BANK ALFALAH CONTENTS Page No Notes to and forming part of the Unconsolidated Condensed Interim og Financial Information (Un-audited)COMPANY 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. Khi Director Mr. Ikram Ul-Majeed Sehgal Director Mr. Nadeem Iqbal Sheikh Director Mr. Atif Bajwa Chief Executive Officer Mana Saeed Al Otaiba Board Audit Committee Mr. Abdulla Khalil Al Mutawa Director Mr. Khalid Mana Saeed Al Otait Director Mr. Nadeem Iqbal Sheikh Director Mr. Yasar Rashid Secretary Board Strategy and Finance Committee Mr. Abdulla Khalil Al Mutawa Director Mr. Khalid Mana Saeed Al Otaiba Director Mr, Ikram Ul-Majeed Sehgal Director Mr. Atif Bajwa Chief Executive Officer Mr. M, Iftikhar Shabbir Secretary [ol [BANK ALFALAH QUARTERLY REPORT MARCH 2014 Board Risk Management Committee Mr. Khalid Mana Saeed Al Otaiba Director Mr. Abdulla Khalil Al Mutawa Director Mr. Ikram Ul-Majeed Sehgal Director Mr. Atif Bajwa Chief Executive Officer Mr. Haroon Khalid Secretary Board Human Resource Committee Mr. Abdulla Khalil Al Mutawa Director Mr. Khalid Mana Saeed Al Otaiba Director Mr. Nadeem Iqbal Sheikh Director Mr. Atif Bajwa Chief Executive Officer Mr. Mian Ejaz Ahmad Secretary Chief Operating Officer Mr, Bahauddin Khan ‘Company Secretary Mr. Mian Ejaz Ahmad Chief Financial Officer Mr. Mirza Zafar Baig Auditors KPMG Taser Hadi & Co Chartered Accountants Registered / Head Office B.A Building 1.1. Chundrigar Road, Karachi, Pakistan. \wwnw-bankalfalah.comDIRECTORS’ REVIEW (On behalf of the Board of Directors, | am pleased to present the unconsolidated condensed interim financial information of the Bank for the three months period ended March 31, 2014, Three months Three months period ended period ended March 31,2014 March 31, 2013, (Rupees in '000) Profit before provisions and taxation 1,832,538 1,659,480 Provisions /(reversal) against loans and advances — net 62131 (66,082) Provisions for diminution in value of investments 66,848 | 728,979 Profit before taxation 1,703,559 Taxation $75,075. 516,09! Profit after taxation 7,128,484 1,011,292 Earnings per share Rs 0.84 Rs.075 Performance Re! The Bank’s profit before tax was recorded at Rs. 1,704 million in the first quarter of the year 2014, an increase of 11.5% over corresponding period last year. Earnings per share for the quarter were Rs 0.84 as compared to Rs. 0.75 in first quarter last year. Net interest income earned in the quarter ended March 31, 2014 was Rs. 4,288 million, an increase of 12.14% over Rs. 3,824 million recorded in corresponding quarter last year. Total assets of the bank have risen to Rs. 615,886 million at March 31, 2014 as compared to Rs. 610,614 million at December 31, 2013. Net investments were also recorded at Rs 229,600 million at end of first quarter 2014, which is an increase of 4.5% since year-end December 2013. Non performing loans (NPL) of the bank were Rs 18,275 million as at March 31, 2014. NPL to gross loans ratio of the bank was recorded at 6.8%, which is better than the industry average and signifies the effectiveness of bank's credit risk management. Economic Outlook: Major economic indicators have remained positive in the first quarter of the year 2014 with year-on-year inflation levels recorded well within single digits (7.9% in February 2014) and strong growth witnessed in large scale manufacturing sector. The fiscal deficit has been contained with provisional estimates of 3.1% of GDP during the first nine months of the fiscal year.Credit to private sector has also shown improvement. Pakistani Rupees has appreciated by about 6.5% against dollar during first quarter of 2014, which is mainly attributable to improvement in foreign exchange reserves positions of the country and positive sentiments on the economic front. Foreign exchange reserves of the country improved to above USD 5 billion by end of March 2014 with receipts of foreign assistance of USD 1.5 billion and release of Coalition Support Fund proceeds. Despite the positive outlook, structural weaknesses remains in the economy and issues such as power shortages and law and order remains to addressed. The discount rate has been maintained at 10% by the State Bank of Pakistan. Looking Ahead: Given the positive outlook in the back drop of key challenges faced by the economy, the Banking industry would need to stay focused on the fundamentals in order [02 [BANK ALFALAH GUARTERLY REPORT MARCH 2014 to post consistent results and cultivate long term growth. Bank Alfalah will continue to provide peerless services to its customers through latest products and technology, supported by an expanding branch network and other delivery channels. Bank strives to diversify revenue streams and improve its operational efficiency while pursuing effective cost controls across the organisation. Bank believes in giving back to the society through its various corporate social initiatives. We hope to play a positive role in the economic growth of the country while posting consistent results for our stakeholder. Credit Rating: PACRA, a premier rating agency of the country, has rated the Bank ‘AA’ (double A), Entity Rating for the Long Term and Al+ (A one plus) for the Short Term. These ratings denote a very low expectation of credit risk, a strong capacity for timely payment of financial ‘commitments in the long term and the highest capacity for timely repayment in the short term, respectively. The unsecured subordinated debt (Term Finance Certificates) of the Bank has been awarded a credit rating of AA (double A