ubl annual report 2010

• Honesty and integrity

• Commitment and dedication

• Fairness and meritocracy

• Teamwork and collaborative spirit

• Humility and mutual respect

• Caring and socially responsible

[ Core Values ]

[ Mission ]• Set the highest industry standard for quality, across all areas of our operation, on a sustained basis

• Optimize people, processes and technology to deliver the best possible financial solutions to our customers

• Become the most sought after investment and

• Be recognized as the employer of choice

[ Vision ]To be a world class bank dedicated to excellence and to surpass the highest expectations of

our customers and all other stakeholders.

[ Contents ]Company Information

Directors’ Profiles

Directors’ Report to the Members

Statement of Corporate Social Responsibility

President & CEO Review

Growth at a Glance

International Network

Shari'ah Advisor's Report

Statement of Compliance with the Code of Corporate Governance

Review Report to the Members on Statement of Compliance with Best Practices of Code of Corporate Governance

Statement of Internal Controls

Auditors’ Report to the Members

Unconsolidated Statement of Financial Position

Unconsolidated Profit & Loss Account

Unconsolidated Statement of Comprehensive Income

Unconsolidated Cash Flow Statement

Unconsolidated Statement of Changes in Equity

Notes to and forming part of the Unconsolidated Financial Statement

Annexure ‘A’ as referred to in note 9.8 of Bank’s Unconsolidated Financial Statements

Annexure ‘B’ as referred to in note 10.7 of the Bank's unconsolidated and consolidated financial statements

Annexure ‘C’ as referred to in note 11.7 of Bank’s Unconsolidated Financial Statements

Annexure ‘D’ of the Bank's Unconsolidated Financial Statements


Consolidated Statement of Financial Position

Consolidated Profit & Loss Account

Consolidated Statement of Comprehensive Income

Consolidated Cash Flow Statement

Consolidated Statement of Changes in Equity

Notes to and forming part of the Consolidated Financial Statements

Annexure 'A' as referred to in note 9.8 of Group's Consolidated Financial Statements

Annexure 'C' as referred to in note 11.7 of Group's Consolidated Financial Statements

Annexure 'D' of Group's Consolidated Financial Statements

Consolidated Statement of Financial Position (in US Dollars)

Consolidated Profit and Loss Account (in US Dollars)

Categories of Shareholders

Pattern of Shareholding

Notice of 51st Annual General Meeting

Statement of Material Facts

Form of Proxy

02

03

06

12

13

17

21

23

25

26

27

29

30

31

32

33

34

35

114

122

158

166

167

168

169

170

171

172

173

264

275

284

285

286

287

288

290

292

United Bank Limited02

Board of DirectorsHis Highness Sheikh Nahayan Mabarak Al NahayanChairman

Sir Mohammed Anwar Pervez, OBE, HPkDeputy Chairman

Mr. Omar Z. Al AskariDirector

Mr. Zameer Mohammed ChoudreyDirector

Mr. Muhammad Sami SaeedDirector

Mr. Seerat AsgharDirector

Mr. Amin UddinDirector

Mr. Arshad Ahmad MirDirector

Mr. Atif R. BokhariPresident & CEO

Committees of the Board

Board Audit CommitteeMr. Zameer Mohammed ChoudreyChairman

Mr. Muhammad Sami SaeedMember

Mr. Amin UddinMember

Mr. Aqeel Ahmed NasirSecretary

Board Human Resource &Compensation CommitteeMr. Omar Z. Al AskariChairman

Mr. Seerat AsgharMember

Mr. Atif R. BokhariMember

Mr. Jamal NasirSecretary

Board Risk Management CommitteeMr. Omar Z. Al AskariChairman

Mr. Arshad Ahmad MirMember

Mr. Atif R. BokhariMember

Mr. Ali SameerMember

[ Company Information ]

Chief Financial OfficerMr. Rayomond Kotwal

Company Secretary & Chief Legal CounselMr. Aqeel Ahmed Nasir

Registered Office13th Floor, UBL Building,Jinnah Avenue, Blue Area,Islamabad, Pakistan.

Head OfficeState Life Building No.1,I.I. Chundrigar Road,Karachi - 74000, Pakistan

Share RegistrarM/s. THK Associates (Pvt.) LimitedGround Floor, State Life Building No. 3,Dr. Ziauddin Ahmed Road,Karachi - Pakistan

AuditorsM/s. Ernst & Young Ford Rhodes Sidat Hyder,Chartered Accountants

M/s. BDO Ebrahim & Co.,Chartered Accountants

Legal AdvisorsM/s. Mehmood Abdul Ghani & Co.,Advocate

ContactsUAN: 111-825-111Contact Centre: 111-825-888Website: www.ubl.com.pk

Annual Report 2010 03

[ Directors Profile ]

Sheikh Nahayan Mabarak Al NahayanChairman, Board of Directors of United Bank Limited

The Chairman of the Board, Sheikh Nahayan Mabarak Al Nahayan'slife and career have been characterized by creativity, innovation, anddedicated public service. In his role as the Minister of Higher Educationand Scientific Research, he has guided and shaped higher educationin the United Arab Emirates and has established a successful modelfor higher education throughout the Gulf region.

In private business, Sheikh Nahayan is an active, successfulbusinessman, both within the United Arab Emirates and on theinternational stage. He heads the Abu Dhabi Group, one of the largestinternational investors in Pakistan, with interests in banking, tele-communications, pharmaceuticals, construction, petrochemicals,hotels, and real estate. He is chairman of the board of many importantcompanies, including Chairman of the Union National Bank in theUAE, Founder and Chairman of Warid Communications, Founder ofBank Al-Falah, in addition to being the chairman of United BankLimited.

In business, Sheikh Nahayan insists that all his projects must be “valuebased” as well as “goal driven.” Those who would work with him musthave integrity, a sound ethical touchstone, and a genuine concern forthose who are affected by the actions they take and the decisionsthey make. Sheikh Nahayan sees his role as one who sets standards,serves as a role model, and insists on accountability. He is also agreat believer in the social responsibility of private business, whereethics, morality, and transparency are important and where theoperations, practices, and attitudes of private companies must haverelevance to contemporary community values and needs.

A noted patron of the arts, Sheikh Nahayan strongly supports a widerange of activities, from natural history to music and culture, fromnational heritage to sports. He is a strong proponent of advancedtechnology and global best practices in education and business. Anactive philanthropist with a high sense of social responsibility, hechampions many humanitarian causes and provides strong supportfor individuals with disabilities. He also chairs and actively supportsmany groups and associations. These include: the Abu Dhabi Musicand Arts Foundation, the UAE Natural History Group, the MédecinsSans Frontières in the UAE, the Society of History and HistoricalHeritage of the UAE, The Millfield Association in the Arabian Peninsula,the Young Presidents Organization (YPO), the Abu Dhabi Cricket Club,the UAE Table Tennis Federation, the Arab Universities Sports Federation,and Friends of Al-Quds University in Abu Dhabi. A strong supporterof all cultural activities in Abu Dhabi and the UAE, including literature,theater, music, painting, sculpture, photography, and folk arts, SheikhNahayan is a regular patron of art exhibitions and heritage festivals.

Sheikh Nahayan is also a recognized leader in dealing with the majorsocial and economic issues that impact the United Arab Emirates andthe Arab region. He has played a major role in policy formulation relatedto the economic and social development of the United Arab Emirates. Sheikh Nahayan has chaired several cabinet committees on manpowerplanning and social development in the United Arab Emirates;committees charged with formulating policies for human and socialdevelopment in the country. He is an accomplished public speaker.He gives more than 150 public speeches and presentations everyyear. He is also an active sportsman. His sports hobbies includehorseback riding, flying helicopters and light aircraft, and falconry.

Sheikh Nahayan is the recipient of many national and internationalhonors and awards in addition to numerous honorary degrees fromuniversities around the world.

Sir Mohammed Anwar Pervez, OBE HPkDeputy Chairman

Sir Mohammed Anwar Pervez, OBE HPk is the Deputy Chairman ofthe Board of Directors of United Bank Limited since 19 October, 2002.He is also the Chairman of Bestway (Holdings) Limited, UK & itssubsidiaries, which include Batleys Limited in UK, Bestway Cementin Pakistan & Bestway Northern Limited in UK.

Sir Anwar began his career in food business in 1963 when he openeda mini supermarket in London. He ventured into the cash & carrybusiness in 1976 and has been responsible for growing Bestway intothe second largest cash & carry operator in the UK.

Sir Anwar was awarded the Order of the British Empire (OBE) in 1992and was conferred the title of Knight's Bachelor in 1999. In 2000 hewas awarded Hilal-e-Pakistan.

In 2005, Sir Anwar Pervez was voted winner of the prestigious GrocerCup for Outstanding Business Achievement by the Institute of GroceryDistribution, UK.

In 2006 he received Sitra-e-Essar and was chosen as the MasterEntrepreneur - UK at the Ernst & Young Entrepreneur of the Year 2006Awards.

He is also the Chairman of Bestway Foundation UK and Patron-in-Chief of Bestway Foundation Pakistan and a charter member of theDuke of Edinburgh Awards Scheme.

Omar Z. Al AskariDirector

Omar Ziad Al Askari is the Chairman and Chief Executive Officer ofUnited Technical Services. In 1972 he attained an MBA degree fromthe Kellogg Graduate School of Management at Northwestern University,having graduated in 1971 from the University of Oregon with a BBAdegree in business administration. He is a Certified Public Accountant.He began his career with Arthur Andersen & Co. in 1972 where hespecialized in audit and management consulting.

In 1976, he assumed control of Technical Services and SupplyCompany, a family concern based in Abu Dhabi, United Arab Emirates.In 1980, Mr. Al Askari established United Technical Services (UTS),now a leading force in sales and service of engineered products tothe oilfield and building services industries in the United Arab Emirates.He has served on numerous public and private company Boards.Currently he is a member of the Board of Directors of United BankLimited and is Chairman of AlFalah Exchange Co.

Mr. Al Askari served as International President of the Young Presidents'Organization in 1999-2000. He is a member of the World Presidents'Organization, the Chief Executives Organization, the American Instituteof Certified Public Accountants, Illinois CPA Society and the KelloggAlumni Advisory Board. He is a director of the Emirates Cricket Board.


Zameer Mohammed ChoudreyDirector

Mr. Zameer Mohammed Choudrey has been a Member of the Boardof Directors of United Bank Limited since 19 October, 2002. He isChairman of the Board Audit Committee. He is also a Director of UBLInsurers Limited.

He is Chief Executive of Bestway Group, which is among the top tenfamily businesses in the UK with annual turnover of £2.1 billion. TheGroup's wholesale operations are the 2nd largest in the UK with an18% market share. Its cement operation is the second largest cementmanufacturer in Pakistan.

Zameer is a Chartered Accountant by profession. He joined BestwayGroup as a financial controller in 1984. In 1990, he was promotedas the Group Finance Director. In 1995, he was given additionalresponsibilities of business diversification both in UK and Pakistan andwas promoted as Chief Executive of Bestway Cement Limited. Hewas appointed as the Group CEO in 2004.

He is a fellow of the Institute of Chartered Accounts of England &Wales and a member of the Institute of Directors.

Zameer is a trustee of Bestway Foundation UK and Chairman ofBestway Foundation Pakistan. He is also a trustee of Caravan andCrimestoppers.

Muhammad Sami SaeedDirector

Mr. Muhammad Sami Saeed has been appointed as Director of UnitedBank Limited by the Government of Pakistan with effect from26 February 2008. He is also a Member of the Board Audit Committeeof the Bank. He did his M.A. from Punjab University in 1976 and post-graduation in Development Economics from University of Cambridge,UK, in 1986. He has done professional courses in economicmanagement and public finance from the IMF Institute, Washingtonand Kennedy School of Government, Harvard University, USA.At present, he is Additional Chief Secretary, Government of Punjab.

Prior to this, he was Chairman of Planning & Development Board,Government of Punjab, Additional Finance Secretary (Banking),Government of Pakistan. He also worked as Joint Secretary/AdditionalSecretary in Prime Minister's Secretariat (2006-2008), Secretary, Excise& Taxation Department (2002-2006), Secretary Agriculture (1998-99)in Government of Punjab and Deputy Commissioner Faisalabad (1990-93). He joined the Civil Service of Pakistan (District ManagementGroup) in 1980.

He also attended various international conferences and took part inbilateral negotiations in many countries as member of Government ofPakistan delegation. In January 2007, he attended World EconomicForum 2007 in Davos, Switzerland, as a member of the Pakistandelegation headed by the Prime Minister of Pakistan.

Amin UddinDirector

Mr. Amin Uddin has been appointed as member of Board of Directorsof United Bank Limited with effect from 5 March 2009. He is a memberof Board Audit Committee of UBL. He is also a Director of UBL InsurersLimited.

He did Banking Management course in 1986-87 from McGill University,Canada and B.A. (Economics and Statistics) from Punjab University,Lahore. He also attended various international professional trainingprograms.

He has a 40 years experience in Pakistan, Middle East, Europe, Africa& Canada. He worked in Ecobank Group, a leading Pan-Africancommercial banking group (1991-2002). He also worked in Bank ofCredit and Commerce INT (1977-1990) and Habib Bank Limited(1967-1977).


Arshad Ahmad MirDirector

Mr. Arshad Ahmad Mir, appointed as member of Board of Directorswith effect from 26 October 2009, has over four decades of extensivecorporate experience in financial services, oil industry, managementconsultancy, manufacturing and wholesale distribution businesses.

He has served with major corporate entities in areas of generalmanagement, corporate planning, project management, complianceand consultancy. Geographical coverage of his corporate roles andresponsibilities encompass Pakistan, Middle East, Africa, UK & Europe.

Arshad Mir is a member of Institute of Chartered Accountants andInstitute of Bankers, UK. He has attended various management coursesand conferences including Advanced Management Programme ofLondon Business School.

He is also a member of the Board Risk Management Committee ofthe Bank.

Seerat AsgharDirector

Mr. Seerat Asghar has been appointed as Director of United BankLimited by the Government of Pakistan with effect from 30 March,2010. He is also a member of the Human Resources Committee ofthe Bank. Mr. Asghar has a vast experience gathered over a span ofmore than twenty nine years in public service at key GOP posts. Hebrings with him a rich professional and academic experience. He holdsan LLB and Master's degree in Political Science from Punjab University,Lahore. His last academic pursuit was at the prestigious CornellUniversity, USA, where he attended Executive Development Programin Food and Agriculture Business Management.

With a strong base in “Executive Leadership Development” fromHarvard University, he has developed a gradual niche in ProjectManagement, Procurement, as well as macro economic planning,resulting in representation of Pakistan at key international foras likeInternational Conference on E-Procurement In Seoul - Korea, TokyoUbiquitous Network Conference, Conference on Hazard RiskManagement at Delhi - India, 25th Session of the International GrainCouncil at London - UK, 133rd Session of the FAO Council and 34thSession of FAO Conference at Rome - Italy, US-Afghanistan-PakistanAgricultural Trilateral Conference In Istanbul, Turkey.

At present, he is Additional Secretary, Ministry of Finance, Governmentof Pakistan.

Atif R. BokhariPresident & CEO

Mr. Atif R. Bokhari, currently President & CEO, United Bank Limited(UBL) is a seasoned banker with extensive experience in domesticand international banking. He started his banking career in 1985 withBank of America, where he handled diverse assignments over a periodof 15 years. Subsequent to leaving Bank of America in July 2000,Mr. Bokhari joined Habib Bank Limited wherein he was Head ofCorporate and Investment Banking.

Mr. Bokhari was appointed as President & CEO of UBL in May 2004(18 months after privatization). Since then UBL has ventured into newdiversified business and revenue streams namely consumer financing,E-commerce, asset management and general insurance.

Mr. Bokhari holds the office of Chairman or Director in several UBLGroup companies. He is also a Director of First Women Bank Limitedand is very actively involved with a private sector program for thedevelopment of education in Karachi. Specifically he is a Director forthe envisaged Karachi Business School affiliated with the JudgeBusiness School, Cambridge, UK. He has been appointed as Chairmanof the Human Resource Committee of the Institute of Bankers inPakistan, which is headed by the Governor State Bank of Pakistan.He is also a member of the Executive Committee of Pakistan Banks'Association.

On behalf of the Board of Directors, I am pleased to present to youthe 52nd Annual Report of United Bank Limited for the year endedDecember 31, 2010.

Financial Highlights

UBL achieved a profit after tax of Rs 11.2 billion which is 21% higherthan the corresponding period last year and translates into earningsper share of Rs 9.12 (2009: Rs 7.51). On a consolidated basis, UBLachieved a profit after tax of Rs 11 billion, an increase of 16% over2009.

The Board of Directors' is pleased to recommend a Final cashdividend of Rs 4 per share i.e. 40% and a bonus share issue of Nilfor the year ended December 31, 2010, bringing the total cashdividend for the year 2010 to 50%.

Despite the challenging economic environment, UBL has achieveda profit before tax of Rs 17.7 billion. This is 26% higher than lastyear as a result of continued improvement in operating efficiencyand margins. Provisions for the year declined substantially due tothe Bank's prudent approach given the difficult credit environmentwhilst the NPL formation has also reduced year on year.

Net interest income before provisions increased to Rs 34.1 billion,4% higher than last year. The Bank's low cost deposit efforts resultedin an 80 bps reduction in the cost of deposits over last year. However,the yield on earning assets declined as average 6M KIBOR was39 bps lower in 2010 compared to 2009. Consequently, net interestmargin increased from 6.9% in 2009 to 7.1% in 2010.

Total provisions of Rs 8.1 billion for 2010 were significantly lowercompared to Rs 13.3 billion in 2009 whilst our coverage at December2010 stands at 69%. As a result, net credit loss ratio improved from3.2% in 2009 to 2.3% in 2010. Net interest income after provisionsis therefore up 28% to Rs 26.1 billion.

Fees and commissions generated from core banking businessesincreased by 7% to Rs 6.3 billion as the bank significantly increasedits market share of home remittances, and due to an overall growthin trade volumes and cross-sell of bancassurance. Exchange incomeincreased by 36% to Rs 1.7 billion as a result of higher transactionvolumes and better leveraging of market opportunities. In 2009, thebank recorded significant capital gains both on fixed income securitiesin the falling rate environment, as well as on equity securities as thestock market increased rapidly post the 2008 crisis. Consequently,capital gains reduced in 2010 by Rs 471 million. This, coupled withexceptional derivatives gains booked in the first half of 2009 resultedin the Bank recording lower Non-interest income, which reduced by11% from the prior year.

Focused Cost Management

Despite significant inflationary pressures (December YoY CPI of15.5%), overall administrative expenses increased by only 7.0% overlast year. Of this increase, nearly 60% (or Rs 692 million) was as aresult of business building activities such as advertising spend andinvestments in IT, while 13% (approximately Rs 150 million) was dueto the impact of Rupee devaluation on International expenses which,in US dollar terms, were restricted to 2009 levels.

UBL successfully managed to restrict the rise in premises and utilitycosts to 9% over last year, a considerable achievement given thespiraling increase in utility costs. Outsourced service charges increasedby 15%. Some of these increases were partially offset by reducedpersonnel costs which declined by 3.7%.

Rationalized Balance Sheet

Gross advances have reduced by 3.6% as a result of rationalizationacross our portfolios and more prudent lending. The advances todeposits ratio (ADR) decreased from 78% in December 2009 to 67%in December 2010. The bank increased total deposits by 11.9%over 2009 levels but at a significantly reduced cost, in line with itsstrategy of replacing high cost deposits with lower cost current andsavings accounts. The Bank's domestic CASA increased from 76%in December 2009 to 78% in December 2010. Similarly, the bank'sdomestic low cost deposit mix improved from 66% in December2009 to 68% in December 2010.


[ Directors’ Report to the Members ]

18.0

15.0

12.0

9.0

6.0

PBT PAT

9.2

11.2

Rs. in Billion

17.7

14.0

2009 2010

36

34

32

30

Net Interest Income Net Interest Margin

2009

7.1%

6.9%

7.3%

7.0%

6.8%

6.5%

2010

32.9

34.1

Rs. in Billion

15

12

9

6

3

Total Provisions NCL Ratio

2009

2.3%

3.2%

13.3

8.1

3.5%

2.6%

1.8%

0.9%

0.0%2010

Rs. in Billion

We were successful in improving our return on average assets from1.5% in 2009 to 1.7% in 2010. Return on equity also improved from19.5% in 2009 to 19.8% in 2010.

Improved Capital Ratios

UBL's strong internal capital generation resulted in a Rs 6.1 billion(14%) increase in Tier 1 Capital, despite keeping Risk Assets flat.Consequently, the unconsolidated Capital Adequacy Ratio (CAR) ofthe Bank improved from 13.2% in December 2009 to 14.5% inDecember 2010. The Tier-1 CAR of the Bank has also improvedfrom 9.0% in December 2009 to 10.3% in December 2010. On aconsolidated basis, the CAR improved to 15.0% in December 2010(December 2009: 14.0%) while Tier-1 CAR improved from 9.5% inDecember 2009 to 10.4% in December 2010.

Economy Review

The year 2010 remained fraught with challenges, which impactedthe macroeconomic landscape of the country. In the second half ofthe year, record floods inundated nearly 20% of the country andinflicted significant damage to the fragile economy. Continuing severeshortages of power and gas have exacerbated the situation andLarge Scale Manufacturing (LSM), after exhibiting good growth of5% in FY10, remained subdued during the first half of the currentfiscal year. As a consequence, GDP growth estimates for 2010-11have been scaled down to 2.8% from pre-flood estimates of 4.3%.

Inflationary pressures remained active throughout the year, with CPIat 15.5% year-on-year in December 2010 and averaging 13.9% forthe year. Supply chain interruptions caused by crop damage resulted

in volatile food prices and remained a key driver behind surging pricepressures. Escalating power tariffs remained a regular featurethroughout 2010, further fueling inflation.

The fiscal position remained fragile as revenue generation remainedweak whilst expenditures escalated. FY 2010 fiscal deficit stood at6.3% of GDP, far exceeding the IMF target. Furthermore, taxationreforms including the Reformed General Sales Tax (RGST) have notyet been implemented due to severe opposition by political parties.The fiscal slippages and spiraling inflation have resulted in a steadyincrease in interest rates with the State Bank of Pakistan (SBP) raisingthe discount rate by 150 bps since July 2010 to 14.0%. Lack offiscal austerity continues to strain domestic liquidity as banks shifttowards government paper, which in turn has led to further crowdingout of the private sector.

The external account position remained a key positive as the currentaccount deficit for FY 2010 was better than expectations at 2% ofGDP due to higher remittances and aid inflows, services inflows andincreased exports. This trend has continued in FY 2011 as thecountry posted its first half-yearly current account surplus since2003. Pakistan's equity markets also performed well and continuedto attract foreign investment, with the KSE-100 Index gainingapproximately 26% during 2010.

The banking sector of Pakistan has been in a consolidation phasesince the beginning of 2009 due to the country's economicvulnerabilities. The sector has remained focused on deposits, whichgrew by nearly 15% in 2010, with aggressive solicitation of currentand savings accounts (CASA). Credit lending has remained subduedand Gross Advances increased by only around 5% during 2010.The effects of the depressed economic activity, power shortagesand high interest rates have significantly impacted borrowers. Non-Performing Loans (NPLs) have seen a sharp increase of 22%, standingat Rs 494 billion as of December 2010 while infection of the sector'sportfolio has also deteriorated from 12.2% in December 2009 to14.0% in December 2010.

International

UBL's International business continues to be a key segment for theBank. In line with the Bank's overall policy, lending remained cautious,resulting in a reduction of 10% in loans and advances. Revenue fromthe International Business thus declined by 3% from 2009. This wasmore than offset by cost being contained at prior year levels as wellas a 23% reduction in provisions. Consequently, pretax profit increasedby 14% over last year. As the global economy continues to recover,UBL is enthusiastic about the future prospects of the InternationalBusiness. The Bank will explore expansion into new territories whichhave the potential to enhance shareholder value and represent anatural progression from the existing footprint.

Core Banking Platform Implementation (Project Genesis)

Project Genesis continues to move forward as planned and sixbranches went live this year on the new core banking system (CBS).This was a significant milestone as it enabled the Bank to test thecapabilities of the system on a real time basis.

The Customer Service Platform (CSP), a customer relationshipmanagement tool, been rolled out in over 350 branches in 2010 andwill be rolled out across the country in 2011. The Loan OriginationSystem (LOS) has been implemented for Commercial loans andConsumer products. LOS implementation for the rest of the Bankwill be completed by 2012.


Expensive Deposits Low Cost Deposits

197

295

211

340

551492

Dec-09 Dec-10

Rs. in Billion

10.3%

9.0%

Tier 1 CAR Total CAR

13.2%

14.5%

2009 2010



UBL is already starting to see the technological benefits and theimproved service capability that these systems will bring to the Bankand its customers.

Key Developments During 2010

Watan Card

The Government of Pakistan (GOP) selected UBL to disburseRs 20,000 each to over one million families displaced by the flooding.For this effort UBL issued debit cards, called “Watan cards”, tobeneficiaries identified by NADRA and GOP. Additional plannedinstallments in 2011 will assure beneficiaries have multiple opportunitiesto use (and get used to) the cards. UBL's ultimate goal is to retainthe beneficiaries as Branchless Banking customers by introducingthem to the benefits of using additional services such as savings,remittances, and bill payments that are accessible via their Watancard Omni accounts.

The Bill & Melinda Gates Foundation will contribute US$1.5 millionthrough MEDA (Mennonite Economic Development Association) tosupport UBL's management and administrative costs of procuringand distributing the cards as well as the cost of ongoing disbursementsvia Omni Agents. The funding will also support MEDA in monitoringand documenting the UBL Watan experience, in order to sharelearnings with the wider microfinance and financial sector communitiesglobally.

UBL Omni

UBL Omni commenced commercial operations in April 2010 andwith it UBL achieved the honor of being the first commercial bankto launch branchless banking operations in Pakistan. With Omni,UBL aims to attract the unbanked population via its retail businessagents called Omni Dukaans which are located in over 350 townsand cities of Pakistan and currently number more than 2,300.

Pakistan has nearly 65 million unique mobile phone subscriberswhilst it has less than 20 million individuals with bank accounts.This provides the Bank with the unique platform of being able toinclude a large segment of the country's unbanked population andprovide them financial services which have previously remainedinaccessible to them.

In recognition of UBL's innovative product offering, strong managementcredentials and admirable goals of financial inclusion, the Bill andMelinda Gates Foundation has given UBL a grant of US$6.9 millionthrough ShoreBank International to promote UBL Omni and ensureits reach to the widest possible community.

Launch of UBL First Minor Account

The Bank launched 'UBL First Minor PLS Savings Account' in 2010,a savings account designed especially for children, with excitingbenefits that are unmatched in the industry. By providing an avenueto parents for financial planning for their children, it should alsoincrease the number of parents in the banking system, as well asdevelop a new generation of customers loyal to UBL. This producthas already generated a high degree of interest amongst childrenvia the Bank's youth outreach and social media campaigns.

Launch of UBL Business Partner Plus

UBL launched 'Business Partner Plus' in 2010, the best currentaccount offering in Pakistan. This is a specialized current checkingaccount, with a full menu of services, aimed at providing the necessarytools for individuals, traders, businessmen and commercial customersto transact their entire bank related business activities nationwidethrough a single platform. This product has been a major successstory in its first year of launch.

Signature: Priority Banking

2010 was the first full year of operations for the UBL Priority Bankinglounges launched in November 2009. These exclusive lounges caterto the Bank's existing and potential high-net-worth customers, withrelationship managers trained to offer a range of wealth managementproducts to service customer needs. UBL has had a successfulexperience with this offering and plans to expand this businessacross Pakistan in the future.

Launch of Pakistan's First Premium Debit Card

In 2010, UBL in collaboration with MasterCard, announced the launchof Pakistan's first Premium Debit MasterCard, exclusively designedto cater to the needs of affluent consumers in Pakistan. Customerswho fulfill the stipulated eligibility criteria are being offered this card,as part of UBL's continuing commitment to offering the best productsto its customers. In addition to the features and privileges inherentin the card program, UBL has also teamed up with various partnersto provide preferential benefits to its cardholders.

Wiz for ACCA

Wiz is a prepaid debit card which was launched in 2008, and UBLis the only bank in the country to have this offering. Customers candeposit up to a limit of Rs 200,000 in their debit card and use it allover the world. The card can be topped-up for usage (just like aprepaid mobile phone connection) from any UBL online branch.

UBL entered into a partnership with the Association of CharteredCertified Accountants, UK (ACCA), a global body of accountingprofessionals, which has thousands of registered students in Pakistan.In this connection, the Bank has launched a Wiz prepaid cardspecifically for ACCA students, which is especially convenient tothem in making fee payments online. This is a key initiative that isexpected to increase awareness and usage of the Wiz card.

Credit Ratings

The credit rating company JCR-VIS re-affirmed the bank's long-termentity rating at AA+ and the ratings of its four subordinated debtinstruments at AA. The short term ratings remain at A-1+ which isthe highest rating denoting the greatest certainty of timely paymentsby a financial institution. All ratings for UBL have been assigned aStable outlook.

Capital Intelligence (CI), the international credit rating agency, hasre-affirmed UBL's Foreign Currency long-term rating at B-, while it'sForeign Currency short-term rating has been upgraded from C to Bin line with CI's sovereign ratings action on Pakistan. In addition, theBank's Financial Strength rating has been re-affirmed at BB+, withthe Outlook upgraded from Negative to Stable based on the Bank'sstrong performance in 2009 and the first half of 2010.


Future Outlook

Going forward, achieving macroeconomic stability remains a keychallenge for Pakistan. Continued power and gas shortages alongwith high borrowing costs are expected to place further pressure onthe LSM sector and consequently on GDP growth. Inflationarypressures are expected to remain high, averaging close to 15-16%for 2011.

Achieving fiscal austerity remains of utmost significance. The deficittarget for 2011 is likely to be breached due to lower revenue generationalong with weak expenditure control. However, the external accountposition should remain healthy as higher remittances, services inflowsand increased exports are likely to continue during 2011. Inflationarypressures combined with the weak fiscal position are expected toresult in a continued tight monetary policy during 2011.

Given the macroeconomic scenario, UBL's focus will remain onproactively managing its asset portfolio while exploring the acquisitionof quality assets. The Bank will continue to grow its low cost depositbase by more efficiently leveraging its branch network. UBL alsoplans to significantly expand its Branchless Banking product to makefinancial services available to a broader range of people. The Bankis confident that, with the investments it has made in people,technology and products, it is well positioned for further growth.

Statement Under Section XIX of the Code of CorporateGovernance

The Board is committed to ensure that requirements of corporategovernance set by Securities and Exchange Commission of Pakistanare fully met. The Bank has adopted good Corporate Governancepractices and the Directors are pleased to report that:

• The financial statements present fairly the state of affairs of theBank, the result of its operations, cash flows and changes in equity.

• Proper books of account of the Bank have been maintained.

• Appropriate accounting policies have been consistently appliedin preparation of these unconsolidated financial statements,except for the changes in the accounting policies as describedin note 5.1. Accounting estimates are based on reasonable andprudent judgment.

• International Accounting Standards, as applicable to Banks inPakistan have been followed in the preparation of the Accountsof financial statements without any departure there-from.

• The system of internal control in the Bank is sound in design,and effectively implemented and monitored.

• There are no significant doubts upon the Bank's ability tocontinue as a going concern.

• There has been no material departure from the best practicesof Corporate Governance.

• The Board has appointed the following three Committees withdefined terms of references

• Board Risk Management Committee

• Board Human Resources & Compensation Committee

• Board Audit Committee

• Performance highlights for the last six years are attached tothese unconsolidated financial statements.

The Bank operates five post retirement funds Provident Fund, Gratuity,Pension, Benevolent, and General Provident Fund and two benefitschemes Post Retirement Medical and Compensated Absences.Gratuity and Provident Fund Schemes are available to staff whojoined the bank post privatization. The value of investments basedon latest audited financial statements as at December 31, 2009 ofthese funds is as follows:

Amounts in '000

Employees' Provident Fund 2,829,590

Employees' Gratuity Fund 297,030

Staff Pension Fund 6,132,050

Staff General Provident Fund 1,296,753

Officers / Non-Officers Benevolent Fund 787,303

Meetings of the Board

During the year under review, the Board of Directors met six times.The number of meetings attended by each director during the yearis shown below:

Name of the Director Meetingsattended

His Highness Sheikh Nahayan Mabarak Al NahayanChairman 03

Sir Mohammed Anwar Pervez, OBE, HPkDeputy Chairman 06

Mr. Omar Z. Al AskariDirector 06

Mr. Zameer Mohammed ChoudreyDirector 06

Dr. Ashfaque Hasan Khan *Director 01

Mr. Muhammad Sami SaeedDirector 06

Mr. Amin UddinDirector 06

Mr. Arshad Ahmad MirDirector 06

Mr. Seerat Asghar *Director 05

Mr. Atif R. BokhariPresident & CEO 06

The Board appreciated the services rendered by Dr. Ashfaque HasanKhan, the out going director.

* Mr. Seerat Asghar was appointed as a Director of UBL in place ofDr. Ashfaque Hasan Khan with effect from March 30, 2010.



Pattern of Shareholding

The pattern of shareholding as required u/s 236 of the Companies Ordinance, 1984 and Articles (xix) of the Code of Corporate Governance isgiven below :

Shareholders No. of Shares % of ordinary Shares

Bestway Group (BG) 380,355,324 31.07

Abu Dhabi Group (ADG) 312,165,804 25.50

State Bank of Pakistan 238,567,381 19.49

Government of Pakistan 3,354,550 0.27

Privatization Commission of Pakistan 1,714 0.00

General Public & others 169,818,347 13.87

NIT 1,307,327 0.11

Bank, DFIs & NBFIs 15,267,751 1.25

Insurance Companies 7,355,969 0.60

Modarabas & Mutual Funds 17,482,437 1.43

Securities & Exchange Commission of Pakistan 1 0.00

* International GDRs (non voting shares) 78,503,082 6.41

TOTAL OUTSTANDING SHARES 1,224,179,687 100.00

* ADG also holds 4.80% additional shares in the form of GDRs.

The aggregate shares held by the following are:

No. of shares

a) Associated Companies, undertakings & related parties - Bestway (Holdings) Limited 222,775,183

- Bestway Cement Limited 93,649,744

- Al Jaber Transport & General Contracting 59,993,236

b) NIT

-National Bank of Pakistan - Trustee Department NI(U)T Fund 1,302,665

-National Investment Trust Limited 4,662

c) Public sector companies and corporations 147,515

d) Banks, DFIs, NBFIs, Insurance Companies, Modaraba & Mutual Funds 40,106,157

e) Directors / CEO / Executives

-H.H. Sheikh Nahayan Mabark Al Nahayan 78,942,102

-Sir Mohammed Anwar Pervez,OBE,HPk 62,433,163

-Omar Z. Al Askari 14,998,307

-Zameer Mohammed Choudrey 1,497,234

-Amin Uddin 2,750

-Atif R. Bokhari 931,519

-Other Executives * 2,985,792

* Figure for Other Executives includes 942 shares held by their spouses and minor children.

Shareholders holding 10% or more voting interest No. of shares % -State Bank of Pakistan 238,567,381 19.4879

-Bestway (Holdings) Limited 222,775,183 18.1979

There was no trading in UBL shares carried out by any of the directors, CEO, CFO, and Company Secretary, or their spouses and minor childrenduring the year.


Risk Management Framework

The Bank has an integrated Risk Management structure in place.The Board Risk Management Committee (BRMC) oversees the wholerisk management process of the Bank. The Risk and Credit PolicyGroup assists the BRMC. The Group is organized into the functionsof Credit Administration, Market and Treasury Risk, Commercial andFI Credit Policy, Consumer and Retail Credit, Credit Risk Managementand Operational Risk & Basel II. Each risk category is headed by asenior manager who reports directly to the Group Executive, Riskand Credit Policy.

As Pakistan progresses through a period of eco-political turmoil,UBL strengthened its capacity for identifying and reducing risk. Theyear saw emphasis on close monitoring of the asset portfolio acrossall segments, including actively working with clients to help themwith repayments and restructuring. Steps were also taken to enhancethe efficiency of the credit approval process through appropriatedelegation of approval authority. A holistic Risk Management Policywas finalized in 2010. This is an umbrella policy, providing an integratedframework to encompass Credit, Liquidity, Agricultural, International,Market and Human Resource risk, aimed at portfolio qualityimprovement. A comprehensive Agriculture Credit Policy was alsodeveloped and finalized over the year. The formulation and approvalof these policies involved input from the Board and senior managementto ensure that risks were accurately assessed. In order to keepbusinesses aware of market and industry developments, the CreditPolicy & Research Division provided regular updates on majormacroeconomic issues and specific industry developments.

The Capital Adequacy Ratio (CAR) was maintained well above theprescribed regulatory threshold throughout the year. The CARcalculation process has been optimized through automation andsystem based reporting is expected to commence from 2011. TheBank continued its efforts towards implementing the OperationalRisk Management Framework across the bank and achieved thedeployment of operational risk monitor, a key milestone in this regard.The Bank plans to move to the Advanced Approach for Basel II,including all its components and has prepared a roadmap towardsimplementation.

In order to automate the loan origination process for Corporate,Commercial and SME borrowers, a Loan Origination System (LOS),one of the most critical components of UBL's new Core BankingSystem, has been implemented. LOS facilitates routing of creditapplications created on a predefined format to recommenders andapprovers electronically. During the year, the LOS has been successfullyimplemented for Consumer & SME loans. User Acceptance Testing(UAT) for Corporate and Commercial credit applications on LOS hasbeen done successfully and Bank wide roll out covering all segmentsand customers is expected in 2012.

Consumer financing portfolios remain stressed around the countrydue to the high inflationary environment with consequent escalationin borrowing costs. UBL continued to effectively manage its portfolioand developed a behavior scoring model as a risk management toolto facilitate automated credit limit management, collectionsmanagement and transaction authorization. The Bank is in theprocess of developing an Application Scoring model for identificationof quality acquisition prospects across the consumer portfolio.

The Market and Treasury Risk unit has continued to review riskpolicies and procedures to ensure that operating controls are robustand limits are in place to manage risk without unduly hamperingbusiness. Towards this end, several initiatives have been taken duringthe current year. For the equity trading portfolio, a Value-at-Risk

approach is being back tested and fine-tuned whereas for thederivatives portfolio a revised mechanism has been rolled out tomeasure and monitor pre-settlement risk. Market Risk Limit settingmechanisms have also been updated to place greater reliance onquantitative rather than subjective methods. For the banking book,several analytical tools are under review to supplement stress testingrequirements.

The Bank also continues to invest in systems and people as part ofits process of continuously strengthening the risk managementfunction.

Auditors

The present auditors M/S. Ernst & Young Ford Rhodes Sidat Hyder,Chartered Accountants and M/S. BDO Ebrahim & Co., CharteredAccountants retire and being eligible, offer themselves for re-appointment in the forthcoming Annual General Meeting.

Conclusion

In conclusion, I extend my thanks and appreciation to UBLshareholders and customers as well as to my fellow members of theBoard of Directors for their trust and support. We acknowledge theefforts and dedication demonstrated by our staff and would also liketo express our earnest appreciation to the Government, the StateBank of Pakistan, the Securities & Exchange Commission and otherregulatory bodies for their continued support.

For and on behalf of the Board,

Nahayan Mabarak Al NahayanChairman

Abu DhabiFebruary 21, 2011


[ Statement of Corporate Social Responsibility ]

The commitment to continuously create value for its customers,employees and local communities is a major priority of UBL. In 2010,the Bank provided support of over Rs 80 million for CSR initiativesprincipally in the areas of education, health care and communitydevelopment. UBL's efforts in the field of CSR were also acknowledgedby the Pakistan Center for Philanthropy (PCP), an independentorganization, as one of the largest donors to charitable causes inPakistan.

UBL, as a “Contributing Sponsor” of the Karachi Education Initiative(KEI), contributed Rs 40 million to this cause. This initiative aims toset up a world class School of Business and Leadership in Karachi.Additionally, Rs 3.9 million were also donated to other organizationsoperating in the field of education, including The Citizens' Foundationand the Lahore University of Management Sciences.

In the areas of health and community development, UBL contributedover Rs 10 million to the Edhi Foundation, SOS Villages of Pakistan,Marie Adelaide Leprosy Centers, Special Olympics Pakistan, ThePolice Hospital Fund and Friends of Burns Center.

The massive floods across Pakistan in July 2010, resulted in almost20% of the country being inundated, and over 20 million peoplerendered homeless and stripped of basic needs such as food andclean drinking water. UBL initiated a donation program nationwide,accompanied by a significant media campaign, with a pledge tomatch each donation rupee for rupee. UBL's employees also answeredthe call; voluntarily donating one day's salary, which was also matchedby the Bank. These funds were then utilized towards rehabilitationof the flood affectees, with a focus on the provision of clean drinkingwater.

As a result of its previous success and credibility in distributingGovernment aid to the Internally Displaced Persons in Swat, theGovernment of Pakistan chose UBL to route payments of Rs 20,000each to 1 million households displaced in the floods. UBL made thispossible by collaborating with NADRA and using the Bank'sestablished Omni Branchless Banking platform to deliver paymentsto recipients via “Watan”-Visa debit cards. UBL successfully disbursedthe funds in 70 districts of Pakistan in record time, and with atransparency that has been appreciated by several internationaldonor organizations. Recognizing UBL Omni's efforts for financialinclusion of this previously unbanked population, the Bill and MelindaGates Foundation has supported UBL through a US$ 1.5 milliongrant for supporting the Watan project.


[ President & CEO Review 2010 ]

Introduction

Pakistan's weak macroeconomic situation remained under pressureduring 2010, particularly in the wake of the floods that affected alarge part of the country. This was manifested through spiralinginflation driven by escalating food prices and frequent increases inutility rates, rising interest rates and slippages on fiscal targets. Inthis difficult environment, UBL has delivered a healthy growth of 26%on pretax profit.

During the year, the Bank's focus remained on prudent and proactivemanagement of its loan portfolio, low cost deposit growth and controlover costs. The Bank has been successful in these efforts as seenby lower provisions, reduced cost of funds and expense growthsubstantially below inflation levels. UBL also invested in technologyand new products and distribution channels which it believes willhelp the Bank in achieving its ambitious growth plans.

The performance of the Bank's International business also improvedover the last year as the Middle East economies stabilized. Costswere held at prior year levels while active portfolio managementresulted in significantly lower provisions. This business remains akey part of UBL's strategy and the Bank will be looking to consolidateand build on gains achieved this year.

Key financials

Despite the challenging economic environment, UBL has achievedan unconsolidated profit before tax of Rs 17.7 billion, 26% higherthan last year as a result of continued improvement in operatingefficiency and margins.

Deposits grew by nearly 12% as the Bank remained focused onmobilizing low cost deposits. UBL's domestic low cost deposit miximproved from 66% to 68% resulting in a reduction of 80 bps in thecost of deposits. Gross advances reduced by 4% as a result ofrationalization across our portfolios, and more prudent lending which,along with a lower average KIBOR, led to lower asset yields.Consequently, net interest margin increased from 6.9% in 2009 to7.1% in 2010 and Net interest income before provisions increasedto Rs 34.1 billion, 4% higher than last year.

