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Corporate Information Notice of the 19th Annual General Meeting Directors‟ Report to the Shareholders Statement of Compliance with the Best Practices of the Code of Corporate Governance Review Report to the Members on Statement of Compliance with the Best Practices of the Code of Corporate Governance Statement on Internal Controls Auditors‟ Report to the Members Statement of Financial Position Profit and Loss Account Statement of Comprehensive Income Cash Flow Statement Statement of Changes in Equity Notes to and forming part of the Financial Statements Consolidated Financial Statements of Bank and its Subsidiary Company Pattern of Shareholding
Branch Network Form of Proxy

[ CORPORATE INFORMATION ]
Board of Directors H.H. Sheikh Hamdan Bin Mubarak Al Nahayan Chairman Mr. Abdulla Khalil Al Mutawa Mr. Abdulla Nasser Hawaileel Al-Mansoori Director Mr. Khalid Mana Saeed Al Otaiba Mr. Ikram Ul-Majeed Sehgal Mr. Nadeem Iqbal Sheikh Mr. Sirajuddin Aziz Chief Executive Officer Board Audit Committee Mr. Abdulla Khalil Al Mutawa Mr. Khalid Mana Saeed Al Otaiba Mr. Nadeem Iqbal Sheikh Mr. Yasar Rashid Board Credit, Finance and HR Committee Mr. Abdulla Khalil Al Mutawa Mr. Khalid Mana Saeed Al Otaiba Mr. Nadeem Iqbal Sheikh Mr. M. Iftikhar Shabbir Board Risk Management Committee Mr. Khalid Mana Saeed Al Otaiba Mr. Abdulla Khalil Al Mutawa Mr. Ikram-ul-Majeed Sehgal Mr. Haroon Khalid Auditors Director Director Director Secretary Mr. Hamid Ashraf Director Director Director Secretary Director Director Director Secretary Mr. Sirajuddin Aziz Director Mr. Mohammad Yousuf Director Director Director Mr. Talib Rizvi

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Noticeofthe19th AnnualGeneralMeeting
NOTICE is hereby given that the 19th Annual General Meeting of Bank Alfalah Limited will be held on Monday, 28th March 2011 at

11:00 AM at Ballroom "A", Pearl Continental Hotel, Karachi, to transact the following businesses: Ordinary Business: 1.
2.

To confirm the Minutes of the 18th Annual General Meeting held on 14th April 2010.
To receive, consider and adopt the audited Annual Accounts and Consolidated Accounts of the Bank for the year ended December 31, 2010 together with Directors' Report and Auditors' Report thereon, including postfacto approval of remuneration paid to non-executive directors for attending Board and Board Committees meetings reported at Notes 27 and 36 of the Annual Accounts, as required under SBP Prudential Regulations.

3.

To appoint Auditors of the Bank for the year 2011 and fix their remuneration.

Special Business:
4. To consider and pass the following Special Resolution as required by Section 208 of the Companies Ordinance, 1984 for authorizing the Bank to make additional capital investment of Rs. 750,000,000/- (Rupees seven hundred fifty million) in Alfalah Securities (Pvt) Limited by way of subscription of Right Shares to be issued by Alfalah Securities (Pvt) Limited.
"RESOLVED that subject to completion of all regulatory and legal formalities, Bank Alfalah Limited makes additional capital investment of Rs. 750,000,000/- (Rupees seven hundred fifty million) in Alfalah Securities (Pvt) Limited by way of subscription of Right Shares to be issued by Alfalah Securities (Pvt) Limited."

5.

To transact any other business with the permission of the Chair.

By Order of the Board

Karachi Dated: 7th March 2011

HAMID ASHRAF Company Secretary

Annual 2010Report

03

whose shares are deposited with Central Depository Company of Pakistan Ltd. In case of Proxy for corporate members. numbers must be deposited alongwith the Form of Proxy with our Share Registrar as per paragraph No.I. not less than 48 hours before the time of the Meeting. attested copies of proxy's CNIC or passport. Account and Participant's I. and vote at the Meeting is entitled to appoint another member as a proxy to attend. speak and vote on his/her behalf.Chundrigar Road. A member entitled to attend. 6. In case of Proxy. 5. 04 Annual2010 Report . Registrar Services (SMC-Pvt) Limited. Those shareholders. The statement of material facts under Section 160(1)(b) of the Companies Ordinance. if any. 2. (CDC) are requested to bring their original Computerized National Identity Card (CNIC) alongwith participant's ID number and their account/sub-account numbers in CDC to facilitate identification at the time of Annual General Meeting.D. the Board of Directors' Resolution/Power of Attorney with specimen signature of the nominee shall be produced at the time of the meeting (unless it has been provided earlier to the Share Registrar). I. or notarized copy of such Power of Attorney must be valid and deposited at the Share Registrar of the Bank. F.D. Saima Trade Tower. 17th Floor.D. F. The Share Transfer Books of the Bank will remain closed from 22nd March 2011 to 28th March 2011 (both days inclusive). 4 above. 1984 relating to the aforesaid Special Business to be transacted at the Annual General Meeting is being sent to the Members with the Notice. 4. Shareholders are requested to notify change in their address.NOTES: 1. A corporation being a member may appoint as its proxy any of its official or any other person whether a member of the Bank or otherwise. An instrument of proxy and a Power of Attorney or other authority (if any) under which it is signed. Registrar Services (SMC-Pvt) Limited. Karachi. to our Share Registrar. 3. 1700-A.

49) per share : Rs (38. 900. 750.000/: 83. The Board of Directors of Alfalah Securities has resolved to offer 90.STATEMENT OF MATERIAL FACTS UNDER SECTION 160(1)(b) OF THE COMPANIES ORDINANCE 1984 CONCERNING THE AGENDA ITEM NO. 2000 issued by SECP is given below: Name of Investee company Nature of Investment Amount of Investment Extent of Investment Average market price Break-up value of shares .000.Dec 2007 Purchase price Earning per share .33% : Not Applicable : Rs (69.2008 Earning per share .Dec 2008 Break-up value of shares .75) per share : Rs (30. The Right shares shall rank pari passu in all respects with the existing ordinary shares.000 (Rupees seven hundred fifty million) in Alfalah Securities (Pvt) Limited by way of subscription of Right Shares to be issued by Alfalah Securities (Pvt) Limited.01) : Rs (19.Dec 2010 Break-up value of shares .2007 Source of Funds Period of Investment Purpose of Investment Benefits to the Company and Shareholders Interest of directors and their relatives : Alfalah Securities (Pvt) Limited The company was incorporated on September 23. Subscription of Right Shares to be issued by Alfalah Securities (Pvt) Limited (Agenda No. 4) to be transacted at the 19th Annual General Meeting of the members of Bank Alfalah Limited to be held on 28th March 2011.000. : The Bank can expect to earn dividend income from distribution of profit once the Company improves its financial position. SRO 865(I)/2000 dated December 6. : None Annual 2010Report 05 .000.each amounting to Rs. The Board of Directors of the Bank in the 84th Board meeting has resolved that subject to approval of the State Bank of Pakistan and completion of all regulatory and legal formalities.2009 Earning per share .43 per share : Fund available out of normal banking deposits : Strategic Investment : To help the Company strengthen and re-structure its financial position.11) per share : Rs 0. The information as required by Notification No. 10/.4) The Bank has invested in 76% shares of Alfalah Securities (Pvt) Limited. 4 This Statement sets out the material facts concerning the Special Business (given at agenda item No.Dec 2009 Break-up value of shares .000.000 ordinary shares of Rs.000/. : Subscription of right shares to be issued by the Investee company : Rs 750. Bank Alfalah Limited makes additional capital investment of Rs.49) : Rs (58.at par to the members whose names appear on Company's Register of Members on the date of commencement of book closure to be announced by the company for rights issue. Pakistan. 2003 with registered office in Karachi. in proportion of 9 (nine) Right shares for every 1 (one) share held. 2003.2010 Earning per share .85 : Rs 10 per share : Rs (11. State Bank of Pakistan has since granted permission to Bank Alfalah Limited to inject Rs 750 million in its subsidiary Alfalah Securities (Private) Limited. The company obtained corporate membership from Karachi Stock Exchange (Guarantee) Limited on November 24. The principal objective of the company is to undertake the business of a brokerage house.26) : Rs 10.

000 200.026 (3. Initiatives.710) 1.368. we have a network of 386 branches that includes 80 Islamic Banking branches. 2010 2009 (Rupees in „000) Profit before Provisions and Taxation Provision against Loans and advances (net) Provision in diminution in value of Investments Profit before Taxation Taxation Profit After Taxation Earnings per share 5.316 million for the previous year.000 150.000 100.000 300.164) (4. 244. seven foreign branches.316 (119. BAL 's ultimate goal is to retain these beneficiaries as Branchless Banking customers by introducing them to the benefits of using additional services such as savings. We continue to strengthen our presence in the market place and as of year end 2010. that can be linked to Mobile Wallets as well . In millions 5.035 Rs.016.016. 1.603.000 Profit before Provisions and Taxation 0 DEPOSITS ADVANCES IMPORTS EXPORTS (Gross) Operating Results During the year the bank's profit before taxation stood at Rs.000 50.000 each to over one and a half million families displaced by the massive flooding of 2010.011. efforts and key developments Watan Card The Government of Pakistan (GOP) selected BAL as one of the partners to disburse Rs. to beneficiaries identified by NADRA and GOP.964 billion to flood affected persons.687) (1.2.293) 968.243. 1. The additional profit arising from availing the FSV benefit -net of tax at year end which is not available for either cash or stock dividend to shareholders amounted to Rs. and bill payments that are accessible via their Watan card accounts .Directors'Report totheShareholders The Board of Directors is pleased to present the audited financial statements of the Bank for the year 2010. 0. 20. BAL will have disbursed a total of Rs.780 million approx. 06 Annual2010 Report .800 250.800 5. Bank has availed the FSV benefit.281) 897.368.71 2010 2010 2009 Rs. In millions 400. remittances.72 5.000 2009 Rs. BAL had created 18 Centres in Punjab and Gilgit-Baltistan provinces to disburse Cards and Cash to affected persons. five in Bangladesh and two in Afghanistan and one offshore banking unit in Bahrain.452 Rs. Additional planned installments in the second phase of the programme in 2011 will ensure beneficiaries have multiple opportunities to use (and get used to) the use of Debit cards.800 4. It is envisaged that by the end of the second phase of Watan Card distribution. called "Watan cards".192) (4.991.000 350.546) (317. 0.300 3. For this effort BAL issued debit cards.028. 7.745 million compared to Rs.879) 1.694.745 (400.234.300 4.624 (2.

power shortages and high interest rates have significantly impacted borrowers. This trend has continued in FY 2011 as the country posted its first half-yearly current account surplus since 2003. standing at Rs 494 billion as of December 2010 while infection of the sector's portfolio has also deteriorated from 12. Presently 60 branches and both car and home finance hubs are working on T-24. In 2011. Centralization of processes has led to marked improvement in turnaround times and greater customer satisfaction for more focus and improvement in procedure controls and delivery channels. Bank is continuing its drive towards centralization of back office functions. T-Risk. and Anti Money Laundering.9% for the year. far exceeding the IMF target. While the growing macroeconomic imbalances in the economy are still quite manageable. Credit Rating PACRA. These ratings denote a very low expectation of credit risk. telecommunication upgrade to provide connectivity to Centralized Operations. challenges of the implementation of this system will include: construction of the Bank's own primary data center and rollout of T24 in rest of the branches and Islamic Banking module. The fiscal position remained fragile as revenue generation remained weak whilst expenditures escalated. At this stage. Credit lending has remained subdued and Gross Advances increased by only around 5% during 2010. branches and units are continuously and steadily migrating to this new world renowned IT platform. the centralization segment has been almost completed.3% of GDP. with CPI at 15. The external account position remained a key positive as the current account deficit for FY 2010 was better than expectations at 2% of GDP due to higher remittances and aid inflows. Annual 2010Report 07 . respectively. a premier rating agency of the country. The banking sector of Pakistan has been in a consolidation phase since the beginning of 2009 due to the country's economic vulnerabilities. the unsecured subordinated debt (Term Finance Certificates) of the Bank has been awarded a credit rating of AA. Automation of Overseas Operations. Core banking platform implementation Based on bank strategy to realign its IT setup towards T-24 platform. which grew by nearly 15% in 2010. Inflationary pressures remained active throughout the year.2% in December 2009 to 14. Further. services inflows and increased exports. coupled with implementation of modules like Internet Banking. The sector has remained focused on deposits. Branches are operating as customer contact points providing a clutter free environment and better customer service. further delay in implementing critical structural adjustments risks significantly increasing the future costs to the economy. Entity Rating for Long Term and A1+ (A one plus) for the Short Term.(double A minus). strong capacity for timely payment of financial commitments in the long term and the highest capacity for timely repayment in the short term.5% year-on-year in December 2010 and averaging 13. with aggressive solicitation of current and savings accounts (CASA). NonPerforming Loans (NPLs) have seen a sharp increase of 22%. The effects of the depressed economic activity. and fully Automated Regulatory Reporting System and delivery of T24 IBG system from Temenos and release upgrade to the new version of the system. Economic Overview Pakistan's economy remains stressed in the aftermath of the unprecedented floods and due to the continued delays in the implementation of key economic reforms. has rated the Bank 'AA' (double A). Supply chain interruptions caused by crop damage resulted in volatile food prices and remained a key driver behind surging price pressures.Processes During the year the bank focused on streamlining operational platform for creating efficiencies while providing optimum level of internal and external services. FY 2010 fiscal deficit stood at 6.0% in December 2010.

1. The Board of Directors through its sub-committee called 'Board Risk Management Committee' (BRMC) oversees the overall risk of the Bank. the result of its operations. 3. 2002. 2. Risk Management The economic and security situation witnessed in the country during 2010 demanded further strengthening of the Bank's internal risk management controls through a renewed focus on special asset and portfolio management. present fairly. Abdulla Khalil Al Mutawa Mr. 731. 2.Corporate Governance 1. b) Proper books of accounts of the bank have been maintained.518. Hamdan Bin Mubarak Al Nahayan Mr.682 million The number of Board meetings held during 2010 were 5 and attended by directors as under: 1. Abdulla Nasser Hawaileel Al Mansoori Mr. H.Nadeem Iqbal Sheikh Mr. 7. As the impact of the economic rollercoaster took its toll on asset portfolios in the banking sector. cash flows and changes in equity. A prescribed statement by the management together with the Auditors' Review Report thereon is annexed.452 million Rs. i) Book value of investments and placements by Staff Provident Fund and Staff Gratuity Fund as at December 31. A dedicated Risk Management Division (RMD) is in place with the GM RMD reporting directly to the Chief Executive Officer.T. financial institutions have had to revamp and improve overall risk management processes and early warning systems. To be in a better position to respond to these challenges and to effectively monitor and control the resulting risk shocks. h) Summarized key operating and financial data of last eight years is annexed to the audited accounts. 08 Annual2010 Report . 2010. Market. have been followed in preparation of financial statements. f) g) There are no doubts about the Bank's ability to continue as a going concern. Risk Management Division has been structured to address Credit.Sirajuddin Aziz No. Ikram Ul-Majeed Sehgal Mr. market risk. as applicable to banks in Pakistan. the state of affairs. 6. Statement under clause XIX of the Code: a) The financial statements prepared by the management of the Bank. I. the Risk Management Framework was revitalized through integrated risk management approach for managing credit risk. 5 dated June 13. Khalid Mana Saeed Al Otaiba Mr. 5. The Bank has implemented the requirements of the Code of Corporate Governance relevant for the year ended December 31. of Meetings attended 4 4 5 5 4 4 5 k) The pattern of shareholding is attached with this report. d) International Accounting Standards. H. e) The system of internal control is sound in design and has been effectively implemented and monitored. 4. as detailed in the listing regulations duly adopted by the State Bank of Pakistan vide BSD Circular No. c) Appropriate accounting policies have been consistently applied in preparation of financial statements and accounting estimates are based on reasonable and prudent judgment. liquidity risk and operational risk as evidenced by the Bank‟s Board approved "Risk Management Policy and "Risk Management Manual". 2010 is: Staff Provident Fund Staff Gratuity Fund j) Rs. There has been no material departure from the best practices of corporate governance. Bank is in the process of adopting an internationally accepted COSO internal Control.Integrated Framework as per SBP Guidelines. and Operational risks and a team of suitable personnel have been hired.

570 million have been made during the year to the education health services organizations and for flood relief. These strengthening measures were supplemented by effective capital allocation and monitoring vide Annual Credit Plan. Corporate Social Responsibility As a 'Caring Bank' it has been a primary concern of Bank Alfalah to ensure it is continuously contributing to community development initiatives and programmes across Pakistan. The System now also has the capability to auto generate alerts on accounts showing weakness in financials and hence requiring a more vigilant monitoring. will take place in due course. A sophisticated Internal Credit Rating System is in place. Credit Risk Management was tailored to counter business specific risks and highlight accounts that require vigilant monitoring through automated system. which is capable of quantifying counter -party risk in accordance with the best practices. On the Operational Risk front. The Board would also like to place on record its appreciation for the hard work. officers and staff of the Bank at all levels. Donations of Rs. Subsidiary Company Bank Alfalah Limited has 76% shareholding in Alfalah Securities (Private) Limited. in line with the overall risk appetite of the Bank. The implementation of System. The framework is being supported vide the Operational Loss Database & KRI modules released in 2010. special education and relief work etc. The Bank's major focus has been on supporting education. the State Bank of Pakistan. the Bank has implemented comprehensive policy and procedure. we plan to open more branches all over Pakistan. dedication.Moreover. 27. The bank has also developed Facility Rating System in line with SBP's guidelines. and a controls framework designed to provide a sound and well-controlled operating environment. The system is capable of generating MIS reports providing snapshot of the entire portfolio for strategizing and decision making. The adherence to Risk-appetite statement approved by the Board is monitored by RMD. Ministry of Finance and other regulatory authorities for their continuous guidance and support with whom we enjoy a very cordial relationship. Future Plans In 2011. Bank Alfalah has been donating generously to non-profit institutions working on improving healthcare and education in Pakistan. which will generate ratings of transactions and provide estimated LGD (Loss Given Default). SIRAJUDDIN AZIZ Director & Chief Executive Officer March 03. Risk & Control Self Assessment framework has been implemented bank-wide to measure and monitor operational risk levels and mitigate operational losses. seeks to reduce volatility in operating performance under adverse market conditions. Further the compliance of regulatory & internal limits is also monitored and any deviations are ratified from the competent authorities. Our belief is that positive contributions made to causes focused on addressing human development challenges is a major responsibility. Bank Alfalah has been a major sponsor of upgrading and maintaining the civil infrastructure in major cities of Pakistan. Acknowledgement The Board would like to thank our valued customers for their continued patronage and support. Market Risk Management has been strengthened through implementation of advanced monitoring and measurement tools such as Early Warning Indicators and Value -at-Risk models. professionalism and sincere efforts of the senior management. A dynamic and well defined limits structure. 2011 Abu Dhabi Annual 2010Report 09 .

00 33.506 1.503 129.931 35.301 897 968 3.406 100.026 2.426 354.807 78.13 3.5% 18.32 16.17 28.84 0.92 2.53 8. Rs.973 300.492 273.net of provision Investments .609 348.48 22.66 9.71 56.56 53.210 119.88 24.593 2.345 10.24 0.016 1.70 3.763 3.686 149.59 49.27 14.15% 8% 100.52 25 12 .425 7.906 5.08 26.77 57.218 6.45 8.369 2.86 0.92 29.679 4.199 88.41 16.92 1.24 64.86 3.957 11.38 0.738 248.277 % % % 8.133 3.79 21.18 18.484 207. No.543 7.89 30.289 197.705 44.43 20.092 1.937 184.49 3.090 93.822 35.33 30.123 1.070 188.847 70.770 389.305 190.604 3.795 1.502 239.790 75.48 9.304 254.289 9.16 8.12 2. Rs.238 1.371 7.698 4.05 24.002 12. of Employees ( other than outsourced) 10 Annual2010 Report 7.72 2.130 1.90 3.net of provision Deposits and other accounts OTHERS Imports Exports RATIOS Capital Adequacy Profit before Tax ratio (PBT/ Gross mark up income) Gross spread ratio (Net mark up income/gross mark up income) Income/Expense ratio Return on Average Equity (ROE) Return on Average Assets (ROA) Advances/Deposits Ratio Cash Dividends Stock Dividend Book value per share excluding revaluation of Assets Book value per share including revaluation of Assets Basic Earnings per share No.566 4.17 5.140 14.416 222.69 41.54 33.966 3.760 19.90 58.767 328.216 28.41 0.22 4.12 35.63 62.991 191.904 76.46 10.702 1.17 68.369 154.80 2.67 36.65 14.754 3.00 25.72 9.65 86.571 Times % % % % % Rs.273 57.844 79.264 6.85 8.918 8.03 12.65 20.753 98.317 71.11 17.62 23.028 5.952 49.174 14.90 2.472 116.573 275.67 3.48 24.59 0.584 7. million 2008 2009 2010 OPERATIONAL RESULTS Total Income Operating Expenses Profit before Income Tax and Provision Profit before Income Tax Profit after Taxation BALANCE SHEET Shareholders' Equity Total Assets Advances .462 7.82 30.46 21.71 0.727 411.34 4.015 46.59 3.84 3.344 5.864 57.95 21.509 13.743 42.563 2.733 19.159 324.04 0.67 1.77 17.153 113.31 79.835 88.536 1.37 25.91 3.493 132.042 99.EightYear FinancialSummary 2003 2004 2005 2006 2007 All figures are in Rs.895 171.15 21.352 5.93 12.53 5.00 23% 12.44 4.803 2.515 24.310 5.789 40.416 31.46 62.999 56.67 63.314 118.654 2. .715 6.

During the year Mr. who stands retired. along with agenda and working papers. all the other directors are non-executive directors.Muhammand Iqbal Saifi. The Directors are well conversant with their duties and responsibilities. vii) All the powers of the Board have been duly exercised and decisions on material transactions. including appointment and determination of remuneration and terms and conditions of employment of the Chief Executive Officer are approved by the Board. xiii) The Board has setup an effective internal audit function within the Bank. x) xi) xii) No casual vacancy occurred during the period under review.StatementofCompliancewiththeBest PracticesoftheCodeofCorporateGovernanc eFortheyearendedDecember31. The non-executive directors include two independent directors. Rashid including his remuneration and role and responsibilities as determined by the Board Audit Committee were approved by the Board of Directors. Listing regulations of the Karachi. xiv) 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. All the resident Directors of the bank are registered as Tax payers and to the best of our knowledge. overall corporate strategy and significant policies of the Bank. iv) None of the Directors or their spouses is engaged in the business of Stock Exchange. which has been signed by all the directors and employees of the Bank. the Bank's Memorandum and Articles of Association and the Code of Corporate Governance. ix) The Directors have been provided with the copies of the listing regulations of the Stock Exchange. none of the Directors have defaulted in payment of any loan to a banking company. v) The Bank has prepared a "Statement of Ethics and Business Practices". The minutes of the meetings were appropriately recorded and circulated to all concerned.2010 This statement is presented to comply with the Code of Corporate Governance contained in Regulation G-1 of the Prudential Regulations for Corporate / Commercial Banking issued by the State Bank of Pakistan. None of the directors of the bank are serving as a director in ten or more listed companies. The elevation of Mr. including the bank. The Board of Directors have met five times in the year and written notices on the Board meeting. a Development Financial Institution (DFI) or a Non Banking Financial ii) iii) Institution (NBFI) or being a member of a Stock Exchange. Annual 2010Report 11 . vi) The Board has already adopted its vision/mission statement. There was no new appointment of CFO and Company Secretary during the year ended December 31. whereby a listed company is managed in compliance with the best practices of corporate governance. viii) The meetings of the Board were presided over by the Chairman and. A complete record of particulars of significant policies along with the dates on which they were approved or amended has been maintained. Lahore and Islamabad Stock Exchanges for the purpose of establishing a framework of good governance. has been declared as a defaulter by that Stock Exchange. The bank applies the principles contained in the Code in the following manner: i) Except for the Chief Executive Officer.Yasar Rashid has been elevated as Group Head Internal audit replacing Mr. 2010. in his absence by a director elected by the Board for this purpose. were circulated at least seven days before the meetings.

all of whom are non-executive directors of the bank. xvii) The Directors. The terms of reference of the committee have been formed and advised to the committee for compliance. xviii) The Board has formed an audit committee. xxiii)We confirm that all other material principles contained in the Code have been complied with.xv) The financial statements of the bank have been duly endorsed by the Chief Executive Officer and the Chief Financial Officer before approval of the Board. For and on behalf of the Board Sirajuddin Aziz Director & Chief Executive Officer March 03. CEO and executives do not hold any interest in the shares of the Bank other than that disclosed in the pattern of shareholding. 2011 Abu Dhabi 12 Annual2010 Report . xix) The meetings of the audit committee were held at least once every quarter prior to approval of interim and final results of the Bank and as required by the Code. that they or any of the partners of the firm. xxi) The statutory auditors or the persons associated with them have not been appointed during the period to provide other services except in accordance with the listing regulations and the auditors have confirmed that they have observed IFAC guidelines in this regard. The Statement of Compliance with best practices of corporate governance is being published and circulated along with the annual report of the bank. xvi) The bank has complied with all the applicable corporate and financial reporting requirements of the Code. their spouses and minor children do not hold shares of the Bank and the firm and all its partners are in compliance with International Federation of Accountants (IFAC) guidelines on code of ethics as adopted by the Institute of Chartered Accountants of Pakistan. It comprises three members. xxii) The Board considers and approves the related party transactions on an annual basis after review of the Board Audit Committee. xx) The statutory auditors of the bank have confirmed that they have been given a satisfactory rating under the quality control review programme of the Institute of Chartered Accountants of Pakistan.

We are only required and have ensured compliance of the above requirement to the extent of approval of related party transactions by the Board of Directors and placement of such transactions before the audit committee. in all material respects. 2010. Our responsibility is to review. to the extent where such compliance can be objectively verified. As part of our audit of the financial statements. Sub-Regulation (xiii a) of listing Regulation No. Further. 35 as notified by all the stock exchanges on which the Bank is listed requires the Bank to place before the Board of Directors for their consideration and approval. A review is limited primarily to inquiries of the Bank personnel and review of various documents prepared by the Bank to comply with the Code. 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. the Lahore Stock Exchange and the Islamabad Stock Exchange where the Bank is listed. with the best practices contained in the Code of Corporate Governance 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. Regulation No. F. The responsibility for compliance with the Code of Corporate Governance is that of the Board of Directors of the Bank. 2011 Annual 2010Report 13 . Based on our review. We have not carried out any procedures to determine whether the related party transactions were undertaken at arm's length prices or not. related party transactions distinguishing between transactions carried out on terms equivalent to those that prevail in arm's length transactions and transactions which are not executed at arms' length price recording proper justification for using such alternate pricing mechanism. A.ReviewReport totheMembersonStatement ofCompliance withtheBestPracticesofthe CodeofCorporateGovernance We have reviewed the Statement of Compliance with the best practices contained in the Code of Corporate Governance prepared by the Board of Directors of Bank Alfalah Limited ('the Bank') to comply with Regulation G-1 of the Prudential Regulations for Corporate / Commercial Banking issued by the State Bank of Pakistan. 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. nothing has come to our attention which causes us to believe that the Statement of Compliance does not appropriately reflect the Bank's compliance. Ferguson & Co.35 of Chapter XI contained in the Listing Regulations issued by the Karachi Stock Exchange. all such transactions are also required to be separately placed before the audit committee. Chartered Accountants Karachi Dated: March 06.

The Board of Directors have instituted an effective Internal Audit Division which not only monitors compliance with the bank's policies. together with a comprehensive gap analysis of the control design. further Internal Control improvements are expected from the bank's adoption of COSO framework.Integrated Framework. as envisaged under the State Bank of Pakistan's (SBP) Internal Control Guidelines. The management believes that the bank's existing system of Internal Control is considered reasonable in design and is being effectively implemented and monitored. In addition. the bank has initiated the development of detailed remediation plans to address the gaps identified and ensure implementation of planned initiatives to adequately remediate the gaps in a timely manner. The bank is in the process of adopting an internationally accepted COSO Internal Control . aims and objectives and to evaluate the nature and extent of those risks and to manage them efficiently. 2010 in accordance with the Guidelines for Special Review of the Banks' Internal Control Programmes (Special Review Guidelines) issued by the Institute of Chartered Accountants of Pakistan. procedures and controls and reports significant deviations regularly to the Board Audit Committee but also regularly reviews the adequacy of the Internal Control system.[ StatementonInternalControls ] This Statement of Internal Controls is based on an ongoing process designed to identify the significant risks in achieving the bank's policies. In addition. Furthermore. evaluation. 2011 Abu Dhabi 14 Annual2010 Report . This process has been continuously in place for the year ended December 31. Sirajuddin Aziz Director & Chief Executive Officer March 03. and their continued evaluation and changes to procedures remains an ongoing process. It can therefore only provide reasonable and not absolute assurance against material misstatement and loss. the identification. effectively and economically. comprehensive management testing plans and framework are also planned to be developed for ensuring an on-going operating effectiveness of key controls. and has engaged a reputable advisory firm for assistance in this regard. the bank has carried out detailed documentation of the existing processes and controls. With the assistance of the consultant advisory firm engaged in this regard. It is the responsibility of the bank's management to establish and maintain an adequate and effective system of Internal Control and every endeavor is made to implement sound control procedures and to maintain a suitable control environment. and management of risks within each of the Bank's key activities. In accordance with the SBP's guidelines. The observations and weaknesses pointed out by the external auditors are also addressed promptly and necessary steps are taken by the management to eliminate such weaknesses. the External Auditors of the Bank shall provide the management with a "Long Form Report" for onward submission to the State Bank of Pakistan. The system of Internal Control is designed to manage rather than eliminate the risk failure to achieve the bank's business strategies and policies. For and behalf of the Board. While concerted efforts have always been made to comply with the SBP Guidelines. as described above. This report shall be based on their Special Review of work performed by the Bank up to December 31. 2010.

An audit also includes assessing the accounting policies and significant estimates made by management. A. 1984 (XLVII of 1984). (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. its comprehensive income. which in the case of loans and advances covered more than sixty percent of the total loans and advances of the bank. 2010. 1984 (XLVII of 1984). and are in agreement with the books of account and are further in accordance with accounting policies consistently applied. statement of comprehensive income. An audit includes examining. 2010 and the related profit and loss account. 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. cash flow statement and statement of changes in equity together with the notes forming part thereof (here-in. in which are incorporated the un-audited certified returns from the branches except for thirty one branches which have been audited by us and seven branches and one offshore banking unit audited by auditors abroad and we state that we have obtained all the information and explanations which. 1962 (LVII of 1962). Our responsibility is to express an opinion on these financial statements based on our audit. and (d) in our opinion Zakat deductible at source under the Zakat and Ushr Ordinance. and the Companies Ordinance. and (iii) the business conducted. in the manner so required and give a true and fair view of the state of the bank's affairs as at December 31. to the best of our knowledge and belief. and the Companies Ordinance. Chartered Accountants Engagement Partner: Salman Hussain Dated: March 06. (c) in our opinion and to the best of our information and according to the explanations given to us the statement of financial position. and prepare and present the financial statements in conformity with the approved accounting standards and the requirements of the Banking Companies Ordinance. 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. statement of comprehensive income. cash flow statement and statement of changes in equity together with the notes forming part thereof conform with the approved accounting standards as applicable in Pakistan. and give the information required by the Banking Companies Ordinance. 1984 (XLVII of 1984). we report that: (a) in our opinion. and the Companies Ordinance. 1962 (LVII of 1962). its cash flows and changes in equity for the year then ended.after referred to as the 'financial statements') for the year then ended. on a test basis. evidence supporting the amounts and disclosures in the financial statements. were necessary for the purposes of our audit. profit and loss account. Ferguson & Co. as well as. 1984 (XLVII of 1984). F. and its true balance of profit. 2011 Karachi Annual 2010Report 15 . It is the responsibility of the bank's management to establish and maintain a system of internal control. (ii) the expenditure incurred during the year was for the purpose of the bank's business. 1962 (LVII of 1962). We conducted our audit in accordance with the International Standards on Auditing as applicable in Pakistan. We believe that our audit provides a reasonable basis for our opinion and after due verification. and the returns referred to above received from the branches and the offshore banking unit have been found adequate for the purposes of our audit. proper books of account have been kept by the bank as required by the Companies Ordinance.[ Auditors'ReporttotheMembers ] We have audited the annexed statement of financial position of Bank Alfalah Limited as at December 31. 1980 (XVIII of 1980) was deducted by the bank and deposited in the Central Zakat Fund established under section 7 of that Ordinance. evaluating the overall presentation of the financial statements.

556 113.055 LIABILITIES Bills payable Borrowings Deposits and other accounts Sub-ordinated loans Liabilities against assets subject to finance lease Deferred tax liabilities .563 3.826.544 13.181 179.225 411.570.StatementofFinancialPosition AsatDecember31.160 22.255 6.438 14.639 14.152.2010 Note 2010 2009 (Rupees in „000) ASSETS Cash and balances with treasury banks Balances with other banks Lendings to financial institutions Investments .net Fixed assets Deferred tax assets Other assets 6 7 8 9 10 11 12 41.415.728 19.563 3.653.159.491.015.006.483.851 10.497.700.839 35.786 366.492.012 22.258.544 3.936.491.net of tax 19 20 13.861 207.305.752 7.649.144 20.133.194 14.070.919 9.133 2.957 188.556 2.133.420 CONTINGENCIES AND COMMITMENTS 21 The annexed notes 1 to 44 and Annexures I and II form an integral part of these financial statements.363.690.947.860 19.555 12.425.net Other liabilities 13 14 15 16 17 18 4.295 22.197.578.819.521.546 14.056.305.435 99.841 16.042.988 22.216 389.635 22.587.969 2.921 324.759.770.124 354.204.567.533 13.260 2.420 NET ASSETS REPRESENTED BY Share capital Reserves Unappropriated profit Surplus on revaluation of assets .722.192 115.380 389.726.178. Chief Executive Officer Director Director Chairman 16 Annual2010 Report .179.net Advances .311 7.766.

507 (1.316 25 9.817 4.180 10.907.217 1.813 4.net of tax Profit available for appropriation 23 24 10.71 The annexed notes 1 to 44 and Annexures I and II form an integral part of these financial statements.72 0.875 (Rupees) 1.665 12.035 3.256 23.Deferred .858 10.133.368.561.071.690.728 29.696 4.net Provision for diminution in value of investments Bad debts written off directly Net mark-up / interest income after provisions Non mark-up / interest income Fee.687 1.467 24.883) (71.425 1.849 1.056) 400.040 76.net Other income Total non mark-up / interest income Non mark-up / interest expenses Administrative expenses Provision / (Reversal of provision) against off-balance sheet obligations Provision against other assets Other charges Total non mark-up / interest expenses Extra ordinary / unusual items Profit before taxation Taxation .530.986.732 688.192 25.923.019.122. commission and brokerage income Dividend income Income from dealing in foreign currencies Gain on sale of securities .695 3.23 26 27 18.452 2.316 1.017.527 6.369.586 12.293 968.609 3.302.544 77.016.281 897.132 3.414.924 2.001.309.470 204.21 10.016.991.253 12.542 1.527 5.2 12.448 13.708.161 14.182. Chief Executive Officer Director Director Chairman Annual 2010Report 17 .198 Basic / Diluted earnings per share 30 0.546 317.454 11.745 29 842.419) 79.004 248.056 93.745 35.688.913.net Unrealised gain on revaluation of investments classified as held for trading .674) 119.855.835.654.301 (767.Current .447.368.232 (370.694.2010 Note 2010 2009 (Rupees in „000) Mark-up / return / interest earned Mark-up / return / interest expensed Net mark-up / interest income Provision against loans and advances .753.164 59.Prior years Profit after taxation Unappropriated profit brought forward Transferred from surplus on revaluation of fixed assets .300 1.080 6.504 4.066.346) (179.243.674.2 28 1.383 9.841 1.5 9.260.578.605 1.ProfitAndLossAccount FortheyearendedDecember31.312 24.808 2.425 1.6 37.

641 The annexed notes 1 to 44 and Annexures I and II form an integral part of these financial statements.005.100 1.506 1.926 242.474 1. Chief Executive Officer Director Director Chairman .net of tax Total comprehensive income 968.139.443 363.transferred to statement of changes in equity Components of comprehensive income not reflected in equity (Deficit) / Surplus on revaluation of available for sale securities .035 37.452 897.483) 568.541 (437.502.2010 2010 2009 (Rupees in „000) Profit after taxation Other comprehensive income Exchange differences on translation of net investment in foreign branches Comprehensive income .StatementofComprehensiveIncome FortheyearendedDecember31.

18 Annual2010 Report .

873 6.192 6.079.785.270.082.626.2010 Note 2010 2009 (Rupees in „000) CASH FLOWS FROM OPERATING ACTIVITIES Profit before taxation Less: Dividend income Adjustments Depreciation Amortisation Provision against loans and advances .389 (6.557.099 1.620.952 61.net Bad debts written-off directly Gain on sale of fixed assets .000 (988) 3.494 (16.878 61.052) (7.112.419) (2.999 3.302.144 (145.364) (16.23 10. 31 27 27 10.546 317.583.513.CashFlowStatement FortheyearendedDecember31.056 93.000.368.894 144.279.2 9.697) 755.2 12.386 (778.285 (1.217) 768.272.164.002) 253.804 192.745.437.016.997.net Charge for defined benefit plan (Increase) / decrease in operating assets Lendings to financial institutions Held for trading securities Advances Other assets (excluding tax recoverable and dividend receivable) Increase / (decrease) in operating liabilities Bills payable Borrowings Deposits and other accounts Other liabilities Gratuity paid Income tax paid Net cash generated from operating activities CASH FLOWS FROM INVESTING ACTIVITIES Net investments in available for sale securities Net investments in held to maturity securities Investment in associated companies Dividend income received Investments in fixed assets Proceeds from sale of fixed assets Net cash used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES Issuance of sub-ordinated loans Redemption of sub-ordinated loans Issuance of right shares Dividend paid Net cash (used in) / generated from financing activities Exchange difference on translation of the net investments in foreign branches Increase in cash and cash equivalents Cash and cash equivalents at the beginning of the year Cash and cash equivalents at the end of the year The annexed notes 1 to 44 and Annexures I and II form an integral part of these financial statements.489.017.776) 5.352) (1.043 (16.456) 112.net Provision for diminution in value of investments Provision / (Reversal of provision) against off-balance sheet obligations Provision against other assets Unrealised gain on revaluation of investments classified as held for trading .525 18.692.237.251) (2.504 (21.500 8.164 (1.039) (242.150.300) 25.040 (3.405.379.045) 19.169 57.255.996 7.784 64.740 21.559 (754.474 661.372 172.817 196.448.299) 1.797) 29.745 (204.113 6.991.722) 18.5 9.666) (21.996.849) 59.026.6 26 27 1.953.512 242.243.521) 189.316 (248.687 1.989) (1.166 (25.882 (11.883) 145.905.047 62.903.659) 42.927 (16.999 1.972 (11.314) 37.817 (43.21 18.568 (1.699 24.388) 314.316 9.047 Chief Executive Officer Director Director Chairman Annual 2010Report 19 .487.379) (464.379 6.694.963.172) (5.320 1.626) 22.325) (1.945.352 5.813) (4.425) 1.722.489.949 2.992) 816.255.034 31.513.119.467.324 (189.506 3.533.

063) - .net of tax Transfer to statutory reserve Final cash dividend for the year ended December 31.499.527 2.995.063) 2. Chief Executive Officer Director Director Chairman 20 Annual2010 Report .132 - 37.767.035 - 578.780 million (2009: Rs.696 24. 2010 Transfer from surplus on revaluation of fixed assets .728 19.005.997.net of tax Transfer to statutory reserve Issue of right shares Transfer to reserve for issue of bonus shares Issue of bonus shares for the year ended December 31.3.021 3.415.608. 1.499.StatementofChangesinEquity FortheyearendedDecember31.5% Balance at December 31.(1.467 14.499. 2010 representing additional profit arising from availing FSV benefit for determining provisioning requirement is not available to the bank for the purposes of distribution of dividend to shareholders.695 (193.491.452 1. 2009 Transfer from surplus on revaluation of fixed assets .001 2.726.690) - (1.556 (a) This represents reserve created under section 21(i)(a) of the Banking Companies Ordinance.079.488 million) as at December 31.407 - 1.491.139. 2009 @ 8% Balance at December 31.499.5. 2009 Changes in equity for 2010 Comprehensive income for the year ended December 31.997. The annexed notes 1 to 44 and Annexures I and II form an integral part of these financial statements.690.035 1.562.563 193.563 179.696 (179.588. 2008 @ 12.407) - . 2010 7.063 13.063 242.2010 Share capital ---------------------------------------------------- Statutory reserve (a) Reserve for issue of bonus shares Exchange translation reserve Unappropriated profit Total (b) (Rupees in ' 000)---------------------------------------------------- Balance at January 1.500 (1. 2.506 897.926 29.690 2.474 968.260 13.695 29.442 - - 820.000 2.079.325) 858.523 3.447.961.1 of these financial statements balance of Rs.500 1. (b) As more fully explained in note 10.244. 2009 Changes in equity for 2009 Comprehensive income for the year ended December 31.770.325) (1.541 24. 1962.860 19.

NotestoandFormingPartoft heFinancialStatements FortheyearendedDecember31. 1962 and is operating through 298 conventional banking branches including 18 sub branches (2009: 253 branches including 4 sub branches). Karachi and is listed on the Karachi. Banking Companies Ordinance. Further. I. Permissible form of trade-related modes of financing includes purchase of goods by banks from their customers and immediate resale to them at appropriate mark-up in price on deferred payment basis.1 STATEMENT OF COMPLIANCE These financial statements have been prepared in accordance with the approved accounting standards as applicable in Pakistan. segment information disclosed in these financial statements is based on the requirements laid down by SBP. Annual 2010Report 21 . The Bank is engaged in banking services as described in the Banking Companies Ordinance.O 411(I)/2008 dated April 28. 'Revised Forms of Annual Financial Statements'. I. 2006. 'Investment Property' for banking companies through BSD Circular Letter No. 1984. 'Financial Instruments: Disclosures' through its notification S. 4 dated February 17.e. It commenced its banking operations on November 1. However. the Surplus / (Deficit) on revaluation of available for sale securities (AFS) only. 1962 and the directives issued by the Securities and Exchange Commission of Pakistan (SECP) and the State Bank of Pakistan (SBP). after eliminating material inter branch transactions / balances. two statement approach shall be adopted i. A.2010 1 STATUS AND NATURE OF BUSINESS Bank Alfalah Limited (the Bank) is a banking company incorporated in Pakistan on June 21. 2 BASIS OF PRESENTATION In accordance with the directives of the Federal Government regarding the shifting of the banking system to Islamic modes. the requirements of these standards have not been considered in the preparation of these financial statements. In case the requirements differ. 1962 and the directives issued by SECP and SBP prevail. 7 dated April 20. 2006. investments have been classified and valued in accordance with the requirements prescribed by the State Bank of Pakistan through various circulars. the same shall continue to be shown separately in the Statement of Financial Position below equity. the SBP requirements prevail over the requirements specified in IFRS 8. Furthermore. 2002 till further instructions.1 (Revised) 'Presentation of Financial Statements'. 7 overseas branches (2009: 7 branches). Accordingly. the provisions of and directives issued under the Companies Ordinance. 2010 has clarified that for the purpose of preparation of financial statements in accordance with International Accounting Standard . The Bank's registered office is at B. the above requirements have been adopted in the preparation of these financial statements. The management of the bank believes that as the SBP has defined the segment categorisation in the above mentioned circular. separate 'Profit and Loss Account' and 'Statement of Comprehensive Income' shall be presented. 3 3. Approved accounting standards comprise of such International Financial Reporting Standards (IFRSs) issued by the International Accounting Standards Board and Islamic Financial Accounting Standards (IFASs) issued by the Institute of Chartered Accountants of Pakistan as are notified under the Companies Ordinance. Key financial figures of the Islamic Banking branches are disclosed in Annexure II to these financial statements. All banking companies in Pakistan are required to prepare their annual financial statements in line with the format prescribed under BSD Circular No. 1984. Banking Companies Ordinance. 1992. 'Financial Instruments: Recognition and Measurement' and International Accounting Standard (IAS) 40. The purchases and sales arising under these arrangements are not reflected in these financial statements as such. 2009. 10 dated August 26. the Securities and Exchange Commission of Pakistan has deferred the applicability of International Financial Reporting Standard (IFRS) 7. 2008. 1984. The State Bank of Pakistan has deferred the applicability of International Accounting Standard (IAS) 39. Accordingly. Lahore and Islamabad Stock Exchanges. 1984. may be included in the 'Statement of Comprehensive Income'. Building. 80 Islamic banking branches (2009: 60 branches) and 1 offshore banking unit (2009: 1 unit). 1992 as a public limited company under the Companies Ordinance. Accordingly. effective from the accounting year ended December 31.R. and Balance Sheet shall be renamed as 'Statement of Financial Position'. Chundrigar Road. the provisions of and directives issued under the Companies Ordinance. the State Bank of Pakistan has issued various circulars from time to time. but are restricted to the amount of facility actually utilised and the appropriate portion of mark-up thereon. However. The financial results of the Islamic banking branches have been consolidated in these financial statements for reporting purposes. IFRS 8 'Operating Segments' is effective for the Bank's accounting period beginning on or after January 1. The State Bank of Pakistan vide its BSD Circular No.

„Impairment of assets‟. It also clarifies that the general requirement of IAS 1 still apply. all payments to purchase a business are to be recorded at fair value at the acquisition date. In addition to incorporating IFRIC 8. The amendment requires that only expenditures that result in a recognised asset in the statement of financial position can be classified as investing activities. as defined by paragraph 5 of IFRS 8. „Group cash-settled share-based payment transactions‟. concurrent application with other approved accounting standards in place for conventional banks.g. the management believes that the aforementioned revision does not have any impact on the Bank's financial statements. 2010. 2010). 2009 requires the effects of all transactions with non-controlling interests to be recorded in equity if there is no change in control and these transactions will no longer result in goodwill or gains and losses. (effective from January 1. etc. The management of the Bank believes that presently this standard does not have any significant impact on these financial statements. 2010). IAS 36 (amendment). 2009). to measure the non-controlling interest in the acquiree either at fair value or at the non-controlling interest‟s proportionate share of the acquiree‟s net assets. and IFRIC 11. 2010: IAS 1 (amendment). „Measurement of non-current assets (or disposal groups) classified as held-for-sale‟ (effective on or after January 1. interpretations and amendments to published approved accounting standards that are effective in the current year The following new and amended standards and interpretations have been published and are mandatory for the financial year beginning on or after January 1. IFRS 5 has also been amended to require that assets are classified as held for distribution only when they are available for distribution in their present condition and the distribution is highly probable. IFRIC 17. The management of the Bank believes that presently this amendment does not have any impact on the Bank's financial statements. IAS 7 (amendment). IFRS 3 (Revised). The amendment is not expected to have any impact on the Bank's financial statements. By amending the definition of current liability. For example. This interpretation provides guidance on accounting for arrangements whereby an entity distributes non-cash assets to shareholders either as a distribution of reserves or as dividends. All acquisition related costs should be expensed. „Distribution of non-cash assets to owners‟ (effective on or after July 1. with some significant changes. IFRS 5 (amendment). IAS 27. The amendment clarifies that the potential settlement of a liability by the issue of equity is not relevant to its classification as current or non current.In addition. and a gain or loss is recognised in profit or loss account. particularly paragraph 15 (to achieve a fair presentation) and paragraph 125 (sources of estimation uncertainty) of IAS 1. before the aggregation of segments with similar economic characteristics).Murabaha issued by the Institute of Chartered Accountants of Pakistan. 22 Annual2010 Report . The management of the Bank believes that presently this amendment does not have any impact on the Bank's financial statements. The management of the Bank believes that presently this amendment does not have any impact on the Bank's financial statements. The standard has not been adopted by Islamic branches of conventional banks pending resolution of certain issues e. on an acquisition basis. any remaining interest in the entity is re-measured to fair value. 'Business Combinations' applicable for financial years beginning on or after July 1. At present. The standard also specifies the accounting when control is lost. The Bank has also adopted IAS 27 (Revised) for Group's consolidated financial statements and the impacts of this adoption have been duly incorporated in consolidated financial statements of the Group. IFAS 1 was effective for financial periods beginning on or after January 1. „ Operating segments‟ (that is. with contingent payments classified as debt subsequently remeasured through the income statement. 2006. „IFRS 2 – Group and treasury share transactions‟. The amendment provides clarification that IFRS 5 specifies the disclosures required in respect of noncurrent assets (or disposal groups) classified as held for sale or discontinued operations. Pakistan Banks Association and Modaraba Association of Pakistan have taken up the issue with the SBP and SECP. “Consolidated and Separate Financial Statements” applicable for financial years beginning on or after July 1. „Presentation of financial statements‟ .2 Standards. IFRS 2 (amendment). 2010). The amendment clarifies that the largest cash generating unit (or group of units) to which goodwill should be allocated for the purposes of impairment testing is an operating segment. effective January 1. 3. the amendments expand on the guidance in IFRIC 11 to address the classification of group arrangements that were not covered by that interpretation. 'Statement of Cash Flows' (effective from January 1. invoicing of goods. the Securities and Exchange Commission of Pakistan (SECP) has notified the Islamic Financial Accounting Standard (IFAS) 1 . recording of inventories. „Scope of IFRS 2‟. 2009 continues to apply the acquisition method to business combinations. the amendment permits a liability to be classified as non-current (provided that the entity has an unconditional right to defer settlement by transfer of cash or other assets for at least 12 months after the accounting period) notwithstanding the fact that the entity could be required by the counterparty to settle in shares at any time. There is a choice. The amendment is not expected to have any significant impact on the Bank's financial statements. The management of the Bank believes that presently this amendment does not have any impact on the Bank's financial statements.

either in the statement of changes in equity or in the notes to the financial statements. Interpretations and amendments to published approved accounting standards as adopted in Pakistan that are not yet effective The following standards and amendments to existing standards and interpretations have been published and are mandatory for the Bank's accounting period beginning on or after January 1. 3. entities are not permitted to recognise as an asset some voluntary prepayments for minimum funding contributions. This interpretation has no impact on the Bank's financial statements. issued in 2003. plant and equipment by entities that receive such transfers from their customers. minimum funding requirements and their interaction‟. At present. the management believes that the aforementioned interpretation does not have any impact on the Bank's financial statements. The Bank is currently in the process of assessing the impact. IAS 24 (revised). which is the Bank's functional and presentation currency. There are other new and amended standards and interpretations that are mandatory for accounting periods beginning on or after January 1. The Bank is currently in the process of assessing the impact of the aforementioned amendment on the financial statements of the Bank. The amounts are rounded to nearest thousand. and the amendments correct this. and the entity must then use that item to provide the customer with ongoing access to supply of goods and/or services. The Bank is currently in the process of asessing the impact of the aforementioned amendment on the disclosure requirements. Annual 2010Report 23 . There are other new and amended standards and interpretations that are mandatory for accounting periods beginning on or after January 1. „Prepayments of a minimum funding requirement‟. „Transfers of assets from customers‟ (effective on or after July 1. It clarifies how to account for transfers of items of property. 'Extinguishing Financial Liabilities with Equity Instruments' (effective for annual periods beginning on or after July 1. Earlier application is permitted. The amendments are effective for annual periods beginning January 1. The financial statements are presented in Pakistani Rupees. This was not intended when IFRIC 14 was issued. It supersedes IAS 24. 2011). 2011: IAS 1. „IAS 19 – The limit on a defined benefit asset. 2011 but are considered not to be relevant or do not have any significant effect on the Bank's operations and are therefore not detailed in these financial statements. of the revised standard on the related party disclosures. not disclosed in these financial statements. 4 BASIS OF MEASUREMENT 4. 2010 but are considered not to be relevant or to have any significant effect on the Bank's operations and are. „Related party disclosures‟. Presentation of financial statements (effective January 1. This interpretation provides guidance on the accounting for debt for equity swaps. IFRIC 19. The revised standard clarifies and simplifies the definition of a related party and removes the requirement for government-related entities to disclose details of all transactions with the government and other government-related entities. 2011. Early adoption of standards The Bank did not early adopt new or amended standards in 2010. IFRIC 14 (amendments). plant and equipment.3 Standards. The amendments correct an unintended consequence of IFRIC 14.1 Accounting convention These financial statements have been prepared under the historical cost convention except that certain fixed assets are stated at revalued amounts. The amendment clarifies that an entity will present an analysis of other comprehensive income for each component of equity. 2009). Without the amendments. 2010). issued in November 2009. „Related party disclosures‟.IFRIC 18. and held for trading and available for sale investments and derivative financial instruments are measured at fair value. if any. The interpretation also applies to agreements in which an entity receives cash from a customer when that amount of cash must be used only to construct or acquire an item of property. therefore. The amendments should be applied retrospectively to the earliest comparative period presented.

2 Critical accounting estimates and judgements The preparation of financial statements in conformity with approved accounting standards as applicable in Pakistan requires management to make judgements.3 Investments The Bank classifies its investments as follows: Held for trading These are investments. 5. These are recorded as under: Sale of securities under repurchase agreements Securities sold subject to a repurchase agreement (repo) are retained in the financial statements as investments and the counter party liability is included in borrowings. balances with treasury banks. dealers margin or are securities included in a portfolio in which a pattern of short-term profit taking exists.4. 5. interest rate movements. other than those in subsidiaries and associates.3 and 9) classification and provisioning against advances (notes 5. Purchase of securities under resale agreements Securities purchased under agreement to resell (reverse repo) are not recognised in the financial statements as investments and the amount extended to the counter party is included in lendings. balances with other banks in current and deposit accounts.2 Lendings to / borrowings from financial institutions The Bank enters into transactions of repos and reverse repos at contracted rates for a specified period of time. estimates and assumptions that affect the reported amounts of assets and liabilities and income and expenses. The difference between the purchase and contracted resale price is accrued on a time proportion basis over the period of the contract and recorded as income.9 and 29) accounting for defined benefit plan (notes 5. 5. The difference between the sale and contracted repurchase price is accrued on a time proportion basis over the period of the contract and recorded as an expense. Available for sale These are investments. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period. national prize bonds. which do not fall under the 'held for trading' and 'held to maturity' categories. or in the period of revision and future periods if the revision affects both current and future periods.1 Cash and cash equivalents Cash and cash equivalents comprise of cash in hand. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances. Significant accounting estimates and areas where judgements were made by the management in the application of accounting policies are as follows: i) ii) iii) iv) 5 classification and provisioning against investments (notes 5. These estimates and assumptions are reviewed on an ongoing basis. It also requires management to exercise judgement in application of its accounting policies. 24 Annual2010 Report . Held to maturity These are investments with fixed or determinable payments and fixed maturities and the Bank has the positive intent and ability to hold them till maturity. any overdrawn nostro accounts and call lending having maturity of 3 months or less.10 and 34) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The principal accounting policies applied in the preparation of these financial statements are set out below. which are either acquired for generating a profit from short-term fluctuations in market prices.4 and 10) income taxes (notes 5.

excluding investment in subsidiary and associates are valued at the lower of cost and break-up value. if any. the impairment loss is recognised in the profit and loss account.Associates Associates are all entities over which the Bank has significant influence but not control. In case of impairment of available for sale securities. Break-up value of equity securities is calculated with reference to the net assets of the investee company as per the latest available audited financial statements. less accumulated impairment losses.5 Fixed assets Tangible assets Fixed assets except office premises are shown at historical cost less accumulated depreciation and accumulated impairment losses. investments classified as 'held to maturity' are carried at amortised cost. In accordance with the requirements of State Bank of Pakistan. Impairment loss in respect of investments classified as available for sale (except term finance certificates and sukuk bonds) and held to maturity is recognised based on management's assessment of objective evidence of impairment as a result of one or more events that may have an impact on the estimated future cashflows of the investments. Investment in associates is carried at cost less accumulated impairment losses. if any. Subsidiary Subsidiary is an entity over which the Bank has significant control. the cumulative loss that has been recognised directly in surplus on revaluation of securities on the balance sheet below equity is removed therefrom and recognised in the profit and loss account. Provision for diminution in the value of term finance certificates and sukuk bonds is made as per the Prudential Regulations issued by the State Bank of Pakistan. depreciation is charged over the economic life of the asset using straight line basis. quoted securities other than those classified as 'held to maturity' are subsequently remeasured to market value. The net provision made / reversed during the year is charged to profit and loss account and accumulated provision is netted-off against advances. For investments classified as held to maturity. which is the date at which the Bank commits to purchase or sell the investments. Gains or losses on disposals of investments during the year are taken to the profit and loss account. Assets under Ijarah are depreciated over the period of lease term. Advances are written off when there are no realistic prospects of recovery. However. Office premises (which includes land and buildings) is stated at revalued amount less accumulated depreciation. Provisions pertaining to overseas advances are made in accordance with the requirements of regulatory authorities of the respective countries. 5. Investments classified as 'held for trading' are initially recognised at fair value and transaction costs are expensed in the profit and loss account. Investment in subsidiary and associates are carried at cost.4 Advances Loans and advances Loans and advances including net investment in finance lease are stated net of provisions against non-performing advances. Unquoted equity securities. All purchases and sales of equity investments that require delivery within the time frame established by regulation or market convention are recognised at trade date. Annual 2010Report 25 . Surplus / (deficit) arising on revaluation of quoted securities which are 'held for trading' is taken to the profit and loss account. Investments other than those categorised as 'held for trading' are initially recognised at fair value which includes transaction costs associated with the investment. in the event the asset is expected to be available for re-ijarah. if any. Ijarah Assets leased out under 'Ijarah' are stated at cost less accumulated depreciation and accumulated impairment losses. Surplus / (deficit) arising on revaluation of securities classified as 'available for sale' is taken to a separate account shown in the balance sheet below equity. if any. In accordance with the requirements specified by the State Bank of Pakistan. Specific and general provisions against Pakistan operations are made in accordance with the requirements of the Prudential Regulations issued by the State Bank of Pakistan from time to time. A significant or prolonged decline in fair value of an equity investment below its cost is also considered an objective evidence of impairment. if any. 5. Historical cost includes expenditures that are directly attributable to the acquisition of the items. Investment in subsidiary is carried at cost less accumulated impairment losses.

The surplus on revaluation of fixed assets to the extent of incremental depreciation charged on the related assets is transferred to unappropriated profit. These are transferred to specific assets as and when assets become available for use. if any. if any. if appropriate. A non-current asset is not depreciated while classified as held for sale or while part of a disposal group classified as held for sale. Office premises are revalued by professionally qualified valuers with sufficient regularity to ensure that the net carrying amount does not differ materially from their fair value. less impairment loss. useful lives and depreciation method are reviewed and adjusted. Impairment losses are recognised through the profit and loss account for any initial or subsequent write down of the non-current asset (or disposal group) to fair value less costs to sell. The resulting impairment loss is taken to the profit and loss account except for impairment loss on revalued assets. only when it is probable that future economic benefits associated with the item will flow to the Bank and the cost of the item can be measured reliably. The useful lives and amortisation method are reviewed and adjusted.9 Taxation Income tax expense comprises current and deferred tax. Such intangible assets are amortised using the straight-line method over their estimated useful lives. Depreciation on additions is charged from the date on which the assets are available for use and ceases on the date on which they are disposed of.Depreciation is charged to income applying the straight-line method using the rates specified in note 11. All expenditure connected with specific assets incurred during installation and construction period are carried under this head. if any. the recoverable amount of such assets is estimated and impairment losses are recognised immediately in the financial statements.7 Non-current assets held for sale The Bank classifies a non-current asset (or disposal group) as held for sale if its carrying amount will be recovered principally through a sale transaction rather than through continuing use. The depreciation charge for the year is calculated after taking into account residual value. Deficit arising on subsequent revaluation of fixed assets is adjusted against the balance in the above mentioned surplus account as allowed under the provisions of the Companies Ordinance. where considered necessary relating to prior years. 1984. 5. 26 Annual2010 Report . The residual values. if any. in which case it is recognised in equity. 5. which arises from assessments / developments made during the year. Gains and losses on disposal of fixed assets are taken to the profit and loss account except that the related surplus / deficit on revaluation of fixed assets (net of deferred taxation) is transferred directly to unappropriated profit. which is adjusted against related revaluation surplus to the extent that the impairment loss does not exceed the surplus on revaluation of that asset. as appropriate. The charge for current tax also includes adjustments. A non-current asset (or disposal group) held for sale is carried at the lower of its carrying amount and the fair value less costs to sell. Income tax expense is recognised in the profit and loss account except to the extent that it relates to items recognised directly in equity. Intangible assets Intangible assets having a finite useful life are stated at cost less accumulated amortisation and accumulated impairment losses. Current Provision for current taxation is based on taxable income at the current rates of taxation after taking into consideration available tax credit and rebates. 5.2 to these financial statements. 5. Maintenance and normal repairs are charged to income as and when incurred. Subsequent costs are included in the asset's carrying amount or are recognised as a separate asset. Surplus arising on revaluation is credited to the surplus on revaluation of fixed assets account.8 Impairment The carrying amount of assets is reviewed at each balance sheet date to determine whether there is any indication of impairment of any asset or group of assets. Subsequent gains in fair value less costs to sell are recognised to the extent they do not exceed the cumulative impairment losses previously recorded. if appropriate at each balance sheet date. at each balance sheet date. If any such indication exists. if any. Intangible assets having an indefinite useful life are stated at acquisition cost.6 Capital work in progress Capital work-in-progress is stated at cost less accumulated impairment losses.

Expected recoveries are recognised by debiting the customer‟s account. 5. where the timing of the reversal of the temporary difference can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future. Borrowing costs that are directly attributable to the acquisition. Borrowing / deposit costs are recognised as an expense in the period in which these are incurred using effective mark-up / interest rate method to the extent that they are not directly attributable to the acquisition of or construction of qualifying assets. 5. legal or constructive obligation as a result of past events.Deferred Deferred tax is recognised using the balance sheet liability method on all temporary differences arising between the carrying amounts of assets and liabilities for financial reporting purposes and amounts used for the taxation purposes. The Bank has no further payment obligations once the contributions have been paid.11 Borrowings / deposits and their cost a) b) Borrowings / deposits are recorded at the proceeds received. Other provisions are recognised when the Bank has a present. 5. which is adjusted against the related surplus / deficit in accordance with the requirements of the International Accounting Standard 12 . Deferred tax asset is reduced to the extent that it is no longer probable that the related tax benefits will be realised. Acceptances are accounted for as off balance sheet transactions and are disclosed as contingent liabilities and commitments. Contributions to the fund are made on the basis of actuarial recommendations.13 Acceptances Acceptances comprise undertakings by the Bank to pay bills of exchange drawn on customers. Charge to profit and loss account is stated net-of expected recoveries. Projected Unit Credit Method is used for the actuarial valuation. Provisions are reviewed at each balance sheet date and are adjusted to reflect the current best estimate. Deferred tax liability is not recognised in respect of taxable temporary differences associated with exchange translation reserves of foreign branches.10 Employee benefits Defined benefit plan The Bank operates an approved funded gratuity scheme covering eligible employees whose period of employment with the Bank is five years or more. The Bank expects most acceptances to be simultaneously settled with the reimbursement from the customers. it is probable that an outflow of resources will be required to settle the obligation and a reliable estimate of the amount can be made. 5. A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available and the credits can be utilised. The Bank also recognises a deferred tax asset / liability on the deficit / surplus on revaluation of fixed assets and securities. Actuarial gains / losses in excess of 10 percent of the higher of actuarial liabilities or plan assets at the end of the last reporting year are recognised over the average lives of employees.12 Provisions Provision for guarantee claims and other off balance sheet obligations is recognised when intimated and reasonable certainty exists for the Bank to settle the obligation. The contributions are recognised as employee benefit expense when they are due. Defined contribution plan The Bank operates a recognised provident fund scheme for all its permanent employees to which equal monthly contributions are made both by the Bank and employees at the rate of 8. The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amounts of assets and liabilities using the tax rates enacted at the balance sheet date. construction or production of a qualifying asset (one that takes a substantial period of time to get ready for use or sale) is capitalised as part of the cost of that asset. Gratuity is payable to staff on completion of the prescribed qualifying period of service under the scheme. Annual 2010Report 27 .33 percent of basic salary.Income Taxes.

