the remaining maturity. in accordance with the requirements of the Prudential Regulations of the State Bank of Pakistan and recognised on receipt basis. documentation charges. the unrealised lease income (excess of the sum of total lease rentals and estimated residual value over the cost of leased assets) is deferred and taken to income over the term of the lease period so as to produce a constant periodic rate of return on the outstanding net investment in the lease.

after the balance sheet date. Contingent liabilities / commitments for letters of credit and letters of guarantee denominated in foreign currencies are expressed in rupee terms at the exchange rates ruling on the balance sheet date. The forward cover fee payable on such contracts is amortized over the term of the contracts. Income and expense items of such assets and liabilities are also off-set and the net amount is reported in the financial statements. All derivative financial instruments are carried as assets where fair value is positive and as liabilities where fair value is negative. 5. Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding for the effects of all dilutive potential ordinary shares. except appropriations which are required under the law.19 Annual Report 2009 Earnings per share The Bank presents basic and diluted earnings per share (EPS) for its shareholders. Forward contracts other than contracts with the State Bank of Pakistan relating to foreign currency deposits are valued at forward rates applicable to the respective maturities of the relevant foreign exchange contract. Commitments Commitments for outstanding forward foreign exchange contracts are disclosed at contracted rates.18 Dividend and appropriation to reserves Dividend and appropriation to reserves. if any.15 Foreign currency translation Functional and Presentation currency Items included in the financial statements are measured using the currency of the primary economic environment in which the Bank operates.17 Off-setting Financial assets and financial liabilities are off-set and the net amount reported in the financial statements only when there is a legally enforceable right to set-off the recognised amount and the Bank intends either to settle on a net basis. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the profit and loss account. are recognised as a liability in the Bank's financial statements in the year in which these are approved. Translation gains and losses arising on revaluations of net investment in foreign operations are taken to Exchange Translation Reserve in the statement of comprehensive income. 5. The results of foreign operations are translated at average rate of exchange for the year. 5. Any changes in the fair value of derivative financial instruments are taken to the profit and loss account. These are recognised in the profit and loss account on disposal. 5. 28 .NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 5. Transactions and Balances Transactions in foreign currencies are translated to Pakistani rupees at the exchange rates ruling on the transaction date. Foreign Operations Assets and liabilities of foreign operations are translated into rupees at the exchange rate prevailing at the balance sheet date. Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Bank by the weighted average number of ordinary shares outstanding during the year.16 Derivative Financial Instruments Derivative financial instruments are initially recognised at fair value on the date at which the derivative contract is entered into and subsequently remeasured at fair value using appropriate valuation techniques. or to realise the assets and to settle the liabilities simultaneously. Forward purchase contracts with the State Bank of Pakistan relating to foreign currency deposits are valued at the spot rate prevailing on the balance sheet date.

or in providing products or services within a particular economic environment (geographical segment).700 Annual Report 2009 6.129. which is subject to risks and rewards that are different from those of other segments.399. trust and estates investment advice. The Bank's primary format of reporting is based on business segments.999.392. banking service.387 million. privatization.534 2. underwriting. bills of exchange and deposits.1 6.335. Corporate finance Corporate banking includes services provided in connection with mergers and acquisition.236 2.503. merchant / commercial / corporate cards and private labels and retail.335 29 5.3 13.364 6.565 million) Foreign currency (including in transit Rs.454 6. private lending and deposits.431 35. corporate finance.089 4.025 2. Geographical segments The Bank operates in three geographical regions being: Pakistan Asia Pacific (including South Asia) Middle East Note 2009 2008 (Rupees in ‘000) 6 CASH AND BALANCES WITH TREASURY BANKS In hand Local currency (including in transit Rs. equity.762 15.141 1. Retail Banking It includes retail lending and deposits.NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 5. guarantees. research.108.993. trade finance.776. 3. funding.240. leasing. equity. real estate.637. brokerage debt and prime brokerage. credit. syndication.497 3. 2008: Rs.926 1. Business segments Trading and sales It includes fixed income.130 32. lending. factoring.056.687.605.984. debts (government. securitization. high yield).128 11.012 2.590.731 2.144.395 million. lending and repos.546 million) With State Bank of Pakistan in Local currency current account Foreign currency current account Foreign currency deposit account With other central banks in Foreign currency current account Foreign currency deposit account With National Bank of Pakistan in Local currency current account National Prize Bonds 1. trust and estates.2 6. 114.4 . export finance.046 1. IPO and secondary private placements.20 Segment Reporting A segment is a distinguishable component of the Bank that is engaged either in providing product or services (business segment). 111. foreign exchanges.973 3. Commercial banking Commercial banking includes project finance.180 20. 2008: Rs.867. 186. banking services. own position securities. commodities.

710. 2007. 9 dated 03 December.3 This includes placements of funds generated through foreign currency deposits scheme (FE-25). During the year this deposit was not remunerated (2008: 0. 7. As per BSD Circular No.367 8.12% to 1.067 6. 8.00% per annum) with maturities upto July 2010 (2008: July 2009).237. Special cash reserve of 15% is required to be maintained with State Bank of Pakistan on FE-25 deposits as specified in BSD Circular No.396 14.854.1 The local currency current account is maintained with the State Bank of Pakistan (SBP) as per the requirements of Section 36 of the State Bank of Pakistan Act.500 8.1 8.4 3.043 7.950 12.2 7.961.722.500 8.3 6.654.435 3.00% to 13.287 8.039 14.1 These represent short term lendings to financial institutions at interest rates upto 13.1 7.185 21.639 604.315. 1956.3 & 8.4% per annum). These carry mark-up at rates ranging from 11.25% per annum (2008: 10.340.500 3. 2008.315.3 7.75% to 13.947.3 These represent short-term lendings to financial institutions against investment securities.204 3.50% per annum) with maturities upto February 2010 (2008: April 2009). Profit rates on these deposits are fixed by SBP on a monthly basis.20% per annum (2008: Nil) and have a maturity period of upto February 2010 (2008: Nil).161.2 This includes amount held in Automated Investment Plans.2 Particulars of lendings to financial institutions In local currency In foreign currencies Annual Report 2009 12.2 6. 7.000 2. 30 .90% to 3.NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 6.396 11.45% to 7.039 2.947. at interest rates ranging from 0.315.40% per annum (2008: 14. Note 2009 2008 (Rupees in ‘000) 6.581.133.500 3.940.00% to 19.480. This section requires banking companies to maintain a local currency cash reserve in the current account opened with the SBP at a sum not less than such percentage of its time and demand liabilities in Pakistan as may be prescribed by SBP. cash reserve of 5% is required to be maintained with State Bank of Pakistan on deposits held under the New Foreign Currency Accounts Scheme (FE-25 deposits).293.1 This represents funds deposited with various banks at profit rates ranging from 5.061 3. the Bank is entitled to earn interest from the correspondent banks at agreed upon rates.561 22.62% per annum (2008: 0. 8 LENDINGS TO FINANCIAL INSTITUTIONS Call money lendings Repurchase agreement lendings (Reverse Repo) 8.00% per annum). The balance is current by nature and on increase in the balance above a specified amount.435 375. Deposits with other central banks are maintained to meet their minimum cash reserves and capital requirements pertaining to the foreign branches of the Bank.4 7 BALANCES WITH OTHER BANKS In Pakistan On current account On deposit account Outside Pakistan On current account On deposit account 768. 14 dated 21 June.

811) 99.Listed Fully paid up ordinary shares / units .946 4.000 77.000 250.714.499.900 53.NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 8.274.821 1.000 250.366.020.711 9.562.000 130.501 4.027 129.391 2.990 100.361 2.039 9 9.000 550.093 40.992 5.511.388.115.093 40.000 250.280 4.469 11.041.200 25.844.Unlisted Term Finance Certificates Sukuk Bonds Held-to-maturity securities Government Bonds Market Treasury Bills Pakistan Investment Bonds Term Finance Certificates Overseas Government Treasury Bills Pakistan Dollar Bond Credit Linked Note Overseas Bonds Preference Shares Sukuk Bonds Associates Warid Telecom (Private) Limited Wateen Telecom Limited Alfalah Insurance Limited Alfalah GHP Value Fund Alfalah GHP Income Multiplier Fund Alfalah GHP Islamic Fund Alfalah GHP Investment Management Limited Subsidiaries Alfalah Securities (Private) Limited Investments at cost Less: Provision for diminution in value of investments Investments (net of provisions) Surplus on revaluation of held-for-trading securities .474 68.050 33.240.310 18.711 100.821 1.493 5.332.633 421.039 4.085.747.158) 99.946 4.348 75.361 2.393.000 250.484 (1.461 129.039 4.431 4.374 (1.339 303.877 38.199 395.990 100.810 5.415 1.710 9.339 303.714.350.883.600) 71.074.010.368 8.821 1.net Deficit on investment in associate Total investments 9.000 550.000 550.237.849 354.23 20.620 438.076.701.069.894 3.710 9.341 13.000 90.099.796 417.310 18.176.877 33.069.21 2009 Held by Bank Given as collateral Total Held by Bank 2008 Given as collateral Total ------------------------------------Rupees in '000-----------------------------------253.900 43.474 68.675.753 76.422 1.563.788.085.274.753 76.758 11.907.000 130.726 277.237.068 (204.511.661.518 1.151.973.662 458.366.341 13.849 367.726 277.474 68.319 (325.493 5.102.2 20.268.204 357.1 INVESTMENTS Investments by types: Held-for-trading securities Fully paid up ordinary shares / units .200 30.848.645) 10.766 (1.238 31 Annual Report 2009 .3 9.753 76.991.657.993 4.050 33.810 5.084.151.883.477 (1.076.199 395.102.479.220.169.074 384.857.388.440 35.240.675.834 2.703 9.461 129.493 5.957 4.633 421.511.521 11.074.000 130.281 5.154 517.796 417.204 357.991.781 4.493 5.208 1.368 8.545 2.796 417.000 130.907.000 550.518 1.711 253.net Surplus / (Deficit) on revaluation of available-for-sale investments .993 4.479.521 11.492 57.788.041 4.062) 76.894 3.485 85.990 100.366.366.753 76.220.Listed Available-for-sale securities Market Treasury Bills Pakistan Investment Bonds Fully paid up ordinary shares / units .626.199.020.992 (325.492 59.440 25.655.039 - Market Treasury Bills Pakistan Investment Bonds 10.492 57.990 100.626.890 4.474 68.245) - 9.068 (153.027 129.993 (50.084.041.158) 90.883.000 72.620 438.638 9.811) 89.4 Securities held as collateral against lendings to financial institutions 2009 Note Held by Bank 2008 Further Held by Further Total Total given as given as Bank collateral collateral ------------------------------------Rupees in '000-----------------------------------10.563.099.498.609.492 85.159.041 4.062) 71.511.562.000 10.391 2.208 1.392) 9.883.907.796 417.711 (13.431 4.821 1.074 384.881.

753 77.719 1.Preference Shares Term Finance Certificates.431 3.19 9.6 This represents Overseas Government Treasury Bills amounting to BDT 359.245) 75.671 438.3 Investments include certain approved / government securities which are held by the Bank to comply with the Statutory Liquidity Requirement determined on the basis of the Bank's demand and time liabilities as set out under section 29 of the Banking Companies Ordinance.15 9.737 76.020 10.169.00% per annum (2008: 7.net Deficit on investment in associate Total investments 9. ten and fifteen years.359.251.339 395.01% to 14.230 million issued by the Government of Bangladesh.18 9.068 (204.00% to 14.Overseas Government Bonds .158 384.894 4.458.00% to 8.5 9.284.374.738.25% per annum (2008: 10.Credit Linked Note Investment in subsidiary company Investment in associates Total investments at cost Provision for diminution in value of investments Surplus / (Deficit) on revaluation of held-for-trading securities .10 9. Notes and Participation Term Certificates: .374 (1.957 44.661 129.931 9.158) 2.633 68.Sukuk Bonds .416.718.Pakistan Investment Bonds .Un-listed companies .973.725 4.601.17 9. These carry interest at rates ranging from 2.00% per annum) with maturities from December 2010 to September 2019 (2008: April 2009 to June 2019).676.16 9.938 9. Annual Report 2009 9.Government Bonds .703 (325. 9.245.241.376 1. Bonds. 35 million) pledged with the National Bank of Pakistan as security to facilitate Telegraphic Transfer discounting facility. 9.964 5.199 54.074 1.NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS Note 2009 2008 (Rupees in ‘000) 9.428 18.23 20.623 76. Debentures.821 303.655.9 46.Un-listed TFCs .7 9.492 12.399.Pakistan Dollar Bond Fully Paid up Ordinary Shares / Preference Shares / Units / Certificates: .494 2.197 57. 35 million (2008: Rs.50% to 13.238 9.560 1.Sukuk Bonds .Overseas Bonds .664 1.4 Market Treasury Bills are for the periods of six months and one year.706 421.883.491 85.Overseas Government Treasury Bills . These also include PIBs having face value of Rs.835 25.2 20.3 9. The rates of profit range from 8.12 9.14 9.477 (1. The effective rates of profit on Market Treasury Bills range between 11.811) 99. 1962.753 100.208 22.967.821 277.159.11 9.041.000 5. 32 .341 4.net Surplus / (Deficit) on revaluation of available-for-sale securities .849 354.Listed TFCs . five.000 5.062) 1.21 9.4 9.6 9.Listed companies / mutual funds .070.479.853.60% per annum (2008 : Nil) and are due for maturity in March 2010.883.617.01% per annum) with maturities upto December 2010 (2008: October 2009).8 9.467 129.190.13 9.158.419.2 Investments by segments: Federal Government Securities: .730 357.Market Treasury Bills .00% to 14.5 Pakistan Investment Bonds (PIBs) are for periods of three.759.

The rates of profit on these bonds ranges between 11.952.973 729.033 75.949.180 502.239 9.500 50.000 1.10 Particulars of investments in listed companies / mutual funds include the following: 2009 2008 (Number of shares / certificates / units) 971.000 50.435 18.653 258.500.000 200.435 108.000 80.000 9.635 15.952 504.97% per annum (2008: 9.821 967.025 million issued by the State Bank of Pakistan for a period of three years.397.043. 9.523.000 450.952 150.99% to 14.537 488.000 972.952 504.000 1.919 41.397.893.79% to 14.000 10.260 1.240 400.156 2.951 1. 9.635 15.870 327.949.903 million (2008: Nil) and BDT 66.9 This represents Pakistan Dollar Bonds of US Dollar 5.000 75.931.167 25.738.92% per annum (2008: 12.882 100.000 145.000 450. 8.000 50.8 This represents sukuk bonds of Rs. 9.549 729.503.125 400.653 258.850 35.951 1.647 49.893.50% per annum) and between 11.000 35.000 49.NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 9.471 327.441 545.125%) per annum and are due for maturity in March 2016 (2008: March 2016).000 75.000 200.009.230.523.000 70.133 million issued by Water and Power Development Authority (WAPDA) for a period of ten years and ijarah sukuk of Rs.156 2. The rates of profit on Government of Afghanistan bond ranges from 7.079 50.882 100.043.695 100.919 41.555 4.000 912 100.000 15.870 1.000 9.627 600.000.754 70.435 1.76%) respectively. 1.537 488.125% (2008: 7.000 972.20% to 7.000 1.317 50.700 million (2008: Nil) respectively.941 1.000 1.Capital Protected Fund II UTP A30+Fund INSURANCE Adamjee Insurance Company Limited 2009 2008 (Rupees in ‘000) 41.000 5.771 30.958 50.7 These represent Overseas Government Bonds issued by the Government of Afghanistan and the Government of Bangladesh amounting to AFA 876.000 18.695 100.079 50.033.000 50.000 50.435 25.000 520.000 51.960.000 - 33 Annual Report 2009 .161 97.58% per annum (2008: Nil) while Government of Bangladesh bond carries profit at 10. These bonds carry interest at 7.67% to 12.167 9.67% to 12.000 145.000 600.821 967.892 1.180 502.000 20.240 3.931.633 100.000 30.500.652 685.60% per annum (2008: Nil).000 50.958 50.000 36.525 487.652 685.000 971.260 1.000 1. The bonds have maturities upto March 2014.000 10.000.525 487.000 50.000 49.325 MUTUAL FUNDS AKD Income Fund AKD Opportunity Fund AMZ Plus Income Fund Askari Asset Allocation Fund Askari Income Fund Atlas Income Fund Dawood Money Market Fund First Habib Income Fund IGI Income Fund JS Aggressive Income Fund JS Income Fund (formerly UTP .941 1.549 152.161 97.239 5.Income Fund) KASB Liquid Fund KASB Stock Market Fund MCB Dynamic Cash Fund Meezan Balanced Fund Meezan Islamic Income Fund NAFA Cash Fund NAFA Stock Fund Pak Oman Advantage Fund Pak Oman Bank of Punjab Advantage Plus Fund Pak Oman Islamic Fund Pakistan Capital Market Fund Pakistan Income Fund Pakistan Premier Fund Limited Pakistan Strategic Allocation Fund PICIC Growth Fund Reliance Income Fund United Islamic Income Fund United Money Market Fund United Stock Advantage Fund UTP .000 150.136 181.000 million issued by the Government of Pakistan.

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 2009 2008 (Number of shares / certificates / units)

2009 2008 (Rupees in ‘000)

75,000 358,972 263,067 1,310,000 175,000 225,000 2,667,640 1,242,591 1,953,000 3,403,000 100,000 50,000 7,640,000 5,378,252 121,770 562,375 2,151,544 500,000 1,000,000 424,000 268,594 100,000 9,923,500 3,000,000 170,000 1,318,710 100,000 2,480,000 804,000 1,601,337

358,972 221,875 2,993,000 750,000 175,000 2,667,640 165,000 1,305,000 1,953,000 100,000 145,000 215,000 350,000 167,200 255,000 2,203,500 2,201,200 530,760 726,000 85,000 9,383,500 3,150,000 54,863 1,318,710 150,000 250,000 804,000 1,601,337

INVESTMENT COMPANIES & BANKS Allied Bank Limited Arif Habib Investment Limited Arif Habib Securities Limited Askari Bank Limited Bank Al Habib Limited J.S Bank Limited Jahangir Siddiqui & Company Limited KASB Securities Limited MCB Bank Limited National Bank of Pakistan NIB Bank Limited Samba Bank Limited The Bank of Punjab United Bank Limited CEMENT Al-Abbas Cement Company Limited D.G.Khan Cement Limited Fauji Cement Company Limited Fecto Cement Limited Lucky Cement Limited FUEL, ENERGY, OIL & GAS Kohinoor Energy Limited Kot Addu Power Company Limited Oil and Gas Development Company Limited Pakistan Oilfields Limited Pakistan Petroleum Limited Pakistan State Oil Company Limited Southern Electric Power Company Limited The Hub Power Company Limited AUTOMOBILE ASSEMBLERS Indus Motor Company Limited TEXTILE Azgard Nine Limited Hira Textile Mills Limited Nishat Mills Limited TECHNOLOGY & COMMUNICATION Pakistan Telecommunication Company Limited Telecard Limited Worldcall Telecom Limited CHEMICALS & FERTILIZERS Engro Corporation Limited (formerly Engro Chemical Pakistan Limited) Fauji Fertilizer Bin Qasim Limited Fauji Fertilizer Company Limited ICI Pakistan Limited Lotte Pakistan PTA Limited (formerly Pakistan PTA Limited) STEEL & ALLIED Crescent Steel & Allied Products Limited MISCELLANEOUS Pace Pakistan Limited Tri- Pack Limited

4,545 9,297 12,559 15,269 1,005 6,802 93,794 98,982 9,121 10,924 1,320 3,051 50,118 34,592 1,793 34,175 41,417 22,525 106,260 81,448 47,632 28,757 29,170 94,210 3,553 2,980 6,842 49,012 1,600 4,756

44,871 16,394 193,406 46,281 1,750 180,066 38,899 257,147 41,683 2,478 9,896 8,445 2,045 9,701 14,731 70,990 248,991 136,784 162,869 22,727 64,725 89,398 15,392 16,484 7,006 3,375 2,975 12,490

17,810 605,000 1,297,200 25,000 207,000 1,118,263

20,000 5,030,000 500,000 25,000 1,100,000 2,147,000 10,000

3,232 15,134 135,177 4,092 1,586 29,087 12,830 1,080 2,967,467

3,609 185,298 62,685 3,175

80,954 62,997 1,530 4,284,661

Annual Report 2009

2,225,000 10,000

34

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 2009 2008 (Rupees in ‘000)

9.11 Investments in unlisted companies
2009 2008 (Number of shares)
572,531 572,531 Pakistan Export Finance Guarantee Agency Limited Chief Executive: Mr. S.M. Zaeem Break-up value per share: Rs. 2.06 Period of financial statements: December 31, 2008 Society for Worldwide Interbank Financial Telecommunication Chief Executive: Mr. Lazaro Campos Break-up value per share: Rs. 286,025.71 Period of financial statements: December 31, 2008 Al-Hamra Hills (Private) Limited Chief Executive: Mr. Habib Rafiq Break-up value per share: Rs. 9.47 Period of financial statements: June 30, 2009 (Un-audited) Al-Hamra Avenue (Private) Limited Chief Executive: Mr. Habib Rafiq Break-up value per share: Rs. 9.54 Period of financial statements: June 30, 2009 (Un-audited)

5,725

5,725

16

16

4,096

4,096

7,000,000

7,000,000

70,000

70,000

5,000,000

5,000,000

50,000

50,000

129,821

129,821

9.12 Investments in preference shares
2009 2008 (Rupees in ‘000)

Investee company STS Holdings Limited BRAC Bank United Hospitals Limited

Redemption terms Semi annual redemptions over 5 years ending in 2011 Annual redemptions over 5 years ending in 2012 Annual redemptions over 5 years ending in 2011 60,973 121,948 94,510 277,431 57,340 114,680 131,874 303,894

9.13 Particulars of Term Finance Certificates - Quoted, Secured Askari Bank Limited (2nd Issue) (formerly Askari Commercial Bank Limited) 20,000 (2008: 20,000) units of Rs. 5,000 each Mark up: Average Six Months KIBOR (Ask Side) + 150 basis points per annum (no floor no cap) Redemption: The TFC is structured to redeem 0.02 percent of principal semi-annually in the first ninety months and remaining principal at maturity.
Annual Report 2009

99,840

99,880

Maturity: Rating: Chief Executive:

Eight years from date of disbursement i.e. October 31, 2013 AA- (PACRA) Mr. Mohammad Rafiquddin Mehkari

35

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 2009 2008 (Rupees in ‘000)

Standard Chartered Bank (Pakistan) Limited - (3rd Issue) 10,000 (2008: 10,000) units of Rs. 5,000 each Mark up: Average Six Months KIBOR + 200 basis points prevailing one working day prior to the beginning of each semi-annual period. Redemption: A nominal amount i.e. 0.16 percent of the issue amount will be re-paid equally in each of the redemption periods during the first four years. Maturity: Seven years from the date of issue i.e. February 1, 2013 Rating: AAA (PACRA) Chief Executive: Mr. Badar Kazmi Bank Al Habib Limited 9,350 (2008: 9,350) certificates of Rs. 5,000 each Mark up: Average Six Months KIBOR + 1.50 percent per annum with a floor of 3.50 percent and a cap of 10.00 percent per annum Redemption: The TFC is structured to redeem 0.25 percent of principal semi-annually in the first seventy-eight months and the remaining principal in three semi-annual installments of 33.25 percent respectively starting from the eighty-fourth month. Maturity: July 2012 Rating: AA (PACRA) Chief Executive: Mr. Abbas D. Habib The Royal Bank of Scotland (formerly ABN Amro (Pakistan) Limited) 578 (2008: 578) units of Rs. 5,000 each Mark up: Average Six Months KIBOR (Ask Side) + 190 basis points (no floor no cap) Redemption: The TFC is structured to redeem 97.92 percent of principal in four annual installments after a grace period of fifty-four months. The remaining principal is to be redeemed in semi annual installments during the tenor of the TFC. Maturity: Eight years from the date of disbursement i.e. February 2013. Rating: AA- (PACRA) Chief Executive: Mr. Shehzad Naqvi Trust Investment Bank Limited (formerly Trust Leasing Corporation Limited) Nil (2008: 11,136) certificates of Rs. 5,000 each Mark up: Average Six Months KIBOR (Ask Side) + 3.00 percent per annum with a floor of 6.00 percent and a cap of 10.00 percent per annum Redemption: Principal repayment in ten equal semi-annual installments; profit payable on semi-annual basis. Maturity: July 2009 Rating: A (PACRA) Chief Executive: Mr. Humayun Nabi Jan

49,930

49,950

46,657

46,675

2,885

2,887

-

11,136

Annual Report 2009

36

399 399.000 (2008: 37. Humayun Murad Jahangir Siddiqui & Company Limited 10.440 399.(JCR .600 154.94 percent each of the issue amount respectively starting from the seventy-eighth month.50 percent per annum (no floor no cap) Redemption: The instrument is structured to redeem 0. Maturity: September 2014 Rating: AA.000 (2008: 10.91 percent in the sixtieth month and the remaining 49.000 each Mark up: Average Six Months KIBOR + 2.940 49. 2013 Rating: AA. 49.91 percent in the last six months.00 percent and a cap of 16. May 31.384 38. Rashid Khan ORIX Leasing Pakistan Limited 37.e.90 percent per annum (no floor no cap) Redemption: The instrument is structured to redeem 0.000 each Mark up: Average Six Months KIBOR (Ask Side) + 285 basis points per annum Redemption: The instrument is structured to redeem 0.08 percent of principal in the first twenty-four months in four equal semi-annual installments and the remaining 99.889 49.000) certificates of Rs.044 184.50 percent with a floor of 6. 5. Redemption: The instrument is structured to redeem 0. 5. Maturity: May 2012 Rating: AA+ (PACRA) Chief Executive: Mr. Aftab Manzoor Pakistan Mobile Communication (Private) Limited 80. 5.24 percent of principal in the first seventy-two months and the remaining principal in four equal semi-annual installments of 24. Munaf Ibrahim 38.NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 2009 2008 (Rupees in ‘000) Allied Bank Limited 7. May 2012 AA+ (PACRA) Mr.22 percent of the principal would be redeemed during the last thirty-six months in six equal semi-annual installments.960 Maturity: Rating: Chief Executive: 37 Annual Report 2009 .000 each Mark up: Average Six Months KIBOR + 1.18 percent of principal in the first fifty-four months.686) certificates of Rs.000 each Mark up: Average Six Months KIBOR + 1.02 percent of principal semi-annually in the first fourty-eight months and remaining amount in six semi-annual installments. 5.000 (2008: 80. Maturity: Seven years from the date of issue i.VIS) Chief Executive: Mr.686 (2008: 7.00 percent per annum.000) units of Rs.(PACRA) Chief Executive: Mr.000) certificates of Rs.

2009 and remaining issue amount in four equal semi-annual installments of 24. Fawad Ahmed Mukhtar Askari Bank Limited TFC-3 90.50 percent per annum Redemption: Principal redemption in six stepped-up semi-annual installments starting from the issue date.940 99. with a grace period of one year and three years for Class A TFCs and Class B TFCs respectively. starting from the 102nd month after the issuance. Maturity: Five years from the issue date i.792) certificates of Rs. the issuer has a Call Option exercisable at profit payment date to redeem in full or in part the outstanding issue amount of the TFCs.458.000 each Mark up: Average Six Months KIBOR plus 2. Nasir Raza Pak Arab Fertilizers Limited 20. 2013 Rating: AA (PACRA) Chief Executive: Mr. 5. the issuer may call the TFC in part or full on any profit payment date subject to thirty days prior notice.00 percent and a cap of 16. Maturity: August 2009 Chief Executive: Mr. 5.980 450. Maturity: August 2019 Rating: AA.75 percent per annum Redemption: Eight equal semi-annual installments commencing from eighteenth month of the issue date.000 - Annual Report 2009 1. Shaikh Financial Receivables Securitization Company Limited 15.931 38 .792 (2008: 15.00 percent per annum. Mohammad Rafiquddin Mehkari - 12.NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 2009 2008 (Rupees in ‘000) Azgard Nine Limited Nil (2008: 10.000 each Mark up: Average Six Months KIBOR + 1.000 (2008: 20. 5.000 each Mark up: Average Six Months KIBOR + 2.50 percent (for one to five years) Average Six Months KIBOR plus 2. Maturity: January 2014 Rating: A+ (PACRA) Chief Executive: Mr.32 pecent of total issue amount in the first ninety six months after issuance i.500 67.00 percent per annum with a floor of 8.000 each Mark up: Average Six Months KIBOR + 1.92 percent each.070. February 28.95 percent (for six to ten years) Redemption: This instrument is structured to redeem 0.e.000) certificates of Rs. 5.075 99. S. M.(PACRA) Chief Executive: Mr.428 1.e.000 (2008: Nil) certificates of Rs. Ahmed H. Redemption: Principal redemption will be carried out in twelve and eight equal semi-annual installments in arrears.368 75.000) certificates of Rs. September 28.

The issuer will have a Call Option to redeem in full or part the outstanding face value of the TFCs on every installment date.000 each Mark up: SBP discount rate + 0. subsequent six equal semi-annual installments commencing from August 2008 amounting to Rs. 12. the issuer has a Call Option exercisable at any time from the beginning of the 16th month till the end of the 19th month from the issue date only on a profit payment date subject to a 30 day notice period.500 each.00 percent per annum Redemption: First four equal semi-annual installments commencing from August 2003 amounting to Rs. Rashid Khan 200. 5.000) certificates of Rs.153 22.000 10. 70.000 each Mark up: Average Six Months KIBOR (Ask Side) + 1. the issuer has a Call Option exercisable any time at 24th. Tanveer Ahmad Pakistan International Airlines Corporation Nil (2008: 100.000 each. Naseer Ahmed Paramount Spinning Mills Limited Nil (2008: 16.80 percent per annum with a floor of 8.000) certificates of Rs. Redemption: Seven equal semi-annual installments commencing from June 2006 Maturity: June 2009 Chief Executive: Mr.843 14. 5.30 percent per annum Redemption: In two equal semi annual installments starting from the 30th month from the date of issue i. October 2007. Secured Gulshan Spinning Mills Limited Nil (2008: 10.000 354.500 each.499.830. 48th and 72nd month to redeem in full or part with a premium.000 200.NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 2009 2008 (Rupees in ‘000) 9. 5.14 Particular of Term Finance Certificates .000) certificates of Rs. 5. Redemption: Seven equal semi-annual installments commencing from June 2006 Maturity: June 2009 Chief Executive: Mr.277 39 Annual Report 2009 . 5.000 each Mark up: Average Six Months KIBOR (Ask Side) + 1.80 percent per annum with a cap of 15.Unquoted. Maturity: September 2010 Chief Executive: Mr.75 percent per annum Redemption: Ten equal semi-annual installments commencing from January 2005.00 percent per annum. Next six equal semi-annual installments commencing from August 2005 amounting to Rs.e. 5.000 each Mark up: Average Six Months KIBOR + 1. Maturity: February 2011 Chief Executive: Captain Muhammad Aijaz Haroon Crescent Leasing Corporation Limited (2nd Issue) Nil (2008: 10.00 percent per annum. Maturity: July 2009 Chief Executive: Syed Shahnawaz Ahmed Rizvi Pakistan Mobile Communication (Private) Limited 40.000) certificates of Rs.000 each Mark up: Average Six Months KIBOR (Ask Side) + 1.000 (2008: 40.000) certificates of Rs.50 percent per annum with a floor of 8.

00 percent per annum payable semi-annually.900 - 28. 5.70 percent per annum Redemption: The instrument is structured to redeem 0. Maturity: 7 years from the date of disbursement i.920 99.e. Amir Abbassciy Jahangir Siddiqui & Company Limited 20.NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 2009 2008 (Rupees in ‘000) Pakistan Mobile Communication (Private) Limited (2nd Issue) Nil (2008: 30.000 499. Ahmed Jaudet Bilal BYCO Petroleum Pakistan Limited (formerly known as Bosicor Pakistan Limited) Nil (2008: 20.000 each Mark up: Average Six Months KIBOR (Ask Side) + 325 basis point per annum (no floor no cap) Redemption: Redemption after a grace period of one year in 24 equal quarterly installments. Maturity: September 2009 Chief Executive: Mr. July 2013.20 percent of principal in the first 60 months and remaining principal in two equal semi-annual installments of 49. 5.571 99. 500 million or in multiples thereof in its entirely. 5.00 percent and a cap of 13.000 (2008: 20.00 percent per annum Redemption: Five equal semi-annual installments commencing from March 2007.000 (2008: 100. starting from the 24th month) onwards on a coupon date subject to a 60 days notice period to repay in whole or in part.000 each Mark up: Average Six Months KIBOR (Ask Side) + 1. the issuer has a Call Option exercisable at any time from the 1st principal repayment date (i.700 499. Munaf Ibrahim - 30. 5. Rashid Khan Pak American Fertilizers Limited (formerly known as Dominion Fertilizers (Private) Limited) 100.000) certificates of Rs. the issuer has a Call Option exercisable in full at any time after 1 year on a coupon date. Redemption: Seven equal semi-annual installments commencing from August 2006.60 percent per annum with a floor of 4.95 percent and a cap of 12.50 percent per annum with a floor of 9.e. The issuer has a Call Option exercisable from six months from the date of disbursement at any mark-up payment date subject to a prepayment amount of at least Rs. the issuer has a Call Option exercisable any time from the 36th month to 54th month on a coupon date subject to 30 days notice period to repay in whole or in part.000) certificates of Rs. Maturity: September 2009 Chief Executive: Mr.960 Annual Report 2009 40 . Chief Executive: Mr.000) certificates of Rs. Maturity: July 2013 Chief Executive: Mr.000 each Mark up: Average Six Months KIBOR (Ask Side) + 1.000) certificates of Rs.90 percent each of the issue amount respectively from 60th month.000 each Mark up: Average Six Months KIBOR (Ask Side) + 5.

000.00 percent per annum Redemption: 10 equal semi-annual installments commencing from the 24th months from first draw down.000.000 30.000 30.000 each Mark up: Average Six Months KIBOR + 1. 100.note 9.940 99.75 percent per annum Redemption: In 6 equal semi annual installments. Abdus Samad Khan Azgard Nine Limited 19.000. Maturity: February 2013 Chief Executive: Muhammad Ibrahim Majoka Faisalabad Electric Supply Company Limited (FESCO) .000.000 each Average Six Months KIBOR (Ask Side) + 0.000) certificates of Rs.000 4.02 percent of principal semi-annually in the first 12 months and remaining amount in 10 semi-annual installments.000 each Mark-up: Average Six Months KIBOR (Ask Side) + 2.000 (2008: 6.1 40.000) certificates of Rs. Ahmed H.note 9. 5.000 4.996 (2008: 19.60 percent per annum Mark-up: Redemption: Bullet payment at maturity Maturity: September 2012 Chief Executive: Mr. Redemption: The instrument is structured to redeem 0. Manzoor Ahmed Mir First Dawood Investment Bank Limited 6. Maturity: December 2014 Chief Executive: Mr. Maturity: April 2014 Chief Executive: Mr.000 4.000.000 each Average Six Months KIBOR (Ask Side) + 0. Maturity: March 2014 Chief Executive: Mr. Tariq Qazi 30.000 (2008: 40.000 - 41 Annual Report 2009 .000) certificates of Rs.000 4.000 (2008: 40. 5.000 30. 100.05 percent per annum Mark-up: Redemption: Eight equal semi-annual installments commencing after a grace period of one year.25 percent per annum.05 percent per annum Mark-up: Redemption: Eight equal semi-annual installments commencing after a grace period of one year Maturity: February 2013 Chief Executive: Mr.996) certificates of Rs. 5.000 each Mark-up: Average Six Months KIBOR + 3. Tanwir Safder Cheema National Transmission and Despatch Company 800.000 each Average Six Months KIBOR (Ask Side) + 1.960 4.000 (2008: Nil) certificates of Rs.14.NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 2009 2008 (Rupees in ‘000) Khunja Textile Mills Limited 6. after completion of grace period.000 (2008: 6000) certificates of Rs. 5.1 40.000 99. First principal payment due at the end of 30th month from the first disbursement. Shaikh Gujranwala Electric Power Company Limited (GEPCO) .14.

1 June 2014 June 2015 August 2014 March 2021 December 2016 June 2012 September 2012 September 2015 Profit rate per annum 3 months KIBOR plus 1.000 Note 9. Accordingly.2 Note 9. This represents Credit Linked Note amounting to US Dollar 5. 2009. Pursuant to this decision.50 percent 6 months KIBOR plus 2.197 9.272 100.875 75.00 percent 3 months KIBOR plus 2.15.600 42.000 94.000 21.334 75.15 percent 6 months KIBOR plus 1.50 percent Unit 59.000 20. GEPCO and FESCO have now become fully absolved of these liabilities and the Federal Government will make arrangements for repayment of these term finance certificates.399. The relevant sukuk bonds against the advance subscription have not been issued to the Bank by December 31.000 60.II Orix Leasing Pakistan Limited Security Leasing Corporation Limited Kohat Cement Company Limited Sitara Energy Limited BRR Guardian Modaraba K. 2009.30 percent 3 months KIBOR plus 1.750 190. 9. 9.000 20.000 15.1 20.00 percent per annum Redemption: In 6 equal semi annual installments.700 93.440.000 (2008: Nil) certificates of Rs.419.625 56.15. GoP will make arrangement of payment of mark up on these liabilities to lending financial institutions.000 96.000 2009 2008 (Rupees in ‘000) 298.I Sitara Chemical Industries Limited .000 15.835 298.3 5.416. The bond carries interest at 3 months LIBOR plus 350 bps and is due for maturity in March 2013.000 95.000 100.500 158. 2009.853.250 1.000 1.000 38. 5.000 20.560 9.600 42. 2009.000 Note 9.272 100.00 percent 3 months KIBOR plus 1.09% per annum and are due for maturity in December 2011. The relevant sukuk bonds against the advance subscription have not been issued to the Bank by December 31.1 This represents advance payment to Sitara Energy Limited.1 The Government of Pakistan (GoP) has decided to assume bank loan liabilities of Pakistan Electric Power Company with effect from July 1. 9.16 9. Annual Report 2009 9. 42 .664 9.00 percent 6 months KIBOR plus 1.15.700 62. The first installment of principal redemption amounting to Rs. First principal payment due at the end of 30th month from the first disbursement.740 25. Maturity: September 2014 Chief Executive: Mr.15.000 300.304 250.3 This represents conversion of loan amount into sukuk bonds.2 This represents advance payment to Liberty Power Tech Limited.000 100. S.15.000 300.000 each Mark up: Average Six Months KIBOR + 2.95 percent 6 months KIBOR plus 1.15.25 percent 6 months KIBOR plus 1.250 98.70 percent 6 months KIBOR plus 1. 500 million each which was due from GEPCO and FESCO respectively in August 2009 has not been paid to date and will now be settled by the GoP.15.000 20.14.15 Investments in sukuk bonds Investee company Sitara Chemical Industries Limited . after completion of grace period. Shahid Rafi 5. The relevant sukuk bonds against the advance subscription have not been issued to the Bank by December 31.17 This represents overseas bonds amounting to BDT 21.088. Sulemanji Esmailji & Sons (Private) Limited Sitara Peroxide (Private) Limited Liberty Power Tech Ltd Amreli Steel (Private) Limited Security Leasing Corporation Limited Security Leasing Corporation Limited Engro Corporation Limited (formerly Engro Chemical Pakistan Limited) Date of maturity December 2013 December 2013 June 2012 September 2013 December 2012 Note 9.30 percent 3 months KIBOR plus 1. the Finance Division of GoP is in the process of finalising modalities for transfer of these liabilities (which include the term finance certificates of GEPCO and FESCO) from the books of power companies to Power Holding (Private) Limited.95 percent 6 months KIBOR plus 1.80 percent 6 months KIBOR plus 1. These bonds carry interest at 14.080 million issued by IDLC in Bangladesh.000 million issued by Standard Chartered Bank.10 percent 3 months KIBOR plus 3.000 205.000 - 18.NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 2009 2008 (Rupees in ‘000) Power Holding (Private) Limited 1.

1) Warid Telecom (Private) Limited Percentage of holding: 8.899.261.Alfalah GHP Investment Management Limited (Paid-up value of each unit is Rs. (58.600.487 100.18 Particulars of investments in subsidiary companies The paid up value of these ordinary shares is Rs.01) Date of audited financial statements: December 31.796 83.920 41. 50) 4. 50) Alfalah GHP Income Multiplier Fund Percentage of holding: 92.42% (2008: 54. 2009 Chief Executive: Mr.000 68.413. 2009 Chief Executive: Mohammad Shoaib Memon 76. 2009 2008 (Number of shares) 7.000 9. Nasar us Samad Qureshi Alfalah GHP Value Fund Percentage of holding: 28.Alfalah GHP Investment Management Limited (Paid-up value of each unit is Rs.000 76.054.474 6.19. 2009 Chief Executive: Mr.990 2.494.000 6. 6.19 Particulars of investments in associates The paid up value of these shares / units is Rs.899.413.73 .366.19. 61.15 Date of audited financial statements: December 31. 2009 2008 (Number of shares / units) 2009 2008 (Rupees in ‘000) 319.990 68.109 11.000 7.474 417.366. 2009 Management Company .76%) Break-up value per share: Rs.957.109 550.05% (2008: 15.10.000 Alfalah Securities (Private) Limited Percentage of holding: 76% Break-up value per share: Rs. 10. 2009 Management Company .45 Date of financial statements: December 31.000 550.note 9. 52.10 except where stated. Tariq Malik Alfalah Insurance Limited Percentage of holding: 30% (2008: 30%) Break-up value per share: Rs.NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 2009 2008 (Rupees in ‘000) 9.000 100.note 9.261.796 4.747.19.76% (2008: 8.06%) Break-up value per unit: Rs.06 Date of audited financial statements: December 31.40%) Break-up value per unit: Rs.42 . Muneer Farooqui Wateen Telecom Limited Percentage of holding: 20% (2008: 20%) Break-up value per share: Rs.460 417.2 Date of last audited financial statements: June 30.000 76.124 267.000 Annual Report 2009 43 .487 2.600.2 Date of last audited financial statements: June 30. 2009 Chief Executive: Mr.000 76. 12.279 (note 9.000 11.

50) Alfalah GHP Investment Management Limited Percentage of holding: 40.096.000 250.963 42.440 154.940 200.225 5.493 5.56%) Break-up value per unit: Rs.988.136 38.2 This represents the break-up value of the shares of investee company based on the unaudited financial statements of the company as at December 31.Government Securities) 95.854 37.930 46.Government Securities) 517.19.978 427.384 399.315 32.657 2.399 399.225 Alfalah GHP Islamic Fund Percentage of holding: 96.883.832 2.600 184.940 100.960 1.501 30.561 457.Alfalah GHP Investment Management Limited (Paid-up value of each unit is Rs.049.950 46.210 200.048.570 5.960 30.940 450.185 400.199. 11.675 2.753 5. 2009 Chief Executive : Mr.992 5.493 130.533 50.388. 9.017.841 200.679 52.788.000 42.715 3.000 99.225 30.753 9.20 Quality of available for sale securities Market value Cost Long/Medium 2009 2008 2009 2008 Term Credit Rated by ---------------------Rupees in '000--------------------Rating Market Treasury Bills Pakistan Investment Bonds Term Finance Certificates Askari Bank Limited (2nd Issue) (formerly Askari Commercial Bank Limited) Standard Chartered Bank (Pakistan) Limited (formerly Union Bank Limited) Bank Al-Habib Limited The Royal Bank of Scotland (formerly ABN Amro (Pakistan) Limited) Trust Investment Bank Limited (formerly Trust Leasing Corporation Limited) Allied Bank Limited Pakistan Mobile Communication (Private) Limited ORIX Leasing Pakistan Limited Jahangir Siddiqui & Company Limited First Dawood Investment Bank Limited Financial Receivables Securitization Company Limited "A" Financial Receivables Securitization Company Limited "B" Pak Arab Fertilizers Limited Pakistan Mobile Communication (Private) Limited Azgard Nine Limited Askari Bank Limited (3rd Issue) 34.844 99.960 1.940 30. 2009 Management Company .000 99.581 32.100 36.747 99.NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 2009 2008 (Number of shares / units) 2009 2008 (Rupees in ‘000) 5.621 32.960 49.049.19.1 Warid Telecom (Private) Limited issued 51.827 31.889 49.883.000 34. 62.029 11.147 30.044 49.000 42.885 38.22%) Break-up value per share: Rs.048.036 438.840 49.980 200.361 30.107 1.22% (2008: 40.000 1.154 (Unrated .675.694 51.907 93.60 Date of audited financial statements: December 31.587 154.761.887 11.000 33.845 right shares to the Bank during the year against the amount subscribed by the Bank during the year ended December 31.662 44. Aziz Anis Dhedhi 250.070 13.010. 9.368 99.419.000 13.55% (2008: 66.412 187.000 99.391 AAAAA AA AA- PACRA PACRA PACRA PACRA Annual Report 2009 BBB(RW-) PACRA AAJCRVIS AAPACRA AA+ PACRA AA+ PACRA CCC PACRA A+ PACRA ------(Unrated)-----AA JCRVIS ------(Unrated)-----------(Unrated)-----AAPACRA 44 .880 49.781 (Unrated .070 130.000 99. 2008.675.760 99. 2009.417 35.86 Date of audited financial statements: December 31.760 100.

260 26.435 25.118 94.000 150.167 25.000 35.899 257.000 150.253 94.Khan Cement Limited Fauji Cement Company Limited Fecto Cement Limited Lucky Cement Limited Kohinoor Energy Limited Kot Addu Power Company Limited Oil and Gas Development Company Limited Pakistan Oilfields Limited Pakistan Petroleum Limited Pakistan State Oil Company Limited Southern Electric Power Company Ltd The Hub Power Company Limited 45 Annual Report 2009 44.445 2.551 159.850 36.000 5.000 36.175 15.716 33.958 50.430 50.079 50.000 450.089 13.478 9.573 BBB(f) JCRVIS ------(Unrated)-----BB(f) JCRVIS ------(Unrated)-----------(Unrated)-----A+(f) PACRA ------(Unrated)-----------(Unrated)-----3 Star PACRA ------(Unrated)-----AA-(f) PACRA ------(Unrated)-----------(Unrated)-----------(Unrated)-----------(Unrated)-----------(Unrated)-----3 Star / 4 Star PACRA ------(Unrated)-----AA-(f) JCRVIS ------(Unrated)-----A+(f) PACRA ------(Unrated)-----AA-(f) PACRA ------(Unrated)-----------(Unrated)-----------(Unrated)-----------(Unrated)-----------(Unrated)-----A+ (f) JCRVIS ------(Unrated)-----AAPACRA ------(Unrated)-----AA PACRA A/A1 PACRA ------(Unrated)-----AA/A1+ PACRA AA+/A1+ PACRA A/A1 PACRA A+/A1 PACRA AA+/A1+ PACRA AAA JCRVIS AA-/A1+ PACRA A JCRVIS AA-/A1+ PACRA AA+ JCRVIS ------(Unrated)-----------(Unrated)-----------(Unrated)-----------(Unrated)-----------(Unrated)-----------(Unrated)-----------(Unrated)-----AAA JCRVIS ------(Unrated)-----------(Unrated)-----AA+/A1+ PACRA ------(Unrated)-----AA+/A1+ PACRA .417 110.000 18.731 70.583 46.106 12.793 30.446 137.000 49.000 30.725 82.000 450.750 180.005 93.165 35.896 8.000 50.540 9.278 28.000 9.339 41.850 35.371 25.147 41.289 27.435 18.000 50.005 93.823 51.555 4.535 41.759 65.490 66.147 97.NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 9.610 40.618 50.000 51.20 Quality of available for sale securities Market value Cost Long/Medium 2009 2008 2009 2008 Term Credit Rated by ---------------------Rupees in '000--------------------Rating Shares in Listed Companies / Certificates / Units AKD Income Fund AKD Opportunity Fund AMZ Plus Income Fund Askari Asset Allocation Fund Askari Income Fund Atlas Income Fund Dawood Money Market Fund First Habib Income Fund IGI Income Fund JS Aggressive Income Fund JS Income Fund (formerly UTP .000 145.239 6.250 49.500 50.600 30.683 2.417 22.500 47.798 3.950 52.322 7.050 12.332 43.754 70.121 9.128 1.668 9.000 145.980 77.644 18.172 102.744 37.869 22.294 2.600 47.534 187.608 18.210 50.959 1.440 93.000 9.320 5.264 1.118 37.988 9.545 48.542 15.352 4.320 50.757 27.857 47.G.508 48.281 1.000 10.525 106.776 74.974 42.592 1.062 30.753 66.079 50.000 75.385 15.882 100.000 200.045 9.960 198.051 6.907 87.066 38.406 46.406 21.924 1.038 54.935 110.990 248.181 144.992 136.Capital Protected Fund II UTP A30 + Fund Adamjee Insurance Company Limited Arif Habib Investment Limited Arif Habib Securities Limited Askari Bank Limited Bank Al Habib Limited J.229 70.000 75.784 162.695 100.269 1.167 402.000 200.936 43.658 50.887 9.240 41.Income Fund) KASB Liquid Fund KASB Stock Market Fund MCB Dynamic Cash Fund Meezan Balanced Fund Meezan Islamic Income Fund NAFA Cash Fund NAFA Stock Fund Pak Oman Advantage Fund Pak Oman Bank of Punjab Advantage Plus Fund Pak Oman Islamic Fund Pakistan Capital Market Fund Pakistan Income Fund Pakistan Premier Fund Limited Pakistan Strategic Allocation Fund PICIC Growth Fund Reliance Income Fund United Islamic Income Fund United Money Market Fund United Stock Advantage Fund UTP .613 9.771 30.000 50.958 50.573 1.118 34.000 15.701 14.299 30.645 2.969 89.398 73.126 2.167 9.374 11.029 68.871 16.127 912 2.698 22.935 32.000 50.000 912 100.882 100.000 49.121 1.394 193.000 70.831 6.000 44.995 99.314 159.727 64.S Bank Limited KASB Securities Limited MCB Bank Limited National Bank of Pakistan NIB Bank Limited Samba Bank Limited The Bank of Punjab United Bank Limited Al-Abbas Cement Company Limited D.584 43.121 10.000 80.338 56.239 5.763 889 24.653 1.709 7.279 33.794 20.633 100.346 426.463 10.794 96.695 100.000 50.175 29.000 50.000 20.

300 2.485 ------(Unrated)-----------(Unrated)-----------(Unrated)-----------(Unrated)------ Ijara Sukuk Bonds Ijara Sukuk Bonds Ijara Sukuk Bonds Ijara Sukuk Bonds Sui Southern Gas Company Security Leasing Corporation Limited .073 955.655 6.390 1.980 40.NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS Date of issue Indus Motor Company Limited Hira Textile Mills Limited Nishat Mills Limited Pakistan Telecommunication Company Limited Telecard Limited Worldcall Telecom Limited Engro Corporation Limited (formerly Engro Chemical Pakistan Limited) Fauji Fertilizer Bin Qasim Limited Fauji Fertilizer Company Limited ICI Pakistan Limited Crescent Steel Limited Pace Pakistan Limited Tri.000.393.000 75.469 5.392 16.742 2.550 1.065 102.479.081 75.407 53.075 1.390 103.000 95.940 989.074.479.099.875 2.609.075 1.821 1.438.954 8.062 Annual Report 2009 46 .405.714.980 3.164 (32.725 4.500.250 15.600 4.203 50.887 29.175 80.177.Pack Limited Market value Cost Long/Medium 2009 2008 2009 2008 Term Credit Rated by ---------------------Rupees in '000--------------------Rating 3.530 4.002.490 3.175 13.625 8.900 53.686.062 317.371 2.040 ------(Unrated)-----------(Unrated)-----------(Unrated)-----------(Unrated)-----AA PACRA ------(Unrated)-----------(Unrated)------ 2009 2008 (Rupees in ‘000) 9.000 2.064.000 129.000.II 26-Sep-08 29-Dec-08 11-Mar-09 17-Sep-09 1.824 35.733 18.375) (1.725 4.725.405.062 1.000 3.I Security Leasing Corporation Limited .917 2.238 36.000 21.954 62.042.000 50.115 5.997 1.756 1.000 50.274.096 70.693) 325.479.006 2.609 185.246 2.300 21.484 7.461 ------(Unrated)-----------(Unrated)-----A+/A1 PACRA ------(Unrated)-----------(Unrated)-----A-/A2 PACRA AA/A1+ PACRA ------(Unrated)-----------(Unrated)-----------(Unrated)-----------(Unrated)-----A/A1 PACRA A+/A1 PACRA Shares in Un-listed Companies Pakistan Export Finance Guarantee Agency Limited Society for Worldwide Interbank Financial Telecommunication Al-Hamra Hills (Private) Limited Al-Hamra Avenue (Private) Limited Not Applicable Not Applicable Not Applicable Not Applicable 5.000 129.000 3.930 2.298 62.027 15.003.365 1.950 56.821 1.000.877 38.002 1.925 13.684 3.21 Particulars of provision for diminution in value of investments Opening balance Charge for the year Reversals Provision written off during the year Closing balance 1.000 93.002.929 64.096 70.975 12.756 12.600 4.663.980 2.546 1.000 2.718 18.500.158 1.

087 12.052 3.394 103 (19) 148 32 (1.443 1.693 5.440 3.640 55.952 3.842 3.Al-Hamra Avenue (Private) Limited Held-to-maturity securities Unlisted companies .092 1.NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 2009 2008 (Rupees in ‘000) 9.Term finance certificates / sukuk bonds .232 2.559 6.440 253.806 4.Pack Films Limited Pakistan Telecommunication Limited The Hub Power Company Limited Unrealised loss in respect of equity securities reclassified from held for trading category to Available for Sale .142 4.200 10.23.Fully paid up ordinary shares of Rs.849 2.545 9.Khunja Textiles Mills Limited Investment in subsidiary companies .725 3.note 9.466 253.497 1.639) (181.200 47 Annual Report 2009 .849 848 220 1.062 9.net Investee Company Fully paid up ordinary shares / units .068 (182.080 8.Al-Hamra Hills (Private) Limited .000 - 76.Pakistan Export Finance Guarantee Agency Limited .899 30.802 2.354 2.375 6.000 325.Fully paid up ordinary shares / units / certificates Unlisted companies . 10 each .438. 10 each .051 3.23 Unrealized gain / (loss) on revaluation of investments classified as held for trading .369 3.479.314 3.1 Unrealised gain / (loss) Cost 2009 2008 2009 2008 -----------------Rupees in '000----------------187 (59) (140) (395) 402 (36) 55 (129) 122 2.Kohat Cement Company Limited .359 34.586 29.158 36.553 6.825 10.22 Particulars of provision for diminution in value of investments by type and segment Available-for-sale securities Listed companies / mutual funds .571) 10.103 1.723 2.926 - 74.830 1.297 12.744 31.Listed NAFA Stock Fund Adamjee Insurance Company Limited Allied Bank Limited Arif Habib Investment Management Limited Arif Habib Securities Limited Jahangir Siddiqui & Company Limited National Bank of Pakistan United Bank Limited Lucky Cement Limited Pakistan Oilfields Limited Pakistan Petroleum Limited Southern Electric Power Company Limited Azgard Nine Limited Nishat Mills Limited Engro Corporation Limited (formerly Engro Chemical Pakistan Limited) Fauji Fertilizer Bin Qasim Limited Fauji Fertilizer Company Limited ICI Pakistan Limited Lotte Pakistan PTA Limited (Formerly Pakistan PTA Limited) Crescent Steel & Allied Products Limited Pace Pakistan Limited Tri.216) 121 35 (1) 186 (50) 6 2.Alfalah Securities (Private) Limited 132.Fully paid up ordinary shares of Rs.

