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Bank of Khyber: Annual Report 2018

IM Insights
By IM Insights
5 months ago
Bank of Khyber: Annual Report 2018

Islamic banking, Murabaha, Musharakah, PLS, Riba, Salam, Shariah, Shariah compliant, Sukuk, Credit Risk, Mark-Up, Mustajir, Net Assets, Provision, Reserves, Sales

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  1. ANNUAL REPORT 2018 Passion to Move Ahead +92-91-111 95 95 95 customercare@bok.com.pk www.bok.com.pk Spinzer Printer 34, The Mall, Peshawar Cantt.
  2. The Bank of Khyber CONTENTS Vision .................................................................................................. Mission............................................................................................... Core Values......................................................................................... Corporate Informa on....................................................................... No ce of Twenty Eight Annual General Mee ng.............................. Chairman’s Review................................................................................ Directors’ Review Report...................................................................... Statement of Compliance................................................................... Review Report to the Members......................................................... Statement of Internal Controls........................................................... Report of Shariah Board..................................................................... Auditor’s Report to the Members...................................................... 02 02 02 03 05 07 08 17 21 23 25 32 Financial statements Statement of Financial posi on..................................................... Profit and Loss Account................................................................. Statement of Comprehensive Income........................................... Statement of Changes in Equity.................................................... Cash Flow Statement.................................................................... Notes to the Financial Statements................................................ Pa ern of Shareholding..................................................................... Category of Shareholders.................................................................. Branch Network................................................................................. Foreign Correspondent Banks........................................................... Form of Proxy.................................................................................... 37 38 39 40 41 42 119 120 121 125 128 ANNUAL REPORT 2018
  3. The Bank of Khyber Vision To become a Leading Bank providing e fficient and dynamic services in both Islamic and Conven onal banking through expanded na onwide network. Mission To increase shareholder’s value and provide excellent service and innova ve products to customers through effec ve corporate governance, friendly work environment and contribu ng towards an equitable socioeconomic growth. Core Values Highest quality of service Professionalism Integrity Team work Innova on and u liza on of latest technology Risk Mi ga on Corporate Social Responsibili es 2 ANNUAL REPORT 2018
  4. The Bank of Khyber CORPORATE INFORMATION Board of Directors Dr . Shahzad Khan Bangash Shakeel Qadir Khan Maqsood Ismail Ahmad Asad Muhammad Iqbal Javed Akhtar Shaharyar Ahmad Chairman/ Non-Execu ve Director Non-Execu ve Director Non-Execu ve Director Independent Director Independent Director Independent Director Managing Director / CEO Saif -ul-Islam Shariah Board Mu i Muhammad Zahid Mu i Muhammad Ibrahim Essa Qazi Abdul Samad Chairman Shariah Board Member Shariah Board Resident Shariah Board Member Auditors Grant Thornton Anjum Rahman Chartered Accountants Chief Financial Officer Mahmood Ahmed Qureshi Company Secretary Zahid Sahibzada Registered Office / Head Office 24 – The Mall, Peshawar Can . , Pakistan 1st Floor, State Life Building, 34 – The Mall, Peshawar Can ., Pakistan Contacts PABX: (92-91) 111 95 95 95 24/7 Call Centre: (92-21) 111 265 265 Email: info@bok.com.pk Website: www.bok.com.pk Registrar and Share Registra on Office THK Associates (Pvt) Ltd. 1st Floor, 40 -C, Block 6 P.E.C.H.S, Karachi – 75400 Pakistan. Ph: (92-21) 111-000-322, Fax: (92 -21) 34168271 Email: secretariat@thk.com.pk Website: www.thk.com.pk 3 ANNUAL REPORT 2018
  5. The Bank of Khyber Legal Advisors Mr . Nisar Ahmed Khan, Advocate, Peshawar M/s. Mohsin Tayebaly & Co., Karachi Board Audit Commi ee Asad Muhammad Iqbal Shakeel Qadir Khan Javed Akhtar Shaharyar Ahmad Chairman Member Member Member Board Human Resource & Remunera on Commi ee Shaharyar Ahmad Maqsood Ismail Ahmad Asad Muhammad Iqbal The Managing Director Chairman Member Member Member Board Risk Management Commi ee Maqsood Ismail Ahmad Javed Akhtar Shakeel Qadir Khan The Managing Director Chairman Member Member Member Board I.T Steering Commi ee Shakeel Qadir Khan Shaharyar Ahmad Mr. Asad Muhammad Iqbal The Managing Director Chairman Member Member Member 4 ANNUAL REPORT 2018
  6. The Bank of Khyber NOTICE OF TWENTY EIGHTH ANNUAL GENERAL MEETING No ce is hereby given that the Twenty Eighth Annual General Mee ng of the Shareholders of The Bank of Khyber will be held on Thursday , March 28, 2019 at 10:30 a.m. at Pearl Con nental Hotel, Peshawar Can . to transact the following business: Ordinary Business 1. To confirm the minutes of the Extra Ordinary General Mee ng (EOGM) held on June 1, 2018. 2. To receive, consider and adopt the Audited Accounts of the Bank for the year ended December 31, 2018, together with the Directors' and Auditors' Reports thereon. 3. To appoint auditors for the year ending December 31, 2019 and fix their remunera on. Bank's auditors Messrs. Grant Thornton Anjum Rahman, Chartered Accountants have completed their term of five years and are not eligible for reappointment. The Board of Directors on the recommenda on of Board Audit Commi ee has proposed the name of Messrs. EY Ford Rhodes, Chartered Accountants for appointment as auditors for the year ending December 31, 2019. Other Business 4. Any other business with the permission of the Chair. By Order of the Board Zahid Sahibzada Company Secretary Peshawar: March 7, 2019 5 ANNUAL REPORT 2018
  7. The Bank of Khyber Notes : (i) Share Transfer Books of the Bank will remain closed from Friday, March 22, 2019 to Thursday, March 28, 2019 (both days inclusive). Transfers received in order at the office of our Share Registrar, M/s. THK Associates (Pvt) Limited, located at 1st Floor, 40-C, Block-6, P.E.C.H.S., Karachi – 75400 by the close of business on March 21, 2019 will be treated in me for the said purpose. (ii) All members are en tled to a end and vote at the mee ng. (iii) A member en tled to a end and vote at the Mee ng, is en tled to appoint another member as a proxy to a end, speak and vote for him/her. (iv) An instrument of proxy applicable for the mee ng is being provided with the no ce sent to members. Further copies of the instrument of proxy, if required, may be obtained from the Registered Office of the Bank during normal office hours. (v) An instrument of proxy and a Power of A orney or other authority (if any) under which it is signed, or notarized copy of such Power of A orney must be valid and deposited at the Registered Office of the Bank not less than 48 hours before the me of the mee ng. (vi) In case of Proxy for an individual beneficial owner of CDC, a ested copies of beneficial owner's NIC or passport, Account and Par cipant's I.D. numbers must be deposited along with the Form of Proxy. In case of Proxy for corporate members, he/she should bring the usual documents required for such purpose. (vii) Members are requested to promptly communicate any change in their addresses to our above-men oned Share Registrar. (viii) Form of Proxy, if required, should be signed on Rs.5/- Revenue Stamp. 6 ANNUAL REPORT 2018
  8. The Bank of Khyber Chairman 's Review Report I am pleased to present this report on the overall performance of the Board and effec veness of the role played by the Board in achieving the Bank's objec ves. The leadership and effec veness of the Board are primarily the Chairman's responsibility. We, in the Board recognize the importance of, and are commi ed to, high standards of corporate governance, aligned with the needs of the Bank and the interests of all our stakeholders. The Board of Directors of a company shall carry out its fiduciary du es with a sense of objec ve judgment and in good faith in the best interests of the company and its stakeholders. Accordingly, my fellow directors and I are fully aware of the role, responsibili es, applicable laws and regula ons to effec vely govern the affairs of the Bank. We fully appreciate the importance of sound governance in the efficient running of the Bank, and in par cular to the effec veness and independence of the Board and the management of risks being faced during the course of business. The composi on of the Board of Directors reflects mix of varied backgrounds and rich experience in the fields of Management, Business, IT and Banking. The Board provides strategic direc on to the management and is available for guidance. The Board approves the budget and ensures that a competent and energe c team is in posi on to achieve the goals set. The Board ensures compliance of all regulatory requirements by the Management. The Board is ably assisted by its Commi ees viz. Audit Commi ee, Human Resource & Remunera on Commi ee, Risk Management Commi ee and IT Steering Commi ee. As required under the Code of Corporate Governance, the Board has approved a formal process for its annual performance evalua on through an in-house mechanism based on Quan ta ve Technique with scored ques onnaires. However, mandatory evalua on through external agency once in three years is being conducted through Pakistan Ins tute of Corporate Governance (PICG) in the year 2018. The exercise is on-going and expected to be completed in the first quarter of the current year. In compliance to the Code of Corporate Governance, the Board has arranged Directors' Training Program for majority of its Directors so as to acquaint them with the regula ons, applicable laws, their du es and responsibili es. I take this opportunity to thank our stakeholders and customers for the trust they placed in the Board, the management team for its coopera on, the Board of Directors for their guidance and support and the employees for their sincere efforts throughout the year under review. Dr. Shahzad Khan Bangash Chairman – Board of Directors Peshawar: March 1, 2019 7 ANNUAL REPORT 2018
  9. The Bank of Khyber Directors ' Report to the Shareholders Dear Shareholders On behalf of the Board of Directors, I am pleased to present the 28th Annual Report of the Bank of Khyber along with audited financial statements and auditors' report for the financial year ended December 31, 2018. Financial Highlights The opera ng results and appropria ons, as recommended by the Board, are as under: Opera ng Profit Reversal against non-performing advances, investments & others Profit before taxa on Taxa on Profit a er tax Total Assets Advances (Gross) Investments (Net) Deposits (Rs. in million) 878 (171) 707 241 466 223,095 99,167 94,233 171,168 Economy Review During the year 2018, Pakistan's economy remained under pressure. The rise in core infla on coupled with devalua on in rupee, against US dollar, in the domes c market made it difficult to take economic decisions freely. Incidentally, increasing trend in the discount rate during the year, gave rise to the manufacturing and transporta on cost, resul ng in price hike of all the commodi es produced locally. Moreover, our foreign exchange reserves eroded due to service of foreign debts and payments against import bills. However, stabiliza on measures taken by government, followed by steps taken to discourage imports, coupled with encouraging flow of foreign remi ances, have served to reduce some economic uncertain es. During the year under review, the SBP Policy Rate increased on a number of occasions and reached 10% in a bid to make borrowing expensive and apply brakes on the accelera ng infla on in the country. Performance Review The Bank of Khyber like other banks faced difficul es during the year 2018 due to increase in policy rate, which effected the overall banking industry. However, the Bank remained commi ed to providing efficient banking solu ons to its customers through its technologically upgraded expanded 8 ANNUAL REPORT 2018
  10. The Bank of Khyber branch network with enhanced risk management framework . The Bank posted profit before tax of Rs.707 million as compared to Rs.2,795 million of the previous year. Accordingly, Profit a er tax also decreased to Rs.466 million. The decrease is, mainly a ributed to recording of loss on sale of securi es. The Net Mark-up / Interest Income a er provisions increased by 7% and stood at Rs.5,143 million as compared to Rs.4,799 million in the corresponding period of 2017. Non-Markup / Interest Income excluding loss on sale of securi es increased by 19%. During the year dividend income also reduced considerably. An increase of 7% was recorded in Administra ve Expenses which increased from Rs.3,775 million in 2017 to Rs. 4,052 million in 2018. The increase is mainly due to opening of new branches, rent, renova on and staff salaries etc. The total assets of the Bank decreased by 9% and reached Rs.223,095 million as compared to Rs.245,132 million at the year-end 2017. The decrease is a ributed to reduc on in Investment by 33% as the funds shi ed to advances to augment core banking ac vi es. An increase of 13% has been witnessed in the gross advances of the Bank which increased to Rs.99,167 million as compared to Rs.87,673 million of the previous year 2017. It was important to note that during the year, efforts were made to meet the financial needs of the Bank through low cost deposit mobiliza on. Accordingly, reliance on borrowings was reduced by 46% to save cost and to encourage cost effec ve channels. The shareholders' equity with a slight decrease stood at Rs.13,809 million. Return on Assets (ROA) and Return on Equity (ROE) stood at 0.21% and 3.98% respec vely. On the liability side, the deposit base of the Bank witnessed consistent growth throughout the financial year 2018 and stood at Rs.171,168 million showing an increase of 7% over the year 2017. This deposit growth was mainly driven through new customer acquisi on and deepening of the exis ng por olio base. The Bank managed to reduce costly deposits and curtailed cost of funds. The Bank at the end of the year under review, was opera ng with 169 branches and 3 sub-branches all over the country including Gilgit Bal stan, FATA and Azad Jammu & Kashmir. A total of 84 branches were func oning as dedicated Islamic Banking branches. Taking cognizance of the fact that the outreach of branch network has direct implica ons on the services, the Bank focused on concentra ng and broadening its services through the extended branch network to provide efficient banking services to its valued customers. Efforts were made to offer be er products and services in an efficient and professional manner. Future Outlook In the year 2019, Pakistan would be entering into the second phase of China Pakistan Economic 9 ANNUAL REPORT 2018
  11. The Bank of Khyber Corridor . This means that the government would focus on trade policies and industry development, moving on from infrastructure. Taking cognizance of the importance of the CPEC, different countries have shown their strong interest in inves ng in this mul faceted investment opportunity. Foreign investments are pouring in which will not only augment the investment climate but will pave the way for Pakistan to emerge as a key player in the region with massive growth in the near future. The Bank being watchful of the economic condi ons would focus on maintaining the growth momentum and asset quality. The cornerstone of Bank's philosophy would remain on improving service quality standards and providing state of the art banking services through leveraging technology and trained human resource. Efforts are also underway to target new market segments and to improve efficiency and produc vity in Bank's overall performance. The Bank would be focusing on enhancing revenue growth and profitability through cross selling various financial products, strengthening internal controls opera onal structure, capacity building, proficient customer services and op mizing branch banking pla orm. Emphasis will be on major cost ra onaliza on ini a ves through con nuous improvement in automa on and product innova ons. Further, more emphasis will be placed on increasing advances in all segments of economy with special focus on SME and agriculture sector to improve Bank's ADR and profitability. The Bank is fully confident that the goals set for the ensuing year will be materialized and would contribute to working of the Bank. Risk Management Framework The Bank emphasizes on maintaining high risk management standards to ensure that the risks being faced by the Bank are properly iden fied, assessed and appropriate mi ga on tools are adopted keeping in view their nature and concentra on. A robust governance structure exists at the Board and Management levels and comprehensive policies covering different risk areas including Credit, Market, Liquidity, Opera onal and Country Risks have been approved by the Board which provide guidance to the management in the conduct of business. The Board has formed a specialized Board's Risk Management Commi ee (“BRMC”) to oversee the risk management ac vi es. The BRMC held regular mee ngs as per the given mandate and thoroughly reviewed primary risks including Credit, Market, Liquidity and Opera onal risks. In addi on, the BRMC also took stock of other material items such as follow up and management of nonperforming accounts, interest rate environment, and afforded guidance in the management of risk assets por olio vis-à-vis capital. At the senior management level, the Bank has dedicated commi ees which include, inter-alia, the Head Office Credit Commi ees and Assets Liability Commi ee (“ALCO”). These commi ees discharge their responsibili es in accordance with their respec ve terms of reference. Risk Management structure at the Bank has been founded in line with regulatory requirements and in 10 ANNUAL REPORT 2018
  12. The Bank of Khyber line with banking prac ces . The structure fundamentally ensures to avoid conflict of interest amongst different func ons and fosters be er control environment. While the branches ini ate business proposi ons for financing or investment and FI limits, the relevant support officials at the Head Office, conducts detailed analysis of these proposals before they are forwarded to Credit Risk Management Department for considera on. Credit Risk Department takes into account various factors such as borrowers' financial posi ons, industry dynamics and quality of collateral for evalua on and form the basis of onward recommenda on to the approval authority. Market and Liquidity risks are being looked a er by the Market and Liquidity risk department where a repor ng framework has been put in place for mely repor ng to the ALCO members. The department is responsible for upda on of Market Risk Management (MRM) Framework encompassing Asset Liability Management, Interest Rate Risk in Banking and Trading Book coupled with Treasury Investments and Equity por olio monitoring against defined Risk tolerance limits. Opera onal Risk is managed through a dedicated func on within the risk management func on with well defined framework. The func on conducts Risk Control Self-Assessment (RCSA) workshops which assess documented process flows of various banking transac ons taking place in day to day func oning of the Bank for inherent and residual risks. An Automated solu on/so ware for Opera onal loss incident repor ng is in place and can be accessed by every employee of the Bank for repor ng of control breaches leading to losses. Opera onal Loss Data also helps the Bank in taking correc ve measures for various control lapses iden fied in it. The Bank con nued to closely monitor market developments – especially interest rate environment, and appropriately realigned business strategy to control downside on the bank's balance sheet. As a result of mely ac ons, the Bank remained fully compliant with regulatory requirements pertaining to capital adequacy and liquidity coverage as per Basel III guidelines. During the year, the Bank also reviewed Internal Capital Adequacy Assessment Process document as per guidelines of the State Bank of Pakistan. Internal Controls An internal control system is designed to provide reasonable assurance that the company ensures compliance of policies, plans and laws, efficient use of resources, accomplishment of goals besides availability and integrity of financial and management informa on. The internal control system of the Bank is very comprehensive, effec vely implemented and being monitored regularly. The Bank has increased its emphasis on control procedures to confirm that corporate policies are executed and correc ons are applied as and when required. 11 ANNUAL REPORT 2018
  13. The Bank of Khyber Board of Directors The total number of Directors are seven (7) as per the following: i. ii. Male Female : : Seven (7) Nil Appointment of a female director on the Board of the Bank is under considera on and in the year 2019 a suitable female director is expected to be inducted on the Board. During the year 2018, details of Board and Board Commi ee mee ngs and their a endance by the Directors are as under: S# 1 2 3 4 5 6 7 8 9 Directors Dr. Shahzad Khan Bangash Non-Execu ve Director Mr. Shakeel Qadir Khan Non-Execu ve Director Mr. Maqsood Ismail Ahmad Non-Execu ve Director Mr. Asad Muhammad Iqbal Independent Director Mr. Javed Akhtar Independent Director Mr. Rashid Ali Khan * Independent Director Mr. Shaharyar Ahmad ** Independent Director Mr. Muhammad Shahbaz Jameel *** Execu ve Director Mr. Saif-ul-Islam *** Execu ve Director Board Mee ngs Total = 6 Audit Commi ee Total = 7 HR&R Commi ee Total = 5 Non-Member Risk Management Commi ee Total = 6 Non-Member 6 Non-Member 6 IT Steering Commi ee Total = 5 Non-Member 7 Non-Member 2 2 6 Non-Member 4 6 Non-Member 6 7 4 Non-Member 5 6 7 Non-Member 6 Non-Member 2 3 4 3 2 6 7 1 Non-Member 3 5 Non-Member 5 5 - 1 Non-Member - - - * On comple on of 3 years term, Mr. Rashid Ali Khan relinquished the office of Director on July 19, 2018. ** Mr. Shaharyar Ahmad appointed member of the HR&R Commi ee a er comple on of term of Mr. Rashid Ali Khan. *** Mr. Saif-ul-Islam took charge from Mr. Muhammad Shahbaz Jameel as Managing Director of the Bank on December 04, 2018. 12 ANNUAL REPORT 2018
  14. The Bank of Khyber Directors ' Training Program In compliance with the Code of Corporate Governance, three Directors namely, Dr. Shahzad Khan Bangash, Mr. Shakeel Qadir Khan and Mr. Asad Muhammad Iqbal have already completed the Directors' Training Program through Pakistan Ins tute of Corporate Governance (PICG) however, Dr. Bangash cer fica on is s ll awaited. Mr. Maqsood Ismail Ahmad has been granted exemp on by Securi es & Exchange Commission of Pakistan (SECP) on the basis of educa on and previous experience as Director of listed companies. Further, the Board has arranged Directors' Training Program for Mr. Shaharyar Ahmad during the year under review. Performance Evalua on Third party evalua on of the Board and its commi ees was ini ated during the year by engaging PICG for compliance to SBP BPRD Circular No. 11 of 2016. PICG sent evalua on links comprising ques ons with ranking scale to all directors. The exercise is on-going and expected to be completed in the first quarter of the current year. The Bank has an in-house mechanism in place for annual evalua on of the Board's own performance and of its commi ees. The evalua on for the year 2018 shall be completed in the year 2019. Directors' Remunera on The current remunera on of non-execu ve and independent directors had been approved by the shareholders in the 27th Annual General Mee ng held on March 29, 2018. According to the approval, an amount of Rs.50,000/- per mee ng (net of taxes) was approved for the non-execu ve and independent directors for a ending Board and its commi ees' mee ngs. The dra of the Directors' Remunera on Policy has been prepared and to be presented in the Board mee ng for review and approval. Credit Ra ng JCR-VIS Credit Ra ng Company Ltd. (JCR-VIS) has reaffirmed the medium to long term and short term en ty ra ngs of the Bank at “A” (Single A) and “A-1” (A One) respec vely. Outlook on the assigned ra ng is “Stable”. The Pakistan Credit Ra ng Agency Limited (PACRA) has also maintained the long term and short term en ty ra ngs of the Bank at “A” (Single A) and “A1” (A One). Ra ng outlook is “Stable”. The ra ngs denote low expecta on of credit risk emana ng from strong capacity for mely payment of financial commitments. Corporate Social Responsibili es Being a socially responsible corporate en ty, the Bank has always given due considera on to shoulder its social responsibili es. The Bank undertook several CSR ini a ves in the areas of Educa on, Sports, Culture, Health Care, Woman Empowerment, Environment and Sanita on. Some of the ac vi es during the year included: 13 ANNUAL REPORT 2018
  15. The Bank of Khyber a . b. c. d. e. f. g. h. i. j. k. l. m. n. o. p. Sponsored Student Talent Expo Pesh-18 Sponsored MTC's Charity Cricket Match Sponsored Peshawar Cricket Club for Blind Donated 120 lunch Boxes to Fa mid Founda on Sponsored PDA's Beau fica on of Ring Road Hayatabad drive Sponsored Beau fica on Project of TMA District Oghi Sponsored Beau fica on Project of Chitral District Sponsored Sports Kits distribu on of Malik Saad Shaheed Memorial Trust Sponsored Botanical Conference on Digi za on and Documenta on of Plant Resources Sponsored Khyber Youth Event Sponsored Cultoor's Pakhtun Fes val 2018 Sponsoring Mardan Woman University Faculty Staff to visit China Sponsored Foot Ball Match Between Chinese Embassy and Pakistan Embassy Sponsored Punjab Veterans Cricket Associa on Sponsored 1st KP Women T20 Super League Tournament Sponsored Business Fest of IM-Sciences Value of Investments in Employees Re rement Benefit Funds Book Value of Investments of Provident and Gratuity Funds as per un-audited accounts of these funds for the year ended December 31, 2018 are Rs.1,451.497 million and Rs.768.667 million respec vely. Pa ern of Shareholding The pa ern and category of shareholding as at December 31, 2018 is annexed with the Annual Report. Six Years Opera ng and Financial Data The ix years highlights of opera ng and financial data is appended below: 2014 92,264 2015 117,292 2016 157,020 2017 2018 Deposits 2013 77,218 159,247 171,168 Advances (net) 35,450 40,057 36,454 31,644 83,369 95,012 Investments 53,363 72,431 88,296 141,602 140,474 94,233 Total Assets 108,170 126,106 155,159 206,400 245,132 223,095 11,913 13,211 13,973 14,685 14,943 13,809 Profit before tax 1,669 1,901 2,959 3,240 2,795 707 Profit a er tax 1,154 1,309 1,789 2,020 1,790 466 10% 9% 13% 14% 12% 4% Capital & Reserves Return on Equity 14 ANNUAL REPORT 2018
  16. The Bank of Khyber Earnings Per Share Earnings per share for the year 2018 is Rs .0.47. Auditors The present auditors Messrs. Grant Thornton Anjum Rahman, Chartered Accountants have completed their term of five years and are not eligible for reappointment. The Board of Directors on the recommenda on of Board Audit Commi ee has proposed the name of Messrs. EY Ford Rhodes, Chartered Accountants along with their remunera on for appointment as auditors for the year ending December 31, 2019. Service Quality To guarantee a culture of quality customer service within the Bank, a dedicated Service Quality Department (SQD) has been working with an objec ve to strengthen the Bank’s service culture with an emphasis on achieving an overall customer sa sfac on level. The Complaint Management Unit is also working under the said department with an emphasis to maintain high Trea ng Customer fairly (TCF) standards. To resolve customers' complaints & disputes in more efficient manners, the Bank has launched its first ever Complaint Management So ware UNISON during the year 2018. The So ware has been designed according to the industry best prac ces and the policies / procedures of the Bank. The so ware gives a 360-degree view of complaint handling process and also equipped in dealing complaints end to end including automated complaint escala on to higher management. Furthermore, it has an enhanced repor ng system which deals in all kinds of reports from root cause analysis of the complaints. Moreover, it is important to note that with the efforts of Complaint Management Unit, the average Turn Around Time for resolu on of complaints was maintained at 3.7 Days where as the approved TAT for complaint resolu on is 7 days. Complaints From 01-01-2018 to 31-12-2018 Number of Complaints 273 Average Time taken in se lement of a complaint 3.7 Days The Bank of Khyber in order to gauge its customer experience launched its first ever Mystery shopping exercise in 2017 which was con nued in 2018. For an unbiased view the services were outsourced to renowned Mystery shopping companies of Pakistan based on the result/findings detailed training session for staff were carried out and sugges ons for improvement of customer experience were shared with the management. As Bankers it is our utmost responsibility to treat customers fairly, equally and be the custodian of their assets both (tangible & intangible). The Bank of Khyber in view of the changing Banking scenario, in order to safe guard customer assets and ensure responsible Banking has taken proac ve steps to reinforce the concept of FAIR TREATMENT in the Bank i.e. has developed and approved a well-defined Fair Treatment Framework, has devised integra ve team comprising of members from different departments looking in to ma ers and ini a ves under the ambit of FTC. 15 ANNUAL REPORT 2018
  17. The Bank of Khyber The Service Quality Department has started releasing a magazine consis ng variety of contents including short stories , events, photographs and achievements of employees that comes out regularly. It is a periodic publica on that is shared throughout the Bank to promote the contribu on of the employees and to encourage them. Events a er the Balance Sheet date No material events occurred subsequent to the date of the Balance Sheet that require adjustments to the enclosed financial statements, except those which have already been made or disclosed. Acknowledgement On behalf of the Board, we would like to thank the State Bank of Pakistan, Finance Department, Government of Khyber Pakhtunkhwa and other regulatory authori es for their con nuous support and guidance. We would also like to thank our valued customers for their con nued patronage. Most importantly, we would like to express our gra tude to our shareholders for their guidance and oversight. Finally, we would like to acknowledge the sincerity, dedica on and hard work of all our staff members. The coopera on of local and foreign correspondents are also appreciated. On behalf of the Board of Directors Saif-ul-Islam Managing Director Shakeel Qadir Khan Director Peshawar: March 1, 2019 16 ANNUAL REPORT 2018
