Standard Chartered He/9 for good
Driving investment, trade and the aeation ofwealth across Asia, Africa and 1ha Middle East Standard Chartered Bank (Pakistan) Ltd. Points of interest
• Standard Chartered is proud to be operating in Pakistan as the largest and oldest international bank since 1863,
• 2013 marks Standard Chartered's 15oth year of presence in the country.
• The Bank's franchise in Pakistan has the second largest distribution network in the Standard Chartered Group.
• The largest international Bank in Pakistan with 116 branches in 22 cities and a workforce of over 4500 employees.
• Standard Chartered Pakistan is the first international bank to get an Islamic Banking license and to open the first Islamic Banking branch in Pakistan. Strong recognition by stakeholders
The Asset Triple A Awards for 2013 Best Bank in Pakistan (for the third consecutive year) Best Debt House in Pakistan Best Structured Trade Finance Provider in Pakistan
The Banker (affiliate of Financial limes) Award for 2013 Islamic Bank of the Year
Global Finance Awards 2013 Best Consumer Internet Bank in 11 markets, Pakistan won for the third year in a row.
CFA Pakistan Excellence Awards 2013 Best Corporate Finance House of the Year 2012- Fixed Income
Finance Asia Country Awards 2012 Best Foreign Commercial Bank in Pakistan (for the second consecutive year)
Global Finance Awards 2012 Best Foreign Exchange Provider in Pakistan (for the third consecutive year)
What we stand for
Our Ambition The world's best international bank
Our Strategy We bank the people and companies driving investment, trade and the creation of wealth across Asia, Africa and the Middle East
Our Bn~nd Promlee Here for good
Relationships Investment Trade Wealth Relevant Scala Build tnJsted relationship Play a leading role in Become the undisputed Be recognised as a Establish sumcienl scale, with the people, companies faciliting Investment and leader in commercial leader in growing balance sheet and and lnSIItutlons shaping deepening f11ancial payments and financing and protecting OIW franchise strength to be our markets' future markets for and in Asia, Africa and clients' wealth relevant and influential the Middle East In our key markets
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Courageous Responsive International Creative Trustworthy We take measured I We deliver relevant, We value diversity We innovate and We are reliable, risks and stand up timely solutions for and colaborale adapt, continuously open and honest tor what is right clients and customers across the network Improving the way we work
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Colleagues Society Investors Regulators A great place to work, A force for good, promoting A distinctive investment. A responsible partner enabling individuals to sustainable economic delivering consistently with exemplary governance grow and teams to win and social development superior performance and ethics via dl~llnd growth Standard Chartered Bank {Pakistan) Umlted- Board of Directors Left to right: Najam I Chaudhri, Ray Duggins, Mohsin A Nathani {Chief Executive), Chrlstos Papadopoulos (Chairman), Spenta Kandawalla, Parvez Ghlas •As of 31st December 2013 Executive Committee members, Standard Chartered Bank (Pakistan) Limited with Sir John Peace, Chairman Standard Chartered PLC. *As of 31st December2013 01 Company Information
Board of Directors Registered Office Mr. Christos Papadopoulos Chairman Standard Chartered Bank (Pakistan) Limited Mr. Khalid Elgibaly Chief Executive Officer P.O. Box No. 5556, I.I. Chundrigar Road Mr. Andrew Bainbridge Karachi-74000, Pakistan Mr. Raheel Ahmed Tel: (021) 32450000 Mr. Najam I. Chaudhri Fax: (021) 32414914 Mr. Parvez Ghias Mrs. Spenta Kandawalla Main Office Company Secretary Standard Chartered Bank (Pakistan) Limited P.O. Box No. 5556, I.I. Chundrigar Road Mr. Asif Iqbal Alam Karachi-74000, Pakistan Tel: (021) 32450000 Audit Committee Fax: (021) 32414914 Mr. Najam I. Chaudhri Chairman Website Mr. Parvez Ghias Member Mr. Andrew Bainbridge Member www.sc.com/pk Human Resource & Remuneration Registrar and Share Transfer Office Committee M/s Central Depository Company of Pakistan Limited Mr. Christos Papadopoulos Chairman (Share Registrar Department) Mr. Khalid Elgibaly Member CDC House, 99-B, Block-B Mr. Parvez Ghias Member SMCHS, Main Shahra-e-Faisal Karachi - 74400 Auditors Toll Free:0800 - CDCPL (23275) Fax: (021) 34326053 M/s KPMG Taseer Hadi & Co Email: [email protected] Chartered Accountants Legal Advisors Haidermota & Co Barristers at Law & Corporate Counselors 02 Standard Chartered Annual Report 2013 Table of Contents
Page Notice of Annual General Meeting 03
Directors Report 05
Managements Statements on Internal Controls and Risk Management Framework 08
Report of Shariah Advisor 12
Auditors Review Report on Statement of Compliance with the Code of Corporate Governance 14
Statement of Compliance with the Code of Corporate Governance 15
Auditors Report to the Members 19
Un-Consolidated Financial Statements 20
Auditors Report to the Members on Consolidated Financial Statements 95
Consolidated Financial Statements 96
Pattern of Shareholding 168
Form of Proxy 03 STANDARD CHARTERED BANK (PAKISTAN) LIMITED NOTICE OF ANNUAL GENERAL MEETING
Notice is hereby given that the Eighth Annual General Meeting of the shareholders of Standard Chartered Bank (Pakistan) Limited ("Bank") will be held on Friday, March 28, 2014 at 4:00 PM at the ICAP House, Institute of Chartered Accountants of Pakistan, Block 8, Clifton, Karachi, to transact the following business:
A. ORDINARY BUSINESS
1. To receive, consider and adopt the Audited Accounts (consolidated and un-consolidated) of the Bank and its subsidiaries for the year ended December 31, 2013 along with the Directors' and Auditors' Reports thereon.
2. To consider the appointment of external auditors namely M/s KPMG Taseer Hadi & Co., Chartered Accountants, for the year 2014 and to authorize the Chief Executive Officer and Chief Financial Officer to fix their remuneration. M/s KPMG Taseer Hadi & Co., Chartered Accountants, being eligible, have offered themselves for re-appointment.
3. To consider and approve final cash dividend @14% (i.e. Rs. 1.40 per share) as recommend by the Board of Directors in addition to interim dividend of 10% already paid for the year 2013.
B. SPECIAL BUSINESS
4. To approve the remuneration paid to the Independent Non Executive Directors of the Bank for the year ended December 31, 2013 in accordance with the Articles of Association of the Bank and in that connection to pass the following resolution, as ordinary resolution, with or without modification, addition or deletion:
"RESOLVED THAT the decision of the Board of Directors of Standard Chartered Bank (Pakistan) Limited to pay a fee of Rs. 3,630,000 during the year ended December 31, 2013 to the independent non-executive members of the Board, in terms of their discretion under the Articles of Association of the Bank, be and is hereby confirmed and approved by the shareholders."
A statement of material facts under section 160 (1) (b) of the Companies Ordinance, 1984 relating to the aforesaid special business to be transacted in the said Annual General Meeting is appended below.
C. OTHER BUSINESS
5. To transact any other business as may be placed before the meeting with the permission of the Chair.
By Order of the Board
Asif Iqbal Alam Company Secretary
Karachi: March 5, 2014 04 Standard Chartered Annual Report 2013 NOTICE OF ANNUAL GENERAL MEETING
Notes:
1. The Share Transfer Books of the Bank will remain closed from March 21, 2014 to March 28, 2014 (both days inclusive). Transfer received at the Share Registrar by the close of business on March 20, 2014 will be treated in time.
2. Only those persons whose names appear in the Register of Members of the Bank as at March 20, 2014 are entitled to attend and participate in and vote at the Annual General Meeting.
3. A member entitled to attend and vote at the above meeting is entitled to appoint another member as his/ her proxy to attend and vote instead of him/ her. Proxies, in order to be valid, must be received by the Bank at its registered office marked for the attention of the office of the Company Secretary, not less than 48 hours before the time for holding the meeting and must be duly stamped, signed and witnessed. A member shall not be entitled to appoint more than one proxy.
4. Members are requested to notify change in their address, if any, to the Bank's Share Registrars, M/s. Central Depository Company of Pakistan Limited (Share Registrar Department), CDC House, 99-B, Block B, SMCHS, Main Shahra-e- Faisal, Karachi - 74400. Toll Free: 0800-CDCPL (23275), Fax: (021) 34326053, Email: [email protected].
5. A. For Attending the Meeting:
i)In case of individuals, the account holder or sub-account holder and/or the person whose securities are in group account and their registration details are uploaded as per the Regulations, shall authenticate his identity by showing his original Computerized National Identity Card (CNIC) or original passport at the time of attending the Meeting.
ii)In case of corporate entity, the Board of Directors' resolution / power of attorney with specimen signature of the nominee shall be produced at the time of the Meeting.
B. For Appointing Proxies:
i)In case of individuals, the account holder or sub-account holder and / or the person whose securities are in group account and their registration details are uploaded as per the Regulations, shall submit the proxy form as per the above requirement.
ii)The proxy form shall be witnessed by twowhose persons names, addresses and CNIC numbers shall be mentioned on the form.
iii)Attested copies of CNIC or the passport of the beneficialowners and the proxy shall be furnished with the proxy form.
iv)The proxy shall produce his original CNIC or original passport at the time of the Meeting.
v)In case of corporate entity, the Board of Directors' resolution / power of attorney with specimen signature shall be submitted along with proxy form to the Bank.
6. Members may inspect the minutes of the Annual General Meeting held on March 28, 2013, in terms of Section 173 of the Companies Ordinance, 1984, at the Banks registered address.
Statement under section 160(1) (b)
The meeting fee payable to the independent non-executive members of the Board was approved by the Board of Directors in terms of Article 60 of the Articles of Association of the Bank. This meeting fee requires approval of the shareholders in Annual General Meeting in terms of paragraph C-2 of Regulation G-1 of prudential regulations for Corporate / Commercial Banking issued by the State Bank of Pakistan. The independent non-executive members of the Board are interested in the payment of fees and remaining members of the Board have no interest in the matter.
Shareholders awareness on CNIC requirement/ e-Dividend/ Bank Mandate:
In compliance with Securities and Exchange Commission of Pakistan's directive S.R.O. 831 (I)/2012 dated July 5, 2012, members are requested to provide a copy of their valid CNIC, if they have not already done so, to the Bank's Share Registrar at their above referred office address.
Furthermore, the Bank encourages its shareholders to provide dividend mandates of their respective Banks. The benefits associated with this are instant credit of dividends, no chances of dividend warrants getting lost in the post, undelivered or delivered to the wrong address etc. For more information, the members may contact our Share Registrars. 05 Directors Report
On behalf of the Board of Directors, I am pleased to present the Directors' Report of Standard Chartered Bank (Pakistan) Limited (SCBPL) along with the audited financial statements and auditors' report thereon for the year ended 31st December 2013. Economy The year 2013 ended on a positive note for the economy, as headline inflation declined from peak levels and the IMF Board approved the release of the USD 550mn second tranche of the 3 year Extended Fund Facility (EFF) program. Investor confidence is rising on improvement in the energy supplies and higher private sector credit growth. KSE 100 index has rallied 50% in 2013, and has crossed 26,000 points for the first time in history. Foreign Portfolio Investment (FPI) increased to nearly USD 403mn in 2013, compared to USD 125mn in 2012. Growth prospects also look stronger led by higher manufacturing sector output, which posted a strong 5.3% y/y growth in H2 2013, led by stronger growth in textile & leather exports. Improved energy supplies have led to higher output in petroleum, fertilizer and food & beverages sector. Private sector credit growth has also picked up, rising PKR 264bn during H2 2013, after declining by PKR 20bn in FY13. Credit growth will accelerate in 2014 as government reins in large fiscal deficit under the IMF stabilization program. There was some respite from high inflation in December 2013 as lower food prices helped to drag CPI Inflation lower to 9.2%, from 10.9% in November. Lower inflationary pressures have given space for SBP to keep rates on hold at 10%, taking a pause after hiking rates 100bps in the last two meetings in 2013. However risks remain due the widening Balance of Payment deficit and declining FX reserves. SBP official FX reserves have declined to USD 3.6bn by end December 2013 - the lowest levels in the last 13 years. Rupee (PKR) weakened 8% in 2013 to 105.5 by end December 2013. Rising oil import bill and declining foreign investment inflows pose challenges to the growth outlook and Balance of Payments. Banks are well capitalized with CAR of 15.5% and remain profitable with ROE of 12.3%. NPLs of the banking sector have declined to 14.3% by September 2013, down from 14.5% end of 2012. Higher private credit growth and declining NPLs are positive for banking sector outlook for 2014. Operating Results and Business Overview December 31, 2013 December 31, 2012 Balance Sheet (PKR millions)(PKR millions) Paid-up capital 38,716 38,716 Total equity 55,729 54,292 Deposits 296,557 266,670 Advances - gross 157,574 159,646 Advances - net 135,495 135,184 Investments - net 146,687 131,977 Profit and Loss Revenue 24,214 26,796 Administrative expenses 8,730 13,856 Other non mark-up expenses 271 235 Operating profit (before provisions and tax) 15,213 12,705 (Reversals) / Provisions (net of recoveries) (931) 3,597 Profit before tax 16,144 9,108 Profit after tax 10,528 5,911
The bank has delivered a strong financial performance with a profit before tax of PKR 16.1 billion compared to PKR 9.1 billion last year, an increase of over 77%. Continued strict focus on recoveries and conservative credit policies led to the reversal of provisioning this year. Moreover administrative expenses (excluding a reversal in executive and general administrative expenses) increased by only 1% which is well below the ongoing inflation in the country, due to strong cost discipline. The interest rates reduction of last couple of years however impacted the revenue of the bank resulting in it being lower by 10% to PKR 24.2 billion. The deposit momentum continued with a growth of almost 11% since the start of this year. The continuous increase in low cost deposits has significantly supported the bank's performance with current and savings account now comprising over 90% of the deposits base. This has resulted in the bank achieving one of the lowest average cost in the industry. Surplus liquidity continues to be deployed in Government Securities and interbank market resulting in a highly liquid and strong balance sheet. The consumer business continued to build SME and retail assets while wholesale business focused on prudent credit expansion. Considering our long history of presence in Pakistan, we believe in sustained growth by continue focusing on our clients and customers and a prudent approach to building the balance sheet. Outlook Despite the challenging external environment we believe opportunities exist and intend to follow a prudent growth strategy at the back of the balance sheet strength, effective capital and risk management practices and unique global capabilities. In line with the strategic priorities, the bank will continue to focus on deepening client relationships, utilising cross selling opportunities and further improve customer service and engagement. Dividend Final cash dividend of 14% (Rs. 1.4 per share) has been recommended by the Board of Directors for approval at the Eighth Annual General Meeting of the Bank's shareholders. This is in addition to 10% (Re. 1/- per share) interim cash dividend announced during the year. External Annual Audit The financial statements of SCBPL have been audited without any qualification by the auditors of the Bank, namely KPMG Taseer Hadi & Co., Chartered Accountants. Credit Rating Pakistan Credit Rating Agency (PACRA) maintained the Bank's long-term and short-term ratings of "AAA" (Triple A) and "A1+" (A One Plus) respectively in 2013. The Bank's outstanding subordinated TFC has also been assigned "AAA" rating. These ratings denote the lowest expectation of credit risk emanating from an exceptionally strong capacity for timely payment of financial commitments. 06 Standard Chartered Annual Report 2013 Directors Report
Sustainability As the largest International Bank in the country, with 116 branches in 29 cities of Pakistan, Standard Chartered is now truly a part of the social fabric of this country. Through our sustainability strategy we seek to strengthen relationships between our business, community, government and customers. In Pakistan, the Bank's community efforts are focused on education and health. Through our education programme, the Bank has extended more than 3,500 scholarships to deserving students and supports institutions of both vocational and higher learning. Through our health programme "Seeing is Believing", we are contributing to the tackling of avoidable blindness, with more than 566,600 cataract operations funded to date. Under our support to the "Pakistan Urban Paediatric Eye Care Programme", we have screened over 1 million children since 2011. In recognition of our contribution for the cause of tackling avoidable blindness, the Government of Pakistan has made Standard Chartered its official and only corporate partner with presence on both National and Sindh eye councils of the country. The Bank extends support to a Hemodialysis facility, and also runs a programme called "Living with HIV" to create awareness about HIV and AIDS. To encourage employees to participate in these initiatives and engage with the communities, Standard Chartered provides three days paid volunteering leave to each member of staff. In 2013, SCBPL employees logged 4,827 volunteering days as opposed to 4,555 days in 2012. Performance of the Group In compliance with section 236(5) of the Companies Ordinance, 1984, attached with this report are the consolidated financial statements of SCBPL and its subsidiaries (the Group) namely - Standard Chartered Leasing Limited, Standard Chartered Services of Pakistan (Private) Limited and Standard Chartered Modarba, for the year ended December 31, 2013.
Operating Results December 31, 2013 December 31, 2012 (PKR millions)(PKR millions) Balance Sheet
Paid-up capital 38,716 38,716 Total equity 56,952 55,424 Deposits 296,377 266,599 Advances - gross 168,427 169,490 Advances - net 146,239 144,918 Investments - net 146,380 131,741
Profit and Loss
Revenue 24,687 27,188 Administrative expenses 8,966 14,046 Non mark-up expenses 278 242 Operating profit (before provisions and tax) 15,443 12,900 (Reversals) / Provisions (net of recoveries) (925) 3,578 Profit before tax 16,368 9,322 Profit after tax 10,699 6,046
Corporate Governance
As required by the Code of Corporate Governance (the Code), a prescribed statement by the Board, along with Auditors' Review Report thereon, forms part of this Annual Report.
The directors are pleased to give the following statement as required by clause (xvi) of the Code:
The financial statements present fairly the Bank's state of affairs, results of its operations, cash flows and changes in equity. Proper books of accounts of the Bank have been maintained. Appropriate accounting policies have been consistently applied in the preparation of financial statements and accounting estimates are based on reasonable and prudent judgment. The International Financial Reporting Standards and International Accounting Standards as applicable in Pakistan have been followed in the preparation of financial statements. The system of internal control is sound in design and has been effectively implemented and monitored. There is no doubt upon the Bank's ability to continue as a going concern. There has been no material departure from the best practices of corporate governance, as detailed in the listing regulations. Summarized key operating and financial data is tabulated in this Annual Report. Details of Board and its Committees meetings held and attended by the directors/ members form part of this report. The Directors, CEO, CFO and Company Secretary have confirmed that neither they nor their spouses are engaged in the business of stock brokerage. Statement of Compliance with Review Report and the Auditors' review report thereon form part of this Annual Report. All statutory liabilities, if any, have been adequately disclosed in the financial statements.
Statements on Internal Controls and Risk Management Framework
The management of SCBPL is responsible for establishing and maintaining a system of adequate internal controls and procedures. Management's statements on Internal Controls and Risk Management Framework form part of this Annual Report.
Directors' Meetings
Five (05) meetings of the Board of Directors, six (06) meetings of Board Audit Committee and two (02) meetings of Board Human Resource (HR) and Remuneration Committee were held during 2013. Attendance by each director/member was as follows: 07 Directors Report
Board of Directors Meetings Board Audit Committee Meetings Board HR & Remuneration Meetings
Sr. No. Name of Director Held during Held during Held during the tenor in Attended1 the tenor in Attended1 the tenor in Attended1 the year the year the year
1 Christos Papadopoulos3 55- -22 2 Mohsin Ali Nathani3 55- -22 3 Najam I. Chaudhri2 5566-- 4 Parvez Ghias2&3 553322 5 Shahid Zaki2 1133-- 6 Spenta Kandawalla 3 3 - - - - 7 Raheel Ahmed 5 4 - - - - 8 Ray Duggins2 3344-- 9 Andrew Bainbridge2 2211--
1 Leave of absence was granted to the Directors/Members who could not attend some of the meetings 2 Member of Board Audit Committee 3 Member of Board HR & Remuneration Committee Statement of investments of Provident, Gratuity and Pension Funds Value of investments including accrued income of provident and gratuity funds as at December 31, 2013 on the basis of un-audited accounts is:
PKR '000 Provident Fund 1,771,099 Management Staff Gratuity Fund 995,508 Non- Management Staff Gratuity Fund 11,736 Management Staff Pension Fund 42,941 Non- Management Staff Pension Fund 27,102 Changes in Board of Directors The following changes have taken place in the Board of Directors since the last directors' report: On account of his new assignment within Standard Chartered Group ("Group"), Mr. Mohsin Ali Nathani decided to step down from the office of CEO and resign from the position of Director on the Board of Standard Chartered Bank (Pakistan) Limited. Effective from February 01, 2014, the Board of Directors has appointed Mr. Khalid Elgibaly as CEO and Director in place of Mr. Mohsin Ali Nathani. Mr. Khalid Elgibaly's pervious assignment within the Group was Regional Head of Consumer Banking for the Middle East. Prior to joining the Group, Mr. Khalid Elgibaly was the CEO for Barclays, Egypt & North Africa. Mr. Khalid Elgibaly is an experienced banker and has held a variety of senior consumer banking roles, spanning marketing, cards and retail asset products, insurance, wealth management products and branch distribution background across several markets including Egypt, UAE, USA and UK. The Board places on record its appreciation for the valuable services rendered by Mr. Mohsin Ali Nathani during his association with the Bank. Under his leadership, Mr. Mohsin Ali Nathani has helped the bank deepen it's relationships with customers / clients and played a key role in the transformation of business. Pattern of Shareholding The pattern of shareholding as required under section 236(2)(d) of the Companies Ordinance, 1984, and Clause (xvi) of the Code of Corporate Governance forms part of this Annual Report. At December 31, 2013, Standard Chartered Bank, UK (holding company) held 98.99% shares of SCBPL. External Auditors The Audit Committee has suggested the name of KPMG Taseer Hadi & Co., Chartered Accountants as external auditors of the Bank for the next term. The Board of Directors, on the suggestion of Audit Committee recommended the name of retiring auditors KPMG Taseer Hadi & Co., Chartered Accountants as external auditors for the next term. The retiring auditors, being eligible, offer themselves for re-appointment in the forthcoming Annual General Meeting. Appreciation and Acknowledgment We take this opportunity to express our gratitude to our customers and business partners for their continued support and trust. We offer sincere appreciation to the State Bank of Pakistan for their guidance and cooperation extended to the Bank. Finally, we are also thankful to our associates, staff and colleagues for their committed services provided to our valued customers.
On behalf of the Board
Khalid Elgibaly Chief Executive
Karachi: March 05, 2014 08 Standard Chartered Annual Report 2013 Management's Statements on Internal Controls and Risk Management Framework
The following statements are made by the management to meet the requirements of the State Bank of Pakistan (SBP) BSD Circular letter no. 2 of 2005 and BSD Circular letter no. 3 of 2005.
Internal Controls
Management of Standard Chartered Bank (Pakistan) Limited (the Bank) is responsible for establishing and maintaining a sound system of internal controls aimed at achieving the following objectives of the Bank:
Efficiency and effectiveness of operations Compliance with applicable laws and regulations Reliability of financial reporting
1. The Management has adopted different strategies to ensure effective monitoring and improvement of internal controls. These include Internal Audit and Assurance and Operational Risk Management & Assurance Framework (ORMAF) in which assurance responsibilities are divided into three lines of defense i.e. first being the business function, second is the Operational Risk Assurance and support from Group Internal Audit is the third line of defense.
2. The policies and procedures in all significant areas and as per the directives of the regulators have been duly approved by the Board.
3. An organization structure has been established which supports clear lines of communication and tiered levels of authority with accountability.
4. The Bank has an effective Internal Audit Department, which reports directly to the Audit Committee of the Board. The department periodically carries out detailed risk-based reviews/audits of its branches and various departments / units based on a yearly plan which is approved by the Audit Committee.
5. Internal control policies, tools and reporting structures have been enhanced to provide greater clarity over roles and responsibilities. Relevant training materials have also been updated and deployment is underway.
6. Management gives due consideration to the recommendations made by the internal and external auditors for improvements in the internal control system and take action to implement such recommendations.
7. The management has put in place evaluation and approval procedures for major capital expenditure and other transactions.
8. There is an annual budgeting and strategic planning process. Financial forecasts are reviewed during the year on a periodic basis to reflect significant changes in business environment. Regular reporting and monitoring of financial performance of the departments and the Bank as a whole, using operating statistics and monthly management accounts which highlight key performance indicators and variance from budgets and forecasts is in place.
9. Review and implementation of health, safety, environment and contingency management processes and other significant policies are carried out and reporting mechanism is in place.
10. SCBPL has largely adopted the internationally accepted Committee of Sponsoring Organizations of the Treadway Commission (COSO) Internal Controls Integrated Framework and available best international practices in relation to Internal Controls over Financial Reporting (ICFR) in compliance with SBP guidelines on Internal Controls. The Bank has devised a well defined and comprehensive Internal Control Program along the lines of stage wise roadmap, as suggested by SBP. Accordingly, the Bank has completed a detailed documentation of the existing processes and controls and related Risk and Control Matrices. It has also completed a comprehensive gap analysis of the control design and developed remediation plans for the gaps identified. Furthermore, the Bank has developed comprehensive management testing plans and reporting framework for ensuring ongoing operating effectiveness of key controls and has significantly addressed the design improvement opportunities identified to complete the project related initiatives. Additionally, the Bank has also engaged consultants to independently perform the Quality Assurance / Validation exercise to provide assurance whether after completion of remedial plans, gaps have been bridged accordingly.
Risk Management Framework
The Bank in an effort to fully implement guidelines issued by SBP on risk management throughout the Bank, has integrated enterprise wide risk management, which brings together various types of risks being faced by the entire organization under one umbrella. Through the risk management framework the Bank seeks to manage efficiently the core risks: credit, market and liquidity risk. These arise directly through the Bank's commercial activities whilst operational risk, reputational risk, pension risk, capital risk and strategic risk are normal consequences of any business undertaking. 09 Management's Statements on Internal Controls and Risk Management Framework
The basic risk management principles followed by the Bank include:
Balancing risk and reward: Risk is taken in line with the requirements of the Bank's stakeholders. Risk should be taken within the Bank's risk appetite, consistent with the approved strategy. Any such risks are avoided which have a material probability of causing financial distress to the Bank or its clients or customers.
Responsibility: Given the Bank is in the business of taking risk, it is everyone's responsibility to ensure that risk taking is both disciplined and focused. The Bank takes account of its social responsibilities and its commitment to customers in taking risk to produce a return.
Accountability: Risk is taken only within agreed authorities and where there is appropriate infrastructure and resource. All risk taking must be transparent, controlled and reported.
Anticipation: The Bank looks to anticipate future risks and to ensure awareness of all risk.
Competitive Advantage: The Bank seeks to achieve competitive advantage through efficient and effective risk management and control.
Risk management: The Bank aims to implement best practices and have a specialist risk function of international standards, with strength in depth, experience across risk types and economic scenarios.
Ultimate responsibility for the effective management of risk rests with the Company's Board of Directors. Acting within an authority delegated by the Board, the Executive Committee reviews specific risk areas and monitors the activities of the Risk Committee ("RC") and the Asset and Liability Committee ("ALCO").
RC headed by Chief Risk Officer (CRO), through authority delegated by the Board through the Bank's Executive Committee, is responsible for credit risk, market risk, operational risk, compliance and regulatory risk, legal risk and reputational risk. ALCO, through authority delegated by the Board through the Bank's Executive Committee, is responsible for management of the Bank's liquidity, capital adequacy and structural foreign exchange risk. The Country Pension Committee through authority delegated by the Board through the Bank's Executive Committee, is responsible for the management of pension risk.
The day to day responsibility for managing risk rests with CRO who oversees and manages the risk through a team of managers; Senior Credit Officer responsible for credit risk in Wholesale Bank, Head of Consumer Credit responsible for credit risk in Consumer Bank (including SME), Head of Special Assets Management responsible for remedial risk management, Head of Credit Risk Controls responsible for collateral management, security documentation, credit MIS and controls, Head of Market Risk responsible for liquidity risk and risks associated with price movements, arising from interest and exchange rate movements and Head of Operational Risk responsible for enterprise wide operations. The Bank has established policies, procedures, processes, and controls and has provided the Risk team adequate support by way of risk systems and tools for measuring and reporting risk for monitoring, controlling, reviewing and managing risk.
Following are the important factors of the risk management function within the Bank.
Credit Risk
Credit risk is the risk that a counter party will not settle its obligations in accordance with agreed terms. Credit exposures may arise from lending, trade finance, securities and derivative exposures. Credit exposures include both individual borrowers and groups of connected counterparties and portfolios in the banking and trading books.
The Board of Directors has delegated down the authority to RC through the Bank's Executive Committee to establish risk appetite and make recommendations to the Board for approval of risk appetite and policies for managing credit risk. The CEO and the Executive Committee in turn rely on CRO and the Risk Committee to determine these and recommend for their support and Board's approval. The RC is also delegated down by the Boards' responsibility to delegate credit authorities to independent Risk Officers.
Credit risk appetite is established through business strategy papers and underwriting standards by the business managers, which are approved by the Board once recommended, and supported by the Executive Committee.
Specific procedures for managing credit risk within Wholesale and Consumer (including SME) are determined at the Senior Credit Officer and Head of Consumer Credit levels for their respective jurisdictions with specific policies and procedures being adapted to different risk environments and business goals. Credit analysis includes review of facility details, credit grade determination and financial spreading / ratio analysis. Portfolio review, Early Alerts and Stress Testing based on scenario analysis is a combined responsibility of Client Relationship, Risk and Finance function. Client relationship origination and credit approval roles are clearly segregated throughout Wholesale and Consumer Banks. 10 Standard Chartered Annual Report 2013 Management's Statements on Internal Controls and Risk Management Framework
Wholesale Banking: Within the Wholesale Banking business, an alpha numerical risk grading system is used for quantifying the risk associated with a counter-party. The grading is based on a probability of default measure, with customers analysed against a range of quantitative and qualitative measures. Expected Loss is used for further assessment of individual exposures and portfolio analysis. There is a clear segregation of duties with loan applications being prepared separately from the approval chain.
Consumer Banking: For Consumer Banking, program based standard credit application forms are generally used, which are processed in central units for different products and market segments. Consumer Banking Analytics team has developed Bureau scores and uses Bureau data for portfolio monitoring and for underwriting new business. Medium enterprises relationship based business of Consumer Bank operates much like Wholesale Banking with numerical risk grading system for quantifying counter party risk. As with Wholesale Banking, origination and approval roles are segregated.
Market Risk
The Bank recognises market risk as the exposures created by potential changes in market prices and rates. Market risk exposures arise primarily from interest rate and foreign exchange related contracts. The Bank has no significant exposure to equity and commodity price risk.
Market risk is managed by the Head of Market Risk reporting directly to the CRO, who agrees policies and procedures and levels of risk appetite in terms of Value at Risk ("VaR"). Limits are then proposed by the business within the terms of agreed policy. These are agreed and delegated down by RC under delegated authority from the Board, and are monitored by the Head of Market Risk as part of an independent risk management function. Policies cover both trading and non-trading books.
In addition to market risk policies, as well as VaR and other market risk limits, independent stress testing of portfolios, factor sensitivity measures and derivatives are also employed as additional risk management tools to manage and hedge market risk exposures. Risk models are periodically back tested against actual results to ensure that pre-determined levels of accuracy are maintained.
Liquidity Risk
The Bank defines liquidity risk as the potential that the Bank either does not have sufficient liquid financial resources available to meet all its obligations as they fall due, or can only access these financial resources at excessive cost.
Liquidity risk, both short and structural, is monitored through liquidity risk management framework and is managed through the Asset and Liability Committee ("ALCO"). This committee, chaired by the CEO, is responsible for liquidity, risk management.
A range of tools are used for the management of liquidity. These comprise commitment and wholesale borrowing guidelines, key balance sheet ratios, medium term funding requirements and day to day monitoring of future cash flows.
In addition, liquidity contingency funding plans are reviewed periodically to ensure that alternative funding strategies are in place and can be implemented on a timely basis to minimise the liquidity risk that may arise due to unforeseen adverse changes in the market place.
A substantial portion of the Bank's assets are funded by customer deposits made up of current and savings accounts and other deposits. These customer deposits, which are widely diversified by type and maturity, represent a stable source of funds.
The Bank also maintains significant levels of marketable securities either for compliance with local statutory requirements or as prudential investments of surplus funds.
Operational Risk
Operational risk is the risk of a direct or indirect loss being incurred due to an event or action arising from the failure of technology, processes, infrastructure, personnel and other risks having an operational risk impact.
The Country Operational Risk Committee ("CORC") has been established to ensure that an appropriate risk management framework is in place at a grass root level, and to report, monitor and manage operational, social, ethical and environmental risk. The CORC is chaired by the CEO, and CRO is an active member of this forum. 11 Management's Statements on Internal Controls and Risk Management Framework
All business units within the Bank monitor their operational risks using set standards and indicators. Significant issues and exceptions are reported to CORC and are also picked up by the independent Risk function for discussion at the Risk Committee chaired by the CRO. Disaster recovery procedures, business contingency planning, self-compliance assurance and internal audits also form an integral part of the operational risk management process.
Reputational Risk
Reputational risk is any material adverse effect on the relations between the Bank and any one of its significant stakeholders. It is Bank policy that the protection of the Bank's reputation should take priority over all activities including revenue generation at all times. Reputational risk is not a primary risk, but will arise from the failure to effectively mitigate one or more of country, credit, liquidity, market, legal, regulatory and operational risk. It may also arise from the failure to comply with Social, Environmental and Ethical standards. All staff are responsible for day to day identification and management of reputational risk.
Pension Risk
Pension risk is the potential for loss due to having to meet an actuarially assessed shortfall in the Bank's defined benefits pension schemes. Pension obligation risk to a bank arises from its contractual or other liabilities to or with respect to an occupational pension scheme. It represents the risk that additional contributions will need to be made to a pension scheme because of a future shortfall in the funding of the scheme.
The Bank assesses and monitors the assets and liabilities within the defined benefit scheme with the support of independent actuarial advisers. Actuarial methodologies are used for determining the present values of the assets and liabilities of the scheme. The assumptions used allow for the projected trends in the salaries, turnover and mortality of the membership. The Bank's Country Pensions Committee has oversight of the pension schemes and reviews the assets and liabilities position on a regular basis.
Capital Risk
Capital risk is the potential for actual or opportunity loss arising from sub optimal allocation of capital or increase in cost of capital.
The Bank manages its demand for capital by regular monitoring of capital requirements and asset exposures. The Bank's Asset and Liability Committee (ALCO) monitors Risk Weighted Assets (RWA) growth and provides guidance for RWA management, capital structure and maintenance of capital ratio.
Strategic Risk
Strategic risk is the potential for opportunity loss from failure to optimise the earnings potential of the Bank's franchise. Strategic risk is not governed or managed through the use of a policy. Rather, the Board maintains the primary responsibility to establish the strategic direction of the Bank. It will develop its strategies, which include a view on the forecast capital position, in line with the Group's overall strategy. The Bank's actual performance to strategy is measured on a continual basis at a more granular level at ALCO and CRC, but also from an overall perspective by the Board or ExCo through budgets and forecasts.
Compliance and Regulatory Risk
Compliance and Regulatory risk includes the risk of non-compliance with regulatory requirements. The Compliance and Regulatory risk function is responsible for establishing and maintaining an appropriate framework of compliance policies and procedures. Compliance with such policies and procedures is the responsibility of all managers.
Legal Risk
Legal Risk is the risk of unexpected loss, including reputational loss arising from defective transaction or contracts, claims being made or some other event resulting in a liability or other loss for the Bank, failure to protect the title to and ability to control the rights to assets of the Bank (including intellectual property rights), changes in the law or jurisdiction risk. The Bank manages legal risk through Legal function, Legal risk policies and procedures and effective use of its internal and external lawyers.
By order of the Board
Khalid Elgibaly Chief Executive Officer 12 Standard Chartered Annual Report 2013 Report of SCBPL Shariah Advisor For the year ended December 31, 2013
The year under review was the tenth year of Islamic commercial banking for Standard Chartered Bank (Pakistan) Limited (SCBPL) through the Saadiq platform. During this year the bank developed a number of new products and arranged a number of structured transactions after due approval from the Shariah Advisor.
Islamic Business Review At the close of the year ended December 31, 2013 the bank had total financing and investments of Rs. 38.77 Billion. The breakup of these assets in different modes of Islamic finance is as follows:
Islamic Financing and Investment 2013
During the year under review, SCBPL has diversified its portfolio into various Islamic financing modes Including Musharkah, Diminishing Musharakah and Murabahah etc. Significant percentage 38.08% of the assets has been financed using the Diminishing Musharakah and Musharakah financing modes.
At year end December 31, 2013, the bank had total Islamic deposits of Rs. 34.58 Billion. 57.96% of Islamic deposits are based on Qard (Current Account) and 42.04% are based on Mudarabah (including Saving and Term Accounts) concepts. 13 Report of SCBPL Shariah Advisor For the year ended December 31, 2013
Shariah Review During the year under review, annual Shariah review of Islamic Banking Business was conducted on a test check basis. During the Shariah review several Islamic Products (including liabilities) and Islamic transactions based on different mode of Islamic financing including Murabahah, Musawamah, Musharakah, Diminishing Musharakah and Ujrah, were checked.
The following major activities have been performed to ensure Shariah Compliance of Islamic Banking Business: Review of Standard Agreements of Financing products Review of Murabahah transaction notices, confirmation of purchases, Form of offers, Payment evidences, Purchase evidences and Physical inspections Review of Process flow adherence in Murabahah transactions Review of Qard and Mudarabah based accounts documents Review of profit and loss distribution and Pool Management framework Review of Mudarabah placements deals Review of Participation ratio of Bank & Customer in Diminishing Musharakah
Islamic branches were also visited and suggestions for Shariah excellence and further improvement were advised. The overall Shariah compliance of the Islamic Business operation and their alignment with the Shariah guidelines was also reviewed.
In addition, as part of continuous improvement necessary recommendations and corrective measures were suggested, all issues identified were duly addressed by management.
Subject to the aforesaid, the affairs of SCBPL were found to have been carried out in accordance with the rules and principles of Shariah including Shariah certificates of the Shariah Advisor and SBP regulations & guidelines related to Shariah compliance.
Late Payment Charity During the year an amount of approximately Rs 4.29 million was received from the customers due to "Delay in Payments" and the same amount has been transferred to the charity account. The collected Charity was disbursed as per the guidance of Shariah Advisor.
Training During the year under review, in SCBPL approximately 68 training sessions related to Islamic Banking and Saadiq products were arranged and approximately 694 employees has been trained throughout Pakistan. It is good to see that the management is paying attention on Islamic Banking training programs and considered it as an essential element to build/bring good resources within the organization.
Development & Progress As part of the improvement of Shariah compliance the Bank has hired experienced resource to strengthen the Shariah compliance function of the bank.
Recommendation 1- The bank should send key Islamic Banking staff for certificate/diploma programmes organized by reputable institutions of the country. 2- There should be more emphasis on Islamic Banking & relevant Saadiq products training to sales/relationship management staff of the bank. 3- Sales/relationship management teams must ensure that customers have been provided necessary information of a particular Islamic product and have understood the requirement of the same at onset of the relationship. 4- In the continuation of Islamic banking awareness programmes, the bank is advised to arrange engagement sessions with its customers.
May Allah Subhanah wa Ta'ala accept our endeavors and grant us Ikhlas to fulfill our responsibility towards Islamic banking which is very mingled between service of deen and service for ourselves.
Muhammad Abdul Mubeen Shariah Advisor Standard Chartered Bank (Pakistan) Ltd. 14 Standard Chartered Annual Report 2013
Review Report to the Members on Statement of Compliance with the Code of Corporate Governance
We have reviewed the enclosed Statement of Compliance with the best practices contained in the Code of Corporate Governance (the Code) prepared by the Board of Directors of Standard Chartered Bank (Pakistan) Limited ("the Bank") for the year ended 31 December 2013 to comply with the requirements of Listing Regulations No. 35 of the Karachi Stock Exchange, Chapter XI of the Lahore Stock Exchange and Chapter XI of the Islamabad Stock Exchange, where the Bank is listed.
The responsibility for compliance with the Code is that of the Board of Directors of the Bank. Our responsibility is to review, to the extent where such compliance can be objectively verified, whether the Statement of Compliance reflects the status of the Bank's compliance with the provisions of the Code and report if it does not and to highlight any non-compliance with the requirements of the Code. A review is limited primarily to inquiries of the Bank's personnel and review of various documents prepared by the Bank to comply with the Code.
As a part of our audit of financial statements we are required to obtain an understanding of the accounting and internal control systems sufficient to plan the audit and develop an effective audit approach. We are not required to consider whether the Board of Directors' statement on internal control covers all risks and controls or to form an opinion on the effectiveness of such internal controls, the Bank's corporate governance procedures and risks.
The Code requires the Bank to place before the Audit Committee, and upon recommendation of the Audit Committee, place before the Board of Directors for their review and approval of its related party transactions distinguishing between transactions carried out on terms equivalent to those that prevail in arm's length transactions and transactions which are not executed at arm's length price and recording proper justification for using such alternate pricing mechanism. We are only required and have ensured compliance of this requirement to the extent of the approval of the related party transactions by the Board of Directors upon recommendation of the Audit Committee. We have not carried out any procedures to determine whether the related party transactions were undertaken at arm's length price or not.
Based on our review, nothing has come to our attention which causes us to believe that the Statement of Compliance does not appropriately reflect the Bank's compliance, in all material respects, with the best practices contained in the Code as applicable to the Bank for the year ended 31 December 2013.
Date: 05 March, 2014 KPMG Taseer Hadi & Co. Karachi Chartered Accountants 15 Statement of Compliance with the Code of Corporate Governance
The Board of Directors of Standard Chartered Bank (Pakistan) Limited ("Bank") supports and re-confirms its commitment to continued support and implementation of the highest standards of Corporate Governance at all times.
This statement is being presented to comply with the Code of Corporate Governance (the Code), contained in the listing regulations of Karachi, Lahore & Islamabad Stock Exchanges, for the purpose of establishing a framework of Good Governance, whereby a listed company is managed in compliance with the best practices of Corporate Governance.
The Bank has applied the principles contained in the Code in the following manner:
1. The Bank encourages representation of non-executive (independent) directors on its Board of Directors. At present the Board consists of the following directors:
Mr. Christos Papadopoulos (Chairman)Non Executive Director Mr. Raheel Ahmed Non Executive Director Mr. Andrew Bainbridge Non Executive Director Mr. Khalid Elgibaly (CEO)Executive Director Mr. Najam I. Chaudhri Independent Non Executive Director Mr. Parvez Ghias Independent Non Executive Director Mrs. Spenta Kandawalla Independent Non Executive Director Independent non-executive directors meet the criteria of independence under clause i (b) of the Code.
2. The Directors have confirmed that none of them is serving as a director in more than seven listed companies, including this Bank.
3. All the resident directors of the Bank are registered taxpayers and none of them has defaulted in payment of any loan to a banking company, a DFI or an NBFI or, being a member of a stock exchange, has been declared as a defaulter by that stock exchange.
4. The Bank has prepared a 'Code of Conduct', which has been approved by the Board and is disseminated to all the directors and employees of the Bank.
5. The Board has developed and approved a vision/ mission statement. The Board has also approved significant policies and adopted certain Standard Chartered Group policies as far as they are in accordance with the local laws and regulations. A complete record of particulars of significant policies has been maintained.
6. All the powers of the Board have been duly exercised and decisions on material transactions, including appointment and determination of remuneration and terms and conditions of employment of the CEO have been taken by the Board.
7. The meetings of the Board were presided over by the Chairman and, in his absence, by a director elected by the Board for this purpose.
8. Casual vacancy created on the Board during the year was filled within stipulated time.
9. The Board met at least once in every quarter. Notices of meetings, agendas and related papers are circulated at least seven days before the meeting except in case where an emergent meeting is to be held. The minutes of the meetings were appropriately recorded and circulated.
10. The Board had approved appointment of CFO, Head of Internal Audit and Company Secretary including their remuneration and terms and conditions of employment. No new appointments have been made during the year.
11. The Board has formed an Audit Committee. The terms of reference of this Committee have been approved by the Board and advised to the Committee for compliance. Committee also ensures independence of the internal audit function and independence and objectivity of the External Auditors.
12. The Audit Committee of the Board comprises of three members. Two members including the Chairman are independent non-executive directors while the other member is a non-executive director.
13. The meetings of the Audit Committee are held at least once every quarter prior to approval of interim and final results of the Bank and as required by the Code. 16 Standard Chartered Annual Report 2013
14. The Board has constituted a Human Resource & Remuneration Committee. It comprises of three members; one each of independent non-executive director, executive director and a non-executive director, who is also the Chairman of the Committee.
15. The Directors' Report for this year has been prepared in compliance with the requirements of the Code and fully describes the salient matters required to be disclosed.
16. The financial statements of the Bank were duly endorsed by CEO and CFO before approval of the Board.
17. The directors, CEO and executives do not hold any interest in the shares of the Bank other than that disclosed in the pattern of shareholding. No trading in shares of the Bank was carried out by the Directors, Executives and their spouses and minor children during the year as confirmed by them.
18. All Directors are provided with an Orientation Pack on their appointment. During the period under review, an internally organized orientation session was attended by two independent non-executive directors. All the independent non- executive directors are 'Certified Directors' from Pakistan Institute of Corporate Governance (PICG) while two non- executive directors have already attended a training program organized by PICG last year.
19. The Bank has complied with all the corporate and financial reporting requirements of the Code.
20. The Board has set up an effective Internal Control (Audit) department. The Internal Control Department reports directly to the Chairman of the Board Audit Committee.
21. The statutory auditors of the Bank have confirmed that they have been given a satisfactory rating under the quality control review program of the Institute of Chartered Accountants of Pakistan, that they or any of the partners of the firm, their spouses and minor children do not hold shares of the Bank and that the firm and all its partners are in compliance with International Federation of Accountants (IFAC) guidelines on code of ethics as adopted by Institute of Chartered Accountants of Pakistan.
22. The statutory auditors or the persons associated with them have not been appointed to provide other services except in accordance with the listing regulations and the auditors have confirmed that they have observed IFAC guidelines in this regard.
23. Material/ price sensitive information, if any, as described in clause (xx) of the Code has been disseminated to the Stock Exchanges and Securities and Exchange Commission of Pakistan in a timely manner.
24. The 'closed period', prior to the announcement of interim/final results, and business decisions, which may materially affect the market price of company's securities, was determined and intimated to directors, employees and stock exchange(s).
25. The Bank has complied with the requirements as stipulated in clause 35 (x) of the Listing Regulations relating to Related Party transactions.
26. All other material principles contained in the Code have been complied with.
By Order of the Board
Khalid Elgibaly Chief Executive Officer 17 SIX YEARS KEY FINANCIAL DATA
Rupees in million 200820092010 2011 2012 2013 Key Financial Data
Standard Chartered Bank (Pakistan) Limited
Revenue 22,985 23,167 23,473 26,755 26,796 24,214 Operating Profit 10,330 10,802 9,993 12,912 12,705 15,213 Profit before Tax 1,014 1,384 5,563 8,431 9,108 16,144 Profit after Tax 608 746 3,606 5,446 5,911 10,528 Net Mark-up Income before provision 16,419 16,284 17,278 20,540 19,480 18,329 Non Mark-up Income 6,566 6,883 6,195 6,215 7,316 5,885 Non Mark-up Expenses 12,655 12,365 13,480 13,843 14,091 9,000 Shareholders Equity 42,769 47,717 51,073 54,589 54,292 55,729 Total Assets 264,629 312,845 321,923 356,405 388,872 399,438 Advances - net 125,601 124,447 139,269 129,620 135,184 135,495 Investments - net 29,587 83,785 72,637 104,375 131,977 146,687 Deposits 174,552 206,958 220,266 235,953 266,670 296,557 Expense / Income Ratio 55% 53% 57% 52% 53% 37% Advances / Deposits Ratio 72% 60% 63% 55% 51% 46% Return on Equity 1.42% 1.65% 7.30% 10.31% 10.86% 19.14% Return on Assets 0.23% 0.26% 1.14% 1.61% 1.59% 2.67 Standard Chartered Bank (Pakistan) Limited Financial Statements For the year ended 31 December 2013 19
AUDITORS' REPORT TO THE MEMBERS
We have audited the annexed unconsolidated statement of financial position of Standard Chartered Bank (Pakistan) Limited ("the Bank") as at 31 December 2013 and the related unconsolidated profit and loss account, unconsolidated statement of comprehensive income, unconsolidated cash flow statement and unconsolidated statement of changes in equity together with the notes forming part thereof (here-in-after referred to as the 'financial statements') for the year ended 31 December 2013, and we state that we have obtained all the information and explanations which, to the best of our knowledge and belief, were necessary for the purposes of our audit.
It is the responsibility of the Bank's Board of Directors to establish and maintain a system of internal control, and prepare and present the financial statements in conformity with the approved accounting standards and the requirements of the Banking Companies Ordinance, 1962 (LVII of 1962), and the Companies Ordinance, 1984 (XLVII of 1984). Our responsibility is to express an opinion on these statements based on our audit.
We conducted our audit in accordance with the International Standards on Auditing as applicable in Pakistan. These standards re quire that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of any material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting policies and significant 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, af ter due verification, which in case of loans and advances covered more than 60% 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);
b) in our opinion:
i) the statement of financial position and the related profit and loss account together with the notes thereon have been drawn up in conformity with the Banking Companies Ordinance, 1962 (LVII of 1962), and the Companies Ordinance, 1984 (XLVII of 1984), and are in agreement with the books of account and are further in accordance with the accounting policies consistently applied; Financial statements and notes ii) the expenditure 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 accordance with the objects of the Bank and the transactions of the Bank which have come to our notice have been within 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 unconsolidated statement of financial position, unconsolidated profit and loss account, unconsolidated statement of comprehensive income, unconsolidated cash flow statement and unconsolidated statement of changes in equity together with the notes forming part thereof conform with approved accounting standards as applicable in Pakistan, and give the information required by the Banking Companies Ordinance, 1962 (LVII of 1962), and the Companies Ordinance, 1984 (XLVII of 1984), in the manner so required and give a true and fair view of the state of the Bank's affairs as at 31 December 2013 and its true balance of profit, its cash flows and its 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), was deducted by the Bank and deposited in the Central Zakat Fund established under section 7 of that Ordinance.
Date: 05 March, 2014 KPMG Taseer Hadi & Co. Karachi Chartered Accountants Muhammad Taufiq 20 Standard Chartered Annual Report 2013 Un-Consolidated Statement of Financial Position As at 31 December 2013
Note 2013 2012 ASSETS ------(Rupees in '000) ------
Cash and balances with treasury banks 4 32,331,083 31,487,869 Balances with other banks 5 1,451,558 2,363,144 Lendings to financial institutions 6 22,158,840 19,845,269 Investments 7 146,686,716 131,976,863 Advances 8 135,495,032 135,184,145 Operating fixed assets 9 6,155,222 6,371,213 Intangible assets 10 26,221,917 26,274,033 Deferred tax assets - net 11 - 1,523,544 Other assets 12 28,937,914 33,845,937 399,438,282 388,872,017
LIABILITIES
Bills payable 13 6,540,213 6,164,867 Borrowings 14 16,566,175 23,399,389 Deposits and other accounts 15 296,556,991 266,670,061 Sub-ordinated loans 16 2,500,000 2,750,000 Deferred tax liabilities - net 11 118,753 - Other liabilities 17 21,427,133 35,595,406 343,709,265 334,579,723 NET ASSETS 55,729,017 54,292,294
REPRESENTED BY:
Share capital 18 38,715,850 38,715,850 Reserves 19 7,044,339 4,938,736 Unappropriated profit 6,526,127 6,676,380 52,286,316 50,330,966 Surplus on revaluation of assets - net of deferred tax 20 3,442,701 3,961,328 55,729,017 54,292,294
CONTINGENCIES AND COMMITMENTS 21
The annexed notes 1 to 42 and Annexure I form an integral part of these un-consolidated financial statements.
Khalid Elgibaly Najam I. Chaudhri Parvez Ghias Raheel Ahmed Chief Executive Director Director Director 21 Un-Consolidated Profit and Loss Account For the year ended 31 December 2013
Note 2013 2012 ------(Rupees in '000) ------
Mark-up / return / interest earned 22 30,376,688 31,133,594 Mark-up / return / interest expensed 23 (12,047,981) (11,653,723) Net mark-up / return / interest income 18,328,707 19,479,871
Reversal / (Provision) against non-performing loans and advances 8.3 & 17.2 1,122,548 (3,101,367) Recovery of amounts written off 332,950 271,775 Provision for diminution in the value of investments 7.3 (284,833) (442,167) Bad debts written off directly 8.4.1 (239,868) (325,188) 930,797 (3,596,947) Net mark-up / return / interest income after provisions 19,259,504 15,882,924
NON MARK-UP / NON INTEREST INCOME Fees, commission and brokerage income 3,027,008 3,493,744 Dividend income 76,817 75,606 Income from dealing in foreign currencies 2,911,976 1,609,512 Gain on sale of securities - net 24 732,486 1,169,658 Unrealized gain on revaluation of investments classified as held for trading 7.11 10,978 15,850 Other income 25 (874,309) 951,576 Total non mark-up / non interest income 5,884,956 7,315,946 25,144,460 23,198,870 NON MARK-UP / NON INTEREST EXPENSES Administrative expenses 26 (8,729,420) (13,856,101) Other reversal / (provisions) / asset write-offs 27 60,434 (50,320) Other charges 28 (331,294) (184,184) Total non mark-up / non interest expenses (9,000,280) (14,090,605) 16,144,180 9,108,265 Extra-ordinary / unusual items - - PROFIT BEFORE TAXATION 16,144,180 9,108,265
Taxation - current (3,749,027) (2,326,067) - prior years' (21,136) (21,136)
- deferred (1,846,004) (850,507) Financial statements and notes 29 (5,616,167) (3,197,710)
PROFIT AFTER TAXATION 10,528,013 5,910,555 ------(Rupees) ------BASIC / DILUTED EARNINGS PER SHARE 30 2.72 1.53
The annexed notes 1 to 42 and Annexure I form an integral part of these un-consolidated financial statements.
Khalid Elgibaly Najam I. Chaudhri Parvez Ghias Raheel Ahmed Chief Executive Director Director Director 22 Standard Chartered Annual Report 2013 Un-Consolidated Statement of Comprehensive Income For the year ended 31 December 2013
2013 2012 ------(Rupees in '000) ------
Profit after tax for the year 10,528,013 5,910,555
Other comprehensive income:
Surplus / (deficit) on revaluation of 'Available for Sale' financial assets (i) - -
Surplus / (deficit) on revaluation of fixed assets (ii) - -
Actuarial gain / (loss) on defined benefit plans (27,097) 15,863
Deferred tax asset / (liability) on actuarial gain / (loss) 9,484 (5,552) (17,613) 10,311
Total comprehensive income for the year 10,510,400 5,920,866
(i) Surplus / (deficit) on revaluation of 'Available for Sale' securities-net of deferred tax is presented under a separate head below equity as 'surplus / deficit on revaluation of assets' in accordance with the requirements specified by the State Bank of Pakistan vide its BSD circular 20 dated 04 August 2000 and BSD circular 10 dated 13 July 2004.
(ii) Surplus / (deficit) on revaluation of fixed assets-net of deferred tax is presented under a separate head below equity as 'surplus / deficit on revaluation of assets' in accordance with the requirements of section 235 of the Companies Ordinance, 1984. The details of movement in balance is disclosed in note 20.1 to these financial statements.
The annexed notes 1 to 42 and Annexure I form an integral part of these un-consolidated financial statements.
Khalid Elgibaly Najam I. Chaudhri Parvez Ghias Raheel Ahmed Chief Executive Director Director Director 23 Un-Consolidated Cash Flow Statement For the year ended 31 December 2013
Note 2013 2012 CASH FLOW FROM OPERATING ACTIVITIES ------(Rupees in '000) ------Profit before tax for the year 16,144,180 9,108,265 Less: Dividend income (76,817) (75,606) 16,067,363 9,032,659 Adjustments for: Depreciation 493,372 485,249 Amortization 52,116 138,538 Gain on disposal of fixed assets - net (163,496) (37,086) Unrealized gain on revaluation of investments classified as held for trading - net (10,978) (15,850) Other (reversal) / provisions / asset write-offs (60,434) 50,320 Provision for diminution in the value of investments 284,833 442,167 Provision / (reversal) against loans and advances - net of recoveries (1,215,630) 3,154,780 (620,217) 4,218,118 15,447,146 13,250,777 (Increase) / decrease in operating assets Lendings to financial institutions (2,313,571) 360,702 Net investments in 'held for trading' securities 2,704,327 2,261,499 Advances 904,743 (8,718,791) Other assets (excluding advance taxation) (5,310,412) (1,044,458) (4,014,913) (7,141,048) Increase / (decrease) in operating liabilities Bills payable 375,346 1,588,078 Borrowings from financial institutions (6,833,214) 4,037,525 Deposits and other accounts 29,886,930 30,717,339 Other liabilities (3,783,783) 485,823 19,645,279 36,828,765 Cash inflow before taxation 31,077,512 42,938,494 Income tax paid (3,850,397) (4,064,040) Net cash generated from operating activities 27,227,115 38,874,454
CASH FLOW FROM INVESTING ACTIVITIES Net investments in 'available for sale' securities (18,243,633) (29,288,552) Dividend income received 76,817 75,606 Net investment in fixed assets (including intangible assets) (509,569) (482,274) Sale proceeds on disposal of operating fixed assets 335,326 37,423 Financial statements and notes Net cash used in investing activities (18,341,059) (29,657,797)
CASH FLOW FROM FINANCING ACTIVITIES (Repayment) / Issuance of sub-ordinated Term Finance Certificates -net (250,000) 2,050,800 Dividend paid (8,704,428) (6,763,705) Net cash used in financing activities (8,954,428) (4,712,905) Increase in cash and cash equivalents for the year (68,372) 4,503,752 Cash and cash equivalents at beginning of the year 33,851,013 29,347,261 Cash and cash equivalents at end of the year 31 33,782,641 33,851,013
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR Cash and balances with treasury banks 32,331,083 31,487,869 Balances with other banks 1,451,558 2,363,144 33,782,641 33,851,013
The annexed notes 1 to 42 and Annexure I form an integral part of these un-consolidated financial statements.
Khalid Elgibaly Najam I. Chaudhri Parvez Ghias Raheel Ahmed Chief Executive Director Director Director 24 Standard Chartered Annual Report 2013 Un-Consolidated Statement of Changes in Equity For the year ended 31 December 2013
Share Share Statutory Unappropriated Total Capital Premium Reserve Profit ------(Rupees in '000) ------Balance as at 31 December 2011 38,715,850 1,036,090 2,720,535 8,797,964 51,270,439
Total Comprehensive income for the year
Profit after tax for the year ended 31 December 2012 - - - 5,910,555 5,910,555
Other Comprehensive income
Actuarial gain on defined benefit plan - net of tax - - - 10,311 10,311 - - - 5,920,866 5,920,866 Transactions with owners, recorded directly in equity
Share based payment transactions (Contribution from holding Company) - - - 2,802 2,802
Payment against share based payment transactions (to holding Company) - - - (95,212) (95,212) - - - (92,410) (92,410)
Transfer to statutory reserve - - 1,182,111 (1,182,111) -
Cash dividend (Final 2011) - Rs. 1 per share - - - (3,871,585) (3,871,585)
Cash dividend (Interim 2012) - Rs. 0.75 per share (2,903,689) (2,903,689)
Transferred from surplus on revaluation of fixed asset - net of deferred tax - - - 7,345 7,345
Balance as at 31 December 2012 38,715,850 1,036,090 3,902,646 6,676,380 50,330,966
Total Comprehensive income for the year
Profit after tax for the year ended 31 December 2013 - - - 10,528,013 10,528,013
Surplus on revaluation of assets - net of tax - 151,895 151,895
Other Comprehensive income
Actuarial gain on defined benefit plan - net of tax (17,613) (17,613) - - - 10,662,295 10,662,295 Transactions with owners, recorded directly in equity
Share based payment transactions (Contribution from holding Company) - - - 59,741 59,741
Payment against share based payment transactions (to holding Company) - - - (60,977) (60,977) - - - (1,236) (1,236)
Transfer to statutory reserve - - 2,105,603 (2,105,603) -
Cash dividend (Final 2012) - Rs. 1.25 per share (4,839,481) (4,839,481)
Cash dividend (Interim 2013) - Rs. 1 per share - - - (3,871,585) (3,871,585)
Transferred from surplus on revaluation of fixed asset - net of deferred tax - - - 5,357 5,357
Balance as at 31 December 2013 38,715,850 1,036,090 6,008,249 6,526,127 52,286,316
Included in unappropriated profits is Rs. 950.545 million which is not available for distribution as cash or stock dividend. This is further explained in note 8.2.1 to these financial statements.
The annexed notes 1 to 42 and Annexure I form an integral part of these un-consolidated financial statements.
Khalid Elgibaly Najam I. Chaudhri Parvez Ghias Raheel Ahmed Chief Executive Director Director Director 25 Notes to the Un-Consolidated Financial Statements For the year ended 31 December 2013
1. STATUS AND NATURE OF BUSINESS
Standard Chartered Bank (Pakistan) Limited ("the Bank") was incorporated in Pakistan on 19 July 2006 and was granted approval for commencement of banking business by State Bank of Pakistan, with effect from 30 December 2006. The ultimate holding company of the Bank is Standard Chartered PLC, incorporated in England. The registered office is at Standard Chartered Bank Building, I.I. Chundrigar Road, Karachi.
The Bank commenced formal operations on 30 December 2006 through amalgamation of entire undertaking of Union Bank Limited and the business carried on by the branches in Pakistan of Standard Chartered Bank, a bank incorporated by Royal Charter and existing under the laws of England. The scheme of amalgamation was sanctioned by State Bank of Pakistan vide its order dated 4 December 2006. The Bank's shares are listed on all stock exchanges in Pakistan.
The Bank is engaged in the banking business as defined in the Banking Companies Ordinance, 1962 and has a total number of 116 branches in Pakistan (2012: 130 branches in Pakistan) in operation at 31 December 2013.
Standard Chartered Bank (Pakistan) Limited has the following three subsidiaries. All of them are incorporated in Pakistan.
- Standard Chartered Leasing Limited - Standard Chartered Modaraba - Standard Chartered Services of Pakistan (Private) Limited
These financial statements are separate financial statements of the Bank in which investments in subsidiaries are accounted for on the basis of direct equity interest rather than on the basis of reported results. Consolidated financial statements are presented separately.
2. BASIS OF PREPARATION
2.1 Basis of presentation
In accordance with the directives of the Federal Government regarding the shifting of the banking system to Islamic modes, the State Bank of Pakistan has issued various circulars from time to time. One permissible form of trade related mode of financing comprises of purchase of goods by the Bank from its customers and immediate resale to them at appropriate mark-up in price on deferred payment basis. The purchases and sales arising under these arrangements are not reflected in these financial statements as such but are restricted to the amount of facility actually utilised and the appropriate portion of mark-up thereon. Financial statements and notes
The financial results of the Islamic banking branches have been consolidated in these financial statements for reporting purposes. Key financial figures of the Islamic banking branches are disclosed in note 41 to these financial statements.
2.2 Statement of compliance
These financial statements have been prepared in accordance with approved accounting standards as applicable in Pakistan. Approved accounting standards comprise of such International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB) and Islamic Financial Accounting Standards (IFAS) issued by the Institute of Chartered Accountants of Pakistan (ICAP) as are notified under the Companies Ordinance, 1984, provisions of and directives issued under the Companies Ordinance, 1984 and Banking Companies Ordinance, 1962 and the directives issued by State Bank of Pakistan. In case the requirements differ, the provisions of and directives issued under the Companies Ordinance, 1984 and Banking Companies Ordinance, 1962 and the directives issued by the State Bank of Pakistan shall prevail.
The Securities and Exchange Commission of Pakistan has approved and notified the adoption of International Accounting Standard 39, 'Financial Instruments: Recognition and Measurement' (IAS 39) and International Accounting Standard 40, 'Investment Property' (IAS 40). The requirements of these standards have not been followed in the preparation of these financial statements as the State Bank of Pakistan has deferred the implementation of these standards for banks in Pakistan till further instructions. However, investments have been classified and valued in accordance with the requirements of various circulars issued by the State Bank of Pakistan. 26 Standard Chartered Annual Report 2013 Notes to the Un-Consolidated Financial Statements For the year ended 31 December 2013
2.3 Basis of measurement
These financial statements have been prepared under the historical cost convention, except that certain available for sale, trading and derivative financial instruments have been measured at fair value, whereas certain fixed assets are stated at revalued amounts less accumulated depreciation and accumulated impairment losses, where applicable.
2.4 Use of estimates and judgments
The preparation of financial statements in conformity with approved accounting standards requires management to make judgments, estimates and assumptions that effect the application of accounting policies and reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
In particular, information about significant areas of estimation uncertainty and critical judgments in applying accounting policies that have the most significant effect on the amounts recognised in the financial statements are described in the following:
- Note 8.3 Provision against non-performing advances - Note 9 & 10 Valuation and depreciation / amortisation rates for fixed / intangible assets - Note 10.2 Goodwill impairment testing - Note 11 Deferred taxation - Note 21.6 Derivative instruments - Note 29 Income taxes - Note 33 Employees' retirement defined benefit plans
2.5 Functional and presentation currency
These financial statements are presented in Pakistan Rupees, which is the Banks functional currency. Except as indicated, financial information presented in Pakistan Rupees has been rounded to the nearest thousand.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been applied consistently to all years presented.
3.1 Business acquisitions
Acquisitions from entities under common control
Business combinations arising from transfers of interests in entities that are under the control of the shareholder that controls the Group are accounted for as if the acquisition had occurred at the beginning of the earliest comparative period presented. For this purpose comparatives are restated, where required. The assets and liabilities acquired are recognised at the carrying amounts recognised previously in the combining entity's financial statements.
Other acquisitions
Other business combinations are accounted for using the acquisition method. For acquisition prior to 1 January 2009, the cost of acquisition is measured as the fair value of the asset given, equity instruments issued and the liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the acquisition. Identified assets acquired are fair valued at the acquisition date, irrespective of the extent of any non-controlling interest. The excess of cost of acquisition over the fair value of identifiable net assets acquired is recorded as goodwill. Subsequently, any recoveries or losses to fair value of net assets are taken to profit and loss account and disclosed in note 25 to these financial statements. 27 Notes to the Un-Consolidated Financial Statements For the year ended 31 December 2013
3.2 Cash and cash equivalents
For the purposes of cash flow statement, cash and cash equivalents comprise of cash and balances with treasury banks and balances with other banks.
3.3 Investments
The Bank classifies its investments as follows:
a) Held for trading
These are securities, which are acquired with the intention to trade by taking advantage of short term market / interest rate movements and are carried at market value. The surplus / deficit arising as a result of revaluation at market value is recognised in the profit and loss account. These securities are to be sold within 90 days from the date of their classification as 'Held for trading' under normal circumstances, in accordance with the requirements specified by BSD Circular 10 dated 13 July 2004 issued by the State Bank of Pakistan.
b) Held to maturity
These are securities with fixed or determinable payments and fixed maturity that are held with the intention and ability to hold to maturity. These are carried at amortised cost.
c) Available for sale
These are investments that do not fall under the held for trading or held to maturity categories and are carried at market value. The surplus / deficit arising as a result of revaluation at market value is kept in a separate account below equity.
d) Subsidiaries
Investments in subsidiaries are carried at cost less impairment in value, if any.
All 'regular way' purchases and sales of investments are recognised on the trade date i.e. the date that the bank commits to purchase or sell the asset. Regular way purchases or sales are purchases or sales of investments that require delivery of assets within the time frame generally established by regulation or convention in the market place. Financial statements and notes 3.4 Sale and repurchase agreements
Securities sold subject to repurchase agreements ('repos') remain on the balance sheet; the counterparty liability is included in borrowings from financial institutions. Securities purchased under agreements to resell ('reverse repos') are recorded as lendings to financial institutions. The difference between sale and repurchase price is treated as interest / mark-up / return and accrued over the life of the underlying agreement using the effective interest method.
3.5 Advances
Advances are stated net of provision against non-performing advances. Specific and general provisions are made based on an appraisal of the loan portfolio that takes into account Prudential Regulations issued by the State Bank of Pakistan from time to time. Specific provisions are made where the repayment of identified loans is in doubt and reflect an estimate of the amount of loss expected. The general provision is for the inherent risk of losses which, although not separately identified, are known from experience to be present in any loan portfolio. Provision made / reversed during the year is charged to the profit and loss account and accumulated provision is netted off against advances. Advances are written- off when there is no realistic prospect of recovery.
When the Bank is the lessor in a lease agreement that transfers substantially all of the risks and rewards incidental to ownership of an asset to the lessee, the arrangement is presented within loans and advances. 28 Standard Chartered Annual Report 2013 Notes to the Un-Consolidated Financial Statements For the year ended 31 December 2013
Murabaha financings are reflected as receivables at the sale price. Actual sale and purchase is not reflected as the goods are purchased by the customer as agent of the Bank and all documents relating to purchase are in customer's name. Funds disbursed under Murabaha financing arrangements for purchase of goods are recorded as "Advance Against Murabaha".
In Diminishing Musharaka based financing, the Bank enters into a Musharaka based on Shirkat-ul-milk for financing an agreed share of fixed asset (e.g. house, land, plant or machinery) with its customers and enters into a periodic rental payment agreement for the utilization of the Bank's Musharaka share by the customer.
3.6 Operating fixed assets - Tangible
Owned
Operating fixed assets, other than land and buildings, are stated at cost less accumulated depreciation and accumulated impairment losses thereon. Cost includes expenditure that is directly attributable to the acquisition of fixed assets. Land and buildings are stated at revalued amounts less accumulated depreciation.
Subsequent costs are included in the asset's carrying amount or are recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Bank and the cost of the item can be measured reliably. All other repairs and maintenance expenditures are charged to profit and loss account during the financial period in which they are incurred.
Land and buildings are revalued by independent professionally qualified valuer(s). Surplus arising on revaluation is credited to the 'surplus on revaluation of fixed assets' account (net of deferred tax). Under the provisions of the Companies Ordinance, 1984, deficit arising on revaluation of fixed assets is adjusted against the balance in the above-mentioned surplus account. The revaluation is carried out with sufficient regularity to ensure that the carrying amount does not differ materially from that which would have been determined using fair value at the balance sheet date.
Accumulated depreciation on owned buildings, at the date of revaluation, is eliminated against the gross carrying amount of buildings. The net amount is then restated to the revalued amount.
Surplus on revaluation of fixed assets (net of deferred tax) is transferred to unappropriated profit to the extent of incremental depreciation charged on related assets.
Land is not depreciated. Depreciation on all other fixed assets is calculated using the straight line method to allocate their depreciable cost or revalued amount to their residual values over their estimated useful lives.
The residual values and useful lives of fixed assets are reviewed, and adjusted (if appropriate) at each balance sheet date.
