Meezan Bank: Unconsolidated Condensed Interim Financial Statements - March 31, 2017

Transcription

1. In the name of Allah The Beneficent The Merciful CONTENTS Corporate Information 03 Directors ’ Review 04 Unconsolidated Condensed Interim Statement of Financial Position 08 Unconsolidated Condensed Interim Profit and Loss Account 09 Unconsolidated Condensed Interim Statement of Comprehensive Income 10 Unconsolidated Condensed Interim Cash Flow Statement 11 Unconsolidated Condensed Interim Statement of Changes in Equity 12 Notes to and Forming Part of the Unconsolidated Condensed Interim Financial Information 13 Consolidated Condensed Interim Statement of Financial Position 31 Consolidated Condensed Interim Profit and Loss Account 32 Consolidated Condensed Interim Statement of Comprehensive Income 33 Consolidated Condensed Interim Cash Flow Statement 34 Consolidated Condensed Interim Statement of Changes in Equity 35 Notes to and Forming Part of the Consolidated Condensed Interim Financial Information 36 01
3. C O R P O R ATE I N F O R M ATI O N Riyadh S . A. A. Edrees Faisal A. A. A. Al-Nassar Bader H. A. M. A. Al-Rabiah Mansur Khan Alaa A. Al-Sarawi Syeda Azra Mujtaba Muhammad Zarrug Rajab Mohammad Abdul Aleem Noorur Rahman Abid Talal S. A. Al-Shehab Irfan Siddiqui Ariful Islam Chairman Vice Chairman Shariah Supervisory Board Justice (Retd.) Muhammad Taqi Usmani Sheikh Esam Mohamed Ishaq Dr. Muhammad Imran Ashraf Usmani Chairman Board Audit Committee Mohammad Abdul Aleem Noorur Rahman Abid Alaa A. Al-Sarawi Muhammad Zarrug Rajab Board Risk Management Committee Faisal A. A. A. Al-Nassar Syeda Azra Mujtaba Ariful Islam Board Human Resource & Remuneration Committee Riyadh S. A. A. Edrees Noorur Rahman Abid Irfan Siddiqui Resident Shariah Board Member Dr. Muhammad Imran Ashraf Usmani Company Secretary Muhammad Sohail Khan Auditors EY Ford Rhodes Registered Office and Head Office Meezan House C-25, Estate Avenue, SITE, Karachi - 75730, Pakistan Phone: (9221) 38103500, Fax: (9221) 36406049 24/7 Call Centre: 111-331-331 & 111-331-332 E-mail info@meezanbank.com Website www.meezanbank.com www.meezanbank.pk Shares Registrar THK Associates (Pvt.) Ltd 1st Floor, 40-C, Block 6, P.E.C.H.S., Karachi - 75400, Pakistan. Phone: (9221) 111-000-322, Fax: (9221) 34168271 Board of Directors President & CEO Deputy CEO & Executive Director 03
4. DIRECTORS ’ R E V I E W The Board of Directors is pleased to present the condensed interim unaudited financial statements of Meezan Bank Limited and consolidated financial statements for the quarter ended March 31, 2017. The financial highlights of Meezan Bank are given below: Financial Highlights Rupees in millions Statement of Financial Position March 31, December 31, 2017 2016 Growth % Investments/Placements under Bai Muajjal - Sovereign Investments/Placements under Bai Muajjal - Others 98,838 167,197 135,302 123,969 -27% 35% Islamic financing and related assets - net 312,825 311,530 0% Total Assets 657,233 657,767 0% Deposits 551,367 564,024 -2% 7,000 7,000 0% 28,407 28,149 1% Sub-ordinated Sukuk (Tier II) Shareholders' Equity Rupees in millions Profit & Loss Account Jan - Mar 2017 Jan - Mar 2016 Growth % Net spread earned before provisions 4,747 4,242 12% Fee and commission income 1,049 626 68% Operating income 6,397 5,733 12% (4,068) 1,512 (3,675) 1,337 11% 13% Earnings per share - Rupees 1.51 1.33 13% Number of branches 571 551 4% Administrative and other expenses Profit after tax By the Grace of Allah, Meezan Bank has maintained its growth momentum and recorded good results for the first quarter ended March 31, 2017. Profit after tax increased by 13%, to Rs 1,512 million from Rs 1,337 million in corresponding period last year, primarily due to growth in earning assets. It is heartening to note that the Bank’s gross return earned increased by 11% despite lower discount rate. The Bank’s net spread before provision increased by 12% primarily due to increase in financings portfolio and lower cost of funds due to improved CASA mix that now stands at 76% of total deposits. The Bank continued to enhance its exposure in financings in all sectors while simultaneously ensuring all the risk parameters are met. The Bank has one of the lowest ratio of non-performing financings of 2% as against an average of 10% for the banking industry which reflects the high quality financing portfolio of the Bank. The Bank’s provision against its non-performing financing portfolio is at a very comfortable level with a coverage ratio of 120%. You will be happy to note that fee and commission income of the Bank grew by 68% over the corresponding period last year. The trade business volume handled by the Bank grew by 37% to Rs 165 billion as against Rs 121 billion in the corresponding period of last year. 04
