Annual Report for the year ended December 31, 2010 Banking... made easy Contents 04 19 Years of Banking 06 Vision & Mission 08 Products & Services 12 Corporate Philosophy 16 Corporate Information 17 Directors’ Profile 20 Board Committees 21 Management Committees 24 Notice of 19th Annual General Meeting 28 Management 29 Organogram 30 Risk Management Framework 31 Entity Ratings 32 Corporate Social Responsibility 34 President’s Message 36 Information Technology Initiatives 38 Value Added Statement 39 Our Network 40 Financial Review 42 Financial Calendar 43 Share & Debt Information 44 Horizontal & Vertical Analysis 46 Six Years Performance 48 Directors’ Report Unconsolidated Financial Statements of Askari Bank Limited 63 Statement of Compliance 65 Review Report to the Members 66 Auditors’ Report to the Members 68 Unconsolidated Statement of Financial Position 69 Unconsolidated Profit and Loss Account 70 Unconsolidated Statement of Other Comprehensive Income 71 Unconsolidated Cash Flow Statement 72 Unconsolidated Statement of Changes in Equity 73 Notes to the Unconsolidated Financial Statements Consolidated Financial Statements of Askari Bank Limited and its Subsidiaries 133 Auditors’ Report to the Members 134 Consolidated Statement of Financial Position 135 Consolidated Profit and Loss Account 136 Consolidated Statement of Other Comprehensive Income 137 Consolidated Cash Flow Statement 138 Consolidated Statement of Changes in Equity 139 Notes to the Consolidated Financial Statements 191 Pattern of Shareholding 192 Correspondent Network 194 Branch Network 202 Statement of Financial Position in US dollars 203 Profit and Loss Account in US dollars 204 Glossary of Financial & Banking Terms 207 Form of Proxy With disciplined technological advancements, we are aiming to unlock the value of time, unlock the value of our systems, allowing and enabling multi-opportunities, multi-tasking, multi-benefits and multi-success. 1 2 Banking anytime, anywhere... 3 19 Years of banking Askari Bank was incorporated A shared network of 4,401 online in Pakistan on October 9, 1991, ATMs covering all major cities in as a public limited company. It Pakistan supports the delivery commenced operations on April 1, channels for customer service. As 1992, and is principally engaged in at December 31, 2010, the Bank the business of banking, as defined had equity of Rs. 16.0 billion and in the Banking Companies Ordinance, total assets of Rs. 314.7 billion, with 1962. The Bank is listed on Karachi, 885,764 banking customers, serviced Lahore and Islamabad Stock by our 6,442 employees. Exchanges. Askari Investment Management Askari Bank has since expanded Limited and Askari Securities Limited into a network of 235 branches / are subsidiaries of Askari Bank sub-branches, including 31 dedicated engaged in managing mutual funds Islamic banking branches, and a and share brokerage, respectively. wholesale bank branch in Bahrain. 4 5 Vision & Mission Our vision To be the bank of first choice in the region Our mission To be the leading bank in Pakistan with an international presence, delivering quality service through innovative technology and effective human resource management in a modern and progressive organizational culture of meritocracy, maintaining high ethical and professional standards, while providing enhanced value to all our stakeholders, and contributing to society 6 Our thinking Creating opportunities with innovation and technology Commitment Integrity Fairness Teamwork Service Customers Investors Regulators Employees Communities Passionate about A distinctive invest- Exemplary compli- Caring for our people Dedication towards our customers’ suc- ment, delivering ance, governance and helping them to social development cess, delighting them outstanding perfor- and business ethics grow and improvement in mance, return and with the quality of quality of life value our service Our vision to be the bank of first choice To further strengthen and enhance Our investors in the region demands continuous our technology platform, the Bank is We believe that the bottom line of any strive for creation of business oppor- in the process of replacing the exist- business is creating shareholder value. tunities with innovation while main- ing technology with a comprehensive To gain their trust and confidence, taining our core values to meet our state-of-the-art technology solutions. we believe in providing our investors commitment to all our stakeholders. This process is in the advanced stage timely, regular and reliable information and upon complete implementation, on our activities, structure, financial The range of our products aims to this initiative will greatly improve our situation, and performance. serve our diverse customer base product delivery and service