Gains and losses on disposal of fixed assets are included in profit and loss account currently, except that the related surplus on revaluation of fixed assets (net of deferred tax) is transferred directly to unappropriated profits.
Leased
Fixed assets held under finance lease are stated at the lower of fair value of asset and present value of minimum lease payments at the inception of lease, less accumulated depreciation. Financial charges are allocated over the period of lease term so as to provide a constant periodic rate of financial charge on the outstanding liability. Depreciation is charged on the basis similar to owned assets.
3.7 Intangible assets
Goodwill
Goodwill represents the excess of cost of an acquisition over the fair value of the share of net identifiable assets acquired at the date of acquisition. Goodwill is tested annually for impairment and carried at cost less accumulated impairment. 29 Notes to the Un-Consolidated Financial Statements For the year ended 31 December 2013
Computer software Acquired computer software licenses are capitalised on the basis of costs incurred to acquire and bring to use the specific software. These costs are amortised over their expected useful lives using the straight line method.
Acquired intangibles in business combination Acquired intangibles in business combination that have finite lives are amortised over their economic useful life based on the manner that benefits of the relevant assets are consumed.
3.8 Impairment of non-financial assets
The carrying amounts of the Banks non-financial assets, other than deferred tax assets, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists then the assets recoverable amount is estimated. An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount.
The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated pre-tax future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.
An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount.
3.9 Staff retirement benefits
Defined benefit plan The Bank operates approved funded pension and gratuity schemes for all its non-management employees, and a management pension scheme only for its existing pensioners.
For defined benefit plans, the net defined benefit liability /asset recognised in the balance sheet is the deficit or surplus, adjusted for any effect of limiting a net defined benefit asset to the asset ceiling. The deficit or surplus is:
(a) the present value of the defined benefit obligation; less Financial statements and notes (b) the fair value of plan assets (if any).
The present value of defined benefit obligation is calculated annually by independent actuaries by discounting the estimated future cash flows using an interest rate equal to the yield on high-quality corporate bonds.
Actuarial gains or losses that arise are recognised in other comprehensive income in the period they arise. Service cost and Net interest on net defined benefit liability / (asset) are also recognised in profit and loss account.
Defined contribution plan The Bank also operates a defined contribution gratuity scheme for all its management staff, and a provident fund scheme for all its permanent staff, contributing at 8.33 percent and 10 percent of basic salary respectively.
3.10 Foreign currency transactions
Transactions in foreign currencies are translated to Pakistan Rupees at exchange rates prevailing at the date of transaction. Monetary assets and liabilities denominated in foreign currencies at the reporting date are retranslated to Pakistan Rupees at the exchange rate prevailing at that reporting date. Foreign currency differences arising on retranslation are recognised in profit or loss.
3.11 Taxation
Income tax expense comprises of current and deferred tax. Income tax expense is recognised in the profit and loss account except to the extent that it relates to items recognised directly in equity or in other comprehensive income. 30 Standard Chartered Annual Report 2013 Notes to the Un-Consolidated Financial Statements For the year ended 31 December 2013
Current tax
Current tax is the expected tax payable on the taxable income for the year (using tax rates enacted or substantively enacted at the balance sheet date), and any adjustment to tax payable in respect of previous years.
Deferred tax
Deferred tax is provided for using the balance sheet method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised on temporary differences relating to: (i) the initial recognition of goodwill; (ii) the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit; and (iii) differences relating to investments in subsidiaries to the extent that they probably will not reverse in the foreseeable future.
Deferred tax is measured at tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date.
A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the asset can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.
3.12 Revenue recognition
Mark-up / return on advances and investments is recognised on an accrual basis using the effective interest rate method. The effective interest rate is the rate that exactly discounts the estimated future cash payments and receipts through the expected life of the financial asset or liability (or, where appropriate, a shorter period) to the carrying amount of the financial asset or liability.
Mark-up recoverable on classified loans, advances and investments is recognised on a receipt basis in accordance with the requirements of Prudential Regulations issued by the State Bank of Pakistan. Mark-up on rescheduled / restructured loans, advances and investments is also recognised in accordance with the requirements of these Prudential Regulations.
Where debt securities are purchased at a premium or discount, those premiums / discounts are amortized through profit and loss account over the remaining maturity, using the Effective Yield Method.
Fees and commission income are generally recognised on an accrual basis when the service has been provided. Fees and commission which in substance amount to an additional interest charge, are recognised over the life of the underlying transaction on a level yield basis.
Dividend income is recognised when the right to receive income is established.
The cost from award credits for loyalty points earned on use of various products of the Bank is measured by reference to their fair value and is recognised when award credits are redeemed.
Murabaha transactions are reflected as receivable at sale price. Actual sale and purchase are not reflected as the goods are purchased by the customer as agent of the Bank. Profit on the sales revenue not due for payment is deferred by recording a credit to 'Deferred Murabaha Income' account.
3.13 Derivative financial instruments
Derivative financial instruments are initially recognised at fair value and are subsequently remeasured at fair value. All derivative financial instruments are carried as assets when fair value is positive and liabilities when fair value is negative. Any change in the fair value of derivative financial instruments is taken to profit and loss account.
3.14 Provisions
Provisions for restructuring costs and legal claims are recognised when: (i) the Bank has a present legal or constructive obligation as a result of past events; (ii) it is more likely than not that an outflow of resources will be required to settle the obligation; and (iii) the amount has been reliably estimated. 31 Notes to the Un-Consolidated Financial Statements For the year ended 31 December 2013
3.15 Fiduciary activities
The Bank commonly acts in fiduciary capacities that result in the holding or placing of assets on behalf of individuals, trusts, retirement benefit plans and other institutions. These assets and income arising thereon are excluded from these financial statements, as they are not assets of the Bank.
3.16 Segment reporting
A segment is a distinguishable component of the Bank that is engaged either in providing products or services (business segment), or in providing products or services within a particular economic environment (geographical segment), which is subject to risks and rewards that are different from those of other segments. The Banks primary format for segment reporting is based on business segments. A brief description of the products and services offered by different segments of the Bank is given in note 37 to these financial statements.
3.17 Offsetting
Financial assets and liabilities are set off and the net amount presented in the balance sheet when, and only when, the Bank has a legal right to set off the amounts and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously.
3.18 Subordinated liabilities
Subordinated liabilities are initially measured at fair value plus transaction costs, and subsequently measured at their amortised cost using the effective interest method.
3.19 Non-current assets and disposal groups held for sale
Non-current assets and disposal groups comprising of assets and liabilities that are expected to be recovered primarily through sale rather than continuing use are classified as held for sale. Immediately before being classified as held for sale, the assets and components of disposal group are remeasured in accordance with the Bank's accounting policies. Thereafter, the assets and disposal group are measured at the lower of their carrying values and fair values less cost to sell.
3.20 Share-based compensation Financial statements and notes The Group operates various share-based compensation plans which are accounted for as equity settled share based payment transactions, regardless of inter group repayment arrangements. The cost for such share based payment transactions is determined by reference to the fair value of options at the grant date. The fair value is determined based on the market price or using an appropriate valuation technique. The cost is charged to profit and loss account and credited to equity as a contribution from parent. The liability for these transactions which is based on the fair value of these options at the settlement date is settled through debiting equity.
3.21 Acceptances
Acceptances comprise undertakings by the Bank to pay bills of exchange drawn on customers. The Bank expects most acceptances to be simultaneously settled with the reimbursement from the customers. Acceptances are accounted for as on-balance sheet transactions.
3.22 Basic and diluted earnings per share
The Bank presents basic and diluted earnings per share (EPS) for its shareholders. Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Bank by the weighted average number of ordinary shares outstanding during the period / year. Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding for the effects of all dilutive potential ordinary shares, if any. There were no convertible dilutive potential ordinary shares in issue at 31 December 2013. 32 Standard Chartered Annual Report 2013 Notes to the Un-Consolidated Financial Statements For the year ended 31 December 2013
3.23 Dividend and appropriation to reserves
Dividend and appropriation to reserves, except appropriation which are required by law after the balance sheet date, are recognised as liability in the Bank's financial statements in the year in which these are approved.
3.24 Borrowings / deposits and their cost
- Borrowings / deposits are recorded at the proceeds received.
- Borrowing / deposit costs are recognised as an expense in the period in which these are incurred using effective mark-up / interest rate method.
3.25 Financial assets and liabilities
Financial instruments carried on the balance sheet include cash and balances with treasury banks, balances with other banks, lendings to financial and other institutions, investments, advances, certain receivables, bills payable, borrowings from financial institutions, deposit accounts and other payables. The particular recognition methods adopted for significant financial assets and financial liabilities are disclosed in the individual policy statements associated with them.
3.26 Provision for guarantee claims and other off balance sheet obligations
Provision for guarantee claims and other off balance sheet obligations are recognised when intimated and reasonable certainty exists for the Bank to settle the obligation. Charge to profit and loss account is stated net of expected recoveries.
3.27 New standards and interpretations not yet adopted
The following standards, amendments and interpretations of approved accounting standards will be effective for accounting periods beginning on or after 1 January 2014:
IFRIC 21- Levies an Interpretation on the accounting for levies imposed by governments. IFRIC 21 is an interpretation of IAS 37 Provisions, Contingent Liabilities and Contingent Assets. IAS 37 sets out criteria for the recognition of a liability, one of which is the requirement for the entity to have a present obligation as a result of a past event (known as an obligating event). The Interpretation clarifies that the obligating event that gives rise to a liability to pay a levy is the activity described in the relevant legislation that triggers the payment of the levy.
Offsetting Financial Assets and Financial Liabilities (Amendments to IAS 32). The amendments address inconsistencies in current practice when applying the offsetting criteria in IAS 32. Financial Instruments: Presentation. The amendments clarify the meaning of currently has a legally enforceable right of set-off; and that some gross settlement systems may be considered equivalent to net settlement.
Amendment to IAS 36 Impairment of Assets Recoverable Amount Disclosures for Non-Financial Assets. These narrow-scope amendments to IAS 36 Impairment of Assets address the disclosure of information about the recoverable amount of impaired assets if that amount is based on fair value less costs of disposal.
Amendments to IAS 19 Employee Benefits Employee contributions a practical approach. The practical expedient addresses an issue that arose when amendments were made in 2011 to the previous pension accounting requirements. The amendments introduce a relief that will reduce the complexity and burden of accounting for certain contributions from employees or third parties. The amendments are relevant only to defined benefit plans1 that involve contributions from employees or third parties meeting certain criteria.
Annual Improvements 2010-2012 and 2011-2013 cycles (most amendments will apply prospectively for annual period beginning on or after 1 July 2014). The new cycle of improvements contain amendments to the following standards:
- IFRS 2 Share-based Payment. IFRS 2 has been amended to clarify the definition of vesting condition by separately defining performance condition and service condition. The amendment also clarifies both: how to distinguish between a market condition . The amendment also clarifies both: how to distinguish between a market condition and a non- market performance condition and the basis on which a performance condition can be differentiated from a vesting condition. 33 Notes to the Un-Consolidated Financial Statements For the year ended 31 December 2013
- IFRS 3 Business Combinations. These amendments clarify the classification and measurement of contingent consideration in a business combination. Further IFRS 3 has also been amended to clarify that the standard does not apply to the accounting for the formation of all types of joint arrangements including joint operations in the financial statements of the joint arrangement themselves.
- IFRS 8 Operating Segments has been amended to explicitly require the disclosure of judgments made by management in applying the aggregation criteria. In addition this amendment clarifies that a reconciliation of the total of the reportable segments assets to the entity assets is required only if this information is regularly provided to the entitys chief operating decision maker. This change aligns the disclosure requirements with those for segment liabilities.
- Amendments to IAS 16Property, plant and equipment and IAS 38 Intangible Assets. The amendments clarify the requirements of the revaluation model in IAS 16 and IAS 38, recognizing that the restatement of accumulated depreciation (amortization) is not always proportionate to the change in the gross carrying amount of the asset.
- IAS 24 Related Party Disclosure. The definition of related party is extended to include a management entity that provides key management personnel services to the reporting entity, either directly or through a group entity.
- IAS 40 Investment Property. IAS 40 has been amended to clarify that an entity should: assess whether an acquired property is an investment property under IAS 40 and perform a separate assessment under IFRS 3 to determine whether the acquisition of the investment property constitutes a business combination.
Note 2013 2012 ------(Rupees in '000) ------
4 CASH AND BALANCES WITH TREASURY BANKS
In hand - Local currency 4.1 2,547,603 2,640,598 - Foreign currencies 2,386,435 2,934,902
With State Bank of Pakistan in: - Local currency current account 12,136,164 12,693,648 - Local currency current account-Islamic Banking 1,120,999 1,362,417 - Foreign currency deposit account
Cash reserve account (5% of FE 25) 3,305,342 2,742,536 Financial statements and notes Special cash reserve account (15% of FE 25) 9,200,051 7,666,714 Local US Dollar collection account 89,112 94,268 With National Bank of Pakistan in: - Local currency current account 1,545,377 1,352,786 32,331,083 31,487,869
4.1 This includes National Prize Bonds of Rs. 1.653 million (2012: Rs. 4.699 million).
5 BALANCES WITH OTHER BANKS
In Pakistan - In current accounts 215 286
Outside Pakistan - In current accounts 5.1 1,451,343 2,362,858 1,451,558 2,363,144
5.1 This includes balances of Rs.1,399.406 million (2012: Rs.2,310.442 million) held with other branches and subsidiaries of Standard Chartered Group outside Pakistan. 34 Standard Chartered Annual Report 2013 Notes to the Un-Consolidated Financial Statements For the year ended 31 December 2013
Note 2013 2012 6 LENDINGS TO FINANCIAL INSTITUTIONS ------(Rupees in '000) ------
Call money lendings - 500,000 Placements 6.1 22,158,840 19,345,269 22,158,840 19,845,269
6.1 This represents placements with other branches and subsidiaries of Standard Chartered Group outside Pakistan at mark-up rates ranging from 0.1 percent to 1.2 percent per annum (2012: 0.1 percent to 0.55 percent per annum), and are due to mature by March 2014.
2013 2012 6.2 Particulars of lending ------(Rupees in '000) ------
In local currency - 500,000 In foreign currencies 22,158,840 19,345,269 22,158,840 19,845,269
6.3 Securities held as collateral against lendings to financial institutions
2013 2012 Further Further Held by given as Total Held by given as Total bank collateral bank collateral ------(Rupees in '000) ------Market Treasury Bills ------
Pakistan Investment Bonds ------
------
6.4.1 The market value of securities held as collateral against lendings to financial institutions amounted to Rs. Nil (2012:Rs. Nil million). 35 Notes to the Un-Consolidated Financial Statements For the year ended 31 December 2013
2013 2012 7 INVESTMENT Held by Given as Total Held by Given as Total Note bank collateral bank collateral 7.1 Investments by type ------(Rupees in '000) ------
Held for trading securities Market Treasury Bills 242,549 - 242,549 3,152,257 - 3,152,257 Pakistan Investment Bonds 841,046 - 841,046 653,528 - 653,528 Sukuk Bonds 31,122 - 31,122 13,259 - 13,259 Available for sale securities Market Treasury Bills 7.6 102,670,705 - 102,670,705 93,872,979 5,963,886 99,836,865 Pakistan Investment Bonds 7.6 31,149,469 18,640 31,168,109 17,674,933 18,845 17,693,778 Ordinary shares of listed companies 7.7 662,061 - 662,061 662,061 - 662,061 Term Finance Certificates -unlisted 7.10 285,025 - 285,025 285,025 - 285,025 Ordinary shares of unlisted companies 7.9 3,899 - 3,899 3,899 - 3,899 Sukuk and Ijarah Bonds - unlisted 7.6 & 7.10 10,716,277 - 10,716,277 8,764,965 - 8,764,965 Subsidiaries 7.12 Standard Chartered Services of Pakistan (Private) Limited 44,500 - 44,500 44,500 - 44,500 Standard Chartered Modaraba 42,000 - 42,000 42,000 - 42,000 Standard Chartered Leasing Limited 730,589 - 730,589 730,589 - 730,589 Investments at cost 147,419,242 18,640 147,437,882 125,899,995 5,982,731 131,882,726 Provision for diminution in the value of investments 7.3 (860,157) - (860,157) (575,324) - (575,324) Investments (net of provisions) 146,559,085 18,640 146,577,725 125,324,671 5,982,731 131,307,402 Surplus on revaluation of held for trading securities - net 7.11 10,978 - 10,978 15,850 - 15,850 Surplus / (Deficit) on revaluation of available for sale securities - net 20.2 97,859 154 98,013 653,693 (82) 653,611 Total Investments - net 146,667,922 18,794 146,686,716 125,994,214 5,982,649 131,976,863 Financial statements and notes 36 Standard Chartered Annual Report 2013 Notes to the Un-Consolidated Financial Statements For the year ended 31 December 2013
7.2 Investments by segment Note 2013 2012 ------(Rupees in '000) ------
Federal Government Securities Market Treasury Bills 102,913,254 102,989,122 Pakistan Investment Bonds 32,009,155 18,347,306 GoP Ijarah Sukuk Bonds 9,222,399 7,203,224 Fully paid up ordinary shares Listed companies 662,061 662,061 Unlisted companies 3,899 3,899 Investment in subsidiaries Standard Chartered Services of Pakistan (Private) Limited 44,500 44,500 Standard Chartered Modaraba 42,000 42,000 Standard Chartered Leasing Limited 730,589 730,589 Bonds and Term Finance Certificates - Unlisted Term Finance Certificates 285,025 285,025 Sukuk and Ijarah Bonds 1,525,000 1,575,000 Other Investments (Mutual Funds) - - Total investment at cost 147,437,882 131,882,726
Less: Provision for diminution in the value of investments (860,157) (575,324) Investment (net of provisions) 146,577,725 131,307,402 Surplus on revaluation of held for trading securities - net 10,978 15,850 Surplus on revaluation of available for sale securities - net 20.2 98,013 653,611 Total Investments - net 146,686,716 131,976,863
7.3 Particulars of provision for diminution in the value of investments
Opening balance 575,324 133,157 Charge for the year 285,025 442,167 Reversals (192) - Net charge 284,833 442,167 Closing Balance 7.3.1 860,157 575,324
7.3.1 The details of provision held against investments are as follows:
Ordinary shares / units - available for sale 444,316 444,508 Term Finance Certificates -unlisted 7.10 285,025 - Standard Chartered Leasing Limited - Subsidiary 7.12 130,816 130,816 860,157 575,324
7.4 Investments include securities having book value of Rs. 18.640 million (2012: Rs. 18.845 million) pledged with the State Bank of Pakistan as security to facilitate T.T. discounting facility to the Bank, including an amount earmarked against the facilities allocated to branches now in Bangladesh.
7.5 Market Treasury Bills and Pakistan Investment Bonds are eligible for discounting with the State Bank of Pakistan. 37 Notes to the Un-Consolidated Financial Statements For the year ended 31 December 2013
2013 2012 Market Rating Cost Rating Cost Market Quality of 'Available for Sale' securities Note value value (Rupees in '000) (Rupees in '000) 7.6 Federal Government Securities Market Treasury Bills Unrated 102,670,705 102,551,594 Unrated 99,836,865 100,344,215 Pakistan Investment Bonds Unrated 31,168,109 31,284,265 Unrated 17,693,778 17,918,680 GoP Ijarah Sukuk Bonds 7.10.3 Unrated 9,191,277 9,296,290 Unrated 7,189,965 7,115,437 143,030,091 143,132,149 124,720,608 125,378,332
2013 2012
Rating Cost Market Rating Cost Market value value 7.7 Particulars of shares held - listed 2013 2012 (Rupees in '000) (Rupees in '000) (Number of shares)
- 7,500 Sakrand Sugar Mills Limited Unrated - - Unrated - 36 - 2,800 Bawany Sugar Mills Limited Unrated - - Unrated - 30 - 11,000 Dadabhoy Cement Limited Unrated - - Unrated - 28 - 4,800 Khurshid Spinning Mills Unrated - - Unrated - - - 3,500 Taj Textile Mills Limited Unrated - - Unrated - - - 1 Kohinoor Textile Mills Limited Unrated - - Unrated - - - 2 Sind Provincial Cooperative Bank Unrated - - Unrated - - - 1,646 Allied Bank Limited AA+ / A1+ - - AA+ / A1+ - 121 18,916,023 18,916,023 Agritech Limited D 662,061 662,061 D 662,061 662,061 662,061 662,061 662,061 662,276
Provision for diminution in the value - note 7.3 - (441,311) - (441,400) 662,061 220,750 662,061 220,876 All shares are ordinary shares of Rs. 10 each except otherwise mentioned. 2013 2012 Market Market 7.8 Particulars of units / certificates held in mutual funds Rating Cost value Rating Cost value
2013 2012 (Rupees in '000) (Rupees in '000) Financial statements and notes (Number of shares)
- 13,788 National Investment (Unit)Trust AM 2- - - AM2 - - 458 - - - 458 Provision for diminution in the value - note 7.3.1 - - - (103) - - - 355
7.9 Particulars of shares held - unlisted
2013 2012 2013 2012 2013 2012 (Number of shares) Rating (Rupees in '000)
573,769 573,769 Pakistan Export Finance Guarantee Agency Limited Unrated Unrated 3,004 3,004 Chairman : Mr. S. M. Zaeem 8 8 Society for Worldwide Interbank Unrated Unrated 895 895 Fund Transfer 3,899 3,899 Provision for diminution in the value - note 7.3.1 (3,004) (3,004) 895 895 38 Standard Chartered Annual Report 2013 Notes to the Un-Consolidated Financial Statements For the year ended 31 December 2013
2013 2012 7.10 Bonds and Term Finance Certificates - unlisted (Rupees in '000)
Term Finance Certificates of Rs. 5,000 each
Agritech Limited 147,000 147,000 Azgard Nine Limited 138,025 138,025 285,025 285,025 Provision for diminution in the value - note 7.3.1 (285,025) - - 285,025
2013 2012
Rating Cost Market Rating Cost Market Sukuk and Ijarah Bonds of Rs. 5,000 each Note value value (Rupees in '000) (Rupees in '000)
Wapda Sukuk Bonds 7.10.1 Unrated 200,000 195,955 Unrated 250,000 245,215 Pakistan International Airlines (PIA) Sukuk Bonds 7.10.2 Unrated 1,325,000 1,325,000 Unrated 1,325,000 1,325,000 1,525,000 1,520,955 1,575,000 1,570,215
7.10.1 Wapda Sukuk Bonds carry mark-up rates 0.25% below 6 months KIBOR. The principal and profit is payable semi-annually with maturi ty in July 2017. 7.10.2 PIA Sukuk bonds carry mark-up rates 1.75% above 6 months KIBOR. The principal and profit is payable semi-annually with maturity in October 2014. 7.10.3 GoP Ijarah Sukuk Bonds carry mark-up rates of 0.30% below weighted average yield of 6 months treasury bills. The profit is payable semi-annually with principal redemption at maturity falling due between May 2014 and July 2017. 7.11 Unrealized gain / (loss) on revaluation of investments classified as held for trading Note 2013 2012 (Rupees in '000) Market Treasury Bills 1,185 13,887 Pakistan Investment Bonds 9,422 1,792 GoP Ijarah Sukuk Bonds 371 171 10,978 15,850 7.12 Investment in Subsidiaries 2013 2012 (Number of shares) 4,450,000 4,450,000 Standard Chartered Services of Pakistan (Pvt) 44,500 44,500 Limited - 100% owned
4,538,353 4,538,353 Standard Chartered Modaraba - Listed 20% owned 42,000 42,000 84,579,276 84,579,276 Standard Chartered Leasing Limited - Listed 730,589 730,589 86.45% owned Provision for diminution in the value 7.12.4 & 7.3.1 (130,816) (130,816) 686,273 686,273
7.12.1 The above investments in subsidiaries are strategic investments of the Bank.
7.12.2 Standard Chartered Services of Pakistan (Private) Limited (100% owned by the Bank) exercises control over Standard Chartered Modaraba as its management company and also has a direct economic interest of 10 percent. Therefore, Standard Chartered Modarba is considered a subsidiary of the Bank.
7.12.3 The market value of investments in listed subsidiaries, namely, Standard Chartered Modaraba and Standard Chartered Leasing Limited at 31 December 2013 amounted to Rs 77.515 million and Rs 592.055 million respectively (2012: Rs 52.418 million and 503.247 million respectively).
7.12.4 The Bank periodically reviews its investment in Standard Chartered Leasing Limited (SCLL) for evidence of any impairment. The recoverable amount of investment in SCLL is determined with reference to its value in use. The Bank uses present value techniques and financial projections of SCLL to calculate its value in use. The recoverable amount as at 31 December 2013 is estimated to be above the carrying value of Rs. 599.773 million. Based on these calculations, the Bank considers that no additional impairment loss has arisen during the year. Hence, the Bank continues to hold an accumulated impairment loss of Rs.130.816 million. 39 Notes to the Un-Consolidated Financial Statements For the year ended 31 December 2013
8 ADVANCES Note 2013 2012 ------(Rupees in '000) ------Loans, cash credits, running finances, etc. - In Pakistan 134,809,794 143,632,574 - Outside Pakistan - - 134,809,794 143,632,574 Net investment in Finance Lease - In Pakistan - - - Outside Pakistan - - - - Bills discounted and purchased (excluding treasury bills) - Payable in Pakistan 15,873,794 8,659,942 - Payable outside Pakistan 6,890,046 7,353,551 22,763,840 16,013,493 Advances - gross 157,573,634 159,646,067 Provision for non-performing advances 8.3 (22,078,602) (24,461,922) Advances - net of provision 135,495,032 135,184,145
8.1 Particulars of advances - gross
8.1.1 In local currency 145,263,061 147,709,882 In foreign currencies 12,310,573 11,936,185 157,573,634 159,646,067 8.1.2 Short term (for upto one year) 115,783,098 105,078,832 Long term (for over one year) 41,790,536 54,567,235 157,573,634 159,646,067
8.2 Advances include Rs. 24,655.364 million (31 December 2012: Rs. 27,124.953 million) which have been placed under non-performing status as detailed below:
2013
Classified Advances Provision Required Provision Held Financial statements and notes DomesticOverseas Total DomesticOverseas Total Domestic Overseas Total Category of classification ------(Rupees in '000) ------
Substandard 635,748 - 635,748 153,847 - 153,847 153,847 - 153,847 Doubtful 2,352,816 - 2,352,816 1,147,027 - 1,147,027 1,147,027 - 1,147,027 Loss 21,666,800 - 21,666,800 20,217,266 - 20,217,266 20,217,266 - 20,217,266 24,655,364 - 24,655,364 21,518,140 - 21,518,140 21,518,140 - 21,518,140
General provision - - - 560,462 - 560,462 560,462 - 560,462 24,655,364 - 24,655,364 22,078,602 - 22,078,602 22,078,602 - 22,078,602
2012 Classified Advances Provision Required Provision Held DomesticOverseas Total DomesticOverseas Total Domestic Overseas Total Category of classification ------(Rupees in '000) ------
Substandard 841,325 - 841,325 153,382 - 153,382 153,382 - 153,382 Doubtful 2,569,007 - 2,569,007 1,265,022 - 1,265,022 1,265,022 - 1,265,022 Loss 23,714,621 - 23,714,621 22,472,866 - 22,472,866 22,472,866 - 22,472,866 27,124,953 - 27,124,953 23,891,270 - 23,891,270 23,891,270 - 23,891,270
General provision - - - 570,652 - 570,652 570,652 - 570,652 27,124,953 - 27,124,953 24,461,922 - 24,461,922 24,461,922 - 24,461,922 40 Standard Chartered Annual Report 2013 Notes to the Un-Consolidated Financial Statements For the year ended 31 December 2013
8.2.1 At 31 December 2013, the provision requirement has been reduced by Rs. 1,462.377 million (31 December 2012: Rs. 1,294.899 million) being benefit of Forced Sale Value (FSV) of commercial, residential and industrial properties (land and building only) held as collateral, in accordance with the State Bank of Pakistan Prudential Regulations (PR) and SBP Circular 10 dated 21 October 2011. Increase in accumulated profits amounting to Rs. 950.545 million due to the said FSV benefit is not available for distribution of cash and stock dividend.
8.3 Particulars of provision against non-performing advances 2013 2012 Specific General Total Specific General Total ------(Rupees in '000) ------
Opening balance 23,891,270 570,652 24,461,922 21,376,320 613,097 21,989,417 Charge for the year 994,308 68,783 1,063,091 4,781,031 36,313 4,817,344 Reversals (2,290,543) (78,973) (2,369,516) (1,649,519) (78,758) (1,728,277) (1,296,235) (10,190) (1,306,425) 3,131,512 (42,445) 3,089,067
Amounts written off (862,652) - (862,652) (696,081) - (696,081) Other movements (214,243) - (214,243) 79,519 - 79,519 Closing balance 21,518,140 560,462 22,078,602 23,891,270 570,652 24,461,922
8.4 Particulars of write offs 2013 2012 ------(Rupees in '000) ------8.4.1 Against provisions 862,652 696,081 Charged and written off during the year 239,868 325,188 1,102,520 1,021,269
8.4.2 Write-offs of Rs. 500,000 and above 604,059 389,279 Write-offs of below Rs. 500,000 498,461 631,990 1,102,520 1,021,269 8.5 Details of loans written-off of Rs. 500,000 and above
In terms of sub-section (3) of section 33A of the Banking Companies Ordinance, 1962, the statement in respect of written-off loans or any other financial relief of five hundred thousand rupees or above allowed to a person(s) during the year ended 31 December 2013 is given in Annexure 1.
8.6 Particulars of loans and advances to directors, associated companies, etc. Note 2013 2012 ------(Rupees in '000) ------(i) Debts due by directors, executives or officers of the bank or any of them either severally or jointly with any other persons Balance at beginning of the year 1,652,935 2,226,798 Loans granted during the year - - Repayments (457,492) (573,863) Balance at end of the year 1,195,443 1,652,935 (ii) Debts due by companies or firms in which the directors of the bank are interested as directors, partners or in the case of private companies as members Balance at beginning of the year - - Loans granted during the year - - Repayments - - Balance at end of the year - - (iii) Debts due by subsidiary companies, controlled firms, managed modarabas and other related parties Balance at beginning of the year 736,085 191,300 Loans granted during the year 8,185,390 13,615,430 Repayments (8,478,567) (13,070,645) Balance at end of the year 442,908 736,085 9 OPERATING FIXED ASSETS
Capital work-in-progress 9.1 56,213 121,779 Property and equipment 9.2 6,099,009 6,249,434 6,155,222 6,371,213 9.1 Capital work-in-progress
Civil works 38,535 5,636 Advance payment towards office equipments 17,678 113,624 Consultants' fee and other charges - 2,519 56,213 121,779 41 Notes to the Un-Consolidated Financial Statements For the year ended 31 December 2013
9.2 Property and equipment 2013
Buildings on Buildings on Furniture, Freehold Leasehold Leased Fixtures and Freehold Leasehold hold Vehicles Total Land Land land land improvements Office Equipment Cost / Valuations ------(Rupees in '000) ------
At 1 January 2013 571,030 3,753,113 261,731 855,624 1,256,790 2,703,031 98,617 9,499,936 Additions during the year - - 19,800 76,792 82,881 392,840 2,822 575,135 Transfers / write offs - - (1,123) (1,528) (132,476) (224,241) - (359,368) Deletions - (146,685) - (33,631) (185) (138,790) (3,584) (322,875) At 31 December 2013 571,030 3,606,428 280,408 897,257 1207,010 2,732,840 97,855 9,392,828
Accumulated Depreciation
At 1 January 2013 - - 66,759 230,932 693,840 2,215,782 43,189 3,250,502 Charge for the year - - 22,642 80,218 74,961 292,283 23,268 493,372 Transfers / write offs - - (664) (876) (75,391) (222,079) - (299,010) Deletions - - - (10,562) (157) (136,742) (3,584) (151,045) At 31 December 2013 - - 88,737 299,712 693,253 2,149,244 62,873 3,293,819
Net book value 571,030 3,606,428 191,671 597,545 513,757 583,596 34,982 6,099,009
Rate of depreciation - - 6.67% 6.67% 6.67%-10% 14.28% - 33.33% 33.33%
2012
Buildings on Buildings on Furniture, Freehold Leasehold Leased Fixtures and Freehold Leasehold hold Vehicles Total Land Land land land improvements Office Equipment Cost / Valuations ------(Rupees in '000) ------
At 1 January 2012 571,030 3,753,113 261,663 832,728 1,280,649 3,430,902 65,877 10,195,962 Additions during the year - - 68 22,896 80,926 273,678 65,365 442,933 Transfers / write offs - - - - (104,723) (934,046) - (1,038,769) Deletions - - - - (62) (67,503) (32,625) (100,190) At 31 December 2012 571,030 3,753,113 261,731 855,624 1,256,790 2,703,031 98,617 9,499,936
Accumulated Depreciation
At 1 January 2012 - - 44,394 152,707 641,392 2,943,763 60,987 3,843,243 Charge for the year - - 22,365 78,225 96,406 273,439 14,814 485,249 Transfers / write offs - - - - (43,906) (934,230) - (978,136) Deletions - - - - (52) (67,190) (32,612) (99,854) Financial statements and notes At 31 December 2012 - - 66,759 230,932 693,840 2,215,782 43,189 3,250,502
Net book value 571,030 3,753,113 194,972 624,692 562,950 487,249 55,428 6,249,434
Rate of depreciation - - 6.67% 6.67% 6.67%-10% 14.28% - 33.33% 33.33%
9.3 The Bank's owned land and buildings were revalued by an independent accredited professional valuer, Iqbal A. Nanjee & Co. (Private) Limited. The valuation performed by the valuer was based on active market prices, adjusted for any difference in the nature, location or condition of the specific land and building. The date of revaluation was 31 December 2009. The revaluation resulted in a net surplus of Rs. 3,599.739 million over the book value. A similar valuation was carried out last year and no material differences in market value (from the carrying value) were found.
If the owned land and buildings were measured using the cost model, the carrying amounts would have been as follows:
2013 2012 ------(Rupees in '000) ------
Cost 2,359,114 2,291,371 Accumulated depreciation (790,278) (712,963) Carrying amount 1,568,836 1,578,408
The movement in surplus on revaluation of fixed assets is given in note 20.1 to the financial statements. 42 Standard Chartered Annual Report 2013 Notes to the Un-Consolidated Financial Statements For the year ended 31 December 2013
9.4 As at 31 December 2013, the cost of fully depreciated fixed assets still in use amounted to Rs. 2,183.705 million (2012: Rs. 2,241.287 million).
9.5 Depreciation rates for furniture, fixtures and office equipment are as follows:
Furniture and fixtures 33.33 percent Printers 33.33 percent Other office equipment 20.00 percent Computer equipment 33.33 percent ATM machines 14.28 percent
9.6 Details of disposal of fixed assets whose original cost or book value exceeds Rs. 1 million or Rs 250,000, which ever is less, and assets disposed of to the Chief Executive or to a director or to executives or to a shareholder holding not less than 10% of the voting shares of the bank or to any related party, irrespective of value, are given below:
Cost Accumulated Book Sale Gain / (Loss) Mode of Particulars depreciation value Proceeds on Sale Disposal of Purchaser
------(Rupees in '000) ------
Freehold Land 146,685 - 146,685 308,379 161,694 Tender World Food Program Building on freehold / Leasehold land 24,991 7,322 17,669 6,373 (11,296) Tender World Food Program 8,640 3,240 5,400 5,000 (400) Tender Mr. Muhammad Riaz Furniture, fixtures and 39,034 37,083 1,951 2,119 168 Tender M/S NCR Corporation office equipment 18,766 18,766 - 784 784 Tender M/S NCR Corporation ------do ------9,059 9,059 - 588 588 Tender M/S National Traders ------do ------6,940 6,940 - 1,651 1,651 Tender M/S Tech-Solution Engineering & Services ------do ------5,239 5,239 - 692 692 Tender M/S National Traders ------do ------4,810 4,784 26 565 539 Tender M/S National Traders ------do ------3,888 3,888 - 404 404 Tender M/S National Traders ------do ------3,709 3,709 - 394 394 Tender M/S Pakistan International ------do ------3,686 3,674 12 506 494 Tender M/S National Traders ------do ------3,018 3,018 - 429 429 Tender M/S National Traders ------do ------2,802 2,802 - 374 374 Tender M/S Pakistan International SJ General Trading ------do ------2,753 2,753 - 152 152 Tender M/S National Traders ------do ------2,581 2,581 - 264 264 Tender M/S Pakistan International ------do ------2,455 2,455 - 366 366 Tender M/S Khan Auctioneers ------do ------2,413 2,403 10 125 115 Tender M/S Pakistan International SJ General Trading ------do ------2,355 2,355 - 184 184 Tender M/S Muhammad Shahid Soomro ------do ------2,205 2,205 - 220 220 Tender M/S Pakistan International SJ General Trading ------do ------2,125 2,125 - 218 218 Tender M/S National Traders ------do ------2,102 2,102 - 236 236 Tender M/S National Traders ------do ------2,015 2,015 - 206 206 Tender M/S Muhammad Shahid Soomro ------do ------1,616 1,616 - 206 206 Tender M/S National Traders ------do ------1,512 1,492 20 217 197 Tender M/S National Traders ------do ------1,388 1,388 - 310 310 Tender M/S Farhan & Company ------do ------1,382 1,382 - 365 365 Tender M/S Farhan & Company ------do ------1,154 1,154 - 221 221 Tender M/S Pakistan International SJ General Trading ------do ------1,108 1,108 - 192 192 Tender M/S Paramount Traders ------do ------1,008 1,008 - 131 131 Tender M/S National Traders Vehicle (Toyota Altis AKX-512) 1,309 1,309 - 652 652 Tender Mr. Chaudhry Adeel Masood Vehicle (Toyota Corolla LZY-1811) 1,227 1,227 - 900 900 Insurance claim M/S Adamjee Insurance
313,975 142,202 171,773 333,423 161,650
Items having book value of less than Rs. 250,000 and cost of less than Rs. 1,000,000:
Short leasehold property - cost 185 157 28 63 35 Furniture, fixtures and office equipment 7,667 7,638 29 1,120 1,091 Vehicles 1,048 1,048 - 720 720 Total 322,875 151,045 171,830 335,326 163,496 43 Notes to the Un-Consolidated Financial Statements For the year ended 31 December 2013
10 INTANGIBLE ASSETS 2013
Goodwill Core Customer Brand deposits Computer relationships names intangible intangible Software Total
------(Rupees in '000) ------Cost
At 1 January 2013 26,095,310 1,982,413 774,680 389,400 338,350 29,580,153 Additions during the year ------At 31 December 2013 26,095,310 1,982,413 774,680 389,400 338,350 29,580,153
Amortised At 1 January 2013 - 1,982,413 738,559 246,798 338,350 3,306,120 Charge for the year - - 13,183 38,933 - 52,116 At 31 December 2013 - 1,982,413 751,742 285,731 338,350 3,358,236 Net book value 26,095,310 - 22,938 103,669 - 26,221,917
Rate of amortisation 20%
2012 Goodwill Core Customer Brand Computer deposits relationships names intangible intangible Software Total
Cost ------(Rupees in '000) ------
At 1 January 2012 26,095,310 1,982,413 774,680 389,400 338,350 29,580,153 Additions during the year ------At 31 December 2012 26,095,310 1,982,413 774,680 389,400 338,350 29,580,153
Amortised At 1 January 2012 - 1,924,272 720,780 207,865 314,665 3,167,582 Charge for the year - 58,141 17,779 38,933 23,685 138,538 At 31 December 2012 - 1,982,413 738,559 246,798 338,350 3,306,120 Net book value 26,095,310 - 36,121 142,602 - 26,274,033
Rate of amortisation 20%
10.1 As at 31 December 2013, the gross carrying amount of fully amortised intangible assets (computer software) still in use amounted to Rs. 338.350 million (2012:Rs. 338.350 million).
10.2 The recoverable amount for the purpose of assessing impairment on goodwill on acquisition of Union Bank Limited was based on value in use. The calculations are based on the 2014 budget and forecasts for subsequent two years as approved by the management. These have then been extrapolated for a further period of 17 years using a steady long term forecast GDP growth rate and a terminal value determined based on a long term earnings multiple. The cash flows are discounted using a pre-tax discount
rate which reflects the current market rate appropriate for the business. For the calculation as at 31 December 2013, the bank has used a long term forecast GDP growth Financial statements and notes rate of 4.4 percent and a discount rate of 28.7 percent. The management believes that any reasonable possible changes to the key assumptions on which calculation of recoverable amount is based, would not cause the carrying amount to exceed the recoverable amount. 44 Standard Chartered Annual Report 2013 Notes to the Un-Consolidated Financial Statements For the year ended 31 December 2013
11 DEFERRED TAX ASSETS / (LIABILITIES)
The following are major deferred tax assets / (liabilities) recognised and movement thereon:
Note 2013 At 1 (Charge) / Debit/ At 31 January credit to profit (credit) December 2013 and loss to equity/ 2013 other comprehensive income ------(Rupees in '000) ------Available for sale investments (228,528) - 194,223 (34,305) Provisions for loans and advances 11.1 6,585,275 (1,007,941) - 5,577,334 Other assets (79,291) (7,531) - (86,822) Fixed assets (263,031) 35,363 - (227,668) Surplus on revaluation of fixed assets (29,154) 9,090 - (20,064) Goodwill (4,439,830) (874,985) - (5,314,815) Actuarial gains on retirement benefits (21,897) - 9,484 (12,413) 1,523,544 (1,846,004) 203,707 (118,753)
2012
At 1 (Charge) / Debit/ At 31 January credit to profit (credit) December 2012 and loss to equity/ 2012 other comprehensive income ------(Rupees in '000) ------
Available for sale investments 121,599 - (350,127) (228,528) Provisions for loans and advances 6,602,645 (17,370) - 6,585,275 Other assets (77,869) (1,422) - (79,291) Fixed assets (280,389) 17,358 - (263,031) Surplus on revaluation of fixed assets (33,109) 3,955 - (29,154) Goodwill (3,586,802) (853,028) - (4,439,830) Actuarial gains on retirement benefits (16,345) - (5,552) (21,897) 2,729,730 (850,507) (355,679) 1,523,544
11.1 For income year 2013, the Bank has recognised a net Deferred Tax Liability of Rs. 119 million. This liability is net of deferred tax asset of Rs. 5,577 million recognised on Non-performing loans.
The Finance Act, 2010 amended the Seventh Schedule to the Income Tax Ordinance, 2001 whereby the limit for claiming provisions for advances and off balance sheet items in respect of Consumer and SME advances has been enhanced from 1% to 5% of gross Consumer and SME advances. In case of Corporate advances, the limit continues to be 1% of gross Corporate advances.
The management carried out an exercise and based on that concluded that the Bank would achieve a deduction for provisions in excess of the limits prescribed by the Income Tax Ordinance, 2001 in future years. Accordingly, deferred tax asset of Rs. 1,337 million has been recognised on such provisions for income years 2009 upto 2013.
The Seventh Schedule has been further amended through Finance Act, 2010 by introducing transitional provisions, whereby amounts provided for against irrecoverable or doubtful advances in tax year 2008 (income year 2007) and prior years, would be allowed in the tax year in which these advances are actually written off.
The management considers that the amendment made vide Finance Act, 2009 in respect of provisions for bad debts being allowed at 1% of total advances is applicable for tax year 2010 (income year 2009), whereas for tax year 2009 (income year 2008), the provision for bad debts would continue to be allowed under the Seventh Schedule at the time of actual write-off.
The deferred tax asset recognized upto December 31, 2008 relating to provisions for advances and off balance sheet items amounting to Rs. 4,240 million has been carried forward. Financial statements and notes 45 - 184,516 2012 2012 (10,313) 665,665 167,431 176,398 152,865 188,443 557,462
(547,149) 2,681,333 23,372,739 23,399,389 1,535,248 26,650 34,393,086 3,014,806 9,239,777 5,980,351 741,901 297,052 547,149 25,895 168,165 8,109 33,845,937 15,322,698 6,164,867 7,300 - and assets arising from and assets 6,005 3,686 77,426 36,276 580,296 814,798 188,443 412,577 741,901 341,228 426,357 726,605 122,790 547,149 295,134 2013 2013 (426,357) (120,792) 9,320,011 4,485,201 6,127,636 6,379,093 4,930,334 6,540,213 1,129,842 29,364,271 15,751,377 ------(Rupees in '000) ------(Rupees in '000) ------(Rupees
16,566,175 current year had allowed remittance Note , 'their corresponding housing loans , 'their corresponding housing loans billion) which have been further discounted by the bank. billion) which have been further discounted Central Bank of SriLanka during the not retained by the purchaser not retained Receivable from defined benefit plans Receivable from defined Advances, deposits, advance rent and other prepayments advance Advances, deposits, less provisions) (payments Advance taxation Income / mark-up accrued in local currencyIncome / mark-up accrued Income / mark-up accrued in foreign currencies Income / mark-up accrued account Branch adjustment forward foreign exchange contracts Unrealized gain on value and currency options - positive fair Interest rate derivatives / Government of Pakistan Receivable from SBP undertakings Receivable from associated Lanka operations Chartered Bank, Sri Receivable from Standard acquired in satisfaction of claimsNon-banking assets 21.6.2 12.4 12.2 Advances against future Murabaha Bank acceptances 12.3 Others Closing balance Based on the last valuation, the market value of non-banking assets acquired in satisfaction of claims amounted to Rs 433.400 the million. Accordingly, differential between carrying amount and market value was provided at the time of valuation. is Rs Nil (2012:Rs 5.233 Included in these acceptances Chartered Bank, Sri Lanka (SCBSL) and signed between Standard Agreement (SPA) Consequent to Sale and Purchase Chartered Bank Standard (Pakistan) Limited (SCBPL), the Sri Lanka branch operations of were SCBPL amalgamated unproductive debts, According to the terms of SPA, from close of business on 10 October 2008. with effect with SCBSL who are loans of SCBPL staff In Pakistan Less: Provision against other assetsReversal during the year 12.1 litigation which cannot be assigned are held in trust with SCBSL. The recoveries made (net of expenses) from such assets are to taken to income from Sri Lanka branch operations, as disclosed in note 25 to these financial statements, The and consequently recorded as receivable. balance which has been received during the year. of major portion of the outstanding Pakistan Outside Opening balance Other Assets - net of provisions 28,937,914 Commodities under Islamic finance Advance Federal Excise Duty In Pakistan Outside Pakistan Outside 12 ASSETS OTHER Notes to the Un-Consolidated Financial Statements Financial the Un-Consolidated to Notes 2013 ended 31 December For the year 12.3 12.2 12.4 13 BILLS PAYABLE 12.1 other assets against Provision 14 BORROWINGS 46 Standard Chartered Annual Report 2013 Notes to the Un-Consolidated Financial Statements For the year ended 31 December 2013
14.1 Particulars of borrowings with respect to currencies Note 2013 2012 ------(Rupees in '000) ------
In local currency 15,751,377 23,372,739 In foreign currencies 814,798 26,650 16,566,175 23,399,389
14.2 Details of borrowings secured / unsecured
Secured Borrowings from State Bank of Pakistan under Export Refinance (ERF) scheme 14.2.1 13,945,205 14,450,505 Repurchase agreement borrowings (Repo) - 5,963,886 State Bank of Pakistan - LTFF 14.2.2 1,796,279 2,418,056 State Bank of Pakistan - LTF - Export Oriented Projects 14.2.3 3,370 10,938 15,744,854 22,843,385 Unsecured Call borrowings - 525,000 Overdrawn nostro accounts 14.2.4 821,321 31,004 16,566,175 23,399,389
14.2.1 Mark-up on Export Refinance (ERF) from State Bank of Pakistan is charged at 6.83 percent to 8.4 percent (2012: 8.5 percent to 10 percent) per annum. ERF borrowings also include borrowings under Islamic Export Refinance scheme amounting to Rs. 1,060 million (2012: Rs. 1,368 million). These borrowings are secured against demand promissory notes executed by the Bank in favour of State Bank of Pakistan.
14.2.2 Mark-up on Long Term Finance Facility (LTFF) from State Bank of Pakistan carry mark up rates ranging from 7 percent to 11 percent (2012: 7 percent to 11 percent) per annum. These loans are secured against promissory notes executed by the Bank in favour of State Bank of Pakistan.
14.2.3 Mark-up on Long Term Finance for Export Oriented Projects (EOP) from State Bank of Pakistan carry mark up rate at 5 percent (2012: 5 percent ) per annum. These loans are secured against promissory notes executed by the Bank in favour of State Bank of Pakistan.
14.2.4 These include overdrawn nostro accounts with other branches and subsidiaries of Standard Chartered Group outside Pakistan amounting to Rs.807.349 million (2012: Rs. 26.65 million).
15 DEPOSITS AND OTHER ACCOUNTS Note 2013 2012 Customers ------(Rupees in '000) ------
Remunerative - Fixed deposits 26,043,138 31,200,653 - Savings deposits 142,234,138 127,476,619
Non-Remunerative - Current accounts 125,832,808 106,288,779 - Margin accounts 592,409 381,728 - Special exporters' account 850,511 506,714 295,553,004 265,854,493 Financial Institutions - Non-remunerative deposits - current account 15.1 1,003,987 815,568 296,556,991 266,670,061
15.1 This includes Rs. 456.852 million (2012: Rs.254.274 million) against balances of other branches and subsidiaries of Standard Chartered Group operating outside Pakistan. Financial statements and notes 47 - 12,400 2012 2012 134,761 473,925 192,609 955,669
9,014,703 9,014,703 1,353,896 1,941,975 2,750,000 35,595,406 55,089,930 211,580,131 266,670,061 - - AAA 2012 785,737 14,643 245,124 8,082,781 15,322,698 777,835 4,381,831 122,361 134,761 931,922 - 10 years - the beginning of 21,281 working day prior to 27,536 852,226 204,804 183,877 318,638 531,620 687,269 134,761 318,638 2013 2013 each semi annual period ("KIBOR") prevailing one 4,440,883 4,930,334 1,417,521 2,146,183 5,559,289 1,643,340 1,130,060 5,559,289 1,957,032 1,118,406 2,500,000 0.75% above the six months ------(Rupees in '000) ------(Rupees in '000) ------(Rupees 64,391,707 232,165,284 21,427,133 Karachi Inter-Bank Offered Rate Offered Inter-Bank Karachi 296,556,991 Note Note On account of reimbursement of executive and general administrative expenses Others Opening balance Charge for the year Closing balance Provision against off balance sheet obligationsProvision against off Worker's Welfare Fund (WWF) payable Bank acceptances 17.2 12.3 Royalty and other payable Unclaimed balances Dividend Payable Unrealized loss on forward foreign exchange contracts Unrealized loss on forward foreign exchange Payable to defined benefit plans Due to Holding Company 17.1 Advance payments Sundry creditors and currency optionsUnrealized loss on interest rate derivatives 21.6.2 In foreign currencies Accrued expenses Term Finance Certificates issuedTerm 16.1 in foreign currency Mark-up / return / interest payable Mark-up / return / interest payable in local currency Mark-up / return / interest payable The Bank, on 29 June 2012, issued fourth, rated, unsecured, subordinated TFCs of Rs 2,500 million by way of private TFCs of subordinated 2012, issued fourth, rated, unsecured, The Bank, on 29 June issue are as follows: for the fourth outstanding Terms placement. In local currency Floor Ceiling Repayment Year of Issue Rating Rate 17.1 Due to Holding Company 17.2 off-balance sheet obligations against Provision 16 LOANS SUB-ORDINATED 17 LIABILITIES OTHER 16.1 15.2 of deposits Particulars Notes to the Un-Consolidated Financial Statements Financial the Un-Consolidated to Notes 2013 ended 31 December For the year 48 Standard Chartered Annual Report 2013 Notes to the Un-Consolidated Financial Statements For the year ended 31 December 2013
18 SHARE CAPITAL
18.1 Authorized Capital 2013 2012 Note 2013 2012 (Number of shares) ------(Rupees in '000) ------4,000,000,000 4,000,000,000 Ordinary shares of Rs.10 each 40,000,000 40,000,000
18.2 Issued, subscribed and paid-up Capital
2,939,785,018 2,939,785,018 Ordinary shares of Rs. 10 each fully paid in cash 29,397,850 29,397,850
Issued in terms of scheme 931,800,003 931,800,003 of amalgamation 18.3 9,318,000 9,318,000 3,871,585,021 3,871,585,021 38,715,850 38,715,850 18.3 These represent 892,554,151 shares of Rs. 10/- each issued and allotted at par to Standard Chartered Bank, United Kingdom against transfer of entire undertaking of SCB Branch Business by SCB to the Bank, and 39,245,852 shares issued and allotted at par credited as fully paid up to persons who were registered shareholders of Union Bank. These shares have been issued in accordance with the scheme of amalgamation duly approved by State Bank of Pakistan on 4 December 2006.
18.4 At 31 December 2013, Standard Chartered Bank , United Kingdom, held 98.99% shares of the Bank. Note 2013 2012 19 RESERVES ------(Rupees in '000) ------Share premium 19.1 1,036,090 1,036,090 Statutory reserve 19.2 6,008,249 3,902,646 7,044,339 4,938,736
19.1 This represents excess of fair value of the shares over par value of shares issued to registered shareholders of Ex-Union Bank in terms of the amalgamation scheme.
19.2 In accordance with the Banking Companies Ordinance, 1962, the Bank is required to transfer twenty percent of its profit of each year to a reserve fund until the amount in such fund equals the paid-up capital of the Bank.
19.3 The Board of Directors in their meeting held on March 5, 2014 has announced a final cash dividend of 14% (Rs. 1.4 per share) in respect of the year ended December 31, 2013 (2012: Re. 1.25 per share). This is in addition to 10% (Re. 1/- per share) interim cash dividend announced during the year. These financial statements for the year ended December 31, 2013 do not include the effect of final dividend appropriations which will be accounted for subsequent to the year end.
20 SURPLUS / (DEFICIT) ON REVALUATION OF ASSETS - NET OF DEFERRED TAX Note 2013 2012 ------(Rupees in '000) ------2012 Surplus / (deficit) arising on revaluation of: Fixed assets 20.1 3,378,993 3,536,245 Available for Sale Securities 20.2 63,708 425,083 3,442,701 3,961,328 20.1 Surplus on revaluation of fixed assets - net of tax Surplus on revaluation of fixed assets as at 1 January 3,565,399 3,576,699 Surplus on revaluation of owned properties recorded during the year - - Surplus realized on disposal of revalued properties (158,101) -
Transferred to unappropriated profit in respect of incremental depreciation charged during the year - net of deferred tax (5,357) (7,345) Related deferred tax liability (2,884) (3,955) (8,241) (11,300) Surplus on revaluation of fixed assets as at 31 December - net of tax 3,399,057 3,565,399
Less: Related deferred tax liability on: Revaluation surplus as at 1 January (29,154) (33,109) Revaluation surplus realized on disposal during the year 6,206 - Incremental depreciation charged during the year transferred to profit and loss account 2,884 3,955 (20,064) (29,154) Surplus on revaluation of fixed assets as at 31 December - net of tax 3,378,993 3,536,245 Financial statements and notes 49 - 653,611 425,083 507,350 2012 2012 (79,314)
(228,528) 3,018,333 1,299,251 36,307,266 12,683,179 12,336,500 19,978,336 32,313,696 224,902 15,074,852 22,946,980 673 - 63,708 98,013 (34,305) 116,156 100,968 2013 2013 (119,111) 2,490,934 3,761,986 2,643,500 ------(Rupees in '000) ------(Rupees in '000) ------(Rupees in '000) 16,762,338 23,937,105 37,738,000 13,713,285 45,491,250 40,277,064 70,837,253 Note Guarantees issued favouring: - Government 21.1.1 - Others for Sale securities - net of tax Sale securities for Bills Treasury Market / asset (liability) Related deferred tax Pakistan Investment Bonds Pakistan Sukuk and Ijarah Bonds funds of mutual Listed shares and units Letters of credit as debtClaims against the Bank not acknowledged 21.3.1 21.2.1 Guarantees relating to Islamic Banking Business amount to Rs 1,178 million (2012: Rs 1,593 million). Guarantees relating to Islamic Banking Business amount to Rs 7,203 million (2012: Rs 8,287 million). Letters of credit relating to Islamic Banking Purchase from: Bank of Pakistan State These represent certain claims by third parties against the Bank, which are being contested in the Courts The of law. economic of outflow an of possibility the and business of course normal the to relate these that view the of is management resources is remote. Other banks Customers Customers The bank makes commitments to extend credit in the normal course of its business but these being revocable commitments revocable being these but business its of course normal the in credit extend to commitments makes bank The do not attract any significant penalty or expense if the facility is unilaterally withdrawn. Sale to: Bank of Pakistan State Other banks are spread over a period of one year. The maturities of the above contracts 21 AND COMMITMENTS CONTINGENCIES 21.1 contingent liabilities Transaction-related 21.1.1 21.2.1 20.2 of Available revaluation / (deficit) on Surplus Notes to the Un-Consolidated Financial Statements Financial the Un-Consolidated to Notes 2013 ended 31 December For the year 21.2 contingent liabilities Trade-related 21.3 Other contingencies 21.4 contracts Commitments in respect of forward foreign exchange 21.3.1 21.5 credit to extend Commitments 50 Standard Chartered Annual Report 2013 Notes to the Un-Consolidated Financial Statements For the year ended 31 December 2013
2013 21.6 Derivative instruments Interest Rate Swaps FX Options No. of Notional No. of Notional 21.6.1 Product analysis Contracts Principal* Contracts Principal * (Rupees in '000) (Rupees in '000) Counterparties
With Banks for Hedging - - - - Market Making 13 17,651,475 22 405,782
With FIs other than banks Hedging - - - - Market Making 4 2,885,652 - -
With other entities for Hedging - - - - Market Making 24 27,689,352 22 405,781
Total Hedging - - - - Market Making 41 48,226,479 44 811,564
2012 Total Market Making 61 76,813,074 602 6,740,750
* At the exchange rate prevailing at year end.
Contracts with banks represent contracts entered with branches of Standard Chartered Bank, UK to obtain cover against the contracts with customers, except for 5 contracts with local banks having notional principal of Rs 10,594 million.
21.6.2 Maturity analysis
Interest Rate Swaps and FX Options No. of Notional Mark to Market Remaining Contracts Principal Negative Positive Net Maturity ------(Rupees in '000) ------Upto 1 month 38 761,131 (17,969) 17,969 - 1 to 3 months 9 5,732,780 (343,675) 63,691 (279,984) 3 to 6 months 2 224,691 (1,195) 1,195 - 6 month to 1 year 3 4,077,283 (269,607) 2,017 (267,590) 1 to 2 year 7 13,157,257 (287,794) 63,111 (224,683) 2 to 3 years 7 11,432,637 (258,618) 230,545 (28,073) 3 to 5 years 15 11,832,255 (958,786) 193,229 (765,557) 5 to 10 years 4 1,820,009 (8,539) 8,539 - Above 10 years - - - - - 85 49,038,043 (2,146,183) 580,296 (1,565,887)
22 MARK-UP / RETURN / INTEREST EARNED 2013 2012 ------(Rupees in '000) ------
On loans and advances to customers 16,100,537 17,307,653 On loans and advances to financial institutions 109,474 31,357 On investments in: i) Held for trading securities 126,707 116,824 ii) Available for sale securities 13,498,799 13,091,317 On deposits with financial institutions / State Bank of Pakistan - - On securities purchased under resale agreements 528,724 574,768 On call money lending / Placements 12,447 11,675 30,376,688 31,133,594 Financial statements and notes 51 63,449 15,457 38,721 15,600 20,128 37,086 28,287 13,752 2012
285,022 107,083 449,840 208,143 171,487 485,249 138,538 222,510 699,858 951,576 740,732 256,495 137,459 123,617 292,098 149,964 1,089,203 4,206,039 1,169,658 1,264,634 4,665,699 9,732,495 11,653,723 13,856,101 297,388 892,284 283,605 8,341 80,455 1,352,841 146,702 7,739 7,025 10,619 97,807 24,540 19,275 52,116 19,224 46,593 32,281 2013 234,710 755,633 278,122 732,005 326,396 439,618 192,579 262,760 493,372 184,375 359,016 103,031 284,273 233,042 119,065 214,241 732,486 163,496 253,907 (874,309) (977,596) 1,244,824 1,262,478 4,940,603 ------(Rupees in '000) ------(Rupees in '000) (1,301,971) 10,251,904 8,729,420 12,047,981 Note Ijarah Sukuks Pakistan Investment Bonds Pakistan Export Refinance (ERF) scheme Export Refinance (ERF) Market Treasury Bills Treasury Market Income from Sri Lanka branch operations 12.4 Equity Securities - Listed 481 Rent on property Gain on disposal of fixed assets Contributions to defined contribution plans insurance, electricity etc. Rent, taxes, Legal and professional charges Communications and maintenance Repairs and printing Stationery Advertisement and publicity DonationsAuditors' remuneration Depreciation Amortization conveyance and vehicles' running Travelling, 26.2 26.1 Salaries, allowances etc. Gain / (Loss) on derivatives fair valued at acquisition Gains on assets Others Charge for defined benefit plans Deposits Securities sold under repurchase agreements Securities sold under Call borrowings under Bank of Pakistan Borrowings from State Reimbursement of executive and general administrative expenses 26.3 Federal Government Securities Term Finance Certificates (sub-ordinated loans) Finance Certificates (sub-ordinated Term Reward and bonus points redemption Reward and bonus points services Premises security and cash transportation Others Royalty 25 INCOME OTHER 26 EXPENSES ADMINISTRATIVE 23 / INTEREST EXPENSED MARK-UP / RETURN Notes to the Un-Consolidated Financial Statements Financial the Un-Consolidated to Notes 2013 ended 31 December For the year 24 SECURITIES - NET GAIN ON SALE OF 52 Standard Chartered Annual Report 2013 Notes to the Un-Consolidated Financial Statements For the year ended 31 December 2013
26.1 Details of the donations given in excess Note 2013 2012 of Rs. 100,000 are given below: ------(Rupees in '000) ------
Donee Institute of Business Administration 8,000 7,000 The Citizen Foundation 1,100 2,500 The Kidney Centre 26.1.1 2,000 2,500 Lahore University of Management Sciences 2,400 2,400 SST Public School Rashidabad - 1,200 Habib University 4,000 - Aman Foundation 3,100 - The Hunar Foundation 3,940 -
26.1.1 Mr. Mohsin Ali Nathani, CEO of the bank is also a member of Board of Governors of The Kidney Centre.
26.2 Auditors' remuneration
Audit fee 16,528 16,045 Fee for audit of pension, gratuity and provident funds 700 450 Special certifications and others 1,047 2,750 Taxation services - - Out-of-pocket expenses 1,000 883 19,275 20,128
26.3 During the year, State Bank of Pakistan has partially restricted the remittance of certain outsourcing charges and accordingly the excess accrual amounting to Rs. 3,005 million has been reversed.
26.4 Total cost for the year included in Administrative Expenses relating to outsourced activities is Rs. 2,464 million. This includes payments to local companies for obtaining routine services such as personnel for collection and recoveries, contact centre, service quality and technology maintenance, courier services and executive and general administrative expenses of SCB UK.
27 OTHER PROVISIONS / ASSET WRITE OFFS 2013 2012 ------(Rupees in '000) ------
Fixed asset write offs 60,358 60,633
Other provisions Provision released against receivable under cross currency swap arrangements (120,792) (10,313) (60,434) 50,320 28 OTHER CHARGES
Net charge / (reversal) against fines and penalties imposed by SBP 1,821 (2,029) Worker's Welfare Fund (WWF) 329,473 186,213 331,294 184,184 29 TAXATION
For the year - Current 3,749,027 2,326,067 - Deferred 1,846,004 850,507 5,595,031 3,176,574 For prior years' 21,136 21,136 5,616,167 3,197,710 53 Notes to the Un-Consolidated Financial Statements For the year ended 31 December 2013
2013 2012 29.1 Relationship between tax expense and accounting profit ------(Rupees in '000) ------
Profit before taxation 16,144,180 9,108,265
Tax at the applicable tax rate of 35% (2012: 35%) 5,650,463 3,187,893 Income (dividend, capital gain etc.) at reduced rates (65,606) (18,902) Expenses that are not deductible in determining taxable income 10,174 7,583 Prior year provision 21,136 21,136 5,616,167 3,197,710
29.2 Standard Chartered Bank (Pakistan) Limited
The return for income year 2013 (Tax Year 2014) is due for filing by 30 September 2014.
The tax department amended the assessments for income years 2007 to 2012 (tax years 2008 to 2013 respectively) under the related provisions of the Income Tax Law, determining additional tax liability on account of various issues (such as disallowances of expenses relating to provision against loans and advances, goodwill amortisation etc.). The resultant tax demands of Rs. 10,155 million have been paid by the Bank. Appeals against the amended assessment orders are pending before different appellate forums.
The management considers that a significant amount of the additional tax liability is the result of timing differences and is confident that the issues in the above mentioned tax years will be decided in favour of the Bank at appellate forums. Consequently, no additional provision is required.
The Tax Authorities have passed an order for the income years 2009 and 2010 levying Federal Excise Duty amounting to Rs. 188 million on certain items. The Bank is contesting the order in the appeal. The Bank has paid entire amount under protest.
Further, an order for income year 2011 levying Federal Excise Duty of Rs. 515.6 million has been issued. The demand has been stayed by the Sindh High Court.
29.3 Standard Chartered Bank Branch Operations Financial statements and notes The assessments have been finalized upto and including tax year 2006. The Banks / departmental appeals for the assessment / tax years 1976-77 to 2006 are pending before different appellate forums on various issues. The management expects favourable decisions in pending appeals and consequently, no additional provision is required.
29.4 Union Bank Limited
The tax assessments for the assessment years 1993-94 through tax year 2007 are pending at various appeal forums against certain disallowances. The management expects favourable decision in pending appeals and consequently, no additional provision is required. 54 Standard Chartered Annual Report 2013 Notes to the Un-Consolidated Financial Statements For the year ended 31 December 2013
30 EARNINGS PER SHARE - BASIC AND DILUTED Note 2013 2012 ------(Rupees in '000) ------
Profit for the year 10,528,013 5,910,555
Weighted average number of ordinary shares in issue during the year 3,871,585,021 3,871,585,021 ------(Rupees) ------Earnings per share - basic and diluted 2.72 1.53
2013 2012 31 CASH AND CASH EQUIVALENTS ------(Rupees in '000) ------Cash and balances with treasury banks 32,331,083 31,487,869 Balances with other banks 1,451,558 2,363,144 33,782,641 33,851,013
32 STAFF STRENGTH ------(Number) ------
Permanent 2,943 3,016 Temporary / on contractual basis / direct contracts 9 4 Bank's own staff at the end of year 2,952 3,020
Outsourced 1,558 1,944 Total staff strength 4,510 4,964
33 DEFINED BENEFIT PLANS
33.1 General description
Non Management Staff Pension Fund The plan provides pension calculated at 50% of the average pensionable salary after completing 30 years of service. The employees of the bank are entitled to either pension or gratuity, but not both. However, the employees of ANZ Grindlays Bank transferred to the bank are entitled to both pension and gratuity and the minimum number of years required for entitlement of pension is 25 years for these employees. Pension is calculated as 1/120 times the last drawn merged salary for each year of service.
Non Management Staff Gratuity Fund The plan provides a lump sum gratuity calculated at one month's salary for each completed year of service (maximum 40 months) after completing 5 years of service. For the employees of ex-ANZ Grindlays Bank, the plan provides a lump sum calculated at 50% of last drawn merged salary for each completed year of service (maximum 40 months) after completing 5 years of service. However, if the employee is not entitled for pension, the percentage is increased to 100%. The employees of SCB are entitled to either pension or gratuity, but not both.
Management Staff Pension Fund The plan is closed to active employees. The entire liability is in respect of existing pensioners.
33.2 Principal Actuarial Assumptions
The last actuarial valuation of the scheme was carried out on 31 December 2013 and the key assumptions used for actuarial valuation were as follows:
2013 2012 Discount rate 12.75% p.a. 12% p.a. Expected rate of increase in salary in future years 12.75% p.a. 12% p.a. Expected rate of return on plan assets 12.75% p.a. 12% p.a. Expected long term rate of increase in pension 6.75% p.a. 6% p.a. Mortality rate LIC (1975-79) ultimate mortality LIC (1975-79) ultimate mortality table rated down one year table rated down one year Withdrawal rate Light Light 55 Notes to the Un-Consolidated Financial Statements For the year ended 31 December 2013
SCB Non Management SCB Non Management SCB Management Total Pension Fund Gratuity Fund Pension Fund 2013 2012 2013 2012 2013 2012 2013 2012 33.3 Reconciliation of (receivable) / payable from / to defined benefit plan (Rupees in '000)
Present value of defined benefit obligations 59,346 60,408 100,765 69,634 46,716 38,387 206,827 168,429 Fair value of plan assets (82,838) (79,928) (52,389) (46,960) (44,064) (48,841) (179,291) (175,729) (Asset) / liability recognised (23,492) (19,520) 48,376 22,674 2,652 (10,454) 27,536 (7,300)
33.4 Movement in defined benefit obligation
Obligation as at 1 January 60,408 68,506 69,634 55,950 38,387 45,189 168,429 169,645 Current service cost 504 600 2,863 2,465 - - 3,367 3,065 Prior Service Cost - - 5,144 - - - 5,144 - Interest cost 6,880 8,446 8,159 7,220 4,270 5,443 19,309 21,109 Benefits paid (4,771) (5,177) - - (5,309) (5,923) (10,080) (11,100) Actuarial (gain) / loss on obligation (3,675) (11,967) 14,965 3,999 9,368 (6,322) 20,658 (14,290) Past service cost resulting from change in Rules ------Obligation as at 31 December 59,346 60,408 100,765 69,634 46,716 38,387 206,827 168,429
33.5 Movement in fair value of plan assets
Fair value as at 1 January 79,928 76,101 46,960 41,739 48,841 51,583 175,729 169,423 Interest income on plan asset 9,118 8,523 5,438 4,657 5,525 2,653 20,081 15,833 Contribution by the bank ------Benefits paid (4,771) (5,177) - - (5,309) (5,923) (10,080) (11,100) Actuarial gain / (loss) on plan assets (1,437) 481 (9) 564 (4,993) 528 (6,439) 1,573 Fair value as at 31 December 82,838 79,928 52,389 46,960 44,064 48,841 179,291 175,729
33.6 Movement in (receivable) / payable from / to defined benefit plan
Balance as at 1 January (19,520) (7,595) 22,674 14,211 (10,454) (6,394) (7,300) 222 Charge for the year (1,734) 523 10,728 5,028 (1,255) 2,790 7,739 8,341 Contribution to the fund during the year ------Actuarial (gain) / loss on plan assets (2,238) (12,448) 14,974 3,435 14,361 (6,850) 27,097 (15,863) Balance as at 31 December (23,492) (19,520) 48,376 22,674 2,652 (10,454) 27,536 (7,300)
33.7 Charge for defined benefit plan
Current service cost 504 600 2,863 2,465 - - 3,367 3,065 Interest cost 6,880 8,446 8,159 7,220 4,270 5,443 19,309 21,109 Expected return on plan assets (9,118) (8,523) (5,438) (4,657) (5,525) (2,653) (20,081) (15,833) Recognition of past service cost - - 5,144 - - - 5,144 - (1,734) 523 10,728 5,028 (1,255) 2,790 7,739 8,341 33.8 Actual return on plan assets
Expected return on plan assets 9,118 8,523 5,438 4,657 5,525 2,653 20,081 15,833 Actuarial gain / (loss) on plan assets (1,437) 481 (9) 564 (4,993) 528 (6,439) 1,573 7,681 9,004 5,429 5,221 532 3,181 13,642 17,406 33.9 Cumulative amount of actuarial gains / (losses) recognised in comprehensive income 33,609 31,371 (30,817) (15,843) 32,674 47,035 35,466 62,563
33.10 Expected contributions for next year - - - - Financial statements and notes
33.11 Components of plan assets as a percentage of total plan assets
Bonds 33% 98% 22% 93% 97% 91% Cash and net current assets 67% 2% 78% 7% 3% 9% Others 0% 0% 0% 0% 0% 0%
33.12 Five year data on surplus/ (deficit) of the plans and 2013 2012 2011 2010 2009 experience adjustments ------(Rupees in '000) ------
Present value of defined benefit obligation 206,827 168,429 169,645 138,264 136,940
Fair value of plan assets 179,291 175,729 169,423 157,179 154,680
Deficit / (Surplus) 27,536 (7,300) 222 (18,915) 17,740
Experience adjustments on plan liabilities - loss / (gain) 5,373 (18,000) (741) (4,247) (7,621)
Experience adjustments on plan assets - loss / (gain) 6,439 (7,637) (3,889) 330 3,566 56 Standard Chartered Annual Report 2013 Notes to the Un-Consolidated Financial Statements For the year ended 31 December 2013
34 SHARE BASED PAYMENTS
The Bank's employees participate in the following share compensation plans operated globally by the ultimate holding company, Standard Chartered Plc (SCPLC). For employees in Pakistan, the Group has changed its arrangement to issue shares of SCPLC upon meeting the vesting conditions. Previously the Group operated cash equivalent or "phantom" arrangements under which employees can receive a cash benefit linked to either the growth in Group's share (Share save scheme) or the value of the Group's share (restricted / performance share awards) and the arrangement did not give an option to the Bank's employees to buy SCPLC shares. The market value of shares is denominated in pounds sterling at the time of grant. Phantom scheme not yet vested are still being accounted for cash settled basis.
