Contents Unconsolidated 02 Company Information 23 Cash Flow Statement Notice of Annual Notes to the 03 General Meeting 25 Unconsolidated Financial Statements Auditors Report to the Members Directors’ Report to the on Consolidated Financial 07 Shareholders 101 Statements Statements of Compliance and Consolidated 11 Internal Controls 102 Statement of Financial Position Auditors’ Review Report on Consolidated 16 Statement of Compliance 103 Profit and Loss Account Auditors’ Report to the Members Consolidated on Unconsolidated Financial 104 Statement of Comprehensive Income 17 Statements Consolidated Unconsolidated 19 Statement of Financial Position 105 Statement of Changes in Equity Consolidated Unconsolidated Cash Flow Statement 20 Profit and Loss Account 106 Unconsolidated Notes to the 21 Statement of Comprehensive Income 108 Consolidated Financial Statements Unconsolidated Pattern of Shareholding 22 Statement of Changes in Equity 179 Proxy Form ANNUAL REPORT 2010 NIB BANK LIMITED 1 Company Information Board of Directors Francis Andrew Rozario Chairman Syed Aamir Zahidi Director Tejpal Singh Hora Director Asif Jooma Director Teo Cheng San, Roland Director Najmus Saquib Hameed Director Muhammad Abdullah Yusuf Director Khawaja Iqbal Hassan Director & President/CEO Board Audit Committee Muhammad Abdullah Yusuf Chairman Syed Aamir Zahidi Member Teo Cheng San, Roland Member Chief Financial Officer & Company Secretary Yameen Kerai Registered Office Muhammadi House I.I. Chundrigar Road Karachi-74000. UAN: (021) 111 333 111 Email: [email protected] / [email protected] URL: www.nibpk.com Share Registrar Office THK Associates (Pvt.) Limited Ground Floor, State Life Building No. 3 Dr. Ziauddin Ahmed Road Karachi-75530. UAN: (021) 111 000 322 Auditors M/s. KPMG Taseer Hadi & Co. Chartered Accountants Legal Advisor M/s. Mandviwalla & Zafar Advocates Credit Rating Long Term: AA- Short Term: A1+ Rating Agency: PACRA 2 NIB BANK LIMITED ANNUAL REPORT 2010 Notice of Annual General Meeting Notice is hereby given that an Annual General Meeting of NIB Bank Limited (“the Bank”) shall be held at 4.00 pm on Wednesday the 30th March 2011, at Moosa G. Desai Auditorium, Institute of Chartered Accountants of Pakistan (ICAP), Chartered Accountants Avenue, Clifton, Karachi to transact the following business: ORDINARY BUSINESS 1. To confirm the minutes of the 7th Annual General Meeting held on 30th March 2010. 2. To receive, consider and adopt the Audited Accounts of the Bank for the year ended 31st December 2010 together with Directors' and Auditors' Reports thereon. 3. To appoint auditors and fix their remuneration. M/s. KPMG Taseer Hadi & Co., Chartered Accountants have offered themselves for the re-appointment. SPECIAL BUSINESS 4. To grant post facto approval to the payment of remuneration fixed by the Board for the Non-executive Directors, in terms of State Bank of Pakistan Prudential Regulations # G-1(C)(2) for Corporate / Commercial Banking and to pass the following resolution: RESOLVED that post facto approval for payment of remuneration fixed by the Board for Non Executive Directors in terms of State Bank of Pakistan's Prudential Regulation # G-1(C)(2) for Corporate / Commercial Banking is hereby granted. 5. To consider and approve the issuance of 6,259,124,088 right shares of Rs. 10.00 each at Rs. 1.37 per share (at a discount of Rs. 8.63 per share), in accordance with sections 84 and 86 of the Companies Ordinance, 1984 and to pass the following resolution, with or without modification, as Special Resolution, and as may be directed by the Securities and Exchange Commission of Pakistan and the State Bank of Pakistan: RESOLVED that subject to the sanction of the Securities and Exchange Commission of Pakistan and approval by the State Bank of Pakistan, 6,259,124,088 ordinary shares of the par value of Rs. 10/- each be offered and issued to the existing shareholders at a price of Rs. 1.37 per share (at a discount of Rs. 8.63 per share) by way of right issue under Sections 84 and 86 of the Companies Ordinance, 1984, and as may be directed by the Securities and Exchange Commission of Pakistan and the State Bank of Pakistan. FURTHER RESOLVED that these right shares shall from the date of their allotment, rank pari passu in all respects with the then existing fully paid shares of NIB and the members receiving such shares shall enjoy similar rights and entitlements in respect of the Right Shares as in respect of their previously held shares from the date of allotment. FURTHER RESOLVED that the President / Chief Executive Officer (CEO) and the Company Secretary, be and are hereby authorized, jointly and severally, to take all necessary steps, ancillary and incidental for the issuance of the right shares of the Bank at a price of Rs. 1.37 (at a discount of Rs. 8.63 per share) and to obtain the regulatory approvals from the Securities and Exchange Commission of Pakistan the State Bank of Pakistan and the Stock Exchanges. 