Bafl Consolidated Financial Statements For The Year Ended 31-12-2015

KPMG Taseer Hadi & Co.
Chaftered Accountants
Bank Alfalah Limited
Consolidated Financial
Statements
For the year ended
3l December 2015
KPIIG Taseer Hadi & Go. Telephone + 92 (21\ 3568 5847
Chartered Accountants Fax +92.(21) 3568 5095
Sheikh Sultan Trust Building No. 2 Internet www.kpmg.comrpk
Beaumont Road
Karachi, 75530 Pakistan
Auditors'Report to the Members
We have audited the annexed consolidated financial statements comprising consolidated

statement of financial position of Bank Alfalah Limited and its subsidiary companies (the
Group) as at 31 December 2015 and the related consolidated profit and loss account,
consolidated statement of comprehensive income, consolidated cash flow statement and
consolidated statement of changes in equity together with the notes forming part thereof, for the
year then ended. We have also expressed separate opinions on the financial statements of Bank
Alfalah Limited and its subsidiary companies namely Alfalah Securities (Private) Limited and
Alfalah GHP Investment Management Limited. These financial statements are responsibility of
the Holding Company's 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 Bank
Alfalah Limited and its subsidiary companies as at 3 I December 201 5 and the results of their
operations for the year then ended.
The comparative figures for the year ended 31 Decembe r 2014 in the accompanying financial
statements are based on the unaudited consolidated financial statements of the Group.
kfNtq (?- 11--1' t-e-

Datez 29 February 2016 KPMG Taseer Hadi & Co.
Chartered Accountants
Karachi Syed lftikhar Anjum
KPMG Taseer Hadi & Co., a PailneBhip fm regist€red in pakistan

and a mamber fim of the KPMG network of indeoend€nt member
fims affiliated with KPMG Intemational C@oerative
('KPMG Inlemational'), a Swiss entity.
BANK ALFALAH LIMITED
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT DECEMBER 31,2015
Note 201s 2014

(Un'audited)
(Rupees in'000)
ASSETS
Cash and balances with treasury banks 6 l- 6rs6afr? I I 5oF1ss45l

Balances with other banks
Lendings to financial institutions
7
I ro,sm,raa I I
|
12,334,368
18,313,485
|
Investments - net
8
| 53,628,870 |
I | 3e7,s16,448 I sz+,soo,azz
|
I I
Advances - net 10
| 327,2se,560 | 2s0,568,37e
| I
| 17,317,691 I 15,7e6,5e2
Operating fixed assets
Deferred tax assets
Other assets
11
12
13
tl
| 28,701,223
|
|
t-l
| 31,46e,458
I
903.415,757 743,958,799
LIABILITIES
Bills payable 14
I q?rirrrl | 11,?58J55-l
Borrowings 15
| 172,3e3,1e8
I | 5s,232,e16 |
Deposits and other accounts 16 | 640,137,161 I I oos,sso,so+ |
Sub-ordinated loans
Liabilities against assets subject to finance lease
17
Ill s,sss,ooo
I Itl s,saz,ooo
I
Deferred tax liabilities 12

| 1,826,270 I 821,038
I
Other liabilities 18 | 15,249,463
|
| I usss,zzz I
849,323,021 698,391,235
NET ASSETS __gtggazgg_ ___1s,567591_
REPRESENTED BY
Share capital 19 't5,898,062 15,872,427

Reserves 14,164J20 12,338,026
Unappropriated profit 12,813,488 10,091,872
Total equity attributable to the equity holders of the Bank 42,875,670 38,302,325
Non-controlling interest 274,1U 255,999
Surplus on revaluation of assets - net of tax 20 10,942,932 7,009,240
54.092,736 _45,567,993_
CONTINGENCIES AND COMMITMENTS 21
The annexed notes 1 to 45 form an integral part of these consolidated financial statements.
(0$c*
OFFICER / DIRECTOR
CONSOLIDATED PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED DECEMBER 31, 2015
Note 2015 2014

(Un-audited)
(Rupees in'000)
Mark-up / return / interest earned 23 61,424,713 55,374,052

Mark-up / return / interest expensed 24 32,810,469 33,494,344
Net mark-up / interest income 28,614,244 21,879,708
Provision against non-performing loans and advances - net 105 l---86'76d-l @
Provision for diminution in the value of investments - net
Bad debts written off directly ,?tl, | 2,286,900
"u'ln'll as'8ezl
1,533,833
Net mark-up / interest income after provisions 26,327,344 20,345,875
Non mark-up / interest income

Fee, commission and brokerage income l+"s+s€lrl
Dividend income I 313,ss0 |
Income from dealing in foreign currencies | 2,042,s57 |
Gain on sale of securilies - net 25 | 1,058,167
Unrealised gain on revaluation of investments
classified as held for trading - net 9.23
tl[ 160,0e8 I
|
Share of profit from associates 9.19
26
II ser,zse
os+,tst
I
Other income I
Total non mark-up / interest income 9,136,360
35,430,158 29,482,23s
Non mark-up / interest expenses

Administrative expenses
Provision against off-balance sheet obligations
27
18.1
r-aml
I 38,453 |
Provision against other assets 13.3
28
|| 358,e3s
206,377
I
Other charges |
Total non mark-up / interest expenses 22,772,986 20,804,878

12,657,172 8,677,357
Extra ordinary / unusual items
Profit before taxation 12,657,172 8,677,357
Taxation 29
- Current l-s,oidF65l lffi6|
- Deferred | (461,035)l |- (272,1e4)l
- Prior years I 567,813 | | 38,427 |
5,142,843 2,889,894
Profit after taxation 7,514,329 5,787,463
Profit attributable to:
Equity holders of the Bank 7,502,660 5,765,251
Non-controlling interest 11,669 22,212
7,514,329 5,787,463
(Rupees)
Basic earnings per share 30.1 4.72 4.18
Diluted earnings per share 30.2 4.70 4.18
The annexed notes 1 to 45 form an integral part of these consolidated financial staternents.
ffna-
1
(-----\---
IVE OFFICER DlRECTOR DIRECTOR
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED DECEMBER 31,2015
2015 2014
(Un-audited)
Note (Rupees in ,000)
Profit after taxation

7,514,329 5,787,463
Other comprehensive income
Items that are or may be reclassified subseguenfly to profit and loss account
Exchange differences on translation of net investments in foreign branches

210,501 (403,s85)
Items that will never be reclassified to profit and loss account
Remeasurement of defined benefit plans

Related tax on remeasurement of defined benefit plans
34.1.4 l-(lse:ool
| 69,637
| ll
35rô6s
(124,966)l
I
(129,563) 232,099
Share of Remeasurement of defined benefit plans of associate (752i 125
Comprehensive. income - transferred to statement of changes in equity
:: 7,594,515 5,616,102
Attributable to:
Equity holders of the Bank 7,576,380 5,593,890

Non-controllin g interest
18,135 22,212
Comprehensive income - transfened to statement of changes in equity 7,594,515 5,616,102
Gomponents of comprehensive income not reflected in equity
Items that are or may be reclassified subsequenfly to profit and loss account
Surplus on revaluation of available for sale securities

[s'7gmsTl lE6-F6--l
Related defered tax liability
| (1,346,452)l I
(r,e+r,AZZ)l
2,444,606 3,420,629
Share of surplus on revaluation on associates'available for sale securities 536
Y
Total comprehensive income
-mmr
:::
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Y<---\__">
IVE OFFICER DIRECTOR

BANKALFALAH LIMITED
CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED DECEMBER 31,2015
Note 2015 2014

(Un-audited)
(Rupees In'000)
CASH FLOWS FROM OPERATING ACTIVITIES
Profit before taxation 12,657,',t72 8,677,357
Dividend income (349,963) (313,9s0)
Share of profit from associates - net of tax (309,017) (331,238)
11,998,192 8,032,169
Adjustments
Depreciation
Amortisation
27
27
ITiffil
I 275,43e |
l--T6amtl
| 1,447,s311
271,e26 |
Provision against non-performing loans and advances - nel 10.5 | 2,1s0,20e1 |
Provision for diminution in value of investments - net 9.21 | 136,6e1 I I 8s,Be7 |
Provision against off-balance sheet obligations
Provision against other assets
18.1
13.3
| 1,066 |
322,3e1
| 38,453
3s8,s35
|
Unrealised gain on revaluation of investments | | | |
classified as held for trading - net

Bad debts written-off directly
9.23
10.6.1
II r,n,ourll
| ||
(16o,oe')l
sl
Gain on sale of operating fixed assets - net 26 I I
trg,gzstl
4,458,987
wt,rczll
3,508,552
16,457,179 11,540,721
(lncrease) / decrease In operating assets
Lendings to financial institutions l-(rx-n-5l6|f -1145ffi atl
Held for trading securities | 2,363,0621
(38,881,3s0)l
I
(14,136,2e1)l
Advances | |
(56,111)l |
(31,265,764)l
Other assets (eixcluding advance taxation) | (13,e80,116)l
(60,285,9s5) (74,035,668)
Increase / (decrease) In operatlng liablllties
Bills payable
Bonowings
@t@
| 117,197,929 II 32,101,847 |
Deposits and other accounts I sa,reo,zsz||
ses,zoo | |
80,448,344 I
Other liabilities I g,ost,zae I
149,919,160 117,846,114
'106,090,384 55,351,167
lncome tax paid (3,066,039) (3,989,132)
Net cash generated from operating actlvlties 103,024,345 51,362,035
CASH FLOWS FROM INVESTING ACTIVITIES

Net investments in available for sale securities [1-i130oFal [-ei-j-3zilI
Net investments in held to maturity securities I I
(58,6e0,346)l
e84,3551
Investment in associated companies I tt,soo,ezall | (730,15e)l
Disposal of investment in associated companies | 1,434,580 | | e6,ooo I
Dividend income received from associates I 168,887 | I 't7s,240 |
Y Dividend income received I ass,tst | | 323,28e I
Investments in operating fixed assets
Sale proceeds of property and equipment disposed-off
|
1',t.4 1
(1,e81,066)l |
25,4241 I
(3,314,0il)l
657,8s61
Net cash used In Investlng activltles (72,364,1371 (87,426,50s)
V
CASH FLOWS FROM FINANCING ACTIVITIES
lssuance of share capital l-4i.e_a6-] l-616,,56,4-2-{
Redemption of sub-ordinated loans I (s,tos,ozg)l
(4,000)l I (4,000)l
Dividend paid | | (z,zsg,gs+)l
Net cash (used) / generated In financing activities (3,127,243) 3,928,486
Exchange difference on translation of the net investments in foreign branches 210,501 (403,585)
Increase / (decrease) In cash and cash equlvalents 27,743,466 (32,539,569)

Cash and cash equivalents at beginning of the year
Effects of exchange rate changes on cash and cash equivalents
l@6-tl
I
lF,zn,An1
s4g,gse | | z,tzg,tos I
65,883,223 98,422,792
Cash and cash equlvalents at end of the year 31
-626s8-f -5"88=F
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cHt OFFICER DIRECTOR

I^'IKAFAÎILnlED
corSoLDArED STAIEXEr! OF CIiANOES tr EOUtTy
FOR THE YEAR E}IOEO OECETBEN tI.2OI5
CDLlRoe. Rtaoa Raaaoaa
Sha.a
3h.r Erch.ng. .E-Pbry un.pp.o.
aP[rl
Prmlum
"#1T rrnrrrrin j$;ffi, prtrioo s6sr tron
c*mme
taaada g?olit hhrt
RuPo. In '0o0)-.
v laLn6 aa al Jansartf 1,2014 t3,491,563 ' 5.508,172 1.756,050 7.E53.784 26,619,559 233,tE7 28.E53.355
Ch.ng.r lo .qllry fo.2014
to,.l .mphtaalw hrcon
Prcft.ft., bEtion
t-l[lnEn[rffinr;;1
Olhar ffih.n.tu.hcom
EEh.ngc difffie m Fanstatir ot nct hwstront h toEign bErches
R.m.eEm.nt ot dcfrud benoft dans (Noto 3t.i.'l)
LJ L] LJ L_] L-] d [frJ LJ E:I

tt Ralllcd Ex dutg.
b€nofil plsn! ot assiatc
(403,sE5) 5,997.475 5,593.890 22,212 5.616.102
TMrtd b rlrbbry G@ (1,128,170)
TnnCd trm arDlur on @l6tim

of opadtnC l|,6d $$ts - nct ot tax
67.096 67,096 . 67.096
Tnn.Gtld. ull|| wmn reord.d dlacily In .quity
Shr6t itqrd dur'hg tE tler 2.380.86,1 - 6.665.420 6.666,420
Fh.l €!h dilir.rd tq tta Fa,6ndsd
D@dbcr31,20r3 @ 20t4. (2,69E.313) (2,698,313) (2.698,313)
t
R€cognitioo of tak Elu. ot shm b.sod payrn.nas on gEnt dat6 (rclo 3,t.2) .t
17.0E3 - 117,083 117,083
Ummo.ti!.d portion of deferid cmploycc omponebn op€ns (63.120) - (63.4201 (63,120)
B.h.c....t Oc.nb.r 31, 2Ol4 1rs7z12? 12sss56 6$6J4, -'il6li65 10.091.872 38,302.325 255.999 -B-:55e8'-
--EEr
Ch.ne.. ln .qutty tq 2015
| . n - tr .r
foad Mprrtraoatfr lh.m
llllll"''''llllll,'o.uo'llll,'o,uo'l
ll ll ll ll"*'ll ut-'*rur-fl
Prcfa !Jl.. t Elton
t-r5i560tT*:;l
!t-.l
Efi@t of dram tn miditv int'cat
(Xhar comchaaatr Incom
l
ll
diFc@a m banstatim ol mt inEsunent
IL-_jLTI
EEhango ln foEign bEnchog
Rcmlascm.nt
Ral.iod
Sh!.r ot
t rdDrpc
ot dsfhed
Rm.esEmnt
bdgfit daG (mtc 3,t.1 .,t)
of dgfnsd benoft gtans of a$sialt

II lln llrL---JL-lL::1[:1 ll":::'l
210's0'
ll"::::'ll"::::'l
18'135 7'5s4's1s
''s76'380
TEn8fd b atatJtory roeN - '*,*, - ,l.il,lll,
TtuCq trm e,pl6 s rffiluation
d opanting ft6d asts - mt o, tax
Tnn..cllonr wlth dm[, [cord.d dtoc0y ln .qslty
FiEl €sh divu€.d fd hs !€ar cndsd

[email protected],20la @ m% (3,171,485) (3,174,485) . (3.17,r,{8s)
Shma b.ad (futirg 0E y6ar 25,635 ,t6,201
- ,t1,836 - 41.835
R.cogolioi of tst wluo of rha.a baod paynsts on g6nt datc (rcb 3,12) .
119.250 - 119,250 119,250
\rJ Umno.b.d portFo ot dofcmd .mployls Gmplnstio !,gcn$ (21,1201 . (24,4201 . -
Q1.4201 ,.v'a t
.t." .t
T6n.t!r b Sh.6 P6ntun on biua@ ot gharcs undor Stock Ootion Schsmo - 2f391 (27,6e1) - ./':
B.Ln€ [.t Dsmb.. 3l, 20t5 '15.E96.062 4.32!t.6'lE E.1|(},90,r 1,572,966 ,t20.602
12,Ei3.'188 42.E75.670 274,1y .. 'a3.149.@4 '
"/
' Thb Epcstt E$m @a!6d und6r *clion 2.t(txa) ot hq B.nkho Cffpanbs dlB@, t96il.
-r-
Thc smld rcb3 I b iis tm an Intsg€l p8rt ot thos qstktat d fnqncial statr|MB
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I

NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 3I, 2015
1 STATUS AND NATURE OF BUSINESS
1.1 The "Group" consists of:
Holding Company
Bank Alfalah Limited, Pakistan
public limited company

Bank Alfalah Limited (the Bank) is a banking company incorporated in Pakistan on June 21,1992 as a
on November 1, 1992. The Bank's registered office
under the Companies ordinance, 1gg4. lt commenced its banking operations
t
Road, Karachi and is listed on the Pakistan Stock Exchange (formerly Karachi, Lahore
is located at B. A. Building, l. l. Chundrigar
in the Banking companies ordinance-
Y and lslamabad Stock Exciianges). The-Bank is engaged in banking services as described
baniing branches including '12 sub branches (2014: 480 branches including 12
1962 and is operating mrougi 464 conventional
(2014:157 branches) and 1 offshore
sub branches), 10 overseas branches (2014:'lo branches), 158 lslamic banking branches
disclosed in note 32 of the consolidated financial statements'
banking unit llOt a: 1 unit). The credit rating of the Bank is
IJ
Percentage of Holding
2015 2014
Subsidiaries
97.91 percent 97.18 percent
Alfalah Securities (Private) Limited, Pakistan
40.22 percent 4Q.22 percenl
Alfalah GHP lnvestment Management Limited, Pakistan
i
1.2 In addition the Group maintains investments in the following:
U
- Note 1'2'1
lnvestment in mutual funds established under trust structure not consolidated as subsidiaries
27 percenl 34.67 percent

Alfalah GHP Value Fund
Alfalah GHP lslamic Stock Fund
Alfalah GHP Cash Fund
84.1 percent 47.42 petcent
Alfalah GHP lslamic lncome Fund
Y
Associates
Alfalah lnsurance Limited
30 percent 30 Percent
i Sapphire Wind Power Company Limited

30 percent 30 Percent
Alfalah GHP MoneY Market Fund

2.71 percenl 16.18 Percent
tt
10.68 percent 22.25 Percent
Alfalah GHP Income Multiplier Fund
Alfalah GHP Sovereign Fund
Alfalah GHP Income Fund
Appollo Pharma Limited
7.4 percent NIL
which are subsidiaries of the Group

1.2.1 These represent the Bank's investment in mutual funds established under Trust structure,
t' for the purposes of consolidation in accordance with the directives issued by the
under IFRS 10, but have not been considered
January 28'2016' The said SRO
U Securities and Exchange Commission of Pakistan (SECP) through S.R.O 56(l) /2016 dated
237 of the companies ordinance 1984 and IFRS 10 'consolidated
states that the requirements of consolidation under seclion
in case of investment by companies in mutual funds established under Trust struclure'
Financial statemenls, is not applicable
the in these funds have been
Accordingly, for the purposes of Consolidated Financial Statements of the Group,
investments
accounted for as associates as explained in note 2.5 to these consolidated financial statements.
I
BASIS OF PRESENTATION
v 2.1 These consolidated financial statements represent financial statemenls of holding company
- Bank Alfalah Limited and its
have been consolidated on a line-by-line basis and the inveslment held by
subsidiaries. The assets and liabilities of subsidiaries
the holding company is eliminated against ihe conesponding share capital of subsidiaries
in these consolidated financial
i
statements.
dated February 28' 2013'

2.2 The Securities and Exchange Commission of Pakistan (SECP) vide letters EM)l233l4o7l2oo2'750
August 18'2014 had granted an exemption
EwDl23gl4oil2oo2-734datJd December 18,2013 and Ei'rD/233/655/2004-68 dated
years 2012' 2013 and 2014 respeclively,
to the ding company from the preparation of consolidated financial statements for the
hof
of information in the financial statements of the holding company. For the purposes of these
subject to disclosure certain
. for the prior year 2014 has been presented consistent with
consolidated financial statements, un-audited comparative information
to in note 2.5 to these consolidated financial statements. Accordingly, the comparative
the basis of consolidation as referred
I
fiqures for the vear ended 31 December 2Q14 are un-audited'
IJ
Ke qr-
I
ln accordance with the directives of the Federal Government regarding the shifting of the
banking system to lslamic modes, the
State Bank of Pakistan has issued various circulars from timq to time. Permissible form
of tra-de-retated modes of financing
includes purchase of goods by banks from their customers and immediate resale
to them at appropriate mark-up in price on
defened payment basis. The purchases and sales arising under these arangements
are not reflected In these consolidated
financial statements as such, but are restricted to the amount of facility actually utilised
and the appropriate portion of mark-up
thereon' The lslamic Banking branches of the Bank have complied witn tne requirements
set out under the lslamic Financial
Accounting standards issued by the lnslitute of chartered Accountants of Pakistan
and notified under the provisions of the
v Companies Ordinance, 1984.
2.4 Key financial figures of the lslamic Banking branches are disclosed in Annexure ll to
the unconsolidated financial statements.
2.5 Basls of consolidation
Subsidiaries are entilies controlled by the Group. Control exists wtren lhe Group is exposed,
or has rights, to variable returns from
its involvement with investee and has the ability to affect those returns through its power
over the inveitee.
These consolidated financial statements incorporate the financial stalements of subsidiaries from the date that control
commences until the date that control ceases.
H Associates are those entites in wtrich the Group has significant influence, but not control, over the financial
and operaling polices.
Associates as well as investment in mutual funds established under trust structure (nol consolidated
as subsidiaries) are
accounted for using the equity method.
Non-controlling interests are that part of the net results of operations and of net assets of subsidiaries
attributable to interest
which are not owned by the holding company. Material intra-group balances and transactions
are eliminated.
l
3 STATEMENT OF COMPLIANCE
Y
3.1 These consolidated financial statements have been prepared in accordance with the approved
accounting standards as
applicable in Pakistan. Approved accounting standards comprise of such International Financial Reporting
Standards (lFRSs)
I issued by the International Accounting Slandards Board and lslamic Financial Accounting Standaids (lFASs)
issued by the
U Institute of Chartered Accountants of Pakistan as are notified under the Companies Ordinance, 1gg4,
the provisions of and
directives issued under the companies ordinance, 1984, Banking companies ordinance, 1g62
and the directives issued by the
Securities and Exchange commission of Pakistan (sEcP) and the state Bank of Pakistan (sBp). In
t case the requirements differ,
the provisions of and directives issued under the Companies Ordinance, '1984, Banking bompanies Ordinance,
1962 and the
v directives issued by SECP and SBP shall prevail.
The State Bank of Pakistan has deferred the applicability of lntemational Accounting Standard (tAS) 39, 'Financial
lnstrumenls:
Recognition and Measurement' and lntemational Accounting Standard (lAS) 40, 'lnvestment froperty for
banking companies
L through BSD Circular Letter No. 10 dated August 26, 2OO2 till further instructions. Further, lie
Securities Erihang"
Commission of Pakistan has deferred the applicability of International Financial Reporting Standard (;FRS) "ndZ, ,Financial
Instruments: Disclosures'on banks through its notification S.R.O 411(1y2008 dated April 2g,206g.
Accoroingly, the requirements
of these standards have nol been considered in the preparation of these consolidated financial
stalements. However, investments
Y have been classified and valued in accordance with the requirements prescribed by the State Bank
of pakistan lhrough various
circulars.
i' 3.3 IFRS 8'Operating Segments' iseffective for the group's accounting periods beginning on or after
January 1, 2009. All banking
t companies in Pakistan are required lo prepare their annual financial statements in line with the format prescribed
under BSD
Circular No.4 dated February 17'2006, 'Revised Forms of Annual Financial Statements', effective
from the accounting year
ended December 31, 2006. The management believes that as the SBP has defined the segment categorisation
in lhe above
mentioned circular, the SBP requirements prevail over the requirements specified in IFRS 8. Accordingly,
segment information
disclosed in these consolidated financial statements is based on the requirements laid down by SBp.
i, The Securities and Exchange Commission of Pakistan (SECP) has notified the applicability of lslamic Financial
Accounting
Standard (IFAS) 1 - Murabaha issued by the lnstitute of Chartered Accountants of Pakistan. IFAS 1
\r periods beginning on or after 01 January 2006. IFAS 1 requires assets underlying Murabaha
rras effective for financial
financing lo be recorded as
inventory separately from the assets in Bank's own use. These assets are canieo it iost less impairment, if any. The Bank has
I adopted the standard in the current year starting March 2015.
The state Bank of Pakistan through BPRD circular No. 04 ot 2015 dated February 25,20'15 has
defened appticability of lslamic
Financial Accounting Standard-3 for Profit & Loss Sharing on Deposits
0FAS-3) islued by the lnstitute of Chartered Accountants
of Pakistan and notified by the Securities & Exchange commission of Pakistan (sECp), vide their sRo
No. 571 of 2013 dated
June 12, 2013 for Institutions offering lslamic Financial Services (llFS). The standard will result in
certain new disclosures in these
consolidated financial statements of the Group.
tLen*-
t
LrJ
3
3.6 New and revised approved accounting standards not yet effective
The following standards, amendments and interpretalions of approved accounting slandards will be effective for accounting
periods beginning on or after January 01, 20'16:
Amendments to IAS 38 lntangible Assets and IAS 16 Property, Plant and Equipment (effective for annual periods beginning on or
after January 1, 2016) introduce severe restrictions on the use of revenue-based amortization for intangible assets and explicitly
\, state that revenue-based methods of depreciation cannot be used for property, plant and equipment. The rebuttable presumption
that the use of revenue-based amortization methods for intangible assets is inappropriate can be overcome only when revenue
and the consumption of the economic benefits of the intangible asset are 'highly correlaled', or when the intangible asset is
expressed as a measure of revenue. The amendments are not likely to have an impact on Group's financial statements.
Investment Entities: Applying the Consolidation Exception (Amendments to IFRS 10 - Consolidated Financial Statements and IAS
28 - Investments in Associates and Joint Venlures) [effective for annual periods beginning on or after January 1, 2016) clarifies
(a) wttich subsidiaries of an investment entily are consolidated; (b) exemption to present consolidated financial statements is
available to a parent entity that is a subsidiary of an investment entity; and (c) how an entity that is not an investment entity should
apply the equity method of accounting for its investment in an associate or loint venture that is an investment entity. The
amendments are not likely to have an impacl on Group's financial statements.
Amendments to IFRS 11 'Joint Anangements'(effective for annual periods beginning on or afler January 1, 2016) clarify the
accounting for the acquisition of an interest in a joint operation where the activities of the operation constitute a business. They
require an investor to apply the principles of business combination accounting wtren it acquires an interest in a joint operation that
constitutes a business. The amendments are not likely to have an impact on Group's financial statements.
Amendment to IAS 27 'Separate Financial Statements' (effective for annual periods beginning on or after January 1, 2016) allows
entities to use lhe equity method to account for investments in subsidiaries, joint ventures and associates in their separate
v financial statements. The amendmenl is not likely to have an impact on Group's financial statements.
Agriculture: Bearer Plants [Amendment to IAS 16 and IAS 41] (effective for annual periods beginning on or after January 1, 2016).
IJ Bearer plants are now in the scope of IAS 16 Property, Planl and Equipment for measurement and disclosure purposes.
Therefore, a company can elect to measure bearer plants at cost. However, the produce growing on bearer plants will continue to
be measured at fair value less costs to sell under IAS 41 Agriculture. A bearer plant is a plant that: is used in the supply of
\ agricultural produce; is expected to bear produce for more than one period; and has a remote likelihood of being sold as
llr agricultural produce. Before maturity, bearer plants are accounted for in the same way as self-constructed items of property, plant
and equipment during construction. The amendments are not likely to have an impact on Group's financial statements.
\ Annual lmprovements 2012-2014 cycle (amendmenls are effective for annual periods beginning on or after January 1 , 2016). The
Lt new cycle of improvements contain amendments to the following standards:
- IFRS 5 Non-cunent Assets Held for Sale and Discontinued Operations. IFRS 5 is amended to clarify that if an entity
I
changes the method of disposal of an asset (or disposal group) i.e. reclassifies an asset from held for distribution to owners
Y to held for sale or vice versa without any time lag, then such change in classification is considered as continuation of the
original plan of disposal and if an entity determines that an asset (or disposal group) no longer meets the criteria to be
classified as held for distribution, then it ceases held for distribution accounting in the same way as it would cease held for
t
sale accounting.
\i
- IAS 19 'Employee Benefits'. IAS 19 is amended to clarify that high quality corporate bonds or government bonds used in
determining the discount rate should be issued in the same currency in which lhe benefits are to be paid.
- IAS 34 'lnterim Financial Reporting'. IAS 34 is amended to clarify that certain disclosures, if they are not included in the
notes to interim financial statements and disclosed elsewhere should be cross referred.
Y - IAS 24 'Related Party Disclosures'. The definition of related party is extended to include a management entity that provides
key management personnel services to the reporting entity, either directly or through a group entity.
i, The above amendments are not likely to have an impact on Group's financial statemenls.
BASIS OF MEASUREMENT
4.1 Accounting convention
These consolidated financial statements have been prepared under the historical cost convention except that certain fixed assets
ire stated at revalued amounts, and held for trading and available for sale investments and derivative financial instruments are
t, measured at fair value.
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I
4
4.2 Functional and Presentation Currency
These consolidated financial statements are presented in Pakistani Rupees, which is the Group's functional and presentation
cutrency. The amounts are rounded off to the nearesl thousand rupees except as stated othenvise.
4.3 Critical accounting estimates and judgements
The preparation of these consolidated financial statements is in conformity with approved accounting standards as applicable in
Pakistan requires management to make judgements, estimates and assumptions that affect the reported amounts of assets and
liabilities and income and expenses. lt also requires management to exercise judgement in application of its accounting policies.
The estimates and associated assumptions are based on historical experience and various other factors that are believed to be
reasonable under the circumstances. These estimates and assumptions are reviewed on an ongoing basis. Revisions to
accounting estimates are recognised in the period in wtrich the estimate is revised, if the revision affecls only that period, or in the
period of revision and in future periods if the revision affects both current and future periods.
9ignificant accounting estimates and areas where judgements were made by the management in the application of accounting
policies are as follows:
i) classification and provisioning against investments (notes 5.4 and 9)

ii) classification and provisioning against non-performing loans and advances (notes 5.5 and 10)
iii) income taxes (notes 5.11 and 29)
iv) accounting for defined benefit plan and compensated absences (notes 5.12 and 34)
Y v) depreciation / amortisation of operating fixed assets (notes 5.6 and 1 1)
vi) impairment of assets (notes 5.9 & 5.10)
rr 5 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

rt
The principal accounting policies applied in the preparation of lhese consolidaled financial statements are consistent with
previous year except for approved new revised accounting standards, which were effective from January 01, 2015 as set out
below.
5.1 Standards, interpretations and amendments to published approved accounting standards that are effective in the
curent year
!
ly IAS 27 Separate financial statements (Amendments) and IFRS 10 Consolidated Financial Statements: IFRS 10 - Consolidated
Financial Statements was made applicable from period beginning on or after January 01 , 2015 vide S.R.O 633(1y2014 dated July
10,2014 by SECP. The standard replaces the previous guidance on consolidation in IAS 27 Consolidated and Seperate Financial
! Statements. lt introduces a single model of assessing control whereby an investor controls an investee when il has the power,
Lt exposure to variable returns and the ability to use its power to influence lhe returns of the investee. The standard also includes
specific guidance on de-facto control, protective rights and the determination of whether a decision maker is acting as principal or
agent, all of which influences the assessment of control.
lt
J Accordingly, in the current year, lhe holding company classified inveslments in the following entities as investments in subsidiaries
in its separate unconsolidated financial statements:
t
- Alfalah GHP Investment Management Limiled
t - Alfalah GHP Value Fund
- Alfalah GHP lslamic Stock Fund
- Alfalah GHP Cash Fund
I
- Alfalah GHP lslamic Income Fund
However, the SECP through S.R.O 56(l) /2016 dated January 28, 2016, has directed that the requirements of consolidation under
section 237 of the Companies Ordinance 1984 and IFRS 10 'Consolidated Financial Statements' is not applicable in case of
investment by companies in mutual funds established under Trust structure. Accordingly, investments in Alfalah GHP Value Fund,
Alfalah GHP lslamic Stock Fund and Alfalah GHP Cash Fund have not been considered for consolidation in these Consolidated
Financial Statements for the year ended December 31 , 2015, as well as for the prior comparative period.
I
IFRS 11 'Joint Anangements' replaces IAS 31 'lnterests in Joint Ventures' wtrich requires all joint ventures to be equity accounted
v hereby removing the option in IAS 31 for proportionate consolidation. lt also removes the IAS 31 concept of jointly controlled
assels. The application of IFRS 11 did not result in identification of any associate as joint venture.
IFRS 12 Disclosure of interests in other entities: The standard prescribes additional disclosures around significant judgements
and assumptions met in determining whether an entity controls another entity and has joint control or significant influence over
another entity. The standard also requires disclosures on the nature and risks associated with interest in unconsolidated
structured entities. The applicability of this standard did not have an impact on these consolidated financial statements of the
Group, except for certain disclosures as provided in note 9.18 and 9.19.
tJ
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IFRS 13 'Fair Value Measurement' consoildates the guidance on how to measure fair value, which was spread across various
IFRS, into one comprehensive standard. lt introduces the use of an exact price, as well as exlensive disclosure requirements,
particulady the inclusion of non-financial inslruments into the fair value heirarchy. The application of IFRS 13 does not have an
impact on these consolidated financial statements of the Group except for cerlain disclosures as mentioned in, note 38.
There are certain other new and amended standards, interpretations and amendments that are mandatory for the Group's
accounling periods beginning on or after January 01, 2015 but are considered not to be relevant or do not have any significant
effect on the Bank's operations and are therefore not detailed in these consolidated financial statements.
5.2 Cash and cash equivalents
Cash and cash equivalents comprise of cash in hand, balances with treasury banks, balances with other banks in current and
deposit accounts, national prize bonds, any overdrawn nostro accounts and call lendings having maturity of three months or less.
,.v 5.3 Lendings to I borrowings from financial institutions
The holding company enters into transactions of repo and reverse repo at contracted rates for a specified period of time. These
are recorded as under:
Sale of securities under repurchase agreements
Securities sold subject to a repurchase agreement (repo) are retained in these consolidated financial statements as investments
and the counter party liability is included in borowings. The difference between the sale and contracted repurchase price is
accrued on a time proportion basis over the period of the contract and recorded as an expense.
Purchase of securities under resale agreements
Securities purchased under agreement to resell (reverse repo) are not recognised in these consolidated financial statements as
investments and the amount extended to the counter party is included in lendings. The difference between the purchase and
i contracted resale price is accrued on a time proportion basis over the period of the contract and recorded as income.
v
5.4 lnvestments
5.4.1 Classification
The Group classifies its investments as follows:
I Held for trading

hr
These are investments, which are either acquired for generating a profit from short-term fluctuations in market prices, interest rate
movements, dealers' margin or are securities included in a portfolio in which a pattern of short-term profit taking exists.
!
Y Held to maturity
These are investments with fixed or determinable payments and fixed maturities and the Bank has the positive intent and ability to
hold them till maturity.
g
Available for sale
These are inveslments, other than those in subsidiaries and associates, wtrich do not fall under the 'held for trading' and 'held to
maturity' categories.
Associates
Associates are all entities over which the Group has significant influence but not control. These are accounted for using the equity
method of accounting. The investmenl in associates are initially recognised at cosl and the carrying amount of investment is
increased or decreased to recognise the investor's share of the post acquisition profits or losses in income and its share of the
\, post acquisition movement in reserves.
V
lnvestments In mutual funds established under trust structure not consolidated as subsidiaries - Note 1.2.1
For the purposes of presentation, such investments have been disclosed as part of associates, apd accounted for at par with
associates using the equity method of accounting.
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5.4.2 Regular way contracts
All putchases and sales of investments that require delivery within the time frame established by regulation or market convention
are recognised at trade date, wtrich is the date at wtrich the Bank commits to purchase or sell the investments except for money
market and foreign exchange contracts which are recognised at settlement date.
5.4.3 Initial recognition and measurement

