Annual Report 2016
Celebrating Success
Contents
Highlights 2016 01
Innovative Financial Solutions 06
About Mobilink Bank 17
Board of Directors 21
Management Team 23
Vision, Mission & Values 27
Our Products 29
Branch Network 31
Five Year Journey 33
Empowering Businesses: The Story of Deen Muhammad 39
Director’s Report 42
CEO’s Message 45
Chief Digital & Financial Services Officer’s Message 47
Auditor’s Report 49
Financial Statements 51
Notes to Financial Statements 56 Highlights 2016
Earnings Per Share 1.59 Return on Assets (ROA) 2.4% Return on Equity (ROE) 20.7% PAR 0.04%
Active Borrowers 91,747 Avg. Outstanding Loan Size 64,677 No. of Depositors 8,121,382 No. of Locations 51 Number of Employees 751 No. of Branchless Banking Agents 69,780 page 1 The Power of Progress Mobilink Microfinance Bank “A/A1” Credit Rating By PACRA
page 2 Mobile Account *786#
page 3 100
100 PAYMENTS
MOBILE LOAD Rs.
SEND MONEY SAVINGS & INSURANCE
ATM CARD
PAY BILLS
page 4 page 5 Innovative Financial Solutions Drivers of Growth & Success Our innovative financial solutions include a diversified range of products and services such as Domestic Remittance, International Remittance, G2P Disbursements, Utility Bills Payment, Inter-Bank Fund Transfer (IBFT), Pre & Post-Paid Top-Ups, Real time Fee/Loan/Donation/Insurance/Passport/ Tickets Payments, Digital Account opening through bio-metric verification, Loans Disbursements, CASA/TDR accounts, Bankers Cheques and Running Finance. These services are accessible through both Branch and Branchless Banking Platforms, and can be accessed real time through Branchless Banking, Over-the-Counter, Internet Banking, Mobile Application, CCDMs/ATMs/POS/Other-ADC Channels. Our financial solutions have transformed the microfinance industry in Pakistan. In the last five years we have introduced a diversified portfolio of financial products and spearheaded the launch of a cutting-edge branchless banking service under the brand JazzCash making us a leading player in technology driven microfinance solutions in Pakistan.
page 6 Pakistan’s Largest Digital Bank
page 7 page 8 First Microfinance Bank to Introduce
page 9 page 10 CCDM Cash & Cheque Deposit Machine
page 11 page 12 Internet Banking & Mobile Banking App
page 13 page 14 Visa Debit Card
Visa Classic
QURAT-UL-AEIN
page 15 Visa Classic
QURAT-UL-AEIN
* Coming Soon
page 16 About Mobilink Bank
With over 11 million mobile wallets, Mobilink Bank has become Pakistan’s largest digital bank in a short span of 4 years. Mobilink Microfnance Bank, formerly Waseela MF Bank, a Global Telecom - VEON Group company, started operations in April 2012 and launched branchless banking operations under the brand name ‘Jazzcash’ in partnership with Pakistan's largest telecom operator ‘Jazz’ in November 2012.
Being a hybrid model, that combines traditional microfnance with mobile / digital banking and agent based banking, the bank now operates with 51 branches, a nationwide network of 70,000 branchless banking agents and a USSD (GSM) based digital channel ofering savings, micro-enterprise loans, small housing loans, remittances, collections (of utility bills and loan instalments), mobile wallets, insurance, G2P, B2B & B2P payments, the bank currently plays a leading role in the promotion of fnancial inclusion. Despite being a young bank, Mobilink Bank has emerged as a front
page 17 runner in the sector, having achieved fnancial break-even within four years of commencement of operations, one of the fastest in the industry.
Mobilink Bank & Jazz, under the brand of Jazzcash, envision to become market leaders in digital fnancial services. Due to rapid increase in the smartphone user base in the country, distinction between traditional and mobile fnancial services is rapidly diminishing. Therefore, the Bank continues to invest in technology and systems to maintain it’s lead in digitalization of fnancial services. Mobilink Bank’s strategy is to take banking from the confnes of a limited number of brick and mortar structures to customers’ cell phones thereby removing a major barrier in expanding coverage and outreach, signifcantly increasing access to fnancial services such as savings, loans, insurance and transactional services.
page 18 2012 • Opened frst branch on May 2, 2012 • Pilot launch of branchless banking on May 31, 2012 • Commercial launch of branchless banking on November 5, 2012 with brand name Mobicash. • Opened four branches and six service centers • Ended year with Rs. 112 Million deposit with 8,655 depositors • Ended year at GLP of Rs. 6.5 Million • Branchless banking agents reached to 5,030, had 5,885 home remittance transactions and 62,375 Utility Bill Payments. 2013 • 0pened 26 new branches, reaching a total of 30 • Ended the year with deposits of Rs. 644 million (573.9% increase from 2012) and 66,279 depositors • GLP closed at Rs. 178 Million • Jazz Cash agents reached a count of 26,578, 2.51 million remittance transactions and 5.5 million Utility Bill Payments. 2014 • Opened 8 new Booths • Launched Interbank Fund Transfer (IBFT) service in November 2014. • Launched ATM card on May 02, 2014 and installed its frst ATM machine on July 07, 2014. • Closed deposits at Rs. 1.3 Billion with 311,748 depositors • GLP was closed at Rs. 500 Million • Jazz Cash agents reached to 49,586 with 15.8 million remittance transactions 9.314 million utility bill payments.
page 19 2015 • MMBL launched Banca assurance for its customers • Closed its deposit at Rs. 3.2 Billion with 3.2 Million depositors • GLP was closed at Rs. 1.4 Billion • Jazz Cash agents reached to 58,818 with 28.4 Million remittance transactions and 2.2 Million Utility Bill Payments. • Launched international remittance services on August 18, 2015. • Launched savings account products for mobile wallet accounts in August 2015. 2016 • Opened 05 new branches & 8 new booths in 2016 with total number of branches reaching 35 with 16 booths. • Launched NFC payments for mobile wallets in March 2016 • Re-branded from Waseela Microfnance Bank Limited to Mobilink Microfnance Bank Limited in May 2016. • Launched Internet Banking services In November, 2016, being the frst MFB to ofer these services. • Started disbursement of loans straight to mobile wallets in November 2016. • Closed its deposit at Rs. 10.3 Billion with 8.12 Million depositors • GLP was closed at Rs. 5.9 Billion • Jazz Cash agents reached to 69,767 with 36 Million remittance transactions and 4.5 Million Utility Bill Payments
page 20 Board of Directors:
Aamir Hafeez Ibrahim Director / Chairman
A highly motivated leader with the proven ability to develop organizations and drive revenues. Mr. Ibrahim possesses vast cross-functional experience that encompasses strategic marketing & sales, stakeholder management and corporate strategy. His track record includes successful leadership roles in Pakistan as well as Thailand, UK, UAE, Switzerland and USA across the telecom and automotive industry.
Niaz Brohi Director
Presently the Chief Legal Ofcer at Jazz and having previously worked with the Pakistan Telecom Authority, Mr. Brohi, has over 15 years of experience in the telecom sector specialising in regulatory and corporate afairs, litigation and management, due diligence, mergers and acquisitions, risk assessment and advising the board of directors.
Muhammad Usman Bajwa Director
A corporate fnance professional with over 10 years of experience in treasury and fnancial management. Mr. Bajwa is a qualifed Chartered Financial Analyst (CFA) with a proven record of managing extensive operations, large teams and various types of fnancing, debt and capital transactions.
Salim Nooruddin Jiwani Director
With over 15 years of experience in policy planning, fnancial management, institutional assessment and transformation of microfnance institutions, Mr. Jiwani believes in poverty reduction and economic empowerment. He has previously served on the Board of Directors of the First Microfnance Bank, Kashf Microfnance Bank and Pakistan Microfnance Network. page 21 Ghazanfar Azzam Director
Ghazanfar Azzam is the President and CEO of Mobilink Microfnance Bank Limited. He has vast experience and exceptional achievements to his credit in retail, commercial, consumer, SME and micro-banking segments. In a career spanning over 30 years, Ghazanfar has worked for some of the best banks in Pakistan including HBL, Union Bank, Prime Bank & Bank Alfalah in retail, commercial, consumer, SME Banking and Training & Development. In recognition of his contributions to HR Development in banking industry, he was awarded the prestigious Hubert Humphrey Fellowship by the United States Government for the year 2000-01 under Fulbright Program. He has attended advanced seminars and management development programs at LUMS, World Bank Institute in Washington DC and Harvard Business School.
David Leslie Christopher Dobbie Director
A young professional having 14 years’ experience in Legal and corporate afairs. He is an expert in International Transactions with specialties in international cross border transactions and mergers & acquisitions. Mr. Dobbie is a graduate from University of Auckland with in Law & Accounting. He is currently working as Deputy General Counsel in Vimpel Com.
Azfar Manzoor Director
Mr. Azfar is a seasoned professional having 22 years’ experience in the Telecommunication industry. He had done his Electrical engineering from USA & MBA from Lahore University of Management Sciences. He presently is board member of Universal Service Fund and Regional Chair of Massachusetts Institute of Technology. Currently serving as Vice President/ Head of B2B Business Unit & CEO Link.Net Telecom Ltd.
page 22 Management Team:
Ghazanfar Azzam President / CEO
Ghazanfar Azzam is the President and CEO of Mobilink Microfnance Bank Limited. He has vast experience and exceptional achievements to his credit in retail, commercial, consumer, SME and micro-banking segments. In a career spanning over 30 years, Ghazanfar has worked for some of the best banks in Pakistan including HBL, Union Bank, Prime Bank & Bank Alfalah in retail, commercial, consumer, SME Banking and Training & Development. In recognition of his contributions to HR Development in banking industry, he was awarded the prestigious Hubert Humphrey Fellowship by the United States Government for the year 2000-01 under Fulbright Program. He has attended advanced seminars and management development programs at LUMS, World Bank Institute in Washington DC and Harvard Business School.
Muhammad Asim Anwar Chief Operating Officer (COO)
A Seasoned Microfnance Professional with more than 16 years of diversifed experience across key business segments including Business Banking, Bank Operations, Branchless Banking, Administration & Procurement. While managing larger workforce across various locations in the country, Asim has been deeply involved in mobilizing the feld operations and achieving bank revenue targets through quality portfolios, diversifed business products and efective client management.
page 23 Ghazanfar Siddique Group Head IT & Operations
Business and Technology Integration Specialist with 20 years of diversifed experience in Banking, Digital Transformation and IT industries having domain exposure of Retail, Branchless Banking, Payment and Card Solutions. Worked as senior management positions in Pakistan, Malaysia and North Africa in Standard Chartered, Jaiz Bank PLC.
Shahzad Nazir Khan Head Risk Management
A Risk Management professional with diverse banking experience with International and Local Financial Institutions. Having extensive exposure to Business Banking as well as Risk Management in segments ranging from Corporate, SMEs to Microfnance, Shahzad has an efective ability to understand, assess and respond to the ever changing business dynamics. Always promoting a team based and constant learning culture at all levels enables Shahzad to keenly drive the evolution of Microfnance to Digital Banking while efectively safeguarding the interest of all stakeholders. Being a Change Management leader, Shahzad believes that efective communication and repeated transmission of MMBL’s core values not only strengthens our organization but also our people at an individual level.
page 24 Management Team:
Syed Sajjad Qayyum Group Head Compliance Affairs and Service Quality
S. Sajjad Q. Ashraf is an experienced banker having worked in diferent Instutitions in various capacities, including Leadership roles. Sajjad’ s experience covers key banking functions such as Credit, Operations, Business Banking, Compliance, risk management, Strategic Planning/Business Initiatives, and teams building. He is MBA, LLB(Pb.), D.A.I.B.P.
Tayseer Ali Chief Financial Officer (CFO)
Tayseer is a Chartered Accountant from ICAEW and a Fellow Chartered Certifed Accountant. He joined the Bank in January 2017 and was previously working for Pak China Investment Co. as CFO. Tayseer has been associated with the fnancial sector since 2011.
page 25 Naj-Mus-Sahar Sabzwari Head Internal Audit
Sabzwari has about 20 years of extensive experience in the feld of audit encompassing both commercial and microfnance banking environment. He is a Fellow member of Institute of Chartered Accountants of Pakistan (ICAP) with added qualifcations of CISA, CISM and CIA. He is reporting to the Board Audit Committee.
Samiha Ali Zahid Head HR and Trainings
Samiha Ali Zahid brings with her 15 years of cross functional experience in OD, Stafng & HRM resulting in creating cohesive and high performing teams that contribute towards business goals. She holds a Masters’ Degree in Public Administration and is a Certifed Trainer. She has been recently Certifed by Korn Ferry for their product suite "Korn Ferry Leadership Architect".
Samiha has proven experience of collaborating with other Business functions to initiate programs aimed at developing and sustaining a positive employer image crucial to attract and retain talent. Her expertise include development of policy guidelines aiming to bring internal and external equity for employees. For the last 6 years she has addressed and implemented strategic plans for managing people experience, compensation structure, retention and succession plans.
page 26 Visi n Mobilink Microfnance Bank aims to alleviate poverty and promote fnancial inclusion by providing innovative solutions.
