half yearly report 2013

8/13/2019 Half Yearly Report 2013

1/17

Financial Statements with

Accompanying Information

For the Half Year Ended

30 June 2013


2/17

Board of DirectorsChairman Mr. Mian M. A. ShahidDirectors Mr. Mohammad Azam Cheema

Ms. Shahida BilquisMr. Qamar-uz-ZamanMr. Muhammad Saleem Shaikh

President / Chief Executive Mr. Muhammad Saleem Shaikh

Company Secretary Mr. Rafat Abbas

Chief Financial Officer Mr. Abid Saghir Farooqui

Audit Committee of the BoardChairman Mr. Qamar-uz-ZamanMembers Ms. Shahida BilquisSecretary Internal Auditor

Human Resource & Remuneration Committee of the BoardChairman Mr. Mian M. A. ShahidMembers Mr. Mohammad Azam CheemaMember/ Secretary Country Head HR

Auditors Riaz Ahmad & Co.Chartered Accountants

Tax/ Legal Advisor Ernst & Young Ford Rhodes Sidat HyderAgha Law Associates

Bankers Bank Al-Falah Ltd

KASB Bank LtdOman International Bank S.A.O.G.Silk Bank LtdSummit Bank LtdTameer Microfinance Bank Ltd

Registered & Head Off ice K-4/3 & 4/4 Ch. Khal iq-uz- Zaman Road,Gizri Karachi.

PABX Tel: +92 21 35865352-55Fax: +92 21 35865017Website: www.apnabank.com.pk

Share Registrar Technology Trade (Pvt.) Ltd.Dagia House,241-C, Block-2, P.E.C.H.S.Off. Shahrah-e-Quaideen, Karachi.Phone 021-34391316 - 17Fax 021-34391318

BranchesModel Branch Gizri Tel: 021-35865021-24Shahrah-e-Faisal, Branch Tel: 021-34324656-59I.I Chundrigar Branch Tel: 021-32623667-68-69-70Bhens Colony Branch Tel: 021-35081281-82-85.Napier Road Branch Tel: 021-32527041-44Korangi Industrial Area Branch Tel: 021-35013400-02Liaquat Market, Malir Branch Tel: 021-34113781-83Mehamoodabad Branch Tel: 021-35319240-41-42Shah Faisal Colony Branch Tel: 021-34601749-50North Karachi Branch Tel: 021-36961067-68-71Orangi Town Branch Tel: 021-36652095-103

1

Corporate Information


3/17

Directors ReviewOn behalf of the Board of Directors, I am pleased to present the un- audited Financial Statements of the Bankfor the half year ended June 30, 2013.

Opera t iona l and F inanc ia l Rev iew

The Bank posted a loss before taxes of PKR 28.688 mil l ion dur ing the half year ended June 30, 2013 as com paredto a loss of PKR 19.591 mil l ion in the corresponding per iod last year. The equity (net of losses) of the Ban k stoodat PKR.383.733 mil l ion and total assets grew to PKR 956.131 mil l ion from PKR.800.380 mil l ion as at December31st, 2012. The loss per share for the half year ended June 30, 2013 is PKR (0.98) in compar ison to Half yearended June 30 , 2012 : PKR . (0 .66 ).

As pe r B an k' s pl an to in cr ea se ad va nc es du rin g th e ye ar 20 13 an d as ex pe ct ed , th e ad va nc es po rtf ol io ha sshown a hea l thy g rowth and has inc reased to PKR 226 .530 m i l li on in compar ison to December 31 , 2012 o f PKR125 .859 m i l li on . T he Bank 's depos i t s have inc reased to PKR .552 .248 m i l li on in compar ison to December 31st, 2012 of PKR.468.025 mil l ion. The bank's l iquid ity prof i le remains strong at PKR 606.789 mil l ion in l iquidassets which is approximately 63.47% of our total assets.

Mark-up /returns on advances, investments and placements was PK R 59.073 mil l ion as compared to PKR.13.255mi l l ion in the co r respond ing pe r iod las t yea r June 30 th , 20 12 , whe reas mark -up / re tu rn / in te res t expensed o ndeposits stood at PKR 23.401 mil l ion as compar ison to PKR 1.569 mil l ion in the corresponding per iod last yearJune 30 th , 2012 .

The Bank focused on reducing the cost of deposits and is now relying on low cost deposits. Dur ing the half yearended June 30 th , 2013 managem en t focused on the g rowing bus iness vo lume and qua l i t y and ach ieved thedesired results. Focus was also acco rded on the support funct ions to achieve ef f ic iencies and improve cus tomerservice.

The Bank has con t inued to focus upgrading the core banking appl icat ion in order to enhance the compet i t ivenessof the Bank to reach standard level of operat ions.

Future Out look

T he bank has opened s ix more b ranches in Ka rach i loca ted in un -se rved , lower m idd le c lass segmen t o f t hesociety. Al l the branches have been successful ly completed and are fu l ly operat ional which have increased i tsou t r each in the M ic ro finance sec to r . T he expans ion in ne twork i s r e f lec ted in the w iden ing and deepen ing o f

Ap na Ba nk s' ac co un t ba se , w he re de po si ts , ad va nc es an d nu m be r of cu st om er s ha ve sh ow n a re m ar ka bl einc rease . T he expans ion in b ranches has resu l ted in awareness abou t Apna M ic ro f inance Bank , and now theBank i s we l l known in the commun i t y and sec to r .

As a re su lt of ha rd wo rk an d de di ca tio n sh ow n by th e m an ag em en t, th e St at e Ba nk of Pa ki st an ha s ap pr ov eda grant of PKR 36.081 m il l ion under Inst i tut ional Strengthening Fund ( IFS) for Advancem ent of Banking Softwareand Human Resource Development. The agreement for the same has been signed on Apr i l 15'h, 2013. The f irst

t rench of PKR.9.020 mil l ion has been disbursed by SBP on 6th August 2013 for advanceme nt of banking software.