Management of the loan portfolio remained a key priority for theBank which actively worked with borrowers to restructure those withgenuine difficulties while pursuing recoveries from defaulters. Lendingparameters were also tightened to ensure growth of quality assets.The Bank was thus able to reduce provisions to Rs 8.1 billion for2010 from Rs 13.3 billion in 2009, while also slowing the growth innon-performing loans. Net credit loss ratio improved to 2.3% in 2010.

Fees and commissions generated from core banking businessesincreased by 7% to Rs 6.3 billion through growth in home remittances,trade volumes and cross-sell of bancassurance. Exchange incomeincreased by 36% to Rs 1.7 billion as a result of higher transactionvolumes and better leveraging of market opportunities. However,the high capital gains recorded in 2009 were not repeated and thesereduced to Rs 159 million in 2010. Income from the derivativesbusiness also reduced as 2009 results included one-off gains whichwere not expected to recur.

Despite inflation of around 14%, overall administrative expensesincreased by only 7% over last year. Of this increase, the majoritywas for business building activities such as advertising spend andinvestments in IT. UBL remains committed to managing its costsprudently, in the best interests of its shareholders and customers.

UBL's key ratios showed improvement as the unconsolidated CARimproved from 13.2% to 14.5%, while Tier-1 CAR of the Bankimproved from 9.1% to 10.3%. The consolidated CAR also improvedby similar amounts. Shareholder returns also improved as the Returnon Assets improved from 1.5% to 1.7% and the Return on Equityimproved from 19.5% to 19.8%. The advances to deposits ratio(ADR) also reduced from 78% to 67% reflecting the improved liquiditysituation of the Bank.

Retail Bank

The Retail Bank consists of Commercial and Consumer Assets andAgri Lending. This business is also responsible for the majority ofthe branch network and deposit mobilization. In 2010, the RetailBank undertook some major new initiatives and product introductionsto supplement the menu of products and services.

The liabilities and branch banking business had a strong year, resultingin an improved deposit mix. Low cost deposit generation remainedthe key element of the deposit strategy and enabled the Bank toachieve a significantly lower cost of deposits. For the asset businesses,2010 was a year of consolidation, focusing on leveraging the rightmix of technology and people to manage the portfolio. There wasalso a focus on the newly introduced Relationship Model, to bestdeploy the strengths of the branch network in initiating and managingasset relationships.

Market conditions are still not conducive for large scale consumerlending. Consequently, the focus was on quality acquisitions, losscontainment from the legacy portfolio, and cost rationalization. Thisstrategy was complemented with key strategic alliances on both theacquisitions and the collections fronts, and initiatives to improve theoffering and service levels to our existing customers to maximizeloyalty.

During 2010, UBL also reached out to two significant segments; onewas the high net worth segment, through Signature, UBL's PriorityBanking offering. This has shown encouraging results in its first yearof operation, and is augmented by the introduction of the PremiumDebit MasterCard, a product which offers a range of benefits to theBank's large base of affluent customers.

The other segment targeted by the Retail Bank was the youth. Over70% of the population of Pakistan is under the age of 21, and varioustargeted offerings were developed for this market. UBL First MinorSavings Account, a product with exciting benefits targeted specificallyat children and their parents, offers a creative vehicle for parents tosave for their children as well as to teach them about sound financialplanning. UBL First will also serve to introduce a new generation toUBL and build customers for life.

Islamic Bank

UBL's Islamic Banking business, “Ameen”, also took steps towardsestablishing itself with an additional dedicated Islamic Banking branchand better leveraging of the availability of Islamic Banking servicesthroughout all UBL branches, including specialist Islamic Bankingwindows in key areas. The business doubled its deposit base in2010, and expects further strong growth in 2011.

Corporate Bank

The Corporate Banking Group at UBL continues to remain a preferredprovider of strategic and structured financial solutions to the top tiercorporate clientele in Pakistan. Backed by an experienced RelationshipManagement team stationed at Regional Corporate Centers across



the country, the team is recognized for their knowledge and innovativesolutions which help maintain the highest quality of service standardsand further allows cross-sell of other UBL products within theInvestment Banking Group, Treasury, Trade Finance and CashManagement.

For the Corporate Bank, 2010 has been a year of proactivemanagement of its loan book, restructuring of stressed assets andrecovery. Despite the prevailing strained credit and economicenvironment, good progress was made as provisions declined by60% and NPL formation reduced substantially. However, with acontinued focused approach towards marketing, fees andcommissions revenue generated during the year increased by 50%over the previous year, primarily due to the innovative products andthe superior client servicing capabilities of the bank in the areas ofTrade Finance, Cash Management and Home Remittances.Complementing this healthy growth, operating cost increase wasrestricted to only 5%.

The Cash Management Business sustains its market leadershipposition and continued to provide around 31% growth over last year.Overall transaction volume handled reached nearly Rs 450 billionthrough provision of industry specific products and solutions forcollections and payments, despite increasing competitive pressures.The migration to the new core banking system (Symbols) is likely tofurther enhance maneuverability in terms of centralized data basemanagement and improved working capital cycle management.

The Home Remittances business during the year has furtherestablished UBL as a lead player, where market share has increasedto 18% recording an aggregate volume of US$1.7 billion. This YOYgrowth in volumes by around 43% is a result of continued supportof the Bank's correspondents all over the globe, persistent marketingefforts, development of new products and high quality servicestandards. UBL continued to launch innovative products for domesticand offshore clients, using its in-house state of the art cashmanagement and net banking solutions. Products like TezraftaarCheque and Account to Account Transfer have been in the marketfor some time while “Tezraftaar Cash” - Cash Over the Counterproduct was introduced during the year and was a significantcontributor towards attainment of these volumes. UBL plans tofurther expand its presence through actively pursuing foreigncounterparty tie-ups with the support from the Pakistan RemittanceInitiative and has already taken several steps in this direction.

Investment Banking

Despite a difficult environment, the Investment Banking Group (IBG)maintained its leadership in the domestic market during 2010. UBLcontinues to build on its Middle East initiative with a significant risein overseas earnings supplementing domestic revenues. A landmarktransaction during 2010 was the successful close of the first eversyndicated project finance transaction in Yemen amounting toUS$ 20 million.

Debt Capital Markets & Syndications remained a strong performerby successfully concluding a number of large and importanttransactions including leading one of the most high profile localmarket transactions of the year, i.e. the Rs 8 billion syndicatedfinancing facility for Qasim International Container Terminal.

Project & Structured Finance remained the largest contributor toIBG's fee earnings for the fifth consecutive year. Focus for the yearwas on soliciting and executing non-fund-based project advisoryassignments domestically, most notably that for a hydro powerproject sponsored by a Government of Korea owned entity. The

Middle East initiative remained a priority area during the year,especially in Yemen and the smaller UAE emirates with a focus onthe Energy and Power sectors.

The Equity & Advisory business emerged as a strong private equityshop within the domestic banking industry, aimed at developing andgrowing a middle-market M&A expertise both in Pakistan and theGCC. Carrying a sustainable deal pipeline into 2011, the businesshas gained significant momentum over the last eighteen months witha notable success being the successful arrangement of foreign directinvestment by a Korean multinational in one of the country's mostnotable food brands.

International

The impact of the global financial crisis that started in 2008 continuedto be felt in 2010, however, in general, macroeconomic stability wasseen in most GCC economies. Oil prices continued to rise andenhanced the revenue generation of two key markets of the franchise,Abu Dhabi and Qatar. The restructuring of the Dubai Worldconglomerate provided a much needed boost and helped reviveinvestor confidence in the region. This was evidenced by the launchof new bonds that were extremely well received and heavily over-subscribed.

The International Business continued to remain focused on liquiditymanagement, asset quality management and expense control.

The Asset portfolio was under constant scrutiny in every territorythrough proactive relationship management and prudent risk taking.Corporate Banking, the mainstay of the bank in most of the overseasoperations, performed well, and the bank continued to do businesswith top rated borrowers. Delinquencies in the unsecured retailportfolio have stabilized; however, the mortgage portfolio in UAEsuffered on account of the further downturn in the real estate market.

The overall lending was very closely monitored, with prudentprovisioning of loans as evidenced by the improvement in thecoverage ratio.

The Bank successfully completed the first syndicated investmentbanking transaction for a private power project in Yemen. This wasthe first ever transaction of its nature in Yemen and also the first everfor the Bank outside Pakistan. It has opened up new avenues forrevenue generation for the international operations and also enhancedthe brand image of the franchise.

Going forward, the international business of the bank is well positionedto build on the momentum started in 2010 with particular emphasison optimizing the existing customer base, focusing on non-fundincome streams and continuing proactive risk management strategies.The business remains alert to potential opportunities and will continueto enhance its presence both in existing and in new markets, whereappropriate returns are available.

Branchless & E-Banking

UBL rolled out the commercial launch of “Branchless Banking” inApril 2010. The array of services offered include basic bankingservices such as account opening, cash withdrawals and depositsas well as several value added services including remittances, billpayments and purchase of mobile airtime. Branchless Banking usershave access to multiple channels including ATMs and Phone Banking.In its first eight months, UBL Omni has managed to grow to a networkof more than 2,300 Dukaans (i.e. retail business agents) spreadacross more than 350 cities and towns of Pakistan. In 2010, more


than 4 million transactions amounting to more than Rs 22 billionwere carried out through the Omni platform, including the paymentsto the flood affected population.

UBL Omni also managed to take the lead in transforming theGovernment to People (G2P) arena in Pakistan by working closelywith the GOP and multilateral agencies. The Bank provided transparentand efficient cash disbursement services for more than one millionflood affected people in KPK, Punjab, Sind and AJK, more than20,000 World Food Program beneficiaries and more than 400,000recipients of the Benazir Income Support Program in different remoteparts of Pakistan. These efforts have led UBL Omni to be recognizedas a benchmark and a role model for G2P payment services notonly locally but also internationally.

UBL Omni was also the recipient of a US$ 1.5 million grant by theBill & Melinda Gates Foundation through MEDA, for supporting theflood relief payments “Watan” project. In addition, the Bill & MelindaGates Foundation has also announced a US$ 6.9 million grantthrough ShoreBank to support enhanced financial inclusion of thecountry's underbanked population through UBL Omni. This grantwill be made available over a period of two years.

UBL Omni continues to create new and more efficient businessmodels and is already providing cash management services toFMCGs, fee collection services to schools and facilitating microfinanceinstitutions in increasing their reach by leveraging the 2,300 strongDukaan network for disbursements and collections services. UBLOmni plans to continue offering new products and services throughits platform. In addition to providing convenience to the Bank'scustomers, this channel also allows UBL to service its branchcustomers more efficiently by leveraging the agent network to divertroutine, repetitive transactions out of the branches.

Within the E-Banking area, products introduced by UBL over theyears such as Click-N-Remit, Click-N-Bank and NRP Direct havealready had wide acceptance. During 2010, UBL's Middle Eastbusiness was enabled to offer “netbanking” service to its customers- a feature that has been eagerly anticipated for a while by the Bank'sclients in those countries. At the same time, the internet bankingplatform is being enhanced locally to enable Corporate and SMEcustomers to also use this facility.

Treasury & Capital Markets

UBL promoted the introduction of SBP's electronic platform for GOPSecurities trading which was launched in January 2010. As a leadingPrimary Dealer, UBL provided support by actively trading on theBloomberg Electronic Bond platform, establishing itself as one ofthe top players for GOP Securities distribution. UBL has also beenranked amongst the top 3 Primary Dealers for the fiscal year 2009-2010.

UBL has been able to strengthen its liquidity management by investingin Securities portfolios which are generating regular inflows. TheInvestments portfolio has grown significantly and UBL has successfullytaken advantage of higher interest rates to optimize portfolio returns.

2010 saw a strong performance from the Treasury Sales desk witha focus towards greater client coverage in FX, Fixed Income andDerivatives products. The Treasury Sales team was strengthenedwith the addition of new dealers, along with formal training for theexisting staff. A separate Fixed Income desk was successfully setup and secondary market activity was doubled, making UBL a leadingplayer in the fixed income market.

A major milestone was the development and implementation of anew FX Sales system allowing streamlining of operational requirementsat all levels, and strengthening the MIS and transaction trackingsystem. Cross-functional training sessions were held for brancheshandling Foreign Exchange transactions, resulting in better clienthandling, transaction booking and efficient reporting. UBL hasimproved the turnover ratio for usage of its allocated limits andincreased its FX trading volumes resulting in substantial increase inprofitability

The Capital Markets team has consolidated and restructured itsEquity Trading portfolio and the Derivatives business continuesto provide innovative solutions and competitive pricing toCorporate clients.

Human Resources

In 2010 UBL maintained its focus on enhancing the quality of thestaff through development initiatives as well as induction of talent atvarious levels. As part of its annual plan, the Bank inducted over 180Retail Banking Officers and provided them comprehensive trainingin its Karachi, Lahore and Islamabad training centers, subsequentto which they have currently been assigned to various Retail branchesfor on-the-job training. The Bank also inducted 250 Cash officersinto the permanent cadre through a rigorous selection process afterhaving completed on-the-job training of over one year.

The emphasis on training and development of employees continued,with approximately 30,000 man days of training conducted duringthe year. The focus remained on enhancing technical and productknowledge with the goal of ultimately improving the service providedto the Bank's customers.

Investment was also initiated in the implementation of a state-of-theart employee and managerial self service system along with e-learningcapability. This is expected to be in place by early 2011 and willprovide the basis for enhanced skill and knowledge developmentcapability as well as management of staff related issues such as loanprocessing, leave applications, etc.

Nearly 200 UBL staff were also affected by the flooding in the country.The Bank provided all such staff logistical and financial support tohelp them in their hour of need.

Risk and Credit Policy

With the economy in a turbulent state, Risk & Credit Policy Groupincreased efforts to improve the Bank's risk management frameworkto bolster the asset quality of the corporate, commercial, consumerand international portfolios. Proactive portfolio management wasconducted through stringent monitoring of troubled accounts,specifically those of the Power and Textile sectors, coupled withfacilitating recovery through active restructuring. Steps were takento enhance the efficiency of the approval process through appropriatedelegation of credit approval authority, along with automation of theapproval process.

A comprehensive Risk Management Policy was finalized in 2010.This is an umbrella policy which develops an integrated frameworkto encompass Liquidity, Agricultural Credit, International/Local Credit,Market as well as Human Resource risk. An Agriculture Credit Policyhas also been developed and finalized over the year. Efforts toimplement the Operational Risk Management Framework across theBank have been ongoing and deployment of an Operational Risk



Monitor system is one of the major milestones in this regard. In orderto automate the loan origination process for Corporate, Commercialand SME borrowers, a Loan Origination (LO) module has also beenindigenously designed. During the year the LO has been successfullyimplemented for SME and Consumer loans in Karachi and this isexpected to be rolled out Bank-wide in 2012.

For the equity trading portfolio, a value-at-risk methodology hasbeen implemented and is being back tested, while for the derivativesportfolio a revised mechanism has been rolled out for measurementand monitoring of pre-settlement risk. Market Risk limit settingmechanisms have also been revised to rely on quantitative ratherthan subjective methods. With regards to consumer credit, behavioralscoring and automated delinquent collection strategies have beenimplemented in order to perform customer segregation and thesubsequent curative action in a more efficient manner. UBL is alsoin the process of implementing an Application Scoring model, whichwill enable the risk decision makers to allocate limits/pricing facilitieson the basis of risk profile. Steps have also been taken towardsbetter information management during the year, with the Credit Policy& Research Division providing regular updates to business units onmajor macroeconomic and specific industry related happenings.

Core Banking Platform Implementation (Project Genesis)

During the year 2010, Project Genesis achieved a major milestone;six branches went live on the new Core Banking System (CBS).These included three Retail Branches and the Corporate branch ofKarachi besides Mortgage and Personal loan branches. This enabledthe bank to test the CBS with almost the entire spectrum oftransactions being conducted in UBL. With this migration, UBL alsoachieved a single Customer Information File for all the Bank'scustomers, providing a full view of all the customer's products withthe Bank.

The Enterprise Banking Suite (EBS) is the front end solution for CBScomprising the customer service platform (CSP) and the loanorigination system (LOS). CSP is a customer relationship managementtool and has been rolled out in over 350 branches. LOS has beenimplemented for Commercial loans and Consumer products and isunderway for Corporate loans and Credit Cards. During 2011, CSPwill be rolled out across the country while LOS implementation forall products will be completed in 2012. The implementation andintegration of CBS and EBS has provided seamless end to endprocessing for customer transactions.

Corporate Social Responsibility

UBL undertook several initiatives in its role as a good CorporateCitizen, which are described in detail on Page 12. The most importantof these was where UBL and its employees contributed nearly Rs38 million towards helping their fellow countrymen who were badlyaffected by the floods. UBL provided flood affectees with a unique“LifeStraw” filter, each of which purifies enough dirty water to caterto a family of five for 3 years. This not only ameliorated their immediateconcerns of access to clean drinking water, but had an equallyimportant secondary impact of staving off water-borne diseases, agreat threat in those conditions. UBL also ran a campaign encouragingthe general public to contribute towards this initiative and receivedgenerous contributions which were matched by UBL.

Conclusion

Through a difficult year, UBL has demonstrated a strong performance.This has been made possible through attention to several core issues,stringent monitoring of asset quality and credit performance andhiring and development of high quality talent. While the Bank remainsconscious of costs, it continues to make selective investments intechnology and new products and channels to maintain its reputationas an innovator. Although economic conditions remain challenging,the actions taken during the year position the Bank well to build onits solid base and take advantage of opportunities both locally andin overseas markets.


Karachi.February 22, 2011


[ Growth at a Glance ]

Six Years Financial Summary Standalone

PKR 'millionDecember 31 2010 2009 2008 2007 2006 2005

BALANCE SHEET Assets Cash and balances with treasury and other banks 85,654 66,878 57,567 61,718 62,974 46,792Lending to financial institutions 12,385 23,162 22,805 24,782 29,572 17,868Investments- gross 227,237 138,398 118,865 115,937 67,661 63,661Advances - gross 368,692 382,478 390,903 316,737 260,909 219,275Operating fixed assets 22,424 21,926 18,021 16,944 5,234 4,449Other assets 20,012 17,514 19,677 11,741 10,915 10,103Total assets - gross 736,403 650,356 627,839 547,858 437,266 362,148Provisions against non-performing advances (34,960) (28,387) (19,763) (17,383) (13,600) (14,465)Provisions against diminution in value of investment (2,658) (2,253) (2,537) (351) (401) (634)Total assets - net of provision 698,785 619,716 605,539 530,124 423,266 347,049 Liabilities & Equity Deposits & other Accounts 550,646 492,036 483,560 400,975 335,078 289,226Borrowing from financial institutions 45,105 35,145 44,196 59,103 38,491 21,790Sub-ordinated loans 11,986 11,990 11,994 5,997 5,998 3,999Bills payable 5,046 5,147 5,194 6,079 4,561 4,160Other liabilities 17,588 14,462 16,732 15,549 9,275 6,205Total Liabilities 630,370 558,780 561,677 487,703 393,402 325,381Net Assets / Liabilities 68,415 60,937 43,863 42,421 29,863 21,668Share capital 12,242 11,129 10,117 8,094 6,475 5,180Reserves 21,689 18,960 15,502 10,262 8,299 6,225Un - appropriated profit / (loss) 26,250 22,188 16,604 15,654 12,430 7,351Equity - Tier 1 60,181 52,276 42,223 34,009 27,204 18,756Surplus on revaluation of assets 8,234 8,660 1,640 8,412 2,660 2,912Equity 68,415 60,937 43,863 42,421 29,863 21,668Total liabilities & equity 698,785 619,716 605,539 530,124 423,266 347,049 PROFITABILITY Markup / rerurn / interest earned 59,332 61,107 51,919 41,046 32,992 20,159Markup / rerurn / interest expensed (25,223) (28,164) (24,062) (16,936) (12,127) (6,046)Net Markup / Interest income 34,109 32,943 27,857 24,109 20,865 14,113Fee, commission, brokerage and exchange income 7,992 7,139 8,044 5,992 5,095 3,219Capital gain & dividend income 712 1,233 769 1,382 1,115 584Other income 1,418 3,048 1,866 1,618 738 1,210Non interest income 10,121 11,420 10,680 8,992 6,948 5,013Gross income 44,229 44,363 38,537 33,102 27,813 19,126Administrative expenses and other charges (18,337) (17,015) (16,103) (13,425) (10,967) (7,818)Profit before provisions 25,892 27,348 22,434 19,677 16,846 11,308Donations (82) (56) (12) (14) (11) (63)Provisions (8,068) (13,258) (8,548) (6,658) (2,543) (1,763)Profit before taxation 17,742 14,035 13,874 13,005 14,292 9,482Taxation (6,582) (4,842) (5,541) (4,602) (4,824) (3,533)Profit / (Loss) after taxation 11,160 9,193 8,333 8,403 9,468 5,949 CASH FLOW STATEMENT - SUMMARY Cash flow from operating activities 100,070 23,099 388 50,592 22,897 16,433Cash flow from investing activities (77,703) (14,323) (10,440) (50,187) (6,531) (9,817)Cash flow from financing activities (4,010) (1,016) 2,051 (1,944) 704 (278)Cash and cash equivalents at the beginning of the year 66,878 57,567 61,718 62,974 46,792 41,544Effect of exchange rate changes on cash and cash equivalents 420 1,549 3,850 283 (888) (1,090)Cash and cash equivalents at the end of the year 85,654 66,878 57,567 61,718 62,974 46,792 FINANCIAL RATIOS Return on equity (RoE) 19.8% 19.5% 21.9% 27.5% 41.2% 35.9%Return on assets (RoA) 1.7% 1.5% 1.5% 1.8% 2.5% 1.9%Profit before tax ratio 40.1% 31.6% 36.0% 39.3% 51.4% 49.6%Gross spread ratio 57.5% 53.9% 53.7% 58.7% 63.2% 70.0%Return on capital employed (ROCE) 16.4% 15.5% 17.7% 23.0% 33.8% 29.3%Advances to deposits ratio (ADR) - gross 67.0% 77.7% 80.8% 79.0% 77.9% 75.8%Advances to deposits ratio (ADR) - net 60.6% 72.0% 76.8% 74.7% 73.8% 70.8%Income to expense ratio 2.41 2.61 2.39 2.47 2.54 2.45Cost to revenue ratio 41.5% 38.4% 41.8% 40.6% 39.4% 40.9%Growth in gross income -0.3% 15.1% 16.4% 19.0% 45.4% 59.4%Growth in net profit after tax 21.4% 10.3% -0.8% -11.3% 59.2% 60.7%Total assets to shareholders' funds 10.2 10.2 13.8 12.5 14.2 16.0Intermediation cost ratio 3.5% 3.5% 3.6% 3.6% 3.5% 3.0%NPL ratio 13.2% 10.2% 7.1% 6.9% 6.2% 7.7%Net infection ratio 4.1% 3.0% 2.2% 1.5% 1.1% 1.2%Weighted average cost of Funds 5.4% 5.6% 5.2% 4.5% 4.0% 2.6%Capital adequacy ratio (CAR)* 14.5% 13.2% 9.9% 10.3% 11.1% 9.3%



December 31 2010 2009 2008 2007 2006 2005 SHARE INFORMATION Cash dividend per share 5.00 2.50 2.50 3.00 3.00 2.50Proposed bonus issue per share - 1.00 1.00 2.50 2.50 2.50Dividend yield (based on cash dividend) 7.3% 4.3% 6.8% 1.7% 2.0% 2.3%Dividend payout ratio (total payout) 54.8% 42.4% 42.5% 53.0% 37.6% 43.5%Earning per share (EPS) ** 9.12 7.51 6.81 6.86 7.73 4.86Price earnings ratio (PE x) 7.48 7.08 4.48 16.65 10.50 9.56Market value per share - at the end of the year 68.23 58.45 36.91 172.90 153.50 109.75Market value per share - highest during the year 70.00 66.50 223.20 228.55 183.50 112.00Market value per share - lowest during the year 49.00 27.92 36.91 152.00 110.00 59.25Breakup value per share - Without surplus on revaluation of assets 49.16 46.97 41.73 42.02 42.01 36.21Breakup value per share - With surplus on revaluation of assets 55.89 54.76 43.35 52.41 46.12 41.83 OTHER INFORMATION Non - performing advances (NPLs) 48,593 39,101 27,839 22,012 16,255 16,960Import Business 447,743 335,764 422,958 286,863 259,221 203,628Export Business 175,826 136,694 123,050 104,780 85,597 81,412Number of employees 11,573 11,371 12,705 12,797 13,376 11,556Number of branches 1,123 1,120 1,119 1,078 1,044 1,043 * 2007, 2008 and 2009 numbers are based on BASEL II framework ** EPS for prior years has been adjusted to affect bonus shares issue during 2010.

VERTICAL AND HORTIZONTAL ANALYSIS BALANCE SHEET December 31 2010 2009 2008 2007 2006 2005 VERTICAL ANALYSIS Assets Cash and balances with treasury and other banks 12.3% 10.8% 9.5% 11.6% 14.9% 13.5%Lending to financial institutions 1.8% 3.7% 3.8% 4.7% 7.0% 5.1%Investments- net 32.1% 22.0% 19.2% 21.8% 15.9% 18.2%Advances - net 47.8% 57.1% 61.3% 56.5% 58.4% 59.0%Operating fixed assets 3.2% 3.5% 3.0% 3.2% 1.2% 1.3%Other assets 2.9% 2.8% 3.2% 2.2% 2.6% 2.9%Total assets 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% Liabilities & Equity Deposits & Other Accounts 78.8% 79.4% 79.9% 75.6% 79.2% 83.3%Borrowing from financial institutions 6.5% 5.7% 7.3% 11.1% 9.1% 6.3%Sub-ordinated loans 1.7% 1.9% 2.0% 1.1% 1.4% 1.2%Bills payable 0.7% 0.8% 0.9% 1.1% 1.1% 1.2%Other liabilities 2.5% 2.3% 2.8% 2.9% 2.2% 1.8%Total Liabilities 90.2% 90.2% 92.8% 92.0% 92.9% 93.8%Share capital 1.8% 1.8% 1.7% 1.5% 1.5% 1.5%Reserves 3.1% 3.1% 2.6% 1.9% 2.0% 1.8%Un - appropriated profit / (loss) 3.8% 3.6% 2.7% 3.0% 2.9% 2.1%Equity - Tier 1 8.6% 8.4% 7.0% 6.4% 6.4% 5.4%Surplus on revaluation of assets 1.2% 1.4% 0.3% 1.6% 0.6% 0.8%Total equity 9.8% 9.8% 7.2% 8.0% 7.1% 6.2%


December 31 2010 2009 2008 2007 2006 2005

HORIZONTAL ANALYSIS Assets Cash and balances with treasury and other banks 183.1% 142.9% 123.0% 131.9% 134.6% 100.0%Lending to financial institutions 69.3% 129.6% 127.6% 138.7% 165.5% 100.0%Investments- net 356.3% 216.0% 184.6% 183.4% 106.7% 100.0%Advances - net 162.9% 172.9% 181.2% 146.2% 120.8% 100.0%Operating fixed assets 504.0% 492.8% 405.0% 380.8% 117.6% 100.0%Other assets 198.1% 173.4% 194.8% 116.2% 108.0% 100.0%Total assets 201.4% 178.6% 174.5% 152.8% 122.0% 100.0%

Liabilities & Equity Deposits & Other Accounts 190.4% 170.1% 167.2% 138.6% 115.9% 100.0%Borrowing from financial institutions 207.0% 161.3% 202.8% 271.2% 176.6% 100.0%Sub-ordinated loans 299.7% 299.8% 299.9% 149.9% 150.0% 100.0%Bills payable 121.3% 123.7% 124.9% 146.1% 109.6% 100.0%Other liabilities 283.5% 233.1% 269.7% 250.6% 149.5% 100.0%Total Liabilities 193.7% 171.7% 172.6% 149.9% 120.9% 100.0%Share capital 236.3% 214.8% 195.3% 156.3% 125.0% 100.0%Reserves 348.4% 304.5% 249.0% 164.8% 133.3% 100.0%Un - appropriated profit / (loss) 357.1% 301.8% 225.9% 213.0% 169.1% 100.0%Equity - Tier 1 320.9% 278.7% 225.1% 181.3% 145.0% 100.0%Surplus on revaluation of assets 282.8% 297.4% 56.3% 288.9% 91.3% 100.0%Total equity 315.7% 281.2% 202.4% 195.8% 137.8% 100.0% PROFIT AND LOSS ACCOUNT VERTICAL ANALYSIS Interest / Return / Non Interest Income earned Markup / Return / Interest earned 85.4% 84.3% 82.9% 82.0% 82.6% 80.1%Fee, Commission, Brokerage and Exchange income 11.5% 9.8% 12.9% 12.0% 12.8% 12.8%Capital gain & Dividend income 1.0% 1.7% 1.2% 2.8% 2.8% 2.3%Other income 2.0% 4.2% 3.0% 3.2% 1.8% 4.8%Total 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% Interest / Return / Non Interest Expense Markup / Return / Interest expensed 36.3% 38.8% 38.4% 33.8% 30.4% 24.0%Operating expenses 26.5% 23.5% 25.7% 26.9% 27.5% 31.3%Provisions 11.6% 18.3% 13.7% 13.3% 6.4% 7.0%Taxation 9.5% 6.7% 8.9% 9.2% 12.1% 14.0%Total expense - percentage of total income 83.9% 87.3% 86.7% 83.2% 76.3% 76.4% Profit / (Loss) after taxation 16.1% 12.7% 13.3% 16.8% 23.7% 23.6%Total 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% HORIZONTAL ANALYSIS Interest / Return / Non Interest Income earned Markup / Return / Interest earned 294.3% 303.1% 257.6% 203.6% 163.7% 100.0%Fee, Commission, Brokerage and Exchange income 248.3% 221.8% 249.9% 186.2% 158.3% 100.0%Capital gain & Dividend income 121.8% 211.1% 131.7% 236.7% 190.9% 100.0%Other income 117.1% 251.8% 154.2% 133.7% 61.0% 100.0%Total 275.9% 288.1% 248.7% 198.8% 158.7% 100.0% Interest / Return / Non Interest Expense Markup / Return / Interest expensed 417.2% 465.8% 398.0% 280.1% 200.6% 100.0%Operating expenses 233.7% 216.6% 204.5% 170.5% 139.3% 100.0%Provisions 457.6% 751.9% 484.8% 377.6% 144.2% 100.0%Taxation 186.3% 137.1% 156.9% 130.3% 136.5% 100.0%Total expense 303.2% 329.5% 282.3% 216.6% 158.5% 100.0% Profit / (Loss) after taxation 187.6% 154.5% 140.1% 141.2% 159.2% 100.0%



STATEMENT OF VALUE ADDED

2010 2009 PKR 'million % PKR 'million %Mark-up / return / interest earned - net of provisions 51,264 101.5% 47,849 95.7%Fee, commission, brokerage and exchange income 7,992 15.8% 7,139 14.3%Capital gain & dividend income 712 1.4% 1,233 2.5%Other income 1,418 2.8% 3,048 6.1%

61,384 121.5% 59,269 118.5%Administrative expenses 10,871 21.5% 9,264 18.5%

Value added 50,513 100.0% 50,005 100.0%

Distributed as follows:

To employees as remuneration 7,465 14.8% 7,751 15.5%

To government as income tax 6,582 13.0% 4,842 9.7%

To Depositors as profit on investments 18,963 37.5% 22,210 44.4%

To Institutions & individuals as profit on borrowings 6,261 12.4% 5,953 11.9%

To Society as donations 82 0.2% 56 0.1%

To Shareholders as dividends / bonus 5,119 10.1% 2,023 4.0%

Retained in Business as reserves and retained profits 6,041 12.0% 7,169 14.3% 50,513 100% 50,005 100%


[ International Network ]

UAEDeira Branch

Mohamed & Obaid Almulla Building,Shop #1, Plot # 115-0108,

Murshid Bazar, P.O. Box. No. 1000,Deira-Dubai, UAE

Tel: 09714-2267191 & 2267532Fax: 009714-2269209

Bur Dubai BranchBank Street Building, Khalid Bin Waleed Road,

P.O. Box. No. 1367, Dubai, UAETel: 009714-6085333 & 6085309

Fax: 009714-3515164

Al-Barsha Sheikh Zayed Road BranchShow Room # 2,

Al Faraidooni Building,Al Barsha First, Sheikh Zayed Road,

P.O. Box. No. 3846, Dubai, UAETel: 009714-6085309 & 3403115

Fax: 009714-3403645

Sharjah BranchAl-Majaz Building, King Faisal Street,

P.O. Box. No. 669, Sharjah, UAETel: 009716-5751115 (Dir.),

5729444 (PABX)Fax: 009716-5721200

Khalifa Main BranchPlot # C28 E9,

Hamad Suhail Al Khaily Building,Khalifa Street, Abu Dhabi

Tel: 009712-6719787 & 5996500Fax: 009712-6719900

Sheikh Hamdan Road BranchGhamran Buti Al Qubaisi Building,

Opp. Hamdan Centre,Sheikh Hamdan Bin Mohamed Road,P.O. Box. No. 2340, Abu Dhabi, UAE

Tel: 009712-6271210 & 6272429Fax: 009712-6272134

Musaffah BranchShow Room # 3, M-14, Street 17,

Musaffah, P.O. Box. No. 237, Abu Dhabi, UAETel: 009712-5548777 & 5548778

Fax: 009712-5548779

Al-Ain BranchShow Room # L 103 LE 488,

Mohammed Salem Owaida Jaber Al Khaily Building,Ali Ibn Ibi Talib Streeet, Oud Al Toba,

P.O. Box. No.1141, Al-Ain, UAETel: 009713-7641221 & 7641780

Fax: 009713-7666175

BAHRAINManama BranchDelmon Tower, 117,Block 304, Govt. Avenue,P.O. Box. No. 546, Manama,Kingdom of BahrainTel: 00973-1722-4030Fax: 00973-1722-9392

Seef BranchAddax Tower, Ground Floor,Road No.2806 & 2813,Block # 428, Seef District,P.O. Box. No. 546,Kingdom of BahrainTel: 00973-1756-0808Fax: 00973-1758-7552

Muharraq Branch1127B, Road 10,Area 215, P.O. Box. No. 546,Muharraq, Kingdom of BahrainTel: 00973-17-343488Fax: 00973-17-344793

QATARCorniche Main BranchSh. Jasim Bin Jaber Al-Thani Building,Abdullah Bin Jassim Street,P.O.Box No.242, Doha - QatarTel: 00974-44254444Fax: 00974-44416669

Salwa Road BranchSalwa Road, Industrial Area,P.O. Box. No. 242, Doha - QatarTel: 00974-44254464Fax: 00974-44506026

YEMENSana'a BranchDr. Mohammad Ahmed OthmanAl-Absi Building, Al-Zubairi Street,P.O. Box. No. 1295, Sana'a,Republic of YemenTel: 00967 1 409947 (Dir.) 407540 (PABX)Fax: 00967 1 408211

Hodeidah BranchEssam Al-Shami Building, Shahrah-e-Meena,P.O. Box. No. 3927, Hodeidah,Republic of YemenTel: 009673-201494 (Dir.), 225560 (Gen.)Fax: 009673-201153


[ International Network ]

Aden BranchAden Mall, Crater, P.O. Box No.104, Aden,

Republic of YemenTel: 00967 2 269191, 00967 2 269063

Fax: 00967 2 269065

USANew York Branch

80 Broad Street, 24th Floor, New York,N.Y.10004 - 2209, U.S.A.

Tel: 001-212-943-1275Fax: 001-212-9680557

OBU - EPZEPZ Branch (Karachi)

Export Processing Zone, Landhi Industrial Area,Mehran Highway, Landhi, Karachi

Tel: 009221 35082301-3Fax: 009221 35082305

REPRESENTATIVE OFFICESIRAN

Tehran Rep. OfficeUnit 41, 4th floor,

Negin Gholhak Tower, Kolahdouz crossing,Shariati Ave., Tehran, Iran

Tel: +9821-26601350-1Fax: +9821-22611297

KAZAKHSTANAlmaty Rep. Office

Suite 205, SAT Business Centre,32A Manasa Street, Bostandykski District,

Almay, 050008, Republic of KazakhstanTel: 00 7-727-2378432 & 2378433

Fax: 00 7-727-2378432

CHINABeijing Rep. Office

Room # 2110, The Exchange Beijing,No.118, Jianguo Road,

Chaoyang District, Beijing,100022, Peoples Republic of China

Tel: 0086-10-65675560 & 65675579Fax: 0086-10-65675560

SUBSIDIARYSWITZERLANDUnited Bank AG (Zurich)Feldeggstrasse 55, P.O. Box. No. 1176, 8034Zurich, SwitzerlandTel: 0041 43 4991920Fax: 0041 43 4991933

UKUnited National Bank Limited2 Brook Street, London - W1S 1BQ, U.K.Tel: 0044 20 7290 8000Fax: 0044 20 7290 3054

ASSOCIATE COMPANYOMANOman United Exchange Co. LLC, (Muscat)(i) Ruwi Branch P.O. Box. No. 889, Near Ruwi Police Station,Postal code 100, Ruwi, Muscat,Sultanate of OmanTel: 00968 24794305, 24782048Fax: 00968 24794344

ii) Salalah BranchP.O. Box. No. 2052, Postal code 211,Salalah, Sultanate of OmanTel: 00968 23290323Fax: 00968 23290323

iii) Sohar BranchP.O. Box. No. 889, Postal code 100,Muscat, Sultanate of OmanTel: 00968 26847021Fax: 00968 26847022

iv) Ghoubra BranchP.O. Box. No. 889, Postal code 100,Muscat, Sultanate of OmanTel: 00968 24495645Fax: 00968 24495624

v) Industrial Area Salalah BranchP.O. Box. No. 2052,Postal code 211, Salalah,Sultanate of OmanTel: 00968 23213264Fax: 00968 23211260


The year 2010 was the fourth year in progress of Islamic commercialbanking for United Bank Limited. During the year, the Bank hasmaintained its product offering and has focused mainly on buildingup deposits. The bank has focused much on the liability side and hasdeveloped Islamic banking deposit product after due approval fromthe Shariah Advisor extending its product line.

Following were the developments that took place during the year:

Product Development

During the year the Product Development Department of the bankhas designed a new deposit product “Ameen Business Account” toattract corporate customers requiring free facilities as provided byconventional counter parts to their current account holders. UBLAmeen Business Account caters corporate customers providing freevalue added services and profit together.

Expansion of Branch Network

During the year there was an addition of an Islamic Banking Branch.The process of conversion was duly vetted and successfully completed.

Islamic Banking Training

It's the people who are the asset of an organization and it's them whoare behind the success of it. Enhancing the quality of these assetswill paint a better portrait.

UBL Ameen needs to emphasize on training their staff in order to upbreast them with Islamic banking and ensure Shariah compliance.This will lead to the success of the whole team. Human resourcedevelopment is basically an investment in the asset of the organization.Alhamdulillah, this year has been declared “The year of Learning andKnowledge”. This will help in achieving the milestone with concretemeasures.

Review of Assets

The Bank's major financing activities during the year were made inMurabaha, Ijarah and Diminishing Musharakah. Ijarah transactionsconstitute 44.61% of the total financing portfolio while the percentageof Diminishing Musharakah and Murabaha was 30.92% and 24.47%respectively. The Bank's total financing portfolio reduced to PKR832.848 million as of December 31, 2010 compared to PKR 1,152.522million in December 31, 2009.

Review of Liabilities

On the liability side, the Bank offered different Shariah Compliantdeposit products based on the modes of Mudarabah & Qardh. Thetotal deposits of the Bank was doubled, notably reaching to PKR4,459.221 million as at December 31, 2010 compared to PKR2,208.418 million of last year, showing an impressive growth of101.92%. It was also encouraging that there was nothing contradictoryto the dictates of Shariah.

Shariah Audit

During the year 2010, Shariah Audit was carried out by the ShariahAudit, Compliance and Advisory department, to check the overallShariah compliance of the bank's operation and their adherence to

the guidelines issued by SBP and Shariah Advisor. In the Audit,following operations were reviewed:

• Allocation of funds and Pool Management System• Weightages and profit sharing ratios• Declarations, description of Assets, relevant purchase invoices,

sequence and order of the documents, and time difference betweenpurchases and declaration in Murabaha.

• Treatment of ownership related cost and recovery of rentals inIjarah transactions.

• Import Finance transactions and related documentation.• Other related documents and procedures followed by different

functional areas.

As per SBP guidelines it has been decided to separate Shariah Auditfrom Shariah Compliance. Under the new system Shariah Audit shouldbe carried out by Internal Audit Department of the bank through adedicated resource in order to ensure transactions are carried outaccording to the approved process flows and manuals withindependence. The Shariah Audit Report will be placed in front of theShariah Advisor for review and decision.

Charity

The charity policy was duly vetted by the Shariah Advisor and wasapproved by the board of directors.

During the year total charity amounting to PKR 0.840 Million from non-Shariah compliant sources has been credited to the Charity Accountand an amount of PKR 9.780 million was disbursed after the approvalof the Shariah Advisor.

Shariah Compliance

In order to maintain Shariah compliance following measures weretaken;

• Internal memos on Shariah compliance guidelines were issued bythe Shariah Advisor from time to time. In order to avoid anymisunderstanding with the customer and voidance of the transaction,it was made mandatory to involve Shariah Compliance from thevery inception of the proposal.

• Prior any formal commitment to the customer in principle approvalmust be sought from the Shariah Advisor.

• The Standardize Credit Application (SCA) is shared with the ShariahCompliance Department before any disbursement and processflow of the financing activity approved by the Shariah ComplianceDepartment forms an integral part of the SCA.

• In order to avoid any delay a turnaround time (TAT) of maximumtwo days for SCA Shariah approval was decided.

Shariah AdvisoryDuring the year the bank provided Shariah Advisory on restructuringof two Sukuk where UBL was acting as the trustee.

In order to avail the benefit from the in house expertise Shariah advisoryservices should be extended to local and international markets especiallyin the GCC, Europe and USA regions where UBL has a track recordand presence.

[ Shariah Advisor’s Report ]


Shariah Advisory

During the year the bank provided Shariah Advisory on restructuringof two Sukuk where UBL was acting as the trustee.

In order to avail the benefit from the in house expertise Shariah advisoryservices should be extended to local and international markets especiallyin the GCC, Europe and USA regions where UBL has a track recordand presence.

Recommendation

Based on the review of various transactions we recommend that:

• The quality growth of the Islamic banking division is connectedwith employees' training. Utmost focus should be shifted towardsproper training of staff. A comprehensive program with resultoriented outcomes should be designed and a reasonable budgetshould be allocated in this regard. The outcomes of the trainingshould become an integral part of employees' appraisal.

• The Bank should also focus on customer awareness. Properinformation should be communicated in order to avoidmisunderstanding.

• The Corporate and Commercial Banking Departments of the Bankshould strictly adhere to the Shariah compliance mechanism setout by the bank in order to strengthen the Shariah compliance.

