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Zarai Taraqiati Bank Ltd.



ContentsDirect ors’ Review 1

- General Inform ation 07- Highlight s of ZTBLOperations 08- Board of Directors 09- Statem ent of Compliances with the Code of 12

Corporate Governance for the year endedDecember 31, 2006

Review o f Op era t io ns 14

1 . Ove ra ll Cre dit Dis bu rs em en t 1 4

1.1 Purpose-wise Disbursement of Loans 141.2 Province-wise disbursem ent of Loans 151.3 Term-wise Disbursement of Loans 151.4 Loan to Subsistence and Small Farmers 161.5 Holding-wise Disbursement of Loan 161.6 Size-wise composit ion of Loan 171.7 Security-wise Disbursement of Loan 171.8 One Window Operation 171.9 Revolving Finance Schem e/Sada Bahar Scheme 171.10 Crop Maximization Project 181.11 Product & process innovation determinants

adopted by the bank during the year 2006. 181 .12 Fa rm Me ch a n iz a tion 1 9

2. Role in Po vert y Allevia t io n 19

2.1 Micro Credit Scheme 192.2 Credit to Women Programme 19

3. Reco very Op era t io n s 20

4. Tra inin g & Develop m ent 20

Sh are Cap ital 20

Borrow in g 20

5. Kissan Su p p o rt Services(Pvt ) Lim it ed ) 21

Fin a nc ia l Acc ou n ts (En clo se d )

St at is tica l An ne x (En clo se d)

Zarai Taraqiati Bank Limited Annual Report 2006


C o n t e n t s



On beha lf of the Board of Directors, I am please d to present the Annu al Report of t he Zarai Taraqiati Bank Limited (ZTBL),along with the Audited Accounts and Auditors ’ Repor t thereon, for the year ended December 31, 2006.

The Economy of Pakistan

The economy of Pakistan exhibited excellent performance for the fiscal year 2005-06 with real GDP growth of 6.6%having an edge o ver the envisaged long-term national average of 6%. However, the outgoing fiscal year was an extra-ordinary year for Pakistan’s economy but at the very start of the year it faced with the hazard of rising oil prices, placingsevere strain on the national budget and country’s balance of trade. The most disastrous earthquake of October 8, 2005also brought Pakistan’s budget under great stress. Agriculture is the backbone of Pakistan’s economy as it contributes22% towa rds Pakistan’s GDP, provides employme nt to 45% of count ry’s labou r force. It also contribut es substan tially

towards Pakistan’s export earning besides supplying raw materials to industry and serves as a market for industrialproducts.

Better availability of irrigation water, improved inputs coupled with timely provision of credit as compared to tha t of the previous year have raised hopes that year under report would witness sustained higher agricultural growth. However,the performance of agriculture during the fiscal year has not been so encouraging because it grew by 2.5% againstenvisaged growth target of 4.2% and actual achievement of 6.7% in the previous year. It was due to disappointingharvest of Kharif crops i.e. cotton and sugarcane, the ad verse impact has offset the positive effect of rice and maizeharvest of the preceding year.

Restructuring of t he Bank

In order to achieve its objectives, restructuring process of th e Bank continued in line with th e government’s policy torevitalize the institutional framework, ded icated to expand its out reach. The objective of restructuring of the Bank isto run it on sound, viable and self sustained basis.

Bank’s Operations

The Bank is increasingly meeting the ever growing dema nd for credit o f the farming community. Performance o f theBank during the calendar year 2006 showed a n all time record high disbursement of Rs.52.521 billion as compared toRs.39.356 billion during 2005, registering a growth of 33.5%. During the period under review agricultural loans disbursedfor short term cat egory i.e. for production purposes, amo unted t o Rs.47.786 billion as compared to Rs.33.415 billionduring the last year, representing a gro wth of 43.0%. The product ion loans/financing include seeds, fertilizers, pesticidesetc. representing 91% of total disbursement. A large portion of short term loans was utilized by the farmers for enhancingfarm crop prod uctivity. These loans we re mainly provided unde r special campaigns for Rabi and Kharif. These camp aignsare organized twice a week at a pivotal point of surrounding villages enabling the farmers of the area to avail loansthrough “One Window Operation”.

Development loans are provided to the farmers for medium and long term investment categories. During the periodunder review an am ount of Rs.4.735 billion constituting 9% of the ban k’s total agricultural credit has been disbursedunder medium and long terms loans. The development loans were mainly utilized for farm mechanization, tubewells, dairy farming and poultry farming etc. The Bank financed 9052 tractors with a total disbursement of Rs.2512.927mill ion, bes ides d isburs ing an amount of Rs .69.866 mill ion for farm equipments /farm mechanization andRs.292.898 million for installation of 1918 tube-wells to meet the requirement of water for irrigation purposes.

The Bank has also enhanced its outreach by serving 443,874 borrowers during 2006. The number of new borrowers was189,060 who got loans or served through One Window Operation, Revolving Finance Scheme and Micro Credit Scheme.Maximum resources and efforts were channelled for development of small farmers as they form the backbone of Pakistan’seconomy. An amount of Rs.44.330 billion was disbursed to sma ll farmers in the year 2006 as compared t o Rs.33.551billion in 2005, showing a growth of 32.1%. The amount disbursed to small farmers constituted 84.4% share of totalagricultural credit disbursed by the Bank during the year under review. The Bank also continued to play its role infinancing special schemes tailored in line with the government policy for employment generation and poverty alleviation.An amount of Rs.135.100 million was disbursed in 1771 loan cases under Women Credit Programme during theyear 2006. Like wise, disbursement und er Micro Credit Scheme am ounted to Rs.45.570 million in 1812 loan cases.

The Bank excelled in raising the volume of recovery by achieving an all time record amo unt o f Rs.49.156 billion ascompared to Rs.42.144 billion recovered during the last year, registering a growth of 16.6%. Of this, recovery of currentdues accounted for Rs.43.282 billion and past dues amounted to Rs.5.874 billion. The recovery against the recoverableamounts witnessed 16% growt h during the year under review.

Direct o rs’ Review

(Rs. Million)

DISBURSEMENT OF LOANS

0

10000

20000

30000

40000

50000

60000

2004 33715 28329 53862005 39356 33415 5941

2006 52521 47786 4735

TotalDisbursement

ProductionLoans

DevelopmentLoans

0

20000

40000

60000

80000

2004 38945 5825 33120 72827

2005 42144 5884 36260 73758

2006 49156 5874 43282 67287

TotalPastDues

CurrentDues

Recoverable

RECOVERY OF LOANS

(Rs. Million)

Zarai Taraqiati Bank Limited Annual Report 2006 2




Particulars

A. DISBURSEMENT

1 . TOTAL DIS BURS EMENT

a. Production Loans

b. Development Loans

2 . S HARE OF S MALL FARMERS(Under 25 Acres)

3 . NUMBEROF BORROWERS SERVED

B. RECOVERYOPERATIONS

1 . TOTAL AMOUNT RECOVERED

a. Past Duesb. Current Duesc. Recovery Rate

State Bank of Pakistan (SBP) Debt Pricing

The issue of restructuring of SBP debt amounting to Rs.51.257 billion (excluding subordinated debt of Rs.3.204 billion)is pending with SBP for consideration of pricing. As a part of the financial restructuring process, ZTBLproposed on 19thSeptemb er 2003, to cap the pricing @ 2.3558% w.e.f. 01.07.2 003 which was not accep ted by SBP. As a result the mat terhas been taken up with the Ministry of Finance, GOP for early resolution as capping of the SBP debt is imperative toensure financial sustainability in wake of reduction in markup rates on ZTBLlending w.e.f. 01.07.2004 from 14% to 9%(with a further rebate of 1% on timely repayments) and rising weighted a verage of 12 mont hs T. Bill rates that hasescalated to 9% o n 31.12.2006 th ereby giving rise to negative spread.

Financials

The Capital Adequacy Ratio rose to 24.75% on December 31, 2006 a s against required ratio of 8%. The Bank earned apre tax profit of Rs.647 million and bad debts were adequately provided for during the period under review.

The bank was able to mobilize upto Rs.2,882 million upto the year ended 2006 in terms of deposits. Financial highlightsare summarized below:-



Bank’s Operations

2004

33,715

28,328(84%)5,386(16%)

28,825(85.5%)

462,785

38,945

5,82533,12053.5%

2005

39,356

33,415(84.9%)

5,941(15.1%)

33,551(85.3%)

441,536

42,144

5,88436,26057.1%

2006

52,521

47,786(91.0%)

4,735(9.0%)

44,330(84.4%)

443,874

49,156

5,87443,28273.1%

Growthover 2005

33.5%

43.0%

-20.3%

32.1%

0.5%

16.6%

-0.2%19.4%16.0%

(Rs. Million)Particulars

1 . To t a l As se t s2 . Ad va n ce s – n e t3 . Cash &Bank Balance4. Operating Fixed Assets5 . Sh a re Ca p it a l6 . De p os it s7 . To t a l In c om e8. Financial &Administrative Expenses9. Provision for Non-performing Loans and Advances and Assets.

Appropr iations

Profit/(Loss) b efore TaxationTaxat ion

After Tax Profit/(Loss)Un-appropriated Profit brought forward

Profit available for AppropriationTransferred t o Statut ory Reserve(20% of after ta x profit)Transferred to Cont ingencies reservesUn-appropriated Profit Carried forward

2004

83,93054,33516,385

97711,870

3,1229,0605,5822,311

1,167503

664330

994

133-

861

2005

82,50552,925

9,399690

11,8702,6457,6613,0084,744

(91)38

(129)862

732-

30702

2006

85,45161,514

9,076817

11,8702,882

11,5197,0463,826

647218

420702

1,12284

301008

(Rs. Million)

Share Holding of ZTBL

Authorized Capital of Bank is Rs.25,000,000,000/- divided into 2,500,000,000 ordinary shares of Rs.10/- each. Paid-upcapital is Rs .11,869,612,010. Pattern of share holding as at 31.12.2006 is annexed with the repor t .

Earnings per Share

During the year under review basic earnings per share was Rs.0.35. Its computation ha s been reported in the financialstatements.

Credit Rating

JCR-VIS Credit Rating Compan y, Karachi in its re port of July 7, 2006 has re-affirme d ent ity rating a t “AAA/A-1+” (TripleA/A-one plus) with sta ble outlook. Short t erm stan d-alone rating to “B” (Single-B) from “A-3” (A-Three). While the me diumtop long te rm rating at “BB+” (Double-BPlus) with nega tive look. The previous rating was assigned by the same com panyin June, 2005.

Risk Management Frame Work

Organizational Structure:

Risk Management in the mod ern context is a dynamic process in order to ensure a sound credit portfolio as well as tomeet the sta ndard s laid down by SBP. With this objective the office of Risk Manage r has been e stablished in ZTBL. TheBank has gained significant momentum in some of the issues of credit risk management. The policies of Bank have beenbroadened to align the risk management strategies with portfolio growth, complexities to comply with Basel II standard.

Risk Managem ent Policy and Charter:

The Risk Management Policy of the bank is in the process of implementation with broader Risk Management Framework of the Bank.



At present Credit Risk is reviewed at the Bank level only. Credit portfolio, disbursement, recovery and security value arecritically analyzed on a regular basis and Risk Gaps are reported t o the Credit Risk Management Committee proposingeither to eliminate or to minimize the Risk Gaps. During the last q uarter of 2006, Risk Manager has also und ertakenreview of SAM Portfolio. The process of de veloping recovery strategy for such loans is in progress. Operational Risk Module comprising Key Risk Indicator (KRI), Control Self Assessment (CSA) and Corporate Governance (CG) has beensuccessfully implemented in seventeen pilot branches of t he ZTBL. This module will be rolled out to the rema iningbranches of the bank during 2007.

Operational Risk at Head Office is reviewed on a regular basis and Risk Gaps are reported to the Operational Risk Committee for corrective measures so that the repor ted Risk Gaps could be eliminated or minimized.

Annual General Meeting

Third Annual General Meeting of the Bank was held on April 25, 2006 at Islamabad.

Code of Corporate Governance

The Board is fully aware of its responsibilities established by the Code of Corporate Governance issued by the Securities&Exchange Commission of Pakistan (SECP). The Directors are p leased to give following sta temen t in respect o f compliancewith the Code of Corporate Governance:-

a) The financial statements, together with the notes thereon have been drawn up in conformity with the CompaniesOrdinance, 1984.

b) Proper books of accounts have been maintained.c) Appropr iate accounting policies have been cons istently applied in preparation of f inancial s tatements and

accounting estimates are based on reasonable and prudent judgment .d) Approved International Accounting Standards have been followed in preparation of the financial statement s.e) Internal Control is sound in design and has been effectively implemented and monitored through out the year.f) The Bank has effective budgeting system in place. Annual budget is approved by the Board and comparison

of actual results with the budget are per iodically prepared and reviewed by the Senior Management.g ) T h e r e a r e n o s ig n i f i ca n t d o u b t s a b o u t t h e B a n k ’s a b i li t y t o c o n t i n u e a s a g o i n g c o n c e r n .h) Key operating and financial data is available in the Annual Report.i) The values of investment of General Provident Fund, Gratuity and Pension Fund are Rs.1,905.331 million,

Rs.1 ,097.428 mill ion and Rs.3 ,576.131 mill ion respectively as per the audited f inancial s tatemen ts . j) Annual income tax returns/cases for the financial year 2000 to financial year 2003 are under appeal with ITAT

for their final decision. The liability amou nting to Rs.672 million appearing in the finan cial statemen t is subjectto t he d ecision by th e ITAT.

k) The major pre-requis ites of the code of Corporate Governance have been attained through theconstitution of following committees:• Co -o rd in at io n Co mm it te e• As se t s/ Li ab il it ie s Ma n a ge m e nt C om m it t e e ( ALCO)

Sub committees of the Board were also constituted in the following areas:• Hu m an Re so u rc e M an a ge m en t Co m mit t ee• Audit Committee• Ris k M an ag em en t Co mm it te e• St a n d in g Co m m it t e e o n Re s tr u ct u ri ng & Re m is si on• Credit Committee

Details regarding cons ti tu tion of the committees /sub-committees are annexed with the repor t .

i) Seven meetings of Board of Directors of ZTBLwere held during the year 2006.



Sta tement of In te rna l Control

The Bank is placing increasingly greate r empha sis on induction of an effective and reliable system of internal controlsi . Funds P lacement Policy along with Liquidity Policy has been revised with the a pproval of ALCO.ii. The Credit Policy is also being reviewed to ensure, amo ngst other aspects, proper implementation of internal

control.iii. An Audit Committee of the Board has been constitut ed with the ob jective of having a direct oversight responsibility

to ensure independence of the internal audit functions and also the independence of external auditors. TheAudit Committee meets at least once every quarter in accordance with code of corporate governance.

iv. The Bank’s audit d ivis ion through i ts netw ork audits each branch o f the Bank on per iodic bas is .v. The manage ment proactively pursues the rectification of the observations and weaknesses pointed out by

internal and external auditors.vi. The Bank has also initiated the p rocess of revamping of its ITinfrastructure and acquiring proper banking

software/applications through Asian Development Bank’s RFSDP support.vii. Requisite training of staff is also be ing planned after Training Needs Analysis (TNA) in order to t rain them on

key regulatory and internal control requirements.

In view of the above, the manag ement has a reasonable assurance that internal controls are in place and the key aspectsare working.

Auditors

Khalid Majid Rahma n Sarfraz Rahim Iqbal Rafiq and Yousuf Adil Saleem & Compan y.

Acknowledgement

In the end, I would like to acknowledge the role of our employees, whose commitment and dedication, we have enjoyedall over the year. I extend my sincere gratitude to the members on Bank’s Board for their consistent support and guidanceduring the year. I am also thankful to SBP and SECP for their guidance, support as well as cooperation. Our outlook for

the year 2007 remains very vibrant despite of growing competition and challenges of restructuring. We are confidentin our abilities and hard work to attain am bitious corporate objective.

Name of Member

Dr. Waqar Ma sood KhanMr.R.A.ChughtaiMr.Arif Mansu rMr.Mohammad Saleem KhanSyed Yawar AliMr.Aneeq Khawa rMs.Rabia SultanMr.Imdad Ali NizamaniMr.Asmatullah Khan KundiMr.Muhamm ad Zakria KasiMr.Razi-ur-Rahma n Khan*

Designation

ChairmanP r e s i d e n t / Di r e c t o rDirectorDirectorDirectorDirectorDirectorDirectorDirectorDirectorDirector

No. of meetings attended

0607060505020404030601

S.No

0102030405060708091011

* Mr .Ra z i- u r- Re h m a n r es ig n e d fr o m t h e p o s it i o n o n 2 4 .0 1 .20 0 6





PARTICULARS

A. DISBURSEM ENT

1. TOTALDISBURSEMENTa. Production Loansb. Development Loans

2. TRACTORS FINANCEDNumber

Amount

3. TUBEWELLS FINANCEDNumberAmount

4. SHARE OF SUBSISTENCE FARMERS 5 . S HARE OF SMALL FARMERS

(UNDER25 ACRES)

6. NUMBEROF BORROWERS SERVED

B. RECOVERYOPERATIONS

1. TOTALAM OUNT RECOVERED

a. Current Dues Recoveredb. Past Dues Recovered

C. NETWORKO F OPERATIONS

1. NUMBERO F ZONES2. NUM BEROF BRANCHES3. NUMBEROF MCOS

Name Zarai Taraqiati Bank Limited

Address 1, Faisal Avenue, P.O.Box 1400, Islamabad

President/CEO Mansur Khan

Co mp an y Secret ary Im tia z A.K.Lod hi

Auditors 1. Khalid Majid Rahman Sarfraz Rahim Iqbal Rafiq.2 . M . Yo u su f Ad il Sa le e m & C o.

Aut h o ri ze d Ca p it a l Rs .2 5 ,0 0 0,0 00 ,00 0 /- d i vi de d i nt o 2,5 00 ,00 0 ,0 0 0 s h ar e s o f Rs .1 0 /- e a ch .

General Information

Amount(Rs. Million)

52,52147,786

4,735

9,052

2,513

1,918293

62.9%

84.4%

443,874

49,156

43,2825,874

25342

1,258

High ligh ts of ZTBL Ope rat ions





DR. WAQAR MASOOD KHANIslamabad

MR. MANSUR KHANPresident, ZTBLIslamabad

MR. ARIF MANSURIslamabad

MR. MOHAMMAD SALEEM KHANIslamabad.

SYED YAWAR ALILahore

MR. ANEEQ KHAWARLahore

MS. RABIA SULTANLahore

MR. IMDAD ALI NIZAMANIHyderabad

MR. ASMATULLAH KHAN KUNDID.I. Khan

MR. MUHAMMAD ZAKRIA KASI

Quetta

CHAIRMAN

PRESIDENT/ DIRECTOR

DIRECTOR

DIRECTOR

DIRECTOR

DIRECTOR

DIRECTOR

DIRECTOR

DIRECTOR

DIRECTOR

Zara i Tara q iati Bank Limite dMemb ers of The Boa rd

1.

2.

3.

4.

5.

6.

7.

8.

9.

10 .

A. AUD IT CO MM ITTEE

1. Mr. Arif Mansur Chairm an2. Mr. Imdad Ali Nizamani Mem ber3. Com pany Secretary Secretary

B. HUMAN RESOURCE MANAGEMENTCOMMITTEE

1 . Sye d Ya w ar Ali Ch a ir ma n2. President, ZTBL Mem ber3. Mr. Aneeq Khawar Mem ber

4. Ms. Rabia Sultan Mem ber5. Mr. Asmatullah Khan Kundi Mem ber6. Head Human Resources Mem ber/Secretary

C . RI SKMANAGE ME NT C OMMITTE E

1. President Convener2. Mr. Mohammad Saleem Khan Mem ber3. Mr. Aneeq Khawar Mem ber4. Risk Manager Mem ber5. Com pany Secretary Mem ber/Secretary

D. STANDING COMMITTEE ON RESTRUCTURING & REMISSION

1. President Chairm an/Convener2. Mr. Imdad Ali Nizamani Mem ber3. Mr. Muhammad Zakria Kasi Mem ber4. Head (SAMD) Mem ber5. EVP (Internal Audit) Mem ber6. EVP (Recovery) Secretary

E. CREDIT CO MM ITTEE

1. President Chairm an/Convener2. Mr. Aneeq Khawar Mem ber3. Syed Yawar Ali Mem ber4. Ms. Rabia Sultan Mem ber5. EVP (Credit) Secretary

Board/Managem ent Comm it tees(As on 31.12.2006)

I. Board Sub -Comm ittees

II. Managemen t Comm it tees

A. ASSETS LIABILITIES MANAGEMENTCOMMITTEE

1. Pre siden t/CEO Co nven er2. Chief Operating Officer Mem ber3. Chief Financial Officer Mem ber4. Treasurer Mem ber5. Risk Manager Mem ber/Secretary

B. C O- ORDINATI ON C OMMITTE E

1. President/CEO Convener2. All Mem bers o f Sen io r Ma na ge ment Te am Mem be r3. All EVPs Mem ber4. Com pany Secretary Mem ber/Secretary





Share Holding of ZTBL

This statement is being presented t o comply with Code o f Corporate Governance (the Code) issued by the Securities &Exchange Commission of Pakistan and made applicable by the State Bank of Pakistan to banks in June, 2002 to theextent of applicability under Prudential Regulation XXIX and BSD No. 15 dated June 13, 2002, for the purpose of establishing a framewo rk of good governance, to m anage t he Bank in compliance with the best practices of corporategovernance.

1. The Directors of the Board were nominated by the Government of Pakistan and approved/appointed by theBoard. At present all the Directors except Chief Executive Officer/President of the Bank are non-ExecutiveDirectors.

2. The Directors have confirmed that none of the m is serving as a Director in more than ten listed companies,including Zarai Taraqiati Bank Limited.

3. All the Resident Directors of the Bank are registered as taxpayers and none of th em has defaulted in paymentof any loan to banking company, a DFI or an NBFI or, being a member of a stock exchange, has been declaredas a defaulter by the stock exchange.

4. A casual vacancy occurred due to resignation of one of the Directors. Panel of proposed nominees have beenforwarded to concerned authorities to fill the vacancy.

5. Bank is preparing “statement of ethics and business practices”.

6. Vision &Mission Statem ent already approved was revisited and Board in its 23rd meeting desired that manage mentshould suitably amend it by explicitly addressing the need to serve small farmers. Same is being placed inforthcoming meet ing. However, overall corporate strategy and significant policies have been approved. Thebank has comp rehensive framework of written policies and procedures on all major areas of o perations suchas Credit, Operations, Accounts/Finance, Internal audit a nd Compliance etc. All of these p olicies have beenapproved by the Board and are be ing constantly reviewed.

7. All the powers of the Board have been duly exercised and Board has taken decisions on material transactionsincluding appointment and determination of remuneration and terms and conditions of employment of thePresident.

8. The meetings of the Board were presided over by the Chairman. In absence of the Chairman a Director electedby the Board for this purpose presided over the relevant meeting. No meeting was held in third quarter. However,in total seven meetings were held during the year. Written notices of the Board meetings along with age ndaand working papers were circulated at least seven days before the meet ings. The minutes of the meeting wereappropriately recorded and circulated.

9. Orientation course for present Board was arranged in 2005. Conference on Corporate Governance organizedby SBP in May, 2006 was also attended.

10. Position of Chief Financial Officer vacated in 200 5 was filled during the year. Appointments against positionsof Chief Internal Audit, Chief Operating Officer and Chief Planning Officer who left the Bank is under process

11. The Directors’ Report for this year has been prepared in compliance with the requirement of the Code and fullydescribes the salient ma tters required to b e disclosed.

12. The financial statemen ts of the Bank were fully endorsed by th e President and th e CFO / EVP (F&A) beforeapproval of the Board.

13. The Directors , P res ident and Executives do not have any in teres t in the shares of the Bank.

14. The Bank has complied with all the corporate and f inancial repor ting requirements of the code.

Zara i Tara qia ti Ban k Limite d

Statemen t of Com pliances with the Code of CorporateGovernance for the year ended December 31, 2006

Share Holder

Federal Government

Government of Punjab

Government of Sindh

Government of NWFP

Government of Balochistan

Government of Erstwhile East Pakistan

Total:

No. of shares

1,185,961,201

277,100

119,000

68,000

35,900

500,000

1,186,961,201

Amount (Rs.)

11,859,612,010

2,771,000

1,190,000

680,000

359,000

5,000,000

11,869,612,010

S. No.

01

02

03

04

05

06

Authorized capital of Bank is Rs.25,000,000,000/- divided into 2,500,000,000 ordinary shares of Rs.10/- each.Paid-up capital is Rs.11,869,612,010. Pattern of share holding as a t 31.12.2006 is as under:-





15. Audit Committee of the Board comprises of three non-Executive Directors including Chairman of the Committe e.

16. Meetings of Audit Committee w ere held at least once every quarter prior to approval of interim and final resultsa s r e q u i r e d b y t h e C o d e . S e v e n m e e t i n g s o f t h e C o m m i t t e e we r e h e l d d u r i n g t h e y e a r .

17. The Board has set-up an effective internal audit function on full time basis.

18. The statutory Auditors of the Bank have confirmed that they have been given a satisfactory rating under thequality control review program of the Institute of Chartered Accountants of Pakistan, tha t they or any of thepartners of the firm, their spouses and minor children do not hold shares of the Bank and that the firm andall its partners are in compliance with International Federation of Accounts (IFAC) guidelines on Code of Ethicsas adopte d by the Institute o f Chartered Accountants of Pakistan.

19. The Statutory Auditors or the persons associated with them have not been appo inted to provide services, otherthan t he app roved services and th e auditors have confirmed tha t they have ob served IFAC guidelines in thisregard.

20. We conf irm that al l o ther mater ial pr inciples contained in the Code have been com plied with .

F o r a n d o n b e h a l f o f t h e B o a r d

(MANSUR KHAN)President

Islamabad

Review of Operations

ZTBLis proud of being the largest Financial Institution in the rural sector of the country. The Bank continued to operateas the p rime financial institution catering to the credit need s of agriculturists for the development and mo dernizationof agriculture as well as promoting cottage industries in rural areas. The Bank is currently passing through the restructuringphase to serve as a catalyst for this sector in a more effective and yielding manner. For this purpose Federal Governmenthas incorporated the Bank into a pub lic limited company in the year 2002. The new corporate structure, in add ition toensuring good governance and autonomy, aims at delivering high quality, viable and timely financial services to a greaternumber of clientele so as to increase its outreach on viable and self sustainable basis.

The Bank has be en playing an instrument al and proactive role in modernization of agriculture, boosting p roductivityand enabling the growers, particularly the landless poor and small land owners, to increase their farm produce andincome. ZTBLalone serves about 0.45 m illion farm families annually and shares around 34% of the total institutional

credit.

At present the Bank has a n etwork of 25 Zonal Offices and 342 branches all over the country engaged in catering tothe credit need s and providing technical assistance to farming community and rural poor. Since inception, the Bank hasdisbursed Rs.425.460 billion up to 31.12.2006 which includes financing of 478,355 tractors and 142,795 tub e-wells.While meeting the demand for mechanization, attention was also concentrated toward the provision of more creditfor livestock, dairy farming, poultry farming and fish farming.

The Bank continuously endeavours to serve its clients with increasing effectiveness and efficiency. In this pursuit, severalfinancial products and delivery mechanisms such as Supervised Agricultural Credit System, Revolving Finance Scheme,Sada Bahar Scheme, One Window Operation, etc have b een introduced over the years.

1 . O ve ra ll Cr e dit Dis b u rs e m en t

The Bank disbursed an amount of Rs.52.521 billion to 443874 borrowers during the year 2006 as compared to Rs.39.356billion to 441536 borrowers in the year 2005 representing an increase of 33.5 percent in terms of loan disbursement.

1.1 Purpose-wise Disbursement of Loans

During th e year under report, the Bank advanced Rs.47,786 million for p roduction purposes against Rs.33,415 millionduring last year registering a growt h of 43.0%. An amount o f Rs.35,542 million (68%) was disbursed under Sada BaharScheme to meet the seasonal crops credit requirements of the farming community. Of the remaining item-wise distributionof production loans includes Rs.5,279 million for fertilizers, Rs.3,258 million for improved seeds and Rs.2,614 millionfor pesticides etc. Bank has also provided loans for working capital for poultry, dairy, livestock and fish rearing whichwere Rs.204 million, Rs.37 million, Rs.27 million and Rs.29 million respectively during 2006. The share of productionloans to tota l agricultural loans has been w orked out as 91% percent during 2006. Details are given in statistical tableNo.3.6 annexed.

Disbursement for development purposes amount ed to Rs.4,735 million during the year 2006 against Rs.5,941 millionduring the previous year. Out of this Rs.2,513 million were disbursed for purchase of 9052 tractors, Rs.293 million forinstallation of 1918 tube wells, Rs.70 million for farm equipment, Rs.36 million for godowns/cold storages, Rs.7 millioneach for land development and orchards respectively. Bank also disbursed loans for t he establishment/ replenishmentof dairy farms, livestock, pou ltry farms and fish farms/marine fishing amounting to Rs.1,538 million, Rs.206 million,Rs .15 mill ion, and Rs .3 mill ion respectively . Detail is g iven in s tat is t ical table No.3 .6 annexed.





1.2 Province-wise disbursement of loans

The pattern of disbursement in different areas is almost proport ionate to the ag riculture potential of respectiveprovinces/area s. Accordingly, during the year 200 6, the Bank disbursed Rs.42,124 million (80.2%) in Punjab, Rs.6,706million (12.7 %) in Sindh, Rs.3,422 million (6.5%) in NWFP, Rs.95 million (0.2%) in Balochistan, Rs.95 million (0.2%)in AJKand Rs.79 million (0.2%) in the Federally Administered Northern Areas.

1.4 Loans to Subsistence and Small Farmers

The Bank’s priority for extending increased financial assistance to subsistence and small farmers also continued in currentyear. All out efforts were made to channel major portion of loan disbursement to small farmers as large number of peasants operate small holdings in Pakistan. Timely provision of adequate credit to this segment of farming communityhas proved an important instrument for increasing farm p roductivity and income level.

During the year 2006, the small farmers having land up to 25 acres, had a share of 84.4 percent as an am ountof Rs.44,330 million was disbursed to them out of t he tota l disbursement of Rs.52,521 million. Of this, an amount of Rs.33,027 million was channelled to subsistence farmers constituting 63 percent of the total agricultural credit disbursedby the Bank. Year-wise disbursement to small and subsistence farmers is given in statistical table No.2 anne xed.

1.3 Term-wise loan disbursement

The Bank provides loans on short, medium a nd long terms ba sis. Short te rm loans are basically product ion loans havingmaturity period upto 18 months. Medium and long term loans are advanced for development purposes and their maturityperiod spreads over 5 to 8 years respectively.

Term-wise loan amounts du ring the year are given below:

Sho rt t erm loa ns Rs.47,786 Million (91.0%)Medium term loans Rs.1,802 Million ( 3.4%)Long term loans Rs.2,933 Million ( 5.6%)

1.5 Holding-wise Disbursement of Loan

Holding-wise disbursement of loans d uring 2006 revealed tha t land-less population received Rs.178 million wh ich was0.3% of the tota l disbursement. Loans to land ow ners/operators under 12.5 acres amo unted t o Rs.32,193 millionrepresent ing 61.3% share in overall disbursemen t. Farmers owning/ operating land betwee n 12.5 and 25 acres receivedRs.11,959 million constituting 22.8% share. It was followed by Rs.5,381 million (10.2%) disbursed to farmers with landholding between 25 and under 50 acres. Rest of the credit amounting to Rs.2,810 million (5.4%) was disbursed to landholders operating 50 acres farms and above. Details are g iven in s tat is t ical table No.3 .8 annexed.

Punjab

Sindh

NWFP

Balochistan

Province-wise disbursement of loans

Production

Development

Purpose-wise Disbursem ent of LoansTerm-wise loan disbursement

Small Farmers

Large Farmers

Disbursement to Small Farmers





1 .8 O ne Win d o w O pe ra t io n

The Bank continued to pursue credit delivery mechanism of “One Window Operation” for expeditious and transparentdelivery of credit to small farmers. This system has now established its significance by gaining tremendous response interms of quantum jump in provision of institutional credit to a large population of small and subsistence farmers.

The Bank started this programme to m itigate the problems of small farmers, like supply of Agricultural Pass Books bythe Post Office, its completion by the Revenue Authorities, pre-appraisal, entertainment of loan cases, appraisal, sanction,documentation, charge creation etc. The programme is conducted by the bank in coordination with the officials of Provincial Revenue Departm ent an d Pakistan Post Office twice a week, on Mond ay and Tuesda y, for Rabi crops during

the period from October to January and for Kharif crops from April to Septemb er each year. Under “One WindowOperation” loans are sanctioned on the spot. During the year under report an amount of Rs.16,863 million was disbursedthrough this mode of operation.

1.9 Revolving Finance Scheme (RFS)/Sada Bahar Scheme (SBS)

The scheme is also under operation to facilitate genuine and credit worthy borrowers of the b ank to meet their creditrequirements for seasonal crops without repeating d ocumentation a nd procedural formalities. The scheme is gainingpopularity in farming community. Under the scheme, an amount of Rs.45,353 million was disbursed during the year2006.

1.10 Crop Maximization Project

Federal Ministry of Food, Agriculture & Livestock (MINFAL) has launched an int egrate d developm ent prog ramm e entitled“Crop Maximization Project (CMP)” in 15 districts of the country in the year 2003. For the financial assistance of theproject farmers particularly for provision of inputs for crops, a Revolving Fund has been established. Under an agreement,the MINFALwill provide funds to the tu ne of Rs.299.893 million to ZTBLfor onward lending to th e project farmers tomeet the input requirements for various crops. ZTBLwill revolve these funds to look after the credit needs for inputsof the project farmers up till 30th June, 2014.ZTBLreceived funds t o the tune of Rs.168 million by the close of year 2006 for the purpose, while it has revolved thesame to a tot al disbursement of Rs.351.913 million. Similarly progressive recoverable under the project worked out asRs.300.389 million against which recoveries of Rs.278.944 million have since been effected, indicating the recovery rateas 93%.

The following table summ arizes the progress under the programme t ill end 2006.

Category

DisbursedRecoverableRecoveredRecovery (%)

2003

31.161

2004

93.30166.36662.111

94%

2005

99.40391.86184.475

92%

2006

128.048153.803132.358

86%

(Rs. Million)

Total upto 2006

351.913*300.389278.944

93%

* Year-wise recoverable differ with pro gressive figures due to carryover of balance recoverable from on e year tothe other.

1. 11 Product & process innovation determinants adopted by the bank during the year2006.

During the year 2006 the bank took major steps not only to improve the loan processing procedure but has alsointroduced certain loan product determinants to facilitate the farmers and p rioritize product development in terms of sanctioning procedure mo re professionally. Some of t he key initiatives undertaken, during the period are as u nder:-

ÿ In order to m ake the sanctioning procedure more effective revised sanctioning process line has been a doptedwhere sanctioning powe rs of the MCO have been shifted to the Branch Manager/Deputy Manager/AssistantManager as t he case m ay be, thus relieving the MCO to concentrate more on credit mobilization, identificationand expansion of outreach. The sanctioning determinants are now more managerial in nature vis-à-vis providingextended role of MCO to enhance and deepen outreach. The revised loaning procedure now provides quick processing and access in sanctioning of loan case within three a nd five days for production and developmentloans respectively.

