consolidated annual report 2012

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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, 2012.

(Rupees in '000)

Profit for the year before tax 8,929,242

Taxation (3,418,722)

Profit for the year after tax 5,510,520

Share of loss attributable to minority interest 3,029

Profit attributable to shareholders 5,513,549

Unappropriated profit brought forward 3,767,998

Transfer from surplus on revaluation of fixed assets - net of tax 37,370

Profit available for appropriation 9,318,917

Appropriations:

Transfer to Statutory Reserve (1,089,303)

Cash Dividend - 2011 (2,196,493)

Issue of Bonus Shares - 2011 (1,317,896)

(4,603,692)

Un-appropriated profit carried forward 4,715,225

Earnings per share (after tax) Rs. 5.46

Pattern of Shareholding

The pattern of shareholding as at December 31, 2012 is annexed with the financial statements of

Bank AL Habib Limited.

On behalf of the Board of Directors

ALI RAZA D. HABIB

Karachi: February 14, 2013Chairman

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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 2012, 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. We have also expressed separate opinion

and review conclusion on the financial statements of the Bank and its subsidiary company respectively. These

financial statements are the responsibility of the Banks management. Our responsibility is to express an

opinion on these financial statements based on our audit.

Our audit was conducted in accordance with the International Standards on Auditing and accordingly included

such tests of accounting records and such other auditing procedures as we considered necessary in the

circumstances.

In our opinion, the consolidated financial statements present fairly the financial position of the Bank and its

subsidiary company as at 31 December 2012 and the results of their operations for the year then ended.

Ernst & Young Ford Rhodes Sidat Hyder

Karachi: February 14, 2013 Chartered AccountantsAudit Engagement Partner: Arslan Khalid


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Consolidated Statement of Financial PositionAs at 31 December 2012

2012 2011Note (Rupees in '000)

ASSETS

Cash and balances with treasury banks 8 27,464,345 22,957,988Balances with other banks 9 9,747,248 6,744,643Lendings to financial institutions 10 993,981 000Investments 11 249,923,504 223,105,101

Advances 12 147,859,828 114,863,132Operating fixed assets 13 11,211,423 10,791,345Deferred tax assets 000 000Other assets 14 6,153,613 6,063,405

453,353,942 384,525,614LIABILITIES

Bills payable 15 5,257,191 4,979,720Borrowings 16 69,622,055 43,441,594Deposits and other accounts 17 340,386,558 302,097,187Sub-ordinated loans 18 6,489,300 7,390,358Liabilities against assets subject to finance lease 19 000 28

Deferred tax liabilities 20 1,929,441 1,232,433Other liabilities 21 5,490,982 5,373,006

429,175,527 364,514,326

NET ASSETS 24,178,415 20,011,288

REPRESENTED BY :

Share capital 22 10,103,868 8,785,972Reserves 6,464,546 5,324,689Unappropriated profit 4,715,225 3,767,998

Equity attributable to the shareholders of the Holding company 21,283,639 17,878,659Non-controlling interest 106,753 109,782

Total equity 21,390,392 17,988,441Surplus on revaluation of assets - net of tax 23 2,788,023 2,022,847

24,178,415 20,011,288

CONTINGENCIES AND COMMITMENTS 24

The annexed notes 1 to 48 form an integral part of these consolidated financial statements.

101

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 2012

2012 2011Note (Rupees in '000)

Mark-up / return / interest earned 26 41,474,034 36,529,237Mark-up / return / interest expensed 27 (26,105,028) (22,499,843)

Net mark-up / return / interest income 15,369,006 14,029,394

Provision against non-performing loans and advances 12.6 (466,101) (1,820,788)Reversal of provision for diminution in the value of investments 14 9Bad debts written-off directly 00 00

(466,087) (1,820,779)

Net mark-up / return / interest income after provisions 14,902,919 12,208,615

NON MARK-UP / INTEREST INCOME

Fees, commission and brokerage income 1,520,773 1,315,699Dividend income 262,664 153,855Income from dealing in foreign currencies 577,887 739,706Gain on sale / redemption of securities - net 28 77,686 447Unrealised gain / (loss) on revaluation of investments classified as held for trading 00 00Share of profit from associates 140,224 84,546Other income 29 479,600 440,408

Total non mark-up / interest income 3,058,834 2,734,661

17,961,753 14,943,276NON MARK-UP / INTEREST EXPENSES

Administrative expenses 30 (8,834,298) (7,621,965)Other provisions / (write-offs) / gains 31 (12,060) (16,064)Other charges 32 (186,153) (146,254)

Total non mark-up / interest expenses (9,032,511) (7,784,283)

Extra-ordinary / unusual items 00 00

PROFIT BEFORE TAXATION 8,929,242 7,158,993

Taxation Current (3,264,799) (2,454,253) Prior years 122,893 00

Deferred (276,816) (167,636)

33 (3,418,722) (2,621,889)PROFIT AFTER TAXATION 5,510,520 4,537,104

Attributable to:

Shareholders of the Holding company 5,513,549 4,537,656 Non-controlling interest (3,029) (552)

5,510,520 4,537,104

RestatedBasic and diluted earnings per share attributable to

equity holders of the Holding company - Rupees 34 5.46 4.49


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Managing Director



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Consolidated Statement of Comprehensive IncomeFor the year ended 31 December 2012

2012 2011(Rupees in '000)

Net profit for the year 5,510,520 4,537,104

Other comprehensive income

Exchange difference on translation of net investment in a foreign branch 50,554 25,729

Total comprehensive income for the year 5,561,074 4,562,833

Attributable to:

Shareholders of the Holding company 5,564,103 4,563,385

Non-controlling interest (3,029) (552)

5,561,074 4,562,833


103

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 1 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 r a n s f e r f ro m s u r p l u s o n r e v a l u 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 )

I s s u e o f b o n u s s h a r e s i n t h e r a 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 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 5 0 , 5 5 4 5 , 5 1 3 , 5 4 9 5 , 5 6 4 , 1 0 3 ( 3 , 0 2 9 ) 5 , 5 6 1 , 0 7 4

T r a n s f e r f ro m s u r p l u s o n r e v a l u 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 7 , 3 7 0 3 7 , 3 7 0 0 0 3 7 , 3 7 0

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 1 , 0 8 9 , 3 0 3 0 0 0 0 0 0 ( 1 , 0 8 9 , 3 0 3 ) 0 0 0 0 0 0

C a s h d i v i d e n d ( R s . 2 . 5 p e r s h a r e ) 0 0 0 0 0 0 0 0 0 0 0 0 ( 2 , 1 9 6 , 4 9 3 ) ( 2 , 1 9 6 , 4 9 3 ) 0 0 ( 2 , 1 9 6 , 4 9 3 )

I s s u e o f b o n u s s h a r e s i n t h e r a t io o f 1 5 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 , 3 1 7 , 8 9 6 0 0 0 0 0 0 0 0 0 ( 1 , 3 1 7 , 8 9 6 ) 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 2 1 0 , 1 0 3 , 8 6 8 5 , 6 3 0 , 1 7 2 1 2 6 , 5 0 0 5 4 0 , 0 0 0 1 6 7 , 8 7 4 4 , 7 1 5 , 2 2 5 2 1 , 2 8 3 , 6 3 9 1 0 6 , 7 5 3 2 1 , 3 9 0 , 3 9 2

T h e a n n e x e d n o t e s 1 t o 4 8 f o rm a n i n t e g r a l p a r t o f t h e s e c o n s o l i d a te d f i n a n c i a l s t a te m e n t s .