• Charity should invariably be disbursed to the organizations onceenlisted with the bank unless any discrepancy is found.

• Risk and Credit Departments should allocate a dedicated resourcewithin the department to ensure that there is no non-Shariahcompliance risk associated while managing approvals.

• As now the bank is gathering pace in its activities, it is suggestedthat in all Shariah related decisions, especially matters pertainingto Shariah compliance, audit, and training, Shariah Advisor'sconsent may be sought invariably. This will improve the overallquality of Shariah compliance within the bank.

• It is also suggested that as the bank is growing, a proper ShariahCompliance Manual describing the overall mechanism should befinalized incorporating the instruction laid by the Shariah Advisorfrom time to time.

Conclusion

It is the responsibility of the Bank's management and employees toensure application of Shariah principles and guidelines issued by theShariah Advisor from time to time and to ensure Shariah compliancein all activities of the Islamic Banking Division.

Based on the review and management representations, in our opinionthe activities and transactions performed by the Islamic banking divisionduring the year comply with the Principles and Guidelines of IslamicJurisprudence, issued and directed by the Shariah Advisor of UnitedBank Limited.

Mufti Ehsan Waquar AhmadShariah AdvisorUnited Bank LimitedIslamic Banking Group

[ Shariah Advisor’s Report ]


[ Statement of Compliance with the code of Corporate Governance year ended December 31, 2010 ]

This statement is being presented to comply with the Code of CorporateGovernance (The Code) contained in the Regulation No. 37, XIII & 36of Listing Regulations of Karachi, Lahore & Islamabad Stock Exchangesfor the purpose of establishing a framework of good governance,whereby a listed company is managed in compliance with the bestpractices of corporate governance.

The Board of Directors has adopted the Code of Corporate Governanceand applied the principles contained in the Code in the followingmanner:

1. Except for the Chief Executive Officer, all other directors, includingChairman and Deputy Chairman are non-executive directors.

2. The directors have confirmed that none of them is serving as adirector in more than ten listed companies, including this Bank.

3. All the resident directors of the Bank are registered as taxpayersand none of them has defaulted in payment of any loan to abanking company, a DFI or an NBFI or, being a member of astock exchange, has been declared as a defaulter by that stockexchange.

4. During the year Government of Pakistan (GOP) has appointedMr. Seerat Asghar as director with effect from 30 March 2010in place of Dr. Ashfaque Hasan Khan.

5. During the year 2009, the Board of Directors approved andsigned “Statement of Ethics and Business Practices” and obtainingthe signature of employees is under process.

6. The Board has developed a vision / mission statement, overallcorporate strategy and significant policies of the Bank. A set ofsignificant policies are maintained by the Bank.

7. All the powers of the Board have been duly exercised and decisionon material transactions, including appointment and determinationof remuneration and terms and conditions of employment of theChief Executive Officer have been taken by the Board.

8. The meetings of the Board were presided over by the Chairmanand, in his absence, by the Deputy Chairman and in absence ofDeputy Chairman by any other director. The Board met at leastonce in every quarter. Written notices of the Board meeting,along with agenda and working papers, were circulated at leastseven days before the meetings. The minutes of the meetingswere appropriately recorded and circulated. The CompanySecretary and Chief Financial Officer attended the meetings ofthe Board of Directors.

9. The appointments of Chief Financial Officer, Company Secretaryand Head of Internal Audit including their remuneration and termsof employment have been approved by the Board.

10. In compliance of Sub Clause (xiv) of Clause 35 of ListingRegulations, three directors have attended and completed Part 1of Corporate Governance Leadership Skills program on 20December 2010 under the Board Development Series of PakistanInstitute of Corporate Governance.

11. The directors’ report for this year has been prepared in compliancewith the requirements of the Code and fully describes the salientmatters required to be disclosed.

12. The financial statements of the Bank were duly endorsed by theChief Executive Officer and Chief Financial Officer before approvalof the Board.

13. The Directors, Chief Executive Officer and executives do not holdany interest in the shares of the Bank other than those disclosedin pattern of shareholding.

14. The Bank has complied with all the corporate and financialreporting requirements.

15. The Board has formed an audit committee. It comprises of threemembers, all of whom are non-executive directors including theChairman of the Committee.

16. The meetings of the audit committee are held at least once everyquarter prior to approval of interim and final results of the Bank,as required by the Code. The terms of reference of the committeehave been formulated and advised to the committee forcompliance.

17. The Board has set up an effective internal audit function. Personnelof the Internal Audit Department are suitably qualified andexperienced for the purpose and are conversant with the policiesand procedures of the Bank and they are involved in the internalaudit function on a full time basis.

18. The statutory auditors of the Bank have confirmed that they havebeen given a satisfactory rating under the Quality Control ReviewProgram of The Institute of Chartered Accountants of Pakistan,that they or any of the partners of the firm, their spouses andminor children do not hold shares of the Bank and that the firmand all its partners are in compliance with International Federationof Accountants (IFAC) guidelines on Code of Ethics as adoptedby the Institute of Chartered Accountants of Pakistan.

19. The statutory auditors or the persons associated with them havenot been appointed to provide services other than approvedservices and the auditors have confirmed that they have observedIFAC guidelines in this regard.

20. We confirm that all other material principles contained in theCode have been complied with.

For and on behalf of the Board of Directors

Nahayan Mabarak Al NahayanChairmanAbu Dhabi

Date: February 21, 2011


We have reviewed the Statement of Compliance with the bestpractices (the Statement) contained in the Code of CorporateGovernance (the Code) for the year ended December 31, 2010prepared by the Board of Directors of UNITED BANK LIMITED (theBank) to comply with the Listing Regulation No.35 (Chapter XI) ofthe Karachi Stock Exchange (Guarantee) Limited, Lahore StockExchange (Guarantee) Limited and Islamabad Stock Exchange(Guarantee) Limited, where the Bank is listed.

The responsibility for compliance with the Code of CorporateGovernance is that of the Board of Directors of the Bank. Ourresponsibility is to review, to the extent where such compliance canbe objectively verified, whether the Statement of Compliance reflectsthe status of the Bank’s compliance with the provisions of the Codeof Corporate Governance and report if it does not. A review is limitedprimarily to inquiries of the Bank’s personnel and review of variousdocuments prepared by the Bank to comply with the Code.

As part of our audit of the financial statements we are required toobtain an understanding of the accounting and internal controlsystems sufficient to plan the audit and develop an effective auditapproach. We are not required to consider whether the Board’sstatement on internal control covers all risks and controls, or to forman opinion on the effectiveness of such internal controls, the Bank’scorporate governance procedures and risks.

Further, the Listing Regulations require the Bank to place before theBoard of Directors for their consideration and approval, related partytransactions distinguishing between transactions carried out onterms equivalent to those that prevail in arm’s length transactionsand transactions which are not executed at arm’s length pricerecording proper justification for using such alternate pricingmechanism. Further, all such transactions are also required to beseparately placed before the Audit Committee. We are only requiredand have ensured compliance of requirement to the extent of approval

of related party transactions by the Board of Directors and placementof such transactions before the Audit Committee. We have notcarried out any procedures to determine whether the related partytransactions were undertaken at arm’s length price or not.

Based on our review nothing has come to our attention which causesus to believe that the Statement of Compliance does not appropriatelyreflect the Bank’s compliance, in all material respects, with the bestpractices contained in the Code of Corporate Governance asapplicable to the Bank for the year ended December 31, 2010.

Review Report to the Members on Statement of Compliance with best practices of Code of Corporate Governance

BDO Ebrahim & Co.Chartered Accountants2nd Floor, Block CLakson Square Building No.1Sarwar Shaheed RoadKarachi 74200

Ernst & Young Ford Rhodes Sidat HyderChartered AccountantsProgressive PlazaBeaumont RoadPO Box 15541Karachi 75530

BDO Ebrahim & Co.Chartered AccountantsAudit Engagement Partner:Zulfikar Ali Causer

Ernst & Young Ford Rhodes Sidat HyderChartered AccountantsAudit Engagement Partner:Shabbir Yunus

Date: February 21, 2011Karachi

The Internal Control system comprises various inter-related componentsincluding Control Environment, Risk Assessment, ControlActivities, Information & Communication and Monitoring.

It is the responsibility of Bank's management to establish an InternalControl System to maintain an adequate and effective Internal ControlEnvironment. It is a process designed to identify and mitigate the riskof failure to achieve overall business objectives of the Bank. Internalcontrols and policies are designed to provide reasonable assuranceregarding effectiveness and efficiency of the Bank's operations, reliabilityof financial information and compliance with applicable laws andregulations.

Evaluation

Evaluation of the Bank's Internal Control System comprises differentlevels of monitoring activities i.e. Line Management, Internal ControlDepartment and Internal Audit. Internal Audit Group continued toevaluate the implementation & efficacy of internal controls throughoutthe year 2010 by carrying out bank-wide audit activities.

The Compliance and Control Assurance Group (CCAG) continued toreview the Bank's process manuals developed during 2010 or anychange in existing process manuals to ensure the existence of propercontrols in the design of processes. CCAG also conducted reviewsof branches and departments to identify gaps in execution of approvedprocesses.

All significant and material findings of the internal and external auditorsand regulators were addressed on priority basis and reported to theBoard Audit Committee, who ensured that management put in placea system for the strengthening of the control environment, identifyingareas requiring improvement and devising appropriate remedial actionon a timely basis to safeguard the Bank's interest.

Management's consistent & continuous monitoring through automationinitiatives has also helped in reducing the error rate and shall helpfurther in improving the overall control environment in the Bank.

The Bank endeavors to follow the guidelines on Internal Controls.Testing of effectiveness of Internal Controls over Financial Reporting(ICFR) prevalent throughout the Bank was carried out. However, noneof the deficiencies identified are expected to have a material impacton the accurate reporting of Financial Statements.

The Bank has made enhanced efforts to ensure that an effective andefficient Internal Control System remained active & implemented. The

Bank's Internal Control system has been designed to provide reasonableassurance to the shareholders and Board of Directors; however thesesystems may not entirely eliminate the risk of misreporting and failureof certain controls under a changing environment.

Based upon the results achieved from reviews and audits conductedduring the year, management considers that the existing InternalControl system is adequate and has been effectively implementedand monitored, though room for improvement always exists.

[ Annual Statement on Internal Controls - 2010 ]

Rayomond KotwalChief Financial Officer

Atif RasheedHead Compliance &Control Assurance

M. EjazuddinGroup Executive -Audit & Inspection



29



BDO Ebrahim & Co.Chartered AccountantsAudit Engagement Partner:Zulfikar Ali Causer

Ernst & Young Ford Rhodes Sidat HyderChartered AccountantsAudit Engagement Partner:Shabbir Yunus

Annual Report 2010

We have audited the annexed unconsolidated statement offinancial position of UNITED BANK LIMITED (the Bank) as atDecember 31, 2010 and the related unconsolidated profit andloss account, unconsolidated statement of comprehensiveincome, unconsolidated cash flow statement, andunconsolidated statement of changes in equity, together withthe notes forming part thereof (here-in-after referred to as the‘financial statements’) for the year then ended, in which areincorporated the unaudited certified returns from the branchesexcept for thirty six branches which have been audited by usand seventeen branches audited by auditors abroad and westate that we have obtained all the information andexplanations which, to the best of our knowledge and belief,were necessary for the purposes of our audit.

It is the responsibility of the Bank’s Board of Directors toestablish and maintain a system of internal control, andprepare and present the financial statements in conformitywith approved accounting standards and the requirements ofthe Banking Companies Ordinance, 1962 (LVII of 1962), andthe Companies Ordinance, 1984 (XLVII of 1984). Ourresponsibility is to express an opinion on these statementsbased on our audit.

We conducted our audit in accordance with the InternationalStandards on Auditing as applicable in Pakistan. Thesestandards require that we plan and perform the audit to obtainreasonable assurance about whether the financial statementsare free of any material misstatement. An audit includesexamining, on a test basis, evidence supporting the amountsand disclosures in the financial statements. An audit alsoincludes assessing the accounting policies and significantestimates made by management, as well as, evaluating theoverall presentation of the financial statements. We believethat our audit provides a reasonable basis for our opinion andafter due verification, which in case of loans and advancescovered more than sixty percent of the total loans andadvances of the Bank, we report that:

(a) in our opinion proper books of account have been kept bythe Bank as required by the Companies Ordinance, 1984(XLVII of 1984), and the returns referred to above receivedfrom the branches have been found adequate for thepurposes of our audit;

(b) in our opinion:

(i) the unconsolidated statement of financial position andunconsolidated profit and loss account together withthe notes thereon have been drawn up in conformitywith the Banking Companies Ordinance, 1962 (LVII of1962), and the Companies Ordinance, 1984 (XLVII of1984), and are in agreement with the books of accountand are further in accordance with accounting policiesconsistently applied except for the changes inaccounting policies as disclosed in note 5.1 to theaccompanying financial statements, with which weconcur;

(ii) the expenditure incurred during the year was for thepurpose of the Bank’s business; and

(iii) the business conducted, investments made and theexpenditure incurred during the year were inaccordance with the objects of the Bank and thetransactions of the Bank which have come to ournotice have been within the powers of the Bank;

(c) in our opinion and to the best of our information andaccording to the explanations given to us theunconsolidated statement of financial position,unconsolidated profit and loss account, unconsolidatedstatement of comprehensive income, unconsolidated cashflow statement and unconsolidated statement of changesin equity, together with the notes forming part thereofconform with approved accounting standards asapplicable in Pakistan and give the information required bythe Banking Companies Ordinance, 1962 (LVII of 1962),and the Companies Ordinance, 1984 (XLVII of 1984), inthe manner so required and give a true and fair view of thestate of the Bank’s affairs as at December 31, 2010 and itstrue balance of the profit, its comprehensive income, itscash flows and changes in equity for the year then ended;and

(d) in our opinion zakat deductible at source under the Zakatand Ushr Ordinance, 1980 (XVIII of 1980), was deductedby the Bank and deposited in the Central Zakat Fundestablished under Section 7 of that Ordinance.


Date: February 21, 2011Karachi


[ Unconsolidated Statement of Financial Position As at December 31, 2010 ]

Note 2010 2009----- (Rupees in ‘000) -----

ASSETSCash and balances with treasury banks 6 67,461,668 61,470,047Balances with other banks 7 18,192,142 5,407,470Lendings to financial institutions 8 12,384,778 23,162,130Investments 9 224,578,556 136,145,524Advances

Performing 10 318,673,884 342,663,339Non-performing - net of provision 10 15,058,288 11,428,374

333,732,172 354,091,713Operating fixed assets 11 22,424,072 21,925,669Deferred tax asset - net 12 1,298,403 608,876Other assets 13 18,713,188 16,905,004

698,784,979 619,716,433

LIABILITIESBills payable 15 5,045,815 5,147,259Borrowings 16 45,104,849 35,144,823Deposits and other accounts 17 550,645,767 492,036,103Sub-ordinated loans 18 11,985,748 11,989,800Other liabilities 19 17,587,735 14,461,725

630,369,914 558,779,710NET ASSETS 68,415,065 60,936,723

REPRESENTED BY:Share capital 20 12,241,798 11,128,907Reserves 21,688,637 18,959,537Unappropriated profit 26,250,489 22,187,802

60,180,924 52,276,246Surplus on revaluation of assets - net of deferred tax 21 8,234,141 8,660,477

68,415,065 60,936,723

CONTINGENCIES AND COMMITMENTS 22

The annexed notes from 1 to 48 and annexures form an integral part of these unconsolidated financial statements.

Atif R. BokhariPresident &

Chief Executive Officer


Sir Mohammed Anwar Pervez , OBE, HPkDeputy Chairman


31

[ Unconsolidated Profit and Loss Account For the year ended December 31, 2010 ]

Annual Report 2010

Note 2010 2009----- (Rupees in ‘000) -----

Mark-up / return / interest earned 24 59,331,761 61,107,025Mark-up / return / interest expensed 25 25,223,253 28,163,787Net mark-up / interest income 34,108,508 32,943,238

Provision against loans and advances - net 10.5 6,803,355 9,623,204Provision against lending to financial institutions 8.5 - 560,852Provision for diminution in value of investments - net 9.3 204,573 945,342Bad debts written off directly 10.6 996,772 1,485,976

8,004,700 12,615,374Net mark-up / return / interest income after provisions 26,103,808 20,327,864

Non Mark-up / Interest IncomeFee, commission and brokerage income 6,337,745 5,925,082Dividend income 591,017 606,347Income from dealing in foreign currencies 1,653,793 1,213,881Gain on sale of securities - net 26 158,885 629,418Unrealized loss on revaluation of investments classified as

held for trading 9.4 (38,365) (3,006)Other income 27 1,417,557 3,047,849Total non mark-up / return / interest income 10,120,632 11,419,571

36,224,440 31,747,435Non Mark-up / Interest ExpensesAdministrative expenses 28 17,765,056 16,608,561Other provisions / write offs - net 29 63,233 642,274Workers' Welfare Fund 30 413,542 397,547Other charges 31 240,391 64,552Total non mark-up / interest expenses 18,482,222 17,712,934Profit before taxation 17,742,218 14,034,501

Taxation - Current 32 6,805,506 6,930,585- Prior years 32 415,136 76,328- Deferred 32 (638,354) (2,165,099)

6,582,288 4,841,814Profit after taxation 11,159,930 9,192,687

----- (Rupees) -----Restated

Earnings per share - basic and diluted 33 9.12 7.51








[ Unconsolidated Statement of Comprehensive Income For the year ended December 31, 2010 ]

2010 2009----- (Rupees in ‘000) -----

Profit after taxation 11,159,930 9,192,687

Other comprehensive income / (loss):

Exchange differences on translation of net investment in foreign branches 419,851 1,549,269

Net gain on cash flow hedges 118,866 108,028

Related deferred tax liability on cash flow hedges (41,603) (37,810)

77,263 70,218

497,114 1,619,487

Comprehensive income transferred to equity - net of tax 11,657,044 10,812,174

Surplus / (deficit) arising on revaluation of assets has been reported in accordance with the requirements of the Companies Ordinance, 1984

and the directives of the State Bank of Pakistan in a separate account below equity.







33

[ Unconsolidated Cash Flow Statement For The Year Ended December 31, 2010 ]

Annual Report 2010

Note 2010 2009----- (Rupees in ‘000) -----

CASH FLOW FROM OPERATING ACTIVITIESProfit before taxation 17,742,218 14,034,501Less: Dividend income 591,017 606,347

17,151,201 13,428,154Adjustments:

Depreciation 1,492,922 1,471,525Amortization 221,047 184,241Workers Welfare Fund 413,542 397,547Provision for retirement benefits 16,638 462,726Provision against loans and advances 6,803,355 9,623,204Provision against lending to financial institutions - 560,852Provision for diminution in value of investments 204,573 945,342Reversal of provision in respect of investments disposed off during the year (337,899) (1,208,712)Provision against off balance sheet items - 20,250Gain on sale of fixed assets (16,248) (30,856)Bad debts written-off directly 996,772 1,485,976Amortization of cash flow hedge reserve 118,866 108,028Unrealized loss on revaluation of investments classified as held for trading 38,365 3,006Provision / (reversal of provision) against other assets 63,233 622,024

10,015,166 14,645,15327,166,367 28,073,307

Decrease / (increase) in operating assetsLendings to financial institutions 10,777,352 (917,641)Held for trading securities (12,484,294) 743,410Advances 12,559,414 5,938,782Other assets (excluding advance taxation) (1,185,766) 1,563,434

9,666,706 7,327,985(Decrease) / increase in operating liabilitiesBills payable (101,444) (47,190)Borrowings 9,960,026 (9,051,063)Deposits and other accounts 58,609,664 8,476,041Other liabilities (excluding current taxation) 2,697,443 (1,383,783)

71,165,689 (2,005,995)107,998,762 33,395,297

Staff retirement benefits received / (paid) 977,691 (637,322)Income taxes paid (8,906,105) (9,658,543)Net cash inflow from operating activities 100,070,348 23,099,432

CASH FLOW FROM INVESTING ACTIVITIESNet investment in securities (76,127,684) (13,565,270)Dividend income received 591,017 620,499Investment in operating fixed assets (2,263,630) (1,550,661)Sale proceeds from disposal of property and equipment 96,850 172,876Net cash outflow from investing activities (77,703,447) (14,322,556)

CASH FLOW FROM FINANCING ACTIVITIESRepayments of principal of sub-ordinated loans (4,052) (4,048)Dividends paid (4,006,407) (1,011,719)Net cash used in financing activities (4,010,459) (1,015,767)Exchange differences on translation of net investment in foreign branches 419,851 1,549,269Increase in cash and cash equivalents 18,776,293 9,310,378

Cash and cash equivalents at beginning of the year 66,877,517 57,567,139

Cash and cash equivalents at end of the year 34 85,653,810 66,877,517







Capital reservesShare Statutory Exchange Reserve for Cash flow Unappro-Capital reserve translation issue of bo- hedge priated Total

reserve nus shares reserve profit

------------------------------------------- (Rupees in '000) -------------------------------------------

Balance as at January 1, 2009 10,117,188 10,376,375 5,401,771 - (276,633) 16,604,076 42,222,777

Final cash dividend for the year ended December 31, 2008declared subsequent to year end at Re.1.00 per share - - - - - (1,011,719) (1,011,719)

Transfer to reserve for issue of bonus share - - - 1,011,719 - (1,011,719) -

Issue of bonus shares at 10% 1,011,719 - - (1,011,719) - - -

Changes in equity for 2009

Profit after taxation for the year ended December 31, 2009 - - - - - 9,192,687 9,192,687Other comprehensive income - net of tax - - 1,549,269 - 70,218 - 1,619,487Total comprehensive income - - 1,549,269 - 70,218 9,192,687 10,812,174

Transfer from surplus on revaluation of fixed assetsto unappropriated profit - net of tax - - - - - 253,014 253,014

Transfer to statutory reserve - 1,838,537 - - - (1,838,537) -

Balance as at December 31, 2009 11,128,907 12,214,912 6,951,040 - (206,415) 22,187,802 52,276,246

Final cash dividend for the year ended December 31, 2009declared subsequent to year end at Rs.2.50 per share - - - - - (2,782,227) (2,782,227)

Interim cash dividend for the half year ended June 30, 2010declared at Re. 1.00 per share - - - - - (1,224,180) (1,224,180)

Transfer to reserve for issue of bonus shares - - - 1,112,891 - (1,112,891) -

Issue of bonus shares at 10% 1,112,891 - - (1,112,891) - - -


Profit after taxation for the year ended December 31, 2010 - - - - - 11,159,930 11,159,930Other comprehensive income - net of tax - - 419,851 - 77,263 - 497,114Total comprehensive income - - 419,851 - 77,263 11,159,930 11,657,044

Transfer from surplus on revaluation of fixed assetsto unappropriated profit - net of tax - - - - - 254,041 254,041

Transfer to statutory reserve - 2,231,986 - - - (2,231,986) -

Balance as at December 31, 2010 12,241,798 14,446,898 7,370,891 - (129,152) 26,250,489 60,180,924

Appropriations made by the Directors subsequent to the year ended December 31, 2010 are disclosed in note 46 to these unconsolidated financial statements.



[ Unconsolidated Statement of Changes in Equity For the year ended December 31, 2010 ]






35

[ Notes to and forming part of the UnconsolidatedFinancial Statements For the year ended December 31, 2010 ]

Annual Report 2010

1. STATUS AND NATURE OF BUSINESS

United Bank Limited (the Bank) is a banking company incorporated in Pakistan and is engaged in commercial banking andrelated services. The Bank's registered office and principal office are situated at UBL building, Jinnah Avenue, Blue Area,Islamabad and at State Life Building No. 1, I. I. Chundrigar Road, Karachi respectively. The Bank operates 1,123 (2009: 1,120)branches including 6 (2009: 5) Islamic banking branches, 1 (2009: 1) branch in Karachi Export Processing Zone (KEPZ) and17 (2009: 17) branches outside Pakistan.

The Bank's Ordinary shares are listed on all three stock exchanges in Pakistan whereas its Global Depository Receipts (GDRs)are on the list of the UK Listing Authority and the London Stock Exchange Professional Securities Market. These GDRs arealso eligible for trading on the International Order Book System of the London Stock Exchange. Further, the GDRs constitutean offering in the United States only to qualified institutional buyers in reliance on Rule 144A under the US Securities Act of1933 and an offering outside the United States in reliance on Regulation S.

2. BASIS OF PRESENTATION

2.1 In accordance with the directives of the Federal Government regarding the shifting of the banking system to Islamic modes,the State Bank of Pakistan (SBP) has issued various circulars from time to time. Permissible forms of trade-related modes offinancing include purchase of goods by banks from their customers and immediate resale to them at appropriate mark-up inprice on deferred payment basis. The purchases and sales arising under these arrangements are not reflected in theseunconsolidated financial statements as such, but are restricted to the amount of facility actually utilized and the appropriateportion of mark-up thereon. However, the Islamic Banking branches of the Bank have complied with the requirements set outunder the Islamic Financial Accounting Standards issued by the Institute of Chartered Accountants of Pakistan and notifiedunder the provisions of the Companies Ordinance, 1984.

2.2 The financial results of the Islamic banking branches of the Bank have been included in these unconsolidated financialstatements for reporting purposes, after eliminating material inter-branch transactions / balances. Key financial figures of theIslamic banking branches are disclosed in note 45 to these unconsolidated financial statements.

2.3 With effect from the current year, 'Balance Sheet' has been renamed as 'Statement of Financial Position' keeping in view therequirement of BSD Circular letter No.7 of 2010 dated April 20, 2010 issued by the SBP.

3. STATEMENT OF COMPLIANCE

3.1 These unconsolidated financial statements have been prepared in accordance with approved accounting standards asapplicable in Pakistan. Approved accounting standards comprise of such International Financial Reporting Standards (IFRS)and interpretations issued by the International Accounting Standards Board and Islamic Financial Accounting Standards (IFAS)issued by the Institute of Chartered Accountants of Pakistan, the requirements of the Companies Ordinance, 1984, BankingCompanies Ordinance, 1962 or directives issued by the Securities and Exchange Commission of Pakistan and the StateBank of Pakistan. Wherever the requirements of the Companies Ordinance, 1984, Banking Companies Ordinance, 1962 ordirectives issued by the Securities and Exchange Commission of Pakistan and the State Bank of Pakistan differ with therequirements of IFRS or IFAS, the requirements of the Companies Ordinance, 1984, Banking Companies Ordinance, 1962or said directives prevail.

3.2 The SBP vide BSD Circular letter No. 10, dated August 26, 2002 has deferred the applicability of International AccountingStandard 39, Financial Instruments: Recognition and Measurement (IAS 39) and International Accounting Standard 40,Investment Property (IAS 40) for banking companies till further instructions. Further, according to the notification of SECPissued vide SRO 411(I)/2008 dated April 28, 2008, IFRS - 7 "Financial Instruments: Disclosures" has not been made applicablefor banks. Accordingly, the requirements of these standards have not been considered in the preparation of these financialstatements. However, investments have been classified and valued in accordance with the requirements of various circularsissued by the SBP.



3.3 These unconsolidated financial statements represent the separate standalone financial statements of the Bank. Theconsolidated financial statements of the Bank and its subsidiary companies are presented separately.

3.4 Standards, interpretations and amendments to approved accounting standards that are not yet effective

The following revised standards, amendments and interpretations with respect to approved accounting standards asapplicable in Pakistan would be effective from the dates mentioned below against the respective standard or interpretation:

Standard or Interpretation Effective date(annual periods beginning

on or after)

IAS 32 - Financial Instruments: Presentation -Classification of Rights Issues (Amendment) 01 February 2010

IAS 24 - Related Party Disclosures (Revised) 01 January 2011

IAS 12 - Income Taxes: Deferred Tax Amendment –Recognition of Underlying Assets 01 January 2012

IFRIC 14 - IAS 19 – The Limit on a Defined Benefit Asset,Minimum Funding Requirements and their Interaction (Amendments) 01 January 2011

IFRIC 19 - Extinguishing Financial Liabilities with Equity Instruments 01 July 2010

The Bank expects that the adoption of the above revisions, amendments and interpretations of the standards will not affectthe Bank's financial statements in the period of initial application.

In addition to the above, amendments to various accounting standards have also been issued by the IASB. Suchimprovements are generally effective for accounting periods beginning on or after 01 January 2011. The Bank expects thatsuch improvements to the standards will not have any material impact on the Bank's financial statements in the period of initialapplication.

4. BASIS OF MEASUREMENT

4.1 Accounting convention

These unconsolidated financial statements have been prepared under the historical cost convention except that certainoperating fixed assets have been stated at revalued amounts and certain investments and derivative financial instruments havebeen stated at fair value.

4.2 Critical accounting estimates and judgments

The preparation of these unconsolidated financial statements in conformity with approved accounting standards requiresmanagement to make judgments, estimates and assumptions that affect the reported amounts of assets and liabilities andincome and expenses. It also requires management to exercise judgment in application of its accounting policies. Theestimates and associated assumptions are based on historical experience and various other factors that are believed to bereasonable under the circumstances. These estimates and assumptions are reviewed on an ongoing basis. Revisions toaccounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period, orin the period of revision and future periods if the revision affects both current and future periods.

37


Annual Report 2010

Significant accounting estimates and areas where judgments were made by the management in the application of accountingpolicies are as follows:

i) classification of investments (notes 5.4 and 9)ii) provision against investments (notes 5.4 and 9.3) and advances (notes 5.5 and 10.5)iii) income taxes (notes 5.8 and 32)iv) staff retirement benefits (notes 5.10 and 36)v) fair value of derivatives (notes 5.15 and 19.4)vi) operating fixed assets, depreciation and amortization (notes 5.6 and 11)vii) impairment (note 5.7)

5. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

5.1 Significant accounting policies

The accounting policies adopted in the preparation of these financial statements are consistent with those of the previousfinancial year except as follows:

The Bank has adopted the following new and amended IFRS and related interpretations which became effective during the year:

IFRS 2 - Share-based Payments: Amendments relating to Group Cash-settled Share-based Payment Transactions

IFRS 3 - Business Combinations (Revised)

IAS 27 - Consolidated and Separate Financial Statements (Amendment)

IFRIC 17 - Distributions of Non-cash Assets to owners

In May 2008 and April 2009, International Accounting Standards Board issued amendments to various standards primarilywith a view to removing inconsistencies and clarifying wording. These improvements are listed below:

Issued in May 2008IFRS 5 – Non-Current Assets Held for Sale and Discontinued Operations

Issued in April 2009IFRS 2 – Share-based Payments (note 37.3)IFRS 5 – Non-Current Assets Held for Sale and Discontinued OperationsIFRS 8 – Operating SegmentsIAS 1 – Presentation of Financial StatementsIAS 7 – Statement of Cash FlowsIAS 17 – LeasesIAS 36 – Impairment of AssetsIAS 38 – Intangible AssetsIAS 39 – Financial Instruments: Recognition and measurementIFRIC 9 – Reassessment of Embedded DerivativesIFRIC 16 – Hedges of a Net Investment in a Foreign Operation

The adoption of the above standards, amendments / improvements and interpretations did not have a material effect on thefinancial statements.


5.2 Cash and cash equivalents

Cash and cash equivalents for the purpose of the cash flow statement represent cash and balances with treasury banks andbalances with other banks in current and deposit accounts.

5.3 Lendings to / borrowings from financial institutions

The Bank enters into transactions of repos and reverse repos at contracted rates for a specified period of time. These arerecorded as under:

5.3.1 Sale under repurchase agreements

Securities sold subject to a re-purchase agreement (repo) are retained in the unconsolidated financial statements asinvestments and the counter party liability is included in borrowings from financial institutions. The differential in sale and re-purchase value is accrued over the period of the agreement and recorded as an expense.

5.3.2 Purchase under resale agreements

Securities purchased under agreement to resell (reverse repo) are included in lendings to financial institutions. The differentialbetween the purchase price and resale price is amortized over the period of the agreement and recorded as income.

Securities held as collateral are not recognized in the unconsolidated financial statements, unless these are sold to thirdparties, in which case the obligation to return them is recorded at fair value as a trading liability under borrowings fromfinancial institutions.

5.4 Investments

Investments of the Bank, other than investments in subsidiaries and associates are classified as held for trading, held-to-maturity and available for sale.

Held for trading

These are securities which are either acquired for generating a profit from short-term fluctuations in market prices, interest ratemovements, dealer's margin or are securities included in a portfolio in which a pattern of short-term profit taking exists.

Held to maturity

These are securities with fixed or determinable payments and fixed maturity in respect of which the Bank has the positive intentand ability to hold to maturity.

Available for sale

These are investments, other than those in subsidiaries and associates, that do not fall under the held for trading or held tomaturity categories.

Initial measurement

All “regular way” purchases and sales of investments are recognized on the trade date, i.e., the date that the Bank commitsto purchase or sell the asset. Regular way purchases or sales are purchases or sales of investments that require delivery ofassets within the time frame generally established by regulation or convention in the market place.


39Annual Report 2010

Investments are initially recognized at fair value which, in the case of investments other than held-for-trading, includestransaction costs associated with the investments.

Subsequent measurement

Held for trading

These are measured at subsequent reporting dates at fair value. Gains and losses on re-measurement are included in the profitand loss account.

Held to maturity

These are measured at amortized cost using the effective interest rate method, less any impairment loss recognized to reflectirrecoverable amounts.

Available for sale

Quoted-securities classified as available-for-sale investments are measured at subsequent reporting dates at fair value. Anysurplus / deficit arising thereon is kept in a separate account shown in the balance sheet below equity and taken to the profitand loss account when actually realized upon disposal or when the investment is considered to be impaired.

Unquoted equity securities are valued at the lower of cost and break-up value. A decline in the carrying value is charged tothe profit and loss account. The break-up value of these equity securities is calculated with reference to the net assets of theinvestee company as per the latest available audited financial statements. Investments in other unquoted securities are valuedat cost less impairment losses.

Provision for diminution in the value of securities (except term finance certificates) is made for impairment, if any. Provision fordiminution in the value of term finance certificates is made as per the aging criteria prescribed by the Prudential Regulationsissued by the SBP.

Investments in Subsidiaries and Associates

Investments in subsidiaries and associates are valued at cost less impairment, if any. A reversal of an impairment loss onassociates and subsidiaries is recognized as it arises provided the increased carrying value does not exceed that it would havebeen had no impairment loss been recognized.

Gain or loss on sale of investments in subsidiaries and associates is included in the profit and loss account for the year.

5.5 Advances

Advances are stated net of specific and general provisions. Specific provision against domestic advances is determined onthe basis of the Prudential Regulations and other directives issued by the SBP and is charged to the profit and loss account.General provision against consumer loans is made in accordance with the requirements of the Prudential Regulations issuedby the SBP. General and specific provisions pertaining to overseas advances are made in accordance with the requirementsof the monetary agencies and the regulatory authorities of the respective countries. The Bank, from time to time, makesgeneral provision against weaknesses in its portfolio if circumstances warrant on the basis of management's estimation.Advances are written off when there is no realistic prospect of recovery. The amount so written off is a book entry withoutprejudice to the Bank's right of recovery against the customer.

The Bank determines write-offs in accordance with the criteria prescribed by the SBP vide BPRD Circular No. 06 dated June05, 2007.




5.6 Operating fixed assets and depreciation

5.6.1 Owned

Property and equipment, other than freehold land (which is not depreciated) and capital work-in-progress, are stated at costor revalued amount less accumulated depreciation and accumulated impairment losses (if any). Freehold land is carried atrevalued amount less impairment losses while capital work-in-progress is stated at cost less impairment losses. The cost ofproperty and equipment of foreign branches includes exchange difference arising on currency translation at the year-endrates of exchange.

Depreciation is calculated so as to write off the depreciable amount of the assets over their expected economic lives at therates specified in note 11.2 to these unconsolidated financial statements. The depreciation charge for the year is calculatedafter taking into account residual value, if any, and using methods depending on the nature of the asset and the country ofits location. The residual values, useful lives and depreciation methods are reviewed and adjusted, if appropriate, at eachstatement of financial position date.

Depreciation on additions is charged from the month the asset is available for use. No depreciation is charged in the monthof disposal.

Land and buildings are revalued by professionally qualified valuers with sufficient regularity to ensure that their net carrying valuedoes not differ materially from their fair value.

Surplus arising on revaluation is credited to the surplus on revaluation of fixed assets account. Deficit arising on subsequentrevaluation of fixed assets is adjusted against the balance in the above-mentioned surplus account as allowed under theprovisions of the Companies Ordinance, 1984. The surplus on revaluation of fixed assets, to the extent of incrementaldepreciation charged on the related assets, is transferred to unappropriated profit.

Gains and losses on sale of fixed assets are included in income currently, except that the related surplus on revaluation of fixedassets (net of deferred taxation) is transferred directly to unappropriated profit.

Major renewals and improvements are capitalized and the assets so replaced, if any, are retired. Normal repairs andmaintenance are charged to the profit and loss account as and when incurred.

5.6.2 Leased (Ijarah)

Assets leased out under Ijarah are stated at cost less accumulated depreciation and accumulated impairment losses, if any.Assets under Ijarah are depreciated over the period of the lease term.

Ijarah income is recognized on an accrual basis as and when the rental becomes due.

5.6.3 Intangible assets

Intangible assets having a finite useful life are stated at cost less accumulated amortization and accumulated impairmentlosses, if any. Intangible assets are amortized using the straight line method, from the month when these assets are availablefor use, whereby the cost of the intangible asset is amortized on the basis of the estimated useful life over which economicbenefits are expected to flow to the Bank. The residual values and useful lives are reviewed and adjusted, if appropriate, ateach statement of financial position date.



5.7 Impairment

Impairment in available for sale equity investments

Available for sale equity investments are impaired when there has been a significant or prolonged decline in the fair valuebelow its cost. The determination of what is significant or prolonged requires judgment. In making this judgment, the Bankevaluates among other factors, the normal volatility in share price.

Impairment in investments in associates and subsidiaries

The Bank considers that a decline in the recoverable value of investment in associates and subsidiaries below their cost maybe evidence of impairment. Recoverable value is calculated as the higher of fair value less costs to sell and value in use. Animpairment loss is recognized when the recoverable value falls below the carrying value and is charged to the profit and lossaccount. Subsequent reversal of impairment loss, upto the cost of investment in associates and subsidiaries is credited tothe profit and loss account.

Impairment in non-financial assets (excluding deferred tax)

The carrying amounts of non-financial assets are reviewed at each reporting date for impairment whenever events or changesin circumstances indicate that the carrying amounts of the assets may not be recoverable. If such indication exists, and wherethe carrying value exceeds the estimated recoverable amount, assets are written down to their recoverable amount. Theresulting impairment loss is taken to the profit and loss account except for impairment loss on revalued assets, which isadjusted against the related revaluation surplus to the extent that the impairment loss does not exceed the surplus onrevaluation of the revalued assets.

5.8 Taxation

5.8.1 Current

Provision for current taxation is based on taxable income for the year determined in accordance with the prevailing laws fortaxation on income earned from local as well as foreign operations, as applicable to the respective jurisdictions. The chargefor current tax is calculated using prevailing tax rates. The charge for current tax also includes, where considered necessary,adjustments relating to prior years, arising from assessments made during the year.

5.8.2 Deferred

Deferred tax is recognized using the liability method on all major temporary differences between the amounts attributed toassets and liabilities for financial reporting purposes and the amounts used for taxation purposes. In addition, the Bank alsorecords a deferred tax asset on available tax losses. Deferred tax is calculated at the rates that are expected to apply to theperiod when the differences are expected to reverse, based on tax rates that have been enacted or substantively enacted atthe statement of financial position date.

Deferred tax assets are recognized only to the extent that it is probable that future taxable profits will be available against whichthe assets can be utilized.

The carrying amount of the deferred tax asset is reviewed at each statement of financial position date and reduced to the extentthat it is no longer probable that sufficient taxable profits will be available to allow all or part of the deferred tax asset to beutilized.

The Bank also recognizes a deferred tax asset / liability on deficit / surplus on revaluation of fixed assets, cash flow hedgereserve and securities which is adjusted against the related deficit / surplus in accordance with the requirements of the revisedInternational Accounting Standard (IAS) 12, Income Taxes.


5.9 Provisions

Provisions are recognized when the Bank has a legal or constructive obligation as a result of past events which makes it probablethat an outflow of resources will be required to settle the obligation and a reliable estimate of the amount can be made.

Provision against identified non-funded losses is recognized when intimated and reasonable certainty exists for the Bank tosettle the obligation. The loss is charged to the profit and loss account net of expected recovery and the provision is classifiedunder other liabilities.

Provisions are reviewed at each statement of financial position date and are adjusted to reflect the current best estimate.

5.10 Staff retirement and other benefits

5.10.1 Staff retirement benefit schemes

The Bank operates the following staff retirement schemes for its employees

a) For new employees and for those who opted for the new scheme introduced in 1991, the Bank operates an

- approved contributory provident fund (defined contribution scheme); and- approved gratuity scheme (defined benefit scheme).

b) For employees who have not opted for the new scheme introduced in 1991, the Bank operates an

- approved funded pension scheme, introduced in 1986 (defined benefit scheme); and- approved non-contributory provident fund in lieu of the contributory provident fund.

In the year 2001, the Bank modified the pension scheme and introduced a conversion option for employees covered underoption (b) above to move to option (a). This conversion option ceased on December 31, 2003.

The Bank also operates a contributory benevolent fund for all its eligible employees (defined benefit scheme).

Annual contributions towards the defined benefit schemes are made on the basis of actuarial advice using the Projected UnitCredit Method.

For defined contribution plans, the Bank pays contributions to the Fund on a periodic basis. The Bank has no further paymentobligation once the contributions have been paid. The contributions are recognized as an expense when they are due. Prepaidcontributions are recognized as an asset to the extent that a cash refund or a reduction of the future payments is available.

5.10.2 Other benefits

a) Employees' compensated absences

The Bank makes provisions for compensated vested and non-vested absences accumulated by its eligible employees onthe basis of actuarial advice under the Projected Unit Credit Method.



b) Post retirement medical benefits (defined benefit scheme)

The Bank provides post retirement medical benefits to eligible retired employees. Provision is made annually to meet thecost of such medical benefits on the basis of actuarial advice under the Projected Unit Credit Method.

c) Employee motivation and retention scheme

The Bank operates a long term motivation and retention scheme for its employees with the objective of rewarding,motivating and retaining its high performing executives and officers. The liability of the Bank is fixed and is determined eachyear based on the performance of the Bank.

5.10.3 Actuarial gains and losses

Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions in excess of the greaterof 10% of the value of the plan assets or 10% of the defined benefit obligation at the end of the last reporting year are chargedor credited to income over the employees' expected average remaining working lives. These limits are calculated and appliedseparately for each defined benefit plan.

Actuarial gains and losses pertaining to long term compensated absences are recognized immediately.

5.11 Sub-ordinated Debt

Sub-ordinated debt is initially recorded at the amount of proceeds received. Mark-up accrued on subordinated debt isrecognised separately as part of other liabilities and is charged to the profit and loss account over the period on an accrual basis.