Dur ing the year under review the bank has setup i ts ATM faci l i ty, and completed al l formali t ies f rom obtain ingIssuer Ident i f icat ion Num ber t i l l installat ion of ATM Mac hines. Al l the necessary test ing by One L ink for encrypt ionand da ta connec t i v i t y has been tes ted and con f i rmed . F ina l ly t he AT M ope ra t ion has s ta r ted f r om March 13 th ,2013 and success fu l l y go ing on , t he AT M fac i l i t y i s ava i lab le fo r i ts emp loyees and cus tomers . T he AT M isconnec ted w i th member banks o f 1 -L ink and MNE T .

Cred i t Rat ing

The Pakistan Credit Rat ing Agency (Pvt) Ltd. has maintained the long term and short term rat ings for the Bankto "BBB" ( T r ip le B) a nd "A3" (A T h ree ) r espec t ive ly , w i th , a "Pos i t ive fu tu re Ou t look" . T he ra t ings deno te anadequate capacity for t imely payment of f inancial commitments.

Mat ter o f Emphas isReference to the note 1.2 of the condensed f inancial informat ion for minimum capita l requirement, the SBP hasadv ised the bank to subm i t a cap i ta l enhancemen t p lan fo r mee t ing the regu la to ry cap i ta l r equ i remen t wh ichthe managemen t in tends to do so in due cou rse . However , t he sponso rs have depos i ted PKR 153 m i l li on andan inves to r has depos i ted PKR 100 m i l l i on in sha re depos i t money aga ins t wh ich r igh t sha res w i l l be i ssued .The r ight share procedures w i l l be completed in due course of t ime. Further , we are hope ful to meet the minimumcapita l requirement of provincia l level by December 2013 and at Nat ional level by December 2014.

AcknowledgementWe would l ike to take th is opportunity to thank our valued cl ients, shareholders and other stakeholders for their

pa t ronage and con f idence and ou r managemen t and emp loyees fo r t he i r ded ica t ion and ha rd work .We wou ld a lso l i ke to exp ress ou r g ra t i t ude to the Sta te Bank o f Pak is tan , t he Secu r i t i es and ExchangeCommiss ion o f Pak is tan and the Ka rach i Stock Exchange fo r t he i r con t inued gu idance and suppo r t .

2

Karach i : Sep tember 7 th , 2013 On beh a l f o f the Board

Muhammad Sa leem Sha ikh

Pres ident and CEO


4/17

3

A U D I TO R S R E P O R T T O T H E M E M B E R S O N R E V I E W O F

C O N D E N S E D I N T E R I M F I N A N C I A L IN F O R M A T IO NIntroduction

We have rev iewed the accompany ing condensed in te r im ba lance shee t o f APNA MICROF INANCE BANK

LIMITED ( the Bank) as at 30 June 2013 and the related condensed inter im prof i t and loss account, condensed

in te r im s ta temen t o f comprehens ive income, conde nsed in te r im s ta temen t o f changes in equ i t y , condensed

inter im cash f low statement an d notes to the accou nts for the six-month per iod then ende d (here- in-af ter referred

to as the condensed in te r im f inanc ia l in fo rma t ion ) . Managemen t i s r espons ib le fo r t he p repa ra t ion and

presentat ion of th is condensed inter im f inancial informat ion in accordance with approved account ing standards

as appl icable in Pakistan for inter im f inancial report ing. Our responsibi l i ty is to express a conclusion on th is

condensed in te r im f inanc ia l in fo rma t ion based on ou r r ev iew. T he f igu res o f t he conde nsed in te r im p ro f i t and

loss accoun t and condensed in te r im s ta temen t o f comprehens ive income fo r t he qua r te r s ended 30 June 2013

and 30 June 2012 have no t been rev iewed and w e do no t exp ress a conc lus ion on them as we a re requ i red to

review only the cumulat ive f igures for the six-month per iod ended 30 June 2013.

Scope o f rev iew

We conduc ted ou r r ev iew in acco rdance w i th In te rna t iona l Standa rds on R ev iew Engagem en ts 2410 , Rev iew

o f in te r im F inanc ia l I n fo rma t ion P e r fo rmed by the Independen t Aud i to r o f t he E n t i t y. A rev iew o f condensed

in te r im f inanc ia l in fo rma t ion cons is t s o f m ak ing inqu i r ies , p r imar i ly o f p e rsons respons ib le fo r f i nanc ia l and

account ing m atters, and applying analyt ical and other review proc edures. A review is substant ia l ly less in scope

than an aud i t conduc ted in acco rdance w i th In te rna t iona l Standa rds on Aud i t ing and conseque n t l y does no t

enable us to obtain assurance that we would become aware of a l l s ignif icant matters that might be ident i f ied in

an audit . Accordingly, we do not express an audit opinion.

Conclus ion

Based on ou r r ev iew, no th ing has come to ou r a t ten t ion tha t causes us to be l ieve tha t t he accom pany ing

condensed inter im f inancial informat ion as of and for the six-month per iod ended 30 June 2013 is not prepared,

in al l mater ia l respects, in accordance with approved account ing standards as appl icable in Pakistan for inter im

f inancial report ing.

Emphas is o f Mat te r

As m or e fu lly ex pl ain ed in N ote 1.2 to th e co nd en se d int er im fin an cia l i nf or m at io n, as at th e re po rti ng da te , t he

Bank does no t comply with the minimum ca pita l requirement of Rupe es 250 mil l ion set by Prudent ia l Regulat ions

fo r M ic ro finance Banks i ssued by S ta te Bank o f Pak is tan . However , due to r ece ip t o f sha re depos i t money o f

Rupees 25 3 m i l l i on , t ha t w i l l be conve r ted to pa id -up cap i ta l t h rough p roposed r igh t i ssue , and o the r p lans

ment ioned in the aforesaid note, the management is conf ident to meet the minimum capita l requirement for i ts

planned level of operat ions in the foreseeable future.

Our opinion is no t qual i f ied in respect of th is matter .

