UNCONSOLIDATED

CONDENSED INTERIM
FINANCIAL INFORMATION
AS ON
31 MARCH 2015
ZARAI TARAQIATI BANK LIMITED

ZARAI TARAQIATI BANK LIMITED

UNCONSOLIDATED CONDENSED STATEMENT OF FINANCIAL POSITION (UN-AUDITED)
AS AT 31 MARCH 2015
Note

Un-audited
Audited
31 March 2015
31 December 2014
Rupees in '000

ASSETS
Cash and balances with treasury banks
Balances with other banks
Lendings to financial institutions
Investments - net
Advances - net
Operating fixed assets
Deferred tax assets - net
Other assets - net

6
7
8

2,877,752
3,874,254
22,291,920
113,438,638
1,573,705
1,854,527
11,934,877
157,845,673

4,102,133
5,982,441
820,190
29,337,315
108,553,958
1,581,077
1,528,810
11,656,953
163,562,877

695,986
5,602,105
14,798,847
10,629,222
31,726,160
126,119,513

561,964
969,349
26,701,911
10,698,014
38,931,238
124,631,639

12,522,441
4,815,852
15,456,043
32,794,336

12,522,441
4,590,135
14,553,175
31,665,751

89,490,985
3,834,192
126,119,513

89,490,985
3,474,903
124,631,639

LIABILITIES
Bills payable
Borrowings
Deposits and other accounts
Sub-ordinated loan
Liabilities against assets subject to finance lease
Deferred tax liabilities - net
Other liabilities

NET ASSETS
REPRESENTED BY
Share capital
Reserves
Unappropriated profit
Share deposit money
Surplus on revaluation of assets - net of tax

10

CONTINGENCIES AND COMMITMENTS

11

The annexed notes 1 to 16 form an integral part of this condensed interim financial information.

PRESIDENT / CHIEF EXECUTIVE

PRESIDENT / CHIEF EXECUTIVE

DIRECTOR
DIRECTOR

DIRECTOR
DIRECTOR

DIRECTOR
DIRECTOR

ZARAI TARAQIATI BANK LIMITED

UNCONSOLIDATED CONDENSED INTERIM PROFIT AND LOSS ACCOUNT (UN-AUDITED)
FOR THE QUARTER ENDED 31 MARCH 2015

Note

Quarter ended
31 March 2015
31 March 2014
Rupees in '000

Mark-up / return / interest earned

Mark-up / return / interest expensed

4,407,796
216,278

3,729,454
993,302

Net mark-up / interest income

4,191,518

2,736,152

Provision for diminution in the value of investments - net

Provision against non-performing loans and advances - net
Write offs under relief packages
Bad debts written off directly

1,450,625
29,363
-

1,569,848
20,367
-

1,479,988

1,590,215

2,711,530

1,145,937

18,448
143,519
1,020,302
1,182,269
3,893,799

4,935
18,465
856,332
879,732
2,025,669

2,133,744
2,133,744
1,760,055

1,582,972
59
1,583,031
442,638

Net mark-up / interest income after provisions

NON MARK-UP / INTEREST INCOME
Fee, commission and brokerage income
Dividend income
Income from trading in government securities
Income from dealing in foreign currencies
Gain on sale of securities
Unrealized gain on revaluation of investments classified as held for trading
Other income
Total non-mark-up / interest income

NON MARK-UP / INTEREST EXPENSES

Administrative expenses
(Reversal) / provision against other assets - net
Other charges
Total non mark-up / interest expenses

EXTRA ORDINARY / UNUSUAL ITEMS

PROFIT BEFORE TAXATION

1,760,055

442,638

Taxation - Current period

- Prior years
- Deferred

1,020,239
(388,769)
631,470

611,331
(433,776)
177,555

PROFIT AFTER TAXATION

1,128,585

265,083

0.901

0.212

Earnings per share - Basic and dilutes - Rupees

12

The annexed notes 1 to 16 form an integral part of this condensed interim financial information.