5.12 Borrowings / deposits and their cost

a) Borrowings / deposits are recorded at the proceeds received.

b) Borrowings / deposits costs are recognized as an expense in the period in which these are incurred.

5.13 Revenue recognition

Revenue is recognized to the extent that the economic benefits will flow to the Bank and the revenue can be reliably measured.The following recognition criteria must be met before revenue is recognized.

5.13.1 Advances and investments

Mark-up / return on performing advances and investments is recognized on a time proportionate basis over the term of theadvances and investments. Where debt securities are purchased at premium or discount, such premium / discount isamortized through the profit and loss account over the remaining period of maturity.

Interest or mark-up recoverable on non-performing advances and classified investments is recognized on receipt basis.Interest / return / mark-up on rescheduled / restructured loans and advances and investments is recognized as permitted bythe regulations of the SBP or overseas regulatory authorities of the countries where the branches operate, except where, inthe opinion of the management, it would not be prudent to do so.

5.13.2 Dividend income

Dividend income is recognised when the right to receive the dividend is established.



5.13.3 Fee, brokerage and commission

Fee, brokerage, commission and other income is recognized on an accrual basis.

5.14 Foreign currencies

5.14.1 Functional and presentation currency

Items included in the financial statements are measured using the currency of the primary economic environment in whichthe Bank operates. The financial statements are presented in Pakistani Rupees, which is the Bank's functional andpresentation currency.

5.14.2 Foreign currency transactions

Transactions in foreign currencies are translated to rupees at the foreign exchange rates prevailing on the transaction date.Monetary assets and liabilities in foreign currencies are expressed in rupee terms at the rates of exchange prevailing at thestatement of financial position date. Forward foreign exchange contracts and foreign bills purchased are valued at forward ratesapplicable to their respective maturities.

5.14.3 Foreign operations

The assets and liabilities of foreign operations are translated to rupees at exchange rates prevailing at the statement of financialposition date. The results of foreign operations are translated at the average rate of exchange for the year.

5.14.4 Translation gains and losses

Translation gains and losses are taken to the profit and loss account, except those arising on the translation of net investmentin foreign branches which are taken to capital reserve (Exchange Translation Reserve) until the disposal of the net investmentat which time these are recognised in the profit and loss account.

5.14.5 Commitments

Commitments for outstanding forward foreign exchange contracts are disclosed in the unconsolidated financial statementsat contracted rates. Contingent liabilities / commitments for letters of credit and letters of guarantee denominated in foreigncurrencies are expressed in rupee terms at the rates of exchange prevailing at the date of the statement of financial position.All other commitments are disclosed in the unconsolidated financial statements at the committed amount.

5.15 Financial instruments

5.15.1 Financial assets and liabilities

Financial instruments carried on the statement of financial position include cash and bank balances, lendings to financialinstitutions, investments, advances, certain receivables, bills payable, borrowings from financial institutions, deposits, sub-ordinated loans and certain other payables. The particular recognition methods adopted for significant financial assets andfinancial liabilities are disclosed in the individual policy notes associated with them.

5.15.2 Derivative financial instruments

Derivative financial instruments are initially recognized at fair value on the date on which the derivative contract is entered intoand are subsequently re-measured at fair value using appropriate valuation techniques. All derivative financial instruments arecarried as assets when their fair value is positive and liabilities when their fair value is negative. Any change in the fair value ofderivative financial instruments is taken to the profit and loss account.



5.15.3 Hedge accounting

The Bank makes use of derivative instruments to manage exposures to interest rate, foreign currency and credit risks, includingexposures arising from forecast transactions. In order to manage particular risks, the Bank applies hedge accounting fortransactions which meet the specified criteria.

At the inception of the hedge relationship, the Bank formally documents the relationship between the hedged item and thehedging instrument, including the nature of the risk, the objective and strategy for undertaking the hedge and the method thatwill be used to assess the effectiveness of the hedging relationship.

Also, at the inception of the hedge relationship, a formal assessment is undertaken to ensure the hedging instrument isexpected to be highly effective in offsetting the designated risk in the hedged item. Hedges are formally assessed each quarter.A hedge is regarded as highly effective if the changes in fair value or cash flows attributable to the hedged risk during the periodfor which the hedge is designated are expected to offset in a range of 80% to 125%. For situations where the hedged itemis a forecast transaction, the Bank assesses whether the transaction is highly probable and presents an exposure to variationsin cash flows that could ultimately affect the profit and loss account.

(a) Fair value hedges

For designated and qualifying fair value hedges, the change in the fair value of a hedging derivative is recognised in the profitand loss account within other income. The change in the fair value of the hedged item attributable to the risk hedged is recordedas part of the carrying value of the hedged item and is also recognised in the profit and loss account within other income.

(b) Cash flow hedges

For qualifying cash flow hedges, the fair value gain or loss associated with the effective portion of the cash flow hedge isrecognised initially in the statement of changes in equity, and recycled to the profit and loss account in the periods when thehedged item will affect profit or loss. Any ineffective portion of the gain or loss on the hedging instrument is recognised in theprofit and loss account immediately.

When a hedging instrument expires or is sold, or when a hedge no longer meets the criteria for hedge accounting, anycumulative gain or loss existing in equity at that time remains in equity and is recognised when the hedged item is ultimatelyrecognised in the profit and loss account . When a forecast transaction occurs or is no longer expected to occur, thecumulative gain or loss that was recognised in equity is immediately transferred to the profit and loss account.

5.15.4 Off setting

Financial assets and financial liabilities are set off and the net amount is reported in the unconsolidated financial statementswhen there is a legally enforceable right to set off and the Bank intends to either settle on a net basis, or to realize the assetsand to settle the liabilities simultaneously.

5.16 Segment reporting

A segment is a distinguishable component of the Bank that is engaged either in providing particular products or services(business segment), or in providing products or services within a particular economic environment (geographical segment),which is subject to risks and rewards that are different from those of other segments.



5.16.1 Business segments

(a) Corporate finance

Corporate banking includes services provided in connection with mergers and acquisition, underwriting, privatization,securitization, research, debts instruments, equity, syndication, IPO and secondary private placements.

(b) Trading and sales

Trading and sales includes fixed income, equity, foreign exchange, commodities, credit, funding, own position securities,lending and repos, brokerage debt and prime brokerage.

(c) Retail banking

Retail banking includes retail lending and deposits, banking services, trusts and estates, private lending and deposits,investment advice, merchant / commercial / corporate cards.

(d) Commercial banking

Commercial banking includes project finance, real estate, export finance, trade finance, factoring, leasing, lending,guarantees, bills of exchange and deposits.

(e) Others

Other includes support functions of the bank which can not be classified in any of the above segment.

5.16.2 Geographical segments

The Bank operates in four geographical regions being:

- Pakistan- Karachi Export Processing Zone- United States of America- Middle East

5.17 Dividends and appropriations to reserves

Dividends and appropriations to reserves are recorded in the year in which these are approved, except appropriations requiredby the law which are recorded in the period to which they pertain.

5.18 Earnings per share

The Bank presents basic and diluted earnings per share (EPS) for its shareholders. Basic EPS is calculated by dividing theprofit or loss attributable to ordinary shareholders of the bank by the weighted average number of ordinary shares outstandingduring the year.



Note 2010 2009----- (Rupees in ‘000) -----

6. CASH AND BALANCES WITH TREASURY BANKS

In handLocal currency 11,680,324 10,911,325Foreign currency 2,539,542 3,088,167

14,219,866 13,999,492With State Bank of Pakistan in

Local currency current account 6.1 22,362,478 18,937,149Local currency deposit account 3,864 3,864Foreign currency current account 6.2 1,287,860 1,125,581Foreign currency deposit account 6.3 3,781,588 3,365,199

27,435,790 23,431,793With other central banks in foreign currency current account 6.4 11,960,999 15,372,202With National Bank of Pakistan in local currency current account 13,798,332 8,609,162National Prize Bonds 46,681 57,398

67,461,668 61,470,047

6.1 This represents current accounts maintained with the SBP under the requirements of section 22 (Cash Reserve Requirement)of the Banking Companies Ordinance, 1962.

6.2 This represents US Dollar Settlement Account maintained with SBP and includes current accounts maintained with SBP tomeet cash reserve requirement of 5% on FE 25 deposits, under the requirements of BSD Circular No. 18 dated March 31,2001 and OSED Circular No. 1 dated November 13, 2006.

6.3 This represents special cash reserve requirement maintained with SBP under the requirements of BSD Circular No. 14 of2008 dated June 21, 2008. The return on this account is declared by SBP on a monthly basis and, as at December 31, 2010carries, mark-up at the rate of 0% (2009: 0%) per annum.

6.4 Deposits with other central banks are maintained to meet the minimum cash reserves and capital requirements pertaining tothe foreign branches of the Bank.

Note 2010 2009----- (Rupees in ‘000) -----

7. BALANCES WITH OTHER BANKS

Inside PakistanIn current accounts - 26,715In deposit accounts 7.1 3,472 75,630

3,472 102,345Outside Pakistan

In current accounts 2,902,027 3,933,891In deposit accounts 7.1 15,286,643 1,371,234

18,188,670 5,305,12518,192,142 5,407,470

7.1. These carry mark-up at rates ranging from 0.10% to 5.00% (2009: 0.12% to 2.01%) per annum.



Note 2010 2009----- (Rupees in ‘000) -----

8. LENDINGS TO FINANCIAL INSTITUTIONS

Call money lendings 8.2 450,000 1,110,610Repurchase agreement lendings 8.3 4,431,877 17,941,216Other lendings to financial institutions 8.4 7,502,901 4,671,156

12,384,778 23,722,982Provision against lendings to financial institutions 8.5 - (560,852)

12,384,778 23,162,130

8.1 Particulars of lendings to financial institutions

In local currency 6,466,878 21,140,954In foreign currencies 5,917,900 2,021,176

12,384,778 23,162,130

8.2 These are unsecured lendings carrying mark-up at rates ranging from 10.25% to 11.75% per annum (2009: 11.95% to12.65% per annum) and are due to mature latest by March 2011.

8.3 Securities held as collateral against repurchase agreement lendings

2010 2009Held by Further given Total Held by Further given TotalBank as collateral / Bank as collateral /

sold sold-------------------------------------- (Rupees in '000) --------------------------------------

Market Treasury Bills 2,881,877 - 2,881,877 16,691,063 990,566 17,681,629Pakistan Investment Bonds 650,000 900,000 1,550,000 159,587 100,000 259,587

3,531,877 900,000 4,431,877 16,850,650 1,090,566 17,941,216

These carry mark-up at rates ranging from 11.75% to 13.50% per annum (2009: 10.75% to 12.35% per annum) and are dueto mature latest by February 2011.

8.4 Lendings pertaining to domestic operations carry mark-up at rates ranging from 3.00% to 15.34% per annum (2009: 3.00%to 15.87% per annum) and are due to mature latest by April 2014, whereas lendings pertaining to overseas operations carrymark-up at rates ranging from 0.75% to 3.8% per annum (2009: 1.03% to 3.46% per annum) and are due to mature latestby December 2012.

8.5 This represents provision made against lendings to overseas financial institutions with movement as follows:

Note 2010 2009----- (Rupees in ‘000) -----

Opening balance 560,852 -Charged during the year - 560,852Transferred during the year 8.5.1 (560,852) -Closing balance - 560,852

8.5.1 The balance has been transferred to 'Investments' on issuance of recovery notes and preference shares by the financialinstitution.




9. INVESTMENTS2010 2009

9.1 Investments by types Note Held by Given as Total Held by Given as TotalBank collateral Bank collateral

----------------------------------------- (Rupees in '000) -----------------------------------------

Held for trading securities

Market Treasury Bills 12,984,400 1,189,144 14,173,544 3,268,035 - 3,268,035Pakistan Investment Bonds 805,257 - 805,257 438,505 97,306 535,811Ordinary shares of listed companies 8,928 - 8,928 - - -Foreign securities 1,297,405 - 1,297,405 - - -

15,095,990 1,189,144 16,285,134 3,706,540 97,306 3,803,846Available for sale securities

Market Treasury Bills 39,519,598 20,695,498 60,215,096 35,572,747 3,978,323 39,551,070Pakistan Investment Bonds 18,988,194 536,428 19,524,622 16,728,759 - 16,728,759Government of Pakistan - Sukuk 4,122,000 - 4,122,000 3,470,000 - 3,470,000Government of Pakistan Eurobonds 3,938,516 - 3,938,516 3,870,557 - 3,870,557Ordinary shares of listed companies 3,629,299 - 3,629,299 3,639,088 - 3,639,088Preference shares 463,977 - 463,977 188,895 - 188,895Ordinary shares of unlisted companies 9.7 445,382 - 445,382 441,574 - 441,574Term Finance Certificates 2,163,810 - 2,163,810 1,948,689 - 1,948,689Units of mutual funds 164,662 - 164,662 191,299 - 191,299Foreign securities 14,878,099 - 14,878,099 12,740,879 - 12,740,879

88,313,537 21,231,926 109,545,463 78,792,487 3,978,323 82,770,810Held to maturity securities

Market Treasury Bills 58,843,648 - 58,843,648 11,611,110 - 11,611,110Pakistan Investment Bonds 4,392,225 - 4,392,225 2,497,301 - 2,497,301Government of Pakistan - Sukuk 30,000 - 30,000 30,000 - 30,000Government of Pakistan - Eurobonds - - - 478,184 - 478,184Government of Pakistan - Guaranteed Bonds 51,399 - 51,399 1,485,057 - 1,485,057Term Finance Certificates 27,106,749 - 27,106,749 25,289,199 - 25,289,199Sukuk Bonds 2,548,739 - 2,548,739 2,640,040 - 2,640,040Participation Term Certificates 19,202 - 19,202 26,838 - 26,838Debentures 4,392 - 4,392 4,592 - 4,592Foreign securities 2,184,264 - 2,184,264 1,687,712 - 1,687,712CDC SAARC Fund 428 - 428 421 - 421

95,181,046 - 95,181,046 45,750,454 - 45,750,454Associates

United Growth and Income Fund 3,030,136 - 3,030,136 5,002,027 - 5,002,027UBL Liquidity Plus Fund 2,600,000 - 2,600,000 600,000 - 600,000United Composite Islamic Fund 250,000 - 250,000 386,997 - 386,997United Islamic Income Fund 200,000 - 200,000 250,000 - 250,000United Stock Advantage Fund 250,000 - 250,000 250,000 - 250,000UBL Participation Protected Plan 200,000 - 200,000 200,000 - 200,000UBL Capital Protected Fund - II 100,000 - 100,000 - - -UBL Savings Income Fund 100,000 - 100,000 - - -UBL Islamic Savings Fund 150,000 - 150,000 - - -UBL Islamic Retirement Savings Fund 90,000 - 90,000 - - -UBL Retirement Savings Fund 90,000 - 90,000 - - -UBL Capital Protected Fund - I 75,075 - 75,075 75,075 - 75,075UBL Insurers Limited 240,000 - 240,000 150,000 - 150,000Oman United Exchange Company, Muscat 6,981 - 6,981 6,981 - 6,981

9.9 7,382,192 - 7,382,192 6,921,080 - 6,921,080

Subsidiaries

United National Bank, UK 1,482,011 - 1,482,011 1,482,011 - 1,482,011United Bank AG Zurich, Switzerland 589,837 - 589,837 589,837 - 589,837UBL Fund Managers Limited 100,000 - 100,000 100,000 - 100,000United Executors and Trustees Company Ltd 30,100 - 30,100 30,100 - 30,100

2,201,948 - 2,201,948 2,201,948 - 2,201,948208,174,713 22,421,070 230,595,783 137,372,509 4,075,629 141,448,138

Provision for diminution in value of investments 9.3 (2,658,000) - (2,658,000) (2,252,653) - (2,252,653)

Investments (net of provisions) 205,516,713 22,421,070 227,937,783 135,119,856 4,075,629 139,195,485

Deficit on revaluation of available for sale securities 21.2 (3,309,144) (11,718) (3,320,862) (3,049,359) 2,404 (3,046,955)Deficit on revaluation of held for trading securities 9.4 (38,201) (164) (38,365) (2,286) (720) (3,006)

Total investments 202,169,368 22,409,188 224,578,556 132,068,211 4,077,313 136,145,524



Note 2010 2009----- (Rupees in ‘000) -----

9.2 Investments by segments

Federal Government SecuritiesMarket Treasury Bills 127,315,215 48,577,758Pakistan Investment Bonds 24,722,104 19,761,871Government of Pakistan - Sukuk 4,152,000 3,500,000Government of Pakistan - Eurobonds 3,938,516 4,348,741Government of Pakistan - Guaranteed Bonds 51,399 1,485,057

160,179,234 77,673,427

Foreign SecuritiesMarket Treasury Bills 5,917,073 5,852,457Government securities 4,770,078 3,214,893CDC SAARC Fund 428 421Other securities 13,589,690 11,213,698

24,277,269 20,281,469

Ordinary SharesListed companies 3,638,227 3,639,088Unlisted companies 9.7 445,382 441,574

4,083,609 4,080,662

Preference Shares 463,977 188,895

Units of Mutual Funds 164,662 191,299

Term Finance CertificatesListed companies 2,437,296 2,667,774Unlisted companies 26,833,263 24,570,114

29,270,559 27,237,888

Sukuk Bonds 2,548,739 2,640,040Debentures 4,392 4,592Participation Term Certificates 19,202 26,838

Investments in subsidiaries and associates 9.9 9,584,140 9,123,028

Total investments at cost 230,595,783 141,448,138

Provision for diminution in value of investments 9.3 (2,658,000) (2,252,653)

Investments (net of provisions) 227,937,783 139,195,485

Deficit on revaluation of available for sale securities 21.2 (3,320,862) (3,046,955)Deficit on revaluation of held for trading securities 9.4 (38,365) (3,006)

Total investments 224,578,556 136,145,524



2010 2009----- (Rupees in ‘000) -----

9.3 Particulars of provision for diminution in value of investments

9.3.1 Opening balance 2,252,653 2,536,770

Charged during the year 342,610 1,249,158Reversed during the year (138,037) (303,816)Net charge for the year 204,573 945,342

Reversed on disposal (337,899) (1,208,712)Transfers 548,318 -

210,419 (1,208,712)

Written off during the year (9,645) (20,747)Closing balance 2,658,000 2,252,653

9.3.2 Particulars of provision for diminution in value of investments by type

Available for sale securitiesOrdinary shares of listed companies 2,017,835 1,830,318Ordinary shares of unlisted companies 141,512 150,275Foreign securities 281,585 -

2,440,932 1,980,593Held to maturity securities

Term Finance Certificates 100,448 104,985Sukuk 77,667 -Debentures 4,391 4,591Participation Term Certificates 19,202 26,838

201,708 136,414Associates 15,360 135,646

2,658,000 2,252,653

9.3.3 Particulars of provision for diminution in value of investments by segment

Ordinary SharesListed companies 2,017,835 1,830,318Unlisted companies 141,512 150,275Foreign securities 281,585 -

2,440,932 1,980,593

Term Finance Certificates, Debentures andParticipation Term CertificatesTerm Finance Certificates 100,448 104,985Sukuk 77,667 -Debentures 4,391 4,591Participation Term Certificates 19,202 26,838

201,708 136,414Associates 15,360 135,646

2,658,000 2,252,653



2010 2009----- (Rupees in ‘000) -----

9.4 Unrealized gain / (loss) on revaluation of held for trading securities

Market Treasury Bills (353) 1,416Pakistan Investment Bonds 2,440 (4,422)Ordinary shares of listed companies 91 -Foreign securities (40,543) -

(38,365) (3,006)

9.5 Investments include certain approved / government securities which are held by the Bank to comply with the Statutory LiquidityRequirement as set out under Section 29 of the Banking Companies Ordinance, 1962.

9.6 Investments include Rs.282 million (2009: Rs.282 million) held by the State Bank of Pakistan and National Bank of Pakistanas pledge against demand loan, TT / DD discounting facilities and foreign exchange exposure limit sanctioned to the Bankand Rs.5 million (2009: Rs.5 million) held by the Controller of Military Accounts (CMA) under Regimental Fund Arrangements.

9.7 This includes the Bank's subscription towards the paid-up capital of Khushhali Bank Limited amounting to Rs.200 million(2009: Rs.200 million). Pursuant to Section 10 of the Khushhali Bank Ordinance, 2000 strategic investors including the Bankcould not sell or transfer their investment before a period of five years that has expired on October 10, 2005. Thereafter, suchsale / transfer would be subject to the prior approval of the SBP. In addition, the profit of Khushhali Bank Limited cannot bedistributed as dividend under clause 35(i) of the Khushhali Bank Ordinance, 2000.

The SBP prepared a conversion structure for Khushhali Bank Limited to operate as a Microfinance Bank under theMicrofinance Institutions Ordinance, 2001 which was approved by the Ministry of Finance. The scheme of conversion was alsoapproved by the shareholders of Khushhali Bank Limited in an Extra-Ordinary General Meeting held on December 17, 2007.Accordingly, an application for incorporation was submitted to the SECP on February 15, 2008. The SECP has incorporatedKhushhali Bank Limited under the Microfinance Institutions Ordinance, 2001 and issued a Certificate of Incorporation onFebruary 28, 2008 under section 32 of the Companies Ordinance, 1984.

In a meeting between SBP and the Board of Directors of Khushhali Bank Limited held on June 12, 2008, it was agreed thatsince Khushhali Bank Limited has a majority of private sector commercial banks as its shareholders and is legally a privatesector bank, it is required to be managed as a private sector institution.

In order to achieve the strategic restructuring of Khushhali Bank Limited, a consortium of commercial banks including the Bankdecided to completely divest their shareholding in Khushhali Bank Limited. Thereafter, the Consortium appointed Advisors(financial, legal and accounting) for conducting preliminary due diligence for valuation and preparing a data room for theprospective purchasers. Khushhali Bank Limited, on behalf of the Consortium of the Commercial Banks has sought priorclearance/approval of the SBP for appointment of Advisors to conduct due diligence of Khushhali Bank Limited.

SBP has conveyed its, in principle, no objection to the consortium of selling shareholders of Khushhali Bank Limited forconducting due diligence/valuation of Khushhali Bank Limited subject to compliance with all the applicablelaws/rules/regulations etc. The due diligence / valuation is in the process of being carried out. The establishment of a dataroom and due diligence report/ valuation from Accounting and Financial Advisor is in process.



9.8 Information relating to investments in Ordinary and Preference shares / certificates of listed and unlisted companies / modarabas/ mutual funds, term finance certificates, debentures and bonds, required to be disclosed as part of the financial statementsunder State Bank of Pakistan's BSD Circular No. 4 dated February 17, 2006, is given in Annexure 'A' to these unconsolidatedfinancial statements. Details in respect of quality of available for sale securities are also disclosed in Annexure 'A'.

9.9 This includes investment in the seed capital aggregating to Rs.630 million (2009: Rs.1,100 million) which is required to be keptfor a period of two years.

9.10 The Bank has tested the investment in its associates for impairment by comparing the recoverable value to the carrying value.

For Mutual Funds, the recoverable value is determined to be the Net Asset Value of the Fund. The Bank has determined thatno impairment loss exists for the year. For certain Funds, an improvement in the recoverable value during the year has resultedin reversal of impairment losses recognized till the year ended December 31, 2009 which has been credited to the profit andloss account for the year.

For UBL Insurers Ltd (UIL), the recoverable value was determined using a value in use (VIU) calculation using cashflowprojections based on financial budgets prepared by the management of UIL for the forecast period. Cashflows beyond theforecast period have been extrapolated using growth rates consistent with the economic environment of the country.

The discount rate of 18.77% is used for determining the VIU of UIL, which reflects UIL management’s estimate of the cost ofequity applicable to UIL. The cost of equity has been calculated using the Capital Asset Pricing Model (CAPM). Parametersused in the CAPM calculation are based on published third party data. In the current year, the Bank has determined that noimpairment loss exists in its investment in UIL. Accordingly, reversal of impairment losses on UIL recognized till the year endedDecember 31, 2009 has been credited to the profit and loss account for the year.



Note Performing Non-performing Total2010 2009 2010 2009 2010 2009

--------------------------------------- (Rupees in '000) ---------------------------------------10. ADVANCES

Loans, cash credits, running finances, etc.

In Pakistan 10.2 228,034,418 244,389,399 40,726,130 32,220,534 268,760,548 276,609,933Outside Pakistan 75,230,030 82,463,971 5,198,923 4,064,166 80,428,953 86,528,137

303,264,448 326,853,370 45,925,053 36,284,700 349,189,501 363,138,070Bills discounted and purchased

Payable in Pakistan 12,429,950 11,607,055 2,235,582 2,400,013 14,665,532 14,007,068Payable outside Pakistan 4,404,982 4,916,421 431,925 416,683 4,836,907 5,333,104

16,834,932 16,523,476 2,667,507 2,816,696 19,502,439 19,340,172Advances - gross 320,099,380 343,376,846 48,592,560 39,101,396 368,691,940 382,478,242

Provision against advances 10.5- Specific - - (33,534,272) (27,673,022) (33,534,272) (27,673,022)- General (1,425,496) (713,507) - - (1,425,496) (713,507)

(1,425,496) (713,507) (33,534,272) (27,673,022) (34,959,768) (28,386,529)

Advances - net of provision 318,673,884 342,663,339 15,058,288 11,428,374 333,732,172 354,091,713

Performing Non-performing Total2010 2009 2010 2009 2010 2009

--------------------------------------- (Rupees in '000) ---------------------------------------10.1 Particulars of advances - gross

10.1.1 In local currency 235,079,268 253,182,814 42,816,359 33,781,868 277,895,627 286,964,682In foreign currencies 85,020,112 90,194,032 5,776,201 5,319,528 90,796,313 95,513,560

320,099,380 343,376,846 48,592,560 39,101,396 368,691,940 382,478,242

10.1.2 Short term 244,216,178 230,096,641 - - 244,216,178 230,096,641Long term 75,883,202 113,280,205 48,592,560 39,101,396 124,475,762 152,381,601

320,099,380 343,376,846 48,592,560 39,101,396 368,691,940 382,478,242

10.2 This includes performing advances given under various Islamic financing modes amounting to Rs.461.342 million (2009: Rs.638.131 million).

10.3 Non-performing advances include advances having gross book value of Rs.5,774.675 million (2009: Rs.1,596.136 million) and net book valueof Rs. 2,110.614 million (2009: Rs.919.006 million) which, though restructured and performing have been placed under non-performing statusas required by the revised Prudential Regulations issued by the SBP, which requires monitoring for at least one year before any upgradationis considered.



10.4 Advances include Rs.48,593 million (2009: Rs.39,101 million) which have been placed under non-performing status as detailed below:

2010Category of Classification Classified Advances Provision Required Provision Held

Domestic Overseas Total Domestic Overseas Total Domestic Overseas Total

--------------------------------------------------- (Rupees in '000) ---------------------------------------------------

Other Assets Especially

Mentioned * 336,651 - 336,651 - - - - - -

Substandard 6,320,318 1,037,361 7,357,679 1,414,035 259,344 1,673,379 1,414,035 259,344 1,673,379

Doubtful 5,716,839 3,005,088 8,721,927 1,530,397 1,502,546 3,032,943 1,530,397 1,502,546 3,032,943

Loss 30,587,904 1,588,399 32,176,303 27,239,551 1,588,399 28,827,950 27,239,551 1,588,399 28,827,950

42,961,712 5,630,848 48,592,560 30,183,983 3,350,289 33,534,272 30,183,983 3,350,289 33,534,272

2009Category of Classification Classified Advances Provision Required Provision Held


--------------------------------------------------- (Rupees in '000) ---------------------------------------------------


Mentioned * 386,517 - 386,517 - - - - - -

Substandard 3,802,275 1,473,002 5,275,277 891,498 368,251 1,259,749 891,498 368,251 1,259,749

Doubtful 6,007,332 1,696,401 7,703,733 2,651,589 848,206 3,499,795 2,651,589 848,206 3,499,795

Loss 24,424,423 1,311,446 25,735,869 21,602,032 1,311,446 22,913,478 21,602,032 1,311,446 22,913,478

34,620,547 4,480,849 39,101,396 25,145,119 2,527,903 27,673,022 25,145,119 2,527,903 27,673,022

* The Other Assets Especially Mentioned category pertains to agricultural finance only.

10.5 Particulars of provision against advances2010 2009

Note Specific General Total Specific General Total

------------------------------ (Rupees in '000) -------------------------------

Opening balance 27,673,022 713,507 28,386,529 18,563,334 1,199,769 19,763,103

Exchange adjustments 197,274 - 197,274 272,286 13,018 285,304

Charge / (Reversals)

Charge for the year 8,043,159 910,973 8,954,132 11,530,793 - 11,530,793

Reversals (1,956,300) (194,477) (2,150,777) (944,245) (963,344) (1,907,589)

6,086,859 716,496 6,803,355 10,586,548 (963,344) 9,623,204

Transfers 133,267 (4,507) 128,760 (464,064) 464,064 -

Amounts written off 10.6 (556,150) - (556,150) (1,285,082) - (1,285,082)

Closing balance 33,534,272 1,425,496 34,959,768 27,673,022 713,507 28,386,529

10.5.1 General provision represents provision amounting to Rs.375.327 million (2009: Rs.569.195 million) against consumer finance portfolio as required by the Prudential

Regulations issued by the SBP, Rs.415.169 million (2009: Rs.144.311 million) pertaining to overseas advances to meet the requirements of monetary agencies and

regulatory authorities of the respective countries in which the overseas branches operate. General provisions also include an amount of Rs.635 million (2009: Nil) which

the Bank carries as matter of prudence given the current economic environment and is based on management estimates.

10.5.2 Particulars of provision against advances

2010 2009

Specific General Total Specific General Total

------------------------------ (Rupees in '000) -------------------------------

In local currency 30,183,984 1,010,327 31,194,311 24,327,702 569,195 24,896,897

In foreign currencies 3,350,288 415,169 3,765,457 3,345,320 144,311 3,489,631

33,534,272 1,425,496 34,959,768 27,673,022 713,506 28,386,528



Note 2010 2009----- (Rupees in ‘000) -----

10.6 Particulars of write-offs

10.6.1 Against provisions 10.5 556,150 1,285,082Directly charged to profit and loss account 996,772 1,485,976

1,552,922 2,771,058

10.6.2 Write-offs of Rs.500,000 and above 10.7 764,563 1,588,946Write-offs of below Rs.500,000 788,359 1,182,112

1,552,922 2,771,058

10.7 Details of loan write-offs of Rs.500,000 and above

In terms of sub-section (3) of Section 33A of the Banking Companies Ordinance, 1962 the statement in respect of written-off loans or any other financial relief of five hundred thousand rupees or above allowed to a person during the year endedDecember 31, 2010 is given in Annexure 'B' to these unconsolidated financial statements. These loans are written off as abook entry without prejudice to the Bank's right of recovery against the customers.

Note 2010 2009----- (Rupees in ‘000) -----

10.8 Particulars of loans and advances to executives, directors,associated companies etc.

Debts due by directors or executives of the Bank or any of themeither severally or jointly with any other persons

Balance at the beginning of the year 1,482,474 981,319Loans granted during the year 717,242 1,020,264Repayments made during the year (581,135) (519,109)Balance at the end of the year 1,618,581 1,482,474

11. OPERATING FIXED ASSETS

Capital work-in-progress 11.1 1,334,951 997,617Property and equipment 11.2 20,166,071 20,439,417Intangible assets 11.3 923,050 488,635

22,424,072 21,925,66911.1 Capital work-in-progress

Civil works 11.1.1 537,257 484,612Equipment 268,949 202,119Software 11.1.2 517,776 297,984Advances to suppliers and contractors 10,969 12,902

1,334,951 997,617

11.1.1 This includes Rs.437.916 million (2009: Rs.297.430 million) paid in respect of construction of the Head Office building.

11.1.2 This includes Rs.516.081 million (2009: Rs.221.56 million) paid in respect of the Core Banking Software.



11.2 Property and equipment

2010COST/ REVALUATION ACCUMULATED DEPRECIATION

Note At Additions / Surplus on Reclassif- Exchange At At Charge for Reversal Exchange At Net book AnnualJanuary (deletions) revaluation / ication Adjustment / December January the year / due to Adjustment / December value at rate of01, 2010 (Reversal of Other 31, 2010 01, 2010 (deprec- revaluation Other 31, 2010 December deprec-

accumulated adjustments iation on adjustments 31, 2010 iation %depreciation) deletions)

------------------------------------------------------------------ (Rupees in '000) ------------------------------------------------------------------

OwnedFreehold land 1,825,754 125,305 - 1,090,717 - 3,041,776 - - - - - 3,041,776 -

Leasehold land 12,802,015 9,865 - - 22 11,721,185 1,052 291,697 - 18 292,767 11,428,418 1 - 3.33- - (1,090,717) - - - -

Buildings on freehold land 118,967 22,025 - 173,900 - 314,892 - 15,002 - - 15,002 299,890 5- - - - - - -

Buildings on leasehold land 2,149,539 56,072 8,788 - 161 2,026,522 36,283 99,979 - 347 122,471 1,904,051 5(5,431) (8,707) (173,900) - (5,431) (8,707) -

Leasehold Improvements 1,495,013 169,079 - - 4,911 1,661,185 415,414 153,380 - - 562,856 1,098,329 10(7,818) - - - (5,436) - (502)

Furniture and fixtures 885,786 75,064 - - 2,192 945,272 477,661 78,998 - 2,196 544,095 401,177 10(17,770) - - - (14,760) - -

Electrical, office and computer 3,896,827 704,628 - - - 4,562,070 2,427,235 682,097 - - 3,054,986 1,507,084 20-25equipment (31,186) - - (8,199) (29,681) - (24,665)

Vehicles 267,752 48,877 - - 174 281,949 158,981 34,307 - - 168,108 113,841 20(34,854) - - - (22,631) - (2,549)

Assets held underoperatinglease Ijarah assets 11.8 810,456 59,658 - - 2,931 739,979 296,066 137,463 - - 368,474 371,505 20 - 33.33

(133,066) - - - (65,055) - -2010 24,252,109 1,270,573 8,788 1,264,617 10,391 25,294,830 3,812,692 1,492,923 - 2,561 5,128,759 20,166,071

(230,125) (8,707) (1,264,617) (8,199) (142,994) (8,707) (27,716)


At Additions / Surplus on Reclassif- Exchange At At Charge for Reversal Exchange At Net book AnnualJanuary (deletions) revaluation / ication Adjustment / December January the year / due to Adjustment / December value at rate of01, 2009 (Reversal of Other 31, 2009 01, 2009 (depriciation revaluation Other 31, 2009 December deprec-

accumulated adjustments on deletions) adjustments 31, 2009 iation %depreciation)

------------------------------------------------------------------ (Rupees in '000) ------------------------------------------------------------------

OwnedFreehold land 1,502,746 1,724 332,426 - - 1,825,754 - - - - - 1,825,754 -

(11,142)Leasehold land 10,092,131 9,470 3,328,235 - 1,793 12,802,015 307,447 305,640 - 63 1,052 12,800,963 1 - 3.33

(106,551) (523,063) - (87,760) (523,063) (1,275)Buildings on freehold land 81,021 - 44,923 - 975 118,967 3,826 4,126 - - - 118,967 5

(112) (7,840) - - (112) (7,840) -Buildings on leasehold land 1,904,654 - 434,008 - 587 2,149,539 128,769 93,934 - 498 36,283 2,113,256 5

(5,240) (184,470) - - (1,965) (184,470) (483)Leasehold Improvements 1,169,850 305,714 - - 19,449 1,495,013 255,761 149,724 - 9,929 415,414 1,079,599 10

- - - - - - -Furniture and fixtures 801,949 104,078 - - 8,745 885,786 418,311 73,279 - 8,805 477,661 408,125 10

(28,986) - - - (22,734) - -Electrical, office and computer 3,137,525 777,812 - - 33,966 3,896,827 1,833,212 616,013 - 20,440 2,427,235 1,469,592 20-25equipment (52,476) - - - (42,430) - -Vehicles 272,066 51,958 - - 2,697 267,752 141,973 58,523 - 2,175 158,981 108,771 20

(58,969) - - - (43,690) - -Assets held under operatinglease Ijarah assets 11.8 895,217 39,648 - - - 810,456 153,297 170,285 - - 296,066 514,390 20-33.33

(104,750) - (19,659) (27,516) - -2009 19,857,159 1,290,404 4,139,592 - 68,212 24,252,109 3,242,596 1,471,524 - 41,910 3,812,692 20,439,417

(368,226) (715,373) - (19,659) (226,207) (715,373) (1,758)



11.3 Intangible assets

2010

Cost Accumulated Amortization

At Additions/ Exchange At At Charge for Exchange At Net book Annual

January 01, (deletions) Adjustment/ December 31, January 01, the year / Adjustment/ December 31, value at rate of

2010 Other 2010 2010 (reversal on Other 2010 December 31, amorti-

adjustments deletion) adjustments 2010 sation %

------------------------------------------------------------------ (Rupees in '000) ---------------------------------------------------------

Software 1,043,528 654,002 19,899 1,713,289 554,893 221,047 16,990 790,239 923,050 10-25

(4,140) (2,691)

2009

Cost Accumulated Amortization

At Additions/ Exchange At At Charge for Exchange At Net book Annual

January 01, (deletions) Adjustment/ December 31, January 01, the year / Adjustment/ December 31, value at rate of

2009 Other 2009 2009 (reversal on Other 2009 December 31, amorti-

adjustments deletion) adjustments 2009 sation %

------------------------------------------------------------------ (Rupees in '000) ---------------------------------------------------------

Software 777,027 267,182 8,144 1,043,528 374,687 184,241 4,790 554,893 488,635 10-25

(8,825) (8,825)

11.4 Revaluation of properties

The properties of the Bank were last revalued by independent professional valuers as at December 31, 2009. The revaluationwas carried out by M/s. Pirsons Chemicals Engineering (Private) Limited, M/s. Sadruddin Associates, M/s. MariconConsultants (Private) Limited and M/s. Engineering Pakistan International (Private) Limited on the basis of professionalassessment of present market values and resulted in a surplus of Rs.4,139.592 million. Had there been no revaluation, thecarrying amount of revalued assets at December 31, 2010 would have been as follows:

2010 2009----- (Rupees in ‘000) -----

Freehold land 1,484,906 1,484,906Leasehold land 9,168,903 9,472,729Buildings on freehold land 69,201 73,256Buildings on leasehold land 1,584,701 1,679,280

11.5 Carrying amount of temporarily idle properties of the Group 59,812 158,927

11.6 The cost of fully depreciated assets still in use

Furniture and fixtures 234,275 233,962Electrical, office and computer equipment 1,665,921 1,220,822Vehicles 69,474 33,601

1,969,670 1,488,38511.7 Details of disposal of operating fixed assets

The information relating to operating fixed assets disposed off during the year is given in Annexure 'C' and is an integral partof these unconsolidated financial statements.



11.8 The Islamic Banking Branches of the Bank have entered into Ijarah transactions with customers during the year. The majorityof Ijarah transactions entered into are in respect of vehicles.

The ijarah payments receivable from customers for each of the following periods under the terms of the respectivearrangements are given below:

Note 2010 2009----- (Rupees in ‘000) -----

Not later than one year 103,811 270,864Later than one year but not later than five years 242,387 436,129Later than five years 94 3,020

346,292 710,01312. DEFERRED TAX ASSET - NET

Deferred tax asset - net 12.1 1,298,403 608,876

12.1 Movement in temporary differences during the year2010

At January 01, Recognised in Others At December 31,2010 profit and loss 2010

account------------------------------------- (Rupees in '000) -------------------------------------

Deductible temporary differences on- Deficit on revaluation of investments 1,066,434 - 95,868 1,162,302- Ijarah financing 52,314 (66,685) - (14,371)- Workers' Welfare Fund 139,142 5,598 - 144,740- Cash flow hedge reserve 111,148 - (41,603) 69,545- Provision against off balance sheet items,post retirement medical benefits andadvances 4,662,598 541,702 - 5,204,300

6,031,636 480,615 54,265 6,566,516Taxable temporary differences on- Surplus on revaluation of fixed assets (5,275,900) 136,794 (3,092) (5,142,198)- Accelerated tax depreciation (146,860) 20,945 - (125,915)

(5,422,760) 157,739 (3,092) (5,268,113)608,876 638,354 51,173 1,298,403



2009At January 01, Recognised in Others At December 31,

2009 profit and loss 2009account

------------------------------------- (Rupees in '000) -------------------------------------

Deductible temporary differences on- Deficit on revaluation of investments 3,201,075 - (2,134,641) 1,066,434- Ijarah financing 118,653 (66,339) - 52,314- Workers' Welfare Fund 117,950 21,192 - 139,142- Cash flow hedge reserve 148,956 - (37,808) 111,148- Provision against off balance sheet items,post retirement medical benefits andadvances 2,658,457 2,004,141 - 4,662,598

6,245,091 1,958,994 (2,172,449) 6,031,636Taxable temporary differences on- Surplus on revaluation of fixed assets (3,972,755) 136,238 (1,439,383) (5,275,900)- Accelerated tax depreciation (216,727) 69,867 - (146,860)

(4,189,482) 206,105 (1,439,383) (5,422,760)2,055,609 2,165,099 (3,611,832) 608,876

Note 2010 2009----- (Rupees in ‘000) -----

13. OTHER ASSETS

Income / mark-up accrued in local currency 11,753,658 11,036,384Income / mark-up accrued in foreign currency 1,181,889 272,232

12,935,547 11,308,616

Advance taxation - net of provision for taxation 13.1 3,686,910 2,001,447Receivable from staff retirement funds 66,595 1,045,899Receivable on account of encashment of savings certificates 43,086 74,406Receivable in respect of derivative transactions 31,121 124,977Receivable against sale of securities - 897,457Receivable from other banks against telegraphic transfers and demand drafts 1,219,425 836,556Unrealized gain on forward foreign exchange contracts 145,346 142,266Unrealized gain on derivative financial instruments 23.2 693,675 499,672Advance against Murabaha - 383,929Suspense accounts 224,948 169,309Stationery and stamps on hand 151,528 143,825Advances, deposits, advance rent and other prepayments 727,888 771,109Others 1,139,563 1,139,428

21,065,632 19,538,896Provision held against other assets 13.2 (2,352,444) (2,633,892)Other assets (net of provisions) 18,713,188 16,905,004



13.1 The Income Tax returns of the Bank have been filed up to the tax year 2010 (accounting year ended December 31, 2009)and were deemed to be assessed under section 120 of the Income Tax Ordinance, 2001 (Ordinance) unless amended by theCommissioner of Inland Revenue.

The tax authorities have issued the amended assessment orders for the tax years 2003 to 2010 (accounting year endedDecember 31, 2002 to 2009) determining additional tax liability of Rs.7,308 million. The amount has been fully paid as requiredunder the law. For the tax years 2004 to 2009, appeals have been decided by the Commissioner of Inland Revenue [CIR(A)]by allowing relief on certain issues. For the remaining issues, the Bank has filed an appeal before the Appellate Tribunal InlandRevenue (ATIR). For the tax years 2003 and 2010, the hearing is still pending with CIR (A). The management is confident thatthe appeals will be decided in favor of the Bank.