R i a z A h m a d & C o m p a n y

Char te red Accoun tan ts

Name o f the engagem ent partner:

Muhammad Kamran Nas i r

Da te : Sep tember 7 th , 2013

Karach i


5/17

A S S E T S

Cash and ba lances w i th SBP 5

Ba lances w i th o the r banks / MF Bs 6

Lending to f inancial inst i tut ions

Inves tmen t 7

Ad va nc es -n et of pr ov is ion s 8

Operat ing f ixed assets

Other assets

Deferred tax assets

Total assets

L IABIL IT IES

Deposits and other accounts 9

Bor rowings

Subord ina ted deb t

Other l iabi l i t ies

Deferred tax l iabi l i t ies

Total l iabil i t ies

N E T A S S E T S

R E P R E S E N T E D B Y :

Share capita l

Statutory reserves

Ac cu m ul at ed lo ss es

Surplus/(def ic i t ) on revaluat ion of investments

Deferred grants

Share depos i t money

Total capital

M E M O R A N D U M / O F F B A L A N C E S H E E T I T E M S 10

A P N A M I C R O F I N A N C E B A N K L I M IT E DC O N D E N S E D I N T E R I M B A L A N C E S H E E T

AS AT JUNE 30 , 2013

N ot e J un e 3 0, D ec em b er 3 1,2013 2012

-- - - - - -- - - Rupe es -- - - - - -- - -(U n-a ud ited ) (A ud ite d)

4

84 ,192 ,405

236 ,852 ,556

-

285 ,743 ,819

217 ,203 ,993

74 ,838 ,465

57 ,299 ,322

-

956 ,130 ,560

552,248,411

-

-

16 ,406 ,308

-

568 ,654 ,719

387 ,475 ,841

300 ,000 ,000

50,011

(169,307,640)

130 ,742 ,371

3 ,733 ,470

-

253 ,000 ,000

387 ,475 ,841

The annexed notes 1 to 18 form an integral par t of these condensed inter im f inancial statements.

46 ,166 ,761

395 ,535 ,805

-

154 ,951 ,281

121 ,788 ,004

56 ,755 ,305

25 ,183 ,210

-

800 ,380 ,366

468 ,024 ,864

-

-

19 ,353 ,370

-

487 ,378 ,234

313 ,002 ,132

300 ,000 ,000

50,011

(139,997,003)

160 ,053 ,008

(50,876)

-

153 ,000 ,000

313 ,002 ,132

Qamar-uz-Zaman

Director

Shahida Bilquis

Director

Mian M. A. Shahid

Chairman

Muhammad Saleem Shaikh

President/Chief Executive


6/17

5

A P N A M I C R O F I N A N C E B A N K L I M IT E DC O N D E N S E D I N T E R IM P R O F I T A N D L O S S A C C O U N T ( U N - A U D I T E D )

F O R T H E Q U A R T E R A N D H A L F Y E A R E N D E D J U N E 3 0 , 20 1 3

N ote 2013 2012 2013 2012 ------------------------------ Ru pee s ------------------------------

H a lf y ea r en d ed 3 0 Ju n e Q u a rt er e n de d 3 0 J u ne

M ark-up /re tu rn/in te res t earned 11Mark-up/return/ interest expensedNet mark-up/ interest income

Provision against non-performing loans and a dvances 8 .2Provision for d iminut ion in the value of investmentsRecovery against wr i t ten of f advancesBad de bts wr i t ten of f d irect ly

Net mark-up/ interest income after provisions

Non m ark -up /non in te res t incomeF ee , commiss ion and b roke rage incomeOthe r incomeTotal non-mark-up/non interest income

Non m ark -up /non in te res t expenses

Ad m in ist ra tiv e e xp en se sOther provisions/wr i te of fsOthe r cha rges

Total non mark-up/non interest expenses

Extra ordinary/unusual i temsLoss before taxation

Taxa tion - C u rren t 12Pr ior yearDeferred

Loss after taxation

Accumula ted losses b rought fo rwardAccumula ted losses carr ied fo rward

Loss per share - bas ic and d i lu ted 13

The annexed notes 1 to 18 form an integral par t of these condensed inter im f inancial informat ion.

59,072,927 (23,401,495)

35,671,432

(6,317,258)

-450 ,308

- (5,866,950) 29,804,482

2,129,903 1,026,050 3,155,953

32,960,435

(60,766,039)-

( 882 ,744 )

(61,648,783) (28,688,348)

- (28,688,348)

( 622 ,289 )--

(29,310,637)

(139,997,003) (169,307,640)

(0.98)

13 ,255 ,959 (1,569,034)11,686,925

(175,338)

-1 ,998 ,890

-1 ,823 ,552

13 ,510 ,477

337 ,13841 ,050

378 ,18813 ,888 ,665

(33,479,987)--

(33,479,987) (19,591,322)

- (19,591,322)

(132,560)--

(19,723,882)

(94,244,880) (113,968,762)

(0.66)

32,826,757 (12,679,371)

20,147,386

(4,478,452)

-240 ,440

- (4,238,012) 15,909,374

1 ,149 ,699662 ,131

1,811,830 17,721,204

(32,801,842)-

( 882 ,744 )

(33,684,586) (15,963,382)

- (15,963,382)

( 372 ,435 )--

(16,335,817)

( 152 ,971 ,823 )( 169 ,307 ,640 )

(0.54)

7 ,270 ,064 (1,492,068)

5 ,777 ,996

18 ,016

-1 ,018 ,438

-1 ,036 ,4546 ,814 ,450

337 ,13827 ,958

365 ,0967 ,179 ,546

(20,035,632)--

(20,035,632) (12,856,086)

- (12,856,086)

(72,701)--

(12,928,787)

(101,039,975) (113,968,762)

(0.43)

Qamar-uz-Zaman

Director

Shahida Bilquis

Director

Mian M. A. Shahid

Chairman




7/17

6

A P N A M I C R O F I N A N C E B A N K L I M IT E DC O N D E N S E D I N T E R IM S T A T E M E N T O F C O M P R E H E N S I V E I N C O M E ( U N - A U D IT E D )

F O R T H E H A L F Y E A R E N D E D J U N E 3 0 , 2 0 1 3

Loss a fte r taxa tio n (29 ,310 ,637 ) (19,732,882) (16,335,817) (12,928,787)

Other comprehens ive income

I tems that wi l l not be reclassif ied to prof i to r loss - - - -

I tems that may be subsequent ly reclassif ied

to p ro fit o r loss - - - -

T ot al c o m p re h en s iv e l os s f or t h e p er io d ( 29 ,3 1 0, 63 7 ) (19,732,882) (16,335,817) (12,928,787)

The annexed notes 1 to 18 form an integral par t of these condensed inter im f inancial informat ion.