Consolidated Statement of Changes in EquityFor the year ended 31 December 2012




Managing Director



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Consololidated Cash Flow StatementFor the year ended 31 December 2012

2012 2011(Rupees in '000)

Cash Flow From Operating Activities

Profit before taxation 8,929,242 7,158,993Dividend income (262,664) (153,855)

8,666,578 7,005,138

Adjustments for non - cash items:Depreciation 810,500 766,566Amortisation 32,996 38,045Provision against non-performing loans and advances 466,101 1,820,788Reversal of provision for diminution in the value of investments (14) (9)Gain on sale of operating fixed assets (65,085) (84,469)Share of profit from associates (140,224) (84,546)Financial charges on leased assets 1 23Gain on sale / redemption of securities (77,686) (447)Provision for compensated absences 31,113 23,242Provision against off-balance sheet items 12,060 15,797

1,069,762 2,494,990

9,736,340 9,500,128

(Increase) / decrease in operating assetsLendings to financial institutions (993,981) 1,139,268Advances (33,462,797) 9,089,372Other assets (101,806) 179,369

(34,558,584) 10,408,009

Increase in operating liabilitiesBills payable 277,471 1,989,731Borrowings 26,228,864 22,030,466Deposits 38,289,371 52,336,302Other liabilities (excluding provision for taxation) 184,878 816,269

64,980,584 77,172,768

40,158,340 97,080,905

Income tax paid (3,285,625) (2,716,057)

Net cash flow from operating activities 36,872,715 94,364,848(Balance carried forward)


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Note 2012 2011(Rupees in '000)

Net cash flow from operating activities (Balance brought forward) 36,872,715 94,364,848

Cash Flow From Investing Activities

Net investments in available for sale securities (54,010,447) (70,082,696)Net investments in held to maturity securities 28,796,240 (14,836,530)Net investment in associates (157,789) 31,992Dividend received 266,653 152,496Investments in operating fixed assets (1,274,301) (1,133,063)Sale proceeds of operating fixed assets 77,697 107,484

Net cash used in investing activities (26,301,947) (85,760,317)

Cash Flow From Financing Activities

Receipts of sub-ordinated loans 000 3,000,000Payments of sub-ordinated loans (901,058) (451,902)

Payments of lease obligations (29) (381)Dividend paid (2,162,870) (1,440,922)

Net cash (used in) / from financing activities (3,063,957) 1,106,795

Exchange adjustment on translation of net investment in a foreign branch 50,554 25,729

Increase in cash and cash equivalents 7,557,365 9,737,055

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

Cash and cash equivalents at end of the year 35 37,211,593 29,654,228





Managing Director



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Notes to the Consolidated Financial StatementsFor the year ended 31 December 2012

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) is a banking company incorporated in Pakistan on 15 October1991 as a public limited company under the Companies Ordinance, 1984 having its registered officeat 126-C, Old Bahawalpur Road, Multan with principal place of business in Karachi. Its shares arelisted on all the Stock Exchanges in Pakistan. It is a scheduled bank principally engaged in thebusiness of commercial banking with a network of 308 branches (2011: 290 branches), 82 sub-branches (2011: 61) and 02 representative offices (2011: 02).The branch network of the Bankincludes a wholesale branch in the Kingdom of Bahrain (2011: 01), a branch in Karachi ExportProcessing Zone (2011: 01) and 13 Islamic Banking branches (2011: 11).

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 utilised 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 45.

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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, therequirements 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 not beenmade applicable for banks. Accordingly, the requirements of these standards have not been consideredin the preparation of these consolidated financial statements.

4. BASIS OF MEASUREMENT

These consolidated financial statements have been prepared under the historical cost conventionexcept for the certain investments, land and buildings and derivative financial instruments which arerevalued as referred 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 described below:

New and amended standards and interpretations

The Group has adopted the following amended IFRS which became effective during the year:

IAS 12 Income Taxes - Recovery of Underlying Assets (Amendment)

The adoption of the above amendment did not have any material effect on these consolidatedfinancial 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 combined

on a line by line basis by adding together like items of assets, liabilities, income and expenses.Significant intercompany transactions have been eliminated.

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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 nostros accounts.

5.4 Repurchase / resale agreements

The Bank 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 recognised in the consolidated statement of financial position and are measured inaccordance with accounting policies for investments. Amounts received under these agreementsare recorded as repurchase agreement borrowings. The difference between sale and repurchaseprice is amortised as 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 recognised in the consolidated statement of financial position. Amounts paid underthese arrangements 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.

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 Group

has 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 recognised 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 at

fair value, and transaction costs are expensed in the profit and loss account.

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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 amortised cost.

Surplus / (deficit) arising on revaluation of quoted securities which are classified as available for saleinvestments 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 realised upon disposal or in case of impairment of securities. The unrealised surplus/ (deficit) arising on revaluation of quoted securities which are classified as held for trading is takento 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 recognised 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 investee'snet assets.

Premium or discount on debt securities classified as available for sale and held to maturity isamortised 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.

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 Bank also maintains general provision in addition to therequirements 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 Bank transfers substantially all the risks and rewards incidental to ownership ofan asset to the lessee are classified as finance leases. A receivable is recognised at an amount

equal 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 atthe reporting date are recorded as inventories.


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

- 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 and

loss 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 realisation of surplus to the extent of the incremental depreciation chargefor the year.

Subsequent costs are included in the assets carrying amount or recognised 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 derecognised. 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, except that the relatedsurplus on revaluation of land and buildings (net of Deferred tax) is transferred directly to unappropriatedprofit.

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 allocatedover 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.


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Intangible assets

Intangible assets having a finite useful life are stated at cost less accumulated amortisation andimpairment, if any. Amortisation 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 amortisedon prorata basis i.e. full month amortisation in the month of purchase and no amortisation in themonth of disposal. Intangible assets with indefinite useful lives are not amortised 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.

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 unrecognisedactuarial gains / losses relating to previous reporting periods in excess of the higher of 10% ofpresent value of defined benefit obligation or 10% of the fair value of plan assets are recognisedas income or 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 recognised when the Group has a legal or constructive obligation as a result of past

events, 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.


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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 recognised 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

(a) Mark-up / interest / return on advances and investments is recognised on accrual basis, except in

case of advances classified under the Prudential Regulations on which mark-up is recognised onreceipt basis. Markup / interest / return on rescheduled / restructured loans and advances andinvestments is recognised as permitted by the regulations of SBP.

(b) Financing method is used in accounting for income from lease financing. Under this method, theunrealised 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 recognised as incomeon receipt basis.

(c) The rentals from ijarah are recognised as income over the term of the contract net of depreciationexpense relating to the ijarah assets.

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

(e) Dividend income is recognised when the right to receive is established.

(f) Gain or loss on sale of investments are recognised in profit and loss account in the year in whichthey arise.

(g) Fee, commission and brokerage income are recognised as services are performed.

5.12 Taxation

Income tax expense comprises current and deferred tax. Income tax expense is recognised in profitand loss account except to the extent that it relates to the items recognised directly in equity or

surplus on revaluation of assets, in which case it is recognised 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. Current tax assets and liabilities are measured at the amountexpected to be recovered from or paid to taxation authorities.

Deferred

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

purposes.


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

Deferred tax liabilities are recognised for all taxable temporary differences, except, in respect oftaxable temporary differences associated with investment in foreign operations, when the timingof the 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 tax assets are reviewed at each statement of financial positiondate and reduced to the extent that it is no longer probable that sufficient taxable profit or taxabletemporary differences will be available to allow all or part of the deferred tax asset to be utilised.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to theperiod when the asset is realised or the liability is settled, based on tax rates (and tax laws) thathave been enacted or substantively enacted at the statement of financial position date.

5.13 Currency translation

Functional and presentation currency

These consolidated financial statements are presented in Pak Rupees which is the Group's functionalcurrency and 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 through statement of other comprehensive income 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 recognised at the time when the Group becomes a partyto the contractual provision of the instrument. Financial assets are de-recognised 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-recognised when obligation is discharged, cancelledor expired. Any gain or loss on de-recognition of the financial asset and liability is recognised in theprofit and loss account of the current period.