During the year, the tax authorities have further amended the assessment order for the tax year 2009 adding back unrealizedlosses on derivative transactions resulting in a demand of Rs.146 million, which has been paid. CIR(A) has upheld the orderof the taxation officer, however, the Bank is in the process of filing an appeal before ATIR. The Management is confident thatthis matter will be decided in favor of the Bank.

The tax returns for Azad Kashmir (AK) Branches have been filed for tax years 2005 to 2010 (financial years ended December31, 2004 to 2009) under the provisions of section 120(1) read with section 114 of the Ordinance and in compliance with theterms of agreement between banks and the Azad Kashmir Council in May 2005. The returns filed are considered as deemedassessment orders under the law.

The Seventh Schedule to the Ordinance has been amended through the Finance Act, 2010. Through this amendment,provision for advances and off balance sheet exposures would be allowed @ 5% of advances to consumer and small andmedium enterprises (SMEs), and 1% for other advances. The said change will be applicable from current year. A deferred taxasset of Rs. 2,574 million has been recognized relating to amounts in excess of the allowable limits which is carried forwardto future years.

The Bank also carries a tax asset amounting to Rs.5,454 million (2009: 5,454 million), representing disallowance of provisionsagainst advances and off balance sheet obligations, for the periods prior to the applicability of the Seventh schedule. TheManagement, in consultation with its tax advisors, is confident that these would be allowed to the Bank at appellate levels.

Note 2010 2009----- (Rupees in ‘000) -----

13.2 Provision against other assets

Opening balance 2,633,892 2,473,775Exchange adjustments 8,638 32,381

2,642,530 2,506,156Charge for the year 40,598 361,391Reversals (162,859) (22,260)

29 (122,261) 339,131Transfers 221,772 117,690Amounts written off (389,597) (329,085)Closing balance 2,352,444 2,633,892



Note 2010 2009----- (Rupees in ‘000) -----

14. CONTINGENT ASSETS

There were no contingent assets as at the balance sheet date.

15. BILLS PAYABLE

In Pakistan 4,136,487 4,944,903Outside Pakistan 909,328 202,356

5,045,815 5,147,25916. BORROWINGS

In Pakistan 43,401,942 30,953,356Outside Pakistan 1,702,907 4,191,467

45,104,849 35,144,823

16.1 Particulars of borrowings with respect to currencies


45,104,849 35,144,823

16.2 Details of borrowings from financial institutions

SecuredBorrowings from the State Bank of Pakistan under:

- Export refinance scheme 16.3 14,840,163 14,666,570- Refinance facility for modernization of SME 16.4 27,500 -- Long term fixed finance 16.5 2,444,872 1,018,535- Long-term financing under export oriented projects 16.6 2,770,789 3,705,568

20,083,324 19,390,673Repurchase agreement borrowings 16.7 22,412,235 5,066,098

42,495,559 24,456,771UnsecuredCall borrowings 16.8 428,195 8,679,283Overdrawn nostro accounts 456,617 648,559Trading liabilities 806,942 96,586Other borrowings 16.9 917,536 1,263,624

2,609,290 10,688,05245,104,849 35,144,823



16.3 The Bank has entered into agreements with the SBP for extending export finance to customers. As per the terms of theagreement, the Bank has granted the SBP the right to recover the outstanding amounts from the Bank at the date of maturityof the finances by directly debiting the current account maintained by the Bank with the SBP. These borrowings are repayablewithin six months, latest by June 2011. These carry markup rates at 9% per annum (2009: 7.5% per annum).

16.4 These borrowings have been obtained from the SBP for modernization of Small and Medium Enterprises (SMEs) by providingfinancing facilities for purchase of new plant & machinery for BMR of existing units and setting up of new units. In addition,financing for import /local purchase of new generators upto a maximum capacity of 500 KVA shall also be eligible under thisScheme. These borrowings are repayable within a period ranging from 3 years to 10 years and the Scheme will remain effectiveup to December 31, 2012. These carry markup rates ranging from 5.5% to 7.0% per annum.

16.5 These borrowings have been obtained from the SBP for providing financing facilities to exporters for adoption of newtechnologies and modernizing their plant and machinery. These borrowings are repayable within a period ranging from 3 yearsto 10 years. These carry markup rates ranging from 8.2% to 9.5% per annum (2009: 7.2% to 7.7% per annum).

16.6 These borrowings have been obtained from the SBP for providing financing facilities to customers for import of machinery,plant, equipment and accessories thereof by export oriented units. These carry markup rates ranging from 4% to 5% perannum (2009: 4% to 5% per annum).

16.7 These repurchase agreement borrowings are secured against Market Treasury Bills and Pakistan Investment Bonds and carrymark-up at rates ranging from 12.50% to 13.25% per annum (2009: 11.50% to 12.40% per annum). These borrowings arerepayable latest by January 2011. The carrying value of securities given as collateral is given in note 9.1.

16.8 These are borrowings pertaining to overseas operations which carry mark-up at rates ranging from 0.35% to 1.58% perannum (2009: 0.5% to 0.6% per annum) and are due to mature latest by June 2011.

16.9 This represents borrowing from an overseas bank for the development of Small and Medium Sized Enterprises (SMEs) inPakistan, carries mark-up at the rate of six months LIBOR + 1.2% (2009: six months LIBOR + 1.2%) and is repayable byJune 2013.

2010 2009----- (Rupees in ‘000) -----

17. DEPOSITS AND OTHER ACCOUNTS

CustomersFixed deposits 162,426,884 150,792,206Savings deposits 193,982,616 178,287,618Sundry deposits 4,767,873 4,643,923Margin deposits 3,696,330 4,319,476Current accounts - remunerative 3,412,476 2,114,809Current accounts - non-remunerative 180,688,420 150,803,732

548,974,599 490,961,764Financial InstitutionsRemunerative deposits 1,518,443 964,066Non-remunerative deposits 152,725 110,273

1,671,168 1,074,339550,645,767 492,036,103

17.1 Particulars of deposits and other accounts


550,645,767 492,036,103



18. SUB-ORDINATED LOANS - UNSECURED

Note Issue Date Tenor Rate % per annum Maturity Frequencyof principal 2010 2009redemption

--- (Rupees in '000) ---

Term Finance 18.1 August 8 years 8.45% August Semi 1,995,388 1,996,160Certificates - I 2004 2012 Annual

Term Finance 18.1 March 8 years 9.49% March Semi 1,999,560 1,999,640Certificates - II 2005 2013 Annual

Term Finance 18.1 September 8 years 6 months KIBOR+1.70% September Semi 1,996,800 1,997,600Certificates - III 2006 2014 AnnualTerm Finance 18.2 February 10 Years For the first five years February Semi 5,994,000 5,996,400Certificates - IV 2008 6 months 2018 Annual

KIBOR+0.85% and forthe remaining term,

6 months KIBOR+1.35%11,985,748 11,989,800

18.1 These represent listed Term Finance Certificates (TFCs) issued by the Bank. The liability of the Bank is subordinated as to thepayment of principal and profit to all other indebtedness of the Bank (including deposits) and is not redeemable before maturitywithout approval of the State Bank of Pakistan.

18.2 This represents listed Term Finance Certificates (TFCs) issued by the Bank. The liability of the Bank is subordinated as to thepayment of principal and profit to all other indebtedness of the Bank (including deposits). The Bank has the right to exercisea call option after a period of 5 years from the issue date.

Note 2010 2009----- (Rupees in ‘000) -----

19. OTHER LIABILITIES

Mark-up / return / interest payable in local currency 8,427,554 7,015,536Mark-up / return / interest payable in foreign currency 334,841 353,032Accrued expenses 19.1 2,141,153 1,528,824Branch adjustment account 1,399,052 839,346Payable against purchase of securities 236,683 197,722Payable under severance scheme 32,563 33,452Unearned commission 99,544 95,736Provision against off - balance sheet obligations 19.2 669,891 682,141Unrealized loss on forward foreign exchange contracts 654,579 207,567Deferred liabilities 19.3 2,113,439 2,098,414Unrealized loss on derivative financial instruments 19.4.1 & 23.2 753,854 557,414Workers Welfare Fund payable 413,542 397,547Insurance payable against consumer assets 183,095 393,288Others 127,945 61,706

17,587,735 14,461,725



19.1 This includes an accrual of Rs.250 million (2009: Rs.210 million) for the year ended December 31, 2010 in respect of employeebenefit scheme. The objective of the scheme is to reward, motivate and retain high performing executives and officers of theBank by way of bonus in the form of shares of the Bank. The liability of the Bank in respect of this scheme is fixed and isapproved each year by the Board of Directors of the Bank. The scheme for each year is managed by a separate Trust formedfor this purpose.

Note 2010 2009----- (Rupees in ‘000) -----

19.2 Provision against off - balance sheet obligations

Opening balance 682,141 651,697

Charge during the year 29 - 20,250Transfers during the year - 10,194

- 30,444Payments during the year (12,250) -

669,891 682,141

19.3 Deferred liabilities

Provision for post retirement medical benefits 36.4 1,139,616 1,147,095Provision for gratuity 296,671 219,411Provision for compensated absences 36.4 677,152 731,908

2,113,439 2,098,414

19.4 Unrealized gain / (loss) on derivative financial instruments

Note Contract/ notional amount Unrealised gain / (loss)2010 2009 2010 2009

------------------------------- (Rupees in '000) -------------------------------

Derivatives held for trading- Interest rate swaps 6,985,703 11,014,381 (111,793) (187,593)- Cross currency swaps 35,570,843 36,372,837 51,100 143,894- Swaptions - 2,527,248 - (14,044)- Fx options 4,110,884 821,070 - -- Forward sale contracts of

government securities 441,981 - 514 -19.4.1 47,109,411 50,735,536 (60,179) (57,743)

Note 2010 2009----- (Rupees in ‘000) -----

19.4.1 Unrealized loss on derivative financial instruments - net

Unrealized gain on derivative financial instruments 13 693,675 499,671Unrealized loss on derivative financial instruments 19 (753,854) (557,414)

23.2 (60,179) (57,743)



20. SHARE CAPITAL

20.1 Authorized Capital

2010 2009 2010 2009(Number of shares) ----- (Rupees in ‘000) -----

2,000,000,000 2,000,000,000 Ordinary shares of Rs.10 each 20,000,000 20,000,000

20.2 Issued, subscribed and paid-up capital

Fully paid-up ordinary shares of Rs. 10 each

2010 2009(Number of shares)

Fully paid-up ordinary shares of Rs.10 each518,000,000 518,000,000 Issued for cash 5,180,000 5,180,000706,179,687 594,890,625 Issued as bonus shares 7,061,798 5,948,907

1,224,179,687 1,112,890,625 12,241,798 11,128,907

20.3 During the year 2007, the Bank was admitted to the official list of the UK Listing Authority and to the London Stock ExchangeProfessional Securities Market for trading of Global Depository Receipts (GDRs), each representing four ordinary equity sharesissued by the Bank. The GDRs constitute an offering in the United States only to qualified institutional buyers in reliance onRule 144A under the U.S Securities Act of 1933 and an offering outside the United States in reliance on Regulation S.

Holders of GDRs are entitled, subject to the provision of the depository agreement, to receive dividends, if any, and rank paripassu with other equity shareholders in respect of such entitlement to receive dividends. However, the holders of GDRs haveno voting rights or other direct rights of shareholders with respect to the equity shares underlying such GDRs. Subject to theterms and restrictions set out in the offering circular dated June 25, 2007, the deposited equity shares in respect of whichthe GDRs were issued may be withdrawn from the depository facility. Upon withdrawal, the holders will rank pari passu withother equity shareholders in respect of voting powers. As at December 31, 2010: 78,503,082 (2009: 92,519,435) GDR shareswere in issue.

20.4 Major shareholders (holding more than 5% of total paid-up capital)

2010 2009Number of Percentage of Number of Percentage of

Name of shareholders shares held shareholding shares held shareholding

Government of Pakistan 238,567,381 19.49% 216,879,438 19.49%Bestway (Holdings) Limited 222,775,183 18.20% 202,522,894 18.20%Bestway Cement Limited 93,649,744 7.65% 85,136,131 7.65%His Highness Shaikh Nahayan Mabarak Al Nahayan 78,942,102 6.45% 71,765,548 6.45%H.E. Dr. Mana'a Saeed Al Otaiba 67,492,392 5.51% 61,356,720 5.51%Sir Mohammed Anwar Pervez, OBE, HPk 62,433,163 5.10% 56,757,421 5.10%

As at December 31, 2010 the Abu Dhabi Group (ADG) held 30.30% (2009: 30.30%) shareholding (including GDRs) and theBestway Group (Bestway) held 31.07% (2009: 31.07%) shareholding of the Bank.



ADG and Bestway (Holdings) Limited had entered into a Share Purchase Agreement dated December 28, 2010 for the saleof 20% of the issued and outstanding ordinary shares of the Bank held by ADG to Bestway (Holdings) Limited.

Subsequent to the statement of financial position date, Bestway held 51.07% of the issued and outstanding ordinary sharesof the Bank whereas control shall continue to rest with the consortium of ADG and Bestway for which all regulatory approvalshave been obtained.

Note 2010 2009----- (Rupees in ‘000) -----

21. SURPLUS / (DEFICIT) ON REVALUATION OF ASSETS -NET OF DEFERRED TAX

Surplus arising on revaluation of assets - net of tax :

Fixed assets 21.1 10,392,701 10,640,998Securities 21.2 (2,158,560) (1,980,521)

8,234,141 8,660,477

21.1 Surplus on revaluation of fixed assets

Surplus on revaluation of fixed assets at January 01 15,916,898 12,193,629

Revaluation of fixed assets during the year / adjustments 8,788 4,139,592Written off during the year - (27,071)Exchange adjustments 48 -Transferred to unappropriated profit in respect of incremental

depreciation charged during the year (254,041) (253,014)Related deferred tax liability on incremental depreciation charged

during the year 12.1 (136,794) (136,238)(381,999) 3,723,269

15,534,899 15,916,898Less: Related deferred tax liability on:Revaluation as on January 01 5,275,900 3,972,755Revaluation of fixed assets during the year 3,092 1,448,858Written off during the year - (9,475)Incremental depreciation charged on related assets (136,794) (136,238)

12.1 5,142,198 5,275,90010,392,701 10,640,998

21.2 Surplus / (Deficit) on revaluation of available-for-sale securities

Market Treasury Bills (55,830) 20,995Pakistan Investment Bonds (1,937,605) (1,129,224)Listed shares (34,452) 93,619Mutual fund units (709) (2,302)Term Finance Certificates, Sukuk, other Bonds etc (27,242) (43,856)Overseas securities (1,265,024) (1,986,187)

(3,320,862) (3,046,955)Related deferred tax asset 12.1 1,162,302 1,066,434

(2,158,560) (1,980,521)



2010 2009----- (Rupees in ‘000) -----

22. CONTINGENCIES AND COMMITMENTS

22.1 Direct credit substitutes

Contingent liabilities in respect of guarantees given favouring

Government 8,742,208 10,818,102Banking companies and other financial institutions 5,316,009 2,758,243Others 6,079,170 7,396,201

20,137,387 20,972,54622.2 Transaction-related contingent liabilities

Contingent liabilities in respect of performance bonds,bid bonds, warranties, etc. given favouring


98,912,598 99,281,83522.3 Trade-related contingent liabilities

Contingent liabilities in respect of letters of credit opened favouring

Government 58,157,874 56,186,541Others 69,337,219 61,762,728

127,495,093 117,949,26922.4 Other contingencies

Claims against the Bank not acknowledged as debts 29,934,358 20,668,309

22.5 Commitments in respect of forward lending

The Bank makes commitments to extend credit in the normal course of its business but these being revocable commitmentsdo not attract any significant penalty or expense if the facility is unilaterally withdrawn.

2010 2009----- (Rupees in ‘000) -----

22.6 Commitments in respect of forward foreign exchange contracts

Sale 85,434,818 46,364,122

Purchase 130,653,749 90,952,188

22.7 Commitments in respect of derivatives

Interest rate swaps 6,985,703 11,014,381

Cross currency swaps 35,570,843 36,372,837

Swaptions - 2,527,248

FX options - purchased 2,055,442 410,535

FX options - sold 2,055,442 410,535

Forward sale contracts of government securities 441,981 -



2010 2009----- (Rupees in ‘000) -----

22.8 Commitments in respect of capital expenditure 571,403 567,882

22.9 For contingencies relating to taxation refer note 13.1

23. DERIVATIVE INSTRUMENTS

Derivatives are a type of financial contract, the value of which is determined by reference to one or more underlying assets orindices. The major categories of such contracts include forwards, futures, swaps and options. Derivatives also includestructured financial products that have one or more characteristics of forwards, futures, swaps and options.

The Bank as an Authorized Derivative Dealer (ADD) is an active participant in the Pakistan derivatives market. Although theADD license covers the below mentioned transactions only (permitted under Financial Derivatives Business Regulations issuedby the SBP), the Bank offers a wide variety of derivative products to satisfy customers’ needs, specific approval for which issought from the SBP on a transaction by transaction basis:

(a) Foreign Currency Options(b) Forward Rate Agreements(c) Interest Rate Swaps(d) Cross Currency Swaps(e) Equity indices(f) Commodity options

These transactions cover the aspects of both market making and hedging.

The authority for approving policies lies with the Board of Directors (BoD) and Board Risk Management Committee (BRMC),who has delegated its powers to the Market Risk Committee (MRC).

With regard to derivatives, the MRC is authorized to:

- Review the derivatives business with reference to market risk exposure and assign various limits in accordance with therisk appetite of the Bank

- Review and approve the Derivatives Business Policy

- Review and sign off derivatives product programs

- Authorize changes in procedures and processes regarding derivatives and structured products

Overall responsibility for derivatives trading activity lies with the Treasury and Capital Markets Group (TCM). Identifying andquantifying market risk on derivatives, coordinating approvals on temporary or permanent market risk limits, formulation ofpolicies and procedures with respect to market risk arising from derivatives, formal monitoring of market and credit riskexposure and limits and its reporting to the senior management and BoD is done by the Treasury and Market Risk (TMR)Department. Treasury Operations records derivative activity in the Bank’s books, and handles its reporting to the SBP.


Derivative Risk Management

There are a number of risks undertaken by the Bank, which need to be monitored and assessed, and they include:

Credit Risk

Credit risk refers to the risk of non-performance or default by a party (a customer, guarantor, trade counterparty, third party,etc.), resulting in an adverse impact on the Bank’s profitability. Credit risk associated with derivative transactions is categorizedinto settlement risk and pre-settlement risk. Credit limit proposals for derivative transactions are reviewed by Head Market andTreasury Risk who recomends the appropriate limits to the Credit Committee for approval. Credit exposure of eachcounterparty is estimated and monitored by Treasury Middle Office on daily basis. Settlement risk is also mitigated by nettingoff the amounts receivable and payable i.e., the net amount is either received or paid.

Market Risk

The Bank, as a policy, hedges back-to-back all Options transactions. The Bank also does not carry any exchange risk onits Cross Currency Swaps portfolio as it hedges the exposure in the interbank market. To manage interest rate risk of InterestRate Derivatives the Bank has implemented various limits which are monitored and reported by Treasury Middle Office ondaily basis.

Liquidity Risk

Derivative transactions, usually being non-funded in nature, do not involve funds therefore there is no specific liquidity risk.

However, there is another aspect of liquidity which is the availability of certain instruments or hedges in the market. This isrelevant to the Pakistan market, as interest rate derivatives have a uni-directional demand, and no perfect hedge is available.The Bank mitigates its risk, on one side, by limiting the portfolio in terms of tenor, notional and sensitivity limits, and on theother side by taking on and off balance sheet positions in the interbank market, where available.

Operational Risk

The staff involved in the process of trading, settlement and risk management of derivatives are carefully trained to deal withthe complexities involved in the process. A state-of-the-art system has been put in place which handles derivative transactions.Each transaction is processed in accordance with the product program or transaction memo, which contains detailedaccounting and operational aspects of the transaction to further mitigate operational risk. In addition, the Treasury Middle Officeand the Compliance and Control Department are assigned the responsibility of monitoring any deviation from the policiesand procedures. The Bank’s Audit and Inspection Group also reviews this function, which covers regular review of systems,transactional processes, accounting practices, end-user roles and responsibilities.




TheBankhasinstalledastateoftheartderivativessystem

called'SuperDerivatives'whichprovidesanend-to-end

solution.Otherthansupportingtheroutinetransactionalprocessitalso

providesanalyticaltoolstomeasurevariousriskexposures,stresstestsandsensitivityanalysis.

TreasuryMiddleOfficeproducesvariousreportsforhigherm

anagement(BoD,BRMC,MRC,etc)onaperiodicbasis.Thesereportsprovidedetailsofthederivativesbusinessprofileandvarious

riskexposures.

23.1

ProductAnalysis

2010

Interestrateswaps

Crosscurrencyswaps

Swaptions

FXoptions

Forwardsalecontracts

ofgovernmentsecurities

Numberof

National

Numberof

Notional

Numberof

Notional

Numberof

Notional

Numberof

Notional

Total

contracts

principal

contracts

principal

contracts

principal

contracts

principal

contracts

principal

Notional

(Rupeesin'000)

(Rupeesin'000)

(Rupeesin'000)

(Rupeesin'000)

(Rupeesin'000)

(Rupeesin'000)

WithBanksfor

Hedging

43,475,777

414,996,850

--

822,055,442

--

20,528,069

Marketmaking

31,871,064

22,201,000

--

--

--

4,072,064

75,346,841

617,197,850

--

822,055,442

--

24,600,133

Withotherentities

MarketMaking

41,638,862

918,372,993

--

822,055,442

2441,981

22,509,278

Total

Hedging

43,475,777

414,996,850

--

822,055,442

--

20,528,069

Marketmaking

73,509,926

1120,573,993

--

822,055,442

2441,981

26,581,342

116,985,703

1535,570,843

--

164

4,110,884

2441,981

47,109,411

2009

Interestrateswaps

Crosscurrencyswaps

Swaptions

FXoptions



Numberof

National

Numberof

Notional

Numberof

Notional

Numberof

Notional

Numberof

Notional

Total

contracts

principal

contracts

principal

contracts

principal

contracts

principal

contracts

principal

Notional

(Rupeesin'000)

(Rupeesin'000)

(Rupeesin'000)

(Rupeesin'000)

(Rupeesin'000)

(Rupeesin'000)

WithBanksfor

Hedging

87,740,900

414,571,600

--

4410,535

--

22,723,035

Marketmaking

42,206,208

52,335,884

12,527,248

--

--

7,069,340

129,947,108

916,907,484

12,527,248

4410,535

--

29,792,375

Withotherentities

MarketMaking

81,067,273

819,465,353

--

4410,535

--

20,943,161

Total Hedging

87,740,900

414,571,600

--

4410,535

--

22,723,035

Marketmaking

123,273,481

1321,801,237

12,527,248

4410,535

--

28,012,501

2011,014,381

1736,372,837

12,527,248

8821,070

--

50,735,536



23.2 Maturity analysis of derivatives

2010Remaining Maturity No. of Notional Mark to market

contracts principal (Loss) Gain Net--------------------- (Rupees in '000) ---------------------

Upto 1 Month 66 1,152,095 - 514 5141 to 3 Month 101 3,425,771 (360) - (360)3 to 6 Month 1 9,091 (264) - (264)6 Month to 1 Year 2 1,050,000 (27,191) 117 (27,074)1 to 2 Year 2 6,921,500 (19,363) 220,133 200,7702 to 3 Year 8 6,039,258 (60,313) 195,625 135,3123 to 5 Year 4 8,883,870 (816) 254,858 254,0425 to 10 Year 8 19,627,826 (645,547) 22,428 (623,119)Above 10 Year - - - - -

192 47,109,411 (753,854) 693,675 (60,179)


contracts principal (Loss) Gain Net--------------------- (Rupees in '000) ---------------------

Upto 1 Month 2 40,000 (918) - (918)1 to 3 Month 11 979,704 - 2,150 2,1503 to 6 Month - - - - -6 Month to 1 Year 7 1,225,196 (8,367) 21,138 12,7711 to 2 Year 4 1,202,273 (61,448) 57 (61,391)2 to 3 Year 2 6,975,000 (32,171) 119,516 87,3453 to 5 Year 14 17,317,094 (145,045) 215,404 70,3595 to 10 Year 6 22,996,269 (309,465) 141,406 (168,059)Above 10 Year - - - - -

46 50,735,536 (557,414) 499,671 (57,743)



2010 2009----- (Rupees in ‘000) -----

24. MARK-UP / RETURN / INTEREST EARNED

On loans and advances to customers 40,027,810 45,512,875On lending to financial institutions- Call money lending 75,784 300,863- Securities purchased under resale agreements 930,386 1,115,663- Advances to financial institutions 227,360 286,755

1,233,530 1,703,281On investments in- Held for trading securities 780,660 941,878- Available for sale securities 8,116,778 9,417,929- Held to maturity securities 8,921,541 3,372,692- Associates and subsidiaries 340 18,532

17,819,319 13,751,031

On deposits with financial institutions 218,100 115,508Discount income 33,002 24,330

59,331,761 61,107,025

25. MARK-UP / RETURN / INTEREST EXPENSED

On deposits 18,962,625 22,210,362On securities sold under repurchase agreements 1,686,337 1,622,552On other short - term borrowings 2,974,333 2,584,549On long - term borrowings 1,428,292 1,511,574Discount expense 171,666 234,750

25,223,253 28,163,787

26. GAIN ON SALE OF SECURITIES - NET

Federal Government SecuritiesMarket Treasury Bills (598) 108,683Pakistan Investment Bonds (12,899) 46,290

(13,497) 154,973Ordinary shares

Listed companies 110,967 331,362

Other Securities 61,415 143,083158,885 629,418

27. OTHER INCOME

Charges recovered from customers 770,293 1,162,018Rent on properties 121,551 134,643Income from dealing in derivatives 509,465 1,720,332Others 16,248 30,856

1,417,557 3,047,849



Note 2010 2009----- (Rupees in ‘000) -----

28. ADMINISTRATIVE EXPENSES

Personnel costSalaries, allowances etc. 28.1 7,067,760 6,914,343Charge for compensated absences 36.7 152,261 418,143Medical expenses 380,919 373,907Contribution to defined contribution plan 104,035 416,114Reversal in respect of defined benefit obligations (239,658) (371,531)

7,465,317 7,750,976

Premises costRent, taxes, insurance, electricity etc. 2,266,225 2,025,555Depreciation 11.2 560,058 553,425Repairs and maintenance 82,906 85,684

2,909,189 2,664,664Other operating costOutsourced service charges including sales commission 1,515,927 1,313,164Advertisement and publicity 765,856 221,107Communications 742,184 722,241Depreciation 11.2 932,864 918,100Legal and professional charges 276,249 217,776Banking service charges 408,576 355,089Stationery and printing 431,297 336,597Travelling 176,953 161,192Cash transportation charges 287,641 339,024Repairs and maintenance 102,485 82,607Maintenance contracts 509,225 362,105Insurance expense 82,819 164,073Vehicle expense 132,446 107,213Amortization 11.3 221,047 184,241Training and seminars 43,497 44,326Office running expense 199,861 152,318Entertainment 96,486 89,921Cartage, freight and conveyance 64,411 68,553Auditors' remuneration 28.3 39,620 44,835Subscriptions 22,097 26,121Brokerage expenses 16,521 19,457Sub-ordinated debt related costs 7,086 7,990Donations 28.2 82,282 55,975Non-executive Directors' fee and allowances 42,993 54,090Miscellaneous expenses 190,127 144,806

7,390,550 6,192,92117,765,056 16,608,561



28.1 This includes employee benefits in the form of awards / bonus to all permanent staff including the Chief Executive Officer andis determined on the basis of employees' evaluation and the Bank's performance during the year. The aggregate benefitdetermined in respect of all permanent staff amounted to Rs. 570.475 million (2009: Rs. 312.106 million).

Note 2010 2009----- (Rupees in ‘000) -----

28.2 Donations exceeding Rs.0.1 million

Karachi Education Initiative 28.2.1 40,000 40,000UBL Flood Relief Campaign 28,142 -Police Hospital Fund 5,000 -The Citizens Foundation 2,200 -Hisaar Foundation 1,086 550Friends of Burns Centre 1,008 1,728Family Education Services Foundation 900 900Marie Adelaide Leprosy Centre 850 850Lahore University of Management Sciences 815 315Patient Welfare Association 800 -SOS Childrens' Villages of Sindh 581 451Edhi Foundation 550 -Special Olympics Pakistan 200 -Umeed-e-Noor 150 -Karachi City Police - 9,793Shalamar Hospital - 545Sun Development Foundation - 483Institute of Business Administration - 360

82,282 55,975

28.2.1 The President is a Director on the Board of the Karachi Education Initiative, a sponsoring and fund raising entity of the KarachiSchool for Business & Leadership.

28.3 Auditors' remuneration2010

Ernst & Young BDO Overseas TotalFord Rhodes Ebrahim AuditorsSidat Hyder & Co.---------------------------- (Rupees in '000) ----------------------------

Audit fee 5,738 5,738 24,226 35,702Fee for audit of EPZ branch 250 - - 250Out of pocket expenses 1,725 1,709 234 3,668

7,713 7,447 24,460 39,620



2009Ernst & Young BDO Overseas TotalFord Rhodes Ebrahim AuditorsSidat Hyder & Co.---------------------------- (Rupees in '000) ----------------------------

Audit fee 5,738 5,738 29,588 41,064Fee for audit of EPZ branch 221 - - 221Out of pocket expenses 1,868 1,682 - 3,550

7,827 7,420 29,588 44,835

Note 2010 2009----- (Rupees in ‘000) -----

29. OTHER PROVISIONS / WRITE OFFS - NET

(Reversal) / provision against other assets - net 13.2 (122,261) 339,131Provision against off - balance sheet obligations 19.2 - 20,250Other provisions / write offs 188,424 276,716(Reversal) / provision against Ijarah assets - specific (803) 9,191Reversal against Ijarah assets - general (2,127) (3,014)

63,233 642,274

30. WORKERS’ WELFARE FUND

The Bank is liable to pay Workers' Welfare Fund @ 2% of profit before tax as per the accounts or declared income as per theincome tax return, whichever is higher, under the Workers' Welfare Ordinance, 1971.

2010 2009----- (Rupees in ‘000) -----

31. OTHER CHARGES

Penalties imposed by the SBPPertaining to current year 107,491 25,535Pertaining to prior year 128,000 39,000

235,491 64,535Other penalties 4,900 17

240,391 64,552



32. TAXATION2010

Overseas Azad Kashmir Domestic Total---------------------------- (Rupees in '000) ----------------------------

Current tax 1,002,082 22,653 5,780,771 6,805,506Prior year tax 415,136 - - 415,136Deferred tax (2,343) (239) (635,722) (638,354)

1,414,875 22,414 5,144,999 6,582,288

2009Overseas Azad Kashmir Domestic Total---------------------------- (Rupees in '000) ----------------------------

Current tax 872,430 113,181 5,944,974 6,930,585Prior year tax 76,328 - - 76,328Deferred tax (7,677) (684) (2,156,738) (2,165,099)

941,081 112,497 3,788,236 4,841,814

2010 2009----- (Rupees in ‘000) -----

32.1 Relationship between tax expense and accounting profit

Accounting profit for the year 17,742,218 14,034,501

Tax on income @ 35% (2009: 35%) 6,209,776 4,912,075Tax effect of items that are either not included in

determining taxable profit or taxed at reducedrates / permanent difference (44,107) (271,683)

Prior year tax charge 415,136 76,328Other charges 1,483 125,094Tax charge 6,582,288 4,841,814

33. EARNINGS PER SHARE

Profit after tax attributable to equity shareholders of the Bank 11,159,930 9,192,687

------ (Number of shares) ------

Weighted average number of ordinary shares 1,224,179,687 1,224,179,687

---------- (Rupees) ----------

Earnings per share - basic and diluted 9.12 7.51



33.1 Diluted earnings per share has not been presented as the Bank does not have any convertible instruments in issue atDecember 31, 2010 and 2009 which would have any effect on the earnings per share if the option to convert is exercised.

33.2 Earnings per share for the year 2009 has been restated for the effect of bonus shares issued during the year.

Note 2010 2009----- (Rupees in ‘000) -----

34. CASH AND CASH EQUIVALENTS

Cash and balances with treasury banks 6 67,461,668 61,470,047Balances with other banks 7 18,192,142 5,407,470

85,653,810 66,877,517

35. STAFF STRENGTH ------------ (Number) ------------

Permanent 8,473 8,448Contractual basis 26 18Group's own staff strength at the end of the year 8,499 8,466Outsourced 3,074 2,905Total number of employees at the end of the year 11,573 11,371

36. DEFINED BENEFIT PLANS

36.1 General description

The Bank operates a funded pension scheme established in 1986. The Bank also operates a funded gratuity scheme for newemployees and those employees who have not opted for the pension scheme. The Bank also operates a contributorybenevolent fund scheme and provides post retirement medical benefits to eligible retired employees. The benevolent fund planand the post-retirement medical plan cover all regular employees of the Bank who joined the Bank pre-privatisation. The Bankalso maintains an employee compensated absences scheme. The liability of the Bank in respect of long-term employeecompensated absences is determined based on actuarial valuation carried out using the Projected Unit Credit Method.Actuarial valuation of the defined benefit plan scheme is carried out every year and the latest valuation was carried out as atDecember 31, 2010.

36.2 Number of Employees under the scheme

The number of employees covered under the following defined benefit scheme / plans are:2010 2009--------- (Number) ---------

- Pension fund 7,723 7,845- Gratuity fund 5,589 5,416- Benevolent fund 7,490 7,888- Employee's compensated absences 6,708 6,942- Post retirement medical benefit scheme 4,480 4,790

The Pension fund, benevolent fund and post retirement medical benefit schemes include 5,384 (2009: 5,372), 3,010 (2009:3,098) and 2,228 (2009: 2,152) members respectively who have retired or whose widows are receiving the benefits.



36.3 Principal actuarial assumptions

The actuarial valuations were carried out as at December 31, 2010 based on the Projected Unit Credit Actuarial Cost Method,using the following significant assumptions:

2010 2009----- (Per annum) -----

Discount rate 14.50% 12.75%Expected rate of return on plan assets 14.50% 12.75%Expected rate of salary increase 12.50% 10.50%Expected rate of pension increase 6.75% 5.00%

36.4 Reconciliation of (receivable from) / payable to defined benefit plans

2010Pension Gratuity Benevolent Post Employeefund fund fund retirement compensated

medical absencesbenefit

----------------------- (Rupees in '000) -----------------------

Present value of funded obligations 3,598,231 417,733 420,778 - -Fair value of plan assets (5,527,239) (325,781) (799,917) - -

(1,929,008) 91,952 (379,139) - -Present value of unfunded obligation - - - 826,088 677,152Net actuarial gains or (losses) not recognized 1,925,416 (100,137) 198,356 313,528 -(Receivable) / payable (3,592) (8,185) (180,783) 1,139,616 677,152



----------------------- (Rupees in '000) -----------------------





36.5 Movement in defined benefit obligation

Note 2010Pension Gratuity Benevolent Post Employeefund fund fund retirement compensated


----------------------- (Rupees in '000) -----------------------

Obligation at the beginning of the year 3,585,208 365,292 459,080 852,603 731,908Current service cost 10,788 48,711 6,694 6,430 41,106Interest cost 118,861 48,331 48,347 112,903 104,760Benefits paid by the Bank (333,708) (61,513) (73,242) (100,658) (207,017)Recognition of prior service cost - - - - -Return allocated to other funds 36.8.1 232,232 - - - -Early retirement liability - - - - -Actuarial (gain) / loss on obligation (15,150) 16,912 (20,101) (45,190) 6,395Obligation at the end of the year 3,598,231 417,733 420,778 826,088 677,152



----------------------- (Rupees in '000) -----------------------

Obligation at the beginning of the year 3,625,280 384,786 529,647 875,509 613,602Current service cost 10,051 46,619 7,103 5,914 34,461Interest cost 156,655 53,312 62,995 103,084 110,245Benefits paid by the Bank (653,986) (86,446) (127,518) (125,019) (299,837)Recognition of prior service cost - - - - 62,201Return allocated to other funds 322,253 - - - -Early retirement liability - - - (24,242) -Actuarial (gain) / loss on obligation 124,955 (32,979) (13,147) 17,357 211,236Obligation at the end of the year 3,585,208 365,292 459,080 852,603 731,908

36.6 Movement in fair value of plan assets2010

Pension Gratuity Benevolent Post Employeefund fund fund retirement compensated


----------------------- (Rupees in '000) -----------------------

Fair value at the beginning of the year 6,107,212 301,174 796,302 - -Expected return on plan assets 642,077 40,904 87,822 - -Contribution by the Bank - 68,631 5,450 - -Contribution by the employees - - 5,450 - -Amount paid by the fund to the Bank (1,214,658) (77,251) (85,232) - -Payment received on behalf of the fund - - - - -Actuarial gain / (loss) on plan assets (7,392) (7,677) (9,875) - -Fair value at the end of the year 5,527,239 325,781 799,917 - -





----------------------- (Rupees in '000) -----------------------

Fair value at the beginning of the year 6,526,828 291,292 739,180 - -Expected return on plan assets 843,551 41,702 90,031 - -Contribution by the Bank - 75,044 5,979 - -Contribution by the employees - - 5,979 - -Amount paid by the fund to the Bank (1,272,621) (119,390) (122,924) - -Payment received on behalf of the fund - - - - -Actuarial gain / (loss) on plan assets 9,454 12,526 78,057 - -Fair value at the end of the year 6,107,212 301,174 796,302 - -

36.7 Movement in (receivable from) / payable to defined benefit plans2010



----------------------- (Rupees in '000) -----------------------

Opening balance (402,731) (15,502) (131,566) 1,147,095 731,908Mark-up receivable on Bank's balance (13,046) (237) (1,773) - -Charge / (reversal) for the year (468,765) 60,447 (53,984) 93,179 152,261Contribution by the Bank - (68,631) (5,450) - -Amount paid by the Fund to the Bank 1,214,658 77,251 85,232 - -Payment received on behalf of the Bank - - - - -Benefits paid by the Bank (333,708) (61,513) (73,242) (100,658) (207,017)Closing balance (3,592) (8,185) (180,783) 1,139,616 677,152



----------------------- (Rupees in '000) -----------------------

Opening balance (414,783) (40,318) (89,177) 1,219,400 613,602Mark-up receivable on Bank's balance (22,731) (846) (99) - -Charge / (reversal) for the year (583,852) 67,762 (31,717) 52,714 418,143Contribution by the Bank - (75,044) (5,979) - -Amount paid by the Fund to the Bank 1,272,621 119,390 122,924 - -Payment received on behalf of the Bank - - - - -Benefits paid by the Bank (653,986) (86,446) (127,518) (125,019) (299,837)Closing balance (402,731) (15,502) (131,566) 1,147,095 731,908



36.8 Charge for defined benefit plans

2010Note Pension Gratuity Benevolent Post Employee

fund fund fund retirement compensatedmedical absencesbenefit

----------------------- (Rupees in '000) -----------------------

Current service cost 10,788 48,711 6,694 6,430 41,106Interest cost 118,861 48,331 48,347 112,903 104,760Expected return on plan assets (642,077) (40,904) (87,822) - -Recognition of prior service cost - - - - -Actuarial (gains) and losses (188,569) 4,309 (15,753) (26,154) 6,395Return allocated to other funds 36.8.1 232,232 - - - -Employees' contribution - - (5,450) - -Settlement loss / gains - - - - -

(468,765) 60,447 (53,984) 93,179 152,261



----------------------- (Rupees in '000) -----------------------

Current service cost 10,051 46,619 7,103 5,914 34,461Interest cost 156,655 53,312 62,995 103,084 110,245Expected return on plan assets (843,551) (41,702) (90,031) - -Recognition of prior service cost - - - - 62,201Actuarial (gains) and losses (229,260) 9,533 (5,805) (32,042) 211,236Return allocated to other funds 322,253 - - -Employees' contribution - - (5,979) - -Settlement loss / gains - - - (24,242) -

(583,852) 67,762 (31,717) 52,714 418,143

36.8.1 This represents return allocated to those employees who exercised the conversion option offered in the year 2001 as referred to in note 5.10.1.

36.9 Actual return on plan assets

Amongst the defined benefit plans, the pension, gratuity and benevolent fund plans are funded. The actual return earned on the assets duringthe year are:



----------------------- (Rupees in '000) -----------------------

Expected return on plan assets 642,077 40,904 87,822 - -Actual gain / (loss) on plan assets (7,392) (7,677) (9,875) - -

634,685 33,227 77,947 - -





----------------------- (Rupees in '000) -----------------------

Expected return on plan assets 843,551 41,702 90,031 - -Actual gain / (loss) on plan assets 9,454 12,526 78,057 - -

853,005 54,228 168,088 - -

36.10 Five year data on surplus/ (deficit) of the plans and experience adjustments

2010 2009 2008 2007 2006----------------------- (Rupees in '000) -----------------------

Pension Fund

Present value of defined benefit obligation (3,598,231) (3,585,208) (3,625,280) (4,343,529) (4,433,583)

Fair value of plan assets 5,527,239 6,107,212 6,526,828 7,260,256 7,116,577

Surplus 1,929,008 2,522,004 2,901,548 2,916,727 2,682,994

Experience adjustments on plan liabilities [loss / (gain)] (214,828) 89,216 (87,141) 126,265 238,500

Experience adjustments on plan assets [loss / (gain)] 57,726 (282,376) (1,195) (11,848) (411,713)

Gratuity Fund

Present value of defined benefit obligation (417,733) (365,292) (384,786) (399,289) (437,373)

Fair value of plan assets 325,781 301,174 291,292 356,676 335,449

Surplus / (deficit) (91,952) (64,118) (93,494) (42,613) (101,924)

Experience adjustments on plan liabilities [loss / (gain)] 36,338 137,106 43,905 27,782 33,547

Experience adjustments on plan assets [loss / (gain)] 6,400 96,896 55,290 (5,179) 10,979

Benevolent Fund



Surplus / (deficit) 379,139 337,222 209,533 349,765 246,543

Experience adjustments on plan liabilities [loss / (gain)] 1,505 (8,798) 138,712 (90,203) (11,064)

Experience adjustments on plan assets [loss / (gain)] 2,737 (56,670) 144,550 (45,638) (64,187)

Post retirement medical benefit

Present value of defined benefit obligation (826,088) (852,603) (875,509) (1,202,462) (1,298,048)

Experience adjustments on plan liabilities [loss / (gain)] (26,232) 37,473 761 (67,904) (37,633)

Employee compensated absences

Present value of defined benefit obligation 677,152 731,908 613,602 843,193 1,074,258

Experience adjustments on plan liabilities [loss / (gain)] - - - - -

36.11 Effects of a 1% movement in assumed medical cost trend rates

Annual medical expense limit is based on frozen non-monetized basic pay of employees as on June 30, 2001. Accordingly, movement in

medical cost trend rates would not affect current service cost, interest cost and defined benefit obligations.