Missi n
Mobilink Microfnance Bank aims to provide fnancial solutions to the economically underprivileged for their economic freedom by using innovative ADC’s and promoting micro businesses through an ethical and passionate team, which strives to deliver beyond expectations.
page 27 Corporate Values
Collaborative Truthful
Customer Obsessed Innovative Entrepreneurial
page 28 Solution for Financial Empowerment
Micro Enterprise Loan Karobar Loan Khushhal Kisan Loan Fori Cash Loan
Livestock Loan Agri Passbook Loan Mobi House Tractor Loan
Salary Loan LSO loans Ready Cash page 29 Our Saving Options
Sahulat Current Bachat Account Mahana Munafa Mustaqbil Term Account Term Deposit Deposit
Assan saving Assan Current Account Account
Investment in Prosperity
Banca Assurance Banca Takaful Waseela e Zindagi Mobi Takaful page 30 Branches Network
06 51 Business Branches Areas
Business Areas
10 09 09 09 Central 1 Central 2 Central 3 Central 4
Faisalabad & Sargooda Sahiwal Multan & Layyah Rahim Yar Khan
07 07 North South
Peshawar Pannu Aqil page 31 Peshawar
Islamabad
Lahore
Karachi
S.No. Business Unit Branch / Area S.No. Business Unit Branch / Area Name Booth Name Name Booth Name 1 Abbotabad Branch North 27 Bhakkar Branch Central-3 2 Islamabad Branch North 28 Layyah Branch Central-3 3 Peshawar Branch North 29 Multan Branch Central-3 4 Haripur Branch North 30 Daryah Khan Booth Central-3 5 Rawalpindi Branch North 31 Chowk Azam Booth Central-3 6 Mardan Branch North 32 Shujabad Booth Central-3 7 Swabi Branch North 33 Kot Addu Branch Central-3 8 Jhang Branch Central-1 34 Mankera Booth Central-3 9 Toba Tek Branch Central-1 35 Karor Lal Essan Booth Central-3 10 Faisalabad Branch Central-1 36 Lodhran Branch Central-4 11 Gojra Booth Central-1 37 Kehror Pecca Booth Central-4 12 Khushab Branch Central-1 38 Duniapur Booth Central-4 13 Lahore Branch Central-1 39 Jalalpur Booth Central-4 14 Sialkot Branch Central-1 40 Liaquatpur Branch Central-4 15 Sargodha Branch Central-1 41 Ahmedpur Booth Central-4 16 Bhalwal Booth Central-1 42 Rahimyarkhan Branch Central-4 17 Mandi Bahauddin Branch Central-1 43 Khanpur Booth Central-4 18 Sahiwal Branch Central-2 44 Sadiqabad Booth Central-4 19 Pakpattan Branch Central-2 45 Pannu Akil Branch South-1 20 Arif Wala Booth Central-2 46 Dherki Branch South-1 21 Chishtian Branch Central-2 47 Ranipur Branch South-1 22 Hasil Pur Booth Central-2 48 Hala Branch South-1 23 Haroon Abad Booth Central-2 49 Hyderabad Branch South-1 24 Fortabbas Branch Central-2 50 Karachi-PC Branch South-2 25 Burewala Branch Central-2 51 Karachi-NTO Branch South-2 26 Mian Channu Branch Central-2 page 32 Five Year Journey
Financial Position (PKR in 000's) Total Assets Deposits Gross Advances Total Assets Total Assets Shareholders Equity Total Assets Investments Total Assets Shareholders Equity Investments Deposits Shareholders Equity Shareholders Equity Shareholders Equity Deposits Deposits Investments Investments Gross Advances Investments Gross Advances 326,780 Gross Advances Gross Advances 112,151 Deposits 1,495,053 5,933,962 10,306,362 1,230,493 14,233,857 2,540,847
649 1,287,919 1,036,330 915,411 1,180,897 1,046,681 409,517 500,402 125,272 178,328 4,890,557 1,000,336 3,197,311 1,913,398 1,144,045 2012 2014 1,350,315 2016 645,369 2013 2015
Financial Performance (PKR in 000's) 2012 2013 2014 2015 2016
110,931 157,886 457,313 884,453 1,948,586
(34,640) (212,779) (148,904) (193,668) 334,835
(35,194) (215,960) (107,054) (37,277) 230,758
Key
Revenue Profit/(Loss) Before Tax Profit/(Loss) After Tax
page 33 Ratios
2016 2015 2014 2013 2012
Return on Assets 2.4% -1.0% -4.8% -14.0% -3.1%
Return on Equity 20.7% -3.7% -9.8% -19.7% -3.3%
PAR 0.04% 0.0% 0.0% 0.0% 0.0%
Operating Self Sufficiency 120.7% 82.0% 75.4% 42.6% 76.2%
Earnings/(Loss) Per Share (PKR) 1.59 (0.26) (0.75) (1.90) (0.31)
page 34 page 35 page 36 page 37 Business Units
41 49,573 36 41 26,550 58,568 2014 2014 2015 2015
2013 2013
2016 2016 - 69,780 10 2012 51 2012
Branches/Booths BranchLeSs banking agents
Key Stats
11,402 311,920
4,407 27,225 66,693 3,185,600 2014 2014 2015 2015
2013 2013
2016 2016 29 91,747 8,121,382
2012 6,850 2012
Active Borrowers Depositors
475 346 620 2014 2015 2013 130 2016 751 2012
Employees
page 38 Empowering Businesses Transforming Lives The Story of Deen Muhammad The Local Lumber Business Owner
Deen Muhammad, a 49 year old resident of Hala, Sindh, owns a lumber and coal business. Deen has a large family, with 10 dependents, and prior to having his own business he worked as an unskilled laborer and was barely making ends meet. Acting on the suggestion of a close friend, he set out to establish a business to create other income streams, particularly a small lumber business. He began from selling small pieces of wood from trees in the local market but struggled to generate any signifcant income. In 2013, during the initial days of the establishment of Mobilink Bank (at the time known as Waseela Microfnance Bank), Deen came into contact with a relationship ofcer from the local bank branch and applied for a micro-loan in order to invest in his business. He added upon his existing setup with new wood and coal products and expanded to the Bhit-Shah Bus Terminal, a busy area where wood and coal were the primary sources of power generation. Through
page 39 additional income he also purchased agricultural land and live-stock to generate further income and supplement his household’s dairy and food consumption. In the future, Deen plans to further expand the distribution of his business and employ the services of his elder son, who already supports him in various ways. The family plans to build upon the success of the business and multiply the income potential through expansion. Deen’s wood and coal business has also helped his community. Previously local households had to travel far to obtain these commodities for everyday use. Citi-PPAF also acknowledges Deen Muhammad’s eforts and contributions to his community. His story brings great pride and joy to us at Mobilink Microfnance Bank and also won Deen, his relationship ofcer and the bank awards at the 10th Citi-PPAF Micro Entrepreneurship Awards held at Islamabad.
page 40
Aamir Hafeez Ibrahim Chairman
page 41 Directors’ Report For the year ended December 31, 2016
On behalf of the Board of Directors, I am pleased to present the audited fnancial statements and Auditors’ Report thereon, for the year ended December 31, 2016. Performance Highlights: The bank established itself as a key player in the digital banking and microfnance industry. With a network of 35 branches, 16 booths/service centers and 69,780 branchless banking locations, the bank achieved a growth of 339% in the loan book during the year and 222% growth in deposits from the previous year. Both core banking & branchless banking revenue has increased signifcantly resulting in Rs. 1,949 million in total revenue in 2016, compared to Rs. 884 million in the previous year. The bank posted a proft after tax of Rupees 231 million during the year.
Financial Highlights:
2016 2015 ---- Amount in PKR ‘000’ ---- Net Mark-up/Interest Income 985,740 298,597 Provision against NPLs (67,611) (5,170) Net Mark-up/Interest Income after provisions 918,129 293,427 Non-Mark-up / Non-interest Income 707,516 531,145 Total income 1,625,645 824,572 Administrative Expenses (1,290,81 0) (1,018,240) Taxation (104,077) 156,390 Proft/(Loss) after tax 230,758 (37,277)
Operational achievements/milestones:
The bank’s performance against its business plan is on track since its inception. With a mix of collateralized and uncollateralized products for rural & urban markets, the bank managed to secure high quality loan portfolio with only 0.04% of the total portfolio categorized as non-performing, demonstrating the bank’s efective credit policy and internal controls.
During the year 2016, the bank has successfully made a number of technological developments, including internet banking and mobile banking applications, and capitalized on previously established alternate delivery channels to efectively expand on delivery of products and services to secure signifcant growth in its customer base. The bank established new integrations and partnerships with service providers to enable international remittance & fund transfers and also integrated the payment gateway with 1-Link to enable payments at ATMs. To ensure timely efcient & efective controls new features were implemented in the branchless banking platform to adhere to recent regulatory control requirements.
Controls Framework: The Bank’s management, being responsible to establish and maintain an adequate and efective system of internal controls and procedures, evaluated the efectiveness of the bank’s internal control system and reviews signifcant policies and procedures. To make these functions more efective & independent Board Sub - Committees have been set-up to provide the necessary oversight.
page 42 Statement of Compliance
The board is pleased to confrm that: 1. The fnancial statements prepared by the management of the bank present a true and fair view of the state of its afairs, operational results, cash fows and changes in equity. 2. Proper books of accounts of the company have been maintained. 3. Appropriate accounting policies have been consistently applied in preparation of fnancial statements. 4. The bank has followed all accounting standards as applicable to Microfnance Banks in Pakistan. 5. As a continuous process, eforts are made to efectively implement the internal control systems. 6. There are no doubts about the bank’s ability to continue as a going concern. 7. The board has constituted Audit and Risk Management Committees comprising of non-executive members, which have defned terms of reference.
Pattern of Shareholding: The pattern of shareholding of the bank as at December 31, 2016 as required under section 236 of the Companies Ordinance, 1984 is as follows:
No. of Held by shareholders From To Total Shares Held 5 1 100 5
1 Global Telecom Holdings S.A.E (Formerly 101 145,175,355 145,175,355 Orascom Telecom Holding S.A.E) Egypt
Credit Rating
The Pakistan Credit Rating Agency Limited (PCRA) revised the bank’s credit rating for the year 2016 in August 2016 as follows:
New – Aug’16 Previous – Mar’16
Long term A A- Short term A1 A2 Outlook Stable Stable
Capital Adequacy During the year the bank remained compliant with the statutory capital adequacy requirement of keeping the ratio to at least 15% capital of its risk-weighted assets.
page 43 Acknowledgements:
On behalf of the Board of Directors, I would like to appreciate the hard work put in by the employees of the bank in taking various initiatives during the year. I, on behalf of the Board, express gratitude to the State Bank of Pakistan for its continued support and guidance. Taking this opportunity, I would also thank, on behalf of the Board & the management, the customers for entrusting confdence in us and assure them that we remain committed to maintaining high service standards and a strong corporate governance and compliance in all our endeavors.
For and on behalf of the Board
Aamir Hafeez Ibrahim Chairman
page 44 CEO’s MESSAGE Ghazanfar Azzam
On behalf of the Board of Directors and the became accessible to all mobile subscribers in management, I would like to congratulate the Pakistan. team at Mobilink Microfnance Bank Limited (MMBL) on the close of the bank’s most Resultantly the Bank achieved aggressive impressive and successful year. In 2016 we growth in all key indicators. The total asset took on the challenge to grow and expand on base stood at PKR 14.2 billion, a growth of our business, products and services and in 191% from the previous year’s base of PKR 4.89 doing so we achieved tremendous goals and billion. The bank’s loan and deposit portfolios greatly enhanced our level of service delivery. grew exponentially, closing the year at PKR 5.9 billion ( 339%) and PKR 10.3 billion ( 222%) As the microfnance industry continues to respectively, with a pre-tax proft of PKR 334.8 grow on the premise of fnancial inclusion, it million, a swing of 273% from last year’s loss of remains in need of disruptive intervention. The 193.6 million. The bank’s share of the country’s market stands at PKR 137 billion in microfnance banking portfolio grew to 6.6%, outstanding micro-loans, 65% catered to by from 2.4%, and our credit rating was improved microfnance banks, with a total banked to A/A-1 by PACRA. population of less than 18%. The opportunity remains quite vast with demand continuing to Our strategy for the year, deemed ‘Quantum increase. Mobile fnancial services remain at Leap 2016’, built upon our strength of being a the forefront of inclusion eforts as local and digital and versatile institution, yielded international infuence guides eforts to outstanding results and I am proud of all we further strengthen delivery channels and have managed to achieve. We now serve over penetration of digital services. 91,000 active loan customers, 137,000+ branch banking customers and close to 8 In an evolving market, we felt it necessary to million mobile wallet accounts. During the reposition ourselves in the arena of digital year Jazzcash gained majority market share in fnancial services. This included rebranding active mobile wallets making it the leading ourselves, to Mobilink Microfnance Bank, to mobile fnancial service in the country. better capitalize on the brand strength of our sister company. With our new image we set We progress into the new year seeking to face new goals for the organization and it is my greater challenges, aiming higher and geared pleasure to acknowledge that the team up to accomplish more. Leveraging on our collectively strived and worked tirelessly to strengths we will optimize our systems and successfully achieve them. operating structure towards enhanced efciency and control to continue to grow We launched our state of the art internet efectively while maintaining standards of banking services and mobile applications, service delivery. The market we serve ofers expanded on our loan and deposit products, immense opportunity for growth and our added 13 addition locations to our branch edge of being digital and innovative will be network and our branchless banking service, pivotal to expanding on the services and value rebranded to Jazzcash, launched innovative we ofer to the country’s microfnance and insurance and remittance products, an online digital fnancial ecosystem. payment gateway and the Jazzcash account
page 45 page 46 Chief Digital & Financial Services Officer Aniqa Afzal Sandhu
First of all, I would like to congratulate In line with State Bank’s National Financial Mobilink Microfnance Bank on the Inclusion Strategy, our focus is to take completion of 5 successful years. It has banking services to the masses. Our short been a phenomenal journey so far. We term goal is to bring people in the have secured a leading position in the fnancial net and ofer them basic services Mobile Financial services category with like domestic transfers, bill payments, top more than 2 Million monthly active mobile ups and disbursements, and in the long accounts. On the traditional banking front run upgrade these customers to more we made great progress in the last fve sophisticated products like micro loans, years. 2016 was a special year. The bank online payments and debit cards. I would saw over 300% growth in its Gross Loan also like to thank State bank for all their Portfolio and over 200% in Deposits. We guidance and support. closed the year with Rs.5.93 billion in receivables and Rs.10.3 billion in deposits. The world is changing at a very fast pace, This was made possible by the hardwork, but this is what makes our jobs and lives dedication and support extended by the more exciting. We saw opportunity in the bank, not to mention efectively change; we re-thought and re-shaped our managing the relationship with the State business to become more agile and Bank. I deeply value, appreciate and innovative. Our ambition is to become a acknowledge the commitment of digital organization and we want to Mobilink Bank’s employees. It is your reshape the digital landscape in Pakistan. passion to do things diferently, and your We need to continuously work on promise and determination to act with adapting ways to make things easier for integrity and transparency in everything our stakeholders both internally and you do, that has made it possible for us to externally. I would like to wish the best of live upto our values, and deliver on the luck to the Bank’s team for the years to promise made to our stakeholders. come.