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5.15 Derivative financial instruments

Derivative financial instruments are initially recognised 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 asset 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 lossaccount.

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 recognised amount and the Group

intends either to settle on a net basis, or to realise 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 recognised 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 from

those 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.

5.18.1 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 savings accounts, credit cards, consumer banking products etc to individual customers, smallmerchants and SMEs.

Commercial banking

Commercial banking represents provision of banking services including treasury and internationaltrade 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.

5.18.2 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). Basic EPS is calculated by dividingthe profit or loss attributable to ordinary shareholders of the Bank by the weighted average numberof ordinary shares outstanding during the period / year. Diluted EPS is determined by adjusting theprofit or loss attributable to ordinary shareholders and the weighted average number of ordinaryshares outstanding for the effects of all dilutive potential ordinary shares, if any. There were noconvertible dilutive potential ordinary shares in issue at 31 December 2012.

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 andassumptions 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 experienceand various other factors that are believed to be reasonable under the circumstances, the resultof 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 estimatesand underlying assumptions are reviewed on an ongoing basis. Revision to accounting estimatesare recognised 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 respectof the following:

NoteClassification of investments and provision for diminution in the value of investments 5.5 & 11Provision against non-performing advances 5.6 & 12Useful lives of assets and methods of depreciation and amortisation 5.7 & 13Defined benefit plan 5.8 & 37Provisions against off-balance sheet obligations 5.10 & 21Current and deferred taxation 5.12 & 20

7. STANDARDS, INTERPRETATIONS AND AMENDMENTS TO APPROVED ACCOUNTINGSTANDARDS THAT ARE NOT YET EFFECTIVE

The following revised standards and interpretation with respect to the approved accounting standardsas applicable in Pakistan would be effective from the dates mentioned below against the respectivestandard or interpretation:

Effective date(accounting periods beginning

Standard, interpretation or amendment on or after)

IAS 1 Presentation of Financial Statements Presentation of items of other comprehensive income 01 July 2012

IAS 19 Employee Benefits (Amendment) 01 January 2013

IAS 32 Offsetting Financial Assets and Financial liabilities (Amendment) 01 January 2014

IFRIC 20 Stripping Costs in the Production Phase of a Surface Mine 01 January 2013


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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' as described below:

Amendments to IAS 19 range from fundamental changes to simple clarification and re-wording. Thesignificant 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 recognisedin other 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 recognised in other

comprehensive income with no subsequent recycling to profit and loss.

- The distinction between short-term and other long-term employee benefits will be based on theexpected timing of settlement rather than the employees entitlement to the benefits.

- 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.

While the Group is currently assessing the full impact of the above amendments which are effectivefrom 01 January 2013 on the consolidated financial statements, it is expected that the adoption ofthe said amendments will result in retrospective change in the Group's accounting policy related torecognition of actuarial gains and losses (refer to note 5.8 to the consolidated financial statements)

to recognise actuarial gains and losses in total in other comprehensive income in the period in whichthey occur. The potential impact of the said changes on the financial position and performance forthe year 2012 upon adoption of the standards in 2013 is estimated as under:

2012(Rupees in '000)

Net decrease in unappropriated profit as on 01 January 2012 175,782Net decrease in other comprehensive income 7,984Net increase in profit or loss for the year 8,898Net increase in employees benefit liability 174,668

The impact for the year 2013 has not yet been determined by the Bank.

In addition to the above amendments, improvements to various accounting standards have also beenissued by the IASB. Such improvements are generally effective for accounting periods beginning onor after 01 January 2013. The Group expects that such improvements to the standards will not haveany material impact on the Group's financial statements in the period of initial application.

Further, following new standards have been issued by IASB which are yet to be notified by SECP forthe purpose of applicability in Pakistan.

IASB Effective date(annual periods beginning

on or after)

IFRS 9 Financial Instruments: Classification and Measurement 01 January 2015IFRS 10 Consolidated Financial Statements 01 January 2013

IFRS 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 withBPD Circular No. 01 of 2003.

8.3 Represent cash reserves maintained against foreign currency deposits mobilised under Circular FE-25 of 1998 to comply with statutory requirements.

8.4 Represents US Dollar collection account maintained with SBP in accordance with Circular FE-02 of2004.

Note 2012 2011

(Rupees in '000)

8. CASH AND BALANCES WITH TREASURY BANKS

In hand

Local currency 4,902,302 4,013,530

Foreign currencies 1,144,677 591,887

National prize bonds 27,353 14,962

6,074,332 4,620,379

In transit

Local currency 71,940 10,000Foreign currencies 3,007 00

74,947 10,000

With State Bank of Pakistan in:

Local currency current accounts 8.1 13,024,891 10,689,526

Local currency current account-Islamic Banking 8.2 224,122 198,378

Foreign currency deposit accounts

Cash reserve account 8.3 1,491,248 1,466,115

Cash reserve account-Islamic Banking 6,412 3,778

Special cash reserve account 8.3 4,473,744 4,398,345

Local US Dollar collection account 8.4 27,855 34,10719,248,272 16,790,249

With National Bank of Pakistan in:

Local currency current accounts 2,066,794 1,537,360

27,464,345 22,957,988


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9. BALANCES WITH OTHER BANKS

In PakistanCurrent accounts 751,293 734,227Deposit accounts 00 350,000Savings accounts 9.1 3,206 468,324

754,499 1,552,551

Outside Pakistan

Current accounts 2,697,112 846,210Deposit accounts 9.2 6,295,637 4,345,882

8,992,749 5,192,092

9,747,248 6,744,643

9.1 These carry expected profit rates of 6% (2011: 6.99% to 8.25%) per annum.

9.2 These carry interest rates upto 0.09% (2011: upto 0.04%) per annum.

10. LENDINGS TO FINANCIAL INSTITUTIONS

In local currencyRepurchase agreement lendings (Reverse Repo) 10.1 993,981 00

10.1 Securities held as collateral against repurchase agreement lendings

2012 2011

Further FurtherH eld by g iven as Total H eld by g iven as To ta l

B ank co llate ral Bank co llateral(Rupees in '000)

Market Treasury Bills 993,981 00 993,981 00 00 00

10.1.1 The market value of securities held as collateral against lendings to financial institutions amounted toRs. 999.753 (2011: Nil) million.


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11. INVESTMENTS

2 0 1 2 2 0 1 1N 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 G ro u p c o lla te r a l G ro u p 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 1 14 ,0 0 6 ,8 3 3 5 0 ,2 9 1 ,5 0 8 1 6 4 ,2 9 8 ,3 4 1 7 8 ,7 1 5 ,6 4 1 2 7 ,5 8 8 ,8 5 5 1 0 6 ,3 0 4 ,4 9 6P a k i s ta n I n v e s t m e n t B o n d s 1 3 ,4 4 6 ,5 6 9 0 0 1 3 , 4 4 6 , 5 6 9 1 4 ,6 1 7 ,4 8 3 0 0 1 4 , 6 1 7 , 4 8 3F o r e i g n C u r r e n c y B o n d s 1 ,1 0 8 ,4 9 9 0 0 1 , 1 0 8 , 4 9 9 9 7 9 ,4 7 4 0 0 9 7 9 , 4 7 4S u k u k s 3 ,5 0 8 ,0 0 8 0 0 3 , 5 0 8 , 0 0 8 6 ,9 4 7 ,7 4 0 0 0 6 , 9 4 7 , 7 4 0O r d i n a r y s h a r e s o f l is t e d

c o m p a n i e s 2 7 6 ,5 7 6 0 0 2 7 6 , 5 7 6 1 5 1 ,11 0 0 0 1 5 1 , 1 1 0O r d i n a r y s h a r e s o f u n l is 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 0 2 ,8 2 9 0 0 5 0 2 , 8 2 9 5 8 4 ,4 6 1 0 0 5 8 4 , 4 6 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 5 3 2 ,8 2 0 0 0 5 3 2 , 8 2 0 2 4 9 ,9 2 0 0 0 2 4 9 , 9 2 0O p e n e n d e d m u t u a l fu n d s 1 ,7 2 7 ,1 8 9 0 0 1 , 7 2 7 , 1 8 9 1 ,4 7 8 ,0 0 0 0 0 1 , 4 7 8 , 0 0 0