36.12 Components of plan assets as a percentage of total plan assets2010

Pension Gratuity Benevolent Post retirem- Employeefund fund fund ent medical compensated

benefit absences

Government securities 6.58% 98.51% 95.35% - -Units of mutual funds 5.20% 0.00% 0.00% - -Ordinary shares of listed companies 0.68% 0.75% 2.55% - -Term finance certificates 9.72% 0.73% 1.99% - -Others (including bank balances) 77.82% 0.01% 0.11% - -

100.00% 100.00% 100.00% - -

2009Pension Gratuity Benevolent Post retirem- Employeefund fund fund ent medical compensated

benefit absences

Government securities 15.95% 51.14% 41.32% - -Units of mutual funds 24.98% 17.84% 45.40% - -Ordinary shares of listed companies 0.62% 0.77% 3.63% - -Term finance certificates 7.23% 29.35% - - -Others (including bank balances) 51.22% 0.90% 9.65% - -

100.00% 100.00% 100.00% - -

As per the actuarial recommendations the expected return on plan assets was taken as 14.5% per annum on Pension Fund Assets, GratuityFund Assets and Benevolent Fund Assets. The expected return on plan assets was determined by considering the expected returns availableon the assets underlying the current investment policy.

36.13 Expected contributions to be paid to the funds in the next financial year

The Bank contributes to the pension and gratuity funds according to the actuary's advice. Contribution to the benevolent fund is made bythe Bank as per the rates set out in the benevolent scheme. Based on actuarial advice, the management estimates that the charge inrespect of defined benefit plans for the year ended December 31, 2011 would be as follows:



----------------------- (Rupees in ‘000) -----------------------

Expected charge for the year (410,926) 71,743 (59,992) 96,810 190,540



37. OTHER EMPLOYEE BENEFITS

37.1 Defined contribution plan

The Bank operates a contributory provident fund scheme for 5,209 (2009: 5,356) employees who are not in the pensionscheme. The employer and employee both contribute 8.33% of the basic salary to the funded scheme every month.

37.2 Employee Motivation and Retention Scheme

The Bank operates a long term motivation and retention scheme for its employees. The objective of the scheme is to reward,motivate and retain high performing executives and officers of the Bank by way of bonus in the form of shares of the Bank.The liability of the Bank in respect of this scheme is fixed and approved each year by the Board of Directors of the Bank .Thescheme is managed by separate Trusts formed in respect of each year. During the year, Rs. 206.819 million (2009: Rs. 40.212million) and Rs. 33.817 million (2009: Rs. 6.409 million) were received by the executives and the chief executive respectivelyfrom the scheme. For further details, refer note 19.1.

37.3 Benazir Employees’ Stock Option Scheme

The Government of Pakistan (GoP), being one of the shareholders of the Bank, decided to launch the Benazir Employees’Stock Option Scheme on August 14, 2009, whereby the GoP intends to transfer free of cost 26,391,483 shares of the Bank,including 26,025,533 shares held by the SBP as at December 31, 2010, to UBL Employees Empowerment Trust [the “Trust”].

As per the Trust Deed such shares will be allocated through Unit Certificates to eligible employees in proportion to theirentitlement which will be based on length of service subject to certain restrictions. The Trust is entitled to receive dividendsdeclared, of which 50 percent will be distributed amongst employees on the basis of units held. The balance 50 percentwould be remitted to a Central Revolving Fund of the Privatization Commission of Pakistan for payment to employees at thetime of end of service settlement on fulfilment of vesting conditions, against surrendered units with the shares underlying suchsurrendered units being transferred back to the GoP.

This generalized scheme being a government policy to provide empowerment to employees of State Owned Enterprises andother entities where the GoP has a shareholding, may attract the provisions of amended IFRS- 2 (Share-based Payments).However, keeping in view the nature, characteristics, exceptions and manner of operation of the generalized scheme, theapplicability of IFRS-2 to the said scheme is under consideration of the Institute of Chartered Accountants of Pakistan andthe Securities and Exchange Commission of Pakistan.



38. COMPENSATION OF DIRECTORS AND EXECUTIVES

President / ChiefExecutive Directors Executives

2010 2009 2010 2009 2010 2009--------------------------------- (Rupees in '000) ---------------------------------

Fees - - 42,993 54,090 - -

Managerial remuneration 61,349 61,287 - - 2,415,831 2,272,550

Charge for defined benefit plans 1,001 1,001 - - 215,447 189,601

Charge for defined contribution plan 1,880 1,880 - - 56,021 48,875

Rent and house maintenance 4,750 2,375 - - 384,325 333,228

Utilities 269 148 - - 171,749 105,803

Medical 65 56 - - 78,025 66,902

Conveyance - - - - 306,773 292,845

Reimbursement of children's education fees 1,106 5,928 - - - -

Others 3,133 1,880 - - 123,137 110,800

73,553 74,555 42,993 54,090 3,751,308 3,420,604

Number of persons 1 1 9 7 1,244 1,135

The Bank's President / Chief Executive Officer and certain Executives are provided with free use of Bank maintained cars andhousehold equipment.

In addition to the above, all executives including Chief Executive Officer of the Bank, are also entitled to certain short and longterm employee benefits which are disclosed in notes 36 and 37 to these financial statements.

39. FAIR VALUE OF FINANCIAL INSTRUMENTS

The fair value of traded investments other than those classified as held to maturity is based on quoted market price. Fair valueof unquoted equity investments, other than investments in associates and subsidiaries, is determined on the basis of break-upvalue of these investments as per the latest available audited financial statements. The provision for impairment of associatesand other investments has been determined in accordance with the Bank's accounting policy as stated in notes 4.2 and 5.7 tothese unconsolidated financial statements respectively.

The fair value of fixed term loans, other assets, other liabilities and fixed term deposits cannot be calculated with sufficientreliability due to the absence of a current and active market for assets and liabilities and reliable data regarding market rates forsimilar instruments. The provision for impairment of loans and advances has been calculated in accordance with the Bank'saccounting policy as stated in note 5.5 to these unconsolidated financial statements.

The repricing profile, effective rates and maturity of financial instruments are stated in note 44 to these unconsolidated financialstatements.

In the opinion of the management, the fair value of the remaining financial assets and liabilities are not significantly different fromtheir carrying values since these are either short-term in nature or, in the case of customer loans and deposits, are frequentlyrepriced.



40. SEGMENT DETAILS WITH RESPECT TO BUSINESS ACTIVITIES

For the year ended December 31, 2010Corporate Trading and Retail CommercialFinance Sales Banking Banking Others

---------------------------------- (Rupees in '000) ----------------------------------

Total income 471,169 2,647,783 31,156,420 9,208,767 745,001Total expenses (102,402) (690,072) (20,600,157) (4,291,011) (803,280)Profit / (loss) before tax 368,767 1,957,710 10,556,263 4,917,756 (58,279)Segment return on assets (ROA) (%) 5.4% 0.7% 1.2% 1.8% -Segment cost of funds (%) 0.3% 8.0% 4.0% 10.7% -


---------------------------------- (Rupees in '000) ----------------------------------

Total income 187,140 3,860,120 29,250,527 9,456,906 1,608,116Total expenses (641,566) (831,738) (20,483,277) (7,302,410) (1,069,316)(Loss) / profit before tax (454,426) 3,028,383 8,767,250 2,154,496 538,799Segment return on assets (ROA) (%) -5.4% 1.4% 1.0% 1.0% -Segment cost of funds (%) 6.6% 9.3% 4.9% 10.0% -


---------------------------------- (Rupees in '000) ----------------------------------

Segment assets (gross of NPL provisions) 5,004,302 257,667,931 173,895,858 265,008,433 30,742,726Segment non performing loans (NPL) - 2,002,017 21,766,521 24,810,869 13,153Segment provision required against NPL - 10,105 16,682,106 16,828,908 13,153Segment liabilities 4,665,722 258,459,687 150,835,644 245,510,597 (29,101,736)


---------------------------------- (Rupees in '000) ----------------------------------

Segment assets (gross of NPL provisions) 7,166,858 166,715,474 199,789,782 247,434,473 26,282,869Segment non performing loans (NPL) - - 18,378,603 20,709,293 13,500Segment provision required against NPL - - 13,519,170 14,140,352 13,500Segment liabilities 6,410,759 161,934,319 189,251,044 221,518,027 (20,334,440)



41. TRUST ACTIVITIES

The Bank is not engaged in any significant trust activities. However, it acts as custodian for some of the Term Finance Certificatesit arranges and distributes on behalf of its customers.

42. RELATED PARTY TRANSACTIONS

The Bank has related party transactions with its associates, subsidiary companies (refer note 9), employee benefit plans (refernotes 36 and 37) and its directors and executive officers (including their associates).

Details of loans and advances to key management personnel, the companies or firms in which the Directors of the Bank areinterested as directors, partners or in case of private companies as members are given in note 10.8 to these unconsolidatedfinancial statements.

Contributions to and accruals in respect of staff retirements and other benefit plans are made in accordance with the actuarialvaluations / terms of the contribution plan (refer note 36 to these unconsolidated financial statements for the details of plans).

42.1 RELATED PARTY TRANSACTIONS

Details of transactions with related parties during the year, other than those which have been disclosed elsewhere in thesefinancial statements, are as follows:

2010 2009Key Other Key Other

management Subsidiaries Associates related management Subsidiaries Associates relatedpersonnel parties personnel parties--------------------------------------------------------- (Rupees in '000) ---------------------------------------------------------

Balances with other banks

In current accounts - 1,274,033 - - - 564,453 - -

In saving accounts - - - 2,773 - - - -

In deposit accounts

Opening balance - - - - - - - -

Placements during the year - 4,960,214 - - - 1,251,860 - -

Settled during the year - (4,960,214) - - - (1,251,860) - -

Closing balance - - - - - - - -

Lendings to financial institutions

Call Money Lendings - - - 350,000 - - - -

Investments

In shares / mutual funds - cost

Opening balance - 2,201,948 6,921,080 50,372 - 2,201,948 2,899,663 50,372

Investment made during the year - - 2,620,000 - - - 4,157,468 -

Investment sold / liquidated during the year - - (2,158,888) - - - (136,051) -

Closing balance - 2,201,948 7,382,192 50,372 - 2,201,948 6,921,080 50,372





Ordinary Shares - - - 46,634 - - - 13,950

Term Finance Certificates - - - 148,368 - - - 41,534

Advances

Opening balance 102,750 - - - 148,875 - - -

Addition during the year 170,447 - - - 38,092 - - .

Repaid during the year (131,435) - - - (84,217) - - -

Closing balance 141,762 - - - 102,750 - - -

Other Assets

Interest markup accrued - - - 4,656 - - - 2,103

Receivable from staff retirement funds - - - 66,595 - - - 1,045,899

Prepaid insurance - - 1,368 - - - 18,759 -

Other receivable - 2,369 - - - 4,109 108,522 -

Borrowings

Opening balance - - 300,000 100,000 - - - -

Borrowings during the year - 1,461,661 2,100,000 - - - 1,650,000 1,100,000

Settled during the year - (1,461,661) (2,400,000) (100,000) - - (1,350,000) (1,000,000)

Closing balance - - - - - - 300,000 100,000

Overdrawn nostros - 120,552 533 - - 160,227 319 -

Deposits and other accounts

Opening balance 19,365 112,363 164,877 56,453 20,149 35,835 147,701 308,347

Received during the year 444,766 127,967,474 31,725,811 34,749,151 258,920 77,334,856 15,508,596 1,151,870

Withdrawn during the year (439,274) (127,929,360) (28,111,680) (34,742,618) (259,704) (77,258,327) (15,491,420) (1,403,764)

Closing balance 24,857 150,477 3,779,008 62,986 19,365 112,364 164,877 56,453

Sub-ordinated loans 5 - 5,999 - 5 - 761,987 -

Other Liabilities

Interest / markup payable on deposits 41 50 17,769 1,024 174 170 449 1,095

Interest / markup payable on borrowings - - - - - - 814 1,899

Interest / markup payable on sub-ordinated loans - - 167 - - - 36,497 -

Unrealised loss on derivative transactions - - - 618,818 - - - 307,241

Unearned income - - - - - 435 - -

Provision for employee benefit scheme - - - 250,000 - - - 210,000

Other payable - - - - - - 26,851 -

Others - 10,000 - - - - - -





Mark-up / return / interest earned 9,238 1,012 - 75,321 7,398 17,828 - 29,597

Dividend income - 101,870 356,010 1,600 - 164,068 228,516 -

Net gain on sale of investment - - 2,393 - - - - -

Realised gain on derivative transactions - - - 2,127,895 - - - 1,662,595

Other income 528 3,193 749 23 - 5,990 576 -

Mark-up / return / interest paid 716 679 242,488 8,984 389 388 69,402 816

Remuneration paid 336,588 - - - 268,383 - - -

Post employment benefits 12,224 - - - 10,286 - - -

Non-executive directors' fee and allowances - - - 42,993 - - - 54,090

Net charge for defined contribution plans - - - 104,035 - - - 416,114

Net reversal for defined benefit plans - - - (402,939) - - - (493,415)

Payment for employee motivation and retention scheme - - - 210,000 - - - 50,005

Other expenses - 13,407 - - - - - -

Insurance premium paid - - 204,492 - - - 215,804 -

Insurance claims settled - - 164,859 - - - 217,907 -

Contingencies and Commitments

FX interbank deal purchase - - - - - 63 - -

FX interbank deal sale - - - - - 63 - -

43. CAPITAL ADEQUACY

43.1 The Basel II Framework is applicable to the Bank whereby the Standardized Approach for reporting Capital Adequacy is currentlyimplemented. Under the said approach, credit risk and market risk exposures are measured using the Standardized Approachand operational risk is measured using the Basic Indicator Approach.

The Bank’s capital adequacy is reported using the rules and ratios provided by the State Bank of Pakistan.

The capital adequacy ratio is a measure of the amount of a Bank's capital expressed as a percentage of its risk weighted assets.Measuring capital adequacy requires risk mitigants to be applied to the amount of assets shown on a Bank's balance sheet.These assets are then applied weightages according to the degree of inherent risk. The capital adequacy ratios compare theamount of eligible capital with the total of risk-weighted assets (RWAs).

The Bank has developed Internal Capital Adequacy Assessment Process (ICAAP) as per the guidelines provided by the SBP.This framework has been approved by the Bank’s Board of Directors and submitted to the SBP. The Bank additionally coversrisk not yet included under Pillar I, so as to carry adequate capital to cater for any future business requirements. The Bank willreview the ICAAP framework on an annual basis and changes/updates will be recommended to the Basel II committee foronward submission to the Board of Directors.



The Bank plans to move towards the Advanced Approach for Basel II, including the Foundation Internal Ratings Based Approachfor credit risk, Internal Models Approach for market risk and the Alternate Standardized Approach for operational risk.

43.2 Capital Management

The objective of managing capital is to safeguard the Bank's ability to continue as a going concern. It is the policy of the Bankto maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future developmentof the business. The impact of the level of capital on shareholders’ return is also recognized and the Bank recognizes the needto maintain a balance between the higher returns that might be possible with greater gearing and the advantages and securityafforded by a sound capital position.

Statutory minimum capital and capital adequacy requirements

The SBP through its BSD Circular No. 07 dated April 15, 2009 has prescribed the minimum paid-up capital (net of accumulatedlosses) for Banks / Development Finance Institutions to be raised to Rs.10 billion by the year ending December 31, 2013.

The paid-up capital of the Bank for the year ended December 31, 2010 stood at Rs.12,241.798 million (2009:11,128.907million) and is in compliance with SBP requirements. In addition, banks are also required to maintain a minimum CapitalAdequacy Ratio (CAR) of 10% of the risk weighted exposure of the Bank. The Bank’s CAR as at December 31, 2010 was14.51% (2009: 13.18%). The Bank and its individually regulated operations have complied with all capital requirementsthroughout the year.

Tier 1 capital, includes fully paid-up capital, balance in share premium account, general reserves as per the financial statementsand net un-appropriated profits after deduction of book value of goodwill / intangibles, deficit on revaluation of available for saleinvestments and 50% of investments in equity and other regulatory capital of majority owned securities or other financialsubsidiaries not consolidated in the statement of financial position as per the guidelines laid under the Basel II Framework.

Tier 2 capital includes general provisions for loan losses, reserves on the revaluation of fixed assets and equity investments,foreign exchange translation reserves and subordinated debts (upto maximum of 50% of total eligible tier 1 capital) afterdeduction of 50% of investments in equity and other regulatory capital of majority owned securities or other financial subsidiariesnot consolidated in the statement of financial position as per the guidelines laid under the Basel II Framework.

Tier 3 capital has also been prescribed by the SBP for managing market risk; however, the Bank does not have any Tier 3 capital.

Banking operations are categorized as either trading book or banking book and risk-weighted assets are determined accordingto specified requirements of the SBP that seek to reflect the varying levels of risk attached to assets and off-balance sheetexposures. The total risk-weighted exposures comprise of credit risk, market risk and operational risk.



43.3 Capital Adequacy Ratio

The capital adequacy ratio, calculated in accordance with the SBP's guidelines on capital adequacy was as follows:

2010 2009----- (Rupees in ‘000) -----

Regulatory capital base

Tier 1 Capital

- Fully paid up capital 12,241,798 11,128,907- Statutory reserves 14,446,898 12,214,912- Unappropriated profits 26,250,489 22,187,802

52,939,185 45,531,621Deductions:- Book value of intangibles 1,440,826 488,635- Shortfall in provisions irrespective of relaxation provided 261,637 -- Reciprocal cross holdings by banks 5,999 -- 50 % of Investments in equity and other regulatory capital

of majority owned securities or other financial subsidiaries notconsolidated in the statement of financial position 1,224,465 1,134,633

2,932,927 1,623,268Total eligible Tier 1 Capital 50,006,258 43,908,353

Supplementary CapitalTier 2 Capital- General provisions or general reserves for loan losses-up to maximum

of 1.25% of risk weighted assets 1,425,496 569,195- Revaluation reserves up to 45% 5,496,317 5,791,474- Foreign exchange translation reserve 7,370,891 6,951,040- Subordinated debt - upto maximum of 50% of total eligible Tier 1 capital 7,852,176 8,300,938- Cash flow hedge reserve (198,695) (317,562)Total Tier 2 Capital 21,946,185 21,295,085

Deductions:- 50 % of Investments in equity and other regulatory capital

of majority owned securities or other financial subsidiariesnot consolidated in the statement of financial position 1,224,465 1,134,633

Total eligible Tier 2 Capital 20,721,720 20,160,452Total Eligible Capital 70,727,978 64,068,805



Risk weighted exposures Capital requirements Risk weighted assets2010 2009 2010 2009

----------------------------- (Rupees in ‘000) -----------------------------

Credit risk

Claims on:

Federal and Provincial Government, SBP and

Other Sovereigns – in foreign currency 1,806,245 1,247,825 18,062,446 12,478,248

Public Sector Enterprises 1,285,319 1,197,023 12,853,191 11,970,232

Banks 3,197,031 2,159,799 31,970,310 21,597,993

Corporate 22,086,826 24,197,367 220,868,255 241,973,670

Retail portfolio 3,428,589 4,683,906 34,285,894 46,839,059

Secured by residential property 174,425 196,697 1,744,250 1,966,966

Past due loans 1,944,316 1,289,105 19,443,160 12,891,048

Listed equity investments 900,932 841,421 9,009,323 8,414,206

Unlisted equity investments 83,307 66,236 833,073 662,361

Investments in fixed assets 2,098,325 2,143,704 20,983,246 21,437,035

Other assets 530,330 623,550 5,303,299 6,235,503

37,535,645 38,646,633 375,356,447 386,466,321

Market risk

Interest rate risk 2,268,723 1,810,310 28,359,037 22,628,873

Equity exposure risk 296,776 303,257 3,709,701 3,790,707

Foreign exchange risk 40,273 45,689 503,413 571,112

2,605,772 2,159,256 32,572,151 26,990,692

Operational risk 6,356,450 5,800,078 79,455,626 72,500,981

46,497,867 46,605,967 487,384,224 485,957,994

Capital adequacy ratio

Total eligible regulatory capital held 70,727,978 64,068,805

Total risk weighted assets 487,384,224 485,957,994

Capital adequacy ratio 14.51% 13.18%

43.4. Credit Risk - General Disclosures

The Bank follows the standardized approach for all its Credit Risk Exposures. The standardized approach to credit risk setsout fixed risk weights corresponding, where appropriate, to external credit assessment levels. Where no external rating isavailable, a 100% risk weight is used.

Under the standardized approach, the capital requirement is based on the credit rating assigned to counterparties by ExternalCredit Assessment Institutions (ECAIs) duly recognized by SBP for capital adequacy purposes. The Bank selects particularECAI(s) for each type of claim. In this connection, the Bank utilizes the credit ratings assigned by ECAIs such as PACRA(Pakistan Credit Rating Agency), JCR-VIS (Japan Credit Rating Company Limited – Vital Information Systems), Fitch, Moody’sand Standard & Poors. The Bank also utilizes rating scores of Export Credit Agencies (ECA) participating in the “Arrangementon Officially Supported Export Credits”.



Mapping to SBP Rating Grades

The selected final ratings (after application of the principles stated above) for all exposures need to be translated to thestandard rating grades given by the SBP. In this regard, the mapping tables to be used for converting ECAI ratings to SBPrating grades are given below:

Long – Term Rating Grades Mapping

SBP Rating grade Fitch Moody’s S & P PACRA JCR-VIS ECA Scores

1 AAA Aaa AAA AAA AAA 0AA+ Aa1 AA+ AA+ AA+ 1AA Aa2 AA AA AAAA- Aa3 AA- AA- AA-

2 A+ A1 A+ A+ A+ 2A A2 A A AA- A3 A- A- A-

3 BBB+ Baa1 BBB+ BBB+ BBB+ 3BBB Baa2 BBB BBB BBBBBB- Baa3 BBB- BBB- BBB-

4 BB+ Ba1 BB+ BB+ BB+ 4BB Ba2 BB BB BBBB- Ba3 BB- BB- BB-

5 B+ B1 B+ B+ B+ 5B B2 B B B 6B- B3 B- B- B-

6 CCC+ and Caa1 and CCC+ and CCC CCC 7below below below CC CC

C CD

Short – Term Rating Grades Mapping

SBP Rating Grade Fitch Moody’s S & P PACRA JCR-VIS

S1 F1 P-1 A-1+ A-1+ A-1+A-1 A-1 A-1

S2 F2 P-2 A-2 A-2 A-2S3 F3 P-3 A-3 A-3 A-3S4 Others Others Others Others Others

Types of exposures and ECAI's used

JCR-VIS PACRA FITCH Moody's ECA scores

Corporate � � � - -Banks � � � � -Sovereigns - - - - �PSE � � - - -



Credit exposures subject to Standardized Approach2010 2009

-------------------- (Rupees in '000) ------------------- -------------------- (Rupees in '000) -------------------Exposures Rating Amount Deduction Net amount Amount Deduction Net amount

category outstanding CRM outstanding CRM

Cash and Cash Equivalents - 14,266,546 - 14,266,546 13,747,521 - 13,747,521Claims on Government of Pakistan(Federal or Provincial Governments) andSBP, denominated in PKR - 121,556,124 12,686,226 108,869,898 62,121,705 6,228,951 55,892,754Foreign Currency claims on SBP arisingout of statutory obligations of banks inPakistan - 5,043,830 - 5,043,830 4,487,971 - 4,487,971Claims on other sovereigns and on 1 207,144 - 207,144 1,946,332 - 1,946,332Government of Pakistan or provincial 2 3,063,371 - 3,063,371 12,669,156 - 12,669,156governments or SBP denominated in 3 7,766,882 - 7,766,882 - - -currencies other than PKR 4,5 - - - 6,668,157 (22,570) 6,690,727

6 9,046,552 2,332 9,044,220 2,169,127 - 2,169,127Unrated - - - - - -

20,083,949 2,332 20,081,617 23,452,772 (22,570) 23,475,342Corporate 0 - - - - - -

1 24,189,772 2,437,971 21,751,801 15,388,248 9,092 15,379,1562 22,955,606 191 22,955,415 6,182,276 107,907 6,074,3693,4 1,081,533 - 1,081,533 1,679,117 - 1,679,1175,6 1,456,141 75,002 1,381,139 1,182,235 - 1,182,235

Unrated 219,662,847 17,775,900 201,886,947 260,692,866 28,284,682 232,408,184269,345,899 20,289,064 249,056,835 285,124,742 28,401,681 256,723,061

Banks 0 - - - - -1 46,327,423 17,890,757 28,436,666 37,788,122 22,769,911 15,018,2112,3 36,295,927 2,470,749 33,825,178 26,124,854 47,116 26,077,7384,5 7,171,065 1,162,030 6,009,035 3,506,514 576 3,505,9386 - - - - - -

Unrated 6,722,706 - 6,722,706 4,257,435 158,346 4,099,08996,517,121 21,523,536 74,993,585 71,676,925 22,975,949 48,700,976

Claims on banks with maturity less than 1,2,3 - - - - - -3 months and denominated in foreign currency 4,5 - - - - - -

6 - - - - - -Unrated - - - - - -

- - - - - -Public sector 0 - - - - - -

1 89,861 193 89,668 6,656,459 589,581 6,066,8782,3 4,666 2,678 1,988 - - -4,5 - - - - - -6 - - - - - -

Unrated 81,359,035 55,690,508 25,668,527 66,982,129 45,468,416 21,513,71381,453,562 55,693,379 25,760,183 73,638,588 46,057,997 27,580,591

Retail 75% 48,894,320 3,179,795 45,714,525 65,720,344 3,268,265 62,452,07935% 4,983,571 - 4,983,571 5,619,903 - 5,619,903

53,877,891 3,179,795 50,698,096 71,340,247 3,268,265 68,071,982Equity Investments

- Listed 100% 9,009,323 - 9,009,323 8,414,206 - 8,414,206- Unlisted 150% 555,382 - 555,382 441,574 - 441,574

9,564,705 - 9,564,705 8,855,780 - 8,855,780Past due loans

- Less than 20% 150% 4,923,887 1,450,172 3,473,715 2,612,613 184,591 2,428,022- Between 20% to 50% 100% 11,360,230 - 11,360,230 11,399,342 4,191,246 7,208,096- More than 50% 50% 3,677,090 - 3,677,090 25,846,230 23,347,721 2,498,509

19,961,207 1,450,172 18,511,035 39,858,185 27,723,558 12,134,627Past due loans secured against mortgageof residential property:

- past due for more than 90 days 100% 560,433 - 560,433 626,876 80,912 545,964- past due by 90 days 50% 946,757 - 946,757 891,713 400,312 491,401

1,507,190 - 1,507,190 1,518,589 481,224 1,037,365All Fixed Assets 100% 20,983,246 - 20,983,246 21,437,035 - 21,437,035Others 5,303,299 5,303,299 7,782,206 1,546,703 6,235,503Total 719,464,569 114,824,504 604,640,066 685,042,266 136,661,758 548,380,508



Credit Risk: Disclosures with respect to Credit Risk Mitigation for Standardized Approach

The Bank has adopted the Comprehensive Approach of Credit Risk Mitigation for the Banking Book. No credit risk mitigationbenefit is taken in the Trading Book. In instances where the Bank’s exposure on an obligor is secured by collateral that conformsto the eligibility criteria under the Comprehensive Approach of CRM, then the Bank reduces its exposure under that particulartransaction by taking into account the risk mitigating effect of the collateral for the calculation of capital requirement i.e. the riskweight of the collateral instrument securing the exposure is substituted for the risk weight of the counter party.

Cash, lien on deposits, government securities and eligible guarantees etc. are considered as eligible collateral under theComprehensive Approach of Credit Risk Mitigation. The Bank has in place detailed guidelines with respect to valuation andmanagement of these types of collateral. In order to be prudent, the Bank calculates the Credit Risk Mitigation benefit using therealizable value of eligible collateral.

44. RISK MANAGEMENT

This section presents information about the Bank’s exposure to and its management and control of risks, in particular, theprimary risks associated with its use of financial instruments:

- Credit risk is the risk of loss resulting from client or counterparty default

- Market risk is the risk of loss arising from adverse movements in market variables such as interest rates, exchange rates andequity indices

- Liquidity risk is the risk that the Bank may be unable to meet its payment obligations when due

- Operational risk is the risk of loss resulting from inadequate or failed internal processes, people and systems or from externalevents, and therefore includes legal risk

- Equity position risk is the risk that arises due to changes in prices of individual stocks or levels of equity indices.

Managing risk continues to present a major challenge to the entire banking industry. Success in the banking business dependson how well an institution manages its risks. The main goal is not to eliminate risk, but rather to be proactive in identifying,assessing and managing risks to the organisation’s strategic advantage at the optimum.

The Bank has an integrated risk management structure in place. The Board Risk Management Committee oversees the wholerisk management process of the bank. The Risk & Credit Policy Group assists the Board Risk Management Committee. Thegroup is organized into the functions of Credit Administration, Market and Treasury Risk, Commercial and FIRMU Credit Policy,Consumer and Retail Credit, Credit Risk Management and Operational Risk and Basel II. Each risk category is headed by a seniormanager who reports directly to the Group Executive, Risk and Credit Policy. The role of the Risk and Credit Policy Groupincludes:

- Determining guidelines relating to Bank’s appetite for risk.

- Recommending risk management policies in accordance with the Basel-II framework and international best practices.

- Reviewing policies/ manuals and ensuring that these are in accordance with the risk management policies.



- Developing systems and resources to review the key risk exposures of the Bank .

- Approving credits.

- Granting approval authority to qualified and experienced individuals.

- Reviewing the adequacy of credit training across the Bank.

- Organizing portfolio reviews focusing on quality assessment, risk profiles, industry concentrations, etc.

- Setting systems to identify significant portfolio indicators, problem credits and level of provisioning required.

44.1 Credit risk

Credit risk is the risk that a customer or counterparty may not settle an obligation for full value, either when due or at any timethereafter. This risk arises from the potential that a customer or counterparty is either unwilling to perform an obligation or itsability to perform such an obligation is impaired resulting in an economic loss to the Bank.

The credit risk management process is driven by the Bank's Credit Policy, which provides policies and procedures in relationto credit initiation, approval, documentation and disbursement, credit maintenance and remedial management.

The Credit risk function is organized into Corporate, Commercial/SME and Retail credit. Corporate and Retail credit functionsare centrally organized while the Commercial credit function is organized regionally across the network. Individual creditauthorities are delegated by the Board according to seasoning/maturity of respective credit officers.

The Bank manages, limits and controls concentrations of credit risk as identified, in particular, to individual counterparties andgroups, and to industries, where appropriate. Concentrations of credit risk exist if clients are engaged in similar activities, or arelocated in the same geographical region or have comparable economic characteristics such that their ability to meet contractualobligations would be similarly affected by changes in economic, political or other conditions. Limits are also applied in a varietyof forms to portfolios or sectors where the Bank considers it appropriate to restrict credit risk concentrations or areas of higherrisk, or to control the rate of portfolio growth.



44.2 Segmental information

44.2.1 Segments by class of business

2010Gross Advances Deposits Contingencies and

commitments(Rupees in '000) Percent (Rupees in '000) Percent (Rupees in '000) Percent

Chemical and pharmaceuticals 6,217,583 1.69% 8,389,268 1.52% 6,082,131 1.13%Agri business 53,034,196 14.38% 33,824,201 6.14% 315,807 0.06%Textile spinning 17,497,654 4.75% 1,289,002 0.23% 5,058,213 0.94%Textile weaving 6,722,278 1.82% 2,477,437 0.45% 4,289,442 0.79%Textile composite 23,145,685 6.28% 330,764 0.06% 814,737 0.15%Textile others 13,779,179 3.74% 2,182,465 0.40% 3,740,450 0.69%Cement 6,803,468 1.85% 1,908,802 0.35% 2,801,403 0.52%Sugar 8,153,681 2.21% 3,078,292 0.56% 358,817 0.07%Shoes and leather garments 2,447,523 0.66% 2,216,787 0.40% 298,515 0.06%Automobile and transportation equipment 4,455,055 1.21% 3,027,770 0.55% 4,940,641 0.92%Financial 4,895,906 1.33% 15,918,040 2.89% 298,818,733 55.37%Insurance - 0.00% 22,443,630 4.08% 43,143 0.01%Electronics and electrical appliances 2,385,744 0.65% 3,265,744 0.59% 1,541,579 0.29%Production and transmission of energy 39,057,078 10.59% 17,157,862 3.12% 58,716,619 10.88%Paper and allied 789,310 0.21% 2,189,563 0.40% 660,772 0.12%Surgical and metal 2,265,932 0.61% 1,450,750 0.26% 335,306 0.06%Contractors 4,263,223 1.16% 16,640,821 3.02% 19,463,140 3.61%Wholesale traders 20,775,990 5.64% 36,074,167 6.55% 1,290,820 0.24%Fertilizer dealers 6,823,565 1.85% 8,494,701 1.54% 677,458 0.13%Sports goods 803,919 0.22% 840,738 0.15% 17,885 0.00%Food industries 6,848,598 1.86% 3,931,436 0.71% 3,699,826 0.69%Airlines 6,033,039 1.64% 308,457 0.06% 108,106 0.02%Cables 661,900 0.18% 96,185 0.02% 744,510 0.14%Construction 21,866,860 5.93% 8,675,833 1.58% 10,260,326 1.90%Containers and ports 1,813,903 0.49% 1,543,051 0.28% 2,974,909 0.55%Engineering 1,531,426 0.42% 3,472,111 0.63% 1,618,692 0.30%Glass and allied 301,653 0.08% 385,593 0.07% 220,958 0.04%Hotels 2,708,633 0.73% 1,223,853 0.22% 438,627 0.08%Infrastructure 2,273,671 0.62% 4,285,714 0.78% 31,461,991 5.83%Media 620,575 0.17% 365,056 0.07% 40,879 0.01%Polyester and fibre 1,980,509 0.54% 623,175 0.11% 78,234 0.01%Telecommunication 11,333,927 3.07% 3,894,923 0.71% 1,167,952 0.22%Individuals 65,802,937 17.85% 267,478,119 48.58% 17,737,304 3.29%Others 20,597,340 5.59% 71,161,457 12.92% 58,859,489 10.91%

368,691,940 100.00% 550,645,767 100.00% 539,677,414 100.00%





Chemical and pharmaceuticals 6,081,931 1.59% 11,971,327 2.43% 1,235,141 0.28%Agri business 50,894,347 13.31% 21,026,267 4.27% 48,362 0.01%Textile spinning 19,541,766 5.11% 1,225,983 0.25% 3,153,486 0.71%Textile weaving 7,788,745 2.04% 804,049 0.16% 3,307,899 0.74%Textile composite 21,246,034 5.55% 965,467 0.20% 244,588 0.05%Textile others 13,088,122 3.42% 1,981,459 0.40% 2,521,137 0.56%Cement 6,508,094 1.70% 988,097 0.20% 1,471,077 0.33%Sugar 7,068,609 1.85% 2,360,348 0.48% 16,915 0.00%Shoes and leather garments 2,200,397 0.58% 1,827,377 0.37% 11,522 0.00%Automobile and transportation equipment 5,213,278 1.36% 4,318,840 0.88% 1,306,428 0.29%Financial 5,485,383 1.43% 11,227,495 2.28% 261,681,089 58.55%Insurance - - 13,802,720 2.81% 37,673 0.01%Electronics and electrical appliances 2,143,745 0.56% 7,076,567 1.44% 1,931,037 0.43%Production and transmission of energy 41,179,308 10.77% 19,932,300 4.05% 20,328,644 4.55%Paper and allied 1,125,589 0.29% 1,016,292 0.21% 267,165 0.06%Surgical and metal 567,366 0.15% 1,553,961 0.32% 95,659 0.02%Contractors 2,600,466 0.68% 18,104,119 3.68% 20,133,503 4.50%Wholesale traders 11,558,910 3.02% 26,658,663 5.42% 1,383,149 0.31%Fertilizer dealers 5,729,029 1.50% 9,516,985 1.93% 1,461,840 0.33%Sports goods 432,121 0.11% 868,470 0.18% 70,510 0.02%Food industries 7,301,248 1.91% 3,231,634 0.66% 2,241,180 0.50%Airlines 5,569,645 1.46% 1,621,206 0.33% 118,910 0.03%Cables 379,600 0.10% 225,097 0.05% 255,330 0.06%Construction 26,087,922 6.82% 7,793,699 1.58% 7,829,209 1.75%Containers and ports 95,855 0.03% 1,223,696 0.25% 1,036,486 0.23%Engineering 1,496,050 0.39% 3,124,994 0.64% 3,093,417 0.69%Glass and allied 444,982 0.12% 914,092 0.19% 316,022 0.07%Hotels 2,692,321 0.70% 1,018,965 0.21% 303,976 0.07%Infrastructure 2,507,584 0.66% 4,547,147 0.92% 32,018 0.01%Media - 0.00% 448,233 0.09% 77,411 0.02%Polyester and fibre 3,403,956 0.89% 409,196 0.08% 117,122 0.03%Telecommunication 8,557,307 2.24% 3,526,634 0.72% 25,329,025 5.67%Individuals 78,997,010 20.65% 258,791,280 52.60% 732,798 0.16%Others 34,491,522 9.02% 47,933,444 9.74% 84,734,075 18.96%

382,478,242 100.00% 492,036,103 100.00% 446,923,805 100.00%44.2.2 Segment by Sector



Public / Government 64,861,230 17.59% 71,320,777 12.95% 84,207,505 15.60%Private 303,830,710 82.41% 479,324,990 87.05% 455,469,909 84.40%

368,691,940 100.00% 550,645,767 100.00% 539,677,414 100.00%




382,478,242 100.00% 492,036,103 100.00% 446,923,805 100.00%



44.2.3 Details of non performing advances and specific provisions by class of business segment

2010 2009Classified Specific Classified SpecificAdvances Provision Held Advances Provision Held

------------------------ (Rupees in '000) ------------------------

Chemical and pharmaceuticals 226,502 196,114 309,349 177,596Agri business 1,430,020 903,057 1,508,525 862,526Textile spinning 5,417,208 4,479,514 5,017,860 3,927,267Textile weaving 910,470 873,022 888,722 867,460Textile composite 5,210,214 2,337,315 998,902 765,271Textile others 2,282,350 1,937,098 2,935,380 2,365,528Cement - - 4,450 4,450Sugar 33,638 33,638 33,638 33,638Shoes and leather garments 226,903 224,110 241,948 180,321Automobile and transportation equipment 726,577 650,422 750,787 704,676Financial 2,151,805 57,003 10,125 10,125Electronics and electrical appliances 365,354 345,164 542,892 428,957Production and transmission of energy 3,049,109 2,981,719 2,927,748 1,942,137Paper and allied 179,264 113,240 173,212 116,438Surgical and metal - - 1,775 1,775Wholesale traders 1,167,377 881,274 1,024,613 648,018Fertilizer dealers 7,490 6,878 6,182 4,364Sports goods 128,325 128,325 280,675 279,310Food industries 1,258,725 964,667 795,442 781,194Construction 3,885,120 1,134,507 4,106,175 1,249,378Engineering 440,297 410,139 353,454 353,454Glass and allied 24,527 12,264 29,796 14,899Hotels 485,993 113,086 489,493 116,586Polyester and fibre 1,751,479 1,743,679 1,702,376 1,668,561Individuals 13,238,040 9,816,791 11,142,751 8,073,785Others 3,995,773 3,191,246 2,825,126 2,095,308

48,592,560 33,534,272 39,101,396 27,673,022

44.2.4 Details of non performing advances and specific provision by sector


------------------------ (Rupees in '000) ------------------------

Public / Government - - - -Private 48,592,560 33,534,272 39,101,396 27,673,022

48,592,560 33,534,272 39,101,396 27,673,022



44.2.5 Geographical segment analysis2010

Profit before Total assets Net assets Contingencies &taxation employed employed commitments

------------------------ (Rupees in '000) ------------------------

Pakistan operations 14,879,127 556,278,906 42,331,160 428,490,946

Middle East 2,655,182 138,860,848 24,430,003 108,368,163United States of America 173,800 3,158,076 1,322,216 2,586,153Karachi Export Processing Zone 34,109 487,149 331,686 232,152

2,863,091 142,506,073 26,083,905 111,186,46817,742,218 698,784,979 68,415,065 539,677,414

2009Profit before Total assets Net assets Contingencies &taxation employed employed commitments

------------------------ (Rupees in '000) ------------------------


Middle East 2,322,795 130,479,211 25,356,043 77,206,577United States of America 111,414 2,138,970 1,259,785 320,870Karachi Export Processing Zone 58,448 708,459 321,518 166,269

2,492,657 133,326,640 26,937,346 77,693,71614,034,501 619,716,433 60,936,723 446,923,805

Total assets employed include intra group items of Rs.Nil.

44.3 Market Risk

Market risk is the uncertainity that the Bank may experience due to movements in market prices. It results from changes ininterest rates, exchange rates, equity prices and volatilities of individual market factors as well as the correlations betweenthem. Each component of risk includes a general market risk and a specific aspect of market risk that originates in the portfoliostructure of a bank.

Measuring and controlling market risk is usually carried out at the portfolio level. However, certain controls are applied, wherenecessary, to individual risk types, to particular books and to specific exposures. Controls are also applied to prevent any unduerisk concentrations in trading books, taking into account variations in price, volatility, market depth and liquidity. These controlsalso include limits on exposure to individual market risk variables ('risk factors') as well as on concentrations of tenors, issuersetc.

Trading activities are centered in the Treasury and Capital Markets (TCM) Group to faclitate clients as well as run proprietarypositions. The Bank is active in the cash and derivative markets for equity, interest rate and foreign exchange.

Market and Treasury Risk (MTR) division performs market risk management activities. The division is composed of two units, i.e.,Market Risk Management and Treasury Middle Office. The Market Risk Management unit is responsible for the development andreview of market risk policies and processes, and is involved in research, financial modeling and testing/implementation of riskmanagement systems. Treasury Middle Office is responsible for monitoring and implementation of market risk and other policies,escalation of any deviation to senior management, and MIS reporting.



The scope of market risk management is as follows:

- To keep the market risk exposure within the Bank’s risk appetite as assigned by the Board of Directors (BoD) and the BoardRisk Management Committee (BRMC).

- To implement Risk Management policies approved by the BoD and BRMC jointly with the senior management throughMarket Risk Committee (MRC).

- To review new product proposals, propose/recommend/approve procedures for market risk management. Various limitsare assigned to different businesses on a product-portfolio basis. The products are approved through product programs,where risks are identified and limits and parameters are set. Any transaction/ product falling beyond the Product PolicyManual are approved through separate transaction / product memos.

- To develop, review and upgrade procedures for effective implementation of market risk management policy. It also includesimplementation of an Enterprise Risk Management solution for market risk.

- To maintain a comprehensive database for performing risk analysis, stress testing and scenario analysis. Stress testingactivities are performed on a quarterly basis which also includes banking book along with trading book.