page 47 page 48 Auditor’s Report to the Members For the year ended December 31, 2016
We have audited the annexed balance sheet of Mobilink Microfnance Bank Limited – formerly Waseela Microsoft Bank Limited, (the Bank) as at December 31, 2016 and the related proft and loss account, statement of comprehensive income, cash fow statement and statement of changes in equity together with the notes forming part thereof, for the year then ended 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 purpose of our audit. It is the responsibility of the Bank’s management to establish and maintain a system of internal control, and prepare and present the above said statements in conformity with the approved accounting standards and the requirements of the Companies Ordinance, 1984, Microfnance Institutions Ordinance, 2001, and the directives issued by the State Bank of Pakistan. Our responsibility is to express an opinion on these statements based on our audit. We conduct our audit in accordance with the audit standards as applicable in Pakistan. These standards require to that we plan and perform the audit to obtain reasonable assurance about whether the above said statements are free of any material misstatement. An audit includes examining on a test basis, evidence supporting the amounts and disclosures in the above said statements. An audit also includes assessing the accounting policies and signifcant estimates made by the management, as well as, evaluating the overall presentation of the above said statements. We believe that our audit provides a reasonable basis for our opinion and, after due verifcation, we report that: a) in our opinion, proper books of accounts have been kept by the Bank as required by the Companies Ordinance, 1984; b) in our opinion – i) the balance sheet, proft and loss account and statement of comprehensive income together with the notes thereon have been drawn up in conformity with the Companies Ordinance 1984, the Microfnance Institution Ordinance, 2001 and the directives issued by the State Bank of Pakistan, and are in agreement with the books of accounts and are further in accordance with accounting policies consistently applied; ii) the expenditure incurred during the year was for the purpose of Bank’s business; and iii) the business conducted, investments made and the expenditure during the year were in accordance with the objects of the Bank;
page 49 c) in our opinion and to the best of our information and according to the explanations given to us, the balance sheet proft and loss account, statement of comprehensive income, cash fow statement and 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 Companies Ordinance, 1984, the Microfnance Institutions Ordinance, 2001 and the directives issued by the State Bank of Pakistan, in the manner so required and respectively give a true and fair view of the state of Bank’s afairs as at December 31, 2016 and of the proft, its cash fows and changes in equity for the year then ended; and d) in our opinion, Zakat deductible at source under the Zakat and Usher Ordinance, 1980 (xviii 0f 1980), was deducted by the Bank and deposited in the Central Zakat Fund established under section 7 of that Ordinance.
Chartered Accountants Islamabad: March 24, 2017
Engagement Partner: JehanZeb Amin
page 50 MOBILINK MICROFINANCE BANK LIMITED (Formerly Waseela Microfinance Bank Limited) BALANCE SHEET AS AT DECEMBER 31, 2016
2016 2015 ASSETS Note (Rupees) (Rupees) Cash and Balances with SBP and NBP 6 7 47,930,012 2 66,578,027 Balances with other Banks/NBFIs/MFBs 7 4 ,742,891,348 2 ,402,370,277 Lending to fnancial Institutions - - Investments – net of provisions 8 1 ,495,053,230 1 25,271,966 Advances – net of provisions 9 5 ,858,824,209 1 ,342,557,145 Operating fxed assets 10 3 88,447,521 2 89,234,838 Other assets 11 8 53,361,423 2 70,088,401 Deferred tax asset 12 1 47,349,687 1 94,455,975 Total Assets 14,233,857,430 4 ,890,556,629
LIABILITIES
Deposits and other accounts 13 10,306,362,467 3 ,197,311,437 Borrowings - - Subordinated debts - - Other liabilities 14 2 ,697,001,907 692,909,346 Deferred tax liabilities - - Total Liabilities 13,003,364,374 3 ,890,220,783
Net assets 1 ,230,493,056 1,000,335,846
REPRESENTED BY:
Share Capital 15 1 ,451,753,600 1 ,451,753,600 Statutory reserves 5.8 4 6,151,566 - Depositor's protection fund 5.8 11,537,892 - Accumulated losses ( 278,950,002) (452,018,374) 1 ,230,493,056 9 99,735,226
Surplus on revaluation of assets 16 - 6 00,620 Deferred grants - - Total Capital 1 ,230,493,056 1,000,335,846
MEMORANDUM / OFF-BALANCE SHEET ITEMS 17
The annexed notes from 1 to 35 form an integral part of these fnancial statements.
page 51 MOBILINK MICROFINANCE BANK LIMITED (Formerly Waseela Microfinance Bank Limited) PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED DECEMBER 31, 2016 2016 2015 Note (Rupees) (Rupees) Mark-up/Return/Interest earned 18 1 ,241,070,085 3 53,307,829 Mark-up/Return/Interest expensed 19 ( 255,330,339) ( 54,710,577) Net Mark-up/ Interest Income 985,739,746 2 98,597,252 Provision against non-performing loans and advances ( 67,610,733) ( 5,170,193) Provision for diminution in the value of investments - - Bad debts written of directly - - ( 67,610,733) ( 5,170,193) Net Mark-up/ Interest Income after provisions 9 18,129,013 2 93,427,059 NON MARK-UP/ NON INTEREST INCOME Fee, Commission and Brokerage Income - net 20 7 03,855,723 5 31,144,891 Dividend Income - - Other Income 21 3 ,660,355 - Total non-markup/non interest Income 7 07,516,078 5 31,144,891 1 ,625,645,091 8 24,571,950 NON MARK-UP/ NON INTEREST EXPENSES Administrative expenses 22 (1,287,181,352) (1,018,141,704) Other provisions/write ofs - - Other charges 23 ( 3,629,020) ( 98,000) Total non-markup/non interest expenses (1,290,810,372) ( 1,018,239,704) 3 34,834,719 ( 193,667,754) Extra ordinary/unusual items - - PROFIT / (LOSS) BEFORE TAXATION 3 34,834,719 ( 193,667,754)
Taxation - Current 24 ( 56,921,902) - Taxation - Prior years 24 - - Taxation - Deferred 24 ( 47,154,987) 1 56,390,336 ( 104,076,889) 1 56,390,336 PROFIT / (LOSS) AFTER TAXATION 2 30,757,830 ( 37,277,418) Accumulated loss brought forward ( 452,018,374) ( 414,740,956) Loss available for appropriation ( 221,260,544) (452,018,374)
APPROPRIATIONS: Transfer To: Statutory reserve ( 46,151,566) - Capital reserve - - Contribution to depositors protection fund ( 11,537,892) - Revenue reserve - - Dividend - - Others - - ( 57,689,458) - Accumulated loss carried forward ( 278,950,002) (452,018,374) Proft / (Loss) per share (Rupee) 28 1 .59 ( 0.26)
The annexed notes from 1 to 35 form an integral part of these fnancial statements.
page 52 MOBILINK MICROFINANCE BANK LIMITED (Formerly Waseela Microfinance Bank Limited) STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED DECEMBER 31, 2016
2016 2015 Note (Rupees) (Rupees) Proft /(Loss) after taxation 2 30,757,830 ( 37,277,418) Other comprehensive income/ (loss) 4 8,699 -
Comprehensive income/ (loss) transferred to equity 2 30,806,529 (37,277,418) Components of comprehensive income not refected in equity Surplus / (defcit) on revaluation of investments 8.2 - 1 ,331,608 Related tax impact - ( 48,699) - 1 ,282,909
2 30,806,529 ( 35,994,509)
The annexed notes from 1 to 35 form an integral part of these fnancial statements.
page 53 MOBILINK MICROFINANCE BANK LIMITED (Formerly Waseela Microfinance Bank Limited) CASH FLOW STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2016 2016 2015 Note (Rupees) (Rupees) CASH FLOWS FROM OPERATING ACTIVITIES Proft / (Loss) before taxation 3 34,834,719 ( 193,667,754) Less: Dividend income - - 3 34,834,719 ( 193,667,754) Adjustments for non-cash charges Depreciation 8 8,332,296 6 5,418,020 Amortization 3 2,897,932 1 7,311,184 Provision for gratuity 5 ,024,139 4,730,073 Provision against non-performing advances 6 7,610,733 5 ,170,193 Provision for diminution in the value of investments/ other assets - - (Gain) /loss on sale of fxed assets- net ( 2,462,889) 8 7,247 Assets transferred to related party - 1 2,777 1 91,402,211 9 2,729,494 5 26,236,930 (100,938,260) (Increase)/ decrease in operating assets Lending to fnancial institutions - - Advances (4,583,877,797) ( 849,914,872) Other assets (excluding advance taxation) (594,577,185) ( 77,949,066) (5,178,454,982) ( 927,863,938) Increase/ (decrease) in operating liabilities Bills payable 2 8,551,824 3 3,755,730 Borrowings from fnancial institutions - - Deposits 7 ,109,051,030 1 ,909,392,697 Other liabilities (excluding current taxation) 1 ,972,053,060 4 44,545,173 9 ,109,655,914 2 ,387,693,600 4 ,457,437,862 1 ,358,891,402 Gratuity paid ( 1,536,462) ( 2,150,381) Payments against provisions held against of-balance sheet obligations - - Income tax paid (45,617,739) ( 15,812,984) Net cash infow from operating activities 4 ,410,283,661 1 ,340,928,037 CASH FLOWS FROM INVESTING ACTIVITIES Net investment in available-for-sale securities ( 1,370,430,583) 2 02,839,400 Net investment in held-to-maturity securities - - Dividend income - - Investments in operating fxed assets (221,888,203) ( 152,646,719) Sale proceeds of property and equipment disposed–of 3 ,908,181 1 ,544,000 Net cash (outfow) / infow from investing activities ( 1,588,410,605) 5 1,736,681 CASH FLOWS FROM FINANCING ACTIVITIES Receipts/ payments of Sub-ordinated loan - - Receipts/ payments of lease obligations - - Issue of share capital - - Dividend paid - - Net cash fow from fnancing activities - - Increase / (decrease) in cash and cash equivalents 2 ,821,873,056 1 ,392,664,718 Cash and cash equivalents at beginning of the year 2 ,668,948,304 1 ,276,283,586 Cash and cash equivalents at end of the year 30 5 ,490,821,360 2 ,668,948,304
The annexed notes from 1 to 35 form an integral part of these fnancial statements.
page 54 page 55 MOBILINK MICROFINANCE BANK LIMITED (Formerly Waseela Microfinance Bank Limited) STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED DECEMBER 31, 2016
Capital Statutory Revenue Depositors Advance against Accumulated Total Share Capital Reserve Reserve Reserve Protection Fund issue of shares losses
(Rupees) (Rupees) (Rupees) (Rupees) (Rupees) (Rupees) (Rupees) (Rupees)
Balance at January 01, 2015 1 , 4 5 1 ,753,600 - - - - - ( 4 1 4 ,7 4 0,956) 1 ,0 3 7 ,012,644 Loss for the year Other comprehensive income/ (loss) ------( 3 7 ,2 7 7 ,418) ( 3 7 , 2 77,418) Transfers to Statutory reserves ------Other appropriations ------Issue of share capital ------Balance at December 31, 2015 1 , 4 5 1 ,753,600 - - - - - ( 4 5 2 ,0 1 8,374) 9 9 9 , 7 35,226
Proft for the year ------2 3 0 ,7 5 7 ,830 2 3 0 , 7 57,830 Other comprehensive income/ (loss) ------Transfers to Statutory reserves - - 4 6 , 1 51,566 - - - (46,151,566) - Transfer to Depositors protection fund - - - - 11,537,892 - (11,537,892) - Other appropriations ------Issue of share capital ------Balance at December 31, 2016 1,451,753,600 - 4 6 , 1 51,566 - 11,537,892 - ( 278,950,002) 1 , 2 3 0 ,493,056
The annexed notes from 1 to 35 form an integral part of these fnancial statements.