5. DIRECTORS ’ R E V I E W The availability of Government of Pakistan (GoP) Ijarah Sukuk to deploy surplus liquidity continues to be a challenge for Islamic Banks. There has been no new issue of GoP Ijarah Sukuk since March 2016 which has negatively impacted the Islamic banking industry in Pakistan. Despite the Bank’s aggressive branch expansion approach and rising cost of doing business, the growth in administrative and operating expenses was curtailed to 11% which increased to Rs 4 billion from Rs 3.7 billion. The focus is to achieve cost optimization through process efficiency and increasing productivity in all the areas of operations. The rise in expenses is primarily due to increase in staff expenses, rent and costs associated with new branches - an investment which has reaped fruits for the Bank, as is evident from the strong growth in deposits and profits over the years. The Bank maintained its position as the leading Islamic bank in Pakistan (amongst both Islamic as well as conventional banks) with a branch network of 571 branches in 146 cities. The Bank disbursed final cash dividend of 12.5% (Rs 1.25 per share) to shareholders during the quarter, which was approved in the last Board meeting held on February 15, 2017. The Bank has maintained unbroken payout record since the Bank’s listing on Stock Exchange in the year 2000. The JCR-VIS Credit Rating Company Limited, an affiliate of Japan Credit Rating Agency, Japan has reaffirmed Bank’s long-term entity rating at AA (Double A) and short term rating at A1+ (A One Plus) with stable outlook. The short term rating of A1+ is the highest standard in short term rating. The rating indicates sound performance indicators of the Bank. Islamic Banking is growing in Pakistan at a rapid pace and we are thankful to the State Bank of Pakistan and the Ministry of Finance for the support given in developing the Islamic Banking industry. One of the issues being faced by the industry is the shortage of GoP Ijarah Sukuk available to Islamic Banks so that they may meet the Statutory Liquidity requirements required by law and also deploy surplus liquidity. We are hopeful that with the efforts of the Ministry of Finance, SBP’s Islamic Banking Department and Implementation Committee for promotion of Islamic Banking, there will be new Sukuk issues during the year. The Board would like to express its sincere thanks and gratitude to the State Bank of Pakistan, the Securities and Exchange Commission of Pakistan and our Shariah Supervisory Board for their continued guidance and support. We also take this opportunity to thank our valued customers for their patronage, the shareholders and holders of Sub-ordinated Sukuk (Tier II) for their continued support and to the staff for their continuous efforts to make Meezan Bank a success. May Allah Almighty give us the strength and wisdom to further expand our vision of making Islamic banking as banking of first choice. On behalf of the Board Riyadh S.A.A. Edrees Chairman Irfan Siddiqui President & CEO Karachi: April 19, 2017 05
