Annual Report for the year ended December 31, 2009

Moving a click ahead

Moving a click ahead
At Askari, we believe there is no substitute to technology. Technology drives creativity, innovation, and the future. With this belief we have embarked upon a major initiative by introducing stateof-the-art technology solutions for all key areas of banking i.e., core banking, client relationship, human resource, risk management, finance and vendor management, to make ourselves ready for the banking of the future, to operate in a hi-tech era and to enhance our capabilities to compete in the local and global marketplace. It isn’t just about a year or two, we are set to turn intersecting ideas and our fledgling technologies into a bank that can continue to innovate in times to come. We are excited about entering into a new era of technological advancements and that is the expression on this year’s cover.

Contents
01 02 04 06 08 10 12 16 18 19 20 21 22 24 28 30 31 32 44 46 47 48 50 52 Financial Highlights Pakistan’s Economic Profile 18 Years of banking What we stand for Vision & Mission Corporate Information Directors’ Profile Notice of 18th Annual General Meeting Management Organogram Risk Management Framework Entity Ratings Corporate Social Responsibility President’s Message Technology Initiative Value Added Statement Askari Bank’s Presence Business and Operations Review Financial Review Financial Calendar Share & Debt Information Horizontal & Vertical Analysis Decade’s Performance Summary Directors’ Report

Financial Statements of Askari Bank Limited
67 69 70 72 73 74 75 76 Statement of Compliance Review Report to the Members Auditors’ Report to the Members Statement of Financial Position Profit and Loss Account Statement of Changes in Equity Cash Flow Statement Notes to the Financial Statements

Consolidated Financial Statements of Askari Bank Limited and its Subsidiaries
131 132 133 134 135 136 191 192 194 202 203 204 207 Auditors’ Report to the Members Consolidated Statement of Financial Position Consolidated Profit and Loss Account Consolidated Statement of Changes in Equity Consolidated Cash Flow Statement Notes to the Consolidated Financial Statements Pattern of Shareholding Correspondent Network Branch Network Statement of Financial Position in US dollars Profit and Loss Account in US dollars Glossary of Financial & Banking Terms Form of Proxy

Annual Report | 2009

Financial Highlights 2009

Profit

After Tax up by

Rs.1.108 billion (2008:Rs.386 million)

187%

Before Tax up by

Rs.1.642 billion (2008:Rs. 461 million)

256% 6%

Deposit
Increased by

Rs.206 billion (2008:Rs.168 billion)

23%

Advances
Increased by

Rs.148 billion (2008:Rs.140 billion)

Total Assets
Increased by

Rs.254 billion (2008:Rs.206 billion)

23%
EPS

Increased by

Rs.14.95 billion (2008:Rs.12.97 billion)

15%

Equity

Increased by

Rs.2.18 (2008:Re.0.76)

187%
Network

Market Value
of shares increased by

Rs.27.30 (2008:Rs.14.57)

87%

Payout
Stock Dividend: (2008: 25%)

20%

Increased to

from 200 of last year

226

page | 1

46 114.130) (4. billion) GDP -at market prices (Pak Rs.7 13.80 206 64 56 At fiscal year end Economic indicators GDP Growth (%) GDP at current factor cost (Pak Rs.450 2.624 7.3 70.6 2.074 12.122 60.40 108.424) 12.874) 11.70 484 4.15 70.0 12. Official transfers (USD million) Foreign currency reserves -year end (USD million) Exchange rate (USD) Exchange rate (Euro) Networth of the banking system (Pak Rs. km) Population (million) Population growth (%) Population density (people/sq.90 131 3.598 59.00 (14.289 3.) Life expectancy (years) Literacy (%) 796.673 7.5 65.640 4.8 1. billion) KSE 100 index points Stock market capitalization (Pak Rs.67 72.999) 13.2 11.811 12.100 166 1.425 81.14 191 3.4 5.778 2008 2.095 21.8 1.02 8.989 2.2 1.1 69.037 2005 6.0 page | 2 . billion) Total assets of the banking system (Pak Rs. billion) At calendar year end Banking system Capital adequacy ratio .6 7.Askari Bank Limited | The Country Pakistan’s Economic Profile Country statistics Land area (sq.207) (1.647 60.623 7.162 2.914) (13.389 58.279) 1.8 9.500 9.403 2004 8.785 13.564) (7.595 7.369 68.403) 15.884 9.00 (20.460 13.123 6.9 12.962 10.1 13.2 69.8 (13.235 8.981 2007 5.% Advances/Deposits ratio -% Return on Assets (after tax) -% * Pakistan’s fiscal year starts on July 1 and ends on June 30.3 (6.9 (12.279 1.7 74.534) 12.251 5.4 6.20 548 5.5 12.47 315 3.80 638 5. 2003-04 2004–05 2005–06 2006–07 2007–08 2008-09 6.6 1.6 (3. billion) Inflation (%) Trade balance (USD million) Current account balance ex.8 1.5 69.159 7. km.160) (9.155 2009 10.284 12.766 2006 7.772 3.18 76.003 5.37 81.

Annual Report | 2009

GDP - Growth
(Percent)
8.4

6.4

6.6

7.0

5.8

2004

2005

2006

2007

2008

2009

Foreign Exchange Reserves
(US$ in billion)

12.6

13.1

15.6

12.4

11.4

2004

2005

2006

2007

2008

2009

Foreign Trade
40.0

(US$ in billion)

20.6

28.6

30.5

19.1

15.6

12.3

14.4

16.5

17.0

2004 Imports

2005 Exports

2006

2007

2008

2009

Sectoral Contribution GDP
(Percent)

14.0

15.5

8.7

6.5

8.3 7.0

8.5

4.8 6.6

5.8

6.3

6.5

4.1

4.7

2.4

1.1

2004

2005

2006

2007

2008

2009 –3.3

Agriculture

Manufacturing

Services

page | 3

3.6

17.8

34.8

12.4

2.0

Askari Bank Limited | History

18 Years of banking

Askari Bank was incorporated in Pakistan on October 9, 1991, as a public limited company. It commenced operations on April 1, 1992, and is principally engaged in the business of banking, as defined in the Banking Companies Ordinance, 1962. The Bank is listed on Karachi, Lahore and Islamabad Stock Exchanges. Askari Bank has expanded into a network of 226 branches / subbranches, including 31 dedicated Islamic banking branches, and a wholesale bank branch in Bahrain. A shared network of 4,173 online ATMs covering all major cities in

Pakistan supports the delivery channels for customer service. As at December 31, 2009, the Bank had equity of Rs. 14.95 billion and total assets of Rs. 254.33 billion, with 984,485 banking customers, serviced by our 6,159 employees. Askari Investment Management Limited and Askari Securities Limited are subsidiaries of Askari Bank engaged in managing mutual funds and shares brokerage, respectively.

page | 4

Annual Report | 2009

page | 5

Askari Bank Limited | Corporate

What we stand for
Our

vision

To be the bank of first choice in the region

Our thinking

Creating opportunities with innovation and technology

Integrity

Fairness Commitment
Investors
A distinctive investment, delivering outstanding performance, return and value

Our
Customers
Passionate about our customers’ success, delighting them with the quality of our service

Regulators
Exemplary compliance, governance and business ethics

Values
Service

Teamwork

Employees
Caring for our people and helping them to grow

Communities
Dedication towards social development and improvement in quality of life

page | 6

individual savers. Askari Bank is proud of its pioneering role in providing the most modern and technologically advanced services to its 984. To gain their trust and confidence. extending and developing our core competencies and moving out of weak and non– core segments. Askari TeleCare. all over Pakistan. At Askari we try to create a ‘we’ culture where there is mutual trust and respect for each other. In order to ensure meritocracy. regular and page | 7 . which are the corner stones of our corporate behavior. We understand that our commitment to satisfy customers’ needs must be fulfilled within a professional and ethical framework. Technology has played a pivotal role in meeting customer expectations. Our customers Knowing our customers and their needs is the key to our business success. We also pioneered an e–commerce venture in Pakistan. Our regulators We firmly believe in regulatory discipline and harmony of our corporate objectives with regulatory framework. the Bank is in the process of replacing the existing technology with a comprehensive state-of-the-art solutions. we believe in providing our investors timely.485 relationships. This initiative will greatly improve our product delivery and service abilities. structure. Our products and services are as diverse as our market segments. our appraisal system is purely performance based. We have fully automated transaction– processing systems for back–office support. The intrinsic values. reliable information on our activities. We encourage ownership behavior so that everyone feels responsible for the performance and reputation of the Bank. anytime in the world. The range of our products aims to serve our diverse customer base that comprises of corporates. We are committed to develop and enhance each employee’s skills and capabilities through extensive in–house and external training programs and job rotations. Our phone banking service. At the same time. and performance. SMEs. Our business methodologies are designed to ensure compliance with the directives of all our regulators. Our values Integrity is the most valued standard in whatever we do. are: • • • • • Commitment Integrity Fairness Teamwork Service Our employees We strongly believe that the interests of the Bank and the employees are inseparable. We subscribe to a culture of high ethical standards. based on the development of right attitudes. farmers. To further strengthen and enhance our technology platform. particularly with respect to speed and quality of service. We are reshaping our portfolio of businesses by investing in higher growth areas. Our investors We believe that the bottom line of any business is creating shareholder value. Our branch network is connected on–line real–time and our customers have access to off–site as well as on–site ATMs. financial situation. Our mobile ATMs are the first in Pakistan. and internet banking facility allows customers to enjoy routine banking service from anywhere. our people are constantly engaged in assessing customer needs and market dynamics to realign our products and our priorities to attain brand recognition and competitive edge. Our communities We fully recognize our corporate social responsibility and our contributions to different areas of the social sector are aimed to help improve the quality of life in our Country.Annual Report | 2009 Our vision to be the bank of first choice in the region demands continuous strive for creation of business opportunities with innovation while maintaining our core values to meet our commitment to all our stakeholders. households and. Our client relationship managers are well equipped and well trained to provide the most efficient and personalized service to the customers.

policies and procedures. enhanced delivery capability. delivering quality service through innovative technology and effective human resource management in a modern and progressive organizational culture of meritocracy. • Mission To be the leading private sector bank in Pakistan with an international presence. To build and sustain a high performance culture. To deliver timely solutions that best meet the customers’ financial needs. strengthening of controls. To effectively manage and mitigate all kinds of risks inherent in the banking business. To provide strategic initiatives and solutions for projects. To develop a customer–service oriented culture with special emphasis on customer care and convenience. To facilitate alignment of the Vision. with a continuous improvement focus. efficient management information system. • • • • Strategic Planning • To comprehensively plan for the future to ensure sustained growth and profitability. To build an enabling environment. and contributing to society.Askari Bank Limited | Corporate Vision & Mission Vision To be the bank of first choice in the region Corporate Objectives • To achieve sustained growth and profitability in all areas of business. maintaining high ethical and professional standards. To optimize use of technology to ensure cost–effective operations. To explore new avenues for growth and profitability. Corporate Objectives with the business goals and objectives. • • • • • • page | 8 . where employees are motivated to contribute to their full potential. products. and high service standards. while providing enhanced value to all our stakeholders. To manage the Bank’s portfolio of businesses to achieve strong and sustainable shareholder returns and to continuously build shareholder value. Mission. To provide strategic solutions to strengthen weak areas and to counter threats to profits.

Annual Report | 2009 • • To identify strategic initiatives and opportunities for profit. or may appear to conflict. the following are the salient features of the Bank’s code of ethics and conduct. Employees must not enter into an agreement. business entertainment or other benefits from a customer or a supplier / vendor. • Employees must commit to the continued development of the service culture in which the Bank consistently seeks to exceed customers’ expectations. • • • • • page | 9 . profit rates and / or marketing policies. which may adversely affect the Bank’s business. In addition to the general guidelines. Fairness. ethical and independent. which appear or may appear to compromise commercial or business relationship. Employees must carry out their responsibilities in a professional manner at all times. • Employees must avoid circumstances in which their personal interest conflicts. the Bank or its customers. • Code of Ethics and Conduct Askari Bank seeks to maintain high standards of service and ethics enabling it to be perceived as impartial. conditions. Employees must never use their position in the Bank to obtain personal advantage or gain. Employees must safeguard confidential information which may come to their possession during the discharge of their responsibilities. Respect for customers’ confidential matters. Employees must ensure that ‘know your customer’ principles are adhered to by obtaining sufficient information about the customers to reasonably satisfy ourselves as to their reputation. Employees must not accept gifts. merits the same care as does the protection of the Bank’s own affairs or other interests. rights and obligations. They must act in a prudent manner and must avoid situations that could reflect unfavorably on themselves. To create and leverage strategic assets and capabilities for competitive advantage. • Presence of a corporate culture that seeks to create an environment where all employees are treated equitably and with respect. with the interest of the Bank or its customers. Truthfulness and Transparency govern our customer relationships in determining the transactional terms. thefts or illegal activities committed within the Bank premises. Employees must remain alert and vigilant with respect to frauds. understanding or arrangement with any competitor with respect to pricing of services. standing and the nature of their business activities.

askaribank. The Mall.pk Website: www. Muhammad Riyazul Haque Mr.com. Box No. M. Gen. Dr. A. F.Askari Bank Limited | Corporate Corporate Information Board of Directors Lt. P. Tel: (92 51) 9063000 Fax: (92 51) 9272455 E-mail: webmaster@askaribank. State Life Building No. 5686658. 3. Shahid Mahmud Mr. Afridi & Angell Shariah Advisor Dr. FCA Company Secretary Mr. Zafar Alam Khan Sumbal Mr. FCA Dr.O. (R) Saeed Ahmed Khan Mr. Karachi. Karachi -75530 P. Pakistan. Gen. Ferguson & Co Chartered Accountants Legal Advisors Rizvi. Bashir Ahmad Khan Chairman Entity Ratings Long Term: AA Short Term: A1 + by PACRA Mr. 5685681 Fax: (92 21) 111 000 322 Audit Committee Dr. Tariq Iqbal Khan. Saleem Anwar. Ali Noormahomed Rattansey. Javed Zia Chairman Registered / Head Office AWT Plaza.pk Lt. Box: 8533. Gen. Muhammad Tahir Mansoori page | 10 . (R) Imtiaz Hussain Maj. Tel: (92 21) 5689021. Ali Noormahomed Rattansey.46000.com. Mehkari President & Chief Executive Registrar and Share Transfer Office THK Associates (Pvt) Limited Ground Floor. Ghazali Marghoob. Ziauddin Ahmad Road.O. Isa. M. FCA Auditors A. 1084 Rawalpindi. FCA Mr. Bashir Ahmad Khan Mr. Tariq Iqbal Khan. FCA Mr. FCA Chief Financial Officer Mr. R.

Annual Report | 2009 page | 11 .

page | 12 .Askari Bank Limited | Corporate Directors’ Profile Lt. he possesses a qualification of MSc (War Studies) from Quaid-e-Azam University. Islamabad. staff and instructional assignments in his illustrious career in the Pakistan Army. He has worked on various command. He has commanded an Infantry Division besides being the Director General Pakistan Rangers (Sindh). Islamabad. Gen. He is a graduate from Punjab University & University of Balochistan. 1971 and had a distinguished career spanning over a period of more than 35 years. and Adjutant General of Pakistan Army before retiring in October 2008.A. Islamabad. Director General Weapons and Equipment. (R) Imtiaz Hussain joined the Board of Directors on January 1. He is currently serving as Adjutant General (AG) of the Pakistan Army. Political Science from the University of Balochistan. He is a graduate of Command & Staff College Quetta and National Defense University. Also. (R) Imtiaz Hussain HI (M) Director Maj. Islamabad. He has also served as the Deputy Chief of the General Staff. Javed Zia joined the Board of Directors on October 22. Javed Zia HI (M) Chairman Lt. Also. he qualified as MSc (War Studies) from Quaid-e-Azam University. He is Executive Director Finance of Army Welfare Trust. He was commissioned in Pakistan Army in April 1972 and had a distinguished career spanning over a period of more than 35 years. 2009. He has also served as Director General Doctrine and Evolution. (R) Saeed Ahmed Khan joined the Board of Directors on June 12. Maj. Gen. He was commissioned in the Pakistan Army in December. He is currently Managing Director of Army Welfare Trust. he qualified as MSc (War Studies) from Quaid-e-Azam University. staff & instructional assignments in his illustrious career including Command of an Infantry Division and Corps. He is a graduate of Command & Staff College Quetta and National Defense University. Gen. He was commissioned in the Pakistan Army in 1971 and had a distinguished career spanning over a period of more than 37 years. He has worked on various command and staff assignments in his illustrious career in the Pakistan Army. 2008. Also. Islamabad and M. He has worked on various command. (R) Saeed Ahmed Khan Director Lt. Gen. 2009. Gen. Gen. Lt.

He has been a director on the boards of HBL. and as Additional Secretary [Banking and Foreign Exchange]. and Shaheen Pay TV (Pvt) Limited. Shahid is an Eisenhower fellow and its honorary life member. Muhammad Riyazul Haque joined the Board of Directors of the Bank on September 1. change acceleration process. electric commerce. actively associated with think tanks and social groups and has travelled abroad extensively. and English [GCU. information technology. Mr. page | 13 . He has led delegations of GOP with international financial institutions. He holds master’s degrees in Development Economics [Williams College. He has attended numerous training sessions and seminars for strategic management. and monitoring and evaluation. Singapore. and of institutions including banks. material management. Shahid Mahmud joined the Board of Directors of the Bank on September 1. and of the ADB with other countries. He is also a member & founder member of various organizations. SHOA (Pvt) Limited. implementation. market research and analysis. Canada & Pakistan. He is on the Board of Directors of Askari Leasing Limited as well. and in districts. Indus Vision. telecommunications.Annual Report | 2009 Mr. He was Team Leader for project development. of development projects. Hong Kong. He joined the Government of Pakistan in 1966. He has worked as a consultant with UNDP. He led the production of policy documents and instruction manuals. Mr. He holds a Master Degree in Defense & Strategic Studies from National Defense University along with more than 25 years of professional experience in the field of IT & communications. He is a post graduate in Economics and holds a vast experience in banking and finance spanning over 37 years both in Pakistan and abroad. Mr. Economic and Social Sciences [University of Manchester]. Haque has attended a large number of conferences and other moots in Pakistan and abroad. distribution and supply chain management. Haque worked as international professional staff for the Asian Development Bank in several countries. UK. marketing. Lahore]. He has been the founder director and shareholder of Paktel. 2008. Mr. media and various other product systems in various countries including USA. Shahid Mahmud Director Mr. He also holds a position of Chief Executive Officer of one of the projects of Army Welfare Trust. as Secretary to the Government of Baluchistan. Mr. as Joint Secretary in the President and the PM secretariat and in EAD. processing. Pak Globalstar (Pvt) Limited. Muhammad Riyazul Haque Director Mr. USA]. Zafar Alam Khan Sumbal Director Mr. Zafar Alam Khan Sumbal is one of the founder directors of the Bank. He has also worked as Company Secretary of the Bank till April 2005 before elevated to his current position of Director Corporate by the Board of Directors of the Bank. He is presently working as Chairman & Chief Executive Officer of Interactive Communication (Pvt) Limited and Interactive Convergence (Pvt) Limited. has been a member of professional societies. He has worked in all the provinces of Pakistan. and of Pak-Kuwait and Saudi -Pak Investment companies. 2008.

taxation etc. Ali Noormahomed Rattansey joined the Board of Directors on September 1. He has also served as member Tax Policy and Co-ordination in Federal Board of Revenue before joining the Securities & Exchange Commission of Pakistan as a commissioner and officiated as acting chairman in 2000. Tariq Iqbal Khan Director Mr. His current responsibilities include strategic and financial planning. Ali Noormahomed Rattansey Director Dr. He is also a director of New Jubilee Insurance Company Limited and New Jubilee Life Insurance Company Limited. a subsidiary of Askari Bank.Askari Bank Limited | Corporate Directors’ Profile Mr. and chairman of Aga Khan Rural Support Programme. Chartered Accountants. Ferguson & Co. Finance & Management. page | 14 . Tariq Iqbal Khan is on the Board of the Bank since October 2001. 2008. Bashir Ahmad Khan joined the Board of Directors on March 28. He is a fellow member of the Institute of Chartered Accountants in England & Wales and has been associated with A. budgeting. He taught at the Suleman Dawood School of Business at Lahore University of Management Sciences (LUMS) for 18 years. 2008. He is Chairman/Managing Director of National Investment Trust (NIT). Dr. He has also been on the Policy Board of the Securities & Exchange Commission of Pakistan and a member of the board of Askari Investment Management Limited. He has played a key role in the launch of both customer-specific and open enrolment executive education programs for various institutions & companies. He has been a financial and management consultant for various commercial and non-commercial organizations. He is also working as member on the board of directors of various companies in Pakistan. where he was also associate dean of executive education. company law. with significant exposure to Pakistan corporate sector including subsidiaries of multinational companies operating in Pakistan. F. accounting. human resource management. Pakistan for 31 years (including 23 years as a partner). workshops & seminars related to Audit. He is a founder director of Islamabad Stock Exchange and has also been its president during 1995-1998. Mr. and workshops in Pakistan and abroad. Bashir Ahmad Khan Director Mr. He has 38 years of working experience. He has extensive experience in audit. capital markets. tax and financial and corporate consultancy. He has participated in numerous trainings. He has more than 20 years of academic and professional experience and is presently working as professor of finance and head of department of business studies at Forman Christian (FC) College. and business development. He is a fellow member of the Institute of Chartered Accountants of Pakistan with over 40 years of experience in the corporate sector in the areas of finance & accounts. He has also attended large number of conferences. seminars.

M.Annual Report | 2009 Mr. Mr. UAE. Mr. a subsidiary of Askari Bank. till 1992. joined the erstwhile BCCI and served at National Bank of Oman. M. He started his professional career with A. a subsidiary of BCCI. He joined State Bank of Pakistan on secondment and performed as Director. Mr. Mr. seminars and courses on banking. he started his career with UBL and in December 1974. He has participated in various training workshops. He holds diversified experience spanning over 25 years in the field of finance & corporate affairs in banking and service industry. He moved to commercial banking in 2002 and worked in various capacities with banks in Pakistan and abroad. the largest investment bank in Pakistan. Ghazali Marghoob. A. He started his professional career with Marriot Hotel and later on worked in Saudi Pak Industrial & Agricultural Investment Company and SME Bank as chief financial officer and company secretary for over 16 years. Saleem Anwar Chief Financial Officer Mr. accounting and finance and management. Institute of Public Finance Accountants and a diploma holder from the Institute of Bankers of Pakistan. planning. He is one of the pioneer members of Askari Bank. He was also a member of Corporate Management Team and Monetary & Exchange Rate Policy Committee at State Bank of Pakistan. money market and other banking areas of operations in Pakistan and abroad. F. where he took several major initiatives like liberalizing Foreign Exchange Regime etc. tax and corporate affairs. Anwar joined the Bank in June 2008 and is working as Chief Financial Officer. Muhammad Rafiquddin Mehkari President & Chief Executive Mr. R. Dubai. Mehkari with 39 years of international and domestic banking experience and currently serving Askari Bank in the position of the President and Chief Executive. page | 15 . Ghazali Marghoob Company Secretary Mr. Anwar also represents the interest of the Bank as a director on the board of Bank’s majority owned subsidiary. A. Institute of Corporate Secretaries of Pakistan. He has attended various courses and seminars in Pakistan and abroad. in international and domestic banks. finance. both in Pakistan and abroad. Ferguson & Co. Mehkari is also a member on the board of Khushali Bank and Askari Investment Management Limited. In 1971. Askari Securities Limited. Chartered Accountants (affiliates of PriceWaterHouse Coopers International) and later on. He participated in various courses and seminars on foreign exchange exposure & treasury management. His last major assignment was with Mashreq Bank (Badr Al Islami). fund management and investment banking. M. Exchange Policy Department from April 2000 to April 2004. He is a Fellow member of the Institute of Chartered Accountants of Pakistan and brings with him diversified work experience spanning over 24 years in the field of accounting. Company Secretary of Askari Bank is a chartered accountant and holds membership of the Institute of Chartered Accountants of Pakistan. joined the erstwhile Al Faysal Investment Bank. treasury. as head of special projects. He carries extensive experience in all banking dimensions including operations.

For CDC Account Holders 1. General 1 The Share Transfer books of the Bank will remain closed from March 24 to March 30. Karachi-75530. Transfers received at M/s THK Associates (Pvt) Ltd. B. 3. In case of Government of Pakistan / State Bank of Pakistan / corporate entity.O. Resolved that 2 ii. its common seal should be affixed on the instrument. iv. 5 v. March 30. for which purpose the fractions shall be consolidated into whole shares and sold through stock market. If the member is a corporate entity (other than Government of Pakistan and State Bank of Pakistan). The shareholders of Askari Leasing Limited who will become the shareholders of Askari Bank Limited after merging of Askari Leasing Limited with and into Askari Bank Limited in terms of Scheme of Amalgamation already approved by State bank of Pakistan would also be entitled for bonus shares mentioned at (i) above. the Registrar and Share Transfer Office of the Bank at the close of the business on March 23. To consider and if deemed fit. 1084. The bonus shares shall rank pari passu in all respects with the existing shares. Auditors’ certificate in respect of adequacy of reserves has also been obtained. 1st Floor. under which it is signed or a notarially certified copy thereof. 3 4 iii. 2009.Box No. allotment and distribution of Bonus Shares. Notes A.071. 4. all such instruments of proxy shall be rendered invalid. 1. 5. If a member appoints more than one proxy. Ground Floor. 2010 and to fix their remuneration. deeds and things that may be necessary or required for the issue. The instrument appointing a proxy should be signed by the member or his / her attorney duly authorized in writing. The instrument appointing a proxy. 2. Dr. 1996. Rawalpindi to transact the following business: Ordinary Business: 1. 3.123. The proxy shall produce his / her original CNIC or original passport at the time of meeting.240 thousand out of the general reserve as at December 31. 10 each allotted as fully paid bonus shares to the members whose names appear in the register of members as at the close of business on March 23. To consider any other business as may be placed before the meeting with the permission of the Chair. The sale proceeds of fraction share entitled to members shall be donated to any recognized charitable institution. No person shall act as a proxy.Askari Bank Limited | Corporate Notice of 18th Annual General Meeting Notice is hereby given that the 18th Annual General Meeting of the shareholders of Askari Bank Limited [the Bank] will be held on Tuesday. Attested copies of the CNIC or passport of the beneficial owners and the proxy shall be furnished with the proxy form. Special Business: 4. AWT Plaza. Directors be and are hereby authorized and empowered to give effect to this resolution and to do or cause to be done all acts. should be deposited. who is not a member of the Bank except that Government of Pakistan / State Bank of Pakistan / corporate entity may appoint a person who is not a member. Rawalpindi March 8.071. P. a sum of Rs. Askari Bank Limited. To receive. the board of directors’ resolution / power of attorney with specimen signature shall be submitted along with proxy form to the Bank. consider and adopt the financial statements for the year ended December 31. A. 4 of the notice – Issue of bonus shares The Directors are of the view that the reserves / profits are adequate for the capitalization of a sum of Rs. Item No. 2009 together with the Directors’ and Auditors’ Reports thereon. 1984 This statement sets out the material facts pertaining to the special business to be transacted at the 18th Annual General Meeting of the Bank scheduled for March 30. addresses and CNIC numbers shall be mentioned on the form. together with power of attorney. not less than 48 hours before the time of holding the meeting.990 ordinary shares of Rs. 1. 2010. To confirm the minutes of the 5th Extra-Ordinary Annual General Meeting held on December 21. Ziauddin Ahmad Road. State Life Building # 3. Rawalpindi. pass the following Resolutions with or without modification(s): i. 2010 in the proportion of 20 shares for every hundred shares held that is 20%. 2010 (both days inclusive). 2009 (including reserves subsequent to the merger of Askari Leasing Limited) be capitalized and be applied to the issue of 107. The proxy form shall be witnessed by two persons whose names. if any. and more than one instrument of proxy are deposited by a member. By order of the Board 2. with the Company Secretary. Ghazali Marghoob Company Secretary page | 16 . 2010 M. The Mall. To appoint the auditors of the Bank for the year ending December 31. 2010 at 10:00 am at Blue Lagoon Complex Opposite outward gate of Pearl Continental Hotel. A member entitled to attend and vote at the meeting is entitled to appoint a proxy to attend and vote for him/ her.240 thousand for issue of the proposed 20% bonus shares and in this regard compliance has been made under Rule 6 of Companies (Issue of Capital) Rules. 2010 will be treated in time for purpose of the entitlement of bonus shares (B-14) to the transferees. Statement Under Section 160(1) (b) of the Companies Ordinance.

Annual Report | 2009 page | 17 .

(R) Muhammad Ifzal Country Head. Faisalabad Iftikhar Baloch Chief Information Security Officer Adnan Asghar Area Manager. Hyderabad Mohammad Munir Ahmed Country Head. Suhail Rizvi Javed Iqbal Rehan Mir Global Treasurer Group Head. Ahmed Ghazali Marghoob Company Secretary Area Manager.I Area Manager. Human Resource Syed Tauqir Haider Rizvi Area Manager. Gujranwala Chief Information Officer M. Peshawar Mirajuddin Aziz Area Manager. Corporate & Investment Banking Brig. Rawalpindi – I Niaz Mohammad Qazi A. Electronic Technology Inamullah Khan Niazi Area Manager. R. Consumer Banking Services Tanveer Afzal Khan Area Manager. Risk Management Sajjad Ali Sheikh Area Manager.Askari Bank Limited | Corporate Management Head Office M. Bahrain Khurram Dar Wholesale Bank Branch. Karachi – III M. Rawalpindi – II Hafeez Ur Rahman Quraishy Israr Ahmed Executive Incharge. Branch North Region Haseeb Saulat Regional General Manager South Region Muhammad Jaffer Khanani Regional General Manager Country Head. Azad Kashmir Lubna Azam Chief Credit Officer Mohammad Tayyab Khan Area Manager.M. Establishment Ejaz Musarrat Siddiqui Area Manager. International Banking Tahir Yaqoob Bhatti Regional General Manager Agha Ali Imam Group Head. Operations Hassan Aziz Rana Head Legal Affairs Mushtaq Ahmed Tariq Waheed Area Manager. Lahore – II Group Head. Multan Ejaz Ahmed Khan Tahir Aziz Group Head. Marketing & Strategic Planning Zehra Khalikdina Masood Qadir Acting Country Head. Quetta Area Manager. Karachi – II Zahid Mahmood Chaudhry Country Head. President Support Office Wholesale Bank Branch. Mehkari President & Chief Executive Central Region Adil Zaidi Country Head. Compliance & Data Khawaja Shaukat Iqbal Hashim Khan Hoti Country Head.B. Bahrain Farrukh Iqbal Khan Country Head. Farooq Abid Tung Saleem Anwar Chief Financial Officer Country Head. Agriculture & Rural Business Tariq Mahmud Khan Area Manager. Credit Administration Saulat Hameed Area Manager. Sahiwal Khalid Mohammad Khan Country Head. Commercial Banking Country Head. Special Asset Management Regions/Areas/ W. Islamabad Area Manager. Karachi – IV Mian Shaukat Ali Arif Sirhindi Country Head. Audit & Inspection page | 18 . Karachi . Islamic Banking Services Saif-ur-Rehman Khan Area Manager. Lahore – I S. Khalid Farrukh Bari Area Manager.

& Rural Business Group Head Corporate & Investment Banking Corporate Head North (1 branch) Country Head Risk Management Strategic Planning & Economic Research Country Head International Banking Training & Development Country Head Electronic Technology Country Head Credit Administration Wholesale Bank Branch – Bahrain Islamic Banking Branches (31 branches) Secured Assets Products Country Head Special Asset Management Executive Incharge President Support Office Country Head Compliance & Data Marketing & Media 3 Regional Foreign Trade Units 3 Regional Operations Units Unsecured Assets Products Corporate Head Central (1 branch) Service Quality Head Legal Affairs Corporate Head South (1 branch) Complaint Management Chief Information Security Officer Investment Banking Country Head Audit & Inspection Country Head Establishment Capital Market Operations Board Members Direct Reports to the President Business Functions Support Functions page | 19 .Annual Report | 2009 Organogram Board of Directors Audit Audit Committee Committee Executive Committee President & Audit Committee Chief Executive Company Secretary Chief Credit Officer Group Head Marketing & Strategic Planning Chief Financial Officer Country Head Human Resource Chief Information Officer Group Head Operations Global Treasurer Country Head Islamic Banking Services Country Head Consumer Banking Services Group Head Commercial Banking Regional General Manager North (63 branches) Regional General Manager Central (63 branches) Regional General Manager South (65 branches) Country Head Agri.

Askari Bank Limited | Corporate Risk Management Framework Strategy. Oversight and Business Management Board Business Support. Monitoring and Compliance Credit Approval Process Independent Assurance Internal Audit Board Committees Credit Risk Review & Monitoring Operational / Market Risk Review & Monitoring Credit Admin and Credit MIS External Audit / Inspection President & Chief Executive Management Committees Man Com Risk Mgmt ALCO Credit New Product Reviews page | 20 .

Annual Report | 2009 Entity Ratings Long term AA Short term A1+ Definitions by Pakistan Credit Rating Agency Limited (PACRA) : AA Very high credit quality. ‘AA’ ratings denote a very low expectation of credit risk. A1+ Obligations supported by the highest capacity for timely repayment. They indicate very strong capacity for timely payment of financial commitments. This capacity is not significantly vulnerable to foreseeable events. page | 21 .

We also regularly contribute to non-government organizations which work on social development and well being of the general public. In order to enrich the lives of the public Askari Bank attempts to add a bit of color by sponsoring musical events. lifestyle exhibitions. supporting education. we attempt to promote public interest by encouraging community growth and development through sponsoring social service events. Askari Bank always endeavors to contribute to the society in which it operates. At Askari Bank. M. As a socially conscious organization. as well as our communities. which include our customers. Askari Bank has contributed to various CSR initiatives which include educational. R. environment and also contribute in socio-cultural activities. partners. In order to fulfill our CSR objectives. Some of the key events were: page | 22 . Mehkari. conferences/ conventions. employees. and doing it in an inspiring way – providing products and services that help customers meet their financial goals. We have always tried to lend a helping hand to those who are less fortunate and in need of assistance. We believe that we make our greatest contribution to the society by being good at what we do. spring galas as well as other beautification projects for a greener and cleaner Pakistan. President Askari Bank speakes to media at the occasion of CILT Pakistan’s International Seminar Askari Bank sponsored ASF Annual Exhibition / Meena Bazar Corporate Social Responsibility “The only way to achieve true success is to express yourself completely in service to society” (Aristotle) responsible corporate citizen we believe in giving back to the society by taking initiatives with the intent to positively affect our stake holders. Corporate Social Responsibility is an integral part of the way we do business. Sponsorships Askari Bank has sponsored various events and activities during 2009. As a sports. During the year. Askari Bank believes in the cause of a better environment and continually sponsors tree plantations. flower festivals. and is a vital element of our strategy. Askari Bank actively makes donations to various charities that work for the welfare of the society. In order to ease the plight of the Internally Displaced Persons (IDPs) each employee of Askari Bank donated one day’s salary supported by media campaign to raise public awareness on this issue. sponsors. sporting events like golf and squash as well as sponsoring international sports events like the Fina World Swimming Championship. film and art festivals as well as trade & industrial expos.Askari Bank Limited | Corporate Mr.

Sponsorship of Conference on Scopes of Retail Banking & Finance Expo Pakistan 2009 • Sponsorship of Food. SEVP presenting a souvenir to Chief Guest of COAS Open Golf Championship Players in action at the 7th COAS Squash Tournament sponsored by Askari Bank Sports • • Sponsorship of 13th. Fina World Swimming Championships Sponsorship of 2010 World Championship Qualification Tournament. Karachi Sponsorship at Dawn Life Style Exhibition 2009 Sponsorship of Civil Aviation Authority special publication issue. All Pakistan Multan Open Golf Championship Sponsorship of All Pakistan Memon Exhibition. School. Islamabad Sponsorship of Park at Commercial Area. Lahore Cantt Sponsorship of Spring Gala organized by M/s ECI (Pvt) Ltd page | 23 . Chakwal Sponsorship of F-10 Roundabout.Annual Report | 2009 Askari Bank’s stall at the Dawn Life Style Exhibition 2009 A group photo of participants of the 13th Fina Swimming Championship sponsored by Askari Bank Executives of Askari Bank laying a floral wreath as tribute to the Martyrs of Pakistan Army Mr. held in 2009 • • Sponsorship of 29th Punjab Open Golf Tournament Sponsorship of 7th Chief of the Army Staff (COAS) Squash Championship 2009 • • • • • • • Sponsorship of All Pakistan Garrison Open Golf Tournament Sponsorship of COAS 7th International Squash Championship Sponsorship of COAS Open Golf Championship 2009 Sponsorship of ITF Pakistan Junior U-18 Tennis Championship 2009 Sponsorship of Pakistan Veteran Tournament Rawalpindi Sponsorship of Allama Iqbal Open Golf Tournament 2009 Sponsorship of Gujranwala Golf Championship 2009 Education • • • Sponsorship of Annual Function of the Old Hailians Association Sponsorship of branding for Islamic Educational Convention Sponsorship of Exhibition on International Conference on Medical Education • • • • Sponsorship of Lahore Grammar School’s Annual Play 2009 Sponsorship of Old Ravians Union event through publication Sponsorship of TNS Film Festival organized by BPS. Agri & Livestock Asia 2009 for E-commerce Gateway Pakistan. Agha Ali Imam. Lahore Sponsorship of Zenith Leadership & Development Program. • • Sponsorship of Islamic International Medical College (IIMCT) Sponsorship of print/media campaign for IDPs Environment • • • • • Sponsorship of a Campaign under the title of “Telephone a Tree” Sponsorship of Children Park at Istaqlal Camp. DHA. Karachi Social • • • • • • • Sponsorship for CILT Pakistan’s International Seminar Sponsorship of ASF Annual Exhibition / Meena Bazaar Sponsorship of 19th.

risk of lower than expected aid receipts and. to Rs. funding under the IMF Program has been a key for the recent improvement in Pakistan’s foreign exchange reserves. Improvement in agriculture and the industrial sectors backed by reduction in inflation. while the gross advances increased by 6 percent. The total assets of the Bank amounted to Rs. tax growth. compared to 20 percent at the close of the previous year. Also. While the liquidity position greatly improved compared to last year. the Bank’s exposure in textiles. The Bank continued with the cautious and selective approach while taking credit exposures and remained focused on risk management and portfolio diversification. Askari Bank achieved planned growth in business and operations during 2009. 2008. The major increase in asset book was recorded in aggregate investment portfolio that grew by 88 percent during 2009. easing monetary stance. 2008. For this purpose a deposit mobilization plan page | 24 . Going forward. which sector has largely remained under pressure owing to various internal and external developments. which were achieved to a greater extent. the major impetus for economic growth is expected to come from the services sector. given the current circumstances arising from the campaign against militants. was reduced to 18 percent of the total portfolio. highlights the fragility of the improvement and pose continuing risk to the economic recovery. which began in the closing months of fiscal 2009. Customer deposits reached Rs. The deposit type and currency mix remained almost consistent with last year except savings deposits that reached 54 percent of the total deposits compared to 48 percent at the close of 2009. The efforts for effective loan portfolio diversification which started last year yielded further positives and during 2009. sound macroeconomic policies and focused attention towards the betterment of infrastructure and social sector indicators to ensure that the economy maintains its long term growth trajectory. a rise in the fiscal deficit. the risk averseness of financial system restricted credit growth to a large extent and instead preferred short term liquidity management avenues. Deposit mobilization by banks improved and showed signs of recovery towards the end of 2009 and it is anticipated that the position will improve further during 2010. the Bank’s efforts remained focused on improving the core deposits. the prospects of returning to macroeconomic stability improved in the initial months of fiscal 2010 with most key indicators continuing with the positive trends. registering an increase of 23 percent over December 31. contained government borrowings. are all likely to support economic stability during the current year. contraction in external imbalances and. Alhamdulillah. 2009.148 billion from Rs. The current account deficit is likely to improve further. an increase of 23 percent over December 31.206 billion by December 31. In this environment. the situation remains challenging and demands continuation of fiscal discipline. However.254 billion as at December 31.Askari Bank Limited | Corporate President’s Message In line with the expectations of a modest recovery in economic growth. 2009. 2009 witnessed gradual easing of the monetary policy stance that was aimed to counter inflationary and demand pressures. a drop in overall volume of trade. the Bank preferred financing against collaterals which improved our capital adequacy in compliance with Basel II requirements.140 billion at end 2008. Though. in particular. During the year.

The valuations of our investment portfolio. To expedite recovery of nonperforming and classified loans.222 132 143 168 4. which was reinstated last year. Also. These and other timely steps by the SBP.476 3.557 119 3. supported by moderation of demand pressures improved the market liquidity management.386 million. The group is well positioned to service large corporates and multinational companies through a range of multifaceted offerings which include syndicated finance.108 70 86 101 99 129 2004 2005 2006 Deposits 2007 2008 Operating Profit Profit before tax Profit After Tax Advances . advisory services.Annual Report | 2009 Profits (Rs. to the retail customer segment along with Askari credit card. During 2009. in billion) Corporate and Investment Banking Group successfully raised Rs. Also. As part of this process. a dedicated Special Asset Management (SAM) division has been set-up and is aggressively monitoring and followingup problem accounts. 2009 compared to Rs. the consumer banking focused on consolidation of business and operations and repositioned itself under the changing business environment for this segment. an increase of 52 percent. Our consumer banking offers products and services. however registered marked improvement when compared with last year’s Rs. which primarily comprise of SLR (statutory liquidity requirement) eligible securities and other equity and debt securities. by the State Bank of Pakistan (SBP) in 2009 with the addition of certain types of collaterals and allowing the benefit of up to 40 percent of FSVs for computation of loan loss provisioning against NPLs. mostly asset based. and increased market penetration.net was launched for Bank employees that yielded excellent results and contributed to overall improvement in core deposits. and discretionary investor relations besides trading in equity and debt markets. an increase of 187 percent.250 4. Aggregate provisions as of December 31. The agriculture and rural banking services offered by the Bank gained momentum during 2009 on the back of innovative offerings. thus providing coverage of 71 percent against nonperforming loans as of December 31. The scope of the benefit of forced sale value (FSV) of collaterals.73 billion as of December 31. in million) Advances and Deposits (Rs. thus reflecting effective asset liability management during 2009.17. Askari Islamic banking further expanded its outreach during 2009 by adding eleven new branches to 6. our agri & rural business division (ARBD) won the first position in diversification of credit Products from MINFAL.843 1.022 3.923 2. Profit after taxation at Rs. improved with the adjustment of 250 basis points announced by the SBP in the policy rate at three intervals during 2009. which were previously offered under a distributed model. the deposit products launched towards the end of 2008 gained further strength and were also a reason for increase in core deposits during 2009. Government of Pakistan. was further expanded.0 billion as Tier II capital i. using the MasterCard brand.859 2. our treasury management remained prudent and operated competitively during 2009. This relaxation was fully accounted for while computing loan loss provisions during 2009. The Bank’s NPLs stood at Rs. Under these circumstances.12.e.11 billion. Askari Zarai Credit Card launched in the previous year as the first ever credit card for agriculture purposes gained further strength and attracted more interest from this segment.461 2. The earnings of the Bank remained under pressure during 2009. During the year. and also received certificate of appreciation from SBP regarding Development of SBP Crop Loan Insurance Framework.59 billion. 2009 increased to Rs. mainly due to increased non-performing loans (NPLs) and related provisions. sub-ordinated debt in the form of Bank’s third issue of Term Finance Certificate (TFCs). groupbased lending methodology has been adopted to facilitate small farmers availing agriculture credit.534 4. Our corporate and investment banking group gained further strength and increased its share in business volumes of the Bank. During the year. subdued economic conditions and carry-over of losses from stock market. subject to certain conditions. product automation was assigned priority and a few products. 2009.681 83 461 386 2004 2005 2006 2007 2008 2009 1. despite absorbing the adverse impact on net markup income due to increased nonperforming advances.69 billion at the end of previous year. During 2009. SAM will continue to actively pursue recovery from defaulting customers. The banking spread registered slight improvement over last year. Our consumer banking plans to further diversify and expand the scope of its services through optimization of technology and targeting untapped opportunities of the retail banking market which still offers potential for growth.158 2. capacity and awareness building. the 135 2009 206 page | 25 .642 1.11. were centralized with the aim of improving customer service and operational controls along with process efficiencies. the Bank’s efforts resulted in substantial improvement in the recovery position.300 2.3.347 2.1.

British Standards Institutions (BSI) awarded Askari Bank ISO/ IEC 27001:2005 Certification.Askari Bank Limited | Corporate President’s Message (cont. The certification audits of the bank were conducted during 2009 under the approved scope of this assignment and after completion of procedural changes in the relevant business processes. Despite the strain on earnings attributable to network expansion. which will be under close watch for further support. During the year under review.3 140 Expo 148 rts: C AGR 8.1% 2004 2005 2006 2007 2008 2009 Total Assets (Rs.9% rts: C AGR % 13. in billion) 206 168 132 143 119 83 2004 2005 2006 2007 2008 2009 70 86 99 101 CA 8. relevant details have been separately documented in this annual report. and (d) improve quality and timing of financial and non-financial information. These softwares will be fully integrated with OFSS and collectively strengthen our product and service delivery capacity while improving the overall operational and internal control standards. the Bank remained focused on improving risk management which we consider to be one of the essentials for sustainable success in today’s banking business. Keeping in view the size and significance of this project.) Deposits (Rs. Askari Islamic’s comprehensive range of Sharia’a compliant banking offerings are now available at thirty one branches. Askari Islamic banking successfully achieved a milestone by initiating and successfully converting a conventional banking branch into an Islamic banking branch. Briefly. titled under ‘technology initiative’. market and liquidity risk performed by a well resourced risk management function. Reveleus as risk management software and Siebel as customer relationship management software. PeopleSoft as human resource management software. We are fully aware of the huge challenges involved in this project and have assigned the highest priority to this program backed by the deployment of the required means and resources for a timely and successful implementation. The risk management function was further strengthened in line with the risk management guidelines issued by the SBP. (c) strengthen the internal control environment. Askari Islamic’s contributions to operating profits increased during 2009. our dedicated teams involved in the implementation along with our implementation partners achieved planned progress and milestones. The Bank has already commenced the most ambitious and challenging project in its history. During the year.5% Financial Services Software (OFSS) (previously flexcube) as the core banking software with the key objectives to (a) improve business management. Such conversion will be further extended to other towns and localities where the demand for Islamic products and services has gained strength and has outgrown the demand for conventional banking products and services. in billion) Advances (Rs. a risk management strategy has been developed for identifying. In addition to OFSS. controlling and monitoring risks. Our organizational development program which mainly comprised of various page | 26 135 . application of analytical tools and techniques along with traditional methods to quantify value at risk and monitor potential risks. assessing. independent risk assessments covering all types of risks including credit.9% GR 1 129 CAGR 14. thus making Askari Bank the first Bank in Pakistan to be awarded this prestigious certification. the Bank achieved ISO 27001 certification. Askari Bank recognizes its employees as the prime asset and the key contributors to the performance of the Bank and places great emphasis on the attraction.2 % 254 119 182 166 98 92 145 75 70 97 107 83 100 Impo 119 2004 2005 2006 2007 2008 2009 25 31 37 44 56 2004 Imports 2005 Exports 2006 2007 2008 2009 Guarantees the network of our independent Islamic branches. the Bank is also implementing Oracle Financial as MIS and Supply Chain Management software. in billion) Guar ante es: C AGR 18. During the year under review. development. the Bank has acquired Oracle 59 105 CAGR 206 18. in billion) Foreign Trade and Guarantees (Rs. During the year under review. motivation and retention of its employees. (b) upgrade customer service. of upgrading the entire technology platform. Our risk management processes comprise of detailed risk reviews.

Askari Leasing Limited (ALL) is set to amalgamate with and into Askari Bank Limited with effect from March 3. 2010. Also. The strategic branch expansion will continue. certain areas have been identified as key strategic priorities for 2010 and have been cascaded down the line. I would like to thank all stakeholders for the trust and confidence they continue to place in Askari Bank. which is a wholly owned subsidiary of the Bank. the Bank remained focused on consolidation than expansion and restricted additional branches to twenty six compared to fifty branches opened last year. compensation and benefits will be based entirely on employee performance. Army Welfare Trust is the Sponsor shareholder of both companies and the amalgamation will synergize business and operations at the group level and will bring economies of scale. During the year. In the first phase. Although the stock exchange index improved by almost 64 percent during the year under review. On the one hand this will ensure effective placement of staff. I am confident that Askari’s management team will continue to work with dedication and hard work to accomplish our collective vision – to become the bank of first choice in the Region. Customers of ALL will enjoy a comprehensive range of commercial banking products from the network of over 226 branches of the Bank while the customers of the Bank will be benefited by the addition of leasing to our product offerings. was completed during 2009. I thank them for the wise guidance and counsel extended to me in managing the affairs of the Bank. although work in certain areas will continue as improvement in employee satisfaction and motivation is an ongoing process. our emphasis will be on consolidation of expansion achieved by the Bank in recent years. all human resource policies were reviewed and revised to attain alignment of compensation and benefits with the market. human capital enrichment through extensive in-house and external training is indispensable. They have taken keen interest in the affairs of the Bank and in formulation of policies and had been an immense source of support and guidance to me during the year. however the process will be gradual and selective. I thank them for the confidence they continue to place in us. The Country’s economy is showing important gains for overall macroeconomic stability but maintaining these gains and ensuring continuity of the nascent economic recovery remains challenging for the economic managers during 2010. 2010 page | 27 . Mehkari President & Chief Executive February 23. Given the situation and challenges faced by the Bank. To keep abreast with technological development and other advancement. was subdued mainly due to adverse market conditions for mutual funds and asset management companies.Annual Report | 2009 human resource initiatives. various training programs were conducted for Bank employees through in-house training academies in Rawalpindi. including 31 Islamic banking branches and an wholesale bank branch in Bahrain. It is anticipated that the stability in stock exchange index will lead to gradual turnaround for mutual funds industry. After announcing the first layer of revised organization structure which included restructuring of certain divisions/units for better business and operational efficiency. During the year. as under the current economic and business conditions. The performance of Askari Investment Management Limited (AIML). employees’ professional development remains one of the key elements of our human resource strategy. mutual funds continued to face huge withdrawals and consequently asset management companies came under severe stress. I thank the State Bank of Pakistan for providing guidance on policy and operational matters which in fact enhanced the professional capabilities of the Bank. Also. An exercise to identify unique jobs has been completed and job description documents have been developed. Going forward. The loyalty of our customers has been very encouraging despite intense competition. A comprehensive performance management system based on well defined goals and responsibilities has been implemented across the Bank. and continue to strive for every possible opportunity to add value for our stakeholders. and on the other. We remain committed to provide ample opportunities for inhouse and external trainings that will enable our employees to improve their skills and professional competence. a comprehensive review and monitoring mechanism has been put in place for timely identification of gaps and corrective measures. M. 2010. increasing our number of branches to 226 branches. it will enable employee goal setting which is the primary requisite for an effective performance management system. This situation has helped us maintain a competitive edge and market share over the years. Also. and external training facilitates both local and international. My sincere appreciation to the Board of Directors for their unstinted cooperation over the year. Lahore and Karachi. the process was cascaded to all groups / divisions / units during the year under review. R. standardization and rightsizing. I am pleased to inform that with the receipt of final approval by the SBP on February 18.

the major focus of the Bank is to achieve a transformation of its core banking business. In other words. Once completed. The new system offers many functionalities which are rich in coverage and processing capabilities. These include a Core Banking System. etc. For this purpose. In view of the old system being decentralized and its reliance on branch based servers. page | 28 . Implementation of the new core banking system is planned in phases. It will also enable the Bank to launch new products and services quickly. With the new systems. while all Bank branches and alternate delivery channels will be at par for delivering consistent service irrespective of their geographical location. the new core banking system will facilitate our employees to be better equipped by providing them with effective planning. five new software application products have been acquired and are currently in different stages of implementation. the Bank plans to achieve a paradigm shift of its focus towards customers. air-conditioning.Askari Bank Limited | Corporate Technology Initiative Askari Bank has embarked upon a major initiative of overhauling its technology infrastructure with the aim of upgrading business and operational capabilities while improving quality of customer service. and gain competitive advantage. a Risk Management System. In recognition of the centralized nature and round-the-clock availability of the new system. For this purpose. customer would become a ‘bank customer’ as against a ‘branch account holder’. the existing network is also being upgraded not only by increasing bandwidth for users. are being arranged. The old system relied on ‘accounts’ as the focal point for customer relationships. the data center is expected to become a reference site. In the first phase most products and services in our conventional branches are being addressed while in the second phase Treasury and Islamic Banking services will be covered. rollout of the new system will be gradual over the entire branch network with all branches of the Bank planned to be converted to the new system within two years of the first branch going ‘live’ during the first quarter of 2010. Adequate computer hardware and redundant support services such as power supply. While enhancing customer services. it is now considered obsolete. Amongst the other applications. a Human Resource Management System. the Supply Chain Management System is expected to transform the procurement process using electronic workflow over the Bank’s data communication network. whereas the new system is structured to give a single view by linking all accounts and services availed by a customer. The new system will also replace many sub-systems implemented over the years. the Bank has also undertaken an upgrade of its computer processing and data communication network capabilities. While the system currently in use has admirably served the Bank over the years.. To improve reliance on data communications. security. power continuity. monitoring and controlling tools. By implementing the new core banking system. It is a centralized application which will run in a central data center and users will simply access it through a communication network. the workflows at our branches will undergo a transformation as users will have all relevant information on their screens as against reliance on paper. Although implementation of all these applications has been undertaken almost simultaneously. a Supply Chain Management / Enterprise GL System and a Customer Relationship Management System. but also introducing redundancy to prevent discontinuation of services because of network failures. This system will also be maintaining an up-todate inventory of Bank’s fixed assets in a central database. This system will also provide an Enterprise GL for the Bank and will be able to integrate information from various sources to compile the overall position of the Bank for reporting to the regulators as well as for the management. a state-of-theart central data center is under preparation. Another aspect of the centralized processing would be a disaster recovery center which can take over centralized operations with minimal down time to attain business continuity. These systems are well recognized and are considered to be the best of the breed in their respective areas.

The Customer Relationship Management System acquired by the Bank has vast capabilities and will be absorbed into the Bank’s working in phases. The Bank recognizes that the technology upgrades is an ongoing process and plans to keep abreast of the latest developments to introduce the best products and services for its customers in the future. decided to leapfrog competition in many areas by undertaking the ambitious plan for technology enhancement and upgrade the benefits of which will become visible in the near future. It will help the Bank to achieve Basel-II compliance in line with the Bank’s policy and regulatory directives. currently carried out through the use of disparate systems and procedures. The use of technology in the business of banking has become very central and many services being offered by banks cannot be conceived if proper technology is not deployed to support the same.Annual Report | 2009 The Human Resource Management System will enable the Bank to maintain an elaborate database of its workforce. In the first phase it will be deployed to achieve workflow based credit approval in the consumer banking area and also provide single view of the customer to the call center agents as well as branch staff and relationship managers. yet again. page | 29 . training. Line managers will also be able to view relevant information about their respective staff through the data communication network and thereby manage their staff more efficiently. It will enable the human resource function to manage its work in a highly efficient manner with functionalities such as employees recruitment. While Askari Bank has prided itself in the use of appropriate technology throughout its history and has achieved many “firsts” in the past in the use of IT. etc. This system will consolidate and upgrade many functions. the Bank has. performance appraisal. payroll management. The Risk Management System will enable the Bank to achieve compliance with the central bank’s directives in this area and will help the Bank’s management to be able to manage risk in a scientific and organized way.

121.763.071.8 12. in ‘000 Percent 2008 Rs.693 75.797 (2.365 10.014.240 534.122 14.468) (117.188.7 0.169.771 – 1.405) 4.548 (4.216 3.100 8.216 76.396 62.630 8. allowances and other benefits to providers of capital Cash dividend Bonus shares to government Income tax to expansion and growth Depreciation Retained in business Total value allocated 23.053.0 3.958 36.6 11.932.014.3 (15.893) 6.5 1.188. in ‘000 Percent Value Added Income from banking services Cost of services Valued added by banking services Non-banking services income Provision against non-performing assets Total value added Value Allocated to employees Salaries.511 6.553 682.0 62% 18% 2009 2008 2% –3% -10% 0 10% 20% To employees To government 9% 11% 77% 24% 30% 40% 50% 60% 70% 80% To providers of capital To expansion & growth page | 30 .7 8.071.265 26.914.8 10.396 18.8) 100.2 – 17.492 35.5 – 24.072.951.1) (2.7 17.5 24.Askari Bank Limited | Corporate Value Added Statement 2009 Rs.157 511.765.693 1.142.240 1.197 – 1.063 (628.053.142.3 100.597) 4.448 645.

in all corners of Pakistan. is more than just being there North Region Islamabad Rawalpindi I Rawalpindi II Peshawar Azad Kashmir Corporate Islamic Banking 15 16 11 13 8 1 8 72 Central Region Lahore I Lahore II Sahiwal Faisalabad Gujranwala Multan Corporate Islamic Banking 12 11 7 11 11 11 1 12 76 South Region Karachi I Karachi II Karachi III Karachi IV Hyderabad Quetta Corporate Islamic Banking 10 10 11 11 14 9 1 11 77 Wholesale Bank Branch (Bahrain) 1 Total branches /sub-branches 226 Branch contact details are given on page 194 to 201 page | 31 .Annual Report | 2009 Our presence.

In addition to the core commercial banking activities. the growing non-performing loans demanded focused handling. The technology transformation initiative that the Bank has embarked upon is in an advanced stage of implementation.Askari Bank Limited | Corporate Business and Operations Review The performance of Askari Bank during 2009 showed marked improvement over the previous year despite non-conducive business conditions prevalent during most of 2009. Also. page | 32 . the benefits are expected to emerge in near future in the form of improvement in service quality. internal controls that will further strengthen our capabilities and readiness for future challenges. processes. controls and workflows. process efficiencies. equity and debt management portfolios. the Bank was able to derive considerable gains through active management of money market. Consolidation of business and operations was the key element of our strategies during 2009 greater focus was placed on strengthening policies. customer offerings. The Bank was able to prudently manage the risks and returns despite subdued credit demand and continued pressure on banking margins.

• Equity financings. • Project Finance transactions. cash management. • Debt swaps. • Fund Transfers / Remittances. strong balance sheet and innovative product structuring allow us to meet the evolving needs of our ever-growing client base. Lahore and Islamabad. • Working Capital Financings.Annual Report | 2009 Corporate and Investment Banking CIBG offerings aim towards the Bank’s large corporate and institutional customers. as well as a suite of structured finance products and services related to strategic expansions. whilst also improving the underlying risk of the portfolio. The challenges to corporate business in the year 2009 were manifold including reduction in private sector credit off-take as a result of slowing down of economy. including public sector entities. with the primary objective of enhancing customer service. syndications. It provides high quality services to its valued customers at a single point within the Bank for meeting all business requirements of its large size customers. CBD strategically present in all major corporate hubs of the country. The combination of CIBG’s industry expertise. CIBG teams work hand in hand to identify and deliver through a combination of basic and structured product offerings including but not limited to: • Term Finance Facilities. • Letters of Credit. Corporate Banking Division (CBD) strategy was focused towards maintaining and strengthening existing corporate relationships while meeting the business requirements of its large size customers. page | 33 . the IBD team remained actively involved in lead arranging and structuring a number of innovative and high profile debt arrangement and project finance transactions for a client base ranging from large corporate. In line with the Bank’s strategy of consolidation. The Corporate Banking Division (CBD) works under the customer relationship management model on a long-term relationship based business concept. thus concluding the bank’s comprehensive transformation agenda in this business area. divestments. • Loan Syndications. Such offerings range from products for meeting operational funding requirements. Year 2009 marked the first full year of CIBG operations through three focused Corporate Centers / Regions in Karachi. with the primary objective of enhancing customer service and also improving the underlying risk of the total portfolio through development and cultivation of relationships with externally rated entities / corporations thus enabling the Bank to maximize risk adjusted returns on capital deployed through CBD. supported by a culture that prioritizes client relationships and economic returns through a structure that enables an integrated. • Debt and equity financing options through Capital Markets. • Bill Discounting. multi-product services. • Balance sheet restructuring services. The Investment Banking Division (IBD) focuses on origination and execution of a full range of financial advisory and capital raising services to corporate and institutional clients as well as actively managing the Bank’s proprietary investments in the local equity and debt capital markets. • Corporate and strategic advisory services. • Structured Trade Finance Facilities. During 2009. • Receivable Discounting. multinational companies and public sector entities. • Guarantees. The Group operates through the Corporate Banking Division (CBD) and an Investment Banking Division (IBD) based upon a client-centric and distribution-focused business model. and trade finance related services. underwriting. project finance. • Export Financing.

The recent data suggests further decline to the already contracting market of this segment. • AskCard (Askari Debit Card) Consumer Banking Services Division’s products and services mostly comprise auto finance.) Consumer Banking Services have started yielding results and the key performance indicators for this business have started to register notable improvement. • Askari Value Plus (Deposits) page | 34 . Special attention is being given to business opportunities involving strategic alliances that will earn sustainable returns. Askari Corporate Credit Cards and Zarai Credit Cards. Silver. with the improvement in economy. Going forward. • Smart Cash ( Running Facility for customers) • Askari Bank’s Mortgage Finance (Home loans) • Askari Bank’s Business Finance (Business loans) • Askar (Auto loans) • Flexible Credit Plan. a very cautious and selective approach was adopted for fresh lending during the year. • Rupee Traveler Cheques. Zarai & Corporate) • Askari Bank’s Personal Finance. Also. Such efforts • i-Net Banking (Internet Banking Services) • Askari Touch ‘N’ Pay (Electronic Bill Payment Services) • Cash Management Services. greater emphasis will be placed on secured form of consumer lending. personal finance.Askari Bank Limited | Corporate Business and Operations Review (cont. The consumer finance segment adversely affected by the recent phenomena of inflation and changes in interest rates. mortgage finance. In this situation. our consumer banking repositioned itself with focus on containing the growth of problem loans and improving recovery efforts and internal controls. our consumer finance shall be focusing on expanding target market and enhancing our portfolio through new and improved initiatives and products. Askari Credit Cards under the MasterCard brand. Gold. Also. We believe that with these measures. CBSD’s current product offerings include: • Credit Cards (Platinum. CBSD is positioned to increase product offerings while improving and maintaining a quality of its risk asset portfolio.

Annual Report | 2009 Our success is tied to our customers’ success. we win together page | 35 ....