  18. The Bank of Khyber Statement of Compliance with Listed Companies (Code of Corporate Governance) Regula ons, 2017 Name of Company Year ending : : The Bank of Khyber December 31, 2018 This statement has been presented to comply with the Listed Companies (Code of Corporate Governance) Regula ons, 2017 (the Regula ons) read with Regula on G-1 of the Pruden al Regula ons, for the purpose of establishing a framework of good governance. The Bank has complied with the requirements of the Regula ons in the following manner: 1. i. ii. The total number of directors are seven (7) as per the following: Male : Seven (7) Female : Nil 2. The composi on of Board is as follows: Category Independent Directors Other Non-execu ve Directors Execu ve Directors Name Mr. Shaharyar Ahmad (Nominee) Mr. Javed Akhtar Mr. Asad Muhammad Iqbal Dr. Shahzad Khan Bangash Mr. Shakeel Qadir Khan Mr. Maqsood Ismail Ahmed Mr. Saif-ul-Islam (Managing Director) The State Bank of Pakistan has raised observa on on the independence status of nominee Directors. The Bank maintains the independence status of nominee Directors on the basis of clearance received from the State Bank of Pakistan under Fit and Proper Test (FPT) criteria and also these appointments are made under Sec on 11 of the Bank of Khyber Act, 1991, the said Act being special enactment prevails over other laws including the Listed Companies (Code of Corporate Governance) Regula ons, 2017 and the Companies Act, 2017. The Bank is duly supported by legal advice on the ma er. FPT documents for three directors re-elected in EOGM held in June 01, 2018 have been submi ed to State Bank of Pakistan whose response is s ll awaited. Appointment of a female director on the Board of the Bank is under considera on and in the year 2019 a suitable female director is expected to be inducted on the Board. 3. The Directors have confirmed that none of them is serving as a director on more than five listed companies, including this Bank (excluding the listed subsidiaries of listed holding companies where applicable). 4. The Bank has prepared a Code of Conduct and has ensured that appropriate steps have been taken to disseminate it throughout the Bank along with its suppor ng policies and procedures. 17 ANNUAL REPORT 2018
  19. The Bank of Khyber 5 . The Board has developed a vision/mission statement, overall corporate strategy and significant policies of the Bank. A complete record of par culars of significant policies along with the dates on which they were approved or amended has been maintained. 6. All the powers of the Board have been duly exercised and decisions on relevant ma ers have been taken by the Board / shareholders as empowered by the relevant provisions of the Bank of Khyber Act, 1991 and these Regula ons. 7. Pruden al Regula on G-1 requires that roles, responsibili es and authori es of Directors (the Board) and the Management be specified. The powers of the Board and the Management have been enumerated in the Schedules of Financial and Administra ve Powers of the Bank. Further, the same are also contained in various policies duly approved by the Board. The Bank is in the process of formula ng a comprehensive document bifurca ng these authori es and responsibili es. 8. The mee ngs of the Board were presided over by the Chairman and, in his absence, by a director elected by the Board for this purpose. The Board has complied with the requirements of the Bank of Khyber Act, 1991 and the Regula ons with respect to frequency, recording and circula ng minutes of mee ng of the Board. 9. A formal policy containing transparent procedures for remunera on of directors in accordance with the Companies Act, 2017 and these Regula ons has been dra ed and needs approval of the Board. 10. Directors appointed on the Board are acquainted with the rules and regula ons to execute their du es with a sense of objec ve judgement. Currently, at the beginning of term of each director, the Company Secretary provides copies of all applicable laws and regula ons to the directors to acquaint them with their roles and responsibili es according to the Companies Act, 2017 and the Bank of Khyber Act, 1991. However, as per requirement of the CCG regula ons, the Chairman at the beginning of term of each director, shall issue le er to directors se ng out their role, obliga ons, powers and responsibili es in accordance with the Act and the Bank of Khyber Act, 1991, their remunera on and en tlement. 11. The Board has arranged Directors' Training program for Mr. Shaharyar Ahmad during the current year. Further, two Directors have already completed the Directors' Training Program through Pakistan Ins tute of Corporate Governance (PICG) whereas one Director has been granted exemp on by Securi es & Exchange Commission of Pakistan (SECP) on the basis of educa on and previous experience as Director of listed companies. 12. The Bank shall make appropriate arrangements to carry out formal orienta on courses for the directors to acquaint them with applicable laws and regula ons. 13. The Board has approved the appointment of Chief Financial Officer (CFO), Company Secretary and Head of Internal Audit, including their remunera on and terms and condi ons of employment and complied with relevant requirements of the Regula ons. 18 ANNUAL REPORT 2018
  20. The Bank of Khyber 14 . CFO and CEO duly endorsed the financial statements before approval of the Board. 15. The Board has formed commi ees comprising of members given below: a) Audit Commi ee i. ii. iii. iv. Mr. Asad Muhammad Iqbal Secretary Finance Mr. Javed Akhtar Mr. Shaharyar Ahmad – – – – Chairman Member Member Member b) HR and Remunera on Commi ee i. ii. iii. iv. Mr. Shaharyar Ahmad Mr. Maqsood Ismail Ahmad Mr. Asad Muhammad Iqbal The Managing Director – – – – Chairman Member Member Member c) Risk Management Commi ee i. ii. iii. iv. Mr. Maqsood Ismail Ahmad Secretary Finance Mr. Javed Akhtar The Managing Director – – – – Chairman Member Member Member d) i. ii. iii. iv. I.T. Steering Commi ee Secretary Finance Mr. Shaharyar Ahmad Mr. Asad Muhammad Iqbal The Managing Director – – – – Chairman Member Member Member 16. The terms of reference of the aforesaid commi ees have been formed, documented and advised to the commi ees for compliance. 17. The frequency of mee ngs (quarterly / half yearly / yearly) of the commi ees were as per following: a) b) c) d) Audit Commi ee HR and Remunera on Commi ee Risk Management Commi ee I.T. Steering Commi ee 7 mee 5 mee 6 mee 5 mee ngs held in the year 2018 ngs held in the year 2018 ngs held in the year 2018 ngs held in the year 2018 18. The members of the Audit Commi ee possess adequate experience in the fields of banking, management and entrepreneurship, however, induc on of a financially literate member on the 19 ANNUAL REPORT 2018
  21. The Bank of Khyber commi ee is in process . 19. The Board has set up an effec ve internal audit func on. The staff members in Internal Audit func on are considered suitably qualified and experienced for the purpose and are conversant with the policies and procedures of the Bank. 20. Third party evalua on of the Board and its commi ees was ini ated during the year by engaging PICG for compliance to SBP BPRD Circular No. 11 of 2016. In pursuance of this evalua on, PICG sent evalua on links comprising ques ons with ranking scale to all directors. The exercise is ongoing and expected to be completed in the first quarter of the current year. Currently, the Bank has an effec ve mechanism in place for annual evalua on of the Board's own performance, members of Board and of its commi ees. The evalua on for the year 2018 shall be completed in the year 2019. 21. The statutory auditors of the Bank have confirmed that they have been given a sa sfactory ra ng under the quality control review program of the Ins tute of Chartered Accountants of Pakistan (ICAP) and registered with Audit Oversight Board of Pakistan, that they or any of the partners of the firm, their spouses and minor children do not hold shares of the Bank and that the firm and all its partners are in compliance With Interna onal Federa on of Accountants (IFAC) guidelines on code of ethics as adopted by the ICAP. 22. The statutory auditors or the persons associated with them have not been appointed to provide other services except in accordance with the Companies Act 2017, these regula ons or any other regulatory requirement and the auditors have confirmed that they have observed IFAC guidelines in this regard. 23. We confirm that all other requirements of the Regula ons have been complied with. ________________ Saif-ul-Islam Managing Director / CEO ________________________ Dr. Shahzad Khan Bangash Chairman 20 ANNUAL REPORT 2018
  22. 31 21 ANNUAL REPORT 2018
  23. 32 22 ANNUAL REPORT 2018
  24. The Bank of Khyber Statement of Internal Controls This statement is issued in compliance of the requirements of the State Bank of Pakistan , issued vide BSD Circular No. 7 of of 2004, “Guidelines on Internal Controls” and OSED Circular No. 1 of 2014 “Instruc ons on Internal Controls Over Financial Repor ng (ICFR)”. An internal control system is a set of procedures and ac vi es designed to iden fy, evaluate and mi gate the risk in processes and opera ons in order to support the overall objec ves and vision of the Bank. It is one of the prime responsibili es of the Bank's management to establish a system for adequate and reasonably effec ve internal control environment on ongoing basis. Management of the Bank is fully aware of its responsibility and has implemented and maintained system of internal control under the approved policy of the Board of Directors. It should be noted that internal control systems are designed to manage rather to eliminate the risks. Due to system limita ons, human errors an absolute assurance is never possible however a reasonable and effec ve internal control system remain ac ve throughout the year 2018. The internal control structure of the Bank of Khyber (Bank) comprises of the Board of Directors, Senior Management, Risk Management Group, Financial Control (Finance) Division, Opera ons & Support Group, Compliance & Controls Division, Internal Audit Division, Internal Control Units (ICUs) within various divisions and the controls & self-assessment including whistle blow SOPs implemented at various func ons within the Bank. All significant policies and procedure manuals are in place and are updated on reasonable intervals to mi gate the threats. Internal Audit conducts audit of relevant ac vi es and processes to evaluate the effec veness of the control environment throughout the Bank. It is an independent division and reports directly to Board Audit Commi ee (BAC). Func on also ac vely monitors implementa on of correc ve/remedial steps in coordina on with management to ensure that iden fied risks are properly addressed and mi gated in the interest of the Bank. Moreover all process control excep ons and gaps/objec ons raised by internal/external auditors, controlling departments within management or regulatory bodies are dealt seriously for prompt remedial measures and are also discussed at highest possible forums like BOD, BAC and Management Commi ees. The Bank follows the SBP's direc ves for Internal Controls over Financial Repor ng (ICFR), under COSO framework and has complied with the SBP's stage wise implementa on roadmap. As part of this exercise, the Bank has documented a comprehensive ICFR Framework which has been approved by the Board of Directors. As required under the SBP's guidelines, the Bank's external auditors are engaged annually to provide their Long Form Report (LFR) on ICFR, which is submi ed to the SBP within the s pulated melines. Submission of LFR for 2018 will be made in due course in accordance with the guidelines provided by SBP. A quarterly progress report on ICFR, duly approved by the BAC, is also submi ed to the SBP. 23 ANNUAL REPORT 2018
  25. The Bank of Khyber During the year , the Bank conducted tes ng of financial repor ng controls for ensuring the effec veness of ICFR prevalent throughout the year. None of the deficiencies iden fied are expected to have a material impact on financial repor ng. Management considers that the exis ng system of internal controls, including ICFR, is adequate and has been effec vely implemented and monitored, although room for improvement always exists. Bank's Board of Directors endorses the management efforts for implementa on of internal controls. On behalf of the Board of Directors Saif-ul-Islam Managing Director Shakeel Qadir Khan Director Peshawar: March 1, 2019 24 ANNUAL REPORT 2018
  26. The Bank of Khyber Report of The Shariah Board (for the year 2018) While the Board of Directors and Execu ve Management are solely responsible to ensure that the opera ons of Islamic banking of The Bank of Khyber (BOK) are conducted in a manner that comply with Shariah principles at all mes, we are required to submit a report on the overall Shariah compliance environment of the Islamic banking of BOK. By the Grace of Almighty Allah (S.W.T), Islamic Banking Group, being operated in The Bank of Khyber, has completed (15) years of successful opera ons. The Bank of Khyber has 84 standalone Islamic Banking Branches (IBBs) and 39 Islamic banking Windows (IBWs) working in conven onal branches. Islamic Banking Group (IBG) of the bank provides a wide range of Shariah compliant banking services both on Assets & Deposits side in order to serve banking needs of the customers keeping in view the business need of the bank. On Islamic assets side the main business units of BOK is comprising of corporate banking, investment banking, commercial banking, consumer banking, treasury and asset management. Islamic Banking Group of BOK provides all these services through following products: 1 3 5 7 9 11 Ijarah Diminishing Musharakah Mudarabah Salam Export Refinancing Process for Foreign Currency 2 4 6 8 10 12 Murabaha Running Musharakah Is sna Import Export under Islamic Banking Share Purchase Management of Treasury / FI Pool On other side Islamic Banking Group offers a wide range of deposit products, current, saving and term deposit accounts which are designed with flexible features to meet the need of our customers in Shariah compliance manner. Presently BOK Islamic banking is offering following types of deposits accounts: 1 3 5 7 Current Accounts Riba Free Cer ficates Riba Free Special Deposit Pool for Mutual Funds Riba Free Special Deposit Pool Deposits/Cer ficate 2 4 6 8 Interest Free PLS Saving Accounts Foreign Currency Account Riba Free Special Deposit Pool for Banks Riba Free Special Deposit Pool corporate Shariah Compliance in IBG – BOK Shariah compliance has always been the strength of Islamic banking group of BOK where no compromise is made on Shariah principles. Shariah Compliance Division is working under the supervision of Shariah Board with independent Shariah Compliance and Shariah research & Review units to ensure Shariah compliance through mul ple cross func onal checks. 25 ANNUAL REPORT 2018
  27. The Bank of Khyber During the year under review , Shariah Board conducted 4 mee ngs to review various products, structures, process flows/modus operandi, concepts, and transac ons for opinion on Shariah compliance, referred by Islamic banking group of BOK to ensure adherence to Shariah requirements. Beside this there is a system for review of executed transac ons which includes periodic tes ng and checking of sample transac ons by Shariah compliance team and regular Shariah audit by Internal Shariah Audit team. These audits/reviews not only cover the transac ons that the branches/divisions/departments undertake but also include an evalua on of the knowledge of staff pertaining to Islamic Finance. In this regard Shariah Review team has visited 80 % of total Islamic banking branches, Islamic treasury and number of departments in head office whereas internal Shariah Audit team has audited all Islamic branches and divisions/departments of IBG. Based on the above, we conclude Each class of transac ons with respect to the relevant documenta on and procedures adopted by IBG-BOK has been examined on test check basis and we are of the view that: · · · · · · · The Bank has complied with Shariah rules and principles in the light of fatawa, rulings and guidelines issued by its Shariah Board. The Bank has complied with direc ves, regula ons, instruc ons and guidelines related to Shariah compliance issued by SBP in accordance with the rulings of SBP's Shariah Advisory Commi ee. The alloca on of funds, weightages, profit sharing ra os, and profit rela ng to PLS accounts conform to the basis ve ed by SB and in accordance with Shariah rules and principles. The Bank has complied with the SBP instruc ons on profit and loss distribu on and pool management and approved profit and loss distribu on policy of the bank. All sources of income of the bank are Shariah compliant and any earning which has been realized from sources or by means prohibited by Islamic rules and principles have been transferred to the Charity Account which will be distributed as per approved Charity policy of the bank. It is worth men oning here that other than above some mistakes in documenta on have been pointed out by the Shariah Audit Unit and Shariah Review unit which did not render the income to be non Shariah compliant and they have been addressed as per instruc ons issued by the Shariah Board. Product Development Department has been established to comply the requirement of SGF and this department is seeking SB guidance while developing products and documents. The level of awareness, capacity and sensi za on of the staff, management and the BOD in apprecia ng the importance of Shariah compliance in the products and processes of the Bank is adequate and will be further improved through orienta on sessions / trainings. This year, 26 ANNUAL REPORT 2018
  28. The Bank of Khyber number of training sessions have been organized for sta ff members across Pakistan catering to more than 971 employees of the Bank. This number includes, training sessions, orienta on sessions, refresher programs and cer fica on programs in Islamic Financial Products from internal and external resources. Bank is also ac vely suppor ng capacity building ac vi es of the industry by extending its support to ins tu ons including Na onal Ins tute of Banking and Finance (NIBAF), state bank of Pakistan and various other na onal and interna onal ins tu ons in conduc ng Islamic banking training sessions. · · Other than the training to internal staff, the Bank has also conducted 9 Ulama Conferences and Public Awareness Seminars in mul ple ci es of the country for promo ng Islamic banking and awareness of general public which were a ended by a large number of Shariah scholars, Mu is, business men, senior ci zens, customers, general public, professionals and students of various universi es. The Shariah Board has been provided adequate resources enabling it to discharge its du es, effec vely. Conclusion On that note, we, members of Shariah Board of Islamic Banking Group – the Bank of Khyber, do hereby confirm that, in our level best, the opera ons of the IBG- BOK for the year ended 31 December 2018 have been conducted in conformity with the Shariah rules and principles. Recommenda on Based on the review of various transac ons, reports of Internal Shariah Audit and Shariah Compliance opera ons of the Bank, it is recommended that: The bank may con nue its policy of expansion and business growth of Islamic banking. This will further strengthen Islamic banking Group's ability to create awareness and deliver Islamic banking products and services widely. · · With the expansion in size and reach, the Bank may explore the possibility of offering Islamic banking services to the government and specially to provincial government which may include the shariah compliant treatment of all facili es of governments employees. We appreciate the focus of management on capacity building par cularly regionalize advance level trainings for promo on of SME and corporate financing of the bank and recommend con nuing its focus on employees' training related to Islamic banking products and services offered by the Bank with specific focus on front line staff. May Allah (SWT) bless us with the best Tawfeeq to accomplish His cherished tasks, make us successful 27 ANNUAL REPORT 2018
  29. The Bank of Khyber in this world and in the life herea er and forgive our mistakes . “We bear witness only to what we know, and we could not well guard against the unseen!” (Surah Yusuf, verse:81) Allah knows best. Wassalam Alaikum WaRahmat Allah Wa Barakatuh. Qazi Abdul Samad Resident Shariah Board Member Mu i Muhammad Ibrahim Essa Member Shariah Board 28 Mu i Muhammad Zahid Chairman Shariah ANNUAL REPORT 2018
  30. The Bank of Khyber 29 ANNUAL REPORT 2018
  31. The Bank of Khyber 30 ANNUAL REPORT 2018
  32. The Bank of Khyber 31 ANNUAL REPORT 2018
  33. 32 ANNUAL REPORT 2018
  34. 33 ANNUAL REPORT 2018
  35. 34 ANNUAL REPORT 2018
  36. 35 ANNUAL REPORT 2018
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  38. The Bank of Khyber STATEMENT OF FINANCIAL POSITION AS AT DECEMBER 31 , 2018 2018 Note ASSETS Cash and balances with treasury banks Balances with other banks Lendings to financial ins tu ons Investments Advances Fixed assets Intangible assets Deferred tax assets Other assets 7 8 9 10 11 12 13 14 15 LIABILITIES Bills payable Borrowings Deposits and other accounts Liabili es against assets subject to finance lease Subordinated debt Deferred tax liabili es Other liabili es 16 17 18 19 NET ASSETS REPRESENTED BY Share Capital Reserves (Deficit) / surplus on revalua on of assets Unappropriated profit 20 21 2017 Rupees in '000 12,351,453 3,705,360 7,695,642 94,233,239 95,011,903 2,216,422 78,850 1,757,451 6,044,663 223,094,983 8,916,018 3,257,351 1,529,106 140,473,783 83,369,052 2,233,549 136,576 379,751 4,837,198 245,132,384 2016 8,636,526 9,980,928 8,827,307 141,602,355 31,643,885 1,969,655 100,899 - 3,638,719 206,400,274 895,126 34,842,114 171,167,556 4,485,603 211,390,399 11,704,584 1,131,241 64,189,586 159,246,974 5,166,464 229,734,265 15,398,119 775,938 28,700,825 157,020,365 151,745 3,608,857 190,257,730 16,142,544 10,002,524 2,643,483 (2,104,692) 1,163,269 11,704,584 10,002,524 2,550,263 454,868 2,390,464 15,398,119 10,002,524 2,192,169 1,457,298 2,490,553 16,142,544 22 CONTINGENCIES AND COMMITMENTS The annexed notes 1 to 46 and annexures I and III form an integral part of these financial statements. ______________ ___________________ ___________ ___________ __________ Chief Financial Officer Managing Director Director Director Director 37 ANNUAL REPORT 2018
  39. The Bank of Khyber PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED DECEMBER 31 , 2018 Note Mark-up/return/interest earned Mark-up/return/interest expensed Net mark-up/ interest Income 2018 Rupees in ‘000 2017 23 24 14,686,465 9,547,084 5,139,381 14,375,382 9,576,349 4,799,033 25 406,893 49,540 139,225 (1,226,265) 104,262 (526,345) 338,431 58,039 87,305 1,061,172 105,872 1,650,819 4,613,036 6,449,852 4,052,247 25,150 4,077,397 3,774,878 2,776 3,777,654 535,639 170,962 2,672,198 123,201 706,601 2,795,398 (240,502) (1,004,927) 466,099 1,790,471 NON MARK-UP/INTEREST INCOME Fee and commission income Dividend income Foreign exchange income (Loss)/gain on securi es Other income Total non-markup/interest income 26 27 Total income NON MARK-UP/INTEREST EXPENSE Opera ng expenses Workers welfare fund Other charges Total non-markup/interest expenses 28 29 PROFIT BEFORE PROVISIONS Provisions and write offs - net 30 PROFIT BEFORE TAXATION Taxa on 31 PROFIT AFTER TAXATION Rupees 32 Basic & diluted earnings per share 0.47 1.79 The annexed notes 1 to 46 and annexures I to III form an integral part of these financial statements. ____________ Chief Financial Officer __________________ ___________ Managing Director Director 38 ___________ Director ___________ Director ANNUAL REPORT 2018
  40. The Bank of Khyber STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED DECEMBER 31 , 2018 2018 2017 Rupees in '000 Note Profit a er taxa on for the year 466,099 1,790,471 (78,818) (20,699) (49,091) 17,182 (31,909) Other comprehensive income Items that may be reclassified to profit and loss account in subsequent periods: 35.1.8 14.1 Re-measurement loss of defined benefit obliga ons Related deferred tax (99,517) Items that will be reclassified to profit and loss account in subsequent periods: Net change in fair value of available for sale securi es Related deferred tax Total other comprehensive income/(loss) (3,937,785) (1,542,201) 1,378,225 539,771 (2,559,560) (1,002,430) (2,659,077) (1,034,339) Total comprehensive income/(loss) (2,192,978) 14.1 756,132 The annexed notes 1 to 46 and annexures I to III form an integral part of these financial statements. ____________ ___________________ ___________ ___________ __________ Chief Financial Officer Managing Director Director Director Director 39 ANNUAL REPORT 2018
  41. 40 10 ,002,524 2,643,483 2,550,263 93,220 - 358,094 2,192,169 - Statutory reserve __________________ Chief Financial Officer ___________________ Managing Director _______________ Director The annexed notes 1 to 46 and annexures I to III form an integral part of these financial statements. Balance as at December 31, 2018 Dividend for the year December 31, 2017 (Rs. 1.50 per share) 10,002,524 - - Transac ons with owners, recorded directly in equity Dividend for the year December 31, 2016 (Rs. 1.50 per share) Balance as at December 31, 2017 Profit a er taxa on for the year Other comprehensive income - net of tax Transfer to statutory reserve Transac ons with owners, recorded directly in equity - 10,002,524 - Share capital Transfer to statutory reserve Balance as at January 1, 2017 Profit a er taxa on for the year Other comprehensive income - net of tax STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED DECEMBER 31, 2018 ________________ Director (2,878,875) (319,315) (2,559,560) - - - 683,115 (1,002,430) 774,183 774,183 - - - 774,183 - Investments Assets Rupees in '000 Surplus / (deficit) on revalua on of _________________ Director (1,500,557) 11,704,584 (2,659,077) - (99,517) (93,220) (1,500,557) 1,163,269 15,398,119 466,099 (1,500,557) - 16,142,544 1,790,471 (1,034,339) Total 2,390,464 466,099 (1,500,557) (358,094) 2,490,553 1,790,471 (31,909) Unappropriated profit The Bank of Khyber ANNUAL REPORT 2018
  42. The Bank of Khyber CASH FLOW STATEMENT FOR THE YEAR ENDED DECEMBER 31 , 2018 2018 Note 2017 Rupees in '000 CASH FLOW FROM OPERATING ACTIVITIES Profit/(Loss) before taxa on Less: Dividend income 706,601 49,540 657,061 2,795,398 58,039 2,737,359 288,936 42,663 (148,449) (23,171) 65 566 593 161,203 818,264 236,933 37,702 (107,073) 3,279 (1,959) (19,407) 149,475 2,886,834 (6,166,536) (11,494,467) (643,804) (18,304,807) 7,298,201 360,797 (51,618,094) (1,072,498) (45,031,594) (236,115) (29,347,472) 11,920,582 (759,305) (18,422,310) (824,930) (36,733,783) 355,303 35,488,761 2,226,609 1,680,431 39,751,104 (1,269,656) (3,663,312) CASH FLOW FROM INVESTING ACTIVITIES Net investments in available-for-sale securi es Net investments in held-to-maturity securi es Dividends received Investments in opera ng fixed assets Proceeds from sale of fixed assets Net cash flow from inves ng ac vi es 43,394,289 (1,068,361) 49,540 (258,038) 726 42,118,155 15,809,352 (16,587,057) 58,039 (576,667) 4,420 (1,291,913) CASH FLOW FROM FINANCING ACTIVITIES Dividend paid Net cash flow used in financing ac vi es Increase/(decrease) in cash and cash equivalents Cash and cash equivalents at beginning of the year Cash and cash equivalents at end of the year (1,500,928) (1,500,928) 3,883,444 12,173,369 16,056,813 (1,488,860) (1,488,860) (6,444,085) 18,617,454 12,173,369 Adjustments: Deprecia on Amor za on Provision against loans and advances Provision for/(reversal) against dimuni on in value of investments-net Loan write off Loss/ gain on sale of fixed assets Provision against other assets (Increase)/ decrease in opera ng assets Lendings to financial ins tu ons-Gross Held-for-trading securi es Gross advances Others assets Increase/ (decrease) in opera ng liabili es Bills payable Borrowings from financial ins tu ons Deposits Other liabili es Income tax paid Net cash flow used in opera ng ac vi es 33 33 The annexed notes 1 to 46 and annexures I to III form an integral part of these financial statements. __________________ Chief Financial Officer _______________ Managing Director ___________ Director 41 ___________ Director __________ Director ANNUAL REPORT 2018
  43. The Bank of Khyber NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31 , 2018 1. STATUS AND NATURE OF BUSINESS 1.1 The Bank of Khyber ("the Bank") was established under The Bank of Khyber Act, 1991 and is principally engaged in the business of commercial banking and related services. The Bank acquired the status of a scheduled bank in 1994 and is listed on the Pakistan Stock Exchange Limited. The registered office of the Bank is situated at 24-The Mall, Peshawar Can , Peshawar and it has been temporarily shi ed to 1st Floor, State Life Building, 34 - The Mall, Peshawar Can . The Bank operates 169 branches including 84 Islamic banking branches (2017: 166 branches including 83 Islamic banking branches). The long term credit ra ngs of the Bank assigned by The Pakistan Credit Ra ng Agency Limited (PACRA) and JCR-VIS are 'A' and 'A' respec vely and the short-term credit ra ngs assigned are 'A1' (A-One) and 'A-1' (A-One) respec vely. 2. 2.1 BASIS OF PRESENTATION During the year the State Bank of Pakistan (SBP) has revised the format for annual financial Statements for banking sector under BPRD Circular No. 02 dated January 25, 2018. Companies Act, 2017 became applicable for the first me for the prepara on of these financial statements. The above, being the integral part of Statutory financial repor ng framework applicable to the Bank as men oned in note 3.1, below prescribes the nature and contents of disclosures in rela on to various elements of the financial statements. 2.2 In accordance with the direc ves of the Federal Government regarding the shi ing of the banking system to Islamic modes, the State Bank of Pakistan (SBP) has issued various circulars from me to me. Permissible forms of trade-related modes of financing include purchase of goods by the banks from their customers and immediate resale to them at appropriate mark-up in price on deferred payment basis. The purchases and sales arising under the respec ve arrangements (except for Murabaha financings accounted for under Islamic Financial Accoun ng Standard - 1 "Murabaha") are not reflected in these financial statements as such, but are restricted to the amount of facility actually u lized and the appropriate por on of markup thereon. However, the Islamic banking branches of the Bank have complied with the requirements as set out in the Islamic Financial Accoun ng Standards (IFAS). 2.3 The financial results of the Islamic Banking Group have been included in these financial statements for repor ng purpose, a er elimina ng the effects of inter-branch transac ons and balances. Key financial figures of the Islamic Banking Group are disclosed in Annexure "II" to these financial statements. 2.4 These financial statements have been presented in Pakistani Rupee, which is the Bank's func onal and presenta on currency. The figures have been rounded off to the nearest thousand rupees, unless otherwise stated. 2.5 These are separate financial statements of the Bank in which investments in associates are reported on the basis of direct equity interest and are not consolidated or accounted for by using equity method of accoun ng. 3 STATEMENT OF COMPLIANCE 3.1 These financial statements have been prepared in accordance with approved accoun ng and repor ng standards as applicable in Pakistan. Approved accoun ng standards comprise of such Interna onal Financial Repor ng Standards IFRS issued by the Interna onal Accoun ng Standards Board (IASB) and Islamic Financial Accoun ng Standards (IFAS) issued by the Ins tute of Chartered Accountants of Pakistan as are no fied under the Companies Act, 2017 provisions of and direc ves issued under the Banking Companies Ordinance, 1962, the Companies Act, 2017 and direc ves issued by the SBP and the Securi es and Exchange Commission of Pakistan (SECP). Whenever the requirements of the Banking Companies Ordinance, 1962, Companies Act, 2017 or the direc ves issued by the SBP and the SECP differ with the requirements of IFRS or IFAS, requirements of the Banking Companies Ordinance, 1962, the Companies Act, 2017 and the said direc ves shall prevail. 3.2 The SBP, vide BSD Circular No. 10, dated August 26, 2002 has deferred the applicability of Interna onal Accoun ng Standard 39, Financial Instruments: Recogni on and Measurement and Interna onal Accoun ng Standard 40, Investment Property for banking companies ll further instruc ons. Further, according to a no fica on of SECP dated April 28, 2008, IFRS 7 "Financial Instruments: Disclosure" has not been made applicable for banks. Accordingly, the requirements of these standards have not been considered in the prepara on of these financial statements. However, investments have been classified and valued in accordance with the requirements prescribed by SBP through its various circulars. 3.3 IFRS 8, 'Opera ng Segments' is effec ve for the Bank's accoun ng period beginning on or a er January 1, 2009. All banking 42 ANNUAL REPORT 2018