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8. UNCONSOLIDATED CONDENSED INTERIM STATEMENT OF FINANCIAL POSITION AS AT MARCH 31 , 2017 Note March 31, 2017 (Unaudited) December 31, 2016 (Audited) Rupees in '000 ASSETS Cash and balances with treasury banks Balances with other banks Due from financial institutions Investments - net Islamic financing and related assets - net Operating fixed assets Deferred tax asset Other assets - net 7 8 9 10 11 12 56,266,818 3,564,249 142,288,057 123,747,489 312,824,629 9,036,470 9,504,789 657,232,501 56,036,849 12,021,351 129,115,165 130,156,297 311,530,270 8,924,328 9,982,837 657,767,097 11,245,311 41,427,191 551,366,641 7,000,000 900,103 15,112,071 627,051,317 30,181,184 9,130,998 32,005,501 564,023,853 7,000,000 1,362,909 13,770,218 627,293,479 30,473,618 10,027,379 10,002,036 8,377,989 28,407,404 10,027,379 9,699,685 8,422,009 28,149,073 1,773,780 30,181,184 2,324,545 30,473,618 LIABILITIES Bills payable Due to financial institutions Deposits and other accounts Sub-ordinated Sukuk Deferred tax liabilities Other liabilities 13 14 NET ASSETS REPRESENTED BY Share capital Reserves Unappropriated profit 15 Surplus on revaluation of investments - net of tax CONTINGENCIES AND COMMITMENTS 16 The annexed notes 1 to 25 form an integral part of this unconsolidated condensed interim financial information. Riyadh S. A. A. Edrees Chairman Irfan Siddiqui President & Chief Executive Faisal A. A. A. Al-Nassar Director Mansur Khan Director 08
9. UNCONSOLIDATED CONDENSED INTERIM PROFIT AND LOSS ACCOUNT (UNAUDITED) FOR THE QUARTER ENDED MARCH 31, 2017 Note Quarter ended March 31, 2017 Quarter ended March 31, 2016 Rupees in '000 Profit / return earned on Islamic financing and related assets, investments and placements Profit on deposits and other dues expensed Net spread earned Provision / (reversal of provision) against non-performing islamic financing and related assets - net Provision / (reversal of provision) against diminution in the value of investments Bad debts written off directly 17 18 8,324,714 3,577,420 4,747,294 7,466,775 3,225,177 4,241,598 11.8 10.3 22,181 36,097 58,278 4,689,016 (132,251) (26,466) (158,717) 4,400,315 1,048,865 38,540 162,945 371,384 85,915 1,707,649 6,396,665 626,405 112,360 264,976 269,806 59,084 1,332,631 5,732,946 4,027,977 (5,072) 480 45,001 4,068,386 2,328,279 2,328,279 3,632,086 767 65 41,785 3,674,703 2,058,243 2,058,243 982,766 (166,240) 816,526 1,511,753 527,476 194,072 721,548 1,336,695 Net spread after provisions OTHER INCOME Fee, commission and brokerage income Dividend income Income from dealing in foreign currencies Capital gain on sale of investments - net Other income Total other income OTHER EXPENSES Administrative expenses Other (reversal of provisions) / provisions Other charges Workers Welfare Fund Total other expenses Extraordinary / unusual items PROFIT BEFORE TAXATION Taxation - Current - Deferred PROFIT AFTER TAXATION Rupees Basic and diluted earnings per share 19 1.51 1.33 The annexed notes 1 to 25 form an integral part of this unconsolidated condensed interim financial information. Riyadh S. A. A. Edrees Chairman Irfan Siddiqui President & Chief Executive Faisal A. A. A. Al-Nassar Director Mansur Khan Director 09
10. UNCONSOLIDATED CONDENSED INTERIM STATEMENT OF COMPREHENSIVE INCOME (UNAUDITED) FOR THE QUARTER ENDED MARCH 31, 2017 Quarter ended March 31, 2017 Quarter ended March 31, 2016 Rupees in '000 1,511,753 Profit after taxation for the quarter - Other comprehensive income 1,336,695 - Comprehensive income transferred to 1,511,753 1,336,695 (847,331) (346,049) Deferred tax on revaluation of investments 296,566 121,117 Total comprehensive income for the quarter 960,988 1,111,763 statement of changes in equity Components of comprehensive income not transferred to equity Items that may be reclassified to profit and loss account Deficit on revaluation of investments The annexed notes 1 to 25 form an integral part of this unconsolidated condensed interim financial information. Riyadh S. A. A. Edrees Chairman Irfan Siddiqui President & Chief Executive Faisal A. A. A. Al-Nassar Director Mansur Khan Director 10