1 35 ,1 4 8,8 9 3 5 0 ,2 9 1,5 0 8 1 8 5,4 40 ,4 0 1 1 0 3 ,7 6 3 ,3 9 9 2 7 ,5 8 8 ,8 5 5 1 3 1 ,3 5 2 ,2 5 4

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 4 8 ,6 6 0 ,3 4 0 0 0 4 8 , 6 6 0 , 3 4 0 7 6 ,2 6 0 ,1 3 2 0 0 7 6 , 2 6 0 , 1 3 2P a k i s ta n I n v e s t m e n t B o n d s 1 2 ,5 0 3 ,5 5 2 0 0 1 2 , 5 0 3 , 5 5 2 1 3 ,4 8 2 ,7 2 2 0 0 1 3 , 4 8 2 , 7 2 2

S u k u k s 2 2 9 ,7 0 5 0 0 2 2 9 , 7 0 5 2 6 6 ,9 0 0 0 0 2 6 6 , 9 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 2 4 6 ,9 3 1 0 0 2 4 6 , 9 3 1 3 4 3 ,6 8 1 0 0 3 4 3 , 6 8 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 4 1 ,6 6 7 0 0 4 1 , 6 6 7 1 2 5 ,0 0 0 0 0 1 2 5 , 0 0 0

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

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

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

In v es tm e n ts a t c o s t 1 98 ,1 1 0,3 61 5 0,2 91 ,5 08 2 48 ,4 01 ,8 69 1 9 5 ,2 1 4 ,9 2 9 2 7 ,5 8 8 ,8 5 5 2 2 2 ,8 0 3 ,7 8 4P 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 ,5 8 6 ) 0 0 (6 ,5 8 6 ) (6 ,6 0 0 ) 0 0 ( 6 , 6 0 0 )

In 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 8 ,1 0 3 ,7 7 5 5 0 , 29 1 ,5 0 8 2 4 8 ,3 9 5 ,2 8 3 1 9 5 ,2 0 8 ,3 2 9 2 7 ,5 8 8 ,8 5 5 2 2 2 ,7 9 7 ,1 8 4

S u r p l u s o n r e v a l u a t i o n o f a v a i l a 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 ,4 3 7 ,8 9 9 9 0 ,3 2 2 1 ,5 2 8 ,2 2 1 1 6 2 ,0 5 8 1 4 5 ,8 5 9 3 0 7 ,9 1 7In 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 9 ,5 4 1 ,6 7 4 5 0 ,3 8 1 ,8 3 0 2 4 9 ,9 2 3 ,5 0 4 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 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 1 2 a m o u n t e d t o R s . 6 2 , 8 2 4 ( 2 0 1 1 : R s . 9 1 , 2 6 5 ) m i l li o n .

120


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Note 2012 2011

(Rupees in '000)

11.3 Investments by segment

Federal Government Securities

Market Treasury Bills 11.6 212,958,681 182,564,628

Pakistan Investment Bonds 11.7 25,950,121 28,100,205

Foreign Currency Bonds 11.10 1,006,813 620,558

Sukuks 11.8 1,000,000 4,000,000

240,915,615 215,285,391

Fully paid-up ordinary shares

Listed companies 11.5.5 276,576 151,110

Unlisted companies 11.11 39,570 39,570

316,146 190,680

Term finance certificates, sukuks and bonds

Term Finance Certificates

Listed term finance certificates 749,760 928,142

Unlisted term finance certificates 574,487 374,920

11.9 1,324,247 1,303,062

Sukuks 11.8 2,737,713 3,214,640

Foreign Currency Bonds 11.10 101,686 358,916

4,163,646 4,876,618

Others

Open ended mutual funds 11.5.9 1,727,189 1,478,000

Associates 11.12 1,279,273 973,095

3,006,462 2,451,095

Investments at cost 248,401,869 222,803,784

Provision for diminution in the

value of investments 11.4 (6,586) (6,600)

Investments - net of provisions 248,395,283 222,797,184

Surplus on revaluation of

available for sale investments - net 1,528,221 307,917

Investments after revaluation of

available for sale investments 249,923,504 223,105,101

121


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11.4 Particulars of provision for diminution in thevalue of investments

Available for sale investments:Opening balance 6,600 6,609Adjustment of provision upon disposal of investments (14) (9)

Closing balance 11.4.1 6,586 6,600

11.4.1 Particulars of provision in respect of type and segment

Available for sale investments:

Listed companies 886 900Unlisted companies 5,700 5,700

6,586 6,600

11.5 Quality of available for sale securities

Name of security F a c e 2 0 1 2 2 0 1 1 2 0 1 2 2 0 1 1 2 0 1 2 2 0 1 1

v a lu e R a t in g * C o s t C a r r y in g v a lu eR s . / U S D ( R u p e e s i n ' 0 0 0 )

11 .5 .1 M a r k e t T r e a s u r y B il ls U n ra te d U n r a t e d 1 6 4 ,2 9 8 ,3 4 1 1 06 ,3 0 4, 49 6 1 6 4 ,6 8 6 ,6 7 0 1 0 6 , 6 6 8 , 5 5 2

11 .5 .2 P a k is t a n In v e s tm e n t B o n d s U n ra te d U n r a t e d 1 3 ,4 4 6 ,5 6 9 1 4 , 6 1 7 , 4 8 3 1 4 ,3 8 2 ,8 7 1 1 4 , 6 5 3 , 8 0 8

11 .5 .3 F or e ig n C u r r e nc y B o n ds

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

G o v e r n 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 - 3 4 4 ,6 3 2 1 6 5 , 4 9 0 3 5 7 ,5 11 1 3 7 , 1 6 7

G o v e r n 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 + _ 1 0 1 ,6 8 6 0 0 1 0 5 ,1 6 5 0 0

G o v e r n 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 + 0 0 3 5 8 , 9 1 6 0 0 3 6 6 , 5 2 9

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

1 1 . 5 . 4 S u k u k s

2 0 1 2 2 0 1 1 N a m e o f S e c u r i t y

N o . o f c e r t i f ic a t e s

D a r A l A r ka n I n te r n a t i o n a l S u k u k

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

1 7 0 , 0 0 0 1 7 0 , 0 0 0 E n g r o F o o d s L i m i t e 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 3 0 ,0 0 0 G o v e r n m e n t o f P a k i s ta n Ij a r a h S u k u k - I I I R s .1 0 0 , 0 0 0 U n r a t e d 0 0 3 , 0 0 0 , 0 0 0 0 0 3 , 0 1 4 , 1 0 0

1 0 , 0 0 0 1 0 ,0 0 0 G o v e rn m e n t o f P a k is ta n Ij a r a h S u k u k - V I I I R s . 1 0 0 ,0 0 0 U n r a t e d U n r a t e d 1 , 0 0 0 , 0 0 0 1 , 0 0 0 , 0 0 0 1 , 0 0 9 , 8 0 0 1 , 0 0 2 , 8 0 0

1 , 0 8 7 , 8 4 9 1 , 0 8 7 , 8 4 9 L ib e r t y P o w e r T e c h L i m i t e d R s . 1 , 0 0 0 A + A A 1 , 0 3 3 , 0 0 8 1 , 0 8 7 , 8 4 9 1 , 0 3 3 , 0 0 8 1 , 0 8 7 , 8 4 9