It made several arrangements with various multi-national banks and exchange companies to promote home remittances in the country. International Division plays a vital role in establishing and managing multi-faceted correspondent banking relationships with over 277 banks in 76 countries around the globe thereby providing a highly professional and need driven service to the Bank’s valued global clientele. During the year. our Bahrain operations are on the constant lookout to evaluate and explore other areas of business and investment opportunities with acceptable risks and maximum returns. As a wholesale bank branch. The efficiency and effectiveness of treasury operation are being enhanced by relevant and appropriate training of the human resource available with the treasury and updating of its IT system by coordinating with vendor to meet the new challenges and in order to be more competitive in the market. our Bahrain operations serve as an outlet to utilize our foreign currency resources to generate better returns. It always endeavors to participate in appropriate and viable syndication and other trade businesses emerging on the international scene. A new framework of interest rate corridor was introduced with objective of better transmitting the monetary policy signals. the Division also made concerted efforts to enhance the volume of workers’ remittances. This Division is also engaged in carrying out regular due diligence of counterparties with the aim to ensure compliance of ‘anti-money laundering’ and ‘know your customer’ standards and guidelines. while maintaining focus on the trade finance business. During 2009. Wholesale Bank Operations (Bahrain) Wholesale Bank Branch’s contribution towards the earning of the bank have shown improvement during 2009 despite the global economic slowdown . This is also reflected by the number of policy announcements which increased to six during 2009.) Treasury and International Banking 2009 witnessed relative economic stability on the back of increase in foreign exchange reserves. These measures resultantly increased liquidity and the rates moved to acceptable levels during the year under review. These developments led to the start of a monetary easing cycle. the size of treasury book also increased considerably compared to the last year. moderation in inflation and improvement in fiscal imbalance and increase in workers’ remittances.net profit for the year recorded growth of 63%. Being cognizant of the developments on economic and regulatory front. Treasury managed its operations prudently for maximizing return. page | 36 . In addition.Askari Bank Limited | Corporate Business and Operations Review (cont. treasury operations increased transactional turnover on the back of increase in business volumes and better liquidity position. The cautious and gradual approach of monetary policy easing is an optimal response to the prevailing economic situation and appears to be focused on the long term stability of the financial system.

including page | 37 . The economic research desk also provides regular updates on different industries. Dr. competition.17 Million compared to Rs. Despite late starter. The Group also manages marketing activities from a central platform aimed to improve the Bank’s image and also to serve our communities and society at large – through corporate social responsibility projects. general banking and Islamic consumer banking. and recipient of the President of Pakistan’s medal for Pride of Performance (in Academics). During 2009. He is currently the Professor and Dean of the faculty of Shariah and Law at the International Islamic University. money and stock market trends. the Bank ensures that the funds and products of Islamic banking are explicitly managed without any intermingle with the conventional banking business. investment banking. A customer complaint management unit focuses on customer concerns and addresses them by plugging the gaps in processes and workflows. The branch network as on December 31. 2008 – upsurge of 38%.40 billion as on December 31. are in Shariah compliant modes of investments. Despite the strain on profitability due to ongoing set up of new branches. which stood at Rs. 11 new Islamic Banking Branches (IBBs) were opened including the first ever conversion of a conventional banking branch. and value drivers in order to keep the management abreast with current scenarios aiding them in the decision making process. invested and shared. Islamic banking operation of the Bank is now amongst the top players in its peers i.. In order to ensure a renewed focus on customer satisfaction the group endeavors to introduce a service strategy which would bring to attention the service grey areas that lead to customer attrition. the staff of Islamic Banking is fully conversant with the philosophy of Islamic Banking and the products being offered. To implement Islamic banking products in their true letter and spirit. An eminent scholar. the Group aims to facilitate various business functions by setting strategic direction backed by implementation plans with well defined goals and timelines that enables objective monitoring of such plans. The Group also monitors economic developments by a dedicated research desk. including Islamic corporate banking.153. A comprehensive Islamic Banking products and services are being offered by the Bank in order to meet the customers demand for Shariah compliant banking. Marketing & Strategic Planning This Group was recently established to strengthened the marketing and strategic planning function within the Bank. 13 conventional banks with separate stand alone Islamic Banking branches. 2009 from Rs. The Group also oversees product development initiatives.7.e. created for this purpose. 5. training in Islamic banking is given great importance.74 Million in the previous year mainly attributable to 38% increase in net earning spread. the operating profit increased by 77%. Muhammad Tahir Mansoori is the Shariah Advisor of the Bank. 2009 has increased to 31.46 billion as on December 31. Now IBBs of the Bank are present in 15 major cities. Islamic Banking Islamic banking activities of the Bank were initiated during 2006. In line with Shariah requirements.Annual Report | 2009 two sub-branches. that also analysis the market in order to align our business strategies with competition. The main objective of this Group is to facilitate the management in competitive positioning of the Bank in line with the market dynamics while focusing on key strategic objectives. Islamabad. Total deposits increased to Rs. 85. generally based on market and customer feedback and also keeps the existing products under continuous review using product performance measurement scorecards. trade finance. In the area of strategic planning. All funds obtained.

currently extended to 89 branches across the country. Agriculture and Rural Business Division (ARBD) gained further strength with improved and efficient delivery and control mechanism for meeting increased demand for credit by the farmers in easy. Model Dairy Finance.) Agriculture Banking During 2009. • • • • • • • • • •. small farmer group financing. Our innovative product range for this segment is best rated in the market. ARBD remains proactively engaged with its stakeholders for aggregation of services and improving life standard of farmers through its distribution network. Askari Kissan Transport Finance. page | 38 . Gold Fish Finance. Samar Bahisht Finance. Aggregate disbursements increased by 43% and outstanding advances by 9% while the overall spread also registered improvement over previous period. Askari Kissan Farm Mechanization Finance. accessible and affordable manner. livestock financing. in line with the business dynamics and regulatory framework. • • • Our agriculture credit brand includes: • • • Askari Kissan Evergreen Finance. Askari Kissan Aabpashi Finance. Murghban Finance. operations. Asian Development Bank funded agribusiness development & diversification project. The Bank surpassed its allocated targets for agriculture financing by 102% during the financial year 2008-09. Gulban Finance. • • • Askari Kissan Livestock Development Finance. Zarai Credit Card. During the year. Askari Kissan Tractor Finance. Contributed in developing SBP guidelines for Islamic agriculture financing. this unit also achieved further refinement in back office processing including credit initiation.Askari Bank Limited | Corporate Business and Operations Review (cont. Green House & Tunnel Finance. Some of the milestones achieved by ARDB during the year include: • Won first position in diversification of credit products from MINFAL (GOP) Received certificate of appreciation from SBP regarding development of SBP Crop Loan Insurance Framework. Asan Mali Sahulat. White Pearl Finance. risk management. Farm Storage Finance. while focusing in business development. Coordinated with Federal Government for the development of Shaheed Benazir Bhutto Card.

Our mission is to achieve sustained performance.Annual Report | 2009 Operations The primary aim of Operations Group is to provide a supporting platform to all business segments on operational matters across branches and business units. Operations Group consistently strives to bring improvement in internal controls and provision of uninterrupted services to customers. • • page | 39 . business continuity was secured through successfully shifting operations to alternate sites thereby ensuring provision of uninterrupted services to our valued customers without compromising on quality. by strengthening internal control environment. an another milestone achievement. enhanced due diligence measures in account opening and transaction monitoring. The Bank’s decision to replace the existing IT platform with the most modern and sophisticated system i. thereby providing effective control over trade related transactions. while contributing towards effective decision making and extended guidance on operational matters. During the year 2009: • Various processes were reviewed and updated that include introduction of personalized cheque books. automation of clearing settlements. On various occasions of riots. in order to optimize the way operations. The outreach of CFTUs was expanded to all branches dealing in foreign trade. characterized by extra ordinary initiative & creative ability. people and technology work together to achieve desired results. a core banking software is a major step in this direction. Setting up of Centralized Foreign Trade Units (CFTUs) was completed. etc.. Flexcube. which is currently being actively pursued for implementation.e.

Commercial & large corporate. The Bank has endeavored to be the strong market player and has build market share through offering superior services. medium. multinational companies including private and public sector entities.Askari Bank Limited | Corporate Business and Operations Review (cont. In this situation.148 billion. properly documented and approved. the gross advances of the Bank registered a growth of 6% which increased from Rs. The Bank caters to the needs of small. customer deposit base. and a wide product range to its valued clients. power outages. slow credit off-take. The key objective has been to make risk management a core competency of the organization to ensure that risks are accurately identified & assessed. Also. security challenges hampering investment climate and overall decline in business activity. operational and other risks. the non-performing loans swelled to 12% of the gross advances compared to 8% at end 2008. This negative is attributable to a variety of adversities including slowdown in trade – mainly exports.) Credit and Asset Quality Due to overall economic slowdown and its effects on large scale manufacturing industry. During the year. controlling and reporting credit. our focus remained on recovery and during the year under review. At the yearend 2009. Risk Management Risk Management is a core function at the Bank that performs critical activities of measuring. and risk appetite. The scope of appraisal system further extends to remedial management of the accounts. SME. During the year under review. competitive pricing. monitoring. The evaluation and appraisal system comprises of well-designed multi-tier credit appraisal procedures. early warning system was improved for timely identification of problem accounts to and proactive addressing of the issues. market. covering the qualitative and quantitative aspects of credit evaluation. the focus of our risk management remained on implementation of page | 40 . (ii) risk infrastructure and (iii) risk measurement methodologies. During the year under review. The bank has strived to maintain a well collateralized and diversified optimal mix of loan portfolio relative to its capital. The Bank remained selective in taking credit exposures and focused on risk adjusted returns and quality and nature of collaterals to achieve improvement in capital adequacy ratio. the credit growth during 2009 remained subdued. substantial recovery was made with active monitoring and follow-up. The risk management framework of the Bank covers (i) risk policies and limits structure. with extensive guidelines.140 billion to Rs. liquidity. aggregate provisions covered 71% of the non-performing loans. and adequately monitored & managed in order to safely enhance our earnings.

improve performance measurement. The scope of the value at risk (VaR) model is being enhanced to include. The framework assesses and measures the operational risk arising from system. commercial and SME portfolio spectrum. corporate debt in the trading book. provide early warning of gaps in internal controls and enhanced security measures. people and processes. Further. Askari Bank has initiated the process of replacing the technology platform which has been separately described in this report. our internal credit rating model covers a wide array of products spread across the corporate. Electronic Technology Our strength in the area of information technology (IT) based service has always been an edge in the competition and has been a source of considerable strength in the expansion and management of the customer base of the Bank.Annual Report | 2009 policies / strategies and creating awareness that every employee is a risk manager at his / her workplace thus invoking the importance of the role in the overall risk structure of the Bank. in order to generate unified risk metrics for the trading book as a whole. The scope of market risk reporting has been extended to include market risks in the banking book as well as trading book. risk pricing and industry-sector limits have been established to mitigate over-concentration in a particular segment. loss data analysis and operational key risk indicator with aim to reduce operational losses. To minimize the impact of unexpected events on business operations. The Bank has developed new stress testing approaches and is aiming for systematic implementation thereof. obligor risk limits. In line with our policy of providing the most modern and convenient banking services. The Bank has developed and deployed tools and techniques in measuring operational risk such as risk and control self assessment. ensure better control of operations. the Bank has invested in enhanced physical security and collaborated with a security agency to improve protection of branches and staff. Now. The Bank seeks to adopt a holistic approach to market risk by taking into account correlations. inter alia. The Bank has also established a comprehensive Operational Risk Management framework based on appropriate risk management architecture. The Bank’s credit initiation and approval process has been strengthened by introducing models to cover cash collateral and SME exposure. page | 41 .

Other projects completed during the year included launch of VISA Debit Card. 11 new sub-branches and 10 new Islamic branches were added to the network. integrity and availability by adopting an integrated approach to information security risk management with an objective to achieving the ISO international certification. Besides. activation of the new Data Center and establishment of a Disaster Recovery Site in another city are amongst ETD plans for the near future. Recently. adoption of Lotus Notes Email system and implementation of a central database of the exiting branch based banking system. A number of security features were introduced in the data communication network which include installation of firewalls at all branches. lay out and structure have been designed while detailed work on development of processes. efficient delivery of customer services through branches as well as alternate delivery channels. enhance banker – customer relationship and build confidence amongst stakeholders. All new systems currently under implementation as well as the existing applications will be run out of the new data center which is planned to be operational in March 2010. integration of the two call centers. During 2009. upgrading of internet banking. compliance with the international standards of confidentiality. a separate building has been acquired in Islamabad for ETD where a stateof-the-art data center is being established. During the year. Information Security The prime objectives of establishing Information Security Division (ISD) is to manage the Bank’s Information Security System (ISMS) in strict page | 42 . The Division made all out efforts in developing and implementing related policies & procedures at the selected areas within the scope of ISO certification.) Besides the new initiatives. shifting of existing operations to the new ETD premises. and information gathering have been initiated. implementation of an Enterprise Anti-Virus system and an IT assets monitoring system over the network. ETD also achieved installation of 34 additional ATMs raising the total number of the Bank’s ATMs (including third party ATMs) to 194. Extensive training was imparted to the designated Information Security Managers for creating awareness and clear understanding of the significance of information security within the Bank. Besides making the new applications ‘live’ and smooth rollout to all branches of the Bank. Besides increasing bandwidth. thus making Askari Bank the first Bank in the Pakistan banking industry to be awarded with this prestigious certification. implementation of a new version of Credit Card Management system. the Electronic Technology Division (ETD) is responsible for managing the legacy systems which include automated branch banking operations. The data communication network of the Bank was extensively overhauled for improving the connectivity between the branches and other offices with ETD. information assets. Another important achievement was establishment of a Disaster Recovery Center for replicating the central servers to achieve business continuity. the Bank achieved this milestone and the British Standards Institution (BSI). needs. selection of technologies.Askari Bank Limited | Corporate Business and Operations Review (cont. ETD is also responsible for developing and maintaining computer software application systems to meet the requirements of business and operations and to support launch of new products and services. This certification will further strengthen our relationships with foreign / local correspondents. integration of Islamic banking system with the Bank’s ATM network. decision making and regulatory reporting. a leading global provider of independent thirdparty certification of management systems awarded our Bank ISO/ IEC 27001:2005 Certification. a number of branches were provided dual links. locations. applications. ISD has been tasked to creating and designing the infrastructure for the implementation of ‘Enterprise Architecture’ (EA) within the Bank. Its activities include supporting the existing branch based banking system installed in the branches and delivering 24/7 banking services through the Bank’s ATM network as well as through internet banking and call centers. 5 new conventional branches. ETD successfully implemented a third party software system for Consumer Banking Services Division thereby enabling them to manage their portfolio effectively. facilitating intrabank electronic communications and arranging an efficient MIS for operational management. In order to implement the new centralized applications.

Annual Report | 2009 Our People Human capital of the Bank is given the highest value in the aim to achieve its mission of being the Bank of first choice. IT. During the year 2009. the PMS based on well-defined goals and responsibilities was made effective with the new performance appraisal system during the annual employee appraisal exercise. The advance modules of the system will automate many processes relating to selection and recruitment. During the period under review most of the task relating to organizational restructuring have been completed. and on other diverse subjects including series of leadership development programs for senior management of the Bank. risk management. credit & finance. Accordingly. training and development. the Bank’s focus remains on employee development coupled with improving the ambiance through regular reviews and refinements of processes and work environment thereby ensuring its dynamism and robustness and keeping the spirit of its key guiding principles and policies. another training academy was established in Karachi. international trade. domestic banking operations. Training goals were determined in light of the well defined training need assessments (TNA) procedures as envisaged in the overall strategic plan of the Bank. During the year. These academies conducted a record number of 456 courses. management & communication.e. performance management. career and succession planning etc. workshops and skill development clinics in the disciplines of service & attitude. training & development team of the Bank continued its pursuit for quality training to the Bank’s staff in line with the approved training policy. PeopleSoft HCM was implemented that integrates HR systems and processes and provides expanded online services for staff on HR matters. development of job description documents etc. finalization of the organogram of the Bank and each business / operating unit. page | 43 . For the first time during 2009. adding to the two training academies already operating in Rawalpindi and Lahore. These courses were conducted by professionally skilled qualified faculty aided by industry experts. During the year 2009 the first phase of new Human Capital Management System (HCM) i. which included development & implementation of performance management system (PMS).

5% 2.802 2008 Retained Profit Dividends Net interest income Non-interest income Non-interest Income to net interest income Operating expenses Cost to Income Ratio (CIR) Profits The operating profit (i. partly offset by increase of 19% in operating expenses.8 12. Non mark-up / non interest income The non mark-up / non interest income.1 182. commission and brokerage income recorded marginal increase. despite revenue suspensions owing to burgeoning NPLs. 2009 from Rs.594 35% 2006 3.0 1. Cost to income ratio recorded a negative trend.565 38% 28% 2007 4. Return on average assets Return on average assets at the close of 2009 was 0.2.503 502 534 3.4. This rise is mainly due to 26 new branches opened during 2009. Non-interest income decreased by 6% while administrative expenses increased by 19%.030 2009 2009 254.283 34% 4.633 1. reflecting combined effect of disproportionate decline in revenues and rise in operating costs. whereas profit after tax registered an increase of 187% compared to the corresponding year.56 billion. Earnings per share Earnings per share (EPS) increased from Re.2 8.2 Total Assets (Rupees in billion) 5.015 1. registering an increase of 15%.108 1.2 0. almost at the same level as of last year (2008: Rs. Pretax profit recorded growth of 256%.421 1.370 2.5% 1.178 7.743 920 837 723 4. The increase is mainly due to growth of 17% in net interest income and decline in provisions / write-offs by 28%.033 Operating Expenses (Rs.Askari Bank Limited | Corporate Financial Review Distribution of Profits (Rs.0 8% 3% 2004 2005 2006 2007 2008 2009 2004 2005 2006 2007 2008 Shareholders’ funds Return on Average Shareholders’ fund Shareholders’ funds Shareholders’ funds increased to Rs.845 75 2005 2.0% 13. Shareholders’ Funds (Rs.2 1.458 9.9 23% 23% 11.9 13.4 6.97 billion of last year.20% last year. The net interest income registered an increase of 17%. as well as 36 new branches opened in late 2008.620 6.2 1.48% as against 0.76 per share (restated for bonus shares issued during 2009) of last year to Rs. Gain on sale of investments registered increase owing to improvement in bourses. Net surplus on revaluation of assets including equities.097 1. The fee.3 14.047 1.299 1.18 per share for the year 2009.503 Non-Interest Income (Rs. beside persistent inflationary upsurge.3 35% 11.1 28% 8.203 1.12. 4% over last year. page | 44 107.555 (381) (628) 2004 2005 2006 Taxation 2007 2008 2009 2004 2005 2006 2007 2008 2009 2004 1. in billion) Earnings per Share (Rupees) Return on Average Assets 2.e.139 2.6% 145. in million) 11% 8% 8% 8% 8% 11% 7.2% 2009 2004 2005 2006 2007 2008 Return on Average Assets (RoA) 1.071 48% 5. in million) 71% 1. increased by 93% due to improvements in bourses.916 .707 1.0 0.4.14.0. mainly due to (a) a one-off income recognized last year from dealing in foreign currencies and (b) overall subdued economic activity during the period under review.4% 206.3 166. in million) 1.0 15. declined by 6%. profit before provisions and taxation) of the Bank stood at Rs.552 2.95 billion at the end of December 31.53 billion). Operating Expenses Administrative expenses have increased by 19% over the previous year. registering an increase of 28 bps due to 187% increase in profit for the year against increase in total assets of 23%.

Annual Report | 2009

Non-Performing Advances
(Rs. in billion)

Analysis of Deposits
(Rs. in billion)
112

Capital Adequacy
254.3 11.0%
82 82

140

145.1

108

8.5% 107.2
47.7

166.0

12%
66

182.2

10.9%

103

88

59

8%
50

9.4%

43.3

38.0

2.1

2.3

2004

2005

2006

2007

2008

2009

1.3

1.2

1.7

2004 Current

2005 Saving

2006 Time

2007 Others

2008

2009

2.1

2%

13.3

3%

18.5

20.4

4%

24.0

28.6

30.0

39.7

6%

40.4

72

44.4

206.2

148

11.8%

9.2%

2004

2005

2006

2007

2008

2009

Gross Advances

NPL as % of Gross Advances

Total Assets (Rs. in billion)

Capital Adequacy Ratio (Percent)

NPLs and provisions against NPLs Non-performing loans (NPLs) increased by 52% during 2009, due to new classifications. Cumulative provision against NPLs increased by 14%, whereas provision charge for the year declined by 43% due to recognizing Rs.2.81 billion as the benefit of forced sale values (FSV), as allowed by the SBP. By year end 2009, NPLs as a percentage of total advances reached 12.01% compared to 8.36% at the end of 2008. The aggregate provisions covered 71% of the NPLs, compared to 94% last year – mainly due to the recognition of the aforesaid FSV benefit.

Current, Savings and other deposits At the close of 2009, customer deposits had reached Rs.205.97 billion from Rs.167.68 billion at end 2008, an increase of 23% during the year. Both the local and foreign currency deposits grew almost at the same rate i.e. 23% - local currency deposits increased to Rs.174.28 billion from Rs.141.89 billion as of December 31, 2008, while the foreign currency deposits stood at Rs.31.69 billion as on December 31, 2009. The aggregate number of deposit accounts reached 692,821 at end 2009 – an increase of 13% over last year.

Capital adequacy As of December 31, 2009, Bank’s capital adequacy ratio (CAR) stood at a comfortable 11.75% (9.22% at end 2008), against the SBP’s minimum requirement of 10%. The improvement in CAR is the result of certain measures initiated by the Bank during 2009, which include issue of Tier II capital i.e., an unsecured subordinated loan in the form of Term Finance Certificates (TFC-III) amounting to Rs.3 billion, aggressive risk profiling of assets and, increased emphasis on risk adjusted returns by all risk taking units.

page | 45

Askari Bank Limited | Corporate

Financial Calendar
2009 1st Quarter Results issued on 2nd Quarter Results issued on 3rd Quarter Results issued on 18th Annual Report issued on 18th Annual General Meeting scheduled for 20% bonus shares to be issued 2008 1st Quarter Results issued on 2nd Quarter Results issued on 3rd Quarter Results issued on 17th Annual Report issued on 17th Annual General Meeting scheduled for 25% bonus shares issued Summarized Quarterly Financial Results
2009 Rupees in million 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr 1st Qtr 2008 2nd Qtr 3rd Qtr 4th Qtr

April 28, 2009 August 20, 2009 October 27, 2009 February 23, 2010 March 30, 2010 Within 45 day of AGM

April 28, 2008 August 28, 2008 October 23, 2008 February 21, 2009 March 30, 2009 Within 45 day of AGM

Financial Position
Assets Cash, short term funds & statutory deposits with SBP Investments Advances Operating fixed assets Other assets Total assets Liabilities Borrowings from financial institutions Customers deposits Sub-ordinated loans Other liabilities Total liabilities Shareholders’ funds Share capital Reserves and unappropriated profit Surplus / (deficit) on revaluation of assets Total shareholders’ funds 33,031 34,363 33,815 39,620 120,218 129,130 8,323 9,493 9,185 9,573 204,572 222,179 23,289 16,735 157,324 180,658 2,996 2,996 7,342 7,685 190,951 208,074 5,073 7,279 1,269 13,621 5,073 7,547 1,485 14,105 38,251 32,364 58,332 67,046 124,959 135,034 9,675 9,846 9,575 10,036 240,792 254,326 19,965 19,300 191,449 205,970 5,370 5,995 9,137 8,113 225,921 239,378 5,073 8,138 1,660 14,871 5,073 8,069 1,806 14,948 23,980 26,258 27,027 24,464 39,788 40,775 36,691 35,678 102,111 114,036 124,630 128,818 5,498 5,886 6,360 8,266 6,140 7,257 8,216 8,965 177,517 194,212 202,924 206,191 21,368 19,715 19,856 15,190 134,867 153,324 161,108 167,677 2,997 2,997 2,996 2,996 6,325 6,440 7,667 7,357 165,557 182,476 191,627 193,220 4,059 7,772 129 11,960 4,059 7,999 (322) 11,736 4,059 8,017 (779) 11,297 4,059 7,976 936 12,971

Profit & Loss
Total income Mark-up / return / interest earned Mark-up / return / interest expensed Net mark-up / interest income Non - mark-up / interest income Fee, commission and exchange income Other income Operating expenses Provisions against non-performing assets Operating profit Profit before tax Taxation Profit after taxation Ratios (percent) Return on average shareholders’ funds (RoE) Return on average assets (RoA) 6,140 5,563 3,167 2,396 577 375 202 1,676 791 1,297 506 (190) 316 9.5% 0.6% 5,989 5,416 3,073 2,343 573 332 241 1,682 860 1,234 374 (106) 268 7.7% 0.5% 6,252 5,483 3,479 2,004 769 285 484 1,809 70 964 894 (302) 592 16.3% 1.0% 6,835 6,199 3,910 2,289 636 315 321 1,863 1,194 1,062 (132) 63 (69) -1.9% -0.1% 4,566 3,988 2,164 1,824 578 422 156 1,328 826 1,074 248 (66) 182 6.0% 0.4% 4,790 3,904 2,324 1,580 886 754 132 1,381 822 1,085 263 (36) 227 7.7% 0.5% 5,767 4,983 2,994 1,989 784 616 168 1,605 1,154 1,168 14 (4) 18 0.6% 0.0% 5,978 5,519 3,169 2,350 459 339 120 1,601 1,271 1,208 (63) 23 (40) -1.3% -0.1%

page | 46

Annual Report | 2009

Share & Debt Information
1. 1.1 Share information The ordinary shares of Askari Bank Limited are listed on the Karachi, Lahore and Islamabad stock exchanges. The audited financial statements have been submitted to the stock exchanges within the requisite notice periods as required by the relevant regulations. Askari Bank’s Central Depository System ID is 05132. Market symbols Karachi Stock Exchange – AKBL, Reuters – ASKB.KA, Bloomberg – AKBL: PA Share price and volume
Askari’s Number of Shares Askari’s Shareholders’ funds Askari’s Market capitalization KSE’s market capitalization Askari’s share in market capitalization Askari High During the year Askari Low During the year Askari Close at December 31

1.2 1.3

(Rupees)
Askari’s number of shares traded during the year

2001 2002 2003 2004 2005 2006 2007 2008 2009 1.4

103,553,663 108,731,400 114,168,000 125,584,800 150,701,684 200,433,239 300,649,859 405,877,308 507,346,700

2.58 4.17 5.05 6.02 8.81 11.05 12.27 12.97 14.95

1.38 2.92 5.88 11.80 25.41 21.04 29.99 5.91 13.85

297.42 595.21 951.45 1,723.45 2,746.56 2,771.11 4,329.91 1,857.18 2,753.54

0.46% 0.49% 0.62% 0.68% 0.93% 0.76% 0.69% 0.32% 0.50%

16.45 27.90 53.90 98.25 133.25 145.00 128.75 106.20 28.69

10.35 13.50 21.30 50.61 70.00 68.00 75.50 14.57 12.15

13.30 26.85 51.50 94.00 126.80 104.95 99.75 14.57 27.30

51,396,000 36,984,000 96,059,000 1,043,563,300 612,803,600 444,476,500 1,628,929,400 382,990,000 190,782,242

Record of share issues
Year Issue Number of shares Share capital (Rs)

1992 1993 1995 1996 1996 1997 1998 2001 2002 2003 2004 2005 2006 2007 2008 2009

Prior to public issue Public issue 50% Rights issue @ Rs.10 per share Bonus @ 15% 50% Rights issue @ Rs.20 per share Bonus @ 10% Bonus @ 15% Bonus @ 5% Bonus @ 5% Bonus @ 5% Bonus @ 5% Bonus @ 10% Bonus @ 20% Bonus @ 33% Bonus @ 50% Bonus @ 35% Bonus @ 25%

15,000,000 15,000,000 15,000,000 6,750,000 22,500,000 7,425,000 12,251,250 4,696,312 4,931,101 5,177,712 5,436,568 11,416,794 25,116,947 49,731,555 100,216,620 105,227,450 101,469,326 507,346,635

150,000,000 150,000,000 150,000,000 67,500,000 225,000,000 74,250,000 122,512,500 46,963,120 49,311,010 51,777,120 54,365,680 114,167,940 251,169,474 497,315,549 1,002,166,196 1,052,274,496 1,014,693,261 5,073,466,346

2. 2.1

Debts Information “Askari Bank has issued the following Term Finance Certificates (TFCs) - unsecured sub-ordinated debt, listed on the Lahore Stock Exchange (LSE). “
(Rupees in million) TFC - I TFC - II TFC - III

IPO investors General Public Underwriters Market Symbols / IDs at LSE Rating by PACRA Market Price as at December 31, 2009 (based on marketable lots of Rs. 5,000) Applicable Interest Rate (p.a.) as at December 31, 2009

1,000 500 1,500 AKBLTFC AA– 5,000 13.50%

1,125 226 149 1,500 AKBLTFC2 AA– 5,000 14.35%

2,375 19 606 3,000 AKBLTFC3 AA– 5,000 15.25%

Price Volume Chart
(During the year 2009)
No. of shares in ‘000 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 0 Jan Volume Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 5 0 20 15 10 Rupees per share 30 25 160 140 120 100 80 60 40 20 0

Quarterly Price Volume Chart
(During the year 2004 to 2009)
Rupees

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Average share price

Volume

Average share price

page | 47

Askari Bank Limited | Corporate

Horizontal & Vertical Analysis
FINANCIAL POSITION Horizontal Analysis 2009 Vs 2009 2008 2007 2008 Rupees in millions 19,386 8,364 4,614 67,046 135,034 9,846 10,036 254,327 2,946 19,300 205,970 5,995 334 4,833 239,378 14,949 5,073 7,183 886 13,143 1,806 14,949 16,030 3,955 4,480 35,678 128,818 8,266 8,964 206,191 2,585 15,190 167,677 2,996 13 4,759 193,220 12,971 4,059 7,667 309 12,035 936 12,971 13,356 3,497 14,444 39,431 100,780 5,128 5,535 182,172 2,627 17,554 143,037 2,997 472 3,220 169,906 12,266 3,006 6,948 2,145 12,100 166 12,266 21% 111% 3% 88% 5% 19% 12% 23% 14% 27% 23% 100% 2469% 2% 24% 15% 25% -6% 187% 9% 93% 15% 2008 Vs 2007 Variance 20% 13% -69% -10% 28% 61% 62% 13% -2% -13% 17% – -97% 48% 14% 6% 35% 10% -86% -1% 463% 6% 2007 Vs 2006 -10% -52% 72% 38% 2% 35% 45% 10% 43% 17% 8% – -36% 24% 10% 11% 50% 19% 19% 26% -88% 11% Vertical Analysis 2009 2008 2007 Rupees in millions 19,386 8,364 4,614 67,046 135,034 9,846 10,036 254,327 2,946 19,300 205,970 5,995 334 4,833 239,378 14,949 5,073 7,183 886 13,143 1,806 14,949 16,030 3,955 4,480 35,678 128,818 8,266 8,964 206,191 2,585 15,190 167,677 2,996 13 4,759 193,220 12,971 4,059 7,667 309 12,035 936 12,971 13,356 3,497 14,444 39,431 100,780 5,128 5,535 182,172 2,627 17,554 143,037 2,997 472 3,220 169,906 12,266 3,006 6,948 2,145 12,100 166 12,266 2009 8% 3% 2% 26% 53% 4% 4% 100% 1% 8% 86% 3% – 2% 100% 6% 34% 48% 6% 88% 12% 100% 2008 Composition 8% 2% 2% 17% 63% 4% 4% 100% 1% 8% 87% 2% – 2% 100% 7% 32% 59% 2% 93% 7% 100% 2007 7% 2% 8% 22% 55% 3% 3% 100% 2% 10% 84% 2% – 2% 100% 7% 25% 57% 17% 99% 1% 100%

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 Deferred tax liabilities Other liabilities Net assets Represented by Share capital Reserves Unappropriated profit Surplus on revaluation of assets – net of tax

PROFIT & LOSS ACCOUNT

Horizontal Analysis 2009 Vs 2009 2008 2007 2008 Rupees in millions 22,662 13,629 9,033 2,324 431 77 – 2,915 6,118 1,308 163 538 144 (2) 404 2,555 8,672 6,996 34 7,030 1,642 562 120 (147) 534 1,108 2.18 18,393 10,651 7,743 3,825 – 1 247 4,073 3,670 1,258 174 874 37 22 343 2,707 6,377 5,904 11 5,916 461 17 (50) 108 75 386 0.76 15,143 8,686 6,458 3,920 – 2 – 3,922 2,536 1,073 137 656 2,361 2 337 4,565 7,101 4,790 12 4,802 2,300 99 (234) (246) (381) 2,681 6.61 23% 28% 17% -39% 100% 7600% -100% -28% 67% 4% -6% -38% 289% -109% 18% -6% 36% 18% 209% 19% 256% 3206% -340% -237% 612% 187% 187%

Vertical Analysis 2008 Vs 2007 Variance 21% 23% 20% -2% – -50% 100% 4% 45% 17% 27% 33% -98% 1000% 2% -41% -10% 23% -9% 23% -80% -82% -79% -144% -120% -86% -89% 2007 Vs 2006 20% 24% 15% 248% – – – 247% -44% 6% 26% 12% 2008% 200% 5% 113% 7% 46% 100% 46% -31% -90% -100% -318% -135% 19% 19% 2009 2008 2007 Rupees in millions 22,662 13,629 9,033 2,324 431 77 – 2,915 6,118 1,308 163 538 144 (2) 404 2,555 8,672 6,996 34 7,030 1,642 562 120 (147) 534 1,108 18,393 10,651 7,743 3,825 – 1 247 4,073 3,670 1,258 174 874 37 22 343 2,707 6,377 5,904 11 5,916 461 17 (50) 108 75 386 15,143 8,686 6,458 3,920 – 2 – 3,922 2,536 1,073 137 656 2,361 2 337 4,565 7,101 4,790 12 4,802 2,300 99 (234) (246) (381) 2,681 2009 100% 60% 40% 10% 2% – – 13% 27% 5.8% 0.7% 2.4% 0.6% – 1.8% 11% 38% 31% 0.2% 31% 7% 2.5% 0.5% -0.7% 2.0% 4.9% 2008 Distribution 100% 58% 42% 21% – – 1% 22% 20% 6.8% 0.9% 4.7% – 0.1% 1.9% 15% 35% 32% 0.1% 32% 3% – – 1% 0% 2% 2007 100% 57% 43% 26% – – – 26% 17% 7.1% 0.9% 4.3% 15.6% – 2.2% 30% 47% 32% 0.1% 32% 15% 1% -2% -2% -3% 18%

Mark–up / return / interest earned Mark–up / return / interest expensed Net mark–up / interest income Provision against non–performing loans and advances Impairment loss on AFS investments Provision for impairment in the value of investments / Rev repo Bad debts written off directly Net mark–up / interest income after provisions Non mark–up/interest income Fee, commission and brokerage income Dividend income Income from dealing in foreign currencies Gain on sale of investments – net Unrealised gain on revaluation of investments classified as held for trading – net Other income Total non–markup / interest income Non mark–up/interest expenses Administrative expenses Other charges Total non–markup / interest expenses Profit before taxation Taxation – current – prior years’ – deferred Profit after taxation Basic / diluted earnings per share – Rupees

page | 48

net of tax Unappropriated profit Reserves Share capital Other liabilities Deferred tax liabilities Sub-ordinated loans Deposits and other accounts Borrowings Bills payable page | 49 .Annual Report | 2009 Balance Sheet Horizontal Analysis 8% .annualised Surplus on revaluation of assets .21% 7% Cumulative average growth rate for the last three year .net of tax Unappropriated profit Reserves 36% 11% 23% -23% 0% 26% 16% 9% 17% 15% 38% 0% 37% 11% 33% -18% 4% 9% Share capital Net assets Other liabilities Deferred tax liabilities Liabilities against assets subject to finance lease Sub-ordinated loans Deposits and other accounts Borrowings Bills payable Total assets Other assets Deferred tax assets Operating fixed assets Advances Investments Lendings to financial institutions Balances with other banks Cash and balances with treasury banks Balance Sheet Vertical Analysis Composition for the last three year 100% 100% 90% 90% 80% 80% 70% 70% 60% 60% 50% 50% 40% 40% 30% 30% 20% 20% 10% 10% 0 2009 2008 2007 2009 2008 2007 0 Other assets Operating fixed assets Advances Investments Lendings to financial institutions Balances with other banks Cash and balances with treasury banks Surplus on revaluation of assets .

% Share information Earnings per share (EPS)** Net assets per share Market value per share .net Investments Cash.high Market value per share .year end Market value per share .Askari Bank Limited | Corporate Decade’s Performance Summary December 31 Assets Advances . commission and exchange income Other income Operating expenses Profit before taxation Taxation Profit after taxation Operating profit Total income Total expenditure Cash flows Operating activities Investing activities Financing activities Changes in cash & cash equivalents Cash & cash equivalents at end of the year Business transacted Imports Exports Guarantees Ratios Return on average shareholders’ funds (RoE) Return on average assets (RoA) Profit before tax ratio Gross spread ratio Income / Expense ratio Advance to deposits (CDR) Earning assets to total assets Operating fixed assets to average shareholders’ funds Capital adequacy ratio (CAR) Rate of cash dividends Rate of bonus issue Price earning ratio (PE) Dividend yield ratio . short term funds and statutory deposits with SBP Operating fixed assets Other assets Total assets Non-performing loans Provisions for non-performing loans Liabilities Deposits Refinance borrowings Sub-ordinated loans Other liabilities Shareholders’ funds Total shareholders’ funds Share capital Reserves Surplus on revaluation of assets Profitability Interest income Interest expenditure Net interest income Provision against non-performing assets Fee.% Dividend payout ratio .low Other information Number of employees (Regular) Number of branches * post balance sheet event ** based on number of shares outstanding at each year end page | 50 .

218 8.356 (3.370 (13.00 9.40 29.00 3.99 1.51 9.51 42.222 3.013 12.965 10.90 1.047 1.557 25.998 7.40 89.834 150 2008 2009 Rupees in million 128.977 25.61 1.75 1.103 2.503 602 839 713 2.48 7.088 1.200 3.00 35.30 12.168 1.31 22.736 5.10 2.18 43.099 1.461 9.24 140.23 87.754 99 2006 99.813 166.28 1.121 3.98 9.743 4.712 119.250 4.07 65.704 4.281 36 2002 30.13 13.210 5.387 1.737 10.14 65.487 1.143 8.802 2.66 44.25 77.86 1.00 15.00 15.129 1.677 13.723 58 2004 69.191 254.40 46.70 71.378 2.409 143.764 11.980 1.20 47.940 1.50 2.651 10.097 2.000 4.428) 7.036 206.359) 18.333 13.713 14.651 7.60 4.256 4.20 2.689 17.41 55.25 13.778 3.681 6.476 14.037 9.980 1.807 22.00 21.033 2.20 20.18 13.179 28.678 67.838 17.32 0.035 26.317 443 4.45 31.83 85.431 31.65 6.91 43.06 0.454 1.046 24.922 1.19 1.61 37.394 10.31 47.708 27.700 5.535 182.10 1.193 2.085 672 30.02 76.50 20.00 0.006 9.311 8.659 205.24 58.28 58.125 3.360 2.313 1.80 15.053 2.15 104.976 936 18.60 32.694 308 638 317 1.073 1.772 (13.70 105.90 90.278 48.074 1.302 11.50 15.817 70.047 4.017 1.20 23.70 1.662 13.574 36.00 50.244 557 687 1.70 20.088 1.90 92.61 72.995 13.246 1.780 39.162 949 41.818 135.709 17.92 40.87 83.266 9.434 12.90 20.00 20.30 1.252 200 % 7.579 1.936 2.778 22.908 7.977 5.277 (452) 3.461 10.90 15.00 21.16 30.030 1.965) (235) (4.70 9.843 920 1.546 131.25 39.859 837 2.104 15.954 12.20 30.126 (675) 3.419 118.760 1.90 94.464 32.100 20.239 15.213 38.00 63.10 25.266 3.409 8.283 3.40 23.436 723 1.117 3.781 4.039 6.663 1.108 4.306 20.00 5.60 1.251 2.36 75.846 8.732 3.839 13.824 32.15 2.595 1.061 1.980 2.247 7.028 3.23 1.213 2.88 20.069 1.60 1.42 58.004 7.278 4.18 29.00 38.626 30.20 1.022 3.629 9.25 15.95 13.35 15.489 3.845 2.370 315 708 925 1.22 25.329 11.90 71.389 8.882 10.274 939 134 506 122 680 752 436 316 886 3.86 14.093 1.923 3.438 1.997 13.00 6.560 107.850 Rupees in billion 148.597 6.33 43.415 23.07 23.69 66.014 1.90 1.07 49.278 1.534 21.60 1.05 46.507 6.016 1.706 13.70 56.55 3.66 50.714 8.82 8.392 11.00 4.00 9.50 88.036 749 3.00 4.50 16.971 4.916 461 75 386 4.893 8.380 2.13 1.353 119.297 5.059 7.128 5.902 799 1.57 44.093 166 15.347 1.95 142.73 1.39 26.30 97.80 2.902 2.306 51.60 27.30 24.74 5.564 61.733 145.522 26.902 1.656 3.32 38.333 7.300 (381) 2.493 4.00 97.058 2.595 5.297 98.949 5.594 2.57 4.715) (226) 4.71 70.46 86.90 8.00 12.999 6.725 11.615 1.056 641 1.15 Numbers 4.83 30.686 6.594 167.841 351 599 247 1.00 5.11 1.216) 2.034 3.241 122 2007 100.173 1.00 30.96 14.142 2.686 19.30 28.824 50.50 Rupees 2.50 10.80 14.145 4.308 1.100 2.036 1.00 20.13 70.75 127.00 5.155 986 1.19 51.409 (32.393 226 * * page | 51 .101 1.642 534 1.30 14.158 6.10 25.777 1.48 55.456 46 2003 44.034 35.229 (60) 3.50 53.30 92.70 10.657 7.521 22 4.50 12.736 11.364 8.172 6.570 (3.45 3.48 126.60 90.16 99.970 13.10 3.85 10.291 5.00 33.95 31.605 3.29 75.474 12.09 37.00 5.98 44.90 10.813 1.00 10.50 7.640 2.258 1.69 12.00 11.645 12.45 1.000 7.64 1.10 89.62 38.25 14.396 40.80 131.38 72.35 50.40 26.016 4.073 8.36 10.327 11.27 82.00 2.087 1.915 1.996 8.89 13.795 9.75 20.620 1.54 15.30 37.527) (203) (5.56 51.30 3.06 15.20 23.122) (145) 3.222 19.20 70.30 0.354 5.53 11.008 458 551 1.80 99.780 83.80 6.597 155 (446) 2.30 22.073 3.00 9.118 75 2005 85.65 1.71 31.216 23.858 3.458 3.147 29 2001 23.319) 1.94 0.77 58.85 27.269 (8.882 3.30 34.810 3.055 6.19 42.810 (253) 2.292 11.426 85.47 27.146 4.18 11.70 11.611 75.918 2.786 (213) (261) 1.56 85.191 27.349 283 677 119 854 1.25 56.Annual Report | 2009 2000 17.37 7.373 2.90 23.449 5.57 104.319 9.840 3.50 11.

as well as in terms of a significant knock-on effect on investment inflows and market confidence. Despite the adverse impact of the multifarious and multifaceted challenges on the economy. On behalf of the Board of Directors. The Economy Pakistan’s economy faced unprecedented challenges during fiscal 2009 including a) severe macroeconomic crises that resulted from policy-induced imbalances of the previous years. on the other hand declined by 52. financing from domestic sources grew moderately. for the year ended December 31. Towards the end of 2009 this was backed by page | 52 . In response to the challenges outlined above. reflecting lower economic activity. and f) the intensification of an unprecedented domestic security challenge which has exacted a high cost from the economy. The latest signs indicate a further upward trend. v) reduced availability of expected external capital to finance fiscal and current account deficit. I am pleased to present the 18th Annual Report of Askari Bank Limited along with the audited financial statements and Auditors’ Report thereon. although net foreign investment contracted. Net portfolio investment returned to a positive.1 percent in the previous year.Askari Bank Limited | Corporate Directors’ Report greater stability and positive trends in macroeconomic indicators other than inflation. both in terms of direct costs. This occurred mostly with the build-up of foreign exchange reserves upon our entry in the International Monetary Fund (IMF) program. Current transfers were particularly robust due to a substantial rise in workers’ remittances and other transfers. 2009. Foreign Direct Investment (FDI). In this backdrop. d) adverse effect of the turmoil in global financial markets that caused the sharp decline in the global demand for exports.3 percent during fiscal 2009. the government strongly committed itself to restoring macroeconomic stability as well as the confidence of markets and investors. A major success in fiscal policy is the recent agreement between the federal and provincial governments on the Seventh National Finance Commission (NFC) Award. especially circular debt management. during fiscal 2009. The major impetus came from a contraction in the trade account deficit. Pakistan’s external accounts improved significantly due to a marked contraction in the current account deficit and an increase in the capital account surplus. On the external front. but the services and income account deficits also contracted significantly. partly because the Government reduced its reliance on inflationary borrowing from the State Bank of Pakistan (SBP).0 percent compared to the revised rate of 4. As a result of the improvement in the overall external account. b) a sharp deterioration in Pakistan’s net external terms of trade as a result of the spike in recent years in world commodity prices of which Pakistan is a net importer and its adverse impact on our balance of payments. our economic growth has not been out of sync when viewed in a global context. Despite sharp increase in the fiscal deficit. GDP grew by 2. c) the significant supply shocks suffered by the economy in the provision of energy due to high oil prices and sector management problems. The capital surplus was driven primarily by increased inflows from the International Financial Institutions (IFIs). The fiscal deficit remained behind the annual target owing to a continuing rise in expenditure and delays in certain revenue receipts. and the shielding of the confidence in Pakistan’s banking system and financial markets from the devastating effects of the international financial crises due to a strong regulatory regime.

page | 53 . Recent estimates suggest that GDP growth is likely to be around the annual target of 3. almost at the same level as last year (2008: Rs.461 million of corresponding period the previous year . better domestic production of some commodities i. resulting in a cumulative reduction of 250 bps in the policy rate since the beginning of current easing cycle that started in April 2009.300 1. The major contribution for this growth is expected to come from the services sector. A major challenge in the economy is to improve the tax-toGDP ratio. This sustainability is attributable mainly to an offsetting increase of 23 percent in gross markup income – which came despite increase in revenue suspension on burgeoning non-performing loans (NPLs): Non-fund income decreased by 6 percent. Pakistan’s trade deficit declined significantly mainly due to 23 percent year on year fall in the import bill although exports continued to decline. in billion) CAGR 18.e. even as the cost of the anti-militancy campaign continues to mount. Similarly. it is likely to remain higher than the annual target. wheat and cotton.642 146 2007 2008 2009 107 145 166 182 206 2004 2005 2006 2007 2008 2009 2004 2. and rising commodity prices.347 CAGR 10. which crossed the US dollar 15 billion mark by end 2009. and. The profit before tax for the year 2009 increased to Rs.1% 135 Deposits (Rs. 4. a little higher than the 2 percent seen in fiscal 2009. though some expected revival in Advances (Rs. notwithstanding the increase of 28 percent in markup expenses.642 million from Rs. while the profit after tax registered a growth of 187 percent during 2009. The Government is faced with considerable pressure to increase social sector spending and build infrastructure. The contraction in imports was a result of restrained demand.an increase of 256 percent. may possibly contain the improvement going forward. in million) 3. While average Consumer Price Index (CPI) inflation is projected to decelerate. the current account deficit is likely to improve further in the current fiscal relative to the previous year. The scale and speed of the decline in inflation suggest that the tight monetary policy and sharply constrained monetization of the fiscal deficit have eased excess demand pressures that had adversely impacted the economy in the previous years.859 2006 import demand from manufacturing.9% 254 2.56 billion.Annual Report | 2009 Pakistan was able to rebuild its foreign exchange reserves. and taxation) for 2009 stood at Rs. The net private sector credit growth remained subdued and the riskaverse behavior of banks allowed the government to finance its spending from the banking system.843 2005 2.53 billion).4% Total Assets (Rs. in billion) 129 CAGR 14. These challenges suggest the need to work urgently towards broadening the tax base to provide needed essential services and public goods. It was primarily the combination of tight liquidity and risks of a re-emergence of inflationary pressures that led to a measured and gradual easing of monetary policy.3 percent. in billion) CAGR 18. Operating Results of the Bank Askari Bank’s operating profit (before provisions / impairment against nonperforming assets.9% 206 83 119 132 143 168 2009 2004 2005 2006 2007 2008 2009 2004 70 2005 86 2006 99 2007 101 2008 Profit before tax (Rs. at the same time.1. 4. These measures were supported by substantial moderation in demand pressures. the weak economy constrains its ability to raise revenues from an unchanged tax base. and a fall in international commodity prices. SBP reduced the policy rate by 150 bps in two rounds.

The aggregate provisions covered 71 percent of the NPLs as against the coverage ratio of 94 percent in 2008 – the dilution in coverage being due to the recognition of the aforesaid FSV benefit as allowed by the SBP. gross advances increased rather slowly by 6 percent.3 20. non-fund income declined by 6 percent over last year. 2009.6 48.6 19. 2.Earning (Percent) 5. 2009. nonperforming loans & advances (NPLs) stood at Rs. 168 billion at the end of 2008.1 to the financial statements (2008: note 10. Asset Mix .4 4. On the asset side. was the main reason for an increase in mark-up based income by 20 percent over 2008. 12. 2009 from Rs. in line with slowdown in private sector credit growth. 2009 against Rs. The aggregate increase of 23 percent in total mark up income reduced to 17 percent in terms of aggregate net interest income. 11. Also the Bank continued to exercise effective risk management and remained watchful of the impacts on capital adequacy.5 9. During the year 2009.6 2. and due to subdued economic activities during the period under review. reflecting an increase of 14 percent over 2008. 2008. an increase of 52 percent due to mainly new classifications. 148 billion as of December 31.73 billion against Rs. besides overall increase due to inflation. the cumulative provision against non-performing advances stood at Rs. customer deposits had reached Rs. to Rs. As of December 31. 140 billion last year. These have been appropriately provided for in compliance with relevant Prudential Regulations (PR) of the SBP.36 percent. 32 billion as on December 31.1). The aggregate investment portfolio stood at Rs. 36 billion on December 31.59 billion. the provision charge / write-off for the year declined by 43 percent compared to the last year.01 percent as of December 31.6 5. The ratio of nonperforming advances as a percentage of total advances increased to 12. 17. 2009. 2008 – an increase of 88 percent.cost bearing (Percent) 2. largely due to the benefit of forced sale values (FSV) in terms of the SBP. Both local and foreign currency deposits grew almost at the same rate i. despite rising NPLs and corresponding profit suspension representing around 14 percent of mark-up revenue from advances.) At the close of 2009. However. 206 billion from Rs. against the previous year’s 8. The increase in advances backed by a rise in yields.8 9. 23 percent . mainly due to a decline in income from dealing in foreign currencies.69 billion as of December 31.local currency deposits increased to Rs.6 8.4 3. while foreign currency deposits stood at Rs.1 Advances Federal government securities Cash and balances with treasury banks Equity and debt instruments Money market funds Saving deposits Current accounts Repo and other borrowings Fixed deposits Sub-ordinated loans Refinance borrowing from SBP Corporate sector SMEs sector Agricultural sector Consumer sector (Other than staff loans) Commodity financing Staff loans page | 54 . 174 billion from Rs.5.9 Advances by segment (Percent) 3.3 9. 2 & 10 of 2009 which amounted to Rs. reflecting effects of greater increase in mark-up expense compared to mark up income.4.2 69.3 Liability Mix . Consequent upon increase in NPLs and their further downgrade.Askari Bank Limited | Corporate Directors’ Report (cont.3 57.3 20.81 billion as disclosed in note 10. Administrative expenses increased by 19 percent over the previous year owing to an increase in branch network and the resultant increase in staff. 142 billion as of December 31. 67 billion as on December 31. This reflected the Bank’s focus on risk profiling of assets and correspondingly mark-up income on investments recording an increase of 46 percent over 2008. 2008. The highest categories of classification encompass most of the NPLs – 76 percent in ‘loss’ and 20 percent in ‘doubtful’. an increase of 23 percent during the year. BSD circulars No.e.

8 0. commercial and industrial properties (land & building only) – (2008: benefit of industrial properties not available) held as collateral against non-performing advances allowed under BSD Circular No.24 billion (2008: Rs. an amount of Rs. The appropriation of capital reserve (reserve for issue of bonus shares). the ratio worked out after taking into account the number of shares issued during 2009. In terms of the SBP BSD Circular No. as required by the SBP BSD Circular No.6 13. Reserves to that extent are not available for payment of cash or stock dividend in terms of above referred circular.4 14. Appropriations The Board of Directors recommends the following appropriations from profits for the year ended December 31.071. beverages & tobacco Fuel.3 11.9 30.3 0. 0.9 10. The improvement is due primarily to reduction in provision / write-off against NPLs during the year 2009.071. 2009. energy & engineering Individuals Leather products & shoes 13.7 9. beverages & tobacco Fuel.107.9 3.240 Transfer from general reserve to reserve for issue of bonus shares of pledged stocks and mortgaged residential. 446 million) of the benefit of 40 percent (2008: 30 percent) of forced sale value Advances by sector (Percent) 3.559) (886. 6 billion. 2.76. 285 million was charged to profit and loss account during 2009.0 2004 2005 2006 2007 2008 2009 page | 55 2. 07 dated April 14.8 15. 4 dated February 13. Reserves as at December 31.6 4. 146 million was recognized as impairment on the investment portfolio. an amount of Rs.1 0. 1.0 0.2 19.8 NPL by sector (Percent) 0.9 Miscellaneous Synthetic & rayon Textile Transport 1.107. 2009 as disclosed in audited financial statements for the year ended December 31.2 . 2009 include Rs. against the previous year’s Re.8 0.14. energy & engineering Individuals Leather products & shoes Miscellaneous Textile 14. amounting to Rs. the impairment loss amounting to Rs.7 0. 2009: Rupees in thousands Un appropriated profit for the year 2009 Appropriations: Statutory reserve General reserve 1.7 22. 2008. 2009 was Rs.240 thousand will enable the Bank to meet the enhanced Minimum paid-up Capital Requirement (MCR) of Rs. had to be taken to profit and loss on a quarterly basis.1 Earnings per share (Rupees) 20. 441 million shown under equity. note 9.1 above. Additionally. subject to adjustment for or effect of price movements.0 22.234) (1. 2009 as referred to in note 10.5.2 8.Annual Report | 2009 Earnings per share The earnings per share for the year ended December 31.793) – 1.8 Agri business Cement & construction Chemical & pharmaceutical Financial institutions Food. 10 of 2009 dated October 20.793 (221. Accordingly.1 6. 2. continuing with the impairment policy followed by the Bank.18.3 Agri business Cement & construction Chemical & pharmaceutical Food.

the Bank has also initiated an exercise with the objective of aligning new softwares’ capabilities with business and operations for optimal utilization of the core banking software. Oracle Financial. PeopleSoft. We wish to apprise you that most of the tasks relating to organizational restructuring have been completed.Askari Bank Limited | Corporate Directors’ Report (cont. including development and the implementation of Performance Management System (PMS). process efficiencies. these softwares are also planned to ‘go-live’ during 2010. adding to the two training academies already operating in Rawaplindi and Lahore. The benefits that are expected from complete implementation of these softwares include an improvement in Bank’s service and delivery alongwith an improvement in the internal control environment. above all. the Bank’s focus remains on employee development coupled with improving the ambience through regular reviews and refinements of processes and the work environment. and. a PMS based on well-defined goals and responsibilities was made effective with the new performance appraisal system during the annual employee appraisal exercise.. finalization of the organogram of the Bank as well as of each business / operating unit. and improvement in our products and customer service standards. Similarly. During the year 2009. Your Bank realizes the importance of the project as it is the most ambitious activity. This enabled the Bank to conduct a record number of 456 courses. Siebel. During the year. Rollout to all other branches is scheduled for completion by end 2011.) Human Resource Management Human capital of the Bank is given the highest value in the aim to achieve our mission of being the Bank of first choice. the Bank has ever undertaken. minimization of manual work and processes. We are pleased to inform you that the implementation of these initiatives is at advanced stage – some of them near completion. and are expected to ‘go-live’ during the first quarter of 2010. Training goals were determined in light of the welldefined Training Need Assessments (TNA) procedures as envisaged in the overall strategic business plan of the Bank. Simultaneously.e. another training arm i. Two branches are currently under parallel run mode for core banking software.e. Accordingly. thereby ensuring its dynamism and robustness and keeping the spirit of its key guiding principles and policies.. training & development team of the Bank continued its pursuit for quality training to the Bank’s staff in line with the approved policy. and Reveleus are under different stages of implementation. both in terms of cost and commitment. and Siebel. workshops and skill development clinics in 2009 in the disciplines of Technology It has been stated in our earlier communications that your Bank is in the process of complete transformation of technology platform from existing systems to the most modern and state of the art system solutions. Reveleus. Oracle Financial. PeopleSoft. page | 56 . our training academy in Karachi was inaugurated. which include core banking software Oracle Financial Systems Solutions (OFSS) (previously known as Flexcube) and other peripheral systems i. and development of job description documents. For the first time during 2009.

we focused on the implementation of policies and strategies. Further. Our internal credit rating model now covers a wide array of products spread across the corporate. PeopleSoft HCM which integrates HR systems and processes and provides expanded online services for staff on HR matters was implemented. training & development. will automate many processes relating to recruitment & selection. inter alia.e. The advance modules of the system. The Bank has in place a risk management framework encompassing risk policies and limits structure. In 2009. commercial. management and communication. the Bank has adopted a holistic approach to risk management and has been engaged in extensive and detailed evaluation and assessment of its risk management framework in all areas of banking activity. and SME portfolio spectrum. and on creating an awareness that every employee is a risk manager at his workplace thus invoking the importance of his role in the overall risk structure of the Bank. and career and succession planning. obligor risk limits. risk management. corporate debt service & attitude. During the year 2009 the first phase of new Human Capital Management System (HCM) i. performance management. risk pricing.Annual Report | 2009 Risk Management Framework Your Bank fully recognizes that the risk management function is fundamental to the business of banking and is an essential element of our banking strategy. The scope of market risk reporting has been extended to include market risks in the banking book as well as in the trading book. international trade. These courses were conducted by qualified and professionally skilled faculty and industry experts. and on other diverse subjects including a series of leadership development programs for senior management staff of the Bank. IT. and risk measurement methodologies and tools. The scope of the value at risk (VaR) model is being enhanced to include. domestic banking operations. credit & finance. page | 57 . and industrysector limits have been established to mitigate concentration in any particular segment. Since the issuance of guidelines on risk management and the subsequent Institutional Risk Assessment Framework (IRAF) questionnaire by the State Bank of Pakistan (SBP). The Bank’s credit initiation and approval process has been strengthened by introducing models to cover cash collateral and SME exposure. risk infrastructure.

the management of the Bank ensures the establishment and maintenance of adequate and effective systems of internal control in compliance with external laws and regulations and consistent with the Bank’s own internal policies. during 2009. and establishing relevant control procedures. We are pleased to inform you that. loss data analysis. While the Board recognizes its responsibility as envisaged in the relevant regulations. thus making Askari Bank the first bank in Pakistan to be awarded with this prestigious certification. The management ensures the efficiency and effectiveness of the internal control system by identifying control objectives. and potentially catastrophic events on business operations. The Bank has also established a comprehensive Operational Risk Management framework based on appropriate risk management architecture. and in order to develop effective information security management systems page | 58 . the Bank has invested in enhanced physical security and has collaborated with a security agency to improve protection of branches and staff.testing approaches and is aiming at their systematic implementation. Statement on Internal Controls Internal controls contribute to effective management by both the Bank’s Board of Directors and management. During the year 2007. people. improve performance measurement. and enhance security measures. and processes. a leading global provider of independent thirdparty certification of management systems awarded your Bank ISO/ IEC 27001:2005 Certification. provide early warning of deteriorating internal control. integrity and availability of its information assets by adopting an integrated approach to information security risk management required for achieving the international certification. Significant policies and procedural manuals are already in place. devising and reviewing appropriate policies and procedures. To minimize the impact of unexpected. Policies and procedures are periodically reviewed and revised and necessary amendments and updates Information Security Information assets are viewed and valued as critical to the Bank’s business continuity and its ability to meet business objectives. The Bank has developed and deployed tools and techniques in measuring operational risk such as risk and control self assessment.) in the trading book. It is also responsible to assess the effectiveness of internal controls and report on them to the Board. ensure better control of operations. and operational key risk indicators in order to reduce operational losses. The holistic approach to market risk the Bank has adopted seeks to take into account correlations of the Bank’s performance with the money market and the stock market in order to generate unified risk metrics for the trading book as a whole.Askari Bank Limited | Corporate Directors’ Report (cont. an initiative for ISO27001 certification was undertaken in close liaison with consultants engaged for the purpose. This certification will further strengthen our relationships with foreign banks and their local correspondent banks. the Bank achieved this milestone and the British Standards Institution (BSI). enhance banker–customer relationships and build confidence amongst stakeholders. of the Bank in strict compliance with the international standards of confidentiality. The framework assesses and measures the operational risk arising from our systems. The Bank has developed new stress.