The total expense recognised in respect of above schemes on equity settled basis amounts to Rs. 59.741 million (2012: Rs.2.803 million). As also explained in note 3.20 in detail, the Bank's liability towards its parent, however continues to be determined and recorded on cash settled basis for options not yet vested. The main features of each plan are as follows:
i) Standard Chartered Share Plan
The 2012 Standard Chartered Share Plan replaced all the Groups existing discretionary share plan arrangements following approval by shareholders at the Groups Annual General Meeting on 5 May 2011. It is the Groups main share plan, applicable to all employees with the flexibility to provide a variety of award types including performance shares, deferred awards (shares or cash) and restricted shares. Performance and restricted share awards will generally be in the form of nil price options to participate in the shares of SCPLC. The remaining life of the plan is ten years.
Movements in the number of share options held by the Bank's employees are as follows: 2013 Weighted 2012 Weighted average average (Number exercise price (Number exercise price in '000) £ per share in '000) £ per share At 1 January 70 - 26 - Granted during the year 36 - 45 - Exercised during the year (8) - - - Lapsed during the year (2) - (1) - Notional dividend 1 - At 31 December 97 - 70 -
The weighted average price at the time the options were exercised during 2013 was £ NIL (2012: £NIL).
2013 2012 Range of exercise price Weighted Number Weighted average remaining life Weighted Number Weighted average remaining life average ('000) Expected Contractual average ('000) Expected Contractual exercise price years years exercise price years years
NIL -97 10 5.68 / 8.26 -70 10 6.1 / 8.8
ii) International Sharesave Scheme
The International Sharesave Scheme was first launched in 1996 and made available to all employees of the Bank. Employees have the choice of opening a three-year or a five-year savings contract. Within a period of six months after the third or fifth anniversary, employees may exercise the awards and receive any benefit in cash; alternatively, the employee may elect to have the savings, plus interest, repaid in cash. The price at which they may purchase shares is at a discount of up to 20 percent on the share price at the date of the invitation. There are no performance conditions attached to options granted. The options granted do not confer any right to participate in any share issue of any other company.
Movements in the number of share options held by the Bank's employees are as follows: 2013 Weighted 2012 Weighted average average (Number exercise price (Number exercise price in '000) £ per share in '000) £ per share At 1 January 68 11.88 118 11.42 Granted during the year 36 11.78 - - Exercised during the year (4) 10.98 (19) 10.36 Lapsed during the year (16) 14.07 (31) 11.03 Adjustment due to right issue - - - - At 31 December 84 11.91 68 11.88
The weighted average price at the time the options were exercised during 2013 was £10.98 (2012: £10.36). 57 Notes to the Un-Consolidated Financial Statements For the year ended 31 December 2013
2013 2012 Range of exercise price Weighted Number Weighted average remaining life Weighted Number Weighted average remaining life average ('000) Expected Contractual average ('000) Expected Contractual exercise price years years exercise price years years
£9.8/£14.63 11.91 84 3.33/5.33 1.31/3.42 11.88 68 3.33/5.33 2.1
The intrinsic value of vested International Sharesave cash-settled awards as at 31 December 2013 was 41,688 thousand (2012: Rs 9,935 thousand). iii) Restricted Share Scheme
The Restricted Share Scheme is a discretionary share incentive scheme for high performing and high potential staff at any level of the organisation whom the Group wishes to motivate and retain. Except upon appointment when an executive director may be granted an award of restricted shares, the Restricted Share Scheme is not applicable to the Group's executive directors, as it has no performance conditions attached to it. Fifty per cent of the award vests two years after the date of the grant and the remainder after three years. The awards granted under this scheme are nil cost options with any benefit payable in cash. The options granted do not confer any right to participate in any share issue of any other company.
Movements in the number of share options held by the Bank's employees are as follows:
2013 Weighted 2012 Weighted average average (Number exercise price (Number exercise price in '000) £ per share in '000) £ per share At 1 January 56 - 110 - Granted during the year - - - - Exercised during the year (25) - (45) - Lapsed during the year (10) - (10) - Notional dividend 1 1 At 31 December 22 - 56 -
The weighted average price at the time the options were exercised during 2013 was Nil (2012: Nil).
2013 2012 Range of exercise price Weighted Number Weighted average remaining life Weighted Number Weighted average remaining life average ('000) Expected Contractual average ('000) Expected Contractual exercise price years years exercise price years years
N/A -22 - 3.13 -56 - 3.99
The intrinsic value of vested Restricted Share Scheme cash-settled awards as at 31 December 2013 was Rs. 15,332 thousand (2012: Rs. 33,143 thousand).
iv) Supplementary Restricted Share Scheme Financial statements and notes The Group operates a Supplementary Restricted Share Scheme which can be used to defer part of an employee's annual bonus in shares. The plan is principally used for employees in the global markets area and is similar to the RSS outlined above for three important factors: executive directors are specifically prohibited from the plan; no new shares can be issued to satisfy awards; and there is no individual annual limit.
Movements in the number of share options held by the Bank's employees are as follows:
2013 Weighted 2012 Weighted average average (Number exercise price (Number exercise price in '000) £ per share in '000) £ per share At 1 January 1 - 2 - Granted during the year - - - - Exercised during the year - - (3) - Lapsed during the year - - 2 - Adjustment due to right issue - - - - At 31 December 1 - 1 -
2013 2012 Range of exercise price Weighted Number Weighted average remaining life Weighted Number Weighted average remaining life average ('000) Expected Contractual average ('000) Expected Contractual exercise price years years exercise price years years
N/A -1 5 4.07 -1 5 5.03
The intrinsic value of vested Supplementary Restricted Share Scheme cash-settled awards as at 31 December 2013 was Rs. 1,875 thousand (2012: Rs. 414 thousand). 58 Standard Chartered Annual Report 2013 Notes to the Un-Consolidated Financial Statements For the year ended 31 December 2013
v) Performance Share Plan
The Performance Share Plan is designed as an intrinsic part of total remuneration for the Group's executive directors and for a small number of the Group's most senior executives. The awards granted under this scheme are nil cost options. Certain performance criteria need to be met before the options can be exercised.
The option granted do not confer any right to participate in any share issue of any other company.
Movements in the number of share options held by the Bank's employees are as follows:
2013 2012 (Number (Number in '000) in '000) At 1 January 12 39 Granted during the year - - Exercised during the year (10) (18) Lapsed during the year (1) (9) Adjustment due to right issue - - At 31 December 1 12
2013 2012 Range of exercise price Weighted Number Weighted average remaining life Weighted Number Weighted average remaining life average ('000) Expected Contractual average ('000) Expected Contractual exercise price years years exercise price years years
N/a -1 - 4.19 -12 - 7.5
The intrinsic value of vested Performance Share Plan cash-settled awards as at 31 December 2013 was Rs. 2,590 thousand (2012: Rs. 1,833 thousand).
35 COMPENSATION OF CHIEF EXECUTIVE AND EXECUTIVES Chief Executive Directors Executives Note 2013 2012 2013 2012 2013 2012 ------(Rupees in '000) ------Director's remuneration / fees 35.1 - - 3,630 3,160 - - Managerial remuneration 35.3 112,164 130,359 - - 1,851,916 1,747,887 Contribution to defined contribution plan 3,422 3,422 - - 185,467 172,804 Rent and house maintenance 7,467 7,467 - - 407,843 381,055 Medical 1,867 1,867 - - 101,961 105,462 Others 375 416 - - 28,544 24,294 125,295 143,531 3,630 3,160 2,575,731 2,431,502
Number of persons 1 1 3 3 939 871
35.1 The director's remuneration / fees represents remuneration paid to the Bank's 3 non-executive directors (2012: 3) for attending Board and Sub- Committee meetings.
35.2 The Chief Executive is entitled to Bank provided free use of furnished accommodation. The Chief Executive and some of the executives are also provided with Bank maintained cars. In addition, the Chief Executive and some of the executives are also reimbursed for cost of medical expenses and other benefits like club subscription, children education etc. as per their terms of employment.
35.3 Managerial remuneration also includes charge against share compensation plans.
36 FAIR VALUE OF FINANCIAL INSTRUMENTS
On-balance sheet financial instruments
Except for investment in subsidiaries, unlisted companies, fixed term advances of over one year, staff loans and fixed term deposits of over one year, the fair value of on balance sheet financial assets and liabilities are not significantly different from their book value as these assets and liabilities are either short term in nature or are frequently re-priced. The fair value of fixed term advances of over one year, staff loans, fixed term deposits of over one year and investment in equity of unlisted companies cannot be calculated with sufficient reliability due to non-availability of relevant active market for similar assets and liabilities. The fair value of investment in quoted subsidiaries is disclosed in note 7.12.3 to these financial statements. 59 Notes to the Un-Consolidated Financial Statements For the year ended 31 December 2013
37 SEGMENT DETAILS WITH RESPECT TO BUSINESS ACTIVITIES 2013 Wholesale Consumer Banking Banking Total ------(Rupees in '000) ------
Internal Income (12,963,196) 13,125,586 162,390 Net mark-up / return / interest income 20,227,775 (1,899,068) 18,328,707 Non mark-up / non interest income 2,681,168 3,203,788 5,884,956 Operating income 9,945,747 14,430,306 24,376,053 Non mark-up / non interest expenses 2,062,397 6,937,883 9,000,280 Internal non mark-up / non interest expenses 47,662 114,728 162,390 Operating profit before provisions and taxation 7,835,688 7,377,695 15,213,383 Direct write-offs / provisions against non-performing loans and advances - net of recoveries (1,553,634) 338,004 (1,215,630) Provision for diminution in the value of investments - net 284,833 - 284,833 Profit before taxation 9,104,489 7,039,691 16,144,180 Other segment items: Depreciation on tangible fixed assets 83,823 409,549 493,372 Amortisation on intangible assets 15,296 36,820 52,116 Segment assets (gross) 358,034,393 64,769,005 422,803,398 Segment non performing loans 13,912,664 10,742,700 24,655,364 Segment provision required 12,580,587 9,498,015 22,078,602 Segment liabilities 112,549,431 231,159,833 343,709,265 Segment return on net assets (ROA) (%) * 2.64% 12.74% 4.03% Segment cost of funds (%) ** 5.31% 2.99% 3.73%
2012 ------(Rupees in '000) ------Internal Income (13,443,551) 13,681,438 237,887 Net mark-up / return / interest income 20,816,674 (1,336,803) 19,479,871 Non mark-up / non interest income 4,656,419 2,659,527 7,315,946 Operating income 12,029,542 15,004,162 27,033,704 Non mark-up / non interest expenses 4,450,743 9,639,862 14,090,605 Internal non mark-up / non interest expenses 55,062 182,825 237,887 Operating profit before provisions and taxation 7,523,737 5,181,475 12,705,212 Direct write-offs / provisions against non-performing loans and advances - net of recoveries 1,339,249 1,815,531 3,154,780 Provision for diminution in the value of investments - net 442,167 - 442,167 Profit before taxation 5,742,321 3,365,944 9,108,265
Other segment items: Financial statements and notes Depreciation of tangible fixed assets 66,925 418,324 485,249 Amortisation of intangible assets 36,900 101,638 138,538 Segment assets (gross) 353,670,549 60,785,863 414,456,412 Segment non performing loans 16,211,449 10,913,504 27,124,953 Segment provision required 14,754,751 9,707,171 24,461,922 Segment liabilities 124,429,839 210,149,884 334,579,723 Segment return on net assets (ROA) (%) * 1.69% 6.59% 2.34% Segment cost of funds (%) ** 6.11% 3.17% 4.15%
* Segment ROA = Profit before tax / (Segment assets - Segment provisions)
** Segment cost of funds have been computed based on the average balances.
The management reviews the performance of Client Coverage and Global Markets as one business segment, namely Wholesale Banking. Therefore the business activities of the Bank have been presented in two segments, Wholesale and Consumer Banking.
Wholesale banking
Deposits, trade, advisory services and other lending activities for corporates and financial institutions. It also includes the overall management of treasury of the Bank, which entails various cash and interest risk management products for customers. The products include FX forwards, FX options and interest rate swaps.
Consumer Banking
Wealth management, deposits, mortgages, unsecured lending (credit cards, personal loans etc.) and SME lending (including SME trade). 60 Standard Chartered Annual Report 2013 Notes to the Un-Consolidated Financial Statements For the year ended 31 December 2013
38 RELATED PARTY TRANSACTIONS
Related parties comprise of Standard Chartered Plc., ultimate parent company, its other subsidiaries and branches, key management personnel, employees' retirement benefit funds and other associated undertakings. The transactions with related parties are conducted at commercial / agreed terms. The bank also provides advances to employees at reduced rates in accordance with their terms of employment.
The transactions and balances with related parties are summarised as follows:
OUTSTANDING BALANCES
Note 2013 2012 ------(Rupees in '000) ------Group Nostro balances with other subsidiaries and branches of the holding company 1,399,406 2,310,442 Overdrawn nostro balances with other subsidiaries and branches of the holding company 807,349 26,650 Vostro balances of other subsidiaries and branches of the holding company 456,852 254,274 Placements with other subsidiaries and branches of the holding company 22,158,840 19,345,269 Deposits of group company 38.1 2,909 12,734 Due to holding company 5,559,289 9,014,703 Due to group company 37,742 33,867 Due from other subsidiaries and branches of the company 63,560 158,311 Interest receivable from group companies 22,516 1,552 Inter-company derivative assets 36,469 433,119 Inter-company derivative liabilities 408,725 752,018 Other receivables - SLA 450 416 Transaction-related contingent liabilities - Guarantees 17,614,405 21,603,912 Commitments in respect of forward foreign exchange contracts 2,608,454 6,101,969 Derivative instruments- Interest rate swaps - Notional 7,057,768 18,327,414 Derivative instruments- FX options - Notional 405,782 3,370,375
Subsidiaries Deposits of subsidiaries 38.1 179,845 71,489 Loans to subsidiaries 38.1 322,941 633,690 Accrued interest receivable 6,387 5,634 Transaction-related contingent liabilities - Guarantees 7,800 - Other receivables - SLA 1,289 1,440
Key management personnel Loans and advances to key management personnel 38.1 90,001 102,395 Deposits of key management personnel 38.1 131,167 181,751
Others Loans and advances to customers with common directorship 38.1 29,966 - Deposits by staff retirement benefit funds 325,577 61,450 Deposits by customers with common directorship 95,858 40,687 Accrued interest receivable against loans and advances to customers with common directorship 2,482 - (Payable to) / receivable from defined benefit plans (27,536) 7,300 Derivative asset 9,775 65,000 Derivative liabilities - 8,504 Transaction-related contingent liabilities - Guarantees 29,479 235,170 Trade-related contingent liabilities - Letter of Credit 43,288 35,434 61 Notes to the Un-Consolidated Financial Statements For the year ended 31 December 2013
Note 2013 2012 ------(Rupees in '000) ------PROFIT AND LOSS
Group Mark-up / return / interest earned 110,596 49,496 Mark-up / return / interest expensed 230 12,401 Fee and commission expense 5,310 93 Fee and commission income 14,321 16,513 Reimbursement of executive and general administrative expenses 26.3 (977,596) 4,206,039 Payment to group company for direct sales services rendered 731,142 697,879 Reimbursement of administrative expenses (including rent and other charges) 5,600 4,466 Net loss on inter-company derivatives 53,356 301,251 Royalty expense 119,065 137,459 Dividend paid 8,622,763 6,706,700
Subsidiaries Mark-up / return / interest earned 65,796 32,451 Mark-up / return / interest expensed 1,918 4,711 Commission income earned 63,417 57,634 Reimbursement of administrative expenses (including rent and other charges) 23,887 16,503 Reimbursement of salaries 7,124 3,769 Dividend income 76,740 75,606
Key management personnel Mark-up / return / interest earned 3,848 3,670 Mark-up / return / interest expensed 2,316 4,415 Salaries and benefits 399,093 518,809 Post retirement benefits 18,164 16,938 Remuneration / fee paid to non-executive directors 3,630 3,160
Others Contribution to defined contribution plans - net of payments received 234,710 297,388 Charge for defined contribution plans 234,710 297,388 Net charge / (income) for defined benefit plans 7,739 8,341
Mark-up / return / interest expensed on deposits of staff retirement Financial statements and notes benefit funds 17,382 15,151 Mark-up / return / interest expensed on deposits of customers with common directorship 8,080 1,943 Mark-up / return / interest earned on advances to customers with common directorship 7,934 - Donation to The Kidney Centre 26.1.1 2,000 2,500 Net gain / (loss) on derivatives (46,721) 83,511 Payment made to Central Depository Company of Pakistan Limited 38.2 24,837 10,303 62 Standard Chartered Annual Report 2013 Notes to the Un-Consolidated Financial Statements For the year ended 31 December 2013
38.1 Net movements in loans and deposits are summarised as follows:
Balance as at Net Net Balance as at 31 December disbursement / repayments / 31 December 2012 deposits withdrawals 2013 Loans and advances ------(Rupees in '000) ------
Key management personnel 102,395 39,416 (51,810) 90,001
Subsidiaries 633,690 7,582,061 (7,892,810) 322,941
Others - 563,913 (533,947) 29,966
Deposits
Group companies 12,734 729,588 (739,413) 2,909
Subsidiaries 71,489 15,249,210 (15,140,854) 179,845
Key management personnel 181,751 824,945 (875,529) 131,167
Others 102,137 48,003,867 (47,684,570) 421,434
38.2 Mr. Mohsin Ali Nathani, CEO of the bank is also Director of Central Depository Company of Pakistan Limited.
39 CAPITAL ADEQUACY RATIO (CAR) DISCLOSURE As at 31 December 2013
Capital Structure
The State Bank of Pakistan through its BSD Circular No.07 of 2009 dated April 15, 2009 requires the minimum paid up capital (net of losses) for all locally incorporated banks to be Rs. 10 billion on December 31, 2013. The paid up capital of the Bank is comfortably in compliance with the SBP requirement.
Furthermore, SBP requires the Bank to maintain prescribed capital to total risk-weighted assets ratios. The capital adequacy ratios of the Bank were subject to the Basel 3 capital adequacy guidelines stipulated by the State Bank of Pakistan through its circular BPRD Circular No.6 of 2013 dated August 15, 2013. These instructions are effective from December 31, 2013 in a phased manner with full implementation intended by December 31, 2019. As of December 31, 2013 the Banks are required to maintain a minimum Common Equity Tier 1 ratio of 5%, Minimum total Tier 1 ratio of 6.5% and total capital adequacy ratio of 10% to total risk weighted assets.
Banking operations are categorised in either the trading book or the banking book, and risk-weighted assets are determined according to specified requirements that seek to reflect the varying levels of risk attached to assets and off-balance sheet exposures.
The Banks regulatory capital is analysed into three tiers, with total Tier 1 capital being the sum of CET1 and ADT1 below:
Common Equity Tier I capital (CET1), which includes fully paid up capital (including the bonus shares), balance in share premium account, general reserves, statutory reserves as disclosed on the balance sheet and un-appropriated profits (net of accumulated losses, if any). Goodwill and other intangibles are deducted from Tier I capital.
Additional Tier I capital (ADT1), which includes perpetual non-cumulative preference shares and share premium resulting from the same. The Bank did not have any ADT1 as of December 31, 2013
Tier II capital includes sub-ordinated debt, revaluation reserves on assets, exchange translation reserves and impairment allowances that are not held against identified debts. Information on the terms, conditions and other features of the Bank's sub-ordinated debt currently in issue is given in note 16 to these financial statements. There is a restriction on the amount of impairment allowances that are not held against identified debts upto 1.25 percent of credit risk weighted assets.
The capital to risk weighted asset ratio, calculated in accordance with the State Bank of Pakistan's guidelines on capital adequacy using Basel III Standardised approach is presented below, except for figure of 2012 which have been calculated using Basel II standardized approach: 63 Notes to the Un-Consolidated Financial Statements For the year ended 31 December 2013
2013 2012 Amounts Amount subject to Pre - Amount Basel III treatment ------(Rupees in '000) ------S# Common Equity Tier 1 capital (CET1): Instruments and reserves 1 Fully Paid-up Capital/Capital deposited with SBP 38,715,850 - 38,715,850 2 Balance in Share Premium Account 1,036,090 - 1,036,090 3 Reserve for issue of Bonus Shares - - - 4 General/Statutory Reserves 6,008,249 - 3,902,646 5 Gain/(Losses) on derivatives held as Cash Flow Hedge - - - 6 Unappropriated/unremitted profits/ (losses) 6,526,127 - 6,676,380 7 Minority Interests arising from CET1 capital instruments issued to third party by consolidated bank subsidiaries (amount allowed in CET1 capital of the consolidation group) - - - 8 CET 1 before Regulatory Adjustments 52,286,316 - 50,330,966 Common Equity Tier 1 capital: Regulatory adjustments 9 Goodwill (net of related deferred tax liability) 20,780,495 - 26,095,310 10 All other intangibles (net of any associated deferred tax liability) 39,785 - 178,723 11 Shortfall of provisions against classified assets - - 12 Deferred tax assets that rely on future profitability excluding those arising from temporary differences (net of related tax liability) - - - 13 Defined-benefit pension fund net assets - - - 14 Reciprocal cross holdings in CET1 capital instruments - - - 15 Cash flow hedge reserve - - - 16 Investment in own shares/ CET1 instruments - - - 17 Securitization gain on sale - - - 18 Capital shortfall of regulated subsidiaries - - - 19 Deficit on account of revaluation from bank's holdings of property/ AFS - - - 20 Investments in the capital instruments of banking, financial and insurance entities that are outside the scope of regulatory consolidation, where the bank does not own more than 10% of the issued share capital (amount above 10% threshold) - - - 21 Significant investments in the capital instruments issued by banking, financial and insurance entities that are outside the scope of regulatory consolidation (amount above 10% threshold) 343,137 - 343,137 22 Deferred Tax Assets arising from temporary differences (amount above 10% threshold, net of related tax liability) - 2,430,730 - 23 Amount exceeding 15% threshold - - - 24 of which: significant investments in the common stocks of financial entities - - - 25 of which: deferred tax assets arising from temporary differences - - - 26 National specific regulatory adjustments applied to CET1 capital - - - 27 Investment in TFCs of other banks exceeding the prescribed limit - - - 28 Any other deduction specified by SBP (mention details) - - - 29 Regulatory adjustment applied to CET1 due to insufficient AT1 and Tier 2 to cover deductions - - - 30 Total regulatory adjustments applied to CET1 (sum of 9 to 25) 21,163,417 - 26,617,170 Financial statements and notes Common Equity Tier 1 (a) 31,122,899 23,713,796
Additional Tier 1 (AT 1) Capital 31 Qualifying Additional Tier-1 instruments plus any related share premium - - - 32 of which: Classified as equity - - - 33 of which: Classified as liabilities - - - 34 Additional Tier-1 capital instruments issued by consolidated subsidiaries and held by third parties (amount allowed in group AT 1) - - - 35 of which: instrument issued by subsidiaries subject to phase out - - - 36 AT1 before regulatory adjustments - - - Additional Tier 1 Capital: regulatory adjustments - - - 37 Investment in mutual funds exceeding the prescribed limit (SBP specific adjustment) - - - 38 Investment in own AT1 capital instruments - - - 39 Reciprocal cross holdings in Additional Tier 1 capital instruments - - - 40 Investments in the capital instruments of banking, financial and insurance entities that are outside the scope of regulatory consolidation, where the bank does not own more than 10% of the issued share capital (amount above 10% threshold) - - - 41 Significant investments in the capital instruments issued by banking, financial and insurance entities that are outside the scope of regulatory consolidation - - - 42 Portion of deduction applied 50:50 to core capital and supplementary capital based on pre-Basel III treatment which, during transitional period, remain subject to deduction from tier-1 capital - - - 43 Regulatory adjustments applied to Additional Tier 1 due to insufficient Tier 2 to cover deductions - - - 44 Total of Regulatory Adjustment applied to AT1 capital - - - 45 Additional Tier 1 capital - - - 46 Additional Tier 1 capital recognized for capital adequacy (b) - -
Tier 1 Capital (CET1 + admissible AT1) (c=a+b) 31,122,899 23,713,796 64 Standard Chartered Annual Report 2013 Notes to the Un-Consolidated Financial Statements For the year ended 31 December 2013
2013 2012 Amounts Amount subject to Pre - Amount Basel III treatment ------(Rupees in '000) ------Tier 2 Capital 47 Qualifying Tier 2 capital instruments under Basel III 48 Capital instruments subject to phase out arrangement from tier 2 (Pre-Basel III instruments) 2,250,000 - 2,500,000 49 Tier 2 capital instruments issued to third party by consolidated subsidiaries (amount allowed in group tier 2) - 50 of which: instruments issued by subsidiaries subject to phase out - 51 General Provisions or general reserves for loan losses-up to maximum of 1.25% of Credit Risk Weighted Assets 560,462 - 570,652 52 Revaluation Reserves 1,573,682 - 1,898,555 53 of which: Revaluation reserves on Property 1,529,576 - 1,604,430 54 of which: Unrealized Gains/Losses on AFS 44,106 - 294,125 55 Foreign Exchange Translation Reserves - 56 Undisclosed/Other Reserves (if any) - 57 T2 before regulatory adjustments 4,384,144 - 4,969,207 Tier 2 Capital: regulatory adjustments 58 Portion of deduction applied 50:50 to core capital and supplementary capital based on pre-Basel III treatment which, during transitional period, remain subject to deduction from tier-2 capital - - 59 Reciprocal cross holdings in Tier 2 instruments - - 60 Investment in own Tier 2 capital instrument - - 61 Investments in the capital instruments of banking, financial and insurance entities that are outside the scope of regulatory consolidation, where the bank does not own more than 10% of the issued share capital (amount above 10% threshold) - - 62 Significant investments in the capital instruments issued by banking, financial and insurance entities that are outside the scope of regulatory consolidation 343,137 343,137 63 Amount of Regulatory Adjustment applied to T2 capital 343,137 343,137 64 Tier 2 capital (T2) 4,041,007 4,626,070 65 Tier 2 capital recognized for capital adequacy - - 66 Excess Additional Tier 1 capital recognized in Tier 2 capital - - 67 Total Tier 2 capital admissible for capital adequacy (d) 4,041,007 4,626,070 TOTAL CAPITAL (T1 + admissible T2) (e=c+d) 35,163,906 28,339,866
Total Risk Weighted Assets (i=f+g+h) 206,729,831 198,459,934 68 Total Credit Risk Weighted Assets (f) 157,287,541 148,716,098 69 Risk weighted assets in respect of amounts subject to Pre-Basel III Treatment 70 of which: recognized portion of investment in capital of banking, financial and insurance entities where holding is more than 10% of the issued common share capital of the entity 71 of which: deferred tax assets 6,076,826 - 72 of which: Defined-benefit pension fund net assets - - 73 of which: [insert name of adjustment] 74 Total Market Risk Weighted Assets (g) 1,946,241 2,287,656 75 Total Operational Risk Weighted Assets (h) 47,496,049 47,456,180
Capital Ratios and buffers (in percentage of risk weighted assets) 76 CET1 to total RWA (a/i) 15.05% N/A 77 Tier-1 capital to total RWA (c/i) 15.05% 11.95% 78 Total capital to RWA (e/i) 17.01% 14.28% 79 Bank specific buffer requirement (minimum CET1 requirement plus capital conservation buffer plus any other buffer requirement) N/A N/A 80 of which: capital conservation buffer requirement N/A N/A 81 of which: countercyclical buffer requirement N/A N/A 82 of which: D-SIB or G-SIB buffer requirement N/A N/A 83 CET1 available to meet buffers (as a percentage of risk weighted assets) N/A N/A
National minimum capital requirements prescribed by SBP 84 CET1 minimum ratio 5.0% N/A 85 Tier 1 minimum ratio 6.5% N/A 86 Total capital minimum ratio 10.0% 10.0%
Amounts below the thresholds for deduction (before risk weighting) 87 Non-significant investments in the capital of other financial entities 88 Significant investments in the common stock of financial entities 686,273 - 89 Deferred tax assets arising from temporary differences (net of related tax liability) 5,577,334 -
Applicable caps on the inclusion of provisions in Tier 2 90 Provisions eligible for inclusion in Tier 2 in respect of exposures subject to standardized approach (prior to application of cap) 560,462 570,652 91 Cap on inclusion of provisions in Tier 2 under standardized approach 92 Provisions eligible for inclusion in Tier 2 in respect of exposures subject to internal ratings-based approach (prior to application of cap) N/A N/A 93 Cap for inclusion of provisions in Tier 2 under internal ratings-based approach N/A N/A 65 Notes to the Un-Consolidated Financial Statements For the year ended 31 December 2013
2013 2012 39.1 Risk-Weighted Exposures Book Value Risk Adjusted Book Value Risk Adjusted Value Value Credit Risk ------(Rupees in '000) ------
Balance Sheet Items:- Cash and other liquid Assets 174,040,645 133,668 155,689,813 94,268 Money at call - - 500,000 100,000 Investments 221,645 222,092 222,105 222,552 Loans and Advances 170,705,283 104,957,172 158,131,821 102,262,598 Fixed Assets 6,155,222 6,155,222 6,371,213 6,371,213 Other Assets 19,778,926 18,636,473 15,474,116 6,045,897 370,901,721 130,104,627 336,389,068 115,096,528 Off Balance Sheet items Loan Repayment Guarantees 18,611,939 13,139,828 35,427,753 21,482,576 Purchase and Resale Agreements - - - - Performance Bonds etc 20,413,724 9,802,453 16,588,532 6,961,322 Revolving underwriting Commitments - - - - Stand By Letters of Credit 4,785,678 2,925,700 4,209,396 3,699,050 Outstanding Foreign Exchange Contracts 2,913,875 1,314,933 2,442,556 1,476,623 46,725,216 27,182,914 58,668,237 33,619,571 Credit risk-weighted exposures 157,287,541 148,716,099
Market Risk General market risk 1,344,624 1,636,712 Specific market Risk - - Foreign Exchange Risk 601,617 650,944 Market risk-weighted exposures 1,946,241 2,287,656
Operational Risk 47,496,048 47,456,180
Total Risk-Weighted Exposures 206,729,830 198,459,935
39.2 Capital Structure Reconciliation Balance sheet as Under regulatory in published scope of financial consolidation 39.2.1 statements 2013 2013 ------(Rupees in '000) ------Assets Cash and balances with treasury banks 32,331,083 32,331,083 Financial statements and notes Balanced with other banks 1,451,558 1,451,558 Lending to financial institutions 22,158,840 22,158,840 Investments 146,686,716 146,686,716 Advances 135,495,032 135,495,032 Operating fixed assets 6,155,222 6,155,222 Deferred tax assets - 5,577,334 Other assets 55,159,831 55,159,831 Total assets 399,438,282 405,015,616
Liabilities & equity Bills payable 6,540,213 6,540,213 Borrowings 16,566,175 16,566,175 Deposits and other accounts 296,556,991 296,556,991 Sub-ordinated loans 2,500,000 2,500,000 Liabilities against assets subject to finance lease - - Deferred tax liabilities 118,753 5,696,087 Other liabilities 21,427,133 21,427,133 Total liabilities 343,709,265 349,286,599
Share capital / Head office capital account 38,715,850 38,715,850 Reserves 7,044,339 7,044,339 Unappropriated / Unremitted profit/ (losses) 6,526,127 6,526,127 Minority Interest - - Surplus on revaluation of assets 3,442,701 3,442,701 Total liabilities & equity 399,438,282 405,015,616 66 Standard Chartered Annual Report 2013 Notes to the Un-Consolidated Financial Statements For the year ended 31 December 2013
Balance sheet as 39.2.2 in published Under regulatory financial scope of Reference statements consolidation 2013 2013 ------(Rupees in '000) ------Assets Cash and balances with treasury banks 32,331,083 32,331,083 Balanced with other banks 1,451,558 1,451,558 Lending to financial institutions 22,158,840 22,158,840 Investments 146,686,716 146,686,716 of which: Non-significant capital investments in capital of other financial institutions exceeding 10% threshold - - a of which: significant capital investments in financial sector entities exceeding regulatory threshold 343,137 343,137 b of which: Mutual Funds exceeding regulatory threshold - - c of which: reciprocal crossholding of capital instrument - - d of which: others (mention details) - - e Advances 135,495,032 135,495,032 shortfall in provisions/ excess of total EL amount over eligible f provisions under IRB general provisions reflected in Tier 2 capital 560,462 560,462 g Fixed Assets 6,155,222 6,155,222 Deferred Tax Assets - 5,577,334 of which: DTAs excluding those arising from temporary differences - - h of which: DTAs arising from temporary differences exceeding regulatory threshold - 2,430,730 i Other assets 55,159,831 55,159,831 of which: Goodwill 26,095,310 26,095,310 j of which: Intangibles 126,607 126,607 k of which: Defined-benefit pension fund net assets - - l Total assets 399,438,282 405,015,616
Liabilities & Equity Bills payable 6,540,213 6,540,213 Borrowings 16,566,175 16,566,175 Deposits and other accounts 296,556,991 296,556,991 Sub-ordinated loans 2,500,000 2,500,000 of which: eligible for inclusion in AT1 - - m of which: eligible for inclusion in Tier 2 2,250,000 2,250,000 n Liabilities against assets subject to finance lease - - Deferred tax liabilities 118,753 5,696,087 of which: DTLs related to goodwill - 5,314,815 o of which: DTLs related to intangible assets - 86,822 p of which: DTLs related to defined pension fund net assets - 12,413 q of which: other deferred tax liabilities - 282,037 r Other liabilities 21,427,133 21,427,133 Total liabilities 343,709,265 349,286,599
Share capital 39,751,940 39,751,940 of which: amount eligible for CET1 39,751,940 39,751,940 s of which: amount eligible for AT1 - - t Reserves 6,008,249 6,008,249 of which: portion eligible for inclusion in CET1(provide breakup) 6,008,249 6,008,249 u of which: portion eligible for inclusion in Tier 2 6,008,249 6,008,249 v Unappropriated profit/ (losses) 6,526,127 6,526,127 w Minority Interest - - of which: portion eligible for inclusion in CET1 - - x of which: portion eligible for inclusion in AT1 - - y of which: portion eligible for inclusion in Tier 2 - - z Surplus on revaluation of assets 3,442,701 3,442,701 of which: Revaluation reserves on Property 3,378,993 3,378,993 aa of which: Unrealized Gains/Losses on AFS 63,708 63,708 In case of Deficit on revaluation (deduction from CET1) - - ab Total liabilities & Equity 399,438,282 405,015,616 67 Notes to the Un-Consolidated Financial Statements For the year ended 31 December 2013
Component of Source based on regulatory capital reference number from reported by bank step 2 (amount in thousand PKR) Basel III Disclosure Template (with added column) 39.2.3 Common Equity Tier 1 capital (CET1): Instruments and reserves 1 Fully Paid-up Capital/ Capital deposited with SBP 38,715,850 (s) 2 Balance in Share Premium Account 1,036,090 3 Reserve for issue of Bonus Shares - 4 General/ Statutory Reserves 6,008,249 (u) 5 Gain/(Losses) on derivatives held as Cash Flow Hedge - 6 Unappropriated/unremitted profits/(losses) 6,526,127 (w) 7 Minority Interests arising from CET1 capital instruments issued to third party by consolidated bank subsidiaries (amount allowed in CET1 capital of the consolidation group) - (x) 8 CET 1 before Regulatory Adjustments 52,286,316 Common Equity Tier 1 capital: Regulatory adjustments 9 Goodwill (net of related deferred tax liability) 20,780,495 (j) - (o) 10 All other intangibles (net of any associated deferred tax liability) 39,785 (k) - (p) 11 Shortfall of provisions against classified assets - (f)
12 Deferred tax assets that rely on future profitability excluding those arising from temporary differences (net of related tax liability) - {(h) - (r} * x% 13 Defined-benefit pension fund net assets - {(l) - (q)} * x% 14 Reciprocal cross holdings in CET1 capital instruments - (d) 15 Cash flow hedge reserve - - 16 Investment in own shares/ CET1 instruments - - 17 Securitization gain on sale 18 Capital shortfall of regulated subsidiaries - - 19 Deficit on account of revaluation from bank's holdings of property/ AFS - (ab) 20 Investments in the capital instruments of banking, financial and insurance entities that are outside the scope of regulatory consolidation, where the bank does not own more than 10% of the issued share capital (amount above 10% threshold) - (a) - (ac) - (ae) 21 Significant investments in the capital instruments issued by banking, financial and insurance entities that are outside the scope of regulatory consolidation (amount above 10% threshold) 343,137 (b) - (ad) - (af) 22 Deferred Tax Assets arising from temporary differences (amount above 10% threshold, net of related tax liability) - (i) 23 Amount exceeding 15% threshold - - 24 of which: significant investments in the common stocks of financial entities - - 25 of which: deferred tax assets arising from temporary differences - - 26 National specific regulatory adjustments applied to CET1 capital - - 27 Investment in TFCs of other banks exceeding the prescribed limit - - Financial statements and notes 28 Any other deduction specified by SBP (mention details) - - 29 Regulatory adjustment applied to CET1 due to insufficient AT1 and Tier 2 to cover deductions - - 30 Total regulatory adjustments applied to CET1 (sum of 9 to 25) 21,163,417 Common Equity Tier 1 31,122,899
Additional Tier 1 (AT 1) Capital 31 Qualifying Additional Tier-1 instruments plus any related share premium - - 32 of which: Classified as equity - (t) 33 of which: Classified as liabilities - (m) 34 Additional Tier-1 capital instruments issued by consolidated subsidiaries and held by third parties (amount allowed in group AT 1) - (y) 35 of which: instrument issued by subsidiaries subject to phase out - - 36 AT1 before regulatory adjustments - - Additional Tier 1 Capital: regulatory adjustments 37 Investment in mutual funds exceeding the prescribed limit (SBP specific adjustment) - - 38 Investment in own AT1 capital instruments - - 39 Reciprocal cross holdings in Additional Tier 1 capital instruments - - 40 Investments in the capital instruments of banking, financial and insurance entities that are outside the scope of regulatory consolidation, where the bank does not own more than 10% of the issued share capital (amount above 10% threshold) - (ac) 41 Significant investments in the capital instruments issued by banking, financial and insurance entities that are outside the scope of regulatory consolidation - (ad) 42 Portion of deduction applied 50:50 to core capital and supplementary capital based on pre-Basel III treatment which, during transitional period, remain subject to deduction from tier-1 capital - - 68 Standard Chartered Annual Report 2013 Notes to the Un-Consolidated Financial Statements For the year ended 31 December 2013
Component of Source based on regulatory capital reference number from reported by bank step 2 (amount in thousand PKR) 43 Regulatory adjustments applied to Additional Tier 1 due to insufficient Tier 2 to cover deductions - - 44 Total of Regulatory Adjustment applied to AT1 capital - - 45 Additional Tier 1 capital - - 46 Additional Tier 1 capital recognized for capital adequacy - -
Tier 1 Capital (CET1 + admissible AT1) 31,122,899
Tier 2 Capital 47 Qualifying Tier 2 capital instruments under Basel III - 48 Capital instruments subject to phase out arrangement from tier 2 (Pre-Basel III instruments) 2,250,000 (n) 49 Tier 2 capital instruments issued to third party by consolidated subsidiaries (amount allowed in group tier 2) - (z) 50 of which: instruments issued by subsidiaries subject to phase out - - 51 General Provisions or general reserves for loan losses-up to maximum of 1.25% of Credit Risk Weighted Assets 560,462 (g) 52 Revaluation Reserves eligible for Tier 2 1,573,682 53 of which: portion pertaining to Property 1,529,576 portion of (aa) 54 of which: portion pertaining to AFS securities 44,106 55 Foreign Exchange Translation Reserves - (v) 56 Undisclosed/Other Reserves (if any) - 57 T2 before regulatory adjustments 4,384,144 Tier 2 Capital: regulatory adjustments 58 Portion of deduction applied 50:50 to core capital and supplementary capital based on pre-Basel III treatment which, during transitional period, remain subject to deduction from tier-2 capital 343,137 - 59 Reciprocal cross holdings in Tier 2 instruments - - 60 Investment in own Tier 2 capital instrument - - 61 Investments in the capital instruments of banking, financial and insurance entities that are outside the scope of regulatory consolidation, where the bank does not own more than 10% of the issued share capital (amount above 10% threshold) - (ae) 62 Significant investments in the capital instruments issued by banking, financial and insurance entities that are outside the scope of regulatory consolidation - (af) 63 Amount of Regulatory Adjustment applied to T2 capital - - 64 Tier 2 capital (T2) 4,041,007 65 Tier 2 capital recognized for capital adequacy 4,041,007 66 Excess Additional Tier 1 capital recognized in Tier 2 capital - 67 Total Tier 2 capital admissible for capital adequacy 4,041,007 TOTAL CAPITAL (T1 + admissible T2) 35,163,906 69 Notes to the Un-Consolidated Financial Statements For the year ended 31 December 2013
39.3 Disclosure template for main features of regulatory capital instruments
Main Features Common Shares TFCs
1 Issuer Standard Chartered Bank (Pakistan) Limited Standard Chartered Bank (Pakistan) Limited 2 Unique identifier (eg. KSE Symbol or Bloomberg identifier etc.) SCBPL SCBPL 3 Governing law(s) of the instrument Companies Ordinance, 1984/ Banking Companies Ordinance, 1984/ Banking Companies Ordinance, 1962 Companies Ordinance, 1962/BSD Circular 8 of 2006
Regulatory treatment 4 Transitional Basel III rules Not applicable Tier 2 5 Post-transitional Basel III rules Not applicable Ineligible 6 Eligible at solo/ group/ group & solo Solo and Group Solo and Group 7 Instrument type Ordinary shares Other Tier 2 (Subordinated Debt) 8 Amount recognized in regulatory capital (Currency in PKR thousands, as of reporting date) 38,715,850 2,250,000 9 Par value of instrument 38,715,850 2,500,000 10 Accounting classification Shareholders' equity Liability 11 Original date of issuance Dec 2006 June 2002 12 Perpetual or dated Perpetual Dated 13 Original maturity date Not applicable 31-Dec-22 14 Issuer call subject to prior supervisory approval No Yes 15 Optional call date, contingent call dates and redemption amount Not applicable May be called, subject to regulatory approval, at any time after 60th month from the issuance date 16 Subsequent call dates, if applicable Not applicable Not applicable
Coupons / dividends 17 Fixed or floating dividend/ coupon Variable/Floating Floating 18 Coupon rate and any related index/ benchmark Not applicable 6 M KIBOR + 0.75% pa 19 Existence of a dividend stopper Not applicable No 20 Fully discretionary, partially discretionary or mandatory Fully Discretionary Mandatory 21 Existence of step up or other incentive to redeem No No 22 Noncumulative or cumulative Noncumulative Cumulative 23 Convertible or non-convertible Nonconvertible Nonconvertible 24 If convertible, conversion trigger (s) Not applicable Not applicable 25 If convertible, fully or partially Not applicable Not applicable 26 If convertible, conversion rate Not applicable Not applicable 27 If convertible, mandatory or optional conversion Not applicable Not applicable 28 If convertible, specify instrument type convertible into Not applicable Not applicable 29 If convertible, specify issuer of instrument it converts into Not applicable Not applicable
30 Write-down feature Not applicable Not applicable Financial statements and notes 31 If write-down, write-down trigger(s) Not applicable Not applicable 32 If write-down, full or partial Not applicable Not applicable 33 If write-down, permanent or temporary Not applicable Not applicable 34 If temporary write-down, description of write-up mechanism Not applicable Not applicable 35 Position in subordination hierarchy in liquidation (specify instrument type immediately senior to instrument Subordinated debt/TFCs Creditors including Depositors 36 Non-compliant transitioned features No Yes 37 If yes, specify non-compliant features No Absence of point of non-viability clause
39.4 CAPITAL-ASSESSMENT AND ADEQUACY BASEL III SPECIFIC
39.4.1Scope of Applications
The Basel 3 framework is applicable to the Bank both at the consolidated level and also on standalone basis. Subsidiaries are included while calculating Consolidated Capital Adequacy ratio of the Bank using full consolidation method. The Standardized Approach is used by the Bank for calculating the Capital Adequacy ratio for Credit, Market and Operational Risk. 70 Standard Chartered Annual Report 2013 Notes to the Un-Consolidated Financial Statements For the year ended 31 December 2013
39.4.2Capital Structure
During 2012, the Bank issued unsecured, subordinated TFCs of Rs. 2,500 million by way of private placement. The instrument was issued at 0.75% above KIBOR to support the capital base of the Bank and is for a tenor of 10 years. The instrument is structured to redeem in two equal semi-annual instalments of 50% of the issue amount in 2022. The Bank may however call the TFC subject to prior approval of the State Bank, on any profit payment date after the 60th month from the issuance date. The instrument is also subject to a lock-in clause meaning neither principal nor profit may be paid (even at maturity) if such payment means that the Bank falls below or remains below its minimum capital requirements. The instrument is currently rated at AAA.
The instrument is classified as a liability and is subordinated to payment of principal and profit to all other indebtedness of the Bank, including deposits.
For further details of the capital instrument currently part of Tier 2 capital, please refer Note 16.
39.5 Capital Adequacy
The Banks capital management approach is driven by its desire to maintain a strong capital base to support the development of its business, to meet regulatory capital requirements at all times and to maintain good credit ratings, maximising shareholder value and at the same time maintaining investor, creditor and market confidence.
The capital position is reviewed and monitored by the Asset and Liability Committee (ALCO) of the Bank. Regular reviews help to ensure that adequate levels of capital and an optimum mix of the different components of capital are maintained by the Bank to support the strategy. This is integrated with the Banks annual planning process that takes into consideration business growth assumptions across products and business segments and the related impact on capital resources.
The following matters are taken into account while reviewing the Bank's capital position:
a) current regulatory capital requirements and our assessment of future standards; b) demand for capital due to business growth forecasts; c) forecasted demand for capital to support credit ratings and as a signalling tool to the market; d) available supply of capital and capital-raising options
For calculation of Capital Adequacy Ratio, the Bank adheres to the calculation of capital requirements for credit, market and operational risk as per the guidelines of SBP.
For credit risk, the Bank uses the 'Standardized Approach'. The Bank uses reputable and SBP approved rating agencies (ECAIs) for deriving risk weights for specific credit exposures. These are consistently applied across the Bank's credit portfolio for both on and off balance sheet exposures. The ECAIs used for rating various types of exposures are tabled in note 39.6 to these financial statements.
For the purposes of Credit Risk Mitigation under the 'Standardised Approach', the Bank follows the instructions laid down by SBP vide their Circular No. 08 dated 27 June 2006 with regard to eligibility of collaterals, valuation and management. Where a transaction is secured by an eligible collateral and meets the eligibility criteria and minimum requirements as laid down by SBP, the Bank reduces its exposure under that particular transaction by taking into account the risk mitigating effect of the collateral for the calculation of capital requirement. Collaterals used include: Government of Pakistan guarantees, Inter-group guarantees, margins / liens and saving certificates.
The Bank calculates its capital requirement for market risk in its portfolio, based on the methodology provided by SBP which takes account of specific and general market risk capital charge for interest rate risk using the duration method.
For calculation of operational risk capital charge, the business activities of the Bank are divided into eight business lines: corporate finance, trading and sales, retail banking, commercial banking, payments and settlement, agency services, asset management and retail brokerage. The Bank's operations are mapped into these eight business lines as per the criteria laid down by SBP vide Circular No 08 dated 27 June 2006.
Within each business line, gross income is the broad indicator that serves as a proxy for the scale of business operations and thus the likely scale of operational risk exposure within each of these business lines. The capital charge for each business line is calculated by multiplying gross income by beta factors assigned by SBP to that business line. Beta serves as a proxy for the industry-wide relationship between the operational risk loss experience for a given business line and the aggregate level of gross income for that business line.
The total capital charge is calculated as the three-year average of the simple summation of the regulatory capital charges across each of the business lines in each year.
The 'Standardised Approach' is preferred over the 'Basic Indicator Approach' so as to arrive at a capital charge that is reflective of the risks associated with each of the Bank's business lines.
The capital requirements for the major risk categories are indicated below: 71 Notes to the Un-Consolidated Financial Statements For the year ended 31 December 2013
Capital Requirements Risk Weighted Assets Credit Risk 2013 2012 2013 2012 ------Rupees in '000 ------Portfolios subject to standardized approach (Simple) Government of Pakistan and State Bank of Pakistan 13,366 9,426 133,668 94,268 Public Sector Entities 188,006 380,173 1,880,062 3,801,735 Banks 1,866,115 1,782,358 18,661,157 17,823,581 Corporate Portfolio 9,804,021 10,180,305 98,040,214 101,803,053 Retail Portfolio 943,414 822,915 9,434,148 8,229,158 Residential Mortgage Finance 104,318 125,269 1,043,186 1,252,693 Past Due Portfolio 308,131 307,194 3,081,318 3,071,948 All other Risk Weighted Assets 2,479,169 1,241,710 24,791,695 12,417,110 Equity Exposure Risk in the Banking Book
Equity portfolio subject to market-based approaches Under simple risk weight method 22,209 22,255 222,092 222,552 Market Risk
Capital Requirement for portfolios subject to Standardized Approach Interest rate risk 134,462 163,671 1,344,624 1,636,712 Equity position risk etc. 60,161 65,094 601,617 650,944
Operational Risk
Capital Requirement for operational risks 4,749,604 4,745,618 47,496,048 47,456,180 TOTAL 20,672,976 19,845,988 206,729,829 198,459,934
Capital Adequacy Ratio 2013 2012
Total eligible regulatory capital held (Note: 39.1) (e) 35,163,907 28,339,866
Total Risk Weighted Assets (Note: 39.1) (i) 206,729,831 198,459,934
Capital Adequacy Ratio (e) / (i) 17.01% 14.28% Financial statements and notes 39.6 Types of exposures and ECAI's used Corporate Banks Sovereigns
JCR - VIS aaa PACRA aaa STANDARD AND POORS aaa MOODY'S aaa FITCH aaa
The Bank adheres to the mapping instructions issued by SBP on the Revised Regulatory Capital Framework under Basel II, issued vide BSD Circular No. 8 of 2006 dated 27 June 2006, vide BSD Circular Letter No. 09 of 2007 dated 24 August 2007, vide BSD Letter No. BSD/BAI-2/201/1141/2009 dated 2 December 2009 and vide BSD Circular No. 5 of 2010 dated 5 October 2010 with regard to credit ratings to be used. These are as follows: 72 Standard Chartered Annual Report 2013 Notes to the Un-Consolidated Financial Statements For the year ended 31 December 2013
LONG-TERM RATING GRADES MAPPING
Risk Standard & Poors Moodys Investors Fitch Ratings PACRA JCR VIS Weightage Ratings Services Services 20% AAA Aaa AAA AAA A A A AA+ Aa1 AA+ AA+ A A + AA Aa2 AA AA A A AA- Aa3 AA- AA- A A - 50% A+ A1 A+ A+ A + A A2 A A A A- A3 A- A- A - 100% BBB+ Baa1 BBB+ BBB+ BBB+ BBB Baa2 BBB BBB B B B BBB- Baa3 BBB- BBB- BBB- 100% BB+ Ba1 BB+ BB+ B B + BB Ba2 BB BB B B BB- Ba3 BB- BB- B B - 150% B+ B1 B+ B+ B + B B2 B B B B- B3 B- B- B - 150% CCC+ Caa1 CCC+ CCC+ CCC+ CCC Caa2 CCC CCC C C C CCC- Caa3 CCC- CCC- CCC- CC Ca CC CC C C C C C C C D D D D
SHORT-TERM RATING GRADES MAPPING
Risk Standard & Poors Moodys Investors Fitch Ratings PACRA JCR VIS Weightage Ratings Services Services 20% A-1+ P-1 F1+ A-1 A - 1 A-1 F1 50% A-2 P-2 F2 A-2 A - 2 100% A-3 P-3 F3 A-3 A - 3 150% B NP B Others Others B-1 C B-2 D B-3 C 73 Notes to the Un-Consolidated Financial Statements For the year ended 31 December 2013
40. RISK MANAGEMENT
Through its risk management structure, the Bank seeks to manage efficiently the core risks: credit, market, country, and liquidity risk. These arise directly through the Banks commercial activities whilst compliance and regulatory risk, operational risk and reputational risks are normal consequences of any business undertaking.
The basic principles of risk management followed by the Bank include:
Balancing risk and return
Risk is taken in line with the requirements of the Banks stakeholders. Risk should be taken within the Bank's risk appetite, consistent with the approved strategy. Any such risks are avoided which have a material probability of causing financial distress to the Bank or its clients or customers.
Responsibility
Given the Bank is in the business of taking risk, it is everyones responsibility to ensure that risk taking is both disciplined and focused. The Bank takes account of its social responsibilities and its commitment to customers in taking risk to produce a return.
Accountability
Risk is taken only within agreed authorities and where there is appropriate infrastructure and resource. All risk taking must be transparent, controlled and reported.
Anticipation
The Bank looks to anticipate future risks and to ensure awareness of all risk.
Competitive Advantage
The Bank seeks to achieve competitive advantage through efficient and effective risk management and control.
Risk management
The Bank aims to implement best practices and have a specialist risk function of international standards, with strength in depth, experience across risk types and economic scenarios.
Ultimate responsibility for the effective management of risk rests with the Companys Board of Directors. Acting within an authority delegated by the Board, the Executive Committee reviews specific risk areas and monitors the activities of the Country Risk Committee (CRC) and the Asset and Liability Committee (ALCO). Financial statements and notes CRC headed by Country Chief Risk Officer (CCRO), through authority delegated by the Board through the Banks Executive Committee, is responsible for credit risk, market risk, operational risk, compliance risk and regulatory risk, legal risk and reputational risk. ALCO, through authority delegated by the Board through the Banks Executive Committee, is responsible for management of the Bank's liquidity, capital adequacy and structural foreign exchange risk. The Pension Executive Committee, through authority delegated by the Board through the Bank's Executive Committee is responsible for management of pension risk.
The day to day responsibility for managing risk rests with CCRO who oversees and manages the risk through a team of managers; Senior Credit Officer responsible for credit risk in Wholesale Bank, Country Credit Head responsible for credit risk in Consumer Bank (including SME), Head of Special Assets Management responsible for remedial risk management, Head of Credit Risk Controls responsible for collateral management, security documentation, credit MIS and controls, Head of Market Risk responsible for liquidity risk and risks associated with price movements, arising from interest and exchange rate movements and Head of Operational Risk responsible for enterprise wide operations. The Bank has established policies, procedures, processes, and controls and have provided the Risk team adequate support by way of risk systems and tools for measuring and reporting risk for monitoring, controlling, reviewing and managing risk.
40.1 Credit risk
Credit risk is the risk that a counter party will not settle its obligations in accordance with agreed terms. Credit exposures may arise from lending, trade finance, securities and derivative exposures. Credit exposures include both individual borrowers and groups of connected counterparties and portfolios in the banking and trading books. 74 Standard Chartered Annual Report 2013 Notes to the Un-Consolidated Financial Statements For the year ended 31 December 2013
The Board of Directors has delegated down the authority to CRC through the Banks Executive Committee to establish risk appetite and make recommendations to the Board for approval of risk appetite and policies for managing credit risk. The CEO and the Executive Committee in turn rely on CCRO and the Risk Committee to determine these and recommend for their support and Board's approval. The CRC is also delegated down by the BOD responsibility to delegate credit authorities to independent Risk Officers.
Credit risk appetite is established through business strategy papers and underwriting standards by the business managers, which are approved by the Board once recommended, and supported by the Executive Committee.
Specific procedures for managing credit risk within Wholesale and Consumer (including SME) are determined at the Senior Credit Officer and Country Credit Head levels for their respective jurisdictions with specific policies and procedures being adapted to different risk environments and business goals. Credit analysis includes review of facility details, credit grade determination and financial spreading / ratio analysis. Portfolio review, Early Alerts and Stress Testing based on scenario analysis is a combined responsibility of Client Relationship and Risk and Finance function. Client relationship origination and credit approval roles are clearly segregated throughout Wholesale and Consumer Banking segment.
Credit concentration risk is governed by specific policy, the adherence to which is managed by the Country Risk Committee (CRC). Credit concentration risk is principally managed based on three components: single name borrower exposure, industry concentrations and product concentration. In addition to the SBP specified prudential limits on single or group exposures, limits are also established by the CCRO and approved by CRC in line with the Credit Reference Level framework (CRL).
40.1.1Wholesale Banking
Within the Wholesale Banking business, a alpha numerical risk grading system is used for quantifying the risk associated with a counter-party. The grading is based on a probability of default measure, with customers analysed against a range of quantitative and qualitative measures. Expected Loss is used for further assessment of individual exposures and portfolio analysis. There is a clear segregation of duties with loan applications being prepared separately from the approval chain.
40.1.2Consumer Banking
For Consumer Banking, program based standard credit application forms are generally used, which are processed in central units for different products and market segments. Consumer Banking Analytics team has developed Bureau scores and uses Bureau data for portfolio monitoring and for underwriting new business. Medium enterprises relationship based business of Consumer Bank operates much like Wholesale banking with numerical risk grading system for quantifying counter party risk. As with Wholesale Banking, origination and approval roles are segregated. 75 Notes to the Un-Consolidated Financial Statements For the year ended 31 December 2013
2013 40.1.3 Segment by class of business Advances - Gross Deposits Contingencies and Commitments (Rupees Percent (Rupees Percent (Rupees in '000) in '000) in '000) Percent
Chemical and pharmaceuticals 9,478,049 6.01 4,389,750 1.48 3,039,547 3.88 Agri business 8,134,640 5.16 311,040 0.10 40,712 0.05 Textile 32,969,511 20.92 1,386,837 0.47 2,145,350 2.74 Communication 5,417,355 3.44 12,266,053 4.14 1,550,752 1.98 Insurance - - 1,160,833 0.39 - - Telecommunications and information technology - - 1,895,336 0.64 52,109 0.07 Cement 2,915,894 1.85 42,081 0.01 217,895 0.28 Sugar 2,946,934 1.87 4,085 - 95,262 0.12 Automobile and transportation equipment 2,896,457 1.84 634,871 0.21 1,671,820 2.13 Transportation 4,005,359 2.54 1,889,852 0.64 4,024,157 5.13 Financial 2,515,045 1.60 1,337,529 0.45 27,137,097 34.60 Electronics and electrical appliances 3,592,146 2.28 4,521,543 1.52 3,760,774 4.79 Production and transmission of energy 23,283,078 14.78 11,959,338 4.03 18,088,312 23.06 Shoes and leather garments 2,966,675 1.88 43,929 0.01 510,006 0.65 Individuals 16,760,590 10.64 194,286,431 65.51 1,369 - Others 39,691,901 25.19 60,427,483 20.40 16,102,280 20.52 157,573,634 100.00 296,556,991 100.00 78,437,442 100.00
2012 Contingencies and Advances - Gross Deposits Commitments (Rupees (Rupees Percent (Rupees Percent Percent in '000) in '000) in '000) Chemical and pharmaceuticals 11,396,979 7.14 4,164,613 1.56 4,308,516 5.80 Agri business 5,714,958 3.58 193,476 0.07 34,181 0.05 Textile 29,111,057 18.23 938,788 0.35 1,655,619 2.23 Communication 1,092,990 0.68 15,083,632 5.66 2,437,299 3.28 Insurance 82,756 0.05 1,771,289 0.66 - - Financial statements and notes Telecommunications and information technology 5,886,625 3.69 2,457,249 0.92 44,628 0.06 Cement 5,482,201 3.43 15,671 0.01 823,837 1.11 Sugar 2,784,973 1.74 1,333 0.00 90,292 0.12 Automobile and transportation equipment 2,439,499 1.53 849,140 0.32 1,171,576 1.58 Transportation 3,046,874 1.91 3,466,291 1.29 1,373,578 1.86 Financial 2,683,563 1.68 1,873,085 0.70 28,726,780 38.65 Electronics and electrical appliances 1,755,137 1.10 3,487,607 1.31 4,975,420 6.69 Production and transmission of energy 24,144,407 15.12 11,080,729 4.16 16,017,525 21.55 Shoes and leather garments 2,542,747 1.59 94,264 0.04 153,727 0.21 Individuals 17,222,691 10.79 172,525,710 64.70 1,369 0.00 Others 44,258,610 27.72 48,667,184 18.25 12,514,751 16.84 159,646,067 100.00 266,670,061 100.00 74,329,098 100.00 76 Standard Chartered Annual Report 2013 Notes to the Un-Consolidated Financial Statements For the year ended 31 December 2013
40.1.4 Details of non-performing advances and specific provisions by class of business segment 2013 2012 Classified Specific Classified Specific Advances Provision Advances Provision held held ------(Rupees in '000) ------Chemical and pharmaceuticals 310,625 290,825 335,092 283,858 Agri business 102,997 102,997 16,799 15,967 Textile 7,829,032 7,651,539 7,617,809 7,547,686 Footwear and Leather garments 5,997 5,997 16,564 15,645 Automobile and transportation equipment 316,939 316,939 358,068 353,970 Financial 49,326 49,326 49,326 49,326 Production and transmission of energy 222,332 222,332 127,708 127,708 Individuals 4,678,803 3,672,466 5,684,022 4,493,025 Others 11,139,313 9,205,720 12,919,565 11,004,085 24,655,364 21,518,141 27,124,953 23,891,270
40.1.5 Segment by sector 2013 Advances Deposits Contingencies and Commitments (Rupees % (Rupees % (Rupees % in '000) in '000) in '000)
Public / Government 11,233,776 7.13% 4,593,589 1.55% 8,400,266 10.71% Private 146,339,858 92.87% 291,963,402 98.45% 70,037,176 89.29% 157,573,634 100% 296,556,991 100% 78,437,442 100%
2012 Advances Deposits Contingencies and Commitments (Rupees (Rupees % (Rupees % % in '000) in '000) in '000)
Public / Government 10,826,928 6.78% 4,138,018 1.55% 3,398,836 4.57% Private 148,819,139 93.22% 262,532,043 98.45% 70,930,262 95.43% 159,646,067 100% 266,670,061 100% 74,329,098 100%
40.1.6 Details of non-performing advances and specific provisions by sector
2013 2012 Classified Specific Classified Specific Advances Provision Advances Provision held held ------(Rupees in '000) ------Public / Government - - - - Private 24,655,364 21,518,141 27,124,953 23,891,270 24,655,364 21,518,141 27,124,953 23,891,270
40.1.7 GEOGRAPHICAL SEGMENT ANALYSIS 2013 Profit Total Net Assets Contingencies before assets employed and taxation employed Commitments ------(Rupees in '000) ------Pakistan 16,144,180 399,438,282 55,729,017 78,437,442 16,144,180 399,438,282 55,729,017 78,437,442
2012 Profit Total Net Assets Contingencies before assets employed and taxation employed Commitments ------(Rupees in '000) ------Pakistan 9,108,265 388,872,017 54,292,294 74,329,098 9,108,265 388,872,017 54,292,294 74,329,098 77 Notes to the Un-Consolidated Financial Statements For the year ended 31 December 2013
40.2 Market Risk
The Bank recognises market risk as the exposures created by potential changes in market prices and rates. Market risk exposures arise primarily from interest rate and foreign exchange related contracts. The Bank has no significant exposure to equity and commodity price risk.
Market risk is managed by the Head of Market Risk reporting directly to the CCRO, who agrees policies and procedures and levels of risk appetite in terms of Value at Risk ("VaR"). Limits are then proposed by the business within the terms of agreed policy. These are agreed and delegated down by RC under delegated authority from the BOD, and are monitored by the Head of Market Risk as part of an independent risk management function. Policies cover both trading and non- trading books.
In addition to market risk policies, as well as VaR and other market risk limits, independent stress testing of portfolios, factor sensitivity measures and derivatives are also employed as additional risk management tools to manage and hedge market risk exposures. Risk models are periodically back tested against actual results to ensure that pre-determined levels of accuracy are maintained.
40.3 Foreign Exchange Risk
2013 Assets Liabilities Off-balance Net foreign sheet items currency exposure ------(Rupees in '000) ------Pakistan rupee 300,902,879 276,354,687 43,642,526 68,190,718 United States dollar 44,295,260 54,773,814 (36,301,863) (46,780,417) Great Britain pound 6,144,750 6,139,909 (832,886) (828,045) Euro 5,298,447 5,225,455 (3,509,463) (3,436,471) Swiss Franc 19,390 25,064 (123,497) (129,171) Japanese yen 169,777 176,553 (2,172,093) (2,178,869) Others 35,048 42,804 (702,724) (710,480) 356,865,551 342,738,286 - 14,127,265
2012 Assets Liabilities Off-balance Net foreign sheet items currency exposure Financial statements and notes ------(Rupees in '000) ------Pakistan rupee 273,004,524 260,066,108 47,310,939 60,249,355 United States dollar 62,079,954 64,306,661 (41,413,711) (43,640,418) Great Britain pound 4,840,138 4,892,279 (125,476) (177,617) Euro 4,396,617 4,504,075 (2,950,089) (3,057,547) Swiss Franc 22,420 22,483 (27,538) (27,601) Japanese yen 46,712 36,799 (2,211,800) (2,201,887) Others 38,006 24,437 (582,325) (568,756) 344,428,371 333,852,842 - 10,575,529
40.3.1 Currency risk is the risk that the value of a financial instrument will fluctuate due to changes in foreign exchange rates.