MOBILINK MICROFINANCE BANK LIMITED (Formerly Waseela Microfinance Bank Limited) NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2016
1 STATUS AND NATURE OF BUSINESS
Mobilink Microfnance Bank Limited formerly known as Waseela Microfnance Bank Limited (the Bank) was incorporated in Pakistan on November 29, 2010 as a public limited company under the Companies Ordinance, 1984. The Bank obtained license for Microfnance from the State Bank of Pakistan (SBP) on September 12, 2011 to operate on a nationwide basis and received the certifcate of commencement of business from Securities and Exchange Commission of Pakistan (SECP) on February 13, 2012 whereas certifcate of commencement of business from SBP was received on April 20, 2012. The Bank has 51 business locations / touch points comprising of 35 branches and 16 booths / service centres (2015: 41 business locations / touch points comprising of 30 branches and 11 booths/ service centres) in operation. The Bank is a subsidiary of Global Telecom Holding S.A.E. (the holding company) which owns 99.99% shareholding in the Bank. The Bank's registered and principal ofce is situated at Plot No. 3-A/2, F-8 Markaz, Islamabad, Pakistan. The Bank's principal business is to provide microfnance banking and related services to the poor and under served segment of the society under the Microfnance Institution Ordinance, 2001. The Bank is also ofering Branchless Banking Services through agency agreement with Pakistan Mobile Communications Limited (PMCL), a related party, under the Branchless Banking license from the SBP.
Further, pursuant to the special resolution passed in the Extraordinary General Meeting of the shareholders held on 2016 and approval of SBP and the SECP, the name of the Bank was changed from "Waseela Microfnance Bank Limited" to "Mobilink Microfnance Bank Limited" with efect from April 29, 2016.
2 BASIS OF PRESENTATION
These fnancial statements have been presented in accordance with the Banking Supervision Department (BSD) Circular No. 11 dated December 30, 2003 issued by the State Bank of Pakistan.
3 STATEMENT OF COMPLIANCE
These fnancial statements have been prepared in accordance with the approved accounting standards as applicable in Pakistan. Approved accounting standards comprise of International Financial Reporting Standards (IFRSs) issued by the International Accounting Standards Board (IASB) as are notifed under the Companies Ordinance, 1984, the requirements of the Companies Ordinance, 1984, the Microfnance Institutions Ordinance, 2001, and the regulations/ directives issued by the SECP and the SBP. Wherever the requirements of the Companies Ordinance, 1984, the Microfnance Institutions Ordinance, 2001, or regulations/ directives issued by the SECP and SBP difer with the requirements of IFRSs, the requirements of the Companies Ordinance, 1984, the Microfnance Institutions Ordinance, 2001, or the requirements of the said regulations/ directives shall prevail.
The SBP vide BSD Circular No. 10, dated August 26, 2002 has deferred the applicability of International Accounting Standard (IAS) 39, "Financial Instruments: Recognition and Measurement" and IAS 40, "Investment Property" till further instructions. Accordingly, the requirements of these standards have not been considered in the preparation of these fnancial statements. However, investments have been measured in accordance with the Prudential Regulations (the Regulations) of the SBP and presented in accordance with the requirements of SBP BSD Circular No. 11 dated December 30, 2003. Further, the SECP vide its S.R.O No. 411 (I)/ 2008 dated April 28, 2008 has deferred the applicability of International Financial Reporting Standard (IFRS) 7 "Financial Instruments: Disclosures", which is applicable for annual periods beginning on or a fter July 01, 2009, till further orders.
page 56 4 BASIS OF MEASURMENT
These fnancial statements have been prepared under the historical cost basis except "available for sale" investments which are measured at fair value.
4.1 Functional and presentation currency
These fnancial statements are presented in Pakistan Rupee (PKR), which is the Bank’s functional currency. All fnancial information presented in PKR has been rounded to the nearest of PKR, unless otherwise stated.
4.2 Significant accounting estimates
The preparation of fnancial statements in conformity with approved accounting standards, as applicable in Pakistan, requires management to make judgments/ estimates and associated assumptions that afect the application of policies and reported amounts of assets and liabilities, income and expenses. These judgments/ estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the result of which form the basis of making the estimates about carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may difer from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised if the revision afects only that period, or in the period of the revision and future periods if the revision afects both current and future periods. Information about signifcant areas of estimation, uncertainty and critical judgments in applying accounting policies that have signifcant efect on the amounts recognized in the fnancial statements relates to valuation and impairment of investments, advances, determination of useful lives of depreciable assets and intangible assets, provision for income taxes and other provisions which are discussed in following paragraphs:
a) Impairment of investments
Impairment in the value of investments is made after considering objective evidence of impairment. Provision for diminution in the value of investments is made as per the Regulations issued by SBP.
b) Advances
The Bank reviews its micro credit loan portfolio to assess amount of non-performing advances and provision required there against on regular basis. While assessing this requirement, the Regulations of SBP are taken into consideration.
c) Taxation
The Bank takes into account the current income tax law and decisions taken by the taxation authorities. Those amounts are shown as contingent liabilities wherein, the Bank's views difer from the views taken by the taxation authorities at the assessment stage and where the Bank considers that its view on items of material nature is in accordance with law.
page 57 d) Operating fixed assets/ intangible assets
Estimates of residual values and useful lives of operating fxed assets and intangible assets are reassessed annually and any change in estimate is taken into account in the determination of depreciation/ amortization charge and impairment loss. Changes in estimates are accounted for over the estimated remaining useful life of the assets.
e) Provisions and contingencies
The Bank reviews the status of all the legal cases on a regular basis. Based on the expected outcome and consideration of opinion of its legal advisor, appropriate provision/ disclosure is made.
f) Impairment of financial assets
A fnancial asset is considered to be impaired if objective evidence indicates that one or more events would have a negative efect on the estimated future cash fows of that asset.
An impairment loss in respect of a fnancial asset measured at amortized cost is calculated as the diference between its carrying amount, and the present value of the estimated future cash fows discounted at the original interest rate.
Individually signifcant fnancial assets are tested for impairment on an individual basis. The remaining fnancial assets are assessed collectively in groups that share similar credit risk characteristics. All impairment losses are recognized in proft and loss account.
g) Other provisions
Estimates of the amount of provisions recognized are based on current legal and constructive requirements. As actual outfows can difer from estimates due to changes in laws, regulations, public expectations, prices and conditions, and can take many years in the future, the carrying amounts of provisions are regularly reviewed and adjusted to take account of such changes.
5 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
5.1 Cash and cash equivalents
Cash and cash equivalents comprise cash in hand, balance with SBP/ National Bank of Pakistan (NBP) and other banks/ Non- Banking Financial Institutions (NBFIs)/ Microfnance Banks (MFBs).
5.2 Investment
All purchases and sale of investments are recognized using settlement date accounting. Settlement date is the date on which investments are delivered to or by the Bank. All investments are derecognized when the right to receive economic benefts from the investments has expired or has been transferred or the Bank has transferred substantially all the risks and rewards of ownership. Investments of the Bank are classifed into the following categories:
a) Held for trading
These represent securities acquired with the intention to trade by taking advantage of short-term market / interest rate movements. These securities are disposed of within 90 days from the date of their acquisition. These are marked to market and surplus / defcit arising on revaluation of ‘held for trading’ investments is taken to proft and loss account in accordance with the requirements prescribed by SBP.
page 58 b) Held to maturity
Investments with fxed maturity, where management has both the intention and the ability to hold to maturity, are classifed as held to maturity. Subsequent to initial recognition at cost, these investments are measured at amortized cost, less provision for impairment in value, if any. Amortized cost is calculated taking into account efective interest rate method. Proft on held to maturity investments is recognized on a time proportion basis taking into account the efective yield on the investments.
Premium or discount on acquisition of held to maturity investments is amortized through proft and loss account over the remaining period till maturity.
c) Available-for-sale
Investments which may be sold in response to needs for liquidity or changes in interest rates, exchange rates or equity prices are classifed as available for sale. Available-for-sale investments are initially recognized at cost and subsequently measured at fair value. Proft on available-for-sale investments is recognized on a time proportion basis taking into account the efective yield on the investments.
The surplus / (defcit) arising on revaluation of available for sale investments is kept in "surplus/(defcit) on revaluation of assets" through statement of comprehensive income. The surplus/(defcit) arising on these investments is taken to proft and loss account, when actually realized upon disposal of the investment.
5.3 Advances
Advances are stated net of provision for non-performing advances. The outstanding principal and mark-up of the loans and advances, payments against which are overdue for 30 days or more are classifed as non-performing loans (NPLs). The unrealized interest / proft / mark-up / service charges on NPLs is suspended and credited to interest suspense account. Further the NPLs are divided into following categories:
a) Other assets especially mentioned These are advances in arrears (payments/instalments overdue) for 30 days or more but less than 60 days.
b) Substandard These are advances in arrears (payments/instalments overdue) for 60 days or more but less than 90 days.
c) Doubtful These are advances in arrears (payments/instalments overdue) for 90 days or more but less than 180 days.
d) Loss These are advances in arrears (payments/instalments overdue) for 180 days or more.
In addition the Bank maintains a Watch List of all accounts overdue for 5-29 days. However, such accounts are not treated as non-performing for the purpose of classifcation/ provisioning.
In accordance with the Regulations, the Bank maintains specifc provision of outstanding principal net of cash collaterals and Gold (ornaments and bullion) realizable without recourse to a Court of Law at the following rates:
Other assets especially mentioned Nil Substandard 25% of outstanding principal net of cash collaterals Doubtful 50% of outstanding principal net of cash collaterals Loss 100% of outstanding principal net of cash collaterals
page 59 In addition to above, a general provision is made equivalent to 1.5% (2015: 1%) of the net outstanding balance (advances net of specifc provisions) in accordance with the requirement of the Regulations.
General and specifc provisions are charged to the proft and loss account in the period in which they occur.
Non-performing advances are written of one month after the loan is classifed as “Loss”. However, the Bank continues its eforts for recovery of the written of balances.
5.4 Operating fixed assets
a) Property and equipment
Property and equipment are stated at cost less accumulated depreciation and accumulated impairment losses, if any. Cost includes expenditure that is directly attributable to the acquisition of the asset and the costs of dismantling and removing the items and restoring on which they are located, if any.
Depreciation is charged on the straight line method at rates specifed note 10.2 to the fnancial statements, so as to write of the cost of assets over their estimated useful lives.
Full month's depreciation is charged in the month of addition while no depreciation is charged in the month of deletion.
Subsequent costs are included in the assets carrying amount when it is probable that future economic benefts associated with the item will fow to the Bank and the cost of the item can be measured reliably. Carrying amount of the replaced part is derecognized. All other repair and maintenance are charged to income during the year.
Gains or losses on disposal of an item of property and equipment are determined by comparing the proceeds from disposal with the carrying amounts. Gains are recognized within "other income" while losses are recognized in administrative expenses in the proft and loss account.
b) Capital work-in-progress
Capital work-in-progress is stated at cost less impairment losses, if any.
c) Intangible assets
An intangible asset is recognized if it is probable that the future economic benefts that are attributable to the asset will fow to the Bank and that the cost of such asset can also be measured reliably. These are stated at cost less accumulated amortization and impairment losses, if any.
Intangible assets comprise of computer software and related applications. Intangible assets are amortized over their estimated useful lives at rate specifed in note 10.3 to the fnancial statements. Subsequent expenditure is capitalized only when it increases the future economic beneft embodied in the specifc asset to which it relates. All other expenditure is recognized in proft and loss account as incurred.
5.5 Deposits
Deposits are initially recorded at the amount of proceeds received. Mark-up accrued on deposits, if any, is recognized separately as part of other liabilities and is charged to the proft and loss account over the period.
page 60 5.6 Taxation
Income tax on the proft or loss for the year comprises current and deferred tax. Income tax is recognized in the proft and loss account, except to the extent that it relates to items recognized directly in other comprehensive income or below equity, its related tax is recognized in other comprehensive income or below equity.
The Bank takes into account the current income tax law and decisions taken by the taxation authorities. Those amounts are shown as contingent liabilities wherein, the Bank's views difer from the views taken by the taxation authorities at the assessment stage and where the Bank considers that its view on items of material nature is in accordance with law.
a) Current
Current tax is the tax due on the taxable income for the year, using tax rates enacted or substantively enacted at the reporting date, taking into account tax credits, rebates and tax losses, if any, and any adjustment to tax payable in respect of previous years.
b) Deferred
Deferred tax is accounted for on all major taxable temporary diferences between the carrying amounts of assets and their taxation base. A deferred tax asset is recognized only to the extent that it is probable that future taxable profts will be available against which the asset can be utilized. Deferred tax assets are reduced to the extent that it is no longer probable that the related tax beneft will be realized. At each balance sheet date, the Bank reassesses the carrying and the unrecognized amount of deferred tax assets.
Deferred tax assets and liabilities are calculated at the rate that are expected to apply to the period when the asset is realized or the liability is settled, based on the tax rates (and tax laws) that have been enacted or substantively enacted by the balance sheet date.
5.7 Staff retirement benefits
a) Provident fund
The Bank participates in a defned contribution provident fund for its eligible employees. Monthly contributions are made by the Bank and its employees at rate of 10% of basic salary.
b) Gratuity
The Bank maintains provision of gratuity for all its contractual employees, according to the agreement signed with HRSG Outsourcing (Pvt) Limited, an outsourcing company. Gratuity equivalent to one month's last drawn basic salary for each completed year of service is paid to outgoing employees with at least 1 year of past service rendered.