2013 2012 2013 2012 ------------------------------ Rup ees ------------------------------

H a lf y ea r en d ed 3 0 Ju n e Q u a rt er e nd e d 30 J u ne

Qamar-uz-Zaman

Director

Shahida Bilquis

Director

Mian M. A. Shahid

Chairman




8/17

C A S H F L O W F R O M O P E R A T IN G A C T I V I T IE S

(Loss) before taxat ion

Adjustments fo r non -cash i t ems

Depreciat ion

Am or tiz at io n

Provision against non-performing advances

Am or tiz at io n of pr em iu m on go ve rn m en t s ec ur itie s

Gain on sale of f ixed assets

Increase in opera t ing assets

Ad va nc es

Other assets

(Decrease) / increase in operating l iabil i t ies

Deposits

Other l iabi l i t ies

Income tax pa id

Net cash inf low from / used in operating activit ies

C A S H F L O W F R O M I N V E S T I N G A C T I V I T IE S

Net investments in avai lable for sale secur i t ies

Net investments in held for t rading secur i t ies

Net investments in held to matur i ty secur i t ies

Investments in operat ing f ixed assets

Investments in intangible assets

Sale proceeds from disposal of operat ing f ixed assets

Net cash used in investing activit ies

C A S H F L O W F R O M F I N A N C I N G A C T I V I T IE S

Share depos i t money

Net cash f low from f inancing activit ies

(Decrease) / increase in cash and cash equ iva len ts fo r the per iod

Cash and cash equ iva len ts a t the beg inn ing o f the per iod

Cash and cash equ iva len ts a t the end o f the per iod

June 30, June 30 ,2013 2012

-- - - - - -- - - Rupe es -- - - - - -- - -( Un -a ud it ed ) ( Un -a ud it ed )

A P N A M I C R O F I N A N C E B A N K L I M IT E DC O N D E N S E D I N T E R IM C A S H F L O W S T A T E M E N T ( U N -A U D I T E D )

F O R T H E H A L F Y E A R E N D E D J U N E 3 0 , 2 0 13

7

The annexed notes form an integral par t of these condensed inter im f inancial statements.

(28,688,348)

3,316,470

1,384,736

6,317,258

882 ,744

(578 ,003 )

11,323,205

(17,365,143)

( 101 ,733 ,247 )

(32,116,112)

( 133 ,849 ,359 )

84,223,547

(2,947,062)

81,276,485

(69,938,017)

( 622 ,289 )

(70,560,306)

( 142 ,844 ,373 )

9,812,500

-

(17,493,140)

(7,113,440)

2,400,217

(155 ,238 ,236 )

100 ,000 ,000

100 ,000 ,000

(125 ,798 ,542 )

446 ,843 ,503

321 ,044 ,961

(19,591,322)

1,156,822

298,115

175 ,338

-

(13,225)

1,617,050

(17,974,272)

(25,309,239)

(7,906,900)

(33,216,139)

119,312,262

831 ,979

120 ,144 ,241

68,953,830

(103 ,574 )

68,850,256

-

-

(12,500,365)

(5,599,642)

(5,592,992)

22,000

(23,670,999)

-

-

45,179,257

5,157,939

50,337,196

Qamar-uz-Zaman

Director

Shahida Bilquis

Director

Mian M. A. Shahid

Chairman




9/17

8

A P N A M I C R O F I N A N C E B A N K L I M IT E DC O N D E N S E D I N T E R IM S T A T E M E N T O F C H A N G E S I N E Q U I T Y ( U N -A U D I T E D )


S hare S ta tu to ry A ccum ula ted Tota lcap ita l R eserve L osses

------------------------------ Rup ees ------------------------------

Ba lance as a t 31 December 2011 300 ,000 ,000 50 ,011 (94 ,244 ,880 ) 205 ,805 ,131

Comprehens ive loss fo r the per iod

Loss a fter taxa tion - - (19,723 ,882 ) (19 ,723 ,882 )

O the r com prehens ive incom e - - - -

To ta l c om pre he ns iv e lo ss fo r th e p erio d - - ( 19 ,7 23 ,8 82 ) (1 9,7 23 ,8 82 )

Balance as a t 30 June 2012 3 00 ,0 00 ,0 00 5 0,0 11 (11 3,96 8,7 62 ) 1 86 ,0 81 ,2 49

B a lance as a t 31 D ecem ber 2012 300 ,000 ,000 50 ,011 (139 ,997 ,003 ) 160 ,053 ,008

Comprehens ive loss fo r the per iod

Loss a fter taxa tion - - (29 ,310 ,637 ) (29 ,310 ,637 )

O the r C om prehens ive Incom e - - - -

To ta l c om pre he ns iv e lo ss fo r th e p erio d - - (2 9,3 10 ,6 37 ) (2 9,3 10 ,6 37 )

Balance as a t 30 June 2013 30 0,0 00 ,0 00 5 0,0 11 (1 69 ,3 07 ,64 0) 1 30 ,7 42 ,3 71

The annexed notes 1 to 18 form an integral par t of th is condensed inter im f inancial informat ion.

Qamar-uz-Zaman

Director

Shahida Bilquis

Director

Mian M. A. Shahid

Chairman




10/17

A P N A M I C R O F I N A N C E B A N K L I M IT E DN O T E S O F T H E C O N D E N S E D I N T E R I M F I N A N C I A L S T AT E M E N T S ( U N - A U D I T E D )


9

1 . S TA TU S A N D N AT U RE O F B U S IN E S S

1. 1 Ap na M icr of ina nc e B an k L im ite d ( th e B an k ) w as inc orp ora ted on 08 Ma y 2 00 3 a s a pu bli c l im ite d c om pa nyunder the Compan ies O rd inance , 1984 . T he Bank w as g ran ted a ce r t i f ica te o f commencem en t o f bus inesson 28 December 2004. I ts operat ions star ted from 01 January 2005. I ts shares are l isted on Karachi StockExchange. The Banks pr incipal business is to provide microf inance services to the poor and underservedsegment of the society as envisaged under the Microf inance Inst i tut ions Ordinance, 2001. The Ban k operates11 b ranches as a t 30 Jun e 2013 (30 June 2012 : 5 b ranches) and i s l i censed to ope ra te on d is t r i c t l eve l.I ts registered of f ice is si tuated at K-4/3 and 4/4, Ch. Khal iq-uz-Zaman Road, Gizr i , Karachi.