  44. The Bank of Khyber NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31 , 2018 companies in Pakistan are required to prepare their annual financial statements in line with the format prescribed under BPRD Circular No. 02 dated January 25, 2018, 'Revised Forms of Annual Financial Statements', effec ve from the accoun ng year ended December 31, 2018. Management believes that as the SBP has defined the segment categoriza on in the above men oned circular, the SBP requirements prevail over the requirements specified in IFRS 8. Accordingly, segment informa on disclosed in these financial statements is based on the requirements laid down by the SBP. 3.4 SBP through BPRD Circular No. 04 of 2015 dated February 25, 2015 has deferred applicability of Islamic Financial Accoun ng Standard-3 for Profit & Loss Sharing on Deposits (IFAS-3) issued by the Ins tute of Chartered Accountants of Pakistan and no fied by the Securi es & Exchange Commission of Pakistan (SECP), vide their SRO No. 571 of 2013 dated June 12, 2013 for ins tu ons offering Islamic Financial Services (IIFS). The standard will result in certain new disclosures in the financial statements of the Bank as and when no fied by SBP. 3.5 Standards, interpreta ons of and amendments to published approved accoun ng standards that are not yet effec ve in the current year. Effec ve date (annual periods beginning on or a er) Standard, Interpreta on or Amendment -IAS 28 - Long Term Interest in Associates and Joint Venture (Amendments to IAS-28) -IFRIC 23 - Uncertainty over Income Tax Treatments -IFRS 15 - Revenue from contracts with customers -IFRS 16- Leases -Annual Improvements to IFRS Standards 2015-2017 Cycle -IAS-19 Plan Amendment, Curtailment or Se lement (Amendments to IAS 19) (Employee Benefits) -Sale or Contribu on of Assets between an Investor and its Associate or Joint Venture (Amendments to IFRS 10 and IAS 28) -IFRS 17- Insurance Contracts -IFRS 9 - Financial Instruments January 1, 2019 January 1, 2019 July 1, 2018 January 1, 2019 January 1, 2019 January 1, 2019 N/A January 1, 2021 "period ending on or a er June 30, 2019" 3.6 With respect to 'IFRS 15 - Revenue from contracts with customers' the Bank is currently in the process of assessing the poten al impacts of changes required in revenue recogni on policies upon adop on of the standard. Whereas on the applica on of "IFRS 9 - Financial Instruments", instruc ons of SBP are awaited. 3.7 There are certain new and amended standards, interpreta ons and amendments that are mandatory for the accoun ng periods beginning on or a er January 1, 2018 but are considered not to be relevant or do not have any significant effect on the Bank's opera ons and therefore not detailed in these financial statements. 4 BASIS OF MEASUREMENT Accoun ng conven on These financial statements have been prepared under the historical cost conven on except that certain opera ng fixed assets have been stated at revalued amounts, certain investments, deriva ve financial instruments have been stated at fair value and the recogni on of certain employees benefits at present value, as disclosed in their respec ve note. 5 SIGNIFICANT ESTIMATES AND JUDGEMENTS The prepara on of financial statements in conformity with approved accoun ng and repor ng standards requires management to make judgments, es mates and assump ons that affect the applica on of accoun ng policies and reported amounts of assets, liabili es, income and expenses. The es mates and associated assump ons are based on historical experience and various other factors that are believed to be reasonable under the circumstances. Actual results may differ from these es mates. The es mates and underlying assump ons are reviewed on an ongoing basis. Revisions to accoun ng es mates are recognized in the period in which the es mate is revised if the revision affects only that period, or in the period 43 ANNUAL REPORT 2018
  45. The Bank of Khyber NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31 , 2018 of the revision and future periods if the revision affects both current and future periods. The areas where various assump ons and es mates are significant to the Bank’s financial statements or where judgment was exercised in applica on of accoun ng policies are as follows: 5.1 - Classifica on of investments In classifying investments the Bank follows the guidance provided in SBP circulars: - "Investments classified as 'held for trading', are securi es which are acquired with an inten on to trade by taking advantage of short term market / interest rate movements and are to be sold within 90 days of acquisi on." - "Investments classified as 'held to maturity' are non-deriva ve financial assets with fixed or determinable payments and fixed maturity. In making this judgment, the Bank evaluates its inten on and ability to hold such investment to maturity." - The investments which are not classified as 'held for trading' or 'held to maturity' are classified as 'available for sale'. 5.2 Impairment of available-for-sale equity investments The Bank determines that "available-for-sale" equity investments are impaired when there has been a significant or prolonged decline in the fair value below its cost. This determina on of what is significant or prolong requires management to exercise judgment. In making this judgment, the Bank evaluates among other factors, the vola lity in share price. In addi on, impairment may be appropriate when there is evidence of deteriora on in the financial health of the investee, industry and sector performance, changes in technology, and opera onal and financing cash flows. 5.3 Provision against non-performing loans and advances and debt securi es classified as investments The Bank reviews its loan por olio and debt securi es classified as investments to assess the amount of non-performing loans and advances and debt securi es and provision required there-against. While assessing this requirement various factors including the delinquency in the account, financial posi on of the borrower, the forced sale value of securi es and requirements of the Pruden al Regula ons are considered. For por olio impairment provision on consumer advances and loans to small enterprises, the Bank follows the general provision requirement set out in Pruden al Regula ons. 5.4 Income taxes While making the es mates for income taxes currently payable by the Bank, management looks at the current income tax laws and the decisions of appellate authori es on certain issues in the past. In making provision for deferred taxes, es mates of the Bank's future taxable profits and expected reversal of deduc ble temporary differences are taken into account. 5.5 Deprecia on, amor za on and revalua on of opera ng fixed assets / intangible assets In making es mates of the deprecia on / amor za on, management uses method which reflects the pa ern in which economic benefits are expected to be consumed by the Bank. The method applied is reviewed at each financial year end and if there is a change in the expected pa ern of consump on of the future economic benefits embodied in the assets, the method is changed to reflect the change in pa ern. Such change is accounted for as change in accoun ng es mates in accordance with Interna onal Accoun ng Standard - 8, "Accoun ng Policies, Changes in Accoun ng Es mates and Errors". Further, the Bank es mates the revalued amount of leasehold land on a regular basis. The es mates are based on valua ons carried out by independent professional valuers under the current market condi ons. 5.6 Defined benefit plan The liability of the defined benefit plan (gratuity) is determined using actuarial advice using the Projected Unit Credit Method. The actuarial valua on involves making assump ons about discount rates, expected rates of returns on assets and future salary increases, which have been disclosed in note 35.1. Actuarial assump ons are en ty's best es mates of the variables that will determine the ul mate cost of providing post-employment benefits. Changes in these assump ons in future years may affect the liability / asset under the plan in those years. The latest actuarial valua on has been carried out on December 31, 2018. 5.7 Fair value of deriva ves "The fair values of deriva ves which are not quoted in ac ve markets are determined by using valua on techniques. The 44 ANNUAL REPORT 2018
  46. The Bank of Khyber NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31 , 2018 valua on techniques take into account the relevant interest rates in-effect at the date of statement of financial posi on and the rates contracted.” 6 6.1 6.2 a) b) c) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accoun ng policies adopted in the prepara on of these financial statements are consistent with those of the previous financial year except the change explained in note 6.21. Cash and cash equivalents For the purpose of cash flow statement, cash and cash equivalents include cash and balances with treasury banks and balances with other banks in current and deposit accounts. Lendings to / borrowings from financial ins tu ons The Bank enters into transac ons of borrowing (re-purchase) from and lending (reverse re-purchase) to financial ins tu ons, at contracted rates for a specified period of me. These are recorded as under: Sale under repurchase agreements Securi es sold with a simultaneous commitment to repurchase at a specified future date (repos) con nue to be recognized in the statement of financial posi on and are measured in accordance with accoun ng policies for investment and counter party liability is included in borrowings from financial ins tu ons. The difference between sale and repurchase price is treated as mark-up/return/interest expense and accrued over the term of the repo agreement. Purchase under resale agreement Securi es purchased with a corresponding commitment to resell at a specified future date (reverse repos) are not recognized in the statement of financial posi on, instead amounts paid under these agreements are included in lendings to financial ins tu ons. The difference between purchase and resale price is treated as mark-up/return/interest income and accrued over the term of the reverse repo agreement. Other lendings Other lendings include term lendings and unsecured lendings to financial ins tu ons. These are stated net of provision. Mark-up / interest income on such lendings is recorded on me propor on basis using effec ve interest rate method except mark-up on impaired/delinquent lendings, which are recognized on receipt basis. d) Other borrowings Other borrowings including borrowings from SBP are recorded at proceeds received. Mark-up expense on such borrowings is charged to the profit and loss account on me propor on basis using effec ve interest method. 6.3 6.3.1 Investments Classifica on The Bank classifies its investments as follows: Held-for-trading These are securi es which are either acquired for genera ng a profit from short-term fluctua ons in market prices, interest rate movements & dealer's margin or are securi es included in a por olio in which a pa ern of short-term profit taking exists. 6.3.2 6.3.3 Held-to-maturity These are securi es with fixed or determinable payments and fixed maturity in respect of which the Bank has the posi ve intent and ability to hold to maturity. 6.3.4 Available-for-sale These are investments that do not fall under the "held for trading" or "held-to-maturity" categories. 6.3.5 Associates Investments in associated companies are stated at cost. Provision is made for impairment in value, if any. Regular way contracts All purchases and sales of investments that require delivery within the me frame established by regula on or market conven on are recognized at trade date, which is the date at which the Bank commits to purchase or sell the investments. 6.3.6 6.3.7 Ini al measurement Investments other than those categorized as “held-for-trading” are ini ally recognized at fair value, which includes transac on costs associated with investments. Investments classified as “held-for-trading” are ini ally recognized at fair 45 ANNUAL REPORT 2018
  47. The Bank of Khyber NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31 , 2018 value and transac on costs are expensed in the profit and loss account. 6.4 6.4.1 Subsequent measurement Held-for-trading These are measured at subsequent repor ng dates at fair value. Gains and losses on re-measurement are included in the profit and loss account. 6.4.2 Held-to-maturity These are measured at amor zed cost using the effec ve interest rate method, less any impairment loss recognized to reflect irrecoverable amounts. 6.4.3 Available-for-sale Quoted-securi es classified as available-for-sale investments are measured at subsequent repor ng dates at fair value. Any surplus / deficit arising thereon is kept in a separate account shown in the statement of financial posi on below equity and taken to the profit and loss account when actually realized upon disposal or when the investment is considered to be impaired. Unquoted equity securi es are valued at the lower of cost or break-up value. A decline in the carrying value is charged to the profit and loss account. The break-up value of these equity securi es is calculated with reference to the net assets of the investee company as per the latest available audited financial statements. Investments in other unquoted securi es are valued at cost less impairment losses. 6.4.4 Impairment Provision for diminu on in the value of securi es is made a er considering impairment, if any, in their value and charged to profit and loss account. Impairment is recognized when there is an objec ve evidence of significant or prolonged decline in the value of such securi es. Provision for impairment against debt securi es is made as per the aging criteria prescribed by the Pruden al Regula ons of SBP. 6.5 6.5.1 Advances Advances (including Islamic financings) are stated net of specific and general provisions. Specific and general provision against advances is determined on the basis of Pruden al Regula ons and other direc ves issued by the SBP and charged to the profit and loss account. Advances are wri en-off when there are no realis c prospects of recovery. 6.5.2 Murabaha Funds disbursed for purchase of goods are recorded as 'Advance for Murabaha'. On culmina on of Murabaha, i.e. sale of goods to customers, Murabaha financings are recorded at the deferred sale price net of profit. Goods that have been purchased but remained unsold are recorded as inventories. Profit is recorded at the me of sale of goods under Murabaha as deferred income and is included in the amount of murabaha financings. Profit is taken to the profit and loss account over the period of the murabaha. 6.5.3 Ijarah financings Ijarah financings executed on or before December 31, 2008 have been accounted for under Finance method, there a er all Ijarah financings are accounted for under IFAS-2. (a) Under Finance method, the present value of minimum Ijarah payments have been recognized and shown under financings. The unearned income, i.e. the excess of aggregate Ijarah rentals over the cost of the asset and documenta on charges under Ijarah facility is deferred and then amor zed over the term of the Ijarah, so as to produce a constant rate of return on net investment in the Ijarah. Gains / losses on termina on of Ijarah contracts are recognized as income on a receipt basis. Income on Ijarah is recognized from the date of delivery of the respec ve assets to the Mustajir (lessee). (b) Under IFAS-2 method, assets underlying Ijarah financing have been carried at cost less accumulated deprecia on and impairment losses, if any, and are shown under financing. Rentals accrued from Ijarah financings net of deprecia on charged are taken to profit and loss account. Deprecia on on Ijarah assets is charged by applying the straight line method over the Ijarah period which is from the date of delivery of respec ve assets to Mustajir up to the date of maturity / termina on of Ijarah agreement. 46 ANNUAL REPORT 2018
  48. The Bank of Khyber NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31 , 2018 6.5.4 6.5.5 6.5.6 Diminishing Musharakah Diminishing Musharakah represents an asset in joint ownership, whereby a partner promises to buy the equity share of the other partner un l the tle to the equity is totally transferred to him. The partner using the asset pays the propor onate rental of such asset to the other partner (the Bank). Profit on Diminishing Musharakah financings is recognized on accrual basis. Salam Salam is a sale transac on where the seller undertakes to supply some specific goods/commodi es to the buyer at a future date against an advance price fully paid on spot. In Salam Bank financing, the Bank purchase some specific goods / commodi es from its customers to be delivered to within an agreed me. The goods are then sold and the amount hence financed is received back to Bank. Is sna In Is sna financing, the Bank places an order to client (seller/manufacturer) to manufacture and deliver specific goods/commodi es at an agreed price. The goods are then sold and the amount hence financed is received back to the Bank. 6.5.7 Inventories The Bank values its inventories at the lower of cost or net realizable value. Cost of inventories represents the actual purchase made by the Bank / customers as an agent on behalf of the Bank for subsequent sale. The net realizable value is the es mated selling price in the ordinary course of business less the es mated cost necessary to make the sale. 6.6 Opera ng fixed assets and deprecia on 6.6.1 Capital-work-in progress Capital-work-in progress is stated at cost less accumulated impairment losses, if any. These are transferred to opera ng fixed assets as and when the assets are available for use. 6.6.2 Tangible fixed assets Property and equipment, except land which is not depreciated, are stated at cost less accumulated deprecia on and accumulated impairment losses, if any. Cost includes expenditure that is directly a ributable to the acquisi on of fixed assets. Leasehold land is carried at revalued amount while freehold land is carried at cost less accumulated impairment losses, if any. Subsequent costs are included in the asset's carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Bank and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the profit and loss account when incurred. Deprecia on on fixed assets is charged to income over the useful life of the asset on a systema c basis by using the straight line method at the rates stated in note 12.3. Deprecia on charge commences from the month when the asset is available for use and con nues ll the month the asset is discon nued either through disposal or re rement. Revalua on of leasehold land is carried out with sufficient regularity to ensure that the carrying amount of the land does not differ materially from the fair value. Any revalua on increase in the carrying amount of land is recognized in other comprehensive income and presented as a separate component of equity as “revalua on surplus on fixed assets“ except to the extent that it reverses a revalua on decrease / deficit for the same asset previously recognized in profit and loss account, in which case the increase is first recognized in profit and loss account to the extent of the decrease previously charged. Any decreases that reverse previous increases of the same asset are first recognized in other comprehensive income to the extent of the remaining surplus a ributable to the asset, all other decreases are charged to profit and loss account. The revalua on reserve is not available for distribu on to the Bank’s shareholders. The assets' residual values, useful lives and deprecia on methods are reviewed, and adjusted if appropriate, at each repor ng date. Gains and losses on disposal of fixed assets are included in the profit and loss account, except that the related surplus on revalua on of fixed assets (net of deferred tax) is directly transferred to un-appropriated profit. 6.6.3 Intangible assets Intangible assets having finite useful life are stated at cost less accumulated amor za on and impairment losses, if any. Such 47 ANNUAL REPORT 2018
  49. The Bank of Khyber NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31 , 2018 Intangible assets are being amor zed using the straight-line method over their useful lives as stated in note 13.2. Amor za on is charged from the month of acquisi on and up to the month of dele on. The useful lives and amor za on method are reviewed and adjusted, if appropriate, at each repor ng date. Costs associated with maintaining computer so ware are recognized as an expense when incurred. 6.7 Impairment of non-financial assets The carrying amounts of the Bank’s non-financial assets, other than deferred tax asset, are reviewed at each repor ng date for impairment whenever events or changes in circumstances indicate that the carrying amounts of the assets may not be recoverable. If such indica on exists, and where the carrying value exceeds the es mated recoverable amount, assets are wri en down to their recoverable amount. Recoverable amount is the greater of net selling price and value in use. The resul ng impairment loss is taken to the profit and loss account except for the impairment loss on revalued assets, which is adjusted against the related revalua on surplus to the extent that the impairment loss does not exceed the surplus on revalua on of that asset. 6.8 Taxa on Income tax expense comprises of current and deferred tax. Income tax expense is recognized in the profit and loss account except to the extent that it relates to items recognized directly in equity, in which case it is recognized in equity. 6.8.1 Current Provision for current taxa on is based on taxable income for the year determined in accordance with the prevailing laws of taxa on on income earned. The charge for current tax is calculated using prevailing tax rates or tax rates expected to apply to the profits for the year. The charge for the current year also includes adjustments, where considered necessary rela ng to prior years, arising from assessments finalized during the year for such years. 6.8.2 Deferred Deferred tax is recognized using the balance sheet liability method on all temporary differences at the repor ng date between the tax bases of assets and liabili es and their carrying amounts for financial repor ng purposes. Deferred tax is calculated at the tax rates that are expected to apply to the periods when the differences are expected to reverse, based on tax rates that have been enacted or substan vely enacted at the repor ng date. Deferred tax asset is recognized only to the extent that it is probable that future taxable profits will be available against which the assets can be u lized. Deferred tax asset is reduced to the extent that it is no longer probable that the related tax benefit will be realized. Deferred tax, if any, on revalua on of fixed asset and investments is recognized as an adjustment to surplus / (deficit) arising on revalua on in accordance with the requirements of IAS-12 "Income Taxes". 6.9 EMPLOYEE BENEFITS 6.9.1 Defined benefit plan The Bank operates a funded gratuity scheme for all its permanent employees. Contribu ons are made to the fund by the Bank in accordance with the rules of the scheme. Employees are en tled to the benefits under the scheme which comprise of two last drawn basic salaries for each completed year of service. Contribu ons to the fund are made on the basis of actuarial recommenda ons. Actuarial valua on was carried out on December 31, 2018 using the Projected Unit Credit Method. Actuarial gains/losses arising from experience adjustments and changes in actuarial assump ons are recognized immediately in other comprehensive income. 6.9.2 Defined contribu on plan The Bank operates a recognized contributory provident fund covering all its permanent employees. Equal monthly contribu ons are made by the Bank and the employees to the fund at a rate of fi een percent of basic salary. 6.9.3 Compensated absences The Bank accounts for all accumula ng compensated absences when employees render service that increases their en tlement to future compensated absences. The liability is determined based on actuarial valua on carried out using the Projected Unit Credit Method. The latest actuarial valua on has been carried out on December 31, 2018. 48 ANNUAL REPORT 2018
  50. The Bank of Khyber NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31 , 2018 6.10 6.10.1 Financial instruments Financial assets and liabili es Financial assets and financial liabili es are recognized at the me when the Bank becomes a party to the contractual provision of the instrument. Financial assets are de-recognized when the contractual right to future cash flows from the asset expires or is transferred along with the risk and reward of the asset. Financial liabili es are de-recognized when obliga on specific in the contract is discharged, cancelled or expired. Any gain or loss on de-recogni on of the financial asset and liability is recognized in the profit and loss account of the current period. The par cular recogni on and subsequent measurement methods adopted for significant financial assets and financial liabili es are disclosed in the individual policy statements associated with them. 6.10.2 Deriva ve financial instruments Deriva ve financial instruments are ini ally recognized at fair value on the date on which the deriva ve contract is entered into and are subsequently re-measured at fair value using appropriate valua on techniques. All deriva ve financial instruments are carried as assets when fair value is posi ve and liabili es when fair value is nega ve. Any change in the fair value of deriva ve financial instruments is taken to the profit and loss account. 6.11 Revenue Income on murabaha is accounted for on culmina on of murabaha transac on and is recognized as revenue on a me propor onate basis. Unearned profit is accounted for by credi ng deferred murabaha income, which is recorded as a liability. "Interest / return / mark-up on regular loans / advances (other than murabaha) and debt securi es investments is recognized on me propor on basis. Where debt securi es are purchased at premium or discount, the same is amor zed through the profit and loss account using the effec ve interest rate method. " Interest / return / mark-up recoverable on classified loans and advances and investments is recognized on receipt basis. Interest / return / mark-up on classified rescheduled / restructured loans and advances and investments is recognized as permi ed by the regula ons of the SBP. For Ijarah contracts wri en up to December 31, 2008, the Bank follows finance method in recognizing income. Under this method the unearned finance income, i.e., the excess of aggregate Ijarah rentals over the cost of the asset and documenta on charges under Ijarah facility, is deferred and then amor zed over the term of the Ijarah, so as to produce a constant rate of return on net investment in the Ijarah. Gains / losses on termina on of Ijarah contracts are recognized as income on receipt basis. Income on Ijarah is recognized from the date of delivery of the respec ve assets to the Mustajir. Rentals on Ijarah contracts wri en subsequent to December 31, 2008 are recognized as income on accrual basis as and when the rentals become due. Income is recognized net of deprecia on charged in the profit and loss account. Dividend income is recognized when the Bank’s right to receive the dividend is established. Fee, commission, liquidated damages etc. are recorded on accrual basis when the service has been provided. Fees and commission which in substance amount to an addi onal interest charge, are recognized over the life of the underlying transac on on a level yield basis. Gain / loss on sale of investments is credited / charged to profit and loss account. 6.12 a) Foreign currencies Foreign currency transac ons and balances Transac ons in foreign currencies are translated into Pakistani Rupees at the exchange rates prevailing on the transac on date. Monetary assets and liabili es in foreign currencies are expressed in Rupee terms at the rates of exchange prevailing on the repor ng date. Foreign bills purchased and forward foreign exchange contracts are valued at forward rates applicable to their respec ve maturi es. 49 ANNUAL REPORT 2018
  51. The Bank of Khyber NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31 , 2018 b) c) Transla on gains and losses Transla on gains and losses are included in profit and loss account. Commitments Commitments for outstanding forward foreign exchange contracts disclosed in the financial statements are translated at forward rates applicable to their respec ve maturi es. Con ngent liabili es / commitments for le ers of credit and le ers of guarantee denominated in foreign currencies are expressed in Rupee terms at the rates of exchange prevailing on the repor ng date. 6.13 Segment Repor ng A segment is a dis nguishable component of the Bank that is engaged either in providing products or services (business segment), or in providing products or services within a par cular economic environment (geographical segment), which is subject to risks and rewards that are different from those of other segments. Segment informa on is presented as per the guidance of SBP. 6.13.1 Business Segments The Bank comprises of following main business segments: a) Corporate finance This includes, services provided in connec on with mergers and acquisi on, underwri ng, priva za on, securi za on, research, debts instruments, equity, syndica on, IPO and secondary private placements. b) Trading and sales It includes fixed income, equity, foreign exchanges, commodi es, credit, funding, own posi on securi es, lending and repos, brokerage debt and prime brokerage. c) Retail banking It includes retail lending and deposits, banking services, trust and estates, private lending and deposits, banking services and retail offered to its retail customers. d) Commercial banking Commercial banking includes project finance, real estate, export finance, trade finance, factoring, leasing, lending, guarantees, bills of exchange and deposits. 6.13.2 Geographical segments The Bank conducts all its opera ons in Pakistan. 6.14 Provisions Provisions are recognized when the Bank has a legal or construc ve obliga on arising as a result of past events, it is probable that an ou low of resources embodying economic benefits will be required to se le the obliga on and a reliable es mate of the amount of the obliga on can be made. Provisions are reviewed at each repor ng date and are adjusted to reflect the current best es mate. Provision against iden fied non-funded losses is recognized when in mated and reasonable certainty exists for the Bank to se le the obliga on. The loss is charged to the profit and loss account net of expected recovery and is classified under other liabili es 6.15 a) b) Borrowings / deposits and their cost "Borrowings / deposits are recorded at the proceeds received." Borrowings / deposits cost are recognized as expense in the period in which these are incurred using effec ve mark-up / interest rate method. 6.16 Off se ng Financial assets and financial liabili es are set off and the net amount is reported in the financial statements when there is a legally enforceable right to set off and the Bank intends to either se le on a net basis, or to realize the assets and to se le the 50 ANNUAL REPORT 2018