Annual Report | 2009 Our efforts aim at improving all aspects of customer experience a bit better every day page | 59 .

the Bank strived to ensure that an effective and efficient internal control system is implemented. A complete revamp of its existing IT platform is one of the major moves in this direction.75 percent provides sufficient room for further improvement in risk assets necessary for further growth of the Bank. In accordance with this program. the Bank intends to develop detailed remediation plans to address the gaps identified and to ensure implementation of initiatives to remove the gaps in a timely manner. as envisaged under the SBP Internal Control Guidelines. together with a comprehensive gap analysis of the control design. and identifying areas requiring improvement and devising appropriate remedial action on a timely basis. and increased awareness of the concept of risk adjusted return amongst the risk takers. Entity Ratings Long term AA Short term A1+ by PACRA Credit Rating A bank’s credit rating reflects its ability to protect its relative standing in the sector by competing effectively in the steadily increasing competitive environment in the banking sector and assumes its ability to take all measures necessary for the purpose. Preparation of new policies and manuals is in progress.Askari Bank Limited | Corporate Directors’ Report (cont. The Bank is in the process of adopting an internationally accepted COSO Internal Control Integrated Framework. The internal control system in the Bank is designed to minimize the risk of failure and to keep such failure within tolerable limits as these cannot be eliminated completely. the management has put in place a well-conceived strategy to improve the Bank’s performance and ensuring its strong standing within the sector including. the requirement of raising the paid-up capital of the Bank was eased by the SBP i. The Board wishes to assure you that we are fully cognizant of all related . 23 billion to Rs. evaluation. Askari Bank has been assigned the long term rating of ‘AA’ and short term rating of ‘A1+’ by the Pakistan Credit Rating Agency (Pvt) Limited (PACRA). The work under these two stages is being reviewed by the Bank’s external auditors under the SBP internal control guidelines. page | 60 During the year 2009. According to PACRA “these ratings reflect sustained ability of revenue growth from core operations while maintaining a low risk profile and also dynamic as well as efficient fund deployment strategy. the Bank is well positioned to maintain its competitive edge despite an increasingly competitive operation environment. Only reasonable and not absolute assurance can be provided against material misstatement or loss. The ratio of our CAR at the current enhanced level of 11. 2009. Going forward. strengthening of control environment.. aggressive risk profiling of assets. against the SBP’s minimum requirement of 10 percent (2008: 9 percent). from the previous requirement of Rs. The management is also cognizant of its responsibility of putting a system in place for the authentication of transactions. However. Taking note of the fast changing banking dynamics. that no material compromise is made in implementing the desired control procedures.) introduced. We are confident of meeting the requirement comfortably. and. an un-secured subordinated loan in the form of Term Finance Certificates (TFC) -III amounting to Rs. which the Bank actively and vigilantly pursues. In addition.e. your Bank’s capital adequacy ratio (CAR) stood at a comfortable 11. and strengthening its risk management framework.75 percent against 9. that a suitable environment is maintained in general.” Capital Adequacy As of December 31. and management of significant risks is an ongoing process.. which include issue of Tier II capital i. given the strong technological platform and enhanced geographical outreach. 2013 (an addition of Rs. The Bank has devised a well-defined and comprehensive internal control program roadmap with specified stages as suggested by the SBP. The ratings reflect the Bank’s strong capital structure supported by sound profitability. 10 billion to be achieved in phased manner by December 31. The improvement in CAR is the result of the number of measures taken by the Bank during 2009. as detailed earlier. comprehensive management testing plans and framework are also planned to be developed for ensuring on-going operating effectiveness of key controls. Going forward. 3 billion.22 percent at the end of 2008. 1 billion per year). the process of identification. During the year 2009.e. the Bank is in the advanced stages of completing a detailed documentation of the existing processes and controls.

size Rs.81 million (2008: Pre-IPO). AIML operates five open-end funds. size Rs. training in Islamic banking is given great importance: most of the staff in Islamic banking is now fully conversant with the philosophy of Islamic banking and the Islamic banking products being offered by the Bank. During the year. the Bank’s Islamic Banking Services Division (IBSD) has performed well during the period under review. and employees. size Rs. 3. 2007. including Islamic corporate banking. We are confident that Islamic Banking will continue to maintain its rate of growth in order to deliver balanced returns for its shareholders.25 million (2008: Pre-IPO) and 5) Askari Sovereign Cash Fund. Given the current economic conditions. your bank opened 26 new branches including 11 Islamic banking branches. Islamic investment banking. 1. 2. and shared. Islamic Banking Islamic banking outreach was enhanced significantly in 2009 to a total of 31 Islamic Banking Branches (IBBs) (including 2 sub-branches) in 15 major cities of the country. However..35 million (2008: Nil). size Rs.46 billion). Islamic trade finance. 4) Askari Islamic Asset Allocation Fund. Islamic banking operations of the Bank are now amongst the top players in its peer group i. by adding 11 IBBs: 10 new ones and conversion of a conventional banking branch.10 billion (2008: Rs. Askari Investment Management Limited Askari Investment Management Limited (AIML) is the first subsidiary of the Bank and is regulated under the Non-Banking Finance Companies (NBFC) Rules 2003 and Notified Entities Regulation. We expect to reap the benefits of our growth strategy and show continued improvement in all Shariah compliant areas of business. and licensed by the Securities and Exchange Commission of Pakistan (SECP). The primary business of AIML is to launch and manage mutual funds investments. All funds obtained.095. By the Grace of Allah. 111. In line with Shariah requirements. Through this branch network. the Bank ensures that the funds and products of Islamic banking are explicitly managed without any intermingle with the conventional banking business. 13 conventional banks with separate stand-alone Islamic Banking branches. Branch Network Your Bank is fully aware that its branch network has direct implications on the services that it provides to its valued customers. 4 conventional banking branches. and 11 sub-branches and converted a conventional banking branch to the Islamic mode. invested. and Islamic consumer banking. 1) Askari Income Fund (AIF). size Rs. we are able to offer our wide range of products and services to our valued customers. AIML also offers advisory services to institutional clients. 3) Askari Islamic Income Fund. We now offer services through a network of 226 branches. are in Shariah compliant modes of investments. 250 million). Despite a late start. Future expansion will be gradual and incremental. 196. our Bank would emphasize on the consolidation of recent expansion and operations. To ensure the operation of Islamic banking products in letter and spirit. depositors. and that all measures will continue to be taken to keep the Bank’s position sound and in fact acquiring further strength.e. 253 million (2008:Rs. Islamic general banking. A range of Islamic banking products and services are being offered by the Bank in order to meet the customers’ demand for Shariah compliant banking. including a wholesale bank branch in Bahrain.Annual Report | 2009 developments. page | 61 . 2) Askari Asset Allocation Fund.

as are other systems and procedures. Attendance by each Director was as follows: 8 8 3 8 7 8 6 5 5 4 8 • Lt. • Key operating data and financial data for the last ten years. 337..Askari Bank Limited | Corporate Directors’ Report (cont. R. Mehkari President & Chief Executive • • Auditors The Auditors. 2009 are included in this report. ASL is an incorporated public limited company and a corporate member of Islamabad Stock Exchange (Guarantee) Limited. Tariq Iqbal Khan Mr. M/s A. Proper books of accounts of the Bank have been maintained. 2009. duties. This vigilance will continue and identified weakness in controls will be remedied expeditiously. have been followed in preparation of these financial statements. 2009 are included in this report. Zafar Alam Khan Sumbal Mr. Shahid Mahmud Mr. are included in this Annual Report. Gen. With improving investor confidence evident at the bourses. prepared by the management of the Bank. changes in equity and cash flows.31 million. Gen. eight meetings of the Board of Directors were held. 2009 is included in this report. Gen. Muhammad Riyazul Haque Mr.68 million) Gratuity Fund Rs. M. 2009: – Provident Fund Rs.F. We are thankful for their recognitions of our work by esteemed professional organizations. Bashir Ahmad Khan Mr. Chartered Accounts have completed their assignment for the year ended December 31.(R) Imtiaz Hussain Maj. as applicable to banking companies in Pakistan. 936. • • • – • During 2009. the Annual Report of the Bank for the year 2008 won: • the first prize of “The Best Annual Report” for the financial sector. Ali Noormahomad Rattansey Dr. engaged principally in share brokerage. present fairly its state of affairs. The Board of Directors is satisfied with the Bank’s ability to continue as a going concern. an APEC body of the SAARC region. The performance of ASL during 2009 showed a marked improvement over the previous year. based on un-audited financial statements (2008: Rs. Kashif Mateen Ansari (Resigned) Awards and Recognition During the year. The current system of internal control is under constant review by the internal audit department. the results of its operations. 498. Accounting policies have been consistently applied in preparation of these financial statements except as stated in the notes to the financial statements and accounting estimates are based on reasonable and prudent judgment. we believe that it will show better results in the following years. except as disclosed in these financial statements. International Accounting Standards. 35 of the Karachi Stock Exchange (Guarantee) Limited. There have been no material departures from the best practices of corporate governance as detailed in the Listing Regulation No. 2009 and shall retire at the conclusion of the 18th Annual General Meeting.12 million ) Askari Securities Limited The Bank has controlling interest of Askari Securities Limited (ASL) by virtue of acquiring 74 percent shares of ASL. The following is the value of investment as at December 31. • • Mr. the merit award for the South Asia Federation of Accountants. Ferguson & Co. instituted jointly by The Institute of Chartered Accountants of Pakistan and The Institute of Cost and Management Accountants of Pakistan. There are no statutory payments on account of taxes.) Pattern of Shareholding The pattern of shareholding at the close of December 31.69 million. Javed Zia (Chairman) Lt. in summarized form.446. Consolidated financial statements of the Bank and ASL for the year ended December 31. • Corporate and Financial Reporting Framework • The Bank’s financial statements. Consolidated financial statements of the Bank and AIML for the year ended December 31. levies and charges which are outstanding as of December 31. based on un-audited financial statements (2008: Rs. page | 62 . and investment advisory and consultancy services. 1. (R) Saeed Ahmed Khan Mr.

for their professionalism and value added contributions to the Bank throughout their audit term of five years. Consequently. There have not been any material events that occurred subsequent to the date of the Statement of Financial Position that require adjustments to the enclosed financial statements. Within the Pakistani banking sector the rising trend of NPLs is a major cause of concern. The final approval by the State Bank of Pakistan has been received vide letter No..273 million shares of the Bank to the shareholders of ALL. the Bank shall issue 28. remains a hindrance to our growth potential. On behalf of the Board. The effective date of amalgamation will be March 3. Chartered Accounts shall also be completing their maximum permissible term of five years thus will not be eligible for reappointment. We profoundly value their work with us. 2009 respectively and has also been subsequently approved by the Competition Commission of Pakistan and the Securities and Exchange Commission of Pakistan. 2010 Lt Gen Javed Zia Chairman Board of Directors page | 63 . 2010 as per decision of the management of both entities. For & on behalf of the Board Rawalpindi February 23. 1962 has been approved by the shareholders of both companies in the Extra Ordinary General Meetings (EOGMs) of the Bank and ALL held on December 21. Prospects for 2010 The key challenge for Pakistan’s economy and policy makers is to ensure consolidation of the economic stability through continued fiscal restraints and improvement in the tax to GDP ratio.Annual Report | 2009 M/s A. control of the inflationary pressures. Events after the balance sheet date During the year. and to the employees of the Bank for their continued dedication and hard work. Continued weakness in world economic growth. BPRD (R&P-02)/62599/2010/1256 dated February 18. I like to express my sincere appreciation to the State Bank of Pakistan and other regulatory bodies for their guidance and support. particularly in the economies of Acknowledgments On behalf of the Board of the Bank. There are no easy answers. to the shareholders and customers of the Bank for their patronage and business. 2009 and December 22.F. whereby the scheme of amalgamation is effective within 30 days from the date of approval. Ferguson & Co. and. resolution of the power/electricity crisis. 2010 would therefore be a year of consolidation and economic stabilization. The scheme of amalgamation under section 48 of the Banking Companies Ordinance. enhancing the competitiveness of our exports.. Given the challenges on hand. Upon recommendation of the Audit Committee. the major trading partners of Pakistan. last but not the least. the Bank initiated the process of amalgamation of Askari Leasing Limited (ALL) with and into the Bank. the Board recommends appointment of M/s KPMG Taseer Hadi & Co. as the auditors for the year 2010. I will like to thank the engagement and review partners and other members of the audit team of M/s A F Ferguson & Co. 2010. The main risks to the economy stem from the uncertainty on the security situation and the war on terror. Chartered Accountants.

Askari Bank Limited | Corporate Combining knowledge with skill that contributes value for each customer page | 64 .

Annual Report | 2009 Financial Highlights 2009 For the year ended December 31. 2009 Financial Statements of page | 65 . 2009 Askari Bank Limited For the year ended December 31.

Askari Bank Limited | Financial Statements This page is intentially left blank page | 66 .

Written notices of the Board meetings. During the year one casual vacancy occurred on the Board. 2009 This statement is being presented to comply with the Prudential Regulation No. A complete record of particulars of significant policies along with the dates on which these were approved or amended has been maintained. have been taken by the Board. At present the Board includes 5 non-executive Directors of which 2 independent Directors represent minority shareholders. 11. were circulated at least seven days before the meetings. except Mr Tariq Iqbal Khan who has been exempted for the purpose of this clause by the Securities and Exchange Commission of Pakistan (SECP). 3. 2002 and the Code of Corporate Governance (the Code) as contained in Listing Regulations of the stock exchanges where the Bank’s shares are listed for the purpose of establishing a framework of good governance. a DFI or an NBFI or. The Bank has prepared a statement of ethics and business practices. which has been signed by all the Directors and employees of the Bank. 13. 9.15.XXIX. overall corporate strategy and significant policies of the Bank. as determined by the Chief Executive Officer. The meetings of the Board were presided over by the Chairman and the Board met at least once in every quarter. 6. responsibilities of the Board of Directors. Chief Executive Officer and executives do not hold any interest in the shares of the Bank other than that disclosed in the pattern of shareholding. All Directors are resident and registered as taxpayers and none of them has defaulted in payment of any loan to a banking company. 12. The Bank has applied the principles contained in the Code in the following manner: 1. The Bank encourages representation of independent non-executive directors and directors representing minority interests on its Board of Directors. however. The minutes of the meetings were appropriately recorded and circulated. The financial statements of the Bank were duly endorsed by the Chief Executive Officer and the Chief Financial Officer before approval of the Board. along with agenda and working papers. including his remuneration and terms and conditions of employment. 14. The Directors have confirmed that none of them is serving as a director in more than ten listed companies. 8. The Board members participated in an orientation course to apprise them of their duties and responsibilities. 10. whereby a listed company is managed in compliance with the best practices of corporate governance. page | 67 . 7. 5. 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. The Board has developed a vision / mission statement. The Bank has complied with all the corporate and financial reporting requirements of the Code. dated June 13. being a member of a stock exchange. appointment of Head of Internal Audit is in process. has been declared as defaulter by that stock exchange. which was filled within the prescribed period. including appointment and determination of remuneration and terms and conditions of employment of the Chief Executive Officer. 2.Annual Report | 2009 Statement of Compliance With the Code of Corporate Governance for the year ended December 31. The Board has approved appointment of Company Secretary. including Askari Bank Limited. The Directors. All the powers of the Board have been duly exercised and decisions on material transactions. issued vide BSD Circular No. 4.

Askari Bank Limited | Financial Statements 15. 18. All material information required under the relevant rules have been provided to the stock exchanges and to the Securities & Exchange Commission of Pakistan within the prescribed time limit. 17. All members are non-executive Directors including the Chairman of the Committee. The statutory auditors or the persons associated with them have not been appointed 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. 20. The statutory auditors of the Bank have confirmed that they have been given a satisfactory rating under the quality control review program of the Institute of Chartered Accountants of Pakistan. The Board has formed an Audit Committee. The Board has set-up an effective internal audit function on a full time basis. 22. For and on behalf of the Board 19. The terms of reference of the Committee were fully complied with. 16. Rawalpindi February 23. Javed Zia Chairman page | 68 . that they or any of the partners of the firm. 21. 2010 Lt. All related party transactions entered during the year were at arm’s length basis and these have been placed before the Audit Committee and the Board of Directors. These transactions are duly reviewed and approved by the Audit Committee and Board of Directors. as adopted by the Institute of Chartered Accountants of Pakistan. The meetings of the Audit Committee were held in every quarter prior to approval of interim and final results of the Bank as required by the Code. We confirm that all other material principles contained in the Code have been complied with. Gen. their spouses and minor children do not hold shares of the Bank and that the firm and all its partners are in compliance with International Federation of Accountants (IFAC) guidelines on code of ethics. It comprises of 3 members.

in all material respects. 35 of Karachi. where the Bank is listed. Lahore and Islamabad Stock Exchanges. We are only required and have ensured compliance of requirement to the extent of approval of related party transactions by the Board of Directors and placement of such transactions before the Audit Committee. to the extent where such compliance can be objectively verified. 2002. Our responsibility is to review. We have not carried out any procedure to determine whether the related party transactions were undertaken at arm’s length price or not. Further.F. 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. 2009 requires the Bank to place before the Board of Directors for their consideration and approval related party transactions. nothing has come to our attention which causes us to believe that the Statement of Compliance does not appropriately reflect the Bank’s compliance. 15 dated June 13. Based on our review. Chartered Accountants page | 69 . XXIX. Islamabad February 23. Responsibilities of Board of Directors issued vide BSD Circular No. Ferguson & Co. A review is limited primarily to inquiries of the Bank’s personnel and review of various documents prepared by the Bank to comply with the Code.Annual Report | 2009 Review Report to the Members On Statement of Compliance with Best Practices of Code of Corporate Governance We have reviewed the Statement of Compliance with best practices contained in the Code of Corporate Governance prepared by the Board of Directors of Askari Bank Limited (the Bank) to comply with Prudential Regulation No. Listing Regulation No. Further. as applicable to the Bank for the year ended December 31. 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. all such transactions are also required to be separately placed before the Audit Committee. Sub-Regulation (xiii a) of Listing Regulation 35 notified by the Karachi Stock Exchange (Guarantee) Limited vide circular KSE / N-269 dated January 19. Haider Abbas A. 2009 with the best practices contained in the Code of Corporate Governance. 2010 Name of engagement partner: S. distinguishing between transactions carried out on terms equivalent to those that prevail in arm’s length transactions and transactions which are not executed at arm’s length price recording proper justification for using such alternative pricing mechanism. As part of our audit of financial statements 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. The responsibility for compliance with the Code of Corporate Governance is that of the Board of Directors of the Bank.

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. proper books of account have been kept by the Bank as required by the Companies Ordinance. page | 70 . 1984 (XLVII of 1984). 1962 (LVII of 1962) and the Companies Ordinance. statement of changes in equity and cash flow statement. for the year then ended. evaluating the overall presentation of the financial statements. 1984 (XLVII of 1984). 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. together with the notes forming part thereof (here-in-after referred to as the financial statements). An audit also includes assessing accounting policies and significant estimates made by management. We believe that our audit provides a reasonable basis for our opinion and after due verification. and the business conducted. ii) iii) the expenditure incurred during the year was for the purpose of the Bank’s business. 2009 and the related profit and loss account. and are in agreement with the books of account and are further in accordance with accounting policies consistently applied. 1984 (XLVII of 1984) and the returns referred to above received from the branches have been found adequate for the purposes of our audit. b) in our opinion: i) the statement of financial position and profit and loss account together with the notes thereon have been drawn up in conformity with the Banking Companies Ordinance. It is the responsibility of the Bank’s Board of Directors to establish and maintain a system of internal control and prepare and present the financial statements in conformity with approved accounting standards and the requirements of the Banking Companies Ordinance. We conducted our audit in accordance with the International Standards on Auditing as applicable in Pakistan. An audit includes examining. as well as. 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. on a test basis. 1962 (LVII of 1962) and the Companies Ordinance. evidence supporting amounts and disclosures in the financial statements. were necessary for the purposes of our audit.Askari Bank Limited | Financial Statements Auditors’ Report to the Members We have audited the annexed Statement of Financial Position of Askari Bank Limited (the Bank) as at December 31. we report that: a) in our opinion. in which are incorporated the unaudited certified returns from the branches except for 20 branches which have been audited by us and 1 branch audited by auditors abroad and we state that we have obtained all the information and explanations which. Our responsibility is to express an opinion on these statements based on our audit.

2010 Name of engagement partner: S. Islamabad February 23. and the Companies Ordinance. 1984 (XLVII of 1984). Haider Abbas A. and d) in our opinion. was deducted by the Bank and deposited in the Central Zakat Fund established under Section 7 of that Ordinance. in the manner so required and respectively give a true and fair view of the state of the Bank’s affairs as at December 31. 1980 (XVIII of 1980).Annual Report | 2009 c) in our opinion and to the best of our information and according to the explanations given to us the statement of financial position. profit and loss account. statement of changes in equity and cash flow statement together with the notes forming part thereof conform with approved accounting standards as applicable in Pakistan and give the information required by the Banking Companies Ordinance.F. its changes in equity and cash flows for the year then ended. Ferguson & Co. Zakat deductible at source under the Zakat and Ushr Ordinance. Chartered Accountants page | 71 . 2009 and its true balance of the profit. 1962 (LVII of 1962).

635 3. 2009 Rupees in ‘000 Notes 2009 2008 Assets Cash and balances with treasury banks Balances with other banks Lendings to financial institutions Investments Advances Operating 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 .378.073.499 9.046.572 2.774 7.100 – 12.677.954.374 14.467 7.614.219.489 239.970.182.754 35.385.327.945.818.261 4.971.072 Contingencies and commitments 22 4.843 8.148 167.949.446 16.440 – 10.141 308.300.833.480 206.676. Javed Zia Chairman page | 72 .234 13.755 128.775 12.384 14.994.227 5.458 – 8. Mehkari Ali Noormahomed Rattansey Director Lt.311 254.895 936.363 13 14 15 16 17 18 2.479.034.029.987 886.059 67.266.Askari Bank Limited | Financial Statements Statement of Financial Position As at December 31.670 19.036.072 2.971.814 4.058.667.759.949.987 4.142. Gen.140 193.925 4.033 135.964.806.190.242 8.138 21 The annexed notes 1 to 48 form an integral part of these financial statements. (R) Imtiaz Hussain Director Lt.980 12. Gen.net of tax 19 20 5. President & Chief Executive M.363 6 7 8 9 10 11 12 19.996.846.364.828 15.191.468 12.900 – 333. R.584.688 1.034.163 205.

President & Chief Executive M.030.156 2.699 162.765 1.144. Javed Zia Chairman page | 73 .Annual Report | 2009 Profit and Loss Account For the year ended December 31. (R) Imtiaz Hussain Director Lt.096 9.995.621 873.393.416.net Unrealised (loss) / gain on revaluation of investments classified as held for trading .594 3.615 461.997 1.773 2.674 – 2.Rupees 32 534.893 6.313 10.307.701 8.824.827 (147.650.597 3.794 75.000) 107.915.18 The annexed notes 1 to 48 form an integral part of these financial statements.225 1.324.5 9.537 538.642.376.1 8 22.717 (1.478) 31 Profit after taxation Unappropriated profit brought forward Profit available for appropriation Basic / diluted earnings per share .531.445 143. Gen.032.778 – 508 – 247.382 17.904.980 1.584 173.225 2.707.743 22.914.669.117.629.658 2.241 – 1.76 27 28 29 30 6.987 5.857 – 34.257.661.742.2.466 18. Gen. Mehkari Ali Noormahomed Rattansey Director Lt.311 4.382 – 461.793 308.672. 2009 Rupees in ‘000 Notes 2009 2008 Mark-up / return / interest earned Mark-up / return / interest expensed Net mark-up / interest income Provision against non-performing loans and advances Impairment loss on available for sale investments Provision for impairment in the value of investments Provision against reverse repo Bad debts written off directly Net mark-up / interest income after provisions Non mark-up / interest income Fee.363 (50. commission and brokerage income Dividend income Income from dealing in foreign currencies Gain on sale of investments .072. R.099 119.377 431.784 82.754 13.net Other income Total non-markup / interest income Non mark-up / interest expenses Administrative expenses Other provisions / write offs Other charges Total non-markup / interest expenses Extra ordinary / unusual items Profit before taxation Taxation – current – prior years’ – deferred 25 26 10.058 76.810 2.642.719 7.384 343.997 5.918) 404.554.512 36.448 1.107.035 0.221 2.368 7.241 562.157 386.000 6.169 459 10.

245 – – 641.467 – 3.275) 308. Javed Zia Chairman page | 74 .052. 2007 Balance as at January 1. 2008 Net profit for the year ended December 31.245) (641.134.234 – 13.034. R.980) – – 1.560 (77.980 (221.980 1. 2008 Transfer to: Statutory reserve General reserve Final dividend .430 – (1.112.754.870 – 2.793 – – 221.107.499 – 2.058.144.466 – 4.693) 4.835.717 – 886.774 – – 2. 2009 Capital Reserve Rupees in ‘000 Share Capital Statutory Reserve Revenue Reserves General Reserve Un-appropriated profit Total Balance as at January 1.006.810 386. 2009 Transfer to: Statutory reserve General reserve Bonus shares declared / issued subsequent to year ended December 31. (R) Imtiaz Hussain Director Lt. 2008 Balance as at December 31.052.711 – – 4.073.645 386. President & Chief Executive M. 2009 3.559) (308.688 The annexed notes 1 to 48 form an integral part of these financial statements. Mehkari Ali Noormahomed Rattansey Director Lt.975) (450.014.225 12.693 5. 2007 declared subsequent to year end Bonus shares declared / issued subsequent to year ended December 31. Gen.975) 1.Askari Bank Limited | Financial Statements Statement of Changes in Equity For the year ended December 31.099.275 4.for the year ended December 31.225 – – 77.560) – – – – – (450.793 – 12.107.014.912.142. Gen.895 1.270 (1. 2009 Net profit for the year ended December 31.048.559 – – 308.

324.305.761 511.843.451 (1.655 20. President & Chief Executive M.814 (Increase) / decrease in operating assets Lendings to financial institutions Held for trading securities Advances Other assets (excluding advance taxation) Increase / (decrease) in operating liabilities Bills payable Borrowings Deposits and other accounts Other liabilities (excluding current taxation) Cash flow before tax Income tax paid Net cash flow from operating activities Cash flow from investing activities Net investments in available-for-sale securities Net investments in held-to-maturity securities Net investments in subsidiaries/ associate Dividend income Investments in operating fixed assets .634) (1.659.479.604) 2. (R) Imtiaz Hussain Director Lt.200) (444.958 2.850.477.942) 360.839.169) (2.130 461.382 (173.306.800 (825) 2.902) 48.704 645.293. Mehkari Ali Noormahomed Rattansey Director Lt.778 508 – 247.363.223) (2. 2009 Rupees in ‘000 Note 2009 2008 Cash flow from operating activities Profit before taxation Less: Dividend income Adjustments: Depreciation Provision against non-performing advances (net) Provision for impairment in the value of investments Provision against reverse repo Bad debts written of directly Net (profit) / loss on sale of operating fixed assets Provision against other assets 1.346 (8.869 9.599) 13.639.530 (32.038 3.480.998.809) (25.842 4.875.767.588.063 3.997.642.824.773 23.disposed off Net cash flow (used in) / from investing activities Cash flow from financing activities Receipt / (Payments) of sub-ordinated loans Dividends paid Net cash flow from / (used in) financing activities Increase / (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of the year Cash and cash equivalents at end of the year 33 33 2.381 (791.989 459 4.216.686 37.162.Annual Report | 2009 Cash Flow Statement For the year ended December 31.621) 287.448 – 154.428) 36.655 75.979) 42.110.353.059) (42.409.241 (162.235.139.683) – 3.532.126.596) (72.449 27.340 18.596.524) 1. R.848 (884.784 82.975 7.110.537) 1.389 310. Gen.109 20.110 4.015 38.015.377 76.605.450) 2.501.563 The annexed notes 1 to 48 form an integral part of these financial statements. Javed Zia Chairman page | 75 .285) 2.452 (617.377) 24.976 155.659.342 (32.139.311 3.net of adjustment Sale proceeds of operating fixed assets .257.675) (10.108 4.404) (445.108.883 (2. Gen.104 (1.000) 162.174 42.540.190.558 (730.674 – (3.865 1.449 (31.

The Bank has 226 branches (2008: 200 branches). In case requirements differ. 225 in Pakistan and Azad Jammu and Kashmir. amendments and interpretations to published standards are mandatory for accounting periods beginning on or after January 1. IAS 20 IAS 23 IAS 29 IAS 31 IAS 32 IAS 41 IFRS 5 IFRS 7 IFRIC 15 Accounting for government grants and disclosure of government assistance Borrowing costs Financial reporting in hyperinflationary economies Interest in joint ventures Financial instruments: Presentation – Amendments relating to puttable instruments and obligations arising on liquidation Agriculture Non-current assets held-for-sale and discontinued operations Financial Instruments: Disclosures Agreements for the construction of real estates 3. including 31 (2008: 18) Islamic Banking branches. “Financial Instruments: Recognition and Measurement”. the State Bank of Pakistan (SBP) has issued a number of circulars. International Accounting Standard 40. Accordingly. after eliminating material inter-branch transactions / balances. 1984 and the Banking Companies Ordinance. 2. Since there are no other components of other comprehensive income that were recognised in equity therefore the Statement of Other Comprehensive Income has not been prepared. STATUS AND NATURE OF BUSINESS Askari Bank Limited (the Bank) was incorporated in Pakistan on October 09. the requirements of these Standards have not been considered in the preparation of these financial statements. 2009. page | 76 . 2006 and have been classified in accordance with the requirements of BSD Circular No. 1984 and the Banking Companies Ordinance. International Accounting Standard 39. In accordance with the directives of the Federal Government regarding shifting of the banking system to Islamic modes. 2009 1. 2009 but they are not relevant to the Bank’s operations.2 BASIS OF PRESENTATION These financial statements have been presented in accordance with the requirements of format prescribed by the State Bank of Pakistan’s BSD Circular No 4 dated February 17. The purchases and sales arising under these arrangements are not reflected in these financial statements as such but are restricted to the amount of facilities actually utilized and the appropriate portion of mark-up thereon. 1962. 2004. 10 dated July 13. Approved accounting standards comprise of such International Financial Reporting Standards (IFRS) issued by the International Accounting Standard Board (IASB) as are notified under the Companies Ordinance. One permissible form of trade related mode of financing comprises of purchase of goods by the Bank from its customers and resale to them at appropriate markup in price on a deferred payment basis. “Investment Property” and International Financial Reporting Standard 7. 2. investments have been presented in accordance with the requirements of the format prescribed by the State Bank of Pakistan’s BSD Circular No. 1992.1 2. a) Standards. 1962. The Mall. STATEMENT OF COMPLIANCE These financial statements have been prepared in accordance with the approved accounting standards as applicable in Pakistan and the requirements of the Companies Ordinance. amendments and interpretations effective in 2009 but not relevant The following standards. Surplus/(deficit) on revaluation of land and available for sale investments has been reflected below equity in terms of requirements of above referred format prescribed by SBP under BSD Circular No. 4 dated February 17. The Bank is a scheduled commercial bank and is principally engaged in the business of banking as defined in the Banking Companies Ordinance. 2. provisions of and directives issued under the Companies Ordinance. 1991 as a Public Limited Company and is listed on the Karachi.3 The financial results of the Islamic banking branches have been consolidated in these financial statements for reporting purposes. However.Askari Bank Limited | Financial Statements Notes to the Financial Statements For the year ended December 31. 2006. the provisions or directives of the Companies Ordinance. 22 (2008: 11) sub-branches and a wholesale bank branch in the Kingdom of Bahrain. Rawalpindi. Army Welfare Trust directly and indirectly holds a significant portion of the Bank’s share capital at the year end. 1962 or the requirements of the said directives shall prevail. The Bank has adopted IAS 1 (Revised) “Presentation of Financial Statements”. which became effective from January 1. the Banking Companies Ordinance.”Financial Instruments: Disclosure” are not applicable to banking companies in Pakistan. 1962 or directives issued by the Securities and Exchange Commission of Pakistan and the State Bank of Pakistan. 4 dated February 17. 2006. 1984. Key figures of the Islamic banking branches are disclosed in Annexure II to these financial statements. As the change in accounting policy only impacts presentation aspects. 1992 and started operations from April 01. Lahore and Islamabad Stock Exchanges. The Bank obtained its business commencement certificate on February 26. there is no impact on profit for the year. The registered office of the Bank is situated at AWT Plaza. 1984.

Effective for periods beginning on or after IFRS 1 IFRS 2 IFRS 3 IFRS 5 IFRS 8 IFRS 9 IAS 24 IAS 27 IAS 32 IFRIC 9 IFRIC 16 IFRIC 17 IFRIC 18 IFRIC 19 4. 5. or areas where assumptions and estimates are significant to the financial statements. amendments and interpretations to existing standards that are not yet effective and have not been early adopted by the bank Certain minor amendments in following International Accounting Standards (IASs) have been introduced through IASB’s annual improvements published in April 2009. 2013 January 1. 2010 January 1. 2010 January 1. 2009 July 1. The areas involving a higher degree of judgments or complexity. The preparation of financial statements in conformity with approved accounting standards. 2009 July 1. 2010 January 1. 2010 July 1. 5. 2009 July 1. 2010 July 1. 2009 January 1. The difference between sale and repurchase / purchase and resale price is treated as mark-up / return expensed and earned. 2011 July 1. are disclosed in note 43. 5. balances with other banks and call money lendings. Repo and reverse repo balances are reflected under borrowings from and lendings to financial institutions respectively. as the case may be. First-time adoption of International Financial Reporting Standards Share-based payments Business combinations Non-current assets held-for-sale and discontinued operations Operating segments Financial Instruments Related Party Disclosures Consolidated and separate financial statements Financial instruments: Presentation – Amendments relating to classification of right issues Reassessment of embedded derivatives Hedges of a net investment in foreign operations Distribution of non-cash assets to owners Transfer of assets from customers Extinguishing Financial Liabilities with Equity Instruments January 1. 2009 July 1. 2009 January 1. Effective for periods beginning on or after IAS 1 IAS 7 IAS 17 IAS 36 IAS 38 IFRIC 14 c) Presentation of financial statements Statement of cash flows Leases Impairment of assets Intangible assets IAS 19 – The limit on a Defined Benefit Assets. 2011 Amendments and interpretations to existing standards that are not yet effective and not relevant to the bank’s operations.1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Cash and cash equivalents Cash and cash equivalents comprise of cash and balances with treasury banks. 2010 January 1. Conversely.2 Sale and repurchase agreements Securities sold under repurchase agreement (repo) are retained in the financial statements as investments and a liability for consideration received is included in borrowings. 2009 February 1. as applicable in Pakistan. requires the use of certain accounting estimates and judgments in application of accounting policies. consideration for securities purchased under resale agreement (reverse repo) are included in lendings to financial institutions. minimum funding requirements and their interaction January 1. 2010 July 1. page | 77 . 2010 January 1. 2010 January 1. 2010 BASIS OF MEASUREMENT These financial statements have been prepared under the historical cost convention as modified for certain investments and freehold and leasehold land which are shown at revalued amounts.Annual Report | 2009 b) Standards.

all such Ijarahs booked on or after January 01. Depreciation on Ijarah assets is charged to profit and loss account by applying the straight line method whereby the depreciable value of Ijarah assets is written off over the Ijarah period. 2009 are stated at cost less accumulated depreciation and impairment if any.3 Investments Investments are classified as follows: Held for trading These represent securities acquired with the intention to trade by taking advantage of short-term market / interest rate movements. In accordance with the requirements of the State Bank of Pakistan’s BSD Circular No. Investments in other unquoted securities are valued at cost less impairment losses. These are carried at amortized cost in accordance with the requirements of the State Bank of Pakistan’s BSD Circular No. 2000. 10 dated July 13. In addition. Land is carried at revalued amounts which are not depreciated. whether past. current of future. Where the markets are not active or the securities are unlisted. carpets. Investments in subsidiaries and associate are carried at cost.4 Advances Advances are stated net of provisions for non-performing advances. except for vehicles. Land is revalued by professionally qualified valuers with sufficient regularity to ensure that the net carrying amount does not differ materially from their fair value. Owned assets Fixed assets are stated at cost less impairment losses and accumulated depreciation except for freehold / leasehold land. Depreciation is computed over the estimated useful lives of the related assets at the rates set out in note 11. Depreciation is charged for the full month on purchase / acquisition of page | 78 . Foreign securities are carried at fair value. 2004. or in any manner applied. a general provision is maintained for advances other than consumer advances as per details given in note 10. Provision for advances is determined in accordance with the requirements of the Prudential Regulations issued by the State Bank of Pakistan from time to time. 2004. The Bank charges depreciation from the date of delivery of respective assets to Mustajir upto the date of maturity / termination of Ijarah agreement. The provisions against non-performing advances are charged to the profit and loss account.5. 5. These are marked to market and surplus / deficit arising on revaluation of ‘held for trading’ investments is taken to profit and loss account in accordance with the requirements of the State Bank of Pakistan’s BSD Circular No. 20 dated August 04. 14 dated September 24. Advances are written off when there is no realistic prospect of recovery.2. Surplus / (deficit) arising on revaluation of fixed assets is credited / (debited) to the surplus on revaluation of assets account and is shown below the shareholders’ equity in the statement of financial position. The State Bank of Pakistan has notified for adoption of “Islamic Financial Accounting Standard 2 Ijarah” (IFAS-2) which is applicable for accounting period beginning on or after January 01. available for sale securities for which ready quotations are available on Reuters Page (PKRV) or Stock Exchanges are valued at market value and the resulting surplus / deficit is kept in a separate account and is shown below the shareholders’ equity in the statement of financial position. 5. Available for sale These represent securities which do not fall under ‘held for trading’ or ‘held to maturity’ categories.2. Except to the extent actually realised on disposal of land which are revalued. 2009. Break-up value of equity securities is calculated with reference to the net assets of the investee as per the latest audited financial statements. The rentals received / receivable on above Ijarahs are recorded as income / revenue. Consequent to the adoption of IFAS-2. fair value is estimated by using valuation techniques. which is the date the Bank commits to purchase or sell the investments. operating fixed assets and depreciation Capital work-in-progress Capital work-in-progress is stated at cost.5 Capital work-in-progress. and are shown under advances.Askari Bank Limited | Financial Statements Notes to the Financial Statements For the year ended December 31. based on their current bid prices in active markets. Unquoted equity securities are valued at the lower of cost and break-up value. renovations and other assets which are depreciated on a straight line basis. the surplus on revaluation of land shall not be applied to set-off or reduce any deficit or loss. Held to maturity These represent securities acquired with the intention and ability to hold them upto maturity. The cost of assets is depreciated on the diminishing balance method. adjusted or treated so as to add to the income. profit or surplus of the Bank or utilized directly or indirectly by way of dividend or bonus. if any. All purchases and sale of investment that require delivery within the time frame established by regulations or market convention are recognized at the trade date. 2009 5.

providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amount used for taxation purposes. Deferred tax assets are reduced to the extent it is no longer probable that the related tax benefit will be realised. Contributions are made in accordance with the actuarial recommendation. 5. Exchange gains and losses are included in profit and loss account currently.10 Foreign currencies Foreign currency transactions Foreign currency transactions are translated into Pak. Provision for the year is charged to profit and loss account.33% of the basic salary of the employee. expected to be applicable at the time of its reversal. net of depreciation or amortisation.8 Staff retirement benefits Defined benefit plan The Bank operates an approved funded gratuity scheme for all its regular employees. Assets subject to finance lease Assets held under finance lease are accounted for by recording the assets and related liabilities at the amounts determined on the basis of lower of fair value of the assets and the present value of minimum lease payments. 5. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined. commission and brokerage income is recognised at the time of performance of service. page | 79 . Deferred tax. Impairment loss is recognised as expense in the profit and loss account. Defined contribution plan The Bank operates a recognised provident fund scheme for all its regular employees for which equal monthly contributions are made both by the Bank and by the employees at the rate of 8. Finance charge is allocated to the accounting periods in a manner so as to provide a constant periodic rate of charge on the outstanding liability. Rupee at the exchange rates prevailing on the date of transaction. is recognised as an adjustment to surplus / (deficit) arising on such revaluation. Depreciation is charged on leased assets on the basis similar to that of the owned assets. Maintenance and normal repairs are charged to profit and loss account as and when incurred. Deferred Deferred tax is provided for by using the balance sheet liability method. The amount recognised in the balance sheet represents the present value of defined benefit obligations. if any. The amount of deferred tax provided is based on the expected manner of realization or settlement of the carrying amount of assets and liabilities using tax rates enacted or substantially enacted at the date of statement of financial position.Annual Report | 2009 an asset while no depreciation is charged in the month of disposal of an asset.6 Impairment The carrying amount of the Bank’s assets are reviewed at the date of statement of financial position to determine whether there is any indication of impairment. A deferred tax asset is recognised only to the extent that it is probable that the future taxable profit will be available and credits can be utilized. Gain and losses on sale of investments are included in income currently. Rupee at the exchange rates prevailing at the date of statement of financial position. The actuarial gains / losses in excess of corridor limit (10% of higher of present value of obligation and fair value of plan assets) are recognized over the expected remaining working life of its employees. if no impairment loss had been recognised. Liability for unfunded scheme is recognized on the basis of actuarial valuation using the “Projected Unit Credit Method”. Outstanding foreign bills purchased are valued at the rates applicable to the remaining maturities. Major renewals and improvements are capitalized. 5.9 Revenue recognition Mark-up / interest on advances and return on investments is recognised on accrual basis except on classified advances which is recognized on receipt basis in compliance with Prudential Regulations issued by the State Bank of Pakistan. if any. Compensated absences The Bank grants compensated absences to all its regular employees. 5. the asset’s recoverable amount is estimated in order to determine the extent of the impairment loss. The actuarial valuation is carried out periodically using “Projected Unit Credit Method”.7 Taxation Current Provision for current tax is the expected tax payable on the taxable profit for the year using tax rates applicable at the date of statement of financial position and any adjustment to tax payable for previous years. 5. on revaluation of investments. Gains and losses on disposal of operating fixed assets are taken to the profit and loss account. Dividend income is recognised when Bank’s right to receive the income is established. If such indications exist. Fees. Monetary assets and liabilities in foreign currencies are translated to Pak.

legal or constructive obligations as a result of past events. deposits and other transactions with retail customers and credit card business. Agency services Agency services include income from rent of lockers provided to customers. it is probable that an out flow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate of the amounts can be made. which is subject to risks and rewards that are different from those of other segments. Rupee. Segment reporting A segment is a distinguishable component of the Bank that is engaged in providing products or services (business segment) or in providing product or services within a particular economic environment (geographical segment). Charge to profit and loss account is stated net off expected recoveries. trade finance.14 Appropriations subsequent to the date of statement of financial position Appropriations subsequent to year end are recognised during the year in which those appropriations are made. export finance. Translation gains and losses Translation gains and losses are included in the profit and loss account. underwriting.13 5. The results of foreign operations are translated at the average rate of exchange for the year. Payment and settlement Payment and settlement includes income from payments and collections. Retail Banking Retail banking segment provides services to small borrowers and include loans. 5. Commitments Commitments for outstanding forward foreign exchange contracts are valued at the rates applicable to the remaining maturities.1 Business segment Corporate financing Corporate financing includes corporate and investment banking activities such as mergers and acquisition. privatization.Askari Bank Limited | Financial Statements Notes to the Financial Statements For the year ended December 31. or to realise the assets and to settle the liabilities simultaneously.14. Contingent liabilities / commitments for letters of credits and letters of guarantees denominated in foreign currencies are translated into Pak. 5. leasing. which is the Bank’s functional currency. page | 80 . IPO’s related activities and secondary private placements. Sub-ordinated loans It represents Term Finance Certificates issued by the Bank. Pakistan and the Middle East. Rupee at the rates of exchange ruling on the date statement of financial position. Commercial Banking Commercial banking segment provides services related to project finance.14. Rupee at the exchange rates prevailing at the date of statement of financial position.15 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.12 Off-setting Financial assets and financial liabilities are only set-off and the net amount is reported in the financial statements when there is a legally enforceable right to set-off the recognised amount and the Bank intends either to settle on a net basis. 5. clearing and settlement. securitisation. lending. funds transfer. 5. Provision for guarantee claims and other off balance sheet obligations is recognized when intimated and reasonable certainty exists to settle the obligations. 5. Trading and Sales Trading and sales includes the Bank’s treasury and money market activities classified as held for trading. The Bank’s primary format of reporting is based on business segments. bills of exchange and deposits from corporate customers. The financial statements are presented in Pak.11 Provisions Provisions are recognised when there are present. Expected recoveries are recognized by debiting customer accounts. guarantees. 2009 Foreign operation The monetary assets and liabilities of wholesale bank branch are translated to Pak. 5.2 Geographical segments The Bank operates in two geographic regions.

CASH AND BALANCES WITH TREASURY BANKS In hand: Local currency Foreign currencies National Prize Bonds With the State Bank of Pakistan in: Local currency current accounts Foreign currency current account Foreign currency deposit account With National Bank of Pakistan in : Local currency current accounts 6.733 (82.555 8.733.071.115 2.000 4.256 3. Notes 2009 2008 Rupees in ‘000 8.837.1 8.754 1.000 3.479.035 113.843 2.704.567 3.498 19.866.277. BALANCES WITH OTHER BANKS In Pakistan On current accounts On deposit accounts Outside Pakistan On current accounts On deposit accounts 423.843.954.2 Deposits are maintained with the State Bank of Pakistan to comply with its requirements issued from time to time.095.Annual Report | 2009 Rupees in ‘000 Notes 2009 2008 6.1% to 3%) per annum receivable on maturity.723 1.10% (2008: 0.496.03% to 0.814 7.479.3 100.360.754 – – – – – page | 81 .150.net of provision Particulars of provision against reverse repo Opening balance Charge for the year Reversals Closing balance 8.082 1.674) 4.455.554.733 100.674 82.757 1.097 1.000 4. LENDINGS TO FINANCIAL INSTITUTIONS Call money lendings Repurchase agreement lendings (reverse repo) Purchase under resale arrangement of equity securities Others Less: Provision against reverse repo Lendings to financial institutions .1 6.1 6.025 625.734.246 4.658.701 11.029.754 100.520.2 3. 25 issued by the State Bank of Pakistan and is remunerated at 0.1 6.913 1.070 5.551.920 8.754 – 4.476.373.364.832.1 7.261 451.003 14.732 994.331 472. These represent statutory cash reserve maintained against foreign currency deposit mobilised under Foreign Exchange Circular No.000 4.000 2.030.00% (2008: 0.674 – 82.000 3.2 8.614.674 675.763 656.997 4.059 – 82.392.244 16.733 630.094 19.00%) per annum.901 3.385.1 These represent overnight to three months placements with correspondent banks.988 15.378 6. Note 2009 2008 Rupees in ‘000 7.696. carrying interest rates determined with respect to underlying currency benchmarks at the rates ranging from 0.635 6.

These include lending under repurchase agreement amounting to Rs.000 4.9%) per annum and maturities of upto 3 (2008: upto 2) months.479.5% to 18. These are secured against underlying Government Securities.1 8.4 Particulars of lending In local currency In foreign currencies 4.631.704.733 235.733 – 4.000 thousand) to a related party.496.000 630.754 page | 82 .6% (2008: 12.150. These represent shares of companies purchased under resale agreement carrying mark-up at rates ranging from 16.Askari Bank Limited | Financial Statements Notes to the Financial Statements For the year ended December 31.733 235.754 – 1.554.696.754 2009 Held by the Bank Further given as collateral Held by the Bank 2008 Further given as collateral Rupees in ‘000 Total Total 8.2 These carry mark-up at 12. 2009 8.631.704.4% (2008: 12% to 14.000 4.754 – 1.696. the differential between the contracted rate and resale price is amortised over the period of related contracts and recorded under mark-up/return/interest earned. Nil (2008: Rs.479.554. 8.000 630.5% to 20%) per annum.150.754 – – – – 2.733 4.733 – – – – 3.000 3.733 2.5 Securities held as collateral against lendings to financial institutions Market Treasury Bills Pakistan Investment Bonds Purchase under resale arrangement of listed shares 3. 500. These carry mark-up at rates ranging from 12% to 12.496.000 3.754 – 4.01% (2008: 18% to 18.3 Rupees in ‘000 2009 2008 8.01%) per annum with maturity of upto 1 (2008: upto 1) month.

868.685.511.789 36.000 77.046.807 – – – – – – – – – – 4.099 1.508 421.000 888.410 33.979 395.306 897.000 – – – – – – – – – – 811.186.035 – (4.681 167.918) (71.454 4.896) – 36.276.481.9 9.000 6.182 – 11.000 13.680) (75.907 1.208 4.310 134.645.222 – – – – – – – 1.7 9.000 13.000 100.955 – 1.287 30.000 77.515.845 196.182 9.2.193 2.250 135.369 1.530.681 167.246 (1.689 278.265.516.789 37.556.417.7 9.918) (79.837 948.099 1.306 897.676 949.516.689 278.287 30.720 22.392) 34.262.602 9.384 (1.182 11.073.680) (75.000 986.493 5.472 100.146 95.250 116.net Total investments at market value 9.702 1.146 95.4 9.130.601 (3.043 – – 811.871.000 1.net (Deficit) / surplus on revaluation of available for sale securities .000 888.508.11 9.771.004) 4.369 1.1 Investments by types: Held for trading securities Fully paid ordinary shares Available for sale securities Market Treasury Bills Pakistan Investment Bonds Fully paid ordinary shares Fully paid preference shares Askari Income Fund .2.590) 806.443 336.000 77.8 9.662.000 986.289 195.330 930.261.508 421.493 5.265 100.4 135.729.292 – 767.789 62.523.965 57.868.965 62.5 9.702 1.208 4.351 – – 4.Annual Report | 2009 9.10 11.205.000) 62.417 125.955 – 1.182 – 11.789 67.939 – – 811.646) 62.000 2.454 16.523.681.481.668 100.755 page | 83 .787 – (8.127.4 9.208.280 181.136.144 3.7 9.289 195.837 948.281 135.4 9.029.662.000) 67.000 100.774 1.310 (3.261.353 (1.650) 67.677.12 781.907 1.472 100.077.384 (1.876 Held to maturity securities Term Finance Certificates Pakistan Investment Bonds Government of Pakistan Sukuk .2 (5.410 37.043.729.000 6.280 181.Certificates Credit Linked Notes – 4.330 930.133.676 949.604.031 – – 4. INVESTMENTS 2009 2008 Total Held by the Bank Given as collateral Total Notes Held by the Bank Given as collateral Rupees in ‘000 9.845 196.310 135.000 100.417 125.742.249 9.265 100.222 Investment in associate Askari General Insurance Company Limited Investment in subsidiaries Askari Investment Management Limited Askari Securities Limited Investment at cost Less: Provision for impairment in value of investments in – unlisted shares – Sukuk certificates Investments (net of provision) Add / (less): Unrealised (deficit) / surplus on revaluation of held for trading securities .250 (5.979 395.454 3.000 100.947.982) 35.086.668 100.707.000 1.413.Certificates Foreign securities 116.774 – – – – – – – 781.126 134.454 15.897 4.000 77.896) – 37.2.Units Askari Islamic Income Fund Askari Islamic Asset Allocation Fund Term Finance Certificates National Investment Trust (NIT) Units National Investment Trust (NIT) Government Bond Fund Sukuk .Bonds Government of Pakistan Euro Bonds Sukuk .033 22.771.523.707.508.511.310 44.029.982.133.

173 1.2.508 45.896) 37.unlisted company Sukuk certificates 5.046.249.784 80.12 195.615.261.791.2.2.9 9.000 1.936 948.742.680 75.073.2.2.369 1.979 23.281 9.289 278.6 95.287 395.896 – 3.896 .650) 67.4 37.755 9.761 67.2 Investments by segments: Federal Government Securities Market Treasury Bills Pakistan Investment Bonds Government of Pakistan Sukuk Bonds Government of Pakistan Euro Bonds Sukuk Certificates Fully paid up ordinary shares / units Listed companies / funds Unlisted companies 9.469 4.375 3.391 9.3 9.2.330 660.195 Fully paid preference shares Listed companies Term Finance Certificates Listed Term Finance Certificates Unlisted Term Finance Certificates Foreign Securities Mena Transformation Fund Credit Linked Notes Other Investments Sukuk .647.280 196.208.889.784 – 76.033 16.896 76.955 – 1.656 12.5 9.115.601 (1.982) 35.077.897 6.735 14.493 576.144.752 181.Askari Bank Limited | Financial Statements Notes to the Financial Statements For the year ended December 31.000 80.680 3.235 37.Certificates National Investment Trust (NIT) .726 268.737.169.472 100.454 4.000 2.896 3.413.208 617.net Total investments at market value 9.043.252.681 167.965 421.2 Particulars of provision in respect of type and segment Available for sale securities Fully paid ordinary shares .780 1. 2009 Rupees in ‘000 Notes 2009 2008 9.Units National Investment Trust (NIT) Government Bond Fund Total investment at cost Less: Provision for impairment in value of investments in unlisted shares Investments (net of provisions) (Less) / add: Unrealised (deficit) / surplus on revaluation of held for trading securities .904.127.676 949.677.249 (3.778.000 1.4 9.net Deficit on revaluation of available for sale securities .367 6.3 9.263.975.469 3.680) 67.158.761 9.384 (1.1 (80.107 125.638 268.385 7.680 page | 84 3.918) (79.306 617.388 508 – 508 3.646.1 Particulars of provision for impairment in value of investments Opening balance Charge for the year Reversals Closing balance 9.485.4 3.417.353 22.

01 4.04 – 39.029 – – – – – – – 73.4% 6 months KIBOR plus 0.13% 6 months KIBOR plus 1% Weighted average yield of 6 months market treasury bills 6 months KIBOR plus 0.611 8.086 970 – 3.114 235.2.000 – 1.000.000 – 5.00 100.701 75.8% 6 months KIBOR minus 0.000 3.000 1.000 2.771 5 2.257.304 – – 364.059.000 6.91 143.S.83 – 6.10 Askari Income Fund Askari Islamic Asset Allocation Fund Askari Islamic Income Fund Askari Sovereign Cash Fund Atlas Bank Limited Atlas Fund of Funds Attock Cement Pakistan Limited Attock Petroleum Limited Attock Refinery Limited Azgard Nine Limited Bank Alfalah Limited Bank Al-Habib Limited Bank Islami Pakistan Limited BOC Pakistan Limited Bosicor Pakistan Limited Cherat Cement Company Limited Crescent Steel Mills Limited D.42% to 13.095 3.972 – 11.265 – 6.455 632 595 462.056.000 5.000 1.620 260.000 29.000 1.657 1.107.293 52.736 61.009.899 7 37 3.165 61 11.182 888.295 4. 2016 June 28.012 page | 85 .757.881 888 1. 2014 September 26.427 42.000 2.771 21.320 113.350.60 331.850.00 99.95 13. 9.4 These represent investments by the wholesale bank branch.66 106. Industries Limited Dawood Equities Limited Dawood Lawrencepur Limited Dewan Cement Limited Dewan Salman Fibres Limited Dost Steel Mills Limited EFU General Insurance Limited Engro Chemical (Pakistan) Limited – 48.575 151 113.265 100.380 3 – 114 42 66 76.061 1.3 Investments in listed companies shares / Units No.300 101.000 10.133.159 2.243 49. 2012 July 13.400 798.000 100. 2011 On maturity On maturity On maturity On maturity Semi-annually On maturity 11.499 245.300 1.126 9 1 23 279 20 29 18 25.2% 7.9% 8% to 14% 6 months LIBOR plus 2.924.934 12.500.000 100.056.141 11.611 9. of ordinary shares / certificates / units 2009 2008 Paid-up value per share/ certificate/unit Rupees Name of companies / mutual funds 2009 Rupees in ‘000 2008 – 584.739 50.569 37.Annual Report | 2009 9.19 52.3 Principal terms of investments in Federal Government Securities Name of investment Maturity Principal Payment Rate Coupon Payment Market Treasury Bills Pakistan Investment Bonds Government of Pakistan Sukuk Bonds Government of Pakistan Euro Bonds Sukuk Certificates – House Building Finance Corporation – Pakistan Domestic Sukuk Company Ltd.000 54.000 100.99 26.518 41 11 14.06 3.56 1.25% at maturity semi-annually semi-annually semi-annually semi-annually semi-annually – Karachi Shipyard and Engineering Works – Sui Southern Gas Company Limited – WAPDA February 04.000 41.902 – – – – – – – 534.520 2.70 – – – – – – – 138.200 – 1.740 1.09 ABL Income Fund Adamjee Insurance Company Limited Al-Abbas Cement Industries Limited Al-Meezan Mutual Fund Allied Bank Limited Arif Habib Bank Limited Arif Habib Limited Arif Habib Securities Limited Askari Asset Allocation Fund Askari General Insurance Company Limited – note 9.182 986.617 43 – 51.971 500. Khan Cement Company Limited D.42 61.86 98.393 86. G.821 1.85 4.939 202 181.000.387 40.000 – 1.814 245.30 31.500.050 – 83.368. 2017 Semi-annually Semi-annually On maturity semi-annually semi-annually semi-annually 9.409 74.667 100.300.55 33.000.000. February 2010 to December 2010 December 2010 to September 2019 January 2010 March 2016 May 8.218 – – 4.000 3.352 701 86 524 81.758.000 294.58 5.295 42.124 3.798.000.19 100.279 64.2.514 3.87 – – 12.000 – 500.000 100.985 42.141 11.256 57.

108 40 71.675 100.000 347.600 1.096 – 48.05 18.000 – 139.782 365 13.800.062 24.000 546.18 20.713 – 7.264 11.901 – 8.108.151 16.000 – 6.000 10 – 17 6.18 4.428 2.000 1.356 92.300.280 6.808 – – – 3.812 300.704 516.760.000 7.000 – 1.718.000 – 1.000 240.999 25.44 26.000 2.500 6.000 150.941 254.927 1.500.846 1.865 4.109 85.69 73.974 34.280 75 730.088 77.000.000 – 1.613.25 62.595 – 99.958 – 73.50 71.074 8.600.077 69 4.915 1.00 – 39.000 14.000 553.585.080 – 17.562 136 41.900.000 – 5.187 509.00 14.000 130.034.19 – 27.990 7.371 50.875 2.827 6.264 page | 86 480 969.837 29.601 25.485 102 85 4 3.809 640.86 – 11.42 – 145.952 95.000 – 1.033.000 219.917 1.363 – 34.520.33 – 247.74 146.204 2.455 47.779 81.039 14.000 7.03 10.961 3.820 148 92.50 – 34.72 Eye Television Network Limited Fauji Cement Company Limited Fauji Fertilizer Bin Qasim Limited Fauji Fertilizer Company Limited Faysal Bank Limited First National Equities Limited Golden Arrow Selected Stock Fund Habib Bank Limited HBL Stock Fund Hira Textile Mills Limited Honda Atlas Cars (Pakistan) Limited Hub Power Company Limited ICI Pakistan Limited IGI Investment Bank Limited Indus Motor Company Limited Invest and Finance Securities Limited Jahangir Siddiqui and Company Limited Javed Omer Vohra and Company Limited JS Bank Limited JS Income Fund JS Investments Limited JS Large Capital Fund JS Value Fund Kot Addu Power Company Limited Lucky Cement Limited Maple Leaf Cement Company Limited Mari Gas Company Limited MCB Bank Limited MCB Dynamic Cash Fund Meezan Balanced Fund Meezan Bank Limited MyBank Limited National Bank of Pakistan National Refinery Limited Netsol Technologies Limited NIB Bank Limited Nishat Mills Limited (Chunian) Nishat Textile Mills Limited Oil and Gas Development Company Limited Pace Pakistan Limited Packages Limited Pak Oman Advantage Fund Pak Suzuki Motor Company Limited Pakistan Electron Limited Pakistan Oilfields Limited Pakistan Petroleum Limited Pakistan Premier Fund Pakistan Refinery Limited Pakistan Re-Insurance Company Limited Pakistan State Oil Company Limited Pakistan Strategic Allocation Fund Pakistan Telecommunication Company Limited Pervez Ahmed Securities Limited PICIC Growth Fund Pioneer Cement Limited Reliance Income Fund Samba Bank Limited Searle Pakistan Limited Shell Pakistan Limited Sitara Peroxide Limited Soneri Bank Limited Sui Northern Gas Pipelines Limited Sui Southern Gas Company Limited – 25.647 14.599 187.023 48.963 – 32.284.300 40.083 2 19.613 1.569 14 11.67 4.82 20.52 – 4.700.698 – 36.342 3.133 – 92.204 587.016 23.195 1.427.069 61.234.336 1.726.300.886. of ordinary shares / certificates / units 2009 2009 Rupees in ‘000 2008 – 3.Askari Bank Limited | Financial Statements Notes to the Financial Statements For the year ended December 31.311 35.00 10.000 1.23 – 144.899 743.814 261 – 6.000 – 3.018.000 – 513.84 – 3.300.724 14 101.000.000 1. 2009 Paid-up value per share/ certificate/unit 2008 Rupees Name of companies / mutual funds No.64 – 16.906 4.800.229 13.652 8.08 – 17.400.172.000 – 1.000 10.525 68.201 7.728 5.059.281 – 19.000 1.500 204.500 218.380 153.751 10.056 7 5.161 1.404 45.239.091 59.213.03 29.900 – 100.029 6.006 457 17.946 110.733 47.452 189.93 – 5.974 13.000 6.318 78.931 1 417 28 1.005 600.915 75.643 51 85.000 – 335.299 – 5.34 6.878 10.45 5.029 156 7.07 36.300 7.000 50.000 575.000 1.139 650 – 97.610.606 81.000 137.100.606 2.000 30 60.663 75.53 189.324 41.557 65.000 1.696.231.500 1.70 13.70 – 5.568 650.401 64.825 352 100.700 556 882.187 156.000 1.00 108.093 1.830.13 – – – 3.090 140.526 4.508.234 228.000 10.64 198.000 – 2.000 1.000 – – – 1.181.700 – 3.55 6.809 – 9.385 – 67.000 4.104 13.392 100.80 71.511.484 23.000.950 3 7 636 50.483 2.24 – 142.184 27 45.18 114.952 – 3.000 200.98 4.038.72 – 38.800 – 2.313 – 650.37 – 6.719 4.626 – 36.568 1.000 1.890 69 .

737 3.5 Particulars of investments held in preference shares . Saeed Aziz Khan Mr.511 2.000 106.4.4. 5.054.4.100 830.641 – 310.934 3.000 77.25 Average of ask side of six month KIBOR plus 2 percent per annum 70.889.000 2.500.977.000 95.896 thousand) is considered as impairment and has been fully provided for. 2000. BSD (RU-26/625-MfB/13317/00) dated August 07. of ordinary shares / certificates / units 2009 2008 Paid-up value per share/ certificate/unit Rupees Name of companies / mutual funds 2009 Rupees in ‘000 2008 – – 6.000 2. the sale/ transfer of these shares is subject to the prior approval of the State Bank of Pakistan.000 10 10 Chenab Limited Masood Textile Mills Limited 9. Zaeem 9.500.000 100.000 – 62 3.2 9. 9.700 25.000 – – 99.000 5.93 5. of preference shares 2009 2008 Book Value 2009 2008 Market Value 2009 2008 10.000 568. incorporated under the Companies Ordinance.000 10.638 (1.000 81.4.000 5.4 100 74 2.000 25.680 thousand (2008: Rs.700 page | 87 .000.500.1 Askari Investment Management Limited is a wholly owned subsidiary of the Bank.4 The difference between the paid up value and break up value of Pakistan Export Finance Guarantee Agency Limited amounting to Rs.4.Ghalib Nishtar Mr.761 – 3. 2007 (NBFC and NE Regulations).Listed Paid-up value per share Rupees Investee Rupees in ‘000 Rate % Rupees in ‘000 No.2 Askari Securities Limited is a partly owned subsidiary of the Bank.469 155.000 95.055 49.1 9.865) 2.130 – 31 Dec 2009 31 Dec 2009 31 Dec 2008 – Mr.4.133 55.660 1 55 – 30. 9.000 70. S. 3.3 This represents subscription by the Bank towards capital of Khushhali Bank as per the State Bank of Pakistan letter No. licensed as a non-banking finance company (NBFC). 9.3 9. 1984 as a public limited company to undertake the business of share brokerage.320.208 17.000 125.680 268.4.000 13. 2000.000. In accordance with the restrictions imposed under section 10 of the Khushhali Bank Ordinance.18 51.M. Faheem Sardar Mr.4.773 Add / (less): Surplus / (deficit) on revaluation of shares .000 25. M.Annual Report | 2009 No.52 – Thatta Cement Limited The Bank of Punjab Tri Pak Films Limited United Bank Limited UTP Large Capital Fund – – 605 42. investment advisory and consultancy services.789 50.4 Particulars of investments held in unlisted companies Cost / paid-up value per share Based on audited financial statements as at Investee Notes Percentage of holding % Number of shares Rupees Total paid-up value Break up value Name of Chief Executive Rupees in ‘000 Askari Investment Management Limited – subsidiary Askari Securities Limited – subsidiary Khushhali Bank Limited Pakistan Export Finance Guarantee Agency Limited – a related party 9.(net) Market value as on December 31 9.089. 9.144.000 25. to undertake asset management and investment advisory services under Non Banking Finance Companies and Notified Entities Regulations.726 87.044 10 10 10 10 135.26 13.000.380.

959 59.166. Aijaz Haroon) Shakarganj Mills Limited (Chief Executive: Mr.669 35.000 30.000 220.647.000 10.252. Byram Dinshawji Avari) Azgard Nine Limited (Chief Executive: Mr.000 5.000 11.000 5.214.166.333 33. Baber Ali Syed) Book value as on December 31 These carry rate of return ranging from 8. Humayun Murad) Pak American Fertilizers Limited (Chief Executive: Mr.000 430.000 1. Fawad Ahmad Mukhtar) Power Holding Private Limited (Chief Executive: Mr.800 – – 247.023 Avari Hotels Limited (Chief Executive: Mr.45% to 19.900 10.780 68.166. Shaikh) Bank Alfalah Limited (Chief Executive: Mr.333 233.000 5.656 4. Muhammad Ibrahim Majoka) Islamabad Electric Supply Company Limited (Chief Executive: Mr.000 1.000 – 5.000 37.000 430.950 121.773 5. 2009 9.924 3.000 455.333 233.000 25.194 350.521 4. Sabzwari) Kashf Foundation (Chief Executive: Ms.000 8. Ahmed Jaudet Bilal) Pak Arab Fertilizer Limited (Chief Executive: Mr.665 165.991 4.720 22.387 – 25.993 4.493 40.800 50.985 212.000 – 20.208 4. Shakil Sadiq) Dewan Farooq Spinning Mills Limited (Chief Executive: Mr.000 295.000 4.143 5.000 86.230 – 40.431 6.000 4.000 700.000 233.000 – 15.000 24.385 Book value as on December 31 Unlisted 30.090 18.693 149.000 – – 70.600 12.991 4. Ahmed H.112 6. of certificates 2009 2008 Company’s Name Redeemed value per certificate Rupees 2009 2008 Rupees in ‘000 Listed 13.000 249. Farrukh H.800 22. Fazeel Asif) Pakistan International Airlines Corporation Limited (Chief Executive: Mr.999 5. Sadaffe Abid) National Transmission and Dispatch Company Limited (Chief Executive: Mr.760 – 21.000 – 220.000 10.45% to 19.Askari Bank Limited | Financial Statements Notes to the Financial Statements For the year ended December 31.222 10.700 26.370 25.714 2.978 1.43%) per annum and having maturity periods of upto 10 years (2008: 8 years).615.000 140.023 4.621 – 4.000 – 150.000 – 12.665 1.735 93.000 20.000 – 2.000 5.000 5.000 10.930 164.166.665 1.279.311 1.43% (2008: 8.000 1.333 74.121 40.070 699.997 4.166. page | 88 .990 199.250 5.656 5.000 15.333 233. Tanwir Safder Cheema) Gujranwala Electric Supply Company Limited (Chief Executive: Mr.000 5.000 29. Saleem) Worldcall Telecom Limited (Chief Executive: Mr.000 59.950 50.661 172.200 86.067 Allied Bank Limited Bank Alfalah Limited Bank Al-Habib Limited IGI Investment Bank Limited NIB Bank Limited Orix Leasing Limited Pace Pakistan Limited Pak Arab Fertilizer Limited Pakistan Mobile Communication (Private) Limited Royal Bank of Scotland Soneri Bank Limited Standard Chartered Bank Limited United Bank Limited Worldcall Telecom Limited 4. Ameer-ur-Rehman) Orix Leasing Pakistan Limited (Chief Executive: Mr. Munaf Ibrahim) KASB Securities Limited (Chief Executive: Mr.106 50.892 49.200 140.000 4.367 76.988 30.000 10.744 50.760 149.200 140.665 1.548 74.000 10.000 700. Raja Abdul Ghafoor) Jahangir Siddique and Company Limited (Chief Executive: Mr.800 2.993 5.665 360.000 30.600 12.665 1.050 699.485.263 174.991 4.446 4.000 233.871 33.994 4.030 401.916 49.6 Investment in Term Finance Certificates No.000 68.051 – 199.000 140. Dewan Abdul Baqi Farooqui) Engro Chemicals Pakistan Limited (Chief Executive: Mr.000 100.493 642.580 326.166. Asad Umar) Faisalabad Electric Supply Company Limited (Chief Executive: Mr.000 70.000 4.669 35.333 233.002 5.270 174.968 59.400 8.907 50. Ahsan M.000 43.022 2.908 123.808 5.000 27.990 2.000 84.