5.8 Reserves
a) Statutory reserve
In compliance with the related regulatory requirements, the Bank is required to maintain statutory reserve to which an appropriation equivalent to 20% of the proft after tax is required to be made till such time the reserve fund equals the paid up capital of the Bank. However, thereafter, the contribution is to be reduced to 5% of the proft after tax.
page 61 b) Depositor's protection fund
The Bank is required under the Microfnance Institutions Ordinance, 2001, to contribute 5% of annual after tax proft and proft earned on investments of the fund to be credited to depositors protection fund for the purpose of providing security or guarantee to persons depositing money in the Bank.
c) Cash reserve
In compliance with the related regulatory requirements, the Bank is required to maintain a cash reserve equivalent to not less than 5% of its deposits (including demand deposits and time deposits with tenor of less than 1 year) in a current account opened with the State Bank or its agent.
d) Statutory liquidity requirement
In compliance with the related regulatory requirements, the Bank is required to maintain liquidity equivalent to at least 10% of its total demand liabilities and time liabilities with tenor of less than one year in form of liquid assets i.e. cash, gold, unencumbered treasury bills, Pakistan Investment Bonds and Government of Pakistan sukuk bonds. Treasury bills and Pakistan Investment Bonds held under depositor protection fund are excluded for the purpose of determining liquidity.
5.9 Provisions
A provision is recognized when, and only when, the Bank has a present obligation (legal or constructive) as a result of a past event, it is probable that an outfow of resources embodying economic benefts will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.
5.10 Foreign currency transactions
The fnancial statements are presented in Pakistani Rupee, which is the Bank's functional currency. Transactions in foreign currencies are translated into Pak Rupee at exchange rate on the date of transaction. All monetary assets and liabilities in foreign currencies are translated into Pak Rupee at the rate of exchange approximating those ruling at the balance sheet date. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at the year end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognized in proft and loss account.
5.11 Revenue recognition
a) Markup / income on advances
Markup / income / return / service charges on advances is recognized on accrual / time proportion basis using efective interest rate method at the Bank's prevailing interest rates for the loan products. Markup/ income on advances is collected with loan instalments. Due but unpaid service charges / income are accrued on overdue advances for period up to 30 days. After 30 days, overdue advances are classifed as non-performing and recognition of unpaid service charges / income ceases. Further, accrued markup on non-performing advances are reversed and credited to suspense account. Subsequently, markup recoverable on non-performing advances is recognized on a receipt basis in accordance with the requirements of the Regulations.
b) Income from investments
Markup / income on investments is recognized on accrual / time proportion basis using the efective interest method. Where debt securities are purchased at premium or discount, those premiums / discounts are amortized through proft and loss account over the remaining period of maturity.
page 62 c) Fee, commission and brokerage income
Fee, commission and brokerage income is recognized when the related services are rendered.
d) Income from inter bank deposits
Income from inter bank deposits in saving accounts is recognized in the proft and loss account as it accrues using the efective interest method .
e) Gain/ loss on sale of operating fixed assets
Gain on sale of operating fxed asset s ar e recognize d under other income in the proft and loss account.
Loss on sale of operating fxed assets are recognized under administrative expenses in the proft and loss account.
f) Gain/ loss on sale of investments
Gains and losses on sale of investments are recognised in the proft and loss account.
5.12 Financial instruments
Financial assets and liabilities are recognized when the Bank becomes a party to the contractual provisions of the instrument. These are derecognized when the Bank ceases to be the party to the contractual provisions of the instrument.
All fnancial assets and liabilities are initially measured at cost which is the fair value of the consideration given and received respectively. These fnancial assets and liabilities are subsequently measured at fair value, amortized cost or historical cost, as the case may be.
a) Financial assets
Financial assets are cash and balances with SBP and NBP, balances with other banks/NBFls/MFBs, lending to fnancial institutions, investments, advances and other receivables. Advances are stated at their nominal value as reduced by appropriate provisions against non-performing advances, while other fnancial assets excluding investments are stated at cost. Investments classifed as held for trading and available for sale are valued at year end prices and investments classifed as held to maturity are stated at amortized cost.
b) Financial liabilities
Financial liabilities are classifed according to the substance of the contractual arrangement entered into. Financial liabilities include deposit and other accounts and other liabilities which are stated at their nominal value. Financial charges are accounted for on accrual basis.
Any gain or loss on the recognition and derecognition of the fnancial assets and liabilities is included in the net proft and loss for the year in which it arises.
5.13 Off-setting
Financial assets and fnancial liabilities and tax assets and tax liabilities are only of-set and the net amount is reported in the fnancial statements when there is a legally enforceable right to set of the recognized amount and the Bank intends either to settle on net basis or to realize the assets and to settle the liabilities simultaneously. Income and expense items of such assets and liabilities are also of-set and the net amount is reported in the fnancial statements.
page 63 5.14 Borrowing costs
Borrowing costs are recognized as an expense in the period in which they are incurred except where such costs relate to the acquisition, construction or production of a qualifying asset in which case such costs are capitalized as part of the cost of that asset. Borrowing cost includes exchange diferences arising from foreign currency borrowings to the extent these are regarded as an adjustment to borrowing costs.
5.15 Mark-up bearing borrowings
Mark-up bearing borrowings are recognized initially at cost being the fair value of consideration received, less attributable transaction costs. Subsequent to initial recognition mark-up bearing borrowings are stated at original cost less subsequent repayments.
5.16 Grants
The grant related to an asset is recognized in the balance sheet initially as deferred income when grant is received or there is reasonable assurance that it will be received and that the Bank will comply with the conditions attached to it. Grants that compensate the Bank for expenses incurred are recognized as revenue in the proft and loss account on a systematic basis in the same periods in which the expenses are incurred. Grants that compensate the Bank for the cost of an asset are recognized in the proft and loss account as other operating income on a systematic basis over the useful life of the asset.
5.17 Earnings per share
The Bank presents basic and diluted earnings per share (EPS) for its shareholders. Basic EPS is calculated by dividing the proft or loss attributable to ordinary shareholders of the Bank by the weighted average number of ordinary shares outstanding during the year. Diluted EPS, if any is determined by adjusting the proft or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding for the efects of all dilutive potential ordinary shares. There were no dilutive potential ordinary shares in issue at December 31, 2016.
5.18 Standards, interpretations and amendments to approved accounting standards that are not yet effective
a) The following amendments and interpretations to published accounting standards were efective during the year and have been adopted by the Bank:
Efective date (annual periods beginning on or after)
IFRS 5 Non-current Assets Held for Sale and Discontinued Operations (Amendments) January 1, 2016 IFRS 11 Joint Arrangements (Amendments) J anuary 1, 2016 IAS 1 Presentation of fnancial statements (Amendments) January 1, 2016 IAS 16 Property, plant and equipment (Amendments) January 1, 2016 IAS 19 Employee Benefts (Amendments) January 1, 2016 IAS 27 Separate fnancial statements (Amendments) January 1, 2016 IAS 38 Intangible Assets (Amendments) January 1, 2016
The management considers that adoption of above amendments and interpretations had no material impact on the Bank's fnancial statements other than in presentation/disclosure.
b) Following standard has been issued by the International Accounting Standards Board (IASB), which is yet to be notifed by the Securities and Exchange Commission of Pakistan (SECP) for the purpose of its applicability in Pakistan:
page 64 Efective date (annual periods beginning on or after)
IFRS 1 July 1, 2009 First-Time Adoption of International Financial Reporting Standards (Amendments) IFRS 14 Regulatory Deferral Accounts January 1, 2016 c) Following standards and amendments to published accounting standards will be efective in future periods and have not been early adopted by the Bank.
Efective date (annual periods beginning on or after)
IFRS 1 First-time Adoption of International Financial Reporting Standards January 1, 2018 (Amendments) IFRS 2 Share-based payment (Amendments) January 1, 2018 IFRS 4 Insurance Contracts January 1, 2018 IFRS 7 Financial Instruments (Amendments) January 1, 2018 IFRS 12 Disclosure of Interests in Other Entities (Amendments) January 1, 2017 IFRS 15 Revenue from Contracts with Customers January 1, 2018 IFRS 16 Leases January 1, 2019 IAS 12 Income taxes (Amendments) January 1, 2017 IAS 39 Financial Instruments: Recognition and Measurement (Amendments) January 1, 2018 IAS 40 Investment property (Amendments) July 1, 2018
The management anticipates that adoption of above standards and amendments in future periods will have no material impact on the Bank's fnancial statements other than in presentation/disclosure.
page 65 2016 2015 (Rupees) (Rupees) 6. CASH AND BALANCES WITH SBP AND NBP
Cash in hand 2 49,860,266 9 5,892,067 Balance with State Bank of Pakistan (SBP) - note 6.1 466,316,546 1 70,685,960 Balance with National Bank of Pakistan (NBP) 31,753,200 - 747,930,012 2 66,578,027
6.1 This includes balance held with SBP in a current account to comply with the requirement of maintaining minimum balance equivalent to 5% (2015: 5%) of the Bank’s demand deposits and time deposits with tenor of less than one year.
2016 2015 (Rupees) (Rupees) 7. BALANCES WITH OTHER BANKS/NBFIs/MFBs
In Pakistan
- on current accounts - Local currency - - - on saving accounts - Local currency - note 7.1 1,442,891,348 3 02,370,277 - on term deposits accounts - Local currency - note 7.2 3,300,000,000 2,100,000,000 4,742,891,348 2,402,370,277 - on current accounts - Foreign currency - note 7.3 - -
4,742,891,348 2,402,370,277
7.1 These carry markup ranging from 4% to 6.5% (2015: 4% to 7.15%) per annum. 7.2 These carry markup ranging from 6% to 6.25% (2015: 6.6% to 7.45%) per annum. 7.3 This account is being maintained with United Bank Limited for the purpose of Home Remittance under Pakistan remittance initiative as approved by the SBP. 2016 2015 (Rupees) (Rupees) 8. INVESTMENTS - net of provisions
Federal Government securities - available for sale
Pakistan Investment Bonds - 1 24,622,647 Market treasury bill - note 8.1 1,495,053,230 -
Surplus / (defcit) on revaluation of available for sale investments - note 8.2 - 6 49,319 1,495,053,230 1 25,271,966