abilities. that comprises of corporates, SMEs, Our regulators individual savers, households and, Our values We firmly believe in regulatory disci- farmers. At the same time, our people Integrity is the most valued standard in pline and harmony of our corporate are constantly engaged in assessing whatever we do. We understand that objectives with regulatory framework. customer needs and market dynamics our commitment to satisfy custom- Our business methodologies are de- to realign our products and priori- ers’ needs must be fulfilled within a signed to ensure compliance with the ties to attain brand recognition and professional and ethical framework. We directives of all our regulators. competitive edge. We are continuously subscribe to a culture of high ethical reviewing and reshaping our portfolio standards, based on the development Our employees of right attitudes. The intrinsic values, of businesses by investing in higher We strongly believe that the interests which are the corner stones of our growth areas, extending and developing of the Bank and the employees are corporate behaviour, are: our core competencies and moving out inseparable. At Askari we try to create of weak and non–core segments. • Commitment a ‘we’ culture where there is mutual • Integrity trust and respect for each other. We Technology has played a pivotal role • Fairness encourage ownership behaviour so in meeting customer expectations, • Teamwork that everyone feels responsible for the particularly with respect to speed and • Service performance and reputation of the quality of service. We have fully auto- Our customers Bank. We are committed to develop mated transaction–processing systems and enhance each employee’s skills and for back–office support. Our branch Knowing our customers and their capabilities through extensive in–house network is connected on–line real–time needs is the key to our business suc- and external training programs and job and our customers have access to cess. Our products and services are as rotations. In order to ensure meritoc- off–site as well as on–site ATMs, all diverse as our market segments. Our racy, our appraisal system is purely over Pakistan and internationally. Our client relationship managers are well performance based. phone and internet banking facilities equipped and well trained to provide allows customers to enjoy routine the most efficient and personalized Our communities banking service from anywhere, any- service to the customers. Askari Bank We fully recognize our corporate social time in the world. We also pioneered an is proud of its pioneering role in provid- responsibility and our contributions to e–commerce venture in Pakistan. Our ing the most modern and technologi- different areas of the social sector are mobile ATMs are the first in Pakistan. cally advanced services to its 885,764 aimed to help improve the quality of life relationships. in our Country. 7 Products & Services Branch Banking Through a widespread branch network in all Investment Certificates major cities, towns and cantonments, made up of Askari Bank’s Investment Certificates provide the conventional, corporate, consumer, Islamic, as well added security, investment and monthly return to as agricultural banking service branches, we aim to the customers. These certificates are negotiable provide our customers with a wide array of offer- and can be transferred to third party. Investment ings catering to all their banking needs. Certificates are available for a 3 months period and profit is payable on monthly basis through pre- Deposit Multiplier Account printed tear-off coupons. Designed for individual investors / savers who aim to invest their funds for a longer term and for Rupee Traveler Cheques relatively higher returns. This is a term deposit for Askari Bank offers customers a widely accepted a ten years tenure and offers a competitive rate of “Rupee Traveler Cheques”, which eliminates all fi- return payable on maturity. This product is ideal nancial risks while traveling. It is a safe and secure for investors / savers who wish to start saving for way to make payments nationwide. their future today. Roshan Mustaqbil Deposit Mahana Bachat Account The Askari Roshan Mustaqbil Deposit is a saving Jan 01 Askari Mahana Bachat Account is a term deposit plan created for individual investors/savers who designed for individuals with a short to medium wish to invest now for a regular return at a later term investment appetite. It offers customers the stage while keeping their principal intact. Custom- option of investing for one to three years tenures ers can invest a substantial amount without and has been designed keeping in view savings having to block their entire savings like a regular needs of customers who want profit