979 9.L.5% p. 2016 June 28. Average of offer side of 3 month KIBOR plus 1.668 thousand). a listed associated company (market value as at December 31. Average of offer side of 3 month KIBOR plus 1. 2012.000 270.000 90. Average of offer side of 6 month KIBOR plus 2.000 1.a. 2012 September 26. 91.000 200. 2011 December 31.a.4% p. 2013 February 04.530 10.3% p.000 150.a.500 300.a. 2014 November 19. Average of offer side of 6 month KIBOR plus 1.000 150.000 190. April 14.S.a.000 897. 2009: Rs.000 270.7 9.a.a.511. Average of offer side of 6 month KIBOR plus 2% p.10 The Bank has invested in MENA Transformation Fund I.a.500 300.Held to maturity Name of Investee Rate Maturity 2009 Rupees in ‘000 2008 9.280 9.3% p. 2015 September 28.8% p. Weighted average yield of 6 months market treasury bills Average of offer side of 6 month KIBOR plus 2.000 150.a.1% p.000 190. 2008: Rs. 2012 December 13.000 200. Investment in associate represents 15% (2008: 15%) investment in the equity of Askari General Insurance Company Limited. 2012 August 5.000 930. Singapore at 3 months USD LIBOR plus 3. Average of offer side of 6 month KIBOR plus 0. Average of offer side of 3 month KIBOR plus 0.8 This represents investment in Funds managed by Askari Investment Management Limited.000 50.000 200. Sukuk Certificates . Sukuk Certificates .000 241.12 This represents investments by the wholesale bank branch in credit linked notes issued by Standard Chartered Bank.P a closed ended fund having six year term. Sulmanji and Esmailiji and Sons Private Limited Kohat Cement Limited Pak American Fertilizer Limited Pak Electron Limited Pakistan Domestic Sukuk Company Limited Shahraj Fabric Limited Sitara Peroxide Limited Average of offer side of 3 month KIBOR plus 2.Available for sale Name of Investee Rate Maturity 2009 2008 Rupees in ‘000 Eden Builders Private Limited House Building Finance Corporation JDW Sugar Mills Limited K.a.962 thousand. 2014 May 8.9 9. March 8. Average of offer side of 6 month KIBOR plus 1% p.a. 51.289 66. a wholly owned subsidiary of the Bank.000 19. Average of offer side of 6 month KIBOR minus 0.a. Average of offer side of 3 month KIBOR plus 1.11 Arzoo Textile Limited Educational Excellence Limited Karachi Shipyard and Engineering Works Sui Southern Gas Company Limited WAPDA Average of offer side of 6 month KIBOR plus 2% p.000 1. 2014 June 20.Annual Report | 2009 9.789 10.8% p.1% p.50% per annum maturing on December 20. page | 89 .508.000 241.842 166.75% p.000 150.a.25% p.666 200. 2013 120. 2017 110.a. 2012 August 19.000 190.25% p. 2014 June 28. 2012 July 13.979 200. Average of offer side of 3 month KIBOR plus 1.250 100.000 200.508 110.

787 – unrated unrated – AA – unrated – A – unrated unrated unrated unrated unrated A– unrated unrated unrated AA A+ AA – A – – unrated A+ unrated – – – – – – – AA – unrated unrated – – – 4 .083 10.480 41.798 2.368 – 18.359 111.905 16 4.193 3 – 106 226 76 21.441 – 6.725 6.294 13.424 5.560 107 72 4 1.731 426 4.247 113.148 1 388 22 unrated unrated A AA unrated – A A unrated A+ unrated unrated unrated – A– unrated unrated unrated AA A+ AA AA A– unrated unrated unrated A+ unrated unrated unrated unrated BB unrated unrated AA AA unrated unrated unrated unrated AA A– 5 .943.1 Pakistan Investment Bonds – note 9.133 45.13.064 – 5.470 9.212 – 19.645 38 10 7.381 29.949 – 11.050 10 1 26 248 30 28 20 10. Khan Cement Company Limited D.Star AA+ unrated unrated unrated unrated unrated A unrated BBB– AA+ BB+ .477 62.218 – – 4.13.660 31.990 52.Star AA+ – unrated unrated unrated – A unrated – AA+ – 16.557 28.489 16.205 114.763 2.739 121. G.13.901.808 – – – 3.072 – 68.046 14.324 74.028. Industries Limited Dawood Equities Limited Dawood Lawrencepur Limited Dewan Cement Limited Dewan Salman Fibres Limited Dost Steel Mills Limited EFU General Insurance Limited Engro Chemical (Pakistan) Limited Eye Television Network Limited Fauji Cement Company Limited Fauji Fertilizer Bin Qasim Limited Fauji Fertilizer Company Limited Faysal Bank Limited First National Equities Limited Golden Arrow Selected Stock Fund Habib Bank Limited HBL Stock Fund Hira Textile Mills Limited Honda Atlas Cars Limited Hub Power Company Limited ICI Pakistan Limited IGI Investment Bank Limited Indus Motor Company Limited Invest and Finance Securities Limited Jahangir Siddiqui and Company Limited Javed Omer Vohra and Company Limited page | 90 37.313 7 53 1.874 100.589 56.051 157.000 – 1. 2009 9.S.814 4.062 25.693.720 36.675 – – – – – – – 92.13 Quality of Available for Sale Securities 2009 Rupees in ‘000 Market Value Rating Market Value 2008 Rating Market Treasury Bills – note 9.Askari Bank Limited | Financial Statements Notes to the Financial Statements For the year ended December 31.2 ABL Income Fund Adamjee Insurance Company Limited Al-Abbas Cement Industries Limited Al-Meezan Mutual Fund Allied Bank Limited Arif Habib Bank Limited Arif Habib Limited Arif Habib Securities Limited Askari Asset Allocation Fund Askari Islamic Asset Allocation Fund Askari Islamic Income Fund Askari Sovereign Cash Fund Atlas Bank Limited Atlas Fund of Funds Attock Cement Limited Attock Petroleum Limited Attock Refinery Limited Azgard Nine Limited Bank Alfalah Limited Bank Al-Habib Limited Bank Islami Pakistan Limited BOC Pakistan Limited Bosicor Pakistan Limited Cherat Cement Limited Crescent Steel Mills Limited D.119 104.594 1.569 29.750 2.607 – 275 – 64.002 1.745 5 1.808 22.000 100.252 90.1 Fully paid up ordinary shares – note 9.548 – 101.310 12.649 1.

081 1.Star unrated unrated unrated BBB unrated A BBB unrated unrated AA– AA AA– unrated AA– – AA+ 4 .211 2 18.13.013 2.487 27.003 595 – 73.2 5.Star A– unrated unrated BBB+ unrated AA+ unrated 5 .076 – – 624 46.Star AA– – 5 .399 7.496 23.Star unrated unrated 5 .000 25.760 – 70.700 25.627 – 34.600 – – 138.Star – unrated A – unrated – AA– AA AA– – – A+ AA+ – unrated unrated 3 .424 17.000 888.809 – 29.836 – 73.205 26.411 13 1.915 78.357 56.735 3.975 78.341 9.080 – 14.468 47 20.437 – 51.916 28.406 1.464 17.080 – 7.376 A– 5 .461 5.Star unrated unrated AAA 4 .005 10.Star A+ A AAA AAA unrated AA– unrated A+ AAA A+ AA AA– unrated A unrated unrated unrated 5 .560 – 60.663 – 50.418 9.881 – 71.890 45 22.497 62 1 48 – 11.854 311 417 5.975 – 36.089 42.000 921.600 25.Annual Report | 2009 2009 Rupees in ‘000 Market Value Rating Market Value 2008 Rating JS Bank Limited JS Income Fund JS Investments Limited JS Large Capital Fund JS Value Fund Khushhali Bank Limited Kot Addu Power Company Limited Lucky Cement Limited Maple Leaf Cement Company Limited Mari Gas Company Limited MCB Bank Limited MCB Dynamic Cash Fund Meezan Balanced Fund Meezan Bank Limited MyBank Limited National Bank of Pakistan National Refinery Limited Netsol Technologies Limited NIB Bank Limited Nishat (Chunian) Mills Limited Nishat Textile Mills Limited Oil and Gas Development Company Limited Pace Pakistan Limited Packages Limited Pak Oman Advantage Fund Pak Suzuki Motor Company Limited Pakistan Electron Limited Pakistan Export Finance Guarantee Agency Limited Pakistan Oilfields Limited Pakistan Petroleum Limited Pakistan Premier Fund Pakistan Refinery Limited Pakistan Re-Insurance Limited Pakistan State Oil Company Limited Pakistan Strategic Allocation Fund Pakistan Telecommunication Company Limited Pervez Ahmed Securities Limited PICIC Growth Fund Pioneer Cement Limited Reliance Income Fund Samba Bank Limited Searle Pakistan Limited Shell Pakistan Limited Sitara Peroxide Limited Soneri Bank Limited Sui Northern Gas Pipelines Limited Sui Southern Gas Company Limited Thatta Cement Limited The Bank of Punjab Tri Pak Films Limited United Bank Limited UTP Large Capital Fund Fully paid preference shares Chenab Limited Masood Textile Mills Limited Askari Income Fund Units – note 9.330 140 24.992 73.Star – unrated – 4 .952 4.485 8 4.396 – 36.145 3.Star unrated – 2 .254 17.990 5.463 91.490 18.000 80.474 81.710 4 7 592 51.356 62.Star 1.404 119 24.784 9.Star page | 91 .488 6.460 14 9.090 25.374 – 3.701 11 – 27 50.735 75.000 4.667 A – AA– unrated – A– unrated unrated D – AA+ – unrated A+ A– AAA AAA – AA– unrated – AAA – AA AA– unrated – – unrated unrated 3 .866 48.

525.738.665 1.373 thousand due to price changes during 2009 and was charged to profit and loss account on a quarterly basis during 2009.422 – – 50.255 79.550 217. 9.147 180. In addition. 9.858 76.14 The Bank recognised impairment loss arising on valuation of listed equity portfolio held as available for sale on December 31. The said loss amounted to Rs.995 260.191 62.796 9. 440.665 1.510.224 10.373 249.000 44.510 387.665 166.13.730 425. an amount of Rs.601 101.166.383.216 1.166.550 665.Askari Bank Limited | Financial Statements Notes to the Financial Statements For the year ended December 31.768 74.998 6.665 – 1.166. These ratings reflect independent credit risk assessment by respective credit rating entities. 2009.214.943 329. 2009 2009 Rupees in ‘000 Market Value Rating Market Value 2008 Rating Term Finance Certificates Allied Bank Limited Avari Hotels Limited Azgard Nine Limited Bank Alfalah Limited Engro Chemical Pakistan Limited Faisalabad Electric Supply Company Limited Gujranwala Electric Supply Company Limited IGI Investment Bank Limited Islamabad Electric Supply Company Limited Jahangir Siddique and Company Limited KASB Securities Limited Kashf Foundation National Transmission and Dispatch Company Limited NIB Bank Limited Orix Leasing Pakistan Limited Pace Pakistan Limited Pak American Fertilizer Limited Pak Arab Fertilizer Limited Pakistan International Airlines Corporation Limited Power Holding Private Limited Shakarganj Mills Limited United Bank Limited World Call Telecom Limited National Investment Trust (NIT) Units National Investment Trust (NIT) Government Bond Fund Sukuk Certificates Foreign securities Mena Transformation Fund 66.Star – unrated unrated AA– A– AA– – AA unrated unrated – unrated AA+ AA– A– – A+ AA+ AA– AA– AA – – A– AA AA– page | 92 . 145.078 – 24.3 Local securities have either been rated by ‘The Pakistan Credit Rating Agency Limited (PACRA) or ‘JCR-VIS Credit Rating Company Limited (JCR-VIS).659 228.866 thousand as of December 31.279. 2008 reduced to Rs 285.565 685.166.950 3.311 1.000 23.665 376.335 1.508.431 13.675 – 704. 2008 as part of equity in terms of the options permitted by the State Bank of Pakistan’s BSD Circular No.540 2.000 431.853 344. 3 .985 700.166.13.040 29. 4 dated February 13.333 49.665 27.000 125.684 thousand has also been recognised as impairment of available for sale equity portfolio.1 These are Government of Pakistan guaranteed securities. continuing with the impairment policy followed by the Bank.280 170.166.864 321.370 25.2 Ratings for these equity securities / units represent ‘Entity Ratings’.433 262. 9.119. whereas foreign security is unrated.037 61.724 4 . 362 228.200 1.418 50.13.145 140.Star unrated unrated unrated AA– A– AA– AA– AA unrated unrated A+ unrated AA+ AA– A– unrated A+ AA & AA+ A+ AA– AA unrated unrated D AA A 101. as permitted by the above referred circular.705 – 1.

184) (11. Pakistan Investment Bonds and Federal Investment Bonds are securities eligible for rediscounting with the State Bank of Pakistan.648 14.242 10.17 Market Treasury Bills.15 Unrealized (loss) / gain on revaluation of investments classified as held for trading Fully paid ordinary shares (1.379 2.628.041) (12.025.973 111.111 9.343 130.993.514 120.878 123.343 (11.034.343 page | 93 .317 147.642) (350.221 111.844) 135.In Pakistan Net book value of assets / investments in Ijarah under IFAS 2 in Pakistan Bills discounted and purchased (excluding treasury bills) Payable in Pakistan Payable outside Pakistan 9.2 10.314 Financing in respect of continuous funding system Advances .481 8.2 Short term ( for upto one year) Long term ( for over one year) 119.040 128. running finances.582.245 28.833 17.257.158 281.628.056.390) (414.092.029.Annual Report | 2009 Rupees in ‘000 2009 2008 9.3 125.106.16 9.499 5. Notes 2009 2008 Rupees in ‘000 10.1 In local currency In foreign currencies 10.1. 44.602.027.gross Provision against non performing advances Specific provision General provision General provision against consumer financing Advances .658.1 Particulars of advances 139. cash credits.101.592 8.918) 22.593.862 139. etc.628.5 147.000 thousand pledged with the State Bank of Pakistan as security against demand loan and TT / DD discounting facilities.728 139.731) 128.973 10.635.357 1.830. ADVANCES Loans.613.014.317 2.026 28. Investments given as collateral include securities having book value of Rs.net of provision 10.973 (10.752 139.830.737.865.012.371.043.884 – 10. In Pakistan Outside Pakistan Ijarah Financing .751 147.787.310 8.995.1.384 9.610.719.023.818.830.501 2.774.958 139.628.161) (585.157) (573.343 – 147.

429 343.717. 10 of 2009 dated October 20.784 3.593.015 1.240 439.146 (66.195.564 124.658. 10.263.514 – – – – – – – – – – – – 10.813. The FSV benefit has resulted in reduced charge for specific provision for the year by Rs.390 445.926 10.106 thousand.769.158 651.521.713 6.248 (208.040 5.324.374 563.025.184 2.565 (1.884 10.852 536.289) (64.377 (743.514 – – – 320.813.926 10.731 3.161 573.959 (1.725. 2.1 The State Bank of Pakistan has amended the Prudential Regulations vide BSD Circular No.451 thousand (2008: Rs.926 10.041 11.1 This represents classification made for agricultural finances.446) 3. 17.038 13.813.417 thousand) which have been placed under nonperforming status as detailed below: 2009 Classified Advances Category of classification Domestic Overseas Total Domestic Provision Required Overseas Rupees in ‘000 Total Domestic Provision Held Overseas Total Other Assets Especially Mentioned – note 10.458 – – – – – 2.120.141 2.565 543.005.297) 2.706 570.769 (220.012.5.605 5.966 639.605 11. The FSV benefit recognised in these financial statements is not available for payment of page | 94 .4.Askari Bank Limited | Financial Statements Notes to the Financial Statements For the year ended December 31.468.652) 10.5 Particulars of provision against non-performing advances 2009 Rupees in ‘000 Specific General Consumer financing -General Total Specific 2008 General Consumer financing -General Total Opening balance Charge for the year Reversal for the year Net charge / (reversal) for the year Amounts written off – note 10.996) 12.157 434.690 138.658.161 – – – – – – 155.031 1.038 13.814.993 (36.390 221.528.7 Closing balance 10. commercial and industrial properties (land and building only) held as collateral against non-performing advances. 2009 in relation to provision for loans and advances.405 1.834 – – – – – 1.658.215 (1.966 639.450.582) 2.630 688.691) – 414.784 3.908 (1.574 281.161 – 155.652) 11.408.779 1.143) – 350.732.684) (31.092.807 435.520 658.088 38.161 – – – – – 155.493.621 2.813.426 1.4 Advances include Rs.376.605 11.161 10.521.725.268 (743.731 10. 11.593.490. 2009 10.635.700 – 573.700 – 138.252 – 585.663 17.658.605 11.490.630 688.725.184 7.451 – 155.460 419.630 688.1 Substandard Doubtful Loss 73.2 Ijarah Financing .657.In Pakistan 2009 Not later than one year Later than one and less than five years Not later than one year 2008 Later than one and less than five years Rupees in ‘000 Over five years Total Over five years Total Ijarah rentals receivable Residual value Minimum lease payments Profit for future periods Present value of minimum Ijarah payments 498.574 281. mortgaged residential.862.324 995.025.190 65. thereby allowing benefit of 40% of Forced Sale Value (FSV) of pledged stocks.271 1.264) 11.4.414.473 348.663 17.865 219.264) 12.130) 3.012.233 222.605 11.157 3.088 38.642 414.824.926 10.663.650 484.451 – – – – – 73.689.639.822 2.778 (220.844 6.875 4.658.978.538.630 688.3 Net book Value of assets / investments in Ijarah under IFAS 2 2009 Not later than one year Later than one and less than five years Not later than one year 2008 Later than one and less than five years Rupees in ‘000 Over five years Total Over five years Total Assets acquired under Ijarah Accumulated depreciation on Ijarah Net assets / investment in Ijarah – – – 320.

579 (179. 500.904 1. 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 Debts due by companies or firms in which the directors of the Bank are interested as directors.2 The general provision is maintained at the rate of 0.001 210.390 2009 414. 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 Debts due by subsidiary companies.000 (551.923 193.927.844 9.000 (61.6 Particulars of provision against non-performing advances 2009 Rupees in ‘000 Specific General Consumer financing -General Total Specific 2008 General Consumer financing -General Total In local currency In foreign currencies 11.593.187.311 467.658. Debts due by directors.160 11.041 – 350. 500.264 – 743.800) thousand respectively.342.967 297 743.184 10.963 10.012.664) 580.843) thousand and Rs.106 (2008: 685.7 Particulars of write-offs: 743.336 44. managed modarabas and other related parties Balance at beginning of year Loans granted during the year Repayments Balance at end of year 631.553 10.963 – 467.169 (2008: 445.082 41.124 141. 10. 1. Had the FSV benefit not recognised.558 (92. controlled firms.642 350.161 544.904 500.054 573.8 In terms of sub-section (3) of Section 33A of the Banking Companies Ordinance.025.829.2 Write offs of Rs.240 1.454 500.000 742.Annual Report | 2009 cash or stock dividend.607 11.550) 631.7.041 12.157 529.963 467. 500.264 220.720 12. associated companies etc.950) 401. 1962 the statement in respect of written off loans or any other financial relief of Rs.5. profit before tax for the year and profit after tax for the year would have been lower by Rs.814.9 Particulars of loans and advances to directors.871. 2009 2008 Rupees in ‘000 10.731 2008 Rupees in ‘000 10.652 247.7. 2009 is given at Annexure-I.604 97.1 Against provisions Directly charged to profit and loss account 10.575 385.683 195.000 and above Write offs of below Rs. 2. 10.560 585.479 page | 95 401.5% on advances other than non-performing advances and consumer financing.967 298.033.264 10.448.575 – – – – – – – – .124 251.184 – 414.000 or above allowed to a person(s) during the year ended December 31.471) 607.

935 111.098.2 Property and equipment 2009 as at January 1.829 13. 2008 – – 160.894 454.844 401.543 Revaluation Surplus – – – – – – – – – – – – Transfers/ (deletions) – – – – (26.983.Askari Bank Limited | Financial Statements Notes to the Financial Statements For the year ended December 31.222 as at January 1.818 501.098.618 457.414.118) (2.779 414.387 DEPRECIATION Charge for the on year (deletions) – – 21.098.719 149.414.448 – – 5 5 20 10 20 20 20 20 20 (118.380 1.024 32.220 1. page | 96 .414. 2008 on the basis of their professional assessment of the present market value.436 959.710 – 332.829 1.819 255.695) (6.2.369) 2.990 (55.990 DEPRECIATION Charge for the on year (deletions) – – 33.686 647.858.014.802 2.211) (16.2.1 Capital work-in-progress Civil works Advances to suppliers and contractors – 1. 176.437 Book value as at Annual December rate of 31.811 1.787 2. 1.462 11.485 924.436 959.489.367 604.103 796. 2008 1.056 166. 2008 404.2 1.950 313.010 11.422 thousand (2008: Rs.198 78.193 thousand).690 1.487.070.098.953 2008 (59.740 13. 2009 1.785 10.867.266.448 8.836 74.155 46.237.804 6.541 730.007 645.010 1.489.237.718 208.475) 2.366 COST Additions 10.026) – as at December 31.430 Book value as at Annual December rate of 31. 2009 depreciation 1.191 476.059 52.033 61.159) (29.066.844 700.867 149.415 159.385 532.684 1.072 334.867.303 49.958 – – – – (26.257 131.986) – as at December 31.593 27.512 2. 2009 – – 181.571. 2009 – – 214.802 2.357.782 163.758 6.861 606.400 56.037 92.885) (357) (11.066 8.199 1.679 605.237.579 Rupees in ‘000 Land –freehold Land –leasehold Buildings on freehold land Buildings on leasehold land Renovation of leased premises Furniture.100.411 9.462) * – as at December 31.819 255.008 734.414.440) 9.220 18.565 5.928 71.610 309.866) (12.678 116.858.618 457.156 308.096 434.357.846.943 465.357 125.657.414.617 292.063 – – – – (13.849 168.346 114.100.010 7.080 330.430 2.491 71.239 94. 2009 Rupees in ‘000 Notes 2009 2008 11.220 946. 2008 – – 181.066 11.059 52.681.809 956.693 5.440 1.517) (277.346 114.284 144.458 – 1.098.066 1.341 387.485 924.570 45. 206. 11.374 9.489.061 (28.525 1.029.462 512.438 (277. fixtures and office equipment Carpets Machine and equipments Computer equipments Vehicles Other assets (69.220 18.100.158.785 8.198) (18.330) (357) (31.105) (505) (14.223 222. OPERATING FIXED ASSETS Capital work-in-progress Property and equipment 11. 2009 1.070.335.485 – 416.528 3.429 1.951) (55.587 254.938) (4.970 570.374 – – 5 5 20 10 20 20 20 20 20 Rupees in ‘000 Land –freehold Land –leasehold Buildings on freehold land Buildings on leasehold land Renovation of leased premises Furniture.156 thousand over book value which was incorporated in the books of account of the Bank during 2008.758 433.411 as at January 1.414.844 583.223 222.898 35.802 25.163 2.462 11.921 198.061) – 183.844 583.158 883.981 7.758 433.105 1.897) (17.995 272.003 100.802 2.719 149.050 549.2 The Bank’s freehold and leasehold land was revalued by valuers approved by Pakistan Banks Association at December 31. 2008 depreciation 1.086) (1.895 19.462) * (65.504 73. fixtures and office equipment Carpets Machine and equipments Computer equipments Vehicles Other assets as at January 1.438 COST Additions 452.341 387.846 2.985) * – as at December 31.050 859.907) (6.029.106 – – – – – – – – – 1.779 414.078.544 19.113 376.257 131.706 509.131 57.512 2.199 1.818 Revaluation Surplus 999.296) (4. The revaluation resulted in a net surplus of Rs.156 Transfers/ (deletions) – (183.961 133.220 946.110) (296) (19.325 511.022 15.779 529.844 915.840 6.516) (18.021 100.1 11.298 367.028) 11.985) * 11.1 Cost of fully depreciated property and equipment still in use is Rs.734 1.

154.2 Provision against other assets Opening balance Charge for the year Reversals Amount written-off Closing balance 459 – – – 459 – 459 – – 459 page | 97 .599 415.Annual Report | 2009 11.334 442 3.010 3.635 1.105 1.964.359 547 1. 1.440 48. Karachi Muhammad Aslam Brothers. OTHER ASSETS Income / mark-up accrued in local currency Income / mark-up accrued in foreign currencies Advances.187 256 509 478 552 215 305 338 2 4.000/.965 8.765 thousand (2008: Rs. 2.770 52. Okara Unique Wood Works.680 142.829 517 1.939 (459) 8.659 52. Mansoor Akbar – Contractual Ex. Mian Shamim Ahmed – Executive Mr. Notes 2009 2008 Rupees in ‘000 12.000.206 655 641 1.784 As per Bank policy -doInsurance claim -do-do-doTrade in -do-doTender Mr.369 65.480 12.173 148.515 640 2.840 69.361.770 (459) 10.977.036.064 25.342 48.188 452 328 384 1.122 1.3 Detail of disposals of operating fixed assets Particulars of assets Original Accumulated cost depreciation Book value Rupees in ‘000 Sale proceeds Mode of disposal Particulars of buyer Toyota Corolla Honda Civic Suzuki Cultus Renovation of leased premises Computer equipments Furniture and Fixtures Generator Data Card Machine Renovation of leased premises Renovation of leased premises Other assets having book value of less than Rs.441 – 15.311 5.996 17.133 15.036.379.423.697 177 89 795 3.558 13.187 450 509 478 552 240 640 31 150 4. 250.857 8.1 This balance has been arrived at after adjusting interest in suspense of Rs 3. advance rent and other prepayments Advance taxation (payments less provisions) Un-realized gain on forward foreign exchange contracts .876 899.929.1 6.639 780 3.131 10. Lahore – Engineers and Consultants Crest Corporation.net of provision 12.net Suspense account Stationary and stamps in hand Dividend receivable Others Less: Provision against other assets Other assets .943 125.886 thousand). deposits.967 16.976 Rupees in ‘000 Notes 2009 2008 12.816 53.028 118.964.2 12.000/other than vehicles sold to Bank’s executives / related party 2009 2008 969 1. Rawalpindi 53.176.720 10.475 5.945 222.300 9.540 59.or cost of less than Rs.Executive Askari General Insurance Company Limited – a related party -do-do-doPower Vision.

Askari Bank Limited | Financial Statements

Notes to the Financial Statements
For the year ended December 31, 2009
Rupees in ‘000 Notes 2009 2008

13.

BILLS PAYABLE In Pakistan 2,945,670 2,584,828

14.

BORROWINGS In Pakistan Outside Pakistan 19,143,378 156,785 19,300,163 15,189,514 634 15,190,148 15,189,514 634 15,190,148

14.1

Particulars of borrowings with respect to currencies In local currency In foreign currencies 19,143,378 156,785 19,300,163

14.2

Details of borrowings - secured / unsecured In Pakistan - local currency Secured Borrowings from the State Bank of Pakistan: Export refinance scheme Long term financing of export oriented projects Repurchase agreement borrowings (repo) Unsecured Call borrowings Outside Pakistan - foreign currencies Overdrawn nostro accounts - unsecured

14.2.1 14.2.2 14.2.3 14.2.4

11,920,153 1,780,058 4,473,167 970,000 19,143,378 156,785 19,300,163

12,090,551 1,811,653 767,310 520,000 15,189,514 634 15,190,148

14.2.1 This facility is secured against demand promissory note executed in favour of the State Bank of Pakistan. The effective mark-up rate is 6.5% (2008: 6.5%) per annum payable on a quarterly basis. 14.2.2 These carry mark-up rate of 5% (2008: 5%) per annum payable on a quarterly basis. 14.2.3 These are secured against pledge of Government Securities, and carry mark-up ranging from 11.65% to 12.02% (2008: 9.5% to 12.5%) per annum and have maturities upto 3 (2008: 3) months. 14.2.4 These represent borrowings at mark-up rates ranging from 11.5% to 12.60% (2008: 14.5% to 15.25%) per annum and have maturities upto 3 (2008: 1) months.
Rupees in ‘000 2009 2008

15.

DEPOSITS AND OTHER ACCOUNTS Customers Fixed deposits Saving deposits Current accounts - non-remunerative Special exporters’ account Margin accounts Others Financial institutions Remunerative deposits Non-Remunerative deposits 47,689,401 110,297,787 44,340,561 21,743 1,853,597 268,063 1,494,658 4,417 205,970,227 39,675,699 80,428,214 43,245,593 30,562 1,983,653 257,099 2,047,388 8,364 167,676,572

page | 98

Annual Report | 2009

Rupees in ‘000

2009

2008

15.1

Particulars of deposits In local currency In foreign currencies 174,277,597 31,692,630 205,970,227 Deposits include Rs. 6,464,595 thousand (2008: Rs. 1,791,611 thousand) due to related parties. 141,885,129 25,791,443 167,676,572

Rupees in ‘000

2009

2008

16.

SUB-ORDINATED LOANS Term Finance Certificates – I Term Finance Certificates – II Term Finance Certificates – III 1,497,300 1,497,600 3,000,000 5,994,900 1,497,900 1,498,200 – 2,996,100

The Bank has raised unsecured sub-ordinated loans in three separate Term Finance Certificates issued to improve the Bank’s capital adequacy. The salient features of the issue are as follows:
Term Finance Certificate - I Outstanding amount Rupees in thousand Issue date Total issue Rating Listing Rate 1,497,300 February 4, 2005 Rupees 1,500 million AA– Lahore Stock Exchange (Guarantee) Limited Payable six monthly - Base Rate plus 1.5% Base Rate is the simple average of the ask rate of six month KIBOR prevailing on the base rate setting date. Repayment Call option 8 Years – Term Finance Certificate - II 1,497,600 October 31, 2005 Rupees 1,500 million AA– Lahore Stock Exchange (Guarantee) Limited Payable six monthly - Base Rate plus 1.5% Base Rate is the simple average of the ask rate of six month KIBOR prevailing on the base rate setting date. 8 Years – Term Finance Certificate - III 3,000,000 November 18, 2009 Rupees 3,000 million AA– Lahore Stock Exchange (Guarantee) Limited Payable six monthly - Base Rate plus 2.5% (after 5 years: 2.95%) Base Rate is the simple average of the ask rate of six month KIBOR prevailing on the base rate setting date. 10 Years Exerciseable after 60 months from the date of issue subject to approval by the SBP. 6-96th month: 0.32% 97-120th month: 99.68%

Redemption

6-90th month: 0.3% 96th month: 99.7%

6-90th month: 0.3% 96th month: 99.7%

Rupees in ‘000

2009

2008

17.

DEFERRED TAX LIABILITIES Deferred credits/ (debits) arising due to: Accelerated tax depreciation Provision against non performing advances – excess of 1% of total advances – classified in sub-standard category Tax loss for the year Deficit on revaluation of available for sale securities 658,636 (275,021) (21,812) – 361,803 (27,878) 333,925 603,937 – – (94,656) 509,281 (496,294) 12,987

page | 99

Askari Bank Limited | Financial Statements

Notes to the Financial Statements
For the year ended December 31, 2009
Rupees in ‘000 2009 2008

18.

OTHER LIABILITIES Mark-up / return / interest payable in local currency Mark-up / return / interest payable in foreign currencies Unearned income / commission Accrued expenses Advance payments Security deposit against Ijarah financing Unclaimed dividends Branch adjustment account Payable against purchase of listed shares Withholding taxes payable Federal excise duty payable Un-realized loss on forward foreign exchange contracts - net Workers’ Welfare Fund Others (Withholding tax payable etc.) 1,698,122 53,960 165,858 407,187 223,682 598,215 37,202 990,844 75,935 27,442 26,385 – 33,515 495,142 4,833,489 1,559,920 92,209 203,750 193,024 119,877 577,965 38,027 1,253,935 7,216 26,496 3,848 347,258 – 335,615 4,759,140

19. 19.1

SHARE CAPITAL Authorized capital
2009 Number of shares 2008

1,200,000,000 19.2

700,000,000

Ordinary shares of Rs. 10 each Ordinary shares of Rs. 10 each: Fully Paid in cash Issued as bonus shares

12,000,000

7,000,000

Issued, subscribed and paid up
Number of shares

67,500,000 439,846,635 507,346,635 19.3

67,500,000 338,377,308 405,877,308

675,000 4,398,467 5,073,467

675,000 3,383,774 4,058,774

Capital Risk Management The Bank’s objectives when managing capital are to safeguard the Bank’s ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Bank may adjust the amount of dividend paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt. In terms of BSD circular No. 7 of 2009 issued by the State Bank of Pakistan, the Bank is required to enhance its existing paid up capital to Rs. 10 billion (net of losses) to be achieved in phased manner as follows:
Minimum paid up capital (net of losses)

By December 31, 2009 By December 31, 2010 By December 31, 2011 By December 31, 2012 By December 31, 2013

Rs 6 billion Rs 7 billion Rs 8 billion Rs 9 billion Rs 10 billion

The required minimum capital requirement can be achieved by the Bank either by fresh capital injection or retention of profits. The stock dividend declared after meeting all the legal and regulatory requirements, and duly disclosed in the annual audited financial statements will be counted towards the required paid up capital of the Bank pending completion of the formalities for issuance of bonus shares. The Bank intends to meet this requirement by way of bonus issue subsequent to balance sheet date, in this year.

page | 100

Annual Report | 2009

Rupees in ‘000

Statutory Reserve

Revenue Reserves

2009

2008

20.

RESERVES Balance as at January 01 Transfer from profit and loss account Bonus shares issued Balance as at December 31 2,912,711 221,559 – 3,134,270 4,754,430 308,980 (1,014,693) 4,048,717 7,667,141 530,539 (1,014,693) 7,182,987 6,948,336 718,805 – 7,667,141

20.1

Reserves as at December 31, 2009 include Rs. 2,241,958 thousand (2008: Rs. 445,798 thousand) in respect of net of tax benefit of 40% (2008: 30%) of Forced Sale Value (FSV) of pledged stocks, mortgaged commercial, industrial properties (land and building only) held as collateral against non-performing advances allowed under BSD circular No 10 of 2009 dated October 20, 2009 and referred in note 10.5.1 above. Reserves to that extent are not available for payment of cash or stock dividend in terms of above referred circular.
2009 2008

Rupees in ‘000

21.

SURPLUS ON REVALUATION OF ASSETS Surplus on revaluation of land (Deficit) / surplus on revaluation of available for sale securities i) ii) iii) Federal Government securities Listed shares Other securities 1,858,156 (88,010) 89,852 (81,492) (79,650) 27,878 (51,772) 1,806,384 1,858,156 (242,800) (1,077,249) (97,933) (1,417,982) 496,294 (921,688) 936,468

Less: related deferred tax effect

22. 22.1

CONTINGENCIES AND COMMITMENTS Direct credit substitutes i) ii) Government Others 2,755,086 6,862,016 9,617,102 3,577,163 7,832,474 11,409,637

22.2

Transaction-related contingent liabilities Money for which the Bank is contingently liable: a) Contingent liability in respect of guarantees given on behalf of directors or officers or any of them (severally or jointly) with any other person, subsidiaries and associated undertakings. Contingent liability in respect of guarantees given, favouring: i) ii) iii) Government Banks and other financial institutions Others 56,911,331 1,083,718 10,404,884 68,399,933 68,412,287 61,883,864 942,566 12,580,856 75,407,286 75,414,831 31,333,855

12,354

7,545

b)

22.3 22.4

Trade-related contingent liabilities Other contingencies These represent certain claims by third parties against the Bank, which are being contested in the Courts of law. The management is of the view that these relate to the normal course of business and are not likely to result in any liability against the Bank.

25,410,721

3,134,363

4,215,064

page | 101

5 Tax contingencies i) For tax assessments carried out to date.493.702 2.611 462.616 4. The income tax department has filed reference applications before the High Court on the above issues which has not yet been admitted for regular hearing.354.8 Commitments in respect of forward exchange contracts Purchase Sale 22.340 million and Rs.7 Commitments in respect of forward purchase / sale of listed equity securities Purchase Sale – – 24.940 795.025 16. the management is hopeful that the High Court will uphold the decisions of Appellate Authorities.886 12. page | 102 .922.300. Notwithstanding the above.650 thousand (2008: 1.10 Commitments to extend credit The Bank makes commitments to extend credit in the normal course of its business but these being revocable commitments do not attract any significant penalty or expense if the facility is unilaterally withdrawn except for Rs 2.722.646. the management is hopeful that the issues in appeals will be ultimately decided in the Bank’s favour. if any. as the Bank will not be required to pay tax on future realization.440 22. tax demands of approximately Rs.607 17. ii) The department issued re-amended assessment orders for tax years 2005 to 2008 on the issue of taxing commission and brokerage income at normal tax rate instead of under the presumptive tax regime and allocation of expenditure to dividend / capital gains.6 Commitments in respect of forward lending Commitments against “REPO” transactions Purchase and resale agreements Sale and repurchase agreements 3.319.571. Rupees in ‘000 2009 2008 22.Askari Bank Limited | Financial Statements Notes to the Financial Statements For the year ended December 31. Such issues however have been decided in the Bank’s favour by the CIT (Appeals) for the Tax Year 2008 except on the issue of allocation of financial expenses.022.550 thousand).391 22. The Income Tax Appellate Tribunal (ITAT) upto Tax Year 2006 has decided appeals in favour of the Bank on the issue of provisions against NPLs.11 Bills for collection Payable in Pakistan Payable outside Pakistan 5. These are accepted by the Bank as an agent and the Bank does not carry any credit risk in respect of these bills. while tax demand for provision for diminution in value of investment has been set aside for all relevant years. Based on advice from tax advisors. 53 million. of these receivables. 2009 2008 Rupees in ‘000 22.763 – 153. 582 million approximately. these will give rise to a deferred tax debit being a timing difference in nature.9 Commitments for the acquisition of operating fixed assets 22.038 3. The Bank has filed appeals against the orders before the ITAT in respect of Tax years 2005 to 2008. For Tax year 2008 and 2009 the appeals are pending before ITAT and the Commissioner Income Tax (CIT) (Appeals) respectively. should these contingencies materialize at a later stage.722.126 15. raising tax demand of Rs. relate to provision against Non Performing Loans (NPLs) and diminution in the value of investments respectively are under litigation.908 10.270 280.257 10. Based on advice from tax consultants.332.626. raised by the tax authorities.300.552.673. 2009 22.130 16. 3.911 Bills for collection represent bills drawn in favour of various financial institutions in Pakistan and abroad on behalf of Bank’s customers.

026 155.008.569.015 21. forward sales and forward purchases on behalf of customers in the inter-bank money market and with the State Bank of Pakistan. 49.682 28.754 13.650. The Bank also enters into repo transactions against Government Securities carrying fixed interest rates and having fixed contractual maturities. These include forwards and swaps in money and foreign exchange markets.091 – 6.156 28.217 thousand) on account of rent received from related parties. page | 103 . The risks associated with forward exchange contracts are managed by matching the maturities and fixing counter parties’ intra-day and overnight limits.528. GAIN ON SALE OF INVESTMENTS .NET Federal Government Securities Market Treasury Bills Pakistan Investment Bonds Term Finance Certificates Shares .092 362.736 3.1 32.743 30.389 thousand (2008: Rs.1 This includes an amount of Rs.045 143.719 27. Off balance sheet financial instruments Off balance sheet financial instruments referred to as derivatives are contracts the characteristics of which are derived from those of underlying assets.714 22.313 25. Rupees in ‘000 Note 2009 2008 25.412 70.992 thousand (2008: Rs.855 304. Note 2009 2008 Rupees in ‘000 26.096 8.423 453. The credit risk associated with repo transactions is secured through underlying Government Securities. these also come under the State Bank of Pakistan’s net open position limits.989) 11.683 12.Listed Others 62. In addition.918 404. 162.221 28.785 1.476 471. The Bank’s exposure in these instruments represents forward foreign exchange contracts.224 468.650.194 4. 24. OTHER INCOME Rent on property Net profit / (loss) on sale of property and equipment Rent of lockers Recovery of expenses from customers 28.537 (3.120 76.753 343.514 559. on behalf of customers in imports and exports transactions.295 thousand) on account of income received from related parties.393 383.506 355. DERIVATIVE INSTRUMENTS The Bank does not deal in derivative instruments.038 13.301 487.704 36.177 14.148.1 This includes an amount of Rs.840.717 266 1.661.1 16.349 18.393.984 998.560 501.319 730. MARK-UP / RETURN / INTEREST EXPENSED On deposits On securities sold under repurchase agreements On sub-ordinated loans On other short term borrowings 11. 24. MARK-UP / RETURN / INTEREST EARNED On loans and advances to: i) Customers ii) Financial institutions On investments i) Available for sale securities ii) Held to maturity securities On deposits with financial institutions On securities purchased under resale agreements 25.336 (856) 47. 19.629.222 10.Annual Report | 2009 23.871.114 3.

TAXATION For the year Current Deferred For prior years Current Deferred 562.368 31.642. allowances.107 511.063 698. vehicle running expenses.521. taxes.099 (27. etc.157 (50.968 33.492 18.651) 534.987 10.794 125.634) – 298 – 534.107 – 10.208 755 661.484 (43. insurance.500 80 4.448 119.969 71.500 30.561 141.808 164. OTHER CHARGES Workers’ Welfare Fund Penalties imposed by the State Bank of Pakistan 33. half year review and the audit of consolidated financial statements Out-of-pocket expenses 2.448 17. allowances and other expenses Rent.784 (40.200 70 2. security services.363 107.827) – 534.713 300.995.916 6.157 461. ADMINISTRATIVE EXPENSES Salaries.1 11.1 Relationship between tax expense and accounting profit Profit before taxation Tax at applicable tax rate of 35 percent (2008: 35 percent) Effect of: – Income chargeable to tax at lower rates – Prior years’ adjustment – Amounts not deductible for tax purposes – Others 1.515 853 34.629 70.904. Legal and professional charges Brokerage and commission Communications Repairs and maintenance Stationery and printing Advertisement and publicity Donations Auditors’ remuneration Depreciation Other expenditure (traveling.588 114.959.827 (119.500 645.3 3.116 101.828 299.153 107. etc.381 152.162 136.) 35.169 2.021 260. electricity.857 2.000 7.412 127.000) 3.157 31.401 519 7.233 75.000) 75.000) – (50.382 161.312 525 5. Charge for defined benefit plan Contribution to defined contribution plan Non-executive directors’ fees. 2009 Rupees in ‘000 Notes 2009 2008 29.405) (50.448 page | 104 .1 Auditors’ remuneration Audit fee Fee for the audit of provident and gratuity funds Special certifications.845 3.987 29.447 109. etc.793 – 5.183 104.958 755.882 655 817.Askari Bank Limited | Financial Statements Notes to the Financial Statements For the year ended December 31.241 574.758 5.2 29.

954.032) 19.472 (326.064 7.591) – 73.numbers Basic / diluted earnings per share .153 48.646 – 120 6.793 507.703 – 541 6. Weighted average number of ordinary shares for 2008 has been restated to give effect of bonus shares issued during the year.393 1.659.771 (49.564 538.635 3.835 (24.635 0.000) – 84.261 100.925) 35.591 (211. The benefit is equal to one month’s last drawn basic salary for each year of eligible service or part thereof.385.346.346.449 Number of employees 34.2 The amounts recognised in the balance sheet are as follows: Present value of defined benefit obligation Fair value of plan assets Unrecognised actuarial losses Net liability 700.275 109.Rupees There is no dilutive effect on the basic earnings per share of the Bank. 1.843 8.252 1.718 136.560 35.000 (219. The benefits under the gratuity scheme are payable on retirement at the age of 60 years or earlier cessation of service in lump sum.000 27.881) 211.159 1.4 Actual return on plan assets page | 105 .1 DEFINED BENEFIT PLAN General description The Bank operates an approved funded gratuity scheme for all its regular employees.635 2.384 (481.696 80.384) 219. Contributions are made in accordance with the actuarial recommendation.111 7.225 507. 35.270 4.107. CASH AND CASH EQUIVALENTS Cash and balances with treasury banks Balances with other banks Call money lendings 19.804) 16.000 20.810 43. STAFF STRENGTH Permanent Temporary / on contractual basis Daily wagers Commission based Bank’s own staff strength at the end of the year Outsourced Total staff strength at the end of the year 4.76 Rupees in ‘000 2009 2008 33.814 675.104 16.496 1.850.3 The amounts recognised in profit and loss account are as follows: Current service cost Interest on obligation Expected return on plan assets Actuarial loss recognised 35.116 (2.029. BASIC / DILUTED EARNINGS PER SHARE Profit for the year .364.Rupees in ‘000 Weighted average number of Ordinary Shares . Rupees in ‘000 2009 2008 35.Annual Report | 2009 Rupees in ‘000 2009 2008 32.18 386.

384 248. Defined benefit obligation Plan assets Deficit Experience adjustments Actuarial loss on obligation Actuarial loss on plan assets 700.591 (9.years 35.881 18 47 35 100 35.384 438.384 (481.992) (3.384 – 66 34 100 57.230 (7.771 26.032 (468) 136.756) 438.per annum Expected rate of return on plan assets .804 (27.987) (6.881 49.472 84.337 481.810 43.5 Changes in the present value of defined benefit obligation Opening defined benefit obligation Current service cost Interest cost Actuarial loss Benefits paid Closing defined benefit obligation 538.8 Principal actuarial assumptions The actuarial valuation was carried out for the year ended December 31.452 153.756) 109.214) 700.354 73.472 (326.047 164.659 (30.242 (35.per annum Average expected remaining life of employees .511 (182. The expected return on plan assets is based on the market expectations and depends upon the asset portfolio of the Bank.621 326. The main assumptions used for actuarial valuation are as follows: 2009 2008 Discount rate .281) 17. at the beginning of the period.881 The Bank expects to contribute Rs.9 Amounts for current and previous four annual periods are as follows: 2009 2008 2007 13% 13% 13% 8 15% 15% 15% 9 Rupees in ‘000 2006 2005 As at December 31. for returns over the entire life of the related obligation.040 24. 2009 using “Projected Unit Credit Method”. 146.696 80.323) 538.116 (27. 2009 Rupees ‘000 Percentage Rupees ‘000 2008 Percentage 35.214) 481.Askari Bank Limited | Financial Statements Notes to the Financial Statements For the year ended December 31.384) 219.747) 266.per annum Expected rate of increase in salaries .040) 190.881) 211.523) (489) 199.472 35.835 9.314 (132.796) (27.659) (468) 538.551 thousand to its defined benefit gratuity plan in 2010.6 Changes in fair value of plan assets Opening fair value of plan assets Expected return Actuarial losses Contributions by employer Benefits paid Closing fair value of plan assets 326.7 Break-up of category of assets Defense saving certificates Pakistan Investment Bonds Bank deposit account – 317.808 115.323) 326.354 (248.931) 53.707) page | 106 . 2009 Rupees in ‘000 2009 2008 35.796 (27.153 (30.173 (212.000 (26.

026 37.871 thousand has been included under administrative expenses. regular employees are entitled to 30 days privilege leave for each completed year of service. Present value of obligation as at December 31.312 87. 33. Under this unfunded scheme.065 2.303 47.365 472 – 423.752 37.Annual Report | 2009 36. These are encashable on the basis of last drawn gross salary.1 COMPENSATED ABSENCES General description The Bank grants compensated absences to all its regular employees as per effective Service Rules. Expense for the year of Rs.144 67. Chief Executive is also provided with Bank maintained car. The main assumptions used for actuarial valuation are as follows: 2009 2008 Discount rate . COMPENSATION OF DIRECTORS AND EXECUTIVES President / Chief Executive Rupees in ‘000 2009 2008 2009 Directors 2008 13% 13% 5 15% 15% 5 Executives 2009 2008 Fees Managerial remuneration Charge for defined benefit plan Contribution to defined contribution plan Rent and house maintenance Utilities Medical Special performance incentive / Bonus Number of persons 105 9.314 900.390 1.442 thousand against related liability of Rs.137 1 110 6. 2009 was Rs.719 908.700 600 600 1.371 75.33% of basic salary of the employee.529 464 Executives mean employees.312 42. other than the chief executive and directors.per annum Leave accumulation factor .517 190. 37. DEFINED CONTRIBUTION PLAN The Bank operates a recognised provident fund scheme for all its regular employees for which equal monthly contributions are made both by the Bank and by the employees to the fund at the rate of 8.862 45.571 thousand carried at December 31.000 7.215 2 655 – – – – – – – 655 10 755 – – – – – – – 755 10 – 453.404 42. 149. 115. Provisions are made in accordance with the actuarial recommendation.540 19.2 Principal actuarial assumptions The actuarial valuation was carried out for the year ended December 31. 2008.158 924 1. 37.days 38. Unutilized privilege leave are accumulated upto a maximum of 120 days which could be encashed at any time of retirement or can also be encashed during service. page | 107 . 2009 using “Projected Unit Credit Method”. 37.121 55.630 1.per annum Expected rate of increase in salaries .737 203.240 770 770 4. whose basic salary exceeds five hundred thousand rupees in a financial year.750 20.

190.611 3.814 4.046.689.677.493. non-performing advances and fixed term deposits cannot be calculated with sufficient reliability due to absence of current and active market for such assets and reliable data regarding market rates for similar instruments.319.996.036.206.401 5.614.616 15.148 128.323. non-performing advances and fixed term deposits is not significantly different from the carrying amounts since assets and liabilities are either short term in nature or in the case of customer loans and deposits are frequently repriced.006 2.964.955 5.383.826 47.702 17.699 2.319.481.280. page | 108 .873 39.493.945.607 4.006 2.140 193.680 2.788 39.922.383.994.900 – 4.814 4.954.616 24.759.036.635 3.206.2 Off-balance sheet financial instruments Forward purchase of foreign exchange Sale and repurchase agreements Forward sale of foreign exchange Purchase and resale agreements 24.843 8.280.689.940 The fair value of investments is based on quoted market prices and rates quoted at Reuters Pages (PKRV) with the exception of unlisted securities.270 2.480 197.190.489 239.755 35.401 5. FAIR VALUE OF FINANCIAL INSTRUMENTS 2009 Rupees in ‘000 Book value Fair value Book value 2008 Fair value 39.964. staff loans. Fair value of fixed term loans.825.996.029.000.670 19.924.900 – 4. The provision for non-performing advances has been calculated in accordance with the Bank’s accounting policy as stated in note 5.163 158.512 78.391 10.833.675.611 3.755 35.300.788 16.059 67.489 239.680 2.449 16.323.571.1 On-balance sheet financial instruments Assets Cash and balances with treasury banks Balances with other banks Lendings to financial institutions Investments Advances Term loans Staff advances Other advances Other assets Liabilities Bills payable Borrowings Deposits and other accounts Current and saving accounts Term deposits Sub-ordinated loans Liabilities against assets subject to finance lease Other liabilities 19.945. The maturity profile and effective rates are stated in note 44.364.646.257 795.635 3.385.646.364.261 4.449 19.512 78.059 67.159.922.032 10.100 – 4.833.Askari Bank Limited | Financial Statements Notes to the Financial Statements For the year ended December 31.033 51.159.044.605 89.833.584.675.261 4.311 244.873 39.754 35.4.300.140 193. held to maturity securities and National Prize Bonds.826 47.955 5.100 – 4.637 3.825.4.614.481.327.391 10.759.677.722.924.2.000.044.327.605 89.670 19. 2009 39.637 3.148 128.843 8.029.702 17.994.479.699 2.954.479.311 244.480 197.257 795.032 10.000 8.828 15.163 158.033 51.833.552. staff loans.722. Fair value of remaining financial assets and liabilities except fixed term loans.000 8.571.940 15.607 4.754 35.552.385.584.270 2.046.828 15.

129.708 4.084. SEGMENT DETAILS WITH RESPECT TO BUSINESS ACTIVITIES The segment analysis with respect to business activity is as follows: 2009 Rupees in ‘000 Corporate Finance Trading and Sales Retail Banking Commercial Banking Payment and Settlement Agency Services Assets Management Retail Brokerage Sub-Ordinated Loans Total income Total expenses Net income (loss) Segment Assets (Gross) Segment Non Performing Loans Segment Provision Required Segment Liabilities Segment Return on net Assets (ROA) (%) Segment Cost of funds (%) 129.01% 6.567 15.064.129.02% 222.03% 0.01% 134.400 45.963.387 3.444 – – 797 0.00% 0.717 0.759 30.43%) of the total liabilities have been allocated to segments based on their respective assets.976 160.443.519 68.132.413 8.567 188.984 (559.284.50% 41.671 36.99% (2008: 5.681 17.418 318.073.826.680 0.51% 10.00% – – – – – – – 0.285.785 (383.420.668 232.486 0.00% 0. Unallocatable liabilities representing 1. page | 109 .00% – – – – – – – 0.860.403 9.870.446.299 61.00% – – – – – – 0.01% 2008 12.76%) of the total assets have been allocated to segments based on their respective incomes.21% Assumptions used: – – – Administrative expenses have been allocated to segments based on respective segment income.Annual Report | 2009 40.00% 10.939 – – 7.099 1.164 189.554 0.160 0.403 30.254 224.06% 0.553 18.322 10.03% 2.705 – – 792 0.00% 0.736 61.351 39.00% 0.250 355.424 1.641.62% 19.04% 0.863.673 (251.660 96.242 3.136 23.29% (2008: 1.095 1.129 2.328 37.329 9.741 – – 17.903.984) – – – 6.701 – – 5. Unallocatable assets representing 4.10% 0.154.862.274 – – 2.052.108 – – 520 0.829 6.00% – 559.093 19.963 2.02% 1.565 0.944 11.264 9.00% 0.26% Total income Total expenses Net income (loss) Segment Assets (Gross) Segment Non Performing Loans Segment Provision Required Segment Liabilities Segment Return on net Assets (ROA) (%) Segment Cost of funds (%) 54.00% 0.02% 0.74% 0.918 9.843 199.694 10.323 232.399) 248.152 93.280 2.274 22.780 1.00% – 383.24% 85.486 – – 75 0.833 734.07% 0.499 1.00% 0.01% 0.356 0.754 15.00% – – – – – – 0.124.34% 21.473.185 23.168.24% 0.785) – – – 3.049.

722 – 57.619 – 12.268 – 309.035 – – – – – – – – – – – – 49.789 – – – – – – – 7.886 23.Askari Bank Limited | Financial Statements Notes to the Financial Statements For the year ended December 31.at cost Transactions during the year ended – Net mark–up / interest earned – – – – – – – – – – – – – Net mark–up / interest expensed Contribution to employees’ funds Rent of property / service charges received Rent of property / service charges paid Remuneration paid Post employment benefits Insurance claim received Insurance premium paid Dividend Income Security services costs Fee.899 – – – – – – 105 – 581 – – – – – – – – – – – 655 158. commission and brokerage income Payments and recovery to / from AIML a wholly owned subsidiary of the Bank Fees paid Key management Parent Personnel Employee Funds Key management Parent Personnel Employees Funds – 5.925 73. entities over which the directors are able to exercise significant influence and employees’ funds.873 47.789 – – – 1.910 244. RELATED PARTY TRANSACTIONS As Army Welfare Trust (AWT) holds 50.336 – 11.220 – – – 155.315 869 – – – 11.875 – 780.497 – 251 – – – – – – – – 138 – – 992 210.125 – – 3.529 – 143.602.354 – 212.958 – – – – – – 379 – – 3.713 – 163.160 165 – – – 3.545 – 712.420 580.063 631. key management personnel. therefore.378 34.991 – 273 – – – – – – – – – – – 1. all subsidiaries and associated undertakings of AWT are related parties of the Bank. 2008 Companies with common directorship having equity Subsidiary Directors under 20% Companies Rupees in ‘000 Balances outstanding as at – Advances – Deposits – Outstanding commitments and contingent liabilities for irrevocable commitments and contingencies – Investment in shares / Lendings.532 – – – – – – 296 – – 2.671 – 1.794 59.523 – 164.886 97.662 67.029 – 12.088 212 – – – 127.623 – – – – – 12.356 32. the Bank has related party relationships with its subsidiary companies.137 51.080 72. 2009 Companies with common directorship having equity Subsidiary Directors under 20% Companies December 31.644 524 59.904 609. Also.974 – – – – – – 110 – 2.455 – 177.596 12. Details of transactions with related parties and balances with them at the year end were as follows: December 31.17 % (2008: 50.242 583.440 – – 1.324 – – – – – – – – – – – page | 110 .502 56. 2009 41.434 11.947 74.678 25 11.500. its directors.815 – 7.816 – – – – – – – – – – – 755 47.595 1.346 129.248.207 23.17 %) of the Bank’s share capital at the year end.

The total risk-weighted exposures comprise the credit risk.25 % of total risk weighted assets). Askari Investment Management Limited (AIML) and Askari Securities Limited (ASL). 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. after deductions for certain specified items such as book value of intangibles. reserves (excluding foreign exchange translation reserves) and unappropriated profits (net of losses) etc. the Bank does not indulge in any securitization activity that shields it from the risk inherent in securitization.2 Capital Management The objective of managing capital is to safeguard the Bank’s ability to continue as a going concern. majority and significant minority investments in insurance and other financial entities.. so that it could continue to provide adequate returns to shareholders by pricing products and services commensurately with the level of risk. The total of Tier II and Tier III capital has to be limited to Tier I capital.Annual Report | 2009 42 42. It is the policy of the Bank to maintain a strong capital base so as to maintain investor. which includes fully paid-up capital. 50% of other deductions e. Furthermore. or any other financial entities nor does it has any majority or significant minority equity holding in an insurance excludes it from a need for further consolidation. Tier II capital. includes subordinated debt subject to a maximum of 50% of total Tier I capital and fulfillment of specified criteria laid down by the State Bank of Pakistan.g. page | 111 . The fact that Askari Bank has neither any significant minority investments in banking. creditor and market confidence and to sustain future development of the business. market risk and operational risk. 50% of other deductions noted above are also made from Tier II capital. considering the requirements set by the regulators of the banking markets where the Bank operates Maintain strong ratings and to protect the Bank against unexpected events Availability of adequate capital at a reasonable cost so as to enable the Bank to operate adequately and provide reasonable value added for the shareholders and other stakeholders Bank’s regulatory capital analysed into three tiers Tier I capital. Tier III supplementary capital. foreign exchange translation reserves etc. which consists of short term subordinated debt solely for the purpose of meeting a proportion of the capital requirements for market risks. 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). securities.1 CAPITAL ADEQUACY Scope of Applications Standardized Approach is used for calculating the Capital Adequacy for Market and Credit risk while Basic Indicator Approach (BIA) is used for Operational Risk Capital Adequacy purpose. general provisions for loan losses (up to a maximum of 1. 42. share premium. 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. Both these entities are included while calculating Capital Adequacy for the Bank using full consolidation method. The bank currently does not have any Tier III capital. AIML is the wholly-owned subsidiary of Askari Bank Limited while ASL is 74% owned by the Bank. The Bank has two subsidiaries. Goals of managing capital The goals of managing capital of the Bank are as follows: – – – To be an appropriately capitalised institution.

bank guarantees and other debt securities that fall within the definition of eligible collaterals and also fulfill other specified criteria under the relevant capital adequacy guidelines. are applied using the assessments by various External Credit Assessment Institutions (ECAIs) and aligned with appropriate risk buckets.395) 6. 2009 The capital to risk weighted assets ratio.811 page | 112 .3 Capital adequacy ratio as at December 31. lien on deposits. cash.395) 4.328 – (106. Rupees in ‘000 2009 2008 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 Deficit on account of revaluation of investments 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 I capital) General provisions for loan losses subject to 1. where available. government securities. shares. Risk weights notified. 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.796. 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.462.987 886.121.Askari Bank Limited | Financial Statements Notes to the Financial Statements For the year ended December 31.234 – – (106.774 7.395) 13.073.395) 11.689) (106. 2009 On and off-balance sheet assets in the banking book are broken down to various asset classes for calculation of credit risk requirement. In addition. 42.229 – 15.114.040 5. As the Bank carries on the business on a wide area network basis.980 – (921.141 308.426. using Basel II standardised approaches for credit and market risks and basic indicator approach for operational risk is presented below. are used as credit risk mitigant after applying appropriate haircuts under the Comprehensive Approach. Otherwise. the exposures are treated as unrated and relevant risk weights applied. wherever credit risk mitigation is available.182.170 – (106. calculated in accordance with the State Bank of Pakistan’s guidelines on capital adequacy. The calculation of Capital Adequacy enables the Bank to assess the long-term soundness.396.667.293 4.556 – 19.849 2.574 836.467 7. There has been no material change in the Bank’s management of capital during the period.880 987. External ratings for assets.006. Collaterals used include: Government of Pakistan guarantees.683 800.25% 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 4. Collaterals if any. are hence applied at adjusted exposures.058.940 935.036.

018.015.513 20.186 384.297 11.631.849 165.467.355 14.327 75.959.981 329.308 1.595.597 266.920 320.928 2.021 984.197 2.975 128.862 8.804 113.185 2.462.204.849.438 5.767.457 3.040 164.Annual Report | 2009 Risk weighted exposures Capital Requirement Rupees in ‘000 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 Forward Foreign Exchange Contracts Market risk Portfolios subject to standardised approach Interest rate risk Equity position risk Foreign exchange risk Operational risk Total 6.266.064 – 743.846.337 2.440 1.898 12.821 568.592 247.901 2.851 2.038.263.711 1.380.434 85.048 330.736.595.287.662.307 170.970 122.057 164.121.959.694 1.261 628.014 22.944 12.175 228.595.024 6.628 267.559.395.533 7.348 Capital adequacy ratio Total eligible regulatory capital held Total risk weighted assets Capital adequacy ratio 19.384.018 22.965.338 441.083.229.75% 15.608 6.180.934 – 8.650 39.898.239.344 9.928 11.702 683.714 165.196 3.344 146.378 124.006 6.22% page | 113 .300 24.836.070 1.539 451.621.750.500 60.872.780 11.864 3.405 33.134 89.083.471 16.041 1.644 187.315.212 9.969.239 7.238 18.

whilst spreading the risk over a large number of individual customers and Agriculture Credit products. classification of investments (note 9) provision against investments (note 9. risk management framework comprises of a Risk Management Committee (RMC) and a risk management group. 2009 43. monitoring and controlling of the Bank’s principal business risks. adherence to internal risk management policies and compliance with risk related regulatory requirements. It’s credit evaluation system comprises of well-designed credit appraisal. The Bank uses estimates and assumptions concerning the future. Dedicated resources are assigned to scrutinize corporate. SME. During the year portfolio monitoring department also prepared the Internal Capital Adequacy Assessment Process (ICAAP) and Risk Appetite Policy of the Bank. 44. sanctioning and review procedures for the purpose of emphasizing prudence in its lending activities and ensuring quality of asset portfolio. It also requires management to exercise its judgment in the process of applying the Bank’s accounting policies. USE OF CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS The preparation of financial statements in conformity with approved accounting standards as applicable in Pakistan requires the use of certain accounting estimates. deposits.) to its customers. Consumer Banking products (Personal Finance. 44. Estimates and judgments are continually evaluated and are based on historical experience and other factors. The Bank takes necessary measures to control such risk by monitoring credit exposures. Risk Management Division has an independent Portfolio Monitoring Department. commercial. Special attention is paid to the management of non-performing loans.Askari Bank Limited | Financial Statements Notes to the Financial Statements For the year ended December 31. The areas where assumptions and estimates are significant to the Bank’s financial statements or where judgment was exercised in application of accounting policies are as follows: i) ii) iii) iv) v) vi) 44. The Bank is further diversifying its asset portfolio by offering.1. measurement.1 Segment information Segmental Information is presented in respect of the class of business and geographical distribution of advances. contingencies and commitments. seldom equal the related actual results. page | 114 .1 Credit Risk: Credit risk is the risk that arises from the potential that an obligor is either unwilling to perform an obligation or its ability to perform such obligation is impaired resulting in economic loss to the Bank. including expectations of future events that are believed to be reasonable under the circumstances.2. RMC is a Board level sub-committee primarily responsible for the identification. The Bank has built and maintains a sound loan portfolio in terms of a well defined Credit Policy approved by the Board of Directors. primarily aimed to provide quick and cheap credit to the farmers at their door-steps in a simplified manner. The credit portfolio is well diversified sectorally with manufacturing and exports accounting for the bulk of the financing which is considered to be low risk due to the nature of underlying security. The Bank will also continue its emphasis on diversification of its assets to avert large single industry or group concentration exposures.1) and advances (note 10) revaluation of freehold and leasehold land (note 11) useful life of property and equipments (note 11) income taxes (note 31) staff retirement benefits (note 35 to note 37) RISK MANAGEMENT Diversity of financial products and activities. At Askari Bank Limited. limiting transactions with specific counter parties with increased likelihood of default and continually assessing the creditworthiness of counter parties. deregulation and increased level of competition has necessitated the need for an effective and structured risk management in banks. by definition. market and operational risks. and agriculture portfolio on a continuous basis and report crucial findings to the senior management for strategic decision making. The Bank constantly monitors overall credit exposure and takes analytical and systematic approaches to its credit structure categorized by group and industry. A procedure is also functioning which identifies loans showing early warning signals of becoming non-performing. Business Finance. Mortgage Finance and Auto Financing etc. The focus of the Bank’s commercial lending continues to be short-term trade related financing on a secured and self liquidating basis. The risk management group is mainly responsible for managing credit. Risk factors are identified and necessary actions are recommended to mitigate these risk factors. as it provides better margins than traditional business lending opportunities. consumer. The resulting accounting estimate will.