2 Net investment in finance lease 2009 2008 Not later Later than Over Not later Later than Over than one one and less five Total than one one and less five Total year than five years years year than five years years -----------------------------------------------------------(Rupees in '000)--------------------------------------------------------Lease rentals receivable Residual value Minimum lease payments Financial charges for future periods Present value of minimum lease payments 2. running finances.841 7.007.118.5 (8.722 10.849) 4.175 12.626 (470. 10 of 2004 "Revaluation surplus / deficit" dated July 13.598) (1.683) 191.514 11.360.304.2 170.985 197.581 15.341 7.536 1.085) (6.664) (763.790.718.251.587 197.030.335. etc.118.914 5.655 197.626.163) 858.143.569 (56.671 (5.931.042.355 946.085.597.737 8.622 10.23.628.556. In Pakistan Outside Pakistan Net investment in finance lease In Pakistan Outside Pakistan Financing and investing assets under IFAS 2 Ijarah Bills discounted and purchased (excluding treasury bills) Payable in Pakistan Payable outside Pakistan 10.438 181.949) 7.416.832 4.007 16.143.3 Provision against advances Specific provision against non-performing advances General provision against advances 10.294.968 56.200 197.780.1.055.526 (762.309 14.406 14.952 4.1 In local currency In foreign currencies Short term (upto one year) Long term (over one year) 10.979 915.988.406 1.988 180.025 9.451.301.355 4.671 131.186.118.195 3.590 171. cash credits.958 17.173 3.280 14. 2004 issued by the State Bank of Pakistan.302 5.354.931.143.306 65.445) 7.937.971.355 10.981.683 4.050.403.545.730) 188.960.140.600.092.179.299 178.178.671 10.597 180.430.708 8.1 Particulars of advances .456 2.789.018.616) (1.304 (792) (1.290 6.116.168 141.352.365 197.168 168.403.861.713 197.666.534.685. Note 2009 2008 (Rupees in ‘000) 10 ADVANCES Loans.gross of provisions 10.931.168 10.567 3.164 (980.780.981 10.465.856 3.365 4.403.677 743.613.245.770 820.712) 2.719 5.406 Annual Report 2009 48 .036 10.NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 9.574 825.698) (2.420 9.5 10.595.066) (9.1 This reclassification was made as allowed under BSD Circular No.942.080.

374 595. 2009. b) Movement in net book value of ijarah assets Asset categories Vehicles Vehicles Plant & Equipment Total Consumer Corporate Machinery --------------------------------(Rupees in '000)-------------------------------- At January 1. "Ijarah" and presented separately as financing and investing assets as disclosed in note 10.923 299. 2009 Cost Accumulated depreciation Net book value Year ended December 31. 2009 Cost Accumulated depreciation Net book value 660.414 10.049 5. The significant ijarah contracts entered into by the Bank are with respect to vehicles.574) 195.083 5.162 586.122 7.652 221. 2009 have been accounted for in accordance with the requirements of IFAS 2.812.676 10.726) 946. 10.1 Net investment in finance lease includes ijarah financing made prior to January 1.484) 120.523 3.323.262 (64.512) (211) 625.011.4 196.290 2.374 595.326 (25.520.536 1.748 279.122 7.778 1. for which provision has been maintained at 60% of the outstanding balance on SBP's instruction.3.993 7.122.047 16.752 123. 105.050 586.070 15. Ijarah contracts entered on or after January 1.664 8.391.664 *Substandard advances include amount of Rs.523 3.994 7.105.3 Financing and investing assets under IFAS-2 (Ijarah) a) Brief description of the ijarah arrangements Ijarah contracts entered into by the Bank essentially represent arrangements whereby the Bank (being the owner of assets) transfers its usufruct to its customers for an agreed period at an agreed consideration.652 660.049 1.994 (945) 5.520.2.826 8.767 - Advances include Rs 16.375 (34.885.676 197. 49 Annual Report 2009 Category of Classification Other Assets Especially Mentioned (Agri Financing) Substandard* Doubtful Loss .484) 120.105.716 8.991 2.186 billion (2008: Rs 8.934 billion) which have been placed under non-performing status as detailed below:2009 Classified Advances Provision Required Provision Held Domestic Overseas Total Domestic Overseas Total Domestic Overseas Total -----------------------------------------------------------(Rupees in '000)--------------------------------------------------------145.323.826 8.078.24 million.326 (25.620 8.597.375 (34.275.872 16.536 2009 2008 (Rupees in ‘000) c) Future Ijarah payments receivable Not later than one year Later than one year and not later than five years Later than five years 10.NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 10.838 330 481.574) 195.994 (945) 5.101.989 1.050 197.038 481.262 (64.994 205.515) (211) 946. 2009 Opening net book value Additions Disposals Depreciation Adjustment Closing net book value At December 31.597.185.011.567 (3.567 (3.533.391.723) 625.838 330 481. plant and machinery and equipment and are for periods ranging from 3 to 5 years.998 3.718 145.290 8.872 205.620 481.752 221.083 123.

055.066 9.051 567. 2009. banks have been allowed to avail the benefit of 40% of forced sales value of pledged stocks and mortgaged commercial. 10 dated October 20.012 83.085.558 182.310 2.730 4.854.818 64.598 4.245 22.622 6.919.934.038 4. However.2 General provision against consumer loans represents provision maintained at an amount equal to 1.538 280. Under the previous guidelines issued by SBP which were effective from December 31. commercial and industrial properties would not be available for payment of cash or stock dividend.875.049 182.104 8.498 (868.952) 3.645) 8.479.598 1.169 175.839 205.906 (132.594) 2. General provision for overseas branches is maintained in accordance with the guidelines of the authorities in the respective countries.029 4.519. 2009.664 1.694.391 386.892) (291.598 51.621 4.367 763.085 (30.730 3. 2009 would have been lower by approximately Rs.711 225.645) 9.405. as per the Circular the additional impact on profitability arising from availing the benefit of forced sales value against pledged stocks and mortgaged residential.5% of the fully secured performing portfolio and 5% of the unsecured performing portfolio as required by the Prudential Regulations issued by the State Bank of Pakistan. 2008.462 22 567.409 43.488 million (2008: 404.048 4. 10.047 389.542.985.051 179. The additional profit arising from availing the FSV benefit .581 296.net of tax at December 31.098. Had the provision against non-performing loans and advances been determined in accordance with the previously laid down requirements of SBP.049 432 432 3.562.146 1.664 688.873.3 Particulars of provisions against advances 2009 2008 Specific General Total Specific General Total -----------------------------------------------(Rupees in '000)--------------------------------------------Annual Report 2009 In local currency In foreign currencies 8.606 3. banks were allowed to avail the benefit of 30% of forced sales value of pledged stocks and only mortgaged residential and commercial properties held as collateral against all non-performing loans for 3 years from the date of classification for calculating provisioning requirement.085.5.127) (291.027 8.140.606 182. the specific provision against non-performing loans would have been higher and consequently profit before taxation and advances (net of provisions) as at December 31.035.066 6.391.546.854.085.1 2009 2008 Specific General Total Specific General Total -----------------------------------------------(Rupees in '000)--------------------------------------------5.5.061 265.094.140.771.137) (58.598 1.055.048 4.822 (932.073 1.127) 763.228 (439.NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS Category of Classification Other Assets Especially Mentioned (Agri Financing) Substandard Doubtful Loss 2008 Classified Advances Provision Required Provision Held Domestic Overseas Total Domestic Overseas Total Domestic Overseas Total -----------------------------------------------------------(Rupees in '000)--------------------------------------------------------167.332 567.683 20.098.597.5 Particulars of provision against advances Note Opening balance Exchange adjustment and other movements Charge for the year Reversals / recoveries Amounts written off Closing balance 10. 10.029 179.731) 2.673 (494.291 3.728 (1.942 2.064.1 During the year the State Bank of Pakistan (SBP) has introduced certain amendments in the Prudential Regulations in respect of maintenance of provisioning requirements against non-performing loans and advances vide BSD Circular No.047 389.146 4.080.549 5.360.997 (439. The benefit of discounted forced sales value of mortgaged industrial properties was previously not available to banks for calculating provisioning requirement.231) 1.330) 6.273 4.6.598 10.099.546 (494.509 22 567.085 5.683 10.549 5.380.085 4.683 50 .159.498 (1.360.055.049 432 432 3.919.409 20.873. residential and industrial properties held as collateral against all non-performing loans for 3 years from the date of classification for calculating provisioning requirement with effect from September 30.330) 5.055.055.459).597.638. 600.509 386. 1.198 3.873.444.026.002.558 8.549 5. Under the revised guidelines issued by SBP.957 million.192 9.825) 3.100. 2009 which is not available for either cash or stock dividend to shareholders amounted to approximately Rs.907 73.140.632 39.699 74.462 1.608 3.5.825 8.

395 4.NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 10.628 In terms of sub-section (3) of Section 33A of the Banking Companies Ordinance.102 (659.279 8.000 and above Write offs of below Rs.000 10.8 Particulars of loans and advances to directors.994. associated companies.026 (26.225.994.516 554.817 554.962.293 Annual Report 2009 Total FIXED ASSETS Capital work-in-progress Property and equipment Intangible assets 11. Note 2009 2008 (Rupees in ‘000) 10.462 439.384) 2.275 2.954 51 .923 1.987) 1.296 15. stock in trade etc. managed modarabas and other related parties 11 Balance at beginning of year Loans granted during the year Repayments Balance at end of year 220.615 5.511 29.064 26.1 11.2 Write offs of Rs.390 80.577 Debts due by companies or firms in which the directors of the Bank are interested as directors. executives or officers of the Bank or any of them either severally or jointly with any other persons Balance at beginning of year Loans granted during the year Repayments Balance at end of year 2. 500.462 46.472. controlled firms.485) 998.225.086.592.577 1. building and machinery.1 Capital work-in-progress Civil works Equipment / intangibles Advances to suppliers and contractors Others 1.954 11.330 28.645 59.073. 500.079.032 2.1 Against provisions Directly charged to profit and loss account 10.247 467.and above 494.404) 3.000/.931 13.035 188.768.137.5.395 5.784.060) 601. partners or in the case of private companies as members Balance at beginning of year Loans granted during the year Repayments Balance at end of year 998.993 2.6.853.194 662.792 Debts due by subsidiary companies. 10. executives.492.100. the Bank holds enforceable collateral in the event of recovery through litigation.727 266.6.169 11.4 Although the Bank has made provision against its non-performing portfolio as per the category of classification of the loan.773.005 14. etc.7 Details of loans written-off of Rs.381 432.154 12.695) 220.955 775. These securities comprise of charge against various tangible assets of the borrower including land.768. 500.444.408 217.577 461.257.2 11.792 1.154 175.981 (14.417.792 1.298 467.417. 1962 the Statement in respect of loans written-off or any other financial relief of five hundred thousand rupees or above allowed to a person(s) during the year ended 31 December 2009 is given in Annexure-1.5 2.169 (536.738.764 2.946 507.213.474 (998.6 Particulars of write-offs 10. Debts due by directors.063.280 (5.265.628 35.

873 (302.630) * 4.140 2. 31.716 - 477.206.455) 3.5% Description Office premises 4.402) * (28.298 2.283) * (1.5% Description Office premises 3.951 2.149 (302.114 12.646 184.016 (57.814 37.25% 3.885 (7.205.515.736) 732.5%-5.814 4.400) * (9.997 - 1.551.900 1.010 705.692 (94) * (325) 253.605 8.823 85.095.230.162 (2.613 (49.000 7.703.869 (94) * (325) 37.630.552 80.847.401 Revaluation 3.NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 11.372 - 3.340) 824. *adjustments accumulated at December January 1.161) * 2.793 - 143.985.078. 2008 per annum -----------------------------------------------------------(Rupees in '000)--------------------------------------------------------Cost/ Accumulated Reclassifi.726 1.835.556 2.605.564 (418.337) * (15.651.046) * 14.831 1.369) 12.113 2.093 - 314.428 894.951 108.291 (343.340) 509.041.372 7.137.751.727) * 10.449) 4.293.275 2.233 (2.369) * 1.847.179 20% 1.449) 416.551.559) * 17.646 184.948 (177.843 25% Annual Report 2009 12.873 16.486.159 97.838 101. December 31.206.931 338.866 11.460 3.419 164. *adjustments 2008 Accumulated depreciation Accumulated Net Book Rate of reversed on depreciation at Value at depreciation revaluation as December 31.063 449.873 (113.135 20% .442 Revaluation 3.835. 2009 per annum -----------------------------------------------------------(Rupees in '000)--------------------------------------------------------Depreciation for the year/ (on disposal)/ *adjustments 272.460 (113.063 2.672.274 416.628) * 41.5% Lease hold improvements Furniture and fixtures Office equipment 1.401 189.Revaluation as depreciation at cation at December January 1.628 2.400) * (9.627.079.491 (4.5%-5. 2008 2008 Depreciation for the year/ (on disposal)/ *adjustments 824.496.372) 4.388) * 14.533.814 272.811.5% Lease hold improvements Furniture and fixtures Office equipment 1.354 2.362 301.164 10% .164 25% 14.815 (4.515. 2009 2009 depreciation) 31.919 753.089) 3.726 221.25% Vehicles 314.757) * 4.143 - 1.174.994 111.681 (189.010 10% .2 Property and equipment 2009 Revaluation Cost / Cost/ Accumulated Additions / surplus / revaluation (disposals) / (reversal of Revaluation as depreciation at at January 1.153 (5.310 (188.274 2.726 7.085 - 1.905 - 3.372 (427) * (15.640) 416.823 99.006 414.372 7.364 61.528 (10.627.784 (108.650 (72.187 75.202) 48.578.883 705.814 73.533.189) * 1. % 2008 at December 2008 31.997 845.352 316.028) * 16.371.987) 774.793 149.679 (34.405 1. December 31.188.819 712.168 1.035 2008 Cost / Additions / revaluation (disposals) / at January 1.153 (5.807 (23.095.957) * 5.489.937 (2.399 (86.900 - 2. 2009 Accumulated depreciation Accumulated Net Book Rate of reversed on depreciation at Value at depreciation revaluation as December 31.443.640) (302. % 2009 at December 2009 31.057 1.605.637 (14) * 6.442 47.205) * (30.136 108.627 - 14.605 8.987) (188.089) 4.066 20% 756.636 272.643 (14) * 6.598) * 23.236) * 6.230.044.551.556 75.093.089) - 3.672.876) * 9.866 (302.636 243.459) * 3.408 52 .407 653.026.851 164.154.687 100.035 4.814 (61.716 740.182 139.467.006 37.118.5%-5.533 3.089) 4.972 20% .592 338.947 (209.035 1.5%-5.25% Vehicles 563.25% 3.489.078.372 (427) * (15.825 (272.

the carrying value of office premises would have been Rs.369 - 198.605 209. 1.929 49.000 or above Details of disposal of fixed assets having cost of more than Rs.511 - 2008 ACCUMULATED AMORTIZATION Rate of Opening Amortization Closing Book value amortization Balance * (Deletion) / Balance at closing Adjustment % 217.031 56.349 million (2008: Rs.031 198.480 56.031 416.511 - 263.3 11.988 * (61) 395.031 56. 736. Valuation and Engineering Consultant which has resulted in a surplus on revaluation of Rs.000 or net book value of Rs.951 million. 2009 on the basis of market value by Harvester Services (Private) Limited.000 or above are given below: Annual Report 2009 Description Accumulated Net book Sale depreciation value proceeds ------------------------(Rupees in '000)------------------------Cost 427 14 413 275 Mode of Disposal Particulars of purchaser Office premises Broken Glass Insurance claim M/s Alfalah Insurance Ltd.873 million.031 56. Intangible assets 2009 COST ACCUMULATED AMORTIZATION Additions/ Rate of Opening (Deletions)/ Closing Opening Amortization Closing Book value amortization Balance * Adjustment Balance Balance * (Deletion) / Balance at closing Adjustment % ---------------------------------------------(Rupees in '000)------------------------------------------Computer software 360.364 - 188.751 * (169) 142.333 188.5 Goodwill 56.411 34. Details of disposal of fixed assets having cost of more than Rs.005 - COST Additions/ Opening (Deletions)/ Closing Balance * Adjustment Balance ---------------------------------------------(Rupees in '000)------------------------------------------Computer software 209.6 11.NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 11.031 206. 250.720 * (169) 56.988 * (61) 34.7 Included in cost of intangible assets are fully amortized items still in use having cost of Rs.031 105. (Related party) 53 .338 142.442 92.999 * (146) 64.605 150. 250.411 56. During the year office premises have been revalued on December 30. 4.480 64.442 - 451.28 million).999 * (146) 207.031 - 416.362 million).000 or net book value of Rs.000.931 217.000.931 - 20% Goodwill 11. 104.186 million (2008: Rs.865 * (59) 56. 115. Had there been no revaluation. 1. 1.896 * (59) 360.672.4 Included in cost of property and equipment are fully depreciated items still in use having cost of Rs. 416.005 20% 11.929 92.

437 * Disposal as per Bank's policy represents vehicles sold to employees as per the terms of their employment.357 319 517 1.152 378 32. Sohail Mairaj Qureshi 333 Bid M/s Al Razi Health Care (Pvt.122 10.950 1.007 6.205 3.283 814 814 1.233 37.596 49. 1.000 or cost of less than Rs.146 428 558 568 306 338 113 636 448 182 571 459 448 583 553 390 9.615 13.225 34.050 192 31.183 6. Sohail Rizvi 540 Insurance Claim M/s Alfalah Insurance Ltd.992 Various Various Insurance Claim Insurance Claim Insurance Claim Negotiation Bid Bid Bid Negotiation Negotiation M/s Alfalah Insurance Ltd. 54 .000 7. Majedur Rahman.876 474 38.576 307 4.283 7. (Related party) 735 Bid Mr.000 or cost of less than Rs.223 1.000 Furniture and fixtures Items having book value of less than Rs.868 505 292 333 627 563 795 265 453 752 263 463 453 353 346 544 7.299 2.388 521 449 1.673 10.000 Vehicles Honda Accord Honda City Honda City Honda City Honda City Honda City Honda City Honda City Honda City Honda City Honda City Honda City Honda City Honda City Honda City Honda City Balance carried forward Insurance Claim Write Off Negotiation Write Off Insurance Claim Write Off Write Off Write Off M/s Alfalah Insurance Ltd. Kashif Iqbal 563 As per Bank Policy Mr.) Limited 727 Bid M/s SGM Sugar Mills 825 Bid M/s Al Razi Health Care (Pvt. 250. (Related party) Rana Abdul Qayyum Askari Bank Limited Bashir Ahmed & Co M/s Mearud Engineering M/s H.NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS Description Accumulated Net book Sale depreciation value proceeds ------------------------(Rupees in '000)------------------------Cost 414 3. Muhammad Saeed 882 Bid M/s Taavun (Pvt.369 2.000 Office equipment ATM machine ATM machine ATM machine Diesel generator Diesel generator Diesel generator Diesel generator HVAC Transformer Items having book value of less than Rs.369 73 56 322 467 597 838 549 7.000. 1.266 132 2.988 1.093 Various Various Annual Report 2009 307 As per Bank Policy * Mr. (Related party) M/s Alfalah Insurance Ltd.181 567 240 235 216 282 1. (Related party) Rana Abdul Qayyum M/s Alfalah Insurance Ltd.914 741 758 860 733 298 362 451 1.727 4.) Limited 628 As per Bank Policy Mr.588 627 - Mode of Disposal Particulars of purchaser Leasehold Improvements Renovation Work Renovation Work Renovation Work Renovation Work Renovation Work Renovation Work Renovation Work Renovation Work Items having book value of less than Rs.357 4. (Related party) 1.005 733 365 362 585 600 1.146 933 850 901 933 901 908 901 901 934 834 922 901 936 899 934 16.734 12.131 1.000.028 1.955 521 689 2.) Limited (Related party) 801 As Per Bank Policy Mr Atta-Ur-Rehman 10.337 3. 250. (Related party) M/s Alfalah Insurance Ltd. Muhammad Tariq 700 Bid Mr.785 Various Various 7.914 4. Ex Country Head Bangladesh 792 Bid M/s SGM Sugar Mills 293 As per Bank Policy Mr.Tariq Latif 735 Bid Mr.200 895 1. Hasan Riaz 830 Bid M/s Al Razi Health Care (Pvt.000.576 2.992 4. 1.182 1.050 30.200 1.552 23.) Limited 746 As Per Bank Policy Mr.000 or cost of less than Rs.A Constructions Rana Abdul Qayyum 17. 250.

240.063 974 244 245 263 115 231 230 1. 250.1 12.107 (2.367 12.071 17.649.166 223.380 7. Qasim Masud Mr.053) (9. Muhammad Saeed Mr.294 1.591 338.007 661 272 124 7 68 317 317 292 471 324 325 50 10.052 1.512.301.229 1.598 49. 55 Annual Report 2009 .755 450. Muhammad Tariq Mr.181.189 1. Hassan Mobeel Alam Mr.869. advance rent and other prepayments Assets acquired in satisfaction of claims Advances against future Murabaha Advances against future Ijarah Advances against Diminishing Musharakah Branch adjustment account Tax recoverable Dividend receivable Prepaid exchange risk fee Stationery and stamps on hand Others Less: Mark up held in suspense account Less: Provision held against other assets 10.564 9.757 272.386 19.279 1.December 31.818 2.115 11.642.002 1.165 878 1. Muhammad Ajmal Mr. 2009 .382 5.333 6 11. Ausaf Muzammil Mr.December 31.564 7.000 or cost of less than Rs.674) 14.000.656 112.052 1.920 72.437 795 366 584 600 843 816 930 850 619 507 292 653 620 617 679 651 636 Mode of Disposal Particulars of purchaser Balance brought forward Honda City Honda City Honda Civic Honda Civic Honda Civic Honda Civic Honda Civic Honda Civic Suzuki Cultus Suzuki Cultus Suzuki Cultus Suzuki Cultus Suzuki Cultus Suzuki Cultus Toyota Corolla Toyota Corolla Toyota Corolla Items having book value of less than Rs. M.066 92.070 1.119. 220 million (2008: Nil).222 2.NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS Description Accumulated Net book Sale depreciation value proceeds ------------------------(Rupees in '000)------------------------Cost 16. Muhammad Tariq Syed Shah Ali Murtaza Mr. Fawad Mazhery Mr. Salman Aftab Rao Mr.628 4.290 81.195 1.920 3.311 233.142 161.047 302.727 248 629 1.146 196. The management is evaluating the possibility to realise the benefit of this property through continuing use rather than through a sale transaction.000 Total .S.426 156.509. deposits.845 112.459 177. Note 2009 2008 (Rupees in ‘000) 12 OTHER ASSETS Income / mark-up accrued in local currency Income / mark-up accrued in foreign currency Advances.189 1. 1.309.1 This includes a property acquired from a customer in satisfaction of claims amounting to Rs. Irfan Ahmad Mr.734 909 901 1.402 418.674) 9.645 145.967 Various Various * Disposal as per Bank's policy represents vehicles sold to employees as per the terms of their employment.195 1.533 369. 2008 Bid As Per Bank Policy * Bid Bid Bid Bid Bid Bid Bid As per Bank Policy As per Bank Policy Bid Bid As per Bank Policy Bid Bid Bid Mr.701 23.161 108.165 1.063 14.095 (1.169 2.Babar Mr.633 467.983 86. Muhammad Tariq Syed Shah Ali Murtaza Mr.161 61.970 40.042 561 562 555 586 555 555 1. Riaz-Ul-Haq Mr.881. Atal Shahzada 53. Zulifqar Ali Mr.298 68.054) (9.

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS Note 2009 2008 (Rupees in ‘000) 13 BILLS PAYABLE In Pakistan Outside Pakistan 3. This facility is secured against a demand promissory note executed in favour of the State Bank of Pakistan.016 157.867 200.890 4.5% per annum) payable on a quarterly basis.690.921 13.50% to 12.966.461.766.610 18.688. The markup rate on this facility ranges between 7.280 40.709.849 25.5% per annum) payable on a quarterly basis.748 25.601 1.1 Particulars of borrowings with respect to currencies In local currency In foreign currencies 18. DEPOSITS AND OTHER ACCOUNTS Customers Fixed deposits Savings deposits Current accounts .5 8.704.222 14.687. This represents repurchase agreement borrowings from other banks at rates ranging from 11.905.340 88.5% to 8% per annum (2008: 6.752 116.715.849.921 7.167 13.031 14 BORROWINGS In Pakistan Outside Pakistan 18.055 472.40% per annum (2008: 7.570.151 986.753.061 4.4 14.766.690.3 14.321 20.611 470.653.595.021 11.2 Details of borrowings secured / unsecured Secured Borrowings from State Bank of Pakistan under: Export refinance scheme Long Term Finance for Export Oriented Projects Scheme (LTF-EOP) Long Term Finance Facility Repurchase agreement borrowings Unsecured Call borrowings Overdrawn nostro accounts 14.246 7.089 11.316.320 20.4 14.618 86.416. The markup rate on this facility ranges from 4% to 5% per annum (2008: 4% to 6.975 3.887.036 25.732.858 Annual Report 2009 Financial institutions Remunerative deposits Non-remunerative deposits 56 .137.228.167 13.887 189.690.887.223 12.662 559.305 1.222 14.320 20.513 9.653.90% per annum) maturing by July 2010 (2008: January 2009).314.716 324.004.729.488.866 75.689 78.837 300.576.199 298.257 3.789.004.759.653.436 83.016 514.167 13.766.144 3.601 1.non-remunerative Others 121.055 686.5 15 This facility is secured against a demand promissory note executed in favour of the State Bank of Pakistan.809.600 1.910.921 13.3 14.50% to 14.222 14.055 686.452.468 289.056 223.652.

323.1 Particulars of deposits In local currency In foreign currencies 263.Quoted. Unsecured Mark up Base Rate + 1.NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 2009 2008 (Rupees in ‘000) 15.759. the TFC holder will rank below the senior unsecured creditors and depositors and other creditors of the Bank.248.50 percent (Base Rate is defined as the simple average of the ask rate of the six months KIBOR prevailing on the first day of the start of each half yearly period and mark up due at the end of that period) The TFCs are subordinated as to the payment of principal & profit to all other indebtness of the bank.732.581 1. Unsecured Mark up Base Rate + 1.449. December 2012 1.858 16 SUB-ORDINATED LOANS Term Finance Certificates II .309.Quoted.752 249. In case of occurrence of default.322.089 1.869.600 1. December 2004 AAEight years 3 equal semi-annual installments commencing 84th month after the issue date.586 50.900 61.247. .50 percent (Base Rate is defined as the simple average (average of the KIBOR Rate quoted by banks for that day) of the ask rate of the six months Karachi Interbank Offer rate (KIBOR) prevailing on the first day of the start of each half yearly period for mark up due at the end of that period) The TFCs are subordinated as to the payment of principal & profit.852 324.863. November 2005 AAEight years Subordination Issue Date Rating Tenor Redemption Maturity November 2013 57 Annual Report 2009 3 equal semi-annual installments commencing 84th month after the issue date.272 300.080 Subordination Issue Date Rating Tenor Redemption Maturity Term Finance Certificates III .

181 17 DEFERRED TAX LIABILITIES Deferred credits arising due to Difference between accounting book value of leased assets and lease liabilities Accelerated tax depreciation Surplus on revaluation of operating fixed assets Deferred debits arising due to Provision for doubtful debts Provision against other assets Provision against off-balance sheet obligations Impairment in the value of Investment Unrealized loss on revaluation of investments classified as held for trading / transferred from held for trading to available for sale Deficit on revaluation of securities 2.732.668. the Federal Board of Revenue (FBR) through their letter F. The tax benefit for this amount will be allowed upon disposal of these investments.465 17. This issue had been taken up with the tax authorities through the Pakistan Banks' Association for formulation of transitory provisions to deal with the items which were previously treated differently under the applicable provisions.169 283.168) (224.627 (1.686 585.50 percent (Base Rate is defined as the simple average of the ask rate of the six months KIBOR prevailing on the first day of the start of each half yearly period and mark up due at the end of that period) .781 723.386) (4.571.224.313) 179.550) (71. The Schedule did not contain transitory provisions to deal with the disallowances made upto December 31.603) (2.396.NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS Note 2009 2008 (Rupees in ‘000) Term Finance Certificates IV .386) (13. Unsecured Mark up Either of the following options with the holder: .000 - 7.1 17.460.167) (3. December 2009 AAEight years 3 equal semi-annual installments commencing 84th month after the issue date. 2001 for the taxation of banking companies. Through the Finance Act.570.799.969) (517.164 (1.201) (240. 2007 7th Schedule (the 'Schedule').2 Annual Report 2009 This includes deferred tax in respect of impairment recognised in value of investment which has been written off in the books of the Bank.Private.851 778.Fixed coupon of 15 percent per annum payable semi-annually in arrears Subordination Issue Date Rating Tenor Redemption Maturity The TFCs are subordinated as to the payment of principal & profit to all other indebtness of the bank. was inserted in the Income Tax Ordinance.772 1. December 2017 5.1 17. 2009 has clarified that the: 58 .404. During the current year.066) (3.No 4(I)ITP/2008-49 dated December 23.788) (10. 2007 and certain other matters including treatment relating to leases disbursed by the bank.703) (63.753 2.488) (2.162) 208.Floating coupon of Base Rate + 2.611 2. The schedule seeks to simplify the taxation of banking companies and is applicable from the tax year 2009.304.188 1.000.

Provision against off-balance sheet obligations Opening balance Exchange adjustment Charge for the year Closing balance 38.000.007 55.321.561 431.419) 37. in accordance with the provisions of Section 29 and 29A of the Income Tax Ordinance 2001.623 63.409 14.000 1.076 10.000 Ordinary shares of Rs.000 15.291.660 171.133 151.028 4.246 19 180. Note 2009 2008 (Rupees in ‘000) 18 OTHER LIABILITIES Mark-up / return / interest payable in local currency Mark-up / return / interest payable in foreign currency Unearned commission and income on bills discounted Accrued expenses Current taxation Payable against redemption of credit card reward points Branch adjustment account Security deposits against leases Exchange difference payable to SBP Payable to brokers Unrealized loss on forward exchange contracts Provision against off-balance sheet obligations Workers Welfare Fund Others 18.000.006.693 590.280 18.671 379.142 900 (1.350 37.260 280.623 6.000.569 360.601 28.1 18.439 44.103. shall be allowed in the tax year in which such advances are actually written off against such provisions. deferred tax on timing differences relating to prior years has been retained by the bank.959 2. amounts provided for in the tax year 2008 and prior to the said tax year for or against irrevocable or doubtful advances.983.081 3.2 This represents amounts payable to brokers against purchase of shares. which were written back in the tax year 2009 and thereafter in any tax year and credited to the profit and loss account.671 11.000 59 Annual Report 2009 .000.786 4.621 280.1 18.300. which were neither claimed nor allowed as a tax deductible in any tax year.506 45. the provision of the Seventh Schedule shall not apply to any assets given or acquired on finance lease by a banking company upto tax year 2008 and recognition of income and deduction in respect of such asset shall be dealt in accordance with the provisions of the Income Tax Ordinance 2001 as if this schedule has not come into force. - - In view of the aforementioned clarification.325 133.142 106. Provided that un-absorbed depreciation in respect of such assets shall be allowed to be set-off against the said lease rental income only.500.2 28.142 19 19.each 23.727 199.845 38. shall be excluded in computing the total income of that tax year under Rule 1 of the Schedule.NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS - amount provided for in the tax year 2008 and prior to the said tax year for or against irrecoverable or doubtful advances which were neither claimed nor allowed as a tax deductible in any tax year.1 4.1 SHARE CAPITAL Authorized Capital 2009 2008 (Number of shares) 2.582 38.803 1.057. 10/.601 3.264.

757) 2.349.156 (13.500 5.298) 416.500.436.160 2.192.611 2.250 225.250.2 Issued.1 20.809.753 151.250.000 shares.000 4.063 7.750.562) 585.000 Ordinary shares Fully paid in cash .063 13.Fixed assets . representing rights relating to applications rejected and missing from the offer for sale of shares.000 5.000 149.156.973 20.2 20.000 799.000 2.during the year Issued as bonus shares .3 2.000.000 399.250.994 3.250 724.000 425. These right shares will be offered to those applicants who were allotted/ offered shares in accordance with the directives / guidance of the Securities and Exchange Commission of Pakistan.NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS Note 2009 2008 (Rupees in ‘000) 19.533.726 712.809.177) 2.997.858 723.238) (37.000 149.745.491.000.906.000 574.994 230.550 (24.343 (677.Investment in associate 20.726 (24.250 1.745.500.500 6.824) 3.298) 137.696) (13.000 624.324) (13.247.586) (13.at the beginning of the year . These shares are subject to all corporate actions applicable to all other ordinary shares.at the beginning of the year .873 378.568.000.000 225.154.500.000 This includes 8.216 Related deferred tax liability on surplus as at January 1 Deferred tax liability booked / (reversed) Related deferred tax liability in respect of incremental depreciation charged during the year Annual Report 2009 60 .244.238) (126.406.154.1 Surplus on revaluation of fixed assets Surplus on revaluation of fixed assets at January 1 Transferred to retained earnings in respect of incremental depreciation charged during the year Related deferred tax liability in respect of incremental depreciation charged during the year Surplus on revaluation of fixed assets recognized during the year 3.000 574.250.605 585.568.973 (132.563 2.000 7.10 each 2009 2008 (Number of shares) 225. subscribed and paid up capital Ordinary Shares of Rs.NET OF TAX Surplus / (deficit) arising on revaluation of: .500.363.315 (113.000 1.Available-for-sale securities .753 2.750.495. 20 SURPLUS ON REVALUATION OF ASSETS .499.879 3.995.000.during the year 2.000 3.000 1.

559.493) 413.3 Trade-related contingent liabilities Letters of credit Acceptances 21.3 Deficit on investment in associate Warid Telecom (Private) Limited Related deferred tax asset 20.081.938) 63. the resulting impairment loss will be recognised in the profit and loss account.507 61 . 21 21.200 3.175 1.179.634 (677.1 (1.386.031) 230.416 996.686.282) (26.1 CONTINGENCIES AND COMMITMENTS Direct credit substitutes i) Government ii) Banking companies & other financial institutions iii) Others 21.940.974 35.372 35.5 Commitments in respect of forward lendings Forward repurchase agreement lendings Commitments to extend credit 6.879 53.428) (10.2 Transaction-related contingent liabilities i) Government ii) Banking companies & other financial institutions iii) Others 21.NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS Note 2009 2008 (Rupees in ‘000) 20.1 The State Bank of Pakistan vide its letter number BSD/BRP-2/185/2010 dated March 1.771 32.109 2.quoted Sukuk bonds Related deferred tax asset / (liability) (22.659 3.897 31.843 44.338.488 (132.418.470 276.2 Surplus / (deficit) on revaluation of available-for-sale securities Deficit on: Government securities Term finance certificates .3. 2010 has allowed recognition of deficit arising on account of difference between the cost and break-up value per share of Warid Telecom (Private) Limited in the "Surplus / (deficit) on revaluation of assets" upto June 30.747.129 2.113.3.343 20.910 556. 2010.947.177) (299.quoted Sukuk bonds Surplus on: Quoted shares / units / certificates Term finance certificates .811) 364.252.468.454 342 (204. In case the recoverable amount of this investment is lower than its carrying value at June 30.049.4 Other contingencies Claims against the Bank not acknowledged as debts 21.490 3.836 8.385.041.360 3.298 5.245) 71. 2010.757) - 20.118.920 7.452.371 154.529 959.066 41.117.330 4.577 354.374 (124.058.371 Annual Report 2009 2.

792 730.033.Forward Exchange Contracts . In addition to this.901 3.161.293 10. 62 .539.346 562.518.925 367.840 307.221 10.376 4.370.071 3.716 29.459.000 - 22 DERIVATIVE INSTRUMENTS The Bank at present does not offer structured derivative products such as Interest Rate Swaps.406.900 million (2008: Rs.552. intra-day and overnight limits. the Bank's Treasury buys and sells derivative instruments such as: .6 Commitments in respect of forward exchange contracts Purchase Sale 19.674 35.558.NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS Note 2009 2008 (Rupees in ‘000) 21.561.098 3.096 million) which pertains to the Bank's Islamic Banking Division.429 - 21.373. 3.104 308.514 17. 23 MARK-UP / RETURN / INTEREST EARNED a) On loans and advances to: i) customers ii) financial institutions b) On investments in: i) held for trading securities ii) available for sale securities iii) held to maturity securities iv) associates and subsidiary c) On deposits with financial institutions d) On securities purchased under resale agreements e) Profit earned on ijarah assets net of depreciation 23.925 2. Forward Rate Agreements or FX Options.822.288 21.1 These include mark-up earned of Rs.598 30.966.810 711 1.312 22. However.528.770. Exchange rates and forward margins are determined in the "interbank" market and fluctuate according to supply and demand. the exposure is also managed by matching the maturities and fixing the counter parties. In order to mitigate this risk of adverse exchange rate movements the Bank hedges its exposure by taking forward position in inter bank market.Foreign Exchange Swaps Forward Exchange Contracts: Forward exchange contract is a product offered to customer backed by international trading contract.8 Commitments for the acquisition of operating fixed assets Commitments in respect of repo transactions Repurchase Resale 9. These customers use this product to hedge themselves from unfavorable movements in foreign currencies.943.284 513.710.491 371.850 2.184. dealers.9 Other Commitments Donation 22.023 5.2 25.7 21. 2. Foreign Exchange Swaps: A Foreign exchange Swap (FX Swap) is used by the Bank if it has a need to exchange one currency for another currency on one day and then re-exchange those currencies at a later date.638 Annual Report 2009 23.831 11.

857 171.352 156.443 1.Unlisted Sukuk Bonds 8.2 11.669 60.636 24.751 452.Pakistan Investment Bonds Shares .237 574.563 51.015 142.467.485 9. etc. etc. Legal and professional charges Communications Repairs and maintenance Stationery and printing Advertisement and publicity Donations Auditors' remuneration Depreciation Amortization of intangible assets Entertainment. taxes. travelling and subscription Others 14.825 105.631 1.020 1.527 77.999 319. Charge for defined benefit plan Contribution to defined contribution plan Rent.979.143 585.068 466.Market Treasury Bills .479 189.654.508 464.784 64.722 408.069 401. Provision no longer required written back 43.924 41 252.000 688.620 1.139 10.363 424.594.1 27.5 .661 644.121 20.487 2. vehicle running expenses.967 163.350 12.373 12.671 856.100 367.310. telex service charges etc.923.309.926 146.092 639.254.385.212 163.161 9.169.966 532.674 - 24 MARK-UP / RETURN / INTEREST EXPENSED Deposits Securities sold under repurchase agreements Other short term borrowings Term Finance Certificates Brokerage and Commission Others 21. electricity.205.726) 29.7 35 63 Annual Report 2009 27.745 448.NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS Note 2009 2008 (Rupees in ‘000) 23.832 1.261 26 OTHER INCOME Gain on sale of property and equipment Postage.664.112 35.507 14.790 34.790 1.883 112.214.2 Profit earned on ijarah assets Lease rentals earned Depreciation for the year 94.805.813 3.354 4.180 18.997 1. allowances.613 169.400 (64.570 13. insurance.532 1.713 745.350.Listed .623 213.247.494.521 1.560 4.355 25 GAIN ON SALE OF SECURITIES Federal Government Securities .876 163.628 27 ADMINISTRATIVE EXPENSES Non executive director fee & allowances Salaries.132 468.2 11.

442 1.019) (221. Matters of disagreement exist between the Bank and tax authorities for various assessment years and are pending with the Commissioner of Income Tax (Appeals).350 27.000 12.020 3.066.691 (179.301 (767. The Income Tax Department.419 29 The income tax assessments of the Bank have been finalised upto and including tax year 2009. As a result of this decision.738 2.454 16.NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 2009 2008 (Rupees in ‘000) 27. taxability of profit on government securities.797) 136.783 8.613) 493.730. 2008 by virtue of which the Bank is now liable to pay WWF @ 2% of profit before tax as per accounts or declared income as per income tax return.375 13.051 (1. adequate provision has been made in the financial statements in respect of these matters.674) 119.570 1.137 106. TAXATION For the year Current Deferred For prior years Current Deferred 1.184 (85. 64 Annual Report 2009 .1 Donations Kashmir Education Foundation Marie Adelaide Leprosy Center.621 122.365) 756. 850 720 11.281 1. bad debts written off and disallowance relating to profit and loss expenses. whichever is higher.758 28.500 850 2. the management is confident that the decision will ultimately be made in favour of the Bank and that the Bank will not be exposed to any loss in this respect. Income Tax Appellate Tribunal (ITAT) and High Court of Sindh. 1971 has been amended vide Finance Act. However.151.260 79.532 28 OTHER CHARGES Penalties imposed by State Bank of Pakistan Workers Welfare Fund 16.645 4.1 The Worker's Welfare Ordinance.194 63.620 800 2. Other issues mainly relate to addition of mark-up in suspense to income. being aggrieved with the order of CIT (Appeals).346) (936. During the year.2 Auditors' remuneration Audit fee Half yearly review Special certifications and sundry advisory services Out-of-pocket expenses Fee for audit of foreign branches 3. the CIT (Appeals) has decided the issue regarding allocation of expenses to exempt capital gain and dividend income for the tax years 2004 to 2008 in favour of the Bank. Larkana Publician Alumni Trust .783 9.Cantt Public School Institute of Business Administration None of the directors or their spouses had any interest in the donees. However.585 1. 230 million which represents provision made in prior years in respect of this matter. the Bank has written back an amount of Rs.794 12.620 750 3. has filed an appeal before the ITAT against the order which is currently pending for adjudication.

462 2.583.71 (Rupees in ‘000) 1.301.878 32 CREDIT RATING PACRA has assigned a long term credit rating of AA [Double A] and a short-term credit rating of A1+ (A one plus) to the Bank as at June 2009 (2008: AA [Double A]) for long term and A1+ [A one plus] for short term).281 (108.tax charge pertaining to overseas branches .089 9.336 1.NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 2009 2008 (Rupees in ‘000) 29.579 883 7.316 355.301 (Number of shares in thousand) Weighted average number of ordinary shares 1.489.419 30 BASIC / DILUTED EARNINGS PER SHARE Profit after taxation for the year 897.41 35.400 2.286 493.639 3.267.352) 4. 2009 2008 (Number of employees) 33 STAFF STRENGTH Permanent Temporary / On contractual basis Bank's own staff strength at the end of the year Outsourced Total staff strength 6.674) (1.542 (179.others Tax expense for the year 1.500 57.permanent differences .016.648 15.152 (62.income chargeable to tax at reduced rates .581.551 6.711 1.664 (85.669 65 Annual Report 2009 .335 21.584 2.794.720 628.722.047 32.710.718) 5.396 61.035 1.346) 119.687.tax for prior years .552 Basic / Diluted earnings per share 31 CASH AND CASH EQUIVALENTS Cash and balances with treasury banks Balances with other banks Call lendings 0.043 3.085 9.315.012 22.056.248 7.613) 38.533 (Rupees) 923.1 Relationship between tax expense and accounting profit Profit before tax Tax at the applicable rate of 35% (2008: 35%) Effect of: .

853 18.403 189.811 35.635 (34.536 696.369 468.415) 546. was used for the valuation of the defined benefit plan: 2009 2008 Discount factor used Expected rate of return on plan assets Expected rate of salary increase Normal retirement age 34.795 189.266 26.563) 737.2 Reconciliation of payable to defined benefit plan Present value of defined benefit obligations Fair value of plan assets Net actuarial losses not recognized Past service cost not yet recognized 34. Projected unit credit method.203 737.6 Annual Report 2009 14.5 Plan assets consist of the following: Defence Savings Certificates Ordinary shares of Bank Alfalah Limited Term Finance Certificates Term Deposit Receipts Pakistan Investment Bonds Alfalah GHP Value Fund Alfalah GHP Alpha Fund Alfalah GHP Principal Protected Fund II Cash and bank 34.272) (267.3 Movement in defined benefit obligation Obligations at the beginning of the year Current service cost Interest cost Benefits paid Actuarial (gain) / loss on obligation Obligations at the end of the year 34.1 DEFINED BENEFIT PLAN Principal actuarial assumptions The latest actuarial valuation of the Bank's gratuity scheme was carried out as at December 31.844 40.144 18.272 142. 2009.534) 68.926) - 66 .527) (132.00% 60 Years (Rupees in ‘000) 802.4 Movement in fair value of plan assets Fair value at the beginning of the year Expected return on plan assets Contributions Benefits paid Actuarial gain / (loss) on plan assets Fair value at the end of the year 34.352) - 50.00% 14.403 352.693 24.719 54.00% 60 Years 15.403) (106.212) 468.NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 34 34.272 Movement in payable to defined benefit plan Opening balance Charge for the year Bank's contribution to fund made during the year Closing balance 27.385 207.272 70.682) (1.241 189.352 (189.527) (3.281 142.926 (142.926 (34.000 157.945 24.352 (27.935) 696.574 278.605 (27.249 110.00% 15.966 (696.369 (468.534) (28.00% 15.000 72.00% 14.747 468.893 27.369 115.346 102.730) 802.966 737. using the following significant assumptions.

548) 174 The Bank operates an approved provident fund scheme for all its permanent employees to which both the Bank and employees contributes @ 8.191 183.212) 546.356 102. During the year.097) (68.915 293.308 250.287 8.573 1 7.735. 67 .665 (77.317 68.272 (269. These securities are being carried at amortised cost in order to comply with the requirements of BSD Circular No.1 FAIR VALUE OF FINANCIAL INSTRUMENTS Annual Report 2009 Fair value is the amount for which an asset could be exchanged.774 68.811 (193.387 704 The Chief Executive and certain Executives have been provided with the free use of cars and household equipments as per Bank's policy.403 (106. 146.8 34. 2004.352 66.088 772 20.354 14.286 3. 37 37.004 703 266.387 105. the Bank contributed Rs.620 million) in respect of this fund.948 1.127 300.324 1.354 3 14.803 1 14.757 (115.673) 366.363 1.9 Actual return on plan assets Historical information 2009 2008 2007 2006 2005 --------------------------------(Rupees in '000)-------------------------------- Defined benefit obligation Fair value of plan assets Surplus / (deficit) Experience adjustments on plan liabilities Experience adjustments on plan assets 35 DEFINED CONTRIBUTION PLAN 802.563) 132.151) (7) 261.249 110. or a liability settled.719 54.537.437 940.069 34. 36 COMPENSATION OF DIRECTORS AND EXECUTIVES Chief Executive Directors Executives 2009 2008 2009 2008 2009 2008 ----------------------------------------(Rupees in '000)---------------------------------------- Fee Bonus Managerial Remuneration Post employment benefits Rent and house maintenance Utilities Number of persons 1.088 772 14.203) (28.369 468. The fair value of traded investments is based on quoted market prices. between knowledgeable willing parties in an arm's length transaction.605 (70.346 352.517 8.560 14.306 102.730 (3.551) (45. except for tradable securities classified by the Bank as 'held-to-maturity'.NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 2009 2008 (Rupees in ‘000) 34.526) (29.7 Charge for defined benefit plan Current service cost Interest cost Expected return on plan assets Actuarial losses Past service cost 115.14 dated September 24. 156.415 142.926 7.241) 32.394) (2.535) (87.140 1.560 3 128.438 1.286 3.281) 19.767 997.140 1.33% of basic salary in equal monthly contributions.832 million (2008: Rs.935) 737.635 (35.415 189.966 696.

664 8.256.937 3.585.498 39.193 11.726 344.737 8.743.990.933 331.027.252 366.452.313.746 6.27% 9.019.087 348. In the opinion of the management.946.021) 7.108.456.985 16.899 287.22% 10.055 3.879 7.091.790 18.882 (392. other liabilities and fixed term deposits cannot be calculated with sufficient reliability due to absence of current and active market for such assets and liabilities and reliable data regarding market rates for similar instruments.49% 8.42% 7.474.635 18.360. Fair value of fixed term loans.2 Off-balance sheet financial instruments Forward purchase of foreign exchange Forward sale of foreign exchange 19.422.528. other assets.565 5.610.016.584 319.76% 39 Annual Report 2009 RELATED PARTY TRANSACTIONS Parties are considered to be related if one party has the ability to control the other party or exercise significant influence over the other party in making financial or operational decisions and include major shareholders.74% 16.683 37.961 6.951 38 SEGMENT DETAILS WITH RESPECT TO BUSINESS ACTIVITIES The segment analysis with respect to business activity is as follows: Corporate / Commercial Retail Trading & Banking Total Banking Sales ------------------------------Rupees in '000------------------------------ 2009 Total income Total expenses Net income Segment assets Segment non-performing loans Segment provision required against loans and advances Segment liabilities Segment return on assets (ROA) (%) Segment cost of funds (%) 2008 Total income Total expenses Net income Segment assets Segment non-performing loans Segment provision required against loans and advances Segment liabilities Segment return on assets (ROA) (%) Segment cost of funds (%) 8.187 19.995.716 305. retirement benefit funds and directors and key management personnel and their close family members.582.316 26.669 40.228.273 2.127 9.949.518.298.070.594.64% 5. The repricing profile.025 18.28% 16. 68 .475 10.975.703. The provision for impairment of loans and advances has been calculated in accordance with the Bank's accounting policy as stated in note 5.978.988.4 to these financial statements.731 13.457 17.994.934.918. associated companies with or without common directors. the fair value of the remaining financial assets and liabilities are not significantly different from their carrying values since assets and liabilities are either short term in nature or in the case of customer loans and deposits are frequently repriced.730 28.887.294 33.165.017 25.387.142 389.716 2.043 10.459.284 10. subsidary company.249 471.908 19.118 1.521.337.623 1.799 10.835.351.720 35.NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS Fair value of unquoted equity investments is determined on the basis of break up value of these investments as per the latest available audited financial statements.140.541.540.562 6.185.263 17.221 17. 2009 2008 Book value Fair value Book value Fair value ------------------------------Rupees in '000------------------------------ 37.936.925 10.523.558.545.50% 10.789.912.63% 10.887.616 937.46% 12.047.842 901.764 2.727.05% 12.603 7.758 (198.135 26.829) 1.794. effective rates and maturity are stated in note 41 to these financial statements.917 35.293 19.609 6.

167.943.260.078) 6.909 .Subsidiary company .344.470.NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS Banking transactions with the related parties are executed substantially on the same terms.955 127.3 Investments Balance at the beginning of the year Investment during the year Withdrawals during the year Balance at end of the year 265.000 100.926 200.1 Deposits Balance at the beginning of the year Placements during the year Withdrawals during the year Balance at end of the year 63.605.735 (20.607 39.730 3.614. Contributions to and accruals in respect of staff retirements and other benefit plans are made in accordance with the actuarial valuations / terms of the contribution plan.000 22.197) 7.938.790 2.857 (35.864 1.363 18 7.798) 16.260.890.000 120.131) 18 2.012 218.809) 1.753 76.965) 601.614.163 137.337) 7.954) (25.000 35.260.169 39.305. Details of transactions with related parties and balances with them as at the year-end were as follows: 2009 Key Group Strategic Directors ManagementCompanies Associates Subsidiary Investments Total Personnel ---------------------------------------------------(Rupees in '000)------------------------------------------------- 39.000 2009 2008 (Rupees in ‘000) 39.000 35.076 99.311.761 5.499.914 39.380 (46.076 1.385.195.054 10.Subsidiary company .057 216.495 (6.519.591 70.474 (999.506.632.619 Annual Report 2009 69 .078) 253.(73.474 601.375 5.794.832 2.870) 90.280 (5.68.161 5.000.768.094 898.857 (35. as those prevailing at the time for comparable transactions with unrelated parties and do not involve more than a normal risk.535 42.888 85.853.725 23.Other related parties Long term loans .000 6.769.067 (884.305.931 361 (1.598 998.620 (492.883.753 5.883.5 Call lendings / Reverse Repo Balance at the beginning of the year Placements during the year Withdrawals during the year Balance at end of the year 100.355.444 (327.401.857) 100.058) 2.246 454.391 .046) (46.886) 1.768.000 76.000 22.2 Financing Balance at the beginning of the year Disbursements during the year Repayments during the year Balance at end of the year 8. Remuneration to executives is determined in accordance with the terms of their appointment.104 (97.135 85.344 271.809) 1.6 Financing Running finance .000 120.Other related parties 1.468.4 Call borrowings / Repo Balance at the beginning of the year Placements during the year Withdrawals during the year Balance at end of the year 200.170 7.857) 100.735 (20.260.890.332.926 39.564 1.136) 32.104 (97.424 1.603 753. including mark-up rates and collateral.

719 156.887 7.NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 2009 2008 (Rupees in ‘000) 39. the Chief Executive and certain Executives are provided with Bank maintained car.261 21.877 576.609 155.Subsidiary company .753 43.860 264.7 Contingencies and commitments Letter of credit and acceptance issued Guarantees issued 25.223 2.597 2.813 824 6.297 3.094 3.903 16.573 15.11 With associated companies Insurance premium paid to Alfalah Insurance Company Limited Mark-up income on advances Charge for security services to Security and Management Services (Private) Limited and Wakenhut Pakistan (Private) Limited Payment to Wateen Telecom Limited for purchase of equipment 39.Other related parties Fixed deposit accounts .094 436 129 36.200 39.12 With other Related Parties Capital Gain on redemption of units of USAF Capital gain on sale of shares of UBL Capital gain on sale of shares of UMMF Contribution to Employees provident fund Payment for books of Ikram Majeed Sehgal Annual Report 2009 1.361 532.675 126.312 580.Other related parties 1.557 1.861 239 146.725 3.530.800 6.300 366 2.937.545 174 1.832 2.114 3.785 In addition.012 28.044 39.477 3.751 32.620 - 39.058 32.10 With subsidiary companies Brokerage expense Provision against financing to subsidiary Mark-up income Rent income Finance lease income Lease rentals Mark-up receivable on running finance Mark up Receivable on Term Finance Balance held in deposit account Security deposit Bank charges recovered Provision made during the year in respect of investment in subsidiary company 39.115 39.363 118.363 344 142 39.542 1.370.443 182.035 207.Balance with UBL 702. 70 .755 5.13 The Key Management Personnel / Directors compensation are as follows: Salaries and Allowances 540.215 343.8 Customer accounts PLS accounts .596.703 864.213 16.Other related parties Current accounts .9 Bank Balances with other banks .

As the Bank carries on the business on a wide area network basis. includes subordinated debt subject to a maximum of 50% of total Tier I capital and fulfilment of specified criteria laid down by the State Bank of Pakistan. 50% of other deductions e. so that it could continue to provide adequate returns to shareholders by pricing products and services commensurately with the level of risk. Maintain strong ratings and to protect the Bank against unexpected events. The impact of the level of capital on shareholders’ return is also recognised and the Bank recognises the need to maintain a balance between the higher returns that might be possible with greater gearing and the advantages and security afforded by a sound capital position.NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 40 40. There has been no material change in the Bank’s management of capital during the period. which consists of short term subordinated debt solely for the purpose of meeting a proportion of the capital requirements for market risks. share premium. shares. External ratings for assets. and Availability of adequate capital at a reasonable cost so as to enable the Bank to operate adequately and provide reasonable value addition for the shareholders and other stakeholders Bank’s regulatory capital analysed into three tiers Tier I capital.25 % of total risk weighted assets). lien on deposits. Collaterals used include: Government of Pakistan guarantees. Goals of managing capital The goals of managing capital of the Bank are as follows: To be an appropriately capitalised institution. general provisions for loan losses (up to a maximum of 1. after deductions for certain specified items such as book value of intangibles. which includes fully paid-up capital. considering the requirements set by the regulators of the banking markets where the Bank operates. Tier III supplementary capital. The total of Tier II and Tier III capital has to be limited to Tier I capital. are applied using the assessments by various External Credit Assessment Institutions (ECAIs) and aligned with appropriate risk buckets. Annual Report 2009 71 . reserves (excluding foreign exchange translation reserves) and unappropriated profits (net of losses) etc. wherever credit risk mitigation is available. are hence applied at adjusted exposures.g. market risk and operational risk. Tier II capital.. The calculation of Capital Adequacy enables the Bank to assess the long-term soundness. majority and significant minority investments in insurance and other financial entities. Collaterals if any. creditor and market confidence and to sustain future development of the business. gold. cash. The Bank currently does not have any Tier III capital. foreign exchange translation reserves etc.1 CAPITAL ADEQUACY Capital Management The objective of managing capital is to safeguard the Bank's ability to continue as a going concern. it is critical that it is able to continuously monitor the exposure across the entire organisation and aggregate the risks so as to take an integrated approach / view. reserves on the revaluation of fixed assets and equity investments after deduction of deficit on available for sale investments (up to a maximum of 45 percent). there are fixed risk weights for certain types of exposures such as retail portfolio and residential mortgage finance for which external ratings are not applicable. Otherwise. It is the policy of the Bank to maintain a strong capital base so as to maintain investor. On and off-balance sheet assets in the banking book are broken down to various asset classes for calculation of credit risk requirement. government securities. In addition. Risk weights notified. the exposures are treated as unrated and relevant risk weights applied. where available. The total risk-weighted exposures comprise the credit risk. 50% of other deductions noted above are also made from Tier II capital. are used as credit risk mitigant after applying appropriate haircuts under the Comprehensive Approach. bank and corporate guarantees and other debt securities that fall within the definition of eligible collaterals and also fulfil other specified criteria under the relevant capital adequacy guidelines. Banking operations are categorised as either trading book or banking book and risk-weighted assets are determined according to specified requirements of the State Bank of Pakistan that seek to reflect the varying levels of risk attached to on-balance sheet and off-balance sheet exposures.