8.1 These carry markup at 5.85% and 5.90% per annum maturing on January 19, 2017 and February 2, 2017 respectively.
2016 2015 (Rupees) (Rupees) 8.2 Particulars of surplus / (defcit) on revaluation of available for sale investments: Balance at the beginning 649,319 (682,289) Transferred (from) / to revaluation of assets (649,319) 1,331,608 Balance at the end - 649,319
page 66 9. ADVANCES - net of provisions 2016 2015 Loans Amount Loans Amount outstanding outstanding outstanding outstanding (Number) (Rupees) (Number) (Rupees) Micro credit -Secured against gold 1 2 ,069 9 55,190,655 8,583 574,490,934 -Unsecured 7 9 , 6 78 4 ,978,771,502 1 8 , 642 775,824,456
9 1 , 7 47 5,933,962,157 2 7 , 225 1,350,315,390
Less: Provision held Specifc provision 41 4 6 3 ,325 - - General provision - note 9.1 7 9 , 6 7 8 7 4 , 674,623 1 8 , 6 4 2 7,758,245 7 9 , 7 1 9 7 5 , 137,948 1 8 ,6 4 2 7,758,245 Advances - net of provisions 5 , 8 58,824,209 1,342,557,145
9.1
9.2 Particulars of non-performing advances
2016 2015 Category of Amount Provision Provision Amount Provision Provision classifcation outstanding required held outstanding required held ------Rupees------Rupees------OAEM 5 56,04 0 - - - - - Sub-standard 1,021,73 7 4 1,184 4 1 , 1 8 4 - - - Doubtful 512,07 0 1 88,735 1 8 8 , 7 3 5 - - - Loss 2 3 3 ,4 0 6 2 33,406 2 3 3 , 4 0 6 - - - 2 ,3 2 3 ,25 3 4 63,325 4 6 3 , 3 2 5 - - -
9.3 Particulars of provision against non-performing advances 2016 2015
Specifc General Total Specifc General Total
------Rupees------Rupees------
Opening balance - 7,758,24 5 7 ,758,245 1,7 9 1 2,588,052 2 ,589,843 Charge for the year 694,355 66,916,37 8 6 7,610,733 - 5,170, 1 9 3 5 , 170,193 Amounts written of ( 231,030) - ( 2 31,030) - - - Reversals - - - ( 1 , 7 9 1 ) - (1,791) Closing balance 4 6 3,325 74,674,623 7 5,137,948 - 7 , 7 5 8 , 2 4 5 7 ,758,245
page 67 2016 2015 10. OPERATING FIXED ASSETS (Rupees) (Rupees) Capital Work in progress - note 10.1 4,915,860 2,283,480 Property and equipment - note 10.2 2 7 1 , 0 20,288 195,696,168 Intangible assets - note 10.3 1 1 2 , 5 11,373 9 1 , 2 5 5 ,190 3 8 8 , 4 47,521 2 8 9 , 2 3 4,838
10.1 Capital Work in progress
Civil works 4 , 9 1 5 ,860 2 , 2 8 3 , 480 Equipments - - Advances to suppliers and contractors - - Others - - 4 , 9 1 5 ,860 2 , 2 8 3 , 480
page 68 10.2 Property and equipment
Cost
Adjustments Disposals/ At At Additions January 01 /transfers write ofs December 31
------Rupees ------2016 Furniture and fxture 5 5,736,451 1 5 ,252,634 - ( 2,243,599) 6 8,745,486 Electrical, ofce and computer equipment 2 16,147,977 1 2 2,751,362 - ( 2 , 4 05,644) 3 36,493,695 Vehicles 2 3,138,774 1 4 ,028,604 - ( 1 3 ,031,895) 2 4,135,483 Leasehold improvements 6 8,859,833 1 3 , 1 80,834 ( 1 1 7 , 1 2 0) ( 2 4 ,690) 8 1,898,857 3 63,883,035 1 6 5 , 213,434 ( 1 1 7 , 1 2 0) ( 1 7 ,705,828) 5 11,273,521
2015 Furniture and fxture 4 2,167,324 1 3 ,7 5 3,207 - (184,080) 5 5,736,451 Electrical, ofce and computer equipment 1 50,935,990 6 5 ,4 2 6,147 ( 2 2 , 8 7 8 ) (191,282) 2 16,147,977 Vehicles 2 4,233,222 1 , 0 5 2 ,936 - ( 2,147,384) 2 3,138,774 Leasehold improvements 5 9,778,113 1 0 ,6 8 5,253 - ( 1,603,533) 6 8,859,833 2 7 7,114,649 9 0 ,9 1 7,543 ( 2 2 , 8 7 8 ) ( 4 , 1 2 6,279) 3 6 3 ,8 83,035
10.2.1 The cost of fully depreciated assets still in use is Rs. 87,619,901 (2015: Rs. 35,838,075) 10.2.2 Detail of disposals of operating fxed assets
Particulars of assets Original Accumulated Book Sale cost depreciation value proceeds Vehicles Mercedez Benz 9 ,194,954 9 ,194 , 9 5 3 1 2 ,696,189 Honda City 1 ,691,457 1 ,691,456 1 490,799 Honda Civic 2 ,145,484 1 ,984,57 3 160,911 630,000 1 3,031,895 1 2,870,98 2 1 60,913 3 ,816 , 9 8 8
page 69
Depreciation Net book value
At Charge for Adjustments Disposals/ At At Rate per annum January 01 the year /transfers write ofs December 31 December 31
------Rupees ------%age
1 8,644,056 1 2,869,074 - ( 1,201,320) 3 0,311,810 3 8 ,433,676 20%
9 7,149,094 5 2,713,269 - ( 2,169,202) 147,693,161 1 8 8,800,534 10-33% 1 7,924,711 4 ,951,904 - (12,870,982) 1 0,005,633 1 4 ,129,850 25% 3 4 , 469,006 1 7 , 7 98,049 ( 5 , 3 9 4 ) ( 1 9 , 0 32) 5 2 , 2 42,629 2 9 , 6 5 6,228 25% 1 6 8 ,186,867 8 8 , 3 32,296 ( 5 , 3 9 4 ) ( 1 6 , 2 60,536) 2 4 0 , 253,233 2 7 1 , 0 20,288
9 , 8 35,521 8 , 8 8 5,943 - ( 7 7 , 4 08) 1 8 , 6 44,056 3 7 , 0 9 2,395 20%
6 2 , 262,866 3 4 , 9 87,139 (10,101) ( 9 0 , 8 10) 9 7 , 1 49,094 1 1 8,998,883 10-33% 1 3 , 523,411 5 , 8 7 7,626 - ( 1 , 4 7 6,326) 1 7 , 9 24,711 5 , 2 14,063 25% 1 9 , 652,182 1 5 , 6 67,312 ( 8 5 0 ,488) 3 4 , 4 69,006 3 4,390,827 25% 1 0 5 ,273,980 6 5 , 4 18,020 ( 1 0 ,1 0 1 ) ( 2 , 4 9 5,032) 1 6 8 , 186,867 1 95,696,168
Mode of Particulars of disposal buyer
HR Policy Ghazanfar Azaam (CEO) HR Policy Samiha Ali Zahid (Head HR) HR Policy Kamran Adeel (Ex - CFO)
page 70 page 71
10.3 Intangible assets
Cost Amortization Net book value
At Disposals/ At At Charge for Disposals/ At At Rate per Additions January 01 write ofs December 31 January 01 the year write ofs December 31 December 31 annum
------Rupees ------Rupees ------%age
2016 Software License 1 2 8 , 686,702 5 4,154,115 - 1 8 2 ,840,817 3 7 ,431,512 3 2 , 8 9 7,932 - 7 0 , 3 29,444 1 12,511,373 10-33% 1 2 8 , 686,702 5 4,154,115 - 1 8 2 ,840,817 3 7 ,431,512 3 2 , 8 9 7,932 - 7 0 , 3 29,444 1 12,511,373
2015 Software License 6 9 ,2 4 1,006 5 9 ,4 45,696 - 1 2 8 ,686,702 2 0 ,120,328 1 7 , 3 1 1 ,184 - 3 7 , 4 31,512 9 1 , 2 55,190 10-33% 6 9 ,2 4 1,006 5 9 ,4 45,696 - 1 2 8 ,686,702 2 0 ,120,328 1 7 , 3 1 1 ,184 - 3 7 , 4 31,512 9 1 , 2 55,190
10.3.1 This includes Temenos - 24 (R-10) software with carrying value of Rs. 31,611,207 (2015:34,574,272) and remaining amortization period of 4.9 (2015:5.9) years. 2016 2015 (Rupees) (Rupees) 11. OTHER ASSETS
Income / Markup accrued 6 52,412,70 3 135,934,872 Advances, deposits and prepayments 57,985,540 52,733,421 Advance taxation - net - note 11.1 30,342,83 2 41,646,995 Receivable from related parties - note 11.2 1 05,93 5 9,474,513 Inventory/ printed stationary 9 ,002,29 9 4,609,785 Receivable against Insurance premium - note 11.3 7 4 , 3 8 9 ,68 8 1,314,794 Others 2 9 , 1 2 2 ,426 2 4 ,3 7 4 , 0 21 8 5 3 , 3 6 1,423 2 7 0 , 0 8 8 ,4 01
11.1 Advance taxation - net - note 11.1
Opening balance 4 1 , 6 4 6 ,995 2 5 , 8 3 4 ,0 1 1 Tax paid 4 5 , 6 1 7 ,739 1 5 , 8 1 2 ,9 8 4 Provision for taxation ( 5 6 , 9 2 1,902) - Closing balance 3 0 , 3 4 2 ,832 4 1 , 6 4 6 , 9 95
11.2 Receivable from related parties
Pakistan Mobile Communication Limited - 9 , 3 8 6 ,3 5 3 Business Communication System (private) Limited 1 0 5 , 9 3 5 8 8 , 1 6 0 1 0 5 , 9 3 5 9 , 4 7 4 ,5 1 3
11.3 This represents the amount receivable from SBP in respect of insurance premium paid by the Bank for livestock and crop loans under AC&MFD Circular No. 1 of 2013 dated November 1, 2013.
12. DEFERRED TAX ASSET
Deferred tax asset arising on account of deductible temporary diferences on: Provision against non-performing advances 2 2 , 5 4 1 ,384 2 , 3 2 7 , 4 7 3 Precommencement expenditure - 4 ,0 1 5 , 7 0 1 Unused tax losses 7 5 , 4 7 0 ,589 1 9 4 , 4 1 2 , 599 Unused tax credit 1 1 7 , 9 0 4 1 1 7 , 9 0 4 Provision for gratuity 2 , 8 6 4 , 304 1 , 8 1 8 , 0 0 1 Alternate Corporate Tax 5 6 , 9 2 1 ,902 - 1 5 7 , 9 1 6,083 2 0 2 , 6 9 1 , 678 Deferred tax liability arising on account of taxable temporary diferences on: Operating fxed assets ( 1 0 , 5 6 6,396) ( 8 , 1 8 7 ,0 0 4) 1 4 7 , 3 4 9,687 1 9 4 , 5 0 4 ,6 74 Surplus on revaluation of available for sale investments - ( 4 8 , 6 9 9 ) 1 4 7 , 3 4 9,687 1 9 4 , 4 5 5 ,9 75
12.1 Deferred tax asset has been recognised based on the premise that sufcient taxable profts will be available in future years against which unused tax losses amounting to Rs.251.57 million (2015: Rs. 641.06 million) can be utilised.
page 72 13. DEPOSITS AND OTHER ACCOUNTS
2016 2016 2015 2015 Note (Number) (Rupees) (Number) (Rupees) Time Liabilities:
Term deposits 1 ,265 2 , 3 44,357,034 217 1 8 7 , 1 91,132 Demand Liabilities: Savings deposits 3 7 , 8 08 2 , 5 2 6,149,947 3 0,4 2 1 9 5 5 , 0 04,926 Current deposits 9 8 , 5 49 1 , 3 1 7,006,773 1 7,7 5 9 4 7 3 , 8 86,074 Branchless deposits 7 ,983,760 4 , 1 1 8,848,7 1 3 3 ,137,203 1 , 5 8 1 ,229,305 8,120,117 7 , 9 6 2,005,433 3 ,1 8 5 , 3 8 3 3 , 0 1 0 ,120,305 8 ,121,382 1 0 , 3 06,362,467 3 ,1 8 5 , 6 0 0 3 ,1 9 7 , 311,437
13.1 Particulars of deposits by ownership
Individual depositors 8 ,050,538 5 , 6 8 6,390, 2 5 1 3,126,6 9 1 2,177,843,422 Institutional depositors a) Corporations/frms etc. 1 , 0 3 1 1 , 8 3 4,000, 2 4 2 3 4 0 484,441,189 b) Banks & fnancial institutions 3 3 1 , 9 4 1,623, 6 7 5 1 15,462,664 Retailers 6 9 , 3 30 684,321 , 0 3 7 58,1 5 8 432,200,784 Franchisees 4 2 9 160,025 , 1 6 6 3 8 9 82,935,548 Customer care centers 2 1 2 , 0 9 6 2 1 4,427,830 8 ,121,382 1 0 , 3 06,362,467 3 , 1 8 5 , 6 0 0 3 ,1 9 7 , 311,437 -16-
2016 2015 (Rupees) (Rupees) 14. Other Liabilities
Mark-up/ Interest payable 53,241,065 6,128,231 Accrued expenses 8 5,538,644 51,829,618 Payable to related parties - note 14.1 1 ,316,600,081 3,937,163 Taxes and levies withheld 83,654,788 49,448,457 Payable to suppliers 63,492,751 240,304,527 Bills collected for settlement through NADRA 3 27,679,666 60,975,033 Uncollected remittances 2 59,244,032 136,305,069 Bills payable 62,307,554 3 3 , 7 5 5,730 Provision for gratuity - note 14.2 9 ,547,681 6 , 0 6 0,004 Others 4 35,695,645 104,165,514 2 ,697,001,907 6 9 2 , 9 09,346
14.1 Payable to related parties
PMCL 25,537,867 - Global Telecom Holding S.A.E - note 14.1.1 1,288,580,091 - LinkdotNet Telecom Limited - 1,45 5 , 0 4 0 Oracap - GTH 2,482,123 2,48 2 , 1 2 3 1,316,600,081 3 ,937,163
page 73 14.1.1 This represents the amount received from PMCL, associated company under a tripartite arrangement with PMCL and Global Telecom Holding S.A.E., the holding company.
14.2 Provision for gratuity
Opening balance 6 ,060,004 3,480,312 Charge for the year 5 , 0 2 4 ,139 4,730,073 Payment during the year ( 1 , 5 3 6 ,462) ( 2 , 1 5 0 , 3 8 1) Closing balance 9 , 5 4 7 ,681 6 , 0 6 0 , 0 0 4
15. SHARE CAPITAL
Authorized Capital
2016 2015 Numbers Numbers 150, 0 0 0 , 000 15 0 ,0 0 0 , 0 0 0 Ordinary shares of Rs. 10 each. 1 , 5 0 0 ,000,000 1 ,500,000,000
Issued, subscribed and paid-up capital Ordinary shares 145,17 5,360 145,17 5,360 Fully paid in cash of Rs. 10 each. 1 , 4 5 1 ,753,600 1 ,451,753,600
15.1 Global Telecom Holding S.A.E. is the holding company controlling 145,175,355 i.e. 99.99% shares (2015: 99.99%) of the Bank.