637.904 59.927 156.24 0.343 4.908 345.042 1.60 0.341.162 587.748 1.236 515.00 100.682 5.686.01 0.282 2.512.08 1.37 0.976.762 19.447 1.51 0.311 441.11 0.974 3.25 0.87 89.023 50 77.523 147.49 0.308 205.88 0.64 4.75 0.601 1.072.333.63 0.531.657 2.250 55.69 0.898.689 32.12 100.030 565.30 0.580.873 353.14 100.550 1.275 2.2 Segment by sector 2009 Advances Rupees in ‘000 Percent Deposits Rupees in ‘000 Percent Contingencies and Commitments Rupees in ‘000 Percent Public sector / Government Private 16.1.598.799 141.227 28.060 9.18 0.73 0.002 200.000 601.272 4.447 – 63.777.885.429 2.161 4.76 18.70 0.615.528.047. Hotelling & Traveling) Sports goods Sugar Surgical equipment / Metal products Synthetic and Rayon Textile Tobacco / Cigarette manufacturing Transport and Communication Travel Agencies Woolen Public sector / Government Others 6.08 4.41 0.47 1.956.607 87.36 100.297.266 54.01 2.692 10.800 521.611 121.05 2.431 137.03 0.261 570.00 0.33 10.03 10.094 159.348 6.543 168.823.71 0.349 58.870 227.982 161.328 2.237 585.00 44.079 2.438.157.00 0.135 266.23 0.837 697.27 0.785.572.985.511 3.920 465.55 0.540.216 4.970.34 0.27 2.03 0.10 0.011.240.076 317.932.49 0.25 0.415 46.628.128 936.10 0.45 – 3.219.23 0.04 0.708.546.438.00 59.02 0.820 14.615.930 159.00 54.67 0.80 0.81 0.820 131.00 2.473 544.10 0.490 40.00 page | 115 .40 0.032 167.097 16.23 0.04 0.37 0.1.90 1.774 5.00 11.39 0.03 0.673 61.140.799 6.227 1.451 6.06 0.958 114.1 Segment by class of business 2009 Advances Rupees in ‘000 Percent Deposits Rupees in ‘000 Percent Contingencies and Commitments Rupees in ‘000 Percent Agriculture / Agribusiness Automobiles & Allied Cables / Electronics Carpets Cements Chemicals / Pharmaceuticals Engineering Fertilizers Food and Allied Fuel / Energy Ghee and Edible oil Glass and Ceramics Hotels and Restaurants Individuals Insurance Investment banks / Scheduled banks Leasing Leather products and Shoes Modarabas Paper and Board Plastic products Ready-made garments Real estate / Construction Rice processing and trading Rubber products Services (Other than Financial.22 0.007 8.82 0.11 2.701 582.002 16.481 97.088 960.310.501 3.556.03 2.02 – 0.15 35.64 1.580 19.985.53 4.110.95 0.86 71.08 0.03 0.200.1.689 146.324 2.047.00 18.04 0.115.17 0.617 2.370.72 – 0.09 1.091 342.696 777.34 0.422 11.512 1.439 1.202 2.87 10.53 0.202 663.08 0.11 1.286 72.001.438.881 1.1.374 469.328 141.Annual Report | 2009 44.421 3.336 72.34 100.072.954.856 8.496 5.00 0.441 21.07 0.10 1.538 205.062 27.32 0.254.64 88.488 – 500.165 18.03 28.372 376.23 1.069.73 0.64 5.151 37.04 – 0.628.669 942.054 580.01 0.43 0.63 4.25 0.422 0.88 1.962.844 19.13 100.903 1.443 – 398.00 1.997.645 1.28 0.777 72.933.05 0.533 147.096.388 – 4.782 52.847 76.21 5.654.11 0.14 13.36 5.771 2.564 115.86 16.343 10.06 0.00 1.970.41 2.00 1.01 0.

808 1.3 Details of non-performing advances and specific provisions by class of business segment 2009 Rupees in ‘000 Classified Advances Specific Provision Held Classified advances 2008 Specific Provision Held Agriculture / Agribusiness Automobiles & Allied Cables / Electronics Chemicals / Pharmaceuticals Food & Allied Fuel / Energy Individuals Leather products and Shoes Real estate / Construction Services (Other than Financial.499 66.388 511.577 3.1 Others 1.658.111.1. 4.4 Details of non-performing advances and specific provisions by sector Public sector / Government Private – 17.542 50.355 156.725.637 88.072 159.810.1.741 2.616 787.568 1.500 – – – 4.832 1.025.446 14.161 – 11.5.781 32.327.164 118. page | 116 .110.220 25.426 36.357 198.5.1.985.782 294.689.946 – 254.025.770 546.689.644 109.725.906 845.689.733 thousand (2008: Rs.548.737 5.1.111.157 10.592.407 41.826.186 28.289 173.722 – – – 161.1.658.931 48.710 22.5 Geographical segment analysis 2009 Profit before taxation Total assets employed Net assets employed Contingencies and Commitments Rupees in ‘000 Pakistan Asia Pacific (including South Asia) Europe United States of America and Canada Middle East – note 45.350 thousand) eliminated upon consolidation of foreign branch results.417 – 10.157 44.725.642.188 678.520.036 11.425 2.985.855 113.451 – 572.576 1.157 44.995. Hotelling & Traveling) Textile Glass manufacturing Commodities Metal industries Paper industries Sports goods Others 162. 5.546 – 14.436 1.187 356.417 568.1 These do not include intra group items of Rs.161 11.005 501.951 138.819 398.270.782 447.431.5.951 299.109 278.161 26.417 11.277.516.664 1.808.609.198 19.230 383.480.422 – – – – – 159.025.2 Contingencies and commitments include amounts given in note 22 except bills for collection.192 10.915 1.252 3.354.248 1.451 – 11.186 302.949.519 – 1.400 178.Askari Bank Limited | Financial Statements Notes to the Financial Statements For the year ended December 31.241 249.075 105.493 661.1.658.417 – 451.911.095 678.176 451.1.1.328.451 17.1.895 17.418 156.757 169.176 746.1.422 44.396 785.863 3.163 887.724 959.1.342 497. 2009 44.802 11.976 47. 44.201 640.526 – – – 140.025.739 1.925.

525 1.2 Credit risk .533 – 1.024 1.253 4.037 220.333 254.467.106 – – – – – 184.237.316.1 Types of exposures and ECAIs used For domestic claims. Foreign exposures not rated by any of the aforementioned rating agencies were categorized as unrated.1.892.094 48.381 164. namely Pakistan Credit Rating Agency Limited (PACRA) and JCR-VIS Credit Rating Company Limited (JCR-VIS) were used.104.892.627 154. For foreign currency claims on sovereigns.860 12.288.599.357 – 1.781.757 – 26.659 228. ECAIs recommended by the State Bank of Pakistan (SBP).693 2.449.573 page | 117 .524 129.095 – 952. Moody’s & Fitch Sovereigns other than PKR claims PSEs Banks Corporates Credit exposures subject to standardised approach – 3 3 3 – 3 3 3 3 – 3 3 2009 Exposures Rating category Amount outstanding Deduction CRM* Net Amount Amount outstanding 2008 Deduction CRM* Net Amount Sovereigns PSEs PSEs Banks Corporates Corporates Corporates Corporates Unrated Total * CRM= Credit Risk Mitigation 4.2.5 1 2 1.670.024 2.801.146 6.3 1 2 3.811.485.693 2.606.347.095 – 952. Type of exposures for which each agency is used in the year ended 2009 is presented below: Exposures JCR-VIS PACRA S&P.2.000 9. Moody’s.037 193.000 – – – 98.347.146 6. Basic Indicator Approach (BIA) is used for Operational Risk Capital Adequacy purposes.930 1. For claims on foreign entities.203.316.467.000 757 12.882 – 10. and Fitch Ratings were used.000 9.General disclosures basel II specific Basel II Standardized Approach is used for calculating the Capital Adequacy for Credit Risk and Market risk.157 177.524 128.Annual Report | 2009 44.1. risk weights were assigned on the basis of the credit ratings assigned by Moody’s.336.809.829. rating of S&P.253 4.776 12.674 26.999.860 12.024 2.599.4 5.888 144.384 167.814.013.791.570 90.6 1.131 144. (along with Comprehensive Approach for Credit Risk Mitigation CRM) whereas.570 90. 44.811.563.

page | 118 . etc. at a 99% confidence interval over a 1-day and 10-day holding period for equity and debt positions in the trading book. book debts. in particular interest rate risk in the banking book. originates from the Bank’s open positions in interest rate. – Residential / commercial mortgage (registered) – Residential / commercial mortgage (equitable) – Secured by agricultural land – Registered charge on stocks.cheques / documentary bills – Import bills . The Market Risk Management Department (“MRMD”) of the Risk Management Division (“RMD”) of the Bank develops and implements the market risk policy and risk measuring / monitoring methodology. and the risk is controlled by ensuring that these positions do not breach regulatory limits and the Bank’s own internally set limits. Non-traded market risk factors include interest rate risk in the banking book. currency. possible worst-case losses are also quantified by MRMD using historical data. The MRMD monitors risk by revaluing all traded market risk exposed positions on a daily basis. Back testing of VaR estimates against hypothetical P&Ls is carried out on daily basis in order to assess their reliability and the performance of the VaR models. VaR is modeled using variance-covariance and historical approaches. In compliance with Basel requirements. The Bank has a policy of identification. and equity products that are exposed to market movements. Banks. DSCs.2 Market Risk: Market risk.perishable / non-perishable – Shares of public listed companies – Guarantees of Government.clean – Export bills – clean Collateral used by the Bank for Credit Risk Mitigation (CRM) in the simple approach was as follows: – Cash margin – Government Securities (with value discounted by 20%) – Government Securities (for repo-style transactions satisfying conditions for zero-H) – Guarantees of Government. and foreign exchange positions throughout the trading and banking books. receivables and other assets – Pledge of stocks . and structural foreign exchange risk arising from the Bank’s capital investments in off-shore operations. Sensitivity analysis are carried out to gauge the impact of extreme market movements on traded exposures and stress testing as per SBP guidelines is used to assess non-traded market risk. monitoring and control of market risks in order to protect against adverse movements in market factors and to optimize the risk / return profile of its open positions. Banks Autonomous bodies – Local bills .Askari Bank Limited | Financial Statements Notes to the Financial Statements For the year ended December 31. equity position risk arising from the Bank’s strategic investments. A Value-at-Risk (“VaR”) methodology is used to measure traded market risk. – Cash margins or deposits under lien – Lien on SSCs. PSEs and rated Corporates 44. measurement. Market risk capital charge for the Bank is also calculated periodically using Basel II Standardized Approach. or the risk that the Bank’s earnings and / or capital can be negatively impacted by changes in market factors such as equity prices. and exchange rates. 2009 Following is list of main types of collateral taken by the Bank. Traded market risk exposures arise from the Bank’s treasury and capital market operations. and reviews and reports market risk against regulatory and internal limits. interest rates. To supplement the VaR figures.

885.471.243) (1.477.3 Yield / Interest Rate Risk in the Banking Book (IRRBB)-Basel II Specific The Bank’s interest rate exposure originates from its investing.Annual Report | 2009 44.624. The Asset and Liability Management Committee (ALCO) of the Bank monitors and controls mismatch of interest rate sensitive assets and liabilities.138 968 2.375. Dollars Pound Sterling Japanese Yen Euro Other European Currencies Other Currencies 219. Strategic investments are undertaken in line with long-term strategy of the Bank. 2009 Off-balance sheet items Net foreign currency exposure (Rupees in ‘000) Assets Liabilities Pakistan Rupees U. The net open position and nostro balances are maintained with in statutory limits.292 239.514) 63.406 (5. Interest rate risk in the banking book is the risk of adverse changes in earnings and / or capital due to mismatched assets and liabilities in the banking book.006 207.1 Foreign Exchange Risk Foreign exchange risk is the risk that the earnings and / or capital will fluctuate due to changes in foreign exchange rates.044.996 (5.514 26. All equity positions in held for trading and available for sale portfolios are subject to exposure limits established by the Bank in line with general limits prescribed by SBP in its Prudential Regulations.639 2.898 – 8. VaR is calculated for consolidated foreign exchange exposure with Treasury on a daily basis. portfolio limits. The Bank manages its foreign exchange exposures by matching foreign currency assets and liabilities.481. available for sale.2 Equity position risk Equity position risk is the risk that the value of the Bank’s equity positions can change as a result of broad equity market and security-specific movements.756 (11. exposure limits.957) 66.407. lending and borrowing activities. balances with banks abroad. as fixed by SBP and counterparty limits have been established to limit risk concentration. These limits include intraday limits. foreign currency placements with State Bank of Pakistan (SBP).101) – 110.651.S. page | 119 .580 244. The MRMD calculates duration and convexity measures to assess the impact of interest rate changes on its investment portfolio.560. and sectoral limits.007. The Bank’s foreign exchange exposure consists of foreign currency cash in hand.2. Available for sale equity investments are made with the intent to earn profit from company and industry fundamentals. Held for trading equity exposures are undertaken to earn profit through market imperfections and arbitrage opportunities and hence of a short-term nature.133.682.569.2.826 837. Daily sensitivity analysis of the net open position to a change in ISD/ PKR parity is also carried out.695 4.216) 6. purchase of foreign bills.471 1. The equity exposures are revalued and scrip-wise / portfolio VaR is calculated on a daily basis. forward contracts.456 – 19.450.744 5. 44.815 (36. foreign currency deposits and capital investments in offshore operations.449 6.557 44.2. stop-loss limits.905.274 20. Interest rate risk stress tests are conducted bi-annually to assess the impact of a parallel shift in the yield curve on the Bank’s capital using sensitivity positions calculated using earlier of contractual re-pricing or maturity date for on-balance sheet instruments.783 6. VaR for the Bank’s debt investments is also generated on a daily basis. and strategic.436. The Bank’s equity exposures are of three types: held for trading. and settlement date for off-balance sheet instruments.826 735.411) (2.377 2.

705.4.056.551 2.304.924 16. 2009 Effective Yield / Interest rate Over 1 to 3 Months Exposed to yield/ interest risk Over 3 Over 6 Over 1 Over 2 to 6 Months to 1 to 2 to 3 Months Year Years Years Over 3 to 5 Years Over 5 to 10 Years Non-interest bearing Above 10 financial Years instruments Rupees in ‘000 On-balance sheet financial instruments Assets Cash and balances with treasury banks Balances with other banks Lendings to financial institutions Investments Advances Other assets Total Upto 1 Month 0.843 8.683.499 10.499.075 – – – 20.18% – – – 2.945.683 14.036.251 – 51.533.939.560 2.553.059 67.033 135.983 47.163 205.814 – – 36.398.425.2.718 – – 17.683 (23.998.540 5.678.381 – – – 4.12% – 19.779) 24.849 – 4.295 44.785 – – – 5.053 19.734 2.606.048.411 – 38.499.410.840 1.107 – 5.832.2 Interest rate risk is the risk that the value of the financial instrument will fluctuate due to changes in the market interest rates.Askari Bank Limited | Financial Statements Notes to the Financial Statements For the year ended December 31.514.994.658 – – – – 9.493.324.908.2.614.670 – 46.320.960 – – – 12.945.187 41.833.197 – – 20.877 – – – – – – – – – 7.278 3.055 – 45.084) (10.332.534.279 – – – – 53.309 – 41.658 – – – – 22.938.96% – 3.311 31.702 2.903.300.573 10.532.265.523 1.326.326.903.833.875 300 – – – 35.557 (15.399.489 54. 2009 44.908.598 31.650 (2.4 Mismatch of interest rate sensitive assets and liabilities Yield / interest rate sensitivity position for on-balance sheet instruments is based on the earlier of contractual repricing or maturity date and for off-balance sheet instruments is based on settlement date.036.739) (9. 44.197 – – – – 31.983 – 4.30% 12.268.801 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 Purchase and resale agreements Sale and repurchase agreements Commitments to extend credits Off-balance sheet gap Total yield / interest risk sensitivity gap Cumulative yield / interest risk sensitivity gap 12.616 4.481.938.482 – – – – (7.935.200 – – – 20.736) (17.438 – – 1.560) – – – – 6.683 (23.792.214.79% 6.078 29.046.162.631.596.65% 16.532.884.851.224.953 9.385.537 2.514.262 – 9.953.1 Yield risk is the risk of decline in earnings due to adverse movement of the yield curve.634 – – – 7.034.924 – – – – – – – – 2.24% 12.724.670 19.522 560.091.993.560) (11.666) – – 14.486.006 4.902) 10.500.739) 25.666) 34.336 – 6.658 – 3.650 (2.687.824) (9.632.955.003 6.2.227 5.145.554.00% 1.250 – – – 3.17% 12.858 – – – 4.127 26.702 2.267.374 2.464.922.957 22.326.900 – – 4.540.736) 3.046.945.410.689.121.145.364.922.351.994.638.970.790.260 20.568 2.489 239.493.488.179.816 – – – – – – – – – – – – 2.224.332.667 – 10.129 775 – – – 23.614 2.084) (10.943.187 – – 13.486 3.311 244.268.004.584.031.995.498 – 9.449 – 6.035 – – – 2.785 442.689.436.899. page | 120 .534 35.150 – – – 13.154 – – – 15.261 4.877.821 (17.524 (7.732 13.326.302 6.217.779) 9.099 33.484 2.463.044.616 4.611.4.11% 11.683 – 9.531.150 – – – 14.

162.472.250 – – – 3.504.222.036.185 55.376 19.670 19.554.949.143.440 – 10.285 – – 6.130 – 183.281.489 239.759 – 6.933 20.107 801.319 2.683 5.488 29.547 69.537 2.993.296 26.398.900 – 333.880.526.234 1.073.538.860.833.789 9.828 – – – 7.399.229.803.194 – – 5.012.573 10.411 37.663.150 2.091.983 57.261 3.357.896 55.311 254.200 – 361.614.467 7.208 2.463.638.661 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 Surplus on revaluation of assets 2.835 9.858 – – – – 20.124 26.486 1.364.368.803 – 28.155 – – – 4.750.555 – – – 9.987 886.192 46.182.970.994.309 834.661 28.502 11.235 300 – – 1.704.341.625.425.385.211.320.807 – – – 212.199) 5.979 2.945.415 2.053 – 25.846.998.327.484 2. core retail deposits (current accounts and saving accounts) form a considerable part of the Bank’s overall funding and significant importance is attached to the stability and growth of these deposits.666.534 33.127 31.995.059 67.126 560.084 43.806.150 – – – – – – – – 24.214.364.446 19.226 19. 2009 Upto 1 Month Over 1 to 3 Months Over 3 Over 6 to 6 Months to Months 1 Year Over 1 to 2 Years Over 2 to 3 Years Over 3 to 5 Years Over 5 to 10 Years Above 10 Years Rupees in ‘000 Assets Cash and balances with treasury banks Balances with other banks Lendings to financial institutions Investments Advances Operating fixed assets Deferred tax assets Other assets Total 19.469 14.642 – – – – – – 12.578 – – 136.718.399.862.849 478.221) (14.925 4.073 – – – – – – – 14.Annual Report | 2009 44.656) page | 121 .385.343.878) 3.099 15.949.750.438.336 575.072 (9.526.163 205.061 – – 3.499 9. ALCO monitors the maintenance of financial position liquidity ratios.189 – – 14.581 5.610. The Bank’s liquidity position is managed by the Asset and Liability Management Committee (ALCO). depositors concentration both in terms of the overall funding mix and avoidance of undue reliance on large individual deposits and liquidity contingency plans.384 14.641) (17.174.734 3.075 – – – – – 165.287 – – 1.988.472.843 8.326 – – – 2.260 20.324.046.632.758.835 6.760.945.261 4.760.033 135.291 – – 10.960.368.031.072 (13.999 – – (27.982 – – 36.370.034.3 Liquidity Risk Liquidity risk reflects an enterprises inability in raising funds to meet commitments.843 8.935.300.326.378.222.434.540.191 – 145. Moreover.622 17.227 5.785 442.286.689 775 1.055 35.061 28.374 1.486 3.513 49.941.498 686.251 903.823 318.

Potential risks / losses are identified and assessed through Key risk indicators and Risk and Control Self Assessment of branches and business and support units. damage to tangible assets and external frauds are monitored by operational risk.693 page | 122 . or as a result of adverse external events. infrastructure and human resource are given prime importance and Business Continuity Plan has been revised to cater to current threats being faced. disaster. 45. violation of regulator law / system. Operational Risk Management (ORM) has been entrenched to increase the efficiency and effectiveness of the Bank’s resources.1 Operational risk disclosures Basel II The Bank approach in managing operational risk is to adopt practices that are fit for the purpose to suit the organizational maturity and particular environments in which our business operates.980 1. minimize losses and utilize opportunities. the directors have also announced a bonus issue of 20 percent (2008: 25 percent). In addition. integrated through a comprehensive framework clearly communicated across the Bank.4 Operational risk Operational risk is the possibility of financial losses occurring due to shortcomings or failure of internal processes.1 NON-ADJUSTING EVENTS AFTER THE BALANCE SHEET DATE The Board of Directors in its meeting held on February 23. 2010 has proposed a cash dividend of Nil (2008: Nil).234 1.4. Operational risk management is governed by well defined policy and procedures. 44.014. 2009 44.Askari Bank Limited | Financial Statements Notes to the Financial Statements For the year ended December 31.240 – 308. The appropriation will be approved in the forthcoming Annual General Meeting. 2010 as follows: 2009 2008 Rupees in ‘000 Transfer from unappropriated profit to: Proposed dividend Reserve for issue of bonus shares General reserve Transfer from general reserve to: Reserve for issue of bonus shares – – 886. Further. The financial statements for the year ended December 31. Materialized actual loss arising from operational error. in information technology or in people. 2009 do not include the effect of the appropriation which will be accounted for in the financial statements for the year ending December 31. This definition includes legal risk but not strategic risk or reputational risk. 45. during the year number of policies and procedures have been reviewed to strengthen the system and processes.071. accident. trouble. One of the major component of operational risk being the potential of disruption to business operation due to exceptional event that may disrupt system.

2009 and December 22. The final approval by the State Bank of Pakistan has been received vide letter No. R. Gen. The scheme of amalgamation under section 48 of the Banking Companies Ordinance. 46.2 GENERAL Figures have been rounded off to the nearest thousand of rupees unless otherwise stated. Javed Zia Chairman page | 123 . Gen.1 47. 2006 issued by the State Bank of Pakistan in respect of which there are no amounts have not been reproduced in these financial statements except for the statement of financial position and profit and loss account. CORRESPONDING FIGURES Previous year’s figures have been rearranged and reclassified where necessary for the purposes of comparison. 47. whereby the scheme of amalgamation is effective within 30 days from the date of approval. 4 dated February 17. DATE OF AUTHORIZATION These financial statements were authorised for issue on February 23. 2010 as per decision of the management of both entities. the Bank initiated the process of amalgamation of Askari Leasing Limited (ALL) with and into the Bank. Consequently. 2009 respectively and has also been subsequently approved by the Competition Commission of Pakistan and the Securities and Exchange Commission of Pakistan.273 million shares of the Bank to the shareholders of ALL. The effective date of amalgamation will be March 3. Mehkari Ali Noormahomed Rattansey Director Lt.2 During the year. Captions as prescribed by BSD Circular No. BPRD (R&P-02)/625-99/2010/1256 dated February 18. 48. the Bank shall issue 28. 2010 by the Board of Directors of the Bank. 47. (R) Imtiaz Hussain Director Lt. 1962 has been approved by the shareholders of both companies in the Extra Ordinary General Meetings of the Bank and ALL held on December 21.Annual Report | 2009 45. President & Chief Executive M. 2010.

33100-6598842-7 Sheraz Siddique 33100-1704018-3 Shahzad Siddique 33100-1017331-1 10.077 – 551 – 551 5 Muhammad Rafiq Muhammad Idrees Taj Din Muhammad Ashraf Muhammad Yasin Ch. Markaz I-9.175 9. Sector I-10/3. Rafique Saigol M. Karachi 42301-8051825-9 Seema Shirazi 42301-655746-4 Malik Zain 42301-3375828-9 Rasool Textile (Pvt) Limited 250-N. Islamabad Shahzad Siddique (Pvt) Limited 4.101 – 5.118 – 1. H. (Rupees in ‘000) Outstanding liabilities at the beginning of the year Interest/ Mark-up Written-off Other Financial relief provided Sr.372 page | 124 .946 Total 1.357. Ali Ahmed Khalid Mahmood Mavel Das 9.818 7.7 to these financial statements Statement in terms of sub-section (3) of section 33-A of the Banking Companies Ordinance.357 – 17. Karachi Bakeline Products Plot # 117.363 8 48.451 6 Ali’s International Qazi Rahat Ali 242/1 Sector-24.T. Managa. Bashir Plaza. A.707 - 2.451 – 27. 2009.707 7 Abdul Hameed Abdul Hafeez Ali Muhammad Ch.707 - 2.000 2. 42301-9140443-9 Korangi Industrial Area.965 – 1. Kasur Arif Saigol 35202-9563094-9 Abid Saigol 270-92-006204 Asif Saigol 270-92-006202 M.E. Raiwind Road.I.150 2. of the Borrower Name of Individuals / Partners / Directors Father’s / Husband’s Name Principal Interest/ Mark-up Other Total Principal Written-off Total 1 Mohib Exports Limited 8-KM.214 3 9. Faisalabad Fahad Hameed 210-67-419868 Faisal Hafeez Khan 210-67-234299 Muhammad Siddique Ch.503 33. 582 1.411 - 1.967 266. Muhammad Siddique Ch.993 - 1.610 23. Khurrianwala.246. S.976 1.818 7. Sukkur MIA Traders (Private) Limited Flat # 5. Model Town Extension.Askari Bank Limited | Financial Statements Annexure-I Referred to in note 10.000 or above allowed to a person(s) during the year ended December 31.893 - 56.759 – 56. Street # 8.175 2 A. International (Pvt) Limited Muhammad Adan Shirazi D-99. 500. 1962 in respect of written off loans or any other financial reliefs of Rs.965 4 3.096 268.089 - 1. Ghulam Qadir Khuda Dad Qazi Musarrat Ali 28.893 - 72.185 742.268 201.707 - 12. Name and address No.357 – 17.743 – 11.Q.5-KM.893 – 1. Lahore Shahanshah Trading Company Shop # 28.118 – 901.009.625.451 – 27.405 - 1. Muhammad Siddique Ch.053 23. Jaranwala Road. Islamabad Khalid Mahmood 35202-9557295-5 Zakia Khalid 35202-4495862-0 Namo Mal 45504-0489491-9 Muhammad Idrees 276-54-176702 Musarrat Ghazala 276-54-065860 Muhammad Ashraf 294-91-020493 Nasreen Ashraf 294-62-733932 Muhammad Mujeeb 502-55-614751 Fazal-ul-Qadir 101-57-137982 Ghulam Hassan 601-88-385774 1.363 - 1.386 700.447.096 201. Rafique Saigol Mohsin Shirazi Muhammad Adnan Shirazi Malik Naseem Akhtar Ch. Rafique Saigol M.692 27. Market.

000 861.884 11.681 950.000 – 53.653.575 658.078 8.372 918.000 – 68.346 1.287 1.106.033. Rupees in ‘000 2009 2008 Assets Cash and balances with treasury banks Balances with and Due from Financial Institutions Investments Financing and Receivables – Murahaba – Ijarah – Musharaka – Diminishing Musharaka – Salam – Other Islamic Modes Other assets Total Assets Liabilities Bills payable Due to Financial Institutions Deposits and other accounts – Current Accounts – Saving Accounts – Term Deposits – Others – Deposit from Financial Institutions .Annual Report | 2009 Annexure-II As at December 31.729 901.582 2.280.043 1.205 – 3.884 – 3.314.372 – 918.028.738 2.086 700.617 139.702 (2.364 2.393.323.remunerative – Deposits from Financial Institutions .372 Remuneration to Shariah Advisor/Board Charity fund Opening Balance Additions during the year Payments/Utilization during the year Closing Balance 487 4.743.371 318 840 (671) 487 1.116.296 2.647.680 – 753.781 page | 125 .014 10.non remunerative Due to head office Other liabilities Net assets Represented By Islamic Banking Fund Reserves Unappropriated/ Unremitted profit/(loss) Surplus/ (Deficit) on revaluation of assets 850.235 10.961 1.396.863.101 753.253 724.945 838.294 22. 2009 Statement of Financial Position (Islamic Banking) The Bank is operating 31 Islamic banking branches including 2 sub-branches at the end of 2009 as compared to 20 Islamic banking branches including 2 sub-branches at the end of 2008.087.008 650.559 3.882.983 2.680 753.465 260.339 918.591 4.232.995 9.388.383 689.417 1.372 41. During the year one conventional banking branch was converted to Islamic banking branch.818) 2.680 979 77.777 1.216 520.680 655.098 12.024.711 402.181 2.069 13.848 2.331 935.

256 18.Askari Bank Limited | Financial Statements Annexure-II Profit and Loss Account (Islamic Banking) For the year ended December 31.577 Other expenses Administrative expenses Other provisions / write offs Other charges Total other expenses Extra Ordinary / unusual items Profit before taxation 383.519 8.356 77.692 14.184 1.010 362.154 22.612 386.288 2.965 12.182.507 36. 2009 Rupees in ‘000 2009 2008 Profit / return earned on financings.490 683.693 13.228 63.001 14. commission and brokerage Income Dividend income Income from dealing in foreign currencies Capital gain on sale of securities Unrealised gain / (loss) on revaluation of investments classified as held for trading Other income Total other income 1.484 360.221 77.000 138.262 499. investments and placements Return on deposits and other dues expensed Net spread earned Provision against non-performing financings Provision for diminution in the value of investments Bad debts written off directly Income after provisions Other Income Fee.494 460.484 8.692 309.949 397.221 page | 126 .519 353.484 75.172 32.744 822.001 383.356 309.

special care is continuously taken. as the Shariah Advisor from time to time. There are now 29 full fledged Islamic Banking Branches and 2 Islamic sub-branches. profit sharing ratios. from Conventional to Islamic Banking. the affairs of Askari Bank Limited . May Allah Almighty bless our sincere efforts! Dr. or means. weightages. prohibited by Shariah rules and principles have been credited to charity account. We remain fully committed to contributing to capacity building and promoting the cause of Islamic Banking in Pakistan. Any earnings that have been realized from sources. As a Shariah Advisor. In order to facilitate this work. Muhammad Tahir Mansoori Shariah Advisor page | 127 . Relevant documentation and procedures adopted in this connection have also reviewed and vetted by me. I have reviewed each class of transactions conducted during the year. profits and charging of losses (if any). under my supervision as the Shariah Advisor of the Bank. invested and shared are in Halal modes and investments. relating to PLS accounts also conform to the basis vetted by me as the Shariah Advisor. in accordance with the Shariah rules and principles. Besides.Annual Report | 2009 Shariah Advisor’s Report 2009 Alhamdolillah! The year 2009 has been a successful year for Askari Bank’s Islamic Banking Services. SBP regulations and guidelines related to Shariah compliance and other rules. on an ongoing basis. including conversion of Kohat Branch. All funds obtained. as eleven new full fledged Islamic Banking Branches have been opened during the year. Shariah Audit and Shariah Compliance departments are functioning under my supervision. to ensure that the funds and products of Islamic Banking are managed separately from the conventional banking side.Islamic Banking have been carried out in accordance with the rules and principles of Shariah. the allocation of funds. on a stand-alone basis. as well as with specific fatawa and rulings issued by me. As per Shariah requirements. In my opinion.

Askari Bank Limited | Financial Statements This page is intentially left blank page | 128 .

2009 Askari Bank Limited For the year ended December 31. 2009 Consolidated Financial Statements of page | 129 .Annual Report | 2009 Financial Highlights 2009 For the year ended December 31.

Askari Bank Limited | Consolidated Financial Statements This page is intentially left blank page | 130 .

We conducted our audit in accordance with the International Standards on Auditing as applicable in Pakistan. changes in equity and their cash flows for the year then ended in accordance with approved accounting standards as applicable in Pakistan. Islamabad February 23. 2009 and the results of their operations. Chartered Accountants page | 131 . We have also expressed separate opinions on the financial statements of Askari Bank Limited and its subsidiary companies Askari Investment Management Limited and Askari Securities (Pvt) Limited. An audit also includes assessing accounting policies and significant estimates made by management. Our responsibility is to express an opinion on these financial statements based on our audit. 2010 Name of engagement partner: S. present fairly the financial position of Askari Bank Limited and its subsidiary companies as at December 31. Fergousan & Co. together with the notes forming part thereof. on a test basis. 2009 and the related consolidated Profit and Loss Account. We believe that our audit provides a reasonable basis for our opinion. except for 20 branches. evaluating the overall presentation of the financial statements. as well as. These financial statements are the responsibility of Bank’s management. based on 20 branches audited by us and the returns referred to above received from the branches which have been found adequate for the purpose of our audit. 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. In our opinion.Annual Report | 2009 Auditors’ Report to the Members We have audited the annexed consolidated financial statements comprising consolidated statement of financial position of Askari Bank Limited (the Bank) and its subsidiary companies as at December 31. Haider Abbas A. these financial statements include unaudited certified returns from the branches.F. An audit includes examining. evidence supporting the amounts and disclosures in the financial statements. consolidated Statement of Changes in Equity and consolidated Cash Flow Statement. which have been audited by us and 1 branch audited by auditors abroad. for the year then ended.

226 936.234.805 13 14 15 16 17 18 19 2.900 11.312 2.640 4.505.573 16.967. Mehkari Ali Noormahomed Rattansey Director Lt.Askari Bank Limited | Consolidated Financial Statements Consolidated Statement of Financial Position As at December 31.300.039.871 2.818.448 193. R.972 128.987.670 19.127.901 9.173 4.227 338.374.828 15. Javed Zia Chairman page | 132 .059 66.net of tax Minority interest 20 21 5.806.754 35.192 – 10.543 333.058.649.439 13.163 205. Gen.567 14.584.996.384 17.164. Gen.086. 2009 Rupees in ‘000 Notes 2009 2008 Assets Cash and balances with treasury banks Balances with other banks Lendings to financial institutions Investments Advances Operating 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 .463 239.885.883 206.179 254.073.945.345.779.805 6 7 8 9 10 11 12 19.479.190. President & Chief Executive M.263 14. (R) Imtiaz Hussain Director Lt.903 5.038.318 856.689.038.468 16.582 13.917.088.242 8.100 16.148 167.866.224 1.925 4.666 3.987.385.994.912.021.617 135.871 Contingencies and commitments 23 4.365.816 4.029.467 7.225 12.101.054 – 9.438 16.353.387 22 The annexed notes 1 to 49 form an integral part of these consolidated financial statements.850 8.464.111 13.774 7.

184.800 739 10.077. Javed Zia Chairman page | 133 .824.445 143.360 4. Mehkari Ali Noormahomed Rattansey Director Lt.5 9.191 2.228 9.377 431.647. commission and brokerage income Dividend income Income from dealing in foreign currencies Gain on sale of investments .770 – 502.152) 1.277 7.748.020 2.437 0.035.net Unrealised (loss) / gain on revaluation of investments classified as held for trading .897 – 1.967 2.1 8 22.693 – 34.914.150 (1.893 6.124.609.717 (405) 409.375 343.079. 2009 Rupees in ‘000 Notes 2009 2008 Mark-up / return / interest earned Mark-up / return / interest expensed Net mark-up / interest income Provision against non-performing loans and advances Impairment loss on available for sale investments Provision for impairment in the value of investments Provision against reverse repo Bad debts written off directly Net mark-up / interest income after provisions Non mark-up / interest income Fee. (R) Imtiaz Hussain Director Lt.664) 32 Profit after taxation Minority interest Unappropriated profit brought forward Profit available for appropriation Basic / diluted earnings per share . Gen.742 10.715 415.897 561.675. President & Chief Executive M.368 7.987 6.874.609.133.net Other income Total non mark-up / interest income Non mark-up / interest expenses Administrative expenses Other provisions / write offs Other charges Total non mark-up / interest expenses Extra ordinary / unusual items Profit before taxation Taxation – current – prior years’ – deferred 26 27 10.296 6.82 28 29 30 31 7.225 1.395.043) 109. R.416.831 8.346 162.526 502.827 (150.072.768.465 3.12 The annexed notes 1 to 49 form an integral part of these consolidated financial statements.784 82.584 119.159.058 76.418.248 13.2.550.Annual Report | 2009 Consolidated Profit and Loss Account For the year ended December 31.819 1.435 2.778 – 508 – 247.055 415 415. Gen.047.127 1.958 18.600.Rupees 33 530.824 22.048.537 538.698 (51.617.743 873.635.223 2.770 29.588 173.747 1.665.512 42.470 2.674 – 2.477 6.382.061 1.998 338.060 87.646 3.324.

121.998 – – 221.245) (681.693 5.559 – – 338. Gen.717 (77.717) – – – – – (450. (R) Imtiaz Hussain Director Lt.077.693) 4.224 The annexed notes 1 to 49 form an integral part of these consolidated financial statements. Mehkari Ali Noormahomed Rattansey Director Lt. 2007 declared subsequent to year end Bonus shares declared / issued subsequent to year ended December 31.774 – – 2.100.073.467 – 3. Javed Zia Chairman page | 134 . R.226 1.for the year ended December 31.014.275 4.975) 1.225 (221.731 415.094. 2008 Transfer to: Statutory reserve General reserve Final dividend . Gen.470 12.270 (1.245 – – 681. 2009 Net profit for the year ended December 31.499 – 2.835.776.967 415. 2009 Capital Reserve Rupees in ‘000 Share Capital Statutory Reserve Revenue Reserves General Reserve Un-appropriated profit Total Balance as at January 1.912.470 – – 77.711 – – 4.048 – 856.077.164.439 – 13.184.799 – 2. President & Chief Executive M.998 – 12. 2008 Balance as at December 31. 2009 Transfer to: Statutory reserve General reserve Bonus shares declared / issued subsequent to year ended December 31.516 – (1. 2007 Balance as at January 1.006.086.975) (450.058.Askari Bank Limited | Consolidated Financial Statements Consolidated Statement of Changes in Equity For the year ended December 31.225) – – 1.014.134.225 1. 2009 3.052.275) 338.559) (338. 2008 Net profit for the year ended December 31.466 – 4.052.

834 9. President & Chief Executive M.784 82.824.392 4.010 (32.108.743) 329.524) 1.363. (R) Imtiaz Hussain Director Lt.213 7.585.243.509.377) 24.218.778 508 – 247.895.482 (31.979) (10.110.922) 2.294) 36.288 37.360 3.482 27.021) (8.377 76.139.576.114. Gen.403 459 4.770 (173.184 2.388.223) (2.404) (436.795) 360.807 4.287 (899.262.052 18.109.762) (825) 2.732 (32.223.net Dividends paid Net cash flow from / (used in) financing activities Increase in cash and cash equivalents Cash and cash equivalents at beginning of the year Cash and cash equivalents at end of the year 34 34 2.926.800 (6.000 162.759) (10.840 42.537) 1.448 – 154.597.450.477.360 657.672.991.453 502.137.452 (617.998.477.036) (1.989 1.842 4.447.477 23.783) (25.966. Javed Zia Chairman page | 135 .883 (2.591 87.874.609.257.net of adjustment Sale proceeds of operating fixed assets-disposed off Net cash flow (used in) / from investing activities Cash flow from financing activities Receipts / (Payments) of sub-ordinated loans Lease obligations . R.186.899 (444. Mehkari Ali Noormahomed Rattansey Director Lt.012 3. Gen.016.490 (1.324.200) 8.254 (791.027 519.410.674 – (4.488.257) 49.573 (1.857) 1. 2009 Rupees in ‘000 Note 2009 2008 Cash flow from operating activities Profit before taxation Less: Dividend income Adjustments: Depreciation Provision against non-performing advances (net) Provision for impairment in the value of investments Provision against reverse repo Bad debts written of directly Net (profit) / loss on sale of operating fixed assets Finance charges on leased assets Provision against other assets 1.389 365.175) (2.197) 18.894 (Increase) / decrease in operating assets Lendings to financial institutions Held for trading securities Advances Other assets (excluding advance taxation) Increase / (decrease) in operating liabilities Bills payable Borrowings Deposits and other accounts Other liabilities (excluding current taxation) Cash flow before tax Income tax paid Net cash flow from operating activities Cash flow from investing activities Net investments in available-for-sale securities Net investments in held-to-maturity securities Proceeds from issue of share capital to minority share holders Dividend received Investments in operating fixed assets .364.430 20.310 3.220 210.705) 2.596) 13.504.559) (42.658) 2.008 20.365 The annexed notes 1 to 49 form an integral part of these consolidated financial statements.135 1.407.732 – 3.Annual Report | 2009 Consolidated Cash Flow Statement For the year ended December 31.747 (736.546.897 (162.015 38.672.

Key figures of the Islamic banking branches are disclosed in Annexure II to these consolidated financial statements. The principal activity includes share brokerage. 4 dated February 17. STATEMENT OF COMPLIANCE These consolidated financial statements have been prepared in accordance with the approved accounting standards as applicable in Pakistan and the requirements of the Companies Ordinance. Surplus / (deficit) on revaluation of land and available for sale investments has been reflected below equity in terms of requirements of above referred format prescribed by SBP under BSD Circular No. 1984. 1992. there is no impact on profit for the year. the holding company. 2006. under license by the Securities and Exchange Commission of Pakistan (SECP) to undertake asset management and investment advisory services under the Non-Banking Finance Companies and Notified Entities Regulations. 1962. The Mall. The Bank acquired 74% of Ordinary Shares of ASL on October 1. 2007. 2006. Askari Securities Limited (ASL) was incorporated in Pakistan on October 1. 1999 under the Companies Ordinance. 2. One permissible form of trade related mode of financing comprises of purchase of goods by the Bank from its customers and resale to them at appropriate markup in price on a deferred payment basis.3 The financial results of the Islamic banking branches have been consolidated in these financial statements for reporting purposes. Approved accounting standards comprise of such International Financial Reporting Standards (IFRS) issued by the International Accounting Standard Board (IASB) as are notified under the Companies Ordinance. The Mall. the State Bank of Pakistan (SBP) has issued a number of circulars. Askari Investment Management Limited. 2. The license was obtained on September 21. The Bank has 226 branches (2008: 200 branches). 1984. investment advisory and consultancy services. 1962 or directives issued by the Securities and Exchange Commission of Pakistan and the State Bank of Pakistan. In case requirements differ. Askari Bank Limited (the Bank) was incorporated in Pakistan on October 09. 1962. The financial statements of AIML and ASL have been consolidated based on their audited financial statements for the half year ended December 31. including 31 Islamic Banking branches. 2009. 2005. 1999. The registered office of the Bank is situated at AWT Plaza. 22 sub-branches and a wholesale bank branch in the Kingdom of Bahrain. The Bank has adopted IAS 1 (Revised) “Presentation of Financial Statements”. the Banking Companies Ordinance. Askari Investment Management Limited (AIML) was incorporated in Pakistan on May 30. 1962 or the requirements of the said directives shall prevail. 2005 as a public limited company. The purchases and sales arising under these arrangements are not reflected in these financial statements as such but are restricted to the amount of facilities actually utilized and the appropriate portion of mark-up thereon. 2009 1. 4 dated February 17. 1984 and the Banking Companies Ordinance. page | 136 . 225 in Pakistan and Azad Jammu and Kashmir. In accordance with the directives of the Federal Government regarding shifting of the banking system to Islamic modes. AIML is a wholly owned subsidiary of the Bank with its registered office in Islamabad. AIML is a Non Banking Finance Company (NBFC). the provisions or directives of the Companies Ordinance. The Bank is a scheduled commercial bank and is principally engaged in the business of banking as defined in the Banking Companies Ordinance. Since there are no other components of other comprehensive income that were recognised in equity therefore the Statement of Other Comprehensive Income has not been prepared. Lahore and Islamabad Stock Exchanges. 1984 and the Banking Companies Ordinance. 1984 as a public limited company and obtained corporate membership of the Islamabad Stock Exchange on December 24.Askari Bank Limited | Consolidated Financial Statements Notes to the Consolidated Financial Statements For the year ended December 31. Rawalpindi. 2005. STATUS AND NATURE OF BUSINESS The Group consists of Askari Bank Limited. 2007 (NBFC & NE Regulations). As the change in accounting policy only impacts presentation aspects. 3. The registered office of the Company is situated at AWT Plaza. AIML obtained its certificate of commencement of business on September 22. provisions of and directives issued under the Companies Ordinance. a wholly owned subsidiary company and Askari Securities Limited. 1991 as a Public Limited Company and is listed on the Karachi. Army Welfare Trust directly and indirectly holds a significant portion of the Bank’s share capital at the year end. 2009. Rawalpindi. a partly owned subsidiary company. which became effective from January 1. after eliminating material inter-branch transactions / balances.1 2. 2. The Bank obtained its business commencement certificate on February 26.2 BASIS OF PRESENTATION These consolidated financial statements have been presented in accordance with the requirements of format prescribed by the State Bank of Pakistan’s BSD Circular No. 1992 and started operations from April 01.

the requirements of these Standards have not been considered in the preparation of these consolidated financial statements. 2010 January 1. 2006 and have been classified in accordance with the requirements of BSD Circular No. 4 dated February 17. 2009 February 1. 2009 but they are not relevant to the Bank’s operations. “Financial Instruments: Recognition and Measurement”.Annual Report | 2009 International Accounting Standard 39. 2009 January 1. Accordingly.. Effective for periods beginning on or after IAS 1 IAS 7 IAS 17 IAS 36 IAS 38 IFRIC 14 c) Presentation of financial statements Statement of cash flows Leases Impairment of assets Intangible assets IAS 19 – The limit on a Defined Benefit Assets. 2010 January 1. However. 2011 July 1. Effective for periods beginning on or after IFRS 1 IFRS 2 IFRS 3 IFRS 5 IFRS 8 IFRS 9 IAS 24 IAS 27 IAS 32 First-time adoption of International Financial Reporting Standards Share-based payments Business combinations Non-current assets held-for-sale and discontinued operations Operating segments Financial Instruments Related Party Disclosures Consolidated and separate financial statements Financial instruments: Presentation – Amendments relating to classification of right issues January 1. amendments and interpretations effective in 2009 but not relevant The following standards. amendments and interpretations to published standards are mandatory for accounting periods beginning on or after January 1. IAS 20 IAS 23 IAS 29 IAS 31 IAS 32 IAS 41 IFRS 5 IFRS 7 IFRIC 15 b) Accounting for government grants and disclosure of government assistance Borrowing costs Financial reporting in hyperinflationary economies Interest in joint ventures Financial instruments: Presentation – Amendments relating to puttable instruments and obligations arising on liquidation Agriculture Non-current assets held-for-sale and discontinued operations Financial Instruments: Disclosures Agreements for the construction of real estates Standards. “Investment Property” and International Financial Reporting Standard 7. amendments and interpretations to existing standards that are not yet effective and have not been early adopted by the bank Certain minor amendments in following International Accounting Standards (IASs) have been introduced through IASB’s annual improvements published in April 2009. 2010 July 1. minimum funding requirements and their interaction January 1. International Accounting Standard 40. 2010 page | 137 . 10 dated July 13.”Financial Instruments: Disclosure” are not applicable to banking companies in Pakistan. a) Standards. investments have been presented in accordance with the requirements of the format prescribed by the State Bank of Pakistan’s BSD Circular No. 2009 January 1. 2010 January 1. 2010 January 1. 2010 July 1. 2013 January 1. 2004. 2010 January 1. 2010 January 1. 2011 Amendments and interpretations to existing standards that are not yet effective and not relevant to the bank’s operations.

5. 2009 July 1. The areas involving a higher degree of judgments or complexity. consideration for securities purchased under resale agreement (reverse repo) are included in lendings to financial institutions.Askari Bank Limited | Consolidated Financial Statements Notes to the Consolidated Financial Statements For the year ended December 31. Conversely. Reassessment of embedded derivatives Hedges of a net investment in foreign operations Distribution of non-cash assets to owners Transfer of assets from customers Extinguishing Financial Liabilities with Equity Instruments July 1. 5. Repo and reverse repo balances are reflected under borrowings from and lendings to financial institutions respectively. These are marked to market and surplus / deficit arising on revaluation of ‘held for trading’ investments is taken to profit and loss account in accordance with the requirements of the State Bank of Pakistan’s BSD Circular No. 5. or areas where assumptions and estimates are significant to the financial statements. AIML with 100% holding (2008: 100%) and ASL with 74% holding (2008: 74%). Minority interest are presented as separate item in the consolidated financial statements.3 Sale and repurchase agreements Securities sold under repurchase agreement (repo) are retained in the consolidated financial statements as investments and a liability for consideration received is included in borrowings.2 Cash and cash equivalents Cash and cash equivalents comprise of cash and balances with treasury banks. 10 dated July 13. Material intra-group balances and transactions have been eliminated.4 Investments Investments are classified as follows: Held for trading These represent securities acquired with the intention to trade by taking advantage of short-term market / interest rate movements. 2009 July 1. as the case may be. Subsidiaries are those enterprises in which the holding company directly or indirectly controls. 2009 July 1. 2009 July 1. 5.1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The consolidated financial statements include the financial statements of the Bank and its subsidiary companies. The preparation of consolidated financial statements in conformity with approved accounting standards. 5. 2009 Effective for periods beginning on or after IFRIC 9 IFRIC 16 IFRIC 17 IFRIC 18 IFRIC 19 4.. Minority interests are that part of net results of the operations and of net assets of the subsidiary attributable to interests which are not owned by the parent company. 2004. are disclosed in note 44. balances with other banks and call money lendings and other short term highly liquid investments that are readily convertible to known amount of cash and which are subject to insignificant risk of change in value. requires the use of certain accounting estimates and judgments in application of accounting policies. page | 138 . The assets and liabilities of subsidiary companies have been consolidated on a line by line basis and the carrying value of investment held by the holding company is eliminated against holding company’s share in paid up capital of the subsidiaries. beneficially owns or holds more than 50% of the voting securities or otherwise has the power to elect and appoint more than 50% of its directors. The difference between sale and repurchase / purchase and resale price is treated as mark-up / return expensed and earned. 2010 BASIS OF MEASUREMENT These consolidated financial statements have been prepared under the historical cost convention as modified for certain investments and freehold and leasehold land which are shown at revalued amounts. as applicable in Pakistan. The financial statements of the subsidiaries are included in the consolidated financial statements from the date control commences until the date that control ceases.

These are carried at amortized cost in accordance with the requirements of the State Bank of Pakistan’s BSD Circular No. 14 dated September 24. page | 139 .6 Capital work-in-progress. In addition. 20 dated August 04. Held to maturity These represent securities acquired with the intention and ability to hold them upto maturity. or in any manner applied. 5. Except to the extent actually realised on disposal of land which are revalued. The provisions against non-performing advances are charged to the profit and loss account. a general provision is maintained for advances other than consumer advances as per details given in note 10. The Bank charges depreciation from the date of delivery of respective assets to Mustajir upto the date of maturity / termination of Ijarah agreement. this investment is carried at cost less impairment losses. Where the markets are not active or the securities are unlisted.5 Advances Advances are stated net of provisions for non-performing advances. if any. The State Bank of Pakistan has notified for adoption “of Islamic Financial Accounting Standard 2 Ijarah” (IFAS-2) which is applicable for accounting period beginning on or after January 01. fair value is estimated by using valuation techniques. if any. Foreign securities are carried at fair value. operating fixed assets and depreciation Capital work-in-progress Capital work-in-progress is stated at cost. 2004. 5. Break-up value of equity securities is calculated with reference to the net assets of the investee as per the latest audited financial statements.2. 2009. based on their current bid prices in active markets. the surplus on revaluation of land shall not be applied to set-off or reduce any deficit or loss. In accordance with the requirements of the State Bank of Pakistan’s BSD Circular No. Consequent to the adoption of IFAS-2. and are shown under “Advances”. All purchases and sale of investment that require delivery within the time frame established by regulations or market convention are recognized at the trade date. The rentals received / receivable on above Ijarahs are recorded as income / revenue. For the purposes of consolidated financial statements. Land is carried at revalued amounts which are not depreciated. The Group holds 15% shares in Askari General Insurance Company Limited (AGICO). 2000. Provision for advances is determined in accordance with the requirements of the Prudential Regulations issued by the State Bank of Pakistan from time to time. Owned assets Fixed assets are stated at cost less impairment losses and accumulated depreciation except for freehold / leasehold land. which is the date the Group commits to purchase or sell the investments. profit or surplus of the Bank or utilized directly or indirectly by way of dividend or bonus. Investments in the other quoted securities are valued at cost less impairment losses. current of future. Land is revalued by professionally qualified valuers with sufficient regularity to ensure that the net carrying amount does not differ materially from its fair value. . all such Ijarahs booked on or after January 01. Depreciation on Ijarah assets is charged to profit and loss account by applying the straight line method whereby the depreciable value of Ijarah assets is written off over the Ijarah period. and has not been accounted for using equity method since it does not qualify as associate under International Accounting Standards (IAS) 28 ‘Accounting for Investment in Associates’ as the Group does not exercise significant influence on AGICO. 2009 are stated at cost less accumulated depreciation and impairment if any. whether past.Annual Report | 2009 Available for sale These represent securities which do not fall under ‘held for trading’ or ‘held to maturity’ categories.5. adjusted or treated so as to add to the income. Surplus / (deficit) arising on revaluation of fixed assets is credited / (debited) to the surplus on revaluation of assets account and is shown below the shareholders’ equity in the statement of financial position. available for sale securities for which ready quotations are available on Reuters Page (PKRV) or Stock Exchanges are valued at market value and the resulting surplus / deficit is kept in a separate account and is shown below the shareholders’ equity in the statement of financial position. Advances are written off when there is no realistic prospect of recovery. Unquoted equity securities are valued at the lower of cost and break-up value.

Contributions are made in accordance with the actuarial recommendation. the asset’s recoverable amount is estimated in order to determine the extent of the impairment loss. page | 140 . The amount of deferred tax provided is based on the expected manner of realization or settlement of the carrying amount of assets and liabilities using tax rates enacted or substantially enacted at the date of statement of financial position. 5. A deferred tax asset is recognised only to the extent that it is probable that the future taxable profit will be available and credits can be utilized. Gains and losses on disposal of operating fixed assets are taken to the profit and loss account. Finance charge is allocated to the accounting periods in a manner so as to provide a constant periodic rate of charge on the outstanding liability. net of depreciation or amortisation. The cost of assets is depreciated on the diminishing balance method. 5. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined. Deferred tax. if any. Deferred tax assets are reduced to the extent it is no longer probable that the related tax benefit will be realised. Membership card of ASL is stated at cost less impairment.2. However. The actuarial gains / losses in excess of corridor limit (10% of higher of present value of obligation and fair value of plan assets) are recognized over the expected remaining working life of its employees. The actuarial valuation is carried out periodically using “Projected Unit Credit Method”. provision for tax on income from transfer of physical shares to CDC and other operating income is based on taxable income at the prevailing current rates. if any. excess of the purchase consideration over the fair value of identifiable assets and liabilities acquired. Assets subject to finance lease Assets held under finance lease are accounted for by recording the assets and related liabilities at the amounts determined on the basis of lower of fair value of the assets and the present value of minimum lease payments. is initially recognised as goodwill and tested for impairment annually. providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amount used for taxation purposes. ASL falls in the ambit of presumptive tax regime regarding commission income under section 233A of the Income Tax Ordinance.Askari Bank Limited | Consolidated Financial Statements Notes to the Consolidated Financial Statements For the year ended December 31. Deferred Deferred tax is provided for by using the balance sheet liability method. 2009 Depreciation is computed over the estimated useful lives of the related assets at the rates set out in note 11. Major renewals and improvements are capitalized. on revaluation of investments. except for vehicles. and where the carrying value exceeds estimated recoverable amount. 2001. carpets. Intangible assets On acquisition of an entity. Provision for income tax is made in the financial statements accordingly. Impairment loss is recognised as expense in the profit and loss account.8 Taxation Current Provision for current tax is the expected tax payable on the taxable profit for the year using tax rates applicable at the date of statement of financial position and any adjustment to tax payable for previous years.9 Staff retirement benefits Defined benefit plan The Bank and AIML operates an approved funded gratuity scheme for all its regular employees. expected to be applicable at the time of its reversal.7 Impairment The carrying amount of the Group’s assets are reviewed at the date of statement of financial position to determine whether there is any indication of impairment. renovations and other assets which are depreciated on a straight line basis. 5. Maintenance and normal repairs are charged to profit and loss account as and when incurred. The carrying amount is reviewed at the date of statement of financial position to assess whether it is in excess of its recoverable amount. if no impairment loss had been recognised. is recognised as an adjustment to surplus / (deficit) arising on such revaluation. Depreciation is charged on leased assets on the basis similar to that of the owned assets. Depreciation is charged for the full month on purchase / acquisition of an asset while no depreciation is charged in the month of disposal of an asset. it is written down to its estimated recoverable amount. If such indications exist. if any.

11 Foreign currencies Foreign currency transactions Foreign currency transactions are translated into Pak. Obligation under the scheme are charged to income currently. Management fee is recognised by AIML on the accrual basis. Commitments Commitments for outstanding forward foreign exchange contracts are valued at the rates applicable to the remaining maturities. Compensated absences The Bank grants compensated absences to all its regular employees. Exchange gains and losses are included in profit and loss account currently.10 Revenue recognition Mark-up / interest on advances and return on investments is recognised on accrual basis except on classified advances which is recognized on receipt basis in compliance with Prudential Regulations issued by the State Bank of Pakistan. Rupee at the exchange rates prevailing on the date of transaction. ASL operates an unfunded provident fund scheme for all its regular employees for which equal monthly contributions are made by the Company and the employees at the rate of 10% of basic salary of the employee.Annual Report | 2009 ASL operates an unfunded gratuity scheme for all its regular employees. Foreign operation The monetary assets and liabilities of wholesale bank branch are translated to Pak.33% of the basic salary of the employee. Contingent liabilities / commitments for letters of credits and letters of guarantees denominated in foreign currencies are translated into Pak. Fees. Liability for unfunded scheme is recognized on the basis of actuarial valuation using the “Projected Unit Credit Method”. Rupee at the exchange rates prevailing at the date of statement of financial position. based on annual average net asset value of the Fund under management. Provision for guarantee claims and other off balance sheet obligations is recognized when intimated and reasonable certainty exists to settle the obligations. Defined contribution plan The Bank operates a recognised provident fund scheme for all its regular employees for which equal monthly contributions are made both by the Bank and by the employees at the rate of 8. 5. AIML operates a funded staff provident fund scheme as a defined contribution plan for all eligible employees.12 Provisions Provisions are recognised when there are present. The gratuity is payable on the basis of last drawn basic salary for E-1 grade employees and gross for other employees for each completed year of services. Charge to profit and loss account is stated net off expected recoveries. Dividend income is recognised when Group’s right to receive the income is established. Rupee at the rates of exchange ruling on the date of statement of financial position. commission and brokerage income is recognised at the time of performance of service. The amount recognised in the balance sheet represents the present value of defined benefit obligations. Translation gains and losses Translation gains and losses are included in the profit and loss account. Expected recoveries are recognized by debiting customer accounts. legal or constructive obligations as a result of past events. 5. Rupee at exchange rates prevailing at the balance sheet date. Provision for the year is charged to profit and loss account. it is probable that an out flow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate of the amounts can be made. Gain and losses on sale of investments are included in income currently. The results of foreign operations are translated at the average rate of exchange for the year. AIML also provides for compensated absences. page | 141 . Outstanding foreign bills purchased are valued at the rates applicable to the remaining maturities. 5. Equal monthly contributions are made by the Company and the staff at the rate of 6% of the basic salary of the employee. The employees are entitled to gratuity on completion of three years of continuous service with the Company. Monetary assets and liabilities in foreign currencies are translated to Pak.

17 Functional and presentation currency Items included in the consolidated financial statements are measured using the currency of the primary economic environment in which the Group operates. 5. bills of exchange and deposits from corporate customers. Sub-ordinated loans It represents Term Finance Certificates issued by the Bank. 5. page | 142 . which is the Group’s functional currency. guarantees..1 Business segment Corporate financing Corporate financing includes corporate and investment banking activities such as mergers and acquisition. underwriting. 5. Pakistan and the Middle East. privatization. Payments made under operating leases (net of any incentives received from the lessor) are charged to profit on a straight line basis over the lease term. export finance.16 Segment reporting A segment is a distinguishable component of the Group that is engaged in providing products or services (business segment) or in providing product or services within a particular economic environment (geographical segment). Agency services Agency services include income from rent of lockers provided to customers.2 Geographical segments The Bank operates in two geographic regions. securitisation. Commercial Banking Commercial banking segment provides services related to project finance. Trading and Sales Trading and sales includes the Group’s treasury and money market activities classified as held for trading. Retail Banking Retail banking segment provides services to small borrowers and include loans. funds transfer. deposits and other transactions with retail customers and credit card business.Askari Bank Limited | Consolidated Financial Statements Notes to the Consolidated Financial Statements For the year ended December 31.13 Off-setting Financial assets and financial liabilities are only set-off and the net amount is reported in the consolidated financial statements when there is a legally enforceable right to set-off the recognised amount and the Group intends either to settle on a net basis. which is subject to risks and rewards that are different from those of other segments. 5.16. IPO’s related activities and secondary private placements. clearing and settlement. 5.16. lending. leasing. trade finance.14 5. 2009 5. The consolidated financial statements are presented in Pak. The Group’s primary format of reporting is based on business segments. or to realise the assets and to settle the liabilities simultaneously. Operating leases Leases where significant portion of risks and rewards of the ownership are retained by the lessor are classified as operating leases.15 Appropriations subsequent to the date of statement of financial position Appropriations subsequent to year end are recognised during the year in which those appropriations are made.. Rupee. Payment and settlement Payment and settlement includes income from payments and collections.

2 3.1 These represent overnight to three months placements with correspondent banks.095.763 994.104 1.505 120.997 4.567 3.520.003 14.901 3.030.385. carrying interest rates determined with respect to underlying currency benchmarks at the rates ranging from 0. 25 issued by the State Bank of Pakistan and is remunerated at the rate 0.025 625.850 2. page | 143 .555 8.020 1.838.498 19.029.1% to 3%) per annum receivable on maturity.Annual Report | 2009 Rupees in ‘000 Notes 2009 2008 6.331 472.244 16.392.374.1 7.070 5.019 15.2 Deposits are maintained with the State Bank of Pakistan to comply with its requirements issued from time to time.277. BALANCES WITH OTHER BANKS In Pakistan On current accounts On deposit accounts Outside Pakistan On current accounts On deposit accounts 427.640 457.734.0 % per annum).373.666 6.920 8.658.701 11.843. Note 2009 2008 Rupees in ‘000 7.1 6.101 19.295 656.10% (2008: 0. These represent statutory cash reserve maintained against foreign currency deposit mobilised under Foreign Exchange Circular No.0% (2008: 0.832.378 6.967.082 1.995 1. CASH AND BALANCES WITH TREASURY BANKS In hand: Local currency Foreign currencies National Prize Bonds With the State Bank of Pakistan in: Local currency current accounts Foreign currency current account Foreign currency deposit account With National Bank of Pakistan in : Local currency current accounts 6.476.1 6.078.03% to 0.733.816 7.256 3.246 4.455.757 1.551.360.115 2.1 6.

