consolidated annual report 2011

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Bank AL Habib Limited

and

Subsidiary Company

Consolidated Financial Statements


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Bank AL Habib Limited and its Subsidiary Company

Directors Report on Audited Consolidated Financial Statements

The Directors are pleased to present the Audited Consolidated Financial Statements of Bank AL HabibLimited and the Banks Subsidiary M/s AL Habib Capital Markets (Private) Limited for the year endedDecember 31, 2011.

(Rupees in '000)

Profit for the year before tax 7,158,993

Taxation (2,621,889)Profit for the year after tax 4,537,104

Share of loss attributable to Minority interest 552

Profit attributable to shareholders 4,537,656

Unappropriated profit brought forward 3,030,199

Transfer from surplus on revaluation of fixed assets - net of tax 35,497

Profit available for appropriation 7,603,352

Appropriations:

Transfer to Statutory Reserve (906,696)

Cash Dividend - 2010 (1,464,329)

Issue of Bonus Shares - 2010 (1,464,329)

(3,835,354)

Un-appropriated profit carried forward 3,767,998

Earnings per share (after tax) Rs. 5.16

Pattern of Shareholding

The pattern of shareholding as at December 31, 2011 is annexed with the financial statements of

Bank AL Habib Limited.

On behalf of the Board of Directors

ALI RAZA D. HABIB

Karachi: February 21, 2012 Chairman

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Auditors' Report to the Members

We have audited the annexed consolidated financial statements comprising consolidated statement of financial

position of Bank AL Habib Limited (the Bank) and its subsidiary company, (together referred to as Group) as

at 31 December 2011, and the related consolidated profit and loss account, consolidated statement of

comprehensive income, consolidated statement of changes in equity and consolidated cash flow statement

together with the notes forming part thereof for the year then ended, in which are incorporated the unaudited

certified returns from the branches except for fifteen branches which have been audited by us. We have also

separately reviewed the financial statements of AL Habib Capital Markets (Private) Limited.

These consolidated financial statements are the responsibility of the Banks 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 International Standards on Auditing as applicable in Pakistan.

These standards require that we plan and perform the audit to obtain reasonable assurance about whether

the consolidated financial statements are free of any material misstatement. An audit includes examining, on

a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An

audit also includes assessing the accounting policies and significant estimates made by management, as well

as, evaluating the overall presentation of the consolidated financial statements. We believe that our audit

provides a reasonable basis for our opinion.

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position

of the Group as at 31 December 2011 and the results of its operations, its cash flows and changes in equity

for the year then ended in accordance with the approved accounting standards as applicable in Pakistan.

Ernst & Young Ford Rhodes Sidat Hyder

Karachi: February 21, 2012 Chartered Accountants

Audit Engagement Partner: Arslan Khalid


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Consolidated Statement of Financial PositionAs at 31 December 2011

2011 2010Note (Rupees in '000)

ASSETS

Cash and balances with treasury banks 8 22,957,988 19,000,990Balances with other banks 9 6,744,643 2,132,806Lendings to financial institutions 10 000 1,139,268Investments 11 223,105,101 137,234,656

Advances 12 114,863,132 125,773,292Operating fixed assets 13 10,791,345 10,264,310Deferred tax assets 000 000Other assets 14 6,063,405 6,251,024

384,525,614 301,796,346LIABILITIES

Bills payable 15 4,979,720 2,989,989Borrowings 16 43,441,594 22,579,348Deposits and other accounts 17 302,097,187 249,760,885Sub-ordinated loans 18 7,390,358 4,842,260Liabilities against assets subject to finance lease 19 28 386

Deferred tax liabilities 20 1,232,433 644,353Other liabilities 21 5,373,006 4,762,342

364,514,326 285,579,563

NET ASSETS 20,011,288 16,216,783

REPRESENTED BY :

Share capital 22 8,785,972 7,321,643Reserves 5,324,689 4,392,264Unappropriated profit 3,767,998 3,030,199

Equity attributable to the shareholders of the holding company 17,878,659 14,744,106Non-controlling interest 109,782 110,334

Total equity 17,988,441 14,854,440Surplus on revaluation of assets - net of tax 23 2,022,847 1,362,343

20,011,288 16,216,783CONTINGENCIES AND COMMITMENTS 24

The annexed notes 1 to 49 form an integral part of these consolidated financial statements.

96

ANWAR HAJI KARIMDirector

ALI RAZA D. HABIBChairman

ABBAS D. HABIBChief Executive and

Managing Director

SYED MAZHAR ABBASDirector


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Consolidated Profit and Loss AccountFor the year ended 31 December 2011

2011 2010Note (Rupees in '000)

Mark-up / return / interest earned 26 36,529,237 27,480,798Mark-up / return / interest expensed 27 (22,372,988) (16,666,489)

Net mark-up / return / interest income 14,156,249 10,814,309

Provision against non-performing loans and advances 12.6 (1,820,788) (946,296)Provision for diminution in the value of investments 9 (155)

Bad debts written-off directly 00 00(1,820,779) (946,451)

Net mark-up / return / interest income after provisions 12,335,470 9,867,858

NON MARK-UP / INTEREST INCOME

Fees, commission and brokerage income 1,315,699 1,188,387Dividend income 153,855 156,429Income from dealing in foreign currencies 612,851 339,730Gain on sale / redemption of securities - net 28 447 69,608Unrealized gain / (loss) on revaluation of investments classified as held for trading 00 00Share of profit from associates 84,546 108,978Other income 29 440,408 324,508

Total non mark-up / interest income 2,607,806 2,187,64014,943,276 12,055,498

NON MARK-UP / INTEREST EXPENSES

Administrative expenses 30 (7,621,965) (6,225,457)Other (provisions) / (write-offs) / gains 31 (16,064) 29,647Other charges 32 (146,254) (135,253)

Total non mark-up / interest expenses (7,784,283) (6,331,063)

Extra-ordinary / unusual items 00 00

PROFIT BEFORE TAXATION 7,158,993 5,724,435

Taxation Current (2,454,253) (2,014,032) Prior years 00 00

Deferred (167,636) (42,423)

33 (2,621,889) (2,056,455)

PROFIT AFTER TAXATION 4,537,104 3,667,980

Attributable to: Shareholders of the Holding company 4,537,656 3,664,329

Non-controlling interest (552) 3,651

4,537,104 3,667,980

RestatedBasic and diluted earnings per share attributable to

equity holders of the holding company - Rupees 34 5.16 4.17


97


ALI RAZA D. HABIB

Chairman


Managing Director



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Consolidated Statement of Comprehensive IncomeFor the year ended 31 December 2011

2011 2010(Rupees in '000)

Net profit for the year 4,537,104 3,667,980

Other comprehensive income

Exchange difference on translation of net investment in a foreign branch 25,729 (13,518)

Total comprehensive income for the year 4,562,833 3,654,462

Attributable to:

Shareholders of the Holding company 4,563,385 3,650,811

Non-controlling interest (552) 3,651

4,562,833 3,654,462


98

ANWAR HAJI KARIM

Director

ALI RAZA D. HABIB

Chairman

ABBAS D. HABIB

Chief Executive and

Managing Director

SYED MAZHAR ABBAS

Director


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A t t r ib u t a b l e t o th e s h a r e h o l d e r s o f th e H o l d in g C o m p a n yR e v e n u e R e s e r v e s

F o r e i g n N o n -S h a r e S t a t u t o r y S p e c i a l G e n e r a l C u r r e n c y U n a p p r o - T o t a l c o n t r o l l i n g T o t a l

C a p i t a l R e s e r v e R e s e r v e R e s e r v e T r a n s l a t i o n p r i a t e d I n t e r e s t E q u i t yR e s e r v e P r o f i t

(R u p e e s in '0 0 0 )

B a l a n c e a s a t 0 1 J a n u a r y 2 0 1 0 6 , 1 0 1 , 3 7 0 2 , 9 1 3 , 7 4 1 1 2 6 , 5 0 0 5 4 0 , 0 0 0 1 0 5 , 1 0 9 2 , 4 9 6 , 1 3 5 1 2 , 2 8 2 , 8 5 5 1 0 6 , 6 8 3 1 2 , 3 8 9 , 5 3 8

T o t a l c o m p r e h e n s i v e i n c o m e f o r t h e y e a r 0 0 0 0 0 0 0 0 0 0 ( 1 3 , 5 1 8 ) 3 , 6 6 4 , 3 2 9 3 , 6 5 0 , 8 1 1 3 , 6 5 1 3 , 6 5 4 , 4 6 2

T ra n s fe r f ro m s u rp lu s o n re v a lu a t io n o f f i x e d a s s e t s - n e t o f t a x 0 0 0 0 0 0 0 0 0 0 0 0 3 0 , 7 1 3 3 0 , 7 1 3 0 0 3 0 ,7 1 3

T r a n s f e r t o s t a t u t o r y r e s e r v e 0 0 0 7 2 0 , 4 3 2 0 0 0 0 0 0 ( 7 2 0 , 4 3 2 ) 0 0 0 0 0 0

C a s h d i v i d e n d ( R s . 2 p e r s h a r e ) 0 0 0 0 0 0 0 0 0 0 0 0 ( 1 , 2 2 0 , 2 7 3 ) ( 1 , 2 2 0 , 2 7 3 ) 0 0 (1 ,2 2 0 ,2 7 3 )

Is s u e o f b o n u s s h a re s in th e ra t io o f 2 0 s h a r e s f o r e v e r y 1 0 0 s h a r e s h e l d 1 , 2 2 0 , 2 7 3 0 0 0 0 0 0 0 0 0 ( 1 , 2 2 0 , 2 7 3 ) 0 0 0 0 0 0 0 0

B a l a n c e a s a t 3 1 D e c e m b e r 2 0 1 0 7 , 3 2 1 , 6 4 3 3 , 6 3 4 , 1 7 3 1 2 6 , 5 0 0 5 4 0 , 0 0 0 9 1 , 5 9 1 3 , 0 3 0 , 1 9 9 1 4 , 7 4 4 , 1 0 6 1 1 0 , 3 3 4 1 4 , 8 5 4 , 4 4 0

T o t a l c o m p r e h e n s i v e i n c o m e f o r t h e y e a r 0 0 0 0 0 0 0 0 0 0 2 5 , 7 2 9 4 , 5 3 7 , 6 5 6 4 , 5 6 3 , 3 8 5 ( 5 5 2 ) 4 , 5 6 2 , 8 3 3

T ra n s fe r f ro m s u rp lu s o n re v a lu a t io n o f f i x e d a s s e t s - n e t o f t a x 0 0 0 0 0 0 0 0 0 0 0 0 3 5 , 4 9 7 3 5 , 4 9 7 0 0 3 5 ,4 9 7

T r a n s f e r t o s t a t u t o r y r e s e r v e 0 0 0 9 0 6 , 6 9 6 0 0 0 0 0 0 ( 9 0 6 , 6 9 6 ) 0 0 0 0 0 0

C a s h d i v i d e n d ( R s . 2 p e r s h a r e ) 0 0 0 0 0 0 0 0 0 0 0 0 ( 1 , 4 6 4 , 3 2 9 ) ( 1 , 4 6 4 , 3 2 9 ) 0 0 (1 ,4 6 4 ,3 2 9 )

Is s u e o f b o n u s s h a re s in th e ra t io o f 2 0 s h a r e s f o r e v e r y 1 0 0 s h a r e s h e l d 1 , 4 6 4 , 3 2 9 0 0 0 0 0 0 0 0 0 ( 1 , 4 6 4 , 3 2 9 ) 0 0 0 0 0 0 0 0

B a l a n c e a s a t 3 1 D e c e m b e r 2 0 1 1 8 , 7 8 5 , 9 7 2 4 , 5 4 0 , 8 6 9 1 2 6 , 5 0 0 5 4 0 , 0 0 0 1 1 7 , 3 2 0 3 , 7 6 7 , 9 9 8 1 7 , 8 7 8 , 6 5 9 1 0 9 , 7 8 2 1 7 , 9 8 8 , 4 4 1

T h e a n n e x e d n o te s 1 to 4 9 fo rm a n in te g ra l p a rt o f th e s e c o n s o lid a te d f in a n c ia l s ta te m e n ts .