40.3.2 The management sets limits on the level of exposure by currency in total, for both overnight and intra day positions which are monitored daily. 78 Standard Chartered Annual Report 2013 Notes to the Un-Consolidated Financial Statements For the year ended 31 December 2013
40.4 MISMATCH OF INTEREST RATE SENSITIVE ASSETS AND LIABILITIES 2013 Exposed to yeid / interest rate risk Effective Total yield / Upto one Over one Over three Over six Over one Over two Over three Over five Over ten Non interest interest month month to months to months to year to years to years to years to years bearing On-balance sheet rate three six months one year two years three years five years ten years financial months instruments Financial instruments ------(Rupees in '000)------Assets Cash and balances with treasury banks - 32,331,083 9,200,051 ------23,131,032 Balances with other banks - 1,451,558 ------1,451,558 Lendings to financial institutions 2.58% 22,158,840 17,103,259 5,055,581 ------Investments 9.78% 146,686,716 19,907,199 77,346,433 7,532,546 8,154,701 18,506,841 13,662,786 953,318 - - 622,892 Advances 10.71% 135,495,032 75,820,047 37,980,257 14,328,011 2,493,027 700,369 696,223 900,336 - - 2,576,762 Other assets - 18,742,322 ------18,742,322 356,865,551 122,030,556 120,382,271 21,860,557 10,647,728 19,207,210 14,359,009 1,853,654 - - 46,524,566 Liabilities Bills payable - 6,540,213 ------6,540,213 Borrowings 7.72% 16,566,175 273,018 9,005,014 4,670,543 11,616 248,880 411,917 222,354 901,512 - 821,321 Deposits and other accounts 5.93% 296,556,991 152,279,754 7,252,214 2,929,526 4,752,001 664,378 398,403 - 1,000 - 128,279,715 Sub-ordinated loans 9.67% 2,500,000 - - 2,500,000 ------Other liabilities - 20,574,907 ------20,574,907 342,738,286 152,552,772 16,257,228 10,100,069 4,763,617 913,258 810,320 222,354 902,512 - 156,216,156 On-balance sheet gap 14,127,265 (30,522,216) 104,125,043 11,760,488 5,884,111 18,293,952 13,548,689 1,631,300 (902,512) - (109,691,590)
Off-balance sheet Financial instruments
Forward Lending Interest Rate Swap 24,805,505 - 5,392,347 112,346 133,333 1,200,000 7,191,278 9,866,196 910,005 - - Foreign Currency option 405,781 380,565 - 25,216 ------Forward Foreign Exchange Contracts 88,259,248 32,131,937 42,531,211 12,493,100 1,103,000 ------113,470,534 32,512,502 47,923,558 12,630,662 1,236,333 1,200,000 7,191,278 9,866,196 910,005 - - Forward Borrowing Interest Rate Swap 23,420,975 - 1,721,484 112,346 3,943,950 10,525,773 4,241,359 1,966,058 910,005 - - Foreign Currency option 405,781 380,565 - 25,216 ------Forward Foreign Exchange Contracts 77,242,740 39,108,124 31,640,920 6,493,696 ------101,069,496 39,488,689 33,362,404 6,631,258 3,943,950 10,525,773 4,241,359 1,966,058 910,005 - - Off-balance sheet gap 12,401,038 (6,976,187) 14,561,154 5,999,404 (2,707,617) (9,325,773) 2,949,919 7,900,138 - - -
Total yield / interest risk sensitivity gap 26,528,303 (37,498,403) 118,686,197 17,759,892 3,176,494 8,968,179 16,498,608 9,531,438 (902,512) - (109,691,590)
Cumulative yield / interest risk sensitivity gap 81,187,794 98,947,686 102,124,180 111,092,359 127,590,967 137,122,405 136,219,893 136,219,893
2012 Exposed to yeid / interest rate risk Effective Total yield / Upto one Over one Over three Over six Over one Over two Over three Over five Over ten Non interest interest month month to months to months to year to years to years to years to years bearing On-balance sheet rate three six months one year two years three years five years ten years financial months instruments Financial instruments ------(Rupees in '000)------
Assets Cash and balances with treasury banks - 31,487,869 7,666,714 ------23,821,155 Balances with other banks - 2,363,144 ------2,363,144 Lendings to financial - institutions 2.93% 19,845,269 17,709,484 1,650,379 485,406 ------Investments 11.18% 131,976,863 14,410,283 16,440,364 1,006,685 84,228,078 4,117,029 6,113,557 4,752,469 - - 908,398 Advances 12.31% 135,184,145 74,094,438 34,343,688 19,566,518 2,779,971 647,644 421,238 667,617 - - 2,663,031 Other assets - 23,571,081 ------23,571,081 344,428,371 113,880,919 52,434,431 21,058,609 87,008,049 4,764,673 6,534,795 5,420,086 - - 53,326,809 Liabilities Bills payable - 6,164,867 ------6,164,867 Borrowings 7.79% 23,399,389 6,804,482 8,124,609 6,011,959 17,473 33,338 373,987 739,952 1,262,585 - 31,004 Deposits and other accounts 6.32% 266,670,061 137,939,898 7,632,326 4,244,037 7,425,298 766,693 669,020 - - - 107,992,789 Sub-ordinated loans 13.06% 2,750,000 - 250,000 2,500,000 ------Other liabilities - 34,868,525 ------34,868,525 333,852,842 144,744,380 16,006,935 12,755,996 7,442,771 800,031 1,043,007 739,952 1,262,585 - 149,057,185 On-balance sheet gap 10,575,529 (30,863,461) 36,427,496 8,302,613 79,565,278 3,964,642 5,491,788 4,680,134 (1,262,585) - (95,730,376)
Off-balance sheet Financial instruments
Forward Lending 37,581,238 - 238,095 1,457,246 16,513,408 577,544 1,600,000 14,446,735 2,748,210 - - Interest Rate Swap 3,370,375 - 1,657,015 1,713,360 ------Foreign Currency option 35,333,170 9,655,486 15,317,400 10,313,487 46,797 ------Forward Foreign Exchange Contracts 76,284,783 9,655,486 17,212,510 13,484,093 16,560,205 577,544 1,600,000 14,446,735 2,748,210 - -
Forward Borrowing 39,231,837 266,262 922,438 183,154 10,588,131 4,462,827 12,696,308 9,250,028 862,689 - - Interest Rate Swap 3,370,375 - 1,657,015 1,713,360 ------Foreign Currency option 33,612,948 19,334,185 10,074,264 4,157,702 46,797 ------Forward Foreign Exchange Contracts 76,215,160 19,600,447 12,653,717 6,054,216 10,634,928 4,462,827 12,696,308 9,250,028 862,689 - - Off-balance sheet gap 69,623 (9,944,961) 4,558,793 7,429,877 5,925,277 (3,885,283) (11,096,308) 5,196,707 1,885,521 - -
Total yield / interest risk sensitivity gap 10,645,152 (40,808,422) 40,986,289 15,732,490 85,490,555 79,359 (5,604,520) 9,876,841 622,936 - (95,730,376)
Cumulative yield / interest risk sensitivity gap 177,867 15,910,357 101,400,912 101,480,271 95,875,751 105,752,592 106,375,528 106,375,528 79 Notes to the Un-Consolidated Financial Statements For the year ended 31 December 2013
40.5 Yield / Interest Rate Risk
Yield risk is the risk of decline in earnings due to adverse movement of the yield curve. Interest rate risk is the risk that the value of financial instruments will fluctuate due to changes in the market interest rates. The Bank is exposed to various risks associated with the effects of fluctuations in the prevailing levels of market interest rates on its financial position and cash flows. The Bank manages this risk by matching the re-pricing of assets and liabilities and off-balance sheet instruments.
40.6 Liquidity Risk
The Bank defines liquidity risk as the potential that the Bank either does not have sufficient liquid financial resources available to meet all its obligations as they fall due, or can only access these financial resources at excessive cost.
Liquidity risk, both short term and structural is monitored through the internal liquidity risk management framework and is managed through the Asset and Liability Committee ("ALCO"). This committee, chaired by the CEO, is responsible for liquidity risk management.
A range of tools are used for the management of liquidity. These comprise commitment and wholesale borrowing guidelines, key balance sheet ratios, medium term funding requirements and day to day monitoring of future cash flows.
In addition, liquidity contingency funding plans are reviewed periodically to ensure that alternative funding strategies are in place and can be implemented on a timely basis to minimize the liquidity risk that may arise due to unforeseen adverse changes in the market place.
A substantial portion of the Banks assets are funded by customer deposits made up of current and savings accounts and other deposits. These customer deposits, which are widely diversified by type and maturity, represent a stable source of funds.
The Bank also maintains significant levels of marketable securities either for compliance with local statutory requirements or as prudential investments of surplus funds.
40.7 Maturities of assets and liabilities - based on contractual maturity of assets and liabilities of the bank
In accordance with the guidelines issued by SBP through BSD Circular Letter No. 3 of 2011 and BSD Circular Letter No. 2 of 2013, Banks are required to disclose maturities of assets and liabilities separately for 'contractual maturities' and 'expected maturities'. The expected maturities are calculated using three (3) years historical balances and identifying "Core" and "Non-Core" balances using monthly volatility analysis. Fixed / intangible assets are presented on the basis of their depreciation / amortisation schedule. Financial statements and notes 80 Standard Chartered Annual Report 2013 Notes to the Un-Consolidated Financial Statements For the year ended 31 December 2013
2013
Total Upto one Over one Over three Over six Over one Over two Over three Over five Over ten month month to months to months to year to years to years to years to years three months six months one year two years three years five years ten years Assets ------(Rupees in '000)------
Cash and balances with treasury banks 32,331,083 32,331,083 ------Balances with other banks 1,451,558 1,451,558 ------Lendings to financial institutions 22,158,840 17,103,259 5,055,581 ------Investments 146,686,716 19,622,173 77,346,433 7,532,546 8,154,701 18,506,841 13,662,786 1,238,343 622,893 - Advances 135,495,032 72,620,636 31,094,099 10,070,612 1,997,751 2,445,495 5,185,294 6,504,275 3,639,485 1,937,385 Other assets 28,937,914 3,840,168 12,431,496 427,145 2,423,670 3,668,938 5,944,729 193,229 8,539 - Operating fixed assets 6,155,222 14,555 29,110 43,664 87,327 230,867 174,655 341,413 786,157 4,447,474 Intangible assets 26,221,917 898 1,793 2,689 5,378 10,755 10,755 21,511 53,483 26,114,655 Deferred tax assets ------399,438,282 146,984,330 125,958,512 18,076,656 12,668,827 24,862,896 24,978,219 8,298,771 5,110,557 32,499,514
Liabilities Bills payable 6,540,213 6,540,213 ------Borrowings 16,566,175 1,094,339 9,005,014 4,670,543 11,616 248,880 411,917 222,354 901,512 - Deposits and other accounts 296,556,991 280,559,469 7,252,214 2,929,526 4,752,001 664,378 398,403 - 1,000 - Sub-ordinated loans 2,500,000 ------2,500,000 - Other liabilities 21,427,133 4,535,985 5,430,533 1,160,744 8,758,598 315,330 258,618 958,786 8,539 - Deferred tax liabilities 118,753 ------118,753 - - 343,709,265 292,730,006 21,687,761 8,760,813 13,522,215 1,228,588 1,068,938 1,299,893 3,411,051 - 55,729,017 (145,745,676) 104,270,751 9,315,843 (853,388) 23,634,308 23,909,281 6,998,878 1,699,506 32,499,514 Net assets Share capital 38,715,850 Reserves 7,044,339 Unappropriated profit 6,526,127 Surplus on revaluation of assets - net 3,442,701 55,729,017
2012
Total Upto one Over one Over three Over six Over one Over two Over three Over five Over ten month month to months to months to year to years to years to years to years three months six months one year two years three years five years ten years ------(Rupees in '000)------Assets
Cash and balances with treasury banks 31,487,869 31,487,869 ------Balances with other banks 2,363,144 2,363,144 ------Lendings to financial ------institutions 19,845,269 17,709,484 1,650,379 485,406 ------Investments 131,976,863 14,409,618 16,440,364 1,006,685 84,228,078 4,117,029 6,113,557 4,752,469 909,063 - Advances 135,184,145 63,558,539 22,746,446 13,708,791 5,065,056 10,732,451 5,204,834 5,910,544 6,521,215 1,736,269 Other assets 33,845,937 211,337 15,745,919 9,615,106 7,326,044 20,764 220,291 520,208 186,268 - Operating fixed assets 6,371,213 15,763 31,527 47,291 94,583 310,946 189,165 371,439 883,508 4,426,991 Intangible assets 26,274,033 629 1,257 1,886 3,772 7,543 7,543 15,088 37,719 26,198,596 Deferred tax assets 1,523,544 ------1,523,544 - - 388,872,017 129,756,383 56,615,892 24,865,165 96,717,533 15,188,733 11,735,390 13,093,292 8,537,773 32,361,856 Liabilities Bills payable 6,164,867 6,164,867 ------Borrowings 23,399,389 6,835,486 8,124,609 6,011,959 17,473 33,338 373,987 739,952 1,262,585 - Deposits and other accounts 266,670,061 245,932,687 7,632,326 4,244,037 7,425,298 766,693 669,020 - - - Sub-ordinated loans 2,750,000 - 250,000 - - - - - 2,500,000 - Other liabilities 35,595,406 579,998 12,001,039 582,518 21,237,283 82,198 140,391 945,994 25,985 - 334,579,723 259,513,038 28,007,974 10,838,514 28,680,054 882,229 1,183,398 1,685,946 3,788,570 - 54,292,294 (129,756,655) 28,607,918 14,026,651 68,037,479 14,306,504 10,551,992 11,407,346 4,749,203 32,361,856 Net assets Share capital 38,715,850 Reserves 4,938,736 Unappropriated profit 6,676,380 Deficit on revaluation of assets - net 3,961,328 54,292,294 81 Notes to the Un-Consolidated Financial Statements For the year ended 31 December 2013
40.8 Maturities of assets and liabilities - based on expected maturity of assets and liabilities of the bank
2013
Total Upto one Over one Over three Over six Over one Over two Over three Over five Over ten month month to months to months to year to years to years to years to years three months six months one year two years three years five years ten years Assets ------(Rupees in '000)------
Cash and balances with treasury banks 32,331,083 32,331,083 ------Balances with other banks 1,451,558 1,451,558 ------Lendings to financial institutions 22,158,840 17,103,259 5,055,581 ------Investments 146,686,716 19,622,173 77,346,433 7,532,546 8,154,701 18,506,841 13,662,786 1,238,343 622,893 - Advances 135,495,032 27,179,491 33,559,124 13,768,149 9,392,824 34,329,005 5,185,294 6,504,275 3,639,485 1,937,385 Other assets 28,937,914 3,840,168 12,431,496 427,145 2,423,670 3,668,938 5,944,729 193,229 8,539 - Operating fixed assets 6,155,222 14,555 29,110 43,664 87,327 230,867 174,655 341,413 786,157 4,447,474 Intangible assets 26,221,917 898 1,793 2,689 5,378 10,755 10,755 21,511 53,483 26,114,655 Deferred tax assets ------399,438,282 101,543,185 128,423,537 21,774,193 20,063,900 56,746,406 24,978,219 8,298,771 5,110,557 32,499,514 Liabilities
Bills payable 6,540,213 6,540,213 ------Borrowings 16,566,175 1,094,339 9,005,014 4,670,543 11,616 248,880 411,917 222,354 901,512 - Deposits and other accounts 296,556,991 27,968,358 14,640,373 14,011,764 26,916,477 212,620,616 398,403 - 1,000 - Sub-ordinated loans 2,500,000 ------2,500,000 - Other liabilities 21,427,133 4,535,985 5,430,533 1,160,744 8,758,598 315,330 258,618 958,786 8,539 - Deferred tax liabilities 118,753 ------118,753 - - 343,709,265 40,138,895 29,075,920 19,843,051 35,686,691 213,184,826 1,068,938 1,299,893 3,411,051 - 55,729,017 61,404,290 99,347,617 1,931,142 (15,622,791) (156,438,420) 23,909,281 6,998,878 1,699,506 32,499,514 Net assets
Share capital 38,715,850 Reserves 7,044,339 Unappropriated profit 6,526,127 Surplus on revaluation of assets - net 3,442,701 55,729,017
2012
Total Upto one Over one Over three Over six Over one Over two Over three Over five Over ten month month to months to months to year to years to years to years to years three months six months one year two years three years five years ten years Assets ------(Rupees in '000)------
Cash and balances with treasury banks 31,487,869 31,487,869 ------Financial statements and notes Balances with other banks 2,363,144 2,363,144 ------Lendings to financial ------institutions 19,845,269 17,709,484 1,650,379 485,406 ------Investments 131,976,863 6,180,831 24,669,151 1,006,685 84,228,078 4,117,029 6,113,557 4,752,469 909,063 - Advances 135,184,145 20,254,272 24,669,151 16,592,849 10,833,171 43,461,840 5,204,834 5,910,544 6,521,215 1,736,269 Other assets 33,845,937 211,337 15,745,919 9,615,106 7,326,044 20,764 220,291 520,208 186,268 - Operating fixed assets 6,371,213 15,763 31,527 47,291 94,583 310,946 189,165 371,439 883,508 4,426,991 Intangible assets 26,274,033 629 1,257 1,886 3,772 7,543 7,543 15,088 37,719 26,198,596 Deferred tax assets 1,523,544 ------1,523,544 - - 388,872,017 78,223,329 66,767,384 27,749,223 102,485,648 47,918,122 11,735,390 13,093,292 8,537,773 32,361,856 Liabilities
Bills payable 6,164,867 6,164,867 ------Borrowings 23,399,389 6,835,486 8,124,609 6,011,959 17,473 33,338 373,987 739,952 1,262,585 - Deposits and other accounts 266,670,061 23,836,795 14,423,041 14,430,109 27,797,441 185,513,655 669,020 - - - Sub-ordinated loans 2,750,000 250,000 ------2,500,000 - Other liabilities 35,595,406 579,998 12,001,039 582,518 21,237,283 82,198 140,391 945,994 25,985 - 334,579,723 37,667,146 34,548,689 21,024,586 49,052,197 185,629,191 1,183,398 1,685,946 3,788,570 - 54,292,294 40,556,183 32,218,695 6,724,637 53,433,451 (137,711,069) 10,551,992 11,407,346 4,749,203 32,361,856 Net assets
Share capital 38,715,850 Reserves 4,938,736 Unappropriated profit 6,676,380 Deficit on revaluation of assets - net 3,961,328 54,292,294 82 Standard Chartered Annual Report 2013 Notes to the Un-Consolidated Financial Statements For the year ended 31 December 2013
40.9 Operational Risk
Operational risk is the risk of a direct or indirect loss being incurred due to an event or action arising from the failure of technology, processes, infrastructure, personnel and impact of external events.
The Country Operational Risk Committee ("CORC") has been established to ensure that an appropriate risk management framework is in place at a grass root level, and to report, monitor and manage operational, social, ethical and environmental risk. The CORC is chaired by the CEO, and CCRO is an active member of this forum.
All business units within the Bank monitor their operational risks using set standards and indicators. Significant issues and exceptions are reported to CORC and are also picked up by the independent Risk function for discussion at the Country Risk Committee chaired by the CCRO. Disaster recovery procedures, business contingency planning, self- compliance assurance and internal audits also form an integral part of the operational risk management process.
41 ISLAMIC BANKING BUSINESS
The Bank is operating with 10 Islamic Banking branches at the end of current period (December 2012: 14 branches).
41.1 Balance Sheet Note 2013 2012 ------(Rupees in '000) ------Assets Cash and balances with treasury banks 1,899,718 1,967,261 Balances with other banks 5,055,581 5,537,533 Due from Financial Institutions - 500,000 Investments 10,848,738 8,685,651 Islamic Financing and Related Assets 41.1.1 27,921,996 18,575,327 Operating fixed assets 196,569 209,301 Other assets 606,873 395,812 46,529,475 35,870,885 Liabilities Bills payable 2,760 10,108 Due to Financial Institutions 1,060,000 1,368,000
Deposits and other accounts Current Accounts 20,042,224 16,020,883 Saving Accounts 11,816,177 10,784,418 Term Deposits 2,721,606 3,200,580 Others - 27,390 Deposit from Financial Institutions -Remunerative 256 206,593 Deposits from Financial Institutions-Non-Remunerative - - 34,580,263 30,239,864 Due to Head Office 5,709,033 449,923 Other liabilities 41.3 130,390 806,046 41,482,446 32,873,941 Net Assets 5,047,029 2,996,944
Represented by: Islamic Banking Fund 200,000 200,000 Unappropriated/ Unremitted profit 4,754,891 2,886,293 4,954,891 3,086,293 Surplus / (deficit) on revaluation of assets - net 92,138 (89,349) 5,047,029 2,996,944 CONTINGENCIES AND COMMITMENTS 21
Remuneration to Shariah Advisor/Board 3,218 1,087
Charity fund Opening balance 20,411 2,023 Additions during the year 4,294 30,064 Payments / utilization during the year (23,634) (11,676) Closing balance 1,071 20,411 83 Notes to the Un-Consolidated Financial Statements For the year ended 31 December 2013
41.1.1 Islamic Mode of Financing Note 2013 2012 ------(Rupees in '000) ------
Murabaha 41.1.1a 11,645,654 5,516,120 Musharaka 41.1.1b 5,597,541 - Diminishing Musharaka 41.1.1c 9,166,725 12,887,191 Istisna 41.1.1d 1,223,843 - Musawammah 41.1.1e 98,850 - Others 41.1.1f 189,383 172,016 27,921,996 18,575,327
41.1.1a Murabaha
Financings/Investments/Receivables 4,971,128 2,834,787 Advances 6,379,093 2,681,333 Assets/Inventories 295,433 - 11,645,654 5,516,120 41.1.1b Musharaka
Financings/Investments/Receivables 5,597,541 - 5,597,541 -
41.1.1c Dimishing Musharaka
Financings/Investments/Receivables 9,166,725 12,887,191 9,166,725 12,887,191
41.1.1d Istisna
Financings/Investments/Receivables 1,223,843 - 1,223,843 -
41.1.1e Musawammah
Financings/Investments/Receivables 98,850 -
98,850 -Financial statements and notes 41.1.1f Others
Financings/Investments/Receivables 189,383 172,016 189,383 172,016 41.2 Profit and Loss
Profit / return earned on financings, investments and placements 3,328,123 3,008,214 Return on deposits and others dues expensed (934,810) (898,256) Net spread earned 2,393,313 2,109,958 (Reversal) / provision against non performing financing (191,960) 172,890 Net spread after provisions 2,201,353 2,282,848
Other income Fees, commission and brokerage income 654,097 765,288 Other income 755 181
Total other income 654,852 765,469 2,856,205 3,048,317 Other expenses Administrative expenses (987,607) (1,785,178)
Profit before taxation 1,868,598 1,263,139 84 Standard Chartered Annual Report 2013 Notes to the Un-Consolidated Financial Statements For the year ended 31 December 2013
41.3 This includes acceptances of Rs.NIL (2012: Rs 661 million).
41.4 Profit & Loss distribution and Pool Management
The Bank manages following assets pools for profit and loss distribution:
a) Islamic Export Refinance Scheme (IERS) Musharakah Pool; and b) Mubarabah Depositors Pool
a) IERS Musharakah Pool
Key features, risks, rewards and calculation of profit/loss of this pool are in compliance with the SBP IER Scheme and the relevant circulars issued by SBP from time to time.
b) Mubarabah Depositors Pool
i) Key features and risk & reward characteristics
Deposits are accepted from customers on the basis of Qard for current accounts and Mudarabah for Saving and Term deposits. Current Accounts are not part of the Mudaraba Pool hence no profit or loss is passed on to current account depositors.
For deposits accepted on Mudarabah basis from depositors (Rab-ul-Maal), the Bank acts as Manager (Mudarib) and invests the funds in Shariah Compliant modes of financings. Depositors (Rab-ul-Maal) share is distributed among the various categories of depositors according to weightages declared for a month before start of the period for the relevant categories.
In case of loss in a pool during the profit calculation period, the loss will be distributed among the depositors (remunerative) according to their ratio of investment.
ii) Parameters used for allocation of profit, charging expenses and provisions
The profit of deposit pool is calculated on all the remunerative assets tagged to the Mudaraba Pool, by utilising the funds from the pool after deduction of expenses directly incurred in earning the income of such pool, if any. The framework and the methodology is duly approved by the Shariah Advisor. Resultant profit, net of Banks share as investor, is distributed between Mudarib and Rab-ul-Maal based on sharing ratio declared before start of month.
The ratio for Mudarib and Rab-ul-maal was 50:50 in both general and special pools. No expense of general or administrative nature or any provision against any non-performing asset of the pool is passed on to the pool except on the actual loss / write-off of such non-performing asset.
iii) Deployment of Mudaraba based deposits
The deposits and funds accepted under the above mentioned pools are provided to diverse sectors including Cement, Chemical, Pharmaceuticals, Communication, Sugar, Textile, Agribusiness, Transport etc. as well as in Government of Pakistan backed Ijarah Sukuks. 85 Notes to the Un-Consolidated Financial Statements For the year ended 31 December 2013
Type of Pool iv) Other information General Special
Profit rate / weightage announcement frequency Monthly Monthly
Mudarib share (amount in 000) 513,889 59,959
Mudarib share 43.35% 21.27%
Mudarib Share transferred through Hiba (amount in 000) 78,817 81,014
Mudarib Share transferred through Hiba (%) 13.30% 57.47%
Average return on pool assets 10.35% 9.78%
Average return on deposits 5.87% 7.76%
42 DATE OF AUTHORIZATION
These financial statements were authorized for issue in the Board of Directors meeting held on 05 March 2014. Financial statements and notes
Khalid Elgibaly Najam I. Chaudhri Parvez Ghias Raheel Ahmed Chief Executive Director Director Director 86 Standard Chartered Annual Report 2013 Un-Consolidated Statement of Financial Position Annexure-1 Statement in respect of written-off loans or any other financial relief of five hundred thousand rupees or above as required under sub-section (3) of section 33A of the Banking Companies Ordinance, 1962 during the year ended 31 December, 2013. Amount in PKR Outstanding Libilities at Beginning of Year Amount Written off / Concession Sr. Name of Partners / Total Name Address Father / Husband Name Interest/ Interest/ No. Directors NIC / CNIC Principle Total Principle Balance Markup Markup (Gross)
1 Faisal Khurshid 51 Attaturk Block New Garden Town 35202-5455216-9 Mirza Khurshid Anwar 5,398,883 2,254,369 7,653,253 1,349,721 2,254,369 3,604,091 Lahore 2 Sh. Jawaid Iqbal 885 Shadman Colony No 1 Lahore 35202-5352357-1 Ghulam Rasool 4,296,752 1,656,341 5,953,093 859,351 1,656,341 2,515,692 3 Sheikh Muhammad Arshad 26 D Shadman Colony Faislabad 33100-5482564-9 Haji Ghulam Hussain 9,252,421 3,703,346 12,955,767 2,252,421 3,703,346 5,955,767 4 Shakoor Ahmed 41 F Shah Rukn E Alam Colony 330-51-055236 Ch. Nasir Uddin 5,588,619 3,161,525 8,750,144 2,088,619 3,161,525 5,250,144 Multan 5 Hafsa Ghous & Or Ghous Muhamad 768 Ravi Block Allama Iqbal Town 35202-2393659-6 Ghous Muhamad 1,376,960 389,321 1,766,281 137,696 389,321 527,017 Lahore P O Box 54570 6 Muhammad Iftikhar Rasool 112217 H Sanghar Wihara Inside Pak 36302-0476647-3 Faiz Rasool 2,299,899 960,183 3,260,082 344,899 960,183 1,305,082 Gate Multan 7 Rana Liaqat Ali 98 S Masoom Shah Road new 322-50-099156 Rana Rehmat Ali (Late) 4,491,837 1,875,874 6,367,711 891,837 1,875,874 2,767,711 Multan 8 Pervaiz Ahmed H No 291 A Block 4 K A E C H S 42201-7300421-3 Muhammad Umer Khan 7,400,000 3,211,293 10,611,293 2,590,000 3,211,293 5,801,293 Karachi 9 Muhammad Farooq Azam 9/1 C Peoples Colony No 1 Faislabad 33100-3537494-7 Abdul Hameed 3,091,557 827,343 3,918,900 587,396 827,343 1,414,738 10 Hafeez-Ur-Rehman Babar Ummar Rd Link Muslim Rd Guja- 34101-9487815-7 Muhammad Shafi 2,459,364 568,656 3,028,020 368,905 568,656 937,561 ranwala 11 Waseem Ul Haq M 1 Cantt View Housing Scheme 35201-4495870-9 Aziz Ul Haq 800,815 575,612 1,376,427 - 575,612 575,612 Badian Road Lahore 12 Zulfiqar Ali Raifal Rd Super Town Dha Cantt 35201-5353720-9 Haji Allah Ditta 1,643,299 685,813 2,329,113 312,227 685,813 998,041 Lahore 13 Pervez Pyar Ali & Or Malik Pyar Ali 222/2 Al Karim Town House Manae- 42201-6420647-3 Pyar Ali Manji 1,555,639 460,265 2,015,904 255,639 460,265 715,904 ckji St Garden East 14 Muhammad Sarwar House No 740 Mohallah Koriarpur 37405-1754319-7 Sardar Muhammad 1,720,913 693,036 2,413,949 258,913 693,036 951,949 Rawalpindi 15 Muhammad Ramzan &/Or Shakeel House No 856 St No 20 G-10/1 Isl 61101-3207983-7 Muhammad Yaar (Late) 948,260 741,513 1,689,773 - 741,513 741,513 Ahmed 16 Muhammad Musharaf B 320/3 Faiza Avenue 11 C/1 North 42101-9192087-1 Muhammad Arif (Late) 1,769,263 344,275 2,113,538 219,263 344,275 563,538 Karachi 17 Tahir Fazil 21 C Muslim Town Lahore 35202-8918855-3 Bilal Tahir 16,779,545 13,866,080 6,711,822 13,866,080 30,645,625 20,577,902 18 Jutt Weaving Factory P.390/10 St#08 Ayub Colony 439-93-180000 Muhammad Ramzan 946,877 359,847 1,306,724 189,377 359,847 549,224 19 Anwar Ullah Alvi 1445 B Peoples Colony No 1 Near 33100-7614336-7 Jafar Ullah Alvi 1,862,270 928,414 2,790,684 655,270 928,414 1,583,684 Pilot Ground Faislabad 20 Mussawir Hussain Bakhtiari House No 40 A 1 St 16 Officers 35201-9371577-9 Masood Hussain Bakhtiari 24,656,459 10,281,880 7,656,459 10,281,880 17,938,339 Colony Cavelery Ground 34,938,339 21 Muhammad Rizwan Ali House # Nw/455,Saidpur Scheme 37405-1750946-7 Sheikh Mohammad Tariq 2,860,999 667,246 3,528,244 94,999 667,246 762,244 Rawalpindi 22 Abdul Waheed Rawat House No 746 St No 3 I -9/1 Ial 61101-3927767-5 Abdul Majeed 2,253,724 818,290 3,072,014 315,724 818,290 1,134,014 23 Tawakal Haider House No 223 St No 5 Cavelery 35201-5924093-7 Ijaz Ali (Late) 3,109,839 1,273,012 4,382,852 359,839 1,273,012 1,632,852 Ground Lahore 24 Tariq Aziz Hussain 247 D Peoples Colony No 1 Near 33100-2941568-9 Muhammad Hussain 2,334,960 806,131 3,141,091 466,992 806,131 1,273,123 Khazra Mosque Faislabad 25 Marium Aftab Flat No 5 H No 112 B Main Gulberg 35202-2419157-8 Aftab Ahmed Sheikh (Late) 5,958,923 2,484,857 8,443,779 1,758,923 2,484,857 4,243,779 Road Lahore 26 Muhammad Sohail H No 73 St No 17 A Lane 3 Chaklala 37405-9017740-7 Muhammad Sharif 7,979,268 3,341,664 11,320,932 1,959,268 3,341,664 5,300,932 3 Rawalpindi 27 Syed Israr Hussain Shah 101 C Punjab Corporalince Housing 35201-4032477-7 Syed Muhammad Ishaq 973,633 406,838 1,380,471 194,726 406,838 601,564 Society Lahore Cant Shah 28 Malik Shafqat Hayat House No 252/3 St No 34 Z Block 35201-1326487-9 Malik Muhammad Hussain 8,843,200 4,648,940 13,492,140 5,575,200 4,648,940 10,224,140 Dha Lahore 29 Muhammad Javaid Iqbal House No 3 W Z Madina Town 33100-3149056-3 Muhammad Tufail 5,155,498 2,169,831 7,325,329 955,498 2,169,831 3,125,329 Faislabad 30 Malik Imran Talib Thokar Niaz Baig Bahir Wala Havali 35200-1453620-5 Malik Israr Hussain 12,985,274 5,150,436 18,135,710 6,985,274 5,150,436 12,135,710 Lahore 31 Tariq Javed Weaving Factory House #P66 St#3 Afghana Bad#1 33100-0964965-1 Muhammad Aslam Sajid 1,240,138 496,140 1,736,278 186,021 496,140 682,161 Dhakhana Gulberg 32 Amjad Niaz Abbasi House No 981 Zeeshan Colony 37405-9916774-7 Raja Niaz Ahmad 10,100,000 4,204,819 14,304,819 3,938,700 4,204,819 8,143,519 Cobbe Line Rawalpindi 33 Faisal Murad Flat No 4701 1St Floor Defence 42301-1225942-1 Shujaat Ullah Khan 1,793,562 747,827 2,541,388 492,962 747,827 1,240,788 Garden Phase 1 Dha 34 Jameel Uddin H No A 27 Blue No 3 Gulshan E Iqbal 42101-1707727-3 Mohammad Anwar 9,413,343 3,929,583 13,342,926 2,823,943 3,929,583 6,753,526 Karachi 35 Ghulam Haider H#220-F Mohallah Shah Rukh- 36302-5488123-9 Ali Muhammad 1,936,294 549,924 2,486,218 366,294 549,924 916,218 E-Alam 36 Muhammad Maqbool Abbassi House No 334 St No 25 Sector I 10/4 61101-1833405-5 Wali Daad Khan Abbasi 2,309,306 964,109 3,273,416 309,306 964,109 1,273,416 Islamabad 37 Malik Zari Corporation Jaranwala Road, Mandi Faizabad, 35402-2457966-1 Khushi Mohammad 5,077,152 613,076 5,690,228 77,152 613,076 690,228 Sheikhupura 38 M/S Muslim Khad Merchant Ghala Mandi Bhalwalpur 38401-0338250-9 Muhammad Akram Shah 18,359,837 6,971,249 25,331,085 7,343,935 6,971,249 14,315,183 39 Saleem Ahmed C 1 Ground Floor Sea Breez Super 42301-3315174-9 Khawaja Nazeer Ahmed 7,995,317 3,334,098 11,329,414 2,095,317 3,334,098 5,429,414 Star Appartments 40 Ikram Zari Corporation Ghalla Mandi, Main Bazar, Farooqa- 35404-0903137-5 Muhammad Amin 4,199,211 1,573,499 5,772,711 1,499,211 1,573,499 3,072,711 bad, Distt. Sheikhupura 41 Sheikh Muhammad Saeed House No 249 B Gulgasht Colony 36302-0399617-9 Sheikh Fazal Ur Rehman 5,799,357 2,376,367 8,175,724 2,184,357 2,376,367 4,560,724 Multan 42 Afzaal & Company Ghalla Mandi,Pattoki.Distt.Kasur. 35103-1369521-3 Ghulam Ali 18,297,956 6,343,205 24,641,160 11,647,956 6,343,205 17,991,160 Total Total 681,869 (Gross) Balance
Financial statements and notes 444,503 87 Amount in PKR Markup Interest/ ,335,308 11,117,213 ,335,308 000 1,436,992 1,885,992 3,311,642 4,334,839 Total Total Principle Markup Interest/ 1,380,162 596,783 1,976,945 450,162 596,783 1,046,945 1,867,055 696,906 2,563,960 499,955 696,906 1,196,860 4,799,220 2,836,341 7,635,561 959,220 2,836,341 3,795,561 4,479,833 1,867,055 6,346,888 1,478,345 1,867,055 3,345,400 3,764,045 1,354,091 5,118,136 924,045 1,354,091 2,278,136 6,330,354 2,655,436 8,985,790 1,830,354 2,655,436 4,485,790 Principle Outstanding Libilities at Beginning of Year at Beginning of Year Outstanding Libilities Amount Written off / Concession 1,356,228 414,420 1,770,648 256,228 414,420 670,648 8,347,983 1,256,746 9,604,728 200,000 1,256,746 1,456,746 6,298,895 2,357,857 8,656,752 2,456,568 2,357,857 4,814,425 Father / Husband Name Chohan Chatha Khakwani Hashmi Khawaja Islam Tauhid Rafiq Cheema Name of Partners / Name of Partners / Directors NIC / CNIC 36202-5571792-3 Syed Akbar Shah 972,239 364,863 1,337,102 272,239 364,863 637,102 36302-0413985-1 Hashmat Ali 1,934,711 812,405 2,747,116 434,711 812,405 1,247,116 35201-1568171-7 Muhammad Aslam Butt 5,212,448 2,176,956 7,389,404 1,012,448 2,176,956 3,189,404 61101-2988707-7 Raja Abdul Rehman 17,951,213 6,056,902 24,008,114 - 6,056,902 6,056,902 31203-3234558-7 Allah Ditta 6,998,323 3,354,081 10,352,404 1,889,547 3,354,081 5,243,628 37405-1459714-7 Nizamuddin 2,700,000 1,168,415 3,868,415 600,000 1,168,415 1,768,415 36602-5392867-1 Ahmed Yar 4,361,806 2,037,500 6,399,305 961,806 2,037,500 2,999,305 33101-9673855-1 Shoukat Mehmood 36302-6662204-1 Shahnawaz Khan 33101-1710785-1 Ali Khan Nazar 2,951,271 1,111,391 4,062,662 451,271 1,111,391 1,562,662 35202-2869318-5 Muhammad Sharif 1,693,374 434,376 2,127,750 338,674 434,376 773,050 35201-2632344-1 Mohammad Siddique 34603-2350734-7 Muhammad Riaz Wasif 2,398,628 1,002,033 3,400,661 719,008 1,002,033 1,721,041 33100-6281151-9 Muhammad Iqbal 14,484,945 5,443,170 19,928,115 3,184,945 5,443,170 8,628,115 36303-5984959-9 Ahmed Bukhsh 1,288,540 512,484 1,801,024 188,540 512,484 701,024 42301-0800937-9 Allah Ditta Mughal 3,455,327 1,597,092 5,052,419 1,298,407 1,597,092 2,895,499 42101-8565282-5 Hassan Abbas 1,191,916 988,235 2,180,152 303,366 988,185 1,291,552 36302-0468420-3 Mehmood Hassan 36302-8516312-7 Chaudhary Muhammad 35202-7495307-3 Sarwar Butt Shahzad 2,396,877 992,370 3,389,248 479,367 992,370 1,471,738 33100-9897671-7 Rana Muhammad Iqbal 2,500,000 1,030,428 3,530,428 450,000 1,030,428 1,480,428 42101-1615920-3 Haji Abdul Rasheed 5,830,201 2,420,835 8,251,036 1,430,201 2,418,335 3,848,536 36302-2367532-9 Haji Khushi Muhammad 3,429,257 1,280,078 4,709,335 480,096 1,280,078 1,760,174 36402-0824396-7 Muhammad Nawaz 2,792,976 967,995 3,760,971 837,892 967,995 1,805,887 35201-1375819-5 Iqbal Hussain Alvi 1,781,556 743,915 2,525,471 445,356 743,915 1,189,271 35202-9513390-7 Muhammad Wali 5,297,509 1,677,786 6,975,295 477,509 1,677,786 2,155,295 42401-2074777-7 Muhammad Shamshut 35201-9597755-3 Mirza Sher Zaman 9,950,586 3,792,149 13,742,736 1,990,117 3,792,149 5,782,267 33100-9030875-5 Khuda Bukhsh 793,829 606,534 1,400,363 223,829 606,534 830,363 31303-7841533-5 Chaudhry Muhammad 36304-4348143-1 Muhammad Hanif 2,194,990 1,408,004 3,602,993 658,845 1,408,004 2,066,849 36202-0927407-5 Allah Bachaya 1,787,375 718,562 2,505,938 267,375 718,562 985,938 32301-4823138-1 Ali Yaqoob 3,333,196 1,252,101 4,585,297 973,196 1,252,101 2,225,297 35202-2534191-9 Malik Ahmed Din 1,994,661 361,397 2,356,058 159,573 361,397 520,970 33100-7758835-1 Muhammad Saeed 2,000,000 832,102 2,832,102 360,000 832,102 1,192,102 ,Razabad ,Faisal Road Kehror Pacca Rukn-E-Alam Post Cantt. Sector F-6/2 Islamabad Hasilpur Scheme Iii Rawalpindi Distt Vehari Bakers Faisalabad Khanewal Road, Stree Nalay Wala Chowk,Distt.Lahore Town Lahore Town Road Model Town S Road Model Town Bazar Madina Post Office Town Mehmoodabad Town Karachi Sunny Bayers Saddiqui Colony Mlt Dha Lahore College Faislabad Office Karachi lah Dawood Jehania Sharif Colony, Shalima Colony, Lahore. karachi Colony, Cavalary Colony, 2 ,Faislabad. Distt. Rahim Yar Khan Distt. Rahim Yar Shujabad Ameer Station Kehror Pacca. Pur Distt. Muzzafar Garh Lahore Name Address 61 Nizam Tahir House No 281/A Street 13 Chaklala 51 Mohammad Amin Mugal House No 385 St No 5 Allama Iqbal Sr. Sr. 67 Ishfaq Spray Centre Ishfaq Spray Centre Quaid-I-Azam 57 Factory Bashir And Sons Weaving Chak # 188/ R.B Chak Jhumra 47 Islam Tariq H No 430 F Shah Rukn E Alam 68 Muhammad Waheed H # P-777/389, Bazar # 3 ,St #17 66 Fayyaz Hashmat House No.84 Block C Phase 1 Shah 65 Muhammad Saleem Butt Lahore H # 13,Motia Gali ,Tajbagh 63 Rizwan Ali Gujranwala 331-A Model Town 34101-2377821-9 Muhammad Akram 64 Raja Habib Ur Rehman House No.86-A Margalla Road 62 National Zarri Services National Zarri Services Railway Road 60 Sharif Brothers Near Shell Pump Multan Road Mailsi 59 Shahid Traders Gulistan Colony Near Ideal 301-B, 58 Fayyaz Ahmed Khan Khakwani &Or Muha Opp. Madarsa Minhaj Ul Quran, 56 Bismillah Fertilizer Defence Road Kahna Kacha, Station 55 Farooq Ali Hashmi 47 D Zarar Shaheed Rod Al Faisal 54 Shahid Riaz Butt Nasif Lodge Al Haram St Muradiya 53 Shahzad Imran Fabrics Gali,St#4 Kachery Wali P-84, Wakilian 52 Bilal Ahmed Neel Kot Near Masjid Anwar E Moh 4950 Hussain Raja Mehboob Anas Mustafa H No 1165 St No 108 Sector 1-10/9 Isl 61101-7841117-1 Raja Shah Wali E / 65 Block F North Nazimabad 9,571,194 1,436,992 11,008,186 449, 48 Khawaja Javed Mehmood Khawaja Street Khawaja House 45 Center Bhutta Spray Ghala Mandi Bazar Pakpattan 36402-5044305-7 Sardar Muhammad 1,634,453 347,417 1,981,869 334,453 347,417 46 Samina Tabbasum Plot No 620 Jblock G G Phase Vi 44 Iqbal Rana Mazhar Colony Islamia P 307 Street No 11 Taj 43 Nadeem Mohammad 4 F 11/14 Nazimabad Near Nadra No. Annexure-1 Un-Consolidated Statement of Financial Position Financial of Statement Un-Consolidated 71 Ch. Iftikhar Traders Seet Pur Road Ali Ch.Iftikhar Traders 81 Mehmood Zafar Rao Lahore H#114 G 3 Johar Town 35202-1885050-7 Rao Abdul Shakoor Khan 5,365,983 3,311,642 8,677,625 1,023,197 77 Mirza Jalil Akhtar Jilo House# 180/A, Street # 4, Officer 79 Muhammad Ikram-Ul-Haq House No. 307, Block - M - Dha, 78 Mohammad Badrut Tauhid Dh-91 Block-L North Nazimabad- 76 Naseem Iqbal P-10/233 ,Street # 8 ,Liaqatabad # 75 Kissan Traders & Ghalla Mandi Kot Samaba Tehsil 74 Qartaba Agro Services Qartaba Agro Services, Railway Road 73 Naya Sawera Naya Sewera Mailsy Road Adda 72 Zafar Iqbal Farrukh House # 61 ,Sector Cc ,Dha Lahore . 35201-9801764-5 Ch. Ali Mohammad 70 Malik Azam Mahmood (Mf) 304 Sabzazar Schem Multan Road 84 Malik Liaqat Niaz Enterprises 825-42-43 Hafiz Jamal Road Mohal- 83 Traders Yousaf 52/A Grain Market Mailsi 36602-2760150-3 Haji Muhammad Yousaf 2,489,809 954,694 3,444,503 489,809 954,694 1, 82 M/S Ali Traders Chak Hota The & Distt Pakpattan 80 Ghulam Ali Asghar House No.210, Street 7 Madni Larex 69 Raja Liaqat Ali Khan Rawalpindi D-472 Satellite Town 37405-9023251-3 Namat Khan 12,781,905 8,335,308 21,117,213 2,781,905 8 88 Standard Chartered Annual Report 2013 Un-Consolidated Statement of Financial Position Annexure-1
Amount in PKR Outstanding Libilities at Beginning of Year Amount Written off / Concession Sr. Name of Partners / Total Name Address Father / Husband Name Interest/ Interest/ No. Directors NIC / CNIC Principle Total Principle Balance Markup Markup (Gross)
85 Abdul Ghafoor &Or Muhammad Sarwar House No. A-60, Officers Colony No. 33100-0828851-5 Chaudhary Khushi 2,840,370 1,185,175 4,025,545 397,652 1,185,175 1,582,827 1, Madina Town Muhammad 86 Rana Muhammad Sadiq H # 49 ,St # 3 ,Allama Iqbal Town 34101-9435281-3 Roshan Din 4,988,538 2,054,327 7,042,866 748,278 2,054,327 2,802,606 ,Gujranwalla . 87 Chaudhry Muhammad Javed Chatta Street Near Roras Road 34603-4645290-9 Chaudhary Barkat Ali 2,798,829 1,167,003 3,965,832 698,829 1,167,003 1,865,832 Chowk Defence Road Sialkot 88 Sheikh Muhammad Shahbaz 325-G.T Road S.A Rahman Stop 35201-5966005-1 Muhammad Munir 1,995,669 832,144 2,827,813 385,669 832,144 1,217,813 Daroghawala Lahore 89 Muhammad Shahid Chudhary Ward#6 Kacha Road Farooq Abbad 35201-9194079-3 Nazar Muhammad 19,936,589 3,987,324 23,923,913 - 3,987,324 3,987,324 Khana Lahore 90 Malik Muhammad Asif Flat No-121 Plot No-Fl-10 Marine Drive 42301-5148359-3 Malik Muhammad Usman 2,748,519 1,476,084 4,224,603 961,982 1,476,084 2,438,066 Block-2 Clifton 91 Qaiser Abbas Bukhari 39 D Gulberg 2 Lahore 35202-1382478-7 Ghulam Abbas Bukhari 5,999,982 3,291,984 9,291,965 105,000 3,291,984 3,396,983 92 Muhammad Farooq Butt House # 303-A Iqbal Avenue Hou- 35202-7233844-3 Muhammad Saleem Butt 3,590,938 1,499,340 5,090,278 718,188 1,499,340 2,217,528 sing Society, Johar 93 Bhatti Agro Traders Bhatti Agro Traders Bangala Moree 36304-6300497-9 Ghulam Hussain 1,211,935 452,993 1,664,928 211,935 452,993 664,928 Jalal Pur Road Shujabad 94 Amar Mahmood House No. 896 - B Peoples Colony 33100-6720469-9 Mahmood Ul Hassan 9,534,238 2,068,833 11,603,071 953,423 2,068,833 3,022,256 No. 1 Faisalabad 95 Syed Habib Ur Rehman 278 - Eden Canal Villas, Lahore. 35202-0317712-9 Syed Aziz Ur Rehman 3,589,847 1,175,950 4,765,797 179,493 1,175,950 1,355,443 96 Imran Shaheen House No. 14 - A/7 Ilim Din Street 35202-7025824-3 Malik Shaheen Asif 1,676,112 690,856 2,366,969 250,112 690,856 940,969 Komboh Colony Chowk Ichra Lahore 97 Muhammad Shabbir Nadeem House No. 20 Street No. 3 Chowk 36302-6147199-7 Muhammad Din 2,809,551 1,171,544 3,981,095 809,551 1,171,544 1,981,095 Qazzafi Behind Family Hospital Hussain Bl.Multan. Multan 98 Sheikh Abdul Quddus H. No. 57, Street # 39, Sector F-10/4, 61101-2111008-1 Sheikh Abdul Rauf 19,787,931 3,815,359 - 3,815,359 3,815,359 Islamabad 23,603,290 99 Ellahi Fertilizer 59-Grain Market Rahim Yar Khan 31303-3296803-3 Abdul Ghafoor 1,489,685 555,844 2,045,529 371,685 555,844 927,529 100 Shaukat Ali H 1974 B /1 Indus Road 1 Tariq Abad 37405-3737773-9 Mushtaq Ahmed 2,437,382 699,792 3,137,175 357,382 699,792 1,057,175 Lalkurti Rawalpindi 101 Muhammad Ejaz 173-B Gulberg Faislabad 33100-0611340-7 Movli Muhammad 1,796,192 688,675 2,484,867 269,429 688,675 958,104 102 Iftikhar Hussain Famous Photo Stat Circular Road 33102-1818485-1 Muhammad Ali 2,478,090 1,037,569 3,515,659 493,090 1,037,569 1,530,659 Kachehry Bazar Faisalabad 103 Buland Iqbal House # 76,Street# 24 Sector F-10/1 61101-1971018-3 Badar Ud Din 9,996,839 4,005,594 14,002,433 2,646,839 4,005,594 6,652,433 Islamabad 104 Khawaja Zafar Iqbal House No 431/1 Mohallah Nasirabad 37405-0252799-7 Khawaja Fazal Alahi 1,074,757 365,444 1,440,201 174,757 365,444 540,201 St No 15 105 Asharf Unnisah House # A-14, Bloclk-B North 42000-0464198-2 Khalif Ullah 4,195,250 262,810 4,458,060 1,194,750 262,810 1,457,560 Nazimabad 106 Muhammad Buland Iqbal Khan Flat # 1 & 2 Plot C-3-C, Khayaban-E- 42101-5538260-7 Wahid Ali Khan 4,175,848 1,803,821 5,979,669 1,175,848 1,803,821 2,979,669 Sehar Phase Vii D.H.A 107 Mumtaz Jehan Begum House# 63 Street A Dha 26Th Street 42301-1560676-0 Ghani Dad Khan 29,389,269 6,269,547 35,658,816 - 6,269,547 6,269,547 Dha Phase 5 Karachi 108 Faisal Sajjad B-88, Block 7, Kda Scheme 36 42101-4597055-1 Syed Sajjad Hussain 4,859,476 2,941,626 7,801,102 2,559,476 2,941,626 5,501,102 Gulistan-E-Jouhar 109 Nadeem Lerasab House # 149, Street # 6 Askari-10, 37405-0210597-7 Nadeem Lerasab 4,186,465 871,302 5,057,766 - 871,302 871,302 Rawalpindi 110 Mohammad Yasin House # 759, Street # 71 I-8/3 37405-0476976-3 Noor Mohammad 1,269,479 3,196,889 4,466,369 - 3,196,889 3,196,889 111 Muhammad Nisar Abbasi House # 534, Street # 69, I-8/3 61101-1781239-5 Haji Muhammad Gul Khan 5,195,413 1,963,376 7,158,789 779,413 1,963,376 2,742,789 Islamabad 112 Anwar Haleem Khan H#C-51 Block-L Norht Nazim Abad 42000-8400411-9 Abdul Haleem Khan 14,908,570 6,129,073 21,037,643 3,708,570 6,129,073 9,837,643 Karachi 113 Muhammad Almas Abbasi House # 47,St # 26 Sector F-10/1 37405-7261074-5 Muhammad Aslam 14,877,496 5,049,942 19,927,438 - 5,049,942 5,049,942 114 Ghulam Nabi 8-Mohkam Park Hanjerwal Multan 35202-7642359-7 Ameer Ali 2,187,334 821,201 3,008,535 328,100 821,201 1,149,301 Road Lahore 115 Abdul Rehman Shop No -56/N Commercial Center 33100-4425974-9 Ghulam Sarwar 2,999,345 1,251,458 4,250,804 949,345 1,251,458 2,200,804 Gulistan Colony No -2 Faisalabad 116 Muhammad Hanif H No.15/177 Mohallah Chrigah Pura 34603-7046521-9 Muhammad Sharif 5,636,206 2,344,177 7,980,383 1,636,206 2,344,177 3,980,383 Church Road Sialkot 117 Rafaqat Ali H No.12 50-A Lawrence Road 35202-2473294-9 Karamat Ali 6,678,625 2,228,641 8,907,266 3,339,310 2,228,641 5,567,951 Lahore 118 Muhammad Javaid House# 4/19 M Block Gulberg Iii 35202-7216284-9 Abdul Majeed 1,234,218 491,548 1,725,766 234,502 491,548 726,050 Lahore Lahore 119 Mubashar Tanveer Gali # 3 Mohallah Ahmed Pura 34101-8177708-1 Zahoor Ul Din 1,807,309 605,681 2,412,990 271,096 605,681 876,777 Gujranwala 120 Malik Muhammad Anjum House # 24-C, Sector # 4-B, Khaya- 37405-2694082-3 Jamal Malik 1,875,532 785,416 2,660,948 625,532 785,416 1,410,948 ban-E-Sir Syed, 121 Muhammad Tasnim House No.133-S Block Model Town 35202-2203189-9 Haji Ghulam Nabi 3,191,934 1,354,521 4,546,455 957,581 1,354,521 2,312,102 Extension Lahore 122 Ghulam Mohi Ud Din Qadri 159-G, Dha, Lahore 35201-1303137-5 Ghulam Hussain Qadri 9,996,263 3,650,668 13,646,930 1,999,253 3,650,668 5,649,920 123 Abdul Majeed Weaving Factory Behind Shama Cinema, Shama 34101-2670005-9 Abdul Majeed 11,027,051 4,290,196 15,317,247 3,308,051 4,290,196 7,598,247 Street, Shama Colony, Shaheen Abad, G.T Road, Gujranwala 124 Razi Ud Din H # 156-C, Jamil Abad Cantt Multan 36302-0405224-3 Nasir Ud Din Shams 8,587,787 3,083,377 11,671,164 1,717,787 3,083,377 4,801,164 125 Tariq & Brothers Main Road, Ubaro Dist Ghotki Ghotki 45105-0156214-7 Umeruddin Arain 1,098,983 378,398 1,477,381 328,983 378,398 707,381 126 Al Haseeb Fabrics H # 479/1 A, Street # 4 Ansar Colony 36302-0365181-5 Inayat Muhammad Ansari 2,096,274 910,836 3,007,110 461,274 910,836 1,372,110 Block C Multan 127 Javed Masood H No-06 St 12 Allama Iqbal Road 35202-2272530-1 Sheikh Munir Hussain 340,191 10,032 350,224 416,254 136,588 552,842 Garhi Shahu Muhammad Nagar Total Total (Gross) Balance
Amount in PKR Financial statements and notes 06 555,992 06 89 Markup Interest/ Total Total Principle Markup Interest/ 707,817 6,894 714,711 775,896 92,182 868,078 509,851 96,006 605,858 509,851 113,596 623,447 747,742 17,943 765,685 982,844 161,500 1,144,344 498,256 15,205 513,460 492,455 69,060 561,515 492,420 - 492,420 490,592 81,755 572,348 484,824 13,345 498,169 461,004 75,897 536,901 Principle Outstanding Libilities at Beginning of Year at Beginning of Year Outstanding Libilities Amount Written off / Concession Father / Husband Name Younas Munir Rathore Faruqie Motiwala Faruqie Name of Partners / Name of Partners / Directors NIC / CNIC 34603-6581332-9 Chaudhary Muhammad 44201-4458771-3 Nawab Jam Anwer Ali 478,203 24,858 503,061 438,590 73,858 512,447 33100-9045706-1 Late Sheikh Mohammad 35200-4768906-7 Nawazish Ali Jafri 489,217 76,326 565,543 491,247 91,750 582,996 34603-4178846-3 Haji Ijaz Hussain 490,520 - 490,520 500,099 54,996 555,095 37301-2337204-5 Mohammad Ibrahim 37405-2408065-5 Deen Muhammad 499,830 13,490 513,319 492,507 68,632 561,139 35202-2198207-5 Manzoor Hussain 324,530 - 324,530 500,673 72,293 572,966 42101-8747661-1 Mohammad Tafi 435,970 10,800 446,769 439,299 71,760 511,059 42301-8520895-3 Hussain Syed Tafzal 430,548 47,466 478,014 432,578 70,528 503,106 42301-1070938-9 Sahabzada M Sharif 543,984 12,206 556,190 579,971 92,362 672,333 37405-6908412-3 Shaukat Ali Raja 491,851 12,395 504,247 491,851 80,783 572,634 42301-1051907-9 Khawa Muneer Akhtar 719,269 88,985 808,255 665,329 128,239 793,568 42301-8009574-5 Abdul Rasheed 999,303 24,922 1,024,225 999,225 163,410 1,162,635 42000-6907172-1 Peer Bahi De Kapadia 972,098 54,104 1,026,202 957,294 132,293 1,089,588 42201-3658673-9 Iftikhar Ali Qureshi 513,353 41,841 555,194 522,021 87,345 609,367 35202-2954108-1 Muhammad Usman 35201-6587367-9 Ijaz Ahmad 645,778 16,630 662,408 661,016 55,164 716,180 42201-3656606-1 Safar Ali 784,610 109,735 894,345 772,659 128,464 901,123 42101-7970968-1 Mohammad Shafi 609,581 37,283 646,864 611,611 112,055 723,666 42301-4963992-5 Salahuddin Ahmed 474,384 12,140 486,524 501,054 81,406 582,461 42201-1222046-1 Saeed Uddin Uraizee 489,813 78,880 568,693 468,874 89,296 558,170 42201-9889075-3 Abdullah 463,832 57,262 521,094 465,862 85,318 551,180 35201-1326403-1 Abdul Rehman Sheikh 484,729 30,592 515,321 484,729 129,733 614,462 42201-4634614-1 Muhammad Amin 54400-0440427-3 Syed Abdul Hai 499,447 170,825 670,272 499,447 170,825 670,272 35201-8355945-7 Haji Fazal Ahmad 477,407 39,305 516,712 286,402 250,802 537,204 35202-2954108-1 Muhammad Usman 35202-2709453-9 Abdul Hameed 1,127,275 71,326 1,198,600 1,086,686 195,879 1,282,564 42201-8108498-5 Abdul Sattar 495,545 129,228 624,773 495,545 165,838 661,384 kot Commissioner Road Sialkot 3-A,Double Carri- Mujaheedphase V, Main Korangi Road age Way salabad P-10/14 Sootar Mandimont- gomery Bazar Faisalabad Lahore re 11-L Johar Town Roadsialkot Hico Buildingkashmir Road Sialkot Qureshi Plazarailway Roadg.T.S Qureshi Plazarailway Roadg.T.S Chowk Jhelum Road,Chaklalarawalpin Head Office Road Rawalpindi 68Tipu Townlahore 19-A Al Miraj Arcade- Townlahore chowk Choubarji Lahore Block J North Nazimabad Karachi etdefence Housing Soci 1St Floor , Kamran House34-A/2 Lalazar Drive Cliftonkarachi 179/2A.M.21 Saddar Karachi Cinemamurree Road Office No M 1890General Hospitalchaklala Road Rawalpindi 2Khan Market 44Nishtar Road Lahore Boulevardphase V Silver Reed Hou- senear Police H/Oi.I.Chunrigar Road Cilfton Karachi Schoolkarachi Stadium Road Karachi ralahore 1St Floor Naqi Market75 Shahrah E Quaid E Azam Lahore 124/4 Industrial Area kotlakhpat Lahore Block 2P E C H S Karachi se V Extd H Aka D 18S I T E Industrial Estate Supper Highway Karachi vardphase Ii D H Silever House Babri Bldgi I Chundrigar Road karachi Societyshaheed E Mil 13/3 Jinnah Coop Housing Societyshaheed E Millat Road Block-2Karachi 603 Park Avenu- ebldg P E C H S Block 6 Shahrah E Faisal Authority, Lahore Cantt Authority, Off Ameer Khusro/Johar Road Opp Muhammadi Bakery Karachi Karachi Dha Phase 5 Near Zamzama Park Sadar Bazar Lahore Cantt Near Taj Sadar Bazar Lahore Cantt Near Taj Mehal Hotal Naqi Market Sh-E-Quaid-E-Azam Lahore Lahore Ltd.Plot,112 Phase 5 Industrial, State Haripur Hattar District Hari Pur. Block 18 Name Address Sr. Sr. 151 Imtiaz Hussain Shah 58- Sikander Blockallama Iqbal 141 Muhammad Iqbal Deenstreet Islampu- 24 Malik Taj 131 Mr Afzaal Ahmad House# 857-St-71 Bazaz Mohalla No. 157 Shahzad Ahmed H No.21/361 Mohalla Raja Bazarsial- 147 Raja Pervez Akhtar H No 0-854Feroz Puraopposite Naz 137 Sohail Ahmed 10-B South Park Streetsunset Boule- 158 Jam Saif Ali Khan H No 351, 19Th Street,Khayaban E 155 Sheikh Irfan Munir156 Imran Jaffery H No.272-D Peoples Colony No.1Fai- H No.46-B Block-A-Ijohar Townlaho- 154 Sarmad Ejaz Gundra H No.6/7 Gundra Housepeer Sehra 152 Nasir Mehmood Rathore H # 26-A/Hmadni Mohallahjhelum 153 Basharat Ahmed Tanveer H # 115St # 1Askari 9Airport 150 Muhammad Kamran Shahzad 25/E Block 2P E C H Skarachi D-14 149 Syed Fazakkir Hussain House No A 45/C5Th East Stre- 148 Shahabzada Saeed Ahmed Housesblock-8 G-21/8Almani Town 146 Shahid Munir Shiplahore Shop 154-1 B2Town 144 Syed Irfan Bokhary145 Salahuddin Ahmed Lahore 76 Block H Model Town 10/B South Park Streetmain Sunset 35202-1723600-7 Din Bukhari Syed Wajeeh 461,113 11,857 472,970 476,887 79,1 143 Muhammad Ali Kapadia E 2 4 Maymar Lake View Khekshan 142 Muhammad Ali Qureshi Model 6-U Block No 2P.E.C.H.Ssr 140 Junaid Ahmed 266 Wl.C.C.H.Slahore Canttlahore 139 Nadeem Safar 199-1-Dblock 2 P E C H Skarachi 111 L 138 Laiq Ahmed 32/1 27Th Streetoff Khy Mujahid Pha- 136 Uraizee Waseem 13 Block 3Jinnah Coop Housing 135 Asmat Ullah Tunio Appt.# 7Iqbal Heaven184/Fp.E.C.H.S 134Ur Rehman Zia S-154/1,Phase Ii, Defence Housing 133 Motiwala M Zahoor House No-403-B Adamjee Nagar 132 Shahab Uddin Mr Syed Tp 11 6Th Flr Blk C Mall Square Appt 130 Iqbal Faruqie Mohd Impex 1St Flr Worldwide Techno 129 Azam Muhammad Engineering Manager M\S Eco Pack 128 Hanif Mohammad Flat# A-7/31 3Rd Floor Rabia City Annexure-1 Un-Consolidated Statement of Financial Position Financial of Statement Un-Consolidated 90 Standard Chartered Annual Report 2013 Un-Consolidated Statement of Financial Position Annexure-1
Amount in PKR Outstanding Libilities at Beginning of Year Amount Written off / Concession Sr. Name of Partners / Total Name Address Father / Husband Name Interest/ Interest/ No. Directors NIC / CNIC Principle Total Principle Balance Markup Markup (Gross)
159 Zeeshan Qazi H No 145/N Block No 2P.E.C.H.S 42201-4711152-3 Hassam Qazi Din 450,845 86,905 537,750 436,681 85,167 521,847 Sncc-9, Bl No 7/8Johar Road Machs 160 Muhammad Saleem Anjam 115 A, Govt Employs Colonymda 36302-7137001-3 Muhammad Siddique 486,425 66,803 553,228 486,425 80,436 566,861 Chowk 2, Shadmanhigh Court 161 Syed Najam Ul Hassan Rizwi Ffc Lahore Trade Centre 11 Shahrah 35202-5140698-3 Anwar Hussain Rizwi 491,222 13,458 504,680 501,978 81,774 583,752 Aiwan-E-Tijarat Lahore China Chowk Lahore 162 Rana Muhammad Mohsin Sarwar Saffan Traders Room No 7 1St Floor 36302-5156339-7 Rana Muhamamda 499,984 84,518 584,503 499,984 84,518 584,503 105 Mangal Mansion Asia Hotel Laks- Sarwar hmi Chowk Lahore 163 Afzal Saeed Khan Ist Floor B-64/E Prechs Blk - 13-B 42101-4066188-9 Rahim Shair Khan 976,807 177,430 1,154,237 976,807 177,430 1,154,237 Gulshan E Iqbal Near Al Mustafa Hospt Karachi 164 Muhammad Abdullah Broadway Travels 28/A Ground Floor 35201-1363667-7 Muhammad Anwar 478,190 - 478,190 472,017 82,051 554,068 Empire Center 1-Abbot Road Near Lakshami Chowk Lahore 165 Ijaz Ahmad Awan 122-D - 7 Model Town Lahore 35202-8346686-1 Ali Ahmed Awan 525,891 36,595 562,486 525,891 115,085 640,976 166 Mohammad Adil Khan F-74/A,S.I.T.E., P.O.Box 3647 Karachi 42401-4229617-9 Muhammad Fazal Khan 472,016 89,938 561,954 472,016 104,060 576,076 2578651 167 Muhammad A Kapadia E-2-4 Memar Lake View Appt Keh- 42000-6907172-1 Peer Bahi De Kapadia 504,515 20,759 525,274 547,048 68,956 616,004 kashan Clifton Blk 5 Karachi Karachi 168 Ahsan Aftab 97/4 Z Block Dha Lahore 35201-1594232-7 Sheikh Aftab Hameed 415,502 15,270 430,772 429,302 75,963 505,265 169 Zaheer Maqbool Mcb Call Centre 1St Flr,Sst Bld Beau- 35202-3594273-5 Maqbool Ur Rehman 421,080 - 421,080 390,720 116,147 506,867 mont Rd Karachi Karachi 170 Hanif Akbar Marwat 22-B/2 Main National Highway 42301-1049078-3 Ghulam Akbar 252,209 - 252,209 499,174 141,178 640,352 Phase 2 Dha Kar 171 Mian Amir Nisar Hamza Agencies C-6 3Rd Fl, Ocean 42301-5455535-1 Nisar Ahmed Punnoo 261,380 - 261,380 722,448 167,990 890,438 Centre Opp Custom, House Karachi, Karachi 172 Rana Mohsin Rasheed Al Rehman Bulding Muree Road 37405-4777904-7 Rana Rasheed Ahmad 464,846 52,872 517,718 464,846 79,589 544,435 Rawalpindi 173 Syed Zeeshan Ahmad House No 633 J Blk Phase 6 Dha 35202-7565501-7 Matloob Ahmad 493,775 52,902 546,677 493,775 66,597 560,372 Lahore 174 Sarwar Ali Shams H 3/3 Sector 5 Korangi Industrial 31202-7949167-5 Muhammad Shams Uddin 503,266 13,840 517,106 482,504 77,237 559,742 Area Brooks Chowrangi Karachi 175 Rehana Begum Fl B-9 Sehar Appartment Gulshan 45504-5637294-4 Syed Ghulam Hussain 870,563 31,101 901,664 870,563 74,744 945,307 E Iqbal Maskan Chorangi Bhayni Heights Block 4 176 Sheeba Afghani H No 90 St No Main Margala Road 61101-5472844-8 Abdul Latif Afghani 667,105 56,830 723,935 667,105 114,877 781,981 F-8/2 F-8 Markaz Isb 177 Raheel Ahmad-Alias-Mithoo H No 63/2 St No 3 Saroba Garden 17 35102-5648695-7 Abdul Sattar 590,800 26,742 617,542 590,800 42,402 633,202 Km Ferozpur Rd Lahore 178 Shahrukh 72-B Industrial Area Kot Lakh Pat 35201-0460390-3 Sheikh Muhammad Ehsan 592,347 52,729 645,077 592,347 83,637 675,984 Peco Chowk Lahore 179 Ali Faisal Pta Zonal Office, Wireless Compound 42101-1771671-5 Muhammad Ibrahim 859,296 - 859,296 850,860 117,446 968,305 , Opp Jpmc Karachi 180 Irfan Ali A - 7 The Plaza 16 - A Block No 6 38405-2269087-1 Rehmat Ali 599,579 11,224 610,803 599,579 81,611 681,190 Pechs Main Shah-E-Faisal Pso Pump Karachi 181 Muhammad Zia Ur Rehman A-102 Block-13-A Railway Employ- 41304-2316040-9 Alaudin Javed 480,124 10,828 490,952 452,919 58,101 511,020 ees Cooperative Housing Society Gulshan E Iqbal Educational World School 182 Syed Zakir Raza Jafri Ppl Pidc House 42501-1558499-7 Syed Qamar Raza Jafri 1,560,556 19,052 1,579,608 1,441,545 82,166 1,523,710 183 Hina Hamid House No 1994,Muhalla Sector 11-E 42101-1718433-6 Hamid Hussain 595,455 28,658 624,113 595,455 62,185 657,640 Muslim Town, New Karachi,Karachi 184 Ansa Shahid Building 5 St 22 Imam Ghazali Road 35202-3932398-4 Shakeel Ahmed 689,879 - 689,879 673,696 101,959 775,655 Makhanpura 185 Atta Abbas H No R-547/9 Dastagir Society 42101-1622239-5 Syed Kaleem Haider 496,212 3,344 499,556 475,856 62,046 537,902 Askari Ground F.B Area 186 Ghulam Mustafa H No E-907 St 1 Waqas Market 35302-1915687-7 Noor Muhammad 440,989 - 440,989 440,194 66,182 506,376 Nadrabad Bedian Road Lahore Cantt Jinnah Public School 187 Khalid Hussain Bhutto H No B - 18 Salhal Gdyh Pcsir Lab 43204-8508600-1 Sikandar Ali 496,212 10,663 506,875 481,926 55,295 537,221 Pcsir Lab Suparco Road Gulshan Town 188 Abdul Ghaffar House No 123 Mohallah Roshan Park 35202-2647388-3 Abdul Sattar 899,085 118,436 1,017,520 899,085 118,436 1,017,520 Chungi Multan Road Lahore 189 Syed Mustafa Hussain Rizvi Flat No A1/3 2Nd Floor Gallant Court 45203-8169737-7 Syed Ali Ahmed Shah Rizvi 550,000 67,443 617,443 550,000 67,443 617,443 Flat No 5 Main University Ibn-E- Seena Hospital Complex Road Block 11 Gulshan-E-Iqbal 190 Mian Hussain Barkat 176/185 H Block Model Town Lahore 35202-2667810-9 Main Barkar Ali 600,507 9,590 610,097 622,731 159 622,890 Lahore 191 Basharat A. Tanveer Basharat Ahmad Tanveer ? Sd-115, 37405-2408065-5 Deen Muhammad 497,008 - 497,008 508,018 170,372 678,390 Askari 9 Chaklala Rawalpindi Rawalpindi 192 Khawaja Ali Hamza Kai International Pvt Ltd 35-C Em- 35202-4053949-5 Khawaja Muhamma- 473,420 15,520 488,940 471,844 156,225 628,069 press Road Lahore Lahore darshad 193 Jam Saif Ali Jam House 35 19Th Street Khayaban 44201-4458771-3 Nawab Jam Anwer Ali 488,124 37,024 525,147 488,124 73,152 561,275 E Mujahid Phase V, D H A Karachi Karachi
Total Total (Gross) Balance 7,561,273 22,590,959
Amount in PKR Financial statements and notes 91 Markup Interest/ 22,590,959 - 10,690,174 10,690,174 55,081 785,473 1,140,554 215,392 522,469 737,861 4,261,980 17,313,050 21,575,030 2,241,502 5,266,069 7,507,571 2,847,373 10,381,454 13,228,827 Total Total Principle 38,247,086 20,879,939 35,467,238 22,903,344 53,950,153 - Markup Interest/ 24,687,240 Principle Outstanding Libilities at Beginning of Year at Beginning of Year Outstanding Libilities Amount Written off / Concession Father / Husband Name Name of Partners / Name of Partners / Directors NIC / CNIC 35201-0359678-9 Muhammad Yousaf 1,959,039 778,936 2,737,975 391,807 685,882 1,077,689 42301-9885122-3 Siraj Ul Islam42201-2743166-5 Zubair Aslam 11,847,373 11,055,971 19,561,980 18,685,106 42301-5345790-9 Abdul Saboor Choudhry 6,555,260 2,289,392 8,844,652 1,305,260 1,924,886 3,230,146 34201-7531375-1 Mohammed Khan 4,545,261 1,452,633 5,997,894 909,052 1,964,238 2,873,291 42301-1022570-1 Abdul Sattar 4,562,300 2,068,298 6,630,598 922,300 2,037,046 2,959,346 41302-9544346-7 Abdul Ghani Memon 6,385,086 756,752 7,141,838 - 800,827 800,827 41304-8473208-9 Mubarak Hussain 14,941,502 5,938,437 42201-0543612-7 Gazanfar Ali 1,430,872 979,813 2,410,685 230,872 915,424 1,146,296 42401-9570919-5 Abdul Ghayyur Khan 1,292,821 642,192 1,935,013 322,821 584,115 906,936 42101-6258462-9 Syed Mohsin Raza 1,142,483 401,972 1,544,455 227,953 334,118 562,070 42201-7617626-5 Sultan Al 5,242,808 3,303,159 8,545,967 996,808 2,929,075 3,925,883 42401-4315321-3 Muhammad Latif 2,323,148 1,805,904 4,129,053 463,148 1,682,142 2,145,291 42501-4727739-9 Abdul Hakeem 2,217,933 1,754,961 3,972,894 443,933 1,591,819 2,035,752 42301-6437339-9 Abdul Wahid 10,842,539 5,343,804 16,186,343 2,710,539 4,686,940 7,397,479 37103-7247965-3 Karam Dad Mirza 9,676,816 4,738,387 14,415,203 1,676,816 4,220,354 5,897,170 42301-7334695-7 Ali Gain Tahir 1,610,400 887,311 2,497,712 320,400 756,830 1,077,231 42201-2473350-1 M Maqsood Qureshi 17,238,478 6,536,753 23,775,231 4,738,478 5,569,645 10,308,123 35201-1346208-5 Not Found In Nadra Sys 1,545,232 1,051,404 2,596,637 164,000 968,085 1,132,085 42301-2051756-9 Ghulam Rasool 9,251,414 3,337,964 12,589,378 2,296,414 3,222,303 5,518,716 35202-2730416-3 Sirajuddin 5,639,000 4,163,663 9,802,663 1,639,000 3,814,475 5,453,475 42000-0429968-3 Sh Gulzar Ahmed 5,648,085 916,407 6,564,492 1,018,085 665,965 1,684,050 35202-8185788-3 Muzaffar Ali Shah 963,368 469,255 1,432,623 192,368 419,462 611,830 42101-6414518-9 Abdul Majeed Qureshi 1,810,554 555,931 2,366,485 410,554 555,931 966,485 35401-7043968-9 Mohammad Ali 5,178,968 4,054,787 9,233,756 776,968 3,742,269 4,519,237 33100-3152825-3 Muhammad Shariff 772,990 449,315 1,222,305 147,990 406,046 554,036 42301-7595696-2 Fahim Makhdoom Amin 29,262,914 42301-7595696-2 Makdoom M Amin Fahim 23,374,549 12,092,689 35202-6507212-1 M Sharif 2,652,288 1,340,714 3,993,002 789,603 1,210,482 2,000,085 37405-0563650-5 Maktoob Ahmed 908,852 447,727 1,356,579 68,852 447,727 516,579 517-55-080202 Hameed Ks Abdul 1,038,578 578,978 1,617,556 253,578 526,723 780,301 42101-0709680-1 Syed Safdar Ali 1,403,960 544,086 1,948,046 333,788 431,169 764,957 502-69-245692 Abidi Syd Hasan Wazir 3,508,412 626,497 4,134,908 499,909 620,559 1,120,468 33100-1027739-1 M Farooq Sadiquei 497,728 - 497,728 498,491 154,453 652,944 Street# 2 Shaheen Colony Revenue Record Lahore -E- Iqbal Scheme 1 Scheme-2, Phase-V, Dha, Gulistan Scheme-2, Phase-V, -E- Johar Kalsa Gt Road, Gujrat Gulshan Colony Frere Town Clifton Frere Town Frere Town Tipu Sultan Road K.M.C.H.S.L Tipu bad, Latifabad Appartment Gulshan E Iqbal Gulshan -E- Iqbal Block 10 Gulshan-E-Iqbal Safari Park Area, Gulshan -E- Iqbal Flat#205 Burgari Road Soldier Bazar No 2 Karachi Jamshed Quarters bad, Nazimabad Royal City, Phz-1-B/17 Gulistan-E- Royal City, Johar Gulistan -E- Johar 5,Ext Dha Dha Karachi Road Chaklala Airport Employees Cooperative Housing Scheme Yar Jang Road , Soilder Bazar # 2 , Yar Dha Karachi han-E-Iqbal, Karachi Lahore. Walton Road Lahore. Walton Clifton Block-2 Karachi Ishra Lahore Near Misri Shah Mazar D.H.A Karachi. Dha Karachi Street Chah Baba Shaid Shah Gari Shaw Lahore. Ghari Shahu Karachi Near Medi Care Hospital Lahore Samanabad Samanabad Faisalabad Samanabad Faisalabad se-2 D.H.A. Karachi. Dha Karachi Phase-2, Dha, Karachi Dha Karachi Lahore. Town, Rawalpindi. Town, 5Th Floor Smchs Society Karachi Hawksbay Road Paf Maripur Karachi Karachi. heed Colony Near Al Aziz Masque Faisalabad Faisalabad Name Address Sr. Sr. 211 Nasir Mehmood Flat D-305, 3Rd Floor Beach Blessing No. 217 Abdul Majeed Flat No.G-202, 2Nd Floor Haroon 197 Zahid Hameed Mustafa Arcade-Plot-No 119-A P-1 221 Adnan Ghayyur Khan Flat No F1, Park View Appartment 219 Abbul Hassan Jm 135 Rose Garden 2Nd Floor Plot# 218 Amjad Pervaiz House No-111, Sector # B-3, Saeeda- 216 Mansoor Wahid Phase House # 91/2 Saba Avenue 215 Mirza Muhammad Yaqoob Air Port Link 200-A Gulzar-E-Quaid 214 Aun Gain Manzil , Nawab Bahadur 16-Habib 213 Mohammad Shahid Qureshi Guls- House A/35, Block-13/D-2, 212 Muhammad Arshad Colony, H.N E/149-B, Street 6 Yasrab 210 Raja Muhammad Farraukh Nazir H.No 409 Block Y D.H.A Lahore 35201-8925994-7Muhammad Nazir Raja 1,420,324 567,970 1,988,294 3 199 Sajid Khan Sumbal Muhammad 201 Irfan Sheikh Mohammad Extention Lahore. 9-N, Model Town 35202-1080530-9 M Iqbal Khan Sunbul 154-A Miraj Street Habib Ullah Road 1,815,392 668,937 2,484,329 198 Tanveer Abid H.No. B-1, 735, Street No, 2, Muslim 196 Shams-Ul-Arfeen Distributors (Pvt)Ltd 9/1, K-28, Venus 195 Hasan Abidi Syed Rafi G-15 6Th Street Phase Vi D.H.A 194 Siddiqui M Shahzad H No 74 St No 2 New Haseeb Sha- 227 Omar Saboor H # 20, Askari Villas Army Housing 207 Ali Shah Wajid H.No 86 Allama Iqbal Road Lahore 230 Muhammad Shamoon House# E-29/F-4 Allama Iqbal 228 Meraj Ul Islam229 Atif Zubair H # 426, St # 21, Gaze Nigar Gulshan Kda Scheme # 1 House# St-1/B Kda 226 Zafar Husain Near Pso Petrol Pump, Nat Industry, 225 Muhammad Yaqoob B-1002, 10Th Floor Mehran Square 224 Muhammad Kashif Memon Off House # B-260, Adamjee Nagar, 223 Umer Hayat H # 113/A, Block # A, Unit # 4, Latifa- 222 Nasir Hussain House D-18 K.D.A Overseas 220 Syed Ather Raza House # 1402, Block-8, Federal B 209 M.Shahbaz 38/12 Ishra Road Usman Bazar 208 Sh.Maqsood Ahmed 50/2 Main Kh.E Muslim Phase Vi 206 Naeem Ahmed Qureshi H.No B 301 Block L North Nazimabad 205 Maqbool Hussain H.No.3 Luchmen Street Lake Road 204 Muhammad Nadeem P-1247 Block-40 Bismillahpur H 203 Rizwana Amin House 11-A 2Nd Sunset Street Pha- 202 Rizwana Amin House No 11-A, 2Nd Sunset Street 200 Ali Syed Tahir H.No. 750-Z, D.H.A., Lahore 35201-1587760-3 S Azhar Ali 11,376,442 4,401,175 15,777,616 3,776,442 3,784,831 Annexure-1 Un-Consolidated Statement of Financial Position Financial of Statement Un-Consolidated 92 Standard Chartered Annual Report 2013 Un-Consolidated Statement of Financial Position Annexure-1