319 1.692 1.767.376.962 42.910.NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 40.973 1.570 10.764 7.768 Annual Report 2009 72 .732 5.447.115 4.849.066 1.444.000 8.191.880.000 2.572 620.085 1.501.206 233.562 578.362 ------------------------------Rupees in '000------------------------------ Capital requirements 2009 2008 Risk Weighted Assets 2009 2008 Credit risk Portfolios subject to standardised approach (comprehensive approach for CRM) Claims on: Sovereigns other than PKR claims Public Sector Entities (PSEs) Banks Corporates Retail portfolio Residential mortgage finance Listed equities and regulatory capital instruments issued by others banks Unlisted equity investments Fixed Assets Other Assets Past Due Exposures 950.067.700.119.178. using Basel II standardised approaches for credit and market risks and basic indicator approach for operational risk is presented below.070.394. 2009 The capital to risk weighted assets ratio.513.182 854.087) (119.924 7.741) 17.543.381 8.995 26.715 1.502 368.927 847.161 625.687 6.467 (397.442 2.985 81.728 (455.110 4.527 (99.685 14.813 3.497 388.811) (99.520) 13.624 9.085.011 185.520) 4.041.402.025.299 406.596. Note 2009 2008 (Rupees in ‘000) Regulatory capital base Tier I capital Fully paid-up capital Reserves (excluding foreign exchange translation reserves) Unappropriated / unremitted profits (net of losses) Less: Book value of intangibles Shortfall in provisions required against classified assets irrespective of any relaxation allowed Other deductions (represents 50% of the majority or significant minority investments in insurance and other financial entities) Total Tier I Capital Tier II Capital Subordinated debt (upto 50% of total Tier 1 capital) General provisions for loan losses subject to 1.949.769 6.580 3.591 820.588.076.057 8.821.304.263.995.154 2.578 100.899 5.369.690.089 1.557 8.747 101.563 2.855.664.096 14.881 355.807.419 810.189 13.311 477.058 3.741) 9.053 1.412) (1.190 294.2 Capital adequacy ratio as at December 31.25% of total risk weighted assets Revaluation reserve (upto 45%) Foreign exchange translation reserves Less: Other deductions (represents 50% of the majority or significant minority investments in insurance and other financial entities) Total Tier II capital Eligible Tier III capital Total regulatory capital Risk-weighted exposures (a) 13.552 763.101.820 2.430.206.439.970.313.035 3.467 18. calculated in accordance with the State Bank of Pakistan's guidelines on capital adequacy.590 34.021 (119.912.749.347.114.604.895 1.352.491.

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

------------------------------Rupees in '000------------------------------

Capital requirements 2009 2008

Risk Weighted Assets 2009 2008

Market risk Portfolios subject to standardised approach Interest rate risk Equity position risk Foreign exchange risk Operational risk TOTAL Capital adequacy ratio Total eligible regulatory capital held Total risk weighted assets Capital Adequacy ratio 40.3 Types of exposures and ECAIs used
Exposures
Sovereigns other than PKR claims PSEs Banks Corporates

11,312 41,006 6,675 2,227,088 (b) 20,853,543

14,475 1,802 263,254 1,903,330

141,404 512,578 83,441 27,838,597

180,938 22,525 3,290,675 23,791,622

18,105,696 214,250,634 226,321,210

(a) (b) [ a / b * 100 ]

26,700,764

18,178,362

214,250,634 226,321,210 12.46% 8.03%

JCR-VIS
ü ü

PACRA
ü ü ü

Moody's
ü ü -

S&P & Fitch
ü -

CRAB & CRISL^
ü ü

^The State Bank of Pakistan through letter no. BSD/BAI-2/201/1200/2009 dated December 21, 2009 has accorded approval to the Bank for use of ratings assigned by these agencies. The Bank uses these ECAIs to rate its exposures denominated in Bangladeshi currency on certain corporates and banks incorporated in Bangladesh. Credit exposures subject to standardised approach - on balance sheet exposures
2009 Exposures Sovereigns other than PKR claims PSEs Banks Banks Banks - FCY claims less than three months Banks - PKR claims less than three months Corporates Corporates Corporates Retail portfolio Unrated Total *CRM= Credit Risk Mitigation Rating category 4,5 1 1,2,3 4,5 1,2,3 4,5 Amount outstanding 3,311,764 10,462,180 5,918,641 685,284 11,281,363 693,778 15,853,480 12,503,165 12,397,952 2,321,136 47,093,278 128,121,438 250,643,459 Deduction CRM* 5,969,627 1,984,180 10,062,431 207,645 496,010 5,145,975 49,018,442 72,884,310 Net Amount 3,311,764 4,492,553 3,934,461 685,284 11,281,363 693,778 Amount outstanding 2,993,391 5,703,429 5,014,213 10,717,116 5,121,390 2008 Deduction CRM* 4,368,000 475,781 Net Amount 2,993,391 1,335,429 4,538,432 10,717,116 5,121,390

73

Annual Report 2009

1 2 3,4

5,791,049 10,093,130 12,295,520 7,902,703 11,901,942 1,370,723 2,321,136 41,947,303 56,675,751 79,102,996 131,466,795 177,759,149 237,058,641

4,789,224 5,303,906 171,340 7,731,363 223,735 1,146,988 4,968,012 51,707,739 30,174,462 101,292,333 45,170,554 191,888,087

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

41

RISK MANAGEMENT The Bank has in place an approved integrated risk management framework for managing credit risk, market risk, liquidity risk and operational risk as evidenced by its Board approved “Risk Management Policy" and "Risk Management & Internal Control” manual. Following is the governance structure and important policies on Risk Management of the Bank: The Board of Directors through its sub-committee called ‘Board Risk Management Committee’ (BRMC) oversees the overall risk of the Bank. RMD is the organizational arm performing the functions of identifying, measuring, monitoring and controlling the various risks and assists the Apex level committee and the various sub-committees in conversion of policies into action. As part of its mandate the Central Management Committee (CMC) is entrusted with overseeing the operational risk of the Bank. The Bank has established a Treasury Middle Office to effectively monitor day-to-day trading activities of the dealing room. The middle-office directly reports to Head of RMD. An independent risk review function exists at the Bank in the form of Internal Audit Group that reports directly to the Board Audit Committee. After conducting the Basel II gap analysis, the Bank has extensively pursued the implementation of Basel II with the help of external consultants and has complied with all the Pillar -I requirements of Basel II accord. Moreover, in light of SBP circulars and guidelines, significant progress has also been made in respect of advanced approaches of Basel II. Implementation of Pillar 2 i.e. ICAAP has also been initiated. As a policy the reporting line of the risk management function has been kept completely independent of the business divisions. The Bank has acquired Temenos T24 banking system as its core banking solution and its Risk Management system called T-Risk will be used for managing Credit, Market and Operational risks.

-

41.1

Credit risk Credit Risk Management processes encompass identification, assessment, measurement, monitoring and control of the credit exposures. In the Bank's experience, a key to effective credit risk management is a well thought out business strategy. The Bank's focus over the coming years will be to further enhance risk models, processes and systems infrastructure, in line with its ambition to bring maximum sophistication to risk management function. The Bank, as per State Bank of Pakistan Guidelines, has migrated to Basel II as on January 01, 2008 with the standardized approach. For Credit Risk, procedural manual has been developed, which also incorporates a comprehensive system of cross-checks for data accuracy. Simultaneously, processes have been set for fine-tuning systems & procedures, Information Technology capabilities and Risk Governance Structure to meet the requirements of the Advanced Approaches as well. At Bank Alfalah Limited, the management has laid down the road-map to move towards the implementation of BaselII Advanced Approaches, which shall provide a sophisticated platform for prudent risk management practices. In this respect, the Bank is considering appointment of a consultant firm to assist it with Basel II Advanced Approaches parameters.

Annual Report 2009

The Credit Risk Management comprises of the Credit Risk Department that looks after all the aspects of credit risk and conducts portfolio analysis and stress testing on a regular basis. The Head of Credit Risk Department reports directly to the General Manager (GM) - Risk Management Division.

74

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

The Bank has built-up and maintained a sound loan portfolio in terms of well-defined Credit Policy approved by the Board of Directors. Its credit evaluation system comprises of well-designed credit appraisal, sanctioning and review procedures for the purpose of emphasizing prudence in lending activities and ensuring the high quality of asset portfolio. As part of discreet prudential practices the Risk Management Division conducts pre-fact validation of major cases from integrated risk point of view. The Bank manages its portfolio of loan assets with a view to limit concentrations in term of risk quality, geography, industry, maturity and large exposure. Internal rating based portfolio analysis is also conducted frequently. A sophisticated Internal Credit Rating System has been developed by the Bank, which is capable of quantifying counterparty risk in accordance with the best practices. The system takes into consideration qualitative and quantitative factors of the counter-party and generates an internal rating vis-à-vis anticipated customer behaviour. The system has been statistically tested, validated and checked for compliance with the State Bank of Pakistan’s guidelines for Internal Credit Rating. Moreover, the system is backed by secured database with backup support and is capable of generating MIS reports providing snapshot of the entire portfolio for strategizing and decision making. Credit Administration Centre (CAC) is working towards ensuring that all the policies and procedures are implemented and followed accordingly. No loan / advances can be booked without proper approval of CAC. Special attention is paid by the management in respect of non-performing loans. Special Asset Management (SAM) Department (under Credit & Collections Group) is functional and handles this responsibility in compliance with the regulatory requirements. The Risk Management Division also monitors the NPL portfolio of the Bank and reports the same to BRMC. A "Watchlist" procedure is also functioning which identifies loans showing early warning signals of becoming non performing. The Risk Management Division also monitors the NPL portfolio of the Bank and reports the significant matters to BRMC. Proactive credit-risk management practices in the form of studies, research work, Internal Rating System, Integrated Bank-wide Risk Management and Internal Control Framework, adherence to Basel II accord, portfolio monitoring are only some of the prudent measures the bank is engaged in for mitigating risk exposures. The current focus is on augmenting the Bank’s abilities to quantify risk in a consistent, reliable and valid fashion which will ensure advanced level of sophistication in the Credit Risk measurement and management in the years ahead. 41.1.1 Credit Risk - General Disclosures Basel II Specific Bank Alfalah Limited is using The Standardized Approach (TSA) of SBP Basel II accord for the purpose of estimating Credit Risk Weighted Assets. Under TSA Banks are allowed to take into consideration external rating(s) of counterparty(s) for the purpose of calculating Risk Weighted Assets. A detailed procedural manual specifying return-based formats, methodologies and processes for deriving Credit Risk Weighted Assets in accordance with the SBP Basel II Standardized Approach is in place and firmly adhered. 41.1.2 Disclosures for portfolio subject to the Standardised Approach & Supervisory risk weights in the IRB ApproachBasel II specific 41.1.2.1 External ratings SBP Basel II guidelines require banks to use ratings assigned by specified External Credit Assessment Agencies (ECAIs) namely PACRA, JCR-VIS, Moodys, Fitch and Standard & Poors. The State Bank of Pakistan through its letter no. BSD/BAI-2/201/1200/2009 dated December 21, 2009 has accorded approval to the Bank for use of ratings assigned by CRAB and CRISL. The Bank uses these ECAIs to rate its exposures denominated in Bangladeshi currency on certain corporates and banks incorporated in Bangladesh.
Annual Report 2009

The Bank uses external ratings for the purposes of computing the risk weights as per the Basel II framework. For Exposures with a contractual maturity of less than or equal to one year, Short-term Rating given by approved Rating Agencies is used, whereas for Long-term exposure with maturity of greater than one year, Long-term Rating is used. Where there are two ratings available, the lower rating is considered and where there are three or more ratings the second - lowest rating is considered.
75

and single/group borrower exposures.3.1. Within credit portfolio. These products are offered in line with the SBP prudential regulations and approved product notes which also deal with types of collateral. Moreover. SSC/DSCs. in order to restrict the industry concentration risk. These adjustments. 41. 41.1. This includes Cash / TDRs. 41.). securities issued by Government of Pakistan such as T-Bills and PIBs. certain debt securities rated by a recognized credit rating agency. In case of corporate and small and medium enterprises financing. cash collateral.3. In line with Basel II guidelines. Under this approach. also referred to as ‘haircuts’. industry.1 Credit risk mitigation policy The Bank defines collateral as the assets or rights provided to the Bank by the borrower or a third party in order to secure a credit facility. National Savings Certificates.1. for Capital calculation purposes. are reduced from the exposure to compute the capital charge based on the applicable risk weights. the Bank makes adjustments in eligible collaterals received for possible future fluctuations in the value of the collateral in line with the requirements specified by SBP guidelines.4 Types of eligible financial collateral For credit risk mitigation purposes. the Bank considers all types of financial collaterals that are eligible under SBP Basel II accord.1. the SBP has prescribed regulatory limits on banks’ maximum exposure to single borrowers and group borrowers.3. Additional security such as pledge of shares. Annual Report 2009 76 . collateral is taken in line with the policy. to produce volatility-adjusted amounts for collateral. security of the assets of the borrower and assignment of the underlying project contracts is generally obtained. Additionally. fixed assets are generally taken as security for long tenor loans and current assets for working capital finance usually backed by mortgage. The Bank would have the rights of secured creditor in respect of the assets / contracts offered as security for the obligations of the borrower / obligor. The valuation of the properties is carried out by an approved valuation agency. geography.1. Gold.5 Credit concentration risk Credit concentration risk arises mainly due to concentration of exposures under various categories viz. The Bank also offers products which are primarily based on collateral such as shares. The decision on the type and quantum of collateral for each transaction is taken by the credit approving authority as per the credit approval authorization approved by the Board of Directors. as a prudential measure aimed at better risk management and avoidance of concentration of risks. the Bank recognizes only eligible collaterals as mentioned in the SBP Basel II accord.1.3. the Bank uses the comprehensive approach for collateral valuation. In general. mutual fund units where daily Net Asset Value (NAV) is available in public domain and guarantees from certain specified entities. loan against shares etc. For facilities provided as per approved product policies (retail products. BAL’s annual Credit Plan spells out the maximum allowable exposure that it can take on specific industries. the Bank reduces its credit exposure to a counterparty when calculating its capital requirements to the extent of risk mitigation provided by the eligible financial collateral as specified in the Basel II guidelines.3 Disclosures with respect to Credit Risk Mitigation for Standardized and IRB Approaches-Basel II Specific 41.3 Types of collateral taken by the Bank Bank Alfalah Limited determines the appropriate collateral for each facility based on the type of product and counterparty. For project finance. charge on receivables may also be taken.2 Collateral valuation and management As stipulated in the SBP Basel II guidelines. 41. For retail products. the security to be taken is defined in the product policy for the respective products. in order to cover the entire exposure Personal Guarantees of Directors are also obtained by the Bank. in line with the SBP Basel II requirements. TDRs. specified securities and pledged commodities. the newly developed Internal Rating System allows the Bank to monitor risk rating concentration of counterparties against different grades / scores ranging from 1 – 12 (1 being the best and 10 – 12 for defaulters). valuation and margining. Housing loans and automobile loans are secured by the security of the property / automobile being financed respectively.NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 41.3. Moreover.

979.288 10.195 121.207 966.57% 0.47% 3.40% 9.52% 2.19% 0.1.681 2.22% 0.761 1.655.348 Individuals 35.12% 0.846.84% 7.98% 1.142 0.371 Communication 5.972 306.10% 0.54% 3.266 1.134 1.212.018 Oil & Gas 15.591 5.926.022 148.650.646 Housing Societies / Trusts 1.90% 0.611 100% 324.99% 3.722 6.296.338.868 25.368 1.52% 0.017 Welfare Institutions 448.37% 1.495 Others 20.82% 0.258.22% 0.37% 2.627.853 Textile Composite 12.40% 1.715 3.792 94.186 18.428 10.278.164.573 Textile Weaving 2.04% 0.23% 6.86% 3.080.571 Surgical Goods 268.00% 0.93% 0.291 11.338 2.11% 0.607 Food & Allied Products 4.033 6.09% 0.350 Percent 0.752 .30% 92.955 1.442.59% 0.547 558.61% 0.67% 0.51% 7.24% 0.919.650 4.71% 0.18% 0.714.048.289 Sports Goods 313.800.92% Deposits (Rupees in '000) 3.914 Ghee & Edible Oil 1.326.36% 2.05% 2.673 79.714.74% 0.770.52% 2.200 88.892.47% 1.13% 0.833 3.153 Import & Export 2.068.354 121.759.729 Fertilizers 4.951.808 381.412.049.10% 1.768.294 Textile Spinning 12.442 Paper & Board 1.4 Segmental information 41.392 Sugar 3.91% 0.860 20.403.22% 1.09% 0.817 2.524 Real Estate / Construction 5.214.080.706 10.905 280.916.907 233.165 Chemical and Pharmaceuticals 5.28% 0.564 0.09% 2.330 1.263.56% 1.91% 2.36% 3.14% 90.72% 4.16% 346.636 148.1 Segments by class of business 2009 Advances (Gross) (Rupees in '000) Agribusiness 13.940 0.792 Electronics and Electrical Appliances 1.090 4.23% 0.54% 0.58% 3.066.649 4.766 8.450.16% 0.06% 2.173 Iron / Steel 4.190 856.824 2.25% 1.561 10.222 2.13% 0.951 Rice Processing and Trading/ Wheat 4.834 1.848.34% 6.154.46% 2.31% 0.08% 1.737.682.37% 0.930 8.590 Cement 3.41% 1.005.024.701.700 Educational Institutes 1.197.392 1.392 Automobile & Transportation Equipment 3.109 Insurance 199.12% 4.129 7.629.155.41% 8.292.877.570 1.696 Retail / Wholesale Trade 7.068 1.56% 727.4.00% 2.899.035.1.855.338 13.NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 41.687.809 14.14% 602.55% 100% Contingent liabilities * (Rupees in '000) 295.49% 1.216.168 Percent 6.51% 1.856 1.00% 0.210.116.96% 0.84% 1.176.197.00% 1.82% 0.07% 27.79% 28.16% 28.820 Shoes and Leather garments 792.348.548.397.622.016.482 27.407 Percent 0.784.573.879.43% 0.406.618.37% 0.319.37% 2.274 Glass & Ceramics 200.96% 2.31% 1.02% 1.01% 0.453 293 904.40% 596.340 Financial 4.947 0.730 Production and Transmission of Energy 15.338 1.064 385.744.33% 2.260.99% 0.259 6.46% 100% 77 Annual Report 2009 2.449 1.200 197.16% 0.91% 0.60% 27.

057 0.08% 3.754.26% 1.713.547 14.NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 2008 Advances (Gross) (Rupees in '000) Agribusiness 4.793.858 * contingent liabilities for the purpose of this note are presented at cost and includes direct credit substitutes.22% 0.63% 100% Contingent liabilities * (Rupees in '000) 53.023 1.871.694 1.722.750.971.25% 71.675.367.931.07% 1.111 6.125 39.233 0.82% 2.776.193 191.943 3.89% 2.06% 1. transaction related contingent liabilities and trade related contingent liabilities 78 .13% 1.601 8.93% 3.037.083 Communication 4.21% 0.266.299 1.88% 2.89% 0.90% 0.61% 0.90% 2.251.34% 3.40% 0.588 Others 22.37% 5.976.735 Sports Goods 394.512 9.11% 0.24% 47.271 83.259 11.55% 0.01% 8.683 Import & Export 3.534 7.044.76% 0.687 15.55% 4.40% 634.43% 895.923 1.495 230.119 14.770.490 793.23% 96.16% 0.093 Financial 3.098 344.408.69% 1.931 8.944 Individuals 44.06% 0.331.10% 4.95% 0.95% 1.720.45% 740.557 Percent 0.07% 0.928.105 Iron / Steel 4.082 Surgical Goods 240.98% 1.02% 0.67% 0.70% 0.123 314.737.21% 0.28% 8.74% 1.567 Educational Institutes 1.853 Chemical and Pharmaceuticals 3.850 1.772 137.082 Sugar 2.399.35% 5.442.20% 2.52% 1.98% 1.563.857.371.57% 2.514 0.215 767.857 1.013 22.117 5.471 Insurance 506.14% 1.127.661.535.668 Textile Composite 12.204.659 33.206.069 Real Estate / Construction 7.90% 0.31% 1.20% 479.671 Annual Report 2009 Percent 2.497 842.60% 0.878 505.752 736.001 Textile Spinning 10.223 107.127.304 1.99% Deposits (Rupees in '000) 2.558.732.12% 198.86% 1.898 12.17% 0.458 5.04% 0.04% 4.227 Electronics and Electrical Appliances 3.732.437 0.863 559.817 Cement 3.776 Rice Processing and Trading/ Wheat 5.419 1.082 Paper & Board 2.73% 1.68% 0.088 Automobile & Transportation Equipment 3.01% 3.739 939.051 197.889 56.033.724.25% 3.40% 0.422.862.176 5.13% 0.477.566.408 495.404.05% 23.200 2.226.07% 0.531 2.032 2.95% 1.40% 2.118 167.240.769.929 Housing Societies / Trusts 2.679.729 1.30% 1.21% 1.207.41% 1.72% 2.29% 0.992 Retail / Wholesale Trade 7.15% 1.493 Ghee & Edible Oil 3.125 Oil & Gas 10.70% 2.25% 0.13% 0.536 636.853.555 172.08% 7.83% 100% 2.005.229.690 100% 300.164.85% 0.878 2.561 2.646.934 12.869 2.809 7.88% 0.42% 1.13% 1.99% 0.83% 0.309 Percent 0.871.742.015 Food & Allied Products 3.06% 0.280 6.660.339 Textile Weaving 3.415 46.67% 0.894 Production and Transmission of Energy 13.868.113.432 Welfare Institutions 741.14% 0.419.746 Fertilizers 4.916.92% 10.38% 0.834 297.661 Glass & Ceramics 292.85% 32.570.49% 1.111.14% 4.892.005.616.826 6.607 3.37% 0.980 Shoes and Leather garments 796.

684 1.934.671 Percent Deposits (Rupees in '000) Percent 17% 83% 100% Contingent liabilities * (Rupees in '000) 17.421 98.597.3 Details of non-performing advances and specific provisions by class of business segment 2009 Classified Advances Specific Provisions Held Classified Advances 2008 Specific Provisions Held 45.752 9% 51.947 31.404 73.595 8.598 ------------------------------Rupees in '000------------------------------ Agriculture.962.642 197.716 16.526 165.331.436 1.469.762.055.NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 41.185.012 48.759.718.1.988.934.572 16.788.222.4 426.815 1.715 47.055.664 79 Annual Report 2009 .620.635 179.933 1.642 271.276 84% 268.345 8.363 3.499 3.542.948 2.414 635.4.402 795.934.185.744.583 335 48.828.4.769.598 ------------------------------Rupees in '000------------------------------ 8.383.1.248 2.059.732.4.309 Percent 19% 81% 100% Percent 18% 82% 100% 16% 56.664 8.598 5.192.476 67.407 Contingent liabilities * (Rupees in '000) 15.537 3.878 2.931.273 8.187.476 100% 324.106 5.716 90.181 59.595.168 Percent Deposits (Rupees in '000) Percent 17% 83% 100% 2008 Advances (Gross) (Rupees in '000) Public/ Government Private 18.597.215 28.833 83.664 337.1.488.290.319.831 77.058 1. forestry.750 3.185. hunting and fishing Textile Chemical and pharmaceuticals Cement Automobile and transportation equipment Wholesale and retail trade Individuals Others 41.036 197.126.019.424 8.837 2.952 282.262.408.576 94.273 Details of non-performing advances and specific provisions by sector 2009 Classified Advances Public / Government Private 16.597.716 Specific Provisions Held Classified Advances 8.858 41.2 Segment by sector 2009 Advances (Gross) (Rupees in '000) Public/ Government Private 32.868 100% 300.055.403.490.990 91% 248.273 2008 Specific Provisions Held 5.

Bank also carries out stress testing on a daily basis by applying parallel shocks of changes in market yield on all the categories of T-Bills and Government securities.044.1.974) 23. currency and counter-party limits for on and off-balance sheet financial instruments.1 Foreign exchange risk Foreign exchange risk arises from the fluctuation in the value of financial instruments consequent to the changes in foreign exchange rates. To manage and control market risk a well defined limits structure is in place. Bank calculates 'Value at Risk (VaR)' on a daily basis by using 'Historical Method' taking into consideration the data of over 2 years. The foreign exchange exposure limits in respective currencies are managed against the prescribed limits.319. The currency risk is regulated and monitored against the regulatory / statutory limits enforced by the State Bank of Pakistan.175.764 16. The Bank manages this risk by setting and monitoring dealer. The buy and sell transactions are matched in view of their maturities in the different predefined time buckets.273 226.607 1. counterparties enter into swaps. It also includes investments and structural positions in the banking book of the Bank.716 1.316 389.133.331.738 417. Off-Balance sheet financial instruments are contracts which are the resultant outcome of the import and export transactions.794. Annual Report 2009 The analysis below represents the concentration of the Bank's foreign currency risk for on and off balance sheet financial instruments: 80 .5 Geographical segment analysis Profit before taxation 2009 Total assets Net assets employed employed 21. forward transactions in inter.309 * contingent liabilities for the purpose of this note are presented at cost and includes direct credit substitutes.420 Contingent liabilities * 89.267.154 131.665 94.824) 17.906 22.776 94.676.620. Currently.763.055 Profit before taxation Pakistan Asia Pacific (including South Asia) Middle East 2008 Total assets Net assets employed employed Contingent liabilities * ------------------------------Rupees in '000------------------------------ 1. Moreover.124.NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 41.228 7. transaction related contingent liabilities and trade related contingent liabilities 41.219 26. The Bank uses the Standardized Approach to calculate capital charge for market risk as per the current regulatory framework under Basel II.2 Market risk Market risk is the risk of losses due to on and off-balance sheet positions arising out of changes in market prices. adjusted and approved periodically.345 (53.280.581.038.718. Moreover.294 (45.335 75.567.990.070.964 360.742 5. 41.016.720 348.739 83.964 380. Market risk mainly arises from trading activities undertaken by the Bank’s treasury.2.577) 4. Going forward the Bank is preparing to use more sophisticated systems and models and is currently evaluating use of various tools to enhance its capability to successfully meet the requirements of the internal models approach of Basel II.690.407 ------------------------------Rupees in '000------------------------------ Pakistan Asia Pacific (including South Asia) Middle East 930.078 318.775 (12.326 5.126.4.bank market on behalf of customers to cover-up their positions against stipulated risks. These limits are reviewed.

Special emphasis is given to the details of risks / mitigants.235 48.057.951 - ------------------------------Rupees in '000------------------------------ Net foreign currency exposure 13.808 43.990.635 Off-balance sheet items (14. The Bank’s interest rate risk is limited since the majority of customer’s deposits are retrospectively re-priced on a biannual basis on the profit and loss sharing principles.044.743.764 Liabilities 283.236 22.693 1.930) 8.199 58.811 348.609 366.061 88.119 22.739 41.430. In order to ensure that this risk is managed within acceptable limits.083.526.936.709.055 Liabilities 333.635 (199.700 17.983.441.623 1.203.854 89.100.100.951) 6.332 9.319.069.894 97. The Bank’s equity trading book comprises of Equity Portfolio Unit’s classified as Held for Trading (HFT).801 138 3. 41. limits / controls for equity trading portfolios of Equity Portfolio Unit.953 37.346) 786.310 (8.555.029 331.420 2008 Assets Pakistan Rupee United States Dollar Great Britain Pound Japanese Yen Euro Other currencies Total foreign currency exposure Total currency exposure 305.229) 53.225.823 225.520.NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 2009 Assets Pakistan Rupee United States Dollar Great Britain Pound Japanese Yen Euro Other currencies Total foreign currency exposure Total currency exposure 369.708.070.273) 14.282 2.301 (32.916) 16.026 26.355 389.378 19. The Bank is exposed to interest rate risk as a result of mismatches or gaps in the amounts of assets and liabilities and off-balance sheet instruments that mature or re-price in a given period. while the AFS portfolio is maintained with a medium term view of capital gains and dividend income.761.946.470 (20.998 3.230) 2.255 2.133.025 Off-balance sheet items (8.787 (778) 4.733 17.456 1.217 6.006 3.792.489 171. the Bank’s Asset and Liability Management Committee (ALCO) monitors the re-pricing of the assets and liabilities on a regular basis.252.199.2.373) 8.136 (28.092.3 Interest rate risk The interest rate risk arises from the fluctuation in the value of financial instruments consequent to the changes in the market interest rates.360.597 3.660.057.373 - ------------------------------Rupees in '000------------------------------ Net foreign currency exposure 22.996 40.362 3.513.626.476.399 749.643 3.364 50. The objective of Equity Portfolio Unit’s classified as HFT portfolio is to take advantages of short-term capital gains.693. 81 Annual Report 2009 .342 4.124 (91.741 33.2 Equity position risk Equity position risk in the trading books arises due to changes in prices of individual stocks or levels of equity indices.559.215.410.

895 (694.969 30.393 9.858 2.835 114.182.513 27.893.694.581.053.052.696.913 33.267 30.087 46.373 49.493 17.532 13.513 12.598 54.786 17.861 9.508 (2.682.611 29.545.465 21.317.231.460 26.572.84% 3.209 26.478 6.583.950 43.878 2.690.840.781.031 514.317.857 10.773.884.558 33.112 121.566 31.732.177 1.571 8.955 4.056.788.745) 2008 Exposed to Yield/ Interest risk Non-interest Over 1 Over 3 Over 6 Over 1 Over 2 Over 3 Over 5 bearing Upto 1 to 3 to 6 Months to 1 to 2 to 3 to 5 to 10 Above financial Total Month Months Months Year Years Years Years Years 10 Years instruments -----------------------------------------------------------------------Rupees in '000----------------------------------------------------------------------- Assets 168.769 2.230 8.831 10.989 15.726 1.566 19.965 5.042.097.502.739 8.427 57.170.518.589.692.819.921 2.862 2.722.538.906.981 372.819.320.398) 41.38% 17.16% 9.376 9.539.636 330.860 40.779.571.251.766.695 (51.332.462 16.782 11.735 13.061.67% 10.509 597.282 446.276.985 479.178.319 2.576 159.317.621 35.902.060 10.488 12.142 159.273 546.307.415.08% 13.01% 6.222 300.005.565 50.964.753.060.276 1.091.759.033 10.303 4.310.21% 2.633.076.528.923 9.455.293 10.057) 19.043 3.159.200 (230.296.708.710.950.395.914 23.purchase Forward exchange contracts .306.991.708.473.82% 32.419.3.558 50.817.332 24.142 62.788.415 2.818.537.818.777 (5.639 14.857 5.331 457.753.305.383) 12.060 41.011 4.125 2.793.816.067 2.484 21.459.524.677 53.329.005.513 12.886 (223.247.604.429 3.558.378 7.705.857 10.296.610.901 29.284 4.sale Repo transactions resale Repo transactions repurchase Off-balance sheet gap Total Yield/Interest Risk Sensitivity Gap Cumulative Yield/Interest Risk Sensitivity Gap Effective Yield/ Interest Rate NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS On-balance sheet financial instruments 2.380 5.673.144 157.706.791 2.395 362.800 16.395.331 19.475 1.270.347.138 9.598 335.741 (37.237 2.890 7.264.957 188.170 10.424.370.845.090.237 13.221 10.546 1.474.636 100.602) (10.634.513 71.132 59.780 21.012 22.395.199.828.803 10.104) 725.676.589.956 172.170 600.570.546 12.126.579 7.407.983.069 733.300 40.Annual Report 2009 82 Effective Yield/ Interest Rate 2009 Exposed to Yield/ Interest risk Non-interest Over 1 Over 3 Over 6 Over 1 Over 2 Over 3 Over 5 bearing Upto 1 to 3 to 6 Months to 1 to 2 to 3 to 5 to 10 Above financial Total Month Months Months Year Years Years Years Years 10 Years instruments -----------------------------------------------------------------------Rupees in '000----------------------------------------------------------------------2.857 52.816.633.181 5.762.822.326) 1.921 324.442.452 1.556 3.429 2.007 (72.380) (2.578 272.037.212.916 4.762.497.954 (51.343 14.322 58.481.825.380 546.741 9.557 12.256.540.995.230 600.765.571.988 9.741 121.234.695 110.983.293.571.936 11.633.287.151.292 1.424.999 40.746.792.124 9.315.890 5.97% 13.822.109 9.952.923 14.01% 7.743.806) 2.734 36.499.583.033.031 13.413 12.1 Mismatch of Interest Rate Sensitive Assets and Liabilities On-balance sheet financial instruments Assets Cash and balances with treasury banks Balances with other banks Lendings to financial institutions Investments Advances Other assets Liabilities Bills payable Borrowings Deposits and other accounts Sub-ordinated loans Other liabilities On-balance sheet gap Off-balance sheet financial instruments Forward exchange contracts .827 25.007 4.031 16.494 40.030.093 110.766.795.194 553.053.134.030.755 3.871.347.778 8.570.370.824 10.151 86.333.037.649 2.009.690 25.759.816.452.435 99.462 7.200 247.505.339 14.069 19.939 9.083.380 9.752 7.768.254.sale Repo transactions resale Repo transactions repurchase Off-balance sheet gap Total Yield/Interest Risk Sensitivity Gap Cumulative Yield/Interest Risk Sensitivity Gap .751 6.579 2.576 19.01% 11.500 75.516 61.276.923 2.652.456.621 (45.120 10.795.056.770.374.960.063 5.767.867 10.692 156.702 3.934.997 12.110.028.981 51.498.215.537 29.685.687.307.126.264 51.purchase Forward exchange contracts .170 5.151 6.915) Cash and balances with treasury banks Balances with other banks Lendings to financial institutions Investments Advances Other assets Liabilities 10.325.881 53.754 10.256.399 8.446.167 1.902 46.452 457.247.305.667.452.512 35.545.403.326.415 83.859 2.573 1.939 (1.335 21.756.727.886.545 1.438 12.219 3.51% - Bills payable Borrowings Deposits and other accounts Sub-ordinated loans Other liabilities On-balance sheet gap Off-balance sheet financial instruments Forward exchange contracts .919 57.016 2.296.42% 6.181 45.973.890 2.947.524 16.476 9.753.352 134.653.925 11.784.811 17.532 12.183 53.692 19.863.056.169 17.238 191.297 10.000) (51.299 11.526.261.638.245 14.169 10.491 2.395 103.969 156.879) 14.446.060.467.268) (40.63% 12.754.207 54.273 49.579 1.885 31.74% 10.293.706 3.860 57.306 93.721.531.966.165 19.719) 39.132 12.058 5.602) 17.395.732.144 20.841.41% 11.563 11.687.790.

as core retail deposits form a considerable part of the bank’s overall funding mix therefore significant importance is being given to the stability and growth of these deposits. The BOD has approved a comprehensive liquidity management policy which stipulates the early warning indicators of liquidity risk and maintenance of various ratios. Bank also has a 'Contingency Funding Plan' in place to address liquidity issues in times of stress / crisis situations. Moreover. The Bank’s Asset and Liability Committee (ALCO) manages the liquidity position on a regular basis and is primarily responsible for the formulation of the overall strategy and oversight of the asset liability function. depositor’s concentration both in terms of the overall funding mix and avoidance of undue reliance on large individual deposits. ALCO monitors the maintenance of balance sheet liquidity ratios.NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 41. Moreover. 83 Annual Report 2009 .4 Liquidity risk Liquidity risk is the potential for loss to the Bank arising from either its inability to meet its obligations or to fund increases in assets as they fall due without incurring an unacceptable cost.

967 20.557 947.320 4.617.840.005.212.090 8.890 2.818 1.291.802 41.843 41.677 62.535 18.310.768 546.138.001 168.4.465 1.691 272.534 8.280 331.071 7.677 (9.203 42.596 26.261.133.571. with the approval of ALCO.722.687.802 12.399 418.494 467.314 1.481.570.293 9.044.892.371 172.500 19.748.759.122.166.959 2.068.702 440.352.330.757 29.837 13.953 27.921 615.165 1.858 2.104.972 44.809 48.166.462.869.043 3.919 178.132.921 324.097.638.170 36. However.529 41.400 14.281 61.465.780 15.766.964) 2.758 1.436.112 494 1.561.594 222.467 2.002 57.563 3.012 22.769.033 25.160 22.569 199.138 299.981.867 479.770. these deposits have been classified based on management experience with such class of deposits.363 29.516 17.764 3.396 34.133.207 210.420 13.950.227.048.728 2.888 85.491.526.751.538.166.238.000 3.690.359 252.166.125 86.426 (18.452.559.257 41.526 28.024 11.150.687.394 16.075.652.512 1.556.805.339 23.786 366.521.476.643.net of tax Current and saving deposits do not have any contractual maturity.330 43.027 1.006.913 514.264 534.489 8.025 17. these deposits are payable on demand.396 8.952.535 17.597.784 40.659.347.529 29.595 29.508 30.597 17.151 17.056.611 31.263.267.181 179.335 21.026 24.990.030.709.727) (17.699.979 56.670 42.561.447.381 6.259 12.649.181 1.619.735 8.978 59.363.331 2.465 11.000.666.513 7.848.300 105.069 733.055 3.947.846.420 25.946.792.380 389.975.074.766 152.037 25.003 758.050.438 3.216 17.352.165 3.632.253 10.965.Annual Report 2009 84 2009 Over 1 Over 3 Over 6 Over 1 Over 2 Over 3 Over 5 Upto 1 Above to 3 to 6 Months to 1 to 2 to 3 to 5 to 10 Total Month 10 Years Months Months Year Years Years Years Years -------------------------------------------------------------------------Rupees in '000------------------------------------------------------------------------- 41.087 47.028.044.099.955.734 13.631 9.066 (21.335 20.541 15.754 6.788.230.581.836.223.374 988 1.429.169 7.906.679.478.667 494 540.403. .322 631.560.092 (8.240.966 62.298 7.893 340.494 633.145 514.807 9.435 99.478 808.031 13.056 3.732.885 126.890 5.739 (68.063.235.938 61.427 77.784 340.864.807 9.002 252.499 1.278 40.771 214.880.682.873 446.660) 6.332 14.468 18.973.168.070.133 23.169 208.690.062 Over 1 Over 3 Over 6 Over 1 Over 2 Over 3 Over 5 Upto 1 Above to 3 to 6 Months to 1 to 2 to 3 to 5 to 10 Total Month 10 Years Months Months Year Years Years Years Years -------------------------------------------------------------------------Rupees in '000------------------------------------------------------------------------- Liabilities Bills payable Borrowings Deposits and other accounts Sub-ordinated loans Deferred tax liabilities Other liabilities 4.929 5.333.936.839 91.569 199.438.719.484 21.142 356.500 75.667.238 228. Therefore.based on working prepared by the Asset and Liability Management Committee (ALCO) of the Bank Assets Cash and balances with treasury banks Balances with other banks Lendings to financial institutions Investments Advances Operating fixed assets Other assets 35.524 1.529 79.452.755.688 408.000 159.263.270.233) 31.536.790.752 7.664.259.093.238 191.393.748.042.877.990.075.310.766.299 1.512 884.338 21.738 208.427 315.380 78.253 147.824 1.541 Liabilities Bills payable Borrowings Deposits and other accounts Sub-ordinated loans Deferred tax liabilities Other liabilities Net assets Share capital Reserves Unappropriated profit Surplus on revaluation of assets .233.083.569.821.851 1.144 10.525.438 14.315.697 172.456.857 37.273.820) 12.152.995.448.988 13.151 514.088 53.535 20.120 847.878 2.869.188.082 152.415 43.739 7.785.942 5.606 1.1 Maturities of Assets and Liabilities .056.031 12.343 2.710) 41.845 228.816 8.452.957 188.690.427.075.766 600.492.653.344 3.722.969 2.639 14.222 300.042.890 11.994 Net assets Share capital Reserves Unappropriated profit Surplus on revaluation of assets .098 114.403.415 1.738 21.367.769 597.380 16.807 10.367 348.144 20.194 553.395.355.635 22.587.707.527.597 20.690 23.461 12.005 40.358.126.518.959 4.699 32.194 14.893) (62.076.876 179.159.206 6.000 12.527.net of tax 2008 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS Assets Cash and balances with treasury banks Balances with other banks Lendings to financial institutions Investments Advances Operating fixed assets Other assets 32.851 10.773.786 10.789.690 14.676.370 4.722.312.

890 11.031 13.652.597 17.978 59.000 159.124.249 41.238 191.206 6.979 56.030.006.338 5.499 1.875 32. 85 Annual Report 2009 .263.682.395.526.788.639 14.880.667.563 3.586 31.848.063.529 5.948 546.299 1.722.273.959 2.921 615.807 3.535 17.194 553.792.574 2.858 2.512 1.403.969 2.333.300 105.288 13.898.950.168.936.093.890 2.400.380 78.296.380 389.481.826 57.243.438.467 (117.044.347.212.691 272.771 4.290.035.net of tax 2008 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS Assets Cash and balances with treasury banks Balances with other banks Lendings to financial institutions Investments Advances Operating fixed assets Other assets 32.281 61.578 1.594 222.417.534 8.050.270.950.824 1.738 208.087 46.690.427.028.975.521.556.144 20.786 10.315.830.790.145 514.228.656.809 46.801.310.332 14.000.807 3.947.350 19.723.495.695.690 23.070.869.142 356.795 3.692.938 234.133.41.489 2.056.based on contractual maturity of the assets and liabilities of the Bank 2009 Over 1 Over 3 Over 6 Over 1 Over 2 Over 3 Over 5 Upto 1 Above to 3 to 6 Months to 1 to 2 to 3 to 5 to 10 Total Month 10 Years Months Months Year Years Years Years Years -------------------------------------------------------------------------Rupees in '000------------------------------------------------------------------------- Assets Cash and balances with treasury banks Balances with other banks Lendings to financial institutions Investments Advances Operating fixed assets Other assets 35.465.535 20.789.845 228.753.807 4.766.237 408.687.876 179.769 597.533.166.571.561.335 20.857 1.770.902 91.259 12.097.436.339 14.057) 40.103.595 29.330 26.404.994 Net assets Share capital Reserves Unappropriated profit Surplus on revaluation of assets .335 21.946.597.082 152.587.042 6.732.258 1.492.125 86.254.088 53.465 1.748.043 3.448.784 340.400 14.966 53.394 16.293 9.185) (6.921 324.919 178.843 214.751.166.467 2. The management believes that the maturity profile disclosed in note 41.821.679.370 4.478 808.995.527.690.298 7.438 14.065.341 3.044.570.692 884.500 19.632.589.025 17.973.027) 3.166.371 172.194 14.1 that includes maturities of current and saving deposits determined by the Asset and Liability Management Committee (ALCO) keeping in view historical withdrawal pattern of these deposits reflects a more meaningful analysis of the liquidity risk of the Bank.170 440.896 39.456.878 2.165 1.219 5.144 479.133.133 23.261.075.697 172.757 20.465 11.581.925 1.068.802 12.749 156.151 17.707.541 Liabilities Bills payable Borrowings Deposits and other accounts Sub-ordinated loans Deferred tax liabilities Other liabilities Net assets Share capital Reserves Unappropriated profit Surplus on revaluation of assets .077.062 Over 1 Over 3 Over 6 Over 1 Over 2 Over 3 Over 5 Upto 1 Above to 3 to 6 Months to 1 to 2 to 3 to 5 to 10 Total Month 10 Years Months Months Year Years Years Years Years -------------------------------------------------------------------------Rupees in '000------------------------------------------------------------------------- Liabilities Bills payable Borrowings Deposits and other accounts Sub-ordinated loans Deferred tax liabilities Other liabilities 4.739 (150.890 1.754 6.649.478. The management believes that such a maturity analysis does not reveal the expected maturity of saving deposits as a contractual maturity analysis of deposits alone does not provide information about the conditions expected in normal circumstances.529 3.724 17.766 152.957 188.447.355.278 40.138 299.972 44.037.494 467.677 53.413.074.427 315.643.120 847.122.070.764 3.452.322 631.400.734 13.653.687.000 12.071 7.890 5.818 1.253 229.005.367 348.513 7.780 15.784 43.508 30.990.026 15.207 210.923 988 1.617.623.840.851 10.069 733.462.159.033 25.420 13.132.396 8.718 13.619.516 17.557 947.4.739 7.183 252.452.569.546 418.075.635 8.222 300.267.676.816 8.213.524 1.net of tax The above mentioned maturity profile has been prepared based on contractual maturities.169 208.192.257 41.802 41.633.885 208.936 494 1.491 494 540.494 633.090 2.990.893 340.322 17.597 20.343 2.233.429.223.722.2 Maturities of Assets and Liabilities .238 228.160 22.000 3.913 514.393.380 4.056 3.075.981.583.187 39.977.083.529 2.758 1.461 12.766.055 3.728 2.076.435 99.569 199.003 758.291.381 159.766 600.166.738 21.759.535 18.151 514.031 12.681 114.631 9.719.752 7.638.748.001 168.484 21.541 15.611 34.851 1.786 366.4.773.263.960 12.802 16.451.216 17.181 179.576 1.164.500 75.420 (147.718 6.002 252.734.888.888 85.415 43.594) 59.310) (8.099.396 34.690.906.967 20.771 214.415 1.237 22.056.873 446.201.690 14.578.264 534.042.024 11.561.144 10.468 18.280 331.052.667.538.491.512 5.798 25.988 13.012 22.363.331 2.569 199.596 26.227.

Bank has categorized all its Operational loss/near miss incidents into following loss event categories. Bank intends to move towards the ‘Alternative Standardized Approach’ and for this purpose. people and systems or from external events. Internal Fraud External Fraud Employment Practice & Workplace Safety Client. control & report operational risk in a consistent & transparent manner across the Bank. Product & Business Practice Damage to Physical Assets Business Disruption & system Failure Execution. assess. A separate ‘Research & Help Desk’ has been created in this regard that helps in creating awareness about Risk Management. Operational Risk Function and business / support units are involved and regularly collaborate in determining and reviewing the strategy. occurring across the organization and reported to Operational Risk Management Department.RMD. issued by SBP. All the business / support units are responsible for ensuring compliance with policies and procedures in their day-to-day activities and monitoring key operational risk exposures. structure and functions of Operational risk management and provide guidelines to identify. Annual Report 2009 86 .” In compliance with the Risk Management Guidelines. monitor. BAL’s Information Security Policy and Business Continuity Plan have been approved by the Board of Directors and are in the process of implementation. Risk & Control Self Assessment (RCSA) exercise and Key Risk Indicators (KRIs) are being developed and implemented across the organization. An Operational Loss Database.5. and the recommendations of RMD are taken into consideration before their approval at the appropriate level. However. which covers the strategies.NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 41. A reporting structure has been put in place whereby all business/support units have been made responsible to collect and report the operational losses/ near miss incidents to Risk Management Division. The Operational risk management policy of the Bank is incorporated in the Board-approved Risk Management Policy and Risk Management & Internal Control Manual. Basel II and the capital calculation approaches. At Bank Alfalah. risk awareness culture is being encouraged by communicating the principles of proper risk management to all Bank employees. “the risk of loss resulting from inadequate or failed internal processes. Bank is using the ‘Basic Indicator Approach’ for calculating the capital charge for Operational Risk. As required by Basel II. A dedicated IT Security Unit is functioning within Risk Management Division while responsibility for BCP implementation resides with Operations Group. Key Risk Indicators (KRIs) have been identified across the Bank and now KRI reporting has also been initiated. Almost all the policies and procedures of the Bank are reviewed from the risk perspective. the mapping of business activities into Basel defined business lines has already been completed.Basel II Specific Currently. processes. Delivery & Process Management For the purpose of continuous monitoring of risks. in order to use it as an action plan in improving the operational risk & control system at the organizational and business / support unit levels. 41. an Operational Risk Function has been established within RMD. which directly reports to General Manager .1 Operational Risk Disclosures .5 Operational risk Basel II defines Operational risk as. are aggregated to an internally developed ‘Operational Loss Database’. These Operational losses.

3. 2008 has been reclassified from administrative expenses and netted off from fee.510.214 million for the year ended December 31. NON-ADJUSTING EVENT AFTER THE BALANCE SHEET DATE The Board of Directors in its meeting held on March 15. 2008 have been reclassified from administrative expenses and netted from markup / return / interest income. Chief Executive Officer Director Director Chairman 87 Annual Report 2009 . 2010.161 million for the year ended December 31. 44. The financial statements for the year ended December 31. 1. 44. 2010 has announced cash dividend of 8 percent.945 million for the year ended December 31.1 GENERAL Comparatives Comparative information has been re-classified. 2010 by the Board of Directors of the Bank. This appropriation will be approved in the forthcoming Annual General Meeting.503 million for the year ended December 31.115 million and Rs.311 million respectively for the year ended December 31. DATE OF AUTHORIZATION These financial statements were authorized for issue on March 15. 2008 has been reclassified from administrative expenses and included in markup / return / interest expensed. 196. c) Reward payments amounting to Rs. 2008 has been reclassified from the advances to other assets as advances against Ijarah. 163. 233. 422. Musharika and Murabaha amounting to Rs. 1.514. commission and brokerage income.NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 42. Significant reclassification include: a) Brokerage expense amounting to Rs.755 million.925 million and Rs. wherever necessary to facilitate comparison and to conform with changes in presentation in the current year. re-arranged or additionally incorporated in these financial statements. Musharika and Murabaha.289 million as income on investment in Held-for-Trading and Held-to-Maturity respectively. 2008 has been reclassified from mark-up income on investment in Available-for-Sale and shown Rs. b) Interchange acquiring fee relating to credit card business amounting Rs. d) Mark-up / return / interest income amounting to Rs. e) Advance against Ijarah. There was no impact of this reclassification on aggregate amount of mark-up / return / interest income. Rs. 43. 2009 do not include the effect of this appropriation which will be accounted for in the financial statements for the year ending December 31. 79. 450.

079.802. 2009 6 Syed Hussain Abbas 42301-7152071-9 Muhammad Akbar 42201-8186616-7 M. Others 7 9 79.229.923.000 - 1.000 5 Shafique A.000 4 Alliance Trading Company PO Box 2269. A. Sheikh 53-B.000 79.000 - 4.252. Khurshid Ahmed Saeed Ullah Sh.000 2.000 Information not available with the Bank's record 3.000 1.) Ltd.154. - - 1. 2 Malik Saleem Brothers 4.000 8 Apex International Associates 13-F.203.000 Name and address of the Borrower Total (5+6+7) Principal written-off Mark-up written-off 3 4 Ghulam Haider Qazi Muhammad 3.000 STATEMENT SHOWING WRITTEN-OFF LOANS OR ANY OTHER FINANCIAL RELIEF OF 500. Shahab-ud-Din 239-64-022417 Sh.000 3.) Ltd.000 Name of individuals / partners / directors (with N. 1st Floor. Iqbal Hookmani 24.802.896.178.748.000 757.000 2.000 757.000 RUPEES OR ABOVE DURING THE YEAR ENDED 31 DECEMBER 2009 Father’s / Husband’s Name Principal Mark-up 5 8 10 738.236.000 553.000 1.802. Dundas Street.000 3 ESP Global IT System - 601.000 48.421.000 - - 2.000 553.000 - - 2.631. Nazir Ahmed Chaudhry Niaz Ahmed Khan Chaudhry Bashir Khalid Noor Ahmed Tahir Nazir Shaukat Iqbal Vora Abdul Khaliq Nuzhat Firdous Firkhanda Jabeen G.000 1. Karachi. 42301-9818102-9 - - 2.000 2.748.000 Information not available with the Bank's record 2.520. Raja Center Main Market Gulberg. Anum Centre.000 6 Faran Enterprises (Pvt.I. Gulberg.2 KM Sheikhupura. Lahore. 9.000 Information not available with the Bank's record 1.000 - 1 2 Other financial relief provided 11 ANNEXURE . Saddar.C. Main Gulberg. Naqi Market.I 1 Index Commodities (Pvt.000 1. Sheikh Muhammad Shafiq 1.236. Lahore.802.079.000 - 27.520.000 48.390.154. 4. 2. 84 Industrial Estate.Annual Report 2009 88 (Rupees in ‘000) Total (9+10+11) 12 3.) Ltd. Lahore. Akhter Tahir Ahmed Information not available with the Bank's record 2.000 4.000 1.000 Muhammad Hussain 3. Kot Lakhpat. Khurshid Ahmed Sh.390. No.000 .000 9 Anwars Mahnoor Collection First Floor.631.421. Shaikh M. Rizwan Ahmed 35201-9849754-3 Muhammad Arif 275-43-292808 Shahida Rasheed 35202-3686068-8 Minhaj-ud-Din Sheikh Bashir Ahmed Chaudhry Manzoor Hasan Shafqat Iftikhar Shafique A.000 601.178.000 - - 3.000 S.000 3.000 3.896.000 403. No.000 403.000 3.000 3.000 738.229. Lahore.000 7 Sheikh Impex (Pvt.229.748.923.748.) Outstanding Liabilities at January 1.951. Lahore.229.000 - 1.

Total 98.841 11 Arshad Ali Sheikh House No.250.989 89 Annual Report 2009 . Bashir Sh. Muridke.269 788.387 - 3.875 2. Dhoraji Colony Aslam 42201-6769103-5 - 1.000 108. 2009 ANNEXURE . Muslim Street Kahna Nau.532.000 M.000 97.147. Mian Muhammad Akram 35 Hunza Block.170.000 - S.170.959 788.252 221.375 - - 4.867.080 46. Ghais ud Din 2.211 359.) Outstanding Liabilities at January 1. Pirwadahi.000 17 M/S Al-Qadeer Coach Sher Rehman Gul Karim Shop # 03.I 1 2 Other financial relief provided 11 10 Bashir Tanneries (Pvt. Allama Iqbal Town.968 218. Saeed Colony Farooq Nizami 33100-4619337-9 - 723.366 578.074 710.252 221.053 - 18 Balaj Textile Mills (Pvt. Rawalpindi.265.000 10.595 723.211 592.875 2.532.026.000 1.269 15 Dixy Fried Chicken Wasim Ghias Sheikh 29-E-1.841 501. 6.558.968 218.522.945.250.435.(Rupees in ‘000) Father’s / Husband’s Name Principal Mark-up 5 9 12 10.818 10. 2. No.058 - 1.387 3.292. No.435.503.847 13 Aslam C-74-75.258 1. Gulberg III. 12 Arshad Ali Sheikh 33100-1301643-7 12 Farooq Nizami H # P-7.000 Name of individuals / partners / directors (with N.366 578.147.624 14 Abdul Munaf H. Mian Muhammad Ismail 25.) Ltd. Others 7 10 20.) Ltd.054.428 4.572 345.873 720.002. Lahore.I.959 16 G K Goods Forwarding Agencies Gul Karim 2.233.268. Mian Muhammad Ismail 24.258 502.572 345.171 79. Lahore Mian Muhammad Akram Muhammad Jawad Ikram 35 Hunza Block.292.558.795.292.624 592.375 1.262 79.595 501.000 52.163 3.304.074 2.818 5.888.873 720.000 Name and address of the Borrower Total (5+6+7) 8 Principal written-off Mark-up written-off Total (9+10+11) 3 4 6 97.375 Mian Ikram Mahmood House No.250. Lahore 35201-6548150-7 Fakhar Din 2. Sheikh Muhammad Shafique Sheikh Muhammad Jamil Sheikh Muhammad Pervez Sheikh Muhammad Naeem Aftab Jamil Information not available with the Bank's record Information not available with the Bank's record Information not available with the Bank's record Information not available with the Bank's record Sh. Street No. General Bus Stand.233.058 1. No.C. Karim Block Abdul Munaf 35202-4929724-7 359. Mohammd Shafiq Muhammad Jamil 20.558. Allama Iqbal Town.237 3.074 2.847 502. 23-KM GT Road. 198.000 - - 2.888. Near Gillani Hotel. Lahore.

211.554 7.658 575.309 1.121 2.612 30.073.132 10.487.796 688.800 20.579 3.074 3.800. 2009 2008 (Rupees in ‘000) ASSETS Cash and balances with treasury banks Balances with and due from financial institutions Lendings to financial institutions Investments Advances Operating fixed assets Other assets LIABILITIES Bills payable Borrowings from financial institutions Deposits and other accounts Subordinated loans Liability against assets subject to finance lease Deferred tax liabilities Other liabilities NET ASSETS REPRESENTED BY Islamic Banking Fund Exchange Equalization Reserve Unappropriated/ Unremitted profit Surplus / (Deficit) on revaluation of assets . 2009 (December 31.800.000 3.327 331.920.552 3.986.969.961 2.921 5.177.559 1.614 1.166 291.119 29.619 10.522.200 1.614 1.846.500 Remuneration to Shariah Advisor / Board CHARITY FUND Opening Balance Additions during the year Payments / Utilization during the year Closing Balance 37.ANNEXURE .268 2.291.845.331.253 1.619 717.602 1.115 3.740.144.228 2.II ISLAMIC BANKING BUSINESS The bank is operating 60 Islamic banking branches as at December 31.575 Annual Report 2009 Note: Comparative information has been re-classified.049 46.163 35.219 42.242.846.138 760.000 8.575 46.389 16.302 3. 90 .344 37. 2008: 48 branches).097.net of tax 4.253 3.995 3.525.107 38.168.464.379.086.500 1.097.841 7.499 19.277.939.552.639.852 73.088 38.243. re-arranged or additionally incorporated wherever necessary to facilitate comparison and to conform with changes in presentation in the current year.995 1.808 28.724 1.

