TABLE OF CONTENTS STANDARD DISCLOSURE CHECKLIST 6 MANAGEMENT & COMMITTEES LETTER OF TRANSMITTAL 10 1. Management Committee (MANCOM) 37 NOTICE OF THE 25TH ANNUAL 2. Management Team 37 11 GENERAL MEETING 3. Asset Liability Committee (ALCO) 38 4. Investment Committee 38 OVERVIEW 5. SIBL Integrity Committee 38 1. Our Vision, Our Mission, Our Commitments 12 6. Status of compliance regarding 2. Our Strategic Objectives 13 Appointment of chief financial Officer & chief 39 information Technology officer 3. SIBL Core Values 14 4. Code of Conducts 15 SHAREHOLDERS’ WEALTH 5. Corporate Profile 17 1. Capital (Paid-up) Pattern of SIBL 41 6. Milestones 18 2. Pattern of Shareholding 42 7. Sponsors of the Company 20 3. Holding in 2019 42 8. Functions of Social Islami Bank Limited 21 4. Shares held by the Directors 43 9. Products and Services 22 10. Media Accolade 24 5. Financial Calendar 43 BOARD AND COMMITTEES 1. Board of Directors 26 2. Directors’ Profile 27 3. Executive Committee 34 4. Audit Committee 34 5. Risk Management Committee 35 6. Shariah Supervisory Committee 35 ANALYSIS & VALUE ADDED STATEMENTS REPORT ON RISK MANAGEMENT 169 1. Performance of the Bank 45 Market Disclosure under Pillar-III of BASEL-III 178 2. SIBL at a Glance 46 3. Graphical Presentation of SIBL 47 SUSTAINABILITY PERFORMANCE 202 4. Reports & statements of value addition and its distributions 50 5. Value Added Statement 50 REPORT OF THE SHARIAH 215 6. Distributions Of Value Addition 51 SUPERVISORY COMMITTEE 7. Distribution Of Dividend And Retained By The Entity 51 8. Economic Value Added (EVA) Statement 52 NEWS AND EVENTS 216 9. Market Value Added (MVA) Statement 52 10. Five-Step DuPont analysis 53 FINANCIAL STATEMENTS Auditors’ report and financial statements to 231 MESSAGE FROM THE CHAIRMAN 54 the Shareholders of Social Islami Bank Limited MESSAGE FROM THE DESK OF THE 58 MANAGING DIRECTOR & CEO BRANCH NETWORK 359 REPORT & ANALYSIS FORM OF PROXY 369 1. Management Report & Analysis 63 2. Business Analysis 69 3. Report on Internal Control System 73 DIRECTORS’ REPORT 75 1. Corporate Governance 127 2. Declaration By The Chief Executive Officer & Chief Financial Officer To The Board 129 3. Information Related To Board & Its Directors 131 4. Compliance Report 145 5. Report on Going Concern 161 6. Report Of The Board Audit Committee 165 7. 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That is because they say Trade is just like usury whereas, Allah permitteth trading and forbideth usury.....” -Surah Al-Baquarah,verse : 275 “…..Allah will destroy Riba (usuary) and will give increase for Sadaqaat and Allah likes not the disbelievers, sinners…..” -Surah Al-Baquarah,verse : 276 “..... O you who believe! Be afraid of Allah and give up what remains from Riba, if you are really believers…..” -Surah Al-Baquarah,verse : 278 “..... If you do not do it, then take a notice of war from Allah and his messenger; but if repent, you shall have your capital sums. Deal not unjustly (by asking more than your capital sums), and you shall not be dealt with unjustly (by receiving less than your capital sums).....” -Surah Al-Baquarah,verse : 279 “..... Verily never will Allah change the condition of a people until they change it themselves (with their own souls).....” -Surah Ar-ra’ad, verse : 11 “A man’s work ends upon his death except for three things (a) on-going charity (b) contribution to knowledge and (c) faithful child” - Al Hadith (Muslim) Annual Report 2019 5 STANDARD DISCLOSURE CHECKLIST TO THE KEY SECTIONS OF THE ANNUAL REPORT 2019 ITEMS REMARKS Corporate Objectives, Values & Structure Clarity and presentation: Vision and Mission 12 Overall strategic objectives 13 Core values and code of conduct/ethical principles 14-16 Profile of the Company 17 Director’s profiles and their representation on Board of other companies & 26-33, 311 Organization Chart Management Report/ Commentary and analysis including Director’s Report / Chairman’s Review/CEO’s Review etc. A general review of the performance of the company 45-46, 63-72 Description of the performance of the various activities / products / segments of the company and its group companies during the period under review. (Weightage 90-126 to be given for pictorial / graphical / tabular presentations used for this purpose) A brief summary of the Business and other Risks facing the organization and steps 103-105, 161-164, 169-177, taken to effectively manage such risks 260-263 A general review of the future prospects/outlook. 