  52. The Bank of Khyber NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31 , 2018 liabili es simultaneously. 6.17 Earnings per share The Bank presents earnings per share (EPS) data for its ordinary shares. EPS is calculated by dividing the profit or loss a ributable to ordinary shareholders of the Bank by the weighted average number of ordinary shares outstanding during the year. 6.18 Dividends and appropria ons to reserves Dividend and appropria on to reserves, except appropria ons which are required under the law, a er the repor ng date, are recognized in the Bank’s financial statements in the year in which these are approved. 6.19 Fiduciary assets Assets held in a fiduciary capacity are not treated as assets of the Bank in statement of financial posi on. 6.20 Statutory Reserve Every Bank incorporated in Pakistan is required to transfer 20% of their profit to a statutory reserve un l the reserve equals share capital, therea er 10% of the profit of the Bank is to be transferred to this reserve. 6.21 Changes in accoun ng policies Previously, the Bank’s accoun ng policy for surplus on revalua on of fixed assets was in accordance with the provisions of sec on 235 of the repealed Companies Ordinance, 1984 which required "a deficit arising on revalua on of a par cular property to be adjusted against the total balance in the surplus account, or if no surplus existed, it is to be charged to the profit or loss account as an impairment loss. With the enactment of Companies Act, 2017 "deficit arising on revalua on of a par cular property is now to be accounted for in accordance with the relevant standards (IAS/IFRSs) , which requires that such deficit cannot be adjusted against the surplus in another property, but is to be taken to the profit or loss account as an impairment loss. Consequently, the Bank has changed its policy for accoun ng of deficit arising on revalua on of fixed assets, however, the change has no impact on current and prior year’s financial statements of the bank. The revised accoun ng policy is explained in note 6.6.2 above. Further, the requirements of the repealed Companies Ordinance, 1984 to present the surplus on revalua on of fixed assets as a separate item below equity has not been carried forwarded in the Companies Act, 2017. In view of the above and also in accordance with SBP’s revised format of annual financial statements (note 2.1), the surplus on revalua on of fixed assets is now shown in the statement of financial posi on and the statement of changes in equity as a part of equity. Similarly, the SBP’s revised format of annual financial statements (note 2.1) also requires the Bank to disclose surplus/deficit on revalua on of investments in statement of changes in equity whereas in the previous years, the same was disclosed in the balance sheet below equity. 51 ANNUAL REPORT 2018
  53. The Bank of Khyber NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31 , 2018 Note 7 CASH AND BALANCES WITH TREASURY BANKS In hand Local currency Foreign currency With State Bank of Pakistan in Local currency current account Foreign currency current account Foreign currency deposit account 7.1 7.1 7.2 With Na onal Bank of Pakistan in Local currency current account Local currency saving account Foreign currency deposit account Prize bonds 2018 2017 Rupees in ‘000 2,110,143 247,451 2,357,594 1,704,772 261,795 1,966,567 9,051,401 82,680 73,760 9,207,841 6,171,976 58,006 87,311 6,317,293 767,556 6,658 9,517 783,731 2,287 578,779 4,682 48,033 631,494 664 12,351,453 8,916,018 7.1 The current accounts are maintained under the requirements of sec on 22 of the Banking Companies Ordinance, 1962 as amended from me to me. 7.2 These represent accounts maintained for mandatory reserve requirements with the SBP. These accounts carry mark up rate of 1.35 % (2017: 0.37%) per annum. Note 8 2018 2017 Rupees in ‘000 BALANCES WITH OTHER BANKS In Pakistan In current account In deposit account 8.1 Outside Pakistan In current account In deposit account 8.2 Provision for doub ul placement with the bank 8.3 3,008,582 577,196 3,585,778 2,564,648 241,302 2,805,950 18,785 110,825 129,610 (10,028) 32,225 429,204 461,429 (10,028) 3,705,360 3,257,351 8.1 These represent short-term deposits with banks at mark-up rates ranging from 2 % to 10.59 % (2017: 0.10% to 5.67%) per annum. 8.2 These represent placements of funds with banks outside Pakistan, which have been generated through the foreign currency deposit scheme (FE-25). These placements carry no mark-up. 52 ANNUAL REPORT 2018
  54. The Bank of Khyber NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31 , 2018 8.3 Par culars of provision for doub ul placement with a bank Note Opening balance Charge for the year Reversals Closing balance 9 LENDINGS TO FINANCIAL INSTITUTIONS Call money lendings Repurchase agreement lendings (Reverse Repo) Bai Muajjal receivable with State Bank of Pakistan Placements with financial ins tu ons Less: provision held against lending to financial ins tu ons Lending to financial ins tu ons - net of provision 9.2 9.3 9.4 9.5 2018 2017 Rupees in '000 (10,028) (10,028) (10,028) (10,028) 2,500,000 5,195,642 238,944 7,934,586 (238,944) 7,695,642 1,529,106 238,944 1,768,050 (238,944) 1,529,106 7,695,642 7,695,642 1,529,106 1,529,106 9.1 Par culars of lendings In local currency In foreign currencies Total 9.2 This represents unsecured lendings to commercial banks at the mark-up rate ranging from 9.50% to 10.50% (2017: Nil ) with upto January 31, 2019. 9.3 Repurchase agreement lendings (Reverse Repo) secured against government securi es carrying mark-up rates ranging from 10.20% to 10.45% (2017: Nil) per annum with maturi es up to January 02, 2019. 9.4 Bai Muajjal secured lending with State Bank of Pakistan carried profit rate ranging Nil (2017: 5.5641% to 5.7641%) per annum. 9.5 Par culars of provision against lendings to financial ins tu ons Opening balance Charge for the year Reversals Closing balance 53 2018 2017 Rupees in '000 (238,944) (238,944) (238,944) (238,944) ANNUAL REPORT 2018
  55. The Bank of Khyber NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31 , 2018 9.6 Securi es held as collateral against lending to financial ins tu ons Held by Bank 2018 2017 Further given as collateral Further given as collateral Total Held by Bank Total Rupees in '000 Market Treasury Bills 5,195,642 - 5,195,642 - - 2018 9.7 Classified lending Category of classifica on Domes c Other assets especially men oned Substandard Doub ul Loss Total 10 INVESTMENTS 10.1 Investments by type: Classified lending Rupees in '000 Provision held 238,944 238,944 Overseas Not past due but impaired Overdue by: Upto 90 days 91 to 180 days 181 to 365 days 365 days 238,944 238,944 238,944 238,944 238,944 238,944 - - - - - - - 238,944 238,944 238,944 Provision for diminu on Provision held - 238,944 2018 Cost/ amor zed cost 2017 2017 Surplus / (deficit) Carrying value Cost/ amor zed cost Provision for diminu on Surplus / (deficit) Carrying value Rupees in '000 Available-for-sale securi es Federal Government Securi es Shares Non Government Debt Securi es Held-to-maturity securi es Federal Government Securi es Associate (566,126) (275,879) (842,005) 23,094,895 23,094,895 - 40,504 Total 10.2 68,450,985 683,990 7,233,909 76,368,884 99,504,283 (4,524,391) 95,352 (4,429,039) - - - (842,005) (4,429,039) 63,926,594 213,216 6,958,030 71,097,840 113,707,788 1,693,414 4,361,974 119,763,176 (585,542) (279,634) (865,176) (468,706) (22,548) (491,254) 113,239,082 1,085,324 4,082,340 118,406,746 23,094,895 23,094,895 22,026,533 22,026,533 - - 22,026,533 22,026,533 40,504 40,504 94,233,239 141,830,213 Year ended Investment in associate - unlisted shares Taurus Securi es Limited - incorporated in Pakistan Taurus Securi es Limited - incorporated in Pakistan 10.3 Assets Liabili es (491,254) Number of shares 2018 2017 Summary of financial informa on of associate (865,176) Percentage of holding Cost Rupees in '000 30% 30% 40,504 40,504 Net profit / (loss) Total Comprehensive Income 4,050,374 4,050,374 Equity 40,504 140,473,783 Revenue Rupees in '000 1,251,226 Based on the financial statements - December 31, 2017 902,355 348,871 107,974 2018 10.4 Investments by segments Cost/ amor zed cost Provision for diminu on 38,274 67,018 2017 Surplus / (deficit) Carrying value Cost/ amor zed cost Provision for diminu on Surplus / (deficit) Carrying value Rupees in '000 Federal Government Securi es: Market Treasury Bills Pakistan Investment Bonds Ijarah Sukuks Shares: Listed Companies Unlisted Companies Non Government Debt Securi es Listed Unlisted Associate Taurus Securi es Limited Total investments 10.4.1 16,048,382 69,247,466 6,250,032 91,545,880 - (6,721) (4,483,238) (34,432) (4,524,391) 345,996 337,994 683,990 (284,390) (281,736) (566,126) 95,352 95,352 1,738,385 5,495,524 7,233,909 (138,385) (137,494) (275,879) - 40,504 99,504,283 (842,005) (4,429,039) 16,041,661 64,764,228 6,215,600 87,021,489 46,643,343 82,840,681 6,250,297 135,734,321 - (8,210) (508,174) 47,678 (468,706) 46,635,133 82,332,507 6,297,975 135,265,615 156,958 56,258 213,216 1,355,420 337,994 1,693,414 (303,806) (281,737) (585,543) (22,548) (22,548) 1,029,067 56,257 1,085,324 1,600,000 5,358,030 6,958,030 338,305 4,023,669 4,361,974 (138,385) (141,249) (279,634) - 199,921 3,882,420 4,082,341 40,504 40,504 94,233,239 141,830,213 - - (865,176) (491,254) 40,504 140,473,783 With changes in discount rate by State Bank of Pakistan during the year, it has affected the ac vity of investments of the Bank and return thereon during the year. 54 ANNUAL REPORT 2018
  56. The Bank of Khyber NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31 , 2018 10.5 Investments given as collateral 2018 2017 Rupees in '000 Market Treasury Bills Pakistan Investment Bonds 10.6 24,835,551 38,520,452 63,356,003 865,176 861,897 (3,755) (19,416) (23,171) 18,771 (15,492) 3,279 842,005 865,176 These represent the market values of securi es at year end. Provision for diminu on in value of investments Opening balance Charge / reversals Charge for the year Reversals for the year Reversal on disposals Closing balance 10.7 10.7 This includes impairment reversal of Rs. 23.171 million (2017: Rs. 15.492 million) in respect of available-for-sale equity securi es. 10.8 Par culars of provision against debt securi es Category of classifica on 2018 2017 NPI Domes c Other assets especially men oned Substandard Doub ul Loss Total Principal terms of investments in federal government secui es Market Treasury Bills Pakistan Investment Bonds Government of Pakistan Sukuk Provision NPI Rupees in '000 275,879 275,879 Overseas Not past due but impaired Overdue by: Upto 90 days 91 to 180 days 181 to 365 days 365 days 10.9 7,406,373 21,965,384 29,371,757 275,879 275,879 279,634 279,634 - - - - - - - 279,634 279,634 275,879 Maturity 8.74 % to 10.29% 7.00 % to 12.00% 5.24 % to 6.10% 279,634 279,634 - 275,879 Yield / return per annum Provision Redemp on 03-January-2019 to 28-February-2019 On maturity 21-April-2019 to 09-August-2028 On maturity 15-Feb-2019 to 30-Jun-2020 On maturity Coupon At maturity Half yearly Half yearly Federal government securi es other than those offered as collateral, are held by the Bank to meet Statutory Liquidity Requirements (SLR) of the SBP calculated on the basis of me and demand liabili es. 10.9.1 Details of investment in preference shares - unlisted Percentage of holding Name of company Saudi Pak Leasing Company Limited 10.9.2 37% No. of shares 19,500,000 Paid-up value per share 10 Total paid-up value Total cost on December 31, 2018 Rupees in '000 195,000 195,000 This represents 2.5% non-cumula ve, non vo ng and non redeemable preference shares conver ble at any me from the date of issue. The Bank has received these preference shares against the se lement of a debt. 55 ANNUAL REPORT 2018
  57. The Bank of Khyber NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31 , 2018 2018 2017 Cost Rupees in '000 10.9.3 Quality of available for sale securi es Federal government securi es - Government guaranteed Market treasury bills Pakistan investment bonds Ijarah sukuks Non government debt securi es - listed Categorised based on long term ra ng by credit ra ng agency - AA+, AA, AA- A+, A, A- Unrated Non government debt securi es - unlisted Categorised based on long term ra ng by credit ra ng agency - AAA - AA+, AA, AA- A+, A, A- Unrated 16,048,382 46,152,571 6,250,032 68,450,985 46,643,343 60,814,148 6,250,297 113,707,788 1,200,000 400,000 138,385 1,738,385 199,920 138,385 338,305 3,859,286 1,000,000 498,744 137,494 5,495,524 2,745,715 500,000 586,705 191,249 4,023,669 10.9.4 Informa on rela ng to investment in oridinaryshares of listed and unlistedcompanies is disclosed in Annex III to these financial statements. 10.9.5 Par culars rela ng to held to maturity securi es are as follows: Federal Government Securi es - Government guaranteed Pakistan investment bonds 2018 2017 Cost Rupees in '000 23,094,895 22,026,533 10.9.6 The year end market valueof securi es classified as held-to-maturity was amounted to Rs.21,062 million (2017: Rs. 22,422 million). 56 ANNUAL REPORT 2018
  58. 57 Advances - net of provision Loans , cash credits, running finances, etc. Islamic financing and related assets Bills discounted and purchased Advances - gross Provision against advances - Specific - General ADVANCES In local currency In foreign currency 11.1 Par culars of advances (gross) 11 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2018 41,244,598 41,397,898 221,821 82,864,317 24,954 24,954 82,839,363 59,077,654 35,294,489 136,480 94,508,623 35,851 35,851 94,472,772 Performing 2018 2017 4,119,221 4,119,221 539,131 4,278,567 4,278,567 529,689 Non performing 2018 2017 Rupees in '000 4,121,876 4,346,458 313,506 218,827 222,970 242,971 4,658,352 4,808,256 Total 4,278,567 24,954 4,303,521 83,369,052 45,591,056 41,616,725 464,792 87,672,573 2017 99,166,975 99,166,975 87,672,573 87,672,573 2018 2017 Rupees in '000 4,119,221 35,851 4,155,072 95,011,903 63,199,530 35,607,995 359,450 99,166,975 2018 The Bank of Khyber ANNUAL REPORT 2018
  59. The Bank of Khyber NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31 , 2018 11.2 Advances include Rs.4,658.352millions (2017: Rs. 4,808.257 million) which have been placed under nonperforming status as detailed below:2018 2017 Non Non Category of classifica on performing Provision performing Provision loans loans Rupees in '000 Domes c Other assets especially men oned 10,308 19,207 400 Substandard 129,817 4,361 60,908 12,267 Doub ul 239,992 45,855 75,886 7,093 Loss 4,278,235 4,069,005 4,652,256 4,258,807 4,658,352 4,119,221 4,808,257 4,278,567 Overseas Not past due but impaired Overdue by: Upto 90 days 91 to 180 days 181 to 365 days >365 days Total 4,658,352 4,119,221 4,808,257 4,278,567 2018 11.3 Par culars of provision against advances Opening balance Charge for the year Reversals Amounts wri en off Closing balance Specific 2017 General Total 4,278,567 24,954 309,531 10,897 (468,877) (159,346) 10,897 4,119,221 35,851 Specific General Rupees in '000 4,303,521 4,379,722 320,428 438,441 (468,877) (539,596) (148,449) (101,155) 4,155,072 4,278,567 2018 11.4 Par culars of provision against advances Specific 30,872 (5,918) (5,918) 24,954 Total 4,410,594 438,441 (545,514) (107,073) 4,303,521 2017 General Total Specific General Total Rupees in '000 In local currency In foreign currencies 4,119,221 4,119,221 35,851 35,851 58 4,155,072 4,155,072 4,278,567 4,278,567 24,954 24,954 4,303,521 4,303,521 ANNUAL REPORT 2018
  60. The Bank of Khyber NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31 , 2018 11.5 2018 2017 Rupees in '000 PARTICULARS OF WRITE OFFs: Against provisions Directly charged to profit & loss account 11.5.1 Write offs of Rs. 500,000 and above - Domes c - Overseas Write offs of below Rs. 500,000 65 65 - 65 65 - DETAILS OF LOAN WRITE OFF OF Rs. 500,000/- AND ABOVE In terms of sub-sec on (3) of sec on 33A of the Banking Companies Ordinance, 1962, a statement in respect of wri en off loans or financial relief of Rs. 500,000 or above allowed to a person(s) during the year ended December 31, 2018 is given in Annexure 'I'. However, these write-offs do not affect the Bank's right to recover debts from these customers. 11.6 State Bank of Pakistan through various circulars has allowed benefit of the Forced Sales Value (FSV) of plant & machinery under charge, pledged stocks & mortgaged residen al, commercial and industrial proper es (land and building only) held as collateral against Non-Performing Loans (NPLs) for a maximum of five years from the date of classifica on. As at December 31, 2018 the Bank has availed cumula ve benefit of forced sale values of Rs. 285.790 million (2017: Rs. 422.657 million). Increase in unappropriated profit net of tax amoun ng to Rs. 185.764 million (2017: Rs. 274.727 million) is not available for the distribu on of cash or stock dividend to shareholders or bonus to employees. 12 FIXED ASSETS Note Capital work-in-progress Property and equipment 12.1 12.1 12.3 291,647 1,924,775 2,216,422 260,243 1,973,306 2,233,549 284,396 7,251 291,647 220,922 17,519 21,802 260,243 260,243 194,027 (162,623) 291,647 372,434 281,068 (393,259) 260,243 Capital work-in-progress Civil works Equipment Advances to suppliers 12.2 2018 2017 Rupees in '000 Movement in capital work-in-progress Opening balance Transfer in Transfer out Closing balance 59 ANNUAL REPORT 2018
  61. 60 58 ,000 58,000 At December 31, 2018 Cost / Revalued amount Accumulated deprecia on Net book value - 58,000 58,000 Year ended December 31, Opening net book value Addi ons Disposals Deprecia on charge Closing net book value Rate of deprecia on (percentage) 58,000 58,000 Freehold land At January 1, 2018 Cost / Revalued amount Accumulated deprecia on Net book value 12.3 Property and equipment - 891,441 891,441 891,441 891,441 891,441 891,441 Leasehold land NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2018 10.00% 288,567 84,118 204,449 233,110 28,661 204,449 288,567 55,457 233,110 Building on freehold land 10%-20% 251,601 140,145 111,456 119,410 16,413 309 24,058 111,456 238,752 119,342 119,410 Furniture and fixture 2018 10%-33.33% 980,253 655,460 324,793 338,719 110,643 10 124,559 324,793 873,498 534,779 338,719 Rupees '000 Electrical, office and computer equipment 20.00% 25,068 18,289 6,779 5,544 3,393 2,158 6,779 21,681 16,137 5,544 Vehicles 20.00% 790,655 462,906 327,749 327,023 111,168 973 109,469 327,749 691,017 363,994 327,023 Renova on 10.00% 786 678 108 59 80 31 108 706 647 59 Books 3,286,371 1,361,596 1,924,775 1,973,306 241,697 1,292 288,936 1,924,775 3,063,662 1,090,356 1,973,306 Total The Bank of Khyber ANNUAL REPORT 2018
  62. 61 891 ,441 891,441 - 58,000 58,000 - Cost / Revalued amount Accumulated deprecia on Net book value Rate of deprecia on (percentage) 10.00% 288,567 55,457 233,110 62,867 194,603 24,360 233,110 93,964 31,097 62,867 10%-20% 238,752 119,342 119,410 87,907 52,959 256 21,200 119,410 192,097 104,190 87,907 10%-33.33% 873,498 534,779 338,719 288,316 161,875 62 111,410 338,719 718,548 430,232 288,316 Rupees '000 Electrical, office and computer equipment 2017 20.00% 21,681 16,137 5,544 7,087 1,909 1,552 1,900 5,544 25,638 18,551 7,087 Vehicles 20.00% 691,017 363,994 327,023 201,566 204,100 591 78,052 327,023 500,509 298,943 201,566 Renova on 10.00% 706 647 59 38 33 12 59 675 637 38 Books - 3,063,662 1,090,356 1,973,306 1,597,222 615,479 2,461 236,934 1,973,306 2,480,872 883,650 1,597,222 Total S. No 1 2 12.5 Par culars of lands are as follow: Loca on The Mall, Peshawar Can . Peshawar Faysal Town, Lahore Nature Leased hold land Free hold land with muilty story building Area (sq. feets) 20,497 20,398 12.4 The leasehold land of the Bank was last revalued on December 31, 2016 by an independent valuer. The revalua on was carried out on the basis of professional assessment of market value that resulted in surplus shown in note 21. The total revalua on surplus on land aggrega ng to Rs 774.183 million (2017: Rs 774.183 million) has been included in the carrying value of leasehold land. Had the land not been revalued, the total carrying amount of the land as at December 31, 2018 would have been Rs. 117.258 million (2017: Rs 117.258 million). The forced sale value of the leasehold land assessed as Rs. 802.293 million (2017: Rs 802.293 million). At December 31, 2017 891,441 891,441 58,000 58,000 Year ended December 31, Opening net book value Addi ons Disposals Deprecia on charge Closing net book value 891,441 891,441 58,000 58,000 Lease hold Building on Furniture land free hold land and fixture At January 1, 2017 Cost / Revalued amount Accumulated deprecia on Net book value Free hold land NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2018 The Bank of Khyber ANNUAL REPORT 2018
  63. 62 2018 2017 18 ,987 32,687 11,527 3,564 3,889 7 Cost 17,696 30,226 10,554 3,255 3,879 7 Accumulated deprecia on 1,292 2,461 973 309 10 - Building on free hold land Furniture & fixture Office equipment Vehicles Library books Renova on 726 4,420 331 297 97 1 Sale proceeds Rupees in '000 Net book value 12.7 The gross carrying amount (cost) of fully depreciated assets, that are s ll in use are as follows: Renova on Furniture and fixture Office equipment Bi-cycle Descrip on 12.6 Details of disposals of fixed assets NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2018 Auc on Auc on Auc on Auc on Mode of disposal 2018 2017 Rupees in '000 1,964 1,964 62,223 51,593 361,083 192,499 11,455 15,169 626 784 207,156 140,387 (566) 1,959 (642) (12) 87 1 Gain / (loss) on disposal Mr. M. Nadir, Mr. M.Iqbal, Mr. Zeeshan and Mr. M. Shabeer M/S Shahbaz Scrap Dealers, Mr. Zeeshan and Mr. M. Shabeer Par cular of purchasers The Bank of Khyber ANNUAL REPORT 2018
  64. The Bank of Khyber NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31 , 2018 Note 13 INTANGIBLE ASSETS Capital work in progress Intangibles 13.1 13.2 13.1 Movement in capital work-in-progress Opening balance Transfer in Transfer out Write off Closing balance 13.2 INTANGIBLE ASSETS License 2018 2017 Rupees in '000 8,300 71,752 70,551 64,824 78,850 136,576 71,752 22,126 (37,681) (47,897) 57,886 21,610 (7,744) - 8,300 71,752 Computer so ware Total Rupees in 000 At January 1, 2018 Cost Accumulated amor za on and impairment Net book value 58,926 30,675 28,251 90,975 54,402 36,573 149,900 85,077 64,824 Year ended December 31, 2018 Opening net book value Purchases Amor za on charge Closing net book value 28,251 467 15,680 13,038 36,573 47,923 26,983 57,513 64,824 48,390 42,663 70,551 At December 31, 2018 Cost Accumulated amor za on and impairment 59,393 46,355 138,898 81,385 198,291 127,740 Net book value 13,038 57,513 33.33% 70,551 Rate of amor za on (percentage) Useful life-years 3 Remaining amor za on years 1-3 License Computer so ware Total Rupees in 000 At January 1, 2017 Cost Accumulated amor za on and impairment Net book value 27,083 15,334 11,749 63,305 32,041 31,264 90,388 47,375 43,013 Year ended December 31, 2017 Opening net book value Purchases Amor za on charge Closing net book value 11,749 31,843 15,341 28,251 31,264 27,670 22,361 36,573 43,013 59,513 37,702 64,824 At December 31, 2017 Cost Accumulated amor za on and impairment Net book value 58,926 30,675 28,251 90,975 54,402 36,573 33.33% 149,900 85,077 64,824 Rate of amor za on (percentage) 3 Useful life-Years 1-3 Remaining amor za on years 63 ANNUAL REPORT 2018
  65. The Bank of Khyber NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31 , 2018 13.3 Par culars of assets wri en-off 2018 Note Rupees in 000 Against provision 14 2017 - - Directly charged to profit & loss 47,897 - DEFERRED TAX ASSET / (LIABILITY) - NET Deferred tax asset arising in respect of: 47,897 - Provision for balances with other banks Provision for diminu on in value of investments (Reversal) / provision against loans and advances - net Provision for other assets Re-measurement of defined benefit plan Accelerated tax deprecia on Islamic Pool Management reserve Deficit / (surplus) on revalua on of investments Deferred tax liability arising in respect of: (Reversal) / provision against loans and advances - net 14.1 3,510 78,157 3,448 27,586 50,978 49,899 1,550,164 1,763,742 3,510 87,203 22,221 3,448 48,285 793 42,352 171,939 379,751 (6,291) 1,757,451 379,751 14.1 Reconcilia on of deferred tax As At Recognized Recognized January 1, in P&L A/C in OCI 2017 Provision for balances with other banks Provision for diminu on in value of investments Provision for other assets Re-measurement of defined benefit obliga ons Islamic pool management reserve Accelerated tax deprecia on Deficit on revalua on of investments Provision against loans and advances Deferred tax (liability) / asset - net As At Recognized Recognized December in P&L A/C in OCI 31, 2017 Rupees in '000 3,510 - - 3,510 87,203 3,448 - - 31,103 42,937 4,859 (367,832) 43,027 (151,745) (585) (4,066) (20,806) (25,457) 17,182 539,771 556,953 As At December 31, 2018 - - 3,510 87,203 3,448 (9,046) - - 78,157 3,448 48,285 42,352 793 171,939 22,221 379,751 7,547 50,185 (28,512) 20,174 - (20,699) 1,378,225 1,357,526 27,586 49,899 50,978 1,550,164 (6,291) 1,757,451 The management of the Bank believes that it is highly probable that the Bank will be able to achieve the profits and consequently the deferred asset is fully realizable in future. The above asser on is based on financial projec on for five years future taxable profits which is based on key assump ons that primarily include the growth of low cost deposits, growth in high yield customer advances, investment returns, branch expansion plans, poten al provision against advances, interest rates, cost of funds and expected recoveries of classified advances. 15 Note OTHER ASSETS Income/ mark-up accrued in local currency Advances, deposits, advance rent and other prepayments Advance taxa on (payments less provisions) Sta onary and stamps on hand Others Less: Provision held against other assets Total 15.1 64 2018 2017 Rupees in '000 4,386,767 3,978,166 760,898 244,282 670,828 106,574 18,863 10,305 351,733 641,704 6,189,089 4,981,031 (144,426) (143,833) 6,044,663 4,837,198 ANNUAL REPORT 2018
  66. The Bank of Khyber NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31 , 2018 Note 2018 2017 Rupees in '000 15.1 Provision held against other assets Advances for Pre-IPO Others 15.2 Movement in provision held against other assets Opening balance Charge for the year Reversals Closing balance 16 (100,000) (43,833) (143,833) (143,833) 593 (144,426) (163,240) 19,407 (143,833) 895,126 895,126 1,131,241 1,131,241 3,299,000 1,209,271 40,000 4,548,271 2,014,300 296,270 2,310,570 BILLS PAYABLE In Pakistan Outside Pakistan 17 (100,000) (44,426) (144,426) BORROWINGS Secured Borrowings from State Bank of Pakistan (SBP) Under export refinance scheme Due to SBP LTFF Due to SBP-Livestock Dairy 17.1 17.2 Bai Muajjal Borrowing Repurchase agreement borrowings 17.3 17.4 Unsecured Call borrowings 17.5 Total 10,478,171 19,956,313 18,815,672 41,822,703 29,293,843 61,779,016 1,000,000 100,000 34,842,114 64,189,586 17.1 The Bank has entered into agreements for financing with the State Bank of Pakistan for extending export finance to customers. As per the agreements, the Bank has granted to SBP the right to recover the outstanding amount from the Bank at the date of maturity of finance by directly debi ng the current account maintained by the Bank with the SBP. Against these facili es, State Bank of Pakistan charges mark-up of 3.00% (2017: 3.00% ) per annum from the Bank. Currently the Bank earns a spread ranging from 1.00% to 2.00% (2017: 1.00% to 2.00%) per annum. The borrowings are repayable within six months from the deal date. 17.2 These borrowings have been obtained from SBP for providing financing facili es to exporters for adop on of new technologies and moderniza on of their plant and machinery. These borrowings are repayable within a period ranging from 3 years to 10 years. Against these facili es, State Bank of Pakistan charges mark-up ranging from 3.00% to 4.5% (2017: 3.00% to 4.5%) per annum from the Bank. Currently the Bank earns a spread ranging from 1.50% to 3.00% (2017: 1.50% to 3.00%) per annum. 17.3 This represents secured borrowing under Bai Muajjal carring returns ranging from 6.04% to 10.06% (2017: 5.79 % to 5.83%) per annum with maturi es upto February 26, 2019 and are secured by way of government securi es given as collateral as referred in note 10.5. 17.4 Repurchase agreement with financial ins tu on carries interest rate at 10.18% (2017: 5.80% to 6.05%) per annum with maturi es upto January 4, 2019 and are secured by way of investments given as collateral as referred in note 10.5. 17.5 Call borrowing from financial ins tu ons carries interest rate of 9.00 % (2017: 5.60 %) per annum with maturi es up to January 04, 2019. 65 ANNUAL REPORT 2018
  67. The Bank of Khyber NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31 , 2018 2018 2017 Rupees in '000 17.6 Par culars of borrowings with respect to currencies In local currency In foreign currency 18 34,842,114 34,842,114 64,189,586 64,189,586 DEPOSITS AND OTHER ACCOUNTS 2018 In local currency 2017 In foreign currency Total In local currency In foreign currency Total Rupees in '000 Customers Current deposits Saving deposits Term deposits Others Financial Ins tu ons Current deposits Saving deposits 33,724,537 56,316,293 74,575,968 5,595,363 170,212,161 658,829 34,383,366 134,854 56,451,147 74,575,968 5,595,363 793,683 171,005,844 30,680,476 47,551,707 74,987,400 5,378,726 158,598,309 2,689 159,023 161,712 170,373,873 2,689 38,499 159,023 75,507 161,712 114,006 793,683 171,167,556 158,712,315 273,505 30,953,981 261,154 47,812,861 74,987,400 5,378,726 534,659 159,132,968 534,659 38,499 75,507 114,006 159,246,974 2018 2017 Rupees in '000 18.1 Composi on of deposits Individuals Government (Federal / provincial) Public sector en es Banking companies Non-banking financial ins tu ons Private sector 32,873,404 38,355,661 107,132,822 94,996,534 12,926 27,825 36,073 40,547 125,639 73,459 30,986,692 25,752,948 171,167,556 159,246,974 18.2 This includes deposits eligible to be covered under insurance arrangementsamoun ng to Rs 41,516.91 millionas of December 31, 2018. 66 ANNUAL REPORT 2018
  68. The Bank of Khyber NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31 , 2018 19 2018 2017 Rupees in '000 Note OTHER LIABILITIES Mark-up/ return/ interest payable in local currency Mark-up/ return/ interest payable in foreign currency Unearned commission and income on bills discounted Accrued expenses Unclaimed dividends Branch adjustment account Employees benefits payable Deferred income murabaha Islamic pool management reserve Payable against purchase of securi es Share subscrip on money refund Reten on money Mark up in suspense Un-earned bai maujjal sukuk Charity fund Security deposits against ijarah Others 35.1.3 & 35.2.2 19.1 19.2 19.3 2,331,098 3,640,560 69 119,605 65,639 180,357 140,796 29,060 29,433 754,017 232,552 276,373 200,789 117,499 85,889 142,569 132,465 102,086 1,091 1,091 24,903 24,367 22,383 41,419 42,605 9,156 340,901 212,659 136,523 214,114 4,485,603 5,166,464 19.1 This includes equity por on of Profit Equaliza on Reserve amoun ng to Rs. 44.855 million (2017: Rs. 42.671 million), which has been presented as reserve in Annexure-II. 19.2 Share subscrip ons pertaining to disputed cases pending for decisions with Securi es and Exchange Commission of Pakistan. 19.3 This include Rs. 37.427 million (2017: Rs. 60.470 million) net of expenses, received from the Government of Khyber Pakhtunkhwa for mee ng the expenses of Khud Kafalat scheme, Youth Challenge Fund, Long Term Financing facility for industrial development ini ated by the Government. The Bank being agent of the Government is administering the referred schemes and responsible for disbursement and collec on of loans under such schemes. 67 ANNUAL REPORT 2018
  69. The Bank of Khyber NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31 , 2018 20 SHARE CAPITAL 20.1 Authorized capital 2018 2017 Number of shares 1,500,000,000 20.2 2018 2017 Rupees in '000 1,500,000,000 Ordinary shares of Rs. 10 each. 15,000,000 15,000,000 Issued, subscribed and paid up 2018 2017 Number of shares 722,698,448 277,554,037 722,698,448 277,554,037 1,000,252,485 1,000,252,485 2018 2017 Rupees in '000 Ordinary shares of Rs. 10 each Fully paid in cash Issued as fully paid bonus shares 7,226,984 2,775,540 7,226,984 2,775,540 10,002,524 10,002,524 20.3 The Bank hasonly one classof sharesand at repor ngdate,the Government of Khyber Pakhtunkhwaand Ismail Industries Limited held 702,208,233(2017: 702,208,233)and 241,639,031 (2017: 241,639,031) ordinary shares respec vely. Moreover, the Bank has no reserved shares under op ons. 68 ANNUAL REPORT 2018