Investments other than those categorised as 'held for bading' are initially recognised at cost. Transaction costs associated with
the invesiment are included in cost of investments. Investments classified as 'held for trading' are initially recognised at fair value
and transaction costs are expensed in the profit and loss account.
5.4.4 Subsequent measurement
ln accordance with the requirements of State Bank of Pakistan" quoted securities other than those classified as 'held to maturity',
investment in associates are subsequently remeasured to market value. Surplus / (deficit) arising on revaluation of securities
classified as 'available for sale' is included in the statement of comprehensive income but is taken to a separate account shown in
the statement of financial position below equity. Surplus / (defrcit) arising on revaluation of quoted securities which are 'held for
trading' is taken to the profit and loss account. Investments clasified as 'held to maturity'are carried at amortised cost.
Unquoted equity securities, excluding investment in associates are valued at lower of cost and the break-up value. Break-up
value of equity securities is calculated with reference to the net assets of the investee company as per the latest available audited
financial stalements.
5.4.5 lmpairment
lmpainhent loss in respect of equity securities classified as available for sale, associates and held to maturity is recognised based
on management's assessment of objective evidence of impairment as a result of one or more events that may have an impact on
the estimated future cash flows of the investments. A sQnificant or prolonged decline in fair value of an equity investment below
its cost is also considered an objective evidence of impairmenl Provision for diminution in the value of debt securities is made as
per the Pludential Regulations issued by the State Bank of Pakistan. In case of impairment of available for sale securities, the
cumulative loss that has been recognised directly in surplus / (deficit) on revaluation of securities on the statement of financial
position below equity is removed there from and recognised in the profit and loss account. For investments classified as held to
maturity and investment in subsidiaries and associales, the impairment loss is recognised in lhe profit and loss account.
Gains or losses on disposal of investments during the year are taken to the profit and loss account.
5.5 Advances
Loans and advances
Loans and advances including net investment in finance lease are stated net of provision against non-performing advances.
Specific and general provisions against Pakistan operations are made in accordance with the requirements of the Prudential
Regulations issued by the State Bank of Pakistan from time to lime. The net provision made / reversed during the year is charged
to profit and loss account and accumulated provision is nettedoff against advances. Provisions pertaining to overseas advances
are made in accordance with the requirements of regulatory authorities of the respective countries. Advances are written off when
v there are no realistic prospects of recovery.
lslamic Financing and Related Assets
The Group provides lslamic financing and related assets mainly through Murabaha, ljarah, Diminishing Musharakah,
Musharakah, Running Musharakah, Salam, lstisna, and Export Refinance under SBP lslamic Export Refinance Scheme. The
purchases and sales arising under these arrangements are not reflected in these financial statements as such but are restricted
to the amounl of facility actually utilised and the appropriate pction of profit thereon. The income on such financings is recognised
in accordance with the principles of lslamic Shariah. The Group determines specific and general provisions against lslamic
financing and related assets on a prudent basis in accordance with the requirements of the Prudential Regulations issued by the
SBP. The net provision made lreversed during the year b chaged to profit and loss account and accumulated provision is netted
off against lslamic financing and related assets. lslamic finarrcing and related assets are written off when there are no realistic
prospects of recovery.
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7
Net Investment ln Finance Lease
Leases where the Group transfers substantially all the risks and rewards incidenlal to the ownership of an asset are classified as
finance leases. A receivable is recognised on commencement of lease term at an amount equal to the.present value of the
minimum lease payments, including guaranteed residual value, if any. Unearned finance income is recognised over the lerm of
the lease, so as to produce a conslant periodic return on the outstanding net investment in lease.
Y 5.6 Operating Fixed assets
Tangible assets
Operating fixed assets except office premises are shown at historical cost less accumulated depreciation and accumulated
impairment losses, if any. Historical cost includes expenditures that are directly attributable to the acquisition of the items. Office
premises (which includes land and buildings) are stated at revalued amount less accumulaled depreciation.
Depreciation is charged to income by applying the straight-line method using the rates specified in note 11.2 to these
consolidated financial stalements. The depreciation charge for the year is calculated after taking into account residual value, if
any. The residual values, useful lives and depreciation method are reviewed and adjusted, if appropriate, at each reporting date.
Depreciation on additions is charged from the date on which the assets are available for use and ceases on the date on vvhich
they are disposed off.
Maintenance and normal repairs are charged lo income as and when incurred. Subsequent costs are included in the asset's
carrying amount or are recognised as a separate asset, as appropriate, only when it is probable that future economic benetits
associated with the item will flow to the Bank and the cost of the item can be measured reliably.
Office premises are revalued by professionally qualified valuers with sufficient regularity to ensure that the net carrying amount
does not differ materially from their fair value.
Surplus arising on revalualion is credited to lhe surplus on revaluation of operating flxed assets account. Deficit arising on
subsequenl revaluation of operating fixed assets is adjusted against the balance in lhe above mentioned surplus account as
allowed under the provisions of the Companies Ordinance, 1984. The surplus on revaluation of operating fixed assets to the
extent of incremental depreciation charged on the related assets is transferred to unappropriated profit.
Gains and losses on disposal of operating fixed assets are taken to the profit and loss accounl except that the related surplus /
deficit on revaluation of operating fixed assets (net of defened taxation) is transfened directly to unappropriated profit.
lntangible assets
Intangible assets having a finite useful life are stated at cost less accumulated amortisation and accumulated impairment losses, if
any. Such intangible assets are amortised using the straight-line method over their estimated useful lives. The useful lives and
amortisation method are reviewed and adjusted, if appropriate at each reporting date. Intangible assets having an indefinite useful
life are stated at acquisition cost, less impairment loss, if any.
Goodwill
I
Goodwill arising on the acquisition represents the excess of the consideration transferred over interest in net fair value of the net
lr identifiable assets, liabilities and contingent liabilities of the acquiree. For the purpose of impairment testing , goodwill acquired in
a business combination is allocated to each of the CGUs, or groups of CGU, that is expected to benefit from the synergies of the
combination. Goodwill impairment reviews are undertaken annually or more frequently if events or changes in circumstances
indicate a potential impairment. The carrying value of goodwill is compared to the recoverable amount, which is the higher of
value in use and the fair value less costs of disposal. Any impairment is recognised immediately as an expense and is not
subsequently reversed.
5.7 Capltal work In progress
Capital work-in-progress is stated at cost less accumulated impairment losses, if any. All expenditure connected with specific
assets incuned during installation and construclion period are €nied under this head. These are transferred to specific assets as
and when assets become available for use.
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5.8 Non-current assets held for sale
The Group classifies a non-current asset (or disposal group) as held for sale if its carrying amount will be recovered principally
through a sale transaction rather than throqh continuing use.
A non-current asset (or disposal group) held for sale is carried at lhe lower of its carrying amount and the fair value less costs to
!
sell. lmpairment losses are recognised lhrough the profit and loss account for any initial or subsequent write down of the non-
Y current asset (or disposal group) to fair value less costs to sell. Subsequent gains in fair value less costs to sell are recognised to
the extent they do not exceed the cumulative impairment losses previously recorded. A non-current asset is not depreciated while
I
classified as held for sale or while part of a disposal group classified as held for sale.
Y
5.9 lmpairment
The carrying amount of assets is reviewed at each reporting date to determine whether there is any indication of impairment of
any asset or group of assets. lf any such indication exists, the recoverable amount of such assets is estimated and impairment
losses are recognised immediately in the consolidated financial state{ilents. The resulting impairment loss is taken to the profit
and loss account except for impairment loss on revalued assets, which is adjusted against related revaluation surplus to the
extent that lhe impairment loss does not exceed the surplus on revaluation of that asset.
5.10 ljarah Assets (IFAS 2)
ljarah assets are stated at cost less depreciation and are disclosed as part of 'lslamic financing and related assets'. The rental
received / receivable on ljarah under IFAS 2 are recorded as income / revenue.
Depreciation
The group charges depreciation from the date of recognition of ljarah of respective assets to Mustajir. ljarah assets are
depreciated over the period of ljarah using the straight line method.
ljarah Rentals
ljarah rentals outstanding are disclosed in 'lslamic financing and related assets' on the Statement of Financial Position at
amortized cost.
lmpairment
lmpairment of ljarah assets is determined on the same basis as that of operating fixed assets. lmpairment of Uarah rentals are
determined in accordance with the Prudential Regulations of SBP. The provision for impairment of ljarah Rentals is shown as part
of 'lslamic financing and related assets'.
ii 5.11 Taxation
Y
lncome tax expense comprises current and deferred tax. Income tax expense is recognised in the profit and loss account except
to the extent that it relates to items recognised directly in other comprehensive income in which case it is recognised in statement
t of comprehensive income.
L,
Current
Provision for current taxation is based on laxable income at the cunent rates of laxation after taking into consideration available
tax credit and rebates, if any. The charge for cunent tax also includes adjustments, where considered necessary relating to prior
years, which arises from assessments / developments made during the year.
Deferred
Deferred tax is recognised using the balance sheet liability method on all temporary differences arising between the carrying
amounts of assets and liabilities for financial reporting purposes and amounts used for the taxation purposes. The amount of
I deferred tax provided is based on the expected manner of realisation or settlement of the carrying amounts of assets and
Y liabilities using the tax rates enacted or substantively enacted at the reporting date. A deferred tax asset is recognised only to the
extent that it is probable that future taxable profits will be available and the credits can be utilised. Deferred tax asset is reduced to
the extent that it is no longer probable that the related tax benefits will be realised.
Deferred tax liability is not recognised in respect of taxable temporary differences associated with exchange translation reserves
of foreign branches, where the timing of the reversal of the temporary difference can be controlled and it is probable that the
! temporary differences will not reverse in the foreseeable future.
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5.12 Employee benefits
a) Defined benefit plan
The holding company operates an approved funded gratuity scheme-covering

eligible employees whose period of employment
wilh the holding company is five years or more. contributions to
the fund arehaol on the basis of actuarial recommendations.
Projected Unit credit Method is used for the actuarial valuation.
Actuarial gains and losses are recognised immediately in other
comprehensive income' Gratuity is payable to staff on completion
of the prescribed qualifying period of service under the scheme.
The subsidiary - Alfalah securities operates an unfunded gratuity

scheme for all its employees who have completed the qualifying
period as defined in the scheme- The cost of providinj
benefits under the defined benefit scheme is determined using the
"Projected Unit credit Method'. Actuarial (remeasurement) gains
and losses are recognised as income or expense in fulr in the
year in which they occur in other comprehensive income.
b) Defined contribution plan
The Holding Company operates an approved provident fund scheme

for all its regular permanent employees, administered by the
Trustees' Equal monthly contributions are made both by rhe holding
company and its employees to the fund at the rate of g.33%
of the basic salary in accordance with the terms of the scheme.
The subsidiary - Alfalah GHP lnvestment Management Limited operates

an approved funded contributory provident fund for all its
permanenl employees to which equal monthly contributions are made
both bythe company and the employees at the rate of 10%
of basic salary.
c) Compensated absences
The Holding Company recognises the liability for compensated absences

in respect of employees in the period in which these are
eamed up to the balance sheet date. The provision has been recognised on
the basis of acluarial recommendations.
d) Employees Stock Option Scheme
The grant date fair.value of equity settled share based payments to employees,
determined as option discount as allowed by
Public companies (Employee stock option schemel nutes 2001, is recolnized
as employee compensation expense on a
straight line basis over the vesting period with a consequent credit to equity
aJemployee stock tption compensation reserve. The
defened employee stock option cost is shown as a deduction from empioyle
stock ojtion compensation reserye. option discount
means the excess of market price of the share at the date of grant of an option
under a scheme over exercise price of the option.
when an unvested option lapses by virtue of an employee not conforming to the vesting
conditions after recognition of an
employee compensation expense in the profit and loss actount, such employee compensatLn
expense is reversed in the profit
and loss account equal to the amortized portion with a conesponding effeci to-employee
stock option compensation reserve equal
to the un amortized portion.
when a vested option lapses on expiry of the exercise period, employee compensation
expense already recognized in the profit
or lossis reversed with a corresponding reduction lo employee stock option
compensation reserve.
When the options are exercised' employee stock option compensation reserve
Lr capital and share premium. An amount equivalent to the face value of related
relating to these options is lransferred to share
shares iJtransferred to share capital. Any amount
over and above the share capital is transferred lo share premium.
5.13 Non-banking assets acquired in satlsfaction of claim
Non-banking assets acquired in satisfaction of claim are stated at the

lower of the claim amount ancl the markel value of assets
acquired at the time of acquisition. The Bank carries out periodic valuation
of these assets and any decline in their value below
the recognised amount is charged to the profit and loss account.
5.14 Borrowings / deposits and their cost

I
a) Borrowings / deposits are recorded at the proceeds received.
b) Borrowing costs are recognised as an expense in the period in wtrich

these are incurred using effective mark-up / interest
rate method to the extent that they are not directly attributable to the
acquisition of or construction of qualifying assets.
Borrowing costs that are directly attributable to the acquisition, construction
or production of a qualifying asset (one that
takes a substantial period of time to get ready for use or sale) are capitalised as part
of the cost of that asset.
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5.15 Deposits - lslamic Banking
Deposits are generated on the basis of tnlo modes i.e. Qard and Modaraba.
Deposits taken on Qard basis are classified as 'Current Account' and Deposits generated on Modaraba basis are classified as
'Savings Account' and'Fixed Deposit Accounls'.
1
Y No profit or loss is passed on to current account depositors.
Profits realised in investment pools are distributed in pre-agreed profit sharing ratio.
I
L. Rab-ul-Maal (Usually Customer) share is distributed among depositors according to weightages assigned at the inception of profit
calculation period.
Mudarib (Bank) can distribute its share of profit to Rab-ul-Maal upto a specified percentage of its profit.
Profits are distributed from the pool so the depositors (remunerative) only bear the risk of assets in the pool during the profit
calculation period.
Asset pools are created at the Bank's discretion and the Bank can add, amend, lransfer an asset to any other pool in the interests
of the deposit holders.
In case of loss in a pool during the profit calculation period, the loss is distributed among the depositors (remunerative) according
. to their ratio of lnvestments.
5.16 Provisions
Provision for guarantee claims and other off balance sheet obligations is recognised when intimated and reasonable certainty
exists for the Bank to settle the obligation. Expected recoveries are recognised by debiting the customer's account. Charge to the
profit and loss account is stated net-of expected recoveries.
Other provisions are recognised when the Bank has a present, 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 a reliable estimate of lhe amount can be made.
Provisions are reviewed at each reporting date and are adjusted to reflect the current best estimate.
5.17 Acceptances
Acceptances comprise undertakings by the Bank to pay bills of exchange drawn on customers. The Bank expects most
acceptances io be simultaneously settled with the reimbursement from the customers. Acceptances are accounted for as off
balance sheet transactions and are disclosed as contingent liabilities and commitments.
5.18 Revenuerecognition
Y
Advances and investments
t'
Mark-up income on loans and advanies, debt securities investments and profit on murabaha and musharika financing are
tr recognised on a time proportion basis. Where debt securities are purchased at a premium or discount, those premiums /
discounts are amortised through lhe profit and loss account over the remaining maturity, using lhe effective yield meihod.
Dividend income is recognised at the time when the Group's right to receive the dividend has been established.
Lease financing
Financing method is used in accounting for income from lease financing. Under this method, the unrealised lease income (excess
of the sum of total lease rentals and estimated residual value over the cost of leased assets) is deferred and taken to income over
the lerm of the lease period so as to produce a constanl periodic rate of return on the outstanding net investment in the lease.
Gains / losses on terminalion of leased contracts, documentation charges, front end fee and other lease income are recognised
as income when they are realised.
Unrealised lease income and mark-up / retum on non-performing advances are suspended, where necessary, in accordance with
the requirements of the Prudential Regulations of the State Bank of Pakistan and recognised on receipt basis.
ljarah income is recognised on an accrual basis as and when the rental becomes due.
Morabaha income is recognised on deferred income basis.
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Fee, commission and brokerage
Fee, commission and brokerage income except income from guarantees are accounted for on receipt basis. Gommission on
guarantees is recognised on time proportion basis.
Other income is recognised on accrual basis.
5.19 Foreign currency translation
Functional and presentation currency

t
V
Items included in these consolidated financial statements are measured using the currency of the primary economic environment
in which the Bank operates.
Transactions and balances
Transactions in foreign currencies are translated into Pakistani rupees at the exchange rales prevailing on the transaction date.
,i
Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end
: I
exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the profit and loss account.
Forward conlracts other than contracts with the State Bank of Pakistan relating to foreign currency deposits are valued at forward
rates applicable to the respective maturities of the relevant foreign exchange contract.
Fonivard purchase contracts with the State Bank of Pakistan relating lo foreign currency deposits are valued at the spot rate
prevailing on the reporting date. The forward cover fee payable on such contracls is amortised over the term of the contracts.
Commitments
Commitments for outstanding forward foreign exchange contracts are disciosed at conlracted rates. Contingent liabilities /
commitments for letters of credit and letters of guarantee denominated in foreign currencies are expressed in rupee terms at the
exchange rates ruling on the reporting date.
Foreign operations
Assets and liabilities of foreign operations are translated into rupees at the exchange rate prevailing at the reporting date. The
results of foreign operations are translated at average rate of exchange for the year. Translation gains and losses arising on
revaluations of net investment in foreign operations are taken to Exchange Translation Reserve in the statement of
comprehensive income. These are recognised in the profit and loss account on disposal.
5.20 Derivative financial instruments
Derivative financial instruments are initially recognised at fair value on the date at which the derivative contract is entered into and
subsequently remeasured at fair value using appropriate valuation techniques. All derivative financial instruments are carried as
assets where fair value is positive and as liabilities where fair value is negative. Any changes in the fair value of derivative
lr financial instruments are taken to the prolit and loss account.
Li
s.21 Off-setting
Financial assets and financial liabilities are off-sel and the net amount reported in these consolidated financial statements only
when there is a legally enforceable right to set-off the recognised amount and the Bank intends eilher 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 is reported in the tinancial statements.
5.22 Dividend and appropriation to reserves
Dividend and approprialion to reserves, except appropriations which are required under the law, after the reporting date, are
recognised in the Bank's unconsolidated financial statements in the year in which these are approved.
5.23 Earnings per share
The Group presents basic and diluted earnings per share (EPS) for its shareholders. Basic EPS is calculated by dividing the profit
or loss attributable to ordinary shareholders of the group by the weighted average number of ordinary shares outstanding during
.the year. Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average
number of ordinary shares outstanding for the effects of all dilutive potential ordinary shares, if any.
k- trra-
I
t2
5.24 Segment reportlng
A segment is a distinguishable component of the Group that is engaged either in providing product or services (business
segment), or in providing products or services within a particular economic environment (geographical segment), which is subject
to risks and rewards that are different from those of other segments. The group's primary format of reporting is based on business
segments.
a) Buslness segments
Y
Trading and sales
It includes fixed income, equity, foreign exchanges, commodities, credit, funding, own position securities, lending and repos,
g brokerage debt and prime brokerage.
Retail banking
It includes retail lending and deposits, banking services, trust and estates, private lending and deposits, banking service, trust
and estates investment advice, merchant / commercial / corporate cards and private labels and retail.
!
Commerclal banklng
U
Commercial banking includes project finance, corporate finance, real estate, export finance, trade finance, factoring, leasing,
lending, guarantees, bills of exchange and deposits.
I
Gorporate banking
Corporate banking includes services provided in connection with mergers and acquisition, underwriting, privatisation,
sqcuritisation, research, debts (government, high yield), equity, syndication, IPO and secondary private placements.
Retall Brokerage
It includes stock brokerage, investment counselling & fund placements mainly conducted though the subsidiary Alfalah
Securities (Private) Limited.
Asset Management
It includes asset management activities mainly through the subsidiary Alfalah GHP Investment Management Limited.
b) Geographlcalsegments
' The group operates in three geographical regions being:
- Pakistan
Asia Pacilic (including South Asia)
v - Middle East
Note 2015 2014
(Un-audited)
I. (Rupees In'000)
ir 6 CASH AND BALANCES WITH TREASURY BAl.lKS
ln hand
Local cunency
(including in transit 2015: Rs. 6 million, 2014: Rs. 21 million) 8,972,003 10,637,684
Foreign cunencies
(including in transit 2015: Rs. 7 million, 2014: Rs. 1 million) 2,377,778 2,949,564
Wlth State Bank of Paklstan In
Local cunenry current accounts 6.1 2A,s93,524 9,203,721

Foreign currency cunent accounts 6.2 3,232,623 2,801,243
Foreign curency deposit accounts 6.3 7,224,768 6,205,5',t2
With other central banks In
Foreign curency curent accounts 6.4 5,933,513 5,806,368

' Foreign cur€ncy deposit accounts 6.4 656,196 573,530
With Natlonal Bank of Paklstan ln
Local currency curent account 13,305,048 12,281,353
:
National Prize Bonds 73,374 56,670
K{Ac- 62,368,827 50,515,645

l3
6.1 This includes statutory liquidity reserves maintained with the SBP under Section 22 of the Banking Companies Ordinance, 1962.
6.2 As per BSD Circular No. 9 dated December 3, 2OO7, cash reserve of 5% is required to be maintained with the State Bank of
Pakistan on deposits held under the New Foreign Currency Accounts Scheme (FE-25 deposits).
6.3 Special cash reserve of 15% is required to be maintained with the State Bank of Pakistan on FE-25 deposits as specified in BSD
Circular No. 14 dated June 21, 2008. Profit rates on these deposits are fixed by SBP on a monthly basis. The State Bank of
v Pakistan has not remunerated these deposit accounts during the year.
6.4 Deposits with other central banks are maintained to meet their minimum cash reserves and capital requirements pertaining to the
U foreign branches of the Holding Company.
Note 2015 2014

(Un'audited)
Y (Rupees in '000)
BALANCES WITH OTHER BANKS
t,
ln Pakistan
U
On cunent accounts 618,033 753,987
On deposit accounts 7.1 25,625 1,310,082
! Outside Pakistan
On current accounts 7.2 10,956,696 7,005,797
On deposit accounts 7.3 4,978,784 3,264,s02
16,583,138 12,334,368
7.1 This represents funds deposited with various banks at profit rates ranging from 3.00% to 5.75% per annum (2014:6.000/" to 9.50%
per annum).
7.2 This includes amount held in Automated Investment Plans. The balance is curent in nature and on increase in the balance above
a specified amount, the Holding Company is entitled to eam interest from the correspondent banks at agreed upon rates.
7.3 This includes placement of funds generated through foreign cunency deposits scheme (FE-25), at interest rates ranging from
1.00% to 6.00% per annum (2014: 0.10% to 6.25% per annum) having maturities upto March 2016 (2014: May 2015).
Note 2015 2014

(Un-audited)
(Rupees in'000)
LENDINGS TO FINANCIAL INSTITUTIONS
U
Call money lendings 8.1 15,265,899 3,528,957
Bai Muajjal 8.2 38,362,971 14,784,528
__q9,628,8?9_ _l-9,31 3,485_
g
8.1 These represent lendings to financial institutions at interest rates ranging from 0.40% to 12.00% per annum (2Q14: 2.83o/o to
12.50o/o per annum) having maturities upto November 2016 (2014: November 2016).
8.2 This represents Bai Muajjal agreement entered into with State Bank of Pakistan (SBP) and Ministry of Finance, Govemment of
Pakistan through SBP, whereby the Holding Company sold Sukuks having carrying value amounting to Rs. '12,360 million and Rs.
26,003 million respectively on defened payment basis. The rates of retum on these transactions are upto 8.26% per annum and
5.99% per annum respectively. They are due to be matured by March 2016 and November 2016 respectively.
2015 2014
(Un-audited)
(Rupees in'000)
8.3 Partlculars of lendlngs to financlal Institutlons
v
In local cunency 38,612,971 16,884,528
In foreign curencies 15,015,899 1,428,957
53,628,870 18,313,485
kt$@
:'
t4
9 INVESTMENTS. NET
9.1 Investments by types

2014 {Un-auditedl
by
Held civen as Total
by
Held Given as
Tolal
Bank collateral Bank collateral
Held tor trading securities

Markel Treasury Bills 13,480,197 I | 13.480,197 |
15,194,3s2 | 1s,194,352
Pakistan Investment Bonds 2,423,862 | | 2.123,862 |
2,90s,s28 | 2,905,528
Overseas Bonds 2,990,933 | I 2.990,933 |
2,193,796 | 2.193.796
Sukuk Bonds 1,002,278f | 1.002.278
Fully paid up ordinary shares
/ units - Listed 197.998 1 - | 'r97
19,092.990 19.092.990 21,295.954 21.295.954
Avallable for sale securities

Market Treasury Bills 78,391,8791 494,5631 78,886,442 44,998,239 102p62 45,101,201
Pakistan Investmenl Bonds 28,914,7O4 | 128,577,363 | 157.492,067 85,004,793 30,150,519 1't5,155,312
/ units - Listed s,000,7s3 | | s.o00,753 4,729,456 4,729,456
/ units - Unlisted 4A54223 | | 4.!.il,223 4,454,223 4,454,223
Term Finance Certificates 829,s94 | I 829,s94 1,234,849 1,234,849
Preference Shares - Listed 108,835 | I 108.83s 108,835 108,835
Preference Shares - Unlisted 32s,000 | | 32s,000 340,000 340,000
Pakislan Euro Bonds 2,409,043 1 - | 2.409.043
Overieas Bonds 4,804,1s9 | | 4.8(X,1s9 3.566.942 3.566.942
Sukuk Bonds
158,518,632 129,071,926 287,590,558 185,954,140 30,253,481 216,207,621
Held to maturity securitles

Market Treasury Bills 1,193,121 | | 1,193,121
Pakistan Investment Eonds 66,180,991 | I 66.180,991 65,769,574 I | 65,769,574
Term Finance Certificates 524,266 | | s24,266 s24,266 | | 524,266
Pakistan Euro Bonds 3,347,785 | | 3.347.785 3,176,300 | | 3,176,300
Overseas Bonds 7,920,ss7 I | 7p20,ss7 8,31s,367 | | 8,31s,367
Sukuk Bonds 4.230.816 I - | 4230.816
82,204,415 822U.415 83,188,770 83.188,770
lnvestments ln Assoclates and Mutual

Funds established under Trust Structure
not consldrered for consolidation
Alfalah Insurance Limited 241,560 241,560 213,069 I | 213,069
Sapphire Wind Power Company Limited 1,006,054 1.006,054 342,216 | | 342,216
Alfalah GHP Money Market Fund 54,415 54,415 s43,98s | | 543,985
Alfalah GHP Income Multiplier Fund 283,699 283,699 386,907 | | geo,goz
Alfalah GHP Sovereign Fund 423,475 423,475 270,828 | | 270,828
Appollo Pharma Limited 802,1 30 802,130
Alfalah GHP lncome Fund 1 13,036 1 13,036 93,164 | | 93,164
Alfalah GHP lslamic Income Fund 6,384 6,384 44,992 | | 44,992
Alfalah GHP Value Fund 187,684 187,684 174,470 | | 174,470
Alfalah GHP lslamic Stock Fund 3s9,958 359,958 328,011 | I 328,011
Alfalah GHP Cash Fund 1
4,019,313 ,3p19,313 3,446,270 3,446,270
Investments at cost 263,835,350 129,071,926 3C2_n7,276 293,885,134 30,253,481 324,138,615
Provlslon for dimlnution

In the value of Investrnents 9.21 (s,s19,811) (5519,811) (s,390,757) (s,390,7s7)
Investmenb (net of provisions) 258,315,539 129,071,926 387387.465 288,494,377 30,253,481 318,747,858
Surplus on revaluation of held for

trading securities - net 229,063 229,063 160,098 160,098
Surplus on revaluation of available

for sale securilies - net 9,377,825 522,095 9,899,920 6,007,268 45,648 6,052,916
Total Investments 267.922.127 129.594.021 397516.'148
9.1 .1 Market value of held to maturity securities is Rs. 83,866 million (2014: Rs. &5,048 million) excluding non-govemment overseas
bonds.
Kfhc.-
l5
9.2 Strategic Investments
Strategic investments are those which the Bank makes with the intention of holding them for a long term duration and
are marked as such at the time of investment. Disposals of such investments can only be made subject to the
fulfilment of the requirements prescribed by the SBP. Further, as per the SBP instructions in BPD Circular Letter No.
16 of 2006 dated August 01, 2006, investments marked as strategic have a minimum retention period of 5 years from
the original purchase date. However, these can be sold before the stipulated period with the prior permission of the
SBP.
Strategic Investments are restricted to and lhe same as those reflected in the Bank's separate financial statements
and do not include investments resulting by way of consolidation of holding through subsidiaries.
2015 2014
(Un-audited)
9.3 Investments by segments (Rupees in'000)
Federal Government Securities

- Market Treasury Bills e.s 1rrc66ssrl 161/88€?4-]
- Pakistan Investment Bonds e.6 | 226,oe6,s20 | | 183,s30,414
- Overseas Government Bonds e.7 11,7se,14sll
| 31,0s6,23e11 40,38e,250
11,353,s83
|
- Sukuk Bonds e.8 | s,7s6,828

1
- Pakistan Euro Bonds 9.9 | 11 3,176,300

1
367,115,775 300,238,221
Fully Paid up Ordinary Shares / Preference Shares /
Units / Certificates
- Listed companies / mutual funds e.1o I qlra?sl ll qrrr-4s6
- Un-listed companies s.11 | 4,4u,22311 4,454,2231
1
- Preference Shares - Listed s12 | 108,835 11 108,835