minus). Acknowledgments: On behalf of the Board, | would like to thank the State Bank of Pakistan, Ministry of Finance and other regulatory authorities for their continuous support and guidance. We would also like to thank our valued customers for their continued trust and express gratitude to our shareholders for their oversight and support. The Board would also like to acknowledge the hard work and professionalism of our employees who have always played a key role in the success of the organization despite the challenging business environment. ATIF BAJWA Director & Chief Executive Officer Date: April 27, 2014 Place: Abu Dhabi BANK ALFALAH QUARTERLY REPORT MARCH 2014 | 03 |BANK ALFALAH LIMITED BANK ALFALAH LIMITED UNCONSOLIDATED CONDENSED INTERIM STATEMENT OF FINANCIAL POSITION UNCONSOLIDATED CONDENSED INTERIM PROFIT AND LOSS ACCOUNT (UNAUDITED) ‘AS AT MARCH 31, 2014 FOR THE THREE MONTHS PERIOD ENDED MARCH 31, 2014 ees Recenve +t. Noto Three months Three months anit 28 period ended —_period ended (Unaudited) (Audited) March 31,2018 March 31,2013 (Rupees in 000) ‘Rupees in 000) real Mark-up / rotum /intorest eared 11,818,640 10,671,824 farkcup /retum / interest e2mo 218, 6714 Cash and balances with treasury banks 64,216,595 61,204,697 Teaco earn? umect nonon Veatt outers Balances with other banks 20,337,905 35,179,983 Net mark-up/ interest income “4,288,328 3,824,048 Lendings to financial institutions 7 16,159,222 2,522,022, Investments - net 8 | 229,600,117) | 219,890,369 Provision / (over) aga! vane ae vances nt ai (waa) ey revision for diminution in value of investments Ad 9 | 285,124,048] | 280,779,860 ee een fe Fixed assets 10 15,142,953, 14,835,200 278 RIT Deferred tax assets 915,322 41,204,000 [Net mark-up / interest income aftr provisions 160.347 3,681,838 Olher assets 14;389,754 15,196,170, 615,886,217 610,614,201 ‘Non mark-up / Interest income Fee, commission and brokerage income Tai 23 oa 345] Dividend income 102'375} 127,017) MASIION®, Income from dealing n foreign currencies 379°250} 334,801 Bils payable 10,749,215 9,543,480) Gain on sale of securities - net 271.186 319,293) Borrowings 48,170,923 23,115,102 Unrealized gain (loss) on revaluation of investments Deposits and other accounts 11 | s0177,270] | 525,525,770 classified as held or trading - net 29.616] (2.286 Subordinated loans 9,990,000 9,991,000] ther income 471.616] 443,571 “Total non mark-up / interest income 2,055,307 7,863,741 Lapis against assets subject to finance lease - : 6.214.658 5,555,679 Deferred tax liabilities eS : ‘Non mark-up / interest expenses Oiher liabilities 15,055,288 10,537,195, $85,442,698 678,712,647 ‘Administrative expenses 326,398 4002.36 Provision against off balance sheet obligations 4050] 4,328] —maer oe Provision | (reversal) against other asseis, 147 336} (18,658) NET ASSETS EDIE 37207744 belie eae pee) Total non mark-up /interest excenses £511,085 4028,292 REPRESENTED BY 1,703,559 71527,387 Share capital 13.491.563 13,491,563, Extra ordinary / unusual tems : Reserves 7,024,446 7,274,222 Profit before taxation 7,705 559 7.627.387 Unappropriated profit 5,713,013, 7,499,831 =~ iG 26,229,022 28,265,616 aie Current 604,068] 63,763) Surplus on revaluation of assets - net oftax 4214499 3.696.126, ao Geel a 30,449,521 31,904,744 Ae eae SBOE Ed CONTINGENCIES AND COMMITMENTS 2 Profit after taxation 4,128.44 3,011,292 AE 21282, (Rupees) ‘The annexed notes 1 o 18 form an integral part ofthis unconsolidated condensed interim financial information Basie! Diluted oarnings per share 8 Ba 075 “The annexed nates 1 to 18 form an integral part ofthis unconsolidated condensed interim financial information (Chief Execitive Officer Director Director ‘Chairman ‘Chief Executive Officer Director Director Chairman ([04 [BANK ALFALAW GUARTERLY REPORT MARCH 2012] (BANK ALFALAH GUARTERIY REPORT MARCH 7014 [05]BANK ALFALAH LIMITED UNCONSOLIDATED CONDENSED INTERIM STATEMENT OF COMPREHENSIVE INCOME (UN-AUDITED) FOR THE THREE MONTHS PERIOD ENDED MARCH 31, 2014 BANK ALFALAH LIMITED UNCONSOLIDATED CONDENSED INTERIM CASH FLOW STATEMENT (UN-AUDITED) FOR THE THREE MONTHS PERIOD ENDED MARCH 31, 2014 (06 [BANK ALFALAH QUARTERLY REPORT MARCH 2014 Three months Three months Note Three montis Three months Petiodended period ended parted enced pariod ended March 34,201 March 31, 2013 wa ete cenit (Rupees in‘000) (Rupees in 000) ‘CASH FLOWS FROM OPERATING ACTIVITIES Prot bate taxation 4703.559 4527387 Prof after taxation 1ize4sd 1.011.202 Lest: Divan inc 102.375 ‘2717 601-184 7,400,570 Other comprehensive income Aajustnant Seprecaton aaa soa toms that are oF may be reclassified subsequently to profit and lass account anoreaon s1ai8 40.954 Previn fever) soanstloen and eaves ret e231 ($5,082 xchange dferonces on taslation of nat vestment in fosian branches, (476.473) 196,673 Provision fr diner inal thesis esiaa 198,175 Provision aga of-talnes see obits 1,080 4328 Comprehensive income - ransferred te unconsolidated condensed interim froin / revere) agains oer aeets wa738 (18.858) statement of cranges in equity e530 206.968 neato ng) /ieve on chien fener hassle as aor ag nl e266) 2206] Components of comprehensive income not reflected In elt 0d gobs wana arecty - | vt ey Gain oncote of aes exeeta net (9.156) (2 Surplus (dei) on revaluation of aalabe for sale secures - net of Charge fer dane beat pan 71308 70375 ‘Supls (df) on revaluaon of avallable forsale secures - not of tax (638,526) os few P2s0.e22 987487 Total comprehensive income Go ecsina 1 io wnt ses {ange fheneansons