11. UNCONSOLIDATED CONDENSED INTERIM C AS H F LOW STATE M ENT ( U N AUDI TE D) FOR THE QUARTER ENDED MARCH 31, 2017 Note Quarter ended March 31, 2017 Quarter ended March 31, 2016 Rupees in '000 CASH FLOWS FROM OPERATING ACTIVITIES 2,328,279 (38,540) 2,289,739 2,058,243 (112,360) 1,945,883 355,687 40,262 322,268 38,718 22,181 36,097 (21,712) 432,515 2,722,254 (132,251) (26,466) (21,088) 181,181 2,127,064 (13,172,892) (1,316,540) 491,071 (13,998,361) 25,006,315 6,454,157 2,546,083 34,006,555 2,114,313 9,421,690 (12,657,212) 866,864 (254,345) (11,530,452) (748,206) (12,278,658) 2,215,383 8,743,191 (2,910,721) 1,248,565 9,296,418 45,430,037 (626,338) 44,803,699 5,525,380 25,517 (529,265) 42,886 5,064,518 (47,257,665) 90,020 (390,211) 35,595 (47,522,261) CASH FLOWS FROM FINANCING ACTIVITIES Dividend paid Net cashflow used in financing activities (1,012,993) (1,012,993) (1,007,176) (1,007,176) Net decrease in cash and cash equivalents Cash and cash equivalents at the beginning of the quarter Cash and cash equivalents at the end of the quarter (8,227,133) 68,058,200 59,831,067 (3,725,738) 54,860,696 51,134,958 Profit before taxation Less: Dividend income Adjustments for non-cash charges Depreciation Amortization Provision / (reversal of provision) against non-performing islamic financing and related assets - net Provision / (reversal of provision) against diminution in the value of investments Gain on sale of operating fixed assets (Increase) / decrease in operating assets Due from financial institutions Islamic financing and related assets Other assets - net Increase / (decrease) in operating liabilities Bills payable Due to financial institutions Deposits and other accounts Other liabilities Income tax paid Net cash (used in) / generated from operating activities CASH FLOWS FROM INVESTING ACTIVITIES Net investment in securities Dividends received Investments in operating fixed assets Proceeds from disposal of operating fixed assets Net cashflow generated from / (used in) investing activities 20 The annexed notes 1 to 25 form an integral part of this unconsolidated condensed interim financial information. Riyadh S. A. A. Edrees Chairman Irfan Siddiqui President & Chief Executive Faisal A. A. A. Al-Nassar Director Mansur Khan Director 11
12. UNCONSOLIDATED CONDENSED INTERIM STATEMENT OF CHANGES IN EQUITY ( UN AU DI TE D) FOR THE QUARTER ENDED MARCH 31, 2017 Capital reserves Share capital Statutory Non -Distributable reserve * Capital Reserve Gain on Bargain Purchase Revenue reserve General reserve Unappropriated profit Total Rupees in '000 10,027,379 Balance as at January 1, 2016 5,403,050 3,117,547 66,766 6,942,042 25,556,784 Total comprehensive income for the quarter Profit after taxation for the quarter ended March 31, 2016 - - - - 1,336,695 1,336,695 Final cash dividend for the year 2015 - - - - (1,253,422) (1,253,422) Transfer to statutory reserve - - - (267,339) Transactions with owners recognised directly in equity 267,339 10,027,379 5,670,389 3,117,547 Profit after taxation for the nine months period ended December 31, 2016 - - - - 4,224,916 4,224,916 Remeasurement gain on defined benefit plan - net of tax - - - - 38,891 38,891 Interim cash dividend for the year 2016 - - - - (1,754,791) (1,754,791) Transfer to statutory reserve - - - (844,983) Balance as at March 31, 2016 66,766 - 6,757,976 25,640,057 Total comprehensive income for the period Transactions with owners recognised directly in equity 844,983 10,027,379 6,515,372 3,117,547 - - - - 1,511,753 1,511,753 Final cash dividend for the year 2016 - - - - (1,253,422) (1,253,422) Transfer to statutory reserve - - - (302,351) Balance as at December 31, 2016 66,766 - 8,422,009 28,149,073 Total comprehensive income for the quarter Profit after taxation for the quarter ended March 31, 2017 Transactions with owners recognised directly in equity Balance as at March 31, 2017 10,027,379 302,351 6,817,723 3,117,547 66,766 - 8,377,989 28,407,404 * This represents reserve created under section 21(i)(a) of the Banking Companies Ordinance, 1962. The annexed notes 1 to 25 form an integral part of this unconsolidated condensed interim financial information. Riyadh S. A. A. Edrees Chairman Irfan Siddiqui President & Chief Executive Faisal A. A. A. Al-Nassar Director Mansur Khan Director 12