1. 2 Pruden t ia l Regu la tions fo r M ic ro f inance Banks (MF Bs) p resc r ibe the M in imum Cap i ta l Requ i remen ts . T heRegulat ion 4 interal ia requires that a l l MFBs which are l icensed to operate in a specif ied distr ict have toma in ta in m in imum pa id up cap i ta l o f a t leas t Rupees 300 m i l l i on f ree o f losses . Where M F Bs do no t mee tthe aforesaid minimum p aid up capita l requirement, they were advised to enhanc e their Capita l dur ing threeyea rs f rom the yea r ended 31 Decem ber 2011 to the yea r end ing 31 December 2013 . As a t 30 June 2013 ,m in imum cap i ta l r equ i remen t fo r t he Bank was Rupees 250 m i l l ion . However , t he Bank s cap i ta l ( f r ee o f losses) s tood a t Rupees 130 .742 m i l l ion as a t 30 June 2013 . T he ex tens ion ob ta ined f rom Sta te Bank o f Pak is tan (SBP) v ide le t te r No . BSD /BAID/608 / 6180 /2012 da ted 18 M ay 2012 to m ee t the m in imum cap i ta lrequirement up to 31 December 2012 has expired. In pursuit of meet ing the minimum capita l requirement,the sponso r d i r ec to rs o f t he Bank have depos i ted an amoun t o f R upees 153 m i l li on w i th the Bank on 21December 2012 as S ha re Depos i t Money tha t was a lso in fo rmed to SBP by the m anagemen t v ide le t te r No . AMBL/CEO /OSED/646 /12 da ted 21 D ecember 2012 . Du r ing the pe r iod , t he Bank has rece ived fu r the r Share Deposit Money of Rupees 100 m il l ion from an investor . The Bank, vide i ts let ter No. SBP/AM BL/CS/928-13 dated 26 August 2013, has communicated i ts intent ion to SBP to phase-wise raise the equity and atta inp rov inc ia l leve l bank s s ta tus by Decem ber 2013 , and na t iona l leve l bank s s ta tus by December 2014 .

Ac co rd in gl y, th e sh ar e de po si t m on ey ag gr eg at in g to R up ee s 25 3 m ill io n w ill be co nv er te d in to pa id -u pshare capita l upon complet ion of required formali t ies. The management is a lso proact ively negot iat ing withce r ta in o the r po ten t ia l i nves to rs fo r f u r the r equ i t y in jec t ion . T he m anageme n t , d i r ec to r s and sponso r shareholders of the Bank are conf ident that the short fa l l against minimum capita l requirement is temporaryand in v iew o f managemen t s p lan fo r expans ion o f bank ing ope ra t ions to na t iona l leve l, t he Bank w i l l bein compliance with the minimum capita l requirement and earning prof i ts in the foreseeable future.

2 . B A S IS O F P R E PA R AT IO N

2 . 1 S t a te m e n t o f c o m p l ia n c e

This condensed inter im f inancial report of the Bank for the half year ended 30 June 2013 has been p reparedin acco rdance w i th the requ i remen ts o f t he In te rna t iona l Accoun t ing Standa rd 34 I n te r im F inanc ia lRepor t ing , p rov is ions o f t he Compan ies Ord inance , 1984 , the M ic ro f inance Ins t i t u t ion O rd inance , 2001 ,the Prudent ia l Regulat ions for Microf inance Banks/Inst i tut ions and the direct ives issued by the Secur i t iesand Exchange Com miss ion o f Pak is tan (SECP) and the S ta te Bank o f Pak is tan (SBP) . In case where therequirements dif fer , the provisions of Companies Ordinance, 1984, the Microf inance Inst i tut ion Ordinance2001, the Pruden t ia l Regulat ions of Microf inance Banks /Inst i tut ions or the requirements of the said direct iveshave been fo l lowed .

SBP has deferred the appl icabi l i ty of Internat ional Account ing Standards ( IAS) 39 F inancial InstrumentsRecongn i t ion and Mea su remen t and In te rna t iona l Accoun ting Standa rds ( IAS) 40 I nves tmen t Prope r t y f o r Bank ing Compan ies th rough B SD Ci r cu la r No . 10 da ted 26 Augus t 2002 . F u r the r, t he Secu r i t i es andExchange C ommiss ion o f Pak is tan (SEC P) has de fe r red app l i cab i l it y o f IF RS-7 F inanc ia l I ns t r umen ts :Disclosures through i ts not i f icat ion S.R.O 411(1) / 2008 dated 28 Apr i l 2008. Accordingly, the requirmentsof these standards have n ot been considered in the p reparat ion of th is condensed inter im f inancial informat ion.

2 . 2 B a s i s of P r e s en t a ti o n

This condensed inter im f inancial informat ion is prepared in accordance with BSD Circular No. 11 dated 30December 2003 i ssued by the Sta te Bank o f Pak is tan (SBP) and IAS 34 I n te rim F inanc ia l Repor t ing and hence do not include al l the informat ion required in the annual f inancial statements. Accordingly, th iscondensed inter im f inancial informat ion should be read in conjunct ion with the annual f inancial statementso f t he Bank fo r t he yea r ended 31 D ecember 2012 . T h is con densed in te r im f inanc ia l in fo rma t ion i s un -audited but subject to l imited scope review by the statutory auditors.

This condensed inter im f inancial informat ion is presented in Pak Rupees, wh ich is the Company's funct ionaland presentat ion currency.


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10

3 . C R I TI C A L A C C O U N T IN G E S T IM A TE S A N D J U D GM E N T S

T he p repa ra t ion o f t h is unconso l ida ted conden sed in te r im f inanc ia l in fo rma t ion in con fo rm i t y w i th theapproved account ing standards requires the use of cer ta in cr i t ical account ing est imates. I t a lso requiresthe managem ent to exercise i ts judgment in the process of applying the Ban ks account ing pol ic ies. Est imatesand judgme nts are cont inual ly evaluated and are based on histor ical exper ience and other factors, includingexpectat ions of future events that are bel ieved to be reasonable under the circumstances.

