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Corporate Information Notice of the 20th Annual General Meeting Directors‟ Report to the Shareholders Statement of Compliance with the Best Practices of the Code of Corporate Governance
Auditors‟ 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 Shareholdings
Branches Network Form of Proxy

CORPORATE INFORMATION
Board of Directors H.H. Sheikh Hamdan Bin Mubarak Al Nahayan Chairman Mr. Abdulla Khalil Al Mutawa Director Mr. Abdulla Nasser Hawaileel Al-Mansoori Director Mr. Khalid Mana Saeed Al Otaiba Director Mr. Ikram Ul-Majeed Sehgal Director Mr. Nadeem Iqbal Sheikh Director Mr. Atif Aslam Bajwa 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 Director Director Director Secretary Director Director Director Secretary Director Director Director Secretary Central Management Committee Mr. Atif Aslam Bajwa Mr. Shakil Sadiq Mr. Mohammad Yousuf Mr. Zahid Ali H. Jamall Mr. Faisal Farooq Mr. A. Wahid Dada Mr. Ijaz Farooq Mr. Arfa Waheed Malik Mr. Adnan Anwar Khan Mr. Talib Rizvi Mr. Shahab Bin Shahid Mr. Abdul Rauf Danka Chief Operating Officer Mr. Shakil Sadiq Company Secretary Mr. Mian Ejaz Ahmad Chief Financial Officer Mr. Zahid Ali H. Jamall Auditors A. F. Ferguson & Co. Chartered Accountants Registered / Head Office B. A. Building I. I. Chundrigar Road Karachi, Pakistan. Website www.bankalfalah.com Chairman Member Member Member Member Member Member Member Member Member Member Secretary

NOTICE OF THE 20TH ANNUAL GENERAL MEETING

NOTICE is hereby given that the 20th Annual General Meeting of Bank Alfalah Limited will be held on 29th March 2012 at 12:00 noon at Pearl Continental Hotel, Karachi, to transact the following business:

Ordinary Business: 1.
2.

To confirm the Minutes of the 19th Annual General Meeting held on 28th March 2011.
To receive, consider and adopt the audited Annual Accounts and Consolidated Accounts of the Bank for the year ended December

31, 2011 together with Directors' Report and Auditors' Report thereon.
3. To approve as recommended by the Board of Directors, payment of cash dividend at the rate of Rs.1.75/- per share, i.e. 17.50%.

4.

To appoint Auditors of the Bank for the year 2012 and fix their remuneration.

Special Business:
5. To approve the remuneration paid to the non-executive directors of the Bank for attending Board meetings and meetings of the Board Committees for the year ended December 31, 2011 and to pass the following resolution as an Ordinary Resolution: "RESOLVED that the remuneration paid to the non-executive directors of the Bank for attending Board meetings and meetings of the Board Committees, as disclosed in notes 27 and 36 of the audited Annual

Accounts of the Bank for the year ended December 31, 2011, be and is hereby approved."

6.

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

By Order of the Board

Karachi Dated: 8th March 2012

MIAN EJAZ AHMAD Company Secretary

ANNUAL REPORT 2011 03

Karachi. F. attested copies of proxy's CNIC or passport. 1108. Registrar Services (SMC-Pvt) Limited.Chundrigar Road.I. Registrar Services (SMC-Pvt) Limited.D. An instrument of proxy and a Power of Attorney or other authority (if any) under which it is signed. Registrar Services (SMC-Pvt) Limited. not less than 48 hours before the time of the Meeting. 2. F. Trade Centre. 11th Floor. F.NOTES: 1.I. if any. (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. 1108. 5. 3. numbers must be deposited alongwith the Form of Proxy with our Share Registrar as per paragraph No. and vote at the Meeting is entitled to appoint another member as a proxy to attend. 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. Account and Participant's I. 11th Floor. 6. speak and vote on his/her behalf. M/s. I. Transfers received at the office of our Share Registrar. A member entitled to attend. In case of Proxy. D. The Share Transfer Books of the Bank will be closed from 22nd March 2012 to 29th March 2012 (both days inclusive). Chundrigar Road. 4. In case of Proxy for corporate members. Trade Centre. Those shareholders. 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). The statement of material facts under Section 160(1)(b) of the Companies Ordinance 1984 relating to the aforesaid Special Business to be transacted at the Annual General Meeting is being sent to the Members with the Notice.D. whose shares are deposited with Central Depository Company of Pakistan Ltd. situated at Office No. 4 above. Shareholders are requested to notify change in their address. Office No. before the close of business on 21st March 2012 will be treated in time for the purpose of above entitlement to the transferees. I. or notarized copy of such Power of Attorney must be valid and deposited at the Share Registrar of the Bank. to our Share Registrar. Karachi. ANNUAL REPORT 2011 04 .

ANNUAL REPORT 2011 05 .000/.to each non-executive Director for each Board meeting attended by him. A sum of US$8. 5 Pursuant to Prudential Regulation G-1 (C). the Board of Directors by Resolution dated 24th August 2011 decided that as a reasonable and appropriate remuneration the following sum be paid to each non-executive Director of the Bank for attending Board/Board Committee meetings held after 1st February 2011: - A sum of US$10. Except the Chairman.STATEMENT OF MATERIAL FACTS UNDER SECTION 160(1)(B) OF THE COMPANIES ORDINANCE 1984 CONCERNING THE AGENDA ITEM NO.to each non-executive Director for each Board Committee meeting attended by him.000/. the other non-executive directors are interested to the extent stated above in the Special Business. No remuneration is being paid to the Chairman of the Bank for attending Board meetings.

6.368.624 (2.000 out of over one and a half million families affected by the floods in the year 2010.745 (400. Bank has availed the FSV benefit. 1. 2.243. called 'Watan cards'.745 million for the previous year.718 (1.72 2011 2011 2010 Rs. 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. BAL will have disbursed a total of Rs. Initiatives.480 billion to flood affected persons.000 - Profit before Provisions and Taxation - DEPOSITS ADVANCES IMPORTS EXPORTS (Gross) Dividend The Directors recommend the payment of Cash dividend @ 17.687) (1.991.000 400.718 million compared to Rs.000 100.000 2010 Rs. to beneficiaries identified by NADRA and GoP.000 each to nearly 108.522 (1.000 8. In millions 12.130 Rs.452 Rs. It is envisaged that by the end of the second phase of Watan Card distribution. 1. which can be linked to Mobile Wallets as well.997.293) 968. Operating Results During the year the bank's profit before taxation stood at Rs.433. and bill payments that are accessible via their Watan card accounts. Additional installments of Rs.879) 1.000 300. 5. We continue to strengthen our presence in the market place and as of year end 2011.433.BANK ALFALAH LIMITED DIRECTORS' REPORT TO THE SHAREHOLDERS The Board of Directors is pleased to present the audited financial statements of the Bank for the year 2011.588) 3.5% subject to approval of the shareholders.000 10.757. For this effort BAL issued VISA debit cards.603.864.000 6. BAL created 18 Centres in Punjab and Gilgit. In the second phase of the programme it will be ensured that beneficiaries have multiple opportunities to use the Debit cards.000 4.000 200.930.368.192 (4. remittances. wherein the Government of Pakistan (GoP) selected the bank as one of the partner to disburse Rs.000 per family are planned in 2 stages.323.234. 40. 0. 20.Baltistan provinces to disburse Cards and Cash to affected persons.804) 5. In millions 500. ANNUAL REPORT 2011 06 . 7 foreign branches (5 in Bangladesh and 2 in Afghanistan) and 1 offshore banking unit in Bahrain. 2011 2010 (Rupees in „000) Profit before provisions and taxation Provision against loans and advances (net) Provision for diminution in value of investments Profit before taxation Taxation Profit after taxation Earnings per share 9.503.301 million approx. we have a network of 406 branches that includes 85 Islamic Banking branches.000 2.510) (2.60 5. efforts and key developments l Watan Card and Benazir Income Support Programme Bank Alfalah Limited (BAL) continues its active involvement in the Watan Card programme. BAL's aim is to retain these beneficiaries as Branchless Banking customers by introducing them to the benefits of using additional services such as savings.294) 4.459.

Entity Rating for Long Term and A1+ (A one plus) for the Short Term. 2011. Credit lending has remained subdued. Going forward. contraction in the real private sector credit and falling volume of imports. The effects of the depressed economic activity. through specially created centres in 20 Districts of all the provinces as well as Azad Jammu and Kashmir. may not materialize in the face of continuing energy shortages. This expectation. has rated the Bank 'AA' (double A). respectively. Further. unfavorable law and order conditions. 144 branches including car and home finance hubs were working on T-24. however. 1000 per month. power shortages and high interest rates have significantly impacted borrowers. These ratings denote a very low expectation of credit risk. coupled with slight growth in Large-scale Manufacturing (LSM) is expected to boost economic performance by augmenting private sector credit. Total disbursements through BAL in the first year are expected to exceed Rs. The sector has remained focused on deposits. Credit Rating PACRA. Year 2011 also witnessed the commissioning of three data centers along with seamless placement of required hardware and applications to its designated locations. The State Bank of Pakistan has accordingly reduced its policy rate in this context. A declining interest rate regime. diminutive credit demand for capital investments and risk-averse lending attitude of banks toward the private sector. This has squeezed the availability of credit for the private sector and increased the pressure on liquidity.BAL is also undertaking the massive Benazir Income Support Programme (BISP) project from February 2012 in which nearly 900. the external account is expected to experience more pressure due to the debt servicing payments in the short term. the unsecured subordinated debt (Term Finance Certificates) of the Bank has been awarded a credit rating of AA. strong capacity for timely payment of financial commitments in the long term and by highest capacity for timely repayment in the short term. ANNUAL REPORT 2011 07 . Bank is now stepping ahead with its vision of creating controlled operational framework across the board by extending the frontiers of centralization in other areas notably its Islamic Arm. As at December 31. Centralization of processes has led to improvement in turnaround times and greater customer satisfaction. a premier rating agency of the country. an uncertain political environment.000 beneficiaries have already been allocated to BAL by GoP for distribution of Debit Cards and Cash of Rs. branches and units are continuously and steadily migrating to this world renowned core banking platform. A reflection of overall low aggregate demand can be seen in the declining inflation trend. The lack of diversified and sustainable financing sources has resulted in substantial borrowings from the banking system by the government. Bank's drive towards centralization of back office functions has been very effective and as a result branches are able to focus on better customer services. l Core banking platform implementation Based on bank's strategy to align its Information System setup towards Temenos (T-24) platform. l Processes During the year the bank further streamlined the operational platform for creating efficiencies while providing optimum level of internal and external services. 10 billion.(double A minus). The banking sector of Pakistan is still in a consolidation phase due to the country's economic vulnerabilities. Economic Overview Pakistan's economy is faced with the challenges of financing its fiscal and external current account deficits. at a rapid pace. Private sector investment demand in the economy is declining.

h) Summarized key operating and financial data of last eight years is annexed to the audited accounts. Bajwa has also been appointed as Director to fill the casual vacancy. Abdulla Nasser Hawaileel Al Mansoori Mr. d) International Accounting Standards. 3. of Meetings attended 6 5 6 6 5 6 1 5 * Mr. 897. cash flows and changes in equity. Market Risk. 560. H. 6.420 million The number of Board meetings held during the year 2011 were 6 and were attended by directors as per details below: 1. Risk Management Pakistan's economy was adversely affected by devastating floods. c) Appropriate accounting policies have been consistently applied in preparation of financial statements and accounting estimates are based on reasonable and prudent judgment. present fairly. Atif Aslam Bajwa * Mr. 7. The situation demands further strengthening of our Bank's internal risk management controls through a renewed focus on special assets (delinquent loans) and portfolio management. There has been no material departure from the best practices of corporate governance. 5 dated June 13. Statement under clause XIX of the Code: a) The financial statements prepared by the management of the Bank. k) The pattern of shareholding is attached with this report. Sheikh Hamdan Bin Mubarak Al Nahayan Mr. as applicable to banks in Pakistan.Nadeem Iqbal Sheikh Mr. 2011 is: Staff Provident Fund Staff Gratuity Fund j) Rs. H. Ikram Ul-Majeed Sehgal Mr. f) g) There are no doubts about the Bank's ability to continue as a going concern. Abdulla Khalil Al Mutawa Mr. Information Technology Security Risk and Operational Risk ANNUAL REPORT 2011 08 . as detailed in the listing regulations duly adopted by the State Bank of Pakistan vide BSD Circular No. The Bank has implemented the requirements of the Code of Corporate Governance relevant for the year ended December 31. This was done through number of new initiatives in all the risk areas it looks after namely Credit Risk. A prescribed statement by the management together with the Auditors' Review Report thereon is annexed. the state of affairs. lack of external financing.Corporate Governance 1. i) Book value of investments and placements by Staff Provident Fund and Staff Gratuity Fund as at December 31. 5. the result of its operations. Sirajuddin Aziz * No. 4. b) Proper books of accounts of the bank have been maintained. e) The system of internal control is sound in design and has been effectively implemented and monitored. Khalid Mana Saeed Al Otaiba Mr. power shortages. 2. political unrest and security situation. Keeping in line with its core objective. As the impact of the economic down turn took its toll on asset portfolios in the banking sector.946 million Rs. 2011. have been followed in preparation of financial statements.Integrated Framework as per SBP Guidelines. Atif Aslam Bajwa was appointed as Chief Executive Officer during the year in place of Mr. Mr. 2002. Bank is in the process of adopting an internationally accepted COSO internal Control. financial institutions have had to further strengthen the overall risk management processes and early warning systems to be better positioned to respond to these challenges and to effectively monitor and control the resulting risk shocks. 2. Sirajuddin Aziz. Risk Management Division continued to play its role in enhancing the risk oriented culture within the Bank. 8.

Subsidiary Company Bank Alfalah Limited has 97. has continued to be strengthened. Further the compliance of regulatory & internal limits is also monitored and any deviations are highlighted to the competent authorities for ratification and necessary guidance. dedication. 11. in line with the overall risk appetite of the Bank. Bank Alfalah has donated Rs. On the Operational Risk front. thus providing estimated LGD (Loss Given Default). Our belief is that positive contributions made to causes focused on addressing human development challenges is a major responsibility. Future Plans In 2012. The Bank's major focus has been on supporting education. officers and staff of the Bank at all levels. upgrading and maintaining the monuments in major cities of Pakistan. The adherence to Risk-appetite statement approved by the Board is monitored by RMD. System has been implemented in Corporate & Investment Banking Group and generates rating of transactions. The two modules were released in 2010. we plan to open more branches all over Pakistan. Market Risk Management has been strengthened through implementation of advanced monitoring and measurement tools such as Early Warning Indicators and Value -at-Risk models. introduced earlier.18% shareholding in Alfalah Securities (Private) Limited. Bank Alfalah has been donating generously to non-profit institutions working on improving health care and education in Pakistan. the State Bank of Pakistan. Ministry of Finance and other regulatory authorities for their continuous guidance and support with whom we enjoy a very cordial relationship. ATIF ASLAM BAJWA Director & Chief Executive Officer March 01. an end to end Loan Origination System was introduced. in addition to Obligor Rating which is already in place. Capacity was developed in the System to highlight developing weaknesses in borrower financials and highlighting such accounts to all stakeholders for a more vigilant monitoring through automated system. seeks to reduce volatility in operating performance under adverse market conditions. Acknowledgement The Board would like to thank our valued customers for their continued patronage and support. Bank Alfalah has been a major sponsor of preserving. 2012 Abu Dhabi ANNUAL REPORT 2011 09 . professionalism and sincere efforts of the senior management. continued to be enhanced further.In the Credit Risk Area. automation was the focus and during the Year complete automation of its two core support modules Operational Loss Database & Key Risk Indicators was achieved through web based systems. which entailed system based movement of credit line proposals. This is in addition to System's current capability of quantifying counter-party risk and transaction related risk in accordance with the best practices and generating MIS reports providing snapshot of the entire portfolio for strategizing and decision making. Corporate Social Responsibility Being the 'Caring Bank'. it has been our primary focus and desire to keep exploring opportunities to continuously contribute towards the community development initiatives and programmes across Pakistan. Risk & Control Self Assessment framework. the bank has also developed Facility Rating System in line with SBP's guidelines. This aims to improve the Bank's response time to business on their credit facility requests. to assist decision making authorities. implemented in 2008 to measure and monitor operational risk levels and mitigate operational losses. To make the rating system more encompassing.720 million during the year to support various educational and other social institutions. particularly in Consumer Finance products. A dynamic and well defined limits structure. The Board would also like to place on record its appreciation for the hard work. The Internal Rating System. special education and relief work etc. Revamping of many product modules was undertaken and completed.

EIGHT YEAR FINANCIAL SUMMARY

2004

2005

2006

2007

2008

All figures are in Rs. million 2009 2010 2011

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 - net of provision Investments - 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. of Employees ( other than outsourced)
%

7,140 14,515 24,416 31,822 35,789 40,743 42,238 49,666 2,679 4,344 5,918 8,289 9,957 11,002 12,754 14,215 2,026 2,966 3,264 6,906 5,310 5,028 5,604 9,758 1,654 2,563 2,566 4,536 1,795 1,016 1,369 5,434 1,092 1,702 1,763 3,130 1,301 897 968 3,503

4,369 6,738 10,573 13,767 14,609 19,770 19,727 22,840 154,835 248,314 275,686 328,895 348,991 389,070 411,484 468,174 88,931 118,864 149,999 171,199 191,790 188,042 207,153 198,469 35,503 57,416 56,502 88,492 75,973 99,159 113,426 166,532 129,715 222,345 239,509 273,174 300,733 324,760 354,015 401,248

78,472 116,210 119,937 184,305 190,289 197,304 254,705 286,550 57,317 71,847 70,844 79,090 93,406 100,493 132,277 191,820

% %

8.16

8.66

9.48

9.85

8.03 12.46 10.53 11.60 5.80 2.86 3.65 12.27

29.43 20.93 12.11 17.59

56.69 41.17 28.12 35.54 33.82 30.67 36.44 42.01 2.67 3.34 4.13 3.84 3.59 9.17 0.38 3.70 5.22 0.24 3.31 3.49 26.89 30.65 20.37 25.72 0.86 0.84 0.67 1.04 4.90 16.46 0.24 0.80

Times
% % % % %

68.56 53.46 62.63 62.67 63.77 57.90 58.52 49.46 - 12.00 - 15.00 - 8.00 25.00 33.33 30.00 23.00 12.50 -

Rs. Rs. Rs.

17.48 22.46 21.15 21.18 18.27 14.65 14.62 16.93 21.05 24.88 24.48 24.95 21.32 16.41 16.53 19.11 3.90 3.92 2.91 3.92 1.41 0.71 0.72 2.60

No.

3,352 5,218 6,543 7,371 7,584 7,462 7,571 7,580

ANNUAL REPORT 2011 10

BANK ALFALAH LIMITED
STATEMENT OF COMPLIANCE WITH THE BEST PRACTICES OF THE CODE OF CORPORATE GOVERNANCE

FOR THE YEAR ENDED DECEMBER 31, 2011

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, Listing regulations of the Karachi, Lahore and Islamabad Stock

Exchanges for the purpose of establishing a framework of good governance, whereby a listed company is managed in compliance with the best practices of corporate governance. The bank applies the principles contained in the Code in the following manner: i) Except for the Chief Executive Officer, all the other directors are non-executive directors. The non-executive directors include two independent directors.
None of the directors of the bank are serving as a director in ten or more listed companies, including the bank.
All the resident Directors of the bank are registered as Tax payers and to the best of our knowledge, none of the Directors have defaulted in payment of any loan to a banking company, a Development Financial Institution (DFI) or a Non Banking Financial Institution (NBFI) or being a member of a Stock Exchange, has been declared as a defaulter by that Stock Exchange.

ii)
iii)

iv) None of the Directors or their spouses is engaged in the business of Stock Exchange. v) The Bank has prepared a "Statement of Ethics and Business Practices", which has been signed by all the directors and employees of the Bank.

vi) The Board has already adopted its vision/mission statement, overall corporate strategy and significant policies of the Bank. A complete record of particulars of significant policies along with the dates on which they were approved or amended has been maintained.
vii) All the powers of the Board have been duly exercised and decisions on material transactions, including appointment of the Chief

Executive Officer are approved by the Board. Mr. Atif Aslam Bajwa was appointed as Chief Executive Office after Mr. Sirajuddin Aziz tendered his resignation. Mr. Bajwa has also been appointed as Director to fill the casual vacancy. viii) The meetings of the Board were presided over by the Chairman. The Board of Directors have met six times in the year and written notices on the Board meeting, along with agenda and working papers, were circulated at least seven days before the meetings. The minutes of the meetings were appropriately recorded and circulated to all concerned.
ix) The Directors have been provided with the copies of the listing regulations of the Stock Exchange, the Bank's Memorandum and Articles of Association and the Code of Corporate Governance. The Directors are well conversant with their duties and responsibilities. x) There was no new appointment of CFO, Company Secretary, or Head of Internal Audit during the year ended December 31, 2011.

xi)

The Board has setup an effective internal audit function within the Bank. The staff of Internal Audit Department are suitably qualified and experienced for the purpose and are conversant with the policies and procedures of the Bank and they are involved in the internal audit function on a full time basis.

xii) 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. xiii) 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.
xiv) The bank has complied with all the applicable corporate and financial reporting requirements of the Code.

ANNUAL REPORT 2011 11

xv) The Directors, CEO and executives do not hold any interest in the shares of the Bank other than that disclosed in the pattern of shareholding.
xvi) The Board has formed an audit committee. It comprises three members; all of whom are non-executive directors of the bank.

xvii) 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. The terms of reference of the committee have been formed and advised to the committee for compliance.
xviii) 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, that they or any of the partners of the firm, their spouses and minor children do not hold shares of the Bank and the firm and all its partners are in compliance with International Federation of Accountants (IFAC) guidelines on code of ethics as adopted by the Institute of Chartered Accountants of Pakistan.

xix) 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.
xx) The Board considers and approves the related party transactions on an annual basis after review of the Board Audit Committee.

xxi) We confirm that all other material principles contained in the Code have been complied with. The Statement of Compliance with best practices of corporate governance is being published and circulated along with the annual report of the bank. For and on behalf of the Board

Atif Aslam Bajwa Director & Chief Executive Officer March 01, 2012 Abu Dhabi

ANNUAL REPORT 2011 12

AUDITORS' REVIEW REPORT TO THE MEMBERS ON STATEMENT OF COMPLIANCE WITH THE BEST PRACTICES OF THE CODE OF CORPORATE GOVERNANCE

We have reviewed the Statement of Compliance with the best practices contained in the Code of Corporate Governance prepared by the Board of Directors of Bank Alfalah Limited ('the Bank') to comply with Regulation G-1 of the Prudential Regulations for Corporate / Commercial Banking issued by the State Bank of Pakistan, Regulation No. 35 of Chapter XI contained in the Listing Regulations issued by the Karachi Stock Exchange, the Lahore Stock Exchange and the Islamabad Stock Exchange where the Bank is listed.

The responsibility for compliance with the Code of Corporate Governance is that of the Board of Directors of the Bank. Our responsibility is to review, to the extent where such compliance can be objectively verified, 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. 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.

As part of our audit of the financial statements, we are required to obtain an understanding of the accounting and internal control systems sufficient to plan the audit and develop an effective audit approach. 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.
Sub-Regulation (xiii a) of Listing Regulation No. 35 as notified by all the three stock exchanges on which the Bank is listed requires the Bank to place before the board of directors for their consideration and approval, 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. Further, all such transactions are also required to be separately placed before the audit committee. 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. We have not carried out any procedures to determine whether the related party transactions were undertaken at arm's length prices or not.

Based on our review, nothing has come to our attention which causes us to believe that the Statement of Compliance does not appropriately reflect the Bank's compliance, in all material respects, with the best practices contained in the Code of Corporate Governance as applicable to the Bank for the year ended December 31, 2011.

A. F. Ferguson & Co. Chartered Accountants Dated: March 06, 2012 Karachi

ANNUAL REPORT 2011 13

As required by the SBP. evaluation. The system of Internal Control is designed to manage rather than eliminate the risk failure to achieve the bank's business strategies and policies. 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. comprehensive management testing plans and framework have also been developed for ensuring on-going operating effectiveness of key controls. Furthermore. In accordance with the SBP's guidelines. The Board of Directors have instituted an effective Internal Audit Division which not only monitors compliance with the bank's policies. It can therefore only provide reasonable and not absolute assurance against material misstatement and loss. special review of work performed on the initial stages of the Bank's Internal Control Program was conducted by the External Auditors and the "Long Form Report" furnished to the management was submitted to the SBP. later during 2012.BANK ALFALAH LIMITED STATEMENT ON INTERNAL CONTROLS This Statement of Internal Controls is based on an ongoing process designed to identify the significant risks in achieving the bank's policies.Integrated Framework. Atif Aslam Bajwa Director & Chief Executive Officer March 01. as envisaged under the State Bank of Pakistan's (SBP) Internal Control Guidelines. as described above. 2011. the identification. and management of risks within each of the Bank's key activities. together with a comprehensive gap analysis of the control design. While concerted efforts have always been made to comply with the SBP Guidelines issued. the bank has carried out detailed documentation of the existing processes and controls. The bank is in the process of adopting an internationally accepted COSO Internal Control . The bank has also developed detailed remediation plans to address the gaps identified and ensure implementation of planned initiatives to adequately remediate the gaps in a timely manner. aims and objectives and to evaluate the nature and extent of those risks and to manage them efficiently. As per the SBP's instructions. For and behalf of the Board. further Internal Control improvements are expected from the bank's adoption of COSO framework. In addition. 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. procedures and controls and reports significant deviations regularly to the Board Audit Committee but also regularly reviews the adequacy of the Internal Control system. effectively and economically. The management believes that the bank's existing system of Internal Control is considered reasonable in design and is being effectively implemented and monitored. the overall stages of the program shall again be subjected to external review. This process has been continuously in place for the year ended December 31. and their continued evaluation and changes to procedures remains an ongoing process. 2012 Abu Dhabi ANNUAL REPORT 2011 14 . and has engaged a reputable advisory firm for assistance in this regard.

1962 (LVII of 1962). 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. 1962 (LVII of 1962). and (iii) the business conducted. 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. were necessary for the purposes of our audit. 1984 (XLVII of 1984). its comprehensive income. and (d) in our opinion Zakat deductible at source under the Zakat and Ushr Ordinance. It is the responsibility of the bank's management to establish and maintain a system of internal control. An audit includes examining. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the International Standards on Auditing as applicable in Pakistan. to the best of our knowledge and belief. its cash flows and changes in equity for the year then ended. and are in agreement with the books of account and are further in accordance with accounting policies consistently applied. 1984 (XLVII of 1984). Chartered Accountants Engagement Partner: Salman Hussain Dated: March 06. 1980 (XVIII of 1980) was deducted by the bank and deposited in the Central Zakat Fund established under section 7 of that Ordinance. statement of comprehensive income. profit and loss account. Ferguson & Co. An audit also includes assessing the accounting policies and significant estimates made by management. 2011 and the related profit and loss account. 1962 (LVII of 1962). we report that: (a) in our opinion. on a test basis. in which are incorporated the un-audited certified returns from the branches except for thirty five 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. and its true balance of profit. in the manner so required and give a true and fair view of the state of the bank's affairs as at December 31. We believe that our audit provides a reasonable basis for our opinion and after due verification. (c) in our opinion and to the best of our information and according to the explanations given to us the statement of financial position. F. and the Companies Ordinance. 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. evaluating the overall presentation of the financial statements. 1984 (XLVII of 1984). as well as. and the Companies Ordinance. 1984 (XLVII of 1984). and give the information required by the Banking Companies Ordinance. (ii) the expenditure incurred during the year was for the purpose of the bank's business. 2012 Karachi ANNUAL REPORT 2011 15 . cash flow statement and statement of changes in equity together with the notes forming part thereof (here-in-after referred to as the 'financial statements') for the year then ended. A. proper books of account have been kept by the bank as required by the Companies Ordinance. evidence supporting the amounts and disclosures in the financial statements. 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. 2011. and prepare and present the financial statements in conformity with the approved accounting standards and the requirements of the Banking Companies Ordinance.AUDITORS' REPORT TO THE MEMBERS We have audited the annexed statement of financial position of Bank Alfalah Limited (the bank) as at December 31. and the Companies Ordinance. which in the case of loans and advances covered more than sixty percent of the total loans and advances of the bank. (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.

512 13.178.497.152.255 6.458 468.204.839 LIABILITIES Bills payable Borrowings Deposits and other accounts Sub-ordinated loans Liabilities against assets subject to finance lease Deferred tax liabilities Other liabilities 14 15 16 17 12 18 5.556 2.802 41.net of tax 19 20 13.net Advances .487 7.919 9.491.247.059 22.544 NET ASSETS REPRESENTED BY Share capital Reserves Unappropriated profit Surplus on revaluation of assets .453 18.765.216 389.305.264 5.839.777.295 22.754 442. Chief Executive Officer Director Director Director ANNUAL REPORT 2011 16 .248.015.886 2.468.861 207.038 4.882.168.124 354.886 7.388.978 401.764 25.173.563 4.225 411.427.726.546 14.700.407 166.305.693 10.555 12.483.937.403.563 3.662 17.825 13.988 22.578.424.152 25.148.100.133 2.556 113.491.531.415.544 CONTINGENCIES AND COMMITMENTS 21 The annexed notes 1 to 45 and Annexures I and II form an integral part of these financial statements.net Fixed assets Deferred tax assets Other assets 6 7 8 9 10 11 12 13 50.819.683 421.826.425.BANK ALFALAH LIMITED STATEMENT OF FINANCIAL POSITION AS AT DECEMBER 31.290.396.258. 2011 Note 2011 2010 (Rupees in „000) ASSETS Cash and balances with treasury banks Balances with other banks Lendings to financial institutions Investments .038 13.567.311 7.777.192 115.197.841 16.860 19.521.533 13.768 198.179.

72 The annexed notes 1 to 45 and Annexures I and II form an integral part of these financial statements.21 10.232 (370.745 1.713 19.368.813 4.875 25 9.net of tax Profit available for appropriation 23 24 10.687.281.485 18.256 23.948.192 25.148.Current .000 1.161 14.293 968.718 5.687 1.544 77.net Other income Total non mark-up / interest income Non mark-up / interest expenses Administrative expenses 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 .188 5.728 29.302.586 12.688.906 13.753.674.500 14.3 28 29 Basic / diluted earnings per share 30 2.448 13.243.883) (71.178 25.693 1.695 3.609 3.263.855.459.685 (Rupees) 37.986.690.425 1.783.60 0.661) 45.23 26 27 18.Prior years Profit after taxation Unappropriated profit brought forward Transferred from surplus on revaluation of fixed assets .503.425 1.745 842.578.122.415.5 9.832.161 199.2 13.115.991.298.708. 2011 Note 2011 2010 (Rupees in „000) Mark-up / return / interest earned Mark-up / return / interest expensed Net mark-up / interest income Provision against loans and advances .383 9.300 1.665 12.329.260.510 2.056) 400.BANK ALFALAH LIMITED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED DECEMBER 31.239 191.718 3. Chief Executive Officer Director Director Director ANNUAL REPORT 2011 17 .net Unrealised (loss) / gain on revaluation of investments classified as held for trading .377.648.808 2.193 2.130 2.414.053) 1.864.093 (11.695 5.249 (1.Deferred .096 183.931 14.215.056 93.433.610.452 2.309 5.588 3.504 4.040 76.133.433.368.6 44.841 1.net Provision for diminution in the value of investments Bad debts written off directly Net mark-up / interest income after provisions Non mark-up / interest income Fee.530.417 140.696 4.470 204.930. commission and brokerage income Dividend income Income from dealing in foreign currencies Gain on sale of securities .860 29.708 1.294 5.080 6.367.

net of tax Total comprehensive income 3.859 3.443 The annexed notes 1 to 45 and Annexures I and II form an integral part of these financial statements.495) 3.083. 2011 2011 2010 (Rupees in „000) Profit after taxation Other comprehensive income Exchange differences on translation of net investment in foreign branches Comprehensive income . Chief Executive Officer Director Director Director ANNUAL REPORT 2011 18 .452 (419.503.635 37.474 1.BANK ALFALAH LIMITED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED DECEMBER 31.926 387.494 (437.471.483) 568.005.transferred to statement of changes in equity Components of comprehensive income not reflected in equity Surplus / (Deficit) on revaluation of available for sale securities .130 968.

425) 1.314) 37.513.776.992) 816.611.575 569.883) 145.510 2.497 1.272.405.2 13.949 2.918.999 69.437.828 (919.069.044) 27.920 4.525 18.952 61.047 62.100.423 (45.499) (419.709 11.274.379 6.043 (16.559) 12.6 26 27 5.817 196.696 (16.433.489.056 93.net Bad debts written-off directly Gain on sale of fixed assets .164.421) (418.BANK ALFALAH LIMITED CASH FLOW STATEMENT FOR THE YEAR ENDED DECEMBER 31.626.255. 2011 Note 2011 2010 (Rupees in „000) CASH FLOWS FROM OPERATING ACTIVITIES Profit before taxation Less: Dividend income Adjustments Depreciation Amortisation Provision against loans and advances .996 7.822.300) 25.666) (21.125.687 1.144 (145.150.719 (4.745 (204.502 6.459.999 Chief Executive Officer Director Director Director ANNUAL REPORT 2011 19 .544 56.150.968 182.816 1.718 (191.502) (1.651.953.017.813.368.000) 209.666 (1.722.291) 230.010 1.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 Investment in subsidiary company Dividend income received Investments in fixed assets Proceeds from sale of fixed assets Net cash used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES Redemption of sub-ordinated loans Dividend paid Net cash used in financing activities Exchange difference on translation of the net investments in foreign branches Increase in cash and cash equivalents Cash and cash equivalents at the beginning of the year Cash and cash equivalents at the end of the year The annexed notes 1 to 45 and Annexures I and II form an integral part of these financial statements.853.112.192 6.250 (230.991.804 192. 31 27 27 10.119.927.251) (2.620.242.389 (6.660.626) 22.294 183.474 661.302.494 (16.232.299) 1.328.325) (1.161 11.379.533.835) 54.847 47.243.net Provision for diminution in value of investments Provision against off-balance sheet obligations Provision against other assets Unrealised loss / (gain) on revaluation of investments classified as held for trading .079.053 5.882 (11.498 62.320 1.080) 6.372 172.989) (1.202 53.697) 755.504 (21.23 10.400) (10.722) 18.196 (750.559 (754.316 9.013) 881.21 18.394.386 (778.5 9.441.040 (3.3 9.659) 42.499) (418.690.913 (57.495) 7.151.379) (464.864.897 103.708) 5.361) (8.797) 29.082.285 (1.

2010 Transfer from surplus on revaluation of fixed assets . 2010 Changes in equity for 2010 Comprehensive income for the year ended December 31.491.767. 2009 @ 8% Balance at December 31. 1962.132 37.503.001 968. 2010 Changes in equity for 2011 Comprehensive income for the year ended December 31. 2011 Transfer from surplus on revaluation of fixed assets .626 3.495) 438.563 193.452 1.net of tax Transfer to statutory reserve Balance at December 31.BANK ALFALAH LIMITED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED DECEMBER 31.506 3.726.491.083.728 19.926 29.661.260 13.442 --------------------------------------------------- Balance at January 1.563 820.860 13.690) (1.248.059 * This represents reserve created under section 21(i)(a) of the Banking Companies Ordinance. The annexed notes 1 to 45 and Annexures I and II form an integral part of these financial statements.079.130 3.961.556 29.527 2. 2011 Share capital ---------------------------------------------------- Statutory reserve * Exchange translation Unappropriated Total reserve profit (Rupees in ' 000) 2.005.886 29.079.415.695 (1.635 29.839.325) 19.695 (700.474 858.758 (419.695 22.325) 2.net of tax Transfer to statutory reserve Final cash dividend for the year ended December 31.626) 5.770.563 700.690.690 2.695 (193. Chief Executive Officer Director Director Director ANNUAL REPORT 2011 20 .491. 2011 13.

4 dated February 17. the requirements of these standards have not been considered in the preparation of these financial statements. the Securities and Exchange Commission of Pakistan (SECP) has notified the Islamic Financial Accounting Standard (IFAS) 1 . The standard has not been adopted by Islamic branches of conventional banks pending resolution of certain issues e.e. In case the requirements differ. 2006. 1992. investments have been classified and valued in accordance with the requirements prescribed by the State Bank of Pakistan through various circulars. recording of inventories. the provisions of and directives issued under the Companies Ordinance. 'Revised Forms of Annual Financial Statements'. ANNUAL REPORT 2011 21 .Murabaha issued by the Institute of Chartered Accountants of Pakistan. the Surplus / (Deficit) on revaluation of available for sale securities (AFS) only. 1984.R. Pakistan Banks Association and Modaraba Association of Pakistan have taken up the issue with the SBP and SECP. but are restricted to the amount of facility actually utilised and the appropriate portion of mark-up thereon. Accordingly. the same shall continue to be shown separately in the Statement of Financial Position below equity. 2006. 10 dated August 26. Further. The management of the bank believes that as the SBP has defined the segment categorisation in the above mentioned circular. IFAS 1 was effective for financial periods beginning on or after January 1. The Bank's registered office is at B. after eliminating material inter branch transactions / balances.5 In addition.g. I. the SBP requirements prevail over the requirements specified in IFRS 8. 85 Islamic banking branches (2010: 80 branches) and 1 offshore banking unit (2010: 1 unit). the State Bank of Pakistan has issued various circulars from time to time. 1992 as a public limited company under the Companies Ordinance. invoicing of goods. concurrent application with other approved accounting standards in place for conventional banks. A. 3. may be included in the 'Statement of Comprehensive Income'. and Balance Sheet shall be renamed as 'Statement of Financial Position'. 7 dated April 20.1 STATEMENT OF COMPLIANCE These financial statements have been prepared in accordance with the approved accounting standards as applicable in Pakistan. two statement approach shall be adopted 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. 'Investment Property' for banking companies through BSD Circular Letter No. However. The financial results of the Islamic banking branches have been consolidated in these financial statements for reporting purposes. 2002 till further instructions. I. The Bank is engaged in banking services as described in the Banking Companies Ordinance. Chundrigar Road. Key financial figures of the Islamic Banking branches are disclosed in Annexure II to these financial statements. 'Financial Instruments: Recognition and Measurement' and International Accounting Standard (IAS) 40. separate 'Profit and Loss Account' and 'Statement of Comprehensive Income' shall be presented.4 IFRS 8 'Operating Segments' is effective for the Bank's accounting period beginning on or after January 1. 3.1 (Revised) 'Presentation of Financial Statements'. Lahore and Islamabad Stock Exchanges. etc. However. All banking companies in Pakistan are required to prepare their annual financial statements in line with the format prescribed under BSD Circular No. 1984. 2008. 1984. 3 3. The purchases and sales arising under these arrangements are not reflected in these financial statements as such. Accordingly.O 411(I)/2008 dated April 28. 2009. 3. 1962 and the directives issued by SECP and SBP prevail. Building. 1984. 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. 2010 has clarified that for the purpose of preparation of financial statements in accordance with International Accounting Standard . 2011 1 STATUS AND NATURE OF BUSINESS Bank Alfalah Limited (the Bank) is a banking company incorporated in Pakistan on June 21. 'Financial Instruments: Disclosures' through its notification S. 7 overseas branches (2010: 7 branches). 1962 and the directives issued by the Securities and Exchange Commission of Pakistan (SECP) and the State Bank of Pakistan (SBP). 1962 and is operating through 313 conventional banking branches including 19 sub branches (2010: 298 branches including 18 sub branches). Furthermore. Karachi and is listed on the Karachi. the provisions of and directives issued under the Companies Ordinance.2 The State Bank of Pakistan has deferred the applicability of International Accounting Standard (IAS) 39. the Securities and Exchange Commission of Pakistan has deferred the applicability of International Financial Reporting Standard (IFRS) 7. segment information disclosed in these financial statements is based on the requirements laid down by SBP. Banking Companies Ordinance. 2006.BANK ALFALAH LIMITED NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31. Banking Companies Ordinance. Accordingly. It commenced its banking operations on November 1.3 The State Bank of Pakistan vide its BSD Circular No. effective from the accounting year ended December 31. the above requirements have been adopted in the preparation of these financial statements. 2 BASIS OF PRESENTATION In accordance with the directives of the Federal Government regarding the shifting of the banking system to Islamic modes. 3.

either in the statement of changes in equity or in the notes to the financial statements. „Investment property‟. „Prepayments of a minimum funding requirement‟. The amendments are effective for annual periods beginning January 1. minimum funding requirements and their interaction‟. which is withdrawn. „Income taxes‟ (effective January 1. therefore.3. therefore. The Bank has adopted the above amendment with effect from January 1. 2012).3 and accordingly. The main change resulting from these amendments is a requirement for entities to group items presented in „other comprehensive income‟ (OCI) on the basis of whether they are potentially reclassifiable to profit or loss subsequently (reclassification adjustments). currently requires an entity to measure the deferred tax relating to an asset depending on whether the entity expects to recover the carrying amount of the asset through use or sale. The amendments do not address which items are presented in OCI. „Income taxes . It supersedes IAS 24. This amendment therefore introduces an exception to the existing principle for the measurement of deferred tax assets or liabilities arising on investment property measured at fair value. SIC 21. (b) IAS 24 (revised). The Bank's current policy and disclosures are in line with the requirements prescribed by SBP as described in note 3. 'Presentation of financial statements' (effective January 1. 2011. Because of the circumstances described in note 3. 2011: (a) IAS 1. 2012). „IAS 19 – The limit on a defined benefit asset. and the amendments correct this.7 New and amended standards and interpretations issued but not yet effective and not early adopted: 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. The revised standard clarifies and simplifies the definition of a related party and removes the requirement for government . It can be difficult and subjective to assess whether recovery will be through use or through sale when the asset is measured using the fair value model in IAS 40. The impact on the Bank will be as follows: to eliminate the corridor approach and recognise all actuarial gains and losses in other comprehensive income as they occur.2. Without the amendments. The management is yet to assess the full impact of the amendments. The amendment clarifies that an entity will present an analysis of other comprehensive income for each component of equity. 2012 and have not been early adopted by the Bank. Since IAS 40 has been deferred as mentioned note 3. the amendment will not have any impact on the Bank's financial statements. this amendment will not have any impact on the Bank's financial statements.related entities. 2012 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. issued in 2003. IAS 19.related entities to disclose details of all transactions with the government and other government . 3. The amendments correct an unintended consequence of IFRIC 14. 2011 but are considered not to be relevant or to have any significant effect on the Bank's operations and are. the above amendment does not have any impact on the Bank's financial statements.recovery of revalued non-depreciable assets‟. ANNUAL REPORT 2011 22 . 'Related party disclosures' issued in November 2009. will no longer apply to investment properties carried at fair value. 'Presentation of financial statements' (effective July 1. As a result of the amendments. The amendments also incorporate into IAS 12 the remaining guidance previously contained in SIC 21. entities are not permitted to recognise as an asset some voluntary prepayments for minimum funding contributions.3 above. 2011. The amendment does not have any significant impact on the Bank's financial statements. The revised standard does not have any effect on the Bank's financial statements. (a) IAS 1. to immediately recognise all past service costs. 2011). and to replace interest cost and expected return on plan assets with a net interest amount that is calculated by applying the discount rate to the net defined benefit liability / asset. 'Related party disclosures'. IAS 12. (b) (c) There are other new and amended standards and interpretations that are mandatory for the Bank's accounting periods beginning on or after January 1. 2013. This was not intended when IFRIC 14 was issued.6 New and amended standards and interpretations that are effective in the current year: The following new and amended standards and interpretations have been published and are mandatory for the Bank's accounting period beginning January 1. (c) IFRIC 14 (amendments). not disclosed in these financial statements. There are other new and amended standards and interpretations that are mandatory for the Bank's accounting periods beginning on or after January 1. „Employee benefits‟ was amended in June 2011 applicable for periods begining on or after January 1.

4 and 10) income taxes (notes 5.8 Early adoption of standards The Bank did not early adopt any new or amended standards in 2011. national prize bonds.1 Cash and cash equivalents Cash and cash equivalents comprise of cash in hand. The financial statements are presented in Pakistani Rupees. 4 BASIS OF MEASUREMENT 4.1 Accounting convention These financial statements have been prepared under the historical cost convention except that certain fixed assets are stated at revalued amounts. 5.3 and 9) classification and provisioning against advances (notes 5. These have been consistently applied to all years presented. 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) v) 5 classification and provisioning against investments (notes 5. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances.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.9 and 29) accounting for defined benefit plan (notes 5. These estimates and assumptions are reviewed on an ongoing basis. unless otherwise specified.3. 5.2 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. estimates and assumptions that affect the reported amounts of assets and liabilities and income and expenses. which is the Bank's functional and presentation currency. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The principal accounting policies applied in the preparation of these financial statements are set out below. It also requires management to exercise judgement in application of its accounting policies. 4.10 and 34) depreciation / amortisation of operating fixed assets (notes 5. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period. 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. or in the period of revision and future periods if the revision affects both current and future periods. ANNUAL REPORT 2011 23 .5 and 11). The amounts are rounded off to the nearest thousand. and held for trading and available for sale investments and derivative financial instruments are measured at fair value. 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. any overdrawn nostro accounts and call lendings having maturity of three months or less. balances with treasury banks. balances with other banks in current and deposit accounts.

3 Investments 5. interest rate movements.3. 5. other than those in subsidiaries and associates. 5.2Regular way contracts All purchases and sales of investments that require delivery within the time frame established by regulation or market convention are recognised at trade date. Subsidiary Subsidiary is an entity over which the Bank has significant control.1Classification The Bank classifies its investments as follows: Held for trading These are investments. 5.3.3Initial recognition and measurement Investments other than those categorised as 'held for trading' are initially recognised at fair value which includes transaction costs associated with the investment. Associates Associates are all entities over which the Bank has significant influence but not control. quoted securities other than those classified as 'held to maturity' are subsequently remeasured to market value. which are either acquired for generating a profit from short-term fluctuations in market prices. Surplus / (deficit) arising on revaluation of securities classified as 'available for sale' is included in the statement of comprehensive income but is taken to a separate account shown in the statement of financial position below equity.3. 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.3. Investment in associates is carried at cost less accumulated impairment losses. if any. 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. dealers margin or are securities included in a portfolio in which a pattern of short-term profit taking exists. Surplus / (deficit) arising on revaluation of quoted securities which are 'held for trading' is taken to the profit and loss account.4Subsequent measurement In accordance with the requirements of State Bank of Pakistan. Investment in subsidiary is carried at cost less accumulated impairment losses. if any. Investments classified as 'held for trading' are initially recognised at fair value and transaction costs are expensed in the profit and loss account.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. Available for sale These are investments. Investments classified as 'held to maturity' are carried at amortised cost in accordance with the requirements specified by the State Bank of Pakistan. which do not fall under the 'held for trading' and 'held to maturity' categories. ANNUAL REPORT 2011 24 . 5. which is the date at which the Bank commits to purchase or sell the investments.

Advances are written off when there are no realistic prospects of recovery. including guaranteed residual value. useful lives and depreciation method are reviewed and adjusted. 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. Assets under Ijarah are depreciated over the period of lease term. Ijarah Assets leased out under 'Ijarah' are stated at cost less accumulated depreciation and accumulated impairment losses. the cumulative loss that has been recognised directly in surplus / (deficit) on revaluation of securities on the statement of financial position below equity is removed therefrom and recognised in the profit and loss account. Investment in subsidiary and associates are carried at cost. if any. in the event the asset is expected to be available for re-ijarah. 5.2 to these financial statements. For investments classified as held to maturity. less accumulated impairment losses. ANNUAL REPORT 2011 25 . The net provision made / reversed during the year is charged to profit and loss account and accumulated provision is netted-off against advances. Gains or losses on disposals of investments during the year are taken to the profit and loss account. excluding investment in subsidiary and associates are valued at lower of cost and the break-up value. 5. A significant or prolonged decline in fair value of an equity investment below its cost is also considered an objective evidence of impairment. depreciation is charged over the economic life of the asset using straight line basis. Net investment in finance lease Leases where the Bank transfers substantially all the risks and rewards incidental to the ownership of an asset are classified as finance leases.3.5Impairment 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. the impairment loss is recognised in the profit and loss account. The residual values. if any. A receivable is recognised on commencement of lease term at an amount equal to the present value of the minimum lease payments. so as to produce a constant periodic return on the outstanding net investment in lease. 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. Historical cost includes expenditures that are directly attributable to the acquisition of the items. Provisions pertaining to overseas advances are made in accordance with the requirements of regulatory authorities of the respective countries. However. if any. if appropriate. 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.5 Fixed assets Tangible assets Fixed assets except office premises are shown at historical cost less accumulated depreciation and accumulated impairment losses. if any.Unquoted equity securities. if any. The depreciation charge for the year is calculated after taking into account residual value. Depreciation is charged to income by applying the straight-line method using the rates specified in note 11. at each reporting date. 5. 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.4 Advances Loans and advances Loans and advances including net investment in finance lease are stated net of provisions against non-performing advances. Office premises (which includes land and buildings) are stated at revalued amount less accumulated depreciation. In case of impairment of available for sale securities. Unearned finance income is recognised over the term of the lease.

5. The useful lives and amortisation method are reviewed and adjusted. 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. All expenditure connected with specific assets incurred during installation and construction period are carried under this head.8 Impairment The carrying amount of assets is reviewed at each reporting date to determine whether there is any indication of impairment of any asset or group of assets.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. Subsequent gains in fair value less costs to sell are recognised to the extent they do not exceed the cumulative impairment losses previously recorded. Intangible assets Intangible assets having a finite useful life are stated at cost less accumulated amortisation and accumulated impairment losses. 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 recoverable amount of such assets is estimated and impairment losses are recognised immediately in the financial statements. The charge for current tax also includes adjustments. in which case it is recognised in equity. A non-current asset is not depreciated while classified as held for sale or while part of a disposal group classified as held for sale. if appropriate at each reporting date. ANNUAL REPORT 2011 26 . 5. which is adjusted against related revaluation surplus to the extent that the impairment loss does not exceed the surplus on revaluation of that asset. 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. The resulting impairment loss is taken to the profit and loss account except for impairment loss on revalued assets. Intangible assets having an indefinite useful life are stated at acquisition cost. if any. if any. 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. 5. 1984. Subsequent costs are included in the asset's carrying amount or are recognised as a separate asset. 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. if any. Income tax expense is recognised in the profit and loss account except to the extent that it relates to items recognised directly in equity.6 Capital work in progress Capital work-in-progress is stated at cost less accumulated impairment losses. 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. which arises from assessments / developments made during the year. 5. as appropriate.9 Taxation Income tax expense comprises current and deferred tax. 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. less impairment loss. Surplus arising on revaluation is credited to the surplus on revaluation of fixed assets account. If any such indication exists. where considered necessary relating to prior years. These are transferred to specific assets as and when assets become available for use. if any.Maintenance and normal repairs are charged to income as and when incurred. The surplus on revaluation of fixed assets to the extent of incremental depreciation charged on the related assets is transferred to unappropriated profit. Such intangible assets are amortised using the straight-line method over their estimated useful lives.

Income Taxes. 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. 5. Expected recoveries are recognised by debiting the customer‟s account. Gratuity is payable to staff on completion of the prescribed qualifying period of service under the scheme.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 also recognises a deferred tax asset / liability on the deficit / surplus on revaluation of fixed assets and securities. 5. Deferred tax asset is reduced to the extent that it is no longer probable that the related tax benefits will be realised. 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. Charge to the profit and loss account is stated net -of expected recoveries. legal or constructive. Contributions to the fund are made on the basis of actuarial recommendations. 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 . 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.33 percent of basic salary.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. Other provisions are recognised when the Bank has a present. Borrowing costs that are directly attributable to the acquisition. 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. Provisions are reviewed at each reporting date and are adjusted to reflect the current best estimate. 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 reporting date. 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. obligation as a result of past events. ANNUAL REPORT 2011 27 . 5.11 Borrowings / deposits and their cost a) b) Borrowings / deposits are recorded at the proceeds received. The Bank has no further payment obligations once the contributions have been paid. The Bank expects most acceptances to be simultaneously settled with the reimbursement from the customers. Projected Unit Credit Method is used for the actuarial valuation. Deferred tax liability is not recognised in respect of taxable temporary differences associated with exchange translation reserves of foreign branches. 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. Acceptances are accounted for as off balance sheet transactions and are disclosed as contingent liabilities and commitments.13 Acceptances Acceptances comprise undertakings by the Bank to pay bills of exchange drawn on customers.

Forward contracts other than contracts with the State Bank of Pakistan relating to foreign currency deposits are valued at forward rates applicable to the respective maturities of the relevant foreign exchange contract. Commitments Commitments for outstanding forward foreign exchange contracts are disclosed at contracted rates.14 Revenue recognition Advances and investments Mark-up income on loans and advances. Where debt securities are purchased at a premium or discount. The forward cover fee payable on such contracts is amortised over the term of the contracts. Fee. where necessary. Foreign operations Assets and liabilities of foreign operations are translated into rupees at the exchange rate prevailing at the reporting date. Transactions and balances Transactions in foreign currencies are translated into Pakistani rupees at the exchange rates prevailing on the transaction date. Ijarah income is recognised on an accrual basis as and when the rental becomes due. in accordance with the requirements of the Prudential Regulations of the State Bank of Pakistan and recognised on receipt basis. Gains / losses on termination of leased contracts. 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. debt securities investments and profit on murabaha and musharika financing are recognised on a time proportion basis. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the profit and loss account. 5. ANNUAL REPORT 2011 28 . Income is recognised net of depreciation charged in the profit and loss account. Other income is recognised on accrual basis. Lease financing / Ijarah Financing method is used in accounting for income from lease financing. Dividend income is recognised at the time when the Bank‟s right to receive the dividend has been established.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. using the effective yield method. 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. Commission on guarantees is recognised on time proportion basis. documentation charges. commission and brokerage Fee. These are recognised in the profit and loss account on disposal. 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. 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 reporting date. those premiums / discounts are amortised through the profit and loss account over the remaining maturity. Unrealised lease income and mark-up / return on non-performing advances are suspended. Forward purchase contracts with the State Bank of Pakistan relating to foreign currency deposits are valued at the spot rate prevailing on the reporting date. Under this method.5. front end fee and other lease income are recognised as income when they are realised.

Corporate finance Corporate banking includes services provided in connection with mergers and acquisition. real estate. high yield).18 Dividend and appropriation to reserves Dividend and appropriation to reserves. 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. banking services. private lending and deposits. which is subject to risks and rewards that are different from those of other segments. foreign exchanges. Income and expense items of such assets and liabilities are also off-set and the net amount is reported in the financial statements. or in providing products or services within a particular economic environment (geographical segment). lending and repos.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. 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. guarantees. own position securities. brokerage debt and prime brokerage. 5. or to realise the assets and to settle the liabilities simultaneously. lending. syndication. funding. debts (government. Any changes in the fair value of derivative financial instruments are taken to the profit and loss account. banking service. 5. leasing. IPO and secondary private placements. commodities. underwriting.19 Earnings per share The Bank presents basic and diluted earnings per share (EPS) for its shareholders. 5. privatisation. Retail banking It includes retail lending and deposits. securitisation. merchant / commercial / corporate cards and private labels and retail.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. trade finance. b) Geographical segments The Bank operates in three geographical regions being: Pakistan Asia Pacific (including South Asia) Middle East ANNUAL REPORT 2011 29 . credit. equity. after the reporting date. equity. except appropriations which are required under the law. research. a) Business segments Trading and sales It includes fixed income. are recognised in the Bank's financial statements in the year in which these are approved. trust and estates. Commercial banking Commercial banking includes project finance.20 Segment reporting A segment is a distinguishable component of the Bank that is engaged either in providing product or services (business segment).5. corporate finance. 5. The Bank's primary format of reporting is based on business segments. if any. factoring. All derivative financial instruments are carried as assets where fair value is positive and as liabilities where fair value is negative. bills of exchange and deposits. trust and estates investment advice. export finance.