16. SURPLUS ON REVALUATION OF ASSETS
Federal government securities- available for sale investments - 6 0 0 ,620
17. MEMORANDUM / OFF-BALANCE SHEET ITEMS 17.1 Contingencies There are no contingencies at the year end (2015: Nil).
17.2 Commitments: Commitments against contracts - 4,558,902
2016 2015 (Rupees) (Rupees) 18. MARK-UP/RETURN/INTEREST EARNED
Interest / Mark-up on; - Advances 995,539,799 2 1 2 , 595,891 - Government securities 71,075,993 7 2 , 9 59,033 - On Deposit accounts/placements with other banks/fnancial institution 174,454,293 6 7 , 7 52,905 1 ,241,070,085 3 5 3 , 307,829
page 74 2016 2015 (Rupees) (Rupees) 19. MARK-UP/RETURN/INTEREST EXPENSED
On deposits 255,330,339 5 4 , 7 1 0 , 5 77
20. FEE, COMMISSION AND BROKERAGE INCOME - NET
Income from branchless banking - note 20.1 5 2 8 , 8 11,396 482,684,687 Loan processing fee 1 4 3 , 6 35,710 3 0 , 8 9 5 , 9 03 Others 31,408,617 1 7 , 5 6 4 , 3 01 7 0 3 , 8 55,723 5 3 1 , 1 4 4 ,8 91
20.1 Income from branchless Branchless banking income - note 20.2 3 , 7 4 6 ,551,522 2 ,6 0 2 , 6 1 2 ,130 Commission to retailer / franchisee ( 2 , 0 9 3,138,008) ( 1 , 4 1 9 , 7 0 1,987) Commission to related party ( 1 , 1 2 4,602,118) ( 7 0 0 , 2 2 5 ,456) 5 2 8 , 8 11,396 4 8 2 , 6 8 4 , 687
20.2 This represents the income from branchless banking operations (Jazz cash formerly Mobicash) carried out by the Bank together with Pakistan Mobile Communication Limited (PMCL) through agency agreement under SBP Branchless Banking Regulations. As per the agreement, Income from Mobicash (Net of Agents commission) is shared between the Bank and PMCL in the ratio of 30:70 respectively. 2016 2015 (Rupees) (Rupees) 21. OTHER INCOME Gain on disposal of fxed assets 3 ,660,355 - 22. ADMINISTRATIVE EXPENSES
Salaries, allowances etc. 598,678,628 384,024,262 Contribution to defned contribution plan 2 2,669,055 14,573,916 Provision for gratuity 5 ,024,139 4,730,073 Training / Capacity building 6 ,323,141 5,728,024 Depreciation - note 10.2 88,332,296 65,418,020 Amortization - note 10.3 32,897,932 17,311,184 Travel and transportation 18,173,194 8 ,095,076 Rent, taxes, insurance, electricity, etc. 98,080,633 61,779,883 Loss on sale of fxed assets 1 ,197,466 87,247 Stationary and printing 29,962,201 33,983,511 Communications 11,268,723 8,378,497 Repair and maintenance - General 8 ,278,815 6,806,912 Repair and maintenance - Vehicle 8 90,239 1,074,652 Legal and professional charges 1 ,480,989 2,549,485 Auditors' remuneration - note 22.1 1 ,025,000 912,342 Bank charges 47,070,224 17,973,201 IT equipment and software maintenance 96,118,044 1 07,353,797 Security 3 8,580,161 2 6,377,545 NADRA verifcation charges 1 19,723,436 2 09,842,026 Janitorial services 18,351,251 1 5,782,310 Ofce supplies 7 ,908,347 2,408,848 Entertainment 10,074,619 5 ,670,890 G2P Project Cost 6 ,234,346 4 ,864,060 Advestisement and publicity 3 , 3 0 7 ,248 1 ,321,176 Others 15,531,225 1 1,094,767 1 , 2 8 7 ,181,352 1 ,018,141,704 page 75 22.1 Auditors' remuneration
Audit fee 6 75,000 6 75,000 Fee for audit of provident, pension, gratuity and other funds - - Special certifcations 3 00,000 1 75,000 Tax services - - Out of pocket expenses 5 0 , 0 00 6 2 , 3 42 1 , 0 2 5 ,000 9 1 2 , 3 42
2016 2 0 1 5 (Rupees) (Rupees) 23. OTHER CHARGES
Penalties imposed by the State Bank of Pakistan - note 23.1 3 ,629,020 9 8 , 0 0 0 Others - - 3 , 6 2 9,020 98,000
23.1 The charge for the year represents the penalties paid to the State Bank of Pakistan in the year 2016 against SBP thematic inspection on portfolio review, Branchless banking, Statutory reserve defcit as at December 31, 2015 and incorrect reporting of data to SBP.
24. TAXATION For the year Current 56,921,902 - Deferred 43,178,379 ( 155,251,133) For the prior years Current - - Deferred 3 , 9 7 6,608 ( 1 , 1 3 9 ,2 0 3 ) 104,076,889 (156,390,336)
24.1 Relationship between tax expense and accounting loss
Proft / (Loss) before taxation 334,834,719 (193,667,754) Tax at applicable tax rate of 31% percent (2015: 32% percent) 31% 32% 1 0 3 ,798,763 ( 6 1 , 9 7 3 ,6 8 1 ) Efect of: - Deferred tax asset not recognized - - - Prior years 5 2 0 ,6 5 4 - Permanent diferences 1 , 1 2 4,996 3 1 ,3 6 0 - Unused tax credits ( 1 1 7 ,9 0 4 ) - Unused tax losses ( 10 6 , 3 6 0 ,3 8 5) - Tax rate changes ( 3 9 5 ,881) 1 1 , 5 1 3 ,4 1 3 - Others ( 4 5 0 ,989) ( 3 ,7 9 2 ) 104,076,889 (156,390,336)
page 76 24.2 The provision of tax is recorded as Alternative Coporate Tax as specifed in section 113(C) of the Income Tax Ordinance, 2001 (Ordinance).
24.3 Change in applicable income tax rate from 32% to 31% is due to change in relevant Income tax laws.
25. NUMBER OF EMPLOYEES 2016 2015
Credit / Sales Banking / Credit / Sales Banking / Total Total Staf Support Staf Support
Permanent 2 31 2 91 522 1 2 1 2 56 3 7 7 Contractual / temporary 1 75 5 4 229 8 3 1 60 2 4 3 4 06 3 45 751 2 0 4 4 16 6 2 0
2016 2015 (Number) (Number) 26. NUMBER OF BRANCHES/SERVICE CENTRES
Beginning of the year 41 41 Opened during the year -Branches 5 - -Service Centers/Booth 8 - -Closed / Merged during the year (3) - At the end of the year 51 41
This includes 35 branches and 16 booths/service centers (2015: 30 and 11)
27. REMUNERATION OF DIRECTORS AND EXECUTIVES
President/Chief Executive Executives 2016 2015 2016 2015 Rupees Rupees Rupees Rupees
Managerial remuneration 1 4,168,940 1 3,482,545 69,417,600 5 1,412,434 Rent and house maintenance 2 70,000 270,000 15,339,503 1 0,997,123 Utilities 1 ,416,900 1 ,348,260 6 ,941,772 5 ,153,259 Relocation allowance - - 5 74,318 280,000 Conveyance allowance - - 1 ,072,111 698,654 Car allowance - - 6 ,380,000 1 ,690,000 Car maintenance 6 13,556 452,556 7 74,134 743,948 Contribution to defned contribution plan 1 ,416,900 1 ,348,260 6 ,863,705 4 ,924,507 Fuel allowance / reimbursements 3 40,608 440,000 1 ,775,072 1 ,606,777 Sales staf incentive - - 4 ,733,972 1 ,562,476 Training compensation - - 3 03,000 135,000 Bonus, Prizes and rewards 7 , 2 98,720 2 , 4 2 0,000 1 8 , 1 8 4 , 224 9 ,435,550 2 5 , 525,624 1 9 , 7 61,621 132,359,411 88,639,728 Number of persons 1 1 63 47
page 77 a) Executive means any employee whose basic salary exceeds Rs. 500,000 (2015: Rs. 500,000) per year. b) The President / Chief Executive Ofcer and certain other executives are provided with free use of the Bank's owned and maintained cars in accordance with their entitlement as per rules of the Bank. c) Amount of Rs.150,000 is reimbursed to Non-Executive Director of the bank on account of attending board meetings as per SBP regulation (2015: Rs. 225,000). 28. EARNING / (LOSS) PER SHARE (RUPEE) 2016 2015 Proft / (Loss) after taxation - Rupees A 2 30,757,830 ( 37,277,418) Weighted average ordinary shares - Numbers B 145,175,360 145,175,360 Proft / (Loss) per share - Rupee A/B 1.59 (0.26)
29. BALANCES AND TRANSACTIONS WITH RELATED PARTIES The Bank is a subsidiary of Global Telecom Holding S.A.E. (GTH) which holds 99.99% share capital of the Bank. Therefore, all subsidiaries and associated undertakings of GTH are related parties of the Bank. Other related parties include directors, key management personnel which inlcude CEO and Head of Departments (HOD's), entities under common directorship. Remuneration to directors and executives is disclosed in note 27 to these fnancial statements. Amounts due from and due to the related party companies are shown in note 11 and 14 to these fnancial statements. All transactions involving related parties are subject to the approval of the Board of Directors. Signifcant transactions with the related parties other than those referred to in the foregoing entered into during the year are as follows: 2016 2015 (Rupees) (Rupees) Transactions with related parties by virtue of common Directorship
Deposit Mobilization Commission Paid 66,426,078 3 1,149,166 Branchless commission (Net of agents commission) 1,058,176,040 6 69,076,290 Expenses incurred on behalf of the Bank by PMCL 38,463,396 9,608,723 Payments made for expenses incurred on behalf the Bank to PMCL 7,766,843 7,377,677 Services availed from LinkDotNet Telecom Limited - 8,262,160 Payments made against defned contribution plan 32,669,154 2 5,541,370 Mark-up/ return/ interest expensed to PMCL 32,768,439 3 ,899,800
Deposits in savings account include an amount of Rs. 501,287,599 (2015: Rs. 282,746,127) of PMCL, whereas the term deposit receipt include an amount of Rs. 50,000,000 placed at a proft rate of 7.5 % per annum (2015: nil) by PMCL.
Transaction with key management personnel
Remuneration, allowances and benefts - note 29.1 42 ,787,864 39, 244,619 29.1 Remuneration, allowances and benefts
Managerial remuneration 36,895,542 33,682,198 Rent and house maintenance 2,202,750 2,182,500 Utilities 3 , 689,572 3,379,921 42,787,864 39,244,619
Deposits in savings account include an amount of Rs. 501,287,599 (2015: Rs. 282,746,127) of PMCL, whereas the term deposit receipt include an amount of Rs. 50,000,000 placed at a proft rate of 7.5 % per annum (2015: nil) by PMCL.
The Bank has not extended fnancing or other microfnance services to members of management, directors or parties related to them.
30. CASH AND CASH EQUIVALENTS Cash an d balances with SBP and NBP - note 6 747,930,012 266,578,027 Balances with other banks/NBFIs/MFBs - note 7 4,742,891,348 2 ,402,370,277 5 ,490,821,360 2 ,668,948,304
page 78 31. FINANCIAL INSTRUMENTS (based on contractual obligation)
Interest/Mark up bearing Over Efective yield/ Up to one year One to fve years fve Sub total interest rate years
% ------Rupees ------31 December 2016 Financial assets Cash and balances with SBP and NBP - - - - Balances with other banks/NBFIs/MFBs 4-6.25 4 ,742,891,348 - - 4 ,742,891,348 Investments 5.85-5.90 1,495,053,230 - - 1 ,495,053,230 Advances 18-38.40 5 ,642,054,414 216,769,795 - 5 ,858,824,209 Other assets - - - - 1 1 , 8 79,998,992 2 1 6,769,795 - 1 2,096,768,787 Financial liabilities Deposits and other accounts 6-12.35 4 , 1 2 6,298,749 7 4 4,208,232 - 4 , 8 7 0,506,981 Other liabilities - - - - - 4 , 1 2 6,298,749 7 4 4,208,232 - 4 ,870,506,981
Of balance sheet fnancial instruments: Commitments - - - - 31 December 2015 Financial assets
Cash and balances with SBP and NBP - - - -
Balances with other banks/NBFIs/MFBs 4-7.45 2 ,402,370,277 - - 2 , 4 0 2,370,277
Investments 11.5 125,271,966 - - 125,271,966
Advances 18-38.40 1 ,342,557,145 - - 1 , 3 4 2,557,145
Other assets - - - -
3 , 8 70,199,388 - - 3,870,199,388 Financial liabilities
Deposits and other accounts 6-12.35 1 , 1 10,794,558 3 1 ,401,500 - 1 ,142,196,058
Other liabilities - - - - -
1 , 1 10,794,558 3 1 , 4 01,500 - 1 , 1 4 2 ,196,058
Of balance sheet fnancial instruments: Commitments - - - -
page 79 Non interest/mark up bearing Total
One to fve Over fve Up to one year Sub total 2015 years years
------Rupees ------
747,930,012 - - 747,930,012 7 47,930,012 - - - - 4 ,742,891,348 - - - - 1 ,495,053,230 - - - - 5,858,824,209 853,361,423 - - 853,361,423 8 53,361,423 1,601,291,435 - - 1,601,291,435 1 3,698,060,222
5 ,435,855,486 - - 5 ,435,855,486 1 0,306,362,467 2 ,680,656,677 1 6,345,230 - 2,697,001,907 2 ,697,001,907 8 ,116,512,163 1 6,345,230 - 8,132,857,393 1 3,003,364,374
- - - - -
266,578,027 - - 266,578,027 2 66,578,027
- - - - 2 ,402,370,277
- - - - 1 25,271,966
- - - - 1 ,342,557,145
274,657,617 - - 274,657,617 2 74,657,617
541,235,644 - - 541,235,644 4 ,411,435,032
2 ,055,115,379 - - 2 ,055,115,379 3,197,311,437
697,039,474 439,088 - 697,478,562 6 97,478,562
2 ,752,154,853 4 39,088 - 2,752,593,941 3 ,894,789,999
4 ,558,902 - - - 4 ,558,902
page 80 32. MATURITIES OF ASSETS AND LIABILITIES
Over one month Over six month Total Up to one month Over one year up to six month up to one year
31 December 2016 (Rupees) (Rupees) (Rupees) (Rupees) (Rupees)
Market rate assets Cash and Balance with SBP and NBP 7 4 7 , 9 30,012 7 4 7 , 9 3 0 , 0 1 2 - - - Balances with other Banks/NBFIs/MFBs 4 , 7 4 2 ,891,348 1 , 4 4 2 ,89 1 , 3 4 8 3,300,000 ,0 0 0 - - Investments 1 , 4 9 5 ,053,230 1 , 1 9 6 ,58 4 , 6 5 9 298,468 ,5 7 1 - - Advances 5 , 8 5 8 ,824,209 9 1 , 5 2 3 , 0 8 8 2,013,956 ,7 6 6 3 ,536,574,560 2 16,76 9 , 7 9 5 Total market rate assets 1 2 , 8 4 4,698,799 3 , 4 7 8 ,929 , 1 0 7 5,612,425,3 3 7 3 ,536,574,560 216,769 , 7 9 5
Other non-earning assets Operating fxed assets 3 8 8 , 4 47,521 5 3 2 ,4 61 3 , 4 2 9 ,1 3 8 1 1 9 ,1 3 8 , 7 45 2 6 5 ,3 4 7 ,177 Other assets 8 5 3 , 3 61,423 1 7 2 , 5 91,245 6 5 2 , 4 1 2 ,7 0 3 2 8 ,3 5 7 , 4 7 5 - Deferred tax asset 1 4 7 , 3 49,687 - - - 1 4 7 ,3 4 9 , 6 8 7 Total non-earning assets 1 , 3 8 9 ,158,631 1 7 3 , 1 23,706 6 5 5 , 8 4 1 , 8 4 1 1 47,496,220 4 1 2 , 6 9 6,864 Total assets 1 4 , 2 3 3,857,430 3 , 6 5 2 ,052 , 8 1 3 6 ,268,267,1 7 8 3 ,684,070,780 629,466 , 6 5 9
Cost/non cost bearing liabilities Deposits and other accounts 1 0 , 3 0 6,362,467 8 , 0 7 1 ,47 3 , 7 0 2 614,815 ,3 9 7 875,128,905 7 44, 9 4 4 , 4 6 3
Other non-cost bearing liabilities Other liabilities 2 , 6 9 7 ,001,907 2 , 6 3 7 ,23 6 , 6 7 3 11,405 ,4 6 0 32,014,544 1 6, 3 4 5 , 2 3 0
Total Liabilities 1 3 , 0 0 3,364,374 1 0 , 7 0 8,710 , 3 7 5 6 26,220,8 5 7 9 07,143,449 761,289 , 6 9 3 Net assets 1 , 2 3 0 ,493,056 ( 7 , 0 5 6,657 , 5 6 2 ) 5,642,046,3 2 1 2 ,776,927,331 (131,823 , 0 3 4 )
Represented by : Share Capital 1,451,753,600 Statutory reserves 46,151,566 Depositor's protection fund 11,537,892 Accumulated Losses (278,950,002) Surplus / (defcit) on - revaluation of assets 1,230,493,056
On behalf of the Board of Directors, I would like to appreciate the hard work put in by the employees of the bank in taking various initiatives during the year. I, on behalf of the Board, express gratitude to the State Bank of Pakistan for its continued support and guidance. Taking this opportunity, I would also thank, on behalf of the Board & the management, the customers for entrusting confdence in us and assure them that we remain committed to maintaining high service standards and a strong corporate governance and compliance in all our endeavors.