Dur ing preparat ion of th is condensed inter im f inancial informat ion, the signif icant judgments made by themanagement in applying the Banks account ing pol ic ies and the key sources of est imat ion and uncertaintywere the same as those that appl ied in the preceding audited annual publ ished f inancial statements of theBank fo r t he yea r ended 31 Decem ber 2012 .

4 . A C C OU N TI NG P O LI CI ES

The account ing pol ic ies and the methods of computat ion adopted in preparat ion of th is condensed inter imf inancial informat ion are the same as those appl ied in the preparat ion of the annual f inancial statementsfo r t he yea r ended 31 December 2012 .


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11

5 . C A S H A N D BA L AN C E W I TH S BP

N ote June 30 , D ecem ber 31 ,2013 2012

-- - - - - -- - - Rupee s -- - - - - -- - -(U n-a ud ite d) (A ud ite d)

Cash in hand loca l cu r rency 26 ,954 ,957 13 ,844 ,703

Ba lance w i th Sta te Bank o f Pak is tan 5 .1 57 ,237 ,448 32 ,322 ,058

84 ,192 ,405 46 ,166 ,761

5. 1 Represents balance m aintained in current account with the State Bank of Pakistan to meet the requirementsof maintain ing a minimum balance equivalent to 5% of the Banks t ime and demand l iabi l i t ies in accordancewith Regulat ion 6 of the Prudent ia l Regulat ions.

6 . B A L A N C E S W I T H O T H E R B A N K S / M F B sIn Pakistan- on current account 4 ,484 4 ,484- on deposit accoun t 6 .1 108 ,848 ,072 95 ,831 ,321- on fixed depos it accoun t 6 .2 128 ,000 ,000 299 ,700 .000

236 ,852 ,556 395 ,535 ,805

6. 1 T hese ca r r y mark -up ra tes rang ing f rom 7 .50% to 9% pe r annum (31 Decem ber 2012 : 8% to 10%) pe r annum.

6. 2 T hese ca r r y mark -up ra te r ang ing f r om 7 .50% to 10 .50% pe r annum (31 December 2012 : 11 .50% pe r annum). These are placed for a per iod of one month on rol l over basis.

7 . IN V ES TM E NTHeld-for-tradingTerm Finance Cert i f icates 7 .1 68 ,687 ,500 78 ,500 ,000

Held-to-maturityF edera l Gove rnmen t Secu r i ti es

- Market Treasury Bi l ls - 5 ,140 ,937

Available-for-saleF edera l Gove rnmen t Secu r i ti es - Pak is tan Inves tmen t Bonds (PIBs) 7. 2 2 13 ,3 22 ,8 49 7 1,3 61 ,2 20 - S u rp lus /(de fic it) on rem easu rem en t at fa ir va lue 3 ,733 ,470 (50 ,876 )

2 17 ,0 56 ,3 19 7 1,3 10 ,3 442 85 ,7 43 ,8 19 1 54 ,9 51 ,2 81

7. 1 These represent Term f inance cer t i f icates of Jahangir Siddiqui Company Limited. These carry mark-up atthe ra te o f 6 Mon ths KIBOR + 2 .4% pe r annum.

7. 2 These represent PIBs issued for a per iod of three to f ive years having matur i ty dates from 19 July 2015 to22 July 2015. These carry interest ranging from 11.25% to 11.50% per annum (31 December 2012: 11.25%per annum) .

8 . A D V A N CE S - N E T OF P R O VI S IO N S

Ju ne 30 , 2013 D ecem ber 31 , 2012

N o . o f Loans N o . o f Loans

O uts tand ing R u pees O uts tand ing R upees

(U n-aud ited ) (A ud ited )

Micro credit 5 ,8 51 2 26 ,5 29,7 65 3,0 64 1 25 ,8 58 ,6 87

Provision held:

- Specif ic 7,248,380 2 ,914 ,337

- Genera l 2,077,392 1 ,156 ,346

9,325,772 4 ,070 ,683

Ad va nc es ne t o f p ro vis ion 5 ,8 51 2 17 ,2 03,9 93 3,0 64 1 21 ,7 88 ,0 04


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8 .1 Part icu la rs o f non -perfo rming advances

Ad va nc es in clu de R up ee s 46 ,9 45 ,5 28 (3 1 De ce m be r 2 01 2: R up ee s 15 ,5 54 ,98 3) w hic h ha ve be en pl ac ed

under non performing status as detai led below:

June 30 , 2013 D ecem ber 31 , 2012

A m ou nt P ro vis io n P ro vis io n A m ou nt P ro vis io n P ro vis io n

O u ts tand ing R equ ired H eld O uts tand ing R eq u ired H eld

C a t e g or y o f c l a ss i fi c a ti o n - -- -- - -- -- -- - -- -- -- -- - -- -- -- - - R u p e e s - -- - -- -- -- -- - -- -- -- - -- -- -- -- - -

- -- -- -- -- - (U n -a u di te d ) -- -- -- -- -- - -- -- -- -- - (A u d it ed ) - -- -- -- -- -

O A E M 28,889 ,290 - - 7,856 ,113 - -

S ub -s tanda rd 8 ,889 ,361 2 ,222 ,340 2,222 ,340 4 ,236 ,005 1 ,059 ,001 1,059 ,001

D oub tfu l 8 ,281 ,675 4 ,140 ,838 4,140 ,838 3 ,215 ,059 1 ,607 ,530 1,607 ,530

Loss 885 ,202 885 ,202 885 ,202 247 ,806 247 ,806 247 ,806

4 6 , 94 5 , 52 8 7 , 2 48 , 3 80 7 , 24 8 , 38 0 1 5 , 55 4 , 98 3 2 , 9 1 4 ,3 3 7 2 , 91 4 , 33 7

8 .2 Part icu la rs o f p rov is ions aga ins t non -perfo rming advances

June 30 , 2013 D ecem b er 31 , 2012

S pec ific G enera l To ta l S pecif ic G enera l To ta l

C a t e g or y o f c l a ss i fi c a ti o n - -- -- - -- -- -- - -- -- -- -- - -- -- -- - - R u p e e s - -- - -- -- -- -- - -- -- -- - -- -- -- -- - -

- -- -- -- -- - (U n -a u di te d ) -- -- -- -- -- - -- -- -- -- - (A u d it ed ) - -- -- -- -- -