- s.13 | 325,00011 340,000
1
Preference Shares - Unlisted 1
10,086.809 9,632,514
Term Finance Certificates, Debentures, Bonds,
Notes and Participation Term Certificates
- Listed TFCs 9.14
I ,rB4o I l-s4r-oao I
- Un-listed TFCs 9.15
| 1,253,s20
| I 6,33e,e73
1,210,035
|
- Sukuk Bonds 9.16
| 6,41s,01s
I | 2,722,522 |
- Overseas Bonds 9.17 I 3,s16,s0o | | |
11,685,379 10,821,610
lnvestments in Associates and Mutual Funds established
under trust structure not considrered for consolidation 9.18 4,019,313 3,446,270
Total investments at cost 392,907.276 3r4J38^615
Provision for diminution in the value of investments 9.21 (5,s19,811) (5,3e0,757)

Investments (net of provisions) 387,387,465 318,747,858
Surplus on revaluation of held for trading securities - net 9.23 229.063 160,098
Surplus on revaluation of available for sale securities - net 20.2 9,899,920 6,052,916
Total investments -3s?si6t44s-- W

9.4 Investments include certain approved / government securities which are held by the Holding Company to comply with
the Statutory Liquidity Requirement determined on the basis of the Holding Company's demand and time liabilities as
set out under section 29 of the Banking Companies Ordinance, 1962.
9.5 Market Treasury Bills are for the periods of three months, six months and one year. The effective rates of profit on
. Market Treasury Bills range between 6.26% to 7 .99o/o pet annum (2014:9.42o/o to 9.92% per annum) with maturities
upto October 2016 (2014: December 2015).
9.6 Pakistan Investment Bonds (PlBs) are for the periods of three, five, seven, ten years and fifieen years. The rates of
profit range from 8.75% lo 12% per annum (2014:9.00%to 12.00% per annum) with maturities ftom May 2016 to
July 2022 (2014: July 2015 to July 2024). These also include PlBs having face value of Rs. 35 million (2014: Rs. 35
million) pledged with the National Bank of Pakistan as security to facilitate Telegraphic Transfer discounting facility.
VQy.c,-
l6
9.7 These represent Overseas Government Bonds issued by the Government of Bahrain, lhe Governmenl of Kazakhstan, the
Government of Afghanistan, the Government of Bangladesh, the Government of Mexico and the Government of lndonesia
amounting to USD 5 million (2014: USD 5 million), USD 3 million (2014: USD 3 mi[ion), AFN 1,214 miflion (2014: AFN 2,414
million)' BDT 6,605 million (2014: BDT 4,932 million), EUR 0.5 million (2014: nil) and EUR 2.OO miilion (2014: nit) respectivety. The
rates of profit on Govemmenl of Bahrain bond is 5.507o (2014: 5.50%), Government of Kazakhstan bond is 3.Bg% (2014: g.ggy")
and Government of Afghanistan bond ranging from 1.80% to 6.70% per annum (2014: 3.56% to 7.10o/o per annum), Government
of Bangladesh bonds carry profit ranging from 8.50% to 12.48o/o per annum (2014: 8.57% to 12.SSo/o per annum), Government of
Mexico bonds is 1.63% (2014: nil) while Government of Indonesia bonds is 3.38% (2014: nil). The bonds are due to mature by
March 2020 (2014: March 2020), October 2024 (2Q14: October 20241, December 2016 (2014: December 2015), November 203i
(2014: November 2034), March 2024 (2014: Nit) and Juty 2025 (2014: Nit) respectivety.
9.8 These represent sukuk bonds of Rs. 1,790 million (2014: Rs. 2,200 million) issued by Water and Power Development Authority
(WAPDA) for a period of eight and ten years, ijarah sukuk of Rs. 27,451 million (2014: Rs. 36,410 miilion) issued by the State Bani
of Pakistan for a period of three years and ijarah sukuk of USD 17.70 million (2014: USD 17.70 million) issued by the Government
of Indonesia, the Government of South Africa and the Government of Pakistan. The rates of profit on these bonds range between
6.78% to 7.59o/o per annum (2014: 9.47% to 9.98% per annum), between 5.89% to 6.15% per annum (2014: 9.47% to 9.98% per
annum) and between 3.90% to 6.75% per annum (2014: 3.90% to 6.75% per annum) respectively. These sukuk bonds are due to
mature by October 2021 , December 20'18 and September 2024 respectively.
9.9 These represent Pakistan Euro Bonds of US Dollar 55.05 million (2014: US Dollar 32.05 million) issued by the Government of
Pakistan. These bonds carry interest between 7 .13o/o to 8.25% per annum (2014: 7 j3% to 7 .2|o/o per annum) with maturities upto
September 2025 (2014: April 2019).
9.10 Particulars of investments in listed companies / mutuat funds include the following:
2015. 2014 2015 2014

(Un-audited) (Un-audited)
(Number of shares / (Rupees in'000)
certificates / units)
MUTUAL FUNDS
1,815,575 Meezan Balanced Fund - 5,894
972,919 Meezan lslamic Income Fund - 50,000
24,669,055 NAFA Income Opportunity Fund - 250,805
15,000,000 Pak Oman Advantage Fund - 150,000
600,000 Pak Oman Advantage lslamic Inmme Fund - 30,000
580,218 Al-Ameen lslamic lncome Fund - 50,000
OIL AND GAS

800,000 1,223,100 Oil and Gas Development Corporation Limited 110,368 31 1 ,966
655,200 980,050 Pakistan Oilfields Limited 203,635 454,490
1,125,000 2,179,000 Pakistan Petroleum Limited 142,597 465,706
955,000 976,400 Pakistan State Oil Company Limited 350,923 363,591
213,000 163,100 Attock Petroleum Limited 113,732 88,078
CHEMICALS
1,948,333 1,948,333 Agritech Limited ( Note 9.15.1) 15,100 22,737
1,144,600 700,000 Engro Corporation Limited 296,555 134,075
540,500 2,400,000 Fatima Ferlilizer Company Limited '14,290 60,544
1,250,000 518,700 Fauji Fertilizer Company Limited 162,897 59,514
2,000,000 659,000 Fauji Bin Qasim Limited 111,594 27,629
CONSTRUCTION AND MATERIALS

750,000 Attock Cement Company Limited 138,493
2,250,000 954,500 D G Khan Cement Limited 285,827 83,384
't,000,000
828,500 Lucky Cement Limiled 356,351 381,839
1,750,000 Amreli Steels Limited 89,250
REAL ESTATE
71,003,617 Dolmen City Real Eslate lnvestment Trust (REIT) 781,040
PERSONAL GOODS
1,090,100 800,000 Nishat Mills Limited 19,233
1 97,493
153,750 Al Saheer Corporation Limited 9,593
kf na"
t7
2015 2014 2015 2014

(Number of shares / (Rupees ln'000)
certificates / units)
ELECTRICITY
s,391,000 4,550,000 The Hub Power Company Limited 424,458 249,590
2,325,000 1,600,000 Kot Addu Power Company Limited 175,968 98,997
4,475,000 5,767,000 Nishat (Chunian) Power Company Limited 147,806 190,480
2,650,000 5,422,500 Nishat Power Company Limited 111,650 164,780
3,703,706 2,203,706 Engro Powergen Qadirpur Limited 126.735 66,283
TELECOMMUNICATION
250,000 Pakistan Telecommunication Company Limited 4,008
BANKS
841,700 510,000 Allied Bank Limited 83,782 56,100
5,449,000 7,737,700 Bank Al Habib Limited 220,770 304,288
925,000 435,700 MCB Bank Limited 230,466 121 ,068
1,300,000 1,710,000 United Bank Limited 210,949 274,133
700,000 566,200 Habib Bank Limited 145,681 1 1 5,992
1,800,720 First Dawood lnvestment Bank Limited (note 9.13.'l) 15.000
F]NANCIAL SERVICES
11,865 11,865 Visa Inc.
_5,1e8Jll_ _L129,456
9.ll Investments in unlisted companies
2015 2014 2015 2014

(Number of shares) (Rupees in'000)
572,531 572,531 Pakistan Export Finance Guarantee Agency Llmited 5,725 5,725
Chief Executive: Mr. S.M. Zaeem
Break-up value per share: Rs. 0.5
Date of financial statements: June 30, 2010 (Audited)
Society for Worldwide Interbank Financial

24 24 Telecommunication 4,096 4,096
Chief Executive: Mr. Gottfried Leibbrandl
Break-up value per share: Rs. 425,866 (2012: Rs. 330,035)
Date of financial statements: December 31 , 2013 (Audited)
5,000,000 5,000,000 Al-Hamra Avenue (Private) Limited 50,000 50,000

Chief Executive: Mr. Habib Ahmed
Date of financial statemenls: June 30, 2010 (Un-audited)
319,054,124 319,054,124 Warid Telecom (Private) Limited (Related party) note 9.11.1 4,366,796 4,366,796
Chief Executive: Mr. Muneer Farooqui
Break-up value per share: Rs. 1.52 (2014: Rs. 2.19)
Date of financial statemenls: June 30, 2015 (Audited)
4,007,383 4,007,383 Pakistan Stock Exchange Limited (PSX) 27,606 27,606

(formerly Karachi Stock Exchange (note 9.11.2))
Managing Director: Mr. Munir Kamal
Date of financial statements: June 30, 2015 (Audited)
4,454,223 4,454,223
9.11.1 During the year, the Holding Company entered into an acquisition agreement dated November 26, 2015 with lnternational Wireless
Communications Pakistan Limited and Pakistan Mobile Communications Limited in respect of sale of these shares. The
transaction has not yet been completed.
Le na^
l8
9.11.2 This represents shares of Pakistan Stock Exchange Limited (PSX) (formerly Karachi Stock Exchange) held by Alfalah Securities
(Private) Limited acquired in persuance of corporisation and demutualization of PSX as a public company limited by shares. As per
the anangements, the authorized and paid-up capital of PSX is Rs. 10 billion and Rs. 8.015 billion respectively with a par value of
Rs. 10 each. The paid-up capital of PSX is equally distributed among 200 members (term as initial shareholders of exchange after
corporatization) of PSX by issuance of 4,007,383 lo each initial shareholders in the following manner:
'40 % ot the total shares allotted (i.e. 1,602,953 shares) are transferred in the House Account of Central Depository Company of
- Pakistan Limited (CDC) to each initial shareholder.
- 60% of the total shares (i.e. 2,404,430 shares) have been deposited in a sub-account in Company's name under PSX's
participant lD with CDC wttich will remain blocked until they are divested to strategic investor(s), general public and financial
instilution.
9.12 Investments in preference shares - Listed
2015 2014 2015 20't4

10,883,486 10,883,486 AgritechLimited 108,835 108,835

Chief Executive: Mr. Muhammad Khalid Mir
Redemption: Any time after the issuance
of preference shares
Break-up value per share: Rs. 1 .85 (2013: Rs. 9.83)
Date of financial statements: December 3'l,2014 (Audited)
__l_99335_ _rc!e5_
9.13 Investments in preference shares - Unlisted
20't5 2014 2015 2014

(Number of shares)
120,000,000 120,000,000 Silk Bank Preference Shares 300,000 300,000

Chief Executive : Mr. Azmal Tarin
Redemption:
Put Option: The Holding Company has an option to sell on
the expiry of 3 years, its outstanding shares to Arif Habib
Corporation Limited at strike price of Rs. 3.70 per share.
Call Option: Silkbank is entitled to exercise call option after
lhe end of first year from date of issue till the expiry of 3
yea-rs at strike price ranging from Rs. 2.85 to Rs. 3.7 per
share. Subsequent to the year ended December 31 , 201 5,
Silkbank excercised its right to call the preference shares
I
vide it's letter dated January 26,2016 at a strike price of Rs.
3.66 calculated in accordance with lhe agreement entered
into between the Bank and the issuer.
Date of financial stiatements : September 30, 2015 (Unaudited)
(Paid-up value of each share is Rs. 2.50)
1,500,000 First Dawood Investment Bank Limlted (note 9.13.1) 15,000

Chief Executive: Mr. Abu Khursheed Muhammad Arif
Redemption: Preference dividend @ 4Vo on cumulative
basis and redeemable at par after 5 years.
Break-up value pershare: Rs. 1.23 (2014: Rs.0.89)
Dale of financial statements: June 30,2015 (Audited)
2,500,000 2,500,000 Trust Investment Bank Llmited 25,000 25,000

Chief Executive: Mr. Ahsan Rafique
Redemption: Any time after the issuance
of preference shares
Break-up value pershare: Rs. (20.34) (2014: Rs. (18.1))
Date of financial statements: June 30, 2015 (Audiled)
325,000 340,000
I
9.13.1 During the year, the preference shares of First Dawood Investment Bank Limited were converted into ordinary shares at ratio of
1"1.2
klqq.-
l9
9.14 Particulars of Term Finance Certificates - Listed 2o'ts 2Ot4

(Un-audited)
(Rupees In'000)
Askarl Bank Limited (3rd lssue) - 449.iOO
Nil (2014: 90,000) certificates of Rs. 5,000 each
NIB Bank Limited - (2nd lssue) 99,940 99,980
20,000 (2014: 20,000) cerrificates of Rs. 5,000 each

up:
Mark Average six months KIBOR + 115 basis points per annum with no floor and cap
Redemption: The TFC is structured to redeem 0.3 percent of principal semi-annually in the first
ninety months followed by remaining 99.37% on maturity at the end of the ninety
sixth month. The repayment obligations of the issuer pursuant to the TFCs
unsecured and sub-ordinated to all other financial obligations of the issuer.
Maturity: June 2022
Rating: A+ (PACRA)
Chief Executive: Mr. Atif Bokhari
--99310_ _-149080_
9.15 Particulars of Term Finance Gertificates - Unlisted
Askari Bank Limited 99.960 100.000
20.000 (2014: 20.000) certificates of Rs. 5.000 each

up:
Mark Average six months KIBOR plus 120 basis points per annum
Redemption: TFC is structured to redeem 0.36% of the issue amount during the tenor of the issue
with 99.64% of the issue amount in year ten in 2 equal semi annual instalments of
49.82Yo each. The TFCs shall be sub-ordinated to the payment of the principal and
profit to all other indebtness of the issuer including deposits, and are not redeemable
before maturity without the prior approval of the State Bank of Pakistan.
Maturity: September 2024

Rating: M- (JCR-VIS)
Chief Executive: Mr. Sved Maieedullah Hussaini
Faysal Bank Llmlted t49.700 149.760
30.000 (20'14: 30.000) certificates of Rs. 5.000 each

up:
Mark Average 6 month KIBOR plus 225 basis points per annum
Redemption: The instrument is structured to redeem 0.20 percent of principal semi-annually in the
first 60 months and remaining amount in 4 equal semi-annual instalments ol24.95o/o
each starting from 66th month. The TFCs are sub-ordinated to all other indebtness
of the issuer including deposits.
Maturity: December 2017
Rating: M- (JCR-V|S)
Chief Executive: Mr. Nauman Ansari
Bank AL Habib Llmited 299.520 299.SBO
60,000 (2014: 60,000) certificates of Rs. 5,000 each

Markup: Yearl-S:15%
Year6 - 10: 15.5olo
Redemption: The instrument is structured to redeem 0.02 percent of principal semi-annually in the
first 9 years and the remaining issue amount in 2 equal semi-annual instalments of
49.82o/o in the 10th year. These TFCs are sub-ordinated as to the paynent of
principal and prolit and in case of occunence of an event of default the TFC holders
will rank below the senior un-secured creditors and depositors and the creditors of
the issuer.
Maturitln July2021
Rating: M (PACRA)
Chief Executive: Mr. Abbas D. Habib
l(.{ Rr*
20
2015 2014
(Un-audited)
(Ruoees ln'000)
Agrltech Llmited 499,586 499,586
100,000 (2014: 100,000) certificates of Rs. 5,000 each

Mark up: Average six months KIBOR (Ask Side) + 175 basis point per annum (no floor & no
cap)
Redemption: Repayment will be made in stepped up instalments where 35 percent of principal
amount will be paid in the years 3 to 5 and remaining 65 percent will be paid in years
6toA
Maturity: July 2017
Rating: Unrated
Chief Executive: Mr. Muhammad Khalid Mir
Zulekha Textile Mills Limlted (Formerly Khunja Textile Mills Limited) 24.680 24,680
300 (2014: 300) certificates of Rs. 100,000 each

Mark-up: Average Six Months KIBOR + 300 basis points per annum
Redemption: 10 equal semi-annual instalments commencing from the 24th months from first draw
down.
Maturity: October 2019
Rating: Unrated
Chief Executive: Shanzae Amjad
Azgard Nine Limited - Note 9.15.1 43,350 43,350
20,000 (2014: 20,000) certificates of Rs.5,000 each

U Mark-up: Average Six months KIBOR (Ask Side) + 100 basis points per annum
Redemption: Principal will be repaid in 12 semi annual instalments with stepped up repaynent
plan whereby 47 percent of principal amount will be repaid in the years 3 to 6 and
remaining 53 percent will be repaid in the years 7 and 8.
Maturity: December 2017
Rating: Unrated
Chief Executive: Mr. Ahmed H. Shaikh
Azgard Nine Llmited - Note 9.'15.2 32.870 32,870
6,574 (2O14:6,574) certificates of Rs.5,000 each

Mark-up: Zero Rated
Redemption: Principal to be repaid in 7 semi annual instalment strarting from March 20'14.
Maturity: March 2017
Rating: Unrated
Chief Executive: Mr. Ahmed H. Shaikh
New Allied Electronics - Note 9.15.3 2,185 2,18s
437 12014:437) certiftcates of Rs. 5,000 each

up:
Mark Average three months KIBOR plus 275 basis points
Redemption: 17 equal quarterly instalments
Maturity: May 15,2011
Rating: Unrated
Chief Executive: Mr. Zeeshan Pervaiz Akhtar
Flying Board & Paper Products 6,990
Nil (2014: 1,500) certificates of Rs. 5,000 each
FauJi Akber Portla Marlne Termlnals Llmited (FAP) - Note 19.15.4 102,069 51,034
1 certificate of Rs. 102.069 million (2014: 1 certificate of Rs. 51.034 million)

up:
Mark Zero rated
Redemption: Repayment will commence after the repayment of entire principal of reduced STF
facility of FAP and will be made in 3 un-equal semi-annual instalments commencing
trom2021.
Maturity: May2022
Rating: Unrated
Chief Executive: Mr. Ahmed Kamal Rana
la(!.4- _Jt93.929_ _J-E!-qJ3g_
!
2l
9'15'1 fn the year 2o12, the Group's exposure in the TFcs of Azgard Nine Limited (ANL) amounting to Rs. 99.920 milion
was restructured under a Debt /
Asset Swap arangement. As per the terms of the restructuring, the Holding Company received 1,616,036
shares of Agritech Limited (AGL) (vatued at
Rs' 35 per share) as partial settlement ot the ANL'S TFC exposure. In addition, the lioloing Company
also injected additional equity amounting to Rs.
1 1'631 million for acquisition of additional 332,297 shares in AGL.
Subsequent to this settlJment, G.rp'r in the TFC of ANL has reduced to
Rs' 43'350 million (as reflected in note 9.15). This exposure in TFC is fully provided while investment "rpo*r"
in shares has been treto at fair vatue.
As per the terms of agreement, AGL shares shall be held by the respective trustees for the TFC issue
in their name and on behalf of the TFC Holders
who shall be the beneficial owners of the subject shares in proportion to their holdings. The Trustees
of the TFC issue are authorised pursuant to
shareholders investors agreement to hold the said ordinary shares for and on behalf of TFc holders
for a period of five years from the date of
transfer. Hence, 1,616,036 shares received by the Group are hetO by the trustees of the TFCs.
Furlher, under the terms of Investor's Buy-Back Agreement entered into by the Holding Company in
2012, the strategic investor issued a put option
notice lo the Holding Company in January 2016. As per the notice, the Holding Company being one
of the financing investors is required to purchase
325,1 98 shares of AGL at a price of Rs. 35 per share.
9'15'2 This represents Zero Rated Term Finance certificates of Azgard Nine Limited (ANL) received in setilement of overdue mark-up
outstanding on the
actual TFc exposure of the Group, amounting to Rs. 99.920 million. The settlement was made as per the Investor
Agreement entered into 6etween
ANL and the Holding Company. As at December 31, 2015, this investment is fully provided.
9.15.3 These represent TFCs of New Allied Electronics amounting to Rs. 2.185 million, received partially in lieu of the futty
impaired unlisted TFCs of First
Dawood Investment Bank previously held by the Group. As at December 31, 2015, this investmeniis fully provided.
9.15.4 During the year 2015' the Group received zero rated TFcs of Fauji Akbar Portia Marine Terminal Limited (FAp) amounting
to Rs. 51.034 miilion
(2014: Rs. 51.034 million)' These TFCs were received in settlement of overdue mark-up instalments
on reduced STF facitity of FAp. The Group wiil
continue to receive TFCs in settlement of mark-up to be accrued on semi-annual basis till May 2021. As at December
31, 201s, the exposure in the
TFCs amounts to Rs. 102.069 million which stands fully provided.
v
9.16 Investments ln sukuk bonds
I
I
Number of
2015 2014
lnvestee company Date of maturity Profit rate per annum
Cerllflcates {Un-audited)
(Rupees in'000)
Secwity Leasing Corporation Limited - ll Septcmber 2022 6 months KtBoR plus 1.95% 35,000 52,350 52,350
Sitara Energy Limited

May 2015 3 months KIBOR plus 1.70% - 3,155
BRR Guardian Modaraba Oecember 2016 1 months KIBOR 20,000 58,750 68,125
Sitara Peroxide (Private) Limited August 2016 3 months KIBOR plus 1.00o/o 60,000 157,813 198,654
Liberty Power Tech Limited March2021 3 monrhs KIBoR ptr6 3.00% 100,000 356,674 396,567
Amreli steel (Private) Limited December 2016 3 months KIBOR plus 2.50% 50,000 95,000 190.000
Secwity Leasing Corporation Limited - I Ja uary2022 3% cash + 3olo accrual s,000 6,418 6,418
Engro Corporation Limited September 20'15 6 months KIBOR plus 1.50% 336,670
Quetla Textile Mills Limited September 2019 6 months KIBOR ptu6 1.50% 30,000 74,483 82,759
Pakistan Mobile Communication Limited December 2019 3 months KIBOR ptus 0.88yo 340,m0 1,700,000 739,130
Sui Southern Gas Company Limited October 2019 3 months KIBOR ptus 0.470 300,000 1,500,000 1,500,000
Ghani Glass Limited December 2017 3 months KIBOR plus 1.75% 248,595
TF Varlik Kiralama AS April 2019 5.38% 3,m0 318,71 1 306,920
Kweyl Twk Katilim Bankasi June 2019 5.16% 5.000 523,705 502,416
Albaraka Turk Katilim Bankasi June 2019 6.25% 15,000 1,571,1 15 |,708,214
___9,4 1 s,q:g_ __qEgglg-

9'17 These represent overseas bonds amounting to BDT 200 million (2014: nil), us Doilar
30 miltion (2014: USD 24 miilion) and EUR 5 million (2014: EUR
4 million) issued by Ml cernent Factory Limited, Tc ZIRRAT Bankasi A.s, Qatar Nationat
Bank, Turkey Halk Bankasi, syndicate Bank, RAK Funding
Cayman Limited, Turkey lS Bankasi A.S, African Finance Corporation, Turkiye Garanti
Bankasi n.S, nU, Dhaoi commercial Bank and Deutsche
Bank respectively' Interest rates on these bonds ranges between 10.25o/o per annum (2014:
nil), 1.570/0 to 5.oo% per annum (2014: 1.4go/oto 5.00%
per annum) and'l'13o/o - 3.38% per annum (2014: 3.38% per annum) june 202t-(20t4: June
and are due foi maturityupto Marcn ebto
2021), andMarch2025 (2014: Juty 2019) respectivety. i2014: nit),
r{".^
I
22
9.18 Partlcularc of investments ln assoclales and mutual funds established under lrust structure nol consldered for consolidation.
The paid up value of these shares / units is Rs. '10 unless otherwise stated.
2015 2014 20ls 2014

(Un-audlted) (Un.auditld)
(Numboiof3har€/unik) (Rupees in'00o)
14,997,825 8,998,695 Alfalah Insurance Umiled 241.560 213.069

V percentase ofhotdhq:30% (2014:30%)
Break{o value per share: Rs. 16.07 (2014: Rs. 23.67)
Date of un-audited financt'al statements: December 3'1, 2015
Chief Executive: Mr. Nasar us Samad Oureshi
y 97,812,317 34,505,200 Sapphlre Wind Pow€r Company Llmited 1.006,054 y2,216

Percentaqe of holdne: 30% (2014: 3oo/o)
Break-u9 value p€r share:Rs. 1 1.14 (2014: Rs. 9.00)
Date of un-audited financial statments: December 31. 2015
Chief Executive: Mr. Nadem Abdullah
u 524.771 5,165,65E Alfalah cHP Morey ttarket Fund 54,415 543,945
Percentaqe of holdine: 2.71% (2014: 16.18%)
NAV per unit: Rs. 103.69 (2014: 105.31)
Dats ot reviewed fnancial sialemsnts: Docemb€r 2015
Management Cmpany - Altalah GHP Invastrnent Manaqoment Umited
lJ (Paid-up value of each unit is Rs- 100)
5'481'236 7'4e7'eo0 283,699

, #,*ffi:'"il"JffiX:T3i:6'1?1rr.rs%)
386,.cO7
y NAV 9er unit Rs. 52.58 (2014: Rs. 51.60)
n:f":*:'trS,$:ff.,iEfffiiFff::*Ti''1;ffJi."n,u,"n"o
(Paid-up value of each unit is Rs. 50)
t 3,976,9?6 2,832,533 Atfalah GHP Sovereisn Fund 423,475 270,49

Percentage of holdng: 5.22% (2014: 4.03oh I
V NAV per unit: Rs.106.48 ( 2014:Rs. 109.05)
Oate of reviewed financial statements: December 31, 2015
Managment Company - Alfalah GHP Investment Management Umit€C
Y 20,8@,000 - Appollo Pharma Limitsd - note 9.18.1 802,130

Percentage of ho|dim: 7.4olo
Dals ot un-auditod llnancial statements: December 31, 2015
(Paid-up value ofeach unit is Rs. l0)
L- 62,?74 431,143 Alfalah GHP Income Fund '113,036 93,164

Percentase of holdino: 0.43% (2014: 3.60%)
NAV per unil Rs. 109.32 (2014: Rs. 106.82)
Date of reviswsd fnancial statements: December 31 . 201 5
Management Company - Alfalah GHP Inveslrnent Management Limited
* (Paid-upvalueoteachunitis Rs.50)
1,034,037 515,950 Alfalah GHP lslamic Income Fund 6,384 14,992

Percentage of holdi{E: U.1o/o (2014:. 47 .42o/ol
r- NAV per unit: Rs. 102.51 {2014: Rs. 104.36}
fl:f":*Hlg,iffiffEEflsL?'ffifrfJ,'*1;nti.**n*
t 2,889,739 2,889,739 Alfalah GHP Valn Fund 187,684 174,170

Percentaqe of holdinai 27% (2014: 34.67%l
tJ NAV p€r unit Rs.04.95 (2014: Rs.60.38)
Date of reviewed llnancial slatements: Decembor 31, 20'l 5
Managoment Company - Alfalah GHP Investmenl Management Limiled
\- 5,590,077 5,590,0Zf AlfalahGHPblamtcstockFund 359,958 32E.Oll

Percentaoo of ho6in: 52.92oh (2011:. 87 .18'hl
l,[AV p€r unit Rs. 64.39 (2014: Rs. 58.68]
Date of revi*ed financial statsments: Decemb€t 31, 2015
Managemont Company - Afalah GHP Investrnent Managoment Limited
(Paij-up value of each unit is Rs. 50)
1'050'926 2,@0,739 Alfalah GHP Cash Fund 540'9tB t'048'628

Percentage of holdim: 70.09% (m14: 43.99%)
NAV per unit: Rs.514.71 (2014: Rs. 524.12)
Date of rovbwsd financial statements: Dec€mb€r 31. 2015
Managcmsnt Company - Alfalah GHP Investmenl Manag€ment Limited
::l.olx-ffi .lxlr-z:o
y 9.18.1 Du.ing the year, the Group has invested in the shares of the said company. The recoverable amount of the investrnent in Appollo Pharma Limited ms
tested for impairment based on value in use. in accordance with IAS - 36. The value in use calculations are based on cash flor projections with teminal
growth rate taken into account. The estimated future cash flows were discounted using a post-tax discount rate eslimate. Based on the calolatbns
, considered, the recoverable amount from the invesment exceeds it current carrying value, and does not result in any impairment.
E v {s\(__
I
Lr,
23
2015 2014
(Un-audited)
(Rupees in'000)
9.19 Partlculars of assets and liabllltles of associates and mulual funds established under trust slructure not considered for consolidation.
Alfalah Insurance Limited
Date of un-audited financial statements: December 31, 2015

it Assets 2,358,908 2,179,853
Liabilities 1,553,592 1,469,542
Revenue 180,158 150,515
Profit for the year 1't5,214 123,037
Sapphire Wind Power Company Llmlted
Date of un-audited financial statements: December 31 . 2015

Assets 13,041,994 995,101
Liabililies 9,408,801 120,'t61
Revenue 285,310 28,613
Protit for the year 1 16,553 28,613
Alfalah GHP Money Market Fund
Date of reviewed financial statementrs: December 31. 2015

Assets 2,028,461 3,394,276
Liabilities 18,783 31,696
Revenue 66,801 159,631
Profit for the six months period ss,933 140,708
Alfalah GHP lncome ltlultiplier Fund
Date of reviewed linancial statements: December 31. 2015

I Assets 2,731,883 2,066,981
\, Liabilities
Revenue
32,415
120,263
19,510
161,200
Profit for the six months period 95,698 141,228
V Date of reviewed financial statements: December 31, 2015

Assets 8,181,233 3,473,259
Revenue 332,892 147,819
Appollo Pharma Llmlted

Date of un-audited financial statementrs: December 31, 2015
Assets 8,814,870
Liabilities 5,240,530
Revenue 3,747,920
Profit for the year 631,620
Alfalah GHP lncome Fund

Date of reviewed financial statements: December 31, 2015
Assets 1,623,353 1,397,762
Revenue 60,603 119,825
Alfalah GHP lslamlc lncome Fund

Date of reviewed financial statements: December 31, 2015
Assets 127,877 114,965
Revenue 4,160 5,365
Profit for the six months geriod 2,481 3,701
Date of reviewed financial statements: December 3'1. 2015

Assets 717,689 521,212
Revenue 47.631 54,'149
Alfalah GHP lslamlc Stock Fund
Date of reviewed financial statemenls: December 31, 2015

Assets 699,117 389,317
Revenue 56.222 Uj57
Prolit for the six months period 46.241 27,562
Alfalah GHP Cash Fund
Dale of reviewed financial statements: December 31, 2015

Assets 801,763 2,413,648
i Revenue 33,271 127,951
Profit for the six months period 20.604 97.614
l(f .{l-
24
9.19.1 Movement in values of investments accounted for under equity method of accounting
The details of investments accounted for under equity method of accounting is as follows.
2015 2014
(Un-audited)
(Rupees in'000)
Alfalah lnsurance Company Limited
lnvestment as at January 1 213,069 176,032

Remeasurement of defined benefit plan (7s2) 125
Dividend received during the year (5,311)
Share of profit 34,5s4 36,912
Balance as at December 31 241.560 213,069
Sapphire Wind Power Company Limited
lnvestment as at January 1 342,216

Investments made during the year 633,071 345,052
Dividend received during the year
Share of profit 30,767 (2,836)
Balance as at December 31 1J06054 342.216
Alfalah GHP Money Market Fund
lnvestment as at January 1 543,985 500,122

Redeemed during the year (500,000)
Share of profit 10,430 43,863
Balance as at December 31
_!LA15 ------143&5-
Alfalah GHP lncome Multiplier Fund
Investment as at January 1 386,907 322,850

Investment made during the year 109,500 49,960
Redeemed during the year (220,1s1) (10,000)
Dividend received during the year (23,284) (27,650)
Share in reserves of associate 536
Share of profit .30,231 51,748
_293€99_ _-__3!€g_

Investments made during the year 220,529 200,000
Redeemed during the year (76,228) (80,000)
_423.475 270.828
Appollo Pharma Limited
Investment as at January 1
lnvestments made during the year 790,400
Share of profit 11,730
Balance as at December 31 80rJ30-
lcO^L
25
2015 2014
(Un-audited)
(Rupees in'000)
Alfalah GHP Income Fund
Investment as at January 1 93,1 64 91,273