PRESIDENT / CHIEF EXECUTIVE

PRESIDENT / CHIEF EXECUTIVE

DIRECTOR
DIRECTOR

DIRECTOR
DIRECTOR

DIRECTOR
DIRECTOR

ZARAI TARAQIATI BANK LIMITED

UNCONSOLIDATED CONDENSED INTERIM STATEMENT OF COMPREHENSIVE INCOME (UN-AUDITED)
FOR THE QUARTER ENDED 31 MARCH 2015
Quarter ended
31 March 2015
31 March 2014
Rupees in '000
1,128,585

PROFIT AFTER TAXATION FOR THE PERIOD

265,083

OTHER COMPREHENSIVE INCOME / (LOSS)

Items that will not be reclassified to profit and loss account

Items that may be reclassified to profit and loss account

COMPREHENSIVE INCOME TRANSFERRED TO EQUITY

1,128,585

265,083

422,346
###
(63,057)
###
359,289
###
1,487,874
###

479,648
(47,965)
431,683
696,766

COMPONENTS OF COMPREHENSIVE INCOME NOT

REFLECTED IN EQUITY
Net change in fair value of available for sale securities
Deferred tax
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD

The annexed notes 1 to 16 form an integral part of this condensed interim financial information.

PRESIDENT / CHIEF EXECUTIVE

PRESIDENT / CHIEF EXECUTIVE

DIRECTOR
DIRECTOR

DIRECTOR
DIRECTOR

DIRECTOR
DIRECTOR

ZARAI TARAQIATI BANK LIMITED

UNCONSOLIDATED CONDENSED INTERIM CASH FLOW STATEMENT (UN-AUDITED)
FOR THE QUARTER ENDED 31 MARCH 2015
Quarter ended
31 March 2015
31 March 2014
Rupees in '000
CASH FLOWS FROM OPERATING ACTIVITIES
Profit before taxation
Dividend income
Adjustments for non-cash charges:
Depreciation
Amortization
Provision against non-performing loans and advances - net
Provision for employees post retirement medical benefits
Fixed assets - written off
Write offs under relief packages
Reversal for defined benefit plans
Gain on sale of securities
Gain on sale of operating fixed assets

(Increase) / decrease in operating assets:

Lendings to financial institutions
Advances - net
Other assets - net
Increase / (decrease) in operating liabilities:
Bills payable
Borrowings
Deposits and other accounts
Other liabilities
Employees' benefits paid
Income tax paid
Net cash generated from operating activities

1,760,055
1,760,055

442,638
442,638

47,668
138
1,450,625
172,430
29,363
92,446
(143,519)
(3,672)
1,645,479
3,405,534

38,900
319
1,569,848
144
59
20,367
57,427
(18,465)
878
1,669,477
2,112,115

820,190
(6,364,668)
(296,897)
(5,841,375)

1,846,716
(3,546,951)
(320,250)
(2,020,485)

134,022
4,632,756
(11,903,069)
(616,103)
(7,752,394)
(89,952)
(628,879)
(10,907,066)

(300,945)
(3,317,241)
(2,796,540)
62,143
(6,352,583)
(52,154)
(658,158)
(6,971,265)

8,639,536
(1,028,276)
(40,434)
3,672
7,574,498

(10,402,714)
12,359,200
(178,225)
4,287
1,782,548

CASH FLOWS FROM INVESTING ACTIVITIES

Net investments in available-for-sale securities
Net investments in held to maturity securities
Dividend income
Investments in operating fixed assets
Sale proceeds of property and equipment disposed off
Net cash used in investing activities
CASH FLOWS FROM FINANCING ACTIVITIES

Net decrease in cash and cash equivalents

(3,332,568)

(5,188,717)

Cash and cash equivalents at beginning of the period

10,084,574

12,741,754

6,752,006

7,553,037

Cash and cash equivalents at end of the period

The annexed notes 1 to 16 form an integral part of this condensed interim financial information.

PRESIDENT / CHIEF EXECUTIVE

PRESIDENT / CHIEF EXECUTIVE

DIRECTOR
DIRECTOR

DIRECTOR
DIRECTOR

DIRECTOR
DIRECTOR

ZARAI TARAQIATI BANK LIMITED

UNCONSOLIDATED CONDENSED INTERIM STATEMENT OF CHANGES IN EQUITY (UN-AUDITED)
FOR THE QUARTER ENDED 31 MARCH 2015

Share Capital

Revenue Reserves
Contingencies
Un-appropriated
reserve
profit

Statutory
Reserve

Total

.. Rupees in '000 ..
Balance as at 31 December 2013

12,522,441

3,446,658

60,000

13,597,945

29,627,044

Profit after taxation for the quarter ended 31 March 2014

Other comprehensive loss for the quarter ended 31 March 2014

265,083
-

265,083
###

Total comprehensive income for the quarter ended 31 March 2014

265,083

###

Transferred to statutory reserve

(53,017)