Consolidated Statement of Changes in EquityFor the year ended 31 December 2011




Managing Director



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Consolidated Cash Flow StatementFor the year ended 31 December 2011

2011 2010(Rupees in '000)

Cash Flow From Operating Activities

Profit before taxation 7,158,993 5,724,435Dividend income (153,855) (156,429)

7,005,138 5,568,006

Adjustments for non-cash items:Depreciation 766,566 658,861Amortization 38,045 40,302Provision against non-performing loans and advances 1,820,788 946,296(Reversal of provision) / provision for diminution in the value of investments (9) 155Gain on sale of operating fixed assets (84,469) (41,574)Share of profit from associates (84,546) (108,978)Financial charges on leased assets 23 125Gain on sale / redemption of securities (447) (69,608)Provision for compensated absences 23,242 39,000Provision / (reversal of provision) against

off-balance sheet items 15,797 (8,364)

2,494,990 1,456,215

9,500,128 7,024,221

Increase in operating assetsLendings to financial institutions 1,139,268 (1,139,268)Advances 9,089,372 (20,734,093)Other assets 179,369 (1,974,663)

10,408,009 (23,848,024)

Increase in operating liabilitiesBills payable 1,989,731 (197,394)Borrowings 22,030,466 (12,080,253)Deposits 52,336,302 60,612,458Other liabilities (excluding provision for taxation) 816,269 542,178

77,172,768 48,876,989

97,080,905 32,053,186

Income tax paid (2,716,057) (1,925,428)

Net cash flow from operating activities 94,364,848 30,127,758(Balance carried forward)


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Note 2011 2010(Rupees in '000)

Net cash flow from operating activities (Balance brought forward) 94,364,848 30,127,758

Cash Flow From Investing Activities

Net investments in available for sale securities (70,082,696) 46,026,404Net investments in held to maturity securities (14,836,530) (73,004,255)Net investment in associates 31,992 148,507Proceeds from closure of subsidiary 000 27,972Dividend received 152,496 154,736Investments in operating fixed assets (1,133,063) (1,347,434)Sale proceeds of operating fixed assets 107,484 55,293

Net cash used in investing activities (85,760,317) (27,938,777)

Cash Flow From Financing Activities

Receipts of sub-ordinated loans 3,000,000 000

Payments of sub-ordinated loans (451,902) (2,740)Payments of lease obligations (381) (1,247)Dividend paid (1,440,922) (1,199,908)

Net cash from / (used in) financing activities 1,106,795 (1,203,895)

Exchange adjustment on translation of net investment in a foreign branch 25,729 (13,518)

Increase in cash and cash equivalents 9,737,055 971,568

Cash and cash equivalents at beginning of the year 19,917,173 18,945,605

Cash and cash equivalents at end of the year 35 29,654,228 19,917,173





Managing Director



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Notes to the Consolidated Financial StatementsFor the year ended 31 December 2011

1. STATUS AND NATURE OF BUSINESS

1.1 The Group comprises of:

Holding company

Bank AL Habib Limited

Subsidiary company

AL Habib Capital Markets (Private) Limited

1.2 Bank AL Habib Limited (the Bank) was incorporated in Pakistan on 15 October 1991 as a publiclimited company under the Companies Ordinance, 1984 having its registered office at 126-C, OldBahawalpur Road, Multan with principal place of business in Karachi. Its shares are listed on allthe Stock Exchanges in Pakistan. It is a scheduled bank principally engaged in the business ofcommercial banking with a network of 290 branches (2010: 277), 61 sub-branches (2010: 25) and02 representative offices (2010: 01).The branch network of the Bank includes a wholesale branchin the Kingdom of Bahrain (2010: 01), a branch in Karachi Export Processing Zone (2010: 01) and11 Islamic Banking branches (2010: 08).

1.3 The Bank has invested in 66.67% shares of AL Habib Capital Markets (Private) Limited. The companywas incorporated in Pakistan on 23 August 2005 as a private limited company under the CompaniesOrdinance,1984.The company is a corporate member of the Karachi Stock Exchange (Guarantee)Limited and is engaged in equity, money market and foreign exchange brokerage services, equityresearch, corporate financial advisory and consultancy services.

2. BASIS OF PRESENTATION

2.1 These consolidated financial statements have been prepared in conformity with the format of financialstatements prescribed by the State Bank of Pakistan (SBP) vide BSD Circular No. 04, dated 17February 2006.

2.2 In accordance with the directives of the Federal Government regarding the shifting of the banking

system to Islamic modes, SBP has issued various circulars from time to time. Permissible formsof trade-related modes of financing includes purchase of goods by banks from their customers andimmediate resale to them at appropriate mark-up in price on deferred payment basis. The purchaseand resale arising under these arrangements are not reflected in these consolidated financialstatements as such, but are restricted to the amount of facility actually utilized and the appropriateportion of mark-up thereon. However, murabaha financing arrangements undertaken by the IslamicBanking branches are accounted for as a purchase and sale transaction of the underlying goodsin these consolidated financial statements in accordance with the accounting policies of the Group.

2.3 The financial results of the Islamic Banking branches have been consolidated in these consolidatedfinancial statements for reporting purposes, after eliminating material inter-branch transactions /balances. Key financial information of the Islamic Banking branches is disclosed in note 46.

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3. STATEMENT OF COMPLIANCE

3.1 These consolidated financial statements have been prepared in accordance with approved accountingstandards as applicable in Pakistan. Approved accounting standards comprise International FinancialReporting Standards (IFRS) issued by the International Accounting Standards Board (IASB) andIslamic Financial Accounting Standards (IFAS) issued by the Institute of Chartered Accountants ofPakistan (ICAP) as are notified under the Companies Ordinance, 1984, the requirements of theCompanies Ordinance, 1984, the Banking Companies Ordinance, 1962 and regulations / directivesissued by the Securities and Exchange Commission of Pakistan (SECP) and SBP. Wherever therequirements of the Companies Ordinance, 1984, the Banking Companies Ordinance, 1962 orregulations / directives issued by SECP and SBP differ with the requirements of IFRS or IFAS, the

requirements of the Companies Ordinance, 1984, the Banking Companies Ordinance, 1962 or therequirements of the said regulations / directives shall prevail.

3.2 SBP vide BSD Circular No. 10, dated 26 August 2002 has deferred the applicability of InternationalAccounting Standard (IAS) 39, "Financial Instruments: Recognition and Measurement" and IAS 40,"Investment Property" for banking companies till further instructions. Further, according to thenotification of SECP dated 28 April 2008, IFRS - 7 "Financial Instruments: Disclosures" has notbeen made applicable for banks. Accordingly, the requirements of these standards have not beenconsidered in the preparation of these consolidated financial statements.

4. BASIS OF MEASUREMENT

These financial statements have been prepared under the historical cost convention except forcertain investments, land and buildings and derivative financial instruments which are revalued asreferred to in notes 5.5, 5.7 and 5.15 below.

5. SIGNIFICANT ACCOUNTING POLICIES

5.1 The accounting policies adopted in the preparation of these consolidated financial statements areconsistent with those of the previous financial year except as describe below:

New and amended standards and interpretations

The Group has adopted the following new and amended IFRS and IFRIC interpretations whichbecame effective during the year:

IAS 24 - Related Party Disclosures (Revised)IAS 32 - Financial Instruments: Presentation Classification of Rights Issues (Amendment)IFRIC 14 - Prepayments of a Minimum Funding Requirement (Amendment)IFRIC 19 - Extinguishing Financial Liabilities with Equity Instruments

In May 2010, International Accounting Standards Board (IASB) issued amendments to variousstandards primarily with a view to removing inconsistencies and clarifications of wordings. Theseimprovements are listed below:

IFRS 3 Business Combinations- Transition requirements for contingent consideration from a business combination that

occurred before the effective date of the revised IFRS

- Measurement of non-controlling interests- Un-replaced and voluntarily replaced share-based payment awards

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IAS 1 Presentation of Financial Statements- Clarification of statement of changes in equity

IAS 27 Consolidated and Separate Financial Statements- Transition requirements for amendments made as a result of IAS 27 Consolidated and

Separate Financial Statements

IAS 34 Interim Financial Reporting- Significant events and transactions

IFRIC 13 Customer Loyalty Programmes

- Fair value of award credits

The adoption of the above standards, amendments, interpretations and improvements did not haveany material effect on these financial statements.

5.2 Basis of consolidation

Subsidiary is a company in which the Bank directly or indirectly controls, beneficially owns or holdmore than 50% of the shares or otherwise has the power to elect and appoint more than 50% ofits directors. The financial statements of the subsidiary is included in the consolidated financialstatements from the date the control commences until the date the control ceases. In preparingconsolidated financial statements, the financial statements of the Bank and subsidiary are combinedon a line by line basis by adding together like items of assets, liabilities, income and expenses.

Significant intercompany transactions have been eliminated.

5.3 Cash and cash equivalents

Cash and cash equivalents as referred to in the cash flow statement comprises cash and balanceswith treasury banks and balances with other banks less overdrawn nostro accounts.

5.4 Repurchase / resale agreements

The Group enters into transactions of repos and reverse repos at contracted rates for a specifiedperiod of time. These are recorded as under:

Sale under repurchase obligation

Securities sold with a simultaneous commitment to repurchase at a specified future date (repos)continue to be recognized in the statement of financial position and are measured in accordancewith accounting policies for investments. Amounts received under these agreements are recordedas repurchase agreement borrowings. The difference between sale and repurchase price is amortizedas expense over the term of the repo agreement.

Purchase under resale obligation

Securities purchased with a corresponding commitment to resell at a specified future date (reverserepos) are not recognized in the statement of financial position. Amounts paid under thesearrangements are included in reverse repurchase agreement lendings. The difference betweenpurchase and resale price is accrued as income over the term of the reverse repo agreement.

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5.5 Investments

Investments (other than associates) are classified as follows:

Held for trading

These are investments acquired principally for the purpose of generating profits from short-termfluctuations in price or dealers margin or are securities included in a portfolio in which a pattern ofshort-term trading exists.

Held to maturity

These are investments with fixed or determinable payments and fixed maturities which the Grouphas the intention and ability to hold till maturity.

Available for sale

These are investments which do not fall under the held for trading and held to maturity categories.

All purchases and sales of investments that require delivery within the time frame established byregulations or market convention are recognized at the trade date. Trade date is the date on whichthe Group commits to purchase or sell the investments.

Investments (other than held for trading) are initially measured at fair value plus transaction costassociated with the investment. Investments classified as held for trading are initially measured atfair value, and transaction costs are expensed in the profit and loss account.

After initial recognition, quoted securities, other than those classified as held to maturity, are carriedat market value. Unquoted securities are valued at cost less impairment in value, if any. Held tomaturity securities are carried at amortized cost.

Surplus / (deficit) arising on revaluation of quoted securities which are classified as available forsale investments is taken to a separate account which is shown in the statement of financial positionbelow equity. The surplus / (deficit) arising on these securities is taken to the profit and loss accountwhen actually realized upon disposal. The unrealized surplus / (deficit) arising on revaluation of

quoted securities which are classified as held for trading is taken to the profit and loss account.

Provision for diminution in the values of securities is made after considering impairment, if any, intheir value and charged to profit and loss account. Impairment is recognized when there is anobjective evidence of significant and prolong decline in the value of such securities. Provision forimpairment against debt securities is made as per the aging criteria prescribed by the PrudentialRegulations of SBP and in case of unquoted equity securities on the basis of book value of netassets.

Premium or discount on debt securities classified as available for sale and held to maturity isamortized using effective interest method and taken to the profit and loss account.

Investment in associates

Investment in associates are accounted for by using equity method of accounting.


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5.6 Advances

Loans and advances

These are stated net of provisions for non-performing advances. Provision for non-performingadvances is determined in accordance with the requirements of the Prudential Regulations and ischarged to the profit and loss account. The Group also maintains general provision in addition tothe requirements of the Prudential Regulations on the basis of the management's risk assessment.Advances are written off when there are no realistic prospects of recovery.

Finance lease receivables

Leases where the Group transfers substantially all the risks and rewards incidental to ownershipof an asset to the lessee are classified as finance leases. A receivable is recognized at an amountequal to the present value of the lease payments including any guaranteed residual value.