13. NOTES TO AND FORMING PART OF THE UNCONSOLIDATED CONDENSED INTERIM F I N A N C I A L I N F O R M AT I O N ( U N A U D I T E D ) FOR THE QUARTER ENDED MARCH 31, 2017 1 LEGAL STATUS AND NATURE OF BUSINESS 1.1 Meezan Bank Limited (the Bank) was incorporated in Pakistan on January 27, 1997, as a public limited company under the Companies Ordinance, 1984, and its shares are quoted on the Karachi Stock Exchange (now "Pakistan Stock Exchange"). The Bank was registered as an ‘Investment Finance Company’ on August 8, 1997, and carried on the business of investment banking as permitted under SRO 585(I)/87 dated July 13, 1987, in accordance and in conformity with the principles of Islamic Shariah. The ‘Certificate of Commencement of Business' was issued to the Bank on September 29, 1997. 1.2 The Bank was granted a ‘Scheduled Islamic Commercial Bank’ license on January 31, 2002, and formally commenced operations as a Scheduled Islamic Commercial Bank with effect from March 20, 2002, on receiving notification in this regard from the State Bank of Pakistan (SBP) under section 37 of the State Bank of Pakistan Act, 1956. Currently, the Bank is engaged in corporate, commercial, consumer, investment and retail banking activities. 1.3 The Bank was operating through five hundred and seventy one branches as at March 31, 2017 (December 31, 2016: five hundred and seventy one branches). Its registered office is situated at Meezan House, C-25, Estate Avenue, SITE, Karachi, Pakistan. 1.4 Based on the financial statements of the Bank for the year ended December 31, 2015, the JCR-VIS Credit Rating Company Limited has reaffirmed the Bank's long-term rating as 'AA' and the shortterm rating as 'A1+' with stable outlook. 2 BASIS OF PRESENTATION The Bank provides Islamic financing and related assets mainly through Murabaha, Istisna, Tijarah, Ijarah, Musharakah, Diminishing Musharakah, Running Musharakah, Bai Muajjal, Musawammah, Export Refinance under Islamic Export Refinance Scheme and Service Ijarah. The purchases and sales arising under these arrangements are not reflected in this unconsolidated condensed interim financial information as such but are restricted to the amount of facility actually utilised and the appropriate portion of profit thereon. The income on such Islamic financing is recognised in accordance with the principles of the Islamic Shariah. However, income, if any, received which does not comply with the principles of the Islamic Shariah is recognised as charity payable, if so directed by the Shariah Advisor of the Bank. 3 STATEMENT OF COMPLIANCE 3.1 This unconsolidated condensed interim financial information has been prepared in accordance with the approved accounting standards as applicable in Pakistan. Approved accounting standards comprise of such International Financial Reporting Standards (IFRSs) issued by the International Accounting Standards Board and Islamic Financial Accounting Standards (IFASs) issued by the Institute of Chartered Accountants of Pakistan, as are notified under the Companies Ordinance, 1984, provisions of and directives issued under the Companies Ordinance, 1984, the Banking Companies Ordinance, 1962, and the directives issued by the SECP and the SBP. Wherever the requirements of provisions and directives issued under the Companies Ordinance, 1984, the Banking Companies Ordinance, 1962, the IFAS notified under the Companies Ordinances, 1984 and the directives issued by the SECP and the SBP differ from the requirements of IFRS, the provisions of and the directives issued under the Companies Ordinance, 1984, the Banking Companies Ordinance, 1962, IFAS notified under the Companies Ordinance, 1984 and the directives issued by the SECP and the SBP shall prevail. 13
14. NOTES TO AND FORMING PART OF THE UNCONSOLIDATED CONDENSED INTERIM F I N A N C I A L I N F O R M AT I O N ( U N A U D I T E D ) FOR THE QUARTER ENDED MARCH 31, 2017 3.2 The disclosures made in this unconsolidated condensed interim financial information have been limited based on the format prescribed by the SBP through BSD Circular Letter No. 2 dated May 12, 2004 and the requirements of International Accounting Standard 34, "Interim Financial Reporting". They do not include all of the information required for a full set of annual financial statements and this condensed interim unconsolidated financial information should be read in conjunction with the annual financial statements of the Bank for the year ended December 31, 2016. 3.3 Standards, interpretations and amendments to published approved accounting standards that are effective in the current period There are certain new and amended standards and interpretations that are mandatory for the Bank's accounting periods beginning on or after January 1, 2017 but are considered not to be relevant or do not have any significant effect on the Bank's operations and therefore not detailed in this unconsolidated condensed interim financial information. 