0 0 4 0 , 0 0 0 S u i S o u t h e r n G a s C o m p a n y L i m i t e d R s . 5 , 0 0 0 A A 0 0 8 0 , 0 0 0 0 0 8 0 , 0 0 0

1 5 0 , 0 0 0 1 5 0 ,0 0 0 W A P D A S e c o n d S u k u k C o m p a n y L im i t e d R s . 5 ,0 0 0 U n r a t e d U n r a t e d 6 2 5 , 0 0 0 7 5 0 , 0 0 0 6 2 5 , 0 0 0 7 5 0 , 0 0 0 3 , 5 0 8 , 0 0 8 6 , 9 4 7 , 7 4 0 3 , 5 1 7 , 8 0 8 6 , 9 4 3 , 0 5 3


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11 .5 .6 O r din a ry sh a re s of un lis te d co m p a nie s

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

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

5 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 ted 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 rt if ic a te s

2 0 1 2 2 0 11 N am e o f s e c u r ityN o . o f c e r t i f ic 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 2 8 2 9 , 9 4 0 3 0 , 2 6 1 3 0 , 2 7 3

3 3 , 8 0 0 3 3 ,8 0 0 A l lie d B a n k L im i te d - I I R s . 5, 00 0 A A A A 1 6 8 , 7 9 7 1 6 8 , 8 6 5 1 7 0 , 3 1 6 1 6 6 , 9 6 5

5 , 0 0 0 5 , 0 0 0 A s k a r i B a n k L i m i t e d - I I R s . 5 , 0 0 0 A A A A 2 4 , 9 3 0 2 4 , 9 4 0 2 5 , 0 3 0 2 5 , 0 1 5

4 0 , 0 0 0 4 0 ,0 0 0 E ng ro F er ti liz e rs L im ite d - II I R s.5 ,0 0 0 A A A 1 9 9 , 6 0 0 1 9 9 , 6 8 0 1 9 4 , 7 5 0 1 9 5 , 5 9 3

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

6 , 6 0 0 6 , 6 0 0 N I B B a n k L i m i t e d R s . 5 , 0 0 0 A + A + 3 2 , 9 4 1 3 2 , 9 5 4 3 3 , 0 2 6 3 2 , 2 9 7

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

2 0 , 0 0 0 2 0 , 0 0 0 P a k A r a b F e r t il iz e r s L i m i t e d R s . 5 , 0 0 0 A A A A 3 0 , 0 0 0 7 4 , 0 0 0 3 0 , 0 3 1 7 4 , 0 0 0

5 , 0 0 0 5 , 0 0 0 U n i t e d B a n k L i m i t e d - I II R s . 5 , 0 0 0 A A A A 1 6 , 6 3 3 2 4 , 9 5 0 1 6 , 8 7 7 2 5 , 3 1 5

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

1 1.5 .5 O r d in a ry sh a re s o f lis te d c o m p a nie s

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

N o . o f s h a r e s 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 )

3 4 , 0 5 9 0 0 A t t o c k P e t r o l e u m L i m i t e d R s . 1 0 U n ra ted 1 5 , 2 0 7 0 0 1 7 , 4 3 8 0 0

3 , 5 9 5 0 0 A is h a S te e l L im ite d R s .1 0 A - 0 0 0 0 3 6 0 0

3 5 , 9 5 4 3 5 ,9 5 4 A r if H a b ib C o rp o ra t io n L im ite d R s.1 0 A A A A 1 , 4 7 7 1 , 4 7 7 9 5 4 9 3 2

9 , 8 0 6 9 ,8 0 6 F at im a F er ti liz e r C om pa n y L im ite d R s.1 0 A + A + 0 0 0 0 2 5 9 2 2 5

2 , 7 0 0 , 4 1 5 1 ,2 0 1 ,9 5 2 H ab ib M etro p o lita n B an k L im ite d R s.1 0 A A + A A + 3 6 , 2 0 4 2 2 , 1 3 9 3 7 , 8 4 0 2 0 , 3 0 1

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 + A A + 8 , 8 2 1 8 , 8 2 1 1 1 , 3 5 5 8 , 5 8 4

5 2 , 8 6 2 5 2 ,8 6 2 In te rn a t io n a l In d u s tr ie s L im ite d R s.1 0 U n ra ted U n ra te d 3 5 7 3 5 7 1 , 7 4 0 2 , 0 0 93 , 3 6 4 , 0 5 6 3 ,3 6 4 ,0 5 6 In te rn a t io n a l S te e l L im ite d R s .1 0 U n ra ted U n r a t e d 4 7 , 3 3 2 4 7 , 3 3 2 4 0 , 7 0 5 3 9 , 0 5 7

5 , 0 6 1 5 ,0 61 J ah an gir S id diq ui & Co m pa ny L im ite d R s .1 0 A A A A 2 8 4 2 8 4 8 2 2 1

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 + A + 22 2 2 4 1

1 0 7 , 2 6 8 0 0 M e e z a n B a n k L im ite d R s . 1 0 A A - 3 , 0 2 8 0 0 3 , 2 2 3 0 0

2 3 4 , 0 7 5 0 0 P a k is ta n O ilf ie ld s L im ite d R s .1 0 U n ra ted 8 9 , 1 1 1 0 0 1 0 2 , 4 1 7 0 0

4 2 5 , 1 6 8 2 ,5 0 0 P a k is ta n Pe tro le u m L im ite d R s .1 0 U n ra ted U n r a t e d 6 8 , 4 2 1 4 2 2 7 5 , 1 6 5 4 2 1

1 7 , 5 0 0 8 ,0 0 0 P a c k a g e s L im ite d R s .1 0 A A A A 1 , 4 2 9 6 6 8 2 , 6 4 5 6 6 2

2 0 0 , 0 0 0 0 0 P a k is ta n Te le c o m m u n ic a tio n R s .1 0 U n ra ted 2 , 6 9 4 0 0 3 , 4 7 0 0 0

1 8 , 0 0 0 0 0 S h e ll P a k is ta n L im ite d R s .1 0 U n ra ted 2 , 1 8 9 0 0 2 , 4 5 2 0 0

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

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


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* R a t i n g in c a s e o f o r d in a r y s h a r e s o f li s te d a n d u n l is t e d c o m p a n i e s r e p r e s e n t s t h e r a t in g o f in v e s t e e c o m p a n i e s , i n a ll o t h e r c a s e s ,r a t in g r e p r e s e n t s t h e r a t i n g o f u n d e r l y i n g i n s t ru m e n t s .

1 1 . 6 M a rk e t T re a s u ry B ill s

T h e s e s e c u r it ie s h a v e a m a t u r it y p e r io d o f s i x m o n t h s t o o n e y e a r ( 2 0 1 1 : s ix m o n t h s t o o n e y e a r ) , w i t h y ie l d r a n g in g b e t w e e n 9 . 2 5 %t o 1 1 .9 2 % ( 2 0 11 : 1 1 .7 8 % t o 1 3 . 9 1 % ) p e r a n n u m .

1 1 . 7 P a k is ta n In v e s tm e n t B o n d s

T h e s e s e c u r i ti e s h a v e a m a t u r it y p e r io d o f 3 , 5 , 7 a n d 1 0 y e a r s ( 2 0 1 1 : 3 , 5 , 7 a n d 1 0 y e a r s ) w i th i n te r e s t r a t e s r a n g i n g b e t w e e n 9 % t o1 2 % ( 2 0 1 1 : 9 % t o 1 2 % ) p e r a n n u m . T h e s e i n c l u d e s e c u r i ti e s c o s t i n g R s . 5 ( 2 0 1 1 : R s . 5 ) m i l li o n p l e d g e d w i th t h e C o n t r o l le r o f M i l it a r y

A c c o u n t s , K a r a c h i a s a s e c u r i ty d e p o s i t fo r e x t e n d i n g b a n k i n g f a c i li ti e s o n a c c o u n t o f r e g i m e n t a l fu n d s v i s - a - v is p r i v a t e f u n d a c c o u n t s .