ÿ Bottle-necks and impediments with regard to spot recovery through recovery receipts have been streamlinedto estab lish genu ine acknowledgement of recovery.

ÿ The identification process has been made more transparent and effective to introduce genuine clients andborrowers. Loans are advanced not only to farmers but also to non-farmers under cash flow appraisal process.Clientele base has bee n widend to non-farmers enabling the landless and rural poor to avail credit for variousincome generation activities to help improve their economic condition/livelihood.

ÿ The loan product such as financing for agriculture machinery has also been introduced, wherein for the

convenience of the borrowers, loan for used tractor has also been a llowed. The equity is now transformed intocompulsory saving to inculcate the habit of savings amongst the clientele as also to enhance the deposit baseof the Bank. Moreover loan product for transportat ion of Agri produce has also been introduced to facilitateAgri. Marketing.

ÿ The borrowers who closed their accounts by availing write off or remission under any relief package have beenallowed to avail financial facility in their own name or in the name of their dependant family members, includingspouse subject to the condition that the loan proposal is for genuine/productive purposes and loan amountshall not exceed 50% of the a ppraised value of the security. The loan amount will not be more t han 75% of

1.6 Size-wise composition of Loan

Composition of credit disbursement by size of loan during the p eriod under review revealed that loans availed up toRs.25,000 constituted o nly 1.5% of the tot al credit, loans between Rs.25001 to Rs.50,000 were 8.1%, loans betweenRs.50,001 to 200,000 were 43.6%, and between Rs.200,001 to 1,000,000 constituted 46.8% of the total credit. Theaverage loan size was Rs.126,248 during the year 2006. Details are given in statistical table No.3.7 annexed.

1.7 Security-Wise Disbursem ent of Loan

Security-wise composition of total loans indicates that loans amounting to Rs.52,292 million, constituting 99.6%, aresecured against pled ge/ mortga ge of tangible securities. Loans amo unting to Rs.159 million being 0.3% were disbursedagainst personal surety while loans amounting to Rs.70 million being 0.1% were ad vanced against hypothecation of crops and against other securities. Details are given in statistical table No.3.4 annexed.

Security-Wise Disbursem ent of Loan

MortgagePersonal Surety

Hyp/other

0

10

20

30

40

50

60

70

80

90

100



the previous adjusted loan. The borrower can avail further loan under normal terms and conditions aftersatisfactory repayment of the loan.

ÿ The due date of loan installments has been changed from 7th January & 7th July to 24th Dec. and 24th Junerespectively to make it in line with the harvesting/marketing of crops and cash generation to the borrowersenabling them to repay due loan installments.

ÿ Maximum limits fixed for Major/Minor crops namely paddy, cotton, sugarcane, maize, wheat, canola, soybean,sunf lower and ma tured orchard/f ruit crop have been increased. Maximum rates f ixed for agr iculturali m p l e m e n t s / a t t a c h m e n t s a n d e q u i p m e n t s , b e i n g u s e d wi t h t r a c t o r , h a v e a l s o b e e n i n c r e a s e d .

1.12 Farm Mechaniza t ion

In line with th e governme nt’s efforts towa rd increasing the GDP and to at tain self reliance in agriculture, Zarai Taraqiat iBank Limited (ZTBL) attache s high priority to mode rnize and prom ote Farm Mechan ization. The bank has played a leadingrole in bringing additional land under cultivation through financing of w ide range of machines, including tractors, tubewells, farm implements, threshers and combine harvesters etc. which directly helped in increasing yield besides improving

the efficiency of other farm activities.

To enhance farm ers’ awareness and to p rovide guidelines to bank’s field functionaries regarding mod ern farm techno logiesthe economics/feasibilities were prepared in consultation with Dairy and Livestock experts on the following topics:

Economics of Inland Fish Farming, Feed Lot/Fattening Station(25 Animals), Dairy Farming of 20 Animals, Rearingof 25 Heifers (Female Calves of buffaloes), Animals Breeding Centre, Milk Collection Centre, different sizes of herds of Sheep/Goat Farming.

Prepared/Revised Economics/Feasibilities for the following Agri. Machines:-

Sprinkle Irrigation, Drip Irrigation, Mini Dam, Seed Processing Unit, Sulphurous Acid Generator, Laser LandLeveller, Scraper and Grain Storage/Godown.

Revised economics of 26 different Crops/Vegetables have also been prepared.

Prepared brochures/leaflets, on sheep/goat farming, Preparation of silage (preservation of Green fodder) for guidanceand information of the field functionaries and bo rrowers/ farmers.

The bank is continuously making efforts to enhance t he produ ction/income of agriculturists specially the small farmersto support and assist in the poverty alleviation efforts of the Government of Pakistan.

2 . Ro le in Po v e rt y Al le vi a t io n

Pakistan like other developing countries faces the challenge of rising poverty. All efforts are being made at the governmentlevel to address the issue. In line with the government’s poverty reduction policy, the Bank pursues scheme of Micro-Credit for rural p oor and provision of small loans under Credit to Women Programme.

2 .1 Mic ro Cred it Sch e m e

Bank has launched Micro Credit scheme since 1st July, 2000 to engage rural poor in income generating activities/cottageindustries. The scheme is operat ive in all the branch es of ZTBLthroug h its network of MCOs and FMCOs. Both m en andwomen can obtain loan under the scheme as an individual or as member of a group of 5 to 10 for 136 purposes prescribedfor income generating activities/cottage industries. Minimum credit limit in a case is Rs.5000/-, while maximum limit is

Rs.25,000/- that can b e advanced aga inst both security and surety. All loans are recoverable within 18 mont hs of theiradvancement. Rate of mark-up for Micro Credit is 18% p.a. with 2% rebate on timely repayment. During the periodunder review loans of Rs.45.570 million ha ve been disbursed under micro credit scheme.

2 .2 Cred it t o Wo m e n Pro gram m e

Credit to Women Programm e was initiated in 1992 in spe cific areas with th e financial assistance of Internationa l LendingAgencies. The main objective of this programme is to enable the rural women to have an ea sy access to the credit. Tomake this possible the bank has fielded 19 FMCOs in 17 branches exclusively for this purpose. Under Credit to WomenProgramme, women can meet their credit needs through both Micro Credit and General Credit Schemes. During thecalendar year 2006 Rs .135.100 mill ion have been disbursed under the programme to women borrowers .

3 . Re co ve ry Op e ra t io n s

During the calendar year 2006, ZTBLhas attained an all time record recovery of Bank’s dues with th e untiring efforts,hard wo rk and devoted involvement of Field Staff. It tou ched the impressive figures of Rs.49,156 million as comparedto th at of Rs.42,144 million recovered during t he last year. There is an absolute increase of Rs.7,012 million showinggrowth o f 16.6%. The prominent features o f higher recovery during the year were the effective mob ilization of MCOs,daily/weekly monitoring of recovery by the Branch Managers, Zonal Chiefs and also at the Head Office level.

The level of recovery was achieved in spite o f the fact that farmers were faced with natural hazards, such as persistentdrought in entire Balochistan, Poultry crisis due to Bird Flue attack, low rains and after effects of Earthquake of October8, 2005 for which different recovery relief packages w ere anno unced by the Federal Government. The ZTBLextendeddifferent Recovery Relief Packages on the directive of President and Prime Minister of Pakistan in specific calamity hitareas of the country as well as in earthquake hit areas of NWFP and AJ&K.

To clean the infected part of loan portfolio and to implement the SBP Prudential Regulations, all the stuck up loansc l a s s i f i e d a s l o s s f o r t h e l a s t t h r e e y e a r s h a v e b e e n c h a r g e d o f f a n d d e c l a r e d a s S AM l o a n s .

4 . Tr ain in g & De ve lo p m en t

During the calendar year 2006, twenty five courses were conducted and 663 officers were trained in tw o staff collegesof the bank at Islamabad and Karachi. Of th is 11 courses (6 on Agricultural Technology, 2 on Rural Finance & BasicCommercial Banking and 3 on Effective Communication for Team building) have been condu cted with the assistanceof Asian Developm ent Bank. 118 officials were trained in oth er training institu tions of the coun try namely IBP, NIPA,PIM etc.

Share Capital

The paid-up-capital as on 31.12.2006 was Rs.11,869,612.010 against authorized capital of Rs.25,000,000,000/-.

Borrowing

The total outstanding b orrowings from State Bank of Pakistan stood at Rs.51257.213 million and subordinated de btat Rs.3204.323 million as on 31st December, 2006.






Zarai Taraqiati Bank Limited

Financial Statements

5. Kissan Sup po rt Services (Pvt) Lim ited

In order to put t he ZTBLon viable and self-sustained b asis Organizationa lly, Financially and Operat ionally, the Bank hasunder ta ken the Restructuring Plan under RFSDP. Besides the oth er steps, the Huma n Resource Managem ent Committ eeof ZTBLBoard in its me eting held on November 10, 2005 a pproved the proposal to out source non-core services of theBank in line with the b est business practices so that the Bank’s regular work force may concentrate on core bankingoperations. With this in view, the Bank established its own subsidiary on November 16, 2005. The Security and ExchangeCommission of Pakistan (SECP) allowed t he incorp oration of the Bank’s Subsidiary titled ‘Kissan Support Services (Pvt)Limite d’ (KSSL) with an au tho rized sha re capit al of Rs.100 million fully subscribed by ZTBL. The aim of the Bank’s Subsidiaryis to provide support staff to ZTBLand also to under-take its non-core activities. The Subsidiary Company operates underits Memorandum and Articles Of Association, which include provision of all kinds of Support Staff and Ancillary Servicesto the Bank.

During its 1st year of operation, th e KSSLhave recruited a nd dep loyed the supp ort staff of following categ ories in ZTBLHead Office as well as in Bank’s Field Offices:

i ) 5 1 4 ‘D a rb a n s ’ t o p e r fo r m d u t ie s a s S e cu r it y -g u a r d in t h e b a n k o f f ic e s /b r a n c h e s.i i) 399 ‘Drivers ’ for the Bank’s Field Operations Vehicles.iii) 165 Staff of various categories including Assistants, Cashiers, Typists, Naib Qasids and other staff for

technical works.

During the same period , the KSSLhave provided the Bank the following Suppo rt Services:

i) Janitorial Services at ZTBLHead Office, Zonal Office, Bank Colony, ZTBLClub, Staff College and Bank Farm located in Islamabad.

i i) ZTBL’s Mail Handling within the Country as well as abroad.i ii) Photocopying services to ZTBLHead Off ice, Is lamabad.iv) The Secur ity services both at ZTBLHead Off ice and i ts field offices , al l over the country.



We have audited the an nexed balance sh eet of Zarai Taraqiati Bank Limited ("the Bank") as at December 3 1, 2006 andthe related profit and loss account, cash flow statement and statement o f changes in equity, together with th e notesforming part thereof (here-in-after referred to as the ` financial statements') for the year then end ed, in which areincorporated the unaudited certified returns from th e branches except for one hu ndred and twenty branches whichhave been audited by u s and we state that we have obtained all the information and explanations which, to the bestof our knowledge and belief, were necessary for the purpose of our audit.

It is the responsibility of the Bank's Board of Directors to establish and maintain a system of internal control and prepareand present the financial statements in conformity with approved accounting standards and the requirements of BankingCompanies Ordinance, 1962 (LVII of 1962 ), and t he Compa nies Ordinance, 19 84 (XLVII of 1984). Ou r respon sibility isto express an opinion on these statements based on our audit. The financial statements of the Bank for the year endedDecember 31, 200 5 were au dited by Messers Khalid Majid Rahman Sarfaraz Rahim Iqbal Rafiq; Chartered Account antsand Messers Riaz Ahmad &Company; Chartered Accountants whose report dated March 29 , 2006 expressed an unqualifiedopinion on those financial statements.

We conducted our audit in accordance with the International Standards on Auditing as applicable in Pakistan. Thesestandards require that we plan and p erform the audit to ob tain reasonable assurance about wh ether the financialstatements are free of any material misstatement. An audit includes examining, on a test basis, evidence supportingthe amounts and disclosures in the financial statements. An audit also includes assessing the accounting policies andsignificant estimates made by management, as well as, evaluating the overall presentation of the financial statements.We believe that our audit provides a reasonable basis for our opinion and after due verification, which in the case of loans and advances covered more than sixty percent of the total loans and advances of the Bank, we report that:

a) in our opinion, proper books of account have been kept by the Bank as required by the Companies Ordinance,1984 (XLVII of 1984) and the retu rns referred to abo ve received from the bran ches have been foun d adequ ate for thepurposes of our audit;

b) in ou r op in io n:

i. the balance sheet and profit and loss account together with the notes thereon have been drawn up inconformity with the Banking Compa nies Ordinance, 1962 (LVII of 1962 ) and the Comp anies Ordinance,1984 (XLVII of 1984), and a re in agreement with the b ooks of account and are further in accordance withaccounting p olicies consistently applied;

i i. the expendi ture incurred during the year was for the purpose of the Bank' s business; and,

iii. the business conducted, investments made and the expenditure incurred during the year were in accordancewith the objects of the Bank and the transactions of the Bank which have come to our notice have beenwithin the powers of the Bank;

c) in our opinion and to the best of our information and according to the explanations given to us, the balancesheet, profit and loss account, cash flow statement and statement of changes in equity, together with the notes formingpart thereof conform with the app roved accounting standard s as applicable in Pakistan and give the information requiredby the Banking Comp anies Ordinance, 196 2 (LVII of 1962), a nd th e Companies Ordinan ce, 1984 (XLVII of 1984), in t hemanner so required and give a true and fair view of the state of the Bank's affairs as at December 31, 2006 and its truebalance of the profit, its cash flows and changes in equity for the year then ended; and

d) in our opinion, Zakat deductible at source under the Zakat and Ushr Ordinance, 1980 (XVIII of 1980), wasdeducted by the Bank and deposited in the Central Zakat Fund established under section 7 of that Ordinance;

Without qualifying our opinion, we draw attention to the following matters that:

1. Prudential Regulation "O-3"for Corporate/Commercial Banking requires clearance of all outstanding entriesin inter-branches/offices current accounts within, a period of 30 days from the date of recording of transactions in theaforesaid financial statements. We have, however, noted balance in inter-branches/offices current accounts, reportedin note 17 to the financial statements on net b asis at Rs.34.105 million-Credit Balance (December 31, 2005: Rs. 792.819million-Debit Balance).

2. Borrowings in note 14 and Contingencies and Commitments in note 21.5 of the financial statements of theBank refer to the d ispute on the rate of markup chargeable on financing from State Bank of Pakistan (SBP). Tripartitemeeting bet ween SBP, the Bank and Ministry of Finance has n ot yet been convened to resolve the issue regarding rateof markup on the debts. SBP has confirmed accrued markup on the debts amounting to Rs. 15,777.331 million asagainst Rs. 9,359.844 million in the finan cial statements resulting in a d ifference of Rs. 6,417.487 million. Further, thefirst two installments o f the deb t payab le in July 2006 an d January 20 07 as req uired by SBP in its letter no ACD/3104/Loans-15-A/2004 dated December 16, 2004 have not been paid. Outcome of the d ecision in the above said meeting mayrequire appropriate adjustment in the provision of accrued markup.



Auditors ' Repo rt to the Memb ers

M. YOUSUF ADIL SALEEM & CO. KHALID MAJID RAHMAN SARFARAZChartered Accountants RAHIM IQBALRAFIQIslamabad. Chartered Accountants

Islamabad.

M. YOUSUF ADIL SALEEM & CO. KHALID MAJID RAHMAN SARFARAZChartered Accountants RAHIM IQBAL RAFIQ

Chartered Accountants





P RESIDENT DIRECTO R DIRECTO R D IRECTO R P RES IDEN T DIRECTO R DIRECTO R D IRECTO R

Zara i Tara qiat i Ban k Limite dBalance Sheet As At Decemb er 31, 200 6

Zara i Tara qia ti Ban k Limite dProfi t and loss accoun t for th e year ended Decemb er 31, 2006

Note 2006 2005

ASSETS

Cash and balances with treasury banks 6 1,295,464 1,585,421

Balances with other banks 7 7,781,056 7,813,844

Lendings to financial inst itut ions - -

Investments 8 5,634,499 12,820,668

Advances 9 61,514,057 52,925,286

Operating fixed assets 10 817,003 690,141Deferred tax assets 11 - 1,829

Other assets 12 8,409,442 6,667,463

85,451,521 82,504,652LIABILITIES

Bills payable 13 276,333 235,741

Borrowings 14 51,257,213 51,257,213

Deposits and other accounts 15 2,882,384 2,644,647

Sub-ordinated loan 16 3,204,323 3,204,323

Liabilit ies against assets subject to finance lease - -

Deferred tax liabilit ies 11 7,629 -

Other liabilities 17 14,223,468 12,100,331

71,851,350 69,442,255

NETASSETS 13,600,171 13,062,397

REPRESENTED BY

Share capital 18 11,869,612 11,869,612

Reserves 19 359,348 245,387

Unappropriated profit 1,008,200 702,355

13,237,160 12,817,354

Surplus on revaluation of assets 20 363,011 245,043

13,600,171 13,062,397

CONTINGENCIES AND COMMITMENTS 21

1

The annexed notes 1 to 41 and annexure-1 form an integral part of these financial statements.

(Rupees in "000")

Not e 2006 2005

Mark-up/return/interest earned 22 5,996,030 6,822,719

Mark-up/return/interest expensed 23 2,802,785 391,738

Net mark-up/interest income 3,193,245 6,430,981

Provision against non-performing loans and advances 9.3 1,767,234 4,731,992

Provision/(reversa l) for diminut ion in the value of invest ment s, net 8.2 10,110 (585)

Provision against other assets 12.6 2,048,971 12,936

Bad debts written off directly - -

3 ,8 26 ,3 15 4 ,7 44 ,3 43Net mark-up/interest income after provisions (633,070) 1,686,638

NON MARK-UP/INTERESTINCOME

Fee, commission and brokerage income 2,544 3,157

Dividend income 6,458 6,458

Income from dealing in foreign currencies - -

Gain/(loss) on sale of securit ies - -

Unrealized gain/(loss) on revaluation of investments classified as held for

trading - -

Other income 24 5,514,077 828,519

Total non-ma rkup/interest income 5,523,079 838,134

4,890,009 2,524,772

NON MARK-UP/INTEREST EXPENSES

Administrative expenses 25 2,760,452 2,612,337

Government relief package writ ten off 1,482,448 -

Other charges 26 306 3,802

Total non-markup/interest expenses 4,243,206 2,616,139

Extra ord inary/unusual Items - -

PROFIT/(LOSS) BEFORE TAXATION 6 46 ,8 03 (91 ,3 67 )

Taxatio n – Current year 27 217,539 38,434

– Prior years - -

– Deferred 27 9,458 (607)

226,997 37,827

PROFIT/(LOSS) AFTER TAXATION 4 19 ,8 06 (1 29 ,1 94 )

Unappropriated profit b rought forward 702,355 861,549

Profit available for appropriation 1 ,1 22 ,1 61 7 32 ,3 55

Basic and diluted earnings per share - after tax 28, 29 0.35 (0.11)


(Rupees in "000")





PRESIDENT DIRECTOR DIRECTOR DIRECTOR

Zara i Tara qiat i Ban k Limite dCash f low s ta t ement for the year ended Decemb er 31, 2006


Note 2006 2005

CASH FLOWS FROM OPERATING ACTIVITIES

Profit/(loss) before taxation 646,803 (91,367)

Dividend income (6,458) (6,458)

640,345 (97,825)

Adjustments:

Depreciation 106,050 85,806

Amortization of deferred income (14,532) (32,178)

Amortization of preliminary expenses - 6,570Provision against non-performing advances 1,767,234 4,731,992

Reversal for employees post retirement benefit s (2,110,467) (79,692)

Provision for diminut ion in the value of investments 10,110 -Provision against other assets 2,048,971 12,936

Government relief package written off 1,482,448 -

Gain on sale of fixed assets (37,116) (23,591)

3,252,699 4,701,843

3,893,043 4,604,018

(Increase)/decrease in operating assets

Advances (10,356,005) (3,321,839)

Others assets (excluding advance taxat ion) (3,162,932) 1,600,661

(1 3,5 18 ,9 37 ) (1 ,7 21 ,1 78 )

Increase/(decrease) in o perating liabilities

Bills payable 40,592 38,307

Deposits and other accounts 237,737 (477,558)

Other liabilities (excluding current taxation) 2,337,876 594,929

2,616,205 155,678

Income tax paid (417,745) (157,864)

Net cash (used in)/generated from operating activities (7,427,434) 2,880,654

CASH FLOWS FROM INVESTING ACTIVITIES

Net investments in held to maturity securities 7,294,027 (9,863,017)

Dividend received 6,458 6,458

Investments in operating fixed assets (247,809) (24,945)

Sale proceeds of property and equipment disposed-off 52,012 14,949

Net cash flow from/(used in) investing activities 7,104,688 (9,866,555)

Increase in cash and cash equivalents (322,745 ) (6,9 85,901 )

Cash and cash equiva lents a t beg inning of the year 30 9,399,265 16,385,166

Cash and cash equivalents at end of the year 9,076,520 9,399,265

The annexed notes 1 to 41 an d annexure-1 form an integral part of these financial statements.

(Rupees in "000")

Zara i Tara qiat i Ban k Limite dStatement o f changes in equ ity for the year endedDecemb er 31, 2006

Share

capital

Advance

against

equity

Statutory

reserve

Contingencies

reserve

Unappropriated

profitTotal

(Rupees in "000")

Balance as at December 31, 2004 11,869,611 1 215,387 - 861,549 12,946,548

Loss for the year 2005 - - - - (129,194) (129,194)

Transfer to contingencies reserve - - - 30,000 (30,000) -Issue of share capital 1 (1) - - - -

Balance as at December 31, 2005 11,869,612 - 215,387 30,000 702,355 12,817,354

Profit for the year 2006 - - - - 419,806 419,806

Transfer to st atutory reserve - - 83,961 - (83,961) -

Transfer to contingencies reserve - - - 30,000 (30,000) -Balance as at December 31, 2006 11,869,612 - 299,348 60,000 1,008,200 13,237,160






1 STATUS AND NATURE OF BUSINESS

1.1 Reorganization and conversion

Originally Agricultural Development Bank of Pakistan (ADBP) was established under the Agricultural DevelopmentBank Ordinance, 1961, by merger of former Agricultural Development Finance Corporation and AgriculturalBank of Pakistan, in February, 1961 to provide better credit facilities for the promotion, expansion and developmentof agriculture and persons engaged therein.The Federal Government in its cabinet meeting held on August 28,2002 decided for the reorganization and conversion of ADBP into a public limited company for the purposesof ensuring goo d governance, aut onomy, delivering high quality and viable financial services to a greater numberof rural clientele and adequate returns to stake holders. Accordingly the Agricultural Development Bank of Pakistan (Reorganization and Conversion) Ordinance, 2002 was promulgated for taking o ver the en tire undertakingof ADBP and for matters connected therewith or incidental thereto.

1.2 Status

As required under section 3 of th e Agricultural Developmen t Bank of Pakistan (Reorganization and Conversion)Ordinance, 2002 , Zarai Taraqiati Bank Limited (the "Bank") was incorporated as pub lic limited compa ny und erthe Companies Ordinance, 1984 on October 23, 200 2. Consequently, under SRO 823 (1)/2002 dat ed 18 November2002, all the assets, con tracts, liabilities, proceedings and undertakings of ADBP were transferred to, and vestedin the Bank on December 14, 2002. The Bank's principal office is situated at 1-Faisal Avenue (Zero Point),Islamabad. The Bank operates 342 (December 31, 2005: 345) branches in Pakistan as at close of the year.

1 .3 Na tu re o f busine ss

The main purpose of the Bank is to pro vide sustainable rural finance and services particularly to small farmersand low income houses to strengthen the rural and agricultural sector, mitigate poverty, capital market andinvestment activities and other banking business.

2 BASIS OF PRESENTATION

During th e year, the State Bank o f Pakistan (SBP) vide Banking Surveillance Department (BSD) Circular No. 4dated February 17, 2006 has issued ‘Revised forms of Annual Financial Statements’ wh ich has replaced existingforms prescribed th rough BSD Circular No. 36 dated October 10, 2 001. These revised forms are app licable forfinancial statements for the year ended December 31, 2006 and include certain additional disclosures whichare also applicable for corresponding period. These financial statements have been presented in accordancewith such revised forms.

3 STATEMENT OF COMPLIANCE

These financial statements have been p repared in accordance with the app roved accounting standards asapplicable in Pakistan and the requirements of the Companies Ordinance, 1984 and the Banking CompaniesOrdinance,1962 and d irectives issued by th e Securities and Exchange Commission of Pakistan (SECP) and theSBP. Approved accounting stan dards comp rise of such Interna tional Accounting Stand ards as notified under

the provisions of the Companies Ordinance,1984. Wherever the requirements of the Companies Ordinance,1984, Banking Companies Ordinance,1962 or the directives issued by the SECP and the SBP differ with therequirements of these stand ards, the requirements of the Companies Ordinance,1984, Banking CompaniesOrdinance, 1962 or the requirements of the said directives take precedence.

The SBP has deferred the applicability of International Accounting Standard (IAS) 39 "Financial Instruments:Recognition and measurement"a nd International Accounting Standard (IAS) 40 "Investment Property"forbanking compan ies through BSD circular no 10 d ated August 26 , 2002. Accordingly, the requirements o f thesestandards have not been considered in the preparation of these financial statements. However, investmentshave been classified and valued in accordance with the requirements prescribed by the SBP through variouscirculars.

The published amendments to existing standard (IAS) 1 "Presentation of Financial Statements - Capital Disclosures"are not yet effective and are mandatory for the Bank's accounting periods beginning on or after January 1, 2007or later periods. However, effect of adoption of the above amendments on the future financial statements isnot likely to be ma terial.

4 BASIS OF MEASUREMEN T

4.1 These financial statements h ave been prepa red und er the historical cost convention as modified for therevaluation of certain investments (note 8) and in conformity with the accepted accounting practices of thebanking institutions in Pakistan.

4.2 Crit ica l accounting es t imates and judgments

The preparation of financial statements in conformity with approved accounting standards requires the useof certain critical accounting judgments. It also requires management to exercise its judgment in the processof applying the Bank’s accounting policies. Estimates and judgments are continually evaluated and are basedon historical experience, including expectations on future events that are believed to be reasonable under thesecircumstances. The areas where various assumptions and estimates are significant to the Bank's financial

statements or where judgment was exercised in application of accounting policies described in notes are asfollows:

4.2.1 Inves tments

As described in not e 8, held to ma turity are investments where the man agement has positive intent and ab ilityto hold to maturity and available for sale securities are investments that do not fall under the held for tradingor held to maturity categories. The classification of th ese securities involves management judgment at the timeof purchase wh ether the financial assets are held for trading, held to ma turity or available for sale investments.

4.2.2 Provision against non-performing Advances

The provision is determined on th e basis of time-based criteria given in prudential regulations.

4.2.3 Defined benefit plans

The key actuarial assumptions concerning the valuations of defined benefit plans and the sources of estimationare disclosed in note 32 to the financial statements.

4.2.4 Operating fixed assets

Estimates of useful life of the property and equipment are based on the management’s best estimate. Changesin the expected useful life are accounted for by changing the depreciation/amortization period or method, asappropriate, and are treated as changes in accounting estimate.

5 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

5 .1 Sta ff r e tir eme n t be ne fit s

Pension scheme

The Bank operates d efined benefits funded pension scheme ap proved by income tax auth orities, for its eligibleemployees who opted for the new employees benefits scheme, introduced in 1975 and 1977 for clerical/non-clerical staff and for executives/officers, respectively. The Bank's costs are determ ined on the b asis of actuarialvaluation carried out by independent actuaries by using 'Projected Unit Credit Method'. Any surplus/deficitarising on actuarial valuation in excess of the higher of 10% of present value of defined benefits obligations

or 10% of th e fair value of plan assets is recognized as income o r expense over the e stimated working lives of the employees.

Gratuity scheme

The Bank operates d efined benefits funded gratuity scheme appro ved by income tax autho rities, for its eligibleemployees who did not o pt for the new employees benefits scheme, introduced in 1975 and 1977 for clerical/non-clerical staff and fo r executives/officers, respectively. Annual contribut ions are ma de on the b asis of actuarialrecommendations. Any surplus/deficit arising on actuarial valuation by independent actuaries in excess of thehigher of 10% of present value of defined benefit obligation or 10% of the fair value of plan assets is recognizedas income or expense over the estimated working lives of the employees.

Zara i Tara qiat i Ban k Limite dNotes to the f inancia l s ta temen ts for the year endedDecemb er 31, 2006







5 .9 Pr ovisio n s

Provisions are recognized when the Bank has a legal or constructive obligation as a result of past events andit is probable that an outflow of resources will be required to settle the obligation and a reliable estimate of the amou nt can be mad e. Provisions are reviewed at each b alance sheet date and are ad justed to reflect currentbest estimate.

5.10 Foreign currencies

The Bank op erates foreign curren cy transactions throu gh SBP in local currency by paying exchange fluctuationrisk fee to the SBP.

5.11 Related party transactions

All transactions undertaken between the Bank and the related parties are measured at arms' length pricesdeterm ined in accordance with th e metho ds for determ ining arms' length prices as prescribed by the SECP.

Note 2006 2005

6 CASH AND BALANCES WITH TREASURYBANKS

local currency

In hand 150,382 395,962

In current accounts with:

State Bank of Pakistan 6.1 1,145,080 1,189,047

Nat ional Bank of Pakistan 2 4121 ,2 95 ,4 64 1 ,5 85 ,4 21

6.1

7 BALANCES WITH OTHER BANKS

In Pakistan in local currency:

On current accounts 7,192 21,673

On deposit accounts 7.1 7,773,864 7,792,1717 ,7 81 ,0 56 7 ,8 13 ,8 44

7.1 These carry a markup ranging from 2.00% to 12.75% per annum (2005: 2.00% to 12.75% per annum)

8 INVESTMENTS Note

Investment by typesHeld by

bank

Given as

collateralTotal

Held by

bank

Given a s

collateralTotal

Available-for-Sale securities

Listed companies 90,294 - 90,294 90,294 - 90,294

Un-listed companies 10,523 - 10,523 5,000 - 5,000

100,817 - 100,817 95,294 - 95,294

Held-to-Maturity securities

Market Treasury Bills 8.3 1,843,309 - 1,843,309 5,940,943 - 5,940,943

Pakistan Investment Bonds 8.3 1,116,967 - 1,116,967 1,148,835 - 1,148,835Federal Investment Bonds 8.3 763,734 2,684 766,418 815,342 2,866 818,208

Certificates of Investmen t 8.6 1,354,500 - 1,354,500 4,572,758 - 4,572,758

5,078,510 2,684 5,081,194 12,477,878 2,866 12,480,744

Investment in subsidiary

Kis sa n Su p po rt Se rv ice s

(Pvt.) Limited (KSSL) 100,000 - 100,000 - - -

Total investment at cost 5,279,327 2,684 5,282,011 12,573,172 2,866 12,576,038

Provis ion for diminut ion in

value of investments

8.2(10,523) - (10,523) (413) - (413)

Investments (Net of provisions) 5,268,804 2,684 5,271,488 12,572,759 2,866 12,575,625

S ur p lu s o n r ev al ua t io n o f


20

363,011 - 363,011 245,043 - 245,043

Total investments at m arket value 5,631,815 2,684 5,634,499 12,817,802 2,866 12,820,668

(Rupees in "000")

2005

(Rupees in "000")

2006

It represents deposits maintained with SBP to comply with the regulations issued from time to time.





Note 2006 2005

8 .1 In ve st m en t b y se gm e nt s

Federal government securities

Market Treasury Bills 8.3 1,843,309 5,940,943

Pakistan Investment Bonds 8.3 1,116,967 1,148,835

Federal Investment Bonds 8.3 766,418 818,208

3 ,7 26 ,6 94 7 ,9 07 ,9 86

Fully paid up ordinary shares:

8.4 90,294 90,294

8.5 10,523 5,000

100,817 95,294

8.6 1,354,500 4,572,758

37 100,000 -

5 ,2 82 ,0 1 1 1 2, 57 6 ,0 38

8.2 (10,523) (413)

5 ,2 71 ,4 8 8 1 2, 57 5 ,6 25

20 363,011 245,043

5 ,6 34 ,4 9 9 1 2, 82 0 ,6 68

8 . 2 P a rt i cu l a rs o f p r o vi si o n

Opening balance 413 998

Charge for the year, net 10,110 -

Reversals - (585)

Closing balance 10,523 413

8.2.1 Par t icula rs of provis ion in r espec t of type and segment

Available-for-sale securities-(un-listed securit ies) 10,523 -

Available-for-sale securities-(listed securities) - 413

8.3 Pr inc ipa l te rms of investments in federa l government secur i t ies

Name of

investment

Maturit y Note Prin cip a l

payment

Rat e % Co up o n

payment

Market Treasury Bills March 2007 8.3.1 On maturity 8.6 at maturity

August 2011 to

December 2011 8.3.1 On maturity 12 to 13 semi-annually

March 2008 8.3.2 On maturity 15 semi-annually

8.3.1

8.3.2

Pakistan Investment Bonds

Federal Investment Bonds

Marke t t r easurybi l ls , Federal Investment Bonds and Pakis tan Investment Bonds are he ld by the Bank which a lso

covers statutory liquid reserve requirements.

Federal Investment Bonds having amor t ised cost of Rs. 2.684 mill ions (December 31, 2005:Rs.2.866 mill ion) a re

pledged/ lodged with SBP as secur ity for Te legraphic Transfe r /Demand Draf t discount ing faci li ty obta ined for

(Rupees in "000")

Surpluson revaluation ofavailable-for-salesecurities

Total investments at market value

Total investment at cost

Investment in KSSL

Provision for diminution in value of investments

Listed comp anies

Un-listed companies

Certificates of investment

Investments (net of provisions )

8.4

No . o f o rd in ary sh are s Pa id up

value/share

Name of

companies

2006 2005

2006 2005 Rup ees (Rup ees in "000")

280,090 280,090 10 89,297 89,297

450,000 450,000 10 585 585

150,000 150,000 10 412 412300,000 300,000 10

- -

90,294 90,294

8.4.1

8.5

Nam e of In vestee Percen tag e o f

holding

Number of

shares held

Br ea k u p va lu e Ba s ed o n

audi ted

financial

s ta tements

as a t

Name of

chief

executive/

managing

director

("Rupees")

19.13% 909,091 (2,123,845)

June 30,

2005

Mr. Assim

Jang

33.33% 1,000,000 - - Mr. M. Asad

Khan

8.33% 2,500 - -

Maj.Gen.(R)

F.A.Kha n

6.36% 141,970 - -

Mr. Anwar

Majeed

8.5.1

8.5.2

8.5.3

8.5.4

Mubarik Dairies Limited

S au d i P a k K al a B a gh Li ve st o ck Li mi te d h a s d e f a ul te d i n t h e r e pa ym e n t o f l oa n a n d t h e c as e h a s b e en r ef e rr e d t o

National Accountability Bureau.

Larkana Sugar Mil ls Limited is in the processof l iquidat ionsinceFebruary2000 and there is no probabil ity of any

recovery of am ount invested o n final settlement.