Ijarah finance

In accordance with the requirements of IFAS 2 'Ijarah', assets leased out under ijarah arrangementson or after 01 January 2009 are stated at cost less depreciation and impairment, if any and includedunder "advances". Such assets are depreciated over the terms of Ijarah contracts. Ijarah arrangementsexecuted before the above referred date are accounted for as finance lease.

Murabaha

Funds disbursed under murabaha arrangements for purchase of goods are recorded as advancefor murabaha. On culmination of murabaha i.e., sale of goods to customers, murabaha receivablesare recorded at the sale price net of deferred income. Goods purchased but remaining unsold andadvances against purchase of goods at the reporting date are recorded as inventories and otherassets respectively.

5.7 Operating fixed assets

Tangible operating assets - owned

Land is measured at cost at the time of initial recognition and is subsequently carried at revalued

amount. Buildings are initially measured at cost and upon revaluation, are carried at revalued amountless accumulated depreciation and impairment, if any. All other operating fixed assets are statedat cost less accumulated depreciation and impairment, if any. Depreciation is charged to profit andloss account on straight line basis so as to charge the assets over their expected useful lives at therates specified in note 13.2. The depreciation charge is calculated after taking into account residualvalue, if any. The residual values, useful lives and depreciation method are reviewed annually andadjusted, if appropriate. Depreciation is charged on prorata basis, i.e., full month charge in the monthof purchase and no charge in the month of disposal.

Land and buildings are revalued by independent professionally qualified valuers with sufficientregularity to ensure that the net carrying amount does not differ materially from the fair value. Thesurplus arising on revaluation of fixed assets is credited to the surplus on revaluation of assets"account shown below equity. The Bank has adopted the following accounting treatment of depreciation

on revalued assets, keeping in view the requirements of the Companies Ordinance, 1984 andSECP's SRO 45(1)/2003 dated 13 January 2003:


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- depreciation on assets which are revalued is determined with reference to the value assignedto such assets on revaluation and depreciation charge for the year is taken to the profit andloss account; and

- an amount equal to incremental depreciation for the year net of deferred taxation is transferredfrom surplus on revaluation of assets to unappropriated profit through statement of changesin equity to record realization of surplus to the extent of the incremental depreciation chargefor the year.

Subsequent costs are included in the assets carrying amount or recognized as a separate asset,as appropriate, only when it is probable that future economic benefits associated with the item willflow to the Bank and the cost of the item can be measured reliably. The carrying amount of thereplaced part is derecognized. All other repairs and maintenance are charged to the income statementduring the financial period in which they are incurred.

Gains and losses on disposal of fixed assets are included in income currently.

Tangible operating assets - leased

Leases where the Group assumes substantially all the risks and rewards of ownership are classifiedas finance leases. Assets subject to finance lease are accounted for by recording the assets andrelated liability. These are stated at lower of fair value and the present value of minimum leasepayments at the inception of lease less accumulated depreciation. Financial charges are allocated

over the period of lease term so as to provide a constant periodic rate of financial charge on theoutstanding liability. Depreciation is charged on the basis similar to the owned assets.

Intangible assets

Intangible assets having a finite useful life are stated at cost less accumulated amortization andimpairment, if any. Amortization is based on straight line method by taking into consideration theestimated useful life of assets at the rates specified in note 13.3. Intangible assets are amortizedon prorata basis i.e., full month amortization in the month of purchase and no amortization in themonth of disposal. Intangible assets with indefinite useful lives are not amortized instead they aresystematically tested for impairment annually.

Capital work in progress

Capital work in progress is stated at cost less impairment, if any.

Impairment

The carrying values of fixed assets are reviewed for impairment when events or changes incircumstances indicate that the carrying values may not be recoverable. If any such indication existsand where the carrying values exceed the estimated recoverable amounts, the fixed assets arewritten down to their recoverable amounts.

The resulting impairment loss is taken to profit and loss account except for impairment loss onrevalued assets which is adjusted against the related revaluation surplus to the extent that theimpairment loss does not exceed the surplus on revaluation of assets.


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5.8 Employees' benefits

Defined benefit plan

The Bank operates an approved gratuity fund for all its confirmed employees, which is administeredby the Trustees. The Bank's costs and contributions are determined based on actuarial valuationcarried out at each year end using Projected Unit Credit Actuarial Method. Net cumulative unrecognizedactuarial gains / losses relating to previous reporting periods in excess of higher of 10% of presentvalue of defined benefit obligation or 10% of the fair value of plan assets are recognized as incomeor expense over the estimated remaining working lives of the employees.

Defined contribution plan

The Bank operates an approved provident fund scheme for all its regular permanent employees,administered by the Trustees. Equal monthly contributions are made both by the Bank and itsemployees to the fund at the rate of 10% of the basic salary in accordance with the terms of thescheme.

AL Habib Capital Markets (Private) Limited operates un approved provident fund scheme for itsconfirmed employees. Contributions are made by the company and the employees at the rate 10%of the basic salary in accordance with the terms of the scheme.

Compensated absences

The Bank accounts for all accumulating compensated absences when employees render servicethat increases their entitlement to future compensated absences. The liability is determined basedon actuarial valuation carried out using the Projected Unit Credit Method.

5.9 Provisions against liabilities

These are recognized when the Group has a legal or constructive obligation as a result of pastevents, it is probable that an outflow of resources will be required to settle the obligation and areliable estimate of the amount can be made. Provisions are reviewed at each reporting date andare adjusted to reflect the current best estimate.

5.10 Provisions against off-balance sheet obligations

The Group, in the ordinary course of business, issues letters of credit, acceptances, guarantees,bid bonds, performance bonds etc. The commission against such contracts is recognized in theprofit and loss account under "fees, commission and brokerage income" over the period of contracts.The Group's liability under such contracts is measured at the higher of the amount representingunearned commission income at the reporting date and the best estimate of the amount expectedto settle any financial obligation arising under such contracts.

5.11 Revenue recognition

Mark-up / interest / return on advances and investments is recognized on accrual basis, except incase of advances classified under the Prudential Regulations on which mark-up is recognized on

receipt basis. Mark-up / interest / return on rescheduled / restructured loans and advances andinvestments is recognized as permitted by the regulations of SBP.


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Financing method is used in accounting for income from lease financing. Under this method, theunrealized lease income is deferred and taken to income over the term of the lease period so asto produce a constant periodic rate of return on the outstanding net investment in lease. Gain / losson termination of lease contracts, front end fee and other lease income are recognized as incomeon receipt basis.

The rentals from ijarah are recognized as income over the term of the contract net of depreciationexpense relating to the ijarah assets.

Income from murabaha is accounted for on a time proportionate basis over the period of murabahatransaction.

Dividend income is recognized when the right to receive is established.

Gain or loss on sale of investments are recognized in profit and loss account in the year in whichthey arise.

Fee, commission and brokerage income are recognized as services are performed.

5.12 Taxation

Income tax expense comprises current and deferred tax. Income tax expense is recognized in profitand loss account except to the extent that it relates to the items recognized directly in equity orsurplus on revaluation of assets, in which case it is recognized in equity or surplus on revaluationof assets.

Current

Provision for current tax is based on the taxable income for the year, using tax rates enacted orsubstantively enacted at the statement of financial position date and any adjustments to the taxpayable in respect of previous years.

Deferred

Deferred income tax is provided on all temporary differences at the statement of financial positiondate between the tax bases of assets and liabilities and their carrying amounts for financial reporting

purposes.

Deferred income tax assets are recognized for all deductible temporary differences and unused taxlosses, to the extent that it is probable that taxable profits will be available against which the deductibletemporary differences and unused tax losses can be utilized.

Deferred tax liabilities are recognized for all taxable temporary differences, except in respect oftaxable temporary differences associated with investment in foreign operations, when the timing ofthe reversal of the temporary differences can be controlled and it is probable that the temporarydifferences will not reverse in the foreseeable future.

The carrying amount of deferred income tax assets are reviewed at each statement of financialposition date and reduced to the extent that it is no longer probable that sufficient taxable profit or

taxable temporary differences will be available to allow all or part of the deferred income tax assetto be utilized.


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Deferred income tax assets and liabilities are measured at the tax rates that are expected to applyto the period when the asset is realized or the liability is settled, based on tax rates (and tax laws)that have been enacted or substantively enacted at the statement of financial position date.

5.13 Currency translation

Functional and presentation currency

These financial statements are presented in Pak Rupees which is the Group's functional currencyand presentation currency.

Transactions and balances in foreign currencies

Foreign currency transactions are translated into Pak Rupees at the exchange rates prevailing onthe date of transaction. Monetary assets and liabilities in foreign currencies are translated into PakRupees at the exchange rates prevailing at the reporting date. Non-monetary items that are measuredin terms of historical cost in a foreign currency are translated using the exchange rates at the datesof the initial transactions. Non-monetary items measured at fair value in a foreign currency aretranslated using exchange rates at the date when the fair value was determined. Exchange gainsor losses are included in income currently.

Foreign operations

The assets and liabilities of foreign operations are translated to Pak Rupees at exchange ratesprevailing at the reporting date. The income and expense of foreign operations are translated atrate of exchange prevailing during the year. Exchange gain or loss on such translation is taken toequity under "foreign currency translation reserve".

Commitments

Commitments for outstanding forward foreign exchange contracts are translated at forward ratesapplicable to their respective maturities.

5.14 Financial instruments

Financial assets and financial liabilities are recognized at the time when the Group becomes a partyto the contractual provision of the instrument. Financial assets are de-recognized when the contractualright to future cash flows from the asset expires or is transferred along with the risk and reward ofownership of the asset. Financial liabilities are de-recognized when obligation is discharged, cancelledor expired. Any gain or loss on de-recognition of the financial asset and liability is recognized in theprofit and loss account of the current period.

5.15 Derivative financial instruments

Derivative financial instruments are initially recognized at their fair value on the date on which thederivative contract is entered into and are subsequently remeasured at fair value. All derivativefinancial instruments are carried as assets when fair value is positive and liabilities when fair valueis negative. Any change in the value of derivative financial instruments is taken to the profit and loss

account.


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5.16 Off-setting

Financial assets and financial liabilities are only off-set and the net amount is reported in the financialstatements when there is a legally enforceable right to set-off the recognized amount and the Groupintends either to settle on a net basis, or to realize the assets and to settle the liabilities simultaneously.Income and expense items of such assets and liabilities are also off-set and the net amount isreported in the financial statements.

5.17 Dividends and appropriations to reserves

Dividends and appropriations to reserves are recognized in the year in which these are approved,except appropriations required by the law which are recorded in the period to which they pertain.

5.18 Segment reporting

A segment is a distinguishable component of the Group that is engaged in providing products andservices (business segment), or in providing products or services within a particular economicenvironment (geographical segment), which is subject to risk and rewards that are different fromthose of other segments. The segment reporting format has been determined and prepared inconformity with the format of financial statements and guidelines, prescribed by SBP vide BSDCircular No.04, dated, 17 February 2006. The Group's primary format of reporting is based onbusiness segments.

Business segments

Retail banking

It consists of retail lending, deposits and banking services to private individuals and small businesses.The retail banking activities include provision of banking and other financial services, such as currentand saving accounts, credit cards, consumer banking products e.t.c., to individual customers, smallmerchants and SMEs.

Commercial banking

Commercial banking represents provision of banking services including treasury and international

trade related activities to large corporate customers, multinational companies, government and semigovernment departments and institutions and SMEs treated as corporate under the PrudentialRegulations.

Retail brokerage

Retail brokerage activities include the business of equity, money market and foreign exchangebrokerage, equity research and corporate financial advisory and consultancy services.

Geographical segments

The Group operates in two geographic regions, being:

- Pakistan- Middle East


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5.19 Earnings per share

The Group presents basic and diluted earnings per share (EPS) for its shareholders. 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 period / year. 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,

if any. There were no convertible dilutive potential ordinary shares in issue at 31 December 2011.

5.20 Clients assets

The Group provides services that result in the holding of assets on behalf of its clients. Such assets

are not reported in the financial statements, as they are not the assets of the Group.