Gains / losses on termination of leased contracts. Fee. The results of foreign operations are translated at average rate of exchange for the year. commission and brokerage income except income from guarantees are accounted for on receipt basis. Ijarah income is recognised on an accrual basis as and when the rental becomes due. Where debt securities are purchased at a premium or discount. commission and brokerage Fee. 5. in accordance with the requirements of the Prudential Regulations of the State Bank of Pakistan and recognised on receipt basis. Contingent liabilities / commitments for letters of credit and letters of guarantee denominated in foreign currencies are expressed in rupee terms at the exchange rates ruling on the balance sheet date.14 Revenue recognition Advances and investments Mark-up income on loans and advances. Forward contracts other than contracts with the State Bank of Pakistan relating to foreign currency deposits are valued at forward rates applicable to the respective maturities of the relevant foreign exchange contract. 28 Annual2010 Report . Unrealised lease income and mark-up / return on non-performing advances are suspended. investments and profit on murabaha and musharika financing are recognised on a time proportion basis. These are recognised in the profit and loss account on disposal. The forward cover fee payable on such contracts is amortised over the term of the contracts. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the profit and loss account. using the effective yield method. Foreign operations Assets and liabilities of foreign operations are translated into rupees at the exchange rate prevailing at the balance sheet date. Dividend income is recognised at the time when the Bank‟s right to receive the dividend has been established. Commission on guarantees is recognised on time proportion basis. Under this method. where necessary. those premiums / discounts are amortised through the profit and loss account over the remaining maturity.5.15 Foreign currency translation Functional and presentation currency Items included in the financial statements are measured using the currency of the primary economic environment in which the Bank operates. front end fee and other lease income are recognised as income when they are realised. the unrealised lease income (excess of the sum of total lease rentals and estimated residual value over the cost of leased assets) is deferred and taken to income over the term of the lease period so as to produce a constant periodic rate of return on the outstanding net investment in the lease. debt securities. Commitments Commitments for outstanding forward foreign exchange contracts are disclosed at contracted rates. Transactions and balances Transactions in foreign currencies are translated into Pakistani rupees at the exchange rates prevailing on the transaction date. Lease financing / Ijarah Financing method is used in accounting for income from lease financing. Translation gains and losses arising on revaluations of net investment in foreign operations are taken to Exchange Translation Reserve in the statement of comprehensive income. documentation charges. Forward purchase contracts with the State Bank of Pakistan relating to foreign currency deposits are valued at the spot rate prevailing on the balance sheet date.

20 Segment reporting A segment is a distinguishable component of the Bank that is engaged either in providing product or services (business segment). trade finance.19 Earnings per share The Bank presents basic and diluted earnings per share (EPS) for its shareholders. underwriting. funding. real estate. equity. 5. guarantees. corporate finance. syndication. except appropriations which are required under the law. if any. or to realise the assets and to settle the liabilities simultaneously. The Bank's primary format of reporting is based on business segments. banking service. Any changes in the fair value of derivative financial instruments are taken to the profit and loss account. own position securities. lending. commodities. bills of exchange and deposits. trust and estates. Corporate finance Corporate banking includes services provided in connection with mergers and acquisition. b) Geographical segments The Bank operates in three geographical regions being: Pakistan Asia Pacific (including South Asia) Middle East Annual 2010Report 29 . 5. Income and expense items of such assets and liabilities are also off-set and the net amount is reported in the financial statements. IPO and secondary private placements. credit. a) Business segments Trading and sales It includes fixed income. after the balance sheet date. equity. leasing.5. or in providing products or services within a particular economic environment (geographical segment). brokerage debt and prime brokerage.18 Dividend and appropriation to reserves Dividend and appropriation to reserves. private lending and deposits. factoring.16 Derivative financial instruments Derivative financial instruments are initially recognised at fair value on the date at which the derivative contract is entered into and subsequently remeasured at fair value using appropriate valuation techniques. foreign exchanges. export finance. Commercial banking Commercial banking includes project finance. high yield). Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Bank by the weighted average number of ordinary shares outstanding during the year. trust and estates investment advice. research. lending and repos. which is subject to risks and rewards that are different from those of other segments. Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding for the effects of all dilutive potential ordinary shares. are recognised as a liability in the Bank's financial statements in the year in which these are approved. debts (government. 5. 5.17 Off-setting Financial assets and financial liabilities are off-set and the net amount reported in the financial statements only when there is a legally enforceable right to set-off the recognised amount and the Bank intends either to settle on a net basis. merchant / commercial / corporate cards and private labels and retail. privatisation. banking services. All derivative financial instruments are carried as assets where fair value is positive and as liabilities where fair value is negative. Retail banking It includes retail lending and deposits. securitisation.

179.697 25. 6.926 1.255 768.2 6.005 16.067 6. This section requires banking companies to maintain a local currency cash reserve in the current account opened with the SBP at a sum not less than such percentage of its time and demand liabilities in Pakistan as may be prescribed by SBP.061 3. 111. 2008.431 35.435.850.387 million) With State Bank of Pakistan in Local currency current account Foreign currency current account Foreign currency deposit account With other central banks in Foreign currency current account Foreign currency deposit account With National Bank of Pakistan in Local currency current account National Prize Bonds 2.469.294 3.2 7.486 157.364 6.129.590 1. 2009: Rs.722. 14 dated June 21.776.011.3 15.326.Note 2010 2009 (Rupees in „000) 6 CASH AND BALANCES WITH TREASURY BANKS In hand Local currency (including in transit 2010: Rs. cash reserve of 5% is required to be maintained with the State Bank of Pakistan on deposits held under the New Foreign Currency Accounts Scheme (FE-25 deposits).322.841 1. Profit rates on these deposits are fixed by SBP on a monthly basis. 6.1 The local currency current account is maintained with the State Bank of Pakistan (SBP) as per the requirements of Section 36 of the State Bank of Pakistan Act.340.273 million.981.395 million) Foreign currencies (including in transit 2010: Nil.950 12.180 20.056.3 30 Annual2010 Report . 2009: Rs.798 41.497 6.197.133.984. 6.1 6.012 6.503.081.509 13. The State Bank of Pakistan has not remunerated these deposit accounts during the year.928.619.1 7.4 4. 3.637. 1956. 9 dated December 3.134 2.050 5.046 1.993.549 5. 18.980 7.220 2.867.784 7.561 22.454 6.144.025 2.2 As per BSD Circular No.480.4 Deposits with other central banks are maintained to meet their minimum cash reserves and capital requirements pertaining to the foreign branches of the Bank. 2007.167.089 4. 7 BALANCES WITH OTHER BANKS In Pakistan On current account On deposit account Outside Pakistan On current account On deposit account 1.3 Special cash reserve of 15% is required to be maintained with the State Bank of Pakistan on FE-25 deposits as specified in BSD Circular No.639 7.

Note 2010 2009 (Rupees in „000) 8 LENDINGS TO FINANCIAL INSTITUTIONS Call money lendings Repurchase agreement lendings (Reverse Repo) 8.2 Particulars of lendings to financial institutions In local currency In foreign currencies 8.75% per annum (2009: 11.354.521 .782.3 1.039 Market Treasury Bills Pakistan Investment Bonds 1.455 360.1 8.556 3.182 4.727 1.039 14.435 These represent short-term lendings to financial institutions against investment securities.715.1.182 6.715.654.455 10.20% per annum) with maturities upto January 2011 (2009: February 2010).00% to 13.2 This represents funds deposited with various banks at a profit rate of 5.182 Annual 2010Report 31 .497.1 These represent lendings to financial institutions at interest rates upto 20% per annum (2009: 13.396 11. the Bank is entitled to earn interest from the correspondent banks at agreed upon rates.237.62% per annum) with maturities upto August 2011 (2009: July 2010).374 6.237.25% per annum). 8.151.521 11.3 & 8.293.3 This includes placements of funds generated through foreign currency deposits scheme (FE-25).947.085.20% to 2.75% per annum (2009: 0.374 1.435 8.4 4.182 11.40% per annum) with maturities upto May 2013 (2009: February 2010).715. at interest rates ranging from 0.00% to 13.1 7.085.518 360.710. This includes amount held in Automated Investment Plans. The balance is current by nature and on increase in the balance above a specified amount. 8.12% to 1.039 2. These carry mark-up at rates ranging from 13.00% per annum (2009: 5.518 1.828.039 10.237.354. 7.396 14.497.669.75% to 13.4 Securities held as collateral against lendings to financial institutions Note Held by Bank ------------------------------------ 2010 Further given as collateral Total Held by Bank collateral 2009 Further given as Total Rupees in '000 .947.151.556 12.1.727 1.7.

675.861 89.084.393.686.155.090 129.1.000 17.809.563.811) 99.(1.588.431 5.714.493 .000 353.361 2.360 3.074 395.084.21 966.298 25.Listed Fully paid up ordinary shares / units .348 67.069.524.511.879 69.946 3.924.816 3.027 129.796 417.319 32 Annual 2010 Report .380.714.114.240.509.000 250.686.4.2 20.480 18.816 11.041 4.(2.955 38.Unlisted Term Finance Certificates Preference Shares .620 438.Unlisted Sukuk Bonds Held to maturity securities Market Treasury Bills Pakistan Investment Bonds Term Finance Certificates Overseas Government Treasury Bills Pakistan Dollar Bonds Pakistan Euro Bonds Credit Linked Note Overseas Bonds Preference Shares .563.440 253.440 253.net Deficit on investment in associate Total investments 9.711 4.474 68.753 76.511.216 1.000 .3 9.563 .090 2.041.990 100.208 1.549.440 35.041 4.657.807 90.620 438.804.568) 111.392) - .480 395.392 253.1.588.796 417.744 5.511.158) - .673 845.408.9 9.074.000 130.000 550.1 INVESTMENTS .784.183.746.882 8.796 417.834 9.499.301 8.809.679 43.621.626.554) 1.633 845.883.711 (325.883.957 68.844.000 353.425.879 76.310 19.368 40.536 - 966.881.069.379.990 100.027 - 129.931.069.020.661.949 76.772 856.821 .570.675.800 4.992 9.493 5.726 202.368 8.811) 113.000 115.711 24.069.469 11.849 367.325 113.348 8.946 4.366.703 (325.367 4.493 5.270 5.392 68.509.Unlisted Sukuk Bonds Associates Warid Telecom (Private) Limited Wateen Telecom Limited Alfalah Insurance Limited Alfalah GHP Value Fund Alfalah GHP Income Multiplier Fund Alfalah GHP Islamic Fund Alfalah GHP Investment Management Limited Subsidiary Alfalah Securities (Private) Limited Investments at cost Less: Provision for diminution in value of investments Investments (net of provisions) Surplus on revaluation of held for trading securities .388 1.300 (313.758 9.net (Deficit) / surplus on revaluation of available for sale securities .213.000 130.568) 1.766 (13.074.408.213.034.990 100.240.366.980 19.NET Investments by types: 2010 Note Held by Bank Given as collateral Total Held by Bank 2009 Given as collateral Total ------------------------------------Rupees in '000-----------------------------------Held for trading securities Market Treasury Bills Fully paid up ordinary shares / units .Listed Available for sale securities Market Treasury Bills Pakistan Investment Bonds Fully paid up ordinary shares / units .300 (318.196 250.990 100.23 20.000 550.020.809.366.474 68.310 18.034.010.17.440 - 253.093 40.000 114.545 2.367 421.074 384.788.678) 2.788.183.673 384.159.836.949 1.176 39.370.361 .431 4.000 250.744 277.946.563 1.928 (2.196 250.474 68.900 53.746.124) 111.176 4.000 100.852 1.946.041.980 4.1.955 1.753 76.849 354.821 129.879 (5.239 90.169.626.224 4.366.216 202.474 68.493 5.772 856.379.633 421.836.158) 99.224 40.281 9.852 40.5.821 1.093 39.000 130.498.821 1.997 40.900 1.208 4.332.992 5.796 417.726 277.741.000 130.000 - .711 3.511.374 (1.638 9.

208 22.054.3 Investments include certain approved / government securities which are held by the Bank to comply with the Statutory Liquidity Requirement determined on the basis of the Bank's demand and time liabilities as set out under section 29 of the Banking Companies Ordinance. five.496.458.671 438.8 9. The rates of profit range from 8.Overseas Government Treasury Bills .Listed companies / mutual funds .958.676.241.18 9.159.19 9.Preference Shares .Overseas Bonds .932 19.Pakistan Dollar Bond .218 2.21 9.9 45.183.00% per annum) with maturities from December 2011 to July 2020 (2009: December 2010 to September 2019).7 9.849.924.Pakistan Euro Bond 9.Pakistan Investment Bonds .400 2.01% to 13.Un-listed companies .308.807 1.703 (325.601.374 (1. 35 million (2009: Rs.506 12.25% per annum) with maturities upto December 2011 (2009: December 2010).425.5 Pakistan Investment Bonds (PIBs) are for periods of three.374. These also include PIBs having face value of Rs.431 3.861 9.428 18.300 (318.821 277.476.967.00% to 14.15 9.Sukuk Bonds .568) 3.158) 2. The effective rates of profit on Market Treasury Bills range between 12.247 76.14 9.Unlisted 9.250 4. 9. 35 million) pledged with the National Bank of Pakistan as security to facilitate Telegraphic Transfer discounting facility.036 190.Listed TFCs .5 9.11 9.772 84.6 9.Overseas Government Bonds .560 1.488 395.020 10.158 384.00% per annum (2009: 8.633 68.719 Term Finance Certificates.16 9.957 Investment in subsidiary company Investment in associates Total investments at cost Provision for diminution in value of investments Surplus on revaluation of held for trading securities .2 Investments by segments Federal Government Securities .10 9.399. Annual 2010Report 33 .849 354.753 100.653 129.512 856.349.2 20.13 9.17 1.673 845.686.706 421.938 9.367 24. Debentures.811) 99.158.737 76.074 1.041.883.169.95% per annum (2009: 11.393 46.12 1.853.494 Fully Paid up Ordinary Shares / Preference Shares / Units / Certificates .821 242.50% to 13.4 9.949 115.000 5.23 20. 1962.net (Deficit) / Surplus on revaluation of available for sale securities .349.000 5.759. ten and fifteen years.net Deficit on investment in associate Total investments 9. 9.Credit Linked Note 9.4 Market Treasury Bills are for the periods of six months and one year.704 20. Notes and Participation Term Certificates .3 (2.Market Treasury Bills . Bonds.00% to 14.251.022.Sukuk Bonds .539.258.678) 113.835 25.744 1.Un-listed TFCs .Note 2010 2009 (Rupees in „000) 9.467 129.

000 million (2009: 5.079 50.125% per annum) and are due for maturity in March 2016 (2009: March 2016).000.48% per annum (2009: 7. 9.95 million for a period of five years.240 400.000 10.000 381. 1. 18.882 50.000 1.525 75.654.000.000 million) issued by the Government of Pakistan.538 million (2009: 1.000 600.92% per annum) and 13.738.659 150.000 912 100.695 100.397.821 967.000 1.500.14% per annum (2009: 11.60% per annum).38% to 3.960.000 9.000 200.7 This represents sukuk bonds of Rs.893.549 729.000 145.958 50.503.542 127.870 327.635 15.239 454.949.161 97.525 487.000 50. The rates of profit on these bonds ranges between 12.000 50. These bonds carry interest at 7.951 1.903 million) and BDT 66.919 41.125% per annum (2009: Nil) and are due for maturity in March 2016 (2009: Nil).025 million) issued by the State Bank of Pakistan for a period of three years and SSGC sukuk of Rs.000 450.260 1.67% to 12.812% per annum (2009: 7.133 million) issued by Water and Power Development Authority (WAPDA) for a period of ten years.700 million (2009: BDT 66.9 This represents Pakistan Euro Bonds of US Dollar 9. These bonds carry interest at 8.435 1.952 150.252 2.653 258.411 181. The rates of profit on Government of Afghanistan bond ranges from 2.720.64% to 14.000 30.000 1. 85.500.290.000 75.534 504.10 Particulars of investments in listed companies / mutual funds include the following: 2010 2009 (Number of shares / certificates / units) MUTUAL FUNDS AKD Income Fund Crosby Pheonix Fund AMZ Plus Income Fund Askari Income Fund Atlas Income Fund Dawood Money Market Fund First Habib Income Fund IGI Income Fund JS Aggressive Income Fund JS Income Fund KASB Liquid Fund MCB Dynamic Cash Fund Meezan Balanced Fund Meezan Islamic Income Fund NAFA Income Opportunity Fund (formerly NAFA Cash Fund) NAFA Stock Fund Pak Oman Advantage Fund Pak Oman Advantage Islamic Income Fund Pakistan Capital Market Fund Pakistan Income Fund Pakistan Strategic Allocation Fund Reliance Income Fund United Islamic Income Fund United Money Market Fund NON LIFE INSURANCE Adamjee Insurance Company Limited 2010 2009 (Rupees in „000) 140.000 46.952 504. 9. 9. 9.60% per annum (2009: 10.000 million (2009: 8.523.043.733.916 9.435 18.033 15.901 8.931.000 600.941 1.000 49.6 These represent Overseas Government Bonds issued by the Government of Afghanistan and the Government of Bangladesh amounting to AFA 1.20% to 7.58% per annum) while Government of Bangladesh bond carries profit at 10.9.355 9.700 million) respectively.67% to 12. These bonds have maturities upto March 2014 (2009: March 2014).754 70.64% per annum respectively.539.180 502.919 37.537 488.317 34 Annual2010 Report . ijarah sukuk of Rs.652 685.000 - 41. between 12.829 million (2009: AFA 876.951 - 971.167 9.12% to 13.876 million (2009: Nil) issued by the Government of Pakistan.759 15.850 35.56% per annum (2009: 11.000 30.882 100.156 2.000 9.97% per annum).8 This represents Pakistan Dollar Bonds of US Dollar 5.000 972.500 50.079 17.000 972.500 50.

125.088 21.760 100.012 1.980 683 38.000 170.000 250.175 106.591 1.177 4.559 6.092 1.000 2.297.287 1.000 1.888.991 72.320 3.000 5.325 51.000 2.887 1.369.051 9.525 29.345 1.000 1.953.924 3.S Bank Limited MCB Bank Limited National Bank of Pakistan NIB Bank Limited Samba Bank Limited The Bank of Punjab United Bank Limited ICB Islamic Bank Limited FINANCIAL SERVICES Arif Habib Investment Management Limited Arif Habib Corporation Limited (formerly Arif Habib Securities Limited) Jahangir Siddiqui & Company Limited KASB Securities Limited CONSTRUCTION AND MATERIALS Al-Abbas Cement Company Limited D.337 17.200 25.000.000 76.601.667.802 93.378.000 2.603 918 10.232 15.500.935 64.000 9.000 7.403.000 358.169 1.000 2.000 1.553 2.021 319 87.000 7.556 500.570 400.145 2.005 98.794 50.134 135.000 175.923.800.310.000 100.095.500 3.640 7.527 41.2010 2009 (Number of shares / certificates / units) BANKS Allied Bank Limited Askari Bank Limited J.757 41.592 1.260 81.639 1.926 75.639.685 16.667.770 562.000 50.375 1.273.170 94.417 22.929 1.586 Annual 2010Report 35 .982 9.000 150.793 34.000 1.972 263.000 100.756 3.121 10.339.977 15.297 12.000 207.846 47.000.842 49.980 6.000 1.000 1.810 605.135 60.000 300.000 3.640.784 4.000 268.026 24.710 30.067 225.632 28.924 1.448 47.970.279 3.000 1.G Khan Cement Limited Fauji Cement Company Limited Fecto Cement Limited Lucky Cement Limited OIL AND GAS PRODUCER Oil and Gas Development Company Limited Pakistan Oilfields Limited Pakistan Petroleum Limited Pakistan State Oil Company Limited ELECTRICITY Kohinoor Energy Limited Kot Addu Power Company Limited Southern Electric Power Company Limited Karachi Electric Supply Company Limited The Hub Power Company Limited Nishat (Chunian) Power Company Limited Nishat Power Company Limited PERSONAL GOODS Azgard Nine Limited Hira Textile Mills Limited Nishat Mills Limited Nishat (Chunian) Mills Limited FIXED LINE TELECOMMUNICATION Pakistan Telecommunication Company Limited Telecard Limited Worldcall Telecom Limited CHEMICALS Dewan Salman Fiber Limited Engro Corporation Limited Fatima Fertilizer Company Limited Fauji Fertilizer Bin Qasim Limited Fauji Fertilizer Company Limited ICI Pakistan Limited Lotte Pakistan PTA Limited 2010 2009 (Rupees in „000) 210.162 1.000 3.860 30.318.000 1.594 100.544 500.000 39.126 75.139 121.252 121.151.545 15.600 4.710 100.000 2.770 50.673 60.640 2.318.242.000 804.000 424.269 1.403.000 5.979 37.118 34.210 3.000 1.000 110.480.000 1.

000.2010 2009 (Number of shares / certificates / units) INDUSTRIAL METALS AND MINING Crescent Steel & Allied Products Limited REAL ESTATE INVESTMENT AND SERVICES Pace Pakistan Limited GENERAL INDUSTRIALS Tri.17 Period of financial statements: June 30.000 129.000.000.725 24 16 Society for Worldwide Interbank Financial Telecommunication Chief Executive: Mr.025.000.080 1.000 5.948 36 Annual2010 Report .000.725 5.467 9.821 9. 428.52 Period of financial statements: June 30.531 Pakistan Export Finance Guarantee Agency Limited Chief Executive: Mr.653 2.000 50. 2010 (Un-audited) 4.71 Period of financial statements: December 31. Michael Steven potter (Paid-up value of each shares is BDT. S.000.000.000 5. Lazaro Campos Break-up value per share: Rs.042 121. Zaeem Break-up value per share: Rs.531 572.096 4.000 STS Holdings Limited Redemption: Semi annual redemptions over 5 years ending in 2012 Break-up value per share: BDT. 2009 (Audited) 5.16 Period of financial statements: December 31.000 121.Pack Limited 2010 2009 (Rupees in „000) 962. Habib Ahmed Break-up value per share: Rs.11 Investments in unlisted companies 2010 2009 (Number of shares) 2010 2009 (Rupees in „000) 572.059 - 1. 8.Unlisted 3.87 Date of financial statements : December 31.973 1. 2010 (Audited) Al-Hamra Avenue (Private) Limited Chief Executive: Mr.821 129. 2008 Al-Hamra Hills (Private) Limited Chief Executive: Mr.000 1.000 7.000 25.000 70. 286.087 12.118. Syed Mahbubur Rahman (Paidup value of each shares is BDT. 10) BRAC Bank Limited Redemption: Annual redemptions over 5 years ending in 2012 Break-up value per share: BDT. 11. 2009 Chief Executive : Mr.M.830 1.225. 100) 36.12 Investments in preference shares .967.312 60.014 - 29. Habib Ahmed Break-up value per share: Rs.02 Date of financial statements : December 31. 9. 1.000 50.000.000 5.096 7.000 70.263 2.000 10.476. 2009 Chief Executive : Mr.

000) certificates of Rs. February 1. Redemption: A nominal amount i.000 United Hospitals Limited Redemption: Annual redemptions over 5 years ending in 2011 Break-up value per share: BDT.000 - 242.930 37 .000 each Mark up: Average Six Months KIBOR (Ask Side) + 150 basis points per annum (no floor no cap) Redemption: The TFC is structured to redeem 0. Secured 2010 277. Abdus Samad Khan Trust Investment Bank Limited Redemption: Any time after the issuance of preference shares Break-up value per share: Rs. 2013 Rating: AAA (PACRA) Chief Executive: Mr.510 1.840 47.e.390 94.431 2009 (Rupees in „000) Askari Bank Limited (2nd Issue) 20.000 (2009: 20. Faridur Rehman Khan (Paid-up value of each shares is BDT. 100) First Dawood Investment Bank Limited Redemption: 25 percent redemption in 4th year. 0. Maturity: Seven years from the date of issue i. Maturity: Eight years from date of disbursement i.744 9.13 Particulars of Term Finance Certificates . 5. Hamuyun Nabi Jan 45.000 (2009: 10. 5. 2010 Chief Executive : Mr.500. Break-up value per share: Rs. 2013 Rating: AA.000 each Mark up: Average Six Months KIBOR + 200 basis points prevailing one working day prior to the beginning of each semi annual period.e.000 - 2.16 percent of the issue amount will be re-paid equally in each of the redemption periods during the first four years. 96.000) certificates of Rs.(3rd Issue) 10.2010 2009 (Number of shares) 2010 2009 (Rupees in „000) 375. Mohsin Ali Nathani Annual 2010Report 99. 2010 Chief Executive: Mr. Mohammad Rafiquddin Mehkari Standard Chartered Bank (Pakistan) Limited .97 Date of financial statements : June 30.000 - 25.420 49.54 Date of financial statements: June 30.500.000 15. 2010 Chief Executive: Mr. 4. 0.e.(PACRA) Chief Executive: Mr.Quoted. 25 percent redemption in 5th year and remaining 50 percent redemption after 5th year from the issue date. October 31.62 Date of financial statements: June 30.000 750.02 percent of principal semi-annually in the first ninety months and remaining principal at maturity.800 99.

The remaining principal is to be redeemed in semi annual installments during the tenor of the TFC. May 31.800 399.(JCR . February 2013. Humayun Murad 92.24 percent of principal in the first 72 months and the remaining principal in 4 equal semi-annual installments of 24.000 each Mark up: Average Six months KIBOR + 1.90 percent per annum with no floor and cap Redemption: The instrument is structured to redeem 0.000 each Mark up: Average Six month KIBOR (Ask Side) + 190 basis points (no floor no cap) Redemption: The TFC is structured to redeem 97. Maturity: September 2014 Rating: AA.22 percent of the principal would be redeemed during the last 36 months in six equal semi-annual installments.(PACRA) Chief Executive: Mr.350) certificates of Rs.000 each Mark up: Average Six Months KIBOR (Ask Side) + 285 basis points per annum Redemption: The instrument is structured to redeem 0. Habib Faysal Bank Limited (formerly The Royal Bank of Scotland) 578 (2009: 578) certificates of Rs. 2013 Rating: A+ (PACRA) Chief Executive: Mr. Maturity: May 2012 Rating: AA+ (PACRA) Chief Executive: Mr. Rating: AA.384 2.885 46.000 (2009: 37.657 38 Annual2010 Report .92 percent of principal in four annual installments after a grace period of fifty-four months.000) certificates of Rs.000 each Mark up: Average Six months KIBOR + 1.e.94 percent each of the issue amount respectively starting from the 78th month. 5.686) certificates of Rs.25 percent respectively starting from the eighty-fourth month.00 percent per annum Redemption: The TFC is structured to redeem 0.50 percent and a cap of 10. Maturity: July 2012 Rating: AA (PACRA) Chief Executive: Mr. Khalid A Sherwani Pakistan Mobile Communication (Private) Limited 80.163 2.25 percent of principal semi-annually in the first seventy-eight months and the remaining principal in three semi-annual installments of 33. 5.2010 2009 (Rupees in „000) Bank Al Habib Limited 9.000 (2009: 80.02 percent of principal semi-annually in the first 48 months and remaining amount in 6 semi-annual installments.686 (2009: 7.e.08 percent of principal in the first 24 months in 4 equal semi-annual installments and the remaining 99. 5. Rashid Khan ORIX Leasing Pakistan Limited 37.638 46.427 154. Abbas D.368 38.350 (2009: 9. 5.440 38.50 percent per annum with a floor of 3.VIS) Chief Executive: Mr.000 each Mark up: Average Six Months KIBOR + 1. Maturity: Seven years from the date of issue i. Maturity: Eight years from the date of disbursement i. Naved A Khan Allied Bank Limited 7.000) certificates of Rs.50% per annum with no floor and cap Redemption: The instrument is structured to redeem 0.044 332. 5.

2010

2009

(Rupees in „000)
Jahangir Siddiqui & Company Limited 10,000 (2009: 10,000) certificates of Rs. 5,000 each Mark up: Average Six months KIBOR + 2.50% with a floor of 6 percent per annum and ceiling of 16 percent per annum. Redemption: The instrument is structured to redeem 0.18 percent of principal in the first 54 months, 49.91 percent in the 60th month and the remaining 49.91 percent in the last six months. Maturity: May 2012 Rating: AA (PACRA) Chief Executive: Mr. Munaf Ibrahim Financial Receivables Securitization Company Limited 15,792 (2009: 15,792) certificates of Rs. 5,000 each Mark up: Average Six months KIBOR + 2.00% p.a. with a floor of 8 percent per annum and cap of 16 percent per annum. Redemption: Principal redemption will be carried out in 12 and 8 equal semi-annual installments in arrears, with a grace period of 1 year and 3 years for Class A TFCs and Class B TFCs respectively. Maturity: January 2014 Rating: A+ (PACRA) Chief Executive: Mr. Muhammad Suleman Kanjiani Pak Arab Fertilizers Limited 20,000 (2009: 20,000) certificates of Rs. 5,000 each Mark up: Average Six Months KIBOR + 1.50 percent per annum Redemption: Principal redemption in six stepped-up semi-annual installments starting from the issue date; the issuer may call the TFC in part or full on any profit payment date subject to thirty days prior notice. Maturity: Five years from the issue date i.e. February 28, 2013 Rating: AA (PACRA) Chief Executive: Mr. Fawad Ahmed Mukhtar Askari Bank Limited (3rd Issue) 90,000 (2009: 90,000) certificates of Rs. 5,000 each Mark up: Average Six Months KIBOR plus 2.50 percent (for one to five years) Average Six Months KIBOR plus 2.95 percent (for six to ten years) Redemption: This instrument is structured to redeem 0.32 percent of total issue amount in the first ninety six months after issuance i.e. September 28, 2009 and remaining issue amount in four equal semi-annual installments of 24.92 percent each, starting from the 102nd month after the issuance. Maturity: August 2019 Rating: AA- (PACRA) Chief Executive: Mr. Mohammad Rafiquddin Mehkari 1,308,932 1,458,428 449,820 450,000 94,000 99,940 55,576 67,368 49,920 49,940

Annual 2010Report

39

9.14 Particulars of Term Finance Certificates - Unquoted, Secured
2010 2009

(Rupees in „000)
Pakistan Mobile Communication (Private) Limited Nil (2009: 40,000) certificates of Rs. 5,000 each Mark up: Average Six Months KIBOR + 1.30 percent per annum Redemption: In two equal semi annual installments starting from the 30th month from the date of issue i.e. October 2007. The issuer will have a Call Option to redeem in full or part the outstanding face value of the TFCs on every installment date. Maturity: September 2010 Chief Executive: Mr. Rashid Khan Agritech Limited (formerly Pak American Fertilizers Limited) - note 9.14.1 100,000 (2009: 100,000) certificates of Rs. 5,000 each Mark up: Average Six Months KIBOR (Ask Side) + 1.75 basis point per annum (no floor & no cap) Redemption: Repayment will be stepped up installments where 35 percent of principal amount will be paid in the years 3 to 5 and remaining 65 percent will be paid in years 6 to 8. Maturity: July 2017 Chief Executive: Mr. Ahmed Jaudet Bilal Jahangir Siddiqui & Company Limited 20,000 (2009: 20,000) certificates of Rs. 5,000 each Mark up: Average Six Months KIBOR (Ask Side) + 1.70 percent per annum Redemption: The instrument is structured to redeem 0.20 percent of principal in the first 60 months and remaining principal in two equal semi-annual installments of 49.90 percent each of the issue amount respectively from 60th month; the issuer has a Call Option exercisable in full at any time after 1 year on a coupon date. Maturity: July 2013 Chief Executive: Mr. Munaf Ibrahim Khunja Textile Mills Limited 300 (2009: 300) certificates of Rs. 100,000 each Mark-up: Average Six Months KIBOR + 3.00 percent per annum Redemption: 10 equal semi-annual installments commencing from the 24th months from first draw down. Maturity: April 2014 Chief Executive: Mr. Shafay Hussain First Dawood Investment Bank Limited 6,000 (2009: 6,000) certificates of Rs. 5,000 each Mark-up: Average Six Months KIBOR (Ask Side) + 1.60 percent per annum Redemption: Bullet payment at maturity Maturity: September 2012 Chief Executive: Mr. Abdus Samad Khan Azgard Nine Limited - note 9.14.1 20,000 (2009: 20,000) certificates of Rs.5,000 each Mark-up: Average Six months KIBOR (Ask Side) + 1.00 percent per annum Redemption: Principal will be repaid in 12 semi annual installments with stepped up repayment plan whereby 47 percent of principal amount will be repaid in the years 3 to 6 and remaining 53 percent will be repaid in the years 7 to 8. Maturity: September 2017 Chief Executive: Mr. Ahmed H. Shaikh 99,920 99,940 30,000 30,000 30,000 30,000 99,880 99,920 499,600 499,700 200,000

40

Annual2010 Report

2010

2009

(Rupees in „000)
Power Holding (Private) Limited (Liability assumed from Gujranwala Electric Power Company Limited) - notes 9.14.2, 9.14.3 and 9.14.4 400 (2009: 400) certificates of Rs. 10,000,000 each Mark-up: Average Six Months KIBOR (Ask Side) + 0.05 percent per annum Redemption: Eight equal semi-annual installments commencing after a grace period of one year. Maturity: February 2013 Chief Executive: Mr. Fazeel Asif Power Holding (Private) Limited (Liability assumed from Faisalabad Electric Supply Company Limited) - notes 9.14.2, 9.14.3 and 9.14.4 400 (2009: 400) certificates of Rs. 10,000,000 each Mark-up: Average Six Months KIBOR (Ask Side) + 0.05 percent per annum Redemption: Eight equal semi-annual installments commencing after a grace period of one year. Maturity: February 2013 Chief Executive: Mr. Fazeel Asif Power Holding (Private) Limited (Liability assumed from National Transmission and Despatch Company) - note 9.14.2 800,000 (2009: 800,000) certificates of Rs. 5,000 each Mark up: Average Six Months KIBOR + 1.75 percent per annum Redemption: In 6 equal semi annual installments, after completion of grace period. First principal payment due at the end of 30th month from the first disbursement. Maturity: March 2014 Chief Executive: Mr. Fazeel Asif Power Holding (Private) Limited - note 9.14.3 1,088,000 (2009: 1,088,000) certificates of Rs. 5,000 each Mark up: Average Six Months KIBOR + 2.00 percent per annum Redemption: In 6 equal semi annual installments, after completion of grace period. First principal payment due at the end of 30th month from the first disbursement. Maturity: September 2014 Chief Executive: Mr. Fazeel Asif Power Holding (Private) Limited - note 9.14.3 600,000 (2009: Nil) certificates of Rs. 5,000 each Mark up: Average Six Months KIBOR + 2.00 percent per annum Redemption: In 6 equal semi annual installments, after completion of grace period. First principal payment due at the end of 30th month from the change over date (date of conversion of loan into term finance certificates). Maturity: April 2015 Chief Executive: Mr. Fazeel Asif Faysal Bank Limited 30,000 (2009: Nil) certificates of Rs. 5,000 each Mark up: Average 6 month KIBOR plus 2.25% per annum Redemption: The instrument is structured to redeem 0.20 percent of principal semi-annually in the first 60 months and remaining amount in 4 equal semi-annual installments starting from 66th month. Maturity: July 2017 Chief Executive: Mr. Naveed A. Khan 19,349,400 18,399,560 150,000 3,000,000 5,440,000 5,440,000 4,000,000 4,000,000 3,000,000 4,000,000

3,000,000

4,000,000

Annual 2010Report

41

9.14.1 These customers have not complied with the terms of repayment of the term finance certificates. However, provision has not been made against them as the State Bank of Pakistan vide its letter number BSD/BRP-5/X/000197/2011 dated January 6, 2011 has allowed extension for withholding provisioning against these exposures till March 31, 2011 to all those Banks who have agreed to reschedule / restructure their exposures against these companies. Had the exemption not been issued, the provision for dimunition in the value of investments would have been higher by Rs. 24.980 million and the amount of profit before taxation for the current year would have been lower by the same amount. The amount of mark-up accrued against classified investment has, however, been suspensed.
9.14.2 During the year, the Government of Pakistan in its move to bring all circular debts of power sector to a single point of responsibility and ownership has transferred bank loan liabilities from the books of power companies (which includes term finance certificates issued by Gujranwala Electric Power Company Limited, Faisalabad Electric Supply Company Limited and National Transmission and

Despatch Company) to Power Holding (Private) Limited. Accordingly GEPCO, FESCO and NTDC have now become fully absolved of these liabilities.
9.14.3 These represent conversion of loan amounts into term finance certificates. The relevant term finance certificates have not been issued to the Bank by December 31, 2010.
9.14.4 These customers have not complied with the terms of repayments of the term finance certificates. As these term finance certificates are guaranteed by the Government of Pakistan, no provisioning has been maintained against these certificates. However, markup accrued on these certificates amounting to Rs. 267.741 million has been suspended in accordance with the requirements of Prudential Regulations.

9.15 Investments in sukuk bonds
Investee company Date of maturity Profit rate per annum Unit 2010 2009 (Rupees in „000)
224,025 39,062 126,667 59,375 96,600 36,989 100,000 95,000 281,250 500,000 250,000 12,695 45,703 336,670 145,000 2,349,036 * These Sukuks bonds have been restructured with effect from February 19, 2010. ** These Sukuks bonds have been restructured with effect from March 19, 2010. 298,700 62,500 158,334 75,000 96,600 42,272 100,000 95,000 300,000 205,304 250,000 15,625 56,250 98,250 1,853,835

Sitara Chemical Industries Limited - I Sitara Chemical Industries Limited - II Orix Leasing Pakistan Limited **Security Leasing Corporation Limited - II Kohat Cement Company Limited Sitara Energy Limited BRR Guardian Modaraba K.S. Sulemanji Esmailji & Sons (Private) Limited *Sitara Peroxide (Private) Limited Liberty Power Tech Limited Amreli Steel Private Limited **Security Leasing Corporation Limited - I **Security Leasing Corporation Limited - II Engro Corporation Limited Quetta Textile Mills Limited

December 2013 December 2013 June 2012 March 2014 December 2015 Note 9.15.1 June 2014 November 2014 August 2016 March 2021 December 2016 March 2014 March 2014 September 2015 September 2015

3 months KIBOR plus 1.00 percent 3 months KIBOR plus 1.70 percent 6 months KIBOR plus 1.25 percent 6.00 percent 6 months KIBOR plus 1.80 percent 6 months KIBOR plus 1.15 percent 6 months KIBOR plus 1.30 percent 3 months KIBOR plus 1.40 percent 3 months KIBOR plus 1.10 percent 3 months KIBOR plus 3.00 percent 3 months KIBOR plus 2.50 percent 6.00 percent 6.00 percent 6 months KIBOR plus 1.50 percent 6 months KIBOR plus 1.50 percent

59,740 25,000 38,000 20,000 20,000 Note 9.15.1 20,000 20,000 60,000 100,000 50,000
5,000

15,000 20,000 20,000

9.15.1 This represents advance payment to Sitara Energy Limited. The relevant sukuk bonds against the advance subscription have not been issued to the Bank by December 31, 2010.
9.16 These represent overseas bonds amounting to BDT 7.394 million (2009: BDT 21.080 million) and BDT 150 million (2009: Nil) issued by IDLC Securitisation Trust and Orascom Telecom respectively. These bonds carry interest at 14.09% per annum (2009: 14.09% per annum) and 13.50% per annum (2009: Nil) and are due for maturity in December 2011 (2009: December 2011) and June 2014 (2009:

Nil) respectively.
9.17 These represent Credit Linked Notes amounting to US Dollar 5.000 million (2009: USD Dollar 5.000 million) and US Dollar 5.000 million (2009: Nil) issued by Standard Chartered Bank and Citigroup Funding Incorporation respectively. These carry interest at 3 months LIBOR plus 350 bps and 3 months LIBOR plus 450 bps and are due for maturity in March 2013 and June 2011 respectively.

42

Annual2010 Report

(69.366.049.949 5.22%) Break-up value per share: Rs.000 250.000 5. 2010 Management Company . 2010 Chief Executive: Mr.590.739 2. 12.52% (2009: 20%) Break-up value per share: Rs.054.000 9.498. Abdul Aziz Anis 2010 2009 (Rupees in „000) 4.77 Date of audited financial statements: December 31.899. 10.913 6.413.18 Particulars of investment in subsidiary company The paid up value of these ordinary shares is Rs.000 7.261.34 Date of audited financial statements: December 31. 10 except where stated. 8. 2010 Chief Executive: Mr.38% (2009: 92.55%) Break-up value per unit: Rs.990 2.05 Market value per share: Rs.9. 52.000 68. Nasar us Samad Qureshi Alfalah GHP Value Fund Percentage of holding: 33.Alfalah GHP Investment Management Limited (Paid-up value of each unit is Rs.920 83. Muneer Farooqui Wateen Telecom Limited Percentage of holding: 13.474 417. 10.474 7. 2010 Chief Executive: Mr. 2010 2009 (Number of shares / units) 319. 2010 Management Company .24% (2009: 8.990 68.600. 2010 Chief Executive: Mr.487 100.84 Date of reviewed financial statements: December 31. Mohammad Shoaib Memon 2010 2009 (Rupees in „000) 76.44 Date of reviewed financial statements: December 31.05%) Break-up value per unit: Rs.883. 2010 2009 (Number of shares) 7.109 353.000 76.Alfalah GHP Investment Management Limited (Paid-up value of each unit is Rs.124 319.19 Particulars of investments in associates The paid up value of these shares / units is Rs.070 130.225 250. 57.070 13.64 Date of reviewed financial statements: December 31.42%) Break-up value per unit: Rs.494. Naeem Zaminder Alfalah Insurance Limited Percentage of holding: 30% (2009: 30%) Break-up value per share: Rs.366. 2010 Chief Executive: Mr.498 11.796 4.Alfalah GHP Investment Management Limited (Paid-up value of each unit is Rs.76%) Break-up value per share: Rs.000 13.000 76.054.049. 50) Alfalah GHP Income Multiplier Fund Percentage of holding: 96.493 130. 3.22% (2009: 40.196 550.000 7.77 Date of audited financial statements: December 31.753 Annual 2010Report 43 .124 Warid Telecom (Private) Limited Percentage of holding: 8.493 5.600.11% (2009: 96. 50) Alfalah GHP Islamic Fund Percentage of holding: 96.650. 46.686. 50) Alfalah GHP Investment Management Limited Percentage of holding: 40.000 100.49) Date of audited financial statements: December 31.000 Alfalah Securities (Private) Limited Percentage of holding: 76% Break-up value per share: Rs.43 Date of reviewed financial statements: December 31.796 83.494. 2010 Management Company .000 76.048.18% (2009: 28. 4.920 417.077 5.889.

Government Securities) 97.000 1.940 30.430 50.079 8.000 50.827 26.010.935 32.587 332.901 15.936 10.854 2.167 9.180 99.694 92.107 449.659 150.440 154.036 99.181 144.963 42.406 21.959 382.044 49.693 50.588.928 31.916 24.155.992 (Unrated .000 145.747 99.675.346 426.239 A+ (f) JCRVIS 6.940 450.269 AA/A1+ PACRA 1.920 438.368 AAAAA AA AAAAA+ PACRA PACRA PACRA 2.079 50.794 A-/A2 PACRA AA+/A1+ PACRA 96.784 63.508 48.882 50.750 49.190 9.322 34.005 A/A1 PACRA 93.820 44.011 8.675.788.Government Securities) 5.000 49.980 77.763 889 24.000 9.648 91.800 47.823 51.427 51.882 4-Star/3-Star PACRA 100.149 30.463 10.000 26.000 BBB-(f) JCRVIS 200.820 150.545 39.657 2.435 18.930 46.000 1.9.000 99.613 AAA/A-1+ JCRVIS 44 2010Annual Report .960 49.000 A+(f) PACRA 9.708 76.229 70.000 AA-(f) PACRA 912 4-Star/3-Star PACRA 100.771 11.873 41.764 47.958 50.988.754 70.936 43.960 198.995 99.832 99.361 (Unrated .152 37.20 Quality of available for sale securities Market value Cost Long/Medium 2010 2009 2010 2009 Term Credit Rated by ---------------------Rupees in '000--------------------Rating Market Treasury Bills Pakistan Investment Bonds Term Finance Certificates Askari Bank Limited (2nd Issue) Standard Chartered Bank (Pakistan) Limited Bank Al-Habib Limited Faysal Bank Limited (formerly The Royal Bank of Scotland) Allied Bank Limited Pakistan Mobile Communication (Private) Limited ORIX Leasing Pakistan Limited Jahangir Siddiqui & Company Limited First Dawood Investment Bank Limited Financial Receivables Securitisation Company Limited "A" Financial Receivables Securitisation Company Limited "B" Pak Arab Fertilizers Limited Pakistan Mobile Communication (Private) Limited Azgard Nine Limited Askari Bank Limited (3rd Issue) Faysal Bank Limited 40.567 150.841 94.270 35.695 100.165 35.000 99.355 9.172 102.761.000 1.000 33.000 46.185 38.831 6.885 38.776 74.000 75.000 200.988 17.092 51.000 30.425 157.852 PACRA JCRVIS PACRA PACRA AA+ AA PACRA PACRA D A+ PACRA ------(Unrated)-----AA JCRVIS ------(Unrated)-----PACRA CCC AAPACRA AAJCRVIS Shares in Listed Companies / Certificates / Units AKD Income Fund AMZ Plus Income Fund Crosby Pheonix Fund Askari Income Fund Atlas Income Fund Dawood Money Market Fund First Habib Income Fund IGI Income Fund JS Aggressive Income Fund JS Income Fund KASB Liquid Fund MCB Dynamic Cash Fund Meezan Balanced Fund Meezan Islamic Income Fund NAFA Income Opportunity Fund (Formerly NAFA Cash Fund) Pak Oman Advantage Fund Pak Oman Advantage Islamic Income Fund Pakistan Capital Market Fund Pakistan Income Fund Pakistan Strategic Allocation Fund Reliance Income Fund United Islamic Income Fund United Money Market Fund Adamjee Insurance Company Limited Askari Bank Limited J.226 2.940 1.709 15.600 30.924 45.500 50.689 332.741 91.648 93.870 44.969 89.542 15.000 ------(Unrated)-----50.621 32.658 50.570 40.000 30.000 AA-(f) PACRA 30.940 200.314 159.587.549.368 400.800 154.000 381.250 49.850 35.384 399.959 1.977 37.420 46.350 30.S Bank Limited KASB Securities Limited MCB Bank Limited National Bank of Pakistan 10.000 34.634 28.840 49.907 28.920 456.500 50.501 8.045.147 49.233 95.638 99.163 37.000 JCRVIS JCRVIS A(f) JCRVIS ------(Unrated)-----A+(f) PACRA ------(Unrated)-----AA-(f) PACRA A+(f) JCRVIS ------(Unrated)-----AA-(f) PACRA BBB+(f) PACRA A+(f) PACRA A(f) JCRVIS A(f) JCRVIS BBB(f) BB(f) 450.043.920 30.000 A+(f) PACRA 150.298 5.175 AA PACRA 15.998 18.

026 3.703 12.757 27.Date of issue Market value 2010 2009 --------------------- Cost 2010 2009 Long/Medium Term Credit Rated by Rating Rupees in '000 9.000 2.000 3.013 3.371 2.260 26.064.096 70.610 40.500.000.000 50.716 15.655 1.509.478 60.110.117 52.000.088 .408.264 10.725 4.000 85.020 22.821 5.000 3.115 5.345 35.924 1.065 62.279 33.121 10.089 13.380.279 1.005 53.143 3.584.000 129.000 3.793 30.000 2.000.969 5.000 6.595.000.118 34.781 33.250 15.595.679 1.930 51.405.600 4.000 2.277 29.000 95.748 93.592 1.027 NIB Bank Limited Samba Bank Limited The Bank of Punjab Al-Abbas Cement Company Limited Fauji Cement Company Limited Fecto Cement Limited Lucky Cement Limited Kohinoor Energy Limited Kot Addu Power Company Limited Oil and Gas Development Company Limited Pakistan Oilfields Limited Pakistan Petroleum Limited Pakistan State Oil Company Limited Southern Electric Power Company Ltd The Hub Power Company Limited Hira Textile Mills Limited Pakistan Telecommunication Company Limited Telecard Limited Worldcall Telecom Limited Fauji Fertilizer Bin Qasim Limited Fauji Fertilizer Company Limited Fatima Fertilizer Limited Lotte Pakistan PTA Limited Crescent Steel & Allied Products Limited ICB Islamic Bank 9.000 3.000 6.925 13.525 106.980 40.670 11.177 883 1.128 45.021 104.348 69.287 2.210 2.096 70.002.979 16.000.756 12.685 57.714.277 9.921 66.393.935 64.171 26.000.417 22.000 40.000 3.676 35.821 ------(Unrated)-----------(Unrated)-----------(Unrated)-----------(Unrated)------ Society for Worldwide Interbank Financial Telecommunication Al-Hamra Hills (Private) Limited Al-Hamra Avenue (Private) Limited Preference Shares in Un-listed Companies First Dawood Investment Bank Limited Trust Investment Bank Limited Not Applicable Not Applicable 15.698 37.000.521 130.440 21.569 34.000.535 41.240 87.625 8.405.390 103.300 38.074.000 84.000 3.429.175 13.980 36.000 50.490 42.090 AA-/A1+ PACRA A/A-1 JCRVIS AA-/A1+ PACRA ------(Unrated)-----------(Unrated)-----------(Unrated)-----------(Unrated)-----------(Unrated)-----------(Unrated)-----AAA/A-1+ JCRVIS ------(Unrated)-----------(Unrated)-----AA+/A1+ PACRA AA+/A1+ PACRA AA+/A1+ PACRA ------(Unrated)-----------(Unrated)-----------(Unrated)-----A-/A2 PACRA ------(Unrated)-----------(Unrated)-----A/A1 PACRA ------(Unrated)-----------(Unrated)-----------(Unrated)------ Shares in Un-listed Companies Pakistan Export Finance Guarantee Agency Limited Not Applicable Not Applicable Not Applicable Not Applicable 5.935 61.570 17.118 94.177.466 25.325 5.950 8.002.073 Annual 2010Report 45 .026 1.695 145.000 129.929 5.175 44.930 102.950 56.075 1.220 37.950 45.320 50.385 15.203 50.546 1.000.625.478.469 ------(Unrated)-----------(Unrated)-----------(Unrated)-----------(Unrated)-----------(Unrated)-----------(Unrated)-----AA PACRA ------(Unrated)-----------(Unrated)-----------(Unrated)------ 68.686.900 53.500.937 1.000 17.502 2.744 41.278 28.000 1.000 93.000 25.000 2.625.000 1.954 8.000 - ------(Unrated)-----------(Unrated)------ Sukuk Bonds Ijara Sukuk Bonds I Ijara Sukuk Bonds II Ijara Sukuk Bonds III Ijara Sukuk Bonds IV Ijara Sukuk Bonds V Ijara Sukuk Bonds VI Sui Southern Gas Company Limited Security Leasing Corporation Limited Security Leasing Corporation Limited Quetta Textile Mills limited 26-Sep-08 29-Dec-08 11-Mar-09 17-Sep-09 15-Nov-10 20-Dec-10 1.075 1.407 1.824 2.000.924 1.374 6.725 4.

Alfalah Securities (Private) Limited Investment in associated companies Unlisted company .Al-Hamra Hills (Private) Limited .568 325.000 30.000 76.553 2.192 (285) (132.21 Particulars of provision for diminution in value of investments Opening balance Charge for the year Reversals Provision written off during the year Closing balance 9.22.Fully paid up ordinary shares of Rs. 10 each .000 74.652 5.693) 325.568 1.723 2.Wateen Telecom Limited 55.899 30.725 3.Khunja Textiles Mills Limited Investment in subsidiary company Unlisted company .Term finance certificates / sukuk bonds .164 (32.725 35.000 25.991.Pakistan Export Finance Guarantee Agency Limited .158 1.000 9.158 5.183. 10 each .1 1.497) 2.Fully paid up ordinary shares of Rs.062 317.Warid Telecom (Private) Limited Listed company .Fully paid up ordinary shares / units Unlisted companies .22 Particulars of provision for diminution in value of investments by type and segment Available for sale securities Listed companies / mutual funds .497 325.064 23.375) (1. 10 each .Trust Investment Bank Limited Held to maturity securities Unlisted companies .705.851 132.824 - 113.Fully paid up ordinary shares of Rs.158 46 Annual2010 Report .438.First Dawood Investment Bank Limited .314 - 74.First Dawood Investment Bank Limited .Preference shares .Term finance certificates .899 30.000 76.183.Al-Hamra Avenue (Private) Limited . 10 each .Note 2010 2009 (Rupees in „000) 9.479.000 8.Kohat Cement Company Limited .Fully paid up ordinary shares of Rs.

806 4.613 1.22.029 - (179) - (1.711 1. 2010.744 31.1 While finalising the financial statements of the Bank for the year ended December 31.842 3.300 2. 2010.392 1.052 3.Pack Films Limited Pakistan Telecommunication Limited Nishat Chunian Power Limited Nishat Power Limited Karachi Electric Supply Compnay Limited Dewan Sulman Fiber Limited Nishat (Chunian) Mills Limited - 187 (59) - (33) 79 - - (140) (395) 402 (36) 55 (129) 122 2.955 10.846 11.034.466 253.553 6.849 Annual 2010Report .299 1 3.142 4.440 47 872 - (71) 2.145 2. This relaxation was extended by the SBP till June 30.162 319 1.net Unrealised gain / (loss) Cost 2010 2009 2010 2009 -----------------Rupees in '000----------------- Investee Company Fully paid up ordinary shares / units .586 29. 2009.23 Unrealised gain on revaluation of investments classified as held for trading . the Bank had recognised deficit on account of difference between the cost and breakup value per share of Warid Telecom (Private) Limited in the balance sheet and shown it as 'surplus / deficit on revaluation of assets'.563 966. 2010.216) - (143) (35) 1.359 34.830 1.527 1.080 8.730 3.9.087 12.Listed NAFA Stock Fund Adamjee Insurance Company Limited NIB Bank Limited MCB Bank Limited Allied Bank Limited Arif Habib Investment Management Limited Arif Habib Corporation Limited (formerly Arif Habib Securities Limited) Jahangir Siddiqui & Company Limited National Bank of Pakistan United Bank Limited Lucky Cement Limited Pakistan Oilfields Limited Pakistan Petroleum Limited Southern Electric Power Company Limited Azgard Nine Limited Nishat Mills Limited Engro Corporation Limited Fauji Fertilizer Bin Qasim Limited Fauji Fertilizer Company Limited Fauji Cement Company Limited D G Khan Cement Limited ICI Pakistan Limited Lotte Pakistan PTA Limited Crescent Steel & Allied Products Limited Pace Pakistan Limited Tri.640 55.297 12. As at December 31.545 9.051 3. 2010) and recognised it in the profit and loss account.849 - Market Treasury Bills 2.860 30. This treatment was specifically approved by the State Bank of Pakistan vide its letter BSD / BRP-2 / 185 / 2010 dated March 1.103 1. 9.673 683 68.802 2.369 3.169 1.232 2.207 8.952 3.394 103 (19) 148 32 - 918 2. the Bank has determined the impairment loss as difference between the carrying amount and the breakup value (based on the audited financial statements of Warid Telecom (Private) Limited as at December 31.354 2.559 6.092 1.440 253.185 - - 121 35 (1) 186 (50) 6 - 56 56 (38) (477) (2) 3.

770 5.876 19. running finances.030.739.708 .514 7.6.546 170.628) (11.719 5.629.968 56.168 10.066) (9.304 (792) (1.512 .021.869) (419.438 10.972 5.279.456 8.1 Particulars of advances .5 10.143.799.916.853 181.876 8.091.431.354.1 Net investment in finance lease represents ijarah financing made prior to January 1. In Pakistan Outside Pakistan Net investment in finance lease In Pakistan Outside Pakistan Financing and investing assets under IFAS 2 Ijarah Bills discounted and purchased (excluding market treasury bills) Payable in Pakistan Payable outside Pakistan 10.997 701.2 Net investment in finance lease 2010 2009 Not later Later than Over Not later Later than Over than one one and less five Total than one one and less five Total year than five years years year than five years years -----------------------------------------------------------(Rupees in '000)--------------------------------------------------------Lease rentals receivable Residual value Minimum lease payments Financial charges for future periods Present value of minimum lease payments 1.251.988.173 8.4.307) 207.7.679) (649.545.540 820.730) 188.340.335.200 197.103 4.595.451.536 1.465.403.352.122.144.3 Provision against advances Specific provision against non-performing advances General provision against advances 10.218 2.431.581 15.042.856 2.729 196. 2009 have been accounted for in accordance with the requirements of IFAS 2.360.615 2.050.823.503.341 3. cash credits.403.018.152.355 946.615 3.355 10.181.937.291 3.919.666.712) (980.319 (417.758 2.789.290 6.799 218.853 10.3.905.875 218.2.605 6.168 141.628. 2009.751 2.897.445) .2 188.905.981.403.168 (8.853 166.5 (10.282.567 3.807) 2.780.622 10.322 2. 48 Annual2010 Report .597.676) (470.NET Loans.977 218.664) (763.737 11.419 11.483.164 .615 6.025 9.275.355 10.2.587 197.655 197. Ijarah contracts entered on or after January 1.949) 7.754 3.456 .626 8.143.743.054 52.722 10.613.598.Note 2010 2009 (Rupees in „000) 10 ADVANCES .365 4.724. "Ijarah" as disclosed in note 10.(837.905.514.143.gross of provisions In local currency In foreign currencies Short term (upto one year) Long term (over one year) 198. etc.463.597 180.294.430.431.914 7.

334) 2.723) 625.375 - (34.642 (121.049 946.300 3.503.574) 195.316 (95.030.375 (34.083 - - - 660.652 660.166) (468.10.326 (25. The significant ijarah contracts entered into by the Bank are with respect to vehicles. 2010 Cost Accumulated depreciation Net book value Year ended December 31.994 1.765.726) 5.262 (945) (64.049 946.661) 476. 2010 Cost Accumulated depreciation Net book value 660.011.752 195.484) 120.726) 5.111) (526.536 5.503.105.145) 476.752 221.994 1.211 (22.294 4.049 946.326 (25. 2009 Opening net book value Additions Disposals Depreciation Adjustment Closing net book value At December 31.262 (945) (64.652 2.758 (285.549 5.125) 499.3 Financing and investing assets under IFAS-2 (Ijarah) a) Brief description of the ijarah arrangements Ijarah contracts entered into by the Bank essentially represent arrangements whereby the Bank (being the owner of assets) transfers its usufruct to its customers for an agreed period at an agreed consideration.326 (25.494 75.515) (211) 5.483) 6.262 (945) (64.452.536 Annual 2010Report 49 .694 (69. 2009 Cost Accumulated depreciation Net book value - 221.375 (34.468 - 221.019.715) 75.083 123.567 (3.567 (3.473 (23.509 Vehicles Consumer -------------------------------- 2009 Asset categories Vehicles Plant & Corporate Machinery (Rupees in '000)-------------------------------- Equipment Total At January 1.536 5.843 (313.452.083 422.567 (3.752 399.994 1.549 545.494 2.049 946. 2010 Opening net book value Additions Disposals Depreciation Adjustment Closing net book value At December 31.011.083 120.551) 499.484) 120.517 620. 2009 Cost Accumulated depreciation Net book value Year ended December 31.574) 195.652 5.758 98.509 2.723) 625.512) (211) 625. plant and machinery and equipment and are for periods ranging from 3 to 5 years.574) 195.105) 6.011.183 3.183 3.127 (65. b) Movement in net book value of ijarah assets 2010 Asset categories Vehicles Plant & Corporate Machinery (Rupees in '000)-------------------------------- Vehicles Consumer -------------------------------- Equipment Total At January 1.517 123.652 625.536 92.752 123.484) 120.

620 595.022 10.2010 2009 (Rupees in „000) c) Future Ijarah payments receivable Not later than one year Later than one year and not later than five years Later than five years 5.989 1. 10.676 7. 2011 has allowed extension for withholding provisioning against the exposure till March 31.602.4.101.994 8.24 million.038 2. to all those banks who have agreed to reschedule / restructure their exposures against the Company.150 5.4.599 million and the profit before taxation for the current year would have been lower by the same amount.122.089.105.236 196.629.078.523 3.760 18.320. the provision against loans and advances would have been higher by Rs.162 10.674 Doubtful .210.544 106.2 During the year. the State Bank of Pakistan through BSD Circular No.488 27. Had the exemption not been provided by the State Bank of Pakistan. Had this relaxation not been available.4.718 145.812.1 192.191 27. BSD/BRP-5/X/000197/2011 dated January 6.414 Loss 10.662.993 16. 50 Annual2010 Report .211. The State Bank of Pakistan vide its letter no. such loans and advances shall continue to be classified as per the criteria laid down in the Prudential Regulations.889 Substandard 740.174.391.185.290 586.885.699 Loss 14.4.488 81.note 10. Further.664 * Substandard advances include amount of Rs.2 3. 2010.144 458.374 197.699 458.998 3.174. the aforementioned deferment is only available for such loans and advances which have become non-performing after July 1.533.923 299.1 During the year.122 205. 2011.000 192.767 10.991 Doubtful 2.501 18.989 10.520.022 110.716 481.070 15.778 1. financing facility disbursed to Agritech Limited has been restructured as a result of financial difficulties / repayment problems faced by the Company.105.679 2009 Domestic ----------------------------------------------------------- Overseas Total Domestic Overseas (Rupees in '000)--------------------------------------------------------- Category of Classification Other Assets Especially Mentioned (Agri Financing) 145. the provision against loans and advances would have been higher by Rs.000 110.320 billion (2009: Rs 16. 188.826 481.760 10.542 5.597. 10.546 14.047 16.186 billion) which have been placed under non-performing status as detailed below: 2010 Domestic ----------------------------------------------------------- Overseas Total (Rupees in '000) Domestic Overseas --------------------------------------- Category of Classification Other Assets Especially Mentioned (Agri Financing) .748 279. 6 of 2010 dated November 2.062.523 Substandard* 3.674 81.550.839 million and the profit before taxation for the current year would have been lower by same amount.4 Advances include Rs 18. 48. 105. 2010 has allowed all banks to defer provisioning against all loans and advances which have been restructured / rescheduled as a result of recent floods in Pakistan. However.838 330 8.323.144 3.546 10.872 8.275.101.050 7.note 10. for which provision has been maintained at 60% of the outstanding balance on SBP's instruction.889 740.