  70. The Bank of Khyber NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31 , 2018 Note 21 22 (DEFICIT) / SURPLUS ON REVALUATION OF ASSETS (Deficit) / surplus on revalua on of - Available for sale (AFS) securi es - Deferred tax on AFS securi es 10.1 14.1 (4,429,039) 1,550,164 (2,878,875) (491,254) 171,939 (319,315) - Fixed assets 12.4 774,183 (2,104,692) 774,183 454,868 22.1 22.2 15,959,908 14,494,958 13,545,311 6,446,477 29,505,219 20,941,435 CONTINGENCIES AND COMMITMENTS -Guarantees -Commitments 22.1 Guarantees: Financial guarantees Performance guarantees Other guarantees 22.2 3,719,981 3,026,535 11,689,103 10,846,354 550,824 622,069 15,959,908 14,494,958 Commitments: Documentary credits and short-term trade-related transac ons - le ers of credit Commitments in respect of: - forward foreign exchange contracts Commitments for acquisi on of: - opera ng fixed assets - intangible assets 22.3 22.3 10,334,256 4,071,727 3,206,101 2,180,584 4,954 - 194,166 - 13,545,311 6,446,477 1,705,102 1,500,999 3,206,101 1,005,048 1,175,536 2,180,584 Commitments in respect of forward foreign exchange contracts Purchase Sale 22.4 2018 2017 Rupees in '000 The income tax assessments of the Bank have been finalized up to tax year 2018. During financial year 2011, the tax authori es issued an amended order for the tax year 2009 disallowing certain expenditure on account of lack of evidence for such expenditure resul ng in an addi onal tax demand of Rs. 308.900 million. The Bank filed an appeal as well as rec fica on applica on against the said order. Based on rec fica on applica on, the order was amended and accordingly the addi onal demand was reduced to Rs. 256.349 million. During 2012, the Commissioner Inland Revenue (Appeals) [CIR (A)] through an order dated June 01, 2012 has deleted certain addi ons on account of disallowances except for the addi ons under certain heads of expenses having tax impact of approximately Rs. 23 million. The Bank had filed an appeal against the order of the Appellate Tribunal Inland Revenue (ATIR) in respect of remaining addi ons which also decided in favor of the Bank. Subsequently, CIR went in to appeal in Peshawar High Court. The management is confident that ma er will be decided in Bank's favor. 69 ANNUAL REPORT 2018
  71. The Bank of Khyber NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31 , 2018 Note 23 MARK-UP/RETURN/INTEREST EARNED On: a) b) c) d) 24 Loans and advances Investments Balances with banks Lendings to Financial Ins tu ons 26.1 6,698,358 2,877,991 9,576,349 68,123 7,643 32,839 67,231 16,653 5,847 173,715 29,788 5,054 406,893 72,893 9,698 26,108 37,756 11,245 906 141,668 4,772 19,743 13,642 338,431 (1,226,265) (1,226,265) 1,061,172 1,061,172 (1,018,594) (207,671) 852,245 208,927 (1,226,265) 1,061,172 70,753 2,579 (563) 7,289 24,204 104,262 73,738 4,324 1,959 8,010 17,841 105,872 Realised (loss) / gain on: Federal Government Securi es Shares 27 7,644,080 1,903,004 9,547,084 (LOSS)/GAIN ON SECURITIES Realised Unrealised 26.1 3,842,699 10,250,640 61,779 220,264 14,375,382 FEE & COMMISSION INCOME Branch banking customer fees Consumer finance related fees Debit card related fees Credit related fees Investment banking fees Commission on trade Commission on guarantees Commission on cash management Commission on remi ances including home remi ances Others 26 6,868,962 7,439,461 28,471 349,571 14,686,465 MARK-UP/RETURN/INTEREST EXPENSED Deposits Borrowings 25 2018 2017 Rupees in '000 OTHER INCOME Postal, Swi and other services Rent on property Loss / gain on sale fixed assets Service income on Government schemes Rebate from financial ins tu ons 70 ANNUAL REPORT 2018
  72. The Bank of Khyber NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31 , 2018 28 OPERATING EXPENSES Total compensa on expense Note 2018 2017 Rupees in '000 28.1 2,268,930 2,255,857 354,889 123,054 120,119 3,577 138,130 739,768 339,662 109,948 120,650 5,296 102,412 677,968 34,386 31,221 124,559 42,663 11,645 120,653 1,989 367,116 11,353 30,528 111,410 37,702 9,559 90,803 1,955 293,310 10,941 352 34,782 65,837 9,464 541 46,370 55,698 26,247 47,897 27,542 81,482 23,890 63,031 22,078 48,778 34,306 39,803 59 37,916 8,425 11,159 13,164 40,836 37,909 676,433 4,052,247 23,112 29,523 96,414 14,068 52,039 23,663 43,898 32,625 32,495 235 27,393 6,841 11,479 9,655 32,231 547,743 3,774,878 Property expense Rent & taxes U li es cost Security (including guards) Repair & Maintenance Deprecia on Informa on technology expenses So ware maintenance Hardware maintenance Deprecia on Amor za on Network charges ATM charges Others Other opera ng expenses Directors' fees and allowances Fees and allowances to Shariah Board Legal and professional charges Travelling & conveyance Deprecia on Assets wri en off Entertainment Outsourced services cost Postage & courier charges Communica on Brokerage & Commission Sta onery and prin ng Marke ng, adver sement and publicity Cash carriage charges Dona ons Insurance Training & development NIFT clearing charges Auditors remunera on Deposit protec on premium Others 13.3 34.1 28.2 28.3 Total cost for the year included in other opera ng expenses rela ng to outsourced ac vi es is Rs. 81.482 million (2017: Rs. 96.414 million) which pertains to the payment to companies incorporated in Pakistan. Outsourced ac vi es mainly include janitorial services, cash sorters etc. 71 ANNUAL REPORT 2018
  73. The Bank of Khyber NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31 , 2018 Note 28.1 Total compensa on expense Managerial remunera on Fixed Variable - cash bonus / awards etc. Contribu on to defined contribu on plan Charge for defined benefit plan Charge for compensated absences Rent & house maintenance Fuel ceiling en tlement U li es Voluntary separa on scheme Medical Insurance Special duty allowance Conveyance Others Grand total 35.1.7 35.2.3 2018 2017 Rupees in '000 867,417 81,322 114,141 101,062 47,833 344,767 215,862 114,572 114,963 115,418 52,575 20,632 73,072 5,293 2,268,930 821,247 140,608 105,291 95,626 61,143 319,627 201,809 106,142 150,808 107,458 34,783 15,204 65,232 30,880 2,255,857 28.2 No dona on individually exceeding Rs.0.5 millionhas been made during the yearand noneof the directors, execu ves or their spouses had any interest in the donee. 2018 2017 Note Rupees in '000 28.3 Auditors' remunera on Audit fee Fee for other statutory cer fica ons Out-of-pocket expenses 29 31 2,745 5,720 1,190 9,655 25,150 25,150 2,776 2,776 OTHER CHARGES Penal es imposed by State Bank of Pakistan 30 3,019 7,979 2,166 13,164 PROVISIONS & WRITE OFFS - NET Reversal/provisions for diminu on in value of investments Reversal/provisions against loans & advances Loans write offs Reversal/provisions against other assets TAXATION Current Prior years Deferred 72 10.6 11.3 15.2 (23,171) (148,449) 65 593 (170,962) 3,279 (107,073) (19,407) (123,201) 276,392 (15,716) (20,174) 240,502 913,141 66,329 25,457 1,004,927 ANNUAL REPORT 2018
  74. The Bank of Khyber NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31 , 2018 31.1 2018 2017 Rupees in '000 Rela onship between tax expense and accoun ng profit Profit before tax Profit at the applicable rate of 35% (2017: 35%) Prior year tax Others 31.2 706,601 247,310 (15,716) 8,908 240,502 Management of the Bank has provided sufficient tax provision in the financial statements in accordance with Income Tax Ordinance 2001. Following is the comparison of the tax provision as per accounts vis a vis tax assessment for the last three years. Deemed Provision assessement Rupees in 000 897,425 913,141 1,246,757 1,180,880 1,100,112 1,014,620 Tax year 2018 Tax year 2017 Tax year 2016 32 2,795,398 978,389 66,329 (39,791) 1,004,927 BASIC & DILUTED EARNING PER SHARE 2018 Profit for the year - Rupees 2017 466,099,368 Weighted average number of ordinary shares 1,790,470,920 1,000,252,485 1,000,252,485 Basic earnings per share - Rupee/share 0.47 1.79 2018 2017 Rupees in '000 33 CASH AND CASH EQUIVALENTS Cash and balance with treasury banks Balance with other banks 34 12,351,453 3,705,360 16,056,813 STAFF STRENGTH Number Permanent On contractual basis Bank's own staff strength at the end of the year Bank's own average staff strength 34.1 8,916,018 3,257,351 12,173,369 1,373 15 1,388 1,366 1,366 39 1,405 1,322 In addi on to the above, 841 (2017: 841) employees of outsourcing services companies were assigned to the Bank as at the end of the year. No staff was assigned by the Bank to perform ac vi es outside Pakistan. 35 EMPLOYEE BENEFITS 35.1 General descrip on-gratuity fund General descrip on of the type of defined benefit plan and the accoun ng policy for recognizing actuarial gains and losses are disclosed in notes 5.6 & 6.9 to these financial statements. 35.1.1 Number of employees under the scheme The number of employees covered under the scheme are 1245 (2017: 1350). 73 ANNUAL REPORT 2018
  75. The Bank of Khyber NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31 , 2018 35.1.2 Principal actuarial assump ons The actuarial valua on was carried out as at December 31, 2018 using the following significant assump ons: 2018 2017 Note ---------- Per annum ---------Discount rate 13.25% 9.50% Expected rate of return on plan assets 13.25% 9.50% Expected rate of salary increase-long term 11.25% 7.50% Expected rate of salary increase-short term 8.25% 4.50% 35.1.3 Reconcilia on of payable to defined benefit plan 2018 2017 Rupees in '000 (956,956) (845,278) 792,299 714,264 (15,223) (12,203) (179,880) (143,217) Present value of obliga on Fair value of plan assets Payable to outgoing employees 35.1.4 Movement in defined benefit obliga on Obliga ons at the begining of the year Current service cost Interest cost Benefits paid Benefits payable to outgoing employees Re-measurement loss Obliga on at the end of the year 35.1.5 35.1.8 35.1.8 714,264 69,723 (103,899) 143,217 (31,006) 792,299 657,891 54,026 (147,789) 182,648 (32,512) 714,264 (143,217) (101,062) 143,217 (78,818) (179,880) (181,148) (95,626) 182,648 (49,091) (143,217) (95,419) (5,643) (101,062) (88,440) (7,186) (95,626) Movement in payable under defined benefit scheme Opening balance Charge for the year Contribu on by the Bank Re-measurement loss recognised in OCI Closing balance 35.1.7 (839,039) (88,440) (61,212) 147,789 12,203 (16,579) (845,278) Movement in fair value of plan assets Fair value at the beginning of the year Expected return on plan assets Benefits paid by the Fund Contribu on by the Bank Re-measurements Fair value at the end of the year 35.1.6 (857,481) (95,419) (75,366) 103,899 15,223 (47,812) (956,956) 35.1.8 Cost recognised in profit and loss Current service cost Net interest 74 ANNUAL REPORT 2018
  76. The Bank of Khyber NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31 , 2018 35.1.8 Re-measurement recognised in OCI Loss on obliga on Financial assump ons Experience adjustment Due to actual salary increase Due to actual withdrawal Due to other reasons 2018 2017 Rupees in '000 12,550 (9,606) 11,099 9,261 14,902 47,812 (3,550) (3,620) 33,355 16,579 Return on plan assets over interest income 31,006 32,512 Total remeasurement recognized in OCI 78,818 49,091 5,559 728,072 20,261 58,407 812,299 (20,000) 792,299 335 650,300 20,310 63,319 734,264 (20,000) 714,264 35.1.9 Components of plan assets Cash and cash equivalents Investment in term deposit receipts (TDR) Shares Non-Government debt securi es Less: provision against securi es 35.1.10 Sensi vity analysis The sensi vity analysis is based on a change in an assump on while holding all other assump ons constant. In prac ce, this is unlikely to occur, and changes in some of the assump ons may be correlated. When calcula ng the sensi vity of the defined benefit obliga on to significant actuarial assump ons the same method (present value of the defined benefit obliga on calculated with the projected unit credit method at the end of the repor ng period) has been applied, as applied when calcula ng the gratuity liability recognized within the statement of financial posi on. 2018 Present Value of Defined Benefit Obliga on Rupees in '000 972,179 885,860 1,071,939 1,075,467 881,570 973,363 970,379 971,092 972,667 Current liability 1% increase in discount rate 1% decrease in discount rate 1 % increase in expected rate of salary increase 1 % decrease in expected rate of salary increase 10% increase in withdrawal rates 10% decrease in withdrawal rates 1 Year Mortality age set back 1 Year Mortality age set forward 35.1.11 Expected contribu on to be paid to the Fund in the next financial year 179,880 35.1.12 Expected charge for the next financial year 123,496 75 ANNUAL REPORT 2018
  77. The Bank of Khyber NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31 , 2018 35.1.13 Maturity profile 2018 Par culars Undiscounted Payments Rupees in '000 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 to 10 Year 11 and above 81,567 47,630 59,627 49,757 102,980 660,035 4,961,231 35.1.14 Funding policy Contribu ons to the Fund are made on the basis of actuarial recommenda on. 35.1.15 Significant risk associated Asset vola lity Changes in TDR yields Infla on risk Life expectancy / Withdrawal rate 35.2 0.50% 3.50% 6.17% 10.00% COMPENSATED ABSCENCES General descrip on Employees can either avail encashment of un-availed leaves or leave preparatory to re rement (LPR), subject to the approval of the Bank's management. Employees are en tled to 30 days privilege leave in a calender year a er comple on of one year of service that can be accumulated upto 180 days. Note 35.2.1 Present value of benefit obliga on 35.2.2 Movement in net liability recognized Opening liability Expense for the year Benefits paid Closing liability 35.2.3 35.2.4 35.2.3 Cost charged to profit & loss Current & past service cost Interest Actuarial loss Nega ve past servise cost-due to changes in rules 57,572 47,833 (8,912) 96,493 61,143 (3,571) 57,572 8,304 598 48,491 (9,560) 47,833 61,143 61,143 Per annum Principal actuarial assump ons Valua on discount rate Valua on discount rate-profit & loss Salary increase rate-short term Salary increase rate-long term Dura on-weighted average 35.3 2018 2017 Rupees in '000 96,493 57,572 13.25% 11.25% 8.25% 11.25% 9.93 years 11.25% 0.00% 6.50% 6.50% 11 years DEFINED CONTRIBUTION PLAN - EMPLOYEES' PROVIDENT FUND General descrip on of the Fund is disclosed in note 6.9.2 to these financial statememets. The number of employees covered under the scheme are 1373 (2017: 1366). During the year the Bank has contributed Rs. 114.140 million (2017: Rs. 105.290 million) to the fund. 76 ANNUAL REPORT 2018
  78. 77 Number of persons - - 1 - - - 82 457 - 375 - Chairman Fees and allowances etc . Managerial remunera on Fixed Variable - cash bonus / awards etc. Charge for defined benefit plan Contribu on to defined contribu on plan Rent & house maintenance U li es Medical Addi onal allowances Contractual allowances Conveyance Others Total Descrip on 2018 6 2,754 1,102 10,484 - 6,628 - Rupees in 000 3 756 252 252 873 12 5,648 252 352 2,657 242 Execu ve Members (other than Non-execu ve shariah board CEO) Directors COMPENSATION OF DIRECTORS AND KEY MANAGEMENT PERSONNEL 36.1 Total compensa on expense 36 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2018 3 2,435 827 789 3,323 1,278 162 24,156 781 6,113 7,630 818 Managing director 13 14,279 4,668 4,668 5,720 1,020 12,821 113 89,715 3,783 32,478 5,305 4,860 1 640 213 213 873 12 3,991 213 1,423 199 205 Other Key management material risk personnel takers/ controllers 72 53,100 17,700 17,700 2,259 53,958 8,250 316,572 17,700 118,001 10,940 16,964 Execu ves The Bank of Khyber ANNUAL REPORT 2018
  79. 78 Number of persons Rent & house maintenance U li es Medical Addi onal allowances Contractual allowances Conveyance Others Total 1 219 406 - 187 - Chairman Fees and allowances etc. Managerial remunera on Fixed Variable - cash bonus / awards etc. Charge for defined benefit plan Contribu on to defined contribu on plan Descrip on - - 7 2,249 656 9,058 - 1 675 225 225 873 11 4,716 225 2017 Directors Execu ves Members (other than Non-Execu ves shariah board CEO) Rupees in 000 6,153 541 1,499 237 205 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2018 1 1,471 640 265 1,005 1,505 23,213 190 10,269 7,868 - Managing director 12 11,716 3,869 3,869 4,821 1,692 12,100 265 76,389 3,606 28,110 2,708 3,633 Key management personnel 1 598 199 199 873 12 3,807 199 1,330 216 181 Other material risk takers/ controllers 61 42,635 14,162 14,162 1,824 978 48,297 6,585 264,571 14,162 95,755 13,127 12,884 Execu ves The Bank of Khyber ANNUAL REPORT 2018
  80. 79 1 2 3 4 5 6 7 8 Sr . No. 1 2 3 4 5 6 7 Sr. No. Mr. Shehzad Khan Bangash (Chairman) Mr. Ali Raza Bhu a Mr. Maqsood Ismail Ahmad Mr. Asad Muhammad Iqbal Mr. Javed Akhtar Mr. Rashid Ali Khan Mr. Shakeel Qadir Khan Mr. Shehyar Ahmed Total amount paid Name Mr. Shehzad Khan Bangash (Chairman) Mr. Shakeel Qadir Khan Mr. Javed Akhtar Mr. Shehyar Ahmed Mr. Rashid Ali Khan Mr. Asad Muhammad Iqbal Mr. Maqsood Ismail Ahmad Total amount paid Name 187 187 375 312 375 375 250 63 2,125 For board mee ngs 375 375 375 375 250 375 375 2,500 For board mee ngs 125 250 278 222 188 1,063 Audit commi ee 2017 438 375 438 188 438 1,877 Audit commi ee 2018 36.2 Remunera on paid to directors for par cipa on in board and commi ee mee ngs NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2018 94 406 229 125 854 IT steering commi ee Rupees. in '000 437 437 563 1,437 HR&RC commi ee 375 1,000 1,063 1,188 939 1,500 938 7,003 306 556 862 187 406 1,118 1,405 653 1,945 563 63 6,340 Total amount Risk paid management commi ee 62 313 187 188 124 313 1,187 Total amount Risk paid management commi ee Mee ng Fees and Allowances Paid For Board Commi ees 125 125 125 313 688 IT Steering commi ee Rupees. in '000 63 188 250 250 751 HR&RC commi ee Mee ng Fees and Allowances Paid For Board Commi ees The Bank of Khyber ANNUAL REPORT 2018
  81. 37 .1 37 36.3 50 525 119 694 2 Chairman 2,639 1,679 4,318 1 Resident member 2018 125 58 183 1 Chairman Rupees. in '000 150 452 33 635 3 Non-resident members 2,438 1,499 237 4,174 1 Resident member 2017 325 33 358 2 Non-resident members 80 Fair value measurements using quoted prices (unadjusted) in ac ve markets for iden cal assets or liabili es. 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). Level 1: Level 2: The Bank measures fair values using the following fair value hierarchy that reflects the significance of the inputs used in making the measurements: Fair value of financial assets In the opinion of the management, the fair value of the remaining financial assets and liabili es are not significantly different from their carrying values since assets and liabili es are either short-term in nature or in the case of customer loans and deposits, are frequently re-priced. The maturity and re-pricing profile and effec ve rates are stated in notes 42.4.1 and 42.2.5 respec vely. The fair value of quoted investments other than those classified as held to maturity is based on quoted market prices. The fair value of unquoted equity investments is determined on the basis of break-up value of these investments as per their latest available audited financial statements. The fair value of fixed term loans, other assets, other liabili es and fixed term deposits cannot be calculated with sufficient reliability due to the absence of current and ac ve market for these assets and liabili es and reliable data regarding market rates for similar instruments. The provision for impairment of loans and advances has been calculated in accordance with the Bank's accoun ng policy as stated in note 6.5. FAIR VALUE MEASUREMENTS a. Mee ng fees and allowances b. Monthly remunera on c. Bonus d. Travelling and accommoda on Total amount Total number of persons Descrip on Remunera on paid to shariah board members NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2018 The Bank of Khyber ANNUAL REPORT 2018
  82. The Bank of Khyber NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31 , 2018 37.2 The table below analyses the financial and non-financial assets carried at fair values, by valua on methods. For financial assets, the Bank essen ally carries its investments in debt and equity securi es at fair values. Valua on of investments is carried out as per guidelines specified by the SBP. In case of non-financial assets, the Bank has adopted revalua on model (as per IAS 16) in respect of leasehold land. Level 1 On balance sheet financial instruments Financial assets - measured at fair value Investments Federal Government Securi es Shares Term Finance Cer ficates 2018 Level 2 Level 3 Rupees in '000 Total 156,958 - 63,926,594 1,600,000 -- 63,926,594 156,958 1,600,000 Financial assets - disclosed but not measured at fair value Investments Federal Government Securi es Shares Non-Government Debt Securi es Assciates - 23,094,895 56,258 5,358,030 40,504 - 23,094,895 56,258 5,358,030 40,504 Off-balance sheet financial instruments - measured at fair value Forward purchase of foreign exchange Forward sale of foreign exchange - 1,705,102 1,500,999 - 1,705,102 1,500,999 Level 1 On balance sheet financial instruments 2017 Level 2 Level 3 Rupees in '000 Total Financial assets measured at fair value Available-for-sale securi es - Federal Government Securi es - Shares in listed companies - Term Finance Cer ficates (TFCs) 1,029,067 - 113,239,082 199,921 - 113,239,082 1,029,067 199,921 Financial assets - disclosed but not measured at fair value Investments Federal Government Securi es Shares Non-Government Debt Securi es Assciates - 22,026,533 56,257 3,882,420 40,504 - 22,026,533 56,257 3,882,420 40,504 Off-balance sheet financial instruments - measured at fair value Forward purchase of foreign exchange Forward sale of foreign exchange - 1,005,048 1,175,536 - 1,005,048 1,175,536 The valua on techniques used for above assets are same as disclosed in note 6.3 & 6.4 of these financial statements. The Bank's policy is to recognize transfers into and out of the different fair value hierarchy levels at the date the event or change in circumstances that caused the transfer occurred. There were no transfers between levels 1 and 2 during the year. Leased hold land is carried at revalued amount as determined by professional valuer, based on their assessment of market value and has been classified under level-3 as the effect of changes in the unobservable inputs used in the valua on cannot be determined with certainity. 81 ANNUAL REPORT 2018
  83. The Bank of Khyber NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31 , 2018 (a) Financial instruments in level 1 Financial instruments included in level 1 comprise of investments in listed ordinary shares. (b) Financial instruments in level 2 Financial instruments included in level 2 comprise of Sukuks Bonds, Pakistan Investment Bonds, Market Treasury Bills, Term Finance cer ficates, FX op ons and Forward Exchange Contracts. Financial instruments in level 3 Currently, no financial instruments are classified in level 3. (c) Valua on techniques and inputs used in determina on of fair values within level 1 Fully paid-up ordinary shares Fair values of investments in listed equity securi es are valued on the basis of closing quoted market prices available at the Pakistan Stock Exchange. Valua on techniques and inputs used in determina on of fair values within level 1 Pakistan Investment Bonds / Market Treasury Bills Fair values of Pakistan Investment Bonds and Treasury Bills are derived using the PKRV rates (Reuters page). Government of Pakistan (GoP) - Ijarah Sukuks Fair values of GoP Ijarah Sukuks are derived using the PKISRV rates announced by the Financial Market Associa on (FMA) through Reuters. These rates denote an average of quotes received from eight different pre-defined / approved dealers / brokers. Term Finance, Bonds and Sukuk cer ficates Investments in debt securi es (comprising term finance cer ficates, bonds, Sukuk cer ficates and any other security issued by a company or a body corporate for the purpose of raising funds in the form of redeemable capital) are valued on the basis of the rates announced by the Mutual Funds Associa on of Pakistan (MUFAP) in accordance with the methodology prescribed by the Securi es and Exchange Commission of Pakistan. In the determina on of the rates, the MUFAP takes into account the holding pa ern of these securi es and categorises these as traded, thinly traded and non-traded securi es. Valua on techniques and inputs used in determina on of fair values within level 3 Opera ng fixed assets (Leasehold land) Leasehold land are revalued on regular basis using professional valuers on the panel of Pakistan Banker's Associa on. The valua on is based on their assessment of market value of the proper es. 82 ANNUAL REPORT 2018
  84. The Bank of Khyber NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31 , 2018 38 SEGMENT INFORMATION 38.1 Segment details with respect to business ac vi es Corporate Finance Trading & Sales 2018 Retail Commercial Banking Banking Rupees in 000 Profit & loss Net mark-up/return/profit 3,287,594 Non mark-up / return / interest income 353,550 Total income 3,641,144 327,439 (1,012,370) (684,931) 216,370 24,283 240,654 1,307,978 108,192 1,416,170 Segment direct expenses Total expenses Provisions Profit before tax 715,405 715,405 (98,715) (1,301,621) 75,981 75,981 43,149 121,524 760,625 760,625 (100,460) 756,005 2,525,386 2,525,386 (14,936) 1,130,694 Balance sheet Cash & bank balances 9,051,401 Lendings to financial ins tu ons Investments 90,491,491 Advances - performing 54,109,118 Opera ng fixed assets/intangible assets Deferred tax assets 1,640,876 Others 3,168,513 Total assets 158,461,399 Bills payable Borrowings Deposits & other accounts Others Total liabili es Equity Total equity & liabili es Con ngencies & commitments 688,021 6,298,606 7,695,642 1,518,261 1,977,368 4,253,967 (3,184) 3,448 89,272 220,290 11,965,380 10,776,311 895,126 30,293,843 128,375,667 6,846,702 1,711,676 3,364,202 179,424 44,856 131,739,869 37,319,969 2,651,658 26,721,530 (25,354,590) 8,124,654 158,461,399 11,965,379 10,776,312 18,769,612 83 3,206,101 2,646,165 Total 5,139,381 (526,345) 4,613,036 4,077,397 4,077,397 (170,962) 706,601 18,785 16,056,813 7,695,642 2,223,487 94,233,239 34,671,450 95,011,903 2,295,272 2,295,272 116,311 1,757,451 2,566,587 6,044,663 41,891,892 223,094,983 895,126 4,548,271 34,842,114 34,233,511 171,167,556 897,120 4,485,603 39,678,902 211,390,399 2,212,990 11,704,584 41,891,892 223,094,983 4,883,341 29,505,219 ANNUAL REPORT 2018
  85. The Bank of Khyber NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31 , 2018 Corporate Finance Profit & loss Net mark-up/return/profit Trading & Sales 2017 Retail Commercial Banking Banking Rupees in 000 Total 3,733,047 196,463 80,911 788,612 4,799,033 335,685 1,218,519 15,709 80,907 1,650,819 4,068,732 2,026,169 2,026,169 (95,104) 2,137,666 1,414,982 1,124,827 1,124,827 (64,845) 355,000 96,620 48,380 48,380 48,240 869,518 578,278 578,278 36,748 254,492 6,449,852 3,777,654 3,777,654 (123,201) 2,795,398 Balance sheet Cash & bank balances 6,171,976 Investments 128,967,640 Lendings to financial ins tu ons Net advances 50,964,636 Opera ng fixed assets/intangible assets Deferred tax assets 338,718 Others 2,799,074 Total assets 189,242,044 670,506 1,367,378 1,529,106 2,375,848 7,226 110,805 6,060,869 5,298,662 3,344,421 6,522 169,846 8,819,451 32,225 12,173,369 10,138,765 140,473,783 1,529,106 26,684,147 83,369,052 2,370,125 2,370,125 27,286 379,751 1,757,473 4,837,198 41,010,021 245,132,384 - 61,879,016 119,435,231 6,369,879 3,874,848 206,659 123,310,079 68,455,554 65,931,965 (62,394,685) 189,242,044 6,060,869 1,131,241 1,592,470 51,665 2,775,375 6,044,075 8,819,451 1,131,241 2,310,570 64,189,586 31,849,395 159,246,974 1,033,293 5,166,464 35,193,258 229,734,265 5,816,763 15,398,119 41,010,021 245,132,384 Non mark-up / return / interest income Total Income Segment direct expenses Total expenses Provisions Profit before tax Bills payable Borrowings Deposits & other accounts Others Total liabili es Equity Total equity & liabili es Con ngencies & commitments 15,617,554 2,180,584 84 27,000 3,116,297 20,941,435 ANNUAL REPORT 2018
  86. The Bank of Khyber NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31 , 2018 38.2 Segment details with respect to geographical loca ons Geographical segment analysis Corporate Finance Profit before tax In Pakistan Outside Pakistan Total assets In Pakistan Outside Pakistan Trading & Sales 1,130,694 1,130,694 158,461,399 158,461,399 (1,301,621) (1,301,621) 121,524 121,524 11,965,380 10,776,311 11,965,380 10,776,311 756,005 756,005 Total 706,601 706,601 41,891,892 223,094,983 41,891,892 223,094,983 Net assets employed In Pakistan Outside Pakistan Total equity & liabili es 26,721,530 (25,354,590) 26,721,530 (25,354,590) 8,124,654 8,124,654 2,212,990 2,212,990 11,704,584 11,704,584 Con ngencies & commitments 18,769,612 2,646,165 4,883,341 29,505,219 Corporate Finance Profit before tax In Pakistan Outside Pakistan Total Income Total assets In Pakistan Outside Pakistan Net assets employed In Pakistan Outside Pakistan Con ngencies & commitments 39 2018 Retail Commercial Banking Banking Rupees in 000 3,206,101 Trading & Sales 2017 Retail Commercial Banking Banking Rupees in 000 254,493 254,493 Total 2,137,666 2,137,666 355,000 355,000 48,240 48,240 2,795,398 2,795,398 189,242,044 189,242,044 6,060,869 6,060,869 8,819,451 8,819,451 65,931,965 65,931,965 (62,394,685) (62,394,685) 6,044,075 6,044,075 5,816,764 5,816,764 15,398,119 15,398,119 15,617,554 2,180,584 27,000 3,116,297 20,941,435 41,010,021 245,132,384 41,010,021 245,132,384 TRUST ACTIVITIES The Bank is not engaged in any significant trust ac vi es. 85 ANNUAL REPORT 2018
  87. 40 - Advances Opening balance Addi on during the year Repaid during the year Closing balance Provision held Deposits and other accounts Opening balance Received during the year Withdrawn during the year Closing balance Other liabili es Accrued markup Directors 86 1 ,119,447 26,773 330,924 313,882 43,815 - 260,785 73,501 57,832 276,454 842,314 21,546 38,136 29,731 29,951 - - 2018 Key management Associate personnel 1,524,050 1,960,438 1,079,463 860,523 2,179,378 - - - - - - Directors Rupees in '000 Employee Funds 579,089 43,360 376,771 393,361 26,770 - 193,406 128,731 61,352 260,785 381,300 21,677 32,172 32,303 21,546 - - 2017 Key management Associate personnel 2,452,610 1,774,025 3,013,743 2,827,330 1,960,438 - - Employee Funds The Bank has related party rela onship with its majority shareholders (Government of Khyber Pakhtunkhwa and Ismail Industries Limited), associates, directors, key management personnel, staff re rement benefit plan and other related par es. Banking transac ons with related par es are carried out in the normal course of business at agreed terms. Contribu on to and accruals in respect of staff re rement benefit plan are made in accordance with actuarial valua ons. Remunera on to the execu ves, disclosed in note 36 to these financial statements are determined in accordance with terms of their appointments. Details of transacitons with related par es during the year, other than those which have been disclosed elsewhere in these financial statements are as follows: RELATED PARTY TRANSACTIONS NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2018 The Bank of Khyber ANNUAL REPORT 2018
  88. 40 .1 - 1,281 1,598 410,279 35,096 - Associate 7,244 Key management personnel - Directors 2018 Directors - 134,641 - 32,677 - - Rupees in '000 Employee Funds 344,768 1,135 7,543 Key management personnel - 726 - Associate 2017 - 107,667 - Employee Funds Government of Khyber Pakhtunkhwa (GoKP) holds 70.20% shareholding in the Bank and therefore en es which are owned and / or controlled by the GoKP, or where the GoKP may exercise significant influence, are also related par es of the Bank. The Bank in the ordinary course of its business enters into transac on with various departments of the GoKP and its related en es However, it is imprac cable to disclose these transac ons. Such transac ons include deposits from and provision of other banking services to such departments and en es. Operaing expenses Income Mark-up / return / interest earned Expense Mark-up / return / interest paid NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2018 The Bank of Khyber 87 ANNUAL REPORT 2018