6. ACCOUNTING JUDGMENTS AND ESTIMATES

The preparation of financial statements requires management to make judgments, estimates and

assumptions that affect the application of policies and reported amounts of assets and liabilities,

income and expenses. The estimates and associated assumptions are based on historical experience

and various other factors that are believed to be reasonable under the circumstances, the result of

which forms the basis of making judgment about carrying values of assets and liabilities that arenot readily apparent from other sources. Actual results may differ from these estimates. The estimates

and underlying assumptions are reviewed on an ongoing basis. Revision to accounting estimates

are recognized in the period in which the estimate is revised if the revision affects only that period,

or in period of revision and future periods if the revision affects both current and future periods. The

estimates and judgments that have a significant effect on the financial statements are in respect of

the following:

Note

Classification of investments and provision for diminution in the value of investments 5.5 & 11

Provision against non-performing advances 5.6 & 12

Useful lives of assets and methods of depreciation 5.7 & 13Defined benefit plan 5.8 & 37

Provisions against off-balance sheet obligations 5.10 & 31

Current and deferred taxation 5.12 & 20

7. STANDARDS, INTERPRETATIONS AND AMENDMENTS TO APPROVED ACCOUNTING

STANDARDS THAT ARE NOT YET EFFECTIVE

The following revised standards, interpretations and amendments with respect to approved accounting

standards as applicable in Pakistan would be effective from the dates mentioned below against the

respective standards, interpretations or amendments:


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Effective date(accounting periods beginning

Standard, interpretation or amendment on or after)

IAS 1 - Presentation of Financial Statemen ts Presentation of 01 July 2012 items of compreh ensive income

IAS 12 Incom e Taxes (Am endm ent) - R ecovery of U nderlying Assets 01 January 2012

IAS 19 Employee Benefits (Amendment) 01 January 2013

The Group expects that the adoption of the above revisions and amendments of the standards willnot materially affect the Group's financial statements in the period of initial application other thanthe amendments to IAS-19 ' Employee Benefits'. Such amendments range from fundamental changesto simple clarifications and re-wording. The significant changes include the following:

- For defined benefit plans, the ability to defer recognition of actuarial gains and losses (i.e., thecorridor approach) has been removed. As revised, actuarial gains and losses are recognized inother comprehensive income when they occur. Amounts recorded in profit and loss are limitedto current and past service costs, gains or losses on settlements, and net interest income(expense). All other changes in the net defined benefit asset (liability) are recognized in othercomprehensive income with no subsequent recycling to profit and loss.

- Objectives for disclosures of defined benefit plans are explicitly stated in the revised standard,along with new or revised disclosure requirements. These new disclosures include quantitativeinformation of the sensitivity of the defined benefit obligation to a reasonably possible changein each significant actuarial assumption.

The Group is currently assessing the impact of the above amendments which are effective from 01January 2013 on the financial statements . However, it is expected that the adoption of the saidamendments will result in change in the Group's accounting policy related to recognition of actuarialgains and losses as referred to in note 5.8 to the financial statements.

In addition to the above, the following new standards have been issued by IASB which are yet tobe notified by SECP for the purpose of applicability in Pakistan.

IASB Effective date(annual periods beginning

on or after)

IFRS 10 Consolidated Financial Statements 01 January 2013IFRS 11 Joint Arrangements 01 January 2013IFRS 12 Disclosure of Interests in Other Entities 01 January 2013IFRS 13 Fair Value Measurement 01 January 2013


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8.1 Represent statutory cash reserve maintained under Section 36 of the State Bank of Pakistan Act,1956.

8.2 Represents statutory cash reserve maintained by the Islamic Banking branches in accordance with

BPD Circular No. 01 of 2003.

8.3 Represent cash reserves maintained against foreign currency deposits mobilized under Circular FE-

25 of 1998 to comply with statutory requirements.

8.4 Represents US Dollar collection account maintained with the SBP in accordance with Circular FE-

02 of 2004.

Note 2011 2010

(Rupees in '000)

8. CASH AND BALANCES WITH TREASURY BANKS

In hand

Local currency 4,013,530 3,049,032

Foreign currencies 591,887 624,203

National prize bonds 14,962 16,952

4,620,379 3,690,187

In transit

Local currency 10,000 00

Foreign currency 00 77,073

10,000 77,073

With State Bank of Pakistan in:

Local currency current accounts 8.1 10,689,526 8,459,338

Local currency current account - Islamic Banking 8.2 198,378 222,006

Foreign currency deposit accounts

Cash reserve account 8.3 1,466,115 1,370,187

Cash reserve account - Islamic Banking 3,778 2,826

Special cash reserve account 8.3 4,398,345 4,110,562

Local US Dollar collection account 8.4 34,107 19,993

16,790,249 14,184,912

With National Bank of Pakistan in:

Local currency current accounts 1,537,360 1,048,818

22,957,988 19,000,990


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Note 2011 2010

(Rupees in '000)

9. BALANCES WITH OTHER BANKS

In Pakistan

Current accounts 734,227 597,023

Deposit accounts 9.1 350,000 00

Savings accounts 9.2 468,324 160,098

1,552,551 757,121

Outside PakistanCurrent accounts 846,210 544,673

Deposit accounts 9.3 4,345,882 831,012

5,192,092 1,375,685

6,744,643 2,132,806

9.1 These carry expected profit rates ranging from 10% to 11% (2010: NIL) per annum.

9.2 These carry expected profit rates ranging from 6.99% to 8.25% (2010: 6.99% to 8%) per annum.

9.3 These carry interest rates upto 0.04% (2010: upto 0.13%) per annum.

10. LENDINGS TO FINANCIAL INSTITUTIONS

In local currency

Repurchase agreement lendings (Reverse Repo) 00 1,139,268

10.1 Securities held as collateral against lendings to financial institutions

2011 2010

Further Further

H eld by given as Total H eld by g iven as To tal

B ank co lla te ral Bank co llatera l

(Rupees in '000)

Market Treasury Bills 00 00 00 297,158 00 297,158

Pakistan Investment Bonds 00 00 00 842,110 00 842,110

00 00 00 1,139 ,268 00 1,139,268


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11. INVESTMENTS

2 0 1 1 2 0 1 0N o t e

H e ld b y G iv e n a s To ta l H e ld b y G iv e n a s To ta l1 1 .1 In v e s tm e n ts b y ty p e B a n k c o lla te r a l B a n k c o lla te ra l

( R u p e e s i n ' 0 0 0 )A v a i l a b l e f o r s a l e s e c u r i t i e s 1 1 .5

M a r k e t T r e a s u r y B i l ls 7 8 ,7 1 5,6 4 1 2 7 ,5 88 ,8 5 5 1 0 6,3 04 ,4 9 6 3 3 ,4 7 2 ,2 5 0 1 ,2 8 4 ,4 3 7 3 4 ,7 5 6 ,6 8 7P a k i s ta n I n v e s t m e n t B o n d s 1 4 ,6 1 7 ,4 8 3 0 0 1 4 , 6 1 7 , 4 8 3 1 2 ,0 2 7 ,7 8 1 0 0 1 2 , 0 2 7 , 7 8 1F o r e i g n C u r r e n c y B o n d s 9 7 9 ,4 7 4 0 0 9 7 9 , 4 7 4 7 9 2 ,2 4 7 0 0 7 9 2 , 2 4 7S u k u k s 6 ,9 4 7 ,7 4 0 0 0 6 , 9 4 7 , 7 4 0 6 ,0 4 4 ,9 7 9 0 0 6 , 0 4 4 , 9 7 9O r d i n a r y s h a r e s o f l i s t e d c o m p a n i e s 1 5 1 ,1 1 0 0 0 1 5 1 , 1 1 0 3 0 ,8 3 2 0 0 3 0 , 8 3 2O r d i n a r y s h a r e s o f u n l i s t e d c o m p a n i e s 3 9 ,5 7 0 0 0 3 9 , 5 7 0 3 9 ,5 7 0 0 0 3 9 , 5 7 0L i s t e d t e r m f i n a n c e c e r t i f ic a t e s 5 8 4 ,4 6 1 0 0 5 8 4 , 4 6 1 6 5 0 ,4 4 1 0 0 6 5 0 , 4 4 1U n l is t e d t e r m f i n a n c e c e r t i f ic a t e s 2 4 9 ,9 2 0 0 0 2 4 9 , 9 2 0 5 ,8 0 1 ,5 6 5 0 0 5 , 8 0 1 , 5 6 5O p e n e n d e d m u t u a l fu n d s 1 ,4 7 8 ,0 0 0 0 0 1 , 4 7 8 , 0 0 0 1 ,1 2 5 ,0 0 0 0 0 1 , 1 2 5 , 0 0 0

1 03 ,7 6 3,3 9 9 2 7 ,5 88 ,8 5 5 1 3 1,3 52 ,2 5 4 5 9 ,9 8 4 ,6 6 5 1 ,2 8 4 ,4 3 7 6 1 ,2 6 9 ,1 0 2

H e l d t o m a t u r i ty s e c u r i ti e s 1 1 .2M a r k e t T r e a s u r y B i l ls 7 6 ,2 6 0 ,1 3 2 0 0 7 6 , 2 6 0 , 1 3 2 7 0 ,8 6 6 ,9 7 9 0 0 7 0 , 8 6 6 , 9 7 9P a k i s ta n I n v e s t m e n t B o n d s 1 3 ,4 8 2 ,7 2 2 0 0 1 3 , 4 8 2 , 7 2 2 3 ,8 9 7 ,3 8 5 0 0 3 , 8 9 7 , 3 8 5

S u k u k s 2 6 6 ,9 0 0 0 0 2 6 6 , 9 0 0 2 7 5 ,0 0 0 0 0 2 7 5 , 0 0 0

L i s t e d t e r m f i n a n c e c e r t i f ic a t e s 3 4 3 ,6 8 1 0 0 3 4 3 , 6 8 1 3 9 4 ,2 0 8 0 0 3 9 4 , 2 0 8U n l is t e d t e r m f in a n c e c e r t i fi c a t e s 1 2 5 ,0 0 0 0 0 1 2 5 , 0 0 0 2 0 8 ,3 3 3 0 0 2 0 8 , 3 3 3

9 0 ,4 7 8 ,4 3 5 0 0 9 0 , 4 7 8 , 4 3 5 7 5 ,6 4 1 ,9 0 5 0 0 7 5 , 6 4 1 , 9 0 5

A s s o c i a t e s 1 1 .1 2 H a b i b S u g a r M i ll s L i m i t e d 2 4 8 ,3 1 5 0 0 2 4 8 , 3 1 5 2 3 5 ,3 9 8 0 0 2 3 5 , 3 9 8

H a b i b A s s e t M a n a g e m e n t L im i te d 3 5 ,2 5 4 0 0 3 5 , 2 5 4 3 3 ,7 4 7 0 0 3 3 , 7 4 7F i r st H a b i b I n c o m e F u n d 5 4 1 ,2 8 3 0 0 5 4 1 , 2 8 3 5 9 2 ,2 6 6 0 0 5 9 2 , 2 6 6F i r st H a b i b S t o c k F u n d 4 4 ,1 4 9 0 0 4 4 , 1 4 9 5 5 ,2 7 0 0 0 5 5 , 2 7 0F i r st H a b i b C a s h F u n d 1 0 4 ,0 9 4 0 0 1 0 4 , 0 9 4 0 0 0 0 0 0

9 7 3 ,0 9 5 0 0 9 7 3 , 0 9 5 9 1 6 ,6 8 1 0 0 9 1 6 , 6 8 1

In v es tm e n ts a t c o s t 1 95 ,2 14 ,9 29 2 7,5 88 ,8 55 2 22 ,8 03 ,7 84 1 3 6 ,5 4 3 ,2 5 1 1 ,2 8 4 ,4 3 7 1 3 7 ,8 2 7 ,6 8 8P r o v i s i o n f o r d i m i n u t i o n i n t h e

v a l u e o f i n v e s t m e n t s 1 1 . 4 (6 ,6 0 0 ) 0 0 (6 ,6 0 0 ) (6 ,6 0 9 ) 0 0 ( 6 , 6 0 9 )

I n v e s t m e n t s ( n e t o f p r o v i si o n s ) 1 9 5 ,2 0 8 ,3 2 9 2 7 , 58 8 ,8 5 5 2 2 2 ,7 9 7 ,1 8 4 1 3 6 ,5 3 6 ,6 4 2 1 ,2 8 4 ,4 3 7 1 3 7 ,8 2 1 ,0 7 9

S u r p l u s / ( d e f i c it ) o n r e v a l u a t i o n o f a v a i la b l e f o r s a l e i n v e s t m e n t s - n e t 1 6 2 ,0 5 8 1 4 5 ,8 5 9 3 0 7 ,9 1 7 (5 8 5 ,2 3 5 ) (1 ,1 8 8 ) (5 8 6 ,4 2 3 )In v e s tm e n ts a f te r re v a lu a t io n o f a v a il ab le f o r s a le i n v e s tm e n t s 1 9 5 ,3 7 0 ,3 8 7 2 7 ,7 3 4 ,7 1 4 2 2 3 ,1 0 5 ,1 0 1 1 3 5 ,9 5 1 ,4 0 7 1 ,2 8 3 ,2 4 9 1 3 7 ,2 3 4 ,6 5 6

1 1 .2 T h e a g g r e g a t e m a r k e t v a l u e o f h e l d to m a t u r it y s e c u r it ie s a s a t 3 1 D e c e m b e r 2 0 11 a m o u n t e d t o R s . 9 1 , 2 6 5 ( 2 0 1 0 : R s . 7 5 , 4 11 ) m i ll io n .