Investment made during the year 1 10,000
Redeemed during the year (e6,175) (6,000)
Share of profit 6,047 7,S9;
Balance as at December 31 93,164
Alfalah GHP lslamic lncome Fund

-11-3p39-
lnvestment as at January 1 44,992
lnvestment made during the year 4,210 43,874
Redeemed during the year (41,e85)
Dividend received during the year (2,e66)
Share of profit 2,133 1,1 18
Balance as at December 31 6,384 44.9n
Investrnent as at January 1 174,470 171,994

Share of profit 35,648 31,2't4
Balance as at December 31 187,684 174,470
Alfalah GHP lslamic Stock Fund

Investment made during the year
Redeemed during the year
Dividend received during the year (40,86;) (83,800)
Balance as at December 31 359,958 328,011
Alfalah GHP Gash Fund
lnvestment as at January 1 1,048,628 1,056,508

Investment made during the year 21,000
Redeemed during the year (500,001) (77,e80)
Balance as at December 31 540,918 1,048,628
Total
kQnc
1
26
9.20 Quality of avallable for sale securities

Market value / Falr value
2015 2011 2015 2014 LongtMedium Ratsd by
(Un-auditedl (Un-audlted) Term Qredit
Rating
--(Rupoes in'0001--------
Market Treasury Bllls 78.961.247 45,126,733 78,886,442 45,101,201 (Unrated - Governmont Securities)
Paklstan lnvestment Bonds 166,465,955 120,129,862 157,492,067 115,'155,312 (Unrated-GovernmentSecurities)
Term Flnance Certificates

Askari Bank Limited 99,741 100,000 AA. JCR-VIS
Askari Bank Limited (3rd lssue) 440,451 AA. PACRA
NIB Eank Limited (2nd lssue) 98.941 98,563 A+ PACRA
Faysal Bank Limited 153,068 156,691 AA PACRA
Eank Al-Habib Limited 330,930 343,528 AA+ PACRA

Flying Board & Paper Products' Not Applicable Nol Applicable ---(Unrated)----
New Allied Electronics ' Not Applicable Not Applicable ---(Unrated)----
Fau.ii Akbar Portia Marine Terminals Limited Not Applicable Not Applicable ---(Unrated)----
Azgard Nine Limited ' Not Applicabl6 Not Applicable ---(Unrated)----
Azgard Nine Limited (Zero rated)' Not Applicable Not Applicable ---(Unrated)----
682.680 1,139,233 829,594 1,234,849
'These Term Finance Certificates are quoled, however due to absence of trading their market value is not available. Adequate provision has been made against these
certificat€s.
Shares ln Lisled Companies, Cortiticates, Units

Agritech Limitod 18,217 15,100 15,100 22,737 ---(Unrated)----
Ailied Bank Limitad 79,339 57,926 83,782 56,100 AA+ PACRA
Ameli Steels Limited 105,123 89,250 A PACRA
Attock Cement Pakistan Limit6d 125,813 138,493 ---(Unrated)----
Attock Petroleum Limit€d 107,591 88.006 113,732 88,078 ---(Unrated)----
Bank Al Habib Limited 226,678 375,665 220,770 304,288 4tr+ PACRA
Dolmen City Real Estate lnvestment Trust (REIT) 761,869 781,040 RR1 JCR.VIS
Engro Corporation Limited 279,390 155,057 256.728 134,075 AA PACRA
Engro Powergen Qadirpur Limited 126,593 90,683 126,735 66,283 ---(L,nrated)----
Fatima Fertilizer Limited 22,365 85,848 12,613 60,544 M. PACRA
Fauii Bin Qasim Limited 86,922 29,793 93,215 27,629 ---(Unrated)----
Fauji Fertilizer Company Limited 147,475 60,745 162,897 59,514 ---(Unratedi----
First Dawood Investment Bank Limited 2,394 15,000 ---(Unrated)----
Kot Addu Power Company Limited 188,325 126,304 175,968 98,997 nA+ JCR-VIS
Lucky Cemont Limited 358,904 500,280 306,277 381,839 ---(Unrated)----
DG Khan Cem€nt Limited 332,078 105,501 285,827 83,384 ---(Unrated)----
Habib Bank Limited 140,084 122,416 145,681 I 15,992 MA JCR.VIS
MCB Bank Limited 200,586 133,172 230,466 121,068 AÂ PACM
Meezan Balanced Fund 26,054 5,894 ---(Unrated)----
Meezan lslamic Income Fund 50,757 50,000 A-(f) JCR-VIS
NAFA lncome Opportunity Fund 275,428 250,805 A(f) PACM
Nishat (Chunian) Power Company Limited 246,U9 285,755 ilz,g0o 190,480 A+ JCR.VIS
Nishat Mills Limited 103,418 96,792 1 19,233 97,493 AA PACRA
Nishat Power Company Limited 14?,252 247,zffi 111,650 164,780 A+ PACRA
Oil and Gas Development Corporation 93,872 251,800 1 1 0.368 31 1,966 ----(Unraled)----
Pak Oman Advantage Fund 148,sfl) 150,000 3-Star PACRA
Pak Oman Advantag6 lslamic Incomo Fund 31,850 30,000 A+(f) PACM
Pakistan Oilfields Limited 175.607 371,792 203.635 454,490 ---(Unrated)----
Pakistan Petroleum Limited 137,036 384,637 142,597 465,706 ---(Unrated)----
Pakistan State Oil Compeny Limited 311,110 349,463 350,923 363.591 AA PACM
Th6 Hub Power Company Limited 478,732 356,538 350,018 249,590 AA+ PACRA
United Bank Limited 201,435 302,174 210,949 274,133 AA+ JCR.VIS
Al-Ameen lslamic Income Fund 57,616 50,000 BBB+(f) JCR-V|S
Msa Shares 385,502 312,6W ---(Unrated)----
tP*c.-
I
27
Market value / Fair value

2015 2014 2015 2014 LongrMedium Rated by
(Un-audited) (Un.auditsdl TermCredit
Ratlng
{Rupees In'000)-----.**
Shares In Unlisted Gompanies
Pakistan Export Finance Guarantee Agency Limited Not Applicable ---(UnratedF---
Society for Woddilde Interbank Financial
Telecommunication Not Applicable ---(Unrated)----
Al-Hamra Avenue (Private) Limited Not Applicable -*-(Unrated)----
Warid Telecom (Private) Limited Not Applicable ---(Unrated)----
Pakislan Slock Exchange (PSX) formerly
Karachi Stock Exchange 40,073 40,073 ---(Unrated)----
Preference Shares in Llsted Companles

Agritech Limited Not Applicable 108,835 108.835 ---{Unrated}----
Preference Shares in Unlisted Companies

Silk Bank Preference Shares
First Oawood Inveslment Bank Limited
Not Applicabl6
I- 3ooôoo
l[--- 3oopoo I ---(Unratsd)----
Not Applicable --.-(Unrated)----
Trust Investment Bank Limited Not Applicable
1,,,;,ll;:,:::l
325,000 340,000
---(Unrated)----
OveFeas Bondg
Kingdom of Bahiain Bond s33,639 537,886 563,025 548,510 BBB. Fitch
Kazakistan Sovereign Bond 2i96,774 283,239 308,943 295,910 BBB+ Fitch
Qatar National Bank Finance Limiled 524,634 507,004 524,114 503,238 A+ s&P
Abu Dhabi Commercial Bank Cayman Limited 1,049,268 1,014,008 1,0/,8,228 1,006,476 A+ Fitch
Unitod Mexican State 44,572 53,922 BBB+ Fitch
Indonosia Government Bond 226,503 228,590 BBB. Fitch
TC Zirrat Bankasi A.S 258,114 251,477 261,087 250,281 BBB Fitch
Turkiye Halk Bankasi 51,865 50,846 52,346 50,212 BBB. Fitch
Syndicate Bank 53,557 50,177 5?,371 50,242 BBB. s&P
RAK Funding Cayman Limited 206,566 203,307 208,398 199,650 BBB+ Fitch
Tu*iye lS Bankasi A.S 300,129 304,831 310,874 297,742 BBB Fitch
Turkiye Garanti Bankasi A.S u4,622 371,145 342,365 364.581 BBB Fitch
Aftica Finance Corporation 630,010 623,004 A3 Moody's
Deutsche Bank 213,449 226,892 Fitch
Pakislan Euro Bonds 2,482,952 2,409,043 B Fitch
7.222.6il 3,573,920 7,213,202 3.566.942
Sukuk Bonds
Pakistan Sukuk Bond 19 927,157 863,0s7 910,044 872,805 B. S&P
ljarah Sukuk Bonds 905,742 908,538 944,663 906,479 ---(Unrated)--.-
TF Varlik Kiralama AS 322,437 313,2U 318,711 306,920 BBB Fitch
Kweyt Tu* Katilim Bankasi 539,254 523,391 523,705 502,416 BBB Fitch
Albaraka Turk Katilim Bankasi 1.562,521 1,722,287 1,571,1 15 1,708,213 BB Fitch
GoP - ljarah Bonds lX 5,006,s00 5,004,139 --*-(Unrated)----
GoP - ljara Sukuk X 4,006,800 4,003,362 ---(Unrated)----
GoP - ljara Sukuk Xl 5,012,500 5,000,000 ---(UnratedF--
GoP - I.iara Sukuk Xll 9,823,520 9,804,356 ---(Unrated)---
GoP - ljara Sukuk Xlll 4,108,610 4,099,501 ----(Unratedt---
GoF - ljara Sukuk XIV 7,162,130 7,481,323 7,432,655 7,466,230 ---(Unrate61--
GoP - ljara Sukuk )0r'1 20,244,608 20,018,400 ---(Unrated)---
GoP - Sukuk 30,172 30,100 ---(Unrated)----
Wapda Sukuk lll 1,411,426 1,823,454 1,457,143 I,700,000
---(unrated)----
Security Loasing Corporation Limited I Not Applicable Not Applicable 6,418 6,418 ---(unrated)----
Seclrrity Leasing Corporation Limited ll Not Applicable Not Applicable 23,105 23,105 ---(Unratedf--*
Quetta Textile Mills limited Not Applicable Not Applicable 74.483 82,759 ---'(Unrate61--_
k(xr- 33,375,27s 41,623,356 33,280,442 41,516,803
I
28
2015 2014
(Un-audited)
9.21 Particulars of provision for diminution in value of investments - net (Rupees in'000)
Opening balance 5,390,757 5.304.860

Charge for the year
Reversals during the year
I| 15osrtllre|
_ ll (44,146)l
136,691 85,897
Provision written off during the year (7,637)
Closing balance _5,51e,q!_ : 5.390.757
9.22 Particulars of provision for diminution in value of investments

by type and segment
Available for sale securities

Listed companies / mutual funds
- Fully paid up ordinary shares / units
- Agritech Limited - 7,637
- First Dawood lnvestment Bank Limited 15,000
- Preference shares
- Agritech Limited 108,835 108,835
Unlisted companies
- Fully paid up ordinary shares of Rs. 10 each
- Pakistan Export Finance Guarantee Agency Limited 5,725 5,725
- Al-Hamra Avenue (Private) Linrited 50,000 50,000
- Warid Telecom (Private) Limited (Related party) 4,366,796 4,366,796
Unlisted securities
- Term finance certificates / sukuk bonds
- Azgard Nine Limited 76,220 76,220
- Security Leasing Corporation Limited I 6,418 6,418
- Security Leasing Corporation Limited ll 23,105 23,105
- New Alied Electronics 2,185 2,185
- FaujiAkbar Portia Marine Terminals Limited 102,069 51,034
- Quetta Textile Mills Limited 37,242
- Preference shares
- First Dawood lnvestment Bank Limited 15,000
Y - Trust Investment Bank Limited 25,000 25,000
Held to maturity securities
Unlisted securities
- Term finance certificates / sukuk bonds
- Agritech Limited 499,586 465,000
- BRR Guardian Modaraba 34,062 20,234
- Security Leasing Corporation Limited 29,245 29,245
- Sitara Peroxide (Private) Limited 1 13,643 113,643
- Zulekha Textile Mills (formerly Khunja Textile Mills Limited) 24,680 24,680
l( (tta-
5,519,811 -j'-55dEr
29
9.23 Unrealised gain / (loss) on revaluation of Investments classified as held for trading - net
Unrealised gain / (loss) Cost

2015 2014 2015 2014
(Rupees in'000)
Market Treasury Bills (6,414) (1,531) 13,480,197 15,194,352
Pakistan Investment Bonds 4,060 54,186 2,423.862 2,905,528
Overseas Bonds 229,460 106,622 2,990,933 2,193,796
Sukuk Bonds 821 1,002,278
Fully paid up ordinary shares / units - Listed
20't5 2014
(Un-audited)
10 Note (Rupees in'000)

ADVANCES.NET
Loans, cash credits, running finances, etc.

In Pakistan 307,915,801 272.404.693
Outside Pakistan 11,007,287 12,957,433
318,923,088 285,362,126
Net investment in finance lease
In Pakistan 10.2
Outside Pakistan
3,814,907 3,720,506
Assets under ljarah (IFAS-2 ) 10.3 6,875,617 5,474,603
Bills discounted and purchased (excluding markei treasury bills)

Payable in Pakistan
Payable outside Pakistan
t-6,ft t6-:50-5lls-e-rr-r8l
| 7,692,258 | | 4,463,186 |
13,878,767 10,262,314
10.1 343,492,379 304,819,549
Provision against advances
Specific provision against non-performing loans and advances 10.5 |ITEaET-FTS|llrsFdi"6-6?|
General provision against advances 10.5 I (73e,e04)l | (64e,503)l
(16,1s2,819) (14,251,170)
327,299,560 290,568,379
10.1 Particulars of advances - gross of provisions

IJ
In local currency
300,460,000 269,283,061
In foreign curencies 43,032,379 35,s36,488
::u3,492,379 304,819,549
Short term (upto one year) 240,473,933 204,669,07 1

Long term (over one year) 103,018,446 100,150,478
343,492,379 304,819,549
10.2 Net investment in finance lease
2015 2014 (Un-auditedl

Later than Laterthan
Not laler later
Not
than one
year
-one
and
less than
Over five
Years
Total ,T:;" "ii::.'f' -:Overfiveyears Total
nve trears years
(RuPees In'000)-.-_.-
Lease rentals receivable 395,820 2,399.850 2,795,670 1,334,355 1,400,490 2,734,U5
Residualvalue 212,125 1,109,316 1.32'1.44'.1 760,119 031,756 1,291.875
Minimum lease payments 607,945 3,509,166 4,117,111 2,094,474 1,932246 4,026.720
Financial charges for
future periods (97,803) (204,401) - (302,204) (132,581) (173,633) - (306,214)
Present value of minimum
lease payments 510,'142 3,304.765 . 3.814.907 1.961,893 1,758,613 3.720.506
k-]/Ac-
U
30
10'2'1 Net investment in finance lease includes ljarah financing disbursed prior to January 1, 2009.
ljarah contracts entered
on or after January 1' 2009 have been accounted for in accordance with the reiuirements of IFAS
2, "ljarah', as
disclosed in note 10.3.
10.3 Assets under tjarah (|FAS-2 )
a) Brief description of the ljarah arrangements
ljarah contracts entered into by the Group essentially represent arrangemenls whereby the
Holding Company (being
the owner of assets) transfers its usufruct to its customers for an agreed period at an agreed consideration.
The
significant ijarah contracts entered into by the Group are with reipect to vehicles, plant and
machinery and
equipment and are for periods ranging from 3 to 5 years.
b) Movement in net book value of ijarah assets
-(Rupees In.000)-_-__
At January 1,2015
Cost 6,908,417 678,140 517,928 8,1 18,1 19
Accumulated depreciation
Net bqok value
Year ended December 31, 201 5

Opening net book value 30s,839 1,775 5,474,603
Additions 593,396 - 3,714,703
Dr'sposa/s
Cost
Depreciation
Closing net book value
At December 31, 2015

Cost 8,557,297 977,866 321,745 4,185 9,861 ,093
Accumulated depreciation (3,287) (2,985,476)
Net book value
-....-----.----.- 2014 flJn.audire.{l --______-_______________-

I Assat calcnnriac -l
Vehicles - Vehicles - plintE _
Machtnery Equlpment rotal
_:":":r* _:T"r"" In'000)*--
U
At January 1,2014 -(Rupees
Cost 5,756,318 838,735 652,341
Accumulated deprdciation
Net book value
Year ended December 31, 20i4

Opening net book value 3,985,363 409.706 351,740 13,814 4,760,623
Additions 2,618,233 61,981 - 2,680,214
D,'sposa/s
Cost
11,907)
Depreciation
Closing net book value
At December 31,2014
Cost
' Accumulated depreciation
6,908,417 678,140 517,928 13,634 8,118,,119
Net book value

lc( r.rc-.
3l
201s 2014
(Un-audited)
c) Future ljarah payments recelvable (Rupees in'000)
- Not later than one year 1,377,350 1 ,954,346
Later than one year and not later than five years 5,498,267 3,520,257
__9,875,6 1 7_ l,47dq9!_
10.4 Advances include Rs. 18,456 million (2014: Rs. 19,413 million) which have been placed under non-performing status as detailed below:
2015
Classified advances Provision required Provision hold
Domeslic Overseas Total Domestic Overseas Total Domestlc Overseas Total
(Rupees in'000)
OtherAssets Especially
Mentioned (Agri Financing) 115,219 - 115,219 2,r47 2,il7 2,547 2,v7
Substandard 2,052,587 54,595 2,107,182 524,432 70,795 595,227 524,432 70,795 595,2?7
Doubtful ?,554',443 5,506 2,559,949 1,502,617 1,587 1,504,204 1,502,617 r,587 r,504,204
Loss 13,1 1 1,084 562.325 13,673,409 r2.936,545 414,392 1 12,936,545
3,350,937 414.392 13,350,937
622.426 14,966,141 486'774 15.452,915 14,966,141 486,774 15,452,915
201.1 (Un-audited)
Clasgified advances Provision required Provision held
Domestic Overseas Total Domestic Ove6eas Total Domestic OYerseas
(Rupees in'000)
Oth€r Assets Especially
Mentioned (Agri Financing) 169,364 169,364 6,756 6,756 6,756 - o.aco
Substandard 4,043,560 4,043,560 987,640 987,640 987,640 - 987.640
Doubtfi.d 1,877,474 1,325 1,878,799 885,009 662 885,671 88s,009 662 845,671
Loss 12,607,861 713,039 13,320,900 11,155,479 566,121 I 1.721,600 1 1,1 55,479 566,121 11,721,600
13.034,884 566,783 13,601,667 13,034,884 566,783 13,601,667
10.5 Partlculars of provisions against non-performing loans and advances
2015 2014 (Un-audited)

Note Specitic General Total Speciflc General Total
__----_(Rupees in .0001__
Opening balance 13,601,667 649.503 14,251,170 12,441,832 605,975 13,047,807
Exchange adiustment ard other movements 31,406 3,300 34,706 (25,7s41 (5,21?l (30,966)
Charge for the year ffiffi

Reversals / recoveries durirE the year | (r,asa,gasll tsg,ssr)l tr,grz,gsoll I tr,aar,srgll I
48J40
tr,ssr,srgll
2,063,108 87,101 2,150,209 1,399,191 1,447 ,931
Amounts writien off 10.6.1 (243,266) - (243,266) (213,602) (213,602)
Closing balance ffi 14.251.170
10.5.1 The additional profit arising from availing the forced sales value (FSV) benefit - net of tax at December 31, 20'15 wttich is not available for
diskibution as either cash or stock dividend to shareholders/ bonus to employees amounted to Rs. 110.774 million (2014: Rs.747.957
million).
10,5.2 General provision against consumer loans represents provision maintained at an amount equal to 15% of the fully secured performing
portfolio and 5% of the unsecured performing portfolio as required by the Prudential Regulations issued by the State Bank of Pakistan.
General provision for overseas branches is maintained in accordance with the guidelines of the authorities in the respective countries.
10.5.3 General provision also includes reserve required to be maintained against financing to Small Enterprises (SE) as required under the revised
Prudential Regulations for Small and Medium Enterpdse Financing issued by the State Bank of Pakistan during the yeat 2013. Under the
revised regulations, effective September 30,2013, banks have been required to maintain general reserve at least equivalent to 17o of the
secured and performing SE portfolio and 2o/o of the unsecured and performing SE portfolio.
1 0.5,4 Particulars of provlsions agalnst advances
2014 (Un.audited)
Specllic General Total Specific General Total
RuPeG3 In'000)...-_
In local cwrency 14,966,141 639,433 15.605,574 13.034.884 550.800 13,585,684

In foreign cunencies 486.774 100.471 587.245 566.783 98.703 665,486
15,452,915 739,904
(e4a 16,192,819 13,601,667 649.503 14.251,170
32
10.5.5 Although the Group has made provislon against its non-performing portfolio as per the category of classification of the
loan, the Group holds enforceable collateral in the event of recovery through litigation. These securities comprise of
charge against various tangible assets of the borrower including land, building and machinery, stock in trade etc.
2015 2014
(Un-audited)
10.6 Particulars of write-offs (Rupees in'000)
10.6.1 Against provisions 243,266 213,602

Directly charged to profit and loss account 5
243,266
10.6.2 Write offs of Rs. 500,000 and above 172,501 98,869

Write offs of below Rs. 500,000 70,765 114,738
243,266 213,607
10.7 Details of loans written-off of Rs. 500,000/- and above
In terms of sub-section (3) of Section 33A of the Banking Companies Ordinance, 1962 the statement in respect of loans
written-off or any other financial relief of five hundred thousand rupees or above allowed to a person(s) during the year
ended December 3'1 , 2015 is given in Annexure-l to the unconsolidated financial statements.
Note 2015 2014

(Un-audited)
10.8 Particu.lars of loans and advances to directors, executives, (Rupees in'000)
associated companies, etc.
Debts due by directors, executives or officers of the Bank or any

of them either severally or jointly with any other persons
- Balance at beginning of the year 5,139,055 4,848,070

- Loans granted during the year 1,867,232 1,834,479
- Repayments during the year (1,271,2481 (1,543,494)
- Balance at end ofthe year
_q4qgg_ ___g_q9,055_
Debts due by companies or firms in which the directors of the Bank
are interested as directors, partners or in the case of private
companies as members
- Balance at beginning of the year 901,426 752,988

- Loans granted during the year 3,099,590 3,140,375
- Repayments during the year (2,501,606) (2,991,937)
- Balance at.end of the year
_11991319_ ____901,429_
Debts due by other related parties
- Balance at beginning of the year 2,927,096 2,869,545

- Loans granted during the year 19,048.202 7,557,326
- Repayments during the year (17,135,258) (7,499,775)
- Balance at end ofthe year
:: 4,840,040 2,927,096
Total 12,074,489 8,967,577
11 OPERATING FIXED ASSETS
Capital work-in-progress 11.1 704,981 1,134,085

Property and equipment 11.2 15,532,465 13,843,969
lntangible assets .3
1 1 ,080,245 81 8,538
1
:: 17,317,691 15,796,592
11.1 Gapitalwork-ln-progress
Civilworks 286,041 345,190

Equipment / intangibles 4',t2,1't3 243,334
Advances to suppliers and contractors 18,239 541,206
Others 3,913 19,680
Provision against capital work-in-progress (15,325) (15,325)
lLlAt-^ __&99r_ __!.91,09!_
33
11.2 Proportyandaqulpment
rrlulls aa (dl.podrl, tmh!.dd, Cdl RMlqlldaa d.pcl.Us ln9alm.ilto. Oarel.ton &cmdd.d d.g.cLdd El6a..l d.9..clrtion%
.t Jruty l, '.dr6hdlr (.dlahrf rt Oacmba. a || [email protected] lha t'ad, (on RmEad 6 Oapr*l.lld .. d , O.cfrbcr lt,
D.acrlp{d 20t5 .g016l !1,20ll 1,2015 dl.p6.lt, R.vdcli6 D.c6b..31, 2015
.ffidad '.di6hd! 20t5
d.pcldloo'
Rut6r In '000,
OffEa p.imba8 5,r56,963 I t,151 {.E93.52 167.58 6627E latz,Il-t .,893.362 2,5v. - 5.5%
l2r2,7l_5
(4.0,r3 {r. t92
R.shslih 3.917,7SO t,6a3,t50 5.399.467 't07.966 53.s:6 (161.482 5.399,457 2.s% .5.5%
(r6r,482
9,076.762 tl.ls? 1.613.150 10.292,829 295.s9s 139,791 (43,1.197)

(134.
. (43,t.197)
. (1,(X3' . lr,rszt
Lss lbU 4214.355 59r,O8r . (16.S22) a,?17,r57 360.878 (16,922) 2,9O9.,13P 1.868.325 10% . m./.
hPowmaG
' (10.75t) . cr.875)
Fuml6 rnd t5.649 - (175.14s) 1,961.330 2fi27? (t76.145) 1.292.1,10 669,190 10%.25%
lbdr@ (r1,2361 113,122'
. (18,5051 ' (s,610)
Otfs €quipmd 1.1s3,76,t - (t.0ti.1{0) 9.,168,732 6,916.993 !.0m.988 (1,011,440) 6.870.097 2.598,535 t0./. - 33%
(68,0291 (5,t,033)
. 26.008 . 7,!x89
V.hale! 36,95? 360.402 231,14 8€2t2 103.486 25%

(39,882t (33,21s)
' (3.011) . (3,636)
25,119,122 I,E6E,6O6 r,6,r3,'t50 (1,233.116) 26,E61,050 il,3{Xr,1n:} 1.616229 (,134,197} (r,233J45) il,328,58s rs,532,465
(2,2,119't (43,(,197) (r10.700)
. 410.338t . (t1.7511
Cdt, Addilio6 , 5rC6 6 W.it Off Co.t, Accmd.Ld DaFaLdq A.cmdrlcd WriL Otl &cmdd.d N.l book Rate ot
n lulld - (dltpo..l.lr r.v.lo0d, Coal RMludon r. d.p..ci.tim fd Ur ttra., O.p.Gldim &cmd.t d d.prci.li6 va|r .a { d.pr*i.tion %
a Jrury l, '.dl6tr.il (.dl6tn.rn at Dembar .. .l J.Mry ld dapoaall, R.m.d m Dcpcldlon sd Dcc.mb.r 31.
D.ac.lplid
2014 .9.16l 31,201,4 1,2014 '.di!ttrd. R.v.lulld D.cmb.r 31, 20la
e6da.d 20la
d.FcLridl
pa, amh
Otfi6 Flmis 5.rs5.666 aos,(bt 5,15E,363 78,657 r0.739 187,529 4,971,334 2.5%.5s%
(440.sog (r,256
(ers (srl
Revab0on 3.950,0€2 3.917,799 54.4@ 53,558 107.966 3.809.833 2s% -5.s.h
|32.n3
9,145,748 /.(}5.061 1il,37 8,781,t67

(473.r92) (1,256)
' (85s) ' (sil)
Ls hoH 3,609.162 6il7,89il il,214,355 2.3,1E,5i0 261,52() 1 .641 .m4 10./o - 20%
mp|M* (32,653) (32,036)
. 00,046)
. (1,6131
Fwibre and r.940,296 174,694 2,094.s69 r,11939 165,30. E09,499 10%-25%

frdn (r6,5161 ('1a,3{r }
' (3,905) . (.,E32)
Offm.qdpmd I,119,276 t,366,341 6.051,458 s?ofr1 2,45't.436 t0%-33%

(6s,808) (64,308)
' (,17,3Eo1 ' (4r,36r)
Vchij.s 387,8Ett 3,690 395.30t 197.624 6't.640

(21,Us', (2r383)
. l1,1u2l ' (3,13r)
4.m2387 25,1.9,122 1.6,12,965 n,305,,15i! t3,8,(3.969

(lE ,621)
(-f rta-
34
l1'2'1 Includedincostofpropertyandequipmentarefullydepreciateditemsstill inusehavingcostofRs.6,094million(2014:Rs.3,99gmillion)
11'2'2 otfice premises were last revalued on December 31, 2015 on the basis of market values determined
by indepenctent valuer M/s. Akbani & Javed
Associates. M/s. Harvester services (Private) Limited and M,/s. Asif Associates (Private) Limited. Had there been no revatuation,
the office premises would have been Rs. 4,g93.362 milion (2014: Rs. 4,971.334 milion). the net book vatue of
11.3 Intangible assets
-
Cost
Book value
As al Additions/ As at As at Amortisation w'lteOtf Rate of
Write Off As at as at
January 1, (deletions)/ December January 1, (deletions) / accumulated
Cost December December
2015 'adjustmcnt 31,2015 2015 'adjuitment depreciation %
31,2015 3t,2015
(RuPees In '000)._-...-_ per annum
Computer
sofiware 1,982,322 536,650 (151,690) 2,366,634 1,198.390 275,439 (151,690) 1,320,995 1,045,639 2,o/o-33%
(1 (1,802)
. '802)
1,154 . 658
Goodflill 85,711 85.711 56.031 56,031 29,680
Memb€rship
Card / DGCEX 6,011 6,011 6.011
(Note 11.3.2) 6,011
Membership
Card PSX (TRE 4,926 4.926
(Note 11.b.3) 4,926
Accumulated Amortisation
As at Additlons/ As at As at Amortisatlon Rate of

Write Off Wrlte Off As at as at
January 1, (d€letlonsy Dec6mber January 1, (deletions) / accumulated amortisation
Cost Decembcr December
2011 'adjustment 31,2014 2011 'adjustment depreciatlon %
31,2014 31,2014
RuPe€s in'0001-__._._ per annum

Computer
software 1,412,357 571,800 1,982,322 929,506 270,415 1,198,390 783,932 20%-33%
. (1,835) '(1,531)
v Goodwill 85,71 I 85,711 56,031 s6,031 29.680
Membership
Card / DGCEX
(Nore 11.3.2)
6.011 6,011 4.500 1,51 1 6,011
Membership
Card PSX (TRE 4,926 4,926
(Nore 11.3.2) 4,926
:"
11'3'l Includedincostofintangibleassetsarefullyamortiseditemsstill inusehavingcosiofRs. 1,057million(2014:Rs.3g6million).
11'3'2 This represents amount paid for corporate membership of Dubai Gold
and commodili_es Exchange (DGCEX) held by Alfalah securities (private)
! Limited (the subsidiary)' The subsidiary
has not yet commenced its operations in Dubai Exchange
I to legal restrictions of
ir", noi o""n able to sell the membership due
Y DGcx By'Law. The Board of Directors in their me€ting held on september-i1,"-no
2o1a.ha;;ecided to transfer the membership to
the Holding company' In this respect, the Board had contiacted the manatement
of DbcEX, r"il ;;"; the transfer of membership to rhe
Holding company, upon crearance of pending dues. The rransfer
has not yeibeen compreted. ";;d
Lfc\6^
I
I
t-
35
11.4 Details of disposals of operating fixed assets
Details of disposals of operating fixed assets having cost of more than Rs. 'l,q)0,000 or net book value of Rs. 25O,OOO or above are given below:
D.tcriplioo &cumllalad
v.tur sit
l{ct b@t Iodr ot dirpolal Particul.rr gf fNrchNrcr
dGp.aclation IrcGq3-
RuP.!3 in lmo)--
Fwnlturg and fixtures
It6ms havino book valus of less
than Rs. 250,0@ or cost of
lsss than Rs. 1,000,000 1 Various Various
ComDuters
Items having book value of less
than Rs. 250,000 or cosl of
bss than Rs. 1,000,000 Various Various
Offics oquipment
HVAC 7,720 7,720 250 Bid M/s BaruiTrad€ Ways
Condensing Unit 1.747 1,747 55 8id M/s M. Suleman
Condensing Unit 1,747 1,747 55 Bid M/s M. Suleman
Condensing Unit 1,747 1,747 55 8id M/s M. Suleman
Condensing Unit 1,747 1,747 55 Bid M/s M. Suloman
Gonerator 1,145 1,139 o 309 Bid M/s Ch. Bashir
Generalor 1,050 1,050 at5 Bid M/s Raiz Agri Engg, Works
Generator 2,139 2,139 2,115 lnsurance Claim M/s Alfalah lnsurance
Generator 1,450 1,450 453 Bid M/s Ch. Bashir
Generator 2,335 2,335 158 Bid M/s Brolher Enterprises
Gonerator 1,1?7 1,127 55 Insurance Claim M/s Alfalah Insurance
Gen€rator . 1,214 1,214 348 Bid M/s Ch. Bashir
ATM 945 405 540 144 lnsurance Claim M/s Afalah Insurance
DVR 521 143 378 300 lnsurance Claim M/s Alfalah lnsurance
than Rs. 250,000 or cost of
loss than Rs. 1,000,000 a Various Various
55,r95 52,2f 1 2,924 7,768
Vehicleg
Mercedes-Benz 8,500 6,794 '|,706 1,700 As per Policy Mr. Bahauddin Khan
Mercedas-Benz 8,500 3,569 4,931 4,920 As per Policy Mr. A. Wahid Dada
Toyota Yarls 2,156 2,156 715 Bid Mr. Sayed Bin Sadrul
Toyola Corona Premio 't,032 1,032 625 Bid Mr. Syed Monir Kawsar
Toyota Spacia X-G 1,761 1,761 823 Bid Mr. A.S.Avi
ToFta Yaris 2,156 2,1fi 676 Bid Mr. Rafiqul lslam
Honda Civic 1,455 1,455 637 Bid Mr. Rafiqul lslam
Honda Civic Exi 2,435 2,435 953 Bid Mr. Zahirul lslam
Ford Everest 4,127 4,127 1,476 Bid Mr. Golam Klbda Jahangir
Honda cily 1,060 '|,060 825 Bid Danish Ahmed Khan
Honda Civic 1,895 1,895 1,080 Bid Mahmood Ali
than Rs. 250,000 or cost of
less lhan Rs. 1,000,000 1.853 Various
39,883 Al.2.16 6,637 16,2E3
Total . Decamber 31, 2015 (Noie 112)
Total - December 31, 2014 614.018 133.624 .180.3911 657.856
' Dispoml as lnr Bank's policy ropresents vohblos sold to €mployses as per th€ tems of thea mgloyrnenl
2015 2014
(Un-audited)
12 DEFERRED TAX LIABILITIES, NET (Rupees in'000)
Deferred debits arising due to