  89. The Bank of Khyber NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31 , 2018 41 CAPITAL ADEQUACY, LEVERAGE RATIO & LIQUIDITY REQUIREMENTS Minimum Capital Requirement (MCR): Paid-up capital (net of losses) Capital Adequacy Ra o (CAR): Eligible common equity er 1 (CET 1) capital Eligible addi onal er 1 (ADT 1) capital Total eligible er 1 capital Eligible er 2 capital Total eligible capital (Tier 1 + Tier 2) 2018 2017 Rupees in '000 10,002,524 10,002,524 9,587,071 14,806,674 9,587,071 14,806,674 35,851 394,662 9,622,922 15,201,336 Risk weighted assets (RWAs): Credit risk Market risk Opera onal risk Total 55,368,559 45,912,499 12,766,137 20,494,848 10,259,721 9,585,425 78,394,417 75,992,772 Common equity er 1 capital adequacy ra o Tier 1 capital adequacy ra o Total capital adequacy ra o 12.23% 12.23% 12.28% 19.48% 19.48% 20.00% 6.00% 1.50% 7.50% 10.00% 1.90% 11.90% 6.00% 1.50% 7.50% 10.00% 1.28% 11.28% Na onal minimum capital requirments prescribed by SBP. CET1 minimum ra o ADT-1 minimum ra o Tier 1 minimum ra o Total capital minimum ra o Capital conservaton buffer (CCB- consis ng of CET1 only) Total capital plus CCB Leverage Ra o (LR): Eligible er-1 capital Total exposures Leverage ra o 9,587,071 14,806,674 263,853,741 253,660,000 3.63% 5.84% Liquidity Coverage Ra o (LCR): Total high quality liquid assets Total net cash ou low Liquidity coverage ra o 60,817,347 102,173,000 55,418,370 52,212,000 109.74% 195.69% Net Stable Funding Ra o (NSFR): Total available stable funding Total required stable funding Net stable funding ra o 116,343,436 90,965,000 97,573,326 80,750,000 119.24% 112.65% 41.1 The full disclsoures on the CAPITAL ADEQUACY, LEVERAGE RATIO & LIQUIDITY REQUIREMENTS as per SBP instruc ons issued from me to me is also placedon Bank's website. Please follow the link h ps://www.bok.com.pk/downloads for detailed disclosures. 88 ANNUAL REPORT 2018
  90. The Bank of Khyber NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31 , 2018 42 RISK MANAGEMENT Banks are in business of taking risk in order to earn acceptable required return. Risk management in Bank of Khyber is performed at each level of authority and is managed through an ongoing process of iden fica on, measurement and monitoring subject to risk limits and other controls. The Bank is exposed to credit, market, opera onal and liquidity risks. For mi ga on of these risks, RMD is equipped with dedicated resources having exper se in various areas of risk. Credit Risk management department is responsible to assess credit risk present in a loan proposal and makes its recommenda ons for rec fica on/management of various credit risk in a loan proposal. Market & Liquidity Risk Management (MRMD) is responsible for policy formula on, procedures development, controlling of market and liquidity related various risks including monitoring of exposures against limits and assessment of risks in new businesses. MRMD ensure that the bank’s posi on in Money Market, Foreign exchange, and Capital Market transac ons remain within the assigned internal and regulatory limits. Market and liquidity Early Warning Indicators (EWI) and Por olio-wise Management Ac on Triggers (MAT) are duly reported to the management. Similarly Opera onal risk management assess the impact of risk of loss due to an event or ac on causing failure of technology, process infrastructure, personnel and other external events. Their impact is assessed through Risk Control Self Assessment (RCSAs), Key risk indicators (KRIs) and loss data base. Owing to growing importance of regulatory repor ng, a Basel II and Regulatory repor ng department has also been established to keep the Bank in line with various regulatory requirements. The Bank is fully aware that risk management could not be solely performed by a dedicated centralized department but instead to have an effec ve risk management framework, Front line staff of the Bank, senior management and Board oversight is needed to aid in Implementa on of the framework. The Bank has a dedicated Management Risk Management Commi ee (MRMC) and Board Risk Management Commi ee (BRMC). BRMC is also responsible to review the extent of design and adequacy of risk management framework. The Bank also has a management level Risk Management Commi ee which is responsible for the smooth implementa on of risk management framework within the en re Bank. 89 ANNUAL REPORT 2018
  91. 42 .1 90 The Bank has dedicated Customer Risk Ra ng (CRR) and Facility Risk Ra ng (FRR) Models for various customer types. The models aim to measure credit risk posed by a counter party as well facility it has applied for by assesseing various qualita ve and quan tave a ributes keeping in view best industry prac ces in the field of credit risk management. Each risk ra ng model covers a dedicated procedural guidelines for its consistent implementa on within the Bank. The Bank has also approved a dedicated risk ra ng policy providing broad policy guidelines for minimum acceptable risk for various borrowers of the Bank. Credit risk management is governed by the Board Risk Management Commi ee and other instruc ons and guidelines outline by SBP. The Bank a empts to control risk by monitoring credit exposure, limi ng non performing counter par es and con nually assessing the credit worthiness of the borrowers. The Bank manages limits and controls concentra ons of credit risk to individual counter par es and groups and to industries, where applicable. The Bank has adopted standardized approach to measure credit risk regulatory capital charge in compliance with Basel-II requirements. The approach relies upon the assessment of external credit ra ng agencies. The Bank is in the process of con nuously improving the system and bringing it in line with the Basel framework requirements. The main objec ve of the credit risk management process is to iden fy, assess, measure and monitor credit risk in all the financial exposure of the Bank. The Bank has established a credit risk management framework to manage credit risk on rela onship as well as at por olio level. Credit risk is the poten al that the counter party will cause a financial loss to the Bank due to its inability or unwillingness to meet its contractual obliga ons. The Bank is exposed to credit risk through its lending and investment ac vi es as well as from con ngent liabili es. Credit risk NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2018 The Bank of Khyber ANNUAL REPORT 2018
  92. 91 Credit risk by public / private sector Public/ Government Private Tex le Power (electricity), Gas, Water, Sanitary Financial Others Credit risk by industry sector 42.1.2 Investment in debt securi es Note 10 7,934,586 7,934,586 Public/ Government Private 92,270,376 7,233,909 99,504,285 44,658 3,935,114 2,815,384 438,753 7,233,909 2018 2017 137,468,239 4,361,974 141,830,213 48,413 301,169 915,304 3,097,088 4,361,974 Gross investments 1,768,050 1,768,050 Gross lendings 2018 2017 Credit risk by public/private sector 42.1.1 Lendings to financial ins tu ons NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 201 275,879 275,879 2018 Rupees in '000 44,658 40,384 190,837 275,879 279,634 279,634 48,413 40,384 190,837 279,634 2017 Non-performing investments Non-performing lendings 2018 2017 Rupees in '000 238,944 238,944 238,944 238,944 275,879 275,879 44,658 40,384 190,837 275,879 2018 Provision held 238,944 238,944 279,634 279,634 48,413 40,384 190,837 279,634 2017 238,944 238,944 Provision held 2018 2017 The Bank of Khyber ANNUAL REPORT 2018
  93. Agriculture , Forestry, Hun ng and Fishing Mining and Quarrying Tex le Chemical and Pharmaceu cals Petro Chemical Auto Loans Cement Sugar Engineering Footwear and Leather garments CNG/Gas Sta ons Automobile and transporta on equipment Trade Construc on Communica on Ghee & Cooking oil Food & Bevarages Power (electricity), Gas, Water, Sanitary Financial Services Metal Products Individuals/Personal Misc. Manufacturing Commodity Others Credit risk by industry sector 42.1.3 Advances NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 201 3,196,828 56,721 12,881,465 1,648,067 1,093,009 606,165 3,432,792 2,837,309 929 110,122 105,922 1,038,841 3,424,008 1,464,834 76,427 645,649 2,040,157 635,268 687,043 1,895,581 3,242,617 2,707,039 4,193,956 49,195,650 1,950,576 99,166,975 2018 2,867,993 8,610,134 625,901 647,294 736,305 3,842,570 103,231 637,031 3,386,351 2,684,724 655,233 505,627 19,566,051 549,095 2,707,458 2,073,913 5,151,353 30,000,000 2,322,309 87,672,573 2017 Gross advances 2017 Rupees in '000 229,298 309,464 555,590 555,510 125,199 125,199 22,627 3,302 2,647 657,699 929 106,704 106,704 30,797 292,989 206,291 348,555 392,169 192,271 195,732 67,191 43,169 43,169 590,348 565,351 17,840 160,216 160,215 111,467 124,252 24,583 53,889 50,397 823,485 1,642,967 197,557 330,837 4,658,352 4,808,257 2018 Non-performing advances 215,514 555,590 125,199 3,000 2,350 2,647 650,476 929 106,704 27,549 198,600 264,029 190,585 67,191 43,169 538,852 14,925 160,216 32,830 24,583 48,773 683,138 162,372 4,119,221 2018 293,525 552,410 125,199 106,704 206,291 317,948 189,429 43,169 528,852 160,215 39,027 45,397 1,421,835 248,566 4,278,567 2017 Provision held The Bank of Khyber 92 ANNUAL REPORT 2018
  94. 93 Public / Government Private Credit risk by public / private sector Agriculture, Forestry, Hun ng and Fishing Engineering Petrochemicals Health Tex le Informa on Technology Cement Automobile and transporta on equipment CNG & Filling Sta ons Construc on Power (electricity), Gas, Water, Sanitary Ghee & cooking Oil Trading & sales Services Other Private Sectors Government Others 42.1.4 Con ngencies and commitments Credit risk by industry sector Public/ Government Private Credit risk by public / private sector NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 201 9 Note 49,595,309 49,571,666 99,166,975 2018 49,271,538 38,401,035 87,672,573 2017 Gross advances 4,658,352 4,658,352 4,808,257 4,808,257 2018 2017 Rupees in '000 Non-performing advances Rupees '000 1,201,156 28,299,109 29,500,265 253,791 644,406 1,896,044 1,095,055 261,859 43,790 122,810 695,911 598,889 5,395,545 1,899,999 97,328 3,426,192 216,016 4,485,894 1,201,156 7,165,580 29,500,265 2018 4,119,221 4,119,221 2018 92,109 20,655,160 20,747,269 68,069 875,015 446,976 811,805 745,447 30,956 318,944 618,151 588,499 5,589,783 181,026 2,282,742 29,700 3,527,345 92,109 4,540,702 20,747,269 2017 4,278,567 4,278,567 2017 Provision held The Bank of Khyber ANNUAL REPORT 2018
  95. 94 Punjab Sindh KPK including FATA Balochistan Islamabad AJK including Gilgit-Bal stan Total Province /Region 60,496,281 23,488,468 41,330,829 74,170 55,462,122 283,267 181,135,137 Disbursements 42.1.6 Advances - Province/Region-wise disbursement & u liza on OAEM Substandard Doub ul Loss Total Total funded classified therein 59,611,690 950,000 562,160 1,050,000 62,173,850 Punjab 884,590 22,538,468 177,640 23,600,698 Sindh - Rupees in '000 21,801,638 1,750,000 23,551,638 KPK including FATA Amount 74,170 74,170 Balochistan - 283,267 283,267 AJK including Gilgit-Bal stan - Provision held 2017 18,967,031 52,484,482 71,451,513 Islamabad Rupees in 000 - Provision held 2018 2018 U liza on Amount The sanc oned limits against these top 10 expsoures aggregated to Rs 62,971 million (2017: Rs 58,054 million). Funded Non funded Total exposure 2018 2017 Rupees in '000 54,203,217 54,799,792 5,838,126 1,631,552 60,041,343 56,431,344 42.1.5 Concentra on of advances The bank top 10 exposures on the basis of total (funded and non-funded expsoures) aggregated to Rs 60,041 million (2017: 56,431 million) are as following: NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 201 The Bank of Khyber ANNUAL REPORT 2018
  96. 42 .2 46,773,216 8,658,139 20,368,865 54,582 43,656,410 191,371 119,702,583 Disbursements 46,429,107 1,050,000 562,160 50,000 48,091,267 Punjab 344,109 7,608,139 177,640 8,129,888 Sindh Rupees in '000 19,761,478 1,844,717 21,606,194 KPK including FATA 54,582 54,582 Balochistan 2017 U liza on 45,227 41,584,053 41,629,280 Islamabad 191,371 191,371 AJK including Gilgit-Bal stan 95 The Bank seeks to mi gate market risk by employing strategies that correlate price, rate and spread movements of its earning assets, liabili es and trading ac vi es. Various broad limits are set and recommended by ALCO to BRMC approval for proper management of Market risk. MRMD has developed a dedicated Financial Ins tu ons (FIs) model for inter-bank lines se ng to different financial ins tu ons. The intra-day posi ons are managed by treasury division through Management Ac on Trigger (MAT) / Dealers limits. Stress tes ng is carried out for both Banking and trading books as per SBP guidelines. The Bank has adopted standardized approach to measure market risk regulatory charge in compliance with Basel II & III requirements. MRMD is preparing stress tes ng report and market risk capital charge on quarterly basis. The Bank’s Market Risk Management structure consists of BRMC for Board oversight, MRMC and Asset and Liabili es Commi ee (ALCO) at the senior management level and dedicated Market & Liquidity Risk Management Department (MRMD) repor ng directly to Head Risk Management Division. MRMD is responsible for policy formula on, procedures development, controlling of market risks including monitoring of exposures against limits and assessment of risk in new businesses. Market risk authority, including both approval of market risk limits and approval of market risks is vested in BRMC and ALCO. Market risk It is the risk that the value of the on and off-balance sheet posi ons of the Bank will be adversely affected by movements in market rates or prices such as interest rates, equity prices and/or commodity prices resul ng in a loss of earnings, and capital. Market risks arise generally from trading ac vi es, open foreign currency posi ons, holding common equity, and other products. All such instruments and transac ons are exposed to general and specific market movements. Punjab Sindh KPK including FATA Balochistan Islamabad AJK including Gilgit-Bal stan Total Province/Region NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 201 The Bank of Khyber ANNUAL REPORT 2018
  97. 42 .2.2 42.2.1 96 3,836,284 3,047,673 95,011,903 2,045,387 74,375 207,291 3,625,023 107,847,936 Banking book 8,515,169 657,687 7,695,642 94,233,239 171,035 4,475 1,550,160 2,419,640 115,247,046 2018 Trading book 12,351,453 3,705,360 7,695,642 94,233,239 95,011,903 2,216,422 78,850 1,757,451 6,044,663 223,094,983 3,041,381 2,676,978 83,369,052 2,035,808 132,391 207,812 2,064,539 93,527,961 Total Banking book Rupees in '000 5,874,637 580,373 1,529,106 140,473,783 197,741 4,185 171,939 2,772,659 151,604,423 2017 Trading book 8,916,018 3,257,351 1,529,106 140,473,783 83,369,052 2,233,549 136,576 379,751 4,837,198 245,132,384 Total Foreign exchange risk/currency risk is defined as risk of loss to earnings and capital arising from adverse movements in currency exchange rates. The Bank undertakes currency risk mostly or supports its trade services and maintains overall foreign exchange risk posi ons to the extent of statutory foreign exchange exposure limit prescribed by SBP. Exposure limits such as counter party, gap currency-wise net open posi on, por olio-wise management ac on triggers, dealer and product limits are also in place in accordance with the Bank’s approved policies to limit risk and concentra on to the acceptable tolerance levels. ALCO is regularly informed through reports issued on regular frequencies for required monitoring. Hedging strategies and mark-to-market valua ons are used to mi gate exchange risk resul ng from open posi ons, where required. Foreign exchange risk Cash and balances with treasury banks Balances with other banks Lendings to financial ins tu ons Investments Advances Fixed assets Intangible assets Deferred tax assets Other assets Balance sheet split by trading and banking books NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 201 The Bank of Khyber ANNUAL REPORT 2018
  98. 959 ,515 76,210 561 89,222 49,533 1,175,041 993,659 105,109 147,286 93,695 1,339,749 Foreign currency liabili es 97 7,272,716 104,490 1,623 688,252 223,849 8,290,930 Off-balance sheet items 2018 7,238,572 75,591 2,184 630,189 179,686 8,126,222 - Banking book 4,488,385 92,040 12,720 391,612 4,984,757 Off-balance sheet items 4,969,652 97,994 (297,031) 632,385 2,333 5,405,333 Net foreign currency exposure 30 - 4,300 2018 2017 Trading book Banking book Trading book Rupees in '000 814,156 41,572 2,237 240,773 2,333 1,101,071 332,889 35,618 311,988 680,495 Foreign currency Foreign currency assets liabili es Rupees in '000 Net foreign currency exposure 2017 3,174 2,378 49,076 2018 2017 Trading book Banking book Trading book Rupees in '000 4,675 Banking book "It is the risk of loss to earning or capital as a result from unfavorable fluctua ons in prices of shares in which the Bank carries long and / or short posi ons, in its trading book.ALCO (Asset Liability Commi ee) is responsible for making investment decisions in the capital market and se ng limits as per BRMC approved criteria as per Bank's BoD approved market risk management policy. Por olio, sector and scrip wise limits are assigned by the ALCO to safeguard against concentra on risk and these limits are reviewed and revised periodically along with results of different stress tests. The treasury division ensures compliance of concentra on limits set by ALCO. Limit breaches if any are promptly reported to ALCO for its ra fica on and BRMC for their informa on." Equity posi on risk Impact of 5% change in equity prices on - Profit and loss account - Other comprehensive income 42.2.3 Impact of 1% change in foreign exchange rates on - Profit and loss account - Other comprehensive income United States Dollar Great Britain Pound Sterling Japanese Yen Euro Other currencies Foreign currency assets NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 201 The Bank of Khyber ANNUAL REPORT 2018
  99. Impact of 1 % change in interest rates on - Profit and loss account - Other comprehensive income 98 Total yield/interest risk sensi vity gap Cumula ve yield/interest risk sensi vity gap Off-balance sheet financial instruments Commitments in respect of: - forward foreign exchange contracts purchases - forward foreign exchange contracts sales Off-balance sheet gap On-balance sheet gap Liabili es Bills payable Borrowings Deposits and other accounts Other liabili es Assets Cash and balances with treasury banks Balances with other banks Lendings to financial ins tu ons Investments Advances Other assets On-balance sheet financial instruments 9.40% 4.74% 0.30% 2.15% 9.87% 7.75% 7.67% Effec ve Yield/ Interest rate 1,705,102 1,500,999 204,103 895,126 34,842,114 171,167,556 4,485,603 211,390,399 7,651,861 12,351,453 3,705,360 7,695,642 94,233,239 95,011,903 6,044,663 219,042,260 Total (14,976,466) (14,976,466) - 25,870,014 17,516,959 43,386,973 (14,976,466) 83,277 688,021 5,695,642 7,759,847 14,183,720 28,410,507 Upto 1 Month (36,621,344) (51,597,810) - 7,472,100 55,706,838 63,178,938 (36,621,344) 8,557,694 17,999,900 26,557,594 Over 1 to 3 Months Major sources of interest rate risk are: i) differences between the ming of rate changes and the ming of cash flows (re-pricing risk); ii) changing rate rela onships among different yield curves affec ng bank ac vi es (basis risk); iii) changing rate rela onships across the range of maturi es (yield curve risk); and iv) interest-related op ons embedded in bank products (op ons risk). 13,437,831 13,437,831 30,517,870 6,638,409 37,317,292 43,955,701 30,517,870 (50,664,031) - Over 1 to 2 Years 3,188,019 (47,476,012) - 633,868 633,868 3,188,019 1,464,809 2,357,078 3,821,887 Rupees in '000 Over 6 Months to 1 Year (29,584,091) (81,181,901) - 40,188,983 40,188,983 (29,584,091) 4,254,919 6,349,973 10,604,892 Over 3 to 6 Months 16,389,682 (31,086,330) - 568,306 568,306 16,389,682 15,375,963 1,582,025 16,957,988 Over 2 to 3 Years 2018 Exposed to yield/ interest risk 27,067,411 (4,018,919) - 2,274,630 2,274,630 27,067,411 25,450,346 3,891,695 29,342,041 Over 3 to 5 Years 4,346,414 18,549,714 14,530,795 - 408,723 408,723 18,549,714 10,737,779 8,220,658 18,958,437 Over 5 to 10 Years - 5,259,562 19,790,357 - 450,000 450,000 5,259,562 2,600,000 3,109,562 5,709,562 Above 10 Years 3,782,283 1,705,102 1,500,999 204,103 895,126 1,500,000 39,981,418 4,485,603 46,862,147 (12,138,496) 12,268,176 3,017,339 2,000,000 11,393,473 6,044,663 34,723,651 Non-interest bearing financial instruments - 2017 Banking book Trading book Rupees in '000 2018 Banking book Trading book The Interest rate risk of the Bank arises when there is a mismatch between contractual maturi es, which are subject to interest rate adjustment within a specified period or re-pricing of on- and off-balance sheet assets and liabili es. The bank's ALCO is primarily responsible for the oversight of the interest rate risk. In order to ensure risk is managed within acceptable limits, Market & Liquidity Risk Management Department of RMD and ALCO monitor various gap limits, por olio-wise management ac on triggers and re-pricing of the assets and liabili es on a regular basis. Yield Curve risk is the risk that a financial instrument will suffer either a decline because future changes in prevailing interest rates impact assets more or less than they impact liabili es. Yield / interest rate risk in the banking book (IRRBB)-Basel II Specific 42.2.5 Mismatch of interest rate sensi ve assets and liabili es 42.2.4 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2018 The Bank of Khyber ANNUAL REPORT 2018
  100. 99 42 .3 5.29% 4.39% 0.30% 0.58% 4.88% 6.83% 7.05% 1,005,048 1,175,536 (170,488) 1,131,241 64,189,586 159,246,974 5,166,464 229,734,265 12,648,243 8,916,018 3,257,351 1,529,106 140,473,783 83,369,052 4,837,198 242,382,508 Total (36,756,749) (36,756,749) - 42,555,704 32,735,699 75,291,403 (36,756,749) 91,993 670,506 25,748,892 12,023,263 38,534,654 Upto 1 Month 13,396,945 (23,359,804) - 6,740,450 11,285,281 18,025,731 13,396,945 28,748,869 2,673,807 31,422,676 Over 1 to 3 Months 15,709,671 (7,650,133) - 4,923,175 6,087,995 11,011,170 15,709,671 2,930,469 23,790,372 26,720,841 Over 3 to 6 Months (41,169,117) (48,819,250) - 9,970,257 65,483,664 75,453,921 (41,169,117) 3,241,386 31,043,418 34,284,804 13,407,584 (35,411,666) - 756,523 756,523 13,407,584 10,888,270 3,275,837 14,164,107 2,065,785 (33,345,881) - 289,556 289,556 2,065,785 1,572,530 782,811 2,355,341 2017 Exposed to Yield/ Interest risk Over 6 Over 1 Over 2 Months to 1 to 2 to 3 Year Years Years Rupees in '000 43,317,433 9,971,552 - 4,637,402 4,637,402 43,317,433 44,024,432 3,930,403 47,954,835 Over 3 to 5 Years 13,079,563 23,051,115 - 1,149,648 1,149,648 13,079,563 11,427,174 2,802,037 14,229,211 Over 5 to 10 Years 3,097,104 26,148,219 - 450,000 450,000 3,097,104 500,000 3,047,104 3,547,104 Above 10 Years 1,005,048 1,175,536 (170,488) 1,131,241 36,371,206 5,166,464 42,668,911 (13,499,976) 8,824,025 2,586,845 1,529,106 11,391,761 4,837,198 29,168,935 Non-interest bearing financial instruments Currently, the Bank uses the Basic Indicator Approach (BIA) for assessing its opera onal risk capital charge. The Bank also has an approved opera onal risk policy in terms of SBP BPRD circular 04 of 2014. As part of pro-ac ve opera onal risk management, The Opera onal Risk Management Department (ORMD) has already completed RCSA'a of Retail Banking, Treasury and Investment , and Informa on Technology Division. The processes were thoroughly discussed with relevant stakeholders for any control failures/lapses. Based on the results of RCSAs, adequate Key Risk Indicators (KRIs) for various business lines are also developed. An Automated solu on for incident repor ng is in place and can be accessed by every employee of the Bank for repor ng of control breaches leading to losses. The Bank has also in place the business con nuity plan and appropriate outsourcing measures to cater to related opera onal risks. The Bank defines opera onal risk as the risk of loss resul ng from inadequate or failed internal processes, people and systems or from external events. This defini on includes legal risk, but excludes strategic and reputa onal risk. The Bank maintains a system of internal controls designed to keep opera onal risk at appropriate levels keeping in view the Bank's financial strength and the characteris cs of the ac vi es and market in which it operates. These internal controls are periodically updated and tested. The Bank of Khyber, like all financial ins tu ons, is exposed to many types of opera onal risks, including the poten al losses arising from internal ac vi es or external events caused by breakdowns in informa on, communica on, physical safeguards, business con nuity, supervision, transac on processing, se lement systems and procedures and the execu on of legal, fiduciary and agency responsibili es. Opera onal risk Total Yield/Interest Risk Sensi vity Gap Cumula ve Yield/Interest Risk Sensi vity Gap Off-balance sheet financial instruments Commitments in respect of: - forward foreign exchange contracts purchases - forward foreign exchange contracts sales Off-balance sheet gap On-balance sheet gap Liabili es Bills payable Borrowings Deposits and other accounts Other liabili es Assets Cash and balances with treasury banks Balances with other banks Lendings to financial ins tu ons Investments Advances Other assets On-balance sheet financial instruments Effec ve Yield/Interest rate NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2018 The Bank of Khyber ANNUAL REPORT 2018
  101. 100 Share capital Reserves Unappropriated pro fit Deficit on revalua on of assets Net assets Liabili es Bills payable Borrowings Deposits and other accounts Other liabili es 10,002,524 2,643,483 1,163,269 (2,104,692) 11,704,584 895,126 34,842,114 171,167,556 4,485,603 211,390,399 11,704,584 12,351,453 3,705,360 7,695,642 94,233,239 95,011,903 2,216,422 78,850 1,757,451 6,044,663 223,094,983 Total 895,126 17,300 282,029 1,194,455 29,520,683 12,351,453 3,705,360 253,721 8,574,501 5,830,103 30,715,138 Upto 1 Day 19,837,172 42,471 19,879,643 (7,655,928) 7,195,642 4,995,807 32,266 12,223,715 Over 1 to 7 days 2,448,371 2,448,371 (1,905,020) 543,351 543,351 Over 7 to 14 days 2,079,848 15,989,687 4,117,577 22,187,112 (19,428,414) 2,488,158 270,540 2,758,698 Over 14 days to 1 Month 8,721,123 1,025,782 9,746,905 3,722,324 500,000 10,808,144 2,161,085 13,469,229 Over 1 to 2 Months Maturi es of assets and liabili es - based on contractual maturity of the assets and liabili es of the Bank 2,901,971 64,928,034 368,026 68,198,031 (34,950,055) 2,492,000 30,541,416 214,560 33,247,976 1,284,700 21,199,254 22,483,954 (16,732,724) 4,254,919 1,496,311 5,751,230 Over 3 to 6 Months Rupees in '000 Over 2 to 3 Months 2018 5,239,305 5,239,305 (340,605) 1,165,030 3,733,670 4,898,700 Over 6 to 9 Months 13,988,587 13,988,587 (1,992,343) 6,391,211 5,286,285 318,748 11,996,244 Over 9 months to 1 year 14,239,543 14,239,543 (6,986,290) 2,937,959 2,280,971 276,872 1,757,451 7,253,253 Over 1 to 2 years 16,052,155 16,052,155 1,295,467 15,485,249 1,648,848 134,675 78,850 17,347,622 Over 2 to 3 years 11,154,633 11,154,633 36,928,380 25,848,263 22,056,541 178,209 48,083,013 Over 3 to 5 Years 4,577,705 4,577,705 30,229,109 17,112,778 16,386,118 1,307,918 34,806,814 Over 5 Years The experience of Global Financial Crises (GFC) has urged the banks to follow an aggressive approach regarding liquidity and funding risk. State Bank of Pakistan has re-defined the guidelines and mechanism for liquidity risk management for banks in terms of different disclosures and reports. This en re mechanism as directed by SBP Basel III liquidity standards referred by BPRD circular # 08 - 2016 is implemented to ensure the liquidity risk management within regulatory parameters. The main disclosures are consisted Liquidity coverage ra o (LCR) and Net stable funding ra o (NSFR). As a part of liquidity management, the Bank maintains borrowing rela onships with various financial ins tu ons to ensure the con nued access to diverse market of funding sources. The Bank’s credit ra ng together with market reputa on has enabled it to secure ample call lines with local and foreign banks and can fulfill its liquidity gap if a need arises. Bank's liquidity risk management approach involves intraday liquidity management, managing funding sources and evalua on of structural imbalances in balance sheet structure. The Bank’s large and stable base of customer deposits, along with Bank’s strong capital base supplemented underlying strength and strong liquidity posi on during the year. Bank also has a substan al por olio of marketable securi es that can be realized in the event of liquidity stress. The level of liquidity reserves as per regulatory requirements also mi gates liquidity risk. The Bank’s Asset & Liability Commi ee (ALCO) manages the liquidity posi on on a regular basis and is primarily responsible for the formula on of the overall strategy and oversight of the asset and liability func on. ALCO monitors the maintenance of liquidity ra os, both in terms of the overall funding mix and avoidance of undue reliance on large individual deposits. The BOD has approved comprehensive Liquidity Risk Management Policy which s pulates the early warning indicators (EWI) of liquidity risk and maintenance of various ra os according to comfortable, acceptable, warning, and stress zones. Moreover, Bank also has Con ngency Funding Plan (CFP) in place to address liquidity issues in mes of stress / crisis situa on. In addi on, ALCO & BRMC are briefed about various Liquidity Risk standards like Liquidity Coverage Ra o and its monitoring tools on periodic basis. Further the Bank has designed different scenarios of cash ou lows to stress test efficiency of its liquid assets and its impact on profit and loss. Bank performs regular liquidity stress tests as part of its liquidity monitoring ac vi es. The purpose of the liquidity stress tests is intended to ensure sufficient liquidity for the Bank under both idiosyncra c and systemic market stress condi ons. The results are regularly reviewed by ALCO for taking appropriate measures. Liquidity risk is the risk that the Bank is unable to meet its payment obliga ons associated with its financial liabili es when they fall due, and to replace funds when they are withdrawn. Liquidity risk is governed by the liquidity management policy of the Bank and is managed by Market & Liquidity Risk Management Department under the supervision of ALCO. Assets Cash and balances with treasury banks Balances with other banks Lendings to financial ins tu ons Investments Advances Fixed assets Intangible assets Deferred tax assets Other assets 42.4.1 42.4 42.3.1 Opera onal risk-disclosures basel II specific Basic Indicator Approach (BIA) is used for Opera onal Risk under Basel II. Liquidity risk NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2018 The Bank of Khyber ANNUAL REPORT 2018
  102. 101 10 ,002,524 2,550,263 2,390,464 454,868 15,398,119 1,131,241 64,189,586 159,246,974 5,166,464 229,734,265 15,398,119 8,916,018 3,257,351 1,529,106 140,473,783 83,369,052 2,233,549 136,576 379,751 4,837,198 245,132,384 1,131,241 385,000 14,000 1,530,241 16,754,750 1,125,828 4,985,794 18,284,991 8,916,018 3,257,351 Upto 1 Day 41,822,703 96,174 41,918,877 (41,896,122) 22,755 22,755 - Over 1 to 7 days 100,000 131,099 231,099 86,969 318,068 318,068 - Over 7 to 14 days 895,126 34,842,114 171,167,556 4,485,603 211,390,399 11,704,584 10,002,524 2,643,483 1,163,269 Liabili es Bills payable Borrowings Deposits and other accounts Other liabili es Net assets Deficit on revalua on of assets 11,704,584 (2,104,692) 895,126 26,870,014 57,498,376 4,117,624 89,381,140 (41,665,924) 12,351,453 3,705,360 7,695,642 94,233,239 95,011,903 2,216,422 78,850 1,757,451 6,044,663 223,094,983 Assets Cash and balances with treasury banks Balances with other banks Lendings to financial ins tu ons Investments Advances Fixed assets Intangible assets Deferred tax assets Other assets Share capital Reserves Unappropriated profit 12,351,453 3,705,360 7,695,642 7,715,186 11,123,450 5,124,125 47,715,216 Total 928,870 1,019,597 1,948,466 27,527,654 28,748,869 727,251 29,476,121 Over 1 to 2 Months Upto 1 Month 6,500 102,414,843 4,600,952 107,022,295 (86,993,929) 14,955,795 548,478 439,780 4,084,313 20,028,366 Over 14 days to 1 Month 42.4.2 Maturi es of assets and liabili es - based on expected maturi es of the assets and liabili es of the Bank Share capital Reserves Unappropriated Profit Surplus on revalua on of assets Net assets Liabili es Bills payable Borrowings Deposits and other accounts Other liabili es Balances with other banks Lendings to financial ins tu ons Investments Advances Fixed assets Intangible assets Deferred tax assets Other assets Cash and balances with treasury banks Assets Total NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2018 4,430,929 55,706,838 367,979 60,505,746 (36,418,742) 13,300,144 10,608,639 178,221 24,087,004 Over 1 to 3 Months 6,406,681 486,551 9,166 6,902,398 18,404,955 24,505,656 409,434 392,263 25,307,353 - Over 2 to 3 Months Over 6 to 9 Months 2,291,900 40,188,983 42,480,883 (34,870,090) 4,299,577 2,899,040 412,176 7,610,793 Over 3 to 6 Months 4,569,576 8,438,509 327,593 13,335,677 (9,895,252) 1,264,760 308,776 337,784 3,440,425 1,529,106 3,351,748 228,753 3,580,501 14,900,636 18,342,928 138,209 18,481,137 Over 9 months to 1 year 13,437,831 13,437,831 19,595,141 7,804,158 24,910,314 318,500 33,032,972 633,868 633,868 4,808,893 2,243,929 1,152,868 276,872 1,757,451 11,641 5,442,761 2018 Over 6 Over 1 to 2 Months to 1 Years Year Rupees in '000 9,970,257 39,778,674 49,748,930 (34,304,750) 15,444,181 15,444,181 Rupees in '000 Over 3 to 6 Months 2017 568,306 568,306 16,878,614 16,047,834 1,185,313 134,923 78,850 17,446,920 Over 2 to 3 Years 493,389 493,389 2,029,942 1,946,543 37,624 136,576 379,751 22,838 2,523,331 Over 1 to 2 years 40,000 2,274,630 2,314,630 46,071,075 25,559,632 22,647,864 178,209 48,385,705 Over 3 to 5 Years 216,529 216,529 1,210,613 1,371,872 55,270 1,427,142 Over 2 to 3 years 1,209,271 408,724 1,617,995 32,454,644 14,662,779 19,328,902 80,957 34,072,638 Over 5 to 10 Years 2,355,862 2,355,862 9,078,072 10,788,446 645,488 11,433,934 Over 3 to 5 Years 450,000 450,000 4,850,974 2,600,000 1,155,513 1,545,461 5,300,974 Above 10 Years 450,000 450,000 98,494,581 95,643,291 3,102,320 198,970 98,944,581 Over 5 Years The Bank of Khyber ANNUAL REPORT 2018