3 8.000 4.496.704.733 235.674) 4.754 – – – – 2.Askari Bank Limited | Consolidated Financial Statements Notes to the Consolidated Financial Statements For the year ended December 31.554.1 8.704.754 – – – – – 8.000 4.000 4.2 8. LENDINGS TO FINANCIAL INSTITUTIONS Call money lendings Repurchase agreement lendings (reverse repo) Purchase under resale arrangement of equity securities 8.704. 2009 2008 8.net of provision Particulars of provision against reverse repo Opening balance Charge for the year Reversals Closing balance 8.731. These are secured against underlying Government Securities.150.479.754 – 4. These carry mark-up at rates ranging from 12% to 12.000 630.754 – 1.5 Particulars of lending In local currency In foreign currencies 4.733 – 4.674 675.01% (2008: 18% to 18.754 – 4. the differential between the contracted rate and resale price is amortised over the period of related contracts and recorded under mark-up/return/interest earned.754 – 100.731.500 thousand available to AIML.25% per annum.000 3.554.733 4.000 100.5% to 20%) per annum.000 4. These represent term deposit for a term of 100 days and will mature on January 1.000 3.9%) per annum and maturities of upto 3 (2008: upto 2) months.059 – 82.5% to 18. This term deposit carries mark-up at rate 11.6 Securities held as collateral against lendings to financial institutions Market Treasury Bills Pakistan Investment Bonds Purchase under resale arrangement of listed shares 3.496. Islamabad against running finance facility of Rs.754 – 1.631. The deposit is pledged with MCB Bank Limited.733 235.150.674 – 82. These include lending under repurchase agreement amounting to Rs. These represent shares of companies purchased under resale arrangements carrying mark-up at rates ranging from 16.000 2.479.4 Rupees in ‘000 8.733 (82.000 630.733 – – – – 3.554.000 thousand) to a related party.754 page | 144 . 500.866.733 630.649.2 These carry mark-up at 12.479.733 2.150.754 2009 Held by the Bank Further given as collateral Held by the Bank 2008 Further given as collateral Rupees in ‘000 Total Total 8. 31.1 8.733 Term deposits with MCB Bank Limited Others Less: Provision against reverse repo Lendings to financial institutions .4% (2008: 12% to 14.731.000 3.000 3.479.754 1.3 100.4 35. 2010. 2009 Rupees in ‘000 Notes 2009 2008 8.000 4.6% (2008: 12.01%) per annum with maturities of upto 1 (2008: upto 1) month.631. Nil (2008: Rs.674 82.496.

7 9.182 36.086.729.165 – 811.650) 66.310 (3.681 167.133.979 395.Bonds Government of Pakistan Euro Bonds Sukuk .270 37.029.676 949.454 3.868.680) (75.004) 4.182 67.000 13.885.7 9.000 100.Annual Report | 2009 9.860.000 888.043.246 (405) (79.046.947.102 – 4.8 9.413.099 1.907 1.375 (1.837 948.965 57.508.370.668 100.864.662.261.493 5.523. INVESTMENTS 2009 2008 Total Held by the Bank Given as collateral Total Notes Held by the Bank Given as collateral Rupees in ‘000 9.417.2.689 278.186.729.481.000 100.2 (5.369 1.000 1.469 15.Certificates Foreign securities 167.508.876 Held to maturity securities Term Finance Certificates Pakistan Investment Bonds Government of Pakistan Sukuk .182 36.net Total investments at market value 9.287 30.369 1.972 page | 145 .702 1.454 4.523.617 22.516.310 134.4 9.250 11.126 134.000) 66.287 30.689 278.422 – – 4.280 181.136.472 100.099 1.662.516.868.250 (5.000 1.720 22.000 888.556.511.7 9.579 (405) (71.955 – 1.375 (1.330 930.392) 34.261.289 195.269 – – 811.371 – (8.222 Investment in associate Askari General Insurance Company Limited Investment at cost Less: Provision for impairment in value of investments in – unlisted shares – Sukuk certificates Investments (net of provision) Add / (less): Unrealised (deficit) / surplus on revaluation of held for trading securities .208 4.680) (75.029.707.897 4.464.481.845 196.645.896) – 36.590) 806.9 9.707.Certificates Credit Linked Notes – 4.205.4 9.144 3.000 6.000 2.306 897.2.270 33.681.979 395.676 949.193 2.646) 62.702 1.265 100.310 11.982.146 95.000 100.306 897.133.330 930.130.146 95.250 167.000 986.982) 35.515.807 – – – – – – – – – – 4.771.000 986.442.000 6.net (Deficit) / surplus on revaluation of available for sale securities .774 – – – – – – – 781.469 16.472 100.252 – (4.1 Investments by types: Held for trading securities Fully paid ordinary shares Available for sale securities Market Treasury Bills Pakistan Investment Bonds Fully paid ordinary shares Fully paid preference shares Askari Income Fund .Units Askari Islamic Income Fund Askari Islamic Asset Allocation Fund Term Finance Certificates National Investment Trust (NIT) Units National Investment Trust (NIT) Government Bond Fund Sukuk .955 – 1.049.5 9.523.417 125.771.508 421.222 – – – – – – – 1.896) – 36.292 – 767.602 9.352 11.668 100.508 421.658.493 5.774 1.10 11.12 781.907 1.310 44.965 62.11 9.000 – – – – – – – – – – 811.182 62.000 100.280 181.2.276.681 167.053.208 4.475 9.742.837 948.417 125.000 13.511.672 (3.265 100.443 336.289 195.000) 62.523.965.845 196.

5 9.646.263.681 167.375 (1.784 – 76.982) 35.Units National Investment Trust (NIT) Government Bond Fund Total investment at cost Less: Provision for impairment in value of investments in unlisted shares Investments (net of provisions) (Less) / add: Unrealised (deficit) / surplus on revaluation of held for trading securities .791.280 196.249.2.761 9.385 7.173 1.680) 66.net Less: Deficit on revaluation of available for sale securities .680 3.266 Fully paid preference shares Listed companies Term Finance Certificates Listed Term Finance Certificates Unlisted Term Finance Certificates Foreign Securities Mena Transformation Fund Credit Linked Notes Other Investments Sukuk .252.388 508 – 508 3.975.4 9.472 100.493 576.615.676 949.2.475 (3.391 9.Certificates National Investment Trust (NIT) .12 195.Askari Bank Limited | Consolidated Financial Statements Notes to the Consolidated Financial Statements For the year ended December 31.680 3.896 page | 146 .2 Particulars of provision in respect of type and segment Available for sale securities Fully paid ordinary shares .742.333 125.6 95.680 3.965.955 – 1.417.864.2.904.375 3.000 80.896 3.330 660.306 617.3 9.996.972 9.617 16.647.979 23.672 (405) (79.680 3.896 76.unlisted company Sukuk certificates 5.000 1.289 278.656 12.043.650) 66.367 6.1 (80.653 55.net Total investments at market value 9.896) 36.965 421.2 Investments by segments: Federal Government Securities Market Treasury Bills Pakistan Investment Bonds Government of Pakistan Sukuk Bonds Government of Pakistan Euro Bonds Government of Pakistan Sukuk Certificates Fully paid up ordinary shares / units Listed companies / funds Unlisted companies 9.896 – 3.897 6.586 55.4 37.2.737.860.735 14.261.485.208 617.454 4.000 1. 2009 Rupees in ‘000 Notes 2009 2008 9.3 9.885.235 36.287 395.940.579 22.752 181.115.680 75.144.778.2.000 2.169.200.936 948.369 1.1 Particulars of provision for impairment in value of investments Opening balance Charge for the year Reversals Closing balance 9.464.784 80.2.9 9.046.352 9.780 1.508 45.761 67.4 3.

029 – – – – – – 50.061 1.3 Investments in listed Companies shares / Units No.42% to 13.279 64.55 33.159 2.243 49.000.2.814 245.18 26.520 2.300 101.000 3.736 61.000. 2014 September 26.569 37.575 – 83.924.295 4.701 75. 9.939 202 181.971 500.3 Principal terms of investments in Federal Government Securities Name of investment Maturity Principal Payment Rate Coupon Payment Market Treasury Bills Pakistan Investment Bonds Government of Pakistan Sukuk Bonds Government of Pakistan Euro Bonds Sukuk Certificates – House Building Finance Corporation – Pakistan Domestic Sukuk Company Ltd.611 9.660 1.320 113.000 6.000 – 5.000 – 500.518 41 11 14.000 100.000 100.000 1.257.899 7 37 3.300.387 40.182 986.499 245.00 100.265 – 6.500.304 – – 364.821 1.757.30 31.393 86.611 8. 2017 Semi-annually Semi-annually On maturity semi-annually semi-annually semi-annually 9.13% 6 months KIBOR plus 1% Weighted average yield of 6 months market treasury bills 6 months KIBOR plus 0.295 43.218 – – 4.758.58 – 5. Industries Limited Dawood Equities Limited Dawood Lawrencepur Limited Dewan Cement Limited Dewan Salman Fibres Limited Dost Steel Mills Limited – 48. 2011 On maturity On maturity On maturity On maturity Semi-annually On maturity 11.300 1.60 331. of ordinary shares / certificates / units 2009 2008 Paid-up value per share/ certificate/unit Rupees Name of companies / mutual funds 2009 Rupees in ‘000 2008 – 584.9% 8% to 14% 6 months LIBOR plus 2.2.2% 7.902 – – – – – – 5.85 4.000 2.771 5 2.056.350.000 1.455 632 595 462.25% at maturity semi-annually semi-annually semi-annually semi-annually semi-annually – Karachi Shipyard and Engineering Works – Sui Southern Gas Company Limited – WAPDA February 04.01 100.86 98.4 These represent investments by the wholesale bank branch.S.42 61.06 3.Annual Report | 2009 9.009.05 – 39.126 9 1 23 279 20 29 page | 147 .400 798.000 299.10 Askari Income Fund Askari Islamic Asset Allocation Fund Askari Islamic Income Fund Askari Sovereign Cash Fund Atlas Bank Limited Atlas Fund of Funds Attock Cement Pakistan Limited Attock Petroleum Limited Attock Refinery Limited Azgard Nine Limited Bank Alfalah Limited Bank Al-Habib Limited Bank Islami Pakistan Limited BOC Pakistan Bosicor Pakistan Limited Cherat Cement Company Limited Crescent Steel Mills Limited D.000.000.000 29.70 – – – – – – ABL Income Fund Adamjee Insurance Company Limited Al-Abbas Cement Industries Limited Al-Meezan Mutual Fund Allied Bank Limited Arif Habib Bank Limited Arif Habib Limited Arif Habib Securities Limited Askari Asset Allocation Fund Askari General Insurance Company Limited – note 9.427 42.87 – – 12.000 54.165 61 11. 2016 June 28.985 42.141 11.667 100.740 1.095 3.265 100.4% 6 months KIBOR plus 0. G.000 100.124 3.00 99.056.107.352 701 86 524 81.256 57.293 52.133.182 938.000 3.000.83 – 6.086 970 – 3.200 – 1.95 13.000 1.500.8% 6 months KIBOR minus 0.000 – 1.186 74.000 100.000 – 1.000 41.798.141 11.514 3.617 43 – 51. February 2010 to December 2010 December 2010 to September 2019 January 2010 March 2016 May 8.881 888 1.66 106.114 235.972 – 11. 2012 July 13.56 1.854.90 144.771 21.380 3 – 114 42 66 76.01 4.934 12. Khan Cement Company Limited D.19 52.850.059.620 260.000 10.000 2.

80 71.526 4.000 1.000 1.599 187.342 3.760.000 – 2.104 13.000 50.809 640.700 – 3.112 480 969.50 – 34.006 457 17.000 575.00 14.601 25.19 – 27.023 48.915 75.698 – 36.08 – 17.626 – 36.500 1.187 509.074 8.652 8.139 650 – 97.751 10.000 546.724 14 101.000 1.704 516.830.950 3 7 636 50.613 1.201 7.363 – 34.161 1.13 – – – 3.Askari Bank Limited | Consolidated Financial Statements Notes to the Consolidated Financial Statements For the year ended December 31.000 7.03 29.034.719 4.300.234 228.318 78.427.500 204.675 100.380 153.356 18 25.091 59.213.05 18.385 – 67.999 25.039 14.610.03 10.713 – 7.000 137.899 743.239.000 553.093 1.452 189.000 4.300.562 136 41.000 10.86 – 11.204 587.000 1. 2009 Paid-up value per share/ certificate/unit 2008 Rupees Name of companies / mutual funds No.647 14.000 – – – 1.52 – 4.886.300 40.931 1 417 28 1.827 6.952 – 3.000 – 1.72 – 38.000 – 1.500.184 27 45.500 6.64 198.311 35.733 47.700 556 882.090 140.005 600.038.878 10.67 4.825 352 100.109 85.059.000 150.875 2.029 6.056 7 5.000 14.941 254.181.927 1.508.24 – 142.952 95.299 – 5.595 – 99.133 – 92.000 10 – 17 6.428 2.18 114.000 6.990 7.568 1.485 102 85 4 3.700.000.53 189.000 1.08 – 8.663 75.280 75 730.00 108.98 4.100.606 2.69 73.000 – 5.000 240.865 4.000 – 6.84 – 3.195 1.25 62.000 – 513.088 77.64 – 16.000.800.726.44 26.000 – 3.000 2.018.400.946 110.42 – 145.568 650.000 – 1.963 – 32.336 1.974 34.07 EFU General Insurance Limited Engro Chemical (Pakistan) Limited Eye Television Network Limited Fauji Cement Company Limited Fauji Fertilizer Bin Qasim Limited Fauji Fertilizer Company Limited Faysal Bank Limited First National Equities Limited Golden Arrow Selected Stock Fund Habib Bank Limited HBL Stock Fund Hira Textile Mills Limited Honda Atlas Cars (Pakistan) Limited Hub Power Company Limited ICI Pakistan Limited IGI Investment Bank Limited Indus Motor Company Limited Invest and Finance Securities Limited Jahangir Siddiqui and Company Limited Javed Omer Vohra and Company Limited JS Bank Limited JS Income Fund JS Investments Limited JS Large Capital Fund JS Value Fund Kot Addu Power Company Limited Lucky Cement Limited Maple Leaf Cement Company Limited Mari Gas Company Limited MCB Bank Limited MCB Dynamic Cash Fund Meezan Balanced Fund Meezan Bank Limited MyBank Limited National Bank of Pakistan National Refinery Limited Netsol Technologies Limited NIB Bank Limited Nishat (Chunian) Mills Limited Nishat Textile Mills Limited Oil and Gas Development Company Limited Pace Pakistan Limited Packages Limited Pak Oman Advantage Fund Pak Suzuki Motor Company Limited Pakistan Electron Limited Pakistan Oilfields Limited Pakistan Petroleum Limited Pakistan Premier Fund Pakistan Refinery Limited Pakistan Re-Insurance Company Limited Pakistan State Oil Company Limited Pakistan Strategic Allocation Fund Pakistan Telecommunication Company Limited Pervez Ahmed Securities Limited PICIC Growth Fund Pioneer Cement Limited Reliance Income Fund Samba Bank Limited Searle Pakistan Limited Shell Pakistan Limited Sitara Peroxide Limited Soneri Bank Limited – 73.606 81.585.808 – – – 3.961 3.800 – 2.70 – 5.062 24.000 1.974 13.00 – 39.313 – 650.000 200.915 1. of ordinary shares / certificates / units 2009 2009 Rupees in ‘000 2008 – 534.264 11.231.74 146.744 – 25.080 – 17.324 41.846 1.086 – 3.511.779 81.800.613.000 30 60.557 .820 148 92.906 4.000 – 335.696.000 219.016 23.18 20.000 1.083 2 19.000 7.029 156 7.108.404 45.18 4.45 5.371 50.837 29.55 6.23 – 144.033.900 – 100.000 – 1.50 71.000 – 139.172.917 1.204 page | 148 151 113.900.37 – 6.643 51 85.000 1.229 13.077 69 4.809 – 9.300 7.000.151 16.958 – 73.392 100.027 14 11.284.00 10.000 10.096 – 48.600.280 6.300.187 156.500 218.000 130.814 261 – 6.108 40 71.93 – 5.782 365 13.525 68.069 61.34 6.000 – 1.483 2.000 347.82 20.812 300.401 64.600 – 138.455 47.281 – 19.33 – 247.

030.130 – 31 Dec 2008 – Mr.000 36.000 25.000 2.896 thousand) is considered as impairment and has been fully provided for.089.000 10.Listed No.234.000.000 100.779 Add / (less): Surplus / (deficit) on revaluation of shares . M.26 5. 9.890 69 1 55 – 30.000 25. 2000.1 This represents subscription by the Bank towards capital of Khushhali Bank as per the State Bank of Pakistan letter No. the sale/ transfer of these shares is subject to the prior approval of the State Bank of Pakistan. 9.054. of preference shares 2009 2008 Paid-up value per share Rupees Investee Rupees in ‘000 Rate % Rupees in ‘000 Book Value 2009 2008 Market Value 2009 2008 10.000 70.761 – 3.586 89.653 (1.000 – 1.700 25.447 4.4.000 568. In accordance with the restrictions imposed under section 10 of the Khushhali Bank Ordinance.4 Particulars of investments held in unlisted companies Cost / paid-up value per share Based on audited financial statements as at Investee Notes Percentage of holding Number of shares Rupees Total paid-up value Break up value Name of Chief Executive Rupees in ‘000 Khushhali Bank Limited Pakistan Export Finance Guarantee Agency Limited – a related party 9.000 2.680 thousand (2008: Rs.641 – 310. 5.208 17.033 65.5 Particulars of investments held in preference shares .511 2.4. of ordinary shares / certificates / units 2009 2008 Paid-up value per share/ certificate/unit Rupees Name of companies / mutual funds 2009 Rupees in ‘000 2008 2.700 page | 149 .500.264 – – 6. S.500.000 25.18 51.70 13. 2000.380.940.562 23.000.000 5. 3.569 – – 605 42.Ghalib Nishtar Mr.800 1. Zaeem 9.044 10 10 50.M.4.25 Average of ask side of six month KIBOR plus 2 percent per annum 70.52 – Sui Northern Gas Pipelines Limited Sui Southern Gas Company Limited Thatta Cement Limited The Bank of Punjab Tri Pak Films Limited United Bank Limited UTP Large Capital Fund 92.521.718.1 9.000 106.72 – – 99.680 55.000 10 10 Chenab Limited Masood Textile Mills Limited 9.680 55.874) 2.000 95. BSD (RU-26/625-MfB/13317/00) dated August 07.000 125.901 62 3.4.144.93 5.2 The difference between the paid up value and break up value of Pakistan Export Finance Guarantee Agency Limited amounting to Rs.737 3.000 81.(net) Market value as on December 31 9.000 95.728 5.Annual Report | 2009 No.2 2.100 830.000.

000 5.45% to 19.760 – 21.700 26. Ameer-ur-Rehman) Orix Leasing Pakistan Limited (Chief Executive: Mr.916 49.000 25. Farrukh H.333 33. Dewan Abdul Baqi Farooqui) Engro Chemicals Pakistan Limited (Chief Executive: Mr.000 4.45% to 19.600 12.166.000 1.656 5. Saleem) Worldcall Telecom Limited (Chief Executive: Mr.200 86.000 220.263 174.333 233.780 68.000 10.090 18.279.871 33.000 4. Tanwir Safder Cheema) Gujranwala Electric Supply Company Limited (Chief Executive: Mr.000 430.656 4.333 74.106 50.000 59.968 59.000 70.333 233.000 295.665 1.693 149.200 140.521 4.067 Allied Bank Limited Bank Alfalah Limited Bank Al-Habib Limited IGI Investment Bank Limited NIB Bank Limited Orix Leasing Limited Pace Pakistan Limited Pak Arab Fertilizer Limited Pakistan Mobile Communication (Private) Limited Royal Bank of Scotland Soneri Bank Limited Standard Chartered Bank Limited United Bank Limited Worldcall Telecom Limited 4.615.43% (2008: 8.000 4.950 121.000 10.744 50.166. Aijaz Haroon) Shakarganj Mills Limited (Chief Executive: Mr.000 – 15.000 5.714 2. Humayun Murad) Pak American Fertilizers Limited (Chief Executive: Mr.665 1.548 74.665 1.991 4.493 642. Munaf Ibrahim) KASB Securities Limited (Chief Executive: Mr.000 37.000 5.993 5.000 68. Sadaffe Abid) National Transmission and Dispatch Company Limited (Chief Executive: Mr.000 10.000 10.194 350.621 – 4.000 – – 70. of certificates 2009 2008 Company’s Name Redeemed value per certificate Rupees 2009 2008 Rupees in ‘000 Listed 13.000 100.773 5.030 401.000 – 12.959 59.669 35.600 12.43%) per annum and having maturity periods of upto 10 years (2008: 8 years).978 1.800 22.000 30.950 50. Asad Umar) Faisalabad Electric Supply Company Limited (Chief Executive: Mr.400 8. Shaikh) Bank Alfalah Limited (Chief Executive: Mr.493 40.023 Avari Hotels Limited (Chief Executive: Mr.930 164.000 – 2.385 Book value as on December 31 Unlisted 30.985 212.002 5.000 1.000 140.647.485.900 10.112 6.166.000 11.333 233.143 5.022 2.387 – 25. Baber Ali Syed) Book value as on December 31 These carry rate of return ranging from 8.580 326.000 24.000 84.000 249.000 700.000 4. Ahsan M.661 172.270 174.333 233.370 25. Byram Dinshawji Avari) Azgard Nine Limited (Chief Executive: Mr.050 699.669 35.166.924 3. Muhammad Ibrahim Majoka) Islamabad Electric Supply Company Limited (Chief Executive: Mr.000 1.000 30.908 123.000 27.990 199.6 Investment in Term Finance Certificates No.994 4.000 20.000 – 220.800 50.230 – 40.665 1.000 43. page | 150 .907 50.988 30.000 10.000 5.735 93.367 76.431 6. Shakil Sadiq) Dewan Farooq Spinning Mills Limited (Chief Executive: Mr.999 5.000 15.214.000 233.000 233.222 10. Fazeel Asif) Pakistan International Airlines Corporation Limited (Chief Executive: Mr. Ahmed Jaudet Bilal) Pak Arab Fertilizer Limited (Chief Executive: Mr.000 – 20.000 – 150. Sabzwari) Kashf Foundation (Chief Executive: Ms.000 5.166.892 49.000 140.311 1.997 4.446 4.000 – 5.166.991 4. Raja Abdul Ghafoor) Jahangir Siddique and Company Limited (Chief Executive: Mr.000 700.023 4.000 86.000 5.760 149.720 22.990 2.051 – 199.665 165. Fawad Ahmad Mukhtar) Power Holding Private Limited (Chief Executive: Mr.200 140.993 4.665 360. Ahmed H.070 699.252.800 2.000 8.808 5.121 40.800 – – 247.000 29.991 4.000 455.208 4.000 430. 2009 9.Askari Bank Limited | Consolidated Financial Statements Notes to the Consolidated Financial Statements For the year ended December 31.250 5.

25% p.000 241.000 1.962 thousand. 2012 August 5.979 9.Available for sale Name of Investee Rate Maturity 2009 2008 Rupees in ‘000 Eden Builders Private Limited House Building Finance Corporation JDW Sugar Mills Limited K.000 200.a.50% per annum maturing on December 20. Weighted average yield of 6 months market treasury bills Average of offer side of 6 month KIBOR plus 2.592 1.668 thousand). Average of offer side of 3 month KIBOR plus 1.Held to maturity Name of Investee Rate Maturity 2009 Rupees in ‘000 2008 Arzoo Textile Limited Educational Excellence Limited Karachi Shipyard and Engineering Works Sui Southern Gas Company Limited WAPDA Average of offer side of 6 month KIBOR plus 2% p.S. 91. 2014 June 28.000 1.843 242.a.000 200.8 This represents investment in Funds managed by Askari Investment Management Limited. 2012 December 13. April 14.L.508.000 270.000 190. March 8.000 190.a. 2012.10 The Bank has invested in MENA Transformation Fund I.a.4% p. 2014 November 19. 2009: Rs.511.289 66. Average of offer side of 6 month KIBOR plus 0. page | 151 .a.a.a.000 241.a. Audited financial statements of AGICO for the year ended December 31. 51. 2012 August 19.3% p. Average of offer side of 3 month KIBOR plus 1.000 90.9 9.000 150.75% p.a.530 10.666 200. a wholly owned subsidiary of the Bank. 2014 May 8. 2011 December 31. Average of offer side of 6 month KIBOR plus 1.789 10. 2012 July 13.979 200.a.a. 2016 June 28.000 897.000 19. 2013 120.5% p. 53. 2013 February 04.749 Total revenue and loss after tax for the nine months ended September 30. Average of offer side of 3 month KIBOR plus 1. 2017 110. 2008: Rs.P a closed ended fund having six year term.1% p.000 270. Average of offer side of 3 month KIBOR plus 1.346.761 thousand and Rs. Average of offer side of 6 month KIBOR plus 2.000 190. 9. however the summarized financial position and results as per the most recent available financial statements as at September 30.1% p.500 300. 2009 were not available.8% p. Singapore at 3 months USD LIBOR plus 3. 2014 June 20. Sulmanji and Esmailiji and Sons Private Limited Kohat Cement Limited Pak American Fertilizer Limited Pak Electron Limited Pakistan Domestic Sukuk Company Limited Shahraj Fabric Limited Sitara Peroxide Limited Average of offer side of 3 month KIBOR plus 2.8% p.25% p.12 This represents investments by the wholesale bank branch in credit linked notes issued by Standard Chartered Bank.280 9. 2009 are as follows: Rupees in ‘000 Total Assets Total Liabilities Net Assets 1. Sukuk Certificates .000 150.Annual Report | 2009 9. 2009 were Rs. Average of offer side of 3 month KIBOR plus 0.000 50.3% p.250 100.207 thousand respectively.7 9.103.a.11 Sukuk Certificates .a.500 300.000 200.000 930.508 110.000 150.842 166. 2015 September 28. Average of offer side of 6 month KIBOR plus 2% p. 22. a listed associated company (market value as at December 31. Investment in associate represents 15% (2008: 15%) investment in the equity of Askari General Insurance Company Limited. 2012 September 26. Average of offer side of 6 month KIBOR minus 0.000 200.000 150.a. Average of offer side of 6 month KIBOR plus 1% p.

051 157.441 – 6.13.002 1.480 41.313 7 53 1.13.062 25.028.470 9.763 2.560 107 72 4 1.731 426 4.693.247 113.1 Fully paid up ordinary shares – note 9.557 28.381 29.739 121.064 – 5.660 31.13.218 – – 4.359 111.814 4.607 – 275 – 64.901.720 36.949 – 11.000 100. G.589 56.Askari Bank Limited | Consolidated Financial Statements Notes to the Consolidated Financial Statements For the year ended December 31.205 114.943.489 16.798 2.324 74.990 52.594 1.424 5.808 – – – 3.874 100.569 29.750 2.083 10.072 – 68.725 6.787 – unrated unrated – AA – unrated – A – unrated unrated unrated unrated unrated A– unrated unrated unrated AA A+ AA – A – – unrated A+ unrated – – – – – – – AA – unrated unrated – – – 4 .649 1.Star AA+ unrated unrated unrated unrated unrated A unrated BBB– AA+ BB+ .548 – 101.Star AA+ – unrated unrated unrated – A unrated – AA+ – 16.050 10 1 26 248 30 28 20 10.119 104.046 14. Khan Cement Company Limited D.13 Quality of Available for Sale Securities 2009 Rupees in ‘000 Market Value Rating Market Value 2008 Rating Market Treasury Bills – note 9.645 38 10 7.745 5 1.310 12.808 22.193 3 – 106 226 76 21. Industries Limited Dawood Equities Limited Dawood Lawrencepur Limited Dewan Cement Limited Dewan Salman Fibres Limited Dost Steel Mills Limited EFU General Insurance Limited Engro Chemical (Pakistan) Limited Eye Television Network Limited Fauji Cement Company Limited Fauji Fertilizer Bin Qasim Limited Fauji Fertilizer Company Limited Faysal Bank Limited First National Equities Limited Golden Arrow Selected Stock Fund Habib Bank Limited HBL Stock Fund Hira Textile Mills Limited Honda Atlas Cars Limited Hub Power Company Limited ICI Pakistan Limited IGI Investment Bank Limited Indus Motor Company Limited Invest and Finance Securities Limited Jahangir Siddiqui and Company Limited Javed Omer Vohra and Company Limited page | 152 37.1 Pakistan Investment Bonds – note 9.675 – – – – – – – 92.148 1 388 22 unrated unrated A AA unrated – A A unrated A+ unrated unrated unrated – A– unrated unrated unrated AA A+ AA AA A– unrated unrated unrated A+ unrated unrated unrated unrated BB unrated unrated AA AA unrated unrated unrated unrated AA A– 5 .212 – 19.905 16 4.000 – 1.133 45.252 90.477 62.S. 2009 9.294 13.368 – 18.2 ABL Income Fund Adamjee Insurance Company Limited Al-Abbas Cement Industries Limited Al-Meezan Mutual Fund Allied Bank Limited Arif Habib Bank Limited Arif Habib Limited Arif Habib Securities Limited Askari Asset Allocation Fund Askari Islamic Asset Allocation Fund Askari Islamic Income Fund Askari Sovereign Cash Fund Atlas Bank Limited Atlas Fund of Funds Attock Cement Limited Attock Petroleum Limited Attock Refinery Limited Azgard Nine Limited Bank Alfalah Limited Bank Al-Habib Limited Bank Islami Pakistan Limited BOC Pakistan Limited Bosicor Pakistan Limited Cherat Cement Limited Crescent Steel Mills Limited D.

975 78.406 1.Star – unrated A – unrated – AA– AA AA– – – A+ AA+ – unrated unrated 3 .376 A– 5 .13.474 81.003 595 – 73.081 1.496 23.Star unrated – 2 .881 – 71.464 17.487 27.952 4.Star 1.915 78.Annual Report | 2009 2009 Rupees in ‘000 Market Value Rating Market Value 2008 Rating JS Bank Limited JS Income Fund JS Investments Limited JS Large Capital Fund JS Value Fund Khushhali Bank Limited Kot Addu Power Company Limited Lucky Cement Limited Maple Leaf Cement Company Limited Mari Gas Company Limited MCB Bank Limited MCB Dynamic Cash Fund Meezan Balanced Fund Meezan Bank Limited MyBank Limited National Bank of Pakistan National Refinery Limited Netsol Technologies Limited NIB Bank Limited Nishat (Chunian) Mills Limited Nishat Textile Mills Limited Oil and Gas Development Company Limited Pace Pakistan Limited Packages Limited Pak Oman Advantage Fund Pak Suzuki Motor Company Limited Pakistan Electron Limited Pakistan Export Finance Guarantee Agency Limited Pakistan Oilfields Limited Pakistan Petroleum Limited Pakistan Premier Fund Pakistan Refinery Limited Pakistan Re-Insurance Limited Pakistan State Oil Company Limited Pakistan Strategic Allocation Fund Pakistan Telecommunication Company Limited Pervez Ahmed Securities Limited PICIC Growth Fund Pioneer Cement Limited Reliance Income Fund Samba Bank Limited Searle Pakistan Limited Shell Pakistan Limited Sitara Peroxide Limited Soneri Bank Limited Sui Northern Gas Pipelines Limited Sui Southern Gas Company Limited Thatta Cement Limited The Bank of Punjab Tri Pak Films Limited United Bank Limited UTP Large Capital Fund Fully paid preference shares Chenab Limited Masood Textile Mills Limited Askari Income Fund Units – note 9.357 56.330 140 24.Star – unrated – 4 .399 7.356 62.396 – 36.411 13 1.890 45 22.600 – – 138.836 – 73.710 4 7 592 51.211 2 18.760 – 70.080 – 14.418 9.916 28.700 25.090 25.668 A – AA– unrated – A– unrated unrated D – AA+ – unrated A+ A– AAA AAA – AA– unrated – AAA – AA AA– unrated – – unrated unrated 3 .254 17.000 80.437 – 51.404 119 24.005 10.485 8 4.Star page | 153 .701 11 – 27 50.080 – 7.663 – 50.Star unrated unrated AAA 4 .205 26.809 – 29.460 14 9.497 62 1 48 – 11.Star unrated unrated unrated BBB unrated A BBB unrated unrated AA– AA AA– unrated AA– – AA+ 4 .145 3.600 25.000 25.468 47 20.000 921.975 – 36.424 17.488 6.462 91.784 9.Star AA– – 5 .866 48.627 – 34.992 73.2 5.854 311 417 5.089 42.374 – 3.735 75.560 – 60.000 4.000 888.990 5.341 9.013 2.Star A+ A AAA AAA unrated AA– unrated A+ AAA A+ AA AA– unrated A unrated unrated unrated 5 .076 – – 624 46.461 5.735 3.Star A– unrated unrated BBB+ unrated AA+ unrated 5 .Star unrated unrated 5 .490 18.

684 thousand has also been recognised as impairment of available for sale equity portfolio. 2008 reduced to Rs.540 2.224 10.000 431.943 329.864 321.998 6. 2009 2009 Rupees in ‘000 Market Value Rating Market Value 2008 Rating Term Finance Certificates Allied Bank Limited Avari Hotels Limited Azgard Nine Limited Bank Alfalah Limited Engro Chemical Pakistan Limited Faisalabad Electric Supply Company Limited Gujranwala Electric Supply Company Limited IGI Investment Bank Limited Islamabad Electric Supply Company Limited Jahangir Siddique and Company Limited KASB Securities Limited Kashf Foundation National Transmission and Dispatch Company Limited NIB Bank Limited Orix Leasing Pakistan Limited Pace Pakistan Limited Pak American Fertilizer Limited Pak Arab Fertilizer Limited Pakistan International Airlines Corporation Limited Power Holding Private Limited Shakarganj Mills Limited United Bank Limited World Call Telecom Limited National Investment Trust (NIT) Units National Investment Trust (NIT) Government Bond Fund Sukuk Certificates Foreign securities Mena Transformation Fund 66.000 125.000 23.166.200 1.665 – 1.550 665.370 25. 9.000 44.508. 2008 as part of equity in terms of the options permitted by the State Bank of Pakistan’s BSD Circular No. 9. 3 . continuing with the impairment policy followed by the Bank. an amount of Rs.665 376.335 1.255 79. 9.705 – 1.216 1.Askari Bank Limited | Consolidated Financial Statements Notes to the Consolidated Financial Statements For the year ended December 31.858 76.675 – 704.422 – – 50.950 3.418 50.078 – 24.3 Local securities have either been rated by ‘The Pakistan Credit Rating Agency Limited (PACRA) or ‘JCR-VIS Credit Rating Company Limited (JCR-VIS).550 217.13. 145.525.431 13.373 249.13.311 1.510.601 101.13.119.2 Ratings for these equity securities / units represent ‘Entity Ratings’.279.995 260.037 61.768 74. 2009. as permitted by the above referred circular.738.14 The Bank recognised impairment loss arising on valuation of listed equity portfolio held as available for sale on December 31.166. In addition.1 These are Government of Pakistan guaranteed securities.985 700.565 685. 4 dated February 13.433 262.730 425.166.796 9.510 387.Star – unrated unrated AA– A– AA– – AA unrated unrated – unrated AA+ AA– A– – A+ AA+ AA– AA– AA – – A– AA AA– page | 154 .724 4 .665 1.665 1.853 344. 362 228.Star unrated unrated unrated AA– A– AA– AA– AA unrated unrated A+ unrated AA+ AA– A– unrated A+ AA & AA+ A+ AA– AA unrated unrated D AA A 101. 285.383.166.665 27.166.191 62. 440.665 166.040 29.659 228.147 180.373 thousand due to price changes during 2009 and was charged to profit and loss account on a quarterly basis during 2009. whereas foreign security is unrated.145 140. The said loss amounted to Rs.866 thousand as of December 31.166. These ratings reflect independent credit risk assessment by respective credit rating entities.333 49.214.280 170.

844) 135.158 281.In Pakistan Net book value of assets / investments in Ijarah under IFAS 2 in Pakistan Bills discounted and purchased (excluding treasury bills) Payable in Pakistan Payable outside Pakistan 9.582.1.1.973 111.833 17.043.1 Particulars of advances 139.633.973 10.390) (414.901 5.759 1.865. 44.318 147.379 2. In Pakistan Outside Pakistan Ijarah Financing .830.242 10.830.884 – 10.040 128.774.106.16 9.610.752 139.613.699 139.029.111 9.973 (10.514 120.633.157) (573.17 Market Treasury Bills.257.092.994 8.1 In local currency In foreign currencies 10. running finances.106. Notes 2009 2008 Rupees in ‘000 10.737.745 (11.027.376.648 14.039.3 126. cash credits.830.481 8.862 139.878 123.025.751 147.2 Short term ( for upto one year) Long term ( for over one year) 119.net of provision 10.818.000.593.041) (12.023. Investments given as collateral include securities having book value of Rs.184) (11.056.642) (350.635.314 Financing in respect of continuous funding system Advances .958 139.787.221 111. etc.310 8.745 130.658.15 Unrealized (loss) / gain on revaluation of investments classified as held for trading Fully paid ordinary shares (405) 22.633.993.745 page | 155 .012.731) 128. Pakistan Investment Bonds and Federal Investment Bonds are securities eligible for rediscounting with the State Bank of Pakistan.745 – 147.5 147.274 28.602.427 28.019.633.719 2.gross Provision against non performing advances Specific provision General provision General provision against consumer financing Advances .501 2.2 10.Annual Report | 2009 Rupees in ‘000 2009 2008 9.719.161) (585. ADVANCES Loans.375 9.000 thousand pledged with the State Bank of Pakistan as security against demand loan and TT / DD discounting facilities.

731 3.663.297) 2.184 7.012. 10 of 2009 dated October 20.130) 3.689.376. 17.324 995.4.040 5.538.377 (743.565 543.521.157 3.4 Advances include Rs.405 1.813. 11.605 11.706 570.490.663 17.031 1.700 – 138.784 3.7 Closing balance 10.414.324.450.038 13.824.514 – – – – – – – – – – – – 10.252 – 585.390 445.865 219.639.143) – 350.813.908 (1.684) (31.884 10.161 10.605 5.862.161 – – – – – 155. The FSV benefit recognised in these financial statements is not available for payment of page | 156 .In Pakistan 2009 Not later than one year Later than one and less than five years Not later than one year 2008 Later than one and less than five years Rupees in ‘000 Over five years Total Over five years Total Ijarah rentals receivable Residual value Minimum lease payments Profit for future periods Present value of minimum Ijarah payments 498.813.844 6.605 11.725.635.088 38.521.593.978.769 (220.779 1.822 2.041 11.652) 11.996) 12.657. The FSV benefit has resulted in reduced charge for specific provision for the year by Rs.514 – – – 320. 2009 10.4.713 6.769.490.784 3.520 658.834 – – – – – 1.852 536.926 10.289) (64.458 – – – – – 2.658.993 (36.025.813.429 343.875 4. 2009 in relation to provision for loans and advances.446) 3. thereby allowing benefit of 40% of Forced Sale Value (FSV) of pledged stocks.593.240 439.966 639. mortgaged residential.268 (743.426 1.658.605 11.141 2.564 124.248 (208.605 11.621 2.120.731 10.1 The State Bank of Pakistan has amended the Prudential Regulations vide BSD Circular No.106 thousand.658.161 573.807 435.271 1.658.088 38.5 Particulars of provision against non-performing advances 2009 Rupees in ‘000 Specific General Consumer financing -General Total Specific 2008 General Consumer financing -General Total Opening balance Charge for the year Reversal for the year Net charge / (reversal) for the year Amounts written off – note 10.451 – – – – – 73.264) 11.778 (220.630 688.630 688.565 (1.652) 10.814.926 10.417 thousand) which have been placed under nonperforming status as detailed below:: 2009 Classified Advances Category of classification Domestic Overseas Total Domestic Provision Required Overseas Rupees in ‘000 Total Domestic Provision Held Overseas Total Other Assets Especially mentioned – note 10.959 (1.215 (1.473 348.408.025.468.038 13.650 484.3 Net book Value of assets / investments in Ijarah under IFAS 2 2009 Not later than one year Later than one and less than five years Not later than one year 2008 Later than one and less than five years Rupees in ‘000 Over five years Total Over five years Total Assets acquired under Ijarah Accumulated depreciation on Ijarah Net assets / investment in Ijarah – – – 320.012.926 10.1 This represents classification made for agricultural finances.092.Askari Bank Limited | Consolidated Financial Statements Notes to the Consolidated Financial Statements For the year ended December 31.630 688.390 221.374 563.663 17.642 414.582) 2.574 281.190 65.2 Ijarah Financing .1 Substandard Doubtful Loss 73. 10.926 10.157 434.732.658.195.158 651. 2.146 (66.574 281.690 138.725.691) – 414. commercial and industrial properties (land and building only) held as collateral against non-performing advances.700 – 573.161 – – – – – – 155.263.264) 12.015 1.966 639.5.630 688.184 2.005.233 222.725.460 419.161 – 155.717.451 thousand (2008: Rs.451 – 155.493.528.

000 742.012 467.607 11. 2.720 12.553 10.157 529. 1.733 (192.7 Particulars of write-offs: 743. 500.506 402. 500.749 193.390 2009 414.642 350.927.082 41.1 Against provisions Directly charged to profit and loss account 10.904 500.604 97.264 220.012 10.000 (61.8 In terms of sub-section (3) of Section 33A of the Banking Companies Ordinance. 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 Debts due by subsidiary companies.448. associated companies etc.454 500.730) 612.012. Had the FSV benefit not recognised.5.506 – – – – – – – – .2 The general provision is maintained at the rate of 0. managed modarabas and other related parties Balance at beginning of year Loans granted during the year Repayments Balance at end of year 631.336 44. 1962 the statement in respect of written off loans or any other financial relief of Rs.871.264 – 743.658.560 585.240 1.509 196. 2009 2008 Rupees in ‘000 10.160 11. controlled firms.7.001 210.161 544.843) thousand and Rs.9 Particulars of loans and advances to directors.000 and above Write offs of below Rs.950) 402.731 2008 Rupees in ‘000 10.184 10.054 573. 500.664) 580.2 Write offs of Rs. profit before tax for the year and profit after tax for the year would have been lower by Rs.264 10.6 Particulars of provision against non-performing advances 2009 Rupees in ‘000 Specific General Consumer financing -General Total Specific 2008 General Consumer financing -General Total In local currency In foreign currencies 11.124 141.360 468.550) 631.814.041 – 350.124 251. 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 Debts due by companies or firms in which the directors of the Bank are interested as directors. Debts due by directors. 10. 10. 2009 is given at Annexure-I.904 1.192.106 (2008: 685.Annual Report | 2009 cash or stock dividend.829.593.410 page | 157 402.342.184 – 414.898 298.025.041 12.844 9.967 297 743.034.800) thousand respectively.7.652 247.5% on advances other than non-performing advances and consumer financing.000 or above allowed to a person(s) during the year ended December 31.558 (92.000 (551.169 (2008: 445.963 49 468.

237.073.641 8.088.688.436 965.2 11.096 434.095.816 137.237) – as at December 31.098.139.199 1.906 6.131 57.858.990.827 (277.Askari Bank Limited | Consolidated Financial Statements Notes to the Consolidated Financial Statements For the year ended December 31.782 11.522 65.866) (12.225 as at January 1.437 6.818 504.103 796.867.758 437.296) (4.587 256.798 COST Additions 10.605.626) (505) (14.779 414.690 1.220 962. 2008 – – 181.422 thousand (2008: Rs.403 20 (118.375 5.889 54.927 224.963 Book value as at Annual December rate of 31.686 647.457 139.525 1.2 Property and equipment 2009 as at January 1.684 1.461 46.010 7.092 279.844 401.779 34.695) (6.845 26.050 859. 206.111 – – 5 5 20 10 – 33 20 20 20 20 20 – 25 Rupees in ‘000 Land –freehold Land –leasehold Buildings on freehold land Buildings on leasehold land Renovation of leased premises Furniture.158 885.489.003 100. 11.706 509.061 (28.923 519.533 742.516) (18.562 115.515 (55.115) (296) (19.106 – – – – – – – – – 1.050 549.211) (16. 2008 depreciation 1.462) * (65.893 147.470 (65.970 570.098.199 1.485 1.512 2.211 463.414.312 2008 (59.927 82.380 1.100 14.297 (277.975 75.654 395.436 965.495.479 115.618 461.1 Capital work-in-progress Civil works Advances to suppliers and contractors – 1.782 163.791 166.985) * – as at December 31.691.098.777) 11.462 525.819 255.156 Transfers/ (deletions) – (183.963 2.861 612.072 334.802 2. 2009 1.008 738.471 160.462) * – 22.037 92.462) * – as at December 31.844 583.690) 9.512 2.582 74.047) (357) (11.156 2.1 11.948 476. OPERATING FIXED ASSETS Capital work-in-progress Property and equipment Intangible assets 11. 2009 – – 214.201 Rupees in ‘000 Land – freehold Land – leasehold Buildings on freehold land Buildings on leasehold land Renovation of leased premises Furniture.056.357 125.414.059.225 9.849 168.907) (6.485 924. fixtures and office equipment Carpets Machine and equipments Computer equipments Vehicles Other assets (70.2.310 17.083.894 (55.057 28.156 thousand over book value which was incorporated in the books of account of the Bank during 2008.802 2.298 378.345 149.168 2.776) 2.386 296.829 13.809 956.288 1. page | 158 .462 1.2.489.086.481) 2.379 Assets held under finance lease Vehicles 8.000 419.782 11.098. 2009 1.816 137.054 – 1.938) (4.278 7.935 73.262 Revaluation Surplus – – – – – – – – – – – – Transfers/ (deletions) – – – – (26.385 534.050 2. fixtures and office equipment Carpets Machine and equipments Computer equipments Vehicles Other assets as at January 1.811 1. 2009 – – 181.553 2.591.049) – as at December 31.007 653.985) * 11.193 – 1.220 1.113 378.156 308.580) (357) (31.367 610.389 2.485 924.345 149.083.098.355.036 as at January 1.772 11.055 19.654 395.262 7.517) (277.414. 176.929 201.363) (20.508 10.192 1.412 95.939 210.562 115.618 461.456 1.985) * – 5.844 700.672 5.1 Cost of fully depreciated property and equipment still in use is Rs. 2008 – – 160.844 583.675 516.462 – – – – (26.414.415.710 – 332.943 465.779 414.073.414 2.237.952) (55.159) (29. 1.010 11.758 437.158.779 529.690) 9. 2008 404.970 Book value as at Annual December rate of 31.078.844 915.677.931) (17.734 1.819 255.772 8.858.237.594 DEPRECIATION Charge for the on year (deletions) – – 21.678 118.193 thousand).772 1.162.302 5.220 962.312 – – 5 5 20 10 – 33 20 20 20 20 20 – 25 (118.345.010 1.091 7. 2009 depreciation 1.927 224.392.858.820 61.827 COST Additions 452.481) 2.515 DEPRECIATION Charge for the on year (deletions) – – 33.468 49.917.548 47.867.950 313.403 34. 2009 Rupees in ‘000 Notes 2009 2008 11.3 1.489.417 33.845 37.021 101.2 The Bank’s freehold and leasehold land was revalued by valuers approved by Pakistan Banks Association at December 31.398 3.283 19.066 8.219 18.061) – 183.401 15.414.080 332.219 18.382.101. 2008 on the basis of their professional assessment of the present market value.139.118) (2.387 – – – – (13.829 1.867 152. 2008 1.687 612.318 315.086) (2. The revaluation resulted in a net surplus of Rs.149 13.025 Revaluation Surplus 999.495 72.641 9.802 2.889 54.

065 25.505 34.876 907. OTHER ASSETS Income / mark-up accrued in local currency Income / mark-up accrued in foreign currencies Advances.967 16.908 1.813 10.021.net of provision 12.or cost of less than Rs.Contractual Ex.765 thousand (2008: Rs.Ex Executive Mr. Karachi Muhammad Aslam Brothers.531 18.Engineers and Consultants Crest Corporation.do . 250. 1.553 9.648 1.244 1.342 (459) 9.641 12.206 655 641 1.759 142. Lahore .187 547 285 432 450 509 478 552 240 640 31 150 7.122 1.136 4.Executive Askari General Insurance Company Limited – a related party -do-do-doPower Vision.690 50.505 34.700 1.556 119. Tauheed Siddiqui .997 17.000.022. Shoaib Jaffery .446.do Insurance claim -do-do-doTrade in -do-doTender Mr.010 3.996 1.883 12.Executive Mr.757 125.334 442 3.101.2.do .641 30.Executive Mr.361.201 As per Group policy -do.639 780 3.599 460.136 4. 2.685 62. deposits.101.932. Okara Unique Wood Works.131 11. Mian Shamim Ahmed . 3. advance rent and other prepayments Advance taxation (payments less provisions) Un-realized gain on forward foreign exchange contracts .3 Intangible assets Goodwill Islamabad Stock Exchange membership card 30.164 1.2 Provision against other assets Opening balance Charge for the year Reversals Amount written-off Closing balance 459 – – – 459 – 459 – – 459 page | 159 .220 Rupees in ‘000 Notes 2009 2008 11.515 969 690 634 640 2.3 Detail of disposals of operating fixed assets Particulars of assets Original Accumulated cost depreciation Book value Rupees in ‘000 Sale proceeds Mode of disposal Particulars of buyer Honda Civic Honda Civic Toyota Corolla Suzuki Cultus Suzuki Cultus Suzuki Cultus Renovation of leased premises Computer equipments Furniture and Fixtures Generator Data Card Machine Renovation of leased premises Renovation of leased premises Other assets having book value of less than Rs.1 6.179 5. Saleem Ahmad .154. Rawalpindi 58. Mansoor Akbar .816 53.770 52.209 11.176.732 49.987.945 253.681 65.Executive Mr.160 404 328 452 541 222 384 1.638 (459) 10.133 18.000/.886 thousand).380.875 53.711 13.874 – 15.2 12.697 177 89 795 3.396 76.net Suspense account Stationary and stamps in hand Dividend receivable Others Less: Provision against other assets Other assets .481 7.986 1.187 517 149 412 256 509 478 552 215 305 338 2 6.173 148.000/other than vehicles sold to Bank’s executives / related party 2009 2008 1.1 This balance has been arrived at after adjusting interest in suspense of Rs. 2009 2008 Rupees in ‘000 12.Annual Report | 2009 11.

584.689.780.5%) per annum payable on a quarterly basis.378 156.2.2.245.828 14.920.983.3 These are secured against pledge of Government Securities.401 110.5% to 12.5%) per annum and have maturities upto 3 (2008: 3) months.148 14.5% (2008: 6.514 634 15.2.143.189.785 19.954 43.785 19. Rupees in ‘000 2009 2008 15.300.non-remunerative Special exporters’ account Margin accounts Others Financial institutions Remunerative deposits Non-Remunerative deposits 47.foreign currencies Overdrawn nostro accounts .4 11. The effective mark-up rate is 6.3 14.494.2 Details of borrowings .1 14.2.300.551 1.2.300.505.653 767.163 14.653 257.local currency Secured Borrowings from the State Bank of Pakistan: Export refinance scheme Long term financing of export oriented projects Repurchase agreement borrowings (repo) Unsecured Call borrowings Outside Pakistan .4 These represent borrowings at mark-up rates ranging from 11.853. BORROWINGS In Pakistan Outside Pakistan 19. 14.514 634 15.658 4.785 19.163 15.000 19.388 8.903 39.822 21.378 156.189. BILLS PAYABLE In Pakistan 2.514 634 15.597 268. 2009 Rupees in ‘000 Notes 2009 2008 13.945.058 4.190. DEPOSITS AND OTHER ACCOUNTS Customers Fixed deposits Saving deposits Current accounts .047.2 14.190.02% (2008: 9.2 These carry mark-up rate of 5% (2008: 5%) per annum payable on a quarterly basis.5% to 12.378 156.312 page | 160 .2.417 205.1 Particulars of borrowings with respect to currencies In local currency In foreign currencies 19.167 970.099 2.202 44.063 1.364 167.245.65% to 12.6% (2008: 14.593 30.5% to 15. and carry mark-up ranging from 11.473.189.335.562 1.090.143.912.811.143.148 15.153 1.2.25%) per annum and have maturities upto 3 (2008: 1) months.256.670 2.2.000 15.148 14. 14.163 12.190.1 This facility is secured against demand promissory note executed in favour of the State Bank of Pakistan. 14.Askari Bank Limited | Consolidated Financial Statements Notes to the Consolidated Financial Statements For the year ended December 31.675.699 80.743 1.310 520.secured / unsecured In Pakistan .unsecured 14.

732) thousand due to related parties.498.1 Particulars of deposits In local currency In foreign currencies 174. 6.912.443 167.497.I Outstanding amount Rupees in thousand Issue date Total issue Rating Listing Rate 1. The salient features of the issue are as follows:: Term Finance Certificate .903 141.II 1.5% (after 5 years: 2.1. 10 Years Exerciseable after 60 months from the date of issue subject to approval by the SBP.3% 96th month: 99.791. SUB-ORDINATED LOANS Term Finance Certificates – I Term Finance Certificates – II Term Finance Certificates – III 1.996.500 million AA– Lahore Stock Exchange (Guarantee) Limited Payable six monthly .200 – 2.7% page | 161 .1 Deposits include Rs.5% Base Rate is the simple average of the ask rate of six month KIBOR prevailing on the base rate setting date.300 1.III 3.497.900 1. 8 Years – Term Finance Certificate .220. 2005 Rupees 1.600 October 31.497.312 15.3% 96th month: 99.000.95%) Base Rate is the simple average of the ask rate of six month KIBOR prevailing on the base rate setting date.7% 6-90th month: 0. 6-96th month: 0.692.505.900 1.000 million AA– Lahore Stock Exchange (Guarantee) Limited Payable six monthly .713.409.32% 97-120th month: 99.497.Base Rate plus 1.Annual Report | 2009 Rupees in ‘000 2009 2008 15.5% Base Rate is the simple average of the ask rate of six month KIBOR prevailing on the base rate setting date.000 5.497.300 February 4.869 25.68% Redemption 6-90th month: 0.273 31.100 The Bank has raised unsecured sub-ordinated loans in three separate Term Finance Certificates issued to improve the Bank’s capital adequacy.041 (2008: Rs.000.994. 2005 Rupees 1.000 November 18.648.Base Rate plus 1.630 205. 2009 Rupees 3.Base Rate plus 2. Repayment Call option 8 Years – Term Finance Certificate .600 3. Rupees in ‘000 2009 2008 16. 1.500 million AA– Lahore Stock Exchange (Guarantee) Limited Payable six monthly .

468 2.878) 333. 1. cost of intangibles claimed in prior years Rs.797 361. 105 thousand (2008: Rs.850 2.692 16. DEFERRED TAX LIABILITIES Deferred credits/ (debits) arising due to: Accelerated tax depreciation Provision against non performing advances – excess of 1% of total advances – classified in sub–standard category Tax loss for the year Excess of accounting book value of leased assets over leased liabilities Pre commencement expenditure of AIML Provision for staff gratuity and compensated absences of AIML Unused tax loss of AIML Deferred tax asset not recognised by AIML 18.021) (21.480 thousand) and accelerated tax depreciation amounting to Rs.394) 941 (559) – – – 512.212 (275.204 1. six month average KIBOR plus 2. Car finance facilities availed from Faysal Bank Limited carry mark-up at one year average KIBOR plus 2%.384 14.126) 9.627 10. provision for doubtful debts amounting to Rs.1 Deficit on revaluation of available for sale securities 661. 67.Askari Bank Limited | Consolidated Financial Statements Notes to the Consolidated Financial Statements For the year ended December 31.173 18.2 page | 162 .5%. 4.484 thousand (2008: Rs. 66. one year average KIBOR plus 3% and one year average KIBOR plus 4% per annum with no floor and no cap.215 thousand (2008: Rs. 1.294) 16.467 (496. provision for gratuity amounting to Rs. 9.505 thousand) and liability against asset subject to finance lease amounting to Rs.978 thousand (2008: Rs.5%.479 – – (164.803 (27. 18. Rupees in ‘000 Note 2009 2008 18.543 4. 205 thousand) since future profitability of ASL is not certain to realise net deferred tax asset.264 2. 24.277 2.120 11. 2009 17.573 The liabilities represent the obligations for car lease financing from Bank Alfalah Limited and Faysal Bank Limited. LIABILITIES AGAINST ASSETS SUBJECT TO FINANCE LEASE 2009 Minimum lease payments Financial charges for future periods Principal outstandings Minimum lease payments 2008 Financial charges for future periods Principal outstandings Rupees in ‘000 Not later than one year Later than one year and not later than five years 3.5% and six month average KIBOR plus 3% with a floor of 13. The rates of mark-up payable on facilities with Bank Alfalah Limited are six month average KIBOR plus 2.5 % with floor of 11.724).75% with a floor of 12.797 thousand (2008: Nil) has not been recognised in these consolidated financial statements. 190 thousand).995 16.423 9.114 3. 2. 4. 46.855 21.063 thousand (2008: Rs.407 thousand).163 5.011 1.505 thousand (2008: Rs.925 676.812) – 498 (186) (559) (12. six month average KIBOR plus 3% with a floor of 12.1 Deferred tax asset of AIML has been recognised only to the extent that it is expected to reverse in the foreseeable future due to availability of tax losses.881 13.5 %. Accordingly. Deferred tax asset (net) related to ASL has not been recognised on the unused tax losses amounting to Rs. deferred tax asset amounting to Rs. The Company has the option to purchase the assets at the end of the lease tenure at the guaranteed residual value.

500. subscribed and paid up Number of shares 67. the Bank is required to enhance its existing paid up capital to Rs. The stock dividend declared after meeting all the legal and regulatory requirements.000 3.844 75.000.000 4.net Workers’ Welfare Fund Others (Withholding tax payable etc.559.202 990.635 507.398.467 5. 2011 By December 31. 2013 Rs 6 billion Rs 7 billion Rs 8 billion Rs 9 billion Rs 10 billion The required minimum capital requirement can be achieved by the Bank either by fresh capital injection or retention of profits. in this year.215 37.682 598.877 577.346.920 92.2 700.073.000 439.385 – 33. 20.935 7.698.774 4. 10 billion (net of losses) to be achieved in phased manner as follows: Minimum paid up capital (net of losses) By December 31.258 – 354.000 Issued. return capital to shareholders.935 27.000 20. 2010 By December 31.846.000. issue new shares or sell assets to reduce debt. page | 163 .877. In terms of BSD circular No.150 4. 10 each Ordinary shares of Rs. OTHER LIABILITIES Mark–up / return / interest payable in local currency Mark–up / return / interest payable in foreign currencies Unearned income / commission Accrued expenses Advance payments Security deposit Ijarah financing Unclaimed dividends Branch adjustment account Payable against purchase of listed shares Withholding taxes payable Federal excise duty payable Un-realized loss on forward foreign exchange contracts . In order to maintain or adjust the capital structure.779. 7 of 2009 issued by the State Bank of Pakistan.027 1. 2009 By December 31.500.001 3.463 1.200.000 Ordinary shares of Rs.858 409.652 223.) 1.209 203.515 525.053 4.774 Capital Risk Management The company’s objectives when managing capital are to safeguard the company’s ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital.000 7.000 338. and duly disclosed in the annual audited financial statements will be counted towards the required paid up capital of the Bank pending completion of the formalities for issuance of bonus shares.Annual Report | 2009 Rupees in ‘000 2009 2008 19.448 20.377.3 67.000.960 165.308 675.1 SHARE CAPITAL Authorized capital 2009 Number of shares 2008 1.943 26.848 347.308 405. 2012 By December 31.122 53.635 20.965 38.383. the Bank may adjust the amount of dividend paid to shareholders.216 27. 10 each: Fully Paid in cash Issued as bonus shares 12.058.389 119.000.866. The Bank intends to meet this requirement by way of bonus issue subsequent to balance sheet date.750 194.253.467 675.

227 559. favouring: i) ii) iii) Government Banks and other financial institutions Others 56.933 68.912.014.930. 2009 2008 Rupees in ‘000 22. which are being contested in the Courts of law.163 7.409.688) 936.014.4 Trade-related contingent liabilities Other contingencies These represent certain claims by third parties against the Bank. 2009 include Rs.693) 7. Reserves to that extent are not available for payment of cash or stock dividend in terms of above referred circular.417.911.566 12.270 4. 2009 Rupees in ‘000 Statutory Reserve Revenue Reserves 2009 2008 21. RESERVES Balance as at January 01 Transfer from profit and loss account Bonus shares issued Balance as at December 31 2.225 (1.333.798 thousand) in respect of net of tax benefit of 40% (2008: 30%) of Forced Sale Value (FSV) of pledged stocks.755. 2.982) 496.156 (242.241.354 7.806.1 above. 23. SURPLUS ON REVALUATION OF ASSETS Surplus on revaluation of land (Deficit) / surplus on revaluation of available for sale securities i) ii) iii) Federal Government securities Listed shares Other securities 1. subsidiaries and associated undertakings.414. 25.776.Askari Bank Limited | Consolidated Financial Statements Notes to the Consolidated Financial Statements For the year ended December 31.5.249) (97.468 Less: related deferred tax effect 23.862.100.2 Transaction-related contingent liabilities Money for which the Bank is contingently liable: a) Contingent liability in respect of guarantees given on behalf of directors or officers or any of them (severally or jointly) with any other person.718 10.878 (51.772) 1.363 4.010) 89.134.077.410.399.856 75. Contingent liability in respect of guarantees given.086 6.711 221.617.693) 4.637 23.516 338.404.858.689.883.784 (1.933) (1.545 b) 23.689.083.852 (81.318 6.962 – 7.832.721 3.215.102 3.858.855 12.234.412.294 (921.474 11.864 942.492) (79.559 – 3.650) 27. 2009 and referred in note 10.265 758.331 1. mortgaged commercial.134.156 (88.580.064 page | 164 .227 21.287 61.831 31.958 thousand (2008: Rs.407. industrial properties (land and building only) held as collateral against non-performing advances allowed under BSD circular No 10 of 2009 dated October 20.048 7.1 Reserves as at December 31.577.016 9.286 75.384 1.884 68. The management is of the view that these relate to the normal course of business and are not likely to result in any liability against the Bank. 445.800) (1.1 CONTINGENCIES AND COMMITMENTS Direct credit substitutes i) ii) Government Others 2.3 23.

6 Commitments in respect of forward lending Commitments against “REPO” transactions Purchase and resale agreements Sale and repurchase agreements 3.607 17.354. these will give rise to a deferred tax debit being a timing difference in nature.626.332. 2009 2008 Rupees in ‘000 23.702 2.038 3.270 280.Annual Report | 2009 23.908 10.646.257 10. For Tax year 2008 and 2009 the appeals are pending before ITAT and the Commissioner Income Tax (CIT) (Appeals) respectively. page | 165 . Such issues however have been decided in the Bank’s favour by the CIT (Appeals) for the Tax Year 2008 except on the issue of allocation of financial expenses.10 Commitments to extend credit The Bank makes commitments to extend credit in the normal course of its business but these being revocable commitments do not attract any significant penalty or expense if the facility is unilaterally withdrawn except for Rs 2.493. tax demands of approximately Rs. Based on advice from tax advisors.126 15.8 Commitments in respect of forward exchange contracts Purchase Sale 23. 3.571. The Bank has filed appeals against the orders before the ITAT in respect of Tax years 2005 to 2008.025 16. raising tax demand of Rs.911 Bills for collection represent bills drawn in favour of various financial institutions in Pakistan and abroad on behalf of Bank’s customers. raised by the tax authorities.763 – 153. the management is hopeful that the issues in appeals will be ultimately decided in the Bank’s favour.7 Commitments in respect of forward purchase / sale of listed equity securities Purchase Sale – – 24. 53 million. if any.650 thousand (2008: Rs. The Income Tax Appellate Tribunal (ITAT) upto Tax Year 2006 has decided appeals in favour of the Bank on the issue of provisions against NPLs.022. should these contingencies materialize at a later stage.340 million and Rs.391 23.886 12. 582 million approximately.11 Bills for collection Payable in Pakistan Payable outside Pakistan 5.130 16. as the Bank will not be required to pay tax on future realization.5 Tax contingencies i) For tax assessments carried out to date.9 Commitments for the acquisition of operating fixed assets 23. Notwithstanding the above.300.319.922.300.611 462. ii) The department issued re-amended assessment orders for tax years 2005 to 2008 on the issue of taxing commission and brokerage income at normal tax rate instead of under the presumptive tax regime and allocation of expenditure to dividend / capital gains.673. relate to provision against Non Performing Loans (NPLs) and diminution in the value of investments respectively are under litigation. 1. Rupees in ‘000 2009 2008 23.722.550 thousand). These are accepted by the Bank as an agent and the Bank does not carry any credit risk in respect of these bills.440 23. the management is hopeful that the High Court will uphold the decisions of Appellate Authorities.940 795. The income tax department has filed reference applications before the High Court on the above issues which has not yet been admitted for regular hearing.552.722. of these receivables. Based on advice from tax consultants.616 4. while tax demand for provision for diminution in value of investment has been set aside for all relevant years.