Investment inSaudiPakKalabagh LivestockLimi ted and Larkana Sugar Mil ls Limited aresta ted a t bookva luedue to

non-ava i labi li tyof r equir ed informat ion for the ca lcula t ion of breakup va lue . Moreover, these investmentsa r e fully

provided for in these financial statements.

M a rk et v al ue o f l is t ed i nv es t me n t i s R s . 4 5 0 . 80 4 m il li on a n d b o o k v a lu e o f u n -l is t ed i nv es t me n t s i s Rs . 1 0 .5 2 3

million. Face value of investment in un-listed securities is Rs. 37.220 million.

Nestle Milkpak Limited

Uqab Breeding Farm Limited

Particulars of investments held in listed companies

Pakistan Agricultural Storage

and Services Corporation

Limited

Larkana Sugar Mills Limited

8.5.2

Dadabho y Agricultural Leasing

Limited 8.4.1

Dadabho y Agricultural Leasing Limited is under susp ension since November 200 1. At the date of su spension, its

market value per share was Rs. 2.50 against its face value of Rs. 10 per share.

National Commodity

Exchang e Limited

Saudi Pak Kala Bagh Livestock

Limited 8.5.1

Particulars of investments held in un-listed companies

branches.





8 . 6 P a rt i cu l a rs o f C e r ti fi ca t e s o f In v e st m e n t s

Nam e o f in vest ee Matu rit y Prin cip a l

payment

Rat e Co up o n

payment

%

January 2007 on maturity 12.25 at maturity

8.7

Am o un t Rat ing Am ou n t Rat ing

89,297 N/A 89,297 N/A

585 N/A 585 N/A

412 N/A 412 N/A

10,523 N/A 5,000 N/A

100,817 95,294

9 ADVANCES No te 2006 2005

In Pakistan - gross 9.1 71,290,937 64,744,526

Less:

9.2 (9,7 72,751 ) (11,8 14,916 )

(4,129) (4,324)

(9,776,880) (11,819,240)

Advances-net of provision 61,514,057 52,925,286

(Rupees in "000")

Saudi Pak Industrial and Agricultural Investment

Company (Pvt.) Ltd.

National Commod ity Exchange Limited

Provision for advances to employees

Provision for non-performing advances

Loans, cash credits, running finances, etc.



Nestle Milk Pak Limited

Quality of Available-for-Sale securities

2 0, 10 4, 49 0 6 ,7 72 ,7 51 9 ,7 72 ,7 51

9.1 Par t icula rs of advances (Gross)

9.1.1 In local currency 71,290,937 64,744,526

9.1.2 Short term (upto one year) 46,566,434 38,639,419

Long term (over one year) 24,724,503 26,105,107

7 1 ,2 9 0, 9 37 6 4 ,7 4 4, 5 26

9.2

2006

(Rupees in "000")

Category o f classification

Classified

advances

Provision

required

Provision

held

Domestic

Other Assets Especially Mentioned 9,306,835 - -

Substandard 2,629,125 525,823 525 ,823

Doubtful 3,843,204 1 ,9 21 ,6 0 2 1 ,9 21 ,6 02

Loss 4,325,326 4 ,3 25 ,3 2 6 4 ,3 25 ,3 26

2 0, 10 4, 49 0 6 ,7 72 ,7 51 6 ,7 72 ,7 51Provision under portfolio audit - general - - 3,000,000

Advances includeRs.20,104.490 mill ion (December 31, 2005:Rs.23,424.374 mill ion) which havebeen placedunder

non-performing status as d etailed below:

9.3 Par t icula rs of provis ion aga inst non-per forming advances

No te Sp ecific Gen era l To ta l Sp ecific Genera l Tota l

(Rupees in "000")

Openin g b alan ce 8,819,240 3,000,00 0 11,819,24 0 22,566,660 3,000,000 25,566,660

Net charge for the year 1,767,234 - 1,767,234 4,731,992 - 4,731,992

Am ou nt s w rit te n of f 9 .5 (3,809,594) - (3,809,594) (18,479,412) - (18,479,412)

Closing balance 6,776,880 3,000,000 9,776,880 8,819,240 3,000,000 11,819,240


Sp ecific Gen era l Tot a l Sp ecific Genera l Tota l

(Rupees in "000")

In local currency 6,776,880 3,000,000 9,776,880 8,819,240 3,000,000 11,819,240

2006 2005

9 . P a rt i cu l ar s o f wr it e o f fs

9.5.1 Against provisions 9.3 3,809,594 18,479,412

9.5.2 Write offs of Rs 500,000 and above 9.6 3,693,506 5,729,521

Write offs of below Rs 500,000 116,088 12,749,891

3 , 80 9 ,5 9 4 1 8 ,4 7 9, 4 12

(Rupees in "000")

2005

2006 2005

2006

Note

9.6 Details of write offs of Rs 500,000 and above

9.7

To directors, associated com panies, etc.

Balance at beginning of year 34,263 34,263

Repayments/write offs (34,263) -Balance at end of year - 34,263

10 OPERATING FIXED ASSETS

Property and equipment 10.1 813,408 690,141

Intangible assets 10.2 3,595 -

817,003 690,141

Debts due bycompanies or f irmsin which the directors of the bankare interested as directors, par tnersorin the case of private companies as members

In t e rm s o f su b- sec ti on ( 3) o f Sec ti on 3 3 A o f t h e Ban ki ng Co m p an ie s O rd in ance , 1 9 6 2 t h e s t at em en t i n

respectof wr it ten-of f loansor anyother f inancialrel ief of f ivehundred thousand rupees or above al lowedto a person(s)dur ingthe yearended December 31,2006 inrespect ofproject loans only given at annexure-

1. However, this write off does not effect the Bank's right to recover debts from these customers.

Particulars of loans and advances





10.4 List of vehicles disposed off during the year

1 0 . 1

P r o p e r t y a n d e q u i p

m e n t s

P a r t i c u l a r s

A t J a n u a r y 1 ,

2 0 0 6

A d d i t i o n s

( D e l e t i o n s ) /

a d j u s t m e n t s

A t

D e c e m b e r

3 1 , 2 0 0 6

A t

J a n u a r y 1 ,

2 0 0 6

C h a r g e f o r

t h e y e a r

( D

e l e t i o n s ) /

a d

j u s t m e n t s

A t

D e c e m b e r

3 1 , 2 0 0 6

B o o k v a l u e

a t

D e c e m b e r

3 1 , 2 0 0 6

R a t e o f

D e p r e c i a t i o n

F r e e h o l d l a n d

1 7 0 , 9 6 1

-

-

1 7 0 , 9 6 1

-

1 7 0 , 9 6 1

-

L e a s e h o l d l a n d

1 0 , 6 4 0

-

-

1 0 , 6 4 0

1 , 1 9 4

3 9 8

-

1 , 5 9 2

9 , 0 4 8

-

B u i l d i n g o n f r e e h o l d

l a n d

1 3 7 , 8 8 6

-

-

1 3 7 , 8 8 6

1 9 , 9 2 7

5 , 8 9 8

-

2 5 , 8 2 5

1 1 2 , 0 6 1

5 %

B u i l d i n g o n l e a s e h o l d h o l d l a n d

3 0 3 , 7 3 2

6 6 8

-

3 0 4 , 4 0 0

5 4 , 7 7 7

1 2 , 4 6 4

-

6 7 , 2 4 1

2 3 7 , 1 5 9

5 %

F u r n i t u r e f i x t u r e a n d

e q u i p m e n t

7 3 , 8 1 8

5 7 , 8 3 6

( 4 , 8 9 5 )

1 2 6 , 7 5 9

3 7 , 0 6 0

2 3 , 5 5 8

( 2 4 2 )

6 0 , 3 7 6

6 6 , 3 8 3

1 0 / 3 3 %

V e h i c l e s

2 4 2 , 4 3 0

1 8 3 , 9 1 2

( 5 1 , 2 1 9 )

3 7 5 , 1 2 3

1 3 6 , 3 6 8

6 1 , 9 3 4

( 4 0 , 9 7 5 )

1 5 7 , 3 2 7

2 1 7 , 7 9 6

2 0 %

2 0 0 6

9 3 9 , 4 6 7

2 4 2 , 4 1 6

( 5 6 , 1 1 4 )

1 , 1 2 5 , 7 6 9

2 4 9 , 3 2 6

1 0 4 , 2 5 2

( 4 1 , 2 1 7 )

3 1 2 , 3 6 1

8 1 3 , 4 0 8

2 0 0 5

1 , 1 5 4 , 9 2 8

2 4 , 9 4 5

( 2 4 0 , 4 0 6 )

9 3 9 , 4 6 7

1 7 7 , 9 4 3

8 5 , 8 0 6

( 1 4 , 4 2 3 )

2 4 9 , 3 2 6

6 9 0 , 1 4 1

1 0 . 2

I n t a n g i b l e a s s e t s



2 0 0 6

A d d i t i o n s

( D e l e t i o n s ) /


A t

D e c e m b e r

3 1 , 2 0 0 6

A t

J a n u a r y 1 ,

2 0 0 6

C h a r g e f o r

t h e y e a r

( D

e l e t i o n s ) /

a d

j u s t m e n t s

A t

D e c e m b e r

3 1 , 2 0 0 6

B o o k v a l u e

a t

D e c e m b e r

3 1 , 2 0 0 6

R a t e o f


C o m p u t e r s o f t w a r e

-

5 , 3 9 3

-

5 , 3 9 3

-

1 , 7 9 8

-

1 , 7 9 8

3 , 5 9 5

3 3 . 3 3 %

2 0 0 6

-

5 , 3 9 3

-

5 , 3 9 3

-

1 , 7 9 8

-

1 , 7 9 8

3 , 5 9 5

2 0 0 5

-

-

-

-

-

-

-

-

-

1 0 . 3

T h e d e t a i l o f d i s p o s a

l o f a s s e t s w h o s e o r i g i n a l c o s t o r t h e b o o k v a l u e e x c e e d o n e m i l l i o n a n d t w o h u n d r e d f i f t y t h o u s a n d r u

p e e s r e s p e c t i v e l y , w h i c h e v e r i s l o w e r i s n i l .

( R u p e e s i n " 0 0 0 " )

C o s t


C o s t


( R u p e e s i n " 0 0 0 " )





Jaaved Shahzad 3553/23 Freed Abad Multan

M. Zafar Iqbal, 17C, Schem e No 2, R.Y. Khan.





No te 2006 2005

11 DEFERRED TAX ASSETS/(LIABILITIES)

Deferred tax arising in respect of tax depreciation (7,629) 1,829

1 2 O TH ER AS SETS

Income/mark-up accrued in local currency held in banks 74,107 74,258Income/mark-up accrued on loans and advances 2 ,3 61 ,8 14 2 ,0 85 ,4 87

Income/mark-up accrued on investments 72,517 103,768Advances, deposits, advance rent and other prepayments 80,391 63,902

Tax recoverab le 12.1 308,053 308,053

Non-banking assets acquired in satisfaction of claims 12.2 223,881 209,574Branch adjustment account - 792,819

Suspense account 2,001 3,848

Stationery and stamps in hand 13,035 10,970

Relief pa ckages - 939,468Receivable from defined benefit plans 12.3 3,779,485 1,936,411

Stock in hand 14,565 14,640

Commutation paid to employees under SR-2005 2,969,446 -

Receivable from Federal Government against golden hand shake scheme 485,787 2,643

Receivable from Pension Trust Fund against go lden hand shake scheme 12.4 67,901 117,901

Receivable from Benevolent Trust Fund against go lden hand shake scheme 12.4 17,250 17,250

Others 12.5 16,187 15,208

1 0, 48 6, 42 0 6 ,6 96 ,2 00

Provision held against other assets 12.6 (2,076,978) (28,737)Other assets (net of provision) 8 ,4 09 ,4 42 6 ,6 67 ,4 63

12.1

12.2

12.3 Receivable from defined benefit plans

Pension scheme 32.1 2 ,4 36 ,69 3 7 78 ,7 01

Benevolent scheme-officers/executives 32.2 188,855 156,435

Benevolent scheme-clerical/non-clerical 32.3 (15,753) (34,760)

Gratuity scheme 32.4 1,169,690 1,036,035

1 2.3 .1 3 ,7 79 ,48 5 1,9 36 ,4 11

12.3.1

12.4

(Rupees in "000")

Deferred taxasset/liabilities arise due to temporarydifferenceon account of depreciation charged on operating fixed

a ss et s . Th e a m o u n t o f d e fe rr ed t a x p r o vi de d i s b a s ed o n t h e e xp e ct e d m a n n e r o f r ea li za t io n o r s et t le m en t o f t h e

ca rrying amountof asse tsand l iabil it ies using the tax ra tes enacteda t theba lance sheet da te .Adefe r red taxassets i s

recognized only to the extent it is probable that future taxable profit will be available and the credits can be utilized.

This includes anamount ofRs297.149mil lionreceivable on accountof minimum incometax levied bythe incometaxauthori t ie sunder Sec t ion 80-Dof IncomeTaxOrdinance ,1979, forassessment year s1991-92 to 1998-99.The income

of the Bankwas exemptf rom taxupto incomeyearended June 30,1999. The Bankpa id,underprotes t , the disputed

taxdemand and a lso f iled wr it pe t it ion inthis r espect inLahore High Cour t ,RawalpindiBench, Rawalpindi .La te r on,

the bankwithdrew the pe t it ionon direc tionsof the Federa l Government and the case wasre fe r red to the Law and

Justice Divisionof the Government of Pakistan(GoP)which decided the reference in Bank’sfavour. TheCentralBoardof Revenue disagreed wi th the a foresa id dec is ion and has fur the r taken up the mat ter with Federa l Cabinet for i t s

r eview. Federa l cabine t has r e fe r red the case to the Attorney General for f ina l dec is ion.The advice /dec is ion of the

AttorneyGeneralis stillawaited. Sincet he Bankisvery confident for a favourable decision from the AttorneyGeneral,

no provision in this respect has been made by the Bank in its books of account.

It representsassets recognized by the Bankas required by International Accounting Standard-19"EmployeeBenefits"

against its defined benefit schemes on the recommendation of independent actuaries.

I t r epresents the amountr ece ivable f rom Pension Fund Trustand Benevolent Fund Trusts aga instGolden Hand ShakeScheme

Marke tva lue of non-banking asse tsacqui red insa t i sf act ion of c la ims isRs379.415 mill ion (December31, 2005:

358.680 million).

No te 2006 2005

12.5 Others

Defence saving certificates 5 17

Advance for purchase of machinery/goods in transit 17 17

Leg al ch ar ges reco vera ble o n su it s file d a ga in st lo an d efau lt er 1 6,1 66 1 5,1 74

1 6, 18 8 1 5, 20 8

12.6 Provision against other assets

Opening balance 28,737 5,615,277

Charge for the year 12.6.1 2,048,971 12,936

Amount written off (730) (5,599,476)

Closing balance 2,076,978 28,737

12.6.1

13 BILLS PAYABLE

In Pakistan 276,333 235,741

1 4 BO RRO WIN GS

In Pakistan 14.1 51,257,213 5 1,257,213

14.1 Par t icula rs of bor rowings wi th r espec t to cur renc ies

In local currency 14.2 51,257,213 51,257,213

14.2 Deta il s of bor rowings-secured

Borrowings from SBP

Agricultural loans 14.3 50,174,089 50,174,089

Agri-Project loans 14.4 1,083,124 1,083,124

5 1 ,2 5 7, 2 13 5 1 ,2 5 7, 2 13

14.3

Whileeva lua t ing the per formance of the slow moving ADBcategory “B” loans ina mee t ing da ted March 17, 2007

cha ir edby theAdvisor to thePr ime Minste ron Financeand EconomicAf fa i rs , i twas dec idedto have negot ia t ionswi th

ADB’s forthcomingMission for waiver of conditionalitiesfor release of thirdtranche whichcannot be complied with.If

AD B d o es n o t a g re e t o t h e p r o p o sa l o f w a iv er s, t h e p r o g ra m l oa n a m ou n t in g t o US $ 7 5 m il li on m a y b e c an ce ll ed .

Ke e pi ng i n v i ew t h e a b ov e p o s it io n , p r ov is io n h a s b e e n m a d e i n t h e f in a nc ia l s t a t em e nt s a m o un t in g t o Rs . 2 , 04 9

mill ion be ing the di ff e renceof c la im amount ing to Rs. 3,455 mill ion and the amount a l readyrece ived by the GoP

amounting to Rs. 1,407 million out of second tranche proceeds.

As p e r a g re e me n t w it h t h e S BP, t h es e l oa n s w e re o b t ai ne d f o r p r ov id in g f in a n ce t o c u st o m er s f o r a g ri cu lt u re

purposes .Three c redi t l ines amount ing to Rs. 1.577bi l lioncar ryinte r es t r a te of 4.00%per annum while r emaining

thi rtytwo credi t l ines amount ing to Rs.49.680bi l lionare based on profi tand loss sharingsubject to maximumshare

of profi t to SBPrangingf rom 4.00%to 10.00%per annum.These loansa re securedby wayof guaranteeof GoP. The

Ba n k h a s s u bm it t ed a p r op o sa l t o S BP f o r r e s tr u ct u ri ng t h e d e b t a cc or d in g t o w h ic h t h e S BP 's d e bt o f Rs . 5 1 . 2 57

bi ll ion and SBP's subordinated debtof Rs.3.204 bi ll ion isr epayable in15 equa lannua l insta llmentscommenc ing f rom

2006onward with theprovis ion to makerepaymentof thesubordina teddebt inthe las t insta llment and ra teof mark

up to be peggeda t we ightedaverageyie ld of 12 monthsTreasuryBi ll r a te of2.3558%per annumas per t r easurybi l l

auction dated June 12, 2003 and capped at the aforesaid markup rate for an initial period of five years.

The Bank announced Staf f Regula t ion-2005 underwhich100% commuta t ion werepa id to thosewho opted forSR-

2005.ADBvide i t sAide-Memoire13-March 29,2006 supportedthe int roduc tionof SR-2005 and useof the remaining

loan proceedsf rom the second tr anche for thispurposeon theGoPconf irmat ion wi th regard to theuse of r emaining

s ec on d t r an ch e p r og r am m e l oa n p r oc ee d s f o r t h e i mp le m en t at io n o f t h e S R- 20 0 5. Th e Ba n k s h a r e o u t o f s ec on d

tr anche amounted to US$ 34 mill ion. About US$ 9 mill ion had a lr eadybeen ut i lized aga instVolunta ryGolden Hand

S ha ke S ch e me ( VGHS S) a n d t h e b a la n ce o f a b o ut US $ 2 5 m il li on a r e l yi ng w it h t h e M o F. Th e ADB a l so a g re e d t o

consider the useof the thi rd t r anche proceeds(about US$ 47 mill ion) for the implementa t ion of Bank's SR-2005, on

the basis of posit ion of non-per formingloansof the Bankaf te r the management audit . FinanceDivisionof GoPvide

let te rNo.F.3(18) IF-1/2002 da ted May18,2006 confi rmed to ADBtha tFinance Divis ion hasno objec t ion for the useof

the remaining loan proceeds from the 2nd tranche for the proposed Bank’s SR-2005.

(Rupees in "000")




45 Zarai Taraqiati Bank Limited Annual Report 2006

14.4

Note 2006 2005

15 DEPOSITS AND OTHER ACCOUNTS

Customers

Fixed deposits 63,092 64,742

Saving deposits 202,684 111,724

Current accounts - remunerat ive 188,240 297,174

Current accounts - non-remunerative 2,399,173 2,136,334

Others - unclaimed deposits 29,195 34,673

1 5. 1 2 ,8 82 ,3 84 2 ,6 44 ,6 47

1 5 . 1 P a rt i cu l ar s o f d e p o s it s

In local currency 2,882,384 2,644,647

16 SUB-ORDINATED LOAN

SBP vide its letters No. ACD/3104/Loans-15-A/2004 dated December 16, 2004 and ACD/14/Loans-15-A/2004 dated

January4, 2005 hasagreed with proposed te rms except the proposed capping ofmarkup ra tewhichhas beenf ixed

on last auc t ion'sweighted yie ldof Government TreasuryBil lof 12 monthsmatur i ty on f loa t ing basis everyyearand

repayment of the SBPdebts in15 year sin 30 bi-annua l insta llments wi th a grace per iod of3 year ssta r t ing f rom July

2003, i .e . the per iod of 15 year sfor r epayment of SBP debtswi l l s ta rt f rom July 2006.The subordinated debt of Rs.

3.204bi l lion sha ll be repaid inthe last insta llment . In view of the cri t ica l importanceof debt pr ic ing for the future

f inancia lviabi li tyand susta inabi li tyof the Bankthe mat te rhas beenrefe rr edto Minist ryof Financefor a considered

Government dec is ion. Tr ipar t ite mee t ing of SBP, Minist ryof Finance and the Bank to f ina l ize the debt mora tor ium

p a ck ag e i s y et t o b e c on ve n ed . K ee p in g i n v ie w t h e a b o ve s t at e d f a ct s m a r k- up h a s b e e n c h a rg e d o n t h es e l o a ns a s

per existing contractu al rates in respective credit lines.

As per rest ruc turingplanof the Bankapproved bythe ECCof the cabine t ,SBP'sEquityholding ofRs.3.204bi l lionwas

conver ted into subordinated loan on te rmsto be agreed with SBP. Accordingly, theBankhas submit teda proposa l to

SBPfor rest ructur ing the debtaccordingto which the SBP's debt ofRs.51.257 bi ll ion and SBP's subordinated debt of

Rs. 3.204bi l lion isr epayable in 15 equa lannua l insta llments commencing f rom 2006 onward with the provisionto

m a ke r ep a ym e n t o f t h e s u bo r di na t ed d e b t i n t h e l as t i ns t al lm e n t a n d r at e o f m a rk u p t o b e p e g ge d a t w e ig h t ed

averageyieldof 12 monthsTreasuryBil l r a teof 2.3558% perannum asper TreasuryBi llauc t ion da tedJune 12,2003

and capped at the aforesaid markup rate for an initial period of five years.

These loanswere given by the SBP for the purpose ofprovidingf inance to agrobased indust ry. Theseare subjec t to

p r of it a n d l o s s s h a ri ng w it h a m a xi mu m s h ar e o f p r of it t o S BP r a n g in g f ro m 4 . 00 % t o 6 . 00 % p e r a n nu m . T h es e a r e

s ec ur ed b y g u a r an t ee g iv en b y t h e G oP. Th e Ba n k h a s s u bm it t ed a p ro p o sa l t o SBP f or r es t ru ct u ri ng o f t h e d e b t a s

stated in note 14.3.

Since the capping ofmark-up chargesa t 2.3558%has not beenagreed bySBPwhichis ofc r i t ica l importance for the

f ut u re f in a n ci al v ia b il it y a n d s u st a in a b il it y o f t h e Ba n k, t h e m a tt e r h a s b e en r ef er re d t o M in is t ry o f Fi na n ce f o r

considered government dec is ion.However the mark-upon subordinated debta t thera te of2.3558%(f rom December

1 4 , 2 0 0 2 t o J un e 3 0 , 2 0 04 ), 2 . 18 6 7% ( f ro m J ul y 1 , 2 0 0 4 t o J un e 3 0 , 2 0 05 ), a t t h e r a te o f 8 . 4 00 9 % ( fr o m J u ly 1 , 2 0 05

t o J un e 3 0 , 2 0 06 ) a n d a t t h e r at e o f 8 . 79 0 7 % ( fr o m J u ly 1 , 2 0 06 t o De ce m b er 3 1 , 2 0 06 ) h a s b e e n c h ar ge d w h ic h i s

subject to adjustm ent on finalization of debt restructu ring/repricing agreement with SBP.

SBP vide its letters No. ACD/3104/Loans-15-A/2004 dated December 16, 2004 and ACD/14/Loans-15-A/2004 dated

January4, 2005 hasagreed with proposed te rms except the proposed capping ofmarkup ra tewhichhas beenf ixed

on last auc t ion'sweighted yie ldof Government TreasuryBil lof 12 monthsmatur i ty on f loa t ing basis everyyearand

repayment of the SBPdebts in15 year sin 30 bi-annua l insta llments wi th a grace per iod of3 year ssta r t ing f rom July

2003, i .e . the per iod of 15 year sfor r epayment of SBP debtswi l l s ta rt f rom July 2006.The subordinated debt of Rs.3.204 billion shall be repaid in the last installment.

(Rupees in "000")

Not e 2006 2005

17 OTHER LIABILITIES

Mark-up/return/interest payable in local currency 9,359,844 6,624,360

Accrued expenses 32,785 37,512

Current taxation (provision less payments) 471,825 672,032

Branch adjustment 34,105 -

Contributory provident fund-SR 2005 17.1 10,000 -

Gratuity fund-SR 2005 17.1 22,197 -

Benevolent fund (officer)-SR 2005 17.1 273 -

Security deposits 114,309 209,153

Payable to Ministry of Food Agriculture and Livestock 17.2 177,715 352,715

Profit payable on deposits and other accounts 19,077 19,282

Liabilit ies relating to Bangladesh 17.3 189 189

Pro visio n fo r e mp lo ye es' p ost re tire me nt me dica l b en efit s 3 2. 5 3,2 71,9 61 3 ,6 49 ,6 71

Provision for employees' compensated absences 32.6 437,659 355,011

Payable to employees' against golden handshake scheme 35,777 33,133Kissan Support Services (Private) Ltd. 3,538 -

Sundry deposits 219,721 140,919

Deferred income 7,399 2,048

Others 5,094 4,306

1 4, 22 3, 46 8 1 2, 10 0, 33 1

17.1

17.2

17.3 Liabili t ies relating to Bangladesh

Liabilit ies 1,372,794 1,343,424

Assets (1,372,605) (1,343,235)

17.3.1 189 189

17.3.1

18 SHARE CAPITAL

Authorized capital

2,500,000,000 ordinary shares of Rs. 10 each

( De ce mb er 31 , 2 00 5: 2, 50 0, 00 0, 00 0 o rd in ar y s ha re s o f Rs .1 0 e ac h) 2 5, 00 0, 00 0 2 5, 00 0, 00 0

Issued, subscribed and paid up

1,186,961,201 ordinary shares of Rs. 10 each fully paid

18.1 11,869,612 11,869,612

(Rupees in "000")

This representsthe amount of Rs.9.715 million(December31, 2005:Rs.9.715 million),Rs.168.000million (December

31,2005:Rs.168.000 million)and Rs .Nil(December 31,2005: Rs .175.000million) payable to Ministry of Food

Agriculture and Livestock under Japanese KR-II grant-1996, Crop Maximization Project-productivity enhancement

on sustainable basis and incentive for Balochistan respectively.

This representtemporaryarrangement due to delayin es tablishment of trus ts for the funds underSR-2005.These

amoun ts will be transferred to respective Trust Funds as soon as the establishment of th ese have been finalized.

(December 31, 2005: 1,186,961,201 ordinary shares of Rs.10

each fully paid)

This represents the amount relating to the activ it ies of the Bank in Bangladesh (formerEas t Pakis tan)before its

separation. In accordance with the Finance Divis ion letter No.F.5(12)PEC(op-FR)/78-236 dated May6, 1979 the

Bankhas to calculate interest on the loans madein Bangladesh as itdoes inthe case ofcorresponding borrowings

made from the SBPand insteadof carryingthe interest to profitand lossaccount,willshow itin the balancesheet

o n ly. Th e Ba n k i s a c c ru in g i nt e re st a t t h e r a t e o f 8 % o n i ts l oa n s a n d a d va n ce s m a d e i n B an g la d es h wi t h c on t ra

increase in its liabilities relating to its act ivities in Bangladesh.





18.1 Shareholder No of ordina ry

shares

Paid-up value

per share

2006 2005

Government of Pakistan 1,185,961,201

277,100

119,000

68,000

35,900

500,000

10 11,859,612 11,859,612

Government of Punjab 10 2,771 2,771

Government of Sindh 10 1,190 1,190

Government of NWFP 10 680 680

Government of Balochistan 10 359 359

Erstwhile East Pakistan 10 5,000 5,000

1,186,961,201 11,869,612 11,869,612

(Rupees in "000")

19 RESERVES St a tu t ory

reserves

Reserves for

contingencies

Total

(Rupee s in "000")

Balance as at January 1, 2006 215,387 30,00030,000

245,387

Transfer from unapropriated profit 83,961 113,961

Balance as at December 31, 2006 299,348 60,000 359,348

19.1

19.2 The Bank has set aside contingency reserve for insurance of cash, building and vehicles.

20 SURPLUS ON REVALUATION OF ASSETS Not e 2006 2005

(Rupees in "000")

Surplus on revaluation of securities

i) Quoted shares 360,511 242,543

ii) Other securities 2,500 2,500

20.1 363,011 245,043

20.1 All the a bove-men tioned securities are Available-for-Sale securities.

21 CONTINGENCIES AND COMMITMENTS

21.1

21.2

21.3

21.4

S ta t u to r y r es e rv e r ep r es e nt r es e rv e m a in t a in e d a s p e r r eq u ir em e n t o f S ec t io n 2 1 o f t h e Ba n ki ng C om p a n ie s

Ordinance, 19 62.

Contingent l iabi li tyinrespect of17 cases (December 31, 2005:15 cases) f iledaga inst the Bankby variouspar t ies is

estimated at Rs. 8.229 million (December 31, 2005 : Rs. 11.307 million).

Contingent l iabi li tyin respec tof 43 cases (December 31, 2005:5 cases) f i led aga inst the Bank in variouscour tsof

law by the employees is estimated at Rs. 5.578 million (December 31, 2005: Rs. 0.572 million).

Income taxof Rs.929.632 mill ion waslevied bythe income taxdepar tmentfor assessment year2001-2002,aga inst

provisionof Rs. 326.281mil lionin the booksof accounts of the Bank for tha t assessmentyear. The Bank has pa id

Rs. 785.103mil lion and a lso f iledappea l before the Commissionerof Income Tax (Appea ls) aga inst the aforesa ido r de r. Th e Co m m is si on e r h a s s et -a s id e t h e a fo r es a id o r de r. Ho w ev er, t h e t a x d e p ar t me n t p r ef er re d a n a p p ea l

against t he orde r of CIT(A) before the ITATwhich is pend ing for hearing .

In c om e t a x o f Rs . 1 , 92 8 .3 6 2 m i ll io n w a s l ev ie d b y t h e i nc o me t a x d e p a rt m e nt f o r a s s es sm e n t y ea r 2 0 0 2- 20 0 3 ,

aga inst provisionof Rs. 1,919.929 mill ion in the booksof account of the Bank for tha t assessmentyear. The Bank

has pa idRs.577.092 mill ion aga inst the sa id demand and a lso f iledan appea lbefore the Commissionerof Income

Tax (Appea ls). The Commissioner has se t -aside the aforesa id orderand now tax depar tment pre fe r red an appea l

aga inst t he ord er of CIT(A) befo re the ITAT.

21.5

21.6 Th e G oP h a s r ed u ce d t h e m a rk -u p r a te s o n t h e Ba n k a d va n ce s f ro m 1 4 .0 0 % t o 9 . 00 % v id e P re s id e n ti al Re li ef

P ac ka g e 2 0 0 4 i . e. J ul y 1 , 2 0 0 4. As p e r t h e d ir ec t iv e o f t h e Ba n k' s B o ar d o f D i re ct o rs , t h e Ba n k h a s r eq u e st e d t h e

M in is t ry o f F in a n ce t o c o mp e n sa t e t h e l os s o f r ev en u e d u e t o t h is r ed u ct io n i n r a t e o f m a rk -u p . T h e t o t a l c l ai m i n

t h is r es pe ct h a s p ro vis io n all y b e e n w o rk ed o u t a t Rs . 6 ,7 3 8. 00 0 m illi on f or t h e p er io d f ro m Ju ly 1 , 2 0 04 t o

D ec em b e r 3 1 , 2 0 0 6. Ho w e ve r, t h is a m o u nt h a s n o t b e en a cc o un t e d f o r i n t h e f in a n ci al s t at e m en t s a s t h e f o rm a l

approval from Ministry of Finance has not been received by the Bank.

The SBPdebt ofRs.54.461 bi ll ion is in the processof repricing/r est ructur ing. Asper Bankrest ructur ing planthe SBP

debt was required to link with one year T-Bill rate capped at 2 .3558 % p lus profit and loss (PLS) sharing, the decision

iss t i llpending. The SBPdebt hasbeen charged a t exis t ing ra te i .econtr ac tua l r a te ,as the SBPhas not ye taccepted

the capping and PLSar rangements . The f inanc ia l impac t of thisevent works out to be approximatelyRs.1,020.036

million. However, whileissuing balanceconfirmation certificate to the auditors,SBPreported Rs.15,777.331 million

as outs tanding markup asaga inst Rs.9,957.444m ill ion worked out bythe Bank.Therepor tedSBPf igurehas been

w o rk ed o u t w it h o u t a p p li ca t io n o f P LS s h a ri ng a r ra n g em e n t, w h e re a s t h e Ba n k h a s b e e n a p p l yi ng m a rk u p a s p e r

existing contractual arrangements which includes PLS sharing as well.

Note 2006 2005

(Rupees in "000")

22 MARKUP/RETURN/INTERESTEARNED

On loans and advances to customers 4,576,510 5,479,450

On investments in Held-to-Maturity securit ies 465,419 290,496

On deposits with financial institutions 954,101 1,052,7735 ,9 96 ,0 30 6 ,8 22 ,7 19

23 MARKUP/RETURN/INTERESTEXPENSED

Deposits 2,961 5,115

Long term borrowings-SBP 2,798,557 385,502

Bank commission and other charges 1,267 1,1212,802,785 391,738

2 4 OTHER INCOME

Rent on property 6,577 7,326

Gain on sale of fixed assets 37,116 23,591

Loan application fee 345,512 309,875


Reversal of provision relat ing t o d efined benefit plan s 24.1 2,110,467 270,279

Others 24.2 2,999,873 185,269

5,514,077 828,519

24.1

24.2 Others

Recovery of loans transferred to proforma ledger 2,858,182 15,250

Sale proceeds of forms 4,227 3,771

Postal charges received from loanees 49,500 44,226

Miscellaneous income 87,964 122,022

2,999,873 185,269

Exc e ss p r ov is io n i n r es pe c t o f d e fi ne d b e ne fi t p la n s h a s b e e n wr it t e n b a c k o n t h e b a si s o f a c tu a ri al v al ua t io n

carried out by an independent actuarial valuer.