2 General provision against consumer loans represents provision maintained at an amount equal to 1.629.952) 3.499 3.280.280.080.965) 649. 10 dated October 20.307 8.026 3.664 1. These securities comprise of charge against various tangible assets of the borrower including land.629.127) 763.892) (291. 1.673 (494.384 98.net of tax at December 31.730 10.5.391.488 million).356.597.244. residential and industrial properties would not be available for payment of cash or stock dividend.4 Although the Bank has made provision against its non-performing portfolio as per the category of classification of the loan.159. building and machinery. The additional profit arising from availing the FSV benefit .066 6.360.367 763.038 4.193 9.679 763.191 27.279. Annual 2010Report 51 .5.567 million.562.6. stock in trade etc.602.5. 2010 has allowed banks to avail the benefit of 40% of forced sale value of pledged stocks and mortgaged commercial. 10. 10.3 Particulars of provisions against advances 2010 General 2009 General Note Specific ----------------------------------------------- Total Specific Total (Rupees in '000)--------------------------------------------- In local currency In foreign currencies 10.597.193 71.498 (868.5 Particulars of provisions against advances 2010 General 2009 General Note Specific ----------------------------------------------- Total Specific Total (Rupees in '000)--------------------------------------------- Opening balance Exchange adjustment and other movements Charge for the year Reversals / recoveries Amounts written off Closing balance 10. 202.498 (1.645) 9.825) 3.826 8.5% of the fully secured performing portfolio and 5% of the unsecured performing portfolio as required by the Prudential Regulations issued by the State Bank of Pakistan.730 10. 2009 and BSD circular no.1 The State Bank of Pakistan (SBP) vide its BSD circular no.730 1.360.664 688.854.036.628 11. Had the provision against non-performing loans and advances being determined in accordance with previously laid down requirement of SBP.146 4. the additional impact on profitability arising from availing the benefit of forced sale value against pledged stocks and mortgaged commercial. 2010 which is not available for either cash or stock dividend to shareholders amounted to approximately Rs. the specific provision against non-performing loans would have been higher and consequently profit before taxation and advances (net of provisions) as at December 31.923 11. However.679 578.180.628 9.243.435 649.10.687 (326.488 10.694.699 74.683 20.066 9.140. the Bank holds enforceable collateral in the event of recovery through litigation.458) 2.780 million (2009: Rs.838 205. 2 dated June 3.085 (30.598 51.652 (326. 2.645) 8.5.965) (112. residential and industrial properties held as collateral against non-performing loans for 4 years (previously 3 years) from date of classification for calculating provisioning requirement.145 (923.985. 2010 would have been lower by approximately Rs.279.307 5.1 8.664 1.055.360. General provision for overseas branches is maintained in accordance with the guidelines of the authorities in the respective countries.597.085.493) 2.145 (1.127) (291.537 280.136) 10.066 (473) (112.854.546 (494.136) 11.

8 Particulars of loans and advances to directors.076 6.817 554.257.012 10.254) 2.035 188.6 Particulars of write-offs 10.960.6.640 494.Note 2010 2009 (Rupees in „000) 10. 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 during the year Balance at end of year 3.000/.508 (2. executives. 2010 is given in Annexure-I.462 46. 500.555 2.615 (1.946 507.474 (998.363 Total 11 FIXED ASSETS Capital work-in-progress Property and equipment Intangible assets 52 Annual2010 Report 11.102 (659.280 (5.7 Details of loans written-off of Rs.410 567.3 679.932.275 Debts due by companies or firms in which the directors of the Bank are interested as directors.951 12.000 10.225.504 351.2 11. 500.079.472.855.218 6.392) 2.012 Debts due by subsidiary company. partners or in the case of private companies as members Balance at beginning of year Loans granted during the year Repayments during the year Balance at end of year 2.249.746 342.894 351.204.096 998.599) 601.141.000 and above Write offs of below Rs. 1962 the statement in respect of loans written-off or any other financial relief of five hundred thousand rupees or above allowed to a person(s) during the year ended December 31. 500.194 14.476 (10.154 12.350 2. Debts due by directors.and above In terms of sub-section (3) of Section 33A of the Banking Companies Ordinance.645 59.275 1.076 2.005 14.516 554.395 5.664 220.2Write offs of Rs. 10.169.1Against provisions Directly charged to profit and loss account 326.994.592.241.136 25.1 11.169.366) 609.105. etc.492.957.6.477.592. controlled firms.792 2.404) 3. associated companies.540) 4.640 8.990. managed modarabas and other related parties Balance at beginning of year Loans granted during the year Repayments during the year Balance at end of year 601.194 .362.853.577 1.462 10.168.

443 243.946.904 10% .147 .1.5% 125.234 679.152. 2010 -----------------------------------------------------------(Rupees in '000)--------------------------------------------------------Office premises 4.118.685 3.206.056.25% Vehicles - 154.700 3.687 39.116 (17.587 2.839) * 5.914 25% 16.5.765) * (2.986.2010 2009 (Rupees in „000) 11.136) * 1.227 20% Furniture and fixtures - 621.924 76.446 477.010 440.701.831 451.365 - 6.608.976 (30.410 Annual 2010Report 53 .515.989 19.892 (221) * 1.2.620.592 209.411) * 34. 31.5%-5.923 1.207 (221) * 1.140 1.348) .492.276 1.542 946.149 2.749) * 1.265.685 123.25% Office equipment - 3.079 78.225.177 8.989 8.565 (6.672.551. 2010 (on disposal)/ revaluation as December 31.282 (94. 2010 Additions / (disposals) / for the year/ *adjustments reversed on at December Accumulated depreciation at 2010 Net Book Value at December 31.410 2.556 397.865) * 1.993 2.630.154 11.492 4.989 3.888) * 12 - 1.648.951 662.406 189.113 (27.183) * (14.168 855. 2010 January 1.605 636 8.929 (5.298.496.533.371. 2010 Rate of depreciation % *adjustments revaluation at December 31.506 45.511 29.851 16.428 150.132 Lease hold improvements .790 (10.483.809 231.049 1.506 - per annum 79.542.114 1.837) * 386 .964) * (6.102 12.951 397.230 7.5%-5.293.066.272 (23.360) * 20.512 4.099.2 Property and equipment 2010 Accumulated Cost / Cost/ Accumulated Reversal of Revaluation as depreciation at deficit on Depreciation depreciation Description revaluation at January 1.233 20% .700 2.993 234.568.811.667) 1.530 (14.929 (6.372 (73.309 - - 45.1 Capital work-in-progress Civil works Equipment / intangibles Advances to suppliers and contractors Others 228.957.727 266.545 2.5% Revaluation 7.643 2.427.318 27.452 7.549.471 (30.171) 4.501) * 1.5.838 143.

3 Intangible assets 2010 COST ACCUMULATED AMORTIZATION Additions/ Amortization Rate of Closing Book value amortization (Deletions)/ Closing Opening (Deletion) / * Adjustment Balance Balance * Adjustment % Balance at closing per annum (Rupees in '000)------------------------------------------- Opening Balance --------------------------------------------- Computer software (note 11.814 73.605 8. 2009 31.371.951 2.637 (302.1) 395.971 505. 2009 Depreciation Description revaluation at January 1.372 (427) * (15.2.006 37.427 207. 1.551.814 (427) * (15.949 * (49) 172.274 416.310 11.405 .25% Vehicles 314.467.613 (49.089) 3.2009 Cost / Cost/ Accumulated Revaluation as depreciation at at December 31.873 (302.1.028) * 16.650 (72.2 Office premises were last revalued on December 30.275 2. Had there been no revaluation.605.2.089) 16.627.428 894.057.592 .161) * 2.035 - 4.194 20% Goodwill 109.3.997 414.784 (302.194 54 Annual2010 Report .835.337) * (15.449) (14) * 6.449) 4. 1.630.716 139. 2009 Rate of depreciation % *adjustments revaluation January 1.528 (10.1 Included in cost of property and equipment are fully depreciated items still in use having cost of Rs.186 million).233 567.304 109. 4.605 .333 172.078.309 109.402) * (28.793 48.079.114 12. 11.293.149 3.972 20% .372 (188.143.442 272.455) 416.118.5%-5.987) 272.095.873 (302. 2009 Additions / (disposals) / Reversal of deficit on for the year/ (on disposal)/ *adjustments Accumulated depreciation Accumulated reversed on depreciation at revaluation as at December Net Book Value at December 31.677 million (2009: Rs.672.556 2.164 10% .399 (86.987) Lease hold improvements Furniture and fixtures Office equipment 1.876) * 9.3.369) * 1.636 - 243.831 1.006 2.885 (7.230.182 338.5% Revaluation 3.283) * (1.971 109.206 * (117) 947.533.919 2.811. 2009 ----------------------------------------------------------(Rupees in '000)--------------------------------------------------------- per annum Office premises 4.168 1. 2009 December 31.640) 111.093.174.703.362 301.551.164 25% 14.640) 416.369) 12.866 1.089) 4.179 20% - 1.643 (188. 11.25% 3.202) 164.971 490.726 - 1.900 753.205) * (30.459) * 3.971 1. Valuation and Engineering Consultant.672.4.035 (108.515. 2009 on the basis of market values determined by Harvester Services (Private) Limited.847.556 75.338 552.460 .204 567.533.687 100.873 (113.949 * (49) 380.646 184.951 108.807 (23.851 .994 (113.206.477.5% (14) * 6.372 7.5%-5.489.2.206.679 (34.948 (177.736) 732.398 317.010 705.089) .587 million. the net book value of office premises would have been Rs.063 774.757) * 4.206 * (117) 552.986.162 (2.140 .8.

988 * (61) 395.000.896 3.033 1.000 or above are given below: Description Accumulated Net book Sale depreciation value proceeds ------------------------(Rupees in '000)------------------------Cost Mode of Disposal Particulars of purchaser Office premises Bhera branch Defence Office Premises Items having book value of less than Rs.928 1.000.344 million which has been recognised during the year on account of reassessment of useful life over which the benefits associated with a specific intangible should be recognised.000 or above Details of disposal of fixed assets having cost of more than Rs.065 330 416 - Write Off Write Off Insurance Claim Write Off Write Off Write Off N/A N/A M/s Alfalah Insurance (Related party) N/A N/A N/A 3.451 109.391 17.382 109. 24. 250.005 20% Computer software 360.738 6.634 10.3. 250.219 21 437 Various Various Furniture and fixtures Furniture & Fixture Furniture & Fixture Furniture & Fixture Furniture & Fixture Items having book value of less than Rs.182 742 1. 1.971 317. 1.000.289 million). 11.865 189 221 194 5.1 This includes additional amortisation charge of Rs. 1.999 * (146) 207.799 465 493 511 1.738 6.964 408 2.999 * (146) 64.860 821 2. 169.925 557 32 4.765 4. Kh.925 525 4.3.945 524 Negotiation Insurance claim Mr.044 Various Various Annual 2010Report 55 .000 1.000 or cost of less than Rs.2 Included in cost of intangible assets are fully amortised items still in use having cost of Rs.000 or net book value of Rs.033 795 491 416 1. Abdul Latif M/s Alfalah Insurance (Related party) 383 5. 174.983 14. 250.548 Various Various Leasehold Improvements Renovation work Renovation work Renovation work Renovation work Renovation work Renovation work Items having book value of less than Rs.837 1.183 2. 250.988 * (61) 34. 250.158 1.664 million (2009: Rs.971 109.000.480 64.971 470.738 6.000 or net book value of Rs.072 429 449 338 Insurance Claim Bid Insurance Claim Insurance Claim M/s Alfalah Insurance (Related party) Jahandad Society for Community Development M/s Alfalah Insurance (Related party) M/s Alfalah Insurance (Related party) 6.000 or cost of less than Rs.971 505.309 252.4 Details of disposal of fixed assets having cost of more than Rs.Opening Balance --------------------------------------------- 2009 COST ACCUMULATED AMORTIZATION Additions/ Amortization Rate of Closing Book value amortization (Deletions)/ Closing Opening (Deletion) / * Adjustment Balance Balance * Adjustment % Balance at closing per annum (Rupees in '000)------------------------------------------34.756 4.000 4.644 79 5.338 142.000.333 188.374 1.005 11. 11.000 2.411 Goodwill 109.342 90 156 863 457 375 337 1.304 188.182 1. 1.000 or cost of less than Rs. 1.

386 19.136 94.109 1. Haider Ali Mr.818 2. 2009 * Disposal as per Bank's policy represents vehicles sold to employees as per the terms of their employment.000 or cost of less than Rs.303 22.881.805.642.512.757 419 2.200 1.953) (102.000 1.845 112. 1.2 12.366 27.603 16.009 17.Description Accumulated Net book Sale depreciation value proceeds ------------------------(Rupees in '000)------------------------Cost Mode of Disposal Particulars of purchaser Office equipment Diesel Generator Diesel Generator Diesel Generator Diesel Generator Assets destroyed in fire Diesel Generator Diesel Generator Assets destroyed in fire Items having book value of less than Rs.611 68.071 17.054. deposits.892 (3.636 30.714) 12.053) (9.December 31.785 30.572 18 256 1.920 3. advance rent and other prepayments Assets acquired in satisfaction of claims Advances against future Murabaha Advances against future Ijarah Advances against Diminishing Musharakah Branch adjustment account Tax recoverable Dividend receivable Unrealised gain on forward foreign exchange contracts Prepaid exchange risk fee Stationery and stamps on hand Others Less: Mark up held in suspense account Provision held against other assets 12.035 588 666 828 3 139 206 222 1.000 Vehicles Toyota Corolla Honda Civic Toyota Corolla Honda Accord Items having book value of less than Rs.387.888 73.559 354.674) 14.266 145.166 Various Various Total .548 1.839 1.649.774 23.170 1.248 20. Haider Ali Mr.185 1.Iqbal Saifi 22.402 22.000 or cost of less than Rs.December 31.591 338.469 364.005 3.Umer Zameer Mr.000.269 413 530 696 Bid Bid Bid Bid Insurance Claim Bid Bid Insurance Claim Mr.426 156.360 177.533 369.074 2.142 161. 250.368 1.067 Bid 1.265 254.633 467.411 1.160 950 962 1.096 16. Haider Ali Mr. Haider Ali Mr.1 Market value of assets acquired in satisfaction of claims 56 Annual2010 Report .382 5. Haider Ali M/s Alfalah Insurance (Related party) Mr.M.066 92.876.200 12.555 5.Haji Noorullah Mr.301.000.061 868 852 1.753 10.645 18.195 749 2.862 6.691 93.195 1. 1.380 341. 2010 .181.629 As Per Bank Policy Mr.069 353.265 283.530 1.125 362 296 357 507 536 412 412 1.958 76.225 274. Dilawar Gill M/s Alfalah Insurance (Related party) 20.294 1.494 112.749 108.167 1.826.074 1.048 3.107 (2.706 150.435 42.Saleem Mr. 250. Note 2010 2009 (Rupees in „000) 12 OTHER ASSETS Income / mark-up accrued in local currency Income / mark-up accrued in foreign currencies Advances.270.255 10.030 Various Various 643 Bid 793 Bid 1.1 12.062 1.

300 11.124 18.00% to 5.098.00% per annum (2009: 7.040 million recognised during the year on account of impairment in the value of asset acquired in satisfaction of claim.602.2.921 14.766.5 14.887. 14.00% per annum (2009: 4.2 Provision held against other assets Opening balance Charge for the year Reversals Amount written off Closing balance 12.257 3.521.809. The mark-up rate on this facility ranges from 7.766.320 20.3 This facility is secured against a demand promissory note executed in favour of the State Bank of Pakistan.674 93.1 9. Annual 2010Report 57 .687.098.321 20.124 8.465 11.966.099 13.652.60% per annum (2009: 6.6 14.533 3.442 302.653.50% per annum) payable on a quarterly basis.50% to 9.921 14.766.339 4.Note 2010 2009 (Rupees in „000) 12.50% to 8.1 This includes an amount of Rs.602.025 2.00% per annum) payable on a quarterly basis.653.2 Details of borrowings secured / unsecured Secured Borrowings from State Bank of Pakistan under: Export refinance scheme Long Term Finance for Export Oriented Projects Scheme (LTF-EOP) Long Term Finance Facility Modernisation of SMEs Repurchase agreement borrowings Unsecured Call borrowings Overdrawn nostro accounts 11.5 This facility is secured against a demand promissory note executed in favour of the State Bank of Pakistan.1 Particulars of borrowings with respect to currencies In local currency In foreign currencies 14.099 2.488.887.4 14.674 12.611 470.801.602.016 157.620 1.025 2.674 9.099 13.194 163.700.198 336.3 14.700. The mark-up rate on this facility ranges from 4.305 1.50% to 8.513 9. 93.00% to 5.2.040 102.887 189.025 2.653.098.358.700.320 20.150. 14.4 This facility is secured against a demand promissory note executed in favour of the State Bank of Pakistan.098.601 1.576.7 9.714 9.144 14 BORROWINGS In Pakistan Outside Pakistan 11.600 1.00% per annum) payable on a quarterly basis. 13 BILLS PAYABLE In Pakistan Outside Pakistan 4.610 18.601 1.921 14. The markup rate on this facility ranges from 6.866 75.099 13.124 18.

50% to 12.50% to 13.905.6 This facility is secured against a demand promissory note executed in favour of the State Bank of Pakistan.992. In case of occurrence of default.30% per annum (2009: 11.247.311 263. December 2004 AAEight years 3 equal semi-annual installments commencing 84th month after the issue date.309.709.346.1 Particulars of deposits In local currency In foreign currencies 284.317.436 83.non-remunerative Others Financial institutions Remunerative deposits Non-remunerative deposits 102.14.Quoted. December 2012 1.934 354.00% per annum payable on a quarterly basis.642 31.555 96. The mark-up rate on this facility is 6.849 25.022.668.461.578 69.888.697 4.015.753.759.292 262.199 298. 14.061 4.849.900 61.036 25.311 121.852 324.40% per annum) maturing by January 2011 (2009: July 2010).729.449.760.910.733 354.716 324.918 322.867 200.350.207 119.247.752 16 SUB-ORDINATED LOANS Term Finance Certificates II . Unsecured Mark up Base Rate + 1. 2010 2009 (Rupees in „000) 15 DEPOSITS AND OTHER ACCOUNTS Customers Fixed deposits Savings deposits Current accounts .435.120 1.340 88.377 30.600 Subordination Issue date Rating Tenor Redemption Maturity 58 Annual2010 Report .015.759.50 percent (Base Rate is defined as the simple average (average of the KIBOR Rate quoted by banks for that day) of the ask rate of the six months Karachi Interbank Offer rate (KIBOR) prevailing on the first day of the start of each half yearly period for mark up due at the end of that period) The TFCs are subordinated as to the payment of principal and profit.752 15. the TFC holder will rank below the senior unsecured creditors and depositors and other creditors of the Bank.7 This represents repurchase agreement borrowings from other banks at rates ranging from 12.

322.Fixed coupon of 15 percent per annum payable semi-annually in arrears Subordination The TFCs are subordinated as to the payment of principal and profit to all other indebtness of the bank. Unsecured Mark up Base Rate + 1.50 percent (Base Rate is defined as the simple average of the ask rate of the six months KIBOR prevailing on the first day of the start of each half yearly period and mark up due at the end of that period) The TFCs are subordinated as to the payment of principal and profit to all other indebtness of the bank. December 2017 4.192 7.322. Unsecured Mark up Either of the following options with the holder: .581 Subordination Issue date Rating Tenor Redemption Maturity Term Finance Certificates IV .50 percent (Base Rate is defined as the simple average of the ask rate of the six months KIBOR prevailing on the first day of the start of each half yearly period and mark up due at the end of that period) .Floating coupon of Base Rate + 2.000 5.072 1.567.181 Annual 2010Report 59 .2010 2009 (Rupees in „000) Term Finance Certificates III .000.Quoted.000 Issue date Rating Tenor Redemption Maturity 7. November 2005 AAEight years 3 equal semi-annual installments commencing 84th month after the issue date.998.Private. November 2013 1. December 2009 AAEight years 3 equal semi-annual installments commencing 84th month after the issue date.570.

983.419) 37.638) (15.076 10.167) (3.732.2 28. 18.339 1.207 51.165 373.788) (10.350 37.NET Deferred credits arising due to Difference between accounting book value of leased assets and lease liabilities Accelerated tax depreciation Loss on remeasurement of held for trading investment Surplus on revaluation of operating fixed assets Deferred debits arising due to Provision for doubtful debts Provision against other assets Provision against off-balance sheet obligations Impairment in the value of investments Unrealised loss on revaluation of investments classified as held for trading / transferred from held for trading to available for sale Deficit on revaluation of securities 423.142 900 (1.313) 179.081.404.510 238.356 30.1 18.617 9.1 This represents amounts payable to brokers against purchase of shares.125.Note 2010 2009 (Rupees in „000) 17 DEFERRED TAX LIABILITIES .258.623 528 6.623 63.425.693 590.851 17.224.168) (224.1 17.786 18.755) (137) (111.081 3.781 723.898 979.603) (2.498.216 4.164 (1.611 2. The tax benefit for this amount will be allowed upon disposal of these investments.548 1.264.633.201) (240.325 133.006.538) (2.056 44.207 38.472) (964.623 .517.772 1.007 55.116 111.260 280.386) (13.919 283.547 4.912 728 44. 18 OTHER LIABILITIES Mark-up / return / interest payable in local currency Mark-up / return / interest payable in foreign currencies Unearned commission and income on bills discounted Accrued expenses Payable against redemption of credit card reward points Security deposits against leases Exchange difference payable to the State Bank of Pakistan Payable to brokers Unrealised loss on forward foreign exchange contracts Provision against off-balance sheet obligations Workers' Welfare Fund Others 3.160 221.396.660 171.601 3.417 2.459 (1.155 710.2 Provision against off-balance sheet obligations Opening balance Exchange adjustment Charge for the year Closing balance 60 Annual2010 Report 37.1 18.439 44.540) 115.671 379.1 This includes deferred tax in respect of impairment recognised in value of investments which has been written off in the books of the Bank.

250 724. 10 each 2010 2009 Note 2010 2009 (Number of shares) (Rupees in „000) 624.349.786.Fixed assets .194) 710.298) 416.491.250 1.000 149.696) (13.545 723.500 6.000 399.533.750.3 2.753 151.000.000 574.000 2.2 Issued.140) 2.156.000.060) 3.000.300.695) (15.at the beginning of the year .250 20 225.406.000 724.750.500 6.Investment in associate 20.349.128 3.873 378.578.491.990) (13.605 585.500 7.Available for sale securities .250 Ordinary shares Fully paid in cash .250 1. 10 each 23.000. subscribed and paid up capital ordinary shares of Rs.000 Ordinary shares of Rs.000 23.1 Surplus on revaluation of fixed assets Surplus on revaluation of fixed assets at January 1 Transferred to retained earnings in respect of incremental depreciation charged during the year Related deferred tax liability in respect of incremental depreciation charged during the year Surplus on revaluation of fixed assets recognised during the year Reversal of deficit on account of disposal of property Other reversal 3.994 61 Related deferred tax liability on surplus as at January 1 Deferred tax liability booked Related deferred tax liability in respect of incremental depreciation charged during the year Annual 2010Report .244.343 (677.745.156.19 SHARE CAPITAL 19.406.300.177) 2.750.500 5.809.1 Authorised capital 2010 2009 Note 2010 2009 (Rupees in „000) (Number of shares) 2.244.000 624.994 230.250 724.417 2.363.611 2.128 (207.496.063 13.500.2 20.726 (24.at the beginning of the year .989 (37.533.298) 137.611 2.605 (29.796 (15.858 723.250.000 19.during the year 6.786.990) 636 7.499.1 20.000 1.160 20.063 7.154.247.247.906.during the year Issued as bonus shares .000.000 3.063 13.563 2.156 (13.988 2.247.406.244.809.NET OF TAX Surplus / (deficit) arising on revaluation of: .063 7.879 3.000 624.997.563 SURPLUS ON REVALUATION OF ASSETS .750.

707.227.3 Deficit on investment in associate Warid Telecom (Private) Limited Related deferred tax asset 21 CONTINGENCIES AND COMMITMENTS 9.343 21.518.22.5 Commitments in respect of forward lendings Forward repurchase agreement lendings Commitments to extend credit 21.345.528.936.468.282) (26.1 (1.879 53.920 7.972 2.073 18.697 783.843 39.252.577 354.3 Trade-related contingent liabilities Letters of credit Acceptances 21.238.619) (30.129 2.179.386 3.940.118.2 Transaction-related contingent liabilities i) Government ii) Banking companies & other financial institutions iii) Others 21.213.075 35.529 4.411) 329.2 Surplus / (deficit) on revaluation of available for sale securities Deficit on: Government securities Term finance certificates .847 44.678) 111.109 4.385.614 20.686.261.559.416 996.192.175 1.quoted Sukuk bonds Surplus on: Quoted shares / units / certificates Related deferred tax asset / (liability) 20.587 (318.293 10.6 Commitments in respect of forward exchange contracts Purchase Sale 62 Annual2010 Report 875.113.117.177) (616.538 (207.947.1 Direct credit substitutes i) Government ii) Banking companies & other financial institutions iii) Others 21.200.330 32.811) 364.125.041.489 6.200 3.493) 413.925 .374 (124.077 58.634 (677.738.Note 2010 2009 (Rupees in „000) 20.140) (22.235) (1.298 5.974 46.428) (10.4 Other contingencies Claims against the Bank not acknowledged as debts 21.031) 230.061 19.505 3.847 2.342 6.101 5.

3.923.840 307.320 395.726.023 5.473 7. However.10 Contingency for tax payable (note 29.346 562.402 9.Note 2010 2009 (Rupees in „000) 21. In order to mitigate this risk of adverse exchange rate movements the Bank hedges its exposure by taking forward position in inter bank market. Foreign Exchange Swaps: A Foreign exchange Swap (FX Swap) is used by the Bank if it has a need to exchange one currency for another currency on one day and then re -exchange those currencies at a later date.071 3.1) 22 DERIVATIVE INSTRUMENTS 250.716 29.033.339 367. the Bank's Treasury buys and sells derivative instruments such as: Forward Exchange Contracts Foreign Exchange Swaps Forward Exchange Contracts: Forward exchange contract is a product offered to customer backed by international trading contract.896.900 million) which pertains to the Bank's Islamic Banking Division.8 Commitments in respect of repo transactions Repurchase Resale 21. dealers.370.850 2. Forward Rate Agreements or FX Options.2 24.312 23.7 Commitments for the acquisition of fixed assets 21.018 5.514 1.376 11. intra-day and overnight limits.792 730.256 25.373.530.674 35.831 11.539.261 5.043 863.000 The Bank at present does not offer structured derivative products such as Interest Rate Swaps.1 These include mark-up earned of Rs.561. Annual 2010Report 63 . the exposure is also managed by matching the maturities and fixing the counter parties.676. These customers use this product to hedge themselves from unfavorable movements in foreign currencies.648 37. 4.710. Exchange rates and forward margins are determined in the "interbank" market and fluctuate according to supply and demand.780 1.812.987 million (2009: Rs.708 181.000 22.184.9 Other commitments Donations 21. In addition to this.785 209. 23 MARK-UP / RETURN / INTEREST EARNED a) On loans and advances to: i) customers ii) financial institutions b) On investments in: i) held for trading securities ii) available for sale securities iii) held to maturity securities c) On deposits with financial institutions d) On securities purchased under resale agreements e) Profit earned on ijarah assets net of depreciation 23.273.

521 1.881 1.979.813 43. Charge for defined benefit plan Contribution to defined contribution plan Rent.930 1.855.3 64 Annual2010 Report .623 213.443 1.068 466.563 51.527 27 ADMINISTRATIVE EXPENSES Non executive director fee & allowances Salaries.092 639. telex service charges etc.609 8.507 34.570 13.923.listed Sukuk Bonds 64 1.352 156.224 491.883 112.240 220. etc.2 11.373 12.400 (64. insurance.105 77.280.2 Profit earned on ijarah assets Lease rentals earned Depreciation for the year 24 678.636 24.508 464.594.354 4.273 23.Note 2010 2009 (Rupees in „000) 23.648 94.180 25 GAIN ON SALE OF SECURITIES . allowances.834 1.661 644. vehicle running expenses.613 169.385.726) 29.479 189.483) 209.195.423 27.949 359.2 11.664. etc.168 804. Legal and professional charges Communications Repairs and maintenance Stationery and printing Advertisement and publicity Capital work-in-progress written off Donations Auditors' remuneration Depreciation Amortisation of intangible assets Entertainment.832 1.467.371.568 653.440 76.669 60.309.790 1. taxes.813 3.620.751 5.010.372 172.131 (468.Pakistan Investment Bonds Shares .112 35.080 14.062 198.109.275 2.139 10.908 99.784 64.Market Treasury Bills .883 1. electricity.674 MARK-UP / RETURN / INTEREST EXPENSED Deposits Securities sold under repurchase agreements Other short term borrowings Term Finance Certificates Brokerage and commission Others 18.999 319.448 21.379 177.NET Federal Government Securities .020 1.344 145.924 26 OTHER INCOME Gain on sale of fixed assets Postage.578. Provision no longer required written back 21.771. travelling and subscription Others 15.710 1.1 27.132 468.569 2.592 382.966 532.214.161 188.302.654.570 13.000 688.7 35 27.275 12.143 585.404.

Cantt Public School Institute of Business Administration Relief Fund for Tameer-e-Pakistan Chief Minister of Punjab Governor of Punjab Flood Relief Fund None of the directors or their spouses had any interest in the donees. whichever is higher. Larkana Publician Alumni Trust .194 63.1 Donations Marie Adelaide Leprosy Center.000 2.000 5. The management's appeal in respect of this add-back is currently pending with the Commissioner of Inland Revenue (Appeals). In respect of tax year 2010.550 1.883) (262.232 (370.783 8.880 9.000 10.281 29.250 1. Income Tax Appellate Tribunal (ITAT) and High Court of Sindh.570 28.226 million.2 Auditors' remuneration Audit fee Half yearly review Special certifications and sundry advisory services Out-of-pocket expenses Fee for audit of foreign branches 28 OTHER CHARGES Penalties imposed by the State Bank of Pakistan Workers' Welfare Fund 28.691 (179. 27.500 51.Note 2010 2009 (Rupees in „000) 27.346) (936.442 1. 141.260 79.066.674) 119. Annual 2010Report 65 .620 800 2.165 76. bad debts written off and disallowances relating to profit and loss expenses. adequate provision has been made by the Bank in these financial statements.020 850 720 11.293 1. These issues mainly relate to addition of mark-up in suspense to income. The management is confident that this matter will be decided in favour of the Bank and consequently has not made any provision in respect of this amount.000 27.301 (767. Matters of disagreement exist between the Bank and tax authorities for various assessment years and are pending with the Commissioner of Inland Revenue (Appeals).081 (71.365) 756.454 4. the Bank is liable to pay Workers' Welfare Fund @ 2% of accounting profit before tax or declared income as per the income tax return.680 4.201 13.1 As per the Worker's Welfare Ordinance.570 850 720 11.1 The income tax assessments of the Bank have been finalised upto and including tax year 2010.1 25. 1971. 29 TAXATION For the year Current Deferred For prior years Current Deferred 842.000 12.665 16.881 3.056) 400. taxability of profit on government securities.645 4.375 13. the tax authorities have disallowed certain expenditure on account of non-deduction of withholding tax resulting in additional demand of Rs.137) 191. For all assessments finalised upto tax year 2009.

740 23.462 2.54.267.346) 119.156 (Rupees) Basic / Diluted earnings per share 30.tax for prior years .841 16.674) (1. 2010. The deficit uptil December 31.061 (51.179. the Bank has recognised impairment in the value of its investment in Warid Telecom (Private) Limited based on the difference between the cost and break-up value as at December 31.2 Relationship between tax expense and accounting profit Profit before taxation Tax at the applicable rate of 35% (2009: 35%) Effect of: .1 1.639 3.999 35.542 (179.056) 11.636 400.71 During the year.255 4.047 32 PACRA has assigned a long term credit rating of AA [Double A] and a short term credit rating of A1+ (A one plus) to the Bank as at June 2010 (2009: AA [Double A]) for long term and A1+ [A one plus] for short term).551 66 .50 and of the corresponding period would have been lower by Rs.903 62.773.316 355. the earnings per share for the current year would have been higher by Rs.579 883 7.452 897. 2009 been recognised in the profit and loss account for that year.009 6.533 0.72 0.710.368.745 479.293 1.281 BASIC / DILUTED EARNINGS PER SHARE Profit after taxation for the year 968.018 (71.016.722.tax charge pertaining to overseas branches .438 10.others Tax expense for the year 30 1.012 22.400 2. 2010 2009 (Number of Employees) 33 STAFF STRENGTH Permanent Temporary / On contractual basis Bank's own staff strength at the end of the year Outsourced Total staff strength Annual2010 Report 6.2010 2009 (Rupees in „000) 29.349.035 (Number of shares in thousand) Weighted average number of ordinary shares 1.income chargeable to tax at reduced rates .352) 4. Had the deficit uptil December 31.876 695 7. 0.106) 8. 2009 was recognised in the statement of financial position based on the exemption given by the State Bank of Pakistan.197.056.396 61. 0.089 9.489.711 (62.150.permanent differences . 2010 2009 (Rupees in „000) 31 CASH AND CASH EQUIVALENTS Cash and balances with treasury banks Balances with other banks Call money lendings CREDIT RATING 41.571 2.

was used for the valuation of the defined benefit plan: 2010 2009 Discount factor used Expected rate of return on plan assets Expected rate of salary increase Normal retirement age 14.596 207. 2010.241 189.847 163.4 Movement in fair value of plan assets Fair value at the beginning of the year Expected return on plan assets Contributions Benefits paid Actuarial gain / (loss) on plan assets Fair value at the end of the year 34.527) (132.379 (44.403 Annual 2010Report .853 18.605 (27.5 Plan assets consist of the following: Ordinary shares Term Finance Certificates Term Deposit Receipts Pakistan Investment Bonds Units of mutual funds Cash and bank 34.249 110. using the following significant assumptions.207 112.00% 14.966 (696.574 278.563) - 802.002.6 Movement in payable to defined benefit plan Opening balance Charge for the year Bank's contribution to fund made during the year Closing balance 145.403) (106.497 145.352) 67 1.966 696.379) 189.935) 696.430 468.272 70.3 Movement in defined benefit obligation Obligations at the beginning of the year Current service cost Interest cost Benefits paid Actuarial (gain) / loss on obligation Obligations at the end of the year 34.430) (324.352 (27.844 91.838) - 802.415 (44.00% 14.002.00% 60 Years 2010 14.897 1.352 (189.00% 60 Years 2009 (Rupees in „000) 34.527) (3.403 97.1 Principal actuarial assumptions The latest actuarial valuation of the Bank's gratuity scheme was carried out as at December 31.268 737.632) 677.369 115.000 72. Projected unit credit method.430 27.168 677.379 (145.217) 5.153 18.00% 14.730) 802.995 153.844 144.536 696.2 Reconciliation of payable to defined benefit plan Present value of defined benefit obligations Fair value of plan assets Net actuarial losses not recognised 34.217) (217.403 104.423 92.966 125.00% 12.34 DEFINED BENEFIT PLAN 34.268 (677.

928.415 (97.804 1.306 2009 2008 (Rupees in '000)-------------------------------- 2007 2006 Defined benefit obligation Fair value of plan assets Deficit Experience adjustments on plan liabilities 1.966 696.140 1.275 million (2009: Rs.751 4 14.811 (193.632) 35 DEFINED CONTRIBUTION PLAN The Bank operates an approved provident fund scheme for all its permanent employees to which both the Bank and employees contributes @ 8.437 940.317 68.140 1.308 250.002.207 112.088 772 14.287 8.551) (45. During the year. 36 COMPENSATION OF DIRECTORS AND EXECUTIVES Chief Executive 2010 2009 ---------------------------------------- Directors 2010 2009 (Rupees in '000)---------------------------------------- Executives 2010 2009 Fee Bonus Managerial remuneration Post employment benefits Rent and house maintenance Utilities 10.991 1.537.369 468.254 145. 68 Annual2010 Report .757 (115.097) (68.535) (87.403 (106.354 14.915 293.573 1 15.324 1.346 352.387 105.354 4 261.832 million) in respect of this fund.838) (5.605 (70.203) (28.888 972 26.897) 802.9 Historical information 2010 -------------------------------- 125.286 3.563) 132.7 Charge for defined benefit plan Current service cost Interest cost Expected return on plan assets Actuarial losses Past service cost 34.581 1.751 15.004 703 Number of persons 1 The Chief Executive and certain Executives have been provided with the free use of cars and household equipments as per Bank's policy. the Bank contributed Rs.730 (3.272 (269.379 (120.33% of basic salary in equal monthly contributions. 156.430 (324. 177.185 10.241) 32.549 858 128.Note 2010 2009 (Rupees in „000) 34.497) 5.097.151) (7) Experience adjustments on plan assets (217.006 82.415 189.249 110.927 132.948 1.619 3.8 Actual return on plan assets 34.268 677.044 354.935) 737.673) 366.212) 546.394) (2.352 66.135) 115.

37

FAIR VALUE OF FINANCIAL INSTRUMENTS

37.1 Fair value is the amount for which an asset could be exchanged, or a liability settled, between knowledgeable willing parties in an arm's length transaction. The fair value of traded investments is based on quoted market prices, except for tradable securities classified by the Bank as 'held to maturity'. These securities are being carried at amortised cost in order to comply with the requirements of the State Bank of Pakistan. Fair value of unquoted equity investments is determined on the basis of break up value of these investments as per the latest available audited financial statements.
Fair value of fixed term loans, other assets, other liabilities and fixed term deposits cannot be calculated with sufficient reliability due to absence of current and active market for such assets and liabilities and reliable data regarding market rates for similar instruments. The provision for impairment of loans and advances has been calculated in accordance with the Bank's accounting policy as stated in note 5.4 to these financial statements.

The repricing profile, effective rates and maturity are stated in note 41 to these financial statements.

In the opinion of the management, the fair value of the remaining financial assets and liabilities are not significantly different from their carrying values since assets and liabilities are either short term in nature or in the case of customer loans and deposits are frequently repriced.
2010 Fair value
2009

Book value
------------------------------

Book value

Fair value

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

42.2.1 Off-balance sheet financial instruments Forward purchase of foreign exchange Forward sale of foreign exchange 38 32,707,614 32,437,045 19,518,293 19,474,475 20,936,061 20,589,124 10,528,925 10,540,457

SEGMENT DETAILS WITH RESPECT TO BUSINESS ACTIVITIES The segment analysis with respect to business activity is as follows:
Corporate / Commercial Total Banking ------------------------------Rupees in '000-----------------------------Trading & Sales Retail Banking

2010 Total income Total expenses Net income Segment assets Segment non-performing loans Segment provision required against loans and advances Segment liabilities Segment return on assets (ROA) (%) Segment cost of funds (%) 2009 Total income Total expenses Net income Segment assets Segment non-performing loans Segment provision required against loans and advances Segment liabilities Segment return on assets (ROA) (%) Segment cost of funds (%)

9,199,236 9,047,421 151,815 22,450,071 21,848,034 10.73% 9.30% 8,912,879 7,975,616 937,263 17,610,187 19,027,799 10.27% 9.49%

4,742,820 4,361,948 380,872 23,662,933 3,479,864 2,561,539 25,517,913 17.47% 16.07% 5,995,017 5,523,135 471,882 26,918,726 3,165,731 2,313,603 28,456,584 18.05% 16.63%

28,296,361 27,460,303 836,058 365,370,835 14,840,158 8,717,768 341,812,348 11.98% 10.33% 25,835,669 26,228,498 (392,829) 344,541,142 13,019,985 7,047,127 319,452,252 12.28% 10.42%

42,238,417 40,869,672 1,368,745 411,483,839 18,320,022 11,279,307 389,178,295

40,743,565 39,727,249 1,016,316 389,070,055 16,185,716 9,360,730 366,936,635

Annual 2010Report

69

39

RELATED PARTY TRANSACTIONS
Parties are considered to be related if one party has the ability to control the other party or exercise significant influence over the other party in making financial or operational decisions and include major shareholders, subsidiary company, associated companies with or without common directors, retirement benefit funds and directors and key management personnel and their close family members.
Banking transactions with the related parties are executed substantially on the same terms, including mark-up rates and collateral, as those prevailing at the time for comparable transactions with unrelated parties and do not involve more than a normal risk.

Contributions to and accruals in respect of staff retirements and other benefit plans are made in accordance with the actuarial valuations / terms of the contribution plan. Remuneration to executives is determined in accordance with the terms of their appointment.
Details of transactions with related parties and balances with them as at the year-end are as follows:
2010 Key Group Strategic Directors Management Associates Subsidiary Investments Personnel Companies (Rupees in '000) ---------------------------------------------------

Total

39.1 Deposits
Balance at the beginning of the year Placements during the year Withdrawals during the year Balance at the end of the year 7,591 82,297 (61,101) 28,787 32,603 756,418 1,794,730 16,363 606,162 10,942,390 44,848,947 2,052,107 (594,509) (11,550,755) (45,416,064) (2,063,849) 44,256 148,053 1,227,613 4,621 18 2,607,723 - 58,531,903 - (59,686,278) 18 1,453,348

39.2 Advances
Balance at the beginning of the year Disbursements during the year Repayments during the year Balance at the end of the year 7,955 2,616 (1,339) 9,232 90,564 122,095 (62,973) 149,686 400,000 400,000 1,769,012 601,076 10,932,476 2,249,508 (10,960,392) (2,241,366) 1,741,096 609,218 2,868,607 13,306,695 (13,266,070) 2,909,232

39.3 Investments
Balance at the beginning of the year Investments during the year Withdrawals during the year Balance at the end of the year 253,161 5,883,753 60,769 - (263,930) (196,804) 50,000 5,686,949 76,000 76,000 120,000 6,332,914 60,769 - (460,734) 120,000 5,932,949

39.4 Call borrowings / Repo
Balance at the beginning of the year Borrowing during the year Repayments during the year Balance at the end of the year - 1,890,926 - 31,207,334 - (33,098,260) - 1,890,926 - 31,207,334 - (33,098,260) -

39.5 Call lendings / Reverse Repo
Balance at the beginning of the year Placements during the year Withdrawals during the year Balance at the end of the year 100,000 - 13,602,511 - (13,702,511) - 100,000 - 13,602,511 - (13,702,511) -

70

Annual2010 Report

Note

2010

2009

(Rupees in „000)

39.6 Advances Running finance - Subsidiary company - Other related parties Long term loans - Subsidiary company - Other related parties 39.7 Contingencies and commitments Letter of credit and acceptance outstanding Guarantees outstanding 39.8 Customer accounts PLS accounts - Other related parties Current accounts - Subsidiary company - Other related parties Fixed deposit accounts - Other related parties 39.9 Balances with other banks - Balance with United Bank Limited 39.10 With subsidiary company Brokerage expense Mark-up income Rent income Lease rental Provision held against advances Rent Receivable Finance lease income Brokerage payable Mark-up receivable on advances Security deposit Bank charges recovered Provision held against investment 39.11 With associated companies Insurance premium paid to Alfalah Insurance Company Limited Mark-up income on advances Mark-up expense on deposits Charge for security services to Security and Management Services (Private) Limited and Wakenhut Pakistan (Private) Limited Payment to Wateen Telecom (Private) Limited for purchase of equipment and maintenance charges Provision made during the year in respect of investment in Warid Telecom (Private) Limited Provision made during the year in respect of investment in Wateen Telecom Limited 322,757 318,512 245,230 36,916 136,524 1,705,824 113,553
Annual 2010Report

9,218 1,741,096 600,000 558,918

1,768,474 601,076 499,057

27,690 165,578

25,609 155,800

1,271,861 4,621 112,570 64,296

1,937,903 16,363 120,915 532,542

930,689

702,703

2,275 3,298 609,218 3,603 214 108,121 77 76,000

1,312 32,725 3,545 1,261 580,058 305 174 1,891 23,810 344 142 76,000

182,035 207,751 423,954 32,215 343,675 71

Note

2010

2009

(Rupees in „000)

39.12 With other related parties Capital gain on redemption of units of USAF Capital gain on sale of shares of UBL Loss on redemption of units of UMMF / UGIF Contribution to employees provident fund Payment for books of Ikram Majeed Sehgal Provision made during the year in respect of strategic investments Mark-up income on financing to group company 39.13 The key management personnel / directors compensation are as follows: Salaries and allowances 577,964 540,877 1,353 5,641 177,275 53,963 62,076 824 6,719 156,832 2,755 6,037 12,984

In addition, the Chief Executive and certain Executives are provided with Bank maintained car. 40 CAPITAL ADEQUACY

40.1 Capital Management
The objective of managing capital is to safeguard the Bank's ability to continue as a going concern, 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, creditor and market confidence and to sustain future development of the business. 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.

Goals of managing capital The goals of managing capital of the Bank are as follows: -

To be an appropriately capitalised institution, 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; and
Availability of adequate capital at a reasonable cost so as to enable the Bank to operate adequately and provide reasonable value addition for the shareholders and other stakeholders

Bank’s regulatory capital analysed into three tiers
Tier I capital, which includes fully paid -up capital, share premium, reserves (excluding foreign exchange translation reserves) and unappropriated profits (net of losses) etc. after deductions for certain specified items such as book value of intangibles, 50% of other deductions e.g., majority and significant minority investments in insurance and other financial entities.

Tier II capital, includes subordinated debt subject to a maximum of 50% of total Tier I capital and fulfilment of specified criteria laid down by the State Bank of Pakistan, general provisions for loan losses (up to a maximum of 1.25 % of total risk weighted assets), 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), foreign exchange translation reserves etc. 50% of other deductions noted above are also made from Tier II capital. Tier III supplementary capital, which consists of short term subordinated debt solely for the purpose of meeting a proportion of the capital requirements for market risks. The Bank currently does not have any Tier III capital.

The total of Tier II and Tier III capital has to be limited to Tier I capital.
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 offbalance sheet exposures. The total risk-weighted exposures comprise the credit risk, market risk and operational risk.

72

Annual2010 Report

527 (99.567) (99. the exposures are treated as unrated and relevant risk weights applied.352.291.741) 17.995 26.442 2. gold. 40.491.739 667.2 Capital adequacy ratio as at December 31.728 (455.347.318 6.132 2.873 13.445 26. calculated in accordance with the State Bank of Pakistan's guidelines on capital adequacy. are applied using the assessments by various External Credit Assessment Institutions (ECAIs) and aligned with appropriate risk buckets.690. Note 2010 2009 (Rupees in „000) Regulatory capital base Tier I capital Fully paid-up capital Reserves (excluding foreign exchange translation reserves) Unappropriated / unremitted profits (net of losses) Less: Book value of intangibles Shortfall in provisions required against classified assets irrespective of any relaxation allowed Deductions in respect of investment in TFCs of other banks in excess of limits prescribed in Appendix 1. Otherwise.598.764 73 Annual 2010Report . where available.836.001 (99.418) (6.741) 9.563 2. lien on deposits. are hence applied at adjusted exposures. are used as credit risk mitigant after applying appropriate haircuts under the Comprehensive Approach. using Basel II standardised approaches for credit and market risks and basic indicator approach for operational risk is presented below.749.412) (1.066 1.491.769 5. Collaterals used include: Government of Pakistan guarantees.040 858. bank and corporate guarantees and other debt securities that fall within the definition of eligible collaterals and also fulfil other specified criteria under the relevant capital adequacy guidelines.563 2. Risk weights notified.406 1.415. government securities.811) (99.767. 2010 The capital to risk weighted assets ratio.741) 17.041.860 (662. shares. In addition. wherever credit risk mitigation is available.On and off-balance sheet assets in the banking book are broken down to various asset classes for calculation of credit risk requirement. There has been no material change in the Bank‟s management of capital during the period. cash. External ratings for assets.114.591 820. Collaterals if any.1(3)(iii) of SBP Basel II Framework Other deductions (represents 50% of the majority or significant minority investments in insurance and other financial entities) Total Tier I Capital Tier II Capital Subordinated debt (upto 50% of total Tier 1 capital) General provisions for loan losses subject to 1.961.430.552 763. 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.956) (262.700. The calculation of Capital Adequacy enables the Bank to assess the long-term soundness.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 (a) 13. As the Bank carries on the business on a wide area network basis. 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.741) 8.454.

53% 26.446 11.846.973 1.304.312 41.715 6.543.338 2.160 568.675 743.910 33.Capital requirements Risk Weighted Assets 2010 2009 2010 2009 ------------------------------ Rupees in '000------------------------------ Risk-weighted exposures 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 Market risk Portfolios subject to standardised approach Interest rate risk Equity position risk Foreign exchange risk Operational risk TOTAL Capital adequacy ratio Total eligible regulatory capital held Total risk weighted assets Capital Adequacy ratio 40.639.291.246.804 524.227.404.200 2.191.101.3 Types of exposures and ECAIs used Moody’s & Fitch CRAB & CRISL^ (a) 1.557 8.039 5.318 249.501.250.541.088 30.838.853.220 208.634 24.182 854.077 143.704.491 3.578 83.043.440 17. 2009 has accorded approval to the Bank for use of ratings assigned by these agencies.058 3.419 810.700.025.174.190 294.384.266 109.036 9.497 388.327 10.534.742 4.404 512.764 214.333.953.634 12. The Bank uses these ECAIs to rate its exposures denominated in Bangladeshi currency on certain corporates and banks incorporated in Bangladesh.115 59.880. 74 Annual2010 Report .141 13.311 13.46% (b) [ a / b * 100 ] Exposures JCR-VIS - PACRA S&P Sovereigns other than PKR claims PSEs Banks Corporates ü ü ü ü ü ü ü - ü - ü - ü ü ^The State Bank of Pakistan through letter no.570 81.599 5.440.441 2.862.724 129.414 1.394.748 214.531 26.506.684.572 620.732 14.081.910.215 27.354.369.444 950.639.578 34.221 141.855.174 440.924 14.439.949.698.430.006 6.748 10.644 1.700 3.597 20. BSD/BAI-2/201/1200/2009 dated December 21.899 2.692 1.250.497 (b) 11.820 8.404 917.402.543 249.011 185.189 8.438 9.670 386.962 3.206.110 1.498 10.

797 3. - An independent risk review function exists at the Bank in the form of Internal Audit Group that reports directly to the Board Audit Committee. processes and systems infrastructure.111 2.438 250.488 41.363 693.645 496.018.442 72.581.806.861.6 *CRM= Credit Risk Mitigation 41 RISK MANAGEMENT The Bank has in place an approved integrated risk management framework for managing credit risk.952 2.503.321.764 .295.537 6.149 4.284 11.992 13.121 310.303 79.071. liquidity risk and operational risk as evidenced by its Board approved “Risk Management Policy" and "Risk Management & Internal Control” manual.104 4.210 1.136 41.853.712 103.960 4. RMD is the organisational arm performing the functions of identifying.684.568 4. monitoring and control of the credit exposures.Credit exposures subject to standardised approach .356 2.092.145.873.488.696 46.5 1 2 3. Moreover.049 12.352.3 4.11. assessment.FCY claims less than three months Banks . automation of CAR (Capital Adequacy Ratio) calculation is in process and is functional in significant branches of the Bank.874 144 11. a key to effective credit risk management is a well thought out business strategy.093. in line with its ambition to bring maximum sophistication to risk management function.3.411.759. The Bank has acquired Temenos T24 banking system as its core banking solution and its Risk Management system called T-Risk will be used for managing Credit.826.503.461 685.102.986 1. Moreover.969.901.581.919 2.3 4.504.975 49.101.664 3.971.832. - As a policy the reporting line of the risk management function has been kept completely independent of the businesses divisions and Credit Group.832.062. In the Bank's experience.992.880.386.942 2. Annual 2010Report 75 .180 5.256 6.300 149. measuring.278 128.996 177.493 3.459 . The Bank has extensively pursued the implementation of Basel II in the Bank.503.2.on balance sheet exposures Rating category Amount outstanding 2010 Deduction CRM* Net Amount Amount outstanding 2009 Deduction CRM* Net Amount Exposures Sovereigns other than PKR claims PSEs Banks Banks Banks .520 11. Market and Operational risks.165 12.5 1. Following is the governance structure and important policies on Risk Management of the Bank: - The Board of Directors through its sub-committee called „Board Risk Management Committee‟ (BRMC) oversees the overall risk of the Bank.627 4. 41.984. for Pillar 2 disclosures ICAAP exercise is conducted.1 Credit risk Credit Risk Management processes encompass identification.343.123 195.738 259.190. In order to meet the requirement.121.492. market risk.507.2.755 6.778 10.947.791.431 207.891. monitoring and controlling the various risks and assists the Apex level committee and the various sub-committees in conversion of policies into action.467 73.310 5.663 11.918.361 11.363 693.553 5.378 2. measurement.934. in order to enhance data integrity and the reliability regarding MCR (Minimum Capital Requirement) calculation.643.136 47.321.641 1.884.284 685. Progress has been made in implementation of Risk based Pricing & Approval Grids in the Bank.281.480 12.871 13.180 3.190. many steps have been taken by the Bank.311.378 1.615 64. The Bank's focus over the coming years will be to further enhance risk models.488 47.778 15.462.311.764 10.361 .010 5.569.806.969 9.397.453 1.PKR claims less than three months Corporates Corporates Corporates Corporates Retail portfolio Unrated Total 4.4 5.933.281.588 46.4.5 1 1.

which also incorporates a comprehensive system of cross -checks for data accuracy. the syst em is backed by secured database with backup support and is capable of generating MIS reports providing snapshot of the entire portfolio for strategising and decision making. For credit risk. the management has laid down the road-map to move towards the implementation of BaselII advanced approaches. as per State Bank of Pakistan Guidelines. procedural manual has been developed. will take place in due course. Moreover. The Bank manages its portfolio of loan assets with a view to limit concentrations in terms of risk quality. which is capable of quantifying counterparty risk in accordance with the best practices. Under TSA Banks are allowed to take into consideration external rating(s) of counter-party(s) for the purpose of calculating Risk Weighted Assets. Internal rating based portfolio analysis is also conducted frequently. which will generate ratings of transactions and provide estimated LGD (Loss Given Default). The current focus is on augmenting the Bank‟s abilities to quantify risk in a consistent. Credit Monitoring Division (CMD) keeps a watch on the quality of the credit portfolio in terms of its strengths.Risk Management Division. The Credit Risk Management comprises of the Credit Risk Department that looks after all the aspects of credit risk and conducts portfolio analysis and stress testing on a regular basis. The System now also has the capability to auto generate alerts on accounts showing weakness in financials and hence requiring a more vigilant monitoring. processes have been set for fine-tuning systems & procedures. weaknesses and vulnerabilities.1 Credit Risk . The adherence to Risk-appetite statement approved by the Board is monitored by RMD. Special attention is paid by the management in respect of non-performing loans. which shall provide a sophisticated platform for prudent risk management practices. methodologies and processes for deriving Credit Risk Weighted Assets in accordance with the SBP Basel II Standardised Approach is in place and firmly adhered. Special Asset Management (SAM) Department is functional and handles this responsibility in compliance with the regulatory requirements. 76 Annual2010 Report . Proactive credit-risk management practices in the form Integrated Bank-wide Risk Management and Internal Control Framework. and identifies weakening accounts relationships and reports it to the appropriate authority with a view to not only arrest deterioration but also to pre-empt any regulatory classification. 41. 2008 with the standardised approach. Simultaneously. maturity and large exposure. has migrated to Basel II as on January 1. geography. The Head of Credit Risk Department reports directly to the General Manager (GM) . A detailed procedural manual specifying return-based formats. The system is continuously reviewed for best results in line with the State Bank of Pakistan‟s guidelines for Internal Credit Rating. all documentation including security documentation is regular & fully enforceable and all disbursements of approved facilities are made only after necessary authorization by CAD. As part of prudential practices the Risk Management Division conducts pre-fact validation of major cases from integrated risk point of view.General Disclosures Basel II Specific Bank Alfalah Limited is using The Standardised Approach (TSA) of SBP Basel II accord for the purpose of estimating Credit Risk Weighted Assets. Credit Risk Management Committee has been set up to ensure implementation of the credit risk policy / strategy / credit plan approved by the Board and to monitor credit risk on a bank-wide basis and ensure compliance with limits approved by the Bank. The system takes into consideration qualitative and quantitative factors of the counter-party and generates an internal rating vis-à-vis anticipated customer behaviour.The Bank.1. The implementation on System. The Risk Management Division also monitors the NPL portfolio of the Bank and reports the same to BRMC. industry. Further the compliance of regulatory & internal limits is also monitored and any deviations are ratified from the competent authorities. adherence to Basel II accord. constitute the important risk management measures the bank is engaged in for mitigating these exposures. sanctioning and review procedures for the purpose of emphasising prudence in lending activities and ensuring the high quality of asset portfolio. Its credit evaluation system comprises of well -designed credit appraisal. A Centralized Credit Administration Division under Operations Group is working towards ensuring that terms of approval of credit sanctions and regulatory stipulations are complied. reliable and valid fashion which will ensure advanced level of sophistication in the Credit Risk measurement and management in the years ahead. The Bank has built-up and maintained a sound loan portfolio in terms of well-defined Credit Policy approved by the board of directors. A sophisticated Internal Credit Rating System has been developed by the Bank. information technology capabilities and risk governance structure to meet the requirements of the advanced approaches as well. The Bank has also developed Facility Rating System in line with SBP‟s guidelines. CMD maintains a Watchlist of such accounts which is generated on quarterly basis and is also reviewed by RMD. At Bank Alfalah Limited.

loan against shares etc. These adjustments.1 External ratings SBP Basel II guidelines require banks to use ratings assigned by specified External Credit Assessment Agencies (ECAIs) namely PACRA.3. fixed assets are generally taken as security for long tenor loans and current assets for working capital finance usually backed by mortgage. valuation and margining. are reduced from the exposure to compute the capital charge based on the applicable risk weights. TDRs. Additional security such as pledge of shares. The Bank would have the rights of secured creditor in respect of the assets / contracts offered as security for the obligations of the borrower / obligor.1.1. 2009 has accorded approval to the Bank for use of ratings assigned by CRAB and CRISL. Where there are two ratings available. For retail products.3 Disclosures with respect to Credit Risk Mitigation for Standardised and IRB approaches-Basel II specific 41.2 Collateral valuation and management As stipulated in the SBP Basel II guidelines. Fitch and Standard & Poors.1. collateral is taken in line with the policy.3 Types of collateral taken by the Bank Bank Alfalah Limited determines the appropriate collateral for each facility based on the type of product and counterparty. in order to cover the entire exposure Personal Guarantees of Directors are also obtained by the Bank. Under this approach. to produce volatility -adjusted amounts for collateral. cash collateral.1. specified securities and pledged commodities.41.1. The State Bank of Pakistan through its letter number BSD/BAI-2/201/1200/2009 dated December 21. whereas for long-term exposure with maturity of greater than one year. The Bank also offers products which are primarily based on collateral such as shares. long-term rating is used.).3. The Bank uses these ECAIs to rate its exposures denominated in Bangladeshi currency on certain corporates and banks incorporated in Bangladesh. The decision on the type and quantum of collateral for each transaction is taken by the credit approving authority as per the credit approval authorisation approved by the Board of Directors. SSC/DSCs.lowest rating is considered. security of the assets of the borrower and assignment of the underlying project contracts is generally obtained. For project finance. These products are offered in line with the SBP prudential regulations and approved product notes which also deal with types of collateral.3.2. the Bank uses the comprehensive approach for collateral valuation. The Bank uses external ratings for the purposes of computing the risk weights as per the Basel II framework. For exposures with a contractual maturity of less than or equal to one year. The valuation of the properties is carried out by an approved valuation agency. Housing loans and automobile loans are secured by the security of the property / automobile being financed respectively. the Bank makes adjustments in eligible collaterals received for possible future fluctuations in the value of the collateral in line with the requirements specified by SBP guidelines. In case of corporate and small and medium enterprises financing. For facilities provided as per approved product policies (retail products. charge on receivables may also be taken. Moodys. the security to be taken is defined in the product policy for the respective products. In line with Basel II guidelines.1. short-term rating given by approved Rating Agencies is used. also referred to as „haircuts‟. the Bank reduces its credit exposure to a counterparty when calculating its capital requirements to the extent of risk mitigation provided by the eligible financial collateral as specified in the Basel II guidelines. the lower rating is considered and where there are three or more ratings the second . Annual 2010Report 77 . Moreover. JCR-VIS. 41. 41.2 Disclosures for portfolio subject to the Standardised Approach & Supervisory risk weights in the IRB Approach-Basel II specific 41. 41.1 Credit risk mitigation policy The Bank defines collateral as the assets or rights provided to the Bank by the borrower or a third party in order to secure a credit facility.

BAL‟s annual credit plan spells out the maximum allowable exposure that it can take on specific industries.770 947.057.321.831 3.496.244.099 7.043 1.132 12.752 2.230.07% 7.514 2. the newly developed Internal Rating System allows the Bank to monitor risk rating concentration of counterparties against different grades / scores ranging from 1 – 12 (1 being the best and 10 – 12 for defaulters).137.00% 4.359 354.16% 0.12% 1.244.00% 1.990 1.940. geography.264 3.042.582.093 34.1.827.454.395.508 1.69% 1.518 1. In general.469 750.4 Segmental information 41.01% 1.991 1.498 148.487.67% 1. in line with the SBP Basel II requirements.450 201.1 Segments by class of business 2010 Deposits (Rupees Percent in '000) 3.636 80.523 108.83% 6.01% 1.00% 78 Annual2010 Report .795 4.27% 4.102.53% 1.54% 0.37% 2.384.596 16.62% 1.72% 1.385.45% 3.27% 0.853 7.252.750.53% 3.90% 1.365.877 6.13% 9.92% 0.634.914 4.09% 3. Additionally.07% 14.788 373.37% 0.04% 0.526 2.684 352.454 11.75% 0.598.36% 2.738 6.682.15% 0.03% 31.023 2.38% 0.426 31.735 218.957 947.98% 1.267 1.17% 0.94% 2.27% 7.32% 1.723 4.632 650 5.355 586.33% 1.52% 0.70% 0.711 1.22% 6.3.764.10% 0.08% 0.02% 0.431 24. Gold.180.10% 1.17% 2.761.26% 1. securities issued by Government of Pakistan such as T-Bills and PIBs.795 4.434. the Bank considers all types of financial collaterals that are eligible under SBP Basel II accord.09% 1.37% 3.935 1.017.326.797 872.57% 0.14% 1.374.267 155.615 163.80% 30.92% 0.514.589 6.06% 0.911.029 29.817 1.296.706 7.230.04% 100.39% 2.991.1.06% 1.4.956 24.62% 16.507 10.00% 0.595 1.4 Types of eligible financial collateral For credit risk mitigation purposes.158 17.39% 1.41.013 6. Within credit portfolio.646 0.99% 0.932.313 8.00% 1.075 538.10% 0.53% 1.09% 0.69% 0.21% 0.003. mutual fund units where daily Net Asset Value (NAV) is available in public domain and guarantees from certain specified entities.022 20.581.226 2.55% 0.021 1.63% 0.038. industry. as a prudential measure aimed at better risk management and avoidance of concentration of risks.40% 3.254 2. Moreover.11% 0.145 44.91% 6.901 450.100 13.138 62.472.670 2.904.213 15.878 82.423.70% 0.669. in order to restrict the industry concentration risk.35% 100.25% 1.344 350. This includes Cash / TDRs. and single/group borrower exposures.311 0.22% 0.1.855.5 Credit concentration risk Credit concentration risk arises mainly due to concentration of exposures under various categories viz.13% 0.507.095.553 2.3.1.464.17% 0.614.79% 22.49% 12.554. the SBP has prescribed regulatory limits on banks‟ maximum exposure to single borrower and group borrowers. the Bank recognises only eligible collaterals as mentioned in the SBP Basel II accord.123. 41.453 1.984.645 691.41% 0.047.846.47% 13.492 627.454. National Savings Certificates.283.384 766.878 13.052 3.313 2.70% 100.70% 3.53% 1. certain debt securities rated by a recognised credit rating agency.676 3.015.388.791 1.306.11% 2.336. 41.206 2.404.349.826.283 4.099.07% 0.376 3.509 5.533 33.00% Contingent liabilities * (Rupees Percent in '000) 69.17% 2.145 7.224.860.064 109.53% 0.21% 3.62% 0.247 2.581 791.431.595 154.298.322 1.04% 0.00% Advances (Gross) (Rupees Percent in '000) Agribusiness Automobile & Transportation Equipment Chemical and Pharmaceuticals Cement Communication Electronics and Electrical Appliances Educational Institutes Financial Fertilizers Food & Allied Products Glass & Ceramics Ghee & Edible Oil Housing Societies / Trusts Insurance Import & Export Iron / Steel Oil & Gas Paper & Board Production and Transmission of Energy Real Estate / Construction Retail / Wholesale Trade Rice Processing and Trading/ Wheat Sugar Shoes and Leather garments Sports Goods Surgical Goods Textile Spinning Textile Weaving Textile Composite Welfare Institutions Individuals Others 16.540 1.246 7.647 1.20% 0.084 2.87% 3.511.688.350 2.212.43% 0.74% 9.975.507 10.537 16.21% 0. for Capital calculation purposes.