n086,77 werTa olor bodes socutien (oiszaa4y (021636) parencen 5392770 16,704 ‘The annexod notes 1 to 18 orm an integral part ofthis unconsoldatod condensed intrim nancial information. Fes ccna eapanedmusinenan) sere ere Taste) 7087,850), Incest (eerste) in operating ibios is pve 1208755 TT] sorownes 25,131,308 934a,e74 Doposte ae ote eeouis (24,048 500) (6,853,800) Ofer bates ‘raze (as2242 towns ast eos Ta015776) Tesae.77) ratty pis : = Inca to pss 1,015,910 710970) Net cath generates oman) operating ates 73,631,606) 73,208.47) ‘CASH FLOWS FROM INVESTING ACTIVITIES Net ivesimens fr aalati for sae secures BRB D0E Tose TiO Nat vesinen hel to aturty scutes (a2r7a97 2.906.023 Necimeimont asec cpaos - - Duisoa nese acebed 73.248 ra778 Invest nf esas atsar (2s.c65] Proeaad rr al ed arts s45i0 2988| Net cash generated fom/ (edn investing ects woa.808 TaseH 881) ‘CASH FLOWS FROM FINANCING ACTHTES (Redergton)preseds rom suborntd lane 112000) __ 000,000, Neteath gonertes om {use n)ancing actos (1300) 35:0,00 Exchange ference on rarston one net nvesmertsnforen benches aT5.a73 "95.673, Decress in aah and cash aqulatnta 214,265) (e655) ‘ceed cash eqarlerse begin ofthe period 96,051,214, 85,555,740, Cae ard cas equvatans a onde We prod “ s9.616.95 72.051.185 Tho annoxed nots‘ o 18 form an integral par ofthe unconsldated condensed inter fnacil information. ‘het Exectve Officer Director Director Chairman ‘hiekExective Officer Director Director Chama BANK ALFALAH GUARTERLY REPORT MARCH 70% | 07]BANK ALFALAH LIMITED UNCONSOLIDATED CONDENSED INTERIM STATEMENT OF CHANGES IN EQUITY (UN-AUDITED) FOR THE THREE MONTHS PERIOD ENDED MARCH 31, 2014 Copal Reson Revere = ner share “Stay exchange Orappropsnd Total opt Tension raft : re Balance a at Jeruary 1, 2013 ssasieas—Asraam "noeasor”37aas 25804007 ‘cnangee nequtyter trae montne anced ‘Maren 12019 ‘Total comprchensive income Prt tert (thar comprehensive Income [Exchange ieronce on ransaion of ret eetnentn eign branche ‘Transactions with onners,oconded deci oauhy Fil cash biden forthe eer ended Deconbor 31,2012 20% “reser savor resen lance a at March 31, 2013-19 proeontd ‘Change inequity fer ne month ede ‘Total comorehensive income Prt tert (Other comprnenane aco [xchange trance on vanaf retveetnoatin erg anchor Reenter bern ans Rete ac chaoe “ere tom spl on matin of “Traneatons wi omer, ocordedarectiy in oguty Teaser sans resene ‘Change inequity fer tse mentha ended March3t, 2018 ‘Tosa comprehensive income ‘ther compronena income [Esehange tarancn on rrsaton of ret aerating anon “rrr om curl onrevatnin of ston “Traneation nth onnara, ocorded rect oguty Fl eatvcend re esr onde December 31,7013 @20% “Teater saoryesene Balance meat March 1, 2014 esr 195873 2 - soss| |__sas] 7 Was Te Taso acest) area Tame awa THAR] [TT . seeana seae 2 * 6.12} (26,102) : i - rma 22) oe a =|] eosars a a (arsars aos : aa) = ape ime erase Sepa + Treen sets undr ut 2) he Bang Canons snc, 62 eens) Gams) 25007) (Chief Execiive Officer Director BANK ALFALAH QUARTERLY REPORT MARCH 2014 Director ‘Chairman BANK ALFALAH LIMITED NOTES TO AND FORMING PART OF THE UNCONSOLIDATED CONDENSED INTERIM FINANCIAL INFORMATION (UN-AUDITED) FOR THE THREE MONTHS PERIOD ENDED MARCH 31, 2014 1 STATUS AND NATURE OF BUSINESS Bonk Allan Limted (the Bank) 1s a banking company incorporeted In Pakistan on June 21, 1992 68 a pubic tmted ‘company under tne Companies Ordinance, 1984. It carmenced ls banking operations on November 1, 1992. The Bank's registered ofice is at . A. Bulding |. |. Chuncrigar Road, Karachi and is sted onthe Kerach, Lahore and Islamabad Stock Exchanges, The Bank is engaged in banking services 2s described in the Banking Companies Ordinance, 1962 and is ‘operat through 423 conventional banking branches including 10 sub branches (2013: 423 branches inclucing 10 sub branches), 10 overseas branches (2019: 10 branches), 140 Islamic banking branches (2013: 140 branches) and t offshore bning unt (2013: t unt). ‘The Secuites and Exchange Commission of Pakistan (SECP) vie letler EMD/239/407/2002-734 dated December 18, 2019. has granted an exemption to the Bank ffom the preparston of consolidated financial informaton of the Bank and is ‘subsidiary company namely Afaian secures (Private) Limited Pekislan Credit Rating Agency Limited (PACRA) has assigned a lang tem credit raing of AA [Double A and a shart term ‘ret rating of AT [A one plus] tothe Bank 2 BASIS OF PRESENTATION 21 accordance with he directives ofthe Federal Govemmentregarcing the shifting ofthe tanking system to isamic maces, the State Bank of Pakistan has issued varius ceculars ftom time to time. Penissible form of trade-elated modes of ‘nancin Includes purchase of goods by banks from their customers and immediate resalo to them at approprate mark-up in price on defered payment basis. The purchases and sales arising under these arrangements are not refected inthis ‘unconsolidated condensed intenm financial information as such, but are reticted to the amount of fscity actualy utised ‘ard the appropriate portion of mareup thereon. 