  103. 102 42 .5 15,187,013 14,899,956 3,976,278 46,236,616 8,916,018 3,257,351 39,262,332 3,358,917 392,263 43,013,512 Over 1 to 3 Months 10,002,524 2,550,263 2,390,464 454,868 15,398,119 1,131,241 1,131,241 64,189,586 42,555,704 6,444,180 159,246,974 69,106,905 11,285,281 5,166,464 4,622,515 9,164 229,734,265 117,416,365 17,738,625 15,398,119 (71,179,749) 25,274,887 8,916,018 3,257,351 1,529,106 140,473,783 83,369,052 2,233,549 136,576 379,751 4,837,198 245,132,384 Upto 1 Month 4,923,175 6,087,995 306,031 11,317,201 16,799,348 1,529,106 2,930,469 23,212,616 444,358 28,116,549 Over 3 to 6 Months 9,970,257 65,483,664 756,523 228,754 75,682,675 756,523 (61,163,026) 17,925,230 3,291,386 17,232,706 11,228,263 1,043,947 1,050 379,751 24,299 14,519,649 18,681,753 289,556 289,556 5,516,840 3,697,557 1,924,781 47,482 136,576 5,806,396 2017 Over 6 Over 1 to 2 Over 2 to 3 Months to 1 Years Years Year Rupees in '000 296,270 4,637,402 1,149,648 4,637,402 1,445,918 63,175,012 15,790,251 44,170,146 14,202,174 22,758,401 2,724,710 883,867 309,285 67,812,414 17,236,169 Over 3 to 5 Over 5 to 10 Years Years 450,000 450,000 3,259,326 500,000 2,217,461 991,865 3,709,326 Above 10 Years Credit risk: Credit risk refers to any default by a party involved in deriva ves transac on, resul ng an adverse impact on the profitability of the Bank. The credit risk is further categorized into se lement and pre-se lement risks and are controlled via imposi on of limits to deriva ves transac ons. Deriva ves are type of financial contracts the value of which is determined by underlying one or more assets or benchmarks. Globally, deriva ves are known and used to be very complex and risky financial instruments: however, in Pakistan, the banks usually operate in forwards, futures, swaps and op ons. Currently, the Bank is not delicately involved in deriva ves business or trading. However, it operates in foreign currency forwards and swaps, a type of financial deriva ves. In our banking industry, deriva ves desk is operated within treasury business through competent resources in terms of adequate systems and qualified human resources. The responsibility to monitor and contain the risks in deriva ves business resides with Treasury Middle Office. The Risks associated with Financial Deriva ves business are Deriva ve risk Share capital Reserves Unappropriated profit Surplus/(Deficit) on revalua on of assets Liabili es Bills payable Borrowings Deposits and other accounts Other liabili es Net assets Assets Cash and balances with treasury banks Balances with other banks Lending to financial ins tu ons Investments Advances Fixed assets Intangible assets Deferred tax assets Other assets Total NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2018 The Bank of Khyber ANNUAL REPORT 2018
  104. 103 ___________________ Managing Director ___________ Director ___________ Director ___________ Director DATE OF AUTHORIZATION FOR ISSUE The financial statements were authorized for issue on March 01, 2019 by the Board of Directors of the Bank. 46 _____________ Chief Financial Officer GENERAL - Significant transac ons and events affec ng the performance and financial posi on of the Bank are reflected in the relevant notes to the financial statements. - Figures have been rounded up to the nearest one thousand unless otherwise stated. `-Compara ve figures have been re-arranged and reclassified for comparison purposes. The significant re-clasiifica ons are explained in note 6.2 EVENTS AFTER THE REPORTING DATE The board of directors in its mee ng held on Mach 01, 2019 has proposed a cash dividend in respect of 2018 of Rs. Nil (2017: Rs. 1.50 per share) to be approved in the forthcoming annual general mee ng. During the previous year, the Bank has provided renewable energy (Solar) financing facili es. Branches have been instructed to use energy efficiently through managing equipment, lesser use of paper, and encouraging planta on in the vicinity of the Branches. Branches are also advised to arrange mee ngs in order to raise awareness among the staff regarding conserva on of energy and environmental protec on. In addi on to that, the Bank has also converted its ATMs from conven onal energy to solar energy. Finally, marke ng ac vi es are to be carried out using digital medium such as social media. The Bank also aims to develop digital banking solu ons in the near future in order to integrate paperless culture within the Bank as well as among the customers. Being a socially responsible Bank, we are keen to provide our input in reduc on of emissions, increase in awareness through environment friendly prac ces and reducing our own carbon footprint through establishment of Solar powered ATMs. Further, the Bank plans to introduce solar powered branches in the near future. Social responsibility in the financial sector has evolved and its significance has increased considerably in the past couple of decades. In order to meet the evolved social obliga ons, the Bank has ini ated various ac vi es focusing on environmental preserva on and energy conserva on. For this purpose, the Bank aims to promote the concept of own impact reduc on, paperless culture, carbon emissions reduc on and encouraging planta on. Environment & social risk management / green banking 45 44 43 Opera onal risk: The resources in terms of people and systems involved in the management of deriva ves ac vi es are required to be adequately qualified, trained and competent in order to avoid the losses generated through mis-handling of deriva ves business. Market risk: In Pakistan mainly deriva ves products are used to hedge/cover interest rate risk and exchange rate risk by taking posi ons in interest rate swaps, cross currency swaps and foreign currency op ons. These risks are controlled though taking counter posi ons (back to back posi ons) and via limits in terms of DV01 (sensi vity limit) tenor limits and investment limits . NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2018 The Bank of Khyber ANNUAL REPORT 2018
  105. 104 Bilour Interna onal 2 7th Hospital Road , Peshawar Can . Shah Par cle Board (Pvt) Ltd 4 Industrial Estate, Risalpur, District Nowshera 1. Mr. Muhammad Luqman Shah CNIC 17301-1382731-5 2. M. Shehryar Shah CNIC 17301-2816671-5 3. Mst. Nusrat CNIC 17301-1263930-8 Al-Nafio Enterprises 1. Mr. Abid Hussain Main Campus, AJK CNIC 701-87-086026 3 University, Chahla 2. Mr. Shoukat Hussain Bandhi, Muzaffarabad, CNIC 82203-5963888-1 Azad Jammu & Kashmir 1. Bashir Ahmad Bilour (Late) CNIC 17301-1507402-1 2. Mrs. Nighat Bashir Bilour CNIC 17301-1335951-8 3. Mr. Haroon Bashir Bilour CNIC 17301-1496812-7 4. Mrs. Samar Haroon Bilour CNIC 17301-1335948-6 Name of individuals/partners/ directors (with CNIC No.) Pan Pacific (Pvt) Ltd. Plot # 12-M, Block-6, 1 PECHS Shara-e-Faisal, Karachi Name and address of the borrower 1. Syed Muhammad Adil Shah CNIC 42301-1069835-5 2. Mrs. Afreen Adil CNIC 42301-3125949-0 3. Mr. Moazzam Bilal CNIC 42201-8536638-1 4. S. Abdul Hameed Shah CNIC (Not Available) 5. Mr. Ijlal Razi CNIC 42201-2708622-7 6. Mr. Akhlaq Ahmad Mirza CNIC 42201-9527465-3 S. No. W/o Muhammad Luqman Shah S/o M. Luqman Shah S/o Suleman Shah S/o Ali Bahadur (Mortgagor) S/o Muhammad Khan W/o Haroon Bilour S/o Bashir Ahmad Bilour W/o Bashir Ahmad Bilour S/o M. Shafi Mirza S/o Akhtar Mehmood S/o Wali Ahmad S/o Riaz-ud-Din Bilal W/o S.M. Adil Shah S/o S.M. Shakir Shah Father's/Husband's Name 62.00 - 30.00 20.001 0.995 0.276 17.562 4.131 - - Other Interest/ than Principal Mark-up Interest/ Mark-up Rs in Million Annexure - I 62.995 0.276 47.562 24.132 - - - - - - - - 1.760 39.897 39.897 1.760 18.379 18.379 75.839 75.839 Interest/ Other Principal Mark-up Financial Total writtenwrittenRelief off Total off/waived Provided Outstanding Liabilities at Beginning of Year STATEMENT SHOWING WRITTEN-OFF LOANS OR ANY OTHER FINANCIAL RELIEF OF RUPEES FIVE HUNDRED THOUSAND OR ABOVE PROVIDED DURING THE YEAR ENDED DECEMBER 31, 2018 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2018 The Bank of Khyber ANNUAL REPORT 2018
  106. The Bank of Khyber NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31 , 2018 Annexure - II ISLAMIC BANKING BUSINESS The Bank is opera ng 84 (2017: 83) Islamic banking branches and 39 (2017: 39) Islamic banking windows at the end of the year. Note ASSETS Cash and balances with treasury banks Balances with other banks Due from financial ins tu ons Investments Islamic financing and related assets - net Fixed assets Intangible assets Other assets Total Assets 1 2 3 LIABILITIES Bills payable Due to financial ins tu ons Deposits and other accounts Due to head office Other liabili es 4 5 NET ASSETS REPRESENTED BY Islamic banking fund Reserves (Deficit) / surplus on revalua on of assets Unappropriated profit 6 CONTINGENCIES AND COMMITMENTS 7 105 2018 2017 Rupees in '000 4,222,345 2,730,430 1,629,801 874,074 2,000,000 1,529,106 10,573,630 9,680,394 35,466,569 41,472,160 280,407 337,968 5,845 867,929 796,780 55,046,525 57,420,912 336,698 482,921 1,500,000 550,000 45,894,040 36,515,753 1,078,829 14,674,193 1,168,149 552,765 49,977,715 52,775,632 5,068,810 4,645,280 460,000 44,855 (34,432) 4,598,387 5,068,810 460,000 42,671 47,678 4,094,931 4,645,280 ANNUAL REPORT 2018
  107. The Bank of Khyber NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31 , 2018 Annexure - II The profit and loss account of the Bank's Islamic banking branches for the year ended December 31, 2018 is as follows: 2018 2017 Rupees in '000 Profit / return earned Profit / return expensed Net profit / return 8 9 OTHER INCOME Fee and commission income Dividend income Foreign exchange income Gain/(loss) on securi es Other income OTHER CHARGES Opera ng expenses Other charges Profit before provisions Provisions and write offs Profit before taxa on Taxa on Profit a er taxa on 106 3,354,422 1,231,072 2,123,350 2,506,568 810,332 1,696,236 97,988 58,851 30,389 187,228 2,310,578 90,597 1,418 46,280 (13,112) 31,964 157,147 1,853,383 1,488,109 270 1,488,379 822,199 3,139 825,338 321,882 503,456 1,321,735 13 1,321,748 531,635 102,012 633,647 247,122 386,525 ANNUAL REPORT 2018
  108. 3 Investments by segments : 2 107 - 4,358,030 10,608,062 Provision for diminu on - Cost 6,250,032 Islamic financing and related assets - net of provision Less: provision against Islamic financings - Specific - General Ijarah Murabaha Diminishing Musharaka Running Musharka Qarze Hasna Is sna Gross Islamic financing and related assets Islamic financing and related assets Federal Government Securi es: -GoP Ijarah Sukuks Other non-government debt securi es -Power/gas and other sukuks Due from financial ins tu ons Call lendings Bai muajjal receivable from State Bank of Pakistan 1 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2018 2018 (34,432) (34,432) (Deficit) 2,000,000 2,000,000 In local currency Cost 4,358,030 10,573,630 6,215,600 3,382,420 9,632,717 6,250,297 3.1 3.2 Note - - Provision for diminu on In local currency Rupees in '000 2,000,000 1,529,106 2,000,000 1,529,106 Total 'Rupees in '000 Carrying value - - 2018 In foreign currency 2017 3,382,420 9,680,394 6,297,975 Carrying value 1,529,106 1,529,106 Total 125,439 15,987 141,426 35,466,569 133,544 11,021 144,565 41,472,160 761,525 3,555,655 1,853,726 33,000,000 69,777 2,376,042 41,616,725 2017 Rupees in '000 1,138,904 3,268,313 4,291,097 23,026,000 33,688 3,849,993 35,607,995 2018 47,678 47,678 Surplus - 2017 In foreign currency The Bank of Khyber ANNUAL REPORT 2018
  109. 3 .1.1 3.1 As at January 01, 2018 Cost As at December 31, 2018 2018 108 302,067 581,822 6,743 890,632 As at January 01, 2017 332,161 883,324 6,749 1,222,234 30,094 301,502 6 331,602 Addi ons / (dele ons) Cost 228,033 293,669 (1,855) 519,847 Addi ons / (dele ons) 2017 Rupees in '000 165,050 309,276 5,831 480,157 Deprecia on 49,984 88,843 (1,441) 137,386 215,034 398,119 4,390 617,543 332,161 883,324 6,749 1,222,234 Rupees in '000 116,370 216,761 3,062 336,193 48,680 92,515 2,769 143,964 165,050 309,276 5,831 480,157 As at December As at January 01, Charge for the As at December 31, 2017 2017 year 31, 2017 560,194 1,176,993 4,894 1,742,081 As at January Charge for the As at December 01, 2018 year 31, 2018 167,111 574,048 918 742,077 Book value as at December 31, 2017 345,160 778,874 504 1,124,538 Book value as at December 31, 2018 742,077 6,155 748,232 13,293 761,525 2017 Rupees in '000 1,124,538 5,631 1,130,169 8,735 1,138,904 2018 Ijarah assets under IFAS-2 are statedat cost of Rs. 1,742.081million(2017:Rs. 1,222.234million)less accumulated deprecia on of Rs. 617.543million(2017 Rs: 480.157million)in accordance with the SBP leter no. BPRD/BRLD-04/2008-6268. Future Ijarah rental receivable Plant & Machinery Vehicles Equipment Total Plant & Machinery Vehicles Housing Total Ijarah under IFAS-2 Ijarah under IFAS-II Deprecia on 3.1.1 3.1.2 Under IFAS-II Under finance method Assets/inventory Note Ijarah NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2018 The Bank of Khyber ANNUAL REPORT 2018
  110. 3 .1.2 Ijarah rentals receivable Residual value Minimum Ijarah rentals Profit for future periods Ijarah under finance method 2,792 8 2,800 (594) 2,206 3,820 35 3,855 (430) 3,425 - Over five years 2018 Later than Not later one and less than one year than five years Net investment in ijarah under finance method NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2018 Not later than one year Rupees in '000 6,612 5,799 43 449 6,655 6,248 (1,024) (857) 5,631 5,391 Total 1,177 20 1,197 (433) 764 Later than one and less than five years - Over five years 2017 Total 6,976 469 7,445 (1,290) 6,155 The Bank of Khyber 109 ANNUAL REPORT 2018
  111. Murabaha receivable - gross Less : Deferred murabaha income Profit receivable shown in other assets Murabaha financings The movement in Murabaha financing during the year is as follows: Opening balance Sales during the year Adjusted during the year Closing balance Murabaha sale price Murabaha purchase price Deferred murabaha income Opening balance Arising during the year Less: Recognized during the year Closing balance 3.2.2 3.2.3 3.2.4 Advances for Murabaha Murabaha Murabaha financing Inventory for murabaha 3.2.1 3.2 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2018 3.2.2 3.2.4 3.2.1 Note 110 85,888 318,303 286,692 117,499 6,481,991 6,163,688 318,303 2,807,182 6,481,991 6,342,301 2,946,872 2,946,872 117,499 18,997 2,810,375 49,465 238,746 202,323 85,888 5,267,159 5,028,413 238,746 1,426,245 5,267,159 3,886,223 2,807,182 2,807,182 85,888 18,504 2,702,789 2017 Rupees in '000 2,762,738 2,672,826 184,134 134,356 2,946,872 2,807,182 321,441 748,473 3,268,313 3,555,655 2018 The Bank of Khyber ANNUAL REPORT 2018
  112. 111 Pro fit payable in local currency Pool Management Reserves Un-earned commission and income Accrued expenses Deferred income murabaha Un-earned Bai Maujjal Sukuk Security deposit against ijarah Charity fund Tax payable Others Other liabili es 5.1 Note 37,984 354 36,254,599 17,574,282 16,388,580 2,253,400 36,216,261 This includes deposits eligible to be covered under insurance arrangements amoun ng to Rs 23,005.65 million as of December 31, 2018. 1,494 88,998 45,894,040 21,731,699 21,761,903 2,309,946 45,803,548 In local Total currency Rupees in '000 5 322,813 322,813 322,813 2018 In foreign currency 4.2 1,494 88,998 45,571,227 21,408,886 21,761,903 2,309,946 45,480,735 In local currency Composi on of deposits - Individuals - Government / public sector en es - Non-banking financial ins tu ons - Private Sector Financial Ins tu ons Current deposits Savings deposits Customers Current deposits Savings deposits Term deposits Deposits 4.1 4 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2018 Rs in '000 152,128 97,714 59,469 47,186 117,499 340,901 9,156 321,745 22,351 1,168,149 2018 37,984 354 36,515,753 17,835,436 16,388,580 2,253,400 36,477,415 Total 61,366 89,794 16,121 41,507 85,889 42,605 212,659 2,824 552,765 2017 9,885,061 11,971,775 38,338 14,620,579 36,515,753 2017 Rupees in '000 12,729,148 17,956,913 90,492 15,117,487 45,894,040 2018 261,154 261,154 261,154 2017 In foreign currency The Bank of Khyber ANNUAL REPORT 2018
  113. The Bank of Khyber NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31 , 2018 5.1 Charity fund 2018 Rupees in '000 - Opening Balance Addi ons during the year Received from customers on account of delayed payment Dividend purifica on amount Other Non-Shariah compliant income Others Payments / u liza on during the year Welfare Health Closing balance 6 7 8 Islamic banking business unappropriated profit Opening balance Add: Islamic banking profit for the year Less: Taxa on Closing balance 2017 - 6,431 16 152 2,557 9,156 16,417 73 2,326 18 18,834 9,156 7,734 11,100 18,834 - 4,094,931 825,338 321,882 4,598,387 3,461,284 633,647 4,094,931 Con ngencies and commitments -Guarantees 4,608,139 - -Commitments 1,500,966 84,740 6,109,105 84,740 Profit/return earned of financing, investments and placement Profit earned on: Financing 2,611,388 1,739,069 Investments 714,802 655,716 Placements 28,232 111,783 3,354,422 2,506,568 112 ANNUAL REPORT 2018
  114. - 10 9 113 550 ,746 259,586 810,332 2017 Rupees in '000 729,516 501,556 1,231,072 2018 Key features Minimum investment is prescribed by the Bank for each sub-pool. Profit payment on monthly basis. Profit calculated on daily average balance for the month. Investment as deposit and cer ficate for 1 month, 3 months and 6 months etc. Pre-mature termina on is allowed without any adjustment if expected profit reduces for the coming months. These deposits are tagged with specific assets and deposits are accepted only when there is some opportunity of investment. These deposits require approval before acceptance. Deposits received in this pool are invested in Islamic assets like Ijarah, Diminishing Musharakah, Running Musharakah, Islamic Sukuks and any other Shariah Compliant investment which are duly approved by the Shariah Advisor. Deposits are accepted through all Islamic branches of the Bank as well as Islamic desks established in conven onal branches of the Bank. Features of sub-pools In sub pools, deposits are accepted on Musharakah basis against specific assets and are offered expected profit rates. Cer ficates can also be issued for a fixed period. Deposits received in this Pool are invested in Islamic assets like Murabaha, Ijarah, Diminishing Musharakah, Running Musharakah, Is sna, Islamic Sukuks and any other Shariah Compliant Investment which are duly approved by the Shariah Advisor. Deposits are accepted through all BOK Islamic branches, as well as, Islamic desks established in Conven onal branches of the Bank. Features of general pool In this pool all types of deposits are accepted on Musharakah basis against all types of assets and income from all types of assets. Cer ficates can also be issued for a fixed period. General pool Sub-pools i. Riba free special deposit pool ii. Riba free special deposit pool - Treasury Interbank iii. Riba free special deposit pool - Corporate iv. Riba free special deposit pool - Corporate II v. Riba free special deposit pool - Mutual fund / FI vi. Riba free special deposit pool - Staff provident fund vii. Riba free special deposit pool - Islamic export refinance security (IERS) viii. Riba free special deposit pool - Profit Equaliza on Reserves (PER) ix. Riba free special deposit pool - Investment Risk Reserves (IRR) Pool management Islamic Banking Group of the Bank is opera ng following pools/sub-pools. Deposits and other accounts Due to Financial Ins tu ons Profit on deposits and other dues expensed NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2018 The Bank of Khyber ANNUAL REPORT 2018
  115. 114 2017 Rupees in '000 3,541,650 2,663,715 1,488,379 1,321,748 2,053,271 1,341,967 1,231,072 810,332 2018 All earning assets of Islamic banking group are jointly financed by unrestricted investments/PLS deposits account holders and the Bank. Detail of jointly financed earning assets is: Classifica on of assets, revenues, expenses, gain and loss on the basis of sources of finance: Profit Equaliza on Reserve of Rs. 44.855 million (December 31, 2017:Rs. 42.671 million) is not available for the distribu on of cash and stock dividend to the shareholders. All general and specific provisions created against non-performing financing and diminu on in the value of investment as under pruden al regula ons and other SBP direc ves have not been passed on to the PLS deposits as expense. However, income reversals due to classifica on of assets and losses due to actual write-off of any facility have been considered expenses of the pool. Charging expenses All types of administra ve expenses are shared with the depositors. However, equity holders have the op on to absorb all or part of administra ve expenses. Gross profit earned Administra ve expenses Distributable share Profit paid to IAH/PLS depositors Brief highlights of profit earned and distributed to depositors and retained by IBG are as under: As per policy of the Bank, No gi (Hiba) is given in favor of any par cular customer or a par cular class or category of customers/investors. However, bank reduced its own share of the bank’s addi onal profit which is less than 60% of the Bank’s addi onal profit ra o. Weightages are declared five days before start of each month. i. Period of investment (number of months, years) ii. Profit payment op on (monthly, quarterly, yearly maturity) iii. Purpose of deposit (Hajj, Umrah etc.) iv. Type of customer (pensioners, widows, corporate, individual) Profit sharing and weightages for distribu on of profit Assignment of weightage for profit distribu on to different types of profit bearing sources of funds is as follows: While considering weightages emphasis shall be given to the quantum, type and the period of risk assessed by following factors: All special pools are created as sub pools of the general pool. All administra ve expenses of the pools are borne by the general pool as equity contributor. However, depositors bear the risk of all direct losses and expenses of the pool. All residual income of the pool is transferred to the general pool being equity holders. Risks of the special sub - pools NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2018 The Bank of Khyber ANNUAL REPORT 2018
  116. 115 Investments GOP Ijarah Sukuk Power /Electric/Gas Financings Agribusiness Marble & Mining Chemical and Pharmaceu cals Cement Sugar Tex le Automobile and transporta on equipment Petro Chemical Housing Misc. Manufacturing Personal Contractors Tradings Services Consumer Financings Auto Loans Metal products Commodity Finance Telecommunica on CNG sta on/GAS Consumer Finance Others NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2018 6,297,975 3,382,420 9,680,394 51,297,119 6,215,600 4,358,030 10,573,630 46,181,625 2017 Rupees in '000 810,392 958,961 14,285 951,369 138,336 4,692,143 637,681 2,047,206 4,699,096 680,002 335,688 9,609 254,311 154,041 1,741,007 923,893 804,735 359,199 71,722 919,343 2,084,058 417,662 456,862 337,023 516,629 245,309 434,863 20,000,000 30,000,000 11,256 44,640 24,059 166,660 1,103,139 179,541 35,607,995 41,616,725 2018 The Bank of Khyber ANNUAL REPORT 2018
  117. The Bank of Khyber NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31 , 2018 Annexure - III 2018 2017 Market Cost Value Rupees in '000' 0.05 0.06 231 184 5 131 5,627 618 274,685 98,893 53 55,924 56,486 9,502 178 23 276 122 17 Quality of avaialble for sale securi es - Ordinary shares Listed Companies Automobile Parts & Accessories Cable & Electrical Goods Cement Chemical Commercial Banks Engineering Fer lizer Food &Personal Care Products Insurance Inv.Banks/Inv Cos/Invest Securi es Cos Leather & Tanneries Oil & Gas Explora on Companies Oil & Gas Marke ng Companies Paper & Board Power Genera on & Distribu on Pharmaceu cals Refinery Ltd Tex le Composite Tex le Spinning Tex le Weaving Vanaspa & Allied Industries 345,996 Un-Listed Companies 156,958 2018 Breakup Cost Value Rupees in '000' 112,500 55,527 195,000 25,000 487 5,000 7 - Dawood Family Takaful Saudi Pak Leasing -Preference Shares Industrial Dev. Bank Ltd. Mohib Tex le Mills Ltd. Mohib Exports Ltd. Asian Housing Finance Ltd. Syed Match Co. Ltd. Pakistan Papersak Co Ltd. Bela Engineering Ltd. Taga Pakistan Ltd. Sind Alkalis Ltd. Fazal Vegetable Ghee Mills Ltd. Mian Mohammed Sugar Mills Ltd. Mubarik Dairies Ltd. Pak Ghee Industries Ltd. Uqab Breeding Farms Ltd. 116 Market Value Rupees in '000' 8,716 15,276 9,755 9,386 391,066 304,865 46,193 42,544 70,622 70,381 82,152 78,296 44,568 36,144 73,582 103,219 274,685 58,275 3,398 9,375 7,598 8,140 46,826 38,368 40,331 34,227 109,331 81,250 73,952 81,442 12,985 10,554 59,638 46,726 23 443 140 17 Cost 1,355,421 1,029,067 2017 Breakup Value Rupees in '000' 112,500 56,250 195,000 25,000 487 5,000 7 - Cost ANNUAL REPORT 2018
  118. The Bank of Khyber THE BANK OF KHYBER NOTES TO THE FINANCIAL STATEMENTS Annexure - III FOR THE YEAR ENDED DECEMBER 31 , 2018 Accord Tex le Ltd. Alif Tex le Mills Limited Apex Fabrics Ltd. Awan Tex le Mills Ltd. Bahawalpur Tex le Mills Ltd. Crescent Spinning Mills Ltd. Junaid Co on Mills Ltd. Karim Silk Mills Ltd. Kohinoor Looms Limited Medi Glass Ltd. Mehran Jute Mills Ltd. Qayyum Spinning Mills Ltd. Saitex Spinning Mills Ltd. Si aq Interna onal Ltd. Sind Fine Tex le Mills Ltd. Tawakkal Garments Indust. Ltd. Tawakkal Ltd. Tariq Co on Mills Ltd. Zahoor Tex le Mills Ltd. Unim Dadabhoy Leasing Co Ltd. Tawakkal Modaraba 1St Innova ve Investment Bank L.T.V Capital Modarba Casspak Industries Ltd. Al-Qaim Tex le Mills Limited. Karim Co on Mills Ltd. Mehr Dastgir Tex le Mills Limited Ayaz Tex le Mills Limited. Saleem Denim Industries Ltd.(Kapoor Tex) Adamjee Floorings Ltd. Adamjee Ind Adamjee Paper & Board Mills Ltd. Adil Polyproplene Ltd. Arag Industries Ltd. Aswan Tentage And Canvas Mills Ltd. Afsar Tex le Mills Ltd. Bankers Equity Ltd. Baluchistan Faundry Ltd. Central Co on Mills Ltd. Chilya Corragated Board Ltd Crescent Knitwear Ltd - 117 - - - - - ANNUAL REPORT 2018
  119. The Bank of Khyber THE BANK OF KHYBER NOTES TO THE FINANCIAL STATEMENTS Annexure - III FOR THE YEAR ENDED DECEMBER 31 , 2018 Crown Tex le Mills Ltd. Charsada Sugar Mills Ltd Dadabhoy Padube Ltd. Ghafur Tex le Mills Ltd. Greavaes Aircondi on Ltd. Gypsum Corpora on Ltd. Hyderabad Electronic Ind Ltd H. Sheikh M Hussain Co. Ltd. Al-Husainy Industries Limited. I Tex le Mills Limited. Karachi Pipe Mills Ltd. Lafaye e Industries Synthe cs Ltd. Marr Fabrics Limited Mehran Bank Ltd. Mohib Tex le Naveed Tex le Mills Ltd. Nowshera Engineering Co Ltd. Na onal Match Factory Ltd. Nusrat Tex le Mills Ltd. Pan Islamic Steamship Co. Ltd. Punjab Building Product Pearl Fabrics Ltd. Pak German Pre Fabs Ltd. Punjab Co on Mills Ltd. Punjab Lamp Works Ltd. Rex Baren Ba ries Ltd. Rcd Ball Bearings Ltd. Regal Ceramics Ltd. Sunshine Cloth Mills Ltd. Shahyar (O.E) Tex le Mills Ltd. Shahyar Tex le Mills Ltd. Syeed Saigol Ind. Ltd. Sunrise Tex le Mills Ltd. Turbo Tubes Ltd. Zafar Tex le Mills Ltd. Turbo tubes ltd. Zafar tex le mills ltd. Total 337,994 55,527 337,994 56,250 * Break-up values are not given as the same are not available. 118 ANNUAL REPORT 2018
  120. The Bank of Khyber Pa ern of Shareholding As On 31 /12/2018 NO. OF SHAREHOLDERS <---- HAVING SHARES ----> From To SHARES HELD PERCENTAGE 888 1 100 39561 0.0040 9941 101 500 1830635 0.1830 15193 501 1000 13808051 1.3803 2376 1001 5000 4999650 0.4998 140 5001 10000 992396 0.0992 53 10001 15000 646151 0.0646 43 15001 20000 728566 0.0728 19 20001 25000 423191 0.0423 6 25001 30000 165733 0.0166 8 30001 35000 262664 0.0263 1 35001 40000 37988 0.0038 2 40001 45000 84234 0.0084 6 45001 50000 290625 0.0291 4 50001 55000 217608 0.0218 1 55001 60000 55615 0.0056 1 60001 65000 62268 0.0062 3 65001 70000 201192 0.0201 2 70001 75000 149000 0.0149 2 75001 80000 159381 0.0159 2 80001 85000 166454 0.0166 1 90001 95000 94500 0.0094 1 105001 110000 109400 0.0109 1 135001 140000 136760 0.0137 1 165001 170000 165426 0.0165 1 220001 225000 223000 0.0223 2 230001 235000 463194 0.0463 1 240001 245000 243130 0.0243 1 255001 260000 258500 0.0258 1 275001 280000 278840 0.0279 1 695001 700000 700000 0.0700 1 865001 870000 870000 0.0870 1 1075001 1080000 1075172 0.1075 1 3420001 3425000 3421332 0.3420 1 3910001 3915000 3912815 0.3911 1 9250001 9255000 9250871 0.9247 1 9995001 10000000 10000000 0.9996 1 241635001 241640000 241639031 24.1549 1 702205001 702210000 702208233 70.1948 1000371167 100.0000 28710 Company Total 119 ANNUAL REPORT 2018
  121. The Bank of Khyber Category of Shareholders As of 31 .12.2018 No of shareholders Shares Held Percentage Directors, C EO & Children 4 58,624 0.00 Associated Companies 1 241,639,031 24.16 Banks, DFI & NBFI 5 73,617 0.00 Insurance Companies 2 18,234 0.00 General Public (Local) 28,606 46,248,038 4.62 General Public (Foreign) 50 178,157 0.02 Others 39 5,655,901 0.57 Government of Khyber Pakhtunkhwa 1 702,208,233 70.20 Foreign Companies 2 4,291,332 0.43 28,710 1,000,371,167 100.00 Total Shareholding of Directors, CEO & Children Maqsood Ismail Ahmad Asad Muhammad Iqbal Javed Akhtar 12,156 18,234 18,234 Shareholding of Banks, DFI & NBFI Pakistan Industrial & Commercial Leasing Ltd. Prudential Discount & Guarantee House Ltd. Soneri Bank Limited Pakistan Industrial & Comm. Leasing Ltd. Escorts Investment Bank Limited 2,431 22,792 15,279 21,881 11,234 Shareholding of Insurance Companies T PL Direct Insurance Limited The Pakistan General Ins. Co. Ltd 15,195 3,039 Major Shareholders Government of Khyber Pakhtunkhwa Ismail Industries Ltd. 702,208,233 241,639,031 120 ANNUAL REPORT 2018