25 ADMINISTRATIVE EXPENSES

Salaries, allowances etc. 2,141,375 2,062,107

Charged for defined contribution plan - Provident Fund 238 240

Non-executive directors' fees, allowances and other 1,901 649

Rent, taxes, insurance, electricity, etc. 76,832 75,231

Legal and professional charges 21,160 3,800

Communications 33,676 35,275

Repairs and maintenance 13,021 10,534

Motor vehicles 169,242 162,920

Stationery and prin ting 24,798 21,968

Advertisement and publicity 11,757 14,142

Auditors' remuneration 25.1 2,944 3,386

Depreciation 106,051 85,806

Amortization of preliminary expenses - 6,570

14,532 32,178

Travelling 76,855 72,579Others 66,070 24,952

2 ,7 60 ,4 52 2 ,6 12 ,3 37

Amortization of deferred income

Note 2006 2005

(Rupees in "000")

2 5 .1 Aud i t o rs ' r e m u ne r a t io n

Audit fee 1,200 1,200

Special cert ifications and sundry advisory services 380 400

Tax services 274 227

Out of pocket expenses 226 226

TA/DA for auditors 864 1,333

2,944 3,386

25.2 Par ticulars of auditors ' remuneration

MYASCO** KMRSRIR* Tot al Ria z

Ahmad &

Company

KMRSRIR* Tot al

(Rupees in "000")

Audit fee 600 600 1,200 600 600 1,200

Tax services - 274 274 - 227 227

Other cert ification 170 210 380 200 200 400

Out of pocket expenses 545 545 1,090 1,014 545 1,559

1,315 1,629 2,944 1,814 1,572 3,386

* Khalid Majid Rahman Sarfaraz Rahim Iqbal Rafiq

** M.Yousuf Adil Saleem & Co.2006 2005

(Rupees in "000")

2 6 OTHER C HARGES

Penalties imposed by SBP 306 3,802

2 7 TAXATIO N

For the year

Current 217,539 38,434

Deferred 9,458 (607)

226,997 37,827

2006 2005

27.1 Relationship between tax expense and accounting prof it

Accounting profit/(loss) for the year 646,803 (91,367)

Add: accounting depreciation 106,051 85,806

provision for diminution in the value of investment 10,110 -

Less: tax depreciation (97,798) (23,129)

dividend income for separate consideration (6,458) -

assesed loss for tax year 2006 (38,091) -

620,617 (28,690)

Tax-excluding dividend income 217,216 38,111

Tax on dividend income 323 323

Tax for the current period 217,539 38,434

Applicable tax rate 35% 0.5%

28 BASIC EARNINGS PER SHARE

Profit/(loss) for the year 419,806 (129,194)

We ig ht ed ave ra ge nu mb er of or din ar y sh ar es (n um be r in th ou sa nd ) 1 ,1 86 ,9 61 1 ,1 86 ,9 61

Basic earnings per share (rupees) 0.35 (0.11)

Note 2006 2005

(Rupees in "000")

29

30 CASH AND CASH EQUIVALENTS

Cash and balance with treasury banks 6 1,295,464 1,585,421

Balance with other banks 7 7,781,056 7,813,844

9 ,0 76 ,5 20 9 ,3 99 ,2 65

2006 2005

31 STAFF STRENGTH Num ber

Permanent 5,326 5,727

Others (on deputation) 1 -Total staff strength 5,327 5,727

32 DEFINED BENEFIT PLANS

32.1 Pension scheme

32.1.1 General description

32.1.2 Principal actuarial assum ption

Valuation discount rate 10% per annum

Expected rate of increase in salary 9% per annum

Expected rate of return on investments 10% per annum

There is no dilutive effect on the basic earning per share of the Bank which is calculated above.

For employeeswho optedfor the scheme in troduced inyear1975for cler ical/non-cl er ical s t aff and in the year1977for

offi cers /execu t ives, t he Bankoperat esan approvedfunded pens ion scheme on which month lycon t r ibu t ionsare made

on the bas is o f actuar ial recommendat ion . However, mos t o f the offi cers /execu t iveshave been excluded from th is

scheme after opting new Staff Regulations introduced in 2005 (SR-2005) effective from July 1, 2006.

The lates t actuari alvaluat ion i scarr ied ou t as at December31 , 2006. The actuar ial valuat ions were made us ing the

Projected Unit Credit (PUC) method based on the following significant assumptions:





2006 2005

(Rupees in "000")

32.1.3

Present value of defined benefit obligation 1,604,684 2,794,466

Fair value of p lan assets (4,254,458) (4,057,773)

Net actuarial gains not recognized 213,081 484,606

(2 ,4 36 ,6 93 ) (7 78 ,7 01 )

32.1.4 Movement in net liability/(asset) recognized

Opening net asset (778,701) (552,942)

Charge for the period 32.1.5 1,389,641 (138,553)

(3 ,04 7,6 32 ) (87 ,2 06)

Closing net asset (2,436,692) (778,701)

32.1.5 Charge/(prepaid) for pension fund

Current service cost 58,452 52,126

Interest cost 251,502 176,730

Expected return on plan assets (365,200) (310,861)

Actuarial gains recognized (59,827) (56,548)

Curtailment and settlement loss 1,504,714 -

1,3 89 ,64 1 (1 38 ,55 3)

32 .2 Benevo len t s cheme - o ff icers /execu t ives

32 .2 .1 General descr ip t ion

32 .2 .2 Principal actuari al as sumpt ion

Expected rate of increase in salary 9 % per annum

Expected rate of return on investments 10 % per annum

Note 2006 2005

(Rupees in "000")

32.2.3

Present value of defined benefit obligation 163,623 187,332

Fair value of p lan assets (400,372) (386,738)


Negative past service cost-not recognized 769 -

(1 88 ,8 55 ) (1 56 ,4 35 )

Contribution to fund/benefits paid during the year

Reconciliation of pa yable/(receivable) to/(from) pe nsion fund

Reconciliation of pa yable/(receivable) to/(from) be nevolent fund

For al lo ff icers/ execu t ives, t he Bankoperat esan approvedfundedbenevo len t scheme to whichcon t r ibu t ionsare made

at therat e of2% ofbas i cpay to a maximum ofRs .100 ,by eachoff icer/ execu tive.Employee con tr ibu t ionsare matched

b y a n e q ua l a m o un t o f c o nt ri bu t io n s b y t h e Ba n k w h i ch i s a l so l ia b le t o m e e t a n y s h o rt f al l i n t h e f un d . Ho w ev er

con tr ibu t ionsare no t made to the fundfor those employeesgoverned by the SR-2005 who have less than ten yearsof

their remaining service.

The lates t actuar ialvaluat ion i scarri edou t asat December31 , 2006. Actuar ialvaluat ion wasmade us ing thefo l lowing

significant assumptions:



Charge for the period 32.2.5 (24,818) (11,346)

(7,603) (4,671)

Closing net asset (188,856) (156,435)

32 .2 .5 Charge/(p repaid ) fo r benevo len t fund




Acturial gains recognized (358) (689)

Contribution-employee (7,603) (4,671)

Negative past service cost-recognized (6,917) -

(24,818) (11,346)

32 .3 Benevo len t s cheme - c ler i cal /non-cler i cal


32 .3 .2 Principal actuar i al as sumpt ion



Note 2006 2005

(Rupees in "000")

32.3.3


Fair value of plan assets (184,021) (171,473)

Unrecognized part of transitional liability - (7,606)

Net actuarial gains/(losses) not recognized 157,675 164,542

15,753 34,760


Opening net liability 34,760 43,643


(3,823) (2,636)

Closing net liability 15,753 34,760





Actuarial (gains)/losses recognized (11,338) (12,874)


Transitional liability recognized 7,606 15,178

Past service cost-recognized 3 -

(15,184) (6,247)


The lates t actuar ialvaluat ion i scarri edou t as at December31 , 2006. Actuar ialvaluat ion wasmade us ing the fo llowing


For al l c ler ical/non-cl eri cal s t aff , t he Bankoperat esan approved funded benevo len t scheme to which con tr ibu t ionsare

made at d i fferen t rat esbu t no texceed ing Rs .100 byeach employee.Employeecon t r ibu t ionsare matched byan equal

amount of contributions by the Bank which is also liable to meet any shortfall in the fund.

Reconciliation of payab le/(receivable) to/(from) benevolent fund






32.4 Gratuity scheme


32 .4 .2 Principal actuar ial as sumpt ion



32.4.3

Present value of defined benefit obligation 74,588 275

Fair value of plan assets (1,336,398) (1,296,996)


Past service cost not recognized (74,543) -

( 1, 16 9 ,6 9 0) ( 1, 0 36 , 03 5 )


Opening net asset (1,036,035) (914,550)


(6,069) (7,352)

Closing net asset (1,169,690) (1,036,035)

Note 2006 2005

(Rupees in "000")

32 .4 .5 Charge/(p repaid ) fo r g ratu i ty fund

Current service cost 34 79

Interest cost 25 51



(1 27 ,5 86 ) (1 14 ,1 33 )

3 2 .5 P o st r e t ir e m e n t m e di ca l b e ne f it s


Fo r e m plo ye es w ho o pt ed f or t he s ch em e in tr od uc ed in 1 97 5 f or c le ric al/n on -c le ric al s ta ff a nd in 1 97 7 f or

offi cers/ execu tives , t he Bank operat es an approved funded gratui tyscheme on which month ly con tr ibu t ions , i f t he

employee has less than ten years of service, are made by the Bank on the basis of actuarial recommendation.

The Bankhas al so in troduced SR-2005 w.e. f . Ju ly2006wherein a separat e gratui ty fundscheme hasbeen in troduced

for those employeeswho ei therop ted the aforesaid regu lat ionsor newappoin tment sunder SR-2005 .Cont r ibu t ion to

the gratuity fund, w.e.f. August 2006, are made by the Bank at the rate of 8.33% of monetized salary per month.

The lates t actuar ialvaluat ion i scarri edou t asat December31 ,2006 .Actuar ialvaluat ion wasmade us ing thefo l lowing


The Bankprovides post retirement medicalbenefitsto eligible retired employees.Provisionis made annuallyto meet the

cost o fsuch medicalbenef it s on the bas is o factuar ialvaluat ion carr ied ou tby independen t actuaryby us ing Pro ject ed

Unit Credit (PUC) meth od.


Reconciliation of p ayable/(receivable) to/(from) g ratuity fund

32 .5 .2 Principal actuari al as sumpt ion


Expected rate of increase in salary 9% per annum

Expected rate of return on plan assets 10% per annum

Pension indexation rate 3% per annum

Medical infla tion rate 8% per annum

Exposure inflation rate 10% per annum

32.5.3


Net acturial gains not recognized 1,417,187 2,280,211

Past service cost not recognized 40,836 -

3 ,2 71 ,9 61 3 ,6 49 ,6 71


Opening net liability 3,649,671 3,586,925

Charge for the period 32.5.5 (361,011) 79,692

(16,699) (16,946)

Closing net liability 3,271,961 3,649,671

32 .5 .5 Charge/(p repaid ) fo r medical benef it s




Negative past service cost recognized (367,527) -

(361,011) 79,692

3 2 .6 Em p l o ye e co m p e n sa t e d a b s e nc e s

The lates t actuar ialvaluat ion i scarri edou t asat December31 , 2006 .Actuar ialvaluat ion wasmade us ing thefo l lowing


Reconciliation of p ayable/(receivable) to/(from) m edical benefits


The l iab il it y of the Bank in respect o f long-t erm employees compensat ed absences i s det ermined based on actuar ial

valuat ion carri ed ou t us ing Pro ject ed Unit Cred it (PUC) method .The l iab il it y of the Bank as per the l ates t actuar ial

valuat ion carri ed ou t as at December 31 , 2006 amounted to Rs. 437 .659 mi ll ion (December 31 , 2005: Rs. 355 .011

mi ll ion)whichhas beenfu l lyprov ided by the Bank .Theprovi sionhas been increasedby Rs. 82 .648 mi ll ion for the year

ended December 31, 2006.

3 2 .7 D e fi n ed c on t r ib u t io n p la n

ContributoryProvident Fund(CPF) schemehas alsobeen introduced bythe Bankunder StaffRegulations 2005 (SR-2005)

w.e. f . Ju ly2006for those employees who ei therop ted the said regu lat ionsor new appoin tment sare made under the

s a me . C o n tr ib u ti on s t o t h e C PF a r e m a d e b y t h e e m p l oy ee s a t t h e r a t e o f 2 . 00 % o f m o n et iz e d s a la r y p e r m o n t h a n d

m at ch in g co nt rib ut io n b y t he Ba nk, if t he ir r em ain in g se rvice is m or e t ha n t en ye ar s f ro m t he d at e o f

option/appointment.

Fo r a ll t h e e m p lo ye e s o f t h e B a nk w h o h a v e o p t e d f o r r et ir e me n t b e n e fit s s ch e m e a n n o un c ed in y ea r 1 9 7 5 a n d y ea r

1977 for cler ical/non-cler ical s t aff and for execu t ives/o ff icers respect ively, the Bank operat es an approved non-

con tr ibu to ry providen t fund (General Prov iden t Fund) th rough an independen t t rust . Con t r ibu t ions to the fund are

m a d e b y t h e e m p lo ye e s o n ly a t t h e r a t e o f 8 . 0 0% o f m e a n o f p a y s c a le p e r m o n th . F o r e m p lo ye e s w h o h a ve n o t o p t e dfor afo resaid ret irement benefi t s cheme, the Bank operates an approved con t ributo ry providen t fund (Employees

P ro vi de n t Fu n d) w h er e c o nt r ib u t io n s a r e m a d e b y t h e Ba n k a n d e m p lo ye e s a t t h e r a t e o f 8 . 3 3% o f b a s ic s al ar y p e r

month.





33 COMPENSATION OF DIRECTORS AND EXECUTIVES

Presiden t Directo rs Execu t ives

2006 2005 2006 2005 2006 2005

(Rupees in "000") (Rupees in "000")

Fee - - 1,900 610 - -

Managerial remuneration 3,600 3,600 - - 263,149 2,340

Charge for defined benefit

plan 740 - - - 21,668 -Rent and house

maintenance 840 840 - - 29,371 960

Utilities - - - - 7,254 255

Medical - - - - 3,630 25

Conveyance 344 271 - - 25,135 361

Furnishing allowance - - - - 1,774 -

Leave fare assistance 370 - - - - -Others - 300 - - 519 195

5,894 5,011 1,900 610 352,500 4,136

Number o f persons 1 1 7 7 496 2

33.1

34 FAIR VALUE OF FINANCIALINSTRUMENTS

34.1 On-balance sheet f i nancial i ns t rument s

Book va lue Fa ir va lue Book va lue Fair value

Assets

Cash and balances with treasury banks 1,295,464 1,295,464 1,585,421 1,585,421

Balances with other banks 7,781,056 7,781,056 7,813,844 7,813,844

Investments 5,634,499 5,634,499 12,820,668 12,820,668

Advances 61,514,057 61,514,057 52,925,286 52,925,286

Other assets 7,991,397 7,991,397 5,473,231 5,473,231

84,216,473 84,216,473 80,618,450 80,618,450

Liabilities

Bills payable 276,333 276,333 235,741 235,741

Borrowings 51,257,213 51,257,213 51,257,213 51,257,213

Deposits and other accounts 2,882,384 2,882,384 2,644,647 2,644,647

Sub-ordinated loan 3,204,323 3,204,323 3,204,323 3,204,323

Other liabilities 14,178,426 14,178,426 12,098,283 12,098,283

71,798,679 71,798,679 69,440,207 69,440,207

2006

( Rupees in "000" ) ( Rup ees in "000" )

2005

Execu tives mean employees , o ther than the ch ief execu tive and d i recto rs , whosebas i c/monet ized salaryexceeds Rs.

500 ,000 in a f inancialyear. The ch ief execu t ive, sen io r v ice presiden t and above o ther than underSR-2005 have been

provided Bankmaintainedcars. Vice president and abovegoverned bySR-2005have alsobeen provided carsunder Cars

Loan Depreci ation Poli cy (CLDP). The increase in numberof execu t ives in year 2006 i s due to calcu lat ion based on

monetized salary whereas in year 2005 it was based on basic salary.

T h e s e g m e n t a n a l y s i s w i t h r e s p e c t t o b u s i n e s s a c t i v i t y i s a s f o l l o w s :

C o r p o r a t e

f i n a n c e

T r a d i n g

a n d s a l e s

R e t a i l

b a n k i n g

C o m m e r c i a l

b a n k i n g

P a y m e n t a n d

s e t t l e m e n t

A g e n c y

s e r v i c e s

A s s e t s

m a n a g e m e n t

R e t a i l

b r o k e r a g e

O t h e r s - a g r i

f i n a n c i n g

( R u p e e s i n " 0 0 0 " )

2 0 0 6

T o t a l i n c o m e

-

-

-

-

-

-

-

-

1 1 , 5 1 9 , 1 0 9

T o t a l e x p e n s e s

-

-

-

-

-

-

-

-

1 0 , 8 7 2 , 3 0 6

N e t i n c o m e

-

-

-

-

-

-

-

-

6 4 6 , 8 0 3

S e g m e n t a s s e t s ( g r o s s )

-

-

-

-

-

-

-

-

8 5 , 4 5 1 , 5 2 1

S e g m e n t n o n p e r f o r m i n g l o a n s

-

-

-

-

-

-

-

-

2 0 , 1 0 4 , 4 9 0

S e g m e n t p r o v i s i o n

r e q u i r e d

-

-

-

-

-

-

-

-

6 , 7 7 2 , 7 5 1

S e g m e n t l i a b i l i t i e s

-

-

-

-

-

-

-

-

7 1 , 8 5 1 , 3 5 0

S e g m e n t r e t u r n o n

n e t a s s e t s ( % )

-

-

-

-

-

-

-

-

3 %

S e g m e n t c o s t o f f u n d s ( % )

-

-

-

-

-

-

-

-

5 %

2 0 0 5


-

-

-

-

-

-

-

-

7 , 6 6 0 , 8 5 3


-

-

-

-

-

-

-

-

7 , 7 5 2 , 2 2 0

N e t l o s s

-

-

-

-

-

-

-

-

( 9 1 , 3 6 7 )


-

-

-

-

-

-

-

-

8 2 , 5 0 4 , 6 5 2


-

-

-

-

-

-

-

-

2 3 , 4 2 4 , 3 7 4


r e q u i r e d

-

-

-

-

-

-

-

-

8 , 8 1 4 , 9 1 6


-

-

-

-

-

-

-

-

6 9 , 4 4 2 , 2 5 5


n e t a s s e t s ( % )

-

-

-

-

-

-

-

-

- 1 %

S e g m e n t c o s t o f f u n d s ( % )

-

-

-

-

-

-

-

-

1 %

3 5

S E G M E N T D E T A I L S W I T H R E S P E C T T O B U S I N E S S A C T I V I T I E S





36 TRUST ACTIVITIES

37 RELATED PARTYTRANSACTIONS

2006 2005

(Rupees in "000")

Investment in KSSL 100,000 -

Services re ceived from KSSL 35,350 -

Receivable from KSSL 36,175 -

Gratuity 3,760 -

38 CAPITALADEQUACY

Regulatory capital base

Tier I capital

Shareholders cap ita l 11,869,612 11,869,612

Reserves 359,348 245,387

Unappropriated p rofits 1,008,200 702,355

Less: adjustments - -

Total tier I capital 1 3, 23 7, 16 0 1 2, 81 7, 35 4

Tier II capital

Subord inated debt (upto 50% of total t ier I capita l) 3,204,323 3,204,323

Genera l p ro visions subject to 1.25% of total risk weighted assets 884,283 852,714

Revaluation reserve (up to 50%) 181,506 122,521

Total tier II capital 4 ,2 70 ,1 12 4 ,17 9,55 8

Eligible tier III capital - -

Total regulatory capital (a) 17,507,271 16,996,912

Bankscommonlyact as t rust eesand in thei r f iduciarycapaci ti es that resul t s in the ho ld ing orp lacing ofasset son behalf

o f individual , t rus t , re t i rement benef it p l anand o ther ins t it u t ion . Prov ided the t rust eesor s imi lar relat ionsh ip i s l egally

supported, these assets are not asset of the bank and therefore, are not included in its balance sheet.

KSSLiswhol lyowned subsid iaryof the Bankand i thas s t art ed i t s funct ions independen t lyeffective from January1 ,2006 .

KSSL provides mul tip le servi ces to the Bank including secur ity and jani tor ia l serv ices .Fo llowing i sb reak upof

stake in KSSL:

The riskweigh tedasset s to cap it a l rat i o ,cal cu lat ed in accordance wi th the SBP guidelines on cap it al adequacy was as

follows:

Risk weighted exposures

B oo k v a lu e R is k a d ju s t e d

value

B oo k v al u e R is k a d ju s t e d

value

Credit risk

Balance sheet items:

Cash and o ther liquid Assets 150,382 - 395,962 1,562,851

Money at call 8,926,138 1,556,212 9,003,303 4,572,758

Investments 5,634,499 1,907,805 12,820,668 51,083,952

Loans and advances 61,514,057 58,596,508 52,925,286 691,141

Fixed asset s 817,003 817,003 690,141 7,907,404

Other assets 8,409,442 7,865,100 8,012,527 -

8 5, 45 1, 52 1 7 0, 74 2, 62 9 8 3, 84 7,8 87 6 5,8 18 ,1 06

Off balance sheet items:

Loan repayment guarantees - - - -

Purchase and resale ag reements - - - -

Performance bonds etc - - - -Revolving underwrit ing com mitments - - - -

Stand by letters of cred it - - - -

Outstand ing fo reign exchange contracts - - - -

Purchase - - - -

Sale - - -

- - - -

Credit r isk-weighted e xposures 85,451,521 70,742,629 83,847,887 65,818,106

( Rupees in "000" )

2006 2005

2006 2005

(Rupees in "000")

Market Risk

General market risk - -

Specific market Risk - -

Market risk-weighted exposures - -

Total risk-weighted exposu res (b) 70,742,629 65,818,106

Capital adequa cy ratio [ (a) / (b) x 100) 24.75 25.82

3 9 RISK M AN AGEM ENT

3 9. 1 Cr ed it Ris k

3 9 . 1. 1 S eg m e n t a l i n f o rm a t io n

Segmenta l informationis presented inrespect of the c lassof businessand geographica ldis t ribut ion of advances,

deposits, contingencies and commitments.

The pr imaryobject ive of r isk management is to support senior management in correct lyident ifying, adequate ly

measur ing, e f fec t ive ly l imi t ing and proper ly monitor ing and control lingr isktaking throughout the Bank.TheBank

e n su re s s ys t em a t ic a n d i nt e gr at e d r is k m a n ag e m en t . Th is i s b a se d o n t h e f ol lo w in g s t ru ct u re d p ro c es s r is k

identification, risk measurement, risk management and control, risk monitoring and risk reporting.

Credit r iskis the r isktha t a r isesf romthe potent ia l tha t an obl igor is e i therunwill ing to per formon an obl iga t ion or

itscapability to execute suchob ligation isimpairedresultingin economiclossto the Bank. Principally, exposures are

onlyapproved when reasonably assured for repayment capac ity of counte r par ty. Standardized procedures are

adopted and under no circumstancesit exceeds approved credit lines. The Bankcreditappraisalstructurecomprisesofwel l-defined credit appraisa l ,approva land review methodsfor the purpose ofprudence ini ts lendingopera t ions

a n d e n su ri ng c re d it a cr o ss t h e b a n k. Th e Ba n k p a y p a rt ic ul ar c on c en t ra t io n t o t h e m a n ag e m en t o f N PLs . An

independent Special Asset Managment (SAM) department is operational at the head office.

financial





2006

39.1.1a Segments by c lass

of business

Rupees in

"000"Percent

Rupees in

"000"Percent

Rupees in

"000"Percent

Agriculture, forestry,

hunting and fishing 6 8, 36 9, 25 9 9 5. 90 % - - -

Individuals - - 2,866,902 99.00% 13,807 0.17%

Others 2,921,678 4.10% *15,482 1.00% 8,335,722 99.83%71,290,937 100% 2,882,384 100% 8,349,529 100%

39.1.1b Segment by sec tor

2006

Rupees in

"000"Percent

Rupees in

"000"Percent

Rupees in

"000"Percent

Public/ government - 0.00% *15,482 1.00% 8,335,722 99.83%

Private 71,290,937 100.00% 2,866,902 99.00% 13,807 0.17%71,290,937 100.00% 2,882,384 100.00% 8,349,529 100.00%

* This amount represents deposits belonging to autonomous/semi-autonomous bodies.

39.1.1c Details of non-performing advances and sp ecific provisions by class of business segment

Classified

advances

Specific

provision held

Classified

advances

Specific

provision held

Ag ricu lt ure, fo rest ry, h un tin g an d fish in g 2 0,1 04 ,4 90 6 ,7 72 ,7 51 2 3,4 24 ,3 74 8 ,8 14 ,9 16

39.1.1d Details of non-performing advances and sp ecific provisions by sector

Private 20,104,490 6,772,751 23,424,374 8,814,916

39. 1.1 e GEOGRAPHICALSEGMENTANALYSIS

2006

Profit

before

taxation

Total asset s

employed

Net assets

employed

Contingencies

an d

commitments

Rupees in "000"

Pakistan 646,803 85,451,521 13,600,171 8,349,529

2006 2005

Ad vances (g ross) Dep osits Cont in gencies and

commitments

DepositsAdvances (gross)

Rupees in "000"

Contingencies and

commitments

3 9 . 3 F or e ig n Ex ch a n g e Ri sk

3 9 .4 Eq u it y p o si ti on R is k

The Bankis not exposedto equityposi t ion r iskas a l l the sharesare he ld byFedera land Provinc ia lGovernments . I t ssecurities are not publicly traded.

The Bankis not di rec t lyexposedto fore ignexchange r iskas the Bankis not engagedin fore ign operat ions.Foreign

transaction s, if any, are underta ken throug h SBP.

3 9. 2 M ar ke t Ris k

The Bankis not involved in commercia lac t ivit ies l ike underwr it ing, t r ading and discountingopera t ions.The Bank

opera tesfore ign currencytr ansact ions through SBPin loca lcur rencybypayingexchangef luctua t ion r iskfee to the

SBP. Th e Ba nk is n o t e xp o se d t o in te re st r at e r is k a s it h as a f ixe d le nd in g r at e p o rt fo lio o f a d va nc es a nd

investments/placementsare being placed in held to maturitysecurities/investments.Correspondinglythe borrowing

fromSBPisin the processof restructuring. Liquidityp osition of the Bank isclosely monitoredb ythe Asset Liabilities

Manageme nt Comm ittee (ALCO) on periodic basis.









We have audited the annexed consolidate d financial state ment s comprising consolidated balance sheet of Zarai Taraqiat iBank Limited ("the Bank") and its subsidiary company as at December 31, 2006 and t he related consolidated profit andloss account, consolidated cash flow statement and consolidated statement of changes in equity, together with thenotes forming part thereof, for the year then ended. These financial statements include un-audited certified returns fromthe branches except for one hundred and twenty branches, which have been audited by us. We have also expressedseparate o pinion on the financial stateme nts of the Bank. The financial statemen ts of subsidiary compan y Kissan SupportServices (Private) Limited w ere audit ed by BDO Ebrahim &Co Chartered Accoun tant s, whose rep ort has bee n furnishedto us and our opinion in so far as it relates to t he amo unts included for such company, is based solely on their report.

These financial statements are the responsibility of the holding company's management. Our responsibility is to expressan opinion on these financial statements based on our audit.

The financial statements of the Bank for the year ended December 31, 2005 were stand alone and were audited byMessers Khalid Majid Rahma n Sarfaraz Rahim lqbal Rafiq; Chartered Accountan ts and Riaz Ahmad & Company; CharteredAccountants whose report dated March 29, 2006 expressed an unqualified opinion on those financial statements.

We conducted our au dit in accordance with auditing standa rds as applicable in Pakistan. These standards require thatwe plan and p erform the audit to ob tain reasonable assurance about whether th e financial statements are free of anymaterial misstatement. An audit includes examining, on a test basis, evidence supporting the am ounts and disclosuresin the financial statements. An au dit also includes assessing the accounting policies and significant estimates made bymanagement, as well as, evaluating the overall presentation of the financial statements. We believe that our auditprovides a reasonable basis for our op inion.

In our opinion, the consolidated financial statements examined by us, based on one hundred and twenty branchesaudited by us and the returns referred to above received from the branches which have been found adequate for thepurposes of ou r audit, prese nt fairly the financial position of the Zarai Taraqiati Bank Limited and its subsidiary companyas at December 31, 2006 and result of their operations, cash flows and changes in equity for the year then ended inaccordance with ap proved accounting standa rds as app licable in Pakistan.

Without qualifying our opinion, we draw at tention to t he following matters that:

1. Prudential Regulation "O-3"for Corporate/Commercial Banking requires clearance of all outstanding entries ininter-branches/offices current accounts within, a period of 30 days from the date o f recording of transactionsin the aforesaid financial statements. We have, however, noted balance in inter-branches/offices current accounts,reported in not e 17 to the financial statements on net ba sis at Rs. 34.105 million-Credit Balance (December31, 2005: Rs. 792.819 million-Debit Balance).

2. Borrowings in note 14 and Contingencies and Commitments in note 21.5 of the financial statement of the Bank refer to th e dispute on the rat e of markup cha rgeable on fina ncing from State Bank of Pakistan (SBP). Tripartitemeeting b etween SBP, the Bank and Ministry of Finance has not yet b een conduct ed to resolve the issue regardingrate of markup on the debt s. SBP has confirmed accrued ma rkup on the d ebts amoun ting to Rs. 15,777.331million as against Rs.9,359.844 million in t he financial statement s resulting in a difference of Rs. 6,417.487million. Further, the first two installments of t he deb t payable in July 2006 and January 2007 as required by

SBP in its letter no ACD/3104/Loans-15-A/2004 dat ed Decembe r 16, 2004 have not b een pa id. Outcome o f thedecision in the above said meeting ma y require appropriate adjustment in the provision of accrued markup.

M. YOUSUF ADIL SALEEM & CO. KHALID MAJID RAHMAN SARFARAZChartered Accountants RAHIM IQBAL RAFIQIslamabad Chartered Accountants

IslamabadDated: 09 June 2007

M. YOUSUF ADIL SALEEM & CO. KHALID MAJID RAHMAN SARFARAZChartered Accountants RAHIM IQBAL RAFIQ

Chartered Accountants



Auditors ' Repo rt to the Memb ers

Note 2006 2005

ASSETS

Cash and balances with treasury banks 6 1,295,464 1,585,421

Balances with other banks 7 7,783,566 7,813,844

Lendings to financial institutions - -

Investments 8 5,637,170 12,820,668

Advances 9 61,514,057 52,925,286Operating fixed assets 10 818,866 690,141

Deferred tax assets 11 - 1,829

Other assets 12 8,409,442 6,667,463

85,458,565 82,504,652

LIABILITIES

Bills payable 13 276,333 235,741

Borrowings 14 51,257,213 51,257,213

Deposits and other accounts 15 2,882,384 2,644,647

Sub-ordinated loan 16 3,204,323 3,204,323

Liabilities against assets subject to finance lease - -

Deferred tax liabilit ies 11 7,629 -

Other liabilities 17 14,226,968 12,100,331

71,854,850 69,442,255

NETASSETS 13,603,715 13,062,397

REPRESENTED BY

Share capital 18 11,869,612 11,869,612

Reserves 19 359,348 245,387

Unappropriated profit 1,011,744 702,355

13,240,704 12,817,354

Surplus on revaluation of assets 20 363,011 245,043

13,603,715 13,062,397

CONTINGENCIES AND COMMITMENTS 21

(0)


(Rupees in "000")

Consol idated balance sheet as a t Decemb er 31, 2006





The annexed notes 1 to 41 and annexure-1 form an integral part of these financial statem ents.


Consol idated prof i t and loss account for th e year endedDecemb er 31, 2006

Zara i Tara qiat i Ban k Limite d

Note 2006 2005

Mark-up/return/interest earned 22 6,001,704 6,822,719

Mark-up/return/interest expensed 23 2,802,785 391,738

Net mark-up/interest income 3,198,919 6,430,981

Provision against non-performing loans and advances 9.3 1,767,234 4,731,992

Provision/(reversal) for diminution in t he value of investmen ts, net 8.2 10,110 (585)

Provision against other assets 12.6 2,048,971 12,936

Bad debts written off directly - -3 ,8 26 ,3 15 4 ,7 44 ,3 43

Net mark-up/interest income after provisions (627,396) 1,686,638

NON MARK-UP/INTERESTINCOME

Fee, commission and brokerage income 2,544 3,157

Dividend income 6,458 6,458

Income from dealing in foreign currencies - -

Gain/(loss) on sale of securities - -

Unrealized gain/(loss) on revaluation of investments classified as held for

trading - -

Other income 24 5,514,079 828,519

Total non-ma rkup/interest income 5,523,081 838,134

4,895,685 2,524,772

NON MARK-UP/INTEREST EXPENSES

Administrative expenses 25 2,760,450 2,612,337

Government relief package written off 1,482,448 -

Other charges 26 306 3,802

Total non-markup/interest expenses 4,243,204 2,616,139

Extra o rdinary/unusual Items - -

PROFIT/(LOSS) BEFORE TAXATION 65 2,48 1 (91 ,3 67 )

Taxation – Current year 27 219,673 38,434

– Prior years - -

– Deferred 27 9,458 (607)

229,131 37,827

PROFIT/(LOSS) AFTER TAXATION 42 3,35 0 (1 29 ,1 94 )

Unappropriated profit brought forward 702,355 861,549

Profit available for app ropriation 1 ,12 5, 70 5 7 32 ,3 55

Basic and diluted earnings per share - after tax 28, 29 0.36 (0.11)

(Rupees in "000")



Note 2006 2005

CASH FLOWS FROM OPERATING ACTIVITIES

Profit/(loss) before taxation 652,481 (91,367)

Dividend income (6,458) (6,458)

646,023 (97,825)

Adjustments:

Deprecia tion 106,519 85,806Amortization of deferred income (14,532) (32,178)

Amortization of preliminary expenses - 6,570

Provision against non-perform ing advances 1,767,234 4,731,992

Reversal for emp loyees post retirement benefits (2,110,467) (79,692)

Provision for dim inution in the value of investments 10,110 -

Provision against other assets 2,048,971 12,936

Government relief package w ritten off 1,482,448 -

Gain on sale of fixed assets (37,116) (23,591)

3,253,167 4,701,843

3,899,190 4,604,018

(Increase)/decrease in operating assets

Advances (10,356,005) (3,321,839)

Others assets (excluding advance taxat ion) (3,162,931) 1,600,661

(1 3, 51 8, 93 6) (1 ,7 21 ,1 78 )

Increase/(decrease) in operating liabilities

Bills payable 40,592 38,307

Deposits and other accounts 237,737 (477,558)

Other liab ilit ies (excluding current taxation) 2,339,807 594,929

2,618,136 155,678

Income tax paid (418,310) (157,864)

Net cash (used in) /genera ted f rom op era t ing ac t ivit ies (7 ,41 9,92 0) 2,880 ,6 54

CASH FLOWS FROM INVESTING ACTIVITIES

Net investments in held to maturity securities 7,291,356 (9,863,017)

Dividend received 6,458 6,458

Investments in operating fixed assets (250,141) (24,945)

Sale proceeds of property and equipm ent disp osed-off 52,012 14,949

Net cash flow from/(used in) investing activities 7,0 99 ,6 85 (9 ,8 66,55 5)

Decrease in cash and cash equiva lents (3 20 ,2 35 ) (6 ,9 85 ,9 01 )

Cash and cash equiva lents a t beginning of the year 309,3 99 ,2 65 1 6,3 85 ,16 6Cash and cash equiva lents a t end o f the year 9,079,030 9,399,265


(Rupees in "000")


Consol idated cash f low s ta t ement for the year endedDecemb er 31, 2006






Consol idated s ta tem ent o f changes in equi ty for theyear ended December 31, 2006

Zara i Tara qiat i Ban k Limite d

Share

capital

Advance

against

equity

Statu to ry

reserve

Contingencies

reserve

Unappropriate

d profitTotal

(Rupees in "000")


Loss for the year 2005 - - - - (129,194) (129,194)Transfer to contingencies reserve - - - 30,000 (30,000) -Issue of share capital 1 (1) - - - -





The annexed notes 1 to 41 and anne xure-1 form an integral part of these financial statements.