136 948.356 286.201 1.990 (25.746 701.424) 1.545 3.040. 2009 (December 31.515 1.899 4.552.064 31.447.133.890 1.942 27.833 127. .902 50.373.579 76.013 32. re-arranged or additionally incorporated wherever necessary to facilitate comparison and to conform with changes in presentation in the current year.900 1.480.685 1.742.961 70 1.II ISLAMIC BANKING BUSINESS The bank is operating 60 Islamic banking branches as at December 31.304 295.070 76.918 288.985 31.990 32. 2008: 48 branches).096 1.071.961 91 Annual Report 2009 Note: Comparative information has been re-classified. commission and brokerage income Dividend income Income from dealing in foreign currencies Gain / (Loss) on sale of securities Unrealized gain on revaluation of investments classified as held for trading Other income Total Non.562 1.071.229 127 846.Mark-up Expenses PROFIT BEFORE TAXATION Unappropriated profit brought forward Transferred from Surplus on revaluation of fixed assets-net of tax Profit available for appropriation / unremitted profit 3.204 1.277.206 59. 2009 2008 (Rupees in ‘000) Mark-up / Return Earned Mark-up / Return Expensed Net Mark-up / Return Income Depreciation on assets given on lease Net Mark-up / Return Income after depreciation Provisions against loans and advances Provision for diminution in value of investments Bad debts written off directly Net Mark-up / Return Income after provisions NON-MARK-UP INCOME Fee.294 1.544.548 575.491 12.823 (47.973 70 575.156 1.338 64.274 846.206 1.488 82.743 123.138 2.478 17.479.037.687 185.Mark-up Income NON-MARK-UP EXPENSES Administrative expenses Other charges Total Non.204) 74.829.ANNEXURE .

Annual Report 2009 DR. but significant improvement still awaited: 1. We are of the opinion that the activities and transactions performed by Bank Alfalah Islamic Banking Group During the year 2009. We performed the necessary review of documentation. in whole. Shariah Scholars have allowed conventional insurance in the absence of its Islamic alternate. which is appreciable and reflects the strong commitment of Share Holders and Management towards Islamic Banking. three Takaful companies are providing their services.619. Though Bank Alfalah Islamic Banking Group is providing training to their staff at NIBAF. KHALIL AHMAD AAZAMI SHARIAH ADVISOR BANK ALFALAH ISLAMIC BANKING GROUP DATED: February 11. During the year an amount of PKR 46. On the Asset Side Bank Alfalah Islamic Banking Group should now focus on real Shirkah and Modaraba that are the nucleus of the Islamic Banking. Allah Knows The Best. May Allah bless and guide us as He has done since the inception of Bank Alfalah Islamic Banking Group. Bank should also initiate towards customer awareness program in the form of seminars and workshops regarding Islamic Banking and its products. 3. Bank Alfalah Islamic Banking Group has developed flow charts. The allocation of fund. procedure and transactions on test basis in both Asset and Liability sides. profit ratio and distribution of profit were in accordance with Shariah Principles. 4. 2. However. now in Pakistan. 2010 92 . i. I realized that the Bank Alfalah Islamic Banking Group need to establish in house setup to train its staff in various areas of Islamic Banking. Side with monthly profit payments facilitating the depositors. and make us successful in this world and Hereafter. however.000/was disbursed to the charitable avenues. Particularly it should be ensured that new hired staff should first be sent to an introductory course in Islamic Banking before inducting them to their functions. therefore. we need considerable improvement in following areas which have been mentioned in previous report also. Alhamdollilah. determination of weightages.has been transferred to the Charity Account and an amount of PKR 73. Finally we would like to highlight that Bank Alfalah Islamic Banking Group despite of a division of conventional bank holds 2nd largest Islamic Banking operation among the nineteen full fledge Islamic Banks / Divisions in Pakistan.SHARIAH ADVISOR'S REPORT We have carried out Shariah Audit in Bank Alfalah Islamic Banking Group to' check the Shariah Compliance of the overall transactions executed during the period 2009.851. In view of its rapidly growing branch network.638/. process flows and checklists of each Asset Side Product and also introduced some new products on Liability.e. Bank Alfalah Islamic Banking Group should speed up the shifting process of its portfolio from insurance to Takaful. are in compliance with Shariah Principles and guidelines provided by Shariah Advisor and State Bank of Pakistan. Takaful.

Consolidated Financial Statements of BANK ALFALAH LIMITED and Subsidiary Company .

2010 Karachi Annual Report 2009 101 94 . based on 38 branches audited by us and the returns referred to above received from the branches which have been found adequate for the purposes of our audit. except for 38 branches. F. on a test basis. is based solely on the report of such auditors. their cash flows and changes in equity for the year then ended in accordance with approved accounting standards as applicable in Pakistan. present fairly the financial position of Bank Alfalah Limited and its subsidiary company as at December 31. Ferguson & Co. evidence supporting the amounts and disclosures in the financial statements. 2009 and the results of their operations. the consolidated financial statements examined by us. These standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of any material misstatement.AUDITORS' REPORT TO THE MEMBERS We have audited the annexed consolidated financial statements comprising Consolidated Balance Sheet of Bank Alfalah Limited and its subsidiary company. Chartered Accountants Engagement Partner: Salman Hussain Dated: March 16. 2009 and the related Consolidated Profit and Loss Account. Consolidated Cash Flow Statement and Consolidated Statement of Changes in Equity together with the notes forming part thereof (here-in-after referred to as the 'Consolidated Financial Statements'). evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion. An audit also includes assessing the accounting policies and significant estimates made by management. Consolidated Statement of Comprehensive Income. We conducted our audit in accordance with the auditing standards as applicable in Pakistan. The financial statements of the subsidiary company were audited by another firm of Chartered Accountants and our opinion in so far as it relates to the amounts included for such company. as well as. These consolidated financial statements are the responsibility of the Holding Company's management. Alfalah Securities (Private) Limited as at December 31. A. In our opinion. These consolidated financial statements include unaudited certified returns from the branches. Our responsibility is to express an opinion on these consolidated financial statements based on our audit. for the year then ended. We have also expressed a separate opinion on the separate financial statements of Bank Alfalah Limited. which have been audited by us and 7 branches audited by auditors abroad. An audit includes examining.

492 14.752 14.504.833 367.079 18.727.285 191.315.294.389 7.017.729.166.169 17.195 13.774 10.086 349.995.764 2.504.195 32.615.021.714.602 3.491.687.278.500 76.255.969 1.CONSOLIDATED BALANCE SHEET AS AT DECEMBER 31.927 14.435 99.883.net of tax CONTINGENCIES AND COMMITMENTS 6 7 8 9 10 11 12 35.496 389.459 208.011.031 14. 101 95 Annual Report 2009 Chief Executive Officer Director Director Chairman .281 11.116 21.485 7.144 20.473 (23.204 16.552.653.473 1.584.743.336 13.267 3.395.925 3.571.489 332.570.438 188.612.281 14.722.921 324.671.181 12.281 2.000 3.091.682.563 3.358 774.345.671.056.682.247 300.454 14. 2009 Note 2009 2008 (Rupees in ‘000) ASSETS Cash and balances with treasury banks Balances with other banks Lendings to financial institutions Investments Advances Fixed assets Deferred tax assets Other assets LIABILITIES Bills payable Borrowings Deposits and other accounts Sub-ordinated loans Liabilities against assets subject to finance lease Deferred tax liabilities Other liabilities NET ASSETS REPRESENTED BY Share capital Reserves Share in share premium of associate Unappropriated profit Minority Interest Surplus on revaluation of assets .072 21.279.587.883.342 21.246 10.846.615.079 3.071.485 13 14 15 16 17 18 19 20 21 22 The annexed notes 1 to 45 and Annexures I and II form an integral part of these consolidated financial statements.452.926) 18.440 16.379.766.572.056 1.947.025 22.

904) 31.623 1.451.22 27 28 19.442.202.247.431 (1.900) 208.114.346.922.904) (Rupees) 28.817 3.506. 2009 Note 2009 2008 (Rupees in ‘000) Mark-up / return / interest earned Mark-up / return / interest expensed Net mark-up / interest income Provision against loans and advances Provision for diminution in value of investments Bad debts written off directly Net mark-up / interest income after provisions Non mark-up / interest income Fee.749 Basic / diluted (loss) / earning per share 31 (0.860.488 277.361) (85.233 12.213.454 11.037 287.052 3.954 (1.619 28.878 10.224 122.298 3.461.236) 437.462 2.558 1.071.749 26 9.483 535.373 11.019.326 (1.5 9.595 2. Annual Report 2009 Chief Executive Officer Director Director Chairman 96 101 .054 9.681 2.752 20.035. commission and brokerage income Dividend income Income from dealing in foreign currencies Gain on sale of securities Unrealized gain / (loss) on revaluation of investments classified as held for trading Other income Total non-mark-up / interest income Non mark-up / interest expenses Administrative expenses (Reversal) / provision against off-balance sheet obligations Other provisions Other charges Total non-mark-up / interest expenses Share of loss of associates Extra ordinary / unusual items Profit before taxation Taxation .758 10.237 4.484 79.373 11.157 10.220) 211.160 (537.140 1.304.Current .515.422) 1.905.554.900 (811.568 (97.674) 181.011 207.Prior years Share of tax of associates (Loss) / profit after taxation (Loss) / profit attributable to: Equity holders of the parent Minority interests 24 25 10.Deferred .801 5.211 1.732 690.582 271.248.197 1.017.607 59.709.046) 2.08) 0.934 1.741.556.997 1.914 6.795 (26.419) 258.664 1.009.798 (182.473 1.954.151.930 24.878 914.CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED DECEMBER 31.976.344.20 10.059 28.904) (97.306.595.603) (295.393.6 35.912 7.401) (179.2 29 30 (97.03 The annexed notes 1 to 45 and Annexures I and II form an integral part of these consolidated financial statements.845 424.845.

506 144. Chief Executive Officer Director Director Chairman 101 97 Annual Report 2009 .904) 2. it has not been reflected in the Statement of Comprehensive Income. 2009 2009 2008 (Rupees in ‘000) Profit after taxation Other comprehensive income*: Exchange differences on translation of net investment in foreign branches Total comprehensive income for the year (97.CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED DECEMBER 31.712 * Surplus / deficit arising on revaluation of fixed assets and 'available for sale' securities is required to be shown separately below equity as 'surplus / deficit on revaluation of assets' in accordance with the requirements specified by the State Bank of Pakistan. The annexed notes 1 to 45 and Annexures I and II form an integral part of these consolidated financial statements. Accordingly.963 493.602 490.749 242.

479.970) 30.997.440.084 57.623.associated companies Dividend income received .350.878) 1.619 28.539 (4.360 48.991.101) 8.207 3.126) (23.500 (5.454.295) 113.041.000 (988) 3.934) 59.926 5.218.454.224 182.000) (7.041) 230.347.448) (3.853 (649.587.716) 5.488 277.815 6.602) 27.582 271.487.065 285.444 CASH FLOWS FROM OPERATING ACTIVITIES Profit before taxation Share of loss of associates Less: Dividend income Adjustments: Depreciation Amortisation Provision against loans and advances Provision for diminution in value of investments (Reversal) / provision against off-balance sheet obligations Provision against other assets Unrealized (gain) / loss on revaluation of investments classified as held for trading Bad debts written-off directly Gain on sale of fixed assets Provision for gratuity (Increase) / decrease in operating assets Lendings to financial institutions Held-for-trading securities Advances Other assets Increase / (decrease) in operating liabilities Bills payable Borrowings Deposits and other accounts Other liabilities Gratuity paid Income tax paid Net cash generated from operating activities CASH FLOWS FROM INVESTING ACTIVITIES Net investments in available-for-sale securities Net investments in held-to-maturity securities Investment in associated companies Dividend income received .839) 2.489.716.376.304.703 1.664 811.621 (705.419) 258.236 (207.522 (11. 2009 Note 2009 2008 (Rupees in ‘000) 437. Chief Executive Officer 101 98 Director Director Chairman .255.648 106.819 6.035.713.220 (287.411 242.800) 490.352) (1.687.607 (1.013.064 (25.605.817 (43.237.997 1.557.211 1.880.102) 376.348 The annexed notes 1 to 45 and Annexures I and II form an integral part of these consolidated financial statements.676 1.674 24.822.052) (7.947.173 (3.484 (1.other than associated companies Investments in fixed assets Proceeds from sale of fixed assets Net cash (used in) / generated from investing activities CASH FLOWS FROM FINANCING ACTIVITIES Issuance of sub-ordinated loans Redemption of sub-ordinated loans Issuance of right shares Dividend paid Payment against lease obligation Net cash generated from / (used in) financing activities Exchange difference on translation of the net investments in foreign branches Increase in cash and cash equivalents Cash and cash equivalents at beginning of the year Annual Report 2009 Cash and cash equivalents at end of the year 32 61.765.298 (80.398.CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED DECEMBER 31.904 57.562.442.218) 13.197) 1.039) (243.963 8.743) (15.000.444 211.601) 189.227.582.793) (1.322.021 212.395.212) (7.631.920) (686.604.114.548 (1.564) 19.422 28.111) (1.177 (22.477.506 3.831 2.109 (142.002) 41.553 1.226.477 519.510.587.818 66.703 (16.619 (189.344 12.799 20.229.582.046 7.368 2.732) 142.279.904.113 6.689) (975.352 5.625 (196.442 21.901.345) 314.661 3.699.926) (1.

021 (975.058 4.net of tax Transfer to statutory reserve Issue of right shares Transfer to reserve for issue of bonus shares Issue of bonus shares for the year ended December 31.495. 2008 @ 12.000) - 578.499.000) (1.CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED DECEMBER 31.758 24.997.775 87.499. 1962.404. 2008 Changes in equity for 2008 Comprehensive income for the year ended December 31.752 1.5.079 (a) This represents reserve created under section 21(i)(a) of the Banking Companies Ordinance.473 - 144. 2009 Share Capital Statutory Reserve for Exchange Unappro.063 (1.696 3.Share in share Total Reserve issue of Bonus Translation priated Profit premium of Minority Interest (a) associate Reserve (b) Shares --------------------------------------------------------------------------(Rupees in ' 000)-------------------------------------------------------------------------Share Premium 2.602 24.046 14.615.000 (1.260 - 490.983 Balance at January 1. 2009 6.499.563 - 179.473 - (975.499.1.615.500. The annexed notes 1 to 45 and Annexures I and II form an integral part of these consolidated financial statements.063) (23.net of tax Loss attributable to minority shareholders Transfer to statutory reserve Final cash dividend for the year ended December 31. 2007 declared subsequent to the year end at Rs.767.063 13.562.904) 24.063) - 242.995.495. 2008 Transfer from surplus on revaluation of fixed assets . (b) As more fully explained in note 10.459 million) as at December 31.035 1.488 million (2008: Rs.1 to these consolidated financial statements balance of Rs.491.000) 1.473 26.926) 1.407) (1.671.960.963 - 28.327. 2009 Transfer from surplus on revaluation of fixed assets . 404.5% Balance at December 31.000 - 2.727.046) - 1.5 per share Transfer to reserve for issue of bonus shares Issue of bonus shares Balance at December 31.527 (97.504.795 24.500 18.442 1.696 (179.407 2.586 (26.500 1.631 1.586 (260.588.997.260) - (26. 2009 representing additional profit arising from availing FSV benefit for determining provisioning requirement is not available for the purposes of distribution of dividend to shareholders.000 - - 260.000 7.506 820. Chief Executive Officer Director Director Chairman 101 99 Annual Report 2009 . 1.495.615.046) - 519.281 3.000) 14. 2008 Changes in equity for 2009 Comprehensive income for the year ended December 31.495.

It commenced its banking operations on November 01. Subsidiary companies are consolidated from the date on which more than 50% of voting rights are transferred to the Group or power to control the company is established and are excluded from consolidation from the date of disposal. 1. the State Bank of Pakistan has issued various circulars from time to time. 2. 1992. Building.55 percent 40. 2003 with registered office in Karachi.56 percent 40.22 percent Warid Telecom (Private) Limited has been classified as an associate due to significant influence exercised through the Bank's nominated Director and it is also one of the Group Companies. 1962 and is operating through 253 conventional banking branches including 4 sub branches (2008: 226 branches including 2 sub branches).40 percent 66. Subsidiary Company . I. The principal objective of the company is to undertake the business of a brokerage house.Alfalah Securities (Private) Limited .06 percent 54. after eliminating material inter branch transactions / balances. Key financial figures of the Islamic Banking branches are disclosed in Annexure II to these financial statements."the Group".22 percent 8. 2 2. 2009 1 1.76 percent 20 percent 30 percent 28. The financial results of the Islamic banking branches have been consolidated in these financial statements for reporting purposes. 2003. I. Chundrigar Road. Lahore and Islamabad Stock Exchanges. 101 100 . The Bank is engaged in banking services as described in the Banking Companies Ordinance.NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31. Permissible form of trade-related modes of financing includes purchase of goods by banks from their customers and immediate resale to them at appropriate mark-up in price on deferred payment basis.42 percent 96.1 BASIS OF PRESENTATION In accordance with the directives of the Federal Government regarding the shifting of the banking system to Islamic modes. Pakistan.2 In addition the Group maintains investments in the following associates: 2009 2008 Percentage of shareholding Warid Telecom (Private) Limited Wateen Telecom Limited Alfalah Insurance Company Limited Alfalah GHP Value Fund Alfalah GHP Income Multiplier Fund Alfalah GHP Islamic Fund Alfalah GHP Investment Management Limited 8. Karachi and is listed on the Karachi.76 percent 20 percent 30 percent 15.Holding Company and its subsidiary company . The Bank's registered office is at B. Alfalah Securities (Private) Limited was incorporated on September 23.Bank Alfalah Limited (the Bank) Bank Alfalah Limited (the Bank) is a banking company incorporated in Pakistan on June 21.05 percent 92. 7 overseas branches (2008: 7 branches). 1984. 1992 as a public limited company under the Companies Ordinance. but are restricted to the amount of facility actually utilized and the appropriate portion of mark-up thereon.2 Annual Report 2009 Basis of consolidation The consolidated financial statements include the financial statements of Bank Alfalah Limited .76 percent holding The Bank has invested in 76 percent (December 2008: 76 percent) shares of Alfalah Securities (Private) Limited. 60 Islamic banking branches (2008: 48 branches) and 1 offshore banking unit (2008: 1 unit).A.1 STATUS AND NATURE OF BUSINESS The "Group" consists of: Holding Company . The purchases and sales arising under these arrangements are not reflected in these consolidated financial statements as such. The company obtained corporate membership from Karachi Stock Exchange (Guarantee) Limited on November 24.

recording of inventories. 1984. ijarah transactions entered into by the Bank during the current period are required to be accounted for as follows: Mujir (lessors) shall present the assets subject to ijarah in their balance sheet according to the nature of the asset. invoicing of goods. 3 3. In accordance with IFAS 2. The State Bank of Pakistan has deferred the applicability of International Accounting Standard (IAS) 39.g. interpretations and amendments to published approved accounting standards that are effective in the current year a) Islamic Financial Accounting Standard 2: "Ijarah" (effective from January 1. 101 . However. the Group has accounted for all ijarah disbursements made in 2009 in line with the requirements set out in IFAS 2. the Securities and Exchange Commission of Pakistan (SECP) has notified the Islamic Financial Accounting Standard 1. 1984. 2002 till further instructions.standards. Material intra-group balances and transactions have been eliminated. 2009. In addition. 'Investment Property' for Banking Companies through BSD Circular No. Accordingly. 3. investments have been classified and valued in accordance with the requirements prescribed by the State Bank of Pakistan through various circulars. "Leases".2 Changes in accounting policies and disclosures . 1962 and the directives issued by State Bank of Pakistan (SBP). such disbursements were reflected in the financial statements as a finance lease in accordance with IAS 17. International Accounting Standard 27. 2009).NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS - The assets and liabilities of subsidiary companies have been consolidated on a line by line basis and the carrying value of investments held by the Bank is eliminated against the subsidiaries' share capital and pre-acquisition reserves in the consolidated financial statements. IFAS 1 was effective for financial periods beginning on or after January 1. Consolidated and Separate Financial Statements (Revised) effective for financial period beginning from January 1. The standard has not been adopted by stand alone Islamic branches of conventional banks pending resolution of certain issues e. As the requirements of IFAS 2 have only been applied to ijarah contracts entered into on or after January 1. Annual Report 2009 Pursuant to IBD Circular No. 2009 issued by the State Bank of Pakistan. 'Financial Instruments: Recognition and Measurement' and International Accounting Standard (IAS) 40. the provisions of and directives issued under the Companies Ordinance. Murabaha issued by the Institute of Chartered Accountants of Pakistan. unless another systematic basis is more representative of the time pattern in which the benefit of the use derived from the leased asset is diminished. 10 dated August 26. Banking Companies Ordinance.1 STATEMENT OF COMPLIANCE These consolidated financial statements have been prepared in accordance with approved accounting standards as applicable in Pakistan. Minority interests are that part of the net results of operations and of net assets of subsidiary companies attributable to interests which are not owned by the Bank. concurrent application with other approved accounting standards in place for conventional banks. therefore. In case the requirements differ. including depreciation on the assets given on ijarah incurred in earning the ijarah income shall be recognised as an expense. Ijarah income shall be recognised in income on an accrual basis as and when the rental becomes due. 1 dated January 27. Approved accounting standards comprise of such International Financial Reporting Standards issued by the International Accounting Standards Board as are notified under the Companies Ordinance. 1962 and the directives issued by SBP prevail. Banking Companies Ordinance. Previously. 1984. - Currently the losses applicable to the minority interest in Alfalah Securities (Private) Limited exceed the minority interest in the subsidiary's equity. etc. the requirements of these standards have not been considered in the preparation of these financial statements. Pakistan Banks Association and Modaraba Association of Pakistan have taken up the issue with the SBP and the SECP. distinguished from the assets in own use. provisions of and directives issued under the Companies Ordinance. the adoption of this standard did not require any restatement. In addition the Securities and Exchange Commission of Pakistan has also deferred the applicability of International Financial Reporting Standard 7. the excess has been allocated to the equity holders of the parent entity. Financial Instruments: Disclosures on Banking Companies vide SRO 411(I) / 2008 till further orders. Costs. requires that the profit or loss and each component of other comprehensive income is attributable to the equity holders of the parent entity and to the minority interest (referred to as non-controlling interest) even if this results in the non-controlling interests having a deficit balance. 2010. 2006.

‘Presentation of financial statements’ . The amendment clarifies that a plan amendment that results in a change in the extent to which benefit promises are affected by future salary increases is a curtailment. e) IAS 36 (Amendment). The management of the Group believes that this amendment does not have any impact on the Group's consolidated financial statements. 2009 and does not affect qualifying assets for which the commencement date for capitalisation is earlier than the transition date.NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS b) IAS 1 (Revised). disclosures equivalent to those for value-in-use calculation should be made. Further. ‘Impairment of assets’ (effective from January 1. while an amendment that changes benefits attributable to past service gives rise to a negative past service cost if it results in a reduction in the present value of the defined benefit obligation. Comparative information has been represented so that it is also in conformity with the revised standard. - - The Group has adopted the aforementioned amendments from January 1. 2009. and has accordingly changed its accounting policy to comply with the new requirements of IAS. Accordingly. “Borrowing Costs”. c) IAS 23 (Amendment) 'Borrowing Costs' (effective from January 1. the change in accounting policy has had no effect on the financial statements of the Group for the current or prior years. Previously. Annual Report 2009 f) IAS 38 (Amendment). IAS 19 has been amended to be consistent. The management of the Group believes that this amendment does not have any impact on the Group's consolidated financial statements. borrowing costs were recognised as an expense in the period in which they were incurred. 2009. This standard requires an entity to capitalise borrowing costs directly attributable to the acquisition. The option of immediately expensing those borrowing costs has been removed. The Group did not have any qualifying assets whose commencement date for capitalisation was on or after January 1. The Group has adopted the aforementioned amendments from January 1. they are required to present a restated statement of financial position as at the beginning of the comparative period. As per the new requirements. ‘Employee benefits’ (effective from January 1. ‘Provisions. The amended standard states that a prepayment may only be recognised in the event that payment has been made in advance of obtaining right of access to goods or receipt of services. construction or production of a qualifying asset (one that takes a substantial period of time to get ready for use or sale) as part of the cost of that asset. The distinction between short term and long term employee benefits will be based on whether benefits are due to be settled within or after 12 months of employee service being rendered. The management of the Group believes that presently this amendment does not have any impact on the Group's consolidated financial statements. 2009). The revised standard prohibits the presentation of items of income and expenses (that is. which are not recognised. 2009). 2009. d) IAS 19 (Amendment). The Group has adopted the aforementioned amendments from January 1. All nonowner changes in equity are required to be shown in a performance statement. ‘Intangible assets’ (effective from January 1. 2009). The Group has applied IAS 1(Revised) during the current period. 2009. The Group has elected to show elements of comprehensive income in a separate statement. IAS 37. 2009). The definition of return on plan assets has been amended to state that plan administration costs are deducted in the calculation of return on plan assets only to the extent that such costs have been excluded from measurement of the defined benefit obligation. IAS 23 (Amendment) applies to qualifying assets for which the commencement date for capitalization is on or after January 1. where fair value less costs to sell is calculated on the basis of discounted cash flows. It requires non-owner changes in equity to be presented separately from owner changes in equity. ‘non-owner changes in equity’) in the statement of changes in equity. 101 102 . requires contingent liabilities to be disclosed. The change in presentation has not affected the net assets of the Group for either the current or any of the prior periods and there is no impact on the earnings per share. in addition to the current requirement to present statements of financial position at the end of the current period and comparative period. During the year the Group has changed its accounting policy in respect of borrowing costs to comply with the requirements of IAS 23 (Amendment). but entities can choose whether to present one performance statement (the statement of comprehensive income) or two statements (the income statement and statement of comprehensive income). contingent liabilities and contingent assets'. Where entities restate or reclassify comparative information. the definition of borrowing cost has been amended so that interest expense is calculated using the effective interest method defined in IAS 39 'Financial instruments: Recognition and Measurement'. was issued in September 2007.

2008). For example. IFRS 8 replaces IAS 14. In addition. IFRIC Interpretation 18 ‘Transfers of assets from customers’ was issued in January 2009 and is applicable for financial years beginning on or after July 1. 2009. It addresses how the non-cash dividends distributed to the shareholders should be measured. The Group will apply IFRS 3 (revised) prospectively to all business combinations from January 1. with contingent payments classified as debt subsequently re-measured through the income statement. segments are reported in a manner that is more consistent with the internal reporting provided to the chief operating decision-maker. 2010: IFRIC Interpretation 17 'Distribution of Non-cash Assets to Owners' was issued in November 2008 and is applicable for financial years beginning on or after July 1. 4 dated February 17. The difference between the dividend paid and the amount carried forward of the net assets distributed should be recognised in profit and loss. 2006. A dividend obligation is recognised when the dividend was authorised by the appropriate entity and is no longer at the discretion of the entity. interpretations and amendments to published approved accounting standard that are not yet effective The following standards. 'Segment reporting'. on an acquisition by acquisition basis. “Business Combinations” applicable for financial years beginning on or after July 1. Accordingly. 'Revised Forms of Annual Financial Statements'. 2009).NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS g) IFRIC Interpretation 13. The interpretation also applies to agreements in which an entity receives cash from a customer when that amount of cash must be used only to construct or acquire an item of property. The management of the Group believes that as the SBP has defined the segment categorisation in the above mentioned circular. the management believes that the afore-mentioned interpretation is not expected to have any impact on the Group's consolidated financial statements. 2010. The standard also specifies the accounting when control is lost. plant and equipment by entities that receive such transfers from their customers. and the entity must then use that item to provide the customer with ongoing access to supply of goods and/or services. “Customer Loyalty Programmes” (effective from financial years beginning on or after July 1. The new standard requires a 'management approach'. 2009. Additional disclosures are to be made if the net assets being held for distribution to owners meet the definition of a discontinued operation. the SBP requirements prevail over the requirements specified in IFRS 8. 2010. h) There are other amendments to the approved accounting standards and interpretations that are mandatory for accounting periods beginning on or after January 1. amendments and interpretations to existing standards have been published and are mandatory for the Group's accounting periods beginning on or after January 1. If a third party supplies the awards and the entity is collecting the consideration on its own account. 2006. 2009 continues to apply the acquisition method to business combinations. It clarifies how to account for transfers of items of property. All acquisition related costs should be expensed. with some significant changes. all payments to purchase a business are to be recorded at fair value at the acquisition date. any remaining interest in the entity is re-measured to fair value. the arrangement is a multi-element arrangement and the consideration receivable is allocated between the components of the arrangement using fair values. Standards. The Group will apply IAS 27 (Revised) prospectively to transactions with non-controlling interests from January 1. under which segment information is presented on the same basis as that used for internal reporting purposes. segment information disclosed in these financial statements is based on the requirements laid down by SBP.3 IFRS 8 'Operating segments'. All banking companies in Pakistan are required to prepare their annual financial statements in line with the format prescribed under BSD Circular No. At present. 2009 but are considered not to be relevant or to have any significant effect on the Group's operations and are therefore not detailed in these consolidated financial statements. The management of the Group believes that the adoption of this interpretation has not made any material impact on the consolidated financial statements. (effective from January 1. Revised IFRS 3. to measure the non-controlling interest in the acquiree either at fair value or at the non-controlling interest’s proportionate share of the acquiree’s net assets. plant and equipment.4 IAS 27 (Revised). As per IFRIC 13 where goods or services are sold together with a customer loyalty incentive. 3. 101 103 . and a gain or loss is recognised in profit or loss. the management believes that the afore-mentioned interpretation is not expected to have any impact on the Group's consolidated financial statements. This dividend obligation should be recognised at the fair value of the net assets to be distributed. effective from the accounting year ended December 31. Annual Report 2009 3. 2009 requires the effects of all transactions with non-controlling interests to be recorded in equity if there is no change in control and these transactions will no longer result in goodwill or gains and losses. There is a choice. it shall measure its revenue as the gross consideration allocated to the award credits and recognise the revenue when it fulfils its obligations in respect of the awards. At present. “Consolidated and Separate Financial Statements” applicable for financial years beginning on or after July 1. 2009. The Group has adopted IFRIC Interpretation 13 from January 1.

3. balances with other banks and call lendings for the purpose of the cash flow statement. which is the Group's functional and presentation currency. Investments purchased subject to commitment to resell them at a future date (reverse repo) are not recognized. Annual Report 2009 Investments sold under repurchase agreements (repo) continue to be recognized in the balance sheet and are measured in accordance with the accounting policy for investments. 5. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances.4 and 10) iii) income taxes (notes 5. The difference between the purchase / (sale) and resale / (repurchase) consideration is recognized on a time proportion basis over the period of the transaction and is included in mark-up / return / interest earned or expensed. or in the period of revision and future periods if the revision affects both current and future periods.2 Sale and repurchase agreements The Group enters into arrangements for purchase / (sale) of investments under agreements to resell / (repurchase) investments at a certain date in the future at a fixed price.9 and 30) iv) accounting for defined benefit plan (notes 5. amendments and interpretations that are mandatory for accounting periods beginning on or after January 1. 5. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period. It also requires management to exercise judgement in application of its accounting policies.1 BASIS OF MEASUREMENT Accounting convention These consolidated financial statements have been prepared under the historical cost convention except that certain fixed assets are stated at revalued amounts. 4.3 and 9) ii) classification and provisioning against advances (notes 5. 101 104 . 2010 or later periods but are considered not to be relevant or to have any significant effect on the Group's operations and are therefore not disclosed in these consolidated financial statements.5 Early adoption of standards The Group did not early adopt new or amended standards in 2009.10 and 35) 5 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. The consolidated financial statements are presented in Pakistani Rupees. The proceeds received are reported in borrowings. The amounts paid are recognized as lendings to financial institutions.2 Critical accounting estimates and judgements The preparation of financial statements in conformity with approved accounting standards as applicable in Pakistan requires management to make judgements. These estimates and assumptions are reviewed on an ongoing basis.NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS There are certain other new standards. and held for trading and available for sale investments and derivative financial instruments are measured at fair value. The amounts are rounded to nearest thousand.1 Cash and cash equivalents Cash and cash equivalents comprises cash and balances with treasury bank. estimates and assumptions that affect the reported amounts of assets and liabilities and income and expenses. 4 4. Significant accounting estimates and areas where judgements were made by the management in the application of accounting policies are as follows: i) classification and provisioning against investments (notes 5. as the Group does not obtain control over the assets.

Investments other than those categorised as 'held for trading' are initially recognised at fair value which includes transaction costs associated with the investment. the cumulative loss that has been recognised directly in deficit on revaluation of securities on the consolidated balance sheet below equity is removed therefrom and recognised in the consolidated profit and loss account. In accordance with the requirements of the State Bank of Pakistan. Investments classified as 'held for trading' are initially recognised at fair value and transaction costs are expensed in the consolidated profit and loss account. Break-up value of equity securities is calculated with reference to the net assets of the investee company as per the latest available audited financial statements. dealers margin or are securities included in a portfolio in which a pattern of short-term profit taking exists.3 Investments The Group classifies its investments as follows: Held for trading These are investments. Gains or losses on disposals of investments during the year are taken to the consolidated profit and loss account. the investment in associates are initially recognised at cost and the carrying amount of investment is increased or decreased to recognise the investor's share of the post acquisition profits or losses in income and its share of the post acquisition movement in reserves is recognised in reserves. which do not fall under the 'held for trading' and 'held to maturity' categories. For investments classified as held to maturity. Investments in associates where the Group has significant influence are accounted for using the equity method of accounting. Associates Associates are all entities over which the Group has a significant influence but not control.NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS 5. Impairment loss in respect of investments classified as available for sale (except term finance certificates) and held to maturity is recognised based on management's assessment of objective evidence of impairment as a result of one or more events that may have an impact on the estimated future cashflows of the investments. Under the equity method of accounting. Surplus / (deficit) arising on revaluation of quoted securities which are 'held for trading' is taken to the profit and loss account. In accordance with the requirements specified by the State Bank of Pakistan. the impairment loss is recognised in the consolidated profit and loss account. which is the date at which the Group commits to purchase or sell the investments. A significant or prolonged decline in fair value of an equity investment below its cost is also considered an objective evidence of impairment. Available for sale These are investments. interest rate movements. other than those in subsidiaries and associates. excluding investments in subsidiaries and associates are valued at the lower of cost and break-up value. Unquoted equity securities. Provision for diminution in the value of term finance certificates is made as per the Prudential Regulations issued by the State Bank of Pakistan. Increase / decrease in share of profits and losses of associates is accounted for in the consolidated profit and loss account. 101 105 Annual Report 2009 . Held to maturity These are investments with fixed or determinable payments and fixed maturities and the Group has the positive intent and ability to hold them till maturity. The Group applies the equity accounting method for its investment in the mutual funds managed by Alfalah GHP Investment Management Limited. Surplus / (deficit) arising on revaluation of securities classified as 'available for sale' is taken to a separate account shown in the balance sheet below equity. quoted securities other than those classified as 'held to maturity' are subsequently remeasured to market value. which are either acquired for generating a profit from short-term fluctuations in market prices. In case of impairment of available for sale securities. All purchases and sales of equity investments that require delivery within the time frame established by regulation or market convention are recognised at trade date. investments classified as 'held to maturity' are carried at amortized cost.

if any. Surplus arising on revaluation is credited to the surplus on revaluation of fixed assets account. if any. Depreciation on additions is charged from the date on which the assets are available for use and ceases on the date on which they are disposed of. The surplus on revaluation of fixed assets to the extent of incremental depreciation charged on the related assets is transferred to unappropriated profit. it sells it to the client a cost plus the profit agreed upon in the promise. 1984. In principle on the basis of an undertaking (promise to purchase) from the client. Thereafter. The depreciation charge for the year is calculated after taking into account residual value. if appropriate. if any. Office premises (which includes land and buildings) is stated at revalued amount less accumulated depreciation. if any. Such intangible assets are amortized using the straight-line method over their estimated useful lives. Gain and losses on disposal of fixed assets are taken to the profit and loss account except that the related surplus on revaluation of fixed assets (net of deferred taxation) is transferred directly to unappropriated profit. only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. Historical cost includes expenditure that is directly attributable to the acquisition of the items. useful lives and depreciation method are reviewed and adjusted.5 Fixed assets Tangible Assets Fixed assets except office premises are shown at historical cost less accumulated depreciation and accumulated impairment losses. 5. depreciation is charged over the economic life of the asset using straight line basis.2 to these financial statements. Subsequent costs are included in the asset's carrying amount or are recognised as a separate asset. However. 101 106 . Deficit arising on subsequent revaluation of fixed assets is adjusted against the balance in the above mentioned surplus account as allowed under the provisions of the Companies Ordinance. as appropriate. Intangible assets having an indefinite useful life are stated at acquisition cost. Provisions pertaining to overseas advances are made in accordance with the requirements of regulatory authorities of the respective countries. Specific and general provisions are made in accordance with the requirements of the Prudential Regulations issued by the State Bank of Pakistan from time to time. if any. Assets under Ijarah are depreciated over the period of lease term. Murabaha Murabaha to the purchase orderer is a sale transaction wherein the first party (the Bank) sells to the client / customer a shariah compliant asset / goods for cost plus a pre-agreed profit. The useful lives and amortization method are reviewed and adjusted. Annual Report 2009 Intangible assets Intangible assets having a finite useful life are stated at cost less accumulated amortization and accumulated impairment losses. However. Ijarah Assets leased out under 'Ijarah' are stated at cost less accumulated depreciation and accumulated impairment losses. in the event the asset is expected to be available for re-ijarah.NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS 5. if appropriate at each balance sheet date. Advances are written off when there are no realistic prospects of recovery. Office premises are revalued by professionally qualified valuers with sufficient regularity to ensure that the net carrying amount does not differ materially from their fair value. the Bank purchases the goods / assets subject of the Murabaha from a third party and takes the possession thereof. Murabaha transactions are accounted for at gross receivable net of specific and general provisions. The residual values.4 Advances Loans and advances Loans and advances including net investment in finance lease are stated net of provisions against non-performing advances. The net provision made / reversed during the year is charged to profit and loss account and accumulated provision is netted-off against advances. Specific and general provisions against Pakistan operations are made in accordance with the requirements of the Prudential Regulations issued by the State Bank of Pakistan from time to time. Maintenance and normal repairs are charged to income as and when incurred. less impairment loss. at each balance sheet date. Depreciation is charged to income applying the straight-line method using the rates specified in note 11. the Bank can appoint the client as its agent to purchase the goods / assets on its behalf.

5. If any such indication exists. The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amounts of assets and liabilities using the tax rates enacted at the balance sheet date. Projected Unit Credit Method is used for the actuarial valuation.8 Impairment The carrying amount of assets is reviewed at each balance sheet date to determine whether there is any indication of impairment of any asset or group of assets.10 Employee benefits Defined Benefit Plan The Bank operates an approved funded gratuity scheme covering eligible employees whose period of employment with the Bank is five years or more. Impairment losses are recognized through the consolidated profit and loss account for any initial or subsequent write down of the non-current asset (or disposal group) to fair value less costs to sell. Current Current tax is the expected tax payable on the taxable income for the year using tax rates enacted at the balance sheet date and any adjustment to tax payable in respect of previous years. The Group also recognises a deferred tax asset / liability on the deficit / surplus on revaluation of fixed assets and securities. which is adjusted against related revaluation surplus to the extent that the impairment loss does not exceed the surplus on revaluation of that asset.7 Non-Current Assets Held for Sale The Group classifies a non-current asset (or disposal group) as held for sale if its carrying amount will be recovered principally through a sale transaction rather than through continuing use.NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS 5. Subsequent gains in fair value less costs to sell are recognized to the extent they do not exceed the cumulative impairment losses previously recorded.6 Capital work in progress Capital work in progress is stated at cost less impairment losses. Contributions to the fund are made on the basis of actuarial recommendations. where the timing of the reversal of the temporary difference can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future. Deferred tax asset is reduced to the extent that it is no longer probable that the related tax benefits will be realized. Income tax expense is recognized in the profit and loss account except to the extent that it relates to items recognized directly in equity. in which case it is recognized in equity. A non-current asset is not depreciated while classified as held for sale or while part of a disposal group classified as held for sale. A non-current asset (or disposal group) held for sale is carried at the lower of its carrying amount and the fair value less costs to sell. 101 107 Annual Report 2009 . 5. Deferred Deferred tax is recognised using the balance sheet liability method on all temporary differences arising between the carrying amounts of assets and liabilities for financial reporting purposes and amounts used for the taxation purposes. 5. The resulting impairment loss is taken to the profit and loss account except for impairment loss on revalued assets. Actuarial gains / losses in excess of 10 percent of the higher of actuarial liabilities or plan assets at the end of the last reporting year are recognized over the average lives of employees.Income Taxes. 5. the recoverable amount of such assets is estimated and impairment losses are recognised immediately in the financial statements. if any. Deferred tax liability is not recognised in respect of taxable temporary differences associated with exchange translation reserves of foreign branches. Gratuity is payable to staff on completion of the prescribed qualifying period of service under the scheme. which is adjusted against the related surplus / deficit in accordance with the requirements of the International Accounting Standard 12 .9 Taxation Income tax expense comprises current and deferred tax. A deferred tax asset is recognized only to the extent that it is probable that future taxable profits will be available and the credits can be utilised.

Expected recoveries are recognised by debiting the customer’s account. construction or production of a qualifying asset (one that takes a substantial period of time to get ready for use or sale) is capitalised as part of the cost of that asset. Other provisions are recognized when the Group has a legal or constructive obligation as a result of past events. Borrowing costs that are directly attributable to the acquisition. Profit on murabaha transactions for the period from the date of disbursement to the date of culmination of murabaha is recognized immediately upon the later date. those premiums / discounts are amortised through the profit and loss account over the remaining maturity. The Bank has no further payment obligations once the contributions have been paid. documentation charges. Where debt securities are purchased at a premium or discount. Acceptances are accounted for as off balance sheet transactions and are disclosed as contingent liabilities and commitments. debt securities investments and profit on murabaha and musharika financing are recognised on a time proportion basis. The contributions are recognised as employee benefit expense when they are due. Commission on guarantees is recognised on time proportion basis. using the effective yield method. in accordance with the requirements of the Prudential Regulations of the State Bank of Pakistan and recognised on receipt basis. it is probable that an outflow of resources will be required to settle the obligation and a reliable estimate of the amount can be made. 5. Unrealised lease income and mark-up / return on non-performing advances are suspended. The Group expects most acceptances to be simultaneously settled with the reimbursement from the customers.12 Provisions Provision for guarantee claims and other off balance sheet obligations is recognised when intimated and reasonable certainty exists for the Group to settle the obligation. Lease financing / Ijarah Financing method is used in accounting for income from lease financing. Charge to profit and loss account is stated net-of expected recoveries. Gains / losses on termination of leased contracts. Profit on Murabaha is recognized on time apportioned basis. 5. Under this method. the unrealised lease income (excess of the sum of total lease rentals and estimated residual value over the cost of leased assets) is deferred and taken to income over the term of the lease period so as to produce a constant periodic rate of return on the outstanding net investment in the lease. b) Borrowing / deposit costs are recognised as an expense in the period in which these are incurred using effective mark-up / interest rate method to the extent that they are not directly attributable to the acquisition of or construction of qualifying assets. where necessary. front end fee and other lease income are recognized as income when they are realised. Dividend income is recognized at the time when the Group’s right to receive the dividend has been established. 101 108 .11 Borrowings / deposits and their cost a) Borrowings / deposits are recorded at the proceeds received. Provisions are reviewed at each balance sheet date and are adjusted to reflect the current best estimate.14 Revenue recognition Advances and investments Mark-up income on loans and advances. 5.NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS Defined Contribution Plan The Bank operates a recognised provident fund scheme for all its permanent employees to which equal monthly contributions are made both by the Bank and employees at the rate of 8. Ijarah income is recognized on an accrual basis as and when the rental becomes due. 5.33 percent of basic salary. commission and brokerage income except income from guarantees are accounted for on receipt basis.13 Acceptances Acceptances comprise undertakings by the Group to pay bills of exchange drawn on customers. commission and brokerage Fee. Annual Report 2009 Fee.

Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding for the effects of all dilutive potential ordinary shares. 5.NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS 5. after the balance sheet date. All derivative financial instruments are carried as assets where fair value is positive and as liabilities where fair value is negative.15 Foreign currency translation Functional and Presentation currency Items included in the financial statements are measured using the currency of the primary economic environment in which the Bank operates. 5. Forward contracts other than contracts with the State Bank of Pakistan relating to foreign currency deposits are valued at forward rates applicable to the respective maturities of the relevant foreign exchange contract.18 Dividend and appropriation to reserves Dividend and appropriation to reserves.17 Off-setting Financial assets and financial liabilities are off-set and the net amount reported in the financial statements only when there is a legally enforceable right to set-off the recognised amount and the Group intends either to settle on a net basis. Transactions and Balances Transactions in foreign currencies are translated to Pakistani rupees at the exchange rates ruling on the transaction date. Forward purchase contracts with the State Bank of Pakistan relating to foreign currency deposits are valued at the spot rate prevailing on the balance sheet date. 101 109 . Commitments Commitments for outstanding forward foreign exchange contracts are disclosed at contracted rates. The forward cover fee payable on such contracts is amortized over the term of the contracts. Any changes in the fair value of derivative financial instruments are taken to the profit and loss account. 5. or to realise the assets and to settle the liabilities simultaneously. except appropriations which are required under the law.16 Derivative Financial Instruments Derivative financial instruments are initially recognised at fair value on the date at which the derivative contract is entered into and subsequently remeasured at fair value using appropriate valuation techniques. are recognised as a liability in the Group's financial statements in the year in which these are approved. if any. Foreign Operations Assets and liabilities of foreign operations are translated into rupees at the exchange rate prevailing at the balance sheet date. Translation gains and losses arising on revaluations of net investment in foreign operations are taken to Exchange Translation Reserve in the statement of comprehensive income. 5. Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Bank by the weighted average number of ordinary shares outstanding during the year. The results of foreign operations are translated at average rate of exchange for the year. These are recognised in the profit and loss account on disposal.19 Earnings per share Annual Report 2009 The Group presents basic and diluted earnings per share (EPS) for its shareholders. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the profit and loss account. Income and expense items of such assets and liabilities are also off-set and the net amount is reported in the financial statements. Contingent liabilities / commitments for letters of credit and letters of guarantee denominated in foreign currencies are expressed in rupee terms at the exchange rates ruling on the balance sheet date.

debts (government.4 3.867.129.240. which is subject to risks and rewards that are different from those of other segments. underwriting.025 2.454 6. privatization. Geographical segments The Group operates in three geographical regions being: Pakistan Asia Pacific (including South Asia) Middle East Note 2009 2008 (Rupees in ‘000) 6 CASH AND BALANCES WITH TREASURY BANKS In hand Local currency (including in transit Rs.993. IPO and secondary private placements. real estate. lending and repos.236 5. syndication.776.025 2.497 11.20 Segment Reporting A segment is a distinguishable component of the Group that is engaged either in providing product or services (business segment).141 1.130 32.392.999. high yield). corporate finance.180 20.546 million) With State Bank of Pakistan in Local currency current account Foreign currency current account Foreign currency deposit account With other central banks in Foreign currency current account Foreign currency deposit account With National Bank of Pakistan in 6. The Bank's primary format of reporting is based on business segments.590. 114.503.399. guarantees.342 6. research. leasing. equity.2 6. 186. trust and estates investment advice. Retail Banking It includes retail lending and deposits. 3.059 1.687. trust and estates. banking services. brokerage debt and prime brokerage. Commercial banking Commercial banking includes project finance.637.387 million. 2008: Rs. commodities. Business segments Trading and sales It includes fixed income. trade finance. equity.973 3. private lending and deposits. Corporate finance Corporate banking includes services provided in connection with mergers and acquisition. own position securities. funding.128 Annual Report 2009 Local currency current account National Prize Bonds 101 110 .056.335.605.364 1.762 15. securitization. credit.738 2.1 6. 111.395 million. foreign exchanges. factoring. bills of exchange and deposits.089 4.984.3 13.565 million) Foreign currency (including in transit Rs.431 35. 2008: Rs. merchant / commercial / corporate cards and private labels and retail.NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS 5. lending.144.108.534 2. or in providing products or services within a particular economic environment (geographical segment). banking service. export finance.700 2.926 1.

396 14.00% per annum) with maturities upto July 2010 (2008: July 2009).940.947.3 Special cash reserve of 15% is required to be maintained with State Bank of Pakistan on FE-25 deposits as specified in BSD Circular No. 6.1 This represents funds deposited with various banks at profit rates ranging from 5.480.000 2.161.2 Particulars of lendings to financial institutions In local currency In foreign currencies 12.854.293. The balance is current by nature and on increase in the balance above a specified amount.2 7.1 7.584.710. 101 111 Annual Report 2009 .00% per annum).2 This includes amount held in Automated Investment Plans. 6.435 375. This section requires banking companies to maintain a local currency cash reserve in the current account opened with the SBP at a sum not less than such percentage of its time and demand liabilities in Pakistan as may be prescribed by SBP.500 8.25% per annum (2008: 10.500 3.067 6.3 This includes placements of funds generated through foreign currency deposits scheme (FE-25). These carry mark-up at rates ranging from 11.12% to 1.3 & 8.00% to 13.722.500 3.75% to 13.602 7. Profit rates on these deposits are fixed by SBP on a monthly basis.50% per annum) with maturities upto February 2010 (2008: April 2009).4% per annum).20% per annum (2008: Nil) and have a maturity period of upto February 2010 (2008: Nil). 14 dated 21 June. 8.927 607.315.763 3.4 Deposits with other central banks are maintained to meet their minimum cash reserves and capital requirements pertaining to the foreign branches of the Bank. During the year this deposit was not remunerated (2008: 0.00% to 19.1 These represent short term lendings to financial institutions at interest rates upto 13. 1956. Note 2009 2008 (Rupees in ‘000) 7 BALANCES WITH OTHER BANKS In Pakistan On current account On deposit account Outside Pakistan On current account On deposit account 768.396 11.340.45% to 7.4 3.NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS 6.133.40% per annum (2008: 14.287 8.367 8.185 21.961. 6.90% to 3.315.1 The local currency current account is maintained with the State Bank of Pakistan (SBP) as per the requirements of Section 36 of the State Bank of Pakistan Act.500 8. 8 LENDINGS TO FINANCIAL INSTITUTIONS Call money lendings Repurchase agreement lendings (Reverse Repo) 8. at interest rates ranging from 0.947.039 14.2 As per BSD Circular No. the Bank is entitled to earn interest from the correspondent banks at agreed upon rates.654. 7. 2008.435 3.039 2.315.62% per annum (2008: 0. cash reserve of 5% is required to be maintained with the State Bank of Pakistan on deposits held under the New Foreign Currency Accounts Scheme (FE-25 deposits).561 22.349 3. 9 dated 03 December.237.3 7. 7.950 12.3 These represent short-term lendings to financial institutions against investment securities.1 8. 2007.

039 4.041 3.411.645) 4.991.320 217 (153.151.907.119 9.159.619) 76.130 1.934 354.788.339 303.361 2.279.368 8.106.199 395.020.net Total investments 101 112 .net Annual Report 2009 Surplus / (Deficit) on revaluation of available-for-sale investments .295 316.755.714.590 586.461 129.900 53.199.907.701.967.096 87.240.313.710 9.442.076.237.374 99.388.518 1.711 (13.511.438 11.074 384.093 40.419 9.085.766 89.204 357.619) 71.696 62.274.937 4.039 4.221.341 13.027 129.788.714.696 62.153 99.4 Securities held as collateral against lendings to financial institutions 2009 Note Held by Bank 2008 Further Held by Further Total Total given as given as Bank collateral collateral ------------------------------------Rupees in '000-----------------------------------10.192 99.22 21.361 2.096 87.492 85.313 217 (204.563.726 277.027 129.511.600) 71.017.991.511.016 154.662 458.900 43.821 1.894 3.961.431 4.388.993 (50.192 89.521 11.492 59.281 5.641 562.20 (249.099.154 517.675.368 8.442.199 395.141 72.267 30.Unlisted Term Finance Certificates Sukuk Bonds Held-to-maturity securities Government Bonds Market Treasury Bills Pakistan Investment Bonds Term Finance Certificates Overseas Government Treasury Bills Pakistan Dollar Bond Credit Linked Note Overseas Bonds Preference Shares Sukuk Bonds Associates Warid Telecom (Private) Limited Wateen Telecom Limited Alfalah Insurance Limited Alfalah GHP Value Fund Alfalah GHP Income Multiplier Fund Alfalah GHP Islamic Fund Alfalah GHP Investment Management Limited 2009 Held by Bank Given as collateral Total Held by Bank 2008 Given as collateral Total ------------------------------------Rupees in '000-----------------------------------254.848.084.220.711 9.085.511.285 Investments at cost Less: Provision for diminution in value of investments Investments (net of provisions) Surplus on revaluation of held-for-trading securities .810 5.726 277.158) 89.726 4.711 9.341 13.934 367.633 421.280 4.039 - Market Treasury Bills Pakistan Investment Bonds 10.251.907.037 684.828 147.074 384.609.240.2 1.590 586.431 4.074.158) 98.641 562.172.251.518 1.099.711 9.828 147.967.102.295 316.521 11.633 421.102.093 40.310 18.016 154.339 303.626.663.084.810 5.141 77.391 2.041 3.821 1.350.988 5.245) 76.946 4.151.274.020.675.208 1.310 18.660.393.492 57.993 4.563.208 1.586 25.319 254.348 11.220.932 (1.288 128.Listed Fully paid up ordinary shares / units .1 INVESTMENTS Investments by types: Held-for-trading securities Fully paid up ordinary shares / units .620 438.562.469 11.461 129.204 357.267 25.037 684.499.485 85.877 33.391 2.726 4.821 1.857.993 4.288 128.923.050 33.069.037 213.942 527.288 (249.039 - 9 9.562.577 9.237.710 9.501 4.074.586 35.781 4.050 33.877 38.939 (1.961.037 213.894 3.626.106.069.946 4.Listed Available-for-sale securities Market Treasury Bills Pakistan Investment Bonds Fully paid up ordinary shares / units .992 5.881.758 11.620 438.942 527.988 5.392) 9.153 99.NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS 8.498.076.492 57.781.010.821 1.

245.494 2.706 421.339 395.5 Pakistan Investment Bonds (PIBs) are for periods of three.6 9. 9.017.172.285 9.10 9.00% to 14.241.074 1.245) 76.491 85.9 46.22 21.01% per annum) with maturities upto December 2010 (2008: October 2009).NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS Note 2009 2008 (Rupees in ‘000) 9.8 9.458.230 million issued by the Government of Bangladesh.835 25.375.197 57.613 129. 9.359.964 5.00% to 14.934 354.15 9.676.738.601.5 9.199 54.17 9.Credit Linked Note Investment in associates Total investments at cost Provision for diminution in value of investments Surplus / (Deficit) on revaluation of held-for-trading securities .279.01% to 14.443 1. The rates of profit range from 8.374 99.428 18.821 277.Overseas Bonds .663.664 1.623 5.00% per annum (2008: 7. five.12 9.961.11 9.633 68.25% per annum (2008: 10.14 9.2 Investments by segments: Federal Government Securities: .560 1.2 9.158) 1.158 384.00% to 8.Sukuk Bonds .00% per annum) with maturities from December 2010 to September 2019 (2008: April 2009 to June 2019). Debentures. Notes and Participation Term Certificates: .492 12.737 4.285.967.725 4.13 9.Overseas Government Bonds .net Total investments 9.617.Market Treasury Bills .020 10. Bonds.158. 35 million (2008: Rs.932 (1. 9.20 9.419.208 22.968. 1962.894 4.Listed TFCs .728 129.Preference Shares Term Finance Certificates.938 9.719.7 9.Un-listed TFCs . 35 million) pledged with the National Bank of Pakistan as security to facilitate Telegraphic Transfer discounting facility.Overseas Government Treasury Bills .190.730 357.Sukuk Bonds .759. ten and fifteen years.399.821 303.50% to 13.853.Pakistan Dollar Bond Fully Paid up Ordinary Shares / Preference Shares / Units / Certificates: .4 9.416.931 9. These carry interest at rates ranging from 2.Pakistan Investment Bonds .619) 217 (204.Government Bonds .net Surplus / (Deficit) on revaluation of available-for-sale securities .431 3.18 9.Listed companies / mutual funds .251.6 This represents Overseas Government Treasury Bills amounting to BDT 359.865 1. 101 113 Annual Report 2009 .60% per annum (2008 : Nil) and are due for maturity in March 2010. These also include PIBs having face value of Rs.4 Market Treasury Bills are for the periods of six months and one year.341 4.438 44.141 77.192 99.442.288 (249. The effective rates of profit on Market Treasury Bills range between 11.070.16 9.671 438.Un-listed companies .3 Investments include certain approved / government securities which are held by the Bank to comply with the Statutory Liquidity Requirement determined on the basis of the Bank's demand and time liabilities as set out under section 29 of the Banking Companies Ordinance.