Balance as at 31 March 2014

12,522,441

53,017
3,499,675

60,000

13,810,011

29,892,127

Profit after taxation for the nine months period ended 31 December 2014
Other comprehensive loss for the nine months period ended 31 December 2014

5,152,301
(3,378,677)

5,152,301
###

Total comprehensive income for the nine months period ended 31 December 2014

1,773,624

###

Transferred to statutory reserve

(1,030,460)

Balance as at 31 December 2014

12,522,441

1,030,460
4,530,135

60,000

14,553,175

31,665,751

Profit after taxation for the quarter ended 31 March 2015

Other comprehensive loss for the quarter ended 31 March 2015

1,128,585
-

###
###

Total comprehensive income for the quarter ended 31 March 2015

1,128,585

###

Transferred to statutory reserve

(225,717)

Balance as at 31 March 2015

The annexed notes 1 to 16 form an integral part of this condensed interim financial information.

12,522,441

225,717
4,755,852

60,000

15,456,043

32,794,336

PRESIDENT / CHIEF EXECUTIVE

PRESIDENT / CHIEF EXECUTIVE

DIRECTOR
DIRECTOR

DIRECTOR
DIRECTOR

DIRECTOR
DIRECTOR

ZARAI TARAQIATI BANK LIMITED

NOTES TO THE UNCONSOLIDATED CONDENSED INTERIM FINANCIAL INFORMATION (UN-AUDITED)
FOR THE QUARTER ENDED 31 MARCH 2015

1.

STATUS AND NATURE OF BUSINESS

1.1

Reorganization and conversion

The Federal Government in its cabinet meeting held on 28 August 2002 decided for the reorganization and conversion of
Agricultural Development Bank of Pakistan into a public limited company for the purposes of ensuring good governance,
autonomy, delivering high quality and viable financial services to a greater number of rural clientele and adequate returns
to stake holders. Accordingly, the Agricultural Development Bank of Pakistan (Reorganization and Conversion) Ordinance,
2002 was promulgated for taking over the entire undertaking of Agricultural Development Bank of Pakistan and for
matters connected therewith or incidental thereto.

1.2

Status
As required under section 3 of the Agricultural Development Bank of Pakistan (Reorganization and Conversion)
Ordinance, 2002, Zarai Taraqiati Bank Limited ("the Bank") was incorporated as a public limited company under the
Companies Ordinance, 1984 on 23 October 2002. Consequently, under SRO 823 (1)/2002 dated 18 November 2002, all the
assets, contracts, liabilities, proceedings and undertakings of Agricultural Development Bank of Pakistan were transferred
to, and vested in Zarai Taraqiati Bank Limited on 14 December 2002, the effective date specified by the Federal
Government, on the basis of net worth determined at Rupees 8.9 billion. The Bank's registered and principal office is
situated at 1-Faisal Avenue (Zero Point), Islamabad. The Bank operates 416 (31 December 2014: 416) branches in Pakistan
as at close of the period.

1.3

Nature of business
The main purpose of the Bank is to provide sustainable rural finance and services particularly to small farmers and lowincome households to strengthen the rural and agricultural sector, mitigate poverty, capital market and investment activities
and other banking business.

2
2.1

STATEMENT OF COMPLIANCE
###
This unconsolidated condensed interim financial information has been prepared in accordance with approved accounting
standards as applicable in Pakistan. Approved accounting standards comprise of such International Financial Reporting
Standards (IFRS) issued by the International Accounting Standards Board (IASB) as are notified under the Companies
Ordinance, 1984, provisions of and directives issued under the Banking Companies Ordinance, 1962, the Companies
Ordinance, 1984, and the directives issued by SBP. In case requirements differ, the provisions of and directives issued
under the Banking Companies Ordinance, 1962, the Companies Ordinance, 1984, and the directives issued by the State
Bank of Pakistan (SBP) shall prevail.