22 The Tnancial results of the Islamic banking branches have been consolidated in this unconsolidated condensed interim {nancial information for reporting purposes, ater eliminating materia inter branch transactions / balances. Key financial figures ofthe Islamic Banking branches are dsciosed in Arnesure I to this unconsldated condensed inte financial Information, 23° The disclosures made in this unconsolidated condensed interim financial nformaton have been limited based on the format proscribed by the Stale Bank of Pakistan through BSD Circular Letir No. 2 dated May 12, 2004 and the requirements of Intemational Accounting Standard 34, “inter Financial Reporting’. They do not incluce all ofthe information required for ‘he ful annual fnanclal siatoments and this unconsoldated condensed intorim financial information should be read in carjunction withthe financial statements of the Bank forthe year ended December 31, 2013, 3 STATEMENTOF COMPLIANCE 34 The unconsolidated condensed interim financial information ofthe Bank forthe period ended Narch 31, 2014 has been prepared in accordance wih the requirements ofthe Intematonel Accounting Standard 34 - Inerim Financial Report, Provisions ofthe Companies Ordinance, 1984, Banking Companies Ordinance, 1982 and directives issued by the Secuies ‘and Exchange Commission of Pakistan and the State Bank of Pakistan in case where requrements der, the provisions of the Comparies Ordinance, 1964, the Barking Comparies Ordinance, 1962 and the seid directives have been follomed. 32 The Slale Bark of Pakistan has deferred the applicability of Inlematonal Accounting Standard (IAS) 39, Financial Inscuments: Recogniton and Measurement’ and Intematonal Accounting Standard (IAS) 40, ‘investment Property for banking companies through BSD Circular Letier No. 10 dated August 26,2002 tt further insrucions. Further, the Secuties ‘and Exchange Commission of Pakistan hes deferred the apaleabilty of Intemational Financial Reporting Standard (FRS) 7, "Financial Instruments: Disclosures’ on banks though its nobfcaion & RO 4 (1/2008 dated Apr 28, 2008. Accordingly, the Toquroments of these standards have not boon considered in tho proparation ofthis unconsolidated condensed interim financial information. However, inesiments have been cassifed and vaived in accordance with the reqirements prescribed by the State Bank of Pakistan through various creulars. BANK ALFALAH GUARTERLY REPORT MARCH 70% [ 09]33 34 TA 72 In edition, the Securities and Exchange Commission of Pakistan (SECP) has notifed the Islamic Financial Accourting ‘Standard (IFAS) 1 - Muraboha issued by the instute of Charlered Accountants of Pakistan. IFAS 1 was elective for financial periods boginning on or aftr January 1, 2008, The standard has not been adopted by Islamic branches of conventional banks pending resolution of certain issues e.g: nvocing of goods, recording of mventories, concurrent application with other approved accounting standards in place for conventonal banks, etc. Pakistan Banks Assocation ‘and Vodaraba Association of Pakistan have takon up the issue withthe SBP and SECP. Employees Stock Option Scheme ‘The Bank's Employees Stock Option Scheme (ESOS) was duly approved by the Bank's Shareholders in ther Annual General Meeting held on March 29, 2013, subject {o approval of Secuniies and Exchange Commission of Pakistan (SEGP), As required by SECP, 2 further approval of shareholders for issuance of new shares under ESOS (without Issuance of right shares) was also obtained inthe Extra Ordinary General Meeting of the Bank held on November 22, 2013, Under the ESOS, the Bank shal grant share options tothe employees selected by the Boards Compensation Committee. The SECP has accordingly approved the ESOS vide its Letter No. SMDICIWIESOSO2/2013 cated ‘December 27, 2013. The scheme is applicable om the year 2014, ‘SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ‘The principal accounting policies and the methods of computation adopied in the preparation of this unconsolidated condensed interim financial information are same 2s those applied inthe preperation ofthe annual nancial statements ofthe Bank forthe year ended December 31,2013, GRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS The basis and methods used for cilical accounting eslimales and judgements adopled in this unconsoltated condensed interim financial information are same as those applied inthe preparation of the annual fancial statements ofthe Bark forthe year ended December 31, 2013. FINANCIAL RISK MANAGEMENT ‘The Bank's Financial Risk Management objectives and poicies are consistent with those disclosed inthe annual ‘nancial statomerts for tha year ondod Dacembor 31, 2013, LLENDINGS TO FINANCIAL INSTITUTIONS Note March 31, December 31, 2013 2013 (Unaudited) —_Austed) (Rupees in 000) Cal money londings ™ sosses 2.522022 Repurchase agreement lenings (Reverse Repo) 72 11096,474 16,159,202 ‘Those represent long fo financial instutons et interest rates ranges from 0.10% to 12.78% por annum (December 2013: 0.92% to 13.25% per annum) wih matures upto November 2014 (Devember 31, 2013: November 2014). ‘These represent short-erm lending to financial institutions agains! investment secures. These cary markup at rates upto 10.25% per annum (December 2013: Ni) with matutty upto May 2014 (December 31, 2013: Ni). [10 [BANK ALFALAH QUARTERLY REPORT MARCH 2014 2,522,022 a2 INVESTMENTS - NET Investments by typet Het fortraing secures Moret Treas is remeas Beds sk Bosse ‘ane ors secures Moret Treasuy es Pati vse Sande Fly pil ua Ses / uns - Liss Fy palo onary Se = Ure Teen Fence Cetates Preece Sarit Preece Saes-Unies sk Bonds Het tome scutes Maret Treasury Se Pail vsmertGonds Tem Farce Cafes akin Ee Benes ‘re Untes Now ‘Ovoses Bonds sk Bonds ‘ala nance Lites ‘tal GHP ave Fund ‘Aah GHP hore Miler Fue ‘fs GHP wari Fund ‘an GHP Cath Fane ‘tan GHP estar Maraponent Lntod IotMerey Nast Fan siosdany ‘Alo eau (it) Lod Less: Provisioner diinon