116


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Note 2011 2010

(Rupees in '000)

11.3 Investments by segment

Federal Government Securities

Market Treasury Bills 11.6 182,564,628 105,623,666

Pakistan Investment Bonds 11.7 28,100,205 15,925,166

Foreign Currency Bonds 11.10 620,558 451,538

Sukuks 11.8 4,000,000 3,100,000

215,285,391 125,100,370

Fully paid-up ordinary shares

Listed companies 11.5.5 151,110 30,832

Unlisted companies 11.11 39,570 39,570

190,680 70,402

Term finance certificates, sukuks and bonds

Term Finance Certificates

Listed term finance certificates 928,142 1,044,649

Unlisted term finance certificates 374,920 6,009,898

11.9 1,303,062 7,054,547

Sukuks 11.8 3,214,640 3,219,979

Foreign Currency Bonds 11.10 358,916 340,709

4,876,618 10,615,235

Others

Open ended mutual funds 11.5.9 1,478,000 1,125,000

Associates 11.12 973,095 916,681

2,451,095 2,041,681

Investments at cost 222,803,784 137,827,688

Provision for diminution in the

value of investments 11.4 (6,600) (6,609)

Investments - net of provisions 222,797,184 137,821,079

Surplus / (deficit) on revaluation of

available for sale investments - net 307,917 (586,423)

Investments after revaluation of

available for sale investments 223,105,101 137,234,656

117


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11 .5 .4 S u k u k s

2 0 11 2 0 10 N a m e o f s e cu r i tyN o . o f c e r t i fi c a t e s

D a r A l A r k a n I n t e rn a t i o n a l S u k u k

2 0 ,0 0 0 2 0 ,0 0 0 C o m p a n y U S D 1 0 0 A A 1 7 9 ,8 9 1 1 7 1 , 2 7 3 1 5 8 ,3 0 4 1 4 6 , 4 3 9

1 7 0 ,0 0 0 1 7 0 ,0 0 0 E n g r o F o o d s L im i te d R s .5 ,0 0 0 A A 8 5 0 ,0 0 0 8 5 0 , 0 0 0 8 5 0 ,0 0 0 8 5 0 , 0 0 0

0 0 1 ,0 0 0 G o ve rn m e n t o f P a kis ta n I ja ra h S u ku k R s .1 00 ,0 00 U n r a t e d 0 0 1 0 0 , 0 0 0 0 0 1 0 1 , 6 2 0

3 0 ,0 0 0 3 0 ,0 0 0 G o v er nm e n t of P a kis ta n Ija ra h S u ku k- II I R s .1 0 0,0 0 0 U n ra te d U n r a t e d 3 ,0 0 0 ,0 0 0 3 , 0 0 0 , 0 0 0 3 ,0 1 4 ,1 0 0 3 , 0 5 8 , 2 0 0

1 0 , 0 0 0 0 0 G o v e r n m e n t o f P a k i s ta n I ja r a h S u k u k - V II I R s . 1 0 0 , 0 00 U n ra te d 1 , 0 0 0 , 0 0 0 0 0 1 , 0 0 2 , 8 0 0 0 0

1 ,0 8 7 ,8 4 9 1 ,0 1 3 ,7 0 6 L ib e r ty P o w e r Te c h L im i te d R s .1 ,0 0 0 A A A A - 1 ,0 8 7 ,8 4 9 1 , 0 1 3 , 7 0 6 1 ,0 8 7 ,8 4 9 1 , 0 1 3 , 7 0 6

4 0 ,0 0 0 4 0,0 00 S u i S ou th er n G a s C o m p a ny L im ite d R s .5 ,0 0 0 A A A A 8 0 ,0 0 0 1 6 0 , 0 0 0 8 0 ,0 0 0 1 6 0 , 0 0 0

1 5 0 ,0 0 0 1 50 ,0 0 0 W A P D A S ec on d Su ku k C o m p a ny L im i te d R s .5 ,0 00 U n ra te d U n ra te d 7 5 0 ,0 0 0 7 5 0 , 0 0 0 7 5 0 ,0 0 0 7 5 0 , 0 0 0 6 ,9 4 7 ,7 4 0 6 , 0 4 4 , 9 7 9 6 ,9 4 3 ,0 5 3 6 , 0 7 9 , 9 6 5

11.5 Quality of available for sale securities

N a m e o f s e c u r i ty F a c e 2 0 11 2 0 1 0 2 0 11 2 0 1 0 2 0 11 2 0 1 0

v a lu e R a t i n g * C o s t C a r r y i n g v a l u e

R s . / U S D ( R u p e e s i n ' 0 0 0 )

11 .5 .1 M a rk e t T re a s u ry B ills U n ra ted U n ra te d 1 0 6 , 3 0 4 , 4 9 6 3 4 ,7 56 ,6 87 1 0 6 , 6 6 8 , 5 5 2 3 4 , 7 0 2 , 0 8 4

11 .5 .2 P a k is ta n In v e s tm e n t B o n d s U n ra ted U n r a t e d 1 4 , 6 1 7 , 4 8 3 12 ,0 2 7 ,7 8 1 1 4 , 6 5 3 , 8 0 8 1 1 , 4 0 4 , 5 3 5

11 .5 .3 F ore ig n C u rre nc y B on ds

G o v e r n m e n t o f P a k i st a n B o n d s U S D 1 0 0 B - B - 4 5 5 , 0 6 8 2 9 7 , 2 0 3 3 8 5 , 8 6 7 3 1 0 , 0 0 5

G o v e rn m e n t o f P a k is ta n B o n d s U S D 1 0 0 B - B - 1 6 5 , 4 9 0 1 5 4 , 3 3 5 1 3 7 , 1 6 7 1 5 6 , 8 0 9

G o v e rn m e n t o f S r i L a n k a B o n d s U S D 1 0 0 B + B + 3 5 8 , 9 1 6 3 4 0 , 7 0 9 3 6 6 , 5 2 9 3 7 0 , 2 0 7

9 7 9 , 4 7 4 79 2 ,2 4 7 8 8 9 , 5 6 3 8 3 7 , 0 2 1


11.4 Particulars of provision for diminution in thevalue of investments

Available for sale investments:

Opening balance 6,609 90,704Charge during the year 00 155Adjustment of provision upon disposal of investments (9) (84,250)

Closing balance 11.4.1 6,600 6,609

11.4.1 Particulars of provision in respect of type and segment

Available for sale investments:Listed companies and close ended mutual fund 900 909Unlisted companies 5,700 5,700

6,600 6,609

118


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119

11 .5 .5 O r d in a ry s h are s o f lis te d c o m p a nie s a n d c lo s e e n d e d m u t u a l f un d s

2 0 1 1 2 01 0 N a m e o f s ec ur ity F a c e 2 0 11 2 0 1 0 2 0 11 2 0 1 0 2 0 11 2 0 1 0

N o . o f s h a r e s / c e r t i fi c a te s v a lu e R a t in g * C o s t C a r r y i n g v a l u e

R s . / U S D ( R u p e e s i n ' 0 0 0 )

3 5 , 9 5 4 3 2 ,6 8 6 A r if H a b ib S e c u r itie s L im ite d R s .1 0 - - 1 , 4 7 7 1 , 4 7 7 9 3 2 8 1 3

9 , 8 0 6 9 ,8 0 6 F atim a F er til iz e rs C om p a ny L im ite d R s.1 0 - A 0 0 0 0 2 2 5 1 11

1 , 2 0 1 , 9 5 2 8 8 8 ,9 8 0 H ab ib M etro p o lita n B an k L im ite d R s.1 0 A A + A A + 2 2 , 1 3 9 1 9 , 8 7 1 2 0 , 3 0 1 2 5 , 7 7 2

2 5 1 , 0 0 0 2 5 1 ,0 0 0 H u b P o w e r C o m p a n y L im ite d R s .1 0 - A A + 8 , 8 2 1 8 , 8 2 1 8 , 5 8 4 9 , 3 9 0

5 2 , 8 6 2 5 2 ,8 6 2 In te rn a tio n a l In d u s trie s L im ite d R s.1 0 U n ra te d U n r a t e d 3 5 7 3 5 7 2 , 0 0 9 3 , 1 6 4

3 , 3 6 4 , 0 5 6 0 0 In te rn a tio n a l S te e l L im ite d R s .1 0 U n ra te d - 4 7 , 3 3 2 0 0 3 9 , 0 5 7 0 0 5 , 0 6 1 5 ,0 61 J ah an gir S id diq ui & C o m pa ny L im ite d R s.1 0 A A A A 2 8 4 2 8 4 2 1 5 5

5 3 2 5 3 2 J S In v e s tm e n ts L im ite d R s .1 0 - A M 2 - 2 2 2 2 1 4

8 , 0 0 0 0 0 P a c k a g e s L im ite d R s .1 0 A A - 6 6 8 0 0 6 6 2 0 0

2 , 5 0 0 0 0 P a k i s t a n P e t r o l e u m L i m i t e d R s . 1 0 U n ra te d - 4 2 2 0 0 4 2 1 0 0

8 5 0 , 7 1 7 0 0 T h a l L im ite d R s .1 0 - - 6 9 , 5 8 8 0 0 6 9 , 5 8 8 0 0

1 5 1 , 1 1 0 3 0 , 8 3 2 1 4 1 , 8 0 1 3 9 , 3 0 9

11 .5 .6 O r din a ry sh a re s o f u n lis te d co m p an ie s

2 0 1 1 2 01 0 N a m e o f s ec ur ity

N o . o f s h a r e s / c e r t i fi c a te s

3 , 0 0 0 , 0 0 0 3 ,0 0 0 ,0 0 0 K h u s h h a li B a n k L im ite d R s .1 0 A A 3 0 , 0 0 0 3 0 , 0 0 0 3 0 , 0 0 0 3 0 , 0 0 0

P a k i s t a n E x p o r t F i n a n c e G u a r a n t e e5 6 9 , 9 5 8 5 6 9 ,9 5 8 A g e n c y L im ite d R s .1 0 U n ra te d U n r a t e d 5 , 7 0 0 5 , 7 0 0 0 0 0

2 4 2 4 S .W .I.F.T U n ra ted U n r a t e d 3 , 8 7 0 3 , 8 7 0 3 , 8 7 0 3 , 8 7 0

3 9 , 5 7 0 3 9 , 5 7 0 3 3 , 8 7 0 3 3 , 8 7 0

11 .5 .7 L is te d te rm f in a nc e ce rtif ic at es

2 0 1 1 2 01 0 N a m e o f s ec ur ity

N o . o f c e r t i fi c a te s

6 , 0 0 0 6 ,0 0 0 A llie d B a n k L im ite d R s .5 ,0 0 0 A A A A 2 9 , 9 4 0 2 9 , 9 5 2 3 0 , 2 7 3 2 9 , 9 0 2

3 3 , 8 0 0 3 3 , 80 0 A l li e d B a n k L i m i te d - I I R s . 5 ,0 0 0 A A A A 1 6 8 , 8 6 5 1 6 8 , 9 3 2 1 6 6 , 9 6 5 1 4 8 , 9 0 2