Provision for doubtful debts
l-lriaFod-l
Provision against off-balance sheet obligaiions
| 15,706 | | 1s,333 |
lmpairment in the value of investments
Provision against other assets
II 334,s01 || ||
z,zntlu 2z02;0s
215,401
I
I
Unabsorbed tax losses
4,032,000
I sz,zss
3,572,149
|
I
Deferred credits arising due to

Accelerated tax depreciation
trr,-4-Tia[6onnt7a-z,rratl
Gain on remeasurement of held for trading investments
| (80,172)l| (s6,034)l
Surplus on revaluation of available for sale investments
| (3,462,071)l| (2,114,1s711
Surplus on revaluation of operating fixed assets
q"^
I talr,gozll I tz+o,eeztl
Le (5,858,270) (4,393,187)
:: (1,826.270\ (821 .038)
I
I
l-
36
12.1 Reconcillatlon otd.ferrod tax asseG / liabilitie3

Recoonized
Recognlzgdln *""Ll;:?o'"
in pro-fl ana Decomber 3i, .R"1os1rzea.
In tsrortr and
January 01, .Los3 uomprongnstva
^^--"111-^, 2011
comprehensivo Decambor 3i,
2011 -
Account Income / surolus - (Un-audtedl o"lootin, lncome ., surptus 2015
-_ _-.._,.._.1 . on re::::Ton ol
(Note2el ";::::T'" (Noro 2e)
(Rupees in'000)
Defored debit3 arlslng duo to
Povision for doubtful debts 1,362,466 (256.053) - 1,106.413 328,196 . 1,434,609
Provision against off-balance sheet obligations 1,140 r4,193 - 15,333 373 - 15,706
lmpairmenl in lhe value of investrnents 2,172,645 30.064 - 2,202,709 44,475 - 2,247,1U
Provision against olher assets 85,429 129.972 - 215,401 119,100 . 334.501
Unabsorued tax losses 47,818 (11.574) . 36,244 (36,244) - -
3,669,498 (93,398) - 3,576,100 455.900 - 4.032.000
Deforrod crodlts arislng due to

Accelerated tax depreciation 1,376,723 105,990 - 1,482,713 (8,653) 1,474,060
Gain on remeasurement of hetd
fof trading investrnents 2,963 56,423 - 59,386 22,248 81,634
Surplus on revaluation of available
for sal€ investments 272,280 1,841,877 2,'t14,157 I,346,452 3,460,609
Surplus on revaluation of operating fixed assets
v Net defoned tar a33et3 / liabilitaos 1.252,325 (237,066) (1,836,297) (821.038) 461,035 (1,466,268) (1.826.270)
Note 2015 2014

(Un-auditod)
{Rupeos in'000}
t3 OT}IER ASSETS
Income / mar*-up accrued in local c1Jnencl 16,770,774 10,486,332

Income / mark-up accrued in foreign cunencies 754,640 571,802
Advanc€s, deposils, advance rent and other prepayments 3,499,927 3,580,401
Non-banking as$ts acquired in satisfaction of claims 13.1 675,325 528,135
Advances against fulure murabaha 3,653,031 5,273,422
Advances against future iiarah 411,162 439,019
Advancas against diminishing musharakah 1,744,135 278,802
Advances against lstisna I,022,590 667,250
Advances against salam 30,000
I Tax recoverable 2,277,787
: Dividend receivable 7.103 12,?7'l
Unrealised gain on foruard foreign exchange conlracts 739,757 1,105,710
Unroalbed gain on interest rate swaps 1,888 7,153
I
Roceivable from brokers 6,143 6,143
I Stationery and stamps on hand 82,833 I 1,653
'r
U Defined benefit plan 34.1.3 40,003 238,523

Balance held with bank 13.2 413,657 396,841
Others 13.4 166.406 551,056
I 30,019,374 32,532,300
13.3
!
Provision held against other assets (1,318,15't) (1.062,842)
Y
_28 :t 0 1,2?3_ _gl-,4 6s,$!_
13.1 Madct value of non-banking assets acquired in satisfactiori ot daims 705.605 5?4.552
Y 13.2 This rePresents an amount of USD 3.949 milliofl held in the Holding Company's Nostro Account in New York, United Statas of America, which has been put on hold by a
@mmercial bank Pursuant lo receipt of notice of seia.re based on the order passed by he Distict Coud, Dist ict of Columbia, USA, as moro fully detailed in note 21.4.2 to
lh€se consolidated linandal statements.
Based ofl lhe fact that the said amount is not readily available lor use of th€ holdirE company, the amount has been reclassitied trom Balances with Other banks to Other
Assets. Allhough the management is @nlident that the matter witl be decided in the Group's favow, as at Decemb€r 31 , 2015, the Group has maintained full provision against
the sam€ (Decemb€r 31, 2014: USO 1.975 mi[ion).
2015 2011
(Un-audited)
v 13.3 Proybion hold against othor aasets (Rupoos In'0001
Openlng balance 1,06'2,U2 712,424

I Charge for the year 322,391 385,074
I
Transfened to operating fixed assets (26,1 3e)
- Payment out of provisions
Amountwitten off
122,097) (6,136)
(?2,3221 (2,2531
Exciarq€ and olher adjustments (22,6631 (128)
Closing balance
__J. l!l_ _J,992p{2
13.'0 This includes an amount of Rs. 1 12.350 miltion given as advance against issuance of shares lo an associabd company Sapphire Wind power Company Limitod.
(f r{r,-
E
\J
37
Note 2015 2014

(Un-audited)
(Rupees In'000)
14 BILLS PAYABLE
ln Pakistan 9,733,929 | 1,632,488

Outside Pakistan
r_ 125,667
9,73:!,929 11,758,155
15 BORROv\,|NGS
In Pakistan 1A{,187,489 50,282,8'18

Oulside Pakistan 8,20s,709 4,950,098
_12_!93_199_ _{s 232_91-€_
ts.1 Particulars of borrowings with respect to currencies
''v In local currency 164,187,489 50,191,363

In foreign currencies 8,205,709 5,041,553
_l_72,3ex1!g_ __9933?€l-a_
15.2 Details of borrowings secured / unsecured

v
Secured
Borrowings from State Bank of Pakistan under:
t---9m
Export refinance scheme 15.3
Long-Term Finance lor Export Oriented Projects
Scheme (LTF-EOP)
Long-Term Finance Facility 15.4
LrJ[xi]
Modernisation of SMEs
Financing Facility for Storage of Agdculture produce (FFSAP) 15.5
Repurchase agreement borrowings 15.6
146,502,037 44,930,426
Unsecured
Call borrowings 't5.7 -J.z-iol,soolt-T6a85esl
Bai Muajlal
Overdrawn nostro accounts
15.8
II z,sss,ass |
s3,808 |
|I 3,s62,s37
91,455
|
|
25,891,161 10,302,490
:ffi-:r-
15.3 This facility is secured against a demand promissory note executed in favour of the State Bank of Pakistan. The mark-up rate on this facilily
ranges from 2.50o/o lo 4.50Yo per annum (2O14: 5.50o/o to 7.5O% per annum) pa).able on a quarterly basis.
'|-5.4 This facility is secured against a demand promissory note execuled in favour of the State Bank of Pakistan. The mark-up rate on this facility
ranges from 3.00% to 4.50% per annum (2014:7 .25o/o to 1 1 .00% per annum) payable on a quarterly basis.
15.5 This facility is secured against a demand promissory note executed in favour of the State Bank of Pakistan. The mark-up rate on this facility is
6.25% per annum (2O14:6.25% to 6.50% per annum) payable on a quarterly basis.
15'6 This represents repurchase agreement borrowing from SBP and other banks at the rate of 6.047o and 6.50% per annum respectively (2014:
9.50% and 9.60% per annum) having maturities upto January 2016 (2014: January 2015 and February 2015).
t
Y
15.7 This represents bonorvings from financial institutions al mark-up rates ranging from 0.507o to 6.08% per annum (2014:1.00o/o to 9.50%) having
maturities upto March 2016 (2014: September 2015).
15.8 This represents borrowings from financial institutions at mark-up rates ranging from 6.35% lo 7 .45o/o per annum (2014: 9.20% to 9.50%) having
maturities upto April 2016 (2014: Aprit 2015).
! 2015 2014
(Un-audited)
\t 16 DEPOSITS AND OTHER ACCOUNTS (Rupees in'000)
Customers
I lt so4ps3 | l- 1s3,.4?6p?B I
I
Fixed deposits
i
v Savings deposits 210,36s,288 | | rso,rre,saz
I 2U,743,586 I
Cunent accounts - non-remunerative
| 6,849,023 | | 215,497,4ss I
Others | | I 6,728,458 I
589,565,230 571,821,178
Financial Snstitutaons
Remunerative deposits
Non-remunerative deposits @lkF3rJs6l
I 1,694.779 I | 601,570 |
50,571,931 34,135.726
16.1 Particulars of deposits ::640.137.161 605.956.904
In local currency
539,878,360 521,117,663
In foreign currencies
100,258,801 U,839,241
l- ktr\,,- _-e9J_1t1pl- _q95,9998!_
38
Note 2013 2014

(Un-audited)
(Rupees in'000)
17 SUB.ORDINATED LOANS
Term Finance Certiflcates lV. Private, Unsecured 4.988.000 4,990,000

Mark up Eilher of the following options with the hotder:
r, - Floating coupon of Base Rate + 2.50 percent
(Base Rate is defined as the simple average of the ask rate of the six months KIBOR
prevailing on the tirst day of the start of each half yearly period for mark up due at the end of
that period)
U - Fixed coupon of 1 5 percent per annum payable semi-annually in arrears
Subordination The TFCs are subordinated as to the payment of principal and profit to all other
indebtness of the Bank.
lssue date December 2009
Rating AA-
Tenor Eight years
Redemption The instrument is structured to redeem 0.26% of principal, semi-annually, in the first
78 months and remaining principal ol 33.247% each of the issue amount
respectively, starting from the 84th month.
Maturity December 2017
Term Finance Certlficates V - Quoted, Unsecured 4,995,000 4,997.000

Mark up Base Rate + 1.25 percent
(Base Rate is defined as the simple average of the ask rate of the six monlhs
KIBOR prevailing on one business day prior to each redemption date for the
redemption amount payable on the beginning of each semi-annual period for the
markup due at the end of that period.
Subordination The TFCs are subordinaled as to the payment of principal and profit to all other
indebtness of the bank.
lssue date February 2013
Rating AA-
Tenor Eight years
Redemption The instrument will be struclured to redeem semi-annually in such a way that 0.30%
of the principal will be redeemed in the first 90 months and remaining principal of
99.70% at maturity in the 96th month.
Maturity February 2021

I ____s,s83,999* _lp87,ogg_
E 18 OTHER LIABILTTIES
Mark-up / return / interest payable in local currency 1,969,052 3,246,871

Mark-up / return / interest payable in foreign cunencies 280,1 18 291,532
I
Uneamed commission and income on bills discounted 437,666 436,091
v Accrued €xpenses 3,881,060 3,187,540
Branch adjustment account 947,438 149,520
Payable against redemption of credit card reward points 't22,804 117,336
Taxaton payable 399,559
Security deposits 4,790,001 4,241,542
Unclaimed dividend 58,435 49,029
Unrealised loss on foruard foreign exchange conlracts 729,875 't,416,275
Unrealised loss on interest rate swaps 88,804 24,821
Payable to brokers 2,995
Provlsion against off-balance sheet obligations 18.1 77,590 85,953
Workers'Welfare Fund 475,569 402,820
Compensated Absences 18.2 313,930 225,720
I Others 677,562 757,177
l
15,249,463 14.635.222
- 18.1 Provlslon agalnst off-balance sheet obligations
Opening balance 85,953 49,075

Charg€ for lh€ year 1,066 38,453
Exchange and other adjustments (9,429) (1,5751
Oosing balance
__Jl@_ ______qs,9g3_
18.2 During the year, a valuation for compensated absences has been carried out by an actuary appointed for the purpose. Major
\- for the purposes of valuation are as follows:
assumptions considered
Mortralily Rate sLlc 2001-2005

I
Withdrawal Rate Ag€ dependant withdrawal table; the average turnover rale over nexl one year is around 21%.
t- Salary Increase rate 10.0% p.a.
(6 x'-'
\
SHARE CAPITAL
19.1 Authorised capital
2015 2014 2015 2014

33qq.Aqq.qqq- 3399Jqgpq9- Ordinary shares of Rs. 10 each 23,000,000 23,000,000

:+
19.2 lssued, subscribed and paid up capital
2015 2014 Ordinary shares of Rs. 10 each 2015 2014

(Number of shares)
865,399,937 862,836,450 Fully paid in cash 8,653,999 8,628,364

724,406,250 724,406,250 lssued as bonus shares 7,244,063 7,244,063
1,589,806,187 1,587,242J00 15,898,062 15,872,427
During the year the Bank has issued 2,563,487 ordinary shares having face value
of Rs. 10/- each to its employees on
excercise of options vested under the Employees Stock option scherie (ESoS) (note
34.2). The paio-up capital of the
Bank before issuance of shares to employees was Rs. 15,872,427,000 (divided
into 1,sgl,242,i00 shares of Rs. 10
each) an?1 after issuance of shares to the employees has increased to Rs. ts,azg,o61,g7o.
(divided into 1,5g9,g06,1g7
shares of Rs. 10 each).
Note 2015 2014

(Un-audited)
(Rupees in'000)
20 SURPLUS ON REVALUATION OF ASSETS . NET OF TA)(
Surplus arising on revaluation of:

-Operating fixed assets
20.1 4,559,031 3,070,481
- Available for sale securities 20.2 6,383,901 3,938,759
10,942,932 7.009.240
24.1 Surplus on revaluation of fixed assets
Surplus on revaluation of operating fixed assets at January 01

, 11.2 3,811,36s 3,897,206
t
Transferred to retained earnings in respect of incremental depreciation
Y charged during the year - net of tax
Related deferred tax liability in respect of incremental depreciation rFa3lq
ll (18,?45)l
I
Y
charged during the year
Surplus on revaluation of fixed assets recognized during the year I tre,zszyl
1,643,150
| (32,283)l
Reversal of surplus on account of disposal of property
11.2
Ir-l |
I
1,589,634 (85,841)
5,400,999 3,81 1,365
Related deferred tax liability on surplus as at January 01,
740,884 765,209
Deferred tax liability charge / (reversal)
Defered tax liability in respect of incremental depreciation |-rEfi6-l
tl l-(ffi0i1
tl
charged during the year
I (rs,zas)l
lrs,zgzll |
101,084 (24,325')
I
841,968 740,884
i,
surplus on revaluation of available for sale securities and derivative @'51- -dro78i-
financial instruments
' Government securities

9,257,769 5,154,286
Shares / units / certificates / sukuks / bonds
608,591 857,817
l- Term fi nance certificates
33,560 40,813
Interest rate swaps'
(55,946)
I 9,843,974 6,052,916
Related deferred tax liability
tr share of surplus on revaluation on associates' available for sale
(3,460,60e) (2,114,157).
securities 536
k?nAr'
6,383.901
\ ::- 3,938.759
40
2015 2014
(Un€udited)
(Rupees in'000)
21 CONTINGENC]ES AND COMMITMENTS
2'1.1 Direct credit substitutes
i) Govemment
743,580 937,508
ii) Banking companies & other financial institutions
iii) Others
311,83s 2,606
2,094,645 1.756.948
21,2 Transaction-related contangeniliabilities _g,t!9J99_ __3992@_
- i) Govemment
27,412,625 26,536,835
ii) Banking companies & other flnancial instilutions
163,826 506,432
iii) Others
12,7't9,286 8,67 t,481
21.3 Trade.relatedcontingenttiabilities
40,295,737 35.714.748
Letters of credit
52.107.916 48,045.564
Acceptances
ffiffi
21.4 Othercontingencies
21.4.1 Claims againsl the Bank not acknowledged as debts

J4gAtl3g_ __9819_
These mainly represents counter claims filed by the borrowers for restricling the holding
h)4cothecated / mortgaged / pledged assets kept as security), damage to reputation
-
company from disposal of assets (such as
and caseJ fited by Ex. emptoyees of the holding company
suslained by them consequent to lhe termination from the Bank's employment. Based
11t^ô-"118t on tegal advice and / or internal
assessment' management is confident that the matters will be decided in holding company'i favour
and the posslbility of any outcome against
the Group is remote and accordingly no provision has been made in these consolidated
financial statements.
21'4'2 An amount of USD 3.949 million ("the Anount") in holding company's nostro account in New york,
united states of America has been put on
hold by a commercial bank pursuant to receipt of notice of seizure based on the order passed
by the Districl court, District of columbia, usA.
The order was issued al the request of United States Department of Justice (DoJi
which cLims irs rights mrougn fiting a complaint for
forfeiture in rem of assets of a third party in Atghanistan
- a customer of the Bank ("Third party-custome/) - and obtained a court otder to
hold/seize certain amount in the Nostro accounts of different banks (including Bank
Alfalah) wherein the Third party . Customer was
maintaining bank accounts. As a result the amount has been put on hold for the time
being in Nostro Account of the Bank in New york. The
dispute is held betrir'een the United States Government and the Third Party - Customer,
who provided logistic services to the United States
Military in Afghanistan. The amount put on hold is equivalent to the cusiomers' balances
held/blocked-by the Bank during the period. In
January 2014 the holding company had to release the accounls of the Third Parly
-
Afghanistan. The holding company has filed a representation with the DoJ's to challenge
Custom"r on tp".in" instructions of Central Bank of
its right to hold the amount and wilh a request to
release the same as the Bank did not have any involvement in the dispute betueen
DOJ ind the-Thkd parry - Customers.
Based on internal assessments and careful analysis of the precedents in relation to other
banks involved, lhe management is confident that
the Group has a relatively strong case and lhe matter will be decided in the Group's favour.
t' considered a provision of USD 3.949 million against lhe same (December 2014: USD '1.975
However the Group has as a matter of prudence
million) as referred to in note 13.3 to these
Y consolidated fi nancial statements.
The holding oompany filed a case against the above mentioned Third Party Customer primary
in commercial court in Afghanistran. In June
t, 2014, the court did not accede claim of the Bank and advised it to pay uso o.szo million
as'compensation to rhe customer along with
government / court fee of AFS 5'268 million. The Bank filed an
Y appeal in the appellate court againsl ihe said judgment, in wirich the iarlier
decisions were upheld. The said amounts have been charged off duiing the cunent year.
201s 2014
(Un-audited)
(Rupees in'000)
21.5 Commitments in respect of forward lendings
Commitments to extend credit

Commitments in respect of investments _8222ffi_ __9899!!_
,- _ _lglEglg_
21.6 Commltments in respect of forward exchange contracts
li
i. Purchase
98,261,212 69,435.889
Sale
ffiffi
21.7 Commitments for the acqulsition of fixed assets
_?gJp- _?9J2n
21.8 Commitments in respect of repo transactions
I Repurchase -:
J2922gp1g_ Jg,2!!,j44
21.9 Other commitments
I Interest rate swaps

I
Donations _9,99?p39_ ___A4{9gt_
l-
__?1999_ ____11!99_
21.10 Contingencyfortax payabte (note 29.1)
0tf rt(-
4l
DERIVATIVE INSTRUMEI{TS
Derivatives are a type of financial contract. the value of which is determined by reference
to one or more underlying assels or indices. The majo, categories
of such conlracts include fonivards,.futures, swaps and options. Derivatives also include
structured financial products that have one or more characteristics
of fonrards, futures, swaps and options.
At present the Group deals in the following instrumenls:
- Fon,lrard Exchange Contracts

- Interesl Rate Swaps
- Share Options (note 9.15..1)
22.1 Product analysls
__._ Interesi Rate Swaps

2015 2014(Un-audited)
Counter Parties ,, ,
Notional
No. of No. of Notional
Contracts Principal' Contracts principal.
(Rupees in'000)
Wlth Banks for
Hedging
Market Making
r--3 l-'rylrTl|-,'ryl
! Wlth Fls other than banks
Hedging
Market Making
r-l[-:lnn
f-llt-:lf-:ln
Wlth other entlties for
Hedging
Market Making
Total
tt
'
Hedging
Market Making
At the exchange rate prevailing at the year end

[-Tltelr-T|j3-]El
22.2 Unrealised (loss) on derivatives financlal instruments.
:
rr Contractual, notional amount Unrealised qain / {lossl
2015 2011
(Un-audited) {Un-audrted}
----- (Rupees ln ,000) ---_*
Interest Rate Swaps
LJ ___a,s62f?9_ __gJl4.ggl- ___l€919I _l1z.6gqL
22,3 llaturlty Analysls - Interesl Rate gwaps (Fixed Rate)
I Mark to Market
Remalnlng Maturlty Number of Notional Negativc Posltive Net
Contracts Principal
Upto 1 month
t; 1 lo 3 months
3lo 6 months
t- 6 months to 1 year
1 to 2 )rears : :
2 to 3 years
l' 3 to 5 lrears 13 5,287,064 (44,341) 1,888 tlzosst
Y 5 to 10 )€ars 5 1,675,856 (44.263) (44263)
Above 10 years
t -d6.zBzo-,- -T8F,tit :-6e- :-rcm'

2015 2011
23 MARK.UP / RETURN / INTEREST EARNED
--iE- (Un.audrted)
(Rupees in'000)
a) On loans and advances to:

i) customers
ii) linanciat institutions
25,459,027 28,014.910
272,510 342835
b) On investments in:
l i) held fortrading securities
Y ii) available for sale securities
1,140,627 992312
iii) held to maturity securities
22,521,676 17,826.937
9,105,351 6,219.695
c) On deposits with financial institutions
d) On securities purchased under resale agreements 2,636,634 1,523.447
288,888 453.916
61,424,713 55,374.052
::- 61.424.7't3
MARK-UP RETURN / INTEREST EXPENSED
I
'
IJ Deposits
Securities sold under repurchase agreements 22,651,179 27,009.835
Other short term borrowings 6,755,279 1,952..164
Term finance certificates 2,042,429 3,035232
I
Brokerage and commission 1,'t02,752 1,249.709
(Clt/* 258,830 247.404
32,810,469 33.494.U4
I
42
Nola 2015
(Un-audited)
25 GAIN ON SALE OF SECURTIES. NET (Rupees in'0001
Federal Govemrneni Securities

- Market Treasury Bills 350.718 28,334
- Pakislan Investrent Bonds 774,197 112,329
OveGeas Government Bsds 170.371 121.594
Shares / Mutual Funds 185,356 746,901
Sukuk Bonds
. 54,352 49,009
26 OTHER INCOME
-__J.St4.994_ _____l-09il6z-
Gsin on sale of operating tixed assets 11.4 13,975 177,462

Postag6, telex seryice charges etc. 716,323 506,669
ia _____-239.29s_ ___0-g4J3L
27 ADMINISTRATIVEEXPENSES
Non executive directors fee & allowan@s 91,967 83,683

Salaries, allowanes. etc. 27.1 9,48t,183 8.607.814
Charge for defined benelit plan 27.2&34.1.4 290,282 283,262
Contribution to defined @ntributim plan 35 302,691 271,699
Chargo lor employee stek option schere 34.2 94,830 53,663
R6nt, taxss, insurance, electricity, etc. 3,392,584 3,360,292
Legal and professional cfiarges 431,737 329,986
Comunicatims 744,093 741,137
tr Repairs and mintenance 1,530,904 1.162,487
Stationery and printing 406,288 459,553
Advertisernent and publicily 869,247 522,372
Capital mrk-in-progress wiiten off - 13,761
Donaiions 27.5 57,638 32,695
AuditoE remuneration 27.4 23,449 22.881
Depreciation 11.2&27.5 1,916,229 1,642,965
Af,rortisation of intangible assets 11.3 275,439 271.926
Travelling, onveyance and tuel expenses 496,615 523,284
EnlertainrenL 215,397 255,504
Subssiption 37,178 40.866
V Out$urced peons and riders expenses 274,063 245,745
Security seruice charges 838,223 771,697
Others 449,703 503,841
____22.1!W40_ ____2929,1L1L
27.1 In addition to the remuneration as disclosed in note 36 and note 40.10, payment of Rs. 128.310 million (2014: Rs. 120 million) on account of pertomance bonus for the year
2014 was made to the Chief Executive Officer.
27.2 This includes an arnount of Rs. 171 thousand (2014: Rs. 145 thousand) being charge considered by the subsidiary against its untunded gratuity scheme.
2015 2014
(Un-audltsdl
2f .3 Donatlons
{Rupees ln'000)
Acumen Fund Pakistan 4,208
Institute of Business Administration zz,ooo
Jaipur Foot 5,638
Karachi Educatim Initiative (KEl) 25,000 25.000
Network of Organizations Working for People with Disabilities - Pakistan 3,447
Th€ Aga Khan University lnm
\
_____tz.8e_ _____12"09L
Y
The CEO ol the Bank is one of the directors of the KEl. Other than this none of the directors or their spouses had any interest in the donees
2015 2014
i' (Un-audltod)
27.1 Audlto6'romunsrallon (Rupees In'000)
ta
Audit fee 8,836 8,210
Half yeady review 2,000 1,800
Special ceriifications and sundry advisory seryices 5,358 6,106
Tax Seryies 372 125
Out-of-p6ket eJeenses 1,188 999
17,754 17 ,240
Fse tor audit of foreign brancfies 5,695 5,641
_____23!aq_ tt AA1
27'5ThisincludesanamoUntofRs.50.591rit|iononac@Untofacce|eEteddePfeciationconsidereddUrin9thecurrentyearinrespectofuntrad/consub|g
during the physi€l iagging exercise conductsd by the holding company.
2015 2014
{Un€uditedl
lr OTHER CHARGES
{Rupees In'000}
Y Penallios imposed by the State Bank of Pakistian 42,892 .t7,690
Worke6'Welfare Fund 28.1 286,897 188,687
____-_329J99_ ___29q,gt_
28.1 As per the Worke/s Welfare Ordinance, lg71 the Bank is liable to pay Worke6' weltare Fund @ 2% of accounling profit before tax or declared income
as per the income tar
retum, wtridrever is higher.
2015 2011
(Un-audlted)
29 raxartol (Rupees In'000)
I
Fo? lhs year
v Current
5,036,065 3,123,661
Defened (461,035) (272,1941
For pdor yaars

I
Current
U Oeferred
29.2
I soz,aril
|
t tlzoslsil
509,260 I
z(At*- 567,813 38.427
____5J{agtl ____2399.99!
43
25.1 The income tax a$sssrents of the holding cod|pany have bsen finatized upto and induding tar year 2014. Maners ot disgremnf exist between the holding corsEny and iax
authorities fs various assessnFnt ltsa6 and ars pending with the Corrt{ssions ot Inland Revenuo (Appeats}, App€llale iribunal Inland Revenue (ATIR), High Court-of Sinrfh
and Suptsme Court of Pakistan. The issue minly r€tate to addition of nurk up in suspense to incore, taxability of profit on govsmment smritigs, bad debts witten off and
- disallMnces
relating to profit and loss expen*s.
ln tespect of t3x yea6 2008 to 2013, tha tax authodties have Eised erlain issuss induding disallmnce of expendiiure on ac@unl of non-deduction of withholding ta& default
in paymonl ot WWF, all@tion oa expenss to dividend and capital gains and dividend in@me tom rutual tunds not being taken under incomg fiom business, resultrng rn
additional dsmand of Rs. 1,674.708 rflliq. As a result of appeal fled befote Comissioner App€als against these lssues, reliel has b6en provided tor tax arnounl of Rs.
952.2l2mi||ionwtlereasappea|efstordersarepending'Themanaggnent'sapPea|sinrespectofal|oca]iono'expensesag8instdividendandcapita|9ainar€
Comissionor Appeals. The management is @nltdent that this mtter witl be decided in favour of lhe Group and onsequentty has not made any provision in resped ;f these
afDUnts.
During tho year, tho Bant has received amended assessnrent orders for Tar Yea6 from 2O1O to 2013 wherein Tax Authorities have disallowed depreciation on liara Assefs
considering it Finance Lease and raised a tar demnd of Rs. 990.423 million. As a result of appeat liled bettre Cmissioner Appeal, relief is provided to the Bank to the extent
of pdncipal a|wnt which is part of liarah rentals and should nol be taxed. Aeordingly tax amunt is reduced to Rs.96.l6O million. The Bank has filed appeal before Appeilate
Tribunsl. The Group has noi made any provision against these ordere and the mnagerent is of the view that the mtter will be settled in Bank's favour through appeltafe
Prcess,
In respecl of monitoring of withholding taxes, tho Bank has received Erious ordeE ftom tax authorities. The Group has not mde provision arcunting to Rs. ig.t.S97 million
against tax domand (after reduction on rectitications) tor tax years 20ll to 2015. As a result of appeal liled before Comissioner Appeals, relief has been provided for
anroUntingtoRs.10.024mi||ionwhereasappea|ef'ectordersaretEnding.Toobtainre|iefmrestoftheamunt'theBankhaseithsr'i|edappea|sbeforevariousxappeliate
forum or intend lo obtain relief through rectification ordeB. The mnagerent is of the view that the mtter will be setfled in Banfs tavour.
During the year, the Eank has received an order trom a provincial tax authority wherein tax authority has disallowed certain exemptions of sates tax on banktng seruices and
demanded sales lax and penalty amunting to Rs. 97.560 million (excluding defautl surcharge) for the period trom Juty 2011 to June 20i4. Bank's appeal againit this order is
cunently pending before Comissioner App€als. The Group has not firade any provision against this order and the mnagerrent is of the view thal the matter will be settled in
Eank's favour thrcugh appellate proc€ss.
li 29.2 The Finance Act, 2015 has introduced cerlain arndtnents relating to tantion of banking companies. As per these arnendments banfs income from dividend and capital gains
are now taxed at the normal tax rates inslead of previously applicabte redu@d rates. In addition, one time super tax at. the rate ol 4o'/o of the taxable income has also been
levied. These arnendments apply retrospectively for lhe tax year 2015. i.e. year ended December 31, 2014. The effect ot above arendments have been incoroorated in these
linancial statements and an amount of Rs. 567.813 million has been recognized as prior year tax cfiarge. The banking industry is of the view that this may be discriminatory
againsl banks.
(Un-.udlred)
29.3 Relationshlp between lax erpon3o and accountlng prcflt (Rupe6s In'000)
Profit befm tiaxation ____12.W.J12_ ______g=€ZZJ5L