vale ot inectnnts Anse (of poss) Subs en ran of ned fr rng eats nt Supls efi en rerautn of ‘ala rel seutiaret Total vestments Particulars of provision for diminution in value of i ‘Opening balance ‘Charge forthe period / year Reversals Ter 7 Baal JP water ane “nae ‘asta “I sera i nr Jf atts] sor sf anne waa TA ais as Ea] | annem || ere oso al] a sone | Ta saan |] saan] ‘ena 30] sae 2H} ststat|] asa =|) ansa| tata Sf secede Tf denen ‘hata 2H] aees|] tonsa =|) rasan ‘eas Sf “ess tenass =H) “nes sam socal] “sown sro} satan =f satisal] sma saan “sos Somes) —TweTON SIT ARRON ra “| sar “ane areon “]f aeterr|| sez wars 525,876) 3 528.676 25,083 - 526.88] eats aeausel] assay ase seca seenzsl] ast ans} aL aL aa saris ae —aaanat aon aa =] a] san “a oom ea0|| 100 smoen zon =|] zecx|| eon =|] aan zon) 2] steel] en Lf neo soca |] steal] oman sna ‘wan 2] “tsas|] “oem ‘moat suc =H|__ sacl sail =I|__ sata 2assars ase amar a em —_.__ eae, __mumo.___esem. Tease poet aces hanes apna aaneat 2 sna. sine _eimuo, sin “wrasse ances biases eae - wees ous ‘aoe antes tweens aera wsi2se4 grasoo 7 pigarouat ___apesme __igsnse0 Provicion wrtlon off during the poriod/ yor ‘Closing balance March 31, Decomber 31, 2014 2013 (Unaudited) (Audited) (Rupees in'000) 6/130,860 6,123,518 Tati 392.368 (4.523) (297,569) (7, 5,197,708 6,130,860 BANK ALFALAH QUARTERLY REPORT MARCH 2014 | TI_]8.3. Particulars of provision for diminution in value of Investments by type and sogment ‘Avallable for sale securities Listed companies / mutus Preference shares ‘Aaritocn Limited funds Listed securities ~ Term finance certificates = Gharbwal Cement New Aled Electronics Uniisted companion = Fully pald up ordinary shares of Re. 10 each ~ Pakistan Export Finance Guarantoe Agancy Limited = A-Hamra Avenue (Private) Limited = Ward Telecom (Private) Lirited Unileted socuritios ~ Term finance certificates ‘Aagard Nino Lirtod Flying Board & paper Producte ‘Security Leasing Corporation Limited | ~ Security Leasing Corporation Limited = Preference shares = First Dawood Investment Bank Lined Trust investment Bank Limited Hold to maturity securitios Unlisted securities = Term finance certificates /sukuk bonds ~ Agitach Limited 2 (BRR Guaralan Modaraba ‘Socutty Leasing Corporation Limitod Sttara Peroxide (Private) Limited = Stara Energy Limited Zulekna Textile Mils formerly Kuna Textile Mis Limited) Investment in subsidiary company Unitsted company ~ Fully pald up ordinary shares of Rs. 10 each ~ Alfalan Secures (Private) Limited 9 ADVANCES -NET Loans, cash credits, running finances ete, in Pakistan ‘Outside Pakistan [Net investment in nance lease in Pakistan ‘Outsice Pakistan Financing and investing assets under IFAS 2 Varah Bis discounted and purchased (excluding market treasury bls) Payable ln Pakistan Payable outside Pakistan Specific provision against non-performing advances General provision against advances [12 [BANK ALFALAH QUARTERLY REPORT MARCH 2014 Note March 31, 2014 (Unaudited) December31, "2013 (Audited) ‘(Rupees in 000) 108,835 6,598 2185 5,725 50,000 4.366.796 76,220 21,800 6629 23,887 15,000 25,000 485,000 20,234 30,260 113.643 7,928 26.290 826,000 6,197,708 108,835 8,120 2185 9,725 82,500 4.386.796 76,220 21,500 eat 24,628 15,000 25,000 495,000 20,234 31276 50771 7.926 2302 826,000 5,130 860, 238,887,767 237,800,611 ‘olg00,638, __“ 13,900,374 748,828,405 — 251,590,985 ee TIPO RS TSBs 4.796.694 4,760,623, TEBESOB] [TSE 95H 595.908 594.156 2255416 13,108,110 268,189,978 — 273,827 237 92 [Cases] [“Caatary 73.028.029) (43.047 447) REA OO aa 2a 923 ‘Advances include Rs. 18,275 mitfon (2013: Rs. 17,847 millon) whieh have been pleced under non-performing status as detalles bei: or 1,201 Un eta Chased haranes, “___ProvisonRoqued Domsée Owes Tl Dorm Ones Tel Ta fino —— ‘augoy st sstecin Obert Nas aire ssa meso ue tex ame sen sora a ee ee eer Doss ree Te ee tt ise ous ara tomes steed _mapner_tosT@ _stion_soomeet 7460 ros! e759 iene wast ash 7s Seen 31209 seg Coste Ais von ni omni Doneris Owns Ts! Oomesie Orns Tos) Donebs_Orcets Te 2 eupecia- aegoy ssn be ses pec Metind ‘aan 9a rene « » Ea sonore a ee ee Dats zovart Toa Zia WISES gs TNS spurs wos a gum me sn aa Particulars of provisions against advances rear STS MOAR) SENSIS pring nce sana arene Exeergeaguiontendebernoronats i ‘efor epee wasc] Tees] aren] acces] cea] azar Rovere /receses us ml 3 zm] OBES) ZS CHS Arcata ten ct sae) ensen) nar pasar) hs tlre Rise INS WOME TS ONT The addional proft arsing from avaling te forced sales value (FSV) benef - net of tax at March 31, 2014 which is not avalabio for dstrouion as either eash or stock dhiend to sharehokiers amountod to RS, 1,283,585 rnilion (2013: Rs. 1,355 810m). Goneral provision against consumer loans represents provision maintained at an emount equal to 1.5% of the fuly secured performing parla and 5% of the unsecured performing portolo as required by the Prudertal Regulations issued bythe State Bank of Pakistan. General provsion for oversaas branches is maintained in accordance wth the guidelines of tre auortes in the respective countries, General provision also includes reserve required io he mabrtained against fiancing to Small Enlerprises (SE) as requled under ‘the revised Prudential Reguations for Small nd Medum Enterprise Financing issued by the State Bank of Pakistan during the year 2013. Under the revised regulations, effective September 30,2013, banks have been requiedto matin general reserve atleast equvalento 1% ofthe secured and performing SE portioio and 2% of the