5 , 0 0 0 5 , 0 0 0 A s k a r i B a n k L i m i te d - I I R s . 5 ,0 0 0 A A A A 2 4 , 9 4 0 2 4 , 9 5 0 2 5 , 0 1 5 2 4 , 9 5 0

4 0 , 0 0 0 4 0 ,0 0 0 E n g ro F e r t il iz e rs L im ite d - I II R s .5 ,0 0 0 A A A A 1 9 9 , 6 8 0 1 9 9 , 7 6 0 1 9 5 , 5 9 3 1 8 5 , 7 7 7

5 , 0 0 0 5 , 0 0 0 J a h a n g ir S i d d iq u i & C o m p a n y L t d - I V R s . 5 ,0 0 0 A A A A 1 2 , 4 7 8 2 4 , 9 6 0 1 3 , 0 2 7 2 4 , 9 6 0

6 , 6 0 0 6 ,6 0 0 N I B B a n k L im i te d R s . 5, 00 0 A + A + 3 2 , 9 5 4 3 2 , 9 6 7 3 2 , 2 9 7 3 2 , 4 7 2

2 0 , 0 0 0 2 0 , 00 0 O r i x L e a s in g P a k i st a n L i m i te d - I II R s . 5 ,0 0 0 A A + A A + 1 6 , 6 5 4 4 9 , 9 6 0 1 6 , 5 7 0 4 9 , 4 6 1

2 0 , 0 0 0 2 0 , 00 0 P a k A r a b F e r ti li z er s L i m it e d R s . 5 ,0 0 0 A A A A 7 4 , 0 0 0 9 4 , 0 0 0 7 4 , 0 0 0 9 2 , 5 9 0

5 , 0 0 0 5 , 0 0 0 U n i te d B a n k L i m i te d - I II R s . 5 ,0 0 0 A A A A 2 4 , 9 5 0 2 4 , 9 6 0 2 5 , 3 1 5 2 4 , 9 5 1

5 8 4 , 4 6 1 6 5 0 , 4 4 1 5 7 9 , 0 5 5 6 1 3 , 9 6 5

11 .5 .8 U n lis te d te rm f in a nc e ce rtif ic at es

2 0 1 1 2 01 0 N am e of s e cu rity

N o . o f c e r t i fi c a te s

1 5 0 0 0 A s k a r i B a n k L im ite d - IV R s.1 ,0 0 0 ,0 0 0 A A 1 5 0 , 0 0 0 0 0 1 5 0 , 0 0 0 0 0

2 0 , 0 0 0 2 0 ,0 0 0 B a n k A l F a la h L im ite d - IV R s .5 ,0 0 0 A A A A 9 9 , 9 2 0 9 9 , 9 6 0 9 9 , 9 2 0 9 9 , 9 6 0

0 0 5 5 2 ,8 0 0 P ow er H old in g P riv a te L im ite d R s.5 ,0 0 0 U n r a t e d 0 0 2 , 9 3 7 , 6 0 5 0 0 2 , 9 3 7 , 6 0 5

s e e n o te ( 1 1 .5 . 1 0 )

0 0 5 87 ,5 2 1 P ow er H o ld in g P r iv a te Lim ite d- II R s. 5 ,0 00 U n r a t e d 0 0 2 , 7 6 4 , 0 0 0 0 0 2 , 7 6 4 , 0 0 0

s e e n o te ( 1 1 .5 .1 0 )

2 4 9 , 9 2 0 5 , 8 0 1 , 5 6 5 2 4 9 , 9 2 0 5 , 8 0 1 , 5 6 5


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11.5.10 During the year, in accordance with the instructions of the Government of Pakistan (GoP) through a notification

of finance division dated 3 November 2011, the Bank has received one year Market Treasury Bills and 5 year

Pakistan Investment Bonds at a purchase price of Rs. 4,327 million each in settlement of the Term Finance

Certificates of Power Holding (Private) Limited amounting to Rs. 6,247 million (face value of Rs. 5,702 million

and accrued markup of Rs. 545 million), long term loan of National Transmission and Despatch Company

Limited amounting to Rs. 2,353 million (Principal of Rs. 2,000 million and accrued markup of Rs. 353 million)

and com modity finance of Pakistan Agricultural Storage and Services Corporation Limited amounting to R s.

54 m illion (Principal of Rs. 54 million).

*Rating in case of ordinary shares of listed and unlisted compa nies represents the rating of investee companies,

in all other cases, rating represents the rating of underlying instrume nts.

11.6 Market Treasury Bills

These securities have a maturity period of six months to one year (2010: six m onths to one year) w ith yield

ranging between 11.78% to 13.91% (2010: 11.96% to 12.46%) per annum.

11.7 Pakistan Investment Bonds

These securities have a m aturity period of 3, 5, 7 and 10 years (2010: 3, 5, 7 an d 10 years) with interest rates

ranging between 9% to 12% (2010: 9.30% to 13%) per annum. These include securities costing Rs. 5 (2010:

Rs. 5) m illion pledged w ith the Controller of Military Accounts, Karachi as a security deposit for extending

banking facilities on accou nt of regimental funds vis-a-vis private fund accou nts.

11 .5 .9 O p en e n de d m u tu al fu nd s

2 0 1 1 2 0 1 0 N am e o f s e c u r ity F a c e 2 0 11 2 0 1 0 2 0 11 2 0 1 0 2 0 11 2 0 1 0

N o . o f U n i ts v a lu e R a t in g * C o s t C a r r y in g v a lu e

R s . ( R u p e e s i n ' 0 0 0 )

4 , 9 9 7 , 0 5 2 0 0 A BL G o v e rn m en t S ec u r itie s Fu n d R s.1 0 A + 5 0 , 0 0 0 0 0 5 0 , 1 0 0 0 06 , 0 0 4 , 2 9 2 5 ,0 0 0 ,0 0 0 A B L C a s h F u n d R s .1 0 A A + A A + 6 0 , 0 0 0 5 0 , 0 0 0 6 0 , 1 6 2 5 0 , 0 3 0

4 8 3 , 8 2 2 0 0 A s k a r i S o v e re ig n C a s h F u n d R s .1 0 0 A A + 5 0 , 0 0 0 0 0 4 8 , 6 2 2 0 0 9 7 , 0 8 4 9 7 ,0 8 4 A tla s M o n e y M a rk e t F u n d R s .5 0 0 A A + A A + 5 0 , 0 0 0 5 0 ,0 0 0 4 8 , 8 8 9 5 0 , 0 4 7

2 , 5 0 0 , 0 0 0 2 ,5 0 0 ,0 0 0 B M A E m p re s s C a s h F u n d R s .1 0 A A + A A + 2 5 , 0 0 0 2 5 , 0 0 0 2 5 , 2 8 7 2 6 , 4 3 76 0 2 , 8 4 9 5 0 5 ,1 9 1 H B L M o n e y M a rk e t F u n d R s .1 0 0 A A + A A + 6 0 , 0 0 0 5 0 , 0 0 0 6 2 , 2 0 5 5 1 , 9 9 55 0 0 , 0 0 0 5 0 0 ,0 0 0 IG I M o n e y M a rk e t F u n d R s .1 0 0 A A + A A + 5 0 , 0 0 0 5 0 , 0 0 0 5 0 , 3 4 1 5 0 , 3 0 7

7 8 , 2 3 4 0 0 M C B C a sh M a n a ge m e n t O p tim i ze r Fu n d R s .1 00 A A + 8 , 0 0 0 0 0 8 , 0 4 9 0 04 , 8 5 3 , 7 5 6 4 ,8 5 3, 75 6 N A F A G o ve rn m e nt S e cu ritie s L iq uid Fu nd R s .1 0 A A A A A A 5 0 , 0 0 0 5 0 , 0 0 0 4 9 , 4 2 2 5 0 , 0 4 9

5 9 , 1 8 1 , 1 3 4 5 9 ,1 8 1 ,1 3 4 N IT G o v e rn m e n t B o n d F u n d R s .1 0 A A A M 2 6 0 0 , 0 0 0 6 0 0 , 0 0 0 6 3 2 , 4 1 6 6 2 2 , 5 6 26 , 3 9 5 , 9 0 7 0 0 N IT U n it F u n d R s .1 0 A M 2- 2 0 0 , 0 0 0 0 0 1 6 5 , 6 5 4 0 0

2 0 , 0 0 0 , 0 0 0 2 0 ,0 0 0 ,0 0 0 N IT In c o m e F u n d R s .1 0 A A - A M 2 2 0 0 , 0 0 0 2 0 0 , 0 0 0 2 1 5 , 6 2 2 2 1 1 ,1 6 05 0 4 , 9 2 7 5 0 4, 92 7 P a k O m a n A d v an ta g e Is la m ic In co m e F u nd R s .5 0 A + A + 2 5 , 0 0 0 2 5 , 0 0 0 2 6 , 5 3 2 2 6 , 0 3 4

2 , 5 0 0 , 0 0 0 0 0 P a k O m a n G o ve rn m e n t S e c ur itie s F u nd R s .1 0 A A 2 5 , 0 0 0 0 0 2 5 , 5 7 9 02 5 0 , 0 0 0 2 5 0 ,0 0 0 P IC IC C a s h F u n d R s .1 0 0 A A + A A + 2 5 , 0 0 0 2 5 , 0 0 0 2 5 , 0 6 9 2 5 , 1 3 5

1 , 4 7 8 , 0 0 0 1 ,1 2 5 ,0 0 0 1 , 4 9 3 , 9 4 9 1 , 1 6 3 , 7 5 6

1 3 1 , 3 5 2 , 2 5 4 6 1 , 2 6 9 , 1 0 2 1 3 1 , 6 5 3 , 5 7 1 6 0 , 6 7 6 , 0 7 0

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11 .8 .1 S u k uk s a r e r ed e e m a ble s e m i -a n n u al ly.

11 .8 . 2 T hese S ukuks have f ace va lue o f Rs . 5 , 000 pe r ce r ti fi ca te ex cep t fo r D a r A l A r kan In t e r na ti ona l S ukuk C om pany an d

Governm ent o f Pak is tan Suku k which ha ve face va lue o f US $ 10 0 per ce r t if ica te . L iber ty Powe r Tech L imi ted s Sukuk

w h ich has f ace v a lue o f Rs . 1 , 000 p e r ce r t if ica te and G ove r nm e n t o f P ak i s tan I j a r ah S ukuk w h i ch h ave f ace va lue

of Rs. 100,00 0 per cer t i f ica te .