4 BASIS OF MEASUREMENT 4.1 This unconsolidated condensed interim financial information has been prepared under the historical cost convention except that certain investments, foreign currency balances and commitments in respect of certain foreign exchange contracts have been marked to market and carried at fair value in accordance with the requirements of the SBP. In addition, obligation in respect of staff retirement benefit is carried at present value. 4.2 Functional and presentation currency This unconsolidated condensed interim financial information has been presented in Pakistani Rupee, which is the Bank's functional and presentation currency. 4.3 Rounding off Figures have been rounded off to the nearest thousand rupees unless otherwise stated. 5 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS The basis and the methods used for critical accounting estimates and judgments adopted in this unconsolidated condensed interim financial information are same as those applied in the preparation of the annual financial statements of the Bank for the year ended December 31, 2016. 6 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accounting policies and the methods of computation adopted in the preparation of this unconsolidated condensed interim financial information are the same as those applied in the preparation of the annual financial statements of the Bank for the year ended December 31, 2016. 14
15. NOTES TO AND FORMING PART OF THE UNCONSOLIDATED CONDENSED INTERIM F I N A N C I A L I N F O R M AT I O N ( U N A U D I T E D ) FOR THE QUARTER ENDED MARCH 31, 2017 Note 7 CASH AND BALANCES WITH TREASURY BANKS December 31, 2016 (Audited) Rupees in '000 In hand - local currency - foreign currencies With the State Bank of Pakistan in - local currency current accounts - foreign currency current accounts March 31, 2017 (Unaudited) 7.1 7.1 With National Bank of Pakistan in - local currency current accounts 17,510,879 2,241,552 14,725,026 2,159,517 24,452,400 3,259,729 20,323,435 3,138,134 8,802,258 56,266,818 15,690,737 56,036,849 7.1 These represent local and foreign currency amounts required to be maintained by the Bank with the SBP as stipulated by the SBP. These accounts are non-remunerative in nature. Note 8 BALANCES WITH OTHER BANKS December 31, 2016 (Audited) Rupees in '000 In Pakistan - in current accounts - in deposit accounts / term deposit receipts Outside Pakistan - in current accounts - in deposit accounts March 31, 2017 (Unaudited) 8.1 2,441,734 - 2,000,041 9,000,000 943,706 178,809 3,564,249 814,335 206,975 12,021,351 8.1 The return on these balances is around 0.28% (December 31, 2016: 0.28%) per annum. Note 9 Commodity Murabaha Provision against non-performing amounts due from financial institutions December 31, 2016 (Audited) Rupees in '000 DUE FROM FINANCIAL INSTITUTIONS Bai Muajjal: With Scheduled banks / other financial institutions - Secured With State Bank of Pakistan With Scheduled banks March 31, 2017 (Unaudited) 9.1 142,288,057 15,500 142,303,557 77,829,747 31,413,175 19,887,743 129,130,665 26,066 142,329,623 26,066 129,156,731 (41,566) 142,288,057 (41,566) 129,115,165 15
16. NOTES TO AND FORMING PART OF THE UNCONSOLIDATED CONDENSED INTERIM F I N A N C I A L I N F O R M AT I O N ( U N A U D I T E D ) FOR THE QUARTER ENDED MARCH 31, 2017 9.1 These carry average return of 5.76% per annum (December 31, 2016: 5.75% per annum) and are due to mature on various dates ranging between June 2017 to March 2018 (December 31, 2016: January 2017 to December 2017). 