Annual Report of Askari Bank Limited for 2013 Contents 02 Corporate Information 03 Notice of 22nd Annual General Meeting 06 Directors’ Report to the Shareholders 10 Statement of Internal Controls Unconsolidated Financial Statements of Askari Bank Limited 11 Statement of Compliance 13 Review Report to the Members 14 Auditors’ Report to the Members 18 Unconsolidated Statement of Financial Position 19 Unconsolidated Profit and LossAccount 20 Unconsolidated Statement of Comprehensive Income 21 Unconsolidated Cash Flow Statement 22 Unconsolidated Statement of Changes in Equity 23 Notes to the Unconsolidated Financial Statements 96 Shariah Advisor’s Report Consolidated Financial Statements of Askari Bank Limited and its Subsidiaries 99 Auditors’ Report to the Members 100 Consolidated Statement of Financial Position 101 Consolidated Profit and LossAccount 102 Consolidated Statement of Comprehensive Income 103 Consolidated Cash Flow Statement 104 Consolidated Statement of Changes in Equity 105 Notes to the Consolidated Financial Statements 168 Pattern of Shareholding 171 Form of Proxy 1 Corporate Information Board of Directors Legal Advisors Lt. Gen. Muhammad Mustafa Khan, HI (M) (Retd) RIAA Law Chairman Advocates & Corporate Counsellors Lt. Gen. Naeem Khalid Lodhi, HI (M) (Retd) Shariah Advisor Lt. Gen. Muhammad Haroon Aslam, HI (M), S Bt (Retd) Dr. Muhammad Tahir Mansoori Mr. Qaiser Javed Dr. Nadeem Inayat Registered / Head Office Khawaja Jalaluddin Roomi AWT Plaza, The Mall, Mr. Manzoor Ahmed P. O. Box No. 1084 NIT Nominee Rawalpindi – 46000 Mr. Asif Reza Sana Pakistan. Tel: (92 51) 9063000 Mr. Zaffar Ahmad Khan Fax: (92 51) 9272455 Mr. Tariq Hafeez Malik E-mail: [email protected] Syed M. Husaini President & Chief Executive Registrar & Share Transfer Office THK Associates (Private) Limited Board Audit & Compliance Committee Ground Floor, State Life Building No. 3 Dr. Ziauddin Ahmad Road Mr. Asif Reza Sana P. O. Box: 8533 Chairman Karachi – 75530 Mr. Qaiser Javed Tel: (92 21) 111 000 322 Fax: (92 21) 35655595 Dr. Nadeem Inayat Chief Financial Officer Entity Ratings Long Term: AA Mr. Saleem Anwar, FCA Short Term: A1+ Company Secretary by Pakistan Credit Rating Agency (PACRA) Mr. M. A. Ghazali Marghoob, FCA Website Auditors www.askaribank.com.pk Contact details of branches and other relevant information KPMG Taseer Hadi & Co. can be accessed from the Bank’s website. Chartered Accountants 2 Annual Report of Askari Bank Limited for 2013 Notice of 22nd Annual General Meeting Notice is hereby given that the 22nd Annual General and in this regard the Memorandum and Articles of Meeting of the shareholders of Askari Bank Limited (the Association of the Bank be amended as follows: Bank) will be held on Sunday, March 30, 2014 at 11:00 am at Pearl Continental Hotel, Rawalpindi to transact the Memorandum of Association following business: Amended Clause V The Authorized Capital of the Bank is PKR Ordinary Business: 16,000,000,000 (Pak Rupees Sixteen Billion only) 1. To confirm the minutes of the 21st Annual General divided into 1,600,000,000 ordinary shares of PKR Meeting held on March 28, 2013. 10 (Rupees Ten) each. The Bank shall have the 2. To receive, consider and adopt the financial power to increase, reduce or reorganize the capital statements of the Bank for the year ended December and divide its shares in the capital for time being 31, 2013 together with the Directors’ and Auditors’ into several classes consisting ordinary shares in Reports thereon. accordance with the provisions of the Companies 3. To appoint the auditors of the Bank for the Ordinance, 1984. year ending December 31, 2014 and to fix their remuneration. Articles of Association 4. To elect 10 Directors as fixed by the Board in Amended Article 4 accordance with the provisions of Section 178 of The Authorized Capital of the Bank is PKR the Companies Ordinance 1984, for a period of 16,000,000,000 (Pak Rupees Sixteen Billion only) three years in place of the following retiring directors divided into 1,600,000,000 ordinary shares of PKR namely: 10 (Rupees Ten) each. The Bank shall have the 1. Lt. Gen. Muhammad Mustafa Khan, HI (M) (Retd) power to increase, reduce or reorganize the capital 2. Lt. Gen. Naeem Khalid Lodhi, HI (M) (Retd) and divide its shares in the capital for time being 3. Lt. Gen. Muhammad Haroon Aslam, HI (M), S Bt (Retd) into several classes consisting ordinary shares in 4. Mr. Qaiser Javed accordance with the provisions of the Companies 5. Dr. Nadeem Inayat Ordinance, 1984. 