11.8 S u k u k s

F e d e ra l G o v e rn m e n t S e c u rit ie s

A v a ila b le fo r s a le

0 0 1 ,0 0 0 0 0 S e p -11 G ov e rn m en t o f P a k is ta n Ija ra h S u k u k 6 m on th s T -B ills p lu s 4 5 b p s 0 0 1 0 0 , 0 0 0

3 0 , 0 0 0 3 0,0 00 1 00 ,0 00 M a r-1 2 G o v ern m en t o f P a k is ta n Ija ra h S uk uk -I II W e ig hte d a ve ra ge 3 , 0 0 0 , 0 0 0 3 , 0 0 0 , 0 0 0

6 m o n th s T - B i l l s r a t e1 0 ,0 0 0 0 0 1 00 ,0 00 M a y-1 4 G o ve rn m en t o f P a kis ta n Ija ra h S u ku k-V III W e ig hte d a ve ra ge 1 , 0 0 0 , 0 0 0 0 0

6 m o n th s T - B i l l s r a t e

4 , 0 0 0 , 0 0 0 3 , 1 0 0 , 0 0 0

O th e rs


2 0 ,0 0 0 2 0 ,0 0 0 8 ,9 9 5 J u ly - 1 2 D a r A l A r k a n In te r n a tio n a l S u k u k C o m p a n y 3 m o n th s ' L IB O R p lu s 2 2 5 bp s 1 7 9 ,8 9 1 1 7 1 , 2 7 3

1 7 0 ,0 0 0 1 7 0 ,0 0 0 5 ,0 0 0 J a n - 1 7 E n g r o F o o d s L im it e d 6 m o n th s ' K IB O R p lu s 6 9 b p s 8 5 0 ,0 0 0 8 5 0 , 0 0 0

1 ,0 8 7 ,8 4 9 1 ,0 1 3 ,7 0 6 1 ,0 0 0 M a r - 2 1 L ib e r t y P o w e r Te c h L im ite d 3 m o n th s ' K IB O R p lu s 3 0 0 b p s 1 ,0 8 7 ,8 4 9 1 , 0 1 3 , 7 0 6

4 0 ,0 0 0 4 0 ,0 0 0 2 ,0 0 0 D ec - 1 2 S u i S ou th e r n G a s C om p a n y L im it e d 3 m o n th s ' K IB O R p lu s 2 0 b p s 8 0 ,0 0 0 1 6 0 , 0 0 0

1 5 0 ,0 0 0 1 50 ,0 00 5 ,0 00 J uly -1 7 W A P D A S e c o nd S u k uk C o m p an y L im it e d 6 m o nth s' K IB O R le ss 2 5 b ps 7 5 0 ,0 0 0 7 5 0 , 0 0 0

2 ,9 4 7 ,7 4 0 2 , 9 4 4 , 9 7 9

H e ld to M a tu rity

5 , 0 0 0 5 ,0 0 0 5 ,0 0 0 O c t-1 2 W A P D A F irs t S u k u k C o m p a n y L im ite d 6 m o n th s ' K IB O R plu s 3 5 b p s 2 5 , 0 0 0 2 5 , 0 0 0

2 5 0 , 0 0 0 2 5 0 ,0 0 0 9 6 8 M a r-2 1 L ib e r ty P o w e r Te c h L im ite d 3 m o n th s ' K IB O R p lu s 3 0 0 b p s 2 4 1 , 9 0 0 2 5 0 , 0 0 0

2 6 6 , 9 0 0 2 7 5 , 0 0 0

3 , 2 1 4 , 6 4 0 3 , 2 1 9 , 9 7 9

7 , 2 1 4 , 6 4 0 6 , 3 1 9 , 9 7 9

R e d e e m a b l ev a lu e p e r M a t u rit y

2 0 1 1 2 0 1 0 c e r tif ic a te D a te N a m e o f S e c u r ity R a te 2 0 1 1 2 0 1 0N o o f c e r tif ic a te s (R u p e e s ) (R u p e e s in '0 0 0 )


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11.9 Term Finance Cert i f icates

L is te d - A v a ila b le fo r s a le

6 , 0 0 0 6 ,0 0 0 4 ,9 9 0 D e c -1 4 A llie d B a n k L im ite d * 6 m o n th s ' K IB O R p lu s 1 9 0 b p s 2 9 , 9 4 0 2 9 , 9 5 2

3 3 , 8 0 0 3 3 ,8 0 0 4 ,9 9 6 A u g -1 9 A llie d B a n k L im ite d - I I* 6 m o n th s ' K IB O R p lu s 8 5 b p s 1 6 8 ,8 6 5 1 6 8 , 9 3 2

5 , 0 0 0 5 ,0 0 0 4 ,9 8 8 O c t-1 3 A s k a r i B a n k L im ite d - I I* 6 m o n th s ' K IB O R p lu s 1 5 0 b p s 2 4 , 9 4 0 2 4 , 9 5 0

4 0 , 0 0 0 4 0 ,0 0 0 4 ,9 9 2 N o v -1 5 E n g ro F e r til iz e rs L im ite d - I II 6 m on th s ' K IB O R p lu s 1 5 5 b p s 1 9 9 ,6 8 0 1 9 9 , 7 6 0

5 ,0 0 0 5 ,0 00 2 ,4 96 M a y- 1 2 J a ha ng ir S id d iq ui & C om p an y L im it e d - IV 6 m o nth s' K IB O R p lu s 2 50 b p s 1 2 ,4 7 8 2 4 , 9 6 06 ,6 0 0 6 ,6 0 0 4 ,9 9 3 M a r - 1 6 N IB B a n k L im ite d * 6 m o n th s ' K IB O R p lu s 11 5 b p s 3 2 ,9 5 4 3 2 , 9 6 7

2 0 ,0 0 0 2 0 ,0 0 0 8 3 3 M a y - 1 2 O rix L e a s in g P ak is ta n L im ite d - I I I 6 m o n th s ' K IB O R p lu s 1 5 0 b p s 1 6 ,6 5 4 4 9 , 9 6 0

2 0 ,0 0 0 2 0 ,0 0 0 3 ,7 0 0 F e b - 1 3 P a k A r a b F e r t il iz e r L im it e d 6 m on th s ' K IB O R p lu s 1 5 0 b p s 7 4 ,0 0 0 9 4 , 0 0 0

5 ,0 0 0 5 ,0 0 0 4 ,9 9 0 S e p - 1 4 U n it e d B a n k L im i te d - I I I * 6 m o n th s ' K IB O R plu s 1 7 0 b p s 2 4 ,9 5 0 2 4 , 9 6 0

5 8 4 ,4 6 1 6 5 0 , 4 4 1

R e d e e m a b l ev a lu e p e r M a t u rit y

2 0 1 1 2 0 1 0 c e r tif ic a te D a te N a m e o f S e c u r ity R a te 2 0 1 1 2 0 1 0N o o f c e r tif ic a te s (R u p e e s ) (R u p e e s in '0 0 0 )

U n lis te d - A v a ila b le fo r s a le

1 5 0 0 0 1 ,0 0 0 ,0 0 0 D e c -2 1 A s k a r i B a n k L im ite d - IV * 6 m on th s ' K IB O R plu s 1 7 5 b p s 1 5 0 , 0 0 0 0 0

2 0 , 0 0 0 2 0 ,0 0 0 4 ,9 9 6 D e c -1 7 B a n k A lfa la h L im ite d - IV * 1 5 % pe r a n n u m 9 9 ,9 2 0 9 9 , 9 6 0

0 0 5 5 2 ,8 0 0 0 0 S ep -1 4 P ow er H old in g (P riv a te ) L im ite d 6 m o nth s' K IB O R p lu s 2 0 0 b p s 0 0 2 , 7 6 4 , 0 0 0

s e e n o t e ( 1 1 . 5 . 1 0 )

0 0 5 8 7 ,5 2 1 0 0 M a r- 1 4 P o w e r H old in g ( P riv ate ) L im i te d - II 6 m o nth s' K IB O R p lu s 1 75 b p s 0 0 2 , 9 3 7 , 6 0 5

s e e n o t e ( 1 1 . 5 . 1 0 )

2 4 9 ,9 2 0 5 , 8 0 1 , 5 6 5

L is te d - H e ld to M a tu rit y

2 0 , 0 0 0 2 0 ,0 0 0 4 ,9 8 7 F e b -1 3 A s k a r i B a n k L im ite d * 6 m o n th s ' K IB O R p lu s 1 5 0 b p s 9 9 , 7 4 0 9 9 , 7 8 0

1 7 , 4 0 0 1 7 ,4 0 0 4 ,9 9 6 A u g -1 9 A llie d B a n k L im ite d - I I* 6 m o n th s ' K IB O R p lu s 8 5 b p s 8 6 ,9 3 0 8 6 , 9 6 5

1 5 , 0 0 0 1 5 ,0 0 0 3 ,3 2 5 N o v -1 2 B a n k A l F a la h L im ite d - II* 6 m o n th s ' K IB O R plu s 1 5 0 b p s 4 9 , 8 6 8 7 4 , 8 2 7

9 , 0 0 0 9 ,0 0 0 2 ,4 9 5 F e b -1 3 F a y s a l B a n k L im ite d * 6 m o n th s ' K IB O R p lu s 1 9 0 b p s 2 2 ,4 5 5 3 3 , 6 8 7

5 ,0 0 0 5 ,0 0 0 3 ,7 4 1 M a y - 1 3 S o n e r i B a n k L im i te d * 6 m o n th s ' K IB O R p lu s 1 6 0 b p s 1 8 ,7 0 5 2 4 , 9 4 5

5 ,0 0 0 5 ,0 0 0 3 ,4 9 6 F e b - 1 3 S ta n d a r d C h a r te r e d B a n k ( P a k is ta n ) L td . - II I* 6 m o n t h s' K I B O R p l u s 2 0 0 b p s 1 7 ,4 8 0 2 3 , 7 1 0

1 ,0 7 0 1 ,0 7 0 3 ,3 2 5 A u g - 1 2 U n it e d B a n k L im i te d * 8 .4 5 % p e r a n n u m 3 ,5 5 8 5 , 3 3 8

4 ,0 0 0 4 ,0 0 0 4 ,9 9 9 M a r - 1 3 U n it e d B a n k L im i te d - I I * 9 .4 9 % p e r a n n u m 1 9 ,9 9 5 1 9 , 9 9 6

5 ,0 0 0 5 ,0 0 0 4 ,9 9 0 S e p - 1 4 U n it e d B a n k L im i te d - I I I * 6 m o n th s ' K IB O R p lu s 1 7 0 b p s 2 4 ,9 5 0 2 4 , 9 6 0

3 4 3 ,6 8 1 3 9 4 , 2 0 8

U n lis te d - H e ld to M a tu rit y

2 , 5 0 0 2 ,5 0 0 5 0 ,0 0 0 J a n -1 3 O rix L e a s in g P ak is ta n L im ite d - IV 6 m o n th s ' K IB O R p lu s 1 2 0 bp s 1 2 5 , 0 0 0 2 0 8 , 3 3 3

1 ,3 0 3 ,0 6 2 7 , 0 5 4 , 5 4 7


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*These Term Finance Certificates are subordinated.

11.9.1 Term Finance Certificates are redeemable semi-annually.

11.9.2 These Term Finance Certificates have face value of Rs. 5,000 per certificate except for Orix Leasing Pakistan

Limited - IV, which have face value of Rs.100,000 per certificate and Askari Bank Limited - IV which have face

value of Rs. 1,000,000 per certificate.

11.10 Foreign Currency Bonds

R e d e e m a b l ev a lu e pe r M a tu r ity2 0 1 1 2 0 1 0 c e r tif ic a te D a te N a m e o f S e c u r ity R a te 2 0 1 1 2 0 1 0

N o o f c e r t if ic a te s (R u p e e s ) (R u p e e s in 0 0 0 )o f U S $ 1 0 0 e a c h

F e d e ra l G o v e rn m e n t S e c u ri tie s


6 0 ,0 0 0 4 0 , 0 0 0 7 , 5 8 4 J u n e - 1 7 G o v e r n m e n t o f P a k i s t a n B o n d s 6 . 8 7 5 % p . a . 4 5 5 ,0 6 8 2 9 7 , 2 0 3

2 0 ,0 0 0 2 0 ,0 0 0 8 ,2 7 5 M a r- 16 G o v er nm e n t o f P a k is ta n B o n ds 7 .1 2 5% p .a . 1 6 5 ,4 9 0 1 5 4 , 3 3 5

6 2 0 ,5 5 8 4 5 1 , 5 3 8

O th e rs


4 0 ,0 0 0 4 0 ,0 00 8 ,9 73 O c t- 1 2 G o ve rn m e n t o f S r i la nk a B o nd s 8 .2 5 0 % p .a . 3 5 8 ,9 1 6 3 4 0 , 7 0 9

9 7 9 ,4 7 4 7 9 2 , 2 4 7

1 1. 10 .1 F o re ig n C u r re n c y B o nd s a re r e d ee m a b le s e m i -a n n ua ll y.