unsecured and performing SE potflo, BANK ALFALAH QUARTERLY REPORT MARCH 2014 | 13 ]1” 404 102 2 22 124 March ecember 34,2014 31,2013 (unaudited) (acid) FIXED ASSETS (Rupeos in 000) Cantal workin progress 1\o01.002 017.888 Property ane equipment sieeve 347 586 Incangibe assets 523.095 — sane s63. _iaass-700 ‘Throe months ported onded 7% "warch ‘March 34,2014 34,2019 (Unaudited). ‘Additions to fixed areste (Rupees in"000) Ofc premises 6.503 41604 LLeseohots improvements zorsea 238 tee equemarte Sesie90 sasans Furetire ard Bros start 48549 Venistes 3 ‘1005 Additions to Intangibles Computer sotmare sazit ses Disposals of fxed assets Otc promise Z : LLeasenets Improvernente 22.208 100 OGice equtments 20,981 nara Furr and feturos 3.082 405 Voniciee 499 anus March December azo 31.2013, (Unaudited) (Aust) DEPOSITS AND OTHER ACCOUNTS. (upees in 000) customers Fiend dopo wo2i3s18 —125;540025 Savings deposits wrsasre7s—172)895.25 (Curent accounts -non-emuneratve yasaaeco — 4a7.028e01 Stes gesez __ eaigaat Wis tasa01 aes s7o;807 Remuneratve deposits Nowremuneraive dopocte ERBE TT ‘eo, Pessina, —aessasoa. mrar2r te soe 770 Direct credit substitutes Goverment taegs7a raza It) Banking compares and other nancial nstutons 2a 20749 IB) Otore 767 162 04730 exes asss ‘Traneaction - related contingent iabities —, ee Goverment 41970409 98,122204 1) Banking compan and otter nancial nettuons "125,702 "136.396 im) Oners aarenest _anees ace Leters of creat 62,116.063 __o#,cn2.955 eceptances: s7.979,196 __12,940.696 Other contingencies Claims agahnet the Bank not scknowedaed a debts 2gen.s00 __ 7.006.009 ‘These mainly represents counter claims filed by the borrowers for restrieling the Bank for disposal of assets (such as hypothecated / mortgaged / pledged assets kept as secunty),damage to reputation and ceases Tiled by EX. employees of the Bank Tor damages sustained by hem consequent to the termination ‘rom the Bank's employment. Based on legal acvice and / oF internal assessment, management is, Confident that the matters will be decided in Bank's favour and the possibility of any outcome against the Bank is remote and accordingly no provision has been made in this unconsolidated condensed interim Financial information, [14 BANK ALFALAH QUARTERLY REPORT MARCH 2014 25 26 ‘ar 28 129 1240 raat 2 “ 8 184 Maren December 312014 31,2013 (Un-tudited) (Audited) Commitments in respect of forward lendings. ‘(Rupees in 000) Commitments to exlend credit 00525, __4370.810, Comments in respect of vestments = toro Foor Commitments in respect of forward exchange contracts Pursnaso 75,959,160, __54,097,511 Sale 53775941, __ 42,386,576 Commitments In respect of forward foreign currency options Purchase 52010 52.010 Sale 52010 52.010 Commitments for the acquisition of fixed assot 205,61 401972 Commitments In respect of repo transactions, Repurcass —30,150.370 __4625,270 Resale sr15,708, = Other commitments Donatons 36,000 61,000, Contingency fr tax payable (note 15) Maren Maren 31,2014 34,2013 (We-eudited) —(Uraucited) BASIC AND DILUTED EARNINGS PER SHARE (Rupees in 000) Prof afer taxation forthe period 1125.08 sori202 (umber of share inthousend) Weighted average numberof ordinary shares 1940.185 __1340.355 (Rupees) Basic and ditted earings per share oes O75 Marc December 34,2014 34,2013 (Unaudited) (Audited) CASH AND CASH EQUIVALENTS {Rupees in 000) Cash and balances with treasury banks 64216505 61204807 Balances wih other banks 20,397,305 35,178,883 Call money landings Soesos1 2.522072 vereraum nostro accounts hd ‘TAXATION “The income tax assessments of the Bank have been finalized upto and including tax year 2013. Matters of cisagreement es! beiween the Bank and tax authorities for various assessment years ana ate pending wil {the Commissioner of inland Revenue (Appeals), Appelialz Tribunal inlana Revenue (ATIR), High Court of Sindh and Supreme Court of Pakistan These issues mainly felate to addition of mark up in suspense 10 Income {axabity of pont on goverment seeuntes.bad debts wren of ana dsatowances etatng To promt and loss expenses, For all assessments finalized upto tax year 2013, adequate provision has been made by the Bank in these ‘nancial statements. In respect of tax years 2010 and 201, the tax authorities have disaliowed certain Expenditures on aceount of non-deduction of withholding tax resulting in adaitiona demand of Rs.141.226 mnillon and Rs 861 367 milion respectively The management's appeals in respect of these add-nacks are Gurenty pending win me Commicsioner gr niana Revenue (Appcals). The management le contdent that this matler wil be decided in favour ofthe Bank and consequently has not made anly provision in respect of these amounts. In respect of monitoring of withholding taxes on profit on debt, the Bank has received various orders with ‘aggregatedemand of Re 118.099 million (afler reductionon reciifications) for tax years 2008 fo 2013. The Bank has fied appeals before various tax appeliate forums against these orde's and the management 1s, confident that the matter wil be deeidedin Bank's favour BANK ALFALAH QUARTERLY REPORT MARCH 2014 | 15 ]16 _ RELATEDPARTY TRANSACTIONS Parties are considered to be related if one party has the ability to contro! the other party or exercise significant influence over the other party in making financial or operational decisions and include major shareholders, suDsidiary company. associated companies wih or without common directors, retirement benefit funds and directors and key management personnel and their close