MCB Bank Limited Financial Statements For the year ended December 31, 2013 MCB BANK LIMITED STATEMENT OF FINANCIAL POSITION AS AT DECEMBER 31, 2013 Note 2013 2012 2011 Restated Restated (------------Rupees in thousand----------------) ASSETS Cash and balances with treasury banks 6 59,946,150 57,420,129 53,122,522 Balances with other banks 7 1,536,946 1,191,974 2,281,263 Lendings to financial institutions 8 1,224,638 1,551,472 955,087 Investments - net 9 449,006,019 402,068,916 316,651,613 Advances - net 10 248,242,965 239,583,320 227,580,139 Operating fixed assets 11 28,595,338 23,738,454 22,007,903 Deferred tax assets - net - - - Other assets - net 12 26,956,315 41,520,432 31,183,765 815,508,371 767,074,697 653,782,292 LIABILITIES Bills payable 14 10,138,726 9,896,284 9,466,818 Borrowings 15 38,542,660 78,951,103 39,100,627 Deposits and other accounts 16 632,330,286 545,060,728 491,188,710 Sub-ordinated loan - - - Liabilities against assets subject to finance lease - - - Deferred tax liabilities - net 17 4,201,373 9,529,727 6,487,525 Other liabilities 18 20,064,345 21,166,166 18,378,373 705,277,390 664,604,008 564,622,053 NET ASSETS 110,230,981 102,470,689 89,160,239 Represented by Share capital 19 10,118,461 9,198,601 8,362,365 Reserves 20 46,601,214 44,253,270 42,186,467 Unappropriated profit 40,552,043 35,424,921 28,723,928 97,271,718 88,876,792 79,272,760 Surplus on revaluation of assets - net of tax 21 12,959,263 13,593,897 9,887,479 110,230,981 102,470,689 89,160,239 Contingencies and commitments 22 The annexed notes 1 to 46 and Annexures I to V form an integral part of these financial statements. Difference - - President and Chief Executive Director Director Director MCB BANK LIMITED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED DECEMBER 31, 2013 Note 2013 2012 Restated (Rupees in thousand) Mark-up / return / interest earned 24 65,064,123 68,356,191 Mark-up / return / interest expensed 25 27,195,894 27,500,019 Net mark-up / interest income 37,868,229 40,856,172 Provision / (reversal) for diminution in the value of investments - net 9.3 (6,834) (3,044) Provision / (reversal) against loans and advances - net 10.5.2 (2,828,783) 480,903 Bad debts written off directly 10.6.1 - 206 (2,835,617) 478,065 Net mark-up / interest income after provisions 40,703,846 40,378,107 Non-mark-up / interest income Fee, commission and brokerage income 6,741,404 5,934,472 Dividend income 932,717 1,197,615 Income from dealing in foreign currencies 916,572 822,856 Gain on sale of securities - net 26 2,130,341 824,539 Unrealized gain on revaluation of investments classified as held for trading - - Other income 27 449,604 373,849 Total non-mark-up / interest income 11,170,638 9,153,331 51,874,484 49,531,438 Non-mark-up / interest expenses Administrative expenses 28 18,709,969 17,476,862 Other provision / (reversal) - net 12.3 (52,285) (187,305) Other charges 29 928,595 599,974 Total non-mark-up / interest expenses 19,586,279 17,889,531 Extra ordinary / unusual item - - Profit before taxation 32,288,205 31,641,907 Taxation - Current year 15,170,974 9,600,760 - Prior years - 116,725 - Deferred (4,378,107) 1,251,420 30 10,792,867 10,968,905 Profit after taxation 21,495,338 20,673,002 Unappropriated profit brought forward 35,424,921 28,723,928 Transfer from surplus on revaluation of fixed assets - net of tax 35,788 35,789 35,460,709 28,759,717 Profit available for appropriation 56,956,047 49,432,719 Basic and diluted earnings - after tax Rupees per share 33 21.24 20.43 The annexed notes 1 to 46 and Annexures I to V form an integral part of these financial statements. President and Chief Executive Director Director Director MCB BANK LIMITED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED DECEMBER 31, 2013 2013 2012 Restated (Rupees in thousand) Profit after tax for the year 21,495,338 20,673,002 Other comprehensive income Items that will not be reclassified to profit and loss account Remeasurement of defined benefit plans - net of tax 49,373 629,820 Items that may be reclassified to profit and loss account Effect of translation of net investment in foreign branches 198,410 (27,267) Comprehensive income transferred to equity 21,743,121 21,275,555 Components of comprehensive income not reflected in equity Net change in fair value of available for sale securities (3,697,164) 5,193,856 Deferred tax 1,189,889 (1,451,649) (2,507,275) 3,742,207 Total Comprehensive income 19,235,846 25,017,762 The annexed notes 1 to 46 and Annexures I to V form an integral part of these financial statements. President and Chief Executive Director Director Director MCB BANK LIMITED CASH FLOW STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2013 Note 2013 2012 Restated (Rupees in thousand) Cash flows from operating activities Profit before taxation 32,288,205 31,641,907 Less: Dividend income (932,717) (1,197,615) 31,355,488 30,444,292 Adjustments for non-cash charges Depreciation 11.2 1,541,314 1,378,970 Amortization 11.3 260,424 259,932 Provision / (reversal) against loans and advances - net 10.5.2 (2,828,783) 480,903 Provision / (reversal) for diminution in the value of investments - net 9.3 (6,834) (3,044) Other provision / (reversal) - net 12.3 (52,285) (187,305) Bad debts written off directly 10.6.1 - 206 Provision for Workers' Welfare Fund 29 645,764 641,075 Charge / (reversal) for defined benefit plan 28 (1,311,767) (1,608,008) Gain on disposal of fixed assets - net 27 (42,687) (22,586) (1,794,854) 940,143 29,560,634 31,384,435 (Increase) / decrease in operating assets Lendings to financial institutions 326,834 (596,385) Advances - net (5,830,862) (12,888,489) Other assets - net (2,778,730) (1,694,467) (8,282,758) (15,179,341) Increase / (decrease) in operating liabilities Bills payable 242,442 429,466 Borrowings (40,205,492) 39,132,085 Deposits and other accounts 87,269,558 53,872,018 Other liabilities (2,529,334) 2,055,177 44,777,174 95,488,746 66,055,050 111,693,840 Defined benefits paid (706,361) (370,756) Receipt from pension fund 14,731,898 - Income tax paid (10,355,097) (14,622,132) Net cash flows from operating activities 69,725,490 96,700,952 Cash flows from investing activities Net investments in 'available for sale' securities (51,033,235) (81,386,276) Net investments in 'held to maturity' securities 405,975 1,260,172 Investment in subsidiary company - (94,299) Dividends received 940,745 1,198,485 Investments in operating fixed assets (4,663,196) (3,404,698) Sale proceeds of property and equipment disposed off 173,089 57,831 Net cash flows from investing activities (54,176,622) (82,368,785) Cash flows from financing activities Dividend paid (12,673,334) (11,814,973) Net cash flows from financing activities (12,673,334) (11,814,973) Exchange differences on translation of the net investment in foreign branches 198,410 (27,267) Increase in cash and cash equivalents 3,073,944 2,489,927 Cash and cash equivalents at beginning of the year 57,173,579 54,727,784 Effects of exchange rate changes on cash and cash equivalents 609,601 565,469 57,783,180 55,293,253 Cash and cash equivalents at end of the year 34 60,857,124 57,783,180 The annexed notes 1 to 46 and Annexures I to V form an integral part of these financial statements. President and Chief Executive Director Director Director MCB BANK LIMITED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED DECEMBER 31, 2013 Capital reserves Revenue Reserves Total Share Reserve for Exchange Share Statutory General Unappropriated capital issue of translation premium reserve reserve profit bonus shares reserve --------------------------------------------------------------- (Rupees in thousand) --------------------------------------------------------------- Balance as at December 31, 2011 8,362,365 - 9,702,528 427,049 13,456,890 18,600,000 28,366,171 78,915,003 Effect of change in accounting policy - note 5.6 - - - - - - 357,757 357,757 Balance as at December 31, 2011 - restated 8,362,365 - 9,702,528 427,049 13,456,890 18,600,000 28,723,928 79,272,760 Profit after taxation for the year ended December 31, 2012 - - - - - - 20,673,002 20,673,002 Remeasurement of defined benefit plans - net of tax - - - - - - 629,820 629,820 Exchange differences on translation of net investment in foreign branches - - - (27,267) - - - (27,267) Transferred from surplus on revaluation of fixed assets to unappropriated profit - net of tax - - - - - - 35,789 35,789 Transferred to statutory reserve - - - - 2,094,070 - (2,094,070) - Transfer to reserve for issue of bonus shares - 836,236 - - - - (836,236) - Issue of bonus shares - December 2011 836,236 (836,236) - - - - - - Final cash dividend - December 2011 - - - - - - (2,508,709) (2,508,709) Interim cash dividend - March 2012 - - - - - - (2,759,581) (2,759,581) Interim cash dividend - June 2012 - - - - - - (3,679,441) (3,679,441) Interim cash dividend - September 2012 - - - - - - (2,759,581) (2,759,581) Balance as at December 31, 2012 9,198,601 - 9,702,528 399,782 15,550,960 18,600,000 35,424,921 88,876,792 Profit after taxation for the year ended December 31, 2013 - - - - - - 21,495,338 21,495,338 Remeasurement of defined benefit plans - net of tax - - - - - - 49,373 49,373 Exchange differences on translation of net investment in foreign branches - - - 198,410 - - - 198,410 Transferred from surplus on revaluation of fixed assets to unappropriated profit - net of tax - - - - - - 35,788 35,788 Transferred to statutory reserve - - - - 2,149,534 - (2,149,534) - Transfer to reserve for issue of bonus shares - 919,860 - - - - (919,860) - Issue of bonus shares - December 2012 919,860 (919,860) - - - - - - Final cash dividend - December 2012 - - - - - - (2,759,581) (2,759,581) Interim cash dividend - March 2013 - - - - - - (3,541,471) (3,541,471) Interim cash dividend - June 2013 - - - - - - (3,541,470) (3,541,470) Interim cash dividend - September 2013 - - - - - - (3,541,461) (3,541,461) Balance as at December 31, 2013 10,118,461 - 9,702,528 598,192 17,700,494 18,600,000 40,552,043 97,271,718 For details of dividend declaration and appropriations, please refer note 45 to these financial statements.