84% 7.080.759.782 218.622.397.289 313.646 1.348 35.611 324.770.412.Advances (Gross) (Rupees Percent in '000) Agribusiness Automobile & Transportation Equipment Chemical and Pharmaceuticals Cement Communication Electronics and Electrical Appliances Educational Institutes Financial Fertilizers Food & Allied Products Glass & Ceramics Ghee & Edible Oil Housing Societies / Trusts Insurance Import & Export Iron / Steel Oil & Gas Paper & Board Production and Transmission of Energy Real Estate / Construction Retail / Wholesale Trade Rice Processing and Trading/ Wheat Sugar Shoes and Leather garments Sports Goods Surgical Goods Textile Spinning Textile Weaving Textile Composite Welfare Institutions Individuals Others 13.07% 27.17% 28.1.673 79.064 385.82% 0.792 1.761 1.08% 1.722 1.495 20.14% 6.36% 3.737.916.407 0.288 92.901 354.00% Contingent liabilities * (Rupees Percent in '000) 295.197.338 13.820 792.281 89.37% 2.195 121.442 1.681 2.338 2.19% 0.90% 0.696 7.877.93% 0.210.573 2.16% 0.82% 0.37% 0.856 1.792 94.392 3.274 200.561 10.824 2.365 109.09% 0.214.186 90.31% 0.99% 0.940 602.687.326.86% 3.930 8.96% 0.74% 0.649 4.846.266 1.12% 0.52% 2.049.37% 0.348.066.30% 100.00% 2.58% 3.905 280.972 306.244.800.00% 0.43% 0.52% 2.60% 27.907 233.116.715 3.853 12.017 448.655.18% 0.350 1.98% 1.714.833 3.200 88.61% 0.41% 1.342.00% 2009 Deposits (Rupees Percent in '000) 3.79% 28.173 4.14% 10.840.96% 2.524 5.744.947 596.57% 0.730 15.207 966.848.67% 0.403.926.296.090 4.22% 0.11% 0.548.291 11.570 2.02% 1.590 3.31% 1.22% 0.547 558.4.34% 6.022 148.701.319.428 10.16% 0.808 381.23% 0.406.190 856.860 20.16% 0.23% 18.154.024.91% 0.354 121.618.00% * contingent liabilities for the purpose of this note are presented at cost and includes direct credit substitutes.607 4.174.49% 1.54% 3.176.59% 0.37% 2.071 186.902.729 4.573.714.12% 4.371 5.28% 0.40% 1.853 15% 85% 100% Contingent liabilities * (Rupees Percent in '000) 19.018 15.71% 0.129 7.72% 4.259 1.137.01% 0.979.564 6.629.200 197.56% 1.682.855.899.99% 3.294 12.482 27.92% 2.591 5.91% 2.766 8.817 2.449 1.784.700 1.165 5.080.46% 2.627.56% 0.015.292.278.153 2.571 268.392 3.951.47% 3.40% 9.197.636 148.453 293 904.109 199.168 6.951 4.52% 0.650.048.00% 1.442.05% 0.392 1.37% 1.914 1.222 2.06% 2.768.892.016. transaction related contingent liabilities and trade related contingent liabilities 41.035.05% 2.431.164.09% 0.54% 0.311 14% 86% 100% Advances (Gross) (Rupees Percent in '000) Public / Government Private 32.005.368 1.55% 100.134 1.919.338 1.212.13% 0.809 14.258.410 305.068 1.00% 0.955 1.13% 0.263.868 25.23% 0.260.330 1.46% 100.91% 0.10% 1.51% 7.834 727.155.32% 2.2 Segment by sector 2010 Deposits (Rupees Percent in '000) 48.41% 8.650 4.40% 0.294.450.142 346.033 6.338.10% 0.706 10.22% 1.752 0.36% 6.84% 1.340 4.51% 0.09% 2.216.068.879.25% 1.47% 1.646 18% 82% 100% 79 Annual 2010Report .

1.169 615.185.629.742 417.363 3.642 271.407 * contingent liabilities for the purpose of this note are presented at cost and includes direct credit substitutes.629.679 2009 Classified Specific Advances Provisions Held 16.070.320.5 Geographical segment analysis Profit before taxation ------------------------------ 2010 Total assets Net assets employed employed Rupees in '000------------------------------ Contingent liabilities * Pakistan Asia Pacific (including South Asia) Middle East 933.408.290.974) 131. hunting and fishing Textile Chemical and pharmaceuticals Cement Automobile and transportation equipment Wholesale and retail trade Individuals Others 505.404 73.692 1.168 2009 Deposits (Rupees Percent in '000) 17% 83% 100% Contingent liabilities * (Rupees Percent in '000) 17.738 89.928 22.550. transaction related contingent liabilities and trade related contingent liabilities 80 Annual2010 Report .948 2.497.762.815 1.022 41.181 59.319.240.642 197.839 18.506.597.294 23.496 193.4.716 8.664 ------------------------------ Rupees in '000------------------------------ Public / Government Private 18.735.363 369.326 1.248 2.154 5.964 (45.319.126.1.549 225.541 1.316 360.426.055 21.906 22.499 3.133.185.679 10.305.4 Details of non-performing advances and specific provisions by sector Classified Advances 2010 Specific Provisions Held 10.597.276 84% 268.664 8.944 2.852 3.715 47.295 150.042 10.597.215 28. forestry.664 ------------------------------ Rupees in '000------------------------------ Agriculture.776 5.403.090 10.888 411.499.4.679.595 8.914.665.629.004.402 795.019.801 88.526 165.607 389.646 Contingent liabilities * 2009 Total assets Net assets employed employed Rupees in '000------------------------------ Pakistan Asia Pacific (including South Asia) Middle East 930.997.383.320.151 2.345 8.490.679 2009 Classified Specific Advances Provisions Held 426.676.022 18.4.745 Profit before taxation ------------------------------ 374.366 141.752 41.Advances (Gross) (Rupees Percent in '000) Public / Government Private 32.476 100% 324.569 5.3 Details of non-performing advances and specific provisions by class of business segment Classified Advances 2010 Specific Provisions Held 151.665 94.576 94.831 77.372 71.185.572 16.382 31.483.016.759.280.022 41.126.716 16.038.718.436 1.122.716 90.224 18.407 18% 82% 100% 16% 56.280 3.420 94.620.1.244.192.988.368.544 109.175 5.469.620.320.267.642 103.690 65.974 6.

Moreover.009 389.462.373 50.045.632) 22.295 .936.399 749. counterparties enter into swaps.562.061 88.887 21. The foreign exchange exposure limits in respective currencies are managed against the prescribed limits. forward transactions in inter-bank market on behalf of customers to cover-up their positions against stipulated risks.741 (20.500 2.070.255 3.333 7.41. The currency risk is regulated and monitored against the regulatory / statutory limits enforced by the State Bank of Pakistan.772 2. the Bank calculates 'Value at Risk (VaR)' on a daily basis by using 'Historical Method' taking into consideration the data of over 2 years.150.544 2009 Assets Liabilities ------------------------------ Off-balance Net foreign currency sheet items exposure Rupees in '000 Pakistan Rupee United States Dollar Great Britain Pound Japanese Yen Euro Other currencies Total foreign currency exposure Total currency exposure 369.708. Going forward the Bank is preparing to use more sophisticated systems and models and is currently evaluating use of various tools to enhance its capability to successfully meet the requirements of the internal models approach of Basel II.026 (14.223 73.532.243 10.217 138 (91.535 47.767 15.441.119 366. the Bank also carries out stress testing on a daily basis by applying parallel shocks of changes in market yield on all the categories of T-Bills and Government securities. The Bank uses the Standardised Approach to calculate capital charge for market risk as per the current regulatory framework under Basel II.750 56 5.373) 22.470 2.642. The buy and sell transactions are matched in view of their maturities in the different predefined time buckets.273) 58.291.124 16.360. Market risk mainly arises from trading activities undertaken by the Bank‟ s treasury.225.2.045.985 5.526.355 389.609 14.305.549 1.2 Market risk Market risk is the risk of losses due to on and off-balance sheet positions arising out of changes in market prices.470 (26.123. currency and counter-party limits for on and off-balance sheet financial instruments.137.732. Off-balance sheet financial instruments are contracts which are the resultant outcome of the import and export transactions.882 15.579 (16.743. These limits are reviewed.22.894 97.332 2. Currently.410.801 2.276.294 36.520.700 17.100.623. 41.22.054.483.215.983.301 26. adjusted and approved periodically.133.282 (32.709.716 16.083.364 33. The Bank manages this risk by setting and monitoring dealer.623 1.632 129.100.420 Annual 2010Report 81 .839 316. It also includes investments and structural positions in the banking book of the Bank.246 3.992 57.635 .299) 65. Moreover.207.1 Foreign exchange risk Foreign exchange risk arises from the fluctuation in the value of financial instruments consequent to the changes in foreign exchange rates.700.378 19. The analysis below represents the concentration of the Bank's foreign currency risk for on and off balance sheet financial instruments: 2010 Assets Liabilities ------------------------------ Off-balance Net foreign currency sheet items exposure Rupees in '000 Pakistan Rupee United States Dollar Great Britain Pound Japanese Yen Euro Other currencies Total foreign currency exposure Total currency exposure 354.055 333.285 13.544.178. To manage and control market risk a well defined limits structure is in place.515 4.916) 3.176.746 37.093 411.199 9.597 8.199.230) 6.

limits / controls for equity trading portfolios of Equity Portfolio Unit. The Bank is exposed to interest rate risk as a result of mismatches or gaps in the amounts of assets and liabilities and off-balance sheet instruments that mature or re-price in a given period. while the AFS portfolio is maintained with a medium term view of capital gains and dividend income.2.2 Equity position risk Equity position risk in the trading books arises due to changes in prices of individual stocks or levels of equity indices. The Bank‟s interest rate risk is limited since the majority of customer‟s deposits are retrospectively re-priced on a biannual basis on the profit and loss sharing principles. Special emphasis is given to the details of risks / mitigants. 41. the Bank‟s Asset and Liability Management Committee (ALCO) monitors the re -pricing of the assets and liabilities on a regular basis.41. The Bank‟s equity trading book comprises of Equity Portfolio Unit‟s classified as Held for Trading (HFT). 82 Annual2010 Report .3 Interest rate risk The interest rate risk arises from the fluctuation in the value of financial instruments consequent to the changes in the market interest rates. The objective of Equity Portfolio Unit‟s classified as HFT portfolio is to take advantages of short -term capital gains. In order to ensure that this risk is managed within acceptable limits.

464 882.557.080 33.257 8.539.395.161.268) 50.579 2.430.000 62.533 13.124 (2.803 4.395 362.197.124 354.494 36.763) 48.083.015.327 12.500 650.219.256.969 30.675.157 30.957 188.09% 11.812.442 26.364 30.415 83.513 27.756.557 10.537 29.177 1.861 207.347.144 157.402 1.380 546.906.297 49.121.155 26.002 8.255 6.946 10.528.865 2.069 10.254.413 12.914 12.513 3.425.614.307.759.415.840.446.631 58.440.061.861 9.293 10.611 29.667.112 121.470 1.444.467.989 15.780 4.753.917 12.340 6.519 14.150.722.180 12.966.273 546.380 9.586 7.638.021.473.000 5.587.082.583.493 7.358 12.378 7.741 (37.052.033.863.870 53.181 45.987.969 156.899.005.574.536.389 2009 Effective Yield/ Interest Rate ----------------------------------------------------------------------- Total Upto 1 Month Over 1 to 3 Months Over 3 to 6 Months Exposed to Yield/ Interest risk Over 6 Over 1 Over 2 Months to 1 to 2 to 3 Year Years Years Rupees in '000----------------------------------------------------------------------- Over 3 to 5 Years Over 5 to 10 Years Above 10 Years Non-interest bearing financial instruments On-balance sheet financial instruments Assets Cash and balances with treasury banks Balances with other banks Lendings to financial institutions Investments Advances Other assets Liabilities Bills payable Borrowings Deposits and other accounts Sub-ordinated loans Other liabilities 9.296.965 5.941.265.329.465 21.430 83.sale Repo transactions resale Repo transactions repurchase Off-balance sheet gap Total yield/interest risk sensitivity gap Cumulative yield/interest risk sensitivity gap 32.446.261.659.234 138.532 1.890 2.67% 35.880 122.380 9.792.326) 1.121.375.843 13.165 19.667.298.653.964.667.395.631 65.540.317.087 46.685.633.278 54.317.65% 4.804 4.652.08% 13.012 22.915.925 11.38% 17.527 396.705.981 51.007 4.462 7.273.21% 2.109 5.752 7.726.876 2.696.41.152.024 (81.780 11.61% 0.213 30.614 20.461 53.521 416.394.890 7.34% 5.179.151 6.170 5.570.708.726.518.708 28.780 3.780 21.662 9.383) 10.030.1 Mismatch of interest rate sensitive assets and liabilities Effective Yield/ Interest Rate ----------------------------------------------------------------------- 2010 Over 1 to 3 Months Over 3 to 6 Months Exposed to Yield/ Interest risk Over 6 Over 1 Over 2 Months to 1 to 2 to 3 Year Years Years Rupees in '000----------------------------------------------------------------------- Total Upto 1 Month Over 3 to 5 Years Over 5 to 10 Years Above 10 Years Non-interest bearing financial instruments On-balance sheet financial instruments Assets Cash and balances with treasury banks Balances with other banks Lendings to financial institutions Investments Advances Other assets Liabilities Bills payable Borrowings Deposits and other accounts Sub-ordinated loans Other liabilities On-balance sheet gap Off-balance sheet financial instruments Forward exchange contracts .871.230 8.667.311 7.440.219 3.946.981 372.700.159.409 11.118 619 4.772 1.234.788.556 Annual Report 83 2010 .536.995.067 2.purchase Forward exchange contracts .708.84% 3.685 428.739 8.588.004.061 4.818.301.527 56.322) 961.759.462 19.721.419.011 4.031 16.014.132 12.purchase Forward exchange contracts .827 25.740.380) (72.755 3.741 9.045.282 446.604.486.546 1.499 819.908 63.635) 0.341.513 71.178.899.546.919 57.476 10.395.235.904.374.126.155.766.773 9.424.3.750.609.879 122.037 94.215.779.123 1.545.734 36.276 1.287.766.395 103.985 479.305.138.964.505.212 6.736 8.621 35.228 6.673.009.511.841 16.01% 7.078 1.545.007 50.521.488 12.812.720.779.317.809.579 23.057) (40.934.497.097 1.724 4.398) 2.819.75% 41.058 16.025 1.523 10.829.565 1.224 75.500 79.sale Repo transactions resale Repo transactions repurchase Off-balance sheet gap Total yield/interest risk sensitivity gap Cumulative yield/interest risk sensitivity gap 19.050.692 156.782 11.789 35.757 13.038 8.116.991.687.591 28.056.940 1.072.788.512 12.583.886.192 3.737 9.192 8.116.393 On-balance sheet gap Off-balance sheet financial instruments Forward exchange contracts .828.41% 11.475 1.741 121.415 2.947 1.546 12.947.849.906.751 6.370.126.521.558 33.479 101.042.777 17.056.343 14.231.376 9.936.988.523 12.971 3.030.435 99.753.546 12.795.305.707.902 46.144 20.456.476 35.296.789 10.234 388.74% 10.415.460 26.813 9.061 1.921 324.460 32.818.494 40.096.181 5.831 10.479 4.567.843.416.954 (51.296.859 2.383 49.570.63% 7.336.778 8.552 2.400 (47.288.280 7.913 13.142 62.484 21.538.125 2.676.120 10.516 61.446.846 1.093.825.941.742 63.306 93.667.955 4.867 12.825.132 59.519 6.454.735 9.398 7.639 14.843.264.479 12.423 59.698.180 88.466 3.753.004.793.531.370.533 124.498.747.402 1.273 8.921 2.343 9.273 49.780 13.116.745.442.004.903 30.727.307.373 (5.884.800 16.134.902.29% 12.492.513 12.479 33.87% 14.184 29.455.599.404.037.754.773 30.819.685.461 29.175 13.573 33.878 2.394 7.556 113.961.943 2.022 5.395.347.264 51.212.847.558 5.438 12.941.768.256.559 (45.616.332.545.497.588 680.692 19.564 24.573.038.270.515 7.016 2.259 64.

Moreover.41. Bank also has a 'Contingency Funding Plan' in place to address liquidity issues in times of stress / crisis situations. The Bank‟s Asset and Liability Committee (ALCO) manages the liquidity position on a regular basis and is primarily responsible for the formulation of the overall strategy and oversight of the asset liability function. ALCO monitors the maintenance of balance sheet liquidi ty ratios.4 Liquidity risk Liquidity risk is the potential for loss to the Bank arising from either its inability to meet its obligations or to fund increases in assets as they fall due without incurring an unacceptable cost. Moreover. 84 Annual2010 Report . The BOD has approved a comprehensive liquidity management policy which stipulates the early warning indicators of liquidity risk and maintenance of various ratios. as core retail deposits form a considerable part of the bank‟s overall funding mix therefore significant i mportance is being given to the stability and growth of these deposits. depositor‟s concentration both in terms of the overall funding mix and avoidance of undue reliance on large individual deposits.

946 13.966 50.427.008) Over 3 to 5 Years 16.840.649.943 23.512 884.520 (5.846.087 47.264 534.247.766.873 8.491.223.144 10.667.876 179.534 40.983.802 41.312.709.756 28.187.192 115.165 1.796 231.919 178.281 93.529 41.990.075.964) 214.588 558.783 13.483.461 12.176 138.394 16.206 27.447 882. Therefore.756 22.981.651 48.768 12.587.704.082 152.494 507.653.122.310.870.677 (9.690.021 55.256.969 2.399 418.net of tax 22.535 17.063.643.870) Over 5 to 10 Years 9.144 20.949.399.561.237) Over 3 to 6 Months 1.005 42.839 91.002 252.066 7.964.309.442 29.541 Annual Report Net assets Share capital Reserves Unappropriated profit Surplus on revaluation of assets .867 25.527 4.449.728 2.000 115.101.030.438.352.101.142 356.083.620 208.848.667.872.966 95.518 4.863 154.478.965.710) 20.178.685 428.438 6.988.070.748.832 650.919 9.603 78.567.635 4.766.521.383 21.479 6.4.207 1.179.096.427 (21.893) 8.600 12.497.327.843 41.634 12.327 1.529 29.619.722.243 30.797 39.861 207.746.561. with the approval of ALCO.258.556 113.757 2.380 16.188.855 (27.582 54.555 12.722.056.987.792.133.278 103.006.544 2009 Upto 1 Month Over 1 to 3 Months Over 3 to 6 Months Over 6 Months to 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 Total ------------------------------------------------------------------------- Rupees in '000------------------------------------------------------------------------- Assets Cash and balances with treasury banks Balances with other banks Lendings to financial institutions Investments Advances Fixed assets Other assets Liabilities Bills payable Borrowings Deposits and other accounts Sub-ordinated loans Deferred tax liabilities Other liabilities 35.874 52.012 22.305.415.425.880 32.133 77.448.841.541 41.033 25.845 228.352.420 13.722.478 4.816 8.211.415 43.204) Over 2 to 3 Years 8.788.575 Over 1 to 3 Months 1.653 50.005.780 15.092 2.259.230.946 1.606 6.259 12.000 163.559.259 311.392 11.890 11.314 1.959 3.650 33.738 21.456.075.921 324.680 38.959 4.786 366.225 411.564 38.500 19.238 228.559 7.777.734 13.000.462.536.533 3.678 9.382.258 (869.395.966 34.498.134 29.254 23.899.068.184 16.134 19.921 615.640.529 79.074.net of tax 85 2010 .484 21.402 55.850 (4.176 138.556.578.819.224 623.948.552.194 14.563 3.003 758.777.104.563 3.255 6.430 207.666 30.652.055 3.167 1.134 51.492.942 5.200.511.270.396 8.based on working prepared by the Asset and Liability Management Committee (ALCO) of the Bank 2010 Total ------------------------------------------------------------------------- Upto 1 Month 11.741.716.841 16.699.676.936.740.075.034.159.269 37.851 10.247.133 2.438 14.494 633.953 (62.000 12.118 17.707.257 41.712 4. these deposits have been classified based on management experience with such class of deposits.848 39.125 86.906.41.160 22. these deposits are payable on demand.533.494 467.714.975.292.826.735 (8.019.380 389.181 179.544 13.939 Rupees in '000------------------------------------------------------------------------- Assets Cash and balances with treasury banks Balances with other banks Lendings to financial institutions Investments Advances Fixed assets Other assets Liabilities Bills payable Borrowings Deposits and other accounts Sub-ordinated loans Deferred tax liabilities Other liabilities 41.338 21.820) 23.893.363.204.521.879 668.152.281 61.557 947.919 1.818 1.670 446.358.018) Above 10 Years 29.226.839 4.771 479.472 Over 1 to 2 Years 9.706.120 847.931 11.639 14.957 188.003.752 208.420 Current and saving deposits do not have any contractual maturity.533 13.521.535 20.071 42.546 14.289 (66.212.124 354.470 20.347.400.072.519 1.273.519 4.895 Over 6 Months to 1 Year 680.435 99.750.525.097 1.273 1.955.261.943 1.860 2. 15.917.050.856 97.101.892.619.367.332.659. However.759.1 Maturities of assets and liabilities .913.007 10.515.784 40.150.635 22.216 389.042.314.342.499 1.330 43.048.851 1.569.138.318.006.878 2.731.700.042.491.070 416.888 85.809 48.876 1.295 Net assets Share capital Reserves Unappropriated profit Surplus on revaluation of assets .197.766 152.273.000 159.305.527.477.752 7.939 50.370 4.203 2.386 74.611 31.933.606 1.596 26.720.001 168.343 2.056.720.429.015.908 63.512 1.988 22.465.415 1.209.181 1.513 7.570.904.614.947.938 61.278 40.967 546.311 7.802 12.133.

027) 214.165 1.425.192.535 20.144 20.000 12.692 884.734.614.012 22.484 21.666 30.144 10.478.451.753.384 60.917.442 26.544 Net assets Share capital Reserves Unappropriated profit Surplus on revaluation of assets .851 10.216 389.430 207.based on contractual maturity of the assets and liabilities of the Bank 2010 Total ------------------------------------------------------------------------- Upto 1 Month 11.159.788.113 Over 2 to 3 Years 8.087 46.075.249 20.798 (6.876 179.939 50.380 4.178.305.861 207.536.4.417.588 558.880 32.258.399.470 20.657 416.518 4.750.680 36.281 61.845 228.015.133.056.2 Maturities of assets and liabilities .396 8.809 (187.000 163.124 354.238 228.921 324.net of tax Management Committee (ALCO) keeping in view historical withdrawal pattern of these deposits reflects a more meaningful analysis of the liquidity risk of the Bank.748.465.134 19.756 22.144 (147.000 115. The management believes that the maturity profile disclosed in note 41.160 22.919 1.988.014.120 847.841 Above 10 Years 29.net of tax 2009 Upto 1 Month Over 1 to 3 Months Over 3 to 6 Months Over 6 Months to 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 Total ------------------------------------------------------------------------- Rupees in '000------------------------------------------------------------------------- Assets Cash and balances with treasury banks Balances with other banks Lendings to financial institutions Investments Advances Fixed assets Other assets Liabilities Bills payable Borrowings Deposits and other accounts Sub-ordinated loans Deferred tax liabilities Other liabilities 35.003 27.256.438 14.538 18.243.494 633.603 78.243 30.395.564 249.400.343 2.533 3.427.292.567.919 178.766.315.101.499 1.925 1.899.338 5.939 Rupees in '000------------------------------------------------------------------------- Assets Cash and balances with treasury banks Balances with other banks Lendings to financial institutions Investments Advances Fixed assets Other assets Liabilities Bills payable Borrowings Deposits and other accounts Sub-ordinated loans Deferred tax liabilities Other liabilities 41.570.363.075.649.890 11.295 22.981.184 16.939.919 9.420 13.075.863 1.185) 2.653 50.042.101.291) Over 1 to 3 Months 1.063.529 2.904.021 53.777.181 179.596 26.738 21.746.068.070.462.224 623.651 1.650 792.237 12.792.513 7.967 546.207 1.030.492.620 208.848.569.759.533.851 1.187.052. .134 29.383 21.561.491.477 882.633.635 22.225 411.802 41.936.219 5.801.133 2.255 6.931 11.556 113.722.766 152.964.600 12.176 138.716.019.415.784 43.752 7.749 59.077.278 40.647 Over 5 to 10 Years 9.258 6.86 Annual Report 2010 41.056.786 366.491.772 1.536.479 6.179.947.557 947.873 446.259 12.515.587.158 Over 3 to 6 Months 1.314.619.281 3.574 17.667.771 479.420 The above mentioned maturity profile has been prepared based on contractual maturities.962 Over 3 to 5 Years 16.578 4.546 418.802 12.257 41.991 13.879 668.4.902 91.906.512 1.888 85.380 389.223.534 8.718 6.192 115.413.757 2.327.629 1.623.259 311.002 252.707.330 26.394 16.816 8.796.839 4.118 619 4.878 2.690.101.461 12.050.908 63.000.987.988 22.966 2.946 13.519 4.555 12.840.342.438.563 3.402 53.273.005.290 Over 6 Months to 1 Year 680.667.832 650.990.521.695.074.652.103.305.685 428. The management believes that such a maturity analysis does not reveal the expected maturity of saving deposits as a contractual maturity analysis of deposits alone does not provide information about the conditions expected in normal circumstances.270.097 1.247.752 208.860 2.938 234.960 2.448.549.529 5.546 14.561.874 52.826.639 14.720.728 2.003 758.959 3.943 1.125 86.544 13.533 13.435 99.296.055 3.552.527 4.676.194 14.582 54.702.212.722.415 1.841.966 4.521.264 534.957 188.309.133.841 16.322 7.070.273 1.533.033 25.278 103.709.843 214.541 8.950.983.529 3.006.142 356.311 7.273.734 13.392 11.512.519 1.583.319 22.695.461 97.347.578 1.082 152.000 159.594) 1.521.975.848 18.269 17.456.756 28.347.819.885 Over 1 to 2 Years 9.238.494 467.634 12.327 1.964.007 10.118 4.197.921 615.635.1 that includes maturities of saving deposits determined by the Asset and Liability 15.585.204.563 3.796 231.870.777.872.535 17.818 1.083.386 74.611 34.467 (117.096.370 4.706.678 9.541 41.766.966 5.740.254 5.500 19.494 507.969 2.790.898.071 25.152.780 15.896 Net assets Share capital Reserves Unappropriated profit Surplus on revaluation of assets .606 6.206 156.388 15.521.449.134 262.247.863 154.624.809 46.890 1.332.429.556.559 7.415 43.150.653.948 39.876 1.497.133 23.400.619.700.209.261.483.318.134.001 168.511.035.122.631.176 138.578.

“the risk of loss resulting from inadequate or failed internal processes. All the business / support units are responsible for ensuring compliance with policies and procedures in their day-to-day activities and monitoring key operational risk exposures. occurring across the organisation and reported to Operational Risk Management Department. are aggregated to an internally developed „Operational Loss Database‟. monitor. and the recommendations of RMD are taken into consideration before their approval at the appropriate level.5. Almost all the policies and procedures of the Bank are reviewed from the risk perspective. As required by Basel II. risk awareness culture is being encouraged by communicating the principles of proper risk management to all Bank employees. in order to use it as an action plan in improving the operational risk & control system at the organisational and business / support unit levels. 2011 has not declared any cash or stock dividend (2009: 8% cash dividend). Annual 2010Report 87 . Key Risk Indicators (KRIs) have been identified across the Bank and now KRI reporting has also been initiated. Bank has categorised all its Operational loss/near miss incidents into following loss event categories. 41. The Operational risk management policy of the Bank is incorporated in the Board-approved Risk Management Policy and Risk Management & Internal Control Manual. which directly reports to General Manager . control & report operational risk in a consistent & transparent manner across the Bank. people and systems or from external events." In compliance with the Risk Management guidelines.Basel II Specific Currently. Risk & Control Self Assessment (RCSA) exercise and Key Risk Indicators (KRIs) are being developed and implemented across the organisation. These Operational losses. processes. issued by SBP. A reporting structure has been put in place whereby all business / support units have been made responsible to collect and report the operational losses / near miss incidents to Risk Management Division. 42 NON-ADJUSTING EVENT AFTER THE BALANCE SHEET DATE The Board of Directors in its meeting held on March 03.41. assess. an Operational Risk Function has been established within RMD. An Operational Loss Database.RMD. Product & Business Practice Damage to Physical Assets Business Disruption & system Failure Execution. A dedicated IT Security Unit is functioning within Risk Management Division while responsibility for BCP implementation resides with Operations Group. Delivery & Process Management For the purpose of continuous monitoring of risks. Basel II and the capital calculation approaches. structure and functions of Operational risk management and provide guidelines to identify. A separate „Research & Help Desk‟ has been created in this regard that helps in creating awareness about Risk Management. Operational Risk Function and business / support units are involved and regularly collaborate in determining and reviewing the strategy. However.1 Operational Risk Disclosures .5 Operational risk Basel II defines Operational risk as. the mapping of business activities into Basel defined business lines has already been completed. Bank is using the „Basic Indicator Approach‟ for calculating the capital charge for Operational Risk. - Internal Fraud External Fraud Employment Practice & Workplace Safety Client. BAL‟s Information Security Policy and Business Continuity Plan have been approved by the Board of Directors and are in the process of implementation. At Bank Alfalah. Bank intends to move towards the „Alternative Standardised Approach‟ and for this purpose. which covers the strategies.

wherever necessary to facilitate comparison and to conform with changes in presentation in the current year. 44 44.43 DATE OF AUTHORISATION These financial statements were authorised for issue on March 03. Chief Executive Officer Director Director Chairman 88 Annual2010 Report . 2011 by the Board of Directors of the Bank. re-arranged or additionally incorporated in these financial statements. There were no significant reclassifications during the year.1 GENERAL Comparatives Comparative information has been re-classified.

557 2. Bahawalnagar Name of individuals / partners / directors (with N. Trans Layari.485 .905 1.429 678 869 2.000 OR ABOVE DURING THE YEAR ENDED DECEMBER 31.) 3 Rana Jamshaid Iqbal CNIC # 31101-4786961-1 Father’s / Husband’s Name 4 Muhammad Iqbal Outstanding Liabilities at January 1.414 2010R eport Muhammad Javed CNIC # 42201-0184092-3 Malik Duray Rehman 89 Total 23. Hanif .490 29. 2010 (Rupees in ‘000) S. 2010 Principal 5 2.905 ] Anjum Asad CNIC # 517-92-456285 Annual 6 Airport Limousine Services A. Karachi.STATEMENT SHOWING WRTTEN-OFF LOANS OR ANY OTHER FINANCIAL RELIEF OF RUPEES 500.T.195 Principal written-off 9 918 Mark-up written-off 10 578 Other financial relief provided 11 499 Total (9+10+11) 12 1. Shafiq CNIC # 604-76-218361 M.158 3.705 2. M. Muhammad Saleem CNIC # 13503-6907712-9 Malik Duray Rehman 4.628 8.C.I.842 863 - 7.642 1. Hanif CNIC # 54303-2031642-5 Haji Safar Mohammad 6.058 960 - 2.133 1.746 4.154 Mark-up 6 578 Others 7 463 Total (5+6+7) 8 3. General Bus Stand.A.A.133 - - 6. 1 1 Name and address of the borrower 2 Rana Brother Transport Co.018 Plot # L-453 Shereen Jinnah Colony #2 CNIC # 42301-5408381-7 Clifton Karachi 4 Seven star Transport Com Shop # 9 Rehman Service Station Sheereen Jinnah Colony Clifton.I 5Venus Distributors (Pvt) Limited 28.976 [ A n en x u er 3 Amjad Shinwari Ent. Hawksbay Road Maripur Karachi Adnan Asad CNIC # 517-53-060996 Asad Jan Hamid 1. Sabet Shah Ziarat Shah 6.229 678 869 3.995 2 Sehar Coaches.136 3.443 462 - 1. Karachi M.458 77 4. No. F Head Quarter Road.581 3.756 - 2. Bahawalpur Zulfiqar Ahmad CNIC # 35201-1541591-1 Muhammad Sadique 2. Shahrah-e-Faisal Near C. Amat Filling Coach. No. Behind Shell Pump off.177 M. S.914 1.443 462 - 1.603 16.158 6.776 1.256 - 2. Mr.

852 73.181 35.863.390.115 3.939.195 1.464.813 3.168.921 5.253 1.393.796 688.841 7.338 4.327 331.800.807 4.208.995 1.817.878 25.579 3.846.638.086 495.030.net Fixed assets Other assets LIABILITIES Bills payable Borrowings Deposits and other accounts Sub-ordinated loans Liability against assets subject to finance lease Deferred tax liabilities Other liabilities NET ASSETS REPRESENTED BY Islamic Banking Fund Exchange Equalisation Reserve Unappropriated / Unremitted profit Surplus on revaluation of assets .049 46.500 Remuneration to Shariah Advisor / Board CHARITY FUND Opening balance Additions during the year Payments / Utilization during the year Closing balance 10.247.891 4.376 3.808 90 Annual2010 Report .389 16.800.111 37.502 65.817.575 46.net Advances .365.935 1.073.152 1.net of tax 6.277.619 10. 2009: 60 branches).724 1.195 4.107 38.883 60.000 8.393 25.920.559 1.809 22.500 1.090 55.228 2.846.219 42.132 10.331.552.634 5.857 757.086.074 3.557.253 1.050 2.845.Annexure-II IslamicBankingBusiness The bank is operating 80 Islamic banking branches as at December 31.135.808 50.957. 2010 (December 31.390 1.138 760.059. 2010 2009 (Rupees in „000) ASSETS Cash and balances with treasury banks Balances with and due from financial institutions Lendings to financial institutions Investments .177.159.000 12.522.

net of tax Profit available for appropriation / unremitted profit 4.net Provision for diminution in value of investments .277.544.157 2.037.558 3.434.277.685 1.421.742.900 1.896.986 468.204) 74.338 64.562 1.475.664 5.040.138 110.715 1.479 236. 2009: 60 branches).013 32.503 29.579 Annual 2010Report 91 .829.net Unrealised gain on revaluation of investments classified as held for trading Other income Total non mark-up income NON MARK-UP EXPENSES Administrative expenses Other charges Total non mark-up expenses PROFIT BEFORE TAXATION Unappropriated profit brought forward Transferred from surplus on revaluation of fixed assets .294 1.746 701.432. commission and brokerage income Dividend income Income from dealing in foreign currencies Gain on sale of securities .348 432.156 1.304 295.545 3. 2010 2009 (Rupees in „000) Mark-up / return earned Mark-up / return expensed Net mark-up / return income Depreciation on assets given on lease Net mark-up / return income after depreciation Provisions against loans and advances .913 42.247.net Bad debts written off directly Net mark-up / return income after provisions NON MARK-UP INCOME Fee.990 32.548 575.807 76.281 34.899 4.771 1.991 1.953 1.447. 2010 (December 31.987 2.064 31.201 1.823 (47.479.404.961 70 1.007.001 2.417 42.373.Annexure-II IslamicBankingBusiness The bank is operating 80 Islamic banking branches as at December 31.972.945 1.833 127.579 275 2.942 27.515 1.762 969.483 2.

My review which includes the examination of documentation and procedures applied by the bank is based on sample testing of each type of operation.ISLAMIC BANKING DATED: February 09. specific resolutions and guidelines issued by Shariah Advisor and State Bank of Pakistan. but the employees working in this segment feel. the activities and transactions performed by Bank Alfalah Islamic Banking Group during the year 2010.KHALIL AHMAD AAZAMI SHARIAH ADVISOR BANK ALFALAH . Alhamdollilah. In my opinion there are certain areas which require further improvement and attention of the management. income of PKR. 1. Wassalam Alaikum Wa Rahmat Allah Wa Barakatuh. i. May Allah bless and guide us as He has done since the inception of Bank Alfalah Islamic Banking Group to accomplish these cherished tasks and made us successful here and hereafter. it must be made mandatory for all the staff in Islamic Banking Group to attend these courses. 4. As a result of our examination. Although. 2011 92 Annual2010 Report .20 million has been transferred to the Charity Account due to late payments from the customers and an amount of PKR 35. In my opinion. The Bank has inducted a concentrated training calendar for Islamic Banking. The allocation of fund. 2. act and behave as if they are working in an Islamic Financial Institution. which are the nucleus of the Islamic Banking in their true spirit . since sufficient numbers of Takaful companies are providing their services. it is necessary that on one hand the program should be reviewed and upgraded regularly to keep it in line with the changes occurring in Islamic Banking industry both domestically and internationally and on the other hand. 5. DR. to enable me to express an opinion as to whether or not the bank complied with Shari'a rules. religious opinions. Bank should also initiate customer awareness programmes in the form of seminars and workshops regarding Islamic Banking and its products. 0. it is necessary that like other transactional matters.29 million was also refunded to Customers in instances where Bank was declared ineligible to earn profit. An amount of PKR. their employment contracts and retirement benefits should also be reviewed and brought in line with the Shariah rulings available in the matter. Aameen.e. Alfalah Islamic Banking is a Division of Bank Alfalah Limited. Therefore. therefore. however. to ensure that its optimum benefits are gathered. During the year an amount of PKR 50. as a whole.856 million has been transferred to the Charity Account. rendering Bank Alfalah Ltd . Bank Alfalah Islamic Banking Group should now focus on Shirkah and Modarabah. Conventional insurance was initially allowed in the absence of its Islamic alternate. 2. are in compliance with the principles and guidelines of Shariah. 3.878 million was disbursed to the charitable avenues. A Major improvement is the establishment of Internal Shariah Audit department under supervision of Internal Audit Group to ensure audit of branches with reference to Shariah Compliance. Takaful.Islamic Banking Group's remaining income to be pure and Halal. December 31st 2010. determination of weightages.[ ShariahAdvisor'sReport ] I have reviewed the principles and procedures applied by Bank Alfalah Islamic Banking Group while executing contracts relating to transactions entered into during the year ended. profit ratio and distribution of profit were in accordance with Shariah Principles. Bank Alfalah Islamic Banking Group should speed up the shifting process of its portfolio from insurance to Takaful. On the asset side.

Consolidated Financial St atements of BANK ALFALAH LIMITED and Subsidia ry Comp any .

evaluating the overall presentation of the financial statements. Our responsibility is to express an opinion on these consolidated financial statements based on our audit. The financial statements of the subsidiary company were audited by another firm of Chartered Accountants and our opinion in so far as it relates to the amounts included for such company. We have also expressed a separate opinion on the separate financial statements of Bank Alfalah Limited. Chartered Accountants Engagement Partner: Salman Hussain Dated: March 06. 2010 and the related consolidated profit and loss account.[ Auditors'ReporttotheMembers ] We have audited the annexed consolidated financial statements comprising consolidated statement of financial position of Bank Alfalah Limited and its subsidiary company. We conducted our audit in accordance with the auditing standards as applicable in Pakistan. is based solely on the report of such auditors. Ferguson & Co. for the year then ended. Alfalah Securities (Private) Limited as at December 31. We believe that our audit provides a reasonable basis for our opinion. their cash flows and changes in equity for the year then ended in accordance with the approved accounting standards as applicable in Pakistan. An audit also includes assessing the accounting policies and significant estimates made by the management. evidence supporting the amounts and disclosures in the financial statements. An audit includes examining. except for thirty one branches. These consolidated financial statements are the responsibility of the Holding Company's management. the consolidated financial statements present fairly the financial position of Bank Alfalah Limited and its subsidiary company as at December 31. their comprehensive income. consolidated statement of comprehensive income. consolidated cash flow statement and consolidated statement of changes in equity together with the notes forming part thereof (here-in-after referred to as the 'consolidated financial statements'). 2010 and the results of their operations. A. These consolidated financial statements include unaudited certified returns from the branches. 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. as well as. F. 2011 Karachi 94 Annual2010 Report . which have been audited by us and seven branches and one offshore banking unit audited by auditors abroad. on a test basis. In our opinion.

969 1.124 354.492 14.133 1.714.612.722.2010 Note 2010 2009 (Rupees in „000) ASSETS Cash and balances with treasury banks Balances with other banks Lendings to financial institutions Investments .079 18.358 774.927 14.682.653.195 NET ASSETS REPRESENTED BY Share capital Reserves Share in share premium of associate Accumulated losses Non-controlling interest Surplus on revaluation of assets .054 14.742 411.693) 19.561 207.192 5.021.570.079 3.473 (23.926) 18.671.968.206.net Advances .294.871 21.438 (27.819.882 35.743.841 16.567.563 3.700.491.197.267 LIABILITIES Bills payable Borrowings Deposits and other accounts Sub-ordinated loans Liabilities against assets subject to finance lease Deferred tax liabilities .921 324.116 21.438 188.181 12.389 7.901.178.496 389.803.533 6.279.251.570) 19.net of tax 21 20 13.587.net Other liabilities 13 14 15 16 17 18 19 4.143 21.454 14.947.766.072 21.025 22.435 99.910 993.011 3.622.010.648.325 9.690 7.ConsolidatedStatementofFinancialPo sitionAsatDecember31.497.011 13.648.615.195 CONTINGENCIES AND COMMITMENTS 22 The annexed notes 1 to 45 and Annexures I and II form an integral part of these consolidated financial statements.246 10.833 367.552.868 2.521.155. Chief Executive Officer Director Director Chairman Annual 2010Report 95 .091.469.357.595 12.682.056.563 3.180.011.097 390.533 13.556 113.435 (72.671.net Fixed assets Deferred tax assets Other assets 6 7 8 9 10 11 12 41.152.491.144 20.

Current .401) (179.916 76.568 (97.934 1.473 1.732 690.504 2.373 11.903.Deferred .20 10.300 1.114.160 (537.056) (152.155 276.483 535.2 12.009.817 3.700 12.011 207.904) 26 9.664 1.974 2.983 (Rupees) (97.019.976.554.248.954 (1.847 4.398 23.553 (27.484 79.167.266.065.net Other income Total non mark-up / interest income Non mark-up / interest expenses Administrative expenses Provision / (Reversal of provision) against off-balance sheet obligations Provision against other assets Other charges Total non mark-up / interest expenses Share of loss of associates Extra ordinary / unusual items Profit before taxation Taxation .6 37.530.197 1.89 The annexed notes 1 to 45 and Annexures I and II form an integral part of these consolidated financial statements.735) 898.674) 181.306.709.2 29 30 1.454 11.500 149.166.233 12.411.214.052 3.ConsolidatedProfitAndLossAccount FortheyearendedDecember31.303.578 13.036.912 7.166.835.419) 258.Prior years Share of tax of associates Profit / (loss) after taxation Profit / (loss) attributable to: Equity holders of the parent Non-controlling interest 24 25 10.021 6.488 277.194.854.110 845.763 (71.net Unrealised gain on revaluation of investments classified as held for trading .133.932) 2.930 24.2010 Note 2010 2009 (Rupees in „000) Mark-up / return / interest earned Mark-up / return / interest expensed Net mark-up / interest income Provision against loans and advances .526 67.658 3.815 25.846 11.451.22 27 28 19.595.net Provision for diminution in value of investments Bad debts written off directly Net mark-up / interest income after provisions Non mark-up / interest income Fee. Chief Executive Officer Director Director Chairman 96 Annual2010 Report .527 171.140 1.332.558 1.665 12.801 5.202.904) (97.607 59.042 (1.820 2.5 9.878 10.071.056 94.726 16.127 1.393.845.263.544 209.570) 1.840 1.904) (0.346.900 (811.08) Basic / Diluted earnings per share 31 0.169 3.983 35.658.236) 437.675. commission and brokerage income Dividend income Income from dealing in foreign currencies Gain on deemed disposal of associate Gain on sale of securities .

204. Chief Executive Officer Director Director Chairman Annual 2010Report 97 .602 (518.ConsolidatedStatemento fComprehensiveIncome FortheyearendedDecember31.166.474 1.904) 37.457 242.2010 2010 2009 (Rupees in „000) Profit / (loss) after taxation Other comprehensive income Exchange differences on translation of net investment in foreign branches Comprehensive income .350 535.net of tax Total comprehensive income Total comprehensive income attributable to: Equity holders of the parent Non-controlling interest 1.493 535.350 390.891 535.983 (97.107) 686.transferred to statement of changes in equity Components of comprehensive income not reflected in equity (Deficit) / Surplus on revaluation of available for sale securities .493 713.493 The annexed notes 1 to 45 and Annexures I and II form an integral part of these consolidated financial statements.506 144.570) 686.920 (27.

716) 5.815 6.664 811.616.152.699.628 154.659 (1.840) 3.533.713.328.674 24.474 662.562.101 18.279.435) (21.350.479.487.114.901.088.101.904 57.325) (6.454.564) 19.019.20 19.929 61.236 9.797) 29.associated companies Dividend income received .484 (1.703 1.953.587.527 171.056 (209.818 66.389 (6.819 6.743) (15.113 6.064 (25.ConsolidatedCashFlowStatement FortheyearendedDecember31.398.504 (25.041.034 7.102) 376.22 10.2010 Note 2010 2009 (Rupees in „000) CASH FLOWS FROM OPERATING ACTIVITIES Profit before taxation Share of loss of associates Less: Dividend income Adjustments Depreciation Amortisation Provision against loans and advances .448) (1.992) 816.387.631.702 (145.370.352) (1.582.000.625 (196.817 210.522 (11.489.703) 47.021 212.net Charge for defined benefit plan (Increase) / decrease in operating assets Lendings to financial institutions Held for trading securities Advances Other assets (excluding tax recoverable and dividend receivable) Increase / (decrease) in operating liabilities Bills payable Borrowings Deposits and other accounts Other liabilities Gratuity paid Income tax paid Net cash generated from operating activities CASH FLOWS FROM INVESTING ACTIVITIES Net investments in available for sale securities Net investments in held to maturity securities Investment in associated companies Dividend income received .101) 8.352 5.792) 22.619 (189.032 173.379) (469.440.989) (1.539 (4.601) 189.266.348 62.991.059) (2.197) 1.net Provision for diminution in value of investments Provision / (Reversal of provision) against off-balance sheet obligations Gain on deemed disposal of associate Provision against other assets Unrealised gain on revaluation of investments classified as held for trading .2 12.833 2.526) 94.182.5 9.715.295) 113.904.407.277 437.548 (1.635) 755.444 61.386 (778.500 (5.301 (740.000 37.419) 258.489.002) 41.348 The annexed notes 1 to 45 and Annexures I and II form an integral part of these consolidated financial statements.013.202) 145.513.916 (3.703 (16.762) 37.052) (7.net Bad debts written-off directly Gain on sale of fixed assets .488 277.442 21.997.007 (11.065.593) 1.506 3. Chief Executive Officer Director Director Chairman 98 Annual2010 Report .119.2 9.934) 59.047) 18.255.607 (1.970) 30.237.110 1.6 27 28 2.379 4.932 (149.947.other than associated companies Investments in fixed assets Proceeds from sale of fixed assets Net cash used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES Issuance of sub-ordinated loans Redemption of sub-ordinated loans Issuance of right shares Dividend paid Payment against lease obligation Net cash (used in) / generated from financing activities Exchange difference on translation of the net investments in foreign branches Increase in cash and cash equivalents Cash and cash equivalents at the beginning of the year Cash and cash equivalents at the end of the year 32 28 28 10.000 (988) 3.276 (16.532 (16.214.225.300) 25.039) (243.411 242.079.202 1.345) 314.267.236 (207.207 3.817 (43.

(1.997. 5 0 0 Issue of right shares Transfer to reserve for issue of bonus shares Issue of bonus shares for the year ended - - - (1.3.615.69 .60 - - - - 24.021 1.499.07 .063) - - - - Balance at December 31.063 December 31.671.527 (23.net of tax Transfer to statutory reserve 7 . 4 9 1 . 2008 @ 12.588.727.14.499. 0 0 0 2.5% 1 .506 (97.752 1.615.926) 1. 9 9 7 . 0 6 3 1 3 .696 (179.473 .28 - - - 242.407 3 . 2009 Transfer from surplus on revaluation of fixed assets .1.499. 9 9 5 .2010 S h a r eStatutory c a p i t a l reserve (a) -------------------------------------------------- Reserve for Exchange Unappro- Share in share Non- issue of bonus shares translation reserve priated profit premium of associate (b) controlling interest Total (Rupees in ' 000)-------------------------------------------------------------------------- Balance at January 1.904) - - 144.179. 2009 Changes in equity for 2009 Comprehensive income for the year ended December 31.767.442 - 820.407) - - 24.18.063) - .50 - - . 2009 Changes in equity for 2010 Comprehensive income for the year ended 2.035 - 578.ConsolidatedStateme ofChangesinEquit ntFortheyearendedDyecember31.473 .504. 4 9 9 . 5 6 3 .

As more fully explained in note 10. 2.(1. 1962.1 to these consolidated financial statements balance of Rs. The annexed notes 1 to 45 and Annexures I and II form an integral part of these consolidated financial statements.45 - 352.079. 5 6 3 - - - (1. 2010 representing additional profit arising from availing FSV benefit for determining provisioning requirement is not available for the purposes of distribution of dividend to shareholders. 2010 (a) (b) 2.86 This represents reserve created under section 21(i)(a) of the Banking Companies Ordinance.983 - 352.780 million (2009: Rs. 2009 @ 8% - - - 37.204.695 27.001 (72.193.435 (27.570) - 29. 4 9 1 .079.968.96 - - - - 29.690) - (27.570) 19.178.690 1 3 .69 .961.474 1.562.166. 2010 Share in share premium of associate Transfer from surplus on revaluation of fixed assets . 1.962 .570 (193.325 Balance at December 31.693) 1.132 - 858.244.5. Chief Executive Officer Director Director Chairman Annual 2010Report 99 .1.325) - .net of tax Loss attributable to minority shareholders Transfer to statutory reserve Final cash dividend for the year ended December 31.December 31.488 million) as at December 31.

Permissible form of trade-related modes of financing includes purchase of goods by banks from their customers and immediate resale to them at appropriate mark-up in price on deferred payment basis. after eliminating material inter branch transactions / balances.NotestoandFormingPartof theConsolidatedFinancialStatement sFortheyearendedDecember31.05 percent 92. 2003.11 percent 40. 1992 as a public limited company under the Companies Ordinance. The Bank is engaged in banking services as described in the Banking Companies Ordinance. 1.1 BASIS OF PRESENTATION In accordance with the directives of the Federal Government regarding the shifting of the banking system to Islamic modes. but are restricted to the amount of facility actually utilised and the appropriate portion of mark-up thereon.2 Basis of consolidation The consolidated financial statements include the financial statements of Bank Alfalah Limited Holding Company and its subsidiary company . 2 2. Karachi and is listed on the Karachi. Alfalah Securities (Private) Limited was incorporated on September 23. 2003 with registered office in Karachi. I. Chundrigar Road. 7 overseas branches (2009: 7 branches).2 In addition the Group maintains investments in the following associates: 2010 2009 Percentage of shareholding Warid Telecom (Private) Limited Wateen Telecom Limited Alfalah Insurance Company Limited Alfalah GHP Value Fund Alfalah GHP Income Multiplier Fund Alfalah GHP Islamic Fund Alfalah GHP Investment Management Limited 8. The Bank's registered office is at B. Building. It commenced its banking operations on November 1. The purchases and sales arising under these arrangements are not reflected in these consolidated financial statements as such. The company obtained corporate membership from Karachi Stock Exchange (Guarantee) Limited on November 24. Subsidiary Company .38 percent 96. 1984.1 The "Group" consists of: Holding Company ."the Group".42 percent 96. 1992.76 percent holding The Bank has invested in 76 percent (2009: 76 percent) shares of Alfalah Securities (Private) Limited.2010 1 STATUS AND NATURE OF BUSINESS 1.55 percent 40. The financial results of the Islamic banking branches have been consolidated in these financial statements for reporting purposes. 1962 and is operating through 298 conventional banking branches including 18 sub branches (2009: 253 branches including 4 sub branches). Lahore and Islamabad Stock Exchanges.22 percent 8.52 percent 30 percent 33. Pakistan.Bank Alfalah Limited (the Bank) Bank Alfalah Limited (the Bank) is a banking company incorporated in Pakistan on June 21. 2. 80 Islamic banking branches (2009: 60 branches) and 1 offshore banking unit (2009: 1 unit).76 percent 20 percent 30 percent 28.18 percent 96. Key financial figures of the Islamic Banking branches are disclosed in Annexure II to these consolidated financial statements.Alfalah Securities (Private) Limited .24 percent 13. The principal objective of the company is to undertake the business of a brokerage house. the State Bank of Pakistan has issued various circulars from time to time. 100 Annual2010 Report . A. I.22 percent Warid Telecom (Private) Limited and Wateen Telecom Limited have been classified as associates due to significant influence exercised through the Bank's nominated Directors and these are also Group Companies.

1962 and the directives issued by SECP and SBP prevail.g. the provisions of and directives issued under the Companies Ordinance. investments have been classified and valued in accordance with the requirements prescribed by the State Bank of Pakistan through various circulars. 1984. and a gain or loss is recognised in profit or loss account. 2006. the SBP requirements prevail over the requirements specified in IFRS 8. the same shall continue to be shown separately in the Statement of Financial Position below equity. In addition. two statement approach shall be adopted i. recording of inventories. 2008. 2006. the Surplus / (Deficit) on revaluation of available for sale securities (AFS) only. The standard has not been adopted by Islamic branches of conventional banks pending resolution of certain issues e.2 Change in accounting policies and disclosures . 4 dated February 17. 10 dated August 26. 1984. Material intra-group balances and transactions have been eliminated. Accordingly. Accordingly. the requirements of these standards have not been considered in the preparation of these consolidated financial statements. The standard also requires that the profit or loss and each component of other comprehensive income is attributable to the equity holders of the parent entity and to the minority interest (referred to as non-controlling interest) even if this results in the non-controlling interests having a deficit balance. 'Revised Forms of Annual Financial Statements'. Further. Banking Companies Ordinance. the above requirements have been adopted in the preparation of these consolidated financial statements. The State Bank of Pakistan has deferred the applicability of International Accounting Standard (IAS) 39. and Balance Sheet shall be renamed as 'Statement of Financial Position'. 1984. 2009 requires the effects of all transactions with non-controlling interests to be recorded in equity if there is no change in control and these transactions will no longer result in goodwill or gains and losses. IFRS 8 'Operating Segments' is effective for the Bank's accounting period beginning on or after January 1. 'Investment Property' for banking companies through BSD Circular Letter No. any remaining interest in the entity is re-measured to fair value.1 (Revised) 'Presentation of Financial Statements'. effective from the accounting year ended December 31.Murabaha issued by the Institute of Chartered Accountants of Pakistan. 1962 and the directives issued by the Securities and Exchange Commission of Pakistan (SECP) and the State Bank of Pakistan (SBP). invoicing of goods. 2002 till further instructions. The standard also specifies the accounting when control is lost. Annual 2010Report 101 . The State Bank of Pakistan vide its BSD Circular No. In case the requirements differ. 'Financial Instruments: Disclosures' through its notification S. STATEMENT OF COMPLIANCE These consolidated financial statements have been prepared in accordance with the approved accounting standards as applicable in Pakistan. Furthermore. segment information disclosed in these consolidated financial statements is based on the requirements laid down by SBP. 2006.1 Non-controlling interests are that part of the net results of operations and of net assets of subsidiary companies attributable to interests which are not owned by the Bank. IFAS 1 was effective for financial periods beginning on or after January 1. However. 2010 has clarified that for the purpose of preparation of financial statements in accordance with International Accounting Standard .- Subsidiary companies are consolidated from the date on which more than 50% of voting rights are transferred to the Group or power to control the company is established and are excluded from consolidation from the date of disposal. etc. separate 'Profit and Loss Account' and 'Statement of Comprehensive Income' shall be presented. may be included in the 'Statement of Comprehensive Income'. 3 3. All banking companies in Pakistan are required to prepare their annual financial statements in line with the format prescribed under BSD Circular No. “Consolidated and Separate Financial Statements” applicable for financial years beginning on or after July 1.e. 'Financial Instruments: Recognition and Measurement' and International Accounting Standard (IAS) 40. 3. However. 2009. Accordingly.O 411(I)/2008 dated April 28.R. the Securities and Exchange Commission of Pakistan (SECP) has notified the Islamic Financial Accounting Standard (IFAS) 1 . concurrent application with other approved accounting standards in place for conventional banks. Pakistan Banks Association and Modaraba Association of Pakistan have taken up the issue with the SBP and SECP.standards that are effective in the current year IAS 27 (revised). The management of the Group believes that as the SBP has defined the segment categorisation in the above mentioned circular. Approved accounting standards comprise of such International Financial Reporting Standards (IFRSs) issued by the International Accounting Standards Board and Islamic Financial Accounting Standards (IFASs) issued by the Institute of Chartered Accountants of Pakistan as are notified under the Companies Ordinance. 7 dated April 20. Banking Companies Ordinance. - The assets and liabilities of subsidiary companies have been consolidated on a line by line basis and the carrying value of investments held by the Bank is eliminated against the subsidiaries' share capital and pre-acquisition reserves in the consolidated financial statements. the provisions of and directives issued under the Companies Ordinance. the Securities and Exchange Commission of Pakistan has deferred the applicability of International Financial Reporting Standard (IFRS) 7.

„Scope of IFRS 2‟. all payments to purchase a business are to be recorded at fair value at the acquisition date. 2010. In accordance with the transition provisions of the IAS. The interpretation also applies to agreements in which an entity receives cash from a customer when that amount of cash must be used only to construct or acquire an item of property. 27. IFRIC 18.570 million. c) IAS 36 (amendment).controlling Interest of Rs. plant and equipment by entities that receive such transfers from their customers. By amending the definition of current liability. 3. „Measurement of non-current assets (or disposal groups) classified as held for sale‟ (effective on or after January 1. 2009 continues to apply the acquisition method to business combinations. This interpretation provides guidance on accounting for arrangements whereby an entity distributes non-cash assets to shareholders either as a distribution of reserves or as dividends. The amendment clarifies that the potential settlement of a liability by the issue of equity is not relevant to its classification as current or non-current. before the aggregation of segments with similar economic characteristics). IAS 7 (amendment). IFRS 3 (revised). Effective January 1. 2010). as defined by paragraph 5 of IFRS 8. „IFRS 2 – Group and treasury share transactions‟. h) 102 Annual2010 Report . 2009). hence the adoption of this standard did not result in any restatement. the amendment permits a liability to be classified as non-current (provided that the entity has an unconditional right to defer settlement by transfer of cash or other assets for at least 12 months after the accounting period) notwithstanding the fact that the entity could be required by the counterparty to settle in shares at any time. The amendment is not expected to have any impact on the Group's consolidated financial statements. All acquisition related costs should be expensed. and the entity must then use that item to provide the customer with ongoing access to supply of goods and/or services. IFRS 5 has also been amended to require that assets are classified as held for distribution only when they are available for distribution in their present condition and the distribution is highly probable. the profit and loss and each component of other comprehensive income is attributable to the equity holders of the Bank and to the non-controlling interest even if this results in the non-controlling interest having as a deficit balance. 'Statement of Cash Flows' (effective from January 1. with contingent payments classified as debt subsequently re-measured through the income statement. At present. IFRS 5 (amendment). plant and equipment. the management believes that the aforementioned revision does not have any impact on the Group's consolidated financial statements. The management of the Group believes that presently this amendment does not have any impact on the Group's consolidated financial statements. with some significant changes. 2010). the Bank has applied IAS 27 (revised) prospectively to transactions with non-controlling interest from January 1.3 Other standards. „Presentation of financial statements‟. „Group cash-settled share-based payment transactions‟. g) IFRIC 17. 2009). effective January 1. particularly paragraph 15 (to achieve a fair presentation) and paragraph 125 (sources of estimation uncertainty) of IAS 1. „Distribution of non-cash assets to owners‟ (effective on or after July 1. The amendment is not expected to have any significant impact on the Group's consolidated financial statements. to measure the non-controlling interest in the acquiree either at fair value or at the non-controlling interest‟s proportionate share of the acquiree‟s net assets. b) d) IFRS 2 (amendment). It clarifies how to account for transfers of items of property. For example. The amendment clarifies that the largest cash-generating unit (or group of units) to which goodwill should be allocated for the purposes of impairment testing is an operating segment. 2010 and has recognised deficit balance of non. the management believes that the aforementioned interpretation does not have any impact on the Group's consolidated financial statements. 2010. „ Operating segments‟ (that is. „Transfers of assets from customers‟ (effective on or after July 1. the excess had been allocated to the equity holders of the parent entity (the Bank). therefore. It also clarifies that the general requirement of e) f) IAS 1 still apply. „Impairment of assets‟. The management of the Group believes that presently this amendment does not have any impact on the Group's consolidated financial statements.The Group has also accordingly changed its accounting policy to comply with the requirements of IAS 27 (revised). The IAS prohibits retrospective application. The management of the Group believes that presently this amendment does not have any impact on the Group's consolidated financial statements. interpretations and amendments to published approved accounting standards that are effective in the current year a) IAS 1 (amendment). In addition to incorporating IFRIC 8. in accordance with revised IAS 27. The amendment requires that only expenditures that result in a recognised asset in the statement of financial position can be classified as investing activities. The management of the Group believes that presently this amendment does not have any impact on the Group's consolidated financial statements. Previously losses applicable to minority interest (referred to as non-controlling interest) in Alfalah Securities (Private) Limited exceeded the non-controlling interest in the subsidiary‟s equity. There is a choice. “Business Combinations” applicable for financial years beginning on or after July 1. and IFRIC 11. (effective from January 1. At present. the amendments expand on the guidance in IFRIC 11 to address the classificat ion of group arrangements that were not covered by that interpretation. 2010). on an acquisition basis. The amendment provides clarification that IFRS 5 specifies the disclosures required in respect of non-current assets (or disposal groups) classified as held for sale or discontinued operations.