124

1 5 0 1 5 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 A A 1 4 9 , 9 4 0 1 5 0 , 0 0 0 1 4 9 , 9 4 0 1 5 0 , 0 0 0

2 0 , 0 0 0 2 0 ,0 0 0 B a n k A lfa la h L im ite d - IV R s .5 ,0 0 0 A A A A 9 9 , 8 8 0 9 9 , 9 2 0 9 9 , 8 8 0 9 9 , 9 2 0

S t a n d a r d C h a r t e r e d B a n k

5 6 , 6 0 0 0 0 ( P a k is ta n ) L im ite d R s .5 ,0 0 0 A A A 2 8 3 , 0 0 0 0 0 2 8 3 , 0 0 0 0 0

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

11 .5 .8 U n lis te d te rm f in a nc e c er tif ic a te s

11 .5 .9 O p e n en d ed m u tu a l fu n ds

5 , 3 8 0 , 1 0 3 6 ,0 0 4 ,2 9 2 A B L C a s h F u n d R s .1 0 A A A A + 5 0 , 0 0 0 6 0 , 0 0 0 5 3 , 8 7 0 6 0 , 1 6 2

0 0 4 ,9 9 7 ,0 5 2 A BL G ov e rn m en t S ec u r it ie s Fu n d R s.1 0 A + 0 0 5 0 , 0 0 0 0 0 5 0 , 1 0 0

3 , 9 8 4 4 8 3 ,8 2 2 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 A A A + 1 8 9 5 0 , 0 0 0 4 0 1 4 8 , 6 2 2

2 4 , 6 5 7 9 7 ,0 8 4 A t la s M o n e y M a rk e t F u n d R s .5 0 0 A A A A + 1 2 , 0 0 0 5 0 ,0 0 0 1 2 , 4 5 3 4 8 , 8 8 9

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 + 0 0 0 2 5 , 0 0 0 0 0 2 5 , 2 8 7

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

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 + 0 0 5 0 , 0 0 0 0 0 5 0 , 3 4 1

2 6 9 , 8 5 7 7 8,2 34 M C B C a sh M an ag em e nt O p tim iz er F un d R s . 1 00 A A A A + 2 5 , 0 0 0 8 , 0 0 0 2 7 , 0 5 9 8 , 0 4 9

0 0 4 ,8 5 3,7 5 6 N A F A G o v ern m e nt S e cu rit ie s L iq u id F un d R s . 1 0 A A A 0 0 5 0 , 0 0 0 0 0 4 9 , 4 2 2

2 2 , 7 4 6 , 4 6 3 6 ,3 9 5 ,9 0 7 N IT U n it F u n d R s .1 0 A M 2 A M 2 - 7 0 0 , 0 0 0 2 0 0 , 0 0 0 7 5 4 , 9 5 5 1 6 5 , 6 5 4

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

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

0 0 5 0 4,9 2 7 P a k O m a n A dv a nt ag e Is la m ic In co m e F u nd R s . 5 0 A + 0 0 2 5 , 0 0 0 0 0 2 6 , 5 3 2

0 0 2 ,5 00 ,0 00 P a k O m a n G o ve rn m en t S e cu rit ie s F u nd R s .1 0 A A 0 0 2 5 , 0 0 0 0 0 2 5 , 5 7 9

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 + 0 0 2 5 , 0 0 0 0 0 2 5 , 0 6 9

7 8 9 , 7 4 7 0 0 P r im u s C a s h F u n d R s .1 0 0 A A A 5 0 , 0 0 0 0 0 5 2 , 5 5 8 0 0

4 2 6 , 7 0 6 0 0 U B L L iq u id ity P lu s F u n d R s .1 0 0 A A + 4 0 , 0 0 0 0 0 4 2 , 7 8 9 0 0

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

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

2 0 1 2 2 0 11 N am e of S ec u r ity F a c e 2 0 1 2 2 0 1 1 2 0 1 2 2 0 1 1 2 0 1 2 2 0 1 1

N o . o f c e r t i f ic a te s / u n i t s v a lu e R a t i n 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 )


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125

O th e rs

A v a ila b le fo r s a le

0 0 2 0 ,0 0 0 0 0 J u l - 1 2 D a r A l A r k a n I n t e r n a t io 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 b p s 0 0 1 7 9 , 8 9 1

1 7 0 ,0 0 0 1 7 0 ,0 0 0 5 ,0 0 0 J a n - 1 7 E n g ro F o o d s L im i te 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 8 7 ,8 4 9 9 5 0 M a r- 2 1 L ib e r ty P o w e r Te c h L im i te d 3 m o n th s ' K IB O R p lu s 3 0 0 b p s 1 ,0 3 3 ,0 0 8 1 , 0 8 7 , 8 4 9

0 0 4 0 ,0 0 0 0 0 D e c -1 2 S u i S o u th er n G as C o m pa ny Lim ite d 3 m on th s' K IB O R plu s 2 0 b ps 0 0 8 0 , 0 0 0

1 5 0 ,0 0 0 1 50 ,0 0 0 4 ,1 67 J u l - 1 7 W A PD A S ec o n d S uk u k C o m p a ny L im ite d 6 m on th s' K IB O R le ss 25 bp s 6 2 5 ,0 0 0 7 5 0 , 0 0 0

2 ,5 0 8 ,0 0 8 2 , 9 4 7 , 7 4 0H e ld to m a tu rit y

0 0 5 ,0 0 0 0 0 O c t-1 2 W A P DA F irs t S uk uk C o m pa ny Lim ite d 6 m on th s' K IB O R plu s 3 5 b ps 0 0 2 5 , 0 0 0

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

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

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

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

1 1 .8 . 1 T h e s e S u k u k s h a v e f a c e v a lu e o f R s . 5 , 0 0 0 p e r c e r ti fi c a te e x c e p t fo r L ib e r ty P o w e r Te c h L i m i te d s S u k u k w h i c h h a s fa c e v a l u e o f

R s . 1 ,0 0 0 p e r c e r ti fi c a t e a n d G o v e r n m e n t o f P a k i s t a n I ja r a h S u k u k w h i c h h a v e f a c e v a l u e o f R s . 1 0 0 , 0 0 0 p e r c e r t i fi c a t e .

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 ri tie s

A v a ila b le fo r s a le

0 0 3 0 ,0 0 0 0 0 M a r- 12 G o v er nm e n t o f P a kis ta n Ija ra h S uk uk - III W e ig h te d av er ag e 0 0 3 , 0 0 0 , 0 0 0

6 m o n t h s T - B i ll s r a te

1 0 , 0 0 0 1 0,0 00 1 00 ,0 00 M a y-1 4 G o ve rn m en t o f P a kis ta n I ja ra h S u ku k - V III W e ig hte d a ve ra ge 1 , 0 0 0 , 0 0 0 1 , 0 0 0 , 0 0 0

6 m o n t h s T - B i ll s r a t e

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

R e d e e m a b l e

v a lu e p e r M a t u ri ty

2 0 1 2 2 0 11 c e rt if ic a te D a te N a m e o f S e c u r ity R a te 2 0 1 2 2 0 1 1

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 )

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 8 8 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 2 8 2 9 , 9 4 0

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

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

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

0 0 5 ,0 0 0 0 0 M a y -1 2 J a ha n gir S id d iq u i & C o m p a n y L im i te d - IV 6 m o n th s ' K IB O R p l us 2 50 b p s 0 0 1 2 , 4 7 8

6 , 6 0 0 6 ,6 0 0 4 ,9 9 1 M a r -1 6 N IB B a n k L im i te d * 6 m o n th s ' K IB O R p lu s 11 5 b p s 3 2 ,9 4 1 3 2 , 9 5 4