Share

capital

Advance

against

equity

Statu to ry

reserve

Contingencies

reserve

Unappropriate

d profitTotal

(Rupees in "000")


Loss for the year 2005 - - - - (129,194) (129,194)Transfer to contingencies reserve - - - 30,000 (30,000) -Issue of share capital 1 (1) - - - -





The annexed notes 1 to 41 and anne xure-1 form an integral part of these financial statements.


ZARAI TARAQIATI BANK LIMITEDConsol idated notes to the f inancia l sta tem ents for the yearended Decemb er 31, 2006

1 STATUS AND NATURE OF BUSINESS

1.1 Reorganization and conversion

Originally Agricultural Development Bank of Pakistan (ADBP) was established under the Agricultural DevelopmentBank Ordinance, 1961, by merger of former Agricultural Development Finance Corporation and Agricultural Bankof Pakistan, in February, 1961 to provide better credit f acilities for the promotion, expansion and developmentof agriculture and persons engaged therein.The Federal Government in its cabinet meeting held on August 28,

2002 decided for the reorganization and conversion of ADBP into a public limited company for the purposes ofensuring good governance, autonomy, delivering high quality and viable financial services to a greater numberof rural clientele and adequate returns to stake holders. Accordingly the Agricultural Development Bank ofPakistan (Reorganization and Conversion) Ordinance, 2002 was promulgated for taking over the entire undertakingof ADBP and for matters connected therewith or incidental thereto.

1.2 Status

The group consists of Zarai Taraqiati Bank Limited (the "Bank). the holding Company and Kissan Support Services(Private) Limited (KSSL), a wholly owned subsidiary company.

As required under section 3 of the Agricultural Development Bank of Pakistan (Reorganization and Conversion)Ordinance, 2002, the Bank was incorporated as public limited company under the Companies Ordinance, 1984on October 23, 2002. Consequently, under SRO 823 (1)/2002 dated 18 November 2002, all the assets, contracts,liabilities, proceedings and undertakings of ADBP were transferred to, and vested in the Bank on December 14,2002. The Bank's principal office is situated at 1-Faisal Avenue (Zero Point), Islamabad. The Bank operates 342(December 31, 2005: 345) branches in Pakistan as at close of the year.

KSSL was incorporated in Pakistan as a private limited company on September 19, 2005 under the CompaniesOrdinance, 1984. It is a subsidiary of the Bank which holds 100% of its shares. The registered office of thecompany is situated at Zarai Taraqiati Bank Limited, 1-Faisal Avenue (Zero Point), Islamabad.

1.3 Nature of business

The main purpose of the Bank is to provide sustainable rural finance and services particularly to small farmersand low income houses to strengthen the rural and agricultural sector, mitigate poverty, capital market andinvestment activities and other banking business.

The principal business of KSSL is the provision of consultancy, advisory, agency and other support services oncontractual basis or otherwise to the Bank.

2 BASIS OF PRESENTATION

2.1 During the year, the State Bank of Pakistan (SBP) vide Banking Surveillance Department (BSD) Circular No. 4dated February 17, 2006 has issued ‘Revised forms of Annual Financial Statements’ which has replaced existingforms prescribed through BSD Circular No. 36 dated October 10, 2001. These revised forms are applicable for

financial statements for the year ended December 31, 2006 and include certain additional disclosures whichare also applicable for corresponding period. These financial statements have been presented in accordancewith such revised forms.

2.2 The consolidated financial statements include the financial statements of the Bank and its subsidiary company.The financial statements of the subsidiary company have been consolidated on line-by-line basis. The financialstatements of the subsidiary company has been consolidated based on its audited financial statements for theperiod from September 19, 2005 to December 31, 2006.

2.3 Material intra group balances and transactions have been eliminated.





3 STATEMENT OF COMPLIANCE

These consolidated financial statements have been prepared in accordance with the approved accountingstandards as applicable in Pakistan and the requirements of the Companies Ordinance, 1984 and the BankingCompanies Ordinance,1962 and directives issued by the Securities and Exchange Commission of Pakistan(SECP) and the SBP. Approved accounting standards comprise of such International Accounting Standards asnotified under the provisions of the Companies Ordinance,1984. Wherever the requirements of the CompaniesOrdinance, 1984, Banking Companies Ordinance,1962 or the directives issued by t he SECP and the SBP differwith the requirements of these standards, the requirements of the Companies Ordinance,1984, Banking CompaniesOrdinance, 1962 or the requirements of the said directives take precedence.

The SBP has deferred the applicability of International Accounting Standard (IAS) 39 "Financial Instruments:Recognition and measurement" and International Accounting Standard (IAS) 40 "Investment Property" for bankingcompanies through BSD circular no 10 dated August 26, 2002. Accordingly, the requirements of these standardshave not been considered in the preparation of these consolidated financial statements. However, investmentshave been classified and valued in accordance with the requirements prescribed by the SBP through variouscirculars.

The published amendments to existing standard (IAS) 1 "Presentation of Financial Statements - Capital Disclosures"are not yet effective and are mandatory for the Bank's accounting periods beginning on or after January 1, 2007or later periods. However, effect of adoption of the above amendments on the future financial statements is notlikely to be material.

4 BASIS OF MEASUREMENT

4.1 These consolidated financial statements have been prepared under t he historical cost convention as modifiedfor the revaluation of certain investments (note 8) and in conformity with the accepted accounting practices ofthe banking institutions in Pakistan.

4.2 Critical accounting estimates and judgments

The preparation of consolidated financial statements in conformity with approved accounting standards requiresthe use of certain critical accounting judgments. It also requires management to exercise its judgment in theprocess of applying the Bank’s accounting policies. Estimates and judgments are continually evaluated and arebased on historical experience, including expectations on future events that are believed to be reasonable underthese circumstances. The areas where various assumptions and estimates are significant to the Bank's consolidatedfinancial statements or where judgment was exercised in application of accounting policies described in notesare as follows:

4.2.1 Investments

As described in note 8, held to maturity are investments where t he management has positive intent and abilityto hold to maturity and available for sale securities are investments that do not fall under the held for trading orheld to maturity categories. The classification of these securities involves management judgment at the time ofpurchase whether the financial assets are held for trading, held to maturity or available for sale investments.

4.2.2 Provision against non-performing Advances

The provision is determined on the basis of time-based criteria given in prudential regulations.

4.2.3 Defined benefit plans

The key actuarial assumptions concerning the valuations of defined benefit plans and the sources of estimationare disclosed in note 32 to the consolidated financial statements.

4.2.4 Operating fixed assets

Estimates of useful life of the property and equipment are based on the management’s best estimate. Changesin the expected useful life are accounted for by changing the depreciation/amortization period or method, asappropriate, and are treated as changes in accounting estimate.

5 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

5.1 Staff retirement benefits

Pension scheme

The Bank operates defined benefits funded pension scheme approved by income tax authorities, for its eligibleemployees who opted for the new employees benefits scheme, introduced in 1975 and 1977 for clerical/non-clerical staff and for executives/officers, respectively. The Bank's costs are determined on the basis of actuarialvaluation carried out by independent actuaries by using 'Projected Unit Credit Method'. Any surplus/deficit arisingon actuarial valuation in excess of the higher of 10% of present value of defined benefits obligations or 10% ofthe fair value of plan assets is recognized as income or expense over the estimated working lives of the employees.

Gratuity scheme

The Bank operates defined benefits funded gratuity scheme approved by income tax authorities, for its eligibleemployees who did not opt for the new employees benefits scheme, introduced in 1975 and 1977 for clerical/non-clerical staff and for executives/officers, respectively. Annual contributions are made on the basis of actuarial

recommendations. Any surplus/deficit arising on actuarial valuation by independent actuaries in excess of thehigher of 10% of present value of defined benefit obligation or 10% of the fair value of plan assets is recognizedas income or expense over the estimated working lives of the employees.

Provident fund scheme

The Bank operates a defined contribution funded provident fund scheme for its employees who did not opt forthe new employees benefits scheme introduced in 1975 and 1977 for clerical/non clerical staff and forexecutives/officers respectively. Under this scheme, equal contributions at defined rates are made by the memberemployees and the Bank. The Bank also operates non-contributory provident fund for its employees who optedfor the new employees benefits scheme, as mentioned above.Under this, non contributory provident fund,contributions at defined rates are made by its member employees only. Both of these provident funds are approvedby the income tax authorities.

Benevolent scheme

The Bank also has two funded defined benefits benevolent fund schemes for its employees, separately for officersand for clerical and non-clerical staff. Contribution to these schemes are made by employees and the Bank. Theemployee's contribution is matched by an equal contribution by the Bank which is also liable to meet any shortfallin the fund, determined on the basis of actuarial valuation. Transitional liability arising on first time adoption ofInternational Accounting Standard - 19 (revised 2000) "Employee Benefits" is recognized as an expense on straightline basis over five years from t he date of its adoption.

Post retirement medical benefits

The Bank operates an unfunded defined benefit post retirement medical benefit scheme for all of its employees.Provision is made in the consolidated financial statements for the benefit based on actuarial valuation. Actuarialgains/losses are accounted for in the manner similar to pension scheme.

Employees compensated absences

The Bank accounts for all accumulating compensated absences when the employees render service that increasestheir entitlement to future compensated absences. Provision is made in t he consolidated consolidated financialstatements for the benefit based on entitled un-availed leave balances carried forwarded to the next year.

5.2 Cash and cash equivalents

Cash and cash equivalents comprise of cash, balances with treasury banks and balances with other banks.

5.3 Revenue recognition

Markup/interest on advances and returns on investments are recognized on an accrual basis except markup/intereston classified advances which is recognized on a receipt basis, in accordance with the prudential regulations issuedby the SBP.





Commission is recognized when earned.Profit/(loss) on sale of investments is credited/charged to profit and loss account currently.Dividend income is recognized when the Bank's right to receive has been established.

5.4 Advances

Advances are stated at net of provision for non-performing advances. Provision for non-performing advancesis determined on the basis of Prudential Regulations issued by the SBP and charged to profit and loss account.Advances are written off when there is no realistic prospect of recovery.

5.5 Investment

In accordance with BSD circular no. 10 and 14 dated July 13, 2004 and September 24, 2004 respectively, issuedby the SBP, the Bank classifies its investment portfolio into 'Held-for-Trading', 'Held-to-Maturity' and 'Available-for-Sale' securities as follows:

Held-for-Trading

These are investments acquired principally for the purpose of generating profits from short term fluctuations inmarket price.

Held-to-Maturity

These are investments with fixed or determinable payments and fixed maturity in respect of which the Bank hasthe positive intent and ability to hold till maturity.

Available-for-Sale

These are investments other than those in subsidiaries which do not fall under the 'Held-for-Trading' and 'Heldto-Maturity' categories.

Quoted securities where ready quotes are available on Reuters Page (PKRV) or Stock Exchange, other thaninvestments classified as held to maturity, are valued at fair value. Investments classified as held to maturityare carried at amortised cost. The surplus/deficit arising as a result of revaluation at fair value on trading portfoliois taken to income and t hat relating to the available for sale portfolio is kept in a separate account and shownbelow equity.

Investment in un-quoted securities are carried at cost less impairment loss, if any.

The difference between the face value and purchase price is amortised over the remaining life of the investmentusing effective yield method, in order to determine amortised cost.

Gains or losses on disposals of investments are dealt with through profit and loss account in the year in whichthey arise.

All purchases and sales of investments that requires delivery within the t imeframe established by regulation ormarket convention are recognized at trade date. Trade date is the date at which the Bank commits to purchaseor sell the investment.

5.6 Impai rment

The carrying amount of assets are reviewed at each balance sheet date to determine whether there is anyindication of impairment of any asset or group of assets. If such indication exists, the recoverable amount ofthe assets is estimated. An impairment loss is recognized whenever the carrying amount of an asset exceedsits recoverable amount. Impairment losses are recognized in profit and loss account.

5.7 Operating fixed assets and depreciation/amortization

Operating fixed assets are stated at cost less accumulated depreciation except free hold land which is statedat cost. Depreciation is computed over the estimated useful lives of the related assets at the rates set out in note10. Depreciation is charged on reducing balance method except for vehicles, computer equipment and leasehold land which are depreciated/amortized on straight line method. Depreciation on addition/deletion in fixedassets during the year is charged for the proportionate period for which the asset remained in use.Maintenance and normal repairs are charged to profit and loss account as and when incurred.Gains/losses, if any, on disposal of operating fixed assets are charged to profit and loss account during the year.

5.8 Taxat ion

Current

Provision for current taxation is based on taxable income at the current rate after taking into account tax credits,exemptions and rebates as laid down in the applicable income tax law.

Deferred

Deferred tax is provided using the balance sheet liability method, providing for all t emporary differences betweenthe carrying amounts of assets and liabilities for the financial reporting purposes and amount used for the taxationpurposes. The amount of deferred tax provided is based on the expected manner of realization or settlement ofthe carrying amount of assets and liabilities using the tax rates enacted at the balance sheet date. A deferred taxasset is recognized only to the extent it is probable that future taxable profit will be available and the credits canbe utilized. Deferred tax asset is reduced to the extent that it is no longer probable that the related tax benefitswill be realized.

5.9 Prov is ionsProvisions are recognized when the Bank has a legal or constructive obligation as a result of past events and itis probable that an outflow of resources will be required to settle the obligation and a reliable estimate of theamount can be made. Provisions are reviewed at each balance sheet date and are adjusted to reflect current bestestimate.

5.10 Foreign currencies

The Bank operates foreign currency transactions through SBP in local currency by paying exchange fluctuationrisk fee to the SBP.

5.11 Related party transactions

All transactions undertaken between the Bank and the related parties are measured at arms' length pricesdetermined in accordance with the methods for determining arms' length prices as prescribed by the SECP.





Note 2006 2005

6 CASH AND BALANCES WITH TREASURYBANKS

local currency

In hand 150,382 395,962

In current accounts with:

State Bank of Pakistan 6.1 1,145,080 1,189,047

National Bank of Pakistan 2 4121 ,2 9 5, 46 4 1 ,5 8 5, 42 1

6.1

7 BALANCES WITH OTHER BANKS

In Pakistan in local currency:

On current accounts 9,702 21,673

On deposit accounts 7.1 7,773,864 7,792,171

7 ,7 8 3, 56 6 7 ,8 1 3, 84 4

7.1 These carry a markup ranging from 2.00% to 12.75% per an num (2005: 2.00% to 12.75% per annum )

8 INVESTMENTS Note

Investment by typesHeld by

bank

Given a s

collateralTotal

Held by

bank

Given as

collateralTotal


Listed companies 90,294 - 90,294 90,294 - 90,294

Un-listed companies 10,523 - 10,523 5,000 - 5,000

100,817 - 100,817 95,294 - 95,294

Held-to-Maturity securities

Market Treasu ry Bills 8.3 1,843,309 - 1,843,309 5,940,943 - 5,940,943

Pakistan Investmen t Bonds 8.3 1,116,967 - 1,116,967 1,148,835 - 1,148,835

Federal Investment Bonds 8.3 763,734 2,684 766,418 815,342 2,866 818,208

Certificates of Investmen t 8.6 1,354,500 - 1,354,500 4,572,758 - 4,572,758

5,078,510 2,684 5,081,194 12,477,878 2,866 12,480,744

Short term investment 8.8 102,671 - 102,671 - - -

Total investment a t cost 5,281,998 2,684 5,284,682 12,573,172 2,866 12,576,038

Prov is ion for d iminu t ion in

value of investments

8.2(10,523) - (10,523) (413)

-

(413)

Investments (Net of provisions) 5,271,475 2,684 5,274,159 12,572,759 2,866 12,575,625

S ur p lu s o n r e va lu a ti on o f


20

363,011 - 363,011 245,043 - 245,043

Total investments a t market value 5,634,486 2,684 5,637,170 12,817,802 2,866 12,820,668

(Rupees in "000")

2005

(Rupees in "000")

2006

It represents deposits maintained with SBP to comply with the regulations issued from time to time.

No te 2006 2005

8 .1 In ve st m en t b y se gm e nt s

Federal government securities

Market Treasury Bills 8.3 1,843,309 5,940,943

Pakistan Investment Bonds 8.3 1,116,967 1,148,835

Federal Investment Bonds 8.3 766,418 818,208

3 ,7 26 ,6 94 7 ,9 07 ,9 86

Fully paid up o rdinary shares:

8.4 90,294 90,294

8.5 10,523 5,000

100,817 95,294

8.6 1,354,500 4,572,758

5 ,1 82 ,0 11 1 2 ,5 76 ,0 38

8.2 (10,523) (413)

5 ,1 71 ,4 88 1 2 ,5 75 ,6 25

20 363,011 245,043

5 ,5 34 ,4 99 1 2 ,8 20 ,6 68

8 . 2 P a rt i cu l ar s o f p r o vi si o n

Opening balance 413 998

Charge for the year, net 10,110 -

Reversals - (585)

Closing balance 10,523 413

8.2.1 Par t icula rs of provis ion in r espec t of type and segment

Available-for-sale securities-(un-listed securities) 10,523 -

Available-for-sale securities-(listed securities) - 413

8.3 Pr inc ipa l te rms of investments in federa l government secur i t ies

Name of

investment

Matu rit y No te Princip a l

payment

Rate % Cou p on

payment

Market Treasury Bills March 2007 8.3.1 On maturity 8.6 at maturity

August 2011 to

December 2011 8.3.1 On maturity 12 to 13 semi-annually

March 2008 8.3.2 On maturity 15 semi-annually

8.3.1

8.3.2

8.4

No . o f o rd in ary sh are s Pa id upvalue/share

Name of companies

2006 2005

2006 2005 Ru p ees (Rup ees in "000")

280,090 280,090 10 89,297 89,297

450,000 450,000 10 585 585

150,000 150,000 10 412 412300,000 300,000 10

- -

90,294 90,294

(Rupees in "000")

Surplus on revaluation of available-for-sale securities

Total investments at market value

Total investment at cost

Provision for diminution in value of investments

Listed comp anies

Un-listed companies

Certificates of investmen t

Investments (net of provisions )

Dadabhoy Agricultural Leasing

Limited 8.4 .1

Marke t t r easury bi ll s, Federa l Investment Bonds and Pakistan Investment Bonds are he ld by the Bank which a lso

covers statutory liquid reserve requirements.

Federa l Investment Bonds having amor tised cost of Rs. 2.684mil lions(December 31, 2005:Rs.2.866 mill ion)a re

pledged/lodged with SBP as secur ity for Te legraphic Transfe r/Demand Draf t discount ing faci li ty obta ined for

branches.

Nestle Milkpak Limited


Particulars of investments held in listed companies


Pakistan Investment Bonds

Federal Investment Bonds





8.4.1

8.5

Nam e o f Investee Percen tage of

holding

Number of

shares held

Br ea k u p va lu e Ba se d o n

audi ted

financial

s ta tements

as a t

Name of

chief

executive/

managing

director

("Rupees")

19.13% 909,091 (2,123,845)

June 30,

2005

Mr. Assim

Jang

33.33% 1,000,000 - -Mr. M. AsadKhan

8.33% 2,500 - -

Maj.Gen.(R)

F.A.Khan

6.36% 141,970 - -

Mr. Anwar

Majeed

8.5.1

8.5.2

8.5.3

8.5.4

8.6 Par t icula rs of Cert i f ica tes of Investments

Nam e o f investee Maturity Principa l

payment

Rat e Coup on

payment

%

January 2007 on maturity 12.25 at maturity

8.7

Am oun t Rat in g Am o unt Rat in g

89,297 N/A 89,297 N/A

585 N/A 585 N/A

412 N/A 412 N/A

10,523 N/A 5,000 N/A

100,817 95,294

8.8

Dadabhoy Agricultural Leasing Limited is und er suspension since November 2 001. At the date o f suspension, its

market value per sha re was Rs. 2.50 against its face value of Rs. 10 per share.

National Commodity

Exchange Limited

Saudi Pak Kala Bagh Livestock

Limited8.5.1

Particulars of investment s held in un-listed compan ies

Pakistan Agricultural Storage

and Services Corporation

Limited

Larkana Suga r Mills Limited

8.5.2



Nestle Milk Pak Limited

Quality of Available-for-Sale securities

Theserepresentshor t te rm investment made by KSSLin te rmdeposi t r ece ipts of three monthsmatur i ty of Soner i

Bank Limited. It carries an interest of 12.75 % per annum .These will mature on March 30 , 2007.

Saudi Pak Industrial and Agricultural Investment

Company (Pvt.) Ltd.

Saudi Pak Kala Bagh Livestock Limited has defaul ted in the repayment of loan and the case has been refe r red to

National Accountability Bureau.

Larkana Sugar Mil ls Limited is in the processof l iquida t ion sinceFebruary2000 and there isno probabi li tyof any

recovery of amount invested on final settlement.

Investment inSaudi PakKalabagh LivestockLimited and LarkanaSugar MillsLimitedare stated at book value due to

non-availability of required information for the calculation of breakup value. Moreover, these investments are fully

provided for in these financial statements.

Marke t va lue of l is ted investment is Rs. 450.804 mill ion and book va lue of un- li sted investments is Rs. 10.523

million. Face value of investmen t in u n-listed securities is Rs. 37.220 million.

National Commod ity Exchange Limited

9.1 Par t icula rs of advances (Gross)

9.1.1 In local currency 71,290,937 64,744,526

9.1.2 Short term (upto one year) 46,566,434 38,639,419

Long term (over one year) 24,724,503 26,105,107

7 1 ,2 9 0, 9 37 6 4 ,7 4 4, 5 26

9.2

2006

(Rupees in "000")

Category o f classification

Classified

advances

Provision

required

Provision

held

Domestic

Other Assets Especially Mentioned 9,306,835 - -

Substandard 2,629,125 525,823 525,823

Doubtful 3,843,204 1 ,9 21 ,6 02 1 ,9 21 ,6 02

Loss 4,325,326 4 ,3 25 ,3 26 4 ,3 25 ,3 26

2 0, 10 4, 49 0 6 ,7 72 ,7 51 6 ,7 72 ,7 51

Provision under portfolio audit - general - - 3,000,000

2 0, 10 4, 49 0 6 ,7 72 ,7 51 9 ,7 72 ,7 51


No te Sp ecific Genera l To ta l Specific Genera l To ta l

(Rupees in "000")

Opening b alance 8,819,240 3,000,000 11,819,240 22,566,660 3,000,000 25,566,660

Net charge for the year 1,767,234 - 1,767,234 4,731,992 - 4,731,992

Am ou nt s writ te n off 9 .5 (3,809,594) - (3,809,594) (18,479,412) - (18,479,412)

Closing balance 6,776,880 3,000,000 9,776,880 8,819,240 3,000,000 11,819,240


Sp ecific Genera l Tot al Specific Genera l To ta l

(Rupees in "000")

In local currency 6,776,880 3,000,000 9,776,880 8,819,240 3,000,000 11,819,240

2005

Advances includeRs.20,104.490 mill ion (December31, 2005:Rs.23,424.374 mill ion)whichhave been placedunder

non-performing status as detailed below:

2006 2005

2006

9 ADVANCES Not e 2006 2005

In Pakistan - gross 9.1 71,290,937 64,744,526

Less:

9.2 (9,772,75 1) (11,814,916 )

(4,129) (4,324)

(9,776,880) (11,819,240)

Advances-net of provision 61,514,057 52,925,286

Provision for advances to employees

Provision for non-performing advances

Loans, cash credits, run ning finances, etc.

(Rupees in "000")





2006 2005

9.5 Part iculars of wri te offs

9.5.1 Against provisions 9.3 3,809,594 18,479,412

9.5.2 Write offs of Rs 500,000 and above 9.6 3,693,506 5,729,521

Write offs of below Rs 500,000 116,088 12,749,891

3 , 80 9 ,5 9 4 1 8 ,4 7 9, 4 12

(Rupees in "000")

Note 2006 2005

9.6 Deta il s of write offs of Rs 500,000 and above

9.7

To directors, associated companies, etc.

Balance at beginning of year 34,263 34,263

Repayments/write offs (34,263) -

Balance at end of year - 34,263

10 OPERATING FIXED ASSETS

Property and equipment 10.1 815,271 690,141

Intangible assets 10.2 3,595 -

818,866 690,141

Debt s due byc om panie s or f irm s i nwhi ch t he d i r ec to r s of t he ba nk a re i n te res t ed a s d i r ec to r s, pa rt ne rs or

in the case of p rivate companies as memb ers

(Rupees in "000")

In t e rm s of s ub- se ct ion (3) of Sec ti on 33Aof t he Ba nking Com pa ni es Ord ina nce , 1962 t he s ta t em e nt i n

respectof writ ten-off loans or anyother financia l re l ief of fivehundred thousandrupees or aboveal lowed

to a person(s)during the year ended December 31,2006 inrespect of projec t loansonly given at annexure-

1. However, this write off does not effect the Bank's right to recover debts from these customers.

Particulars of loans and advances

1 0 . 1

P r o p e r t y a n d e q u i p

m e n t s



2 0 0 6

A d d i t i o n s

( D e l e t i o n s ) /


A t

D e c e m b e r

3 1 , 2 0 0 6

A t

J a n u a r y 1 ,

2 0 0 6

C h a r g e f o r

t h e y e a r

( D

e l e t i o n s ) /

a d

j u s t m e n t s

A t

D e c e m b e r

3 1 , 2 0 0 6

B o o k v a l u e

a t

D e c e m b e r

3 1 , 2 0 0 6

R a t e o f


F r e e h o l d l a n d

1 7 0 , 9 6 1

-

-

1 7 0 , 9 6 1

-

-

-

-

1 7 0 , 9 6 1

-

L e a s e h o l d l a n d

1 0 , 6 4 0

-

-

1 0 , 6 4 0

1 , 1 9 4

3 9 8

-

1 , 5 9 2

9 , 0 4 8

-

B u i l d i n g o n f r e e h o l d

l a n d

1 3 7 , 8 8 6

-

-

1 3 7 , 8 8 6

1 9 , 9 2 7

5 , 8 9 8

-

2 5 , 8 2 5

1 1 2 , 0 6 1

5 %

B u i l d i n g o n l e a s e h o l d h o l d l a n d

3 0 3 , 7 3 2

6 6 8

-

3 0 4 , 4 0 0

5 4 , 7 7 7

1 2 , 4 6 4

-

6 7 , 2 4 1

2 3 7 , 1 5 9

5 %

F u r n i t u r e f i x t u r e a n d

e q u i p m e n t

7 3 , 8 1 8

5 8 , 2 1 9

( 4 , 8 9 5 )

1 2 7 , 1 4 2

3 7 , 0 6 0

2 3 , 6 3 7

( 2 4 2 )

6 0 , 4 5 5

6 6 , 6 8 7

1 0 / 3 3 %

V e h i c l e s

2 4 2 , 4 3 0

1 8 5 , 8 6 1

( 5 1 , 2 1 9 )

3 7 7 , 0 7 2

1 3 6 , 3 6 8

6 2 , 3 2 4

( 4 0 , 9 7 5 )

1 5 7 , 7 1 7

2 1 9 , 3 5 5

2 0 %

2 0 0 6

9 3 9 , 4 6 7

2 4 4 , 7 4 8

( 5 6 , 1 1 4 )

1 , 1 2 8 , 1 0 1

2 4 9 , 3 2 6

1 0 4 , 7 2 1

( 4 1 , 2 1 7 )

3 1 2 , 8 3 0

8 1 5 , 2 7 1

2 0 0 5

1 , 1 5 4 , 9 2 8

2 4 , 9 4 5

( 2 4 0 , 4 0 6 )

9 3 9 , 4 6 7

1 7 7 , 9 4 3

8 5 , 8 0 6

( 1 4 , 4 2 3 )

2 4 9 , 3 2 6

6 9 0 , 1 4 1

1 0 . 2

I n t a n g i b l e a s s e t s



2 0 0 6

A d d i t i o n s

A t

D e c e m b e r

3 1 , 2 0 0 6

C h a r g e f o r

t h e y e a r

A t

D e c e m b e r

3 1 , 2 0 0 6

B o o k v a l u e

a t

D e c e m b e r

3 1 , 2 0 0 6

R a t e o f


C o m p u t e r s o f t w a r e

-

5 , 3 9 3

-

5 , 3 9 3

-

1 , 7 9 8

-

1 , 7 9 8

3 , 5 9 5

3 3 . 3 3 %

2 0 0 6

-

5 , 3 9 3

-

5 , 3 9 3

-

1 , 7 9 8

-

1 , 7 9 8

3 , 5 9 5

2 0 0 5

-

-

-

-

-

-

-

-

-

1 0 . 3

T h e d e t a i l o f d i s p o s a

l o f a s s e t s w h o s e o r i g i n a l c o s t o r t h e b o o k v a l u e e x c e e d o n e m i l l i o n a n d t w o h u n d r e d f i f t y t h o u s a n d r u

p e e s r e s p e c t i v e l y , w h i c h e v e r i s l o w e r i s n i l .

( R u p e e s i n " 0 0 0 " )

C o s t


C o s t


( R u p e e s i n " 0 0 0 " )

( D e l e t i o n s ) /


A t

J a n u a r y 1 ,

2 0 0 6

( D

e l e t i o n s ) /

a d

j u s t m e n t s



1 TLC 5 Doo r RIU-1500 1992 700,0 01 560,00 1 140,000 87 6,786 736, 786 Auct ion M A fzal H 12 M Droad F 1 1/3

2 TLC 5 Do or IDF-1 32 1 1 99 2 7 00 ,0 01 5 60 ,0 01 1 40 ,0 00 8 77 ,0 00 7 37 ,0 00 Au ct io n F ais al gh azn avi Al gila nin iRo ad Qu et ta

3 TLC 3 Do or MNQ-4 46 0 1 99 2 6 00 ,0 01 4 80 ,0 01 1 20 ,0 00 7 77 ,7 86 6 57 ,7 86 Au ct io n W aq as Ah ma d Ra ja H3 1 St 60 G7 /2

4 TLC 3 Do or KTA-1 03 0 1 99 3 6 00 ,0 01 4 80 ,0 01 1 20 ,0 00 6 90 ,0 00 5 70 ,0 00 Au ct io n V illa ge S ar iSa le h Te h Disst H ar ip ur

5 TLC 3 Do or LO P- 20 97 1 99 2 6 00 ,0 01 4 80 ,0 01 1 20 ,0 00 6 91 ,0 00 5 71 ,0 00 Au ct io n M u ha mm ad Pe rv aiz F5 /1 ne ar PTA Bu ild in g Is la ma ba d

6 Su zu ki Je ep A-0 09 0 1 99 8 3 00 ,0 01 2 40 ,0 01 6 0, 00 0 2 75 ,5 28 2 15 ,5 28 Au ct io n S ha hid S ale em P 5 28 /c S t 9 N ia ma t Co lo ny Fa is la ba d

7 Su zu ki Je ep OKB-2 37 8 1 99 2 2 50 ,0 01 2 00 ,0 01 5 0, 00 0 1 60 ,7 86 1 10 ,7 86 Au ct io n R ah am at A li Ch ak n o 9 1/6 Te h Dist S ah iw al

8 Su zu ki Je ep IDD-3 78 3 1 99 0 2 30 ,0 01 1 84 ,0 01 4 6, 00 0 1 75 ,7 86 1 29 ,7 86 Au ct io n M Na se r PD 11 49 STo wn Ra wa lp in di

9 Su zu ki Je ep A-2 36 2 1 99 2 2 50 ,0 01 2 00 ,0 01 5 0, 00 0 2 84 ,5 55 2 34 ,5 55 Au ct io n M Am ja d Aria m oh alla Ra wa lp in di

1 0 Su zu ki Je ep LOQ-4 36 2 1 99 2 2 50 ,0 01 2 00 ,0 01 5 0, 00 0 2 92 ,8 86 2 42 ,8 86 Au ct io n M A mja d Aria m oh alla Ra wa lp in di

1 1 Su zu ki Je ep LO Q- 51 01 1 99 3 2 60 ,0 01 2 08 ,0 01 5 2, 00 0 1 74 ,7 86 1 22 ,7 86 Au ct io n R ah ma t Al iCh ak n o 9 1/ 6 Th e Di st S ah iw al

1 2 Su zu ki Je ep LOC-3 60 3 1 99 0 2 30 ,0 01 1 84 ,0 01 4 6, 00 0 2 07 ,0 00 1 61 ,0 00 Au ct io n S he r Af za lKh an A fza lMkt H ari Pu r

1 3 Su zu ki Je ep A-2 34 0 1 99 2 2 50 ,0 01 2 00 ,0 01 5 0, 00 0 2 42 ,9 99 1 92 ,9 99 Au ct io n S ae ed Ah ma d Pa niw ali Ta nki Ha ri pu r

1 4 Su zu ki Je ep A-3 46 0 1 99 1 2 45 ,0 01 1 96 ,0 01 4 9, 00 0 2 53 ,9 99 2 04 ,9 99 Au ct io n S ae ed Ah ma d Pa niw ali Ta nki Ha ri pu r

1 5 Su zu ki Je ep A-1 02 1 1 99 0 2 30 ,0 01 1 84 ,0 01 4 6, 00 0 2 50 ,0 00 2 04 ,0 00 Au ct io n S he r Af za lKh an Afza lMkt Ha ri Pu r

1 6 Su zu ki Je ep B-1 05 1 1 99 0 2 30 ,0 01 1 84 ,0 01 4 6, 00 0 2 29 ,7 86 1 83 ,7 86 Au ct io n S he r Af za lKh an Afza lMkt Ha ri Pu r

1 7 Su zu ki Je ep B-2 21 0 1 99 1 2 45 ,0 01 1 96 ,0 01 4 9, 00 0 1 62 ,2 52 1 13 ,2 52 Au ct io n P erva iz Ah ma d 8 0 b ad ar blo ck AIT Lh r

1 8 Su zu ki Je ep B-1 24 1 1 99 2 2 50 ,0 01 2 00 ,0 01 5 0, 00 0 1 67 ,8 99 1 17 ,8 99 Au ct io n P erva iz Ah ma d 8 0 b ad ar blo ck AIT Lh r

1 9 Su zu ki Je ep BUB-4 70 7 1 99 1 2 45 ,0 01 1 96 ,0 01 4 9, 00 0 1 60 ,0 00 1 11 ,0 00 Au ct io n S an au lla h Kh an Ta ni Kh ail Ais a Kh ail

2 0 Su zu ki Je ep B-2 26 9 1 99 2 2 50 ,0 01 2 00 ,0 01 5 0, 00 0 2 61 ,9 99 2 11 ,9 99 Au ct io n S ae ed Ah ma d Pa niw ali Ta nki Ha ri pu r

2 1 Su zu ki Je ep B-2 00 8 1 99 2 2 50 ,0 01 2 00 ,0 01 5 0, 00 0 2 45 ,7 86 1 95 ,7 86 Au ct io n S he r Af za lKh an Afza lMkt Ha ri Pu r

2 2 Su zu ki M eh ra n ID D- 57 93 1 99 0 9 0, 00 1 7 2, 00 1 1 8, 00 0 1 45 ,7 86 1 27 ,7 86 Au ct io n A a ja b Kh an H # 6 S t 2 0 Ko ra ng To wn Is la ma ba d

2 3 Su zu ki Me hra n IDF-4 71 9 1 99 3 1 00 ,0 01 8 0, 00 1 2 0, 00 0 1 72 ,7 86 1 52 ,7 86 Au ct io n S aja d Ali Kh an D ho k Aw an W ah C an tt