557.1 This includes an amount of Rs.076 343. In addition. 2009 24.1 This includes an amount of Rs.194 4.191 29.114 4.481 1.918 3.120 76.336 (856) 47. 162. on behalf of customers in imports and exports transactions.736 3. page | 166 .092 362.647.984 998.506 355. The Bank also enters into repo transactions against Government Securities carrying fixed interest rates and having fixed contractual maturities.877 730.414 thousand) on account of income received from related parties. these also come under the State Bank of Pakistan’s net open position limits.524.Listed Others 62.742 26.714 22. DERIVATIVE INSTRUMENTS The Group does not deal in derivative instruments.423 453.435 29.841 70. forward sales and forward purchases on behalf of customers in the inter-bank money market and with the State Bank of Pakistan.514 559.277 28. Note 2009 2008 Rupees in ‘000 27.012 (3.301 487. 19.717 266 1.855 304. MARK-UP / RETURN / INTEREST EARNED On loans and advances to: i) Customers ii) Financial institutions On investments i) Available for sale securities ii) Held to maturity securities On deposits with financial institutions On securities purchased under resale agreements 26.824 30. The credit risk associated with repo transactions is secured through underlying Government Securities.840.989) 11. MARK-UP / RETURN / INTEREST EXPENSED On deposits On securities sold under repurchase agreements On sub-ordinated loans On other short term borrowings 11.395.796 409.763 28. GAIN ON SALE OF INVESTMENTS .015 21.177 14.785 1.Askari Bank Limited | Consolidated Financial Statements Notes to the Consolidated Financial Statements For the year ended December 31.091 12. These include forwards and swaps in money and foreign exchange markets.1 32.717 468. The Bank’s exposure in these instruments represents forward foreign exchange contracts.148. 25.045 143.692 501. 25.393 383.389 thousand (2008: Rs.NET Federal Government Securities Market Treasury Bills Pakistan Investment Bonds Term Finance Certificates Shares .038 13.1 16.704 42.476 471. 23. Rupees in ‘000 Note 2009 2008 26.665. The risks associated with forward exchange contracts are managed by matching the maturities and fixing counter parties’ intra-day and overnight limits.228 8.719 thousand (2008: Rs.857 12.349 18. OFF BALANCE SHEET FINANCIAL INSTRUMENTS Off balance sheet financial instruments referred to as derivatives are contracts the characteristics of which are derived from those of underlying assets.248 13.650.027 158.222 10.966 thousand) on account of rent received from related parties.873.617.008. OTHER INCOME Rent on property Net profit / (loss) on sale of property and equipment Rent of lockers Recovery of expenses from customers Others 29.

045 165.1 Relationship between tax expense and accounting profit Profit before taxation Tax at applicable tax rate of 35 percent (2008: 35 percent) Effect of: – Income chargeable to tax at lower rates – Prior years’ adjustment – Amounts not deductible for tax purposes – Opening deferred tax reversed by AIML – Deferred tax not recognised during July to December by AIML – Others 1.846 – – 3.374 38.837) 530. insurance.020.Annual Report | 2009 Rupees in ‘000 Notes 2009 2008 30.897 563.280 138.587 74.035.200 70 2.747 119.634) – 298 125 8.588. audit of subsidiary companies and the audit of consolidated financial statements Out-of-pocket expenses 2. allowances.726 110.882 655 834.1 Auditors’ remuneration Audit fee Fee for the audit of provident and gratuity funds Special certifications. allowances and other expenses Rent.089 171.043) – (51.747 29.987 10. vehicle running expenses.609.974 302. Legal and professional charges Brokerage and commission Communications Repairs and maintenance Stationery and printing Advertisement and publicity Donations Auditors’ remuneration Depreciation Finance charges on leased assets Other expenditure (traveling.208 755 673. OTHER CHARGES Workers’ Welfare Fund Penalties imposed by the State Bank of Pakistan 33.3 3.987 30.368 32.747 page | 167 .000 8.715 32.060 138. security services. Charge for defined benefit plan Contribution to defined contribution plan Non-executive directors’ fees.800 2.289 7.993 (1.332) (50.000) 3.231 87.2 30. etc.989 154.310 1.098 6.184 1.854 101.124 18.515 853 34.500 80 5.827 (119.693 3.584 (30. etc.972 590 5. taxes.335 31. electricity.832 519. half year review.832 – 10.171 584 8.) 36.715 502.102 138.096 299. etc.403 706.732 762. ADMINISTRATIVE EXPENSES Salaries.363 261.087 105.770 175.667 – 5.335 657.827) – 530.124.043) 87.499) 530.260 107.365 117.970 (45.698 109.828 75. TAXATION For the year Current Deferred For prior years Current Deferred 561.1 11.758 (51.464 (40.

895.260 48. 36.251) 4. 2009 2008 36.462) 222.697) 2.446 81. The benefits under the gratuity scheme are payable on retirement at the age of 60 years or earlier cessation of service in lump sum.632 75.666 3. CASH AND CASH EQUIVALENTS Cash and balances with treasury banks Balances with other banks Call money lendings Term deposits with MCB Bank Limited 19.635 2.374.490 16. STAFF STRENGTH Permanent Temporary / on contractual basis Daily wagers Commission based Group’s own staff strength at the end of the year Outsourced Total staff strength at the end of the year 4.Rupees There is no dilutive effect on the basic earnings per share of the Group.470 507.346. The benefit is equal to one month’s last drawn basic salary for each year of eligible service or part thereof.672.361 4.964) 16.329 (211.1 DEFINED BENEFIT PLAN General description The Bank operates an approved funded gratuity scheme for all its regular employees.077.482 Number of employees 35.385.250 1. Contributions are made in accordance with the actuarial recommendation.4 Actual return on plan assets page | 168 .816 675.885) 214.554 1.564 36.Askari Bank Limited | Consolidated Financial Statements Notes to the Consolidated Financial Statements For the year ended December 31.000 35.640 100.numbers Basic / diluted earnings per share .998 507.Rupees in ‘000 Weighted average number of Ordinary Shares .12 415.111 7.638 542.423 44.990 (218.967. 2009 Rupees in ‘000 2009 2008 33.064 7.669 – 120 6.261 (49.854 6.165) 19. 1.718 138.000 27. BASIC / DILUTED EARNINGS PER SHARE Profit for the year . Weighted average number of ordinary shares for 2008 has been restated to give effect of bonus shares issued during the year.214 (327.281 110.635 0.3 The amounts recognised in profit and loss account are as follows: Current service cost Interest on obligation Expected return on plan assets Actuarial loss recognised 36.850 8.2 The amounts recognised in the balance sheet are as follows: Present value of defined benefit obligation Fair value of plan assets Unrecognised actuarial losses Net liability 705.306 1.461 1.618 36.000 – 20.029.707 – 541 6.346.452 (482.739 86.82 Rupees in ‘000 2009 2008 34.114 (24.

230 (7.423 44.153 (30.140) (6.per annum Expected rate of return on plan assets .047 415 165.376 75.214) 482. 2009 using “Projected Unit Credit Method”. Defined benefit obligation Plan assets Deficit Experience adjustments Actuarial loss on obligation Actuarial loss on plan assets 705. The main assumptions used for actuarial valuation are as follows: 2009 2008 Discount rate .462) 222.462 249.323) 327.462 – 66 – 34 100 57.773 thousand to its defined benefit gratuity plan in 2010.992) (3.745) 266.per annum Expected rate of increase in salaries .745 (30.323) 542.116 (27. for returns over the entire life of the related obligation.745) (527) 542.523) (489) 199.807) 109.258 327.019) 191.214 (327.885) 214.885 The Group expects to contribute Rs.13 15% 15% 15% 9 . at the beginning of the period.452 153.931) 53.5 Changes in the present value of defined benefit obligation Opening defined benefit obligation Current service cost Interest cost Actuarial loss Benefits paid Closing defined benefit obligation 542.6 Changes in fair value of plan assets Opening fair value of plan assets Expected return Actuarial losses Contributions by employer Benefits paid Closing fair value of plan assets 327.114 9.14% 8 .707) page | 169 .214) 705.214 86. 2009 Rupees ‘000 Percentage Rupees ‘000 2008 Percentage 36.214 36.035 24. The expected return on plan assets is based on the market expectations and depend upon the asset portfolio of the Group.990 (25.624 (27.261 25.446 81.357 (133.8 Principal actuarial assumptions The actuarial valuation was carried out for the year ended December 31.Annual Report | 2009 Rupees in ‘000 2009 2008 36.14% 13 .per annum Average expected remaining life of employees .624) (27.807) 440.864 (27.165 (527) 136.885 49.281) 17.452 440.885 18 47 – 35 100 36. 148.452 (482.242 (35.329 (9.808 367 116.14 Rupees in ‘000 2006 2005 As at December 31.511 (182.14% 13 .years 36.9 Amounts for current and previous four annual periods are as follows: 2009 2008 2007 13 .173 (212.7 Break-up of category of assets Defense saving certificates Pakistan Investment Bonds Investment in mutual fund Bank deposit account – 317.376 (249.000 482.

days 39.314 8.065 2.943 488 Executives mean employees.2 Principal actuarial assumptions The actuarial valuation was carried out for the year ended December 31.442 thousand against related liability of Rs.319 47.075 37. COMPENSATION OF DIRECTORS AND EXECUTIVES President / Chief Executive Rupees in ‘000 2009 2008 2009 Directors 2008 13% 13% 5 15% 15% 5 Executives 2009 2008 Fees Managerial remuneration Charge for defined benefit plan Contribution to defined contribution plan Rent and house maintenance Utilities Medical Special performance incentive / Bonus Others Number of persons 105 9. Provisions are made in accordance with the actuarial recommendation. DEFINED CONTRIBUTION PLAN The Bank operates a recognised provident fund scheme for all its regular employees for which equal monthly contributions are made both by the Bank and by the employees to the fund at the rate of 8.per annum Expected rate of increase in salaries . 38.871 (2008: 79.per annum Leave accumulation factor . These are encashable on the basis of last drawn gross salary.752 39. Present value of obligation as at December 31. Under this unfunded scheme.540 – 19. 2009 37. Chief Executive is also provided with Bank maintained car.118 203.000 7.390 1.855 960.240 770 770 4. Expense for the year of Rs. 115.750 – 20.144 68.692 42.33% of basic salary of the employee.950 196. AIML operates a funded staff provident fund scheme as a defined contribution plan for all eligible employees. 2008. 38.371 75. ASL operates an unfunded provident fund scheme for all its regular employees for which equal monthly contributions are made by the Company and the employees at the rate of 10% of basic salary of the employee.1 COMPENSATED ABSENCES General description The Bank grants compensated absences to all its regular employees as per effective Service Rules.675) thousand has been included under administrative expenses. Equal monthly contributions are made by the Company and the staff at the rate of 6% of basic salary of the employee.630 1. page | 170 . Unutilized privilege leave are accumulated upto a maximum of 120 days which could be encashed at any time of retirement or can also be encashed during service.571 thousand carried at December 31. 2009 using “Projected Unit Credit Method”.700 600 600 1. 2009 was Rs. 38.Askari Bank Limited | Consolidated Financial Statements Notes to the Consolidated Financial Statements For the year ended December 31. whose basic salary exceeds five hundred thousand rupees in a financial year.158 924 1.141 55.073 495 615 451. The main assumptions used for actuarial valuation are as follows: 2009 2008 Discount rate .215 2 655 – – – – – – – – 655 10 755 – – – – – – – – 755 10 – 478. regular employees are entitled to 30 days privilege leave for each completed year of service.886 8.137 1 110 6. 33.312 94.935 45. 149.189 935. other than the chief executive and directors.348 42.

955 5.996.388.4.543 4.323.246 2.163 158.463 239.640 4.689.829.246 2.642 16.637 3. The maturity profile and effective rates are stated in note 45.866.607 4.385.409 16.922.584.327.699 2.573 4.637 3.900 11.032 10.972 35.573 4.464.866.032 10.401 5.300.502 47.702 17.914 78.552.436. staff loans. held to maturity securities and National Prize Bonds.300.994.448 193.850 8.885.782.401 5.333 2.159.754 35.816 4.2.163 158.605 89.031.101.972 35.448 193.922.828 15.391 10.190.617 51.479.642 19.640 4.552. Fair value of remaining financial assets and liabilities except fixed term loans.616 24.1 On-balance sheet financial instruments Assets Cash and balances with treasury banks Balances with other banks Lendings to financial institutions Investments Advances Term loans Staff advances Other advances Other assets Liabilities Bills payable Borrowings Deposits and other accounts Current and saving accounts Term deposits Sub-ordinated loans Liabilities against assets subject to finance lease Other liabilities 19.666 3.646.779.100 16.463 239.779.000 9.100 16.833.479.945.607 4.675.829.021.257 795.955 5.994. non-performing advances and fixed term deposits cannot be calculated with sufficient reliability due to absence of current and active market for such assets and reliable data regarding market rates for similar instruments.2 Off-balance sheet financial instruments Forward purchase of foreign exchange Sale and repurchase agreements Forward sale of foreign exchange Purchase and resale agreements 24.543 4.816 4.616 15.967. FAIR VALUE OF FINANCIAL INSTRUMENTS 2009 2008 Fair value Book value Fair value Rupees in ‘000 Book value 40.464.883 197.059 66.323.754 35.885.179 244.702 17.179 244.967.059 66.148 127.584. staff loans.385.722.649.223.374.940 15.782.101.611 3.072.940 The fair value of investments is based on quoted market prices and rates quoted at Reuters Pages (PKRV) with the exception of unlisted securities.996.833.914 78.029.270 2.646.257 795.605 89.148 127.900 11.613 39.883 197.722. non-performing advances and fixed term deposits is not significantly different from the carrying amounts since assets and liabilities are either short term in nature or in the case of customer loans and deposits are frequently repriced. The provision for non-performing advances has been calculated in accordance with the Bank’s accounting policy as stated in note 5.689.825.391 10.159.072.493.021.000 9.670 19.374.571.828 15.Annual Report | 2009 40.327. page | 171 .436.571.825. Fair value of fixed term loans.190.223.611 3.649.319.388.409 40.493.333 2.270 2.850 8.945.613 39.031.4.699 2.029.666 3.319.670 19.502 47.617 51.675.

21% Assumptions used: – – – Administrative expenses have been allocated to segments based on respective segment income.00% 0.01% 2008 12.00% 67.473.785 (383.984) – – – 6.274 – – 2.829 6.833 734.660 96.780 1.854 19.129 2.697 0.01% 0.328 37.01% 17.285.286) 125.256 22.105 – – 28.413 (48.382 122.549) 248.186 – – 11.963 2.681 17.486 – – 75 0.754 15.26% 85.752 217.03% 2.34% 21.641.819 0.060.862.668.160 0.01% 0.07% 8.759 30.52% 10.939 – – 7.129.242 3.299 61.016.142.84%) of the total assets have been allocated to segments based on their respective incomes.10% 0.976 160.433 10.903.564 0.092 83.280 2.02% 222.515 13.152 93.254 224.553 18.356 0.404 30.963.04% 0.413 8.62% 19.424 1.705 – – 792 0.132.185 23.671 36.284. page | 172 .717 0.668 232.863.129.403 9.130 (1.30% (2008: 1.00% 0.124.485 0.74% 0.499 1.099 1.084.736 61.843 199.44%) of the total liabilities have been allocated to segments based on their respective assets.164 189.263.386 3.127 115. 2009 41.597 – – 21.00% 10.168.415.09% 0.06% 0. Unallocatable assets representing 5.00% 0.136 23.917 15.26% Total income Total expenses Net income (loss) Segment Assets (Gross) Segment Non Performing Loans Segment Provision Required Segment Liabilities Segment Return on net Assets (ROA) (%) Segment Cost of funds (%) 54.700 – – 5.Askari Bank Limited | Consolidated Financial Statements Notes to the Consolidated Financial Statements For the year ended December 31.423 4.630 42.011 355.006 9.554 0.01% – 383.108 – – 520 0.418 318.219 9.567 188.709 4.25% 0.01% 134.400 45.00% – 559.095 1.443.367) 103. SEGMENT DETAILS WITH RESPECT TO BUSINESS ACTIVITIES The segment analysis with respect to business activity is as follows: 2009 Rupees in ‘000 Corporate Finance Trading and Sales Retail Banking Commercial Banking Payment and Settlement Agency Services Assets Management Retail Brokerage Sub-Ordinated Loans Total income Total expenses Net income (loss) Segment Assets (Gross) Segment Non Performing Loans Segment Provision Required Segment Liabilities Segment Return on net Assets (ROA) (%) Segment Cost of funds (%) 129.350 39.049.05% (2008: 5.02% 1.860.519 68.763 10.944 11.918 9.091 0.979 0.01% 6.680 0.00% 165.323 232.322 10.785) – – – 3.02% 0.00% 0.984 (559.742 – – 17.03% 0.699.50% 41.07% 0. Unallocatable liabilities representing 1.03% 0.444 – – 797 0.826.805 (239.045 – – 22.

619 – 12.671 5.918 – – – – – – – – – – – – – – – – page | 173 .899 – – – – – – – – – – – 105 Directors 25 11.137 51.875 – – – – – – – – – – – – – 4.910 249.596 12.337 – 11.248.947 – – – – – – – – – – – – – – – 49.855 170 789 1.000 242 – December 31.974 – – – – – – – – – – – 110 Directors 524 59.100 818 – – – – 23.550 – – 1.886 23.815 – 7.326 23.028 562 321 – 158.268 493 4.100 416 1.100 – 130.220 – – – 155. 2009 Companies with common directorship having equity under 20% 580.842 – 1.455 7.602.500.816 – – – – – – – – – – – – – – – – 755 Employees Funds – 164.644 – – – – – – – – – – – – – – 2. the Bank has related party relationships with its subsidiary companies.242 583.420 – – – – – – – – – – – – – – – 581 – – – – – – – – – – – – – – – – 655 Employee Funds – 163.809 73.088 212 – – – 127.029 – 12. therefore. its directors.886 97. Also. 2008 Companies with common directorship having equity under 20% 631.177 96 1.722 12.662 67.356 33.595 1.545 1.354 1.000 110 – Rupees in ‘000 Balances outstanding as at – Advances at the year end – Deposits at the year end – Outstanding commitments and contingent liabilities for irrevocable commitments and contingencies – Investment in shares / Lendings .678 – – – – – – – – – – – – – – 3.904 609.100 1.125 – – 3.873 47.653 – 992 217.392 – 680 2. all subsidiaries and associated undertakings of AWT are related parties of the Bank.794 59.958 – – – – – – 379 – – – – – – – Key management Personnel 129. commission and brokerage income – Recovery of expenses from Askari Income Fund by AIML – Recovery of expenses from Askari Islamic Asset Allocation Fund by AIML – Recovery of expenses from Askari Islamic Income Fund by AIML – Recovery of expenses from Askari Sovereign Cash Fund by AIML – Investment in units of Askari Income Fund by AIML – Lease rentals paid – Fees paid Parent – 5.502 57. entities over which the directors are able to exercise significant influence and employees’ funds.540 5.668 153.557 – – – – – – 296 – – – – – – – Key management Personnel 74.378 34.196 282 2.565 5.040 1.Annual Report | 2009 42.080 72.623 – – – – – – – – – – – – 376 2.173 778 50.17 %) of the Bank’s share capital at the year end. Details of transactions with related parties and balances with them at the year end were as follows: December 31.273 258 1.278 3.434 11.993 – – – – – – – – – – – – – – – – Parent – 780.855 81. key management personnel. RELATED PARTY TRANSACTIONS As Army Welfare Trust (AWT) holds 50.388 – 143.17 % (2008: 50.at cost – Reimbursable expenses on behalf of Askari Income Fund – Management fee and commission receivable from Askari Income Fund – Reimbursable expenses on behalf of Askari Asset Allocation Fund – Management fee and commission receivable from Askari Asset Allocation Fund – Reimbursable expenses on behalf of Askari Islamic Income Fund – Management fee and commission receivable from Askari Islamic Income Fund – Reimbursable expenses on behalf of Askari Islamic Asset Allocation Fund – Management fee and commission receivable from Askari Islamic Asset Allocation Fund – Reimbursable expenses on behalf of Askari Sovereign Cash Fund – Management fee and commission receivable from Askari Sovereign Cash Fund – Pre–paid insurance premium by AIML – Payable to employee funds by AIML Transactions during the year ended – Net mark–up / interest earned – Net mark–up / interest expensed – Contribution to employees’ funds – Rent of property / service charges received – Rent of property / service charges paid – Remuneration paid – Post employment benefits – Insurance claim received – Insurance premium paid – Dividend Income – Security services costs – Fee.063 – – – – – – – – – – – – – – – 2.346 – – – – – – – – – – – – – – – 309.

or any other financial entities nor does it has any majority or significant minority equity holding in an insurance excludes it from a need for further consolidation.25 % of total risk weighted assets). creditor and market confidence and to sustain future development of the business. the Bank does not indulge in any securitization activity that shields it from the risk inherent in securitization. AIML is the wholly-owned subsidiary of Askari Bank Limited while ASL is 74% owned by the Bank. general provisions for loan losses (up to a maximum of 1. foreign exchange translation reserves etc. Askari Investment Management Limited (AIML) and Askari Securities Limited (ASL). so that it could continue to provide adequate returns to shareholders by pricing products and services commensurately with the level of risk. It is the policy of the Bank to maintain a strong capital base so as to maintain investor. Furthermore. market risk and operational risk. The total of Tier II and Tier III capital has to be limited to Tier I capital.2 Capital Management The objective of managing capital is to safeguard the Bank’s ability to continue as a going concern. The Bank has two subsidiaries. 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 Maintain strong ratings and to protect the Bank against unexpected events Availability of adequate capital at a reasonable cost so as to enable the Bank to operate adequately and provide reasonable value added for the shareholders and other stakeholders Bank’s regulatory capital analysed into three tiers Tier I capital. Goals of managing capital The goals of managing capital of the Bank are as follows: – – – To be an appropriately capitalised institution. 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. securities. 50% of other deductions noted above are also made from Tier II capital. which consists of short term subordinated debt solely for the purpose of meeting a proportion of the capital requirements for market risks. Tier III supplementary capital. 43. The fact that Askari Bank has neither any significant minority investments in banking.. majority and significant minority investments in insurance and other financial entities. 2009 43 43. The total risk-weighted exposures comprise the credit risk. page | 174 . includes subordinated debt subject to a maximum of 50% of total Tier I capital and fulfillment of specified criteria laid down by the State Bank of Pakistan. 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. Both these entities are included while calculating Capital Adequacy for the Bank using full consolidation method. 50% of other deductions e.Askari Bank Limited | Consolidated Financial Statements Notes to the Consolidated Financial Statements For the year ended December 31. 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).g. The bank currently does not have any Tier III capital. Tier II capital. reserves (excluding foreign exchange translation reserves) and unappropriated profits (net of losses) etc.1 CAPITAL ADEQUACY Scope of Applications Standardized Approach is used for calculating the Capital Adequacy for Market and Credit risk while Basic Indicator Approach (BIA) is used for Operational Risk Capital Adequacy purpose. share premium.

The calculation of Capital Adequacy enables the Bank to assess the long-term soundness. are applied using the assessments by various External Credit Assessment Institutions (ECAIs) and aligned with appropriate risk buckets. 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.532.641) – – 13.111 (34.146. 2009 The capital to risk weighted assets ratio.689) – 11.25% 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 4. Rupees in ‘000 2009 2008 Regulatory capital base Tier I capital Fully paid-up capital Reserves (excluding foreign exchange translation reserves) Unappropriated / unremitted profits (net of losses) Minority Interest Less: Book value of intangibles Deficit on account of revaluation of investments 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 I capital) General provisions for loan losses subject to 1. where available.683 800. In addition. There has been no material change in the Bank’s management of capital during the period.846 4.796. the exposures are treated as unrated and relevant risk weights applied. bank guarantees and other debt securities that fall within the definition of eligible collaterals and also fulfill other specified criteria under the relevant capital adequacy guidelines. government securities. calculated in accordance with the State Bank of Pakistan’s guidelines on capital adequacy.170 – – 4. using Basel II standardised approaches for credit and market risks and basic indicator approach for operational risk is presented below.679.574 836. wherever credit risk mitigation is available. Collaterals if any. Otherwise.Annual Report | 2009 On and off-balance sheet assets in the banking book are broken down to various asset classes for calculation of credit risk requirement. cash.225 16.797 2.439 17. Risk weights notified.146.263 (34.631 5.058. are used as credit risk mitigant after applying appropriate haircuts under the Comprehensive Approach.328 – – 6.774 7. are hence applied at adjusted exposures. lien on deposits.073. As the Bank carries on the business on a wide area network basis.227 338.641) (921. shares.467 7.366.940 935.951 – 19. 43.3 Capital adequacy ratio as at December 31.880 987. External ratings for assets. 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.689. Collaterals used include: Government of Pakistan guarantees.318 856.396.007 page | 175 .624 – 15.234.220.

35% page | 176 .750.628 267.230.403.348 Capital adequacy ratio Total eligible regulatory capital held Total risk weighted assets Capital adequacy ratio 19.870 11.586 2.965.308 1.240.373 12.134 89.887 247.212 9.307 170.631 164.911 166.882.440 7.837 628.916 3. 2009 Risk weighted exposures Capital Requirement Rupees in ‘000 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 Forward Foreign Exchange Contracts Market risk Portfolios subject to standardised approach Interest rate risk Equity position risk Foreign exchange risk Operational risk Total 6.944 12.539 451.886 164.024 6.197 2.229.035 85.006 6.405 33.652 39.821 568.797 166.287.920 320.263.862 8.Askari Bank Limited | Consolidated Financial Statements Notes to the Consolidated Financial Statements For the year ended December 31.711 1.297 11.068.937 334.719.647.438 5.403.836.959.780 14.679.018.780 11.141 9.409 3.934 – 8.851 2.378 124.928.473 7.141 146.970 122.595.467.283 60.014 22.383.901 2.064 – 747.302 24.196 3.898.310.175 333.238 18.763 266.969.736.85% 15.070 1.068.959.796.204.021 988.048 330.337 2.403 75.350 441.592 384.702 683.870 2.255 192.064.180.640.315.606.849.513 20.635.804 113.791 16.404.694 1.366.725 128.550 1.365 6.018 33.041 1.

and agriculture portfolio on a continuous basis and report crucial findings to the senior management for strategic decision making. Contingencies and Commitments. adherence to internal risk management policies and compliance with risk related regulatory requirements.1) and advances (note 10) revaluation of freehold and leasehold land (note 11) useful life of property and equipments (note 11) income taxes (note 32) staff retirement benefits (note 36 to note 38) 45. Deposits. SME. measurement. Consumer Banking products (Personal Finance. sanctioning and review procedures for the purpose of emphasizing prudence in its lending activities and ensuring quality of asset portfolio. limiting transactions with specific counter parties with increased likelihood of default and continually assessing the creditworthiness of counter parties. risk management framework comprises of a Risk Management Committee (RMC) and a risk management group. The risk management group is mainly responsible for managing credit. consumer. Mortgage Finance and Auto Financing etc. The credit portfolio is well diversified sectorally with manufacturing and exports accounting for the bulk of the financing which is considered to be low risk due to the nature of underlying security. primarily aimed to provide quick and cheap credit to the farmers at their door-steps in a simplified manner. Dedicated resources are assigned to scrutinize corporate. whilst spreading the risk over a large number of individual customers and Agriculture Credit products. deregulation and increased level of competition has necessitated the need for an effective and structured risk management in banks. by definition. The focus of the Bank’s commercial lending continues to be short-term trade related financing on a secured and self liquidating basis. The Bank is further diversifying its asset portfolio by offering. The Bank has built and maintains a sound loan portfolio in terms of a well defined Credit Policy approved by the Board of Directors.1. During the year portfolio monitoring department also prepared the Internal Capital Adequacy Assessment Process (ICAAP) and Risk Appetite Policy of the Bank. Estimates and judgments are continually evaluated and are based on historical experience and other factors. The Bank takes necessary measures to control such risk by monitoring credit exposures. including expectations of future events that are believed to be reasonable under the circumstances. A procedure is also functioning which identifies loans showing early warning signals of becoming non-performing. 45. Special attention is paid to the management of non-performing loans. It also requires management to exercise its judgment in the process of applying the Bank’s accounting policies. Business Finance. At Askari Bank Limited. The areas where assumptions and estimates are significant to the Bank’s financial statements or where judgment was exercised in application of accounting policies are as follows: i) ii) iii) iv) v) vi) classification of investments (note 9) provision against investments (note 9.Annual Report | 2009 44.1 Credit Risk: Credit risk is the risk that arises from the potential that an obligor is either unwilling to perform an obligation or its ability to perform such obligation is impaired resulting in economic loss to the Bank. seldom equal the related actual results. commercial. as it provides better margins than traditional business lending opportunities. Risk factors are identified and necessary actions are recommended to mitigate these risk factors. USE OF CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS The preparation of financial statements in conformity with approved accounting standards as applicable in Pakistan requires the use of certain accounting estimates. The Bank will also continue its emphasis on diversification of its assets to avert large single industry or group concentration exposures. Risk Management Division has an independent Portfolio Monitoring Department.) to its customers. RMC is a Board level sub-committee primarily responsible for the identification. monitoring and controlling of the Bank’s principal business risks. page | 177 . market and operational risks.1 Segment information Segmental Information is presented in respect of the class of business and geographical distribution of Advances. The Bank uses estimates and assumptions concerning the future. The Bank constantly monitors overall credit exposure and takes analytical and systematic approaches to its credit structure categorized by group and industry. It’s credit evaluation system comprises of well-designed credit appraisal. The resulting accounting estimate will. 45.2. RISK MANAGEMENT Diversity of financial products and activities.

00 45.572.985.1.748 1.511 3.903 1.925 147.03 0.237 585.03 10.847 76.216 4.096.49 0.474.441 21.076 317.87 10.903 1.11 2.324 2.03 0.000 601.06 0.00 0.240.70 0.151 37.580 19.701 582.673 61.76 18.04 – 0.771 2.512 1.00 54.286 72.275 2.15 35.777 72.64 1.669 942.13 100.51 0.36 5.820 14.372 376.633.556.030 565.115.236 515.69 0.00 18.682 5.282 2.71 0.25 0.10 0.799 141.214 205.002 16.422 0.08 0.974 3.272 4.202 663.30 0.03 0.250 55.686.438.054 580.39 0.82 0.932.657 2.11 0.36 100.689 146.958 114.26 0.956.388 – 4.09 1.985.912.01 2.912.55 0.60 0.528.072.14 13.Askari Bank Limited | Consolidated Financial Statements Notes to the Consolidated Financial Statements For the year ended December 31.047.438.011.12 100.422 11.374 469.490 40.617 2.75 0.930 159.654.785.41 0.1.10 1.41 2.689 32.692 10.546.443 – 398.633.598.533 147.00 59.27 2.060 9.162 587.002 200.157.637.88 0.00 1.02 – 0.266 54.98 100.40 0.47 1.33 10.10 0.28 0.088 960.782 52.908 345.611 121.24 0.04 0.564 115.135 266.310.336 72.53 4.870 227.890 – 500.333.984 205.447 – 63.429 2.87 71.11 1.73 0.439 1.091 342.933.67 0.34 100.844 19.80 0.63 0.37 0.745 4.261 570.904.18 0.01 0.094 159.311 441.165 18.2 Segment by sector 2009 Advances Rupees in ‘000 Percent Deposits Rupees in ‘000 Percent Contingencies and Commitments Rupees in ‘000 Percent Public sector / Government Private 16.45 – 3.774 5.05 2.512.00 11.17 0.328 2.540.615.23 0.161 4.202 2.997.53 0.01 0.00 2.63 4.01 0.645 1.34 0.543 168.501 3.615.328 141.32 0.799 6.881 1. Hotelling & Traveling) Sports goods Sugar Surgical equipment / Metal products Synthetic and Rayon Textile Tobacco / Cigarette manufacturing Transport and communication Travel Agencies Woolen Public sector / Government Others 6.927 156.069.04 0.140.13 100.349 58.047.43 0.451 6.421 3.23 0.585.982 161.37 0.00 1.976.496 5.254.920 465.481 97.1.898.08 1.88 1.08 0.05 0.04 0.07 0.10 0.224.110.00 0.745 10.64 4.01 0.601 1.097 16.473 544.73 0.904 59.22 0.777.042 1.03 2.1 Segment by class of business 2009 Advances Rupees in ‘000 Percent Deposits Rupees in ‘000 Percent Contingencies and Commitments Rupees in ‘000 Percent Agriculture / Agribusiness Automobiles & Allied Cables / Electronics Carpets Cements Chemicals / Pharmaceuticals Engineering Fertilizers Food and Allied Fuel / Energy Ghee and Edible oil Glass and Ceramics Hotels and Restaurants Individuals Insurance Investment banks / Scheduled banks Leasing Leather products and shoes Modarabas Paper and Board Plastic products Ready-made garments Real Estate / Construction Rice processing and trading Rubber products Services (Other than Financial.447 1.00 1.823.87 15.27 0.873 353.64 88.820 131.11 0.079 2.885.64 5.23 1.25 0.954.81 0.800 521.03 28.370.348 6.856 8.837 697. 2009 45.06 0.341.431 137.438.032 167.128 936.03 0.550 1.02 0.23 0.762 19.001.90 1.95 0.00 page | 178 .415 46.072.200.607 87.023 50 77.49 0.696 777.34 0.21 5.007 8.297.08 4.87 89.062 27.72 – 0.903 28.1.708.

188 678.757 169.863 3. page | 179 .576 1.770 546.248 1.187 356.1.725.355 156.357 198.542 50.871 159.422 45.855 113.025.230 383.911.925.425 2.658.5.658.176 451.546 – 14.2 Contingencies and commitments include amounts given in note 23 except bills for collection.808 1.644 109.270.710 22.005 501.519 – 1.220 25.577 3.378 – – – 161.289 173.Annual Report | 2009 45.499 66.025.354.111.637 88.733 thousand (2008: Rs.438 14.664 1. 45.1.186 302.725.396 785.847.400 178.157 45.725.739 1.737 5.616 787.176 746.995.724 959.161 26.1 These do not include intra group items of Rs.689.5.417 568.1.781 32.826.568 1. 5.658.4 Details of non-performing advances and specific provisions by sector Public sector / Government Private – 17.198 19.422 – – – – – 159.802 11.931 48.592.075 105. 4.025.353.036 11.895 17.493 661.417 – 10.161 11.1.161 – 11.492 – – – 4. Hotelling & Traveling) Textile Glass manufacturing Commodities Metal industries Paper industries Sports goods Others 162.516.164 118.252 3.897 249.110.448.1.1.782 447.946 – 254.906 845.186 28.836.325 – – – 140.520.451 – 11.418 156.431.157 45.5.192 10.689.3 Details of non-performing advances and specific provisions by class of business segment 2009 2008 Classified advances Specific Provision Held Rupees in ‘000 Classified Advances Specific Provision Held Agriculture / Agribusiness Automobiles & Allied Cables / Electronics Chemicals / Pharmaceuticals Food & Allied Fuel / Energy Individuals Leather products and shoes Real estate / Construction Services (Other than Financial.609.157 10.951 138.5 Geographical segment analysis 2009 Profit before taxation Total assets employed Net assets employed Contingencies and Commitments Rupees in ‘000 Pakistan Asia Pacific (including South Asia) Europe United States of America and Canada Middle East – note 45.987.436 1.095 678.451 – 572.025.951 299.1 Others 1.342 497.689.1.915 1.1.417 11.985.1.609.388 511.201 640.163 887.819 398.111.109 278.832 1.328.426 36.451 17.976 47.985.277.1.782 294.741 2.407 41.417 – 451.548.1.350 thousand) eliminated upon consolidation of foreign branch results.

130. 2009 45.355.644 – 10. For claims on foreign entities.274 164.037 193. Moody’s & Fitch Sovereigns other than PKR claims PSEs Banks Corporates Credit exposures subject to standardised approach – 3 3 3 – 3 3 3 3 – 3 3 2009 Exposures Rating category Amount outstanding Deduction CRM* Net Amount Amount outstanding 2008 Deduction CRM* Net Amount Sovereigns PSEs PSEs Banks Corporates Corporates Corporates Corporates Unrated Total * CRM= Credit Risk Mitigation 4.524 128.570 90.846.961.680.4 5.037 220.599. risk weights were assigned on the basis of the credit ratings assigned by Moody’s.119 – 1.465.525 1. Moody’s. Type of exposures for which each agency is used in the year ended 2009 is presented below: Exposures JCR-VIS PACRA S&P.5 1 2 1.316. rating of S&P.024 1.000 – – – 98.829.Askari Bank Limited | Consolidated Financial Statements Notes to the Consolidated Financial Statements For the year ended December 31.930 1.467.604.253 4.131 144.533 – 1. For foreign currency claims on sovereigns.General disclosures basel II specific Basel II Standardized Approach is used for calculating the Capital Adequacy for Credit Risk and Market risk.524 129.789.1 Types of exposures and ECAIs used For domestic claims.892. and Fitch Ratings were used.095 – 952.2 Credit risk .384 – 167.1.888 144.693 2.814.3 1 2 3.570 90.801.146 6.999 – – – – – 184.316.757 – 26.892.627 – 154.253 4.466 page | 180 .336.104.095 254.781.000 9.050 177.237. 45. (along with Comprehensive Approach for Credit Risk Mitigation CRM) whereas. ECAIs recommended by the State Bank of Pakistan (SBP).599. Basic Indicator Approach (BIA) is used for Operational Risk Capital Adequacy purposes.466.693 2.094 48.095 – 952.2.860 12.846.288. namely Pakistan Credit Rating Agency Limited (PACRA) and JCR-VIS Credit Rating Company Limited (JCR-VIS) were used.1.999. Foreign exposures not rated by any of the aforementioned rating agencies were categorized as unrated.449.024 2.024 2.146 6.860 12.2.467.000 757 – 12.421 228.674 26.776 12.000 9.606.6 1.791.

and equity products that are exposed to market movements. interest rates.2 Market Risk: Market risk. equity position risk arising from the Bank’s strategic investments. currency. and structural foreign exchange risk arising from the Bank’s capital investments in off-shore operations. and exchange rates. receivables and other assets – Pledge of stocks . page | 181 . – Cash margins or deposits under lien – Lien on SSCs. DSCs. monitoring and control of market risks in order to protect against adverse movements in market factors and to optimize the risk / return profile of its open positions. A Value-at-Risk (“VaR”) methodology is used to measure traded market risk. PSEs and rated Corporates 45. The MRMD monitors risk by revaluing all traded market risk exposed positions on a daily basis.cheques / documentary bills – Import bills . or the risk that the Bank’s earnings and / or capital can be negatively impacted by changes in market factors such as equity prices. in particular interest rate risk in the banking book. To supplement the VaR figures. Non-traded market risk factors include interest rate risk in the banking book.clean – Export bills – clean Collateral used by the Bank for Credit Risk Mitigation (CRM) in the simple approach was as follows: – Cash margin – Government Securities (with value discounted by 20%) – Government Securities (for repo-style transactions satisfying conditions for zero-H) – Guarantees of Government.Annual Report | 2009 Following is list of main types of collateral taken by the Bank. Banks.perishable / non-perishable – Shares of public listed companies – Guarantees of Government. VaR is modeled using variance-covariance and historical approaches. Back testing of VaR estimates against hypothetical P&Ls is carried out on daily basis in order to assess their reliability and the performance of the VaR models. – Residential / commercial mortgage (registered) – Residential / commercial mortgage (equitable) – Secured by agricultural land – Registered charge on stocks. and foreign exchange positions throughout the trading and banking books. The Bank has a policy of identification. measurement. and reviews and reports market risk against regulatory and internal limits. Sensitivity analysis are carried out to gauge the impact of extreme market movements on traded exposures. Banks Autonomous bodies – Local bills . In compliance with Basel requirements. Traded market risk exposures arise from the Bank’s treasury and capital market operations. etc. book debts. and the risk is controlled by ensuring that these positions do not breach regulatory limits and the Bank’s own internally set limits. at a 99% confidence interval over a 1-day and 10-day holding period for equity and debt positions in the trading book. originates from the Bank’s open positions in interest rate. The Market Risk Management Department (“MRMD”) of the Risk Management Division (“RMD”) of the Bank develops and implements the market risk policy and risk measuring / monitoring methodology. and stress testing as per SBP guidelines is used to assess non-traded market risk. possible worst-case losses are also quantified by MRMD using historical data. Market risk capital charge for the Bank is also calculated periodically using Basel II Standardized Approach.

580 244. 2009 Off-balance sheet items Net foreign currency exposure (Rupees in ‘000) Assets Liabilities Pakistan Rupees U.243) (1. These limits include intraday limits. page | 182 .651.411) (2.569. foreign currency placements with State Bank of Pakistan (SBP).S. VaR for the Bank’s debt investments is also generated on a daily basis.2. 2009 45.826 735.246 207. Daily sensitivity analysis of the net open position to a change in ISD/ PKR parity is also carried out.624. The net open position and nostro balances are maintained with in statutory limits.744 5.138 968 2.216) 6. The Bank’s foreign exchange exposure consists of foreign currency cash in hand.362.450. balances with banks abroad. lending and borrowing activities.404.1 Foreign Exchange Risk Foreign exchange risk is the risk that the earnings and / or capital will fluctuate due to changes in foreign exchange rates.514) 63. exposure limits.436. available for sale. Interest rate risk in the banking book is the risk of adverse changes in earnings and / or capital due to mismatched assets and liabilities in the banking book.975.815 (36. 45.560.031.292 239. as fixed by SBP and counterparty limits have been established to limit risk concentration. Strategic investments are undertaken in line with long-term strategy of the Bank. purchase of foreign bills.406 (5. Held for trading equity exposures are undertaken to earn profit through market imperfections and arbitrage opportunities and hence of a short-term nature. and settlement date for off-balance sheet instruments. The equity exposures are revalued and scrip-wise / portfolio VaR is calculated on a daily basis. The MRMD calculates duration and convexity measures to assess the impact of interest rate changes on its investment portfolio. and sectoral limits.407. portfolio limits. VaR is calculated for consolidated foreign exchange exposure with Treasury on a daily basis. The Asset and Liability Management Committee (ALCO) of the Bank monitors and controls mismatch of interest rate sensitive assets and liabilities.101) – 110.2.905. and strategic. forward contracts.957) 66.639 2.471.3 Yield / Interest Rate Risk in the Banking Book (IRRBB)-Basel II Specific The Bank’s interest rate exposure originates from its investing.133.898 – 8. stop-loss limits.2.2 Equity position risk Equity position risk is the risk that the value of the Bank’s equity positions can change as a result of broad equity market and security-specific movements.514 20.803 (11. Dollars Pound Sterling Japanese Yen Euro Other European Currencies Other Currencies 219.826 837.604 45. The Bank manages its foreign exchange exposures by matching foreign currency assets and liabilities.642 6. Available for sale equity investments are made with the intent to earn profit from company and industry fundamentals.471 1.Askari Bank Limited | Consolidated Financial Statements Notes to the Consolidated Financial Statements For the year ended December 31.456 – 18.377 2.783 6.996 (5.885. Interest rate risk stress tests are conducted bi-annually to assess the impact of a parallel shift in the yield curve on the Bank’s capital using sensitivity positions calculated using earlier of contractual re-pricing or maturity date for on-balance sheet instruments.432.682. The Bank’s equity exposures are of three types: held for trading. All equity positions in held for trading and available for sale portfolios are subject to exposure limits established by the Bank in line with general limits prescribed by SBP in its Prudential Regulations. foreign currency deposits and capital investments in offshore operations.695 4.707 26.

162.658 – 188 – 53.685 – 9.540.075 1.090 – 4.885.933.101.616 4.657.655.550 3.326.933.65% 16.901 10.072.031.300.12% – 19.027.326.101.483.556 45.797 – – – – (7.338 – 20.179 244.212 1.96% – 3.493.573 10.942.486.957 – – – 12.724.425.787 – – – 5.499 – 9.241 – – 13.531.903 5.995.935.848 – 4.106 – 5.940) – – – – 6.856 – – – 4.596.876.336 – 6.565 300 383 – 35.404.001 (7.925 – – – – – – – 2.463 239.900 11.358) 10.770) (10.241 42.240 22.537 2.625 – – 1.650 (2.32% – 2.510.850 8.939.685 (23.995 – 14.554.326.640 4.526.528.866.201 2.553 2.775 5.076 29.055 – 45.736) 3.768.494.250 – – 3.947.415.534.043.1 Yield risk is the risk of decline in earnings due to adverse movement of the yield curve.059 66.295.659 – – – – 9.484 2.79% 6.787 – 13.819 775 593 – 23.832.249.903.265.2.770) (10.670 – 46.943.415.267.686.2.616.099 33.536 35.040.375 6.036 – – – 2.468.104 – – – – – – – – – 7.638.945.993.273.829 – 9.670 19. page | 183 .510. 2009 Effective Yield / Interest rate Over 1 to 3 Months Exposed to yield/ interest risk Over 3 Over 6 Over 1 Over 2 to 6 Months to 1 to 2 to 3 Months Year Years Years Over 3 to 5 Years Over 5 to 10 Years Non-interest bearing Above 10 financial Years instruments Rupees in ‘000 On-balance sheet financial instruments Assets Cash and balances with treasury banks Balances with other banks Lendings to financial institutions Investments Advances Other assets Total Upto 1 Month 0.399.703) 9.617 135. 45.736) (17.398.582 – 3.882 13.18% 12.649.039.150 2.273.30% 12.2 Interest rate risk is the risk that the value of the financial instrument will fluctuate due to changes in the market interest rates.914 – – – – 31.553.326.945.922.308 – 41.687.374.868 (17.24% 12.604 (14.200 3.442.925 16.150 2.11% 11.324.998.940) (11.045.685 (23.230.064 2.903.031.127 26.633.846.650 (2.259 – 20.091.486 3.17% 12.773 20.616 4.499.403 – – 17.872.903.582 – – – – 22.702 2.702 2.179 9.320.598.251 – 51.246 4.945.642 – 6.912.875.922.463 54.4.332.145) – – 14.847 1.499.173.705.546 31.154 – – – 15.385.734 2.652 – – – – – – – – – – – – 2.789 2.520 560.686.230.00% 1.642 – – 4.952.332.543 4.983 47.258 2.921) 25.386.914 – – 20.267.493.2.471.633 – – – 7.003 6.854 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 Purchase and resale agreements Sale and repurchase agreements Commitments to extend credits Off-balance sheet gap Total yield / interest risk sensitivity gap Cumulative yield / interest risk sensitivity gap 12.500.179 31.994.785.469.813 – 38.943.163 205.4 Mismatch of interest rate sensitive assets and liabilities Yield / interest rate sensitivity position for on-balance sheet instruments is based on the earlier of contractual repricing or maturity date and for off-balance sheet instruments is based on settlement date.053 19.145) 34.738 – 10.Annual Report | 2009 45.846.866.204) (9.436.685 14.921) (9.212.4.703) 24.785 442.739 – – 36.

945.438 19.917.318 856.577 – – 136.3 Liquidity Risk Liquidity risk reflects an enterprises inability in raising funds to meet commitments.749 – 183.463 239.813 77.871 (13.450 3.150 2.088 28.945.850 8.346 29.850 8.385.467 7.162.663.012.073.520.835 6.446 28.339.440 2.486 3.347 19.853.941.912.751.673 14.338.265 1.101.163 205.285 55.568.901 9.497.651 – – – – – – 12.229.499 686. 2009 Upto 1 Month Over 1 to 3 Months Over 3 Over 6 to 6 Months to Months 1 Year Over 1 to 2 Years Over 2 to 3 Years Over 3 to 5 Years Over 5 to 10 Years Above 10 Years Rupees in ‘000 Assets Cash and balances with treasury banks Balances with other banks Lendings to financial institutions Investments Advances Operating fixed assets Deferred tax assets Other assets Total 19.554.300.691.994.468.159.320.053 – 25.354.633.355 300 383 – 1.640 4.009) 5.573 10.818.540.617 135.222.568.625.256 – – 1.987.398.291 – – 10.807 2.399.150 2.935.871 (9.167.425.250 – – 1.998.993.756.640 3.803 1.536 33.241.785.685 5.895 69.638.567 1.251 903.903 5.126 560.366.810 775 1.336.367.127 31. depositors concentration both in terms of the overall funding mix and avoidance of undue reliance on large individual deposits and liquidity contingency plans.374.537 2. 2009 45.039.472.088 – – 24.055 35.059 66.336 575.885.002 17.823 318.308 3.467.084 43.385.285.649. The Bank’s liquidity position is managed by the Asset and Liability Management Committee (ALCO).983 57.361.472.106 801. core retail deposits (current accounts and saving accounts) form a considerable part of the Bank’s overall funding and significant importance is attached to the stability and growth of these deposits.353.806.285 – – 6.192 – 10.979.338 361.184 3.666 49.427.827 – – – 7.947 20.194 – – 5.191 – 145.259 – 165.075 593 – – 1.234.033.418 26.484 2.878) 3.866.Askari Bank Limited | Consolidated Financial Statements Notes to the Consolidated Financial Statements For the year ended December 31.249.324.995 – 1.949 – – – 9.672.758 – 6.835 9.284 19.713.543 333.846) (17.995.009 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 Surplus on revaluation of assets Minority interest 2.611.326.023.399.099 15.091.987. ALCO monitors the maintenance of statement of financial position liquidity ratios.773 20.328 – – – 4.415 2.327 – – – 2.200 3.858 – – – – 20.179 254.439 1.242 – 188 (27.374.675 11.567 – – 3.806 – – – 9.949.670 19.384 17.236 – – 36.854.533.909) page | 184 .585 46.848 478.622 – – – – – – – – 14.084 5.526.365.324 – – 14.900 11.945 55.308 834.839 26.009 28.956) (14.374. Moreover.925 4.787 – – 2.785 442.263 14.

Operational Risk Management (ORM) has been entrenched to increase the efficiency and effectiveness of the Bank’s resources. This definition includes legal risk but not strategic risk or reputational risk. Operational risk management is governed by well defined policy and procedures.014. 45. The appropriation will be approved in the forthcoming Annual General Meeting. minimize losses and utilize opportunities.Annual Report | 2009 45.693 page | 185 .4. Further. Potential risks / losses are identified and assessed through Key risk indicators and Risk and Control Self Assessment of branches and business and support units. trouble. or as a result of adverse external events. infrastructure and human resource are given prime importance and Business Continuity Plan has been revised to cater to current threats being faced. In addition. 2010 has proposed a cash dividend of Nil (2008: Nil).4 Operational risk Operational risk is the possibility of financial losses occurring due to shortcomings or failure of internal processes. damage to tangible assets and external frauds are monitored by operational risk. during the year number of policies and procedures have been reviewed to strengthen the system and processes. violation of regulator law / system. 46. disaster.1 NON-ADJUSTING EVENTS AFTER THE BALANCE SHEET DATE The Board of Directors in its meeting held on February 23.439 1. 2010 as follows: 2009 2008 Rupees in ‘000 Transfer from unappropriated profit to: Proposed dividend Reserve for issue of bonus shares General reserve Transfer from general reserve to: Reserve for issue of bonus shares – – 856. 2009 do not include the effect of the appropriation which will be accounted for in the financial statements for the year ending December 31.225 1.240 – 338. in information technology or in people. 46.071. Materialized actual loss arising from operational error.1 Operational risk disclosures Basel II The Bank approach in managing operational risk is to adopt practices that are fit for the purpose to suit the organizational maturity and particular environments in which our business operates. integrated through a comprehensive framework clearly communicated across the Bank. accident. the directors have also announced a bonus issue of 20 percent (2008: 25 percent). The financial statements for the year ended December 31. One of the major component of operational risk being the potential of disruption to business operation due to exceptional event that may disrupt system.

The final approval by the State Bank of Pakistan has been received vide letter No. 4 dated February 17. the Bank initiated the process of amalgamation of Askari Leasing Limited (ALL) with and into the Bank. DATE OF AUTHORIZATION These consolidated financial statements were authorised for issue on February 23. 48. 2010 as per decision of the management of both entities. the Bank shall issue 28. 48. (R) Imtiaz Hussain Director Lt. Gen. 49. R.2 GENERAL Figures have been rounded off to the nearest thousand of rupees unless otherwise stated. 2010 by the Board of Directors of the Bank. President & Chief Executive M.1 48. 47. Javed Zia Chairman page | 186 .2 During the year.273 million shares of the Bank to the shareholders of ALL.Askari Bank Limited | Consolidated Financial Statements 46. whereby the scheme of amalgamation is effective within 30 days from the date of approval. The effective date of amalgamation will be March 3. 2009 respectively and has also been subsequently approved by the Competition Commission of Pakistan and the Securities and Exchange Commission of Pakistan. Captions as prescribed by BSD Circular No. The scheme of amalgamation under section 48 of the Banking Companies Ordinance. 2009 and December 22. 2006 issued by the State Bank of Pakistan in respect of which there are no amounts have not been reproduced in these financial statements except for the balance sheet and profit and loss account. CORRESPONDING FIGURES Previous year’s figures have been rearranged and reclassified where necessary for the purposes of comparison. BPRD (R&P-02)/625-99/2010/1256 dated February 18. 2010. Consequently. Gen. 1962 has been approved by the shareholders of both companies in the Extra Ordinary General Meetings of the Bank and ALL held on December 21. Mehkari Ali Noormahomed Rattansey Director Lt.

150 2. of the Borrower Name of Individuals / Partners / Directors Father’s / Husband’s Name Principal Interest/ Mark-up Other Total Principal Written-off Total 1 Mohib Exports Limited 8-KM.000 2.363 - 1.451 – 27.000 or above allowed to a person(s) during the year ended December 31.692 27.175 9. Islamabad Shahzad Siddique (Pvt) Limited 4.707 - 2.411 - 1. Bashir Plaza.759 – 56.357 – 17.118 – 1. Market.357. Markaz I-9. Sukkur MIA Traders (Private) Limited Flat # 5. Jaranwala Road. Model Town Extension. 33100-6598842-7 Sheraz Siddique 33100-1704018-3 Shahzad Siddique 33100-1017331-1 10.967 266.451 6 Ali’s International Qazi Rahat Ali 242/1 Sector-24.7 to these financial statements Statement in terms of sub-section (3) of section 33-A of the Banking Companies Ordinance. Name and address No. S.246. Muhammad Siddique Ch. 42301-9140443-9 Korangi Industrial Area. Muhammad Siddique Ch.946 Total 1.707 7 Abdul Hameed Abdul Hafeez Ali Muhammad Ch.503 33.405 - 1. Faisalabad Fahad Hameed 210-67-419868 Faisal Hafeez Khan 210-67-234299 Muhammad Siddique Ch.386 700. 582 1. A.118 – 901.E.743 – 11. International (Pvt) Limited Muhammad Adan Shirazi D-99.089 - 1.357 – 17. Sector I-10/3. Khurrianwala. Lahore Shahanshah Trading Company Shop # 28.893 - 56. H.976 1.893 - 72.451 – 27.175 2 A.893 – 1.009.I.965 4 3. Managa.993 - 1. Ali Ahmed Khalid Mahmood Mavel Das 9.707 - 12.077 – 551 – 551 5 Muhammad Rafiq Muhammad Idrees Taj Din Muhammad Ashraf Muhammad Yasin Ch. Islamabad Khalid Mahmood 35202-9557295-5 Zakia Khalid 35202-4495862-0 Namo Mal 45504-0489491-9 Muhammad Idrees 276-54-176702 Musarrat Ghazala 276-54-065860 Muhammad Ashraf 294-91-020493 Nasreen Ashraf 294-62-733932 Muhammad Mujeeb 502-55-614751 Fazal-ul-Qadir 101-57-137982 Ghulam Hassan 601-88-385774 1.268 201. 2009. Karachi 42301-8051825-9 Seema Shirazi 42301-655746-4 Malik Zain 42301-3375828-9 Rasool Textile (Pvt) Limited 250-N.372 page | 187 .Q.625. (Rupees in ‘000) Outstanding liabilities at the beginning of the year Interest/ Mark-up Written-off Other Financial relief provided Sr.214 3 9. Rafique Saigol M.447. Rafique Saigol Mohsin Shirazi Muhammad Adnan Shirazi Malik Naseem Akhtar Ch.610 23.T.101 – 5.965 – 1.053 23. Kasur Arif Saigol 35202-9563094-9 Abid Saigol 270-92-006204 Asif Saigol 270-92-006202 M.5-KM. Street # 8.096 268.185 742. Ghulam Qadir Khuda Dad Qazi Musarrat Ali 28. Rafique Saigol M.Annual Report | 2009 Annexure-I Referred to in note 10.363 8 48. Karachi Bakeline Products Plot # 117. 500.096 201.707 - 2. Raiwind Road. 1962 in respect of written off loans or any other financial reliefs of Rs.818 7.818 7.

647.465 260.884 – 3.743.Askari Bank Limited | Consolidated Financial Statements Annexure-II As at December 31.863.680 753.372 Remuneration to Shariah Advisor/Board Charity fund Opening Balance Additions during the year Payments/Utilization during the year Closing Balance 487 4.591 4.028.372 918.314.033.396.582 2.078 8.680 979 77.232.205 – 3.961 1.339 918.653.014 10.101 753.216 520.383 689.000 861.181 2.106.069 13.296 2.575 658.235 10.777 1.417 1.323.680 – 753.087.882.086 700.729 901. During the year one conventional banking branch was converted to Islamic banking branch.294 22.non remunerative Due to head office Other liabilities Net assets Represented By Islamic Banking Fund Reserves Unappropriated/ Unremitted profit/(loss) Surplus/ (Deficit) on revaluation of assets 850.781 page | 188 .116.983 2.848 2.280.331 935. 2009 Statement of Financial Position (Islamic Banking) The Bank is operating 31 Islamic banking branches including 2 sub-branches at the end of 2009 as compared to 20 Islamic banking branches including 2 sub-branches at the end of 2008.617 139.287 1.680 655.995 9.364 2.098 12.372 41.000 – 53.681 950.738 2.043 1.000 – 68.884 11. Rupees in ‘000 2009 2008 Assets Cash and balances with treasury banks Balances with and Due from Financial Institutions Investments Financing and Receivables – Murahaba – Ijarah – Musharaka – Diminishing Musharaka – Salam – Other Islamic Modes Other assets Total Assets Liabilities Bills payable Due to Financial Institutions Deposits and other accounts – Current Accounts – Saving Accounts – Term Deposits – Others – Deposit from Financial Institutions .818) 2.371 318 840 (671) 487 1.388.024.711 402.702 (2.393.remunerative – Deposits from Financial Institutions .346 1.945 838.559 3.008 650.253 724.372 – 918.

484 75.949 397. 2009 2009 2008 Profit / return earned on financings.182.228 63.519 353.Annual Report | 2009 Annexure-II Rupees in ‘000 Profit and Loss Account (Islamic Banking) For the year ended December 31. commission and brokerage Income Dividend income Income from dealing in foreign currencies Capital gain on sale of securities Unrealised gain / (loss) on revaluation of investments classified as held for trading Other income Total other income 1.484 360.612 386.262 499.693 13.288 2.692 309. investments and placements Return on deposits and other dues expensed Net spread earned Provision against non-performing financings Provision for diminution in the value of investments Bad debts written off directly Income after provisions Other Income Fee.744 822.356 309.356 77.001 14.490 683.154 22.494 460.184 1.010 362.001 383.519 8.507 36.221 77.965 12.000 138.692 14.256 18.484 8.221 page | 189 .172 32.577 Other expenses Administrative expenses Other provisions / write offs Other charges Total other expenses Extra Ordinary / unusual items Profit before taxation 383.

All funds obtained. as well as with specific fatawa and rulings issued by me. relating to PLS accounts also conform to the basis vetted by me as the Shariah Advisor. as eleven new full fledged Islamic Banking Branches have been opened during the year. profits and charging of losses (if any). Relevant documentation and procedures adopted in this connection have also reviewed and vetted by me. There are now 29 full fledged Islamic Banking Branches and 2 Islamic sub-branches. I have reviewed each class of transactions conducted during the year. on an ongoing basis. special care is continuously taken. profit sharing ratios. to ensure that the funds and products of Islamic Banking are managed separately from the conventional banking side. in accordance with the Shariah rules and principles. prohibited by Shariah rules and principles have been credited to charity account. from Conventional to Islamic Banking. In order to facilitate this work. We remain fully committed to contributing to capacity building and promoting the cause of Islamic Banking in Pakistan. In my opinion. invested and shared are in Halal modes and investments. Shariah Audit and Shariah Compliance departments are functioning under my supervision. As per Shariah requirements. the allocation of funds. on a stand-alone basis. SBP regulations and guidelines related to Shariah compliance and other rules. including conversion of Kohat Branch. as the Shariah Advisor from time to time.Islamic Banking have been carried out in accordance with the rules and principles of Shariah. the affairs of Askari Bank Limited .Askari Bank Limited | Consolidated Financial Statements Shariah Advisor’s Report 2009 Alhamdolillah! The year 2009 has been a successful year for Askari Bank’s Islamic Banking Services. Besides. As a Shariah Advisor. Muhammad Tahir Mansoori Shariah Advisor page | 190 . or means. weightages. Any earnings that have been realized from sources. under my supervision as the Shariah Advisor of the Bank. May Allah Almighty bless our sincere efforts! Dr.

478 35.702 1 101 501 1001 5001 10001 110001 345001 500001 800001 1135001 10290001 100 500 1000 5000 10000 110000 330000 490000 790000 985000 5940000 25452000 116.483 23.265 4.018 2. NonBanking Financial Institutions. Modarabas and Mutual Funds (excluding NIT & ICP) Individuals Others Total Note 2: 1 1 1 1 1 1 1 1 1 1 1 8 13 295 20. Javed Zia Lt. Gen.837.00 There have been no trades in the shares of the Bank.790 shares. page | 191 .00 0.00 0.563 507.352 171 16 38 45 27 36 15 2 20.635 Categories of shareholders Particulars Number of shareholders Shares held Percent Individuals .761 2.00 0.716 22. Number of shareholders Shares held Percentage Associated company Army Welfare Trust NIT / ICP National Investment (Unit) Trust Investment Corporation of Pakistan Directors & Chief Executive Lt.00 0. Chief Financial Officer.346.381 2.351.018 2.135.57 19.361 95 10 9 3 20 6 20.17 4.57 0.00 0.446 507.Annual Report | 2009 Pattern of Shareholding As at December 31.14 5. detailed below.018 843 625 625 625 10.790 62.182 19.753 2.836 152.702 100.635 50. (R.771. (R.301.030 2.761 17.346.738.83 1.00 0.00 0.926 16.421 507.487 61.878 119. Muhammad Riyazul Haque Mr.106 257.395.208.00 0.119.) Imtiaz Hussain Lt.702 254.764 6.812.) Saeed Ahmed Khan Mr.28 4. Bashir Ahmad Khan Mr.782.123.346 100.00 0.68 1.Note 1 Investment / brokerage companies Insurance companies Joint stock companies Financial institutions Modaraba and Mutual Funds Charitable and other trusts Foreign investors Others Total Note 1: Held by Particulars 20. Shahid Mahmud Executives of the Bank Public sector companies and corporations Banks.740 4.364.100.84 11.331 52 20.635 1.645 59.977 9.01 0.653. Gen. carried out by it’s Directors.678.49 3.891 6.00 23. Chief Executive.217 9.018 2.776 1.00 Individual include 8 directors holding 10. The ultimate ownership remains with AWT.069 2.925.00 0. 2009 Number of shareholders From Shareholding To Total shares held 2.31 0. Zafar Alam Khan Sumbal Dr.924 26.546. Insurance Companies. Development Financial Institutions.508.944.85 100.638.346.071 5. Gen.69 3.54 50.140. Company Secretary and their spouse and minor children. in their capacity as nominees of Army Welfare Trust (AWT).003.604.443 341.03 100.635 19. Ali Noormahomed Rattansey Mr.905 17.437 15.