10 INVESTMENTS - NET Note March 31, 2017 (Unaudited) December 31, 2016 (Audited) Held by Given as Total Held by Given as Total the bank collateral the bank collateral * Rupees in '000 10.1 Investments by types 91,545,235 Available for sale securities * - 91,545,235 96,995,615 - 96,995,615 ** Held to maturity securities 28,000,000 - 28,000,000 28,000,000 - 28,000,000 63,050 - 63,050 63,050 - 63,050 1,827,120 - 1,827,120 1,902,120 - 1,902,120 121,435,405 - 121,435,405 126,960,785 - 126,960,785 (416,809) - (416,809) (380,712) - (380,712) 121,018,596 - 121,018,596 126,580,073 - 126,580,073 2,728,893 - 2,728,893 3,576,224 - 3,576,224 123,747,489 - 123,747,489 130,156,297 - 130,156,297 In related parties Subsidiary (unlisted) Associates (listed) Investments at cost / carrying value Less: Provision against diminution in value of investments Investments - net of provision 10.3 Surplus on revaluation of available for sale securities Total investments * This includes investment in sukuk of PIA amounting to Rs 1.5 billion. The SBP has allowed relaxation to all the participant banks upto 30 June 2017 from classification and provisioning against such sukuk in terms of prudential regulations. These sukuk are guaranteed by the Government of Pakistan. 16
17. NOTES TO AND FORMING PART OF THE UNCONSOLIDATED CONDENSED INTERIM F I N A N C I A L I N F O R M AT I O N ( U N A U D I T E D ) FOR THE QUARTER ENDED MARCH 31, 2017 Note March 31, 2017 (Unaudited) 10.2 Investments by segments December 31, 2016 (Audited) Rupees in '000 Federal Government Securities GOP Ijarah Sukuk 92,775,469 96,937,287 Sukuk certificates / bonds Sukuk Certificates Global Sukuk Bonds 15,820,471 6,353,684 16,090,897 7,543,519 3,691,487 3,519,788 63,050 854,124 63,050 854,124 1,827,120 50,000 1,902,120 50,000 121,435,405 (416,809) 121,018,596 2,728,893 123,747,489 126,960,785 (380,712) 126,580,073 3,576,224 130,156,297 Fully paid up ordinary shares Listed companies Unlisted companies - subsidiary - others Units of open end funds - associates - others Total investment at cost / carrying value Less: Provision against diminution in the value of investments Investments (net of provision) Surplus on revaluation of available for sale securities Total investments 10.3 10.3 Provision for diminution in value of investments March 31, 2017 (Unaudited) Associates Others Total December 31, 2016 (Audited) Associates Others Total Rupees in '000 Opening balance - Charge / (reversal) for the quarter / year - on associates (unlisted) - On available for sale securities - charge for the quarter / year - reversals for the quarter / year - 380,712 43,027 (6,930) 36,097 380,712 24,514 - 3,611 - 3,611 33,840 (102,124) (68,284) 43,027 (6,930) 36,097 420,871 445,385 3,611 33,840 (102,124) (64,673) * Transfers - Closing balance - 416,809 416,809 (28,125) - 28,125 380,712 380,712 17
18. NOTES TO AND FORMING PART OF THE UNCONSOLIDATED CONDENSED INTERIM F I N A N C I A L I N F O R M AT I O N ( U N A U D I T E D ) FOR THE QUARTER ENDED MARCH 31, 2017 Note 11 ISLAMIC FINANCING AND RELATED ASSETS - NET December 31, 2016 (Audited) Rupees in '000 In Pakistan - Murabaha financing 11.1 - Advances against Murabaha - Murabaha inventory - Financing under Islamic Export Refinance - Murabaha 11.2 - Advances against future Islamic Export Refinance - Murabaha - Net investment in Ijarah - Net book value of assets / investment in Ijarah under IFAS-2 11.3 - Advances against future Ijarah - Diminishing Musharakah financing - Housing - Diminishing Musharakah financing - Others - Advances against Diminishing Musharakah - Running Musharakah financing - Financing under Islamic Export Refinance - Running Musharakah - Musharakah financing - Wakalah Tul Istithmar - Advances against Wakalah Tul Istithmar - Istisna financing - Advances against Istisna - Istisna inventory - Financing under Islamic Export Refinance - Istisna - Advances against Islamic Export Refinance - Istisna - Financing under Islamic Export Refinance - Istisna - Inventory - Tijarah financing - Tijarah inventory - Financing under Islamic Export Refinance - Tijarah - Financing under Islamic Export Refinance - Tijarah - Inventory - Musawammah financing - Musawammah Inventory - Advances against Musawammah - Financing under Islamic Export Refinance - Musawammah - Advances against Islamic Export Refinance - Musawammah - Islamic Export Refinance - Musawammah - Inventory - Bai Muajjal financing - Advances against future Service Ijarah - Labbaik (Qard for Hajj and Umrah) - Financing against bills - Salam - Financing against bills - Murabaha - Advance - Advances against Salam financing - Staff financing - Other