2 4 Su zu ki Me hra n IDF-4 68 0 1 99 3 9 0, 00 1 7 2, 00 1 1 8, 00 0 1 71 ,1 26 1 53 ,1 26 Au ct io n E it as ha m r aff H 61 2/2 9 D ye r Ra wa lp in di

2 5 Su zu ki Me hra n IDF-3 27 1 99 3 9 0, 00 1 7 2, 00 1 1 8, 00 0 1 85 ,0 00 1 67 ,0 00 Au ct io n J ave d Wa li H 02 ko me r Gilg it

2 6 Su zu ki Me hra n IDF-4 66 9 1 99 3 9 0, 00 1 7 2, 00 1 1 8, 00 0 1 68 ,0 00 1 50 ,0 00 Au ct io n N ah im Re hm an H No 5 9/5 BSt 7 2 G 7/2 Isb

2 7 Su zu ki M eh ra n ID D- 57 94 1 99 0 9 0, 00 1 7 2, 00 1 1 8, 00 0 1 70 ,0 00 1 52 ,0 00 Au ct io n M Ria z H No 7 23 S t 2 8 M us lim To wn Ra wa lp in di

2 8 Su zu ki M ar ga la ID D- 40 50 1 99 5 3 00 ,0 01 2 40 ,0 01 6 0, 00 0 3 36 ,1 26 2 76 ,1 26 Au ct io n S ye d Ja ve d iq ba l 57 C Ha rle y st re et Ra wa lp in di

2 9 Su zu ki M ar ga la ID G- 40 78 1 99 5 3 00 ,0 01 2 40 ,0 01 6 0, 00 0 3 21 ,1 26 2 61 ,1 26 Au ct io n S ye d Ja ve d iq ba l 57 C Ha rle y st re et Ra wa lp in di

3 0 Su zu ki Kh yb er RIU-5 84 6 1 99 3 2 00 ,0 01 1 60 ,0 01 4 0, 00 0 2 13 ,2 50 1 73 ,2 50 Au ct io n M Z afa r H5 5 St 6 8 I 8/3 Isla ma ba d

3 1 Su zu ki Kh yb er ID D- 62 58 1 99 0 2 00 ,0 01 1 60 ,0 01 4 0, 00 0 2 11 ,0 00 1 71 ,0 00 Au ct io n M ya ou sa f Ro om 30 03 P TV He ad Qu ar te rs Is b

3 2 Su zu ki Va n IDD-7 53 6 1 99 0 1 00 ,0 01 8 0, 00 1 2 0, 00 0 2 00 ,2 50 1 80 ,2 50 Au ct io n M ukh at ar Ah ma d H .NA 44 1 STo wn Ra wa lp in di

3 3 Su zu ki Va n IDD-6 80 9 1 99 0 9 0, 00 1 7 2, 00 1 1 8, 00 0 1 87 ,9 99 1 69 ,9 99 Au ct io n S ae ed Ah ma d Pa niw ali Ta nki Ha ri pu r

3 4 Su zu ki Va n IDH-4 51 8 1 99 6 1 10 ,0 01 8 8, 00 1 2 2, 00 0 2 40 ,0 00 2 18 ,0 00 Au ct io n S he r Af za lKh an Afza lMkt Ha ri Pu r

3 5 T. Hia ce IDB-2 35 1 1 98 6 4 50 ,0 01 3 60 ,0 01 9 0, 00 0 5 69 ,1 12 4 79 ,1 12 Au ct io n M Ayo ob H 11 /7 BSt 8 5R Ch ub urg iLh r

3 6 Su zu ki Je ep B-2 91 1 1 99 0 2 30 ,0 01 1 84 ,0 01 4 6, 00 0 2 71 ,0 00 2 25 ,0 00 Au ct io n C M Ar sh ad H No 6 F 11 /4 Isla ma ba d

3 7 Su zu ki Je ep B-2 83 7 1 99 2 2 50 ,0 01 2 00 ,0 01 5 0, 00 0 2 25 ,2 22 1 75 ,2 22 Au ct io n S Sa ee d Sh ah HNo 10 St 49 G1 0/3 Is la ma ba d

3 8 Su zu ki Je ep ADB- 29 01 1 99 1 2 45 ,0 01 1 96 ,0 01 4 9, 00 0 2 30 ,0 00 1 81 ,0 00 Au ct io n M Ilya s 2 9 S uh an 4 Fa iz ab ad Ra wa lp in di

3 9 Su zu ki Je ep BNB-2 21 0 1 99 0 2 30 ,0 01 1 84 ,0 01 4 6, 00 0 2 15 ,7 86 1 69 ,7 86 Au ct io n Am ma n Ulla h kh an 1 68 2/1 6 G he nji Mu lt an

4 0 Su zu ki Je ep BNB-3 66 0 1 99 1 2 45 ,0 01 1 96 ,0 01 4 9, 00 0 1 60 ,0 00 1 11 ,0 00 Au ct io n If tikh ar Ah ma d 4 Ali To wn La ho re

4 1 Su zu ki Je ep BNB- 89 99 1 99 2 2 50 ,0 01 2 00 ,0 01 5 0, 00 0 1 50 ,5 00 1 00 ,5 00 Au ct io n M Am ja d Au to G ui ld W or ks ho p F 1 1/ 3 R Y Kh an

4 2 Su zu ki Je ep BNB- 89 87 1 99 2 2 50 ,0 01 2 00 ,0 01 5 0, 00 0 1 52 ,0 00 1 02 ,0 00 Au ct io n M Am ja d Au to G ui ld W or ks ho p F 1 1/ 3 R Y Kh an

4 3 Su zu ki Je ep MNN-2 99 7 1 99 0 2 30 ,0 01 1 84 ,0 01 4 6, 00 0 2 02 ,0 00 1 56 ,0 00 Au ct io n If tikh ar Ah ma d 4 Ali To wn La ho re

4 4 Su zu ki Je ep BRC- 84 35 1 99 0 2 30 ,0 01 1 84 ,0 01 4 6, 00 0 2 26 ,0 00 1 80 ,0 00 Au ct io n Ra ja Sh ab ba n Ha ni f 2 31 / AE Sa te lli te To wn Ra wa lp in di

4 5 Su zu ki Je ep BRD-9 01 1 99 1 2 45 ,0 01 1 96 ,0 01 4 9, 00 0 2 01 ,7 87 1 52 ,7 87 Au ct io n M Ria z Ra so ola ba d Mu lt an

4 6 Su zu ki Je ep IDD-3 76 4 1 99 0 2 30 ,0 01 1 84 ,0 01 4 6, 00 0 1 80 ,0 00 1 34 ,0 00 Au ct io n Lia qa t ma so od Kh an 6 56 G 1 1/1 I sla ma ba d

4 7 Su zu ki Je ep A-1 03 3 1 99 1 2 45 ,0 01 1 96 ,0 01 4 9, 00 0 1 60 ,3 61 1 11 ,3 61 Au ct io n P erva iz Ah ma d 82 0 Ala ma Iq ba lTo wn La ho re

4 8 Su zu ki Je ep DGD -8 79 7 1 99 1 2 45 ,0 01 1 96 ,0 01 4 9, 00 0 1 42 ,2 41 9 3, 24 1 Au ct io n P e rva iz Ah ma d 8 20 Ala ma Iq ba l To wn La ho re

4 9 Su zu ki Je ep DGC-8 78 8 1 98 9 2 00 ,0 01 1 60 ,0 01 4 0, 00 0 1 88 ,7 87 1 48 ,7 87 Au ct io n M Ria z Ra so ola ba d Mu lt an

5 0 Su zu ki Je ep KSA-8 84 0 1 99 2 2 50 ,0 01 2 00 ,0 01 5 0, 00 0 1 56 ,7 86 1 06 ,7 86 Au ct io n If tikh ar Ah ma d 4 Ali To wn La ho re

5 1 Su zu ki Je ep B-1 88 3 1 99 1 2 45 ,0 01 1 96 ,0 01 4 9, 00 0 1 78 ,8 76 1 29 ,8 76 Au ct io n P erva iz Ah ma d 82 0 Ala ma Iq ba lTo wn La ho re

5 2 Su zu ki Je ep FDO-2 40 3 1 99 1 2 45 ,0 01 1 96 ,0 01 4 9, 00 0 1 55 ,5 50 1 06 ,5 50 Au ct io n M Ash ra f P 19 76 St 13 Fa ro oq ab ad

5 3 Su zu ki Je ep FDN -2 20 3 1 99 0 2 30 ,0 01 1 84 ,0 01 4 6, 00 0 2 00 ,7 86 1 54 ,7 86 Au ct io n M u na wa r Hu ss ai n P 2 10 8 St 2 9 Iq ba l Na ga r Fa is ala ba d

5 4 Su zu ki Je ep DM R- 10 31 1 99 0 2 30 ,0 01 1 84 ,0 01 4 6, 00 0 1 46 ,8 21 1 00 ,8 21 Au ct io n P e rva iz Ah ma d 8 20 Ala ma Iq ba l To wn La ho re

5 5 Su zu ki Je ep GAE- 92 42 1 99 0 2 30 ,0 01 1 84 ,0 01 4 6, 00 0 2 15 ,7 86 1 69 ,7 86 Au ct io n A m ma n Ul la h Kh an 1 68 2/ 16 Ch un gi # 8 M ult an

5 6 Su zu ki Je ep GTD- 28 81 1 99 2 2 50 ,0 01 2 00 ,0 01 5 0, 00 0 1 53 ,8 51 1 03 ,8 51 Au ct io n P e rva iz Ah ma d 8 20 Ala ma Iq ba l To wn La ho re

5 7 Su zu ki Je ep GAF- 93 62 1 99 1 2 45 ,0 01 1 96 ,0 01 4 9, 00 0 1 66 ,9 00 1 17 ,9 00 Au ct io n U m er Ha ya t S t 2 Ba jl im oh all ah Ha fiz Ab ad

5 8 Su zu ki Je ep GP-2 02 3 1 99 0 2 30 ,0 01 1 84 ,0 01 4 6, 00 0 1 80 ,0 00 1 34 ,0 00 Au ct io n A rsh ad Ah ma d Kh an s t 36 F6 /1 Isla ma ba d

5 9 Su zu ki Je ep E-0 70 6 1 99 0 2 30 ,0 01 1 84 ,0 01 4 6, 00 0 1 76 ,5 50 1 30 ,5 50 Au ct io n M eh ara b Kh an Da rg ai Lo ra la i

6 0 Su zu ki Je ep JGA-7 11 4 1 99 1 2 45 ,0 01 1 96 ,0 01 4 9, 00 0 2 02 ,0 00 1 53 ,0 00 Au ct io n M . Mu nir Ba ig C ha k 33 G BJa ra na wa la

6 1 Su zu ki Je ep JGB-6 83 9 1 99 1 2 45 ,0 01 1 96 ,0 01 4 9, 00 0 2 17 ,9 33 1 68 ,9 33 Au ct io n Kh alid M a hm oo d 4 2 A Iq ba lNa ga r TT Sin gh

6 2 Su zu ki Je ep KWA-1 15 1 99 1 2 45 ,0 01 1 96 ,0 01 4 9, 00 0 1 37 ,3 73 8 8, 37 3 Au ct io n P erva iz A hm ad 8 20 A la ma I qb al To wn La ho re



10.4 List of vehicles disposed o ff during th e year

65 Javed Shahzad 3553 /23 Freed Abad Multan

66 Iftikhar Ahmad 4 Ali Town Lahore

67 Alamzeb H 19 St 83 G 11/1 Islamabad

68 Amanullah Khan 1628/16 Chungi No 8 Multan

69 Raja Shabban Hanif E 231/A Satellite Town Rawalpindi


71 Sajid Iqbal Abbasi 100 ST 6 G 11/2 Islamabad

72 Abid Mahmood Lane No 3 Damial Camp Rawalpindi


74 Taufiq Ahmed Nadir H # 2Irfanabad Islamabad



77 Qaiser Ali H No 2/2 C G 7/2 Islamabad

78 Raja Shaban Hanif E 231/A Satellite Town Rawalpindi

79 Pervez Ahmad 820 Alama Iqbal Town Lahore

80 M. Abid Abbasi 25-B Khaiban Sir Syed Rawalpindi


82 Pervez Ahmad 820 Alama Iqbal Town Lahore83 Zakir Hussain H # 608 Dhok Choudhraian Rawalpindi

84 Muhammad Jamil 7 Kanal Colony R Y Khan

85 M. Yaqoob Khan 12 Kanal Colony R YKhan

86 M. Rafiq H # 12 ST 19 peoples colony Gujranwala


88 Waheed Ahmed H No 1051 Qadeem Hari Pur

89 M. Munir Baig Chak No 33 Jaranwala

90 Tahir Farooq Cheema Chak No 88 North Sargodha

91 Raja Shaban Hanif E 231/A Satellite Town Rawalpindi

92 Ali Akbar Kanawal Chiniot


94 Muhammad Farooq H # BV 355 Sadiqabad Rawalpindi

95 Muhammad Irfan H 10/5-B St 76 G 7/1 Islamabad


97 Ch. Muhammad Arshad H # 6 F 11/4 Islamabad

98 Zakir Hussain H # 608 Afshan Colony Rawalpindi

99 Liaquat Masood R/o 656 G 11/1 Islamabad




103 Muhammad Ishaq H # 21 St 440 A Bagwanpura Lahore

104 Arshad Ahmed Khan H 23 St 36 F6/1 Islamabad

105 Javed Shahzad 3553/23 Fareedabad Multan


107 Javed Shahzad 3553/23 Fareedabad Multan

108 Pervaiz Ahmad 820 Alama Iqbal Town Lahore

109 Pervaiz Ahmad 820 Alama Iqbal Town Lahore

110 Sardar Amreez Khan H # 8 Block 6 ZTBL

111 Sardar Bhadur Khan 40 E St 57 G 6/4 Islamabad




115 Abdul Sattar Mong Bajri Bagh

116 Zia Hussain 24 Circular Road Abbottabad

117 Qasim Akram H 230 Mian Service Road Lahore

118 Aiffullah Khan Tah kot Bhatghram

119 Yar Muhammad 38 Surriya Jabeen Park Lahore

120 Tassen 54 St 3 Hussian town Multan Road Lhr

121 Dilawar Hussain Gali Dera Mian Naser MohallahPoeplanawala PindiBhatt ian

122 Sadar-ud-din Flat No 619 A Ghulshan e johar Karachi

123 Ahmed Hussain Qali Chatt an Quet ta

124 Ikram Hayat Mohallah Sherzada Swat

125 M. Saqib Malik H # 3 potato Research Center Abbottabad

126 Ghos Ullah Khan Mohallah Sirghoys Chakwal

127 Fareed Ahmed H 50 St 9 Muslim Abad Karachi

128 Sultan Khan H 545 St 46 G 10/4 Islamabad

129 M. Saqib Malik H # 3 potato Research Center Abbottabad

130 Abdul Rashid 12/3 E st 52 F 6/4 Islamabad

131 M. Asif Qasim H 62 St 2 Cahmra Mandi TT Singh

132 Abdul Rashid 12/3 E st 52 F 6/4 Islamabad

133 Muhammad Afzal H 383 St 43 G 9/1 Islamabad

134 Abdul Latif Chana Bandi Hari pur



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140,000

117,786

175,786

209,786

161,000

155,786

202,000

155,000

160,786

148,000

169,786

100,786

188,000

161,000

96,241

165,786

110,786

113,262129,000

146,500

143,000

106,550

126,786

122,999

176,000

104,000

164,000

134,000

98,786

174,000

150,000

116,786

205,000

184,000

201,000

107,786

116,786

127,786

118,891

176,070

161,000

129,786

161,000

96,313

101,141

209,556

199,890

116,786

145,786

132,786

227,500

660,000

920,000

820,000

760,000

415,000

540,000

430,000

500,000

485,000

450,000

390,000

450,000

440,000

587,786

195,000

186,000

161,000

155,000

175,000

189,000

166,786

221,786

255,786

210,000

205,786

248,000

204,000

210,786

200,000

215,786

146,786

240,000

210,000

142,241

215,786

159,786

162,262175,000

195,500

195,000

155,550

175,786

172,999

225,000

150,000

210,000

183,000

147,786

220,000

200,000

166,786

251,000

230,000

250,000

156,786

166,786

176,786

167,891

225,070

210,000

175,786

210,000

145,313

147,141

255,556

245,890

162,786

191,786

188,786

283,500

800,000.00

1,060,000.00

960,000.00

900,000.00

535,000.00

660,000.00

550,000.00

620,000.00

605,000.00

570,000.00

510,000.00

570,000.00

560,000.00

707,786.00

245,000.00

235,000

210,000

205,000.00

225,000.00

49,000

49,000

46,000

46,000

49,000

50,000

46,000

49,000

50,000

52,000

46,000

46,000

52,000

49,000

46,000

50,000

49,000

49,00046,000

49,000

52,000

49,000

49,000

50,000

49,000

46,000

46,000

49,000

49,000

46,000

50,000

50,000

46,000

46,000

49,000

49,000

50,000

49,000

49,000

49,000

49,000

46,000

49,000

49,000

46,000

46,000

46,000

46,000

46,000

56,000

56,000

140,000

140,000

140,000

140,000

120,000

120,000

120,000

120,000

120,000

120,000

120,000

120,000

120,000

120,000

50,000

49,000

49,000

50,000

50,000

196,001

196,001

184,001

184,001

196,001

200,001

184,001

196,001

200,001

208,001

184,001

184,001

208,001

196,001

184,001

200,001

196,001

196,001184,001

196,001

208,001

196,001

196,001

200,001

196,001

184,001

184,001

196,001

196,001

184,001

200,001

200,001

184,001

184,001

196,001

196,001

200,001

196,001

196,001

196,001

196,001

184,001

196,001

196,001

184,001

184,001

184,001

184,001

184,001

224,001

224,001

560,001

560,001

560,001

560,001

480,001

480,001

480,001

480,001

480,001

480,001

480,001

480,001

480,001

480,001

200,001

196,001

196,001

200,001

200,001

245,001

245,001

230,001

230,001

245,001

250,001

230,001

245,001

250,001

260,001

230,001

230,001

260,001

245,001

230,001

250,001

245,001

245,001230,001

245,001

260,001

245,001

245,001

250,001

245,001

230,001

230,001

245,001

245,001

230,001

250,001

250,001

230,001

230,001

245,001

245,001

250,001

245,001

245,001

245,001

245,001

230,001

245,001

245,001

230,001

230,001

230,001

230,001

230,001

280,001

280,001

700,001

700,001

700,001

700,001

600,001

600,001

600,001

600,001

600,001

600,001

600,001

600,001

600,001

600,001

250,001

245,001

245,001

250,001

250,001

1991

1991

1990

1990

1991

1992

1990

1991

1992

1993

1990

1990

1993

1991

1990

1992

1991

19911990

1991

1993

1991

1991

1992

1991

1990

1990

1991

1991

1990

1992

1992

1990

1990

1991

1991

1992

1991

1991

1991

1991

1990

1991

1991

1990

1990

1990

1990

1990

1994

1994

1992

1992

1992

1992

1992

1992

1992

1992

1992

1992

1992

1992

1992

1992

1992

1991

1991

1992

1992

KSA-7780

KSA-7625

MRB-2174

IDE-1461

BK-2923

BK-3640

SWA-1189

SWA-1161

MNQ-9730

MHA-5590

MHA-5369

MHA-5368

MHA-7891

MHA-6317

MHA-803

LOQ-4458

OKA-8205

OKA-8005OKA-7808

RNE-5160

BRD-8382

GAF-9364

CH-5253

AKA-921

SLG-4443

SGF-1196

SGF-496

SGF-5718

SGF-5717

LOA-8794

SGG-2159

SAD-1996

SAC-7633

IDD-3538

SAC-9247

SAC-9244

SAD-674

E-0117

E-0190

GP-2004

E-0016

E-0011

NL-105

STE-2990

FDM-7430

DRA-1039

DRA-1058

VRC-4778

VRC-2002

VRD-878

IDG-1903

IDF-1148/1992

RIU-1460/1992

RIU-1459/1992

IDF-1326/1992

MNQ-4235/1992

FDP-6511/1992

MIA-3326/1992

GP-2038/1992

GP-2039/1992

GLTA-4005 /1992

A-1018/1992

IDF-1756/1992

GAG-7735/1992

RIU-1486/1992

JMB-4470/1992

JMB-2672/1991

AKA-206/1991

ADB-3713/1992

M-3642/1992

SuzukiJeep

SuzukiJeep

SuzukiJeep

SuzukiJeep

SuzukiJeep

SuzukiJeep

SuzukiJeep

SuzukiJeep

SuzukiJeep

SuzukiJeep

SuzukiJeep

SuzukiJeep

SuzukiJeep

SuzukiJeep

SuzukiJeep

SuzukiJeep

SuzukiJeep

SuzukiJeepSuzukiJeep

SuzukiJeep

SuzukiJeep

SuzukiJeep

SuzukiJeep

SuzukiJeep

SuzukiJeep

SuzukiJeep

SuzukiJeep

SuzukiJeep

SuzukiJeep

SuzukiJeep

SuzukiJeep

SuzukiJeep

SuzukiJeep

SuzukiJeep

SuzukiJeep

SuzukiJeep

SuzukiJeep

SuzukiJeep

SuzukiJeep

SuzukiJeep

SuzukiJeep

SuzukiJeep

SuzukiJeep

SuzukiJeep

SuzukiJeep

SuzukiJeep

SuzukiJeep

SuzukiJeep

SuzukiJeep

SuzukiJeep

SuzukiJeep

TLC5 Door

TLC5 Door

TLC5 Door

TLC5 Door

TLC3 Door

TLC3 Door

TLC3 Door

TLC3 Door

TLC3 Door

TLC3 Door

TLC3 Door

TLC3 Door

TLC3 Door

TLC3 Door

SuzukiJeep

SuzukiJeep

SuzukiJeep

SuzukiJeep

SuzukiJeep



1 3 5 S uz u ki J e ep A -1 0 33 / 19 9 2

1 3 6 S uz u ki J e ep A -2 9 01 / 19 9 0

1 3 7 S uz u ki J e ep M -7 9 21 /1 9 90

138 Suzuk i Jeep IDD -2508 /1990

139 Suzuk i Jeep IDE -8096 /1992

1 4 0 S uz u ki J e ep B -1 6 13 / 19 9 1

141 Suzuk i Jeep G AF-9635 /1992

1 4 2 S uz u ki J e ep B -3 4 79 / 19 9 0

143 Suzuk i Jeep M DA -499 /1991

1 4 4 S uz u ki J e ep A -2 9 11 / 19 9 0

1 4 5 S uz u ki J e ep B -2 7 14 / 19 9 2

1 4 6 S uz u ki J e ep A -1 1 68 / 19 9 2

1 4 7 S uz u ki J e ep A -1 0 38 / 19 9 2

1 4 8 S uz u ki J e ep A -1 0 03 / 19 9 2

1 4 9 S uz u ki J e ep A -1 0 26 / 19 9 0

150 Suzuk i Jeep K TA -4202 /1991

151 Suzuk i Jeep IDE -2259 /1991

1 5 2 S uz u ki J e ep B -2 0 05 / 19 9 2

153 Suzuk i Jeep A KA -1102 /1992

1 5 4 S uz u ki J e ep A -1 0 34 - 19 9 2

155 Suzuk i Jeep B LN -2185 /1992

156 Suzuk i Jeep R IU -4724 /1992

157 Suzuk i Jeep G LT A-3241 /1990

158 Suzuk i Jeep G HE -185 /1990

159 Suzuk i Jeep A DB -2536 /1991

1 6 0 S uz u ki J e ep A -1 1 62 / 19 9 2

161 Suzuk i Jeep G ZR -64 /1990

1 6 2 S uz u ki J e ep B -3 2 01 / 19 9 2

1 6 3 S uz u ki J e ep A -1 0 02 / 19 9 2

164 Suzuk i Jeep IDD -8564 /1992

1 6 5 S uz u ki J e ep B -1 8 73 / 19 9 1

166 Suzuk i Jeep A JK-4906 /1992

1 6 7 S uz u ki J e ep A -1 0 36 / 19 9 0

168 Suzuk i Jeep A DB -2537 /1991

1 6 9 S uz u ki J e ep A -1 0 35 / 19 9 0

170 Suzuk i Jeep A JK-9135 /1991

171 Suzuk i Jeep IDF-1280 /1992

1 7 2 S /P ic ku p I DD -7 2 47 / 19 9 1

1 7 3 S uz u ki J e ep E -0 0 92

1 7 4 S uz u ki J e ep LS B- 1 23 1

1 7 5 S uz u ki J e ep E -0 1 34

1 7 6 S uz u ki J e ep E -0 0 17

1 7 7 S uz u ki J e ep G S- 2 04 1

1 7 8 S uz u ki J e ep G P- 20 0 4

1 7 9 S uz u ki J e ep G P- 40 0 9

1 8 0 S uz u ki J e ep 5 0 1- 0 63

1 8 1 S uz u ki J e ep KS A- 7 36 3

1 8 2 S uz u ki J e ep S AD -1 9 87

1 8 3 S uz u ki J e ep N L- 6 15

1 8 4 S uz u ki J e ep S LG -5 9 60

1 Ya m a ha -1 0 0 S KF -4 3 18

2 Ya m a ha -1 0 0 S KE -3 3 18

3 Ya ma h a- 10 0 FD O- 59 79

4 Ya ma h a- 10 0 FD O- 60 30

5 Ya ma h a- 10 0 FD O- 78 83

6 Ya ma h a- 10 0 FD O- 63 23

7 Ya ma h a- 10 0 FD O- 72 188 Ya ma h a- 10 0 FD O- 72 15

9 Ya ma h a- 10 0 FD O- 64 51

1 0 Ya m a ha -1 0 0 F DO -6 3 02

1 1 Ya m a ha -1 0 0 F DO -6 9 87

1 2 Ya m a ha -1 0 0 F DO -7 9 88

1 3 Ya m a ha -1 0 0 J CB -1 5 60

1 4 Ya m a ha -1 0 0 J CB -1 5 62

1 5 Ya m a ha -1 0 0 S KF -2 2 08

1 6 Ya m a ha -1 0 0 S KE -1 9 09

No te 2006 2005

11 DEFERRED TAX ASSETS/(LIABILITIES)

Deferred tax arising in respect of tax depreciation (7,629) 1,829

1 2 O THER AS SETS

Income/mark-up accrued in local currency held in banks 74,107 74,258

Income/mark-up accrued on loans and advances 2 ,3 61 ,8 14 2 ,0 85 ,4 87

Income/mark-up accrued on investments 72,517 103,768

Advances, deposits, advance rent and other prepayments 80,391 63,902

Tax recovera ble 12.1 308,053 308,053

Non-banking assets acquired in satisfaction of claims 12.2 223,881 209,574

Branch adjustment account - 792,819

Suspense account 2,001 3,848

Stationery and stamps in hand 13,035 10,970

Relief pa ckages - 939,468

Receivable from defined benefit plans 12.3 3,779,485 1,936,411

Stock in hand 14,565 14,640

Commutation paid to employees under SR-2005 2,969,446 -

Receivable from Federal Government against golden hand shake scheme 485,787 2,643

Receivable from Pension Trust Fund against g olden han d shake scheme 12.4 67,901 117,901

Receivable from Benevolent Trust Fund against g olden han d shake scheme 12.4 17,250 17,250

Others 12.5 16,188 15,208

1 0, 48 6, 42 0 6 ,6 96 ,2 00

Provision held against other assets 12.6 (2,076,978) (28,73 7)Other assets (net of provision) 8 ,4 09 ,4 42 6 ,6 67 ,4 63

12.1

12.2

12.3 Receivable from defined b enefit plans

Pension scheme 32.1 2 ,4 36 ,6 93 7 78 ,7 01

Benevolent scheme-officers/executives 32.2 188,855 156,435

Benevolent scheme-clerical/non-clerical 32.3 (15,753) (34,760)

Gratuity scheme 32.4 1,169,690 1,036,035

1 2.3 .1 3 ,7 79 ,4 85 1 ,9 36 ,4 11

(Rupees in "000")

Deferredtax asset/liabilitiesarised ue to temporarydifference on account of depreciation chargedo n operatingfixed

a ss et s . T he a m o un t o f d e f e rr ed t a x p r o vi de d i s b a s ed o n t h e e xp e ct e d m a n n e r o f r ea li za t io n o r s et t le m en t o f t h e

carryingamount ofasse tsand l iabi li t ie susingthe taxra tesenac ted a t the ba lanceshee tda te .A defer red taxasse ts is

recognized only to the extent it is probable that future taxable profit will be available and the credits can be utilized.

Thisincludesan amountof Rs297.149mil lionrece ivableon accountof minimum income taxlevied bythe incometax

authorities under Section 80-Dof Income Tax Ordinance,1979, forassessment years 1991-92 to 1998-99.The income

of the Bankwas exempt f rom taxupto incomeyearended June 30,1999. The Bankpa id,under protest , the disputed

taxdemand and a lso f iled wr it pe t it ionin this r espec t in LahoreHigh Cour t ,RawalpindiBench,Rawalpindi. La te ron,

the bankwithdrew the pe t it ionon direc t ions of the Federa l Government and the case wasre fe rr edto the Law and

Justice divisionof the Government of Pakistan(GoP)which decidedthe referencein Bank’sfavour. The CentralBoard

of Revenue disagreed with the aforesa id dec is ion and has further taken up the mat te rwi th Federa l Cabinet for i t s

r eview. Federa l cabine t has re fe r red the case to the Attorney General for f ina l dec is ion.The advice /dec is ion of the

AttorneyGeneralis stillawaited. Since the Bankisveryconfident fora favourabled ecisionfrom the AttorneyGeneral,

no provision in this respect has been made by the Bank in its books of account.

Marke tva lueof non-banking assets acquir edin sa t isf ac t ion of c la ims isRs.379.415mil lion(December 31,2005:

Rs. 358.680 million).



AbdulGhafoor Shah ladin Chitral

Malik Rauf Chak Jiwala teh Disst Multan

Muhamma d NaziMirpur P.O Harper

Zia Hussain H24 Circular Road Abbottab ad

BillTohid ColonyPesha war

Rustam Khan H307 St 06 British Home Islamabad

Muhammad Rafiq Thora RawalKaot

Muhammad Sabir Nakar Birangali Abbottaba d

Sabir Khan Khalla Buth Hari Pur

KhushdilAbbasi163 /164 UpparKehod Abbottabad

Muhammad Ali, Baria, Posh Alandi, Abottabad.

Nasir Hussain, 69-A90, Allama Iqbalt own Lahore,

Mubarak Shah, 0755-Dward 1044, Jhangirabad, Rawalpindi.

Hassan Shiraz, Old SabziMandi, Muzafargarh.

Sardar Khan Afsar, CB37, Gulshan Iqba l, Abottabad.

M. Asif Qasim H 62 St 2 Cahmra MandiTTSingh

M. Zafar Iqbal, 17 C, Scheme No 2, R.Y. Khan.

Nassir Hussain, 69-A90 Allama Iqbal Town, Lahore.

HajiShouka t, 309, Johar Town, Lahore.

Imran Javed, Siddique Colony Teh Dahrki, Distt. Ghotki.

Mansha Ullah Khan, Chak Bhakar.

M. Asif Amin, BS-10, Bagh Sardaran, Rawalpindi.

Muhammad Hanif, Barian, PO Shah Albandi, Abbottabad.

M. Saeed Akhtar, Eid Gah wartenbarter, Nankana.

Nasir Khan, Village Tarmamachia, Abbotta bad.

Hassan Akhtar, D-639, Satelite town, Rawalpindi.

AbdulGhafoor Shah ladin Chitral

Muhammad Suleman, Chak 48, The/Distt Bhakar.

Shahidullah Jan, GuriItameed gul, Charsada.

Muhammad Naeem, H105-3411-DDGulshanabad, Rawalpindi.

AbdulRashid, 12.3Est 52, F-6/4 Islamabad.

HajiBashi, Akhoon Bandi, Haripur.

M. Zahir Shah, Shahlachhin, Chitral.

Niaz Muhammad, Village Kohari, Batgram.

Imran Javed, Siddique Colony Te h Dahrki, Distt. Ghotki.

Kamran Baig, ZB.668, Awan Colony, Rawalpindi.

Malik Safdar Ahmad, Dho k Akhlas Kail, Talagang .

Eisa jan, Jhakah Colony, Mansehra.