167 25.951 1.000 20.555 4.009.695 100.000 145.958 50.652 685.161 97.000 520.000 75.000 50.000 50.441 545.000 200.033.000 70.653 258.000 188 Annual Report 2009 101 114 .325 25.523.079 50. The bonds have maturities upto March 2014.000 30.893.397.230. 9.882 100.870 327.821 967.000.000 50.000 9. The rates of profit on these bonds ranges between 11.949.92% per annum (2008: 12.633 100.260 1.025 million issued by the State Bank of Pakistan for a period of three years.67% to 12. 1.000 5.180 502.000 35.500.000 million issued by the Government of Pakistan.738.167 9.435 1.033 75.125 400.870 1.549 729.000 450.000 1.000 50.000 145.60% per annum (2008: Nil).000 9.133 million issued by Water and Power Development Authority (WAPDA) for a period of ten years and ijarah sukuk of Rs.76%) respectively.903 million (2008: Nil) and BDT 66.000 49.000 1.627 600. The rates of profit on Government of Afghanistan bond ranges from 7.700 million (2008: Nil) respectively.000 1.000 1.000 972.000 10.136 181.500 50.240 400.239 9.931.79% to 14.941 1.000 15.239 5.435 108.67% to 12.850 35.7 These represent Overseas Government Bonds issued by the Government of Afghanistan and the Government of Bangladesh amounting to AFA 876.000 1.000 10.161 97.503.043.156 2.000 MUTUAL FUNDS AKD Income Fund AKD Opportunity Fund AMZ Plus Income Fund Askari Asset Allocation Fund Askari Income Fund Atlas Income Fund Dawood Money Market Fund First Habib Income Fund IGI Income Fund JS Aggressive Income Fund JS Income Fund (formerly UTP .000. 9.000 75.973 729.97% per annum (2008: 9.000 600.525 487.951 1.NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS 9.000 972.9 This represents Pakistan Dollar Bonds of US Dollar 5.882 100. 9.919 41.537 488.537 488.99% to 14.952.635 15.000 450.523.000 50.949.397.635 15.653 258.435 25.000 971.260 1.500.125%) per annum and are due for maturity in March 2016 (2008: March 2016).000 200.821 967.043.Capital Protected Fund II UTP A30+Fund INSURANCE Adamjee Insurance Company Limited SYENTHETIC AND RAYON Dewan Salman Fibre Limited 2009 2008 (Rupees in ‘000) 41.952 504.695 100.754 70. 8.317 188 50.10 Particulars of investments in listed companies / mutual funds include the following: 2009 2008 (Number of shares / certificates / units) 971.960.50% per annum) and between 11.471 327.125% (2008: 7.180 502.000 150. These bonds carry interest at 7.652 685.000 80.893.525 487.000 18.952 150.000 49.8 This represents sukuk bonds of Rs.240 3.000 25.20% to 7.435 18.000 51.952 504.000 912 100.000 36.771 30.58% per annum (2008: Nil) while Government of Bangladesh bond carries profit at 10.892 1.549 152.941 1.156 2.931.Income Fund) KASB Liquid Fund KASB Stock Market Fund MCB Dynamic Cash Fund Meezan Balanced Fund Meezan Islamic Income Fund NAFA Cash Fund NAFA Stock Fund Pak Oman Advantage Fund Pak Oman Bank of Punjab Advantage Plus Fund Pak Oman Islamic Fund Pakistan Capital Market Fund Pakistan Income Fund Pakistan Premier Fund Limited Pakistan Strategic Allocation Fund PICIC Growth Fund Reliance Income Fund United Islamic Income Fund United Money Market Fund United Stock Advantage Fund UTP .919 41.958 50.000 50.079 50.647 49.

530 4.500 3.007 9.118.485 9.592 1.000 1.051 50.968.448 47.685 3.896 8.000.632 28.092 1.030.710 100.982 9.000 225.794 98.087 12.972 221.305.924 1.640.000 1.310.525 106.601.000 175.252 121.S Bank Limited Jahangir Siddiqui & Company Limited KASB Securities Limited MCB Bank Limited National Bank of Pakistan NIB Bank Limited Samba Bank Limited The Bank of Punjab United Bank Limited 4.500 2.000 100.586 29.760 726.000 1.000 1.000 2.000 5.500 3.613 44.683 2. OIL & GAS Kohinoor Energy Limited Kot Addu Power Company Limited Oil and Gas Development Company Limited Pakistan Oilfields Limited Pakistan Petroleum Limited Pakistan State Oil Company Limited Southern Electric Power Company Limited The Hub Power Company Limited AUTOMOBILE ASSEMBLERS Indus Motor Company Limited Agriauto Industries Limited TEXTILE Azgard Nine Limited Hira Textile Mills Limited Nishat Mills Limited Nakshbandi Industries Limited Yousuf Weaving Mills Limited TECHNOLOGY & COMMUNICATION Pakistan Telecommunication Company Limited Telecard Limited Worldcall Telecom Limited CHEMICALS & FERTILIZERS Engro Corporation Limited (formerly Engro Chemical Pakistan Limited) Fauji Fertilizer Bin Qasim Limited Fauji Fertilizer Company Limited ICI Pakistan Limited Lotte Pakistan PTA Limited (formerly Pakistan PTA Limited) STEEL & ALLIED Crescent Steel & Allied Products Limited MISCELLANEOUS Pace Pakistan Limited Tri.000 1.147.000 50.006 4 1 3.710 150.000 215.609 185.000 2.150.594 100.000 424.000 207.000 350.000 484 128 2.118 34.147 41.375 50.000 5.750 180.086 10.406 46.000 358.175 80.337 20.007 9.484 7.Khan Cement Limited Fauji Cement Company Limited Fecto Cement Limited Lucky Cement Limited Dewan Cement Limited Dadabhoy Cement Industries Limited SUGAR AND ALLIED INDUSTRY Colony Sugar Mills Limited FUEL.000 358.000 3.375 2.000 167.559 15. ENERGY.000.953.731 827 20 70.318.398 15.005 6.Pack Limited 101 115 Annual Report 2009 .285.000 500.297.784 162.972 263.200 25.640 1.125 145.394 193.480.923.012 1.600 4.953.250 3.000 85.337 17.378.770 562.990 248.667.403.NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS 2009 2008 2009 2008 (Number of shares / (Rupees in ‘000) certificates / units) 75.263 2.553 2.591 1.490 3.225.000 480 170.297 12.545 9.000 INVESTMENT COMPANIES & BANKS Allied Bank Limited Arif Habib Investment Limited Arif Habib Securities Limited Askari Bank Limited Bank Al Habib Limited J.151.000 1.175 827 20 78 41.991 136.269 1.445 2.000 2.200 530.701 14.000 25.000 7.383.242.392 17 16.863 480 1.200 255.000 2.260 81.201.134 135.899 257.000 268.000 2.760 29.177 4.318.802 93.000 1.327 3.417 22.980 6.831 1.000 1.756 3.000 175.871 16.842 4 1 49.730 64.993.000 804.100.975 12.544 500.000 484 128 250.869 22.000 100.793 34.601.725 89.000 750.232 15.954 62.000 804.203.281 1.728 CEMENT Al-Abbas Cement Company Limited D.640 165.250 3.121 10.810 605.210 17 3.G.000 1.080 2.125 50.997 1.000 54.298 62.000 2.170 94.000 10.066 38.067 1.875 2.045 9.667.

02 percent of principal semi-annually in the first ninety months and remaining principal at maturity. 9.e.54 Period of financial statements: June 30.096 7. 2009 (Un-audited) Al-Hamra Avenue (Private) Limited Chief Executive: Mr.000.000 (2008: 20.894 9.948 94. 2008 Society for Worldwide Interbank Financial Telecommunication Chief Executive: Mr.000. 2.725 16 16 4.11 Investments in unlisted companies 2009 2008 (Number of shares) 572. 286. Mohammad Rafiquddin Mehkari 99.874 303.431 57. S.510 277.Quoted.096 4.531 572.71 Period of financial statements: December 31. October 31.725 5. Lazaro Campos Break-up value per share: Rs. 2008 Al-Hamra Hills (Private) Limited Chief Executive: Mr. 9.47 Period of financial statements: June 30.340 114.880 Annual Report 2009 Maturity: Rating: Chief Executive: 101 116 . Habib Rafiq Break-up value per share: Rs.680 131. 2009 (Un-audited) 5. Secured Askari Bank Limited (2nd Issue) (formerly Askari Commercial Bank Limited) 20.000 7.000 50.12 Investments in preference shares 2009 2008 (Rupees in ‘000) Investee company STS Holdings Limited BRAC Bank United Hospitals Limited Redemption terms Semi annual redemptions over 5 years ending in 2011 Annual redemptions over 5 years ending in 2012 Annual redemptions over 5 years ending in 2011 60.13 Particulars of Term Finance Certificates .(PACRA) Mr.821 129.000 70. Zaeem Break-up value per share: Rs.000) units of Rs. Habib Rafiq Break-up value per share: Rs.000 70.000 5.973 121.000 50.000.025.840 99.000 5.06 Period of financial statements: December 31.531 Pakistan Export Finance Guarantee Agency Limited Chief Executive: Mr. 2013 AA.000 each Mark up: Average Six Months KIBOR (Ask Side) + 150 basis points per annum (no floor no cap) Redemption: The TFC is structured to redeem 0. 5. Eight years from date of disbursement i.NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS 2009 2008 (Rupees in ‘000) 9. M.821 9.000.000 129.

675 2. Maturity: July 2009 Rating: A (PACRA) Chief Executive: Mr. 0.000 each Mark up: Average Six Months KIBOR (Ask Side) + 190 basis points (no floor no cap) Redemption: The TFC is structured to redeem 97.350) certificates of Rs.00 percent and a cap of 10.000 each Mark up: Average Six Months KIBOR + 1.00 percent per annum Redemption: Principal repayment in ten equal semi-annual installments. Habib The Royal Bank of Scotland (formerly ABN Amro (Pakistan) Limited) 578 (2008: 578) units of Rs.887 - 11.92 percent of principal in four annual installments after a grace period of fifty-four months.930 49.000 (2008: 10. February 1. Badar Kazmi Bank Al Habib Limited 9.950 46.136 101 117 Annual Report 2009 . 5.00 percent per annum with a floor of 6.16 percent of the issue amount will be re-paid equally in each of the redemption periods during the first four years. 5. Redemption: A nominal amount i.25 percent respectively starting from the eighty-fourth month. Abbas D.50 percent per annum with a floor of 3. Maturity: Seven years from the date of issue i. Humayun Nabi Jan 49.e.000) units of Rs. Shehzad Naqvi Trust Investment Bank Limited (formerly Trust Leasing Corporation Limited) Nil (2008: 11.885 2. profit payable on semi-annual basis. Rating: AA.(PACRA) Chief Executive: Mr.50 percent and a cap of 10.657 46. Maturity: Eight years from the date of disbursement i.e.136) certificates of Rs. 5.e. 5.25 percent of principal semi-annually in the first seventy-eight months and the remaining principal in three semi-annual installments of 33.NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS 2009 2008 (Rupees in ‘000) Standard Chartered Bank (Pakistan) Limited . Maturity: July 2012 Rating: AA (PACRA) Chief Executive: Mr. 2013 Rating: AAA (PACRA) Chief Executive: Mr. The remaining principal is to be redeemed in semi annual installments during the tenor of the TFC. February 2013.00 percent per annum Redemption: The TFC is structured to redeem 0.350 (2008: 9.000 each Mark up: Average Six Months KIBOR + 200 basis points prevailing one working day prior to the beginning of each semi-annual period.(3rd Issue) 10.000 each Mark up: Average Six Months KIBOR (Ask Side) + 3.

Rashid Khan ORIX Leasing Pakistan Limited 37. Munaf Ibrahim 101 118 .91 percent in the last six months. Aftab Manzoor Pakistan Mobile Communication (Private) Limited 80.18 percent of principal in the first fifty-four months. May 2012 AA+ (PACRA) Mr.00 percent and a cap of 16.000 each Mark up: Average Six Months KIBOR + 1.000 (2008: 10. 5.NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS 2009 2008 (Rupees in ‘000) Allied Bank Limited 7.889 49.686 (2008: 7.24 percent of principal in the first seventy-two months and the remaining principal in four equal semi-annual installments of 24. Maturity: May 2012 Rating: AA+ (PACRA) Chief Executive: Mr. 2013 Rating: AA.000 each Mark up: Average Six Months KIBOR + 2. May 31.044 184. Humayun Murad Jahangir Siddiqui & Company Limited 10.000 (2008: 37.000) certificates of Rs.399 399.000 each Mark up: Average Six Months KIBOR (Ask Side) + 285 basis points per annum Redemption: The instrument is structured to redeem 0.(JCR .50 percent per annum (no floor no cap) Redemption: The instrument is structured to redeem 0.000) units of Rs.000 (2008: 80. Maturity: Seven years from the date of issue i.960 Maturity: Rating: Chief Executive: The instrument is structured to redeem 0.90 percent per annum (no floor no cap) Redemption: The instrument is structured to redeem 0.02 percent of principal semi-annually in the first fourty-eight months and remaining amount in six semi-annual installments.600 154.(PACRA) Chief Executive: Mr.940 49. Redemption: Annual Report 2009 38.94 percent each of the issue amount respectively starting from the seventy-eighth month.08 percent of principal in the first twenty-four months in four equal semi-annual installments and the remaining 99.VIS) Chief Executive: Mr.00 percent per annum.50 percent with a floor of 6.384 38. 5. Maturity: September 2014 Rating: AA.e.000 each Mark up: Average Six Months KIBOR + 1.22 percent of the principal would be redeemed during the last thirty-six months in six equal semi-annual installments.000) certificates of Rs.686) certificates of Rs. 5.91 percent in the sixtieth month and the remaining 49.440 399. 5. 49.

e.000 (2008: Nil) certificates of Rs. Maturity: Five years from the issue date i.000) certificates of Rs. 5. the issuer has a Call Option exercisable at profit payment date to redeem in full or in part the outstanding issue amount of the TFCs.792 (2008: 15. Nasir Raza Pak Arab Fertilizers Limited 20. 5. Fawad Ahmed Mukhtar Askari Bank Limited TFC-3 90.070. 5.50 percent per annum Redemption: Principal redemption in six stepped-up semi-annual installments starting from the issue date.75 percent per annum Redemption: Eight equal semi-annual installments commencing from eighteenth month of the issue date.000) certificates of Rs.00 percent per annum. Maturity: August 2009 Chief Executive: Mr.00 percent per annum with a floor of 8. M.(PACRA) Chief Executive: Mr.e.00 percent and a cap of 16.075 99.000 each Mark up: Average Six Months KIBOR + 1.458.92 percent each.500 67.428 1.000 each Mark up: Average Six Months KIBOR plus 2.940 99.368 75. the issuer may call the TFC in part or full on any profit payment date subject to thirty days prior notice.000 each Mark up: Average Six Months KIBOR + 1. starting from the 102nd month after the issuance. 5.000 (2008: 20. February 28.000 - 1.95 percent (for six to ten years) Redemption: This instrument is structured to redeem 0. 2013 Rating: AA (PACRA) Chief Executive: Mr.50 percent (for one to five years) Average Six Months KIBOR plus 2. September 28. S.32 pecent of total issue amount in the first ninety six months after issuance i. Shaikh Financial Receivables Securitization Company Limited 15. Maturity: January 2014 Rating: A+ (PACRA) Chief Executive: Mr. Maturity: August 2019 Rating: AA.792) certificates of Rs. Mohammad Rafiquddin Mehkari - 12. 2009 and remaining issue amount in four equal semi-annual installments of 24.931 101 119 Annual Report 2009 .000 each Mark up: Average Six Months KIBOR + 2.980 450. Redemption: Principal redemption will be carried out in twelve and eight equal semi-annual installments in arrears. Ahmed H.NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS 2009 2008 (Rupees in ‘000) Azgard Nine Limited Nil (2008: 10. with a grace period of one year and three years for Class A TFCs and Class B TFCs respectively.

NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS 2009 2008 (Rupees in ‘000)

9.14 Particular of Term Finance Certificates - Unquoted, Secured Gulshan Spinning Mills Limited Nil (2008: 10,000) certificates of Rs. 5,000 each Mark up: Average Six Months KIBOR (Ask Side) + 1.80 percent per annum with a cap of 15.00 percent per annum. Redemption: Seven equal semi-annual installments commencing from June 2006 Maturity: June 2009 Chief Executive: Mr. Naseer Ahmed Paramount Spinning Mills Limited Nil (2008: 16,000) certificates of Rs. 5,000 each Mark up: Average Six Months KIBOR (Ask Side) + 1.80 percent per annum with a floor of 8.00 percent per annum. Redemption: Seven equal semi-annual installments commencing from June 2006 Maturity: June 2009 Chief Executive: Mr. Tanveer Ahmad Pakistan International Airlines Corporation Nil (2008: 100,000) certificates of Rs. 5,000 each Mark up: SBP discount rate + 0.50 percent per annum with a floor of 8.00 percent per annum Redemption: First four equal semi-annual installments commencing from August 2003 amounting to Rs. 5,000 each. Next six equal semi-annual installments commencing from August 2005 amounting to Rs. 12,499,500 each, subsequent six equal semi-annual installments commencing from August 2008 amounting to Rs. 70,830,500 each; the issuer has a Call Option exercisable any time at 24th, 48th and 72nd month to redeem in full or part with a premium. Maturity: February 2011 Chief Executive: Captain Muhammad Aijaz Haroon Crescent Leasing Corporation Limited (2nd Issue) Nil (2008: 10,000) certificates of Rs. 5,000 each Average Six Months KIBOR (Ask Side) + 1.75 percent per annum Mark up: Redemption: Ten equal semi-annual installments commencing from January 2005; the issuer has a Call Option exercisable at any time from the beginning of the 19th month till the end of the 16th month from the issue date only on a profit payment date subject to a 30 day notice period. Maturity: July 2009 Chief Executive: Syed Shahnawaz Ahmed Rizvi Pakistan Mobile Communication (Private) Limited 40,000 (2008: 40,000) certificates of Rs. 5,000 each Mark up: Average Six Months KIBOR + 1.30 percent per annum Redemption: In two equal semi annual installments starting from the 30th month from the date of issue i.e. October 2007. The issuer will have a Call Option to redeem in full or part the outstanding face value of the TFCs on every installment date. Maturity: September 2010 Chief Executive: Mr. Rashid Khan 200,000 200,000 10,000 354,153 22,843 14,277

Annual Report 2009

101 120

NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS 2009 2008 (Rupees in ‘000)

Pakistan Mobile Communication (Private) Limited (2nd Issue) Nil (2008: 30,000) certificates of Rs. 5,000 each Mark up: Average Six Months KIBOR (Ask Side) + 1.60 percent per annum with a floor of 4.95 percent and a cap of 12.00 percent per annum Redemption: Five equal semi-annual installments commencing from March 2007; the issuer has a Call Option exercisable any time from the 36th month to 54th month on a coupon date subject to 30 days notice period to repay in whole or in part. Maturity: September 2009 Chief Executive: Mr. Rashid Khan Pak American Fertilizers Limited (formerly known as Dominion Fertilizers (Private) Limited) 100,000 (2008: 100,000) certificates of Rs. 5,000 each Mark up: Average Six Months KIBOR (Ask Side) + 325 basis point per annum (no floor no cap) Redemption: Redemption after a grace period of one year in 24 equal quarterly installments. The issuer has a Call Option exercisable from six months from the date of disbursement at any mark-up payment date subject to a prepayment amount of at least Rs. 500 million or in multiples thereof in its entirely. Maturity: 7 years from the date of disbursement i.e. July 2013. Chief Executive: Mr. Ahmed Jaudet Bilal BYCO Petroleum Pakistan Limited (formerly known as Bosicor Pakistan Limited) Nil (2008: 20,000) certificates of Rs. 5,000 each Mark up: Average Six Months KIBOR (Ask Side) + 5.50 percent per annum with a floor of 9.00 percent and a cap of 13.00 percent per annum payable semi-annually. Redemption: Seven equal semi-annual installments commencing from August 2006; the issuer has a Call Option exercisable at any time from the 1st principal repayment date (i.e. starting from the 24th month) onwards on a coupon date subject to a 60 days notice period to repay in whole or in part. Maturity: September 2009 Chief Executive: Mr. Amir Abbassciy Jahangir Siddiqui & Company Limited 20,000 (2008: 20,000) certificates of Rs. 5,000 each Average Six Months KIBOR (Ask Side) + 1.70 percent per annum Mark up: Redemption: The instrument is structured to redeem 0.20 percent of principal in the first 60 months and remaining principal in two equal semi-annual installments of 49.90 percent each of the issue amount respectively from 60th month; the issuer has a Call Option exercisable in full at any time after 1 year on a coupon date. Maturity: July 2013 Chief Executive: Mr. Munaf Ibrahim

-

30,000

499,700

499,900

-

28,571

99,920

99,960

101 121

Annual Report 2009

NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS 2009 2008 (Rupees in ‘000)

Khunja Textile Mills Limited 6,000 (2008: 6,000) certificates of Rs. 5,000 each Mark-up: Average Six Months KIBOR + 3.00 percent per annum Redemption: 10 equal semi-annual installments commencing from the 24th months from first draw down. Maturity: April 2014 Chief Executive: Mr. Manzoor Ahmed Mir First Dawood Investment Bank Limited 6,000 (2008: 6000) certificates of Rs. 5,000 each Average Six Months KIBOR (Ask Side) + 1.60 percent per annum Mark-up: Redemption: Bullet payment at maturity Maturity: September 2012 Chief Executive: Mr. Abdus Samad Khan Azgard Nine Limited 19,996 (2008: 19,996) certificates of Rs. 5,000 each Average Six Months KIBOR (Ask Side) + 2.25 percent per annum. Mark-up: Redemption: The instrument is structured to redeem 0.02 percent of principal semi-annually in the first 12 months and remaining amount in 10 semi-annual installments. Maturity: December 2014 Chief Executive: Mr. Ahmed H. Shaikh Gujranwala Electric Power Company Limited (GEPCO) - note 9.14.1 40,000 (2008: 40,000) certificates of Rs. 100,000 each Average Six Months KIBOR (Ask Side) + 0.05 percent per annum Mark-up: Redemption: Eight equal semi-annual installments commencing after a grace period of one year. Maturity: February 2013 Chief Executive: Muhammad Ibrahim Majoka Faisalabad Electric Supply Company Limited (FESCO) - note 9.14.1 40,000 (2008: 40,000) certificates of Rs. 100,000 each Mark-up: Average Six Months KIBOR (Ask Side) + 0.05 percent per annum Redemption: Eight equal semi-annual installments commencing after a grace period of one year Maturity: February 2013 Chief Executive: Mr. Tanwir Safder Cheema National Transmission and Despatch Company 800,000 (2008: Nil) certificates of Rs. 5,000 each Mark up: Average Six Months KIBOR + 1.75 percent per annum Redemption: In 6 equal semi annual installments, after completion of grace period. First principal payment due at the end of 30th month from the first disbursement. Maturity: March 2014 Chief Executive: Mr. Tariq Qazi

30,000

30,000

30,000

30,000

99,940

99,960

4,000,000

4,000,000

4,000,000

4,000,000

4,000,000

-

Annual Report 2009

101 122

2009.664 9.250 98.00 percent 3 months KIBOR plus 1.3 5.500 158.II Orix Leasing Pakistan Limited Security Leasing Corporation Limited Kohat Cement Company Limited Sitara Energy Limited BRR Guardian Modaraba K.25 percent 6 months KIBOR plus 1.000 300. 9.15.700 62.00 percent 3 months KIBOR plus 2.1 20. First principal payment due at the end of 30th month from the first disbursement.00 percent per annum Redemption: In 6 equal semi annual installments.000 20.15 Investments in sukuk bonds Investee company Sitara Chemical Industries Limited .304 250.000 60.15.000 300.088.50 percent 6 months KIBOR plus 2.70 percent 6 months KIBOR plus 1.000 21.15. This represents Credit Linked Note amounting to US Dollar 5.600 42.000 20.399.2 Note 9.740 25.000 Note 9.000 15.15. 500 million each which was due from GEPCO and FESCO respectively in August 2009 has not been paid to date and will now be settled by the GoP. The bond carries interest at 3 months LIBOR plus 350 bps and is due for maturity in March 2013. S.1 This represents advance payment to Sitara Energy Limited.000 - 18. 2009.15.000 95. Pursuant to this decision.NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS 2009 2008 (Rupees in ‘000) Power Holding (Private) Limited 1.16 9.250 1. The relevant sukuk bonds against the advance subscription have not been issued to the Bank by December 31. Accordingly. GoP will make arrangement of payment of mark up on these liabilities to lending financial institutions.000 205.000 million issued by Standard Chartered Bank.560 9.419. Annual Report 2009 9.80 percent 6 months KIBOR plus 1.000 96.197 9.15. Shahid Rafi 5. the Finance Division of GoP is in the process of finalising modalities for transfer of these liabilities (which include the term finance certificates of GEPCO and FESCO) from the books of power companies to Power Holding (Private) Limited.30 percent 3 months KIBOR plus 1. The relevant sukuk bonds against the advance subscription have not been issued to the Bank by December 31.080 million issued by IDLC in Bangladesh.I Sitara Chemical Industries Limited . GEPCO and FESCO have now become fully absolved of these liabilities and the Federal Government will make arrangements for repayment of these term finance certificates.000 15. after completion of grace period. 9. 2009.835 298.700 93.00 percent 6 months KIBOR plus 1.1 June 2014 June 2015 August 2014 March 2021 December 2016 June 2012 September 2012 September 2015 Profit rate per annum 3 months KIBOR plus 1. 101 123 .09% per annum and are due for maturity in December 2011.416.272 100.3 This represents conversion of loan amount into sukuk bonds.50 percent Unit 59.15.2 This represents advance payment to Liberty Power Tech Limited.000 20. The first installment of principal redemption amounting to Rs.10 percent 3 months KIBOR plus 3.95 percent 6 months KIBOR plus 1. 2009.000 (2008: Nil) certificates of Rs. The relevant sukuk bonds against the advance subscription have not been issued to the Bank by December 31.000 94.17 This represents overseas bonds amounting to BDT 21.000 Note 9.95 percent 6 months KIBOR plus 1.600 42.14. Sulemanji Esmailji & Sons (Private) Limited Sitara Peroxide (Private) Limited Liberty Power Tech Ltd Amreli Steel (Private) Limited Security Leasing Corporation Limited Security Leasing Corporation Limited Engro Corporation Limited (formerly Engro Chemical Pakistan Limited) Date of maturity December 2013 December 2013 June 2012 September 2013 December 2012 Note 9. 5.272 100.000 100. These bonds carry interest at 14.000 1.1 The Government of Pakistan (GoP) has decided to assume bank loan liabilities of Pakistan Electric Power Company with effect from July 1.000 each Mark up: Average Six Months KIBOR + 2.000 20.30 percent 3 months KIBOR plus 1.875 75.334 75.000 100.440.15 percent 6 months KIBOR plus 1.750 190.000 2009 2008 (Rupees in ‘000) 298. Maturity: September 2014 Chief Executive: Mr. 9.000 38.853.625 56.

279 (note 9.225 316.988 Annual Report 2009 4.251. 11.000 87.10 except where stated.726 128.05% (2008: 15. 2009 Chief Executive : Mr.06%) Break-up value per unit: Rs.Alfalah GHP Investment Management Limited (Paid-up value of each unit is Rs.56%) Break-up value per unit: Rs.note 9.957.413.141 101 124 . 50) Alfalah GHP Investment Management Limited Percentage of holding: 40.109 586.153 2.096 684.487 2.2 Date of last audited financial statements: June 30.18.899. Tariq Malik Alfalah Insurance Limited Percentage of holding: 30% (2008: 30%) Break-up value per share: Rs.295 527.070 13.494.86 Date of audited financial statements: December 31.NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS 2009 2008 (Rupees in ‘000) 9. 2009 Management Company . Muneer Farooqui Wateen Telecom Limited Percentage of holding: 20% (2008: 20%) Break-up value per share: Rs.288 13. 62.76% (2008: 8.192 5. 52.920 41.037 83.45 Date of financial statements: December 31.15 Date of audited financial statements: December 31.696 6.40%) Break-up value per unit: Rs.73 .261.55% (2008: 66. 2009 Chief Executive: Mr.049. 2009 2008 (Number of shares / units) 319.76%) Break-up value per share: Rs.Alfalah GHP Investment Management Limited (Paid-up value of each unit is Rs.2 Date of last audited financial statements: June 30.590 99. 2009 Management Company . 12.1) Warid Telecom (Private) Limited Percentage of holding: 8.049.note 9.828 62.054.967. 50) Alfalah GHP Islamic Fund Percentage of holding: 96.18 Particulars of investments in associates The paid up value of these shares / units is Rs. 2009 Chief Executive: Mr. 6.261.124 267.60 Date of audited financial statements: December 31.747.487 147.18. 10. 61. Nasar us Samad Qureshi Alfalah GHP Value Fund Percentage of holding: 28.641 4.22%) Break-up value per share: Rs.413.06 Date of audited financial statements: December 31.106.070 154.048.Alfalah GHP Investment Management Limited (Paid-up value of each unit is Rs. 2009 Management Company .42 .22% (2008: 40. 2009 Chief Executive: Mr.109 11.016 213.18.942 11.048.961.000 6. Aziz Anis Dhedhi 3.037 5.225 5.899. 50) Alfalah GHP Income Multiplier Fund Percentage of holding: 92.460 562.42% (2008: 54.

2 This represents the break-up value of the shares of investee company based on the unaudited financial statements of the company as at December 31.696 (122.3. no additional deferred tax asset has been recognised by the associate between July 1.18.093. The audit opinion on the financial statements of Warid Telecom (Private) Limited for the year ended June 30. The details of assets. 6.880. 2008. 2009 included an emphasis of matter paragraph highlighting that the associate will be able to recover the deferred tax asset carried at June 30. The details of assets.687.396) 3.453. 2009 from future taxable profits as projected in the business plan approved by its board of directors.3. 1984 for providing Long Distance and International public voice telephone (LDI) services and Wireless Local Loop (WLL) services in Pakistan.519 56.037 (1.037 The company was incorporated in Pakistan under the Companies Ordinance.696 The company was incorporated in Pakistan under the Companies Ordinance. 2009 2008 (Rupees in ‘000) 9.3 Investment in associates (Rupees in '000) 2009 2008 (Rupees in ‘000) 9. revenues and profits of the Company as of December 31.18. 1984 for providing Global System of Mobile Communication (GSM) services in Pakistan. 9. 9.1 Warid Telecom (Private) Limited issued 51.595.2 Wateen Telecom Limited Investment as at January 1 Investment during the year Share of profit Balance as at December 31 684.957) 4.687 14.NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS 9.177 684.751.985 (5. 2009.251.031. liabilities.096. 2009. 2009. 2009 Assets* Liabilities Half year ended December 31.378. 2009 Revenues Profit / (Loss) ------------------------------Rupees in '000------------------------------ Warid Telecom (Private) Limited 140.1 Warid Telecom (Private) Limited Investment as at January 1 Investment during the year Share in share premium Share of (loss) / profit Balance as at December 31 4.845 right shares to the Bank during the year against the amount subscribed by the Bank during the year ended December 31.18.551) * The carrying value of Warid Telecom (Private) Limited includes Rs.106.626 million in respect of deferred tax asset recognised by the associate on temporary differences / available tax losses.218 (1. revenues and profits of the Company as of December 31. liabilities. As per the unaudited financial statements of Warid Telecom (Private) Limited for the six months ended December 31.641 3.18. 2009 to December 31.776 1.144.251. 2009 based on unaudited financial statements are as follows: As at December 31.921 104.096 628. 2009 based on unaudited financial statements are as follows: Annual Report 2009 101 125 .18.600) 562.

liabilities.590 115.3.942 Alfalah GHP Value Fund is an open-ended mutual fund. 2009 Assets Liabilities Half year ended December 31.065) (50.082) (19. liabilities.254 586. revenues and profits of the Company as of December 31.153 25.882 27.942 (4.4 Alfalah GHP Value Fund Investment as at January 1 Dividend received during the year Share in reserves of associate Share of (loss) / profit Balance as at December 31 2009 2008 (Rupees in ‘000) 99.996) 4.004.447 9.675 87.153 Alfalah Insurance Company Limited is a general non-life company which was incorporated as an unquoted public limited company in Pakistan.658 (1.396 4.18.720) 99.475 (13.3 Alfalah Insurance Company Limited Investment as at January 1 Investment during the year Share in reserves of associate Share of (loss) / profit Balance as at December 31 2009 2008 (Rupees in ‘000) 62.828 75.NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS As at December 31.546 21.981 712.5 Alfalah GHP Income Multiplier Fund Investment as at January 1 Investment during the year Dividend received during the year Share in reserves of associate Share of profit Balance as at December 31 2009 2008 (Rupees in ‘000) Annual Report 2009 527.423) 25.426 324.037 (21.247) 62.503.400 (13.896 (3.050 527.3.375 48.914) 100. revenues and profits of the Fund as of December 31.221 331. 2009 based on unaudited financial statements are as follows: Assets Liabilities Revenues Profit / (Loss) ------------------------------Rupees in '000------------------------------ Alfalah Insurance Company Limited 1.942) 9.037 101 126 .921.786 30.269 147. The details of assets.111.300 239. The details of assets. listed on the Karachi Stock Exchange.3.644 9. Being an open ended mutual fund.234) (12. 2009 based on audited financial statements are as follows: Assets Liabilities Revenues Profit / (Loss) ------------------------------Rupees in '000------------------------------ Alfalah GHP Value Fund 547.18.295 565.18. 2009 Revenues Profit / (Loss) ------------------------------Rupees in '000------------------------------ Wateen Telecom Limited 29. the Fund offers units for public subscription on a continuous basis.498.

288 (14. the Fund offers units for public subscription on a continuous basis.943) 34. revenues and profits of the Company as of December 31.3.168 154.244 9.252 16. Being an open ended mutual fund. float and manage open-ended schemes and closed-end funds.700 (3. revenues and profits of the Fund as of December 31.016 261.355) (45. liabilities.434 128.18.246 5.065 124.3.675 101 127 Annual Report 2009 Assets Liabilities Revenues Profit / (Loss) . Being an open ended mutual fund.760 82. listed on the Karachi Stock Exchange.728 9.554 13. revenues and profits of the Fund as of December 31.057) 213. The details of assets. The details of assets. liabilities. liabilities.988 8. The principal activity of the company is to act as an asset management company.581 42. listed on the Karachi Stock Exchange.911 316. investment advisor / fund manager and to constitute.18.6 Alfalah GHP Islamic Fund Investment as at January 1 Investment during the year Dividend received during the year Share in reserves of associate Share of (loss) / profit Balance as at December 31 2009 2008 (Rupees in ‘000) 213.726 115. 2009 based on audited financial statements are as follows: Assets Liabilities Revenues Profit / (Loss) ------------------------------Rupees in '000------------------------------ Alfalah GHP Income Multiplier Fund 636.436 2.988 Alfalah GHP Investment Management Limited is an asset management company. the Fund offers units for public subscription on a continuous basis. 2009 based on audited financial statements are as follows: ------------------------------Rupees in '000------------------------------ Alfalah GHP Investment Management Limited 390.546 114. 2009 based on audited financial statements are as follows: Assets Liabilities Revenues Profit / (Loss) ------------------------------Rupees in '000------------------------------ Alfalah GHP Islamic Fund 344.936 154.NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS Alfalah GHP Income Multiplier Fund is an open-ended mutual fund.277 60.288 Alfalah GHP Islamic Fund is an open-ended asset allocation fund.078 129. The details of assets.7 Alfalah GHP Investment Management Limited Investment as at January 1 Investment during the year Share in reserves of associate Share of profit Balance as at December 31 2009 2008 (Rupees in ‘000) 128.570 17.

889 49.000 10.374 100.167 402.000 99.960 1.978 427.683 AAAAA AA AA- PACRA PACRA PACRA PACRA BBB(RW-) PACRA AAJCRVIS AAPACRA AA+ PACRA AA+ PACRA CCC PACRA A+ PACRA ------(Unrated)-----AA JCRVIS ------(Unrated)-----------(Unrated)-----AAPACRA Annual Report 2009 BBB(f) JCRVIS ------(Unrated)-----BB(f) JCRVIS ------(Unrated)-----------(Unrated)-----A+(f) PACRA ------(Unrated)-----------(Unrated)-----3 Star PACRA ------(Unrated)-----AA-(f) PACRA ------(Unrated)-----------(Unrated)-----------(Unrated)-----------(Unrated)-----------(Unrated)-----3 Star / 4 Star PACRA ------(Unrated)-----AA-(f) JCRVIS ------(Unrated)-----A+(f) PACRA ------(Unrated)-----AA-(f) PACRA ------(Unrated)-----------(Unrated)-----------(Unrated)-----------(Unrated)-----------(Unrated)-----A+ (f) JCRVIS ------(Unrated)-----AAPACRA ------(Unrated)-----AA PACRA A/A1 PACRA ------(Unrated)-----AA/A1+ PACRA AA+/A1+ PACRA A/A1 PACRA A+/A1 PACRA AA+/A1+ PACRA AAA JCRVIS AA-/A1+ PACRA 101 128 .600 47.338 56.963 42.079 50.066 38.747 99.172 102.940 200.501 30.882 100.000 50.907 87.992 5.S Bank Limited KASB Securities Limited MCB Bank Limited National Bank of Pakistan NIB Bank Limited 34.753 66.969 89.000 50.250 49.000 15.980 200.950 46.062 30.500 47.771 30.988 9.154 (Unrated .662 44.225 30.126 2.000 42.831 6.127 912 2.695 100.958 50.000 50.Income Fund) KASB Liquid Fund KASB Stock Market Fund MCB Dynamic Cash Fund Meezan Balanced Fund Meezan Islamic Income Fund NAFA Cash Fund NAFA Stock Fund Pak Oman Advantage Fund Pak Oman Bank of Punjab Advantage Plus Fund Pak Oman Islamic Fund Pakistan Capital Market Fund Pakistan Income Fund Pakistan Premier Fund Limited Pakistan Strategic Allocation Fund PICIC Growth Fund Reliance Income Fund United Islamic Income Fund United Money Market Fund United Stock Advantage Fund UTP .Government Securities) 517.840 49.533 50.668 9.229 70.621 32.005 93.107 1.675.545 48.581 32.165 35.675.675 2.185 400.850 36.600 30.854 37.106 12.051 6.Capital Protected Fund II UTP A30 + Fund Adamjee Insurance Company Limited Arif Habib Investment Limited Arif Habib Securities Limited Askari Bank Limited Bank Al Habib Limited J.269 1.239 5.000 80.384 399.980 77.010.029 11.930 46.887 9.000 9.036 438.960 30.417 35.000 450.000 70.412 187.760 100.147 41.430 50.000 75.885 38.147 30.600 184.371 25.570 5.551 159.940 30.000 42.314 159.644 18.960 49.000 200.760 99.000 99.940 44.798 3.368 41.995 99.959 1.346 426.958 50.618 50.394 193.19 Quality of available for sale securities Market value Cost Long/Medium 2009 2008 2009 2008 Term Credit Rated by ---------------------Rupees in '000--------------------Rating Market Treasury Bills Pakistan Investment Bonds Term Finance Certificates Askari Bank Limited (2nd Issue) (formerly Askari Commercial Bank Limited) Standard Chartered Bank (Pakistan) Limited (formerly Union Bank Limited) Bank Al-Habib Limited The Royal Bank of Scotland (formerly ABN Amro (Pakistan) Limited) Trust Investment Bank Limited (formerly Trust Leasing Corporation Limited) Allied Bank Limited Pakistan Mobile Communication (Private) Limited ORIX Leasing Pakistan Limited Jahangir Siddiqui & Company Limited First Dawood Investment Bank Limited Financial Receivables Securitization Company Limited "A" Financial Receivables Securitization Company Limited "B" Pak Arab Fertilizers Limited Pakistan Mobile Communication (Private) Limited Azgard Nine Limited Askari Bank Limited (3rd Issue) Shares in Listed Companies / Certificates / Units AKD Income Fund AKD Opportunity Fund AMZ Plus Income Fund Askari Asset Allocation Fund Askari Income Fund Atlas Income Fund Dawood Money Market Fund First Habib Income Fund IGI Income Fund JS Aggressive Income Fund JS Income Fund (formerly UTP .763 889 24.399 399.NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS 9.044 49.Government Securities) 95.000 150.005 93.788.147 97.695 100.658 50.281 1.167 9.750 180.794 20.000 18.000 145.388.587 154.210 200.657 2.754 70.761.029 68.679 52.121 99.823 51.653 1.391 50.000 50.000 99.361 30.000 35.887 11.332 43.940 450.000 450.907 93.000 99.000 50.440 154.583 46.613 9.294 2.315 32.199.000 912 100.079 50.000 5.000 36.534 187.000 30.633 100.850 35.827 31.406 21.435 25.175 15.000 20.136 38.540 9.000 44.857 47.776 74.882 100.121 9.000 145.253 94.899 257.542 15.794 96.100 36.299 30.000 49.781 (Unrated .555 4.406 46.508 48.500 50.463 10.715 3.960 198.844 41.759 65.000 50.000 33.936 43.584 43.322 7.419.561 457.000 34.000 1.000 9.446 137.000 200.239 6.000 150.000 51.880 49.000 75.988.694 51.121 99.181 144.960 1.435 18.871 16.832 2.841 200.608 18.017.935 32.167 25.000 49.

000 129.655 1.686.264 1.925 13.203 50.096 70.352 4.610 40.442.278 28.490 3.485 A JCRVIS AA-/A1+ PACRA AA+ JCRVIS ------(Unrated)-----------(Unrated)-----------(Unrated)-----------(Unrated)-----------(Unrated)-----------(Unrated)-----------(Unrated)-----AAA JCRVIS ------(Unrated)-----------(Unrated)-----AA+/A1+ PACRA ------(Unrated)-----AA+/A1+ PACRA ------(Unrated)-----------(Unrated)-----A+/A1 PACRA ------(Unrated)-----------(Unrated)-----A-/A2 PACRA AA/A1+ PACRA ------(Unrated)-----------(Unrated)-----------(Unrated)-----------(Unrated)-----A/A1 PACRA A+/A1 PACRA Not Applicable Not Applicable Not Applicable Not Applicable 1.980 10.000 95.896 8.663.701 14.930 2.609.405.390 103.260 26.698 22.099.000.821 1.461 5.784 162.089 13.405.900 53.238 36.980 40.000.339 6.974 42.442.950 52.246 2.074.525 106.000 3.727 64.929 64.535 41.940 989.440 93.625 8.096 70.392 16.950 56.714.619 1.320 50.484 7.877 38.279 33.027 5.573 1.000.756 1.469 2.500.546 1.417 22.954 62.887 29.118 34.609 185.716 33.718 18.390 1.757 27.006 2.I Security Leasing Corporation Limited .645 2.000 75.274.975 12.128 1.573 15.954 8.733 18.490 66.684 3.118 94.250 15.385 15.000 129.725.118 37.064.442.115 5.365 1.000 50.NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS Date of Issue Samba Bank Limited The Bank of Punjab United Bank Limited Al-Abbas Cement Company Limited D.240 3.924 1.158 1.600 4.081 75.177.073 955.917 2.Khan Cement Limited Fauji Cement Company Limited Fecto Cement Limited Lucky Cement Limited Kohinoor Energy Limited Kot Addu Power Company Limited Oil and Gas Development Company Limited Pakistan Oilfields Limited Pakistan Petroleum Limited Pakistan State Oil Company Limited Southern Electric Power Company Ltd The Hub Power Company Limited Indus Motor Company Limited Hira Textile Mills Limited Nishat Mills Limited Pakistan Telecommunication Company Limited Telecard Limited Worldcall Telecom Limited Engro Corporation Limited (formerly Engro Chemical Pakistan Limited) Fauji Fertilizer Bin Qasim Limited Fauji Fertilizer Company Limited ICI Pakistan Limited Crescent Steel Limited Pace Pakistan Limited Tri.997 1.000 3.289 27.744 37.000 50.065 102.793 30.375) (1.175 80.075 1.G.592 1.478 9.500.935 110.693) 249.075 1.550 1.000 2.298 62.000 21.821 1.042.725 4.038 54.438.000 2.175 29.980 3.210 2.II 26-Sep-08 29-Dec-08 11-Mar-09 17-Sep-09 Market value Cost Long/Medium 2009 2008 2009 2008 Term Credit Rated by ---------------------Rupees in '000--------------------Rating 11.725 82.731 70.002 1.050 12.875 2.175 13.20 Particulars of provision for diminution in value of investments Opening balance Charge for the year Reversals Provision written off during the year Closing balance 1.003.607 (32.600 4.445 2.045 9.000 93.725 4.417 110.869 22.992 136.407 53.756 12.990 248.398 73.824 35.709 7.002.300 21.320 5.530 4.393.371 2.619 101 129 Annual Report 2009 .619 277.742 2.Pack Limited Shares in Un-listed Companies Pakistan Export Finance Guarantee Agency Limited Society for Worldwide Interbank Financial Telecommunication Al-Hamra Hills (Private) Limited Al-Hamra Avenue (Private) Limited Ijara Sukuk Bonds Ijara Sukuk Bonds Ijara Sukuk Bonds Ijara Sukuk Bonds Sui Southern Gas Company Security Leasing Corporation Limited .300 2.002.040 ------(Unrated)-----------(Unrated)-----------(Unrated)-----------(Unrated)-----------(Unrated)-----------(Unrated)-----------(Unrated)-----------(Unrated)-----AA PACRA ------(Unrated)-----------(Unrated)------ 2009 2008 (Rupees in ‘000) 9.

297 12.note 9.314 3.725 3.422) 10.394 103 (19) 148 32 (1.693 5.926 - 74.375 6.830 1.553 6.842 3.267 Annual Report 2009 101 130 .Al-Hamra Avenue (Private) Limited Held-to-maturity securities Unlisted companies .Khunja Textiles Mills Limited 132.Fully paid up ordinary shares of Rs.Pakistan Export Finance Guarantee Agency Limited .619 9.232 2.545 9.466 4 827 188 1 20 3 7 17 78 1 254.952 3.Fully paid up ordinary shares / units / certificates Unlisted companies .639) (182.21 Particulars of provision for diminution in value of investments by type and segment Available-for-sale securities Listed companies / mutual funds .934 848 220 (676) (152) (14) (2) (5) (2) 217 (182.216) 121 35 (1) 186 (50) 6 1 (701) (151) (1) (15) (1) (5) 12 (54) 1.802 2.586 29.22 Unrealized gain / (loss) on revaluation of investments classified as held for trading .22.359 34.806 4.Term finance certificates / sukuk bonds .net Investee Company Fully paid up ordinary shares / units .103 1.369 3.158 1.586 254.559 6.825 4 827 188 1 20 3 7 17 11.Kohat Cement Company Limited .354 2. 10 each .142 4.438.092 1.051 3.000 249.080 8.Listed NAFA Stock Fund Adamjee Insurance Company Limited Allied Bank Limited Arif Habib Investment Management Limited Arif Habib Securities Limited Jahangir Siddiqui & Company Limited National Bank of Pakistan United Bank Limited Lucky Cement Limited Pakistan Oilfields Limited Pakistan Petroleum Limited Southern Electric Power Company Limited Azgard Nine Limited Nishat Mills Limited Engro Corporation Limited (formerly Engro Chemical Pakistan Limited) Fauji Fertilizer Bin Qasim Limited Fauji Fertilizer Company Limited ICI Pakistan Limited Lotte Pakistan PTA Limited (Formerly Pakistan PTA Limited) Crescent Steel & Allied Products Limited Pace Pakistan Limited Tri.087 12.497 1.744 31.Pack Films Limited Pakistan Telecommunication Limited The Hub Power Company Limited Nakshbandi Industries Limited Dewan Cement Limited Dewan Salman Fibre Limited Yousuf Weaving Mills Limited Dadabhoy Cement Industries Limited Pakistan State Oil Company Limited The Bank of Punjab Agriauto Industries Limited Colony Sugar Mills Limited Pace Pakistan Limited Unrealised loss in respect of equity securities reclassified from held for trading category to Available for Sale .Al-Hamra Hills (Private) Limited .1 Unrealised gain / (loss) Cost 2009 2008 2009 2008 -----------------Rupees in '000----------------187 (59) (140) (395) 402 (36) 55 (129) 122 2.723 2.640 55.267 11.934 1.899 30.442.052 3.NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS 2009 2008 (Rupees in ‘000) 9.586 3.

276 858.299 177.007.445) 7.962.713.351 946.802.304.388.856 3.351 10. Note 2009 2008 (Rupees in ‘000) 10 ADVANCES Loans.713.352 - 10.952 4.116.140.698) (2.716.352 101 131 Annual Report 2009 (56.245.374 5.336.713.606) (763.311 197.572. running finances.142.545.019 131. In Pakistan Outside Pakistan Net investment in finance lease In Pakistan Outside Pakistan Financing and investing assets under IFAS 2 Ijarah Bills discounted and purchased (excluding treasury bills) Payable in Pakistan Payable outside Pakistan Provision against advances Specific provision against non-performing advances General provision against advances 10.860.940.465.534.780.969. cash credits.306 17.622 10.414.351 4.1 This reclassification was made as allowed under BSD Circular No.gross of provisions 10.1 Particulars of advances .116.806) 4.255 5.863 196.526 825.007 16.722 10.22.085) (6.655 196.708 65.598) (1.514 11.754.737 8.802.111 2.958.802.980.613.791 10.1 In local currency In foreign currencies Short term (upto one year) Long term (over one year) 10.577 15.682 14.672 743.301. etc.297 171.019 (5.819 (980.334.5 10.260 (792) (1.599.341 7.626.365 4.115.383 10.085.430.NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS 9.780.555.628.021.789.302 5.708 8.309 14.066) (8.294.596 7.672) 2.301 55.420) (1.632.142.5 (8.025 9.666.164 1.2 Net investment in finance lease 2009 2008 Not later Later than Over Not later Later than Over than one one and less five Total than one one and less five Total year than five years years year than five years years -----------------------------------------------------------(Rupees in '000)--------------------------------------------------------Lease rentals receivable Residual value Minimum lease payments Financial charges for future periods Present value of minimum lease payments 2.418.594.030.451.019 10.780.683 4.587 196.352 14.142.909) 7.175 12.536 167.478 (762.250.195 3.290 6.079.092.683) 191.924) .523 3.178.055.985 197.2 170.354.979 915.3 1.173 3.927 (470. 2004 issued by the State Bank of Pakistan.713 197.492 181.467.371 9.336 180.597 179.116.164 141.071 820.832 4.017.1.672) 188.169. 10 of 2004 "Revaluation surplus / deficit" dated July 13.164 10.

162 586.826 8.484) 120. 2009 Cost Accumulated depreciation Net book value Year ended December 31. 2009 Cost Accumulated depreciation Net book value 2009 2008 (Rupees in ‘000) c) Future Ijarah payments receivable Not later than one year Later than one year and not later than five years Later than five years 10.811.374 595.718 145.414 9.620 481.936 205.814 205.262 (64.275.4 196.676 197.326 (25.212.3.083 123.676 10. plant and machinery and equipment and are for periods ranging from 3 to 5 years.285.567 (3.991 2. b) Movement in net book value of ijarah assets Asset categories Vehicles Vehicles Plant & Equipment Total Consumer Corporate Machinery --------------------------------(Rupees in '000)-------------------------------660.814 15.515) (211) 946.523 3.716 7.105.585.780 330 481.083 5.998 3.586 billion (2008: Rs 8. 101 132 .752 221.743.993 6.523 3. Ijarah contracts entered on or after January 1. 10.606 7.011.574) 195.484) 120. 105.994 (945) 5.994 (945) 5.723) 625.923 299.017.326 (25.780 330 481. 2009.049 1.620 8.940.038 481.262 (64.017.290 2.606 Annual Report 2009 Category of Classification Other Assets Especially Mentioned (Agri Financing) Substandard* Doubtful Loss *Substandard advances include amount of Rs.3 Financing and investing assets under IFAS-2 (Ijarah) a) Brief description of the ijarah arrangements Ijarah contracts entered into by the Bank essentially represent arrangements whereby the Bank (being the owner of assets) transfers its usufruct to its customers for an agreed period at an agreed consideration.743.011.050 586.122 6.512) (211) 625.748 279.826 8.652 221.24 million. "Ijarah" and presented separately as financing and investing assets as disclosed in note 10.652 660.811.105.122. for which provision has been maintained at 60% of the outstanding balance on SBP's instruction.047 16.936 6.726) 946.122 6. 2009 Opening net book value Additions Disposals Depreciation Adjustment Closing net book value At December 31.989 1.778 1.049 5.536 At January 1.070 15.1 Net investment in finance lease includes ijarah financing made prior to January 1.078.567 (3.374 595.752 123. The significant ijarah contracts entered into by the Bank are with respect to vehicles.375 (34.375 (34. 2009 have been accounted for in accordance with the requirements of IFAS 2.2.767 - Advances include Rs 15.933.574) 195.101.940.050 197.934 billion) which have been placed under non-performing status as detailed below:2009 Classified Advances Provision Required Provision Held Domestic Overseas Total Domestic Overseas Total Domestic Overseas Total -----------------------------------------------------------(Rupees in '000)--------------------------------------------------------145.536 1.NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS 10.290 8.