005 16.680.227.197.504.1 7.245. 6. 18.486 157.588 3.134 2.608.255 7.287.435.3 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.590 1.4 Deposits with other central banks are maintained to meet their minimum cash reserves and capital requirements pertaining to the foreign branches of the Bank.2 7.981.322. The State Bank of Pakistan has not remunerated these deposit accounts during the year.980 7.235 4.023.3 18.277 5. Profit rates on these deposits are fixed by SBP on a monthly basis.803 15.4 4.841 6.273 million) Foreign currencies With State Bank of Pakistan in Local currency current accounts Foreign currency current accounts Foreign currency deposit accounts With other central banks in Foreign currency current accounts Foreign currency deposit accounts With National Bank of Pakistan in Local currency current account National Prize Bonds 5.167.928. 2008. 1956.775 50.619.509 8.3 ANNUAL REPORT 2011 30 .649.220 2. 7 BALANCES WITH OTHER BANKS In Pakistan On current accounts On deposit accounts Outside Pakistan On current accounts On deposit accounts 1.294 6. 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). 6.827 27.840 2.081.Note 2011 2010 (Rupees in „000) 6 CASH AND BALANCES WITH TREASURY BANKS In hand Local currency (including in transit 2011: Rs.034 6.798 41.4 6. 65 million.487 1.822 10.420 1.451 4.326.1 6.628.538 17.469.011.1 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.539 2.179.549 6. 2010: Rs. 9 dated December 3. 14 dated June 21.2 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. 6.784 7.882.248.050 5.889.697 25. 2007.285.424.850.2 As per BSD Circular No.662 2.

497.715.715. the Bank is entitled to earn interest from the correspondent banks at agreed upon rates.407 1.855 1.727 . 8.6.556 These represent short-term lendings to financial institutions against investment securities.75% per annum) with maturities upto March 2012 (2010: August 2011). These carry mark-up at rates ranging from 11.782.182 .08% per annum (2010: 0.765.765.110.556 8.00% per annum).7.00% per annum (2010: 5.110.721 360.182 4.374 6.1 These represent lendings to financial institutions at interest rates upto 20% per annum (2010: 20% per annum) with maturities upto May 2013 (2010: May 2013).654.110.2 Particulars of lendings to financial institutions In local currency In foreign currencies 8.576 1.455 105.354.576 ANNUAL REPORT 2011 31 .374 1. 7.4 Securities held as collateral against lendings to financial institutions Note Held by Bank ------------------------------------ 2011 Further given as collateral 2010 Total Held by Bank collateral Further given as Total Rupees in '000 .831 7. at interest rates ranging from 0.00% to 13.1 This represents funds deposited with various banks at a profit rate of 5.4 1.727 .182 Market Treasury Bills Pakistan Investment Bonds 6.004.3 & 8.669.004. 7.654.455 360.1.3 This includes placements of funds generated through foreign currency deposits scheme (FE-25).828.1 8.45% per annum (2010: 13.576 7.182 6.3 6.1. Note 2011 2010 (Rupees in „000) 8 LENDINGS TO FINANCIAL INSTITUTIONS Call money lendings Repurchase agreement lendings (Reverse Repo) 8.20% to 2.75% per annum) with maturities upto January 2012 (2010: January 2011).855 105.354.90% to 12.407 4.721 6.6.110.497. The balance is current by nature and on increase in the balance above a specified amount.831 6. 8.17% to 3.576 1.2 This includes amount held in Automated Investment Plans.715.

053) 265.509.568) - 166.034.772 856.217.299 24.165.536 1.496.890 26.124) (5.000 39.836.348 131.000 115.775.746.000 165.189.999 5.532.937 395.258.827.335 11.Unlisted Sukuk Bonds Held to maturity securities Market Treasury Bills Pakistan Investment Bonds Term Finance Certificates Pakistan Dollar Bonds Pakistan Euro Bonds Credit Linked Note Overseas Bonds Preference Shares .800 1.995 5.980 628.1.090 40.376.182 1.473.425.360 1.946.791 111.379.Listed Available for sale securities Market Treasury Bills Pakistan Investment Bonds Fully paid up ordinary shares / units .568) 113.net Surplus / (Deficit) on revaluation of available for sale securities .350 (4.995 12.746.852 40.768 111.net Total investments 9.380.955 4.480 420.9 9.249.496.298 8.604.000 5.509.673 845.531.980 19.176 39.301 1.983 202.744 3.213.Unlisted Term Finance Certificates Preference Shares .216 120.821 1.796 (11.790.480 395.809.619 628.949 76.692.995 20.524.000 39.997 8.1 INVESTMENTS .239 3.327 39.621.852 .483 826.686.879 (11.270 1.300 (313.804.741.345 114.17.673 895.567 120.408.744 5.890 5.588.299 24.729 856.216 202.679 170.208.924.686.882 1.388 24.928 1.095 8.392 68.132 2.200 67.379.2 9.264.740 125.570.224 5.162 38.348 .809.734.473.000 4.567 4.258.069.000 40.816 3.879 (4.367 19.176 26.165.090 11.809.095 4.955 966.784.879 69.213.931.053) 278.372 19.189.946.617 1.300 (318.937 895.370.585.183.486.453.774 5.325 ANNUAL REPORT 2011 32 .617 129.114.678) 113.408.036 11.Unlisted Sukuk Bonds Associates Subsidiary Alfalah Securities (Private) Limited Investments at cost Less: Provision for diminution in the value of investments Investments (net of provisions) (Deficit) / Surplus on revaluation of held for trading securities .554) (2.229.392 68.983 3.21 9.549.000 40.237.224 799.23 20.554) 166.182 40.861 58.740 17.729 5.554) 160.850.619 3.821 129.044.772 449.587 449.Listed Fully paid up ordinary shares / units .604.342.205 5.836.816 8.827.692.585.995 64.587 845.367 5.367 4.588.769 6.249.183.949 76.155.132 2.034.532.1 6.483 826.342.335 966.000 5.836.036 11.473.836.920 420.069.256 161.563 1.19.030 3.563 1.162 4.327 799.920 19.807 (2.NET Investments by types: 2011 Note Held by Bank Given as collateral Total Held by Bank 2010 Given as collateral Total ------------------------------------Rupees in '000-----------------------------------Held for trading securities Market Treasury Bills Pakistan Investment Bonds Fully paid up ordinary shares / units .

net Surplus / (Deficit) on revaluation of available for sale securities .13 9.Market Treasury Bills .861 Investment in subsidiary company Investment in associates Total investments at cost Provision for diminution in value of investments (Deficit) / Surplus on revaluation of held for trading securities . five. 1962. Notes and Participation Term Certificates .19 & 9. Bonds.761 27.2 Investments by segments Federal Government Securities .367 24.15 9. ANNUAL REPORT 2011 33 .4 9.849.Overseas Bonds .531.Listed TFCs .11 9.643.554) (11.382 1. Debentures.653 129.01% to 13.999.496.Sukuk Bonds .Preference Shares .811.000 5.425.772 83. 35 million (2010: Rs.308.Unlisted 9.17 1.539.958.5 Pakistan Investment Bonds (PIBs) are for periods of three.345 1.6 9.036 1.686.33% per annum (2010: 12.024.5 9. ten and fifteen years.805.Overseas Government Bonds .488 395.183.Pakistan Euro Bond 9.530.8 9.000 799.678) 113.081 420.744 1.Un-listed TFCs .342.166.Pakistan Dollar Bond .850.030 166.983 6.10 9.932 19.Sukuk Bonds .402.4 Market Treasury Bills are for periods ranging from six months to one year.208.729 5.00% per annum) with maturities from February 2012 to August 2021 (2010: December 2011 to July 2020).349.250 3.694.16% to 13. 35 million) pledged with the National Bank of Pakistan as security to facilitate Telegraphic Transfer discounting facility.787 4.Pakistan Investment Bonds .762 1.673 845.483 170.Listed companies / mutual funds .031.16 9.349.23 20.496.614 76.980.95% per annum) with maturities upto November 2012 (2010: December 2011).807 (2.Un-listed companies .046.00% to 14.218 Term Finance Certificates. The rates of profit range from 8.Note 2011 2010 (Rupees in „000) 9.1 9.768 9.3 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.439 449.617 160.Credit Linked Note 9.21 9.953.2 (4.026 Fully Paid up Ordinary Shares / Preference Shares / Units / Certificates .549 1.18 9.819 826.585.053) 278.568) 3. 9.924.400 2.162 4.821 242.128 40.14 9.281 45.9 81. 9. These also include PIBs having face value of Rs.12 2.00% per annum (2010: 8.949 115.7 9.506 12.337 20.910.720 1.300 (318.net Total investments 9.19.476.587 156.00% to 12. The effective rates of profit on Market Treasury Bills range between 11.879 856.937 895.

876 million) issued by the Government of Pakistan.125%) and are due for maturity in March 2016 (2010: March 2016).64% per annum) respectively.48% per annum) while Government of Bangladesh bond carries profit at 10.636 1.14% per annum) and 13.951 10.257 68.733.000 3.000 297.000 400.45% per annum (2010: 13.000 1.38% to 3.000 50.000 972. 2011 2010 (Number of shares / certificates / units) MUTUAL FUNDS Crosby Pheonix Fund (Rs 100 per unit) AMZ Plus Income Fund Dawood Money Market 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 United Islamic Income Fund OIL AND GAS Pakistan Oilfields Limited Pakistan Petroleum Limited Pakistan State Oil Company Limited CHEMICALS Dewan Salman Fiber Limited Engro Corporation Limited Fatima Fertilizer Company Limited Fauji Fertilizer Company Limited Lotte Pakistan PTA Limited FORESTRY AND PAPER Security Papers Limited INDUSTRIAL METALS AND MINING Crescent Steel & Allied Products Limited International Steels Limited 2011 2010 (Rupees in „000) 101.534 504.000 30.014 284 25. These bonds carry interest at 7.679 million (2010: 5.95 million (2010: Rs 85.626 million (2010: AFN 1.29% per annum (2010: 2.542 127.046 million (2010: Rs 18.000 55.252 2.901 8.441 15.369.000.951 140.28% per annum (2010: 12.926 163. 9.000 110.882 50.9 This represents Pakistan Euro Bonds of US Dollar 9. The rates of profit on Government of Afghanistan bond ranges from 2.991 15.595.95 million) for a period of five years.059 23. This represents sukuk bonds of Rs.759 15.500.095.000 381.812% per annum) and are due for maturity in March 2016 (2010: March 2016). 39.165 150.728.538 million) issued by the Water and Power Development Authority (WAPDA) for a period of ten years.000 9.659 150. 9.000 30.228.700 million (2010: BDT 66. 9.55% per annum (2010: 12. 35.527 41.059 - 25.000 600.000.290.791 5.979 943.355 9.014 - ANNUAL REPORT 2011 34 .413 100.894 50.979 30.720 million) issued by the State Bank of Pakistan for a period of three years and SSGC sukuk of Rs.60% per annum (2010: 10.000 150.60% per annum).539.700 million) respectively.943 million (2010: Rs 1.000 1.125% per annum (2010: 8.325 51.079 17.000 million) issued by the Government of Pakistan. These bonds carry interest at 7.10% to 3.919 37.685 16.556 500.644.957 million (2010: 9.387 400.000 15.7 9.342 49.673 60. ijarah sukuk of Rs.6 These represent Overseas Government Bonds issued by the Government of Afghanistan and the Government of Bangladesh amounting to AFN 2.30% to 13.000 972.919 29.000 175.67% to 13.125% per annum (2010: 7. The rates of profit on these bonds ranges between 12.448 41.000 150.56% per annum).12% to 13. These bonds are due to mature by March 2012 (2010: December 2011) and March 2014 (2010: March 2014) respectively.000 504.630.10 Particulars of investments in listed companies / mutual funds include the following: The paid-up value of these shares / units / certificates is Rs 10 unless otherwise stated.1.829 million) and BDT 66.551. between 11.000 5.9.000 - 911 - 962.840 1.64% to 14.8 This represents Pakistan Dollar Bonds of US Dollar 4.411 181.500 50.504 962.784 26.000 600.

929 64.000 3.639 523.980 683 4.991 72.269 36.1) 2011 2010 (Rupees in „000) 104.126 75.186.926 14.718 1.162 1.340.710 30.318.942 7.304 - 39.924 3.667.619 460.751 3.318.162 21.000 1.734 2.155 454.403.603 918 10.339.710 - 100.169 1.750.474 24.279 74.000 1.000 300.675 25.G Khan Cement Limited Fauji Cement Company Limited Fecto Cement Limited Lucky Cement Limited PERSONAL GOODS Azgard Nine Limited Hira Textile Mills Limited Nishat (Chunian) Mills Limited FIXED LINE TELECOMMUNICATION Pakistan Telecommunication Company Limited ELECTRICITY The Hub Power Company Limited Kot Addu Power Company Limited Karachi Electric Supply Company Limited Kohinoor Energy Limited Nishat (Chunian) Power Company Limited Nishat Power Company Limited Southern Electric Power Company Limited BANKS Allied Bank Limited Bank Al Habib Limited MCB Bank Limited National Bank of Pakistan NIB Bank Limited Samba Bank Limited United Bank Limited ICB Islamic Bank Limited NON-LIFE INSURANCE Adamjee Insurance Company Limited FINANCIAL SERVICES KASB Securities Limited Wateen Telecom Limited * Recategorised during the year from investment in associates (Refer note 9.2011 2010 (Number of shares / certificates / units) CONSTRUCTION AND MATERIALS Al-Abbas Cement Company Limited Attock Cement Company Limited D.977 - 210.000 1.504 1.770 50.289.970.697 2.026 345.640 11.525 29.570 66.162.970.639 76.639.888.000 7.055 7.000 852.342.640 2.000 100.000 239.670 13.127.887 1.653 ANNUAL REPORT 2011 35 .760 226.026 87.139 121.000 22.846 47.273.000 4.000 4.341 35.476.534 6.135 60.000 250.935 1.924 * 417.494 75.935 7.19.000 7.469 212.000 1.125.916 2.000 2.088 319 37.098 6.021 400.403.639 121.895 2.980 - 1.145 2.667.465.345 1.287 6.800.500.472 37.654 15.279 3.860 1.251 38.064 46.000 1.977 - 2.

000. 10) BRAC Bank Limited Redemption: Annual redemptions over 5 years ending in 2012 Break-up value per share: BDT. 9.M. 7. Zaeem Break-up value per share: Rs.52 Period of financial statements: June 30.312 1.796 4.042 ANNUAL REPORT 2011 36 .000 5. 2011 (Audited) Al-Hamra Avenue (Private) Limited Chief Executive: Mr.37 Period of financial statements: June 30.000 3. 25.000.000 50.000.59 Date of financial statements : December 31.9. 2010 Chief Executive : Mr.985 121.531 572. S.000 70. 100) 10.1) 2011 2010 (Rupees in „000) 5.000. Habib Ahmed Break-up value per share: Rs.000 70.42 Date of financial statements : December 31.000 109.000.725 5. 2010 Chief Executive : Mr.19.000.096 7.000 50.000.000. 2010 (Audited) Al-Hamra Hills (Private) Limited Chief Executive: Mr.366. Habib Ahmed Break-up value per share: Rs.496.725 24 24 4. Syed Mahbubur Rahman (Paidup value of each shares is BDT.12 Investments in preference shares . 2010 (Un-audited) Warid Telecom (Private) Limited * Recategorised during the year from investment in associates (Refer note 9.5 Period of financial statements: June 30. 0.821 9.000 * 4.000 1.096 4. Lazaro Campos Break-up value per share: Rs.11 Investments in unlisted companies 2011 2010 (Number of shares) 572. 323.000 5. Khondoker Monir Uddin (Paid-up value of each shares is BDT.000 STS Holdings Limited Redemption: Semi annual redemptions over 5 years ending in 2012 Break-up value per share: BDT.617 129. 2010 (Audited) Society for Worldwide Interbank Financial Telecommunication Chief Executive: Mr. 351.998 36.531 Pakistan Export Finance Guarantee Agency Limited Chief Executive: Mr.Unlisted 2011 2010 (Number of shares) 2011 2010 (Rupees in „000) 1.000 7.182 Period of financial statements: December 31.

Maturity: Eight years from date of disbursement i.000 25.(PACRA) Chief Executive: Mr. October 31.000 - 45. 2011 (Audited) Chief Executive: Mr.000 160.000 15.760 99.390 1.000) certificates of Rs.e.000 each Mark up: Average Six Months KIBOR + 200 basis points prevailing one working day prior to the beginning of each semi annual period.000) certificates of Rs.000 2.12 Date of financial statements: June 30. Mohammad Rafiquddin Mehkari Standard Chartered Bank (Pakistan) Limited . 2011 (Audited) Chief Executive: Mr.13 Particulars of Term Finance Certificates .000 First Dawood Investment Bank Limited Redemption: Preference dividend @ 4% on cumulative basis and redeemable at par after 5 years. 96.16 percent of the issue amount will be re-paid equally in each of the redemption periods during the first four years. 2013 Rating: AA.Quoted. 2010 Chief Executive : Mr.(3rd Issue) 10.800 ANNUAL REPORT 2011 37 . Mohsin Ali Nathani 34. 0.02 percent of principal semi-annually in the first ninety months and remaining principal at maturity. Faridur Rehman Khan (Paid-up value of each shares is BDT. Redemption: A nominal amount i.983 9.960 47. 1. February 1. 2013 Rating: AAA (PACRA) Chief Executive: Mr.500. 100) 1.000 Trust Investment Bank Limited Redemption: Any time after the issuance of preference shares Break-up value per share: Rs.2011 2010 (Number of shares) 2011 2010 (Rupees in „000) - 375. Secured 2011 242.000 United Hospitals Limited Redemption: Annual redemptions over 5 years ending in 2011 Break-up value per share: BDT. Abdus Samad Khan 15. 4.500.000 (2010: 20.744 2010 (Rupees in „000) Askari Bank Limited (2nd Issue) 20.000 (2010: 10. Break-up value per share: Rs.e.97 Date of financial statements : June 30.420 99. 5.500.000 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.e. Hamuyun Nabi Jan 25. Maturity: Seven years from the date of issue i.500.000 2.40 Date of financial statements: June 30. 5.

25 percent respectively starting from the eighty-fourth month. Maturity: Seven years from the date of issue i.686 (2010: 7.086 46.000) certificates of Rs. Habib Faysal Bank Limited 578 (2010: 578) certificates of Rs.e. Maturity: May 2012 Rating: AA+ (PACRA) Chief Executive: Mr.442 2.000 (2010: 80.50% per annum with no floor and cap Redemption: The instrument is structured to redeem 0.000 each Mark up: Average Six months KIBOR + 1.VIS) Chief Executive: Khalid A Sherwani Pakistan Mobile Communication (Private) Limited 80. Rating: AA.00 percent per annum Redemption: The TFC is structured to redeem 0. Maturity: July 2012 Rating: AA (PACRA) Chief Executive: Mr. Maturity: September 2014 Rating: AA.50 percent and a cap of 10.08 percent of principal in the first 24 months in 4 equal semi-annual installments and the remaining 99. Rashid Khan ORIX Leasing Pakistan Limited 37. The remaining principal is to be redeemed in semi annual installments during the tenor of the TFC. 5.25 percent of principal semi-annually in the first seventy-eight months and the remaining principal in three semi-annual installments of 33.000 each Mark up: Average Six Months KIBOR (Ask Side) + 285 basis points per annum Redemption: The instrument is structured to redeem 0.350) certificates of Rs.800 38.680 332.427 199.686) certificates of Rs.350 (2010: 9. 5.000 each Mark up: Average Six Months KIBOR + 1.22 percent of the principal would be redeemed during the last 36 months in six equal semi-annual installments.368 1.(PACRA) Chief Executive: Mr. Maturity: Eight years from the date of disbursement i. Abbas D.000 (2010: 37.2011 2010 (Rupees in „000) Bank Al Habib Limited The paid-up value of these shares / units / certificates is Rs 10 unless otherwise stated.92 percent of principal in four annual installments after a grace period of fifty-four months. 5. Humayun Murad 30.90 percent per annum with no floor and cap Redemption: The instrument is structured to redeem 0.(JCR .000 each Mark up: Average Six months KIBOR + 1.638 ANNUAL REPORT 2011 38 . 9.02 percent of principal semi-annually in the first 48 months and remaining amount in 6 semi-annual installments. 5. 2013 Rating: A+ (PACRA) Chief Executive: Mr.50 percent per annum with a floor of 3. Naved A Khan Allied Bank Limited 7.e. 5.163 31.809 92.000) certificates of Rs. February 2013.000 each Mark up: Average Six month KIBOR (Ask Side) + 190 basis points (no floor no cap) Redemption: The TFC is structured to redeem 97.353 38.24 percent of principal in the first 72 months and the remaining principal in 4 equal semi-annual installments of 24. May 31.94 percent each of the issue amount respectively starting from the 78th month.

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.024.91 percent in the 60th month and the remaining 49. Mohammad Rafiquddin Mehkari 1.920 ANNUAL REPORT 2011 39 .(PACRA) Chief Executive: Mr. with a floor of 8 percent per annum and cap of 16 percent per annum.50 percent (for one to five years) Average Six Months KIBOR plus 2. 5. Munaf Ibrahim Financial Receivables Securitization Company Limited 15.92 percent each.e. Maturity: Five years from the issue date i.e.000 (2010: 10.576 24.000) certificates of Rs.000 (2010: 90.308.000) certificates of Rs. Maturity: May 2012 Rating: AA (PACRA) Chief Executive: Mr.000 each Mark up: Average Six Months KIBOR plus 2.000 each Mark up: Average Six Months KIBOR + 1.00% p. 5. 2009 and remaining issue amount in four equal semi-annual installments of 24. Redemption: The instrument is structured to redeem 0.a.18 percent of principal in the first 54 months.820 74. Fawad Ahmed Mukhtar Askari Bank Limited (3rd Issue) 90.697 55. 2013 Rating: AA (PACRA) Chief Executive: Mr. Maturity: August 2019 Rating: AA. 5.000) certificates of Rs.640 449.000 39.955 49.50 percent per annum Redemption: Principal redemption in six stepped-up semi-annual installments starting from the issue date. September 28. 5. starting from the 102nd month after the issuance.2011 2010 (Rupees in „000) Jahangir Siddiqui & Company Limited 10.792) certificates of Rs.000 each Mark up: Average Six months KIBOR + 2. 49. Muhammad Suleman Kanjiani Pak Arab Fertilizers Limited 20.932 449.000 (2010: 20.95 percent (for six to ten years) Redemption: This instrument is structured to redeem 0. the issuer may call the TFC in part or full on any profit payment date subject to thirty days prior notice.000 each Mark up: Average Six months KIBOR + 2.91 percent in the last six months. February 28.50% with a floor of 6 percent per annum and ceiling of 16 percent per annum.32 percent of total issue amount in the first ninety six months after issuance i.382 1. Maturity: January 2014 Rating: A+ (PACRA) Chief Executive: Mr.000 94.792 (2010: 15.

1 20.00 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.note 9.000 each Mark-up: Average Six Months KIBOR (Ask Side) + 1.000) certificates of Rs.90 percent each of the issue amount respectively from 60th month.000) certificates of Rs. the issuer has a Call Option exercisable in full at any time after 1 year on a coupon date. Abdus Samad Khan Azgard Nine Limited .000) certificates of Rs.000 each Mark up: Average Six Months KIBOR (Ask Side) + 1.000 each Mark up: Average Six Months KIBOR (Ask Side) + 1.70 percent per annum Redemption: The instrument is structured to redeem 0.000 99.000 29.000 (2010: 20.000 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 8.00 percent per annum Redemption: 10 equal semi-annual installments commencing from the 24th months from first draw down.60 percent per annum Redemption: Bullet payment at maturity Maturity: September 2012 Chief Executive: Mr. 5. Ahmed Jaudet Bilal Jahangir Siddiqui & Company Limited 20.000 each Mark-up: Average Six Months KIBOR + 3. Maturity: July 2017 Chief Executive: Mr. 100. Maturity: September 2017 Chief Executive: Mr. Maturity: April 2014 Chief Executive: Mr. Munaf Ibrahim Zulaikha Textile Mills Limited (Liability assumed from Khunja Textile Mills Limited) 300 (2010: 300) certificates of Rs. 5. Shaikh 99.14.Unquoted.600 ANNUAL REPORT 2011 40 .000 (2010: 6. Maturity: July 2013 Chief Executive: Mr.000) certificates of Rs.920 30.5.000 30.840 99.586 499. Ahmed H. 5.494 30.000 (2010: 20.000 (2010: 100.920 99. Secured 2011 2010 (Rupees in „000) Agritech Limited (formerly Pak American Fertilizers Limited) 100.9.14 Particulars of Term Finance Certificates .880 499.20 percent of principal in the first 60 months and remaining principal in two equal semi-annual installments of 49. Muhammad Ramzan First Dawood Investment Bank Limited 6.

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 30.000 each Mark up: Average Six Months KIBOR + 2.000 ANNUAL REPORT 2011 41 . 5.2 Nil (2010: 400) certificates of Rs.05 percent per annum Redemption: Eight equal semi-annual installments commencing after a grace period of one year.2 Nil (2010: 400) certificates of Rs.GEPCO) .000 3.2011 2010 (Rupees in „000) Power Holding (Private) Limited (Liability assumed from Gujranwala Electric Power Company Limited . Habib 1.940 150.NTDC) . Chief Executive: Mr. after completion of grace period. Chief Executive: Mr. 10.000.000.088.02 percent of principal semi-annually in the first 60 months and remaining amount in 4 equal semi-annual installments starting from 66th month. Fazeel Asif Power Holding (Private) Limited .20 percent of principal semi-annually in the first 60 months and remaining amount in 4 equal semi-annual installments starting from 66th month.note 9.FESCO) .75 percent per annum Redemption: In 6 equal semi annual installments.000 each Mark up: Average 6 month KIBOR plus 2.5 : 15% Year 6 . Naveed A.000 each Mark-up: Average Six Months KIBOR (Ask Side) + 0. Maturity: July 2021 Chief Executive: Mr. First principal payment due at the end of 30th month from the first disbursement.000 each Mark up: Year 1 .000 3.2 Nil (2010: 600. Chief Executive: Mr.000.000 each Mark-up: Average Six Months KIBOR (Ask Side) + 0.14.000 (2010: Nil) certificates of Rs.note 9.000) certificates of Rs.000.2 Nil (2010: 1.2 Nil (2010: 800. after completion of grace period. Fazeel Asif Power Holding (Private) Limited (Liability assumed from National Transmission and Despatch Company . Chief Executive: Mr.400 299.000 5. Fazeel Asif Power Holding (Private) Limited (Liability assumed from Faisalabad Electric Supply Company Limited .5% Redemption: The instrument is structured to redeem 0.440.940 149.000) certificates of Rs. 10.05 percent per annum Redemption: Eight equal semi-annual installments commencing after a grace period of one year.14.note 9.000 (2010: 30.notes 9.14. Fazeel Asif Power Holding (Private) Limited .000) certificates of Rs.10 : 15. Chief Executive: Mr.notes 9.000. Maturity: July 2017 Chief Executive: Mr. 5. after completion of grace period.208. 5.14.000 4.14. 5.000 each Mark up: Average Six Months KIBOR + 2.00 percent per annum Redemption: In 6 equal semi annual installments.349.720 19. First principal payment due at the end of 30th month from the first disbursement.000 each Mark up: Average Six Months KIBOR + 1.000. 5. Khan Bank Al Habib Limited 60.25% per annum Redemption: The instrument is structured to redeem 0.000) certificates of Rs. Abbas D.00 percent per annum Redemption: In 6 equal semi annual installments.000 3.

9.000 20. 9. 13.670 135.000 70.9.000 281.960 million thereagainst.00 percent 3 months KIBOR plus 1.000 1.40 percent 3 months KIBOR plus 1.173 281.025 39.458 31.15 percent 6 months KIBOR plus 1. Orascom Telecom and Standard Chartered Bank respectively.980.960 million while the profit before taxation for the current year would have been lower by the same amount. Sulemanji Esmailji & Sons (Private) Limited Sitara Peroxide (Private) Limited Liberty Power Tech Limited Amreli Steel (Private) Limited *Security Leasing Corporation Limited . 2011.1 This represents advance payment to Sitara Energy Limited.80 percent 6 months KIBOR plus 1.000 Note 9.14.349.989 100.000 20. 2011.00 percent 3 months KIBOR plus 2. These carry interest at 4.000 250. these also included conversion of loan accounts of Power Holding (Private) Limited into term finance certificates. 9.1 20.062 126. ** These Sukuks bonds have been restructured with effect from November 24.1 The State Bank of Pakistan vide its letter no BSD/BRP-1/001485/2012 dated February 2. These bonds carry interest at Nil percent per annum (2010: 14. Following the settlement of term finance certificates the Bank purchased an equivalent amount of 12 months Treasury bills and 5 year PIBs on the same date.670 145.000 8.15 Investments in sukuk bonds Investee company Date of maturity Profit rate per annum Number of Certificates 2011 2010 (Rupees in „000) Sitara Chemical Industries Limited .000 38.000 35.438 53.15.000 50.I Engro Corporation Limited Quetta Textile Mills Limited December 2013 December 2013 June 2012 March 2014 December 2015 Note 9. 2011. 2012 has allowed relaxation in maintaining provisioning against the exposure of Azgard Nine Limited till February 29.000 69. 9.705 98.000 5.I Sitara Chemical Industries Limited .036 * These Sukuks bonds have been restructured with effect from April 19. 2011.80%) and are due for maturity in March 2013.789 336.81% per annum) and have matured / are due for maturity in December 2011 (2010: December 2011).600 31. Further.600 36.740 25.06% (2010: 3. BDT 120 million (2010: 150 million) and US Dollar 10 million (2010: US Dollar 10 million) issued by IDLC Securitisation Trust.14.250 483. 2011.799 250.30 percent 3 months KIBOR plus 1. 2011 by crediting bank's SBP account. Accordingly all the outstanding dues of the Bank were cleared by the Federal Government on November 4. 2012. Had the exemptions not been available.75% per annum (2010: 2.II Orix Leasing Pakistan Limited *Security Leasing Corporation Limited . The Bank has classified the exposure as "Loss" and has maintained a provision of Rs 49. June 2014 (2010: June 2014) and February 2013 (2010: February 2013) respectively.695 336.000 60.667 75.70 percent 6 months KIBOR plus 1.50 percent 6 months KIBOR plus 1.000 2.15.549 224.250 500.S. The relevant sukuk bonds against the advance subscription have not been issued to the Bank by December 31.078 96. During the current year. the Federal Government decided to settle the circular debt issue. the provision against investments would have been higher by Rs 49. 9. ANNUAL REPORT 2011 42 .50% per annum (2010: 13.1 June 2014 June 2014 August 2016 March 2021 December 2016 March 2014 September 2015 September 2015 3 months KIBOR plus 1.000 12.394 million). ***These Sukuks bonds have been restructured with effect from August 9.000 95.50% per annum) and 2.10 percent 3 months KIBOR plus 3.000 124. FESCO and NTDC) that had been transferred to Power Holding (Private) Limited to bring all circular debts of power sector to a single point of responsibility.545 30.50 percent 59.2 These represented bank loan liabilities of power companies (which include term finance certificates issued by GEPCO.II **Kohat Cement Company Limited ***Sitara Energy Limited ****BRR Guardian Modaraba K.000 100.16 These represent overseas bonds amounting to BDT Nil (2010: BDT 7.17 These represent Credit Linked Notes amounting to US Dollar 5 million (2010: USD Dollar 5 million) issued by Standard Chartered Bank.667 105. to all those banks who have agreed to reschedule / restructure their exposure against the company subject to the condition that such exposure shall be classified in accordance with Prudential Regulations. including all accrued mark-up and asked the banks to subscribe to an equal amount of Treasury Bills and PIBs against their outstanding exposure in the ratio of 50:50.50 percent Nil 6 months KIBOR plus 1.09% per annum).25 percent Nil 6 months KIBOR plus 1.15. ****These Sukuks bonds have been restructured with effect from April 15.

070 13.000 100. 2011.11%) Break-up value per unit: Rs. 10.18 percent.98 Date of reviewed financial statements: December 31.000 76.590.19 Particulars of investments in associates The paid up value of these shares / units is Rs.000 826.990 68.53% (2010: 96.19% (2010: 33.236 7.498 250. Nasar us Samad Qureshi Alfalah GHP Value Fund Percentage of holding: 34.077 250.18. the Bank's shareholding in the subsidiary company has increased to 97. BSD/BAI . 40. 50) Alfalah GHP Income Multiplier Fund Percentage of holding: 98.95 Date of audited financial statements: December 31.686.Alfalah GHP Investment Management Limited (Paid-up value of each unit is Rs.72% (2010: 96. 50) Alfalah GHP Investment Management Limited Percentage of holding: 40. 46.889.000 13. 50) Alfalah GHP Islamic Fund Percentage of holding: 96.366.000 826.998.38%) Break-up value per unit: Rs.Alfalah GHP Investment Management Limited (Paid-up value of each unit is Rs. 12.196 5.590. This was approved by the Shareholders of the Bank as required under section 208 of the Companies Ordinance.22%) Break-up value per share: Rs.739 100.600.990 2.22% (2010: 40.600. 2011 Management Company . 2011 Management Company .000 5. 2011 2010 (Number of shares / units) 8.474 5.695 7.000 353.739 2.22.3/608/2259/2011 dated February 24.481.3.79 Date of reviewed financial statements: December 31.000 7.483 4.889.1 Percentage of holding: 97. 1984 and by the State Bank of Pakistan vide its letter No.493 **799.913 Alfalah Insurance Limited Percentage of holding: 30% (2010: 30%) Break-up value per share: Rs.796 417. 2011 Chief Executive: Mr. 10.493 130.049.017 Date of audited financial statements: December 31. 9. Mohammad Shoaib Memon 2011 2010 (Rupees in „000) 76. Abdul Aziz Anis Warid Telecom (Private) Limited Wateen Telecom Limited 2011 2010 (Rupees in „000) 68.000 Note Alfalah Securities (Private) Limited 9.077 5.Alfalah GHP Investment Management Limited (Paid-up value of each unit is Rs.18 Particulars of investment in subsidiary company The paid up value of these ordinary shares is Rs. 53.049.77 Date of audited financial statements: December 31.000 9. 2011 Management Company . 2011 Chief Executive: Mr.000 250.18% Break-up value per share: Rs.070 130. Consequent to this investment. while reversal of the provision in respect of loan to the subsidiary company is disclosed in note 10.949 * Recategorised during the year from investment in associates to Available for sale (Refer note 9.18%) Break-up value per unit: Rs.9.1 During the current year the Bank has made an investment of Rs 750 million in the right shares issued by the Bank's subsidiary company Alfalah Securities (Private) Limited. 2011 Chief Executive: Mr. 2011 2010 (Number of shares) 82.1) ANNUAL REPORT 2011 43 .650.498.5.18. 0.89 Date of reviewed financial statements: December 31. Provision made against the investment is disclosed in note 9.19. 10 except where stated.

920 417.920 83.124 319.270 Impairment held against investment in these companies is disclosed in note 9.52%) Break-up value per share: negative equity Market value per share: Rs.52% (2010: 13.22. 2011 (Unaudited) Chief Executive: Mr.24%) Break-up value per share: Rs. there is no change in shareholding of the Bank in these companies as compared to prior year.784.24% (2010: 8.796 83.19.366. Further.1 Investment in shares of Warid Telecom (Private) Limited and Wateen Telecom Limited During the year.796 4. ANNUAL REPORT 2011 44 .79 Date of audited financial statements: June 30.784.549. management has assessed that this investment does not result in significant influence over these entities as defined in IAS 28.270 4. the Bank's investments in shares of Warid Telecom (Private) Limited and Wateen Telecom Limited have been recategorised as Available for Sale instead of being categorised as Investment in Associates.494.124 Warid Telecom (Private) Limited Percentage of holding: 8.366. This recategorisation has had no impact on the carrying values of the investments in the Bank's financial statements.054.71 Date of financial statements: December 31.044 4. These entities remain related entities of the Bank and transactions carried out with them are reflected in note 40 to these financial statements. Naeem Zaminder 2011 2010 (Rupees in „000) 4. 2011 Chief Executive: Mr. Muneer Farooqui Wateen Telecom Limited (Fixed Line Telecommunication Sector) Percentage of holding: 13.054. Particulars of the cost and number of shares held by the Bank in these companies are as follows: 2011 2010 (Number of shares) 319.549. The Bank's investment in both these group companies is less than 20% of investee company's capital and based on internal reorganisation. 5.474 417.494. 1.044 402.474 402.9.

182 99.020 5.026 11.693 25.820 150.067 150.463 1.352 24.466 15.771 8.114 49.180 99.332 91.800 47.171 37.425 76.790 47.279 2.534 46.Government Securities) 99.077 72.135 61.940 299.920 460.442 38.635.572 8.380 273 6.117 10.708 18.654 75.521 14.809 24.954 5.920 449.000 99.132 2010 Rupees in '000--------------------- Long/Medium Term Credit Rated by 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 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 Azgard Nine Limited Askari Bank Limited (3rd Issue) Faysal Bank Limited Bank Al-Habib Limited 64.000 19.439 37.969 45.840 7.930 883 5.000 297.000 26.921 61.760 34.420 46.000 99.998 57.935 64.233 99.648 94.505 40.045.469 5.342 2.764 35.221 332.866 87.980 284 11.784 9.567 155.548 5.353 199.136 31.472 49.226 1.955 171.043.111 50.441 35.680 30.500 50.345 17.873 AA PACRA ------(Unrated)-----AA/A1+ PACRA ------(Unrated)-----------(Unrated)-----AA+/A1+ PACRA ------(Unrated)-----A(f) JCRVIS A-(f) PACRA AA/A1+ PACRA A/A1 PACRA ------(Unrated)-----------(Unrated)-----------(Unrated)-----------(Unrated)-----------(Unrated)-----------(Unrated)-----A/A1 PACRA ------(Unrated)-----AA+/A-1+ JCRVIS ------(Unrated)-----------(Unrated)-----AA+/A1+ PACRA ------(Unrated)-----A(f) JCRVIS A(f) AAA/A-1+ PACRA JCRVIS ANNUAL REPORT 2011 45 .866 39.654 9.055 15.190 9.270(Unrated .955 30.000 1.106.163 38.924 37.135 26.588.638 2.000 19.325 17.852 AAAAA AA AAAAA+ AA+ PACRA PACRA PACRA PACRA JCRVIS PACRA PACRA PACRA PACRA PACRA PACRA PACRA PACRA PACRA PACRA PACRA AA D A+ A+ AA D AAAAAA- Shares in Listed Companies / Certificates / Units Adamjee Insurance Company Limited Al-Abbas Cement Company Limited Allied Bank Limited AMZ Plus Income Fund Attock Cement Company Limited Bank Al Habib Limited Crescent Steel & Allied Products Limited Crosby Pheonix Fund Dawood Money Market Fund Engro Corporation Limited Fatima Fertilizer Limited Fauji Cement Company Limited Fauji Fertilizer Company Limited Fecto Cement Limited Hira Textile Mills Limited ICB Islamic Bank International Steels Limited KASB Securities Limited Kohinoor Energy Limited Kot Addu Power Company Limited Lotte Pakistan PTA Limited Lucky Cement Limited MCB Bank Limited Meezan Balanced Fund Meezan Islamic Income Fund NAFA Income Opportunity Fund (Formerly NAFA Cash Fund) National Bank of Pakistan 16.332 456.494 25.928 28.640 149.920 99.791 163.924 42.959 382.368 332.013 15.357 28.709 26.920 30.448 2.977 37.604.960 31.165 212.152 38.237.011 19.026 24.750 49.000 381.310 33.870 28.820 29.454 23.741 29.901 25.463 74.367 19.781 62.079 8.937 1.149 30.9.549.894 50.229.461 10.916 14.219 44.322 40.355 60.341 25.329 97.800 92.234 20.675 4.325 45.587.826 91.053 21.689 200.659 63.935 74.916 15.366 279.Government Securities) 8.333.000 317.000 30.427 49.177 51.920 449.685 1.980 3.088 5.064 22.298(Unrated .940 1.478 35.086 1.634 20.155.648 74.014 10.143 3.20 Quality of available for sale securities Market value 2011 2010 --------------------- Cost 2011 64.

695 45.000 Not Applicable 4.096 70.000 6.850 8.703 145.496.429.521 34.570 16.934 920 4.000.279 13.625.304 50.677 30.813 135.617 Preference Shares in Un-listed Companies First Dawood Investment Bank Limited Trust Investment Bank Limited Not Applicable Not Applicable 15.821 ------(Unrated)-----------(Unrated)-----------(Unrated)-----------(Unrated)-----------(Unrated)------ Not Applicable 4.718.258.000 35.000 84.882 2-Star/3-Star PACRA ------(Unrated)-----------(Unrated)-----41.542 1.120 12.595.220 104.950 12.000.000 417.000 39.477.021 ------(Unrated)-----87.395 1.625.979 66.000 AA-(f) PACRA 30.000 2.448 41.725 5.342.629 67.277 36.090 ------(Unrated)------ 1.595.408.924 A+/A-1 JCRVIS AAA/A-1+ JCRVIS 21.528 60.113 3.000.000 6.269 36.277 130.082 43.000.200 1.748 51.026 226.796 4.679 (Unrated) ------(Unrated)-----------(Unrated)-----------(Unrated)-----------(Unrated)-----------(Unrated)-----------(Unrated)-----------(Unrated)-----AA-/A1+ PACRA ------(Unrated)-----------(Unrated)-----BBB+ JCRVIS 126.257 68.000 3.208.000 85.000 A+(f) PACRA 9.674 149.000.000 3.225 500.937 2.000 16.545 - 7.799.595.000 40.850 8.000 D PACRA PACRA BBB / A3 Sukuk Bonds GoP Ijarah Sukuk Bonds II GoP Ijarah Bonds III GoP Ijarah Bonds IV GoP Ijarah Bonds V GoP Ijarah Bonds VI GoP Ijarah Bonds VII GoP Ijarah Bonds VIII GoP Ijarah Bonds IX Sui Southern Gas Company Limited Security Leasing Corporation Limited I Security Leasing Corporation Limited II Quetta Textile Mills limited 29-Dec-08 11-Mar-09 17-Sep-09 15-Nov-10 20-Dec-10 7-Mar-11 16-May-11 26-Dec-11 2.000 12.380.251 4.800 31.000.000 129.625.569 9.926 150.000 2.584.328 34.110.000 8.235.456 157.000 25.718.000 55.740 131.509.287 A+/A1 PACRA 10.061 6.936 10.979 AA+/A1+ PACRA 38.625.350 30.225 500.474 2.000 50.193 123.000 3.676 6.478.251 6.005 ANNUAL REPORT 2011 46 .000 3.000 12.096 Not Applicable 70.789 32.477.595.502 Shares in Un-listed Companies Pakistan Export Finance Guarantee Agency Limited Society for Worldwide Interbank Financial Telecommunication Al-Hamra Hills (Private) Limited Al-Hamra Avenue (Private) Limited Warid Telecom (Private) Limited Not Applicable 5.366.000 JCRVIS BBB-(f) 1.000 36.092 44.000 3.929 AA+/A1+ PACRA AA+/A-1+ JCRVIS 50.403 221.113 3.000 30.572 38.212 23.000 8.130.888 39.670 16.000 3.000.162 AA-/A1+ PACRA AA-/A1+ PACRA 150.950 8.670 911 14.000 25.Date of issue Market value 2011 2010 --------------------- Cost 2011 2010 Rupees in '000--------------------- Long/Medium Term Credit Rated by Rating Nishat (Chunian) Power Company Limited Nishat Power Company Limited Pak Oman Advantage Fund Pak Oman Advantage Islamic Income Fund Pakistan Capital Market Fund Pakistan Oilfields Limited Pakistan Petroleum Limited Pakistan State Oil Company Limited Pakistan Telecommunication Company Limited Samba Bank Limited Security Papers Limited Southern Electric Power Company Ltd The Hub Power Company Limited United Bank Limited United Islamic Income Fund Wateen Telecom Limited 6.000 Not Applicable 50.000 40.304 136.348 68.000.000 15.477 67.130.725 4.

183.000 9.Fully paid up ordinary shares of Rs.22. 10 each .Others Unlisted companies .Alfalah Securities (Private) Limited Investment in associated companies Unlisted company .Al-Hamra Hills (Private) Limited .000 25.Pakistan Export Finance Guarantee Agency Limited .554 113.991.553 2.000 2.000 30.000 29.Fully paid up ordinary shares of Rs.Warid Telecom (Private) Limited Listed company .652 5.568 ANNUAL REPORT 2011 47 .183.158 1.457) (55.568 9.497) 2.Wateen Telecom Limited 2.22.Warid Telecom (Private) Limited .1 5.926 30.19.Al-Hamra Avenue (Private) Limited .Khunja Textiles Mills Limited .Azgard Nine Limited .494 53.Term finance certificates .Sitara Energy Limited Investment in subsidiary company Unlisted company .545.899 - 9.1 & 9.Fully paid up ordinary shares / units .652 465.Preference shares .First Dawood Investment Bank Limited .BRR Guardian Modaraba .1 287.725 35.716 30.000 74.Kohat Cement Company Limited .000 49.21 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.Fully paid up ordinary shares of Rs.22 Particulars of provision for diminution in value of investments by type and segment Available for sale securities Listed companies / mutual funds .000 7.593 55. 10 each .000 8.705.Fully paid up ordinary shares of Rs.585.725 35.Agritech Limited .568 2.459.960 8.064 23.1 - 1.Term finance certificates / sukuk bonds .183.851 9.1 4.Wateen Telecom Limited .585.223 169.First Dawood Investment Bank Limited .554 325.637 25.19.564 76.192 (285) (132.Trust Investment Bank Limited Held to maturity securities Unlisted securities .19.Note 2011 2010 (Rupees in „000) 9.824 9.851) 4.000 25. 10 each .294 (1.19.064 23. 10 each .1 824.

563 966.169 1.036 918 2.207 8.1 The Bank has determined the impairment charge on these investments as a difference between the carrying amount and the breakup value based on the un-audited financial statements of Warid Telecom (Private) Limited for the period ended December 31.145 2. 2011 and the audited financial statements of Alfalah Securities (Private) Limited for the year ended December 31.299 1 3.162 319 1.711 1.300 11.22.053) (33) 79 872 (71) 2.net Unrealised (loss) / gain Cost 2011 2010 2011 2010 -----------------Rupees in '000----------------Fully paid up ordinary shares / units .730 3.189.9.165.955 ANNUAL REPORT 2011 48 .673 683 68.527 1.392 - Market Treasury Bills Pakistan Investment Bonds 11.662) (391) (11.846 11.Listed NIB Bank Limited MCB Bank Limited National Bank of Pakistan Lucky Cement Limited Pakistan Oilfields Limited Azgard Nine Limited Fauji Cement Company Limited D G Khan Cement Limited Lotte Pakistan PTA Limited Nishat Chunian Power Limited Nishat Power Limited Karachi Electric Supply Compnay Limited Dewan Salman Fiber Limited Nishat (Chunian) Mills Limited (10.860 30. 2011.23 Unrealised (loss) / gain on revaluation of investments classified as held for trading .613 1.185 56 56 (38) (477) (2) 3.034. 9.029 (179) (143) (35) 1.299 24.335 1.

NET Loans.807) 4.Note 2011 2010 (Rupees in „000) 10 ADVANCES .459 .739.398.3 184.661.876 8.384 1.997 2.905. Ijarah contracts entered on or after January 1.540 .144.330.102 701.707 211.090) (12.754 .483.729 196.6. cash credits.397. "Ijarah" as disclosed in note 10.1 Particulars of advances . 2009 have been accounted for in accordance with the requirements of IFAS 2.2.628) (11.799.3.111.605 6.751 .1 Net investment in finance lease includes Ijarah financings disbursed prior to January 1.475 1.4.503.546 10. ANNUAL REPORT 2011 49 .282.638 799.208 10.251) 2.615 188.590.281 3.2.905.5 (12.875 218.232 11.456 8.514.122.397.629.947 4.2 178. running finances.307) 207.136 211.853 (10.279.113.661.047.044.001.5.4.247.195.512 10.679) (649.985) (417.419 11.340.577 2.905.431.109 4.(837.916.2 Net investment in finance lease 2011 2010 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 1.928.633.355 198.468.869) .734) (218.715 190.799 218.676) .743.152.615 6.291 .837 1.917.592 4.590.758 2.853 166.(533.897.021.832.181.823.431.898 8.397.gross of provisions In local currency In foreign currencies Short term (upto one year) Long term (over one year) 10.148.068 211.972 .275.5 10.355 151.463.661.598.724.431.753) (598.829.876 19.977 218.807.903. 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 Provision against advances Specific provision against non-performing advances General provision against advances 10.223.843) 198.809 12.054 52.219 26.592 4.287 59.592 2. 2009.853 (315.355 10.821 2.118 1.3.218 .919.480.103 3.2.7.091.151.512 .615 3.244. etc.322 5.319 (419.

083 120.878 514.503.123.030.334) (121.108 (5.758 2.567 (3.574) 195.145) 476.845 (401.503.758 75.183 3.694 (69.924 5.111) (526. 2010 Opening net book value Additions Disposals Depreciation Adjustment Closing net book value At December 31.509 499.109 (317.Vehicles Plant & Equipment Total Consumer Corporate Machinery --------------------------------(Rupees in '000)-------------------------------- At January 1.758 . 2011 Cost Accumulated depreciation Net book value 2.509 499.330.294 4.537 92.300 3.105.183 3.878 514.720 (819.494 2.330.211 (22.468 (285.527) (26.262 (238.127 (65.503.547) (271.509 221.517 ANNUAL REPORT 2011 50 .843 620.551) 499.425 785.723) 625.699) (163.111) (526.811) 44.109 2010 Asset categories Vehicles .768) 97.262 (945) (64.334) (121.145) 476.652 625.849 98.472) (148.183 3.105) 6.517 2.758 98.049 946.398.530) (43.503.125) 2.484) 120. 2011 Opening net book value Additions Disposals Cost Accumulated Depreciation Depreciation Closing net book value At December 31.069) 2.549 212.549 545.044) (30.375 (34.694 (69.765.661) 476. 2010 Cost Accumulated depreciation Net book value Year ended December 31.316 (95.715) 75.320) 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.744 (214.347) 507.517 123.079) (1.452.549 476.486 13.849 722.294 4.083 422.597 (32.483) 6.473 (23.751.452.188 (304.642 (313.580) (924.536 5.549 5.452.843 620.715) 75.Vehicles Plant & Equipment Total Consumer Corporate Machinery --------------------------------(Rupees in '000)-------------------------------- At January 1.166) (468. b) Movement in net book value of ijarah assets 2011 Asset categories Vehicles .398.765.813 (48.994 1.537 4. 2011 Cost Accumulated depreciation Net book value Year ended December 31.183 3.473 (23. 2010 Cost Accumulated depreciation Net book value 660.726) 5.183) 3.10.752 195. plant and machinery and equipment and are for periods ranging from 3 to 5 years.112 499.030.652 2.353.2.509 1.150.537) (585.536 92.517 208.799) 79.702.843 (3.642 (313.177) 4.019.895) 507. The significant ijarah contracts entered into by the Bank are with respect to vehicles.752 399.119 (35.125) 2.877 545.326 (25.845 4.494 75.452.370) 1.011.049 946.704) 44.

488 27.022 81.845 4.546 10.674 .066 (473) (112.779 24.062.544 106.022 .145 (1.864.360.687 (21.987.715 109.2.060 5.306 109.989 10.889 .533.136) - (326.036.542 5.6.243.546 10.017 Substandard 2.150 5.453.280.974 24.823 1.965) 9.026 3.550.428.097 billion (2010: Rs 18.629.258) 3.428.488 81.418 12.225) 59.965) (112.3 Amounts written off 10.221 18.120 .699 110.551 11.236 10.941.546 10.779 24.096.191 27.191 27.176) (44.628 (7.810 294.5.305.330.144 458.1.307 8.637.062.3.740.174.000 18.652 (186.679 10.597.320.144 458.5 Particulars of provisions against advances 2011 General 2010 General Note Specific ----------------------------------------------- Total Specific Total (Rupees in '000)--------------------------------------------- Opening balance Exchange adjustment and other movements Charge for the year Reversals / recoveries 10.280.780.716) - (186.974 582.458) 2.494 15.629.488 27.510 763.760 18.889 Substandard 740.551 11.089.022.968 (1.493) 2.494 19.442.033.101.022.320 billion) which have been placed under non-performing status as detailed below: Classified Advances 2011 Provision Required Provision Held T o t a Domestic Overseas l Total Domestic ----------------------------------------------------------- Overseas Total Domestic Overseas (Rupees in '000) Category of Classification Other Assets Especially Mentioned (Agri Financing) 99.192.313) 11.392 12.017 .753 Classified Advances 2010 Provision Required Provision Held T o t a Domestic Overseas l Total Domestic ----------------------------------------------------------- Overseas Total Domestic Overseas (Rupees in '000)--------------------------------------------------------- Category of Classification Other Assets Especially Mentioned (Agri Financing) 192.1 10.033) 3.664 (28.356.145 (923.974 24.144 458.306 Loss 14.282) 1.863 (104.576 Doubtful 1.908.576 .924.305.501 10.211.501 10.368.810 294.716) (326.2011 2010 (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 411.760 110.136) .418 12.488 81.4 Advances include Rs 19.458) 1.662.602.674 Doubtful 3.614 582.730 1.215 4.699 Loss 14.679 649.501.99.279.941.499 3.210.551 11.105 (1.174.000 14.810 294.602.974 582.

679 649.307 ANNUAL REPORT 2011 51 .753 598.090 12.843 10.629.330.628 11.Closing balance 12.928.279.

General provision for overseas branches is maintained in accordance with the guidelines of the authorities in the respective countries. Accordingly. Under the revised guidelines issued by SBP.5. 1 dated October 21. and industrial properties 75% for first year (land & building only) 60% for second year 45% for third year 30% for fourth year. i. The benefit of forced sale value in such cases has been taken on the basis of revised circular. 40% for three years Prudential Regulations R-22 for Consumer Financing: Mortgaged residential property 75% for first and second year 50% for third and fourth year.e 30% of forced sale values instead of 40%. commercial and industrial properties held as collateral against all non-performing loans for 4 years from the date of classification for calculating provisioning requirement.554 million. and 20% for fifth year Plant & Machinery under charge 30% for first year 20% for second year. and 10% for third year Pledged stock b.10. 174.641 million. 10. 2011). However. 2009.2 The additional profit arising from availing the FSV benefit .427 million in respect of financing provided to the Bank's subsidiary company Alfalah Securities (Private) Limited. banks were allowed to avail the benefit of 40% of forced sales value of pledged stocks and mortgaged residential.5. The Bank has decided not to avail the benefit of forced sale values of pledged stocks and mortgaged. Had the provision against non-performing loans and advances been determined in accordance with the previously laid down requirements of SBP.780 million).4 General provision against consumer loans represents provision maintained at an amount equal to 1. 2011 which is not available for either cash or stock dividend to shareholders amounted to Rs.5. commercial. The amount has been recovered during the year.net of tax at December 31. and 30% for fifth year Under the previous guidelines issued by SBP which were effective from September 30.3 This includes reversal of Rs 605.5% 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. 2011 would have been higher by approximately Rs.244.301 million (2010: 2. In addition the Bank has also recognised income on receipt basis against this financing amounting to Rs 133. the benefit of discounted forced sale values of plant and machinery was previously not available to banks for calculating provisioning requirement.1 During the year the State Bank of Pakistan (SBP) has introduced certain amendments in the Prudential Regulations in respect of maintenance of provisioning requirements against non-performing loans and advances vide BSD Circular No. 1. ANNUAL REPORT 2011 52 . the specific provision against non-performing loans would have been lower and consequently profit before taxation and advances (net of provisions) as at December 31. Prudential Regulation R-8 for Corporate / Commercial Banking and Prudential Regulation R-11 for SME Financing: Category of Asset Benefit of FSV allowed from the date of classification Mortgaged residential. residential.997.5. banks have been allowed to avail the benefit as follows: a. commercial and industrial properties and plant and machinery as per the revised circular. 10. the provision against non performing loans and advances has been determined by taking the benefit of forced sale values as allowed under the previous circular except for loans and advances where more than 3 years have elapsed since the date of classification. 2011 (effective from September 30. 10.

executives or officers of the Bank or any of them either severally or jointly with any other persons 2011 2010 (Rupees in „000) - Balance at beginning of year Loans granted during the year Repayments during the year Balance at end of year 4.412 4. 500.640 10.6 Although the Bank has made provision against its non-performing portfolio as per the category of classification of the loan. the Bank holds enforceable collateral in the event of recovery through litigation.350 1. 500.169.298.330.090 12. 500. stock in trade etc.640 8.592.193 11.332 (2.716 5.928. associated companies.602.096 2.105.919.843 10.488 12.2 Write offs of Rs.974 12.628 11. 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 31.642 10.279.191 144.476 (10.784.384 71.201 27.000 10.000/.746 342.932.305. These securities comprise of charge against various tangible assets of the borrower including land.5.257) 4.477.136 25.372. executives.5.753 478.012 10.960.307 10.180.350 Debts due by companies or firms in which the directors of the Bank are interested as directors.6.629 187.000 and above Write offs of below Rs. 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 2.275 1.392) 2. 10.696 192.783 192. etc.1 Against provisions Directly charged to profit and loss account 186.412 326.863 119.990.539 (1. Debts due by directors.6.435 2.141. building and machinery.631.5 Particulars of provisions against advances 2011 General 2010 General Note Specific ----------------------------------------------- Total Specific Total (Rupees in '000)--------------------------------------------- In local currency In foreign currencies 12.632 3.923 649.540) 4.7 Details of loans written-off of Rs.779 24.473.227 598.435 98. 2011 is given in Annexure-I.096 ANNUAL REPORT 2011 53 .652.615 (1. 2011 2010 (Rupees in „000) 10.10.629.504 351.and above In terms of sub-section (3) of Section 33A of the Banking Companies Ordinance.679 578.141.993) 2.105.894 351.8 Particulars of loans and advances to directors.6 Particulars of write-offs 10.