Muhamma d Malook, Karachi

Bismillah Khan, Karachi

Ehsan-Ul-Haq, Karachi

Yousaf Khan, Karachi

Sohail Ahmed Kakar, Loralai



Syed Ahsan Ahmad, Islamabad

Muhammad Ishaq, Lahore

Pervaiz Ahmed, Lahore

Pervaiz Ahmed, Lahore

Muhammad Farooq, Lahore

Attaullah chacher

Nadir AliMaha r

Mushtaq Ahmed,Driver,ZonalOffice Faisalabad

Shafeeq Elahi, ZO, Faisalabad



Shafeeq Elahi, ZO, FaisalabadShafeeq Elahi, ZO, Faisalabad

Muhamma d Younus,Typist,Faisalabad branch

Muhamma d Younus,Typist,Faisalabad branch

Masood Akhter, Driver

Javed Iqbal,Typist Zonal Office, Faisalabad

Malik M. Saleem, Assistant, 18 Hazari Branch

Syed Alamdar Hussain, N/Q, Jhang Branch

Muhammad soomar R/O Ghotki

Ibrar Hussain R/O Bagarji,Taulca,Distt Sukkur

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185,000

134,000

134,000

169,000

190,000

131,000

155,000

144,000

186,000

259,000

195,000

215,000

185,000

205,000

164,000

176,000

176,000

160,000

155,000

150,000

180,000

225,000

194,000

144,000

186,000

205,000

149,000

180,000

190,000

210,000

221,000

160,000

159,000

181,000

154,000

156,000

205,000

209,000

98,000

16,000

90,000

17,000

74,000

48,000

88,000

199,000

94,891

95,151

138,615

123,222

36,936,123

20,100

19,600

5,150

7,450

10,030

11,150

7,0008,130

9,279

7,429

10,500

9,100

11,300

11,150

19,124

13,599

180,088

37,116,211

235,000.00

180,000

180,000

215,000

240,000.00

180,000

205,000.00

190,000

235,000

305,000

245,000.00

265,000.00

235,000.00

255,000.00

210,000

225,000

225,000

210,000.00

205,000.00

200,000.00

230,000.00

275,000.00

240,000

190,000

235,000

255,000.00

195,000

230,000.00

240,000.00

260,000.00

270,000

210,000.00

205,000

230,000

200,000

205,000

255,000.00

225,000

150,000.00

62,000

140,000.00

63,000

120,000

100,000.00

140,000.00

245,000

140,890.99

145,151.00

188,615.00

172,222

47,086,160

26,100

25,600

11,150

12,850

16,030

17,150

13,00014,130

15,279

13,429

16,500

15,100

17,300

17,150

25,124

17,999

273,891

47,360,051

50,000

46,000

46,000

46,000

50,000

49,000

50,000

46,000

49,000

46,000

50,000

50,000

50,000

50,000

46,000

49,000

49,000

50,000

50,000

50,000

50,000

50,000

46,000

46,000

49,000

50,000

46,000

50,000

50,000

50,000

49,000

50,000

46,000

49,000

46,000

49,000

50,000

16,000

52,000

46,000

50,000

46,000

46,000

52,000

52,000

46,000

46,000

50,000

50,000

49,000

10,150,037

6,000

6,000

6,000

5,400

6,000

6,000

6,0006,000

6,000

6,000

6,000

6,000

6,000

6,000

6,000

4,400

93,803

10,243,840

200,001

184,001

184,001

184,001

200,001

196,001

200,001

184,001

196,001

184,001

200,001

200,001

200,001

200,001

184,001

196,001

196,001

200,001

200,001

200,001

200,001

200,001

184,001

184,001

196,001

200,001

184,001

200,001

200,001

200,001

196,001

200,001

184,001

196,001

184,001

196,001

200,001

64,001

208,001

184,001

200,001

184,001

184,001

208,001

208,001

184,001

184,001

200,001

200,001

196,001

40,600,147

24,001

24,001

24,001

21,601

24,001

24,001

24,00124,001

24,001

24,001

24,001

24,001

24,001

24,001

24,001

17,601

375,213

40,975,360

250,001

230,001

230,001

230,001

250,001

245,001

250,001

230,001

245,001

230,001

250,001

250,001

250,001

250,001

230,001

245,001

245,001

250,001

250,001

250,001

250,001

250,001

230,001

230,001

245,001

250,001

230,001

250,001

250,001

250,001

245,001

250,001

230,001

245,001

230,001

245,001

250,001

80,001

260,001

230,001

250,001

230,001

230,001

260,001

260,001

230,001

230,001

250,001

250,001

245,001

50,750,184

30,001

30,001

30,001

27,001

30,001

30,001

30,00130,001

30,001

30,001

30,001

30,001

30,001

30,001

30,001

22,001

469,016

51,219,200

1992

1990

1990

1990

1992

1991

1992

1990

1991

1990

1992

1992

1992

1992

1990

1991

1991

1992

1992

1992

1992

1992

1990

1990

1991

1992

1990

1992

1992

1992

1991

1992

1990

1991

1990

1991

1992

1991

1993

1990

1992

1990

1990

1993

1993

1990

1990

1992

1992

1991

1996

1996

1996

1994

1997

1997

19971997

1997

1997

1997

1997

1997

1997

1996

1991





12.3.1

12.4

No te 2006 2005

12.5 Others

Defence saving certificates 5 17

Advance for purchase of machinery/goods in t ransit 17 17

Leg al ch arg es reco vera ble o n su it s file d a ga in st lo an d efau lt er 1 6,16 6 1 5,1 74

1 6, 18 8 1 5, 20 8

12.6 Provision against ot her assets

Opening balance 28,737 5,615,277

Charge for the year 12.6.1 2,048,971 12,936

Amount written off (730) (5,599,476)

Closing balance 2,076,978 28,737

12.6.1

13 BILLS PAYABLE

In Pakistan 276,333 235,741

1 4 BO RRO WIN GS

In Pakistan 14.1 51,257,213 51,257,213

14.1 Par t icula rs of bor rowings wi th r espect to cur renc ies

In local currency 14.2 51,257,213 51,257,213

14.2 Deta il s of bor rowings- secured

Borrowings from SBP

Agricultural loans 14.3 50,174,089 50,174,089

Agri-Project loans 14.4 1,083,124 1,083,124

5 1 ,2 5 7, 21 3 5 1 ,2 5 7, 2 13

The Bankannounced Staf f Regula t ion-2005 underwhich100% commuta t ion werepa id to thosewho optedfor SR-

2005. ADBvideits Aide-Memoire 13-March 29, 2006 supported the introduction of SR-2005and use of the remainingloan proceedsf romthe second tr anchefor this purpose on theGoPconf irmat ion with regardto theuse of r emaining

second tr anche programme loan proceeds for the implementa t ion of the SR-2005. The Bank share out of second

tr anche amounted to US$ 34 mill ion.About US$ 9 mill ion had a lr eady beenut i lized aga instVolunta ry Golden HandShake Scheme (VGHSS) and the ba lanceof about US$ 25 mill ion are lying with the MoF. The ADBalso agreed to

consider the useof the third t r anche proceeds(aboutUS$ 47 mill ion) for the implementa t ion of Bank'sSR-2005, on

the basis of posit ion of non-per forming loans of theBankaf te r the managementaudi t .F inance Divis ion of GoPvide

let te rNo.F.3(18) IF-1/2002 da ted May18,2006 confi rmed to ADBtha tFinance Divis ion hasno objec t ion for the useof the remaining loan proceeds from the 2nd tranche for the proposed Bank’s SR-2005.

It represents assetsrecognizedby the Bank as required by InternationalAccounting Standard-19 "EmployeeBenefits"

against its defined benefit schemes on the recommendation of independent actuaries.

Itrepresents the amount receivablefrom Pension Fund Trust and Benevolent FundTrustsagainst Golden HandShakeScheme

(Rupees in "000")

Whileeva lua t ing the per formanceof the slow moving ADBcategory “B” loans in a mee t ing da ted March 17,2007

cha ir ed by the Advisor to the PrimeMinste r on Finance and EconomicAf fa ir s , i t wasdec ided to have negot ia t ionswith ADB’s forthcoming Missionfor waiver of conditionalitiesfor release of third tranche which cannot be complied

w it h . If ADB d o e s n o t a g re e t o t h e p r o p o sa l o f w a iv er s, t h e p r og r am l oa n a m ou n ti ng t o US$ 7 5 m il li on m a y b e

cance lled. Keeping inview theaboveposi t ion,provis ion hasbeen made in the f inancia ls tatementsamount ingto Rs.2,049mil lionbe ing the di ff e rence of c la im amount ing to Rs.3,455 mill ion and the amounta l r eadyrece ivedby the

GoP amounting to Rs. 1,407 million out of second tranche proceeds.

14.3

14.4

Not e 2006 2005

15 DEPOSITS AND O THER ACCOUNTS

Customers

Fixed deposits 63,092 64,742

Saving deposits 202,684 111,724

Current accounts - remunerative 188,240 297,174

Current accounts - non-remunerative 2,399,173 2,136,334

Others - unclaimed deposits 29,195 34,673

1 5. 1 2 ,8 82 ,3 84 2 ,6 44 ,6 47

15.1 Part icula r s of deposi ts

In local currency 2,882,384 2,644,647

16 SUB-ORDINATED LOAN

As per r est ructur ing plan of the Bankapproved by the ECCof the cabine t ,SBP's Equi ty holdingof Rs.3.204 bi ll ion

w a s c o n ve rt e d i nt o s ub o rd in a te d l oa n o n t e rm s t o b e a g re ed w it h S BP. Ac co r di ng ly, t h e Ba n k h a s s u bm it t ed ap r op o sa l t o SBP f o r r es tr u ct u ri ng t h e d e bt a cc or d in g t o w h ic h t h e SBP 's d e bt o f Rs . 5 1 .2 5 7 b il li on a n d S BP' s

subordinated debt of Rs.3.204 bi ll ion isr epayable in15 equa lannua l insta llments commenc ing f rom2006 onward

w it h t h e p r o vi si on t o m a ke r ep a ym e nt o f t h e s u bo r di na t ed d e bt i n t h e l as t i ns t all me n t a n d r a te o f m a rk u p t o b epegged a t we ightedaverage yie ld of12 monthsTreasuryBil l r a teof 2.3558%per annumas perTreasuryBil lauc t ion

dated June 12, 2003 and capped at the aforesaid markup rate for an initial period of five years.

These loansweregiven bythe SBPfor the purpose of providing f inance to agrobased indust ry. Thesea re subjec t to

profi tand loss sharingwi th a maximumshareof prof it to SBPrangingf rom 4.00%to 6.00%per annum.These a resecuredby guaranteegiven by the GoP. The Bankhas submit ted a proposa l to SBP for r es t ructur ing of the debt as

stated in note 14.3.

S ince the capping ofmark-up chargesa t 2.3558%has not beenagreedby SBPwhichisof c r it ica l importance for thefuture f inancia lviabi li tyand susta inabil ity of the Bank, the mat ter has been re fe r red to Minist ry of Finance for

consideredgovernmentdec is ion.However themark-up on subordinateddebt a t the ra teof 2.3558%(f romDecember

14,2002 to June 30,2004) ,2.1867%(fromJuly1,2004 to June 30,2005) ,a t the ra te of8.4009%(f rom July1, 2005

t o J u n e 3 0 , 2 0 0 6 ) a n d a t t h e r a t e o f 8 . 7 9 07 % ( f ro m J ul y 1 , 2 0 0 6 t o De ce m be r 3 1 , 2 0 0 6 ) h a s b e e n c h ar g ed w h ic h i ssubject to adjustm ent on finalization of debt restructuring/repricing agreemen t with SBP.

SBP vide its lettersNo. ACD/3104/Loans-15-A/2004 dated December 16, 2004 and ACD/14/Loans-15-A/2004 dated

January4, 2005has agreed with proposed te rms except the proposed cappingof markup ra tewhich hasbeen f ixedon last auct ion'swe ighted yie ld of Government TreasuryBil lof 12 monthsmatur ityon f loa t ing basis everyyearand

repayment of the SBPdebts in15 year s in 30 bi-annua l insta llmentswi th a grace per iod of3 year ss ta r t ing f romJuly2003, i .e. the per iod of 15 year sfor r epayment of SBPdebts wil l s ta r t f rom July 2006.Thesubordina teddebt of Rs.3.204 billion shall be repaid in the last installment.

(Rupees in "000")

As p e r a g re em e nt w it h t h e SBP, t h es e l oa n s w e re o b t ai ne d f o r p r ov id in g f in a nc e t o c us t om e rs f o r a g ri cu lt u re

purposes .Three c redi t l ines amount ing to Rs.1.577 bi ll ion carryinte r es t r a teof 4.00%per annum while r emainingthir tytwo credi t l inesamount ing to Rs.49.680bi l lionarebased on prof it and loss sharingsubjec t to maximumshare

ofprof i t to SBPranging f rom 4.00%to 10.00%per annum.These loansa resecured bywayof guaranteeof GoP. The

Bank has submit ted a proposa l to SBP for r est ructur ing the debt according to which the SBP's debt of Rs. 51.257billion and SBP's subordinateddebt of Rs.3.204 billion isrepayablein 15 equalannual installmentscommencingfrom

2006onwardwi ththe provisionto makerepaymentof thesubordina teddebt inthe last insta llment andra te ofmark

up to be pegged a twe ighted averageyie ld of12 monthsTreasuryBil l r a teof 2.3558%per annumas per t r easurybi ll

auction dated June 12, 2003 and capped at the aforesaid markup rate for an initial period of five years.

SBP vide its lettersNo. ACD/3104/Loans-15-A/2004 dated December 16, 2004 and ACD/14/Loans-15-A/2004 dated

January4, 2005has agreed with proposed te rms except the proposed cappingof markup ra tewhich hasbeen f ixed

on last auct ion'swe ighted yie ld of Government TreasuryBil lof 12 monthsmatur ityon f loa t ing basis everyyearand

repayment of the SBPdebts in15 year s in 30 bi-annua l insta llmentswi th a grace per iod of3 year ss ta r t ing f romJuly2003, i .e. the per iod of 15 year sfor r epayment of SBPdebts wil l s ta r t f rom July 2006.Thesubordina teddebt of Rs.

3.204 bi ll ion sha ll be repa id in the last insta llment . Inviewof the c ri t ica l importance of debt pr ic ing for the future

f inancia lviabil ityand susta inabil ityof the Bankthe mat ter hasbeen re fe r red to Minist ryof Financefor a consideredGovernment decision. Tr ipa r t ite mee t ing of SBP, Minist ryof Financeand the Bank to f ina lize the debt mora tor ium

package is yet to be convened.Keeping inview the above sta ted facts mark-uphas beencharged on these loans asper existing contractual rat es in respective credit lines.





Not e 2006 2005

17 OTHER LIABILITIES

Mark-up/return/interest payable in local currency 9,359,844 6,624,360

Accrued expenses 34,123 37,512

Current taxation (provision less payments) 473,394 672,032

Branch adjustment 34,105 -

Contributory provident fund-SR 2005 17.1 10,000 -

Gratuity fund-SR 2005 17.1 25,995 -

Benevolnent fund (officer)-SR 2005 17.1 273 -

Security deposits 114,309 209,153

Payable to Ministry of Food Agriculture and Livestock 17.2 177,715 352,715

Profit payable on deposits and other accounts 19,077 19,282

Liabilit ies relating to Bangladesh 17.3 189 189

Provision fo r e mp lo ye es' p ost re tirem ent med ica l b ene fit s 32 .5 3,2 71 ,96 1 3 ,64 9, 67 1

Provision for employees' compensated absences 32.6 437,659 355,011

Payable to employees' against golden handshake scheme 35,739 33,133

Sundry deposits 219,721 140,919


Others 5,464 4,306

1 4, 22 6, 96 8 1 2, 10 0, 33 1

17.1

17.2

17.3 Liabili t ies relating to Bangladesh

Liabilit ies 1,372,794 1,343,424

Assets (1,372,605) (1,343,235)

17.3.1 189 189

17.3.1

(Rupees in "000")

Thisrepresentsthe amount of Rs.9.715 million(December31, 2005:Rs.9,715 million),Rs.168.000million(December

31,2005:Rs .168,000 mill ion)and Rs .Nil (December31, 2005: Rs . 175,000 mill ion) payable to Ministryof Food

Agriculture and

Livestock under Japanese KR-II grant-1996, Crop Maximization Project-productivity enhancement on sustainable

basis and incentive for Balochistan respectively.

This represent temporaryarrangementdue to delayin es tablishment of trus ts for the funds underSR-2005.These

amount s will be transferred to respe ctive Trust Funds as soon as the establishment of the se have been finalized.

This represents the amount relat ing to the activ it iesof the Bank in Bangladesh (formerEas tPakis tan) before its

separation . In accordance with the Finance Divis ion let ter No.F.5(12)PEC(op-FR)/78-236 dated May6, 1979 the

Bankhas to calculate in terest on the loansmade inBangladeshas itdoes in the case ofcorrespondingborrowings

madefrom the SBPand insteadof carryingthe in terest to profi tand lossaccount,willshow itin the balancesheet

o n ly. Th e Ba n k i s a c c ru in g i nt e re st a t t h e r a t e o f 8 % o n i ts l oa n s a n d a d va n ce s m a d e i n B a ng la d es h wi t h c o n t ra

increase in its liabilities relating to its activities in Bangladesh.

18 SHARE CAPITAL

Authorized capital

2,500,000,000 ordinary shares of Rs. 10 each

( De ce m be r 3 1 , 2 0 05 : 2 ,5 0 0, 00 0 ,0 0 0 o rd in a ry s ha re s o f Rs .1 0 e ac h) 2 5 ,0 0 0, 00 0 2 5, 00 0, 00 0

Issued, subscribed and paid up

1,186,961,201 ordinary shares of Rs. 10 each fully paid

18.1 11,869,612 11,869,612

18.1 Sh areh o ld er No o f o rd in ary

shares

Paid-up value

per share

2006 2005

Governm ent of Pakistan 1,185,961,201

277,100

119,00068,000

35,000

500,000

10 11,859,612 11,859,612

Governm ent of Punjab 10 2,771 2,771

Governm ent of Sindh 10 1,190 1,190Governm ent of NWFP 10 680 680

Governm ent of Balochistan 10 359 359

Erstwhile East Pakistan 10 5,000 5,000

1,186,961,201 11,869,612 11,869,612

(Rupees in "000")

(December 31, 2005: 1,186,961,201 ordinary shares of Rs.10

each fully paid)

19 RESERVES Sta tu to ry

reserves

Reserves for

contingencies

Total

(Rupees in "000")

Balance as at January 1, 2006 215,387 30,00030,000

245,387

Transfer from unapropriated profit 83,961 113,961

Balance as at December 31, 2006 299,348 60,000 359,348

19.1

19.2 The Bank has set aside contingency reserve for insurance of cash, building and vehicles.

20 SURPLUS ON REVALUATION OF ASSETS Note 2006 2005

(Rupees in "000")

Surplus on revaluation of securities

i) Quoted shares 360,511 242,543

ii) Other securities 2,500 2,500

20.1 363,011 245,043

20.1 All the ab ove-mention ed securities are Available-for-Sale securities.

21 CONTINGENCIES AND COMMITMENTS

21.1

21.2

S ta t u to r y r es er ve r e pr e se n t r e se rv e m a in t a in e d a s p e r r e qu ir em e n t o f S ec ti on 2 1 o f t h e Ba n ki ng Co m p an ie s

Ordinance, 1962.

Cont ingent l iabi li tyinrespect of 17 cases(December31, 2005:15 cases) f i led aga inst the Bankby variouspar t ie s is

estimated at Rs. 8.229 million (December 31, 2005: Rs. 11.307 million).

Cont ingent l iabil ityin respec t of 43 cases (December 31, 2005:5 cases) f i led aga inst the Bank invar ious courts of

law by the employees is estimated at Rs. 5.578 million (December 31, 2005: Rs. 0.572 million).





21.3

21.4

21.5

21.6 Th e G oP h a s r e du c ed t h e m a rk -u p r a te s o n t h e Ba n k a d va n ce s f ro m 1 4 .0 0 % t o 9 . 00 % v id e P re si de n t ia l Re li ef

Pa ck a ge 2 0 0 4 i . e. J ul y 1 , 2 0 0 4. As p e r t h e d ir e ct iv e o f t h e B a n k' s B o ar d o f D ir e ct o r s, t h e Ba n k h a s r e qu e st e d t h e

M in is t ry o f F in a n ce t o c o mp e n sa t e t h e l os s o f r ev en u e d u e t o t h is r e du c ti on i n r a t e o f m a r k -u p . Th e t o t al c la im i n

t h is r es pe ct h a s p ro vis io n ally b e en w o rk ed o u t a t Rs . 6 ,7 38 .0 00 m il lio n f or t h e p er io d f ro m J uly 1 , 2 0 04 t o

De ce m b er 3 1 , 2 0 0 6 . H ow e ve r, t h is a m o u nt h a s n o t b e en a cc o un t e d f o r i n t h e f in a n ci al s t at e m en t s a s t h e f o r m a l

approval from Ministry of Finance has not been received by the Bank.

The SBPdebt of Rs.54.461 bi ll ion is in the processof r epr ic ing/ r es t ructur ing.As perBankrest ructur ing planthe SBP

debt w as required t o link with one year T-Bill rate capp ed at 2.3 558 % plus pr ofit and loss (PLS) sharing, th e decision

iss t i llpending. The SBPdebt has beencharged a t exis t ing ra te i .e cont rac tua l r a te ,a s the SBPhas not ye taccepted

the capping and PLSar rangements. The f inanc ia l impac t of thiseventworks out to be approximatelyRs.1,020.036

million. However, whileissuingb alanceconfirmation certificateto the auditors, SBP reported Rs. 15,777.331 millionasouts tandingmark up as aga inst Rs.9,957.444mil lionworkedout by the Bank.Therepor tedSBPf igurehas been

w o rk ed o u t w it h o ut a p p li ca t io n o f P LS s h a r in g a r ra n g em e n t, w h er e as t h e B a n k h a s b e e n a p p ly in g m a rk u p a s p e r

existing contractua l arrangem ents which includes PLS sharing as well.

I ncome taxof Rs. 929.632mil lionwas levied bythe income taxdepar tmentfor assessment year 2001-2002,aga inst

p r o vi si on o f R s . 3 2 6 .2 8 1 m i l li on i n t h e b o o ks o f a c c ou n t s o f t h e B a nk f o r t h a t a s se ss m en t y ea r. Th e B a n k h a s p a i d

Rs. 785.103mil lion and a lso f iled appea lbe fore the Commissioner of Income Tax (Appea ls) aga inst the a foresa id

o r d er . Th e Co m m is si on e r h a s s et - as id e t h e a f or e sa id o r d er . H ow e ve r, t h e t a x d e p ar t m en t p r ef e rr e d a n a p p ea l

against th e order of CIT(A) before th e ITATwhich is pending fo r hearing.

In c om e t a x o f Rs . 1 , 92 8 .3 6 2 m i ll io n w a s l ev ie d b y t h e i nc om e t a x d e p a r tm e n t f o r a ss e ss m en t y ea r 2 0 0 2- 2 00 3 ,

a g a in s t p r o vi si on o f R s . 1 , 9 19 . 92 9 m il li on i n t h e b o o ks o f a cc o un t o f t h e Ba n k f o r t h a t a s s es sm e n t y e a r. Th e Ba n k

has pa idRs.577.092 mill ion aga inst the sa id demand and a lso f iled an appea lbe fore the Commissioner of Income

Ta x ( Ap p e al s) . Th e Co m m is si on e r h a s s e t- a si de t h e a f or es a id o r d er a n d n o w t a x d e p a r tm e n t p r ef er r ed a n a p p ea l

against the o rder o f CIT(A) before th e ITAT.

Note 2006 2005

(Rupees in "000")

22 MARKUP/RETURN/INTERESTEARNED

On loans and advances to customers 4,576,510 5,479,450

On investments in Held-to-Maturity securit ies 471,093 290,496

On deposits with financial inst itutions 954,101 1,052,7736 ,0 01 ,7 04 6 ,8 22 ,7 19

23 MARKUP/RETURN/INTERESTEXPENSED

Deposits 2,961 5,115

Long term borrowings-SBP 2,798,557 385,502

Bank commission and other charges 1,267 1,1212,802,785 391,738

2 4 OTHER INCOME

Rent on property 6,577 7,326

Gain on sale of fixed assets 37,116 23,591Loan application fee 345,512 309,875


Reversal of provision relat ing to defined benefit plans 24.1 2,110,467 270,279

Others 24.2 2,999,875 185,2695,514,079 828,519

24.1 Exc e ss p r ovi si on i n r es p ec t o f d e fi ne d b e n ef it p la n s h a s b e e n wr it t e n b a c k o n t h e b a si s o f a c tu a ri al v al ua t io n

carried out by an independent actuarial valuer.

24.2 Others

Recovery of loans transferred to proforma ledger 2,858,182 15,250

Sale proceeds of forms 4,227 3,771

Postal charges received from loanees 49,500 44,226

Miscellaneous income 87,966 122,0222,999,875 185,269

25 ADMINISTRATIVE EXPENSES

Salaries, allowances etc. 2,170,523 2,062,107

Charged for defined contribution plan - Provident Fund 238 240

Non-executive directors' fees, allowances and other 1,901 649

Rent, taxes, insurance, electricity, etc. 76,890 75,231

Legal and professional charges 21,180 3,800

Communications 33,855 35,275

Repairs and maintenance 13,039 10,534Motor vehicles 169,396 162,920

Stationery and printing 27,501 21,968

Advertisement and publicity 11,757 14,142

Auditors' remuneration 25.1 2,984 3,386

Depreciat ion 106,519 85,806

Amortization of preliminary expenses 267 6,570

14,532 32,178

Travelling 76,888 72,579

Others 32,980 24,9522 ,7 60 ,4 50 2 ,6 12 ,3 37

Amortization of deferred income

Note 2006 2005

(Rupees in "000")

2 5 .1 Aud i t or s ' r e m u n er a t io n

Audit fee 1,240 1,200

Special certifications and sundry advisory services 380 400

Tax services 274 227

Out of pocket expenses 226 226

TA/DA for auditors 864 1,333

2,984 3,386

2 6 OTHER CHARGES

Penalt ies imposed by SBP 306 3,802

2 7 TAXATIO N

For the year

Current 219,673 38,434

Deferred 9,458 (607)

229,131 37,827





27.1 Relationship between tax expense and accounting prof it

Accounting profit /(loss) for the year 652,481 (91,367)

Add: accounting depreciat ion 106,519 85,806

provision for diminution in the value of investment 10,110 -

Preliminary expenses 267

Provision for gratuity 264

Less: tax depreciation (98,323) (23,129)

dividend income for separate consideration (6,458) -

assessed loss for tax year 2006 (38,091) -

Amortization of preliminary expenses (53)

626,716 (28,690)

Tax-excluding dividend income 219,350 38,111

Tax on d ividend income 323 323

Tax for the current period 219,673 38,434

Applicable tax rate 35% 0.5%

28 BASIC EARNINGS PER SHARE

Profit/(loss) for the year 423,350 (129,194)

We ig ht ed a ve ra ge nu mb er of ord in ar y s ha re s (n um be r in th ou sa nd ) 1 ,1 86 ,9 61 1 ,1 86 ,9 61

Basic earnings per share (rupees) 0.36 (0.11)

Note 2006 2005

(Rupees in "000")

29

30 CASH AND CASH EQUIVALENTS

Cash and balance with treasury banks 6 1,295,464 1,585,421

Balance with other banks 7 7,783,566 7,813,8449 ,0 79 ,0 30 9 ,3 99 ,2 65

2006 2005

31 STAFF STRENGTH Num ber

Permanent 5,326 5,727

Others (on deputation) 1 -Total staff strength 5,327 5,727

32 DEFINED BENEFITPLANS

32.1 Pension scheme

32.1.1 General description

There is no dilutive effect on the basic earning per share of the Bank which is calculated above.

For employeeswho op ted fo r the schemein t roduced inyear1975 fo rcl er ical/ non-cl er ical s t aff and in theyear1977fo ro ffi cers/ execu tives , t he Bankoperat esan approvedfundedpens ion scheme on which month lycon t r ibu t ionsare made

on the bas is o f actuar ia l recommendat ion . However, mos t o f the offi cers/ execu tives have been excluded from th is

scheme afte r opting new Staff Regulations introduced in 2005 (SR-2005) effective from July 1, 2006.

32.1.2 Principal actua rial assumption


Expected ra te of increase in salary 9% per annum

Expected ra te of return on investments 10% per annum

2006 2005

(Rupees in "000")

32.1.3




(2 ,4 36 ,6 93 ) ( 77 8, 70 1)



Charge for the period 32.1.5 1,389,641 (138,553)

(3 ,0 47 ,6 32 ) (8 7, 20 6)

Closing net asset (2,436,692) (778,701)

32.1.5 Charge/(prepaid) for pension fund





Curtailment and settlement loss 1,504,714 -

1 ,3 89 ,6 41 (1 38 ,5 53 )

32 .2 Benevo len t s cheme - o ff icers /execu t ives


The lates t actuar ia l valuat ion i scarr ied ou t as at December 31 , 2006. The actuar ia l valuat ions weremade us ing the

Projected Unit Credit (PUC) method b ased on the following significant assumptions:


Reconciliation of pa yable/(receivable) to/(from) pen sion fund

For allofficers/executives,the Bankoperates an approvedfunded benevolent scheme to whichcontributions are made

at therat e o f2% ofbas i cpay to a maximum ofRs .100 ,byeach offi cer /execu t ive.Employee con tr ibu t ionsare matchedb y a n e q ua l a m o u n t o f c on t ri bu t io n s b y t h e Ba n k w h ic h is a ls o li ab le t o m e e t a n y s ho rt f al l i n t h e f un d . H o w eve r

cont r ibu t ionsare no tmade to the fundfo r those employeesgovernedby theSR-2005who have les s than ten yearso f

their remaining service.




Note 2006 2005(Rupees in "000")

32.2.3




Negative past service cost-not recognized 769 -

(1 88 ,8 55 ) (1 56 ,4 35 )

Reconciliation of payable/(receivable) to/(from) b enevolent fu nd

Thelatest actuarial valuation iscarriedout as at December 31,2006. Actuarialvaluationwas made usingthe following

significant assum ptions:








(7,603) (4,671)

Closing net asset (188,856) (156,435)





Actuarialgains recognized (358) (689)


Negative past service cost-recognized (6,917) -

(24,818) (11,346)

32 .3 Benevo len t s cheme - c ler i cal /non-cler i cal



Expected ra te of increase in salary 9 % per annum

Expected ra te of return on investments 10 % per annum

Note 2006 2005

(Rupees in "000")

32.3.3



Unrecognized part of transitional liability - (7,606)


15,753 34,760


Opening net liability 34,760 43,643


(3,823) (2,636)

Closing net liability 15,753 34,760

Reconciliation of pa yable/(receivable) to/(from) bene volent fund


For al l c ler ical/ non-cler ical s t af f, t he Bankoperat esan approved funded benevo len t scheme to which con tr ibu t ionsare

made at d i fferen t ra t esbu t no t exceed ing Rs. 100by eachemployee.Employee con t ribut ionsare matched byan equal

amount of contributions by the Bank which is also liable to meet any shortfall in the fund.


The lates t actuar ia lvaluat ion i scarri edou t asat December31 , 2006. Actuari a lvaluat ion wasmade us ing the fo llowing


32 .3 .5 Charge/ (p repaid ) fo r benevo len t fund




Actuarial (gains)/losses recognized (11,338) (12,874)


Transitional liability recognized 7,606 15,178

Past service cost-recognized 3 -

(15,184) (6,247)

32.4 Gratuity scheme



Expected ra te of increase in salary 9 % per annum

Expected ra te of return on investments 10 % per annum

32.4.3

Present value of defined benefit obligation 74,588 275



Past service cost not recognized (74,543) -

( 1, 16 9, 6 90 ) ( 1, 0 36 ,0 3 5)


Opening net asset (1,036,035) (914,550)


(6,069) (7,352)

Closing net asset (1,169,690) (1,036,035)

Note 2006 2005

(Rupees in "000")32 .4 .5 Charge/ (p repaid ) fo r g ratu ity fund

Current service cost 34 79

Interest cost 25 51



(1 27 ,5 86 ) (1 14 ,1 33 )


Reconciliation of pa yable/(receivable) to/(from) grat uity fund

The Bankhas al so int roducedSR-2005w.e. f. July2006wherein a separat eg ratu it y fund scheme hasbeen int roducedfo r thoseemployeeswho eitherop ted the afo resaid regulati ons or newappo in tmen t sunderSR-2005. Con t r ibu t ion to

the gratuity fund, w.e.f. August 2006, are made by the Bank at the rate of 8.33% of monetized salary per month.

The latestactuarialvaluation iscarriedout as at December 31, 2006.Actuarialvaluationwas made usingthe following

significant a ssumptions:

Fo r e m p lo ye e s w h o o p te d f o r t h e s ch e me i nt ro d uc ed i n 1 9 75 f or c le ri ca l/ no n -c le r ic a l s ta f f a n d in 1 9 77 f or

o ffi cers/ execu tives , t he Bank operat es an approved funded gratui tyscheme on which monthlycon t r ibu t ions, i f t he

employee has less than ten years of service, are made by the Bank on the basis of actuarial recommendation.





33 COMPENSATION OF DIRECTORS AND EXECUTIVES

Presid en t Directo rs Execu t ives

2006 2005 2006 2005 2006 2005

(Rupees in "000") (Rupees in "000")

Fee - - 1,900 610 - -

Managerial remuneration 3,600 3,600 - - 263,149 2,340

Charge for defined benefitplan 740 - - - 21,668 -Rent and house

maintenance 840 840 - - 29,371 960

Utilities - - - - 7,254 255

Medical - - - - 3,630 25

Conveyance 344 271 - - 25,135 361Furnishing allowance - - - - 1,774 -

Leave fare assistance 370 - - - - -Others - 300 - - 519 195

5,894 5,011 1,900 610 352,500 4,136

Number of persons 1 1 7 7 496 2

33.1

34 FAIR VALUE OF FINANCIALINSTRUMENTS

34.1 On-balance sheet fi nancial i ns t rument s

Book value Fair value Book value Fair value

Assets

Cash and balances with treasury banks 1,295,464 1,295,464 1,585,421 1,585,421

Balances with other banks 7,783,566 7,783,566 7,813,844 7,813,844

Investments 5,637,170 5,637,170 12,820,668 12,820,668

Advances 61,514,057 61,514,057 52,925,286 52,925,286

Other assets 7,991,397 7,991,397 5,473,231 5,473,231

84,221,654 84,221,654 80,618,450 80,618,450

Liabilities

Bills payable 276,333 276,333 235,741 235,741

Borrowings 51,257,213 51,257,213 51,257,213 51,257,213

Deposits and other accounts 2,882,384 2,882,384 2,644,647 2,644,647

Sub-ordinated loan 3,204,323 3,204,323 3,204,323 3,204,323

Other liabilit ies 14,185,002 14,185,002 12,098,283 12,098,283

71,805,255 71,805,255 69,440,207 69,440,207

Execu t ives mean employees , o ther than the ch ief execu tive and d i rectors, whose bas ic /monet ized salaryexceeds Rs.

500 ,000 in a f inanci alyear .The ch ief execu t ive, sen io r v ice presiden t and above o ther than underSR-2005 have been

provided Bankmaintained cars.Vice president and abovegoverned bySR-2005have alsobeen provided carsunder CarsLoan Depreci ati on Pol icy (CLDP). The increase in numberof execu tives in year 2006 i sdue to calcu lat ion based on

monetized salary whereas in year 2005 it was based on basic salary.

2006

( Rupees in "000" ) ( Rupees in "000" )

2005

3 2 .5 P o st r e t ir e m e n t m e d ic a l be n e f it s




Expected ra te of increase in salary 9% per annum

Expected ra te of return on plan assets 10% per annum

Pension indexation rate 3% per annum

Medical inflation rate 8% per annum

Exposure inflation ra te 10% per annum

32.5.3


Net acturial gains not recognized 1,417,187 2,280,211

Past service cost not recognized 40,836 -

3 ,2 71 ,9 61 3 ,6 49 ,6 71


Opening net liability 3,649,671 3,586,925

Charge for the period 32.5.5 (361,011) 79,692

(16,699) (16,946)

Closing net liability 3,271,961 3,649,671

32 .5 .5 Charge/(p repaid ) fo r medical benef i t s



Actuaria l gains recognized (178,605) (137,345)

Negative past service cost recognized (367,527) -

(361,011) 79,692

3 2 .6 E m pl o ye e co m p e n sa t e d ab s e n ce s

The l iab il it y o f the Bank in respect o f long- t erm employees compensat ed absences i s det ermined based on actuar ia l

valuat ion carr ied ou t us ing Pro j ect ed Unit Cred it (PUC) method. The l iab il it y o f the Bank as per the l ates t actuar ia l

valuat ion carr ied ou t as at December 31 , 2006 amounted to Rs . 437 .659 mi ll ion (December 31 , 2005: Rs. 355 .011

mi ll ion )whichhas beenfu l lyp rov ided by the Bank .The provi sionhas been increasedby Rs .82 .648mi ll ion fo r the year

ended December 31, 2006.

TheBankprovidespost retirement medicalbenefitsto eligible retired employees. Provision ismade annuallyto meet the

cost o fsuch medicalbenef it son the bas is o factuar ia lvaluat ion carri edou t by independen tactuarybyus ingPro ject ed

Unit Credit (PUC) met hod.

The lates t actuar ia lvaluat ion i scarri edou t asat December31 , 2006. Actuar ia lvaluat ion wasmade us ing thefo l lowing


Reconciliation of pa yable/(receivable) to/(from) med ical benefits


3 2 .7 D e fi n ed c o nt r ib u t io n p la n

Fo r a ll t h e e m p lo ye e s o f t h e B a nk w h o h a v e o p t e d f o r r e ti re m e nt b e ne f it s s c h em e a n no u nc ed i n y e ar 1 9 75 a n d y e a r

1977 fo r cler ical/ non-cl eri cal s t aff and fo r execu t ives/o ff icers respect ively, t he Bank operat es an approved non-con tr ibu to ry providen t fund (General Prov iden t Fund) th rough an independen t t rust . Con t r ibu t ions to the fund are

m a d e b y t h e e m p lo ye e s o n ly a t t h e r a t e o f 8 . 0 0% o f m e a n o f p a y s c a le p e r m o n th . F o r e m p lo ye e s w h o h a v e n o t o p t e d

fo r afo resaid ret iremen t benefi t s cheme, the Bank operat es an approved con t ributo ryprov iden t fund (Employees

P ro vi de n t F u n d) w h er e c on t ri bu t io n s a r e m a d e b y t h e Ba n k a n d e m p lo ye e s a t t h e r a t e o f 8 . 3 3 % o f b a si c s a la r y p e r

month.