For and on behalf of the Board
page 81 32. MATURITIES OF ASSETS AND LIABILITIES
Up to one Over one month Over six month Total Over one year month up to six month up to one year
31 December 2015 (Rupees) (Rupees) (Rupees) (Rupees) (Rupees)
Market rate assets Cash and Balance with SBP and NBP 266,578,027 2 6 6 , 5 7 8,02 7 - - - Balances with other Banks/NBFIs/MFB s 2,402,370,277 3 0 2 , 3 7 0,27 7 2 ,100,00 0 ,0 0 0 - - Investments 125,271,966 - - 125,271,966 - Advances 1,342,557,145 2 7 , 1 3 7 ,732 3 6 9 , 4 7 2 ,2 6 1 945,947,152 - Total market rate assets 4,136,777,415 5 9 6 , 0 8 6,03 6 2 ,469,472 , 2 6 1 1 ,071,219,118 -
Other non-earning assets Operating fxed assets 289,234,838 - 2 , 9 0 8 ,535 4 , 9 6 5 , 1 2 2 2 8 1 ,3 61,181 Other assets 274,657,617 2 3 6 , 2 1 4,850 2 0 , 5 2 7,114 1 4 , 5 9 2 , 8 01 3 , 3 2 2 ,852 Deferred tax asset 194,455,975 - - - 1 9 4 ,4 55,975 Total non-earning assets 758,348,430 2 3 6 , 2 1 4,850 2 3 , 4 3 5,649 19,557,923 4 7 9 , 140,008 Total assets 4 ,895,125,845 8 3 2 , 3 0 0,88 6 2 ,492,907,910 1 ,09 0 , 7 7 7 , 0 4 1 479,140,008
Cost/non cost bearing liabilities Deposits and other accounts 3,197,311,437 3 , 0 1 4 , 8 35,315 5 1 , 2 1 9 , 0 0 1 68,287,800 62,969,321
Other non-cost bearing liabilities Other liabilities 697,478,562 6 9 4 , 5 8 9,720 8 2 5 , 1 6 6 751,058 1,312,618
Total Liabilities 3 ,894,789,999 3 , 7 0 9 , 4 25,035 5 2 , 0 4 4,167 6 9 , 0 3 8 , 8 5 8 6 4,281,939 Net assets 1,000,335,846 (2 , 8 7 7 ,124,149) 2 , 4 4 0 ,863,743 1 ,02 1 , 7 3 8 , 1 8 3 414,858,069
Represented by : Share Capital 1,451,753,600 Accumulated losses (452,018,374) (Defcit) / surplus on 600,620 revaluation of assets 1,000,335,846
33. RECLASSIFICATION The corresponding fgures as at December 31, 2015 have been reclassifed for more appropriate presentation. These reclassifcations have no efect on previously reported net loss or shareholders' equity. The efect on presentation of the balance sheet as at December 31, 2015 and proft and loss account for the year ended December 31, 2015 is summarized below: Rupees Rupees (as previously reported) (as reclassifed) Payable to related parties 8 , 5 0 6 , 3 7 9 3,937,163 Receivable from related parties 1 4 , 0 4 3 , 7 2 9 9,474,513 Fee, Commission and Brokerage income 2 , 6 5 1 , 0 7 2 , 3 3 4 531,144,891 Commission expense ( 2 , 1 1 9 , 9 2 7 ,4 4 3 ) - 34. GENERAL Figures have been rounded of to the nearest rupee unless otherwise stated.
35. DATE OF AUTHORIZATION FOR ISSUE
These fnancial statements were authorized for issue by the Board of Directors of the Bank in their meeting held on 24th March 2017.
page 82 Branch Names And Contacts
Faisalabad
Faisalabad Gojra Shorkot P-7, Santpura Main Allama Iqbal Shop no.1 Azeem plaza, Near Near Ghani Petrol Pump Lari Ada Road Opposite GC University Sabzi Mandi, Borh Wali Gali, Quaid Jhang Road Shorkot City Faisalabad e azam road, Tehsil Gojra District 047-5310178 041-2620622 Toba Tek Singh 046-3511461 Chiniot Toba Tek Singh Near NADRA ofce Faisal Abad Shop #240-241,Mall GoDown Jhang Road Chiniot Road,Grain Market,Toba Tek Singh Building No.93, Near Girls College 047-6330181 046-2510721 Chowk, Gojra Road, Jhang Saddar 047-7650148-9
Layyah
Bhakkar Darya Khan Layyah Ward # 12/6 near Nasir hospital Main Bhakkar Road, Opposite Plot # 134,Mohallah Mandi Town Bhakkar GPO, Darya Khan Qadirahabad,near Moti 0453-514014 0453-252314 mosque,Chobarah Road Layyah 0606-410141 Chowk Azam Koror Lal Essan MM Fateh Pur Road, Sial Colony, Fateh Pur road opposite ZTBL Mankera Chowk Azzam Karor Lal Essan Shop no. 4 Bhatti markit, Opposite 0606-381141 0606-811555 UBL-Jhang road, Mankera 045-3410101 Chowk Sarwar Shaheed Kot Addu Opposit Ghala Mandi Gate No 2 Shop No. 476 Ward No.11 Main GT Near ZTBL main Multan Road Road Kot Adu Distt Muzafar Garh Chowk Sarwar Shaheed. District 0662-243591 Muzafargarh 066-2210621
Multan
Dunyapur Lodhran Muzafargarh Shop # 6-9, Faizan E Madina Road, Saad Plaza, Shop # 1-3, Near Choti Jhang Road Chungi # 02, Near Kazmi Chowk, Dunyapur Nagar, Main Bahalwalpur Road, wapda ofce Muzafargarh 0608-304342 Lodhran 0662-422472 0608-361104 Jalalpur Shujabad Arain Plaza,Opposite Allied Bank Multan Opposite Munawarah Masjid, Permat Road, Jalalpur Pirwala 3626 AB, Azmat wasti road, Chowk Jalalpur Road, Shujaabad 0614-420197 Sadu Hassam, Multan 061-4397599 061-4588868 Kehror Pecca Dunya Pur Road, Kehror Pacca 0608-340223
page 83 Pannu Aqil
Dharaki Karachi-DHA Sadiqabad Property No. 446, Near EFU ofce , 40D, 24th Commercial Street, Nishter chowk fanous, cinema Main Road, Deharki Phase II Extension, DHA, Karachi road, near KPL road, Sadiqabad 0723644402 021-34328516 0685-705333
Hala Pannu Aqil Larkana Dargah Road, Opposite HBL, New Plot No. 435, Baiji road, Pannu Akil Shaikh Muhallah, survey no. 72 old Hala, District Matiari District, Sukkur. anaj Mandi, near Haji Dhani Bux oil 223331124 071-5692437 mill, Bank Square Road Larkana 074-4040133 Hyderabad Ranipur Plot # D-1 & D4, Mobilink House, Shop No. 1 & 2, Behind Al-Shifa Qambar Main Auto Bhan Road, Near Medical Center, Near Askari Bank, Old bus Stand, Mian Mangan Main Standard Chartered Bank, Main National Highway, Ranipur. Road Qamber Latifabad, Hyderabad 0243-730372 074-4211442 022-3411038
Peshawar
Abbotabad Mardan Peshawar Ground Floor, Shalimar Motors, Naeem Khan Market College Mobilink Contact Center, Near Mansehra Road, Abbotabad Chowk,Mardan. Arbab Road, University Rd, 0992-384488 093-7875123 Peshawer. 091-5711626 Haripur Muzafarabad Shop#7-8,Naeem Khan Market,GT Neelum Road Near 4 Field Masjid Swabi Road,opposite Total Pump,Haripur Lower Plate Muzafarabad Shop #1, Fazal Dad Khan Market, 0995-627725 05822-449114-5 Mardan Road, Near Meezan Bank, Swabi Islamabad 0938-222325 Kaghan Road F-8 Markaz Islamabad 051-2817101 ext 1225
Rahim Yar Khan
Ahmedpur Haroonabad Liaquatpur Shop # 2/2, Opposite MAPCO Jamia Masjid Road, Near UBL bank, Plot #7,Ghalla Mandi Ofce, Kuchehri Road, Ahmedpur Haroonabad Road,Liaqatpur East. 063-2250041 0685-693442 062-2271443 Hasilpur Rahim Yar Khan Chishtian Main Bazar, Baldia Road, Near Bin Hakim Plaza Shahi Road, Plot # 68-D,Gulistan Plaza Bank of Punjab, Hasilpur Opposite Police Station City A Gurdwara Road,Main Bazar 062-2441094 Division, Behind Zam Zam Plaza, Chishtian Rahim Yar Khan 063-2500177 Khanpur 0685-878071 Shop # 1 & 2, Quaid-e-Millat Road, Fort Abbas Khanpur, District Rahim Yar Khan Grain Market, Along with Meezan 068-5577072 bank , Fort Abbas 063-2510120
page 84 Sahiwal
Arif Wala Mian Chanu Basirpur Main Muhammadi Road, Adjacent Batalvi Plaza, Near Ghallani Plaza, Haveli road opposite Girls degree NRSP Bank, Arifwala Shaheed Road, Mian Channu. college Basirpur. 045-7830510 065-2660287 0444-771010
Burewala Pakpattan Minchinabad Al Ramay industeries, Near Ex-Punjab Bank Building, Adjacent Plot No. 150 Circular Road Khushhali bank limited, Multan Telenor Franchise, College Road, Minchanabad road Burewala Pakpattan. 0632-750244 067-3770828 0457-372172
Lahore Sahiwal E-17/5-1, Main Walton Road, Islam Ofce No G-3 Ground Floor,Plot no Nagar, Lahore 515-B,Saeed center,opposite DPO 042-36628256 ofce,Farid Road,Sahiwal 040-4222219
Sargodha
Bhalwal Mandi Baha Uddin Pasrur Khewat # 100, Khattoni # 103, Ali Plaza, Cinema Road, Near Civil Narowal By Pas Pasru Road Pasrur Liaquat Shaheed road Bhalwal Lines Hospital, Mandi Baha Uddin. Near PSO Petrol Pump District Sargodha. 054-6500942 052-6442724 048-6643406 Sargodha Chota Sahiwal Zahoor Plaza, Hussain Chowk, Vinni House, Jhang Sargodha Noori Gate, Sargodha Road, Tehsil Chota Sahiwal, 048-3768825 District Sargodha 048-6786157 Sialkot M.A. Heights, Defence Road, Khushab Sublime Chowk, Khewat No 343, Shop No. 198, block No. 14, Main Khatoni No 724,Khasra Bazar Jouharabad, District No.24,Opposite WAPDA OFFICE, Khushab. Sialkot 0454-721491 052-3258877
page 85 Head Office Mobilink Microfinance Bank, Head Office, 3-A/2, Kaghan Road, F-8 Markaz, Islamabad. www.mobilinkbank.com