44.3.1 Foreign Exchange Risk2010

Assets Liabilities Off - balance Net foreignsheet items currency

exposure------------------------ (Rupees in '000) ------------------------

Pakistan Rupee 546,744,646 470,070,512 (8,122,491) 68,551,643US Dollar 51,721,592 39,509,427 (12,599,803) (387,638)Pound Sterling 4,441,658 9,743,709 5,342,193 40,142Japanese Yen 10,406 7,916 1,053 3,543Euro 2,731,292 5,970,493 3,414,013 174,812UAE Dirham 73,556,548 82,624,436 8,968,295 (99,593)Bahraini Dinar 9,079,631 11,750,538 2,654,725 (16,182)Qatari Riyal 3,541,983 3,746,636 256,878 52,225Other Currencies 6,957,223 6,946,247 85,137 96,113

698,784,979 630,369,914 - 68,415,065

2009Assets Liabilities Off - balance Net foreign

sheet items currencyexposure

------------------------ (Rupees in '000) ------------------------

Pakistan Rupee 546,286,005 477,497,360 (7,384,117) 61,404,528US Dollar 33,366,944 33,073,859 (544,997) (251,912)Pound Sterling 998,474 7,051,265 5,995,613 (57,178)Japanese Yen 315,278 275,066 (41,117) (905)Euro 1,040,133 4,601,339 3,497,421 (63,785)UAE Dirham 3,078,195 2,121,758 (1,061,846) (105,409)Bahraini Dinar 18,850,218 18,874,901 - (24,683)Qatari Riyal 795,762 - (842,508) (46,746)Other Currencies 14,985,424 15,284,162 381,551 82,813

619,716,433 558,779,710 - 60,936,723



Foreign Exchange Risk is the uncertainty that the Bank is exposed to due to changes in exchange rates. Foreign exchangepositions are reported on a consolidated basis and limits are used to monitor exposure in individual currencies.

The Bank is an active participant in currency cash and derivatives markets and carries currency risk from these tradingactivities, conducted primarily by Treasury and Capital Markets Group. These trading exposures are subject to prescribedstress tests and sensitivity analysis.

The Bank's reporting currency is the Pakistani Rupee, but its assets, liabilities, income and expenses are denominated indifferent currencies. Treasury and Capital Markets Group from time to time, proactively hedges significant expected foreigncurrency earnings / costs within a time horizon of up to one year, in accordance with the instructions of the SBP and subjectto pre-defined limits.

44.3.2 Equity position risk

Equity position risk arises due to changes in prices of individual stocks or levels of equity indices. The Bank’s equity bookcomprises of Held for Trading (HFT) & Available for Sale (AFS) portfolios. The objective of the HFT portfolio is to make short-term capital gains, whilst the AFS portfolio is maintained with a medium-term view of capital gains and dividend income.Separate product program manuals have been developed to discuss in detail the objectives and policies, risks and mitigants,limits and controls for the equity portfolios of the Bank.

44.3.3 Yield / Interest Rate Risk

Interest rate risk is the uncertainty resulting from changes in interest rates, including changes in the shape of yield curves.Interest rate risk is inherent in many of the Bank's businesses and arises from factors such as mismatches between contractualmaturities or re-pricing of on and off balance sheet assets and liabilities. Interest rate risk arises mainly through HTMinvestments, advances and deposits. The interest sensitivity profile is prepared on a quarterly basis based on the re-pricingor maturities of assets and liabilities.

The objective of yield / interest rate risk management is to minimize adverse variances in the Bank's profitability. Interest raterisk in the banking book is managed by performing periodic gap analysis, sensitivity analysis and stress testing.



44.3.4Mismatchofinterestratesensitiveassetsandliabilities

2010ExposedtoYield

/Interestrisk

Non-interest

Effective

Total

Upto

Over

Over

Over

Over

Over

Over

Over

Over

bearing

yield/

1month

1monthto

3monthsto

6monthsto

1yearto

2yearto

3yearto

5yearto

10years

financial

Interestrate

3months

6months

1year

2years

3years

5years

10years

instruments

-----------------------------------------------------------------(Rupeesin'000)-----------------------------------------------------------------

On-balancesheetfinancialinstruments

%

Assets

Cashandbalanceswithtreasurybanks

0.28%

67,461,668

--

--

--

--

-67,461,668

Balanceswithotherbanks

0.67%

18,192,142

15,290,082

--

--

--

--

2,902,060

Lendingstofinancialinstitutions

9.20%

12,384,778

5,170,604

2,679,720

732,223

1,284,550

2,165,956

145,058

206,667

--

-Investments

11.01%

224,578,556

12,623,734

71,921,560

81,181,895

14,806,550

3,291,050

3,640,867

4,300,605

17,197,357

3,952,527

11,662,411

Advances

11.75%

-Performing

318,673,884

46,588,038

186,585,426

55,872,077

11,908,971

4,104,428

7,623,532

5,875,584

41,330

74,498

--Non-performing

15,058,288

--

--

--

--

-15,058,288

Operatingfixedassets-Ijaraassets

6.55%-25.00%

692,584

346,292

9,765

18,603

26,533

48,910

125,787

80,692

35,908

94-

Otherassets

0%12,782,351

--

--

--

12,782,351

669,824,251

80,018,750

261,196,471

137,804,798

28,026,604

9,610,344

11,535,244

10,463,548

17,274,595

4,027,119

109,866,778

Liabilities

Billspayable

0%5,045,815

--

--

--

--

-5,045,815

Borrowings

11.02%

45,104,849

26,295,293

5,499,203

7,670,247

544,798

332,891

855,859

569,933

3,336,625

--

Depositsandotheraccounts

3.98%

550,645,767

106,133,728

128,561,488

59,940,763

50,327,484

3,044,356

2,281,413

2,358,697

8,692,490

-189,305,348

Subordinatedloans

11.91%

11,985,748

-7,991,228

-665,040

1,330,080

1,999,400

--

--

Otherliabilities

0%15,371,258

--

--

--

--

-15,371,258

628,153,437

132,429,021

142,051,919

67,611,010

51,537,322

4,707,327

5,136,672

2,928,630

12,029,115

-209,722,421

On-balancesheetgap

41,670,814

(52,410,271)

119,144,552

70,193,788

(23,510,718)

4,903,017

6,398,572

7,534,918

5,245,480

4,027,119

(99,855,643)

Nonfinancialnetassets

26,744,251

Totalnetassets

68,415,065

Off-balancesheetfinancialinstruments

InterestRateDerivatives-Longposition

6,985,703

2,000,000

1,129,713

380,183

-500,000

1,000,000

-1,975,807

--

InterestRateDerivatives-Shortposition

(6,985,702)

-(1,629,713)

(1,880,183)

(1,000,000)

-(1,000,000)

-(1,475,806)

--

CrossCurrencySwap-Longposition

35,570,843

5,255,285

24,893,088

5,422,470

--

--

--

-CrossCurrencySwap-ShortPosition

(35,570,843)

(5,255,285)

(24,893,088)

(5,422,470)

--

--

--

-Swaptions-LongPosition

--

--

--

--

--

-Swaptions-ShortPosition

--

--

--

--

--

-FXOptions-Longposition

2,055,442

--

--

--

--

-2,055,442

FXOptions-Shortposition

(2,055,442)

--

--

--

--

-(2,055,442)

Commodityoptions-Longposition

--

--

--

--

--

Commodityoptions-Shortposition

--

--

--

EquityIndices-Longposition

--

--

--

--

--

-EquityIndices-Shortposition

--

--

--

--

--

-ForwardRateAgreements-Shortposition

--

--

--

--

--

-ForwardRateAgreements-Longposition

--

--

--

ForwardPurchaseofGovt.Securities

--

--

--

--

--

-ForwardSaleofGovt.Securities

(441,981)

-(441,981)

--

--

--

--

Foreigncurrencyforwardsales

(85,434,818)

(47,916,643)

(32,245,519)

(5,246,944)

(25,712)

--

--

--

Foreigncurrencyforwardpurchases

130,653,749

51,863,243

50,772,312

26,823,607

1,149,200

45,387

--

--

-

Off-balancesheetgap

44,776,951

5,946,600

17,584,812

20,076,663

123,488

545,387

--

500,001

--

TotalYield/InterestRiskSensitivityGap

86,447,765

(46,463,671)

136,729,364

90,270,451

(23,387,230)

5,448,404

6,398,572

7,534,918

5,745,481

4,027,119

(99,855,643)

CumulativeYield/InterestRiskSensitivityGap

(46,463,671)

90,265,693

180,536,144

157,148,914

162,597,318

168,995,890

176,530,808

182,276,289

186,303,408

86,447,765

Yield

riskistheriskofdeclineinearningsduetoadversemovementoftheyieldcurve.

Interestrateriskistheriskthatthevalue

ofthefinancialinstrumentwillfluctuateduetochangesinmarketinterestrates.



2009

ExposedtoYield

/Interestrisk

Non-interest

Effective

Total

Upto

Over

Over

Over

Over

Over

Over

Over

Over

bearing

yield/

1month

1monthto

3monthsto

6monthsto

1yearto

2yearto

3yearto

5yearto

10years

financial

Interestrate

3months

6months

1year

2years

3years

5years

10years

instruments

-----------------------------------------------------------------(Rupeesin'000)-----------------------------------------------------------------


%

Assets


0.01%

61,470,047

15,681,570

--

--

--

--

45,788,477


0.60%

5,407,470

1,371,234

509,093

--

--

--

-3,527,143


10.80%

23,162,130

18,483,355

2,773,622

385,669

143,875

1,210,609

165,000

--

--

Investments

10.40%

136,145,524

5,374,947

47,973,335

28,353,250

16,789,553

3,041,921

4,271,666

1,432,058

12,855,537

3,639,751

12,413,506

Advances

13.00%

Performing

342,663,339

71,959,301

143,918,602

51,399,501

51,399,501

10,279,900

6,853,266

6,853,268

--

-Non-performing

11,428,374

--

--

--

--

-11,428,374

Operatingfixedassets-Ijaraassets

10%-23%

514,391

--

514,391

--

--

--

-Otherassets

0%12,679,886

--

--

--

12,679,886

593,471,161

112,870,407

195,174,652

80,652,811

68,332,929

14,532,430

11,289,932

8,285,326

12,855,537

3,639,751

85,837,386

Liabilities

Billspayable

0%5,147,259

--

--

--

--

-5,147,259

Borrowings

11.20%

35,144,823

9,707,789

6,701,606

14,316,171

455,496

526,093

283,755

137,058

2,928,274

88,581

-Depositsandotheraccounts

4.78%

492,036,103

97,982,622

122,687,037

41,990,016

51,671,445

7,234,507

3,539,662

3,539,662

3,513,600

-159,877,552

Subordinatedloans

12.60%

11,989,800

-7,994,424

-424

665,467

1,330,085

1,999,400

--

-Otherliabilities

0%12,912,216

--

--

--

--

-12,912,216

557,230,201

107,690,411

137,383,067

56,306,187

52,127,365

8,426,067

5,153,502

5,676,120

6,441,874

88,581

177,937,027

On-balancesheetgap

36,240,960

5,179,996

57,791,585

24,346,624

16,205,564

6,106,363

6,136,430

2,609,206

6,413,663

3,551,170

(92,099,641)


25,005,130

Totalnetassets

60,936,723



11,014,381

7,094,496

175,000

421,208

1,050,196

102,273

750,000

1,000,000

421,208

--


(11,014,381)

(957,598)

(382,598)

(2,198,481)

-(1,000,000)

-(6,054,496)

(421,208)

--

CrossCurrencySwap-Longposition

36,372,837

5,712,267

25,438,470

5,222,100

--

--

--

-CrossCurrencySwap-ShortPosition

(36,372,837)

(5,712,267)

(25,438,470)

(5,222,100)

--

--

--

-Swaptions-LongPosition

2,527,248

-2,527,248

--

--

--

--

Swaptions-ShortPosition

(2,527,248)

-(2,527,248)

--

--

--

--

FXOptions-Longposition

410,535

--

--

--

--

-410,535


(410,535)

--

--

--

--

-(410,535)


--

--

--

--

--

-Commodityoptions-Shortposition

--

--

--

--

--

-EquityIndices-Longposition

--

--

--

--

--


--

--

--

--

--

-ForwardRateAgreements-Shortposition

--

--

--

--

--

-ForwardRateAgreements-Longposition

--

--

--

--

--

-ForwardPurchaseofGovt.Securities

--

--

--

--

--


--

--

--

--

--

-Foreigncurrencyforwardsales

(46,364,122)

(34,192,008)

(11,286,064)

(886,050)

--

--

--

-Foreigncurrencyforwardpurchases

90,952,188

25,276,683

42,328,428

22,624,587

722,490

--

--

--

Off-balancesheetgap

44,588,066

(2,778,427)

30,834,766

19,961,264

1,772,686

(897,727)

750,000

(5,054,496)

--

-


80,829,026

2,401,569

88,626,351

44,307,888

17,978,250

5,208,636

6,886,430

(2,445,290)

6,413,663

3,551,170

(92,099,641)


2,401,569

91,027,920

135,335,808

153,314,058

158,522,694

165,409,124

162,963,834

169,377,497

172,928,667

80,829,026

Yield

riskistheriskofdeclineinearningsduetoadversemovementoftheyieldcurve.





44.4

Liquidityrisk

LiquidityriskistherisktotheBankarisingfromeitheritsinabilitytomeetitsobligationsortofundincreaseinassetsastheyfallduewithoutincurringunacceptablecostorlosses.

TheAssetsandLiabilityManagementCommittee(ALCO)oftheBankhastheresponsibilityfortheformulationoverallstrategyandoversightofliquiditymanagementandmeets

onamonthlybasisormorefrequently,ifrequired.

TheBank’sapproachtoliquiditymanagementistoensure,asfaraspossible,thatitwillalwayshavesufficientliquiditytomeetitsliabilitieswhendue,underbothnormaland

stressed

conditions,withoutincurringunacceptablelossesorrisking

sustaineddamagetobusinessfranchises.Acentralized

approachisadopted,basedon

anintegrated

frameworkincorporatinganassessmentofallmaterialknownandexpected

cashflowsandtheavailabilityofcollateralwhichcouldbe

used

tosecureadditionalfunding

ifrequired.Theframeworkentailscarefulmonitoringandcontrolofthedailyliquidityposition,andregularliquiditystresstestingunderavarietyofscenarios.Scenariosencompass

bothnormalandstressedmarketconditions,includinggeneralmarketcrisesandthepossibilitythataccesstomarketscouldbeimpactedbyastresseventaffectingsome

partoftheBank’sbusiness.

44.4.1

Maturitiesofassetsandliabilities-basedoncontractualmaturityoftheassetsandliabilitiesofthebank

ThematurityprofilesetoutbelowhasbeenpreparedasrequiredbyIASonthebasisofcontractualmaturities,exceptforproductsthatdonothaveacontractualmaturitywhich

areshowninthefirstbucket.Thematurityprofiledisclosedinnote44.4.2includesmaturitiesofproductsthatdonothaveacontractualmaturity,asdeterminedbytheAssets

andLiabilitiesManagementCommittee(ALCO)keepinginview

thehistoricalbehaviouralpatternoftheseproducts.

2010

Total

Upto1

Over1month

Over3months

Over6months

Over1year

Over2years

Over3years

Over5years

Over

month

to3months

to6months

to1year

to2years

to3years

to5years

to10years

10years

----------------------------------------------------------------------------(Rupeesin'000)----------------------------------------------------------------------------------

Assets


67,461,668

62,413,974

--

--

--

-5,047,694


18,192,142

18,192,142

--

--

--

--


12,384,778

5,996,232

2,679,728

897,322

1,071,050

1,388,722

145,058

206,666

--

Investments

224,578,556

11,307,380

42,175,850

60,507,870

34,639,810

16,341,063

22,691,364

10,876,835

12,124,178

13,914,206

Advances

333,732,172

108,993,549

49,121,031

32,235,289

26,694,559

8,189,310

13,515,536

45,505,611

40,277,897

9,199,390

Operatingfixedassets

22,424,072

215,464

408,990

880,577

1,406,380

1,951,254

986,522

1,559,780

2,267,867

12,747,238

Deferredtaxasset

1,298,403

--

-584,281

714,122

--

--

Otherassets

18,713,188

4,766,639

9,279,214

183,940

4,176,229

297,012

-9,504

650

-698,784,979

211,885,380

103,664,813

94,704,998

68,572,309

28,881,483

37,338,480

58,158,396

54,670,592

40,908,528

Liabilities

Billspayable

5,045,815

4,866,536

179,279

--

--

--

-Borrowings

45,104,849

27,225,236

5,499,203

7,547,247

544,798

332,891

761,776

524,380

2,669,318


550,645,767

425,310,960

53,655,661

21,965,865

19,939,781

5,269,612

4,073,609

4,003,809

16,426,470

-Subordinatedloans

11,985,748

-2,028

-666,640

1,997,816

2,667,136

670,128

5,982,000

-Otherliabilities

17,587,735

(1,197,203)

7,150,286

679,457

5,847,004

2,711,842

494,052

-1,902,297

-630,369,914

456,205,529

66,486,457

30,192,569

26,998,223

10,312,161

7,996,573

5,198,317

26,980,085

-Netassets

68,415,065

(244,320,149)

37,178,356

64,512,429

41,574,086

18,569,322

29,341,907

52,960,079

27,690,507

40,908,528

Representedby:

Sharecapital

12,241,798

Reserves

21,688,637

Unappropriatedprofit

26,250,489

Surplus

onrevaluationofassets

8,234,141

68,415,065



2009

Total

Upto1

Over1month

Over3months

Over6months

Over1years

Over2years

Over3years

Over5years

Over

month

to3months

to6months

to1year

to2years

to3years

to5years

to10years

10years

----------------------------------------------------------------------------(Rupeesin'000)----------------------------------------------------------------------------------

Assets


61,470,047

48,369,050

--

--

--

-13,100,997


5,407,470

4,679,858

218,519

75,630

--

--

-433,463


23,162,130

18,323,555

2,319,313

783,185

216,592

354,485

1,000,000

165,001

--

Investments

136,145,524

1,397,991

19,884,073

19,544,119

19,633,800

5,864,771

7,334,674

33,785,590

24,952,486

3,748,020

Advances

354,091,713

119,816,466

44,750,609

37,577,696

37,313,539

25,371,579

6,859,613

24,697,592

50,393,665

7,310,954

Operatingfixedassets

21,925,669

195,205

364,608

749,032

769,222

2,285,090

907,601

1,613,853

2,622,572

12,418,486

Deferredtaxasset

608,876

--

-273,994

334,882

--

--

Otherassets

16,905,004

1,246,295

1,781,912

9,618,760

2,133,949

1,740,158

-383,929

--

619,716,433

194,028,420

69,319,035

68,348,422

60,341,096

35,950,964

16,101,888

60,645,965

77,968,723

37,011,920

Liabilities

Billspayable

5,147,259

4,953,418

193,841

--

--

--

-Borrowings

35,144,823

9,707,789

6,701,606

14,366,171

405,496

526,093

283,755

137,058

2,928,274

88,581


492,036,103

419,323,521

39,126,304

7,717,590

9,433,776

6,712,383

702,303

1,062,379

7,957,846

-Subordinatedloans

11,989,800

-2,024

-2,024

668,667

1,997,821

3,334,864

5,984,400

-Otherliabilities

14,461,725

30,545,771

(26,713,934)

1,729,996

7,113,960

(126,524)

--

1,912,455

-558,779,710

464,530,499

19,309,841

23,813,758

16,955,257

7,780,619

2,983,880

4,534,301

18,782,975

88,581

Netassets

60,936,723

(270,502,079)

50,009,194

44,534,664

43,385,839

28,170,345

13,118,008

56,111,665

59,185,748

36,923,339

Representedby:

Sharecapital

11,128,907

Reserves

18,959,537


22,187,802

Surplus


8,660,477

60,936,723



44.4.2

Maturitiesofassetsandliabilities-basedonworkingpreparedbytheAssetsandLiabilitiesManagementCommittee(ALCO)ofthebank

Currentandsavingsdepositsdonothaveanycontractualmaturitytherefore,currentdepositsandsavingsaccountshavebeenclassifiedbetweenallfourmaturities.Further,

ithasbeenassumedthatonagoingconcernbasis,thesedepositsarenotexpectedtofallbelowthecurrentyear'slevel.

2010

Total

Upto1

Over1

month

Over3

monthsOver6

months

Over1

year

Over2

years

Over3

years

Over5

years

Over

month

to3months

to6months

to1year

to2years

to3years

to5years

to10years

10years

----------------------------------------------------------------------------(Rupeesin'000)----------------------------------------------------------------------------------

Assets


67,461,668

32,424,575

5,961,763

4,315,224

4,895,167

5,617,703

226,485

184,107

13,836,644

-Balanceswithotherbanks

18,192,142

16,387,752

1,804,390

--

--

--

-Lendingstofinancialinstitutions

12,384,778

5,096,880

3,579,671

897,322

1,070,458

1,388,722

145,058

206,667

--

Investments

224,578,556

12,307,779

40,816,574

64,100,679

26,996,398

7,830,314

14,295,267

28,384,640

27,742,531

2,104,374

Advances

-Performing

318,673,884

95,348,986

98,192,050

25,932,792

24,742,350

5,178,136

12,017,576

20,777,863

27,702,735

8,781,396

-Non-performing

15,058,288

--

--

--

-15,058,288

-Otherassets

18,713,188

576,525

1,484,016

11,867,123

3,850,892

297,012

-9,504

628,116

-Operatingfixedassets

22,424,072

--

--

--

-22,424,072

-Deferredtaxassets

1,298,403

--

-584,281

714,122

--

--

698,784,979

162,142,497

151,838,464

107,113,140

62,139,546

21,026,009

26,684,386

49,562,781

107,392,386

10,885,770

Liabilities

Billspayable

5,045,815

4,039,238

1,006,577

--

--

--

-Borrowings

45,104,849

28,819,625

10,041,662

5,326,026

--

-917,536

--


550,645,767

114,986,109

87,333,984

60,045,885

57,431,382

63,119,549

4,073,702

4,003,813

159,651,343

-Subordinatedloan

11,985,748

-2,028

-666,640

1,997,816

2,667,136

670,128

5,982,000

-Deferredtaxliability

--

--

--

--

--

Otherliabilities

17,587,735

(6,462,963)

1,272,008

(561,825)

5,154,457

2,711,842

494,053

10,040,293

2,841,692

2,098,178

630,369,914

141,382,009

99,656,259

64,810,086

63,252,479

67,829,207

7,234,891

15,631,770

168,475,035

2,098,178

Netassets

68,415,065

20,760,488

52,182,205

42,303,054

(1,112,933)

(46,803,198)

19,449,495

33,931,011

(61,082,649)

8,787,592

Representedby:

Sharecapital

12,241,798

Reserves

21,688,637


26,250,489

Surplusonrevaluationofassets

8,234,141

68,415,065



2009

Total

Upto1

Over1

month

Over3

monthsOver6

months

Over1

year

Over2

years

Over3

years

Over5

years

Over

month

to3months

to6months

to1year

to2years

to3years

to5years

to10years

10years

----------------------------------------------------------------------------(Rupeesin'000)----------------------------------------------------------------------------------

Assets


61,470,047

30,325,615

5,744,339

3,821,791

4,031,174

5,046,748

107,770

294,807

12,097,803


5,407,470

5,207,470

--

--

--

200,000


23,162,130

20,623,296

2,159,149

169,075

-210,610

--

--

Investments

136,145,524

16,822,851

19,079,744

18,917,627

15,623,377

4,625,770

3,044,623

29,472,280

24,641,335

3,917,917

Advances-Performing

342,663,339

112,349,635

53,294,291

33,947,309

30,505,405

24,355,413

8,133,613

25,331,327

46,632,514

8,113,832

-Non-performing

11,428,374

--

--

--

-11,428,374

-Otherassets

16,905,004

2,622,082

1,019,732

12,540,173

62,799

--

-660,218

-Operatingfixedassets

21,925,669

--

--

--

-21,925,669

-Deferredtaxassets

608,876

--

-273,994

334,882

--

--

619,716,433

187,950,949

81,297,255

69,395,975

50,496,749

34,573,423

11,286,006

55,098,414

117,585,913

12,031,749

Liabilities

Billspayable

5,147,259

3,964,437

1,182,822

--

--

--

-Borrowings

35,144,823

13,459,781

13,572,786

6,848,198

--

-1,264,058

--


492,036,103

92,137,743

98,482,287

48,499,198

53,489,947

59,949,910

1,826,977

4,593,456

133,056,585

-Subordinatedloan

11,989,800

-2,024

-2,024

668,667

1,997,821

3,334,864

5,984,400

-Deferredtaxliability

--

--

--

--

--

Otherliabilities

14,461,725

309,369

12,053,942

--

--

-2,098,414

-558,779,710

109,871,330

125,293,861

55,347,396

53,491,971

60,618,577

3,824,798

9,192,378

141,139,399

-

Netassets

60,936,723

78,079,619

(43,996,606)

14,048,579

(2,995,222)

(26,045,154)

7,461,208

45,906,036

(23,553,486)

12,031,749

Representedby:

Sharecapital

11,128,907

Reserves

18,959,537


22,187,802

Surplusonrevaluationofassets

8,660,477

60,936,723



44.5 Operational risk

Operational risk is the risk of loss resulting from inadequate or failed internal processes, people and systems or fromexternal events.

The Bank’s Operational Risk Management implementation framework is based on the advanced risk management architecture.The framework is flexible enough to implement in stages, and permits the overall risk management approach to evolve inresponse to organizational learning and the future needs of the organization.

Following are the high-level strategic initiatives that the Bank has undertaken for the effective implementation of OperationalRisk Management:

- Recruiting skilled resources for Operational Risk Management.

- Developing an operational risk management infrastructure.

- Determining the current state of key risks and their controls residing in each business unit.

- Developing policies, procedures and defining end-to-end information flow to establish a vigorous governance infrastructure.

- Implementing systems for data collection, migration, validation and retention for current and historical reference and calculation.

A consolidated Business Continuity Plan is being augmented for the Bank which encompasses roles and responsibilities,recovery strategy, IT and structural backups, scenario and impact analyses and testing directives.

There are several IT developments underway in the credit, market and operational risk areas. Specifically for operational riskmitigation and control, an IT infrastructure is being developed along with the other high-level initiatives, including process re-engineering and creating an inventory of risks and controls within the Bank. A methodology for Risk and Control SelfAssessment has been implemented at all core units of the Bank.



45. ISLAMIC BANKING BUSINESS

The Bank operates 6 (2009: 5) Islamic banking branches and 17 (2009: 15) Islamic banking windows. The statement offinancial position of the Bank's Islamic Banking Branches at December 31, 2010 is as follows:

2010 2009----- (Rupees in ‘000) -----

ASSETSCash and balances with treasury banks 389,582 208,180Balances with other banks 46,654 93,410Lendings to financial institutions 450,000 100,000Investments 2,884,260 1,563,953Financing and receivables- Murabaha 203,787 154,650- Musharaka 166,667 222,222- Diminishing Musharaka 90,888 261,259

461,342 638,131

Operating fixed assets including assets given on Ijarah 426,052 598,452Due from head office 83,725 -Other assets 297,649 548,396Total Assets 5,039,264 3,750,522

LIABILITIESBills payable 970 4,522Deposits and other accounts- Current accounts 724,750 429,412- Saving accounts 933,100 209,676- Term deposits 1,456,596 459,878- Deposits from financial institutions - remunerative 1,344,775 1,109,452

4,459,221 2,208,418Due to head office - 948,744Other liabilities 101,782 84,544

4,561,973 3,246,228NET ASSETS 477,291 504,294

REPRESENTED BYIslamic Banking Fund 681,000 681,000Accumulated losses (203,000) (174,404)

478,000 506,596Deficit on revaluation of assets (709) (2,302)

477,291 504,294



The profit and loss account of the Bank's Islamic Banking Branches for the year ended December 31, 2010 is as follows:

2010 2009----- (Rupees in ‘000) -----

Return earned 623,262 484,098Return expensed (308,015) (110,927)

315,247 373,171

(Provision) / Reversal for diminution in value of investments (69,091) 99,904Reversal / (Provision) against assets given on Ijarah 2,930 (6,177)

(66,161) 93,727Net return after provision 249,086 466,898

Other IncomeFee, commission and brokerage income 5,996 4,444Dividend income 9,871 12,169Income from dealing in foreign currencies 1,414 2,904Loss on sale of securities (4,750) (14,969)Other income 2,184 4,201Total other income 14,715 8,749

263,801 475,647Other ExpensesAdministrative expenses (289,921) (304,000)Other provision / write offs (2,476) -Total other expenses (292,397) (304,000)Net (loss) / profit for the year (28,596) 171,647

Accumulated losses brought forward (174,404) (346,051)Accumulated losses carried forward (203,000) (174,404)

2010 2009----- (Rupees in ‘000) -----

Remuneration to Shariah Advisor / Board 2,615 1,924

CHARITY FUNDOpening balance 20,732 19,609Addition during the period 840 6,629Payment / utilization during the period (9,780) (5,506)Closing balance 11,792 20,732



46. NON-ADJUSTING EVENT AFTER THE BALANCE SHEET DATE

The Board of Directors in its meeting held on February 21, 2011 has proposed a cash dividend in respect of 2010 of Rs.4per share (2009: cash dividend Rs.2.50 per share). In addition, the directors have also announced a bonus issue of Nil (2009:10%). These appropriations will be approved in the forthcoming Annual General Meeting. The unconsolidated financialstatements for the year ended December 31, 2010 do not include the effect of these appropriations which will be accountedfor in the unconsolidated financial statements for the year ending December 31, 2011.

47. DATE OF AUTHORIZATION

These financial statements were authorized for issue on February 21, 2011, by the Board of Directors of the Bank.

48. GENERAL

48.1 Comparatives

Comparative information has been re-classified, re-arranged or additionally incorporated in these unconsolidated financialstatements for the purposes of better presentation. Major reclassifications made are as follows:

- Rs.249.990 million has been reclassified from other income - others to mark-up/interest earned on advances to customers(income on ijarah financing)

- Rs.1,122.772 million has been reclassified from balance with SBP in foreign currency deposit account to balance with SBPin foreign currency current account

- Rs.1,650.896 million has been reclassified from borrowing in Pakistan to borrowing outside Pakistan.

- Unrealized mark-up held in suspense account amounting to Rs. 1,087.189 million has been merged with provision againstother assets.

48.2 Figures have been rounded off to the nearest thousand rupees unless otherwise stated.







[ Annexure 'A' as referred to in note 9.8 of Bank'sUnconsolidated Financial Statements ]

1) Particulars of Investment held in listed companies and modarbas

Investee Number of Paid up value Total paid up Costshares / per share / value

certificates held certificate

(Rupees) (Rupees in '000)Held for trading securities

Investment in ordinary shares

Engro Corporation Limited 20,000 10.00 200 3,912Lotte Pakistan PTA Limited 250,000 10.00 2,500 3,287Nishat Chunian Limited 50,000 10.00 500 1,150Pakistan Telecommunication Company Limited 30,000 10.00 300 579

8,928Available for sale securities


Adamjee Insurance Company Limited 2,006,000 10.00 20,060 269,001Arif Habib Corporation Limited 1,810,000 10.00 18,100 78,803Atlas Fund Of Funds 800,000 10.00 8,000 7,619Bank Al-Falah Limited 3,683,029 10.00 36,830 46,634BOC Pakistan Limited 338,202 10.00 3,382 44,831D.G. Khan Cement Limited 3,337,387 10.00 33,374 192,199Engro Polymer & Chemicals Limited 3,950,857 10.00 39,509 69,785Fauji Cement Company Limited 105,378,671 10.00 1,053,787 1,710,520First Dawood Mutual Fund 491,000 10.00 4,910 4,227Hira Textile Mills Limited 2,000,000 10.00 20,000 25,000IGI Investment Bank Limited 9,986,501 10.00 99,865 99,865Jahangir Siddiqui & Company Limited 2,000,000 10.00 20,000 91,564KASB Securities Limited 2,342,117 10.00 23,421 158,093Kohat Textile Mills Ltd 100,000 10.00 1,000 1,000Lotte Pakistan PTA Limited 2,489,771 10.00 24,898 33,593National Bank Of Pakistan 1,000,000 10.00 10,000 75,073Nishat Mills Limited 400,000 10.00 4,000 23,230Nishat Power Limited 3,359,679 10.00 33,597 53,318Pak Oilfields Limited 300,000 10.00 3,000 88,111Pakistan Petroleum Limited 523,148 10.00 5,231 113,580Pakistan State Oil Company Limited 1,003,000 10.00 10,030 301,337Pakistan Telecommunication Company Limited 650,000 10.00 6,500 32,800Sakrand Sugar Mills Limited 1,443,540 10.00 14,435 10,936Saritow Spinning Mills Limited 409,000 10.00 4,090 4,090Shell Pakistan Limited 106,672 10.00 1,067 24,966Visa Inc. 12,805 4,193.83 53,702 53,702DP World 138,528 8.56 1,186 15,422

3,629,299Investments in preference shares

Chenab Limited 7,889,482 10.00 78,895 78,895Masood Textile Mills Limited 11,000,000 10.00 110,000 110,000JSC Alliance Bank 95,720 3,892.00 275,082 275,082

463,977Investments in units of mutual funds

Atlas Stock Market Fund 17,364 100.00 1,736 5,000Faysal Asset Allocation Fund 406,890 500.00 203,445 38,386Faysal Balance Growth Funds 117,392 50.00 5,870 7,201Meezan Islamic Income Funds 2,209,003 50.00 110,450 114,075

164,662



2) Particulars of Investment held in unlisted companies

Investee Percentage Number of Breakup-up Paid up Cost Based Name of Chief Executiveof holding shares / value value on audited(%) certificates per share per share accounts as at

held

(Rupees) (Rupees) (Rupees in '000)Shareholding more than 10%

Pakistan Agricultural Storage & Services

Corporation Limited 18.3% 5,500 20,953 1,000 5,500 31-Mar-09 Maj Gen Sohail Shafkat

World Bridge Connect Inc. 18.1% 1,979,295 - - 77,606 - Gurojot Singh Khalsa

Cinepax Limited 14.6% 5,037,200 5 10 50,372 30-Jun-10 Arif Baigmohamed

Khushhali Bank Limited 11.7% 20,000,000 12 10 200,000 31-Dec-09 Ghalib Nishtar

Shareholding upto 10%

First Women Bank Limited 8.9% 2,532,000 37 10 21,100 31-Dec-09 Ms Shafqat Sultana

National Institutional Facilitation

Technologies (Pvt.) Limited 8.4% 914,093 53 10 1,527 30-Jun-10 M. M. Khan

National Investment Trust Limited 8.3% 79,200 12,310 100 100 30-Jun-10 Wazir Ali Khoja

News - VIS Credit Information

Services (Pvt.) Limited 4.7% 32,500 (2) 10 325 30-Jun-10 Faheem Ahmad

Techlogix International Limited 4.4% 4,455,829 3 0 50,703 31-Dec-09 Mr.Salman Akhtar &

Kewan Khawaja

(Co Chief Executive)

Equity Participation Fund 1.7% 27,000 665 100 2,700 31-Dec-08 Syed Shabahat Hussain

(Executive Director)

Kay Textile Mills Limited - 377,800 - 10 3,778 - -

SME Bank Limited 1.7% 3,975,003 10 10 26,950 31-Dec-09 R. A. Chughtai

SWIFT 0.0% 25 293,090 - 2,905 31-Dec-09 Lazaro Campos

MasterCard Incorporated 0.0% 461 2,324 0 0 31-Dec-09 Ajay Banga

The Benefit Company B.S.C © 0.0% 80 - - 1,817 - Abdul Wahid Janahi

445,382



3) Particulars of Bonds

Investee Terms of Redemption Rate of OutstandingPrincipal Interest/Profit Interest/Profit Amount

(Rupees in '000)Held for trading securities

Foreign securitiesAbu Dhabi Islamic Bank 2015 At Maturity Annually 3.746% 256,917DEWA 2016 At Maturity Semi Annually 6.375% 171,278Dexia Kommunalbank At Maturity Annually 1.625% 226,262Dubai Government 2015 EMTN At Maturity Semi Annually 6.700% 86,816HSBC Bank Middle East At Maturity Annually 3.000% 88,683IPIC GMTN Limited -2015 At Maturity Semi Annually 3.125% 192,005Qatar Int'l Finance - QTEL 2025 At Maturity Semi Annually 5.000% 254,245QNB Finance Limited 2015 At Maturity Semi Annually 3.125% 21,199

1,297,405

Available for sale securities

Government of Pakistan Islamic BondsGovt. of Pakistan Ijara Sukuk Bonds Maturity Bi-annually Weighted average yield 272,000

of 6M T-Bills plus 45 bpsGovt. of Pakistan Ijara Sukuk Bonds Maturity Bi-annually Weighted average yield 750,000

of 6M T-Bills plus 75 bpsGovt. of Pakistan Ijara Sukuk Bonds Maturity Bi-annually Weighted average yield 2,400,000

of 6M T-Bills plus 0 bpsMaturity Bi-annually Weighted average yield 700,000

of 6M T-Bill plus 0 bps4,122,000

Government of Pakistan - EurobondIslamic Republic of Pakistan - 2017 - Eurobond At Maturity Bi-annually 6.875% 3,938,516

3,938,516

Foreign securitiesAtlantic Finance Limited -2014 At Maturity Semi Annually 10.750% 276,163Bank of Bahrain & Kuwait -2015 USD Bonds At Maturity Semi Annually 4.500% 171,552DEWA Sukuk - AL IJARA FRN 2013 At Maturity Semi Annually 6M EBOR + 125bps 6,994,740Dubai Government AED FRN-2014 At Maturity Quarterly 3M EBOR + 370bps 514,134Dubai Govt EMTN-2015 USD At maturity BI Annually 6.700% 524,096Dubai Govt. USD FRN -2014 At Maturity Semi Annually 6.396% 76,224IPIC GMTN Limited -2020 At Maturity Semi Annually 5.000% 69,349Qatar DIAR Finance QSC-2020 At Maturity Quarterly 5.000% 429,937State of Qatar-2030 -USD Bonds At Maturity Quarterly 9.750% 1,424,175Tabreed 06 Financing Corporation FRN-2011 At Maturity Semi Annually 6M LIBOR + 125bps 900,359TAMWEEL Sukuk FRN 2013 At Maturity Quarterly 3M EBOR + 225bps 3,497,370

14,878,099





(Rupees in '000)

Held to maturity securities

Government of Pakistan Islamic BondsGovernment of Pakistan Sukuk Bond At Maturity Half Yearly 6M weighted avg. cutt off 30,000

yield of T-Bills plus 45 Bps30,000

Government of Pakistan - Guaranteed BondsWapda Bonds - Sukuk II At Maturity Half Yearly 6M KIBOR minus 25bps 51,399

51,399Sukuk BondsDawood Hercules Chemicals Limited ^ Half Yearly * 542,880Security Leasing Corporation Bullet Repayment Half Yearly Simple Avg. of 6 months 43,164

KIBOR ask sideB.R.R Guardian Modaraba 7 equal installments Half Yearly Simple Avg. of 6 months 100,000

starting from 2011 KIBOR ask sideK.S. Suleman Jee - Diminishing Musharika Quarterly Quarterly Simple Avg. of 3 months 303,997

KIBOR ask sideSitara Energy Limited Repayment after completion of 2 years Half Yearly Avg. rate of 6 Month 73,977

KIBOR ask side plus 1.15%Sitara Peroxide Limited Quarterly Quarterly Avg rate of 3 Months 281,250

KIBOR ask side plus 1.1%Pakistan International Airlines Ltd Half Yearly Half Yearly 6 month KIBOR plus 1.75% 890,000Islamic Sukkuk Bonds - Central Bank of Bahrain At maturity BI Annually 3.750% 313,471

2,548,739

^ Principal redemption on semi annual basis after expiry of twelve months.* Average of 6 months KIBOR ask side plus 120 bps. The rental bench mark rate will be subject to a floor of 3.5% and cap of 25% per annum.