2.2

The State Bank of Pakistan has deferred the applicability of International Accounting Standard (IAS) 39 'Financial
Instruments: Recognition and Measurement' and International Accounting Standard (IAS) 40 'Investment Property' for
Banking Companies through BSD Circular No. 10 dated 26 August 2002. The Securities and Exchange Commission of
Pakistan (SECP) has deferred applicability of IFRS 7 'Financial Instruments: Disclosures' on banks through SRO
411(1)/2008 dated 28 April 2008. Accordingly, the requirements of these standards have not been considered in the
preparation of this unconsolidated condensed interim financial information. However, investments have been classified and
valued in accordance with the requirements prescribed by the State Bank of Pakistan through various circulars.

2.3

The disclosures made in this unconsolidated condensed interim financial information have, however been limited based on
the format prescribed by the State Bank of Pakistan vide BSD Circular Letter No. 2 dated 12 May 2004 and International
Accounting Standard 34 'Interim Financial Reporting'. They do not include all of the disclosures required for full annual
financial statements, and this unconsolidated condensed interim financial information should be read in conjunction with
the financial statements of the Bank for the year ended 31 December 2014.

BASIS OF MEASUREMENT
This unconsolidated condensed interim financial information has been prepared under the historical cost convention except
that certain investments have been marked to market and are carried at fair value.

This unconsolidated condensed interim financial information is presented in Pak Rupees, which is the Bank's functional
and presentation currency.

SIGNIFICANT ACCOUNTING POLICIES AND RISK MANAGEMENT

The accounting policies adopted in the preparation of this unconsolidated condensed interim financial information are the
same as those applied in the preparation of the annual financial statements of the Bank for the year ended 31 December
2014.
The financial risk management objectives and policies are consistent with those disclosed in the annual financial statements
of the Bank for the year ended 31 December 2014.

SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGMENTS

The basis for significant accounting estimates and judgments adopted in the preparation of this unconsolidated condensed
interim financial information are the same as those applied in the preparation of the annual financial statements of the Bank
for the year ended 31 December 2014.

Un-audited
Audited
31 March 2015
31 December 2014
.Rupees in '000.

LENDINGS TO FINANCIAL INSTITUTIONS

Call money lendings
Repurchase agreement lendings

INVESTMENTS - NET

7.1

Investments by types

31 March 2015 (Un-audited)

###
820,190
820,190

31 December 2014 (Audited)

Held by
Given as
Given as
Total
Held by Bank
Total
Bank
collateral
collateral
.. Rupees in '000 ..
Available-for-sale securities
Market Treasury Bills
Shares in listed companies
Shares in unlisted companies
Sukuk Bonds
Pakistan Investment Bonds
Term Finance Certificates
Held-to-maturity securities
Market Treasury Bills
Pakistan Investment Bonds
Sukuk Bonds

5,462,253
90,031
10,523
457,383
39,968
6,060,158
3,300,207
1,966,565
831,118
6,097,890

3,456,024
8,918,277
90,031
10,523
###
2,146,081
2,603,464
39,968
5,602,105 11,662,263
-

15,021,572
90,031
10,523
4,170,348
39,976
19,332,450

969,349 15,990,921
90,031
10,523
###
4,170,348
39,976
969,349 20,301,799

3,300,207
1,966,565
831,118
6,097,890

3,223,265
890,399
812,431
4,926,095

3,223,265
890,399
812,431
4,926,095

100,000
17,860,153

100,000
24,358,545

(11,258)

(11,258)

17,848,895

24,347,287

969,349

25,316,636

4,443,025

4,019,978

701

4,020,679

Subsidiary company (unlisted)

Kissan Support Services (Private)
Limited
Investments at cost

100,000
12,258,048

Provision for diminution in value of

investments

(11,258)

Investments (net of provisions)

Surplus on revaluation of availablefor-sale securities - net

12,246,790

4,443,025

5,602,105

5,602,105

969,349

100,000
25,327,894

(11,258)

Investments at revalued amounts

(net of provisions)

16,689,815

5,602,105

22,291,920

28,367,265

970,050

29,337,315

Note
8

ADVANCES - NET
Loans, etc.
In Pakistan - gross
Less:
- Provision against non-performing advances
- Provision against staff advances

8.1

Advances - net of provision

8.1

Un-audited
Audited
31 March 2015
31 December 2014
.Rupees in '000.