10. 2009 which is not available for either cash or stock dividend to shareholders amounted to approximately Rs.509 386.942 2.055. banks have been allowed to avail the benefit of 40% of forced sales value of pledged stocks and mortgaged commercial.061 101 133 .net of tax at December 31.606 (30.825) 3.711 225.140.5% of the fully secured performing portfolio and 5% of the unsecured performing portfolio as required by the Prudential Regulations issued by the State Bank of Pakistan.5 Particulars of provision against advances Note Opening balance Exchange adjustment and other movements Charge for the year Reversals / recoveries Amounts written off Closing balance 10.073 1.699 8.645) 8.146 1.440 (868.581 296.488 (494.934.064.1 During the year the State Bank of Pakistan (SBP) has introduced certain amendments in the Prudential Regulations in respect of maintenance of provisioning requirements against non-performing loans and advances vide BSD Circular No.405.549 5. However.672 20. 10 dated October 20.645) 8. 1. 2008.094.049 432 432 3.055.509 22 567.5.1 2009 2008 Specific General Total Specific General Total -----------------------------------------------(Rupees in '000)--------------------------------------------5. 10.907 73.231) 1.875. The benefit of discounted forced sales value of mortgaged industrial properties was previously not available to banks for calculating provisioning requirement.3 Particulars of provisions against advances 2009 2008 Specific General Total Specific General Total -----------------------------------------------(Rupees in '000)--------------------------------------------In foreign currencies 205.873.198 3.100.055.683 Annual Report 2009 In local currency 7. The additional profit arising from availing the FSV benefit . 2009 would have been lower by approximately Rs.029 179.919.098. the specific provision against non-performing loans would have been higher and consequently profit before taxation and advances (net of provisions) as at December 31.332 567.780.051 179.480 4.6.549 5.479.549 5.546. 2009.049 1.615 (494.873.245 22.672 182.598 10.029 4.098.140.459).500.192 8.440 (1.017.919.542.048 4.519.051 567.274.085 265.2 General provision against consumer loans represents provision maintained at an amount equal to 1.781 688.159.997 (439.622 6.055.594) 2. 600.462 1. 2009.892) (291.606 3.444.027 8.291 3.085.035.873.683 10. as per the Circular the additional impact on profitability arising from availing the benefit of forced sales value against pledged stocks and mortgaged residential.140. Had the provision against non-performing loans and advances been determined in accordance with the previously laid down requirements of SBP.099.066 20.409 1.683 3.274.055.825 8.562.127) 763.104 8.5.621 4.598 4.608 3.952) 3.632 39. commercial and industrial properties would not be available for payment of cash or stock dividend.409 4.085.002.146 4.822 (932.169 175.085 64.330) 6.NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS Category of Classification Other Assets Especially Mentioned (Agri Financing) Substandard Doubtful Loss 2008 Classified Advances Provision Required Provision Held Domestic Overseas Total Domestic Overseas Total Domestic Overseas Total -----------------------------------------------------------(Rupees in '000)--------------------------------------------------------167.048 4.038 4.558 182.085.818 51.049 432 432 3.598 83.137) (58.405. Under the previous guidelines issued by SBP which were effective from December 31.731) 2.026.488 million (2008: 404.012 5.391 386. General provision for overseas branches is maintained in accordance with the guidelines of the authorities in the respective countries.957 million.066 280.273 4.380.771.310 2.462 22 567.606 74.228 (439.367 763.085 6.127) (291.047 389.598 43. residential and industrial properties held as collateral against all non-performing loans for 3 years from the date of classification for calculating provisioning requirement with effect from September 30.330) 5.017.638. Under the revised guidelines issued by SBP.811.558 8.047 389. banks were allowed to avail the benefit of 30% of forced sales value of pledged stocks and only mortgaged residential and commercial properties held as collateral against all non-performing loans for 3 years from the date of classification for calculating provisioning requirement.598 1.114.780.606 182.5.728 (1.906 (132.

executives or officers of the Bank or any of them either severally or jointly with any other persons Balance at beginning of year Loans granted during the year Repayments Balance at end of year 2.577 461.063.444.7 Details of loans written-off of Rs. 10.000 and above Write offs of below Rs. executives.8 Particulars of loans and advances to directors.and above 494.1 11. building and machinery.987) 1.552.993.381 432.086.1 Against provisions Directly charged to profit and loss account 10.247 467.511 29.554 8.2 11.2 Write offs of Rs.963 251.1 Annual Report 2009 11.417.5.384) 2.390 80.645 59. 500.462 439.994. partners or in the case of private companies as members Balance at beginning of year Loans granted during the year Repayments Balance at end of year 998.154 12.955 775.923 1.516 554. the Bank holds enforceable collateral in the event of recovery through litigation. Debts due by directors.100.032 2.946 507.265.6.993 2.169 (536.592.298 467.452 220.792 3.225.727 266.369 Total 11 FIXED ASSETS Capital work-in-progress Property and equipment Intangible assets 11.NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS 10.817 554.106.225.4 Although the Bank has made provision against its non-performing portfolio as per the category of classification of the loan.628 In terms of sub-section (3) of Section 33A of the Banking Companies Ordinance.6 Particulars of write-offs 10.330 28.768.474 (998.954 11.994. Note 2009 2008 (Rupees in ‘000) 10. 1962 the Statement in respect of loans written-off or any other financial relief of five hundred thousand rupees or above allowed to a person(s) during the year ended 31 December 2009 is given in Annexure-1.577 Debts due by companies or firms in which the directors of the Bank are interested as directors.454 2.257.417.176.954 101 134 .073.846.154 1.981 (14.774 Capital work-in-progress Civil works Equipment / intangibles Advances to suppliers and contractors Others 662.000 10.792 1.848 14.360. 500.000/. etc.792 1.577 1. These securities comprise of charge against various tangible assets of the borrower including land.462 46. 500.485) 998.102 (659.279 5.5 2.275 2. stock in trade etc.296 15.768.857 13.6.404) 3. associated companies.628 35.

814 75.400) * (9.400) * (9.987) 774.551. 2008 Accumulated depreciation Accumulated Net Book Rate of reversed on depreciation at Value at depreciation revaluation as December 31.460 705.461 2.891 3.672.092 20% 10% .809 (302.060 1.672.631.291 (343.118.872.5% Lease hold improvements Furniture and fixtures Office equipment Vehicles Leased Vehicles 1.268 (10.372 7.536.711.25% 3.762) * 23.115 10.643 (14) * 6.092.109.106.063 1.230.452 2008 Revaluation Cost / Cost/ Accumulated Additions / surplus / revaluation (disposals) / (reversal of Revaluation as depreciation at at January 1.814 4.733) 2.727) * 10.559) * 17.181 342.495. December 31.533.814 37.987) 272.459) * 5.637 (14) * 6. *adjustments accumulated at December January 1.315 2.25% 25% 12.006 37.467.136 108.584 4.094.651.726 7.835.197 (23.581 1.210 2.091 9.681 12.153 272.935 25% 23.154.605 8.605.951 2.189) * 1.823 99.640) (302.628 2.057 6.369) 12.951 108.442 47.399 2.605 8. *adjustments accumulated at December January 1.602 - 1.733) 1.556 1.516.407 657.869 (94) * (325) 37.640) 416. 2009 Accumulated depreciation Accumulated Net Book Rate of reversed on depreciation at Value at depreciation revaluation as December 31.401 Revaluation 3.448) * 41.372 (427) * (15.552 80.630) * 4.200 (242) (1.516.206.283) * (1.692 (94) * (325) 253.873 (113.101 (113.153 (5.693.138 6.312) 1.815 (4. 2009 2009 depreciation) 31.187 75.838 103.159 98.354 2.5%-5.233 (2.814 - 26.207.25% 20% .873 (302.584 3.176.5% Description Office premises 3. 2008 2008 depreciation) 31.835.153 26.129 73.496.551.561 (2.358 (429.718 224.089) 4.581 165.026.218.109.581 (7.671 12. 2009 per annum -----------------------------------------------------------(Rupees in '000)--------------------------------------------------------Depreciation for the year/ (on disposal)/ *adjustments 272.5% Description Office premises Revaluation 4.362 301.540.219 23.174.681 (189.283 14.873 (302.298 13.372 (427) * (15.829.179 903.765 165.5%-5.610 - 315.516) * (28.762.182 140.089) 4.994 111.5%-5.883 705.479 20% .372) 4.063 449.957) * 5.288 2.814 3.589.605.352 320.997 342.25% Vehicles Leased Vehicles 563.695.2 Property and equipment 2009 Revaluation Cost / Cost/ Accumulated Additions / surplus / revaluation (disposals) / (reversal of Revaluation as depreciation at at January 1.5%-5.061 315.826 246.161) * 4.584 3.259 (2.206.399 (86.028) * 16. % 2009 at December 2009 31.089) - 1.646 184.455) (188.430 10% .997 845.364 61.288 750.128 17.372 7.310 (188.259) * (30.567 8.556 2.230.024 (4. December 31.442 3.008 (1.060) (1.985.401 189.693.185 145.807 (61.857 (57. 2008 per annum -----------------------------------------------------------(Rupees in '000)--------------------------------------------------------Depreciation for the year/ (on disposal)/ *adjustments 824.340) 509.NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS 11.896) * 14.662 (178.963 25% 135 101 Annual Report 2009 . % 2008 at December 2008 31.533.041.092.089) 16.479.648 (280.831 482.293.085 - 1.449) 4.528 (10.818 (109.202) 48.718 3.641 100.393 (34.5% Lease hold improvements Furniture and fixtures Office equipment 1.819 719.010 1.046) * 14.283 14.053) * 4.460 3.218 149.656) 2.153 (5.490 416.449) 416.445 - 3.385.613 (49.876) * 9.736) 733.744) * 6.006 414.391) * (15.340) 824.792 8.369) * 1.372 - 3.066 20% 766.044.872.026 (209.699 11.695 (72.185 1.823 85.885 (7.646 184.919 758.000 7.

040 66.409 94.28 million).207 * (146) 66.031 209. 250. (Related party) 101 136 .800 * (169) 56.4 Included in cost of property and equipment are fully depreciated items still in use having cost of Rs.349 million (2008: Rs.031 31.091 31.000 or net book value of Rs.873 million.362 million).857 31.949 145.831 * (169) 145.091 153.031 106.000 or net book value of Rs.040 56. 416.188 million (2008: Rs.6 11.031 201. Had there been no revaluation.000 or above Details of disposal of fixed assets having cost of more than Rs. Details of disposal of fixed assets having cost of more than Rs.000 251. 115.000 452. 1.848 20% 11. 250.071 220.113 * (61) 35. Intangible assets 2009 COST ACCUMULATED AMORTIZATION Additions/ Rate of Opening (Deletions)/ Closing Opening Amortization Closing Book value amortization (Deletion) / Balance * Adjustment Balance Balance * Adjustment Balance at closing % ---------------------------------------------(Rupees in '000)------------------------------------------365.031 31. 736.000 or above are given below: Annual Report 2009 Description Accumulated Net book Sale depreciation value proceeds ------------------------(Rupees in '000)------------------------Cost 427 14 413 275 Mode of Disposal Particulars of purchaser Office premises Broken Glass Insurance claim M/s Alfalah Insurance Ltd.071 - 56. 104.928 - 56.865 * (59) 56.896 * (59) 365.897 56. 1.857 20% Goodwill Membership card 11.848 - 2008 COST ACCUMULATED AMORTIZATION Additions/ Rate of Opening (Deletions)/ Closing Opening Amortization Closing Book value amortization Balance * Adjustment Balance Balance * (Deletion) / Balance at closing Adjustment % ---------------------------------------------(Rupees in '000)------------------------------------------Computer software 212.101 189.3 11.5 Computer software Goodwill Membership card 56.000 243.132 - 31.000. 4.7 Included in cost of intangible assets are fully amortized items still in use having cost of Rs.409 50.928 94.031 267.897 35.NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS 11.672.031 31. 1. During the year office premises have been revalued on December 30.031 201. 2009 on the basis of market value by Harvester Services (Private) Limited. the carrying value of office premises would have been Rs.113 * (61) 400.000.000 220. Valuation and Engineering Consultant which has resulted in a surplus on revaluation of Rs.207 * (146) 211.000 452.000 487.980 - 56.951 million.

914 4.223 1. 1.437 Various As per Bank Policy Bid As per Bank Policy Bid As per Bank Policy As per Bank Policy Bid Bid Bid As Per Bank Policy Insurance Claim Bid Bid Bid Bid As Per Bank Policy Various Mr. (Related party) M/s Alfalah Insurance Ltd.576 2.Tariq Latif Mr.734 12.388 521 449 1. 250.) Limited Mr.673 10. (Related party) 1. Sohail Rizvi M/s Alfalah Insurance Ltd. Majedur Rahman.279 34. 1.028 1.357 319 517 1. 250.131 1. (Related party) Rana Abdul Qayyum M/s Alfalah Insurance Ltd.) Limited Mr. Sohail Mairaj Qureshi M/s Al Razi Health Care (Pvt. Ex Country Head Bangladesh M/s SGM Sugar Mills Mr.NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS Description Accumulated Net book Sale depreciation value proceeds ------------------------(Rupees in '000)------------------------Cost 414 3. Muhammad Saeed M/s Taavun (Pvt.000 or cost of less than Rs.259 3.868 505 292 333 627 563 795 265 453 752 263 463 453 353 346 544 7.122 10.391 3.992 4.050 192 31.955 521 689 2.619 13.369 2.992 Various Various Insurance Claim Insurance Claim Insurance Claim Negotiation Bid Bid Bid Negotiation Negotiation M/s Alfalah Insurance Ltd.000 Furniture and fixtures Items having book value of less than Rs.369 73 56 322 467 597 838 549 7. (Related party) Rana Abdul Qayyum Askari Bank Limited Bashir Ahmed & Co M/s Mearud Engineering M/s H.000 or cost of less than Rs.988 1. Kashif Iqbal Mr.182 1. 101 137 Annual Report 2009 .000 or cost of less than Rs.357 4.000 7.000.588 627 - Mode of Disposal Particulars of purchaser Leasehold Improvements Renovation Work Renovation Work Renovation Work Renovation Work Renovation Work Renovation Work Renovation Work Renovation Work Items having book value of less than Rs.007 6.000 Office equipment ATM machine ATM machine ATM machine Diesel generator Diesel generator Diesel generator Diesel generator HVAC Transformer Items having book value of less than Rs. (Related party) M/s Alfalah Insurance Ltd.097 307 792 293 333 628 563 830 727 825 746 540 735 735 700 882 801 10.576 307 4.596 49. 1.200 1. Hasan Riaz M/s Al Razi Health Care (Pvt.876 474 38.785 Various Various 7.727 4.000 Vehicles Honda Accord Honda City Honda City Honda City Honda City Honda City Honda City Honda City Honda City Honda City Honda City Honda City Honda City Honda City Honda City Honda City Balance carried forward Insurance Claim Write Off Negotiation Write Off Insurance Claim Write Off Write Off Write Off M/s Alfalah Insurance Ltd.152 378 32.914 741 758 860 733 298 362 451 1.050 30.000.A Constructions Rana Abdul Qayyum 17. Muhammad Tariq Mr.950 1.606 23. 250.) Limited (Related party) Mr Atta-Ur-Rehman * Disposal as per Bank's policy represents vehicles sold to employees as per the terms of their employment.146 428 558 568 306 338 113 636 448 182 571 459 448 583 553 390 9.283 814 814 1.183 6.200 895 1.146 933 850 901 933 901 908 901 901 934 834 922 901 936 899 934 16.005 733 365 362 585 600 1.299 2. (Related party) Mr.) Limited M/s SGM Sugar Mills M/s Al Razi Health Care (Pvt.181 567 240 235 216 282 1.000.266 132 2.233 37.283 7.

000 or cost of less than Rs.063 14. Riaz-Ul-Haq Mr. 101 138 .564 49.070 1.920 72.437 795 366 584 600 843 816 930 850 619 507 292 653 620 617 679 651 636 40.300 338.533 372.755 450.December 31. Muhammad Tariq Mr.229 1.115 11.591 6 11.052 1.845 112.564 53. Muhammad Tariq Syed Shah Ali Murtaza Mr.054) (282.525.279 1.1 12. The management is evaluating the possibility to realise the benefit of this property through continuing use rather than through a sale transaction.777.222 2.086 12.066 92. Irfan Ahmad Mr.046 Mode of Disposal Particulars of purchaser Balance brought forward Honda City Honda City Honda Civic Honda Civic Honda Civic Honda Civic Honda Civic Honda Civic Suzuki Cultus Suzuki Cultus Suzuki Cultus Suzuki Cultus Suzuki Cultus Suzuki Cultus Toyota Corolla Toyota Corolla Toyota Corolla Items having book value of less than Rs.189 1.169 2. Hassan Mobeel Alam Mr.448 7.165 878 1. Muhammad Saeed Mr. Qasim Masud Mr.000. Salman Aftab Rao Mr.165 1.333 649.294 1.656 894 113.195 1. Ausaf Muzammil Mr.290 81.301.516 429.818 2.463 149.823 467.801 23. 1.052 1.243) (541.502 5.902.1 This includes a property acquired from a customer in satisfaction of claims amounting to Rs.873.512.386 576.314 10.734 909 901 1.240.618.983 86.933 302.189 1. M.741 14.NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS Description Accumulated Net book Sale depreciation value proceeds ------------------------(Rupees in '000)------------------------Cost 16.426 156.December 31.532) 10.496 7.142 161.157.Babar Mr.298 818 69.000 Vehicle .727 248 629 1.063 974 244 245 263 115 231 230 1.146 196. 220 million (2008: Nil).060 178. 2009 .053 280. Zulifqar Ali Mr.161 61.064 230. Atal Shahzada Various Takaful Pakistan Limited * Disposal as per Bank's policy represents vehicles sold to employees as per the terms of their employment.762 9.195 1. Fawad Mazhery Mr. deposits.459 1.755 (2.255.2 Annual Report 2009 10.920 3. advance rent and other prepayments Assets acquired in satisfaction of claims Advances against future Murabaha Advances against future Ijarah Advances against Diminishing Musharakah Branch adjustment account Tax recoverable Dividend receivable Prepaid exchange risk fee Stationery and stamps on hand Trade debts Others Less: Mark up held in suspense account Provision held against other assets 2009 2008 (Rupees in ‘000) 12.311 233.714.007 661 272 124 7 68 317 317 292 471 324 325 50 4. Muhammad Ajmal Mr.042 561 562 555 586 555 555 1. Muhammad Tariq Syed Shah Ali Murtaza Mr.leased Honda City Total .672 (1. 250.161 242 109.002 1.959 17. Note 12 OTHER ASSETS Income / mark-up accrued in local currency Income / mark-up accrued in foreign currency Advances.016) 14.S. 2008 Bid As Per Bank Policy Bid Bid Bid Bid Bid Bid Bid As per Bank Policy As per Bank Policy Bid Bid As per Bank Policy Bid Bid Bid Various Insurance claim Mr.

764 101 139 .921 18.688.975 3.887 189.016 514.887.5 15 This facility is secured against a demand promissory note executed in favour of the State Bank of Pakistan.927 Annual Report 2009 11.532) (258.600 1.832.5% per annum) payable on a quarterly basis.3 14.532) 13 BILLS PAYABLE In Pakistan Outside Pakistan 3.167 14.167 14.748 25.652.837 300.40% per annum (2008: 7.321 20.753.247 14 BORROWINGS In Pakistan Outside Pakistan 14. This facility is secured against a demand promissory note executed in favour of the State Bank of Pakistan.080 472.167 14.056 223.280 40.non-remunerative Others Financial institutions Remunerative deposits Non-remunerative deposits 121. DEPOSITS AND OTHER ACCOUNTS Customers Fixed deposits Savings deposits Current accounts .789.601 1.849 25.689 78.890 4.653.080 686.071.3 14.NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS Note 2009 2008 (Rupees in ‘000) 12.866 75.247 13.601 1.5 8.90% per annum) maturing by July 2010 (2008: January 2009).2 Details of borrowings secured / unsecured Secured Borrowings from financial institutions Borrowings from State Bank of Pakistan under: Export refinance scheme Long Term Finance for Export Oriented Projects Scheme (LTF-EOP) Long Term Finance Facility Repurchase agreement borrowings Unsecured Call borrowings Overdrawn nostro accounts 14. The markup rate on this facility ranges from 4% to 5% per annum (2008: 4% to 6.766.071.080 686.921 381.151 986.709.085.257 3.610 18.385.320 20.921 3.887.729.5% per annum) payable on a quarterly basis.305 1.513 9.5% to 8% per annum (2008: 6.314.340 88.50% to 14.766.662 559.468 289. This represents repurchase agreement borrowings from other banks at rates ranging from 11.320 20.436 83. The markup rate on this facility ranges between 7.910.743.385.4 14.809.966.228.223 13.576.031 13.2 Movement in provision held against other assets Opening balance Charge for the year Closing balance (282.715.1 Particulars of borrowings with respect to currencies In local currency In foreign currencies 14.488.50% to 12.766.729.484) (541.025 7.867 200.247 14.611 470.133.152 7.653.416.144 18.224) (282.570.308) (271.653.444.071.313.595.016) (11.687.199 298.089 11.698 4.4 14.618 86.016 157.716 324.673 25.452.389 116.905.

309.080 Subordination Issue Date Rating Tenor Redemption Maturity Term Finance Certificates III .NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS 2009 2008 (Rupees in ‘000) 15.247.852 324.492 50.089 1.323. In case of occurrence of default. December 2004 AAEight years 3 equal semi-annual installments commencing 84th month after the issue date.537 61. December 2012 1.389 249.50 percent (Base Rate is defined as the simple average of the ask rate of the six months KIBOR prevailing on the first day of the start of each half yearly period and mark up due at the end of that period) The TFCs are subordinated as to the payment of principal & profit to all other indebtness of the bank.Quoted.743. Unsecured Mark up Base Rate + 1.272 300.1 Particulars of deposits In local currency In foreign currencies 263. November 2013 Subordination Issue Date Rating Tenor Annual Report 2009 Redemption Maturity 101 140 .248.50 percent (Base Rate is defined as the simple average (average of the KIBOR Rate quoted by banks for that day) of the ask rate of the six months Karachi Interbank Offer rate (KIBOR) prevailing on the first day of the start of each half yearly period for mark up due at the end of that period) The TFCs are subordinated as to the payment of principal & profit.869. November 2005 AAEight years 3 equal semi-annual installments commencing 84th month after the issue date.600 1.Quoted.322.860.433. Unsecured Mark up Base Rate + 1.764 16 SUB-ORDINATED LOANS Term Finance Certificates II .729.581 1. the TFC holder will rank below the senior unsecured creditors and depositors and other creditors of the Bank.

912 (1.487 585.397.171 (2.309) (71.469 (4.187 (603) 14.306.000.611 2.000 - 7.753 2.584 - 12.201) (638) (240.630.603) (1.488) (2. December 2009 AAEight years 3 equal semi-annual installments commencing 84th month after the issue date.550) (566) (5.246 778.147) 208.811.917) 18.570.169 LIABILITIES AGAINST ASSETS SUBJECT TO FINANCE LEASE 2009 2008 Not later Later than Over Not later Later than Over than one one and less five Total than one one and less five Total year than five years years year than five years years -----------------------------------------------------------(Rupees in '000)--------------------------------------------------------Minimum lease payments Financial charges for future periods Present value of minimum lease payments 5.Floating coupon of Base Rate + 2.991) 4.386) (13.010) 17.670.Private.281 .774 7.188 1.Fixed coupon of 15 percent per annum payable semi-annually in arrears Subordination Issue Date Rating Tenor Redemption Maturity 17 The TFCs are subordinated as to the payment of principal & profit to all other indebtness of the bank.307 15.959 (1.167) (3.358 18 DEFERRED TAX LIABILITIES Deferred credits arising due to Difference between accounting book value of leased assets and lease liabilities Accelerated tax depreciation Surplus on revaluation of operating fixed assets Deferred debits arising due to Provision for doubtful debts Provision against other assets Provision against off-balance sheet obligations Impairment in the value of Investment Unrealized loss on revaluation of investments classified as held for trading / transferred from held for trading to available for sale Leased assets Taxable loss Deficit on revaluation of securities Note 2009 2008 (Rupees in ‘000) 283.50 percent (Base Rate is defined as the simple average of the ask rate of the six months KIBOR prevailing on the first day of the start of each half yearly period and mark up due at the end of that period) .152 21.428 (1.529 723.462.969) (504.298 (1.497 (10.185) 8.1 101 141 Annual Report 2009 (63. December 2017 5.146 (1.788) 6.732.181 2.348) (4.NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS 2009 2008 (Rupees in ‘000) Term Finance Certificates IV .571.019) 13.772 1.666) 774.459 4. Unsecured Mark up Either of the following options with the holder: .168) 369.404.

267 199. During the current year.321. - - In view of the aforementioned clarification. shall be excluded in computing the total income of that tax year under Rule 1 of the Schedule. Through the Finance Act.016 1.601 3. This issue had been taken up with the tax authorities through the Pakistan Banks' Association for formulation of transitory provisions to deal with the items which were previously treated differently under the applicable provisions.623 63.621 280.601 28. was inserted in the Income Tax Ordinance. 2009 has clarified that the: amount provided for in the tax year 2008 and prior to the said tax year for or against irrecoverable or doubtful advances which were neither claimed nor allowed as a tax deductible in any tax year.2 Annual Report 2009 This represents amounts payable to brokers against purchase of shares.2 29. which were neither claimed nor allowed as a tax deductible in any tax year. Provided that un-absorbed depreciation in respect of such assets shall be allowed to be set-off against the said lease rental income only. 2007 and certain other matters including treatment relating to leases disbursed by the bank.076 10. the provisions of the Seventh Schedule shall not apply to any assets given or acquired on finance lease by a banking company upto tax year 2008 and recognition of income and deduction in respect of such asset shall be dealt with in accordance with the provisions of the Income Tax Ordinance 2001 as if this schedule has not come into force. 2007 the 7th Schedule (the 'Schedule').628 379.142 101 142 .409 14.142 900 (1.759 133.081 3.582 38.845 38.677 11.959 2.NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS 18. The Schedule did not contain transitory provisions to deal with the disallowances made upto December 31.095 44.1 19.419) 37.345. which were written back in the tax year 2009 and thereafter in any tax year and credited to the profit and loss account. amounts provided for in the tax year 2008 and prior to the said tax year for or against irrecoverable or doubtful advances. Provision against off-balance sheet obligations Opening balance Exchange adjustment Charge / (reversal) for the year Closing balance 38.693 620. 4(I)ITP/2008-49 dated December 23.319. shall be allowed in the tax year in which such advances are actually written off against such provisions.055.007 55.070 45. deferred tax on timing differences relating to prior years has been retained by the bank. 2001 for the taxation of banking companies.142 106. in accordance with the provisions of Section 29 and 29A of the Income Tax Ordinance 2001.489 19.091.246 19 180. The schedule seeks to simplify the taxation of banking companies and is applicable from the tax year 2009. Note 2009 2008 (Rupees in ‘000) 19 OTHER LIABILITIES Mark-up / return / interest payable in local currency Mark-up / return / interest payable in foreign currency Unearned commission and income on bills discounted Accrued expenses Current taxation Payable against redemption of credit card reward points Branch adjustment account Security deposits against leases Exchange difference payable to SBP Payable to brokers Unrealized loss on forward exchange contracts Provision against off-balance sheet obligations Workers Welfare Fund Others 19.455 360. No.133 151.028 4.1 4.660 171.1 19.1 18. the Federal Board of Revenue (FBR) through their letter F.561 496.983.833 4. The tax benefit for this amount will be allowed upon disposal of these investments.260 280.623 6.350 37.2 This includes deferred tax in respect of impairment recognised in value of investment which has been written off in the books of the Bank.096.

000 624. subscribed and paid up capital Ordinary Shares of Rs.2 2.500.753 151. 21 SURPLUS ON REVALUATION OF ASSETS .997.500.500 6.500.000 20.611 2.000.244.858 723.10 each 2009 2008 (Number of shares) 225.000 1.568.000 399.994 201.499.300.995.973 101 143 Annual Report 2009 Related deferred tax liability on surplus as at January 1 Deferred tax liability booked / (reversed) Related deferred tax liability in respect of incremental depreciation charged during the year .000 2.726 712.250.605 585.000.Available-for-sale securities 21.each 23.491.824) 3.726 (24.500 5.562) 585.000 Issued.809.750.696) (13.000 149.154.250.500.000. 10/.000.250.550 (24.238) (37.238) (126.745.2 1.000 shares.000 4.250.406.000 799.156 (13. representing rights relating to applications rejected and missing from the offer for sale of shares.000 3.500.Fixed assets .000.250 225.000.000 15.769) 2.1 Authorized Capital 2009 2008 (Number of shares) 2. These shares are subject to all corporate actions applicable to all other ordinary shares.906.250 1.000 1.298) 137.000 225.1 21.000 149.011.315 (113.247.298) 416.750.879 3.156.000.973 (189.1 Surplus on revaluation of fixed assets Surplus on revaluation of fixed assets at January 1 Transferred to retained earnings in respect of incremental depreciation charged during the year Related deferred tax liability in respect of incremental depreciation charged during the year Surplus on revaluation of fixed assets recognized during the year 21.116 3.250 724.873 378.994 2.000 This includes 8.495.379. These right shares will be offered to those applicants who were allotted/ offered shares in accordance with the directives / guidance of the Securities and Exchange Commission of Pakistan.154.533.000 574.563 2.349.745.000.568.NET OF TAX Surplus / (deficit) arising on revaluation of: .000 Ordinary shares Fully paid in cash .122 3.586) (13.000 5.000 7.during the year Issued as bonus shares .063 7.324) (13.during the year 2.063 13.192.at the beginning of the year .000 425.000 574.000 Ordinary shares of Rs.809.204 3.NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS Note 2009 2008 (Rupees in ‘000) 20 SHARE CAPITAL 20.753 2.at the beginning of the year .

066 41.360 101 144 .416 996.386.374 (124.974 32.623 31.122 (299.282) (26.488 (132.493) 413.757) (57.836 8.NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS 2009 2008 (Rupees in ‘000) 21.529 959.classified as 'available for sale' (22.769) 22 22.385.113.920 7.049.577 354.879 53.507 22.298 5.109 35.771 22.252.117.338.4 Other contingencies Claims against the Bank not acknowledged as debts 3.468.686.5 Annual Report 2009 Commitments in respect of forward lendings Forward repurchase agreement lendings Commitments to extend credit 6.118.245) 71.175 1.843 2.659 3.129 2.559.081.372 22.330 4.938) (126.418.490 3.940.058.quoted Sukuk bonds Surplus on: Quoted shares / units / certificates Term finance certificates .031) 230.200 3.179.910 556.2 Transaction-related contingent liabilities i) Government ii) Banking companies & other financial institutions iii) Others 44.428) (10.470 276.371 154.726) 190.012) (189.747.1 CONTINGENCIES AND COMMITMENTS Direct credit substitutes i) Government ii) Banking companies & other financial institutions iii) Others 2.947.452.371 22.343 (29.221) 201.3 Trade-related contingent liabilities Letters of credit Acceptances 35.quoted Sukuk bonds Related deferred tax asset / (liability) Share of surplus / (deficit) on associates' investments .454 342 (204.2 Surplus / (deficit) on revaluation of available-for-sale securities Deficit on: Government securities Quoted shares / units / certificates Term finance certificates .

Exchange rates and forward margins are determined in the "interbank" market and fluctuate according to supply and demand.674 2.770.598 57.514 9. However. 2.518. 24 MARK-UP / RETURN / INTEREST EARNED a) On loans and advances to: i) customers ii) financial institutions b) On investments in: i) held for trading securities ii) available for sale securities iii) held to maturity securities iv) associates and subsidiary c) On deposits with financial institutions d) On securities purchased under resale agreements e) Profit earned on ijarah assets net of depreciation f) Interest Income g) Income from Continuous Funding System 24.288 4.023 5.Foreign Exchange Swaps Forward Exchange Contracts: Forward exchange contract is a product offered to customer backed by international trading contract.NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS Note 2009 2008 (Rupees in ‘000) 22.033.822.552.528. Foreign Exchange Swaps: A Foreign exchange Swap (FX Swap) is used by the Bank if it has a need to exchange one currency for another currency on one day and then re-exchange those currencies at a later date.554. In addition to this.435 3.716 29. 3.558.2 25.9 23 Other Commitments Donation DERIVATIVE INSTRUMENTS The Bank at present does not offer structured derivative products such as Interest Rate Swaps.810 711 1. These customers use this product to hedge themselves from unfavorable movements in foreign currencies.485 9.8 Commitments for the acquisition of operating fixed assets Commitments in respect of repo transactions Repurchase Resale 22.491 355.000 17.284 513.104 308.096 million) which pertains to the Bank's Islamic Banking Division. dealers.221 10.292 31.017.831 11.376 22.943. In order to mitigate this risk of adverse exchange rate movements the Bank hedges its exposure by taking forward position in inter bank market.726 35.539.925 2.071 3.406.Forward Exchange Contracts .346 562.161.792 730.373.840 298. the exposure is also managed by matching the maturities and fixing the counter parties.742 2.930 22.710.459. Forward Rate Agreements or FX Options.1 These include mark-up earned of Rs.293 10.7 22.925 367.184.370. the Bank's Treasury buys and sells derivative instruments such as: . intra-day and overnight limits.900 million (2008: Rs.6 Commitments in respect of forward exchange contracts Purchase Sale 19.752 Annual Report 2009 24.429 - 22. 101 145 .901 3.

212 214.1 28.500 850 2.363 424.753 449.400 (64.166.306.194 3. etc. telex service charges etc.1 Annual Report 2009 Donations Kashmir Education Foundation Marie Adelaide Leprosy Center.674 21.732 1.210.803 189.954 850 720 11.110 9.180 164.317 24.000 12.067 1.585 1. travelling and subscription Others 35.092 639.636 60. vehicle running expenses.Market Treasury Bills .671 856.207 320. Larkana Publician Alumni Trust .059 1.592 165.385.570 41 253.218.848 51.237 14.143 587.709.157 25 MARK-UP / RETURN / INTEREST EXPENSED Deposits Securities sold under repurchase agreements Other short term borrowings Term Finance Certificates Brokerage and Commission Others Financial charges 26 GAIN ON SALE OF SECURITIES Federal Government Securities .614 9.2 11.831 458.878 18. 101 146 .143 1. Charge for defined benefit plan Contribution to defined contribution plan Rent.638.Listed .713 745. allowances.303 60.112 35.657 646.5 28.7 36 28.601 1.310.790 1.967 176.560 4.202 303 1.321 472.966 532.558 43.350 27 OTHER INCOME Gain on sale of property and equipment Postage.420 468.872 170.883 108.648 106.Unlisted Sukuk Bonds 8.Pakistan Investment Bonds Shares .2 Profit earned on ijarah assets Lease rentals earned Depreciation for the year 94. taxes.818 66.801 14.009.832 1.922.926 149.443 909 1.726) 29.722 408.247. electricity.835 407.979.522 472.121 48.352 156.056 11.394 171.798 80. etc.349 20. Legal and professional charges Communications Repairs and maintenance Stationery and printing Advertisement and publicity Donations Auditors' remuneration Depreciation Amortization of intangible assets Entertainment. insurance.263.556.2 11.479.416. Provision no longer required written back Custody services 28 ADMINISTRATIVE EXPENSES Non executive director fee & allowances Salaries.010 371.854 142.961 577.000 690.373 12.NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS Note 2009 2008 (Rupees in ‘000) 24.354 4.Cantt Public School Institute of Business Administration None of the directors or their spouses had any interest in the donees.673.239 2.350 13.570 13.

621 122. 230 million which represents provision made in prior years in respect of this matter.454 16.562 1. 2007. Subsidiary Annual Report 2009 30 1. the CIT (Appeals) has decided the issue regarding allocation of expenses to exempt capital gain and dividend income for the tax years 2004 to 2008 in favour of the Bank. The Income Tax Department.260 79.361) (221.845 835 3.853 9.194 63. bad debts written off and disallowance relating to profit and loss expenses.585 3. The returns may be selected for detailed audit within five years. Income Tax Appellate Tribunal (ITAT) and High Court of Sindh.741. During the year.758 29.210 4.691 (179.725 1.401) (936.067 29 OTHER CHARGES Penalties imposed by State Bank of Pakistan Workers Welfare Fund 16.603) (295.326 (1. 1971 has been amended vide Finance Act. Matters of disagreement exist between the Bank and the tax authorities for various assessment years and are pending with the Commissioner of Income Tax (Appeals). 2008 by virtue of which the Bank is now liable to pay WWF @ 2% of profit before tax as per accounts or declared income as per income tax return. whichever is higher.1 The Worker's Welfare Ordinance.900) 208. adequate provision has been made in the financial statements in respect of these matters. 2006. taxability of profit on government securities. which provides that return filed is deemed to be an assessment order.462 The income tax returns for tax years 2005.2 Auditors' remuneration Audit fee Half yearly review Special certifications and sundry advisory services Out-of-pocket expenses Fee for audit of foreign branches 3.365) 756. TAXATION For the year Current Deferred For prior years Current Deferred Share of tax of associates Bank The income tax assessments of the Bank have been finalised upto and including tax year 2009. The Income Tax Commissioner may amend assessment if any objection is raised during audit. has filed an appeal before the ITAT against the order which is currently pending for adjudication.674) 181.868 10.375 13. the Bank has written back an amount of Rs. being aggrieved with the order of CIT (Appeals). Tax return for the tax year 2005 has been selected for audit by the tax department and proceedings in this respect are in progress.137 106.568 1. 101 147 .184 (85.NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS 2009 2008 (Rupees in ‘000) 28.071. 2008 and 2009 have been filed under the Universal Self Assessment Scheme. However.151.160 (537.483 535. However.273 2. the management is confident that the decision will ultimately be made in favour of the Bank and that the Bank will not be exposed to any loss in this respect. As a result of this decision.870 925 2.794 13.787) 136. Other issues mainly relate to addition of mark-up in suspense to income.

927 3.08) (Rupees in ‘000) 0.342 21.106 29.010 89.579 883 7.462 2.444 PACRA has assigned a long term credit rating of AA [Double A] and a short-term credit rating of A1+ (A one plus) to the Bank as at June 2009 (2008: AA [Double A]) for long term and A1+ [A one plus] for short term).income chargeable to tax at reduced rates .1 Relationship between tax expense and accounting profit Profit before tax Tax at the applicable rate of 35% (2008: 35%) Effect of: .623) 160.722.tax charge pertaining to overseas branches .income exempt from tax .336 1.924 (104.602 3.089 9.267.others Tax expense for the year 437.664 (85.tax effect of income assessed under final tax regime .056.deferred tax asset not recognised .904) 28.584 2.145) 18.587.577 38.552 Basic / Diluted earnings per share 32 CASH AND CASH EQUIVALENTS Cash and balances with treasury banks Balances with other banks Call lendings 33 CREDIT RATING (0.810 573 56.248 7.348 32.396 61.085 9. 34 STAFF STRENGTH Permanent Temporary / On contractual basis Bank's own staff strength at the end of the year Outsourced Total staff strength 2009 2008 (Number of employees) Annual Report 2009 6.462 31 BASIC / DILUTED EARNINGS PER SHARE Profit after taxation for the year (97.710.211 73.551 6.168 15.permanent differences .NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS 2009 2008 (Rupees in ‘000) 30.533 (Rupees) 923.272 2.182 (62.200 408 91.489.687.share of profit / loss of associates either exempt from tax or taxed at reduced rates .289 208.315.099 535.542 (179.025 22.674) 428.664 153.669 101 148 .352) 18.03 35.tax for prior years .568 211.584.795 (Number of shares in thousand) Weighted average number of ordinary shares 1.500 57.

926 (142.369 115.682) (1.415) 546.534) (28.352 (189.4 Movement in fair value of plan assets Fair value at the beginning of the year Expected return on plan assets Contributions Benefits paid Actuarial gain / (loss) on plan assets Fair value at the end of the year 35.853 18. was used for the valuation of the defined benefit plan: 2009 2008 Discount factor used Expected rate of return on plan assets Expected rate of salary increase Normal retirement age 35.352) - 50.272) (267.844 40.719 54.000 157.272 70.5 Plan assets consist of the following: Defence Savings Certificates Ordinary shares of Bank Alfalah Limited Term Finance Certificates Term Deposit Receipts Pakistan Investment Bonds Alfalah GHP Value Fund Alfalah GHP Alpha Fund Alfalah GHP Principal Protected Fund II Cash and bank 35.534) 68.527) (132.00% 15.403) (106.527) (3.747 468.00% 60 Years 15.935) 696.346 102.2 Reconciliation of payable to defined benefit plan Present value of defined benefit obligations Fair value of plan assets Net actuarial losses not recognized Past service cost not yet recognized 35.NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS 35 35.730) 802.893 27.352 (27.3 Movement in defined benefit obligation Obligations at the beginning of the year Current service cost Interest cost Benefits paid Actuarial (gain) / loss on obligation Obligations at the end of the year 35.203 737.795 189.926 (34.926) - 101 149 . using the following significant assumptions.945 24. However.574 278.249 110.00% 14.281 142.605 (27.536 696.272 27.212) 468.1 DEFINED BENEFIT PLAN Principal actuarial assumptions The subsidiary does not have any defined benefit plan for its employees.00% 15.00% 14. 2009.241 189.693 24.635 (34.811 35.00% 60 Years (Rupees in ‘000) 802.000 72.385 207.966 (696. the latest actuarial valuation of the Bank's gratuity scheme was carried out as at December 31.403 352. Projected unit credit method.403 189.369 (468.369 468.6 Movement in payable to defined benefit plan Opening balance Charge for the year Bank's contribution to fund made during the year Closing balance 14.563) 737.144 18.966 737.266 26.272 Annual Report 2009 142.

593 718 266.191 183. During the year.555.403 (106.NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS 2009 2008 (Rupees in ‘000) 35.719 54.8 35.673) 366. between knowledgeable willing parties in an arm's length transaction.415 142.354 3 14.560 3 128.718 1. except for tradable securities classified by the Bank as 'held-to-maturity'.437 952.563) 132. These securities are being carried at amortised cost in order to comply with the requirements of BSD Circular No.623 719 The Chief Executive and certain Executives have been provided with the free use of cars and household equipments as per the Group's policy.286 3. 38.665 (77.707 310.767 1.287 9.415 189.9 Actual return on plan assets Historical information 2009 2008 2007 2006 2005 --------------------------------(Rupees in '000)-------------------------------- Defined benefit obligation Fair value of plan assets Surplus / (deficit) Experience adjustments on plan liabilities Experience adjustments on plan assets 36 DEFINED CONTRIBUTION PLAN 802.551) (45.811 (193.203) (28.460 103.272 (269. 156.33% of basic salary in equal monthly contributions.151) (7) 261.212) 546.915 298.560 14.535) (87. 38 Annual Report 2009 FAIR VALUE OF FINANCIAL INSTRUMENTS Fair value is the amount for which an asset could be exchanged.517 10. the Group contributed Rs.438 1. The fair value of traded investments is based on quoted market prices.14 dated September 24.324 1.935) 737.410 3. 37 COMPENSATION OF DIRECTORS AND EXECUTIVES Chief Executive Directors Executives 2009 2008 2009 2008 2009 2008 ----------------------------------------(Rupees in '000)---------------------------------------- Fee Bonus Managerial Remuneration Post employment benefits Rent and house maintenance Utilities Medical Allowance Number of persons 1.069 35.730 (3.016 70.395 70.526) (29.771.778 2 14.354 14.757 (115.7 Charge for defined benefit plan Current service cost Interest cost Expected return on plan assets Actuarial losses Past service cost 115.369 468.346 352.306 102.308 250.832 million (2008: Rs.394) (2.020.926 7.281) 19.635 (35.605 (70.1 101 150 .966 696. 149.974 2 7.513 1.249 110.352 66.143 million) in respect of this fund . or a liability settled.018 1.097) (68.548) 174 The Group operates an approved provident fund scheme for all its permanent employees to which both the Group and employees contributes @ 8.839 960 34 23.719 930 34 16.241) 32.333 105.673 1. 2004.

456.583.887.899 287.683 449.664 2.612.925 8.142 12.584 319. other assets.887.616 937.799 10.64% 5. 2009 2008 Book value Fair value Book value Fair value ------------------------------Rupees in '000------------------------------ 38.711.072 1.437 367.731 25.917 18.545.043 10.829) 344.221 17.211 288.440 10.598 40.908 6.118 35.914 (1.021) 7.294.934.664 224.499 (578.746 37.46% 12.415 332.717. other liabilities and fixed term deposits cannot be calculated with sufficient reliability due to absence of current and active market for such assets and liabilities and reliable data regarding market rates for similar instruments.337.294 1.28% 16.319.925 10.623 305.459.780.978.027.452.918.4 to these financial statements.395.949.540.558.609 19.250 40.585.284 10.509) 211.49% 8.351.57% 101 151 Annual Report 2009 .NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS Fair value of unquoted equity investments is determined on the basis of break up value of these investments as per the latest available audited financial statements.523.672 675.263 17.017 5.42% 7.669 26.267 15.467.05% 12.652) 437.923.2 Off-balance sheet financial instruments Forward purchase of foreign exchange Forward sale of foreign exchange 19.528.541.912.594. Fair value of fixed term loans.521.125 1.06% 133.937 3.165.995.419. The repricing profile. the fair value of the remaining financial assets and liabilities are not significantly different from their carrying values since assets and liabilities are either short term in nature or in the case of customer loans and deposits are frequently repriced.313.256.252 18.212 389.091.882 26.758 (198.716 8.757.50% 10.985 13.087 6.387.135 471.193 11.422.63% 10.790 901.961 6.737 8.703. effective rates and maturity are stated in note 42 to these financial statements.585.74% 16.22% 10.140.603 6.518.716 2.933 18. The provision for impairment of loans and advances has been calculated in accordance with the Bank's accounting policy as stated in note 5.975.879 7.30% 17.293 19.582.161 349.563 35.273 2.187 19. In the opinion of the management.27% 9.278.988.835.474.228.069 28.04% 11.072 35.457 17.726 3.108.610.163 592.951 39 SEGMENT DETAILS WITH RESPECT TO BUSINESS ACTIVITIES The segment analysis with respect to business activity is as follows: Corporate / Commercial Retail Trading & Retail Banking Brokerage Total Sales Banking ------------------------------Rupees in '000------------------------------ 2009 Total income Total expenses Net income / (loss) Segment assets Segment non-performing loans Segment provision required against loans and advances and trade debts Segment liabilities Segment return on assets (ROA) (%) Segment cost of funds (%) 2008 Total income Total expenses Net income / (loss) Segment assets Segment non-performing loans and advances and trade debts Segment provision required against loans and advances and trade debts Segment liabilities Segment return on assets (ROA) (%) Segment cost of funds (%) 8.498 (392.475 10.76% 6.298.

197) 7.857 (35.260.809) 1.794.000 35.954) (25.888 85.67.943. subsidary company.564 1.883.380 (46. Remuneration to executives is determined in accordance with the terms of their appointment.608. Details of transactions with related parties and balances with them as at the year-end were as follows: 2009 Key Group Strategic Directors Management Companies Associates Investments Total Personnel -----------------------------------------(Rupees in '000)--------------------------------------- 40.535 42.2 Financing Balance at the beginning of the year Disbursements during the year Repayments during the year Balance at end of the year 8.735 (20.167.048.516.136) 32.078) 253.000 120.864 1.531 40.(72.260.256.012 1.375 5.000 35.474 (999.NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS 40 RELATED PARTY TRANSACTIONS Parties are considered to be related if one party has the ability to control the other party or exercise significant influence over the other party in making financial or operational decisions and include major shareholders.000 101 152 .614.5 Annual Report 2009 Call lendings / Reverse Repo Balance at the beginning of the year Placements during the year Withdrawals during the year Balance at end of the year 100.104 (97.867.000.730 18 7.886) 1.779.857) 100.809) 1.857 (35.769.753 120.931 361 (1.815 . retirement benefit funds and directors and key management personnel and their close family members.444 (327.926 40.870) 90.260.614.135 85.496.768.890.4 Call borrowings / Repo Balance at the beginning of the year Placements during the year Withdrawals during the year Balance at end of the year 200.1 Deposits Balance at the beginning of the year Placements during the year Withdrawals during the year Balance at end of the year 63.104 (97.093) 1.311.136.000 100.914 40.000 6.337) 7.424 1.832 2.078) 6.725 23.620 (492.305. associated companies with or without common directors.385.603 753.588.344 271. as those prevailing at the time for comparable transactions with unrelated parties and do not involve more than a normal risk.305.938.753 5.000 22.409 1.926 200.857) 100.883.054 10.000 22. Contributions to and accruals in respect of staff retirements and other benefit plans are made in accordance with the actuarial valuations / terms of the contribution plan.3 Investments Balance at the beginning of the year Investment during the year Withdrawals during the year Balance at end of the year 265.246 454.324 .735 (20. including mark-up rates and collateral.046) (46.215 (1.591 70.333) 18 2.268.195.806 40. Banking transactions with the related parties are executed substantially on the same terms.955 127.890.161 5.260.

813 824 6.800 6.751 32. the Chief Executive and certain Executives are provided with Bank maintained car.Other related parties Long term loans .937.NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS 2009 2008 (Rupees in ‘000) 40.8 Customer accounts PLS accounts .12 The Key Management Personnel / Directors compensation are as follows: Salaries and Allowances 540.6 Financing Running finance .861 239 146. 101 153 .542 1.477 3.361 532.Other related parties Current accounts .755 5.223 2.768.619 40.530.860 264.057 998.596.785 Annual Report 2009 182.370.877 576.9 Bank Balances with other banks .115 40.012 28.Other related parties Fixed deposit accounts .675 126.Balance with UBL 702.903 118.215 343.11 With other Related Parties Capital Gain on redemption of units of USAF Capital gain on sale of shares of UBL Capital gain on sale of shares of UMMF Contribution to Employees provident fund Payment for books of Ikram Majeed Sehgal 40.832 2.044 40.474 99.10 With associated companies Insurance premium paid to Alfalah Insurance Company Limited Mark-up income on advances Charge for security services to Security and Management Services (Private) Limited and Wakenhut Pakistan (Private) Limited Payment to Wateen Telecom Limited for purchase of equipment 40.7 Contingencies and commitments Letter of credit and acceptance issued Guarantees issued 25.620 - In addition.719 156.790 137.035 207.703 864.Other related parties 1.Other related parties 1.609 155.753 43.200 40.

The impact of the level of capital on shareholders’ return is also recognised and the Group recognises the need to maintain a balance between the higher returns that might be possible with greater gearing and the advantages and security afforded by a sound capital position. general provisions for loan losses (up to a maximum of 1. On and off-balance sheet assets in the banking book are broken down to various asset classes for calculation of credit risk requirement. gold. government securities.g. Tier II capital. creditor and market confidence and to sustain future development of the business. majority and significant minority investments in insurance and other financial entities. Annual Report 2009 The calculation of Capital Adequacy enables the Group to assess the long-term soundness. External ratings for assets. foreign exchange translation reserves etc. share premium. Bank’s regulatory capital analysed into three tiers Tier I capital. it is critical that it is able to continuously monitor the exposure across the entire Group and aggregate the risks so as to take an integrated approach / view. As the Group carries on the business on a wide area network basis. are applied using the assessments by various External Credit Assessment Institutions (ECAIs) and aligned with appropriate risk buckets. Collaterals used include: Government of Pakistan guarantees. considering the requirements set by the regulators of the banking markets where the Bank operates. are hence applied at adjusted exposures. The total risk-weighted exposures comprise the credit risk. Collaterals if any. There has been no material change in the Group’s management of capital during the period. In addition. so that it could continue to provide adequate returns to shareholders by pricing products and services commensurately with the level of risk. includes subordinated debt subject to a maximum of 50% of total Tier I capital and fulfilment of specified criteria laid down by the State Bank of Pakistan. after deductions for certain specified items such as book value of intangibles. Maintain strong ratings and to protect the Group against unexpected events. wherever credit risk mitigation is available. lien on deposits. reserves on the revaluation of fixed assets and equity investments after deduction of deficit on available for sale investments (up to a maximum of 45 percent). are used as credit risk mitigant after applying appropriate haircuts under the Comprehensive Approach. The total of Tier II and Tier III capital has to be limited to Tier I capital. The Group currently does not have any Tier III capital. Risk weights notified. The Group's operations are categorised as either trading book or banking book and risk-weighted assets are determined according to specified requirements of the State Bank of Pakistan that seek to reflect the varying levels of risk attached to on-balance sheet and off-balance sheet exposures. there are fixed risk weights for certain types of exposures such as retail portfolio and residential mortgage finance for which external ratings are not applicable. 50% of other deductions e. where available. and Availability of adequate capital at a reasonable cost so as to enable the Group to operate adequately and provide reasonable value addition for the shareholders and other stakeholders. bank and corporate guarantees and other debt securities that fall within the definition of eligible collaterals and also fulfil other specified criteria under the relevant capital adequacy guidelines. Goals of managing capital The goals of managing capital of the Group are as follows: To be an appropriately capitalised institution. It is the policy of the Group to maintain a strong capital base so as to maintain investor.25 % of total risk weighted assets). 50% of other deductions noted above are also made from Tier II capital.1 CAPITAL ADEQUACY Capital Management The objective of managing capital is to safeguard the Group's ability to continue as a going concern. Tier III supplementary capital. market risk and operational risk. shares. which includes fully paid-up capital. cash.NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS 41 41. 101 154 . reserves (excluding foreign exchange translation reserves) and unappropriated profits (net of losses) etc. the exposures are treated as unrated and relevant risk weights applied. Otherwise. which consists of short term subordinated debt solely for the purpose of meeting a proportion of the capital requirements for market risks..

501.742 14.863 6.491.066 1.591 820.369.147.402.899 5.769 8.110 4.062.624 9.973 1. calculated in accordance with the State Bank of Pakistan's guidelines on capital adequacy.596.114.106.995.572 609.752 (431.020 6.615.25% of total risk weighted assets Revaluation reserve (upto 45%) Foreign exchange translation reserves Less: Other deductions (represents 50% of the majority or significant minority investments in insurance and other financial entities) Total Tier II capital Eligible Tier III capital Total regulatory capital Risk-weighted exposures (a) 13.662.715 1.749.161 810.874 42.628.787 388.076.571) 4.442 (23.970.085.283 1.associate Reserves (excluding foreign exchange translation reserves) Unappropriated / unremitted profits (net of losses) Minority Interest Less: Book value of intangibles Other deductions (represents 50% of the majority or significant minority investments in insurance and other financial entities) Total Tier I Capital Tier II Capital Subordinated debt (upto 50% of total Tier 1 capital) General provisions for loan losses subject to 1.727 8.473 2.048.580 3.760 18.319 1.444.588.011 185.732 5.053 1.628 10.341 8.543.255) (121.927 847.326.571) 13.050.880.324 100.676 1.433.331.567.415.747 101.287.590 34.654 854. 2009 The capital to risk weighted assets ratio.397.906 578.634 1.119.807.096.563 1.540 2.277) 9.000 1.767.025.552 763. using Basel II standardised approaches for credit and market risks and basic indicator approach for operational risk is presented below.085 1.035 1.115 4. 2009 2008 (Rupees in ‘000) Regulatory capital base Tier I capital Fully paid-up capital Balance in share premium account .232 3.727.308 81.2 Capital adequacy ratio as at December 31.926) (488.964 8.073.527 (121.881 355.473 2.921.762.436 ------------------------------Rupees in '000------------------------------ Capital requirements 2009 2008 Risk Weighted Assets 2009 2008 Credit risk Portfolios subject to standardised approach (comprehensive approach for CRM) Claims on: Sovereigns other than PKR claims Public Sector Entities (PSEs) Banks Corporates Retail portfolio Residential mortgage finance Listed equities and regulatory capital instruments issued by others banks Unlisted equity investments Fixed Assets Other Assets Past Due Exposures 950.241.855.479 7.048 101 155 Annual Report 2009 .NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS 41.472.399.852 3.277) 17.161 643.563 8.263.949.311 477.582 380.760 233.606 13.299 406.459 26.154 2.439.261 14.013) (95.190 294.615.021 (95.

703.442 72.096.429 5.902.146.340 7.5 1.457 226.145.5 Amount outstanding 3.993.951.376 Deduction CRM* 5.453 14.161 127.731.429 4.049 12.010 5.554 191.480 12.180 10.2. The Bank uses these ECAIs to rate its exposures denominated in Bangladeshi currency on certain corporates and banks incorporated in Bangladesh.224 5.136.969.180 5.3 4.NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS ------------------------------Rupees in '000------------------------------ Capital requirements 2009 2008 Risk Weighted Assets 2009 2008 Market risk Portfolios subject to standardised approach Interest rate risk Equity position risk Foreign exchange risk Operational risk TOTAL Capital adequacy ratio Total eligible regulatory capital held Total risk weighted assets Capital Adequacy ratio 41.670.705.553 3.116 5.281.675 2.312 41.475 1.3 4.368.645 496.735 1.840.742 177.705.391 5.253 18.310 Net Amount 3.685 101 156 .42% 7.209.363 693.810.012 51.018.245.165 12.170.235.538.284 11.363 223.390 Annual Report 2009 1 2 3.929 685.184 250.980 141.213 10.789.307.2.764 10.567.174.071.993.840.675 23.431 207.781 Net Amount 2.942 2.321.121.5 1 1.404 513.390 10.962.934.703 1.136 41.138 12.066 Amount outstanding 2.778 15.884.062.479 18.834 236. Credit exposures subject to standardised approach .739 30.FCY claims less than three months Banks .121.520 11.116 5.311.370.000 475.675.988 4.397.689 7.186 78.664.412 213. BSD/BAI-2/201/1200/2009 dated December 21.963 3.321.97% Sovereigns other than PKR claims PSEs Banks Corporates ü ü ü ü ü ü ü - ü - ü ü ^The State Bank of Pakistan through letter no.432 10.941.749 685.462 101.778 5.335 (b) 20.707.918.952 2.457 226.916.254 1.391 1.335.717.938 22.363 693.975 49.3 Types of exposures and ECAIs used Exposures JCR-VIS PACRA Moody's S&P & Fitch CRAB & CRISL^ 11.239 2008 Deduction CRM* 4.436 213.968.041 83.984.138 (a) (b) [ a / b * 100 ] 26.465 171.627 1.492.503.441 27.901.372 45.837 263.764 4.723 56.043 6.841.325. 2009 has accorded approval to the Bank for use of ratings assigned by these agencies.062.462.097.281.717.683.687 180.4 4.136 47.PKR claims less than three months Corporates Corporates Corporates Retail portfolio Unrated Total *CRM= Credit Risk Mitigation Rating category 4.751 131.311.290.on balance sheet exposures 2009 Exposures Sovereigns other than PKR claims PSEs Banks Banks Banks .295.284 11.014.791.853.