835 922.951 12. controlled firms.613 45.099.1 Capital work-in-progress Civil works Equipment / intangibles Advances to suppliers and contractors Others 11.648 6. 2011 2011 *adjustments 2011 2011 per annum -----------------------------------------------------------(Rupees in '000)--------------------------------------------------------Office premises 5.833 476. at December 31.389.2 Property and equipment 2011 Cost / 11.606) 1.098.450.658 621.278 (2.406 189.3 596.517) * (8.701.489.241 (33.076 2.023.895 228.673 1.194 20% .2 11.276) * (3.126 (36.25% 5.257 433.437.723) - 20.993 234.5%-5.447 (84.017 15.816) * (4.979 6.615 * 55.456) * 23.882) * (28.358.410 567.542.066.300 (8.867 3.777 219.608.843) 508.383 79.097 2.225 192.946.827) 31.568.249.951 Description revaluation as at January 1.643 - 6.25% Vehicles 231.355) 163. Rate of depreciation % at December 31.391 12.410 4.146 4.542.348 20% 1.980.648.492 (34.859) * (4.215 596.542 778.659) * (22.194 14.860 8.5% Revaluation 3.690.230 8.986.538 154.531 13.624 1.900.177 91.241.230 8.821 * 56.5% Lease hold improvements Furniture and fixtures Office equipment 2.516 3.664 Total 11 FIXED ASSETS Capital work-in-progress Property and equipment Intangible assets 11.937 (32.945) 142.046 601.604) 19.508 (2.517) 2.683 679.957. 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 (Rupees in „000) 609.924 147.747.823 10% .447 (3.218 1.366) 609.847) * (16.555 179.689 83.743 74.492 82.740.954.036.013.188) * (5.838 - 222. 2011 Depreciation for the year/ (on disposal)/ Accumulate d depreciation as Net Book Value as at December 31.237 2.701.795 25% 1.204.309 3. Additions / (disposals) / *adjustments Reversal of deficit on revaluation Cost/ Revaluation as Accumulate d depreciation as at January 1.358.234 679.506 * 56.056.549.388.218 6.968 (73.586.446 - 1.268) 890.Note 2011 2010 Debts due by subsidiary company.318 27.914 (4.689 367.276 - 3.102 7.370 310.132.020) 30.205.049 2.833 45.257 ANNUAL REPORT 2011 54 .588) * (5.079 83.512 - 5.855.685 128.895 12.685 125.1 11.837 (3.5%-5.615 * 55.438 210.972 1.

204 618.904 10% .946.5% (5. Additions / (disposals) / Reversal of deficit on Cost/ Revaluation as 2010 ----------------------------------------------------------- *adjustments revaluation at December 31.687 154. 4. 1.010 440.183) * (14.168 3.700 636 397.056.099.506 45.276 1.888) * 12 1.230 8. Had there been no revaluation.330 million (2010: Rs. 2011 (Rupees in '000)------------------------------------------- per annum Computer software (note 11. 2010 Net Book Value as at December 31.643 2. 2011 Book value As at 31.443 16.3 Intangible assets COST Additions/ * Adjustment As at January 1.587 2.5%-5.411) * 34.140 - 5.501) * 1.049 1.113 (27.1 Included in cost of property and equipment are fully depreciated items still in use having cost of Rs.177 3.838 143.851 - 231.924 76.726 * (55.701.492.227 20% 1.2.837) * 386 855.3.964) * (6.114 6.164 433.648.237 million (2010: Rs 4.667) 209.811.630.293.940) 182.986.685 123.677 million).551. Accumulated depreciation as at January 1.542 946.118. 2011 2011 ACCUMULATED AMORTIZATION Amortization As at As at January 1.531 20% 109.136) * 1.051.914 25% 16.132 2.496.066.483.031 380.031 - 490.957.512 4.079 - 78.298.5% Revaluation 3.816 * (885) 562.940) 49.549.685 125.592 - 1.272 (23.531 ANNUAL REPORT 2011 55 .207 (221) * 1.374 1.971 1.106) * (53. 2009 on the basis of market values determined by Harvester Services (Private) Limited.865) * 1.989 19.2010 Cost / Description revaluation as at January 1.976 (30.171) 1.986.492 4.309 - 45. 11.446 477.530 (14.372 (73.986.608.360) * 20.282 (94.5%-5.951 397.147 2.892 79.971 * (53.046) 56.116 (17.206.471 (30.545 8.398 - 49.825) 56.195 433. 11.565 (6.2 Office premises were last revalued on December 30.152.371.929 (6.233 182. the net book value of office premises would have been Rs.410 11.348) 150.695 * (1.1) Goodwill (note 11.149 7.568.620.790 (10.515.556 3.374 995. 2. 2011 Rate of % (Deletions)/ December (Deletion) / * Adjustment December December amortization 31.809 39. 2011 --------------------------------------------- As at 31.672.25% 4.700 Lease hold improvements Furniture and fixtures Office equipment 2.989 7.816 * (54.410 2.542.452 2. Valuation and Engineering Consultant.989 5.233 20% .427 109.605 8. Rate of depreciation % 2010 *adjustments 2010 per annum (Rupees in '000)--------------------------------------------------------- Office premises 4.2.765) * (2.587 million).3.929 7.365 1.533. 2010 Depreciation for the year/ (on disposal)/ Accumulated depreciation as at December 31.427.428 621.057.749) * 1.2) 947.839) * 5.831 (221) * 1.506 451.102 12.25% Vehicles 243.

686 361 - 512 50 Insurance Claim Bid M/s Alfalah Insurance Company Limited (Related party) M/s Muzaffar Computers Chiniot 1.000 or cost of less than Rs.3.804 6.427 * (117) 109.352 1.178 million (2010: Rs.000 or cost of less than Rs.000 Computers POS Switch Computers Computers Items having book value of less than Rs. 1.1 This includes additional amortisation charge of Rs. 11.806 million (2010: Rs 24. (Deletion) / December 31.000 or net book value of Rs. 11. 18.971 505.144 4.517 353 49 5.276 1.047 Insurance Claim Write Off Write Off M/s Alfalah Insurance Company Limited (Related party) N/A N/A 748 8. January 1.871 1. 250.221 1.194 20% Computer software (note 11.000 or net book value of Rs.000.016 2.000 Furniture and fixtures Furniture & Fixture Items having book value of less than Rs.203 1.3.000 or above are given below: Description Accumulated Net book Sale depreciation value proceeds ------------------------(Rupees in '000)------------------------Cost Mode of Disposal Particulars of purchaser Leasehold Improvements Renovation work Renovation work Renovation work Items having book value of less than Rs.000 or cost of less than Rs.398 * (117) 172.008 1.949 490. amortization 2010 2010 * Adjustment 2010 2010 % (Rupees in '000)------------------------------------------- per annum 567.971 207.344 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. 250.338 552.949 380.204 * (49) 11.664 million).659 715 699 3.190 1. 250.035 1. 1.000 2.000 or above Details of disposal of fixed assets having cost of more than Rs.3.686 2. 2010 --------------------------------------------- * Adjustment 2010 COST ACCUMULATED AMORTIZATION Additions/ Amortization Book value Rate of As at As at As at as at (Deletions)/ December 31.000.859 2. 1.194 552.923 3.619 5.681 1.3.713 1.971 317.233 * (49) 109.2 Adjustment in goodwill represents amount relating to Karachi Stock Exchange branch which has been reclassified to leasehold building consequent to execution of sub-lease agreement by the Karachi Stock Exchange with the Bank. 11.057.304 567.583 1.093 Various Various ANNUAL REPORT 2011 56 .206 1.394 Various Various 2.008 620 1. 250. 250. 1.142 362 96 1.309 109.024 3.333 172.4 Details of disposal of fixed assets having cost of more than Rs.000.657 185 546 531 1.000.1) Goodwill 395. December 31.143 359 Various Various Insurance Claim M/s Alfalah Insurance Company Limited (Related party) 4. 174.3 Included in cost of intangible assets are fully amortised items still in use having cost of Rs.000. 1.As at January 1.404 2. 259.206 947.971 109.

339) (1.266 1.517.322.125 712 2.033 1.642 7. 2011 2010 (Rupees in „000) 12 DEFERRED TAX ASSETS / (LIABILITIES) . Haider Ali M/s Trolly Corporation Mr.638 15. 1.795 27. 250.000 1. Haider Ali Mr.O.257 605 866 945 2.825 (423.033 1.910 3.679 5.376 15. 2011 Total .109.494 Mode of Disposal Particulars of purchaser Office equipment Air Conditioner Diesel Generator Diesel Generator Diesel Generator Diesel Generator Diesel Generator Diesel Generator Diesel Generator Diesel Generator Diesel Generator Items having book value of less than Rs.425.190 5.000 Vehicles Land Criuser Jeep Honda Civic Honda Civic Prado BMW Honda Civic Items having book value of less than Rs.067 1.) Various Bid Bid As Per Bank Policy As Per Bank Policy As Per Bank Policy As Per Bank Policy Various Total . 250. Haider Ali Mr.755 137 111.078 423 1. Aamir Anayat Mr.311) (694.540 (386. Shahid Nafees Mr.000 1.501. Sarfaraz Ahmed Various M/s End 2 End Supply Chain Limited Mr.538 2.472 1.025 691 16.642 7.E.991 8. Sirajuddin Aziz (former C. Azmatullah Khan Mr.460) (97.360 1. 2010 Disposal as per Bank's policy represents vehicles sold to employees as per the terms of their employment.498.793.125 380 2.588 94.E.677 1. Haider Ali Mr.796 824 448 238 703 137 11.611 17 297 452 344 425 470 607 297 868 498 3. Haider Ali M/s Bahum Associates (Pvt) Ltd Mr. Haider Ali Mr.) Mr.O.599 15.NET Deferred debits arising due to Provision for doubtful debts Provision against off-balance sheet obligations Impairment in the value of investments Loss on remeasurement of held for trading 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 Deferred credits arising due to Difference between accounting book value of leased assets and lease liabilities Accelerated tax depreciation Gain on remeasurement of held for trading investments Surplus on revaluation of securities Surplus on revaluation of operating fixed assets 1.000.827) (1.423 42.677 1.136 34.324 1.291 950 1.430 1.749 289 34 345 201 100 332 405 384 1.764 33.155) (710.922.078 712 1.025) 421.376 16.188 84.489 372 372 11.869 2.324 1.427) (2.Description Accumulated Net book Sale depreciation value proceeds ------------------------(Rupees in '000)------------------------Cost 1.527 27.December 31.000 Bid Bid Bid Bid Bid Bid Bid Bid Bid Bid Various M/s Malik Refrigeration Mr.December 31.075 18.459) (115.000 or cost of less than Rs.000 or cost of less than Rs.045 2.633.548) (1.850 1.456 73.381 15.919) ANNUAL REPORT 2011 57 .472 964.000. Sirajuddin Aziz (former C. 1.417) (2.132 20.816 73.194 30.399 3.

714) 12.3 13. 9.949 1.339 4.310) (304.387.996 665.194 163. Note 2011 2010 (Rupees in „000) 13.974.040 102.3.745 304.453 4.805.958 76.826.345 17.340 5.054. claims against the Bank not acknowledged as debt (note 21. deposits.620 9.225 274.009 17.113 51.3 Provision held against other assets Opening balance Charge for the year Reversals Amount written off Adjustment Closing balance 13.64 million in respect of customers alleged to have been involved with such employee.3.017.265 283.533 ANNUAL REPORT 2011 58 .674 113.458 254.358.1 & 13.559 354.368 1.379.3.040 million) recognised during the year on account of impairment in the value of asset acquired in satisfaction of claims.265 254.4) also include claims amounting to Rs 39.1 Market value of assets acquired in satisfaction of claims 13. 2011 14 2010 (Rupees in „000) BILLS PAYABLE In Pakistan Outside Pakistan 5.706 150.770 27.521.48 million (2010: 393. 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 12.953) (102. 374.366 million (2010: Rs 93.290.1 This includes an amount of Rs.403.062 1.266 145.069 353.740 1.2 102.1 13.847 million).2 13.388 (4.714 183.711 413.753 13.054.096 16.109 1.400 million (2010: Nil) in respect of fraud and forgery claims relating to fraudulent transactions carried out by an employee of the Bank.470 12.3.2 This is net off unrealised loss on forward exchange contracts of Rs.945 314.691 93.469 364.161 18.714 13.372 111.043 99.734 354.2 This also includes provision of Rs 132.620) 13.Note 2011 2010 (Rupees in „000) 13 OTHER ASSETS Income / mark-up accrued in local currency Income / mark-up accrued in foreign currencies Advances.352.892 (3.799. The Bank has initiated legal proceedings against this employee and has also taken necessary steps to further strengthen the internal control system.270.674 93.876.109 2. 13. In addition.

7 15.4 This facility is secured against a demand promissory note executed in favour of the State Bank of Pakistan.3 15.1 Particulars of borrowings with respect to currencies In local currency In foreign currencies 15.258 27.50% to 9. 15. 15.498.620 1.265 18.168.168.00% per annum) payable on a quarterly basis.981.098.670.598.748 5.00% to 5.098.851 727.602.099 2.663 157.098.602.571.713 2.593 15.5 This facility is secured against a demand promissory note executed in favour of the State Bank of Pakistan.602.7 This facility is secured against a demand promissory note executed in favour of the State Bank of Pakistan.098.00% to 10.025 2. The markup rate on this facility is 10.978 9.498.62% per annum (2010: 12.265 18.025 2.8 8.50% per annum payable on a quarterly basis.978 Note 2011 11.168.3 This facility is secured against a demand promissory note executed in favour of the State Bank of Pakistan.007 2.50% to 13.30% per annum) maturing by January 2012 (2010: January 2011).150. The mark-up rate on this facility is 6. 15.700.60% per annum (2010: 4.00% per annum (2010: 7.124 2010 (Rupees in „000) 15.00% to 8. The mark-up rate on this facility ranges from 7.465 11.700.570.40% to 11.5 15.713 2.2 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 Financing Facility for Storage of Agriculture produce (FFSAP) Repurchase agreement borrowings Unsecured Call borrowings Overdrawn nostro accounts 15.300 11.099 13.6 This facility is secured against a demand promissory note executed in favour of the State Bank of Pakistan.8 This represents repurchase agreement borrowings from other banks at rates ranging from 11.6 15.00% per annum) payable on a quarterly basis.297 213.198 336.713 2.50% per annum (2010: 6.099 13. ANNUAL REPORT 2011 59 .025 2.099 13.700. 15. The mark-up rate on this facility ranges from 4.978 11.124 15.00% per annum) payable on a quarterly basis.561 9.265 18.60% per annum) payable on a quarterly basis. The mark-up rate on this facility is 6.00% per annum (2010: 6.442 302.480.670. 15.4 15.801.124 15.50% to 8.2011 2010 (Rupees in „000) 15 BORROWINGS In Pakistan Outside Pakistan 15.

472.820.311 284.760.1 Particulars of deposits In local currency In foreign currencies 336.886 16.101 28. Issue date Rating Tenor Redemption December 2004 AAEight years 3 equal semi-annual installments commencing 84th month after the issue date.022.156 141.317.247. the TFC holder will rank below the senior unsecured creditors and depositors and other creditors of the Bank.346.2011 2010 (Rupees in „000) 16 DEPOSITS AND OTHER ACCOUNTS Customers Fixed deposits Savings deposits Current accounts .015.697 4.555 96.597 580.918 322.934 401.886 2011 354.992.350.578 69.247.888.785 102.188 29.962.421 371.311 2010 (Rupees in „000) 17 SUB-ORDINATED LOANS Term Finance Certificates II .974 64.668.50 percent 831.781 4.743 123. Maturity December 2012 ANNUAL REPORT 2011 60 .847.nonremunerative Others Financial institutions Remunerative deposits Nonremunerative deposits 101.130 1.503.912 401.930.642 31.207 119.247.Quoted. In case of occurrence of default.377 30. Unsecured Mark up Base Rate + 1.881.435.427.316.292 262.015.120 (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) Subordination The TFCs are subordinated as to the payment of principal and profit.733 354.

Fixed coupon of 15 percent per annum payable semiannually in arrears Subordination The TFCs are subordinated as to the payment of principal and profit to all other indebtness of the bank. December 2017 4.693 7.567.148.50 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 for mark up due at the end of that period) .Quoted.Floating coupon of Base Rate + 2.192 ANNUAL REPORT 2011 61 . November 2013 1.Note 2011 2010 (Rupees in „000) Term Finance Certificates III .322. Unsecured Mark up Either of the following options with the holder: .Private.998.321.000 4. November 2005 AAEight years 3 equal semi-annual installments commencing 84th month after the issue date.563 1. 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 for 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 2009 AAEight years 3 equal semi-annual installments commencing 84th month after the issue date.996.072 Subordination Issue date Rating Tenor Redemption Maturity Term Finance Certificates IV .000 Issue date Rating Tenor Redemption Maturity 7.

750.1 18.at the beginning of the year .2 Issued.044 19.247.526 48.2 28.406.000 624.500 7.063 13.000 23.1 Authorised capital 2011 2010 (Number of shares) 44.803.250 724.356 30.156.1 18.247.335 109.733 37.000 724.000 724.400 206.750.125.250 624.250 1.000 23.349.500 6.750.271 48.300.160 221.498 443.1 This represents amounts payable to brokers against purchase of shares.at the beginning of the year .258.357 9.207 114.207 2.563 ANNUAL REPORT 2011 62 .427.547 4.484 600.947 3.406.during the year 6.081.733 304.216 18. 10 each 624.000.000 2.244.000.510 238.349.000 624.244.754 3.207 4.500 6.250 1.000. subscribed and paid up capital 2011 2010 (Number of shares) Ordinary shares of Rs. 10 each Fully paid in cash .912 728 44.077.Note 2011 2010 (Rupees in „000) 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 Current taxation Payable against redemption of credit card reward points Security deposits against leases Exchange difference payable to the State Bank of Pakistan Payable to brokers Provision against off-balance sheet obligations Workers' Welfare Fund Others 3.244.056 44.116 111.618 260.268 1.250 Ordinary shares of Rs.500 7.300.750.534.000.247.063 7.563 6.2 Provision against off-balance sheet obligations Opening balance Exchange adjustment Charge for the year Closing balance 19 SHARE CAPITAL 19.during the year Issued as bonus shares .406.491.406.250 724.244.063 7.425 310.898 979. 18.156.491.247.623 528 6.811 19.345 10.063 13.000 19.

073 18.990) (13.587 (1.903 875.1 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 Reversal of deficit on account of disposal of property Other reversal 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 (15.847 ANNUAL REPORT 2011 63 .192.496.433 (15.695) (15.685) 3.489 6.847 743.545 (29.Note 2011 2010 20 SURPLUS ON REVALUATION OF ASSETS .988 3.837 49.538 (207.450.029.2 (Rupees in „000) 2.238.937.695) (15.786.194) 710.026 11.796 20.217.311) 180.140) 2.990) 694.140) 21.678) 111.213.386 3.235) (30.227.417 - 2.607.756.077 58.990) (45.1 Direct credit substitutes i) Government ii) Banking companies & other financial institutions iii) Others 21.533.110 836.411) 329.990) (15.612.433 180.1 20.578.756.369 31.847 2.611 2.2 Transaction-related contingent liabilities i) Government ii) Banking companies & other financial institutions iii) Others 35.860 710.496.446 28.575.281 278.128 20.347 1.Available for sale securities 20.345.030 (97.NET OF TAX Surplus / (deficit) arising on revaluation of: .786.152 3.545 723.719 2.128 (207.417 2.972 2.2 Surplus / (deficit) on revaluation of available for sale securities Deficit on: Government securities Sukuk bonds Surplus on: Quoted shares / units / certificates Term finance certificates Related deferred tax (liability) / asset 21 CONTINGENCIES AND COMMITMENTS (26.697 783.427 2.710 39.422) (23.719 (616.060) 3.605 (29.989 (37.990) 636 7.619) (318.198) 296.Fixed assets .

However. Forward Rate Agreements or FX Options.125.339 5.101 5.219 4.791.495.3 Trade-related contingent liabilities Letters of credit Acceptances 21.118.734.9 Other commitments Donations 21.936.707.738.726. 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.8 Commitments in respect of repo transactions Repurchase Resale 21.075 6.734.595 32.142 22.061 250.7 Commitments for the acquisition of fixed assets 21.000 The Bank at present does not offer structured derivative products such as Interest Rate Swaps.Note 2011 2010 21.062 4.080.200. ANNUAL REPORT 2011 64 . dealers.10 Contingency for tax payable (note 29.614 20.402 - 11.710 6. In addition to this. the exposure is also managed by matching the maturities and fixing the counter parties. 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.204 46.5 Commitments in respect of forward lendings Forward repurchase agreement lendings Commitments to extend credit 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.812.181 1. These customers use this product to hedge themselves from unfavorable movements in foreign currencies.6 Commitments in respect of forward exchange contracts Purchase Sale 21. intra-day and overnight limits.732 144.261.4 Other contingencies Claims against the Bank not acknowledged as debts 21. Exchange rates and forward margins are determined in the "interbank" market and fluctuate according to supply and demand.036 10.342 29.780 1.873.505 2.1) 22 DERIVATIVE INSTRUMENTS (Rupees in „000) 54.482.

687.402 1.146 203.710 1.2 25.032 6.2 Profit earned on ijarah assets Lease rentals earned Depreciation for the year 24 1.785 209.273.Pakistan Investment Bonds Shares .648 MARK-UP / RETURN / INTEREST EXPENSED Deposits Securities sold under repurchase agreements Other short term borrowings Term Finance Certificates Brokerage and commission 21.320 395.listed Sukuk Bonds 59.371.679.131 million (2010: Rs.409.550 12. Provision no longer required written back 16.309 21.177) 374.261 5.737.1 These include mark-up earned of Rs.991 7.179 678.131 (468.280.018 5.726.352 1.220 1.230 625.771.356 (924.291 1.708 181.704 29.883 1.665 9.590 326.530.156.043 863.676.485 18.178 24.Note 2011 2010 (Rupees in „000) 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 23.302.923.783.473 7.896.448 25 GAIN ON SALE OF SECURITIES .440 76.067.109.365 25.062.404.813 ANNUAL REPORT 2011 65 .483) 209.648 37.635 374. 2011 2010 (Rupees in „000) 23.834 1.569 2.551 426. 8.093 64 1.987 million) which pertains to the Bank's Islamic Banking Division.NET Federal Government Securities .337 665.062 198.239.085.105 77.111 62.314 1.855.273 23.256 23.298.930 1.298.609 26 OTHER INCOME Gain on sale of fixed assets Postage.179 44. 4.400 140. telex service charges etc.Market Treasury Bills .

201 13.739 743.000 10.000 2.1 9.Note 2011 2010 (Rupees in „000) 27 ADMINISTRATIVE EXPENSES Non executive directors fee & allowances Salaries.550 1.372 172.816 453.344 145.073 199. whichever is higher.1 27.267 876. taxes. electricity.592 382.283 16.570 13.949 359.165 76.000 5.275 12.881 720 11. Charge for defined benefit plan Contribution to defined contribution plan Rent.620.373.627 136.224 491.275 2. 27.745 5.568 653.028 1.690.1 As per the Worker's Welfare Ordinance.224 226.968 182.858 190. travelling and subscription Others 49.010.250 1. etc.502 196.680 4. etc. vehicle running expenses.240 220.856.028 4.200 1.2 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. Larkana Publician Alumni Trust . ANNUAL REPORT 2011 66 .500 845 10.195.720 850 720 11.3 27.500 51.200 3.508 490.423 27.578.7 35 27.931 25.096 15.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.379 177.168 804.049 11.2 11.720 16. insurance.2 11.080 34. allowances.577 230. 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.161 188.402 298.881 1.000 27.570 28. 1971.880 9.034 5.665 5.751 5. the Bank is liable to pay Workers' Welfare Fund @ 2% of accounting profit before tax or declared income as per the income tax return.908 99.000 11.230 2.832.1 Donations Marie Adelaide Leprosy Center.405 13.

740 23.368.056) 11.income chargeable to tax at reduced rates .588 842.349. Income Tax Appellate Tribunal (ITAT) and High Court of Sindh.137) 191.718 1.293 30 BASIC / DILUTED EARNINGS PER SHARE Profit after taxation for the year 3.433.636 400. In respect of tax year 2010.232 (370.349.070 631. taxability of profit on government securities. 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. Matters of disagreement exist between the Bank and tax authorities for various assessment years and are pending with the Commissioner of Inland Revenue (Appeals).130 968.permanent differences .156 (Rupees) Basic / Diluted earnings per share 2.72 ANNUAL REPORT 2011 67 .106) 8.927) 3.2011 2010 (Rupees in „000) 29 TAXATION For the year Current Deferred For prior years Current Deferred 3. the tax authorities have disallowed certain expenditure on account of non-deduction of withholding tax resulting in additional demand of Rs. 141.997 45.883) (262.tax for prior years . 2011 2010 29. bad debts written off and disallowances relating to profit and loss expenses.377.263.2 Relationship between tax expense and accounting profit Profit before taxation Tax at the applicable rate of 35% (2010: 35%) Effect of: . The management's appeal in respect of this add-back is currently pending with the Commissioner of Inland Revenue (Appeals).249 (1.081 (71.450 10.745 479.930.061 (51.503.267 1.60 0.452 (Number of shares in thousand) Weighted average number of ordinary shares 1.661) 586.1 The income tax assessments of the Bank have been finalised upto and including tax year 2010. These issues mainly relate to addition of mark-up in suspense to income.070 45.056) 400. adequate provision has been made by the Bank in these financial statements.tax charge pertaining to overseas branches .226 million.156 1.930.588 1.000 17. For all assessments finalised upto tax year 2010.801 (47.018 (71.293 29.others Tax expense for the year (Rupees in „000) 5.000 1.901.

543 10.669) (243.882.179.355 (27.217) 5. Projected unit credit method.324 140.002. using the following significant assumptions.002.1 Principal actuarial assumptions The latest actuarial valuation of the Bank's gratuity scheme was carried out as at December 31.123 2.430) (324.580 6.2 Reconciliation of payable to defined benefit plan Present value of defined benefit obligations Fair value of plan assets Net actuarial losses not recognised (Rupees in „000) 1.509 802.927.208.897 1.840) 2011 1.208.00% 60 Years 2010 34.931 649 7. 2011.268 ANNUAL REPORT 2011 68 .509 (964.838) 2010 34.647.268 115.255 4.207 112. was used for the valuation of the defined benefit plan: 2011 2010 Discount factor used Expected rate of return on plan assets Expected rate of salary increase Normal retirement age 12.009 34 DEFINED BENEFIT PLAN 34.662 17.876 695 7.415 (44.50% 12.571 2.654 1.841 16.966 125.903 62.438 10.50% 60 Years 2011 14.00% 14.2011 2010 (Rupees in „000) 31 CASH AND CASH EQUIVALENTS Cash and balances with treasury banks Balances with other banks Call money lendings Overdrawn nostro accounts 50. 2011 33 2010 (Number of employees) STAFF STRENGTH Permanent Temporary / On contractual basis Bank's own staff strength at the end of the year Outsourced Total staff strength 6.317 (73.773.487 1.007) 69.054) 23.150.497 41.999 32 CREDIT RATING PACRA has assigned a long term credit rating of AA [Double A] and a short term credit rating of A1+ (A one plus) to the Bank as at June 2011 (2010: AA [Double A]) for long term and A1+ [A one plus] for short term).197.00% 12.50% 12.3 Movement in defined benefit obligation Obligations at the beginning of the year Current service cost Interest cost Benefits paid Actuarial gain on obligation Obligations at the end of the year (Rupees in „000) 1.424.268 (677.002.

497 145.168 677.966 964.654) Experience adjustments on plan assets 35 DEFINED CONTRIBUTION PLAN 48.203) (28. the Bank contributed Rs.379 (145.509 1.346 352. 196.379 (44.207 112.995 153.153 18.811 (193.791 2010 2009 (Rupees in '000) 125.369 468.632) 132.730 (3.535) Experience adjustments on plan liabilities (23.394) (2.097) 546.673) The Bank operates an approved provident fund scheme for all its permanent employees to which both the Bank and employees contribute @ 8.844 144.847 163.135) 2008 2007 -------------------------------- Defined benefit obligation Fair value of plan assets Deficit 1.208.632) 677.268 802.499 (68.589 964.502 (73. 177.563) (5.415 (97.002.272 (269.635 109.317 (81.230 million (2010: Rs.502 (230.292) 56.935) 737.430 64.6 Movement in payable to defined benefit plan Opening balance Charge for the year Bank's contribution to fund made during the year Closing balance 34.217) (217.820 274.502) - 145.838) (106.2011 2010 (Rupees in „000) 34.403 (243.823 387.254 145.669 677.430 81.499 964.275 million) in respect of this fund.212) (87.840) (324.538 107.054) 48.8 Actual return on plan assets 34.430 230.33% of basic salary in equal monthly contributions.153 230.669 696.497) 5.9 Historical information 2011 -------------------------------- 677.430 696.7 Charge for defined benefit plan Current service cost Interest cost Expected return on plan assets Actuarial losses 34.379) - 115. ANNUAL REPORT 2011 69 .897) (217.669 104.292 230.5 Plan assets consist of the following: Ordinary shares Term Finance Certificates Term Deposit Receipts Pakistan Investment Bonds Units of mutual funds Cash and bank balances 34.4 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 34.264 20.403 97.324 140.423 92. During the year.379 (120.502 129.

1 Fair value is the amount for which an asset could be exchanged.617 82.751 4 279.36 COMPENSATION OF DIRECTORS AND EXECUTIVES Chief Executive 2011 2010 ---------------------------------------- Directors 2011 2010 (Rupees in '000)---------------------------------------- Executives 2011 2010 Fee Bonus 12.935 32. other assets. 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.055 354. 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.102 1. These securities are being carried at amortised cost in order to comply with the requirements of the State Bank of Pakistan.927 154.185 10. or a liability settled.763 Utilities 1.034 4 15.751 15. except for tradable securities classified by the Bank as 'held to maturity'.589.412 Post employment benefits * 74.581 1.006 90.732 30.614 23.991 2. 37 FAIR VALUE OF FINANCIAL INSTRUMENTS 37. 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.549 983 858 * This includes Rs 69. The fair value of traded investments is based on quoted market prices.804 1 49.707.097.914.044 378.142 22.873.244 Managerial remuneration 42.816.034 49.142 132. The repricing profile.915 1.061 32. The Chief Executive and certain Executives have been provided with the free use of cars and household equipments as per Bank's policy. effective rates and maturity are stated in note 42 to these financial statements.437. Fair value of fixed term loans.047.140 1.213.928.888 972 26.734. Sub-ordinated loans are carried at redeemable face value as there is no requirement to revalue these under the accounting standards as applicable in Pakistan.002 Rent and house maintenance 4.619 3.2 Off-balance sheet financial instruments Forward purchase of foreign exchange .936.045 20.net Forward sale of foreign exchange .612 Number of persons 2 10. between knowledgeable willing parties in an arm's length transaction.785 million as exgratia bonus paid to the former Chief Executive on cessation of employment.net 29.191 134. 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. In the opinion of the management.124 ANNUAL REPORT 2011 70 .999 261. 2011 Book value ------------------------------ 2010 Fair value Book value Fair value Rupees in '000------------------------------ 37.576 20.

717.320.178.662.2.802 19. Remuneration to executives is determined in accordance with the terms of their appointment.849 10.980 282.022 .483.303 836. 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.913 341. However.353.648 14.768 11.764 13.65% 2010 Corporate / Retail Commercial Banking Banking Rupees in '000------------------------------ Trading & Sales ------------------------------ Total 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 (%) 9.872 23.084 422.2.03% 10.963 654.815 122.652 4.539 8. associated companies with or without common directors.47% 11.825 29.173 5.839.38 SEGMENT DETAILS WITH RESPECT TO BUSINESS ACTIVITIES The segment analysis with respect to business activity is as follows: Trading & Sales ------------------------------ 2011 Corporate / Retail Commercial Banking Banking Rupees in '000------------------------------ Total 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 (%) 14.820 4.948.058 265.145.295 10.232.304.840.517.460.869.296.368.41% 20.258 - 4.096.843 11. ANNUAL REPORT 2011 71 .994 12.479. it acts as security agent for various Term Finance Certificates it arranges and distributes on behalf of its customers.614 . as those prevailing at the time for comparable transactions with unrelated parties and do not involve more than a normal risk.361.307 21.333. Banking transactions with the related parties are executed substantially on the same terms.184.07% 10.246.665. 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.762.599 26.209.034 25.73% 17.619 3.421 151.263 - 4.279.98% 9.948 380.392 442.839 18.158 42.361 27.378 15.569.812.928.891 44.675.66% 11. subsidiary company.199.227.933 3.047.718 468.689 23.396.82% 12.173.379.238.667.33% 39 TRUST ACTIVITIES The Bank is not engaged in any significant trust activities.561.591 1.30% 16.433.288 8.560.049 162.161 3.640 13.848.348 389. including mark-up rates and collateral.864 28.877.236 9.672 1.789 49.417 40.532. retirement benefit funds and directors and key management personnel and their close family members.742.574.700.745 411.93% 13.

924 (530.748.815) 126.776.355) 1.730 44.1 Deposits Balance at the beginning of the year Placements during the year Withdrawals / Adjustments during the year Balance at the end of the year 28.616 (1.794.819.847.939) - --------------------------------------------------- 2010 (Rupees in '000)-----------------------------------------------90.2 Advances Balance at the beginning of the year Disbursements during the year Repayments / Adjustments during the year Balance at the end of the year --------------------------------------------------- 2011 (Rupees in '000)-----------------------------------------------149.883.509) 28.686 26.603 82.986 4.000 2.939 Investments during the year Redemptions / Adjustment during the year Balance at the end of the year Provisions held against investments - Balance at the beginning of the year Investments during the year Withdrawals during the year --------------------------------------------------- 2010 (Rupees in '000)-----------------------------------------------253.256 40.960.753 60.955 2.339) 9.942.575 2.000 20.550.232 1.952 (97.012 10.392) 1.787 162.589 4.932.256 526.947 (45.189) 40.298.804) 50.064) 1.591 32.832.741.000 400.416.973) 149.769.227.991 148.707 (10.755) 148.718.053 1.769 (263.37 ANNUAL REPORT 2011 72 .000 1.626 44.332 (732.390 (11.949 - Balance at the end of the year Provisions held against investments - 1.418 10.787 44.1 (Rupees in '000) Management Personnel Companies/ Others 40.255 (49.096 Balance at the beginning of the year Disbursements during the year Repayments during the year Balance at the end of the year 7.848.162 (61.161 5.3 Investments Balance at the beginning of the year --------------------------------------------------- 2011 (Rupees in '000)-----------------------------------------------50.897) 2.000 5.435 9.053 57.564 122.113) 94.476 (10.686.101) (594.19.631.613 7.126 400.686 400.095 (62.930) (196.261 (56.117.232 40.297 606.959 Balance at the beginning of the year Placements during the year Withdrawals during the year Balance at the end of the year --------------------------------------------------- 2010 (Rupees in '000)-----------------------------------------------756.Details of transactions with related parties and balances with them as at the year-end are as follows: Key Directors --------------------------------------------------- Group/ Associated 2011 Associates note 9.

---------------------------------------------------

2011 Group/ Key Directors Management Associated Associates Subsidiary Strategic Personnel Companies/ note 9.19.1 Investments Others (Rupees in '000)-------------------------------------------------

Total

40.4

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 - 9,280,236 - (9,280,236) - 9,280,236 - (9,280,236) -

2010
---------------------------------------------------

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

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) -

2011
---------------------------------------------------

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

40.5

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 - 10,198,203 - (10,198,203)
-

-

-

-

-

-

10,198,203 (10,198,203) -

---------------------------------------------------

2010 (Rupees in '000)
- 100,000 - 13,602,511 - (13,702,511) -

---- -- --- --- --- --- -- --- --- --- -- --- --- --- --- -- --- -

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) -

Note

2010 2011 (Rupees in „000)

40.6 Advances Running finance - Subsidiary company - Other related parties Long term loans - Subsidiary company - Other related parties 40.7 Contingencies and commitments Letters of credit and acceptance outstanding Guarantees outstanding 242,798 993,913 27,690 165,578 2,979 1,798,436 626,125 9,218 1,741,096 600,000 558,918

ANNUAL REPORT 2011 73

Note

2011

2010

(Rupees in „000)

40.8 Customer accounts PLS accounts - Subsidiary company - Other related parties Current accounts - Subsidiary company - Other related parties Fixed deposit accounts - Other related parties 40.9 Balances with other banks - Balance with United Bank Limited 40.10 With subsidiary company Mark-up income Brokerage expense Rent income Bank charges recovered Provision made against investment (Reversal) / Provision against financing to subsidiary Mark-up receivable on advances Provision held against investment Rent receivable Bank balances Brokerage payable 40.11 With associates Insurance premium paid to Alfalah Insurance Company Limited Rent income from Alfalah Insurance Limited Capital loss on redemptions of units of Alfalah GHP Income Multiplier Fund Mark-up income on advances Mark-up expense on deposits 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 - note 9.19.1 Provision made during the year in respect of investment in Wateen Telecom Limited - note 9.19.1 336,096 2,476 2,610 322,757 318,512 245,230 136,524 1,705,824 113,553 28,172 841 7,037 67 748,564 (605,427) 4,899 824,564 2,960 2,211 84 32,725 2,275 3,298 77 609,218 108,121 76,000 3,603 214 1,279,304 930,689

2,978,191

1,271,861

2,211 80,153

4,621 112,570

130,794

64,296

ANNUAL REPORT 2011 74

Note

2011

2010

(Rupees in „000)

40.12 With other related parties Mark-up income on advances Rent income from Warid Telecom (Private) Limited 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 - note 9.19.1 Provision made during the year in respect of investment in Wateen Telecom Limited - note 9.19.1 Capital gain on sale of shares of United Bank Limited Loss on redemption of units of UMMF / UGIF Contribution to employees provident fund Contribution to Gratuity fund Provision made during the year in respect of strategic investments Mark-up income on financing to group company 40.13 The key management personnel / directors compensation are as follows: Salaries and allowances Advance against salary 630,112 3,000 577,964 363,304 20,089 70,639 91,359 839,892 173,670 442 196,230 230,502 80,126 36,916 1,353 5,641 177,275 145,379 53,963 62,076

In addition, the Chief Executive and certain Executives are provided with Bank maintained cars and other benefits.

41

CAPITAL ADEQUACY

41.1 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.

ANNUAL REPORT 2011 75

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. On and off-balance sheet assets in the banking book are broken down to various asset classes for calculation of credit risk requirement. External ratings for assets, where available, are applied using the assessments by various External Credit Assessment Institutions (ECAIs) and aligned with appropriate risk buckets. Otherwise, the exposures are treated as unrated and relevant risk weights applied.

In addition, 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. Collaterals if any, are used as credit risk mitigant after applying appropriate haircuts under the Comprehensive Approach. Risk weights notified, are hence applied at adjusted exposures, wherever credit risk mitigation is available. Collaterals used include: Government of Pakistan guarantees, cash, gold, lien on deposits, shares, government securities, bank and corporate guarantees and other debt securities that fall within the definition of eligible collaterals and also fulfill other specified criteria under the relevant capital adequacy guidelines.

The calculation of Capital Adequacy enables the Bank to assess the long-term soundness. As the Bank carries on the business on a wide area network basis, 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. There has been no material change in the Bank‟s management of capital durin g the year.

41.2 Capital adequacy ratio as at December 31, 2011 The capital to risk weighted assets ratio, calculated in accordance with the State Bank of Pakistan's guidelines on capital adequacy, using Basel II standardised approaches for credit and market risks and basic indicator approach for operational risk is presented below.

ANNUAL REPORT 2011 76

836.741) 17.961.833.477.1(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 1.777 13.136) (6.254 5.291.758 5.460) 7.506 (100.675) (10.460) 21.909 627.059 (664.445 26.318 ANNUAL REPORT 2011 77 .491.678.117.860 (662.956) (262.873 4.Note 2011 2010 (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 Reciprocal investments in collective investment schemes managed by associated asset management company Deductions in respect of investment in TFCs of other banks in excess of limits prescribed in Appendix 1.132 2.415.739 667.25% 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) 13.598.001 (99.477 29.332) (100.454.563 2.248.563 3.418) (6.406 1.491.430.741) 8.661.522 1.567) (99.639.000 438.040 858.

639.207 2.910 33.Capital requirements 2011 2010 Risk Weighted Assets 2011 2010 ------------------------------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 (a) 1.347 391.639.469 3.291.141 13. The Bank uses these ECAIs to rate its exposures denominated in Bangladeshi currency on certain corporates and banks incorporated in Bangladesh. 2009 has accorded approval to the Bank for use of ratings assigned by these agencies.573.783 249.704.077 143.036 9.659.384.464 10.491 3.404.446 11.174.637 108.53% (b) [ a / b * 100 ] 41.456.990 59.932.381 16.102.459 3.807.440 17.744 24.742 4.606 302.437 745.779 4.666.664.684.498 10.846.021.742 503.748 11.280.497 35.506.875 743.877.039 5.945 31.088 30.369.160 568.178 412.354.333.418 5.3 Types of exposures and ECAIs used Exposures JCR-VIS PACRA - S&P Moody’s Fitch CRAB & CRISL^ Sovereigns other than PKR claims PSEs Banks Corporates ü ü ü ü ü ü ü ü - ü - ü - ü ü - ü ü ^The State Bank of Pakistan through letter no.327 10.034.591 32.541. BSD/BAI-2/201/1200/2009 dated December 21.254 26.414 1.862. ANNUAL REPORT 2011 78 .122.783 249.246.953.886 3.804 524.698.748 29.534.043.338 811.221 2.665 12.349.675 1.404 917.813 399.266 109.371 7.318 250.599 5.464.438 64.670 386.220 208.200 2.167 1.932.174 440.440.846.700 3.117.289 357.965.210.644 1.215 (b) 24.60% 10.061 3.724 129.081.238 1.749 13.531 250.916.444 16.591.

386.507.012.797 3.123 195. The Bank has acquired Temenos T24 banking system as its core banking solution.696 46.992.178 19.503.196 11.071. measuring.569.411.190.806.3 4.806. In order to meet the requirements. - An independent risk review function exists at the Bank in the form of Internal Audit Group that reports directly to the Board Audit Committee. measurement.467 73.091.PKR claims less than three months Corporates Corporates Corporates Corporates Retail portfolio Unrated Total 4.952 7.336 1.712 103.637 240.015 42.6 *CRM= Credit Risk Mitigation 42 RISK MANAGEMENT The Bank has in place an approved integrated risk management framework for managing credit risk.493 3.920.503.627 200.Credit exposures subject to standardised approach .355 8.664 1 2 3.142 983. liquidity risk and operational risk as evidenced by its Board approved “Risk Management Policy" and "Risk Management Manual".504.2.179. RMD is the organisational arm performing the functions of identifying.971.FCY claims less than three months Banks . in line with its ambition to bring maximum sophistication to the risk management function.235 24.919 2.656.969 17. ANNUAL REPORT 2011 79 .054.352.264.1 Credit risk Credit Risk Management processes encompass identification.488. Bank is evaluating appropriate systems for risk management.829 4.5 1 1.132 12.457 7.336 1.on balance sheet exposures Rating category Amount outstanding 2011 Deduction CRM* Net Amount Amount outstanding 2010 Deduction CRM* Net Amount Exposures Sovereigns other than PKR claims PSEs Banks Banks Banks .488 47.010 6.992 13.971 3.260. The Bank has extensively pursued the implementation of Basel II in the Bank.738 259.343.684.101.210 4.794.986 1.009.645.361 37. monitoring and control of the credit exposures. monitoring and controlling the various risks and assists the Apex level committee and the various sub-committees in conversion of policies into action. The Bank's focus over the coming years will be to further enhance risk models.4.933.861. Further the discretionary powers have been revamped to include presence of Credit Division even at the lowest level.880.756.252 4.378 1. - As a policy the reporting line of the risk management function has been kept completely independent of the businesses division.891.441 87.874 144 11.4 5.3 4.453 1.12.832.696.709 4.441 9.300 149. 42.960 1. market risk. 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.092. significant steps have been taken by the Bank including review / revision of policies.256 6.190.597 19.132 .871 13.270. rating models and introduction of rating based discretionary powers etc.568 4. procedures.863.588 46.361 .015 39.969 .012.264. for Pillar 2 disclosures ICAAP exercise was also conducted.791. Further Bank's existing systems are also being enhanced in line with the growing challenges.671.663 87.873. In the Bank's experience.078.671.537 6.003.100.171 983.111 2.973 118.839 899. assessment.098.755 6.581. processes and systems infrastructure.738 93. a key to effective credit risk management is a well thought out business strategy.615 64.378 2.121 310.010 40.832.488 41.756 4.826.969 11.5 1. Moreover.581.5 8.104 11.2.356 2.355 8.FCY claims less than three months Banks .7.018.863.581 50.

The System now also has the capability to auto generate alerts on accounts showing weakness in financials and hence requiring a more vigilant monitoring. industry.designed credit appraisal. processes have been set for fine-tuning systems & procedures. the management has laid down the road-map to move towards the implementation of BaselII advanced approaches.The Bank. which also incorporates a comprehensive system of cross -checks for data accuracy. Special Asset Management (SAM) Department is functional and handles this responsibility in compliance with the regulatory requirements. A sophisticated Internal Credit Rating System has been developed by the Bank. will take place in due course with roll out of the Credit Initiation System in other business groups. CMD maintains a Watchlist of such accounts which is generated on a quarterly basis and is also reviewed by RMD. Further the compliance of regulatory & internal limits is also monitored and any deviations are ratified from the competent authorities. Proactive credit-risk management practices in the form of Integrated Bank-wide Risk Management and Internal Control Framework. maturity and large exposure. The implementation of facility Rating System. sanctioning and review procedures for the purpose of emphasizing prudence in lending activities and ensuring the high quality of asset portfolio. For credit risk. as per State Bank of Pakistan Guidelines. all documentation including security documentation is regular & fully enforceable and all disbursements of approved facilities are made only after necessary authorization by CAD. The Bank has also developed Facility Rating System in line with SBP‟s guidelines. constitute the important risk management measures the bank is engaged in for mitigating these exposures. The Risk Management Division also monitors the NPL portfolio of the Bank and reports the same to BRMC. reliable and valid fashion which will ensure advanced level of sophistication in the Credit Risk measurement and management in the years ahead. The current focus is on augmenting the Bank‟s abilities to quantify risk in a con sistent. The system takes into consideration qualitative and quantitative factors of the counter-party. which is capable of quantifying counter-party & transaction risk in accordance with the best practices. As part of prudent practices the Risk Management Division conducts pre-fact validation of major cases from integrated risk point of view while the discretionary powers for Credit has been revamped to incorporate Obligor Risk Rating and presence of Credit Division even at lowest level. The Head of Credit Risk Department reports directly to the General Manager (GM) . Internal rating based portfolio analysis is also conducted frequently. The Bank has built-up and maintained a sound loan portfolio in terms of well-defined Credit Policy approved by the Board of Directors. The system is continuously reviewed for best results in line with the State Bank of Pakistan‟s guidelines for Internal Credit Rating.Risk Management Division. Besides assisting the Board of Directors in determining the strategic direction of the Bank by providing them the risk perspective it ensures 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 is gradually being rolled out for other business groups as well. the system is backed by secured database with backup support and is capable of generating MIS reports providing snapshot of the entire portfolio for strategizing and decision making. ANNUAL REPORT 2011 80 . At Bank Alfalah Limited. A Centralized Credit Administration Division under Operations Group is working towards ensuring that terms of approval of credit sanctions and regulatory stipulations are complied. transaction structure & security and generates an internal rating vis-à-vis anticipated customer behaviour. Special attention is paid by the management in respect of non-performing loans. The GM RMD reports directly to Chief Risk Officer who reports to CEO. Board Risk Management Committee ensures the Board level oversight of risks embedded in Bank's operations. Its credit evaluation system comprises of well. The adherence to Risk-appetite statement approved by the Board is monitored by RMD. Credit Monitoring Division (CMD) keeps a watch on the quality of the credit portfolio in terms of its strengths. procedural manual has been developed. 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 Bank manages its portfolio of loan assets with a view to limit concentrations in terms of risk quality. Simultaneously. The system functionality has been enhanced to provide support to loan origination function and all the Credit Initiation process for Corporate Banking Group. has migrated to Basel II as on January 1. adherence to Basel II accord. which shall provide a sophisticated platform for prudent risk management practices. 2008 with the standardised approach. providing estimated LGD (Loss Given Default). 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. geography. information technology capabilities and risk governance structure to meet the requirements of the advanced approaches as well. Moreover. weaknesses and vulnerabilities.

A detailed procedural manual specifying return-based formats. SSC/DSCs. the Bank uses the comprehensive approach for collateral valuation. The valuation of the properties is carried out by an approved valuation agency.2 Disclosures for portfolio subject to the Standardised Approach & Supervisory risk weights in the IRB Approach-Basel II specific 42.1.lowest rating is considered. methodologies and processes for deriving Credit Risk Weighted Assets in accordance with the SBP Basel II Standardised Approach is in place and firmly adhered to. These products are offered in line with the SBP prudential regulations and approved product notes which also deal with types of collateral. 42. Moodys.1. For retail products. long-term rating is used.2.1 Credit Risk .1 External ratings SBP Basel II guidelines require banks to use ratings assigned by specified External Credit Assessment Agencies (ECAIs) namely PACRA. Additional security such as pledge of shares.3. 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. to produce volatility -adjusted amounts for collateral. the security to be taken is defined in the product policy for the respective products.1. valuation and margining. the Bank reduces its credit exposure to a counterparty when calculating its capital requirements to the extent of risk mitigation provided by the eligible financial collateral as specified in the Basel II guidelines.3 Disclosures with respect to Credit Risk Mitigation for Standardised and IRB approaches-Basel II specific 42. The State Bank of Pakistan through its letter number BSD/BAI-2/201/1200/2009 dated December 21. For project finance. ANNUAL REPORT 2011 81 . These adjustments.3.3. 42. in order to cover the entire exposure Personal Guarantees of Directors are also obtained by the Bank. 42.42. 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. short-term rating given by approved Rating Agencies is used. Moreover. The decision on the type and quantum of collateral for each transaction is taken by the credit approving authority as per the credit approval authorisation approved by the Board of Directors.2 Collateral valuation and management As stipulated in the SBP Basel II guidelines. Fitch and Standard & Poors. charge on receivables may also be taken. 42. JCR-VIS.1. are reduced from the exposure to compute the capital charge based on the applicable risk weights.1. The Bank uses these ECAIs to rate its exposures denominated in Bangladeshi currency on certain corporates and banks incorporated in Bangladesh. The Bank also offers products which are primarily based on collateral such as shares. Under this approach. security of the assets of the borrower and assignment of the underlying project contracts is generally obtained. collateral is taken in line with the policy.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. Housing loans and automobile loans are secured by the security of the property / automobile being financed respectively. 2009 has accorded approval to the Bank for use of ratings assigned by CRAB and CRISL.1. Under TSA banks are allowed to take into consideration external rating(s) of counter-party(s) for the purpose of calculating Risk Weighted Assets.). the lower rating is considered and where there are three or more ratings the second . loan against shares etc. also referred to as „haircuts‟. fixed assets are generally taken as security for long tenor loans and current assets for working capital finance usually backed by mortgage or hypothecation. In line with Basel II guidelines.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 case of corporate and small and medium enterprises financing. specified securities and pledged commodities. cash collateral. For facilities provided as per approved product policies (retail products. For exposures with a contractual maturity of less than or equal to one year. TDRs.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. The Bank uses external ratings for the purposes of computing the risk weights as per the Basel II framework. Where there are two ratings available. whereas for long-term exposure with maturity of greater than one year.

547 569.20% 5.00% Contingent liabilities * (Rupees Percent in '000) 475. This includes Cash / TDRs.862 5.10% 0.537.692 529.13% 2.13% 100.1.418. National Savings Certificates.715 12.837.758 2.144.506.066.240.20% 0.424.05% 1.22% 9.047.814 1.584. Moreover.582.166.4 Segmental information 42.596.382 112.152. and single/group borrower exposures.239.083.820 1.481 4.829.06% 0.321 1.794.93% 5.566 2.54% 0.35% 0. In general.96% 1.1 Segments by class of business 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 16.830 401.514 2.1.23% 6.67% 3.76% 1.566 2.208.208 3.808 1.040.240 1.341.744 Surgical Goods 479.610 10.05% 3.488.24% 2.870. the Bank is in the process of developing Group Rating framework and is also working on the framework to restrict the per party / per group exposure limits based on the Internal Risk Rating of the obligor and the group.629.35% 0.012 Textile Spinning 14.886 1.786.08% 1.529.3.216.08% 0.00% 1.885 23.1.05% 0.603 3.40% 0.547 116.247.625 4.755 2.685 8.94% 23.725.70% 1.146 5.253 3.241 Rice Processing and Trading/ Wheat 6.207.605 318.79% 0.131 10. as a prudential measure aimed at better risk management and avoidance of concentration of risks.825 578.19% 1.81% 1.1.263. 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).126.00% 2011 Deposits (Rupees Percent in '000) 4.270.389 829.47% 9.675.49% 11.022 7.888 108.397.355 ANNUAL REPORT 2011 82 .72% 3.32% 0.256 51.058 13.62% 3.25% 0.617 Shoes and Leather garments 1.852 10.001 20.42.10% 2. Within credit portfolio.96% 1.729.799.783 565.00% 20.52% 7.010.975 Others 21.31% 0.276.32% 100.06% 0.75% 0.843 649.135.305 1.409.372. Further.00% 0.84% 10. in order to restrict the industry concentration risk.834 1.616 1.05% 0.114.250.027 2.36% 5.304 412.252 Individuals 27.51% 3.828.07% 1. securities issued by Government of Pakistan such as T-Bills and PIBs.078 72.056 794.935.090.983 6.80% 0.735 2. industry.148 21. certain debt securities rated by a recognised credit rating agency.727.3.941.10% 0.790 3.48% 0.27% 2.836 22.890. Additionally.41% 3.51% 0.053 475 3.44% 3.558 101.384 877.00% 2.31% 0.211 7.56% 0. Gold.439.74% 0.767.789 3. for Capital calculation purposes.78% 28.59% 0.142.836 6.92% 0.904 3.929 611.44% 3.857 32.37% 0.26% 100. the SBP has prescribed regulatory limits on banks‟ maximum exposure to single borrower and group borrowers.08% 2.679 Welfare Institutions 103.846. 42.821.52% 0.974 3.595.96% 0. mutual fund units where daily Net Asset Value (NAV) is available in public domain and guarantees from certain specified entities.127 Sports Goods 305.78% 0.516 417.786 1.578.090 Sugar 3.332 444.104.51% 0.287 0.510 1. geography.58% 0.545 3.84% 5.804.247.292.915 21.455 6.31% 3.39% 1.02% 28.505.35% 0. the Bank recognises only eligible collaterals as mentioned in the SBP Basel II accord.09% 0.781 62.418 2.29% 0.91% 20.764 15.290.5 Credit concentration risk Credit concentration risk arises mainly due to concentration of exposures under various categories viz.4.176 531.163.42% 3.994 12.337 4.70% 1.493.490.457 Textile Weaving 3.92% 0.474 3. 42.64% 1.67% 0.82% 3. the Bank considers all types of financial collaterals that are eligible under SBP Basel II accord.23% 2.741 1.68% 1.787.927.05% 12. BAL‟s annual credit plan spells out the maximum allowable exposure that it can take on specific industries for every business group.14% 0.30% 0.709.15% 2.676.329 211. in line with the SBP Basel II requirements.598 9.113 1.72% 0.45% 2.28% 0.4 Types of eligible financial collateral For credit risk mitigation purposes.569.50% 1.05% 0.969 314.560 14.408 93.74% 2.056 7.000 2.989 Textile Composite 15.