family members. Banking transactions with the related parties are executed substantially on the same terms, including mark-up rates and collateral, as Unose prevailing at the time for comparable transactions with unrelated parties and do not involve more than a normal risk ‘Contributions to and accruals in respect of staf retirements and other benef plans are made in accordance wath the actuarial valuations / terms of the contnoution plan . Remuneration fo executives Is determined in accordance with the terms of their appointment 1641 Details oftansoctons wih the related partes and balances wth them as at perad end areas folows: Mort 201 awit a soos suse recs Magnet secites Seay SHEE a Sms! ome epee Dapents fairy tot pt veoh suerte 8 sans Perry tepid cos mag ROUT Smash ase Weston tis arate it ae asses aE GAD sa tone es gy wow agen Tas 5am Aaaness Baten pt mea ens eee - sg0ns Deoruron oan ny pees am 38774 207 Aparna eg tape 2 eso sas 21208 Aabrralteeolte et = 361 450135 = sae =e corres abr atotag hope Ce ae a Invern ed : eden ss be es 2 2 ws s “ aerate et “uw ize) ies sp 5s Pros eld aginst ivesinets as Tae is atbonedngs Rep tracy pee : = 400m : . 0 formas rn apr : : : : : : Agere eit sac ar Satrnatoett es ‘ Calendngs Revserepo Sauer atten l ep 3 2 z 3 Pomerat pid . : ; : : Weseowa ig te ete 2 Sets atverott et [16 [BANK ALFALAH QUARTERLY REPORT MARCH 2014 162 163 164 Decor. 2071 dtd) ey psec recat Manager seated ewes Ssncary rl m= Comers Peon _ raps Depts Sane abana sao SinT tease aaa eo Poomresasry heer STs TSG TOCEDITT weTeNsH aS = eases naan te at roam oss aeaeay) rarer ere = os nance ater ar 7G ne 4asegst aya 5175 aaron ant tsrng ety - seman = ms - zr Danrserzis cine yu S maMs Hes See Sess epamteant uba oyae ui ni ‘i ren ater oe ar ai ez 0 7H etree pment ar < + Scour” zaseuns apm ata isomers curg Bor wm oon ere. Aaderceradnnestsca te et 2 rousia) ung moma ose, cyan i ar = = isso gars __ seco 778308 Prison ant estes _— es es ee ‘utbenoings Repo wena gig ar : _ E Soro dutg ayer : = aceon : 2 3 ase epamrtsdra Peyer ume, " natn ar - cco) 7 “400650 Callens Reese ‘Baan st toning ey Posmetsaans eye socagon saceuan We en Be Z cee, erry Soon stne staat March December 3,204 34,2018 (Unaudited) (Audited) (Rupees in 00) Advances Running thane Subsidiary company : “Ober riled paren 2erii0 2569206 Long trm loans + Subeidary company sooo 0,000 *Otrerreiatos parog seragz3 1347508 Contingencies and commitments Letter of ere and acceptance oustanding je0z01 9.508 (Guorantos euistansng 2106969 2,195,709, Customer Accounts PLS sccounis| = Ober related patos aerape —3a77.123 Curent accounts + Subsidiary company 54817210 + Otrerelated partes 519443 839)260 Fikod dopost accounts Oe resto patos 2aeaa 204,170 BANK ALFALAH QUARTERLY REPORT MARCH 2014 | 17 ]March December ‘Three months poriod ended 34,2018 34,2013 March March (Unaudited) —_(Auattog) 31,2014 31,2013 (Rupees in 000) (Unaudited) (Un-sudited) (Rupees in'000) Balances with subsidiary company 16.10 Transactions with other related patios Markup receivable on advances 30,901 2o.824 Mark-up income on advances 108,620 94,628 Markup held in suspense 30,901 27,684 Markoup suspended on avances to Waleen Telecom Limited z es Provieion held against investment 826,000 826,000 Mark-up suspended on advances to Warid Telecom Limited 9.588 Rent receivable 8.168 7864 Rentincame from Warid Telecom (Private) Limited 5.803 5097 Provision held against rent receivable 8.158 7808 Rontineame from Watoon Tolocom Limitod 3,266 1413 Deposit balance 528 17.210 Rentincome fom Alfalah GHP Investment Management Limited “4 810 Brokerage payabie 18 75 Rentexpense peining to Watgen Telecom Limited 2,880 3.240 PPaymontin respect of eperating ted ascots acquired - 4900 (Charge for security services to Securty and Management Services (Privat) Lniied and Weakerhut Paksian (Private) Liited nar 45,233 Balances with associated companies Payment to Watson Tetecom Limited for purchase of ‘uipment and maintenance charges 30,238 46,098 Advance tent from Alfalah Insurance Company Limited : 168 Provision mage during the period in respect investment Rent ReceWabe from Aifalan insurance Company Limited 333 : in Watid Tolocom (Private) Limited - 183,000 Provision mage during the period in respect of svateicinvestrents 17,500 : 16.7 Balances with other related parties Commission received irom Warié Telecom (Private) Limited 4.389 6239 Capital gain onsale of shares of Urited Bank Limites 8.982 Rent receivable from Warid Telecom (Private) Limited : 37,980 Markup paid o Taavun Pit Lid arate 37462 Advance rent ftom Wand Telecom (Private) Limited 27 Markup paid oIGI Income Fund 6.222 2.438 Rent receivable from Wateen Telecom Limited F 1413 Markup paid to IGI Aggressive Income Fund 3.909 232 ‘Advance rent trom Wateen Telecom Limited 1.800 4.000 Markup paid o Afalah GHP Income Multiplier Fund 320 - Rent receivable ‘rom Altalah GHP Investment Management Limited 2.353, Paymentto Mono (Pvt) Lid for Branchless banking services sare 1208 Rent payabie to Wateon Telecom Linited = 5,000 Payment of Undermiting Fee to United Bank Limited : 41350 Provision held against investments in Werid Telecom (Private) Limited 4.968796 4.366.796 Paymentto inttuto of Barkers Pakistan for Calondare & Datos ot. 126 159 Provision held agalnst investments in Wateen Telecom Limited : Contrbation to employees provdent fund 83678 52,987 Provision held against rent receivable from Warid Telecom (Private) Limited : 37,980 CContbition to Grataty fund T1903 76.375 TFs held by