ContributoryProvident Fund(CPF) schemehas alsobeen introduced bythe Bankunder StaffRegulations2005 (SR-2005)

w.e. f . Ju ly 2006fo r those employeeswho ei therop ted the said regulati ons or new appo in tmen ts are made under the

s a me . C o n tr ib u ti on s t o t h e C PF a r e m a d e b y t h e e m p lo ye e s a t t h e r a t e o f 2 . 00 % o f m o n et iz e d s a la r y p e r m o n t h a n d

m at ch in g co nt rib ut io n b y t he Ba nk, if t he ir r em ain in g se rvice is m or e t ha n t en ye ars f ro m t he d at e o f

option/appointment.





36 TRUST ACTIVITIES

37 RELATED PARTYTRANSACTIONS

2006 2005

(Rupees in "000")

Investm ent in KSSL 100,000 -

Services received from KSSL 35,350 -

Receivable from KSSL 36,175 -

Gratuity 3,760 -

38 CAPITALADEQ UACY

Regulatory capital base

Tier I capital

Shareholders capital 11,869,612 11,869,612

Reserves 359,348 245,387

Unappropriated profits 1,011,744 702,355

Less: adjustments - -

Total tier I capital 1 3, 24 0, 70 4 1 2, 81 7, 35 4

Tier II capital

Subordinated deb t (upto 50% of total t ier I capital) 3,204,323 3,204,323

Genera l provisions subject to 1.25% of tota l risk weighted assets 884,326 852,714

Revaluation reserve (up to 50%) 181,505 122,521

Total tier II capital 4,2 70 ,15 5 4 ,1 79,55 8

Eligible tier III capital- -

Total regulatory capital (a) 17,510,859 16,996,912

Risk weighted exposure s

Book value Risk ad jus t ed

value

B oo k v a lu e R is k a d ju s t ed

value

Bankscommonlyact as t rus t eesand in thei r f i duciarycapacit i es that resu lt s in theho ld ing orp l acing ofas set son behalf

o f individual, t rust , re t iremen tbenef it p l an and o ther ins ti t ut i on . Prov ided the t rust eeso r s imi lar re la t ionship i s l egally

supported, these assets are not asset of the bank and therefore, are not included in its balance sheet.

KSSLis whollyowned subsidiaryof the Bankand ithas startedits functions independentlyeffective from January1, 2006.

KSSLprovides multiple services to the Bank including securityand janitorialservices.Followingisbreak upof

stake in KSSL:

The r iskweigh ted asset s to cap it a l ra t i o ,cal cu lat ed in accordance wi th the SBP guidelines on cap it a l adequacywas as

follows:

2006 2005

( Rupees in "000" )Credit risk

Balance sheet items:

Cash and other liquid Assets 150,382 - 395,962 1,562,851

Money at call 8,928,648 1,556,714 9,003,303 4,572,758

Investments 5,637,170 1,910,476 12,820,668 51,083,952

Loans and advances 61,514,057 58,596,508 52,925,286 691,141

Fixed assets 818,866 818,866 690,141 7,907,404

Other assets 8,409,442 7,863,531 8,012,527 -

8 5, 45 8, 56 5 7 0, 74 6,0 95 8 3, 84 7,8 87 6 5,8 18 ,1 06

Off balance sheet items:

Loan repayment guarantees - - - -

Purchase and resale agreements - - - -

Performance bonds etc - - - -

Revolving underwriting commitments - - - -

Stand by letters of credit - - - -

Outstanding foreign exchange contracts - - - -

Purchase - - - -

Sale - - -

- - - -

Credit risk-weighted exposures 85,458,565 70,746,095 83,847,887 65,818,106 3 5

S E G M E N T D E

T A I L S W I T H R E S P E C T T O B U S I N E S S A C T I V I T I E S

T h e s e g m e n t a n a l y

s i s w i t h r e s p e c t t o b u s i n e s s a c t i v i t y i s a s f o l l o w s :

C o r p o r a t e

f i n a n c e

T r a d i n g

a n d s a l e s

R e t a i l

b a n k i n g

C o m m e r c i a l

b a n k i n g

P a y m e n t a n d

s e t t l e m e n t

A g e n c

y

s e r v i c e s

A s s e t s

m a n a g e m e n

t

R e t a i l

b r o k e r a g e

O t h e r s - a g r i

f i n a n c i n g

( R u p e e s i n " 0 0 0 " )

2 0 0 6


-

-

-

-

-

-

-

-

1 1 , 5

2 4 , 7

8 4


-

-

-

-

-

-

-

-

1 0 , 8

7 2 , 3

0 4

N e t i n c o m e

-

-

-

-

-

-

-

-

6 5 2 , 4

8 1


-

-

-

-

-

-

-

-

8 5 , 4

5 8 , 5

6 5


-

-

-

-

-

-

-

-

2 0 , 1

0 4 , 4

9 0


r e q u i r e d

-

-

-

-

-

-

-

-

6 , 7

7 2 , 7

5 1


-

-

-

-

-

-

-

-

7 1 , 8

5 4 , 8

5 0


n e t a s s e t s ( % )

-

-

-

-

-

-

-

-

3 %

S e g m e n t c o s t o f f u

n d s ( % )

-

-

-

-

-

-

-

-

5 %

2 0 0 5


-

-

-

-

-

-

-

-

7 , 6

6 0 , 8

5 3


-

-

-

-

-

-

-

-

7 , 7

5 2 , 2

2 0

N e t l o s s

-

-

-

-

-

-

-

-

( 9 1 , 3

6 7 )


-

-

-

-

-

-

-

-

8 2 , 5

0 4 , 6

5 2


-

-

-

-

-

-

-

-

2 3 , 4

2 4 , 3

7 4


r e q u i r e d

-

-

-

-

-

-

-

-

8 , 8

1 4 , 9

1 6


-

-

-

-

-

-

-

-

6 9 , 4

4 2 , 2

5 5


n e t a s s e t s ( % )

-

-

-

-

-

-

-

-

- 1 %

S e g m e n t c o s t o f f u

n d s ( % )

-

-

-

-

-

-

-

-

1 %

financial




101

2006 2005

(Rupees in "000")

Market Risk

General market risk - -

Specific market Risk - -

Market risk-weighted exposures - -Total risk-weighted expo sures (b) 70,746,095 65,818,106

Capital adequacy ratio [ (a) / (b) x 100) 24.75 25.82

3 9 RIS K MANAG EM ENT

3 9. 1 Cr ed it Ris k

39.1.1 Segmental information

2006

39.1.1a Segments by c lass

of business

Rupees in

"000"Percent

Rupees in

"000"Percent

Rupees in

"000"Percent

Agriculture, forestry,

hunting and fishing 6 8, 36 9, 25 9 9 5. 90 % - - -

Individuals - - 2,866,902 99.00% 13,807 0.17%

Others 2,921,678 4.10% *15,482 1.00% 8,335,722 99.83%71,290,937 100% 2,882,384 100% 8,349,529 100%

39.1.1b Segment by sec tor

2006

Rupees in

"000"Percent

Rupees in

"000"Percent

Rupees in

"000"Percent

Public/ government - 0.00% *15,482 1.00% 8,335,722 99.83%

Private 71,290,937 100.00% 2,866,902 99.00% 13,807 0.17%71,290,937 100.00% 2,882,384 100.00% 8,349,529 100.00%

* This amount represents deposits belonging to autonomous/semi-autonomous bod ies.

The pr imaryobject ive of r isk management is to support senior management in cor rec tlyident ifying,adequa te ly

measur ing, e f fec tive ly l imi t ing and proper ly monitor ing and controll ing r isktakingthroughout the Bank.TheBank

e n su r es s ys te m at ic a n d i nt e gr a te d r is k m a n ag e m en t . Th is i s b a se d o n t h e f o ll ow in g s t ru ct u re d p r oc es s r is k

identification, risk measurement, risk management and control, risk monitoring and risk reporting.

Credit r iskis the r isktha t a r isesf romthe potent ia l tha t an obligor ise i ther unwil lingto per formon an obl iga t ion or

itscapability to execute suchobligationis impaired resulting ineconomic lossto the Bank. Principally, exposuresare

onlyapproved when reasonably assured for r epayment capac ity of counte r pa r ty. S tandardized procedures a re

adopted and under no circumstancesit exceeds approvedcredit lines.The Bankcreditappraisalstructure comprises

ofwel l-de fined credi tappra isa l, approva land review methodsfor the purpose ofprudence ini t s lending operat ions

a n d e n su r in g c re d it a cr o ss t h e b a nk . Th e Ba n k p a y p a rt ic ul ar c on ce n tr at io n t o t h e m a na g em e nt o f N PLs . Anindependent Special Asset Managment (SAM) department is operational at the head office.

Ad vances (g ross) Co nt ing encies and

commitments

Segmental informat ion ispresented inrespect of the c lassof businessand geographica ldist r ibut ion of advances ,

deposits, contingencies and commitments.

Ad vances (g ross) Dep osits Co nt ing encies and

commitments

Deposits


39.1.1c Details of non-performing advances and specific provisions by class of business segment

Classified

advances

Specific

provision held

Classified

advances

Specific

provision held

Ag ricu lt ure, f ore st ry, h un tin g an d fish in g 2 0,10 4,4 90 6 ,77 2,7 51 2 3,4 24 ,3 74 8 ,8 14 ,9 16

39.1.1d Details of non-performing advances and specific provisions by sector

Private 20,104,490 6,772,751 23,424,374 8,814,916

39. 1.1 e GEOGRAPHICALSEGMENTANALYSIS

2006

Profit

before

taxation

Total asset s

employed

Net assets

employed

Contingencies

an d

commitments

Rupees in "000"

Pakistan 652,481 85,458,565 13,603,715 8,349,529

3 9. 2 M ar ke t Ris k

3 9 .3 Fo r e ig n Ex ch a n g e Ri sk

3 9 .4 Eq u i ty p o s it i on Ri sk

The Bankis not exposedto equityposi t ion r iskas a l l thesharesa re he ld byFedera land Provinc ia lGovernments . I t s

securities are not publicly traded.

The Bankis not involved in commercia lac t ivit ies l ike underwr it ing, t r ading and discount ingopera t ions .The Bank

operatesfore ign curr encyt r ansact ions through SBPin loca lcur r encyby payingexchangef luctua t ion r iskfee to the

SBP. Th e Ba nk is n o t e xp o se d t o in t er es t r at e r is k a s it h as a f ixe d le nd in g r at e p or tf olio o f a dv an ce s a ndinvestments/placementsare being placed inheld to maturitysecurities/investments.Correspondingly the borrowing

from SBPis inthe processof restructuring.Liquiditypositionof the Bank iscloselymo nitoredby the AssetLiabilities

Managemen t Committee (ALCO) on periodic basis.

The Bankis not di rec tlyexposedto foreignexchanger iskas theBankisnot engaged infore ign operat ions .Fore ign

transactions, if any, are underta ken throug h SBP.

Rupees in "000"

2006 2005











S.NO. DESCRIPTION FY2001 FY2002 14-12-2002 TO 2004 2005 2006

31-12-2003

DURING THE YEAR

1 TOTAL CREDIT DISBURSED 276 10 2 910 8 3 228 7 3 3715 393 56 52 521

2 LOANS TO SUBSISTENCE FARMERS 1 66 94 1 89 05 2 03 74 2 20 61 2 56 12 3 30 27

3 2 AS %AGE OF 1 60% 65% 63% 65% 65% 63%

4 LOANS TO SMALL FARMERS 227 17 2503 8 2 708 6 28 825 335 51 44 330

( UPTO 25.O ACRES )

5 4 AS %AGE OF 1 82% 86% 84% 85% 85% 84%

6 FINANCING OFTRACTORS

- NUMBERS 18909 12744 10679 7848 10807 9052

- AMOUNT 5119 3501 2800 1 953 2894 2513

7 6 AS %AGE OF 1 19% 12% 9% 6% 7% 5%

8 DIVERSIFICATION INDEX 81% 88% 91% 94% 93% 95%

NON TRACTORLOANS (%)

9 TOTAL RECOVERY 32103 33546 40996 3 8945 42144 49156

10 CUMMULATIVE RECOVERY (%) 89% 90% 90% 91% 92% 96%

11 TOTAL INCOME 10656 11112 10724 9053 7629 11519

12 TOTAL EXPENDITURE 10457 19594 9942 7887 7720 10872

13 PROFIT BEFORE TAXATION 199 (8482) 782 1167 (91) 647

ATTHE END OF THE YEAR

1 TOTAL ASSETS 78143 75306 78740 83930 82504 85451

2 LOAN PORTFOLIO ( NET ) 63970 61503 54172 54335 52925 61514

3 UNRECOVERED BALANCE

TO TOTAL LOANS OUTSTANDING (%) 29% 28% 31% 32% 33% 24%

4 NUMBEROF REGIONAL/ZONALOFFICES 49 49 49 49 49 25

5 NUMBER OF BRANCHES 343 343 343 343 343 342

6 NUMBER OF MCOS 1465 1 496 1363 1328 1311 1258

7 NUMBER OF STAFF 7740 7665 5738 5591 5533 5326

SELECTED FINANCIAL AND STATISTICALINDICATORS

( RUPEES MILLION )

1. FEDERAL GOVERNMENT 11859.612

2. GOVERNMENT OF PUNJAB 2.771

3. GOVERNMENT OF SINDH 1.190

4. GOVERNMENT OF N.W.F.P. 0.680

5. GOVERNMENT OF BALOCHISTAN 0.359

6 . GOVERNMENT OF ERS TWHILE EAS T PAKIS TAN 5 . 00 0

TOTAL 11869.612

( RUPEES MILLION )

AS ON 31-12-2006

PARTICULARS OF SHAREHOLDING





SR. PROVINCE/ AREA NUMBER OF AMOUNT SHARE

NO. LOAN CASES DISBURSED (%)

1 PUNJAB 4728938 313964.716 73.8

2 SINDH 1204871 74797.961 17.6

3 N.W.F.P 469902 24252.702 5.7

4 BALOCHISTAN 99833 8754.877 2.0

5 AZAD KASHMIR 83049 1940.076 0.5

6 FEDERALLY ADMINISTERED 44456 1749.680 0.4NORTHERN AREAS

TOTAL 6631049 425460.012 100.0

( RUPEES MILLION )

3.1

UPTO 31.12.2 006

LOANS DISBURSED SINCE INCEPTION: AREA-WISE

SR. PROVINCE/ AREA NUMBER OF NUMBER OF AMOUNT Sh are

NO. LOAN CASES BORROWERS DISBURSED (%)

1 PUNJAB 345366 369082 42124.034 80.2

2 SINDH 38757 41301 6705.452 1 2.7

3 N.W.F.P 27252 28787 3422.105 6.5

4 BALOCHISTAN 937 953 95.131 0.2

5 AZAD KASHMIR 2450 2496 94.722 0.2

6 FEDERALLY ADMINISTERED 1251 1255 79.061 0.2

NORTHERN AREAS

TOTAL 416013 443874 52520.505 100.0

( RUPEES MILLION )

LOANS DISBURSED : AREA-WISE

DURING 01-01-2006 TO 31-12-2006

TERM-WISE COM POSITION OF LOANS DISBURSED

DURING 01-01-2006 TO 31-12-2006

3.2

3.3

SR. PROVINCE/ AREA

NO. NO. O F AMOUNT NO. OF AMOUNT NO. OF AMOUNT NO. OF AM OUNT

LOAN CASES LOAN CASES LOAN CASES LOAN CASES

1 PUNJAB 314583 38088.296 19937 1331.3 28 10846 2704.410 3 45366 42124 .034

2 SINDH 37293 6555.726 1149 68.409 315 81.317 38757 6705.452

3 N.W.F.P 21058 2957.926 5700 336.986 494 127.193 27252 3422.105

4 BALOCHISTAN 835 76.876 51 3.885 51 14.370 937 95.131

5 AZAD KASHMIR 2283 83.079 152 8.628 15 3.015 2450 94.722

6 FEDERALLY ADMINISTERED 226 24 .065 1013 52.3 53 12 2.643 1251 7 9.061

NORTHERN AREAS

TOTAL 376278 47785.968 28002 1801.589 11733 2932.948 416013 52520.505

( RUPEESMILLION )

SHORT TERM MEDIUM TERM LONG TERM TOTAL





SR. PARTICULARS NUMBER OF AMOUNT SHARE

NO. LOAN CASES DISBURSED (%)

1 SECURED LOANS 410863 52292.232 99.6

2 HYPOTHECATION LOANS 76 10.731 0.0

3 PERSONALSURETYLOANS 4938 158.557 0.3

4 OTHER SECURITY 136 58.985 0.1

TOTAL 416013 52520.505 100.0

( RUPEES MILLION )

LOANS DISBURESED: SECURITY-WISE

DURING 01-01-2006 TO 31-12-2006

YEAR AN NUAL CREDIT

D IS BU RS EM EN T N UM BER AM OU NT N UM BER AM OU NT

Since inception

u pt o 30-06-1971 780.798 15043 295.372 18757 213.849

1971-1972 80.000 1906 37.410 1790 18.412

1972-1973 169.100 1679 43.654 2389 26.415

1973-1974 415.570 1997 74.500 2922 45.000

1974-1975 396.310 3122 131.600 3566 74.500

1975-1976 532.850 6043 348.200 2357 47.6001976-1977 638.770 5888 319.200 1364 25.700

1977-1978 430.530 5768 324.050 580 10.793

1978-1979 416.937 6003 310.200 543 10.100

1979-1980 711.550 8661 468.900 425 9.300

1980-1981 1066.619 10111 636.560 562 13.646

1981-1982 1557.386 12359 880.198 745 20.576

1982-1983 2310.435 17497 1459.256 1246 38.109

1983-1984 3131.676 22766 2028.706 1623 57.938

1984-1985 4167.908 25500 2305.668 2548 67.424

1985-1986 5307.867 20603 1955.257 4260 196.697

1986-1987 6031.152 23648 2621.911 4621 220.835

1987-1988 7716.078 20288 2650.555 6743 392.196

1988-1989 8667.523 19725 2898.750 6632 476.667

1989-1990 9389.861 20290 3465.396 5898 487.010

1990-1991 8323.947 12468 2650.302 5388 564.277

1991-1992 6996.426 8823 1742.676 3281 304.834

1992-1993 8643.408 16574 3548.008 2528 252.005

1993-1994 8989.252 17127 4071.548 2403 294.128

1994-1995 14575.735 22002 5029.803 4920 693.707

1995-1996 10339.274 15968 3261.605 1680 173.336

1996-1997 11687.112 10701 3195.652 2300 385.586

1997-1998 22362.983 13630 4286.009 3869 857.677

1998-1999 30175.960 16951 4509.982 6998 1436.177

1999-2000 24423.889 21515 5743.598 4735 830.894

2000-2001 27610.229 18909 5119.122 8991 1648.100

2001-2002 29108.015 12744 3501.149 7894 1335.733

0 1-0 7-2 00 2 t o 1 3-1 2-2 00 2 1 04 26 .7 34 3 66 0 1 01 1.9 27 2 95 5 3 84 .4 19

1 4-1 2-2 00 2 t o 3 1-1 2-2 00 3 3 22 86 .9 90 1 06 79 2 79 9.9 72 5 10 0 1 01 6.3 63

2004 33714.580 7848 1952.655 4369 845.424

2005 39356.053 10807 2893.575 3895 703.891

2006 52520.505 9052 2512.927 1918 292.898

TOTAL:- 425460.012 478355 81085.853 142795 14472.216

( RUPEES MILLION )

TRACTORS FINANCED TUBEWELLS

3.5

ANNUAL CREDIT DISBURSEMENT, TRACTORS & TUBEWELLS FINANCED

SINCE INCEPTION UPTO 31-12-2006

3.4





NO. OF AMOUNT SHARE

LOAN CASES DISBURSED (%)

I. DEVELOPMENT LOANS 39735 4734.537 9.0

1 TRACTORS 9007 2512.927 4.8

2 DAIRYFARMING 23683 1537.724 2.9

3 FARM EQUIPMENT 486 69.866 0.1

4 TUBEWELLS 1918 292.898 0.6

5 LIVESTOCK 3714 205.547 0.4

6 POULTRYFARMING 64 15.208 0.0

7 ORCHARDS 115 6.897 0.0

8 LAND DEVELOPMENT 91 6.797 0.0

9 FISHERIES 15 2.811 0.0

10 FARM TRANSPORTATION 2 0.245 0.0

11 GODOWN/ COLD STORAGE 166 35.720 0.1

12 OTHERS 474 47.897 0.1

II. PRODUCTION LOANS 376278 47785.968 91.0

1 FERTILIZER 59520 5279.247 10.0

2 PESTICIDES 25323 2614.354 5.0

3 SEEDS 47343 3258.229 6.2

4 LABOUR HIRE/ OTHER CHARGES 47 7.516 0 .0

5 WORKING CAPITAL FOR POULTRY 8 74 203.73 2 0 .4

6 WORKING CAPITAL FOR DAIRY 1471 37.302 0.1

WORKING CAPITAL FOR LIVESTOCK 8 02 27.35 7 0 .1

8 WORKING CAPITAL FOR FISHERIES 92 29.022 0.1

9 SADA BAHAR * 238240 35541.679 67.7

10 OTHERS 2566 787.530 1.5

TOTAL:- 416013 52520.505 100.0

PURPOSES

( RUPEES MILLION ) SIZE OF LO ANS NO. OF SHARE ( %) AMO UNT SHARE ( %)

LOAN CASES DISBURSED

UPTO RS. 25000/- 40324 9.7 804.003 1.5

RS.25001 TO 50000/- 102635 24.7 4266.655 8.1

RS.50001 TO 100000/- 122832 29.5 9730.855 18.5

RS.100001 TO 200000/- 85399 20.5 13170.931 25.1

RS.200001 TO 500000/- 58014 14.0 18506.498 35.3

RS.500001 TO 1000000/- 6809 1.6 6041.563 11.5

TOTAL:- 416013 100.0 52520.505 100.0

SIZE OF HOLDING NO. OF SHARE ( %) AMO UNT SHARE ( %)

LOAN CASES DISBURSED

A. LANDLESS 3470 0.8 178.016 0.3

B. OWNERS

UNDER 5.1 HECTARES 328 207 78.9 32 193.029 61.3

( UNDER12 .5 ACRES )

5.1 TO UNDER 6.5 HECTARES 255 78 6.1 48 62.229 9.3

( 12. 5 TO UNDER 16 ACRES )

6 .5 TO UNDER 10 .1 HECTARES 2 85 78 6 .9 7 09 6. 67 5 1 3. 5

( 16 TO UNDER2 5 ACRES )

10 .1 TO UNDER 13 HECTARES 82 15 2.0 22 76.817 4.3


1 3 TO UNDER 20 .2 HECTARES 1 03 75 2 .5 3 10 4. 36 7 5 .9


20 .2 TO UNDER 26 HECTARES 35 40 0.9 9 95.874 1.9


26 HECTARES & ABOVE 8050 1.9 1813.498 3.5

( 64 ACRES &ABOVE)

TOTAL:- 416013 100.0 52520.505 100.0

( RUPEES MILLION )

( RUPEES MILLION )

AGRICULTURAL CREDIT DISBURSED BY MAJOR PURPOSES

3.6

DURING 01-01-2006 TO 31-12-2006

7

3.8

DURING 01-01-2006 TO 31-12-2006

AGRICULTURALCREDIT DISBURSED BYS IZE OF HOLDING

AGRICULTURAL CREDIT DISBURSED BY SIZE OF LOAN

DURING 01-01 -2006 TO 31-12-2006

* Farm production loans for inputs

3.7





SR. PROVINCE/ AREA TOTAL TOTAL PAST DUES RECOVERY

NO. RECOVERABLE RECOVERY AS ON RATE

3 1-1 2-2 00 6 (%)

1 PUNJAB 51565.274 39271.466 12293.808 76.2

2 SINDH 10538.576 6574.823 3963.753 62.4

3 N.W.F.P 4224.501 3019.237 1205.264 71.5

4 BALOCHISTAN 582.771 106.666 476.105 18.3

5 AZAD KASHMIR 152.300 97.768 54.532 64.2

6 FEDERALLY ADMINISTERED 223.406 86.13 4 137.272 38.6

NORTHERN AREAS

TOTAL 67286.828 49156.094 18130.734 73.1

( RUPEES MILLION )

SR. PROVINCE / AREA TOTAL TOTAL PAST DUES RECOVERY

NO. RECOVERABLE RECOVERY AS ON RATE

3 1-1 2-2 00 6 (%)

1 PUNJAB 335190.557 322896.749 12293.808 96.3

2 SINDH 76817.035 72853.282 3963.753 94.8

3 N.W.F.P 25368.663 24163.399 1205.264 95.2

4 BALOCHISTAN 6956.707 6480.602 476.105 93.2

5 AZAD KASHMIR 1847.805 1793.273 54.532 97.0

6 FEDERALLY ADM INISTERED 1 85 2. 51 8 1 71 5. 24 6 1 37 .2 72 9 2. 6

NORTHERN AREAS

TOTAL 448033.285 429902 .551 18130.734 96.0

( RUPEES MILLION )

TOTAL RECOVERY POSITION

DURING 01-01-200 6 TO 31 -12-2006

4.1

TOTAL CREDIT RECOVERY POSITION OF CURRENT DUES

DURING 01-01-2006 TO 31-12-2006

4.2

CUMM ULATIVE RECOVERY SINCE INCEPTION

UPTO 31.1 2.2006

4.4

TOTAL CREDIT RECOVERY POSITION O F PAST DUES

DURING 01-01-2006 TO 31-12-2006

4.3

Sr.No.

PROVINCE/ CURRENT LESS LESS LESS LESS NET RECOVERY UNRECOVERED RECOVERYAREA

D UES N .P. L CHA RG E RESCHE- AMOUNT CURRENT CURRENTYEAR'S RATE

INTEREST OFF DULEMENT WRITTENOFF/ DUES DUES (%)

REMISSION AS ON 31-1 2-2006

1 P UN JAB 5 17 65 .7 07 1 03 9. 80 7 5 6 80 .3 46 3 81 .2 55 6 4. 98 1 4 4 5 99 .3 18 3 44 49 .8 70 1 01 49 .4 48 7 7. 2

2 SINDH 1 09 80 .6 36 2 73 .5 42 1 82 1. 05 0 2 5. 88 0 2 74 .2 26 8 58 5. 93 8 5 84 1. 72 9 2 74 4. 20 9 6 8. 0

3 N. W. F. P 4 62 8. 30 6 8 8. 29 0 4 88 .5 02 4 0. 77 5 1 97 .2 49 3 81 3. 49 0 2 75 0. 41 6 1 06 3. 07 4 7 2. 1

4 BALOCHISTAN 4 12 7. 35 9 6 65 .6 16 2 8 38 .1 97 0 .0 00 1 51 .6 51 4 71 .8 95 8 7. 13 0 3 84 .7 65 1 8. 5

5 AZAD KASHMIR 3 13 .7 85 3 .6 23 1 7.5 78 3 8. 66 9 1 03 .9 97 1 49 .9 18 9 6. 12 8 5 3. 79 0 6 4. 1

6 FEDERALLYADM INISTERED 2 58 .4 42 1 3 .4 05 8 3. 35 7 0 .0 00 0 .0 00 1 61 .6 80 5 6. 62 7 1 05 .0 53 3 5. 0

NORTHERN AREAS

TOTAL 72074.235 2084.283 10929.030 486.579 792.104 57782.239 43281.900 14500.339 74.9

( RUPEESM ILLION )

Sr.No.

PROVINCE/ PA ST DUE S A DJUSTMENT/ LE SS AMOUN T LESS NET RECOVERY BALANCE RECOVERY

AREA A S O N R E VE R SA L O F N PL C HA R GE W RI TT EN O FF / RESCHE- PAST OF RATE

R E TU RN O N I N TE R ES T O FF R E MI S SI ON DULEMENT DUES PAST (%)

31 -1 2- 20 05 P AS T DU ES 0 1- 01 -2 005 T O DUES

( + , - ) 31-12-2006

1 P UN JA B 1 92 92 .4 10 1 34 3. 19 6 1 62 2. 67 2 9 09 4. 98 0 1 01 .6 54 1 63 .9 52 6 96 5. 95 6 4 82 1. 59 6 2 14 4. 36 0 6 9 .2

2 S I ND H 9 34 2.7 91 0 .7 46 9 44 .8 88 62 58 .3 42 1 84 .1 19 2 .0 58 19 52 .6 38 7 33 .0 94 12 19 .5 44 3 7.5

3 N .W .F .P 1 09 5.9 74 -3 0. 02 0 1 24 .5 93 5 58 .3 17 4 .6 97 2 7. 37 6 4 11 .0 11 26 8.8 21 1 42 .1 90 65 .4

4 B AL OC HIS TA N 1 52 1.1 52 0 .1 76 6 6.6 12 12 49 .9 62 9 3. 52 6 0 .0 00 1 10 .8 76 1 9.5 36 9 1.3 40 1 7.6

5 AZ AD KASHMIR 2.280 -10.071 0.646 2.141 0.000 7.182 2.382 1.640 0.742 68.8

6 F ED ER AL LY A DM IN IS TE RE D 3 59 .3 02 0 .0 03 7 2. 05 9 2 25 .5 14 0 .0 00 0 .0 00 6 1. 72 6 2 9. 50 7 3 2. 21 9 4 7 .8

NORTHERN AREAS

T OT AL 3 16 13 .9 09 1 30 4. 03 0 2 83 1. 47 0 1 73 89 .2 56 3 83 .9 96 2 00 .5 68 9 50 4. 58 9 5 87 4. 19 4 3 63 0. 39 5 6 1 .8

( RUPEES MILLION )





SR. NO. PROVINCE/ AREA RECOVERABLE RECOVERY PASTDUES RECOVERY

AS ON RATE

3 1-1 2-2 00 6 (%)

1 PUNJAB 51494.697

2 SINDH 10524.668

3 N.W.F.P 4223.012

4 BALOCHISTAN 579.879

5 AZAD KASHMIR 152.300

6 FEDERALLY ADM IN ISTERED 2 2 3.4 06

NORTHERN AREAS

TOTAL 67197.962

( RUPEES MILLION )

S R. P RO VI NC E/ PA ST D UE S AD JU ST ME NT / N PL C HA RG E LE SS A MO UN T LE SS N ET RECOVERY BALANCE REC.

NO. AREA A S ON RE VE RS AL O F I NTE RE ST O FF W RI TT EN O FF/ RE SC HE - PA ST O F RATE

RETURN ON REMISSION DULEMENT DUES PA ST ( %)

3 1- 12 -2 00 5 PAST DU ES DU RIN G0 1- 01 -2 00 6 DUES(+ , - )

TO 31-12-2006

1 P UN JA B

2 S IN DH

3 N . W. F. P

4 BALOCHISTAN

5 AZADKASHMIR

6 FEDERALLYADMINISTEREDNORTHERNAREAS

TOTAL

(RUPEESMILLION)

YEAR OFFICERS STAFF TOTAL M.C.O.'s

STAFF POSITION( NUMBERS )

5

AGRICULTURAL CREDIT RECOVERY POSITION

DURING 01-01-2006 TO 31-12-2006

4.5

AGRICULTURAL CREDIT RECOVERY POSITION OF CURRENT DUES

DURING 01-01 -2006 TO 31-12-2006

4.6

AGRICULTURAL CREDIT RECOVERY POSITION OF PAST DUES

DURING 01-01-200 6 TO 31-12-2006

4.7

39200.889

6560.915

3017.748

103.774

97.768

86.134

49067.228

12293.808

3963.753

1205.264

476.105

54.532

137.272

18130.734

76.1

62.3

71.5

17.9

64.2

38.6

73.0

Sr.No.

PROVINCE/ LESS LESS NET RECOVERY UNRECOVERED RECOVERYAREA

RESCHE- AMOUNT CURRENT CURRENTYEAR'S RATE

DULEMENT WRITTENOFF/ DUES DUES (%)

REMISSION AS ON 31-12-2006

1 PUN JA B

2 S IN DH

3 N.W.F.P

4 BALOCHISTAN

5 AZADKASHMIR

6 FEDERALLYADM INISTERED

NORTHERN AREAS

TOTAL

( RUPEESMILLION )

77.2

68.0

72.1

18.0

64.1

35.0

74.9

10149.448

2744.209

1063.074

384.765

53.790

105.053

14500.339

34394.698

5833.925

2750.416

84.239

96.128

56.627

43216.033

44544.146

8578.134

3813.490

469.004

149.918

161.680

57716.372

17.857

19.233

197.249

151.651

103.997

0.000

489.987

381.255

25.880

40.775

0.000

38.669

0.000

486.579

LESS

CHARGE

OFF

4180.894

1502.986

487.995

2780.803

17.578

83.357

9053.613

1039.807

273.542

88.290

665.616

3.623

13.405

2084.283

LESS

N.P.L

INTEREST

50163.959

10399.775

4627.799

4067.074

313.785

258.442

69830.834

CURRENT

DUES

69.1

37.3

65.3

17.6

68.8

47.8

61.7

4806.191

726.990

267.332

19.535

1.640

29.507

5851.195

2144.360

1219.544

142.190

91.340

0.742

32.219

3630.395

6950.551

1946.534

409.522

110.875

2.382

61.726

9481.590

163.754

2.058

27.376

0.000

7.182

0.000

200.370174.251

71.453

4.575

4.697

93.526

0.000

0.000

8556.777

5535.068

548.227

1249.962

2.141

225.514

16117.689

1622.672

944.888

124.593

66.612

0.646

72.059

2831.470

8.616

0.747

-28.904

0.177

-10.071

0.003

-29.432

17373.823

8433.870

1085.511

1521.152

2.280

359.302

28775.938

1487

1434

1454

1521

1432

1376

1441

1441

1449

1463

1459

1465

1496

1363

1328

1311

1258

8649

8744

8658

8667

8404

8611

8826

9177

7903

7791

7782

7740

7665

5738

5591

5543

5326

4035

3963

3816

3621

3369

3576

3383

3830

3368

3183

3196

3177

3150

2027

1934

1934

1841

4614

4781

4842

5046

5035

5035

5443

5347

4535

4608

4586

4563

4515

3711

3657

3609

3485

FY' 199 0

FY' 199 1

FY' 199 2

FY' 199 3

FY' 199 4

FY' 199 5

FY' 199 6

FY' 199 7

FY' 199 8

FY' 199 9

FY' 200 0

FY' 200 1

FY' 200 2

2003

2004

2005

2006



SR.NO. PROVINCES ZONAL BRANCHES

OFFICES

1 PUNJAB

2 SIN DH

3 N.W.F.P

4 BALOCHISTAN

TOTAL

( NUMBERS )


AS ON 31.12.2006

NETWORK OF FIELD OFFICES

160

88

62

32

342

12

6

4

3

25

6



Zarai Taraqiati Bank Ltd M c

C a n n

Ztbl Annual Report

Documents