35% 100.632 650 5.230.471.423.264 2.493.47% 13.711 1.350 2.206 2.00% 0.22% 6.991.901 450.523 108.17% 2.453 1.957 947.750.846.224.10% 1.598.795 4.752 2.226 2.278 81.956 24.07% 14.388.04% 0.764.230.614.92% 0.00% 4.39% 2.064 109.01% 1.37% 0.384 766.252.326.70% 3.839.940.00% 2.26% 1.74% 1.94% 2.32% 1.13% 0.634.507 10.404.095.132 12.53% 3.911.54% 0.287 28% 72% 100% ANNUAL REPORT 2011 83 .886 15% 85% 100% Advances (Gross) (Rupees Percent in '000) Public / Government Private 23.855.450 201.355 11% 89% 100% Contingent liabilities * (Rupees Percent in '000) 31.395.296.646 * contingent liabilities for the purpose of this note are presented at cost and includes direct credit substitutes.431.43% 0.426 31.514 2.359 354.788 1.770 947.581 791.935 1.878 82.41% 0.246 1.487.25% 1.047.1.990 1.06% 1.247 2.582.093 34.09% 0.397.07% 7.596 16.53% 1.79% 22.2 Segment by sector 2011 Deposits (Rupees Percent in '000) 59.618.508 1.984.932.283.518 1.738 6.321.595 1.554.138 0.21% 0.676 3.099 7.02% 0.55% 1.313 2.975.13% 9.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 16.49% 12.36% 4.374.779.267 1.91% 6.825 341.831 3.344 350.022.267 155.213 15.509 5.647 2.53% 3.145 44.645 691.09% 1.14% 1.009 112.11% 2.021 1.434.69% 1.827.27% 7.706 7.336 187.06% 0.145 7.10% 0.042.038.17% 0.99% 0.39% 11.723 4.212.21% 3.904.09% 3.365.137.682.38% 0.670 2.526 2.860.878 0.376 3.21% 0.306.454.615 163.684 352.20% 0.313 1.454.04% 0.244.991 1. transaction related contingent liabilities and trade related contingent liabilities 42.254 2.084 3.349.70% 0.454 9.075 538.00% 1.75% 0.45% Contingent liabilities * (Rupees Percent in '000) 69.07% 0.87% 8.355 586.00% 62.15% 0.17% 0.061 401.853 2010 Deposits (Rupees Percent in '000) 0.27% 0.80% 30.057.795 4.914 4.98% 1.761.100 13.08% 0.492 627.322 1.01% 1.469 750.496.4.72% 1.158 17.017.62% 1.52% 0.431 24.537 3.797 872.013 6.17% 13.384.019 211.029 29.514.67% 1.00% 7.53% 0.57% 0.298.498 148.877 6.581.12% 373.04% 100.533 33.511.507 10.123.69% 0.669.099.472.33% 2.180.688.826.311 3.90% 1.043 1.62% 0.540 1.052 3.589 6.11% 0.70% 100.22% 0.385.70% 0.37% 3.40% 16.63% 0.464.53% 1.16% 0.37% 7.00% 1.03% 31.636 80.283 1.336.102.791 1.022 20.735 218.023 2.244.507.408.817 4.247.553 2.92% 0.62% 16.595 154.015.10% 0.003.27% 3.83% 6.

5 Geographical segment analysis Profit before taxation ------------------------------ 2011 Total assets Net assets employed employed Rupees in '000------------------------------ Contingent liabilities * Pakistan Asia Pacific (including South Asia) Middle East 4.665.549 225.022 10.605 39.829.3 Details of non-performing advances and specific provisions by class of business segment Classified Advances 2011 Specific Provisions Held 218.4 Details of non-performing advances and specific provisions by sector Classified Advances 2011 Specific Provisions Held 2010 Classified Specific Advances Provisions Held 18.320.342.311 42.895 113.753 42.085 2.199.782 218.280 3.4.496 193.840.599 278.330.320.174.410 85% 305.944 2.753 19.096.281 89.240.614 12.365 109.959 100.038 112.495.646 *contingent liabilities for the purpose of this note are presented at cost and includes direct credit substitutes.692 5.173.821 62.512.220.004.914.4.950 56.821.096.305.483.Advances (Gross) (Rupees Percent in '000) Public / Government Private 32.679.550.096 531.614 12.845.846.534.891 2.102 421.753 18.862 386.122.679 18.802 Profit before taxation ------------------------------ 18.700 2.629.433.745 411.801.287 Contingent liabilities * 2010 Total assets Net assets employed employed Rupees in '000------------------------------ Pakistan Asia Pacific (including South Asia) Middle East 933.090 ------------------------------ Rupees in '000------------------------------ Agriculture.974 6.330 6.137.506.690 31.372 71.499.718 468.157.095 25.756 5.571 703.852 3.614 12.612.544 109.901 100% 354.997.022 10.244.813 103.009 4.801 88.649.330.629.853 2010 Deposits (Rupees Percent in '000) 14% 86% 100% Contingent liabilities * (Rupees Percent in '000) 19.629.777.169 615.011 6.426.735.541 1.295 150.1.4.366 141.569 65.431.642 103.902.294.928 22.888 1.679 42.151 2.679 ------------------------------ Rupees in '000------------------------------ Public / Government Private 19.815. forestry.382 369.497.015.320.224 151.1.523 3.206 6.175 5.777.363 374.244.975 225.525 6.096.368.022 10.241 9. hunting and fishing Textile Chemical and pharmaceuticals Automobile and transportation equipment Wholesale and retail trade Individuals Others 508. transaction related contingent liabilities and trade related contingent liabilities ANNUAL REPORT 2011 84 .330.1.493.042 10.192 2010 Classified Specific Advances Provisions Held 505.400 19.839 18.646 18% 82% 100% 15% 48.071 186.

counterparties enter into swaps.483.877 .095 3.505 2.139) 25.985 4.295 ANNUAL REPORT 2011 85 .859 103.300 116. adjusted and approved periodically.140 737.544 Rupees in '000 Pakistan Rupee United States Dollar Great Britain Pound Japanese Yen Euro Other currencies Total foreign currency exposure Total currency exposure 354.837 468.549 1.177 2.299) 65.173.462.126 4.732.655. The foreign exchange exposure limits in respective currencies are managed against the prescribed limits. The currency risk is regulated and monitored against the regulatory / statutory limits enforced by the State Bank of Pakistan. Off-balance sheet financial instruments are contracts which are the resultant outcome of the import and export transactions.216.285 8.838.800 6.099 442.161 1. These limits are reviewed.762.882 (26.600 496.285 13.777.276.992 57.938 18.632) 22.500 2.027 11.000 284.396.305.965 16.535 10.515 2. The Bank uses the Standardised Approach to calculate capital charge for market risk as per the current regulatory framework under Basel II. 42.579 47.123.632 129. Market risk mainly arises from trading activities undertaken by the Bank‟s treasury.25.139 399.333 5.746 37. Currently.741.243.946.606 24. It also includes investments and structural positions in the banking book of the Bank.758.562.767 15.763 1.207.532.750 56 3.2 Market risk Market risk is the risk of losses due to on and off-balance sheet positions arising out of changes in market prices. The Bank manages this risk by setting and monitoring dealer.22.095 386. The analysis below represents the concentration of the Bank's foreign currency risk for on and off balance sheet financial instruments: 2011 Assets ------------------------------ Liabilities Off-balance Net foreign currency sheet items exposure (6. 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.137.246 7.887 21.459 (23.839 316.359 6.675.642.42.1 Foreign exchange risk Foreign exchange risk arises from the fluctuation in the value of financial instruments consequent to the changes in foreign exchange rates. Moreover. The buy and sell transactions are matched in view of their maturities in the different predefined time buckets. forward transactions in inter-bank market on behalf of customers to cover-up their positions against stipulated risks.093 411.791 289.346.665 18.973) 88.868.176.045.045.150.377. currency and counter-party limits for on and off-balance sheet financial instruments.623.294 36. To manage and control market risk a well defined limits structure is in place.544. 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.700.802 417.038 Rupees in '000 Pakistan Rupee United States Dollar Great Britain Pound Japanese Yen Euro Other currencies Total foreign currency exposure Total currency exposure 449.838.772 15.054.956.223 16.009 .716 389.243 5.291.470 73.764 2010 Assets ------------------------------ Liabilities Off-balance Net foreign currency sheet items exposure (16. Moreover.2.178. the Bank calculates 'Value at Risk (VaR)' on a daily basis by using 'Historical Method' taking into consideration the data of over 2 years.

42. 42. The Bank‟s interest rate risk is limited since the majority of customer deposits are retrospectively re-priced on a biannual basis on the profit and loss sharing principles. In order to ensure that this risk is managed within acceptable lim its. while the AFS portfolio is maintained with a medium term view of capital gains and dividend income. limits / controls for equity trading portfolios of Equity Portfolio Unit.2. Special emphasis is given to the details of risks / mitigants. ANNUAL REPORT 2011 86 .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 Asset and Liability Management Committee (ALCO) monitors the re -pricing of the assets and liabilities on a regular basis. The Bank‟s equity trading book comprises of Equity Portfolio Unit‟s classified as Held for Trading (HFT). 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.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.

700.515 7.142 22.378.358 12.025 1.417 12.318 954 949.013 11.624 11.108.597.094.453 27.230.287.908 63.557.713 449.716.068.311 7.482.479 101.974.338 9.530.091.620 12.767.152.476 2.917 12.845.899.181 5.364) 32.592 76.633.343 14.348.006 146.813 9.772 5.247.038 5.510.336.527 396.992 - 0.230.618 21.61% 0.692 441.619 11.908 47.25% 13.847.044.951 78.121.10% - 50.533 13.591 28.545.406 954 1.044.738.09% 11.425.129.731.588 680.760.022 5.327 9.768 198.256.565.524.940 1.sale Repo transactions resale Repo transactions repurchase Off-balance sheet gap Total yield / interest rate risk sensitivity gap Cumulative yield / interest rate risk sensitivity gap 7.807.833.780 3.693 9.464 954 1.128.346 948.508.730.027 13.155.375 477 126.413.155 41.597.030 931.128.purchase Forward exchange contracts .966.710 7.074 3.015.442 26.161.756 17.192 8.197.078 1.528.675.329 28.592 650.521.244.294.667.678.306.499 819.237 1.588.908 60.87% 14.920) 961.340.841 16.726.720.904 88.756 5.168.090) 56.376.416.074.014.424.124 354.385 12.912 94.074 44.470 1.096.047 (26.688 13.050.077 40.845.779.428.061 4.710 6.941.586 7.097 952.029 5.081 101.029 58.446.852 (28.769.42.021.881 11.206.559 (45.754.78% 10.299.08% 15.192 32.351 637.780 1.156 17.509.765.812.680.474 7.184.383 49.596.659.981.896.272 12.934.004.403.40% 6.338 26.155 9.804 4.770.322.574.138.002 - 87 .729 34.846.459 11.546 12.730.078.988 11.861 207.896.476 35.273 8.332.998 (47.988 15.812.309 84.63% 7.265.614 20.389 8.979 11.3.004.441 126.419.908 89.295 29.825.301.685 428.435.398 7.497.773 30.181.236 77.605.679.663 26.402 1.476 11.633.361) 43.299 794.904 12.971 3.734.667.206.082.882.899.062 35.941.556.751 122.116.712.228 6.298.150.149 22.899.118.865 2.840.265.468.158.906.219 57.486.394 3.747.234 388.566 8.029.229.800 11.329.292 38.29% 12.732 6.961.175 13.00% 6.698.707.511.423 2.662 9.958.635) ANNUAL REPORT 2011 On-balance sheet gap Off-balance sheet financial instruments Forward exchange contracts .867.038 8.757 13.447 28.988 56.193 453.479 4.599.694.903.118.732 19.024 (81.867.692 161.874 6.256.534.987.257 8.389 9.521 477 122.597.187 (20.294.812 12.337.778.882.146.088 6.534.585.411) 7.430.sale Repo transactions resale Repo transactions repurchase Off-balance sheet gap Total yield / interest rate risk sensitivity gap Cumulative yield / interest rate risk sensitivity gap 29.587.purchase Forward exchange contracts .093.179.780 11.038.430.822.455 500 1.725.460 32.618) 4.193 70.479 33.616.201 2.724 4.118 619 2.740.081 9.342.685.567.662 17.742 63.978 401.75% - 41.654 37.492.097 1.255 6.121.873.882 13.773 9.479 12.244.322.259 64.702 12.148.903 30.407 166.536.38% - 2010 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 - 0.820 19.348 1.453 18.303.309 7.533 124.278 54.213 30.080.157 25.556 113.34% 5.886 7.667.461 53.701 97.495.155 111.941.404.736 8.495.364 30.294.553 62.327 12.740 59.614.080 33.553 58.155 9.480.234.803 4.045.519 6.846 954 962.564 24.528) (21.657.276 3.737 54.114 28.937 22.745.127 4.523 12.409 11.456.360 11.540 (91.931 2.454.534 4.445 7.870 53.630.784) 8.904.402 1.123 1.523 10.403.294.623 41.061 1.155 26.946 10.093.519 14.837 9.047 1.430 83.072.937.530.415.829.512 12.728 9.244.280 7.527 56.487 7.631 7.964.274 53.625 26.720 6.118.837 23.529.184 29.191.1 Mismatch of interest rate sensitive assets and liabilities Effective Yield/ Interest Rate ----------------------------------------------------------------------- 2011 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 .412 55.461 29.114.531.638 137.89% 12.936.628.536.657.936 1.532 1.750.849.726.667.507 (1.851.418 7.964.725.234 138.466 3.099.181 5.749 1.757.521.224 75.915.65% - 4.809.265.028 5.

060.586 14. depositor‟s concentration both in terms of the overall funding mix and avoidance of undue reliance on large individual deposits.825 1. 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.698 411.162.396. The BOD has approved a comprehensive liquidity management policy which stipulates the early warning indicators of liquidity risk and maintenance of various ratios.295 ANNUAL REPORT 2011 88 . Moreover.204. Moreover.683 421.029 13.178.839 388. 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.745.483. 453.4 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.234.3.982 389.303. The results are regularly reviewed by ALCO for taking appropriate measures.Note 2011 2010 (Rupees in „000) 42.394 115.3.702 1.2 Reconciliation of Assets and Liabilities exposed to yield / interest rate risk with Total Assets and Liabilities Total financial assets as per note 42.1 Add: Non financial assets Operating fixed assets Deferred tax assets Other assets Total assets as per statement of financial position Total liabilities as per note 42.555 704.802 441. The CFP is regularly reviewed and updated. ALCO monitors the maintenance of liquidity ratios.1 Add: Non financial liabilities Deferred tax liabilities Other liabilities Total liabilities as per statement of financial position 42. Further the bank has designed different scenarios of cash outflows to stress test efficacy of its liquid assets and its impact on Profit & Loss.764 396.173. Bank also has a 'Contingency Funding Plan' (CFP) in place to address liquidity issues in times of stress / crisis situations.062 442.574.3.265 468.388.919 316.

295 22.521.826.777. with the approval of ALCO.311 7.874 52.386 74.680 38.939 50.850 (4.685 428.231 161.255 6.876 1.870) 9.069 (99.382.754 442.861 207.155 6.278 103.821 25.000 163.168.872.551 124.453 18.207 1.294.563 3.827.031 (2.403.578. Therefore.895 680.458 468.176 138.667. these deposits have been classified based on management experience with such class of deposits.819 506.224 623.361.620 1.735 54.101.752 208.034.931 5.307 107.292.244.987.055) Over 2 to 3 Years 4.051 56.126.625 38.756 22.184 16.707.290.120 34.966 50.678 9.988 22.152.407 166.483.305.226.402 55.606 6.948.net of tax 89 .559.974.868 952.588 558.964.453 (10.603 78.281 93.211.173.912 273.882.059 39.125 59.063 (5.757.236) Above 10 Years 34.4.559 7.666 30.008) 16.399.814. these deposits are payable on demand.530. However.498.825 161.216 57.539 Over 1 to 2 Years 7.198 Over 6 Months to 1 Year 51.080.383 21.567.989 11. these deposits are payable on demand.101.564 38.919 1.424.933.663 29.072.330 1.909 91.based on working prepared by the Asset and Liability Management Committee (ALCO) of the Bank 2011 Total Assets Cash and balances with treasury banks Balances with other banks Lendings to financial institutions Investments Advances Fixed assets Deferred Tax Assets Other assets Liabilities Bills payable Borrowings Deposits and other accounts Sub-ordinated loans Other liabilities ------------------------------------------------------------------------- Upto 1 Month 16.179.716.145.643.908 63.273.904.044.192 115.217 1.653 289.314.097 1.494 507.247 2.330.533 13. with the approval of ALCO.855 (27.006.777.983.415.256.108.396.442 29.1 Maturities of assets and liabilities .582 54.634 12. 11.797 39.819.258 (869.795 111.939 ANNUAL REPORT 2011 Net assets Share capital Reserves Unappropriated profit Surplus on revaluation of assets . these deposits have been classified based on management experience with such class of deposits.100.712 4.305.988.219 182.704.827 186.342.879 668.007 10.461 37.118 17.765.706.549.429.42.net of tax 25.620 208.479 6.235.269 37.822 35.309.170 81.497.856 97.225 Rupees in '000------------------------------------------------------------------------- 50.247.521.264 5.243 30.327.783 13.709.096.318.657.150.842 42.295 2.758 7.027.400.777.724) Over 5 to 10 Years 10.756 28.600 12.167 1.242.204) 8.101.825 13.943 1.512 13.796.129 421.870.151.134 19.003.214 36.254 23.537.343.841.277 12.307 32.822 61.237) 1.651 48.720.289 (66.187.764 Net assets Share capital Reserves Unappropriated profit Surplus on revaluation of assets .378 (21.707 22.683 421.210 3. However.531.018) 29.920.273 1.700.095. Therefore.552.841 16.095.533.519 4.669 152.439.134 51.720.729 13.854.038 13.866.462.822 114.665.946 1.441.533 3.472 9.503 32.499 24.019.309.323 59.114.931 11.408 Over 1 to 3 Months 449.966 95.069.115.477 16.740.556 113.456.247.026.332.427.430 207.412 8.229 5.451.777.741.449.701 547.478 4.448.484 9.731.544 13.555 14. 2010 Total ------------------------------------------------------------------------- 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 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 41.093.768 198.425.999 1.176 138.477.668 12.195) Over 3 to 6 Months 37.527 4.518 4.487 7.943 23.860 2.546 14.899.769.796 231.614.129.274 55.949.178.662 17.757 2.324.886 7.807.519 1.714.458.704.015.258.520 856.453 7.273.200.133 2.204.893.981.236 41.863 154.425.819 1.897.185 799.966 34.753.327 1.770.669 39.669 14.947 113.134 29.876 1.174.919 9.392 11.148.560.351 9.544 Current and saving deposits do not have any contractual maturity.673 416.118.802 5.619.692 5.470 20.248.216 389.937.936.575 1.038 Current and saving deposits do not have any contractual maturity.247.476 27.563 4.401 51.983.650.978 401.680 882.596.917.225 411.388.059 2.693 10.000 115.880 32.653 50.454 30.640.985 112.913.309.700.870.209.124 354.908 22.946 13.821.491.750.070 416.013.981 37.026.225 51.635 4.000 1.021 55.716.848 39.403.879 1.491.122) Over 3 to 5 Years 15.447 882.515.511.152 25.520 (5.692 75.882 1.555 12.746.197.832 650.026.307 107.839 4.259 311.650 33.239.151.468.

monitor. Product & Business Practice Damage to Physical Assets Business Disruption & System Failure Execution. an Operational Risk Function has been established within RMD. people and systems or from external events. Bank has duly launched Operational Loss Database and Key Risk Indicators (KRIs) systems which are web based and the same has been launched on a bank wide basis. structure and functions of Operational risk management and provide guidelines to identify. issued by SBP.1 Operational Risk Disclosures . processes. 2011 do not include the effect of this appropriation which will be accounted for in the financial statements for the year ending December 31." In compliance with the Risk Management guidelines. 43 NON-ADJUSTING EVENT AFTER THE YEAR END REPORTING DATE The Board of Directors in its meeting held on March 01. 42. control & report operational risk in a consistent & transparent manner across the Bank. assess.5. The Bank intends to move towards the „Alternative Standardised Approach‟ and for this purpose. All the business / support units are responsible for ensuring compliance with policies and procedures in their day-today activities and monitoring key operational risk exposures.42. 2012 has announced cash dividend of 17. in order to use it as an action plan in improving the operational risk & control system at the organisational and business / support unit levels. The financial statements for the year ended December 31. Almost all the policies and procedures of the Bank are reviewed from the risk perspective.RMD. - Internal Fraud External Fraud Employment Practice & Workplace Safety Client. This appropriation will be approved in the forthcoming Annual General Meeting. the Bank has categorised all its Operational loss/near miss incidents into following loss event categories. and the recommendations of RMD are taken into consideration before their approval at the appropriate level.5 percent (2010: Nil cash dividend). the mapping of business activities into Basel defined business lines has already been completed and request been sent to SBP for a parallel run. which directly reports to General Manager .5 Operational risk Basel II defines Operational risk as. As required by Basel II. Delivery & Process Management BAL‟s Information Security Policy and Business Continuity Plan (BCP) have been approved by the Board of Directors and is in the process of implementation. The Bank is using the „Basic Indicator Approach‟ for calculating the capital charge for Operational Risk. A dedicated IT Security Unit is functioning within Risk Management Division while responsibility for BCP implementation resides with Operations Group. 2012. ANNUAL REPORT 2011 90 . which covers the strategies.Basel II Specific Currently. “the risk of loss resulting from inadequate or failed internal processes. Operational Risk Function and business / support units are involved and regularly collaborate in determining and reviewing the strategy. However. The Operational risk management policy of the Bank is duly approved by the Board and Risk Management Manual includes Operational risk portion.

45 45.44 DATE OF AUTHORISATION These financial statements were authorised for issue on March 01. re-arranged or additionally incorporated in these financial statements. wherever necessary to facilitate comparison and to conform with changes in presentation in the current year.1 GENERAL Comparatives Comparative information has been re-classified. There were no significant reclassifications during the year. Chief Executive Officer Director Director Director ANNUAL REPORT 2011 91 . 2012 by the Board of Directors of the Bank.

809 2 Monis Mobile city Mohamamd Danish Ghazyani CNIC # 35201-1541591-1 Mohammad Farooq 8. No.000 OR ABOVE DURING THE YEAR ENDED DECEMBER 31.088 3 Habib Ullah Tariq HOUSE # 183.I Father’s / Husband’s Name 4 Iqbal Rehman Outstanding Liabilities at January 1. 1 1 Pamir Traders G t Road. No. STATE LIFE INSURANCE HOUSING SOCIETY.789 - 10. 2011 Principal 5 9.659 1.809 2. 2011 (Rupees in ‘000) Name and address of the borrower 2 Name of individuals / partners / directors (with N. Mingora STATEMENT SHOWING WRTTEN-OFF LOANS OR ANY OTHER FINANCIAL RELIEF OF RUPEES 500.508 Others 7 - Total (5+6+7) 8 11. BLOCK B.498 Principal written-off 9 Mark-up written-off 10 Mark-up 6 1.006 Other financial Total relief (9+10+11) provided 11 12 2.448 1.ANNUAL REPORT 2011 92 S. Lahore Habib ullah Tariq CNIC # 35201-6875421-1 Malik Inayat Ullah 521 214 - 735 521 214 - 735 .) 3 Arif Iqbal CNIC # 15602-0314451-3 ANNEXURE .I. PHASE I.C.299 1.789 - 3.

511 - 22.632 .189 4.Total 18.003 - 6.629 2.678 3.

385 1.086 495.666.550.365.044 10.243 3.195 1.809 22. 2010: 80 branches).500 Remuneration to Shariah Advisor / Board CHARITY FUND Opening balance Additions during the year Payments / Utilization during the year Closing balance 25.208.195 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 .335.883 60.000 10.324 1.563 6.557.376 3.500 1.231.017 87.857 757.135.863.300 43.000 12.390.842.ANNEXURE .488.780.891 4.822 742.808 50.net of tax 1.492.II ISLAMIC BANKING BUSINESS The bank is operating 85 Islamic banking branches as at December 31.111 65.393 25.376 3.813 3.997 25.159.634 5.231.059.319 1.152 1.550 6.050 2.935 1.086.262.800.817.293 6.817.858 5.367 80.466 2.678. 2011 2010 (Rupees in „000) ASSETS Cash and balances with treasury banks Balances with and due from financial institutions Lendings to financial institutions Investments net Advances net Fixed assets Other assets LIABILITIES Bills payable Borrowings Deposits and other accounts Sub-ordinated loans 11.800.111 ANNUAL REPORT 2011 93 .247.390 1.579 5.878 25.393.338 4.030.952 93.181 35.090 55.104.935 636.638.926.957.516 42.502 65. 2011 (December 31.807 4.233 47.194.385 6.

771 1.001 2.475.046 14. 2010: 80 branches).732 1.579 110.896.953 1.521 2.664 5.085 150 1.235 1.277.434.247.840 3.503 29.558 Depreciation on assets given on lease Net income / return earned after depreciation Provisions against loans and advances . commission and brokerage income Dividend income Income from dealing in foreign currencies Gain on sale of securities .net of tax Profit available for appropriation / unremitted profit ANNUAL REPORT 2011 94 .579 275 2.247.348 432.II ISLAMIC BANKING BUSINESS The bank is operating 85 Islamic banking branches as at December 31.417 573.ANNEXURE .157 2.326 33.541 3.807 Unrealised gain on revaluation of investments classified as held for trading Other income Total other income OTHER EXPENSES Administrative expenses Other charges Total other expenses PROFIT BEFORE TAXATION Unappropriated profit brought forward Transferred from surplus on revaluation of fixed assets .558 39.896.896.131 4.792.345 380.432.807 275 3.678.326.421.345.913 42.413 23.716.net 114.497 2.991 1.972.281 34.590 924.752.752 45.479 236.007.986 468.987 2.483 2.715 1.net Provision for diminution in value of investments net Bad debts written off directly Net income / return earned after provisions OTHER INCOME Fee.062.177 2.917 1. 2011 (December 31.762 969.404. 2011 2010 (Rupees in „000) Income / return earned Income / return expensed Net income / return before depreciation on asset given on lease 8.430.417 42.945 1.892 4.

it is necessary that like other transactional matters. An amount totaling PKR 47. However this percentage needs to be improved further and management should make an aggressive plan to shift business from Insurance to Takaful gradually. During the year 2011. Bank Alfalah Islamic Banking is a Division of Bank Alfalah Limited. act and behave as if they are working in an Islamic Financial Institution. 2.e. During Year 2011. KHALIL AHMAD AAZAMI SHARIAH ADVISOR BANK ALFALAH LIMITED .46 was transferred to the Charity Account due to delayed payments by the Bank's customers. Multan and Karachi. Particularly it should be ensured that new hired staff should first be sent to introductory courses in Islamic Banking before inducting them to their functions. rendering Bank Alfalah Ltd . In my opinion following are some areas which require further improvements: 1. 2012 / Rabi-UL-Awwal 29. however due to continuous increase in number of branches and employees the focus on training and development needs to be further enhanced in the coming years.Islamic Banking Group's remaining income to be pure and Halal. their employment contracts and retirement benefits should also be reviewed and brought in line with the Shariah rulings available in the matter.48 was refunded to Customers in instances where Bank was deemed ineligible to retain the profit. Bank should focus on launching new deposit schemes that could give higher returns and added benefits to lower income segments. as a whole. around 33% of the total Consumer Assets were insured through Takaful (Shariah Compliant Alternate of Conventional Insurance). various seminars on Islamic Banking for awareness of Customers (Corporate.780.H. 4. In my opinion the activities and transactions performed by Bank Alfalah Islamic Banking Group during the year 2011.264. Faisalabad. Bahawalur. to enable me to express an opinion as to whether or not the bank complied with Islamic Shari'ah Guidance as well as with the religious opinions and specific resolutions and guidelines which were issued by me. an amount of PKR 286. May Allah bless us with His Guidance and make us successful here and in the hereafter and forgive our mistakes.667.414.178. SME and Consumer) were conducted at different cities of all Regions i. In addition. Likewise. In all seminars Shariah Advisor himself presented introduction of Islamic Banking and chaired the question and answer sessions.998. but the employees working in this segment feel. All reports related to the audit of the Islamic Banking Group were presented before Shariah Advisor for his comments and later on Audit Department ensured strict compliance of Shariah Advisor's decisions noted therein. Gujranwala. income of PKR 5. As a result of examination conducted by me. 1433 A.BANK ALFALAH LIMITED SHARIAH ADVISOR'S REPORT FOR THE YEAR ENDED DECEMBER 31. 2011 I have reviewed the principles and procedures practiced by Bank Alfalah Islamic Banking Group and agreements related to transactions entered into during the year ended 31 December 2011. Health and Welfare. Product Development and Shariah Compliance Department at Bank Alfalah performed its duties and responsibilities dedicatedly throughout the year. The Department of Internal Shariah Audit was established in Bank Alfalah in year 2011 which conducted audit of 65 out of 80 branches of Bank Alfalah's Islamic Banking Group. Lahore. The allocation of Profit and charging of Losses to remunerative accounts are in conformity with the basis that has been approved by Shariah Advisor in accordance with Shariah rules and principles. DR.14 has been transferred to the Charity Account. Although Bank Alfalah Islamic Banking provided opportunity of internal training to 447 staff members and 34 officers completed Islamic banking certificate course from NIBAF. Although. Wassalam Alaikum Wa Rahamat Allah Wa Barakatuh. ANNUAL REPORT 2011 95 . Therefore.81 was disbursed from the Charity Account to various charitable institutions across all 4 provinces of the country in the spheres of Education. I have performed the necessary review with the assistance of Product Development and Shariah Compliance [PDSC] Department. 3.ISLAMIC BANKING GROUP February 22. Around 30 Transactional Process Flows for Corporate Customers were presented to Shariah Advisor for their approval. During the year an amount of PKR 58. are in compliance with the principles and guidelines of Shariah and other guidelines issued by its Shariah Advisor and State Bank of Pakistan. Sangala Hill.300. Process Flow and Checklist for Corporate Machinery on Ijarah Product were also finalized.

CONSOLIDATED FINANCIAL STATEMENTS

OF
BANK ALFALAH LIMITED AND SUBSIDIARY COMPANY

AUDITORS' REPORT TO THE MEMBERS

We have audited the annexed consolidated financial statements comprising consolidated statement of financial position of Bank Alfalah Limited (the Holding Company) and its subsidiary company, Alfalah Securities (Private) Limited as at December 31, 2011 and the related consolidated profit and loss account, 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'), for the year then ended. These consolidated financial statements include unaudited certified returns from the branches of the Holding Company, except for thirty five branches, which have been audited by us and seven branches and one offshore banking unit audited by auditors abroad. We have also expressed a separate opinion on the separate financial statements of Bank Alfalah Limited. 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, is based solely on the report of such auditors. These consolidated financial statements are the responsibility of the Holding Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit.

We conducted our audit in accordance with the auditing standards as applicable in Pakistan. 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. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting policies and significant estimates made by the management, as well as, evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the consolidated financial statements present fairly the financial position of Bank Alfalah Limited and its subsidiary company as at December 31, 2011 and the results of their operations, their comprehensive income, their cash flows and changes in equity for the year then ended in accordance with the approved accounting standards as applicable in Pakistan.

A. F. Ferguson & Co. Chartered Accountants Engagement Partner: Salman Hussain Dated: March 06, 2012 Karachi

ANNUAL REPORT 2011 98

BANK ALFALAH LIMITED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT DECEMBER 31, 2011
Note 2011 2010 (Rupees in „000)

ASSETS Cash and balances with treasury banks Balances with other banks Lendings to financial institutions Investments - net Advances - net Fixed assets Deferred tax assets Other assets
6 7 8 9 10 11 12 13

50,882,662 17,424,524 7,765,407 166,648,636 198,468,512 13,427,693 421,742 13,306,612 468,345,788

41,197,841 16,180,533 6,497,556 113,622,561 207,152,054 14,251,595 12,901,742 411,803,882

LIABILITIES Bills payable Borrowings Deposits and other accounts Sub-ordinated loans Liabilities against assets subject to finance lease Deferred tax liabilities Other liabilities
14 15 16 17

18
12 19

5,403,453 18,168,978 401,245,675 7,148,693 1,328 10,474,397 442,442,524 25,903,264

4,521,533 13,700,124 354,010,690 7,567,192 5,910 993,325 9,357,097 390,155,871 21,648,011

NET ASSETS REPRESENTED BY Share capital Reserves Share in share premium of associate Accumulated profit / (losses) Non-controlling interest in equity Surplus on revaluation of assets - net of tax 21
20

13,491,563 4,100,264 5,534,195 23,126,022 (11,066) 23,114,956 2,788,308 25,903,264

13,491,563 3,819,133 1,968,435 (72,693) 19,206,438 (27,570) 19,178,868 2,469,143 21,648,011

CONTINGENCIES AND COMMITMENTS

22

The annexed notes 1 to 46 and Annexures I and II form an integral part of these consolidated financial statements.

Chief Executive Officer

Director

Director

Director

ANNUAL REPORT 2011 99

net Provision for diminution in the value of investments Bad debts written off directly Net mark-up / interest income after provisions Non mark-up / interest income Fee.897 25.710.983 0.373 28.110 845.265.3 29 30 4.553 (27.166.053) 1.22 27 28 19.20 10.658.328.993 199.194.263 4.383.820 2.926 1.847 4.610 2.net Unrealised (loss) / gain on revaluation of investments classified as held for trading .127 1.316 (1.2 13.527 171.478.BANK ALFALAH LIMITED CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED DECEMBER 31.932) 2.727 (11.619.916 76.903.880.827) 4.780.932 1.166.169 3.578 13.346) (831. 2011 Note 2011 2010 (Rupees in „000) Mark-up / return / interest earned Mark-up / return / interest expensed Net mark-up / interest income Provision against loans and advances .696 4.530.854.151 3.265.285 5.170.700 12.036. commission and brokerage income Dividend income Income from dealing in foreign currencies (Loss) / Gain on deemed disposal of associate Gain on sale of securities .361 156.544 209.042 (1.361 184.167.983 26 9.526 67.6 44.Current .291.688.056 94.Deferred .223 19.470.300 1.730 5.398 23.89 31 3.835.332.658 3.175 14.726 16.931 14.333.115.665 12.266.net Other income Total non mark-up / interest income Non mark-up / interest expenses Administrative expenses Provision against off-balance sheet obligations Provision against other assets Other charges Total non mark-up / interest expenses Share of profit / (loss) of associates Extra ordinary / unusual items Profit before taxation Taxation .888 (Rupees) 1.846 11.187.325.570) 1.354.021 6.815 25.166.21 The annexed notes 1 to 46 and Annexures I and II form an integral part of these consolidated financial statements.065.5 9.974 2.735) 898.287 18.071) 149.133.325.155 276.840 1.Prior years Share in tax of associates Profit after taxation Profit / loss attributable to: Equity holders of the parent Non-controlling interest Basic / diluted earnings per share attributable to the equity holders of the parent 24 25 10.378.504 2.417 (34.715 (7.778 5. Chief Executive Officer Director Director Director ANNUAL REPORT 2011 100 .916 5.303.411.263.435 2.658 13.888 37.057.749 1.056) (152.675.639) 1.214.500 149.763 (71.

827) 4. Chief Executive Officer Director Director Director ANNUAL REPORT 2011 101 .255.325.253 (518.107) 686.860 4.BANK ALFALAH LIMITED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED DECEMBER 31.transferred to statement of changes in equity Components of comprehensive income not reflected in equity Surplus / (Deficit) on revaluation of available for sale securities .net of tax Total comprehensive income Total comprehensive income attributable to: Equity holders of the parent Non-controlling interest 4.166.255.263.906.253 713.983 (419.080 (7.570) 686.495) 3.204.474 1.350 The annexed notes 1 to 46 and Annexures I and II form an integral part of these consolidated financial statements.920 (27.350 4.888 1. 2011 2011 2010 (Rupees in „000) Profit after taxation Other comprehensive income Exchange differences on translation of net investment in foreign branches Comprehensive income .457 348.393 37.

204.5 9.associated companies Dividend income received .631.214.735) 881.897 100.966) 32.470.526) 94.782 174.277 69.729 183.847 47.985 521.246) 230.918.707.762) (419.20 19.000 37.920 4.536.513.119.599 2.379 4.202) 145.6 27 28 5.502) (1.400) (10.635) 755.383.815 6.778) (156.932 (149.101 18.616.22 10.749 1.352) (9.992) 816.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 Redemption of sub-ordinated loans Dividend paid Payment against lease obligation Net cash used in financing activities Exchange difference on translation of the net investments in foreign branches Increase in cash and cash equivalents Cash and cash equivalents at the beginning of the year Cash and cash equivalents at the end of the year 32 28 28 10.151.093 (230.953.518.net Provision for diminution in value of investments Provision against off-balance sheet obligations (Loss) / gain on deemed disposal of associate Provision against other assets Unrealised loss / (gain) on revaluation of investments classified as held for trading .047) 18.730 34.884 (1.817 210.929 61.534 37.080) 6.489.152.182.447 1.151 (28.592.079.110 1.825.926) 5.505 55.080.234.715.323 (4.007 (11.168) 53.088.775.379) (469.267.710.786 (44.328.916 (3.448) (1.504 (25.753 53.499) (4.593) 1.876 11.423 (57.277 The annexed notes 1 to 46 and Annexures I and II form an integral part of these consolidated financial statements.348 62.582) (423.927.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 Redemption in associated companies Dividend income received .019.370.056 (209.495) 7.989) (1.407.097 (866.325) (6.696 (20.236 9.065.559) 12.387.590) (418.918.792) 22.276 (16.207.079.716.100.502 6.797) 29.net Bad debts written-off directly Gain on sale of fixed assets .435) (21.266.532 (16.394.BANK ALFALAH LIMITED CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED DECEMBER 31.441.474 662.152.101.386 (778.197.3 9.053 5.702 (145.840) 3.257 62.527 171. 2011 Note 2011 2010 (Rupees in „000) CASH FLOWS FROM OPERATING ACTIVITIES Profit before taxation Share of (profit) / loss of associates Less: Dividend income Adjustments Depreciation Amortisation Provision against loans and advances .301 (740.071 184.2 13.059) (2.586 34.993 11.202 1.300) 25.533.389 (6. Chief Executive Officer Director Director Director ANNUAL REPORT 2011 102 .225.034 7.659 (1.703) 47.628 154.833 2.081) 2.032 173.

net of tax Loss attributable to minority shareholders Transfer to statutory reserve Final cash dividend for the year ended December 31. 2009 @ 8% Balance at December 31.671.495) 4.079 - - 37.961.527 (23.001 (1. 2010 Share in share premium of associate Transfer from surplus on revaluation of fixed assets .178. 2010 Changes in equity for 2010 Comprehensive income for the year ended December 31.491.442 820.827) - .695 - - - 1.079.906.827 (7.393 - - - 29.079.563 2.457 352.204.BANK ALFALAH LIMITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED DECEMBER 31.888 - 3.695 - 29.166.693) (27.968.net of tax Transfer from share in share premium of associate to unappropriated profit Non controlling interest acquired during the year Loss attributable to minority shareholders 13.868 - - (419.767. 2010 Changes in equity for 2011 Comprehensive income for the year ended December 31. 2011 Transfer from surplus on revaluation of fixed assets .325) 19.331 - - - - 7.962 - - - 29.926) - 18.695 - 29.491.983 - - 1.563 2.132 858.325.570) - 13.690) (27.690 - 27.325) (72.474 - 1.695 - 193.435 (24. 2011 Attributable to the equity holders of the Parent S h a r e i n s h a r None p r e m i u m Share Statutory Exchange Unappro- o capital reserve* translation priated profit controlling f a s s o c i a t e Total reserve -------------------------------------------------------------------------- interest (Rupees in ' 000) Balance at January 1.570 (193.570) (1.331) 24.

Transfer to statutory reserve Balance at December 31, 2011

13,491,563

700,626 3,661,758

438,506

(700,626) 5,534,195

(11,066)

23,114,956

* This represents reserve created under section 21(i)(a) of the Banking Companies Ordinance, 1962. The annexed notes 1 to 46 and Annexures I and II form an integral part of these consolidated financial statements.

Chief Executive Officer

Director

Director

Director

ANNUAL REPORT 2011 103

BANK ALFALAH LIMITED
NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED DECEMBER 31, 2011
1 STATUS AND NATURE OF BUSINESS

1.1 The "Group" consists of: Holding Company Bank Alfalah Limited (the Bank)

Bank Alfalah Limited (the Bank) is a banking company incorporated in Pakistan on June 21, 1992 as a public limited company under the Companies Ordinance, 1984. It commenced its banking operations on November 1, 1992. The Bank's registered office is at B. A. Building, I. I. Chundrigar Road, Karachi and is listed on the Karachi, Lahore and Islamabad Stock Exchanges. The Bank is engaged in banking services as described in the Banking Companies Ordinance, 1962 and is operating through 313 conventional banking branches including 19 sub branches (2010: 298 branches including 18 sub branches), 7 overseas branches (2010: 7 branches), 85 Islamic banking branches (2010: 80 branches) and 1 offshore banking unit (2010: 1 unit).

Subsidiary Company - Alfalah Securities (Private) Limited - 97.18 percent holding
The group has invested in 97.18 percent (2010: 76 percent) shares of Alfalah Securities (Private) Limited. The principal objective of the company is to undertake the business of a brokerage house. Alfalah Securities (Private) Limited was incorporated on September 23, 2003 with registered office in Karachi, Pakistan. The company obtained corporate membership from Karachi Stock Exchange (Guarantee) Limited on November 24, 2003.

1.2 In addition the Group maintains investments in the following associates:
2011 2010 Percentage of shareholding

Alfalah Insurance Company Limited Alfalah GHP Value Fund - Fund managed by Alfalah GHP Investment Management Limited Alfalah GHP Income Multiplier Fund - Fund managed by Alfalah GHP Investment Management Limited Alfalah GHP Islamic Fund - Fund managed by Alfalah GHP Investment Management Limited Alfalah GHP Investment Management Limited 2 BASIS OF PRESENTATION

30 percent

30 percent

34.19 percent 33.18 percent 98.53 percent 96.38 percent 96.72 percent 96.11 percent 40.22 percent 40.22 percent

2.1 In accordance with the directives of the Federal Government regarding the shifting of the banking system to Islamic modes, the State Bank of Pakistan has issued various circulars from time to time. Permissible 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. The purchases and sales arising under these arrangements are not reflected in these consolidated financial statements as such, but are restricted to the amount of facility actually utilised and the appropriate portion of mark-up thereon.

The financial results of the Islamic banking branches have been consolidated in these financial statements for reporting purposes, after eliminating material inter branch transactions / balances. Key financial figures of the Islamic Banking branches are disclosed in Annexure II to these consolidated financial statements.

2.2 Basis of consolidation The consolidated financial statements include the financial statements of Bank Alfalah Limited Holding Company and its subsidiary company - "the Group".
Subsidiary company is 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.

-

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.

ANNUAL REPORT 2011 104

-

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.
Material intra-group balances and transactions have been eliminated. Accounting policies of the Subsidiary have been changed, where necessary, in the preparation of the consolidated financial statements.

3
3.1

STATEMENT OF COMPLIANCE
These consolidated financial statements have been prepared in accordance with the approved accounting standards as applicable in Pakistan. Approved accounting standards comprise of such International Financial Reporting Standards (IFRSs) issued by the International Accounting Standards Board and Islamic Financial Accounting Standards (IFASs) issued by the Institute of Chartered Accountants of Pakistan as are notified under the Companies Ordinance, 1984, the provisions of and directives issued under the Companies Ordinance, 1984, Banking Companies Ordinance, 1962 and the directives issued by the Securities and Exchange

Commission of Pakistan (SECP) and the State Bank of Pakistan (SBP). In case the requirements differ, the provisions of and directives issued under the Companies Ordinance, 1984, Banking Companies Ordinance, 1962 and the directives issued by SECP and SBP prevail.
3.2 The State Bank of Pakistan has deferred the applicability of International Accounting Standard (IAS) 39, 'Financial Instruments: Recognition and Measurement' and International Accounting Standard (IAS) 40, 'Investment Property' for banking companies through BSD Circular Letter No. 10 dated August 26, 2002 till further instructions. Further, the Securities and Exchange Commission of Pakistan has deferred the applicability of International Financial Reporting Standard (IFRS) 7, 'Financial Instruments: Disclosures' through its notification S.R.O 411(I)/2008 dated April 28, 2008. Accordingly, the requirements of these standards have not been considered in the preparation of these consolidated financial statements. However, investments have been classified and valued in accordance with the requirements prescribed by the State Bank of Pakistan through various circulars. 3.3 The State Bank of Pakistan vide its BSD Circular No. 7 dated April 20, 2010 has clarified that for the purpose of preparation of financial statements in accordance with International Accounting Standard - 1 (Revised) 'Presentation of Financial Statements', two statement approach shall be adopted i.e. separate 'Profit and Loss Account' and 'Statement of Comprehensive Income' shall be presented, and Balance Sheet shall be renamed as 'Statement of Financial Position'. Furthermore, the Surplus / (Deficit) on revaluation of available for sale securities (AFS) only, may be included in the 'Statement of Comprehensive Income'. However, the same shall continue to be shown separately in the Statement of Financial Position below equity. Accordingly, the above requirements have been adopted in the preparation of these consolidated financial statements. 3.4 IFRS 8 'Operating Segments' is effective for the Bank's accounting period beginning on or after January 1, 2009. All banking companies in Pakistan are required to prepare their annual financial statements in line with the format prescribed under BSD Circular No. 4 dated February 17, 2006, 'Revised Forms of Annual Financial Statements', effective from the accounting year ended

December 31, 2006. The management of the bank believes that as the SBP has defined the segment categorisation in the above mentioned circular, the SBP requirements prevail over the requirements specified in IFRS 8. Accordingly, segment information disclosed in these consolidated financial statements is based on the requirements laid down by SBP.

3.5

In addition, the Securities and Exchange Commission of Pakistan (SECP) has notified the Islamic Financial Accounting Standard (IFAS) 1 - Murabaha issued by the Institute of Chartered Accountants of Pakistan. IFAS 1 was effective for financial periods beginning on or after January 1, 2006. The standard has not been adopted by Islamic branches of conventional banks pending resolution of certain issues e.g; invoicing of goods, recording of inventories, concurrent application with other approved accounting standards in place for conventional banks, etc. Pakistan Banks Association and Modaraba Association of Pakistan have taken up the issue with the SBP and SECP.

3.6 New and amended standards and interpretations that are effective in the current year: The following new and amended standards and interpretations have been published and are mandatory for the Group's accounting period beginning January 1, 2011:
(a) IAS 1, 'Presentation of financial statements' (effective January 1, 2011). The amendment clarifies that an entity will present an analysis of other comprehensive income for each component of equity, either in the statement of changes in equity or in the notes to the financial statements. The Group has adopted the above amendment with effect from January 1, 2011. The Group's current policy and disclosures are in line with the requirements prescribed by SBP as described in note 3.3 and accordingly, the above amendment does not have any impact on the Group's consolidated financial statements.

ANNUAL REPORT 2011 105

(b)

IAS 24 (revised), 'Related party disclosures' issued in November 2009. It supersedes IAS 24, 'Related party disclosures', issued in

2003. 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. The revised standard does not have any effect on the Group's consolidated financial statements. (c) IFRIC 14 (amendments), „Prepayments of a minimum funding requirement‟. The amendments correct an unintended consequence of IFRIC 14, „IAS 19 – The limit on a defined benefit asset, minimum funding requirements and their interaction‟. Without the amendments, entities are not permitted to recognise as an asset some voluntary prepayments for minimum funding contributions. This was not intended when IFRIC 14 was issued, and the amendments correct this. The amendments are effective for annual periods beginning January 1, 2011. The amendment does not have any significant impact on the Group's consolidated financial statements.

There are other new and amended standards and interpretations that are mandatory for the Group's accounting periods beginning on or after January 1, 2011 but are considered not to be relevant or to have any significant effect on the Group's operations and are, therefore, not disclosed in these consolidated financial statements. 3.7 New and amended standards and interpretations issued but not yet effective and not early adopted:
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, 2012 and have not been early adopted by the Group.

(a)

IAS 1, 'Presentation of financial statements' (effective July 1, 2012). The main change resulting from these amendments is a requirement for entities to group items presented in „other comprehensive income‟ (OCI) on the basis of whether they are potentially reclassifiable to profit or loss subsequently (reclassification adjustments). The amendments do not address which items are presented in OCI. Because of the reasons described in note 3.3 above, this amendment will not have any impact on the Group's consolidated financial statements.
IAS 12, „Income taxes‟ (effective January 1, 2012), currently requires an entity to measure the deferred tax relating to an asset depending on whether the entity expects to recover the carrying amount of the asset through use or sale. It can be difficult and subjective to assess whether recovery will be through use or through sale when the asset is measured using the fair value model in IAS 40, „Investment property‟. This amendment therefore introduces an exception to the existing principle for the measurement of deferred tax assets or liabilities arising on investment property measured at fair value. As a result of the amendments, SIC 21, „Income taxes - recovery of revalued non-depreciable assets‟, will no longer apply to investment properties carried at fair value.

(b)

The amendments also incorporate into IAS 12 the remaining guidance previously contained in SIC 21, which is withdrawn. Since IAS 40 has been deferred as mentioned note 3.2, therefore, the amendment will not have any impact on the Group's consolidated financial statements.
(c) IAS 19, „Employee benefits‟ was amended in June 2011 applicable for periods begining on or after January 1, 2013. The impact on the Group will be as follows: to eliminate the corridor approach and recognise all actuarial gains and losses in other comprehensive income as they occur; to immediately recognise all past service costs; and to replace interest cost and expected return on plan assets with a net interest amount that is calculated by applying the discount rate to the net defined benefit liability / asset. The management is yet to assess the full impact of the amendments. There are other new and amended standards and interpretations that are mandatory for the Group's accounting periods beginning on or after January 1, 2012 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.

3.8 Early adoption of standards The Group did not early adopt any new or amended standards in 2011. 4 BASIS OF MEASUREMENT

4.1 Accounting convention
These consolidated financial statements have been prepared under the historical cost convention except that certain fixed assets are stated at revalued amounts, and held for trading and available for sale investments and derivative financial instruments are measured at fair value.

The consolidated financial statements are presented in Pakistani Rupees, which is the Group's functional and presentation currency. The amounts are rounded off to the nearest thousand.

ANNUAL REPORT 2011 106

interest rate movements. 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.3 and 9) classification and provisioning against advances (notes 5. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period. 5.4 and 10) income taxes (notes 5. which are either acquired for generating a profit from short-term fluctuations in market prices. 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. 5.2 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. dealers margin or are securities included in a portfolio in which a pattern of short-term profit taking exists. or in the period of revision and future periods if the revision affects both current and future periods.5 and 11). estimates and assumptions that affect the reported amounts of assets and liabilities and income and expenses.10 and 35) depreciation / amortisation of operating fixed assets (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. ANNUAL REPORT 2011 107 . It also requires management to exercise judgement in application of its accounting policies. any overdrawn nostro accounts and call lendings having maturity of three months or less.1 Cash and cash equivalents Cash and cash equivalents comprise of cash in hand.1Classification The Group classifies its investments as follows: Held for trading These are investments. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances. balances with treasury banks. national prize bonds. balances with other banks in current and deposit accounts. These have been consistently applied to all years presented. These estimates and assumptions are reviewed on an ongoing basis.9 and 30) accounting for defined benefit plan (notes 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. 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. 5. 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) v) 5 classification and provisioning against investments (notes 5. unless otherwise specified.3 Investments 5. 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.3.4.

which is the date at which the Group commits to purchase or sell the investments. Investments classified as 'held for trading' are initially recognised at fair value and transaction costs are expensed in the profit and loss account.3. A significant or prolonged decline in fair value of an equity investment below its cost is also considered an objective evidence of impairment. For investments classified as held to maturity.Available for sale These are investments. A receivable is recognised on commencement of lease term at an amount equal to the present value of the minimum lease payments. 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. ANNUAL REPORT 2011 108 . 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. 5.4Initial recognition and measurement Investments other than those categorised as 'held for trading' are initially recognised at fair value which includes transaction costs associated with the investment. 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. Associates Associates are all entities over which the Group has a significant influence but not control. Advances are written off when there are no realistic prospects of recovery. Net investment in finance lease Leases where the Bank transfers substantially all the risks and rewards incidental to the ownership of an asset are classified as finance leases. 5. 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. other than those in associates which do not fall under the 'held for trading' and 'held to maturity' categories. Investments classified as 'held to maturity' are carried at amortised cost in accordance with the requirements specified by the State Bank of Pakistan. including guaranteed residual value.5Subsequent measurement In accordance with the requirements of State Bank of Pakistan. 5. Investments in associates where the Group has significant influence are accounted for using the equity method of accounting. Surplus / (deficit) arising on revaluation of securities classified as 'available for sale' is included in the statement of comprehensive income but is taken to a separate account shown in the statement of financial position below equity. The Group applies the equity accounting method for its investment in the mutual funds managed by Alfalah GHP Investment Management Limited. 5. Unearned finance income is recognised over the term of the lease.4 Advances Loans and advances Loans and advances including net investment in finance lease are stated net of provisions against non-performing advances. Gains or losses on disposals of investments during the year are taken to the profit and loss account. Impairment 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.3. Increase / decrease in share of profits and losses of associates is accounted for in the consolidated profit and loss account. Under the equity method of accounting. In case of impairment of available for sale securities. the cumulative loss that has been recognised directly in surplus / (deficit) on revaluation of securities on the statement of financial position below equity is removed therefrom and recognised in the profit and loss account. Unquoted equity securities are valued at lower of cost and the break-up value.3Regular way contracts All purchases and sales of investments that require delivery within the time frame established by regulation or market convention are recognised at trade date. so as to produce a constant periodic return on the outstanding net investment in lease. Provisions pertaining to overseas advances are made in accordance with the requirements of regulatory authorities of the respective countries. 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 impairment loss is recognised in the profit and loss account. if any.3. The net provision made / reversed during the year is charged to profit and loss account and accumulated provision is netted-off against advances.