121,167,371

115,495,766

(7,706,924)
(21,809)
(7,728,733)
113,438,638

(6,919,999)
(21,809)
(6,941,808)
108,553,958

Advances include Rupees 15,221.717 million (31 December 2014: Rupees 18,663.722 million) which have been placed under non-performing
status as detailed below:

Category of classification

31 March 2015 (Un-audited)

Rupees in '000 ...
Classified Provision Provision held
advances
required

31 December 2014 (Audited)

. Rupees in '000 .
Classified
Provision
Provision held
advances
required

Domestic

Domestic

Other assets especially mentioned

Substandard
Doubtful
Loss

5,402,147
4,889,461
2,402,114
2,527,995
15,221,717

977,883
1,201,046
###
4,706,924

977,883
1,201,046
2,527,995
4,706,924

11,279,270
2,774,219
2,490,127
2,120,106
18,663,722

554,840
1,245,053
2,120,106
3,919,999

554,840
1,245,053
2,120,106
3,919,999

Provision under portfolio audit - general

15,221,717

###
4,706,924

3,000,000
7,706,924

18,663,722

3,919,999

3,000,000
6,919,999

8.1.1

Regulations R-11, R-12, R-13 and R-15 of the Prudential Regulations for Agriculture Financing prescribe minimum standards for classification
and provisioning of non-performing loans. As per the time based criteria given in the aforesaid Regulations, provision against non-performing
loans is to be made at a given percentage of the difference resulting from the outstanding balance of principal less the amount of realizable
liquid assets and a given percentage of the value of mortgaged lands and buildings at the time of sanction of the loans. However, as a matter of
prudence the Bank has not availed the benefit of allowed value of mortgaged lands and buildings while computing the provision against nonperforming loans.

8.1.2

In addition to the time based criteria, the Bank has classified loans and advances amounting to Rupees 1,679.524 million (31 December 2014:
Rupees 1,679.524 million) on the basis of credit worthiness of the borrowers in accordance with the subjective criteria of the Prudential
Regulations for Agriculture Financing.

Note
9

BORROWINGS
- In Pakistan

9.1

9.1

5,602,105

969,349

9.2

5,602,105

969,349

9.3

5,602,105

969,349

Particulars of borrowings with respect to currencies

- In local currency

9.2

Un-audited
Audited
31 March 2015
31 December 2014
.Rupees in '000.

Details of borrowings from financial institutions - secured

Repurchase agreement borrowings

9.3

It carries markup at the rate of 8% (31 December 2014: 9.75%) and is secured against market treasury bills of carrying value of Rupees
3,456.024 million (31 December 2014: Rupees 970.050 million) and Pakistan investment bonds of carrying value of Rupees 2,146.081 million
(31 December 2014: nil). This is repayable by April 2015.

10

SHARE DEPOSIT MONEY

In view of future financial viability and sustainability of the Bank, in a meeting, held on 11 July 2014 among Ministry of Finance (MoF), State
Bank of Pakistan (SBP), Securities & Exchange Commission of Pakistan (SECP) and the Bank, it was decided to convert outstanding SBP debt
- principal (Rupees 51.257 billion), sub-ordinated loan (Rupees 3.204 billion) and accrued mark-up (Rupees 35.030 billion) owed by the Bank
to SBP as on 30 June 2014 into equity investment of SBP in the Bank. It was also decided that Bank's claim against Government of Pakistan
(GoP) on account of mark-up differential and various Presidential Relief Packages shall be waived off by the Bank procedurally. As decided,
the Board of Directors of the Bank in its meeting dated 18 July 2014 and the shareholders of the Bank in their extra ordinary general meeting
dated 13 August 2014 approved the conversion of SBP debt of Rupees 89.491 billion into 8,949,098,476 fully paid-up ordinary shares as equity
investment of SBP in the Bank and the Bank's claim against the GoP have been waived-off / written-off. Currently, the Bank is in process to
complete further legal and corporate formalities.