O pe nin g b ala nce 2 ,9 14 ,3 37 1 ,1 56 ,3 46 4,0 70 ,6 83 2 ,0 21 ,70 1 2 9,4 56 2,0 51 ,1 57

C ha rg e fo r th e pe rio d 5 ,3 96 ,2 12 9 21 ,0 46 6,3 17 ,2 58 2 ,8 78 ,83 6 1 ,1 26 ,8 90 4,0 05 ,7 26

Am ou nt w rit te n o ff (1 ,0 62 ,1 69 ) - (1 ,0 62 ,1 69 ) (1 ,9 86 ,2 00 ) - (1 ,9 86 ,2 00 )

7 , 2 48 , 3 80 2 , 0 77 , 3 92 9 , 3 25 , 7 72 2 , 9 14 , 33 7 1 , 1 5 6 ,3 4 6 4 , 07 0 , 68 3

J un e 3 0, 2 01 3 D e c 3 1, 2 01 2 -- - - - - -- - - Rupee s -- - - - - -- - -

8 .3 Part icu la rs o f wri te o f fs :

A ga in st pr ov is ion 1 ,062 ,169 1 ,986 ,200

9 . D E P OS IT S A N D O TH E R A C CO U N TS

June 30 , 2013 D ecem ber 31 , 2012

N um ber R u pees N um ber R upees

Fixed deposits 8 69 2 89 ,9 97 ,98 7 3 75 11 3,8 27 ,0 00

Sav ing depos i t s 3 ,5 34 1 23 ,8 01,0 46 2 ,9 93 1 94 ,1 60 ,6 59

Current deposits 2 2,9 63 1 38 ,4 49,3 78 1 8,6 31 1 60 ,0 37 ,2 05

2 7,3 66 5 52 ,2 48,4 11 2 1,9 99 4 68 ,0 24 ,8 64

9 .1 Part icu la rs o f depos its by ownersh ip

Jun e 30 , 2013 D ecem ber 31 , 2012

N um ber R u pees N um ber R upees

Individual depositors 2 7,3 04 5 29 ,2 90,6 40 2 1,9 12 4 44 ,4 11 ,7 48

Inst i tut ional depositors - - - -

- Corporat ion / f i rm 54 10 ,701 ,647 83 8 ,033 ,202

- Banks and f inancial inst i tut ions 8 12 ,256 ,125 4 15 ,579 ,915

2 7,3 66 5 52 ,2 48,4 12 2 1,9 99 4 68 ,0 24 ,8 65

9. 2 Includes deposits f rom related part ies amount ing to Rupees 500,262 (31 December 2012: Rupees 785,900).

12


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H alf y ea r e nd ed 30 Ju ne Q ua rte r e nd ed 30 Ju ne

30 June 2013 30 June 2012 30 June 2013 30 June 2012

Rupees Rupees Rupees Rupees

11 . M A R K - U P / R E T U R N / IN T E R E S T E A R N E D (Un-audited) (Un-audited) (Un-audited) (Un-audited)

M ark -up on loans and advances 32,605,869 1 ,255 ,330 18,675,216 1 ,007 ,045

Mark-up on investments in

governm ent secur i t ies 11,987,902 11,030,955 6,597,979 5 ,595 ,044

Mark -up on depos i t accoun ts 14 ,479 ,156 969 ,674 7,553,562 667 ,97559 ,072 ,927 13,255,959 32,826,757 7 ,270 ,064

1 2 . T A XA T IO N

12 .1 Curren t t ax

T he tax l i ab i l i ty o f t he B ank fo r t he pe r iod has been ca lcu la ted unde r the no rma l p rov is ions o f t he Income

T ax Ord inance , 2001 upon exp i r y o f pe r iod o f exempt ion f r om tax unde r c lause 66 (XVI I I ) o f pa r t I o f the

second schedu le o f t he Income T ax Ord inance , 2001 ( the Ord inance ) fo r f i ve yea rs s ta r ting f r om 01 day o f

July 2007. In view of the tax loss for the per iod, provision for minimum tax @ 1 % of turnover under sect ion

113 'm in imum tax on income o f ce r ta in pe rsons ' o f t he Income T ax Od inance , 2001 has been made in th is

condensed inter im f inancial informat ion.

12 .2 Deferred tax

Defe r red tax asse t amoun t ing to Rupees 49 ,043 ,706 has no t been accoun ted fo r in th is condensed in te r im

f inancial informat ion. The manage ment expec ts that i t is not probable that taxable prof i ts / taxable temporary

dif ferences would be avai lable in near future against which the deferred tax asset can be ut i l ized.

H alf year ended Q uarte r ended

30 June 2013 30 June 2012 30 June 2013 30 June 2012


13 . Los s pe r s ha r e - ba s i c & d i l u te d (Un-audited) (Un-audited) (Un-audited) (Un-audited)

There is no di lut ive ef fect on the basic loss per share which is based on:

Loss for the per iod (29,310,637) (19,723,882) (16,335,817) (12,928,787)

- - - - - - -- - - - - - -- - - - - - -- - - - - - - (Numb es of Shares) - - - - - - -- - - - - - -- - - - - - -- - - - - - -

We igh ted ave rage number o f sha res 30 ,000 ,000 30,000,000 30,000,000 30 ,000 ,000


Bas ic loss pe r sha re (0.98) (0.66) (0.54) (0.43)

13

1 0 M E M O R A N D U M /O F F B A LA N C E S H E E T I TE M S

There were no cont ingent l iabi l i t ies as at 30 June 2013


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1 4 . T R A N S A C TI O N S W IT H R E L AT E D PA R T IE S

Related part ies of the Bank compr ise group comp anies, staf f ret irement benef i ts, key managem ent presonnel

and major shareholders of the bank. The detai ls of t ransact ions with re lated part ies other than those

disclosed elsewhere in th is condensed inter im f inancial informat ion is as under:

June 30 D ec 312013 2012

-- - - - - -- - - Rupee s -- - - - - -- - -

(U n-aud ited ) (A ud ited )

Ba lances as a t per iod /year end

Assoc ia tes :

Deposits - -

Key managem ent personne l :