1 1 .1 1 O rd in a ry s h a re s o f u n li s te d c o m p a n ie s

3 ,0 0 0 ,0 0 0 3 , 0 0 0 , 0 0 0 K h u s h h a l i B a n k L i m i t e d 3 0 ,0 0 0 3 0 , 0 0 0

P a r v a l u e p e r s h a r e : R s . 1 0B r e a k - u p v a l u e p e r s h a r e : R s . 1 3 ( 2 0 1 0 : R s . 1 2 . 1 8 ) b a s e d o n a u d i t e d f in a n c i a l s ta t e m e n t s f o r th e y e a r e n d e d 3 1 D e c e m b e r 2 0 1 0C h i e f E x e c u t iv e : M r . G h a l i b N i s h t a r

5 6 9 ,9 5 8 5 6 9 , 9 5 8 P a k i s t a n E x p o r t F i n a n c e G u a r a n t e e A g e n c y L i m i t e d 5 ,7 0 0 5 , 7 0 0P a r v a l u e p e r s h a r e : R s . 1 0B r e a k - u p v a l u e p e r s h a r e : R s . 1 . 1 6 ( 2 0 1 0 : R s . 1 . 1 6 ) b a s e d o n a u d i t e d f in a n c i a l s ta t e m e n t s f o r th e y e a r e n d e d 3 1 D e c e m b e r 2 0 0 9C h i e f E x e c u t i v e : M r . S . M . Z a e e m

2 4 2 4 S o c i e t y f o r W o r l d w i d e I n t e r b a n k F i n a n c i a l T e l e c o m m u n i c a t i o n ( S . W . I . F . T ) 3 ,8 7 0 3 , 8 7 0A l l o c a te d s h a r e s b a s e d o n t h e f i n a n c i a l c o n t ri b u t io n f r o m n e t w o r k b a s e d

s e r v i ce d b y t h e B a n k .

3 9 ,5 7 0 3 9 , 5 7 0

2 0 11 2 0 1 0 N a m e o f c o m p a n ie s

N o . o f o r d i n a r y s h a r e s


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9 , 3 6 6 , 3 1 2 7 ,4 9 3 ,0 5 0 H a b ib S u g a r M ills L im ite d 11 .1 2 .1 2 4 8 , 3 1 5 2 3 5 , 3 9 8% o f h o ld i n g : 6 . 2 4 % ( 2 0 1 0 : 6 . 2 4 % )P a r v a l u e p e r s h a r e : R s . 5M a r k e t v a l u e : R s . 2 0 5 . 2 1 6 m i ll io n ( 2 0 1 0 : R s . 2 4 9 . 5 9 3 m i ll io n )C h i e f E x e c u t i ve : M r . R a e e s u l H a s a n

3 , 3 7 5 , 0 0 0 3 ,3 7 5 ,0 0 0 H a b ib A s s e t M a n a g e m e n t L im ite d 11 .1 2 .2 3 5 , 2 5 4 3 3 , 7 4 7

% o f h o ld i n g : 3 0 % ( 2 0 1 0 : 3 0 % )P a r v a l u e p e r s h a r e : R s . 1 0B r e a k u p v a l u e p e r s h a r e : R s . 1 0 . 3 6 ( 2 0 1 0 : R s . 9 . 9 1 ) b a s e d o n a u d i te df i n a n c i a l s t a t e m e n t s f o r th e y e a r e n d e d 3 0 J u n e 2 0 1 1C h i e f E x e c u t i v e : M r . I m r a n A z i m

5 , 2 6 6 , 8 4 2 5 , 7 4 4 , 9 2 5 F i r st H a b i b I n c o m e F u n d 5 4 1 , 2 8 3 5 9 2 , 2 6 6A v e r a g e c o s t p e r u n i t: R s . 1 0 4 . 4 4 ( 2 0 1 0 : R s . 1 0 4 . 4 3 9 9 )N e t a s s e t v a l u e R s . 1 0 2 . 7 7 ( 2 0 1 0 : R s . 1 0 2 . 6 4 )M a n a g e m e n t C o m p a n y : H a b i b A s s e t M a n a g e m e n t L im i t e dC h i e f E x e c u t iv e o f t h e M a n a g e m e n t C o m p a n y : M r . Im r a n A z i m

5 0 0 , 0 0 0 5 00 ,0 00 F irs t H a b ib S to ck F un d 4 4 , 1 4 9 5 5 , 2 7 0

A v e r a g e c o s t p e r u n i t : R s . 1 0 0 ( 2 0 1 0 : R s . 1 0 0 )N e t A s s e t V a l u e R s . 8 8 . 2 9 8 3 ( 2 0 1 0 : R s . 1 1 0 . 5 4 )M a n a g e m e n t C o m p a n y : H a b i b A s s e t M a n a g e m e n t L im i t e dC h i e f E x e c u t iv e o f t h e M a n a g e m e n t C o m p a n y : M r . Im r a n A z i m

1 , 0 1 0 , 2 4 9 0 0 F irs t H a b ib C a s h F u n d 11 .1 2 .3 1 0 4 , 0 9 4 0 0A v e r a g e c o s t p e r u n i t : R s . 9 8 . 9 9N e t A s s e t V a l u e R s . 1 0 3 . 0 3 7 6M a n a g e m e n t C o m p a n y : H a b i b A s s e t M a n a g e m e n t L im i t e dC h i e f E x e c u t iv e o f t h e M a n a g e m e n t C o m p a n y : M r . Im r a n A z i m

9 7 3 , 0 9 5 9 1 6 , 6 8 1

11 .1 2 A s s o c ia te s

2 0 11 2 0 1 0 N a m e o f c o m p a n ie s N o te 2 0 11 2 0 1 0

N o . o f o rd in a ry s h a r e s ( R u p e e s in 0 0 0 )

1 1 .1 2 . 1 D u e t o c o m m o n d i re c t o r sh i p in H a b i b S u g a r M i ll s L i m i te d , th e B a n k c o n s i d e rs th e in v e s t e e c o m p a n y a s a n a s so c i a te .

1 1 .1 2 . 2 I n c lu d e s R s . 2 4 . 7 5 0 ( 2 0 1 0 : R s . 2 4 . 7 5 0 ) m i ll io n i n v e s te d i n H a b i b A s s e t M a n a g e m e n t L im i t e d c la s s i fi e d a s s tr a t e g ic i n v e s tm e n t in a c c o r d a n c e w i t hS B P s g u id e l in e s c o n t a i n e d i n B P D C i r c u la r L e t te r N o . 1 6 o f 2 0 0 6 d a t e d 0 1 A u g u s t 2 0 0 6 .

1 1 .1 2 . 3 T h i s in c l u d e s in v e s t m e n t i n s e e d c a p i ta l a g g r e g a ti n g to R s . 5 0 m i ll io n w h i c h i s r e q u ir e d t o b e h e l d fo r a p e r io d o f t w o y e a r s .

1 1 .1 2 .4 M o ve m en t o f In ve stm en t in a ss o c ia tes

O p e n i n g b a la n c e 9 1 6 , 6 8 1 1 , 0 6 5 , 1 8 8S h a r e o f p r o f it 8 4 , 5 4 6 1 0 8 , 9 7 8I n v e s tm e n t - n e t 5 2 , 9 4 9 ( 1 7 4 , 7 5 2 )D i v i d e n d r e c e i v e d (8 1 ,0 8 1 ) ( 8 2 , 7 3 3 )

C l o s i n g b a l a n c e 9 7 3 , 0 9 5 9 1 6 , 6 8 1


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12. ADVANCES

Loans, cash credits, running finances, etc.In Pakistan 101,962,223 109,815,776Outside Pakistan 4,325,819 1,934,958

106,288,042 111,750,734

Net investment in finance lease / Ijarah financingIn Pakistan 12.2 426,351 513,601Outside Pakistan 000 000

426,351 513,601

Ijarah financing under IFAS 2 12.3 & 5.6 109,668 131,575

Murabaha 12.4 2,007,557 2,018,596

Bills discounted and purchased (excluding market treasury bills)Payable in Pakistan 1,928,992 2,401,449

Payable outside Pakistan 9,233,700 12,267,818

11,162,692 14,669,267

Advances - gross 119,994,310 129,083,773Provision against non-performing loans and advancesSpecific provision 12.5 (2,998,847) (1,682,297)General provision against consumer advances (as per SBP regulations) 12.6.1 (32,331) (28,184)General provision 12.6.2 (2,100,000) (1,600,000)

(5,131,178) (3,310,481)

Advances - net of provisions 114,863,132 125,773,292

12.1 Particulars of advances - gross

12.1.1 In local currency 98,292,544 105,479,320In foreign currencies 21,701,766 23,604,453

119,994,310 129,083,773

12.1.2 Short term (for upto one year) 99,426,895 110,187,410Long term (for over one year) 20,567,415 18,896,363

119,994,310 129,083,773

125


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126

1 2 . 2 N e t in v e s tm e n t in fi n a n c e le a s e / I ja ra h fi n a n c in g

12.3 I ja rah f inancing under IFAS 2

2 0 11 2 0 1 0L a te r th a n L a t e r t h a n

N o t la te r o n e a n d N o t l a te r o n e a n dt h a n o n e l e s s t h a n O v e r fi v e t h a n o n e le s s th a n O v e r f iv e

y e a r f iv e y e a r s y e a r s T o t a l y e a r f iv e y e a r s y e a r s To ta l( R u p e e s i n ' 0 0 0 )

L e a s e / i j a r a h r e c e i v a b l e 2 0 0 ,0 9 5 1 9 0 ,1 5 3 0 3 9 0 ,2 4 8 2 5 9 , 2 5 8 2 1 7 , 0 1 9 0 4 7 6 , 2 7 7R e s i d u a l v a l u e 3 0 ,5 5 5 7 4 ,0 3 2 0 1 0 4 ,5 8 7 3 9 , 7 2 0 7 8 , 2 0 0 0 1 1 7 , 9 2 0

M i n i m u m l e a s e / ij a r a h p a y m e n t s 2 3 0 ,6 5 0 2 6 4 ,1 8 5 0 4 9 4 ,8 3 5 2 9 8 , 9 7 8 2 9 5 , 2 1 9 0 5 9 4 , 1 9 7F i n a n c i a l c h a r g e s f o r f u t u r e

p e r io d s ( 3 9 , 2 1 9 ) ( 2 9 ,2 6 5 ) 0 (6 8 ,4 8 4 ) (4 7 ,4 0 4 ) ( 3 3 ,1 9 2 ) 0 ( 8 0 , 5 9 6 )P r e s e n t v a l u e o f f i n a n c e le a s e / i ja r a h f in a n c in g 1 9 1 ,4 3 1 2 3 4 ,9 2 0 0 4 2 6 ,3 5 1 2 5 1 , 5 7 4 2 6 2 , 0 2 7 0 5 1 3 , 6 0 1

2 0 11

C o s t A c c u m u l a te d D e p r e c i a t i o n B o o k V a lu e

A s a t A s a t A s a t A s a t A s a t

0 1 J a n . 3 1 D e c . 0 1 J a n . 3 1 D e c . 3 1 D e c . R a t e

2 0 11 A d d i t io n s 2 0 1 1 2 0 1 1 C h a r g e 2 0 1 1 2 0 1 1 %

( R u p e e s i n ' 0 0 0 )

E q u ip m e n t 2 2 9 ,6 9 5 4 2 ,6 9 0 2 7 2 ,3 8 5 1 0 3 ,3 1 7 7 4 ,6 9 2 1 7 8 ,0 0 9 9 4 ,3 7 6

V e h ic le s 6 ,1 9 8 1 4 ,1 8 5 2 0 ,3 8 3 1 ,0 0 1 4 ,0 9 0 5 ,0 9 1 1 5 ,2 9 22 3 5 ,8 9 3 5 6 ,8 7 5 2 9 2 ,7 6 8 1 0 4 ,3 1 8 7 8 ,7 8 2 1 8 3 ,1 0 0 1 0 9 ,6 6 8 3 3 .3 3

2 0 1 0C o s t A c c u m u la te d D e p r e c ia t io n B o o k Va lu e

A s a t A s a t A s a t A s a t A s a t0 1 J a n . 3 1 D e c . 0 1 J a n . 3 1 D e c . 3 1 D e c . R a te

2 0 1 0 A d d it io n s 2 0 1 0 2 0 1 0 C h a r g e 2 0 1 0 2 0 1 0 %( R u p e e s i n ' 0 0 0 )

E q u ip m e n t 1 6 4 ,9 6 0 6 4 ,7 3 5 2 2 9 ,6 9 5 3 7 ,6 3 7 6 5 ,6 8 0 1 0 3 ,3 1 7 1 2 6 ,3 7 8V e h ic le s 0 6 ,1 9 8 6 ,1 9 8 0 1 ,0 0 1 1 ,0 0 1 5 ,1 9 7

1 6 4 ,9 6 0 7 0 ,9 3 3 2 3 5 ,8 9 3 3 7 ,6 3 7 6 6 ,6 8 1 1 0 4 ,3

consolidated annual report 2011

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