11

CONTINGENCIES AND COMMITMENTS

11.1

Contingent assets

11.1.1

The Government of Pakistan reduced the markup rates on the Bank's advances from 14% to 9% vide Presidential Relief Package 2004 w.e.f. 01
July 2004. As per the directive of the Bank's Board of Directors, the Bank requested the Ministry of Finance to compensate the loss of revenue
due to this reduction in rate of markup. The total claim in this respect was worked out at Rupees 33,062 million for the period from 01 July
2004 to 30 June 2014 (31 December 2013: Rupees 32,377 million). This amount was not accounted for in these condensed interim financial
information as the formal approval from Ministry of Finance was not received by the Bank. However, as more fully explained in Note 10, the
Board of Directors has resolved to waive off this claim along with claims against Presidential Relief Packages (Note 11.1.2)

11.1.2

There was a contingent asset of an amount of Rupees 1.708 billion (2013: Rupees 1.708 billion) receivable from the Federal Government on
account of following Presidential Relief Packages:
Un-audited
Audited
31 March 2015
31 December 2014
.Rupees in '000.
Advances outstanding as at 30 April 2007 receivable
from borrowers of Badin, Umerkot and Tharparkar
Advances outstanding as at 04 August 2008 from
borrowers of Girdawar Circles of Mathra and Khalisa
Advances outstanding as at 31 May 2007 from
borrowers of Mansehra, Battagram, Kohistan and
Advances outstanding as at 30 November 2009 from
borrowers of Gilgit Baltistan

752,444

752,444

61,168

61,168

296,773

296,773

597,341

597,341

1,707,726

1,707,726

As more fully explained in Note 10, the Board of Directors has resolved to waive off claims against the above Presidential Relief Packages.
11.2

Contingent liabilities

11.2.1

Contingent liabilities in respect of 636 cases (31 December 2014: 521 cases) filed
against the Bank by various borrowers.

4,616,780

4,580,091

Contingent liabilities in respect of 476 cases (31 December 2014: 458 cases) filed
against the Bank in various courts of law by the employees.

1,666,396

1,692,334

11.2.2

11.2.3

There is a contingency of an amount of Rupees 297.149 million and Rupees 54.828 million on account of minimum income tax levied by the
income tax authorities under section 80-D of the Income Tax Ordinance, 1979, and various tax refunds pertaining to assessment years 1991-92
to 1998-99 and assessment year 1999-2000 respectively despite the income of the Bank being exempt from tax up to income year ended 30
June 1999. The Bank paid, under protest, these disputed tax demands and also filed writ petition in this respect in the Honorable Lahore High
Court, Rawalpindi Bench, Rawalpindi. Later on, the Bank withdrew the said petition on the directions of the Federal Government and the case
was referred to the Law and Justice Division of the Government of Pakistan (GoP) which decided the reference in the Banks favour. The
Federal Board of Revenue (FBR) disagreed with the aforesaid decision and further took up the matter with Federal Cabinet for its review.
Federal Cabinet referred the case to the Attorney General of Pakistan (AGP) for final decision which was received on 12 March 2011 whereby
the AGP decided that Section 27-A of the ADBP Ordinance should prevail over the said section 80-D of the Income Tax Ordinance, 1979.
Being aggrieved, FBR has initiated the process to file review with the AGP against the aforesaid decision.

11.2.4

Income Tax Department under section 161 / 205 of the Income Tax Ordinance, 2001 levied income tax amounting to Rupees 7.714 million for
the tax year 2004. The Bank filed an appeal before the Commissioner Inland Revenue - Appeals (CIR-A) who decided the case in favour of the
Bank. However, being aggrieved, the FBR has filed an appeal before the Appellate Tribunal Inland Revenue (ATIR), where case is pending.
The Bank has not accounted for the demand as tax payable, as a favourable decision is expected.

11.2.5

The cases relating to taxation matters of the Bank for the assessment years 2002-2003 and tax years 2003 to 2009 were contested by the Bank
at various forums. ATIR vide its orders dated 9 June 2010, 1 March 2011, 22 July 2011 and 16 April 2012 has decided most of the issues
involved in favour of the Bank. Final appeal effects order has also been received by the Bank as per decisions of ATIR resulting in net refunds
of Rupees 4,640.154 million out of which Rupees 1,887.415 million has been adjusted against payment of advance tax for the period from June
2012 to May 2013. However, Commissioner Inland Revenue (CIR) has filed reference applications under section 133 of the Income Tax
Ordinance, 2001 against the aforementioned ATIR orders dated 9 June 2010, 1 March 2011 and 22 July 2011 before the Honorable Lahore
High Court, Rawalpindi Bench for tax years 2003, 2004, 2006 and 2007 and Honorable Islamabad High Court, Islamabad for assessment year
2002-03 and tax years 2004, 2005, 2006, 2007, 2008 and 2009. No provision for income tax involved of approximately Rupees 9,917.854
million has been recognized in the condensed interim financial information as the Bank is confident for a favourable outcome based on strong
grounds of appeal and opinion of legal counsel of the Bank.