The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances. issued in b) 2003. The amendments are effective for annual periods beginning January 1. Presentation of financial statements (effective January 1. IAS 24 (revised). and the amendments correct this. Without the amendments.2 Critical accounting estimates and judgements The preparation of consolidated financial statements in conformity with approved accounting standards as applicable in Pakistan requires management to make judgements. „Related party disclosures‟. minimum funding requirements and their interaction‟. The Group is currently in the process of asessing the impact of the aforementioned amendment on the disclosure requirements. d) IFRIC 19. This interpretation has no impact on the Group's consolidated financial statements. „Prepayments of a minimum funding requirement‟. 2010). 2011 but are considered not to be relevant or do not have any significant effect on the Group's operations and are therefore not detailed in these consolidated financial statements. or in the period of revision and future periods if the revision affects both current and future periods.4 Standards. c) IFRIC 14 (amendments). The amounts are rounded to nearest thousand. The amendments should be applied retrospectively to the earliest comparative period presented. 3.1 Accounting convention These consolidated financial statements have been prepared under the historical cost convention except that certain fixed assets are stated at revalued amounts. if any. 4. 4 BASIS OF MEASUREMENT 4. It also requires management to exercise judgement in application of its accounting policies.i) There are other new and amended standards and interpretations that are mandatory for accounting periods beginning on or after January 1. entities are not permitted to recognise as an asset some voluntary prepayments for minimum funding contributions. The Group is currently in the process of assessing the impact. This interpretation provides guidance on the accounting for debt for equity swaps.5 Early adoption of standards The Group did not early adopt new or amended standards in 2010. which is the Group's functional and presentation currency. The revised standard clarifies and simplifies the definition of a related party and removes the requirement for government-related entities to disclose details of all transactions with the government and other government-related entities. not disclosed in these consolidated financial statements. and held for trading and available for sale investments and derivative financial instruments are measured at fair value. The amendment clarifies that an entity will present an analysis of other comprehensive income for each component of equity. The consolidated financial statements are presented in Pakistani Rupees. The amendments correct an unintended consequence of IFRIC 14. Interpretations and amendments to published approved accounting standards as adopted in Pakistan that are not yet effective The following standards and amendments to existing standards and interpretations have been published and are mandatory for the Group's accounting period beginning on or after January 1. 2010 but are considered not to be relevant or to have any significant effect on the Group's operations and are. either in the statement of changes in equity or in the notes to the financial statements. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period. 2011. Annual 2010Report 103 . issued in November 2009. „Related party disclosures‟. It supersedes IAS 24. 2011). There are other new and amended standards and interpretations that are mandatory for accounting periods beginning on or after e) January 1. The Bank is currently in the process of assessing the impact of the aforementioned amendment on the financial statements of the Bank. estimates and assumptions that affect the reported amounts of assets and liabilities and income and expenses. therefore. 'Extinguishing Financial Liabilities with Equity Instruments' (effective for annual periods beginning on or after July 1. These estimates and assumptions are reviewed on an ongoing basis. „IAS 19 – The limit on a defined benefit asset. of the revised standard on the related party disclosures. Earlier application is permitted. This was not intended when IFRIC 14 was issued. 2011: a) IAS 1. 3.

The difference between the sale and contracted repurchase price is accrued on a time proportion basis over the period of the contract and recorded as an expense. Increase / decrease in share of profits and losses of associates is accounted for in the consolidated profit and loss account. the investment in associates are initially recognised at cost and the carrying amount of investment is increased or decreased to recognise the investor's share of the post acquisition profits or losses in income and its share of the post acquisition movement in reserves is recognised in reserves.3 and 9) classification and provisioning against advances (notes 5.2 Lendings to / borrowings from financial institutions The Group enters into transactions of repos and reverse repos at contracted rates for a specified period of time. These are recorded as under: Sale of securities under repurchase agreements Securities sold subject to a repurchase agreement (repo) are retained in the consolidated financial statements as investments and the counter party liability is included in borrowings. dealers margin or are securities included in a portfolio in which a pattern of short-term profit taking exists. Held to maturity These are investments with fixed or determinable payments and fixed maturities and the Group has the positive intent and ability to hold them till maturity.2 to these consolidated financial statements. Available for sale These are investments. which do not fall under the 'held for trading' and 'held to maturity' categories. 5. Purchase of securities under resale agreements Securities purchased under agreement to resell (reverse repo) are not recognised in the consolidated financial statements as investments and the amount extended to the counter party is included in lendings.10 and 35) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The principal accounting policies applied in the preparation of these consolidated financial statements are set out below.9 and 30) accounting for defined benefit plan (notes 5. 104 Annual2010 Report . interest rate movements.3 Investments The Group classifies its investments as follows: Held for trading These are investments. Under the equity method of accounting. The Group applies the equity accounting method for its investment in the mutual funds managed by Alfalah GHP Investment Management Limited. balances with treasury banks. which are either acquired for generating a profit from short-term fluctuations in market prices.1 Cash and cash equivalents Cash and cash equivalents comprise of cash in hand. Associates Associates are all entities over which the Group has a significant influence but not control. 5. national prize bonds. 5. balances with other banks in current and deposit accounts.4 and 10) income taxes (notes 5. other than those in subsidiaries and associates.Significant accounting estimates and areas where judgements were made by the management in the application of accounting policies are as follows: i) ii) iii) iv) 5 classification and provisioning against investments (notes 5. These policies have been consistently applied except as stated in note 3. any overdrawn nostro accounts and call lendings having maturity of 3 months or less. Investments in associates where the Group has significant influence are accounted for using the equity method of accounting. The difference between the purchase and contracted resale price is accrued on a time proportion basis over the period of the contract and recorded as income.

For investments classified as held to maturity.Investments other than those categorised as 'held for trading' are initially recognised at fair value which includes transaction costs associated with the investment. Depreciation on additions is charged from the date on which the assets are available for use and ceases on the date on which they are disposed of. depreciation is charged over the economic life of the asset using straight line basis. Break-up value of equity securities is calculated with reference to the net assets of the investee company as per the latest available audited financial statements. at each balance sheet date. 5.5 Fixed assets Tangible assets Fixed assets except office premises are shown at historical cost less accumulated depreciation and accumulated impairment losses. Advances are written off when there are no realistic prospects of recovery. Office premises (which includes land and buildings) is stated at revalued amount less accumulated depreciation. Impairment loss in respect of investments classified as available for sale (except term finance certificates and sukuk bonds) and held to maturity is recognised based on management's assessment of objective evidence of impairment as a result of one or more events that may have an impact on the estimated future cashflows of the investments. In accordance with the requirements of State Bank of Pakistan. In accordance with the requirements specified by the State Bank of Pakistan. The residual values. Provisions pertaining to overseas advances are made in accordance with the requirements of regulatory authorities of the respective countries. in the event the asset is expected to be available for re-ijarah. the cumulative loss that has been recognised directly in surplus on revaluation of securities on the statement of financial position below equity is removed therefrom and recognised in the profit and loss account. if appropriate. Gains or losses on disposals of investments during the year are taken to the profit and loss account. Historical cost includes expenditures that are directly attributable to the acquisition of the items. Investments classified as 'held for trading' are initially recognised at fair value and transaction costs are expensed in the profit and loss account. investments classified as 'held to maturity' are carried at amortised cost. useful lives and depreciation method are reviewed and adjusted. Surplus / (deficit) arising on revaluation of securities classified as 'available for sale' is taken to a separate account shown in the balance sheet below equity. Assets under Ijarah are depreciated over the period of lease term. In case of impairment of available for sale securities. Specific and general provisions against Pakistan operations are made in accordance with the requirements of the Prudential Regulations issued by the State Bank of Pakistan from time to time. The net provision made / reversed during the year is charged to profit and loss account and accumulated provision is netted-off against advances. Subsequent costs are included in the asset's carrying amount or are recognised as a separate asset. if any. if any. Depreciation is charged to income applying the straight-line method using the rates specified in note 11. A significant or prolonged decline in fair value of an equity investment below its cost is also considered an objective evidence of impairment. the impairment loss is recognised in the profit and loss account. Provision for diminution in the value of term finance certificates and sukuk bonds is made as per the Prudential Regulations issued by the State Bank of Pakistan. as appropriate. which is the date at which the Group commits to purchase or sell the investments. excluding investment in associates are valued at the lower of cost and break-up value. Ijarah Assets leased out under 'Ijarah' are stated at cost less accumulated depreciation and accumulated impairment losses.4 Advances Loans and advances Loans and advances including net investment in finance lease are stated net of provisions against non-performing advances. Annual 2010Report 105 . All purchases and sales of equity investments that require delivery within the time frame established by regulation or market convention are recognised at trade date.2 to these consolidated financial statements. quoted securities other than those classified as 'held to maturity' are subsequently remeasured to market value. Surplus / (deficit) arising on revaluation of quoted securities which are 'held for trading' is taken to the profit and loss account. Maintenance and normal repairs are charged to income as and when incurred. However. The depreciation charge for the year is calculated after taking into account residual value. if any. 5. only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. Unquoted equity securities.

Intangible assets having an indefinite useful life are stated at acquisition cost. All expenditure connected with specific assets incurred during installation and construction period are carried under this head. Gains and losses on disposal of fixed assets are taken to the profit and loss account except that the related surplus / deficit on revaluation of fixed assets (net of deferred taxation) is transferred directly to unappropriated profit.8 Impairment The carrying amount of assets is reviewed at each balance sheet date to determine whether there is any indication of impairment of any asset or group of assets. Income tax expense is recognised in the profit and loss account except to the extent that it relates to items recognised directly in equity. The surplus on revaluation of fixed assets to the extent of incremental depreciation charged on the related assets is transferred to unappropriated profit.9 Taxation Income tax expense comprises current and deferred tax. Intangible assets Intangible assets having a finite useful life are stated at cost less accumulated amortisation and accumulated impairment losses. if any. Deferred Deferred tax is recognised using the balance sheet liability method on all temporary differences arising between the carrying amounts of assets and liabilities for financial reporting purposes and amounts used for the taxation purposes. The resulting impairment loss is taken to the profit and loss account except for impairment loss on revalued assets. Current Provision for current taxation is based on taxable income at the current rates of taxation after taking into consideration available tax credit and rebates. The useful lives and amortisation method are reviewed and adjusted. 106 Annual2010 Report . less impairment loss.6 Capital work in progress Capital work-in-progress is stated at cost less accumulated impairment losses. 1984. where considered necessary relating to prior years. which arises from assessments / developments made during the year. 5. Deferred tax asset is reduced to the extent that it is no longer probable that the related tax benefits will be realised. Deficit arising on subsequent revaluation of fixed assets is adjusted against the balance in the above mentioned surplus account as allowed under the provisions of the Companies Ordinance.7 Non-current assets held for sale The Group classifies a non-current asset (or disposal group) as held for sale if its carrying amount will be recovered principally through a sale transaction rather than through continuing use. which is adjusted against related revaluation surplus to the extent that the impairment loss does not exceed the surplus on revaluation of that asset. A non-current asset is not depreciated while classified as held for sale or while part of a disposal group classified as held for sale. if any. The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amounts of assets and liabilities using the tax rates enacted at the balance sheet date. Surplus arising on revaluation is credited to the surplus on revaluation of fixed assets account. in which case it is recognised in equity. the recoverable amount of such assets is estimated and impairment losses are recognised immediately in the financial statements. if any. If any such indication exists. These are transferred to specific assets as and when assets become available for use. Subsequent gains in fair value less costs to sell are recognised to the extent they do not exceed the cumulative impairment losses previously recorded. A non-current asset (or disposal group) held for sale is carried at the lower of its carrying amount and the fair value less costs to sell. A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available and the credits can be utilised.Office premises are revalued by professionally qualified valuers with sufficient regularity to ensure that the net carrying amount does not differ materially from their fair value. Impairment losses are recognised through the profit and loss account for any initial or subsequent write down of the non-current asset (or disposal group) to fair value less costs to sell. 5. 5. if any. The charge for current tax also includes adjustments. Such intangible assets are amortised using the straight-line method over their estimated useful lives. if appropriate at each balance sheet date. 5.

Actuarial gains / losses in excess of 10 percent of the higher of actuarial liabilities or plan assets at the end of the last reporting year are recognised over the average lives of employees. 5.14 Revenue recognition Advances and investments Mark-up income on loans and advances. The contributions are recognised as employee benefit expense when they are due. debt securities. Acceptances are accounted for as off balance sheet transactions and are disclosed as contingent liabilities and commitments. those premiums / discounts are amortised through the profit and loss account over the remaining maturity.11 Borrowings / deposits and their cost a) b) Borrowings / deposits are recorded at the proceeds received. Borrowing / deposit costs are recognised as an expense in the period in which these are incurred using effective mark-up / interest rate method to the extent that they are not directly attributable to the acquisition of or construction of qualifying assets.12 Provisions Provision for guarantee claims and other off balance sheet obligations is recognised when intimated and reasonable certainty exists for the Group to settle the obligation. Projected Unit Credit Method is used for the actuarial valuation. it is probable that an outflow of resources will be required to settle the obligation and a reliable estimate of the amount can be made. Borrowing costs that are directly attributable to the acquisition. Dividend income is recognised at the time when the Group‟s right to receive the dividend has been established. Annual 2010Report 107 .13 Acceptances Acceptances comprise undertakings by the Group to pay bills of exchange drawn on customers. Defined contribution plan The Bank operates a recognised provident fund scheme for all its permanent employees to which equal monthly contributions are made both by the Bank and employees at the rate of 8. Contributions to the fund are made on the basis of actuarial recommendations. Gratuity is payable to staff on completion of the prescribed qualifying period of service under the scheme.Income Taxes. 5. The Bank has no further payment obligations once the contributions have been paid. where the timing of the reversal of the temporary difference can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future. Deferred tax liability is not recognised in respect of taxable temporary differences associated with exchange translation reserves of foreign branches. Provisions are reviewed at each balance sheet date and are adjusted to reflect the current best estimate. The Group expects most acceptances to be simultaneously settled with the reimbursement from the customers.The Group also recognises a deferred tax asset / liability on the deficit / surplus on revaluation of fixed assets and securities. 5. using the effective yield method. Other provisions are recognised when the Group has a present. Charge to profit and loss account is stated net-of expected recoveries. 5.10 Employee benefits Defined benefit plan The Bank operates an approved funded gratuity scheme covering eligible employees whose period of employment with the Bank is five years or more. construction or production of a qualifying asset (one that takes a substantial period of time to get ready for use or sale) is capitalised as part of the cost of that asset. which is adjusted against the related surplus / deficit in accordance with the requirements of the International Accounting Standard 12 . Where debt securities are purchased at a premium or discount. investments and profit on murabaha and musharika financing are recognised on a time proportion basis.33 percent of basic salary. Expected recoveries are recognised by debiting the customer‟s account. legal or constructive obligation as a result of past events. 5.

5. Forward purchase contracts with the State Bank of Pakistan relating to foreign currency deposits are valued at the spot rate prevailing on the balance sheet date. The results of foreign operations are translated at average rate of exchange for the year. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the profit and loss account. Translation gains and losses arising on revaluations of net investment in foreign operations are taken to Exchange Translation Reserve in the statement of comprehensive income. Forward contracts other than contracts with the State Bank of Pakistan relating to foreign currency deposits are valued at forward rates applicable to the respective maturities of the relevant foreign exchange contract. Foreign operations Assets and liabilities of foreign operations are translated into rupees at the exchange rate prevailing at the balance sheet date. documentation charges. Gains / losses on termination of leased contracts.Lease financing / Ijarah Financing method is used in accounting for income from lease financing. front end fee and other lease income are recognised as income when they are realised. The forward cover fee payable on such contracts is amortised over the term of the contracts.16 Derivative financial instruments Derivative financial instruments are initially recognised at fair value on the date at which the derivative contract is entered into and subsequently remeasured at fair value using appropriate valuation techniques. commission and brokerage income except income from guarantees are accounted for on receipt basis. Transactions and balances Transactions in foreign currencies are translated into Pakistani rupees at the exchange rates prevailing on the transaction date. the unrealised lease income (excess of the sum of total lease rentals and estimated residual value over the cost of leased assets) is deferred and taken to income over the term of the lease period so as to produce a constant periodic rate of return on the outstanding net investment in the lease. Any changes in the fair value of derivative financial instruments are taken to the profit and loss account. Under this method. Ijarah income is recognised on an accrual basis as and when the rental becomes due.15 Foreign currency translation Functional and presentation currency Items included in the financial statements are measured using the currency of the primary economic environment in which the Bank operates. Commission on guarantees is recognised on time proportion basis. All derivative financial instruments are carried as assets where fair value is positive and as liabilities where fair value is negative. where necessary. in accordance with the requirements of the Prudential Regulations of the State Bank of Pakistan and recognised on receipt basis. 108 Annual2010 Report . Contingent liabilities / commitments for letters of credit and letters of guarantee denominated in foreign currencies are expressed in rupee terms at the exchange rates ruling on the balance sheet date. 5. commission and brokerage Fee. These are recognised in the profit and loss account on disposal. Commitments Commitments for outstanding forward foreign exchange contracts are disclosed at contracted rates. Unrealised lease income and mark-up / return on non-performing advances are suspended. Fee.

commodities. privatisation. credit.18 Dividend and appropriation to reserves Dividend and appropriation to reserves. except appropriations which are required under the law. bills of exchange and deposits. high yield). Retail banking It includes retail lending and deposits. equity.5. brokerage debt and prime brokerage.17 Off-setting Financial assets and financial liabilities are off-set and the net amount reported in the consolidated financial statements only when there is a legally enforceable right to set-off the recognised amount and the Group intends either to settle on a net basis. banking services. 5. leasing. foreign exchanges. merchant / commercial / corporate cards and private labels and retail. 5. debts (government. are recognised as a liability in the Group's consolidated financial statements in the year in which these are approved. Commercial banking Commercial banking includes project finance. lending and repos. own position securities. trust and estates investment advice. lending. or to realise the assets and to settle the liabilities simultaneously. which is subject to risks and rewards that are different from those of other segments. corporate finance. b) Geographical segments The Group operates in three geographical regions being: Pakistan Asia Pacific (including South Asia) Middle East Annual 2010Report 109 . funding. trade finance. banking service. factoring.19 Earnings per share The Group presents basic and diluted earnings per share (EPS) for its shareholders. research. Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding for the effects of all dilutive potential ordinary shares. or in providing products or services within a particular economic environment (geographical segment). trust and estates. IPO and secondary private placements. private lending and deposits.20 Segment reporting A segment is a distinguishable component of the Group that is engaged either in providing product or services (business segment). guarantees. after the balance sheet date. Corporate finance Corporate banking includes services provided in connection with mergers and acquisition. underwriting. securitisation. Income and expense items of such assets and liabilities are also off-set and the net amount is reported in the consolidated financial statements. Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Bank by the weighted average number of ordinary shares outstanding during the year. if any. equity. syndication. The Group's primary format of reporting is based on business segments. 5. real estate. export finance. a) Business segments Trading and sales It includes fixed income.

509 13. 1956.326.133.197.981. 18.3 Special cash reserve of 15% is required to be maintained with the State Bank of Pakistan on FE-25 deposits as specified in BSD Circular No.129. The State Bank of Pakistan has not remunerated these deposit accounts during the year.387 million) With State Bank of Pakistan in Local currency current account Foreign currency current account Foreign currency deposit account With other central banks in Foreign currency current account Foreign currency deposit account With National Bank of Pakistan in Local currency current account National Prize Bonds 6.180.619.431 35. 7 BALANCES WITH OTHER BANKS In Pakistan On current account On deposit account Outside Pakistan On current account On deposit account 1.927 7.1 The local currency current account is maintained with the State Bank of Pakistan (SBP) as per the requirements of Section 36 of the State Bank of Pakistan Act.395 million) Foreign currencies (including in transit 2010: Nil. Profit rates on these deposits are fixed by SBP on a monthly basis.697 25.3 15. 6.349 3.3 110 Annual2010 Report .841 1.533 768.764 157.Note 2010 2009 (Rupees in „000) 6 CASH AND BALANCES WITH TREASURY BANKS In hand Local currency (including in transit 2010: Rs. 3.167.561 22.590 1.2 7. 9 dated December 3.928.950 12. 6.067 6.025 6.503.980 7.993.798 41. 2009: Rs.497 6.144.2 6.784 7.454 6.469. This section requires banking companies to maintain a local currency cash reserve in the current account opened with the SBP at a sum not less than such percentage of its time and demand liabilities in Pakistan as may be prescribed by SBP.1 6. 2008.322. 111.012.867.850.089 4.025 2.134 2. 14 dated June 21. cash reserve of 5% is required to be maintained with the State Bank of Pakistan on deposits held under the New Foreign Currency Accounts Scheme (FE-25 deposits).776.722.2 As per BSD Circular No.294 3.050 5. 6. 2007.340.059 1.1 7.005 16.220 2.4 Deposits with other central banks are maintained to meet their minimum cash reserves and capital requirements pertaining to the foreign branches of the Bank.926 1.984.180 20.364 2. 2009: Rs.4 4.081.273 million.480.549 5.637.435.056.

at interest rates ranging from 0.354.782.396 11.085.497. 7.151.947.00% to 13.396 14.947.828.00% to 13.435 8.556 3. The balance is current by nature and on increase in the balance above a specified amount.715.3 This includes placements of funds generated through foreign currency deposits scheme (FE-25).7. 8. 8.521 .1 These represent lendings to financial institutions at interest rates upto 20% per annum (2009: 13.654.237.669.75% to 13.20% to 2.497.039 14.3 1.556 12.715.518 1.039 Market Treasury Bills Pakistan Investment Bonds 1. the Bank is entitled to earn interest from the correspondent banks at agreed upon rates.039 2. Note 2010 2009 (Rupees in „000) 8 LENDINGS TO FINANCIAL INSTITUTIONS Call money lendings Repurchase agreement lendings (Reverse Repo) 8.1 8.182 Annual 2010Report 111 .75% per annum (2009: 0.62% per annum) with maturities upto August 2011 (2009: July 2010).182 6.455 10.710.374 1.2 Particulars of lendings to financial institutions In local currency In foreign currencies 8.727 1.435 These represent short-term lendings to financial institutions against investment securities. This includes amount held in Automated Investment Plans.293.237.455 360.727 1.521 11.25% per annum).182 4. These carry mark-up at rates ranging from 13.354.1 7.151.1.4 Securities held as collateral against lendings to financial institutions Held by Bank ------------------------------------ 2010 Further given as collateral Total Held by Bank collateral 2009 Further given as Total Rupees in '000 .1.374 6.40% per annum) with maturities upto May 2013 (2009: February 2010).518 360.2 This represents funds deposited with various banks at a profit rate of 5.12% to 1.00% per annum (2009: 5.085.715.237.3 & 8.182 11.75% per annum (2009: 11.20% per annum) with maturities upto January 2011 (2009: February 2010).039 10.4 4.

041 9.2.18.020.758 Held to maturity securities Market Treasury Bills Pakistan Investment Bonds Term Finance Certificates Overseas Government Treasury Bills Pakistan Dollar Bonds Pakistan Euro Bonds Credit Linked Note Overseas Bonds Preference Shares .074 395.772 856.361 .367 421.027 9.016 154.128.633 421.809.746.064.074.549.577 9.034.270 5.561 89.828 147.069.041 - 11.675.224 - 4.370.191) 112.497 4.285 321.673 384.124) 111.711 3.744 277.586 254.17.1.673 845.961.300 1.310 19.766 (13.590 586.236 (5.000 17.480 18.1.310 18.821 1.836.804.1.2 9.900 53.408.1.431 5.879 3.348 8.469 129.18.416.726 202.3 9.800 1.923.130 89.711 35.563.084.319 354.498.554) 1.034.22 3.251 .1.027 129.106.192 99.208 4.934 21.216 1.367 4.158) 9.368 8.374 99.900 1.216 202.028 140.208 1.955 Available for sale securities Market Treasury Bills Pakistan Investment Bonds Fully paid up ordinary shares / units .961.524.955 - 966.946.069.992 95.240.130 113.Unlisted Sukuk Bonds 38.1.980 19.388 1.726 4.Listed 966.000 .816 11.379.714.588.1.093 40.1.074.028 140.158) 98.281 24.620 438.4.272 1.794 152.net Surplus / (Deficit) on revaluation of available for sale investments .361 2.946 3.5 9.272 112.392 254.380.172.946.069.4 9.678) 367.net Total investments 114.714.794 152.240.809.679 43.18.511.Listed Fully paid up ordinary shares / units .300 - 3.563 .480 395.586 68.119 112 Annual 2010 Report .096 87.419 9.852 1.392 68.191) (249.106.176 4.010.852 40.6 9.18.438 113.279.155.511.368 40.821 .626.064.379.809.772 856.Unlisted Sukuk Bonds Associates Warid Telecom (Private) Limited Wateen Telecom Limited Alfalah Insurance Limited Alfalah GHP Value Fund Alfalah GHP Income Multiplier Fund Alfalah GHP Islamic Fund Alfalah GHP Investment Management Limited 4.784.992 5.408.511.660.1.224 40.879 (288.499.288 Investments at cost Less: Provision for diminution in value of investments Investments (net of provisions) Surplus on revaluation of held for trading securities .939 89.821 1.090 129.18.192 9.069.1.633 845.744 5.18.821 129.711 9.18.431 4.590 586.393.586 - 254.298 25.563 1.980 4.295 316.788.Unlisted Term Finance Certificates Preference Shares .660.972 337.570.946 4.972 337.626.497 .348 67.992 95.660.788.586 254.020.7 2.937.176 39.090 2.226.093 39.301 8.879 69.836.074 384.325 (318.411.1 INVESTMENTS Investments by types: 2010 Note Held by Bank Given as collateral Total Held by Bank 2009 Given as collateral Total ------------------------------------Rupees in '000-----------------------------------Held for trading securities Market Treasury Bills Fully paid up ordinary shares / units .882 8.997 40.828 147.641 562.1 9.096 87.20 (288.2 (313.675.622.392) 9.711 (249.509.816 3.818.726 4.563.620 438.060 1.285 321.641 562.881.084.213.295 316.588.509.511.704 355.9 9.016 154.746.704 355.726 277.213.934 - 1.781.

022. 35 million (2009: Rs.399.5 Pakistan Investment Bonds (PIBs) are for periods of three.958.934 354.7 9.539.01% to 13.613 129.821 242.704 20.50% to 13.258.Market Treasury Bills .5 9.622.208 22.11 9.net (Deficit) / Surplus on revaluation of available for sale securities .673 845. The effective rates of profit on Market Treasury Bills range between 12.net Total investments 9.Unlisted 9.020 10. 9.Note 2010 2009 (Rupees in „000) 9.250 4.Un-listed TFCs .653 129.Overseas Government Treasury Bills .00% to 14.064.25% per annum) with maturities upto December 2011 (2009: December 2010).Pakistan Dollar Bond .279.Pakistan Investment Bonds .601.349.251.172.932 19.506 12.512 856.393 46.Listed companies / mutual funds .20 9.671 438.3 Investments include certain approved / government securities which are held by the Bank to comply with the Statutory Liquidity Requirement determined on the basis of the Bank's demand and time liabilities as set out under section 29 of the Banking Companies Ordinance.853.2 Investments by segments Federal Government Securities .22 21.Overseas Bonds .458.18 9.Credit Linked Note 9.821 277.9 45.374 99.759.633 68.95% per annum (2009: 11.4 Market Treasury Bills are for the periods of six months and one year.158. Debentures.438 Investment in associates Total investments at cost Provision for diminution in value of investments Surplus on revaluation of held for trading securities .678) 113.191) 3.706 421.272 114. These also include PIBs having face value of Rs.Listed TFCs .16 9.Pakistan Euro Bond 9.308.4 9.8 9.428 18.15 9.560 1.431 3.2 (288.488 395.300 (318.865 Term Finance Certificates.772 84.494 Fully Paid up Ordinary Shares / Preference Shares / Units / Certificates .14 9.10 9.Preference Shares . 1962.00% to 14.054.349.Un-listed companies .192 99. 35 million) pledged with the National Bank of Pakistan as security to facilitate Telegraphic Transfer discounting facility.744 1.835 25.961.676.00% per annum) with maturities from December 2011 to July 2020 (2009: December 2010 to September 2019).288 (249.226. 9.496.218 2. ten and fifteen years. Bonds.Overseas Government Bonds .17 1.00% per annum (2009: 8.400 2.12 1.938 9.158 384.074 1.036 190.Sukuk Bonds .968.241. The rates of profit range from 8.737 4. Annual 2010Report 113 .375.6 9. five.476.561 9.158) 1.849.367 24.130 1.13 9.247 4.Sukuk Bonds . Notes and Participation Term Certificates .

000 49.919 37. between 12.000 600.000 10.56% per annum (2009: 11.000 381.14% per annum (2009: 11.635 15.000 9.738.876 million (2009: Nil) issued by the Government of Pakistan.534 504.317 - 25.821 967.916 9.882 100.903 million) and BDT 66.7 This represents sukuk bonds of Rs.949.000 145. 85.20% to 7.523.700 million) respectively.500 50.952 150.000 - 188 114 Annual2010 Report .95 million for a period of five years.156 2.000 50. 9.000 1.252 2.960.882 50. 1.654.500.754 70.60% per annum).893.355 9. These bonds have maturities upto March 2014 (2009: March 2014). 9.000 200.161 97.525 75. The rates of profit on Government of Afghanistan bond ranges from 2.000 600.9 This represents Pakistan Euro Bonds of US Dollar 9.240 400.549 729.97% per annum).079 17.759 15.829 million (2009: AFA 876.025 million) issued by the State Bank of Pakistan for a period of three years and SSGC sukuk of Rs.700 million (2009: BDT 66.000 30.000 46.92% per annum) and 13.125% per annum) and are due for maturity in March 2016 (2009: March 2016).500 50.951 - 971. 9.733.870 327.079 50.180 502. 18.6 These represent Overseas Government Bonds issued by the Government of Afghanistan and the Government of Bangladesh amounting to AFA 1.435 18.9.525 487.000 million) issued by the Government of Pakistan.695 100.67% to 12.000 912 100.720.58% per annum) while Government of Bangladesh bond carries profit at 10.850 35.812% per annum (2009: 7.000 1.659 150.239 454.941 1.8 This represents Pakistan Dollar Bonds of US Dollar 5.653 258.931.64% to 14.397.958 50.503.67% to 12.952 504.167 9.125% per annum (2009: Nil) and are due for maturity in March 2016 (2009: Nil).10 Particulars of investments in listed companies / mutual funds include the following: 2010 2009 (Number of shares / certificates / units) MUTUAL FUNDS AKD Income Fund Crosby Pheonix Fund AMZ Plus Income Fund Askari Income Fund Atlas Income Fund Dawood Money Market Fund First Habib Income Fund IGI Income Fund JS Aggressive Income Fund JS Income Fund KASB Liquid Fund MCB Dynamic Cash Fund Meezan Balanced Fund Meezan Islamic Income Fund NAFA Income Opportunity Fund (formerly NAFA Cash Fund) NAFA Stock Fund Pak Oman Advantage Fund Pak Oman Advantage Islamic Income Fund Pakistan Capital Market Fund Pakistan Income Fund Pakistan Strategic Allocation Fund Reliance Income Fund United Islamic Income Fund United Money Market Fund NON LIFE INSURANCE Adamjee Insurance Company Limited SYENTHETIC AND RAYON Dewan Salman Fibre Limited 2010 2009 (Rupees in „000) 140.537 488.000 million (2009: 8. These bonds carry interest at 7.538 million (2009: 1.919 41.000.133 million) issued by Water and Power Development Authority (WAPDA) for a period of ten years.000 50.542 127.64% per annum respectively.500.38% to 3.000 million (2009: 5.000 9.000 1.652 685.000 972.12% to 13. The rates of profit on these bonds ranges between 12.000 30.000 75.000.951 1.033 15. 9.411 181.290. ijarah sukuk of Rs.043.901 8.260 1.000 450.000 - 41.48% per annum (2009: 7.435 1. These bonds carry interest at 8.60% per annum (2009: 10.000 972.539.

000 2.556 500.970.667.000 150.121 10.210 17 3.000 7.000 1.126 75.S Bank Limited MCB Bank Limited National Bank of Pakistan NIB Bank Limited Samba Bank Limited The Bank of Punjab United Bank Limited ICB Islamic Bank Limited FINANCIAL SERVICES Arif Habib Investment Management Limited Arif Habib Corporation Limited (formerly Arif Habib Securities Limited) Jahangir Siddiqui & Company Limited KASB Securities Limited CONSTRUCTION AND MATERIALS Al-Abbas Cement Company Limited D.553 2.000 110.000 76.929 1.000 1.005 98.544 500.640 2.000 2.287 1.000 1.2010 2009 (Number of shares / certificates / units) 210.924 3.972 263.345 1.500 3.685 16.310.632 28.200 25.000 1.378.125.991 72.000 358.977 15.279 3.273.800.000 BANKS Allied Bank Limited Askari Bank Limited J.369.924 1.000 3.887 1.448 47.318.000.000 300.594 100.926 75.935 64.770 562.318.000 207.000 175.051 9.375 50.000 250.591 1.026 24.403.250 3.710 30.000 5.760 41.000 1.793 34.784 4.067 225.G Khan Cement Limited Fauji Cement Company Limited Fecto Cement Limited Lucky Cement Limited Dewan Cement Limited Dadabhoy Cement Industries Limited SUGAR AND ALLIED INDUSTRY Colony Sugar Mills Limited OIL AND GAS PRODUCER Oil and Gas Development Company Limited Pakistan Oilfields Limited Pakistan Petroleum Limited Pakistan State Oil Company Limited ELECTRICITY Kohinoor Energy Limited Kot Addu Power Company Limited Southern Electric Power Company Limited Karachi Electric Supply Company Limited The Hub Power Company Limited Nishat (Chunian) Power Company Limited Nishat Power Company Limited AUTOMOBILE ASSEMBLERS Agriauto Industries Limited PERSONAL GOODS Azgard Nine Limited Hira Textile Mills Limited Nishat Mills Limited Nakshbandi Industries Limited Yousuf Weaving Mills Limited Nishat (Chunian) Mills Limited FIXED LINE TELECOMMUNICATION Pakistan Telecommunication Company Limited Telecard Limited Worldcall Telecom Limited CHEMICALS Dewan Salman Fiber Limited Engro Corporation Limited Fatima Fertilizer Company Limited Fauji Fertilizer Bin Qasim Limited Fauji Fertilizer Company Limited ICI Pakistan Limited Lotte Pakistan PTA Limited 2010 2009 (Rupees in „000) 39.232 15.327 3.139 121.000 484 128 2.770 50.545 15.135 60.570 400.640.923.000 2.000 1.118 34.600 4.242.000 424.403.860 30.000 1.979 37.000 100.095.337 17.000 2.145 2.756 3.639.417 22.802 93.639 1.640 7.000 100.000 1.021 319 87.980 6.000 1.000 804.810 605.007 2.000 9.794 50.603 918 10.092 1.710 100.162 1.325 51.000.559 6.842 4 1 49.169 1.888.260 81.297.586 Annual 2010Report 115 .667.339.125 50.760 100.000 7.601.269 1.982 9.000 268.177 4.012 1.953.000 480 170.673 60.170 94.088 21.297 12.175 827 20 78 106.252 121.525 29.592 1.480.000 5.500.980 683 38.151.000 1.000 3.134 135.000 1.846 47.527 41.

000.000 5.16 Period of financial statements: December 31. Lazaro Campos Break-up value per share: Rs.Pack Limited 2010 2009 (Rupees in „000) 962. 2010 (Un-audited) 4.725 5.653 1.968.02 Date of financial statements : December 31.000.096 4. 2008 Al-Hamra Hills (Private) Limited Chief Executive: Mr. 2009 Chief Executive : Mr.17 Period of financial statements: June 30. S.000.000.000 50.312 60.118.973 1. 9. 100) 36. Habib Ahmed Break-up value per share: Rs.000 5.71 Period of financial statements: December 31. 286.225.000 7.Unlisted 3.014 29. Syed Mahbubur Rahman (Paid-up value of each shares is BDT.000 70. 8.52 Period of financial statements: June 30.025.948 116 Annual2010 Report .531 Pakistan Export Finance Guarantee Agency Limited Chief Executive: Mr.000 129. 2010 (Audited) Al-Hamra Avenue (Private) Limited Chief Executive: Mr. 428.821 9.000. 1.87 Date of financial statements : December 31.000.476.000.263 25. Michael Steven Potter (Paid-up value of each shares is BDT.12 Investments in preference shares .M.725 24 16 Society for Worldwide Interbank Financial Telecommunication Chief Executive: Mr.831 - 10.086 - 12.000 5.059 1.080 2. Zaeem Break-up value per share: Rs.000 STS Holdings Limited Redemption: Semi annual redemptions over 5 years ending in 2012 Break-up value per share: BDT.11 Investments in unlisted companies 2010 2009 (Number of shares) 2010 2009 (Rupees in „000) 572. 2009 (Audited) 5.000 50.531 572.000 70.000 1.821 129. 11.000 121.613 9. 10) BRAC Bank Limited Redemption: Annual redemptions over 5 years ending in 2012 Break-up value per share: BDT.000 1.087 - 2. Habib Ahmed Break-up value per share: Rs.2010 2009 (Number of shares / certificates / units) INDUSTRIAL METALS AND MINING Crescent Steel & Allied Products Limited REAL ESTATE INVESTMENT AND SERVICES Pace Pakistan Limited GENERAL INDUSTRIALS Tri.042 121. 2009 Chief Executive : Mr.000.096 7.

5.510 1. Faridur Rehman Khan (Paid-up value of each shares is BDT.(PACRA) Chief Executive: Mr. Mohsin Ali Nathani Annual 2010Report 99.000) certificates of Rs. Maturity: Eight years from date of disbursement i. 2010 Chief Executive: Mr.e.000 (2009: 10.390 94.840 47.62 Date of financial statements: June 30.800 99. 25 percent redemption in 5th year and remaining 50 percent redemption after 5th year from the issue date.930 117 .000 each Mark up: Average Six Months KIBOR + 200 basis points prevailing one working day prior to the beginning of each semi annual period. 2013 Rating: AA. February 1. 100) First Dawood Investment Bank Limited Redemption: 25 percent redemption in 4th year. Hamuyun Nabi Jan 45. October 31.000 - 2.e.000) certificates of Rs.000 each Mark up: Average Six Months KIBOR (Ask Side) + 150 basis points per annum (no floor no cap) Redemption: The TFC is structured to redeem 0.2010 2009 (Number of shares) 2010 2009 (Rupees in „000) 375. 96. 0.02 percent of principal semi-annually in the first ninety months and remaining principal at maturity.420 49. 2010 Chief Executive : Mr. 0. 2013 Rating: AAA (PACRA) Chief Executive: Mr.16 percent of the issue amount will be re-paid equally in each of the redemption periods during the first four years.97 Date of financial statements : June 30.Quoted. Maturity: Seven years from the date of issue i.(3rd Issue) 10.13 Particulars of Term Finance Certificates .431 9.500. 2010 Chief Executive: Mr.54 Date of financial statements: June 30.000 United Hospitals Limited Redemption: Annual redemptions over 5 years ending in 2011 Break-up value per share: BDT. Abdus Samad Khan Trust Investment Bank Limited Redemption: Any time after the issuance of preference shares Break-up value per share: Rs. Redemption: A nominal amount i.500. 4.000 - 242.744 277.000 - 25. Secured 2010 2009 (Rupees in „000) Askari Bank Limited (2nd Issue) 20.000 - 15.000 (2009: 20.000 750. Break-up value per share: Rs. 5. Mohammad Rafiquddin Mehkari Standard Chartered Bank (Pakistan) Limited .e.

000 (2009: 80. 2013 Rating: A+ (PACRA) Chief Executive: Mr. Abbas D. 5.350 (2009: 9.22 percent of the principal would be redeemed during the last 36 months in six equal semi-annual installments.427 154. Maturity: September 2014 Rating: AA.440 38.686 (2009: 7. Rating: AA. May 31.50 percent per annum with a floor of 3.657 118 Annual2010 Report .368 38.50 percent and a cap of 10. 5.e.800 399. Habib Faysal Bank Limited (formerly The Royal Bank of Scotland) 578 (2009: 578) certificates of Rs.384 2.90 percent per annum with no floor and cap Redemption: The instrument is structured to redeem 0. Maturity: July 2012 Rating: AA (PACRA) Chief Executive: Mr.08 percent of principal in the first 24 months in 4 equal semi-annual installments and the remaining 99.(JCR .000 each Mark up: Average Six months KIBOR + 1.25 percent respectively starting from the eighty-fourth month.000 each Mark up: Average Six Months KIBOR + 1. The remaining principal is to be redeemed in semi annual installments during the tenor of the TFC.000 each Mark up: Average Six Months KIBOR (Ask Side) + 285 basis points per annum Redemption: The instrument is structured to redeem 0.2010 2009 (Rupees in „000) Bank Al Habib Limited 9.163 2.VIS) Chief Executive: Mr.000 each Mark up: Average Six months KIBOR + 1.02 percent of principal semi-annually in the first 48 months and remaining amount in 6 semi-annual installments.000 (2009: 37.000) certificates of Rs. February 2013. 5.(PACRA) Chief Executive: Mr. Rashid Khan ORIX Leasing Pakistan Limited 37.885 46. Maturity: May 2012 Rating: AA+ (PACRA) Chief Executive: Mr. 5.24 percent of principal in the first 72 months and the remaining principal in 4 equal semi-annual installments of 24. Maturity: Eight years from the date of disbursement i. 5. Humayun Murad 92.25 percent of principal semi-annually in the first seventy-eight months and the remaining principal in three semi-annual installments of 33. Khalid A Sherwani Pakistan Mobile Communication (Private) Limited 80.92 percent of principal in four annual installments after a grace period of fifty-four months.000) certificates of Rs.00 percent per annum Redemption: The TFC is structured to redeem 0.50 percent per annum with no floor and cap Redemption: The instrument is structured to redeem 0.94 percent each of the issue amount respectively starting from the 78th month.000 each Mark up: Average Six month KIBOR (Ask Side) + 190 basis points (no floor no cap) Redemption: The TFC is structured to redeem 97. Maturity: Seven years from the date of issue i.e.350) certificates of Rs.044 332.686) certificates of Rs.638 46. Naved A Khan Allied Bank Limited 7.

5. Munaf Ibrahim Financial Receivables Securitization Company Limited 15. 5. Redemption: The instrument is structured to redeem 0.000 each Mark up: Average Six Months KIBOR plus 2. 5.000 (2009: 90.91 percent in the 60th month and the remaining 49. Fawad Ahmed Mukhtar Askari Bank Limited (3rd Issue) 90.000 99. Maturity: August 2019 Rating: AA.792) certificates of Rs. Maturity: May 2012 Rating: AA (PACRA) Chief Executive: Mr. Maturity: Five years from the issue date i.18 percent of principal in the first 54 months.000 each Mark up: Average Six Months KIBOR + 1.95 percent (for six to ten years) Redemption: This instrument is structured to redeem 0.a.920 49.91 percent in the last six months.000) certificates of Rs.2010 2009 (Rupees in „000) Jahangir Siddiqui & Company Limited 10.000 each Mark up: Average Six months KIBOR + 2. with a floor of 8 percent per annum and cap of 16 percent per annum.000 (2009: 10.458.e.50 percent with a floor of 6 percent per annum and ceiling of 16 percent per annum.50 percent (for one to five years) Average Six Months KIBOR plus 2.32 percent of total issue amount in the first ninety six months after issuance i.368 49.000 each Mark up: Average Six months KIBOR + 2.940 Annual 2010Report 119 .940 55. Redemption: Principal redemption will be carried out in 12 and 8 equal semi-annual installments in arrears. February 28. Muhammad Suleman Kanjiani Pak Arab Fertilizers Limited 20.308. Mohammad Rafiquddin Mehkari 1. 2009 and remaining issue amount in four equal semi-annual installments of 24. 2013 Rating: AA (PACRA) Chief Executive: Mr. with a grace period of 1 year and 3 years for Class A TFCs and Class B TFCs respectively. 49. September 28.000) certificates of Rs. Maturity: January 2014 Rating: A+ (PACRA) Chief Executive: Mr.820 450.92 percent each.000 (2009: 20.428 449.e.(PACRA) Chief Executive: Mr.792 (2009: 15.50 percent per annum Redemption: Principal redemption in six stepped-up semi-annual installments starting from the issue date.000 94. the issuer may call the TFC in part or full on any profit payment date subject to thirty days prior notice.000) certificates of Rs.576 67.00 percent p.932 1. 5. starting from the 102nd month after the issuance.

e. Maturity: September 2017 Chief Executive: Mr.000 (2009: 20. the issuer has a Call Option exercisable in full at any time after 1 year on a coupon date.000 (2009: 20. Abdus Samad Khan Azgard Nine Limited .14.920 499. Maturity: April 2014 Chief Executive: Mr.000 (2009: 6000) certificates of Rs.000 30.000 each Mark up: Average Six Months KIBOR + 1.000 each Mark up: Average Six Months KIBOR (Ask Side) + 1.000 30.9.1 100.14 Particulars of Term Finance Certificates .75 basis point per annum (no floor & no cap) Redemption: Repayment will be stepped up installments where 35 percent of principal amount will be paid in the years 3 to 5 and remaining 65 percent will be paid in years 6 to 8.700 200.000) certificates of Rs. Ahmed Jaudet Bilal Jahangir Siddiqui & Company Limited 20.90 percent each of the issue amount respectively from 60th month. The issuer will have a Call Option to redeem in full or part the outstanding face value of the TFCs on every installment date.000 each Mark-up: Average Six months KIBOR (Ask Side) + 1.000 30.000 each Mark up: Average Six Months KIBOR (Ask Side) + 1.000 120 Annual2010 Report . Maturity: July 2017 Chief Executive: Mr. Shafay Hussain First Dawood Investment Bank Limited 6. October 2007.000) certificates of Rs.000 each Mark-up: Average Six Months KIBOR + 3.note 9.Unquoted. Maturity: September 2010 Chief Executive: Mr. Secured 2010 2009 (Rupees in „000) Pakistan Mobile Communication (Private) Limited Nil (2009: 40.70 percent per annum Redemption: The instrument is structured to redeem 0.1 20.20 percent of principal in the first 60 months and remaining principal in two equal semi-annual installments of 49. 5.000 (2009: 100.000 99.000) certificates of Rs. Ahmed H.000) certificates of Rs. 5.940 30. Munaf Ibrahim Khunja Textile Mills Limited 300 (2009: 300) certificates of Rs.880 99.00 percent per annum Redemption: 10 equal semi-annual installments commencing from the 24th months from first draw down. Shaikh 99. 5.5.14.920 99.000 each Mark-up: Average Six Months KIBOR (Ask Side) + 1. 5.60 percent per annum Redemption: Bullet payment at maturity Maturity: September 2012 Chief Executive: Mr.30 percent per annum Redemption: In two equal semi annual installments starting from the 30th month from the date of issue i.600 499. Maturity: July 2013 Chief Executive: Mr.00 percent per annum Redemption: Principal will be repaid in 12 semi annual installments with stepped up repayment plan whereby 47 percent of principal amount will be repaid in the years 3 to 6 and remaining 53 percent will be repaid in the years 7 to 8. 100. Rashid Khan Agritech Limited (formerly Pak American Fertilizers Limited) note 9.

000 3. First principal payment due at the end of 30th month from the first disbursement.75 percent per annum Redemption: In 6 equal semi annual installments.2 800.00 percent per annum Redemption: In 6 equal semi annual installments.000 each Mark-up: Average Six Months KIBOR (Ask Side) + 0.000 (2009: Nil) certificates of Rs.000 Annual 2010Report 121 .4 400 (2009: 400) certificates of Rs.05 percent per annum Redemption: Eight equal semi-annual installments commencing after a grace period of one year.3 and 9.14.000 5.05 percent per annum Redemption: Eight equal semi-annual installments commencing after a grace period of one year.2010 2009 (Rupees in „000) Power Holding (Private) Limited (Liability assumed from Gujranwala Electric Power Company Limited) . 5. after completion of grace period.088.000) certificates of Rs. 10.440.000 (2009: 800. 5. 5. Fazeel Asif Power Holding (Private) Limited .000 3. First principal payment due at the end of 30th month from the first disbursement.399.000.000 4. 9.000 (2009: Nil) certificates of Rs.349. 5.000 5.14.000 each Mark up: Average Six Months KIBOR + 2.00 percent per annum Redemption: In 6 equal semi annual installments. Khan 19.000.20 percent of principal semi-annually in the first 60 months and remaining amount in 4 equal semi-annual installments starting from 66th month. Maturity: April 2015 Chief Executive: Mr.note 9. after completion of grace period.14.14.000.000 (2009: 1.2.400 18.3 600.000) certificates of Rs. 9.000 each Mark up: Average 6 month KIBOR plus 2.000 4.000.560 150.000.4 400 (2009: 400) certificates of Rs.000.000 each Mark up: Average Six Months KIBOR + 2. Maturity: September 2014 Chief Executive: Mr. 10. Maturity: July 2017 Chief Executive: Mr.note 9.000 4.25 percent per annum Redemption: The instrument is structured to redeem 0. Maturity: February 2013 Chief Executive: Mr.000.440.14. Maturity: March 2014 Chief Executive: Mr.notes 9.000 each Mark-up: Average Six Months KIBOR (Ask Side) + 0.3 and 9. Fazeel Asif Power Holding (Private) Limited (Liability assumed from Faisalabad Electric Supply Company Limited) .2.note 9.3 1.14.000 3. after completion of grace period.notes 9.000. Naveed A.000 each Mark up: Average Six Months KIBOR + 1.000 4. First principal payment due at the end of 30th month from the change over date (date of conversion of loan into term finance certificates). Fazeel Asif Faysal Bank Limited 30. Maturity: February 2013 Chief Executive: Mr.088. Fazeel Asif Power Holding (Private) Limited (Liability assumed from National Transmission and Despatch Company) .14. Fazeel Asif Power Holding (Private) Limited .14.14.000.

600 42.000 100.272 100.703 336.740 25. 9.000 million (2009: USD Dollar 5.625 56.14.667 59.989 100.00 percent 6 months KIBOR plus 1. 9.304 250.000 million (2009: Nil) issued by Standard Chartered Bank and Citigroup Funding Incorporation respectively.025 39.00 percent 3 months KIBOR plus 1.14. the Government of Pakistan in its move to bring all circular debts of power sector to a single point of responsibility and ownership has transferred bank loan liabilities from the books of power companies (which includes term finance certificates issued by Gujranwala Electric Power Company Limited.000 2.000 15.000 12. 122 Annual2010 Report . provision has not been made against them as the State Bank of Pakistan vide its letter number BSD/BRP-5/X/000197/2011 dated January 6. 24.15 Investments in sukuk bonds Investee company Date of maturity Profit rate per annum Unit 2010 2009 (Rupees in „000) 224.000 281.09% per annum (2009: 14. As these term finance certificates are guaranteed by the Government of Pakistan.1 20.II Kohat Cement Company Limited Sitara Energy Limited BRR Guardian Modaraba K.00 percent 6.000 20. Sulemanji Esmailji & Sons (Private) Limited *Sitara Peroxide (Private) Limited Liberty Power Tech Limited Amreli Steel Private Limited **Security Leasing Corporation Limited .00 percent 3 months KIBOR plus 2. no provisioning has been maintained against these certificates. 2010. ** These Sukuks bonds have been restructured with effect from March 19.14.14.000 million) and US Dollar 5. markup accrued on these certificates amounting to Rs.09% per annum) and 13.080 million) and BDT 150 million (2009: Nil) issued by IDLC Securitisation Trust and Orascom Telecom respectively. Had the exemption not been issued.741 million has been suspended in accordance with the requirements of Prudential Regulations.000 300.15.835 Sitara Chemical Industries Limited . The amount of mark-up accrued against classified investment has. been suspensed. However.4 These customers have not complied with the terms of repayments of the term finance certificates.I **Security Leasing Corporation Limited .250 1. These bonds carry interest at 14.036 * These Sukuks bonds have been restructured with effect from February 19.50% per annum (2009: Nil) and are due for maturity in December 2011 (2009: December 2011) and June 2014 (2009: Nil) respectively.000 96. However. 298. 2010.30 percent 3 months KIBOR plus 1.000 250.1 These customers have not complied with the terms of repayment of the term finance certificates. Accordingly GEPCO.000 20.II Orix Leasing Pakistan Limited **Security Leasing Corporation Limited .9.50 percent 59.50 percent 6.000 9. The relevant term finance certificates have not been issued to the Bank by December 31. however.334 75.375 96.700 62.15. 2011 to all those Banks who have agreed to reschedule / restructure their exposures against these companies.980 million and the amount of profit before taxation for the current year would have been lower by the same amount.15.000 Note 9.670 145.000 15.250 500. 267.062 126. 2011 has allowed extension for withholding provisioning against these exposures till March 31.000 60. The relevant sukuk bonds against the advance subscription have not been issued to the Bank by December 31. the provision for dimunition in the value of investments would have been higher by Rs.40 percent 3 months KIBOR plus 1. 9.000 20. 9. 2010.3 These represent conversion of loan amounts into term finance certificates.1 June 2014 November 2014 August 2016 March 2021 December 2016 March 2014 March 2014 September 2015 September 2015 3 months KIBOR plus 1.695 45. 9. FESCO and NTDC have now become fully absolved of these liabilities.50 percent 6 months KIBOR plus 1.10 percent 3 months KIBOR plus 3. These carry interest at 3 months LIBOR plus 350 bps and 3 months LIBOR plus 450 bps and are due for maturity in March 2013 and June 2011 respectively. 2010.394 million (2009: BDT 21.000 5.1 This represents advance payment to Sitara Energy Limited.17 These represent Credit Linked Notes amounting to US Dollar 5.000 38.25 percent 6.II Engro Corporation Limited Quetta Textile Mills Limited December 2013 December 2013 June 2012 March 2014 December 2015 Note 9.2 During the year.00 percent 6 months KIBOR plus 1.16 These represent overseas bonds amounting to BDT 7.000 95.250 98.I Sitara Chemical Industries Limited .000 20.S. Faisalabad Electric Supply Company Limited and National Transmission and Despatch Company) to Power Holding (Private) Limited.15 percent 6 months KIBOR plus 1.000 205.853.500 158.000 95. 9.000 50.70 percent 6 months KIBOR plus 1.80 percent 6 months KIBOR plus 1.000 20.600 36.349.

828 2.05%) Break-up value per unit: Rs. 50) Alfalah GHP Income Multiplier Fund Percentage of holding: 96.936) 111.192 9.106.920 83.18.049.961.18 Particulars of investments in associates The paid up value of these shares / units is Rs.487 152.05 Market value per share: Rs.054.42%) Break-up value per unit: Rs.494.225 321.660. 50) Alfalah GHP Investment Management Limited Percentage of holding: 40.070 13.889.726 4.18% (2009: 28.295 5.037 (1.054.650.22% (2009: 40.016 13.52% (2009: 20%) Break-up value per share: Rs.9.Alfalah GHP Investment Management Limited (Paid-up value of each unit is Rs. 2010 2009 (Number of shares / units) 319.972 3. 1984 for providing Global System of Mobile Communication (GSM) services in Pakistan. Annual 2010Report 123 .660. 4.261.413.55%) Break-up value per unit: Rs.272 4.1.18.144.641 352.76%) Break-up value per share: Rs.590 7.992 562.494.305 2.11% (2009: 96.77 Date of audited financial statements: December 31. 10 except where stated.590.049.22%) Break-up value per share: Rs. Abdul Aziz Anis 2010 2009 (Rupees in „000) 2. 12. 2010 Management Company .77 Date of audited financial statements: December 31.34 Date of audited financial statements: December 31.106. Nasar us Samad Qureshi Alfalah GHP Value Fund Percentage of holding: 33.Alfalah GHP Investment Management Limited (Paid-up value of each unit is Rs. 50) Alfalah GHP Islamic Fund Percentage of holding: 96.251.498.064. 2010 Management Company .1 Investment in associates 3.704 147.109 355. 46.497 154. 57. 2010 Chief Executive: Mr.24% (2009: 8.000 95.124 319. 2010 Chief Executive: Mr.285 586.920 337. Muneer Farooqui Wateen Telecom Limited Percentage of holding: 13.913 6. 2010 Chief Executive: Mr.1 Warid Telecom (Private) Limited Investment as at January 1 Share in share premium Share of loss Gain on deemed disposal Balance as at December 31 The company was incorporated in Pakistan under the Companies Ordinance.962 (909.739 2. 2010 Management Company .096 7.077 5. 10.641 83.38% (2009: 92.106.070 140.Alfalah GHP Investment Management Limited (Paid-up value of each unit is Rs. 3. 8.124 Warid Telecom (Private) Limited Percentage of holding: 8.498 11.43 Date of reviewed financial statements: December 31.64 Date of reviewed financial statements: December 31.84 Date of reviewed financial statements: December 31.048.396) 3.972 4. 2010 Chief Executive: Mr. Naeem Zaminder Alfalah Insurance Limited Percentage of holding: 30% (2009: 30%) Break-up value per share: Rs.028 316. 52.641 9.44 Date of reviewed financial statements: December 31.794 87.899.

600) 562.080 (5.675 87. 124 Annual2010 Report .134.362 2010 2009 (Rupees in „000) 9.1. The company offered right issue which was not subscribed by the Bank resulting in decrease in shareholding of the Bank. 2010 Half year ended December 31. liabilities.18.488. The reduction in Bank's shareholding has been accounted for as 'deemed disposal' and resultant capital gain has been recognised in the financial statements.030.529.096 (322.2 Wateen Telecom Limited Investment as at January 1 Share of loss Gain on deemed disposal Balance as at December 31 562. The details of assets. revenues and losses of the Company as of December 31.696 (122. revenues and losses of the Company as of December 31.794 62.096 The company was incorporated in Pakistan under the Companies Ordinance.095) Wateen Telecom Limited 28. 2010 based on audited financial statements are as follows: As at December 31.3 Alfalah Insurance Company Limited Investment as at January 1 Dividend received during the year Share of profit Balance as at December 31 87. liabilities.710. 2010 Assets Liabilities Revenues Loss -----------------Rupees in '000----------------103.231 3.828 (4.828 Alfalah Insurance Company Limited is a general non-life company which was incorporated as an unquoted public limited company in Pakistan.992 684. 1984 for providing Long Distance and International public voice telephone (LDI) services and Wireless Local Loop (WLL) services in Pakistan.238.18.803 2010 2009 (Rupees in „000) 9.829) 12. 2010 Assets Liabilities Revenues Loss -----------------Rupees in '000----------------26.The company offered right issue which was not subscribed by the Bank resulting in decrease in shareholding of the Bank.325) 98.221 337. The reduction in Bank's shareholding has been accounted for as 'deemed disposal' and resultant capital gain has been recognised in the financial statements. The details of assets.166) Warid Telecom (Private) Limited 136. 2010 based on reviewed financial statements are as follows: As at December 31.1.848 (1.416.795 95. 2010 Half year ended December 31.153 25.847.801 15.

5 Alfalah GHP Income Multiplier Fund Investment as at January 1 Redemptions during the year Dividend received during the year Share in reserves of associate Share of profit Balance as at December 31 586.860 2010 2009 (Rupees in „000) 9. the Fund offers units for public subscription on a continuous basis. listed on the Karachi Stock Exchange.1.254 586. 2010 based on audited financial statements are as follows: Liabilities Revenues Profit -----------------Rupees in '000----------------Assets Alfalah Insurance Company Limited 1.18. Being an open ended mutual fund.649 2010 2009 (Rupees in „000) 9.037 (21. listed on the Karachi Stock Exchange.469) 20.285 527.362 152. liabilities. Being an open ended mutual fund.1.590 Alfalah GHP Value Fund is an open-ended mutual fund.704 99.928 42.646 14.295 (210.The details of assets. 2010 based on reviewed financial statements are as follows: As at December 31.295 Alfalah GHP Income Multiplier Fund is an open-ended mutual fund. revenues and profits of the Fund as of December 31.942 (4.466 38.135 355. 2010 Half year ended December 31. Annual 2010Report 125 .163 980.269 147.375 48.4 Alfalah GHP Value Fund Investment as at January 1 Dividend received during the year Share in reserves of associate Share of profit Balance as at December 31 147.000) (41.145) 20.802 359.914) 100. The details of assets.779) (9.18. 2010 Assets Liabilities Revenues Profit -----------------Rupees in '000----------------Alfalah GHP Value Fund 474.300. revenues and profits of the Company as of December 31. the Fund offers units for public subscription on a continuous basis.590 (5.468 66. liabilities.996) 4.082) (19.

050 64.282 (12. 2010 based on audited financial statements are as follows: Assets ----------------Alfalah GHP Investment Management Limited 361.962 (5. Being an open ended mutual fund.1. revenues and losses of the Fund as of December 31. 2010 Assets Liabilities Revenues Profit -----------------Rupees in '000----------------Alfalah GHP Islamic Fund 351.988 8.635 57.760 82.The details of assets.540) (31.200 Loss (10.911 316. revenues and losses of the Company as of December 31.524 321. liabilities.726 (10.663 2010 2009 (Rupees in „000) 9.928 4. revenues and profits of the Fund as of December 31.990) (20.412) 126 Annual2010 Report . The details of assets.439) 1.288 (14. 2010 Assets Liabilities Revenues Loss -----------------Rupees in '000----------------Alfalah GHP Income Multiplier Fund 372.6 Alfalah GHP Islamic Fund Investment as at January 1 Dividend received during the year Share in reserves of associate Share of profit Balance as at December 31 316.18. 2010 based on reviewed financial statements are as follows: As at December 31.016 (33. liabilities.943) 34. 2010 Half year ended December 31.18.7 Alfalah GHP Investment Management Limited Investment as at January 1 Dividend received during the year Share in reserves of associate Share of (loss) / profit Balance as at December 31 154.ended asset allocation fund.016 Alfalah GHP Islamic Fund is an open.972) 70.1. float and manage open-ended schemes and closed-end funds.497 128.177 Liabilities Revenues Rupees in '000----------------11.752) 140.726 Alfalah GHP Investment Management Limited is an asset management company.168 154. listed on the Karachi Stock Exchange. 2010 Half year ended December 31. investment advisor / fund manager and to constitute. liabilities. the Fund offers units for public subscription on a continuous basis.087 17.028 213.570 17. The details of assets. 2010 based on reviewed financial statements are as follows: As at December 31.318) 2010 2009 (Rupees in „000) 9.836 90. The principal activity of the company is to act as an asset management company.