financing Gross Islamic financing and related assets Less: Provision against non-performing Islamic financing and related assets Islamic financing and related assets - net of provisions March 31, 2017 (Unaudited) 11.6 11.4 11.5 11.8 7,123,785 2,082,030 2,677,659 560,852 45,582 145,961 23,080,214 23,226,175 4,228,676 9,931,568 79,772,318 9,953,753 64,168,159 9,818,000 746,640 12,750,000 10,000,000 4,432,482 31,788,577 2,177,963 212,235 1,445,166 5,407,463 818,202 8,814,193 198,395 390,395 5,883,980 3,015,136 5,394,822 362,454 115,500 110,000 187,050 656,250 4,920 5,169,594 1,738 2,000,000 2,870,937 2,388,571 320,931,220 7,786,937 3,993,151 4,967,432 723,956 122,221 149,054 20,671,262 20,820,316 3,906,242 9,374,585 79,478,870 12,971,982 70,517,803 7,784,000 746,640 12,750,000 3,155,616 28,112,137 1,876,007 128,743 7,261,153 828,634 337,506 5,182,105 244,051 227,584 7,159,774 2,590,940 4,908,188 325,512 100,000 110,000 101,496 718,750 5,871 13,183,818 1,738 2,000,000 2,739,104 2,374,002 319,616,864 (8,106,591) 312,824,629 (8,086,594) 311,530,270 18
19. NOTES TO AND FORMING PART OF THE UNCONSOLIDATED CONDENSED INTERIM F I N A N C I A L I N F O R M AT I O N ( U N A U D I T E D ) FOR THE QUARTER ENDED MARCH 31, 2017 March 31, 2017 (Unaudited) December 31, 2016 (Audited) Rupees in '000 11.1 Murabaha receivable - gross Less: Deferred murabaha income Profit receivable shown in other assets Murabaha financing 7,455,457 (91,296) (240,376) 7,123,785 8,134,131 (119,342) (227,852) 7,786,937 11.2 Financing under Islamic Export Refinance - Murabaha - gross Less: Deferred income Profit receivable shown in other assets Financing under Islamic Export Refinance - Murabaha 575,493 (1,403) (13,238) 560,852 741,100 (4,616) (12,528) 723,956 11.3 Net book value of assets / investments in Ijarah under IFAS-2 is net of accumulated depreciation of Rs 11,931 million (Dec 31, 2016: Rs 10,951 million). March 31, 2017 (Unaudited) December 31, 2016 (Audited) Rupees in '000 11.4 Financing under Islamic Export Refinance - Musawammah Less: Deferred income Profit receivable shown in other assets Financing under Islamic Export Refinance - Musawammah 366,970 (1,835) (2,681) 362,454 329,995 (2,973) (1,510) 325,512 11.5 Bai Muajjal financing - gross Less: Deferred income Profit receivable shown in other assets Bai Muajjal financing 218,879 (10,525) (21,304) 187,050 133,325 (10,835) (20,994) 101,496 11.6 Musawammah financing - gross Less: Deferred income Profit receivable shown in other assets Musawammah financing 6,063,596 (92,596) (87,020) 5,883,980 7,340,823 (107,675) (73,374) 7,159,774 19
20. NOTES TO AND FORMING PART OF THE UNCONSOLIDATED CONDENSED INTERIM F I N A N C I A L I N F O R M AT I O N ( U N A U D I T E D ) FOR THE QUARTER ENDED MARCH 31, 2017 11.7 Islamic financing and related assets include Rs 6,776 million (December 31, 2016: Rs 6,847 million) which have been placed under non-performing status as detailed below: March 31, 2017 (Unaudited) Domestic Overseas Category of classification Total Provision required Provision held Rupees in '000 Other Assets Especially Mentioned Substandard Doubtful Loss 4,860 178,439 57,991 6,534,684 6,775,974 - 1,215 4,860 1,215 45,594 178,439 45,594 26,306 57,991 26,306 6,534,684 6,497,518 6,497,518 6,775,974 6,570,633 6,570,633 December 31, 2016 (Audited) Domestic Overseas Category of classification Total Provision required Provision held Rupees in '000 16,018 221,688 48,473 6,561,113 6,847,292 Other Assets Especially Mentioned Substandard Doubtful Loss - 16,018 221,688 48,473 6,561,113 6,847,292 12 52,569 21,037 6,518,585 6,592,203 12 52,569 21,037 6,518,585 6,592,203 11.8 Particulars of provision against non-performing Islamic Financing and related assets: March 31, 2017 (Unaudited) Specific General Total December 31, 2016 (Audited) Specific General Total Rupees in '000 Opening balance 6,592,203 1,494,391 8,086,594 6,840,068 1,366,772 8,206,840 Charge for the quarter / year Less: Reversals 57,144 15,577 41,567 (34,963) (34,963) 22,181 (19,386) 41,567 (2,184) (2,184) 6,570,633 1,535,958 8,106,591 235,753 (483,618) (247,865) 6,592,203 127,619 127,619 1,494,391 363,372 (483,618) (120,246) 8,086,594 Amount written off Closing balance 20