Amount in PKR Outstanding Libilities at Beginning of Year Amount Written off / Concession Sr. Name of Partners / Total Name Address Father / Husband Name Interest/ Interest/ No. Directors NIC / CNIC Principle Total Principle Balance Markup Markup (Gross)
194 M Shahzad Siddiqui H No 74 St No 2 New Haseeb Sha- 33100-1027739-1 M Farooq Sadiquei 497,728 - 497,728 498,491 154,453 652,944 heed Colony Near Al Aziz Masque Faisalabad Faisalabad 195 Syed Rafi Hasan Abidi G-15 6Th Street Phase Vi D.H.A 502-69-245692 Syd Hasan Wazir Abidi 3,508,412 626,497 4,134,908 499,909 620,559 1,120,468 Karachi. 196 Shams-Ul-Arfeen Venus Distributors (Pvt)Ltd 9/1, K-28, 42101-0709680-1 Syed Safdar Ali 1,403,960 544,086 1,948,046 333,788 431,169 764,957 Hawksbay Road Paf Maripur Karachi 197 Zahid Hameed Mustafa Arcade-Plot-No 119-A P-1 517-55-080202 Ks Abdul Hameed 1,038,578 578,978 1,617,556 253,578 526,723 780,301 5Th Floor Smchs Society Karachi 198 Abid Tanveer H.No. B-1, 735, Street No, 2, Muslim 37405-0563650-5 Maktoob Ahmed 908,852 447,727 1,356,579 68,852 447,727 516,579 Town, Rawalpindi. 199 Muhammad Sajid Khan Sumbal 9-N, Model Town Extention Lahore. 35202-1080530-9 M Iqbal Khan Sunbul 1,815,392 668,937 2,484,329 215,392 522,469 737,861 200 Syed Tahir Ali H.No. 750-Z, D.H.A., Lahore 35201-1587760-3 S Azhar Ali 11,376,442 4,401,175 15,777,616 3,776,442 3,784,831 7,561,273 201 Sheikh Mohammad Irfan 154-A Miraj Street Habib Ullah Road 35202-6507212-1 M Sharif 2,652,288 1,340,714 3,993,002 789,603 1,210,482 2,000,085 Lahore. 202 Rizwana Amin House No 11-A, 2Nd Sunset Street 42301-7595696-2 Makdoom M Amin Fahim 23,374,549 12,092,689 - 10,690,174 10,690,174 Phase-2, Dha, Karachi Dha Karachi 35,467,238 203 Rizwana Amin House 11-A 2Nd Sunset Street Pha- 42301-7595696-2 Makhdoom Amin Fahim 29,262,914 53,950,153 - se-2 D.H.A. Karachi. Dha Karachi 24,687,240 22,590,959 22,590,959 204 Muhammad Nadeem H P-1247 Block-40 Bismillahpur 33100-3152825-3 Muhammad Shariff 772,990 449,315 1,222,305 147,990 406,046 554,036 Samanabad Faisalabad Samanabad Faisalabad 205 Maqbool Hussain H.No.3 Luchmen Street Lake Road 35401-7043968-9 Mohammad Ali 5,178,968 4,054,787 9,233,756 776,968 3,742,269 4,519,237 Lahore Samanabad 206 Naeem Ahmed Qureshi H.No B 301 Block L North Nazimabad 42101-6414518-9 Abdul Majeed Qureshi 1,810,554 555,931 2,366,485 410,554 555,931 966,485 Karachi Near Medi Care Hospital 207 Wajid Ali Shah H.No 86 Allama Iqbal Road Lahore 35202-8185788-3 Muzaffar Ali Shah 963,368 469,255 1,432,623 192,368 419,462 611,830 Street Chah Baba Shaid Shah Gari Shaw Lahore. Ghari Shahu 208 Sh.Maqsood Ahmed 50/2 Main Kh.E Muslim Phase Vi 42000-0429968-3 Sh Gulzar Ahmed 5,648,085 916,407 6,564,492 1,018,085 665,965 1,684,050 Near Misri Shah Mazar D.H.A Karachi. Dha Karachi 209 M.Shahbaz 38/12 Ishra Road Usman Bazar 35202-2730416-3 Sirajuddin 5,639,000 4,163,663 9,802,663 1,639,000 3,814,475 5,453,475 Ishra Lahore 210 Raja Muhammad Farraukh Nazir H.No 409 Block Y D.H.A Lahore 35201-8925994-7 Raja Muhammad Nazir 1,420,324 567,970 1,988,294 355,081 785,473 1,140,554 211 Nasir Mehmood Flat D-305, 3Rd Floor Beach Blessing 42301-2051756-9 Ghulam Rasool 9,251,414 3,337,964 12,589,378 2,296,414 3,222,303 5,518,716 Clifton Block-2 Karachi 212 Muhammad Arshad H.N E/149-B, Street 6 Yasrab Colony, 35201-1346208-5 Not Found In Nadra Sys 1,545,232 1,051,404 2,596,637 164,000 968,085 1,132,085 Lahore. Walton Road 213 Mohammad Shahid Qureshi House A/35, Block-13/D-2, Guls- 42201-2473350-1 M Maqsood Qureshi 17,238,478 6,536,753 23,775,231 4,738,478 5,569,645 10,308,123 han-E-Iqbal, Karachi 214 Aun Gain 16-Habib Manzil , Nawab Bahadur 42301-7334695-7 Tahir Ali Gain 1,610,400 887,311 2,497,712 320,400 756,830 1,077,231 Yar Jang Road , Soilder Bazar # 2 , Dha Karachi 215 Muhammad Yaqoob Mirza 200-A Gulzar-E-Quaid Air Port Link 37103-7247965-3 Karam Dad Mirza 9,676,816 4,738,387 14,415,203 1,676,816 4,220,354 5,897,170 Road Chaklala Airport Employees Cooperative Housing Scheme 216 Mansoor Wahid House # 91/2 Saba Avenue Phase 42301-6437339-9 Abdul Wahid 10,842,539 5,343,804 16,186,343 2,710,539 4,686,940 7,397,479 5,Ext Dha Dha Karachi 217 Abdul Majeed Flat No.G-202, 2Nd Floor Haroon 42501-4727739-9 Abdul Hakeem 2,217,933 1,754,961 3,972,894 443,933 1,591,819 2,035,752 Royal City, Phz-1-B/17 Gulistan-E- Johar Gulistan -E- Johar 218 Amjad Pervaiz House No-111, Sector # B-3, Saeeda- 42401-4315321-3 Muhammad Latif 2,323,148 1,805,904 4,129,053 463,148 1,682,142 2,145,291 bad, Nazimabad 219 Abbul Hassan Plot# Jm 135 Rose Garden 2Nd Floor 42201-7617626-5 Sultan Al 5,242,808 3,303,159 8,545,967 996,808 2,929,075 3,925,883 Flat#205 Burgari Road Soldier Bazar No 2 Karachi Jamshed Quarters 220 Syed Ather Raza House # 1402, Block-8, Federal B 42101-6258462-9 Syed Mohsin Raza 1,142,483 401,972 1,544,455 227,953 334,118 562,070 Area, Gulshan -E- Iqbal 221 Adnan Ghayyur Khan Flat No F1, Park View Appartment 42401-9570919-5 Abdul Ghayyur Khan 1,292,821 642,192 1,935,013 322,821 584,115 906,936 Block 10 Gulshan-E-Iqbal Safari Park 222 Nasir Hussain House D-18 K.D.A Overseas 42201-0543612-7 Gazanfar Ali 1,430,872 979,813 2,410,685 230,872 915,424 1,146,296 Appartment Gulshan E Iqbal Gulshan -E- Iqbal 223 Umer Hayat H # 113/A, Block # A, Unit # 4, Latifa- 41304-8473208-9 Mubarak Hussain 14,941,502 5,938,437 2,241,502 5,266,069 7,507,571 bad, Latifabad 20,879,939 224 Muhammad Kashif Memon House # B-260, Adamjee Nagar, Off 41302-9544346-7 Abdul Ghani Memon 6,385,086 756,752 7,141,838 - 800,827 800,827 Tipu Sultan Road K.M.C.H.S.L 225 Muhammad Yaqoob B-1002, 10Th Floor Mehran Square 42301-1022570-1 Abdul Sattar 4,562,300 2,068,298 6,630,598 922,300 2,037,046 2,959,346 Frere Town Clifton Frere Town 226 Zafar Husain Nat Industry, Near Pso Petrol Pump, 34201-7531375-1 Mohammed Khan 4,545,261 1,452,633 5,997,894 909,052 1,964,238 2,873,291 Kalsa Gt Road, Gujrat Gulshan Colony 227 Omar Saboor H # 20, Askari Villas Army Housing 42301-5345790-9 Abdul Saboor Choudhry 6,555,260 2,289,392 8,844,652 1,305,260 1,924,886 3,230,146 Scheme-2, Phase-V, Dha, Gulistan -E- Johar 228 Meraj Ul Islam H # 426, St # 21, Gaze Nigar Gulshan 42301-9885122-3 Siraj Ul Islam 11,847,373 11,055,971 2,847,373 10,381,454 13,228,827 -E- Iqbal 22,903,344 229 Atif Zubair Kda Scheme # 1 House# St-1/B Kda 42201-2743166-5 Zubair Aslam 19,561,980 18,685,106 4,261,980 17,313,050 21,575,030 Scheme 1 38,247,086 230 Muhammad Shamoon House# E-29/F-4 Allama Iqbal 35201-0359678-9 Muhammad Yousaf 1,959,039 778,936 2,737,975 391,807 685,882 1,077,689 Street# 2 Shaheen Colony Revenue Record Lahore Total Total (Gross) Balance
Financial statements and notes 93 Markup Interest/ 1,351,306,935 Amount in PKR 747,248,326 Total Total Principle 78,351,524 38,278,600 116,630,125 604,058,609 102,424,052 59,357,399 161,781,451 Markup Interest/ 187,261,724 136,230,125 1,800,000 - 1,800,000 1,800,000 - 1,800,000 6,418,946 3,338,134 9,757,080 2,018,946 2,680,264 4,699,210 7,549,698 3,117,230 10,666,928 1,749,698 2,613,161 4,362,859 Principle 128,024,052 59,237,672 Outstanding Libilities at Beginning of Year at Beginning of Year Outstanding Libilities off / Concession Amount Written 7,724,248 2,022,060 9,746,308 7,724,248 2,022,060 9,746,308 2,145,832 - 2,145,832 2,145,832 - 2,145,832 11,693,637 6,588,398 18,282,036 5,693,637 6,588,398 12,282,036 5,463,209 7,679,819 13,143,028 - 7,679,819 7,679,819 81,832,818 109,992,518 191,825,336 50,159,215 109,992,518 160,151,733 97,951,524 38,278,600 96,193,837 119,412,765 215,606,601 63,669,637 119,412,765 183,082,402 1,489,626,638 756,077,208 2,245,703,846 Father / Husband Name Sh. Arshad Javaid Sh. Arshad Javaid Sh. Nazir Hussain M Badaruddin 87,652,500 6,774,150 4,426,650 56,252,500 6,774,150 3,026,650 Abrahani Hussain Sh. Arshad Javaid Sh. Arshad Javaid Sh. Nazir Hussain Mian Muhammad Omer S/O. Bilal Ahmed Malik W/O. Viqar Ahmed Sheikh S/O. Nazir-Ul-Haq W/O. Haroon Nazir Aizaz Sarfaraz S/O. Bilal Ahmed Malik W/O. Viqar Ahmed Sheikh S/O. Nazir-Ul-Haq W/O. Haroon Nazir S/O. Kh. Ghulam Mohiuddin W/O. Kh. Bilal Ahmad Name of Partners / Name of Partners / Directors NIC / CNIC Mian Moeen-ud-Din, Managing Director. Nadeem Moin Mian, Director. Adeel Javaid, Managing Director, 42201-3385330-5 Danish Javaid, Director 42201-0255323-7 Arshad Javaid, Director 42201-0255322-9 Mubashir Ahmed, Proprietor 35201-1797775-7 42301-6612200-1 Ashiq Hussain Hussaini 616,710 14,956 631,666 616,710 71,179 687,888 33302-3282351-3 Ch. Faqir Muhammad Mr. 2,842,151 2,156,535 4,998,687 426,151 1,995,901 2,422,052 43104-8234370-9 Bingo Khan Jakhrani 4,498,673 1,986,856 6,485,529 841,978 1,722,303 2,564,280 42201-4493750-5 Muhammad Younus 42201-3568979-5 Afsar Hussain Siddiqui 1,610,343 487,293 2,097,635 261,223 395,067 656,290 42501-9432770-4 Muhammad Bashir 1,939,919 801,905 2,741,824 384,919 695,207 1,080,126 42000-8180846-5 M. Ishaq 7,212,525 2,807,378 10,019,902 1,081,875 2,707,217 3,789,092 42201-0776542-5 Ghulam Ali 964,949 575,756 1,540,705 192,949 517,762 710,711 Adeel Javaid, Mana- ging Director 42201-3385330-5 Danish Javaid, Director 42201-0255323-7 Arshad Javaid, Director 42201-0255322-9 Managing Director Mian Muhammad Salem Omer 33100-0902344-5 Malik. 9-14000-299002-1 Mrs. Saira Viqar Malik 271-86-240318 Haroon Nazir Mr. Mrs Zohra Nazir Malik. 9-14000-299002-1 Mrs. Saira Viqar Malik 271-86-240318 Haroon Nazir Mr. Mrs Zohra Nazir Adnan A. Sarfaraz, 42201-0180958-5 352022-969902-7 Mrs. Samina Bilal Ahmad 35200-1448248-4 Lahore Hasan Road, Karachi Ground, Lahore Commercial Street Dha V Ext Karachi Murree Road, Rawalpindi Near Saphora Goth Gulistan -E- Johar Block 17 Gulistan E Jouhar Gulistan -E- Johar Gulshan-E-Iqbal. Gulshan -E- Iqbal Near Over Head Tank Dali Staff Appt Near Over Head Tank Defence Karachi 04 Near Discovery Store Karachi Gulshan -E- Iqbal Gulshan-E-Iqbal Scheme 33 Hasan Road, Karachi D-98, S.I.T.E., KarachiD-98, S.I.T.E., Aftab Ahmed Khan, Plaza, Liaqat Road, Faisalabad New Address: 102, Jail Road, Faisalabad Road, Karachi Name Address Sr. Sr. No. 241 Intergrain Commodities (Pvt.) Ltd Building, The Mall, 308, Al-Falah 231 Ali Mumtaz Flat# B-7 Gulshan Plaza Block# 13-B 237 Jan Muhammad Jakhrani A-304 Block 7 Sulistan-E-Jouhar 242 Atlas Cables (Pvt.) Limited Plaza, Mumtaz Textile 9Th Floor, 240 Mubashir Ahmed House No. 24, Lane 1, Cavalry 239 Sadiq Hussain Jafri Flat No 202 Plot No 38/C 10Th Badar 238 Express Services Ghous Plaza, Off.No.I, 1St Floor, 236 Muhammad Anees Abrahani Flat # K-101,Haroon Royal City 234 Muhammad Ahsan Ashraf235 Arshad Kamal Sector 1, I-9/1 House # 87, Acn, 37405-0218393-1 Ch Muhammad Ashraf Flat # 210, Kamran Plaza, Block -3, 233 Saima Parveen 1 Appt No F/1 12Th East Street Phase 232 Khalid Mehmood House # B-28 Gulshan -E-Iqbal Block Annexure-1 Un-Consolidated Statement of Financial Position Financial of Statement Un-Consolidated Ltd 243 Atlas Rubber & Plastic Ind. (Pvt.) Ltd Mumtaz Plaza, Textile 9Th Floor, 247 Creative Textile 29-A, Off Davis Road, Lahore Viqar ahmed Mr. 246 Al-Malik Carpets 29-A, Off Davis Road, Lahore Viqar ahmed Mr. 245 Refrigerator Manufacturing Co Pakistan 248 Ammar Textile249 Bilal Textile 18 Km, Multan Road, Lahore Kh. Bilal Ahmad Address:P-834, Bilal Old 244 A & A Services. Khan 402, Al-Farid Centre, M. T. Standard Chartered Bank (Pakistan) Limited Consolidated Financial Statements For the year ended 31 December 2013 95
AUDITORS' REPORT TO THE MEMBERS
We have audited the annexed consolidated financial statements comprising consolidated statement of financial position of Standard Chartered Bank (Pakistan) Limited and its subsidiary companies as at 31 December 2013 and the related consolidated profit and loss account, consolidated statement of comprehensive income, consolidated statement of changes in equity, and consolidated cash flow statement together with the notes forming part thereof, for the year then ended. We have also expressed separate opinion on the financial statements of Standard Chartered Bank (Pakistan) Limited and have reviewed its subsidiary company namely Standard Chartered Leasing Limited and Standard Chartered Services of Pakistan (Private) Limited for the six months period ended 31 December 2013 except for Standard Chartered Modaraba which was reviewed by other firm of auditors for the six months period to 31 December 2013 whose report has been furnished to us and our opinion, in so far as it relates to the amounts included for such company, is based solely on the report of such other auditors. These financial statements are responsibility of the Holding Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.
Our audit was conducted in accordance with the International Standards on Auditing and accordingly included such tests of accounting records and such other auditing procedures as we considered necessary in the circumstances.
In our opinion, the consolidated financial statements present fairly the financial position of Standard Chartered Bank (Pakistan) Limited and its subsidiary companies as at 31 December 2013 and the results of their operations for the year then ended. Financial statements and notes
KPMG Taseer Hadi & Co. Date: 05 March 2014 Chartered Accountants Karachi Muhammad Taufiq 96 Standard Chartered Annual Report 2013 Consolidated Statement of Financial Position As at 31 December 2013
Note 2013 2012 ASSETS ------(Rupees in '000) ------
Cash and balances with treasury banks 4 32,331,167 31,487,972 Balances with other banks 5 1,608,932 2,700,218 Lendings to financial institutions 6 22,158,840 19,845,269 Investments 7 146,380,251 131,741,003 Advances 8 146,238,554 144,918,272 Operating fixed assets 9 6,172,744 6,381,584 Intangible assets 10 26,222,840 26,275,598 Deferred tax assets - net 11 - 1,447,553 Other assets 12 29,146,856 34,257,981 410,260,184 399,055,450
LIABILITIES
Bills payable 13 6,540,213 6,164,867 Borrowings 14 17,291,175 23,399,389 Deposits and other accounts 15 296,377,146 266,598,571 Sub-ordinated loans 16 2,500,000 2,750,000 Deferred tax liabilities - net 11 260,651 - Other liabilities 17 30,339,110 44,718,555 353,308,295 343,631,382 NET ASSETS 56,951,889 55,424,068
REPRESENTED BY:
Share capital 18 38,715,850 38,715,850 Reserves 19 7,180,552 5,068,628 Unappropriated profit 6,721,973 6,846,940 Attributable to equity holders of the bank 52,618,375 50,631,418 Non-controlling interest 882,322 825,841 53,500,697 51,457,259 Surplus on revaluation of assets - net of deferred tax 20 3,451,192 3,966,809 56,951,889 55,424,068
CONTINGENCIES AND COMMITMENTS 21
The annexed notes 1 to 42 and Annexure I form an integral part of these consolidated financial statements.
Khalid Elgibaly Najam I. Chaudhri Parvez Ghias Raheel Ahmed Chief Executive Director Director Director 97 Consolidated Profit and Loss Account For the year ended 31 December 2013
Note 2013 2012 ------(Rupees in '000) ------
Mark-up / return / interest earned 22 31,493,338 32,214,232 Mark-up / return / interest expensed 23 (12,687,175) (12,337,997) Net mark-up / return / interest income 18,806,163 19,876,235
Reversal / (Provision) against non-performing loans and advances 8.5 & 17.4 1,115,965 (3,083,284) Recovery of amounts written off 339,889 271,775 Provision for diminution in the value of investments 7.3 (291,198) (441,903) Bad debts written off directly 8.6.1 (239,868) (325,187) 924,788 (3,578,599) Net mark-up / return / interest income after provisions 19,730,951 16,297,636
NON MARK-UP / NON INTEREST INCOME Fees, commission and brokerage income 3,047,280 3,509,405 Dividend income 834 - Income from dealing in foreign currencies 2,911,976 1,609,512 Gain on sale of securities - net 24 732,649 1,170,953 Unrealized gain on revaluation of investments classified as held for trading 7.10.4 10,978 15,850 Other income 25 (822,669) 1,006,243 Total non mark-up / non interest income 5,881,048 7,311,963 25,611,999 23,609,599 NON MARK-UP / NON INTEREST EXPENSES Administrative expenses 26 (8,966,028) (14,045,547) Other reversals / (provisions) / asset write-offs 27 59,763 (51,659) Other charges 28 (337,549) (190,038) Total non mark-up / non interest expenses (9,243,814) (14,287,244) 16,368,185 9,322,355 Extra-ordinary / unusual items - - PROFIT BEFORE TAXATION 16,368,185 9,322,355
Taxation - current (3,735,531) (2,338,939) - prior years' (21,136) (21,136)
- deferred (1,912,199) (916,416) Financial statements and notes 29 (5,668,866) (3,276,491) PROFIT AFTER TAXATION 10,699,319 6,045,864
Attributable to : Equity holders of the bank 10,559,620 5,945,685 Non-controlling interest 139,699 100,179 10,699,319 6,045,864 ------(Rupees) ------BASIC / DILUTED EARNINGS PER SHARE 30 2.73 1.54
The annexed notes 1 to 42 and Annexure I form an integral part of these consolidated financial statements.
Khalid Elgibaly Najam I. Chaudhri Parvez Ghias Raheel Ahmed Chief Executive Director Director Director 98 Standard Chartered Annual Report 2013 Consolidated Statement of Comprehensive Income For the year ended 31 December 2013
2013 2012 ------(Rupees in '000) ------
Profit after tax for the year 10,699,319 6,045,864
Other comprehensive income:
Surplus / (deficit) on revaluation of 'Available for Sale' financial assets (i) - - Surplus / (deficit) on revaluation of fixed assets (ii) - - Actuarial gain / (loss) on defined benefit plans (27,097) 15,863 Deferred tax asset / (liability) on actuarial gain / (loss) 9,484 (5,552)
Total comprehensive income for the year 10,681,706 6,056,175
Attributable to: Equity holders of the bank 10,542,007 5,955,996 Non-controlling interest 139,699 100,179 10,681,706 6,056,175
(i) Surplus / deficit on revaluation of 'Available for Sale' securities-net of deferred tax is presented under a separate head below equity as 'surplus / deficit on revaluation of assets' in accordance with the requirements specified by the State Bank of Pakistan vide its BSD circular 20 dated 04 August 2000 and BSD circular 10 dated 13 July 2004.
(ii) Surplus/ deficit on revaluation of fixed assets-net of deferred tax is presented under a separate head below equity as 'surplus / deficit on revaluation of assets' in accordance with the requirements of section 235 of the Companies Ordinance, 1984. The details of movement in balance is disclosed in note 20.1 to these financial statements.
The annexed notes 1 to 42 and Annexure I form an integral part of these consolidated financial statements.
Khalid Elgibaly Najam I. Chaudhri Parvez Ghias Raheel Ahmed Chief Executive Director Director Director 99 Consolidated Cash Flow Statement For the year ended 31 December 2013
Note 2013 2012 CASH FLOW FROM OPERATING ACTIVITIES ------(Rupees in '000) ------Profit before tax for the year 16,368,185 9,322,355 Less: Dividend income (834) - 16,367,351 9,322,355 Adjustments for: Depreciation 494,900 486,603 Amortization 52,758 139,165 Gain on disposal of fixed assets - net (164,354) (37,090) Unrealized gain on revaluation of investments classified as held for trading - net (10,978) (15,850) Other (reversals) / provisions / asset write offs (59,763) 51,659 Provision for diminution in the value of investments 291,198 441,903 (Reversal) / provision against loans and advances - net of recoveries (1,215,986) 3,136,696 (612,225) 4,203,086 15,755,126 13,525,441 (Increase) / decrease in operating assets Lendings to financial institutions (2,313,571) 360,702 Net investments in 'held for trading' securities 2,704,327 2,261,499 Advances (104,296) (10,746,088) Other assets (excluding advance taxation) (5,136,331) (1,161,556) (4,849,871) (9,285,443) Increase / (decrease) in operating liabilities Bills payable 375,346 1,588,078 Borrowings from financial institutions (6,108,214) 4,037,525 Deposits and other accounts 29,778,575 30,723,987 Other liabilities (3,994,955) 2,818,023 20,050,752 39,167,613 Cash inflow before taxation 30,956,007 43,407,611 Income tax paid (3,808,551) (4,086,568) Net cash generated from operating activities 27,147,456 39,321,043
CASH FLOW FROM INVESTING ACTIVITIES Net investments in 'available for sale' securities (18,176,671) (29,387,076) Dividend income received 834 - Net investment in fixed assets (including intangible assets) (518,248) (493,808) Sale proceeds on disposal of operating fixed assets 336,184 37,673
Net cash used in investing activities (18,357,901) (29,843,211) Financial statements and notes
CASH FLOW FROM FINANCING ACTIVITIES (Repayment) / Issuance of sub-ordinated Term Finance Certificates -net (250,000) 2,050,800 Dividend paid (8,704,428) (6,763,705) Dividend paid to Non-controlling interest of the subsidiary (83,218) (74,141) Net cash used in financing activities (9,037,646) (4,787,046) (Decrease) / increase in cash and cash equivalents for the year (248,091) 4,690,786 Cash and cash equivalents at beginning of the year 34,188,190 29,497,404 Cash and cash equivalents at end of the year 31 33,940,099 34,188,190
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR Cash and Balances with treasury banks 32,331,167 31,487,972 Balances with other banks 1,608,932 2,700,218 33,940,099 34,188,190
The annexed notes 1 to 42 and Annexure I form an integral part of these consolidated financial statements.
Khalid Elgibaly Najam I. Chaudhri Parvez Ghias Raheel Ahmed Chief Executive Director Director Director 100 Standard Chartered Annual Report 2013 Consolidated Statement of Changes in Equity For the year ended 31 December 2013
Share Share Statutory Unappropri Non- Capital Premium Reserve ated Total controlling Total Profit Interest ------(Rupees in '000) ------Balance as at 31 December 2011 38,715,850 1,036,090 2,843,401 8,940,420 51,535,761 799,803 52,335,564
Total Comprehensive income for the year
Profit after tax for the year ended 31 December 2012 - - - 5,945,685 5,945,685 100,179 6,045,864 Other Comprehensive income
Actuarial gain on defined plan - net of tax - - - 10,311 10,311 - 10,311 - - - 5,955,996 5,955,996 100,179 6,056,175 Transactions with owners, recorded directly in equity
Share based payment transactions (contribution from holding company) - - - 2,802 2,802 - 2,802
Payment against share based payment transactions (to holding company) - - - (95,212) (95,212) - (95,212) - - - (92,410) (92,410) - (92,410)
Transfer to statutory reserve - - 1,189,137 (1,189,137) - - -
Cash dividend (Final 2011) at Rs. 1 per share - - - (3,871,585) (3,871,585) - (3,871,585)
Cash dividend (Interim 2012) at Rs. 0.75 per share - - - (2,903,689) (2,903,689) - (2,903,689)
Dividend paid to Non-controlling interest - - - - - (74,141) (74,141)
Transferred from surplus on revaluation of fixed assets - net of deferred tax - - - 7,345 7,345 - 7,345
Balance as at 31 December 2012 38,715,850 1,036,090 4,032,538 6,846,940 50,631,418 825,841 51,457,259
Total Comprehensive income for the year
Profit after tax for the year ended 31 December 2013 - - - 10,559,620 10,559,620 139,699 10,699,319
Surplus on revaluation of assets - net of deferred tax 151,895 151,895 - 151,895 Other Comprehensive income
Actuarial gain on defined plan - net of tax - - - (17,613) (17,613) - (17,613) - - - 10,693,902 10,693,902 139,699 10,833,601
Transactions with owners, recorded directly in equity
Share based payment transactions (contribution from holding company) - - - 59,741 59,741 - 59,741
Payment against share based payment transactions (to holding company) - - - (60,977) (60,977) - (60,977) - - - (1,236) (1,236) - (1,236) Transfer to statutory reserve - - 2,111,924 (2,111,924) - - -
Dividend paid to Non-controlling interest - - - - - (83,218) (83,218)
Cash dividend (Final 2012) at Rs. 1.25 per share - - - (4,839,481) (4,839,481) - (4,839,481)
Cash dividend (Interim 2013) at Rs. 1 per share - - - (3,871,585) (3,871,585) - (3,871,585)
Transferred from surplus on revaluation of fixed assets - net of deferred tax - - - 5,357 5,357 - 5,357
Balance as at 31 December 2013 38,715,850 1,036,090 6,144,462 6,721,973 52,618,375 882,322 53,500,697
Included in unappropriated profits is Rs. 970.880 million which is not available for distribution as cash or stock dividend. This is further explained in note 8.4 to these financial statements.
Khalid Elgibaly Najam I. Chaudhri Parvez Ghias Raheel Ahmed Chief Executive Director Director Director 101 Notes to the Consolidated Financial Statements For the year ended 31 December 2013
1. STATUS AND NATURE OF BUSINESS
Standard Chartered Bank (Pakistan) Limited ("the Bank") was incorporated in Pakistan on 19 July 2006 and was granted approval for commencement of banking business by State Bank of Pakistan, with effect from 30 December 2006. The ultimate holding company of the Bank is Standard Chartered PLC, incorporated in England. The registered office is at Standard Chartered Bank Building, I.I. Chundrigar Road, Karachi.
The Bank commenced formal operations on 30 December 2006 through amalgamation of entire undertaking of Union Bank Limited and the business carried on by the branches in Pakistan of Standard Chartered Bank, a bank incorporated by Royal Charter and existing under the laws of England. The scheme of amalgamation was sanctioned by State Bank of Pakistan vide its order dated 4 December 2006. The Bank's shares are listed on all stock exchanges in Pakistan.
The Bank is engaged in the banking business as defined in the Banking Companies Ordinance, 1962 and has a total number of 116 (2012: 130) branches in operation in Pakistan at 31 December 2013.
Standard Chartered Bank (Pakistan) Limited has the following three subsidiaries. All of them are incorporated in Pakistan.
Standard Chartered Leasing Limited
Standard Chartered Modaraba
Standard Chartered Services of Pakistan (Private) Limited
These financial statements are consolidated financial statements of Standard Chartered Bank (Pakistan) Limited and its subsidiaries ("the Group").
2. BASIS OF PREPARATION
2.1 Basis of presentation
In accordance with the directives of the Federal Government regarding the shifting of the Banking system to Islamic modes, the State Bank of Pakistan has issued various circulars from time to time. One permissible form of trade related mode of financing comprises of purchase of goods by the Bank from its customers and immediate resale to them at appropriate mark-up in price on deferred payment basis. The purchases and sales arising under these arrangements are not reflected in these financial statements as such but are restricted to the amount of facility actually utilised and the Financial statements and notes appropriate portion of mark-up thereon.
The financial results of the Islamic banking branches have been consolidated in these financial statements for reporting purposes. Key financial figures of the Islamic banking branches are disclosed in note 41 to these financial statements.
2.2 Statement of compliance
These financial statements have been prepared in accordance with approved accounting standards as applicable in Pakistan. Approved accounting standards comprise of such International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB) and Islamic Financial Accounting Standards (IFAS) issued by the Institute of Chartered Accountants of Pakistan (ICAP) as are notified under the Companies Ordinance, 1984, provisions of and directives issued under the Companies Ordinance, 1984 and Banking Companies Ordinance, 1962 and the directives issued by State Bank of Pakistan. In case the requirements differ, the provisions of and directives issued under the Companies Ordinance, 1984 and Banking Companies Ordinance, 1962 and the directives issued by the State Bank of Pakistan shall prevail.
The Securities and Exchange Commission of Pakistan has approved and notified the adoption of International Accounting Standard 39, 'Financial Instruments: Recognition and Measurement' (IAS 39) and International Accounting Standard 40, 'Investment Property' (IAS 40). The requirements of these standards have not been followed in the preparation of these financial statements as the State Bank of Pakistan has deferred the implementation of these standards for banks in Pakistan till further instructions. However, investments have been classified and valued in accordance with the requirements of various circulars issued by the State Bank of Pakistan. 102 Standard Chartered Annual Report 2013 Notes to the Consolidated Financial Statements For the year ended 31 December 2013
2.3 Basis of measurement
These financial statements have been prepared under the historical cost convention, except that certain available for sale, trading and derivative financial instruments have been measured at fair value whereas certain fixed assets are stated at revalued amounts less accumulated depreciation and accumulated impairment losses, where applicable.
2.4 Use of estimates and judgments
The preparation of financial statements in conformity with approved accounting standards requires management to make judgments, estimates and assumptions that effect the application of accounting policies and reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
In particular, information about significant areas of estimation uncertainty and critical judgments in applying accounting policies that have the most significant effect on the amounts recognised in the financial statements are described in the following:
- Note 8.5 Provision against non-performing advances - Note 9 & 10 Valuation and depreciation / amortisation rates for fixed / intangible assets - Note 10.2 Goodwill impairment testing - Note 11 Deferred taxation - Note 21.6 Derivative instruments - Note 29 Income taxes - Note 33 Employees' retirement defined benefit plans
2.5 Functional and presentation currency
These financial statements are presented in Pakistan Rupees, which is the Groups functional currency. Except as indicated, financial information presented in Pakistan Rupees has been rounded to the nearest thousand.
3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been applied consistently to all years presented.
3.1 Basis of consolidation
Subsidiaries
Subsidiaries are entities controlled by the Group. Control exists when the Group has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, potential voting rights that presently are exercisable are taken into account. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases.
Non-controlling interest is measured at their proportionate share in the net assets of the subsidiaries.
Material intra group balances and transactions are eliminated.
Acquisitions from entities under common control
Business combinations arising from transfers of interests in entities that are under the control of the shareholder that controls the Group are accounted for as if the acquisition had occurred at the beginning of the earliest comparative period presented. For this purpose comparatives are restated where required. The assets and liabilities acquired are recognised at the carrying amounts recognised previously in the combining entity's financial statements. 103 Notes to the Consolidated Financial Statements For the year ended 31 December 2013
Other acquisitions
Other business combinations are accounted for using the acquisition method. For acquisitions prior to 1 January 2009, the cost of acquisition is measured as the fair value of the asset given, equity instruments issued and the liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the acquisition. Identified assets acquired are fair valued at the acquisition date, irrespective of the extent of any Non-controlling interest. The excess of cost of acquisition over the fair value of identifiable net assets acquired is recorded as goodwill. Subsequently, any recoveries or losses to fair value of net assets are taken to profit and loss account and disclosed in note 25 to these financial statements.
3.2 Cash and cash equivalents
For the purposes of cash flow statement, cash and cash equivalents comprise of cash and balances with treasury bank and balances with other banks.
3.3 Investments
The Group classifies its investments as follows:
a) Held for trading
These are securities, which are acquired with the intention to trade by taking advantage of short term market / interest rate movements and are carried at market value. The surplus / deficit arising as a result of revaluation at market value is recognised in the profit and loss account. These securities are to be sold within 90 days from the date of their classification as 'Held for trading' under normal circumstances, in accordance with the requirements specified by BSD Circular 10 dated 13 July 2004 by the State Bank of Pakistan.
b) Held to maturity
These are securities with fixed or determinable payments and fixed maturity that are held with the intention and ability to hold to maturity. These are carried at amortised cost.
c) Available for sale
These are investments that do not fall under the held for trading or held to maturity categories and are carried at market value. The surplus / deficit arising as a result of revaluation at market value is kept in a separate account below equity. Financial statements and notes
All 'regular way' purchases and sale of investments are recognised on the trade date i.e. the date that the Group commits to purchase or sell the asset. Regular way purchases or sales are purchases or sales of investments that require delivery of assets within the time frame generally established by regulation or convention in the market place.
3.4 Sale and repurchase agreements
Securities sold subject to repurchase agreements ('repos') remain on the balance sheet; the counterparty liability is included in borrowings from financial institutions. Securities purchased under agreements to resell ('reverse repos') are recorded as lendings to financial institutions. The difference between sale and repurchase price is treated as interest / mark-up / return and accrued over the life of the underlying agreement using the effective interest method.
3.5 Advances
Advances are stated net of provision against non-performing advances. Specific and general provisions are made based on an appraisal of the loan portfolio that takes into account Prudential Regulations issued by the State Bank of Pakistan from time to time. Specific provisions are made where the repayment of identified loans is in doubt and reflect an estimate of the amount of loss expected. The general provision is for the inherent risk of losses which, although not separately identified, are known from experience to be present in any loan portfolio. Provision made / reversed during the year is charged to the profit and loss account and accumulated provision is netted off against advances. Advances are written- off when there is no realistic prospect of recovery. 104 Standard Chartered Annual Report 2013 Notes to the Consolidated Financial Statements For the year ended 31 December 2013
When the Group is the lessor in a lease agreement that transfers substantially all of the risks and rewards incidental to ownership of an asset to the lessee, the arrangement is presented within loans and advances.
Assets given under Ijarah contracts entered after 1 July 2008 are depreciated over the period of lease on a straight line basis. The Ijarah arrangements are shown as financing under loans and advances.
Murabaha financings are reflected as receivables at the sale price. Actual sale and purchase is not reflected as the goods are purchased by the customer as agent of the Bank and all documents relating to purchase are in customer's name. Funds disbursed under Murabaha financing arrangements for purchase of goods are recorded as "Advance Against Murabaha".
In Diminishing Musharaka based financing, the Group enters into a Musharaka based on Shirkat-ul-milk for financing an agreed share of fixed asset (e.g. house, land, plant or machinery) with its customers and enters into a periodic rental payment agreement for the utilization of the Bank's Musharaka share by the customer.
3.6 Operating fixed assets - Tangible
Owned
Operating fixed assets, other than land and buildings, are stated at cost less accumulated depreciation and accumulated impairment losses thereon. Cost includes expenditure that is directly attributable to the acquisition of fixed assets. Land and buildings are stated at revalued amounts less accumulated depreciation.
Subsequent costs are included in the asset's carrying amount or are recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All other repairs and maintenance expenditures are charged to profit and loss account during the financial period in which they are incurred.
Land and buildings are revalued by independent professionally qualified valuer(s). Surplus arising on revaluation is credited to the 'surplus on revaluation of fixed assets' account (net of deferred tax). Under the provisions of the Companies Ordinance, 1984, deficit arising on revaluation of fixed assets is adjusted against the balance in the above-mentioned surplus account. The revaluation is carried out with sufficient regularity to ensure that the carrying amount does not differ materially from that which would have been determined using fair value at the balance sheet date.
Accumulated depreciation on buildings, at the date of revaluation, is eliminated against the gross carrying amount of buildings. The net amount is then restated to the revalued amount.
Surplus on revaluation of fixed assets (net of deferred tax) is transferred to unappropriated profit to the extent of incremental depreciation charged on related assets.
Land is not depreciated. Depreciation on all other fixed assets is calculated using the straight line method to allocate their depreciable cost or revalued amount to their residual values over their estimated useful lives.
The residual values and useful lives of fixed assets are reviewed, and adjusted (if appropriate) at each balance sheet date.
Gains and losses on disposal of fixed assets are included in profit and loss account currently, except that the related surplus on revaluation of fixed assets (net of deferred tax) is transferred directly to unappropriated profits.
Leased
Fixed assets held under finance lease are stated at the lower of fair value of asset and present value of minimum lease payments at the inception of lease, less accumulated depreciation. Financial charges are allocated over the period of lease term so as to provide a constant periodic rate of financial charge on the outstanding liability. Depreciation is charged on the basis similar to owned assets. 105 Notes to the Consolidated Financial Statements For the year ended 31 December 2013
3.7 Intangible assets
Goodwill Goodwill represents the excess of cost of an acquisition over the fair value of the share of net identifiable assets acquired at the date of acquisition. Goodwill is tested annually for impairment and carried at cost less accumulated impairment.
Computer software Acquired computer software licenses are capitalised on the basis of costs incurred to acquire and bring to use the specific software. These costs are amortised over their expected useful lives using the straight line method.
Acquired intangibles in business combination Acquired intangibles in business combination that have finite lives are amortised over their economic useful life based on the manner that benefits of the relevant assets are consumed.
3.8 Impairment of non-financial assets
The carrying amounts of the Groups non-financial assets, other than deferred tax assets, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists then the assets recoverable amount is estimated. An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount.
The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated pre-tax future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.
An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount.
3.9 Staff retirement benefits
Defined benefit plan The Group operates approved funded pension and gratuity schemes for all its non-management employees, and a management pension scheme only for its existing pensioners. Financial statements and notes
For defined benefit plans, the net defined benefit liability /asset recognised in the balance sheet is the deficit or surplus, adjusted for any effect of limiting a net defined benefit asset to the asset ceiling. The deficit or surplus is:
(a) the present value of the defined benefit obligation less; (b) the fair value of plan assets (if any).
The present value of defined benefit obligation is calculated annually by independent actuaries by discounting the estimated future cash flows using an interest rate equal to the yield on high-quality corporate bonds.
Actuarial gains or losses that arise are recognised in other comprehensive income in the period they arise. Service cost and Net interest on net defined benefit liability / (asset) are also recognised in profit and loss account.
Defined contribution plan The Group also operates a defined contribution gratuity scheme for all its management staff and a provident fund scheme for all its permanent staff, contributing at 8.33 percent and 10 percent of basic salary respectively.
3.10 Foreign currency transactions
Transactions in foreign currencies are translated to Pakistan Rupees at exchange rates prevailing at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the reporting date are retranslated to Pakistan Rupees at the exchange rate prevailing at that reporting date. Foreign currency differences arising on retranslation are recognised in profit or loss. 106 Standard Chartered Annual Report 2013 Notes to the Consolidated Financial Statements For the year ended 31 December 2013
3.11 Taxation
Income tax expense comprises of current and deferred tax. Income tax expense is recognised in the profit and loss account except to the extent that it relates to items recognised directly in equity or in other comprehensive income.
Current tax
Current tax is the expected tax payable on the taxable income for the year (using tax rates enacted or substantively enacted at the balance sheet date), and any adjustment to tax payable in respect of previous years.
Deferred tax
Deferred tax is provided for using the balance sheet method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised on temporary differences relating to: (i) the initial recognition of goodwill; and (ii) the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit.
Deferred tax is measured at tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date.
A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the asset can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.
3.12 Revenue recognition
Mark-up / return on advances and investments is recognised on an accrual basis using the effective interest rate method. The effective interest rate is the rate that exactly discounts the estimated future cash payments and receipts through the expected life of the financial asset or liability (or, where appropriate, a shorter period) to the carrying amount of the financial asset or liability.
Where debt securities are purchased at a premium or discount, those premiums/ discounts are amortized through profit or loss account over the remaining maturity, using the Effective Yield method.
Mark-up recoverable on classified loans, advances and investments is recognised on a receipt basis in accordance with the requirements of Prudential Regulations issued by the State Bank of Pakistan and Securities and Exchange Commission of Pakistan. Mark-up on rescheduled / restructured loans, advances and investments is also recognised in accordance with the requirements of these Prudential Regulations.
The Group follows the effective interest method in accounting for the recognition of lease income. Under this method, the unearned lease income i.e. the excess of aggregate lease rentals and the estimated residual value over the cost of the leased assets is deferred and taken to income over the term of the lease, so as to produce a systematic return on the net investment in lease. Unrealised lease income pertaining to non-performing leases is held in suspense account, where necessary, in accordance with the requirements of the Non-Banking Finance Companies and Notified Entities Regulations, 2008. Processing, front end fee, commitment fee, penal charges and commission are recognised as income when realised.
The Group follows the finance method for recognising income on Ijarah contracts commencing prior to 30 June 2008 and accounted for as finance leases. Under this method the unearned income i.e. the excess of aggregate Ijarah rentals (including residual value) over the cost of the asset under Ijarah facility is deferred and then amortised over the term of the Ijarah, so as to produce a constant rate of return on net investment in the Ijarah. For Ijarah arrangements commencing on or after 1 July 2008, Ijarah rentals are recognized as income on accrual basis, as and when rentals become due. In case of Ijarah arrangements with staggered rentals, the income is recognised on a straight line basis over the Ijarah term. Documentation charges, front-end fee and other Ijarah income are recognised as income on receipt basis. Unrealized Ijarah income pertaining to non-performing Ijarahs is held in suspense account, where necessary, in accordance with the requirements of the Prudential Regulations. 107 Notes to the Consolidated Financial Statements For the year ended 31 December 2013
Fees and commission income are generally recognised on an accrual basis when the service has been provided. Fees and commission which in substance amount to an additional interest charge, are recognised over the life of the underlying transaction on a level yield basis.
Dividend income is recognised when the right to receive income is established.
The cost from award credits for loyalty points earned on use of various products of the Bank is measured by reference to their fair value and is recognised when award credits are redeemed.
Murabaha transactions are reflected as receivable at sale price. Actual sale and purchase are not reflected as the goods are purchased by the customer as agent of the Bank. Profit on the sales revenue not due for payment is deferred by recording a credit to 'Deferred Murabaha Income' account.
3.13 Derivative financial instruments
Derivative financial instruments are initially recognised at fair value and are subsequently remeasured at fair value. All derivative financial instruments are carried as assets when fair value is positive and liabilities when fair value is negative. Any change in the fair value of derivative financial instruments is taken to profit and loss account.
3.14 Provisions
Provisions for restructuring costs and legal claims are recognised when: (i) the Group has a present legal or constructive obligation as a result of past events; (ii) it is more likely than not that an outflow of resources will be required to settle the obligation; and (iii) the amount has been reliably estimated.
3.15 Fiduciary activities
The Group commonly acts in fiduciary capacities that result in the holding or placing of assets on behalf of individuals, trusts, retirement benefit plans and other institutions. These assets and income arising thereon are excluded from these financial statements, as they are not assets of the Group.
3.16 Segment reporting
A segment is a distinguishable component of the Group that is engaged either in providing products or services (business segment), or in providing products or services within a particular economic environment (geographical segment), which Financial statements and notes is subject to risks and rewards that are different from those of other segments. The Groups primary format for segment reporting is based on business segments. A brief description of the products and services offered by different segments of the Group is given in note 37 to these financial statements.
3.17 Offsetting
Financial assets and liabilities are set off and the net amount presented in the balance sheet when, and only when, the Group has a legal right to set off the amounts and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously.
3.18 Subordinated liabilities
Subordinated liabilities are initially measured at fair value plus transaction costs, and subsequently measured at their amortised cost using the effective interest method.
3.19 Non-current assets and disposal groups held for sale
Non-current assets and disposal groups comprising of assets and liabilities that are expected to be recovered primarily through sale rather than continuing use are classified as held for sale. Immediately before being classified as held for sale, the assets and components of disposal group are remeasured in accordance with the Group's accounting policies. Thereafter, the assets and disposal group are measured at the lower of their carrying values and fair values less cost to sell. 108 Standard Chartered Annual Report 2013 Notes to the Consolidated Financial Statements For the year ended 31 December 2013
3.20 Share-based compensation
Standard Chartered PLC operates various share-based compensation plans which are accounted for as equity settled share based payment transactions, regardless of inter group repayment arrangements. The cost for such share based payment transactions is determined by reference to the fair value of options at the grant date. The fair value is determined based on the market price or using an appropriate valuation technique. The cost is charged to profit and loss account and credited to equity as a contribution from parent. The liability for these transactions which is based on the fair value of these options at the settlement date is settled through debiting equity.
3.21 Acceptances
Acceptances comprise undertakings by the Bank to pay bills of exchange drawn on customers. The Bank expects most acceptances to be simultaneously settled with the reimbursement from the customers. Acceptances are accounted for as on-balance sheet transactions.
3.22 Basic and diluted earnings per share
The Bank presents basic and diluted earnings per share (EPS) for its shareholders. Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Bank by the weighted average number of ordinary shares outstanding during the period / year. Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding for the effects of all dilutive potential ordinary shares, if any. There were no convertible dilutive potential ordinary shares in issue at 31 December 2013.
3.23 Dividend and appropriation to reserves
Dividend and appropriation to reserves, except appropriation which are required by law after the balance sheet date, are recognised as liability in the Bank's financial statements in the year in which these are approved.
3.24 Borrowings / deposits and their cost
- Borrowings / deposits are recorded at the proceeds received.
- Borrowing / deposit costs are recognised as an expense in the period in which these are incurred using effective mark-up / interest rate method.
3.25 Financial assets and liabilities
Financial instruments carried on the balance sheet include cash and balances with treasury banks, balances with other banks, lendings to financial and other institutions, investments, advances, certain receivables, bills payable, borrowings from financial institutions, deposit accounts and other payables. The particular recognition methods adopted for significant financial assets and financial liabilities are disclosed in the individual policy statements associated with them.
3.26 Provision for guarantee claims and other off balance sheet obligations
Provision for guarantee claims and other off balance sheet obligations are recognised when intimated and reasonable certainty exists for the Bank to settle the obligation. Charge to profit and loss account is stated net of expected recoveries.
3.27 New standards and interpretations not yet adopted
The following standards, amendments and interpretations of approved accounting standards will be effective for accounting periods beginning on or after 01 January 2014:
- IFRIC 21- Levies an Interpretation on the accounting for levies imposed by governments. IFRIC 21 is an interpretation of IAS 37 Provisions, Contingent Liabilities and Contingent Assets. IAS 37 sets out criteria for the recognition of a liability, one of which is the requirement for the entity to have a present obligation as a result of a past event (known as an obligating event). The Interpretation clarifies that the obligating event that gives rise to a liability to pay a levy is the activity described in the relevant legislation that triggers the payment of the levy. 109 Notes to the Consolidated Financial Statements For the year ended 31 December 2013
- Offsetting Financial Assets and Financial Liabilities (Amendments to IAS 32). The amendments address inconsistencies in current practice when applying the offsetting criteria in IAS 32. Financial Instruments: Presentation. The amendments clarify the meaning of currently has a legally enforceable right of set-off; and that some gross settlement systems may be considered equivalent to net settlement.
- Amendment to IAS 36 Impairment of Assets Recoverable Amount Disclosures for Non-Financial Assets. These narrow-scope amendments to IAS 36 Impairment of Assets address the disclosure of information about the recoverable amount of impaired assets if that amount is based on fair value less costs of disposal.
- Amendments to IAS 19 Employee Benefits Employee contributions a practical approach. The practical expedient addresses an issue that arose when amendments were made in 2011 to the previous pension accounting requirements. The amendments introduce a relief that will reduce the complexity and burden of accounting for certain contributions from employees or third parties. The amendments are relevant only to defined benefit plans1 that involve contributions from employees or third parties meeting certain criteria.
- Annual Improvements 2010-2012 and 2011-2013 cycles. The new cycle of improvements contain amendments to the following standards:
- IFRS 2 Share-based Payment. IFRS 2 has been amended to clarify the definition of vesting condition by separately defining performance condition and service condition. The amendment also clarifies both: how to distinguish between a market condition . The amendment also clarifies both: how to distinguish between a market condition and a non-market performance condition and the basis on which a performance condition can be differentiated from a vesting condition.
- IFRS 3 Business Combinations. These amendments clarify the classification and measurement of contingent consideration in a business combination. Further IFRS 3 has also been amended to clarify that the standard does not apply to the accounting for the formation of all types of joint arrangements including joint operations in the financial statements of the joint arrangement themselves.
- IFRS 8 Operating Segments has been amended to explicitly require the disclosure of judgments made by management in applying the aggregation criteria. In addition this amendment clarifies that a reconciliation of the total of the reportable segments assets to the entity assets is required only if this information is regularly provided to the entitys chief operating decision maker. This change aligns the disclosure requirements with those for segment liabilities. Financial statements and notes - Amendments to IAS 16Property, plant and equipment and IAS 38 Intangible Assets. The amendments clarify the requirements of the revaluation model in IAS 16 and IAS 38, recognizing that the restatement of accumulated depreciation (amortization) is not always proportionate to the change in the gross carrying amount of the asset.
- IAS 24 Related Party Disclosure. The definition of related party is extended to include a management entity that provides key management personnel services to the reporting entity, either directly or through a group entity.
- IAS 40 Investment Property. IAS 40 has been amended to clarify that an entity should: assess whether an acquired property is an investment property under IAS 40 and perform a separate assessment under IFRS 3 to determine whether the acquisition of the investment property constitutes a business combination. 110 Standard Chartered Annual Report 2013 Notes to the Consolidated Financial Statements For the year ended 31 December 2013
Note 2013 2012 ------(Rupees in '000) ------
4 CASH AND BALANCES WITH TREASURY BANKS
In hand - Local currency 4.1 2,547,678 2,640,672 - Foreign currencies 2,386,435 2,934,902
With State Bank of Pakistan in: - Local currency current account 12,136,173 12,693,677 - Local currency current account-Islamic Banking 1,120,999 1,362,417 - Foreign currency deposit account Cash reserve account (5% of FE 25) 3,305,342 2,742,536 Special cash reserve account (15% of FE 25) 9,200,051 7,666,714 Local US Dollar collection account 89,112 94,268 With National Bank of Pakistan in: - Local currency current account 1,545,377 1,352,786 32,331,167 31,487,972
4.1 This includes National Prize Bonds of Rs. 1.653 million (2012: Rs. 4.699 million).
5 BALANCES WITH OTHER BANKS
In Pakistan - In current accounts 157,589 337,360 Outside Pakistan - In current accounts 5.1 1,451,343 2,362,858 1,608,932 2,700,218
5.1 This includes balances of Rs.1,399.406 million (2012: Rs..2,310.442 million) held with other branches and subsidiaries of Standard Chartered Group outside Pakistan. Note 2013 2012 6 LENDINGS TO FINANCIAL INSTITUTIONS ------(Rupees in '000) ------Call money lendings - 500,000 Placements 6.1 22,158,840 19,345,269 22,158,840 19,845,269
6.1 This represents placements with other branches and subsidiaries of Standard Chartered Group outside Pakistan at mark-up rates ranging from 0.1 percent to 1.2 percent per annum (2012: 0.1 percent to 0.55 percent per annum), and are due to mature by March 2014. 2013 2012 6.2 Particulars of lending ------(Rupees in '000) ------In local currency - 500,000 In foreign currencies 22,158,840 19,345,269 22,158,840 19,845,269
6.3 Securities held as collateral against lendings to financial institutions
2013 2012 Further Further Held by given as Total Held by given as Total bank collateral bank collateral ------(Rupees in '000) ------Market Treasury Bills ------Pakistan Investment Bonds ------111 Notes to the Consolidated Financial Statements For the year ended 31 December 2013
6.3.1 The market value of securities held as collateral against lendings to financial institutions amounted to Rs. Nil (2012:Rs. Nil million). 2013 2012
Held by Given as Total Held by Given as Total Note bank collateral bank collateral 7 INVESTMENTS ------(Rupees in '000) ------
Held for trading securities Market Treasury Bills 242,549 - 242,549 3,152,257 - 3,152,257 Pakistan Investment Bonds 841,046 - 841,046 653,528 - 653,528 Sukuks 31,122 - 31,122 13,259 - 13,259 Available for sale securities Market Treasury Bills 7.6 102,982,489 - 102,982,489 94,197,619 5,963,886 100,161,505 Pakistan Investment Bonds 7.6 31,149,469 18,640 31,168,109 17,674,933 18,845 17,693,778 Ordinary shares of listed companies 7.7 662,061 - 662,061 662,061 - 662,061 Units / certificates of mutual funds 7.8 1,363 - 1,363 1,363 - 1,363 Term Finance Certificates -unlisted 7.9 285,025 - 285,025 285,025 - 285,025 Ordinary shares of unlisted companies 7.11 3,899 - 3,899 3,899 - 3,899 Sukuk and Ijarah Bonds - unlisted 7.6 &7.10 10,716,277 - 10,716,277 8,764,965 - 8,764,965 Held To Maturity securities Pakistan Investment Bonds 58,268 - 58,268 111,359 - 111,359 Sukuk and Ijarah Bonds - unlisted 58,210 - 58,210 59,225 - 59,225 Investments at cost 147,031,778 18,640 147,050,418 125,579,493 5,982,731 131,562,224 Provision for diminution in the value of investments 7.3 (787,551) - (787,551) (496,353) - (496,353) Investments (net of provisions) 146,244,227 18,640 146,262,867 125,083,140 5,982,731 131,065,871 Surplus on revaluation of held for trading securities - net 7.10.4 10,978 - 10,978 15,850 - 15,850 (Deficit) / surplus on revaluation of available for sale securities - net 106,252 154 106,406 659,364 (82) 659,282 Total Investments - net 146,361,457 18,794 146,380,251 125,758,354 5,982,649 131,741,003 Financial statements and notes 112 Standard Chartered Annual Report 2013 Notes to the Consolidated Financial Statements For the year ended 31 December 2013
7.2 Investments by segment Note 2013 2012 ------(Rupees in '000) ------Federal Government Securities Market Treasury Bills 103,225,038 103,313,762 Pakistan Investment Bonds 32,067,423 18,458,665 GoP Ijarah Sukuk Bonds 9,222,399 7,203,224 Fully paid up ordinary shares Listed companies 662,061 662,061 Unlisted companies 3,899 3,899 Bonds and Term Finance Certificates - unlisted Sukuk and Ijarah Bonds 1,583,210 1,634,225 Term Finance Certificates 285,025 285,025 Other investments (mutual funds) 1,363 1,363
Total investment at cost 147,050,418 131,562,224 Less: Provision for diminution in the value of investments (787,551) (496,353) Investment (net of provisions) 146,262,867 131,065,871 Surplus on revaluation of held for trading securities - net 10,978 15,850 Surplus / (deficit) on revaluation of available for sale securities - net 106,406 659,282 Total Investments - net 146,380,251 131,741,003
7.3 Particulars of provision for diminution in the value of investments
Opening balance 496,353 54,450 Charge for the year 291,390 442,167 Reversals (192) (264) Net charge 291,198 441,903 Closing Balance 7.3.1 787,551 496,353
7.3.1 The details of provision held against investments are as follows:
Ordinary shares / units - available for sale 444,316 444,508 Term Finance Certificates -unlisted 7.9 285,025 - Sukuk bonds - held to maturity 58,210 51,845 787,551 496,353
7.4 Investments include securities having book value of Rs. 18.640 million (2012: Rs. 18.845 million) pledged with the State Bank of Pakistan as security to facilitate T.T. discounting facility to the Bank, including an amount earmarked against the facilities allocated to branches now in Bangladesh.
7.5 Market Treasury Bills and Pakistan Investment Bonds are eligible for discounting with the State Bank of Pakistan.
2013 2012
Rating Cost Market Rating Cost Market Quality of 'Available for Sale' securities Note value value (Rupees in '000) (Rupees in '000) 7.6 Federal Government Securities Market Treasury Bills Unrated 102,982,489 102,863,086 Unrated 100,161,505 100,669,397 Pakistan Investment Bonds Unrated 31,168,109 31,284,265 Unrated 17,693,778 17,918,680 GoP Ijarah Sukuk Bonds 7.10.3 Unrated 9,191,277 9,296,290 Unrated 7,189,965 7,115,437 143,341,875 143,443,641 125,045,248 125,703,514 113 Notes to the Consolidated Financial Statements For the year ended 31 December 2013
2013 2012 Market Market Note Rating Cost value Rating Cost value 7.7 Particulars of shares held - listed 2013 2012 (Rupees in '000) (Rupees in '000) (Number of shares)
- 7,500 Sakrand Sugar Mills Limited Unrated - - Unrated - 36 - 2,800 Bawany Sugar Mills Limited Unrated - - Unrated - 30 - 11,000 Dadabhoy Cement Limited Unrated - - Unrated - 28 - 4,800 Khurshid Spinning Mills Unrated - - Unrated - - - 3,500 Taj Textile Mills Limited Unrated - - Unrated - - - 1 Kohinoor Textile Mills Limited Unrated - - Unrated - - - 2 Sind Provincial Cooperative Bank Unrated - - Unrated - - - 1,646 Allied Bank Limited AA+/A1+ - - AA+/A1+ - 121 18,916,023 18,916,023 Agritech Limited D 662,061 662,061 D 662,061 662,061 662,061 662,061 662,061 662,276 Provision for diminution in the value - note 7.3.1 - (441,311) - (441,400) 662,061 220,750 662,061 220,876 All shares are ordinary shares of Rs. 10 each except otherwise mentioned. 2013 2012 Market Market Rating Cost value Rating Cost value 2013 2012 (Number of Units) (Rupees in '000) (Rupees in '000)
3,447 17,235 National Investment (Unit) Trust AM2- 1,363 10,047 AM2- 1,363 6,950 1,363 10,047 1,363 6,950
Provision for diminution in the value - note 7.3.1 - - - (103) 1,363 10,047 1,363 6,847
Bonds and Term Finance Certificates - unlisted 2013 2012 7.9 Term Finance Certificates of Rs.5,000 each (Rupees in '000) Financial statements and notes
Agritech Limited 147,000 147,000 Azgard Nine Limited 138,025 138,025 285,025 285,025 Provision for diminution in the value - note 7.3.1 (285,025) - - 285,025
2013 2012
Rating Cost Market Rating Cost Market 7.10 Sukuk and Ijarah Bonds of Rs.5,000 each Note value value (Rupees in '000) (Rupees in '000)
Wapda Sukuk Bonds 7.10.1 Unrated 200,000 195,955 Unrated 250,000 245,215 Pakistan International Airlines (PIA) Sukuk Bonds 7.10.2 Unrated 1,325,000 1,325,000 Unrated 1,325,000 1,325,000 1,525,000 1,520,955 1,575,000 1,570,215
7.10.1 Wapda Sukuk Bonds carry mark-up rates 0.25% below 6 months KIBOR. The principal and profit is payable semi-annually with maturity in July 2017.
7.10.2 PIA Sukuk bonds carry mark-up rates 1.75% above 6 months KIBOR. The principal and profit is payable semi-annually with maturity in October 2014.