427 51.694 92.936 43.172 102.000 50.613 JCRVIS JCRVIS A(f) JCRVIS ------(Unrated)-----A+(f) PACRA ------(Unrated)-----AA-(f) PACRA A+(f) JCRVIS ------(Unrated)-----AA-(f) PACRA PACRA BBB+(f) A+(f) PACRA A(f) JCRVIS A(f) JCRVIS BBB(f) BB(f) PACRA PACRA PACRA PACRA 4-Star/3-Star AA-(f) PACRA 4-Star/3-Star PACRA ------(Unrated)-----JCRVIS BBB-(f) A+ (f) JCRVIS AA PACRA AA/A1+ PACRA A/A1 PACRA A-/A2 PACRA AA+/A1+ PACRA AAA/A-1+ JCRVIS A+(f) AA-(f) A+(f) Annual 2010Report 127 .827 26.005 93.545 39.149 30.750 49.000 1.763 889 24.000 34.675.549.000 200.239 6.907 28.873 41.960 198.079 8.000 1.000 450.000 30.233 95.709 15.959 382.463 10.587 332.269 1.368 AAAAA AA AAAAA+ PACRA PACRA PACRA 2.000 1.000 99.995 99.092 51.741 91.346 426.832 99.648 91.820 44.152 37.788.350 30.587.185 38.010.600 30.940 30.998 18.689 332.936 10.S Bank Limited KASB Securities Limited MCB Bank Limited National Bank of Pakistan 10.384 399.708 76.935 32.771 11.Government Securities) 5.988.885 38.501 8.924 45.165 35.044 49.916 24.107 449.298 5.776 74.920 30.930 46.570 40.000 30.693 50.000 200.920 456.000 381.270 Long/Medium Term Credit Rating Rated by 35.500 50.958 50.675.000 33.761.542 15.977 37.000 150.928 31.250 49.901 15.000 99.800 154.036 99.940 1.959 1.155.963 42.659 150.314 159.658 50.181 144.648 93.190 9.430 50.226 2.000 9.638 99.045.000 912 100.355 9.175 15.992 (Unrated .784 63.147 49.820 150.823 51.500 50.960 49.794 96.000 46.882 50.695 100.840 49.588.000 9.764 47.368 400.420 46.9.980 77.000 26.000 49.831 6.Government Securities) 97.079 50.000 145.754 70.747 99.940 450.435 18.850 35.988 17.940 200.870 44.361 (Unrated .425 157.229 70.163 37.440 154.882 100.000 75.000 30.406 21.969 89.322 34.180 99.854 2.800 47.841 94.621 32.508 48.000 50.19 Quality of available for sale securities Market value Cost 2010 2009 2010 2009 ---------------------Rupees in '000--------------------Market Treasury Bills Pakistan Investment Bonds Term Finance Certificates Askari Bank Limited (2nd Issue) Standard Chartered Bank (Pakistan) Limited Bank Al-Habib Limited Faysal Bank Limited (formerly The Royal Bank of Scotland) Allied Bank Limited Pakistan Mobile Communication (Private) Limited ORIX Leasing Pakistan Limited Jahangir Siddiqui & Company Limited First Dawood Investment Bank Limited Financial Receivables Securitisation Company Limited "A" Financial Receivables Securitisation Company Limited "B" Pak Arab Fertilizers Limited Pakistan Mobile Communication (Private) Limited Azgard Nine Limited Askari Bank Limited (3rd Issue) Faysal Bank Limited 40.011 8.852 PACRA JCRVIS PACRA PACRA AA+ AA PACRA PACRA D A+ PACRA ------(Unrated)-----AA JCRVIS ------(Unrated)-----PACRA CCC AAPACRA AAJCRVIS Shares in Listed Companies / Certificates / Units AKD Income Fund AMZ Plus Income Fund Crosby Pheonix Fund Askari Income Fund Atlas Income Fund Dawood Money Market Fund First Habib Income Fund IGI Income Fund JS Aggressive Income Fund JS Income Fund KASB Liquid Fund MCB Dynamic Cash Fund Meezan Balanced Fund Meezan Islamic Income Fund NAFA Income Opportunity Fund (Formerly NAFA Cash Fund) Pak Oman Advantage Fund Pak Oman Advantage Islamic Income Fund Pakistan Capital Market Fund Pakistan Income Fund Pakistan Strategic Allocation Fund Reliance Income Fund United Islamic Income Fund United Money Market Fund Adamjee Insurance Company Limited Askari Bank Limited J.043.920 438.634 28.167 9.657 2.567 150.

500.535 41.177 1.074.595.000.264 10.300 38.002.279 33.725 4.821 5.000 1.000.935 22.584.210 2.695 145.000 93.793 30.385 15.000 2.407 1.075 1.000 6.121 10.064.Date of issue Market value Cost Long/Medium 2010 2009 2010 2009 Term Credit Rated by ---------------------Rupees in '000--------------------Rating 6.000.065 102.950 45.525 106.000 50.027 AA-/A1+ PACRA A/A-1 JCRVIS AA-/A1+ PACRA ------(Unrated)-----------(Unrated)-----------(Unrated)-----------(Unrated)-----------(Unrated)-----------(Unrated)-----AAA/A-1+ JCRVIS ------(Unrated)-----------(Unrated)-----AA+/A1+ PACRA AA+/A1+ PACRA AA+/A1+ PACRA ------(Unrated)-----------(Unrated)-----------(Unrated)-----A-/A2 PACRA ------(Unrated)-----------(Unrated)-----A/A1 PACRA ------(Unrated)-----------(Unrated)-----------(Unrated)------ NIB Bank Limited Samba Bank Limited The Bank of Punjab Al-Abbas Cement Company Limited Fauji Cement Company Limited Fecto Cement Limited Lucky Cement Limited Kohinoor Energy Limited Kot Addu Power Company Limited Oil and Gas Development Company Limited Pakistan Oilfields Limited Pakistan Petroleum Limited Pakistan State Oil Company Limited Southern Electric Power Company Ltd The Hub Power Company Limited Hira Textile Mills Limited Pakistan Telecommunication Company Limited Telecard Limited Worldcall Telecom Limited Fauji Fertilizer Bin Qasim Limited Fauji Fertilizer Company Limited Fatima Fertilizer Limited Lotte Pakistan PTA Limited Crescent Steel & Allied Products Limited ICB Islamic Bank Shares in Un-listed Companies Pakistan Export Finance Guarantee Agency Limited Not Applicable Not Applicable Not Applicable Not Applicable 5.929 3.177.821 ------(Unrated)-----------(Unrated)-----------(Unrated)-----------(Unrated)------ Society for Worldwide Interbank Financial Telecommunication Al-Hamra Hills (Private) Limited Al-Hamra Avenue (Private) Limited Preference Shares in Un-listed Companies First Dawood Investment Bank Limited Trust Investment Bank Limited Not Applicable Not Applicable 15.466 3.000.128 45.118 94.502 9.250 15.756 12.000.118 34.408.595.925 13.670 8.490 66.371 2.509.625.950 56.930 51.380.744 41.117 35.374 11.000 17.686.625.703 12.000 84.115 5.570 17.026 2.203 50.521 130.000 25.000 40.073 69.000 2.320 50.757 27.000.021 93.969 26.000 3.000 1.390 103.980 35.000.000 2.277 9.405.824 2.287 2.676 62.020 44.478 5.345 33.679 128 2010Annual Report .569 34.278 28.260 26.325 5.096 70.000 3.930 57.924 1.000 50.000 - ------(Unrated)-----------(Unrated)------ Sukuk Bonds Ijara Sukuk Bonds I Ijara Sukuk Bonds II Ijara Sukuk Bonds III Ijara Sukuk Bonds IV Ijara Sukuk Bonds V Ijara Sukuk Bonds VI Sui Southern Gas Company Limited Security Leasing Corporation Limited Security Leasing Corporation Limited Quetta Textile Mills limited 26-Sep-08 29-Dec-08 11-Mar-09 17-Sep-09 15-Nov-10 20-Dec-10 1.088 110.171 25.000 85.921 61.000 3.600 4.748 5.714.725 4.393.175 29.000 129.277 16.000 3.979 37.002.143 36.698 37.937 68.954 8.175 13.610 40.000 3.469 ------(Unrated)-----------(Unrated)-----------(Unrated)-----------(Unrated)-----------(Unrated)-----------(Unrated)-----AA PACRA ------(Unrated)-----------(Unrated)-----------(Unrated)------ 53.000.026 1.000 3.500.279 1.000.075 1.000 6.655 1.000 129.090 9.405.089 13.000.716 15.781 883 42.950 52.240 87.935 64.685 60.440 21.429.980 40.625 8.096 70.478.924 1.546 1.005 1.000 95.417 22.000 2.348 1.592 1.220 104.013 3.900 53.

2010 2009 (Rupees in „000) 9.Term finance certificates / sukuk bonds .899 30.Khunja Textiles Mills Limited 74.851 132.158 Annual 2010Report 129 .314 55.Fully paid up ordinary shares of Rs.Kohat Cement Company Limited .Trust Investment Bank Limited Held to maturity securities Unlisted companies .Al-Hamra Avenue (Private) Limited .497 249.693) 249.000 25.000 288.158 8.375) (1.Al-Hamra Hills (Private) Limited .Pakistan Export Finance Guarantee Agency Limited .First Dawood Investment Bank Limited .652 30.Term finance certificates .21 Particulars of provision for diminution in value of investments by type and segment Available for sale securities Listed companies / mutual funds .438.000 5.000 249.607 (32.899 30.497) 288.000 5.442.191 74.619 277. 10 each .158 171.First Dawood Investment Bank Limited .725 3.Preference shares .Fully paid up ordinary shares / units Unlisted companies .815 (285) (132.20 Particulars of provision for diminution in value of investments Opening balance Charge for the year Reversals Provision written off during the year Closing balance 9.191 1.723 2.064 23.725 35.

369 3.955 10.846 11.613 1.586 254.952 3.730 3.052 3.842 3.169 1.297 12.359 34.162 319 1.466 188 4 827 1 20 3 7 17 78 254.051 3.394 103 (19) 148 32 (1.673 683 68.744 31.586 29.802 2.711 1.22 Unrealised gain on revaluation of investments classified as held for trading .299 1 3.860 30.145 2.092 1.029 - (179) - (143) (35) - 1.354 2.087 12.831 1.806 4.934 1.934 918 2.553 6.216) 121 35 (1) 186 (50) 6 (151) 1 (701) (1) (15) (1) (5) 12 (54) 1.207 8.080 8.545 9.300 187 (59) (140) (395) 402 (36) 55 (129) 122 2.559 6.034.185 - 56 56 (38) (477) (2) - - 3.563 966.9.586 130 Annual2010 Report .103 1.Pack Films Limited Pakistan Telecommunication Limited Nishat Chunian Power Limited Nishat Power Limited Karachi Electric Supply Compnay Limited Dewan Salman Fibre Limited Nishat (Chunian) Mills Limited Nakshbandi Industries Limited Dewan Cement Limited Yousuf Weaving Mills Limited Dadabhoy Cement Industries Limited Pakistan State Oil Company Limited The Bank of Punjab Agriauto Industries Limited Colony Sugar Mills Limited Market Treasury Bills - (33) 79 - 872 (71) 2.232 2.392 1.142 4.527 1.640 55.net Unrealised gain / (loss) Cost 2010 2009 2010 2009 -----------------Rupees in '000----------------- Investee Company Fully paid up ordinary shares / units .Listed NAFA Stock Fund Adamjee Insurance Company Limited NIB Bank Limited MCB Bank Limited Allied Bank Limited Arif Habib Investment Management Limited Arif Habib Corporation Limited (formerly Arif Habib Securities Limited) Jahangir Siddiqui & Company Limited National Bank of Pakistan United Bank Limited Lucky Cement Limited Pakistan Oilfields Limited Pakistan Petroleum Limited Southern Electric Power Company Limited Azgard Nine Limited Nishat Mills Limited Engro Corporation Limited Fauji Fertilizer Bin Qasim Limited Fauji Fertilizer Company Limited Fauji Cement Company Limited D G Khan Cement Limited ICI Pakistan Limited Lotte Pakistan PTA Limited Crescent Steel & Allied Products Limited Pace Pakistan Limited Tri.

2.980.905.905.255 7.856 2.628.142.708 .(837.927 8.461) (649.802.822.103 4.577 15.030.451.334. running finances.916.587 196.666.5 (10.7.905.780.374 5.972 5.142.670.021.017.997 701.1 Net investment in finance lease represents ijarah financing made prior to January 1.NET Loans.gross of provisions In local currency In foreign currencies Short term (upto one year) Long term (over one year) 10.672) 188.606) (763.5 10.322 2.875 217.536 1.294.613.1 Particulars of advances .091.655 196.351 946. "Ijarah" as disclosed in note 10.869) (419.503.3.456 8. Annual 2010Report 131 .492 10.615 2.169.819 .676) (470.802.807) 2. 2009 have been accounted for in accordance with the requirements of IFAS 2.666.722 10.540 820.445) .344 52.463.129.3 Provision against advances Specific provision against non-performing advances General provision against advances 10.301 55.2 Net investment in finance lease 2010 2009 Not later Later than Over Not later Later than Over than one one and less five Total than one one and less five Total year than five years years year than five years years -----------------------------------------------------------(Rupees in '000)--------------------------------------------------------Lease rentals receivable Residual value Minimum lease payments Financial charges for future periods Present value of minimum lease payments 1.142.758 2.282.909) 7.152.977 217.751 2.919.341 3.164 (792) (1.628) (10.789.143 10.632.066) (8.523 3.260 197.6.799. etc.2 187.166 19. Ijarah contracts entered on or after January 1.737 11.863 196.164 141.054 170.615 3.754 3.729 196.512 .Note 2010 2009 (Rupees in „000) 10 ADVANCES .483.071 5.291 3.143 165.290 6.822.594. cash credits.418.465.4.419 11.822.021. 2009.351 10.823.144.897.598.388.250.218 2.166 8.164 (8.111 .122.799 217.780.025 9.354.020.514 7.430.089) 207.905.181.802.743.143 181. In Pakistan Outside Pakistan Net investment in finance lease In Pakistan Outside Pakistan Financing and investing assets under IFAS 2 Ijarah Bills discounted and purchased (excluding market treasury bills) Payable in Pakistan Payable outside Pakistan 10.545.336.895 6.597 179.2.173 8.622 10.365 4.730.351 10.672) (980.615 6.319 (417.724.

517 620.183 3.536 92.494 2.105) 6.484) 120.574) 195.049 946.515) (211) 5.030.723) 625.326 (25.694 (69.752 221.652 5.473 (23.316 (95. 2010 Cost Accumulated depreciation Net book value Year ended December 31.574) 195.512) (211) 625.726) 5.551) 499.536 5.049 946. 2010 Cost Accumulated depreciation Net book value 660.10.375 (34.484) 120.642 (121.549 5.145) 476. 2009 Cost Accumulated depreciation Net book value Year ended December 31. b) Movement in net book value of ijarah assets 2010 Asset categories Vehicles Plant & Corporate Machinery (Rupees in '000)-------------------------------- Vehicles Consumer -------------------------------- Equipment Total At January 1.049 946.715) 75.661) 476.183 3.517 123.652 625.334) 2. 2010 Opening net book value Additions Disposals Depreciation Adjustment Closing net book value At December 31. 2009 Cost Accumulated depreciation Net book value 132 Annual2010 Report - 221.994 1.758 98.468 - 221.083 - - - 660.536 .503.536 5.083 123.262 (945) (64.049 946.484) 120.765.503.166) (468.994 1.567 (3.752 195.752 123.652 660.125) 499.127 (65.083 120.294 4.723) 625.494 75.567 (3.3 Financing and investing assets under IFAS-2 (Ijarah) a) Brief description of the ijarah arrangements Ijarah contracts entered into by the Bank essentially represent arrangements whereby the Bank (being the owner of assets) transfers its usufruct to its customers for an agreed period at an agreed consideration.452.758 (285.019.300 3.326 (25.549 545.843 (313.211 (22.375 - (34.652 2.011.483) 6.567 (3.011.726) 5.326 (25.452.509 Vehicles Consumer -------------------------------- 2009 Asset categories Vehicles Plant & Corporate Machinery (Rupees in '000)-------------------------------- Equipment Total At January 1.111) (526.509 2.574) 195.994 1. 2009 Opening net book value Additions Disposals Depreciation Adjustment Closing net book value At December 31.105.752 399.375 (34.083 422. The significant ijarah contracts entered into by the Bank are with respect to vehicles.011.262 (945) (64. plant and machinery and equipment and are for periods ranging from 3 to 5 years.262 (945) (64.

620 595.674 81.586 billion) which have been placed under non-performing status as detailed below: 2010 Domestic ----------------------------------------------------------- Overseas Total (Rupees in '000) Domestic Overseas ----------------------------------------- Category of Classification Other Assets Especially Mentioned (Agri Financing) . Further.050 9.492.599 million and the profit before taxation for the current year would have been lower by the same amount.312 9. the provision against loans and advances would have been higher by Rs. The State Bank of Pakistan vide its letter no. Annual 2010Report 133 .814 7.174.4.2010 2009 (Rupees in „000) c) Future Ijarah payments receivable Not later than one year Later than one year and not later than five years Later than five years 5.note 10. for which provision has been maintained at 60% of the outstanding balance on SBP's instruction.4 Advances include Rs 17.989 1. such loans and advances shall continue to be classified as per the criteria laid down in the Prudential Regulations.676 6.602.162 10.889 Substandard 740.771 10.4. financing facility disbursed to Agritech Limited has been restructured as a result of financial difficulties / repayment problems faced by the Company.174.940. 2010.050 6.710 billion (2009: Rs 15.2 3. However. Had the exemption not been provided by the State Bank of Pakistan. 2011 has allowed extension for withholding provisioning against the exposure till March 31. 48.546 13.780 330 8.748 279. to all those banks who have agreed to reschedule / restructure their exposures against the Company.699 Loss 13.973 27.826 481.993 15.24 million.523 3.710.078.101.743.936 8.285.1 192. the provision against loans and advances would have been higher by Rs.275.453.2 During the year.4.699 458.105.122.811. BSD/BRP-5/X/000197/2011 dated January 6.585.047 16.374 197.note 10.105.839 million and the profit before taxation for the current year would have been lower by same amount.992.212. 188.038 2.923 299.933.144 458.283 17.000 192.020. the aforementioned deferment is only available for such loans and advances which have become non-performing after July 1.600.542 5. Had this relaxation not been available. 2011.606 * Substandard advances include amount of Rs.070 15.4.050 17.523 3.000 110.122 205.312 110.550. 10.236 196.488 81.017.290 586.414 9.767 10. 10.718 145.662. 2010 has allowed all banks to defer provisioning against all loans and advances which have been restructured / rescheduled as a result of recent floods in Pakistan.889 740.674 Doubtful . 6 of 2010 dated November 2.716 481.1 During the year.991 2.144 3.488 27.778 1.544 106.461 2009 Domestic ----------------------------------------------------------- Overseas Total Domestic Overseas (Rupees in '000)--------------------------------------------------------- Category of Classification Other Assets Especially Mentioned (Agri Financing) Substandard* Doubtful Loss 145.480.546 9. the State Bank of Pakistan through BSD Circular No. 105.998 3.150 5.

780. 2010 which is not available for either cash or stock dividend to shareholders amounted to approximately Rs.017.367 763.036. 2009 and BSD circular no.020.250.985 (1.461 578.114.780.250.327.628 1.146 4.017.6. the additional impact on profitability arising from availing the benefit of forced sale value against pledged stocks and mortgaged commercial.571.985 (923.214.127) 763. Had the provision against non-performing loans and advances being determined in accordance with previously laid down requirement of SBP. the specific provision against non-performing loans would have been higher and consequently profit before taxation and advances (net of provisions) as at December 31.488 million).020.479 280. 1.193 71.435 649. building and machinery. The additional profit arising from availing the FSV benefit .017.244.5 Particulars of provisions against advances 2010 General 2009 General Note Specific ----------------------------------------------- Total Specific Total (Rupees in '000)--------------------------------------------- Opening balance Exchange adjustment and other movements Charge for the year Reversals / recoveries 8.3 Particulars of provisions against advances 2010 General 2009 General Specific ----------------------------------------------- Total Specific Total (Rupees in '000)--------------------------------------------- In local currency In foreign currencies 9.825) 3.159. stock in trade etc.089 7.952) 3.606 763. residential and industrial properties held as collateral against non-performing loans for 4 years (previously 3 years) from date of classification for calculating provisioning requirement. 10.1 The State Bank of Pakistan (SBP) vide its BSD Circular No.089 51.127) (291.085 6.1 (326.085.923 10.780.672 5.811. General provision for overseas branches is maintained in accordance with the guidelines of the authorities in the respective countries.615 (494.670.527 (326.645) 8.826 8.606 (30.193 8. 2010 would have been lower by approximately Rs.440 (1.670.492 (473) (112.140. However.net of tax at December 31. These securities comprise of charge against various tangible assets of the borrower including land.066 20.562.780 205.10.166 98.4 Although the Bank has made provision against its non-performing portfolio as per the category of classification of the loan.672 Amounts written off Closing balance 10. 202.2 General provision against consumer loans represents provision maintained at an amount equal to 1.5.965) 649.699 74.458) 2.136) 10.499 3. the Bank holds enforceable collateral in the event of recovery through litigation.066 8. residential and industrial properties would not be available for payment of cash or stock dividend.488 (494.606 688.274.500. 2.461 10.965) (112. 2 dated June 3.628 10. 134 Annual2010 Report .780 million (2009: Rs.5.405.055. 10 dated October 20.440 (868.488 10.992. 10.672 10.026 3. 2010 has allowed banks to avail the benefit of 40% of forced sale value of pledged stocks and mortgaged commercial.973 27.892) (291.567 million.066 8.136) 10.038 4.598 1.645) 8.274.5.5.683 1.5% of the fully secured performing portfolio and 5% of the unsecured performing portfolio as required by the Prudential Regulations issued by the State Bank of Pakistan.493) 2.

141. 500.595 2.615 (1.792 2.462 10.169.350 2. etc.454 135 3.504 351.640 8. 500.946 507.154 12.848 14.Balance at end of year Total 11 FIXED ASSETS Capital work-in-progress Property and equipment Intangible assets 11.972. 10.6.951 12.000 10. executives.516 554.000 and above Write offs of below Rs.168.452 220.592.Note 2010 2009 (Rupees in „000) 10.404) 3.7 Details of loans written-off of Rs.552. Debts due by directors.6.251.645 59.012 10. associated companies.894 351.106.2 11.169.Balance at beginning of year .8 Particulars of loans and advances to directors.640 494.932.153 14.254) 2.477.1 11.275 1.462 46.Balance at end of year Debts due by companies or firms in which the directors of the Bank are interested as directors. executives or officers of the Bank or any of them either severally or jointly with any other persons .246.287 Annual 2010Report .990.592.817 554.3 679.225.000/.Loans granted during the year .446 998.096 6.257.474 (998. 500.012 5.Repayments during the year .960. partners or in the case of private companies as members .6 Particulars of write-offs 10.105.275 2.761.994.746 342.102 (659.Balance at beginning of year .491 599.2 Write offs of Rs.Loans granted during the year .476 (10.and above In terms of sub-section (3) of Section 33A of the Banking Companies Ordinance.577 1.1 Against provisions Directly charged to profit and loss account 326.Repayments during the year . 1962 the statement in respect of loans written-off or any other financial relief of five hundred thousand rupees or above allowed to a person(s) during the year ended December 31.392) 2.136 25.540) 4. 2010 is given in Annexure-I.

049 1.248 10% .501) * 1.171) 1.544) 2.406 189.700 636 397.542.116.685 123.234 679.759) * 20.964) * (6.265.839) * 5.492.506 45.411) * 34.545 2.926 (6.207 (221) * 1.929 (6.993 2.727 266.700 440.540.399 151.514 (30.6.25% Office equipment 4.293.986.567 7.790 (11.144.549.511 29.584 - 1.996 25% 16.492 4.605 8.993 234.929 (5.141) 14. at December 2010 % per annum 31.152.972.989 19.605) * 1.151) * (2.183) * (14.2010 2009 (Rupees in „000) 11.989 8.443 16.101 - 233.804 954.491 136 2010Annual Report .083 12.907) * 386 2.247 (23.891 39.079 - 78. 31.372 .348) 482.701.402 2.496.574 4.829.701 76.490 (4.118.809 5.587 2.918 25% Leased Vehicles 23.156.619 .667) 209.556 7.427.589.177 8.608.1.452 18.865) * 1.185 859.685 3.530 (14.5% .950 3.052 .429) * 1. December 31.970 20% .125. 2010 *adjustments Revaluation as depreciation as at December at January 1.227 20% Furniture and fixtures 1.25% Vehicles 246.115 1.5%-5.809 145.976 (30.946 12.010 - 2.972.1 Capital work-in-progress Civil works Equipment / intangibles Advances to suppliers and contractors Others 11.951 662.357) * 12 .5%-5.154 2010 Cost / Additions / (disposals) / Reversal of deficit on revaluation Cost/ Accumulated Depreciation Accumulated depreciation reversed on Accumulated depreciation as 2010 Net Book Rate of depreciation Description revaluation as at January 1. 2010 2010 for the year/ (on disposal)/ *adjustments Value at revaluation as at December 31.672.670.225.533.155 (28.695.989 3.147 - 5.582.385.230 7. 2010 -----------------------------------------------------------(Rupees in '000)--------------------------------------------------------- Office premises 4.506 - 79.206.831 451.325 (99.483.132 Lease hold improvements 2.951 397.276 1.282 (3.365 .5% Revaluation 3.066.3.2 Property and equipment 228.318 27.631.923 1.892 (221) * 1.627.826 - 5.032 (77.116 (17.309 - - 45.301.

605 8.835.693.873 (302.833 * (49) 173.4.971 494.561 (2.814 (427) * (15.5% (14) * 6.129 1.987) Lease hold improvements Furniture and fixtures Office equipment 1.399 903.8.372 7.540.2.997 414.008 416. 1.831 1.646 184.613 (49.814 73.372 (427) * (15.185 10% .641 20% .971 31.589.971 31.662 (178.5%-5.153 20% Opening Balance --------------------------------------------- Computer software (note 11.145.5%-5.640) 111.605.188 million).206.818 (302.094.986.872.283) * (1.106.310 11.459) * 5.053) * 4.873 (302. 2009 -----------------------------------------------------------(Rupees in '000)--------------------------------------------------------Office premises 4.876) * 9.987) 272.038 211.826 .369) * 1.587 million.092.460 .385.951 2.25% Vehicles 315.006 37.230. 1.994 (113.581 758.259) * (30.391) * (15.206.089) 4.528 (10.718 - 1.637 (302.479.010 705. 4.362 301. Valuation and Engineering Consultant.584 6.118.533.584 .605 .490 8.153 - 246.891 100.442 272.138 .202) 165. 2009 on the basis of market values determined by Harvester Services (Private) Limited.179 20% 1.369) 12.556 75.3 Intangible assets 2010 COST ACCUMULATED AMORTIZATION Additions/ Amortization Rate of Closing Book value amortization (Deletions)/ Closing Opening (Deletion) / * Adjustment Balance Balance * Adjustment Balance at closing % per annum (Rupees in '000)------------------------------------------552. at December 2009 31.885 568.672.567 3.681 25% 14.551.061 - 4.677 million (2009: Rs.920 109.885 (7.3.449) 4.089) 3.072 Annual 2010Report 137 .482.092 16.006 2.060) * (1.533.971 109.101 173.000 599.185 1.452 (109.288 140.000 541. 2009 Rate of depreciation % Revaluation as depreciation as at December at January 1.161) * 4.516.089) - 23.197 (23.115 12.1 Included in cost of property and equipment are fully depreciated items still in use having cost of Rs.829.219 48.089) . 2009 2009 for the year/ (on disposal)/ *adjustments reversed on depreciation as revaluation as at December 31. 11.556 2.919 2.200 (242) * (1.109.2009 Cost / Additions / (disposals) / *adjustments Description revaluation as at January 1.3.2.873 (113.293.643 (188.283 (1.2 Office premises were last revalued on December 30.640) 416.094.25% 3.1) 400.372 per annum (188.393 (34.5% Revaluation 3.2.833 * (49) 384.182 342.009 321.153 1. 2009 Reversal of deficit on revaluation Cost/ Accumulated Depreciation Accumulated depreciation Accumulated Net Book Value at December 31. Had there been no revaluation.695. 11.1.399 (86.951 108.210 25% Leased Vehicles 26. 31.856 31.949 Goodwill Membership Card 109.101 .028) * 16.063 774. the net book value of office premises would have been Rs.449) (14) * 6.809 10.711.733) - 12.733) 2.000 - 109.695 (72.455) 416.206 * (117) 552.516) * (28.174.672.736) 733.206 * (117) 953.

000 or cost of less than Rs.244 1.072 31.207 * (146) 66.664 million (2009: Rs.848 11.000 1. Kh.925 557 32 4.000 506.040 66.182 742 1. Abdul Latif M/s Alfalah Insurance (Related party) 383 5.971 31.4 Details of disposal of fixed assets having cost of more than Rs.151 4.employee 6.Opening Balance --------------------------------------------- 2009 COST ACCUMULATED AMORTIZATION Additions/ Amortization Rate of Closing Book value amortization (Deletions)/ Closing Opening (Deletion) / * Adjustment Balance Balance * Adjustment Balance at closing % per annum (Rupees in '000)------------------------------------------35.113 * (61) 35. 250. 24.3.548 Various Various Leasehold Improvements Renovation work Renovation work Renovation work Renovation work Renovation work Renovation work Items having book value of less than Rs.848 20% Computer software 365.000 220.000.3.971 109.000 or cost of less than Rs.000 2.065 330 416 - Write Off Write Off Insurance Claim Write Off Write Off Write Off N/A N/A M/s Alfalah Insurance (Related party) N/A N/A N/A 3.897 Goodwill Membership Card 109.289 million).756 4.000 541.101 189.281 Various Various 138 Annual 2010 Report .000.374 1.000 4.971 321.971 31.000.738 6. 11.342 90 156 70 863 457 375 337 316 1.183 2. 1.000. Ahad Affendi .207 * (146) 211. 1.391 17. 1.896 4.920 255.1 This includes additional amortisation charge of Rs.000 or above are given below: Description Accumulated Net book Sale depreciation value proceeds ------------------------(Rupees in '000)------------------------Cost Mode of Disposal Particulars of purchaser Office premises Bhera branch Defence Office Premises Items having book value of less than Rs.865 189 221 194 5. 174. 11.2 Included in cost of intangible assets are fully amortised items still in use having cost of Rs.738 6.738 6.634 11. 1.983 14. 250.033 795 491 416 1.219 21 437 Various Various Furniture and fixtures Furniture & Fixture Furniture & Fixture Furniture & Fixture Furniture & Fixture Furniture & Fixture Items having book value of less than Rs.000 or cost of less than Rs.964 408 2.799 465 493 386 511 1.945 524 Negotiation Insurance claim Mr.344 million which has been recognised during the year on account of reassessment of useful life over which the benefits associated with a specific intangible should be recognised.033 1.000.925 525 4.000 or above Details of disposal of fixed assets having cost of more than Rs.113 * (61) 400. 250.644 79 5. 169.011 109.949 145.860 821 2.182 1. 250.158 1.072 429 449 338 237 Insurance Claim Bid Insurance Claim Insurance Claim Negotiation M/s Alfalah Insurance (Related party) Jahandad Society for Community Development M/s Alfalah Insurance (Related party) M/s Alfalah Insurance (Related party) Mr. 250. 1.868 109.907 1.000 or net book value of Rs.000 or net book value of Rs.

Haider Ali M/s Alfalah Insurance (Related party) Mr.753 10.496 341.294 1.200 1.533 372.149 99.629 1.066 92.142 161.030 643 793 1.714.300 338.506 24.530 1.200 139 12.125 362 296 357 3.845 112.862 6.000 Vehicles Toyota Corolla Honda Civic Toyota Corolla Honda Accord Honda City Honda City Honda Civic Items having book value of less than Rs.005 3.411 1.959 17.255 10. Haider Ali Mr.061 868 852 1.330 69.516 1.195 1.322 23.706 150.265 283.016) 14.167 1.818 2.555 508 356 184 774 3.704 27.572 18 256 1. 250.506 (3.195 749 2.873. deposits. Adil Motiwala Negotiation Mr.035 588 666 828 16.December 31. advance rent and other prepayments Assets acquired in satisfaction of claims Advances against future Murabaha Advances against future Ijarah Advances against Diminishing Musharakah Branch adjustment account Tax recoverable Dividend receivable Unrealised gain on forward foreign exchange contracts Prepaid exchange risk fee Stationery and stamps on hand Trade debts Others Less: Mark up held in suspense account Less: Provision held against other assets 11.445 17.269 413 530 696 5.1 Market value of assets acquired in satisfaction of claims Annual 2010Report .932) 12.000 1.062 1.270. Note 2010 2009 (Rupees in „000) 12 OTHER ASSETS Income / mark-up accrued in local currency Income / mark-up accrued in foreign currencies Advances. Dilawar Gill M/s Alfalah Insurance (Related party) Various Various Bid Mr.109 1.531 17. 1.M.000.426 156.636 30.429 109.067 1. 2009 * Disposal as per Bank's policy represents vehicles sold to employees as per the terms of their employment.243) (541. 250.185 20.502 5.832) (635.410.150 354.512.Iqbal Saifi Negotiation Mr. Adil Motiwala Negotiation Mr.548 1.Description Accumulated Net book Sale depreciation value proceeds ------------------------(Rupees in '000)------------------------Cost 1.170 1.Saleem As Per Bank Policy Mr.000. Haider Ali Mr.160 950 962 1.469 364.273 141.901.368 1.000 or cost of less than Rs.768. 2010 .266 585.498 77.064 Mode of Disposal Particulars of purchaser Office equipment Diesel Generator Diesel Generator Diesel Generator Diesel Generator Assets destroyed in fire Diesel Generator Diesel Generator Assets destroyed in fire Items having book value of less than Rs. Haider Ali Mr.048 552 556 1.902.306. 1.755 (2.000 1.000 or cost of less than Rs.945. Haider Ali Mr.920 3.074 1.400 19.Umer Zameer Bid Mr.546 31.691 93.1 12.060 912 1.651 22.839 1.320 35.December 31.948 353.157.741 14.603 1.742 274. Adil Motiwala Various Various Total .823 467.053 3 139 206 222 1.236 47.463 507 536 412 412 1.759 178.532 113.386 576.265 258.Haji Noorullah Bid Mr.774 23.000 Bid Bid Bid Bid Insurance Claim Bid Bid Insurance Claim Mr.074 2.618.958 76.2 12.

14.533 3.600 1.124 8.124 18.016 12.601 1.610 18. 140 Annual2010 Report .484 541.00% to 5.916 635. The mark-up rate on this facility ranges from 4.2 Provision held against other assets Opening balance Charge for the year Reversals Amount written off Closing balance 12.098.Note 2010 2009 (Rupees in „000) 12.602.099 13.700.016 94.576.866 75.801.653.50% to 9.00% per annum) payable on a quarterly basis.025 2.601 1.602.358.700.921 14.4 14.257 3.700.00% per annum (2009: 4.50% per annum) payable on a quarterly basis.098. The mark-up rate on this facility ranges from 7.198 336.300 11.2 Details of borrowings secured / unsecured Secured Borrowings from State Bank of Pakistan under: Export refinance scheme Long Term Finance for Export Oriented Projects Scheme (LTF-EOP) Long Term Finance Facility Modernisation of SMEs Repurchase agreement borrowings Unsecured Call borrowings Overdrawn nostro accounts 11.620 1.1 Particulars of borrowings with respect to currencies In local currency In foreign currencies 14.887 189.887.099 13.1 541.099 13.016 157.2.921 14.025 2.00% per annum) payable on a quarterly basis.025 2.4 This facility is secured against a demand promissory note executed in favour of the State Bank of Pakistan.652.653.6 14.150.513 9.144 14 BORROWINGS In Pakistan Outside Pakistan 11.921 14.602.966.320 20.194 163.653.50% to 8.465 11. The markup rate on this facility ranges from 6.932 282.3 14.887.809.521.098.766.50% to 8.442 302. 14.5 This facility is secured against a demand promissory note executed in favour of the State Bank of Pakistan.305 1.2. 93.1 This includes an amount of Rs.60% per annum (2009: 6.099 2.098.532 258.3 This facility is secured against a demand promissory note executed in favour of the State Bank of Pakistan. 13 BILLS PAYABLE In Pakistan Outside Pakistan 4.7 9.00% per annum (2009: 7.488.321 20.320 20.124 18.5 14.766.766.00% to 5.687.339 4.611 470.040 million recognised during the year on account of impairment in the value of asset acquired in satisfaction of claim.

867 200.743.010.50% to 13. 2010 2009 (Rupees in „000) 15 DEPOSITS AND OTHER ACCOUNTS Customers Fixed deposits Savings deposits Current accounts .021 31.199 298.247. 14.668.753.389 16 SUB-ORDINATED LOANS Term Finance Certificates II . The mark-up rate on this facility is 6.852 324.690 263.905.697 4.292 258.50 percent (Base Rate is defined as the simple average (average of the KIBOR Rate quoted by banks for that day) of the ask rate of the six months Karachi Interbank Offer rate (KIBOR) prevailing on the first day of the start of each half yearly period for mark up due at the end of that period) The TFCs are subordinated as to the payment of principal and profit.7 This represents repurchase agreement borrowings from other banks at rates ranging from 12.6 This facility is secured against a demand promissory note executed in favour of the State Bank of Pakistan.317.729.918 322.555 96. December 2012 1.207 119.00% per annum payable on a quarterly basis.910. In case of occurrence of default.340 88.309.377 30.992.716 324.120 1.888. the TFC holder will rank below the senior unsecured creditors and depositors and other creditors of the Bank.14.313 354.698 4.600 Subordination Issue date Rating Tenor Redemption Maturity Annual 2010Report 141 .435.436 83.690 121.non-remunerative Others Financial institutions Remunerative deposits Non-remunerative deposits 102.010. Unsecured Mark up Base Rate + 1. December 2004 AAEight years 3 equal semi-annual installments commencing 84th month after the issue date.537 61.760.709.Quoted.247.849 25.733 354.30% per annum (2009: 11.389 15.50% to 12.832.1 Particulars of deposits In local currency In foreign currencies 284.40% per annum) maturing by January 2011 (2009: July 2010).673 25.350.341.743.018.444.433.957 69.

567.068 (190) 6.Quoted.187 (603) 14.358 142 Annual2010 Report .Note 2010 2009 (Rupees in „000) Term Finance Certificates III . Unsecured Either of the following options with the holder: .146 (1.192 17 LIABILITIES AGAINST ASSETS SUBJECT TO FINANCE LEASE 7.581 Subordination Issue date Rating Tenor Redemption Maturity Mark up Term Finance Certificates IV . November 2013 1.Floating coupon of Base Rate + 2. November 2005 AAEight years 3 equal semi-annual installments commencing 84th month after the issue date.000 Subordination Issue date Rating Tenor Redemption Maturity 7.Fixed coupon of 15 percent per annum payable semi-annually in arrears The TFCs are subordinated as to the payment of principal and profit to all other indebtness of the bank.181 2010 2009 Not later Later than Over Not later Later than Over than one one and less five Total than one one and less five Total year than five years years year than five years years -----------------------------------------------------------(Rupees in '000)--------------------------------------------------------Minimum lease payments Financial charges for future periods Present value of minimum lease payments 3.878 - 5. Unsecured Mark up Base Rate + 1.584 - 12.000 5.959 (1.Private. December 2009 AAEight years 3 equal semi-annual installments commencing 84th month after the issue date.000.072 1.50 percent (Base Rate is defined as the simple average of the ask rate of the six months KIBOR prevailing on the first day of the start of each half yearly period and mark up due at the end of that period) The TFCs are subordinated as to the payment of principal and profit to all other indebtness of the bank.185) 8.032 2.322.998.788) 3.50 percent (Base Rate is defined as the simple average of the ask rate of the six months KIBOR prevailing on the first day of the start of each half yearly period and mark up due at the end of that period) .774 7.910 4.646 (736) 5.322. December 2017 4.570.578 (546) 3.

356 30.772 1.417 2.357.097 4.623 63.1 This represents amounts payable to brokers against purchase of shares.529 723.603) (1.142 900 (1.404.207 38.260 280.666) 774.1 This includes deferred tax in respect of impairment recognised in value of investment which has been written off in the books of the Bank.397.693 620.715 238.879.989) 993.076 10.155 710.943) (137) (111.738.056 44.2 29.386) (13.538) (1.319.350 37.2 Provision against off-balance sheet obligations Opening balance Exchange adjustment Charge for the year Closing balance 37.160 221.081.NET Deferred credits arising due to Difference between accounting book value of leased assets and lease liabilities Accelerated tax depreciation Loss on remeasurement of held for trading investment Surplus on revaluation of operating fixed assets Deferred debits arising due to Provision for doubtful debts Provision against other assets Provision against off-balance sheet obligations Impairment in the value of investment Unrealised loss on revaluation of investments classified as held for trading / transferred from held for trading to available for sale Leased assets Deficit on revaluation of securities 423. 19.912 (1.660 171.091. 19 OTHER LIABILITIES Mark-up / return / interest payable in local currency Mark-up / return / interest payable in foreign currencies Unearned commission and income on bills discounted Accrued expenses Payable against redemption of credit card reward points Security deposits against leases Exchange difference payable to the State Bank of Pakistan Payable to brokers Unrealised loss on forward foreign exchange contracts Provision against off-balance sheet obligations Workers' Welfare Fund Others 3.628 379.833 19.1 19.095 44.623 528 6.759 133.732.168) 369.601 3.314 (1.081 3.1 18.124.472) (327.899) (15.325 283.090 111.623 143 Annual 2010Report .194 1.207 51.983.167) (3.533 9.497 (10.246 18.424.1 19.419) 37.898 995.630.548 1.201) (638) (240.611 2.873.912 514 44.007 55. The tax benefit for this amount will be allowed upon disposal of these investments.Note 2010 2009 (Rupees in „000) 18 DEFERRED TAX LIABILITIES .165 457.547 4.

244.858 723.989 (37.349.011.154.000 624.2 Issued.500 6.156 (13.990) (13.298) 416.000 624.000 149.000 2.491.000 399.during the year 624.at the beginning of the year .Fixed assets .349.417 2.1 Authorised capital 2010 2009 Note 2010 2009 (Number of shares) (Rupees in „000) 2.300.997.750.533.143 2.156.726 (29.796 (15.250.063 13.994 Related deferred tax liability on surplus as at January 1 Deferred tax liability booked Related deferred tax liability in respect of incremental depreciation charged during the year 144 2010Annual Report .2 2.611 2. 10 each Ordinary shares Fully paid in cash .985) 2.20 SHARE CAPITAL 20.533.000 1.990) 636 7.128 (24.563 2.406.156.500 5.298) 137.000.500.000.809.during the year Issued as bonus shares .406.1 21.247. 10 each 23.250 1.128 (316.750.000 Ordinary shares of Rs.060) 3.244.250 6.786.406.000.NET OF TAX Surplus / (deficit) arising on revaluation of: .491.000.247.000 3.122 3. subscribed and paid up capital ordinary shares of Rs.469.000 19.809.063 13.250 1.605 585.563 SURPLUS ON REVALUATION OF ASSETS .994 201.500 7.300.873 378.605 3.000 574.750.545 723.611 2.244.250 724.194) 710.063 7.247.496.116 21.786.750.696) (13.000 23.063 7.250 21 225.906.at the beginning of the year .879 3.499.1 Surplus on revaluation of fixed assets Surplus on revaluation of fixed assets at January 1 Transferred to retained earnings in respect of incremental depreciation charged during the year Related deferred tax liability in respect of incremental depreciation charged during the year Surplus on revaluation of fixed assets recognised during the year Reversal of deficit on account of disposal of property Other reversal 3.250 724.745.500 6.Available for sale securities 21.695) (15.000 724.753 151.000.

077 58.117.974 46.528.101 5.261.200.843 39.109 4.738.559.330 Annual 2010Report .468.122 CONTINGENCIES AND COMMITMENTS 22.2010 2009 (Rupees in „000) 21.252.4 Other contingencies Claims against the Bank not acknowledged as debts 22.227.847 2.489 6.411) 329.5 Commitments in respect of forward lendings Forward repurchase agreement lendings Commitments to extend credit 22.1 Direct credit substitutes i) Government ii) Banking companies & other financial institutions iii) Others 22.quoted Sukuk bonds Surplus on: Quoted shares / units / certificates Related deferred tax asset / (liability) Share of deficit on associates' investments .847 44.947.129 2.6 Commitments in respect of forward exchange contracts Purchase Sale 32.235) (1.936.518.707.678) 111.221) 201.118.619) (30.3 Trade-related contingent liabilities Letters of credit Acceptances 22.577 354.113.200 3.972 2.505 3.075 35.179.385.213.031) 230.386 3.175 1.282) (26.374 (124.529 4.298 5.345.697 783.428) (10.2 Transaction-related contingent liabilities i) Government ii) Banking companies & other financial institutions iii) Others 22.061 19.293 10.925 145 875.343 (29.238.879 53.073 18.416 996.940.614 20.342 6.538 (207.2 Surplus / (deficit) on revaluation of available for sale securities Deficit on: Government securities Term finance certificates .920 7.125.classified as 'available for sale' 22 (616.493) 413.686.845) (316.985) (22.587 (318.140) (109.192.

896. .674 2.018 5. In addition to this.071 3.1) 23 DERIVATIVE INSTRUMENTS 250.402 9.376 11.10 Contingency for tax payable (note 30.923.273. Forward Rate Agreements or FX Options.033.648 142 37.726 35.792 730.023 5.900 million) which pertains to the Bank's Islamic Banking Division.320 395.930 24. 4.8 Commitments in respect of repo transactions Repurchase Resale 22.554. In order to mitigate this risk of adverse exchange rate movements the Bank hedges its exposure by taking forward position in inter bank market.261 5.539. the Bank's Treasury buys and sells derivative instruments such as: Forward Exchange Contracts Foreign Exchange Swaps Forward Exchange Contracts: Forward exchange contract is a product offered to customer backed by international trading contract.676.7 Commitments for the acquisition of fixed assets 22.514 1. These customers use this product to hedge themselves from unfavorable movements in foreign currencies. intra-day and overnight limits.398 25.000 The Bank at present does not offer structured derivative products such as Interest Rate Swaps.708 181.9 Other commitments Donation 22.2 24. 3.812.Note 2010 2009 (Rupees in „000) 22.780 1.184.726. the exposure is also managed by matching the maturities and fixing the counter parties.785 209. dealers.473 7.987 million (2009: Rs. Foreign Exchange Swaps: A Foreign exchange Swap (FX Swap) is used by the Bank if it has a need to exchange one currency for another currency on one day and then re -exchange those currencies at a later date.742 2.346 562.831 11. 24 MARK-UP / RETURN / INTEREST EARNED a) On loans and advances to: i) customers ii) financial institutions b) On investments in: i) held for trading securities ii) available for sale securities iii) held to maturity securities c) On deposits with financial institutions d) On securities purchased under resale agreements e) Profit earned on ijarah assets net of depreciation f) Interest income 24.043 863.373. Exchange rates and forward margins are determined in the "interbank" market and fluctuate according to supply and demand.000 22.710.339 367.530.370. However.1 These include mark-up earned of Rs.840 298.716 29.

146 Annual2010 Report .

203 145.847 43.790 1.7 36 28.833 363.2 11.009.883 108. electricity.954 147 35.710 1.109. travelling and subscription Others 15.NET Federal Government Securities .321 472.131 (468.674 MARK-UP / RETURN / INTEREST EXPENSED Deposits Securities sold under repurchase agreements Other short term borrowings Term Finance Certificates Brokerage and commission Others Financial Charges 18.385.Market Treasury Bills .771.405 23.2 11.966 532.636 60.693 189.352 156. etc.558 27 OTHER INCOME Gain on sale of fixed assets Postage.379 177.112 35.3 Annual 2010Report .420 468.212 214.638.303.169 8.Note 2010 2009 (Rupees in „000) 24. Legal and professional charges Communications Repairs and maintenance Stationery and printing Capital work-in-progress written off Advertisement and publicity Donations Auditors' remuneration Depreciation Amortisation of intangible assets Entertainment.801 28 ADMINISTRATIVE EXPENSES Non executive director fee & allowances Salaries.585 1. telex service charges etc.601 1.202 1.275 2.440 65.818 66.303 60.194 3.371.483) 209.555 1.834 1.998 1.033 27.062 195.277. Charge for defined benefit plan Contribution to defined contribution plan Rent.196 806. insurance.317 24.854. Provision no longer required written back Custody services 25.018.803 189. etc.300 662.658.569 2. vehicle running expenses.032 173.979.612 221. taxes.1 28.299 12.832 1.092 639.373 12.751 5.207 320.878 26 GAIN ON SALE OF SECURITIES .657 646.339 497.848 51.404.726) 29.872 170.090 1.000 690.665 67.443 909 1.Pakistan Investment Bonds Shares .354 4.231.631.2 Profit earned on ijarah assets Lease rentals earned Depreciation for the year 25 678.listed Sukuk Bonds 64 1.021 14.056 11.709.423 383.578 21.673.210.570 14.570 13.672 99.400 (64.411 1.522 472.143 587. allowances.479.306.648 94.

454 4.137) 191.870 925 2.Cantt Public School Institute of Business Administration Relief Fund for Tameer-e-Pakistan Chief Minister of Punjab Governor of Punjab Flood Relief Fund None of the directors or their spouses had any interest in the donees.127 1.853 9.210 4.000 10.226 million.968 10.665 16.365) 756.691 (179. taxability of profit on government securities. In respect of tax year 2010.401) (936.000 2.210 4. 1971. For all assessments finalised upto tax year 2009.160 (537.500 51.1 25.860 1.081 (71.570 29.735) 898.570 850 720 11.000 12.411 3. Income Tax Appellate Tribunal (ITAT) and High Court of Sindh.1 As per the Worker's Welfare Ordinance. 141.194 63. the Bank is liable to pay Workers' Welfare Fund @ 2% of accounting profit before tax or declared income as per the income tax return.000 5.Note 2010 2009 (Rupees in „000) 28.483 535.201 14. The management is confident that this matter will be decided in favour of the Bank and consequently has not made any provision in respect of this amount.071. bad debts written off and disallowances relating to profit and loss expenses.375 13.763 (262.1 Donations Marie Adelaide Leprosy Center. The management's appeal in respect of this add-back is currently pending with the Commissioner of Inland Revenue (Appeals).674) 181.562 1. 28.260 79.155 276. Larkana Publician Alumni Trust . the tax authorities have disallowed certain expenditure on account of nondeduction of withholding tax resulting in additional demand of Rs. whichever is higher. These issues mainly relate to addition of mark-up in suspense to income. 30 TAXATION For the year Current Deferred For prior years Current Deferred Share tax of associates 845.2 Auditors' remuneration Audit fee Half yearly review Special certifications and sundry advisory services Out-of-pocket expenses Fee for audit of foreign branches 29 OTHER CHARGES Penalties imposed by the State Bank of Pakistan Workers' Welfare Fund 29.056) (152. adequate provision has been made by the Bank in these consolidated financial statements. 148 Annual2010 Report .382 1.165 76.585 850 720 11.000 27.568 30.1 Bank The income tax assessments of the Bank have been finalised upto and including tax year 2010. Matters of disagreement exist between the Bank and tax authorities for various assessment years and are pending with the Commissioner of Inland Revenue (Appeals).

30.2 Subsidiary
The income tax returns for tax years 2005, 2006, 2007, 2008, 2009 and 2010 have been filed under the Universal Self Assessment

Scheme, which provides that return filed is deemed to be an assessment order. The returns may be selected for detailed audit within five years. The Income Tax Commissioner may amend assessment if any objection is raised during audit.

2010 2009 (Rupees in „000)

30.3 Relationship between tax expense and accounting profit Profit before taxation Tax at the applicable rate of 35% (2009: 35%) Effect of: - income chargeable to tax at reduced rates - permanent differences - tax effect of income assessed under final tax regime - income exempt from tax - tax charge pertaining to overseas branches - tax for prior years - share of profit / loss of associates either exempt from tax or taxed at reduced rates - Exchange adjustment on provision against off balance sheet items - Deffered tax asset not recognised - others Tax expense for the year
31

2,065,110 722,789 (58,521) 38,927 17,559 (71,056) 217,357 19,943 11,129 898,127

437,664 153,182 (62,352) 56,272 18,810 573 2,542 (179,674) 428,010 89,106 29,099 535,568

BASIC / DILUTED EARNINGS PER SHARE Profit after taxation for the year 1,194,553 (97,904)

(Number of shares in thousand) Weighted average number of ordinary shares 1,349,156 (Rupees) Basic / Diluted earnings per share 0.89 (0.08) 1,267,533

2010

2009

(Rupees in „000) 32

CASH AND CASH EQUIVALENTS Cash and balances with treasury banks Balances with other banks Call money lendings 41,197,841 16,180,533 4,773,903 62,152,277 35,056,025 22,722,927 3,710,396 61,489,348

33

CREDIT RATING
PACRA has assigned a long term credit rating of AA [Double A] and a short term credit rating of A1+ (A one plus) to the Bank as at

June 2010 (2009: AA [Double A]) for long term and A1+ [A one plus] for short term).
Annual 2010Report

149

2010

2009

(Number of employees) 34

STAFF STRENGTH Permanent Temporary / On contractual basis Bank's own staff strength at the end of the year Outsourced Total staff strength 6,876 695 7,571 2,438 10,009 6,579 883 7,462 2,089 9,551

35

DEFINED BENEFIT PLAN

35.1 Principal actuarial assumptions
The latest actuarial valuation of the Bank's gratuity scheme was carried out as at December 31, 2010. Projected unit credit method, using the following significant assumptions, was used for the valuation of the defined benefit plan:

2010

2009

Discount factor used Expected rate of return on plan assets Expected rate of salary increase Normal retirement age

14.00% 12.00% 14.00% 60 Years
2010

14.00% 14.00% 14.00% 60 Years
2009

(Rupees in '000)

35.2 Reconciliation of payable to defined benefit plan Present value of defined benefit obligations Fair value of plan assets Net actuarial losses not recognised 1,002,268 (677,430) (324,838) 802,966 (696,403) (106,563) -

35.3 Movement in defined benefit obligation Obligations at the beginning of the year Current service cost Interest cost Benefits paid Actuarial (gain) / loss on obligation Obligations at the end of the year 802,966 125,207 112,415 (44,217) 5,897 1,002,268 737,369 115,249 110,605 (27,527) (132,730) 802,966

35.4 Movement in fair value of plan assets Fair value at the beginning of the year Expected return on plan assets Contributions Benefits paid Actuarial gain / (loss) on plan assets Fair value at the end of the year 150 Annual2010 Report 696,403 97,497 145,379 (44,217) (217,632) 677,430 468,272 70,241 189,352 (27,527) (3,935) 696,403

Note

2010

2009

(Rupees in „000)

35.5 Plan assets consist of the following: Ordinary shares Term Finance Certificates Term Deposit Receipts Pakistan Investment Bonds Units of mutual funds Cash and bank 104,423 92,847 163,153 18,844 144,995 153,168 677,430 27,000 72,574 278,853 18,844 91,596 207,536 696,403

35.6 Movement in payable to defined benefit plan Opening balance Charge for the year Bank's contribution to fund made during the year Closing balance 145,379 (145,379) 189,352 (189,352) -

35.7 Charge for defined benefit plan Current service cost Interest cost Expected return on plan assets Actuarial losses Past service cost 125,207 112,415 (97,497) 5,254 145,379 (120,135) 115,249 110,605 (70,241) 32,324 1,415 189,352 66,306

35.8 Actual return on plan assets 35.9 Historical information
2010
--------------------------------

2009

2008
(Rupees in '000)--------------------------------

2007

2006

Defined benefit obligation Fair value of plan assets Deficit Experience adjustments on plan liabilities

1,002,268 677,430 (324,838) (5,897)

802,966 696,403 (106,563) 132,730 (3,935)

737,369 468,272 (269,097) (68,203) (28,212)

546,346 352,811 (193,535) (87,394) (2,673)

366,308 250,757 (115,551) (45,151) (7)

Experience adjustments on plan assets (217,632) 36 DEFINED CONTRIBUTION PLAN

The Group operates an approved provident fund scheme for all its permanent employees to which both the Group and employees contributes @ 8.33% of basic salary in equal monthly contributions.
During the year, the Group contributed Rs. 177.275 million (2009: Rs. 156.832 million) in respect of this fund.
Annual 2010Report

151

37

COMPENSATION OF DIRECTORS AND EXECUTIVES
Chief Executive 2010 2009
----------------------------------------

Directors 2010 2009
(Rupees in '000)----------------------------------------

Executives 2010 2009

Fee Bonus Managerial remuneration Post employment benefits Rent and house maintenance Utilities Medical allowance

10,185 11,917 1,619 4,599 1,150 35 29,505

1,287 9,718 1,286 3,719 930 34 16,974 2

15,751 15,751 4

14,354 14,354 4

261,581 1,105,802 132,044 356,045 83,501 228 1,939,201 869

128,437 952,333 105,915 298,395 70,513 1,555,593 718

Number of persons

2

The Chief Executive and certain Executives have been provided with the free use of cars and household equipments as per Group's policy. 38 FAIR VALUE OF FINANCIAL INSTRUMENTS

38.1 Fair value is the amount for which an asset could be exchanged, or a liability settled, between knowledgeable willing parties in an arm's length transaction. The fair value of traded investments is based on quoted market prices, except for tradable securities classified by the Bank as 'held to maturity'. These securities are being carried at amortised cost in order to comply with the requirements of the State Bank of Pakistan. Fair value of unquoted equity investments is determined on the basis of break up value of these investments as per the latest available audited financial statements.
Fair value of fixed term loans, other assets, other liabilities and fixed term deposits cannot be calculated with sufficient reliability due to absence of current and active market for such assets and liabilities and reliable data regarding market rates for similar instruments. The provision for impairment of loans and advances has been calculated in accordance with the Group's accounting policy as stated in note 5.4 to these consolidated financial statements.

The repricing profile, effective rates and maturity are stated in note 42 to these consolidated financial statements.

In the opinion of the management, the fair value of the remaining financial assets and liabilities are not significantly different from their carrying values since assets and liabilities are either short term in nature or in the case of customer loans and deposits are frequently repriced.
2010 2009 Book value Fair value Book value Fair value ------------------------------ Rupees in '000------------------------------

38.2 Off-balance sheet financial instruments Forward purchase of foreign exchange Forward sale of foreign exchange 32,707,614 20,936,061 32,437,045 19,518,293 20,589,124 10,528,925 19,474,475 10,540,457

152 Annual2010 Report

212 40.448.591.585.069 19.995.110 411.882 (392.98% 13. associated companies with or without common directors.27% 18.73% 17.1 Deposits Balance at the beginning of the year Placements during the year Withdrawals during the year Balance at the end of the year 7.558.418 1.598 (29.820 .230.163 40.155.014 2.742.236 4.509) (11.034 25.539 8.662.835.42% 57.33% 8.498 937.05% 12.523.803.882 17.985 .416. Remuneration to executives is determined in accordance with the terms of their appointment.787 44.612.338 86.652) 224.603 756.047 151.256 148.598 592.848.419.228. subsidiary company.108.49% 16.669 7.584 319.369.872 1.616 5.829) 17.252 10.947 (61.089 715.755) (45.187 26.263 471.55% 14.017 25.613 18 2.319.294.361.297 606.2.360 56.142 .429) 18 1.227.710.933 365. as those prevailing at the time for comparable transactions with unrelated parties and do not involve more than a normal risk.879 5.313.794.267 15.437 367.434.517.072 1.796 .864 14.479.670.664 389.716 .820 28.448 .561. Banking transactions with the related parties are executed substantially on the same terms. retirement benefit funds and directors and key management personnel and their close family members.064) 28.603 6.672 675.550.610.065.441 10. including mark-up rates and collateral.975.799 28.07% 10.071 23.730 82.434.101) (594.467.058 - 42.06% 9.3.053 1.30% 16.3.942.074.731 12.848. Contributions to and accruals in respect of staff retirements and other benefit plans are made in accordance with the actuarial valuations / terms of the contribution plan.165. Details of transactions with related parties and balances with them as at the year-end are as follows: 2010 Group Strategic Directors Management Companies Associates Investments Personnel --------------------------------------- Key Total (Rupees in '000) 40.913 342.452 21.39 SEGMENT DETAILS WITH RESPECT TO BUSINESS ACTIVITIES The segment analysis with respect to business activity is as follows: Trading & Sales Corporate / Retail Commercial Total Brokerage Banking ------------------------------Rupees in '000-----------------------------Retail Banking 2010 Total income Total expenses Net income Segment assets Segment non-performing loans Segment provision required against loans and advances Segment liabilities Segment return on assets (ROA) (%) Segment cost of funds (%) 2009 Total income Total expenses Net income Segment assets Segment non-performing loans Segment provision required against loans and advances Segment liabilities Segment return on assets (ROA) (%) Segment cost of funds (%) 9.730 9.452.561.135 26.456.871 1.30% 17.63% 10.591 32.622.047.479.(57.780.757.421 4.912.948 26.873.726 344.727 Annual 2010Report 153 .541.390 44.450.8.260) 132.027.815 380.47% 12.162 10.918.28% 9.483 390.499 437.199.2.124 40.250 (578.312 98 10.683 22.06% 40 RELATED PARTY TRANSACTIONS Parties are considered to be related if one party has the ability to control the other party or exercise significant influence over the other party in making financial or operational decisions and include major shareholders.

955 2.768.616 (1.926 .531 11.334 (33.890.903 120.Other related parties Fixed deposit accounts .890.000 .Other related parties Current accounts .769.914 60.187 (11.476 (10.804) 50.1.570 64.960.609 155.930) (196.542 27.686 400.949 120.000 5.741.296 1.161 5.769 .883.232 90.973) 149.7 Contingencies and commitments Letter of credit and acceptance outstanding Guarantees outstanding 40.096 2.(33.014 40.267.564 122.000 5.(13.000 6.800 1.741.000 1.260) .704) 2.949 40.000 .702.256.096 558.511 .260) - 40.098.511) - Note 2010 2009 (Rupees in „000) 40.098.271.024.000 400.5 Call lendings / Reverse Repo Balance at the beginning of the year Placements during the year Withdrawals during the year Balance at the end of the year 100.300.2 Advances Balance at the beginning of the year Disbursements during the year Repayments during the year Balance at the end of the year 7.915 532.6 Advances Running finance .(460.602.474 499.3 Investments Balance at the beginning of the year Investments during the year Withdrawals during the year Balance at the end of the year 253.918 1.057.334 .686.753 60.2010 Group Strategic Directors Management Companies Associates Investments Personnel --------------------------------------- Key Total (Rupees in '000) 40.8 Customer accounts PLS accounts .057 .(13.Other related parties 154 Annual2010 Report 1.Other related parties 40.012 10.095 (62.511 .392) 1.702.13.926 31.602.13.578 25.207.937.690 165.769 (263.Other related parties Long term loans .31.207.511) 100.856.339) 9.932.734) 120.4 Call borrowings / Repo Balance at the beginning of the year Borrowing during the year Repayments during the year Balance at the end of the year 1.861 112.

the Chief Executive and certain Executives are provided with Bank maintained car.076 824 6.512 245.954 32.12 The key management personnel / directors compensation are as follows: Salaries and allowances 577.757 318. Annual 2010Report 155 .877 1.703 - In addition.11 With other related parties Capital gain on redemption of units of USAF Capital gain on sale of shares of UBL Loss on redemption of units of UMMF / UGIF Contribution to employees provident fund Payment for books of Ikram Majeed Sehgal Provision made during the year in respect of strategic investments Mark-up income on financing to group company 40. 41 CAPITAL ADEQUACY 41.10 With associated companies Insurance premium paid to Alfalah Insurance Company Limited Mark-up income on advances Mark-up expense on deposits Charge for security services to Security and Management Services (Private) Limited and Wakenhut Pakistan (Private) Limited Payment to Wateen Telecom (Private) Limited for purchase of equipment and maintenance charges Provision made during the year in respect of investment in Warid Telecom (Private) Limited Provision made during the year in respect of investment in Wateen Telecom Limited 40. It is the policy of the Group to maintain a strong capital base so as to maintain investor. so that it could continue to provide adequate returns to shareholders by pricing products and services commensurately with the level of risk.964 540.215 343.9 Balances with other banks .963 62.1 Capital Management The objective of managing capital is to safeguard the Group's ability to continue as a going concern.Note 2010 2009 (Rupees in „000) 40.Balance with United Bank Limited 40. creditor and market confidence and to sustain future development of the business.916 136.553 182.751 423. The impact of the level of capital on shareholders‟ return is also recognised and the Group recognises the need to maintain a balance between the higher returns that might be possible with greater gearing and the advantages and security afforded by a sound capital position.675 930.641 177.524 1.705.689 702.035 207.832 2.275 53.230 36.755 322.719 156.824 113.353 5.