11.2.6

Deputy Commissioner Inland Revenue (DCIR) passed orders under section 122(4) of the Income Tax Ordinance, 2001 and raised demand of
Rupees 3,307 million for tax years 2008 and 2009. The Bank filed appeals before CIR(A) who maintained the order. The Bank filed an appeal
against the said order before the ATIR which has been decided and cases have been remanded back to the assessing officer. No order, in this
regard, has been received so far. The Bank has not accounted for the demand as tax payable, as a favourable decision is expected.

11.2.7

Assistant Commissioner Inland Revenue (ACIR) raised demand of Rupees 429.747 million under section 161 of the Income Tax Ordinance,
2001 for the tax year 2010. CIR(A), on appeal filed by the Bank, remanded back the case to ACIR with the directions to provide opportunity to
the assessee. The Bank and department both filed appeals before the ATIR which were decided in favour of the Bank. However, the department
has filed reference application before Honorable Islamabad High Court, Islamabad under section 133 of the Income Tax Ordinance, 2001.The
Bank has not accounted for the demand as tax payable, as a favourable decision is expected.

11.2.8

DCIR passed order under section 161/205 of the Income Tax Ordinance, 2001 and raised demand of Rupees 27.792 million for tax year 2009.
To avail the Government amnesty, the Bank paid Rupees 19.183 million under protest with waiver of penalty amount of Rupees 8.609 million
under amnesty. The FBR allowed the amnesty to the Bank. The Bank has filed appeal before CIR(A) against the orders of DCIR. CIR(A)
upheld the orders of DCIR. The Bank has filed appeal before ATIR against the orders of the CIR(A) which is pending adjudication. The Bank
has not accounted for the demand as tax payable, as a favourable decision is expected.

11.2.9

DCIR passed order under section 122(1) read with section 122(5) and raised a demand of Rs. 1,150.617 million and subsequently reduced it to
Rupees 597.740 million for tax year 2010. The Bank filed appeal before CIR(A) who decided the case by annulling the orders of DCIR with
the directions to give the lawful treatment to the evidences provided by the appellant. The Bank has filed appeal with ATIR against the orders
of the CIR(A) where the case is still pending. No provision has been made in the condensed interim financial information as favourable
outcome is expected.

11.2.10 ACIR passed orders under section 122(5A) and raised demand of Rupees 3.288 billion for tax year 2010, Rupees 2.923 billion for tax year
2011 and Rupees 2.037 billion for tax year 2012. The Bank filed appeal before CIR(A) who remanded back the cases to ACIR. The Bank has
filed appeal with ATIR against the orders of the CIR(A) which has been decided by the ATIR in favour of the Bank. However, the department
has filed reference application before Honorable Islamabad High Court, Islamabad. The Bank has not accounted for the demand as tax payable,
as a favourable decision is expected.

11.2.11 DCIR passed order under section 161/205 of the Income Tax Ordinance, 2001 and raised demand of Rupees 208.337 million for tax year 2011.
The Bank filed appeal before CIR(A) against the orders of DCIR who remanded back the case to Assessing Officer for verification. The Bank
has filed appeal before ATIR against the orders of the CIR(A) which is pending for adjudication. The Bank has not accounted for the demand
as tax payable, as a favourable decision is expected.
11.2.12 ACIR passed order under section 122(5A) of the Income Tax Ordinance, 2001 and raised demand of Rupees 4.920 billion for tax year 2013.
The Bank filed appeal before CIR(A) against the orders of ACIR who deleted the demand on various issues and also confirmed the action of
ACIR on certain issues. The Bank and FBR both have filed appeals before ATIR against the orders of the CIR(A) which are pending for
adjudication. The Bank has not accounted for the demand as tax payable, as a favourable decision is expected.