7.10.3 GoP Ijarah Sukuk Bonds carry mark-up rates of 0.30% below weighted average yield of 6 months treasury bills. The profit is payable semi-annually with principal redemption at maturity falling due between May 2014 and July 2017. 114 Standard Chartered Annual Report 2013 Notes to the Consolidated Financial Statements For the year ended 31 December 2013
7.10.4 Unrealized gain / (loss) on revaluation 2013 2012 of investments classified as held for trading ------(Rupees in '000) ------
Market Treasury Bills 1,185 13,887 Pakistan Investment Bonds 9,422 1,792 GoP Ijarah Sukuk Bonds 371 171 10,978 15,850
7.11 Particulars of shares held - unlisted
2013 2012 2013 2012 2013 2012 (Number of shares) Rating (Rupees in 000) 573,769 573,769 Pakistan Export Finance Guarantee Agency Limited Unrated Unrated 3,004 3,004 Chairman : Mr S.M.Zaeem 8 8 Society for Worldwide Interbank Fund Transfer Unrated Unrated 895 895 3,899 3,899 Provision for diminution in the value of investments - note 7.3.1 (3,004) (3,004) 895 895
8 ADVANCES Note 2013 2012 ------(Rupees in '000) ------
Loans, cash credits, running finances, etc. - In Pakistan 136,142,528 144,477,050 - Outside Pakistan - - 136,142,528 144,477,050 Net investment in Finance Lease / Ijarah Finance - In Pakistan 8.2 5,034,744 4,732,132 - Outside Pakistan - - 5,034,744 4,732,132 Ijarah contracts accounted for under IFAS 2 8.3 4,485,415 4,267,084
Bills discounted and purchased (excluding treasury bills) - Payable in Pakistan 15,873,794 8,659,942 - Payable outside Pakistan 6,890,046 7,353,551 22,763,840 16,013,493 Advances - gross 168,426,527 169,489,759 Provision for non-performing advances 8.5 (22,187,973) (24,571,487) Advances - net of provision 146,238,554 144,918,272
8.1 Particulars of advances - Gross
8.1.1 In local currency 156,115,954 157,553,574 In foreign currencies 12,310,573 11,936,185 168,426,527 169,489,759
8.1.2 Short term (for upto one year) 118,231,354 109,346,340 Long term (for over one year) 50,195,173 60,143,419 168,426,527 169,489,759 115 Notes to the Consolidated Financial Statements For the year ended 31 December 2013
8.2 Net investment in Finance Lease 2013 2012
Later than Later than Not later one Not later one than one and less Over five Total than one year and less than Over five Total year than years five years years five years ------(Rupees in '000) ------
Lease rental receivable 2,033,727 2,595,345 - 4,629,072 1,952,225 2,488,439 187 4,440,851
Residual value 299,118 823,759 - 1,122,877 197,666 843,761 380 1,041,807
Minimum Lease payments 2,332,845 3,419,104 - 5,751,949 2,149,891 3,332,200 567 5,482,658
Financial charges for future periods (390,004) (327,201) - (717,205) (403,318) (347,201) (7) (750,526)
Present value of minimum lease payments 1,942,841 3,091,903 - 5,034,744 1,746,573 2,984,999 560 4,732,132
8.3 Assets under Ijarah arrangements
The following is a statement of assets leased out subsequent to July 1, 2008 that have been accounted for under Islamic Financial Accounting Standard 2, 'Ijarah' (IFAS 2): 2013 2012 Cost Accumulated Net book Cost Accumulated Net book depreciation value depreciation value Tangible ------(Rupees in '000) ------
Plant, machinery and equipment 3,905,207 1,602,686 2,302,521 3,517,476 1,282,497 2,234,979
Motor vehicles 3,683,462 1,500,568 2,182,894 3,102,235 1,070,130 2,032,105
7,588,669 3,103,254 4,485,415 6,619,711 2,352,627 4,267,084
8.4 Advances include Rs. 24,938.439 million (31 December 2012: Rs. 27,473.845 million) which have been placed under non-performing status as detailed below: 2013 Classified Advances Provision Required Provision Held Domestic Overseas Total Domestic Overseas Total Domestic Overseas Total ------(Rupees in '000) ------Category of classification
OAEM 526 - 526 39 - 39 39 - 39 Financial statements and notes Substandard 757,894 - 757,894 178,276 - 178,276 178,276 - 178,276 Doubtful 2,441,610 - 2,441,610 1,178,601 - 1,178,601 1,178,601 - 1,178,601 Loss 21,738,408 - 21,738,408 20,270,595 - 20,270,595 20,270,595 - 20,270,595 24,938,438 - 24,938,438 21,627,511 - 21,627,511 21,627,511 - 21,627,511 General Provision 560,462 - 560,462 560,462 - 560,462 24,938,438 - 24,938,438 22,187,973 - 22,187,973 22,187,973 - 22,187,973
2012 Classified Advances Provision Required Provision Held Domestic Overseas Total Domestic Overseas Total Domestic Overseas Total ------(Rupees in '000) ------Category of classification OAEM 52,273 - 52,273 11,204 - 11,204 11,204 - 11,204 Substandard 1,044,811 - 1,044,811 192,907 - 192,907 192,907 - 192,907 Doubtful 2,586,592 - 2,586,592 1,271,511 - 1,271,511 1,271,511 - 1,271,511 Loss 23,790,169 - 23,790,169 22,523,562 - 22,523,562 22,523,562 - 22,523,562 27,473,845 - 27,473,845 23,999,184 - 23,999,184 23,999,184 - 23,999,184 General Provision 572,303 - 572,303 572,303 - 572,303 27,473,845 - 27,473,845 24,571,487 - 24,571,487 24,571,487 - 24,571,487
At 31 December 2013, the provision requirement has been reduced by Rs. 1,493.662 million (31 December 2012: Rs. 1,294.899 million) being benefit of Forced Sale Value (FSV) of commercial, residential and industrial properties (land and building only) held as collateral, in accordance with the State Bank of Pakistan Prudential Regulations (PR) and SBP Circular 10 dated 21 October 2011. Increase in accumulated profits amounting to Rs. 970.880 million due to the said FSV benefit is not available for distribution of cash and stock dividend. 116 Standard Chartered Annual Report 2013 Notes to the Consolidated Financial Statements For the year ended 31 December 2013
8.5 Particulars of provision against non-performing advances: 2013 2012 Specific General Total Specific General Total ------(Rupees in '000) ------
Opening balance 23,999,184 572,303 24,571,487 21,703,117 641,494 22,344,611 Charge for the year 1,012,124 68,781 1,080,905 4,832,764 36,309 4,869,073 Reversals (2,300,125) (80,622) (2,380,747) (1,692,589) (105,500) (1,798,089) (1,288,001) (11,841) (1,299,842) 3,140,175 (69,191) 3,070,984 Amounts written off (869,541) - (869,541) (923,626) - (923,626) Other movements (214,131) - (214,131) 79,518 - 79,518 Closing balance 21,627,511 560,462 22,187,973 23,999,184 572,303 24,571,487
8.6 Particulars of write offs 2013 2012 ------(Rupees in '000) ------
8.6.1 Against provisions 869,541 923,626 Charged and written off during the year 239,868 325,187 1,109,409 1,248,813 8.6.2 Write-offs of Rs. 500,000 and above 610,947 590,710 Write-offs of below Rs. 500,000 498,462 658,104 1,109,409 1,248,813
8.7 Details of loans written-off of Rs. 500,000 and above
In terms of sub-section (3) of section 33A of the Banking Companies Ordinance, 1962, the statement in respect of written- off loans or any other financial relief of five hundred thousand rupees or above allowed to a person(s) during the year ended 31 December 2013 is given in Annexure 1.
8.8 Particulars of loans and advances to directors, associated companies, etc. 2013 2012 ------(Rupees in '000) ------(i) Debts due by directors, executives or officers of the Group or any of them either severally or jointly with any other persons Balance at beginning of the year 1,732,083 2,274,604 Loans granted during the year 48,464 44,218 Repayments (485,807) (586,739) Balance at end of the year 1,294,740 1,732,083
(ii) Debts due by companies or firms in which the directors of the Group are interested as directors, partners or in the case of private companies as members Balance at beginning of the year - - Loans granted during the year - - Repayments - - Balance at end of the year - -
(iii) Debts due by subsidiary companies, controlled firms, managed modarabas and other related parties Balance at beginning of the year 102,395 126,737 Loans granted during the year 603,329 28,109 Repayments (585,757) (52,451) Balance at end of the year 119,967 102,395 117 Notes to the Consolidated Financial Statements For the year ended 31 December 2013
8.9 Contractual rentals receivable- Ijarah contracts commencing 1 July 2008
2013 2012
Later than Later than Not later one Not later one than one and less Over five and less than Over five years Total than one year years Total year than five years five years ------(Rupees in '000) ------
Rentals receivable 1,977,585 2,731,520 79 4,709,184 1,998,551 2,872,782 700 4,872,033 Residual value 226,991 757,729 - 984,720 92,930 747,888 - 840,818 Total future Ijarah payments receivable 2,204,576 3,489,249 79 5,693,904 2,091,481 3,620,670 700 5,712,851
9 OPERATING FIXED ASSETS Note 2013 2012 ------(Rupees in '000) ------
Capital work-in-progress 9.1 68,780 128,781 Property and equipment 9.2 6,103,964 6,252,803 6,172,744 6,381,584 9.1 Capital work-in-progress Civil works 38,535 5,636 Advance payment towards office equipment and software 9.1.1 30,245 120,624 Consultants' fee and other charges - 2,521 68,780 128,781
9.1.1 This amount includes Rs. 12.57 million (2012: Rs. 8.76 million) which pertains to advance given against purchase of computer software by Standard Chartered Modaraba.
9.2 Property and equipment 2013 Buildings on Leased Furniture, Buildings on hold fixtures and Freehold Leasehold freehold Leasehold Vehicles Total Land Land land improvemen office land ts equipment Cost / Valuations ------(Rupees in '000) ------At 1 January 2013 571,030 3,753,113 261,731 855,624 1,256,790 2,716,226 99,850 9,514,364 Additions during the year - - 19,800 76,792 82,881 395,954 2,822 578,249 Transfers / write offs - - (1,123) (1,528) (132,476) (224,241) - (359,368) Deletions - (146,685) - (33,631) (185) (138,790) (4,463) (323,754) At 31 December 2013 571,030 3,606,428 280,408 897,257 1,207,010 2,749,149 98,209 9,409,491
Accumulated Depreciation At 1 January 2013 - - 66,759 230,932 693,840 2,225,949 44,081 3,261,561
Charge for the year - - 22,642 80,218 74,961 293,693 23,386 494,900 Financial statements and notes Transfers / write offs - - (664) (876) (75,391) (222,079) - (299,010) Deletions - - - (10,562) (157) (136,742) (4,463) (151,924) At 31 December 2013 - - 88,737 299,712 693,253 2,160,821 63,004 3,305,527
Net book value 571,030 3,606,428 191,671 597,545 513,757 588,328 35,205 6,103,964
Rate of depreciation - - 6.67% 6.67% 6.67%-10% 14.28% - 33.33% 33.33%
2012 Buildings on Leased Furniture, Buildings on hold fixtures and Freehold Leasehold freehold Leasehold Vehicles Total Land Land land improvements office land equipment Cost / Valuations ------(Rupees in '000) ------
At 1 January 2012 571,030 3,753,113 261,663 832,728 1,280,649 3,441,810 67,350 10,208,343 Additions during the year - - 68 22,896 80,926 276,182 65,719 445,791 Transfers / write offs - - - - (104,723) (934,104) - (1,038,827) Deletions - - - - (62) (67,662) (33,219) (100,943) At 31 December 2012 571,030 3,753,113 261,731 855,624 1,256,790 2,716,226 99,850 9,514,364
Accumulated Depreciation At 1 January 2012 - - 44,394 152,707 641,392 2,952,913 62,352 3,853,758 Charge for the year - - 22,365 78,225 96,406 274,673 14,934 486,603 Transfers / write offs - - - - (43,906) (934,288) - (978,194) Deletions - - - - (52) (67,349) (33,205) (100,606) At 31 December 2012 - - 66,759 230,932 693,840 2,225,949 44,081 3,261,561
Net book value 571,030 3,753,113 194,972 624,692 562,950 490,277 55,769 6,252,803 Rate of depreciation - - - 6.67% 6.67%-10% 14.28% - 33.33% 33.33% 118 Standard Chartered Annual Report 2013 Notes to the Consolidated Financial Statements For the year ended 31 December 2013
9.3 The Group's owned land and buildings were revalued by an independent accredited professional valuer, Iqbal A. Nanjee & Co. (Private) Limited. The valuation performed by the valuer was based on active market prices, adjusted for any difference in the nature, location or condition of the specific land and building. The date of revaluation was 31 December 2009. The revaluation resulted in a net surplus of Rs. 3,599.739 million over the book value. A similar valuation was carried out last year and no material differences in market value (from the carrying value) were found. If the owned land and buildings were measured using the cost model, the carrying amounts would have been as follows:
2013 2012 ------(Rupees in '000) ------Cost 2,359,114 2,291,371 Accumulated depreciation (790,278) (712,963) Carrying amount 1,568,836 1,578,408
The movement in surplus on revaluation of fixed assets is given in note 20.1 to the financial statements. 9.4 As at 31 December 2013, the cost of fully depreciated fixed assets still in use amounted to Rs 2,183.705 million (2012: Rs. 2,241.287 million). 9.5 Depreciation rates for furniture, fixtures and office equipment are as follows:
Furniture and fixtures 33.33 percent Printers 33.33 percent Other office equipment 20.00 percent Computer equipment 33.33 percent ATM machines 14.28 percent 9.6 Details of disposal of fixed assets whose original cost or book value exceeds Rs. 1 million or Rs 250,000, which ever is less, and assets disposed of to the Chief Executive or to a director or to executives or to a shareholder holding not less than 10% of the voting shares of the bank or to any related party, irrespective of value, are given below:
Particulars Cost Accumulated Book Sale Gain / (Loss) Mode of Particulars of Purchaser depreciation value Proceeds on Sale Disposal
------(Rupees in '000) ------Freehold Land 146,685 - 146,685 308,379 161,694 Tender World Food Program Building on freehold / Leasehold land 24,991 7,322 17,669 6,373 (11,296) Tender World Food Program 8,640 3,240 5,400 5,000 (400) Tender Mr. Muhammad Riaz Furniture, fixtures and 39,034 37,083 1,951 2,119 168 Tender M/S NCR Corporation office equipment 18,766 18,766 784 784 Tender M/S NCR Corporation ------do ------9,059 9,059 - 588 588 Tender M/S National Traders ------do ------6,940 6,940 - 1,651 1,651 Tender M/S Tech-Solution Engineering & Services ------do ------5,239 5,239 - 692 692 Tender M/S National Traders ------do ------4,810 4,784 26 565 539 Tender M/S National Traders ------do ------3,888 3,888 - 404 404 Tender M/S National Traders ------do ------3,709 3,709 - 394 394 Tender M/S Pakistan International ------do ------3,686 3,674 12 506 494 Tender M/S National Traders ------do ------3,018 3,018 - 429 429 Tender M/S National Traders ------do ------2,802 2,802 - 374 374 Tender M/S Pakistan International SJ General Trading ------do ------2,753 2,753 - 152 152 Tender M/S National Traders ------do ------2,581 2,581 - 264 264 Tender M/S Pakistan International ------do ------2,455 2,455 - 366 366 Tender M/S Khan Auctioneers ------do ------2,413 2,403 10 125 115 Tender M/S Pakistan International SJ General Trading ------do ------2,355 2,355 - 184 184 Tender M/S Muhammad Shahid Soomro ------do ------2,205 2,205 - 220 220 Tender M/S Pakistan International SJ General Trading ------do ------2,125 2,125 - 218 218 Tender M/S National Traders ------do ------2,102 2,102 - 236 236 Tender M/S National Traders ------do ------2,015 2,015 - 206 206 Tender M/S Muhammad Shahid Soomro ------do ------1,616 1,616 - 206 206 Tender M/S National Traders ------do ------1,512 1,492 20 217 197 Tender M/S National Traders ------do ------1,388 1,388 - 310 310 Tender M/S Farhan & Company ------do ------1,382 1,382 - 365 365 Tender M/S Farhan & Company ------do ------1,154 1,154 - 221 221 Tender M/S Pakistan International SJ General Trading ------do ------1,108 1,108 - 192 192 Tender M/S Paramount Traders ------do ------1,008 1,008 - 131 131 Tender M/S National Traders Vehicle (Toyota Altis AKX-512) 1,309 1,309 - 652 652 Tender Mr. Chaudhry Adeel Masood Vehicle (Toyota Corolla LZY-1811) 1,227 1,227 - 900 900 Insurance claim M/S Adamjee Insurance 313,975 142,202 171,773 333,423 161,650
Items having book value of less than Rs. 250,000 and cost of less than Rs. 1,000,000:
Short leasehold Property - Cost 185 157 28 63 35 Furniture, fixtures and office equipment 7,667 7,638 29 1,120 1,091 Vehicles 1,927 1,927 - 1,578 1,578 Total 323,754 151,924 171,830 336,184 164,354 119 Notes to the Consolidated Financial Statements For the year ended 31 December 2013
10 INTANGIBLE ASSETS 2013 Customer Goodwill Core Brand Computer deposits relationships Software Total intangible intangible names
------(Rupees in '000) ------Cost At 1 January 2013 26,095,310 1,982,413 774,680 389,400 343,133 29,584,936 Additions during the year ------At 31 December 2013 26,095,310 1,982,413 774,680 389,400 343,133 29,584,936
Amortised At 1 January 2013 - 1,982,413 738,559 246,798 341,568 3,309,338 Charge for the year - - 13,183 38,933 642 52,758 At 31 December 2013 - 1,982,413 751,742 285,731 342,210 3,362,096
Net book value 26,095,310 - 22,938 103,669 923 26,222,840 Rate of amortisation - - - - 20% - 2012 Cost At 1 January 2012 26,095,310 1,982,413 774,680 389,400 341,705 29,583,508 Additions during the year - - - - 1,428 1,428 At 31 December 2012 26,095,310 1,982,413 774,680 389,400 343,133 29,584,936
Amortised At 1 January 2012 - 1,924,272 720,780 207,865 317,256 3,170,173 Charge for the year - 58,141 17,779 38,933 24,312 139,165 At 31 December 2012 - 1,982,413 738,559 246,798 341,568 3,309,338
Net book value 26,095,310 - 36,121 142,602 1,565 26,275,598 Rate of amortisation - - - - 20% -
10.1 As at 31 December 2013, the gross carrying amount of fully amortised intangible assets (computer software) still in use amounted to Rs. 338.350 million (2012: Rs. 338.350 million).
10.2 The recoverable amount for the purpose of assessing impairment on goodwill on acquisition of Union Bank Limited was based on value in use. The calculations are based on the 2014 budget and forecasts for subsequent two years as approved by the management. These have then been extrapolated for a further period of 17 years using a steady long term forecast GDP growth rate and a terminal value determined based on a long term earnings multiple. The cash flows are discounted using a pre-tax discount rate which reflects the current market rate appropriate for the business. For the calculation as at 31 December 2013, the bank has used a long term forecast GDP growth rate of 4.4 percent and a discount rate of 28.7 percent. The management believes that any reasonable possible changes to the key assumptions on which calculation of recoverable amount is based, would not cause the carrying amount to exceed the recoverable amount. Financial statements and notes 120 Standard Chartered Annual Report 2013 Notes to the Consolidated Financial Statements For the year ended 31 December 2013
11 DEFERRED TAX ASSETS / (LIABILITIES) -NET
The following are major deferred tax assets / (liabilities) recognised and movement thereon:
2013
At 1 (Charge) / Debit/ At 31 January credit to profit (credit) December Note 2013 and loss to equity/ 2013 other comprehensive income ------(Rupees in '000) ------Available for sale investments (228,718) - 194,511 (34,207) Provisions for loans and advances 11.1 6,509,475 (1,074,136) - 5,435,339 Other assets (79,291) (7,531) - (86,822) Fixed assets (263,032) 35,363 - (227,669) Surplus on revaluation of Fixed Assets (29,154) 9,090 - (20,064) Goodwill (4,439,830) (874,985) - (5,314,815) Actuarial gains on retirement benefits (21,897) - 9,484 (12,413) 1,447,553 (1,912,199) 203,995 (260,651)
2012
At 1 (Charge) / Debit/ At 31 January credit to profit (credit) December 2012 and loss to equity/ 2012 other comprehensive income ------(Rupees in '000) ------Available for sale investments 121,667 - (350,385) (228,718) Provisions for loans and advances 6,592,754 (83,279) - 6,509,475 Other assets (77,869) (1,422) - (79,291) Fixed assets (280,390) 17,358 - (263,032) Surplus on revaluation of Fixed Assets (33,109) 3,955 - (29,154) Goodwill (3,586,802) (853,028) - (4,439,830) Actuarial gains on retirement benefits (16,345) - (5,552) (21,897) 2,719,906 (916,416) (355,937) 1,447,553
11.1 For income year 2013, the Group has recognised a net Deferred Tax Liability of Rs. 261 million. This liability is net of deferred tax asset of Rs. 5,435 million recognised on Non-performing loans.
The Finance Act, 2010 amended the Seventh Schedule to the Income Tax Ordinance, 2001 whereby the limit for claiming provisions for advances and off balance sheet items in respect of Consumer and SME advances has been enhanced from 1% to 5% of gross Consumer and SME advances. In case of Corporate advances, the limit continues to be 1% of gross Corporate advances.
The management carried out an exercise and based on that concluded that the Group would achieve a deduction for provisions in excess of the limits prescribed by the Income Tax Ordinance, 2001 in future years. Accordingly, deferred tax asset of Rs. 1,195 million has been recognised on such provisions for income years 2009 upto 2013.
The Seventh Schedule has been further amended through Finance Act, 2010 by introducing transitional provisions, whereby amounts provided for against irrecoverable or doubtful advances in tax year 2008 (income year 2007) and prior years, would be allowed in the tax year in which these advances are actually written off.
The management considers that the amendment made vide Finance Act, 2009 in respect of provisions for bad debts being allowed at 1% of total advances is applicable for tax year 2010 (income year 2009), whereas for tax year 2009 (income year 2008), the provision for bad debts would continue to be allowed under the Seventh Schedule at the time of actual write-off.
The deferred tax asset recognized upto December 31, 2008 relating to provisions for advances and off balance sheet items amounting to Rs. 4,240 million has been carried forward. 121 Notes to the Consolidated Financial Statements For the year ended 31 December 2013
Note 2013 2012 12 OTHER ASSETS ------(Rupees in '000) ------Income / mark-up accrued in local currency 4,622,075 3,035,024 Income / mark-up accrued in foreign currencies 77,426 25,895 Advances, deposits, advance rent and other prepayments 741,328 756,349 Receivable from defined benefit plans - 7,300 Advance taxation (payments less provisions) 9,320,011 9,268,127 Branch adjustment account 6,005 168,165 Unrealized gain on forward foreign exchange contracts 1,129,842 167,431 Interest rate derivatives and currency option - positive fair value 21.6.2 580,296 1,535,248 Receivable from SBP / Government of Pakistan 122,790 176,398 Receivable from associated undertakings 3,686 8,109 Receivable from Standard Chartered Bank, Sri Lanka operations 12.4 36,276 152,865 Non-banking assets acquired in satisfaction of claims 12.2 744,251 744,251 Advances against future Murabaha 6,379,093 2,681,333 Advance Federal Excise Duty 188,443 188,443 Commodities under Islamic finance 295,133 - Bank acceptances 12.3 4,930,334 15,322,698 Others 398,895 576,372 29,575,884 34,814,007 Less: Provision against other assets 12.1 (429,028) (556,026) Other Assets - net of provisions 29,146,856 34,257,981
12.1 Provision against other assets
Opening balance 556,026 566,339 Reversal during the year (126,998) (10,313) Closing balance 429,028 556,026
12.2 Based on the last valuation, the market value of non-banking assets acquired in satisfaction of claims amounted to Rs 433.400 million. Accordingly, the differential between carrying amount and market value was provided at the time of valuation.
12.3 Included in these acceptances is Rs. Nil (2012: Rs. 5.233 billion) which have been further discounted by the bank.
12.4 Consequent to Sale and Purchase Agreement (SPA) signed between Standard Chartered Bank, Sri Lanka (SCBSL) and Standard Chartered Bank (Pakistan) Limited (SCBPL), the Sri Lanka branch operations of SCBPL were amalgamated with SCBSL with effect from close of business on 10 October 2008. According to the terms of SPA, unproductive debts, staff loans of SCBPL who are not retained by the purchaser, 'their corresponding housing loans and assets arising from litigation which cannot be assigned are held
in trust with SCBSL. The recoveries made (net of expenses) from such assets are to taken to income from Sri Lanka branch operations, Financial statements and notes as disclosed in note 25 to these financial statements, and consequently recorded as receivable. The Central Bank of SriLanka during the current year had allowed remittance of major portion of the outstanding balance which has been received during the year.
2013 2012 13 BILLS PAYABLE ------(Rupees in '000) ------In Pakistan 6,127,636 5,980,351 Outside Pakistan 412,577 184,516 6,540,213 6,164,867
14 BORROWINGS
In Pakistan 16,476,377 23,372,739 Outside Pakistan 814,798 26,650 17,291,175 23,399,389 14.1 Particulars of borrowings with respect to currencies
In local currency 16,476,377 23,372,739 In foreign currencies 814,798 26,650 17,291,175 23,399,389 122 Standard Chartered Annual Report 2013 Notes to the Consolidated Financial Statements For the year ended 31 December 2013
Note 2013 2012 14.2 Details of borrowings secured / unsecured ------(Rupees in '000) ------Secured Borrowings from State Bank of Pakistan under Export Refinance (ERF) scheme 14.2.1 13,945,205 14,450,505 Repurchase agreement borrowings (Repo) - 5,963,886 Long Term Finance -secured 14.2.2 725,000 - State Bank of Pakistan - LTFF 14.2.3 1,796,279 2,418,056 State Bank of Pakistan - LTF - Export Oriented Projects 14.2.4 3,370 10,938 16,469,854 22,843,385 Unsecured
Call borrowings - 525,000 Overdrawn nostro accounts 14.2.5 821,321 31,004 17,291,175 23,399,389
14.2.1 Mark-up on Export Refinance (ERF) from State Bank of Pakistan is charged at 6.83 percent to 8.4 percent (2012: 8.5 percent to 10 percent) per annum. ERF borrowings also include borrowings under Islamic Export Refinance scheme amounting to Rs. 1.060 billion (2012: Rs. 1.368 billion). These borrowings are secured against demand promissory notes executed by the Bank in favour of State Bank of Pakistan.
14.2.2 This pertains to long term loan facilities obtained by Standard Chartered Leasing Limited which carry mark-up at the rate of 6 month KIBOR plus 0.4% to 0.75% per annum. These are secured by way of hypothecation charge on specific leased assets and lease rentals receivable of the Company.
14.2.3 Mark-up on Long Term Finance Facility (LTFF) from State Bank of Pakistan carry mark up rates ranging from 7 percent to 11 percent (2012: 7 percent to 11 percent) per annum. These loans are secured against promissory notes executed by the Bank in favour of State Bank of Pakistan.
14.2.4 Mark-up on Long Term Finance for Export Oriented Projects (EOP) from State Bank of Pakistan carry mark up rate at 5 percent (2012: 5 percent ) per annum. These loans are secured against promissory notes executed by the Bank in favour of State Bank of Pakistan.
14.2.5 These include overdrawn nostro accounts with other branches and subsidiaries of Standard Chartered Group outside Pakistan amounting to Rs. 807.349 million (2012: Rs. 26.65 million).
Note 2013 2012 15 DEPOSITS AND OTHER ACCOUNTS ------(Rupees in '000) ------Customers
Remunerative - Fixed deposits 26,043,138 31,191,353 - Savings deposits 142,054,293 127,430,005
Non-Remunerative - Current accounts 125,832,808 106,273,203 - Margin accounts 592,409 381,728 - Special exporters' account 850,511 506,714 295,373,159 265,783,003 Financial Institutions - Non-remunerative deposits-current accounts 15.1 1,003,987 815,568 296,377,146 266,598,571
15.1 This includes Rs. 456.852 million (2012: Rs. 254.274 million) against balances of other branches and subsidiaries of Standard Chartered Group operating outside Pakistan.
2013 2012 15.2 Particulars of deposits ------(Rupees in '000) ------
In local currency 231,985,439 211,508,641 In foreign currencies 64,391,707 55,089,930 296,377,146 266,598,571 123 Notes to the Consolidated Financial Statements For the year ended 31 December 2013
Note 2013 2012 16 SUB-ORDINATED LOANS ------(Rupees in '000) ------Term Finance Certificates issued 16.1 2,500,000 2,750,000
16.1 The Group, on 29 June 2012, issued fourth, rated, unsecured, subordinated TFCs of Rs. 2,500 million by way of private placement. Terms for the fourth outstanding issue are as follows:
Year of Issue 2012 Rating AAA Rate 0.75% above the six months Karachi Inter-Bank Offered Rate ("KIBOR") prevailing one working day prior to the beginning of each semi annual period Floor - Ceiling - Repayment 10 years
Note 2013 2012 ------(Rupees in '000) ------17 OTHER LIABILITIES
Mark-up / return / interest payable in local currency 744,070 1,145,672 Mark-up / return / interest payable in foreign currency - - Musharika and accrued profit thereon 17.1 175,717 114,511 Certificates of Musharika 17.2 3,990,379 3,822,244 Accrued expenses 1,984,343 2,012,453 Advance payments 204,804 245,124 Sundry creditors 1,636,358 1,112,467 Unrealized loss on forward foreign exchange contracts 1,130,060 192,609 Unrealized loss on interest rate derivatives and currency options 21.6.2 2,146,183 4,381,831 Payable to defined benefit plans 27,536 - Due to Holding Company 17.3 5,559,289 9,014,703 Dividend payable 21,281 14,643 Unclaimed balances 1,643,340 1,353,896
Provision against off balance sheet obligations 17.4 318,638 134,761 Financial statements and notes Worker's Welfare Fund (WWF) payable 531,620 479,779 Bank acceptances 12.3 4,930,334 15,322,698 Security Deposits 1,947,745 1,732,822 Certificates of Investment 2,495,185 2,852,605 Others 852,228 785,737 30,339,110 44,718,555
17.1 The estimated share of profit payable on participatory and unsecured Musharika facilities ranges from 10.1 % to 10.51 % per annum (Dec 2012: 11.25% to 12.97 % per annum).
17.2 The estimated share of profit payable on participatory and unsecured Musharika facilities ranges from 7.3% to 15.50% per annum and are due to mature by December 2016 (Dec 2012: 7.25% to 15.5% per annum and are due to mature by Nov 2014).
17.3 Due to Holding Company 2013 2012 ------(Rupees in '000) ------On account of reimbursement of executive and general administrative expenses 4,440,883 8,082,781 Royalty and other payable 1,118,406 931,922 5,559,289 9,014,703 17.4 Provision against off-balance sheet obligations
Opening balance 134,761 122,361 Charge for the year 183,877 12,400 Closing balance 318,638 134,761 124 Standard Chartered Annual Report 2013 Notes to the Consolidated Financial Statements For the year ended 31 December 2013
18 SHARE CAPITAL
18.1 Authorized Capital
2013 2012 Note 2013 2012 (Number of shares) ------(Rupees in '000) ------
4,000,000,000 4,000,000,000 Ordinary shares of Rs.10 each 40,000,000 40,000,000
18.2 Issued, subscribed and paid-up Capital
2013 2012 2013 2012 (Number of shares) ------(Rupees in '000) ------
2,939,785,018 2,939,785,018 Ordinary shares of Rs. 10 each Fully paid in cash 29,397,850 29,397,850 Issued in terms of scheme 931,800,003 931,800,003 of amalgamation 18.3 9,318,000 9,318,000
3,871,585,021 3,871,585,021 38,715,850 38,715,850
18.3 These represent 892,554,151 shares of Rs 10/- each issued and allotted at par to Standard Chartered Bank, United Kingdom against transfer of entire undertaking of SCB Branch Business by SCB to the Bank, and 39,245,852 shares issued and allotted at par credited as fully paid up to persons who were registered shareholders of Union Bank. These shares have been issued in accordance with the scheme of amalgamation duly approved by State Bank of Pakistan on 4 December 2006.
18.4 At 31 December 2013, Standard Chartered Bank , United Kingdom, held 98.99% shares of the Bank.
Note 2013 2012 19 Reserves ------(Rupees in '000) ------
Share premium 19.1 1,036,090 1,036,090 Statutory reserve 19.2 6,144,462 4,032,538 7,180,552 5,068,628
19.1 This represents excess of fair value of the shares over par value of shares issued to registered shareholders of Ex-Union Bank in terms of the amalgamation scheme.
19.2 In accordance with the Banking Companies Ordinance, 1962, the Bank is required to transfer twenty percent of its profit of each year to a reserve fund until the amount in such fund equals the paid-up capital of the Bank.
19.3 The Board of Directors in their meeting held on March 5, 2014 has announced a final cash dividend of 14% (Rs. 1.4 per share) in respect of the year ended December 31, 2013 (2012: Re. 1.25 per share). This is in addition to 10% (Re. 1/- per share) interim cash dividend announced during the year. These financial statements for the year ended December 31, 2013 do not include the effect of final dividend appropriations which will be accounted for subsequent to the year end.
20 SURPLUS / (DEFICIT) ON REVALUATION OF ASSETS - NET OF DEFERRED TAX
Note 2013 2012 ------(Rupees in '000) ------Surplus / (deficit) arising on revaluation of: Fixed assets 20.1 3,378,993 3,536,245 Available for Sale Securities 20.2 72,199 430,564 3,451,192 3,966,809 125 Notes to the Consolidated Financial Statements For the year ended 31 December 2013
Note 2013 2012 20.1 Surplus on revaluation of fixed assets - net of tax ------(Rupees in '000) ------
Surplus on revaluation of fixed assets as at 1 January 3,565,399 3,576,699 Surplus realized on disposal of revalued properties (158,101) -
Transferred to unappropriated profit in respect of incremental depreciation charged during the year - net of deferred tax (5,357) (7,345) Related deferred tax liability (2,884) (3,955) (8,241) (11,300) Surplus on revaluation of fixed assets as at 31 December - net of tax 3,399,057 3,565,399
Less: Related deferred tax liability on: Revaluation surplus as at 1 January (29,154) (33,109) Revaluation surplus realized on disposal during the year 6,206 - Incremental depreciation charged during the year transferred to profit and loss account 2,884 3,955 (20,064) (29,154) Surplus on revaluation of fixed assets as at 31 December - net of tax 3,378,993 3,536,245
20.2 Surplus / (deficit) on revaluation of Available for Sale securities - net of tax
Market Treasury Bills (119,403) 507,892 Pakistan Investment Bonds 116,156 224,902 Sukuk and Ijarah Bonds 100,968 (79,314) Listed shares and units of mutual funds 8,685 5,802 106,406 659,282
Related deferred tax (liability) / asset (34,207) (228,718) 72,199 430,564 21 CONTINGENCIES AND COMMITMENTS
21.1 Transaction-related contingent liabilities
Guarantees issued favouring: 21.1.1 - Government 37,738,000 36,307,266
- Others 16,762,338 15,074,852 Financial statements and notes
21.1.1 Guarantees relating to Islamic Banking Business amount to Rs 1,178 million (2012: Rs 1,593 million).
21.2 Trade-related contingent liabilities
Letters of credit 21.2.1 23,967,127 22,946,980
21.2.1 Letters of credit relating to Islamic Banking Business amount to Rs 7,203 million (2012: Rs. 8,287 million). This also includes outstanding balance of Standard Chartered Modaraba's share against letters of credit amounting to Rs. 30.022 million (2012: Rs. 25.572 million).
21.3 Other contingencies
Claims against the Bank not acknowledged as debt 21.3.1 13,713,285 12,683,179
21.3.1 These represent certain claims by third parties against the Bank, which are being contested in the Courts of law. The management is of the view that these relate to the normal course of business and the possibility of an outflow of economic resources is remote. 126 Standard Chartered Annual Report 2013 Notes to the Consolidated Financial Statements For the year ended 31 December 2013
2013 2012 21.4 Commitments in respect of forward foreign exchange contracts ------(Rupees in '000) ------
Purchase from: State Bank of Pakistan 45,491,250 12,336,500 Other banks 40,277,064 19,978,336 Customers 2,490,934 3,018,333
Sale to: State Bank of Pakistan 2,643,500 - Other banks 70,837,253 32,313,696 Customers 3,761,986 1,299,251
The maturities of the above contracts are spread over a period of one year.
21.5 Commitments to extend credit
The Group makes commitments to extend credit in the normal course of its business but these being revocable commitments do not attract any significant penalty or expense if the facility is unilaterally withdrawn.
21.6 Derivative instruments
21.6.1 Product analysis 2013 Interest Rate Swaps FX Options Counterparties No. of Notional No. of Notional Contracts Principal* Contracts Principal * (Rupees in '000) (Rupees in '000) With Banks for Hedging - - - - Market Making 13 17,651,475 22 405,782
With FIs other than banks Hedging - - - - Market Making 4 2,885,652 - -
With other entities for Hedging - - - - Market Making 24 27,689,352 22 405,782
Total Hedging - - - - Market Making 41 48,226,479 44 811,564
2012 Total Market Making 61 76,813,074 602 6,740,750
* At the exchange rate prevailing at the end of the reporting period
Contracts with banks represent contracts entered with branches of Standard Chartered Bank, UK to obtain cover against the contracts with customers, except for 5 contracts with local banks having notional principal of Rs. 10,594 million. 21.6.2 Maturity analysis No. of Notional Mark to Market Interest Rate Swaps and FX Options Contracts Principal Negative Positive Net Remaining ------(Rupees in '000) ------Maturity
Upto 1 month 38 761,131 (17,969) 17,969 - 1 to 3 months 9 5,732,780 (343,675) 63,691 (279,984) 3 to 6 months 2 224,691 (1,195) 1,195 - 6 month to 1 year 3 4,077,283 (269,607) 2,017 (267,590) 1 to 2 year 7 13,157,257 (287,794) 63,111 (224,683) 2 to 3 years 7 11,432,637 (258,618) 230,545 (28,073) 3 to 5 years 15 11,832,255 (958,786) 193,229 (765,557) 5 to 10 years 4 1,820,009 (8,539) 8,539 - Above 10 years - - - - - 85 49,038,043 (2,146,183) 580,296 (1,565,887) 127 Notes to the Consolidated Financial Statements For the year ended 31 December 2013
Note 2013 2012 21.7 Commitments of subsidiaries ------(Rupees in '000) ------
Standard Chartered Leasing 21.7.1 540,836 471,864 Standard Chartered Modaraba 21.7.2 123,063 20,685
21.7.1 The amount represents lease commitments of Standard Chartered Leasing Limited outstanding as at 31 December 2013.
21.7.2 The amount represents outstanding commitments of Standard Chartered Modaraba in respect of letters of comfort as at 31 December 2013. Note 2013 2012 22 MARK-UP / RETURN / INTEREST EARNED ------(Rupees in '000) ------
On loans and advances to customers 17,178,250 18,344,014 On loans and advances to financial institutions 109,474 31,357 On investments in: i) Held for trading securities 126,707 116,824 ii) Available for sale securities 13,537,736 13,135,594 On securities purchased under resale agreements 528,724 574,768 On call money lending / placements 12,447 11,675 31,493,338 32,214,232 23 MARK-UP / RETURN / INTEREST EXPENSED
Deposits 10,283,179 9,766,450 Securities sold under repurchase agreements 278,122 283,605 Call borrowings 19,224 28,287 Borrowings from State Bank of Pakistan under Export Refinance (ERF) scheme 1,244,824 1,352,841 Profit on redeemable capital, musharika and murabaha 359,262 323,871 Term Finance Certificates (sub-ordinated loans) 253,907 256,495 Others 248,657 326,448 12,687,175 12,337,997 24 GAIN ON SALE OF SECURITIES - NET
Federal Government Securities
Market Treasury Bills 359,016 740,732 Financial statements and notes Pakistan Investment Bonds 326,559 286,317 Ijarah Sukuks 46,593 63,449 732,168 1,090,498 Equity Securities - Listed 481 80,455 732,649 1,170,953 25 OTHER INCOME
Income from Sri Lanka branch operations 12.4 10,619 15,457 Rent on property 32,281 38,721 Gain / (Loss) on disposal of fixed assets 164,354 37,090 Gain / (Loss) on derivatives (1,301,971) 699,858 Gains on assets fair valued at acquisition 214,241 146,702 Others 57,807 68,415 (822,669) 1,006,243 128 Standard Chartered Annual Report 2013 Notes to the Consolidated Financial Statements For the year ended 31 December 2013
Note 2013 2012 26 ADMINISTRATIVE EXPENSES ------(Rupees in '000) ------
Salaries, allowances, etc. 5,101,125 4,799,704 Charge / (income) for defined benefit plans 7,739 8,341 Contributions to defined contribution plans 234,710 297,388 Rent, taxes, insurance, electricity, etc. 1,274,763 1,274,638 Legal and professional charges 105,327 110,508 Communications 440,333 450,567 Repairs and maintenance 760,646 894,762 Stationery and printing 195,331 211,050 Advertisement and publicity 264,792 173,706 Donations 26.1 24,540 16,100 Auditors' remuneration 26.2 21,055 21,401 Depreciation 494,900 486,603 Amortization 52,758 139,165 Traveling, conveyance and vehicles' running 186,403 224,351 Reimbursement of executive and general administrative expenses 26.3 (977,596) 4,206,039 Royalty 119,065 137,459 Reward and bonus points redemption 103,031 123,617 Premises security and cash transportation services 284,273 292,098 Others 272,833 178,050 8,966,028 14,045,547
26.1 Details of the donations given in excess of Rs. 100,000 are given below:
Donee Institute of Business Administration 8,000 7,000 The Citizen Foundation 1,100 2,500 The Kidney Centre 26.1.1 2,000 2,500 Lahore University of Management Sciences 2,400 2,400 SST Public School Rashidabad - 1,200 HOPE - 500 Habib University 4,000 - Aman Foundation 3,100 - The Hunar Foundation 3,940 -
26.1.1 Mr. Mohsin Ali Nathani, CEO of the bank is also a member of Board of Governors of The Kidney Centre.
26.2 Auditors' remuneration
Audit fee 17,928 17,133 Fee for audit of pension, gratuity and provident funds 700 450 Special certifications and others 1,184 2,880 Taxation services - - Out-of-pocket expenses 1,243 938 21,055 21,401
26.3 During the year, State Bank of Pakistan has partially restricted the remittance of certain outsourcing charges and accordingly the excess accrual amounting to Rs. 3,005 million has been reversed.
26.4 Total cost for the year included in Administrative Expenses relating to outsourced activities is Rs. 2,464 million. This includes payments to local companies for obtaining routine services such as personnel for collection and recoveries, contact centre, service quality and technology maintenance, courier services and executive and general administrative expenses of SCB UK. 129 Notes to the Consolidated Financial Statements For the year ended 31 December 2013
2013 2012 27 OTHER PROVISIONS / ASSET WRITE OFFS ------(Rupees in '000) ------
Fixed asset write offs 60,358 60,633
Other provisions Reversal of provision against receivable under cross (120,792) (10,313) currency swaps arrangement Others 671 1,339 (120,121) (8,974) (59,763) 51,659
28 OTHER CHARGES
Net charge / (reversal) against fines and penalties imposed by SBP 1,821 (2,029) Worker's Welfare Fund (WWF) 335,728 192,067 337,549 190,038
29 TAXATION
For the year - Current 3,735,531 2,338,939 - Deferred 1,912,199 916,416 5,647,730 3,255,355 For prior years 21,136 21,136 5,668,866 3,276,491
29.1 Relationship between tax expense and accounting profit
Profit before taxation 16,368,185 9,322,355
Tax at the applicable tax rate of 35% (2012: 35%) 5,728,865 3,262,824 Expenses that are not deductible in determining taxable income 10,174 7,583 Income (dividend, capital gain etc.) at reduced rates (65,606) (18,902) Prior year provision 21,136 21,136
Others (25,703) 3,850 Financial statements and notes 5,668,866 3,276,491 29.2 Standard Chartered Bank (Pakistan) Limited The return for income year 2013 (Tax Year 2014) is due for filing by 30 September 2014. The tax department amended the assessments for income years 2007 to 2012 (tax years 2008 to 2013 respectively) under the related provisions of the Income Tax Law, determining additional tax liability on account of various issues (such as disallowances of expenses relating to provision against loans and advances, goodwill amortisation etc.). The resultant tax demands of Rs. 10,155 million have been paid by the Bank. Appeals against the amended assessment orders are pending before different appellate forums. The management considers that a significant amount of the additional tax liability is the result of timing differences and is confident that the issues in the above mentioned tax years will be decided in favour of the Bank at appellate forums. Consequently, no additional provision is required. The Tax Authorities have passed an order for the income years 2009 and 2010 levying Federal Excise Duty amounting to Rs. 188 million on certain items. The Bank is contesting the order in the appeal. The Bank has paid entire amount under protest. Further, an order for income year 2011 levying Federal Excise Duty of Rs. 515.6 million has been issued. The demand has been stayed by the Sindh High Court. 29.3 Standard Chartered Bank Branch Operations The assessments have been finalized upto and including tax year 2006. The Banks / departmental appeals for the assessment / tax years 1976-77 to 2006 are pending before different appellate forums on various issues. The management expects favourable decisions in pending appeals and consequently, no additional provision is required. 130 Standard Chartered Annual Report 2013 Notes to the Consolidated Financial Statements For the year ended 31 December 2013
29.4 Union Bank Limited The tax assessments for the assessment years 1993-94 through tax year 2007 are pending at various appeal forums against certain disallowances. The management expects favourable decision in pending appeals and consequently, no additional provision is required.
2013 2012 30 EARNINGS PER SHARE - BASIC AND DILUTED ------(Rupees in '000) ------Profit for the year attributable to equity holders of the Group 10,559,620 5,945,685
Weighted average number of ordinary shares in issue during the year 3,871,585,021 3,871,585,021 (Rupees) Earnings per share - basic and diluted 2.73 1.54
2013 2012 31 CASH AND CASH EQUIVALENTS ------(Rupees in '000) ------Cash and balances with treasury banks 32,331,167 31,487,972 Balances with other banks 1,608,932 2,700,218 33,940,099 34,188,190
32 STAFF STRENGTH Number
Permanent 3,008 3,076 Temporary / on contractual basis / direct contracts 9 4 Group's own staff at the end of the year 3,017 3,080 Outsourced 1,572 1,961 Total Staff Strength 4,589 5,041
33 DEFINED BENEFIT PLANS
33.1 General description
Non Management Staff Pension Fund
The plan provides pension calculated at 50% of the average pensionable salary after completing 30 years of service. The employees of the bank are entitled to either pension or gratuity, but not both. However, the employees of ANZ Grindlays Bank transferred to the bank are entitled to both pension and gratuity and the minimum number of years required for entitlement of pension is 25 years for these employees. Pension is calculated as 1/120 times the last drawn merged salary for each year of service.
Non Management Staff Gratuity Fund
The plan provides a lump sum gratuity calculated at one month's salary for each completed year of service (maximum 40 months) after completing 5 years of service. For the employees of ex-ANZ Grindlays Bank, the plan provides a lump sum calculated at 50% of last drawn merged salary for each completed year of service (maximum 40 months) after completing 5 years of service. However, if the employee is not entitled for pension, the percentage is increased to 100%. The employees of SCB are entitled to either pension or gratuity, but not both.
Management Staff Pension Fund
The plan is closed to active employees. The entire liability is in respect of existing pensioners.
33.2 Principal Actuarial Assumptions
The last actuarial valuation of the scheme was carried out on 31 December 2013 and the key assumptions used for actuarial valuation were as follows: 2013 2012 Discount rate 12.75% p.a. 12% p.a. Expected rate of increase in salary in future years 12.75% p.a. 12% p.a. Expected rate of return on plan assets 12.75% p.a. 12% p.a. Expected long term rate of increase in pension 6.75% p.a. 6% p.a. Mortality rate LIC (1975-79) ultimate mortality LIC (1975-79) ultimate mortality table rated down one year table rated down one year Withdrawal rate Light Light 131 Notes to the Consolidated Financial Statements For the year ended 31 December 2013
SCB Non Management SCB Non Management SCB Management Total Pension Fund Gratuity Fund Pension Fund 2013 2012 2013 2012 2013 2012 2013 2012 33.3 Reconciliation of (receivable) / payable from / (Rupees in '000) to defined benefit plan
Present value of defined benefit obligations 59,346 60,408 100,765 69,634 46,716 38,387 206,827 168,429 Fair value of plan assets (82,838) (79,928) (52,389) (46,960) (44,064) (48,841) (179,291) (175,729) (Asset) / liability recognised (23,492) (19,520) 48,376 22,674 2,652 (10,454) 27,536 (7,300)
33.4 Movement in defined benefit obligation
Obligation as at 1 January 60,408 68,506 69,634 55,950 38,387 45,189 168,429 169,645 Current service cost 504 600 2,863 2,465 - - 3,367 3,065 Prior Service Cost - - 5,144 - - - 5,144 - Interest cost 6,880 8,446 8,159 7,220 4,270 5,443 19,309 21,109 Benefits paid (4,771) (5,177) - - (5,309) (5,923) (10,080) (11,100) Actuarial (gain) / loss on obligation (3,675) (11,967) 14,965 3,999 9,368 (6,322) 20,658 (14,290) Past service cost resulting from change in Rules ------Obligation as at 31 December 59,346 60,408 100,765 69,634 46,716 38,387 206,827 168,429
33.5 Movement in fair value of plan assets
Fair value as at 1 January 79,928 76,101 46,960 41,739 48,841 51,583 175,729 169,423 Interest income on plan asset 9,118 8,523 5,438 4,657 5,525 2,653 20,081 15,833 Contribution by the bank ------Benefits paid (4,771) (5,177) - - (5,309) (5,923) (10,080) (11,100)
Actuarial gain / (loss) on plan assets (1,437) 481 (9) 564 (4,993) 528 (6,439) 1,573 Fair value as at 31 December 82,838 79,928 52,389 46,960 44,064 48,841 179,291 175,729
33.6 Movement in (receivable) / payable from / to defined benefit plan
Balance as at 1 January (19,520) (7,595) 22,674 14,211 (10,454) (6,394) (7,300) 222 Charge for the year (1,734) 523 10,728 5,028 (1,255) 2,790 7,739 8,341 Contribution to the fund during the year ------Actuarial (gain) / loss on plan assets (2,238) (12,448) 14,974 3,435 14,361 (6,850) 27,097 (15,863) Balance as at 31 December (23,492) (19,520) 48,376 22,674 2,652 (10,454) 27,536 (7,300)
33.7 Charge for defined benefit plan
Current service cost 504 600 2,863 2,465 - - 3,367 3,065 Interest cost 6,880 8,446 8,159 7,220 4,270 5,443 19,309 21,109 Expected return on plan assets (9,118) (8,523) (5,438) (4,657) (5,525) (2,653) (20,081) (15,833) Recognition of past service cost - - 5,144 - - - 5,144 - (1,734) 523 10,728 5,028 (1,255) 2,790 7,739 8,341
33.8 Actual return on plan assets Financial statements and notes
- Expected return on plan assets 9,118 8,523 5,438 4,657 5,525 2,653 20,081 15,833 - Actuarial gain / (loss) on plan assets (1,437) 481 (9) 564 (4,993) 528 (6,439) 1,573 7,681 9,004 5,429 5,221 532 3,181 13,642 17,406 33.9 Cumulative amount of actuarial gains / (losses) recognised in comprehensive income 33,609 31,371 (30,817) (15,843) 32,674 47,035 35,466 62,563
33.10 Expected contributions for next year - - - -
33.11 Components of plan assets as a percentage of total plan assets
Bonds 33% 98% 22% 93% 97% 91% Cash and net current assets 67% 2% 78% 7% 3% 9% Others 0% 0% 0% 0% 0% 0%
2013 2012 2011 2010 2009 33.12 Five year data on surplus/ (deficit) of the plans ------(Rupees in '000) ------and experience adjustments
Present value of defined benefit obligation 206,827 168,429 169,645 138,264 136,940
Fair value of plan assets 179,291 175,729 169,423 157,179 154,680
Deficit / (Surplus) 27,536 (7,300) 222 (18,915) 17,740
Experience adjustments on plan liabilities - loss / (gain) 5,373 (18,000) (741) (4,247) (7,621)
Experience adjustments on plan assets - loss / (gain) 6,439 (7,637) (3,889) 330 3,566 132 Standard Chartered Annual Report 2013 Notes to the Consolidated Financial Statements For the year ended 31 December 2013
34 SHARE BASED PAYMENTS The Bank's employees participate in the following share compensation plans operated globally by the ultimate holding company, Standard Chartered Plc (SCPLC). For employees in Pakistan, the Group has changed its arrangement to issue shares of SCPLC upon meeting the vesting conditions. Previously the Group operated cash equivalent or "phantom" arrangements under which employees can receive a cash benefit linked to either the growth in Group's share (Sharesave scheme) or the value of the Group's share (restricted / performance share awards) and the arrangement did not give an option to the Bank's employees to buy SCPLC shares. The market value of shares is denominated in pounds sterling at the time of grant. Phantom scheme not yet vested are still being accounted for cash settled basis. The total expense recognised in respect of above schemes on equity settled basis amounts to Rs. 59.741 million (2012: Rs.2.803 million) and is also included in managerial remuneration note 35. As also explained in note 3.20 in detail, the Bank's liability towards its parent, however continues to be determined and recorded on cash settled basis for options not yet vested. The main features of each plan are as follows: i) Standard Chartered Share Plan The 2012 Standard Chartered Share Plan replaced all the Groups existing discretionary share plan arrangements following approval by shareholders at the Groups Annual General Meeting on 5 May 2011. It is the Groups main share plan, applicable to all employees with the flexibility to provide a variety of award types including performance shares, deferred awards (shares or cash) and restricted shares. Performance and restricted share awards will generally be in the form of nil price options to participate in the shares of SCPLC. The remaining life of the plan is ten years. Movements in the number of share options held by the Bank's employees are as follows:
2013 Weighted 2012 Weighted average average (Number exercise price (Number exercise price in '000) £ per share in '000) £ per share At 1 January 70 - 26 - Granted during the year 36 - 45 - Exercised during the year (8) - - - Lapsed during the year (2) - (1) - Notional dividend 1 - - - At 31 December 97 70
The weighted average price at the time the options were exercised during 2013 was £ NIL (2012: £ NIL). 2013 2012 Range of exercise price Weighted Number Weighted average remaining life Weighted Number Weighted average remaining life average ('000) Expected Contractual average ('000) Expected Contractual exercise price years years exercise price years years
NIL -97 10 5.68 / 8.26 -70 10 6.1 / 8.8 ii) International Sharesave Scheme The International Sharesave Scheme was first launched in 1996 and made available to all employees of the Bank. Employees have the choice of opening a three-year or a five-year savings contract. Within a period of six months after the third or fifth anniversary, employees may exercise the awards and receive any benefit in cash; alternatively, the employee may elect to have the savings, plus interest, repaid in cash. The price at which they may purchase shares is at a discount of up to 20 percent on the share price at the date of the invitation. There are no performance conditions attached to options granted. The options granted do not confer any right to participate in any share issue of any other company. Movements in the number of share options held by the Bank's employees are as follows:
2013 Weighted 2012 Weighted average average (Number exercise price (Number exercise price in '000) £ per share in '000) £ per share At 1 January 68 11.88 118 11.42 Granted during the year 36 11.78 - - Exercised during the year (4) 10.98 (19) 10.36 Lapsed during the year (16) 14.07 (31) 11.03 Adjustment due to right issue - - - - At 31 December 84 11.91 68 11.88
The weighted average price at the time the options were exercised during 2013 was £10.98 (2012: £10.36). 133 Notes to the Consolidated Financial Statements For the year ended 31 December 2013
2013 2012 Range of exercise price Weighted Number Weighted average remaining life Weighted Number Weighted average remaining life average ('000) Expected Contractual average ('000) Expected Contractual exercise price years years exercise price years years
£9.8/£14.63 11.9184 3.33/5.33 1.31/3.42 11.8818 3.33/5.33 2.1
The intrinsic value of vested International Sharesave cash-settled awards as at 31 December 2013 was Rs. 41,688 thousand (2012: Rs. 9,935 thousand). iii) Restricted Share Scheme The Restricted Share Scheme is a discretionary share incentive scheme for high performing and high potential staff at any level of the organisation whom the Group wishes to motivate and retain. Except upon appointment when an executive director may be granted an award of restricted shares, the Restricted Share Scheme is not applicable to the Group's executive directors, as it has no performance conditions attached to it. Fifty per cent of the award vests two years after the date of the grant and the remainder after three years. The awards granted under this scheme are nil cost options with any benefit payable in cash. The options granted do not confer any right to participate in any share issue of any other company. Movements in the number of share options held by the Bank's employees are as follows: 2013 Weighted 2012 Weighted average average (Number exercise price (Number exercise price in '000) £ per share in '000) £ per share At 1 January 56 - 110 - Granted during the year - - - - Exercised during the year (25) - (45) - Lapsed during the year (10) - (10) - Notional dividend 1 1 At 31 December 22 - 56 -
The weighted average price at the time the options were exercised during 2013 was Nil (2012: Nil). 2013 2012 Range of exercise price Weighted Number Weighted average remaining life Weighted Number Weighted average remaining life average ('000) Expected Contractual average ('000) Expected Contractual exercise price years years exercise price years years
N/a -22 - 3.13 -56 - 3.99
The intrinsic value of vested Restricted Share Scheme cash-settled awards as at 31 December 2013 was Rs. 15,332 thousand (2012 : Rs. 33,143 thousand). iv) Supplementary Restricted Share Scheme The Group operates a Supplementary Restricted Share Scheme which can be used to defer part of an employee's annual bonus in shares. The plan is principally used for employees in the global markets area and is similar to the RSS outlined above for three important factors: executive directors are specifically prohibited from the plan; no new shares can be issued to satisfy awards; and there is no individual annual limit.
Movements in the number of share options held by the Bank's employees are as follows: Financial statements and notes 2013 Weighted 2012 Weighted average average (Number exercise price (Number exercise price in '000) £ per share in '000) £ per share At 1 January 1 - 2 - Granted during the year - - - - Exercised during the year - - (3) - Lapsed during the year - - 2 - Adjustment due to right issue - - - - At 31 December 1 - 1 -
2013 2012 Range of exercise price Weighted Number Weighted average remaining life Weighted Number Weighted average remaining life average ('000) Expected Contractual average ('000) Expected Contractual exercise price years years exercise price years years
N/A -1 5 4.07 -1 5 5.03
The intrinsic value of vested Supplementary Restricted Share Scheme cash-settled awards as at 31 December 2013 was Rs. 1,875 thousand (2012 : Rs. 414 thousand). v) Performance Share Plan The Performance Share Plan is designed as an intrinsic part of total remuneration for the Group's executive directors and for a small number of the Group's most senior executives. The awards granted under this scheme are nil cost options. Certain performance criteria need to be met before the options can be exercised. The option granted do not confer any right to participate in any share issue of any other company. Movements in the number of share options held by the Bank's employees are as follows: 134 Standard Chartered Annual Report 2013 Notes to the Consolidated Financial Statements For the year ended 31 December 2013
2013 2012 (Number (Number in '000) in '000) At 1 January 12 39 Granted during the year - - Exercised during the year (10) (18) Lapsed during the year (1) (9) Adjustment due to right issue - - At 31 December 1 12
2013 2012 Range of exercise price Weighted Number Weighted average remaining life Weighted Number Weighted average remaining life average ('000) Expected Contractual average ('000) Expected Contractual exercise price years years exercise price years years
N/a -1 - 4.19 -12 - 7.5
The intrinsic value of vested Performance Share Plan cash-settled awards as at 31 December 2013 was Rs. 2,590 thousand (2012: Rs. 1,833 thousand).
35 COMPENSATION OF CHIEF EXECUTIVE AND EXECUTIVES
Chief Executive Directors Executives 2013 2012 2013 2012 2013 2012 Note ------(Rupees in '000) ------
Director's remuneration / fees 35.1 - - 3,630 3,160 - -
Managerial remuneration 35.3 112,164 130,359 - - 1,946,113 1,812,181
Contribution to defined contribution plan 3,422 3,422 - - 190,748 178,211
Rent and house maintenance 7,467 7,467 - - 416,786 388,696
Medical 1,867 1,867 - - 104,809 108,296
Others 375 416 - - 41,256 32,111
125,295 143,531 3,630 3,160 2,699,712 2,519,495
Number of persons 1 1 3 3 985 907
35.1 The director's remuneration / fees represents remuneration paid to the Bank's 3 non-executive directors (2012: 3) for attending Board and Sub- Committee meetings.
35.2 The Chief Executive is entitled to Bank provided free use of furnished accommodation. The Chief Executive and some of the executives are also provided with Bank maintained cars. In addition, the Chief Executive and some of the executives are also reimbursed for cost of medical expenses and other benefits like club subscription, children education etc. as per their terms of employment.
35.3 Managerial remuneration also includes charge against share compensation plans.
36 FAIR VALUE OF FINANCIAL INSTRUMENTS
On-balance sheet financial instruments
Except for investment unlisted companies, fixed term advances of over one year, staff loans and fixed term deposits of over one year, the fair value of on balance sheet financial assets and liabilities are not significantly different from their book value as these assets and liabilities are either short term in nature or are frequently re-priced. The fair value of fixed term advances of over one year, staff loans, fixed term deposits of over one year and investment in equity of unlisted companies cannot be calculated with sufficient reliability due to non-availability of relevant active market for similar assets and liabilities. The fair value of investment classified as held to maturity amounted to Rs. 58.755 million (2012: Rs. 116.513 million). 135 Notes to the Consolidated Financial Statements For the year ended 31 December 2013
37 SEGMENT DETAILS WITH RESPECT TO BUSINESS ACTIVITIES Wholesale Consumer Banking Banking Total The segment analysis with respect to business activity. ------(Rupees in '000) ------2013 Internal Income (12,963,196) 13,125,586 162,390 Net mark-up / return / interest income 20,479,784 (1,673,621) 18,806,163 Non mark-up / non interest income 2,727,754 3,153,294 5,881,048 Operating income 10,244,342 14,605,259 24,849,601 Non mark-up / non interest expenses 2,197,048 7,046,766 9,243,814 Internal non mark-up / non interest expenses 47,662 114,728 162,390 Operating profit before provisions and taxation 7,999,632 7,443,765 15,443,397 Direct write-offs / provisions against non-performing loans and advances - net of recoveries (1,535,820) 319,834 (1,215,986) Provision for diminution in the value of investments 291,198 - 291,198 Profit before taxation 9,244,254 7,123,931 16,368,185 Other segment items: Depreciation on tangible fixed assets 84,458 410,442 494,900 Amortisation on intangible assets 15,669 37,089 52,758 Segment assets (gross) 364,059,245 69,605,491 433,664,736 Segment non performing loans 14,101,367 10,837,071 24,938,438 Segment provision required 12,641,502 9,546,471 22,187,973 Segment liabilities 117,632,278 235,676,017 353,308,295 Segment return on net assets (ROA) (%) * 2.63% 11.86% 3.98% Segment cost of funds (%) ** 2.64% 12.74% 4.03%
2012 ------(Rupees in '000) ------Internal Income (13,443,551) 13,681,438 237,887 Net mark-up / return / interest income 20,994,416 (1,118,181) 19,876,235 Non mark-up / non interest income 4,635,118 2,676,845 7,311,963 Operating income 12,185,983 15,240,102 27,426,085 Non mark-up / non interest expenses 4,555,659 9,731,585 14,287,244 Internal non mark-up / non interest expenses 55,062 182,825 237,887 Operating profit before provisions and taxation 7,575,262 5,325,692 12,900,954 Direct write-offs / provisions against non-performing loans and advances - net of recoveries 1,364,112 1,772,584 3,136,696 Provision for diminution in the value of investments - net 441,903 - 441,903 Financial statements and notes Profit before taxation 5,769,247 3,553,108 9,322,355 Other segment items: Depreciation of tangible fixed assets 67,542 419,061 486,603 Amortisation of intangible assets 37,268 101,897 139,165 Segment assets (gross) 360,362,192 64,317,124 424,679,316 Segment non performing loans 16,422,552 11,051,293 27,473,845 Segment provision required 14,797,851 9,773,636 24,571,487 Segment liabilities 129,454,711 214,176,671 343,631,382 Segment return on net assets (ROA) (%) * 1.67% 6.51% 2.33% Segment cost of funds (%) ** 6.11% 3.17% 4.15%
* Segment ROA = Profit before taxation / (Segment assets - Segment provisions)
** Segment cost of funds have been computed based on the average balances.
The management reviews the performance of Client Coverage and Global Markets as one business segment, namely Wholesale Banking. Therefore the business activities of the Bank have been presented in two segments, Wholesale and Consumer Banking.
Wholesale banking
Deposits, trade, advisory services and other lending activities (including murabaha and ijarah) for corporates and financial institutions. It also includes the overall management of treasury of the Bank, which entails various cash and interest risk management products for customers. The products include FX forwards, FX options and interest rate swaps. 136 Standard Chartered Annual Report 2013 Notes to the Consolidated Financial Statements For the year ended 31 December 2013
Consumer Banking
Wealth management, deposits, mortgages, auto finance, unsecured lending (credit cards, personal loans etc.), consumer leases and SME lending (including SME trade).
38 RELATED PARTY TRANSACTIONS
Related parties comprise of Standard Chartered Plc., ultimate parent company, its other subsidiaries and branches, key management personnel, employees' retirement benefit funds and other associated undertakings. The transactions with related parties are conducted at commercial / agreed terms. The Group also provides advances to employees at reduced rates in accordance with their terms of employment.
The transactions and balances with related parties are summarised as follows:
Note 2013 2012 OUTSTANDING BALANCES ------(Rupees in '000) ------Group Nostro balances with other subsidiaries and branches of the holding company 1,399,406 2,310,442 Overdrawn nostro balances with other subsidiaries and branches of the holding company 807,349 26,650 Vostro balances of other subsidiaries and branches of the holding company 456,852 254,274 Placements with other subsidiaries and branches of the holding company 22,158,840 19,345,269 Deposits of group company 38.1 2,909 12,734 Due to holding company 5,559,289 9,014,703 Due to group company 37,742 33,867 Due from other subsidiaries and branches of the company 63,560 158,311 Interest receivable from group companies 22,516 1,552 Inter-company derivative assets 36,469 433,119 Inter-company derivative liabilities 408,725 752,018 Other receivables - SLA 450 416 Transaction-related contingent liabilities - Guarantees 17,614,405 21,603,912 Commitments in respect of forward foreign exchange contracts 2,608,454 6,101,969 Derivative instruments- Interest rate swaps - Notional 7,057,768 18,327,414 Derivative instruments- FX options - Notional 405,782 3,370,375
Key management personnel Loans and advances to key management personnel 38.1 90,001 102,395 Deposits of key management personnel 38.1 131,167 181,751
Others Loans and advances to customers with common directorship 38.1 29,966 - Deposits by staff retirement benefit funds 38.1 325,577 61,450 Deposits by customers with common directorship 38.1 95,858 40,687 Accrued interest receivable against loans and advances to customers with common directorship 2,482 - (Payable to) / receivable from defined benefit plans (27,536) 7,300 Derivative asset 9,775 65,000 Derivative liabilities - 8,504 Transaction-related contingent liabilities - Guarantees 29,479 235,170 Trade-related contingent liabilities - Letter of Credit 43,288 35,434
PROFIT AND LOSS
Group Mark-up / return / interest earned 110,596 49,496 Mark-up / return / interest expensed 230 12,401 Fee and commission expense 5,310 93 Fee and commission income 14,321 16,513 Reimbursement of executive and general administrative expenses 26.3 (977,596) 4,206,039 Payment to group company for direct sales services rendered 731,142 697,879 Reimbursement of administrative expenses (including rent and other charges) 5,600 4,466 Net loss on inter-company derivatives 53,356 301,251 Royalty expense 119,065 137,459 Dividend paid 8,622,763 6,706,700 137 Notes to the Consolidated Financial Statements For the year ended 31 December 2013
Note 2013 2012 ------(Rupees in '000) ------Key management personnel Mark-up / return / interest earned 3,848 3,670 Mark-up / return / interest expensed 2,316 4,415 Salaries and benefits 399,093 518,809 Post retirement benefits 18,164 16,938 Remuneration / fee paid to non-executive directors 3,630 3,160
Others Contribution to defined contribution plans - net of payments received 234,710 297,388 Charge for defined contribution plans 234,710 297,388 Net charge / (income) for defined benefit plans 7,739 8,341 Mark-up / return / interest expensed on deposits of staff retirement benefit funds 17,382 15,151 Mark-up / return / interest expensed on deposits of customers with common directorship 8,080 1,943 Mark-up / return / interest earned on advances to customers with common directorship 7,934 - Donation to The Kidney Centre 26.1.1 2,000 2,500 Net gain / (loss) on derivatives (46,721) 83,511 Payment made to Central Depository Company of Pakistan Limited 38.2 24,837 10,303
38.1 Net movements in loans and deposits are summarised as follows:
Balance as at Net Net Balance as at 31 December disbursement / repayments / 31 December 2012 deposits withdrawals 2013 ------(Rupees in '000) ------Loans and advances Key management personnel 102,395 39,416 (51,810) 90,001 Others - 563,913 (533,947) 29,966
Deposits Group companies 12,734 729,588 (739,413) 2,909 Key management personnel 181,751 824,945 (875,529) 131,167 Others 102,137 48,003,867 (47,684,570) 421,434 Financial statements and notes 38.2 Mr. Mohsin Ali Nathani, CEO of the bank is also Director of Central Depository Company of Pakistan Limited.
39 Capital Adequacy Ratio (CAR) disclosure:
Capital Structure
The State Bank of Pakistan through its BSD Circular No.07 of 2009 dated April 15, 2009 requires the minimum paid up capital (net of losses) for all locally incorporated banks to be Rs. 10 billion on December 31, 2013. The paid up capital of the Bank is comfortably in compliance with the SBP requirement.
Furthermore, SBP requires the Bank to maintain prescribed capital to total risk-weighted assets ratios. The capital adequacy ratios of the Bank were subject to the Basel 3 capital adequacy guidelines stipulated by the State Bank of Pakistan through its circular BPRD Circular No.6 of 2013 dated August 15, 2013. These instructions are effective from December 31, 2013 in a phased manner with full implementation intended by December 31, 2019. As of December 31, 2013 the Banks are required to maintain a minimum Common Equity Tier 1 ratio of 5%, Minimum total Tier 1 ratio of 6.5% and total capital adequacy ratio of 10% to total risk weighted assets.
Banking operations are categorised in either the trading book or the banking book, and risk-weighted assets are determined according to specified requirements that seek to reflect the varying levels of risk attached to assets and off-balance sheet exposures. 138 Standard Chartered Annual Report 2013 Notes to the Consolidated Financial Statements For the year ended 31 December 2013
The Banks regulatory capital is analysed into three tiers, with total Tier 1 capital being the sum of CET1 and ADT1 below:
Common Equity Tier I capital (CET1), which includes fully paid up capital (including the bonus shares), balance in share premium account, general reserves, statutory reserves as disclosed on the balance sheet and un-appropriated profits (net of accumulated losses, if any). Goodwill and other intangibles are deducted from Tier I capital.
Additional Tier I capital (ADT1), which includes perpetual non-cumulative preference shares and share premium resulting from the same. The Bank did not have any ADT1 as of December 31, 2013
Tier II capital includes sub-ordinated debt, revaluation reserves on assets, exchange translation reserves and impairment allowances that are not held against identified debts. Information on the terms, conditions and other features of the Bank's sub-ordinated debt currently in issue is given in note 16 to these financial statements. There is a restriction on the amount of impairment allowances that are not held against identified debts upto 1.25 percent of credit risk weighted assets.