6. Khawaja Jalaluddin Roomi 7. Mr. Manzoor Ahmed - NIT Nominee The President & Chief Executive and Company 8. Mr. Asif Reza Sana Secretary of the Bank be and are hereby 9. Mr. Zaffar Ahmad Khan authorized to either singly or jointly, take all steps 10. Mr. Tariq Hafeez Malik necessary, ancillary and incidental for registering and amending the Memorandum and Articles of Special Business: Association of the Bank, including but not limited to filing of all the requisite statutory forms and all 5. To consider and if deemed fit, approve and adopt other documents as may be required to be filed the amendment in the Memorandum & Articles with the Companies Registration Office of the of Association of the Bank and pass the following Securities and Exchange Commission of Pakistan special resolutions with or without modification(s): and the State Bank of Pakistan, submitting all such documents as may be required with the Securities Resolved that and Exchange Commission of Pakistan and the State “The Bank be and is hereby authorized to increase Bank of Pakistan, executing all such certificates, its Authorized Share Capital from an amount of applications, notices, reports, letters and any other PKR 13,000,000,000 (Pak Rupees Thirteen Billion document or instrument including any amendments only) divided into 1,300,000,000 ordinary shares of or substitutions to any of the foregoing as may PKR 10 each to an amount of PKR 16,000,000,000 be required in respect of the amendment in the (Pak Rupees Sixteen Billion only) divided into Memorandum and Articles of Association.” 1,600,000,000 ordinary shares of PKR 10 each, 3 Notice of 22nd Annual General Meeting 6. To consider any other business as may be placed more than seven listed companies; and he / she before the meeting with the permission of the is a registered National Tax Payer (except where Chair. he/she is a non-resident), that he / she has By Order of the Board not been convicted by a court of competent jurisdiction as defaulter in payment of any loan to a banking company, a development financial institution or a non-banking financial institution. Rawalpindi M. A. Ghazali Marghoob March 08, 2014 Company Secretary ii) A specified affidavit as prescribed in the State Bank of Pakistan [SBP] BPRD Circular No. 12 NOTES dated June 2, 2000 together with prescribed 1. The statement under section 160 (1) (b) & (c) of Questionnaire in accordance with Prudential the Companies Ordinance, 1984 setting forth all Regulation No. G-1 and the ‘Fit and Proper Test’ material facts concerning the special business to be for the appointment of Directors in terms of transacted at the meeting is annexed. SBP BPD Circular No. 13 dated May 17, 2004 along-with two recent photographs and a copy 2. The Share Transfer books of the Bank will remain of CNIC (Passport in case of foreign national). closed from March 20, 2014 to March 28, 2014 Copies of SBP circulars / annexures may be (both days inclusive). Transfers received at M/s obtained from SBP website or from the office THK Associates (Private) Limited, Ground Floor, of the Company Secretary of the Bank. SBP State Life Building # 3, Dr. Ziauddin Ahmad Road, circulars / annexures also list various persons Karachi-75530, the Registrar and Share Transfer who are not eligible to become director of a Office of the Bank at the close of the business on Bank. Any person with these anomalies is March 19, 2014 will be treated in time. considered undesirable; and against the public interest in terms of SBP BPRD Circular No. 12 3. Any person who seeks to contest the election of dated June 02, 2000. directors shall file the following with the Bank at its registered office not later than fourteen days before 4. A member entitled to attend and vote at the meeting the day of the above said meeting: is entitled to appoint a proxy to attend and vote for him/her. No person shall act as a proxy, who is i) His / her intention to offer himself / herself for not a member of the Bank except that Government election of Directors in terms of Section 178 of Pakistan [GoP] or SBP or corporate entity may (3) of the Companies Ordinance, 1984, [the appoint a person who is not a member. Ordinance] together with (a) consent on Form 28 as prescribed by the Companies (Provisions 5. The instrument appointing a proxy should be signed and Forms) Rules, 1985 (b) a declaration with by the member or his/her attorney duly authorized consent to act as Director in the prescribed in writing. If the member is a corporate entity (other form under clause (ii) of the Code of Corporate than GoP and SBP), its common seal should be Governance [the Code] to the effect that he/she affixed on the instrument. is aware of duties and powers of Directors as mentioned in the Ordinance, the Memorandum 6. The instrument appointing a proxy, together and Articles of Association of the Bank and the with attested copy of Power of Attorney or Board Listing Regulations of the Stock Exchanges Resolution, if any, under which it is signed or a and has read the relevant provisions contained notarially certified copy thereof, should be deposited, therein; and (c) a declaration in accordance with the Company Secretary, Askari Bank Limited, with clause (iii) and (iv) of the Code to the 1st Floor, AWT Plaza, The Mall, P.O.