0 0 2 0 ,0 0 0 0 0 M a y-1 2 O r ix L ea sin g P a k is ta n L im i te d - I I I 6 m o nth s' K IB O R p lu s 1 50 b ps 0 0 1 6 , 6 5 4

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

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

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

R e d e e m a b l e

v a lu e p e r M a t u ri ty2 0 1 2 2 0 11 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 2 2 0 1 1

N 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 )


29/85

126

R e d e e m a b l e

v a lu e p e r M a t u ri ty

2 0 1 2 2 0 11 c e r t if ic a te D a te N a m e o f S e c u r ity R a te 2 0 1 2 2 0 1 1

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

2 0 , 0 0 0 2 0 ,0 0 0 4 ,9 9 4 D e c -1 7 B a n k A lfa la h L im ite d - IV * 1 5 .0 0 % p e r a n n u m 9 9 ,8 8 0 9 9 , 9 2 0

5 6 , 6 0 0 0 0 5 ,0 00 J an -2 2 S ta nd ard C h ar te re d B an k (P a kis ta n) L im i te d* 6 m o n th s ' K IB O R p lu s 7 5 b ps 2 8 3 ,0 0 0 0 0

5 3 2 ,8 2 0 2 4 9 , 9 2 0L 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 5 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 0 0 9 9 , 7 4 01 7 , 4 0 0 1 7 ,4 0 0 4 ,9 9 4 A u g -1 9 A llie d B a n k L im ite d - II* 6 m o n th s ' K IB O R plu s 8 5 b p s 8 6 ,8 9 6 8 6 , 9 3 0

0 0 1 5 ,0 0 0 0 0 N o v -1 2 B a n k A lfa la h L im ite d - I I* 6 m on th s ' K IB O R p lu s 1 5 0 b p s 0 0 4 9 , 8 6 8

9 , 0 0 0 9 ,0 0 0 1 ,2 4 7 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 11 ,2 2 3 2 2 , 4 5 5

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

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

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

4 ,0 0 0 4 ,0 0 0 4 ,9 9 9 M a r - 1 3 U n i te 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 4 1 9 , 9 9 5

5 ,0 0 0 5 ,0 0 0 3 ,3 2 7 S e p - 1 4 U n i te 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 1 6 ,6 3 3 2 4 , 9 5 0

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

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

2 , 5 0 0 2 ,5 0 0 1 6 ,6 6 7 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 plu s 1 2 0 b p s 4 1 , 6 6 7 1 2 5 , 0 0 0

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

*Th e se Te rm F in a n ce C e r t i fi ca te s a re su b o rd in a te d .

1 1. 9. 1 T h e s e T e r m F i n a n c e C e r t if ic a t e s h a v e f a c e v a l u e o f R s . 5 ,0 0 0 p e r c e r t i fi c a te e x c e p t f o r O r ix L e a s i n g P a k is t a n L im i te d

- IV , wh ich h a ve fa ce va lu e o f Rs 1 0 0 ,0 0 0 p e r ce r t i fi ca te a n d Aska r i Ba n k L imi te d - IV wh ich h a v e fa ce va lu e o f R s . 1 ,0 0 0 ,0 0 0

p e r ce r t i fi ca te .

1 1 .1 0 F o r e i g n C u r r e n c y B o n d s

Re d e e ma b leva lu e pe r M a tu rity

2 0 1 2 20 11 ce rtifica te Da te Na m e o f Se cu rity R a te 2 0 1 2 2011No . o f ce rtifica te s (R u p e e s) (R u p e e s in '0 0 0 )of US $ 100 each

F ed er a l G o ver n m en t Secu r i t i es - A va i lab l e fo r sa l e

80 , 000 6 0 ,0 0 0 8 ,2 7 7 J u n -1 7 G o v e rn m e n t o f P a k is ta n B o n d s 6 .8 7 5% p .a . 6 6 2 , 181 455,068

4 0 , 000 2 0 ,0 0 0 8 ,6 16 M a r-1 6 G o ve rn m e nt o f P a kis ta n B o n d s 7 .1 2 5% p .a . 34 4 , 6 32 165,490

1 , 006 , 813 620,558

Oth er s - A va i l ab l e fo r sa l e

0 0 40 ,000 0 0 O ct-1 2 G ov ern me nt o f Sr ila nk a B on ds 8 .2 50 % p .a . 0 0 35 8 ,916

10 , 000 0 0 1 0 ,1 6 9 J a n -1 5 G o v e rn m e n t o f S ril a nk a B o n d s 7 .4 0 0 % p .a . 101 , 6 86 0 0

101 , 6 86 35 8,916

1 , 108 , 4 99 979,474

1 1. 1 0 .1 F o r e ig n C u r r e n cy B o n d s a r e r e d e e m a bl e s e m i- an n u a ll y.


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127

11.11 O 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 ,000 ,000 3,000,000 Khush hal i Bank L imited 30 ,000 30,000Par value per share: Rs. 10Break up va lue per share: Rs. 13.71 (2011: Rs. 13) based on a udi ted f inanc ia l s tatements for the year ended 31 Decemb er 2011Chief Execut ive: Mr . Ghal ib Nishtar

569,958 569,958 Pak is tan Expor t F inance Guarantee Agency L imited 5 ,700 5,700Par value per share: Rs. 10

Break up va lue per share: Rs. 1.16 (2011: Rs. 1.16) based o n audi ted f inanc ia l s tatements for the year ended 31 Decemb er 2009Chief Execut ive: Mr . S. M. Zaeem

24 24 Soc iety for Wor ldwide Interbank F inanc ia l Telecommun icat ion (S.W.I.F.T) 3 ,870 3,870 al located shares based on the f inanc ia l contribut ion from network based

serv iced by the Bank.

39 ,570 39,570

9 , 3 6 6 , 3 1 2 9 , 3 6 6 , 3 1 2 H a b ib S u g a r M i l l s L im i t e d 1 1 . 1 2 . 1 2 8 1 , 8 3 1 2 4 8 , 3 1 5% o f h o l d in g : 6 . 2 4 % ( 2 0 1 1 : 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 3 1 . 3 4 8 ( 2 0 1 1 : R s . 2 0 5 . 2 1 6 ) m i l li o n

C h ie f E x e c u t i v e : 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 i t e d 1 1 . 1 2 . 2 4 0 , 0 1 3 3 5 , 2 5 4

% o f h o ld i n g : 3 0 % ( 2 0 1 1 : 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 . 8 7 ( 2 0 1 1 : R s . 1 0 . 3 6 ) b a s e d o na u d i te d f i n a n c i a l s ta t e m e n t s f o r t h e y e a r e n d e d 3 0 J u n e 2 0 1 2

C h i e f E x e c u t i v e : M r . Im r a n A z i m

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

5 0 0 , 0 0 0 5 0 0 ,0 0 0 F ir s t H a b ib S to c k F u n d 5 6 , 6 6 5 4 4 , 1 4 9A 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 1 : R s . 1 0 0 )N e t A s s e t V a lu e : R s . 11 3 . 3 3 ( 2 0 1 1 : R s . 8 8 . 3 0 )M a n a g e m e n t C o m p a n y : H a b ib A s s e t M a n a g e m e n t L im i t e dC h ie 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 . I m r a n A z im

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

2 5 2 , 3 2 2 0 0 F i rs t H a b i b I s la m ic B a l a n c e d F u n d 2 5 , 3 5 8 0 0A v e r a g e c o s t p e r u n i t: R s . 9 9 . 0 8N e t A s s e t V a l u e : R s . 1 0 0 . 5 0M a n a g e m e n t C o m p a n y : H a b ib A s s e t M a n a g e m e n t L im i t e dC h ie 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 . I m r a n A z im

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

11.12 Associates

2 0 1 2 2 011 Na me o f co mp a n ie s Note 2 0 1 2 2011

N o . o f o r d i n a r y s h a r e s / u n i t s (Rupees in '0 0 0 )


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128

11.12.1 Due to common directorship in Habib Sugar Mills Limited, the Group considers the investee company as an associate.