  122. The Bank of Khyber The Bank Of Khyber Complete List Of Branches as on 31-12-2018 S .no Branch Name Br. Code Branch Mode Complete Address of Branches Phone Number Fax Number ATM Onsite 0992-341444, 341431 0992-341430 Yes 0992-331913, 331914 0992-331916 Yes Islamic 0928-613394, 612202 0928-620039 Yes 0134 Islamic 0997-310154-5 0997-310156 Near Government High School, Main Bazar, Bathkhela 0108 Islamic 0932-414851 & 3 0932-414853 Yes Main Bazar Charsadda Mardan Road, Charsadda 0111 Islamic 091-9220100-1 091-9220102 Yes Chitral Ataliq Bazar Ataliq Bazar, Chitral. 0011 0943-412473 0943-412220 Yes 8 Chitral Chew Bazar, Shop No.1-4, Qazafi Market, Chew Bazar, Chitral 0137 0943-414571-2 0943-414573 Yes 9 D. I. Khan Circular Road Circular Road, D.I.Khan 0004 0966-719017 0966-718099 Yes 10 D. I. Khan, Tank Adda Shop No.01-10, Block 13, Tank Adda, Dera Ismail Khan 0129 Islamic 0966-850724-5 0966-850727 Yes 11 Dargai Branch Amin Plaza, Main Bazar, Dargai. 0136 Islamic 0932-331447-8 0936-331449 Yes 12 Hangu Branch Opposite DCO Office, Main Bazar, Kohat Road Hangu 0107 Islamic 0925-623744 Yes 13 Haripur Branch Shahrah-e-Hazara, Haripur. 0019 Conven onal 0925-620744 0995-616800, 610728, 612292 0995-611285 Yes 0995-617231 0995-617631 Yes 0992-810732-3 0992-810736 Yes 0945-885322 0945-886322 Yes 0927-211810 & 2 0997-211813 Yes 0946-744661-64 0946-744662 Yes 0922-9260146 0922-9260156 Yes 1 Abbo abad, Jinnah Road Jinnah Road, Abbo abad 0113 2 Abbo abad, Mansehra Road 934-A, Mansehra Road, Abbo abad 0043 3 Bannu Branch Old GTS Chowk, Gowshala Road Bannu. 0103 4 Batagram Khasra No.3149/971, Haji Nazir Plaza, Shahrah-e-Qaraqurum, Batagram 5 Batkhela Branch 6 Charsadda Branch 7 Islamic Conven onal Conven onal Islamic Conven onal 14 Ha ar Branch Industrial Estate Ha ar, Haripur 0014 Conven onal 15 Havelian, Bank Square Property # 4242, Bank Square Havelian 0040 Conven onal 16 Kumber, Lower Dir City Market, Main Road, Kambur, Lower Dir 0144 17 Karak Branch Khasra No. 1327/1364, Mian Muqadess Gul Market, Main Bazar, Karak 0049 18 Khwaza Khela, Swat Irfan Plaza, Main Bazaar, Khwaza Khela, Swat 0143 19 Kohat, Bannu Road Cantonment Plaza Bannu Road, Kohat 0003 20 Kohat, Main Bazaar Shop No.T-147, T-148, Main Bazaar, Kohat 0138 Islamic 0922-522013-4 0922-522015 Yes 21 Mansehra, Abbo abad Road Main Bazar, Opposite GTS Stand Mansehra. 0117 Islamic 0997-920181 & 4 0997-920182 Yes 22 Mansehra, Shahrah-e-Resham 0122 Islamic 0997-303271, 303273 0997-303272 Yes 23 Mardan, Khwaja Gunj Bazaar 0139 Islamic 0937-870823-4 0937-870825 Yes 0937-9230505 & 7, 874899 0946-9240460,62 0937-9230606 Yes 0946-9240045 & 7 0946-9240046 Yes 0923-9220035 & 38 091-2561511 0923-9220035 Yes 091-2561512 Yes Islamic Conven onal Islamic Conven onal 24 Mardan, Chamber House 25 Mingora, Main Bazar 26 Mingora, Saidu Sharif Road 27 28 Nowshera Branch Peshawar, Asamai Gate (LHR) 29 Peshawar, Ashraf Road Opposite Grid Sta on, Near Pakhwal Chowk, Shahra-e-Resham, Mansehra. Property No.26/591-592, 27593-628, Haji Khan Gul Trunk House, Khwaja Gunj Bazaar, Mardan Grund floor, Chamber House, Aiwan-e-Sanat-o-Tijarat Road, Collage Chowk, Mardan. Shop No. 01, Bank Square, Main Bazar, Mingora, Swat. Basement & Ground Floor, Yousaf Plaza, Khasra No.318, Makan Bagh, Saidu Sharif Road, Mingora, Swat. Saad Plaza, Saddar Road, Nowshera Can . Tariq Sultan Building, Asamai Gate, Lady Reading Hospital Road Peshawar New Rampura Gate, Ashraf Road, Peshawar. 0025 Conven onal 091-2593262, 2553007 091-2552497 Yes 30 Peshawar, Civil Secretariat Civil Secretariat , Peshawar 0015 Conven onal 091-9211710 091-9212680 Yes 31 Peshawar, G. T. Road Ground floor, Afandi Tower, Bilal Town, G.T. Road, Peshawar 0010 Conven onal 091-2263409 091-2263410 Yes 32 Peshawar, Hayat Abad Chowk Saif Shopping Mall, Hayatabad Chowk, Jamrud Road, Peshawar 0128 091-5853283-4 091-5853285 Yes 33 Peshawar, High Court Branch High Court Branch Peshawar 0048 091-5274368,5274168 091-5274168 Yes 34 Peshawar, Kharkhano Market Hayat Abad Royal Plaza, Hayatabad Kharkhano Market, Jamrud Road, Peshawar 091-5824927, 5825430 091-5815194 Yes 35 Peshawar, Khyber Bazar Abbasin Hotel, Khyber Bazar, Peshawar 0016 091-2593705, 2568782 091-2211170 Yes 36 Peshawar, KTH Branch Khyber Teaching Hospital (University Road) Peshawar 0121 37 Peshawar, Main Corporate Branch Shop No. 1 to 6 (Ground Floor) and Office No. 1 to 3 (First Floor), Olympic Plaza, Qayyum Stadium, Bara Road, Peshawar Can . 0001 Conven onal 091-5271758,5278284 091-5279791 38 Peshawar, Saddar Road Shop No.9,10 & 11, at Super Market, Adjacent State Bank of Pakistan Peshawar, 0013 Conven onal 091-5273912, 5276485 091-5277278 39 Peshawar, University Road 0002 Conven onal 091-5700227, 9216951 091-9216959 Yes Yes 40 Peshawar, Warsak Road 0066 Conven onal 091-5201301-2 091-5201341 Yes 41 Serai Naurang Branch Ghaffar Plaza, Adjacent to Sheraz Restaurant, University Road, Peshawar Khasra No.6184/2893, Shop No.1, Sabir Business Center, Warsak Road, Peshawar Khasra No 438, Sahibzada Kabir Plaza GT Road , Serai Naurang, Lakki Marwat 0127 Islamic 0969-352963 0969-352964 Yes 42 Shabqadar Khasra No.4244/159-162, Oppoisite Shabqadar Fort Gate, Shabqadar 0145 Islamic 091-6281101-2 091-6289333 Yes 43 Swabi Branch Jamil Khan Market, Mardan Road, Swabi 0118 Islamic 0938-222513, 223423 0938-222512 Yes 44 Swari Branch (Buner) Nisar Market, Pir Paba Road, Swari, Buner 0131 Islamic 0939-555289, 555279 0939-555229 Yes 45 Tank Branch Gillani Market, Main Bazar Opposite DHQ Hospital, Tank. 0106 Islamic 0963-510068 0963-510400 Yes 46 Thall, Main Bazar Al-Murtaza Market, Bannu Chowk, Main Bazar Thall District Hangu 0130 Islamic 0925-510740, 511741 0925-511741 Yes 47 Timergara Branch Shaheed Plaza, Alam Zeb Shaheed Chowk, Timergara 0105 Islamic 0945-9250232, 822090 0945-822690 Yes 48 Topi Branch Sher Khan Market, Main Bazar, Tarbela Road, Topi, Dis Swabi. 0135 Islamic 0938271546-8 0938-271547 Yes 49 Upper Dir Shop No.1 to 6 Shafi Plaza, Saleem Market Main Bazar Upper Dir. 0126 Islamic 0944-890021 0944-890022 Yes 50 Peshawar, Shami Road 0068 091-5270270-71 091-5613913 51 Saleh Khan (Pubbi) Shop No.6-10, Garrison Park, Shami Road, Peshawar Khasra No.169&183, Main Bazar, Moza Saleh Khana, Tehsil Pubbi, Nowshera 121 0007 0132 0012 0104 0119 0101 0147 Conven onal Islamic Conven onal Islamic Islamic Islamic Conven onal Islamic Conven onal Islamic Conven onal Islamic 091-9218016 0946-9240461 091-9218016 Yes Yes Yes ANNUAL REPORT 2018
  123. The Bank of Khyber S .no Branch Name 52 Peshawar, Chowk Nasir Khan 53 Peshawar, Dalazak Road 54 Chakdara Br. Code Branch Mode Complete Address of Branches 0154 Islamic 55 Peshawar, Garhi Qamar Din 56 Jehangira 57 Takht Bhai 58 59 Pabbi, G.T.Road GulBahar Branch, Peshawar. 60 Tangi Branch, Charsadda. 61 Barikot Swat 62 Shangla 63 Wari Dir 64 Charsadda Road Branch, Peshawar. 65 Manki Sharif Branch, Nowshera. 66 Torghar 67 Achini Payan Branch, Peshawar. 68 D.I.Khan Road Branch, Bannu. Al-Rehmat Plaza, Property No. CB/637/2027/755 & CB/637/2028/754/F-1 F-2, Ground Floor, Peepal Mandi, Chowk Nawaz Plaza, Taxa on No. 4988 to 5008, Ground Floor, Dalazak Road, Peshawar. Shop No.1 to 10, Zaman Market, Adjacent UBL & NBP, Main Bazar, Chakdara (Lower Dir) Khata Khatoni No.418/ 915 to 937, Khasra No.Qata (41), Ground Floor, Arbab Maket, Garhi Qamar Din, Near Mujaddad CNG sta on, North side Ring Road, Peshawar. Ground & 1st Floor, Behram Khan Centre, G.T. Road, Jehangira (Nowshera) Khasra No.785, Shaukat Mansion, Ground & 1st Floor, Opposite Takht Bhai Mega Market, Takht Bhai, Mardan Ajun Market, G.T.Road, Pabbi (District Nowshera) Plot # 4-A & 4-B, Sameer Square, Anam Sanam Chowk, Gulbahar Road, Hussainabad, Peshawar Khasra No. 1633, Malak Plaza, Sabqadar Road, Tangi,(District Charsadda) Khasra No. 1333, Iqbal Khan Plaza, Pir Baba Road, Barikot Swat Islamic Banking Branch at Khasra No.1283, 84 & 86, Munir Plaza, Adjacent MCB, Basement & Ground Floor, Besham Road, Alpuri District Shangla. I ehad Plaza, Lower basement and Ground floor,Wari Bazaar, Dir Chitral Road, Upper Dir. Khasra No. 1615/832, Adjacent Khayali CNG Sta on, Shero Jhangi, Charsadda Road, Peshawar. Malak Jammen Market, Soorya Khel, Manki Sharif, Tehsil & District Nowshera. Quarter No.1, District Head Quarter Torghar Judba, District Torghar, KPK Muhammad Arcade, Achini Payan, Ring Road near Hayatabad Peshawar. University Plaza, D.I.Khan Road, Bannu. 69 Ma a Branch Malak Tahir Market, Mouza Main Bazar, Ma a, Mingora, Swat. 0164 Islamic 70 Sheva Adda Swabi Islamic 71 Umarzai Branch, Charsadda. 0168 Office No. 1, Ground Floor, Sardar Khan Malak Plaza, Mardan Swabi Road, Sheva Adda , Swabi. Khasra No. 4011/3485 & 4012/3486, Major Saeed Khan Market, Main 0078 Bazar, Umarzai. 0079 Shop No. 25,26,27,28,29 & 31, Commercial Plaza Sector-E, Sheilk Maltoon Town, Mardan. 72 73 Sheikh Maltoon, Mardan Kabal, Swat Khasra No. 2271, Ground Floor, Wahab Market, Kabal, Mingora Road, Swat. 0073 Conven onal Fax Number ATM Onsite 091-2592014 Yes 091-2608215-17 091-2608218 Yes 0149 Islamic 0945-762532-33 0945-762534 Yes 0155 Islamic 091-2325225-3 091-2322815 Yes 0151 Islamic 0923-510057 0923-510054 Yes 0150 Islamic 0937-553682-4 0937-553683 Yes 0159 0156 Islamic Islamic 0931-527071-3 091-2606391-3 0931-527075 091-2606394 Yes Yes 0158 Islamic 091-6555527-8-30 (091)6555530. Yes 0157 0160 Islamic Islamic 0946-751781-2 0996-850140-1 0946-751783 0996-850142 Yes Yes Islamic 0944-841511 0944-841611 091-2246684-5 0923-626071 0923-626072 0923-626074 0944-841711 (Fax) Yes 0161 0074 Conven onal 0162 Islamic 0165 Islamic 0166 Islamic 0075 0170 Conven onal Conven onal Conven onal Islamic Yar Hussain Branch Akbar Building, in qal No. 3422, Main Bazar, Yar Hussain, Swabi. 0077 75 Munda, Lower Dir 0169 76 Shergarh, Mardan Groud Floor, Habib Jan Market, Adjacent Tehsildar Office Munda, Munda Lower Dir. Groud floor, Asghar Khan Market, Main Bazar, Shergarh, Mardan. 0080 Conven onal 77 Katlang, Mardan 0081 Conven onal 78 Puran, Shangla Inteqal No. 5038, Imam Shah Market, Main Bazar, Tehsil Katlang, District Mardan Khasra No.227, Aluch Bazar, Tehsil Puran, Distruct Shangla. 0174 Islamic 79 80 Lakki Marwat Mall Road Branch, Peshawar 0173 0172 Islamic Islamic 81 82 Hayatabad Phase-V, Peshawar. Nathiagali Branch Shop No.1, Haji Jan Khan Market, Lakki City, Lakki Marwat. Office No.1, Ground Floor, Khanis Plaza, The Mall Road, Peshawar Can . Ground Floor. Plot No. 28, Sector B-1, Phase- V, Hayatabad Peshawar Ground Floor, Hotel Ellites, Adjucent Civil Hospital, Nathiagali. 0083 0171 Conven onal Islamic 83 Sherkot, Kohat. Conven onal Chamkani, Peshawar. 0084 Conven onal 85 Sakhakot Branch Khasra No. 315, Mujahid & Brothers Market, Sherkot Tehsil & District Kohat. Khasra No.156 & 157, Honey Market, Hidayatabad Chamkani, Peshawar. Noor Market, Main Malakand Road, Sakhakot, District Malakand. 0082 84 0176 Islamic 86 Tehkal Payan, Peshawar. 0178 Islamic 87 Sugar Mill Bypass Road, Mardan 88 Tordher, Swabi. 89 90 Darosh, Chitral. Haji Nazar Mohammad Building, Tehkal Payan, University Road, Peshawar. Sharif Khan Plaza, New Charsadda Chowk, Railway Patak, Sugar Mill Bypass Road, Mardan Khasra No.1751, Main Swabi Jehangira Road, Matani Changan Tordher, Swabi. Main Darosh Bazaar, Zero Point, Chitral 91 Rashakai, Nowshera Khasra No.1007/529, Sheikh Yousaf Adda, OppositePunjab Collage, Bannu Road D.I.Khan. Main Bazar Rashakai, Nowshera 92 Charbagh, Swat 93 94 0179 091-2246683 (Fax) Yes 0923-626073 (Fax) Yes Yes 0997-209705 0997-209706 091-5622545 74 Sheikh Yousaf Adda, D.I.Khan. Phone Number 091-22592014-15 Conven onal Islamic 0928-611174 (Fax) Yes 0937-843111 0937-843222 0937-843225 (Fax) Yes 0946-755471 0946-755473 0946-755472 (Fax) Yes 0938-460028 0938-460047 0945-830345 0945-830346 0937-820434 0937-820435 0937-576005 0937-576006 0938-460029 (Fax) Yes 0996-853026 0969-510059 0969-510359 091-5284212 091-5284214 091-5814820 0992-355014-15 0922-580111 0922-580888 0922-580666 0932-311410 0932-311411 0932-311412 091-5621220 0937-845696-97-98 Islamic Yes 0928-611172-5 0946-790840 0946-790841 0938-310703 0938-310704 091-952506-07 0946790842 (Fax) Yes 0938-310705 (Fax) Yes 091-952531 (Fax) Yes 0945-530347 (Fax) Yes 0937-820437 (Fax) Yes 0937-576004 (Fax) Yes Yes 0969-511059 (Fax) Yes 091-5284213 (Fax) Yes Yes 0992-355016 (Fax) Yes Yes Yes 0932-311413 (Fax) Yes 091-5621222 (Fax) Yes 0937-845699 (Fax) Yes 0085 Conven onal 0938-537116-118 0938-537119 Yes 0086 0087 Conven onal Conven onal 0943-480261-62-63 0943-480264 0966-740316-317 0966-740318 Yes 0937-880369 0937-881369 0946-730493-94 091-2323635 091-2323695 Yes 0182 Islamic Saad Tower, Main Bazar Charbagh, Tehsil & District Swat 0181 Islamic Kohat Road, Peshawar Marjan Hotel, Mauza Kotla Mohsin Khan, Kohat Road, Peshawar 0092 Rustam, Mardan Main Bazar Rustam, Mardan 0183 Islamic 0937-801909 95 Barawal Bandi, Swat Al-Madina Market Shahi Road, Main Bazar Barawal Bandi, Upper Dir 0184 Islamic 0944-830019-20 0944-830021 96 Kuza Bandai, Swat Hamas Khan Market, Ma a Road, Kuza Bandai, Tehsil Kabal, District, Swat 0093 Conven onal 0946-880411 0946-880445 Yes 97 Lundkhwar, Mardan Ramora Lundkhwar, Tehsil Takht Bhai, District Mardan 0089 Conven onal 0937-850131-32 0937-850134 Yes 98 Sardheri, Charsadda Maroof Khel, Sardheri Bazar, Tehsil & District Charsadda 0088 Conven onal 091-6644001-02 091-6644003 Yes 99 Judicial Complex Haripur Judicial Complex Haripur 0097 Conven onal 0995-321196-97 100 Nasir Baghh Branch Peshawar Nasir Bagh Road, Near Police Colony peshawar 0096 Conven onal 091-5710677-78 101 HMC Branch, Peshawar. Hayatabad Medical Complex, Phase 4 Hayatabad, Peshawar 0185 122 Conven onal Islamic 091-5811941-43 0946-730495 (Fax) Yes 091-2323696 (Fax) Yes Yes Yes 091-5811946 ANNUAL REPORT 2018
  124. The Bank of Khyber S .no Branch Name Br. Code Branch Mode Complete Address of Branches Phone Number Fax Number ATM Onsite Province Sindh (12 Branches) 102 Hyderabad Branch 103 Karachi, Bahadurabad 104 Karachi, Cli on Branch 105 Karachi, DHA, Phase-II 106 Karachi, Metroville 107 Karachi, Shahrah-e-Faisal 108 Karachi, Shireen Jinnah Colony 109 Karachi, SITE 110 Karachi, Sohrab Goth 111 Karachi, Stock Exchange Branch 112 Sukkur 113 Karachi, Napier Road Plot No.41/444,445,446,447,448 & 449, Main Bohri Bazar, Near Blair Hospital, Saddar Can ., Hyderabad. Shop No.4 & Flat No.2, Survery No.SNCC/30, Qazi Court, Karachi Coopera ve Housing Society, Bahadarabad, Karachi Shop No.7,8 & 9 Plot # G-10, Garnet Centre, Block-8, Main Road, KDA Scheme # 5, Cli on Cantonment, Karachi Plot No.69-C, 11th Commercial Building, DHA, Phase II, Karachi 0047 Conven onal 0067 KDA Scheme, Project No.1, Metroville, SITE, Karachi. Ebrahim Alibhai Tower, Shop No.02, Plot No.03, Block-7/8 Modern Coopera ve Housing Society (MCHS), Shahrah-e-Faisal, Karachi Block-1, Cli on, Shireen Jinnah Colony Karachi 0123 B-78, Allied Plaza Estate Avenue, S.I.T.E , Karachi Shops No.A-7/A, A-7/B, A-8/A, A-8/B, Ground Floor, Block “A” Plot No.1-B-2, Sub Plot No.1-A, A1 Azam Plaza Scheme 33, Sohrab Goth, Super Market, Main Super Highway Karachi 1st Floor, Karachi Stock Exchange, Karachi 0109 0110 Property No.D-986, D-987, D-971, Hussaini Road, Sukkur Shop No.07 & Office No.117, Yousuf Trader Centre, Plot No.26, SR7, Ground & 1st Floor, Napier Road, Karachi Yes Conven onal 022-2731200, 022-2731211 2731209-10 021-34946751-2-4-5 021-34946753 0046 Conven onal 021-35296291-98 021-35296291 Yes 0063 Conven onal 021-35890171-4 021-35890175 Yes 0213-6754233-4 021-36754236 Yes Islamic Yes 0024 Conven onal 0213-4389037-8 021-34389039 Yes 0034 Conven onal 0213-5873264-5 021-35873267 Yes Islamic 0213-2565102 & 4 021-32565105 Yes Islamic 021-36830070 & 2 021-36830067 Yes 0036 Conven onal 021-32465804 & 7 021-32465805 0058 Conven onal 071-5617057-8-9 071-5617056 Yes 0072 Conven onal 021-3260137172-74-75 021-32601373 Yes Province Punjab (36 Branches) 114 A ock City Plot No.178, Block-Y, DHA, Lahore Can . 0065 Conven onal 057-2602378-9 057-2701378 Yes 115 Bahawalpur Plot No.811, Block C, Faysal Town, Lahore 0050 Conven onal 062-2887532 Yes 116 Chiniot Block -R-1, M.A. Johar Town, Lahore 0044 Conven onal 062-2887533, 2887532 047-6333394-6 047-6333397 Yes 117 D.G. Khan Gulberg-III, M.M. Alam Road, Lahore 0056 Conven onal 0642-470871-4 0642-470875 Yes 118 Faisalabad, Kotwali Road Property No.82-84, Amarpak Building, Main Ravi Road, Lahore 0116 041-2412116-7-8 041-2412120 Yes 119 Faisalabad, Sosaan Road 0038 Conven onal 041-8556200-1-2 041-8556203 Yes 120 Gujar Khan 0062 Conven onal 051-3511822-3 051-3511824 Yes 121 Gujranwala, G.T. Road 0039 Conven onal Gujrat, G. T. Road 0037 Conven onal 123 Jhelum 0042 Conven onal 055-3730917-8 053-3525555, 3530380 0544-9270164 & 6 055-3730918 0533-520370, 530390 0544-9270165 Yes 122 124 Khanewal Shop #E/36, Alamgir Market, Inside Shah Alam Gate, Lahore. Property No.17/24, Shadab Market, G.T. Road, Mian Channu, District Khanewal Lower Ground, Khan Centre, Main Market, Abdali Road Multan Can . Plot No.12-B & 13-B, Haq Nawaz Plaza, Main Gate Shah Shams Colony, Vehari Road, Multan Ground Floor & 1st Floor, I ikhar Children Hospital, M.A. Jinnah Road, Okara Plot No.15, Opposite Town Hall, Model Town, Rahim Yar Khan 0060 Conven onal 065-2556433 Yes 125 Lahore, New Gardan Town. No.A/308- Jinnah Road (City Saddar Road) Rawalpindi 0114 042-36307079 Yes 126 Lahore, DHA Adam Jee Road, Saddar, Rawalapindi 0052 Conven onal 042-35741077 Yes 0057 Conven onal 042-35160473 Yes 128 Lahore, Faysal Town Lahore, Johar Town Shop No.10, Masood Plaza, Bank Road, Sadiqabad 272/B-2 High Street, Sahiwal. 0031 Conven onal 042-35316746 Yes 129 Lahore, M.M. Alam Road 0023 Conven onal 042-35872013 Yes 130 Lahore, Ravi Road 042-37947583 Yes 131 Lahore, Shah Alam Gate 132 Mian Channu 133 Multan, Abdali Road 63/5/2/1 VIP Complex, Niazi Square, Club Road, Sargodha Industrial Area, Shahabpura, Ugoki Road, Near Masjid Mohajirin, Sialkot Plot No.119, Auto Market, Badami Bagh, Lahore Khata No. 710, Yousaf Shah Building, Ground Floor, Kachary Road , Jhang Property No.8.9.90, Ground & 1st Floor, Bank Road, Daska, Sialkot 134 Khasra No.80, Adjacent Singer Branch, Sargodha Road, Sheikhupura 0142 135 Multan, Vehari Road Okara, Jinnah Road 0140 136 Rahim Yar Khan 137 Rawalpindi, City Saddar Road Khasra No.781, Geo Madina Tower, Main G.T. Road, Tarnol Gudwaal Plaza, Khewat No. 599,Khatooni No. 906-913, Ground & 1st Floor,Main Bazaar, Taxila. Ballo Khel Road, Mianwali City, Punjab 138 Rawalpindi, Saddar Adam Jee Road Shop No.10, Masood Plaza, Bank Road, Sadiqabad 0115 139 Sadiqabad Shop No.10, Masood Plaza, Bank Road, Sadiqabad 0059 Conven onal 140 Sahiwal Branch 272/B-2 High Street, Sahiwal. 0045 Conven onal 141 Sargodha 0041 142 Sialkot Branch 143 Lahore, Badami Bagh 144 Jhang 145 Daska 63/5/2/1 VIP Complex, Niazi Square, Club Road, Sargodha Industrial Area, Shahabpura, Ugoki Road, Near Masjid Mohajirin, Sialkot Plot No.119, Auto Market, Badami Bagh, Lahore Khata No. 710, Yousaf Shah Building, Ground Floor, Kachary Road , Jhang Property No.8.9.90, Ground & 1st Floor, Bank Road, Daska, Sialkot 146 Sheikupura Khasra No.80, Adjacent Singer Branch, Sargodha Road, Sheikhupura 0152 147 Tarnol 148 Taxila 149 Mianwali Khasra No.781, Geo Madina Tower, Main G.T. Road, Tarnol Gudwaal Plaza, Khewat No. 599,Khatooni No. 906-913, Ground & 1st Floor,Main Bazaar, Taxila. Ballo Khel Road, Mianwali City, Punjab 150 Chaman Branch Khasra No.451, Old Mahal 404, Abdali Bazar, Chaman 0120 Islamic 151 Que a, Jinnah Road Jinnah Road, Que a. 0102 Islamic 152 Que a, Shahrah-e-Iqbal Conven onal 154 Zhob Branch Shop No.2-7/35, Khyber Plaza, Shahra-e-Iqbal (Qandhari Bazar) Que a 0054 Khasra No.1807/16, Kaasi Building,Ground & 1st Floor, Sirki Road, 0148 Que a. 0177 Shop No. C84-85, Main bazar, Thana Road Que a, Zhob. 155 Gwadar Main Bazar Airport Road. Adjacent to Sshil hotel Gwadar 0095 Conven onal 127 Islamic Yes Yes 0141 Islamic 065-2556431-2 042-36304873, 36367407 042-35741073 & 5 042- 35160472, 35160474-8 042-35316744-5 042-35872013, 35752038 042-37947581-2 0124 Islamic 042-37641834 & 6 042-37641837 Yes Islamic 0061 Conven onal 065-2661871-2 065-2661870 Yes 0033 Conven onal 061-4545139-40 061-4545143 Yes Islamic 061-6241251-3 061-6241254 Yes Islamic 0442-511079-80 0442-511081 Yes 0051 Conven onal 068-5870182-3 068-5870185 Yes 0030 Conven onal 051-5540420 & 2, 5540486 051-5120194-7 051-5540482 Yes 051-5120198 Yes 068-5801264 Yes 040-4222403 Yes Conven onal 068-5801261-2-3 040-4222404, 4222448 048-3740892-3 0483-7408912 Yes 0032 Conven onal 052-3559225 & 7 052-3559224 Yes 0069 Conven onal 042-37731634 Yes 0070 Conven onal 047-7622182 Yes 0071 Conven onal 042-37731631-2-3 047-7622180-1, 7622183 052-6612324-6 052-6612327 Yes Islamic 056-3614182 056-3614184 Yes 0146 Islamic 051-2226781-2 051-2226783 Yes 0153 Islamic 051-4545402-3 051-4545404 Yes 045-9230091-93 045-9230094 Yes 0826-614012, 614027 081-2843203, 2822141 081-2834950-55 081-2443637, 2447377 0822-412335 08642103010302-303-304 0826-614012 0090 Islamic Conven onal Province Balochistan (6 Branches) 153 Que a, Sirki Road 123 Islamic Islamic 081-2829469 Yes 081-2834952 Yes 081-2447388 Yes Yes ANNUAL REPORT 2018
  125. The Bank of Khyber S .no Br. Code Branch Mode Complete Address of Branches Branch Name Phone Number Fax Number ATM Onsite Capital Territory Area (4 Branches) 156 Islamabad, Blue area Zahoor Plaza, Blue Area, Islamabad. 0022 Conven onal 157 Islamabad, F-10 Markaz Plot No.8. F-10 Markaz, Islamabad 0133 Islamic 051-2824691, 2826111 051-2222994-5 158 Islamabad, PWD Society Plot No.786-G, Block-C, PWD Society, Islamabad Malak Shafait Plaza, Mauza Mahal Kot, Hathial Main Murree Road, Bhara Kahu, Islamabad 0055 Conven onal 051-5170901-2 & 4 051-5170903 0180 Islamic 051-2303782-83-87 051-2303789 Shop No.1 to 6, ZS Plaza, Opposite Radio Pakistan, Shahrah-e-Quaide-Azam, Ju al Can . Gilgit 0053 Conven onal 05811-922082-3 Adjacent Caltex Petrol Pump, Jamrud Bazar, Jamrud (Khyber Agency) Groud Floor, Masoom Building, near PTDC and Tehsildar Office, Peshawar Torkham Road, Torkham. 0125 Islamic 0167 Islamic Shop No. 1 to 5 Ground Floor, Haji Safdar Market, School Road, Parachinar. Ground floor, Nawab Shah Plaza Dara Bazaar Mohammad Zarghar Dara Adam Khel. Abid City Centre, Ground Floor, Lt.Sajjad Khan Shaheed Bypass Road Khar Bazaar, Bajaur Agency Bangash Market, Main Bazar Sadda Tehsil Lower Kurram, District Kurram Agency 0076 159 Bhara Kahu Branch, Islamabad. 051-2271139 051-222997 Gilgit Bal stan (1 Branch) 160 Gilgit, Ju al Can . 05811-922084 Yes FATA (06 Branch) 161 Jamrud Road Branch 162 Torkham 163 Parachinar 164 Dara Adam Khel Branch 165 Khar Bajaur 166 Sadda, Kurram Agency 0175 091-5602013,5830147-8 091-5830149 Yes 0924-240044 0924-240047 (Fax) 0924-240045 0924-240046 Conven onal 0926-31227209260926-312275 (Fax) Yes 3122730926- 312374 Islamic 0922-811222 0922-811333 Yes 0163 Islamic 0091 Conven onal 0926-520424-25 0064 Conven onal 05826-448673-4-5 05826-448679 Yes 0035 Conven onal 05827-447686-8 05827-447685 Yes 0027 Conven onal 05822-920492 05822-920499 Yes 0942-221263-4 0926-520426 (Fax) Yes Azad Jammu Kashmir (3 Branches) 167 Kotli (AJ&K) 168 Mirpur Branch (AJ&K) 169 Muzaffar Abad (AJ&K) Commercial Property, Khasra No.579, Bank Road, Kotli Plot No.3, Sector B/3, Allama Iqbal Road, Mirpur, Azad Jammu Kashmir Secretariat Road, Muzaffarabad, Azad Jammu & Kashmir SUB-BRANCHES (3 Branches) 1 2 3 North West Hospital (Sub-Branch of University Road Peshawar) Provincial Assembly (Sub-Branch of High Court Peshawar Branch) Lady Reading Hospital Peshawar (Sub-Branch of Khyber Bazar Peshawar Branch) North West Hospital Phase-V Hayatabad Peshawar Conven onal Yes Provincial Assembly KPK Conven onal Yes Lady Reading Hospital Rest House Opposite FC Block Lady Reading Hospital Peshawar Conven onal Yes SUMMARY Conven onal Islamic KPK 40 61 Sindh 9 3 Punjab 26 10 Balochistan 2 4 Islamabad (ICT) 2 2 FATA 2 4 AJK 3 0 Gilgit 1 0 85 84 124 ANNUAL REPORT 2018
  126. The Bank of Khyber Foreign Correspondent Banks Sr # 1 Country AFGHANISTAN Name of Bank HABIB BANK LIMITED Sr# Country Name of Bank JIANGSU JIANGNAN RURAL COMMERCIAL BANK CO.,LTD.(FORMALY JIANGSU WUJIN RURAL BANK) MIZUHO BANK (CHINA),LTD. (only when Applicant/Bene is customer of Mizuho Bank) NATIONAL BANK OF PAKISTAN, KABUL BRANCH 2 AMERICAN SAMOA ANZ AMERIKA SAMOA BANK 3 ARGENTINA MUFG BANK, LTD. BUENOS AIRES BRANCH 4 AUSTRALIA AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED 5 BAHRAIN AL BARAKA ISLAMIC BANK B.S.C CLOSED ALUBAF ARAB INTERNATIONAL BANK B.S.C. (C) ARAB INVESTMENT COMPANY, THE ASKARI BANK LIMITED, BAHRAIN BRANCH BANK AL HABIB LIMITED HABIB BANK LTD. JS BANK LIMITED MUFG BANK, LTD. BAHRAIN BRANCH UNITED BANK LIMITED WOORI BANK, MANAMA MUFG BANK (CHINA), LTD. NANXUN BANK QILU BANK CO., LTD. 6 BANGLADESH RURAL COMMERCIAL BANK OF ZHANGJIAGANG SHENGJING BANK CO.,LTD THE BANK OF NEW YORK MELLON, SHANGHAI BRANCH UNICREDIT SPA-SHANGHAI BRANCH WELLS FARGO BANK, NA, SHANGHAI BRANCH WOORI BANK (CHINA) LIMITED YANTAI BANK CO., LTD. 30 JAPAN COMMERZBANK AG TOKYO MIZUHO BANK, LTD. (only when Applicant/Bene is customer of Mizuho Bank) MUFG BANK, LTD. HABIB BANK LTD. NATIONAL BANK OF PAKISTAN SOCIAL ISLAMI BANK LIMITED WOORI BANK, DHAKA NATIONAL BANK OF PAKISTAN THE BANK OF NEW YORK MELLON, TOKYO BRANCH 7 BELGIUM COMMERZBANK AG,THE,BRUSSELS BRANCH HABIB BANK LTD. KBC BANK NV THE BANK OF NEW YORK MELLON SA/NV 8 9 CAMBODIA CANADA ANZ ROYAL BANK (CAMBODIA) LTD HABIB CANADIAN BANK 10 CAYMAN ISLANDS 11 12 U.B.A.F. - UNION DE BANQUES ARABES ET FRANCAISES TOKYO BRANCH WELLS FARGO BANK, N.A., TOKYO BRANCH WOORI BANK, TOKYO 31 KUWAIT MASHREQBANK PSC. 32 KYRGYZSTAN COMMERZBANK AG,CAYMAN ISLANDS BRANCH 33 LEBANON NATIONAL BANK OF PAKISTAN BISHKEK BRANCH HABIB BANK LIMITED CHILE MUFG BANK, LTD., SANTIAGO BRANCH 34 LUXEMBOURG CHINA AGRICULTURAL DEVELOPMENT BANK OF CHINA, THE AUSTRALIA AND NEW ZEALAND BANK (CHINA)COMPANY LIMITED BANK OF CHINA (only when Applicant/ Bene is customer of Bank of China) BANK OF JIANGSU CO LTD BANK OF SHANGHAI COMMERZBANK AG DANSKE BANK INTERNATIONAL S.A. (only when Applicant/Bene is customer of Danske Bank) THE BANK OF NEW YORK MELLON (LUXEMBOURG) SA, LUXEMBOURG 35 MACAO BANCO COMMERCIAL PORTUGUES 36 MALAYSIA BANK AL HABIB LIMITED CITIBANK BERHAD MIZUHO BANK (MALAYSIA) BERHAD (only when Applicant/Bene is customer of Mizuho Bank) MUFG BANK (MALAYSIA) BERHAD CHINA CITIC BANK COMMERZBANK AG EXPORT-IMPORT BANK OF CHINA, THE INDUSTRIAL AND COMMERCIAL BANK OF CHINA 37 125 MAURITIUS BANK OF BARODA ANNUAL REPORT 2018
  127. The Bank of Khyber Sr # Country Name of Bank Sr# Country 38 MONACO BANQUE J. SAFRA SARASIN (MONACO) SA 46 POLAND 39 NETHERLANDS COMMERZBANK AG KANTOOR AMSTERDAM HABIB BANK LTD. DANSKE BANK A/S S.A. ODZIAL W POLSCE (only when Applicant/Bene is customer of Danske Bank) 47 QATAR DOHA BANK MASHREQ BANK UNITED BANK LIMITED, DOHA 48 REPUBLIC OF KOREA AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED ING BANK N.V. INTESA SANPAOLO BANK LUXEMBOURG Name of Bank BUSAN BANK INDUSTRIAL BANK OF KOREA 40 NEW ZEALAND ANZ BANK NEW ZEALAND LIMITED 41 NORWAY DANSKE BANK A/S (only when Applicant/Bene is customer of Danske Bank) KEB HANA BANK 42 OMAN BANK SOHAR S.A.O.G HABIB BANK OMAN 43 PAKISTAN ALBARAKA BANK (PAKISTAN)LIMITED MIZUHO BANK, LTD., SEOUL BRANCH (only when Applicant/Bene is customer of Mizuho Bank) MUFG BANK, LTD., SEOUL BRANCH NATIONAL BANK OF PAKISTAN, SEOUL BRANCH KOREA SHINHAN BANK SUHYUP BANK KOOKMIN BANK ALLIED BANK LIMITED ASKARIBANK LIMITED BANK AL HABIB LIMITED BANK ALFALAH LIMITED THE BANK OF NEW YORK MELLON, SEOUL BRANCH U.B.A.F.-UNION DE BANQUES ARABES ET FRANCAISES WELLS FARGO BANK, N.A., SEOUL BRANCH BANKISLAMI PAKISTAN LIMITED DEUTSCHE BANK AG, KARACHI BRANCH FAYSAL BANK LIMITED HABIB BANK LIMITED WOORI BANK, SEOUL 49 RUSSIAN FEDERATION 50 SAMOA AO WOORI BANK COMMERZBANK (EURASIJA) AO DANSKE BANK RUSSIA (only when Applicant/Bene is customer of Danske Bank) ANZ BANK (SAMOA) LTD 51 SAUDI ARABIA BANK AL-JAZIRA HABIB METROPOLITAN BANK LIMITED INDUSTRIAL AND COMMERCIAL BANK OF CHINA, KARACHI BRANCH JS BANK LIMITED MCB BANK LIMITED MCB ISLAMIC BANK LIMITED NATIONAL BANK OF PAKISTAN MEEZAN BANK LIMITED NATIONAL COMMERCIAL BANK, THE NATIONAL BANK OF PAKISTAN SILKBANK LIMITED SINDH BANK LIMITED SONERI BANK LIMITED RIYAD BANK 52 SEYCHELLES BANK AL HABIB LIMITED 53 SINGAPORE ABN AMRO BANK N.V. SINGAPORE BRANCH AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED BANK MANDIRI (PERSERO)TBK. PT COMMERZBANK AG, SINGAPORE BRANCH HSH NORDBANK AG SUMMIT BANK LTD THE BANK OF PUNJAB UNITED BANK LIMITED 44 PAPUA NEW GUINEA AUSTRALIA AND NEW ZEALAND BANKING GROUP (PNG) LTD. 45 PHILIPPINES AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED MIZUHO BANK, LTD. SINGAPORE BRANCH (only when Applicant/Bene is customer of Mizuho Bank) MUFG BANK, LTD. THE BANK OF NEW YORK MELLON, SINGAPORE BRANCH TORONTO DOMINION BANK MIZUHO BANK, LTD., MANILA BRANCH (only when Applicant/Bene is customer of Mizuho Bank) MUFG BANK, LTD., MANILA BRANCH 126 ANNUAL REPORT 2018
  128. The Bank of Khyber Sr # Country Name of Bank Sr# Country U.B.A.F. - UNION DE BANQUES ARABES ET FRANCAISES LLOYDS BANK PLC MASHREQ BANK PSC WELLS FARGO BANK, NA MIZUHO BANK, LTD. LONDON BRANCH (only when Applicant/Bene is customer of Mizuho Bank) WOORI BANK, SINGAPORE 54 SLOVAKIA 55 56 SOLOMON ISLANDS AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED SOUTH AFRICA HBZ BANK LIMITED 57 SPAIN 58 SRI LANKA NORTHERN BANK LIMITED (TRADING AS DANSKE BANK) SHINHAN BANK LONDON BRANCH COMMERZBANK AG THE BANK OF NEW YORK MELLON WELLS FARGO BANK, N.A., LONDON BRANCH ABANCA CORPORACION BANCARIA, S.A. COMMERZBANK AG HABIB BANK LTD. WOORI BANK, LONDON 68 USA HATTON NATIONAL BANK PLC SAMPATH BANK PLC 59 SWEDEN DANSKE BANK (only when Applicant/Bene is customer of Danske Bank) 60 SWITZERLAND HABIB BANK AG ZURICH ZUERCHER KANTONALBANK TAIWAN ANZ BANK (TAIWAN) LIMITED MIZUHO BANK, LTD.,TAIPEI BRANCH MUFG BANK, LTD., TAIPEI BRANCH THE BANK OF NEW YORK MELLON, TAIPEI BRANCH WELLS FARGO BANK, N.A., TAIPEI BRANCH 62 THAILAND 63 TIMOR-LESTE 64 65 TONGA TURKEY BANK OF AYUDHYA PUBLIC COMPANY LIMITED, BANGKOK OFFICE MIZUHO BANK, LTD., BANGKOK BRANCH (only when Applicant/Bene is customer of Mizuho Bank) AUSTRALIA AND NEW ZEALAND BANKING GROUP LTD ANZ BANKING GROUP LIMITED AKBANK T.A.S. WELLS FARGO BANK, N.A. WOORI AMERICA BANK, NEW YORK WOORI BANK, LOS ANGELES WOORI BANK, NEW YORK 69 VANUATU 70 VIET NAM AKTIF YATIRIM BANKASI A.S. UAE ANZ BANK (VANUATU) LTD ANZ BANK(VIETNAM) LIMITED MIZUHO BANK, LTD. (only when Applicant/Bene is customer of Mizuho Bank) SHINHAN BANK VIETNAM LIMITED WOORI BANK VIETNAM LIMITED HABIB BANK LTD. 66 AUSTRALIA AND NEW ZEALAND BANKING GROUP LTD. BRANCH BANKING AND TRUST COMPANY COMMERZBANK AG DEUTSCHE BANK AG DEUTSCHE BANK TRUST COMPANY AMERICAS FIRST TENNESSEE BANK N.A. GOLDEN BANK, N.A. HABIB AMERICAN BANK HABIB BANK LIMITED MASHREQBANK PSC., NEW YORK BRANCH MIZUHO BANK, LTD. NEW YORK BRANCH (only when Applicant/Bene is customer of Mizuho Bank) NATIONAL BANK OF PAKISTAN SHINHAN BANK SHINHAN BANK AMERICA THE BANK OF NEW YORK MELLON WELLS FARGO ADVISORS, LLC UBL (SWITZERLAND) AG 61 Name of Bank ABU DHABI COMMERCIAL BANK HABIB BANK AG ZURICH HABIB BANK LIMITED MASHREQBANK PSC. MCB BANK LIMITED 67 UK UNITED BANK LTD. AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED BANK J. SAFRA SARASIN (GIBRALTAR) LTD COMMERZBANK AG DANSKE BANK (only when Applicant/Bene is customer of Danske Bank) HABIB BANK UK HABIB BANK ZURICH PLC 127 ANNUAL REPORT 2018
  129. The Bank of Khyber Form of proxy Folio No .___________ CDC Par cipant Iden ty card No. ________________________CDC A/C No._________ I/We ______________________________________ of ____________________________________a member/ members of The Bank of khyber, and holder of ________________________________________shares do hereby appoint-______________________________________ of ___________________________________ or failing him / her ______________________________________ of ____________________________________________who is also a member of the company, vide Registered Folio No. ________________________________as my/ our proxy to a end, speak and vote for me /us and on my/our behalf at the 28th Annual General Mee ng of the Bank to be held on Thursday March 28, 2019 at 10:30 a.m at Pearl Con nental Hotel, Peshawar Can . As witness my/our hand this ______ ___________day of ____________________________2019. Signature Five-Rupees Revenue Stamp Dated Place: The Signature should agree with the Specimen registered with the Bank Notes A. General 1. A member en tled to a end and vote at a General Mee ng is en tled to appoint a proxy to a end and vote instead him/her. No person shall act as a proxy, who is not a member of the bank except that Government of Pakistan /Provincial Government/State Bank of Pakistan/Corpora on may appoint a person who is not a member. 2. The instrument appoin ng a proxy should be signed by the member of his/ her a orney duly authorized in wri ng. If the member is a corpora on(other that Government of Pakistan and State Bank of Pakistan), its common seal should be affixed on the instrument. 3. The instrument appoin ng a proxy, together with the Power of A orney, if any, under which it is signed or a na onally cer fied copy thereof, should be deposited, with our Registrar/Transfer Agents, Messrs THK Associates (Pvt) Ltd. 1st Floor, 40-C, Block-6, P.E.C.H.S.Karachi-75400 Pakistan, not less than 48 hours before the me of holding mee ng. 4. If a member appoints more than one proxy, and more than one instrument of proxy are deposited by a member with the Bank, all such instruments of proxy shall be rendered invalid. B. 1. 2. 3. 4. For CDC Account Holders The proxy form shall be witnessed by two persons whose names, addresses and CNIC number shall be men ons on the form. A ested copies of CNIC or the passport of the beneficial owners and proxy shall be furnished with the proxy form. The proxy shall produce his/her original CNIC or original passport at the me of the mee ng. In case of Government of Pakistan /Provincial Goverment / State Bank of Pakistan/Corporate entry, the Board of Director’s resolu on/power of a orney with specimen signature shall be submi ed along with proxy to the Bank. 128 ANNUAL REPORT 2018