The capital to risk weighted asset ratio, calculated in accordance with the State Bank of Pakistan's guidelines on capital adequacy using Basel III Standardised approach is presented below, except for figure of 2012 which have been calculated using Basel II standardized approach:
2013 2012 Amounts Amount subject to Pre - Amount Basel III treatment ------(Rupees in '000) ------S# Common Equity Tier 1 capital (CET1): Instruments and reserves 1 Fully Paid-up Capital/ Capital deposited with SBP 38,715,850 - 38,715,850 2 Balance in Share Premium Account 1,036,090 - 1,036,090 3 Reserve for issue of Bonus Shares - - - 4 General/ Statutory Reserves 6,144,462 - 4,032,538 5 Gain/(Losses) on derivatives held as Cash Flow Hedge - - - 6 Unappropriated/unremitted profits/ (losses) 6,721,973 - 6,846,940 7 Non-controlling interest arising from CET1 capital instruments issued to third party by consolidated bank subsidiaries (amount allowed in CET1 capital of the consolidation group) 882,322 - 825,841 8 CET 1 before Regulatory Adjustments 53,500,696 - 51,457,259 Common Equity Tier 1 capital: Regulatory adjustments - 9 Goodwill (net of related deferred tax liability) 20,780,495 - 26,095,310 10 All other intangibles (net of any associated deferred tax liability) 40,708 - 180,288 11 Shortfall of provisions against classified assets - - - 12 Deferred tax assets that rely on future profitability excluding those arising from temporary differences (net of related tax liability) - 207,456 - 13 Defined-benefit pension fund net assets - - 14 Reciprocal cross holdings in CET1 capital instruments - - - 15 Cash flow hedge reserve - - - 16 Investment in own shares/ CET1 instruments - - - 17 Securitization gain on sale - - - 18 Capital shortfall of regulated subsidiaries - - - 19 Deficit on account of revaluation from bank's holdings of property/ AFS - - - 20 Investments in the capital instruments of banking, financial and insurance entities that are outside the scope of regulatory consolidation, where the bank does not own more than 10% of the issued share capital (amount above 10% threshold) - - - 21 Significant investments in the capital instruments issued by banking, financial and insurance entities that are outside the scope of regulatory consolidation (amount above 10% threshold) - - - 22 Deferred Tax Assets arising from temporary differences (amount above 10% threshold, net of related tax liability) - 2,401,570 - 23 Amount exceeding 15% threshold - - - 24 of which: significant investments in the common stocks of financial entities - - - 25 of which: deferred tax assets arising from temporary differences - - - 26 National specific regulatory adjustments applied to CET1 capital - 27 Investment in TFCs of other banks exceeding the prescribed limit - - - 139 Notes to the Consolidated Financial Statements For the year ended 31 December 2013
2013 2012 Amounts Amount subject to Pre - Amount Basel III treatment ------(Rupees in '000) ------28 Any other deduction specified by SBP (mention details) - - - 29 Regulatory adjustment applied to CET1 due to insufficient AT1 and Tier 2 to cover deductions - - - 30 Total regulatory adjustments applied to CET1 (sum of 9 to 25) 20,821,203 - 26,275,598 Common Equity Tier 1 (a) 32,679,493 - 25,181,661
Additional Tier 1 (AT 1) Capital 31 Qualifying Additional Tier-1 instruments plus any related share premium - - - 32 of which: Classified as equity - - - 33 of which: Classified as liabilities - - - 34 Additional Tier-1 capital instruments issued by consolidated subsidiaries and held by third parties (amount allowed in group AT 1) - - - 35 of which: instrument issued by subsidiaries subject to phase out - - - 36 AT1 before regulatory adjustments - - - Additional Tier 1 Capital: regulatory adjustments - - - 37 Investment in mutual funds exceeding the prescribed limit (SBP specific adjustment) - - - 38 Investment in own AT1 capital instruments - - - 39 Reciprocal cross holdings in Additional Tier 1 capital instruments - - - 40 Investments in the capital instruments of banking, financial and insurance entities that are outside the scope of regulatory consolidation, where the bank does not own more than 10% of the issued share capital (amount above 10% threshold) - - - 41 Significant investments in the capital instruments issued by banking, financial and insurance entities that are outside the scope of regulatory consolidation - - - 42 Portion of deduction applied 50:50 to core capital and supplementary capital based on pre-Basel III treatment which, during transitional period, remain subject to deduction from tier-1 capital - - - 43 Regulatory adjustments applied to Additional Tier 1 due to insufficient Tier 2 to cover deductions - - - 44 Total of Regulatory Adjustment applied to AT1 capital - - - 45 Additional Tier 1 capital - - - 46 Additional Tier 1 capital recognized for capital adequacy (b) - - -
Tier 1 Capital (CET1 + admissible AT1) (c=a+b) 32,679,493 - 25,181,661 Financial statements and notes
Tier 2 Capital 47 Qualifying Tier 2 capital instruments under Basel III 48 Capital instruments subject to phase out arrangement from tier 2 (Pre-Basel III instruments) 2,250,000 - 2,500,000 49 Tier 2 capital instruments issued to third party by consolidated subsidiaries (amount allowed in group tier 2) 50 of which: instruments issued by subsidiaries subject to phase out 51 General Provisions or general reserves for loan losses-up to maximum of 1.25% of Credit Risk Weighted Assets 560,462 - 572,303 52 Revaluation Reserves 1,577,458 - 1,901,106 53 of which: Revaluation reserves on Property 1,529,576 - 1,604,429 54 of which: Unrealized Gains/Losses on AFS 47,882 - 296,677 55 Foreign Exchange Translation Reserves
56 Undisclosed/Other Reserves (if any) 57 T2 before regulatory adjustments 4,387,920 - 4,973,409 Tier 2 Capital: regulatory adjustments 58 Portion of deduction applied 50:50 to core capital and supplementary capital based on pre-Basel III treatment which, during transitional period, remain subject to deduction from tier-2 capital 59 Reciprocal cross holdings in Tier 2 instruments 60 Investment in own Tier 2 capital instrument 61 Investments in the capital instruments of banking, financial and insurance entities that are outside the scope of regulatory consolidation, where the bank does not own more than 10% of the issued share capital (amount above 10% threshold) 140 Standard Chartered Annual Report 2013 Notes to the Consolidated Financial Statements For the year ended 31 December 2013
2013 2012 Amounts Amount subject to Pre - Amount Basel III treatment ------(Rupees in '000) ------62 Significant investments in the capital instruments issued by banking, financial and insurance entities that are outside the scope of regulatory consolidation - - - 63 Amount of Regulatory Adjustment applied to T2 capital - - - 64 Tier 2 capital (T2) 4,387,920 - 4,973,409 65 Tier 2 capital recognized for capital adequacy 66 Excess Additional Tier 1 capital recognized in Tier 2 capital 67 Total Tier 2 capital admissible for capital adequacy (d) 4,387,920 - 4,973,409 TOTAL CAPITAL (T1 + admissible T2) (e=c+d) 37,067,413 - 30,155,070
Total Risk Weighted Assets (i=f+g+h) 219,750,851 209,696,559 68 Total Credit Risk Weighted Assets (f) 169,574,858 159,393,085 69 Risk weighted assets in respect of amounts subject to Pre-Basel III Treatment
70 of which: recognized portion of investment in capital of banking, financial and insurance entities where holding is more than 10% of the issued common share capital of the entity 71 of which: deferred tax assets 6,522,565 - 72 of which: Defined-benefit pension fund net assets - - 73 of which: [insert name of adjustment] 74 Total Market Risk Weighted Assets (g) 1,961,311 2,287,656 75 Total Operational Risk Weighted Assets (h) 48,214,682 48,015,818
Capital Ratios and buffers (in percentage of risk weighted assets) 76 CET1 to total RWA (a/i) 14.87% N/A 77 Tier-1 capital to total RWA (c/i) 14.87% 12.01% 78 Total capital to RWA (e/i) 16.87% 14.38% 79 Bank specific buffer requirement (minimum CET1 requirement plus capital conservation buffer plus any other buffer requirement) N/A N/A 80 of which: capital conservation buffer requirement N/A N/A 81 of which: countercyclical buffer requirement N/A N/A 82 of which: D-SIB or G-SIB buffer requirement N/A N/A 83 CET1 available to meet buffers (as a percentage of risk weighted assets) N/A N/A
National minimum capital requirements prescribed by SBP 84 CET1 minimum ratio 5.00% N/A 85 Tier 1 minimum ratio 6.50% N/A 86 Total capital minimum ratio 10.00% 10.00%
Amounts below the thresholds for deduction (before risk weighting) 87 Non-significant investments in the capital of other financial entities 88 Significant investments in the common stock of financial entities - - 89 Deferred tax assets arising from temporary differences (net of related tax liability) 5,814,108 -
Applicable caps on the inclusion of provisions in Tier 2 90 Provisions eligible for inclusion in Tier 2 in respect of exposures subject to standardized approach (prior to application of cap) 560,462 572,303 91 Cap on inclusion of provisions in Tier 2 under standardized approach 92 Provisions eligible for inclusion in Tier 2 in respect of exposures subject to internal ratings-based approach (prior to application of cap) N/A N/A 93 Cap for inclusion of provisions in Tier 2 under internal ratings-based approach N/A N/A 141 Notes to the Consolidated Financial Statements For the year ended 31 December 2013
2013 2012 39.1 Risk-Weighted Exposures Book Value Risk Adjusted Book Value Risk Adjusted Value Value Credit Risk ------(Rupees in '000) ------
Balance Sheet Items Cash and other liquid Assets 174,410,489 133,668 156,098,107 94,268 Money at call 500,000 100,000 Investments 221,645 222,092 228,597 229,044 Loans and Advances 181,606,179 115,732,169 168,210,402 112,586,669 Fixed Assets 6,172,745 6,172,745 6,381,584 6,381,584 Other Assets 20,224,641 19,437,349 15,838,519 6,381,950 382,635,699 141,698,023 347,257,209 125,773,515 Off Balance Sheet items Loan Repayment Guarantees 19,305,860 13,833,749 35,427,753 21,482,576 Purchase and Resale Agreements Performance Bonds etc 20,413,724 9,802,453 16,588,532 6,961,322 Revolving underwriting Commitments Stand By Letters of Credit 4,785,678 2,925,700 4,209,396 3,699,050 Outstanding Foreign Exchange Contracts 2,913,875 1,314,933 2,442,556 1,476,623 - Purchase - Sale 47,419,137 27,876,835 58,668,237 33,619,571
Credit risk-weighted exposures 169,574,858 159,393,086
Market Risk General market risk 1,344,624 1,636,712 Specific market Risk 15,071 - Foreign Exchange Risk 601,616 650,944 Market risk-weighted exposures 1,961,311 2,287,656
Operational Risk 48,214,682 48,015,818 Total Risk-Weighted Exposures 219,750,851 209,696,560
Balance sheet as 39.2 Capital Structure Reconciliation Under regulatory in published scope of financial consolidation 39.2.1 statements 2013 2013 ------(Rupees in '000) ------Assets Cash and balances with treasury banks 32,331,167 32,331,167 Balanced with other banks 1,608,932 1,608,932 Financial statements and notes Lending to financial institutions 22,158,840 22,158,840 Investments 146,380,251 146,380,251 Advances 146,238,554 146,238,554 Operating fixed assets 6,172,744 6,172,744 Deferred tax assets - 5,814,108 Other assets 55,369,696 55,369,696 Total assets 410,260,184 416,074,292
Liabilities & Equity
Bills payable 6,540,213 6,540,213 Borrowings 17,291,175 17,291,175 Deposits and other accounts 296,377,146 296,377,146 Sub-ordinated loans 2,500,000 2,500,000 Liabilities against assets subject to finance lease - - Deferred tax liabilities 260,651 6,074,759 Other liabilities 30,339,110 30,339,110 Total liabilities 353,308,295 359,122,403
Share capital/ Head office capital account 38,715,850 38,715,850 Reserves 7,180,552 7,180,552 Unappropriated/ Unremitted profit/ (losses) 6,721,973 6,721,973 Non-controlling interest 882,322 882,322 Surplus on revaluation of assets 3,451,192 3,451,192 Total liabilities & equity 410,260,184 416,074,292 142 Standard Chartered Annual Report 2013 Notes to the Consolidated Financial Statements For the year ended 31 December 2013
Balance sheet as 39.2.2 in published Under regulatory financial scope of Reference statements consolidation 2013 2013 ------(Rupees in '000) ------Assets Cash and balances with treasury banks 32,331,167 32,331,167 Balanced with other banks 1,608,932 1,608,932 Lending to financial institutions 22,158,840 22,158,840 Investments 146,380,251 146,380,251 of which: Non-significant capital investments in capital of other financial institutions exceeding 10% threshold - - a of which: significant capital investments in financial sector entities exceeding regulatory threshold - - b of which: Mutual Funds exceeding regulatory threshold - - c of which: reciprocal crossholding of capital instrument - - d of which: others (mention details) - - e Advances 146,238,554 146,238,554 shortfall in provisions/ excess of total EL amount over eligible provisions under IRB - - f general provisions reflected in Tier 2 capital 560,462 560,462 g Fixed Assets 6,172,744 6,172,744 Deferred Tax Assets - 5,814,108 of which: DTAs excluding those arising from temporary differences - 207,456 h of which: DTAs arising from temporary differences exceeding regulatory threshold - 2,401,570 i Other assets 55,369,696 55,369,696 of which: Goodwill 26,095,310 26,095,310 j of which: Intangibles 127,530 127,530 k of which: Defined-benefit pension fund net assets - - l Total assets 410,260,184 416,074,292
Liabilities & Equity Bills payable 6,540,213 6,540,213 Borrowings 17,291,175 17,291,175 Deposits and other accounts 296,377,146 296,377,146 Sub-ordinated loans 2,500,000 2,500,000 of which: eligible for inclusion in AT1 - - m of which: eligible for inclusion in Tier 2 2,250,000 2,250,000 n Liabilities against assets subject to finance lease - - Deferred tax liabilities 260,651 6,074,759 of which: DTLs related to goodwill - 5,314,815 o of which: DTLs related to intangible assets - 86,822 p of which: DTLs related to defined pension fund net assets - 12,413 q of which: other deferred tax liabilities - 660,709 r Other liabilities 30,339,110 30,339,110 Total liabilities 353,308,295 359,122,403
Share capital 39,751,940 39,751,940 of which: amount eligible for CET1 39,751,940 39,751,940 s of which: amount eligible for AT1 - - t Reserves 6,144,462 6,144,462 of which: portion eligible for inclusion in CET1(provide breakup) 6,144,462 6,144,462 u of which Statutory Reserves 6,144,462 6,144,462 of which: portion eligible for inclusion in Tier 2 - - v Unappropriated profit/ (losses) 6,721,973 6,721,973 w Non-controlling interest 882,322 882,322 of which: portion eligible for inclusion in CET1 882,322 882,322 x of which: portion eligible for inclusion in AT1 - - y of which: portion eligible for inclusion in Tier 2 - - z Surplus on revaluation of assets 3,451,192 3,451,192 of which: Revaluation reserves on Property 3,378,993 3,378,993 aa of which: Unrealized Gains/Losses on AFS 72,199 72,199 In case of Deficit on revaluation (deduction from CET1) - - ab Total liabilities & Equity 410,260,184 416,074,292
Basel III Disclosure Template (with added column) 143 Notes to the Consolidated Financial Statements For the year ended 31 December 2013
Component Source based of regulatory on reference 39.2.3 capital reported number from by bank step 2 ------(Rupees in '000) ------Common Equity Tier 1 capital (CET1): Instruments and reserves 1 Fully Paid-up Capital/ Capital deposited with SBP 38,715,850 2 Balance in Share Premium Account 1,036,090 (s) 3 Reserve for issue of Bonus Shares - 4 General/ Statutory Reserves 6,144,462 (u) 5 Gain/(Losses) on derivatives held as Cash Flow Hedge - 6 Unappropriated/unremitted profits/(losses) 6,721,973 (w) 7 Non-controlling interest arising from CET1 capital instruments issued to third party by consolidated bank subsidiaries (amount allowed in CET1 capital of the consolidation group) 882,322 (x) 8 CET 1 before Regulatory Adjustments 53,500,697 Common Equity Tier 1 capital: Regulatory adjustments 9 Goodwill (net of related deferred tax liability) 20,780,495 (j) - (o) 10 All other intangibles (net of any associated deferred tax liability) 40,708 (k) - (p) 11 Shortfall of provisions against classified assets - (f) 12 Deferred tax assets that rely on future profitability excluding those arising from temporary differences (net of related tax liability) - {(h) - (r} * x% 13 Defined-benefit pension fund net assets - {(l) - (q)} * x% 14 Reciprocal cross holdings in CET1 capital instruments - (d) 15 Cash flow hedge reserve - - 16 Investment in own shares/ CET1 instruments - - 17 Securitization gain on sale - - 18 Capital shortfall of regulated subsidiaries - - 19 Deficit on account of revaluation from bank's holdings of property/ AFS - (ab) 20 Investments in the capital instruments of banking, financial and insurance entities that are outside the scope of regulatory consolidation, where the bank does not own more than 10% of the issued share capital (amount above 10% threshold) - (a) - (ac) - (ae) 21 Significant investments in the capital instruments issued by banking, financial and insurance entities that are outside the scope of regulatory consolidation (amount above 10% threshold) - (b) - (ad) - (af) 22 Deferred Tax Assets arising from temporary differences (amount above 10% threshold, net of related tax liability) - (i) 23 Amount exceeding 15% threshold - - 24 of which: significant investments in the common stocks of financial entities - - 25 of which: deferred tax assets arising from temporary differences - -
26 National specific regulatory adjustments applied to CET1 capital - - Financial statements and notes 27 Investment in TFCs of other banks exceeding the prescribed limit - - 28 Any other deduction specified by SBP (mention details) - - 29 Regulatory adjustment applied to CET1 due to insufficient AT1 and Tier 2 to cover deductions - - 30 Total regulatory adjustments applied to CET1 (sum of 9 to 25) 20,821,203 - Common Equity Tier 1 32,679,494
Additional Tier 1 (AT 1) Capital 31 Qualifying Additional Tier-1 instruments plus any related share premium - - 32 of which: Classified as equity - (t) 33 of which: Classified as liabilities - (m) 34 Additional Tier-1 capital instruments issued by consolidated subsidiaries and held by third parties (amount allowed in group AT 1) - (y) 35 of which: instrument issued by subsidiaries subject to phase out - - 36 AT1 before regulatory adjustments - - Additional Tier 1 Capital: regulatory adjustments 37 Investment in mutual funds exceeding the prescribed limit (SBP specific adjustment) - - 38 Investment in own AT1 capital instruments - - 39 Reciprocal cross holdings in Additional Tier 1 capital instruments - - 40 Investments in the capital instruments of banking, financial and insurance entities that are outside the scope of regulatory consolidation, where the bank does not own more than 10% of the issued share capital (amount above 10% threshold) - (ac) 41 Significant investments in the capital instruments issued by banking, financial and insurance entities that are outside the scope of regulatory consolidation - (ad) 42 Portion of deduction applied 50:50 to core capital and supplementary capital based on pre-Basel III treatment which, during transitional period, remain subject to deduction from tier-1 capital - - 144 Standard Chartered Annual Report 2013 Notes to the Consolidated Financial Statements For the year ended 31 December 2013
"Component "Source of regulatory based capital on reference reported number from by bank " step 2" ------(Rupees in '000) ------43 Regulatory adjustments applied to Additional Tier 1 due to insufficient Tier 2 to cover deductions - - 44 Total of Regulatory Adjustment applied to AT1 capital - - 45 Additional Tier 1 capital - - 46 Additional Tier 1 capital recognized for capital adequacy - -
Tier 1 Capital (CET1 + admissible AT1) 32,679,494
Tier 2 Capital 47 Qualifying Tier 2 capital instruments under Basel III - 48 Capital instruments subject to phase out arrangement from tier 2 (Pre-Basel III instruments) 2,250,000 (n) 49 Tier 2 capital instruments issued to third party by consolidated subsidiaries (amount allowed in group tier 2) - (z) 50 of which: instruments issued by subsidiaries subject to phase out - 51 General Provisions or general reserves for loan losses-up to maximum of 1.25% of Credit Risk Weighted Assets 560,462 (g) 52 Revaluation Reserves eligible for Tier 2 1,577,458 53 of which: portion pertaining to Property 1,529,576 portion of (aa) 54 of which: portion pertaining to AFS securities 47,882 55 Foreign Exchange Translation Reserves - (v) 56 Undisclosed/Other Reserves (if any) - 57 T2 before regulatory adjustments 4,387,920 Tier 2 Capital: regulatory adjustments 58 Portion of deduction applied 50:50 to core capital and supplementary capital based on pre-Basel III treatment which, during transitional period, remain subject to deduction from tier-2 capital - - 59 Reciprocal cross holdings in Tier 2 instruments - - 60 Investment in own Tier 2 capital instrument - - 61 Investments in the capital instruments of banking, financial and insurance entities that are outside the scope of regulatory consolidation, where the bank does not own more than 10% of the issued share capital (amount above 10% threshold) - (ae) 62 Significant investments in the capital instruments issued by banking, financial and insurance entities that are outside the scope of regulatory consolidation - (af) 63 Amount of Regulatory Adjustment applied to T2 capital - - 64 Tier 2 capital (T2) 4,387,920 65 Tier 2 capital recognized for capital adequacy 4,387,920 66 Excess Additional Tier 1 capital recognized in Tier 2 capital - 67 Total Tier 2 capital admissible for capital adequacy 4,387,920 TOTAL CAPITAL (T1 + admissible T2) 37,067,414 145 Notes to the Consolidated Financial Statements For the year ended 31 December 2013
39.3 Disclosure template for main features of regulatory capital instruments
Main Features Common Shares TFCs
1 Issuer Standard Chartered Bank (Pakistan) Limited Standard Chartered Bank (Pakistan) Limited 2 Unique identifier (eg KSE Symbol or Bloomberg identifier etc.) SCBPL SCBPL 3 Governing law(s) of the instrument Companies Ordinance, 1984/ Companies Ordinance, 1984/ Banking Companies Ordinance, 1962 Banking Companies Ordinance, 1962/BSD Circular 8 of 2006 Regulatory treatment 4 Transitional Basel III rules Not applicable Tier 2 5 Post-transitional Basel III rules Not applicable Ineligible 6 Eligible at solo/ group/ group&solo Solo and Group Solo and Group 7 Instrument type Ordinary shares Other Tier 2 (Subordinated Debt) 8 Amount recognized in regulatory capital (Currency in PKR thousands, as of reporting date) 38,715,850 2,250,000 9 Par value of instrument 38,715,850 2,500,000 10 Accounting classification Shareholders' equity Liability 11 Original date of issuance Dec 2006 June 2012 12 Perpetual or dated Perpetual Dated 13 Original maturity date Not applicable 31-Dec-22 14 Issuer call subject to prior supervisory approval No Yes 15 Optional call date, contingent call dates and redemption amount Not applicable May be called, subject to regulatory approval, at any time after 60th month from the issuance date 16 Subsequent call dates, if applicable Not applicable Not applicable
Coupons / dividends 17 Fixed or floating dividend/ coupon Variable/Floating Floating 18 Coupon rate and any related index/ benchmark Not applicable 6 M KIBOR + 0.75% pa 19 Existence of a dividend stopper Not applicable No 20 Fully discretionary, partially discretionary or mandatory Fully Discretionary Mandatory 21 Existence of step up or other incentive to redeem No No 22 Noncumulative or cumulative Noncumulative Cumulative 23 Convertible or non-convertible Nonconvertible Nonconvertible
24 If convertible, conversion trigger (s) Not applicable Not applicable Financial statements and notes 25 If convertible, fully or partially Not applicable Not applicable 26 If convertible, conversion rate Not applicable Not applicable 27 If convertible, mandatory or optional conversion Not applicable Not applicable 28 If convertible, specify instrument type convertible into Not applicable Not applicable 29 If convertible, specify issuer of instrument it converts into Not applicable Not applicable 30 Write-down feature Not applicable Not applicable 31 If write-down, write-down trigger(s) Not applicable Not applicable 32 If write-down, full or partial Not applicable Not applicable 33 If write-down, permanent or temporary Not applicable Not applicable 34 If temporary write-down, description of write-up mechanism Not applicable Not applicable 35 Position in subordination hierarchy in liquidation (specify instrument type immediately senior to instrument Subordinated debt/TFCs Creditors including Depositors 36 Non-compliant transitioned features No Yes 37 If yes, specify non-compliant features No Absence of point of non-viability clause 146 Standard Chartered Annual Report 2013 Notes to the Consolidated Financial Statements For the year ended 31 December 2013
39.4 CAPITAL-ASSESSMENT AND ADEQUACY BASEL III SPECIFIC 39.4.1 Scope of applications The Basel 3 framework is applicable to the Bank both at the consolidated level and also on standalone basis. Subsidiaries are included while calculating Consolidated Capital Adequacy ratio of the Bank using full consolidation method. The Standardized Approach is used by the Bank for calculating the Capital Adequacy ratio for Credit, Market and Operational Risk. 39.4.2 Capital Structure During 2012, the Bank issued unsecured, subordinated TFCs of Rs. 2,500 million by way of private placement. The instrument was issued at 0.75% above KIBOR to support the capital base of the Bank and is for a tenor of 10 years. The instrument is structured to redeem in two equal semi-annual instalments of 50% of the issue amount in 2022. The Bank may however call the TFC subject to prior approval of the State Bank, on any profit payment date after the 60th month from the issuance date. The instrument is also subject to a lock-in clause meaning neither principal nor profit may be paid (even at maturity) if such payment means that the Bank falls below or remains below its minimum capital requirements. The instrument is currently rated at AAA. The instrument is classified as a liability and is subordinated to payment of principal and profit to all other indebtedness of the Bank, including deposits. For further details of the capital instrument currently part of Tier 2 capital, please refer Note 16 39.5 Capital Adequacy The Banks capital management approach is driven by its desire to maintain a strong capital base to support the development of its business, to meet regulatory capital requirements at all times and to maintain good credit ratings, maximising shareholder value and at the same time maintaining investor, creditor and market confidence. The capital position is reviewed and monitored by the Asset and Liability Committee (ALCO) of the Bank. Regular reviews help to ensure that adequate levels of capital and an optimum mix of the different components of capital are maintained by the Bank to support the strategy. This is integrated with the Banks annual planning process that takes into consideration business growth assumptions across products and business segments and the related impact on capital resources. The following matters are taken into account while reviewing the Bank's capital position: a) current regulatory capital requirements and our assessment of future standards; b) demand for capital due to business growth forecasts; c) forecasted demand for capital to support credit ratings and as a signalling tool to the market; d) available supply of capital and capital-raising options For calculation of Capital Adequacy Ratio, the Bank adheres to the calculation of capital requirements for credit, market and operational risk as per the guidelines of SBP. For credit risk, the Bank uses the 'Standardized Approach'. The Bank uses reputable and SBP approved rating agencies (ECAIs) for deriving risk weights for specific credit exposures. These are consistently applied across the Bank's credit portfolio for both on and off balance sheet exposures. The ECAIs used for rating various types of exposures are tabled in note 39.6 to these financial statements. For the purposes of Credit Risk Mitigation under the 'Standardised Approach', the Bank follows the instructions laid down by SBP vide their Circular No. 08 dated 27 June 2006 with regard to eligibility of collaterals, valuation and management. Where a transaction is secured by an eligible collateral and meets the eligibility criteria and minimum requirements as laid down by SBP, the Bank reduces its exposure under that particular transaction by taking into account the risk mitigating effect of the collateral for the calculation of capital requirement. Collaterals used include: Government of Pakistan guarantees, Inter-group guarantees, margins / liens and saving certificates. The Bank calculates its capital requirement for market risk in its portfolio, based on the methodology provided by SBP which takes account of specific and general market risk capital charge for interest rate risk using the duration method. For calculation of operational risk capital charge, the business activities of the Bank are divided into eight business lines: corporate finance, trading and sales, retail banking, commercial banking, payments and settlement, agency services, asset management and retail brokerage. The Bank's operations are mapped into these eight business lines as per the criteria laid down by SBP vide Circular No 08 dated 27 June 2006. Within each business line, gross income is the broad indicator that serves as a proxy for the scale of business operations and thus the likely scale of operational risk exposure within each of these business lines. The capital charge for each business line is calculated by multiplying gross income by beta factors assigned by SBP to that business line. Beta serves as a proxy for the industry-wide relationship between the operational risk loss experience for a given business line and the aggregate level of gross income for that business line. 147 Notes to the Consolidated Financial Statements For the year ended 31 December 2013
The total capital charge is calculated as the three-year average of the simple summation of the regulatory capital charges across each of the business lines in each year. The 'Standardised Approach' is preferred over the 'Basic Indicator Approach' so as to arrive at a capital charge that is reflective of the risks associated with each of the Bank's business lines. The capital requirements for the major risk categories are indicated below:
Capital Requirements Risk Weighted Assets Credit Risk 2013 2012 2013 2012 ------Rupees in '000 ------
Portfolios subject to standardized approach (Simple) Government of Pakistan and State Bank of Pakistan 13,366 9,426 133,668 94,268 Public Sector Entities 188,006 380,173 1,880,062 3,801,735 Banks 1,869,263 1,789,099 18,692,632 17,890,996 Corporate Portfolio 10,947,765 11,205,970 109,477,658 112,059,710 Retail Portfolio 943,414 822,915 9,434,148 8,229,158 Residential Mortgage Finance 104,318 125,269 1,043,186 1,252,693 Past Due Portfolio 308,131 307,194 3,081,318 3,071,948 All other Risk Weighted Assets 2,561,009 1,276,353 25,610,094 12,763,534
Equity Exposure Risk in the Banking Book
Equity portfolio subject to market-based approaches Under simple risk weight method 22,209 22,904 222,093 229,044
Market Risk
Capital Requirement for portfolios subject to Standardized Approach Interest rate risk 135,969 163,671 1,359,694 1,636,712 Equity position risk etc. 60,161 65,094 601,616 650,944
Operational Risk
Capital Requirement for operational risks 4,821,468 4,801,581 48,214,682 48,015,818 TOTAL 21,975,079 20,969,649 219,750,851 209,696,560
Capital Adequacy Ratio 2013 2012 Financial statements and notes
Total eligible regulatory capital held (Note:-----) (e) 37,067,413 30,155,070
Total Risk Weighted Assets (Note:----) (i) 219,750,851 209,696,559
Capital Adequacy Ratio (e) / (i) 16.87% 14.38%
39.6 Types of exposures and ECAI's used Corporate Banks Sovereigns
JCR - VIS aaa PACRA aaa STANDARD AND POORS aaa MOODY'S aaa FITCH aaa
The Bank adheres to the mapping instructions issued by SBP on the Revised Regulatory Capital Framework under Basel II, issued vide BSD Circular No. 8 of 2006 dated 27 June 2006, vide BSD Circular Letter No. 09 of 2007 dated 24 August 2007, vide BSD Letter No. BSD/BAI-2/201/1141/2009 dated 2 December 2009 and vide BSD Circular No. 5 of 2010 dated 5 October 2010 with regard to credit ratings to be used. These are as follows: 148 Standard Chartered Annual Report 2013 Notes to the Consolidated Financial Statements For the year ended 31 December 2013
LONG-TERM RATING GRADES MAPPING
Risk Standard & Poors Moodys Investors Fitch Ratings PACRA JCR VIS Weightage Ratings Services Services 20% AAA Aaa AAA AAA A A A AA+ Aa1 AA+ AA+ A A + AA Aa2 AA AA A A AA- Aa3 AA- AA- A A - 50% A+ A1 A+ A+ A + A A2 A A A A- A3 A- A- A - 100% BBB+ Baa1 BBB+ BBB+ BBB+ BBB Baa2 BBB BBB B B B BBB- Baa3 BBB- BBB- BBB- 100% BB+ Ba1 BB+ BB+ B B + BB Ba2 BB BB B B BB- Ba3 BB- BB- B B - 150% B+ B1 B+ B+ B + B B2 B B B B- B3 B- B- B - 150% CCC+ Caa1 CCC+ CCC+ CCC+ CCC Caa2 CCC CCC C C C CCC- Caa3 CCC- CCC- CCC- CC Ca CC CC C C C C C C C D D D D
SHORT-TERM RATING GRADES MAPPING
Risk Standard & Poors Moodys Investors Fitch Ratings PACRA JCR VIS Weightage Ratings Services 20% A-1+ P-1 F1+ A-1 A - 1 A-1 F1 50% A-2 P-2 F2 A-2 A - 2 100% A-3 P-3 F3 A-3 A - 3 150% B NP B Others Others B-1 C B-2 D B-3 C
40. RISK MANAGEMENT Through its risk management structure, the Bank seeks to manage efficiently the core risks: credit, market, country, and liquidity risk. These arise directly through the Banks commercial activities whilst compliance and regulatory risk, operational risk and reputational risks are normal consequences of any business undertaking. The basic principles of risk management followed by the bank include: Balancing risk and return Risk is taken in line with the requirements of the Banks stakeholders. Risk should be taken within the Bank's risk appetite, consistent with the approved strategy. Any such risks are avoided which have a material probability of causing financial distress to the Bank or its clients or customers. Responsibility Given the Bank is in the business of taking risk, it is everyones responsibility to ensure that risk taking is both disciplined and focused. The Bank takes account of its social responsibilities and its commitment to customers in taking risk to produce a return. Accountability Risk is taken only within agreed authorities and where there is appropriate infrastructure and resource. All risk taking must be transparent, controlled and reported. Anticipation The Bank looks to anticipate future risks and to ensure awareness of all risk. Competitive Advantage The Bank seeks to achieve competitive advantage through efficient and effective risk management and control. 149 Notes to the Consolidated Financial Statements For the year ended 31 December 2013
Risk management The Bank aims to implement best practices and have a specialist risk function of international standards, with strength in depth, experience across risk types and economic scenarios. Ultimate responsibility for the effective management of risk rests with the Companys Board of Directors. Acting within an authority delegated by the Board, the Executive Committee reviews specific risk areas and monitors the activities of the Country Risk Committee (CRC) and the Asset and Liability Committee (ALCO). CRC headed by Country Chief Risk Officer (CCRO), through authority delegated by the Board through the Banks Executive Committee, is responsible for credit risk, market risk, operational risk, compliance risk and regulatory risk, legal risk and reputational risk. ALCO, through authority delegated by the Board through the Banks Executive Committee, is responsible for management of the Bank's liquidity, capital adequacy and structural foreign exchange risk. The Pension Executive Committee, through authority delegated by the Board through the Bank's Executive Committee is responsible for management of pension risk. The day to day responsibility for managing risk rests with CCRO who oversees and manages the risk through a team of managers; Senior Credit Officer responsible for credit risk in Wholesale Bank, Country Credit Head responsible for credit risk in Consumer Bank (including SME), Head of Special Assets Management responsible for remedial risk management, Head of Credit Risk Controls responsible for collateral management, security documentation, credit MIS and controls, Head of Market Risk responsible for liquidity risk and risks associated with price movements, arising from interest and exchange rate movements and Head of Operational Risk responsible for enterprise wide operations. The Bank has established policies, procedures, processes, and controls and have provided the Risk team adequate support by way of risk systems and tools for measuring and reporting risk for monitoring, controlling, reviewing and managing risk. 40.1 Credit risk Credit risk is the risk that a counter party will not settle its obligations in accordance with agreed terms. Credit exposures may arise from lending, trade finance, securities and derivative exposures. Credit exposures include both individual borrowers and groups of connected counterparties and portfolios in the banking and trading books. The Board of Directors has delegated down the authority to CRC through the Banks Executive Committee to establish risk appetite and make recommendations to the Board for approval of risk appetite and policies for managing credit risk. The CEO and the Executive Committee in turn rely on CCRO and the Risk Committee to determine these and recommend for their support and Board's approval. The CRC is also delegated down by the BOD responsibility to delegate credit authorities to independent Risk Officers. Credit risk appetite is established through business strategy papers and underwriting standards by the business managers, which are approved by the Board once recommended, and supported by the Executive Committee. Specific procedures for managing credit risk within Wholesale and Consumer (including SME) are determined at the Senior Credit Officer and Country Credit Head levels for their respective jurisdictions with specific policies and procedures being adapted to different risk environments and business goals. Credit analysis includes review of facility details, credit grade determination and financial spreading / ratio analysis. Portfolio review, Early Alerts and Stress Testing based on scenario analysis is a combined responsibility of Client Relationship and Risk and Finance function. Client relationship origination and credit approval roles are clearly segregated throughout Wholesale and Consumer Banking segment. Financial statements and notes Credit concentration risk is governed by specific policy, the adherence to which is managed by the Country Risk Committee (CRC). Credit concentration risk is principally managed based on three components: single name borrower exposure, industry concentrations and product concentration. In addition to the SBP specified prudential limits on single or group exposures, limits are also established by the CCRO and approved by CRC in line with the Credit Reference Level framework (CRL). 40.1.1 Wholesale Banking Within the Wholesale Banking business, an alpha numerical risk grading system is used for quantifying the risk associated with a counter-party. The grading is based on a probability of default measure, with customers analysed against a range of quantitative and qualitative measures. Expected Loss is used for further assessment of individual exposures and portfolio analysis. There is a clear segregation of duties with loan applications being prepared separately from the approval chain. 40.1.2 Consumer Banking For Consumer Banking, program based standard credit application forms are generally used, which are processed in central units for different products and market segments. Consumer Banking Analytics team has developed Bureau scores and uses Bureau data for portfolio monitoring and for underwriting new business. Medium enterprises relationship based business of Consumer Bank operates much like Wholesale banking with numerical risk grading system for quantifying counter party risk. As with Wholesale Banking, origination and approval roles are segregated. 150 Standard Chartered Annual Report 2013 Notes to the Consolidated Financial Statements For the year ended 31 December 2013
2013 40.1.3 Segment by class of business Advances - Gross Deposits Contingencies and Commitments (Rupees (Rupees (Rupees in '000) Percent in '000) Percent in '000) Percent Chemical and pharmaceuticals 10,251,784 6.09 4,389,750 1.48 3,039,547 3.88 Agri business 8,676,633 5.15 311,040 0.10 40,712 0.05 Textile 34,057,909 20.22 1,386,837 0.47 2,145,350 2.74 Communication 5,523,026 3.28 12,266,053 4.14 1,550,752 1.98 Insurance - - 1,160,833 0.39 - - Telecommunications and information technology 7,167 - 1,895,336 0.64 52,109 0.07 Cement 2,940,894 1.75 42,081 0.01 217,895 0.28 Sugar 3,695,392 2.19 4,085 - 95,262 0.12 Automobile and transportation equipment 3,105,305 1.84 634,871 0.21 1,671,820 2.13 Transportation 4,550,181 2.70 1,889,852 0.64 4,024,157 5.13 Financial 2,754,318 1.64 1,157,684 0.39 27,137,097 34.60 Electronics and electrical appliances 3,608,668 2.14 4,521,543 1.53 3,760,774 4.79 Production and transmission of energy 24,063,211 14.29 11,959,338 4.04 18,088,312 23.06 Shoes and leather garments 3,524,374 2.09 43,929 0.01 510,006 0.65 Individuals 18,297,782 10.86 194,286,431 65.53 1,369 - Others 43,369,883 25.75 60,427,483 20.39 16,102,280 20.53 168,426,527 100.00 296,377,146 100.00 78,437,442 100.00
2012
Advances - Gross Deposits Contingencies and Commitments (Rupees (Rupees Percent Percent (Rupees in '000) in '000) in '000) Percent Chemical and pharmaceuticals 12,829,765 7.57 4,164,613 1.56 4,308,516 5.80 Agri business 5,714,958 3.37 193,476 0.07 34,181 0.05 Textile 30,237,698 17.84 938,788 0.35 1,655,619 2.23 Communication 1,388,001 0.82 15,083,632 5.66 2,437,299 3.28 Insurance 82,756 0.05 1,771,289 0.66 - - Telecommunications and information technology 5,896,228 3.48 2,457,249 0.92 44,628 0.06 Cement 5,518,402 3.26 15,671 0.01 823,837 1.11 Sugar 3,641,047 2.15 1,333 0.00 90,292 0.12 Automobile and transportation equipment 2,694,687 1.59 849,140 0.32 1,171,576 1.58 Transportaion 3,454,322 2.04 3,466,291 1.30 1,373,578 1.85 Financial 2,997,424 1.77 1,801,595 0.68 28,726,780 38.65 Electronics and electrical appliances 1,835,769 1.08 3,487,607 1.31 4,975,420 6.69 Production and transmission of energy 25,034,067 14.77 11,080,729 4.16 16,017,525 21.55 Shoes and leather garments 2,542,747 1.50 94,264 0.04 153,727 0.21 Individuals 18,540,916 10.94 172,525,710 64.69 1,369 0.00 Others 47,080,972 27.78 48,667,184 18.27 12,514,751 16.83 169,489,759 100.00 266,598,571 100.00 74,329,098 100.00 151 Notes to the Consolidated Financial Statements For the year ended 31 December 2013
40.1.4 Details of non-performing advances and specific provisions by class of business segment 2013 2012 Classified Specific Classified Specific Advances Provision Advances Provision held held ------(Rupees in '000) ------Chemical and pharmaceuticals 345,632 293,141 341,443 284,892 Agri business 158,674 130,836 132,341 36,263 Textile 7,855,046 7,675,684 7,666,191 7,583,248 Footwear and Leather garments 5,997 5,997 16,564 15,645 Automobile and transportation equipment 340,210 329,555 358,068 353,970 Financial 49,326 49,326 52,419 50,397 Production and transmission of energy 222,904 222,903 127,708 127,708 Individuals 4,684,982 3,678,062 5,686,747 4,495,590 Others 11,275,668 9,242,007 13,092,364 11,051,471 24,938,439 21,627,511 27,473,845 23,999,184
40.1.5 Segment by sector 2013 Advances Deposits Contingencies and Commitments (Rupees (Rupees % % (Rupees in '000) in '000) in '000) %
Public / Government 11,233,776 6.67% 4,593,589 1.55% 8,400,266 10.71% Private 157,192,751 93.33% 291,783,557 98.45% 70,067,199 89.29% 168,426,527 100% 296,377,146 100% 78,467,465 100%
2012 Advances Deposits Contingencies and Commitments (Rupees (Rupees % % (Rupees in '000) in '000) in '000) %
Public / Government 10,826,928 6.39% 4,138,018 1.55% 3,398,836 4.57% Private 158,662,831 93.61% 262,460,553 98.45% 70,930,263 95.43% 169,489,759 100% 266,598,571 100% 74,329,099 100%
40.1.6 Details of non-performing advances and specific provisions by sector 2013 2012 Financial statements and notes Classified Specific Classified Specific Advances Provision Advances Provision held held ------(Rupees in '000) ------Public / Government - - - - Private 24,938,439 21,627,511 27,473,845 23,999,184 24,938,439 21,627,511 27,473,845 23,999,184
40.1.7 GEOGRAPHICAL SEGMENT ANALYSIS 2013 Profit Total Net Assets Contingencies before assets employed and taxation employed Commitments ------(Rupees in '000) ------Pakistan 16,368,185 410,260,184 56,951,889 78,467,464 16,368,185 410,260,184 56,951,889 78,467,464
2012 Profit Total Net Assets Contingencies before assets employed and taxation employed Commitments ------(Rupees in '000) ------Pakistan 9,322,355 399,055,450 55,424,068 74,329,098 9,322,355 399,055,450 55,424,068 74,329,098 152 Standard Chartered Annual Report 2013 Notes to the Consolidated Financial Statements For the year ended 31 December 2013
40.2 Market Risk The Bank recognises market risk as the exposures created by potential changes in market prices and rates. Market risk exposures arise primarily from interest rate and foreign exchange related contracts. The Bank has no significant exposure to equity and commodity price risk. Market risk is managed by the Head of Market Risk reporting directly to the CCRO, who agrees policies and procedures and levels of risk appetite in terms of Value at Risk ("VaR"). Limits are then proposed by the business within the terms of agreed policy. These are agreed and delegated down by RC under delegated authority from the BOD, and are monitored by the Head of Market Risk as part of an independent risk management function. Policies cover both trading and non-trading books. In addition to market risk policies, as well as VaR and other market risk limits, independent stress testing of portfolios, factor sensitivity measures and derivatives are also employed as additional risk management tools to manage and hedge market risk exposures. Risk models are periodically back tested against actual results to ensure that pre-determined levels of accuracy are maintained. 40.3 Foreign Exchange Risk 2013 Assets Liabilities Off-balance Net foreign sheet items currency exposure ------(Rupees in '000) ------Pakistan rupee 311,706,336 285,811,819 43,642,526 69,537,043 United States dollar 44,295,260 54,773,814 (36,301,863) (46,780,417) Great Britain pound 6,144,750 6,139,909 (832,886) (828,045) Euro 5,298,447 5,225,455 (3,509,463) (3,436,471) Swiss Franc 19,390 25,064 (123,497) (129,171) Japanese Yen 169,777 176,553 (2,172,093) (2,178,869) Others 35,048 42,804 (702,724) (710,480) 367,669,008 352,195,418 - 15,473,590
2012 Assets Liabilities Off-balance Net foreign sheet items currency exposure ------(Rupees in '000) ------Pakistan rupee 283,257,128 269,041,777 47,310,939 61,526,290 United States dollar 62,079,954 64,306,661 (41,413,711) (43,640,418) Great Britain pound 4,840,138 4,892,279 (125,476) (177,617) Euro 4,396,617 4,504,075 (2,950,089) (3,057,547) Swiss Franc 22,420 22,483 (27,538) (27,601) Japanese yen 46,712 36,799 (2,211,800) (2,201,887) Others 38,006 24,437 (582,325) (568,756) 354,680,975 342,828,511 - 11,852,464
40.3.1 Currency risk is the risk that the value of a financial instrument will fluctuate due to changes in foreign exchange rates.
40.3.2 The management sets limits on the level of exposure by currency in total, for both overnight and intra day positions which are monitored daily. 153 Notes to the Consolidated Financial Statements For the year ended 31 December 2013
40.4 MISMATCH OF INTEREST RATE SENSITIVE ASSETS AND LIABILITIES 2013 Exposed to yeid / interest rate risk Effective Total yield / Upto one Over one Over three Over six Over one Over two Over three Over five Over ten Non interest interest month month to months to months to year to years to years to years to years bearing On-balance sheet financial instruments rate three six months one year two years three years five years ten years financial months instruments ------(Rupees in '000)------Assets Cash and balances with treasury banks - 32,331,167 9,200,051 ------23,131,116 Balances with other banks - 1,608,932 ------1,608,932 Lendings to financial ------institutions 2.58% 22,158,840 17,103,259 5,055,581 ------Investments 9.83% 146,380,251 20,953,126 77,346,433 7,532,546 8,154,701 18,506,841 13,662,786 918,866 (583,505) - (111,543) Advances 10.71% 146,238,554 75,635,970 38,452,983 14,933,104 3,873,838 3,267,051 3,084,645 3,630,520 352,392 257,586 2,750,465 Other assets - 18,951,264 ------18,951,264 367,669,008 122,892,406 120,854,997 22,465,650 12,028,539 21,773,892 16,747,431 4,549,386 (231,113) 257,586 46,330,234 Liabilities Bills payable - 6,540,213 ------6,540,213 Borrowings 9.35% 17,291,175 998,018 9,005,014 4,670,543 11,616 248,880 411,917 222,354 901,512 - 821,321 Deposits and other accounts 5.93% 296,377,146 152,099,909 7,252,214 2,929,526 4,752,001 664,378 398,403 - 1,000 - 128,279,715 Sub-ordinated loan - TFCs 9.67% 2,500,000 - - 2,500,000 ------Other liabilities - 29,486,884 ------29,486,884 352,195,418 153,097,927 16,257,228 10,100,069 4,763,617 913,258 810,320 222,354 902,512 - 165,128,133 On-balance sheet gap 15,473,590 (30,205,521) 104,597,769 12,365,581 7,264,922 20,860,634 15,937,111 4,327,032 (1,133,625) 257,586 (118,797,899)
Off-balance sheet financial instruments
Forward Lending Interest Rate Swap 24,805,505 - 5,392,347 112,346 133,333 1,200,000 7,191,278 9,866,196 910,005 - - Foreign Currency option 405,781 380,565 - 25,216 ------Forward Foreign Exchange Contracts 88,259,248 32,131,937 42,531,211 12,493,100 1,103,000 ------113,470,534 32,512,502 47,923,558 12,630,662 1,236,333 1,200,000 7,191,278 9,866,196 910,005 - -
Forward Borrowing Interest Rate Swap 23,420,975 - 1,721,484 112,346 3,943,950 10,525,773 4,241,359 1,966,058 910,005 - - Foreign Currency option 405,781 380,565 - 25,216 ------Forward Foreign Exchange Contracts 77,242,740 39,108,124 31,640,920 6,493,696 ------101,069,496 39,488,689 33,362,404 6,631,258 3,943,950 10,525,773 4,241,359 1,966,058 910,005 - - Off-balance sheet gap 12,401,038 (6,976,187) 14,561,154 5,999,404 (2,707,617) (9,325,773) 2,949,919 7,900,138 - - -
Total yield / interest risk sensitivity gap 27,874,628 (37,181,708) 119,158,923 18,364,985 4,557,305 11,534,861 18,887,030 12,227,170 (1,133,625) 257,586 (118,797,899)
Cumulative yield / interest risk sensitivity gap 81,977,215 100,342,200 104,899,505 116,434,366 135,321,396 147,548,566 146,414,941 146,672,527
2012 Exposed to yeid / interest rate risk Effective Total yield / Upto one Over one Over three Over six Over one Over two Over three Over five Over ten Non interest interest month month to months to months to year to years to years to years to years bearing On-balance sheet financial instruments rate three six months one year two years three years five years ten years financial months instruments ------(Rupees in '000)------
Assets Financial statements and notes Cash and balances with treasury banks - 31,487,972 7,666,714 ------23,821,258 Balances with other banks - 2,700,218 ------2,700,218 Lendings to financial institutions 2.93% 19,845,269 17,709,484 1,650,379 485,406 ------Investments 11.18% 131,741,003 15,141,992 16,440,533 1,006,939 84,607,022 4,118,045 6,114,573 4,716,492 (581,365) - 176,772 Advances 12.31% 144,918,272 74,166,339 34,894,466 21,167,924 4,567,896 3,179,885 1,929,072 1,775,967 137,246 197,119 2,902,358 Other assets - 23,988,241 ------23,988,241 354,680,975 114,684,529 52,985,378 22,660,269 89,174,918 7,297,930 8,043,645 6,492,459 (444,119) 197,119 53,588,847 Liabilities Bills payable - 6,164,867 ------6,164,867 Borrowings 7.79% 23,399,389 6,804,482 8,124,609 6,011,959 17,473 33,338 373,987 739,952 1,262,585 - 31,004 Deposits and other accounts 6.32% 266,598,571 137,883,984 7,632,326 4,244,037 7,425,298 766,693 669,020 - - - 107,977,213 Sub-ordinated loan - TFCs 13.06% 2,750,000 - 250,000 2,500,000 ------Other liabilities - 43,915,684 ------43,915,684 342,828,511 144,688,466 16,006,935 12,755,996 7,442,771 800,031 1,043,007 739,952 1,262,585 - 158,088,768 On-balance sheet gap 11,852,464 (30,003,937) 36,978,443 9,904,273 81,732,147 6,497,899 7,000,638 5,752,507 (1,706,704) 197,119 (104,499,921)
Off-balance sheet financial instruments
Forward Lending 37,581,238 - 238,095 1,457,246 16,513,408 577,544 1,600,000 14,446,735 2,748,210 - - Interest Rate Swap 3,370,375 - 1,657,015 1,713,360 ------Foreign Currency option 35,333,170 9,655,486 15,317,400 10,313,487 46,797 ------Forward Foreign Exchange Contracts 76,284,783 9,655,486 17,212,510 13,484,093 16,560,205 577,544 1,600,000 14,446,735 2,748,210 - -
Forward Borrowing 39,231,837 266,262 922,438 183,154 10,588,131 4,462,827 12,696,308 9,250,028 862,689 - - Interest Rate Swap 3,370,375 - 1,657,015 1,713,360 ------Foreign Currency option 33,612,948 19,334,185 10,074,264 4,157,702 46,797 ------Forward Foreign Exchange Contracts 76,215,160 19,600,447 12,653,717 6,054,216 10,634,928 4,462,827 12,696,308 9,250,028 862,689 - - Off-balance sheet gap 69,623 (9,944,961) 4,558,793 7,429,877 5,925,277 (3,885,283) (11,096,308) 5,196,707 1,885,521 - -
Total yield / interest risk sensitivity gap 11,922,087 (39,948,898) 41,537,236 17,334,150 87,657,424 2,612,616 (4,095,670) 10,949,214 178,817 197,119 (104,499,921)
Cumulative yield / interest risk sensitivity gap 1,588,338 18,922,488 106,579,912 109,192,528 105,096,858 116,046,072 116,224,889 116,422,008 154 Standard Chartered Annual Report 2013 Notes to the Consolidated Financial Statements For the year ended 31 December 2013
40.5 Yield / Interest Rate Risk
Yield risk is the risk of decline in earnings due to adverse movement of the yield curve. Interest rate risk is the risk that the value of financial instruments will fluctuate due to changes in the market interest rates. The Bank is exposed to various risks associated with the effects of fluctuations in the prevailing levels of market interest rates on its financial position and cash flows. The Bank manages this risk by matching the re-pricing of assets and liabilities and off-balance sheet instruments.
40.6 Liquidity Risk
The Bank defines liquidity risk as the risk that the Bank either does not have sufficient financial resources available to meet all its obligations and commitments as and when they fall due, or can access them only at an excessive cost.
Liquidity risk, both short term and structural is monitored through the internal liquidity risk management framework and is managed through the Asset and Liability Committee ("ALCO"). This committee, chaired by the CEO, is responsible for liquidity risk management.
Liquidity risk is monitored through the internal liquidity risk management policy. A range of tools are used for the management of liquidity. These comprise commitment and wholesale borrowing guidelines, key balance sheet ratios, medium term funding requirements and day to day monitoring of future cash flows.
In addition, liquidity contingency funding plans are reviewed periodically to ensure that alternative funding strategies are in place and can be implemented on a timely basis to minimise the liquidity risk that may arise due to unforeseen adverse changes in the market place.
A substantial portion of the Banks assets are funded by customer deposits made up of current and savings accounts and other deposits. These customer deposits, which are widely diversified by type and maturity, represent a stable source of funds.
The Bank also maintains significant levels of marketable securities either for compliance with local statutory requirements or as prudential investments of surplus funds.
40.7 MATURITIES OF ASSETS AND LIABILITIES - based on contractual maturity of assets and liabilities of the group
In accordance with the guidelines issued by SBP through BSD Circular Letter No. 3 of 2011 and BSD Circular Letter No. 2 of 2013, Banks are required to disclose maturities of assets and liabilities separately for 'contractual maturities' and 'expected maturities'. The expected maturities are calculated using three (3) years historical balances and identifying "Core" and "Non-Core" balances using monthly volatility analysis. Fixed / intangible assets are presented on the basis of their depreciation / amortisation schedule. 155 Notes to the Consolidated Financial Statements For the year ended 31 December 2013
2013
Total Upto one Over one Over three Over six Over one Over two Over three Over five Over ten month month to months to months to year to years to years to years to years three months six months one year two years three years five years ten years Assets ------(Rupees in '000)------
Cash and balances with treasury bank 32,331,167 32,331,167 ------Balances with other banks 1,608,932 1,608,932 ------Lendings to financial institutions 22,158,840 17,103,259 5,055,581 ------Investments 146,380,251 19,622,173 77,657,925 7,532,546 8,154,701 18,506,841 13,662,786 1,203,891 39,388 - Advances 146,238,554 72,610,262 31,566,825 10,675,705 3,378,562 5,012,177 7,573,716 9,234,459 3,991,877 2,194,971 Other assets 29,146,856 4,044,778 12,435,715 427,145 2,423,670 3,668,938 5,944,729 193,229 8,539 113 Operating fixed assets 6,172,744 14,605 29,256 43,945 87,888 231,742 188,966 342,583 786,285 4,447,474 Intangible assets 26,222,840 919 1,838 2,756 5,513 11,025 11,129 21,522 53,483 26,114,655 Deferred tax assets ------410,260,184 147,336,095 126,747,140 18,682,097 14,050,334 27,430,723 27,381,326 10,995,684 4,879,572 32,757,213
Liabilities Bills payable 6,540,213 6,540,213 ------Borrowings 17,291,175 1,094,339 9,005,014 4,753,876 178,282 490,547 528,584 339,021 901,512 - Deposits and other accounts 296,377,146 280,379,623 7,252,214 2,929,527 4,752,001 664,378 398,403 - 1,000 - Sub-ordinated loan - TFCs 2,500,000 ------2,500,000 - Deferred tax liabilities 260,651 ------260,651 - - Other liabilities 30,339,110 5,651,097 6,255,794 2,971,732 11,336,539 1,069,029 1,565,135 1,481,245 8,539 - 353,308,295 293,665,272 22,513,022 10,655,135 16,266,822 2,223,954 2,492,122 2,080,916 3,411,051 - 56,951,889 (146,329,177) 104,234,118 8,026,962 (2,216,488) 25,206,769 24,889,204 8,914,768 1,468,521 32,757,213
Net assets Share capital 38,715,850 Reserves 7,180,552 Unappropriated profit 6,721,973 Surplus/(deficit) on revaluation of assets 3,451,192 Non-controlling interest 882,322 56,951,889
2012
Total Upto one Over one Over three Over six Over one Over two Over three Over five Over ten month month to months to months to year to years to years to years to years three months six months one year two years three years five years ten years ------(Rupees in '000)------Assets
Cash and balances with treasury bank 31,487,972 31,487,972 ------Balances with other banks 2,700,218 2,700,218 ------Lendings to financial
institutions 19,845,269 17,709,484 1,650,379 485,406 ------Financial statements and notes Investments 131,741,003 14,409,701 16,440,533 1,006,939 84,607,022 4,118,045 6,114,573 4,716,492 327,698 - Advances 144,918,272 63,885,938 23,297,224 15,310,197 6,852,981 13,264,692 6,712,668 7,018,894 6,642,290 1,933,388 Other assets 34,257,981 623,173 15,753,628 9,615,106 7,318,214 20,764 220,291 520,208 186,597 - Operating fixed assets 6,381,584 15,799 31,527 47,364 94,967 311,385 197,777 371,660 884,113 4,426,991 Intangible assets 26,275,598 648 1,293 1,940 3,881 7,761 8,237 15,524 37,719 26,198,596 Deferred tax assets 1,447,553 75,991 - - - - - 1,371,562 - - 399,055,450 130,908,923 57,174,584 26,466,952 98,877,065 17,722,647 13,253,546 14,014,340 8,078,417 32,558,975 Liabilities
Bills payable 6,164,867 6,164,867 ------Borrowings 23,399,389 6,835,486 8,124,609 6,011,959 17,473 33,338 373,987 739,952 1,262,585 - Deposits and other accounts 266,598,571 245,861,197 7,632,326 4,244,037 7,425,298 766,693 669,020 - - - Sub-ordinated loan - TFCs 2,750,000 - 250,000 - - - - - 2,500,000 - Other liabilities 44,718,555 14,921,341 7,814,991 1,387,895 9,683,161 4,970,065 3,807,404 1,557,127 576,571 - 343,631,382 273,782,891 23,821,926 11,643,891 17,125,932 5,770,096 4,850,411 2,297,079 4,339,156 - 55,424,068 (142,873,968) 33,352,658 14,823,061 81,751,133 11,952,551 8,403,135 11,717,261 3,739,261 32,558,975
Net assets
Share capital 38,715,850 Reserves 5,068,628 Unappropriated profit 6,846,940 Surplus/(deficit) on revaluation of assets 3,966,809 Non-controlling interest 825,841 55,424,068 156 Standard Chartered Annual Report 2013 Notes to the Consolidated Financial Statements For the year ended 31 December 2013
40.8 MATURITIES OF ASSETS AND LIABILITIES - based on expected maturity of assets and liabilities of the bank
2013
Total Upto one Over one Over three Over six Over one Over two Over three Over five Over ten month month to months to months to year to years to years to years to years three months six months one year two years three years five years ten years Assets ------(Rupees in '000)------
Cash and balances with treasury banks 32,331,167 32,331,167 ------Balances with other banks 1,608,932 1,608,932 ------Lendings to financial institutions 22,158,840 17,103,259 5,055,581 ------Investments 146,380,251 19,622,173 77,657,925 7,532,546 8,154,701 18,506,841 13,662,786 1,203,891 39,388 - Advances 146,238,554 27,169,117 34,031,850 14,373,242 10,773,635 36,895,687 7,573,716 9,234,459 3,991,877 2,194,971 Other assets 29,146,856 4,044,777 12,435,716 427,145 2,423,670 3,668,938 5,944,729 193,229 8,539 113 Operating fixed assets 6,172,744 14,605 29,256 43,945 87,888 231,742 188,966 342,583 786,285 4,447,474 Intangible assets 26,222,840 919 1,838 2,756 5,513 11,025 11,129 21,522 53,483 26,114,655 Deferred tax assets ------410,260,184 101,894,949 129,212,166 22,379,634 21,445,407 59,314,233 27,381,326 10,995,684 4,879,572 32,757,213
Liabilities
Bills payable 6,540,213 6,540,213 ------Borrowings 17,291,175 1,094,340 9,005,014 4,753,876 178,282 490,547 528,584 339,021 901,512 - Deposits and other accounts 296,377,146 27,788,513 14,640,373 14,011,764 26,916,477 212,620,616 398,403 - 1,000 - Sub-ordinated loans 2,500,000 ------2,500,000 - Deferred tax liabilities 260,651 ------260,651 - - Other liabilities 30,339,110 5,651,097 6,255,794 2,971,732 11,336,539 1,069,029 1,565,135 1,481,245 8,539 - 353,308,295 41,074,163 29,901,181 21,737,372 38,431,298 214,180,192 2,492,122 2,080,917 3,411,051 - 56,951,889 60,820,786 99,310,985 642,262 (16,985,891) (154,865,959) 24,889,204 8,914,767 1,468,521 32,757,213 Net assets
Share capital 38,715,850 Reserves 7,180,552 Unappropriated profit 6,721,973 Surplus on revaluation of assets - net 3,451,192 Non-controlling interest 882,322 56,951,889 2012
Total Upto one Over one Over three Over six Over one Over two Over three Over five Over ten month month to months to months to year to years to years to years to years three months six months one year two years three years five years ten years Assets ------(Rupees in '000)------
Cash and balances with treasury banks 31,487,972 31,487,972 ------Balances with other banks 2,700,218 2,700,218 ------Lendings to financial institutions 19,845,269 17,709,484 1,650,379 485,406 ------Investments 131,741,003 14,409,701 16,440,533 1,006,939 84,607,022 4,118,045 6,114,573 4,716,492 327,698 - Advances 144,918,272 20,581,671 25,219,929 18,194,255 12,621,096 45,994,081 6,712,668 7,018,894 6,642,290 1,933,388 Other assets 34,257,981 623,173 15,753,628 9,615,106 7,318,214 20,764 220,291 520,208 186,597 - Operating fixed assets 6,381,584 15,799 31,527 47,364 94,967 311,385 197,777 371,660 884,113 4,426,991 Intangible assets 26,275,598 647 1,293 1,940 3,881 7,761 8,237 15,524 37,719 26,198,596 Deferred tax assets 1,447,553 75,991 - - - - - 1,371,562 - - 399,055,450 87,604,656 59,097,289 29,351,010 104,645,180 50,452,036 13,253,546 14,014,340 8,078,417 32,558,975 Liabilities
Bills payable 6,164,867 6,164,867 ------Borrowings 23,399,389 6,835,486 8,124,609 6,011,959 17,473 33,338 373,987 739,952 1,262,585 - Deposits and other accounts 266,598,571 23,765,305 14,423,041 14,430,109 27,797,441 185,513,655 669,020 - - - Sub-ordinated loans 2,750,000 250,000 ------2,500,000 - Other liabilities 44,718,555 1,833,477 12,615,826 1,852,128 25,214,583 883,373 832,474 1,356,268 130,046 380 343,631,382 38,849,135 35,163,476 22,294,196 53,029,497 186,430,366 1,875,481 2,096,220 3,892,631 380 55,424,068 48,755,521 23,933,813 7,056,814 51,615,683 (135,978,330) 11,378,065 11,918,120 4,185,786 32,558,595 Net assets
Share capital 38,715,850 Reserves 5,068,628 Unappropriated profit 6,846,940 Deficit on revaluation of assets - net 3,966,809 Non-controlling interest 825,841 55,424,068 157 Notes to the Consolidated Financial Statements For the year ended 31 December 2013
40.9 Operational Risk
Operational risk is the risk of a direct or indirect loss being incurred due to an event or action arising from the failure of technology, processes, infrastructure, personnel and impact of external events.
The Country Operational Risk Committee ("CORC") has been established to ensure that an appropriate risk management framework is in place at a grass root level, and to report, monitor and manage operational, social, ethical and environmental risk. The CORC is chaired by the CEO, and CCRO is an active member of this forum.
All business units within the Bank monitor their operational risks using set standards and indicators. Significant issues and exceptions are reported to CORC and are also picked up by the independent Risk function for discussion at the Country Risk Committee chaired by the CCRO. Disaster recovery procedures, business contingency planning, self-compliance assurance and internal audits also form an integral part of the operational risk management process.
41 ISLAMIC BANKING BUSINESS
The Bank is operating with 10 Islamic Banking branches at the end of current period (December 2012: 14 branches).
41.1 Balance Sheet Note 2013 2012 ------(Rupees in '000) ------
Assets Cash and balances with treasury banks 1,899,718 1,967,261 Balances with other banks 5,055,581 5,537,533 Due from Financial Institutions - 500,000 Investments 10,848,738 8,685,651 Islamic Financing and Related Assets 41.1.1 27,921,996 18,575,327 Operating fixed assets 196,569 209,301 Other assets 606,873 395,812 46,529,475 35,870,885 Liabilities Bills payable 2,760 10,108 Due to Financial Institutions 1,060,000 1,368,000
Deposits and other accounts Current Accounts 20,042,224 16,020,883 Saving Accounts 11,816,177 10,784,418 Term Deposits 2,721,606 3,200,580 Financial statements and notes Others - 27,390 Deposit from Financial Institutions -Remunerative 256 206,593 Deposits from Financial Institutions-Non-Remunerative - - 34,580,263 30,239,864 Due to Head Office 5,709,033 449,923 Other liabilities 41.3 130,390 806,046 41,482,446 32,873,941 Net Assets 5,047,029 2,996,944
Represented by: Islamic Banking Fund 200,000 200,000 Unappropriated/ Unremitted profit 4,754,891 2,886,293 4,954,891 3,086,293 Surplus / (deficit) on revaluation of assets - net 92,138 (89,349) 5,047,029 2,996,944 158 Standard Chartered Annual Report 2013 Notes to the Consolidated Financial Statements For the year ended 31 December 2013
Note 2013 2012 ------(Rupees in '000) ------
CONTINGENCIES AND COMMITMENTS 21
Remuneration to Shariah Advisor/Board 3,218 1,087
Charity fund Opening balance 20,411 2,023 Additions during the year 4,294 30,064 Payments / utilization during the year (23,634) (11,676) Closing balance 1,071 20,411
41.1.1 Islamic Mode of Financing Murabaha 41.1.1a 11,645,654 5,516,120 Musharaka 41.1.1b 5,597,541 - Diminishing Musharaka 41.1.1c 9,166,725 12,887,191 Istisna 41.1.1d 1,223,843 - Musawammah 41.1.1e 98,850 - Others 41.1.1f 189,383 172,016 27,921,996 18,575,327 41.1.1a Murabaha Financings/Investments/Receivables 4,971,128 2,834,787 Advances 6,379,093 2,681,333 Assets/Inventories 295,433 - 11,645,654 5,516,120 41.1.1b Musharaka Financings/Investments/Receivables 5,597,541 - 5,597,541 - 41.1.1c Diminishing Musharaka Financings/Investments/Receivables 9,166,725 12,887,191 9,166,725 12,887,191 41.1.1d Istisna Financings/Investments/Receivables 1,223,843 - 1,223,843 - 41.1.1e Musawammah Financings/Investments/Receivables 98,850 - 98,850 - 41.1.1f Others Financings/Investments/Receivables 189,383 172,016 189,383 172,016 41.2 Profit and Loss Profit / return earned on financings, investments and placements 3,328,123 3,008,214 Return on deposits and others dues expensed (934,810) (898,256) Net spread earned 2,393,313 2,109,958 (Reversal) / provision against non performing financing (191,960) 172,890 Net spread after provisions 2,201,353 2,282,848
Other income Fees, commission and brokerage income 654,097 765,288 Other income 755 181 Total other income 654,852 765,469 2,856,205 3,048,317 Other expenses Administrative expenses (987,607) (1,785,178) Profit before taxation 1,868,598 1,263,139
41.3 This includes acceptances of Rs.NIL (2012: Rs 661 million). 159 Notes to the Consolidated Financial Statements For the year ended 31 December 2013
41.4 Profit & Loss distribution and Pool Management
The Bank manages following assets pools for profit and loss distribution:
a) Islamic Export Refinance Scheme (IERS) Musharakah Pool; and
b) Mubarabah Depositors Pool
a) IERS Musharakah Pool
Key features, risks, rewards and calculation of profit/loss of this pool are in compliance with the SBP IER Scheme and the relevant circulars issued by SBP from time to time.
b) Mubarabah Depositors Pool
i) Key features and risk & reward characteristics
Deposits are accepted from customers on the basis of Qard for current accounts and Mudaraba for Saving and Term deposits. Current Accounts are not part of the Mudaraba Pool hence no profit or loss is passed on to current account depositors.
For deposits accepted on Mudaraba basis from depositors (Rab-ul-Maal), the Bank acts as Manager (Mudarib) and invests the funds in Shariah Compliant modes of financings. Depositors (Rab-ul-Maal) share is distributed among the various categories of depositors according to weightages declared for a month before start of the period for the relevant categories.
In case of loss in a pool during the profit calculation period, the loss will be distributed among the depositors (remunerative) according to their ratio of investment.
ii) Parameters used for allocation of profit, charging expenses and provisions
The profit of deposit pool is calculated on all the remunerative assets tagged to the Mudaraba Pool, by utilising the funds from the pool after deduction of expenses directly incurred in earning the income of such pool, if any. The framework and the methodology is duly approved by the Shariah Advisor. Resultant profit, net of Banks share as investor, is distributed between Mudarib and Rab-ul- Maal based on sharing ratio declared before start of month. Financial statements and notes
The ratio for Mudarib and Rab-ul-maal was 50:50 in both general and special pools. No expense of general or administrative nature or any provision against any non-performing asset of the pool is passed on to the pool except on the actual loss / write-off of such non-performing asset.
iii) Deployment of Mudaraba based deposits
The deposits and funds accepted under the above mentioned pools are provided to diverse sectors including Cement, Chemical, Pharmaceuticals, Communication, Sugar, Textile, Agribusiness, Transport etc. as well as in Government of Pakistan backed Ijarah Sukuks. 160 Standard Chartered Annual Report 2013 Notes to the Consolidated Financial Statements For the year ended 31 December 2013
Type of Pool iv) Other information General Special
Profit rate / weightage announcement frequency Monthly Monthly
Mudarib share (amount in 000) 513,889 59,959
Mudarib share (%) 43.35% 21.27%
Mudarib Share transferred through Hiba (amount in 000) 78,817 81,014
Mudarib Share transferred through Hiba (%) 13.30% 57.47%
Average return on pool assets 10.35% 9.78%
Average return on deposits 5.87% 7.76%
42 DATE OF AUTHORIZATION
These financial statements were authorized for issue in the Board of Directors meeting held on 05 March 2014.