Such intangible assets are amortised using the straight-line method over their estimated useful lives. depreciation is charged over the economic life of the asset using straight line basis. 5. 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.6 Capital work in progress Capital work-in-progress is stated at cost less accumulated impairment losses. Depreciation is charged to income by applying the straight-line method using the rates specified in note 11. 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. Historical cost includes expenditures that are directly attributable to the acquisition of the items. if any. 1984. less impairment loss. 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 any. if any. in the event the asset is expected to be available for re-ijarah. The surplus on revaluation of fixed assets to the extent of incremental depreciation charged on the related assets is transferred to unappropriated profit. The residual values. Intangible assets having an indefinite useful life are stated at acquisition cost. 5. The useful lives and amortisation method are reviewed and adjusted. Assets under Ijarah are depreciated over the period of lease term. if appropriate at each reporting date. if any. Maintenance and normal repairs are charged to income as and when incurred.5 Fixed assets Tangible assets Fixed assets except office premises are shown at historical cost less accumulated depreciation and accumulated impairment losses. Intangible assets Intangible assets having a finite useful life are stated at cost less accumulated amortisation and accumulated impairment losses.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. However. 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. 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. at each reporting date. 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. 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. 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. as appropriate. if any. useful lives and depreciation method are reviewed and adjusted. The depreciation charge for the year is calculated after taking into account residual value. These are transferred to specific assets as and when assets become available for use. 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. Office premises (which includes land and buildings) are stated at revalued amount less accumulated depreciation.2 to these consolidated financial statements. 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. 5. ANNUAL REPORT 2011 109 .Ijarah Assets leased out under 'Ijarah' are stated at cost less accumulated depreciation and accumulated impairment losses. if any.

b) Borrowing / deposit costs are recognised as an expense in the period in which these are incurred using effective mark-up / interest rate method to the extent that they are not directly attributable to the acquisition of or construction of qualifying assets. Deferred tax liability is not recognised in respect of taxable temporary differences associated with exchange translation reserves of foreign branches. The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amounts of assets and liabilities using the tax rates enacted at the reporting date. which is adjusted against related revaluation surplus to the extent that the impairment loss does not exceed the surplus on revaluation of that asset. 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. Deferred tax asset is reduced to the extent that it is no longer probable that the related tax benefits will be realised.5. Income tax expense is recognised in the profit and loss account except to the extent that it relates to items recognised directly in equity. 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. if any.11 Borrowings / deposits and their cost a) Borrowings / deposits are recorded at the proceeds received.9 Taxation Income tax expense comprises current and deferred tax. which is adjusted against the related surplus / deficit in accordance with the requirements of the International Accounting Standard 12 . which arises from assessments / developments made during the year. 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. 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. The charge for current tax also includes adjustments. Gratuity is payable to staff on completion of the prescribed qualifying period of service under the scheme. 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. in which case it is recognised in equity. The contributions are recognised as employee benefit expense when they are due. ANNUAL REPORT 2011 110 . 5. Borrowing costs that are directly attributable to the acquisition.Income Taxes. 5. Contributions to the fund are made on the basis of actuarial recommendations.33 percent of basic salary. The Group also recognises a deferred tax asset / liability on the deficit / surplus on revaluation of fixed assets and securities. If any such indication exists. 5. The Bank has no further payment obligations once the contributions have been paid.8 Impairment The carrying amount of assets is reviewed at each reporting date to determine whether there is any indication of impairment of any asset or group of assets.10 Employee benefits Defined benefit plan The Bank operates an approved funded gratuity scheme covering eligible employees whose period of employment with the Bank is five years or more. where considered necessary relating to prior years. Projected Unit Credit Method is used for the actuarial valuation. The resulting impairment loss is taken to the profit and loss account except for impairment loss on revalued assets. 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 recoverable amount of such assets is estimated and impairment losses are recognised immediately in the financial statements. 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.

front end fee and other lease income are recognised as income when they are realised. obligation as a result of past events. those premiums / discounts are amortised through the profit and loss account over the remaining maturity. documentation charges. legal or constructive. Charge to the profit and loss account is stated net-of expected recoveries. Commission on guarantees is recognised on time proportion basis. debt securities investments and profit on murabaha and musharika financing are recognised on a time proportion basis. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the profit and loss account. commission and brokerage Fee. 5. Forward contracts other than contracts with the State Bank of Pakistan relating to foreign currency deposits are valued at forward rates applicable to the respective maturities of the relevant foreign exchange contract. Transactions and balances Transactions in foreign currencies are translated into Pakistani rupees at the exchange rates prevailing on the transaction date. Unrealised lease income and mark-up / return on non-performing advances are suspended. Expected recoveries are recognised by debiting the customer‟s account. 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. Provisions are reviewed at each reporting date and are adjusted to reflect the current best estimate.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. Under this method. Other provisions are recognised when the Group has a present.15 Foreign currency translation Functional and presentation currency Items included in the consolidated financial statements are measured using the currency of the primary economic environment in which the Group operates. Income is recognised net of depreciation charged in the profit and loss account. in accordance with the requirements of the Prudential Regulations of the State Bank of Pakistan and recognised on receipt basis. The Group expects most acceptances to be simultaneously settled with the reimbursement from the customers. where necessary. Fee. using the effective yield method. Where debt securities are purchased at a premium or discount. Acceptances are accounted for as off balance sheet transactions and are disclosed as contingent liabilities and commitments. commission and brokerage income except income from guarantees are accounted for on receipt basis. Gains / losses on termination of leased contracts. Other income is recognised on accrual basis.5.14 Revenue recognition Advances and investments Mark-up income on loans and advances. 5. 5. ANNUAL REPORT 2011 111 . Dividend income is recognised at the time when the Group‟s right to receive the dividend has been estab lished.13 Acceptances Acceptances comprise undertakings by the Group to pay bills of exchange drawn on customers. Ijarah income is recognised on an accrual basis as and when the rental becomes due. 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. Lease financing / Ijarah Financing method is used in accounting for income from lease financing.

The results of foreign operations are translated at average rate of exchange for the year.Forward purchase contracts with the State Bank of Pakistan relating to foreign currency deposits are valued at the spot rate prevailing on the reporting date. Contingent liabilities / commitments for letters of credit and letters of guarantee denominated in foreign currencies are expressed in rupee terms at the exchange rates ruling on the reporting date. equity. trust and estates investment advice. Commitments Commitments for outstanding forward foreign exchange contracts are disclosed at contracted rates. private lending and deposits. banking service. The Group's primary format of reporting is based on business segments. foreign exchanges. 5. 5. Retail banking It includes retail lending and deposits. a) Business segments Trading and sales It includes fixed income. These are recognised in the profit and loss account on disposal. 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. banking services. commodities. brokerage debt and prime brokerage. or to realise the assets and to settle the liabilities simultaneously. ANNUAL REPORT 2011 112 . which is subject to risks and rewards that are different from those of other segments. own position securities. 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. The forward cover fee payable on such contracts is amortised over the term of the contracts.20 Segment reporting A segment is a distinguishable component of the Group that is engaged either in providing product or services (business segment). credit. All derivative financial instruments are carried as assets where fair value is positive and as liabilities where fair value is negative. lending and repos. are recognised in the Group's consolidated financial statements in the year in which these are approved.18 Dividend and appropriation to reserves Dividend and appropriation to reserves. funding. trust and estates. Foreign operations Assets and liabilities of foreign operations are translated into rupees at the exchange rate prevailing at the reporting date. Income and expense items of such assets and liabilities are also off-set and the net amount is reported in the consolidated financial statements. Any changes in the fair value of derivative financial instruments are taken to the profit and loss account. merchant / commercial / corporate cards and private labels and retail. 5. 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.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. or in providing products or services within a particular economic environment (geographical segment).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. except appropriations which are required under the law. 5. after the reporting date. 5.19 Earnings per share The Group presents basic and diluted earnings per share (EPS) for its shareholders. if any.

273 million) Foreign currencies With State Bank of Pakistan in Local currency current accounts Foreign currency current accounts Foreign currency deposit accounts 8.220 2. equity. research.3 Circular No. factoring.680. 9 dated December 3. 2008. trade finance. guarantees.227.2 6. IPO and secondary private placements.245. lending.1 6.827 27.590 1.803 15.277 5.889.697 25.4 4.4 Deposits with other central banks are maintained to meet their minimum cash reserves and capital requirements pertaining to the foreign branches of the Bank. 6. 6.134 2. corporate finance.469. underwriting.034 6. 2007.798 41. syndication. 14 dated June 21.322. Special cash reserve of 15% is required to be maintained with the State Bank of Pakistan on FE-25 deposits as specified in BSD 6.235 4.850.1 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. bills of exchange and deposits.549 6.619. The State Bank of Pakistan has not remunerated these deposit accounts during the year.285. leasing. 1956.2 As per BSD Circular No. export finance. 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. high yield). 18.4 6.509 With other central banks in Foreign currency current accounts Foreign currency deposit accounts With National Bank of Pakistan in Local currency current accounts National Prize Bonds 5. Corporate finance Corporate banking includes services provided in connection with mergers and acquisition. ANNUAL REPORT 2011 113 .326.3 18.628.775 50. Profit rates on these deposits are fixed by SBP on a monthly basis.167.Commercial banking Commercial banking includes project finance.435.649. securitisation.840 2. 65 million. 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). real estate. 2010: Rs.981.420 1. privatisation.451 4.248.294 6. debts (government.197.882.841 6.662 2.050 5. b) Geographical segments The Group operates in three geographical regions being: 6 Pakistan Asia Pacific (including South Asia) Middle East Note 2011 2010 CASH AND BALANCES WITH TREASURY BANKS (Rupees in „000) In hand Local currency (including in transit 2011: Rs.

928.354. These carry mark-up at rates ranging from 11.00% to 13.1 This represents funds deposited with various banks at a profit rate of 5.00% per annum (2010: 5.497.576 1.497.822 10.424.980 7.765.4 1.715. 8.75% per annum) with maturities upto March 2012 (2010: August 2011).721 360.556 These represent short-term lendings to financial institutions against investment securities.081.110.576 ANNUAL REPORT 2011 114 .715. The balance is current by nature and on increase in the balance above a specified amount.17% to 3.831 6.721 6.374 1. the Bank is entitled to earn interest from the correspondent banks at agreed upon rates.727 .727 .287.2 Particulars of lendings to financial institutions In local currency In foreign currencies 6.00% per annum).576 7. 8 LENDINGS TO FINANCIAL INSTITUTIONS Call money lendings Repurchase agreement lendings (Reverse Repo) 8.524 1.855 1.90% to 12.654.533 7.6.576 1.654.182 4.182 6.1.004.576 2.784 7.828.012.407 8.455 105.182 .556 8.3 1.669.1.715.023.004.374 6.831 7.3 This includes placements of funds generated through foreign currency deposits scheme (FE-25).110.588 3.182 Market Treasury Bills Pakistan Investment Bonds 6.005 16.1 These represent lendings to financial institutions at interest rates upto 20% per annum (2010: 20% per annum) with maturities upto May 2013 (2010: May 2013).110.608.2 This includes amount held in Automated Investment Plans.4 Securities held as collateral against lendings to financial institutions Held by Bank ------------------------------------ 2011 Further given as collateral Total Held by Bank 2010 Further given as collateral Total Rupees in '000 .08% per annum (2010: 0.455 360.3 7. 8.538 17.3 & 8.20% to 2.1 8.764 157.407 4.504. at interest rates ranging from 0.45% per annum (2010: 13.75% per annum) with maturities upto January 2012 (2010: January 2011).782.855 105.6.Note 2011 2010 (Rupees in „000) 7 BALANCES WITH OTHER BANKS In Pakistan On current accounts On deposit accounts Outside Pakistan On current accounts On deposit accounts 1.180.765. 7.2 7.1 7.110.354. 7.

980 19.3 9.064.381.744 5.746.941.124) (5.2.821 1.1 9.388.298 8.036 11.090 2.879 9.191) 113.809.593 917.678) 113.972 337.827.270 1.130 Investments at cost Less: Provision for diminution in the value of investments Investments (net of provisions) (Deficit) / Surplus on revaluation of held for trading securities .588.272 - 2.937 895.272 112.563 135.132 2.939 166.Unlisted Sukuk Bonds 6.060 1.299 24.972 337.816 3.165.4 9.769 278.237.213.453.2 9.561 166.22 (11.587 449.388 24.18.809.729 5.028 140.372 19.224 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 9.790.587 449.095 8.937 895.604.17.189.770 223.941.852 .128.161.619 628.937.613) (288.567 120.2 265.325 ANNUAL REPORT 2011 115 .794 152.648.879 69.327 6.793 129.836.000 39.5 116.262 140.673 845.995 (1.182 40.064.849.599 301.249.229.497 4.992 95.622.784.367 4.729 5.604.914.673 845.000 40.034.509.664 5.588.818.408.836.176 39.497 4.995 20.228.036 11.1.790.660.000 5.532.408.net Total investments 168.486.335 11.828 5.301 1.692.053) - (11.300 21.028 140.18.335 966.794 152.053) 3.793 1.809.Listed Fully paid up ordinary shares / units .095 8.570.852 40.258.659 112.772 856.367 38.955 966.277 5.823 67.182 1.285 321.272 114.920 420.609 2.256 161.563 1.000 40.636 111.379.787 2.473.800 1.774 5.18.480 395.746.155.034.228.2.000 39.836.2.955 Available for sale securities Market Treasury Bills Pakistan Investment Bonds Fully paid up ordinary shares / units .191) - (288.836.821 129.Unlisted Sukuk Bonds 58.704 355.1 9.Listed 11.827.770 223.740 17.882 2.217.370.549.563 1.285 321.165.920 420.787 162.509.744 5.416.176 39.473.772 856.1 9.NET 9.890 26.524.392 68.380.599 301.816 3.132 8.997 19.net Surplus / (Deficit) on revaluation of available for sale securities .980 19.567 120.946.593 917.300 - 3.609 1.983 3.18.262 140.740 123.Unlisted Term Finance Certificates Preference Shares .9 INVESTMENTS .069.613) 160.18.030 (313.348 129.867 12.563 135.992 95.299 24.983 3.226.379.327 4.213.704 355.090 40.2.258.775.18.249.367 4.679 Held to maturity securities Market Treasury Bills Pakistan Investment Bonds Term Finance Certificates Pakistan Dollar Bonds Pakistan Euro Bonds Credit Linked Note Overseas Bonds Preference Shares .348 .946.879 9.069.692.660.1 Investments by types Note Held by Bank 2011 Given as collateral Held by Bank Total 2010 Given as collateral Total --------------------------------------------Rupees in '000-------------------------------------------Held for trading securities Market Treasury Bills Pakistan Investment Bonds Fully paid up ordinary shares / units .532.554) (318.907.480 395.804.236 1.251 1.619 628.995 64.392 68.890 26.216 202.216 202.189.2.995 116.473.20 (1.323.224 4.18.

14 9.811.9 81.13 9. The rates of profit range from 8.18 & 9.Pakistan Euro Bond 9.932 19.349. 9.323.208.772 83.60% per annum (2010: 10.Pakistan Investment Bonds .250 3. Bonds. 9.130 (288.622.024.38% to 3.653 129.191) 3. The effective rates of profit on Market Treasury Bills range between 11.10% to 3.496.440 449.7 9.00% per annum (2010: 8.613) (11.00% to 14. 9.829 million) and BDT 66.5 9.60% per annum).218 Term Finance Certificates.Pakistan Dollar Bond .4 Market Treasury Bills are for periods ranging from six months to one year.5 Pakistan Investment Bonds (PIBs) are for periods of three.744 1.644.308.787 4.636 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.402.11 9.166.226.Un-listed TFCs .18.382 1.Un-listed companies .281 45.506 12.272 114.180. These bonds are due to mature by March 2012 (2010: December 2011) and March 2014 (2010: March 2014) respectively.12 2.761 27.00% to 12. These also include PIBs having face value of Rs.349.476.01% to 13.587 156.983 5. 1962.228. ten and fifteen years.937 895.980.2 (1. The rates of profit on Government of Afghanistan bond ranges from 2.16 9.820 917.33% per annum (2010: 12.031. ANNUAL REPORT 2011 116 .821 242.2 Investments by segments 2011 2010 (Rupees in „000) Federal Government Securities .net Surplus / (Deficit) on revaluation of available for sale securities .561 Investment in associates Total investments at cost Provision for diminution in value of investments (Deficit) / Surplus on revaluation of held for trading securities .539.879 856.8 9.300 (318.941.036 1.595.Credit Linked Note 9.081 420.10 9.00% per annum) with maturities from February 2012 to August 2021 (2010: December 2011 to July 2020).673 845.648.Unlisted 9.16% to 13.787 168.026 Fully Paid up Ordinary Shares / Preference Shares / Units / Certificates . 35 million) pledged with the National Bank of Pakistan as security to facilitate Telegraphic Transfer discounting facility.337 20.530.790.805. 35 million (2010: Rs.Listed companies / mutual funds .030 166.22 21.793 160.053) 278.384 1.Sukuk Bonds .700 million (2010: BDT 66.Listed TFCs .400 2.net Total investments 9.626 million (2010: AFN 1.128 40.549 1.48% per annum) while Government of Bangladesh bond carries profit at 10.849.720 1.6 9.6 These represent Overseas Government Bonds issued by the Government of Afghanistan and the Government of Bangladesh amounting to AFN 2.Overseas Bonds .643.1 9.700 million) respectively.Preference Shares .910.Sukuk Bonds .729 5.29% per annum (2010: 2.Overseas Government Bonds . Debentures.4 9.95% per annum) with maturities upto November 2012 (2010: December 2011).678) 113.15 9.3 9.20 9.Market Treasury Bills .367 24.488 395.614 4.272 1.17 1.953.958.046. Notes and Participation Term Certificates .064.Note 9.608 2. five.694.

784 25.014 15.355 9.28% per annum (2010: 12.000 3. 9.720 million) issued by the State Bank of Pakistan for a period of three years and SSGC sukuk of Rs.56% per annum).770 50.000 504. The rates of profit on these bonds ranges between 12.636 1.538 million) issued by the Water and Power Development Authority (WAPDA) for a period of ten years.059 23. 35.165 150.942 7.G Khan Cement Limited Fauji Cement Company Limited Fecto Cement Limited Lucky Cement Limited 2011 2010 (Rupees in „000) 101.919 29.000 972.342 49.411 181.413 100.64% per annum) respectively.000 297.7 This represents sukuk bonds of Rs.759 15.079 17.67% to 13.979 163.95 million) for a period of five years.679 million (2010: 5.556 500.125%) and are due for maturity in March 2016 (2010: March 2016).64% to 14.000 9.000 943.000 5.840 911 25.127.860 ANNUAL REPORT 2011 117 .504 104.876 million) issued by the Government of Pakistan.000 1.441 15.534 504.812% per annum) and are due for maturity in March 2016 (2010: March 2016).000 10.943 million (2010: Rs 1. 39. These bonds carry interest at 7.046 million (2010: Rs 18.1.345 1.000 1.951 175.539.257 68.639.527 41.000.846 47.979 1.387 26.000 400.673 60.325 51.125% per annum (2010: 8.894 50.000 400.000 150.000 381.734 140. between 11.369.000 600.10 Particulars of investments in listed companies / mutual funds include the following: The paid-up value of these shares / units / certificates is Rs 10 unless otherwise stated.659 150.654 15.000 150.059 2.055 7.630.000 600.9.000 55.951 110.957 million (2010: 9.000 30.000 30.882 50.791 5.000 50.000 972.000 million) issued by the Government of Pakistan.991 15.45% per annum (2010: 13.926 962. 2011 2010 (Number of shares / certificates / units) MUTUAL FUNDS Crosby Pheonix Fund (Rs 100 per unit) AMZ Plus Income Fund Dawood Money Market 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 United Islamic Income Fund OIL AND GAS Pakistan Oilfields Limited Pakistan Petroleum Limited Pakistan State Oil Company Limited CHEMICALS Dewan Salman Fiber Limited Engro Corporation Limited Fatima Fertilizer Company Limited Fauji Fertilizer Company Limited Lotte Pakistan PTA Limited FORESTRY AND PAPER Security Papers Limited INDUSTRIAL METALS AND MINING Crescent Steel & Allied Products Limited International Steels Limited CONSTRUCTION AND MATERIALS Al-Abbas Cement Company Limited Attock Cement Company Limited D.000.139 121.55% per annum (2010: 12.919 37.095.339.000 962. These bonds carry interest at 7.639 121.279 3. ijarah sukuk of Rs.8 This represents Pakistan Dollar Bonds of US Dollar 4.228.30% to 13.125% per annum (2010: 7.000 7. 9.252 2.551.542 127. 9.341 35.95 million (2010: Rs 85.500 50.9 This represents Pakistan Euro Bonds of US Dollar 9.12% to 13.728.000 30.14% per annum) and 13.290.135 60.733.685 16.887 1.448 41.014 284 4.500.901 8.

534 6. Habib Ahmed Break-up value per share: Rs.000 NIB Bank Limited 3.935 7.000 Nishat Power Limited 7.000 The Hub Power Company Limited 1.1) 1. 2010 (Audited) Al-Hamra Hills (Private) Limited Chief Executive: Mr.318.162 21.570 FIXED LINE TELECOMMUNICATION Pakistan Telecommunication Company Limited 1.670 13.980 66.525 2.000 70.000 70. 2010 (Audited) Society for Worldwide Interbank Financial Telecommunication Chief Executive: Mr.710 Hira Textile Mills Limited 30.977 - ELECTRICITY 2.000.718 6.000 7.000 Azgard Nine Limited 1.924 3. Zaeem Break-up value per share: Rs.126 Nishat (Chunian) Power Company Limited 75.000 852.977 345.000.026 22.000 National Bank of Pakistan 300.750.000 ANNUAL REPORT 2011 118 .667.710 4.096 4. Lazaro Campos Break-up value per share: Rs.697 2.925 14.608 2010 (Rupees 1. 2011 (Audited) 24 24 4.639 Kohinoor Energy Limited 76.000 Samba Bank Limited United Bank Limited 250.500.289.304 29. S.403.469 212.169 1.11 Investments in unlisted companies 2011 2010 (Number of shares) 5.675 25.531 572.000 1.888. 7.895 400.026 46.273.000 Nishat (Chunian) Mills Limited 1.619 460.603 918 10.000 239.640 NON-LIFE INSURANCE Adamjee Insurance Company Limited FINANCIAL SERVICES KASB Securities Limited Wateen Telecom Limited * Recategorised during the year from investment in associates (Refer note 9.639 523.000 4.182 Period of financial statements: December 31.494 75.155 2.000 Karachi Electric Supply Company Limited 1.228.640 PERSONAL GOODS 100.37 Period of financial statements: June 30.980 683 38.531 Pakistan Export Finance Guarantee Agency Limited Chief Executive: Mr.098 6.186.000 MCB Bank Limited 1.287 87.970.000 Kot Addu Power Company Limited 100.021 39.465.970.162.476.5 Period of financial statements: June 30.935 1.269 36.472 37.800.279 74.251 226.340.991 72.667.725 5.088 319 37.760 Southern Electric Power Company Limited BANKS Allied Bank Limited Bank Al Habib Limited 210.18.653 9.064 11.2011 2010 (Number of shares / certificates / units) 2011 in „000) 2. 323.921 2.096 7.916 24.924 *303.504 1.318.751 3.145 2.125. 0.000 ICB Islamic Bank Limited 454.929 64.725 572.403.M.

744 ANNUAL REPORT 2011 119 .790.000 5.59 Date of financial statements : December 31. Break-up value per share: Rs.000 109. 2010 Chief Executive : Mr.18. 100) United Hospitals Limited Redemption: Annual redemptions over 5 years ending in 2011 Break-up value per share: BDT.000.000 15.97 Date of financial statements : June 30.312 1.52 Period of financial statements: June 30.000.000 15. 100) First Dawood Investment Bank Limited Redemption: Preference dividend @ 4% on cumulative basis and redeemable at par after 5 years.2011 2010 (Number of shares) 2011 2010 (Rupees in „000) 5. Hamuyun Nabi Jan 10.000. 96.998 36.12 Date of financial statements: June 30.821 9.40 Date of financial statements: June 30. 2010 (Un-audited) Warid Telecom (Private) Limited * Recategorised during the year from investment in associates (Refer note 9.000 2.000 160.660.000 1.500. 2010 Chief Executive : Mr. 9.000 25.000 2.000.500.000 25.985 121.000 - 45.000.972 2. 2010 Chief Executive : Mr.000 STS Holdings Limited Redemption: Semi annual redemptions over 5 years ending in 2012 Break-up value per share: BDT.500.000 *2. Faridur Rehman Khan (Paid-up value of each shares is BDT.793 129. 10) BRAC Bank Limited Redemption: Annual redemptions over 5 years ending in 2012 Break-up value per share: BDT. 2011 (Audited) Chief Executive: Mr. Habib Ahmed Break-up value per share: Rs. Abdus Samad Khan Trust Investment Bank Limited Redemption: Any time after the issuance of preference shares Break-up value per share: Rs.983 242.12 Investments in preference shares .390 1. 2011 (Audited) Chief Executive: Mr. 1. 25. Syed Mahbubur Rahman (Paid-up value of each shares is BDT.042 - 375. Khondoker Monir Uddin (Paid-up value of each shares is BDT.000 3.Unlisted 2011 2010 (Number of shares) 1.000 1. 351.000 Al-Hamra Avenue (Private) Limited Chief Executive: Mr.000.42 Date of financial statements : December 31.1) 50. 4.000 50.500.

13 Particulars of Term Finance Certificates . 5. 2013 Rating: AAA (PACRA) Chief Executive: Mr.000 (2010: 10. Mohsin Ali Nathani Bank Al Habib Limited 9.442 2. 2013 Rating: AA.800 ANNUAL REPORT 2011 120 .00 percent per annum Redemption: The TFC is structured to redeem 0. 0. Mohammad Rafiquddin Mehkari Standard Chartered Bank (Pakistan) Limited . Habib Faysal Bank Limited 578 (2010: 578) certificates of Rs. February 1.086 46.000 each Mark up: Average Six month KIBOR (Ask Side) + 190 basis points (no floor no cap) Redemption: The TFC is structured to redeem 97. February 2013. October 31.e.000 (2010: 20.(PACRA) Chief Executive: Mr.420 99.e.25 percent respectively starting from the eighty-fourth month.163 31. Abbas D.9. Naved A Khan 1.000 each Mark up: Average Six Months KIBOR + 1.e. Rating: AA. The remaining principal is to be redeemed in semi annual installments during the tenor of the TFC.Quoted.350) certificates of Rs.000) certificates of Rs. 5.960 47.(3rd Issue) 10.50 percent and a cap of 10.92 percent of principal in four annual installments after a grace period of fifty-four months. 5.(PACRA) Chief Executive: Mr. Maturity: Seven years from the date of issue i.25 percent of principal semiannually in the first seventy-eight months and the remaining principal in three semi-annual installments of 33. Secured 2011 2010 (Rupees in „000) Askari Bank Limited (2nd Issue) 20. Redemption: A nominal amount i.638 34. Maturity: Eight years from the date of disbursement i. 5.760 99.16 percent of the issue amount will be re-paid equally in each of the redemption periods during the first four years.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 0.350 (2010: 9. Maturity: July 2012 Rating: AA (PACRA) Chief Executive: Mr.e.02 percent of principal semiannually in the first ninety months and remaining principal at maturity.000 each Mark up: Average Six Months KIBOR + 200 basis points prevailing one working day prior to the beginning of each semi annual period.000) certificates of Rs.50 percent per annum with a floor of 3. Maturity: Eight years from date of disbursement i.

May 31.91 percent in the 60th month and the remaining 49.353 38.000 each Mark up: Average Six months KIBOR + 1.000 each Mark up: Average Six months KIBOR + 2. Munaf Ibrahim Financial Receivables Securitization Company Limited 15. Humayun Murad Jahangir Siddiqui & Company Limited 10. 5. Redemption: The instrument is structured to redeem 0.697 55. 5.427 199. with a grace period of 1 year and 3 years for Class A TFCs and Class B TFCs respectively.000) certificates of Rs. Maturity: May 2012 Rating: AA (PACRA) Chief Executive: Mr.686 (2010: 7.08 percent of principal in the first 24 months in 4 equal semi-annual installments and the remaining 99.576 24. 2013 Rating: A+ (PACRA) Chief Executive: Mr.02 percent of principal semi-annually in the first 48 months and remaining amount in 6 semi-annual installments. Muhammad Suleman Kanjiani 39.000 (2010: 80.VIS) Chief Executive: Khalid A. 5.680 332.50% per annum with no floor and cap Redemption: The instrument is structured to redeem 0.000 each Mark up: Average Six months KIBOR + 2.000 (2010: 10.e.368 ANNUAL REPORT 2011 121 .000 (2010: 37.(JCR . Rashid Khan ORIX Leasing Pakistan Limited 37. 49.000) certificates of Rs.a.18 percent of principal in the first 54 months.000 each Mark up: Average Six Months KIBOR (Ask Side) + 285 basis points per annum Redemption: The instrument is structured to redeem 0.809 92. Maturity: May 2012 Rating: AA+ (PACRA) Chief Executive: Mr. Maturity: January 2014 Rating: A+ (PACRA) Chief Executive: Mr. Sherwani Pakistan Mobile Communication (Private) Limited 80.792) certificates of Rs. with a floor of 8 percent per annum and cap of 16 percent per annum.800 38. Maturity: Seven years from the date of issue i. Redemption: Principal redemption will be carried out in 12 and 8 equal semi-annual installments in arrears.22 percent of the principal would be redeemed during the last 36 months in six equal semi-annual installments.2011 2010 (Rupees in „000) Allied Bank Limited 7.920 30.686) certificates of Rs.792 (2010: 15.50% with a floor of 6 percent per annum and ceiling of 16 percent per annum.24 percent of principal in the first 72 months and the remaining principal in 4 equal semiannual installments of 24. 5.94 percent each of the issue amount respectively starting from the 78th month. Maturity: September 2014 Rating: AA.91 percent in the last six months. 5.000) certificates of Rs.955 49.000 each Mark up: Average Six months KIBOR + 1.00% p.90 percent per annum with no floor and cap Redemption: The instrument is structured to redeem 0.

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. Secured Agritech Limited (formerly Pak American Fertilizers Limited) 100.92 percent each. Mohammad Rafiquddin Mehkari 1.000 (2010: 20. 5.Unquoted. 2013 Rating: AA (PACRA) Chief Executive: Mr. September 28.000 (2010: 20. Maturity: July 2013 Chief Executive: Mr.820 74.586 499.000 each Mark up: Average Six Months KIBOR + 1. 2009 and remaining issue amount in four equal semi-annual installments of 24.000) certificates of Rs.308.000 (2010: 100.32 percent of total issue amount in the first ninety six months after issuance i. Maturity: August 2019 Rating: AA. 5. Fawad Ahmed Mukhtar Askari Bank Limited (3rd Issue) 90.000) certificates of Rs. 5.50 percent per annum Redemption: Principal redemption in six stepped-up semi-annual installments starting from the issue date.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 8.840 99.2011 2010 (Rupees in „000) Pak Arab Fertilizers Limited 20.000) certificates of Rs.640 449.382 1. the issuer may call the TFC in part or full on any profit payment date subject to thirty days prior notice.000 94.000 each Mark up: Average Six Months KIBOR (Ask Side) + 1.(PACRA) Chief Executive: Mr. Maturity: Five years from the issue date i.000 (2010: 90.14 Particulars of Term Finance Certificates . starting from the 102nd month after the issuance.000 each Mark up: Average Six Months KIBOR plus 2. 5.70 percent per annum Redemption: The instrument is structured to redeem 0.e.20 percent of principal in the first 60 months and remaining principal in two equal semi-annual installments of 49. Ahmed Jaudet Bilal Jahangir Siddiqui & Company Limited 20.e.600 ANNUAL REPORT 2011 122 . the issuer has a Call Option exercisable in full at any time after 1 year on a coupon date.880 499.932 449. February 28. Maturity: July 2017 Chief Executive: Mr. Munaf Ibrahim 99.024.000 9.000 each Mark up: Average Six Months KIBOR (Ask Side) + 1.000) certificates of Rs.90 percent each of the issue amount respectively from 60th month.

000) certificates of Rs.000 each Mark-up: Average Six Months KIBOR + 3. Maturity: September 2017 Chief Executive: Mr. 5.GEPCO) .000.1 20.920 30. Fazeel Asif 99.000) certificates of Rs.000.000.2011 2010 (Rupees in „000) Zulaikha Textile Mills Limited (Liability assumed from Khunja Textile Mills Limited) 300 (2010: 300) certificates of Rs. Chief Executive: Mr. Muhammad Ramzan First Dawood Investment Bank Limited 6.NTDC) .000 30. after completion of grace period.000 each Mark-up: Average Six Months KIBOR (Ask Side) + 0.494 30.000) certificates of Rs.000 29. Fazeel Asif Power Holding (Private) Limited (Liability assumed from National Transmission and Despatch Company .000.05 percent per annum Redemption: Eight equal semi-annual installments commencing after a grace period of one year.FESCO) .2 Nil (2010: 400) certificates of Rs.000 each Mark-up: Average Six Months KIBOR (Ask Side) + 1. 5.5.920 99.000 (2010: 6. Abdus Samad Khan Azgard Nine Limited .75 percent per annum Redemption: In 6 equal semi annual installments. Maturity: April 2014 Chief Executive: Mr.000 - 3.000 each Mark-up: Average Six months KIBOR (Ask Side) + 1. Shaikh Power Holding (Private) Limited (Liability assumed from Gujranwala Electric Power Company Limited .14.14.note 9.notes 9. Fazeel Asif Power Holding (Private) Limited (Liability assumed from Faisalabad Electric Supply Company Limited .note 9.14. 10. Chief Executive: Mr. First principal payment due at the end of 30th month from the first disbursement. 10.000 - 3.60 percent per annum Redemption: Bullet payment at maturity Maturity: September 2012 Chief Executive: Mr.00 percent per annum Redemption: 10 equal semi-annual installments commencing from the 24th months from first draw down. 100.00 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 8.000 each Mark up: Average Six Months KIBOR + 1. Ahmed H.000.2 Nil (2010: 400) certificates of Rs. Chief Executive: Mr.000 each Mark-up: Average Six Months KIBOR (Ask Side) + 0.000 (2010: 20.000 ANNUAL REPORT 2011 123 .000 4.14.2 Nil (2010: 800.notes 9.05 percent per annum Redemption: Eight equal semi-annual installments commencing after a grace period of one year.

2011 2010 (Rupees in „000) Power Holding (Private) Limited .14.000.000 (2009: 30. Naveed A. Fazeel Asif Faysal Bank Limited 30.349.000 each Mark up: Year 1 .2 Nil (2010: 1. 5. Chief Executive: Mr. Fazeel Asif Power Holding (Private) Limited .000) certificates of Rs.5 : 15% Year 6 .note 9. First principal payment due at the end of 30th month from the change over date (date of conversion of loan into term finance certificates).2 Nil (2010: 600.25% per annum Redemption: The instrument is structured to redeem 0. First principal payment due at the end of 30th month from the first disbursement. 5.000 each Mark up: Average Six Months KIBOR + 2.000 (2010: Nil) certificates of Rs.000 5.720 19.088.000 3.400 299.000 ANNUAL REPORT 2011 124 .14.note 9.00 percent per annum Redemption: In 6 equal semi annual installments.208. Khan Bank Al Habib Limited 60.5% Redemption: The instrument is structured to redeem 0. Chief Executive: Mr. Habib 1.940 150.02 percent of principal semi-annually in the first 60 months and remaining amount in 4 equal semi-annual installments starting from 66th month.000 each Mark up: Average 6 month KIBOR plus 2.000 each Mark up: Average Six Months KIBOR + 2.00 percent per annum Redemption: In 6 equal semi annual installments.940 149. 5.440.10 : 15.000) certificates of Rs. Abbas D. after completion of grace period. Maturity: July 2021 Chief Executive: Mr. Maturity: July 2017 Chief Executive: Mr.20 percent of principal semi-annually in the first 60 months and remaining amount in 4 equal semi-annual installments starting from 66th month. after completion of grace period.000) certificates of Rs. 5.

000 20. Sulemanji Esmailji & Sons (Private) Limited Sitara Peroxide (Private) Limited Liberty Power Tech Limited Amreli Steel (Private) Limited *Security Leasing Corporation Limited .740 25.15.2 These represented bank loan liabilities of power companies (which include term finance certificates issued by GEPCO.394 million).06% (2010: 3. Further. 2011.00 percent 3 months KIBOR plus 1.799 250.789 336. 9.025 39. These carry interest at 4.545 30. to all those banks who have agreed to reschedule / restructure their exposure against the company subject to the condition that such exposure shall be classified in accordance with Prudential Regulations. ****These Sukuks bonds have been restructured with effect from April 15.000 38.600 31.75% per annum (2010: 2. 2011.80 percent 6 months KIBOR plus 1.00 percent 3 months KIBOR plus 2. 2011 by crediting bank's SBP account. FESCO and NTDC) that had been transferred to Power Holding (Private) Limited to bring all circular debts of power sector to a single point of responsibility.036 Sitara Chemical Industries Limited .14.50% per annum) and 2. 2011.15 percent 6 months KIBOR plus 1.000 95.000 281.9.000 * These Sukuks bonds have been restructured with effect from April 19. 9. 9.000 60.695 336. June 2014 (2010: June 2014) and February 2013 (2010: February 2013) respectively.70 percent 6 months KIBOR plus 1. ANNUAL REPORT 2011 125 .000 2. ***These Sukuks bonds have been restructured with effect from August 9. These bonds carry interest at Nil percent per annum (2010: 14.II Orix Leasing Pakistan Limited *Security Leasing Corporation Limited .1 June 2014 June 2014 August 2016 March 2021 December 2016 March 2014 September 2015 September 2015 3 months KIBOR plus 1.50% per annum (2010: 13. Had the exemptions not been available.1 This represents advance payment to Sitara Energy Limited. 9.09% per annum).670 145.458 31.000 70.667 105.000 8.000 1.960 million thereagainst.000 Note 9.30 percent 3 months KIBOR plus 1. The Bank has classified the exposure as "Loss" and has maintained a provision of Rs 49.14. including all accrued mark-up and asked the banks to subscribe to an equal amount of Treasury Bills and PIBs against their outstanding exposure in the ratio of 50:50.000 100. ** These Sukuks bonds have been restructured with effect from November 24.349.173 281. these also included conversion of loan accounts of Power Holding (Private) Limited into term finance certificates. the provision against investments would have been higher by Rs 49.16 These represent overseas bonds amounting to BDT Nil (2010: BDT 7.062 126. During the current year.989 100.600 36.000 35.250 500. 2011.000 69.670 135.000 5.80%) and are due for maturity in March 2013. Orascom Telecom and Standard Chartered Bank respectively.II **Kohat Cement Company Limited ***Sitara Energy Limited ****BRR Guardian Modaraba K. 13.15.I Engro Corporation Limited Quetta Textile Mills Limited December 2013 June 2012 March 2014 December 2015 Note 9.960 million while the profit before taxation for the current year would have been lower by the same amount.15 Investments in sukuk bonds Investee company Date of maturity Profit rate per annum Number of Certificates 2011 2010 (Rupees in „000) 124.438 53.81% per annum) and have matured / are due for maturity in December 2011 (2010: December 2011). 2012.549 224.17 These represent Credit Linked Notes amounting to US Dollar 5 million (2010: USD Dollar 5 million) issued by Standard Chartered Bank.1 20.50 percent 59.15.705 98.250 483. 9.I Sitara Chemical Industries Limited .1 The State Bank of Pakistan vide its letter no BSD/BRP-1/001485/2012 dated February 2. BDT 120 million (2010: 150 million) and US Dollar 10 million (2010: US Dollar 10 million) issued by IDLC Securitisation Trust.40 percent 3 months KIBOR plus 1. The relevant sukuk bonds against the advance subscription have not been issued to the Bank by December 31. 2011.25 percent Nil 6 months KIBOR plus 1. the Federal Government decided to settle the circular debt issue.000 250. Accordingly all the outstanding dues of the Bank were cleared by the Federal Government on November 4.10 percent 3 months KIBOR plus 3.000 12.078 96.980.000 20.50 percent 6 months KIBOR plus 1.000 50.S. 2012 has allowed relaxation in maintaining provisioning against the exposure of Azgard Nine Limited till February 29. Following the settlement of term finance certificates the Bank purchased an equivalent amount of 12 months Treasury bills and 5 year PIBs on the same date.667 75.50 percent Nil 6 months KIBOR plus 1.

2011 Management Company .53% (2010: 96.739 135. Particulars of the shareholding in these companies are as follows: ANNUAL REPORT 2011 126 .563 95.22% (2010: 40.285 5.704 5.913 Alfalah Insurance Limited Percentage of holding: 30% (2010: 30%) Break-up value per share: Rs. 2011 Chief Executive: Mr.695 7.Alfalah GHP Investment Management Limited (Paid-up value of each unit is Rs.272 Wateen Telecom Limited * Recategorised during the year from investment in associates to Available for Sale (Refer note 9.18%) Break-up value per unit: Rs.650.028 13. 2011 Management Company .22%) Break-up value per share: Rs.998. management has assessed that this investment does not result in significant influence over these entities as defined in IAS 28. the Bank's investments in shares of Warid Telecom (Private) Limited and Wateen Telecom Limited have been recategorised as Available for Sale (AFS) instead of being categorised as Investment in Associates. 40.497 **917.070 140.077 301.498.077 5.38%) Break-up value per unit: Rs.Alfalah GHP Investment Management Limited (Paid-up value of each unit is Rs.1 Investment in shares of Warid Telecom (Private) Limited and Wateen Telecom Limited During the year. 2011 Chief Executive: Mr.049.1) 9.070 13.889. 2011 2010 (Number of shares / units) 8. 12.590. Abdul Aziz Anis Warid Telecom (Private) Limited 2011 2010 (Rupees in „000) 116.972 337. 10. 46.18.049. 50) Alfalah GHP Investment Management Limited Percentage of holding: 40.770 152. Accordingly the fair value of these investments as at January 1. 2011 has been used for their initial recognition in the AFS category as specified in IAS 28.77 Date of audited financial statements: December 31.236 7.992 4.787 2. 2011 Management Company . 10 unless otherwise stated.89 Date of reviewed financial statements: December 31.9.72% (2010: 96.79 Date of reviewed financial statements: December 31.481.599 355.19% (2010: 33.262 321.590.498 223. The Bank's investment in both these group companies is less than 20% of investee company's capital and based on internal reorganisation.Alfalah GHP Investment Management Limited (Paid-up value of each unit is Rs.18.064. 50) Alfalah GHP Income Multiplier Fund Percentage of holding: 98.889.593 140.98 Date of reviewed financial statements: December 31.18 Particulars of investments in associates The paid up value of these shares / units is Rs.11%) Break-up value per unit: Rs.660. 53. Nasar us Samad Qureshi Alfalah GHP Value Fund Percentage of holding: 34.95 Date of audited financial statements: December 31.794 2. 50) Alfalah GHP Islamic Fund Percentage of holding: 96.739 2.

238 2011 9.549.483 Profit 69.469) 20.794 20.494.071 million was recognised on recategorisation of investment in Wateen Telecom Limited which represents the difference between the carrying value and the fair value on the date of recategorisation. 1.044 A loss of 34.282 384.79 Date of audited financial statements: June 30.920 402.24% (2010: 8.920 83.356) 135.24%) Break-up value per share: Rs.18.2 Investment in associates 2011 2010 (Rupees in „000) 9.21.510. Muneer Farooqui Wateen Telecom Limited (Fixed Line Telecommunication Sector) Percentage of holding: 13. revenues and profits of the Company as of December 31.52%) Break-up value per share: Negative equity Market value per share: Rs.779) (9. 2011 (Unaudited) Chief Executive: Mr.054.124 319.828 (4.981 1.563 87.044 402.Warid Telecom (Private) Limited Percentage of holding: 8.124 83. 2011 based on audited financial statements are as follows: Assets Liabilities Revenues ----------------Rupees in '000----------------Alfalah Insurance Company Limited 1.794 Alfalah Insurance Company Limited is a general non-life insurance company which was incorporated as an unquoted public limited company in Pakistan.1 Alfalah Insurance Company Limited Investment as at January 1 Dividend received during the year Share of profit Balance as at December 31 95. liabilities. Naeem Zaminder 2011 2010 (Number of shares) 319.770 147.549.054.795 95.590 (5. 9.829) 12.704 (6.122.2 Alfalah GHP Value Fund Investment as at January 1 Dividend received during the year Share in reserves of associate Share of (loss) / profit Balance as at December 31 2010 (Rupees in „000) 152.2.704 ANNUAL REPORT 2011 127 .18.362 152. Impairment held against investment in these companies is disclosed in note 9.769 116. The details of assets. 5. 2011 Chief Executive: Mr.52% (2010: 13.2.18. These entities remain related entities of the Group and transactions carried out with them are reflected in note 41 to these consolidated financial statements. Recategorisation of Warid Telecom (Private) Limited did not result in any loss.71 Date of financial statements: December 31.502) 924 (11.494.

028 Alfalah GHP Islamic Fund is an open-ended asset allocation fund.586) (8.715 7.364) (50. Being an open ended mutual fund. the Fund offers units for public subscription on a continuous basis. listed on the Karachi Stock Exchange.2.3 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 31 355.524 321. revenues and losses of the Fund as of December 31.145) 20.589 (47. liabilities.715) (24. 2011 Assets Liabilities Revenues Loss -----------------Rupees in '000----------------Alfalah GHP Value Fund 404.540) (31. The details of assets.262 316.430) (30. 2011 based on reviewed financial statements are as follows: ANNUAL REPORT 2011 128 .4 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 31 321.000) (41.787 301. Being an open ended mutual fund. 2011 Assets Liabilities Revenues Loss -----------------Rupees in '000----------------Alfalah GHP Income Multiplier Fund 231.Alfalah GHP Value Fund is an open-ended mutual fund.18.988) 4.2. 2011 based on reviewed financial statements are as follows: Half year ended December 31. liabilities.657 (23.354) 2011 2010 (Rupees in „000) 9. the Fund offers units for public subscription on a continuous basis. Being an open ended mutual fund.565) (4.533) As at December 31.028 (19. listed on the Karachi Stock Exchange. listed on the Karachi Stock Exchange.285 (100. liabilities. 2011 2011 2010 (Rupees in „000) 9.285 Alfalah GHP Income Multiplier Fund is an open-ended mutual fund.017 223. revenues and losses of the Fund as of December 31.402) 2. The details of assets.972) 70.515 4.599 586. 2011 based on reviewed financial statements are as follows: As at December 31. the Fund offers units for public subscription on a continuous basis.18. revenues and profits of the Fund as of December 31.135 355. The details of assets.016 (33. 2011 Half year ended December 31.295 (210.

532) 10.758 26. revenues and profit of the Company as of December 31.As at December 31.752) 140.574 11. liabilities.818 Alfalah GHP Islamic Fund 317.059 2011 2010 (Rupees in „000) 9.439) 1. 2011 based on audited financial statements are as follows: As at December 31.2.497 (10.593 154.628 140.726 (10. 2011 Half year ended December 31. 2011 Assets Liabilities Revenues Profit ----------------Alfalah GHP Investment Management Limited 362.962 (5. The principal activity of the company is to act as an asset management company.497 Alfalah GHP Investment Management Limited is an asset management company. The details of assets. 2011 Assets Liabilities Revenues Profit -----------------Rupees in '000----------------5.019 4.425 ANNUAL REPORT 2011 129 . 2011 Half year ended December 31.287 Rupees in '000----------------12. investment advisor / fund manager and to constitute.709 109. float and manage open-ended schemes and closed-end funds.18.5 Alfalah GHP Investment Management Limited Investment as at January 1 Dividend received during the year Share in reserves of associate Share of profit / (loss) Balance as at December 31 140.

800 92.180 99.935 64.Government Securities) 99.441 35.916 15.442 38.930 883 5.741 91.866 39.940 299.332 99.325 45.928 28.355 60.472 49.053 21.270 (Unrated .106.640 149.960 31.332 155.000 297.784 9.709 26.155.894 50.000 99.771 8.680 30.659 63.969 45.425 76.840 7.045.341 25.800 47.549.368 332.219 1.920 456.790 28.977 37.634 28.924 42.163 38.221 29.921 61.013 15.959 382.980 284 11.366 279.463 74.820 29.114 49.820 150.750 49.638 2.809 24.466 15.086 1.000 19.298 (Unrated .190 9.135 61.587.026 24.043.648 91.9.920 449.077 72.866 87.000 26.791 163.329 35.920 30.454 23.955 171.325 17.654 9.19 Quality of available for sale securities Market value 2011 2010 --------------------- Cost 2011 2010 Rupees in '000--------------------- Long/Medium Term Credit Rated by 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 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 Azgard Nine Limited Askari Bank Limited (3rd Issue) Faysal Bank Limited Bank Al-Habib Limited 64.654 75.494 25.760 34.026 11.143 3.500 50.870 44.020 5.357 74.111 30.088 5.165 212.567 150.940 1.132 40.152 37.924 37.675 4.781 62.064 22.648 94.000 19.478 35.079 8.604.920 460.149 30.279 2.353 199.310 33.935 74.171 37.439 200.427 49.901 25.572 8.534 46.000 99.873 AA PACRA ------(Unrated)-----AA/A1+ PACRA ------(Unrated)-----------(Unrated)-----AA+/A1+ PACRA ------(Unrated)-----A(f) JCRVIS A-(f) PACRA AA/A1+ PACRA A/A1 PACRA ------(Unrated)-----------(Unrated)-----------(Unrated)-----------(Unrated)-----------(Unrated)-----------(Unrated)-----A/A1 PACRA ------(Unrated)-----AA+/A-1+ JCRVIS ------(Unrated)-----------(Unrated)-----AA+/A1+ PACRA ------(Unrated)-----A(f) JCRVIS A(f) AAA/A-1+ PACRA JCRVIS ANNUAL REPORT 2011 130 .367 19.461 10.014 10.233 99.177 51.463 97.916 14.920 449.342 2.635.689 332.345 17.000 26.000 1.693 50.708 18.380 273 6.998 57.011 19.136 31.955 30.980 3.448 38.852 AAAAA AA AAAAA+ AA+ AA D A+ A+ AA D AAAAAA- PACRA PACRA PACRA PACRA JCRVIS PACRA PACRA PACRA PACRA PACRA PACRA PACRA PACRA PACRA PACRA PACRA Shares in Listed Companies / Certificates / Units Adamjee Insurance Company Limited Al-Abbas Cement Company Limited Allied Bank Limited AMZ Plus Income Fund Attock Cement Company Limited Bank Al Habib Limited Crescent Steel & Allied Products Limited Crosby Pheonix Fund Dawood Money Market Fund Engro Corporation Limited Fatima Fertilizer Limited Fauji Cement Company Limited Fauji Fertilizer Company Limited Fecto Cement Limited Hira Textile Mills Limited ICB Islamic Bank International Steels Limited KASB Securities Limited Kohinoor Energy Limited Kot Addu Power Company Limited Lotte Pakistan PTA Limited Lucky Cement Limited MCB Bank Limited Meezan Balanced Fund Meezan Islamic Income Fund NAFA Income Opportunity Fund (Formerly NAFA Cash Fund) National Bank of Pakistan 16.226 2.234 20.954 5.352 24.067 317.548 5.135 20.764 47.685 1.420 46.521 14.333.182 99.322 64.Government Securities) 8.117 10.055 15.000 381.588.826 25.469 5.000 1.229.237.505 40.937 1.

000 2.061 84.725 4.000.000.921 1.348 68.000.570 135.000.000 2.000 50.287 A+/A1 PACRA 10.477.718.277 32.953.12.670 16.936 10.941 67.279 13.251 6.882 2-Star/3-Star PACRA ------(Unrated)-----------(Unrated)-----41.677 30.090 Shares in Un-listed Companies Pakistan Export Finance Guarantee Agency Limited Not Applicable Not Applicable Not Applicable Not Applicable Not Applicable 5.096 70.718.225 500.528 60.595.000 50.096 70.026 226.000 3.021 ------(Unrated)-----87.972 2.000 3.478.277 36.8.304 136.403 221.000 D BBB / A3 PACRA PACRA Sukuk Bonds GoP Ijarah Sukuk Bonds II GoP Ijarah Bonds III GoP Ijarah Bonds IV GoP Ijarah Bonds V GoP Ijarah Bonds VI GoP Ijarah Bonds VII GoP Ijarah Bonds VIII GoP Ijarah Bonds IX Sui Southern Gas Company Limited Security Leasing Corporation Limited I Security Leasing Corporation Limited II Quetta Textile Mills limited 29-Dec-08 11-Mar-09 17-Sep-09 15-Nov-10 20-Dec-10 7-Mar-11 16-May-11 26-Dec-11 .000.000 25.000 2.388.703 145.521 8.258.000 6.005 129.926 150.000.235.595.929 AA+/A1+ PACRA AA+/A-1+ JCRVIS 50.934 920 4.674 303.950 6.000.000.509.000 55.000 40.212 9.000 16.000 JCRVIS BBB-(f) ------(Unrated)-----1.500.000 3.225 .545 1.448 41.000 2.676 6.251 4.937 39.328 34.924 A+/A-1 JCRVIS AAA/A-1+ JCRVIS 21.670 911 14.000 A+(f) PACRA 9.000 2.950 12.120 12.000 3.502 7.625.000 12.Date of issue Market value 2011 2010 --------------------- Cost 2011 2010 Long/Medium Term Credit Rated by Rating Rupees in '000 157.082 43.000 85.748 51.1.000 30.823 1.304 50.429.264.595.625.130.113 6.350 30.000 .000 303.000 25.679 ------(Unrated)-----------(Unrated)-----------(Unrated)-----------(Unrated)-----------(Unrated)-----------(Unrated)-----------(Unrated)-----------(Unrated)-----AA-/A1+ PACRA ------(Unrated)-----------(Unrated)-----BBB+ JCRVIS ANNUAL REPORT 2011 131 .380.921 2.000 129.193 34.113 3.220 104.000 3.584.130.813 123.821 ------(Unrated)-----------(Unrated)-----------(Unrated)-----------(Unrated)-----------(Unrated)------ Society for Worldwide Interbank Financial Telecommunication Al-Hamra Hills (Private) Limited Al-Hamra Avenue (Private) Limited Warid Telecom (Private) Limited Preference Shares in Un-listed Companies First Dawood Investment Bank Limited Trust Investment Bank Limited Not Applicable Not Applicable 15.000 15.850 8.979 66.740 126.625.408.000 3.625.477.789 23.000 AA-(f) PACRA 30.000 8.000 36.000 8.859 AA-/A1+ PACRA AA-/A1+ PACRA 150.609 Nishat (Chunian) Power Company Limited Nishat Power Company Limited Pak Oman Advantage Fund Pak Oman Advantage Islamic Income Fund Pakistan Capital Market Fund Pakistan Oilfields Limited Pakistan Petroleum Limited Pakistan State Oil Company Limited Pakistan Telecommunication Company Limited Samba Bank Limited Security Papers Limited Southern Electric Power Company Ltd The Hub Power Company Limited United Bank Limited United Islamic Income Fund Wateen Telecom Limited 6.800 31.629 67.000 39.228.000 40.595.850 .542 16.790.888 130.572 38.793 5.257 68.000 3.569 35.660.092 44.979 AA+/A1+ PACRA 38.269 36.725 4.695 45.

Pakistan Export Finance Guarantee Agency Limited .21 Particulars of provision for diminution in value of investments by type and segment Available for sale securities Listed companies / mutual funds .Trust Investment Bank Limited Held to maturity securities Unlisted securities .1 5.000 25.191 9.652 8.899 288.652 465.Wateen Telecom Limited .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 9.851 9.592 55.1 The Bank has determined the impairment charge as a difference between the carrying amount and the breakup value based on the un-audited financial statements of Warid Telecom (Private) Limited for the period ended December 31.Fully paid up ordinary shares of Rs.BRR Guardian Modaraba . ANNUAL REPORT 2011 132 .064 23.000 - 8.21.Preference shares .Al-Hamra Hills (Private) Limited . 10 each .725 35.Sitara Energy Limited 288.191 1.Al-Hamra Avenue (Private) Limited .Warid Telecom (Private) Limited .000 74.064 23.494 53.Kohat Cement Company Limited .Khunja Textiles Mills Limited .671 169.Fully paid up ordinary shares / units .851) 1.613 30.158 171.Agritech Limited .730 (1.191 173. 2011.710.Note 2011 2010 (Rupees in „000) 9.637 25.892 5.725 35.Term finance certificates / sukuk bonds .000 839.926 1.First Dawood Investment Bank Limited .815 (285) (132.21.497) 288.000 29.000 7.613 249.Others Unlisted companies .Term finance certificates .941.457) (55.Azgard Nine Limited .000 49.First Dawood Investment Bank Limited .941.960 30.000 - 30.000 25.