11.12.2 Includes Rs. 24.750 (2011: Rs. 24.750) million invested in Habib Asset Management Limited classified as strategic

investment in accordance with SBPs guidelines contained in BPD Circular Letter No. 16 of 2006 dated 01 August

2006.

11.12.3 This includes investment in seed capital aggregating to Rs. 50 million which is required to be held for a period of

two years.

1 1 . 1 4 S u m m a ry o f a u d ite d fi n a n c ia l i n fo rm a ti o n o f a s s o c ia te s2 0 1 2

N a m e o f a s s o c i a t e s B a s e d o n t h e f in a n c i a l A s s e t s L i a b i li ti e s E q u i ty R e v e n u e P r o f its ta te m e n ts fo r th e y e a r e n d e d

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

F ir s t H a b ib C a s h F u n d J u n e 3 0 , 2 0 1 2 2 ,0 3 3 ,8 1 6 6 ,8 6 6 2 ,0 2 6 ,9 5 0 1 5 3 ,7 8 3 1 4 2 ,9 5 4F ir s t H a b ib In c o m e F u n d J u n e 3 0 , 2 0 1 2 1 ,0 3 4 ,5 6 7 1 5 ,4 8 4 1 ,0 1 9 ,0 8 3 1 6 6 ,5 0 2 1 2 7 ,6 4 7F ir s t H a b ib S to c k F u n d J u n e 3 0 , 2 0 1 2 11 4 ,3 5 4 1 ,3 2 2 1 1 3 ,0 3 2 1 0 ,8 7 3 4 ,0 0 1H a b ib A s s e t M a n a g e m e n t L im i te d J u n e 3 0 , 2 0 1 2 1 2 6 ,7 5 5 4 ,4 2 0 1 2 2 ,3 3 5 4 6 ,4 6 7 5 ,8 0 4H a b ib S u g a r M i lls L im i te d S e p te m b e r 3 0 , 2 0 1 2 5 ,2 7 7 ,6 2 9 1 ,2 2 2 ,7 7 8 4 ,0 5 4 ,8 5 1 7 ,2 0 5 ,6 0 1 7 8 1 ,1 5 0F i rs t H a b i b I s la m i c B a la n c e d F u n d A u d i te d a c co u n ts n o t a v a il ab l e

2 0 1 1A s s e ts L ia b i l i t ie s E q u i ty R e v e n u e P r o f i t

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

F ir s t H a b ib C a s h F u n d J u n e 3 0 , 2 0 11 5 7 4 ,4 3 4 4 ,4 4 5 5 6 9 ,9 8 9 2 2 ,4 5 2 1 9 ,5 6 8F ir s t H a b ib In c o m e F u n d J u n e 3 0 , 2 0 11 1 ,2 6 4 ,7 6 5 1 3 ,3 0 2 1 ,2 5 1 ,4 6 3 2 1 7 ,2 2 7 1 6 1 ,9 4 7F ir s t H a b ib S to c k F u n d J u n e 3 0 , 2 0 11 1 2 4 ,5 0 6 1 ,2 0 2 1 2 3 ,3 0 4 2 8 ,9 0 6 2 1 ,0 6 5H a b ib A s s e t M a n a g e m e n t L im i te d J u n e 3 0 , 2 0 11 1 2 0 ,3 2 7 3 ,7 9 6 11 6 ,5 3 1 4 4 ,0 1 1 5 ,0 0 0H a b ib S u g a r M i lls L im i te d S e p te m b e r 3 0 , 2 0 1 1 4 ,0 1 6 ,7 4 7 4 9 8 ,6 5 7 3 ,5 1 8 ,0 9 0 7 ,5 8 7 ,7 8 0 7 5 5 ,0 1 6F i rs t H a b i b I s la m i c B a la n c e d F u n d A u d i te d a c co u n ts n o t a v a il ab l e

2012 2011(Rupees in '000)

11.13 Movement of investments in associates

Opening balance 973,095 916,681Share of profit 140,224 84,546Investment-net 233,090 52,949Dividend received (67,136) (81,081)

Closing balance 1,279,273 973,095


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12. ADVANCES

Loans, cash credits, running finances, etc.In Pakistan 126,981,078 101,962,223Outside Pakistan 8,203,074 4,325,819

135,184,152 106,288,042

Net investment in finance lease / ijarah financingIn Pakistan 12.2 501,124 426,351Outside Pakistan 00 000

501,124 426,351

Ijarah financing under IFAS 2 12.3 & 5.6 307,173 109,668

Murabaha 12.4 3,206,606 2,007,557

Bills discounted and purchased (excluding market treasury bills)

Payable in Pakistan 1,924,843 1,928,992Payable outside Pakistan 12,329,922 9,233,700

14,254,765 11,162,692

Advances - gross 153,453,820 119,994,310Provision against non-performing loans and advances Specific provision 12.5 (3,062,933) (2,998,847) General provision against consumer advances (as per SBP regulations) 12.6.1 (31,059) (32,331) General provision 12.6.2 (2,500,000) (2,100,000)

(5,593,992) (5,131,178)

Advances - net of provisions 147,859,828 114,863,132


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2012 2011(Rupees in '000)

12.1 Particulars of advances - gross

12.1.1 In local currency 126,980,308 98,292,544In foreign currencies 26,473,512 21,701,766

153,453,820 119,994,310

12.1.2 Short term (for upto one year) 126,503,727 99,426,895Long term (for over one year) 26,950,093 20,567,415

153,453,820 119,994,310

130

1 2 . 3 Ija ra h fi n a n c in g u n d e r I FA S 2

2 0 1 1

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 2

C o s t A c c u m u la t e d D e p r e c ia t io 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 R a t e o f

0 1 J a n . A d d i t io n s / 3 1 D e c . 0 1 J a n . C h a r g e / 3 1 D e c . 3 1 D e c . d e p r e c ia t io n

2 0 1 2 (d e le t io n s ) 2 0 1 2 2 0 1 2 ( d e le t io n s ) 2 0 1 2 2 0 1 2 %( R u p e e s i n ' 0 0 0 )

E q u ip m e n t 2 7 2 ,3 8 5 3 2 5 ,3 6 2 4 3 2 ,7 8 7 1 7 8 ,0 0 9 11 2 ,2 7 8 1 4 1 ,8 2 4 2 9 0 ,9 6 3

( 1 6 4 ,9 6 0 ) (1 4 8 ,4 6 3 )

V e h ic le s 2 0 ,3 8 3 7 ,2 2 0 2 7 ,6 0 3 5 ,0 9 1 6 ,3 0 2 11 ,3 9 3 1 6 ,2 1 0

2 9 2 ,7 6 8 3 3 2 ,5 8 2 4 6 0 ,3 9 0 1 8 3 ,1 0 0 11 8 ,5 8 0 1 5 3 ,2 1 7 3 0 7 ,1 7 3 3 3 .3 3

( 1 6 4 ,9 6 0 ) (1 4 8 ,4 6 3 )

1 2 . 2 N e t i n 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

2 0 1 2 2 0 1 1L 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 t e 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 th 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 rs 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 5 , 6 0 6 2 5 8 ,8 0 4 0 4 6 4 ,4 1 0 2 0 0 , 0 9 5 1 9 0 , 1 5 3 0 3 9 0 , 2 4 8

R e s i d u a l v a l u e 2 9 , 4 5 0 8 3 ,9 4 0 0 11 3 ,3 9 0 3 0 , 5

consolidated annual report 2012

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