FINLAND 7. MEXICO 25. MAURITIUS 40. BULGARIA 12. ARMENIA 16. AUSTRALIA 17.A. CYPRUS 4. Hellenic Bank Public Company Ltd. ALGERIA Banque de l’ Agriculture et du Development Rural HSBC Bank Argentina SA HSBC Bank Armenia Jsc Australia & Newzealand Banking Group Commonwealth Bank of Australia HSBC Bank Australia Ltd..Mitsubishi UFJ Ltd (The) Mizuho Corporate Bank Ltd Resona Bank Limited Sumitomo Mitsui Banking Corp. Dexia Bank Belgium Fortis Bank. AUSTRIA 31. CROATIA Societe Generale-Splitska banka dd Zagrebacka Banka dd Cyprus Popular Bank Public Company Ltd. BELGIUM 22. St. HUNGARY 14. NV/S. Ltd. CANADA 23. Kenya Commercial Bank Stanbic Bank Kenya Ltd Daegu Bank Ltd Kookmin Bank KorAm Bank Korea Exchange Bank Shinhan Bank Al-Ahli Bank of Kuwait KSC Bank of Kuwait and Middle East Commercial Bank of Kuwait Gulf Bank KSC Byblos Bank SAL Fransabank SAL Banque Geneale De Luxemburg HSBC Bank Malaysia Berhad Public Bank Berhad Hong Leong Bank Berhad RHB Bank Berhad The Mauritius Commercial Bank HSBC Mexico SA BNP Paribas Private Bank Monaco Attijariwafa Bank Banque Marocaine du Commerce Exterieur SA Citibank Maghreb Himalayan Bank Ltd Bank of Asia Nepal Limited Laxmi Bank Limited 2. MONACO 26. KUWAIT 9.A ING Belgium NV/SA KBC Bank NV UniCredit Bank dd 15. Jordan Ahli Bank Plc The Housing Bank for Trade & Finance Alliance Bank Joint Stock Company BTA Bank JSC African Banking Corporation Ltd. GERMANY 35. Bank of China (Hong Kong) Ltd Bank of East Asia Ltd. KOREA (SOUTH) 8. George Bank Limited WestPac Banking Corporation Citibank International Plc Raiffeisen Zentralbank Osterreich (RZB) UniCredit Bank Austria AG The International Bank of Azerbaijan Republic City Bank Ltd Export Import Bank of Bangladesh Prime Bank Ltd Southeast Bank Ltd United Commercial Bank Ltd. EGYPT 6. IRELAND 29.G DZ Bank AG Deutsche ZentralGenoschaftsbank Sparkasse Aachen UniCredit Bank A. NEPAL page | 192 . MOROCCO 27. ARGENTINA 3. Habib Finance International Limited Budapest Credit & Development Bank Rt Citibank Zrt UniCredit Bank Hungary Zrt Raiffeisen Bank Zrt ICICI Bank Ltd Karur Vysya Bank Ltd. BRAZIL Banco Citibank SA UniCredit Bulbank AD Banque National Du Canada Canadian Imperial Bank of Commerce HSBC Bank Canada Habib Candain Bank National Bank of Canada Royal Bank of Canada Toronto-Dominion Bank BBV Banco BHIF Banco de Credito Agricultural Bank of China Bank of China Ltd Bank of Communications China Construction Bank Corporation China Merchants Bank China Minsheng Banking Corporation Export Import Bank of China (EXIM Bank) Guangdong Development Bank Industrial and Commercial Bank of China Ltd Jinan City Commercial Bank 36. BANGLADESH 33. BOSNIA HERZEGOVINA 10. Marfin Popular Bank Public Co. LEBANON 11. GREECE 37.Askari Bank Limited Correspondent Network 1. JAPAN 18.G. KAZAKHSTAN 20. AZERBAIJAN 32. INDONESIA 43. HONG KONG 13. DENMARK 5.G Deutsche Bank. (The) Hang Seng Bank Hong Kong & Shanghai Banking Corp. LUXEMBURG 38. INDIA 42. Ceskoslovenska Obchodni Banka as Raiffeisenbank as UniCredit Bank Czeck Republic Danske Bank Aktieselskab Nordea Bank Denmark A/S Spar Nord Bank Bank of Alexandria Sampo Bank Plc Nordea Bank plc BNP Paribas SA CALYON Credit Lyonnais Credit Agricole SA HSBC France Societe Generale Union de Banques et de Francaises (UBAF) Bayerische Landesbank Commerzbank A. The Punjab National Bank State Bank of India Tamilnad Mercantile Bank Limited PT Bank Lippo TbK PT Bank Mandiri (Persero) TbK 28. CZECH REPUBLIC 30. WGZ-Bank AG Westdeutsche Genossenschafts-Zentralbank Alpha Bank AE Marfin Egnatia Bank S. A. CHILE 39. ITALY Bank of Ireland Banca Antonveneta SpA Banca Intesa SpA Banca Cassa Di Risparmio Di Tortona SpA Banca UBAE SpA UniCredit SPA Bank of Tokyo . JORDAN 19. FRANCE 34. MALAYSIA 24. KENYA 21. CHINA 41.

UKRAINE 47. HSBC Bank Plc Lloyds TSB Bank plc National Westminster Bank Royal Bank of Scotland Plc Standard Chartered Bank United National Bank Bank of New York Bank of Oklahama.Annual Report | 2009 Correspondent Network 44. UZBEKISTAN 75. UNITED ARAB EMIRATES 48. PHILIPPINES 63. Kasikornbank Public Company Limited The Siam Commercial Bank PCL United Overseas Bank (Thai) PCL 60. Confederacion Espanola Bank of Ceylon Hatton National Bank Seylan Bank Ltd Sampath Bank PLC Union Bank of Colombo Limited Nordea Bank AB (Publ) Swedbank A. Bank of New Zealand ANZ National Bank Ltd. PAKISTAN Citibank (Slovakia) as Postova Banka as UniCredit Bank Slovakia as Banka Celje dd Nova Ljubljanska Banka D.A Banco Santander Totta SA. SOUTH AFRICA 62.D.A Compass Bank Comerica Bank First Tennessee Bank N. SLOVAKIA 71.A. U S A 50.V. The Bank of Punjab. QATAR 66. Bank of the West Citibank N. DNB Nor Bank ASA Nordea Bank Norge ASA Bank Muscat SAOG Bank Dhofar (S. UNITED KINGDOM 61. SPAIN 73. Meezan Bank Limited Habib Metropolitan Bank Limited MYBank Limited National Bank of Pakistan NIB Bank Limited Silk Bank Pakistan Soneri Bank Limited United Bank Limited RIZAL Commercial Banking Corporation Security Bank Corporation Bank Polska Kasa Opieki SA Bank Handlowy Warszawie SA Bank BPH SA BRE Bank SA ING Bank Slaski SA Raiffeisen Bank Polska SA RBS Bank Polska SA Banco BPI S. TAIWAN 277 Banks 54.G. SRI LANKA 51. YEMEN ARAB REPUBLIC 53.) Oman International Bank SAOG HSBC bank Panama Allied Bank of Pakistan Atlas bank Limited Bank Al-Habib Limited Bank Alfalah Limited Bank Islami (Pakistan) Limited Bank of Khyber. NETHERLANDS Fortis Bank (Nederland) NV F Van Lanschot Bankiers NV ING Bank N. POLAND 74. First Rand Bank Limited HBZ Bank Limited Habib Overseas Bank Limited Standard Bank of South Africa Banco Espanol de Credito SA Banco Popular Espanol Banco Santander Central Hispano SA Citibank Espana S. VIETNAM 64. OMAN 58. 2009 page | 193 of . SLOVENIA 72.B Skandinaviska Enskilda Banken Banca Commerciale Lugano Banque de Comm. N. JS Bank Limited KASB Bank Limited MCB Bank Ltd.A. (The) Riyad Bank Samba Financial Group Saudi British Bank (The) Saudi Hollandi Bank United Overseas Bank UniCredit Bank Serbia JSC 68. TUNISIA Societe Tunisienne de Banque Tunis International Bank Finansbank AS ING Bank AS Turk Ekonomy Bankasi AS Turkiye is Bankasi AS Yapi ve Kredi Bankasi AS JSCB Citibank (Ukraine) Abu Dhabi Commercial Bank Commercial Bank of Dubai Dubai Islamic Bank Emirates Islamic Bank Emirates Bank International PJSC MashreqBank Psc National Bank of Fujairah Union National Bank ABC International Bank Plc Habib Allied International Bank Plc Habibsons Bank Ltd. Caixa Geral d Depositos SA Caixa Central de Credito Agricola Mutuo Caixa Económica Montepio Geral Finibanco SA Doha Bank Ltd. PORTUGAL 76. THAILAND 76 Countries of Origin. TURKEY 57.A Habib American Bank JP Morgan Chase Bank M and T Bank Royal Bank of Scotland Uzbekiston NB Joint Stock Commercial Bank For Fireugb Trade of Vietnam Chohung Vina Bank International Bank of Yemen YSC National Bank of Yemen Saba Islamic Bank Tadhamon International Islamic Bank Yemen Gulf Bank Yemen Bank for Reconstruction and Development 69. ROMANIA 55. NEW ZEALAND 46. RUSSIA 67.A. as on December 31. et de Placements SA BNP Paribas (Suisse) SA Banque Cantonale de Genève Credit Suisse Clariden Leu Ltd Habib Bank AG Zurich UBS AG United Bank AG (Zürich) Zuercher Kantonal Bank Taiwan Cooperative Bank Taichung Commercial Bank Ltd Union Bank of Taiwan Bangkok Bank Public Co. PANAMA 49. SERBIA AND MONTENEGRO 59. SKB Banka DD UniCredit Banka Slovenija dd ABSA Bank Ltd. SINGAPORE 70. Qatar National Bank UniCredit Tiriac Bank SA Bank of Moscow Promsv Yazbank AKB ZAO 56. SWEDEN 65.O. SWITZERLAND 52. NORWAY Arab National Bank Al-Rajhi Banking and Investment Corporation Banque Saudi Fransi National Commercial Bank Ltd. The Faysal Bank Limited Habib Bank Ltd. SAUDI ARABIA 45.

PABX: (051) 9272880-3 Direct: (051) 9272885 Fax: (051) 9272886 page | 194 . Fax: (051) 2255761 Sabzi Mandi Plot No. PABX: (051) 2271794-6. PABX: (051) 2114254 – 56 Direct: (051) 2114251 Fax: (051) 2114257 I-9 Industrial Area Plot No. 94. 2823943 Direct: (051) 2871144. F-10 Markaz. Jinnah Avenue. 3 – B. Rawalpindi. G. Blue Area. Direct: (051) 2255761. 01. Rasheed Plaza. Rawalpindi 10 Corps Head Quarter. PABX: (051) 2894021 . Islamabad. 2271801 Fax: (051) 2271797 G-8 Markaz 12 H-1. F-8 Markaz. P. Peshawar Road. Sector G-10/4. Sector G – 6. The Mall. Satellite Town. 9063200 Fax: (051) 9273180 Chaklala Scheme-III 18-Commercial Area. Islamabad Mobile: (0333) 5288280 (Sub-Branch) Capital Development Authority (CDA) Old Naval Head Quarter. PABX: (051) 9272794-99 Direct: (051) 9272702 Fax: (051) 9272704 Satellite Town Midway Centrum. PABX: (051) 4533272. BOQ Building. Islamabad. PABX:(051) 2233647-8 Direct: (051) 2233645 (Sub-Branch) Directorate General – Inter Services Intelligence (ISI). Rawalpindi RWP I – AREA Rawalpindi AWT Plaza AWT Plaza. Islamabad Direct: (051) 9017202 (Sub-Branch) NCP Complex Room No. PABX: (051) 9290262-5 Direct: (051) 9290244 Fax: (051) 9290270 Lalkurti Khadim Hussain Road. Sabzi Mandi. Rawalpindi. Islamabad.Road. 9273168-72 Direct: (051) 9273178. Sector I-9/3. Mauve Area. Hazroo Direct: (057) 2313486 Fax: (057) 2313487 (Sub-Branch) Chaklala Garrison. 408. Sector I – 11/4.T. Islamabad. The Mall. F-11 Markaz. PABX: (051) 2654412-15. Haider Road. Shahrah-e-Suharwardy. 9222418 Direct: (051) 2654032 Fax: (051) 9222415 F-8 Markaz Kiran Plaza. PABX: (051) 4438168 – 70 Direct: (051) 4438165 Fax: (051) 4438171 Barakahu 525 – Usman Plaza. Jinnah Super Market. Near Bus Stand Hazroo. POF Hotel. PMO. Aabpara.O. PABX: (051) 2817182-4 Direct: (051) 2817180 Fax: (051) 2817185 F-10 Markaz Block 5-C. Ghousia Plaza. Lalkurti. Industrial Area. Wah Cantt. P. Chaklala Scheme .III. Islamabad Direct: (051) 2100016 (Sub-Branch) Overseas Pakistanis Foundation (OPF) Ground Floor. Rawalpindi. Rawalpindi. NCP Complex. H – 11/4.Askari Bank Limited Branch Network North Region ISLAMABAD – AREA Islamabad Aabpara Plot No. 4533375 Direct: (051) 4533563 Fax: (051) 4533967 Kamra Cantonment Board. PABX: (051) 2282083 –85. Jinnah Avenue.Box: 1499. PABX: (051) 9281097-99 Direct: (051) 5960030 Fax: (051) 9281025 Haider Road Bilal Plaza. Imran Khan Avenue. Islamabad. Gulshan Colony . Rawalpindi.O. Islamamabd. Kamra PABX: (057) 9317393 – 6 Direct (057) 9317390 Fax: (057) 9317392 Pindi Gheb Main Katcheri Road. Rawalpindi PABX: (051) 5121466-69 Direct: (051)5519579 Fax: (051) 5121471 Shaheen Complex Shaheen Complex. Islamabad. 9222411. Main Murree Road. Rawalpindi Mobile: (0321) 5246097 (Sub-Branch) Kahota Research Laboratories (KRL). Barakahu District Islamamabd. Islamamabd. Basement. Islamabad Mobile: (0300) 5191488 Peshawar Road Zahoor Plaza. Shahrah-e-Suharwardy. G-5/2. Commercial Complex. Ground Floor. Box 1083. Taxila PABX: (051) 90652578 Direct: (051) 9065274 (Sub-Branch) Main Hazroo Hattian Road. Box: 1324.23 Direct: (051) 2894026 Fax: (051) 2894024 F-7 Markaz 13-I. Islamabad Stock Exchange Tower. Chaklala Garrison. 4. PABX: (051) 4100811-3 Direct: (051) 4100818 Fax: (051) 4100814 Jinnah Avenue 24-D. F-7 Markaz. 6th Road Crossing. G-8 Markaz. PABX: (051) 2603036-38 Direct: (051) 2603034 Fax: (051) 2603041 Islamabad Stock Exchange 55-B. Islamabad PABX: (051) 9214026 – 27 Direct: (051) 9214024 Fax: (051) 9214025 (Sub-Branch) NESCOM Plot No. 10. Razzaq Plaza. PABX: (051) 9063150. I&T Centre. Rawalpindi PABX: (051) 9281377 – 79 Direct: (051)9281375 Fax: (051) 9281380 Wah Cantt. Main Double Road. Main Murree Road. Melody Services Block. Shahdara Road. PABX: (051) 9073000 Direct: (051) 9267278 Fax: (051) 9267280 F-11 Markaz Al-Karam Plaza. Blue Area. Islamabad Mobile: (0301) 8503993 (Sub-Branch) Federal Government Employees Housing Foundation (FGEHF) Plot no.O. Rawal Road. Islamabad. Islamabad. P. 1 to 3. Mini Plaza. Pindi Gheb Direct (057) 2352043 PABX: (057) 2352045 Fax: (057) 2352046 (Sub-Branch) Project Management Organization (PMO) Shop No.

Rawalpindi Direct: (051) 5388018 PABX: (051) 5487820-5 Allai 1st Floor.VIII Plot No. Rawalpindi Engineering in Chief (E in C Branch).A. Rawalpindi Mobile: (0300) 5143137 Peshawar Peshawar Cantt. Khan Road. Dadyal. 4. Islamabad DHA Mall. Gilgit Direct: (05811) 52021 Jhelum Plot No. Azad Kashmir PABX: (05827) 445450 . Road. Swat Opposite Park Hotel. Tehsil & Distt Nowshera Direct: (0321) 9762340 RWP II – AREA Rawalpindi Adyala Road Main Adyala Road. P. Phase – I. Swat. Kotli Road. 105. Head Quarter. Mingora. Box: 606. Al Haaj Tower. AJ&K PABX: (05827) 446502-03 Direct: (05827) 456607 Fax: (05827) 456605 Chashma Plot No. Main Bazar. PABX: (0459) 241667 Direct: (0459) 241544 Fax: (0459) 242761 Plot No.T. Mansehra Road. Distt Mianwali. Jinnah Avenue. Safari Valley. PABX: (0946) 713358-59 Direct: (0946) 713356 Fax: (0946) 713361 Chakwal Talagang Road. New Saadat Market. Chaksawari. Cantt Plaza. Faizabad. PABX: (0937) 9230501-02 Direct: (0937) 9230500 Fax: (0937) 9230503 AREA –AZAD KASHMIR Mirpur (Ak) Plot No. AJ&K PABX: (05822) 920480 & 920487 Direct: (05822) 920486 Fax: (05822) 920484 Gujar Khan B-III-360/1. Saidu Sharif Road. Murree Road. Kohinoor Plaza. PABX: (0513) 515671-74 Direct: (0513) 515905 Fax: (0513) 515676 Nowshera Taj Building. Road. 1 Bank Square. Ballo Khail Road.Annual Report | 2009 Kahota Research Laboratories (KRL). PABX: (0966) 720180-81 Direct: (0966) 720178 Fax: (0966) 720184 Mardan The Mall. Banna. Mianwali PABX: (0459)237903 – 4 Direct: (0459) 237901 Fax: (0459) 237905 (Sub-Branch) Al-Shifa Eye Trust Hospital Jhelum Road. Jabeer Tower. General Head Quarter (GHQ).T. Dera Ismail Khan. Linear Commercial. Nowshera. 561-31192 Direct: (051) 9271738 Fax: (051) 9271541 DHA. Peshawar PABX: (091) 9218587-90 Direct: (091) 9218594 Fax: (091) 9218591 (Sub-Branch) Risalpur Shop No. Cantt. Bank Square Nangi. University Road. Chowk Yadgar. 225 & 226. Near Khanna Pull. Rawalpindi Mobile: (0321) 5352519 (Sub-Branch) Bahria Town. PABX: (051) 5788693-94 Direct: (051) 5788691 Fax: (051) 5788695 PESHAWAR – AREA Abbottabad Lala Rukh Plaza. PABX: (0543) 553142-43 Direct: (0543) 551255 Fax: (0543) 601979 Muzafarabad (AK) Main Secretariat Road. Plaza Branch. 3-7. Jahangirabad. Bazar. 55 & 56. Box: 197. Chakwal. Rawalpindi. Rawalpindi Mobile: (0333) 5288280 (Sub-Branch) Engineering in Chief (E in C Branch). Chashma Barrage Colony. Airport Road. R. Gate No. PABX: (091) 9212433-6 Direct: (091) 271653 Fax: (091) 5276391 Peshawar City Bank Square. Risalpur Cantt. PABX: (051) 5948081-84 Direct: (051) 5948088 Fax: (051) 5948085 College Road College Road. 35. Peshawar. 106 & 107. Jatlan. Muzafarabad.T. PABX: (051) 5540234. Rawalpindi. Main G. Road. Old G. Mirpur.VIII. 5540516 Direct: (051) 5870131 Fax: (051) 5540321 General Headquarters (GHQ) Near Gate No. I. PABX: (091) 2561246-7 Direct: (091) 2560156 Fax: (091) 2561245 University Road Block B. G. Khan Chowk. Rawalpindi Mobile: (0333) 5115358 (Sub-Branch) Hamza Camp. Rawalpindi. P.Q. PABX: (0992) 332182-3 Direct: (0992) 332157 Fax: (0992) 332184 Dera Ismail Khan Kaif Gulbahar Building. ‘K’ Site. 629-B. Phase . Jhelum Cantt. Fakhr-e-Alam Road. Rawalpindi Hamza Camp (Inside Premises). Circular Road. PABX: (0544) 720053-55 Direct: (0544) 720051 Fax: (0544) 720060 page | 195 . Opposite PAEC Chashma Haripur Shahrah-e-Hazara. GHQ. Defence Housing Authority. PABX: (051) 9271739-40. 7. Allai Mobile: (0333) 5025995 Jatlan (AK) Main Bazar.2 Direct: (05827) 437060 Fax: (05827)443394 Mingora. (Morgah). Islamabad Highway. Mardan. Makaan Bagh.O. Bahria Town. AJ&K PABX: (05827) 454735-36 Direct: (05827) 45470 Fax: (05827) 454737 Mianwali Hospital Main D. Azad Kashmir PABX: (05827) 404346 – 47 Direct: (05827) 404351 Fax: (05827) 404348 Gilgit Main Bazar. Islamabad. Gujar Khan. PABX: (0923) 9220300-301 Direct: (0923) 9220302 Fax: (0923) 9220304 Dadyal (AK) City Centre. Abbottabad. A. Haripur PABX: (0995) 627128 – 32 Direct: (0995) 616506 Fax: (0995) 616508 Chaksawari (AK) Shahzad Hotel.O. Phase . GHQ. Peshawar.

Lahore. High Street Branch. PABX: (042) 5140520-22 Direct: (042) 5151279 Fax: (042) 5124222 CENTRAL REGION LAHORE-I – AREA Lahore D. Burewala. PABX: (042) 9231336-37. Kharian PABX: (053) 9240235-7 Direct: (053) 9240134 Fax: (053) 7536288 (Sub-Branch) Chowk Shaheedan. PABX: (044) 2881645 & 2880358 Direct: (044) 2881644 Fax: (044) 2881740 Depalpur Katchery Road. Lahore. Allama Iqbal Town. Zarar Shaheed Road. Lahore.V 41-CCA (Central commercial Area). College Road. 53-T. Guldasht Town. Main Multan Road. Near Qartaba Chowk. Direct: (042) 9231330 Fax:(042) 9230035 Main Market. (Shahrah-e-Quaid-e-Azam). Shahdara. Phase . Shahrah-e-Aiwan-e-Tijarat. PABX: (040) 447738-39 Direct: (040) 4467748 Fax: (040) 4467746 Burewala 95 / 1C. 324-Z. PABX: (042) 9203673-77 Direct: (042) 9203081 Fax: (042) 9203351 Bank Square. 5882099 & 5882048 Direct: (042) 5915494 Fax: (042) 5858564 Tufail Road 12-Tufail Road. 1193. M. Main Boulevard. 6260159 Direct: (042) 7604071 Fax: (042) 6264225 SAHIWAL – AREA Phool Nagar Plot Khasra No. Mirpur. PABX: (042) 5290434-36 Direct: (042) 5313566 Fax: (042) 5313569 Shah Alam Market 5-C. B-I.A. Lahore Cantt. Gulberg – II 32-E. PABX: (042) 9220940-46 Direct: (042) 9220930-31 Fax: (042) 9220947 Allama Iqbal Town 14 – Pak Block. Lahore. 51-B. Main G.Phase-II Plot No.Lahore. Badami Bagh. Lahore. Phase-II C. Mozang. Main Market. PABX: (042) 6651290-96 Direct: (042) 6666665 Fax: (042) 6660729 Zarar Shaheed Road 6. Phool Nagar. Lahore PABX: (042) 7211851-5 Direct: (042) 7314196. Gulberg-III. Mirpur Plot No. Okara Cantt. Block G-III. Block – B.V.Askari Bank Limited Branch Network Kharian Raza Building. The Mall 47. Baghbanpura. Faqir Plaza. PABX: (042) 7635920-22 Direct: (042) 7633694.H. Chak No. Lahore PABX: (042) 5787144 – 46 Direct: (042) 5787141 Fax: (042) 57871433 Qartaba Chowk 100-D. PABX: (042) 7642652-54 Direct: (042) 7642650 Fax: (042) 7642656 Shahrah-E-Aiwan-E-Tijarat 7-A. PABX:(044) 9200317-18 Direct: (044) 2550002 Fax: (044) 9200316 Okara Cantt 117 – D. Shalimar Link Road. Gulberg-II. Azad Kashmir Direct: (05827) 435247 PABX: (05827) 435248 Fax: (05827) 435429 Gulberg 10-E/II. Lahore. Lahore PABX: (042) 5898891-5 Direct: (042) 5726818 Fax: (042) 5732310 D. Defence Housing Authority. Lahore. Opposite Rustom Sohrab Cycle Factory. Defence Housing Authority. Shahrah-e-Quaid-e-Azam. Block CCA. Cavalry Ground. Shah Alam Market.A. Jinnah Road. Lahore PABX: (042) 7247762 Direct: (042) 7247771 Fax: (042) 7247766 Township 48/10.T. Lahore. Lahore. Lahore. Model Town. Lahore PABX: (042) 7314505 Direct: (042) 7314502 Fax: (042) 7314555 M. Wassanpura. Distt.A. Depalpur. PABX: (042) 5707558-59 Direct: (042) 5707556 Fax: (042) 5707563 DHA Phase .A. PABX: (067) 3772206-8 Direct: (067) 3772252 Fax: (067) 3772204 .H. 7709873-74 Direct: (042) 7731000 Fax: (042) 7700517 Shahdara N-127R-70C. PABX: (049) 510437 Direct: (049) 510431 Fax: (049) 510436 OKARA M. Bank Square. Road. Township. Okara PABX: (0444) 541543 – 4 Direct: (0444) 541541 Fax: (0444) 541545 Sahiwal 48/B & B1. Johar Town 473.A. Sheikupura Road. Kasur. Umar Din Road. 7633702 Fax: (042) 7635919 Ravi Road 35-Main Ravi Road Lahore. Central Commercial Market. Civil Area. Nathia Building. Johar Town. Commercial Area. Distt. Lahore Cantt PABX: (042) 6183097 Direct: (042) 6183095 Fax: (042) 6183099 Model Town 2-4. Chowk Shaheedan. 2/42. Lahore. DHA. PABX: (042) 7849926-27 Direct: (042) 7849847 Fax: (042) 7849854 Cavalry Ground 23. Shad Bagh Lahore PABX: (042) 7289430. Fawara Chowk. Akbar Chowk. M. Lahore PABX: (042) 6632943 – 45 Direct: (042) 6632941 Fax: (042) 6632950 page | 196 LAHORE-II – AREA Lahore Badami Bagh 165-B. PABX: (042) 7727601-2 Direct: (042) 7721318 Fax: (042) 7704775 Baghbanpura 6/7. PABX: (042) 7919302-04 Direct: (042) 7919300 Fax:(042) 7919306 Shad Bagh Chowk Nakhuda. 7211860 Fax: (042) 7211865 Urdu Bazar 6 – Chatterjee Road. Lytton Road. Tehsil & District Okara. PABX: (042) 5850575-76. Sahiwal. PABX: (042) 6830361-63 Direct: (042) 6830360 Fax: (042) 6830367 Circular Road 7-Circular Road. 7285343.A Jinnah Road. PAB X: (042) 7700516. The Mall. Urdu Bazar.

PABX: (056) 3788031 & 3788071 Direct: (056) 3788037 Fax: (056) 3788084 Chiniot Chah Dargahi Wala. 23. Dera Ghazi Khan Direct: (064) 2474002 PABX: (064) 2474004 Fax: (064) 2474003 Sargodha 80-Club Road. Layyah PABX: (0606) 380112 – 3 Direct: (0606) 372321 Fax: (0606) 380114 (Sub-Branch) Shop No. Distt.72. Road G. Near Multan Law College. Main Lahore-Sargodha Road. PABX: (061) 9201391-94 Direct: (061) 9201399 Fax: (061) 9201395 Bosan Road Plot No. B-IX-6S-44. Khurrianwala. Sheikhupura. PABX: (041) 8739326-7 Direct: (041) 8739323 Fax: (041) 8739321 University Road University Road. Distt. Satayana Road. Sadiqabad. 1 . Sargodha. 02. PABX: (065) 9200274-76. Quaid-e-Azam Avenue. 386 Direct: (0546) 600728 Fax: (0546) 600387 Bhalwal Main Bhalwal Road. Road. Gujranwala. District Bahawalpur PABX: (062) 2783008 – 9 Direct: (062) 2783444 Mandi Bahauddin Dr. Faisalabad. Rahim Yar Khan. 9200271 Direct: (065) 9200277 Fax: (065) 9200273 Gujrat Hassan Plaza. PABX: (062) 9255320-22 Direct: (062) 9255325 Fax: (062) 9255324 Khanewal DAHA Plaza Chowk Markazi. Box 346. Lalamusa PABX: (0537) 519690 –91 Direct: (0537) 519694 Fax: (0537) 519693 page | 197 . PABX: (041) 9201008-11 Direct: (041) 9201001 Fax: (041) 9201006 Satayana Road 585 – I.T.T. Karkhana Bazar. Road. PABX: (048) 3725490. Bhalwal PABX: (048) 6644695 – 6 Direct: (048) 6644693 Fax: (048) 6644697 Hasilpur Baldia Road. E Block. Old Civil Lines.Annual Report | 2009 Vehari 13. Channi Goth. Peoples Colony # 1. Multan. Block B. Dijkot. Dera Ghazi Khan Cantt. Khanewal. PABX: (0462) 516120 – 1 Direct: (0462) 516131 Fax: (0462) 516142 GUJRANWALA – AREA Gujranwala G. Bahawalpur. 7610852 Direct: (047) 7623652 Fax: (047) 7621050 Dijkot Chak No. New Town. 266 RB. Vehari. PABX: (055) 3865371 . PABX: (047) 7621150. Sakina Rizvi Road. Faisalabad. PABX: (067) 3366718 . Saddar. Faisalabad PABX: (041) 2672286 Direct: (041) 26722852 Fax: (041) 2672288 Layyah Chowk Azam. Faisalabad Road. Chowk Azam. PABX: (055) 9200855-56. Tehsil Ahmedpur East. Tehsil Kamalia District Toba Tek Singh PABX: (0463) 3366282 Direct: (0463) 3366280 Fax: (0463) 3366284 Dera Ghazi Khan Jampur Road. Pir Mahal. PABX: (053) 3530164-5 Direct: (053) 3530178 Fax: (053) 3530179 Rahim Yar Khan Ashraf Complex. Hasilpur PABX: (062) 2448030 Direct: (062) 2448002 Fax: (062) 2448035 Lalamusa G. Jhang. PABX: (0547) 501013-14 Direct: (0547) 501012 Fax: (0547) 501015 Sadiqabad 78-D. Direct: (055) 3865988 Fax: (055) 3865994 Faisalabad Khurrianwala Jhumra Road. Model Town. Mandi Bahauddin. G. PABX: (068) 5879851-53 Direct: (068) 5879848 Fax: (068) 5879850 Jalalpur Bhattian Ghala Mandi.T. Faisalabad PABX: (041) 8559205 Direct: (041) 8559101 Fax: (041) 8559103 Bahawalpur 1-Noor Mahal Road.O. Allama Iqbal Road. Chiniot PABX: (0476) 6336377 – 8 Direct: (0476) 6336277 Fax: (0476) 6336279 Channi Goth Uch Road. Dera Ghazi Khan PABX: (064) 9260669 – 70 Direct: (064) 9260675 Fax: (064) 9260674 FAISALABAD . Abdali Road. (055) 9200861-62 Direct: (055) 9200857 Fax: (055) 9200858 Gujranwala Cantt Kent Plaza. Jalalpur Bhattian.. Jhang Road. Tehsil & Distt. Gujrat. Toba Tek Singh. Bosan Road. Distt.AREA Jhang Church Road. PABX: (068) 5802377-78 Direct: (068) 5802387 Fax: (068) 5802374 Sheikhupura Property No. Chiniot No. Direct: (041) 4000029 Fax: (041) 4364030 Peoples Colony Peoples Colony. Road. Tehsil Jaranwala.9 Direct: (067) 3360727 Fax: (067) 3366720 Pir Mahal Kitta # 3. 3725590 Direct: (048) 3722728 Fax: (048) 3725240 MULTAN – AREA Multan Abdali Road 64/A-1.2. Gujranwala Cantt. Multan. PABX: (0546) 600385. PABX: (061) 6510435-37 Direct: (061) 6510434 Fax: (061) 6510438 Toba Tek Singh 596 – Mohallah Chamra Mandi. Main Shopping Complex. P. Faisalabad. Layyah Mohallah Awan Colony.T.

Karachi PABX: (021) 2474851-55 Direct: (021) 2473498 Fax: (021) 2471224 M. RB-7. Karachi. . DHA Phase – IV. Bismillah Chowrangi. 1. Karachi. Direct: (052) 4299005 Fax: (052) 4299004 Sialkot City Paris Road. Al-Siraj Square. Sector No. Federal B Area. PABX: (021) 9232565-68 Direct: (021) 9232569 Fax: (021) 9232574 Federal B Area Plot No. 14. Jinnah Road. PABX: (021) 5115024-26 Direct: (021) 5115020 Fax: (021) 5115027 Saddar Sindh Small Industries Building. Badar Commercial Area. Sector Pakistan Tanners Association. Defence Housing Authority. PABX: (021) 4491603 – 7 Direct: (021) 4491601 Fax: (021) 4491609 Marston Road Shafiq Shopping Plaza.I. Khayaban-eSehar. 5651046. DHA Phase – VII. ST 2/3. (DHA). 36 E. PABX: (021) 5049330 – 31 Direct: (021) 5049210 Fax: (021) 5049352 Khayban-e-Bokhari. Area 5 D. Serai Quarter. PABX: (021) 2745722-4 Direct: (021) 2745772 Fax: (021) 2745644 page | 198 .81.75500. PABX No. Sehar Lane No. (021) 2624316. Fatima Jinnah Road. PABX: (021) 2770784-85. PABX: (021) 5344175-77 Direct: (021) 5344171 Fax: (021) 5344174 Clifton Marine Trade Centre. Karachi. Karachi. Block No. Sheet No. PABX: (021) 2418425-28 Direct: (021) 2418412 Fax: (021) 2418420 New Challi Abdullah Square Building.T. . 5847012 – 1.O. Phase-V. Marriot Road. Karachi. Gujranwala Road. Daska. Korangi Industrial Area. PABX: (021) 5242747 – 50 Direct: (021) 5242745 Fax: (021) 5242754 (Sub-Branch) PTA. Kamonkey PABX: (055) 6816080. 2741396-7 Direct: (021) 2760506 Fax: (021) 2760992 KARACHI-III – AREA Karachi Atrium Mall 249. Khayaban-e-Bokhari. Karachi. PABX: (021) 5868551-4 & 5832916 Direct: (021) 5862868 Fax: (021) 5868555 Khayaban-e-Ittehahad. 25 – C. DHA. Sialkot Cantt.Askari Bank Limited Branch Network Kamonkey G. Box 2890. Karachi.82 Direct: (055) 6816078 Fax: (055) 6816083 Saima Trade Tower I. PABX: (021) 5387491 – 2 (021) 5384902 – 5 Direct: (021) 5387493 Fax: (021) 5387814 Korangi Industrial Area Plot No. Karachi. Karachi.A. Distt. 2634610 Direct: (021) 2624714. Karachi . Saddar. 5847251 –52 Direct: (021) 5847446 Fax: (021) 5847022 DHA Phase – IV 9th Commercial Street. Karachi Direct: (021) 5116120 Fax: (021) 5116121 Sialkot Sialkot Cantt Tariq Road. PABX: (021) 2471042-44 Direct: (021) 2471021 Fax: (021) 2471023 North Napier Road Ishaq Chamber. 06. M. Street No. PABX: (021) 5313055 – 58 Direct: (021) 5313091 Fax: (021) 5313059 Bismillah Chowrangi. Sialkot PABX: (052) 6615815 Direct: (052) 6613634 Fax: (052) 6615842 SOUTH REGION KARACHI-I – AREA Karachi Cloth Market Laxmidas Street.Khayaban-e-Ittehad.Regal Chowk. Jodia Bazar. Clifton.2446053-54 Direct: (021) 2446550 Fax: (021) 2446559 Paper Market Plot No. PABX: (021) 2472611-5 Direct: (021) 2472607 Fax: (021) 2472605 Jodia Bazar Abdullah Mansion. Shahrah-e-Liaquat. 3. PABX: (052) 4262806-08 Direct: (052) 4265522 Fax: (052) 4299004 Daska Rest House Chowk. Frere Road. Korangi R – 01. Korangi ST: 7. 4. PABX: (021) 2630731-3. Karachi. P. Block-9. P.O. Karachi PABX: (021) 5847239 –41. DHA Phase – VI 43 – C.Staff Lines. Karachi. 5651091 Direct: (021) 5650940 Fax: (021) 5651207 Bahadurabad Zeenat Terrace. LA-7/116. Timber Market. Sector 23. Box 1096. Bahadurabad. P. Phase – II Extension. Korangi No. Aram Bagh Quarters. 2770737 Direct: (021) 2770800 Fax: (021) 2770055 Karachi Stock Exchange Office No. Block No. Road. 21. Karachi PABX: (021) 2446050-51. PABX: (021) 2549581-2 Direct: (021) 2549588 Fax: (021) 2549585 KARACHI-II – AREA Karachi Badar Commercial Area 29-C. Bahaduryar Jang Society.O. Bombay Bazar. New Challi. Karachi. PABX: (021) 2762840-2. Marston Road. Chundrigar Road. Karachi. Old Stock Exchange Building. Sialkot. Karachi. 55 & 56. ST-2/B. Box 13807. 2C. Main Korangi Road. DHA Plot No. Karachi. Lawrence Quarters. (021) 6806091-92 Direct (021) 6806152 Fax: (021) 6806095 Malir Cantt. PABX: (021) 5650953. Karachi. PABX: (052) 4299001-03. PABX: (021) 2217531-34 Direct: (021) 2217490 Fax: (021) 2217494 Marriot Road Rawalpindiwala Building. North Napier Road. Malir Cantt. Jinnah Road Survey No. Korangi Industrial Area. Market Quarters. Karachi PABX: (021) 2600909 – 11 Direct: (021) 2600901 Fax: (021) 2600912 Khayaban-e-Sehar Plot No. Siddiq Wahab Road. Shahrah-e-Liaquat. Karachi. Karachi. 04. 2631178 Fax: (021) 2631176 Timber Market Plot No. 7 – A. DHA Phase – VI. Karachi.A. (021) 5651048.

S.T. Manghopir. S. PABX: (074) 4053823-24.H. 6697208. FL-3/TH-8. Tower Road. Larkana.O Box 470. Gulshan-e-Iqbal. 6693844. Main Tariq Road. Karachi. Block-E. Ward B.S Commercial Area. Karachi. Ranchore Line. Karachi. B-17. Box: 75290. Sector 11/C-1. Karachi PABX: (021) 5315725 – 27 Direct: (021) 5315729 Fax: (021) 5315728 (Sub-Branch) SBTE. Store Ganj. Karachi.Annual Report | 2009 Shaheed-e-Millat A/22. Katachery Road.C. 138. Direct: (021) 4301887 Fax: (021) 4301896 Makro Saddar 148/1.C. Karachi PABX: (021) 6950332 Direct: (021) 6950335 Fax: (021) 6950333 Gulistan-e-Jauhar Asia Pacific Trade Centre. Karachi.E. Nawabshah. Karachi PABX: (021) 4834082 – 88 Direct: (021) 4834080 Fax: (021) 4834089 Nagan Chowrangi R – 429. PABX: (021) 4632500-04 Direct: (021) 4630166 Fax: (021) 4632505 Gulshan-e-Iqbal University Road.I. Qadirpur Road. Bohra Pir. PABX: (021) 4520026-9 Direct: (021) 4526641 Fax: (021) 4520030 Tariq Road Plot No. Karachi PABX: (021) 6950020 – 25 Direct: (021) 6950015 Fax: (021) 6950026 (Sub-Branch) Stadium Road. 2611/1&2611/2 Shahrah-e-Noor Muhammad Market. Sukkur. Indus Institute of Higher Education. Islamia Colony No. 835. Guslhan-e-Iqbal Plot No. P. North Nazimabad. K. Distt. Block . PABX: (021) 9244365-69 Direct: (021) 9244361 Fax: (021) 9244370 Sukkur Sarafa Bazar. Gulshan Chowrangi. Gulshan-eIqbal. Mullah New Goth. C. Gulshan-e-Iqbal. Sindh Board of Technical Education (SBTE). Estate Avenue. Khairpur PABX: (0243) 553913 – 4 Direct: (0243) 715903 Fax: (0243) 553915 Ghotki Plot No. Circular Road. PABX: (0233) 9209031-32 Direct: (0233) 9290333 Fax: (0233) 9290335 Nawabshah Katchary Road. Jinnah Road. KDA Scheme – 24. Gulshan-e-Iqbal Plot No. 5F/14-18. P. Progressive Square. Zafar Bazar. Main Road.H. Street No. P. Rashid Minhas Road. Block 6. Karachi. Karachi Plot No. Kandhkot PABX: (0722) 572361 & 572367 Direct: (0722) 571644 Fax: (0722) 573788 Larkana Bunder Road. Ward “B”. PABX: (0723) 600500 Direct: (0723) 600707 Fax: (0723) 600526 Shikarpur Plot No. No. Hyderabad. PABX: (021) 2744768-69 Direct (021) 2745961 Fax: (021) 2744779 Gabol Town Plot No. Mubarak Shaheed Road. Princess Street. 1. Opposite Town Committee. 2. Karachi PABX: (021) 4301888-95. Shikarpur PABX: (0726) 513258 – 9 Direct: (0726) 513261 Fax: (0726) 513260 Hyderabad Saddar 332-333. Direct: (021) 6693385 Fax: (021) 6668209 Gulshan Chowrangi. Karachi PABX: (021) 2792473 – 79 Direct: (021) 2792471 Fax: (021) 2792480 Mehmoodabad Plot No.O. North Karachi Township. Mehmoodabad. Block No.S. P. 1610/12.E. D-9. PABX: (021) 4392875-76 & 4392887 Direct: (021) 4392850 Fax: (021) 4392886 Shahrah-e-Faisal 11-A. Jacobabad. (022) 2784852. Sector 12-B.AREA Daharki 1276. 4.E. Gulshan-e-Iqbal. Opposite 603 Workshop. 299 – C & 300 – C. M. 2783618. Hyderabad PABX: (022) 2784852. Mirpurkhas. 2783615 Direct: (022) 2783615 Fax: (022) 2784760 page | 199 . Karachi Direct: (021)34974260 Fax: (021) 34974261 Shahrah-e-Noor Muhammad Market. Tando Allahyar PABX: (022) 3899223 – 26 Direct: (022) 3892963 Fax: (022) 3892962 Khairpur Plot No. Karachi. C. PABX: (021) 6762532-5 Direct: (021) 6762541 Fax: (021) 6762527 S. Quaid-e-Azam Road.A. Karachi PABX: (021) 6661654. Block – 3.S. North Karachi Industrial Area. Al Burhan Arcade. Block No.17. Karachi Direct: (021) 34974230 Fax: (021) 34974239 Hydri North Nazimabad Plot No.H. Qaimabad. Ghotki.C. Metroville. Block-6. 2783615 Direct: (022) 2613192 Fax: (022) 2613193 Jacobabad Ward No.S. Anum Pride. 29/1. Saddar. Allama Shabir Ahmed Usmani Road. 1. (074) 4045381-2 Direct: (074) 4053676 Fax: (074) 4045371 Mirpurkhas C. Barkat-e-Hydri. Ghotki.T. 1045. Nos. PABX: (0722) 651866 – 67 Direct: (0722) 652266 Fax: (0722) 650344 Kandhkot Plot No. B -265 (T-342-A). 46.I. ST-22. 22/1. Daharki. Main Shaheed-e-Millat Road. Karachi. Deh Odher Wali.E. Block – 3. 7 & 8. PABX: (021) 6632904-6 Direct: (021) 6632920 Fax: (021) 6632922 Metroville G-50. PABX: (0723) 641266 Direct: (0723) 642626 Fax: (0723) 42260 Tando Allahyar City Survey No. ST-2D. PABX: (071) 5628267-8 Direct: (071) 5627218 Fax: (071) 5627219 HYDERABAD . Saddar Bazar. PABX: (022) 2783616. PABX: (0244) 9370460-64 Direct: (0244) 9370466 Fax: (0244) 9370467 KARACHI-IV – AREA Karachi Bohra Pir Plot No. ST – 2. 5/137/1. 05. PABX: (021) 2585914-17 Direct: (021) 2585911 Fax: (021) 2585525 Manghopir Plot No.S..

PABX: (081) 2843751-2 Direct: (081) 2844374 Fax: (081) 2824602 Masjid Road Cut Piece Gali No.Manama Kingdom of Bahrain. 9291096 PABX: (051) 9291091-4 Fax: (051) 9291097 Bank Road Plot No. Direct: (051) 5120240 PABX: (051) 5120243-4 Fax: (051) 5120241 Lahore Circular Road Near Ram Gali. 01. Petaro Pak Camp. Petaro. Shop No. Chiltan Road. F-10 Markaz. Razia Sharif Plaza. Satellite Town. Hyderabad Direct: (022)2730961 PABX: (022) 2730962 Fax: (022) 2730970 Gawadar Airport Road. Bahria Complex III.T. Chandani Chowk. Amber Plaza. SMCHS. Lahore Direct: (042) 37379301 PABX: (042) 37379303 – 9 Fax: (042) 37379310 Gulberg Plot no. Bank Road. Karachi Direct: (021) 35823377 PABX: (021) 358296252-3 Fax: (021) 35823379 QUETTA – AREA Quetta Cantt. (021) 36640122 Fax: (021) 6641390 DHA 106 – C. Abdullah Haroon Road. 5 – B.O. Direct: (051) 9291095. Jinnah Road. Meezan Chowk. Karachi. Moulvi Tamizuddin Road. Rawalpindi. (081) 2882105 Fax: (081) 2882100 Hazar Ganji Fruit Market. Karachi Direct: (021) 4544948 PABX: (021) 34544949-50 Fax: (021) 4544953 Abdullah Haroon Road. Plot No. Pakistan Defence Officers Housing Authority. Quetta.99 Direct: (051) 2273591 Fax: (051) 2273162 Overseas Operations Bahrain “Wholesale Bank (Branch)” P. Direct: (021) 2421145. Circular Road.A. Cloth Market. 3. PABX: (081) 2451535-36 Direct: (081) 2451530 Fax: (081) 2451538 Samungly Road Plot No. 90-93. Tufail Road. Quetta Cantt. Near EFU Building. PABX: (081) 2668386-87 Direct: (081) 2665985 Fax: (081) 2668389 Satellite Town Kasi Plaza. Box 11720. Lahore PABX: (042) 6622491 –95 Direct: (042) 6622481 Fax: (042) 6622490 Islamabad Razia Sharif Plaza. Saddar. Jinnah Avenue.Askari Bank Limited Branch Network Pak Camp. Tehsil Kotri. Plot No.E. Saddar. Samungly Road. Blue Area. S. Ground Floor. Clifton. Jail Road. Mehran Heights Blocks-8. Quetta. Sirki Road. Main Risala Road. Karachi Direct: (021) 35311813 PABX: (021) 35311788-9 Fax: (021) 35311790 S. Jinnah Road M. North Nazimabad.I. Islamabad. Karachi PABX: (021) 5615289-96 Direct: (021) 5615306 Fax: (021) 5615298 Karachi Jodia Bazar Buidling MR-3/30. 24. Phase VII. Diplomatic Area. PABX: (0864) 211359-60 Direct: (0864) 211357 Fax: (0864) 211358 Rawalpindi Chandani Chowk 149-B. District Jamshoro Mobile: (0300) 3033226 Corporate Banking Karachi Bahria Complex III. Islamabad Direct: (051) 2111902 PABX: (051) 2111904-5 Fax: (051) 2111839 Chaman Trunch Road. KDA Scheme # 5. D-5. 5. Karachi Plot No. Crossing Shahrah-e-Faisal.T. Lahore 172. Blue Area. Ground Floor. Plot No. Jinnah Avenue. Lahore Direct: (042) 99263393 PABX: (042) 99263416 – 20 Fax: (042) 99263420 page | 200 . 7. E-2. Chaman. 13 & 14. PABX: (081) 2882101-102 Direct. 1/F. 5. (Balochistan). Karachi Direct: (021) 2551112 PABX: (021) 32551115-7 Fax: (021) 2551114 (Sub-Branch) Shahrah-e-Faisal Shop No.87300. Gawadar. Bolan Complex. Shop No. Karachi Direct: (021) 32711500 PABX: (021) 32711506-7 Fax: (021) 32711502 Clifton Branch Shop No. Quetta. Block – L. Islamabad PABX: (051) 2273596 . 7. Hazar Ganji. Murree Road. PABX: (081) 2824008-09 Direct: (081) 2824004 Fax: (081) 2845227 Meezan Chowk Liaqat Bazar. Qazi Usman Road. Tel: (00973) 17530500 Direct: (00973) 17535439 Fax: (00973) 17532400 Islamic Banking Branches Islamabad Jinnah Avenue 38 – Zahoor Plaza. Karachi Direct: (021) 6640972 PABX: (021) 6646356. 2421146 PABX: (021) 2410025-29 Fax: (021) 2421147 North Nazimabad Plot No.A. 1 to 5. Islamabad Plot No. PABX: (081) 2460808 Direct: (081) 2460806 Fax: (081) 2460807 M. 110. Direct: (051) 9211467 PABX: (051) 9211469-74 Fax: (051) 9211476 (Sub-Branch) F – 10 Markaz Unit No. Jami Commercial Street – 11. Quetta . Night Star Complex.I. Quetta. Estate Avenue. Main Gulberg. Block ‘A’. Park Lane Towers. Quetta. Off Mall Road. Main Double Road. PABX: (081) 2870086 Fax: (081) 2870104 Lahore Park Lane Towers. 1-W. Near Lal Masjid. PABX: (0826) 613330 Direct: (0826) 614447 Fax: (0826) 613331 Hyderabad Main Risala Road F-73 & 74. Rawalpindi.E Shop No. Blue Area.

Peshawar. MashAllah Centre. Johar Town Plot No. Road. KCB-III/ 12. Block – D. Dehli Gate. Direct: (091) 2244320 PABX: (091) 2244322 –23 Fax: (091) 2583729 Sialkot Paris Road Sharif Plaza.A. Square No. Road. Khan Centre. 33& 34. Ground Floor.M. Gujranwala Direct: (055) 9201344.T Road Sambrial. Bhimer Road. Phase – 3C.KCB-III/12-A & KCB-III/12-F.Annual Report | 2009 DHA 155. Paris Road. G.T.Sahowala. Jaranwala Road. 1-2. Murad Khan Plaza. Cantt. Plaza. Direct: (053) 3609604 PABX: (053) 3609601-2 Fax: (053) 3609603 Kohat Plot No. Quetta.993/576. Defence Housing Authority. KCB-III/10. Faisal Town. Bano Road. Sambrial Plot No. C-11.F-1080. Lahore Direct: (042) 5221751 PABX: (042) 5221756 – 57 Fax: (042) 5221758 Azam Cloth Market Plot No. Dist.A. Direct: (042) 99264238 PABX: (042) 9926423-5 Fax: (042) 5692729 Peco Road Plot No. Road BXII-7S-III. Road. Near Dr. Shahrah-e-Iqbal Quetta. Faisalabad Direct: (041) 9220620 PABX: (041) 9220623 – 29 Fax: (041) 9220622 Peshawar Peshawar Cantt.T. Direct: (081) 2826124 PABX: (081) 2826041-42 Fax: (081) 2826125 Multan Abdali Road Shop No. F-1079. Peshawar. Jinnah Road 2-14/2-3. Mansehra Road. Kohat Direct: (0922) 510191 PABX: (0922) 510914-15 Fax: (0922) 510912 Abbottabad Mansehra Road. Peshawar.T. PABX: (091) 9213740-41 Direct: (091) 9213743 Fax: (091) 9213742 G. Direct: (091) 2261609 PABX: (091) 2261655 – 56 Fax: (091) 2261654 Dalazak Road. 64. 875. 9201348 PABX: (055) 9201345 – 46 Fax: (055) 9201347 Faisalabad Kohinoor City Plot No. Block – R-1. Road. Lahore Cantt.T. Block Y. Lahore Direct: (042) 37630928 PABX: (042) 37630925-28 Fax: (042) 37630910 M. 77. Daily Aaj Building. Johar Town. Fakhr-e-Alam Road. Sialkot Direct: (052) 9250161 PABX:(052) 9250163-65 Fax: (052) 9250164 G. Jinnah Road. G. Gujrat. Opposite Tailu Mandi. Direct: (0992) 336202 PABX: (0992) 336262-3 Fax: (0992) 336261 Quetta M. Lahore Direct: (042) 35315621 PABX: (042) 35315624-5 Fax: (042) 35315627 Qandhari Bazar Qandhari Bazar. Abbottabad. G. Near Din Plaza. BI-847.A. Adjacent to Ahmed Complex. Sialkot.A. 2820927 PABX: (081) 2820922-23 Fax: (081) 2820943 page | 201 . Supply Bazar. Multan Direct: (061) 4500262 PABX: (061) 4500263 – 7 Fax: (061) 4783093 Gujranwala G. Dalazak Road. Peco Road. M. Abdali Road. Hangu Road. Peshwar Khasra No. Direct: (052) 6522820 PABX: (052) 6522822-23 Fax: (052) 6522825 Gujrat Bhimber Road. Kohinoor City. Abbottabad Lodhi Golden Tower. Gujrat Opposite UBL. Direct: (081) 2820910. Opposite Azam Cloth Market.T. Peshwar Ground Floor.

772 795.688 1.227 5.225 85.219.033 135.999 56.996.584.072 4.980 12.987 886.378.467 7.970.446 16.055 1.net of tax Bills payable Borrowings Deposits and other accounts Sub-ordinated loans Liabilities against assets subject to finance lease Deferred tax liabilities Other liabilities 2.327.945.377 2.839 163.141 308.313 96.967 229.572 2.932 3.0985 as at December 31.151 11. 2009.267 10.458 – 8.100 – 12.190.455 32. 2009 2009 US $ in ‘000 2008 2009 Rupees in ‘000 2008 Assets 230. 84.138 60.759.606.444.833.987 4.670 19.884 – 119.182.895 936. page | 202 .964.036.140 193.468 12.Askari Bank Limited Statement of Financial Position in US$ As at December 31.676.034.374 14.818.489 239.163 205.971.041 2.333 2.058.480 206.025 202.137 3. 2008).828 15. (1US$ = Pak Rs.266.990 Net assets Represented by Share capital Reserves Unappropriated profit Surplus on revaluation of assets .442.570 177.2416 as at December 31.764 Liabilities 34.654 49.443 177.289 54.841.385.046.774 7.806.261 4.384 14.635 3.994 71.300.479.949.499 9.029.191.242 8.679 192.754 35.954.878 1.775 12.990 5.148 167.628.455 51.964 57.667.994.878 – 164 60.520 156.073.234 13.163 – 3.755 128.774 163.019.846.580 104.311 254.363 Cash and balances with treasury banks Balances with other banks Lendings to financial institutions Investments Advances Operating fixed assets Deferred tax assets Other assets 19.440 – 10.602.508 – 113.635 451.142.900 – 333. 79.677.119.949.167 2.814 4.943 116.906 152.105 2.012 21.614.364.363 Note: The above is for information only and conversion have been made @ 1US$ = Pak Rs.845 37.971.072 2.925 4.122 99.059 67.843 8.034.

673 1.621 873.325 102.382 – 461.658 2. 2009 2009 US $ in ‘000 2008 2009 Rupees in ‘000 2008 269.701 8.US $ / Rupees Administrative expenses Other provisions / write offs Other charges Total non-markup / interest expenses Extra ordinary / unusual items PROFIT BEFORE TAXATION Taxation – current – prior years’ – deferred 6.997 Non mark-up/interest expenses 83.169 459 10.751) 6.030.788 5.117 911 981 – 34.2416 as at December 31.893 18.338 34.127 51.045 – 408 83.195 11.096 9.035 0.Annual Report | 2009 Profit and Loss Account in US$ For the year ended December 31.672.621 Fee.225 1.918) 404.793 308. page | 203 .099 119. commission and brokerage income Dividend income Income from dealing in foreign currencies Gain on sale of investments .221 2.754 13.827 (147.393.117.523 1.422 (1.947 15.987 5.363 951 4.899 2.416.810 2.000 6.706 – (23) 4.915.584 173.980 1.072.833 220 (632) 1.914.784 82.377 431.453 19.488 46.344 13.net Other income Total non mark-up / interest income 1.494 – 19.669.668 16.882 27.707.778 – 508 – 247.601 72.307.537 538.743 – 22.76 Note: The above is for information only and coversion have been made @ 1US$ = Pak Rs.058 76.622 232.144.466 1.18 5.531.824.651 97.01 PROFIT AFTER TAXATION Unappropriated profit brought forward Profit available for appropriation Basic / diluted earnings per share .886 48.009 161.382 17.445 143.592 5.448 1.043 465 – 283 4.674 – 2.661. 2009.642.355 – 6 – 3.773 2.629.478) 534.650.392 1.594 3.376.512 36. 79.384 343.717 – (1.798 30.107. 2008).699 162.257.786 107.157 386.368 7.311 4.904.241 562.0985 as at December 31. (1US$ = Pak Rs.324.597 3.313 10.116 31.net Unrealised (loss) / gain on revaluation of investments classified as held for trading . 84.03 74.857 – 34.225 2.818 0.998 0.643 6 139 74.000) 107.794 75.398 Mark-up / return / interest earned Mark-up / return / interest expensed Net mark-up / interest income Provision against non-performing loans and advances Impairment loss on available for sale investments Provision for impairment in the value of investments Provision against reverse repo Bad debts written off directly 22.150 3.765 15.223 80.833 – 5.719 7.742.929 6.494 6.995.363 (50.156 2.615 461.537 134.554.032.241 – 1.997 Net mark-up / interest income after provisions Non mark-up/interest income 6.223 27.642.

An abbreviation for Compound Annual Growth Rate. It is a process for converting a company’s reserves (in whole or part) into issued capital and hence does not involve an infusion of cash. The relationship between capital and risk weighted assets as defined in the framework developed by the State Bank of Pakistan. provided in the case of a non-financial variable that the variable is not specific to a party to the contract (sometimes called the ‘underlying’). on an importer overseas and brought by the exporter to this bank with a request to collect the proceeds. FORWARD EXCHANGE CONTRACT Credit facilities approved but not yet utilized by the client as at the Balance sheet date. EFFECTIVE TAX RATE Provision for taxation excluding deferred tax divided by the profit before taxation. COMMITMENT TO EXTEND CREDIT Commitments to extend credit are those commitments that are irrevocable because they cannot be withdrawn at the discretion of the bank without the risk of incurring significant penalty or expense. CONTINGENCIES BILLS FOR COLLECTION A condition or situation existing at Balance Sheet date where the outcome will be confirmed only by occurrence of one or more future events. It is concerned with the way in which power is exercised over the management and direction of entity. the supervision of executive actions and accountability to owners and others. financial instrument price. EQUITY METHOD CAPITAL ADEQUACY RATIO CAGR A method of accounting whereby the investment is initially recorded at cost and adjusted thereafter for the post acquisition change in the investor’s share of net assets of the investee. A contract whereby a lessor conveys to the lessee the right to use an asset for rent over an agreed period of time which is sufficient to amortise the capital outlay of the lessor. A bill of exchange drawn by the exporter usually at a term. COST / INCOME RATIO Operating expenses as a percentage of total income. page | 204 . EARNINGS PER SHARE Profit after taxation divided by the weighted average number of ordinary share in issue. GROSS DIVIDENDS The portion of profits distributed to the shareholders including the tax withheld. The process by which corporate entities are governed. and (c) it is settled at a future date. Agreement between two parties to exchange one currency for another at a future date at a rate agreed upon today. Sum set aside for tax in the Financial Statements that will become payable in a financial year other than the current financial year. commodity price. credit rating or credit index. foreign exchange rate. or other variable. DERIVATIVES COMMITMENT TO EXTEND CREDIT Derivative is a financial instrument or other contract which has the following characteristics: (a) its value changes in response to the change in a specified interest rate. ACCRUAL BASIS (b) it requires no initial net investment or an initial net investment that is smaller than would be required for other types of contracts that would be expected to have a similar response to changes in market factors. The lessor retains ownership of the asset but transfers substantially all the risks and rewards of ownership to the lessee. index of prices or rates. FINANCE LEASE DEFERRED TAXATION CASH EQUIVALENTS Short-term highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Recognizing the effects of transactions and other events when they occur without waiting for receipt or payment of cash or its equivalent. The Income Statement reflects the investor’s share of the results of operations of the investee.Askari Bank Limited Glossary of Financial & Banking Terms ACCEPTANCES Promise to pay created when the drawee of a time draft stamps or writes the words “accepted” above his signature and a designated payment date. BONUS ISSUE (SCRIP ISSUE) CORPORATE GOVERNANCE The issue of new shares to existing shareholders in proportion to their shareholdings.

Shareholders’ funds divided by the number of ordinary shares in issue. there is reasonable doubt regarding the collectability of principal or interest. PRICE EARNINGS RATIO (P/E RATIO) Reserves set aside for future distribution and investment.e Interest Income is only recognized when cash is received) because in the opinion of management. All loans are classified as non-performing when a payment is 3 months in arrears. INTEREST SPREAD Represents the difference between the average interest rate earned and the average interest rate paid on funds. REVERSE REPURCHASE AGREEMENT Transaction involving the purchase of securities by a bank or dealer and resale back to the seller at a future date and specified price. MARKET CAPITALISATION Number of ordinary shares in issue multiplied by the market value of share as at the year end. SUBSIDIARY COMPANY RELATED PARTIES NET ASSETS VALUE PER SHARE Parties where one party has the ability to control the other party or exercise significant influence over the other party in making financial and operating decisions. such that assets or income are not overstated and liabilities or expenses are not understated. The relative significance of a transaction or an event the omission or misstatement of which could influence the economic decisions of users of financial statements. A company is a subsidiary of another company if the parent company holds more than 50% of the nominal value of its equity capital or holds some share in it and controls the composition of its Board of Directors. less preference share dividends if any. Dividend net of withholding tax. NON PERFORMING LOANS REPURCHASE AGREEMENT INTEREST IN SUSPENSE Interest suspended on nonperforming loans and advances. advances and other credit facilities as a result of their becoming party or wholly uncollectible. STATUTORY RESERVE FUNDS A capital reserve created as per the provisions of the Banking Companies Ordinance. OFF BALANCE SHEET TRANSACTIONS Transactions that are not recognized as assets or liabilities in the balance sheet but which give rise to contingencies and commitments. treasury bills. Market price of a share divided by earnings per share. RISK WEIGHTED ASSETS On Balance Sheet assets and the credit equivalent of off balance sheet assets multiplied by the relevant risk weighting factors. RETURN ON AVERAGE EQUITY LIQUID ASSETS Assets that are held in cash or in a form that can be converted to cash readily. MATERIALITY Inclusion of a degree of caution in the exercise of judgment needed in making the estimates required under conditions of uncertainty. bills of exchange. HISTORICAL COST CONVENTION Recording transactions at the actual value received or paid. RETURN ON AVERAGE ASSETS NET DIVIDENDS Profit after tax divided by the average assets. A loan placed on cash basis (i. Contract to sell and subsequently repurchase securities at a specified date and price. Net profit for the year. such as deposits with other banks. page | 205 . SHAREHOLDERS’ FUNDS PRUDENCE Total of Issued and fully paid share capital and capital and revenue reserves. refinance funds and inter-bank borrowings. expressed as a percentage of average ordinary shareholders’ equity. Loans are automatically placed on cash basis when a payment is 3 months past due. NET INTEREST INCOME The difference between what a bank earns on assets such as loans and securities and what it pays on liabilities such as deposits.Annual Report | 2009 GUARANTEES An agreement involving a promise by a person (the guarantor) to fulfill the obligations of another person owning debt if that person fails to perform. 1962. REVENUE RESERVE LOAN LOSSES AND PROVISIONS Amount set aside against possible losses on loans.

2010 at 10 On March Complex Blue Lagoon ate of e Outward G Opposit awalpindi. ntal Hotel.Askari Bank Limited Notes AGM :00 am 30. R e Pearl Contin page | 206 .

page | 207 . with the Company Secretary.N. and more than one instrument of proxy are deposited by a member. who is not a member of the Bank except that Government of Pakistan / State Bank of Pakistan / corporate entity may appoint a person who is not a member. 1st Floor. Box No.C. and on my/our behalf at the Extra-ordinary General Meeting of the Bank to be held on Tuesday. Witnesses: Name: C. The Mall. General: A member entitled to attend and vote at the meeting is entitled to appoint a proxy to attend and vote for him/her.Annual Report | 2009 Form of Proxy Askari Bank Limited I / We of being member(s) of Askari Bank Limited (“the Bank”). together with Power of Attorney. Rawalpindi not less than 48 hours before the time of holding the meeting./Passport No. The instrument appointing a proxy should be signed by the member or his/her attorney duly authorized in writing.Revenue Stamp NOTES: A. The instrument appointing a proxy. Askari Bank Limited. do hereby of or failing him / her of . who is also member of the Bank. No. If a member appoints more than one proxy. as my/our proxy to vote for me/ us.O.m at Blue Lagoon Complex opposite outward gate of Pearl Continental Hotel Rawalpindi and at any adjournment thereof. 2010 at 10:00 a. As witness my / our hand this day of 2010. all such instruments of proxy shall be rendered invalid. March 30. should be deposited. 3. under which it is signed or a notarially certified copy thereof. if any. P. 1. holding appoint ordinary shares. No person shall act as a proxy.: Address: (Member’s signature on Rs. its common seal should be affixed on the instrument. 5/. AWT Plaza.I. 2. 4. 1084. If the member is a corporate entity (other than Government of Pakistan and State Bank of Pakistan).

page | 208 .Askari Bank Limited The Company Secretary: ASKARI BANK LIMITED AWT Plaza.Pakistan. Rawalpindi .O. P. Box No. The Mall. 1084.

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