662) (391) (11. cash credits.729 196.666.129.036 3.846 11.Listed NIB Bank Limited MCB Bank Limited National Bank of Pakistan Lucky Cement Limited Pakistan Oilfields Limited Azgard Nine Limited Fauji Cement Company Limited D G Khan Cement Limited Lotte Pakistan PTA Limited Nishat Chunian Power Limited Nishat Power Limited Karachi Electric Supply Company Limited Dewan Salman Fiber Limited Nishat (Chunian) Mills Limited (10.111.774) (598.864) 198.419 11.145 2.587.143 (10.162 319 1.282.758 2.483.661.461) (649.711 1.9.220.020.300 11.628) (10.898 8.673 683 68.165.456 8.5 10.715 190.113.592 4.5 (12.613 1.468.563 Market Treasury Bills Pakistan Investment Bonds 1 11.968 4.001.152.NET Loans.189.615 3.392 24.054 10.895 6.166 8.253 11.905.707 211.860 30.029 (179) (143) (35) 1.822.2 178.299 - 918 2.394.955 2011 2010 (Rupees in „000) 10 ADVANCES .512 187.809 12.527 1.615 6.398.169 1.327.299 966.034.661.592 4.185 56 56 (38) (477) (2) 3.109 4.22 Unrealised (loss) / gain on revaluation of investments classified as held for trading .633.089) 207.090) (12.503.376 10.730 3.925. running finances.463.905. 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 Provision against advances Specific provision against non-performing advances General provision against advances 10.3 ANNUAL REPORT 2011 133 .net Unrealised gain / (loss) Cost 2011 2010 2011 2010 -----------------Rupees in '000----------------- Name of Investee Company Fully paid up ordinary shares / units .335 1.670.799.053) Note (33) 79 872 (71) 2.207 8.875 217. etc.

905.832.598. 10.869) (419.905.144.823.592 2.103 4.148.4.2011 2010 (Rupees in „000) 10.068 211.822.122.1 1.195.1 Particulars of advances .394.734) (218.240 26.615 .2 Net investment in finance lease 2011 Not later Later than Over than one one and less five year than five years years ----------------------------------------------------------- Total Not later than one year 2010 Later than Over one and less five than five years years Total (Rupees in '000)--------------------------------------------------------- Lease rentals receivable Residual value Minimum lease payments Financial charges for future periods Present value of minimum lease payments 10. 2009 have been accounted for in accordance with the requirements of IFAS 2.376 197.837 1.743.459 (315.181. 2009.384 1. plant and machinery and equipment and are for periods ranging from 3 to 5 years.730.916.291 (837.972 5.143 Short term (upto one year) Long term (over one year) 10. The significant ijarah contracts entered into by the Bank are with respect to vehicles.821 3.143 165.308 59.2.218 2.344 52.480. Ijarah contracts entered on or after January 1.977 217.102 701.376 151.394.914.638 1.319 (533.799 217.322 5.166 19.091.754 3. b) Movement in net book value of ijarah assets ANNUAL REPORT 2011 134 .540 7.807.118 2. "Ijarah" as disclosed in note 10.047.512 Net investment in finance lease includes Ijarah financings disbursed prior to January 1.021.3 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.903.822.587.151.gross of provisions In local currency In foreign currencies 184.676) 6.661.919.751 2.208 - 3.985) (417.724.136 211.281 799.251) 2.475 1.3.244.044.807) - 4.247.577 2.897.997 2.829.

2011 Opening net book value Additions Disposals Cost Accumulated Depreciation Depreciation Closing net book value At December 31.549 5.765.452.517 499.758 98.758 ANNUAL REPORT 2011 135 .019.183 3.112 (317.030.425 (819.330.044) (585.527) (26.843 (3.503.642 (121.702.375 (34.473 (23.509 2.150. 2011 Cost Accumulated depreciation Net book value 2.924 5.549 545.652 2.125) 499.877 (43.177) 4.661) 476.083 120.030.720 (271.849 98.799) 13.483) 6.125) 499.537 545.294 4.752 399.166) (468.758 75.895) 507.105.398.473 (23.484) 120.183) 514.694 (69.845 4.334) 2.347) 507.494 2.119 (35.472) (148.127 (65.183 3.530) 79.079) (1.849 722.574) 195.320) 514.567 (3.468 (285.316 (95.549 476.751.145) 476.111) (526.108 (5.878 4.768) 97.551) 499.752 195.503.811) 44. 2011 Cost Accumulated depreciation Net book value Year ended December 31.715) 75.694 (69.262 (30.597 (32.109 Vehicles Consumer -------------------------------- 2010 Asset categories Vehicles Plant & Corporate Machinery (Rupees in '000)-------------------------------- Equipment Total At January 1.083 422.300 3.Vehicles Consumer -------------------------------- 2011 Asset categories Vehicles Plant & Corporate Machinery (Rupees in '000)-------------------------------- Equipment Total At January 1.652 625.765.813 (48.334) 2. 2010 Cost Accumulated depreciation Net book value 660.509 221.503.878 620.549 212.537) (163.642 (121.843 (313.744 (214. 2010 Cost Accumulated depreciation Net book value Year ended December 31. 2010 Opening net book value Additions Disposals Depreciation Adjustment Closing net book value At December 31.452.069) 2.486 (238.294 4.843 (313.517 620.509 2.580) (924.2.845 (401.536 92.145) 476.398.183 3.994 1.105) 6.111) (526.353.723) 625.503.509 1.494 75.049 946.262 (945) (64.699) 3.452.370) 1.704) 44.123.330.536 5.517 208.188 (304.758 .726) 5.715) 75.452.537 785.547) 3.326 (25.183 3.211 (22.011.049 946.109 92.517 123.

576 1.494 19.4 Advances include Rs 19.312 192.889 740.461 movements (21..050 17.699 13.674 3.550.710.note 10.576 1..662.715 109...710 billion) which have been placed under non-performing status as detailed below: Classified Advan Domestic Overseas ---------------- Total Domestic Overseas Category of Classification Other Assets Especially Mentioned (Agri Financing) Substandard Doubtful Loss 99.600.000 17.2 Loss 192.215 4.096.780.941.120 99.174.924..150 5.494 15.- Opening balance Exchange adjustment and other 10.236 10..050 110.221 18.492.033) .699 110.022..017 2.368.544 106..4.941.889 740.033..174.614 Classified Advan Domestic Overseas ---------------- Total Domestic Overseas Category of Classification Other Assets Especially Mentioned Mentioned (Agri Financing) Substandard Doubtful .097 billion (2010: Rs 17.312 10.000 13.020.674 3..060 5.987.5 Particulars of provisions against advances Note Specific General --.602.2011 2010 (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 411.542 5.845 4.306 109.022.017 2...306 14..

1 (186.043) 2.716) Closing balance 12.774 ANNUAL REPORT 2011 136 .442.Charge for the year 3.062 Amounts written off 10.105 Reversals / recoveries (927.6.515.327.

net of tax at December 31.670. Prudential Regulations R-22 for Consumer Financing: Mortgaged residential property 75% for first and second year 40% for three years 50% for third and fourth year.201 9.020.780 million).863 119. i.571. commercial and industrial properties held as collateral against all non-performing loans for 4 years from the date of classification for calculating provisioning requirement.774 478. 2011).923 649. Under the revised guidelines issued by SBP.461 ANNUAL REPORT 2011 137 .628 10.5.244. 2011 which is not available for either cash or stock dividend to shareholders amounted to Rs. banks were allowed to avail the benefit of 40% of forced sales value of pledged stocks and mortgaged residential.973 27. However. 10.663 144.554 million. commercial. commercial and industrial properties and plant and machinery as per the revised circular.e 30% of forced sale values instead of 40%. and 10% for third year Pledged stock b. 10.974 12. residential.302. and industrial properties (land & building only) 45% for third year 30% for fourth year. 2011 would have been higher by approximately Rs. Had the provision against non-performing loans and advances been determined in accordance with the previously laid down requirements of SBP.992.5.227 598.4 Particulars of provisions against advances Specific ----------------------------------------------- 2011 General Total Specific 2010 General Total (Rupees in '000)--------------------------------------------- In local currency In foreign currencies 12.435 98. 174.090 12.488 578. the provision against non performing loans and advances has been determined by taking the benefit of forced sale values as allowed under the previous circular except for loans and advances where more than 3 years have elapsed since the date of classification.5.925. 10.5. and 30% for fifth year Under the previous guidelines issued by SBP which were effective from September 30.301 (2010: 2.2 The additional profit arising from availing the FSV benefit . The Bank has decided not to avail the benefit of forced sale values of pledged stocks and mortgaged. 1.3 General provision against consumer loans represents provision maintained at an amount equal to 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. Prudential Regulation R-8 for Corporate / Commercial Banking and Prudential Regulation R-11 for SME Financing: Category of Asset Benefit of FSV allowed from the date of classification 75% for first year 60% for second year Mortgaged residential.193 10.781. 2011 (effective from September 30.166 71.800 24.089 12. 1 dated October 21. and 20% for fifth year Plant & Machinery under charge 30% for first year 20% for second year.997. 2009. banks have been allowed to avail the benefit as follows: a.327. the benefit of discounted forced sale values of plant and machinery was previously not available to banks for calculating provisioning requirement. the specific provision against non-performing loans would have been lower and consequently profit before taxation and advances (net of provisions) as at December 31. Accordingly.1 During the year the State Bank of Pakistan (SBP) has introduced certain amendments in the Prudential Regulations in respect of maintenance of provisioning requirements against non-performing loans and advances vide BSD Circular No. The benefit of forced sale value in such cases has been taken on the basis of revised circular.10. General provision for overseas branches is maintained in accordance with the guidelines of the authorities in the respective countries.864 10.

000/.632 3.2 Write offs of Rs. executives or officers of the Bank or any of them either severally or jointly with any other persons .392) 2.169.990.640 8.696 192.932.6.Balance at beginning of year .350 1.6.105.257) 4.919.298.350 Note 2011 2010 (Rupees in „000) ANNUAL REPORT 2011 138 .067 2.446 4.629 187.141.10.631. 500.539 (1. etc. 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 31.412 4.Balance at end of year Total 2.783 192. 10.and above In terms of sub-section (3) of Section 33A of the Banking Companies Ordinance.473. associated companies.435 6.096 6. building and machinery.012 10.960.746 342.096 2.894 351.Balance at beginning of year .5.275 1. executives.1 Against provisions Directly charged to profit and loss account 186. Note 2011 2010 (Rupees in „000) 10.592.6 Particulars of write-offs 10.412 326.Loans granted during the year .640 10.372.141. 500.000 and above Write offs of below Rs. partners or in the case of private companies as members . the Bank holds enforceable collateral in the event of recovery through litigation.993) 2. 500.716 5.477. 2011 is given in Annexure-I.Repayments during the year .540) 4. Debts due by directors.Loans granted during the year .246.615 (1. These securities comprise of charge against various tangible assets of the borrower including land.136 25.Repayments during the year .8 Particulars of loans and advances to directors. stock in trade etc.7 Details of loans written-off of Rs.105.000 10.5 Although the Bank has made provision against its non-performing portfolio as per the category of classification of the loan.951.Balance at end of year Debts due by companies or firms in which the directors of the Bank are interested as directors.476 (10.332 (2.652.504 351.

146 4.950 6. 2011 *adjustments 31.198 (3.608.972.615 55.355) 165.036.402 4. 2011 2011 -----------------------------------------------------------(Rupees in '000)--------------------------------------------------------Office premises 5.914 (4.091 25% ANNUAL REPORT 2011 139 .564 7.438 210.693 679.689 367.5% 8.860 2.205.458 928.450.178 25% Leased Vehicles 18.276 - 3.318 27.017 15.082 530 (10.153 14.549.643) 12.237 per annum 2.804 786.393 (89.613 45.370 310.600 3.348 20% Furniture and fixtures 1.986.707 13.029 441 12.993 234.144.491 599.130 (36.901.120 14.542.946 19.574 (13.091 464.514.5%-5.300 (8.230 8.427.406 189.707.700 158.747.366.604) 5.951 12.25% Office equipment 5.729 (76.309 3.806 10% .097 Lease hold improvements 2.Note 2011 2010 (Rupees in „000) 11 FIXED ASSETS Capital work-in-progress Property and equipment Intangible assets 11.005 20.488 75.827) 43.582.843) 508.276) (3. 2011 2011 *adjustments at December 31.215 596.049 2.542.434 (38.595 179.615 55.372 - 6.230 8.1 11.066.715.951 Net Book Value as at December 31.397 (37.492 82.895 12.415.664) 5.685 125.003) (4.383 79.264 627.023.972 1.833 45.154.268) 893.366.079 83.833 476.689 83.606) 219.701.861 4.251.116.221 20% .666 156.225 192.916) 1.941) 1.146.651 (32.183) (19.013.624 1.5%-5.972.788.1 Capital work-in-progress Civil works Equipment / intangibles Advances to suppliers and contractors Others 2011 Cost / 11.437.821 56.895 Cost/ Revaluation as at December Accumulated depreciation as at January 1.177 91. 228.516 3.052 - 1.783) (5.506 56.847) (16.517) (8.670.659) (22.5% Revaluation 3. revaluation Additions / (disposals) / Reversal of Depreciation for the year/ (on disposal)/ deficit on revaluation Accumulated depreciation as Rate of depreciation % Description as at January 1.882) (28.2 11.3 596.25% Vehicles 233.234 679.859) (4.619 - 233.685 128.447 (3.020) 44.945) 142.379 1.

839) 5.348) 151.2.670. 2010 ----------------------------------------------------------- *adjustments 31.829.427.452 18.1Included in cost of property and equipment are fully depreciated items still in use having cost of Rs. 4.929 (5.700 76.301.605 8.619 145.907) 386 859.5% Revaluation 3.809 5.411) 34.976 (30.587 2.2.701.574 4. Depreciation for the year/ (on disposal)/ Accumulated depreciation as January 1. 2.282 (3.492 4.325 (99.605) - 5.1.986.141) 1.533.082 12.032 (77.144.582.248 10% . Had there been no revaluation. Valuation and Engineering Consultant.5%-5.5% 7.790 (11.809 39.115 6. 11.695.989 8.989 3.5.996 25% 16.989 19.132 2.2010 Cost / revaluation Additions / (disposals) / Reversal of Description as at deficit on revaluation Cost/ Revaluation as at December Accumulated depreciation as at January 1. the net book value of office premises would have been Rs.804 954.672.357) 12 79.608.501) 1.276 1.929 (6.677 million).685 125.700 440.206. 2009 on the basis of market values determined by Harvester Services (Private) Limited.365 14.970 20% .443 16.309 Lease hold improvements 2.972.151) (2.066.986.25% Office equipments 4.986.429) 1.950 3.207 (221) 1.919 25% Leased Vehicles 23.293.101 1.964) (6.492.399 627.402 2.496.540. 2010 Net Book Value as at December 31.892 (221) 1.247 (23.116 (17. Rate of depreciation % 2010 (Rupees in '000)--------------------------------------------------------- per annum Office premises 4.891 156.946 12.951 397.116.049 1.700 636 397.237 million (2010: Rs 4.079 - 78.542.177 3.926 (6.514 (30.155 (28.667) 209.152.556 7. 1.506 451.865) 1.227 20% Furniture and fixtures 1.506 45.171) 1.759) 20.589.584 . 2010 2010 *adjustments at December 31.492 11. ANNUAL REPORT 2011 140 .230 - 45.549.831 1.685 123.185 3.330 million (2010: Rs.587 million).052 482.545 8.5%-5.372 2.25% Vehicles 246.530 (14.2.483.2 Office premises of the Bank were last revalued on December 30.567 7.631.183) (14.972.118.826 .147 - 233.385.544) 2.490 (4.010 .

856 * (49) 599.3.009 * (117) 321.101 173.2 Adjustment in goodwill represents amount relating to Karachi Stock Exchange branch which has been reclassified to leasehold building consequent to execution of sub-lease agreement by the Karachi Stock Exchange with the Bank. 18.1) 953.707 As at January 1.3.072 173. ANNUAL REPORT 2011 141 .599 (885) 567.833 494.000 541.806 million (2010: Rs 24.306 (1. 2011 2011 ACCUMULATED AMORTIZATION As at Amortization As at Book value Rate of January (Deletion) / December at closing amortization 1.833 384. 259. 2011 % per annum (Rupees in '000)------------------------------------------- As at January 1.599 433.3.599 623.971 (53. 174.038 * (117) 109.206 953.3 Intangible assets COST Additions/ As at (Deletions)/ December * Adjustment 31.949 552.153 20% Computer software (note 11.344 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.206 1.3.630 (54.106) 384.940) - 56.885 183.094. 2010 2010 ACCUMULATED AMORTIZATION As at Amortization As at Book value Rate of January (Deletion) / December at closing amortization 1.046) 494. 11.000 - - 31.000 109.3 Included in cost of intangible assets are fully amortised items still in use having cost of Rs.971 (53. 2010 % per annum (Rupees in '000)------------------------------------------211.825) 464.971 - 31.885 * (49) 109. 2011 --------------------------------------------- Computer software (note 11.178 million (2010: Rs.153 11.031 109.088.038 49. 11.337 (55.940) - 56.009 49.971 568.3.664 million).1) 400.3.2) 109. 2010 * Adjustment 31.374 1.374 1.000 31.856 183.707 20% Goodwill (note 11.11.920 552.001.1 This includes additional amortisation charge of Rs.971 31.000 Goodwill Membership Card 109.094.000 1. 2010 --------------------------------------------- COST Additions/ As at (Deletions)/ December * Adjustment 31.971 31.031 - Membership Card 31. 2011 * Adjustment 31.

293 1.190 699 3.919 37.000 or cost of less than Rs.330 1.686 1.190 5. 1.000.429 1.000 or net book value of Rs.276 2.796 824 448 238 703 137 1.) Mr.000 or cost of less than Rs.000 Total .000 or cost of less than Rs.642 7.) Muhammad Bilal Mustafa Various Bid Bid Bid Bid Bid Bid Bid Bid Bid Bid Various Bid Bid As Per Bank Policy As Per Bank Policy As Per Bank Policy As Per Bank Policy Negotiation Various Disposal as per Bank's policy represents vehicles sold to employees of Bank Alfalah Limited as per the terms of their employment.000. Haider Ali M/s Trolly Corporation Mr.025 691 16.659 715 1.144 4.11.O.489 487 1.047 96 1. Haider Ali Mr.143 359 Mode of Disposal Particulars of purchaser Leasehold Improvements Renovation work Renovation work Renovation work Items having book value of less than Rs 250.000 or above Details of disposal of fixed assets having cost of more than Rs.679 5.786 47.642 7. Haider Ali Mr.394 512 50 531 1. 250.December 31.000 or net book value of Rs. Haider Ali M/s Bahum Associates (Pvt) Ltd Mr.804 6.324 1.859 2.033 1.430 1.517 353 1.291 950 1.032 17.783 89.619 5.519 19.212 38.075 18.266 1.000 or cost of less than Rs. 2010 * Insurance Claim Write Off Write Off Various M/s Alfalah Insurance Company Limited (Related party) N/A N/A Various M/s Alfalah Insurance Company Limited (Related party) Various Insurance Claim 4.677 1. Azmatullah Khan Mr.094 20. 1.324 1.000 1.078 423 1.E.024 3.643 77.142 362 1.000 or above are given below: Description Accumulated Net book Sale depreciation value proceeds ------------------------(Rupees in '000)------------------------Cost 2.399 3.078 712 1. Aamir Anayat Mr.000 Furniture and fixtures Furniture & Fixture Items having book value of less than Rs 250. 1.795 27. ANNUAL REPORT 2011 142 .045 2.203 1.000 1. 1.657 1. Haider Ali Mr. Sarfaraz Ahmed Various M/s End 2 End Supply Chain Limited Mr. Sirajuddin Aziz (former C.000 or cost of less than Rs. Sirajuddin Aziz (former C.125 712 2. Shahid Nafees Mr.000.713 1.033 1.000.000 Vehicles Land Criuser Jeep Honda Civic Honda Civic Prado BMW Honda Civic Honda Civic Items having book value of less than Rs 250.008 1.093 17 297 452 344 425 470 607 297 868 498 3.257 605 866 945 2.194 30.008 620 1.890 32.991 8.221 1.125 380 2. 1.000 Office equipment Air Conditioner Diesel Generator Diesel Generator Diesel Generator Diesel Generator Diesel Generator Diesel Generator Diesel Generator Diesel Generator Diesel Generator Items having book value of less than Rs 250.O.540 22.759 2.677 1.681 49 5. 250.000.000 Computers POS Switch Computers Computers Items having book value of less than Rs 250. Haider Ali Mr. 2011 Total .016 2.003 76. 1.780 12.000.183 99. 1.035 1.E.923 3.583 361 185 546 289 34 345 201 100 332 405 384 1.686 1.December 31.352 1.067 1.871 748 8.532 Various Insurance Claim Bid Various M/s Alfalah Insurance Company Limited (Related party) M/s Muzaffar Computers Chiniot Various M/s Malik Refrigeration Mr.650 15.376 1.376 1.4 Details of disposal of fixed assets having cost of more than Rs.404 2.000.

943 137 111.520.869 2.314) (993.460) (97.932) 12.948 353.368 1.879.993 18.2 635.469 364.150 354.Note 2011 2010 12 DEFERRED TAX ASSETS / (LIABILITIES) Deferred debits arising due to Provision for doubtful debts Provision against off-balance sheet obligations Impairment in the value of investments Loss on remeasurement of held for trading investments Unrealised loss on revaluation of investments classified as held for (Rupees in „000) 1. 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 Provision held against other assets 13.873.017. 374.460 18.768.424.374.531 17.325) 11.322.3 Provision held against other assets Opening balance Charge for the year Reversals Amount written off Adjustment Closing balance 13.899 15.445 17.753 13.996 665.945.026 354.612 254.062 1.109 2.410.016 94.548) (1.194) (1.270.046 314.958 76.693 (4.910 3.265 283.793.738.109.506 (3.3.706 150.916 635.691 93.3 13.266 585.670 541.501.910) (1.832) (635.901.48 million (2010: 393.770 27.109 1.949 1.472 1.470 (423.1 13.797 407.265 258.932 ANNUAL REPORT 2011 143 . deposits.3.472 327.795.989 trading / transferred from held for trading to available for sale Deficit on revaluation of securities Deferred credits arising due to Difference between accounting book value of leased assets and lease liabilities Accelerated tax depreciation Gain on remeasurement of held for trading investments Surplus on revaluation of securities Surplus on revaluation of operating fixed assets 13 OTHER ASSETS Income / mark-up accrued in local currency Income / mark-up accrued in foreign currencies Advances.1 Market value of assets acquired in satisfaction of claims (386.273 141.2 13.922. 13.740 1.306.108) 421.674 113.427) (2.742 12.599 15.311) (694.417) (2.538 1.745 839.850 1.932 184.670) 13.1 & 13.043 99.306.411) (839.068.742 274.847 million).2 This is net off unrealised loss on forward exchange contract of Rs.155) (710.372 111.711 543.

1 Particulars of borrowings with respect to currencies In local currency In foreign currencies 15.598.4 15.366 million (2010: Rs 93.670.025 2.297 213.533 15 BORROWINGS In Pakistan Outside Pakistan 15.700.498.713 2. 2011 2010 (Rupees in „000) 14 BILLS PAYABLE In Pakistan Outside Pakistan 5. The Group has initiated legal proceedings against this employee and has also taken necessary steps to further strengthen the internal control system.352.098.007 2.561 9.403.265 18.099 2.124 15.025 2.124 ANNUAL REPORT 2011 144 .5 15.713 2.113 51.7 15.602.099 13.198 336.4) also include claims amounting to Rs 39.593 15. claims against the Group not acknowledged as debt (note 21.978 9.098.978 11.465 11.981.3 15.442 302. 13.300 11.453 4. In addition.480.700.1 This includes an amount of Rs.098.258 27.168.2 This also includes provision of Rs 132.700.150.602.099 13.025 2.978 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 Financing Facility for Storage of Agriculture produce (FFSAP) Repurchase agreement borrowings Unsecured Call borrowings Overdrawn nostro accounts 15.801.265 18.6 15.670.168.713 2.13.64 million in respect of customers alleged to have been involved with such employee.748 5.620 1.339 4.168.571.098.3.663 157.099 13.602.040 million) recognised during the year on account of impairment in the value of asset acquired in satisfaction of claims.340 5.498.570.3.8 8.358.265 18.400 million (2010: Nil) in respect of fraud and forgery claims relating to fraudulent transactions carried out by an employee of the Group.521.124 15. 9.851 727.194 163.

50% per annum payable on a quarterly basis.010.156 141.Quoted.817. The mark-up rate on this facility is 6. The mark-up rate on this facility ranges from 4.675 284.30% per annum) maturing by January 2012 (2010: January 2011).00% per annum (2010: 7. 15.1 Particulars of deposits In local currency In foreign currencies 336.50% per annum (2010: 6. 2011 16 2010 DEPOSITS AND OTHER ACCOUNTS Customers Fixed deposits Savings deposits Current accounts .00% per annum) payable on a quarterly basis.120 Base Rate + 1.00% per annum) payable on a quarterly basis.957 69.733 354.912 401. 15.4 This facility is secured against a demand promissory note executed in favour of the State Bank of Pakistan.3 This facility is secured against a demand promissory note executed in favour of the State Bank of Pakistan.785 401.760.00% to 10.00% per annum) payable on a quarterly basis.50% to 9. 15.668.00% to 5.472.62% per annum (2010: 12.879.8 This represents repurchase agreement borrowings from other banks at rates ranging from 11.50% to 13.60% per annum) payable on a quarterly basis.690 16.247.503.15.421 371.50% to 8.690 17 SUB-ORDINATED LOANS Term Finance Certificates II .292 258.847.207 119. The mark-up rate on this facility ranges from 7.313 354.5 This facility is secured against a demand promissory note executed in favour of the State Bank of Pakistan.555 96.435.6 This facility is secured against a demand promissory note executed in favour of the State Bank of Pakistan.40% to 11.743 123.888.675 102.350.930.570 4.341.021 31.314.377 30. Unsecured Mark up 831.00% to 8.890 28.962. The mark-up rate on this facility is 6.697 4.597 580. 15.7 This facility is secured against a demand promissory note executed in favour of the State Bank of Pakistan.130 1.188 29.427.245.010.317.245. 15.60% per annum (2010: 4.018.918 322. The markup rate on this facility is 10.non-remunerative Others Financial institutions Remunerative deposits Non-remunerative deposits (Rupees in „000) 101.992.50 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) ANNUAL REPORT 2011 145 .763 64.00% per annum (2010: 6.

Note 2011 2010 (Rupees in „000) Subordination The TFCs are subordinated as to the payment of principal and profit. November 2013 4.072 Base Rate + 1.Private.321.Floating coupon of Base Rate + 2. December 2004 AAEight years 3 equal semi-annual installments commencing 84th month after the issue date.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.192 Issue date Rating Tenor Redemption Maturity Mark up Term Finance Certificates III .322.50 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 for mark up due at the end of that period) .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 for 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.000 Either of the following options with the holder: .148.563 1. December 2017 7.693 7. Unsecured Subordination Issue date Rating Tenor Redemption Maturity Mark up Term Finance Certificates IV .996. November 2005 AAEight years 3 equal semi-annual installments commencing 84th month after the issue date.000 4. the TFC holder will rank below the senior unsecured creditors and depositors and other creditors of the Bank. December 2012 1.567. Unsecured Subordination Issue date Rating Tenor Redemption Maturity ANNUAL REPORT 2011 146 . In case of occurrence of default.998. December 2009 AAEight years 3 equal semi-annual installments commencing 84th month after the issue date.Quoted.

18 LIABILITIES AGAINST ASSETS SUBJECT TO FINANCE LEASE 2011 Not later Later than Over than one one and less five year than five years years ----------------------------------------------------------- Total Not later than one year 2010 Later than Over one and less five than five years years Total (Rupees in '000)--------------------------------------------------------- Minimum lease payments Financial charges for future periods Present value of minimum lease payments 1.000.015 48.000 23.947 3.1 Authorised capital 2011 2010 (Number of shares) 2.328 3.032 3.539 260.066 10.547 109.000 23.498 443.910 Note 2011 2010 (Rupees in „000) 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 Current taxation Payable against redemption of credit card reward points Security deposits against leases Exchange difference payable to the State Bank of Pakistan Payable to brokers Provision against off-balance sheet obligations Workers' Welfare Fund Others 3.733 304.000 Ordinary shares of Rs.1 This represents amounts payable to brokers against purchase of shares.646 (736) 5.715 238.160 221. 10 each ANNUAL REPORT 2011 147 .207 SHARE CAPITAL 20.541. 19.300.357.207 51.733 37.056 44.912 514 44.368 (40) 1.000 2.044 19.300.811 19.474.547 4.803.2 29.400 206.000.124.268 1.878 - 6.097 19.090 111.623 528 6.397 3.207 4.328 - - 1.898 995.068 (190) 2.526 48.122.578 (546) 3.1 19.000.1 19.529 595.081.356 30.2 Provision against off-balance sheet obligations Opening balance Exchange adjustment Charge for the year Closing balance 20 44.533 9.000.368 (40) 1.165 457.

247.491.156.406.796 (15.during the year 6.063 13.496.406.20.194) 710.545 3.349.247.244.250 1.756.750.250 724.875 2.2 2.990) 636 7.750.128 (316.063 7.NET OF TAX Surplus / (deficit) arising on revaluation of: .2 Issued.250 724.247.985) 2.500 7.786.750.433 31.Fixed assets .000 624.247.695) (15.during the year Issued as bonus shares .406.533.500 7.990) 694.156.990) (15.244.786.000 724.788.Available for sale securities 21.563 6.989 (37.060) 3.1 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 Reversal of deficit on account of disposal of property Other reversal 3.349.1 21.063 13.250 1.417 2. subscribed and paid up capital 2011 2010 2011 2010 (Number of shares) (Rupees in „000) 624.143 21.860 710.500 6.750.563 21 SURPLUS ON REVALUATION OF ASSETS .990) (13.at the beginning of the year .496.128 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 REPORT 2011 148 .990) (45.433 (29.545 723.000 724.500 6.308 2.605 (29.685) 3.491.at the beginning of the year .244.417 (15.469. 10 each Fully paid in cash .063 7.427 2.756.244.695) (15.450.250 624.611 2.406.250 Ordinary shares of Rs.000 624.

311) 180.4 Other contingencies Claims against the Group not acknowledged as debts 22.062 4.110 836.217.1 Direct credit substitutes i) Government ii) Banking companies & other financial institutions iii) Others 743.030 (97.213.734.classified as 'available for sale' (148.505 54.2011 2010 (Rupees in „000) 21.204 46.369 31.538 (207.261.227.903 875.219 4.036 10.235) (30.345.411) 296.844) 31.837 49.077 58.845) (316.073 18.101 5.575.140) Share of deficit on associates' investments .612.607.342 6.075 ANNUAL REPORT 2011 149 .422) (23.489 6.281 278.080.587 (1.026 11.985) 22 CONTINGENCIES AND COMMITMENTS 22.482.125.198) (616.446 28.847 2.847 22.192.710 39.847 22.2 Surplus / (deficit) on revaluation of available for sale securities Deficit on: Government securities Sukuk bonds Surplus on: Quoted shares / units / certificates Term finance certificates Related deferred tax (liability) / asset (26.347 1.875 (109.619) (318.738.2 Transaction-related contingent liabilities i) Government ii) Banking companies & other financial institutions iii) Others 35.5 Commitments in respect of forward lendings Forward repurchase agreement lendings Commitments to extend credit 2.972 2.238.791.3 Trade-related contingent liabilities Letters of credit Acceptances 22.678) 111.697 783.719 329.029.200.386 3.

However.061 250.710 6.9 Other commitments Donations 22.8 Commitments in respect of repo transactions Repurchase Resale 22.10 Contingency for tax payable (note 30.726. intra-day and overnight limits.6 Commitments in respect of forward exchange contracts Purchase Sale 22.595 32. In addition to this.7 Commitments for the acquisition of fixed assets 22. dealers.1) 23 DERIVATIVE INSTRUMENTS The Group at present does not offer structured derivative products such as Interest Rate Swaps.780 1.734.495.339 5. the Group's Treasury buys and sells derivative instruments such as: 29.118.181 1.000 - Forward Exchange Contracts Foreign Exchange Swaps Forward Exchange Contracts: Forward exchange contract is a product offered to customer backed by international trading contract. These customers use this product to hedge themselves from unfavorable movements in foreign currencies.2011 2010 (Rupees in „000) 22.402 - 11.142 22. ANNUAL REPORT 2011 150 . the exposure is also managed by matching the maturities and fixing the counter parties.812. Exchange rates and forward margins are determined in the "interbank" market and fluctuate according to supply and demand. Foreign Exchange Swaps: A Foreign exchange Swap (FX Swap) is used by the Group 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.707.873.614 20. In order to mitigate this risk of adverse exchange rate movements the Group hedges its exposure by taking forward position in the inter bank market.732 144. Forward Rate Agreements or FX Options.936.

727 64 1.NET Federal Government Securities .320 395.676.578 26 GAIN ON SALE OF SECURITIES .337 24.239.365 802 25.1 These include mark-up earned of Rs.109.352 1.146 203.261 5.991 7.708 181.177) 374.834 1.220 1.710 1.440 65.897 7.594.043 863.018 5.551 426.530. 24.665 67.067.635 374.590 326.642 6.131 million (2010: Rs.024 149.550 12.405 23.179 678.473 665.062.679.111 64.771.085.Note 2011 2010 (Rupees in „000) 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.Market Treasury Bills .062 195.356 (924.listed Sukuk Bonds Term Finance Certificates 59.569 2.166.987 million) which pertains to the Group's Islamic Banking Division.400 7.665 9.402 1.404.648 142 37.Pakistan Investment Bonds Shares / units .298.2 Profit earned on ijarah assets Lease rentals earned Depreciation for the year 1.923.483) 209.648 25 MARK-UP / RETURN / INTEREST EXPENSED Deposits Securities sold under repurchase agreements Other short term borrowings Term Finance Certificates Brokerage and commission Financial Charges 21.688.156.131 (468.273.2 25.896.854. 8.287 18.398 24.409. 4.785 209.179 113 44.371.169 ANNUAL REPORT 2011 151 .998 1.836 625.

707.7 36 28.382 1.1 9.411 ANNUAL REPORT 2011 152 .860 1.200 3.819 13. telex service charges etc.032 173.000 11. travelling and subscription Others 49.230 2.880.210 5.021 35.730.569 4.570 4.847 28 ADMINISTRATIVE EXPENSES Non executive directors fee & allowances Salaries. Larkana Publician Alumni Trust .1 28. etc.729 183.339 497.858 190.054 11.000 27.275 2.277.883.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.720 850 720 11.677 899 11.361 15.203 145.165 76.196 806.1 Donations Marie Adelaide Leprosy Center. insurance. taxes. electricity.968 10.239 230.780.916 25.202 1.612 221.231.303.2 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 29.000 5.300 662.Note 2011 2010 (Rupees in „000) 27 OTHER INCOME Gain on sale of fixed assets Postage.201 14. allowances.555 1.975 226. Charge for defined benefit plan Contribution to defined contribution plan Rent.665 5.314 154 602 1.751 5.510 1.631. 28.000 2.931 25.599 454.423 27.658.672 383.720 16.246 1.627 298.401 877.299 12.693 189.2 11.693 735.090 1.2 11.833 363.018.073 199. etc. vehicle running expenses.570 14.033 99.283 16. Provision no longer required written back Custody services Commission on sale of Term Finance Certificates 20.569 1.600 29. 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.379 177.502 196.3 28.000 10.500 51.585 137.286 720 11.377.411 1.034 5.

057. Matters of disagreement exist between the Bank and the tax authorities for various assessment years and are pending with the Commissioner of Inland Revenue (Appeals). 2006.056) 217. 141.151 1.639) . which provides that return filed is deemed to be an assessment order. the tax authorities have disallowed certain expenditure on account of non-deduction of withholding tax resulting in additional demand of Rs.155 276. 2007.789 (58. 1971. 2011 2010 30.316 (1. 2010 & 2011 have been filed under the Universal Self Assessment Scheme.226 million.103 2.357 19943 11. The Income Tax Commissioner may amend assessment if any objection is raised during audit.199 1.2 Subsidiary The income tax returns for tax years 2005. bad debts written off and disallowances relating to profit and loss expenses.127 Effect of: .927 17.569) (831.share of profit / loss of associates either exempt from tax or taxed at reduced rates (8. For all assessments finalised upto the tax year 2010. In respect of tax year 2010.1 Bank The income tax assessments of the Bank have been finalised upto and including the tax year 2010.1 As per the Worker's Welfare Ordinance.378.559 (71.470 .3 Relationship between tax expense and accounting profit Profit before taxation Tax at the applicable rate of 35% (2010: 35%) (Rupees in „000) 5.932 1.110 722. The returns maybe selected for detailed audit within five years.265.others 18.tax for prior years (831. 2008 & 2009.income chargeable to tax at reduced rates (43.29.140) .056) (152. whichever is higher.735) 898.263 Tax expense for the year ANNUAL REPORT 2011 153 . 2011 30 2010 (Rupees in „000) TAXATION For the year Current Deferred For prior years Current Deferred Share in tax of associates 3.127 30.057.065.263 845.permanent differences 17.081 (71.884. adequate provision has been made by the Bank in these consolidated financial statements.521) 38. Income Tax Appellate Tribunal (ITAT) and High Court of Sindh.383.070) (245.639) 1. the Group is liable to pay Workers' Welfare Fund @ 2% of its accounting profit before tax or declared income as per the income tax return.129 898.997 .Deffered tax asset not recognised 9. 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.137) 191.tax charge pertaining to overseas branches 10. The management's appeal in respect of this add-back is currently pending with the Commissioner of Inland Revenue (Appeals).346) (586. 30.763 (262. taxability of profit on government securities. These issues mainly relate to addition of mark-up in suspense to income.315) .588 .

773.509 (964.662 17. was used for the valuation of the defined benefit plan: 2011 2010 Discount factor used Expected rate of return on plan assets Expected rate of salary increase Normal retirement age 35.208.268 (677. 2011 2010 (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 6.333.156 Basic / Diluted earnings per share 3.2011 2010 (Rupees in „000) 31 BASIC / DILUTED EARNINGS PER SHARE Profit after taxation for the year attributable to equity holders of the Parent 4.840) - 1.BANK ALFALAH LIMITED 35.424. 2011.00% 60 Years 2010 (Rupees in „000) 1.841 16.903 62.543 10.533 4.152.2 Reconciliation of payable to defined benefit plan Present value of defined benefit obligations Fair value of plan assets Net actuarial losses not recognised 12.50% 12. using the following significant assumptions.002.715 1.180.349.647.931 649 7.524 1.197.007) 69.123 6.277 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 2011 (2010: AA [Double A]) for long term and A1+ [A one plus] for short term).876 695 7.838) - ANNUAL REPORT 2011 154 .1 Principal actuarial assumptions The latest actuarial valuation of the Bank's gratuity scheme was carried out as at December 31.156 (Rupees) 1.580 2.349.927.194.50% 12.50% 60 Years 2011 14.21 2011 (Rupees in „000) 0.00% 14.00% 12.355 (27.553 (Number of shares in thousand) Weighted average number of ordinary shares 1. Projected unit credit method.438 10.882.669) (243.571 2.534 41.009 35 DEFINED BENEFIT PLAN .89 2010 32 CASH AND CASH EQUIVALENTS Cash and balances with treasury banks Balances with other banks Call money lendings Overdrawn nostro accounts 50.430) (324.

820 274.168 677.838) (5.292) 56.Note 2011 2010 (Rupees in „000) 35.272 352.292 230.097) (193.535) Experience adjustments on plan liabilities (23.430 230.4 Movement in fair value of plan assets Fair value at the beginning of the year Expected return on plan assets Contributions Benefits paid Actuarial gain / (loss) on plan assets Fair value at the end of the year 35.317 (73.632) ANNUAL REPORT 2011 155 .563) 132.153 18.654) Experience adjustments on plan assets (68.811 (269.415 (44.7 Charge for defined benefit plan Current service cost Interest cost Expected return on plan assets Actuarial losses 35.403 97.995 153.823 387.002.502 129.499 (217.379) - 115.430 81.791 2010 2009 (Rupees in '000) 2008 -------------------------------- 125.423 92.212) (2.509 1.730 (3.207 112.415 (97.203) (87.324 140.346 468.254 145.840) (324.379 (145.8 Actual return on plan assets 35.369 546.317 (81.207 112.502) - 145.430 (243.847 163.589 964.002.497) 5.135) 2007 Defined benefit obligation Fair value of plan assets Deficit 1.054) 23.502 (73.654 1.217) (217.430 64.669 696.935) 737.669 677.153 230.502 (230.538 107.509 802.6 Movement in payable to defined benefit plan Opening balance Charge for the year Bank's contribution to fund made during the year Closing balance 35.897 1.264 20.208.499 964.966 696.379 (44.268 964.394) (28.497 145.3 Movement in defined benefit obligation Obligations at the beginning of the year Current service cost Interest cost Benefits paid Actuarial gain on obligation Obligations at the end of the year 35.669 104.9 Historical information 2011 -------------------------------- 1.635 109.966 125.002.403 (106.632) 677.5 Plan assets consist of the following: Ordinary shares Term Finance Certificates Term Deposit Receipts Pakistan Investment Bonds Units of mutual funds Cash and bank balances 35.673) 48.897) 802.217) 5.268 115.379 (120.208.844 144.054) 48.268 677.324 140.

between knowledgeable willing parties in an arm's length transaction.201 993 858 Number of persons * This includes Rs 69.034 49.36 DEFINED CONTRIBUTION PLAN The Group operates an approved provident fund scheme for all its permanent employees to which both the Group and employees contribute @ 8.824.501 212 228 2. 38 FAIR VALUE OF FINANCIAL INSTRUMENTS 38.4 to these financial statements.916 356. 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.082 83.142 132.044 379.106 1.619 4.751 4 279.505 2 49.581 1.918.599 1.034 4 15. the Group contributed Rs. or a liability settled.917 1. ANNUAL REPORT 2011 156 .751 15. 37 COMPENSATION OF DIRECTORS AND EXECUTIVES Chief Executive 2011 2010 ---------------------------------------- Directors 2011 2010 (Rupees in '000)---------------------------------------- Executives 2011 2010 Fee Bonus Managerial remuneration Post employment benefits Rent and house maintenance Utilities Medical allowance 12.230 million (2010: Rs.1 Fair value is the amount for which an asset could be exchanged. These securities are being carried at amortised cost in order to comply with the requirements of the State Bank of Pakistan. effective rates and maturity are stated in note 43 to these financial statements.150 35 29. In the opinion of the management.244 44.045 91. The Chief Executive and certain Executives have been provided with the free use of cars and household equipment as per the Group's policy.802 154.386 74.755 1.185 11.785 million as exgratia bonus paid to the former Chief Executive Officer on cessation of employment.999 261.553 1. 196. 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 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. Fair value of fixed term loans. Sub-ordinated loans are carried at redeemable face value as there is no requirement to revalue these under the accounting standards as applicable in Pakistan. The fair value of traded investments is based on quoted market prices.939.388 38 137. The repricing profile. During the year. 177.33% of basic salary in equal monthly contributions.611 3 10.275 million) in respect of this fund. other assets.105.002 5. except for tradable securities classified by the Group as 'held to maturity'. The provision for impairment of loans and advances has been calculated in accordance with the Group's accounting policy as stated in note 5.

849 9.903 49.378.213.734.933 3.net Forward sale of foreign exchange .499.41% 11.net 39 29.161 3.061 20.864 28.058 411.561.803.882 .698 162.071 Segment non-performing loans 122.561. associated companies with or without common directors.434.063 8.962 26.065.110 132.483 390.952 12.952 19.524 5.304.538 44.707.383.816.815 Segment assets 22.151 82.788 534.683 1.662.855. including mark-up rates and collateral. Banking transactions with the related parties are executed substantially on the same terms.742.345.002 468.558.864 53.047.66% 13.124 SEGMENT DETAILS WITH RESPECT TO BUSINESS ACTIVITIES The segment analysis with respect to business activity is as follows: Trading & Sales ------------------------------ Retail Banking 2011 Corporate / Commercial Banking Rupees in '000------------------------------ Retail Brokerage Total 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 (%) 14.140.442.047 1.936.732 23.539 8.084 422. ANNUAL REPORT 2011 157 .338 42.730 26.06% 16.948 380.82% 12.576 32.258 Segment provision required against loans and advances Segment liabilities 21.227.437.747 (17.898 51.683 365.55% 14. it acts as security agent for various Term Finance Certificates it arranges and distributes on behalf of its customers.532.614 534.935 22.614 32. retirement benefit funds and directors and key management personnel and their close family members.421 Net income 151.124 86.434.07% 10.145.98% 2.230.479.369.108.878.635) 5.43% 15.195 15.2011 2010 Book value ------------------------------ Fair value Book value Fair value Rupees in '000------------------------------ 38.670.074.142 30.652 4.837 2.246.045 20.563 3.2 Off-balance sheet financial instruments Forward purchase of foreign exchange .820 4.871 1.873.450.848.963 654.031 20.523.236 Total expenses 9.399 282.89% Retail Brokerage Total Total income 9.361.73% Segment cost of funds (%) 9.598 40.30% 4.913 342.139.33% 40 TRUST ACTIVITIES The Group is not engaged in any significant trust activities.333.452 25.47% 12.441 17.825 29.574. However.089 715.324.047.525.448 57.184. 41 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.381 13.771.014 (29.246.820 14.589.839.65% Retail Banking 2010 Corporate / Commercial Banking Rupees in '000------------------------------ 33.570 98 10. Remuneration to executives is determined in accordance with the terms of their appointment.925.155.377 442.553.872 23.096.034 Segment return on assets (ROA) (%) 10.689 23.517.873.260) 2.93% Trading & Sales ------------------------------ 4.430 11.199.03% 10. as those prevailing at the time for comparable transactions with unrelated parties and do not involve more than a normal risk.032 13.693. 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.

162) 4.416.932.891 (19.014 2.256 148.053 1.095 (62.162 10.18.924 57.591 32.613 18 18 2.057.3 Investments Balance at the beginning of the year --------------------------------------- (Rupees in '000)------------------------------------- Investments during the year Redemptions / Adjustment during the year Balance at the end of the year Provisions held against investments - - 50.000 1.986 4.261 (97.000 1.960.741.033.332 (49.727 2011 41.897) (1.000 1.769 (263.741.776.435 - - 2.392) 400.110.769.704) 2.298.804) 50.1 Investments Others 41.949 20.531 11.(460.448.304.930) (196.000 6.377 Provisions held against investments ANNUAL REPORT 2011 158 .227.509) (11.631.952 526.000 1.942.377 120.991 1.000 5.815) (732.622.012 .949 20.113) (530.856.575 917.053 162.955 2.563 - 120.360 56.073.856.028 (75.429) 1.2 Advances Balance at the beginning of the year Disbursements during the year Repayments / Adjustments during the year Balance at the end of the year --------------------------------------- (Rupees in '000)------------------------------------- 9.755) (45.189) (56.424.563 2010 --------------------------------------- (Rupees in '000)------------------------------------- Balance at the beginning of the year Investments during the year Withdrawals during the year Balance at the end of the year - - 253.603 756.730 82.014 2011 41.187 (11.267.617) 3.138 2010 --------------------------------------- (Rupees in '000)------------------------------------- Balance at the beginning of the year Placements during the year Withdrawals during the year Balance at the end of the year 7.747) 2.418 1.914 60.000 5.626 40.686 400.(10.939) - 149.848.255 2.2011 Group / Key Strategic Directors Management Associated Associates Personnel companies / note 9.589 (4.117.787 1.960) 1.227.544 18 18 1.013.476 .973) 149.161 5.427 120.10.727 77.1 Deposits Balance at the beginning of the year --------------------------------------- Total (Rupees in '000)------------------------------------- Placements during the year Withdrawals / Adjustments during the year Balance at the end of the year 28.534.707 (10.686 400.591.479.616 (1.883.748.986 7.256 148.000 1.000 5.000 5.613 19.024.847.294 (2.355) 94.787 44.339) 9.769 .096 26.126 2.000 5.362 60.300.734) 120.390 44.769.686.189.753 60.232 1.879.949 60.659.550.519.819.564 122.096 - 2.064) 28.096) 126.256.718.959 1.232 90.787 44.686.101) (594.947 (61.949 1.741.448.561 2010 --------------------------------------- (Rupees in '000)------------------------------------- Balance at the beginning of the year Disbursements during the year Repayments during the year Balance at the end of the year 7.297 606.885.794.778.300.796 (57.

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 --------------------------------------- (Rupees in '000)------------------------------------- - - 10.578 ANNUAL REPORT 2011 159 .Other related parties 1.236) - 2010 --------------------------------------- (Rupees in '000)------------------------------------- Balance at the beginning of the year Borrowing during the year Repayments during the year Balance at the end of the year - - 1.(9.334 .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 - - 9.511) - - 100.7 Contingencies and commitments Letters of credit and acceptance outstanding Guarantees outstanding 242.1 Investments Others --------------------------------------- Total (Rupees in '000)------------------------------------- 41.798 973.000 13.602.280.207.918 41.511 .260) - - .702.926 .6 Advances Running finance .511 (13.198.741.334 (33.(33.236 (9.096 626.31.260) - 2011 41.690 165.913 27.1.000 .(10.280.Other related parties Long term loans .(13.280.890.236 .18.203 .602.203) - 2010 --------------------------------------- (Rupees in '000)------------------------------------- Balance at the beginning of the year Placements during the year Withdrawals during the year Balance at the end of the year - - 100.207.2011 Group / Key Strategic Directors Management Associated Associates Personnel companies / note 9.9.098.198.125 558.702.203 (10.198.436 1.236) - - .798.926 31.890.280.098.198.203) - - .511) - Note 2011 2010 (Rupees in „000) 41.13.10.

570 64.18.Other related parties 41.275 53.1 40.304 20.512 245.296 In addition.18.524 1.892 173.271.10 With associates Insurance premium paid to Alfalah Insurance Company Limited Rent income from Alfalah Insurance Limited Capital loss on redemptions of units of Alfalah GHP Income Multiplier Fund Mark-up income on advances Mark-up expense on deposits 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 .note 9.note 9.18.note 9.279.963 62.18.553 1.964 363.126 36.Other related parties Fixed deposit accounts .671 442 196.610 322.353 5.Balance with United Bank Limited 40.000 577.096 2.689 2.978.191 80.Note 2011 2010 (Rupees in „000) 41.230 136.11 With other related parties Mark-up income on advances Rent income from Warid Telecom (Private) Limited 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 .502 80.1 Provision made during the year in respect of investment in Wateen Telecom Limited .230 230.9 Balances with other banks .476 2.757 318.153 130.8 Customer accounts PLS accounts .641 177. the Chief Executive and certain Executives are provided with Bank maintained car and other benefits. ANNUAL REPORT 2011 160 .304 930.076 336.359 839.794 1.089 70.824 113.12 The key management personnel / directors compensation are as follows: Salaries and allowances Advance against salary 630.639 91.note 9.Other related parties Current accounts .916 1.861 112.705.1 Provision made during the year in respect of investment in Wateen Telecom Limited .1 Capital gain on sale of shares of United Bank Limited Loss on redemption of units of UMMF / UGIF Contribution to employees provident fund Contribution to Gratuity fund Provision made during the year in respect of strategic investments Mark-up income on financing to group company 40.112 3.

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. It is the policy of the Group to maintain a strong capital base so as to maintain investor. reserves (excluding foreign exchange translation reserves) and unappropriated profits (net of losses) etc. market risk and operational risk. government securities. share premium.42 CAPITAL ADEQUACY 42. are used as credit risk mitigant after applying appropriate haircuts under the Comprehensive Approach. 50% of other deductions e. using Basel II standardised approaches for credit and market risks and basic indicator approach for operational risk is presented below. calculated in accordance with the State Bank of Pakistan's guidelines on capital adequacy. the exposures are treated as unrated and relevant risk weights applied.1 Capital Management The objective of managing capital is to safeguard the Group's ability to continue as a going concern. Goals of managing capital The goals of managing capital of the Group are as follows: . foreign exchange translation reserves etc. Collaterals if any.Maintain strong ratings and to protect the Group against unexpected events. cash. bank and corporate guarantees and other debt securities that fall within the definition of eligible collaterals and also fulfill other specified criteria under the relevant capital adequacy guidelines. general provisions for loan losses (up to a maximum of 1. External ratings for assets. In addition. where available. are applied using the assessments by various External Credit Assessment Institutions (ECAIs) and aligned with appropriate risk buckets. The Group currently does not have any Tier III capital. lien on deposits. 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. Collaterals used include: Government of Pakistan guarantees. The total of Tier II and Tier III capital has to be limited to Tier I capital. The calculation of Capital Adequacy enables the Group to assess the long-term soundness. Tier II capital.To be an appropriately capitalised institution.. The total risk-weighted exposures comprise the credit risk. As the Group carries on the business on a wide area network basis. Tier III supplementary capital. On and off-balance sheet assets in the banking book are broken down to various asset classes for calculation of credit risk requirement. . so that it could continue to provide adequate returns to shareholders by pricing products and services commensurately with the level of risk. 2011 The capital to risk weighted assets ratio. There has been no material change in the Group‟s management of capital during the year. 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. Risk weights notified. majority and significant minority investments in insurance and other financial entities. 50% of other deductions noted above are also made from Tier II capital.g. considering the requirements set by the regulators of the banking markets where the Group operates. 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). creditor and market confidence and to sustain future development of the business. which consists of short term subordinated debt solely for the purpose of meeting a proportion of the capital requirements for market risks. which includes fully paid -up capital. 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.2 Capital adequacy ratio as at December 31.25 % of total risk weighted assets). shares. wherever credit risk mitigation is available. 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. ANNUAL REPORT 2011 161 . Otherwise. 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. Group‟s regulatory capital analysed into three tiers Tier I capital. after deductions for certain specified items such as book value of intangibles. 42. gold. are hence applied at adjusted exposures.

312) 13.431 4.1(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 1.386.2011 2010 (Rupees in „000) Regulatory capital base Tier I capital Fully paid-up capital Balance in share premium account .570) (694.435 2.491.418) 13.675) (262.833.821 (10.961.563 3.001 (128.491.237.610 858.132 (72.855.610 25.611.534.380 29.909 627.933 (118.195 (11.567) (6.332) (6.382.553 (118.915) ANNUAL REPORT 2011 162 .406 1.739 667.598.506 5.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 Reciprocal investments in collective investment schemes managed by associated asset management company Deductions in respect of investment in TFCs of other banks in excess of limits prescribed in Appendix 1.693) (27.380.661.238.021 438.522 1.578) 21.066) (675.625.968.25% 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) (128.146) 8.146) 17.578) 7.563 1.758 5.

456.637 5.987.680 504.454.815.945 31.039 5.310 2.200 397.704.178 1.465 1.061 251.953.237.043.990 59.298.525 1.167 445.238 524.804 412.692 2.122.665 4.281.174 3.960 357.176.075 143.625.498 10.451.65% 10.081.104.347 386.591.068 33.749 9.668 12.Capital requirements 2011 2010 Risk Weighted Assets 2011 2010 ------------------------------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 42.440 17.446 11.355. 2009 has accorded approval to the Bank for use of ratings assigned by these agencies. The Group uses these ECAIs to rate its exposures denominated in Bangladeshi currency on certain corporates and banks incorporated in Bangladesh.556.450 3.659.813 399.225 2.693.933 25.384.666.664.322 (a) (b) [ a / b * 100 ] 29.742 302.669 208.521 108.007 745.313.647.352 10.210. BSD/BAI-2/201/1200/2009 dated December 21.431 251.481 3.847.252 13.313.645 108.28% PACRA - S&P Moody’s Fitch CRAB & CRISL^ - Sovereigns other than PKR claims PSEs Banks Corporates ü ü ü ü ü ü ü ü - ü - ü - ü - ü - ü ü ^The State Bank of Pakistan through letter no.826 32.369.698.220 16.064 569.813 3.896 64.644 1.898.725 129.876.875 743.322 11.613 (b) 24.005.3 Types of exposures and ECAIs used Exposures JCR-VIS 1.976.875 30.471.237 24.471 249.381 16.301 5.496 1.862.675 917.573.707 3.246.469 13.471 249.183 10.690 7. ANNUAL REPORT 2011 163 .021.779 4.849.595 3.040.005.338 811.357.809 35.