72, 94, 99 Information on how the company contributed to its responsibilities towards the 112-116, 208, 212-214 staff (including health & safety) Information on company’s contribution to the national exchequer & to the economy 50-52, 103 Sustainability Reporting Social Responsibility Initiatives ( CSR) 66,122-126, 205-206 Environment related Initiatives 207-208 Environmental & Social Obligations 209 Integrated Reporting 210-211 Appropriateness of Disclosure of Accounting policies and General Disclosure Disclosure of adequate and properly worded accounting policies relevant to assets, 248-264 liabilities, Income and expenditure in line with best reporting standards. Any Specific accounting policies 250-264 Impairment of Assets 257 (Note 2.14) Changes in accounting policies/Changes in accounting estimates 256 (Note 2.5) Accounting policy on subsidiaries 255 (Note 2.2, 2.3) 6 Social Islami Bank Limited ITEMS REMARKS Segment Information • Comprehensive segment related information bifurcating Segment revenue, segment results and segment capital employed • Availability of information regarding different segments and units of the entity as well as non-segmental entities/units • Segment analysis of 102 • Segment Revenue • Segment Results • Turnover • Operating profit • Carrying amount of Net Segment assets Financial Statements (Including Formats) Disclosures of all contingencies and commitments 238, 243, 255, 297-298 Comprehensive related party disclosures 109, 309 Disclosures of Remuneration & Facilities provided to Directors & CEO 127, 239, 244, 302-303 Statement of Financial Position / Balance Sheet and relevant schedules 236, 241, 311 - 324 Income Statement / Profit and Loss Account and relevant schedules 239, 244 Statement of Changes in Equity / Reserves & Surplus Schedule 241, 246 Disclosure of Types of Share Capital 290-291 Statement of Cash Flow 240, 245 Consolidated Financial Statement (CFS) 237 - 241 Extent of compliance with the core IAS/IFRS or equivalent National Standards 249 - 250 Disclosures / Contents of Notes to Accounts 248 - 312 Information about Corporate Governance Board Of Directors, Chairman And CEO 26-33, 131-144 Audit Committee (Composition, role, meetings, attendance, etc) Internal Control & 34, 165 - 166 Risk Management Ethics And Compliance 15 - 16, 133 - 134 Remuneration and other Committees of Board 34 - 35 Human Capital 112 - 115, 212-214 Communication To Shareholders & Stakeholders • Information available on website 41-43, 143 • Other information Management Review And Responsibility 63-72 Disclosure by Board of Directors or Audit Committee on evaluation of quarterly 165-166 reports Any other investor friendly information 18-19, 46, 63-72 Risk Management & Control Environment Description of the Risk Management Framework 169-177 Risk Mitigation Methodology 173-175 Disclosure of Risk Reporting 169-200 Annual Report 2019 7 ITEMS REMARKS Stakeholders Information Distribution of shareholdering (Number of shares as well as category wise, e.g 41-43 Promoter group, FII etc) Shares held by Directors/Executives and relatives of Directors/Executives 127-128 Redressal of investors complaints 144 Graphical/ Pictorial Data: Earnings per Share Net Assets Stock Performance 47-49, 63, 68 Shareholders’ Funds Return on Shareholders Fund Horizontal/Vertical Analysis including following.