11.2.13 Order STA No. 416/IB/2012 for tax year 2008 and STA No. 417/IB/2012 for tax year 2009 were issued by ATIR to delete the demand of
Rupees 51.476 million and Rupees 171.794 million respectively in respect of Federal Excise Duty / Sales Tax raised by the Assessing Officer.
Against the orders, reference applications have been filed by FBR in Honorable Islamabad High Court, Islamabad on 7 May 2013. No
provision for said amounts have been recognized in the condensed interim financial information as the Bank is confident of a favourable
outcome based on strong grounds of appeal and opinion of legal counsel of the Bank.

11.2.14 Assessment orders were passed by DCIR regarding Federal Excise Duty / Sales Tax for the year 2011 and year 2012 by raising demand of
Rupees 485.940 million and Rupees 712.552 million respectively. The Bank filed appeal against the orders with CIR(A) who reduced the
amount by Rupees 855.251 million and confirmed the rest of demand of Rupees 343.242 million. Further appeal was filed before ATIR against
the decision of the CIR(A) which has been decided in favour of the Bank. However, the department has filed reference application before
Honorable Islamabad High Court, Islamabad for the year 2011. The Bank has not accounted for the demand as tax payable, as a favourable
decision is expected.
Un-audited
31 March 2015

Audited
31 December 2014

.Rupees in '000.
11.3

Commitments against capital expenditure

4,496

4,496

Quarter ended
31 March 2015
31 March 2014
12

EARNINGS PER SHARE - BASIC AND DILUTED

Profit after taxation (Rupees in thousand)
Weighted average number of ordinary shares (Numbers)
Basic and diluted earnings per share (Rupees)

13

1,128,585
1,252,244,067

265,083
1,252,244,067

0.901

0.212

CREDIT RATING
JCR-VIS Credit Rating Company Limited, Karachi in their report dated 8 August 2014 has reaffirmed credit rating of the Bank at AAA/A-1+ (31
December 2013: AAA/A-1+) with stable outlook, medium to long term credit rating of A and short-term credit rating of A-2 (31 December 2013: A
medium to long term credit rating, A-2 short term credit rating).

14

RELATED PARTY TRANSACTIONS

The Bank has related party relationship with its subsidiary company, employee benefit plans, Bank's directors and key management personnel.
Contributions to and accruals in respect of staff retirement and other benefit plans are made in accordance with the actuarial valuations / terms of the
contribution plan. Remuneration to the key management personnel is determined in accordance with the terms of their appointment.
Details of transactions with related parties and balances with them are as under:
Subsidiary company
Key management personnel
Quarter ended
Year ended
Quarter ended
Year ended
31
31
31
31
March 2015
December 2014
March 2015
December 2014
(Un-audited)
(Audited)
(Un-audited)
(Audited)
Rupees in '000'
Advances
Balance at the beginning of the period / year
Loan granted during the period / year
Repayment during the period / year
Balance at the end of the period / year

Deposits
Deposits at the beginning of the period / year
Deposits received during the period / year
Deposits repaid during the period / year
Deposits at the end of the period / year
Investments at the end of the period / year
Receivable / (payable) at the end of the period / year

7,583
163,882
(140,524)
30,941

8,688
48,918
(50,023)
7,583

100,000
(3,246)

100,000
8,130

11,559
3,393
(1,493)
13,459

7,183
6,555
(2,179)
11,559

3,861
23,745
(17,755)
9,851

3,054
80,399
(79,592)
3,861

(Un-audited)
(Un-audited)
Subsidiary company
Key management personnel
Quarter ended
Quarter ended
Quarter ended
Quarter ended
31
31
31
31
March 2015
March 2014
March
2015
March 2014

Rupees in '000'

Mark-up / interest earned

Mark-up / interest expensed
Remuneration paid
Post retirement benefit
Contribution to defined benefit plan
Services rendered by subsidiary
Rent, accounting and communication charges
15

256
176,285
1,952

323
279,545
16,097

111
28,619
1,848
243
-

133
22,864
1,653
170
-

DATE OF AUTHORIZATION FOR ISSUE

This unconsolidated condensed interim financial information was authorized for issue on 20 April 2015 by the Board of Directors of the Bank.

16

GENERAL
Figures have been rounded off to the nearest thousand of rupees.

PRESIDENT / CHIEF EXECUTIVE

PRESIDENT / CHIEF EXECUTIVE

DIRECTOR
DIRECTOR

DIRECTOR
DIRECTOR

DIRECTOR
DIRECTOR