010 40. ANNUAL REPORT 2011 164 .804.891.054. Further Bank's existing systems are also being enhanced in line with the growing challenges.537 9.256 144 1.168 6.361 11.356 2. The Bank's focus over the coming years will be to further enhance risk models.467 73. processes and systems infrastructure.895 258.488 47.880.The Board of Directors through its sub-committee called „Board Risk Management Committee‟ (BRMC) oversees the overall risk of the Bank.952 7.935.861.142 983.873.on balance sheet exposures Rating category 4.986 1.493 3.009. .457 37.270.549.252 4.171 983.581. monitoring and control of the credit exposures.4 5.104 4.826.5 1 2 3. assessment.264.012.280 194.971.336 1. monitoring and controlling the various risks and assists the Apex level committee and the various sub-committees in conversion of policies into action.581 50.308 93. market risk.As a policy the reporting line of the risk management function has been kept completely independent of the businesses division.Credit exposures subject to standardised approach .863.260.571 102.488 41.215 19.355 8.5 Exposures 2011 Amount Deduction Net outstanding CRM* amount 8.103.190.355 8.696.FCY claims less than three months Banks .091. An independent risk review function exists at the Bank in the form of Internal Audit Group that reports directly to the Board Audit Committee. The Bank has acquired Temenos T24 banking system as its core banking solution.588 46.132 12.872 240.111 2. Further the discretionary powers have been revamped to include presence of Credit Division even at the lowest level. Moreover.012.098.132 12.969 6.378 1. procedures.507. liquidity risk and operational risk as evidenced by its Board approved “Risk Management Policy" and "Risk Management Manual ". in line with its ambition to bring maximum sophistication to the risk management function.755 6.569.862 200.969 6. Bank is evaluating appropriate systems for risk management.441 87.453 1.361 4.190. significant steps have been taken by the Bank including review / revision of policies.568 2.806.5 1. RMD is the organisational arm performing the functions of identifying.503.3 4.671. rating models and introduction of rating based discretionary powers etc.969 17.352.583.919 11.671 2010 Amount Deduction Net outstanding CRM* amount 4.210 4.6 43 RISK MANAGEMENT The Bank has in place an approved integrated risk management framework for managing credit risk.FCY claims less than three months Banks .003.336 1.2.504.696 46.671.863.684.832.196 7.378 2.010 7.663 11.149 13.179.961.121 310.681 899.615 64. measurement.3 4.411.836.759. measuring.015 42. a key to effective credit risk management is a well thought out business strategy.634 19.960 4.270 13.553.347.159 149.025.971 3.264.488.927. In the Bank's experience.071.386.444. 43.645. The Bank has extensively pursued the implementation of Basel II in the Bank.235 24.797 3.1 Credit risk Credit Risk Management processes encompass identification.441 87.709 4.806.756 11.958 Sovereigns other than PKR claims PSEs Banks Banks Banks .2.PKR claims less than three months Corporates Corporates Corporates Corporates Retail portfolio Unrated Total * CRM = Credit Risk Mitigation 1 1.078.656.543 118. Following is the governance structure and important policies on Risk Management of the Bank: .015 39.801. In order to meet the requirements. for Pillar 2 disclosures ICAAP exercise was also conducted.

sanctioning and review procedures for the purpose of emphasizing prudence in lending activities and ensuring the high quality of asset portfolio. has migrated to Basel II as on January 1. The Head of Credit Risk Department reports directly to the General Manager (GM) . 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. A sophisticated Internal Credit Rating System has been developed by the Bank. The system functionality has been enhanced to provide support to loan origination function and all the Credit Initiation process for Corporate Banking Group. Moreover. 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. adherence to Basel II accord. Special attention is paid by the management in respect of non-performing loans. maturity and large exposure. reliable and valid fashion which will ensure advanced level of sophistication in the Credit Risk measurement and management in the years ahead. The system takes into consideration qualitative and quantitative factors of the counter-party. The adherence to Risk-appetite statement approved by the Board is monitored by RMD. ANNUAL REPORT 2011 165 . industry. The system is continuously reviewed for best results in line with the State Bank of Pakistan‟s guidelines for Internal Credit Rating.Risk Management Division. The implementation of Facility Rating System. Simultaneously. Board Risk Management Committee ensures the Board level oversight of risks embedded in Bank's operations. The System now also has the capability to auto generate alerts on accounts showing weakness in financials and hence requiring a more vigilant monitoring. CMD maintains a Watchlist of such accounts which is generated on a quarterly basis and is also reviewed by RMD. the management has laid down the road-map to move towards the implementation of Basel-II advanced approaches. which shall provide a sophisticated platform for prudent risk management practices. a procedural manual has been developed. A Centralized Credit Administration Division under Operations Group is working towards ensuring that terms of approval of credit sanctions and regulatory stipulations are complied.The Bank. Internal rating based portfolio analysis is also conducted frequently. For credit risk. providing estimated LGD (Loss Given Default). 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 Bank has also developed Facility Rating System in line with SBP‟s guidelines. Its credit evaluation system comprises of well -designed credit appraisal. as per State Bank of Pakistan Guidelines. which is capable of quantifying counterparty & transaction risk in accordance with the best practices. will take place in due course with roll out of the Credit Initiation System in other business groups. 2008 with the standardised approach. geography. transaction structure & security and generates an internal rating vis-à-vis anticipated customer behaviour. Further the compliance of regulatory & internal limits is also monitored and any deviations are ratified from the competent authorities. The Bank manages its portfolio of loan assets with a view to limit concentrations in terms of risk quality. processes have been set for fine-tuning systems & procedures. The GM RMD reports directly to Chief Risk Officer who reports to CEO. constitute the important risk management measures the bank is engaged in for mitigating these exposures. At Bank Alfalah Limited. the system is backed by secured database with backup support and is capable of generating MIS reports providing snapshot of the entire portfolio for strategizing and decision making. Credit Monitoring Division (CMD) keeps a watch on the quality of the credit portfolio in terms of its strengths. which also incorporates a comprehensive system of crosschecks for data accuracy. all documentation including security documentation is regular & fully enforceable and all disbursements of approved facilities are made only after necessary authorization by CAD. weaknesses and vulnerabilities. The system is gradually being rolled out for other business groups as well. As part of prudent practices the Risk Management Division conducts pre-fact validation of major cases from integrated risk point of view while the discretionary powers for Credit has been revamped to incorporate Obligor Risk Rating and presence of Credit Division even at lowest level. Besides assisting the Board of Directors in determining the strategic direction of the Bank by providing them the risk perspective it ensures 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. Proactive credit-risk management practices in the form of Integrated Bank-wide Risk Management and Internal Control Framework. The current focus is on augmenting the Bank‟s abilities to quantify risk in a consistent. The Risk Management Division also monitors the NPL portfolio of the Bank and reports the same to BRMC. Special Asset Management (SAM) Department is functional and handles this responsibility in compliance with the regulatory requirements.

For exposures with a contractual maturity of less than or equal to one year. methodologies and processes for deriving Credit Risk Weighted Assets in accordance with the SBP Basel II Standardised Approach is in place and firmly adhered to. in order to cover the entire exposure Personal Guarantees of Directors are also obtained by the Bank. the security to be taken is defined in the product policy for the respective products. specified securities and pledged commodities. Fitch and Standard & Poors. A detailed procedural manual specifying return-based formats.2. These products are offered in line with the SBP prudential regulations and approved product notes which also deal with types of collateral. collateral is taken in line with the policy. The Bank also offers products which are primarily based on collateral such as shares. the Bank uses the comprehensive approach for collateral valuation.lowest rating is considered.3. 43. JCR-VIS. Housing loans and automobile loans are secured by the security of the property / automobile being financed respectively. The Bank uses external ratings for the purposes of computing the risk weights as per the Basel II framework. The Bank would have the rights of secured creditor in respect of the assets / contracts offered as security for the obligations of the borrower / obligor. the 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. Under this approach. charge on receivables may also be taken.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. short-term rating given by approved Rating Agencies is used.1.43.1 External ratings SBP Basel II guidelines require banks to use ratings assigned by specified External Credit Assessment Agencies (ECAIs) namely PACRA.1.). whereas for long-term exposure with maturity of greater than one year.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. valuation and margining.1 Credit Risk . TDRs. 43. 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. Under TSA banks are allowed to take into consideration external rating(s) of counter-party(s) for the purpose of calculating Risk Weighted Assets. Where there are two ratings available. ANNUAL REPORT 2011 166 . In line with Basel II guidelines. In case of corporate and small and medium enterprises financing. Additional security such as pledge of shares.3.2 Collateral valuation and management As stipulated in the SBP Basel II guidelines. also referred to as „haircuts‟. are reduced from the exposure to compute the capital charge based on the applicable risk weights. the lower rating is considered and where there are three or more ratings the second .1. 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. These adjustments. to produce volatility -adjusted amounts for collateral. fixed assets are generally taken as security for long tenor loans and current assets for working capital finance usually backed by mortgage or hypothecation. 43.1. cash collateral. long-term rating is used.2 Disclosures for portfolio subject to the Standardised Approach & Supervisory risk weights in the IRB Approach-Basel II specific 43. The State Bank of Pakistan through its letter number BSD/BAI-2/201/1200/2009 dated December 21.3. 2009 has accorded approval to the Bank for use of ratings assigned by CRAB and CRISL.1.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. Moodys. The valuation of the properties is carried out by an approved valuation agency. For facilities provided as per approved product policies (retail products. security of the assets of the borrower and assignment of the underlying project contracts is generally obtained.3 Disclosures with respect to Credit Risk Mitigation for Standardised and IRB approaches-Basel II specific 43. 43. For project finance. Moreover.1. For retail products. loan against shares etc. SSC/DSCs.1. The Bank uses these ECAIs to rate its exposures denominated in Bangladeshi currency on certain corporates and banks incorporated in Bangladesh.

29% 0.616 1.78% 28.685 8.10% 0. for Capital calculation purposes.36% 5.935. 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).056 7. Within credit portfolio.969 314.394.830 401.890.253 3.409.35% 0.786.066.05% 0.744 479.603 3.40% 0.13% 2.000 2. the Bank recognises only eligible collaterals as mentioned in the SBP Basel II accord.715 12.58% 0.558 101.51% 3.389 829.012 14.93% 5. Moreover. geography. National Savings Certificates.1.84% 5.166.3.292.82% 15.13% 100.545 3.245.578.493.808 1.828.741 1.45% 2.211 20.675 ANNUAL REPORT 2011 167 .794. the Bank considers all types of financial collaterals that are eligible under SBP Basel II accord.207.787.240.516 417.337 4.270. in order to restrict the industry concentration risk.888 108.37% 0.505.92% 0.72% 3. industry.481 4.252 27.290.083.263.54% 0.10% 0.679 103.560 1.799.35% 0.090.332 444.152.4.84% 10.23% 2.24% 2.05% 3.843 649.76% 1.818.927.1.31% 0.00% 2.372.163.131 10.341.692 529. as a prudential measure aimed at better risk management and avoidance of concentration of risks.96% 0.126.989 15.529.1 Segments by class of business 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 16.675. This includes Cash / TDRs. Gold.010.31% 0.617 1.047.027 2.94% 23.605 318.42% 3.00% 0.44% 3.27% 2.510 1.241 6.15% 2.28% 0.764 3.915 21.610 9.114.4 Types of eligible financial collateral For credit risk mitigation purposes.81% 1.92% 0.20% 5.755 2.040.48% 0.00% 2.67% 0.31% 3.176 531.514 2.490.975 21.32% 100.22% 5.127 305.488.41% 3.418.584.14% 0.569.053 475 3.74% 0.455 6.974 3.852 10.836 22.148 21.80% 0.834 1. the SBP has prescribed regulatory limits on banks‟ maximum exposure to single borrower and group borrowers.321 1.47% 9.789 3.595.62% 3.725.727.08% 1.142.113 1.384 877.247.001 20.829.05% 0.408 93.56% 0.781 62.49% 11.208 3.07% 1. certain debt securities rated by a recognised credit rating agency. the Bank is in the process of developing Group Rating framework and is also working on the framework to restrict the per party / per group exposure limits based on the Internal Risk Rating of the obligor and the group. In general.50% 1.566 2.537.418 2.804.625 4.00% 1.629.276.582.70% 1.78% 0.44% 14.08% 0.216.75% 0.474 3.32% 0.26% 100.09% 0. Additionally.20% 0.51% 0.056 794.02% 28.91% 20.05% 1.847 13.08% 2.709.376 2011 Deposits (Rupees Percent in '000) 1.256 51.676.1.836 6.64% 1.06% 0. securities issued by Government of Pakistan such as T-Bills and PIBs.00% Contingent liabilities * (Rupees Percent in '000) 475.329 211.70% 10.39% 1.929 611.52% 0.941.239.74% 2.43.104.506. and single/group borrower exposures.23% 6.3.837. in line with the SBP Basel II requirements.144.00% 7.885 23. 43.304 412.846.078 72.135.4 Segmental information 43.67% 3. Further.382 112.424.51% 0.814 1.250.783 565.729.06% 0.820 1.72% 0.10% 2.5 Credit concentration risk Credit concentration risk arises mainly due to concentration of exposures under various categories viz.735 3.758 2.904 3.994 12.30% 0.68% 1.1.439.790 3.05% 12.566 2.596.79% 0.208. BAL‟s annual credit plan spells out the maximum allowable exposure that it can take on specific industries for every business group.547 569.457 3. mutual fund units where daily Net Asset Value (NAV) is available in public domain and guarantees from certain specified entities.96% 1.786 1.287 0.19% 1.52% 7.825 578.857 32.96% 4.146 1.59% 0.767.090 3. 43.598 9.305 1.868.35% 0.05% 0.862 5.022 7.240 1.25% 0.547 116.004 6.

322 1.750.493.426 31.764.37% 4.581.846.795 4.770 947.711 1.53% 3.49% 12.13% 0.10% 100.618.682.41% 0.395.791 1.878 82.254 2.145 44.394.00% 1.01% 1.022.226 2.212.752 2.508 1.246 1.321.013 6.384 766.528.010.06% 1.252.669.213 15.22% 0.537 3.09% 0.738 354.02% 0.595 154.267 155.00% 4.230.98% 1.349.21% 0.632 650 5.53% 0.990 1. transaction related contingent liabilities and trade related contingent liabilities 2011 Deposits (Rupees Percent in '000) 59.496.957 947.70% 0.514.326.83% 6.313 2.040 211.022 20.614.498 148.10% 0.376 3.14% 1.16% 0.06% 0.935 1.492 627.940.596 16.355 586.450 201.688.670 2.042.855.65% 1.57% 0.675 15% 85% 100% 43.20% 0.507 10.45% Contingent liabilities * (Rupees Percent in '000) 69.51% 13.589 6.26% 1.646 * contingent liabilities for the purpose of this note are presented at cost and includes direct credit substitutes.795 4.064 109.206 2.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 16.797 872.540 1.431 24.405.74% 1.454.788 1.69% 1.306.374.817 4.33% 1.645 691.839.878 0.554.344 350.22% 6.132 12.70% 0.598.54% 0.336.298.975.244.822.2 Segment by sector Advances (Gross) (Rupees Percent in '000) 23.043 1.70% 3.90% 1.18% 2.023 2.92% 0.62% 0.283 1.021 1.904.287 28% 72% 100% Public / Government Private ANNUAL REPORT 2011 168 .009 112.453 1.509 5.00% 1.376 11% 89% 100% Contingent liabilities * (Rupees Percent in '000) 31.738 6.991.27% 3.636 80.860.10% 0.017.07% 14.63% 0.385.38% 0.084 3.052 3.029 28.44% 0.313 1.102.469 750.827.37% 3.67% 1.17% 0.08% 0.99% 0.057.553 2.582.17% 0.21% 3.245.831 3.472.41% 11.88% 8.04% 100.04% 0.706 7.15% 0.224.17% 13.10% 3.533 33.264 2.145 7.53% 1.511.877 6.00% 0.25% 1.27% 0.53% 1.075 538.22% 0.158 17.27% 7.92% 6.850 401.69% 0.911.247 2.13% 373.454 9.776.10% 1.487.723 4.03% 31.01% 1.399.634.761.72% 1.296.40% 2.70% 100.676 3.526 2.143 2010 Deposits (Rupees Percent in '000) 0.365.00% 62.123.991 1.100 13.826.690 3.099.825 341.454.09% 1.07% 7.684 352.093 34.06% 0.518 1.595 1.615 163.471.00% 7.62% 16.984.52% 0.1.384.80% 30.003.336 187.434.267 1.55% 3.647 2.956 24.025 217.75% 0.244.00% 2.901 450.507.099 7.514 2.11% 2.94% 2.047.180.932.464.37% 0.11% 0.038.34% 2.92% 0.523 108.37% 7.13% 9.55% 1.423.4.581 791.507 10.230.095.79% 22.41% 16.350 2.07% 0.138 0.278 81.283.388.914 4.

882 21.383.004.220.845.493.684.710.629.903. hunting and fishing Textile Chemical and pharmaceuticals Cement Automobile and transportation equipment Wholesale and retail trade Individuals Others 508.287 2010 Total assets Net assets Contingent employed employed liabilities * Rupees in '000------------------------------ Pakistan Asia Pacific (including South Asia) Middle East 1.010.3 Details of non-performing advances and specific provisions by class of business segment 2011 Classified Advances ------------------------------ Specific Provisions Held 218.614 19.085 2.327.549 615.143 Deposits (Rupees Percent in '000) 14% 86% 100% Contingent liabilities * (Rupees Percent in '000) 19.535 531.914.372 193.710.151 3.648.135.241 9.020.569 65.840.541 2.895 113.069.506.690 43.902.011 109.4 Details of non-performing advances and specific provisions by sector 2011 Classified Advances ------------------------------ Specific Provisions Held 12.690 31.904.461 Rupees in '000------------------------------ Public / Government Private 19.499.157.646 18% 82% 100% 15% 48.213 12.312 10.795.4.495.815.095 112.774 12.329 103.888 2.496 88.011 5.342.039 6.614 43.788 18.280 417.169 71.425 369.170.803.534.649.312 10.327.280 100% 354.822.614 43.096.020.295 1.151 Profit before taxation ------------------------------ 421.281 89.366 94.821.071 185.2010 Advances (Gross) (Rupees Percent in '000) Public / Government Private 32.872 17.959 100.801.327.125.072 217.1.461 17.4.110 411.700 25.612.122.410 85% 305.1.240.020.244.944 151.330 6.728 374.774 2010 Classified Specific Advances Provisions Held 17.692 5.244.365 109.646 ANNUAL REPORT 2011 169 .997.906 21.829.206 6.264 103.461 Rupees in '000------------------------------ Agriculture.756 468.599 278.514 5.852 225.774 2010 Classified Specific Advances Provisions Held 505.1.345.571 703.710.550.196.065.821 62.950 6.605 56.528. forestry.891 2.4.082 39.746.523 3.042 2.096.312 10.009 4.776 6.975 225.5 Geographical segment analysis Profit before taxation ------------------------------ 2011 Total assets Net assets Contingent employed employed liabilities * Rupees in '000------------------------------ Pakistan Asia Pacific (including South Asia) Middle East 4.862 2.525 386.400 19.801 150.096.175 10.294.

623. The Bank uses the Standardised Approach to calculate capital charge for market risk as per the current regulatory framework under Basel II.093 73.732.359 399. Moreover.216. transaction related contingent liabilities and trade related contingent liabilities 43.762.137. forward transactions in inter-bank market on behalf of customers to cover-up their positions against stipulated risks.000 2.767 4.700.838.095 3.140 737.648. currency and counter-party limits for on and off-balance sheet financial instruments.519.596. Currently.788 417.387 284.291. The buy and sell transactions are matched in view of their maturities in the different predefined time buckets. 43. The analysis below represents the concentration of the Bank's foreign currency risk for on and off balance sheet financial instruments: 2011 Assets ------------------------------ Liabilities Off-balance sheet items (6.123.973) 6.868.532. the Bank calculates 'Value at Risk (VaR)' on a daily basis by using 'Historical Method' taking into consideration the data of over 2 years.045.155.837 468. The currency risk is regulated and monitored against the regulatory / statutory limits enforced by the State Bank of Pakistan.345. To manage and control market risk a well defined limits structure is in place.243 1.* contingent liabilities for the purpose of this note are presented at cost and includes direct credit substitutes.838.791 6.2 Market risk Market risk is the risk of losses due to on and off-balance sheet positions arising out of changes in market prices.992 15.500 7.887 21.600 496.126 4.503.246 13.632) 21.462. adjusted and approved periodically.882 390.264 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 450. Off-balance sheet financial instruments are contracts which are the resultant outcome of the import and export transactions.150.032.859 103.871 (16.951 16.300 116.470 57.642. Moreover.772 15.562.877 25.294 36.549 47.750 56 3.21.045.515 2. Market risk mainly arises from trading activities undertaken by the Bank‟s treasury.938 18. It also includes investments and structural positions in the banking book of the Bank.099 442.882 (26.442.095 386. 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.027 289.985 2.011 ANNUAL REPORT 2011 170 .299) 65.2.524 2010 Assets ------------------------------ Liabilities Rupees in '000 Pakistan Rupee United States Dollar Great Britain Pound Japanese Yen Euro Other currencies Total foreign currency exposure Total currency exposure 354.606 24.139 Off-balance sheet items Net foreign currency exposure 25.177 2.139) 1. The Bank manages this risk by setting and monitoring dealer.285 5.346.128.425 18.758.787.789 317. The foreign exchange exposure limits in respective currencies are managed against the prescribed limits.800 1.632 129.1 Foreign exchange risk "Foreign exchange risk arises from the fluctuation in the value of financial instruments consequent to the changes in foreign exchange rates.716 411.155 37. 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.544. counterparties enter into swaps. These limits are reviewed.763 8.207.459 88.333 5.243.675.009 .655.903.505 11.002 10.803.285 (23.946.223 16.

The objective of Equity Portfolio Unit‟s classified as HFT portfolio is to take advantages of short -term capital gains. limits / controls for equity trading portfolios of Equity Portfolio Unit. ANNUAL REPORT 2011 171 .43. In order to ensure that this risk is managed within acceptable limits. 43. the Bank‟s Asset and Liability Management Committee (ALCO) monitors the re -pricing of the assets and liabilities on a regular basis.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. Special emphasis is given to the details of risks / mitigants.2. The Bank‟s interest rate risk is limited since the majority of customer deposits are retrospectively re-priced on a biannual basis on the profit and loss sharing principles.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 Bank‟s equity trading book comprises of Equity Portfolio Unit‟s classified as Held for Trading (HFT). 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.

915.731.589 12.00% 6.978 401.442 26.622.360 15.652 4.912 94.740.144.43.916.148.524 7.348 1.047 1.142 22.486.309 84.506.979 11.256.427.464 882.779.245.470 1.456.508 10.394 28.327 12.061 1.495.964.680 12.407 26.197.519 14.417 12.876 720 2.987.180 9.614 20.sale Repo transactions resale Repo transactions repurchase Off-balance sheet gap Total yield / interest rate risk sensitivity gap Cumulative yield / interest rate risk sensitivity gap Effective Yield/ Interest Rate ----------------------------------------------------------------------- Total Upto 1 Month Over 1 to 3 Months Over 3 to 6 Months 2010 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 Liability against assets subject to finance Lease Other liabilities 0.895.201 2.911 6.988.476 35.219 57.114 138.937 22.091.710 6.873.596.659.848.38% - On-balance sheet gap Off-balance sheet financial instruments 12.588 3.010.236 77.295 29.874 6.383 49.094.521.911 66.841.10% - 50.629.000 5.416.625 26.700.34% 5.192 5.564 24.667.534 4.078.272 680.161.155 111.233 63.038 8.461 505 53.152.614.605.747.128.398 7.663 26.692 441.060 13.903.738.784 9.273 8.455 500 1.468.690 7.182.737 54.064 4.40% 6.479 12.307 33.045.265.118.453 27.895.904.150.509.879 1.675.633.561 207.466 28.508.75% 41.730.114.476 10.403.657.265.519 396.480.846 1.364) 32.155 - 41.254.117.964.685.256.559 (44.769.530.157 30.419.329 7.251.750.453 18.118.348.328.847.696 (28.988 11.298.108.648 7.780 11.124 354.09% 11.406 954 1.931 2.984.228 6.717) - Forward exchange contracts .093.238 4.341.760.184 29.857) 2.294.532 1.812.638 137.29% 12.272 3.096.536.988 11.245.purchase Forward exchange contracts .494 758 36.716.867.730.974 1.917 650.000 1.737 9.149 22.280 58.199 9.803 4.118 619 4.89% 12.080 33.479 12.823.636 198.852 7.175 7.278 94.279 54.780 3.710 7.345.588.476 2.556 113.582.116.460 32.597.533 6.371 7.961.210 30.533 124.181 5.231.667 53.346 948.491 9.881 19.757 13.675 7.761 1.896.153 9.512 12.sale Repo transactions resale Repo transactions repurchase Off-balance sheet gap Total yield/interest risk sensitivity gap Cumulative yield/interest risk sensitivity gap .680.515.341 29.237 1.245.997.521 416.971 1.408 11.482.300 4.081 101.585.077 40.006 146.732 6.565.856.047 (26.148.828 12.411) 1.1 Mismatch of interest rate sensitive assets and liabilities Effective Yield/ Interest Rate ----------------------------------------------------------------------- Total Upto 1 Month Over 1 to 3 Months Over 3 to 6 Months 2011 Exposed to Yield/ Interest risk Over 6 Over 1 Over 2 Months to 1 to 2 to 3 Year Years Years Rupees in '000----------------------------------------------------------------------- ANNUAL REPORT 2011 172 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 0.430.022 5.251.865 2.229.662 17.567.25% 13.849.958.936.227 35.65% 12.028 5.528.767.038 5.232.424.842.265.735 961.519 6.908 47.245.941.040.521.441 126.097 1.677 8.074.910 9.899.374.591 252 28.809.633 5.63% 7.698.780 4.088 6.529.091 453.119 53.206.638.734.429 83.728 9.168.813 9.014.336.597.981.889.988 56.726.906.618 21.712.purchase Forward exchange contracts .208.332.19% - On-balance sheet gap Off-balance sheet financial instruments Forward exchange contracts .516 122.440.501 32.692 161.038.292 6.916 (45.599.939 (91.180.534.3.080.181 5.608.439.87% 14.679.402 1.633.495.597.285 26.761 29.53% .654 37.497.740 59.832 5.294.943 719 2.309 28.060 80.536.180 89.029 58.946 12.624 11.812.648.858 13.350 8.946.439.081 17.602.059 122.044.117.940 1.08% 15.61% 0.121 7.657.932.307.851.128.620 12.966 29.406 11.155 9.298) 49.729 34.732 76.138.667.285 (20.754.351 637.273.294.407 166.343 14.265 3.099.332 12.306.507.506 1.114 388.703 60.757.090) 9.618) 4.236.333.156 9.259 64.78% 10.684 428.807.479 102.511.587 9.375 477 126.772 1.093 28.726.534.788.040.376.499 819.446.843.074 12.882.294.402 1.097 952.283 (82.804 4.937.707.563 7.845.660 11.074 44.187 56.975.636 9.082.903 29.667.060 6.403.842.299 794.413.274 38.693 9.519 55.933.882 13.667.994 1.904.825.030 931.566 8.155.545.528) (21.897.820 19.896.701 97.116.572.533 13.203.044.480.381 63.435.118.206.841 16.054 12.523 10.779.192.318 954 949.703 17.557 7.364 30.711 449.719.479 12.091 70.524.220.951 78.220 13.765.724 4.573.631) 8.899.556.770.440 64.155 9.507 (1.694.192.329.

521 468.491 1.983 390.2 Reconciliation of Assets and Liabilities exposed to yield / interest rate risk with Total Assets and Liabilities Total financial assets as per note Add: Non financial assets Operating fixed assets Deferred tax assets Other assets Total assets as per statement of financial position Total liabilities as per note Add: Non financial liabilities Deferred tax liabilities Other liabilities Total liabilities as per statement of financial position 43.442. The BOD has approved a comprehensive liquidity management policy which stipulates the early warning indicators of liquidity risk and maintenance of various ratios.843. Moreover.1 453.251. depositor‟s concentration both in terms of the overall funding mix and avoidance of undue reliance on large individual deposi ts.Note 2011 2010 (Rupees in „000) 43.832 13.3. The CFP is regularly reviewed and updated. ANNUAL REPORT 2011 173 .033 442.427.788 396.223 411. 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.524 993.871 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.1 441.440.4 Liquidity risk 43.693 421. Bank also has a 'Contingency Funding Plan' (CFP) in place to address liquidity issues in times of stress / crisis situations.803. ALCO monitors the maintenance of liquidity ratios.882 388. as core retail deposits form a considerable part of the Bank‟s overall funding mix therefore significant importan ce is being given to the stability and growth of these deposits. Further the Bank has designed different scenarios of cash outflows to stress test efficacy of its liquid assets and its impact on Profit & Loss.595 709. The results are regularly reviewed by ALCO for taking appropriate measures.845.3.325 316.064 14.563 43.155.232.345.210. Moreover.055.3.742 1.

397 442.987.763 (861.841 16.539 28.970 4.357 Over 1 to 3 Months 1.966 95.978 401.453 25.478 4.550 52.000 1.016 51.801 80.524 25.035.614.579.330 74.222.949 574.151.328.205 295.516 668.719.802.195 2.739.330 1.462.152.143 21.741.497.440 993.620 1.256 55.442 29.427.673 (5. Therefore.468.188.155.636 24.880.903.126.667.476 27.273.563 3.170 49.693) 2.435 (27.168.266) Over 3 to 5 Years 15.093.807.330.242.236.788 93.453 18.555 14.243 30.177 1.097 390.173.212 33.822.236 41.160 32.648.192 5.614.489.787 9.598 219.625 38.054 14.469.015.981.495 55.167 1.821.247 2.909 51.031.622.876 720 1.634 12.118 17.155.477 16.913.453 7.564.573 75.770.096.216 57.879 1.279 104.494 758 507.813.184 421.155 6.491.010.539 22.425.882 1.294.552.based on working prepared by the Asset and Liability Management Committee (ALCO) of the Bank 2011 Total ------------------------------------------------------------------------- Upto 1 Month 16.348.519 4.871) Over 5 to 10 Years 10.904.460.742 13.567.803.546 36.461) Over 5 to 10 Years 9.843.325 1. these deposits are payable on demand.313.662 17.521.851.011 13.273 1.665.224.643.808 37.101.533 6.871 21.595 12.828 12.966 35.732.520 856.264 13.984 81.788 5.881.378 (21.390.930 (66.788.909 ANNUAL REPORT 2011 174 Rupees in '000------------------------------------------------------------------------- Assets Cash and balances with treasury banks Balances with other banks Lendings to financial institutions Investments Advances Fixed assets Deferred Tax Assets Other assets Liabilities Bills payable Borrowings Deposits and other accounts Sub-ordinated loans Liabilities against assets subject to finance lease Other liabilities 50.757 2.537.569 8.000 1.882.440.345.900 146.019.292.870.478 243.842 42.108.4.1 Maturities of assets and liabilities .365 54.249.822 61.351 9.43.101.948.650 (27.524 7.511.497.342.000 163.562.316 162.150.249.663 29.392 11.248 252 4.770.256.384 32.142) Over 3 to 5 Years 16.876 1.541 13.819 332 506.net of tax Current and saving deposits do not have any contractual maturity.636 198.675 7.100.721 Over 1 to 3 Months 449.656 49.096.442.753.856 505 97.735 125.352) Over 2 to 3 Years 4.159 11.850 (4.732 624.133 1.306.424.533 3.795 7.946 15.847 39.673 416. 2010 Total ------------------------------------------------------------------------- Upto 1 Month 11.556 113.022 1.809 19.114.470 20.639 113.613 23.648.866.746.125 59.402 55.net of tax .999 332 1.908 22.765.239.245.910 993.710.974.936.521.534.207 287.412 108.707.448.658 114.519 1.512 13.905 (99.124 354.254 23.403.693 1.481 332 5.459.023 Over 6 Months to 1 Year 51.327.451.704.822 35.809 29.866.416 34.489 157.429.903.474.080.072.327 1.007 10.006.325 9.968.412 114.806 4.026.403.983.609 416.639 952.096.251.454 30.657.882 4.666 30.742 411.533 13.328 10.479 6.011 Net assets Share capital Reserves Share in share premium of associate Non-controlling interest Unappropriated profit Surplus on revaluation of assets .612 468.464 111.219 182.757.492) Over 2 to 3 Years 8.623.669 147.026.035 9.559.332.901.597.009.026 59.267 39.530.151.324.742 162.357.066) 5.318.732. with the approval of ALCO.494.699.570) (72.067 54.180.380 63.148.900.365) Above 10 Years 29.158 48.449.259 312.782 51.966 50.639 219.680 882.395 (5.880 32.942 4.197.308 25.870.879 1.909 91.707 22.361.714.097 1. these deposits have been classified based on management experience with such class of deposits.912.684 428.964.264 Net assets Share capital Reserves Share in share premium of associate Non-controlling interest Unappropriated profit Surplus on revaluation of assets .371 12.382.598.749 (10.118.563 4.209.729 13.931 5.714.103 187.756) Over 3 to 6 Months 37.561 207.648.170 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 41.485 650.456.185 917.115.851 41.819.048 37.943 719 1. However.707.390.957 Over 1 to 2 Years 9.900 146.233 12.384.244.562 56.129.174 5.922.491.101.693 421.031 (2.295 2.184 16.407 166.264 (11.606 6.459.368 882.564 38.029.701 548.917.899.690 7.494 Over 6 Months to 1 Year 680.046.680 38.428 Over 1 to 2 Years 7.559 7.651.985 332 112.819 1.330.988.383 21.912 274.700.104.507) Over 3 to 6 Months 1.989 11.740.549.429 208.615.210 3.256 14.981 37.059 39.750.073.572) Above 10 Years 34.

people and systems or from external events. The Bank is using the „Basic Indicator Approach‟ for calculating the capital charge for Operational Risk.5 Operational risk Basel II defines Operational risk as. A dedicated IT Security Unit is functioning within Risk Management Division while responsibility for BCP implementation resides with Operations Group.5. which covers the strategies. 2012.Basel II Specific Currently.5 percent (2010: Nil cash dividend) for the share holders of the Bank. Almost all the policies and procedures of the Bank are reviewed from the risk perspective. and the recommendations of RMD are taken into consideration before their approval at the appropriate level. monitor. an Operational Risk Function has been established within RMD. ANNUAL REPORT 2011 175 . which directly reports to General Manager . We have duly launched Operational Loss Database and Key Risk Indicators (KRIs) systems which are web based and the same has been launched on a bank wide basis. the mapping of business activities into Basel defined business lines has already been completed and request been sent to SBP for a parallel run.RMD. 42. The consolidated financial statements for the year ended December 31." In compliance with the Risk Management guidelines. Delivery & Process Management BAL‟s Information Security Policy and Business Continuity Plan (BCP) have been approved by the Board of Directors and is in the process of implementation. in order to use it as an action plan in improving the operational risk & control system at the organisational and business / support unit levels. All the business / support units are responsible for ensuring compliance with policies and procedures in their day-today activities and monitoring key operational risk exposures. Operational Risk Function and business / support units are involved and regularly collaborate in determining and reviewing the strategy. “the risk of loss resulting from inadequate or failed internal processes. structure and functions of Operational risk management and provide guidelines to identify. As required by Basel II. processes. - Internal Fraud External Fraud Employment Practice & Workplace Safety Client. Product & Business Practice Damage to Physical Assets Business Disruption & System Failure Execution. However. 2011 do not include the effect of this appropriation which will be accounted for in the consolidated financial statements for the year ending December 31. issued by SBP. 2012 has announced cash dividend of 17.1 Operational Risk Disclosures . The Bank intends to move towards the „Alternative Standardised Approach‟ and for this purpose. control & report operational risk in a consistent & transparent manner across the Bank.43. assess. 44 NON-ADJUSTING EVENT AFTER THE YEAR END REPORTING DATE The Board of Directors of the Bank in its meeting held on March 01. the Bank has categorised all its Operational loss/near miss incidents into following loss event categories. The Operational risk management policy of the Bank is duly approved by the Board and Risk Management Manual includes Operational risk portion. This appropriation will be approved in the forthcoming Annual General Meeting.

45 DATE OF AUTHORISATION These consolidated financial statements were authorised for issue on March 01. 2012 by the Board of Directors of the Bank. 2011 and the company's current liabilities exceeded its current assets by Rs. 32. re-arranged or additionally incorporated in these consolidated financial statements. 46 46. Chief Executive Officer Director Director Director ANNUAL REPORT 2011 176 .61 million (Rs.33 million).2 Details of modified report of the subsidiary The external auditors of Alfalah Securities (Private) Limited have added an emphasis of matter paragraph in their audit report on the financial statements drawing attention to the fact that the company has incurred a net loss of Rs 53.88 million) during the year ended December 31.58 million (2010: 114. There were no significant reclassifications during the year. These conditions indicate the existence of material uncertainity that may cast significant doubt about the company's ability to continue as a going concern. wherever necessary to facilitate comparison and to conform with changes in presentation in the current year.1 GENERAL Comparatives Comparative information has been re-classified. 738. 46.

PHASE I.006 Principal written-off 9 2. Mingora Name and address of the borrower 2 Name of individuals / partners / directors (with N.659 1.508 Others 7 - Total (5+6+7) 8 11.003 - 6. 2011 Principal 5 9.) 3 Arif Iqbal CNIC # 15602-0314451-3 Father’s / Husband’s Name 4 Iqbal Rehman Outstanding Liabilities at January 1.511 - 22.000 OR ABOVE DURING THE YEAR ENDED DECEMBER 31.678 3.088 - 735 2 Monis Mobile city Mohamamd Danish Ghazyani CNIC # 35201-1541591-1 Mohammad Farooq 8.632 .629 2.789 10. No.448 1.I.189 4. BLOCK B.789 3 Habib Ullah Tariq HOUSE # 183.809 STATEMENT SHOWING WRTTEN-OFF LOANS OR ANY OTHER FINANCIAL RELIEF OF RUPEES 500. STATE LIFE INSURANCE HOUSING SOCIETY.C.498 Mark-up 6 1. 1 1 Pamir Traders G t Road. Lahore Habib ullah Tariq CNIC # 35201-6875421-1 Malik Inayat Ullah 521 214 - 735 521 214 ANNEXURE .299 1.(Rupees in ‘000) Other financial Total relief (9+10+11) provided 11 12 2.809 Mark-up written-off 10 - - 3. 2011 S.I Total 18. No.

ANNUAL REPORT 2011 177 .

111 ANNUAL REPORT 2011 178 .385 6.500 Remuneration to Shariah Advisor / Board CHARITY FUND Opening balance Additions during the year Payments / Utilization during the year Closing balance 25.104.878 25.800.159.365.390.319 1.335.393.net Advances .017 87.194.II ISLAMIC BANKING BUSINESS The bank is operating 85 Islamic banking branches as at December 31.550.952 93.817.000 12.135.638.338 4.262.net Fixed assets Other assets 11.957.557.666.247.808 50. 2011 (December 31.390 1.ANNEXURE .813 3.044 10.293 6.926.059.152 1.376 3.086 495.195 1.231.550 6.857 757.842.678.090 55.800.net of tax 1.883 60.050 2.385 1.393 25.634 5.233 47.809 22.300 43.466 2.376 3.492.935 636.500 1.181 35.997 25.822 742.817.030.579 5.807 4.891 4.208.231.488.000 10.863.324 1.367 80.516 42.935 1.243 3.195 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 . 2011 2010 (Rupees in „000) ASSETS Cash and balances with treasury banks Balances with and due from financial institutions Lendings to financial institutions Investments .111 65.563 6.858 5. 2010: 80 branches).780.086.502 65.

345 380.277.558 39.007.807 Other income Total non other income OTHER EXPENSES Administrative expenses Other charges Total other expenses PROFIT BEFORE TAXATION Unappropriated profit brought forward Transferred from surplus on revaluation of fixed assets .net Provision for diminution in value of investments net Bad debts written off directly Net income / return earned after provisions OTHER INCOME Fee.792.413 23.432.579 110.247.417 42.497 2.177 2.483 2.157 2.131 4.417 573.945 1.434.752.430.046 14.896.752 45.net of tax Profit available for appropriation / unremitted profit ANNUAL REPORT 2011 179 .896.475.326 33.771 1.986 468.732 1.917 1.896.ANNEXURE .348 432.247.479 236. 2010: 80 branches).326.678.062.664 5.281 34.953 1.972.987 2.716.net Unrealised gain on revaluation of investments classified as held for trading 114.541 3.503 29.892 4.715 1.762 969.235 1.521 2.913 42.807 275 3.558 Depreciation on assets given on lease Net income / return earned after depreciation Provisions against loans and advances .345. 2011 (December 31.085 150 1.421.II ISLAMIC BANKING BUSINESS The bank is operating 85 Islamic banking branches as at December 31.840 3.991 1.579 275 2. commission and brokerage income Dividend income Income from dealing in foreign currencies Gain on sale of securities .590 924.001 2.404. 2011 2010 (Rupees in „000) Income / return earned Income / return expensed Net income / return before depreciation on assets given on lease 8.

428 427.000 115.000 60.000 100.000 90.000 1.001 165.882 429.726 2.000 255.828.182.000 80.001 15.000 20.573.001 85.644.530 1.349.970 561.000 265.292 220.000 230.001 250.001 55.000 65.000 55.000 145.001 155.001 20.819 7.001 185.860.001 50.494 392.001 200.416 1.328 1.001 220.001 115.000 140. 2011 Number of Share Holders 1.000 809.672.000 260.965 534.175 3.001 235.000 507.197.230.189.001 255.001 To 100 500 1.187 1.000 250.001 210.001 110.001 225.001 215.001 160.000 225.356.000 205.012.001 135.324 489.001 25.001 95.140.412 10 4 7 2 1 1 5 1 2 2 4 2 4 3 195.384 2.001 240.001 65.000 50.752 1.375 475.001 230.000 25.001 145.000 235.001 170.311 5.980 1.000 245.151.466 578.374 1.001 245.629 1.000 1.352 927.000 165.000 170.000 110.187 1.001 90.000 35.016 1.001 70.031.299 706 319 228 143 102 57 50 77 37 42 20 25 22 13 19 21 13 32 9 17 12 10 10 8 3 8 3 13 2 3 7 7 3 3 3 3 Shareholding From 1 101 501 1.346 19.000 155.001 105.353 3.000 5.962 1.000 150.000 160.000 130.705.000 475.790 1.001 - 200.144.000 215.095 513.001 10.000 95.909 783.000 105.930.992.000 125.048 2.871 8.422.272 1.000 10.513 1.157.990 235.558 2.559 2.000 240.180.000 Number of Shares Held 65.942 1.001 45.000 40.000.121.611.454.000 175.467.001 130.100.000 70.789.000 180.001 260.001 205.565 1.597 1.001 125.000 195.001 150.000 15.188.029.750 305.000 210.001 75.656 1.001 175.746 2.000 135.001 60.001 5.001 140.000 85.000 120.001 190.945 1.000 30.788.001 40.000 75.001 80.108 2.001 30.COMBINED PATTERN OF CDC AND PHYSICAL SHARE HOLDINGS AS AT DECEMBER 31.000 225.531 16.377 797.000 45.000 220.581 4.516 1.021.000 190.944.001 100.256.367 3.001 120.748 ANNUAL REPORT 2011 180 .179 5.001 35.

001 470.000 1.720 576.198.001 605.061 978.526.000 370.000 320.000 375.001 695.000 575.001 570.000 520.000 570.720 1.000 330.001 665.473 438.250 593.001 440.900 1.000 535.001 365.186 695.354.000 1.945 767.155 932.001 420.001 465.415.000 400.741 688.001 305.001 495.001 380.307 ANNUAL REPORT 2011 181 .000 385.715 365.000 475.700 613.000 515.000 440.000 360.000.000 340.001 390.001 590.000 550.090 1.001 320.001 635.319 1.001 560.000 335.000 510.000 305.000 423.041 547.000 480.563 1.250 400.658 1.001 555.000 395.001 545.001 400.013.000 600.000 325.453 1.376 1.000 601.000 365.001 360.001 - 270.000 700.212 3.041.913 335.000 595.001 270.000 525.333 575.000 300.001 300.001 505.Number of Share Holders Shareholding From To Number of Shares Held 1 4 5 2 1 5 2 2 1 3 3 1 3 1 1 1 1 2 2 1 5 1 1 1 1 1 4 2 3 1 6 3 1 2 2 1 1 2 2 1 2 1 1 2 1 2 3 1 1 2 1 1 265.000 670.250 513.000 405.000 500.000 605.000 1.000 290.001 325.454 476.125.033.712 570.995 1.001 315.000 640.000 350.598 666.352 316.000 295.383.000 425.145 604.001 405.001 370.001 345.001 395.814 291.000 470.001 295.350 1.319 1.001 575.001 285.000 580.582 532.325 745.933 360.003 639.000 1.001 625.212.000 560.100 410.001 510.001 355.885.001 520.000 445.001 530.468 443.000 450.001 675.125 968.798.000 280.370 345.001 435.000 565.498.001 565.500 393.000 1.000 410.116.000 630.001 515.001 330.001 445.001 290.000 610.875 1.001 600.001 685.000 310.000 680.096.001 275.001 595.001 475.001 335.000 275.998.140.000 270.000 363.000 690.

965.001 2.000 1.300.000 820.000 1.084.495.500.001 1.095.000 1.001 1.250.136.725.320.000 1.000 2.274.000 2.085.330.000 2.000 1.001 1.800 1.001 1.000 2.001 915.001 1.377 1.001 1.570.040.403.109.000 920.650.245.000 2.188 1.000 1.307 1.001 1.000 3.001 3.416.300 3.595.657.500.000 1.159 837.525.000 2.796.000 1.105.199 1.010.275.405.534.947 2.000 1.001 3.770.110.725.001 1.000 1.720.507 2.735.000 Number of Shares Held 700.001 1.000 843.Number of Share Holders 1 1 1 1 1 1 1 1 1 1 1 1 6 1 1 1 1 1 1 1 1 1 1 2 1 2 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 Shareholding From 700.250.700 1.427 2.000 840.000 2.900 1.745.270.000 4.000 870.000.000 2.000 1.305.950 1.001 2.010.001 865.000.001 2.001 2.000 2.001 1.001 1.285.001 855.001 2.826 1.350.265.000 2.000 905.545.335.660 904.565.080.000 1.091.302.768 1.000 1.600 2.317.015.001 1.530.000 2.001 990.001 960.776.650.658 1.731.000 1.001 2.563 1.001 3.266 762.001 To 705.001 1.000 2.120.925.001 1.172 1.603 ANNUAL REPORT 2011 182 .350.420.001 1.350.000 866.000 1.000 2.311 1.780.001 1.001 815.345.545.900 3.192 1.001 1.415.001 900.411 2.660.000 3.387.352.090.100.527.395.120.360 3.001 1.910.135.410 992.000 2.875 809.000 2.280.400.740.315.000 995.105.000 1.005.000 810.000 845.569.995.800 918.000 965.122 2.000 2.000 1.000 1.000 1.750 860.000 765.400.001 3.001 1.000 1.000 1.590.000.013.140.837 1.341 819.765.500 6.355.096 963.880.385.600.970.550.001 835.288 1.973 2.508 1.001 1.730.262.001 2.000 3.000 2.001 1.283.875 1.125.088 3.905.535.000 1.645.495.999.591.000 3.775.330.000 1.001 2.040.001 2.001 1.001 805.000 1.000 860.744.882.001 1.035.390.530.100.966.000 1.001 1.000.765.001 840.000 2.295.655.000 1.905.001 2.001 2.895 2.930.394 1.001 1.300.000 2.009.281 1.925.001 1.001 2.001 760.001 995.885.000 1.260.000 1.500.

358.810.001 36.813 11.125.653.369 3.712.001 53.349.410.550.000 4.520.001 55.551.258 68.536.000 75.960.020.535.033.265.000 3.000 4.000 12.540.001 19.605.680 53.895.000 4.825.145.250 55.359 4.045.001 19.515.840 7.624 19.970.000 8.156.000 6.322 75.520.147 6.000 5.825.690.405.001 4.001 6.500.001 8.001 To 3.000 55.000 36.965.001 6.001 5.001 6.600.090.000 5.828.825.710.385.694.380.001 53.976.715.001 7.668 6.149.000 19.025.055.687.415.000 37.312.000 32.000 18.001 32.096.000 4.965.552.250 ANNUAL REPORT 2011 183 .605.805.315.310.001 5.830.001 13.130.260.001 14.350.270.538 4.001 18.555 6.610.975.000 6.980.947 36.685.000 11.210.675 5.000 4.001 11.001 3.095.000 4.766 6.001 3.500.000 53.001 6.355.001 75.001 3.690.760.220.000 14.056.599 53.166 206.900.259 32.818 25.535.695.000 8.040.234 75.001 3.963.001 6.000 103.060.000 6.825.356.265.966.000 6.000 19.021.000 3.128.755.000 10.750.150.520.352.001 37.100.805.605.531.875 19.001 103.000 6.530.855.000 4.851.000 13.520.001 119.000 14.650.745.000 119.001 4.001 12.000 11.788 12.495.979 13.000 75.850.001 12.749.205.001 11.000 5.900.001 4.001 68.000 3.000 3.220.410.515.433 1.966 119.000 4.555.327 6.578 3.000 5.001 75.000 7.437 3.001 10.355.655.758.068 18.Number of Share Holders 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 2 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 2 1 18.001 6.001 4.555.355.000 11.424 37.000 12.360.520.820.000 53.090.000 Number of Shares Held 3.044.263.000 5.270.095.821.215.600.000 6.550.060 10.691 6.385.360.830.756 Shareholding From 3.001 5.001 4.805 3.000 68.525.

041 453 1.124. No.204.398 3.70 10.61 9.045 90.473 145 44 31 21 16 15 5 3 2 1 18.59 0.27 0.49 8.00 0.00 10 Leasing Companies 11 Cooperative Societies ANNUAL REPORT 2011 184 .756 873.73 5. 2011 S.723 48.250 64.01 0.54 0.645.440 115.721 774.010.453 76.349.CATEGORIES OF SHAREHOLDERS AS AT DECEMBER 31.623 8.032.851.06 0. 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 Others Mutual Fund Insurance Companies Investment Companies Charitable Trusts Modarabas 18.00 100.374.156.011 143.342 128.

18 0. Ikram Ul Majeed Sehgal .Trustee NI(U)T Fund National Investment Trust 2 3- Directors & Chief Executive Officer 7 H. Director / CEO ANNUAL REPORT 2011 185 .77 10.ADDITIONAL INFORMATION AS AT DECEMBER 31. Director / CEO 500 45Executives Banks. Nadeem Iqbal Sheikh . CEO.00 0.352.00 238.776.474 Mr. 2011 Shareholder’s category Number of shareholders Number of Category wise Percentage shares held no. CFO. Abdulla Khalil Al Mutawa .360 Mr.25 0. Director 96.499.357. Director 3.737 270. of % shares held 1.250 134.93 0.658 0.803.979 19. Nahayan Mabarak Al Nahayan H.H.499.915. Atif Aslam Bajwa.93 0.00 21. NBFIs.11 12.457 Mr. Khalid Mana Saeed Al Otaiba .552. Director 3.11 0.349.603 Mr. Abdulla Nasser Hawaileel Al Mansoori . DFIs.25 0.930 Mr.01 1- Associated Companies Alfalah Insurance Company Limited 1 2- NIT & ICP National Bank of Pakistan .61 20.H.658 1.387.572.03 7.033.357. Atif Aslam Bajwa. Insurance Companies.331 Mr. Hamdan Bin Mubarak Al Nahayan Trading in shares by Directors. Director 135.930 Shares Purchased 2011 500 % 12. Director 11.156. Company Secretary and their Spouses 172. Sheikh Hamdan Bin Mubarak Al Nahayan .980.267 12.00 0.03 Shares Sold 2011 - Mr.288 0.71 10.625 Shares Shares Holding H.129 1.032 135. Modarabas and Mutual Funds 334 99 Shareholders holding 10% or more voting interest Total Paid up Capital 10% of the Paid Up Capital 1. Director 67.354.H.655 17.

P. Phone : (021) 32417515-19 Fax : 32418353 North Napier Road Branch Surv.Jinnah Road Branch Plot No. 'B' Area.I. Phone : (021) 35833778-82. 11-A Block-6 PECHS. 34984824. Block-9. NP .7/23. 34522460 Fax : 34313539 Jodia Bazar Branch Gulzar Manzil. Phone : (021) 36803041. University Road.A26/5). 34538423-24 Fax : 34314221. Plot No. 15. Block-2. C-12-C Tauheed Commercial Phase V. Phone : (021) 32211353-58 Fax : 32211243 Gulshan-e-Iqbal Branch Plot No. Lawrence Quarters. 35309075-8 Fax : 35879175 Shahrah-e-Faisal Branch Progressive Square.H. Fax : 32750629 S. Phone : (021) 32582990-1.10 (Old Surv. Phone : (021) 36962700-7 Fax : 36986051 Paper Market Branch Plot No.SB-15. Campbell Street.R. Opp: Police Station Gabol Town. Phone : (021) 32544021-24.T. Napier Quarters.A. 35 / Sheet No. Estate Avenue.C. 5 & 6 Fax : 36803043 ANNUAL REPORT 2011 186 .E. Phone : (021) 34129677-81. 154-S.13. Branch D-40.No.23/1. North Karachi Industrial Area. Korangi Industrial Area. Clifton. Siddique Wahab Road. 32582116 Fax : 32582113 North Karachi Industrial Area Branch Sector 12-B. Shahrah-e-Pakistan.BRANCHES NETWORK KARACHI Main Branch B.T. Sector 23.ST-4/2. Luxmidas Street. 34984833 Fax : 34984971 Karachi Stock Exchange Branch 18-20. Stock Exchange Road. S.E. Bahadurabad. Block 13-B. Defence Housing Authority. Shop No. Sur. Phone : (021) 32414030-39 UAN No. 3. Phone : (021) 32750627-28. Phone : (021) 32401621-5 Fax : 32401627 Clifton Branch Plot No. KDA Scheme No. 32540065 & 67 Fax : 32540066 Bahadurabad Branch Prime Arcade. 34128578-81 Fax : 34129676 Timber Market Branch Ground Floor.Chundrigar Road.I. 36344700. 34390090 Federal 'B' Area Branch C-28. I. Building.Jinnah Road/Abdullah Haroon Road. Corner M. Phone : (021) 34313536-38. No.S.E. Siemens Chowrangi. Phone : (021) 35302639-44 Fax : 35302637 PECHS Branch Shop No. : 111-777-786 Fax : 32417006 Cloth Market Branch Cochinwala Market. Gulshan-e-Iqbal.A. 34522441. Bahadur Shah Zafar Road. Paper Market. Block . Phone : (021) 34984937. F. BC-6. 1-3. S.A. Karachi Stock Exchange Building.I. Mohammad Shah Street Phone : (021) 32532483-4.24. 32544816-20 Fax : 32532485 Korangi Industrial Area Branch Aiwan-e-Sanat. Phone : (021) 34535861-2. Phone : (021) 35065701-2 Fax : 35050653 M. No. Phone : (021) 32750635-9 Fax : 32750632 Defence Housing Authority Branch Plot No.

Phone : (021) 34904601-2 Fax : 34904603 Tariq Road Branch 124/A. Gizri Phone: 021 -35868991-93 Fax: 021 -35867149 Sea View Sahil Promenade. Sector 5D.I. Defence Housing Authority. 80. P. Scheme 45. Karachi Plot No.T.S. & 4/4-A. Phase IV. Karachi Phone: 021 -35364095-97 Fax: 021 -35371259 Nazimabad Al-Kausar Homes. Plot # 2.35 Fax: 35312837 Gizri K-4/3. Sub-Block “E” Nazimabad.1. Phone : (021) 34398457-9 Fax : 34398456 DHA Phase-I Branch 114. Main Korangi Road. 34015966-7 Fax : 34638115 Nagan Chowrangi Branch Plot # SC-28. State Life Building # 5.Eidgah Branch 166. Khori Garden Murad Khan Road. Britto Road. Phone : (021) 32414138-40 & 32412080 Fax : 32412082 Hyderi (North Nazimabad) Branch Plot # ST-4. 29/10/1. Jinnah Road. Main Shershah Road. Shabbirabad. Main Rashid Minhas Road. Defence Housing Authority. DBCHS.R. Block 3. K. Block 2. 118-119 Z. Phone : (021) 32585001-4 Fax : 32585005 Malir Cantt. Block . Phone : (021) 35887571-73 Fax : 35887574 Hawksbay Road Branch KB-28. 36626066 Fax : 36625402 Gulistan-e-Jauhar Branch Yasir Plaza. Clifton. 118-119-C/1.E. Block 'E'. Block-III. Rufi Shopping Mall Block.H. Opp. Haji Ishaq Market. 32238605 Fax : 32225941 DHA Phase IV.A. Near Light House Phone : (021) 32217290-4 Fax : 32217244 Marriot Road Branch Survey # 67. 32355872-74 Fax : 32355875 Shershah Branch D-283. 32238722. North Karachi. Karachi Phone: (021) 36708980-83 Fax: (021) 36708978 Saddar Branch Shop # 6. 32238717. Phase-I. Malir Cantt. Sheet # M. Marriot Road.3. Garden East Phone : (021) 32238704. M.C. Khaleeq uz Zaman Road. Karachi Phone: (021) 35312832 . A. Landhi Township Phone : (021) 35034451-3 Fax : 35030875 Gulshan Chowrangi Branch Sani Arcade. Karachi Phone : (021) 36957622-621 Fax : 36902210 ANNUAL REPORT 2011 187 . Quaid-e-Azam New Truck Stand Phone : (021) 32355871. 18 Gulistan e Johar Phone : (021) 34638114. Phone: (021) 35658714-16 Fax: (021) 35658717 Johar Chowrangi Branch Plot No. Main Hawksbay Road. Tipu Sultan Road. Phone : (021) 36626004. Ch. Abdullah Haroon Road. Gulshan-e-Iqbal.D.E. 36. 9th East Street. Cantt Bazar. Sector 11-H. North Nazimabad. S. Al-Burhan Circle Hyderi. Block 10-A. Phone : (021) 34815926-7. Quality Godown. Gulshan-e-Iqbal Phone : (021) 34978252. Main Tariq Road Phone : (021) 34386052-5 Fax : 34386056 Landhi Branch Plot No. 194/2/1. Scheme 5. Opp. 34993792 Fax : 34985729 Garden East Branch Silver Jubilee Centre. Scheme No. Near Ismailia Jamat Khana. 10th Commercial Street. Branch Old Malir Cantonment Library. 34815930 Fax : 34815924 Tipu Sultan Road Branch Plot No.