25 % of total risk weighted assets). Collaterals if any. which consists of short term subordinated debt solely for the purpose of meeting a proportion of the capital requirements for market risks. foreign exchange translation reserves etc. are hence applied at adjusted exposures. As the Group carries on the business on a wide area network basis. are used as credit risk mitigant after applying appropriate haircuts under the Comprehensive Approach. 50% of other deductions e. where available. 156 Annual2010 Report . In addition. are applied using the assessments by various External Credit Assessment Institutions (ECAIs) and aligned with appropriate risk buckets. The total risk-weighted exposures comprise the credit risk.. after deductions for certain specified items such as book value of intangibles. 50% of other deductions noted above are also made from Tier II capital.Goals of managing capital The goals of managing capital of the Group are as follows: To be an appropriately capitalised institution. majority and significant minority investments in insurance and other financial entities. On and off-balance sheet assets in the banking book are broken down to various asset classes for calculation of credit risk requirement. The Group's operations are categorised as either trading book or banking book and risk-weighted assets are determined according to specified requirements of the State Bank of Pakistan that seek to reflect the varying levels of risk attached to on-balance sheet and offbalance sheet exposures. The total of Tier II and Tier III capital has to be limited to Tier I capital. general provisions for loan losses (up to a maximum of 1. External ratings for assets. cash. Risk weights notified. and Availability of adequate capital at a reasonable cost so as to enable the Group to operate adequately and provide reasonable value addition for the shareholders and other stakeholders. Otherwise. The Group currently does not have any Tier III capital. share premium. includes subordinated debt subject to a maximum of 50% of total Tier I capital and fulfilment of specified criteria laid down by the State Bank of Pakistan. Collaterals used include: Government of Pakistan guarantees. bank and corporate guarantees and other debt securities that fall within the definition of eligible collaterals and also fulfil other specified criteria under the relevant capital adequacy guidelines. 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). Tier II capital. The calculation of Capital Adequacy enables the Group to assess the long-term soundness. Tier III supplementary capital. shares. There has been no material change in the Group‟s management of capital during the period. which includes fully paid-up capital. considering the requirements set by the regulators of the Banking markets where the Group operates. gold. wherever credit risk mitigation is available. 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. reserves (excluding foreign exchange translation reserves) and unappropriated profits (net of losses) etc. market risk and operational risk. - Group’s regulatory capital analysed into three tiers Tier I capital.g. government securities. the exposures are treated as unrated and relevant risk weights applied. lien on deposits. Maintain strong ratings and to protect the Group against unexpected events. it is critical that it is able to continuously monitor the exposure across the entire Group and aggregate the risks so as to take an integrated approach / view.

241.915) (488.570) (694.961.146) 8.491.473 2.615.610 25.767.406 1.255) 13.442 (23. Note 2010 2009 (Rupees in „000) Regulatory capital base Tier I capital Fully paid-up capital Balance in share premium account . 2010 The capital to risk weighted assets ratio.435 2.238.527 (118.020 (6.001 6.749.491.418) 13.326.41.132 (72.431 (121.146) 17.114.598.552 763.066 1.693) (27.610 858.739 667.2 Capital adequacy ratio as at December 31.1(3)(iii) of SBP Basel II Framework Other deductions (represents 50% of the majority or significant minority investments in insurance and other financial entities) Total Tier I Capital Tier II Capital Subordinated debt (upto 50% of total Tier 1 capital) General provisions for loan losses subject to 1.591 820.926) Annual 2010Report 157 .625.563 1.277) 9.386.380.479 5.968.567.567) (262.25% 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 (a) (118.459 26.277) 17. calculated in accordance with the State Bank of Pakistan's guidelines on capital adequacy.563 1.associate Reserves (excluding foreign exchange translation reserves) Unappropriated / unremitted profits (net of losses) Non-controlling interest Less: Book value of intangibles Shortfall in provisions required against classified assets irrespective of any relaxation allowed Deductions in respect of investment in TFCs of other banks in excess of limits prescribed in Appendix 1.821 (121. using Basel II standardised approaches for credit and market risks and basic indicator approach for operational risk is presented below.

498 10.862.038 83.42% (b) [ a / b * 100 ] Exposures JCR-VIS - PACRA S&P Sovereigns other than PKR claims PSEs Banks Corporates ü ü ü ü ü ü ü - ü - ü - ü ü ^The State Bank of Pakistan through letter no.007 9.081.973 1.540 8.680 5.043 6.693.322 10.312 41.431 249.690 950.200 2.311 13.096.634 1.355.161 810.668 569.810.3 Types of exposures and ECAIs used Moody’s & Fitch CRAB & CRISL^ (a) 1.787 388.880.448 12.840.899 2.450 1.313.628 81.335 30.176.061 25.352 10.707 3.451.298.595 3.011 185.543.Capital requirements Risk Weighted Assets 2010 2009 2010 2009 ------------------------------ Rupees in '000------------------------------ Risk-weighted exposures 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 Market risk Portfolios subject to standardised approach Interest rate risk Equity position risk Foreign exchange risk Operational risk TOTAL Capital adequacy ratio Total eligible regulatory capital held Total risk weighted assets Capital Adequacy ratio 41.075 143. BSD/BAI-2/201/1200/2009 dated December 21.115 59.732 14.313. 158 Annual2010 Report .654 854.874 3.232 3.960 386.675 743.110 1.384.448 24.225 141.438 2.397.563 8.941.625.341 14.246. The Group uses these ECAIs to rate its exposures denominated in Bangladeshi currency on certain corporates and banks incorporated in Bangladesh.898.106.725 129.606 8.556.322 213.804 524.521 108.433.402.025.715 6.896 9.190 294.220 208.440 17.235.501.453 249.174 445.039 5.704.572 609.809 (b) 11.446 11.849.454.644 1.301 917.369.613 27.742 4.324 34.338 2.987.698.567.855.068 33.147.331.840.949.043.688 20.479 213.472.647.496 13.439. 2009 has accorded approval to the Bank for use of ratings assigned by these agencies.28% 26.400 513.

018.971.492.961.568 4.696 13.6 2.826.984.280 258.5 1 2 3.284 685.583.778 . for Pillar 2 disclosures ICAAP exercise is conducted.321.627 4.PKR claims less than three months Corporates Corporates Corporates Corporates Retail portfolio Unrated Total *CRM= Credit Risk Mitigation 4.210 194. In the Bank's experience.321.2.806.755 1.488.507.165 207.325.168 64. RMD is the organisational arm performing the functions of identifying.919 2.880.356 2.186 127.571 149.209.062.049 12.569.097.121 1.281.836.352. measuring.503.3.378 3.581.378 144 11.453 46.361 .311.960 4. many steps have been taken by the Bank.411. liquidity risk and operational risk as evidenced by its Board approved “Risk Management Policy" and "Risk Management & Internal Control” manual.958 15.934. a key to effective credit risk management is a well thought out business strategy.361 11.488 47.806. Market and Operational risks.386.853.111 73.832. Annual 2010Report 159 .764 .444.363 693.184 49.918.861. Moreover. - As a policy the reporting line of the risk management function has been kept completely independent of the businesses divisions and Credit Group.2.791.2.442 78. Following is the governance structure and important policies on Risk Management of the Bank: - The Board of Directors through its sub-committee called „Board Risk Management Committee‟ (BRMC) oversees the overall risk of the Bank.969.5 1 1.010 11.503.684. in order to enhance data integrity and the reliability regarding MCR (Minimum Capital Requirement) calculation. In order to meet the requirement.986 1.480 10. The Bank has acquired Temenos T24 banking system as its core banking solution and its Risk Management system called T-Risk will be used for managing Credit.764 10.11.431 5.284 11.504.797 3.952 496.295.663 11.1 Credit risk Credit Risk Management processes encompass identification.136 .891. automation of CAR (Capital Adequacy Ratio) calculation is in process and is functional in significant branches of the Bank.FCY claims less than three months Banks . monitoring and control of the credit exposures.537 6.969 9. - An independent risk review function exists at the Bank in the form of Internal Audit Group that reports directly to the Board Audit Committee.645 12.935.310 177.749 685. monitoring and controlling the various risks and assists the Apex level committee and the various sub-committees in conversion of policies into action.159 6.4 5.553 5.467 3. in line with its ambition to bring maximum sophistication to risk management function. The Bank's focus over the coming years will be to further enhance risk models.149 13.161 5.549.493 310. The Bank has extensively pursued the implementation of Basel II in the Bank.311.683.376 72. market risk. Progress has been made in implementation of Risk based Pricing & Approval Grids in the Bank.951.145.4.553.895 46.190.5 1.397.462.066 42 RISK MANAGEMENT The Bank has in place an approved integrated risk management framework for managing credit risk.664. assessment.Credit exposures subject to standardised approach .742 250.929 1.901.778 4. processes and systems infrastructure.104 4.975 41.588 41.520 12.180 3. measurement.363 693.071.347.942 2.873.615 102.190.270 1.3 4.256 6. Moreover.281.3 4.488 .884.180 5.on balance sheet exposures Rating category Amount outstanding 2010 Deduction CRM* Net Amount Amount outstanding 2009 Deduction CRM* Net Amount Exposures Sovereigns other than PKR claims PSEs Banks Banks Banks . 42.2.136 47.

and identifies weakening accounts relationships and reports it to the appropriate authority with a view to not only arrest deterioration but also to pre-empt any regulatory classification. The System now also has the capability to auto generate alerts on accounts showing weakness in financials and hence requiring a more vigilant monitoring. the syst em is backed by secured database with backup support and is capable of generating MIS reports providing snapshot of the entire portfolio for strategising and decision making. Internal rating based portfolio analysis is also conducted frequently. Moreover. Simultaneously. weaknesses and vulnerabilities. The Bank has also developed Facility Rating System in line with SBP‟s guidelines. geography.Risk Management Division. Its credit evaluation system comprises of well -designed credit appraisal. Credit Monitoring Division (CMD) keeps a watch on the quality of the credit portfolio in terms of its strengths. The system is continuously reviewed for best results in line with the State Bank of Pakistan‟s guidelines for Internal Credit Rating. industry.1 Credit Risk . Special attention is paid by the management in respect of non-performing loans.1. The current focus is on augmenting the Bank‟s abilities to quantify risk in a consistent. maturity and large exposure. A detailed procedural manual specifying return-based formats. 42.General Disclosures Basel II Specific Bank Alfalah Limited is using The Standardised Approach (TSA) of SBP Basel II accord for the purpose of estimating Credit Risk Weighted Assets. sanctioning and review procedures for the purpose of emphasising prudence in lending activities and ensuring the high quality of asset portfolio. The Bank has built-up and maintained a sound loan portfolio in terms of well-defined Credit Policy approved by the board of directors. information technology capabilities and risk governance structure to meet the requirements of the advanced approaches as well. The Bank manages its portfolio of loan assets with a view to limit concentrations in terms of risk quality. which is capable of quantifying counterparty risk in accordance with the best practices. constitute the important risk management measures the bank is engaged in for mitigating these exposures. A sophisticated Internal Credit Rating System has been developed by the Bank. A Centralized Credit Administration Division under Operations Group is working towards ensuring that terms of approval of credit sanctions and regulatory stipulations are complied. Special Asset Management (SAM) Department is functional and handles this responsibility in compliance with the regulatory requirements. which will generate ratings of transactions and provide estimated LGD (Loss Given Default). as per State Bank of Pakistan Guidelines. For credit risk. Further the compliance of regulatory & internal limits is also monitored and any deviations are ratified from the competent authorities. At Bank Alfalah Limited. procedural manual has been developed. Credit Risk Management Committee has been set up to ensure implementation of the credit risk policy / strategy / credit plan approved by the Board and to monitor credit risk on a bank-wide basis and ensure compliance with limits approved by the Bank.The Bank. The Head of Credit Risk Department reports directly to the General Manager (GM) . the management has laid down the road-map to move towards the implementation of BaselII advanced approaches. 2008 with the standardised approach. As part of prudential practices the Risk Management Division conducts pre-fact validation of major cases from integrated risk point of view. which also incorporates a comprehensive system of cross -checks for data accuracy. The implementation on System. CMD maintains a Watchlist of such accounts which is generated on quarterly basis and is also reviewed by RMD. processes have been set for fine-tuning systems & procedures. methodologies and processes for deriving Credit Risk Weighted Assets in accordance with the SBP Basel II Standardised Approach is in place and firmly adhered. Under TSA Banks are allowed to take into consideration external rating(s) of counter-party(s) for the purpose of calculating Risk Weighted Assets. will take place in due course. all documentation including security documentation is regular & fully enforceable and all disbursements of approved facilities are made only after necessary authorization by CAD. The Risk Management Division also monitors the NPL portfolio of the Bank and reports the same to BRMC. reliable and valid fashi on which will ensure advanced level of sophistication in the Credit Risk measurement and management in the years ahead. The system takes into consideration qualitative and quantitative factors of the counter-party and generates an internal rating vis-à-vis anticipated customer behaviour. The adherence to Risk-appetite statement approved by the Board is monitored by RMD. which shall provide a sophisticated platform for prudent risk management practices. 160 Annual2010 Report . adherence to Basel II accord. The Credit Risk Management comprises of the Credit Risk Department that looks after all the aspects of credit risk and conducts portfolio analysis and stress testing on a regular basis. Proactive credit-risk management practices in the form Integrated Bank-wide Risk Management and Internal Control Framework. has migrated to Basel II as on January 1.

are reduced from the exposure to compute the capital charge based on the applicable risk weights.2 Collateral valuation and management As stipulated in the SBP Basel II guidelines. to produce volatility -adjusted amounts for collateral. collateral is taken in line with the policy. 42. the Bank reduces its credit exposure to a counterparty when calculating its capital requirements to the extent of risk mitigation provided by the eligible financial collateral as specified in the Basel II guidelines. the security to be taken is defined in the product policy for the respective products. The State Bank of Pakistan through its letter number BSD/BAI-2/201/1200/2009 dated December 21.2 Disclosures for portfolio subject to the Standardised Approach & Supervisory risk weights in the IRB Approach-Basel II specific 42.3.1. Annual 2010Report 161 .2. cash collateral. For exposures with a contractual maturity of less than or equal to one year.3. In case of corporate and small and medium enterprises financing. the Bank uses the comprehensive approach for collateral valuation.42. loan against shares etc.1. For facilities provided as per approved product policies (retail products.1. In line with Basel II guidelines.). 42. fixed assets are generally taken as security for long tenor loans and current assets for working capital finance usually backed by mortgage. JCR-VIS. These products are offered in line with the SBP prudential regulations and approved product notes which also deal with types of collateral.1.3. charge on receivables may also be taken. short-term rating given by approved Rating Agencies is used. TDRs.1 Credit risk mitigation policy The Bank defines collateral as the assets or rights provided to the Bank by the borrower or a third party in order to secure a credit facility. SSC/DSCs. The decision on the type and quantum of collateral for each transaction is taken by the credit approving authority as per the credit approval authorisation approved by the Board of Directors. Fitch and Standard & Poors. specified securities and pledged commodities. Under this approach. For project finance. the lower rating is considered and where there are three or more ratings the second . The Bank would have the rights of secured creditor in respect of the assets / contracts offered as security for the obligations of the borrower / obligor. These adjustments. 42.3 Types of collateral taken by the Bank Bank Alfalah Limited determines the appropriate collateral for each facility based on the type of product and counterparty.1 External ratings SBP Basel II guidelines require banks to use ratings assigned by specified External Credit Assessment Agencies (ECAIs) namely PACRA.1. The Bank uses these ECAIs to rate its exposures denominated in Bangladeshi currency on certain corporates and banks incorporated in Bangladesh.lowest rating is considered. in order to cover the entire exposure Personal Guarantees of Directors are also obtained by the Bank. long-term rating is used.3 Disclosures with respect to Credit Risk Mitigation for Standardised and IRB approaches-Basel II specific 42.1. security of the assets of the borrower and assignment of the underlying project contracts is generally obtained. Housing loans and automobile loans are secured by the security of the property / automobile being financed respectively. For retail products. also referred to as „haircuts‟. valuation and margining. The Bank also offers products which are primarily based on collateral such as shares. Moodys. the Bank makes adjustments in eligible collaterals received for possible future fluctuations in the value of the collateral in line with the requirements specified by SBP guidelines. The Bank uses external ratings for the purposes of computing the risk weights as per the Basel II framework. 2009 has accorded approval to the Bank for use of ratings assigned by CRAB and CRISL. whereas for long-term exposure with maturity of greater than one year. The valuation of the properties is carried out by an approved valuation agency. Additional security such as pledge of shares. Where there are two ratings available. Moreover.

984.37% 2.099 7.855.55% 0.21% 3.472.750.51% 13.797 872.62% 16.846.63% 0.64% 1. Gold.70% 0.33% 1.90% 1.70% 0. the SBP has prescribed regulatory limits on banks‟ maximum exposure to single borrower and group borrowers.4 Segmental information 42.4.975.13% 1.634.795 4.143 7.00% 1.013 6.52% 0.100 13.523 108.533 33.423.669.514 2.00% Advances (Gross) (Rupees Percent in '000) Agribusiness Automobile & Transportation Equipment Chemical and Pharmaceuticals Cement Communication Electronics and Electrical Appliances Educational Institutes Financial Fertilizers Food & Allied Products Glass & Ceramics Ghee & Edible Oil Housing Societies / Trusts Insurance Import & Export Iron / Steel Oil & Gas Paper & Board Production and Transmission of Energy Real Estate / Construction Retail / Wholesale Trade Rice Processing and Trading/ Wheat Sugar Shoes and Leather garments Sports Goods Surgical Goods Textile Spinning Textile Weaving Textile Composite Welfare Institutions Individuals Others 16.69% 3.17% 0.632 650 5.099.16% 0.17% 2.589 6.021 1.450 201.817 1.057.5 Credit concentration risk Credit concentration risk arises mainly due to concentration of exposures under various categories viz.827.41% 1.283 4.14% 1.336.25% 1.492 627.454.230.132 12.34% 1.37% 3.326.18% 2. In general.267 1.017.511.496.94% 2.526 2.180. Within credit portfolio.595 1.023 2. certain debt securities rated by a recognised credit rating agency.508 1.764.711 1.932. for Capital calculation purposes.706 7.138 62.1.40% 2.01% 1.92% 6.788 373. as a prudential measure aimed at better risk management and avoidance of concentration of risks.957 947.636 80.69% 1.26% 1.385.226 2.41% 0.22% 6. the Bank considers all types of financial collaterals that are eligible under SBP Basel II accord.00% 4.70% 100.3.878 13.738 354.15% 0.62% 0.581.306.911.990 1.00% 162 Annual2010 Report .426 31.350 2.224.22% 0.395.991 1.53% 1.92% 0. Additionally.38% 0. This includes Cash / TDRs. securities issued by Government of Pakistan such as T-Bills and PIBs.453 1.690 0.53% 1.752 2.582.487.1.507.940.914 4.507 10.230.09% 1.614.093 34.738 6.145 7.13% 0.349. the newly developed Internal Rating System allows the Bank to monitor risk rating concentration of counterparties against different grades / scores ranging from 1 – 12 (1 being the best and 10 – 12 for defaulters).860.01% 1.374.498 148.07% 0.052 3.00% 1.454 11.770 947.10% 3.684 352.79% 22.55% 1.464.064 109.10% 100.17% 0.321.025 217.022 20.826.791 1. mutual fund units where daily Net Asset Value (NAV) is available in public domain and guarantees from certain specified entities. in order to restrict the industry concentration risk. geography.246 7.21% 0.537 16.37% 2.267 155.043 1.247 2.57% 0.27% 4. industry.084 2.3.158 17.123.10% 1.514.244.11% 0.264 3.02% 0.252.095.54% 0.540 1.10% 0.877 6.37% 0.99% 0.646 0.029 28.956 24.469 750.384.399. National Savings Certificates.581 791.454.518 1.49% 12.11% 2.4 Types of eligible financial collateral For credit risk mitigation purposes.047.313 8.615 163.822. 42.355 586.042.878 82.283.27% 0.145 44.212.00% Contingent liabilities * (Rupees Percent in '000) 69.553 2.88% 3. in line with the SBP Basel II requirements.53% 0.431 24.991. the Bank recognises only eligible collaterals as mentioned in the SBP Basel II accord.41% 3.03% 31.528.10% 0.598. BAL‟s annual credit plan spells out the maximum allowable exposure that it can take on specific industries.07% 7.80% 30.365.06% 0.010.595 154.795 4.67% 1. Moreover. and single/group borrower exposures.44% 0.75% 0.038.06% 0.13% 9.075 538.254 2.296.384 766.69% 0.313 2.53% 3.22% 0.322 1.1 Segments by class of business 2010 Deposits (Rupees Percent in '000) 3.92% 0.904.04% 0.901 450.20% 0.682.723 4.1.72% 1.74% 9.676 3.388.206 2.98% 1.003.03% 100.647 1.761.00% 0.1.935 1.554.376 3.42.244.213 15.27% 7.831 3.83% 6.344 350.298.102.688.06% 1.509 5.45% 3.09% 0.08% 0.645 691.507 10. 42.07% 14.434.670 2.596 16.

36% 3.196 196.16% 0.673 79.12% 4.348.216.049.50% 1.109 199.951 4.19% 10.406.294 12.186 90.761 1.32% 2.846.048.09% 2.19% 0.636 148.834 727.064 385.570 2.650 4.289 313. transaction related contingent liabilities and trade related contingent liabilities 42.291 11.22% 0.914 1.142 346.348 35.449 1.482 27.714.84% 1.450.1.Advances (Gross) (Rupees Percent in '000) Agribusiness Automobile & Transportation Equipment Chemical and Pharmaceuticals Cement Communication Electronics and Electrical Appliances Educational Institutes Financial Fertilizers Food & Allied Products Glass & Ceramics Ghee & Edible Oil Housing Societies / Trusts Insurance Import & Export Iron / Steel Oil & Gas Paper & Board Production and Transmission of Energy Real Estate / Construction Retail / Wholesale Trade Rice Processing and Trading/ Wheat Sugar Shoes and Leather garments Sports Goods Surgical Goods Textile Spinning Textile Weaving Textile Composite Welfare Institutions Individuals Others 13.12% 0.164.729 4.856 1.696 7.46% 2.564 6.822.326.730 15.919.190 856.153 2.87% 3.60% 27.16% 0.57% 0.91% 0.629.25% 1.40% 0.84% 7.4.722 1.05% 0.59% 0.31% 0.902.410 305.67% 0.129 7.41% 1.407 0.00% 0.08% 1.00% 2009 Deposits (Rupees Percent in '000) 3.90% 0.809 14.71% 0.23% 0.94% 2.340 4.033 6.080.01% 100.743.96% 2.066.07% 2.288 92.83% 0.210.00% 2.350 1.768.260.296.37% 1.165 5.392 3.855.646 18% 82% 100% 163 Annual 2010Report .00% Contingent liabilities * (Rupees Percent in '000) 295.214.17% 28.54% 0.116.330 1.338 13.824 2.52% 7.294.278.61% 0.93% 0.43% 0.06% 2.99% 0.37% 0.2 Segment by sector 2010 Deposits (Rupees Percent in '000) 48.10% 0.018 15.200 88.197.022 148.547 558.31% 1.905 280.442.744.164 7.650.010.646 1.926.57% 0.248 324.820 792.134 1.40% 9.714.412.55% 3.55% 100.23% 0.622.627.40% 1.154.682.46% 100.453 293 904.37% 2.090 4.01% 1.338 1.792 1.524 5.155.840.877.85% 0.817 2.068.907 233.442 1.428 10.222 2.607 4.940 602.53% 2.11% 0.259 1.368 1.715 3.91% 0.354 121.397.281 89.690 14% 86% 100% Advances (Gross) (Rupees Percent in '000) Public / Government Private 32.072 217.00% * contingent liabilities for the purpose of this note are presented at cost and includes direct credit substitutes.573.22% 1.56% 1.212.263.685.833 3.687.02% 1.770.371 5.10% 1.280 354.170.23% 18.800.528.737.005.706 10.319.035.955 1.930 8.979.53% 0.737.016.09% 0.13% 0.36% 6.700 1.899.266 1.79% 28.72% 4.792 94.561 10.766 8.244.207 966.09% 0.590 3.024.784.392 3.591 5.548.16% 0.258.681 2.338 2.808 381.649 4.495 19.52% 0.972 306.879.94% 2.868 25.274 200.00% 0.34% 6.74% 0.96% 0.00% 1.07% 27.573 2.195 121.947 596.176.28% 0.389 0.618.853 12.068 1.13% 0.916.951.197.342.365 109.071 185.58% 3.52% 2.080.49% 1.892.01% 0.571 268.848.655.37% 0.017 448.47% 3.18% 0.173 4.143 15% 85% 100% Contingent liabilities * (Rupees Percent in '000) 19.392 1.860 20.14% 6.37% 2.802.22% 0.99% 3.292.41% 8.

363 3.3 Details of non-performing advances and specific provisions by class of business segment Classified Advances 2010 Specific Provisions Held 151.135.110 Profit before taxation ------------------------------ 374.888 411.5 Geographical segment analysis Profit before taxation ------------------------------ 2010 Total assets Net assets employed employed Rupees in '000------------------------------ Contingent liabilities * Pakistan Asia Pacific (including South Asia) Middle East 1.020.776 6.506 23.126.192.436 1.069.312 42.664 360.815 1.782.280.Advances (Gross) (Rupees Percent in '000) Public / Government Private 32.312 (45.469.914.1.572 15.215 28.746.407 18% 82% 100% 16% 56.526 164.944 2.329 103.585.125.408.065.715 47.728 369.280 417.175 5.038.366 94.906 21.710.513 89.294.017.606 ------------------------------ Rupees in '000------------------------------ Agriculture.169.4.682.802.762.274.620.499.164 2009 Deposits (Rupees Percent in '000) 17% 83% 100% Contingent liabilities * (Rupees Percent in '000) 17.017.425 31.606 ------------------------------ Rupees in '000------------------------------ Public / Government Private 17.326 437.195 94.1.496 193.642 271.295 150.020.743.461 2009 Classified Specific Advances Provisions Held 15.906 21.372 71.710.607 389.549 225.154 5.692 2.461 2009 Classified Specific Advances Provisions Held 426.716 90.646 Contingent liabilities * 2009 Total assets Net assets employed employed Rupees in '000------------------------------ Pakistan Asia Pacific (including South Asia) Middle East 352.585. transaction related contingent liabilities and trade related contingent liabilities 164 Annual2010 Report .490.997.408.4 Details of non-performing advances and specific provisions by sector Classified Advances 2010 Specific Provisions Held 10.801 88.499 3.244. hunting and fishing Textile Chemical and pharmaceuticals Cement Automobile and transportation equipment Wholesale and retail trade Individuals Others 505.407 * contingent liabilities for the purpose of this note are presented at cost and includes direct credit substitutes.019.803.113 100% 324.629.4.402 795.506.648.389 42.852 3.118.606 8.319.248 2.569 5.276 84% 268.267 21.017.514 17.665 94.287 8.710.042 10.550.690 65.831 77.595 8.585.461 10.312 17.742 417.126.676.004.151 2.948 2.404 73. forestry.020.541 1.011 109.181 59.240.319.122.312 42.716 8.974) 131.1.776 5.169 615.638 196.882 21.716 15.872 10.576 94.4.491.

871 .123.399 749.801 2.225.463 (14.743.916) 3.246 3.364 33.285 13.648.682.100.255 3.549 1.632. The Bank manages this risk by setting and monitoring dealer.933.378 19.332 2. Currently. the Bank also carries out stress testing on a daily basis by applying parallel shocks of changes in market yield on all the categories of T-Bills and Government securities.441.2 Market risk Market risk is the risk of losses due to on and off-balance sheet positions arising out of changes in market prices.470 (26.124 16.642. the Bank calculates 'Value at Risk (VaR)' on a daily basis by using 'Historical Method' taking into consideration the data of over 2 years.294.532. The currency risk is regulated and monitored against the regulatory / statutory limits enforced by the State Bank of Pakistan.230) 6.42.045.373 50.155.002 47.273) 58.750 56 5.076 26.519.500 2.732.462.009 390.21.772 2.803. Moreover.985 5.21.061 88.983.597 8.137. adjusted and approved periodically.882 15. The analysis below represents the concentration of the Bank's foreign currency risk for on and off balance sheet financial instruments: 2010 Assets Liabilities ------------------------------ Off-balance sheet items Net foreign currency exposure Rupees in '000 Pakistan Rupee United States Dollar Great Britain Pound Japanese Yen Euro Other currencies Total foreign currency exposure Total currency exposure 354. 42. currency and counter-party limits for on and off-balance sheet financial instruments.741 (20.360.267 334.291. Going forward the Bank is preparing to use more sophisticated systems and models and is currently evaluating use of various tools to enhance its capability to successfully meet the requirements of the internal models approach of Basel II. It also includes investments and structural positions in the banking book of the Bank.700.282 (32.155 (16.045.544.596.150.199 9.716 16.2.100. Off-balance sheet financial instruments are contracts which are the resultant outcome of the import and export transactions.894 97.217 138 (91.410.612. Market risk mainly arises from trading activities undertaken by the Bank‟s trea sury.333 7.470 2.882 317.199. counterparties enter into swaps. To manage and control market risk a well defined limits structure is in place.515 4.215. The buy and sell transactions are matched in view of their maturities in the different predefined time buckets. Moreover.294 36.2 Foreign exchange risk Foreign exchange risk arises from the fluctuation in the value of financial instruments consequent to the changes in foreign exchange rates.708.201.767 15. The Bank uses the Standardised Approach to calculate capital charge for market risk as per the current regulatory framework under Basel II.223 73.609 14.355 389.373) 21.195 Annual 2010Report 165 . These limits are reviewed.887 21.119 367.562.623 1.623.912 17.243 10.632 129.992 57.032.789 37.632) 21.072 .093 411.207.520.011 2009 Assets Liabilities ------------------------------ Off-balance sheet items Net foreign currency exposure Rupees in '000 Pakistan Rupee United States Dollar Great Britain Pound Japanese Yen Euro Other currencies Total foreign currency exposure Total currency exposure 369.299) 65. The foreign exchange exposure limits in respective currencies are managed against the prescribed limits. forward transactions in inter-bank market on behalf of customers to cover-up their positions against stipulated risks.

The Bank is exposed to interest rate risk as a result of mismatches or gaps in the amounts of assets and liabilities and off-balance sheet instruments that mature or re-price in a given period. The objective of Equity Portfolio Unit‟s classified as HFT portfolio is to take advantages of short -term capital gains. Special emphasis is given to the details of risks / mitigants.2. 166 Annual2010 Report . 42. while the AFS portfolio is maintained with a medium term view of capital gains and dividend income.2 Equity position risk Equity position risk in the trading books arises due to changes in prices of individual stocks or levels of equity indices.3 Interest rate risk The interest rate risk arises from the fluctuation in the value of financial instruments consequent to the changes in the market interest rates. In order to ensure that this risk is managed within acceptable limits.42. The Bank‟s interest rate risk is limited since the majority of customer‟s deposits are retrospectively re-priced on a biannual basis on the profit and loss sharing principles. The Bank‟s equity trading book comprises of Equity Portfolio Unit‟s classified as Held for Trading (HFT). the Bank‟s Asset and Liability Management Committee (ALCO) monitors the re -pricing of the assets and liabilities on a regular basis. limits / controls for equity trading portfolios of Equity Portfolio Unit.

659.690 7.259 64.222 10.306 93.427) 10.648 9.060 650.082.994 7.407 26.780 4.089 14.744 479.332.800 16.317 33.203.153 9.684 428.059 1.181 12.964.139.489) 2.788.227 1.570.804 4.464 882.380) (76.961 2.057) (40.046 57.747.890 1.311.825.842.212.669.099 121.700.902.052.442 26.09% 11.114 138.306.545.961.653.941.915.528 12.sale Repo transactions resale Repo transactions repurchase Off-balance sheet gap Total yield/interest risk sensitivity gap Cumulative yield/interest risk sensitivity gap 32.281) 50.000 1.389 7.911 58.741 9.465 21.181 1.53% .455.995.638.567.157 30.506.780 21.506 1.460 32.402 1.021.652.440 64.419.925 11.494 7.177 51.707.413.734 36.493.380 9.696.456.755 3.38% 17.027.621 35.416.861 9.087 46.394.177 372.831 10.058 16.519 6.180 89.370.856.557 61.347.563 7.006.472.276 1.545.533 124.287.564 24.916 (45.301.703 60.751 6.470 1.132 27.180 12.300 4.971 3.132 71.667.846 1.761 29.034.853 12.264.516 122.910 9.532 1.383 49.988.528.587 680.040.054 12.484 21.946 12.192.143 2.231.114 388.220.519 396.144 20.476 10.917 12.293.715 10.343 22.921 2.438 188.502.546 1.19% 4.421.873.507.570.608.710.265 1.622.273 8.273.534.947.977.582.849.373 (5.750.633.080.305.040.737 9.825.559 (44.497.359 51.117 9.740.67% 35.432 49.586 59.purchase Forward exchange contracts .636 9.089 30.394.772 1.779.631) 0.184 29.005.726.755.897.519 14.060 6.842.819.462.022 5.161.144 157.790.739 8.982 1.067 2.494 368 40.707.895.175.479 33.652 2009 Effective Yield/ Interest Rate ----------------------------------------------------------------------- Total Upto 1 Month Over 1 to 3 Months Over 3 to 6 Months Exposed to Yield/ Interest risk Over 6 Over 1 Over 2 Months to 1 to 2 to 3 Year Years Years Rupees in '000----------------------------------------------------------------------- Over 3 to 5 Years Over 5 to 10 Years Above 10 Years Non-interest bearing financial instruments On-balance sheet financial instruments Assets Cash and balances with treasury banks Balances with other banks Lendings to financial institutions Investments Advances Other assets Liabilities Bills payable Borrowings Deposits and other accounts Sub-ordinated loans Liabilities against assets subject to finance lease Other liabilities On-balance sheet gap Off-balance sheet financial instruments Forward exchange contracts .813 9.460 26.243 1.42.327 12.293 10.08% 13.000 5.061 1.521.398.231.028.828.260.585.541.279.358 5.589 12.902 739 46.089 5.228 6.41% 11.299 5.116.809.533 13.722.298) 49.754.786 103.982 2.728 15.380 546.009.588.761 9.293.233 63.345.955 (37.176.943 719 2.470.884.374.060 80.443.279 54.932.370) 1.164 6.192.518.63% 7.180.877 3.982 (51.75% 41.966 12.735 8.903 29.011 10.150.138.439.871.523 10.192 5.124 (2.619.175 13.34% 5.50% 3.906.155.443.964.152.119 1.116.719.378 7.038.307 8.126.586.007 4.65% 12.515.501 3.461 505 53.466 28.812.705.479 102.675.858 53.317 5.594.sale Repo transactions resale Repo transactions repurchase Off-balance sheet gap Total yield/interest risk sensitivity gap Cumulative yield/interest risk sensitivity gap 19.376 9.117.997.025 22.795.488 12.280 7.573 33.707.967 19.803 4.254.508 10.010.329.108 45.132 3.394.432 546.214 121.985 12.614.398 7.733.purchase Forward exchange contracts .381 63.197.283 (82.132 12.743.144.657 19.494 758 36.256.439.827 25.667.746 5.333.511.556 113.533 6.499 819.486.585 2.782 11.060.01% 7.974 35.753.270.236.591 252 28.402 1.096.29% 12.493 Annual Report 167 2010 .602.927 14.408 11.532.878 2.374.399 9.064 7.940 1.74% 10.889.521.677 6.429 83.343 2.535 12.124 354.547.572.936.539.991.289 19.293.962 49.121 122.446.857) 961.435 99.685.311.845.256.475 1.685.61% 0.904.573.536.305.916.946.097 1.904.055.768.667.753.724 4.692 3.364 30.955 4.149 8.879 1.778 8.272 2.871 2.045.899.819.282.732 76.766.118 619 4.741 2.780 11.757 13.987.370.056.430.298.966 29.843.926 50.780 3.498.561 207.934.544 83.177 1.961.965 160.033.038 8.921 324.667.873.766.394.220 13.317.838.698.089 156.588 13.399 16.84% 2.1 Mismatch of interest rate sensitive assets and liabilities Effective Yield/ Interest Rate ----------------------------------------------------------------------- 2010 Over 1 to 3 Months Over 3 to 6 Months Exposed to Yield/ Interest risk Over 6 Over 1 Over 2 Months to 1 to 2 to 3 Year Years Years Rupees in '000----------------------------------------------------------------------- Total Upto 1 Month Over 3 to 5 Years Over 5 to 10 Years Above 10 Years Non-interest bearing financial instruments On-balance sheet financial instruments Assets Cash and balances with treasury banks Balances with other banks Lendings to financial institutions Investments Advances Other assets Liabilities Bills payable Borrowings Deposits and other accounts Sub-ordinated loans Liability against assets subject to finance Lease Other liabilities On-balance sheet gap Off-balance sheet financial instruments Forward exchange contracts .519 55.848.786 362.841 16.215.492 12.479 4.787.521 416.611 29.265.3.777 17.014.878 7.278 94.865 2.599.667.906.828 12.87% 14.21% 2.210 30.536.336.673.195.752.614 20.583.913 13.872 7.800 62.377 446.586 12.812.253.476 35.818.911 66.876 720 2.080 33.895.779 9.479 12.537 29.726.278 5.006.

Moreover.42. The BOD has approved a comprehensive liquidity management policy which stipulates the early warning indicators of liquidity risk and maintenance of various ratios.4 Liquidity risk Liquidity risk is the potential for loss to the Bank arising from either its inability to meet its obligations or to fund increases in assets as they fall due without incurring an unacceptable cost. as core retail deposits form a considerable part of the bank‟s overall funding mix therefore significant importance is being given to the stability and growth of these deposits. 168 Annual2010 Report . ALCO monitors the maintenance of balance sheet liquidity ratios. Bank also has a 'Contingency Funding Plan' in place to address liquidity issues in times of stress / crisis situations. The Bank‟s Asset and Liability Committee (ALCO) manages the liquidity position on a regular basis and is primarily responsible for the formulation of the overall strategy and oversight of the asset liability function. depositor‟s concentration both in terms of the overall funding mix and avoidance of undue reliance on large individual deposits. Moreover.

898.325 9.806 4.133 1.184 16.465.256.059.968.016 51.075.673 (5.256 55.843.010.828 12.710. these deposits are payable on demand.435 2.595 12.895.682.801 80.006.011.473 (23.448.847 39.622.925 1.732 624.159 11.816 8.856 368 5.838.402 55.800 356.634 12.389 7.031 479.316 162.680 38.118 17.436 5.056.704 6.892 25.946 15.746.603 23.975.052.722.096.195 13.506) 214.513 19.938 701.380 4.332.055.544 1.239 41.899.518.079.870. However.313.015.809 29.442 29.478 243.809 19.943 719 1.911.005.330 74.579.342.704.212.158 48.243 30.215 633.400. with the approval of ALCO.327.249.net of tax 21.496 389.273 1.494 758 507.743.1 Maturities of assets and liabilities .304 26.008 41.990.347.485 650.4.650 (27.494 2.667.971 86.519 1.072.677) 446.132 7.456.439.181 12. .260.440 993.900 146.226.598 219.494 Over 6 Months to 1 Year 680.981.841 16.749 12.749 282.549 (66.124 354.310 8.879 1.714.750.790.105.739.611 34.239 12.491.270.550 52.based on working prepared by the Asset and Liability Management Committee (ALCO) of the Bank 2010 Total ------------------------------------------------------------------------- Upto 1 Month 11.000 1.180.753.207 287.490 12.195 169 2010 Current and saving deposits do not have any contractual maturity.267 3.396 8.979 203.665 20.552.533 3.533 6.521.833 367.556.469.890 1.913.947.871 Net assets Share capital Reserves Share in share premium of associate Non-controlling interest Unappropriated profit Surplus on revaluation of assets .729 2.327 1.614.129.143 21.091.075.246 10.359 535.046 178.150.900 146.964.294.072 15.027.635 188.144 10.652.264 25.357.479 6.469 305.438 188.850 (4.512 2.292.192 5.848.197.370 4.559 7.907 156.982 1.289.328.803.470 20.949 574.358 774.738 21.188.101.251.097 1.791.970 4.740 Annual Report Net assets Share capital Reserves Share in share premium of associate Non-controlling interest Unappropriated profit Surplus on revaluation of assets .564 38.382.740.788.940.612.942 4.254 23.521.766.587.567.881.429 208.856 505 97.075.537 (6.456.866.193.690 7.478 4.809 46.669.492 14.623.492) Over 2 to 3 Years 8.497.648.940.279.969 1.469.390.624.101.734 13.806.596 26.682.910 993.007 10.107 467.511.224.104.167 1.952 188.289 1.258.742 411.209.365) Above 10 Years 29.957 Over 1 to 2 Years 9.926) 3.516 668.880 32.556 113.615.872 8.054 14.513.852 43.948.357 Over 1 to 3 Months 1.583.732.170 49.035.876 3.222.394.259 312.011 951.507) Over 3 to 6 Months 1.487.499 1.116 21.759 43.667.906.366.831 12.011 2009 Upto 1 Month Over 1 to 3 Months Over 3 to 6 Months Over 6 Months to 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 Total ------------------------------------------------------------------------- Rupees in '000------------------------------------------------------------------------- Assets Cash and balances with treasury banks Balances with other banks Lendings to financial institutions Investments Advances Fixed assets Other assets Liabilities Bills payable Borrowings Deposits and other accounts Sub-ordinated loans Liabilities against assets subject to finance lease Deferred tax liabilities Other liabilities 35.606 6.494 1.482.463 17.598.435 (27.net of tax 21.383 21.552.212 33.070.155.666 30.564.615.954 7.325 1.000 163.578 1.273.021.819.101.011 13.563 3.368 882.365 54.533 13.639 219.144 20.902 40.901.882 4.249.000 159.878 2.159 17.766.788 93.780 15.080.087 46.732.549.546 418.541 13.741.222 852.904.178.609 416.613 23.380 63.954 3.643.693 6.460.740 41.922.279 104.022 1.561 207.42.246 1.714.890 11.489.303.273.880.982 1.025 22.019.851 41.170 Rupees in '000------------------------------------------------------------------------- Assets Cash and balances with treasury banks Balances with other banks Lendings to financial institutions Investments Advances Fixed assets Other assets Liabilities Bills payable Borrowings Deposits and other accounts Sub-ordinated loans Liabilities against assets subject to fianance lease Deferred tax liabilities Other liabilities 41.693) 2.539 28.966 95.653. Therefore.324 5.214 38.648.930 (66.484 21.843 214.921 615.070.987.966 50.394 16.563 3.570.988.985 282.142) Over 3 to 5 Years 16.050.570) (72.089 2.753.006.927 14.541 (148.902 739 91.700.763 (861.384.159 20.519 4.454 14.392 11.435 99.035 9.959 61.152.921 324.330 234.757 2.063.436 3.491.587) 2.257 12.097 390.773 1.390.808 37.656 49.461) Over 5 to 10 Years 9.614.684 428.539 22.965 774.497.330.248 252 4.917.535.876 720 1.967 85.561.719.126 12.938 58.818 1.692 884.126.966 35.695.369 546. these deposits have been classified based on management experience with such class of deposits.

400.635 188.521.652.325 9.583.392 11.258 18.079.852 43.746.159 17.497.549.539 22.456.010.872 8.838.011 2009 Upto 1 Month Over 1 to 3 Months Over 3 to 6 Months Over 6 Months to 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 Total ------------------------------------------------------------------------- Rupees in '000------------------------------------------------------------------------- Assets Cash and balances with treasury banks Balances with other banks Lendings to financial institutions Investments Advances Fixed assets Other assets Liabilities Bills payable Borrowings Deposits and other accounts Sub-ordinated loans Liabilities against assets subject to finance lease Deferred tax liabilities Other liabilities 35.494 2.511.402 53.369 546.563 3.070.070.556. .129.178.438 188.722.436 5.690.536.322 (187.630 1.008 41.940.2 Maturities of assets and liabilities .097 390.925 1.487.087 46.330 234.900 146.788.938 58.975.4.256.347.841 16.849 26.965 774.803.513 19.907 156.809 29.603 23.966 4.890 11.549.665 20.648.4.952 188.059.469 305.215 633.463 17.254 5.370 4.442 26.097 1.159 11.899.809 19.906.246 10.056.313.435 (27.152.968.380 4.101.979 203.180.101.809 46.740 41.714.052.971 86.773 1.054 14.465.612.882.549 (66.667.243 30.367 1.170 Annual Report 2010 42.144 20.342.456.561 207.193.491.749 Over 3 to 5 Years 16.015.870.816 8.533 13.639 219.564 249.479 6.124 354.831 12.598 219.719.946 15.843 214.478 243.310 8.330 74.328.264 25.512 2.245.325 1.729 2.257 12.806.927 14.249.050.011.732.899 61.429 208.518.966 5.772 1.625.259 312.567.116 21.680 36.482.394.143.954 7.693 6.256 53.954 3.359 535.871 Net assets Share capital Reserves Share in share premium of associate Non-controlling interest Unappropriated profit Surplus on revaluation of assets .533 3.170 Rupees in '000------------------------------------------------------------------------- Assets Cash and balances with treasury banks Balances with other banks Lendings to financial institutions Investments Advances Fixed assets Other assets Liabilities Bills payable Borrowings Deposits and other accounts Sub-ordinated loans Liabilities against assets subject to finance lease Deferred tax liabilities Other liabilities 41.513.985 282.964.390.710.981.091.949 574.226.753.519 4.909 Over 1 to 2 Years 9.267 3.469.828 12.544 1.based on contractual maturity of the assets and liabilities of the Bank 2010 Total ------------------------------------------------------------------------- Upto 1 Month 11.839.005.007 10.749 282.578 1.682.027.880.682.921 324.743.494 758 507.818 1.366.258.959 61.656 49.615.039 22.788 3.570) (72.615.273.740.363 Over 5 to 10 Years 9.848.806 4.192 5.521.011 13.734 13.118 619 4.926) 1.506) 214.819.025 22.900 Over 2 to 3 Years 8.876 720 1.900 146.357.966 2.031 479.749 12.740 Net assets Share capital Reserves Unappropriated profit Share in share premium of associate Non-controlling interest Surplus on revaluation of assets .890 1.107 467.901.150.000 1.260.195 The above mentioned maturity profile has been prepared based on contractual maturities.939.470 20.184 16.847 18.249.101.197.856 368 5.978.570.000 163.133 1.490 12.726.394 16.207 287.587) 2.273.957 252 4.389 7.800 356.380 63.667.648.063.195 13.075.987.460.035 9.982 1.273 1.563 3.019.880 32.539 28.011 951.546 418.833 367.239 12.879 1.159 20.484 21.494 1.046 178.436 3.330.991 13.878 2.910 993.181 12.485 650.636.246 1.126 12.214 38.294.304 26.921 615.780 15.595 12.904.net of tax 21.556 113.938 701.692 884.132 7.075.614.559 7.700.222 852.383 21.634.587.144 10.158 1.964.533 6.352) Over 1 to 3 Months 1.188.606 6.292.892.791.118 4.473 3.704 6.806.155.614.988.016 262.477 882.1 that includes maturities of saving deposits determined by the Asset and Liability Management Committee (ALCO) keeping in view historical withdrawal pattern of these deposits reflects a more meaningful analysis of the liquidity risk of the Bank.536. The management believes that such a maturity analysis does not reveal the expected maturity of saving deposits as a contractual maturity analysis of deposits alone does not provide information about the conditions expected in normal circumstances. The management believes that the maturity profile disclosed in note 42.695.690 7.055.496 389.289.657 416.653.889 Over 6 Months to 1 Year 680.390.396 8.808 17.332.519 1.279 104.358 774.596 26.759 43.365 54.212 792.624.876 3.460 505 97.940.535.693) 2.080.000 159.021.126.684 428.499 1.564.494 Above 10 Years 29.902 739 91.766.316.089 2.316 162.435 2.522.454 14.075.911.843.738 21.491.303.917.251.750.439.766.669.170 49.634 12.967 85.006.289 1.550 52.753.552.892 25.947.623.270.072 15.902 40.943 719 1.105.net of tax 21.801.492 14.552.889 Over 3 to 6 Months 1.970 4.279.324 5.469.537 (6.541 (148.435 99.732 624.516 668.611 34.096.528.146 15.440 993.239 41.327.790.677) 446.990.561.666 30.448.801 80.982 1.742 411.596.969 (23.757 2.895.143 21.622.882 4.222.898.212.327 1.

assess. processes. 42. A separate „Research & Help Desk‟ has been created in this regard that helps in creating awareness about Risk Management.5. The Operational risk management policy of the Bank is incorporated in the Board-approved Risk Management Policy and Risk Management & Internal Control Manual. people and systems or from external events. Delivery & Process Management For the purpose of continuous monitoring of risks. A dedicated IT Security Unit is functioning within Risk Management Division while responsibility for BCP implementation resides with Operations Group. Key Risk Indicators (KRIs) have been identified across the Bank and now KRI reporting has also been initiated. These Operational losses.42. monitor. structure and functions of Operational risk management and provide guidelines to identify.5 Operational risk Basel II defines Operational risk as. At Bank Alfalah. which directly reports to General Manager . As required by Basel II. A reporting structure has been put in place whereby all business / support units have been made responsible to collect and report the operational losses / near miss incidents to Risk Management Division. are aggregated to an internally developed „Operational Loss Database‟. - Internal Fraud External Fraud Employment Practice & Workplace Safety Client." In compliance with the Risk Management guidelines. the mapping of business activities into Basel defined business lines has already been completed.1 Operational Risk Disclosures . in order to use it as an action plan in improving the operational risk & control system at the organisational and business / support unit levels.Basel II Specific Currently. Basel II and the capital calculation approaches. and the recommendations of RMD are taken into consideration before their approval at the appropriate level. risk awareness culture is being encouraged by communicating the principles of proper risk management to all Bank employees. “the risk of loss resulting from inadequate or failed internal processes. An Operational Loss Database. control & report operational risk in a consistent & transparent manner across the Bank. Almost all the policies and procedures of the Bank are reviewed from the risk perspective. Annual 2010Report 171 . Product & Business Practice Damage to Physical Assets Business Disruption & system Failure Execution.RMD. Bank is using the „Basic Indicator Approach‟ for calculating the capital charge for Operational Risk. All the business / support units are responsible for ensuring compliance with policies and procedures in their day-to-day activities and monitoring key operational risk exposures. which covers the strategies. an Operational Risk Function has been established within RMD. Bank intends to move towards the „Alternative Standardised Approach‟ and for this purpose. BAL‟s Information Security Policy and Business Continuity Plan have been approved by the Board of Directors and are in the process of implementation. Risk & Control Self Assessment (RCSA) exercise and Key Risk Indicators (KRIs) are being developed and implemented across the organisation. occurring across the organisation and reported to Operational Risk Management Department. Bank has categorised all its Operational loss/near miss incidents into following loss event categories. issued by SBP. Operational Risk Function and business / support units are involved and regularly collaborate in determining and reviewing the strategy. However.

There were no significant reclassifications during the year. re-arranged or additionally incorporated in these consolidated financial statements.1 GENERAL Comparatives Comparative information has been re-classified. wherever necessary to facilitate comparison and to conform with changes in presentation in the current year. 2011 has not declared any cash or stock dividend (2009: 8% cash dividend). 44 DATE OF AUTHORISATION These consolidated financial statements were authorised for issue on March 03. 2011 by the Board of Directors of the Bank. 45 45. Chief Executive Officer Director Director Chairman 172 Annual2010 Report .43 NON-ADJUSTING EVENT AFTER THE BALANCE SHEET DATE The Board of Directors in its meeting held on March 03.

C.414 2010R eport Muhammad Javed CNIC # 42201-0184092-3 Malik Duray Rehman 17 3 Total 23.133 - - 6.I.756 - 2. Karachi. F Head Quarter Road. Hanif .914 1.557 2. Bahawalpur Zulfiqar Ahmad CNIC # 35201-1541591-1 Muhammad Sadique 2. Shahrah-e-Faisal Near C. Sabet Shah Ziarat Shah 6.158 3. Hawksbay Road Maripur Karachi Adnan Asad CNIC # 517-53-060996 Asad Jan Hamid 1. Shafiq CNIC # 604-76-218361 M.A.976 [ A n en x u er 3 Amjad Shinwari Ent.905 ] Anjum Asad CNIC # 517-92-456285 Annual 6 Airport Limousine Services A. No. Behind Shell Pump off.136 3.158 6.) 3 Rana Jamshaid Iqbal CNIC # 31101-4786961-1 Father’s / Husband’s Name 4 Muhammad Iqbal Outstanding Liabilities at January 1.195 Principal written-off 9 918 Mark-up written-off 10 578 Other financial relief provided 11 499 Total (9+10+11) 12 1.485 .490 29. Muhammad Saleem CNIC # 13503-6907712-9 Malik Duray Rehman 4.995 2 Sehar Coaches.STATEMENT SHOWING WRTTEN-OFF LOANS OR ANY OTHER FINANCIAL RELIEF OF RUPEES 500.443 462 - 1.000 OR ABOVE DURING THE YEAR ENDED DECEMBER 31.229 678 869 3.642 1.746 4. 2010 Principal 5 2. Bahawalnagar Name of individuals / partners / directors (with N.628 8. Hanif CNIC # 54303-2031642-5 Haji Safar Mohammad 6.058 960 - 2. M. General Bus Stand.018 Plot # L-453 Shereen Jinnah Colony #2 CNIC # 42301-5408381-7 Clifton Karachi 4 Seven star Transport Com Shop # 9 Rehman Service Station Sheereen Jinnah Colony Clifton. Amat Filling Coach.177 M. 2010 (Rupees in ‘000) S.256 - 2.443 462 - 1.705 2.133 1. No. 1 1 Name and address of the borrower 2 Rana Brother Transport Co. S. Karachi M.458 77 4.581 3.I 5Venus Distributors (Pvt) Limited 28. Mr.603 16.905 1.776 1.154 Mark-up 6 578 Others 7 463 Total (5+6+7) 8 3. Trans Layari.842 863 - 7.429 678 869 2.T.A.

247.634 5.195 1.327 331.030.845.365.846.800.939.995 1.331.277.935 1.135.000 8.552.579 3.073.800.219 42.168.863.195 4.500 1.808 50.813 3.253 1.086.559 1.891 4.Annexure-II IslamicBankingBusiness The bank is operating 80 Islamic banking branches as at December 31.393 25.115 3.000 12.638.107 38. 2010 (December 31.net Fixed assets Other assets LIABILITIES Bills payable Borrowings Deposits and other accounts Sub-ordinated loans Liability against assets subject to finance lease Deferred tax liabilities Other liabilities NET ASSETS REPRESENTED BY Islamic Banking Fund Exchange Equalisation Reserve Unappropriated / Unremitted profit Surplus on revaluation of assets .808 174 Annual2010 Report . 2009: 60 branches).132 10.921 5.724 1.390 1.464.817.208.878 25.152 1.857 757.177.086 495.846. 2010 2009 (Rupees in „000) ASSETS Cash and balances with treasury banks Balances with and due from financial institutions Lendings to financial institutions Investments .159.500 Remuneration to Shariah Advisor / Board CHARITY FUND Opening balance Additions during the year Payments / Utilization during the year Closing balance 10.796 688.050 2.557.502 65.852 73.090 55.049 46.net Advances .809 22.883 60.575 46.389 16.111 37.957.253 1.228 2.338 4.074 3.390.376 3.841 7.522.393.920.net of tax 6.807 4.619 10.181 35.138 760.059.817.

961 70 1.432.421.746 701.503 29.434. 2010 (December 31.991 1.201 1.373.404.204) 74.Annexure-II IslamicBankingBusiness The bank is operating 80 Islamic banking branches as at December 31.001 2.013 32.664 5.479.064 31.990 32.986 468.913 42.942 27.833 127.771 1.807 76.987 2.715 1.823 (47.037.net Unrealised gain on revaluation of investments classified as held for trading Other income Total non mark-up income NON MARK-UP EXPENSES Administrative expenses Other charges Total non mark-up expenses PROFIT BEFORE TAXATION Unappropriated profit brought forward Transferred from surplus on revaluation of fixed assets .net Provision for diminution in value of investments .138 110.net of tax Profit available for appropriation / unremitted profit 4.558 3.762 969.475.304 295.945 1.479 236.899 4.544.972.007.896.685 1.900 1.742.447.579 Annual 2010Report 175 .247.545 3.515 1. 2010 2009 (Rupees in „000) Mark-up / return earned Mark-up / return expensed Net mark-up / return income Depreciation on assets given on lease Net mark-up / return income after depreciation Provisions against loans and advances .156 1.579 275 2.338 64.548 575.294 1.953 1.040.281 34.562 1.483 2.277.157 2. 2009: 60 branches).829. commission and brokerage income Dividend income Income from dealing in foreign currencies Gain on sale of securities .277.net Bad debts written off directly Net mark-up / return income after provisions NON MARK-UP INCOME Fee.417 42.348 432.

165 1.001 95.681.764.535 896.102.001 55.000 90.000 115.000 230.401 3.000 105.599 2.001 30.001 80.156.001 140.648.831 1.973 1.392 22.540 1.001 245.875 261.001 130.000 260.137.001 165.001 115.470.001 100.490.001 255.160 2.559 3.731 2.861 945.902 479.001 160.562.000 25.147 3.178.000 110.001 260.648 2.001 200.690.000 265.044 2.2010 Number of Share Holders 1.000 170.000 65.546 1.000 120.884 1.001 45.000 55.629 4.000 225.001 110.693 674.001 25.000 140.000 80.000 255.773 13.001 205.001 50.775 849.000 5.000 185.013.000 145.001 105.519.324 8.805.001 170.275.589 819.871 694.413 244.794.000 195.001 120.831.001 75.732.354 371.062 549.612 787.550.956 1.113.001 70.001 10.000 135.551 3.173 772.001 240.001 To 100 500 1.000 235.000 100.813.000 85.000 95.000 50.000 15.130 1.358 1.000 240.723.589.001 15.136 1.388.000 175.285 2.001 230.000 245.046 1.418 1.001 265.554 2.522.419.000 205.358 8.404 23.001 190.477 2.920 3.898 234.755 984.309.330 5.566 1.002 1.000 250.625.000 1.001 60.000 70.000 165.000 160.062 536.413.001 195.001 20.177.000 35.000 10.001 85.000 Number of Shares Held 67.490.108 498 300 195 138 73 76 94 46 66 26 40 33 20 22 24 12 47 8 16 16 10 9 7 2 12 6 17 5 6 7 4 3 3 2 6 12 5 12 3 5 1 2 1 1 6 3 5 2 Shareholding From 1 101 501 1.000 210.001 185.629 250.001 35.000 30.244 2.000 40.000 130.722 176 2010Annual Report .001 180.551.000 125.611.000 190.001 65.001 145.001 155.000 200.001 125.104.000 60.960 4.Combined Pattern of CDC and Physical Share Holdings AsatDecember31.001 250.001 235.001 5.855.000 20.653 1.000 150.858 6.000 75.000 180.001 40.824 535.001 175.000 45.000 270.053 4.001 135.001 225.001 220.001 90.

000 1.001 625.000 280.000 335.000 360.001 To 275.819.000 430.000 475.000 560.000 400.001 445.001 575.333 1.630 410.000 565.000 605.001 555.072 770.001 675.100 724.231 Annual 2010Report 177 .350 1.562 932.000 450.000 670.366 1.001 345.319 679.001 545.001 295.000 290.000 710.426 1.001 645.000 769.000 775.447.065.096 650.001 425.385.000 470.000 295.000 300.000 725.001 700.001 595.001 405.001 510.392 459.388 1.000 515.001 365.873 1.631.001 450.000 700.001 360.258.001 465.000 770.000 375.000 666.000 370.125.001 355.001 275.001 455.000 429.307 700.282 2.000 575.489 288.698 601.001 560.712 1.000 705.000 305.000 610.202 438.071 557.119.000 340.875 1.250 404.034.001 300.430 695.001 720.468 441.000 550.000 580.001 335.001 495.349.000 365.500.001 515.001 330.001 630.000 600.420 652.000 350.000 405.558 695.927 632.000 635.001 770.001 540.001 285.933 355.000 330.266 706.001 370.000 630.288 1.000 510.090 1.000 291.001 570.804 1.001 530.001 305.000 650.000 320.001 440.001 705.001 395.001 605.000 455.151.000 750.238 546.000 680.000 545.001 435.001 505.028.155 450.001 315.000 440.000 685.000 Number of Shares Held 274.638 1.001 600.001 665.000 2.000 520.658 945.494 684.000 535.001 400.000 410.001 765.841 334.250 1.145 604.001 325.198.Number of Share Holders 1 4 1 1 8 2 3 2 2 1 4 2 1 2 1 3 3 1 1 1 1 1 5 1 1 2 2 7 1 2 2 2 3 1 1 2 3 2 2 1 3 2 1 1 1 1 1 1 1 1 2 2 1 1 Shareholding From 270.001 470.001 680.544 1.037 3.000 506.248.148 1.001 290.000 460.108.001 695.000 500.720.001 745.000 445.198.000 310.887 632.841 370.760 923.500.

461 1.000 1.376 1.145.200 2.001 2.000 921.830.000 965.000 820.001 1.415.000 3.001 2.000 3.122 1.000 1.400.000 3.995.000 2.759 963.172 1.965.050.600 2.000 1.000 1.395.001 1.001 900.498.281 2.000 915.000 1.000.262 1.000 1.410 981.001 1.235.837 1.000 1.050.335.650.085.155.000 3.415.262.321.001 2.001 1.001 870.961.020.001 995.001 1.000 3.995.000 1.125.000 2.000 1.100.565.000 2.000.545.001 2.550.065.000 985.063.300 178 2010Annual Report .700.826 1.000 2.153.875 1.105.000 1.150.000 Number of Shares Held 807.001 910.000 925.001 1.405.400.000 1.000 2.000 2.159 837.001 2.800.570.001 815.605.000 1.000 2.825.245.403.245.045.937 992.001 3.000 1.350.100.205.001 3.435.600.265.024.001 2.650.001 1.000.563 1.325.000 1.229 1.770.688.435.001 835.001 1.204.394 1.000 1.196 900.395.001 2.000 2.670.000 840.001 1.001 1.795 819.001 1.001 2.826.147.150.001 960.200.000 2.000 1.000 1.200.Number of Share Holders 1 1 1 1 1 1 2 1 1 1 1 1 2 1 2 1 1 1 1 1 1 1 2 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 Shareholding From 805.001 1.186 1.060.750 871.256.320.250.001 1.420.396.250.350.765.000 1.000 845.390.001 1.235.665.001 1.900 1.001 990.475.000 905.645.600.001 1.001 840.685.141 1.765.000 1.001 1.805.155 2.000 2.000 1.000.270.092.000 900.668.000.000 1.001 1.001 1.800 2.001 3.000 3.120.645.260.230.683 2.899 2.000 2.084.205.925 3.248 2.001 980.655.955.000 1.000 875.000 1.260.475.714 1.000 2.080.000 2.430.025.345.000 2.178 843.199 2.000 2.000 1.766 1.288 1.655.000 1.000 1.000 1.391.000 2.000 2.690.000 1.000 1.960.001 To 810.001 2.695.545.001 1.001 2.000 995.000 3.500 2.001 1.001 2.051.000.274.571 915.055.956.001 920.960.250.470.199 1.306 2.275.001 1.255.569.001 1.001 2.001 1.330.001 1.001 2.001 895.803.000 2.120.330.700.808.000 1.205.