Khalid Elgibaly Najam I. Chaudhri Parvez Ghias Raheel Ahmed Chief Executive Director Director Director 161 Consolidated Statement of Financial Position Annexure-1 Statement in respect of written-off loans or any other financial relief of five hundred thousand rupees or above as required under sub-section (3) of section 33A of the Banking Companies Ordinance, 1962 during the year ended 31 December, 2013. Amount in PKR Sr. Name Address Name of Partners / Father / Husband Name Outstanding Libilities at Beginning of Year Amount Written off / Concession No. Directors NIC / CNIC Principle Interest/ Total Principle Interest/ Total Markup Markup Balance (Gross)
1 Faisal Khurshid 51 Attaturk Block New Garden Town Lahore 35202-5455216-9 Mirza Khurshid Anwar 5,398,883 2,254,369 7,653,253 1,349,721 2,254,369 3,604,091 2 Sh. Jawaid Iqbal 885 Shadman Colony No 1 Lahore 35202-5352357-1 GHULAM RASOOL 4,296,752 1,656,341 5,953,093 859,351 1,656,341 2,515,692 3 Sheikh Muhammad Arshad 26 D Shadman Colony Faislabad 33100-5482564-9 HAJI GHULAM HUSSAIN 9,252,421 3,703,346 12,955,767 2,252,421 3,703,346 5,955,767 4 Shakoor Ahmed 41 F Shah Rukn E Alam Colony Multan 330-51-055236 CH. NASIR UDDIN 5,588,619 3,161,525 8,750,144 2,088,619 3,161,525 5,250,144 5 Hafsa Ghous & Or Ghous Muhamad 768 Ravi Block Allama Iqbal Town Lahore P O 35202-2393659-6 GHOUS MUHAMAD 1,376,960 389,321 1,766,281 137,696 389,321 527,017 Box 54570 6 Muhammad Iftikhar Rasool 112217 H Sanghar Wihara Inside Pak Gate 36302-0476647-3 FAIZ RASOOL 2,299,899 960,183 3,260,082 344,899 960,183 1,305,082 Multan 7 Rana Liaqat Ali 98 S Masoom Shah Roadnew Multan 322-50-099156 RANA REHMAT ALI 4,491,837 1,875,874 6,367,711 891,837 1,875,874 2,767,711 (LATE) 8 Pervaiz Ahmed H No 291 A Block 4 K A E C H S Karachi 42201-7300421-3 MUHAMMAD UMER 7,400,000 3,211,293 10,611,293 2,590,000 3,211,293 5,801,293 KHAN 9 Muhammad Farooq Azam 9/1 C Peoples Colony No 1 Faislabad 33100-3537494-7 ABDUL HAMEED 3,091,557 827,343 3,918,900 587,396 827,343 1,414,738 10 Hafeez-Ur-Rehman Babar Ummar Rd Link Muslim Rd Gujaranwala 34101-9487815-7 MUHAMMAD SHAFI 2,459,364 568,656 3,028,020 368,905 568,656 937,561 11 Waseem Ul Haq M 1 Cantt View Housing Scheme Badian 35201-4495870-9 AZIZ UL HAQ 800,815 575,612 1,376,427 - 575,612 575,612 Road Lahore 12 Zulfiqar Ali Raifal Rd Super Town Dha Cantt Lahore 35201-5353720-9 HAJI ALLAH DITTA 1,643,299 685,813 2,329,113 312,227 685,813 998,041 13 Pervez Pyar Ali & Or Malik Pyar Ali 222/2 Al Karim Town House Manaeckji St 42201-6420647-3 PYAR ALI MANJI 1,555,639 460,265 2,015,904 255,639 460,265 715,904 Garden East 14 Muhammad Sarwar House No 740 Mohallah Koriarpur Rawalpindi 37405-1754319-7 SARDAR MUHAMMAD 1,720,913 693,036 2,413,949 258,913 693,036 951,949 15 Muhammad Ramzan &/Or Shakeel Ahmed House No 856 St No 20 G-10/1 Isl 61101-3207983-7 MUHAMMAD YAAR 948,260 741,513 1,689,773 - 741,513 741,513 (LATE) 16 Muhammad Musharaf B 320/3 Faiza Avenue 11 C/1 North Karachi 42101-9192087-1 MUHAMMAD ARIF 1,769,263 344,275 2,113,538 219,263 344,275 563,538 (LATE) 17 Tahir Fazil 21 C Muslim Town Lahore 35202-8918855-3 BILAL TAHIR 16,779,545 13,866,080 30,645,625 6,711,822 13,866,080 20,577,902 18 Jutt Weaving Factory P.390/10 St#08 Ayub Colony 439-93-180000 MUHAMMAD RAMZAN 946,877 359,847 1,306,724 189,377 359,847 549,224 19 Anwar Ullah Alvi 1445 B Peoples Colony No 1 Near Pilot Ground 33100-7614336-7 JAFAR ULLAH ALVI 1,862,270 928,414 2,790,684 655,270 928,414 1,583,684 Faislabad 20 Mussawir Hussain Bakhtiari House No 40 A 1 St 16 Officers Colony Cavelery 35201-9371577-9 MASOOD HUSSAIN 24,656,459 10,281,880 34,938,339 7,656,459 10,281,880 17,938,339 Ground BAKHTIARI 21 Muhammad Rizwan Ali House # Nw/455,Saidpur Scheme Rawalpindi 37405-1750946-7 SHEIKH MOHAMMAD 2,860,999 667,246 3,528,244 94,999 667,246 762,244 TARIQ 22 Abdul Waheed Rawat House No 746 St No 3 I -9/1 Ial 61101-3927767-5 ABDUL MAJEED 2,253,724 818,290 3,072,014 315,724 818,290 1,134,014 23 Tawakal Haider House No 223 St No 5 Cavelery Ground Lahore 35201-5924093-7 IJAZ ALI (LATE) 3,109,839 1,273,012 4,382,852 359,839 1,273,012 1,632,852 24 Tariq Aziz Hussain 247 D Peoples Colony No 1 Near Khazra 33100-2941568-9 MUHAMMAD HUSSAIN 2,334,960 806,131 3,141,091 466,992 806,131 1,273,123 Mosque Faislabad 25 Marium Aftab Flat No 5 H No 112 B Main Gulberg Road Lahore 35202-2419157-8 AFTAB AHMED SHEIKH 5,958,923 2,484,857 8,443,779 1,758,923 2,484,857 4,243,779 (LATE) 26 Muhammad Sohail H No 73 St No 17 A Lane 3 Chaklala 3 37405-9017740-7 MUHAMMAD SHARIF 7,979,268 3,341,664 11,320,932 1,959,268 3,341,664 5,300,932 Rawalpindi 27 Syed Israr Hussain Shah 101 C Punjab Corporalince Housing Society 35201-4032477-7 SYED MUHAMMAD 973,633 406,838 1,380,471 194,726 406,838 601,564 Lahore Cant ISHAQ SHAH 28 Malik Shafqat Hayat House No 252/3 St No 34 Z Block Dha Lahore 35201-1326487-9 MALIK MUHAMMAD 8,843,200 4,648,940 13,492,140 5,575,200 4,648,940 10,224,140 HUSSAIN Financial statements and notes 29 Muhammad Javaid Iqbal House No 3 W Z Madina Town Faislabad 33100-3149056-3 MUHAMMAD TUFAIL 5,155,498 2,169,831 7,325,329 955,498 2,169,831 3,125,329 30 Malik Imran Talib Thokar Niaz Baig Bahir Wala Havali Lahore 35200-1453620-5 MALIK ISRAR HUSSAIN 12,985,274 5,150,436 18,135,710 6,985,274 5,150,436 12,135,710 31 Tariq Javed Weaving Factory House #P66 St#3 Afghana Bad#1 Dhakhana 33100-0964965-1 MUHAMMAD ASLAM 1,240,138 496,140 1,736,278 186,021 496,140 682,161 Gulberg SAJID 32 Amjad Niaz Abbasi House No 981 Zeeshan Colony Cobbe Line 37405-9916774-7 RAJA NIAZ AHMAD 10,100,000 4,204,819 14,304,819 3,938,700 4,204,819 8,143,519 Rawalpindi 33 Faisal Murad Flat No 4701 1St Floor Defence Garden Phase 42301-1225942-1 SHUJAAT ULLAH KHAN 1,793,562 747,827 2,541,388 492,962 747,827 1,240,788 1 Dha 34 Jameel Uddin H No A 27 Blue No 3 Gulshan E Iqbal Karachi 42101-1707727-3 MOHAMMAD ANWAR 9,413,343 3,929,583 13,342,926 2,823,943 3,929,583 6,753,526 35 Ghulam Haider H#220-F Mohallah Shah Rukh-E-Alam 36302-5488123-9 ALI MUHAMMAD 1,936,294 549,924 2,486,218 366,294 549,924 916,218 36 Muhammad Maqbool Abbassi House No 334 St No 25 Sector I 10/4 Islamabad 61101-1833405-5 WALI DAAD KHAN 2,309,306 964,109 3,273,416 309,306 964,109 1,273,416 ABBASI 37 Malik Zari Corporation Jaranwala Road, Mandi Faizabad, Sheikhupura 35402-2457966-1 KHUSHI MOHAMMAD 5,077,152 613,076 5,690,228 77,152 613,076 690,228 38 M/S Muslim Khad Merchant Ghala Mandi Bhalwalpur 38401-0338250-9 MUHAMMAD AKRAM 18,359,837 6,971,249 25,331,085 7,343,935 6,971,249 14,315,183 SHAH 39 Saleem Ahmed C 1 Ground Floor Sea Breez Super Star 42301-3315174-9 KHAWAJA NAZEER 7,995,317 3,334,098 11,329,414 2,095,317 3,334,098 5,429,414 Appartments AHMED 40 Ikram Zari Corporation Ghalla Mandi, Main Bazar, Farooqabad, Distt. 35404-0903137-5 MUHAMMAD AMIN 4,199,211 1,573,499 5,772,711 1,499,211 1,573,499 3,072,711 Sheikhupura 41 Sheikh Muhammad Saeed House No 249 B Gulgasht Colony Multan 36302-0399617-9 SHEIKH FAZAL UR 5,799,357 2,376,367 8,175,724 2,184,357 2,376,367 4,560,724 REHMAN 42 Afzaal & Company Ghalla Mandi,Pattoki.Distt.Kasur. 35103-1369521-3 GHULAM ALI 18,297,956 6,343,205 24,641,160 11,647,956 6,343,205 17,991,160 43 Mohammad Nadeem 4 F 11/14 Nazimabad Near Nadra Office Karachi 42101-1615920-3 HAJI ABDUL RASHEED 5,830,201 2,420,835 8,251,036 1,430,201 2,418,335 3,848,536 44 Rana Mazhar Iqbal P 307 Street No 11 Taj Colony Islamia College 33100-9897671-7 RANA MUHAMMAD 2,500,000 1,030,428 3,530,428 450,000 1,030,428 1,480,428 Faislabad IQBAL 45 Bhutta Spray Center Ghala Mandi Bazar Pakpattan 36402-5044305-7 SARDAR MUHAMMAD 1,634,453 347,417 1,981,869 334,453 347,417 681,869 46 Samina Tabbasum Plot No 620 Jblock G G Phase Vi Dha Lahore 35202-7495307-3 SHAHZAD SARWAR 2,396,877 992,370 3,389,248 479,367 992,370 1,471,738 BUTT 47 Tariq Islam H No 430 F Shah Rukn E Alam Colony Mlt 36302-8516312-7 CHAUDHARY MUHAM- 3,764,045 1,354,091 5,118,136 924,045 1,354,091 2,278,136 MAD ISLAM 162 Standard Chartered Annual Report 2013 Consolidated Statement of Financial Position Annexure-1
Amount in PKR Sr. Name Address Name of Partners / Father / Husband Name Outstanding Libilities at Beginning of Year Amount Written off / Concession No. Directors NIC / CNIC Principle Interest/ Total Principle Interest/ Total Markup Markup Balance (Gross)
48 Javed Mehmood Khawaja Khawaja House Khawaja Street Sunny Bayers 36302-0468420-3 MEHMOOD HASSAN 1,380,162 596,783 1,976,945 450,162 596,783 1,046,945 Saddiqui KHAWAJA 49 Raja Mehboob Hussain H No 1165 St No 108 Sector 1-10/9 Islamabad 61101-7841117-1 RAJA SHAH WALI 9,571,194 1,436,992 11,008,186 449,000 1,436,992 1,885,992 50 Anas Mustafa E / 65 Block F North Nazimabad Karachi 42101-8565282-5 HASSAN ABBAS 1,191,916 988,235 2,180,152 303,366 988,185 1,291,552 51 Mohammad Amin Mugal House No 385 St No 5 Allama Iqbal Town 42301-0800937-9 ALLAH DITTA MUGHAL 3,455,327 1,597,092 5,052,419 1,298,407 1,597,092 2,895,499 Mehmoodabad 52 Bilal Ahmed Moh Neel Kot Near Masjid Anwar E Madina 36303-5984959-9 AHMED BUKHSH 1,288,540 512,484 1,801,024 188,540 512,484 701,024 Post Offic 53 Shahzad Imran Fabrics P-84, Wakilian Wali Gali,St#4 Kachery Bazar 33100-6281151-9 MUHAMMAD IQBAL 14,484,945 5,443,170 19,928,115 3,184,945 5,443,170 8,628,115 54 Shahid Riaz Butt Nasif Lodge Al Haram St Muradiya Road 34603-2350734-7 MUHAMMAD RIAZ 2,398,628 1,002,033 3,400,661 719,008 1,002,033 1,721,041 Model Town S WASIF 55 Farooq Ali Hashmi 47 D Zarar Shaheed Rod Al Faisal Town Lahore 35201-2632344-1 MOHAMMAD SIDDIQUE 4,479,833 1,867,055 6,346,888 1,478,345 1,867,055 3,345,400 HASHMI 56 Bismillah Fertilizer Defence Road Kahna Kacha, Station 35202-2869318-5 MUHAMMAD SHARIF 1,693,374 434,376 2,127,750 338,674 434,376 773,050 Chowk,Distt.Lahore 57 Bashir And Sons Weaving Factory Chak # 188/ R.B Chak Jhumra Nalay Wala 33101-1710785-1 NAZAR ALI KHAN 2,951,271 1,111,391 4,062,662 451,271 1,111,391 1,562,662 58 Fayyaz Ahmed Khan Khakwani &Or Muha Opp. Madarsa Minhaj Ul Quran, Khanewal 36302-6662204-1 SHAHNAWAZ KHAN 4,799,220 2,836,341 7,635,561 959,220 2,836,341 3,795,561 Road, Stree KHAKWANI 59 Shahid Traders 301-B, Gulistan Colony Near Ideal Bakers 33101-9673855-1 SHOUKAT MEHMOOD 1,867,055 696,906 2,563,960 499,955 696,906 1,196,860 Faisalabad CHATHA 60 Sharif Brothers Near Shell Pump Multan Road Mailsi Distt Vehari 36602-5392867-1 AHMED YAR 4,361,806 2,037,500 6,399,305 961,806 2,037,500 2,999,305 61 Tahir Nizam House No 281/A Street 13 Chaklala Scheme 37405-1459714-7 NIZAMUDDIN 2,700,000 1,168,415 3,868,415 600,000 1,168,415 1,768,415 Iii Rawalpindi 62 National Zarri Services National Zarri Services Railway Road Hasilpur 31203-3234558-7 ALLAH DITTA 6,998,323 3,354,081 10,352,404 1,889,547 3,354,081 5,243,628 63 Rizwan Ali 331-A Model Town Gujranwala 34101-2377821-9 MUHAMMAD AKRAM 6,330,354 2,655,436 8,985,790 1,830,354 2,655,436 4,485,790 CHOHAN 64 Raja Habib Ur Rehman House No.86-A Margalla Road Sector F-6/2 61101-2988707-7 RAJA ABDUL REHMAN 17,951,213 6,056,902 24,008,114 - 6,056,902 6,056,902 Islamamab 65 Muhammad Saleem Butt H # 13,Motia Gali ,Tajbagh Lahore Cantt. 35201-1568171-7 MUHAMMAD ASLAM 5,212,448 2,176,956 7,389,404 1,012,448 2,176,956 3,189,404 BUTT 66 Fayyaz Hashmat House No.84 Block C Phase 1 Shah Rukn-E- 36302-0413985-1 HASHMAT ALI 1,934,711 812,405 2,747,116 434,711 812,405 1,247,116 Alam Post 67 Ishfaq Spray Centre Ishfaq Spray Centre Quaid-I-Azam Road 36202-5571792-3 SYED AKBAR SHAH 972,239 364,863 1,337,102 272,239 364,863 637,102 Kehror Pacca 68 Muhammad Waheed H # P-777/389, Bazar # 3 ,St #17 ,Razabad 33100-7758835-1 MUHAMMAD SAEED 2,000,000 832,102 2,832,102 360,000 832,102 1,192,102 ,Faisal 69 Raja Liaqat Ali Khan D-472 Satellite Town Rawalpindi 37405-9023251-3 NAMAT KHAN 12,781,905 8,335,308 21,117,213 2,781,905 8,335,308 11,117,213 70 Malik Azam Mahmood (Mf) 304 Sabzazar Schem Multan Road Lahore 35202-2534191-9 MALIK AHMED DIN 1,994,661 361,397 2,356,058 159,573 361,397 520,970 71 Ch. Iftikhar Traders Ch.Iftikhar Traders Seet Pur Road Ali Pur Distt. 32301-4823138-1 YAQOOB ALI 3,333,196 1,252,101 4,585,297 973,196 1,252,101 2,225,297 Muzzafar Garh 72 Zafar Iqbal Farrukh House # 61 ,Sector Cc ,Dha Lahore . 35201-9801764-5 CH. ALI MOHAMMAD 8,347,983 1,256,746 9,604,728 200,000 1,256,746 1,456,746 CHEEMA 73 Naya Sawera Naya Sewera Mailsy Road Adda Ameer Station 36202-0927407-5 ALLAH BACHAYA 1,787,375 718,562 2,505,938 267,375 718,562 985,938 Kehror Pacca. 74 Qartaba Agro Services Qartaba Agro Services, Railway Road Shujabad 36304-4348143-1 MUHAMMAD HANIF 2,194,990 1,408,004 3,602,993 658,845 1,408,004 2,066,849 75 Kissan Traders Ghalla Mandi Kot Samaba Tehsil & Distt. Rahim 31303-7841533-5 CHAUDHRY MUHAM- 6,298,895 2,357,857 8,656,752 2,456,568 2,357,857 4,814,425 Yar Khan MAD RAFIQ 76 Naseem Iqbal P-10/233 ,Street # 8 ,Liaqatabad # 2 ,Faislabad. 33100-9030875-5 KHUDA BUKHSH 793,829 606,534 1,400,363 223,829 606,534 830,363 77 Mirza Jalil Akhtar Jilo House# 180/A, Street # 4, Officer Colony, 35201-9597755-3 MIRZA SHER ZAMAN 9,950,586 3,792,149 13,742,736 1,990,117 3,792,149 5,782,267 Cavalary 78 Mohammad Badrut Tauhid Dh-91 Block-L North Nazimabadkarachi 42401-2074777-7 MUHAMMAD SHAM- 1,356,228 414,420 1,770,648 256,228 414,420 670,648 SHUT TAUHID 79 Muhammad Ikram-Ul-Haq House No. 307, Block - M - Dha, Lahore. 35202-9513390-7 WALI MUHAMMAD 5,297,509 1,677,786 6,975,295 477,509 1,677,786 2,155,295 80 Ghulam Ali Asghar House No.210, Street 7 Madni Larex Colony, 35201-1375819-5 IQBAL HUSSAIN ALVI 1,781,556 743,915 2,525,471 445,356 743,915 1,189,271 Shalima 81 Mehmood Zafar Rao H#114 G 3 Johar Town Lahore 35202-1885050-7 RAO ABDUL SHAKOOR 5,365,983 3,311,642 8,677,625 1,023,197 3,311,642 4,334,839 KHAN 82 M/S Ali Traders Chak Hota The & Distt Pakpattan Sharif 36402-0824396-7 MUHAMMAD NAWAZ 2,792,976 967,995 3,760,971 837,892 967,995 1,805,887 83 Yousaf Traders 52/A Grain Market Mailsi 36602-2760150-3 HAJI MUHAMMAD 2,489,809 954,694 3,444,503 489,809 954,694 1,444,503 YOUSAF 84 Malik Liaqat Niaz Enterprises 825-42-43 Hafiz Jamal Road Mohallah 36302-2367532-9 HAJI KHUSHI MUHAM- 3,429,257 1,280,078 4,709,335 480,096 1,280,078 1,760,174 Dawood Jehania MAD 85 Abdul Ghafoor &Or Muhammad Sarwar House No. A-60, Officers Colony No. 1, Madina 33100-0828851-5 CHAUDHARY KHUSHI 2,840,370 1,185,175 4,025,545 397,652 1,185,175 1,582,827 Town MUHAMMAD 86 Rana Muhammad Sadiq H # 49 ,St # 3 ,Allama Iqbal Town ,Gujranwalla . 34101-9435281-3 ROSHAN DIN 4,988,538 2,054,327 7,042,866 748,278 2,054,327 2,802,606 87 Chaudhry Muhammad Javed Chatta Street Near Roras Road Chowk 34603-4645290-9 CHAUDHARY BARKAT 2,798,829 1,167,003 3,965,832 698,829 1,167,003 1,865,832 Defence Road Sialkot ALI 88 Sheikh Muhammad Shahbaz 325-G.T Road S.A Rahman Stop Daroghawala 35201-5966005-1 MUHAMMAD MUNIR 1,995,669 832,144 2,827,813 385,669 832,144 1,217,813 Lahore 89 Muhammad Shahid Chudhary Ward#6 Kacha Road Farooq Abbad Khana 35201-9194079-3 NAZAR MUHAMMAD 19,936,589 3,987,324 23,923,913 - 3,987,324 3,987,324 Lahore 90 Malik Muhammad Asif Flat No-121 Plot No-Fl-10 Marine Drive Block-2 42301-5148359-3 MALIK MUHAMMAD 2,748,519 1,476,084 4,224,603 961,982 1,476,084 2,438,066 Clifton USMAN 91 Qaiser Abbas Bukhari 39 D Gulberg 2 Lahore 35202-1382478-7 GHULAM ABBAS 5,999,982 3,291,984 9,291,965 105,000 3,291,984 3,396,983 BUKHARI 92 Muhammad Farooq Butt House # 303-A Iqbal Avenue Housing Society, 35202-7233844-3 MUHAMMAD SALEEM 3,590,938 1,499,340 5,090,278 718,188 1,499,340 2,217,528 Johar BUTT 93 Bhatti Agro Traders Bhatti Agro Traders Bangala Moree Jalal Pur 36304-6300497-9 GHULAM HUSSAIN 1,211,935 452,993 1,664,928 211,935 452,993 664,928 Road Shujabad 163 Consolidated Statement of Financial Position Annexure-1
Amount in PKR Sr. Name Address Name of Partners / Father / Husband Name Outstanding Libilities at Beginning of Year Amount Written off / Concession No. Directors NIC / CNIC Principle Interest/ Total Principle Interest/ Total Markup Markup Balance (Gross)
94 Amar Mahmood House No. 896 - B Peoples Colony No. 1 33100-6720469-9 MAHMOOD UL HASSAN 9,534,238 2,068,833 11,603,071 953,423 2,068,833 3,022,256 Faisalabad 95 Syed Habib Ur Rehman 278 - Eden Canal Villas, Lahore. 35202-0317712-9 SYED AZIZ UR REHMAN 3,589,847 1,175,950 4,765,797 179,493 1,175,950 1,355,443 96 Imran Shaheen House No. 14 - A/7 Ilim Din Street Komboh 35202-7025824-3 MALIK SHAHEEN ASIF 1,676,112 690,856 2,366,969 250,112 690,856 940,969 Colony Chowk Ichra Lahore 97 Muhammad Shabbir Nadeem House No. 20 Street No. 3 Chowk Qazzafi Be- 36302-6147199-7 MUHAMMAD DIN 2,809,551 1,171,544 3,981,095 809,551 1,171,544 1,981,095 hind Family Hospital Hussain Bl.Multan. Multan 98 Sheikh Abdul Quddus H. No. 57, Street # 39, Sector F-10/4, Islamabad 61101-2111008-1 SHEIKH ABDUL RAUF 19,787,931 3,815,359 23,603,290 - 3,815,359 3,815,359 99 Ellahi Fertilizer 59-Grain Market Rahim Yar Khan 31303-3296803-3 ABDUL GHAFOOR 1,489,685 555,844 2,045,529 371,685 555,844 927,529 100 Shaukat Ali H 1974 B /1 Indus Road 1 Tariq Abad Lalkurti 37405-3737773-9 Mushtaq Ahmed 2,437,382 699,792 3,137,175 357,382 699,792 1,057,175 Rawalpindi 101 Muhammad Ejaz 173-B Gulberg Faislabad 33100-0611340-7 MOVLI MUHAMMAD 1,796,192 688,675 2,484,867 269,429 688,675 958,104 102 Iftikhar Hussain Famous Photo Stat Circular Road Kachehry 33102-1818485-1 MUHAMMAD ALI 2,478,090 1,037,569 3,515,659 493,090 1,037,569 1,530,659 Bazar Faisalabad 103 Buland Iqbal House # 76,Street# 24 Sector F-10/1 Islamabad 61101-1971018-3 BADAR UD DIN 9,996,839 4,005,594 14,002,433 2,646,839 4,005,594 6,652,433 104 Khawaja Zafar Iqbal House No 431/1 Mohallah Nasirabad St No 15 37405-0252799-7 KHAWAJA FAZAL ALAHI 1,074,757 365,444 1,440,201 174,757 365,444 540,201 105 Asharf Unnisah House # A-14, Bloclk-B North Nazimabad 42000-0464198-2 KHALIF ULLAH 4,195,250 262,810 4,458,060 1,194,750 262,810 1,457,560 106 Muhammad Buland Iqbal Khan Flat # 1 & 2 Plot C-3-C, Khayaban-E- Sehar 42101-5538260-7 WAHID ALI KHAN 4,175,848 1,803,821 5,979,669 1,175,848 1,803,821 2,979,669 Phase Vii D.H.A 107 Mumtaz Jehan Begum House# 63 Street A Dha 26Th Street Dha 42301-1560676-0 GHANI DAD KHAN 29,389,269 6,269,547 35,658,816 - 6,269,547 6,269,547 Phase 5 Karachi 108 Faisal Sajjad B-88, Block 7, Kda Scheme 36 Gulistan-E- 42101-4597055-1 SYED SAJJAD HUSSAIN 4,859,476 2,941,626 7,801,102 2,559,476 2,941,626 5,501,102 Jouhar 109 Nadeem Lerasab House # 149, Street # 6 Askari-10, Rawalpindi 37405-0210597-7 NADEEM LERASAB 4,186,465 871,302 5,057,766 - 871,302 871,302 110 Mohammad Yasin House # 759, Street # 71 I-8/3 37405-0476976-3 NOOR MOHAMMAD 1,269,479 3,196,889 4,466,369 - 3,196,889 3,196,889 111 Muhammad Nisar Abbasi House # 534, Street # 69, I-8/3 Islamabad 61101-1781239-5 HAJI MUHAMMAD GUL 5,195,413 1,963,376 7,158,789 779,413 1,963,376 2,742,789 KHAN 112 Anwar Haleem Khan H#C-51 Block-L Norht Nazim Abad Karachi 42000-8400411-9 ABDUL HALEEM KHAN 14,908,570 6,129,073 21,037,643 3,708,570 6,129,073 9,837,643 113 Muhammad Almas Abbasi House # 47,St # 26 Sector F-10/1 37405-7261074-5 MUHAMMAD ASLAM 14,877,496 5,049,942 19,927,438 - 5,049,942 5,049,942 114 Ghulam Nabi 8-Mohkam Park Hanjerwal Multan Road Lahore 35202-7642359-7 AMEER ALI 2,187,334 821,201 3,008,535 328,100 821,201 1,149,301 115 Abdul Rehman Shop No -56/N Commercial Center Gulistan 33100-4425974-9 GHULAM SARWAR 2,999,345 1,251,458 4,250,804 949,345 1,251,458 2,200,804 Colony No -2 Faisalabad 116 Muhammad Hanif H No.15/177 Mohallah Chrigah Pura Church 34603-7046521-9 MUHAMMAD SHARIF 5,636,206 2,344,177 7,980,383 1,636,206 2,344,177 3,980,383 Road Sialkot 117 Rafaqat Ali H No.12 50-A Lawrence Road Lahore 35202-2473294-9 KARAMAT ALI 6,678,625 2,228,641 8,907,266 3,339,310 2,228,641 5,567,951 118 Muhammad Javaid House# 4/19 M Block Gulberg Iii Lahore Lahore 35202-7216284-9 ABDUL MAJEED 1,234,218 491,548 1,725,766 234,502 491,548 726,050 119 Mubashar Tanveer Gali # 3 Mohallah Ahmed Pura Gujranwala 34101-8177708-1 ZAHOOR UL DIN 1,807,309 605,681 2,412,990 271,096 605,681 876,777 120 Malik Muhammad Anjum House # 24-C, Sector # 4-B, Khayaban-E-Sir 37405-2694082-3 JAMAL MALIK 1,875,532 785,416 2,660,948 625,532 785,416 1,410,948 Syed, 121 Muhammad Tasnim House No.133-S Block Model Town Extension 35202-2203189-9 HAJI GHULAM NABI 3,191,934 1,354,521 4,546,455 957,581 1,354,521 2,312,102 Lahore 122 Ghulam Mohi Ud Din Qadri 159-G, Dha, Lahore 35201-1303137-5 GHULAM HUSSAIN 9,996,263 3,650,668 13,646,930 1,999,253 3,650,668 5,649,920 QADRI 123 Abdul Majeed Weaving Factory Behind Shama Cinema, Shama Street, Shama 34101-2670005-9 ABDUL MAJEED 11,027,051 4,290,196 15,317,247 3,308,051 4,290,196 7,598,247 Colony, Shaheen Abad, G.T Road, Gujranwala Financial statements and notes 124 Razi Ud Din H # 156-C, Jamil Abad Cantt Multan 36302-0405224-3 NASIR UD DIN SHAMS 8,587,787 3,083,377 11,671,164 1,717,787 3,083,377 4,801,164 125 Tariq & Brothers Main Road, Ubaro Dist Ghotki Ghotki 45105-0156214-7 UMERUDDIN ARAIN 1,098,983 378,398 1,477,381 328,983 378,398 707,381 126 Al Haseeb Fabrics H # 479/1 A, Street # 4 Ansar Colony Block 36302-0365181-5 INAYAT MUHAMMAD 2,096,274 910,836 3,007,110 461,274 910,836 1,372,110 C Multan ANSARI 127 Javed Masood H No-06 St 12 Allama Iqbal Road Garhi Shahu 35202-2272530-1 SHEIKH MUNIR HUSSAIN 340,191 10,032 350,224 416,254 136,588 552,842 Muhammad Nagar 128 Mohammad Hanif Flat# A-7/31 3Rd Floor Rabia City Block 18 42201-8108498-5 ABDUL SATTAR 495,545 129,228 624,773 495,545 165,838 661,384 129 Muhammad Azam Engineering Manager M\S Eco Pack Ltd. 35202-2709453-9 Abdul Hameed 1,127,275 71,326 1,198,600 1,086,686 195,879 1,282,564 Plot,112 Phase 5 Industrial, State Hattar District Hari Pur. Haripur 130 Mohd Iqbal Faruqie Techno Worldwide Impex 1St Flr Naqi Market 35202-2954108-1 Muhammad Usman 707,817 6,894 714,711 775,896 92,182 868,078 Sh-E-Quaid-E-Azam Lahore Lahore Faruqie 131 Mr Afzaal Ahmad House# 857-St-71 Bazaz Mohalla Sadar Bazar 35201-8355945-7 HAJI FAZAL AHMAD 477,407 39,305 516,712 286,402 250,802 537,204 Lahore Cantt Near Taj Mehal Hotal 132 Mr Syed Shahab Uddin Tp 11 6Th Flr Blk C Mall Square Appt Dha Phase 54400-0440427-3 SYED ABDUL HAI 499,447 170,825 670,272 499,447 170,825 670,272 5 Near Zamzama Park 133 M Zahoor Motiwala House No-403-B Adamjee Nagar Off Ameer 42201-4634614-1 Muhammad Amin 509,851 96,006 605,858 509,851 113,596 623,447 Khusro/Johar Road Opp Muhammadi Bakery Motiwala Karachi Karachi 134 Zia Ur Rehman S-154/1,Phase Ii, Defence Housing Authority, 35201-1326403-1 Abdul Rehman Sheikh 484,729 30,592 515,321 484,729 129,733 614,462 Lahore Cantt 135 Asmat Ullah Tunio Appt.# 7Iqbal Heaven184/Fp.E.C.H.S 42201-9889075-3 ABDULLAH 463,832 57,262 521,094 465,862 85,318 551,180 Block-2Karachi 603 Park Avenuebldg P E C H S Block 6Shahrah E Faisal 136 Waseem Uraizee 13 Block 3Jinnah Coop Housing Societysha- 42201-1222046-1 SAEED UDDIN URAIZEE 489,813 78,880 568,693 468,874 89,296 558,170 heed E Mil 13/3 Jinnah Coop Housing Society shaheed E Millat Road 137 Sohail Ahmed 10-B South Park Streetsunset Boulevardphase 42301-4963992-5 SALAHUDDIN AHMED 474,384 12,140 486,524 501,054 81,406 582,461 Ii D H Silever House Babri Bldgi I Chundrigar Road karachi 138 Laiq Ahmed 32/1 27Th Streetoff Khy Mujahid Phase V 42101-7970968-1 MOHAMMAD SHAFI 609,581 37,283 646,864 611,611 112,055 723,666 Extd H Aka D 18S I T E Industrialestate Supper Highway karachi 139 Nadeem Safar 199-1-Dblock 2 P E C H Skarachi 111 L Block 2P 42201-3656606-1 SAFAR ALI 784,610 109,735 894,345 772,659 128,464 901,123 E C H Skarachi 164 Standard Chartered Annual Report 2013 Consolidated Statement of Financial Position Annexure-1
Amount in PKR Sr. Name Address Name of Partners / Father / Husband Name Outstanding Libilities at Beginning of Year Amount Written off / Concession No. Directors NIC / CNIC Principle Interest/ Total Principle Interest/ Total Markup Markup Balance (Gross)
140 Junaid Ahmed 266 Wl.C.C.H.Slahore Canttlahore 124/4Indus- 35201-6587367-9 IJAZ AHMAD 645,778 16,630 662,408 661,016 55,164 716,180 trial Areakotlakhpat Lahore 141 Muhammad Iqbal 24 Malik Taj Deenstreet Islampuralahore 1St 35202-2954108-1 Muhammad Usman 747,742 17,943 765,685 982,844 161,500 1,144,344 Floor Naqi Market75 Shahrah E Quaid E Azam Faruqie Lahore 142 Muhammad Ali Qureshi 6-U Block No 2P.E.C.H.Ssr Model Schoolkara- 42201-3658673-9 IFTIKHAR ALI QURESHI 513,353 41,841 555,194 522,021 87,345 609,367 chi Stadium Road karachi 143 Muhammad Ali Kapadia E 2 4 Maymar Lake View Khekshan Cilfton 42000-6907172-1 Peer bahi de Kapadia 972,098 54,104 1,026,202 957,294 132,293 1,089,588 Karachi 144 Syed Irfan Bokhary 76 Block H Model Town Lahore 35202-1723600-7 SYED WAJEEH DIN 461,113 11,857 472,970 476,887 79,106 555,992 BUKHARI 145 Salahuddin Ahmed 10/B South Park Streetmain Sunset Boule- 42301-8009574-5 ABDUL RASHEED 999,303 24,922 1,024,225 999,225 163,410 1,162,635 vardphase V Silver Reed Housenear Police H/ Oi.I.Chunrigar Road 146 Shahid Munir 154-1 B2Town Shiplahore Shop 2Khan Market 42301-1051907-9 KHAWA MUNEER 719,269 88,985 808,255 665,329 128,239 793,568 44Nishtar Road lahore AKHTAR 147 Raja Pervez Akhtar H No 0-854Feroz Puraopposite Naz Cine- 37405-6908412-3 SHAUKAT ALI RAJA 491,851 12,395 504,247 491,851 80,783 572,634 mamurree Road Office No M 1890General Hospitalchaklala Road Rawalpindi 148 Shahabzada Saeed Ahmed G-21/8Almani Town Housesblock-8 Cliftonka- 42301-1070938-9 SAHABZADA M SHARIF 543,984 12,206 556,190 579,971 92,362 672,333 rachi 179/2A.M.21 Saddar karachi 149 Syed Fazakkir Hussain House No A 45/C5Th East Streetdefence 42301-8520895-3 SYED TAFZAL HUSSAIN 430,548 47,466 478,014 432,578 70,528 503,106 Housing Soci 1St Floor , Kamran House34-A/2 Lalazar Driveopposi 150 Muhammad Kamran Shahzad 25/E Block 2P E C H Skarachi D-14 Block J 42101-8747661-1 MOHAMMAD TAFI 435,970 10,800 446,769 439,299 71,760 511,059 North Nazimabad karachi 151 Imtiaz Hussain Shah 58- Sikander Blockallama Iqbal Townlahore 35202-2198207-5 MANZOOR HUSSAIN 324,530 - 324,530 500,673 72,293 572,966 19-A Al Miraj Arcadechowk Choubarji Lahore 152 Nasir Mehmood Rathore H # 26-A/Hmadni Mohallahjhelum Qureshi 37301-2337204-5 MOHAMMAD IBRAHIM 484,824 13,345 498,169 461,004 75,897 536,901 Plazarailway Roadg.T.S Chowk Jhelum RATHORE 153 Basharat Ahmed Tanveer H # 115St # 1Askari 9Airport Road,Chaklalar- 37405-2408065-5 Deen Muhammad 499,830 13,490 513,319 492,507 68,632 561,139 awalpin Head Office 68Tipu Road Rawalpindi 154 Sarmad Ejaz Gundra H No.6/7 Gundra Housepeer Sehra Roadsialkot 34603-4178846-3 HAJI IJAZ HUSSAIN 490,520 - 490,520 500,099 54,996 555,095 Hico Buildingkashmir Road Sialkot 155 Sheikh Irfan Munir H No.272-D Peoples Colony No.1Faisalabad 33100-9045706-1 LATE SHEIKH MOHAM- 492,420 - 492,420 490,592 81,755 572,348 P-10/14 Sootar Mandimontgomery Bazar MAD MUNIR Faisalabad 156 Imran Jaffery H No.46-B Block-A-Ijohar Townlahore 11-L 35200-4768906-7 NAWAZISH ALI JAFRI 489,217 76,326 565,543 491,247 91,750 582,996 Johar Town Lahore 157 Shahzad Ahmed H No.21/361 Mohalla Raja Bazarsialkot Com- 34603-6581332-9 CHAUDHARY MUHAM- 498,256 15,205 513,460 492,455 69,060 561,515 missioner Road Sialkot MAD YOUNAS 158 Jam Saif Ali Khan H No 351, 19Th Street,Khayaban E Muja- 44201-4458771-3 Nawab Jam Anwer Ali 478,203 24,858 503,061 438,590 73,858 512,447 heedphase V, 3-A,Double Carriage Way Main Korangi Road 159 Zeeshan Qazi H No 145/N Block No 2P.E.C.H.S Sncc-9, Bl No 42201-4711152-3 HASSAM QAZI DIN 450,845 86,905 537,750 436,681 85,167 521,847 7/8Johar Road Machs 160 Muhammad Saleem Anjam 115 A, Govt Employs Colonymda Chowk 2, 36302-7137001-3 MUHAMMAD SIDDIQUE 486,425 66,803 553,228 486,425 80,436 566,861 Shadmanhigh Court 161 Syed Najam Ul Hassan Rizwi Ffc Lahore Trade Centre 11 Shahrah Aiwan-E-Ti- 35202-5140698-3 ANWAR HUSSAIN RIZWI 491,222 13,458 504,680 501,978 81,774 583,752 jarat Lahore China Chowk Lahore 162 Rana Muhammad Mohsin Sarwar Saffan Traders Room No 7 1St Floor 105 Mangal 36302-5156339-7 RANA MUHAMAMDA 499,984 84,518 584,503 499,984 84,518 584,503 Mansion Asia Hotel Lakshmi Chowk Lahore SARWAR 163 Afzal Saeed Khan Ist Floor B-64/E Prechs Blk - 13-B Gulshan E 42101-4066188-9 RAHIM SHAIR KHAN 976,807 177,430 1,154,237 976,807 177,430 1,154,237 Iqbal Near Al Mustafa Hospt Karachi 164 Muhammad Abdullah Broadway Travels 28/A Ground Floor Empire 35201-1363667-7 MUHAMMAD ANWAR 478,190 - 478,190 472,017 82,051 554,068 Center 1-Abbot Road Near Lakshami Chowk Lahore 165 Ijaz Ahmad Awan 122-D - 7 Model Town Lahore 35202-8346686-1 ALI AHMED AWAN 525,891 36,595 562,486 525,891 115,085 640,976 166 Mohammad Adil Khan F-74/A,S.I.T.E., P.O.Box 3647 Karachi 2578651 42401-4229617-9 Muhammad Fazal Khan 472,016 89,938 561,954 472,016 104,060 576,076 167 Muhammad A Kapadia E-2-4 Memar Lake View Appt Kehkashan 42000-6907172-1 Peer bahi de Kapadia 504,515 20,759 525,274 547,048 68,956 616,004 Clifton Blk 5 Karachi Karachi 168 Ahsan Aftab 97/4 Z Block Dha Lahore 35201-1594232-7 SHEIKH AFTAB HAMEED 415,502 15,270 430,772 429,302 75,963 505,265 169 Zaheer Maqbool Mcb Call Centre 1St Flr,Sst Bld Beaumont Rd 35202-3594273-5 MAQBOOL UR REHMAN 421,080 - 421,080 390,720 116,147 506,867 Karachi Karachi 170 Hanif Akbar Marwat 22-B/2 Main National Highway Phase 2 Dha 42301-1049078-3 GHULAM AKBAR 252,209 - 252,209 499,174 141,178 640,352 Karachi 171 Mian Amir Nisar Hamza Agencies C-6 3Rd Fl, Ocean Centre 42301-5455535-1 Nisar Ahmed Punnoo 261,380 - 261,380 722,448 167,990 890,438 Opp Custom, House Karachi, Karachi 172 Rana Mohsin Rasheed Al Rehman Bulding Muree Road Rawalpindi 37405-4777904-7 RANA RASHEED 464,846 52,872 517,718 464,846 79,589 544,435 AHMAD 173 Syed Zeeshan Ahmad House No 633 J Blk Phase 6 Dha Lahore 35202-7565501-7 MATLOOB AHMAD 493,775 52,902 546,677 493,775 66,597 560,372 174 Sarwar Ali Shams H 3/3 Sector 5 Korangi Industrial Area Brooks 31202-7949167-5 MUHAMMAD SHAMS 503,266 13,840 517,106 482,504 77,237 559,742 Chowrangi Karachi UDDIN 175 Rehana Begum Fl B-9 Sehar Appartment Gulshan E Iqbal Mas- 45504-5637294-4 SYED GHULAM 870,563 31,101 901,664 870,563 74,744 945,307 kan Chorangi Bhayni Heights Block 4 HUSSAIN 176 Sheeba Afghani H No 90 St No Main Margala Road F-8/2 F-8 61101-5472844-8 ABDUL LATIF AFGHANI 667,105 56,830 723,935 667,105 114,877 781,981 Markaz Isb 177 Raheel Ahmad-Alias-Mithoo H No 63/2 St No 3 Saroba Garden 17 Km 35102-5648695-7 ABDUL SATTAR 590,800 26,742 617,542 590,800 42,402 633,202 Ferozpur Rd Lahore 178 Shahrukh 72-B Industrial Area Kot Lakh Pat Peco Chowk 35201-0460390-3 SHEIKH MUHAMMAD 592,347 52,729 645,077 592,347 83,637 675,984 Lahore EHSAN 179 Ali Faisal Pta Zonal Office, Wireless Compound , Opp 42101-1771671-5 MUHAMMAD IBRAHIM 859,296 - 859,296 850,860 117,446 968,305 Jpmc Karachi 165 Consolidated Statement of Financial Position Annexure-1
Amount in PKR Sr. Name Address Name of Partners / Father / Husband Name Outstanding Libilities at Beginning of Year Amount Written off / Concession No. Directors NIC / CNIC Principle Interest/ Total Principle Interest/ Total Markup Markup Balance (Gross)
180 Irfan Ali A - 7 The Plaza 16 - A Block No 6 Pechs Main 38405-2269087-1 REHMAT ALI 599,579 11,224 610,803 599,579 81,611 681,190 Shah-E-Faisal Pso Pump Karachi 181 Muhammad Zia Ur Rehman A-102 Block-13-A Railway Employees 41304-2316040-9 ALAUDIN JAVED 480,124 10,828 490,952 452,919 58,101 511,020 Cooperative Housing Society Gulshan E Iqbal Educational World School 182 Syed Zakir Raza Jafri Ppl Pidc House 42501-1558499-7 SYED QAMAR RAZA 1,560,556 19,052 1,579,608 1,441,545 82,166 1,523,710 JAFRI 183 Hina Hamid House No 1994,Muhalla Sector 11-E Muslim 42101-1718433-6 HAMID HUSSAIN 595,455 28,658 624,113 595,455 62,185 657,640 Town, New Karachi,Karachi 184 Ansa Shahid Building 5 St 22 Imam Ghazali Road 35202-3932398-4 SHAKEEL AHMED 689,879 - 689,879 673,696 101,959 775,655 Makhanpura 185 Atta Abbas H No R-547/9 Dastagir Society Askari Ground 42101-1622239-5 SYED KALEEM HAIDER 496,212 3,344 499,556 475,856 62,046 537,902 F.B Area 186 Ghulam Mustafa H No E-907 St 1 Waqas Market Nadrabad Bedi- 35302-1915687-7 NOOR MUHAMMAD 440,989 - 440,989 440,194 66,182 506,376 an Road Lahore Cantt Jinnah Public School 187 Khalid Hussain Bhutto H No B - 18 Salhal Gdyh Pcsir Lab Pcsir Lab 43204-8508600-1 SIKANDAR ALI 496,212 10,663 506,875 481,926 55,295 537,221 Suparco Road Gulshan Town 188 Abdul Ghaffar House No 123 Mohallah Roshan Park Chungi 35202-2647388-3 ABDUL SATTAR 899,085 118,436 1,017,520 899,085 118,436 1,017,520 Multan Road Lahore 189 Syed Mustafa Hussain Rizvi Flat No A1/3 2Nd Floor Gallant Court Flat No 5 45203-8169737-7 SYED ALI AHMED SHAH 550,000 67,443 617,443 550,000 67,443 617,443 Main University Ibn-E-Seena Hospital Complex RIZVI Road Block 11 Gulshan-E-Iqbal 190 Mian Hussain Barkat 176/185 H Block Model Town Lahore Lahore 35202-2667810-9 Main Barkar Ali 600,507 9,590 610,097 622,731 159 622,890 191 Basharat A. Tanveer Basharat Ahmad Tanveer ? Sd-115, Askari 9 37405-2408065-5 Deen Muhammad 497,008 - 497,008 508,018 170,372 678,390 Chaklala Rawalpindi Rawalpindi 192 Khawaja Ali Hamza Kai International Pvt Ltd 35-C Empress Road 35202-4053949-5 Khawaja Muhamma- 473,420 15,520 488,940 471,844 156,225 628,069 Lahore Lahore dArshad 193 Jam Saif Ali Jam House 35 19Th Street Khayaban E Mujahid 44201-4458771-3 Nawab Jam Anwer Ali 488,124 37,024 525,147 488,124 73,152 561,275 Phase V, D H A Karachi Karachi 194 M Shahzad Siddiqui H No 74 St No 2 New Haseeb Shaheed Colony 33100-1027739-1 M FAROOQ SADIQUEI 497,728 - 497,728 498,491 154,453 652,944 Near Al Aziz Masque Faisalabad Faisalabad 195 Syed Rafi Hasan Abidi G-15 6Th Street Phase Vi D.H.A Karachi. 502-69-245692 SYD HASAN WAZIR ABIDI 3,508,412 626,497 4,134,908 499,909 620,559 1,120,468 196 Shams-Ul-Arfeen Venus Distributors (Pvt)Ltd 9/1, K-28, Hawksbay 42101-0709680-1 Syed Safdar Ali 1,403,960 544,086 1,948,046 333,788 431,169 764,957 Road Paf Maripur Karachi 197 Zahid Hameed Mustafa Arcade-Plot-No 119-A P-1 5Th Floor 517-55-080202 KS ABDUL HAMEED 1,038,578 578,978 1,617,556 253,578 526,723 780,301 Smchs Society Karachi 198 Abid Tanveer H.No. B-1, 735, Street No, 2, Muslim Town, 37405-0563650-5 Maktoob Ahmed 908,852 447,727 1,356,579 68,852 447,727 516,579 Rawalpindi. 199 Muhammad Sajid Khan Sumbal 9-N, Model Town Extention Lahore. 35202-1080530-9 M IQBAL KHAN SUNBUL 1,815,392 668,937 2,484,329 215,392 522,469 737,861 200 Syed Tahir Ali H.No. 750-Z, D.H.A., Lahore 35201-1587760-3 S AZHAR ALI 11,376,442 4,401,175 15,777,616 3,776,442 3,784,831 7,561,273 201 Sheikh Mohammad Irfan 154-A Miraj Street Habib Ullah Road Lahore. 35202-6507212-1 M SHARIF 2,652,288 1,340,714 3,993,002 789,603 1,210,482 2,000,085 202 Rizwana Amin House No 11-A, 2Nd Sunset Street Phase-2, 42301-7595696-2 MAKDOOM M AMIN 23,374,549 12,092,689 35,467,238 - 10,690,174 10,690,174 Dha, Karachi Dha Karachi FAHIM 203 Rizwana Amin House 11-A 2Nd Sunset Street Phase-2 D.H.A. 42301-7595696-2 MAKHDOOM AMIN 29,262,914 24,687,240 53,950,153 - 22,590,959 22,590,959 Karachi. Dha Karachi FAHIM 204 Muhammad Nadeem H P-1247 Block-40 Bismillahpur Samanabad 33100-3152825-3 Muhammad Shariff 772,990 449,315 1,222,305 147,990 406,046 554,036 Faisalabad Samanabad Faisalabad 205 Maqbool Hussain H.No.3 Luchmen Street Lake Road Lahore 35401-7043968-9 MOHAMMAD ALI 5,178,968 4,054,787 9,233,756 776,968 3,742,269 4,519,237 Financial statements and notes Samanabad 206 Naeem Ahmed Qureshi H.No B 301 Block L North Nazimabad Karachi 42101-6414518-9 Abdul Majeed Qureshi 1,810,554 555,931 2,366,485 410,554 555,931 966,485 Near Medi Care Hospital 207 Wajid Ali Shah H.No 86 Allama Iqbal Road Lahore Street 35202-8185788-3 MUZAFFAR ALI SHAH 963,368 469,255 1,432,623 192,368 419,462 611,830 Chah Baba Shaid Shah Gari Shaw Lahore. Ghari Shahu 208 Sh.Maqsood Ahmed 50/2 Main Kh.E Muslim Phase Vi Near Misri 42000-0429968-3 SH GULZAR AHMED 5,648,085 916,407 6,564,492 1,018,085 665,965 1,684,050 Shah Mazar D.H.A Karachi. Dha Karachi 209 M.Shahbaz 38/12 Ishra Road Usman Bazar Ishra Lahore 35202-2730416-3 SIRAJUDDIN 5,639,000 4,163,663 9,802,663 1,639,000 3,814,475 5,453,475 210 Raja Muhammad Farraukh Nazir H.No 409 Block Y D.H.A Lahore 35201-8925994-7 RAJA MUHAMMAD 1,420,324 567,970 1,988,294 355,081 785,473 1,140,554 NAZIR 211 Nasir Mehmood Flat D-305, 3Rd Floor Beach Blessing Clifton 42301-2051756-9 GHULAM RASOOL 9,251,414 3,337,964 12,589,378 2,296,414 3,222,303 5,518,716 Block-2 Karachi 212 Muhammad Arshad H.N E/149-B, Street 6 Yasrab Colony, Lahore. 35201-1346208-5 Not found In Nadra sys 1,545,232 1,051,404 2,596,637 164,000 968,085 1,132,085 Walton Road 213 Mohammad Shahid Qureshi House A/35, Block-13/D-2, Gulshan-E-Iqbal, 42201-2473350-1 M MAQSOOD QURESHI 17,238,478 6,536,753 23,775,231 4,738,478 5,569,645 10,308,123 Karachi 214 Aun Gain 16-Habib Manzil , Nawab Bahadur Yar Jang 42301-7334695-7 TAHIR ALI GAIN 1,610,400 887,311 2,497,712 320,400 756,830 1,077,231 Road , Soilder Bazar # 2 , Dha Karachi 215 Muhammad Yaqoob Mirza 200-A Gulzar-E-Quaid Air Port Link Road 37103-7247965-3 KARAM DAD MIRZA 9,676,816 4,738,387 14,415,203 1,676,816 4,220,354 5,897,170 Chaklala Airport Employees Cooperative Housing Scheme 216 Mansoor Wahid House # 91/2 Saba Avenue Phase 5,Ext Dha 42301-6437339-9 ABDUL WAHID 10,842,539 5,343,804 16,186,343 2,710,539 4,686,940 7,397,479 Dha Karachi 217 Abdul Majeed Flat No.G-202, 2Nd Floor Haroon Royal City, 42501-4727739-9 ABDUL HAKEEM 2,217,933 1,754,961 3,972,894 443,933 1,591,819 2,035,752 Phz-1-B/17 Gulistan-E-Johar Gulistan -E- Johar 218 Amjad Pervaiz House No-111, Sector # B-3, Saeedabad, 42401-4315321-3 MUHAMMAD LATIF 2,323,148 1,805,904 4,129,053 463,148 1,682,142 2,145,291 Nazimabad 219 Abbul Hassan Plot# Jm 135 Rose Garden 2Nd Floor Flat#205 42201-7617626-5 SULTAN AL 5,242,808 3,303,159 8,545,967 996,808 2,929,075 3,925,883 Burgari Road Soldier Bazar No 2 Karachi Jamshed Quarters 220 Syed Ather Raza House # 1402, Block-8, Federal B Area, 42101-6258462-9 SYED MOHSIN RAZA 1,142,483 401,972 1,544,455 227,953 334,118 562,070 Gulshan -E- Iqbal 166 Standard Chartered Annual Report 2013 Consolidated Statement of Financial Position Annexure-1
Amount in PKR Sr. Name Address Name of Partners / Father / Husband Name Outstanding Libilities at Beginning of Year Amount Written off / Concession No. Directors NIC / CNIC Principle Interest/ Total Principle Interest/ Total Markup Markup Balance (Gross)
221 Adnan Ghayyur Khan Flat No F1, Park View Appartment Block 10 42401-9570919-5 ABDUL GHAYYUR KHAN 1,292,821 642,192 1,935,013 322,821 584,115 906,936 Gulshan-E-Iqbal Safari Park 222 Nasir Hussain House D-18 K.D.A Overseas Appartment 42201-0543612-7 GAZANFAR ALI 1,430,872 979,813 2,410,685 230,872 915,424 1,146,296 Gulshan E Iqbal Gulshan -E- Iqbal 223 Umer Hayat H # 113/A, Block # A, Unit # 4, Latifabad, 41304-8473208-9 MUBARAK HUSSAIN 14,941,502 5,938,437 20,879,939 2,241,502 5,266,069 7,507,571 Latifabad 224 Muhammad Kashif Memon House # B-260, Adamjee Nagar, Off Tipu Sultan 41302-9544346-7 ABDUL GHANI MEMON 6,385,086 756,752 7,141,838 - 800,827 800,827 Road K.M.C.H.S.L 225 Muhammad Yaqoob B-1002, 10Th Floor Mehran Square Frere Town 42301-1022570-1 ABDUL SATTAR 4,562,300 2,068,298 6,630,598 922,300 2,037,046 2,959,346 Clifton Frere Town 226 Zafar Husain Nat Industry, Near Pso Petrol Pump, Kalsa Gt 34201-7531375-1 MOHAMMED KHAN 4,545,261 1,452,633 5,997,894 909,052 1,964,238 2,873,291 Road, Gujrat Gulshan Colony 227 Omar Saboor H # 20, Askari Villas Army Housing Scheme-2, 42301-5345790-9 ABDUL SABOOR 6,555,260 2,289,392 8,844,652 1,305,260 1,924,886 3,230,146 Phase-V, Dha, Gulistan -E- Johar CHOUDHRY 228 Meraj Ul Islam H # 426, St # 21, Gaze Nigar Gulshan -E- Iqbal 42301-9885122-3 SIRAJ UL ISLAM 11,847,373 11,055,971 22,903,344 2,847,373 10,381,454 13,228,827 229 Atif Zubair Kda Scheme # 1 House# St-1/B Kda Scheme 1 42201-2743166-5 ZUBAIR ASLAM 19,561,980 18,685,106 38,247,086 4,261,980 17,313,050 21,575,030 230 Muhammad Shamoon House# E-29/F-4 Allama Iqbal Street# 2 Sha- 35201-0359678-9 MUHAMMAD YOUSAF 1,959,039 778,936 2,737,975 391,807 685,882 1,077,689 heen Colony Revenue Record Lahore 231 Mumtaz Ali Flat# B-7 Gulshan Plaza Block# 13-B Gulshan- 42201-0776542-5 GHULAM ALI 964,949 575,756 1,540,705 192,949 517,762 710,711 E-Iqbal Scheme 33 232 Khalid Mehmood House # B-28 Gulshan -E-Iqbal Block 04 Near 42000-8180846-5 M. ISHAQ 7,212,525 2,807,378 10,019,902 1,081,875 2,707,217 3,789,092 Discovery Store Karachi Gulshan -E- Iqbal 233 Saima Parveen Appt No F/1 12Th East Street Phase 1 Near Over 42501-9432770-4 MUHAMMAD BASHIR 1,939,919 801,905 2,741,824 384,919 695,207 1,080,126 Head Tank Dali Staff Appt Defence Karachi 234 Muhammad Ahsan Ashraf House # 87, Acn, Sector 1, I-9/1 37405-0218393-1 CH MUHAMMAD 6,418,946 3,338,134 9,757,080 2,018,946 2,680,264 4,699,210 ASHRAF HUSSAIN 235 Arshad Kamal Flat # 210, Kamran Plaza, Block -3, Gulshan-E- 42201-3568979-5 AFSAR HUSSAIN 1,610,343 487,293 2,097,635 261,223 395,067 656,290 Iqbal. Gulshan -E- Iqbal SIDDIQUI 236 Muhammad Anees Abrahani Flat # K-101,Haroon Royal City Block 17 Gulistan 42201-4493750-5 MUHAMMAD YOUNUS 7,549,698 3,117,230 10,666,928 1,749,698 2,613,161 4,362,859 E Jouhar Gulistan -E- Johar ABRAHANI 237 Jan Muhammad Jakhrani A-304 Block 7 Sulistan-E-Jouhar Near Saphora 43104-8234370-9 BINGO KHAN JAKHRANI 4,498,673 1,986,856 6,485,529 841,978 1,722,303 2,564,280 Goth Gulistan -E- Johar 238 Express Services Off.No.I, 1St Floor, Ghous Plaza, Murree Road, 33302-3282351-3 MR. CH. FAQIR MU- 2,842,151 2,156,535 4,998,687 426,151 1,995,901 2,422,052 Rawalpindi HAMMAD 239 Sadiq Hussain Jafri Flat No 202 Plot No 38/C 10Th Badar Commer- 42301-6612200-1 ASHIQ HUSSAIN 616,710 14,956 631,666 616,710 71,179 687,888 cial Street Dha V Ext Karachi HUSSAINI 240 Mubashir Ahmed House No. 24, Lane 1, Cavalry Ground, Lahore Mubashir Ahmed, M Badaruddin 87,652,500 6,774,150 94,426,650 56,252,500 6,774,150 63,026,650 Proprietor 35201-1797775-7 241 Intergrain Commodities (Pvt.) Ltd 308, Al-Falah Building, The Mall, Lahore Mian Moeen-ud-Din, 1,800,000 - 1,800,000 1,800,000 - 1,800,000 Managing Director.
Nadeem Moin Mian, Director. 242 Atlas Cables (Pvt.) Limited 9Th Floor, Textile Plaza, Mumtaz Hasan Road, Adeel Javaid, Sh. Arshad Javaid 128,024,052 59,237,672 187,261,724 102,424,052 59,357,399 161,781,451 Karachi Managing Director, 42201-3385330-5
Danish Javaid, Sh. Arshad Javaid Director 42201-0255323-7
Arshad Javaid, Sh. Nazir Hussain Director 42201-0255322-9 243 Atlas Rubber & Plastic Ind. (Pvt.) Ltd 9Th Floor, Textile Plaza, Mumtaz Hasan Road, Adeel Javaid, Man- Sh. Arshad Javaid 97,951,524 38,278,600 136,230,125 78,351,524 38,278,600 116,630,125 Karachi aging Director 42201-3385330-5
Danish Javaid, Sh. Arshad Javaid Director 42201-0255323-7
Arshad Javaid, Sh. Nazir Hussain Director 42201-0255322-9 244 A & A Services. 402, Al-Farid Centre, M. T. Khan Road, Karachi Adnan A. Sarfaraz, Aizaz Sarfaraz 7,724,248 2,022,060 9,746,308 7,724,248 2,022,060 9,746,308 42201-0180958-5 245 Refrigerator Manufacturing Co Pakistan Ltd D-98, S.I.T.E., Karachi Aftab Ahmed Khan, 2,145,832 - 2,145,832 2,145,832 - 2,145,832 Managing Director
246 Al-Malik Carpets 29-A, Off Davis Road, Lahore Mr. Viqar ahmed S/o. Bilal Ahmed Malik 81,832,818 109,992,518 191,825,336 50,159,215 109,992,518 160,151,733 Malik. 9-14000-299002-1 W/o. Viqar Ahmed
Mrs. Saira Viqar Malik S/o. Nazir-Ul-Haq Sheikh 271-86-240318 W/o. Haroon Nazir Mr. Haroon Nazir
Mrs Zohra Nazir
247 Creative Textile 29-A, Off Davis Road, Lahore Mr. Viqar ahmed S/o. Bilal Ahmed Malik 5,463,209 7,679,819 13,143,028 - 7,679,819 7,679,819 Malik. 9-14000-299002-1 W/o. Viqar Ahmed
Mrs. Saira Viqar Malik S/o. Nazir-Ul-Haq Sheikh 271-86-240318 W/o. Haroon Nazir Mr. Haroon Nazir
Mrs Zohra Nazir 167 Consolidated Statement of Financial Position Annexure-1
Amount in PKR Sr. Name Address Name of Partners / Father / Husband Name Outstanding Libilities at Beginning of Year Amount Written off / Concession No. Directors NIC / CNIC Principle Interest/ Total Principle Interest/ Total Markup Markup Balance (Gross)
248 Ammar Textile 18 Km, Multan Road, Lahore Kh. Bilal Ahmad S/o. Kh. Ghulam 96,193,837 119,412,765 215,606,601 63,669,637 119,412,765 183,082,402 352022-969902-7 Mohiuddin
Mrs. Samina Bilal Ahmad W/o. Kh. Bilal Ahmad 35200-1448248-4 249 Bilal Textile Old Address:P-834, Bilal Plaza, Liaqat Road, Mian Muhammad Mian Muhammad Omer 11,693,637 6,588,398 18,282,036 5,693,637 6,588,398 12,282,036 Faisalabad New Address: Salem Omer 102, Jail Road, Faisalabad 33100-0902344-5 250 Khan Laboratory & Diagnostic Centre,Dr. A 57, Malir City, Shahrah-E-Faisal, Karachi. SHAKEEL AHMED MUHAMMAD AHMED 1,751,843 238,957 1,990,800 437,213 238,957 676,170 KHAN KHAN 42201-9642358-1
251 Classic Denim Mill Plot # 14, Sector 20, Korangi Industrial Arae, VESHDEV RAKHANI NENUMAL 12,251,567 3,409,057 15,660,624 2,750,583 3,578,157 6,328,740 Karachi. 42301-7832646-3
SHEHZAD HAROON HAROON 42301-1065237-5
MUHAMMAD MUHAMMAD SALEEM AHMED EBRAHIM AHMED 42000-4730399-9 ABDUL SATTAR MUHAMMAD YASEEN 42301-3651991-3 252 Ali Asghar Textile Mills Ltd. 306 - 308, Uni Tower, I.I. Chundrigar Road, NADEEM ELLAHI HUMAYUN ELLAHI 9,499,299 2,773,267 12,272,566 3,700,473 3,325,717 7,026,190 Karachi. SHAIKH SHAIKH 42301-0993217-3
GULNAR HUMAYUN W/O HUMAYUN ELLAHI 42301-0899905-0 SHAIKH
NAVEED ELLAHI SHAIKH HUMAYUN ELLAHI 42000-0532641-3 SHAIKH
MARIUM HUMAYUN 42000-0485329-0 D/O HUMAYUN ELLAHI SHAIKH SULTAN MAHMOOD 42201-2232626-7 M.YAQOOB SALMAN MASOOD 42301-0851960-1 MASOOD-UL-HASSAN ABDUL AZIZ 42301-0868432-1 HABIB 1,513,129,347 762,498,489 2,275,627,836 610,946,878 754,391,157 1,365,338,035 Financial statements and notes 168 Standard Chartered Annual Report 2013 PATTERN OF SHAREHOLDERS As on 31 December 2013
NO. OF SHAREHOLDINGS SLAB TOTAL SHAREHOLDERS FROM FROM TO TO SHARES HELD
1199 1 to 100 48,349 2004 101 to 500 630,716 1193 501 to 1000 948,537 2568 1001 to 5000 6,557,139 868 5001 to 10000 5,405,639 126 10001 to 15000 1,550,944 69 15001 to 20000 1,201,777 37 20001 to 25000 853,210 25 25001 to 30000 715,784 20 30001 to 35000 651,351 12 35001 to 40000 450,779 6 40001 to 45000 255,194 8 45001 to 50000 388,953 6 50001 to 55000 310,111 9 55001 to 60000 523,433 3 60001 to 65000 183,119 7 65001 to 70000 477,219 1 70001 to 75000 75,000 1 75001 to 80000 75,817 9 95001 to 100000 898,900 2 100001 to 105000 203,163 1 105001 to 110000 107,900 2 120001 to 125000 242,144 4 125001 to 130000 511,000 1 130001 to 135000 134,400 1 140001 to 145000 142,700 1 145001 to 150000 145,258 1 170001 to 175000 175,000 1 175001 to 180000 176,500 1 180001 to 185000 185,000 1 185001 to 190000 188,000 1 195001 to 200000 200,000 1 210001 to 215000 212,000 Financial statements and notes 1 235001 to 240000 238,900 3 245001 to 250000 747,232 1 255001 to 260000 258,132 1 265001 to 270000 265,739 1 285001 to 290000 287,100 1 295001 to 300000 300,000 1 310001 to 315000 313,795 1 330001 to 335000 331,000 1 380001 to 385000 381,100 1 405001 to 410000 406,041 2 455001 to 460000 917,614 1 495001 to 500000 500,000 1 520001 to 525000 525,000 1 525001 to 530000 530,000 1 710001 to 715000 712,500 1 850001 to 855000 854,000 1 910001 to 915000 914,570 1 1075001 to 1080000 1,078,600 1 2165001 to 2170000 2,166,500 1 2690001 to 2695000 2,693,000 1 3832335001 to 3832340000 3,832,339,162 8213 3,871,585,021 169 CATEGORY WISE LIST OF SHAREHOLDERS As at December 31, 2013
Category of Shareholders Shareholders Sharesheld Percentage
Directors and their spouse(s) and minor children Christos Papadopoulos 1 1 0.00 Mohsin Ali Nathani 2 530,001 0.01 Raheel Ahmed 1 1 0.00 Andrew Philip Bainbridge 1 1 0.00 Najmul Islam Chaudhri 1 1 0.00 Sultan Mohammad Parvez Ghias 1 1 0.00 Spenta Kandawalla 1 1 0.00
Associated Companies, undertakings and related parties Standard Chartered Bank (UK) 1 3,832,339,162 98.99
Executives - - -
Public Sector Companies and Corporations National Bank of Pakistan 1 16,742 0.00 National Development Finance Corporations. 1 4,177 0.00 National Bank of Pakistan Investor A/C Former NDFC 1 32,877 0.00 Saudi Pak Industrial & Agricultural 1 30,905 0.00 Saudi Pak Industrial & Agricultural Investment Co. Ltd. PMD 1 854,000 0.00 M/s. Investment Corporation of Pakistan 1 3,250 0.00
Banks, development finance institutions, non-banking finance companies, insurance companies, takaful, modarabas and pension funds 15 2,835,537 0.07
Mutual Funds Safeway Mutual Fund Limited 1 620 0.00 CDC - Trustee Akd Index Tracker Fund 1 45,598 0.00
General Public a. Local 8069 29,549,994 0.76 b. Foreign 6 18,054 0.00 Foreign Companies 13 742,422 0.02 Others 93 4,581,676 0.12 Totals 8213 3,871,585,021 100.00
Share holders holding 5% or more Shares Held Percentage Standard Chartered Bank 98.99 (UK) 3,832,339,162 This page has been left blank intentionally Fold here
Company Secretary Standard Chartered Bank (Pakistan) LIimited P.O.Box No. 5556, I.I.Chundrigar Road, Karachi 74000, Pakistan Fold here Fold here
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Fold here Fold here Form of Proxy
8TH ANNUAL GENERAL MEETING STANDARD CHARTERED BANK (PAKISTAN) LIMITED
I/We ... . of .. being member(s) of Standard Chartered Bank (Pakistan) Limited holding .Ordinary shares hereby appoint of.. or failing him/her .. ..of ... who is/are also member(s) of Standard Chartered Bank (Pakistan) Limited as my/our Proxy in my/our absence to attend and vote for me/us and on my/our behalf at the Annual General Meeting of the Bank to be held on March 28, 2014 and/or any adjournment thereof.
Signed this ______day of ______2014.
Folio No. Signature on Rs. 5/- Revenue Stamp
WITNESSES: 1. Signature: Name: Address: CNIC No. Passport No.
2. Signature: Name: Address: CNIC No. Passport No.
Note: 1. The Proxy Form should be deposited at the registered office of the Bank, as soon as possible but not later than 48 hours before the time of holding the meeting, failing which, Proxy Form will not be treated as valid.
2. No person shall act as proxy unless he/she is a member of the Bank. 150 year celebrations 2013 marked Standard Chartered's 150th anniversary In Pakistan. The Bank, which started as the Chartered Bank opened its first office in Karachi in March 1863 Standard Chartered Here for good