Tax at the applicable rate of 35% (2014: 3570) 4,430,010 3,037,075
Effect of:
- incorne chargeable to tax at reduced rates (6,631) (207,889)
- p€manent differences '15,525 6,557
- l,ax charge pertaining to overseas branches 88,7t5 84,799
- tax for prior years 567,813 39,206
- olhers 47,411 (69,854)
Tax expense fof the year _5 11) A4a ? 8Aq Rq/
30 EARNINGS PER SHARE
30.1 BASIC EARNINGS PER SHARE
Profit afier laxation for the year attributable to equity holders of the Bank ____1t02-060_ ___lJi525l_
(Number ot shares In thousand)
t' Weighted average number of ordinary shares a72l!1
_____11!92!l_
: ______1
(Rupses)
l' Basic eamings per share ________!.12_ _ .1!_

Y 30,2 OILUTED EARNINGS PER SHARE
(Rupees In'000)
Prclit afier taxaiion for the year attribulable to equity holdefs of the Bank _____ll!2_660 5 ?6q r5r
(Number of sharss In ihousand)
Weighted aveEge number of ordinary shares
(Rupees)
Dilutsd eamlngs per share

_______!J!_
l, 30.3 R.conclllatlon of baslc 8nd dllutod eamlng per share

(Number of shares In thousand)
Wgighled average numb€r of ofdinary shares 1,589,281 1,378,741

Plus: Employee stoc* option schems 6,044
Shares under agreement with Intemational Finane Corporatim 1.340
Dilutive potenlial ordinary shares
---L590ôo5- ---iz.gJ4l
2015 2011
\ {Un.audlted}
CASH AND CASH EQUIVALENTS
(Rupees In'000)
Cash and balances with treasury banks

6 62,368,827 50,5r5,645
Balances with other banks
7 16,583,138 1 1,937,548
Call mney lendings
14,728,532 3,521,485
I Overdram nostro acclunls (53.808) (91,455)
IJ ( 0 cra- ___1E 020.ae9_ __---0LS!322L
I
44
32 CREDIT RATING
PACRA has assigned a long term credit rating of AA [Double A] and a short term credit ratir-g of A,1+ (A one plus)
to the holding
company as at June 2015 (2014: AA [Double A] for long term and A1+
[A one plus] for shon term).
Note 2015 2014

(Un-audited)
33 STAFF STRENGTH (Number of employees)
Permanent 7,605 7,524

Temporary / on contraclual basis 233 276
v Bank's own staff strength at the end of the year 7,838 7,800
Outsourced 2,482 2,731
Total staff strength 10,320 10.531
34 EMPLOYEE BENEFITS
34.1 DEFINED BENEFIT PLAN
H 34.1.1 Principal actuarial assumptions
The projecled unit credit method, as required by the International Accounting Standard 19 - 'Employee Benefits', was used for
actuarial valuation based on the following significant assumptions:
2015 2014
(Un-audited)
I
Discountfactor used 10.00% 11.25%

\. Expected rate of return on plan assets 10.00% 11.250/o
Expected rate of salary increase 10.00% 11.25%
Normal retirement age 60 Years 60 Years
The disclosures made in notes 34.1 to 34.1.13 are based on the information included in ie actuarial valualion reoort of the
Bank as of December 31, 2015.
Noie 2015 20't4
(Un-audited)
34.1.2 Reconciliation of receivabte from defined benefit plan (Rupees in'000)
Present value of defined benefit obligations 34.1.6 1,743,133 1J70,352

Fair value of plan assets 34.1.7 (1,783,136) (2,008,875)
34.1.3 Movement in (receivable) / payable from defined benefit plan
__I4o,ggql ___(238,529I
t'
Opening balance (238,523)
I 1',tg,522
Charge for the year - in profit and loss account 34.1.4 290,111 283,117
Other comprehensive lncome 198,962 (357,045)
!' Adjustments
Bank's contribution to fund made during the year
(442)
(290,1 (283,1 17)
:a 1 1 )
Closing balance (40,003) (238.523)
34.1.4 Charge for defined benefit plan
Recognised in profit and loss account

Cunenl service cost
Net interest @l--5d^60-tl
| (42,711)l I gZ,SrO I
290,1't1 283,117
l| -8fr4m
Recognised in other comprehensive tncome
Actuarial gain on obligations
I Actuarial (loss) / gain on Assets (451,$4)l I gso,zza I
(198,962) 357,04s
Total 489,073 (73,928)
34.1.5 Actual return on plan assets

?2s,357 5't7,750
34.1.6 ieconciliation of present value of obligation
Present value of obligation as at January 1

Current service cost
1,770,352 1,547,856
332,822 250,607
Interest cost
I 182,824 193,482
Benefits paid
(2e0,4e3) (221,326)
Remeasurement gain on obligation
Present value of obligation as at December 31
(252,372\ (267\
1
Kfrlc' __1J7Wa_
-_1,Z4AES_
45
Note 2015 20,t4

(Un.audited)
34.1.7 Changes ln the falr value of plan assels are as follows: (Rupees in'000)
Opening fair value of plan assets

2,008,875 1,429,334
Expected return
225,977 160,972
Contributions by the Bank
290,1 11 283,'t17
Benefits paid
(290,493) (221,326)
Remeasurement (loss) / gain
(451,334) 356.778
Fair value at end of the year
34.1.8 1 ,783,1 36 2.008.875
ti
34.1.8 Plan assets consist of the foilowing:
2014 (Un-audited)
(Rupees in'000) Yo (Rupees in'000) o/s
Ordinary shares 366,896 21% 427,280 21%

Term Finance Certificates 27,572 2Yo 45,727 zVo
: Pakistan Investment Bonds 562,446 32o/o 876,333 440/o
Units of mulual funds 301 ,916 17o/o 335,449 17o/o
Cash and bank balances 524,306 29o/o 324,086 160/o
1,783,136 100% 2,008.87s 100o/o
34.1.9 Amount for the current year and the previous four years of the present value of the defined benefit
obtigation, the fair value of plan
assets, surplus / deficit and experience adjustments arising thereon are as follou6:
2015 2014 2013 2012 2011

(Rupees in'000)
Defined benefit obligation 1,743,133 1,770,352 ,s47,856 ,372,290 1,208,509

1 1
Fair value of plan assets 1,783,136 2,008,875 1,429,334 1,182,931 964,669
Surplus / (deficit) 40,003 2w___(1lg[?21 (18s,3se) (243,840\
Experience adjustments on ptan liabilities 252,372 267 (56,1?71 56,038 (23,6s4)
Experience adjustments on plan assets
34.1.10 Expected gratuity expense for the next year

I
Y Expected graluity expense for the year ending December 31, 2016, r,rorks out to Rs. 260.795
million.
34.1.1 I Sensitivity Analysis

I
Y Present Value of Defined Benefil

Particulars Obligation Percentage Change
(Amount In'000)
Sunent Liability 't.743.1U
+1% Discount Rate
1.541_08s 1',!.590/,
-1% Discount Rate 1.986.97s 13.9901
ts1% qalary Increase Rate
1,984.563 13.850/,
'170 Salary Increase Rate 1,539.398 11.690/,
t10% Withdrawal Rates
1.687.258 -3.210/,
-107o Withdrawal Rates
1,819.787 4-400/
1 Year Mortalitv aoe set back
1.74,!-.979 0.1101
1 Year MortaliW aqe set fonn ard 1.739.490 -0.210/,
34.1.12 Maturity Profile
I
46
34.1.13 Risks Associated with Defined Benefit Plans
(a) Investment Risks:
The risk arises when the actual performance of the investments is lower than expectation and thus creating a
shortfall in the funding objectives.
(b) Longevity Risks:
The risk arises when the actual lifetime of retirees is longer than expectation. This risk is measured at the plan
Y
level over the entire retiree population.
(c) Salary Increase Risk:
The most common type of retirement benefit is one where the benefit is linked with final salary. The risk arises
when the actual increases are higher than expectation and impacts the liability accordingly.
Y
(d) Withdrawal Risk:
The risk of actual withdrawals varying with the actuarial assumptions can impose a risk to the benefit obligation.
The movement of the liability can go either way.
-
34.2 EMPLOYEES STOCK OPTION SGHEME
v
The holding company grants share options to its employees under the Bank's Employee Stock Options Scheme
(ESOS), as approved by the shareholders and SECP vide its letter No. SMD/C|W/ESOS1O212O|3 daled 27
December 2013.
Under the Scheme, the holding company may grant options to certain critical employees selected by the Board
Compensation Committee to subscribe upto 40,474,689 new ordinary shares over a period from 2014 to 2016.
As per the Scheme, the entitlement and exercise price are subject to adjustments because of issue of right
shares and bonus shares. The options carry neither right to dividends nor voting rights till shares are issued to
employees on exercise of options.
The grant dates and the vesting period for the options are laid down under the scheme. The options vest over a
three year period with one third of the options vesting on complelion of each year of service from the date of
grant. The options not exercised on completion of first and second year of vesting may be carried forward to be
exercised on completion of three year period. After the expiry of the third exercise per:iod, the option holder will
lose all the rights of exercise for any remaining options not exercised.
The details of the options under the scheme as at December 31, 2015 were as follows:
tJ
Granted Granted in
in the the year
year 2015 2014
(ln'000)
Options issued 12,614 11,331
Options no longer in issue 174 1 ,156
Options vested N/A 3,554
Options exercised N/A 2,563
Vested options carried fonruard N/A 895
l
Shares issued under ESOS in the year 2015 N/A 2,563
Exercise price per share Rs. 15.15 Rs. 16.32
I
Option discount per share Rs. 10.10 Rs. 10.88
lC lr{A-
I
47
35 DEFINED CONTRIBUTION PLAN
The Bank operates an approved provident fund scheme for all its permanent employees to which both the Bank and
employees contribute @ 8.33% of basic salary in equal monthly contributions. The subsidiary - Alfalah GHp Investment
Management Limited operates an approved funded contributory provident fund for all its permanent employees to
which equal monthly contributions are made both by the Company and the employees at the rate of jO% of basic
Y salary.
Contribution made during the year by the Bank amounted to Rs. 295.929 million (2014: Rs. 266.536 million), whereas
the contribution made by the subsidiary - Alfalah GHP Investment Management Limited amounted to Rs. 3.381 million
(2014: Rs. 2.582 million) in their respective funds.
36 COMPENSATION OF DIRECTORS AND EXECUTIVES
Y
Chief Executive Directors Executives
2015 2014 2015 2014 2015 2014
Y
Fee 91,967 83,683 345 510
Managerial remuneration - note 36.2 77,707 zq;sz - 3,735,970 3,283,837
Post employment benefits 8,989 8,561 - 313,525 275,334
Rent and house maintenance 5,024 4,568 - 834,702 735,247
Utilities 5,394 5,138 - 222.675 195,793
97,114 92,499 91.967 83.683 5.107.217 4.490.721
Number of persons' 1.808 '1.603
'As a result of Election of Directors held during the year, three new non executive directors were appointed on the Board who replaced
two of the outgoing non executive directors.
36.1 The Chief Executive and certain Executives have been provided with the free use of cars and household equipment as
per Bank's policy.
36.2 Managerial remuneration includes bonus of executives except for Chief Executive bonus - also refer note 27.1. In
addition, the Bank granted share options to its employees - refer note 34.2.
37 FAIR VALUE OF FINANCIAL INSTRUMENTS
The fair value of quoted securities other than those classified as held to maturity, is based on quoted market price.
Quoted securities classified as held to maturity are carried at cost. The fair value of unquoted equity securities, other
!
than investments in associates and subsidiaries, is determined on the basis of the break-up value of these investments
Y as per their latest available audited financial statements.
The fair value of unquoted debt securities, fixed term loans, other assets, other liabilities, fixed term deposits and
borrowings cannot be calculated with sufficient reliability due to the absence of a current and active market for these
assets and liabilities and reliable data regarding market rates for similar instruments.
In the opinion of the management, the fair value of the remaining financial assets and liabilities are not significanly
different from their carrying values since these are either short-term in nature or, in the case of customer loans and
deposits, are frequently repriced.
37.1 The Group measures fair values using the following fair value hierarchy that reflects the significance of the inputs used
in making the measurements:
Level 1: Fair value measurements using quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: Fair value measurements using inputs other than quoted prices included within Level 1 that are observable
' for
the assets or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3: Fair value measurements using input for the asset or liability that are not based on observable
market data (i.e.
unobservable inputs).
The table below analyses financial instruments measured at the end of the reporting period
by the level in the fair value
hierarchy into which the fair value measurement is categorised:
rr?rtr,
FO
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50
Jd SEGMENT DETAILS WITH RESPECT TO BUSINESS ACTIVITIES
The segment analysis v/ith respect to business activity is as follows:
Rotall
banklng commetcial Retail Assct
Erokeragc Managament
banklng
Sognrent inconto 39,302.126 6,969,613 23,964,226 12,030 279.532 70,527.527

Intof-segment Incomc (r8,392,072) 27,876,950 (9,484,878)
Sggment expenses 12,188,719 31,916.615 13,526,018 4 I,3,14 97,659
'r
57,870.355
Proli( boto{e tax 8,721,33s 2.929,948 953,330 (29.314) 1.873
{.} 12.857 ,177
Seg'nenl assets 445,660,369 128.165.20S 328,77E,868 27a,a32 5,r1,?80 :r03.415,757
Segnrent ncn.pcrlormrng loans _ .163,093 1 7,992,306 JOU . 1 8..155.759
Segmenl provision rcqurred against
loans anrl advances - 1,039.331 1 5,1 53,128 360 - 16.192,019
Sogmont liabilrtios 1s5,037.953 555.406,805 1 38,759,608 91,1BB 6,19.323,021
Segment relurn cn assets (ROA) (%). 1 .71o/o Q.490/a 0.174/o 4.79%
Segmsnt cost of funds (%)' 6.75a/o B.2Oo/o 5 37Yo o, I tix
Rctall Total
sitlcs banktng ;ffi; Assot
-
ttrokorago Managoment
oanktng
-.-----.--- (Rupoos in '000)
Segmont incomo 30,633,653 6.856,165 27.015.749 , c(a 201,089 64.510,412

Inter-sogmcnt inconlo (22,074,385) 32,388,441 (r0,314,056)
Segfllonl oxpensss 6,881,132 33,084,253 15.699,908 20,025 147,/31 55.333,055
Profll belore tax 1,678,136 5.960,353 1.001.785 (1 7,1 69) 5'i.252 3.6i7,357
Segmenl assets - nct 337,370,134 111,857,434 294,168,402 64,214 4SB.g1 5 743,35A.799
Segmenl non-perfonning loans - 579.750 r 8,832.513 JOU - 15,!i12,823
Segment provision roquired against
loans and advances - 900,882 1 3,349,928 300 - 14.?51,170
Segment iiaoilitros 40,712,856 522,427,051 1 35,090,6 t7 91.834 69,077 69E,391,235
Soqment rdturn on :rssets (ROA) f,t). 0.5570 1.01% 0.16% 0.659.
Segntcnr cost ot furris (70)' 9.25% 8.69% 8.00% 8.599!
' Llased on Average Assct and Average Funds
39 TRUST ACTIVITIES
The Group is not ertgaged in any significant trusl aclivities. However, it acts
as secudty agent for various Term Finorrca certificates it
arranges and dislributcs on bohall of its customers. In ad<Jition, the holding
company is alio holding investnrenls of olh€. enlitics in its lps
accounl nlaintaincd lvith lhe state Bank of pakistan.
40 RELATEO P.ARTY TRANSACTTONS
Panies arc considcrL'd.lo be related if one party has the ability

to control the other paity or exercise significanl Inltucngc over lhe olher
party in making linancial ot operational decisions
and include major shareholders, sub;idiary .orp*v, urrocialed
without conlmon directors, relirement benent funds and companies \./iih or
directors and key management personnel and th;ir ctose fanlily
,renlbers.
Banking transaclions with the related parlies are executed
substantially on rhe same terms, including mark-up ratcs
thosc prevailing at the time for comparable transactions with rrd {jollaleral, as
unrelated parties and do not involve more than a normat
nsk.
contrlbutions to and accruals in respecl ol staff retiremenls
and other benefit plans are made in accordance wrril
tefms of the conlribution plan' Remuneration to
executives is determined in accordance with the
lhe acluarial valualions /
terms of their appornlnoni.
t-lt\l--
i
I
5l
Details of transactions with related parties and balances with them as at the year-end are as follows:
20't5
Key Group
Directors management companies / Associates - strategic
personnel Others
lnvestments
40.1 Deposits (Rupees in'000) -----

Balance at beginning of the year 38,398 71,170 5,054,205 453,398 18 5.617.189
Placements during the year 168.409 1,271,256 81,661,921 29.668,778 - 112,770,364
Withdrawals / adjustments'during the year (1s1,982) (1,222,14s1 (80,620,892) (29,771,860)
Balance at end of the vear
_14,82s_ ___120,281_____qggggl_ __g!g'3]g_ _____1q_ _9,s80,64_
20'14 (Un-audited)
(Rupees in'000)
Balance at beginning of the year 34,796 80,786 4,416,681 325,507 18 4,857,788

Placements during the year 236,286 894,069 57,901,746 18,121,968 - 77.154.069
Withdrawals / adjustments'during the year (232,684) (903,685) (57 ,264,222) (17 ,994,O77)
Balance at end of the year 7q- _$1399_ ___*_lg_ _5,617,199-
-!gngg- --E993,205_
--r,1 2015
40.2 Advances (Rupees in'000)
Balance at beginning of the year - 280,630 3,828.522 4,109,152

Disbursements during the year - 324,922 22,147,792 22,472,714
Repayments / adjustments'during the year - (277,2721 (19,636,864) (1 9,914,1 36)
Balance at end of the year
--i--92829q--e'33e,459- - 6,667,730
2014 (Un-audlted)
---
(Rupees ln'000)
Balance at beginning of the year - 278,201 3,622,533 - 3,900,734

Disbursements during the year - 82,967 10,697,701 - 10,780,668
Repayments / adjustments'during the year - (80,538) (10,491,712)
_ - ___?99,6!q__3,828,522 -_ - _4joeja
i
20't5
40.3 lnvestments (Rupees In'000)
Balance at beginning of the year 4,366,796 3,446,271 5o.oo0 7,863,067

Investments during the year - 1,867,710 1,867,7't0
(Redemptions) / adjustments' during the yeat - (994,667)
Balance at end of the vear ' - _3136,-!9_
-{,666,299- -t,o1g,gli-
Provisions held against Investmenrs :. - - __l!gqzgg_ --gg,ggg_
-_ _qqgqg_ _gr.gz99_
2014 (Un-audlted)
(Rupees In'000)
Balance at beginning of the year 4,5s3,930 2,589,895 50,000 7,193,825

Investments during the year
922,097 - 922,097
(Redemptions) / adjustments' during the year (187,134) (65,721)
, __
_ -_ 4,366,?e6 3,446,271 ___ggggg_
__2,863,992_
Provisions held against Investments - --
--gg4gg_ _g6Jgg_
'Adjustments include changes on account of retirement / appointment -----_-:- -{,366,299-
of Directors, changes in Key Managemenl personner and
K0rta- sponsor sharehorder
52
Key Group
Directors management companies / Associates . strategic
personnel Others Investments
40.4 Call borrowings / Repo (Rupees in'000)
Balance at beginning of the year
Borrowings during the year
- 1,300.000 - 1,300,000
Repayments during the year
2014 (Un-audited)
(Rupees in ,000)
4,000,000 4,000,000
Borrowings during the year
Repayments during the year
Balance at end of the vear
2015
40.5 Call lendings / Reverse Repo _____ (Rupees in .000)
Placements during the year
17,82s,000 17,825,000
Withdrawals during the year
2014 (Un-audited)

Placements during the year
Withdrawals during the year
2015 2014
(Un-audited)
40.6 Advances (Rupees in'000)
Running finance
760,958 2,698,690
Long term loans
5,906,772 1,410,461
40.7 Contingenciesand commitments
Letters of credit, acceptance &
Guarantees oulstanding
3,'t 34,931 1,809,608
40.8 Gustomer accounts
PLS accounts
3,264,885 3,588,076
Current accounts
1,047,644 1,452,700
Fixed deposit accounts
2,268,145 576,413
40.9 Transactions with Associates and Others
Associates and Funds not considered for consolidalion

Mark-up expense on deposits / TFCs
Advance against issue of shares to saphhire wind power 53,878 36,931
company Limited 112,350
Rent Income from Alfalah Insurance Limited
Insurance premium paid to Alfalah Insurance 1,997 1,997
Company Limited
Dividend paid to Alfalah Insurance Company Limited 534,335 461,1 63
Dividend received from Alfalah lnsurance Clmpany 1,000 1,000
Limited
Dividend received from Alfalah GHp Income 5,311
Muttiplier Fund
Dividend received from Alfalah GHp Sovereign 23,284 27,650
Fund
Dividend received from Alfalah GHp lslamic 26,944 2,303
Stocf fund
Dividend received from Alfalah GHp Cash Fund 40,867 83,800
Dividend received from Alfalah GHp Value Fund 47,082 36,749
Brokerage income - Alfalah Securities 22,434 28,738
Receivable against trade of marketable securities 23 5
Management Fee earned from funds 3'l 5
Sales load earned from funds 90,303 65,908
Paymenl made on behalf of funds 7,583 928
Bonus received from funds 860
LC t^L- 11,645
53
2015 2014
(un-audited)
(Rupees in'000)
Others
Mark-up income on advances / investments
421,942 392,545
Mark-up expense on deposits
362,903 218,779
Rent income from Wateen Telecom Limited
1,766 13,064
Rent income from Warid Telecom (private) Limited
16,937 17,522
Rent expense pertaining to Wateen Telecom Limited
11,200 1 1,400
Interest received on placements with Silk Bank
5,061
Interest paid on Borrowings from Silk Bank
372
Payment to lnstitute of Bankers of pakistan for calendars and diaries etc.
464 470
Payment to Wateen Telecom Limited and Wateen Solutions (Private) Limited
for purchase of equipment and maintenance charges 143,993 110,969
Payment to Monet (Private) Limited for Branchless banking services
197,588 110,809
Payment to Al-Qudees & Co
27,505
Payment to lntelligens Financials
3,407
Payment to Sundar Interiors & Architects
57,412
Payment to Timber Links
10,428
Payment to Expressive Safety & Security Solutions
7,540
Payment to Olive Internalional (private) Limited
6,590
Payment to Computer Marketing Co. (private) Limited. 11,396
Payment to K-Tabs 19,345
Payment to MEC Engineer 2,894
Payment to Printeria 40,321
Charge for security services to Wackenhut pakistan (private) Limited 136,393 314,008
Communication charges Wateen Tele:or:r (private) Li:"niteC
278 263
Communication charges Warid Telecom (private) Limited 43 68
Contribution to gratuity fund 290,282 283,262
Contribution to employees provident fund 302,691 271,699
Gommission received from Warid Telecom (private) Limited
9,656 8,756
40.10 Balances with Associates and Others
Associates and Funds not considered for consolidation

Advance Rent from Alfalah lnsurance Company Limited 1,955
TFCs held by Alfalah GHP Income Multiplier Fund 6,119 6,121
TFCs held by Alfalah GHP Income Fund (Formerly lGl Income Fund)
87,899 87,935
Management Fee receivable from funds
102,998 55,226
Sales load receivable from funds
8,477 4,743
Receivable against formation for funds
7,901 3,418
i Insurance payable for general and health
r- 183 93
Others
Mark-up suspended on advances to warid rerecom (private) Limited
42,582 22,300
Mark-up suspended on advances to wateen Terecom (private) Limited
644,122 441,119
Advance Rent from Wateen Telecom Limited
589
Advance Rent from Warid Telecom Limited
8,206 9,005
Rent payable to Wateen Telecom Limited
750 950
TFCs held by Taavun (private) Limited
498,800 499,000
TFCs held by Key Management personnel
186,591 16't,466
contributory Provident Fund payabre to the fund by the subsidiaries
363
40.11 The key management personner / directors compensation are as fortows:
Salaries and allowances (also refer note 27.1)

1,174,453 1,078,278
Fair value charge against employee stock option scheme
94,830 53,663
In addition, the chief Executive and certain Executives are provided with Bank maintained
cars and other benefits.
t_f |..t4_
54
41 CAPITALASSESSMENTANDADEQUACY
41.1 Scope of Applications
Amounts subject to Pre - Basel lll treatmont
The Basel-lll Framework is applicable to the Group both at the consolidated level (comprising of wholly/partially owned subsidiaries &
associates) and also on a stand alone basis. As mentioned in Note 5.1, subsidiaries are included while calculating Consolidated Capital
Adequacy for the Group using full consolidation method whereas associates in which the Group has significant influence on equity method .
Standardized Approach is used for calculating the Capital Adequacy for Credit and Market risks, whereas, Easic Indicator Approach (BlA) up
to the extent of 80% is used for Operational Risk Capital Adequacy purpose.
41.2 CapitalManagement
41.2.1 Objectives and goals of managing capital
The Group manages its capital to attain following objectives and goals:
- - an appropriately capitalized status, as defined by Banking regulations;

- acquire strong cr.edit ratings that enable an optimized funding mix and liquidity sources at lesser costs;
- cover all risks underlying business activities; and
- retain flexibility to harness future investment opportunities, build and expand even in stressed times.
41.2.2 Statutory Minlmum Capital Requirement and Capital Adequacy Ratio
The State Bank of Pakistan through its BSD Circular No.07 of 2009 dated April 15, 2009 requires the minimum paid up capital (net of losses)
for all locally incorporated Banks to be raised to Rs. 10 billion in a phased manner from the tinancial year December 2013. The paid up
capital of the Group for the year end6d December 31, 2015 stands at Rs. 15.898 billion and is in compliance with the SBP requirement for the
said year.
The capftal adequacy ratio of the Group is subject to the Basel lll capital adequacy guidelines stipulated by the State Bank of Pakistan
through its BPRD Circular No. 06 of 2013 dated August 15, 2013. These instructions are effective from December 31, 2013 in a phased
mannerwith full implementation intended by December 31, 2019. Under Basel lll guidelines Groups are required to maintain the following
ratios on an ongoing basis:
Phase-in arrangement and full lmplementation of the minimum capital requirements:
Sr. No Ratio 2014 20't5 201 6 2017 201 8

1 CET 1 5.5"/. tt.0% 6.0% 6.00/, 6.0Yo
2 ADT 1 1.5o/. 1.5o/o 1.5o/o '' .50/r 1.5olo
3 Tier 1 7.Oo/. 7.SYo 7s% 7.iYt 7.5o/o
4 Total Capital 10.00/, 10.0o/o 1O.0Yo 10.001 1O.OYo
5 'ccB 0.00"1 0.25o/o 0.65% 1.2801 1.90%
6 Total Canilal Phrs CCR 1i lnoo/ 10.25o/o 1n 650/. 1.280/, 11.90%
' Capital conseruative buffer
41.2.3 Group's regulatory capital is analysed into three tiers
Common Equity Tier 1 capital (CETI), which includes fully paid up capital (including the bonus shares), balance in share premium account,
general reserves, statutory reserves as per the financial statements and net unappropriated profits after all regulatory adjustments applicable
on CETI (refer note 41.4).
Additional Tier 1 Capital (AT1), which includes perpetual non-cumulative pr€ference shares and share premium resulting from the issuance of
preference shares balance in share premium account after all regulatory adjustments applicable on AT1 (refer to note 41.4).
Tier 2 capital, which includes Subordinated debU Instruments, share premium on issuance of Subordinated debU Instruments, general
. provisions for loan losses (up to a maximum ol 'l .25o/o of credit risk weighted assets), gross reserves on revaluation of nxed assets and equity
investments up to a maximum of 45% of the balance, further in the cunent year additional benefit of revaluation reserves (net of tax effect) is
availed at the rate of 40% per annum for the remaining portion of 55% of revaluation reserve and foreign exchange translation reserves after
all regulatory adjustments applicable on Tier-2 (refer to note 41.4).
The required capital adequacy ratio (10.25% of the risk-weighted assets) is achieved by the Group through improvement in the capital base,
asset quality at the existing volume level, ensuring better recovery management and composition of asset mix with low risk. Banking
operations are categorized as either trading book or banking book and risk-weighted assets are determined according to specified
requircments of the State Bank of Pakistan that seek to retlect the varying levels of risk attached to assets and off-balance sheet exposures.
The total risk-weighted exposures comprise of the credit risk, market risk and operational risk.
Basel-lll Framework enables a more risk-sensitive regulatory capital calculation to promote long tem viability of the Group. As the Group
canies on the business on a wide area n€twork basis, it is criticat that it is able to continuously monitor the €xposure across entire
organization and aggregate the risks so as to take an integrated approach/view. Maximization of the retum on risk-adjusted capital is the
principal basis to be used in determining how capital is allocated within the Group to particular operations. The Group iemained
compliant
with all extemally imposed capital requirem€nts through out the year. Further, there has been no matedal change in the Group,s management
capital during the year.
.of
41.2.4 Leverage Ratio
The leverage ratio of the Group as at Decemb€r 31, 2015 is 3.47% (2014:3.95%). The ratio has been computed as prescribed by State Banx
of Pakistan through Instructions for Basel-lll lmplernentation in pakistan.
As on December 31, 2015; Total Tier 1 capital of the Group amounts to Rs. 37,447,318 thousand (2014: Rs. 33,g64,539 thousand) whereas
the total exposure measure amounts to Rs. 1,080,351,619 thousand (2014: Rs.856,987,660 thousand).
Shift in leverage ratio is mainly due to increase in advances, investments and unconditionally cancellable commltments.
<e *c*
55
41.3 CapitalAdequacy
Group's approach for assessing the adequacy of the capital to support current and future business operations
based on the following:
a. Capital Adequacy plays a key consideration for not only arriving at the business projections / plans but is
religiously monitored while undertaking transactions.
b. During the stress years the Group controlled its business growth to keep buffer for unusual circumstances
and also the new capital adequacy regime. Since Group has demonstrated its resilience to meet the
challenges of stress situation & to meet new capital adequacy standards, the Group is now following
controlled growth strategy. The TFC was issued to support the growth but gradually the Group is enriching
the Tier 1 capital while ensuring regular dividend to share holders.
c. The Capital base forms the very basic foundation of business plans. The capital base is sufficient to
support the envisaged business growth and this would be monitored regularly.
d. Current and potential risk exposures across all the major risk types are:
Adequacy of controls
Materiality Level for Bank-
Risk Type (Adequate / Partially
High/Medium/Low
adequate/ Not adequate)
lredit High Adequate
Vlarket Hish Adequate
)perational High Adequate
Model Low Adequate
3oncentration Medium Adequate
nterest rale risk in Bankinq Book High Adequate
-iquidity Hiqh Adequate
3ountry Medium Adequate
leputation Medium Adequate
Strateoic / Business Medium Adequate
-eoal Risk Medium Adequate
e. As per the ICAAP exercise bank's CAR, with all shock incorporated falls below the required level of
12.25o/o. Despite of this figure we feel that the outlook of the Group is stable due to following mitigants:
i. The probability of all shocks materializing at the same time is remote given that fact that Group's risk
management activities are more prudent.
ii. lncreasing CASA deposits in line with branch network.
iii. Better recoveries of existing NPLs and more controlled lending.
iv. Increasing returns on advances.
v. With improvements in capital markets, Group would always have the opportunity to tap fresh capital.
f. The Group enjoys strong sponsor support from Abu Dhabi Group, and more recently, IFC has acquired a
15% stake in the Bank. This alliance has further solidified the Group's position and indicates increased
investor confidence. The Bank has successfully managed five TFCs issues in the past, two of which are
currently in issue. These are indicative of the Group's capacity to raise capital where required.
S. Presently there is no model for determining economic capital requirement. Group follows Standardised
approach for Credit & Market Risk, and Basic Indicator approach for Operational Risk. The assessment of
capital adequacy is based on regulatory requiremenls.
Le ta+-
I
56
41.4 Capital Adcquacy Ratio as at Decomber 3i,2015
?01 5 2014
{Un-auditod}
Comnron Equity Tior 1 capitat {CET1): Instrumonts and -------(Rupoes,n 000).-----.
rcssrvcs
1 fuily Paid.up Capitay Capitat deposjled wrth SBp
15,898,062 15.872.427
Balance in Share premiurn Account
3 Reserve lor issuc of Bonus Shares
4,329.648 4.icJ.tco
4 Urscouni on lssue of shares
5 Gcnerau Statulory Rcserves
Gainr(Losses) on derivatives tretd as Cash Flow Hedge s,090,005
7 UnapprotjrialcC,,unrcntilted profils/ (tosses)
r 2,81 3,,i 8E
subcidiaries (ailount allowed in cETl capttat of the consolidatlon group)
q 172,92tt
CET 1 boforo Ragulatory Adiushents
41,475,628 3?,1 50,061
1Q Ioul rogutarory adlustments applieo 1o cETl (Note 41.4.1)
t1 4.028,310 3,?85.523
Common Equity Tior I
37,447,31 I 33,864,538
Additional Tior I (AT 1| Capital
12 Quaiirying Additionar rier- 1 capital instruments prus any rerared share premium
ts 13 ol whrch: Crassrfted as equtfy
1d ot wtrrch: Classificd as liabilities
15 Addil,onal Trcr'1 capital insFunlents issued to third parties by consotidaled
subsidiaries (amounl
16 ot .,rfrich: inslrilntent issued by subsidiaries subject to phase
out
17 AT1 botoro rL'grrlatory aoJustmcnts
'10 -lotal
rugulaii)ry adjustment applied to n f 1 capitat (Nota 4i,4.?)
'19 Adott;onal Ite. 1 capital atter regulatory adjustments 397 53[ ;'03 671
20 Aclditlonat Tior 1 capital recognizod forcapital adequacy
21 Tler 1 Capirat (CETI + admisslbte ATt) (ti+201