ICAAP has also been initiated. Simultaneously. Moreover. As a policy the reporting line of the risk management function has been kept completely independent of the business divisions. The Bank's focus over the coming years will be to further enhance risk models. The Credit Risk Management comprises of the Credit Risk Department that looks after all the aspects of credit risk and conducts portfolio analysis and stress testing on a regular basis. In the Bank's experience. as per State Bank of Pakistan Guidelines.Risk Management Division. significant progress has also been made in respect of advanced approaches of Basel II. At Bank Alfalah Limited. assessment. liquidity risk and operational risk as evidenced by its Board approved “Risk Management Policy" and "Risk Management & Internal Control” manual. monitoring and controlling the various risks and assists the Apex level committee and the various sub-committees in conversion of policies into action. RMD is the organizational arm performing the functions of identifying. measurement. the Bank has extensively pursued the implementation of Basel II with the help of external consultants and has complied with all the Pillar -I requirements of Basel II accord. the Bank is considering appointment of a consultant firm to assist it with Basel II Advanced Approaches parameters. Annual Report 2009 101 157 .e. After conducting the Basel II gap analysis. The Head of Credit Risk Department reports directly to the General Manager (GM) .NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS 42 RISK MANAGEMENT The Bank has in place an approved integrated risk management framework for managing credit risk. Market and Operational risks. - 42. in line with its ambition to bring maximum sophistication to risk management function. procedural manual has been developed. which shall provide a sophisticated platform for prudent risk management practices. market risk. the management has laid down the road-map to move towards the implementation of Basel-II Advanced Approaches. monitoring and control of the credit exposures. processes and systems infrastructure. has migrated to Basel II as on January 01. Implementation of Pillar 2 i. The middle-office directly reports to Head of RMD. a key to effective credit risk management is a well thought out business strategy. Information Technology capabilities and Risk Governance Structure to meet the requirements of the Advanced Approaches as well. processes have been set for fine-tuning systems & procedures. which also incorporates a comprehensive system of cross-checks for data accuracy. in light of SBP circulars and guidelines. An independent risk review function exists at the Bank in the form of Internal Audit Group that reports directly to the Board Audit Committee. In this respect. measuring. The Bank has established a Treasury Middle Office to effectively monitor day-to-day trading activities of the dealing room. The Bank has acquired Temenos T24 banking system as its core banking solution and its Risk Management system called T-Risk will be used for managing Credit. For Credit Risk. The Bank. Following is the governance structure and important policies on Risk Management of the Bank: The Board of Directors through its sub-committee called ‘Board Risk Management Committee’ (BRMC) oversees the overall risk of the Bank.1 Credit risk Credit Risk Management processes encompass identification. 2008 with the standardized approach. As part of its mandate the Central Management Committee (CMC) is entrusted with overseeing the operational risk of the Bank.

As part of discreet prudential practices the Risk Management Division conducts pre-fact validation of major cases from integrated risk point of view. whereas for Long-term exposure with maturity of greater than one year. Moreover. 101 158 . 42.1. Special Asset Management (SAM) Department (under Credit & Collections Group) is functional and handles this responsibility in compliance with the regulatory requirements. The Risk Management Division also monitors the NPL portfolio of the Bank and reports the same to BRMC. Proactive credit-risk management practices in the form of studies. Annual Report 2009 The Bank uses external ratings for the purposes of computing the risk weights as per the Basel II framework. Credit Administration Centre (CAC) is working towards ensuring that all the policies and procedures are implemented and followed accordingly.performing. Special attention is paid by the management in respect of non-performing loans. The current focus is on augmenting the Bank’s abilities to quantify risk in a consistent.2. The system has been statistically tested.1. adherence to Basel II accord. The State Bank of Pakistan through its letter no.1 Credit Risk . Integrated Bank-wide Risk Management and Internal Control Framework. 2009 has accorded approval to the Bank for use of ratings assigned by CRAB and CRISL. reliable and valid fashion which will ensure advanced level of sophistication in the Credit Risk measurement and management in the years ahead. The system takes into consideration qualitative and quantitative factors of the counter-party and generates an internal rating vis-à-vis anticipated customer behaviour. Its credit evaluation system comprises of well-designed credit appraisal. Internal Rating System.General Disclosures Basel II Specific Bank Alfalah Limited is using The Standardized Approach (TSA) of SBP Basel II accord for the purpose of estimating Credit Risk Weighted Assets. The Bank manages its portfolio of loan assets with a view to limit concentrations in term of risk quality. Long-term Rating is used. geography. BSD/BAI-2/201/1200/2009 dated December 21. Under TSA Banks are allowed to take into consideration external rating(s) of counterparty(s) for the purpose of calculating Risk Weighted Assets. Internal rating based portfolio analysis is also conducted frequently. which is capable of quantifying counter-party risk in accordance with the best practices. Fitch and Standard & Poors. JCR-VIS. maturity and large exposure. Short-term Rating given by approved Rating Agencies is used. portfolio monitoring are only some of the prudent measures the bank is engaged in for mitigating risk exposures. Moodys. research work. 42. For Exposures with a contractual maturity of less than or equal to one year. No loan / advances can be booked without proper approval of CAC.2 Disclosures for portfolio subject to the Standardised Approach & Supervisory risk weights in the IRB ApproachBasel II specific 42. the system is backed by secured database with backup support and is capable of generating MIS reports providing snapshot of the entire portfolio for strategizing and decision making.1 External ratings SBP Basel II guidelines require banks to use ratings assigned by specified External Credit Assessment Agencies (ECAIs) namely PACRA. A sophisticated Internal Credit Rating System has been developed by the Bank. The Bank uses these ECAIs to rate its exposures denominated in Bangladeshi currency on certain corporates and banks incorporated in Bangladesh. methodologies and processes for deriving Credit Risk Weighted Assets in accordance with the SBP Basel II Standardized Approach is in place and firmly adhered. A "Watchlist" procedure is also functioning which identifies loans showing early warning signals of becoming non .NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS The Bank has built-up and maintained a sound loan portfolio in terms of well-defined Credit Policy approved by the Board of Directors. A detailed procedural manual specifying return-based formats. The Risk Management Division also monitors the NPL portfolio of the Bank and reports the significant matters to BRMC.1. sanctioning and review procedures for the purpose of emphasizing prudence in lending activities and ensuring the high quality of asset portfolio. validated and checked for compliance with the State Bank of Pakistan’s guidelines for Internal Credit Rating. industry.

1. in order to restrict the industry concentration risk. and single/group borrower exposures. 42. the Bank reduces its credit exposure to a counterparty when calculating its capital requirements to the extent of risk mitigation provided by the eligible financial collateral as specified in the Basel II guidelines. the Bank uses the comprehensive approach for collateral valuation. In case of corporate and small and medium enterprises financing.NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS Where there are two ratings available. National Savings Certificates. Within credit portfolio.1. 42. industry. charge on receivables may also be taken.3. in line with the SBP Basel II requirements. the security to be taken is defined in the product policy for the respective products. Additionally. are reduced from the exposure to compute the capital charge based on the applicable risk weights. For facilities provided as per approved product policies (retail products. geography. collateral is taken in line with the policy. the Bank makes adjustments in eligible collaterals received for possible future fluctuations in the value of the collateral in line with the requirements specified by SBP guidelines. securities issued by Government of Pakistan such as T-Bills and PIBs. security of the assets of the borrower and assignment of the underlying project contracts is generally obtained.3. TDRs.1. certain debt securities rated by a recognized credit rating agency.3.1 Credit risk mitigation policy The Bank defines collateral as the assets or rights provided to the Bank by the borrower or a third party in order to secure a credit facility.1.3 Disclosures with respect to Credit Risk Mitigation for Standardized and IRB Approaches-Basel II Specific 42. Under this approach. the SBP has prescribed regulatory limits on banks’ maximum exposure to single borrowers and group borrowers.3 Types of collateral taken by the Bank Bank Alfalah Limited determines the appropriate collateral for each facility based on the type of product and counterparty. as a prudential measure aimed at better risk management and avoidance of concentration of risks. SSC/DSCs. In line with Basel II guidelines.1. In general. mutual fund units where daily Net Asset Value (NAV) is available in public domain and guarantees from certain specified entities. for Capital calculation purposes. valuation and margining. in order to cover the entire exposure Personal Guarantees of Directors are also obtained by the Bank. Moreover. The Bank also offers products which are primarily based on collateral such as shares. the newly developed Internal Rating System allows the Bank to monitor risk rating concentration of counterparties against different grades / scores ranging from 1 – 12 (1 being the best and 10 – 12 for defaulters). to produce volatility-adjusted amounts for collateral. loan against shares etc. The valuation of the properties is carried out by an approved valuation agency. The Bank would have the rights of secured creditor in respect of the assets / contracts offered as security for the obligations of the borrower / obligor. Gold. 42. also referred to as ‘haircuts’.lowest rating is considered. specified securities and pledged commodities. the lower rating is considered and where there are three or more ratings the second . For retail products. 42. Housing loans and automobile loans are secured by the security of the property / automobile being financed respectively. This includes Cash / TDRs.2 Collateral valuation and management As stipulated in the SBP Basel II guidelines.5 Credit concentration risk Credit concentration risk arises mainly due to concentration of exposures under various categories viz.1. These products are offered in line with the SBP prudential regulations and approved product notes which also deal with types of collateral. BAL’s annual Credit Plan spells out the maximum allowable exposure that it can take on specific industries.). 42. the Bank considers all types of financial collaterals that are eligible under SBP Basel II accord. 101 159 Annual Report 2009 . For project finance. cash collateral.3.4 Types of eligible financial collateral For credit risk mitigation purposes.3. Additional security such as pledge of shares. the Bank recognizes only eligible collaterals as mentioned in the SBP Basel II accord. fixed assets are generally taken as security for long tenor loans and current assets for working capital finance usually backed by mortgage. Moreover. The decision on the type and quantum of collateral for each transaction is taken by the credit approving authority as per the credit approval authorization approved by the Board of Directors. These adjustments.

195 121.068.655.449 1.52% 2.930 8.330 1.561 10.13% 0.392 1.52% 7.56% 1.274 Glass & Ceramics 200.67% 0.294 Textile Spinning 12.979.564 0.71% 0.792 94.048.47% 3.392 Sugar 3.800.080.07% 2.687.292.37% 2.22% 0.19% 0.926.681 2.19% 90.99% 3.591 5.48% 100% Annual Report 2009 2.899.650 4.134 1.222 2.61% 0.820 Shoes and Leather garments 792.83% 0.646 Housing Societies / Trusts 1.116.23% 6.371 Communication 5.32% 2.43% 0.09% 2.905 280.14% 602.12% 0.809 14.16% 0.607 Food & Allied Products 4.715 3.392 Automobile & Transportation Equipment 3.214.49% 1.714.00% 0.01% 1.348.197.16% 0.802.41% 1.868 25.319.856 1.266 1.94% 2.590 Cement 3.737.064 385.165 Chemical and Pharmaceuticals 5.700 Educational Institutes 1.55% 3.629.951 Rice Processing and Trading/ Wheat 4.00% 2.848.36% 2.87% 3.09% 0.548.11% 0.428 10.176.93% 0.766 8.940 0.855.768.338 2.91% 0.00% 0.57% 0.622.636 148.129 7.017 Welfare Institutions 448.833 3.79% 28.914 Ghee & Edible Oil 1.52% 0.09% 0.278.354 121.453 293 904.761 1.18% 0.495 Others 19.74% 0.834 1.846.54% 0.37% 0.31% 0.34% 6.59% 0.84% 7.186 18.37% 1.627.96% 2.01% 92.730 Production and Transmission of Energy 15.326.164 Percent 7.154.1.916.397.808 381.NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS 42.338 1.035.722 6.296.50% 1.696 Retail / Wholesale Trade 7.824 2.289 Sports Goods 313.37% 0.288 10.348 Individuals 35.033 6.207 966.005.947 0.340 Financial 4.744.618.892.00% 1.72% 4.23% 0.53% 2.860 20.792 Electronics and Electrical Appliances 1.16% 28.714.01% 0.40% 1.919.58% 3.877.524 Real Estate / Construction 5.25% 1.200 88.350 Percent 0.153 Import & Export 2.173 Iron / Steel 4.60% 27.46% 2.94% Deposits (Rupees in '000) 3.142 0.706 10.55% 100% Contingent liabilities * (Rupees in '000) 295.547 558.07% 27.155.338 13.4 Segmental information 42.216.685.31% 1.770.682.57% 727.02% 1.853 Textile Composite 12.06% 2.22% 0.879.482 27.450.442 Paper & Board 1.12% 4.955 1.40% 596.263.743.1.068 1.018 Oil & Gas 15.570 1.37% 2.737.907 233.23% 0.85% 0.91% 0.16% 346.84% 1.164.96% 0.291 11.951.573 Textile Weaving 2.53% 1.406.412.212.573.442.40% 9.10% 0.36% 3.016.109 Insurance 199.260.248 100% 324.41% 8.729 Fertilizers 4.066.022 148.024.197.190 856.080.407 Percent 0.28% 0.1 Segments by class of business 2009 Advances (Gross) (Rupees in '000) Agribusiness 13.571 Surgical Goods 268.13% 0.259 6.090 4.08% 1.10% 1.258.650.049.22% 1.817 2.649 4.784.368 1.972 306.673 79.04% 0.4.99% 0.90% 0.389 101 160 .196 196.210.

069 Real Estate / Construction 7.023 1.70% 0.923 1.607 3.339 Textile Weaving 3.14% 1.229.871.415 46.826 6.40% 2.750.514 0.458 5.764 * contingent liabilities for the purpose of this note are presented at cost and includes direct credit substitutes.226.40% 0.67% 0.019 Percent 2.21% 1.869 2.88% 0.892.113.558.857 1.15% 1.659 33.331.45% 740.980 Shoes and Leather garments 796.083 Communication 4.729 1.971.259 11.105 Iron / Steel 4.668 Textile Composite 12.724.123 314.878 2.601 8.442.976.561 2.88% 2.032 2.404.661.99% Deposits (Rupees in '000) 2.82% 2.90% 2.06% 0.013 22.304 1.24% 47.08% 3.07% 1.223 107.769.125 39.57% 2.082 Sugar 2.588 Others 22.111 6.536 636.371. transaction related contingent liabilities and trade related contingent liabilities 101 161 .057 0.687 15.95% 1.08% 7.512 9.735 Sports Goods 394.40% 0.93% 3.41% 1.13% 0.31% 1.534 7.419 1.06% 1.28% 8.29% 0.793.43% 895.72% 2.679.95% 0.21% 0.419.399 197.616.001 Textile Spinning 10.61% 0.746 Fertilizers 4.868.37% 0.713.490 793.889 56.207.215 767.432 Welfare Institutions 741.871.408 495.408.570.493 Ghee & Edible Oil 3.853.86% 1.928.68% 0.04% 0.934 12.280 6.06% 0.713.044.74% 1.164.91% 0.271 83.07% 0.52% 1.176 5.11% 0.35% 5.25% 0.770.95% 1.99% 0.13% 1.399.83% 100% Annual Report 2009 2.943 3.NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS 2008 Advances (Gross) (Rupees in '000) Agribusiness 4.233 0.535.683 Import & Export 3.62% 100% Contingent liabilities * (Rupees in '000) 53.55% 0.722.20% 479.73% 1.200 2.227 Electronics and Electrical Appliances 3.776.850 1.853 Chemical and Pharmaceuticals 3.71% 2.25% 3.92% 10.90% 0.894 Production and Transmission of Energy 13.005.878 505.01% 8.01% 3.931 8.737.557 Percent 0.299 1.30% 1.15% 71.240.193 191.90% 0.14% 4.89% 2.38% 5.776 Rice Processing and Trading/ Wheat 5.85% 0.916.16% 0.098 344.55% 4.13% 0.720.251.929 Housing Societies / Trusts 2.127.26% 96.69% 1.742.07% 0.125 Oil & Gas 10.898 12.117 5.817 Cement 3.99% 1.694 1.809 7.088 Automobile & Transportation Equipment 3.14% 0.834 297.729.23% 0.732.206.992 Retail / Wholesale Trade 7.033.83% 0.119 14.21% 0.082 Paper & Board 2.739 939.531 2.309 Percent 0.60% 0.437 0.497 842.26% 1.204.563.477.67% 0.944 Individuals 44.40% 634.863 559.596 100% 300.34% 3.495 230.42% 1.367.111.50% 1.17% 0.754.85% 32.037.857.422.555 172.10% 4.127.38% 0.772 137.566.646.015 Food & Allied Products 3.118 167.093 Financial 3.04% 4.002.660.76% 0.082 Surgical Goods 240.547 14.12% 198.98% 1.471 Insurance 506.047.567 Educational Institutes 1.675.06% 23.862.752 736.02% 0.20% 2.13% 1.661 Glass & Ceramics 292.

405.402 795.802.606 337.499 3.620.389 9% 51.363 3.4.488.716 Specific Provisions Held Classified Advances 8.222.055.542.743.414 635.262.454 180.762.716 90.017.959.408.476 67.276 84% 268.3 Details of non-performing advances and specific provisions by class of business segment 2009 Classified Advances Specific Provisions Held Classified Advances 2008 Specific Provisions Held 45.164 Percent Deposits (Rupees in '000) Percent 17% 83% 100% 2008 Advances (Gross) (Rupees in '000) Public/ Government Private 17.831 77.1.NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS 42.782.126.990 91% 248.436 1.113 100% 324.764 42.192.598 ------------------------------Rupees in '000------------------------------ Agriculture.181 59.585.4 Details of non-performing advances and specific provisions by sector 2009 Classified Advances Public / Government Private 15.059.585.4.837 2.774 100% 300.248 2.404 73.576 94.934.055.572 15.750 3.2 Segment by sector 2009 Advances (Gross) (Rupees in '000) Public/ Government Private 32.948 2.273 2008 Specific Provisions Held 5.058 1.307.274.407 Contingent liabilities * (Rupees in '000) 15.215 28.424 8.319.598 ------------------------------Rupees in '000------------------------------ 8.019.1.828.273 42.933 1.595.408.526 164.598 5.729.638 196.585.947 31.769.716 15.565 197.055.833 83.1.934.287 8. hunting and fishing Textile Chemical and pharmaceuticals Cement Automobile and transportation equipment Wholesale and retail trade Individuals Others 426.469.273 8.934. forestry.642 271.4.878 2.421 98.331.309 Percent 19% 81% 100% Percent 18% 82% 100% 16% 56.537 3.595 8.606 Annual Report 2009 101 162 .490.583 335 48.017.106 5.952 282.606 8.715 47.118.788.815 1.684 1.713.017.019 Percent Deposits (Rupees in '000) Percent 17% 83% 100% Contingent liabilities * (Rupees in '000) 17.012 48.

883. transaction related contingent liabilities and trade related contingent liabilities 42.294.211 349. Off-balance sheet financial instruments are contracts which are the resultant outcome of the import and export transactions.776 94.676.665 94.407 ------------------------------Rupees in '000------------------------------ Pakistan Asia Pacific (including South Asia) Middle East 352. To manage and control market risk a well defined limits structure is in place. forward transactions in inter bank market on behalf of customers to cover-up their positions against stipulated risks. Moreover.319.412. The Bank uses the Standardized Approach to calculate capital charge for market risk as per the current regulatory framework under Basel II. Bank also carries out stress testing on a daily basis by applying parallel shocks of changes in market yield on all the categories of T-Bills and Government securities. 42.742 5.2 Market risk Market risk is the risk of losses due to on and off-balance sheet positions arising out of changes in market prices.577) 4.5 Geographical segment analysis Profit before taxation 2009 Total assets Net assets employed employed 21.175.485 83. It also includes investments and structural positions in the banking book of the Bank. Moreover.506 (45.169. adjusted and approved periodically.974) 23.345 (53.NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS 42. counterparties enter into swaps. These limits are reviewed.925 16.278. The currency risk is regulated and monitored against the regulatory / statutory limits enforced by the State Bank of Pakistan. The buy and sell transactions are matched in view of their maturities in the different predefined time buckets. Market risk mainly arises from trading activities undertaken by the Bank’s treasury. Currently.126.690. The foreign exchange exposure limits in respective currencies are managed against the prescribed limits. The analysis below represents the concentration of the Bank's foreign currency risk for on and off-balance sheet financial instruments: 101 163 Annual Report 2009 .228 7.195 Contingent liabilities * 89. currency and counterparty limits for on and off-balance sheet financial instruments.824) 16.431) 318.607 437.326 5.513 417.280.2.434 226. The Bank manages this risk by setting and monitoring dealer.682.267 Profit before taxation Pakistan Asia Pacific (including South Asia) Middle East 2008 Total assets Net assets employed employed Contingent liabilities * ------------------------------Rupees in '000------------------------------ (2. Bank calculates 'Value at Risk (VaR)' on a daily basis by using 'Historical Method' taking into consideration the data of over 2 years.219 26.038.557.1 Foreign exchange risk Foreign exchange risk arises from the fluctuation in the value of financial instruments consequent to the changes in foreign exchange rates.331.309 * contingent liabilities for the purpose of this note are presented at cost and includes direct credit substitutes.716 211.4.1.567.664 389.491.154 131.081 75.312 360. Going forward the Bank is preparing to use more sophisticated systems and models and is currently evaluating use of various tools to enhance its capability to successfully meet the requirements of the internal models approach of Basel II.964 380.775 (12.906 21.763.

236 22.378 19.229) 53.612.741 33.114 37.342 4.559.623 1.319.811 349.854 89.203.029 332.635 (199.801 138 3.643 3.430.360.808 43.346) 786.199.513. The Bank’s interest rate risk is limited since the majority of customers’ deposits are retrospectively re-priced on a biannual basis on the profit and loss sharing principles. The Bank’s equity trading book comprises of Equity Portfolio Unit’s classified as Held for Trading (HFT).2 Equity position risk Equity position risk in the trading books arises due to changes in prices of individual stocks or levels of equity indices.660.951 - ------------------------------Rupees in '000------------------------------ Net foreign currency exposure 13.278.632.057.520.998 3. The Bank is exposed to interest rate risk as a result of mismatches or gaps in the amounts of assets and liabilities and off-balance sheet instruments that mature or re-price in a given period.195 2008 Assets Pakistan Rupee United States Dollar Great Britain Pound Japanese Yen Euro Other currencies Total foreign currency exposure Total currency exposure 305.470 (20.708.951) 6.201.463 26.NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS 2009 Assets Pakistan Rupee United States Dollar Great Britain Pound Japanese Yen Euro Other currencies Total foreign currency exposure Total currency exposure 369.912 17. Annual Report 2009 101 164 .100. 42.787 (778) 4.983.076 (32.485 42.410.395.823 225.362 3.733 16.693.217 6.069.456 1.761.930) 8.682.230) 2.124 (91.925 Liabilities 284.199 58.609 367.215.267 Liabilities 334.273) 14.630.310 (8.364 50.752 3. while the AFS portfolio is maintained with a medium term view of capital gains and dividend income.743.2.555.411 40.765.061 88. In order to ensure that this risk is managed within acceptable limits.119 21.136 (28.092.693 1.100. the Bank’s Asset and Liability Management Committee (ALCO) monitors the re-pricing of the assets and liabilities on a regular basis.235 48. Special emphasis is given to the details of risks / mitigants.440 Off-balance sheet items (8.933.399 749.225.489 171.916) 16.373) 8.282 2.057.883.3 Interest rate risk The interest rate risk arises from the fluctuation in the value of financial instruments consequent to the changes in the market interest rates.072 Off-balance sheet items (14.355 389.597 3.076.294. The objective of Equity Portfolio Unit’s classified as HFT portfolio is to take advantages of short-term capital gains.441.373 - ------------------------------Rupees in '000------------------------------ Net foreign currency exposure 21.252.332 9. limits / controls for equity trading portfolios of Equity Portfolio Unit.255 2.894 97.

394.586.059.301.544 83.982.452.778 8.060 10.177 1.838.243 50.722.435 30.317.256.376 9.069 733.909.553 86.21% 2.380) (2.986) 14.928 4.902.300 40.696.753 9.472.902 739 46.746 5.373 49.432 9.955 1.046 57.139.715 19.366 335.942 8.08% 13.586 59.326.770.926 (76.532.465 21.572.927 14.769.744 15.303 4.518.028.398.669.884.508 31.052.906.293.429 2.743.298.067 2.325.534.873.258 99.126.585 2.217 2.248.431 3.602 3.443.985 3.753.370.594.215.260.537 29.755.728 8.934.787.690 25.571.488 12.692 3.089 30.503 17.354.621 35.231.258 330.432 53.004.719) 39.343 7.795.576 (869) 158.764 2.707 19.638.936 11.133.902.185 (218.293.474.060 41.16% 9.800 16.sale Repo transactions resale Repo transactions repurchase Off-balance sheet gap Total Yield / Interest Risk Sensitivity Gap Cumulative Yield / Interest Risk Sensitivity Gap 101 165 Annual Report 2009 .653.902.586 9.707.177 51.778.167 1.775 1.308.753.886 (223.332 24.160.purchase Forward exchange contracts .456.766.493.289 19.777 (5.546 1.752.685.01% 7.339 14.169 3.059 1.170 10.089 14.578 272.034.925 11.267 30.438 188.895 (694.311.380 12.655) 484 44.564.526.407.754 10.264.551 (45.773.956 172.893.346 11.871 2.177 372.031 14.186 2.857 52.462.247 300.319 2.84% 2.113 576.411.006.545.089 19.570.293.435 99.633.609.558.769 2.63% 12.42% 6.144 157.200 (230.282.317 33.38% 17.825.857 10.270.087 46.519 40.881 53.947.995.571.340 40.845.831 10.734 36.293.537.455.489) Assets Cash and balances with treasury banks Balances with other banks Lendings to financial institutions Investments Advances Other assets Liabilities Bills payable Borrowings Deposits and other accounts Sub-ordinated loans Liabilities against assets subject to finance lease Other liabilities On-balance sheet gap Off-balance sheet financial instruments Forward exchange contracts .741 9.695 3.655) (140.755 3.435 19.657 546.570.498.481.950.332.311.42.862 2.878 2.667.520 110.707.132 12.399 479.452.276 1.635.871.237 1.572.494 7.784.50% 9.293 10.694.965 160.394.435 3.104.571) 2.210 1.281) (40.743.245 14.857 10.399 16.324) 2008 Exposed to Yield/ Interest risk Non-interest Over 1 Over 3 Over 6 Over 1 Over 2 Over 3 Over 5 bearing Upto 1 to 3 to 6 Months to 1 to 2 to 3 to 5 to 10 Above financial Total Month Months Months Year Years Years Years Years 10 Years instruments -----------------------------------------------------------------------Rupees in '000----------------------------------------------------------------------- Assets 168.079.800 62.002.798 5.890 1.056.116) Cash and balances with treasury banks Balances with other banks Lendings to financial institutions Investments Advances Other assets NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS Liabilities 10.966 12.945.380 546.818.212.366 54.279.127 26.459 10.055.011 10.169 17.033 10.460 26.346 13.710.214 121.306 93.573 1.571.343 7.459.099 (37.41% 11.109 9.961 2.270 134.199.921 2.583.478 6.494 368 40.381.923 1.000) (51.458 13.176.124 19.982 2.443.006.028.822.921 324.508 (3.427 57.132 12.590.331 (140.336 9.306.502.961.907.741 2.652) 9.090.394.901 29.493 3.104) 717.299 5.071.019.315.541.977.429 3.982.230 600.293.779 10.890 5.142 159.347.475 1.528 2.528.278 121.828.183 57.333.506.037.611 29.967 16.253.524 16.310.purchase Forward exchange contracts .74% 10.824 10.284 4.677 53.104.324.736.195.149 5.754.424.132 71.394.287.585.202.816.143 2.080.633.186 2.175.982 1.952.031 297.51% - Bills payable Borrowings Deposits and other accounts Sub-ordinated loans Liabilities against assets subject to finance lease Other liabilities On-balance sheet gap Off-balance sheet financial instruments Forward exchange contracts .359 51.913 33.539.853 12.sale Repo transactions resale Repo transactions repurchase Off-balance sheet gap Total Yield / Interest Risk Sensitivity Gap Cumulative Yield / Interest Risk Sensitivity Gap Effective Yield/ Interest Rate On-balance sheet financial instruments 2.221 10.053.222 10.427) 12.709 10.780 21.058 5.305.950 114.729.811 17.877 3.791 2.547.060.370) 12.009.962 10.181 12.089 5.733.292 1.017.816.059.705.872 156.251.285 191.782 11.619.768.423 13.097.687.67% 9.660.122) (11.215 (51.3.421.321.923 14.476 9.378 7.132 27.470.751 6.358 5.130 9.181 1.509 597.406 8.027.093 110.248.144 20.589.001.207 54.795.982 (51.500 76.063 5.673.317 50.766.200 247.652.819.739 8.484 21.01% 6.816.535 22.164 6.692.305.389 7.82% 32.520 17.786 362.122) 17.331 19.108 45.01% 11.260.991.827 25.753 (2.557 61.005.492 12.491 2.819.170 600.786 103.117 35.861 9.091.682.276.194 553.374.563 11.021.432 49.377 446.822.878 17.057) 13.584.007 4.841.790.299 11.1 Effective Yield/ Interest Rate 2009 Exposed to Yield/ Interest risk Non-interest Over 1 Over 3 Over 6 Over 1 Over 2 Over 3 Over 5 bearing Upto 1 to 3 to 6 Months to 1 to 2 to 3 to 5 to 10 Above financial Total Month Months Months Year Years Years Years Years 10 Years instruments -----------------------------------------------------------------------Rupees in '000----------------------------------------------------------------------- Mismatch of Interest Rate Sensitive Assets and Liabilities On-balance sheet financial instruments 2.873.322 58.97% 13.025 22.413.370.955 4.170.033.342 21.

NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS

42.4

Liquidity risk Liquidity risk is the potential for loss to the Bank arising from either its inability to meet its obligations or to fund increases in assets as they fall due without incurring an unacceptable cost. The Bank’s Asset and Liability Committee (ALCO) manages the liquidity position on a regular basis and is primarily responsible for the formulation of the overall strategy and oversight of the asset liability function. ALCO monitors the maintenance of balance sheet liquidity ratios, depositor’s concentration both in terms of the overall funding mix and avoidance of undue reliance on large individual deposits. Moreover, as core retail deposits form a considerable part of the bank’s overall funding mix therefore significant importance is being given to the stability and growth of these deposits. The BOD has approved a comprehensive liquidity management policy which stipulates the early warning indicators of liquidity risk and maintenance of various ratios. Moreover, Bank also has a 'Contingency Funding Plan' in place to address liquidity issues in times of stress / crisis situations.

Annual Report 2009

101 166

42.4.1

Maturities of Assets and Liabilities - based on working prepared by the Asset and Liability Management Committee (ALCO) of the Bank

2009
Over 1 Over 3 Over 6 Over 1 Over 2 Over 3 Over 5 Upto 1 Above to 3 to 6 Months to 1 to 2 to 3 to 5 to 10 Total Month 10 Years Months Months Year Years Years Years Years -------------------------------------------------------------------------Rupees in '000------------------------------------------------------------------------35,056,025 22,722,927 14,947,435 99,279,438 188,021,492 14,552,454 14,714,496 389,294,267 3,766,144 20,653,921 324,743,389 7,570,181 12,358 774,246 10,091,833 367,612,072 21,682,195 13,491,563 3,587,969 1,615,473 (23,926) 3,011,116 21,682,195 (148,178,587) (6,366,506) (66,677) 58,753,954 17,439,310 12,456,603 38,911,693 3,766,144 10,975,843 214,226,856 368 5,513,330 234,482,541 479,087 46,052,902 739 91,809 46,624,537 8,652,611 34,070,578 1,494 1,107 467,759 43,193,549 25,898,925 1,494 2,215 633,304 26,535,938 1,583,546 418,499 1,982 1,075,436 3,079,463 2,753,890 1,273,818 1,982 1,075,436 5,105,126 156,692 884,876 3,965 774,246 1,075,435 2,895,214 546,380 4,990,000 159,324 5,695,704 6,791,665 41,940,740 15,050,513 19,848,749 12,270,921 615,264 25,790,046 178,490 12,549,971 86,303,954 2,212,878 2,667,734 13,788,738 21,027,800 356,979 203,902 40,258,031 214,816 8,780 15,981,596 26,080,359 535,469 305,852 43,126,872 446,484 21,400,959 61,669,544 1,070,938 701,967 85,289,892 7,063,890 11,260,089 2,006,635 188,159 20,518,773 8,465,396 8,055,222 852,952 188,159 17,561,729 23,556,394 16,838,289 1,129,985 282,239 41,806,907 6,347,370 4,906,011 951,749 282,239 12,487,369 20,005,512 2,059,831 12,394,132 7,469,257 12,008 41,940,740

Assets Cash and balances with treasury banks Balances with other banks Lendings to financial institutions Investments Advances Operating fixed assets Other assets

Liabilities Bills payable Borrowings Deposits and other accounts Sub-ordinated loans Liabilities against assets subject to finance lease Deferred tax liabilities Other liabilities

Net assets

Share capital Reserves Share in share premium of associate Minority Interest Unappropriated profit Surplus on revaluation of assets - net of tax

2008

Over 1 Over 3 Over 6 Over 1 Over 2 Over 3 Over 5 Upto 1 Above to 3 to 6 Months to 1 to 2 to 3 to 5 to 10 Total Month 10 Years Months Months Year Years Years Years Years -------------------------------------------------------------------------Rupees in '000------------------------------------------------------------------------32,687,342 21,584,602 3,315,500 76,017,285 191,572,336 13,846,774 10,255,086 349,278,925 3,452,031 14,071,247 300,729,764 2,571,169 17,459 208,281 11,345,489 332,395,440 16,883,485 7,995,000 3,166,056 1,727,752 1,615,473 2,379,204 16,883,485 (68,862,268) (17,952,665) 31,860,645 3,452,031 12,609,910 126,473,835 484 5,281,462 147,817,722 289,677 62,150,359 8,432 252,966 62,701,434 57,339 23,805,667 494 3,520 540,026 24,407,046 28,238,112 494 3,520 1,597,757 29,839,883 29,949,179 32,687,342 20,542,449 2,028,478 827,605 14,553,702 178,779 8,137,099 78,955,454 172,069 733,332 14,076,595 29,333,207 210,594 222,972 44,748,769 597,194 553,690 23,821,508 30,638,427 315,893 340,979 56,267,691 272,890 5,233,088 53,310,322 631,784 340,978 59,789,062 4,643,024 11,526,299 1,263,569 199,597 17,632,489 8,709,374 988 1,186 1,166,807 9,878,355 7,754,134 4,448,400 14,481,524 1,263,569 199,597 20,393,090 8,664,688 408,758 1,186 1,166,807 10,241,439 10,151,651 13,679,516 17,948,277 2,527,138 299,396 34,454,327 6,235,027 1,719,738 (869) 208,281 1,166,807 9,328,984 25,125,343 3,168,631 9,097,754 6,099,913 514,468 18,880,766 600,170 36,452,702 440,697 172,857 37,666,426 (18,785,660) 6,118,918 10,682,824 1,355,535 18,157,277 514,151 514,151 17,643,126

NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS

Assets Cash and balances with treasury banks Balances with other banks Lendings to financial institutions Investments Advances Operating fixed assets Other assets

Liabilities Bills payable Borrowings Deposits and other accounts Sub-ordinated loans Liabilities against assets subject to finance lease Deferred tax liabilities Other liabilities

Net assets

Share capital Reserves Unappropriated profit Share in share premium of associate Minority Interest Surplus on revaluation of assets - net of tax

Current and saving deposits do not have any contractual maturity. Therefore, these deposits have been classified based on management experience with such class of deposits, with the approval of ALCO. However, these deposits are payable on demand.

101 167

Annual Report 2009

Annual Report 2009

101 168
2009
Over 1 Over 3 Over 6 Over 1 Over 2 Over 3 Over 5 Upto 1 Above to 3 to 6 Months to 1 to 2 to 3 to 5 to 10 Total Month 10 Years Months Months Year Years Years Years Years -------------------------------------------------------------------------Rupees in '000------------------------------------------------------------------------35,056,025 22,722,927 14,947,435 99,279,438 188,021,492 14,552,454 14,714,496 389,294,267 3,766,144 20,653,921 324,743,389 7,570,181 12,358 774,246 10,091,833 367,612,072 21,682,195 13,491,563 3,587,969 (23,926) 1,615,473 3,011,116 21,682,195 (148,178,587) (6,366,506) (66,677) 58,753,954 17,439,310 12,456,603 38,911,693 3,766,144 10,975,843 214,226,856 368 5,513,330 234,482,541 479,087 46,052,902 739 91,809 46,624,537 8,652,611 34,070,578 1,494 1,107 467,759 43,193,549 25,898,925 1,494 2,215 633,304 26,535,938 1,583,546 418,499 1,982 1,075,436 3,079,463 2,753,890 1,273,818 1,982 1,075,436 5,105,126 156,692 884,876 3,965 774,246 1,075,435 2,895,214 546,380 4,990,000 159,324 5,695,704 6,791,665 41,940,740 15,050,513 19,848,749 12,270,921 615,264 25,790,046 178,490 12,549,971 86,303,954 2,212,878 2,667,734 13,788,738 21,027,800 356,979 203,902 40,258,031 214,816 8,780 15,981,596 26,080,359 535,469 305,852 43,126,872 446,484 21,400,959 61,669,544 1,070,938 701,967 85,289,892 7,063,890 11,260,089 2,006,635 188,159 20,518,773 8,465,396 8,055,222 852,952 188,159 17,561,729 23,556,394 16,838,289 1,129,985 282,239 41,806,907 6,347,370 4,906,011 951,749 282,239 12,487,369 20,005,512 2,059,831 12,394,132 7,469,257 12,008 41,940,740

42.4.2

Maturities of Assets and Liabilities - based on contractual maturity of the assets and liabilities of the Bank

Assets Cash and balances with treasury banks Balances with other banks Lendings to financial institutions Investments Advances Operating fixed assets Other assets

Liabilities Bills payable Borrowings Deposits and other accounts Sub-ordinated loans Liabilities against assets subject to finance lease Deferred tax liabilities Other liabilities

Net assets

Share capital Reserves Unappropriated profit Share in share premium of associate Minority Interest Surplus on revaluation of assets - net of tax

2008

Over 1 Over 3 Over 6 Over 1 Over 2 Over 3 Over 5 Upto 1 Above to 3 to 6 Months to 1 to 2 to 3 to 5 to 10 Total Month 10 Years Months Months Year Years Years Years Years -------------------------------------------------------------------------Rupees in '000------------------------------------------------------------------------32,687,342 21,584,602 3,315,500 76,017,285 191,572,336 13,846,774 10,255,086 349,278,925 3,452,031 14,071,247 300,729,764 2,571,169 17,459 208,281 11,345,489 332,395,440 16,883,485 7,995,000 3,166,056 1,727,752 1,615,473 2,379,204 16,883,485 (150,880,851) (8,839,489) 40,973,821 3,452,031 12,609,910 208,492,418 484 5,281,462 229,836,305 289,677 53,037,183 8,432 252,966 53,588,258 57,339 14,692,491 494 3,520 540,026 15,293,870 19,124,936 494 3,520 1,597,757 20,726,707 39,062,355 32,687,342 20,542,449 2,028,478 827,605 14,553,702 178,779 8,137,099 78,955,454 172,069 733,332 14,076,595 29,333,207 210,594 222,972 44,748,769 597,194 553,690 23,821,508 30,638,427 315,893 340,979 56,267,691 272,890 5,233,088 53,310,322 631,784 340,978 59,789,062 4,643,024 11,526,299 1,263,569 199,597 17,632,489 2,633,923 988 1,186 1,166,807 3,802,904 13,829,585 4,448,400 14,481,524 1,263,569 199,597 20,393,090 2,589,237 408,758 1,186 1,166,807 4,165,988 16,227,102 13,679,516 17,948,277 2,527,138 299,396 34,454,327 159,576 1,719,738 (869) 208,281 1,166,807 3,253,533 31,200,794 3,168,631 9,097,754 6,099,913 514,468 18,880,766 600,170 440,697 172,857 1,213,724 17,667,042 6,118,918 10,682,824 1,355,535 18,157,277 514,151 514,151 17,643,126

NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS

Assets Cash and balances with treasury banks Balances with other banks Lendings to financial institutions Investments Advances Operating fixed assets Other assets

Liabilities Bills payable Borrowings Deposits and other accounts Sub-ordinated loans Liabilities against assets subject to finance lease Deferred tax liabilities Other liabilities

Net assets

Share capital Reserves Unappropriated profit Share in share premium of associate Minority Interest Surplus on revaluation of assets - net of tax

The above mentioned maturity profile has been prepared based on contractual maturities. The management believes that such a maturity analysis does not reveal the expected maturity of saving deposits as a contractual maturity analysis of deposits alone does not provide information about the conditions expected in normal circumstances. The management believes that the maturity profile disclosed in note 42.4.1 that includes maturities of current and saving deposits determined by the Asset and Liability Management Committee (ALCO) keeping in view historical withdrawal pattern of these deposits reflects a more meaningful analysis of the liquidity risk of the Bank.

A dedicated IT Security Unit is functioning within Risk Management Division while responsibility for BCP implementation resides with Operations Group. people and systems or from external events”. occurring across the organization and reported to Operational Risk Management Department. the mapping of business activities into Basel defined business lines has already been completed. An Operational Loss Database. A separate ‘Research & Help Desk’ has been created in this regard that helps in creating awareness about Risk Management. Key Risk Indicators (KRIs) have been identified across the Bank and now KRI reporting has also been initiated. which covers the strategies.RMD. Risk & Control Self Assessment (RCSA) exercise and Key Risk Indicators (KRIs) are being developed and implemented across the organization. the Bank intends to move towards the ‘Alternative Standardized Approach’ and for this purpose. Bank has categorized all its Operational loss / near miss incidents into following loss event categories. In compliance with the Risk Management Guidelines. Internal Fraud External Fraud Employment Practice & Workplace Safety Client. processes. The Operational risk management policy of the Bank is incorporated in the Board-approved Risk Management Policy and Risk Management & Internal Control Manual. Product & Business Practice Damage to Physical Assets Business Disruption & system Failure Execution. All the business / support units are responsible for ensuring compliance with policies and procedures in their day-to-day activities and monitoring key operational risk exposures. “the risk of loss resulting from inadequate or failed internal processes. 42.NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS 42. As required by Basel II. issued by SBP.5. monitor. structure and functions of Operational risk management and provide guidelines to identify. Basel II and the capital calculation approaches. BAL’s Information Security Policy and Business Continuity Plan have been approved by the Board of Directors and are in the process of implementation. control & report operational risk in a consistent & transparent manner across the Bank. 101 169 Annual Report 2009 . in order to use it as an action plan in improving the operational risk & control system at the organizational and business / support unit levels. assess. an Operational Risk Function has been established within RMD. Operational Risk Function and business / support units are involved and regularly collaborate in determining and reviewing the strategy. These operational losses. the Bank is using the ‘Basic Indicator Approach’ for calculating the capital charge for Operational Risk. At Bank Alfalah.1 Operational Risk Disclosures . are aggregated to an internally developed ‘Operational Loss Database’.Basel II Specific Currently. Almost all the policies and procedures of the Bank are reviewed from the risk perspective. However.5 Operational risk Basel II defines Operational risk as. and the recommendations of RMD are taken into consideration before their approval at the appropriate level. which directly reports to General Manager . A reporting structure has been put in place whereby all business / support units have been made responsible to collect and report the operational losses / near miss incidents to Risk Management Division. risk awareness culture is being encouraged by communicating the principles of proper risk management to all Bank employees. Delivery & Process Management For the purpose of continuous monitoring of risks.

This appropriation will be approved in the forthcoming Annual General Meeting. 176. 2009 do not include the effect of this appropriation which will be accounted for in the financial statements for the year ending December 31. 2008 has been reclassified from administrative expenses and included in markup / return / interest expensed. 79.945 million for the year ended December 31. 196. 3. NON-ADJUSTING EVENT AFTER THE BALANCE SHEET DATE The Board of Directors in its meeting held on March 15.1 GENERAL Comparatives Comparative information has been re-classified. Significant reclassifications include: a) Brokerage expense amounting to Rs. 2008 has been reclassified from administrative expenses and netted off from fee. 2010. There was no impact of this reclassification on aggregate amount of mark-up / return / interest income. DATE OF AUTHORIZATION These financial statements were authorized for issue on March 15. 2008 have been reclassified from administrative expenses and netted from markup / return / interest income. 450. The financial statements for the year ended December 31. Chief Executive Officer Director Director Chairman Annual Report 2009 101 170 . re-arranged or additionally incorporated in these consolidated financial statements. Rs. 45. Musharika and Murabaha amounting to Rs. 45.311 million respectively for the year ended December 31. wherever necessary to facilitate comparison and to conform with changes in presentation in the current year. 422. 2008 has been reclassified from the advances to other assets as advances against Ijarah.214 million for the year ended December 31.514.614 million for the year ended December 31.755 million. 1. commission and brokerage income. 44.925 million and Rs.510. b) Interchange acquiring fee relating to credit card business amounting Rs. 2008 has been reclassified from mark-up income on investment in Available-for-Sale and shown Rs.NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS 43. 233.115 million and Rs. e) Advance against Ijarah. c) Reward payments amounting to Rs.503 million for the year ended December 31.289 million as income on investment in Held-for-Trading and Held-to-Maturity respectively. 2010 by the Board of Directors of the Bank. 1. 2010 has announced cash dividend of 8 percent. Musharika and Murabaha. d) Mark-up / return / interest income amounting to Rs.

) 3 4 Ghulam Haider Qazi Muhammad 3.236. Lahore.000 403. Main Gulberg.000 3.) Ltd.203.000 3.000 5 Shafique A.000 3. Saddar.I 1 Index Commodities (Pvt. Syed Hussain Abbas 42301-7152071-9 Muhammad Akbar 42201-8186616-7 Muhammad Hussain 3. 2009 Total (5+6+7) Principal written-off Mark-up written-off 6 738. Raja Center Main Market Gulberg. No.000 1. Kot Lakhpat.000 9 Anwars Mahnoor Collection First Floor.000 8 Apex International Associates 13-F.000 S.000 - - 3.000 2. Rizwan Ahmed 35201-9849754-3 Muhammad Arif 275-43-292808 Shahida Rasheed 35202-3686068-8 Information not available with the Bank's record 1.000 7 Sheikh Impex (Pvt.000 4.000 Name and address of the Borrower Others 7 9 79.896.000 Outstanding Liabilities at January 1.000 79. Dundas Street.2 KM Sheikhupura.000 2. Khurshid Ahmed 553. Sheikh 53-B.000 4 Alliance Trading Company PO Box 2269.) Ltd. Naqi Market.748.000 3.000 4.802. Lahore.000 1.236.000 6 Faran Enterprises (Pvt.000 757.000 RUPEES OR ABOVE DURING THE YEAR ENDED 31 DECEMBER 2009 (Rupees in ‘000) Total (9+10+11) 12 3.802. Iqbal Hookmani 24.000 - 2.252. Minhaj-ud-Din Sheikh Bashir Ahmed Chaudhry Manzoor Hasan Shafqat Iftikhar Muhammad Shafiq 1.000 553. Sheikh 1.896.000 - 2 Malik Saleem Brothers M.000 3.154.000 - 601.229. 9. Tahir Ahmed - - 2.748.421.951.178.802.C. 42301-9818102-9 Shaikh M.000 - - 2. Shahab-ud-Din 239-64-022417 Sh. Gulberg.000 601.390.000 Name of individuals / partners / directors (with N. Information not available with the Bank's record 2.079. Nazir Ahmed Chaudhry Niaz Ahmed Khan Chaudhry Bashir Khalid Noor Ahmed Tahir Nazir Information not available with the Bank's record 3. Lahore. Akhter Information not available with the Bank's record 2.154.I.229.229.000 101 171 Annual Report 2009 . Lahore.631.000 - 27. Karachi.802.000 1.178.000 48.229. 84 Industrial Estate.000 - - 2.748. Father’s / Husband’s Name Principal Mark-up 5 8 10 738. Lahore. 1st Floor.421.000 - 1. No.) Ltd.000 757.STATEMENT SHOWING WRITTEN-OFF LOANS OR ANY OTHER FINANCIAL RELIEF OF 500.631.000 1.000 3 ESP Global IT System Sh.000 403.748. Anum Centre.520.923.000 1.923.079.520.390. Khurshid Ahmed Saeed Ullah Sh. Shaukat Iqbal Vora Abdul Khaliq Nuzhat Firdous Firkhanda Jabeen G.000 48.000 - - 1.000 - Shafique A. A.000 - 4.000 1 2 Other financial relief provided 11 ANNEXURE .000 2.000 4.

170.170.000 Name of individuals / partners / directors (with N. Lahore Mian Muhammad Akram Muhammad Jawad Ikram 35 Hunza Block. Mian Muhammad Akram 35 Hunza Block. 12 Arshad Ali Sheikh 33100-1301643-7 720.000 97.847 13 Aslam C-74-75.000 Name and address of the Borrower Total (5+6+7) 8 Principal written-off Mark-up written-off Total (9+10+11) 3 4 6 97.428 4.000 17 M/S Al-Qadeer Coach Sher Rehman Gul Karim Shop # 03. No. Bashir Sh. 6.847 502. Mian Muhammad Ismail 24.558.375 - - 4.875 2. 2.795. General Bus Stand.171 79.532.265.237 3.387 3. Allama Iqbal Town.268.867.233.873 - 11 Arshad Ali Sheikh House No.595 723.888.163 3.) Outstanding Liabilities at January 1.269 15 Dixy Fried Chicken Wasim Ghias Sheikh 29-E-1. Sheikh Muhammad Shafique Sheikh Muhammad Jamil Sheikh Muhammad Pervez Sheikh Muhammad Naeem Aftab Jamil Information not available with the Bank's record Information not available with the Bank's record Information not available with the Bank's record Information not available with the Bank's record Sh.258 1.304.435.I 1 2 Other financial relief provided 11 10 Bashir Tanneries (Pvt.959 788.366 502.250. Muslim Street Kahna Nau.053 - 18 Balaj Textile Mills (Pvt.252 221.250.522. Mian Muhammad Ismail 25.Annual Report 2009 101 172 (Rupees in ‘000) Father’s / Husband’s Name Principal Mark-up 5 9 12 10.572 345.841 12 Farooq Nizami H # P-7. Others 7 10 20. Ghais ud Din 2. Dhoraji Colony Aslam 42201-6769103-5 578.875 2.074 710. Karim Block Abdul Munaf 35202-4929724-7 359. No.968 218. 198.080 46.074 2. Saeed Colony Farooq Nizami 33100-4619337-9 - 723.595 501.945.233.000 1. 2009 ANNEXURE .250.002.818 10.558.624 14 Abdul Munaf H.258 - 1.000 108. Muridke.558.375 1.503.435.026.I.989 .058 1.366 578.C.000 - S.375 Mian Ikram Mahmood House No.054.) Ltd. Total 98.532.211 359.968 218.269 788.292.624 592.074 2.387 - 3.000 - - 2. Lahore.147.058 - 1. Mohammd Shafiq Muhammad Jamil 20.888.262 79. Rawalpindi. Lahore 35201-6548150-7 Fakhar Din 2. Near Gillani Hotel. Allama Iqbal Town.000 10.000 M.818 5.000 52.252 221.147.841 501.) Ltd. Street No.292. 23-KM GT Road. No.873 720.211 592.292. Pirwadahi.572 345.959 16 G K Goods Forwarding Agencies Gul Karim 2. Lahore. Gulberg III.

242.097.344 37.808 28.614 1.961 2.559 1.552.614 1.200 1.II ISLAMIC BANKING BUSINESS The bank is operating 60 Islamic banking branches as at December 31.177.132 10.309 1.639.331.119 29.ANNEXURE .168.920. re-arranged or additionally incorporated wherever necessary to facilitate comparison and to conform with changes in presentation in the current year. 2008: 48 branches).939.115 3. .800.846.724 1.389 16.074 3.619 10.073.253 3.166 291.277.088 38.986.969.554 7.net of tax 4.219 42.379.302 3.243.995 1.796 688.107 38.852 73.211.800.500 1.000 8.525.121 2.228 2.602 1.291.327 331.612 30.144.579 3.268 2. 2009 (December 31.995 3.500 Remuneration to Shariah Advisor / Board CHARITY FUND Opening Balance Additions during the year Payments / Utilization during the year Closing Balance 37.800 20.097.921 5.575 101 173 Annual Report 2009 Note: Comparative information has been re-classified.846.740.619 717.086.522.845.552 3.841 7.658 575.000 3.253 1.163 35.499 19.487.464.138 760.049 46. 2009 2008 (Rupees in ‘000) ASSETS Cash and balances with treasury banks Balances with and due from financial institutions Lendings to financial institutions Investments Advances Operating fixed assets Other assets LIABILITIES Bills payable Borrowings from financial institutions Deposits and other accounts Subordinated loans Liability against assets subject to finance lease Deferred tax liabilities Other liabilities NET ASSETS REPRESENTED BY Islamic Banking Fund Exchange Equalization Reserve Unappropriated/ Unremitted profit Surplus / (Deficit) on revaluation of assets .575 46.

833 127.579 76.424) 1.961 70 1.338 64.899 4.961 Annual Report 2009 Note: Comparative information has been re-classified.ANNEXURE .478 17.204) 74.544.013 32.515 1. 2009 2008 (Rupees in ‘000) Mark-up / Return Earned Mark-up / Return Expensed Net Mark-up / Return Income Depreciation on assets given on lease Net Mark-up / Return Income after depreciation Provisions against loans and advances Provision for diminution in value of investments Bad debts written off directly Net Mark-up / Return Income after provisions NON-MARK-UP INCOME Fee.133.Mark-up Income NON-MARK-UP EXPENSES Administrative expenses Other charges Total Non.746 701.743 123.Mark-up Expenses PROFIT BEFORE TAXATION Unappropriated profit brought forward Transferred from Surplus on revaluation of fixed assets-net of tax Profit available for appropriation / unremitted profit 3.356 286.900 1.229 127 846.480. 2008: 48 branches).829.687 185.552.973 70 575.902 50.548 575.II ISLAMIC BANKING BUSINESS The bank is operating 60 Islamic banking branches as at December 31.156 1. 2009 (December 31. 101 174 .488 82.823 (47.294 1.071.206 1.685 1.274 846.070 76.206 59.204 1.037.040.096 1.562 1.136 948. re-arranged or additionally incorporated wherever necessary to facilitate comparison and to conform with changes in presentation in the current year.890 1.479.918 288. commission and brokerage income Dividend income Income from dealing in foreign currencies Gain / (Loss) on sale of securities Unrealized gain on revaluation of investments classified as held for trading Other income Total Non.742.277.373.138 2.201 1.985 31.545 3.491 12.942 27.447.304 295.990 (25.990 32.071.064 31.

181.973 1.000 140.000 185.749 4.000 95.525 5.001 15.781.001 60.019 1.001 225.805 260.037 566.325.001 185.000 205.001 175.001 120.823 4.000 75.658.662.838 1.000 150.784.437 18.000 115.001 25.000 120.001 - To 100 500 1.735.001 165.001 125.001 220.000 255.000 245.056 4.070.762 7.001 190.499 2.331 2.512 3.001 235.001 205.864.001 45.318 4.AS AT DECEMBER 31.766.831 1.000 220.054 1.739 1.624 1.226.034 2.000 10. 2009 COMBINED PATTERN OF CDC AND PHYSICAL SHARE HOLDINGS Number of Share Holders 1.564 639 438 273 159 118 93 106 65 83 33 42 34 31 28 27 12 68 12 23 37 15 20 13 9 12 4 16 7 8 9 17 4 6 1 3 5 11 7 9 3 7 5 4 5 4 7 11 1 From 1 101 501 1.001 200.113 1.000 160.316 1.001 40.000 80.798 9.001 135.538 696.001 30.001 215.001 35.411.000 60.000 190.469.001 155.799 2.251.000 Number of Shares Held 81.000 235.000 260.000 135.001 240.738 1.192.063.001 90.376.000 130.001 5.001 80.032 1.103 2.413.001 50.318 2.001 250.852.027 2.001 75.001 65.406.255 5.000 55.000 110.000 175.001 115.001 55.797 4.261.001 255.000 240.001 245.000 30.000 145.988 969.680 1.001 145.000 250.000 155.084.082.430 649.375.089 1.001 170.000 195.000 225.166.896.188.000 70.352 183.469.761.000 85.331 1.001 110.921 2.000 50.000 45.796 2.026.000 40.806 6.101 26.862.001 150.750 3.000 65.000 200.649 11.001 140.868.108.000 100.000 20.001 180.614 2.574.629 3.980 2.001 100.244.001 10.655.136.905.792 1.001 95.676 934.001 195.904.000 105.000 35.545 28.000 170.001 70.355 964.444.001 85.187.001 130.625 559.000 125.001 230.000 180.000 101 175 Annual Report 2009 .141 2.618 9.001 20.581.000 25.000 210.731 2.879 1.511.000 5.001 105.204 1.000 90.000 230.857 1.000 165.000 15.001 160.482.