Taavun Pvt Lid 499,200 499,200 ‘TECs hla by IS! income func 11648 111/660 ‘TFGs held by IGi Aggressive Income Fund 74.087 74,080 16.11. Tho key management personnel rectors compensation ao as follows: ‘TFCs held by Alfalan GHP Income Multiplier Fund 6,124 6,124 Salaties and Alowances 258.019 168.839 Three months period ended seaeth Biase In addition the Chiet Executive Offoer and other executive officers are provided with the Bank maintained car as per Bank's (Unaudited) (Un-auelted) wee (Rupees in "000) 47 DATE OF AUTHORISATION 16.8 Transactions with subsidiary company This unconsolidated condensed interim francil infrmation was authorised for issue on Apt 27, 2014 by the Board of Mark-up income 78 491 toed ‘Brokerage expense 130 200 Rent income a4 366 pe aenena ‘meee Mioe. bate sponses otha aubaia ary Gompey/ai paid By the Banke Comparative information has been re-lassifed, rearranged or addionaly incorporated inthis unconsoliated condensed Interim financial information, wherever necessary, to falitte comparison and to conform with changos In presentation In Transactions with associated companies the current perio. Insurance premium paid to Afalah Insurance Company Limited 409596 323.439 Rent income from AMfalah Insurance Limited 499, 399) Dividend income from Alfalah GHP Islamic Fund : z Dividend income from Alfalah GHP Value Fund Dividend income from Alfalah GHP Cash Fund 20,067 23619 Dividend ineome from Alfalah GHP Income Multiplier Fund 5.483 z ‘Chief Executive Officer Director Director Chairman [18 [BANK ALFALAH QUARTERLY REPORT MARCH 2014 BANK ALFALAH QUARTERLY REPORT MARCH 2014 | 19 ]ANNEXURE -1 ISLAMIC BANKING BUSINESS “The bank’ operating 140 llanle Barking branches ae avs 21, AsseTs (Cash and balances wih reasury banke Balances wih and ue from franca nstutions Landings to Frarcialrstivions brvostmonts ‘sare fnaneing and relate assets Food assets Ober asses ABILITIES Bils payable Borrowings Deposits and other accounts “Corrnt accounts “Saving accounts “Tar depos Cohers -Depest tom fancilnstulons- Remuneratve “Deposits rom tnancal mettuons Non Remuneratve ‘Ober lebties NET ASSETS REPRESENTED BY alae banking tan Exchange eqatizaton reserve Unaperopitd /urremited prot Surplus on revaluation of oaaoto Remuneration to Shariah Advisor / Board ‘cuaRITY FUND pening Baionce ‘Adiions during the petiod Receives rom customers on delayed payments & Others Dividend Pureaton Nn-shatah compliant income Proton charity saving account Loss: Distribution of Charity Wlre Works Heath Fateaton Relat and disaster recovery ‘Closing Balance ‘MA Islamic Financing and Related Assets Muranabe ra Mushorakahy Diiseg Musharakah ‘Sela betsna SBP Islamic Export Refinance Scheme Ober [20 [BANK ALFALAH QUARTERLY REPORT MARCH 2014 2014 (December 31,2013; 40 branches). Note March 24, December 31, 2018 2013 Rupees in000 TAT SOD Toa 7.302295 16,170,168 06012 ‘525023 43607 740 6:05. 446 aun 2776 083 maosgese 1,9086%7| ‘e002 $745,385 4532.64| 705.968,198 V5 197363 Toa ry 1701 asa 240,329 25,48,223 roar 262 49,004,723] 45050.083 13185010 179855272 ‘513 23] “ozees) 1322| 1136 40/198 4.361, 36.955 804, 706.735.505, 3,012,389 470,758 100,000 11676 sa0sar1 Tat7 047 ‘i500 sSsaa.a02 12.359 ears 563 2260 45.707 raat Tha Te 4 439| 18500] 2233 208 76753 33,80 Eas aa] (8409 (3.00 4598) (6.600) co Ta) Tae sre —, ‘1001,095 5.075.147 8.369,648 "0.750 sa7aais ‘0473 assed ‘01.990 193564052 51025385 268,766 "a.481 ss12a16 ‘eraoc2 2.490.185, 31.307 BRANCH NETWORK KARACHI Main Branch B.A. Building, |.Chundrigar Road. Phone: (021) 32414030-39 UAN No. :11-777-786 Fax:: 32417006 Cloth Market Branch Cochinwala Market, Luxmidas Street Phone : (O21) 32401621-5 Fax : 32401627 Clifton Branch Plot No. 8C-8, Blocl-9, Clifton, Phone: (021) 35838778-82, 35309075.8 Fax : 35879175 Shahrah-e-Faisal Branch Progressive Square, TA Block-6 PECHS. Phone : (021) 34313536-38, 134522441, 34522460 Jodia Bazar Branch Gulzar Manzil, Mohammad Shah Street Phone : (O21) 32532483-4, 32544816-20 Fax: 32532485 Korangl Industrial Area Branch Aiwan-2-Sanat, Plot No.ST-4/2, Sector 23, Korangi industrial Area, Phone : (O21) 35065701-2 Fax: 35050653 M.A.Jinnah Road Branch Plat No.23/1, Corner M.Atinnah Road/Abdullah Haroon Road. Phono : 021) 32750627-28, Fax: 32750629 SITE. Branch D-40, Estate Avenue, Siemens Chowranoi, S1.TE. Phone : (O21) 32582990-1, 32582116 Fax: 32582113 North Karachl Industrial Area Branch Sector 12-8, North Kerachi Industrial Area, Opp: Police Station Gaba! Town. Phone : (021) 36962700-7 Fax : 36986051 Paper Market Branch Plot No. 5.87/23, Campball Street, Paper Market. Phone : (021) 32211853-58 Fax: 32271243 Gulshan-evlqbal Branch. Plot No.SB-15, Block 13-B, KDA Scheme No24, University Road, Gulshan-e-lqba Phono : (021) 34984937, 3a9E4824, s4984es3 Fax: 34984971 Karachi Stock Exchange Branch 18-20, Karachi Steck Exchange Building, Stock Exchange Road. Phone : (O71) 32417515419 Fax: 32418353 North Napier Road Branch Surv, No. 35 / Sheet No. NP -10 (Old Surv.No.A26/5), Napier Quarters. Phone : (021) 32544021-24, 32540065 & 67 Fax: 32540066 Bahadurabad Branch Prime Arcade, Shop No. +3, Bahadur Shah Zafar Road, Bahadurabad. Phono : (021) 34129677-81, 34128578-81 Fox : 34129676 ‘Timber Market Branch Ground Floor, Sur. No. 15, Siddique Wahab Road, Lawrence Quarters Phone : (021) 32750635-9 Fax : 32750632, Defence Housing Authority Branch Plat No, C-12-C ‘Tauhood Commercial Phaso V, Defence Housing Authority Phone : (021) 35302639-44 Fax : 35302637 BANK ALFALAH QUARTERLY REPORT MARCH 2014 | 21 |