6. To consider the increase in authorized share capital of NIB Bank Limited and the corresponding amendments in the Memorandum and Articles of Association. Accordingly, if thought fit, to pass the following resolution, with or without modification, as a Special Resolution: RESOLVED that the authorized share capital of the Bank be increased to Rs. 120,000,000,000/- (Rupees One Hundred Twenty Billion only) divided into 12,000,000,000 (Twelve Billion) ordinary shares of Rs. 10/- (Rs. Ten only) each and such new shares to rank pari passu in all respects with the existing ordinary shares in the capital of the Bank. FURTHER RESOLVED that the figures and words Rs. 50,000,000,000/- (Rs. Fifty Billion only) divided into 5,000,000,000 (Five Billion) shares of Rs. 10/- (Rs. Ten only) appearing in Clause V of the Memorandum of Association of the Bank be and are hereby amended and substituted by the figures and words Rs. 120,000,000,000/- (Rupees One Hundred Twenty Billion only) divided into 12,000,000,000 (Twelve Billion) shares of Rs. 10/- (Rs. Ten only). FURTHER RESOLVED that the figures and words Rs. 50,000,000,000/- (Rupees Fifty Billion only) divided into 5,000,000,000 (Five Billion) shares of Rs. 10/- (Rs. Ten only) appearing in Article 6 of the Articles of Association of the Bank be and are hereby amended and substituted by the figures and words Rs. 120,000,000,000/- (Rupees One Hundred Twenty Billion only) divided into 12,000,000,000 (Twelve Billion) shares of Rs. 10/- (Rs. Ten only). ANNUAL REPORT 2010 NIB BANK LIMITED 3 Notice of Annual General Meeting FURTHER RESOLVED THAT the President / CEO and / or the Company Secretary be and is / are hereby authorized to sign all necessary documents singly / jointly as deemed appropriate by the President / CEO and to take such further actions / steps as may be deemed necessary by the President / CEO and the Company Secretary for the purpose of increasing the authorized capital of the Bank and all matters ancillary thereto. 7. To consider and approve the shifting of the registered office of the Bank from the Province of Sindh to Islamabad Capital Territory and to approve the corresponding amendments in the Memorandum and Articles of Association. Accordingly, if thought fit, to pass the following resolution, with or without modification, as a Special Resolution and as may be directed by the State Bank of Pakistan and the Securities and Exchange Commission of Pakistan: RESOLVED that the Company be and is hereby authorized to alter Clause II of the Memorandum of Association so as to substitute the words “Province of Sindh” with the words “Islamabad Capital Territory” so as to shift Bank's registered office from Karachi to Islamabad. FURTHER RESOLVED that the President / CEO and the Company Secretary be and are hereby authorized, jointly and severely, to complete the legal formalities for giving effect to these Resolutions. 8. Any other business with the permission of the Chair. A statement as required under section 160(1)(b) of the Companies Ordinance, 1984 is being sent to the shareholders with this notice. By Order of the Board Karachi Yameen Kerai 9th March 2011 CFO & Company Secretary Notes: 1. Share Transfer Books of the Bank will remain closed from 23rd March to 30th March 2011 (both days inclusive). 2. A shareholder entitled to attend and vote at this meeting may appoint another shareholder as his / her proxy to attend and vote. Proxies, in order to be effective, must be received at the Registered Office of the Bank situated at Muhammadi House, I.I. Chundrigar Road, Karachi (Pakistan) not later than 48 (forty eight) hours before the time of meeting, and must be duly stamped, signed and witnessed. 3. Shareholders are requested to notify any change in their addresses immediately to the Bank or Share Registrar, M/s. THK Associates (Pvt.) Limited, Ground Floor, State Life Building No. 3, Dr. Ziauddin Ahmed Road, Karachi (Pakistan). 4. CDC Account Holders will further have to follow the under mentioned guidelines as laid down in Circular 1 dated the 26th January 2000 issued by the Securities and Exchange Commission of Pakistan: For attending the meeting: In case of individuals, the account holder or sub-account holder or investor account holder shall authenticate identity by showing his/her original computerized national identity card (CNIC) or original passport at the time of attending the meeting. In case of corporate entity, the Board of Directors' resolution/power of attorney with specimen signature of the nominee shall be produced (unless it has been provided earlier) at the time of the meeting. For appointing proxies: In case of individuals, the account holder or sub-account holder or investor account holder shall submit the proxy form as per the above requirement.