Depos i t s 500 ,262 785 ,900

June 30 Ju ne 302013 2012

-- - - - - -- - - Rupee s -- - - - - -- - -( U n- au d it ed ) ( U n- au d it ed )

Transactions for the period

Assoc ia tes :

Depos i ts

Withd rawa ls - -

Mark -up on depos i t pa id - -

Placements

Placemen ts - -

Repaymen ts - -

Mark -up on depos i t s ea rned - -

Other Re la ted P art ies :

Contr ibut ion to Staf f Provident Fund 176 ,212 288 ,560

Key managem ent personne l :

Depos i ts

Depos its received 25 ,672 ,406 18 ,572 ,157

Wi thd rawa ls 25 ,958 ,044 16 ,912 ,829

Remunerat ion to Chief Execut ive Off icer 2 ,400 ,000 1 ,500 ,000

Remunera t ion to E xecu t i ves 2 ,245 ,000 3 ,000 ,000

Mark-up on deposit paid 1 ,245 ,777 58 ,408

14

Qamar-uz-Zaman

Director

Shahida Bilquis

Director

Mian M. A. Shahid

Chairman




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15

1 5 . S E G M E N T D E TA I LS W I T H R E S P E C T T O B U S I N ES S A C T IV I TI E S

The segment analysis with respect to business act iv i ty is as fo l lows:

Investm etn R eta il M icro

In G overnm ent Bank ing F inance Tota l

S ecurities B ank ing

------------------------- Rupees -------------------------

H a l f y e a r e n d e d J u n e 3 0 , 2 0 1 3 ( U n - a u d i t ed )

To ta l in c o m e 11 ,9 8 7 ,9 0 2 1 4 ,4 7 9 ,1 5 6 3 6 ,2 1 2 ,1 3 0 6 2 , 6 7 9 , 1 8 8

To ta l e x p e n s e s 8 8 2 ,7 4 4 4 0 ,1 7 2 ,3 1 9 5 0 ,9 3 4 ,7 6 2 9 1 ,9 8 9 , 8 2 5

N e t i n c o m e /( lo s s ) 11 ,1 0 5 ,1 5 8 (2 5 ,6 9 3 ,1 6 3 ) (1 4 ,7 2 2 ,6 3 2 ) (2 9 ,3 1 0 ,6 3 7 )

S e g m en t a s s e t( g r o s s ) 2 1 7 ,0 5 6 ,3 1 9 3 8 9 ,7 3 2 ,4 6 1 3 4 9 ,3 4 1 ,7 8 0 9 5 6 ,1 3 0 , 5 6 0

S e g m e n t n o n p e r fo rm in g lo a n s - - 4 6 ,9 4 5 ,5 2 8 4 6 ,9 4 5 ,5 2 8

S e g m e n t p r o v is io n re q u ir e d - - 9 ,3 2 5 ,7 7 2 9 ,3 2 5 ,7 7 2

S e g m e n t l ia b il i t ie s - 5 5 2 ,2 4 8 ,4 11 1 6 ,4 0 6 ,3 0 8 5 6 8 ,6 5 4 , 7 1 9

H a l f y e a r e n d e d J u n e 3 0 , 2 0 1 2 ( U n - a u d i te d )

To ta l in c o m e 11 ,0 3 0 ,9 5 5 9 6 9 ,6 7 4 3 ,6 3 2 ,4 0 8 1 5 ,6 3 3 , 0 3 7

To ta l e x p e n s e s - 9 ,9 3 9 ,0 3 1 2 5 ,4 1 7 ,8 8 8 3 5 ,3 5 6 , 9 1 9

N e t in c o m e /( lo s s ) 11 ,0 3 0 ,9 5 5 ( 8 ,9 6 9 ,3 5 7 ) (2 1 ,7 8 5 ,4 8 0 ) (1 9 ,7 2 3 ,8 8 2 )

Y e a r E n d e d D e c e m b e r 3 1 s t , 2 0 1 2 ( A u d i t e d )

S e g m en t a s s e ts (g r o s s ) 1 5 4 ,9 5 1 ,2 8 1 4 4 1 ,7 0 2 ,5 6 6 2 0 3 ,7 2 6 ,5 1 9 8 0 0 ,3 8 0 ,3 6 6

S e g m e n t n o n - p e r fo rm in g lo a n s - - 1 5 ,5 5 4 ,9 8 3 1 5 ,5 5 4 ,9 8 3

S e g m e n t p r o v is io n re q u ir e d - - 4 ,0 7 0 ,6 8 3 4 ,0 7 0 ,6 8 3

S e g m e n t l ia b il i t ie s - 4 7 1 ,1 9 0 ,3 2 4 1 6 ,1 8 7 ,9 1 0 4 8 7 ,3 7 8 ,2 3 4

1 6 . F I NA N C IA L R I SK M A N A G E ME N T

T h e B a n k ' s f i n a n c i a l r i s k m a n a g e m e n t o b j e c t i v e s a n d p o l i c i e s a r e c o n s i s t e n t w i t h t h o s e d i s c l o s e d i n t h e p r e c e d i n g a u d i t e d

a n n u a l p u b l i s h e d f in a n c i a l s t a te m e n t s o f t h e B a n k f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 1 2 .

1 7 . D A TE O F A U TH O R IZ A TI O N FO R I SS U E

T h i s c o n d e n s e d i n t e r i m f i n a n c i a l in f o r m a t i o n w a s a p p r o v e d a n d a u t h o r i s e d f o r i s s u e b y t h e B o a r d o f D i r e c t o r s o n S e p t e m b e r

7 t h , 2 0 1 3 .

1 8 . G EN ER AL

1 8 . 1 N o s i g n i fi c a n t r e c l a s s if i c a ti o n / r e a r r a n g e m e n t o f t h e c o r r e s p o n d i n g f i g u r e s h a s b e e n m a d e .

1 8 . 2 F i g u r e s h a v e b e e n r o u n d e d o f f t o t h e n e a r e s t r u p e e u n l e s s o t h e r w i s e s t a t e d .


17/17

Head Office:K-4/3 & 4/4, Ch. Khaliq-uz-Zaman Road,

Gizri, Karachi-Pakistan.Tel: +92 21 35865352-55 Fax: +92 21 35865017

E-mail: [email protected]: www.apnabank.com.pk

half yearly report 2013

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