536.824 25.430 6.620.001 13.000 3.001 103.500 8.001 7.690.001 6.347.415.000 14.387.950.001 4.000 4.655.369 3.000 8.322 75.001 8.000 11.044.000 11.000 14.610.000 7.966 119.098 36.001 17.000 75.680.690.857 7.259 19.385.605.885.360 3.966.809 32.258 68.156.650.205.125.001 8.000 7.029 4.001 36.210.805.947 35.350.001 31.660.001 55.349.350.657.001 12.947.000 15.000 19.305.690.000 12.000 4.001 4.Number of Share Holders 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 2 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 2 1 22.390.001 4.945.980.890.025.000 7.001 6.352.033.250 Annual 2010Report 179 .845.149.121 7.000 32.000 3.000 68.040.000 7.150.765.000 4.985.685.757 31.000 17.001 11.000 7.320.000 6.001 68.310.000 25.762.938.000 Number of Shares Held 3.001 75.001 To 3.000 19.001 35.750.127 4.001 11.001 3.000 6.001 3.045.535.000 35.515.424 53.250 55.128.001 7.147 7.020.435.789 Shareholding From 3.001 4.001 119.260.745.000 36.000 4.825.600.668 6.001 3.520.096.600.000 11.655.482.308.850.935.695.068 15.140.625.150.500.653.535.825.265.000 55.000 3.001 9.694.550.150.001 53.760.000 31.145.130.469 17.683.888.875 25.970 4.000 4.064 36.530.605.742 19.060 8.981.352.000 4.805.000 53.500.145.001 7.166 206.538 4.433 1.021.345.001 7.830.485.142.810.095.315.940.000 103.001 15.794 9.438.145.001 19.788 13.480.001 36.620.220.350.531.318.540.001 4.749.000 7.000 13.355.965.687.263.000 36.355.000 9.495.550.000 8.001 4.100.603 3.687.000 4.605.000 119.691 6.000 4.555.685.220.215.001 25.000 6.850.001 19.001 14.685.970.440.001 7.001 32.000 7.818 11.001 6.

561 108.858.479 167 44 21 16 16 4 3 4 1 34 22. No.211 3.01 0.82 8.060.789 907.041 79.103 83.365.01 0.044 12.349.29 8.971.20 0.667.170 190.250 67.538.00 10 Cooperative Societies 11 Others Total 180 2010Annual Report .23 0.379 1.054.583 118.67 0.851 9.453 117.S.70 100.854 358.04 6.156.00 8. Shareholder’s Category Number of Shareholders Number of Shares Held Percentage 1 2 3 4 5 6 7 8 9 Individuals Joint Stock Companies Financial Institutions Mutual Fund Investment Companies Insurance Companies Charitable Trusts Leasing Companies Modarabas 22.03 0.

Abdulla Nasser Hawaileel Al Mansoori .486 199. Khalid Mana Saeed Al Otaiba .242 135.430 19. Hamid Ashraf.H. DFIs.37 0. Director / CEO Mrs.000 4. CEO. Sheikh Hamdan Bin Mubarak Al Nahayan . Sirajuddin Aziz .25 0.00 0.606.00 0. Nahayan Mabarak Al Nahayan H.288 239.930 Mr.05 28. Hamdan Bin Mubarak Al Nahayan Trading in shares by Directors.625 Shares Shares Holding H.386 2.250 134. Nadeem Iqbal Sheikh .803. Director / CEO 626.524 Annual 2010Report 181 . NBFIs. CFO & Company Secretary and their spouses % 11.331 Mr. Director 135.357.13 14.283.572.360 Mr.387.Shareholder’s category Number of shareholders Number of Category wise shares held no.807 45Executives Banks. Director 67.352.000 0. Director 3.000 - 77.03 7.474 Mr.915.156.00 17.349.37 0. Nasim Fatima (Spouse of Mr.16 10.947.H. Director 11.457 Mr. of Percentage shares held 1Associated Companies Alfalah Insurance Company Limited 2NIT & ICP National Bank of Pakistan .966. Abdulla Khalil Al Mutawa .03 0.962 1 400.603 Mr. Sirajuddin Aziz . Ikram Ul Majeed Sehgal . Insurance Companies.03 Shares Sold 2010 150.76 10.716.03 0.930 Shares Purchased 2010 Mr.77 H.Trustee NI(U)T Fund National Investment Trust 3Directors & Chief Executive Officer 7 2 4.25 0.H.357. Company Secretary) 50.18 0. Director 3. Director 96.718 400. Modarabas and Mutual Funds 368 101 Shareholders holding ten percent or more shares Total Paid up Capital 10% of the Paid Up Capital 1.

Phone : (021) 34535861-2. Phone : (021) 32414030-39 UAN No. 5 & 6 Fax : 36803043 . KDA Scheme No. Shahrah-e-Pakistan. Luxmidas Street. S.E. S. No.A. North Karachi Industrial Area. Phone : (021) 34984937. 3. Phone : (021) 35065701-2 Fax : 35050653 M.T. Phone : (021) 32211353-58 Fax : 32211243 Gulshan-e-Iqbal Branch Plot No.R. F. Phone : (021) 36803041. Plot No.SB-15. Phone : (021) 35302639-44 Fax : 35302637 PECHS Branch Shop No.H. Phone : (021) 34129677-81. Phone : (021) 36962700-7 Fax : 36986051 182 Annual2010 Report Paper Market Branch Plot No. NP . Campbell Street.13. 35 / Sheet No. : 111-777-786 Fax : 32417006 Cloth Market Branch Cochinwala Market. 11-A Block-6 PECHS. 32544816-20 Fax : 32532485 Korangi Industrial Area Branch Aiwan-e-Sanat. Lawrence Quarters. Korangi Industrial Area.I. 35309075-8 Fax : 35879175 Shahrah-e-Faisal Branch Progressive Square.S. 34984824. Stock Exchange Road. University Road. C-12-C Tauheed Commercial Phase V. Phone : (021) 34313536-38.Chundrigar Road. 154-S.C. Block-9. 34984833 Fax : 34984971 Karachi Stock Exchange Branch 18-20.Jinnah Road Branch Plot No. Phone : (021) 35833778-82. 34538423-24 Fax : 34314221. Estate Avenue. 34390090 Federal 'B' Area Branch C-28. Phone : (021) 32544021-24. Block 13-B. Siemens Chowrangi.E.I. Karachi Stock Exchange Building. Gulshan-e-Iqbal. Bahadur Shah Zafar Road. Bahadurabad. Block-2.No. Fax : 32750629 S.Jinnah Road/Abdullah Haroon Road.A26/5). Sur. Corner M. 32582116 Fax : 32582113 North Karachi Industrial Area Branch Sector 12-B. Paper Market. 1-3. Building. 36344700.T.24. Siddique Wahab Road. Mohammad Shah Street Phone : (021) 32532483-4.23/1. Phone : (021) 32582990-1. 15. Branch D-40. Phone : (021) 32750635-9 Fax : 32750632 Defence Housing Authority Branch Plot No. No.A. Block . P.A. 34522460 Fax : 34313539 Jodia Bazar Branch Gulzar Manzil.7/23. Clifton.ST-4/2. Phone : (021) 32417515-19 Fax : 32418353 North Napier Road Branch Surv.I. 32540065 & 67 Fax : 32540066 Bahadurabad Branch Prime Arcade. 34522441. Napier Quarters. Phone : (021) 32401621-5 Fax : 32401627 Clifton Branch Plot No. I. BC-6. Defence Housing Authority. Opp: Police Station Gabol Town. Phone : (021) 32750627-28.10 (Old Surv. 34128578-81 Fax : 34129676 Timber Market Branch Ground Floor.E. Shop No. 'B' Area.[B r a n c h e s N e t w o r k ] KARACHI Main Branch B. Sector 23.

Landhi Township Phone : (021) 35034451-3 Fax : 35030875 Gulshan Chowrangi Branch Sani Arcade. Phone : (021) 34815926-7. S.T. Block 10-A. Ch. Cantt Bazar. Phone : (021) 35887571-73 Fax : 35887574 Hawksbay Road Branch KB-28. 10th Commercial Street. Phone : (021) 32414138-40 & 32412080 Fax : 32412082 Hyderi (North Nazimabad) Branch Plot # ST-4. 34015966-7 Fax : 34638115 Nagan Chowrangi Branch Plot # SC-28. Karachi Phone: (021) 35312832 . 194/2/1. Opp. Al-Burhan Circle Hyderi. Khori Garden Murad Khan Road. Phone : (021) 36626004. Marriot Road. & 4/4-A.D. Main Tariq Road Phone : (021) 34386052-5 Fax : 34386056 Landhi Branch Plot No. Sheet # M. Jinnah Road. Quality Godown. Quaid-e-Azam New Truck Stand Phone : (021) 32355871. Gulshan-e-Iqbal. North Karachi. Nazimabad. 32238717. Phone : (021) 32585001-4 Fax : 32585005 Malir Cantt.E. Karachi Plot No. Defence Housing Authority. Rufi Shopping Mall Block.A. 36. 32355872-74 Fax : 32355875 Shershah Branch D-283. Phone : (021) 34904601-2 Fax : 34904603 Tariq Road Branch 124/A. Block . Branch Old Malir Cantonment Library. Phone : (021) 34398457-9 Fax : 34398456 DHA Phase-I Branch 114.S.3. A. 34815930 Fax : 34815924 Tipu Sultan Road Branch Plot No. Phase-I. 32238722. 34993792 Fax : 34985729 Garden East Branch Silver Jubilee Centre. Defence Housing Authority. Block 3. Gizri Phone: 021 -35868991-93 Fax: 021 -35867149 Sea View Sahil Promenade.Eidgah Branch 166. 18 Gulistan e Johar Phone : (021) 34638114. Main Shershah Road. North Nazimabad. Karachi Phone: (021) 36708980-83 Fax: (021) 36708978 Saddar Branch Shop # 6. Sub-Block “E”. Sector 11-H. P. K. DBCHS. Haji Ishaq Market. Main Hawksbay Road. State Life Building # 5. Sector 5D. Scheme 5. Abdullah Haroon Road.E. Clifton. Main Korangi Road. M. Block 2. Khaleeq uz Zaman Road. Karachi Phone : (021) 36957622-621 Fax : 36902210 Annual 2010Report 183 . 118-119-C/1.R. 118-119 Z.1. 36626066 Fax : 36625402 Gulistan-e-Jauhar Branch Yasir Plaza. Scheme 45. Block 'E'. 9th East Street. 32238605 Fax : 32225941 DHA Phase IV.C. Main Rashid Minhas Road.I. Near Ismailia Jamat Khana. Gulshan-e-Iqbal Phone : (021) 34978252. Britto Road. Phone: (021) 35658714-16 Fax: (021) 35658717 Johar Chowrangi Branch Plot No. Scheme No. Phase IV. 29/10/1. Malir Cantt. Near Light House Phone : (021) 32217290-4 Fax : 32217244 Marriot Road Branch Survey # 67. Plot # 2.35 Fax: 35312837 Gizri K-4/3. Block-III.H. Opp. Karachi Phone: 021 -35364095-97 Fax: 021 -35371259 Nazimabad Al-Kausar Homes. 80. Tipu Sultan Road. Shabbirabad. Garden East Phone : (021) 32238704.

627. Saddar. Plot No. Karachi Phone : 021-32437917-19 Fax : 021-32437481 Garden West Area Branch Amin Center. 774 Fax : 32422526 Malir City Branch H-11/11. Jamshed Quarters. DHA. Area Karachi Phone : (021) 36337646-47 Fax : 36337648 DHA Phase II Ext. Sub-Sector. Jinnah Road Phone : (021) 32422679. Artillery Maidan Quarters. West Wharf Phone : (021) 32205966-67 Fax : 2205794 Liaquatabad Branch Plot No 21. Serai Quarters. Main Qasimabad Road.B. M. AM-3. 32725146. 8-C/1. B. DHA Phase II Extension. Pakistan Chowk.24th Commercial Street. Plot No. M. Commercial Area. 22 & 23. Karachi Phone : (021) 35877060. Karachi Phone : 0321-2175625 Khayaban-e-Muslim Branch Plot No. Kutchery Road.476/1 & 476/2. Khayaban-e-Muslim. 2. 5. 130/I. 36-C.R.A. Garden West. Hyderabad Tel: 022-3861562-64 Fax: 022-3861561 Qasimabad Branch Phase I. 31. Liaquatabad. Karachi Phone : 021-35843263-65 Fax : 021-35842073 Pakistan Chowk Branch Zubaida Manzil. Karachi Phone : (021) 34911794-7 Fax : 34911793 Urdu Bazar Branch Plot No. New M. 7. 44-C. 32724939 Fax : 32724928 Steel Market Branch Plot # 8 & 9/D-1. Malir Town Phone : (021) 34117134-35 Fax : 34117156 West Wharf Branch Sultan Centre. Elizabeth Hospital. Opp New Memon Masjid. Stadium Lane No. Jinnah Road.Shamsheer Plot No.A.A. Faiza Palace. Main Road. RB 10/16-III. Karachi Phone : 021-32231005-7 Fax : 021-32231003 Khayaban -e. Serai Quarters. KDA Scheme No. Shireen Jinnah Colony. Ram Bagh. 2784242 Fax : 2786023 Grain Market Branch Aman Center. Qasimabad. Jinnah Road. Hussainabad.Jamshed Road Branch Ashfaque Plaza. Hyderabad Tel: 022-2670592-94 Fax: 022-2670591 . S. Shop No. A210. Clifton. KDA Scheme 33. Bombay Bazar. Sector-22. Saddar Phone : (021) 32725107.R. Liaquat Market. Opposite St. Karachi Phone : (021) 35312152-54 Fax : 35312155 184 Annual2010 Report Shireeen Jinnah Colony LS-27 & 28. DHA Phase V.3 & 4. Phone : (022) 2786020-22. Bunder Quarters. F. Abul Hasan Isphani Road. Block-D. Block 7. KDA Scheme 16. Bin Qasim Phone : (021) 34721406 Fax : 34721407 Akbar Road Branch Plot # 294.3/11. Urdu Bazar. Latifabad. Block 2. Phase VI. 1. Karachi Phone : (021) 32214185-89 Fax : 32214183 Abul Hasan Ispahani Road Branch Sani Corner. Plot # 11. Unit no. 35877058 Fax : 35877059 Bombay Bazar Branch Plot No. Near PTCL Exchange. Karachi Phone : 34974484-6 Fax : 021-34974487 Hussainabad Branch R-471. Block 1. Preedy Street. Karachi Phone : 021-32215703-5 Fax : 021-32215706 HYDERABAD Plot No. Price Ali Road Hirabad Phome : (022)-2660611-5 Fax : 2660620 Latifabad Branch 4/D. Karachi Phone : (021)-34860794-95 Fax : 34860793 Gulshan-e-Hadeed Branch A-329 Phase I. Liaquat Market. adjacent to Hotel Faran.

SUKKUR
B-2823/B-2851, Frere Road, Sarafa Bazar. Phone : (071) 5628175, 5624753, 5624750

CHAMAN Trunch Road, Chaman, Balochistan.
Phone : (0826) 613440, 612541 Fax : 613488

Fax : 5628176 GAWADAR NAWABSHAH Airport Road, Gawadar Municipal Office Chowk, Katchery Road Phone : (0244)330723-25 Fax : 330729 TANDO ADAM
Plot No. A / 06 & 07, Hyderabad Road, Tando Adam Phone: 0235-576042-44 Fax: 0235-576043

Phone : (0864) 211796-98 Fax : 210185

JACOBABAD Quaid-e-Azam Road, Jacobabad
Phone : 0722-650935-36 Fax : 0722-650930

SANGHAR
CS # 124/4 Ward-A, Nawabshah Road, Sanghar Phone: 0235-542500-01 Fax: 0235-542503.

MIRPURKHAS Plot # 864/7, Adam Town, Main Umerkot Road,
Phone : (02338) 74466, 74686 Fax : 75127

QUETTA M.A. Jinnah Road Branch Property No.2-12(1), M.A.Jinnah Road. Phone : (081) 111-777-786, 2841180-83 Fax : 2827562 Hazar Gunji Branch
Plot No. 332, 333, 334, Truck Stand, Hazar Gunji. Phone : (081) 2460520, 2460821 Fax : 2460519

LARKANA Bunder Road
Phone : (074) 4055712, 4055812, 4055360

Fax : 5053962 LAHORE LDA Plaza Branch LDA Plaza,Kashmir Road. Phone : (042) 36306201-05 Fax : 36301193, 36368905 Gulberg Branch 125/E-I, Gulberg-III, Main Boulevard. Phone : (042) 35877800-8 Fax : 35754900, 35877807 Defence Branch
G-9, Commercial Area, Phase-I, LCCHS.

Shahrah-e-Iqbal Branch Cut Piece Cloth Market, Shahrah-e-Iqbal Phone : (081) 2834425, 2834429 Fax : 2827270 Double Road Arbab Plaza, Double Road, Quetta Phone : (081) 2441961-62, 2441663 Fax : (081) 2441665 Model Town Quetta Branch Plot # 35-B, Model Town, Quetta Cantt. Phone (081) 2832130 Fax : 2827329 Liaquat Bazar Branch Liaquat Bazar, Quetta Phone (081) 2838033-34 Fax : 2838025 Sirki Road Quetta Berach Market Chowk, Sirki Road, Quetta Phone (081) 2440137 - 38 Fax : 2440136

Phone : (042) 35729722-26 Fax : 35729727, 35733591 Circular Road Branch A-43/A, Opp: Mazar Hazrat Shah Mohammad Ghous, Circular Road.
Phone : (042) 37638256-8 Fax : 37653384

Township Branch 47-B/1, Block 10, Akbar Chowk, Township.
Phone : (042) 35152831-6 Fax : 35113716

Annual 2010Report

185

Badami Bagh Branch 29-30 PECO Road, Badami Bagh. Phone : (042) 37704961-66 Fax : 37728636, 37728074 Allama Iqbal Town Branch 36, College Block, Allam Iqbal Town.
Phone : (042) 35432961-5 Fax : 35432960

DHA Extension Branch Divine Centre, Near Bhatta Chowk, New Airport Road, Lahore Cantt
Phone : (042) 35700301-309 Fax : 35700213

Shah Alam Market Branch 2035-D, Hilal-e-Ahmar Health Complex, Near Fawara Chowk, Shah Alam Market.
Phone : (042) 37673401-6 Fax : 37673409

Azam Cloth Market Branch Raheem Centre, Akbar Block, Azam Cloth Market Phone : (042) 37643851-55 Fax : 37643860 Shad Bagh Branch 37, Umer Din Road, Wassanpura Phone : (042) 37616252-56 Fax : 36260295 Karim Block Allama Iqbal Town, Lahore
502-Ali Plaza, Karim Block Market, Allama Iqbal Town,

Shadman Market Branch 88, Shadman-1
Phone : (042) 37538116-20 Fax : 37538129

Tufail Road Branch 50/3, Tufail Road, Cantt.
Phone : (042) 36689016-19 Fax : 36688374

Lahore Phone : (042) 35425528, 30, 31 Fax : (042) 35425529 Ferozpur Road Branch 18-KM Main Ferozpur Road Phone : (042) 35807812-14 Fax : 35807813 Shahdara Branch Main Shaikhupura Road, Shahdara Chowk Phone : (042) 37900290 Fax : 37900291 Walton Road Branch E-28/A, Main Walton Road Phone : (042) 6627004-7 Fax : 36687391 Urdu Bazar Branch Main Kabir Street Phone : (042) 37210644 Fax : 37210647 Brandreth Road Branch
91-A, Brandreth Road, Near Australia Building

Lahore Stock Exchange Branch Basement Level - 2, Lahore Stock Exchange Building, 19, Khayaban-e-Iqbal.
Phone : (042) 36307461-68 Fax : 36307460

Baghbanpura Branch 278-G.T. Road, Baghbanpura, Lahore.
Phone : (042) 36844006-09 Fax : 36844010

Ravi Road Branch 13 Ravi Raod.
Phone : (042) 37708661-64 Fax : 37708660

Liberty Branch 10-C, Commercial Area, Liberty Market, Gulberg-III.
Phone : (042) 35789431-34 Fax : 35755226

Raiwind Road Branch
Thoker Niaz Beg, Plot # 4, Raiwind Road. Phone : (042) 35314671-5 Fax : 35314678

Phone : (042) 37674115-18 Fax : 37637303 DHA Phase II Branch 65 CCA, Phase-II, DHA Phone : (042) 35707581-4 Fax : 35707580 Ghari Shahu Branch 99-A, Allama Iqbal Road, Ghari Shahu
Phone : (042) 36372656, 36371001 Fax : 36360962

Shahdin Manzil Branch Shahdin Manzil, Faysal Chowk, Mall Road.
Phone : (042) 36012000-30, 36300581, 36300586

Fax : 36300589 Samanabad - Lahore
Plot # 91 - Main Road, Samanabad, Lahore

Model Town, Lahore
13 Bank Square, Central Commercial Market,

Phone :(042) 37590062-3 Fax : (042) 37590064 186 Annual2010 Report

Model Town Lahore Phone: (042) 35884670-72 Fax: 35884675

Cavalry Ground, Lahore 35 Main Boulevard, Officers Housing Scheme, Cavalry Ground Lahore
Phone: (042) 36610531-32, 36610534

EME Society Branch 50-A, Mohafiz Town, Near EME Society Main Gate, Lahore
Phone : (042) 37516325 Fax : 0423-37516327

Fax: 36610536 Chuburgi
24-Niaz View Scheme, Rewaz Garden,

Islampura Branch
30-A, Main Sanda Road, Atif Chowk, Islampura, Lahore

Phone : 042-37117739-40 Fax : 042-37117738 Karim Block Allama Iqbal Town Branch 502-Ali Plaza, Karim Block Market, Allama Iqbal Town, Lahore Phone : 042-35425528, 30, 31 Fax : 042-35425529 ISLAMABAD Blue Area Branch
1-B, Awan Arcade, Jinnah Avenue, Blue Area.

Chuburji, Lahore Phone: (042) 37356640-42 Fax: 37222236 Main Market Gulberg 32-E-Main Market, Gulberg II, Lahore Phone: 042 -35786955- 59 Fax: 042 -35786964 Montgomery Road Branch 65-Montgomery Road, Lahore
Phone : (042) 36303081-4 Fax : 36303085

Phone : (051) 2810136-49 Fax : 2279897 I-10 Markaz Branch 4-A, I-10 Markaz Phone : (051) 4435804-6 Fax : 4435807 F-7 Markaz Branch
13-U, F-7 Markaz, Jinnah Super Market, Islamabad

Jauhar Town Branch Plot No. 435, Block G-1 M.A. Johar Town, Lahore
Phone : (042)- 35281081-5 Fax : 35291090

Bedian Road Branch Phone : (042) 37088164 Fax : 35742694 Fortress Stadium Branch Phone : (042) 36623082-86 Fax : 36623087 Wapda Town Branch Plot No. 189, Block-F, PIA Society, Wapda Town Round About
Phone : (042) 35211574 Fax : 35211576

Phone : (051) 2653944-49 Fax : 2653940 F-11 Markaz Branch
Plot No.28, Al Karam Centre, F-11 Markaz, Islamabad

Phone : (051) 2228127-28 Fax : (051) 2228129

Stock Exchange Branch Office No. 5, 55-B,
Islamabad Stock Exchange Tower, Jinnah Avenue

Phone : (051) 2894071-74 Fax : 2894075 F-10 Markaz Branch 4-D, Urfi Centre, Markaz F-10 Phone : (051) 2809705-08 Fax : 2809719 I-8 Markaz Branch Plot No. 34, I-8 Markaz Phone : (051) 4862563-6 Fax : 4862567 G-9 Markaz, Islamabad G-9 Markaz, 39 Paragon Plaza Phone: (051) 2253002-3 Fax: 2854932 F-8 Markaz, Islamabad Shop No. 2 & 3, Al-Babar Centre, F-8 Markaz, Islamabad Phone: (051) 2818044-6, 2854615 Fax: 2260270
Annual 2010Report

Ichra Branch 112- Ferozepur Road, Ichra, Lahore
Phone : (042) 37539604-5 Fax : 37539608

Bund Road Branch Main Bund Road, Near Gulshan-e-Ravi Chowk, Lahore
Phone : (042) 37404868-72 Fax : 37404867

Zarar Shaheed Road Guldasht Town Branch
Zarar Shaheed Road, Guldasht Town, Lahore

Phone : (042) 36635969 Fax : 36635968

187

Grain Market Branch Shop # 40-41, Fruit Market, I-11/4 Phone : (051) 4438823-5 Fax : 4438828 Bhara Kahu Branch Main Muree Road, Bhara Kahu Phone : (051) 2233635, 2233637-9 Fax : 2233636 G-11 Markaz Branch Sardar Arcade, G-11 Markaz Phone : (051) 2830259, 2830260 Fax : (051) 2830264 Tarnol Branch Al-Noor Plaza, GT Road, Tarnol, Tehsil & District Islamabad Phone : (051) 2226621-23 Fax : (051) 2226626 COMSATS Institute of Information Technology (CIIT) Branch Chak Shahzad, Park Road, Islamabad Phone: 051-4365103-4 RAWALPINDI The Mall Branch 8, The Mall, Saddar Phone : (051) 5700038-40 Fax : 5700042, 5700029 Satellite Town Branch B/20, North Star Plaza,Satellite Town, Murree Road. Phone : (051) 4424080-6 Fax : 4424087 Jinnah Road Branch A-351, Jinnah Road (Old City Saddar Road). Phone : (051) 5775325-8 Fax : 5775324 Rawat Ground Floor, Riaz Shah Bukhari Plaza, Main G. T Road Rawat, Tehsil & Distt. Islamabad Phone : (0514) 611906 Fax : (0514) 611903 Lalazar Branch Tulsa Road, Lalazar Phone : (051) 5524904-5 Fax : 5527814 Chaklala Branch 59, Shah Plaza, Commercial Area, Chaklala Scheme III Phone : (051) 5766003-4 Fax : 5766005 College Road Branch E/20-26, College Road Phone : 051 - 5762008, 5762010 Fax : 5762007 188 Annual2010 Report

Peshawar Road Branch Plot No. 400/2, Gammon House, Peshawar Road, Rawalpindi Phone : (051) 5468401-2 Fax : 5468403 Airport Road 7-Fazal Town, Airport Link Road, Rawalpindi Phone: (051) 5706022-23 Fax: 5781483 Khanna Branch Adil Tahir Plaza, Service Road, Al-Noor Colony, Sector 3 Phone: (051) 4479290-3, Fax: (051) 4479295 Chowk Sadiqabad Branch Shop # 2-6, Abassi Tower, Muslim Town Phone : (051) 4423078-81 Fax : 4480226 Kahuta Branch Tehseen Plaza, PAF Road Phone : (051) 3313625-29 Fax : 3313630 Adamjee Road Branch Adamjee Road, Saddar, Rawalpindi Cantt. Phone : (051) 5563728 Fax : 5563730 Tench Bhatta Branch Plot # 396/C, Main Bazar, Tench Bhatta, Rawalpindi Cantt. Phone : (051) 5520475 Fax : 5520466 Adyala Road Branch Main Adyala Road, Rawalpindi Phone : 051-5570078-79 Fax : 051-5570080 Baghsardaran Branch 12 Ghazni Colony, Bagh Sardaran, Rawalpindi Phone : 051-5778592-93 Fax : 051-5778594 Bohar Bazar C 211-215, Bohar Bazar, Rawalpindi Phone : 05811-451914, 05811-451910 Fax : 05811-451926 Faizabad Branch Shakeel Plaza, Faizabad, Rawalpindi Phone : 051-4575846-47 Fax : 051-4575849 FATEH JANG Rawalpindi Road, Fateh Jang, Phone : (0572)-210837-38 Fax : 210839

Gulistan Colony II. Phone : (091) 5822902-7 Fax : 5822908 G. 3 Yarn Market. Distt. Street No. Sir Fazal Hussain Road. Rawalpindi Phone : 0514-590019. Samundri Phone : (041) 3424356-7 Fax : (041) 3424355 Sabzi Mandi Branch New Fruit & Vegetable Market.5 Fax : 2540759 Sheikhupura Road. Opp. Road Phone : (0514) 534012-15 Fax : 535015 Mohra Chowk Mouza Lab Thatoo. Phone : (041) 2617436-9 Fax : (041) 2617432. Radio Station. G.B. Liaqat Road. Samanabad. Peshawar City. Jamrrud Road Phone : (091) 5710753-7 Fax : 5710758 Annual 2010Report 189 . Jamrrud Road. Grain Market. 1. Menerva Road Phone : (041) 2540763. Road Branch 1045-1046. Montgomery Bazar Phone : (041) 2605806-7 Fax : 2621487 Minerva Road Branch P-64-B.8557421-22 Fax : 8557424 Khurrianwala Branch Main Bazar. Main Gole Bhowana Bazar. Madina Town Phone : (041) 8556673-75 Fax : 8556679 Rail Bazar Branch Property No. The Mall. Rail Bazar Phone : (041) 2540801-2 Fax : 2540803 Yarn Market Branch P-78. Peshawar Phone : (091) 2564911-4 Fax : (091)-2564910 Jamrud Road. Faisalabad. Faisalabad Phone : 041-8582141 . Phone : (091) 2590023-26 Fax : 2551380 Hayatabad Karkhano Shop No. Peoples Colony No. Sheikhupura Road. Phone : (041) 2627357 Fax : (041) 2540706 PESHAWAR Peshawar Main Branch 6-B. Gojra Road. Park Inn Hotel Building. Islamia Road Peshawar Cantt Phone : (091) 5287051-7 Fax : 5287058 Peshawar City Branch Shoba Chowk. T. Faisalabad Phone : (041) 8722636-39 Fax : 8722184 Susan Road Branch P-98/22. G. Millat Chowk. P-81. 245-RB. Khyber Bazar. Main Susan Road. 2640834 Peoples Colony Branch 17-A/2. Phone : (0514) 539425-28 Fax : (0514) 511980 FAISALABAD Main Branch Ground Floor.2 Fax : 041-8582147 Babar Chowk Branch 641-A. Chak No. 590021-22 Fax : 0514-590020 WAH CANTT 4-1/100. B-29 & 30. Plaza. Main Road. Peoples Colony Extension. Faisalabad P . Hayatabad. State Life Building. Mohra Chowk.352-A. Hazara Road. Babar Chowk Phone : (041). J. Road Phone : 091-2593002-6 Fax : 2593001 Peepal Mandi Branch Ashraf China Trade Center Peepal Mandi. Tehsil Sadar. Jhumra Road Phone : (041) 4361080-81 Fax : 4361082 Samanabad Branch P-9. Hashtnagri & Industries Opp: Sarhad Chamber of Commerce. Officers Colony. Tehsil Taxila.TAXILA Kohistan Complex. Peshawar Phase III Chowk. Near Sidhar Bypass. Faisalabad Phone (041) 2561502-03 Fax : 2561504 Samundri Branch P-35/36.T.T. Faisalabad Phone : (041) 2518823-4 Fax : (041) 2518825 Bhowana Bazar P-141. Karkhano Market.

3255295 Satellite Town Branch 40-A Satellite Town Phone : (055) 3730396-99 Fax : 3251423 190 Annual2010 Report . 5885970 Fax : 5879882 GUJRANWALA Opposite Iqbal High School. Main Bazar Phone : (0925) 624641. Phone : (061) 4546792-6 Fax : 4781506 Vehari Road Branch 618/B. Kamra Phone : (057)-9317423-25 Fax : 9317420 HANGU Saif-ur-Rehman Market. 3847031-33 Fax : 3856471. Vehari Road. Multan Cantt. Shahi Road. Abdali Road. 621008 Fax : 624644 MULTAN Abdali Road Branch 62-A. Sambrial. Main Mandi Road.T. Kamra. District Attock Alfalah Centre. Main G. Bosan Road Phone : (061) 6210364-5 Fax : 6210363 Lodhran Branch 27-2. Tehsil & District Peshawar Phone : (091) 2582304-6 Fax : 2582307 ATTOCK Opposite Session Chowk. Shahabpura Road. 4588807 Fax : 4579024 Shahrukn-e-Alam Branch 230-A & 251-A. Qutba. District Attock Phone : (057) 2640794-95 Fax : (057) 2640796 GHOURGHUSHTI Timber Market.Bakhshi Pul Branch Bakhshi Pul Charsada Road. Paris Road. Main Bazar. Tehsil. Gujranwala Phone : (055) 3859931-3. Phone : (052) 4591741. Multan Cantt. Sialkot Phone : 052-3242671-79 Fax : 052-3242680 RAHIM YAR KHAN 12-A. Waisa. Road. Quaid-e-Azam Road. Tehsil Hazro Phone : (057) 2872918-19 Fax : 2872916 KAMRA Attock Road. Phone : (068) 5879880-1. Hazro Gondal Road. Near Grain Market Phone : (061) 6244492-95 Fax : 6244496 Hussain Agahi Branch Hussain Agahi Road Phone : (061) 4577242. Model Town. District Attock Phone : (0572) 662413-15-16 Fax : (0572) 662417 Qutba. 1009/I.T.T. Road. Tehsil Hazro. Hazro. Kohat Road. Ward # 6. Attock Cantt. District Sialkot Phone : (052) 6522801-2 Fax : 6522803 Shahabpura Branch Malik Plaza. Ghourghushti. 4591442 Fax : 4591742. 4593210 Sambrial Branch G. G. Chowk Shaheedan Phone : (061) 4588611. Road. Main Multan Road Phone : (0608) 361700-363001-2 Fax : 363005 Quaid-e-Azam Road Branch Plot No. Opp: DCO Bungalow. Phone : 0321-6323231 Fax : 061-4784472 SIALKOT 40/A. Shahrukn-e-Alam Phone : (061)-6784201-2 Fax : 6784205 Bosan Road Branch 262-B. 457725 Fax : 4577232 Chowk Shaheedan Branch Akbar Road. Phone : (057) 2701557-58 Fax : (057) 2700248 Waisa Sadaat Market. Gulgasht Colony. Main Road.

3614976 DERA ISMAIL KHAN Plot # 3666-B. 11. Gujranwala Road Phone : (052) 6616834-35 Fax : 6619650 HAFIZABAD Sagar Road. Sargodha Phone : 048-3226647 Fax : 048-3226648 CHAK NO. Phone : (056) 3614977-9 Fax : 3787974.Adeel Plaza. Qaboola Road Phone : (0457) 835711-12-13 Fax : 835717 PAKPATTAN 159 . Kazam Kamal Road. Chichawatni District Sahiwal Phone : (0405) 487802-6 Fax : 487807 ARIFWALA 47/D. G. Hafizabad Phone : (0547) 540801-3. Road. Zain Palace. District. Opposite PTCL Office.T. Makan Bagh. 610172. Saidu Sharif Road. Rai House. Phone : (0966) 720609. 3792066 Fax : 3791169 GUJRAT Jalalpur Bhattian Branch Mouza Jalalpur Bhattian.67. Phone : (0946) 726745-6. 726740-4 Fax : 726747 JHELUM Bunglow No.Main College Road Phone : (0457) 376020-27 Fax : 376024 DERA GHAZI KHAN G. Circular Road. North Circular Road. Phone : (062) 2889922-5 Fax : 2889874 CHINIOT 1-A. Satellite Town. Phone : (0937) 873631-3 Fax : 873733 BAHAWALPUR Opposite BVH. Mardan Cantt.SAHIWAL 183-Sarwar Shaheed Road. District Sargodha Phone : (048) 3791158. Kashmir Chowk. 111 SB Pull III. The Mall. Phone : (065) 2665301-3 Fax : 2665484 SHEIKHUPURA Main Lahore-Sargodha Road. Gujrat Phone : (053) 3530069-3530219 Fax : 3530319 Kutchery Bazar Branch Kutchery Road. Chowk.S.T. 128. Shahrah-e-Quaid-e-Azam Phone : (047) 6337704-5 Fax : 6337706 DASKA Al. Opp. 610182 Fax : 610050 MIAN CHANNU Ghazi Morr. Sargodha Phone : (048) 3724138-9 Fax : 3724193 Satellite Town Branch 302-A. Main Faisalabad Road.T. Hafizabad Phone : (0547) 501275-6 Fax : 501282 CHICHAWATNI 1-Railway Road. Phone : (0544) 610162. Gujrat Phone : 053-3517995-98 Fax : 053-3517999 MARDAN Plot No. Road. G. 720610 Fax : 720607 Annual 2010Report 191 . Tehsil Pindi Bhattian. Survey No. Dera Ghazi Khan Phone : (064) 2468201-6 Fax : 2468104 MINGORA. 540808 Fax : 540804 Jampur Road. Sabzi Market. SWAT Khasra No.95. Phone : (040) 4467691-95 Fax : 4467696 SARGODHA 91-C/2 University Road.

Phone : (047) 7624701-3 Fax : 7624704 TOBA TEK SINGH 105-Farooq Road. Jutial. 7518780 Fax : 7518070 192 Annual2010 Report 1-13. Phone : (0922) 522791-93-96 Fax : 522797 Main Bazar Branch T-40 & T-41. Station Road Phone : (0723) 680112-14 Fax : 680118 HAROONABAD 15-C/16-C. Gilgit Phone : 05811-451914. Near Radio Station. Gilgit Ghulam Haider Block. Yousuf Shah Road. Ghalla Mandi Phone : (063) 2256401-4 Fax : 2256458 HASILPUR 17-D. Circular Road. A. 2448075 Fax : 2441071 KHARIAN 1. Block-K. Near MEPCO Office Phone : (062) 2275504-6 Fax : 2275503 DAHARKI Zafar Bazar. M. Near Ghala Mandi Phone : (053) 7518368. Allama Iqbal Road. Main Mansehra Road. Main Bazar. Hasilpur Phone : (062) 2448078. Road Phone : (053) 7536241-42 Fax : 7536245 GILGIT Shahrah-e-Quaid-e-Azam. Main G. Kohat Phone : 0922-522007-08 Fax : 0922-522009 SADIQABAD 28-29 D.Tank Adda Kohinoor Super Shopping Centre. Mohallah Jamia Masjid. Phone : (068) 5802501-3 Fax : 5802704 MANDI BAHAUDDIN Kutchery Road. Tehsil Chowk.6644364 Fax : 6642647 . 7518370. Bhalwal Phone : (048) 6644863 . Muslim Plaza. College Road.T. Gilgit Phone : (05811) 51904-07 Fax : 51903 NLI Market. Rawalpindi Raod Phone : (0543) 555206-210 Fax : 555220 BHALWAL 451. Baldia Road. Dera Ismail Khan Phone : 0966-720917 OKARA Plot No. 641217 Fax : 644040 GHOTKI 191. Supply Bazar. NLI Market. Phone : (0462) 517838-9 Fax : 517841 BUREWALA 95-C. Phone : (067) 3771901-4 Fax : 3771905 KOHAT Bannur Road. Kohat Cantt. Road. Mandi Bahauddin Phone : (0546) 520921-23 Fax : 507886 LALA MUSA G. Phone : (0992) 344723-6 Fax : 344728 JHANG 9-D.T. Al-Aziz Market. Jinnah Road Phone : (0442) 550419-22 Fax : 550423 ABBOTTABAD AHMEDPUR EAST BRANCH Kutchery Road. Rizwan Plaza. Jhang Saddar. 25-28. Daharki Phone : (0723) 642868 643549. 05811-451910 Fax : 05811-451926 CHAKWAL City Trade Centre. Liaqat Shaheed Road.

586435 Fax : 586337 MIRPUR. Distt. Ghallah Mandi. 5577627 (068) 5577805 HARIPUR Main Shahrah-e-Hazara. Road. 8-12. Akbar Kiani Shopping Mall. Fatima Khel Phone : (0928) 614634-36 Fax : 614099 CHITRAL D. Opposite Mountain Inn Hotel.3517878 MURIDKE G. Office Road. Jaranwala Phone : (041) 4319003-4 Fax : (041) 4319005 BAHAWALNAGAR Shop # 6. Dinga. AZAD JAMMU & KASHMIR 114. Gojra Phone : 046-3517675-7 Fax : 046. Bohar Wali Gali. Azad Jammu & Kashmir Phone : (05827) 436834-7 Fax : 436838 KALLAR SYEDAN Ghousia Shopping Centre. Kotli Road.T. Rail Road Phone : (0492) 765218-9 Fax : 770890 Pattoki Branch Allama Iqbal Road. 586915. Distt. Block III. Distt. Gujrat Phone : (053) 7404844-46 Fax : (053) 7404840 Annual 2010Report Phone : (051) 3572106. Shahrah-e-Resham Phone : (0997) 303591. Mirpur. Muridke Phone : (042) 7983173-75 Fax : (042) 7983172 JARANWALA P -813. Adjecent to Mazar Hazrat Baba Bulley Shah. 3570763 Fax : 3570227 193 .T. Street No.3515703 GOJRA P -85.T. Sector F-1. Attalique Bazar Phone : (0943) 414396.3. 303592 Fax : 300567 Oghi Branch Main Bazar. G. Model Town. Kotla Arab Ali Khan. Gujar Khan Phone : 051 . Road. 5577617. Khanpur (068)5577502 . 3. Kallar Syedan MUZAFFARGARH Mauza Taliri.C. Gujrat Phone : (0537) 586892. Tehsil Kharian. Haripur Phone : (0995) 627451-2 Fax : (0995) 627831 DINGA Thana Road. Road. Bahawalnagar (63) 2272005-7 (063) 2277437 HAZRO 273-M. G. Nia Bazar. Multan Road.3515704-707 Fax : 051 .KASUR Shop No. Main Hattian Road Phone : (057) 2313771-2 Fax : 2313773 KOTLA Bhimber Road. Choa Road. Muzaffargarh (0662) 428920-23 (0662) 428931 KHANPUR Kutchery Road. District Mansehra Phone: (0997) 321949 Fax: (0997) 321357 BANNU Gowshala Road. 414367 Fax : 412988 GUJAR KHAN 58-D & 59-C. District Kasur Phone : (049) 4421071-3 Fax : 4421075 MANSEHRA Punjab Chowk.

6609480 Fax : (055) 6609450 JAUHARABAD Plot # 2. District Khushab Phone: (0454) 723760 Fax: (0454) 723758 Mandi Quaidabad Branch Plot # 156/1. District Khushab Phone : (0454) 880056-58 Fax : 880057 MANDI FAIZABAD Main Jaranwala Road. Chakwal Road. District Khanewal Phone (065) 2211901-4 Fax : 2211906 PIR MAHAL Mohallah Kasurabad.WAZIRABAD Sialkot Road. 6609470. Phone : (051)-3413210-2 Fax : 3413149 DINA Mahfooz Plaza. Turbat Phone : (0852) 411556-58 Fax : 411417 BATTAGRAM Opposite D. Zhob Road Phone : (0824) 660852-5 Fax : 660851 BHAKKAR Plot # 458. Fax : 2555710 JINNAH COLONY. Block-D. Fax : 237791 BHERA Property No.Resham Phone : (0997) 310222 Fax : 310377 . Talagang Phone : (0543) 410791-4 Fax : (0543) 411030 MURREE Sharjah Center. Hospital.H. Mall Road. G T Road. Chak # 89-10/R. Railway Road.Q. Jauharabad. 2201600 Fax: (056) 2882086 Nankana Sahib Branch 53-Grain Market Phone : (056) 2877574-5 Fax : 2877577 MIANWALI Watta Khel Chowk. Rajana Road. Sargodha Road. Wazirabad. Circular Road Phone : (0542) 413300-9 Fax : 413310 LORALAI 1062-1063. Shahrah-e. District Khanewal Phone : (065) 2555701-4. Distt. 12/302. Jhang Road Phone : (0453) 516068-70 Fax : 516071 SKARDU Taqi Plaza. JAHANIA Main By Pass Road. District Jhelum Phone : (0544)-632723-4 Fax : 632557 194 Annual2010 Report Hussaini Chowk Phone : (05831) 54700-703 Fax : 54704 TURBAT Main Road. Mianwali Phone : (0459) 237794-6. Mandi Faizabad Phone: (056) 2881032. Dagar Gharbi. Block # 2. Pir Mahal Phone : (046)-3366430-31 & 3366381 Fax : 3366382 DEPALPUR Kuthcery Road. Tehsil Jahania. Gujranwala Phone : (055) 6609460. Fax : 6692161 TALAGANG KHANEWAL Cinema Road. Mohalla Ali Bhutta Phone : (048) 6692162-3. Depalpur Phone : (044)-4542223-25 Fax : 4542220 NAROWAL 496/A.

Islamabad Phone: 0514-611906 Fax: 0514-611903 Annual 2010Report 195 . Phone: 0606-413525-27 Fax: 0606-410010 MUZAFFARABAD Tanga Stand. Bank Road. District Chiniot Phone : 047-6214470-1 Fax : 047-6214475 HAVELIAN Tanoli Plaza. Ameer Muawya Chowk. Block 14. Main G. Layyah Havelian. District Rajanpur Phone: 0604-567136-38 Fax: 0604-567135 LAYYAH Chubara Road. Road. Tehsil Phalia.CHISHTIAN 29-B. Gole Bazar. Railway Road. Ground Floor. Swabi Phone : 0938-223811-3 Fax : 0938-223814 CHOA SAIDAN SHAH Rab Nawaz House. AJK Phone: 05822-920982-4 Fax: 05822-920985 NOWSHERA Taj Building. Qaboola. Pishin Phone : 0826-420744-5 Fax : 0826-420748 SWABI Swabi Bazar. District Gujranwala Phone : 055-6815791-2 055-6815796 Fax : 055-6815790 Kotli. Mardan Swabi Road. Rajanpur Road. Charsadda Bazar. District Bahawalnagar Phone : 063-2509145-6 Fax : 063-2509455 SHAKARGARH PHALIA Hailan Road. Nowshera Phone: 0923-611697 Fax: 0923-611425 QABOOLA Rana Ghulam Qadir Market. District Norwal Phone : 0542-453001-09 Fax : 0542-453010 CHENAB NAGAR . Jampur.RABWAH P-4. Riaz Shah Bukhari Plaza. Havelian Bazar. Muzaffarabad. Kamoke. Phalia. Ghallah Mandi. Shakargarh. Tehsil Arifwala. Chillas. AJ&K Aashiq Hussain Plaza. 6511007 Fax: 091-6512002 CHILLAS DC Chowk. Tehsil & Distt. Choa Saidan Shah. District Diamer Giligt-Baltistan Phone: 05812-450475-76 Fax: 05812-450477 JAMPUR Opposite TMO Office. Rabwah. Ayub Market. Chakwal Road. Kotli. District Abbottabad Phone : 0992-812006-8 Fax : 0992-812009 KAMOKE G. Main Bazar. District Mandi Bahauddin Phone: 0546-566051 Fax: 0546-566054 CHARSADDA Tangi Charsadda Road. T Road Rawat.T. Chishtian. Maneri Payan.T. Chenab Nagar. Opposite Ghafoor Market. Road. District Pakpattan Phone: 0457-851130-32 Fax: 0457-851129 Azad Jammu & Kashmir Phone : (05826) 448393-94 Fax : (05826) 448395 PISHIN Bund Road. Charsadda Phone: 091-6510013-14. District Chakwal Phone : 0543-580862-64 Fax : 0543-580865 RAWAT Ground Floor. G. Near Layyah Minor.

Karachi Plot # 35/127 Block 7 & 8 C.Karachi Plot # D-69 Block 7. Artillery Maidan Quarters. SITE II (Super Highway Phase I) Phone : (021) 36881246-7 Fax : 36881249 Orangi Town. Regal Chowk. 34154118. Shamim Apartments.Uni-Towers. Main Bahawalpur Road.RENALA KHURD Plot No. Block #1. North Nazimabad Phone : (021) 36633133 & 36633177 Fax : 36633135 DHA Branch.Chundrigar Road. North Karachi. Yazman. Sector 11. to W-2/1/3. Karachi 23-C. Block 10 Phone : (021) 36362194.A. Tehsil Hazro. Row # 1.5 Fax : (021) 32430492 Gulistan-e-Jauhar Pakistan Tulip Valley Plot No. 34750445 Fax : 34750438 F. Phone : (021) 34315271-4 Fax : 34313581 Jodia Bazar Plot No. 24.52 Fax : (021) 34144653 196 Annual2010 Report North Nazimabad. Karachi Phone : (021) 35061661-4 Fax : (021) 35067031 Gulshan-e-Iqbal Plot # 40-B. Karachi Phone: 021-36727802 Fax: 021-36619538 Saddar Branch Plot # 292 &266. Karachi Ground Floor. Plot # 25. Karachi D-3. Berar Cooperative Housing Society Phone : (021) 34860321-2 Fax : 34860320 Port Qasim. Plot # 27/28. 1. Sibi Phone: 0833-500206. 500208 Fax: 0833-500209 WAISA Sadaat Market. Karachi Ground Floor.5 Kehkashan Clifton. 2636350 Fax: 044-2636360 SIBI M. SB-1.P. Karachi Plot # LS32. Jinnah Road. Waisa. District Bahawalpur Phone: 062-2703021-22 Fax: 062-2703024 ISLAMIC BANKING BRANCHES Uni-Tower. Sector-16 Korangi Industrial Area. Main Bazar. Phone : (021) 32472295-8 Fax : 32472141 Shahrah-e-Faisal. District Attock Phone: 0572-662413-15-16 Fax: 0572-662417 YAZMAN Chak No. KDA Scheme No. Khi. DHA. Shahrah-e-Faisal. Gulistan-e-Jouhar Phone : (021) 34661355-7 Fax : (021) 34661359 Korangi Industrial Area Shop No. Gulshan-e-Iqbal. Main Khayabane-e-Ittehad. Karachi Phone : (021) 34144650. North Western Industrial Town Phone : (021) 34750439. Nazimabad. Durya Lal Street. Karachi Phone : (021) 36662271-72 Fax : 36662264 North Karachi Shop # 3-11 Sarah View Phase II Sector 11-B. I. Block A. Phase II Extension. Near Round About # 5.I. 36362197 Fax : 36362226 SITE II. 8. Fort Mansion. Karachi Plot # B-24/A. Saddar. Karachi Plot # W-2/1/1. Karachi Phone: 021-35639081 Fax: 021-35639086 Clifton .B. 112. Welcome Road. Karachi Phone : (021) 32446542 . 56-DB. Area. Karachi 213 . Hazro Gondal Road. Phone : (021) 35869271 Fax : 021-35869270 . Karachi Phone : (021) 35313873-80 Fax : 35313872 Dhorajee. Orangi Town. District Okara Phone: 044-2636340. Sub Block A. KDA Scheme No. Fortune Center. Renala Khurd. Jodia Bazar. Karachi Phone : (021) 36964648-49 Fax : 36964739 Nazimabad Branch Ground Floor. 33 & 43. Block # 1. Block#13-A.

Lahore 66-Main Boulevard. Islamabad 20-A. Lahore Phone : (042) 37114612-16 Fax : (042) 37114618 Mughalpura Branch Opposite lalpul. Sector I-9. Near Masjid Farooq-e-Azam. Lahore Opposite Benz Factory. Lahore Phone (042) 37502811-15. Phone : 042-37612821-5 Fax : 042-37612826 Jinnah Avenue. Zarrar Shaheed Road. 13. Jehangir Raod. 37902539 Fax : 37902540 Shah Alam.327. Islamabad 78-E. Markaz Islamabad Phone (051) 4858562-64 Fax : 4858560 Annual 2010Report 197 . Islamabad Plot # 3-J. REDCO Plaza. New Garden Town. Lahore. Fax : 37502820 Chung Branch.Km Ferozepur Road. Lahore Phone : (042) 37490041-5 Fax : 37490046 Wahdat Road. Lahore Phone : (042) 36613855-62 Fax : (042) 36673224 Gulshan-e-Ravi Block F. Gulshan-e-Ravi Lahore Phone : (042) 37404811-20 Fax : (042) 37404821 Qurtaba Chowk Rehman Chambers. Gulberg. Misri Shah Lahore. Lahore Abid Plaza. Lahore Phone : 042-35125080 Fax : 042-35125081 Daroghawala Branch Plot No. Lahore 139-Main Circular Road. McLeod Road. Lahore 14-Main Wahdat Road. Phone : (042) 35846374-85 Fax : 35846386 Y Block. Mozang Chungi. Karachi Phone : 021-32588312 Fax : 021-32588314 Main Branch. Fax: (042) 36524710 Multan Road.A. 35781856 McLeod Road. Johar Town. Road. Lahore Phone : 042-35271601-02 Fax : 042-35271603 Misri Shah Branch 455-Main Shad Bagh Road.. G. Sheikhupura Road. Phone : (042) 37211631-5 Fax : 37211640 New Garden Town.Shershah Branch D-175. M. Daroghawala. Dubai Chowk. Phone : (051) 2879580-3 Fax : 2879589 G-10 Markaz. Township. Main Lahore. Phase III.Civic Centre. Lahore Cantt. Lahore Kot Abdul Malik. Sardar Plaza. Phone : (042) 37902536. Chowk Shah Alam Phone (042) 37374081-5 Fax : 37374086 Azam Cloth Market Branch Property No. Lahore 93-Y. F-1185. Phone : (042) 35746191-5 Fax : 35746190 Johar Town. G-10 Markaz Phone : (0511)-2819101-05 Fax : 2819100 I-9 Markaz. Defence Housing Authority. College Road. Phone : (042) 35313401-05 Fax : 35313406 Zarrar Shaheed Road 1500-F. SITE. Phone : (042) 37499215-19 Fax : 37499220 Kot Abdul Malik. Karachi Block.T. Blue Area. Azam Cloth Market. Shershah. Phone : (042) 35781841-55 Fax : 35781875. Lahore Awami Complex Block # 1. Qurtaba Chowk. Mughalpura Phone: (042) 36524701-09. Phone : 042-36533491-4 Fax : 042-36533495 Kahna Nau Branch 23 . Jinnah Avenue. Modern Godown. Lahore 69-R-I. Main Road. Commercial Area. Lahore Chung Stop. Main Multan Road. Kahna Nau. Lahore Phone : 042-37662845-8 Fax : 042-37651672 College Road Township Branch 39. Main Multan Road.

Faisalabad Phone : (041) 8559361-64 Fax : 8559635 Medical College Road. Bahria Town. Jail Road. Bosan Road. Rawalpindi 400-B. Faisalabad Phone : (041) 8522113-4 Fax : 8522116 Satyana Branch. Sector E-11. Site II. Toopanwala Gate Dera Ismail Khan Phone : (0966) 710141-2 Fax : 710139 Quetta Branch Shop # 1&2.T. District Attock Phone : 0572-523335-37 Fax : 0572-523394 Sargodha Opp. Quetta Phone : 081-2866548 Fax : 081-2866552 Hyderabad Branch Propert No. Branch 310. 2832130 Fax : 2899012 Phone : 051-4834630 Fax : 051-4834629 Kutchery Bazar Faisalabad P . Plaza One. Islamabad Phone : 051-2515491 Cantt. Block B. Liaquat Road. Road. Commerical Market. Mini River View. Block-5. Federation of Employees Cooperative Housing Society. Phone : (041) 8581602-04 Fax : 8581582 Gulberg Road. Gulgosht Colony Phone : (061) 750941-5 Fax : 750885 Jamrud Road. Khadim Ali Road. Main Double Road. Satellite Town Phone : (051)4452048-9 Fax : 4452050 Khayaban-e-Sir Syed Branch Saggoo Centre. Masjid Road. Phone : (041) 2603021-5 Fax : 2603028 Canal Road Branch. Islamabad Phone : 051-4493714 Fax : 051-4493715 E-II. Grain Market Phone : (068) 5885331. Main Double Road. Faisalabad 597-B. Plot # 7. Faisalabad 1-Ramana. 35-B Model Town Phone : (081) 2838932. Phase VII. Block-A. Hyderabad Cantt Phone L (022) 2730867-72 Fax : 2730873 Abbottabad Branch 27-A. Branch Plot No. 9. 1 & 2. Islamabad Phone : 051-5707131-2 Fax : 051-5707130 Faisal Arcade G. DHA Phase II. Satyana Road. Dhudial. Sialkot Phone : (052) 3241302 . Sector A. River View Road. Murree Road.36. Opposite National Hospital. Branch Street No. Jamia Masjid Hamid Ali Shah. Multan 262-B. Kutchery Bazar. Sector II. Saddar Bazar. Rawalpindi 125-D. Peshawar Phone : (091) 5701385-89 Fax : 5701392 Sialkot Ali Building. Mansehra Road Phone : (0992) 344723-6 Fax : 344736 Gujrat Branch Zaib Plaza. Rehman Shaheed Road Phone : (053) 3609501-3 Fax : 3517499 Dhudial Branch Dhudial Chowk. Road. G. 397 & 398. JBW East. Faisalabad Phone : 041-2605645-50 Fax : 041-2605644 Tehsil and District Chakwal Phone : (0543) 590676 Fax : 590673 Pindi Ghaib Branch Banora Chowk. Sargodha Phone : (048) 3726804-7 Fax : 3726808 198 Annual2010 Report . Hasan Abdal. Canal Raod. Plot No.5 Fax : 3241306 Rahim Yar Khan Shop No. Khayaban-e-Sir Syed. Shahbaz Town Phase 4. Rawalpindi Phone : (051) 5795184-88 Fax : 5795189 Satellite Town. Village & Post Office. 396.Bahria Town Branch Plot No. Chak # 204-RB. Opp: Punjab Medical College. Rawalpindi Dera Islamil Khan East Circular Road. 5885803-5 Fax : (068) 5885668 DHA Phase II. Commercial Mall.T. 24-25. 80. Gulberg Road. 5-B. Gujranwala Phone : (055) 4557301-05 Fax : 4557310 2. District Attock Phone : (057) 2350123-8 Fax : 2350120 Hasan Abdal Branch Hamdan Building. Supply Bazar. Masjid Road Branch Plot No. Faisalabad Square # 14.

G. Near New Bus Stand. District Vehari Fax : 067-3750031 Mumtazabad Branch Vehari Road. District Muzaffargarh Phone : 066-2240176-77 Fax : 066-2240173 Shahkot Branch Circular Road. Niazabad. Chamber of Commerce & Industries. Sukkur Phone : 071-5620972-3 Fax : 071-5620974 Annual 2010Report 199 . Heart Blood Bank Street Phone : (0093-40) 230705-07 Fax : 230704 Kot Addu Branch G.Bewal Branch Samote Road. District Gujrat Fax : 053-3431745 Khushab Branch Shaheryar Market. Vehari AFGHANISTAN KABUL Kabul Branch 410.Saeed Shopping Centre. Gulshan Avenue. District Nankana Sahib Phone : 056-3711431-32 Fax : 056-3711437 KINGDOM OF BAHRAIN MANAMA (OBU) Suit No.T. Phone : (008802) 7168821-05 Fax : 9557413 Tehsil Gujar Khan Fax : 051-3361269 Jalalpur Jattan Branch Kashmir Nagar. Chahrahi-e-Sadarat. Kot Addu. Road. Circular Road. Mailsi. 1302. Near Ghausia Chowk. Tower West P. Shar-e-Nau Phone : (009375) 2004105-10 Fax : 2002142 Fax : 067-3360918 Bahawalpur Branch 12-B. Level 17. Circular Road. Shahkot. Bangladesh Phone : 0088 02 8861848. Bahrain Financial Harbour. 11. Khushab Phone : 0454-711200-711722 Fax : 0454-711736 Sangla Hill Branch Fawara Chowk. Bangladesh 81/A. Phone : (00880) 0161-001477 District Gujrat Fax : 0544-654586 Kamalia Branch Mohallah Mehtianwala. Agrabad. Kabirwala. District Nankana Sahib Fax : 0563-701052 Sarai Alamgir Branch Al. Bahawalpur Phone : 0622-889913-15 Fax : 0622-889918 Kabirwala Branch Khanewal Road. Chittagong. Mumtazabad Multan Fax : 061-6242002 Vehari Branch Plot No. Model Town-B. Jalalpur Jattan. Distict Khanewal Phone : 065-2400401-03 Fax : 065-2400408 HERAT Herat Branch Ground Floor. B-1055. Sarai Alamgir. Kamalia District Toba Tek Singh Fax : 046-3413277 Mailsi Branch Colony Road. Karkhana Bazar. Road.A. Gulshan North. OVERSEAS BRANCH BANGLADESH DHAKA Dhaka Branch 5-Rajuk Avenue. Motijheel C. Gulshan Branch 168. Mianwali Road. Near Jamia Masjid. Box # 1375 Phone: (00973) 17203100 Fax. Bangladesh Phone : (0088) 171-888727 SYLHET Sylhet Branch Marchant Tower 582 East Mirza Bazar Phone: (00880821) 2830679 Fax: (00880821) 2830677 Dhanmondi Branch.T. Block E. 8861704 Fax : 8850714 CHITTAGONG Agrabad Branch 57. Bunder Road.O. Dhaka 1212. Sangla Hill. (00973) 17224300 Sukkur Branch Plot No. Dhanmondi.Satmasjid Road. Village Dhera Kanayal Bewal.

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In case of proxy for an individual beneficial owner of CDC. Karachi. A member entitled to attend. Saima Trade Towers. An instrument of proxy and a Power of Attorney or other authority (if any) under which it is signed. In case of proxy for corporate members. or notarized copy of such Power of Attorney must be valid and deposited at the Share Registrar of the Bank. A corporation being a member may appoint as its proxy any of its official or any other person whether a member of the Bank or otherwise. he/she should bring the usual documents required for such purpose. The proxy must produce his/her original identity card at the time of the Meeting. As witness my/our hand this _____________ day of ________________________.Revenue Stamp) 2. holding _____________________________________ ordinary shares.[ FormofProxy ] Folio/CDC Account No. 5/. speak and vote on his/her behalf. 2011 Witness: ________________________________ Name:___________________________ CNIC/Passport No:_________________ Address:_________________________ ________________________________ ________________________________ 1. 2010 . and on my/our behalf at the 19th Annual General Meeting of the Bank to be held on 28th March 2011 and at any adjournment thereof. hereby appoint ________________________________________________________________ of ___________________________________________________________________________or failing him/her ______________________________________________________________________________ of ____________________________________________________________________________.I. as my/our proxy to vote for me/ us. 1700-A. Annual Report (Member’s signature on Rs. M/s. I. Registrar Services (SMC-Pvt) Limited. F. 17th Floor. attested copy of beneficial owner's Computerized National Identity Card. and vote at the Meeting is entitled to appoint another member as a proxy to attend. who is also a member of the Bank. Chundrigar Road. Account and Participant's ID numbers must be deposited alongwith the form of proxy with the Share Registrar. not less than 48 hours before the time of the Meeting. D. I/We ________________________________________________________________________________________ of ________________________________________________________________ being member(s) of BANK ALFALAH LIMITED ("the Bank"). 3.