Khayaban-e-Muslim. Karachi Phone : (021) 34911794-7 Fax : 34911793 Urdu Bazar Branch Plot No. Area Karachi Phone : (021) 36337646-47 Fax : 36337648 DHA Phase II Ext. 36-C. 7. Main Road.B. Main Qasimabad Road. Latifabad. Liaquat Market. Karachi Phone : (021) 35312152-54 Fax : 35312155 Shireeen Jinnah Colony LS-27 & 28.3 & 4.A. Karachi Phone : (021)-34860794-95 Fax : 34860793 Gulshan-e-Hadeed Branch A-329 Phase I. Clifton. Marston Road. Shireen Jinnah Colony. Shop No. F. A210. Kutchery Road. Commercial Area. Garden West. Liaquatabad.Jamshed Road Branch Ashfaque Plaza. Plot No.476/1 & 476/2. Karachi Phone : 021-32437917-19 Fax : 021-32437481 Garden West Area Branch Amin Center. RB 10/16-III. Karachi PABX: 021-32765415-6. DHA Phase V. Unit no. Abul Hasan Isphani Road. Hyderabad Tel: 022-2670592-94 Fax: 022-2670591 ANNUAL REPORT 2011 188 .A. Urdu Bazar. 34. Malir City Branch H-11/11. 32725146. Pakistan Chowk. Plot No. Hussainabad. Liaquat Market. New M. Karachi Shop No.24th Commercial Street. M. Saddar Phone : (021) 32725107. 8-C/1. 35877058 Fax : 35877059 Qasimabad. Saddar. S. Sub-Sector. Karachi Fax : 32724928 Steel Market Branch Plot # 8 & 9/D -1. Sector-22. Block 1. Karachi Phone : (021) 34721406 Fax : 34721407 Akbar Road Branch Plot # 294. Opposite St. Plot # 11. Price Ali Road Hirabad Phome : (022)-2660611-5 Fax : 2660620 Latifabad Branch 4/D. Bunder Quarters. 130/I. Jinnah Road. Serai Quarters. Karachi. Karachi Phone : (021) 32214185-89 Fax : 32214183 Abul Hasan Ispahani Road Branch Sani Corner. Ram Bagh. Bombay Bazar. Jinnah Road Phone : (021) 32422679. Artillery Maidan Quarters. Plot No. Block-D. Stadium Lane No. Jamshed Quarters. Phase VI. Plaza Quarters. 2. Block 7. 5. 7. 22 & 23. 1. KDA Scheme 16. Jinnah Road. Opp New Memon Masjid. 44-C. 32724939 Phone : 021-32231005-7 Fax : 021-32231003 Khayaban -e. 32765418 Fax: 021-32765412 Khayab-e-Rahat Plot No. Preedy Street. Rahat Lane-3 DHA Phase-VI. Block 2. Karachi Phone : (021) 35877060. B. Malir Town Phone : (021) 34117134-35 Fax : 34117156 West Wharf Branch Sultan Centre. No. AM-3. Elizabeth Hospital.3/11. DHA Phase II Extension.Shamsheer Plot No. Bin Qasim Bombay Bazar Branch Plot No. adjacent to Hotel Faran.A. Phone : (022) 2786020-22.R. DHA. 774 Fax : 32422526 Phone : 0321-2175625 Khayaban-e-Muslim Branch Plot No. HYDERABAD Plot No. 2784242 Fax : 2786023 Grain Market Branch Aman Center. 12-C. 627. Hyderabad M. West Wharf Phone : (021) 32205966-67 Fax : 2205794 Liaquatabad Branch Plot No 21.R. 31. Karachi Phone : 021-35843263-65 Fax : 021-35842073 Pakistan Chowk Branch Zubaida Manzil. KDA Scheme 33. Karachi Phone : 34974484-6 Fax : 021-34974487 Hussainabad Branch R-471. KDA Scheme Tel: 022-3861562-64 Fax: 022-3861561 Qasimabad Branch Phase I. Karachi Phone : 021-32215703-5 Fax : 021-32215706 Plaza Quarters. Serai Quarters. Faiza Palace. Near PTCL Exchange.

Quetta Shop No. Sanghar Phone: 0235-542500-01 Fax: 0235-542503. 860-864 Ward A.Kashmir Road. Allibhoy Road. Model Town. 4055360 Fax : 5053962 LAHORE LDA Plaza Branch LDA Plaza. Akbar Chowk. Quetta Phone : (081) 2660284 Fax : (081) 2660287 ANNUAL REPORT 2011 189 . Katchery Road Phone : (0244)330723-25 Fax : 330729 TANDO ADAM Plot No. 2841180-83 Fax : 2827562 Hazar Gunji Branch Plot No. Circular Road. Nawabshah Road. Chaman.A. Jacobabad Phone : 0722-650935-36 Fax : 0722-650930 Phone: 0235-576042-44 Fax: 0235-576043 SANGHAR CS # 124/4 Ward-A. 74686 Fax : 75127 Shahdadpur. 333. District Sanghar PABX: 0235-842851-54 Fax: 0235-842855 QUETTA M. LCCHS. 2441663 Fax : (081) 2441665 Model Town Quetta Branch Plot # 35-B. 1-11-12B.2-12(1). 36368905 Gulberg Branch 125/E-I. 35733591 Circular Road Branch A-43/A. SHAHDAD PUR City Survey No. Alamdar Road. Adam Town. Quetta Phone (081) 2838033-34 Fax : 2838025 Sirki Road Quetta Berach Market Chowk. MIRPURKHAS Plot # 864/7. Sirki Road. Station Road. M. 2460821 Fax : 2460519 LARKANA Bunder Road Phone : (074) 4055712. 332. Phone : (042) 35877800-8 Fax : 35754900. Phone : (042) 36306201-05 Fax : 36301193. Gulberg-III. Phone : (081) 111-777-786. Commercial Area. Phone : (042) 37638256-8 Fax : 37653384 Township Branch 47-B/1. Phone : (071) 5628175.SUKKUR B-2823/B-2851. Hyderabad Road. 612541 Fax : 613488 GAWADAR Airport Road. 7-28/4 & 7-28/5.Jinnah Road.A. Opp: Mazar Hazrat Shah Mohammad Ghous. Suraj Ganj Bazar. Gawadar Phone : (0864) 211796-98 Fax : 210185 JACOBABAD Quaid-e-Azam Road. Phone : (081) 2460520. 334. Sarafa Bazar. Main Boulevard. Phase-I. Tando Adam CHAMAN Trunch Road. Truck Stand. Phone : (02338) 74466. Jinnah Road Branch Property No. Block 10. Frere Road. Main Umerkot Road. Phone : (0826) 613440.38 Fax : 2440136 Alamdar Road. 5624753. A / 06 & 07. 2834429 Fax : 2827270 Double Road Arbab Plaza. Double Road. Township. Phone (081) 2832130 Fax : 2827329 Liaquat Bazar Branch Liaquat Bazar. Quetta Phone (081) 2440137 . 5624750 Suraj Ganj Bazar. Quetta Shop No. Balochistan. Hazar Gunji. 35877807 Defence Branch G-9. Phone : (042) 35729722-26 Fax : 35729727. Shahrah-e-Iqbal Phone : (081) 2834425. 4055812. Phone : (081) 2833464-5 Fax : (081) 2833468 Fax : 5628176 NAWABSHAH Municipal Office Chowk. Quetta Phone : (081) 2441961-62. Quetta Cantt. Phone : (042) 35152831-6 Fax : 35113716 Shahrah-e-Iqbal Branch Cut Piece Cloth Market.

Commercial Area.Lahore Plot # 91 . 19. Phone : (042) 35789431-34 Fax : 35755226 Raiwind Road Branch Thoker Niaz Beg. Phone : (042) 35314671-5 Fax : 35314678 Phone : (042) 37674115-18 Fax : 37637303 DHA Phase II Branch 65 CCA. Badami Bagh. Phone : (042) 36012000-30. 30. Phone : (042) 36689016-19 Fax : 36688374 Lahore Phone : (042) 35425528. Ghari Shahu Phone : (042) 36372656. Central Commercial Market. Road.Main Road. Hilal-e-Ahmar Health Complex. Tufail Road. Lahore Stock Exchange Building. 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.Badami Bagh Branch 29-30 PECO Road. Shadman Market Branch 88. Allam Iqbal Town. Allama Iqbal Road. Brandreth Road. 31 Fax : (042) 35425529 Ferozpur Road Branch 18-KM Main Ferozpur Road Phone : (042) 35807812-14 Fax : 35807813 Shahdara Branch Main Shaikhupura Road. Baghbanpura. Wassanpura Phone : (042) 37616252-56 Fax : 36260295 Karim Block Allama Iqbal Town. Liberty Market. Cantt. College Block. 37728074 Allama Iqbal Town Branch 36. Phase-II. Phone : (042) 36307461-68 Fax : 36307460 Baghbanpura Branch 278-G. 36371001 Fax : 36360962 Shahdin Manzil Branch Shahdin Manzil. Shah Alam Market.2. Akbar Block. Allama Iqbal Town. Lahore. New Airport Road. Shadman-1 Phone : (042) 37538116-20 Fax : 37538129 Tufail Road Branch 50/3. Lahore 502-Ali Plaza. 36300586 Fax : 36300589 Samanabad . DHA Phone : (042) 35707581-4 Fax : 35707580 Ghari Shahu Branch 99-A. 36300581. Phone :(042) 37590062-3 Fax : (042) 37590064 Model Town Lahore Phone: (042) 35884670-72 Fax: 35884675 ANNUAL REPORT 2011 190 . Phone : (042) 37704961-66 Fax : 37728636. Samanabad. Gulberg-III. Khayaban-e-Iqbal. Near Australia Building Lahore Stock Exchange Branch Basement Level . Azam Cloth Market Phone : (042) 37643851-55 Fax : 37643860 Shad Bagh Branch 37. Near Fawara Chowk. Umer Din Road. Shahdara Chowk Phone : (042) 37900290 Fax : 37900291 Walton Road Branch E-28/A. Lahore Cantt Phone : (042) 35700301-309 Fax : 35700213 Shah Alam Market Branch 2035-D. Mall Road. Lahore 13 Bank Square. Karim Block Market. Near Bhatta Chowk. Faysal Chowk. Phone : (042) 36844006-09 Fax : 36844010 Ravi Road Branch 13 Ravi Raod. Lahore Model Town. Plot # 4. Raiwind Road. Phone : (042) 37708661-64 Fax : 37708660 Liberty Branch 10-C.T. Phone : (042) 37673401-6 Fax : 37673409 Azam Cloth Market Branch Raheem Centre. Phone : (042) 35432961-5 Fax : 35432960 DHA Extension Branch Divine Centre.

Gulberg II. Lahore 35 Main Boulevard. 10. Atif Chowk. Phone : (042) 37804070-79 Fax : (042) 37804075 Link Road.35281081-5 Fax : 35291090 ISLAMABAD Blue Area Branch 1-B. Phone : (042) 37721966-8 Fax : (042) 37721959 Jauhar Town Branch Plot No. Lahore Phone: (042) 37356640-42 Fax: 37222236 Main Market Gulberg 32-E-Main Market. 435. 136. F-8 Markaz. 30. Fruit Market. Lahore Phone : (042) 37516325 Fax : 0423-37516327 ANNUAL REPORT 2011 191 . 31 Fax : 042-35425529 Sabzazar Multan Road Branch Plot No. Wapda Town Round About Phone : (042) 35211574 Fax : 35211576 Phone : (051) 2653944-49 Fax : 2653940 F-11 Markaz Branch Plot No. 2 & 3. Ravi Link Road. Phone : (051) 2810136-49 Fax : 2279897 I-10 Markaz Branch 4-A. 2 & 4 to 10. 36610534 Islampura Branch 30-A. Islamabad Bedian Road Branch Phone : (042) 37088164 Fax : 35742694 Fortress Stadium Branch Phone : (042) 36623082-86 Fax : 36623087 Wapda Town Branch Plot No. 5. Bridal Centre. B & C. Jinnah Avenue Phone : (051) 2894071-74 Fax : 2894075 F-10 Markaz Branch 4-D. 2854615 Fax: 2260270 Bund Road Branch Main Bund Road. I-10 Markaz Phone : (051) 4435804-6 Fax : 4435807 F-7 Markaz Branch 13-U. 39 Paragon Plaza Phone: (051) 2253002-3 Fax: 2854932 F-8 Markaz. Lahore. Karim Block Market. Lahore Phone : (042) 37539604-5 Fax : 37539608 Stock Exchange Branch Office No. Al Karam Centre. Jinnah Avenue. Jinnah Super Market. Industrial Muslim Block. 189. Officers Housing Scheme. Lahore. 10-A. Islamabad Phone: (051) 2818044-6. F-7 Markaz. Lahore Phone: 042 -35786955. Allama Iqbal Town.28. Chuburji. Mohafiz Town. Johar Town. Guldasht Town. Model Town Branch Shop No. PIA Society. F-11 Markaz. 55-B. Lahore Phone : (042). Block G-1 M. Islamabad Phone : (051) 2228127-28 Fax : (051) 2228129 Ichra Branch 112. I-8 Markaz Phone : (051) 4862563-6 Fax : 4862567 G-9 Markaz. Lahore. Cavalry Ground Lahore Phone: (042) 36610531-32. Markaz F-10 Phone : (051) 2809705-08 Fax : 2809719 I-8 Markaz Branch Plot No. Lahore Phone : 042-37117739-40 Fax : 042-37117738 Karim Block Allama Iqbal Town Branch 502-Ali Plaza. Islampura. Rewaz Garden.Ferozepur Road. Block-F. Phone : (042) 35925801-02 Fax : (042) 35925804 Fruit Market Branch Plot No. Islamabad Stock Exchange Tower. Fax: 36610536 Chuburgi 24-Niaz View Scheme. Main Sanda Road. Near EME Society Main Gate. 34. Ichra. Lahore Phone : (042) 37404868-72 Fax : 37404867 Zarar Shaheed Road Guldasht Town Branch Zarar Shaheed Road. Al-Babar Centre. Islamabad G-9 Markaz. Multan Road. Link Road. Urfi Centre.Cavalry Ground. Near Gulshan-e-Ravi Chowk. Lahore Phone : 042-35425528.59 Fax: 042 -35786964 Montgomery Road Branch 65-Montgomery Road. Awan Arcade. Lahore Phone : (042) 36303081-4 Fax : 36303085 Allama Iqbal Town.A. Blue Area. Islamabad Shop No. Lahore Phone : (042) 36635969 Fax : 36635968 EME Society Branch 50-A.

Rawalpindi Phone : 051-5778592-93 Fax : 051-5778594 Rawat. Park Road. Commercial Area. Main G. Naz Cinema. Saddar. Bagh Sardaran. Rawalpindi Phone: (051) 5706022-23 Fax: 5781483 G-11 Markaz Branch Sardar Arcade. Fax: (051) 4479295 Chowk Sadiqabad Branch Shop # 2-6. Opposite Makkah Cloth. Phone : (051) 5520475 Fax : 5520466 Adyala Road Branch Main Adyala Road. 400/2. 5762010 Fax : 5762007 Bohar Bazar C 211-215. Tehsil & Distt. 13. Tarnol. 378. Phone : (0572)-210837-38 Fax : 210839 ANNUAL REPORT 2011 192 .Grain Market Branch Shop # 40-41. Saidpur Road. Service Road. Murree Road. Jinnah Road (Old City Saddar Road). Saddar Phone : (051) 5700038-40 Fax : 5700042. Chaklala Scheme III Phone : (051) 5766003-4 Fax : 5766005 College Road Branch E/20-26. GT Road. G-11 Markaz Phone : (051) 2830259. Rawalpindi Shop No. Faizabad. The Mall. Phone : (051) 5775325-8 Fax : 5775324 Rawat Ground Floor. Peshawar Road. Bhara Kahu Phone : (051) 2233635. 05811-451910 Fax : 05811-451926 Faizabad Branch Shakeel Plaza. Rawalpindi Cantt. Gul-Noor Market. Tench Bhatta. Muslim Town Phone : (051) 4423078-81 Fax : 4480226 Kahuta Branch Tehseen Plaza. Rawalpindi Phone : 051-4575846-47 Fax : 051-4575849 Saidpur Road. Rawalpindi Phone : (051) 5468401-2 Fax : 5468403 FATEH JANG Rawalpindi Road.Satellite Town. Chak Shahzad. Fruit Market. Shah Plaza. Islamabad Phone: 051-4365103-4 RAWALPINDI The Mall Branch 8. Islamabad Phone : (0514) 611906 Fax : (0514) 611903 Lalazar Branch Tulsa Road. T Road Baghsardaran Branch 12 Ghazni Colony. Rawalpindi Plot No. Bohar Bazar. 2830260 Fax : (051) 2830264 Tarnol Branch Al-Noor Plaza. 2233637-9 Fax : 2233636 Airport Road 7-Fazal Town. 5700029 Phone : (051) 5563728 Fax : 5563730 Tench Bhatta Branch Plot # 396/C. Rawalpindi PABX: 051-4418646-48 Fax: 051-4418649 Naz Cinema Murree Road. Rawalpindi Phone : 051-5570078-79 Fax : 051-5570080 Satellite Town Branch B/20.5762008. Fateh Jang. Abassi Tower. Phone : (051) 4424080-6 Fax : 4424087 Jinnah Road Branch A-351. Airport Link Road. Al-Noor Colony. Sector 3 Phone: (051) 4479290-3. Murree Road. College Road Phone : 051 . I-11/4 Phone : (051) 4438823-5 Fax : 4438828 Bhara Kahu Branch Main Muree Road. Riaz Shah Bukhari Plaza. Tehsil & District Islamabad Phone : (051) 2226621-23 Fax : (051) 2226626 COMSATS Institute of Information Technology (CIIT) Branch Khanna Branch Adil Tahir Plaza. Rawalpindi Phone : 05811-451914. North Star Plaza. Lalazar Phone : (051) 5524904-5 Fax : 5527814 Chaklala Branch 59. Main Bazar. Rawalpindi PABX: 051-4421682-85 Fax: 051-4421680 Peshawar Road Branch Plot No. Rawalpindi Cantt. Gammon House. PAF Road Phone : (051) 3313625-29 Fax : 3313630 Adamjee Road Branch Adamjee Road.

Near Sidhar Bypass. Road Branch 1045-1046.2 Fax : 041-8582147 Babar Chowk Branch 641-A. Rawalpindi Phone : 0514-590019. Jamrrud Road Phone : (091) 5710753-7 Fax : 5710758 ANNUAL REPORT 2011 193 .T. Millat Chowk. B-29 & 30. Phone : (0514) 539425-28 Fax : (0514) 511980 FAISALABAD Main Branch Ground Floor. Main Road. Samanabad.TAXILA Kohistan Complex. Gulistan Colony II. Sir Fazal Hussain Road. Road Phone : 091-2593002-6 Fax : 2593001 Peepal Mandi Branch Ashraf China Trade Center Peepal Mandi. Plaza. Road Phone : (0514) 534012-15 Fax : 535015 Mohra Chowk Mouza Lab Thatoo. G. Chak No.5 Fax : 2540759 Sheikhupura Road. Main Susan Road. Khyber Bazar. Faisalabad Phone : (041) 2518823-4 Fax : (041) 2518825 Bhowana Bazar P-141. Hashtnagri & Industries Opp: Sarhad Chamber of Commerce. Peoples Colony No. Samundri Phone : (041) 3424356-7 Fax : (041) 3424355 Sabzi Mandi Branch New Fruit & Vegetable Market. Hazara Road. Tehsil Taxila. Islamia Road Peshawar Cantt Phone : (091) 5287051-7 Fax : 5287058 Peshawar City Branch Shoba Chowk. Sheikhupura Road. Karkhano Market. Phone : (041) 2627357 Fax : (041) 2540706 PESHAWAR Peshawar Main Branch 6-B. Faisalabad. Officers Colony. Park Inn Hotel Building. Babar Chowk Phone : (041). T. 2640834 Peoples Colony Branch 17-A/2. Madina Town Phone : (041) 8556673-75 Fax : 8556679 Rail Bazar Branch Property No. Peshawar Phase III Chowk.352-A. Montgomery Bazar Phone : (041) 2605806-7 Fax : 2621487 Minerva Road Branch P-64-B.T. Peoples Colony Extension.B. 1. Faisalabad P . Distt. Peshawar City. Phone : (041) 2617436-9 Fax : (041) 2617432. Peshawar Phone : (091) 2564911-4 Fax : (091)-2564910 Jamrud Road. Hayatabad. Opp. Tehsil Sadar. G. 590021-22 Fax : 0514-590020 WAH CANTT 4-1/100. Faisalabad Phone : 041-8582141 . P-81. Gojra Road.8557421-22 Fax : 8557424 Khurrianwala Branch Main Bazar. Phone : (091) 2590023-26 Fax : 2551380 Hayatabad Karkhano Shop No. The Mall. Grain Market. Mohra Chowk. Jamrrud Road. Rail Bazar Phone : (041) 2540801-2 Fax : 2540803 Yarn Market Branch P-78. Faisalabad Phone : (041) 8722636-39 Fax : 8722184 Susan Road Branch P-98/22. Liaqat Road. Street No. 3 Yarn Market. State Life Building. Phone : (091) 5822902-7 Fax : 5822908 G. 245-RB. Radio Station. Menerva Road Phone : (041) 2540763. Faisalabad Phone (041) 2561502-03 Fax : 2561504 Samundri Branch P-35/36. Main Gole Bhowana Bazar. J. Jhumra Road Phone : (041) 4361080-81 Fax : 4361082 Samanabad Branch P-9.

Hazro Gondal Road. Shahi Road. Main Bazar Phone : (0925) 624641. Shahabpura Road. Waisa. District Attock Phone : (057) 2640794-95 Fax : (057) 2640796 GHOURGHUSHTI Timber Market. Near Grain Market Phone : (061) 6244492-95 Fax : 6244496 Hussain Agahi Branch Hussain Agahi Road Phone : (061) 4577242. District Attock Phone : (0572) 662413-15-16 Fax : (0572) 662417 Qutba. Gulgasht Colony. Tehsil & District Peshawar Phone : (091) 2582304-6 Fax : 2582307 University Road. Sialkot Phone : 052-3242671-79 Fax : 052-3242680 RAHIM YAR KHAN 12-A. Road. District Attock Alfalah Centre. Paris Road. G. Sambrial. Tehsil. Vehari Road. Shahrukn-e-Alam Branch 230-A & 251-A. 621008 Fax : 624644 MULTAN Abdali Road Branch 62-A. Abdali Road. Temargarha. Bangash Plaza.Bakhshi Pul Branch Bakhshi Pul Charsada Road. 3255295 Satellite Town Branch 40-A Satellite Town Phone : (055) 3730396-99 Fax : 3251423 ANNUAL REPORT 2011 194 . Hazro. Kamra. Bosan Road Phone : (061) 6210364-5 Fax : 6210363 Lodhran Branch 27-2.T. Phone : (068) 5879880-1. 4591442 Fax : 4591742. Main Mandi Road. Tehsil Hazro Phone : (057) 2872918-19 Fax : 2872916 KAMRA Attock Road. Quaid-e-Azam Road. Main Bazar. Main G. Main Multan Road Phone : (0608) 361700-363001-2 Fax : 363005 Tehsil Hazro. 1009/I. Lower Dir PABX: 0945-825344 Fax: 0945-825346 ATTOCK Opposite Session Chowk. 3847031-33 Fax : 3856471. Kamra Phone : (057)-9317423-25 Fax : 9317420 HANGU Saif-ur-Rehman Market. Main Road. Model Town. Attock Cantt. District Sialkot Phone : (052) 6522801-2 Fax : 6522803 Shahabpura Branch Malik Plaza. Phone : (057) 2701557-58 Fax : (057) 2700248 Waisa Sadaat Market. Road. Kohat Road. Opp: DCO Bungalow. Peshawar Vehari Road Branch 618/B. Shahrukn-e-Alam Phone : (061)-6784201-2 Fax : 6784205 Bosan Road Branch 262-B. Ward # 6. Phone : (061) 4546792-6 Fax : 4781506 Quaid-e-Azam Road Branch Plot No. University Road. Multan Cantt. Gujranwala Phone : (055) 3859931-3. 457725 Fax : 4577232 Chowk Shaheedan Branch Akbar Road. Main Bazar. Peshawar Ground Floor. Chowk Shaheedan Phone : (061) 4588611. Multan Cantt. Phone : 0321-6323231 Fax : 061-4784472 SIALKOT 40/A. Road. 4588807 Fax : 4579024 PABX: 091-5843708-09 Fax: 091-5843710 Temargarha Balambat Road. Ghourghushti.T.T. 4593210 Sambrial Branch G. Phone : (052) 4591741. Qutba. 5885970 Fax : 5879882 GUJRANWALA Opposite Iqbal High School.

Zain Palace. Survey No. Saidu Sharif Road. District Sargodha Phone : (048) 3791158. 610182 Phone : (0937) 873631-3 Fax : 873733 BAHAWALPUR Opposite BVH. North Circular Road. Gujrat Phone : 053-3517995-98 Fax : 053-3517999 MARDAN Plot No. Satellite Town. Phone : (0544) 610162. GUJRAT G. Opp. 128. Sahiwal. Tehsil Pindi Bhattian. Gujrat Phone : (053) 3530069-3530219 Fax : 3530319 Kutchery Bazar Branch Kutchery Road. Makan Bagh. G. 11.SAHIWAL 183-Sarwar Shaheed Road.T. Chichawatni District Sahiwal Phone : (0405) 487802-6 Fax : 487807 ARIFWALA 47/D. Chowk.Main College Road Phone : (0457) 376020-27 Fax : 376024 DERA GHAZI KHAN Jampur Road. Rai House. Farid Town. Qaboola Road Phone : (0457) 835711-12-13 Fax : 835717 SARGODHA 91-C/2 University Road. Phone : (0946) 726745-6. 540808 Fax : 540804 Fax : 610050 MIAN CHANNU Ghazi Morr.95. 111 SB Pull III. Kashmir Chowk. Opposite PTCL Office. 3792066 Fax : 3791169 PAKPATTAN 159 . Main Faisalabad Road. Kazam Kamal Road.T. Shahrah-e-Quaid-e-Azam Phone : (047) 6337704-5 Fax : 6337706 DASKA Al. Phone : (0966) 720609. The Mall. 720610 Fax : 720607 ANNUAL REPORT 2011 195 . Phone : (040) 4467691-95 Fax : 4467696 Farid Town Branch Property No. Dera Ghazi Khan Phone : (064) 2468201-6 Fax : 2468104 MINGORA. Phone : (062) 2889922-5 Fax : 2889874 CHINIOT 1-A. Sargodha Phone : 048-3226647 Fax : 048-3226648 CHAK NO. Phone : (065) 2665301-3 Fax : 2665484 SHEIKHUPURA Main Lahore-Sargodha Road. 3614976 DERA ISMAIL KHAN Plot # 3666-B.67. Sargodha Phone : (048) 3724138-9 Fax : 3724193 Satellite Town Branch 302-A. G. 610172. 726740-4 Fax : 726747 JHELUM Bunglow No.Adeel Plaza. Phone : (040) 4553580-83 Fax : (040) 4553584 Jalalpur Bhattian Branch Mouza Jalalpur Bhattian. Road.S. 386-H. Phone : (056) 3614977-9 Fax : 3787974. Hafizabad Phone : (0547) 501275-6 Fax : 501282 CHICHAWATNI 1-Railway Road. Sabzi Market. District. SWAT Khasra No. Mardan Cantt. Hafizabad Phone : (0547) 540801-3.T. Road. Gujranwala Road Phone : (052) 6616834-35 Fax : 6619650 HAFIZABAD Sagar Road. Circular Road.

T. Jinnah Road Phone : (0442) 550419-22 Fax : 550423 ABBOTTABAD 191. Phone : (0462) 517838-9 Fax : 517841 BUREWALA 95-C. A. Opposite GPO. Block-K. Jhang Saddar. District Jhang. Phone : (047) 7624701-3 Fax : 7624704 Mouza Shumali Shorkot Branch Main Jhang Multan Road. Rawalpindi Raod Road. Baldia Road. 7518780 Phone : (0543) 555206-210 Fax : 555220 BHALWAL 451. Main G.T. Phone : (068) 5802501-3 Fax : 5802704 MANDI BAHAUDDIN Kutchery Road. Mandi Bahauddin Phone : (0546) 520921-23 Fax : 507886 LALA MUSA G. Dera Ismail Khan Phone : 0966-720917 OKARA Plot No. 7518370. 641217 Fax : 644040 GHOTKI 1-13. Near MEPCO Office Phone : (062) 2275504-6 Fax : 2275503 DAHARKI Zafar Bazar. Allama Iqbal Road. Tehsil Chowk. Gilgit Phone : (05811) 51904-07 Fax : 51903 NLI Market. Yousuf Shah Road. Station Road Phone : (0723) 680112-14 Fax : 680118 HAROONABAD 15-C/16-C. M. Abbottabad PABX: 0992-337161-3 Fax: 0992-337166 JHANG 9-D. 2448075 Fax : 2441071 KHARIAN 1. Supply Bazar. Phone : (0992) 344723-6 Fax : 344728 Abbottabad City Shop No. Muslim Plaza. Main Bazar. Cantt Bazar. Phone : (0922) 522791-93-96 Fax : 522797 Main Bazar Branch T-40 & T-41. Gilgit Ghulam Haider Block. 25-28. Gilgit Phone : 05811-451914. Liaqat Shaheed Road. Phone : (047) 5312018 Fax : (047) 5312016 TOBA TEK SINGH 105-Farooq Road. Road Phone : (053) 7536241-42 Fax : 7536245 GILGIT Shahrah-e-Quaid-e-Azam. Kohat Phone : 0922-522007-08 Fax : 0922-522009 SADIQABAD 28-29 D. College Road. Hasilpur Phone : (062) 2448078. Mohallah Jamia Masjid.6644364 Fax : 6642647 Fax : 7518070 ANNUAL REPORT 2011 196 . NLI Market.Tank Adda Kohinoor Super Shopping Centre. Al-Aziz Market. C-15. Ghalla Mandi Phone : (063) 2256401-4 Fax : 2256458 HASILPUR 17-D. Near Ghala Mandi Phone : (053) 7518368. Daharki Phone : (0723) 642868 643549. Phone : (067) 3771901-4 Fax : 3771905 KOHAT Bannur Road. Near Radio Station. Bhalwal Phone : (048) 6644863 . 05811-451910 Fax : 05811-451926 CHAKWAL City Trade Centre. Jutial. Circular AHMEDPUR EAST BRANCH Kutchery Road. Kohat Cantt. Shorkot. Main Mansehra Road. Rizwan Plaza. Road.

3515704-707 Fax : 051 . Distt. Gojra Phone : 046-3517675-7 Fax : 046. 8-12. Gujar Khan Phone : 051 . 414367 Fax : 412988 GUJAR KHAN 58-D & 59-C. Multan Road. Khanpur (068)5577502 . Road. Main Hattian Road Phone : (057) 2313771-2 Fax : 2313773 KOTLA Bhimber Road. Bahawalnagar (63) 2272005-7 (063) 2277437 MUZAFFARGARH Mauza Taliri. Gujrat Phone : (0537) 586892. Gujrat Phone : (053) 7404844-46 Fax : (053) 7404840 Phone : (051) 3572106. Kotli Road. Model Town. Muridke Phone : (042) 7983173-75 Fax : (042) 7983172 JARANWALA P -813. Fatima Khel Phone : (0928) 614634-36 Fax : 614099 CHITRAL D. AZAD JAMMU & KASHMIR 114. Road. 586435 Fax : 586337 MIRPUR. District Kasur Phone : (049) 4421071-3 Fax : 4421075 MANSEHRA Punjab Chowk.C. 3570763 Fax : 3570227 ANNUAL REPORT 2011 197 . Mirpur.KASUR Shop No. G. Adjecent to Mazar Hazrat Baba Bulley Shah.T.3. Choa Road. Distt. Azad Jammu & Kashmir Phone : (05827) 436834-7 Fax : 436838 KALLAR SYEDAN Ghousia Shopping Centre. Block III. 5577617. 5577627 HAZRO 273-M. Jaranwala Phone : (041) 4319003-4 Fax : (041) 4319005 BAHAWALNAGAR Shop # 6. Dinga. Kotla Arab Ali Khan. Opposite Mountain Inn Hotel. G. Sector F-1. 3. 586915.3515703 GOJRA P -85. Rail Road Phone : (0492) 765218-9 Fax : 770890 Pattoki Branch Allama Iqbal Road. Distt. District Mansehra Phone: (0997) 321949 Fax: (0997) 321357 BANNU Gowshala Road. 303592 Fax : 300567 Oghi Branch Main Bazar. Haripur Phone : (0995) 627451-2 Fax : (0995) 627831 DINGA Thana Road.3517878 MURIDKE G. Shahrah-e-Resham Phone : (0997) 303591. Ghallah Mandi. Attalique Bazar Phone : (0943) 414396. Road. Street No. Akbar Kiani Shopping Mall. Nia Bazar. Office Road. Kallar Syedan (068) 5577805 HARIPUR Main Shahrah-e-Hazara. Muzaffargarh (0662) 428920-23 (0662) 428931 KHANPUR Kutchery Road. Bohar Wali Gali. Tehsil Kharian.T.T.

Dagar Gharbi. Rajana Road. Hospital. District Khanewal Phone (065) 2211901-4 Fax : 2211906 PIR MAHAL Mohallah Kasurabad. Jhang Road Phone : (0453) 516068-70 Fax : 516071 SKARDU Taqi Plaza. Mandi Faizabad Phone: (056) 2881032. District Khanewal Phone : (065) 2555701-4.WAZIRABAD Sialkot Road. Turbat Phone : (0852) 411556-58 Fax : 411417 BATTAGRAM Opposite D. District Khushab Phone: (0454) 723760 Fax: (0454) 723758 Mandi Quaidabad Branch Plot # 156/1.Q. Fax : 237791 BHERA Property No. District Jhelum Phone : (0544)-632723-4 Fax : 632557 Hussaini Chowk Phone : (05831) 54700-703 Fax : 54704 TURBAT Main Road. Circular Road Phone : (0542) 413300-9 Fax : 413310 LORALAI 1062-1063. Block # 2. JAHANIA Main By Pass Road. Shahrah-e. Chakwal Road. Mohalla Ali Bhutta Phone : (048) 6692162-3. 6609480 Fax : (055) 6609450 JAUHARABAD Plot # 2. Mall Road.H. Phone : (051)-3413210-2 Fax : 3413149 DINA Mahfooz Plaza. G T Road. 2201600 Fax: (056) 2882086 Nankana Sahib Branch 53-Grain Market Phone : (056) 2877574-5 Fax : 2877577 MIANWALI Watta Khel Chowk.Resham Phone : (0997) 310222 Fax : 310377 ANNUAL REPORT 2011 198 . Fax : 2555710 JINNAH COLONY. Talagang Phone : (0543) 410791-4 Fax : (0543) 411030 MURREE Sharjah Center. Wazirabad. 6609470. Mianwali Phone : (0459) 237794-6. Jauharabad. Zhob Road Phone : (0824) 660852-5 Fax : 660851 BHAKKAR Plot # 458. Distt. Gujranwala Phone : (055) 6609460. Chak # 89-10/R. 12/302. Depalpur Phone : (044)-4542223-25 Fax : 4542220 NAROWAL 496/A. Tehsil Jahania. Sargodha Road. Pir Mahal Phone : (046)-3366430-31 & 3366381 Fax : 3366382 DEPALPUR Kuthcery Road. Fax : 6692161 TALAGANG KHANEWAL Cinema Road. Railway Road. District Khushab Phone : (0454) 880056-58 Fax : 880057 MANDI FAIZABAD Main Jaranwala Road. Block-D.

District Diamer Giligt-Baltistan Phone: 05812-450475-76 Fax: 05812-450477 JAMPUR Opposite TMO Office. Block 14. District Chiniot Phone : 047-6214470-1 Fax : 047-6214475 HAVELIAN Tanoli Plaza. G. District Rajanpur Phone: 0604-567136-38 Fax: 0604-567135 LAYYAH Chubara Road. Ghallah Mandi. Gole Bazar. Muzaffarabad. Chakwal Road. Road. T Road Rawat. Shakargarh. Rajanpur Road. Chishtian. District Gujranwala Phone : 055-6815791-2 055-6815796 Fax : 055-6815790 Kotli. AJ&K Aashiq Hussain Plaza. Islamabad Phone: 0514-611906 Fax: 0514-611903 ANNUAL REPORT 2011 199 . Tehsil & Distt.T.RABWAH PHALIA Hailan Road. Tehsil Phalia. Rabwah. Layyah Phone: 0606-413525-27 Fax: 0606-410010 MUZAFFARABAD Tanga Stand. Qaboola. District Mandi Bahauddin Phone: 0546-566051 Fax: 0546-566054 CHARSADDA Tangi Charsadda Road. Phalia. Ground Floor. Havelian Bazar. Pishin Phone : 0826-420744-5 Fax : 0826-420748 SWABI Swabi Bazar. Azad Jammu & Kashmir Phone : (05826) 448393-94 Fax : (05826) 448395 PISHIN Bund Road.T. Maneri Payan. Chenab Nagar. Charsadda Bazar. District Pakpattan Phone: 0457-851130-32 Fax: 0457-851129 RAWAT Ground Floor. Chillas. Mardan Swabi Road.CHISHTIAN 29-B. Railway Road. AJK Phone: 05822-920982-4 Fax: 05822-920985 NOWSHERA Taj Building. Ameer Muawya Chowk. 6511007 Fax: 091-6512002 CHILLAS P-4. Near Layyah Minor. Main G. Kamoke. Road. Bank Road. Nowshera Phone: 0923-611697 Fax: 0923-611425 QABOOLA Rana Ghulam Qadir Market. Riaz Shah Bukhari Plaza. Choa Saidan Shah. Tehsil Arifwala. Swabi Phone : 0938-223811-3 Fax : 0938-223814 CHOA SAIDAN SHAH Rab Nawaz House. Jampur. District Chakwal Phone : 0543-580862-64 Fax : 0543-580865 DC Chowk. District Abbottabad Phone : 0992-812006-8 Fax : 0992-812009 KAMOKE G. Opposite Ghafoor Market. Charsadda Phone: 091-6510013-14. Kotli. District Norwal Phone : 0542-453001-09 Fax : 0542-453010 CHENAB NAGAR . Main Bazar. Havelian. District Bahawalnagar Phone : 063-2509145-6 Fax : 063-2509455 SHAKARGARH Ayub Market.

Sector 11. Block#13-A. 34154118. 33 & 43. Khi.5 Kehkashan Clifton. Saddar. Berar Cooperative Housing Society Phone : (021) 34860321-2 Fax : 34860320 Port Qasim. Waisa.B. Karachi Plot # LS32. Block 10 Phone : (021) 36362194. North Nazimabad Phone : (021) 36633133 & 36633177 Fax : 36633135 DHA Branch. Renala Khurd. Hazro Gondal Road. Karachi Phone : (021) 36964648-49 Fax : 36964739 Nazimabad Branch Ground Floor. 500208 Fax: 0833-500209 WAISA Sadaat Market. 24. Sector-16 Korangi Industrial Area. Shahrah-e-Faisal. Artillery Maidan Quarters.I. Sibi Phone: 0833-500206.Chundrigar Road. 34750445 Fax : 34750438 F. Phase II Extension.Uni-Towers. Nazimabad. Karachi 23-C. Karachi Plot # B-24/A. Phone : (021) 35869271 Fax : 021-35869270 ANNUAL REPORT 2011 200 . Karachi Phone : (021) 35061661-4 Fax : (021) 35067031 Gulshan-e-Iqbal Plot # 40-B. District Attock Phone: 0572-662413-15-16 Fax: 0572-662417 YAZMAN Chak No. Plot # 25.A. Block A. Shamim Apartments. Sub Block A. Welcome Road. Durya Lal Street.Karachi Plot # D-69 Block 7. 112. District Bahawalpur Phone: 062-2703021-22 Fax: 062-2703024 ISLAMIC BANKING BRANCHES Uni-Tower. Plot # 27/28. Karachi 213 . Jinnah Road. Karachi Phone : (021) 36662271-72 Fax : 36662264 North Karachi Shop # 3-11 Sarah View Phase II Sector 11-B. Karachi Ground Floor. Jodia Bazar. to W-2/1/3. Main Bazar. Karachi Plot # W-2/1/1. SITE II (Super Highway Phase I) Phone : (021) 36881246-7 Fax : 36881249 Orangi Town. 36362197 Fax : 36362226 SITE II. 1. Gulistan-e-Jouhar Phone : (021) 34661355-7 Fax : (021) 34661359 Korangi Industrial Area Shop No. 56-DB. Gulshan-e-Iqbal.5 Fax : (021) 32430492 Gulistan-e-Jauhar Pakistan Tulip Valley Plot No. North Western Industrial Town Phone : (021) 34750439. Karachi Ground Floor. Karachi Phone: 021-36727802 Fax: 021-36619538 Saddar Branch Plot # 292 &266. Karachi Phone : (021) 35313873-80 Fax : 35313872 Dhorajee. Yazman. Main Khayabane-e-Ittehad. Block # 1. KDA Scheme No. I. Karachi Phone: 021-35639081 Fax: 021-35639086 Clifton . North Karachi. Karachi Phone : (021) 32446542 .RENALA KHURD Plot No. Orangi Town. 2636350 Fax: 044-2636360 SIBI M. Fort Mansion. District Okara Phone: 044-2636340. 8.P. SB-1. DHA. Karachi D-3. Row # 1. Near Round About # 5. Area. Block #1. Fortune Center. Karachi Phone : (021) 34144650. Tehsil Hazro. Main Bahawalpur Road. KDA Scheme No.52 Fax : (021) 34144653 North Nazimabad. Phone : (021) 32472295-8 Fax : 32472141 Shahrah-e-Faisal. Phone : (021) 34315271-4 Fax : 34313581 Jodia Bazar Plot No. Regal Chowk. Karachi Plot # 35/127 Block 7 & 8 C.

Fax: (042) 36524710 DHA Phase VI. Phone : (042) 35746191-5 Fax : 35746190 39.A. Main Lahore. Mozang Chungi. Near Masjid Farooq-e-Azam. Phone : (051) 2879580-3 Fax : 2879589 G-10 Markaz. Phase VII. Lahore Phone (042) 37502811-15. SITE.Km Ferozepur Road. Islamabad Plot # 3-J. REDCO Plaza. Lahore 69-R-I. Karachi Chung Branch. River View Road. Islamabad Phone : 051-4493714 Fax : 051-4493715 ANNUAL REPORT 2011 201 . Plaza One. Blue Area. 13. Daroghawala. Lahore Phone : 042-35125080 Fax : 042-35125081 Daroghawala Branch Plot No. G-10 Markaz Phone : (0511)-2819101-05 Fax : 2819100 I-9 Markaz. Lahore Phone : (042) 37114612-16 Fax : (042) 37114618 Mughalpura Branch Opposite lalpul. Johar Town. Kahna Nau. Phone : (042) 37499215-19 Fax : 37499220 Phone : 021-32588312 Fax : 021-32588314 Kot Abdul Malik. Lahore Kot Abdul Malik. Johar Town. Lahore Phone : 042-37662845-8 Fax : 042-37651672 New Garden Town. DHA Lahore PABX: 0322-4355597 Jinnah Avenue. Modern Godown. Road. 35781856 McLeod Road. Sector I-9. 9. Markaz Islamabad Phone (051) 4858562-64 Fax : 4858560 Bahria Town Branch Plot No. Branch Street No. Lahore Cantt. Phone : (042) 37211631-5 Fax : 37211640 Phone : (042) 37902536. Islamabad 78-E. Lahore Opposite Benz Factory. Mughalpura Phone: (042) 36524701-09. Azam Cloth Market. Township. Jinnah Avenue. G.Civic Centre. Gulberg. Gulshan-e-Ravi Lahore Phone : (042) 37404811-20 Fax : (042) 37404821 Qurtaba Chowk Rehman Chambers. Karachi Block..T. Lahore Phone : (042) 37490041-5 Fax : 37490046 Wahdat Road. Main Boulevard Phase VI. Sardar Plaza. Lahore 139-Main Circular Road. Chowk Shah Alam Phone (042) 37374081-5 Fax : 37374086 Azam Cloth Market Branch Property No. Lahore. Lahore Abid Plaza. Islamabad 20-A. Defence Housing Authority. Lahore Awami Complex Block # 1. Lahore 14-Main Wahdat Road. Lahore 93-Y. Main Road. Sector A. Bahria Town. Jehangir Raod. Lahore Phone : 042-35271601-02 Fax : 042-35271603 Zarrar Shaheed Road 1500-F. Main Branch.Shershah Branch D-175. M. 37902539 Fax : 37902540 Shah Alam. Shershah. Fax : 37502820 DHA Phase II. Phase III. Misri Shah Branch 455-Main Shad Bagh Road. F-1185. Qurtaba Chowk. Commercial Mall. Main Multan Road. DHA Phase II. Lahore 66-Main Boulevard.327. Islamabad Phone : 051-5707131-2 Fax : 051-5707130 Multan Road. College Road. Phone : (042) 35313401-05 Fax : 35313406 Phone : 042-36533491-4 Fax : 042-36533495 Kahna Nau Branch 23 . Commercial Area. Dubai Chowk. Lahore Phone : (042) 36613855-62 Fax : (042) 36673224 Phone : 042-37612821-5 Fax : 042-37612826 Gulshan-e-Ravi Block F. Lahore 115 -J. New Garden Town. McLeod Road. Phone : (042) 35846374-85 Fax : 35846386 College Road Township Branch Y Block. JBW East. Misri Shah Lahore. Lahore Chung Stop. Main Multan Road. Mini River View. Sheikhupura Road. Phone : (042) 35781841-55 Fax : 35781875. Zarrar Shaheed Road.

Branch 310. Masjid Road. Tehsil and District Chakwal Phone : (0543) 590676 Fax : 590673 Pindi Ghaib Branch Banora Chowk. 5-B. 24-25. Faisalabad Square # 14. Mansehra Road Phone : (0992) 344723-6 Fax : 344736 Gujrat Branch Zaib Plaza. Supply Bazar. Block-A. Faisalabad Phone : 041-2605645-50 Fax : 041-2605644 Sargodha Opp. 5885803-5 Fax : (068) 5885668 Cantt. Plot No. Shahbaz Town Phase 4. Faisalabad Phone : (041) 8522113-4 Fax : 8522116 Satyana Branch. 35-B Model Town Phone : (081) 2838932. Federation of Employees Cooperative Housing Society. Quetta Phone : 081-2866548 Fax : 081-2866552 Hyderabad Branch Propert No. Peshawar Ground Floor. Rawalpindi Dera Islamil Khan East Circular Road. Road. Khadim Ali Road. Block-5. Block B. 396. Sector E-11. Gulgosht Colony Phone : (061) 750941-5 Fax : 750885 Jamrud Road. Gulberg Road. Opposite National Hospital.T. Hyderabad Cantt Phone L (022) 2730867-72 Fax : 2730873 Abbottabad Branch 27-A.36. Phone : 051-4834630 Fax : 051-4834629 Kutchery Bazar Faisalabad P . Jail Road. Satellite Town Phone : (051)4452048-9 Fax : 4452050 Khayaban-e-Sir Syed Branch Saggoo Centre. Bosan Road. Liaquat Road. Dhudial. Rawalpindi 125-D.5 Fax : 3241306 Rahim Yar Khan Shop No. Faisalabad Phone : (041) 8559361-64 Fax : 8559635 Medical College Road. Phone : (041) 8581602-04 Fax : 8581582 Gulberg Road. Block 2. Canal Raod. Sargodha Phone : (048) 3726804-7 Fax : 3726808 Faisal Arcade G. Main Double Road. Islamabad Phone : 051-2515491 Sialkot Ali Building. Kutchery Bazar. Faisalabad 597-B. 80.E-II. Jamia Masjid Hamid Ali Shah. Satyana Road.T. District Attock Phone : 0572-523335-37 Fax : 0572-523394 Bewal Branch Samote Road. Rawalpindi 400-B. Main Double Road. 5828138-40 Fax: 091-5828137 Tehsil Gujar Khan Fax : 051-3361269 ANNUAL REPORT 2011 202 . G. Khayaban-e-Sir Syed. Toopanwala Gate Dera Ismail Khan Phone : (0966) 710141-2 Fax : 710139 Quetta Branch Shop # 1&2. Commerical Market. Hasan Abdal. Peshawar Phone : (091) 5701385-89 Fax : 5701392 Hayatabad. Village & Post Office. District Attock Phone : (057) 2350123-8 Fax : 2350120 Hasan Abdal Branch Hamdan Building. Multan 262-B. Road. Hayatabad. Sialkot Phone : (052) 3241302 . Grain Market Phone : (068) 5885331. Gujranwala Phone : (055) 4557301-05 Fax : 4557310 2. Rehman Shaheed Road Phone : (053) 3609501-3 Fax : 3517499 Dhudial Branch Dhudial Chowk. Commercial Complex. Murree Road. Opp: Punjab Medical College. Chak # 204-RB. Saddar Bazar. 1 & 2. Site II. Village Dhera Kanayal Bewal. Faisalabad 1-Ramana. Phase V. 397 & 398. Plot # 7. Phone : (041) 2603021-5 Fax : 2603028 Canal Road Branch. Peshawar PABX: 091-5828136. 2832130 Fax : 2899012 Masjid Road Branch Plot No. Sector II. Rawalpindi Phone : (051) 5795184-88 Fax : 5795189 Satellite Town. Branch Plot No.

Vehari Fax : 067-3360918 Bahawalpur Branch 12-B. Jalalpur Jattan. Khushab Phone : 0454-711200-711722 Fax : 0454-711736 OVERSEAS BRANCH BANGLADESH DHAKA Dhaka Branch 5-Rajuk Avenue. Mission Chowk. B-1055.Satmasjid Road. Dhaka 1212. 6-1/36 & 6-1/37. Box # 1375 Phone: (00973) 17203100 Fax. District Rahim Yar Khan.Jalalpur Jattan Branch Kashmir Nagar. Civil Lines. 8861704 Fax : 8850714 CHITTAGONG Agrabad Branch 57. Niazabad.O. Shahkot. Sangla Hill. Jhelum PABX: 0544-622406-9 Fax: 0544-520075 District Gujrat Fax : 053-3431745 Khushab Branch Shaheryar Market. Mailsi. District Muzaffargarh Phone : 066-2240176-77 Fax : 066-2240173 Shahkot Branch Circular Road. Karkhana Bazar. Road. Shar-e-Nau Phone : (009375) 2004105-10 Fax : 2002142 Phone : 056-3711431-32 Fax : 056-3711437 Sukkur Branch Plot No. Circular Road. District Nankana Sahib Fax : 0563-701052 Sarai Alamgir Branch Al. Distict Khanewal Phone : 065-2400401-03 Fax : 065-2400408 Kot Addu Branch G. 11. 10/NP Main KLP Road. Jhelum Saeed Plaza. Phone : (00880) 0161-001477 Mailsi Branch Colony Road. (00973) 17224300 Phone : (081) 2833639 Fax : (081) 2833619 Sadiqabad Branch Chak No. Level 17. District Nankana Sahib AFGHANISTAN KABUL Kabul Branch 410. Gulshan North. Chamber of Commerce & Industries. Chittagong. Bangladesh Phone : (0088) 171-888727 SYLHET Sylhet Branch Marchant Tower 582 East Mirza Bazar Phone: (00880821) 2830679 Fax: (00880821) 2830677 Dhanmondi Branch. Bahrain Financial Harbour. Mumtazabad Multan Fax : 061-6242002 Vehari Branch Plot No. Sukkur Phone : 071-5620972-3 Fax : 071-5620974 Mission Chowk. 1302. Sadiqabad.T. Bangladesh Phone : 0088 02 8861848. District Vehari Fax : 067-3750031 Mumtazabad Branch Vehari Road.A. Near Jamia Masjid. Circular Road. Sarai Alamgir. Kabirwala. Tower West P. Block E. Kot Addu. Chahrahi-e-Sadarat. Gulshan Avenue.T. Near Ghausia Chowk.Saeed Shopping Centre. 5706017 Fax : (068) 5800014 ANNUAL REPORT 2011 203 . Phone : (068) 5706016. Dhanmondi. Quetta HERAT Herat Branch Ground Floor. Mianwali Road. Bangladesh 81/A. Heart Blood Bank Street Phone : (0093-40) 230705-07 Fax : 230704 KINGDOM OF BAHRAIN MANAMA (OBU) Suit No. Bahawalpur Phone : 0622-889913-15 Fax : 0622-889918 Kabirwala Branch Khanewal Road. Motijheel C. Agrabad. District Gujrat Fax : 0544-654586 Kamalia Branch Mohallah Mehtianwala. Road. Branch Shop No. Kamalia District Toba Tek Singh Fax : 046-3413277 Gulshan Branch 168. Phone : (008802) 7168821-05 Fax : 9557413 Sangla Hill Branch Fawara Chowk. Near New Bus Stand. G. Bunder Road. Model Town-B.

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(Member’s signature on Rs. as my/our proxy to vote for me/ us.Revenue Stamp) 2. I. or notarized copy of such Power of Attorney must be valid and deposited at the Share Registrar of the Bank. not less than 48 hours before the time of the Meeting. As witness my/our hand this _____________ day of ________________________. 5/. Chundrigar Road. Karachi. ANNUAL REPORT 2011 . attested copy of beneficial owner's Computerized National Identity Card. In case of proxy for corporate members. Registrar Services (SMC-Pvt) Limited. who is also a member of the Bank. holding _____________________________________ ordinary shares. Office No: 1108. 2012 Witness: ________________________________ Name:___________________________ CNIC/Passport No:_________________ Address:_________________________ ________________________________ ________________________________ 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. and on my/our behalf at the 20th Annual General Meeting of the Bank to be held on 29th March 2012 and at any adjournment thereof. D. The proxy must produce his/her original identity card at the time of the Meeting. M/s. 3. Account and Participant's ID numbers must be deposited alongwith the form of proxy with the Share Registrar. hereby appoint ________________________________________________________________ of ___________________________________________________________________________or failing him/her ______________________________________________________________________________ of ____________________________________________________________________________. An instrument of proxy and a Power of Attorney or other authority (if any) under which it is signed. speak and vote on his/her behalf. I/We ________________________________________________________________________________________ of ________________________________________________________________ being member(s) of BANK ALFALAH LIMITED ("the Bank"). 11th Floor. he/she should bring the usual documents required for such purpose. In case of proxy for an individual beneficial owner of CDC. Trade Centre.I.FORM OF PROXY Folio/CDC Account No. A member entitled to attend. and vote at the Meeting is entitled to appoint another member as a proxy to attend. F.