37,447,31 I 33,864,538
Tier 2 Capital
Qu'rirying lrer 2 capitar instruments under Basor ill prus any rerared
share premium 4.989.000 ,1,991,000
?-3 Tier 2 capitar insiruments subject to phaseout arrangement
issued under pre-Baser 3 rures
24 Tier 2 capital instrurnents issued to third pa(ies by;nsotidated 465,a5.1 1.330,027
subsidiaries (amount a1olved in group
ol whjch: instfuments issued by subsidiaries subiect to phase 4,230 '2,249
ouf
ZU Goneral provlsions or general reserves for loan losses-up to maximum
of 1.Zilo/oof credit Risk A!(
27 Revaluation lleserves (net of taxes) 780.744 OO7
zu c=a+b 3,9?5.174
ot lvhich: ficvaluation reserves on fixed assels
an
of v/hich: Unrealized gains/tosses on AFS
b
II 1,71e,46e
rrncznc
I
I
Foreign Exchango Translalion Reserves
a1 1.57?,S60 1.362,,165
Undisclosed/Oll|or tteserves (if any)
[? bofore rcaulatory adjustmonts
1 5,1 44,1 59 ?,296,912
folal regutarory adjustment applied to T2 capitat (Note 41,4.3) 1
34 I ier 2 capital { I 2) aftar regutatory adjustntents 1.010.1i11 1.S00,377

Tler 2 capitat rccognized for capital adequacy 14. 134,03tj i u &y9.fJD
36 lronron of Additronal Tier .t capital recognieed in J,i.13.1,03U ,.4YU J Jb
Tle,2 capital
:i7 Iotal Ticr 2 capital adnrisslbla for capital odoquacy
1 4,1 34,038 10,.a96,;36
38 TOTAL CAP|TAL (Tl + admissibto TZ) (21+JZ)
51 ,581,356 *=13r1!-Lt1-
Total Risk Wcightcd Assots (RWA) (tor clotalls ,ofcr
Nofe 41.7)
380J99^853
.-11U!1!tL
Capitat Ratios and buffers (in porcentago of risk
weighted assetsl
40 cETl to totat RwA
Tiar-1 capitalto total RwA 9.83% 9.72%
4Z Tolat capital to total RwA 9.83% 9.72%
43 Bank spec.fic bulfef tequirenlent (finimum 13.54% 12.740/c
cETl roquiremenr plus capital conservation buffer plus
any I A a6erl I 4 (norl
of vriltch: capital conservation buffer r6quirement
{q o 251'
ol wt:;ch. counlcrcyclical bulfer requtrement
AA
ol \'/hich; D.SIU or G-SIB bufter requirement
CE f1 avarlable to meet buffers (as
a percenlage o, risk weighted assets)
National minimunr capital roqulrontcnts prcacribod

| .r s.lrd L_ 4lill
by SBp
'i8 CET1 minimum ratio
49 ficr 1 mininlum ralio 6.00% 5,5goh
50 Totar capitat mi'imum ratio (rncrusivo 7.50% 7.00%
of 0.25% ccB ror 20151
L ('rr'u 10.25% r0.00%
l-
57
2015 2014 (Un-audlted)
Arnounts Arnounts
Regulatory AdJustmcnts and Additonal lnforma0on subJ6ct to
Amount
Pre- Bas6l lll
Anount
,::-t5""t"11,
troatmont' treatment.
Rupees In'000
41.4.1 Common Equlty Tler 1 capltat: Regutatory adjustments
E
1 coodwiil (net of retated deferred tax liabitity)
2 All other intangibles (net of any associated defened tax liabatity)
m
3 Shortfall in provisions against classified assets
4 Defened tax assets that rely on future profitability excluding those arising lrom temporary differences
(net of related tax tiabitity)
2,418323 2,858,1 98
5 Defined-benefil pension fund netassets
6
7
Reciprocal cross holdings in CETt capilal instruments of banking, financial and insurance enri$es
Cash flow hedge reserve
.f.l:l
8
9
Investment in own shares/ cETl instruments
|
tl
Securitization gain on sae
10
U 11
Capital shortfall of regulated subsidiaries
D€ficit on account of revaluation from bank.s holdings ot fixed assets/ AFS
12 Investmenls in the capital instruments of banking, financial and insurance entities that are outskJe the
scope of regulatory consolidation, where lhe bank does not own more than 10% of the issued share
capital (amount above 1 0% threshold)
l'::::l
llLJ
13 Signiticant investments in the common stocks of banking, financial and insurance entities tnar
are
outside the scope of regulalory consolidation (amounl above .lOo/o threshold)
14 Defened Tax Assets arising from temporary differences (amount above 10% threshotd, net of related
l.l
tax liability)
15 Amount exieeding ,l5o/o threshold
16 of which: significant investments in the common stocks of financial entities
17 of which: defened tax assets arising from temporary differences
18 National specific regulatory adjustments applied to CETI capifal
19 Investments in TFCs of other banks exceeding the prescribed limil
20
L"J
Any other deduction specitied by SBp (mention detaits)
21 Adjustment to CETI due to insuflicient AT1 and 'l-ier 2 to cover deduclions
22 Total regulatory adjustments appled to CET' (sum of 1 to 2t)
4,028,310 3,28s,523
41.4.2 AddltlonatTler-l & Tler-l Capltal: r8gutatory adjustments

23
n
Investment in mutualfunds exceeding the prescribed limit
[sBp specitic adjustmentl
24 Investment in own ATI capitat instruments
25 Reciprocalcross holdings in Additional Tier 1 capital instruments of banking, financialand insurance
entities
26 Investments in the capital instruments of banking, financial and insurance entities that are outside
the
scopo of regulatory consolidation, where the bank does not own more than ioolo of the issued share
ta capital (amount above 10% threshold)
27 Significant investments in the capital instruments of banking, financial and insurance enlities that
are
outside the scope of regulatory consolidation
28
Gi
Portion of deduction applied 50:50 to Tier-l and Tier-2 capital based on pre-Baset lll treatment
I
which,
i during transitional period, remain subject to deduction from additionartier-1 caoital
Y 29 Adjustments to Additionar Tier 1 due to insufficient r-ier 2 to cover deductions
(397 (703,671)
30 Total regulatory adjustment app[ed to ATi capltal (sum ot 23 to 29)

397,536 703,671
41.1.3 Tl.r 2 Capltal: ragutatory adJustments

31
32
33
34
Portion ot deduction applied 50:50 to Tjer-l and Tier-2 capital based on pre-Basel lfl
during transitional period, remain subject to deduction from tier-2 caoital
treatrnent which,
Reciprocal crcss holdings in Tier 2 instruments of banking, financial and insurance enlities
lnvestment in own Tler 2 cagital instrument
Investments in the capital insuuments of banking, financial and insurance entities lhat
r;il (3s7 (703,671)
are outside lhe
L]
scope of regulatory consolidation, wh€re lhe bank does not own more lhan 1o% of
the issued share
capital (amount above 10% threshold)
35 Signilicanl investments in the capilal instruments issued by banking, financial and insurance
entities that
are outrside the scope of regulalory consolidation
36 Total regulatory adjustrnent applled to T2 capltat (sum ot 31 to 35)
1,010,121 1,800,377
'The amount represents regulatory deductions that are still subject to pre-Basel-lll treatment during
the transitonal pedod.
t<frt'aP
I
58
2015 2014
{Un.audited}
Rupoos ln'000
41.4,4 Addltlonallnlormailon
Rlsl Weightod Asoets sublect to pre-Basol llt troatmant

37 Risk weighted assels in respecl ot deduclion ilems (whlch dudng the lransiilonal
pedod will be dsk welghted subJect to pre-Basel lil Treatmenl)
317,227,723 292,026.8s3
(i) ofwhich: deferred tax assets
2.418.323 2,858,198
{it) ofwhich: Defined-benefit pension fund net assels
(ii') 0f which: Recognized portion ot investment In capllal of banking, linancial and
insurancs enlilies where holding is less lhan l0% of the issued common share
capital
of lhe entity
364,877 530,349
(iv) of which: Recognized portion of Investment in capilal of banking, rinanciar and
insurance enlitios where holdlng ls moro than 10% of the lgsued common share
capilal of the entily
795,O72 1.407.U2
AmounB bolow tho thresholds for deducuon (bolore rlsk welghung)

38 Non.signilicanl inveslments in lhe capital of other financial enliiles
222,688 375,665
39 Signilicanl inveslmenls in lhe common stock of flnancial entities
530.048 351,836
40 oeferred lax assets arising from temporary differenc€s (nel of reiated tax liability)
Y
Appllcablo caps on tho Incluslon of pfovtslons ln Tlor 2
41 Provisions €ligiblg for inclusion in Tie. 2 in respscl ot sxposures subject to
slandardized approach (pdor to appllca[on of cap)
780,744 685,997
42 Cap on inclusion of provisions in Tier Z under standardhed approach
U 4,761,248 4,353,307
43 Provisiorc eligible for inclusion in Tier 2 ln respect ol exposures subjocl lo intemal
ralings-based approach (prior to application of cap)
44 cap for inclusion of provisions in Tier 2 under intemat ratings-bssed approach
Y
41.5 Capltal Structure Reconclllatlon
Y Tablo: .t1,5.1
ln
Balancs sheet ag Undor regulatory
flnanclal
publlrhsd scopo of
ltatomentg conEolldatlon
2015
(Rupoes In'000)
Assots
Cash and balancos with treasury banks
62,366,827 62,368,827
Balances wilh other banks
16,583,138 1 6,583,1 38
Lending to llnancial instilutions
53,628,870 53,628,870
Inveslmenls
397,516,448 397,516.448
Advances
327,299,560 327,299,560
Operaling lixed assets
17,317,691 r 7,317,691
v Oefened lax assels
Olher ass€ls
28.701
Total 6ssel8
903,415,757 903,41 5,757
Llabllltles & Equlty

Bills payable
9,733,929 9,733,929
Bonowings
172,393,198 I 72.393,1 98
Deposits and olher accounts
r, 640,1 37,161 640,1 37,1 61
Sub-ordinaled loans
9,983,000 9,983,000
Liabilities againsl assets subject lo finance lease
Defened tax liabilities
1,826.270 1.826.270
Other liabilitios
Total llabllltlos 15,249,463
849,323,021 849,323,021
I Share capitaU Head oflice capilal accounl

15,898,062 15,898.062
Roserves
14.164,120 14j64,120
Unappropriated/ Unremitt€d proliu (losses)
12,813.488 12,813,488
i Minority Interost
274,134 274,1U
L
Surplus on revaluation of ass€ls
v Total oqulty
10,942,932 10.942.932
5'1,092,736 54,092,736
Total llsbllltles & oqulty
I
K0ltc.n _993d!gz!z_ 903.415.767
t,
v
59
Balance sheet as Under regulatory

in published scope of
Table:41.5.2
financial consolidation
statements
201 5 Reference
(Rupees in'000)
Assets
Cash and balances with treasury banks 62,368,827
Balances with other banks 16,583,138 16,583,138
Lending to financial institutions 53,628,870 53,628,870
lnvestments 397,516,448 397,516,448
y - of which: Non-significant investments in the capital instruments of
banking, financial and insurance entities exceeding 10% threshold 600,887 600,887
- of which: significant investmenls in the capital insfrumenls issued by
banking, tinancial and insurance entities exceeding regulatory threshold
530,048 530,048 b
v - of which: Mutual Funds exceeding regulatory threshold
- of which: reciprocal crossholding of capital instrument (separate for CET|,
AT1, T2) 1,234,916 1,234,916 d
- of which: others (mention details) 395,1 50,597 395,150,597 e
l/ Advances 327,299,560 327,299,560
- shortfall in provlsionslexcess of total EL amount over eligible provisions
under IRB f
- general provisions reflected in Tier 2 capital 780,744 780,744 s
Fixed Assets 17,317,691 17,317,691
of which: Intangibles 1,372,'t-24 1,372,1_24 k
Defened Tax Assets
- of which: DTAs that rely on future profitability excluding those arising from
temporary differences 4,030,539 4,030,539
Y - of which: DTAs arising from temporary differences exceeding regulatory
threshold
Other assets 28,701,223 28.701.223
- of which: Goodwill
- of which: Defined-benefit pension fund nef assels
Total assets 903,415,757
Liabilities & Equity

v Bills payable 9,733,929 9,733,929
Borrowings 172,393,198 172,393,198
Deposits and other accounts 640,1 37,161 640,137,161
I
Sub-ordinated loans 9,983,000 9,983,000
lr - of which: eligible for inclusion in AT1 m
- of which: eligible for inclusion in Tier 2 5,454,454 5,454,454 n
Liabilities against assets subject to finance lease
lr Defered tax liabilities 't,826,270 1,826,270
Y - of which: DTLs related to goodwill o
- of which: DTLs related to rhtangible assets p
- of which: DTLs related to defined pension fund nel assels q
I - of which: other deferred tax liabilities f
lr Other liabilities 15 1
Total liabilities 849,323,021 849,323,02',1
Share capital 15.898.062 15.898.062

Y - of which: amount eligible for CETI 15.898.062 15.898.062 s
- of which: amount eligible for AT1 t
Reserves 14,164,120 14,164,120
I
- of which: portion eligible for inclusion in CET| (provide breakup) 12,591,154 12,591,154 u
V
- of which: pottion eligible for inclusion in Tier 2 1,572,966 1.572.966
Unappropriated profi U (losses) 12,813,488 12,813,488 w
Minority Interest 274.134 274,134
!
- of which: portion eligible for inclusion in CET| 172,924 172,924 x
- of which: portion eligible for inclusion in ATI v
Y
- of which: portion eligible for inclusion in Tier 2 4.230 L ?ao z
Surplus on revaluation of assets 10.942.932 10,942,932
- of which: Revaluation reserves on Fixed Assels 4,559,031 4,557,499
aa
- of which: Unrealized GainsZosses on AFS 6.383.901 6.383.901
- ln case of Deficit on revaluation (deduction from CETI) ab
Tgtal equlty 54,092,736 54,092,736
Total liabilities & equity 903,415,757

KORA P
't
rJ
60
Component of Source based on

Table:41.5.3 regulatory capital reference number
reported by bank from step 2
201 5
Rupees in'000
Common Equity Tier 1 capital (CETI): Instruments and reseryes

I Fully Paid-up Capital/ Capitat deposited with SBp 15,898,062
2 Balance in Share Premium Account 4,329,648 (s)
3 Reserve for issue of Bonus Shares
4 General/ Statutory Reserves 8,261,506
5 Gain/(Losses) on derivatives held as Cash Flow Heoge (u)
6 Unappropriated/unremitted profits/ (losses) 12,813.;88 (w)
7 Minority Interests arising from CETI capital instruments issued to third party by consolidated
bank subsidiaries (amount allowed in CET'I capitat of the consolidation group) (x)
CET 1 before Regulatory Adjustments
v 41,475,628
Common Equity Tier 1 capital: Regulatory adjustments

I
I Goodwill (net of related defened tax liability) (l) - (o)
v 10 All other intangibles (net of any associated deferred tax liabitity)

11 Shortfall of provisions against classified assets
12 Deferred tax assets that rely on future profitability excluding those arising from temporary
ft) - (p)
(f)
differences (net of related tax liability) (h)- (r).40%

13 Defined-benefit pension fund net assets
{(l)- (q)}'a0%
lr 14 Reciprocal cross holdings in CETI capital instruments (d)
15 Cash flow hedge reserve
16 Investment in own shares/ CET1 instruments
I' 't7 Securitizatjon gain on sale
18 Capital shortfall of regulated subsidiaries
LI 19 Deficit on account of revaluation from bank's holdings of fixed assets/ AFS (ab)
20 lnvestments in the capital instruments of banking, financial and insurance entities that are
outside the scope of regulatory consolidation, where the bank does not own more than 10% (a)-(ac)-(ae)
ofthe issued share capital (amountabove 10% threshotd)
21 Significant investments in the capital instruments issued by banking, financial and insurance
entities that are outside the scope of regulatory consolidation (amount above 10% threshold) (b)-(ad)-(af)
22 Defened Tax Assets arising from temporary differences (amount above 10% threshold, net of
related tax liability) (i)
23 Amount exceeding 15% threshold
24 of which: significant investments in the common stocks of financial entities
25 of which: defened lax assets arising from temporary differences
26 National specific regulatory adjustments applied to CETl capital
27 of which: lnvestment in TFCs of other banks exceeding the prescribed limit
28 of which: Any other deduction specified by SBP (mention details)
29 Regulatory adjustment applied to CET1 due to insufficient AT1 and Tier 2 to cover deductions
I
30 Total regulatory adjustments applied to CETI (sum of 9 to 29) 4,028,310
31 Common Equity Tier 1 37,U7,318
!
Additional Tier 1 (AT 1) Capital
!
32 Qualifying Additional Tier-1 instruments plus any related share premium
33 of which: Classified as equity (t)
i- 34 of which: Classified as liabilities (m)
35 Additional Tier-1 capital instruments issued by consolidated subsidiaries and hetd by third
parties (amount allowed in group AT 1) (v)
I 36 of which: instrument issued by subsidiaries sublect to phase out
37 ATI before regulatory adjustments
Additional Tier 1 Gapital: regulatory adjustments

t 38 Investment in mutual funds exceeding the prescribed limit (sBp specific adjustment)
39 Investment in own ATI capital instruments
40 Reciprocal cross holdings in Additional Tier 1 capital instruments
41 Investments in the capital instruments of banking, financial and insurance entities that are
l, outside the scope of regulatory consolidation, where the bank does not own more than 10%
i of the issued share capital (amount above 10% threshold) (ac)
42 Significant investments in the capital instruments issued by banking, financial and insurance
entities that are outside the scope of regulatory consolidation (ad)
43 Portion of deduction applied 50:50 to core capital and supplementary capital based on pre-
Basel lll treatment which, during transitionat period, remain subject to deduction from tier-'t
cagital 397,536
44 Regulatory adjustments applied to Additional Tier 1 due to insufficient Tier 2 to cover
deductions
45 Total of Regulatory Adjustment applied to ATI capital (sum of 38 to 43)
v 46 Additional Tier 1 capital
47 Additional Tier 1 capital recognized for capital adequacy
48 Tier I Capital (CETI + admissible ATt) (31+47)
l' kfnr"n-
6l
Component of Source based on

Table:4'1.5.3
regulatorycapital referencenumber
reported by bank from step 2
2015
Rupees in'000
Tier 2 Capital
49 Qualifying Tier 2 capital instruments under Basel lll plus any related share premium
l; 50 Capital instruments subject lo phase out arrangement from tier 2 (Pre-Basel lll instruments) (n)
51 Tier 2 capital instruments issued to third party by consolidated subsidiaries (amount allowed
U
in group tier 2) (zl
52 of which: inslruments issued by subsidiaries subject to phase out
53 Generaf Provisions or general reseryes for loan losses-up to maximum of 125% of Credit
l
Risk Weighted Assets (g)
at 54 Revaluation Reserves
55 of which: Revaluation reseryes on fixed assets
portion of (aa)
56 of which: Unrealized Gains/Losses on AFS
l, 57 Foreign Exchange Translation Reserves (v)
t, 58 Undisclosed/Other Reserves (if any)
59 T2 before regulatory adjustments 1 5,144,1 59
I Tier 2 Capital: regulatory adiustments

frJ 60 Portion of deduction applied 50:50 to core capital and supplementary capital based on pre-
Basel lll treatment which, during transitional period, remain subject to deduction from tier-2
capital
\' 61 Reciprocal cross holdings in Tier 2 instruments
62 Investment in own Tier 2 capital instrument
L/ 63 lnvestments in the capital instruments of banking, financial and insurance entities that are
oulside the scope of regulatory consolidation, where the bank does not own more than 10%
of the issued share capital (amount above 10% threshold) (ae)
I 64 Significant investments in the capital instruments issued by banking, financial and insurance
IJ entities that are outside the scope of regulatory consolidation (af)
65 Amount of Regulatory Adjustment applied to T2 capital (sum of 60 to 64) 't,010,121
66 Tier 2 capital (T2) 14,134,038
67 Tier 2 capital recognized for capital adequacy 14,'t34,038
68 Excess Additional Tier 1 capital recognized in Tier 2 capital
69 Total Tier 2 capital admissible for capital adequacy
------------
14,134,038
70 TOTAL CAPITAL (Tl + admissible T2) (48+69) 51,581,355

I
K0Kau
|r,
I
lr
li
L
IJ
t-l
62
/01.6 Main Features Tamptate ot Rogulatory Capital lnstruments
DE'
Main Features Common Shares rstrument - 2 Instrumont.3
I ssuel 3ank Alfalah Limited !ank Alfalah Limited tank Alfalah Limited
Jnique identifier (egKSE Symbol or Bloomberg }AFL IAFL TFC5
dentifier etc.l 'AFL
3 ioverning law(s) of the instrument -aws of lslamic Republic Laws of lslamic Republic Laws of lslamic Republic of 2akistan
)f Pakistan of Pakistan
Y
legulatorV treatment
4 ransitional Basel lll rules :ommom Equitv Tier I Tier 2 lier 2
tost-transitional Basel lll rules
5 :ommom EouiW Tier I neligible neligible
6 :ligible at solo/ srouo/ srouo&solo ;olo and Grouo iolo and Group ;olo and Grouo
Y nstrument type )rdinarv shares ;ubordinated debt ;ubordinated debt
8 \mount recogniaed in regulatory capital (Currency 15,898,062 537,947 4,989,000
n PKR thousands, as of reporting datel
9 tar value of instrument

*1 ls. 10 Is.5,0@ ts.5,000
l0 \ccounting classification ihare holders'equiw .iabiliw .iability
11 )riginal date of issuance 21-.lun-9i )ec 2009 Feb 19 & 20, 2013
t2 terpetual or dated !A )ated Dated
13 f,riginal maturiw date !A
lr 14 lssuer call subiect to prior superuisory approval !A
)ec 2017 Feb 2021
{A No
l) )ptional call date, contingent call dates and !A {A NA
€demption amount
l5 iubsequent call dates, if applicable !A {A \|A
t/ :oupons / dividends
t7 :ixed or floating dividend/ coupon :ired to floatinE :loating
18 :oupon rate and any related index/ benchmark {A )ption 1: Fixed at 15.5096 Floating at 6 Months KTBOR'(Base Rate) plus
rer annum Option 2: 6 125 basis points per annum without any floor
Vlonths KIBOR plus 250 OT CAP
lasis points per annum
19 :xistence of a dividend stopper {o \o {o
20 :ully discretionary, partially discretionary or NA :ully discretionary ully discretionary
nahdatorv
27 :xistence of step up or other incentive to redeem \A Vo \,lo
22 {oncumulative or cumulative NA :umulative :umulative

23 .onvertible or non-convertible NA \,lon convertible :onvertible
24 f convertible, conversion trigger (sI NA At the option of supervisor h can be converted
nto common equity upon occurrence of
certain trigger events , called point of non
viability(PONV). The PONV is the earlier of;
1. A decision made by sBP that a conversion or
lemporary/ permanent write off is necessary
#ithout which the bank would become non
riable.
2. the decision to make a public sector injection
U )f capital, or equivalent gupport, without which
:he bank would have becoflr€ non viabl€, as
Jetermined by 58P.
I 25 f convertible, fullv or Dartiallv {A NA Vav convert fullv or oartiallv
Y 26 f convertible. conversion rate !A NA fo be determined in the cas€ of vig8er event
27 f convertible, mandatory or optional conversion {A NA f,ptional
28 f convertible, specify instrument type convertible {A NA :ommon Equity Tier 1
nto
29 f convertible, specify issuer of instrument it {A NA ]AFL
:onverts into
30 i/rite-down feature {o VA /es
31 f write-down, write-down trigger(s) At the option ot superuisor it can be either
written otf upon occurrence of a certain tritter
event, called point of non ybbility(Polav). lhe
PONV is the earlier of;
l. A decision made by sBP that a conwsion or
temporary/ permanent writ€ off is necEsary
without which the bank would become non
viable.
2. the decision to make a public sector irjection
of capital, or equivalent suppon, without which
lhe bank would have beconrc non viable, as
determined by SBP.
32 f write-down, full or partial {A {A )ither may be written-down fully or may be
vritten down partiallv;
33 f write-down, permanent or temoorarv VA {A femporary
34 f temporary write-down, description of write-up {A {A As may be det€rmined by rsersal of tr4ger
nechanism event and subiect to regulator's agproyal
35 tosition in subordination hierarchy in liquidation !A )eposits Deposits
I specify instrument type immediately senior to
nstrument
36 {on-compliant transitioned features !A {A No
37 f yes, specify non-compliant features {A {A v/A
k 0rte^
OJ
41.7 Risk Weightod Assots
The capital requlrarilclrts lor the banking group as per the major risk
categoriEs should be indrcated in ths manncr given botow
(Ruposs in'000)
Credit Risk
On.Ealancs shsel
e-oj!-alia.Lrubied&.-s,tan{a{dteed-a.ao&achJliqplg-at cornorehensire)
Cash I cash equivalenls
Sovereign 2.969,1 81 2,674.767 lo.vD/ u Iu 26,7.i7.666
Public Sector entities 986,853 704,951 9,627,832 7,Q49,507
i'ianks t 124 nAa 731,754 10,3/6.? 71 7,3 i 7,5,i4
go,pori:l*
15.731,581 14,498.387 1 53.479.814 f i4.s63,669
Itelail 3,220.951 2.713,791 31.423,916 27.1 37,906
llesidcntiat Mortga0cs 313.969 ?no (14 3.063. 1 1"1 ?.895,356
Past Due loans 266,037 619,31 1 2.595.,r;/i; 05
0.1 53, i
Operalng Frxed Assels 1.634,421 1,461,692 1 5.945,5G5 1 !i,S i5,9 1 5
0ther asscls 1.429.572 1.442.377 3.947.040
1 14.423.768
27,677,733 25,
25,132,566 70,026,648 1\ ,325,636
Pa(hlial*$.up. jsct-le l,'1qr!e!*ea!-nj_gjssd_0Bg I Atproach
e.g. Corporare, Soverergn, Corporate, Retail. Securitization etc.
Off.Balance shest
Non"marhet rcialed
[:rnancial guaranlees 9,1 3?,300
Acccptilnccs l 1 ,'l 58,670
Perloilnance Related Conlingencies L049.103
l'rade Hciatcd Contrngenc,es 8.i 03.5ri4
3,735,481 36,4.13,717 37,053,1 94
Market fojsiod
Foroign Exchangc contracts 561 ,4.1 I 1 ,
't
05.419
Deftvatrv0s 2i.026 29.412
113,483 7 1,134,831
Equity Exposu.o Risk in tho Bankitrg Eook
Under sirnple risk rveighl method
._.r,3s0ps5-1
Listcd F:quily lnvestment 516,131 I 438.007 1 5.035.4?,j
Unlisted Iquity lovestment 292.902 | 8.71 f.i37 - i
I,YZVUTO
-^'.
^.-
I
I
1,409,0E4 730,909 1 3,747,1 63 7,309,081

Unccr Inicrnal models approacn
32,882,615 29,682,277 320,805.995 296,822,742
Mand Risk
gjp-'!it.l Bg!,{rc.,lutrll leugfl LolelilligsLla_Slar&udrzed _Alprpigl
Interest rale nsk 307,488 494.929 3, B4 3.600 0. loo.o tJ
Equiry posilron risk 31.993 2.501 1qc or1 1l lAa
Fcre,gn Ixchange risk 886 466 I 1 8.636 1 1.080,825 i.482.C50
16,066 15,324,338 7 ,700,8?6
Q.ap.rl,olE.qqurlemgolter-p-9-rlta!ias-gupiqs!l9-h!el!a!-M@glsAoproach
Operational Risk illeslricled lo 801,0 ol Basic lndicalor Approach)'
li illlal lqguei]]q [!,! oI_9p_e_Lalian al_!d!q

I 3,581,562 3,499,278 44,769,520 43,740,979
Total Risk Weightcd Exposurcs 37,690,125 33,797,621 3r10,899.853 348.264.547
' Durrfi0 the previous year sBP has accorded approval to ihe bank vido sBP letter No. BPRD/ BA&cp/ 614/ 17838t20t3 dated uecL,mscf c3. ?0.13 for
adoptton ofAS/i based on the following capital lloor i.e, operational risk charge under ASA should not fall bo,ow
a certain percentago ot cperationat risk
capilal charge calculated undor Basic Indicator Approach (BlA)
Decornbor 2013 - Docembcr 2014
Capital Adequacy Ratios 2015 2014