000 390.829 532.000 330.000 275.090 516.824 1.001 325.744.000 290.001 455.025 1.703 879.000 510.064 1.000 340.000 1.468 1.000 505.001 355.001 390.000 490.000 365.131.295.194.000 470.476 2.000 355.001 505.001 485.000 Number of Shares Held 1.000 1.000 515.001 435.137 449.000 325.001 515.608 1.001 500.001 445.366 1.313.850 935.001 395.001 560.001 545.000 310.997.000 425.138 523.001 285.001 535.000 560.000 460.041 538.000 285.000 400.001 475.000 315.000 540.000 295.392 457.937 674.602 345.500 513.001 320.000 651.000 535.409.001 295.250 785.000 410.005.312 1.000 1.001 575.041.000 395.133 1.619 450.001 430.001 350.001 305.000 475.001 360.125.000 552.735 475.001 510.000 350.000 555.876 573.001 340.001 310.150 728.000 320.001 440.000 490.558 1.769 359.001 420.001 - To 265.000 500.250 405.000 495.COMBINED PATTERN OF CDC AND PHYSICAL SHARE HOLDINGS AS AT DECEMBER 31.000 440.001 335.000 450.000 360.000 480.099.001 385.629 1.044 266.001 405.454 398.000 590.110.000 270.998 325.000 300.000 345.000 455.000 575.000 525.900 820.001 555.523 1.323.151.001 490.000 520.001 550.418.498 438.000 375.001 375.001 580.562 423.000 435.928 309.001 495.001 380.001 345.001 270.071 Annual Report 2009 101 176 .001 370.000 580.000 280.001 290.000 380.001 275.522.001 280.001 530.458 1.688.000 585.000 550.000 565.124 488.200 763.426 1. 2009 Number of Share Holders 5 1 3 4 6 2 3 4 1 3 5 1 2 2 1 3 4 1 2 4 3 2 2 2 1 1 1 3 1 3 1 1 1 4 3 1 1 1 6 2 3 1 1 1 1 1 2 1 1 2 1 2 3 1 From 260.001 570.000 385.612 779.001 585.206 588.000 445.001 315.001 265.998 1.493.000 557.586.001 465.001 520.001 470.869.001 450.712 575.946 1.

001 1.245.420.001 710.500.065.887 647.578 963.000 1.145 604.321.000 1.000 605.000 985.001 740.178 843.155 1.000 1.000 1.000 650.001 700.100.000 1.555.000 1.001 835.403.367.000 1.001 665.302 807.120.186 1.001 1.000 1.000 1.001 1.416.190.105.000 905.199 1.382.001 1.001 960.795 1.000 1.000 675.730.000 810.000 680.001 1.001 695.840 679.501 710.000 700.600. 2009 Number of Share Holders 1 1 1 1 1 3 1 2 1 1 1 2 1 1 1 1 1 1 2 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 2 1 1 2 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 From 595.225.350 629.685.085.189.000 1.600.001 1.000 1.095.800 905.060.826 1.000 1.001 1.309 837.000.737 904.001 675.170.001 1.000 630.100.000 1.001 995.001 1.000 1.173.084.725.837 1.353 1.600.185.001 625.000 745.552.729.001 680.000 700.420.875 1.688.045.000 670.115.405.000 1.200.001 810.001 1.652 2.494 665.116.000 1.000 1.128 766.001 765.350.000 1.266 1.001 890.COMBINED PATTERN OF CDC AND PHYSICAL SHARE HOLDINGS AS AT DECEMBER 31.001 1.122 1.350.001 1.000 770.001 1.288 758.000 1.000 1.484 700.125.320.001 1.714 1.050.410 975.001 860.001 1.057 101 177 Annual Report 2009 .000 910.001 1.937 1.000 715.061 744.000 705.000 840.001 1.063.000.000 1.000 1.330 892.000 1.000 Number of Shares Held 598.500.001 1.001 1.000 1.000 815.800 776.001 705.025 2.195.650.001 900.001 1.001 - To 600.461 1.380.025 981.645.001 905.750 864.001 805.001 670.000 865.000 1.494 1.000 1.270.274.415.000 1.001 775.690.385.001 1.603.312 1.595.000 980.400.020 2.175.001 1.000 685.447 692.080.001 975.000 1.220.000 965.563 1.000 695.766 1.400.000 710.045.605.001 840.415.229 1.423.001 645.645.100.000 1.000 1.716 1.001 1.001 1.001 755.001 980.001 1.000 845.621.001 600.000 1.000 895.120.000 760.000 1.001 690.223.275.345.495.425.100.325.512 1.024.000 780.550.

149.610.000 18.001 5.745.966.021.829 6.001 7.000 4.330.535.895.871 5.700.000 14.001 36.263.045.000 2.001 18.000 2.245.605.000 Number of Shares Held 1.825.950.001 8.665 5.551.130.415.000 4.000 5.395.320.001 55.470.000 2.800.653.380.965 19.001 4.525.605.000 1.760.001 6.250 Annual Report 2009 101 178 .000 10.947 36.001 2.890.500.710.001 3.001 3.850.690.490.690.257.490.250.000 4.818 25.001 19.520.825.001 2.475.001 1.000 2.856 From 1.001 5.264 25.080.000 31.850.475.001 4.000 3.705.001 14.260.000 1.970.000 53.001 3.068 18.000 2.000 5.000 2.210 11.685.705.965.805.317.000 3.001 2.310.020.000 3.788 13.387.000 30.001 4.850.001 53.050.500.757 30.433 1.000 2.945.360 3.001 10.001 103.477.166 206.895.001 32.000 75.000 4.000 6.750.740.685.534 4.001 7.424 53.000 22.001 3.650.740.611 14.150.001 12.000 4.060 8.145.001 2.001 6.205.890.281 2.000 36.514 3.000 68.000 2.832.760.390.480.690.349.694.001 11.000 2.478.040.000 14.001 119.947.001 30.515.385.875 19.000 103.475.000 7.795.000 7.000 2.531.001 3.480.605.475.550.603 3.085.210.000 3.000 25.335.605.600.259 22.391.255.128.315.000 2.001 22.033.350.001 8.258 68.000 4.364 10.001 2.000 5.862 4.470.270.000 119.620.695. 2009 Number of Share Holders 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 2 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 2 1 26.025 1.000 2.000 14.045.687.810.000 2.749.308.288 2.096.882 2.330.001 4.352.001 2.000 8.700.141 31.600.084 4.625.000 1.260.369 3.835.390.000 6.495.001 2.495.845.655.001 19.000 19.687.830.100.898.095.000 7.044.000 8.555.083.275.001 2.970 4.695.000 12.322 75.385.147 7.000 13.800.000 32.265.849 6.000 5.025.687.125.745.605.475.900.845.000 3.474.000 8.966 119.156.248 2.400 2.001 1.001 75.001 31.525.001 68.000 55.001 - To 1.000 19.690.805.809 32.384.001 14.530.000 4.274.000 11.600.620.468 3.685.COMBINED PATTERN OF CDC AND PHYSICAL SHARE HOLDINGS AS AT DECEMBER 31.355.850.830.001 5.001 2.514 2.001 13.001 25.305.049.250 55.520.765.000 2.250.001 2.

Shareholder’s Category Number of Shareholders Number of Shares Held Percentage 1 2 3 4 5 6 7 8 9 10 11 Individuals Financial Institutions Investment Companies Insurance Companies Mutual Funds Joint Stock Companies Charitable Trusts Leasing Companies Modarabas Cooperative Society Others 26.170 273.239.00 101 179 Annual Report 2009 .00 8.24 4.156.728.17 7.951.COMBINED PATTERN OF CDC AND PHYSICAL SHARE HOLDINGS AS AT DECEMBER 31.690 56.250 69.24 0.144 12.02 0.915 1. No.388.888 97.047 94.985.03 0.856 941.477 3.30 100.293.19 0.81 7.349.00 3.896 358.946 42.01 0.453 111.800. 2009 S.471 38 24 16 27 223 4 5 7 1 40 26.624 123.

Zahid Ali H.22 0. Zahid Ali H. Abdulla Nasser Hawaileel Al Mansoori .846 604.357. CFO & Company Secretary Shares Purchased 2009 Shares Sold 2009 Mr. Sirajuddin Aziz .474 11. of Shares Held 1 16. Sheikh Nahayan Mabarak Al Nahayan H. CFO) Shareholders holding ten percent or more shares Total Paid up Capital 10% of the Paid Up Capital 1.459 Shares Shares Holding % 11.807 433 1 383 43.603 576. CFO Mrs.457 3. Fahmida Jamall (Spouse of Mr. Nadeem Iqbal Sheikh .350 389.156.H.03 H. Sheikh Hamdan Bin Mubarak Al Nahayan .847.250 134.331 67. Insurance Companies. Director Mr.572.904. CEO.352.04 28. Ikram Ul Majeed Sehgal .000 897. Director Mr.556.349. NBFIs. DFIs.360 3.383 7 135.904.16 10.470 3. Director Mr.H.357. Khalid Mana Saeed Al Otaiba . Director Mr.COMBINED PATTERN OF CDC AND PHYSICAL SHARE HOLDINGS AS AT DECEMBER 31. 2009 Shareholder’s Category 1NIT & ICP National Bank of Pakistan 2Directors & Chief Executive Officer Number of Number of Category wise Percentage Shareholders Shares Held No.76 16. Director/CEO Mr.625 - 101. Sheikh Hamdan Bin Mubarak Al Nahayan 150.H.441. Jamall. Abdulla Khalil Al Mutawa .803.383 1.962 17.930 96. Sirajuddin Aziz .242 135.90 239.707 54.387. Jamall. Director/CEO 345Executives Public Sector Companies and Corporation Banks. Modarabas and Mutual Funds & Others Trading in shares by Directors.930 Annual Report 2009 101 180 .25 H. Director Mr. Director Mr.915.

E.23/1.R. Phone : (021) 32750627-28.T. No.T. Luxmidas Street. Phone : (021) 36803041. 34984824. 34522441. 5 & 6 Fax : 36803043 101 181 .Chundrigar Road. 15.I. 154-S.10 (Old Surv. Building. Phone : (021) 32414030-39 UAN No. Block-2.13.SB-15. 34984833 Fax : 34984971 Karachi Stock Exchange Branch 18-20. KDA Scheme No. Sur.A26/5). Block . M. Phone : (021) 35065701-2 Fax : 35050653 M. I.7/23. S.H. Korangi Industrial Area. 35 / Sheet No.E. Block-9. Phone : (021) 35833778-82 Fax : 35879175 Shahrah-e-Faisal Branch Progressive Square. Sector 23. BC-6. 3. Bahadurabad. Phone : (021) 32750635-9 Fax : 32750632 Defence Housing Authority Branch Plot No. University Road. Siddique Wahab Road. Phone : (021) 32532483-4. Defence Housing Authority. Lawrence Quarters. 34522460 Fax : 34313539 Jodia Bazar Branch Gulzar Manzil.C.Jinnah Road/Abdullah Haroon Road. Stock Exchange Road. Napier Quarters. Phone : (021) 34535861-2. Phone : (021) 32581247. Bahadur Shah Zafar Road. Phone : (021) 32544021-24. Phone : (021) 32401621-6 Fax : 32401627-32418896 Clifton Branch Plot No.BRANCHES NETWORK KARACHI Main Branch B. Opp: Police Station Gabol Town. 1-3.Jinnah Road Branch Plot No.E.ST-4/2. Federal 'B' Area.No. Clifton. Campbell Street. 34538423-24 Fax : 34314221 Annual Report 2009 Federal 'B' Area Branch C-28. NP .A. 11-A Block-6 PECHS. 32540065 Fax : 32540066 Bahadurabad Branch Prime Arcade. C-12-C 26th Commercial St. Paper Market. 32582116 Fax : 32582113. S.A. 34984904. Phone : (021) 35302639-44 Fax : 35302635 PECHS Branch Shop No. Phone : (021) 32211353-58 Fax : 32211243 Gulshan-e-Iqbal Branch Plot No. North Karachi Industrial Area. No. Shop No.I. Phone : (021) 34129677-81. Phone : (021) 36986170 Fax : 36986051 Paper Market Branch Plot No. Karachi Stock Exchange Building. Phone : (021) 32417515-19 Fax : 32418353 North Napier Road Branch Surv. Phase V. 34128578-81 Fax : 34129676 Timber Market Branch Ground Floor. 32544816-20 Fax : 32532485 Korangi Industrial Area Branch Aiwan-e-Sanat.I.S. 32582115 North Karachi Industrial Area Branch Sector 12-B. Siemens Chowrangi.24. 36344700. Branch D-40. Phone : (021) 34984937. Estate Avenue. Phone : (021) 34313536-38. Fax : 32750629 S. 32582990-1. Block 13-B. Plot No. Jodia Bazar. Gulshan-e-Iqbal. : 111-777-786 Fax : 32417006 Cloth Market Branch Cochinwala Market.A. Zelin Place (Habib Bank Building). P.

Khaleeq uz Zaman Road. North Karachi. 118-119 Z.E. Phone : (021) 34904601-2 Fax : 34904603 Annual Report 2009 Landhi Branch Area 5-D. 18 Gulistan e Johar Phone : (021) 34638114. 32238605 Fax : 32225941 DHA Phase IV. Defence Housing Authority.E. Gizri Phone: 021 -35868991-93 Fax: 021 -35867149 Sea View Sahil Promenade.1.C.35 Fax: 35312837 Gizri K-4/3. Block . 80. 34993792 Fax : 34985729 Garden East Branch Silver Jubilee Apartment. Phone: (021) 35658714-16 Fax: (021) 35658717 Johar Chowrangi Branch Rufi Shopping Mall Block.3. Near Ismailia Jamat Khana. Haji Ishaq Market. Britto Road. M. State Life Building # 5. Karachi Phone : (021) 36957622-621 Fax : 36957176 Tariq Road Branch 124/A. Block 'E'. Phone : (021) 34398457-9 Fax : 34398456 DHA Phase-I Branch 114.I.T.R. Karachi Phone: (021) 35312832 . Clifton.BRANCHES NETWORK Eidgah Branch 166.S.H. Tipu Sultan Road. Main Hawksbay Road. Phone : (021) 32585001-4 Fax : 32585005 Malir Cantt. Malir Cantt. Ch. Sani Arcade. 36626066 Fax : 36625402 Gulistan-e-Jauhar Branch Yasir Plaza. Gulshan-e-Iqbal Phone : (021) 34978252. Block 10-A. Scheme 5. Main Tariq Road Phone : (021) 34386052-5 Fax : 34386056 101 182 . Defence Housing Authority. Phone : (021) 34815926-7. Abdullah Haroon Road. Karachi Phone: 021 -35364095-97 Fax: 021 -35371259 Nazimabad Al-Kausar Homes. Block 2. Marriot Road. Opp. P. Phone : (021) 36626004. 32238717. Phone : (021) 32414138-40 & 32412080 Fax : 32412082 Hyderi (North Nazimabad) Branch Plot # ST-4. Al-Burhan Circle Hyderi. Quaid-e-Azam New Truck Stand Phone : (021) 32355871. Block-III. Garden East Phone : (021) 32238704. Scheme 45. 34015966-7 Fax : 34638115 Nagan Chowrangi Branch Plot # SC-28. Phase IV. Gulshan-e-Iqbal. Karachi Phone: (021) 36708980-83 Fax: (021) 36708978 Saddar Branch Shop # 6. S. Phase-I. Main Rashid Minhas Road. Murad Khan Road. 10th Commercial Street. 32238722. Sub-Block “E”. 9th East Street. North Nazimabad. Cantt Bazar. Block 3. Branch Old Malir Cantonment Library. A. Nazimabad. 32355872-74 Fax : 32355875 Shershah Branch D-283. Adamjee Nagar. Sheet # M. 34815930 Fax : 34815924 Tipu Sultan Road Branch Plot No. Phone : (021) 35887571-73 Fax : 35887574 Hawksbay Road Branch KB-28. Sector 11-H. Near Light House Phone : (021) 32217290-4 Fax : 32217244 Marriot Road Branch Karachi Survey # 67. Main Korangi Road. Jinnah Road. Main Shershah Road. Karachi Plot No. Plot # 2. 194/2/1. Landhi Township Phone : (021) 35034451-3 Fax : 35030875 Gulshan Chowrangi Branch Gulshan Chowrangi. Sector 36-E.

612541 Fax : 613488 GAWADAR Airport Road. Phone : (0826) 613440. 332. Preedy Street.2-12(1). Block 2. 334.476/1 & 476/2. Artillery Maidan Quarters. 1.A. Block 7. Karachi Phone : (021) 34911794-7 Fax : 34911793 Urdu Bazar Branch Plot No. S. West Wharf Phone : (021) 32205966-67 Fax : 32205990-92 Liaquatabad Branch Plot No 21. Karachi Phone : (021)-34860794-95 Fax : 34860793 Gulshan-e-Hadeed Branch 8329 Phase I. Saddar Phone : (021) 32725107. Phone (081) 2832130 Fax : 2827329 Liaquat Bazar Branch Liaquat Bazar. Gawadar Phone : (0864) 211796-98 Fax : 210185 Annual Report 2009 JACOBABAD Quaid-e-Azam Road. 2460821 Fax : 2460519 Shahrah-e-Iqbal Branch Cut Piece Cloth Market. 627. 32724939 Fax : 32724928 Steel Market Branch Plot # 8 & 9/D-1. 5624753. Malir Town Phone : (021) 34117134-35 Fax : 34117156 West Wharf Branch Sultan Centre. Liaquatabad.Jinnah Road. Liaquat Market. Karachi Phone : (021) 32214185-89 Fax : 32214183 Abul Hasan Ispahani Road Branch Sani Corner. Serai Quarters. 2784242 Fax : 2786023 Grain Market Branch Aman Center. Jacobabad Phone : 0722-650935-36 Fax : 0722-650930 101 183 . Abul Hasan Isphani Road. Quetta Cantt. 774 Fax : 32422526 Malir City Branch H-11/11. 2841180-83 Fax : 2827562 Hazar Gunji Branch Plot No. 2441663 Fax : (081) 2441665 Model Town Quetta Branch Plot # 35-B.BRANCHES NETWORK Jamshed Road Branch Ashfaque Plaza. RB 10/16-III. Quetta Phone (081) 2838033-34 Fax : 2838025 CHAMAN Trunch Road. Hazar Gunji. Urdu Bazar.B. 5624750 Fax : 5628176 NAWABSHAH Municipal Office Chowk. Sector-22. Jinnah Road Branch Property No. New M. KDA Scheme 16.A. Plot # 11. Bin Qasim Phone : (021) 34721406 Fax : 34721407 Akbar Road Branch Plot # 294. 22 & 23. 2834429 Fax : 2827270 Double Road Arbab Plaza. Phone : (022) 2786020-22. Jinnah Road. Karachi Fax : 021-34974487 Hussainabad Branch R-471.A. AM-3.A. Commercial Area. Jinnah Road Phone : (021) 32422679. adjacent to Hotel Faran. Phone : (081) 2460520. Jinnah Road. Truck Stand. Sarafa Bazar. Opp New Memon Masjid. M. Katchery Road Phone : (0244)330723-25 Fax : 330729 QUETTA M. Phone : (071) 5628175. Double Road. 333. Shahrah-e-Iqbal Phone : (081) 2834425. Area Karachi Phone : (021) 36337646-47 Fax : 36337648 HYDERABAD Plot No. M. Saddar. Sub-Sector. 8-C/1. Quetta Phone : (081) 2441961-62. Price Ali Road Hirabad Phome : (022)-2660611-5 Fax : 2660620 SUKKUR B-2823/B-2851. Phone : (081) 111-777-786.A.R. A210. 32725146. Frere Road. Liaquat Market. M. Model Town. KDA Scheme 33. Hussainabad. F. Ram Bagh. Jamshed Quarters.

Phone : (042) 36844006-09 Fax : 36844010 Ravi Road Branch 13 Ravi Raod. 4055812. Adam Town. Commercial Area. Badami Bagh. Akbar Block. 36368905 Gulberg Branch 125/E-I. Opp: Mazar Hazrat Shah Mohammad Ghous. Phone : (02338) 74466. Phone : (042) 35152831-6 Fax : 35113716 Badami Bagh Branch 29-30 PECO Road. Main Walton Road Phone : (042) 36602334-8 Fax : 36687391 Tufail Road Branch 50/3. Raiwind Road.T. Wassanpura Phone : (042) 37616252-56 Fax : 36260295 Ferozpur Road Branch 18-KM Main Ferozpur Road Phone : (042) 35807812-14 Fax : 35807813 Shahdara Branch Main G. 36300586 Fax : 36300589 DHA Extension Branch Divine Centre. College Block. Phase-I. Phone : (042) 36307461-68 Fax : 36307460 Baghbanpura Branch G. Mall Road. Lahore Stock Exchange Building. Umer Din Road.2. Block 10. Phone : (042) 35877800-8 Fax : 35754900. Allam Iqbal Town. Liberty Market. 4055360 Fax : 5053962 LAHORE LDA Plaza Branch LDA Plaza.T. 74686 Fax : 75127 LARKANA Bunder Road Phone : (074) 4055712. Circular Road. Phone : (042) 36012000-30. Phone : (042) 35314671-5 Fax : 35314678 Shahdin Manzil Branch Shahdin Manzil. 37728074 Allama Iqbal Town Branch 36. Lahore Cantt Phone : (042) 35700301-309 Fax : 35700213 Azam Cloth Market Branch Raheem Centre. LCCHS. Lahore. 35733591 Circular Road Branch A-43/A. Shadman-1 Phone : (042) 37538116-20 Fax : 37538129 Annual Report 2009 Lahore Stock Exchange Branch Basement Level . Road. Phone : (042) 37673401-6 Fax : 37673409 Shadman Market Branch 88. Baghbanpura. Phone : (042) 35729722-26 Fax : 35729727. Near Bhatta Chowk. Tufail Road. Phone : (042) 36306201-05 Fax : 36301193. Azam Cloth Market Phone : (042) 37643851-55 Fax : 37643860 Shad Bagh Branch 37. 36300581. Road. Phone : (042) 37708661-64 Fax : 37708660 Liberty Branch 10-C. Khayaban-e-Iqbal. Phone : (042) 36689016-19 Fax : 36688374 101 184 . 19. Gulberg-III. Township. New Airport Road. Akbar Chowk. Gulberg-III.BRANCHES NETWORK MIRPURKHAS Plot # 864/7. Faysal Chowk. Phone : (042) 37704961-66 Fax : 37728636. Phone : (042) 35432961-5 Fax : 35432960 Shah Alam Market Branch Hilal-e-Ahmar Health Complex. Phone : (042) 35789431-34 Fax : 35755226 Raiwind Road Branch Thoker Niaz Beg. 35877807 Defence Branch G-9. Commercial Area.Kashmir Road. Main Mmerkot Road. Phone : (042) 37638256-8 Fax : 37653384 Township Branch 47-B/1. Shahdara Chowk Phone : (042) 37900290 Fax : 37900291 Walton Road Branch E-28/A. Shah Alam Market. Main Boulevard.

Block-F. I-10 Markaz Phone : (051) 4435804-6 Fax : 4435807 F-7 Markaz Branch 13-U. Near EME Society Main Gate.35281081-5 Fax : 35291090 Bedian Road Branch Phone : (042) 37088164 Fax : 35742694 Fortress Stadium Branch Phone : (042) 36623082-86 Fax : 36623087 Wapda Town Branch Plot No. Phone : (051) 2810136-49 Fax : 2279897 I-10 Markaz Branch 4-A. Near Australia Building Phone : (042) 37674115-18 Fax : 37637306 DHA Phase II Branch 65 CCA.Ferozepur Road. Phase-II. Lahore ISLAMABAD Blue Area Branch 1-B. Jinnah Super Market. Islamabad Phone : (051) 2653944-49 Fax : 2653940 Stock Exchange Branch Office No. 55-B. PIA Society. 36371001 Fax : 36360962 Model Town. 5. Lahore Phone : (042) 36303081-4 Fax : 36303085 Jauhar Town Branch Plot No. Lahore Phone: (042) 37356640-42 Fax: 37222236 Main Market Gulberg 32-E-Main Market. Brandreth Road. Lahore Phone : (042) 36635969 Fax : 36635968 EME Society Branch 50-A. Model Town Lahore Phone: (042) 35884670-72 Fax: 35884675 Cavalry Ground. Wapda Town Round About Phone : (042) 35211574 Fax : 35211576 Ichra Branch 112.59 Fax: 042 -35786964 Montgomery Road Branch 65-Montgomery Road. Awan Arcade. Gulberg II. Rewaz Garden. Allama Iqbal Road. Officers Housing Scheme. 189. Lahore Phone : (042). Islamabad Stock Exchange Tower Phone : (051) 2894071-74 Fax : 2894075 F-10 Markaz Branch 4-D. Lahore 13 Bank Square. 36610534 Fax: 36610536 Chuburgi 24-Niaz View Scheme. I-8 Markaz Phone : (051) 4862563-6 Fax : 4862567 G-9 Markaz. Jinnah Avenue. Central Commercial Market. Lahore Phone : (042) 37539604-5 Fax : 37539608 Bund Road Branch Main Bund Road. F-7 Markaz. 39 Paragon Plaza Phone: (051) 2253002-3 Fax: 2854932 Annual Report 2009 101 185 . Chuburji. Lahore 35 Main Boulevard. Urfi Centre. Lahore Phone : (042) 37404868-72 Fax : 37404867 Zarar Shaheed Road Guldasht Town Branch Zarar Shaheed Road. Guldasht Town. Near Gulshan-e-Ravi Chowk.BRANCHES NETWORK Urdu Bazar Branch Main Kabir Street Phone : (042) 37210644 Fax : 37210647 Brandreth Road Branch 91-A. Cavalry Ground Lahore Phone: (042) 36610531-32. 34. Lahore Phone: 042 -35786955. 435. Block G-1 M. Ichra. Blue Area. Johar Town.A. DHA Phone : (042) 35707581-4 Fax : 35707580 Ghari Shahu Branch 99-A. Ghari Shahu Phone : (042) 36372656. Mohafiz Town. Islamabad G-9 Markaz. Markaz F-10 Phone : (051) 2809704-08 Fax : 2809700 I-8 Markaz Branch Plot No.

2 & 3. Main Bazar. Murree Road. Liaqat Road. Gammon House. G. Phone : (051) 5775325-8 Fax : 5775324 Lalazar Branch Tulsa Road. Tehsil & District Islamabad Phone : (051) 2226621-23 Fax : (051) 2226626 RAWALPINDI The Mall Branch 8. Tench Bhatta. T. Islamabad Phone: (051) 2818044-6.BRANCHES NETWORK F-8 Markaz. Lalazar Phone : (051) 5524904-5 Fax : 5527814 Chaklala Branch 59. F-8 Markaz. Peoples Colony No. Faisalabad Phone : (041) 8722636-39 Fax : 8722184 Peshawar Road Branch Plot No. Rawalpindi Cantt. PAF Road Phone : (051) 3313625-29 Fax : 3313630 Adamjee Road Branch Adamjee Road. Al-Babar Centre. Sir Fazal Hussain Road. North Star Plaza. Fax: (051) 4479295 Chowk Sadiqabad Branch Shop # 2-6. I-11/4 Phone : (051) 4436901-3 Fax : 4438828 Bhara Kahu Branch Main Muree Road. Sector 3 Phone: (051) 4479290-3. Radio Station. Shah Plaza. Fateh Jang. Road Phone : (051) 4535016-17 Fax : 4535015 WAH CANTT 4-1/100. College Road Phone : 051 . G-11 Markaz Phone : (051) 2830259. Airport Link Road. Tarnol. Bhara Kahu Phone : (051) 2233635 Fax : 2233636 G-11 Markaz Branch Sardar Arcade. Saddar. Al-Noor Colony. 5700029 Satellite Town Branch B/20. GT Road.5762008. 2854615 Fax: 2260270 Grain Market Branch Shop # 40-41. Rawalpindi Cantt. Officers Colony. Phone : (051) 5563728 Fax : 5563730 Tench Bhatta Branch Plot # 396/C. Rawalpindi Phone : (051) 5468401-2 Fax : 5468403 101 186 . Fruit Market. Rawalpindi Phone: (051) 5706022-23 Fax: 5781483 Khanna Branch Adil Tahir Plaza. Islamabad Shop No. Abassi Tower. The Mall Phone : (051) 5700038-40 Fax : 5700042. Service Road. Phone : (051) 5520475 Fax : 5520466 FATEH JANG Rawalpindi Road. 400/2. Jinnah Road (Old City Saddar Road). Peshawar Road. 5762010 Fax : 5762007 Annual Report 2009 Airport Road 7-Fazal Town. The Mall.Satellite Town. Phone : (0514) 539426-28 Fax : 511980 FAISALABAD Main Branch Ground Floor. 1. Phone : (0572)-210837-38 Fax : 210839 TAXILA Kohistan Complex. Phone : (041) 2617436-9 Fax : 2617432. Commercial Area. Chaklala Scheme III Phone : (051) 5766003-4 Fax : 5766005 College Road Branch E/20-26. Phone : (051) 4424080-6 Fax : 4424087 Jinnah Road Branch A-351. Multan Town Phone : (051) 4423078-81 Fax : 4480226 Kahuta Branch Tehseen Plaza. Opp. 2830260 Fax : (051) 2830264 Tarnol Branch Al-Noor Plaza. State Life Building. 2640834 Peoples Colony Branch 17-A/2.

Park Inn Hotel Building.3 Fax : 041-8582147 Babar Chowk Branch 641-A. Phone : (057) 2701557-58 UAN : 111-777-786 Fax : 2700248 GHOURGHUSTHI Timber Market. Montgomery Bazar Phone : (041) 2605806-7 Fax : 2621487 Minerva Road Branch P-64-B. Peashwar Saif Shopping Plaza. Susan Road. Rail Bazar Phone : (041) 2540801-2 Fax : 2540803 Yarn Market Branch P-78. B-29 & 30. Opp: DCO Bungalow. Kamra Phone : (057)-9317423-25 Fax : 9317420 HANGU Saif-ur-Rehman Market. Attock Cantt. Faisalabad Phone : (041) 2518823-4 Fax : (041) 2518825 PESHAWAR Peshawar Cantt. Jamrrud Road. Grain Market. Road Phone : 091-2593002-6 Fax : 2593001 Peepal Mandi Branch Ashraf China Trade Center Peepal Mandi. Jamrrud Road Phone : (091) 5710753-7 Fax : 5710758 Bakhshi Pul Branch Bakhshi Pul Charsada Road. Peoples Colony Extension. Menerva Road Phone : (041) 2540763. Samanabad.B.T. J. Phone : (091) 2590023-26 Fax : 2551380 Hayatabad Karkhano Shop No. Sheikhupura Road. 3 Yarn Market. Ghourghushti. Tehsil Sadar. Hayatabad. Peshawar Phone : (091) 2564911-4 Fax : (091)-2564910 Jamrud Road.8557421-22 Fax : 8557424 Khurrianwala Branch Main Bazar. Opp: Sarhad Chamber of Commerce. Millat Chowk. Street No. Faisalabad Phone (041) 2561502-03 Fax : 2561504 Samundri Branch P-35/36. Peshawar City. Jhumra Road Phone : (041) 4361080-81 Fax : 4361082 Samanabad Branch P-9. Near Sidhar Bypass.T. G. Main Mandi Road. Hashtnagri. Road Branch 1045-1046. P-81. Phone : (091) 5822902-5 Fax : 5822908 G. Samundri Phone : (041) 3424356-7 Fax : (041) 3424355 Sabzi Mandi Branch New Fruit & Vegetable Market. Islamia Road. Main Bazar Phone : (0925) 624641-43 Fax : 624644 101 187 Annual Report 2009 . Plaza. Phone : (091) 5287051-7 Fax : 5287058 Peshawar City Branch Shoba Chowk. Tehsil Hazro Phone : (057) 2872914-15 Fax : 2872916 KAMRA Attock Road. Branch 6-B. Karkhano Market.352-A. Phase III Chowk.BRANCHES NETWORK Susan Road Branch 25-Z-101. Babar Chowk Phone : (041). Faisalabad P . Gulistan Colony II. 245-RB. Madina Town Phone : (041) 8556673-75 Fax : 8556679 Rail Bazar Branch Property No. Tehsil & District Peshawar Phone : (091) 2582304-6 Fax : 2582307 ATTOCK Opposite Session Chowk.5 Fax : 2540759 Sheikhupura Road. Kohat Road. Main Road. Khyber Bazar. Gojra Road. Faisalabad Phone : 041-8582141 . Chak No.

4593210 Sambrial Branch G. Sargodha Phone : (048) 3724138-9 Fax : 3724193 CHAK NO. District Sargodha Phone : (048) 3791158. Hafizabad Phone : (0547) 501275-6 Fax : 501282 CHICHAWATNI 1-Railway Road. Model Town. Vehari Road. Road.BRANCHES NETWORK MULTAN Abdali Road Branch 62-A.T. Tehsil Pindi Bhattian. Multan. District Sialkot Phone : (052) 6522801-2 Fax : 6522803 RAHIM YAR KHAN 12-A. Main Faisalabad. Shahrah-e-Quaid-e-Azam Phone : (047) 6337704-5 Fax : 6337706 DASKA Gujranwala Road Phone : (052) 6616834-35 Fax : 6619650 HAFIZABAD Sagar Road. Gujranwala Phone : (055) 3859931-3. Phone : (052) 4591741. 540806-7 Fax : 540804 Jalalpur Bhattian Branch Mouza Jalalpur Bhattian. Paris Road. Chowk. Road.S. Road.T. Phone : (040) 4467691-95 Fax : 4467696 SARGODHA 91-C/2 University Road. 3255295 Annual Report 2009 SAHIWAL 183-Sarwar Shaheed Road. 4591442 Fax : 4591742. District. Phone : (061) 4546792-6 Fax : 4570233. Phone : (062) 2889922-5 Fax : 2889874 CHINIOT 1-A. Phone : (068) 5879880-1. Bosan Road Phone : (061) 6210367-70 Fax : 6210363 Lodhran Branch 27-2. Phone : (061)-6784201-4 Fax : 6784205 Bosan Road Branch 262-B.T. Sargodha Road. 5885970 Fax : 5879882 GUJRANWALA Opposite Iqbal High School. 4588807 Fax : 4579024 Shahrukn-e-Alam Branch 230-A Main Road. Phone : (0937) 873631-3 Fax : 873733 BAHAWALPUR Opposite BVH. Gujrat Phone : (053) 3530069-3530219 Fax : 3530319 MARDAN Mall Road. 457725 Fax : 4577232 Chowk Shaeedan Branch Akbar Road. 111 SB Pull III. Mardan Cantt. Chichawatni District Sahiwal Phone : (0405) 487802-6 Fax : 487807 Satellite Town Branch 40-A Satellite Town Phone : (055) 3253622-24 Fax : 3251423 101 188 . Rai House. Hafizabad Phone : (0547) 540801. Ward # 6. 3847031-33 Fax : 3856471. Shahrukn-e-Alam. Phone : (061) 6244492-95 Fax : 6244496 Hussain Agahi Branch Hussain Agahi Road Phone : (061) 4577242. Gulgasht Colony. 3792066 Fax : 3791169 GUJRAT G. Main Multan Road Phone : (0608) 361700-704 Fax : 363005 SIALKOT 40/A. Abdali Road.T. Shahi Road. G. Circular Road. G. Chowk Shaheedan Phone : (061) 4579021-23. 4540970 Vehari Road Branch 618/B. Sambrial.

Ghalla Mandi Phone : (063) 2256401-4 Fax : 2256458 101 189 . Phone : (0966) 720609.95. 3614976 DERA ISMAIL KHAN Plot # 3666-B. G. North Circular Road. Phone : (065) 2665301-4 Fax : 2665484 SHEIKHUPURA Main Lahore-Sargodha Road. Sahiwal Road. Phone : (0946) 726745-6. Station Road Phone : (0723) 680112-14 Fax : 680118 Annual Report 2009 HAROONABAD 15-C/16-C. 726740-4 Fax : 726747 JHELUM Bunglow No.T. Phone : (056) 3614977-9 Fax : 3787974. Qaboola Road Phone : (0457) 835711-12-13 Fax : 835717 PAKPATTAN 159 . Allama Iqbal Road. Saidu Sharif Road. Supply Bazar. 7518780 Fax : 7518070 AHMEDPUR EAST BRANCH Kutchery Road. Daharki Phone : (0723) 642868 643549.BRANCHES NETWORK ARIFWALA 47/D. Yousuf Shah Road. Mandi Bahauddin Phone : (0546) 520921-23 Fax : 507886 LALA MUSA G.Main College Road Phone : (0457) 376020-22 Fax : 376024 DERA GHAZI KHAN Jampur Road. Al-Aziz Market. Road. Kohat Cantt. Phone : (0544) 610162. 610182 Fax : 610050 MIAN CHANNU Ghazi Morr. 720610 Fax : 720607 OKARA Plot No. Zain Palace. Phone : (067) 3771901-4 Fax : 3771905 KOHAT Bannur Road. Phone : (0462) 517838-9 Fax : 517841 BUREWALA 95-C. Phone : (0922) 522792-5 Fax : 522798 SADIQABAD 28-29 D.T. Phone : (0992) 344723-6 Fax : 344728 JHANG 9-D. Near MEPCO Office Phone : (062) 2275504-6 Fax : 2275503 DAHARKI Zafar Bazar. Road. Main Mansehra Road. Near Ghala Mandi Phone : (053) 7518368. 641217 Fax : 644040 GHOTKI 1-13.67. Dera Ghazi Khan Phone : (064) 2468201-6 Fax : 2468104 MINGORA. Opposite PTCL Office. 7518370. Makan Bagh. College Road. Jhang Saddar. 14. Phone : (0442) 550418-22 Fax : 550423 ABBOTTABAD 191. Kashmir Chowk. Phone : (068) 5802501-4 Fax : 5802704 MANDI BAHAUDDIN Kutchery Road. Mohallah Jamia Masjid. Kazam Kamal Road. Phone : (047) 7624701-3 Fax : 7624704 TOBA TEK SINGH 105-Farooq Road. 610172. SWAT Khasra No.

2448090. Rawalpindi Raod Phone : (0543) 555206-218 Fax : 555220 BHALWAL 451.T. Gujar Khan Phone : 051 . Bohar Wali Gali. Nia Bazar.C. Azad Jammu & Kashmir Phone : (05827) 436834-7 Fax : 436838 KALLAR SYEDAN Ghousia Shopping Centre. 8-12. Kotla Arab Ali Khan.3517878 MURIDKE G.T. Gujrat Phone : (0537) 586892. Choa Road. Mirpur. District Mansehra Phone: (0997) 321949 Fax: (0997) 321357 Annual Report 2009 CHITRAL D. 303592 Fax : 300597 Oghi Branch Main Bazar. District Kasur Phone : (049) 4421071-3 Fax : 4421075 MANSEHRA Punjab Chowk. Road Phone : (053) 7536241-43 Fax : 7536245 GILGIT Shahrah-e-Quaid-e-Azam. Tehsil Chowk. 414367 Fax : 412988 HAZRO 273-M. Kotli Road. Bhalwal Phone : (048) 6643709. Road. Liaqat Shaheed Road. G. Rail Road Phone : (0492) 765218-9 Fax : 770890 Pattoki Branch Allama Iqbal Road. Akbar Kiani Shopping Mall.BRANCHES NETWORK HASILPUR 17-D. AZAD JAMMU & KASHMIR 114.3515704-707 Fax : 051 . Shahrah-e-Resham Phone : (0997) 303591. Tehsil Kharian. Attalique Bazar Phone : (0943) 414396. Rizwan Plaza. 586435 Fax : 586337 MIRPUR. Office Road. Muridke Phone : (042) 7983173-75 Fax : (042) 7983172 JARANW ALA P -813. Adjecent to Mazar Hazrat Baba Bulley Shah. Fatima Khel Phone : (0928) 614633-36 Fax : 614099 101 190 . Baldia Road. Jaranwala Phone : (041) 4319003-4 Fax : (041) 4319005 BANNU Gowshala Road. Jutial.3515703 GOJRA P -85. Sector F-1. 2448075 Fax : 2441071 KHARIAN 1. Kallar Syedan Phone : (051) 3572016 Fax : 3570227 GUJAR KHAN 58-D & 59-C. Road. Opposite Mountain Inn Hotel. Street No. Main Hattian Road Phone : (057) 2313771-2 Fax : 2313773 KOTLA Bhimber Road. Block III.T. Gojra Phone : 046-3517675-7 Fax : 046. Near Radio Station. Distt. 586915. Main G.6644863 Fax : 6642647 KASUR Shop No. Hasilpur Phone : (062) 2448078. Gilgit Phone : (05811) 51904-07 Fax : 51903 CHAKWAL City Trade Centre. 3.

District Khanewal Phone : (065) 2555701-4. Chak # 89-10/R. Distt. Sargodha Road. Circular Road Phone : (0542) 413300-9 Fax : 413310 101 191 . 6609480 Fax : (055) 6609450 JAUHARABAD Plot # 2. Muzaffargarh (0662) 428920-23 (0662) 428931 KHANPUR Kutchery Road. Haripur Phone : (0995) 627451-2 Fax : (0995) 627831 DINGA Thana Road. Tehsil Jahania.T. Depalpur Phone : (044)-4542223-25 Fax : 4542220 Annual Report 2009 NAROWAL 496/A. Road. 5577627 (068) 5577805 HARIPUR Main Shahrah-e-Hazara. 5577617. Darwaza Chakwala. Mandi Faizabad Phone: (056) 2881032-5. Rajana Road. District Khushab Phone : (0454) 880055-56 Fax : 880057 MANDI FAIZABAD Main Jaranwala Road. G T Road. Gujrat Phone : (053) 7404844-46 Fax : (053) 7404840 WAZIRABAD Sialkot Road. Talagang Phone : (0543) 410791-4 Fax : (0543) 411030 MURREE Sharjah Center. Gujranwala Phone : (055) 6609460. Fax : 237791 BHERA Circular Road. Jauharabad. Model Town. Distt. Railway Road.BRANCHES NETWORK BAHA W ALNAGAR Shop # 6. Dinga. Wazirabad. District Khushab Phone: (0454) 723761-2 Fax: (0454) 723758 Mandi Quaidabad Branch Plot # 156/1. Phone : (051)-3413210-2 Fax : 3413149 DINA Mahfooz Plaza. Chakwal Road. Bahawalnagar (063) 2272005-8 (063) 2277437 MUZAFF ARGARH Mauza Taliri. Fax : 2555710 JINNAH COLONY. Distt. District Jhelum Phone : (0544)-632723-4 Fax : 632557 KHANEWAL Cinema Road. Fax: (056) 2882086 Nankana Sahib Branch 53-Grain Market Phone : (056) 28877580-2 Fax : 2877577 MIANWALI Watta Khel Chowk. Fax : 6692161 TALAGANG Taqi Plaza. Multan Road. 6609470. Pir Mahal Phone : (046)-3366430-31 & 3366381 Fax : 3366382 DEPALPUR Kuthcery Road. Mall Road. G. Mianwali Phone : (0459) 237794-6. JAHANIA Main By Pass Road.3. Behra Phone : (048) 6692162-3. Ghallah Mandi. Khanpur (068)5577502 . District Khanewal Phone (065) 2211901-4 Fax : 2211906 PIR MAHAL Mohallah Kasurabad. Block-D. Block # 2.

24. KDA Scheme No. Road. Turbat Phone : (0852) 411557-58 Fax : 411417 BATTAGRAM Opposite D. District Norwal Phone : 0542-453001-09 Fax : 0542-453010 CHENAB NAGAR . SB-1. 1.Uni-Towers. Karachi Phone : (021) 32446542 . Block 14. District Abbottabad Phone : 0992-812006-8 Fax : 0992-812009 KAMOKE Annual Report 2009 PISHIN Bund Road. Gole Bazar. Phone : (021) 32472295-8 Fax : 32472141 Shahrah-e-Faisal.Q. Durya Lal Street. Chenab Nagar.I. Shahrah-e.5 Fax : (021) 32430492 Gulistan-e-Jauhar Pakistan Tulip Valley Plot No. Zhob Road Phone : (0824) 660852-5 Fax : 660851 BHAKKAR Plot # 458. Swabi Phone : 0938-223811-3 Fax : 0938-223814 CHOA SAIDAN SHAH Rab Nawaz House. Havelian.BRANCHES NETWORK LORALAI 1062-1063. Jhang Road Phone : (0453) 516068-70 Fax : 516071 SKARDU Hussaini Chowk Phone : (05831) 54700-703 Fax : 54704 TURBAT Main Road. Maneri Payan.T. Jodia Bazar. Sector-16 Korangi Industrial Area. Chakwal Road.Resham Phone : (0997) 310375 Fax : 310377 CHISHTIAN 29-B. Shahrah-e-Faisal. Rabwah. Block#13-A.Chundrigar Road. Havelian Bazar. Block # 1. Gulistan-e-Jouhar Phone : (021) 34661355-7 Fax : (021) 34661359 Korangi Industrial Area Shop No. District Chakwal Phone : 0543-580862-64 Fax : 0543-580865 ISLAMIC BANKING BRANCHES Uni-Tower.H. Gulshan-e-Iqbal. District Gujranwala Phone : 055-6815791-2 055-6815796 Fax : 055-6815790 101 192 . Ameer Muawya Chowk. Dagar Gharbi. I. Chishtian. Fortune Center. 112. Hospital. Pishin Phone : 0826-420744-5 Fax : 0826-420748 SWABI Swabi Bazar. Karachi Phone : (021) 34144650. Block A.52 Fax : (021) 34144653 North Nazimabad. Ghallah Mandi. Plot # 27/28. Karachi D-3. Karachi Phone : (021) 35061661-4 Fax : (021) 35067031 Gulshan-e-Iqbal Plot # 40-B. District Bahawalnagar Phone : 063-2509145-6 Fax : 063-2509455 SHAKARGARH Ayub Market. District Chiniot Phone : 047-6214470-1 Fax : 047-6214475 HAVELIAN Tanoli Plaza. Karachi Ground Floor. Railway Road. North Nazimabad Phone : (021) 36633133 & 36633177 Fax : 36633135 G. Choa Saidan Shah. Mardan Swabi Road. Shakargarh. Karachi 213 .RABWAH P-4. Phone : (021) 34315271-4 Fax : 34313581 Jodia Bazar Plot No. Kamoke.

Lahore Opposite Benz Factory.BRANCHES NETWORK DHA Branch. Near Round About # 5. M. SITE II (Super Highway Phase I) Phone : (021) 36881246-7 Fax : 36881249 Orangi Town. Lahore Cantt. Karachi Phone : (021) 36964648-49 Fax : 36964739 Main Branch. Lahore 14-Main Wahdat Road. Phone : (042) 35313401-05 Fax : 35313406 Zarrar Shaheed Road 1500-F.B.P. North Western Industrial Town Phone : (021) 34750439. Dubai Chowk. Karachi Phone : (021) 35313873-80 Fax : 35313872 Dhorajee. Qurtaba Chowk.A. Main Multan Road. Orangi Town. Main Khayabane-e-Ittehad. Phone : (051) 2879580-3 Fax : 2879589 Annual Report 2009 101 193 . Phone : (042) 37902536. Karachi Plot # LS32. Shamim Apartments. Lahore Abid Plaza. REDCO Plaza. Phone : (042) 35781841-55 Fax : 35781875. Zarrar Shaheed Road. Johar Town. Blue Area. Phone : (042) 37211631-5 Fax : 37211640 New Garden Town. Lahore Awami Complex Block # 1. Jinnah Avenue. Sector 11. Lahore 66-Main Boulevard. Gulberg. Fax : 37502820 Chung Branch. Karachi Plot # W-2/1/1. Mughalpura Phone: (042) 36524701-09. 35781856 McLeod Road. Lahore Phone (042) 37502811-15. Karachi 23-C. Lahore Chung Stop. Fax: (042) 36524710 Multan Road. New Garden Town. Defence Housing Authority. Karachi Plot # B-24/A. Berar Cooperative Housing Society Phone : (021) 34860321-2 Fax : 34860320 Port Qasim. Mozang Chungi. Area. Main Road.. Karachi Phone : (021) 36662271-72 Fax : 36662264 North Karachi Shop # 3-11 Sarah View Phase II Sector 11-B. to W-2/1/3. Main Lahore. Sheikhupura Road. Commercial Area. McLeod Road. Karachi Ground Floor. Jehangir Raod. North Karachi. 36362197 Fax : 36362226 SITE II. Main Multan Road. Block 10 Phone : (021) 36362194. Lahore Phone : (042) 36613855-62 Fax : (042) 36673224 Gulshan-e-Ravi Block F. Phase III. Phone : (042) 37499215-19 Fax : 37499220 Kot Abdul Malik. Lahore 69-R-I. Phone : (042) 35746191-5 Fax : 35746190 Johar Town. Islamabad 78-E. Phone : (042) 35846374-85 Fax : 35846386 Y Block. 37902539 Fax : 37902540 Shah Alam. 33 & 43. Lahore Phone : (042) 37490041-5 Fax : 37490046 Wahdat Road. Chowk Shah Alam Phone (042) 37374081-5 Fax : 37374086 Jinnah Avenue. Lahore Kot Abdul Malik. 13. Phase II Extension. Lahore Phone : (042) 37114612-16 Fax : (042) 37114618 Mughalpura Branch Opposite lalpul. Lahore 93-Y. Gulshan-e-Ravi Lahore Phone : (042) 37404811-20 Fax : (042) 37404821 Qurtaba Chowk Rehman Chambers. DHA. Lahore 139-Main Circular Road. Karachi Plot # 35/127 Block 7 & 8 C. 34750444-445 Fax : 34750438 F.

Rawalpindi 400-B. Liaquat Road. G-10 Markaz Phone : (0511)-2819101-05 Fax : 2819100 Cantt. Supply Bazar. Jail Road. Quetta Cantt Phone : (081) 2838932 Fax : 2899012 Hyderabad Branch Propert No. Chak # 204-RB. Sector I-9. Islamabad Plot # 3-J. Faisalabad Square # 14. Hasan Abdal. Jamia Masjid Hamid Ali Shah. Faisalabad 1-Ramana.36. Satyana Road. Canal Raod. Islamabad 20-A. Commerical Market.T. G. Plot # 7. Satellite Town Phone : (051)4452048-9 Fax : 4452050 I-9 Markaz. Shahbaz Town Phase 4. Block-5. Dhudial. District Gujrat Fax : 053-3431745 Jamrud Road. Gujranwala Phone : (055) 4557301-05 Fax : 4557310 2. Phone : (041) 2603021-5 Fax : 2603028 Canal Road Branch. Multan Phone : (061) 750941-5 Fax : 750885 Annual Report 2009 Sialkot Ali Building. 80. Tehsil Gujar Khan Fax : 051-3361269 Jalalpur Jattan Branch Kashmir Nagar. Mansehra Road Phone : (0992) 344753 Fax : 344736 Gujrat Branch Zaib Plaza. Sardar Plaza. Bosan Road. Road. Block B. Markaz Islamabad Phone (051) 4858562-64 Fax : 4858560 Kutchery Bazar Faisalabad P . Jalalpur Jattan. Faisalabad Phone : (041) 8522113-4 Fax : 8522116 Satyana Branch. Rawalpindi 125-D. 24-25. Grain Market Phone : (068) 5885331. Sargodha Phone : (048) 3726804-7 Fax : 3726808 Faisal Arcade G. District Attock Phone : 0572-523335-37 Fax : 0572-523394 Bewal Branch Samote Road. Rawalpindi Phone : (051) 5795184-88 Fax : 5795189 Satellite Town.BRANCHES NETWORK G-10 Markaz. Village Dhera Kanayal Bewal.5 Fax : 3241306 Rahim Yar Khan Shop No. District Attock Phone : (057) 2350123-8 Fax : 2350120 Hasan Abdal Branch Hamdan Building. Phone : (041) 8581602-04 Fax : 8581582 Sargodha Opp. 5885803-5 Fax : (068) 5885668 Dera Islamil Khan East Circular Road. Village & Post Office. Sialkot Phone : (052) 3241302 . Road. Tehsil and District Chakwal Phone : (0543) 590676 Fax : 590673 Pindi Ghaib Branch Banora Chowk. Saddar Bazar. Kutchery Bazar. Khadim Ali Road. Toopanwala Gate Dera Ismail Khan Phone : (0966) 710141-2 Fax : 710139 Quetta Branch Shop # 1&2. Hyderabad Cantt Phone L (022) 2730867-72 Fax : 2730873 Abbottabad Branch 27-A. Circular Road. Rehman Shaheed Road Phone : (053) 3517497-8 Fax : (3517499 Dhudial Branch Dhudial Chowk. Murree Road. Peshawar Phone : (091) 5701385-89 Fax : 5701392 101 194 . Faisalabad Phone : (041) 8559361-64 Fax : 8559635 Medical College Road. Faisalabad 597-B.T. Opp: Punjab Medical College.

Circular Road. Agrabad. G. Bangladesh Phone : 0088 02 8861848. Dhaka 1212. Kamalia District Toba Tek Singh Fax : 046-3413277 Mailsi Branch Colony Road. Motijheel C. (00973) 17224300 101 195 Annual Report 2009 . 8861704 Fax : 8850714 CHITTAGONG Agrabad Branch 57. Near Ghausia Chowk. Mumtazabad Multan Fax : 061-6242002 Vehari Branch Plot No. Chittagong. Block E. Gulshan Avenue. District Vehari Fax : 067-3750031 Mumtazabad Branch Vehari Road. Sangla Hill.Saeed Shopping Centre. Karkhana Bazar. Shar-e-Nau Bahrain Phone : (009375) 2004105-10 Fax : 2002142 HERAT Herat Branch Ground Floor. Mianwali Road. Chahrahi-e-Sadarat. Vehari Fax : 067-3360918 OVERSEAS BRANCH BANGLADESH DHAKA Dhaka Branch 5-Rajuk Avenue. 11. Phone : (00880) 0161-001477 AFGHANISTAN KABUL Kabul Branch 410.O.T. Niazabad. Dhaka City Corporation. Sarai Alamgir.Satmasjid Road. Chamber of Commerce & Industries. Near New Bus Stand. District Nankana Sahib Fax : 0563-701052 Sarai Alamgir Branch Al. Mailsi.A. Khushab Fax : 0454-711736 Sangla Hill Branch Fawara Chowk. Road. Gulshan North. Heart Blood Bank Street Phone : (0093-40) 230705-07 Fax : 230704 KINGDOM OF BAHRAIN MANAMA (OBU) 13-C-Harbour Tower West Bahrain Financial Harbour P.BRANCHES NETWORK Khushab Branch Shaheryar Market. Bangladesh 81/A. Bangladesh Phone : (0088) 171-888727 SYLHET Sylhet Branch Marchant Tower 582 East Mirza Bazar Phone: (00880821) 2830679 Fax: (00880821) 2830677 Dhanmondi Branch. Phone : (008802) 7168821-05 Fax : 9557413 Gulshan Branch 168. District Gujrat Fax : 0544-654586 Kamalia Branch Mohallah Mehtianwala. Union Dhanmondi. Box # 1375 Phone: (00973) 17203100 Fax.

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attested copy of beneficial owner's Computerized National Identity Card. Saima Trade Towers. (Member’s signature on Rs. 5/. or notarized copy of such Power of Attorney must be valid and deposited at the Share Registrar of the Bank. 2010 Witness: ___________________________________ Name:______________________________ CNIC/Passport No:____________________ Address:____________________________ ____________________________________ ____________________________________ 1. F. Karachi. Chundrigar Road. D. speak and vote on his/her behalf. 17th Floor. An instrument of proxy and a Power of Attorney or other authority (if any) under which it is signed.I. Registrar Services (SMC-Pvt) Limited. Account and Participant's ID numbers must be deposited alongwith the form of proxy with the Share Registrar. As witness my/our hand this __________________ day of _____________________________. A member entitled to attend. I. not less than 48 hours before the time of the Meeting. as my/our proxy to vote for me/ us.Revenue Stamp) 2. holding ___________________________ ordinary shares. he/she should bring the usual documents required for such purpose. I/We ____________________________________________________________________________ of _______________________________________________________ being member(s) of BANK ALFALAH LIMITED ("the Bank"). M/s. The proxy must produce his/her original identity card at the time of the Meeting. 1700-A.FORM OF PROXY Folio/CDC Account No. 3. and vote at the Meeting is entitled to appoint another member as a proxy to attend. who is also a member of the Bank. In case of proxy for an individual beneficial owner of CDC. 101 Annual Report 2009 . A corporation being a member may appoint as its proxy any of its official or any other person whether a member of the Bank or otherwise. and on my/our behalf at the 18th Annual General Meeting of the Bank to be held on 14th April 2010 and at any adjournment thereof. In case of proxy for corporate members. hereby appoint __________________________________________________________________________________ of _______________________________________________________________________or failing him/her __________________________________________________________________________________ of __________________________________________________________________.

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