Koqur.ed I Actual Roquirod I Actual
k f N6,-
:
t
64
42 RISK MANAGEMENT
The variety of business activities undertaken by the Group requires effective identification, measurement, monitoring, integration
and management of different financial and non-financial risks that are constantly evolving as business. activities change in
response to concunent internal and extemal developments. The Board Risk Management Committee (BRMC) is appointed ar.d
authorized by the Board of Directors (BOD) to assist in design, regular evaluation and timely updating of the risk management
framework of the Group. The Board has further authorized management committees i.e. Central Management Committee (CMC)
U and Central Credit Committee (CCC). To complement CMC and to supervise risk management activities within their respective
scopes, CMC has further established sub-committes such as Assets & Liabilities Committee (ALCO), Investment Committee,
Principal Investment Committee, Information Technology Steering Committee (ITSC), Internal Control & Compliance Committee
(ICCC) and Process lmprovement Committee.
Y
The risk management framework endeavours to be a comprehensive and evolving guideline to cater to changing business
dynamics. The framework includes:
Y - Cleady defined risk management policies an( procedures.
I
- Well constituted organizational structure, in the form of a separate risk management department, wtrich ensures that
individuals responsible for risk approval are independent from risk taking units i.e. Business Units.
- Mechanism for ongoing review of policies & procedures and risk exposures.
The primary objective of this architecture is to inculcate risk management into the organization flows to ensure that risks are
accurately identified & assessed, properly documented, approved, and adequately monitored & managed in order to enhance
long term earnings and to protect the interests of the Bank's depositors and shareholders.
\
The Gioup's risk management framework has a well-defined organizational structure for effective management of credit risk,
market risk, liquidity risk, operational risk, lT security risk and environment & social risk.
42.1 Credit risk
Credit risk is the identification of probability that counterparty will cause a financial loss to the Group due to its inability or
unwillingness to meet its contractual obligation. This credit risk arises mainly from both direct lending activities as well as
contingent liabilities. Credit risk management processes encompass identification, assessment, measurement, monitoring and
control of Group's exposure to this credit risk. The Group's credit risk managemenl philosophy is based on Group's overall
business strategy / direction as established by the Board. The Group is committed to the appropriate level of due diligence to
ensure that credit risks have been properly analysed, fully disclosed to the approving authorilies and appropriately rated, also
ensuring that the credit commitment is appropriately structured, priced (in line with market practices) and documented.
The Group has built and maintained a sound loan portfolio in terms of well-defined credit policy approved by BOD. lts credit
evaluation system comprises of well-designed credit appraisal, sanctioning and review procedures for the purpose of emphasilng
prudence in lending activities and ensuring the high quality of asset portfolio. In order to have an effective and efflcient risk
It assessment, and to closely align its functions with Business, Credit Division has separate units for corporate Grouping, lslamic
Grouping, commercial & SME Grouping, agricultural financing, and overseas operations.
The Group manages its portfolio of loan assets with a view to limit concentrations in terms of risk quality, industry, maturity and
Li large exposure. lntemal rating based portfolio analysis is also conducted on regular basis. This portfolio level oversight is
maintained by Risk Management Division.
A sophisticated intemal credit rating system has been developed by the Group, which is capable of quantifying counter-party &
transaction risk in accordance with the best practices. The system takes into consideration qualitative and quantitative factors of
the counter-party, transaction structure & security and generates an intemal rating vis-A-vis anticipated customer behaviour. lt
also includes facility rating system in line with SBP's guidelines. Providing estimated LGD (Loss Given Default), this has been
implemented in Corporate Banking and Retail & Middle Market segments with other business units to follow. Furthermore, this
system has an integrated loan origination module, which is cunently being used in corporate banking and Retail & Middle Martet
segments; roll out is in progress in other business units. The system is continuously reviewed for best results in line with the State
Bank of Pakistan's guidelines for Internal Credit Rating and Risk Management. Moreover, the system is backed by secured
database with backup support and is capable of generating MIS reports providing snapshot of the entire portfolio for strategizing
and decision making. The system has been enhanced to generate the risk weighted assets required for supporting the credit
facilities at the time of credit origination and computation of Risk Weighted Assets for the quarterly credit risk related Basel
submissions. The system has been rolled over in Corporate and Retail & Middle Market segments covering the major exposures
of the bank. System is being rolled out gradually on other Business Groups as well.
A centralized Credit Administration Division (CAD) under Operations Group is working towards ensuring that terms of approval of
credit sanctions and regulatory stipulations are complied, all documentation including security documentation is regular & fully
enforceable and all disbursements of approved facilities are made only after necessary authorization by CAD. Credit Monitoring,
Ld under CAD, keeps a watch on the quality of the credit portfolio in terms of bonowers' behaviour, identifies weakening accounts
relationships and reports it to the appropriate authority with a view to arrest deterioration.
t-f Mt e
I
L-
65
To handle the specialized reguirements of managing delinquent and problem accounts, the Bank has a separate
client facing unit
to negotiate repaymenu settlement of the Bank's non-performing exposure and protect the interests of
the bank's depositors and
stakeholders. Unlike other banking groups, where the priority is the maximization of Bank's revenue, the priority
of the Speciat
Asset Management Group (SAMG) is recovery of funds and/or to structure an arangement (such as rescheduling,
restructuring,
settlement or a combination of these) by which the interests of the Bank are prot;cted. where no
other recourse is possible,
SAMG may proceed with legal recourse so as to maximize the recovery of the Bank's assets. The
Risk Managem"ni Diuirion
also monitors the NPL portfolio of the Bank and reports the same to ccc/ BRMC.
42.1.1 Gredit Risk - General Disctosures Basel Specific
The Group is using The Standardized Approach (TSA) of SBP Basel accord for the purpose of estimating
Credit Risk Weighted
Assets. Under TSA, banks are allowed to take into consideration external rating(s) of counter-party(s) for
the purpose of
calculating Risk Weighted Assets. A detailed procedural manual specifying return-bised formats, methodologies
and'processes
for deriving Credit Risk Weighted Assets in accordance with the SBP Baseistandardized
Approach is in placJand firml'y adhered
to.
42'1,2 Disclosures for portfollo subject to the Standardised Approach & Supervisory risk weights In the IRB Approach-Basel
specific
t, 42.1.2.1 External ratin gs
SBP Basel lll guidelines require banks to use ratings assigned by specified External Credit Assessment Agencies (ECAls)
namely PACM, JCR-VIS, Moodys, Fitch and Standard & poors.
The state Bank of Pakistan through its letter number BsD/BAl-z2oltl2oot2oog dated December 21,2OOg has accorded
approval to the Bank for use of ratings assigned by CRAB and CRISL. The Bank uses these ECAIs to rate its
I
exposures
denomirlated in Bangladeshi cunency on certain corporate and banks incorporated in Bangladesh.
LI
The Bank uses extemal ratings for the purposes of computing the risk weights as per the Basel lll framework. For
exposures with
a contractual maturity of less than or equal to one year, short-term rating given by approved Rating Agencies is used, whereas
for
long-term exposure with maturity of greater than one year, long-term rating is used.
Where there are two ratings available, the lower rating is considered and where there are thr€e or more ratings the second -
lowest rating is considered.
42.1.3 Disclosures with respect to Credlt Risk Mitigation for Standardised and IRB approaches-Basel lll specific
42.1.3.1 Credit rlsk mltlgation policy
The Bank defines collateral as the assets or rights provided to the Bank by the bonower or a third party in order to secure
a credit
facility. The Bank would have the rights of secured creditor in respect of the assets / contracts offered as securitv for the
obligations of the borrower / obligor.
\, 42.1,3.2 Collateral valuation and management
As stipulated in the SBP Basel tll guidelines, the Group uses the comprehensive approach for collateral valuation.
Under this
approach, the Group reduces its credit exposure to a counterparty when calculating its capital requirements
v to the extent
of risk mitigation provided by the eligible financial collateral as specified in the BasJl lll guidelines. In line with Basel lll
guidelines, the Bank makes adjustments in eligible collaterals received for possible future
fluctua-tions in the value of the collateral
in line with the requirements specified by SBP guidelines. These adjustments, also refened to as 'haircuts',
to produce
volatility-
adjusted amounts for collateral, are reduced from the exposure lo compute the capital charge based on the applicable risk
weights.
42.1.3.3 Types of collateral taken by the Bank
The Group determines the appropriate collateral for each facility based on the type of product and counterparty.
In case of
corporate and SME financing, fixed assets are generally taken as security for long tenor loans
and cunent assets for
working capital finance usually backed by mortgage or hypothecation. For proleit finance, security
of the assets of the
bonower and assignment of the underlying project contracts is generally obtained. Rddltionat security
suih as pledge of shares,
cash collateral' TDRs, SSC/DSCs, charge on receivables may also be taken. Moreover, in order
to cover the entire exposure
Personal Guarantees of Directors / Bonowers are also obtained generally by the Group- For retail products,
the security to be
taken is defined in the product policy lor the respective products. Housing loans and automobile
loans are secured by the security
of the property/automobile being linanced respectively. The valuation ol the properties is canied out
by an approved valuation
agency.
.Le nt-"
I
\r
66
The Group also offers products which are primarily bzsed on collateral such as shares, specified securities and pledged commodities. These
products are offered in line with the SBP prudential regulations and approved product poticies which also deal with types of collateral, valuation
and margining.
The decision on the type and quantum of collateral fcr each transaclion is taken by the credit approving authority as per the credit approval
authorization approved by the Central Credit Comminee (CCC) under its delegation powers. For facilities provided as per approved pioduct
policies (retail products, loan against shares etc.), colla:eral is taken in tine with the policy.
42,1.3.4 Types of eligible financial collateral
For credit risk mitigation purposes (capital adequacy purposes) , the Group considers all types of financial collaterals that are eligible under SBp
I
Basel lll accord. This includes Cash / TDRs, Gold, securities issued by Govemment of Pakistan such as T-Bills and PlBs, National Savings
Certificates, certain debt securities rated by a recognis€d credit rating agency, mutual fund units where daily Net Asset Value (NAV) is available
in public domain and guarantees from cerlain specified entities. In general, for Capital calculation purposes, in line with the SBp Basel lll
requirements, the Group recognises only eligible collaterals as mentioned in the SBP Basel lll accord.
l 42.1.3,5 Credit concentmtion risk
:ta Credit concentration risk arises mainly due to concenration of exposures und:;r various categories viz. industry, geography, and single/group
borrower exposures. Within credit portfolio, as a prudential measure aimed at better risk management and avoidance of concentration of risxs,
the SBP has prescribed regulatory limits on banks' maximum exposure to single borrower and group bonowers. Moreover, in order to restrict the
i' industry concentration risk, BAL's annual credit plan spells out the maximum allowable exposure that it can take on specific industries.
ti Additionally, the Internal Rating System allows the Bank to monitor risk rating concentration of borrowers against different grades / scores
ranging from 1 - 12 (1 being the best and 12 being loss category) .
I 42.1.4 Segmental information

LJ 42.1.4.1 Segments by class of buslness
2015
Advances (Gross) Deposlts Contingent liabilities'
I (Note l0) (Note 16)
\, (Rupees Percent (Rupees Percent (Rupees Percent
in'000) in'000) In'000)
Agribusiness 25,426,'t15 7.40Vo 9,268,099 1.45o/o 403,097 0.36%

Automobile & Transportation Equipment 3,243,866 0.94% 12,494,496 1.95% 2,310,736 2.08%
Chemical and Pharmaceuticals 6,340,677 1.850/o 6,943,31 5 1.08% 4,826,490 4.33%
Cement 4,950,929 1.44% 3,012,779 o.47% 1,679,342 1.51%
Communication 6,787,948 1.98% 7,408,672 1.16o/0 2,033,797 1.83%
Electronics and Electrical Appliances 5,450,802 1.59% 3,981,446 0.62Yo 1,463,169 1.31%
Educational Institutes 1,579,472 0.460/0 10,393,163 1.62% 166,705 0.15%
Financial 6,012,279 't.75yo 43,427,905 6.78% 1 6,388,180 14.72%
Fertilizers 10,761,359 3.13Vo 13,237,',t90 2.07% 2,243,982 2.O2o/o
Food & Allied Products 10,400,922 3.03Yo 9,009,487 1.41% 2,366,516 2.13o/o
I
Glass & Ceramics 369,412 0.11% 1,858,994 0.29Yo 1 36,529 o.12Vo
Ghee & Edible Oil 7ju,790 2.O8% 4,018,647 0.63% 3,314,775 2.98o/o
l- Housing Societies / Trusts 0.29% 10,340,871 1.62%
1 ,01 1 ,819 62,421 0.06%
Insurance 1,247 0.00% 1,774,999 o.28% 0.00%
lmport & Export 3,679,806 1.O7o/o 14,074,053 2.20% 448,922 0.40%
I
b, lron / Steel 8,657,120 2.52o/o 7,888,480 't.23% 5,970,084 5.36%

Oil & Gas 32,560,786 9.48% 41,076,943 6.42o/o 1 3,674,007 12.28%
Paper & Board 3,107,556 0.90% 2,399,688 0.37% 669,425 0.60%
Production and Transmission of Energy 52,890,720 't5.400/o 12,261,946 1.92o/o 't0,895,232 9.78%
Real Estate / Construction 9,587,247 2.79% 20,256,601 3.16% 6,593,492 5.92%
Retail / Wholesale Trade 7,U2,822 2.280/o 28,219,596 4.41% 5,239,',t75 4.71%
Rice Processing and Trading/ Wheat 9,290,979 2.70% 6,134,412 0.96% 8,572 0.01%
Sugar 6,787,255 1.980/o 3,522,207 0.5s% 143,569 0.13%
Shoes and Leather garments 2,300,422 0.67% 5,307,073 0.83% 448,764 0.40o/o
Sports Goods 10/.,205 0.03% 9at,705 0.15% 37,579 0.03%
Surgical Goods 404,7',t7 0.12% 928,481 0.15% 71,983 0.06%
Textile Spinning 24,802,454 7.22% 2,963,2U o.46% 4,204,',t88 3.7gyo
Textile Weaving r0,306,336 3.00% 3,086,072 0.48o/o 876,232 0.79%
Textile Composite 1 5,990,1 29 4.66Vo 4,578,195 0.72o/o 5,493,318 4.93%
Welfare Institutions 73,341 0.o2% 8,209,978 1.28Vo 3,050 0.0070
Individuals 32,610,410 9.49% 194,754,585 30.42o/o 1,547,964 139%
Others 9.610/o 146,340,849 22.85o/o 17,629,579 15.83%
137.161 11 100.00%
fetr-
I
67
2014 (Un.audited)
Advances (Gross) Deposits Contingent liabilitles'
(Note 10) (Note 16)
(Rupees Percent (Rupees percenl (Rupees Percent
in'000) In'000) ln'000)
Agribusiness 21,452,577 7.040/" 9,042,565 1.33Yo 1,237,065 1.25%

Automobile & Transportation Equipment 3,699,247 1.210/o10,222,562 1.69% 3,363,696 3.39%
Chemical and Pharmaceuticals 7,474,487 2.450/0 7,226,4't1 1:t9% 6,046,715 6.09%
Cement 1,656,854 0.54% 1,558,562 0.260/0 682,497 0.6970
Communication 6,354,047 2.O8% 9,843.285 1.62Vo 3,071,004 3.09o/o
Electronics and Electrical Appliances 2,809,928 0.920/" 4,075,053 0.67% 1,837,531 1.85%
Educational Institutes 1.533,410 0.50% 7,726,269 1.28% 187,033 0.19o/o
Financial 5,493,834 1.80% 31,530,312 5.20Yo 16,301,140 't6.43%
Fertilizers 8,096,08s 2.66To 18,588,795 3.070/o 2,301,754 2.32%
Food & Allied Products 15,620,016 5.120/0 8,351,559 1.380/o ,536,429 1 1.55%
Glass & Ceramics 346,954 0.110/0 1 ,741,273 0.290/0 126,009 0.13%
Ghee & Edible Oil 5,945,521 't.95% 3,784,719 0.62% 2,049,426 2.07%
Housing Societies / Trusts 1,229,630 o.40% 14,794.525 2.44% 646 0.oovo
Insurance 4,495 0.00% 1,881,529 0.31Yo 0.00%
lmport & Export 4,684,377 1 .54Yo 13,310,289 2.20% 1,750,609 1.76%
lron / Steel 9,278,277 3.O4Vo 8,746,597 1.440 5,300,038 5.34%
Oil & Gas 21,193,889 6.95% 32,238,728 5.320/o 10,066,621 10.14%
Paper & Board 4,308,937 1.41% 2,561,872 0.420/0 't,512,181 1.52o/o
Production and Transmission of Energy 48,626,513 15.95% 10,046,722 1.66% 13,050,713 13.15o/o
Real Estate / Construction 4,709,041 1.54% 19,661,439 3.24Vo 3,441,814 3.47%
Retail / Whblesale Trade 6,126,563 2.010/0 27,740,674 4.58Yo 3,831,760 3.860/o
Rice Processing and Trading/ Wheat 9,775,635 3.21% 6,224,405 1.03Vo 28,084 0.03%
Sugar 6,924,296 2.270/o 2,946,747 o.49% 56,709 0.06%
Shoes and Leather garments 1,892,679 o.620/o 1,950,345 o.320/o 50,432 0.05%
Sports Goods 353,402 o.12% 1,271,301 0.?1% 50,529 0.05%
Surgical Goods 1 28,355 0.040/o 1,392,195 0.23yo 99,790 0.10vo
Textile Spinning 23,187,499 7.610/0 2,799,724 0.460/o 2,185,386 2.20%
Textile Weaving 5,208,402 1.71% 2,910,323 0.48% 609,542 0.61%
Textile Composite 25,711,718 8.44% 7,780,741 1.28%o 5,373,308 5.41Yo
Welfare Institutions 34,993 0.01% 8,067,063 1.33V. 69,140 0.07vo
Individuals 24,258,957 7 .960/o 181,533,230 29.96% 910,546 0.92o/o
Others 26,698,931 8.790/o 145.407 24.001o 12,103,335 12.21%
100.00% 1.482 100.00%
Contingent liabilities for the purpose of this note are presented at cost and includes direct credit substitutes. transaction related continoent
liabilities and trade related contingent liabilities.
42.1.4.2 Segment by sector 201 5

Advanges (Gross) Deposits Contingent liabilities'
(Note l0) (Note 16)
(Rupees Percent (Rupees Percent (Rupees
In'000) in'000) in'000)
Public / Government 94,312,609 27% 36,469,841 60/o 16,132,091

Private 249,179,770 73% 94Yo 95,218,783
.379 100% 111
2014 (Un.audited)
Advances (Gross) Deposits Contlnqent liabllltles'
(Rupees Percent (Rupees percent (Rupees Porcent
In'000) In'000) ln'000)
Public / Govemment 67,491,848 22% 41,294,631 7% 1 1,673,760 12%

Private 237,327,701 78o/o 564,662,273 93% 87,557 .722 88%
304,819.549 'too% 605,956,904 99.231.482
tl.tRtr-*
68
12.1.4.3 Detalls of non.performlng advances and speclflc provlslons by class of business sagment
2015 2014 (Un.audlted)

Classlfled Speclfic Classitied Speciflc
advances provlslon advancas provislon
Agribusiness 293,088 150,383 333,839 56,047

Automobile & Transportation equipment 't4't,121 87,666 114,036 62,675
Chemical & Pharmaceuticals 110,231 98,165 285.028 125,168
Coment 30.974 15.487
Communication 519.376 51 9,376 u2,335 3/.0,674
Electronic & Electrical Appliances 4'13,838 41 1,590 397.910 394,942
Financial 79,330 79,330 119.269 119,269
Fertilizers 790,636 794,048 791.036 673.566
Food and allied products 273,119 202,U3 185,085 1 18,054
Glass / Ceramics 26,559 26,559 41,943 36,845
Ghee & Edible Oil 392,526 454,547 475,897 473,851
lmport & Export 626,525 603.525 663,999 620,895
lron and steel 246,643 213,770 492,423 367,577
Oil and gas 2,271,267 1,368,285 2,814,894 1,204,274
Paper & Board 133,651 1 33,551 115.5&t 83,517
Production and transmission of energy 1,948 1,948 7.115
Real Estate / Construction 655,948 348,688 289,032 '193,062
Retail Trade & Wholesale 895,584 824,676 923,624 658,500
Rice processing and trading / wheat 521,589 501,232 306,907 248,259
Shoes & Leather garments 95,251 94,301 70,451 67,791
Sports 3,900 3,900 3,900 3,900
Surgical goods 't5,047 '15,047 17,047 17,U7
Textile Spinning 628,397 644,892 722,890 589,158
Textile Weaving 316,201 309,064 328,686 247,559
Textile Composite 3,090,413 2,899,945 2,4U,478 2,170,470
lndividuals 1,119,034 918,437 1,203,287 677,850
Others 4,794,307 3,747,147 5,850,974 4,035,230
+: 18.455.759 15.452.915 19.412.623 13,601,667
42.1.4.1 Detatls of non-performlng advances and specific provlslons by sector
201 5 2014 (Un-audited)

Classified Specific Classified Speciflc
advances provislon advances provislon
-'(RuPees in'000)--"-
Public / Govemment
Private 18.455,759 1s,452,915 19,412,623 13,601,667
@@
42.1.4.5 Geographlcal segment analysls 2015
assets Net assets Contlngont
Prolit betoro Total
taxatlon employod employed llabllltles'
'{Rupees ln'000)-..-..-----
Pakistan 11,475,542 845,096,945 44,410,'t22 105,833,599

Asia Pacific (including South Asia) 968,463 45,262,755 8,706,232 4,075,941
Middle East 213,167 13,056,057 976,382 1,441,334
12.657.172 903.415.757 54.092.736 111.350.874
2014 (Un-audlted)
Profit before assets
Total Net assets Gontingont
taxatlon employed employed llabilitlet'
..'{Rupees ln'000)-....'-._-*-
Pakistan 7,317,554 690,402,292 36,318,307 84,961,250

Asia Pacific (including South Asia) 1,143,980 45,042,933 8,394,070 5,081,365
Middle East 215,823 8,513,574 855,187 9,188,867
743.958.799
Contingenl liabilities for the purpose of this note are prosonted at cost and includ€s direct credit substitutes, transaction related contingent
liabilities and trade related contingsnt liabilities.
'LtltL
69
42.2 Market risk
Market risk exposes the Group to the risk of financial losses resulting from movements in market prices. lt is the risk associated
with changes in the interest rates, foreign exchange rates, equity prices and commodity prices. To manage.and control market risk
at BAFL, a well-defined risk management structure, under Board approved Market & Liquidity Risk Management Policy, is in
place. The policy outlines methods to measure and control market risk which are carried out at a portfolio level. Moreover, it also
includes controls which are applied, where necessary, to individual risk types, to particular books and to specific exposures. These
Y controls include limits on exposure to individual market risk variables as well as limits on concentrations of tenors and issuers.
This structure is reviewed, adjusted and approved periodically.
The Bank's Asset and Liability Committee (ALCO) and Investment Committee (lC) are primarily responsible for the oversight of
Y the market risk, supported by Market Risk Management Unit of RMD. The Bank uses the Standardized Approach to calculate
capital charge for market risk as per the current regulatory framework under Basel ll/lll. Currently, the Bank calculates 'Value at
Risk (VaR)'on a daily basis. Moreover, the Group also carries out stress testing on regular intervals by applying shocks on Fixed
t; Incpme, Equity and Foreign Exchange positions.
Y
42.2.1 Foreign exchange risk
I Foreign exchange risk arises from the flucluation in the value of financial inslruments due to the changes in foreign exchange
Lr rates. The Bank manages this risk by setting and monitoring dealer and currency-wise limits.
FX risk is mainly managed through matched positions. Unmatched positions are covered substantially through derivative
instruments such as Fonrvards and Swaps. VaR analysis are conducted on regular basis to measure and monitor the FX risk.
The currency risk is regulated and monitored against the regulatory/statutory limits enforced by the State Bank of Pakistan. The
foreign exchange exposure limits in respective currencies are managed against the prescribed limits.
I
! The analysis below represents the concentration of the Group's foreign currency risk for on and off balance sheet financial
instruments:
Net
sheet items curlency
expoSure
-------{Rupees in'000).-----
Pakistan Rupee 868,394,987 811.691,692 8.236.601 6,4,939.896
United States Dollar lr-355iZ]l-20i-oi732ll-t.?iffi?,mflf trr-ils.eiA
Great Eritain Pound
Jaoanese Yen
|| 2e3,0s1 ll
1s1,67sll
4,es8,1s2 ll
4,706,s22
2.ee8ll 11 (3,626)l
rr,osrl
(152.303)ll
Ewo | 11
216,986 2.98/,674 11 (119,778)l11
2.774.62 6,374 I
Other cunencies | 362,8341 | s3.7431 | | 1s4,3i31
Total foreign cwrency exposwe 35.020.770
j-3.4-fffi 37.631.329 (8.236.601)
.Ts:2x-b2i- .T,6's-tj36-
(10.847.160)
Total cwrerry exposure
-
Pakistan Ruoee
United States Dollar
Great Britain Pound
Japaoese Yen
Euro
OtlEr drrencies
Total foreign cune.rcy exposure
Total orency exposure
..-'5S,7r
15.251.015 29.819.360 13.169.291
.--.----.-.-.---: ----ffi-
(1.399.054)
-06:30rF
42.2.2 Egulty investment risk
Equity lnvestment risk arises due to the risk of changes in the prices of individual stocks held by the Group. The Group's equity
investments are classified as Available for Sale (AFS) and Held for Trading (HFT) investments. The objective of investments
classified as HFT portfolio is to take advantage of short term capital gains, while the AFS portfolio is maintained with a medium
term view of capital gains and dividend income. The Bank's Investment Committee is primarily responsible for the oversight of the
equity investment risk. Market Risk Management Unit of RMD monitors & reports portfolio and scrip level internal and external
limits. tolerance levels and sector limits.
42.3 Interest rate risk
Interest Rate Risk is the adverse impact on lhe bank's shareholder's equity due to changes in the interest rates. lt may be further
elaborated as changes in the present value of the asset, liabilities and commitments due to changes in the term structure of the
. interest rates. The Group is exposed lo interest rale risk primarily as a result of mismatches in the amounts of assets and liabilities
and off-balance sheet instrruments within a certain range of maturity due to re-pricing (whichever is earlier). BAFL has formulated
a separate Interest Rate Risk Management (IRRM) framework which establishes aggregate and lenor-wise balance sheet level
PV01 (Price Value of lbps) limits to manage inlerest rate risk wilhin the Board approved risk appetite. Treasury & Fl Group is
primarily responsible for managemenl of interest rate risk on a daily basis, and the Asset and Liability Committee (ALCO)
I
oversees the interest rate risk at Bank level. Market Risk Management Unit of RMD independently monitors, analyses & reports
various limits including management action point limits and re-pricing of the assets and liabilities on a regular basis.
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74
42.5.2 Maturitles of assets and riabiritres based on contractuar maturities
wl OEa Onr 6
Upto I tol ba Iril! to t b2 to5
lodtl ,rodtr xdl! l0 Y.rd
Aa&b
Caah .d balsres wih lrd3ury bar*s
8.L|@ wfi oth€r bants
Londi.E6 to timrial iditdi(re
MSerts
Oporalhg fed ssts
Ddof,gd trx Nds
Olh.. rsls
Ll.bilili.r
8i[r FFblo
8@iE
O@sil! and other aedds
Sub.ddimtad baE
Ocf6nld h Lbilities
Olhd l.tttitios
,{.1[acb
Sb.. @pibl 't5,898.062
Ragru r4,164.t20
[email protected] rofi 12,8t3.488
t{@ont o{i€ itl€r*t 271.1U
SwlI m |Ml@tbn ot iMsh€rts
tJ '10.942.932
m.t Chnr6
to 5 lo.dr lo I lo2 lo5
l|ldh toith3 Xdth. yu. Y€at Y....
_ (R|Fin
Yaaaa '10
A3eia
Carh snd bd6@s wih treasry bar*r
SaLr* wilh dtEr bar*s
Lording! b f@ftial iBtituttn
!83h6il3
OFmtirE fiEd asb
Oafer€d Tax Asts
olhd &dt
Ll.blliil.r
SalbFy.blc I I,758.1 55 rr.7$.155
Eqwilog
- O€ruit! ,.d diar &ouds
SuMimted bsB
5s,232,S16
605,956,9(X
I,S87.000
37.155.078
466,6m.465
2,597,O27
62,130.002
I,0oo
11,609.151
42,164.651
t,000
1$,725
34.143.517
2.000
'|,473.687
'|,665.330
7J:933 327.599
tr.tat
Def.rsd b t bildios 3,?55?0 4,000 4,987,000
821.038 821,O3t
Ohd t bilitio3
l{al ar..ta
Sh.6 6plal 15,872.121

Reffi r2,ai8,o28
UEmbt.dNft 10.0s1,872
Ndla.fEfrE ifdsi 255,9!t9
Suplr6|ftlEtiondiEdrnm ?.009.240
Cunent and Saving deposits have been classified under maturig upto one month as these do not hare
any contractual maturity. Further, the
Group estimates that these deposits are a core part of its liquid resources and witt not fall
below the cunent year,s level.
42.6 Operational rlsk
Basel ll defines operational risk as, the risk of loss resulting from inadequate or failed intemal processes, people
and systems or from
extemal events.' In compliance with the Risk Management Guidelines, isiued by SBp, an
Operatinal Risk'Management (oRM) Unit is
established within RMD.
The operational risk management policy of the Bank is duly approved by the Board and
operational Rbk Management Manual covers the
processes' structure and functions of operational risk management and provides guidelines
to identify, assess, ironitor, control and report
operational risk in a consistent and transparent manne, across the Bank.
42.6.1 Operatlonal Risk Disclosures - Baset ll Specific
Bank was given approval for adoption of Altemative Standardized Appoach (ASA)
under Basel ll for determining capital charge on
operational Risk in December 2013 and Bank started calculating its capital cirarge
for operatioftd risk on AsA in its financials from
December 31, 2013..The SBP Approval stipulated a capital floor i.-e. operarional dslicharge
underASA should not fall below as a certain
percentage of operational risk capital charge calculated under Basic
Indicator Approach for initial 3 yeas- These fioors ar€ g0% for 20,13 anct
2014' 80o/o for 2015 and 70o/o for 2016. Bank Alfalah is one of the first few banks in pakistan
to acfiieve this milestone. As per SBp
requirements, Bank's operational risk assessment systems have also been reviewed
by the extemal ardrbrs during 2014.
The Bank's ORM framework and practices address all the significant areas of ORM within
the Bank induding Risk Control Self Assessment
(RcsA)' Key Risk Indicalors (KRls), Operational Loss DatJ Management, and operational
Risk Reporting. The oRM Unit engages with
Bank's business / support units and regularly collaborates in deteinining and reviewing
the risks, ard suggests controls on need basis.
Additionally, all the policies and procedures of the Bank are reviewed dm ne op€rational
risk persgective, and the recommendations of
RMD are taken into consideration before their approval. A Process lmprovement
Committee (plc) in uis regard has been formed to evaluate
and consider the r€commendations of all the reviewers. Further, the unit also reviews
functiond ipecificatio-n documents (FSDs) and reviews
i / test the functionalities and syst€ms prepared on premise of the FSD. The Operational
Loss Database and KRls systems introduced in 2010
have been further enhanc€d and the reports are submitted to central Management
committee and Board Risk Management committee.
From April 2016 loss data base reports shall also be shared with the regulatorin its prescribsd
tormal
(c\hr.
75
As required by Basel, Bank has categorized all its operational loss/near miss incidents into following loss event categories:
. Intemal Fraud
- Extemal Fraud
- Employment Practice & Workplace Safeg
- Client, Product & Business Practice
. Damage to Physical Assets
- Business Disruption & System Failure
- Execution, Delivery & Process Management
42.6.2 lT Securlty Risk
The Bank has in place an lT Securi! Risk Management Policy and an lT Management Policy, duly approved by the Board of Directors,
which derive from the regulatory mandates and the ISO 27001:2013 intemational standards framework. A dedicated lT Security Risk
Management unit, functioning within RMD manages lT and information security risks to bank's technology assets by developing fT security
baselines for lT solutions that support products and services, monitoring of threats and vulnerabilities, investigation of reported informatim
security incidents, reinforcement of lT security risk awareness to employees via periodic communications, following up on due dates with
stakeholders responsible for remediation of open issues, and reporting the status of lT security risk to the management and BRMC/Board.
NON.ADJUSTING EVENTAFTERTHE YEAR END REPORTING DATE
Frt"5 ll'
The Board of Directors of the Bank in its meeting h"ld on il!"nnoun."o cash dividend ofll?percent (2014:20 percent
cash dividend). This appropriation will be approved in the forthcomin! Annual General Meeting. The financial statements for the year ended
December 3 l , 2015 do not include the effect of this appropriation which will be accounted for in the financial statements for the year endir€
December 31. 2016.
DATE OF AUTHORISATION
These c.onsolidated financial statemenls were authorised for issue on by the Board of Directors of the Bank.
45 GENERAL
Comparative information has been re+lassified, re-ananged or additionally incorporated in these financial statements, wherever necessary to
facilitate comparison.
tcl\arr
<_-.
DIRECTOR

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KPMG Taseer Hadi & Co.

Bank Alfalah Limited

Auditors'Report to the Members

We have audited the annexed consolidated financial statements comprising consolidated

kfNtq (?- 11--1' t-e-

KPMG Taseer Hadi & Co., a PailneBhip fm regist€red in pakistan

Note 201s 2014

Cash and balances with treasury banks 6 l- 6rs6afr? I I 5oF1ss45l

Deferred tax liabilities 12

NET ASSETS __gtggazgg_ ___1s,567591_

Share capital 19 't5,898,062 15,872,427

CONTINGENCIES AND COMMITMENTS 21

Note 2015 2014

Mark-up / return / interest earned 23 61,424,713 55,374,052

Non mark-up / interest income

Non mark-up / interest expenses

Total non mark-up / interest expenses 22,772,986 20,804,878

Basic earnings per share 30.1 4.72 4.18

Diluted earnings per share 30.2 4.70 4.18

Profit after taxation

Exchange differences on translation of net investments in foreign branches

Items that will never be reclassified to profit and loss account

Remeasurement of defined benefit plans

Equity holders of the Bank 7,576,380 5,593,890

Gomponents of comprehensive income not reflected in equity

Surplus on revaluation of available for sale securities

IVE OFFICER DIRECTOR

Note 2015 2014

Unrealised gain on revaluation of investments | | | |

classified as held for trading - net

CASH FLOWS FROM INVESTING ACTIVITIES

Increase / (decrease) In cash and cash equlvalents 27,743,466 (32,539,569)

cHt OFFICER DIRECTOR

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BANK ALFALAH LIMITED

1 STATUS AND NATURE OF BUSINESS

1.1 The "Group" consists of:

public limited company

27 percenl 34.67 percent

i Sapphire Wind Power Company Limited

Alfalah GHP MoneY Market Fund

which are subsidiaries of the Group

dated February 28' 2013'

4.1 Accounting convention

4.2 Functional and Presentation Currency

4.3 Critical accounting estimates and judgements

i) classification and provisioning against investments (notes 5.4 and 9)

rr 5 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

5.2 Cash and cash equivalents

,.v 5.3 Lendings to I borrowings from financial institutions

Sale of securities under repurchase agreements

Purchase of securities under resale agreements