Foreign securitiesJSC Alliance Bank - US $ Discount Bonds At Maturity Semi Annually 10.500% 185,756JSC Alliance Bank - US $ Recovery Notes At Maturity N/A N/A 283,812Srilanka Euro Bonds At Maturity Bi-annually 8.250% 1,714,696

2,184,2644) Particulars of Debentures


(Rupees in '000)Public SectorSDA - Cold Storage Haripur Overdue Overdue 12.50% 1,300SDA - Cold Storage Haripur Overdue Overdue 12.00% 825

Private SectorEffef Ind Limited Overdue Overdue 11.00% 1,017Effef Ind Limited Overdue Overdue 14.00% 379Khyber Textile Mills Limited Overdue Overdue 14.00% 395Morgah Valey Limited Overdue Overdue 11.00% 316Morgah Valey Limited Overdue Overdue 14.00% 160

4,392


[ Annexure 'A' as referred to in note 9.8 of Bank'sUnconsolidated Financial Statements For the year ended December 31, 2010 ]

5) Particulars of Investments in Term Finance Certificates

Investee No. of Paid up value Total Paid up Outstanding Name of Chief ExecutiveCertificates held per certificate value Amount

(Rupees) (Rupees in '000)

Unlisted - available for salePakistan International Airlines 1,700 5,000 8,500 8,495 Captain Muhammad Aijaz HaroonEngro Corporation Limited 7,000 100,000 700,000 702,241 Asad UmarFaysal Bank Limited 46,000 5,000 230,000 230,000 Naved A. Khan

940,736Listed - available for saleAllied Bank Limited TFC-II 53,000 5,000 265,000 273,208 Khalid A. SherwaniAzgard Nine Limited 60,000 5,000 300,000 224,694 Ahmed H. ShaikhBank Al Falah Limited TFC II 3,000 5,000 15,000 15,061 Sirajuddin AzizBank Al Falah Limited TFC III 26,200 5,000 131,000 133,307 Sirajuddin AzizBank Al Habib Limited TFC II 44,766 5,000 223,830 228,860 Abbas D. HabibBank Al Habib Limited TFC III 46,000 5,000 230,000 229,724 Abbas D. HabibEngro Corporation Limited TFC III 22,562 5,000 112,810 113,220 Asad UmarStandard Chartered Bank Pakistan Limited TFC II 4,000 5,000 20,000 5,000 Mohsin Ali Nathani

1,223,074Unlisted - held to maturityPower Holding (Pvt) Limited 4,615,800 5,000 23,079,000 23,079,000 Fazeel AsifPakistan International Airlines Corporation 408,867 5,000 2,044,335 2,043,518 Captain Muhammad Aijaz HaroonOrix Leasing Pakistan Limited 2,000 100,000 200,000 166,667 Teizoon KisatCrescent Textile Mills Limited 110,000 5,000 550,000 99,985 Muhammad AnwarAl Abbas Sugar Mills Limited 12,000 5,000 60,000 36,000 Shunaid QureshiDewan Farooq Spining Mills Limited 30,000 5,000 150,000 37,472 Dewan Abdul Baqi FarooquiSecurity Leasing Corporation Limited 40,000 5,000 200,000 60,937 Mohammad Khalid AliSME Leasing Limited 24,000 5,000 120,000 30,000 Mrs. Arjumand QaziFaysal Bank Limited 24,000 5,000 120,000 120,000 Naved A. KhanAl-Azhar Textile Mills Ltd 14 774,670 10,845 5,418 Mirza Muhammad Azhar BaigBachani Sugar Mills Ltd. - - - 25,500 Noorul Amin BachaniBentonite (Pakistan) Ltd 14 268,894 3,765 3,417 Khalid ShakilBlue Star Textile Mills Ltd 17 497,020 8,449 3,392 Chaudry Ghulam FaridCast-N-Link Products Limited 16 369,054 5,905 2,549 Nisar AhmedFrontier Ceramics Limited 46 370 17 1,965 Omer KhalidKhairpur Sugar Mills Limited 28 1,642,964 46,003 2,783 Mubeen JumaniRegency Textile Ltd 24 108,958 2,615 6,165 M. Iqtidar PervaizTanocrafts Ltd 22 156,227 3,437 537 Ashfaq HussainTharparkar Sugar Mills 5 1,754,000 8,770 26,238 Irfan Ali Shah

25,751,543Listed - held to maturityAllied Bank Limited TFC II 129,397 5,000 646,985 646,352 Khalid A. SherwaniAskari Commercial Bank Limited 43,525 5,000 217,625 217,146 Mohammad Rafiquddin MehkariAskari Commercial Bank Limited 40,000 5,000 200,000 199,600 Mohammad Rafiquddin MehkariBank Al Habib Limited 5,000 5,000 25,000 24,940 Abbas D. HabibFaysal Bank Limited (Formerly Royal Bank of Scotland) 22,000 5,000 110,000 82,346 Naved A. KhanSoneri Bank Limited 999 5,000 4,995 4,984 Atif A. BajwaIGI Investment Bank Limited 31,083 5,000 155,415 38,838 Syed Javed HassanPak Arab Fertilizer (Private) Limited 30,000 5,000 150,000 141,000 Fawad Ahmad Mukhtar

1,355,206

6) Particulars of Participation Term Certificates

Investee No. of Paid up value Total Paid up Outstanding Name of Chief ExecutiveCertificates held per certificate value Amount

(Rupees) (Rupees in '000)Brother Steel Industries Limited 17 108,024 2,144,313 2,144 Mian Yousuf AzizCrystal Chemicals Limited 14 145,933 3,897,000 3,897 Maqsood A. ShaikhLeatherite Limited 15 22,200 888,603 889 -Mass Dairies Limited 11 136,818 2,523,000 2,523 Mian Mohammad Akhtar PaganwalaMorgah Valey Limited 16 29,250 436,414 436 Air Marshal A. Rahim KhanPangrio Sugar Mills Limited 44 64,000 11,198,023 6,955 Aftab AhmedZamrock Fibers Glass Limited 12 32,833 2,358,000 2,358 -

19,202


[ Annexure 'A' as referred to in note 9.8 of Bank'sUnconsolidated Financial Statements For the year ended December 31, 2010 ]

7) Quality of Investments classified as Available For Sale (AFS)

Investee Market Value Credit Rating(Rupees in '000)


Adamjee Insurance Company Limited 175,525 AAArif Habib Corporation Limited 45,051 -Atlas Fund Of Funds 3,664 -Bank Al-Falah Limited 41,287 AABOC Pakistan Limited 30,810 -D.G. Khan Cement Limited 100,689 -Engro Polymer & Chemicals Limited 56,379 -Fauji Cement Company Limited 575,600 -First Dawood Mutual Fund 982 2-StarHira Textile Mills Limited 7,800 -IGI Investment Bank Limited 29,260 AJahangir Siddiqui & Company Limited 21,800 AAKASB Securities Limited 10,469 AKohat Textile Mills Ltd 140 -Lotte Pakistan PTA Limited 34,110 -National Bank Of Pakistan 76,820 AAANishat Mills Limited 25,668 A+Nishat Power Limited 54,528 AA-Pak Oilfields Limited 88,788 -Pakistan Petroleum Limited 113,602 -Pakistan State Oil Company Limited 296,066 AA+Pakistan Telecommunication Company Limited 12,636 -Sakrand Sugar Mills Limited 4,331 -Saritow Spinning Mills Limited 818 -Shell Pakistan Limited 22,211 -Visa Inc. 77,078 -DP World 7,438 -

1,913,550Investments in preference shares

Chenab Limited. 19,724 -Masood Textile Mills Limited 110,000 -JSC Alliance Bank - Unrated

129,724Investments in units of mutual funds

AMZ Plus Stock Fund 7,040 2-StarAtlas Stock Market Fund 26,827 3-StarFaysal Balance Growth Funds 8,926 5-StarMeezan Islamic Income Fund 113,366 A(f)

156,159




Investee Cost Credit Rating(Rupees in '000)

Investment in unlisted shares

Shareholding more than 10%Khushhali Bank Limited 200,000 A-World Bridge Connect Inc. 77,606 unratedCinepax Limited 50,372 unratedPakistan Agricultural Storage & Services Corporation Limited 5,500 unratedNational Investment Trust Limited 100 AM-DS

Shareholding upto 10%National Institutional Facilitation Technologies (Pvt.) Limited 1,527 unratedTechlogix International Limited 50,703 unratedSME Bank Limited 26,950 BBBFirst Women Bank Limited 21,100 BBB+Kay Textile Mills Limited 3,778 unratedSWIFT 2,905 unratedEquity Participation Fund 2,700 unratedNews - VIS Credit Information Services (Pvt.) Limited 325 unratedMasterCard Incorporated 0 unratedThe Benefit Company B.S.C © 1,817 unrated

445,382

Particulars Market Value Credit Rating(Rupees in '000)

Federal Government SecuritiesMarket Treasury Bills 60,159,266 Unrated - Govt SecuritiesPakistan Investment Bonds 17,586,966 Unrated - Govt Securities

77,746,232

Government of Pakistan Islamic BondsGovernment of Pakistan Ijara Sukuk 4,122,000 B- (S&P)

Government of Pakistan - Euro BondIslamic Republic of Pakistan - 2017 - Euro Bond 3,947,801 B- (S&P)

Foreign securitiesAtlantic Finance Limited -2014 278,112 B1 (Moody's)Bank of Bahrain & Kuwait Bond - 2015 171,870 A3 (Moody's)DEWA Sukuk Al Ijara FRN 6,749,924 Ba2 (Moody's)Dubai Government AED FRN-2014 552,743 Un-ratedDubai Govt EMTN-2015 USD 521,476 N/ADubai Govt. USD FRN -2014 84,372 Un-ratedIPIC GMTN Limited -2020 68,568 Aa3 (Moody's)Qatar DIAR Finance QSC-2020 428,224 AAState of Qatar-2030 -USD Bonds 1,348,894 AATabreed 06 Financing Corporation FRN-2011 696,881 CCC+ (S&P)TAMWEEL Sukuk 2013 FRN 2,710,462 Baa3 (Moody's)

13,611,525





Term Finance Cerificates

ListedAllied Bank Limited TFC-II 259,892 AA-Azgard Nine Limited 224,694 CCC(RW)Bank Al Falah Limited TFC II 14,795 AA-Bank Al Falah Limited TFC III 128,396 AA-Bank Al Habib Limited TFC II 222,418 AABank Al Habib Limited TFC III 230,149 AAEngro Chemicals Pakistan Limited - TFC III 110,494 AAStandard Chartered Bank Pakistan Limited TFC II 4,993 AAA

1,195,832Un ListedPakistan International Airlines 8,495 UnratedEngro Chemical Pakistan Limited 702,241 AAFaysal Bank Limited 230,000 AA-

940,736


[Annexu

re'B'

asref

erred

toinn

ote10.

7ofth

eBank's

uncon

solida

tedandc

onsol

idated

financia

lstate

ments

]

1ApexFabricsLimited

IftikharAhmed

2,640

2,535

-5,175

2,640

1,584

2,300

6,524

ChunianDisttt.Kasur

Nafees-Ur-Rehman

MubashirBaigBarlas

Mubarak-Un-Nisa

MuzafarBaigBarlas

NisarAhmed

NasreenMirza

2SagaSports(Pvt)Limited

MussararKhurshid

SufiKhurshidAhmed(Deceseed)

148,000

--

148,000

23,000

-64,900

87,900

DaskaRoad,Sialkot

Aanum

Khurshid


MehreenKhurshid


ZainabKhurshid


3HalaEnterprises

TahirJehangir

35200-1529763-1

FazalAhmed

33,080

25,615

-58,695

25,080

679

24,936

50,695

HalaGroup120/E/1,

FazalAhmed

35202-2657225-1

Sh.MianMuhammad

Gulberg-III,Lahore

JellaniJehangir

35202-0251493-1

TahirJehangir

SaleemaJehangir

35202-3541828-6

W/OTahirJehangir

MunezayJehangir

35202-8574317-2

TahirJehangir

4AkbaraliYousufali

SirajuddinJackwala

32301-7871996-1

AkberAli

4,117

4,850

-8,967

-3,067

9,250

12,317

RambhariStreet,

Moizuddin

42000-0386072-5

AkberAli

JodiaBazar,Karachi

Kulsoom

32301-9055437-6

W/OAkberAli

Nafeesa

42301-6871316-0

D/OAkberAli

AliAsghar

42301-9415323-5

AbassAli

42301-7891091-1

SirajJackwala

5AdamMotorCo.Ltd.

FerozuddinKhan

422013-052098-1

OmarDaraz

136,889

--

136,889

1,889

-60,428

62,317

DSU-10,11,

OmarKhan

422019-829197-9

FerozKhan

PakistanSteelIndustrialEstate,KhanMuhammadIlyas

42201-0447768-3

OmarDaraz

BinQasim,Karachi

ShahidHameedParacha

42301-7734356-7

A.HameedParacha

6SafaTextileTraders

FazalQadir(Prop)

6,000

--

6,000

--

1,166

1,166

10-BModelTownLahore

Detailsofloanwrite-offsofRs.500,000andabove

(PKRin'000)

Outstandingliabilitiesatthebeginningoftheyear

Writeoffduringtheyear

S.

Nameandaddress

Nameofindividuals/

CNICNumber

Father/Husband

Principal

Markup

Other

No.

partners/proprietors/

Name

Principal

Markup

Others

Total

writtenoff

writtenoff

financial

Total

relief

provided


[Annexu

re'B'

asref

erred

toinn

ote10.

7ofth

eBank's

uncon

solida

tedandc

onsol

idated

financia

lstate

ments

]


(PKRin'000)



S.

Nameandaddress

Nameofindividuals/

CNICNumber

Father/Husband

Principal

Markup

Other

No.


Name

Principal

Markup

Others

Total

writtenoff

writtenoff

financial

Total

relief

provided

7SajjadTextileMillsLtd

MehrAllahYar

38403-9701620-5

MehrAhmedYar

75,976

--

75,976

--

11,991

11,991

GulbergV,Lahore.

SultanMahmood

38403-2214042-1

MuhammadIqbal

M.AsimSajjad

35202-7748317-9

SajjadAslam

SalmanM.Aslam

35202-1081956-7

SajjadAslam

MuhammadAmjad

33100-3065319-1

MuhammadSaeed

MissBatoolZahra

35202-4509799-2

D/OGhulamHussain

AftabAnwar

38403-4061922-5

MuhammadAnwar

8AtlanticCarpetCorporation

AbdulSattarNasir

36302-0452624-9

305

302

-607

--

788

788

1347-C/IIOutsidePakGate,

MohallahKariDawoodKhan,

Multan

9AliPaper&BoardIndustriesLtd.

Farooq

AlamButt

GhulamNabiButt

5,581

2,070

-7,651

5,581

1,666

13,026

20,272

27-KMLahoreSheikhupura

SirajDinButt

N.A

Road,Lahore

AsadAkhtar

N.A

M.SaleemLone

N.A

SheikhAmirAli

Sh.DaulatAli

SheikhAmirHaider

Sh.AmirAli

SyedNisarAhmed

N.A

GhulamNabiButt

N.A

MaqboolAlamButt

GhulamNabiButt

SheikhYawarHussain

GhulamNabiButt

SheikhMahmudHussain

GhulamNabiButt

10StateTextilePvt.Ltd.

Shamsuzaman(Deceased)

AbdulMajeed(Deceased)

3,655

591

-4,246

--

12,974

12,974

3/3-C&B-3/75,

ShamsaZamaniBegum

W/OShamsuzaman

ShahFaisalColony,Karachi.

YasminZaman

Shamsuzaman

SafdarJamil(AliasAfshanJamil)

W/OS.Jamil

ChaudhryAbdulMajeed

ChaudhryghulamMohiuddin

11MalikJohar&Co

MalikMohammadJohar

17101-0301470-5

MalikMohammadUmerKhan

1,527

--

1,527

458

-133

591

KhanMainBazarAkoraKhattak


[Annexu

re'B'

asref

erred

toinn

ote10.

7ofth

eBank's

uncon

solida

tedandc

onsol

idated

financia

lstate

ments

]

12AlleyHosieryMillsLtd.

FazalElahiMalik(Deceased)

2,366

5,170

-7,536

2,366

2,491

2,680

7,536

26-DSandaRoad,Lahore

FahmidaMalik(Deceased)

SheikhGhulamNabi

Dr.BhawalDin

TasneemAhmed

13Al-MadinaDairyFarm

AliMuhammadSajid(Prop)

641-86-180578

MianKhanBaloch

1,483

1,855

-3,338

333

1,855

4,093

6,281

F-1220,SoomarVillage,

MuhammadHussain

508-29-187330

Haroon

HubRiverRoad,Karachi

(Mortgagor)(Deceased)

14KhalidFlourMills

MalikMuhammadKhalid

KhanewaliRoad,Near

(Prop.&Mortgagor)

31202-3240434-9

MalikMuhammadBuksh

13,000

--

13,000

--

5,179

5,179

WapdaGridStation,

Bahawalpur

15HabibJuteMillsLtd

AzharM.Peracha

35202-3050439-5

MuzzaffarDinPeracah

101,260

-3,184

104,444

3,411

-41,195

44,606

RehmanPlaza,4thFloor,

JavaidM.Peracha

42201-0268648-7

MuzzaffarDinPeracah

Shahrah-e-FatimaJinnah,

MunizeAzharPeracha

35202-2778956-0

AzharM.Peracha

Lahore.

16FaisalabadLubricantPvt.Ltd.PerwezSattar

91509-0129384-1

MuhammadAbdulSattar

16,404

1,197

-17,601

16,404

1,197

26,786

44,387

HAK#232/R,Resalewala

FarhatSattar

W/OPervwezSattar

RailwayStation,Faisalabad

17IndexCommoditiesPvt.Ltd.

SyedHussainAbbasRizvi

502-44-196787

GhulamHaider

30,749

--

30,749

30,749

-21,476

52,225

C-116,Block-2,

MuhammadAkbar

519-88-062463

QaziMuhammadAhmeddin

KDAScheme#5,Kehkashan,NaseemBazKhan

210-38-394291

GulBazKhan

Clifton,Karachi

18Munro&MillerPakistanLtd

YousufShaheenDaudPota

368

326

-694

--

1,599

1,599

M.SaleemDaudPota

K.A.DaudPota

19SaleemFlourMills

HajiSafarUddin

53404-4677397-3

PirBuksh

24,998

--

24,998

2,871

--

2,871

MirWahRoad,Jaffarabad,

SaleemAkhtar

53404-4678442-3

HajiSafarUddin

Quetta

NiazMuhammad

53404-1494561-5

MuhammadYakoob

FaizMuhammad

53202-8920388-9

FazalMuhammad


(PKRin'000)



S.

Nameandaddress

Nameofindividuals/

CNICNumber

Father/Husband

Principal

Markup

Other

No.


Name

Principal

Markup

Others

Total

writtenoff

writtenoff

financial

Total

relief

provided


[Annexu

re'B'

asref

erred

toinn

ote10.

7ofth

eBank's

uncon

solida

tedandc

onsol

idated

financia

lstate

ments

]

20FarukiPulpMillsLtd.

MianMajeedA.Faruki

34201-0453242-5

MianMohammadAkbarFaruki

17,550

19,234

-36,784

--

78,561

78,561

Mangowal,Tehsil&Distt.

Maj.®NasimFaruki

34201-0350518-3


Gujrat

KaleemA.Faruki

35201-1513228-7


Naeem

A.Faruki

35201-1425526-3


SalimA.Faruki

35202-7905561-1


AbdulSami

35202-4367455-7

MianAbdusSamad

ParvaizAslam

Faruki

35201-6788982-5

Aslam

RiazFaruki

21SialkotDairiesLtd.

ChaudhryJavedMehdi

ChaudhryMehdiKhan

2,320

918

-3,238

2,320

228

2,361

4,909

15-KM,BotraBadianaRoad,

ChaudhryMehdiKhan

ChaudhryGhulamMustafa

Village,Baidpur,Distt.Sialkot.EhsanElahiQureshi

AhmedDin

Kh.MuhammadAsif

Kh.MuhammadSafdar

MussaratAsif

W/OKh.MuhammadAsif

NaseemAkhtar

ChaudhryJavedMehdi

GhulamFatima

W/OChaudhryMehdiKhan

22CountyCraftPvt.Ltd.

RashadWaseem

300-92-187272

MuhammadZafarEllahi

674

77-

751

--

748

748

Shahabpur,POBox#523,

SanaRashad

300-31-265847

RashadWaseem

UgokiRoad,Sialkot.

NusratRashad

300-26-413252

RashadWaseem

23HayyabCollegeOfCommerce

MuhammadArifImran

35202-1675404-3

ShahbazDin

3,000

--

3,000

--

928

928

HassanBinSabatRoad,Kasur

24AutoCareIndustriesPvt.Ltd.

MukhtarAliSamejo

421-43-022543

GhulamNabi

4,187

1,189

-5,376

4,187

1,189

569

5,945

13/2/A,Khayaban-e-Tanzeem,SureshGangwani

42000-0554567-1

PermanadGangwani

DHA,Karachi.

25MedisureLaboratoriesPakistanPvt.Ltd.Dr.KaiserWaheed

42301-1167498-1

M.AnwarMagoon

26,454

--

26,454

--

8,786

8,786

SuperHighway,Karachi

Shabnum

Kaiser

42301-4465954-9

W/ODr.KaiserWaheed

RaheelKaiser

Dr.KaiserWaheed

26AssociatesFisheriesCorporation

M.M.A.Cheema(Deceased)

SaeedMohammadCheema

983

1,472

-2,455

983

245

1,226

2,455

3rdFloor,NadirHouse,

I.I.ChundrigarRoad,Karachi


(PKRin'000)



S.

Nameandaddress

Nameofindividuals/

CNICNumber

Father/Husband

Principal

Markup

Other

No.


Name

Principal

Markup

Others

Total

writtenoff

writtenoff

financial

Total

relief

provided


[Annexu

re'B'

asref

erred

toinn

ote10.

7ofth

eBank's

uncon

solida

tedandc

onsol

idated

financia

lstate

ments

]

27NasimSteelMills

MianMuhammadAslam

2,004

3,256

-5,260

2,004

3,256

11,506

16,766

MominpuraRoad

KishwarBegum

Daroghawala,

SaeedaRiaz

OldG.T.Road,Lahore

ZahidNaeem

MuhammadZamanKhan

28SyedMunawarShah

SyedMunawarShah

16101-0718794-7

SyedMuzzaffarShah

1,735

486

-2,221

1,735

486

-2,221

VillageShabazBachaKilli

MardanTehsil&District

Mardan.

29NationalWoolleenMills

HajiSherShah

702

66-

768

337

-2,901

3,238

ShershahPoint,

TariqJamil

UniversityRoad,

JehangirShah

DeraIsmailKhan

JehanzebKhan

MuhammadArshad

30Al-NoorEnterprises

WaseemMaqsood

41304-2921447-1

MaqsoodAhmedKhan

14,182

--

14,182

--

2,940

2,940

160/A,Block-CUnit#

2,FarhanMaqsood

41304-3981737-9

MaqsoodAhmedKhan

Latifabad,Distt.Hyderabad

31HospitexInternationalProductsLtd.

Dr.AmanullahKhan

LateAtaullahKhan

511

519

-1,030

511

383

2,759

3,653

Plot#A-421S.I.T.E.

Dr.MustafaShakeelRauf

M.MohiuddinAliRauf

Nooriabad,Sindh

MohiuddinAliRauf

LateAbuMuhammad

ShahbazShirazi

LateShiraziBamdad

AyeshaRauf

Dr.MustafaShakeelRauf

JamilaAmanullahKhan

W/ODr.AmanullahKhan

AsimaShirazi

W/OShahbazShirazi

32ScanRecyclingPakistanLtd.

Mazhar-Ul-Haq

MuhammadQasim

726

473

-1,198

582

921,844

2,518

HubIndustrialEstate,

AminMukaty

Lasbella,Balochistan

FauzanQasim

MuhammadQasim

IshtiaqAhmedKhan

M.SalimAhmed

M.B.Ahmed

KhurshidAhmed

33BismillahColdStorage

RiazAhmedCheema

34101-6631877-3

ChaudhryHidyatullah

2,622

--

2,622

--

664

664

KutchaPaya,Vanianwala,

SialkotByePass,Gujranwala


(PKRin'000)



S.

Nameandaddress

Nameofindividuals/

CNICNumber

Father/Husband

Principal

Markup

Other

No.


Name

Principal

Markup

Others

Total

writtenoff

writtenoff

financial

Total

relief

provided


[Annexu

re'B'

asref

erred

toinn

ote10.

7ofth

eBank's

uncon

solida

tedandc

onsol

idated

financia

lstate

ments

]

34ByteLinks

ShoukatZeb

122-88-203514

AurangZeb

2,591

--

2,591

--

3,141

3,141

Flat#17-21,ShoukatPlaza,

ShahzadShamim

122-59-368740

M.AshrafKhan

Shahrah-e-Hazara,Haripur

AdilZeb

AurangZeb

35ZahoorIndustries

Dr.BilalAhmed

33100-0783448-5

ZahoorAhmed

9,500

--

9,500

--

3,863

3,863

AdilChowk,SargodhaRoad,

NaseemZaheer

270-31-521137

W/OZahoorAhmed

Faisalabad

YasminBilal

514-58-124971

W/ODr.BilalAhmed

36MukhtarIndustries

Khawaja

MukhtarHassan(Deceseed)

2,531

--

2,531

2,531

-13,932

16,462

37UnitedWoodWorks&Allied

Ind.Pvt.Ltd.

KaleemullahKhan

LateZafarullahKhan

2,528

4,723

-7,251

--

16,958

16,958

37-GardenRoad,Saddar,

MariumKhan

W/OKaleemullahKhan

Karachi

38DhudhalPrecasting

MuhammadAbbas

34302-9276121-3

MuhammadKhan

3,746

--

3,746

778

-667

1,445

HafizabadRoad,JalalpurBhattian,

NearPeeloKharal,Hafizabad.

39TeejaysCorporationPvt.Ltd.

MianFazl-E-Ahmed

4,895

--

4,895

--

6,515

6,515

120-E/1,Gulberg-III,Lahore

MianTahirJahangir

35200-1529763-1

MianFazl-E-Ahmed

40ZafarIslam&Company

ZafarIslam(Proprietor)(Deceseed)

34606-2295752-3

AbdulGhani

499

-499

--

1,068

1,068

New

GhallahMandiSialkot

41AsgharAli

AsgharAli

36301-0707589-3

MuhammadRamzan

5,000

--

5,000

--

592

592

BastiManikWali,P.OGhaziPur

42Al-InayatInternational

MuhammadArif

33100-5610186-9

MuhammadRafiq

6,000

-6,000

--

855

855

198-A,SirSyedTown3,

DijkotRoad,Faisalabad

43Al-ArshEngineering

AbdulHayee(Deceseed)

33100-4887088-3

ChaudhryGhulamAhmed

2,000

--

2,000

--

811

811

AhmedLodge,

AhmedKamal

33102-1778457-5

AbdulHayee

KhayabanColony,Faisalabad

44MianIkramUlHaq

MianIkramUlHaq

42301-0886200-5

MianAsgharAli

37,051

4,060

-41,111

-1,367

-1,367

HouseNo.94,KhayabanaSehar,

Phae6,DefenceStreet28,DHA,

Karachi


(PKRin'000)



S.

Nameandaddress

Nameofindividuals/

CNICNumber

Father/Husband

Principal

Markup

Other

No.


Name

Principal

Markup

Others

Total

writtenoff

writtenoff

financial

Total

relief

provided


[Annexu

re'B'

asref

erred

toinn

ote10.

7ofth

eBank's

uncon

solida

tedandc

onsol

idated

financia

lstate

ments

]

45Aslam

&Company

Aslam

Hussain

35200-1549664-5

SheikhNazirHussain

17,103

--

17,103

--

1,145

1,145

SirajDinPark,AmirRoad,

Shadbagh,Lahore.

46YasmeenBegum

YasmeenBegum

42201-7448160-4

Nizamuddin

300

103

403

176

-464

640

O-44,SectorO,

Korangi,Karachi

47MuhammadAkbar

MuhammadAkbar

SarfrazKhan

2,900

--

2,900

-900

-900

Ghanipur

48AijazAhmed

AijazAhmed

41303-8738635-9

MuhammadImran

721

264

110

1,094

206

264

110

579

ByPassHyderabadHalaNaka

49MuhammadAzam

MuhammadAzam

42501-8176797-5

AliAsgharBhatti

676

151

273

1,100

155

151

273

580

PlotSurvy#16Road

#10CattleColony

50MukhtarAhmed

MukhtarAhmed

35201-1649246-3

LalDinButt

496

195

304

995

114

195

304

613

GulistanColonyNo1,

StNo5,WaltonRoad

51SyedZameerHaider

SyedZameerHaider

42201-5533300-5

SyedZulHussain

475

376

62913

75376

62513

HouseNo-69-BBlock-2

Gulshan-e-IqbalKarachi

52JavedHussain

JavedHussain

35202-1975429-3

DinMuhammad

500

448

34983

110

448

34593

KachiKothi,AllaqaNawabSahib,

2-KM

,Raiw

indRoadLahoreLahore

53MuhammadAslam

MuhammadAslam

33100-6786141-5

2,715

681

53,401

-646

4650

P-216,StreetNo.15,

ModelTownB,NearFawaraChowk,

54IbrarHussain

IbrarHussainNaqvi

42301-8646639-1

3,411

759

-4,170

-759

-759

Imaging

TechnologiesPvtLtd

WheelHouse30-CNo.1

BaddarCommercialAreaPhase5


(PKRin'000)



S.

Nameandaddress

Nameofindividuals/

CNICNumber

Father/Husband

Principal

Markup

Other

No.


Name

Principal

Markup

Others

Total

writtenoff

writtenoff

financial

Total

relief

provided


[Annexu

re'B'

asref

erred

toinn

ote10.

7ofth

eBank's

uncon

solida

tedandc

onsol

idated

financia

lstate

ments

]

55Hameeda

Hameeda

42101-1616682-6

SaleemAbbas

450

3726

513

450

3726

513

AlHamd

GeneralStoreS

hopNo

5AdeelMiniSquareBlock7

AishaManzil

FBArea,Karachi

56ShaguftaJabee

ShaguftaJabee

42301-4631902-6

RashidAhmed

431

5736

524

431

5736

524

SSTraders1StFloorHNo

34/1

Khayaban-E-Tanzim

Phase5DHA,

Karachi

57Tabassum

Shafiq

Tabassum

Shafiq

35202-2114013-9

ShMShafiq

455

4416

515

455

4416

515

SultanMotors24/3JailRoad

58FahadAkhtar

FahadAkhtar

35202-1714514-5

KhushiM

Akhtar

477

2418

518

477

2418

518

FahadCorporation179

BlockMGulbergIII

59FayyazAhmedMinhas

FayyazAhmedMinhas

37405-2850156-7

EjazAhmedMinhas

490

4119

550

490

4119

550

MinhasChemist13-ChishitiabadSaidpur

60ShamraizKhan

ShamraizKhan

37405-3325896-3

MuhammadIshaq

499

6218

580

499

6218

580

HassanGarmentsShop

NoB-343

Satellite

Town

Comm

ercialMarket,Rawalpindi

61TalibHussain

TalibHussain

37405-0273616-7

ShamshadHussain

498

4744

588

498

4744

588

H-P-988D

/1MohallahA

ngatpura

SaidPurRoadNearTariqBakery,Rawalpindi

62FaisalRehmat

FaisalRehmat

35201-3564531-9

MalikRehmatAli

480

4822

550

480

4822

550

RehmatMarketHarbansPuraCantt

63IrfanBQureshi

IrfanBQureshi

61101-5867215-3

AbdulGhafoor

499

6522

586

499

6522

586

CafeZoukCanodiesInternatioaS9/10

IjazC

entreMainBoulevardGulbergIII

64MuhdNaveed

MuhdNaveed

42201-0552784-7

MuhammadNaseem

490

4219

552

490

4219

552

Shop

#2E-18/5Khayaban-E-JamiCliftonNearFurniture4U


(PKRin'000)



S.

Nameandaddress

Nameofindividuals/

CNICNumber

Father/Husband

Principal

Markup

Other

No.


Name

Principal

Markup

Others

Total

writtenoff

writtenoff

financial

Total

relief

provided


[Annexu

re'B'

asref

erred

toinn

ote10.

7ofth

eBank's

uncon

solida

tedandc

onsol

idated

financia

lstate

ments

]

65AzizAnjum

AzizAnjum

33100-8536155-5

ChSaifUrRehman

497

4021

558

497

4021

558

Anjum

WeavingFactory

P-1421StNo3FiazAbad

66MalikMohammadAyub

MalikMohammadAyub

35202-2680499-9

MalikHassanAhmed

481

3519

535

481

3519

535

MadinaCorporation8/9

AliParkThokarNiazBaig

MultanRoad

67KashifAli

KashifAli

35201-2615522-7

SaleemAkbarFarooqi

433

5224

509

433

5224

509

AkzInternational71-C-3

GulbergIII

68ZeeshanFakhar

ZeeshanFakhar

42201-0320956-7

FakarUddin

494

4622

561

494

4622

561

Khawaja

Electronics

AmirElec

Mark

Shop

No1112SurahabKhata

RoadSaddar

69MohammadFarooq

MohammadFarooq

42201-7061810-3

AbdulJabbar

476

6520

561

476

6520

561

ParekhP

lasticEntGroundFloorAm

-4MadinaB

ldgBurnsR

oad

70ZulfiqarMehmood

ZulfiqarMehmood

35200-1454124-1

ChRiasatAli

494

5926

579

494

5926

579

InterSystemE-14/5Kora

ChowkWaltonRoad

71HumayunSiddiq

HumayunSiddiq

42201-0361123-1

MohammadSiddiq

478

3718

533

478

3718

533

ShopNo-9AmijeeValijeeBldg

Shahrah-E-LiaqatNew

Challi

72ChaudhryAbidAli

ChaudhryAbidAli

35200-1510430-9

ChGhullamMurtaza

498

5824

580

498

5824

580

ChaudhryAbidAliSteelTraders27/A

PecoRoadBadamiBaghNrBaf

73ChaudhryAzharHameed

ChaudhryAzharHameed

35201-8820070-3

HameedUllah

500

5321

573

500

5321

573

MadinaM

otorsC

haraghia

Market

DefenceChowkW

altonRoad


(PKRin'000)



S.

Nameandaddress

Nameofindividuals/

CNICNumber

Father/Husband

Principal

Markup

Other

No.


Name

Principal

Markup

Others

Total

writtenoff

writtenoff

financial

Total

relief

provided


[Annexu

re'B'

asref

erred

toinn

ote10.

7ofth

eBank's

uncon

solida

tedandc

onsol

idated

financia

lstate

ments

]

74Naeem

Sadiq

Naeem

Sadiq

33100-0866720-5

SadiqAli

498

5516

570

498

5516

570

NewArifZariHouseS

ultaniaCentre

Shop

No18StNo

7/10MunshiMuhalla

75MuhammadRizwan

MuhammadRizwan

42301-3516141-9

AbdulAziz

-54

478

532

-54

478

532

MusicInnPlotNo

10-CPhase2

ExtSunsetLane4DHA

76AdeelRazzaq

AdeelRazzaq

33100-4119030-5

AbdulRazzaq

498

6320

581

498

6320

581

AhmadAdeelClothR

oomNo

142NdFloor

AminPlazM

uhammadiMakkiTrailBazar

77MohammadIqbalKhan

MohammadIqbalKhan

42301-1061080-9

MLatifKhan

478

1418

509

478

1418

509

TniGroupPlotNo

26-C1StFloor

Stadium

LaneNo

1DHAPhase5

78RahatJaved

RahatJaved

33100-0868498-5

AbdulSattar

440

5718

515

440

5718

515

QaiserEnterprisesP-163

SabziMandi

79MuhammadNazim

MuhammadNazim

35202-7365915-3

MohdNazir

478

5919

557

478

5919

557

MalikNoorAutos85-Lytton

RoadLahore

80ImranADhamee

ImranADhamee

42301-3716809-3

AmirHussainDhamee

474

822

503

474

822

503

GacS

hippingP

vtLtd

GroundFloorU/67

TradeTowerAbdullahHaroonRoadSaddar

81RajaMTariq

RajaMTariq

37401-4151088-1

RajaMuhammadAshraf

490

4319

553

490

4319

553

NewModrenWayDryC

leanerShopNo

11MehranCentreB

lk2P

lotNo

10-AClifton

82QaisarShahzad

QaisarShahzad

61101-9641807-9

SMuhammadSharif

491

4019

550

491

4019

550

JamilPerfumery

ShNo

01NoneBoharBazar

83MalikShahzad

MalikShahzad

35202-1410699-7

MalikMuhammad

458

6019

537

458

6019

537

M-YModelHigh

School36Em

press

ParkBibiPakD

aman


(PKRin'000)



S.

Nameandaddress

Nameofindividuals/

CNICNumber

Father/Husband

Principal

Markup

Other

No.


Name

Principal

Markup

Others

Total

writtenoff

writtenoff

financial

Total

relief

provided


[Annexu

re'B'

asref

erred

toinn

ote10.

7ofth

eBank's

uncon

solida

tedandc

onsol

idated

financia

lstate

ments

]

84TariqMehmood

TariqMehmood

35202-8576098-9

GhulamRasool

472

2413

509

472

2413

509

RanaAndSonsGarmentsPlotNo46

StNo

4ToheedPark,Mugalpura

85HussainAliKhan

HussainAliKhan

42201-0431076-9

MohammadAliKhan

485

5122

558

485

5122

558

PowerrexC

omputers,A-148Blk2

Gulshan-E-IqbalNearRubMedicalCentre

86Moazzam

Masaud

Moazzam

Masaud

35202-2808334-5

TajUddin

489

4020

550

489

4020

550

PentagonE

ngineers

TradersOfficeN

o234

AbidChamberFatima

JinahRoadLahore

87HaroonUrRashid

HaroonUrRashid

35201-1583333-1

MianAbdulHamid

408

5739

504

408

5739

504

MAHRiceMillPvtLtd

433M

Block

ModelTownE

xtension

88MalikMuhammadAli

MalikMuhammadAli

35201-1617927-1

MalikBarkatAli

498

6220

579

498

6220

579

AlHamd

MobilesShop

No18RoyalArcade

FerozpurRoadQanchiAm

erSidhu

89ZahirKhitab

ZahirKhitab

42101-9818544-5

SharkandBadshah

603

132

27762

603

132

27762

AsmacsAgencyM-14Mezzanine

Floor

CornicheR

esidencBlk2

Clifton

90NazarUlIslam

NazarUlIslam

42201-0778608-5

QamarulIslam

479

2530

533

479

2530

533

SaifEnterpries

A-756Eo

Society

AbulHasanAsphahniRoad

91SohailAlamKhan

SohailAlamKhan

37405-0246757-7

SardarAlamKhan

1,152

300

991,551

1,152

300

991,551

PhotoS

tatPointShop

No2B

asement

NazarPlazaC

ommercialMarket

92AdnanJLari

AdnanJLari

42101-4192171-9

JavedAnwerLari

458

5917

534

458

5917

534

UnitedBankLim

itedDeptSales

Manager

8ThFlorSlicB

ldgNo

1IChu

93FarhanAnjum

FarhanAnjum

42201-9977204-9

Anjum

Mushtaq

461

5554

570

461

5554

570

FarhanLeatherM-86MznFloorM

unir

Parad

iseBlock17G

ulistan-E-Johar


(PKRin'000)



S.

Nameandaddress

Nameofindividuals/

CNICNumber

Father/Husband

Principal

Markup

Other

No.


Name

Principal

Markup

Others

Total

writtenoff

writtenoff

financial

Total

relief

provided


[Annexu

re'B'

asref

erred

toinn

ote10.

7ofth

eBank's

uncon

solida

tedandc

onsol

idated

financia

lstate

ments

]

94ShahidRashid

ShahidRashid

42501-6563666-7

ChoudhryAbdul

400

9540

535

400

9540

535

H#94-B,Street#7I-10/3

Islamabad

95SohailFarooq

SohailFarooq

42301-4807797-3

MohammadFarooq

499

6623

587

499

6623

587

FarooqSonsSuit9059TFlr

AlRaheem

ToweIIChundrigarRoad

96ShoaibAhmad

ShoaibAhmad

35201-1488777-9

MianGhulamAhmed

432

2747

506

432

2747

506

SSGroupOfCompanies31Km

MultanRoadNearSundarLahore

97MuhammadJafferGM

MuhammadJafferGM

42000-0422308-7

GulMohammadEssa

452

5421

528

452

5421

528

UniversalTractorPakistanPvt.Ltd172-G

AhmedShoppingM

allPechsB

lock-2

MainTariqRoad

98ShaikhRehanEllahi

ShaikhRehanEllahi

42201-0855118-5

ShaikhMushtaq

457

6021

538

457

6021

538

Link.N

etFranchise

Shop

No2G

roundFloor

GulTowerIIChundrigarRoad

99GhousBakhsh

GhousBakhsh

42201-0430019-9

WahidBakhsh

875

231

401,146

875

231

401,146

ShfayInterNationalShopNo

30Navy

HeightsNearKallaPul

100

MuhammadAkram

MuhammadAkram

33100-7997516-1

SafdarAzeem

499

5624

579

499

5624

579

DataSteelWorksShop

ShNo

201N

aya

Pathak84/AResalaRoadSamanabad

101

BilalIqbal

BilalIqbal

33100-1585852-3

SheikhMuhammadIqbal

447

5014

511

447

5014

511

Al-MustafaCentreB

asementShop#7

Street#

3Montgomery

Bazar

102

AzamAli

AzamAli

35202-1195924-5

Nazam

Din

498

6420

582

498

6420

582

NizamFabrics

AndZariS

hopNo

201-G

LibertyPlazaLibertyMarketGulberg

III

103

SadiqNadeem

SadiqNadeem

35202-9020972-9

SheikhManzoor

479

3117

527

479

3117

527

StarCarriersRahim

SteelMillS

top

Shera

KoBundRoad


(PKRin'000)



S.

Nameandaddress

Nameofindividuals/

CNICNumber

Father/Husband

Principal

Markup

Other

No.


Name

Principal

Markup

Others

Total

writtenoff

writtenoff

financial

Total

relief

provided


[Annexu

re'B'

asref

erred

toinn

ote10.

7ofth

eBank's

uncon

solida

tedandc

onsol

idated

financia

lstate

ments

]

104

MuhammadShiraz

MuhammadShiraz

33100-6494863-5

ShMuhammadIqbal

500

5215

567

500

5215

567

SbInternationalOffN

o7Basement

AlMustafaCenterStreetNo

3MantgomryBazar

105

MuhammadRashid

MuhammadRashid

42201-0483211-3

ShaikhMYousuf

483

6421

567

483

6421

567

Fabricon407/BAnam

Classic

4ThFloor

DCHS

Shahrah-E-Fasial

106

TanveerAhmed

TanveerAhmed

37405-7470450-5

HajiMuhammadAslam

450

3518

503

450

3518

503

FutureTechOffNo

2JavedPlaza

MezzFloorBlueArea

107

SheikhAmir

SheikhAmir

37405-9171508-1

SheikhMAsgher

442

5418

514

442

5418

514

AsgharTradersAndMillStoreSh

No352

Babo

MohallahS

addar

108

NadeemBhurgri

NadeemBhurgri

42301-2039704-3

CaptA

QBhurgri

499

1122

532

499

1122

532

UblNationalSalesCenter

SchonCircleBrClifton

109

SyedHassanMehdi

SyedHassanMehdi

42201-9474869-9

SyedIftikharMehdi

429

6922

519

429

6922

519

Shop

NoM1-

11HongKongCentre

DrDaudPotaRoadSaddar

110

ImranFarooqChema

ImranFarooq

Chema

34603-1792850-9

ChFarooqAhmed

498

4924

571

498

4924

571

Recto

SportsPvtLtdDaskaR

oadSialkot

111

MansourHussain

MansourHussain

61101-4385324-5

ManzoorHussain

499

2930

557

499

2930

557

NationalCommercialTradersFlatNo8

3RdFloorUnitedCentreS

hamsabad

112

MJunaidArshad

MJunaidArshad

35202-2384945-9

MianMuhammadArshad

484

1618

518

484

1618

518

47-C-1AgroSquareShadmanMarket

113

MuhammadIjaz

MuhammadIjaz

35202-2413206-1

MuhammadAshraf

455

4318

515

455

4318

515

IqraM

obileAndCustomerCenteShop

No11,30

ZaildarRoadUm

erMarketIchra


(PKRin'000)



S.

Nameandaddress

Nameofindividuals/

CNICNumber

Father/Husband

Principal

Markup

Other

No.


Name

Principal

Markup

Others

Total

writtenoff

writtenoff

financial

Total

relief

provided


[Annexu

re'B'

asref

erred

toinn

ote10.

7ofth

eBank's

uncon

solida

tedandc

onsol

idated

financia

lstate

ments

]

114

IftikharAhmed

IftikharAhmed

42301-0996052-1

AbdulGani

476

5619

552

476

5619

552

NewAbrar

JewellersPlotNo281-AGround

FlrCorpGateMehmoodabadMainRoad

115

JamSaleemAli

JamSaleemAli

42301-3496663-3

NawabJamSaddiqAliKhan

474

5248

574

474

5248

574

SangharFarm

sSangharFarmsJam

GothSanghar

116

SaifUlMansoorKhan

SaifUlMansoorKhan

42000-0560374-1

MansoorKhan

479

4719

545

479

4719

545

SaifElectronicsShopNo

G-11Motiwala

Mansion

SarmadRoadSaddar

117

Azeem

WarisKhan

Azeem

WarisKhan

42201-8633557-5

KhanKamalWaris

448

6023

532

448

6023

532

AlWarisTradersHNo

175-J

Block2Pechs

118

ChaudhryGQumais

ChaudhryGQumais

61101-3216595-5

ChNizam

UlDin

483

6519

567

483

6519

567

AfacoHNo

731StNo

74None

119

ArabianGulfCompany

AbdulMohsinAliHassan

AliHassan

4,453

769

-5,223

4,453

769

4,453

9,676

P.O.Box1922AlAin

NazarHussainKhan

SaduKhan

120

PaperMate.

H.E.ShaikhS

audKhalidSultan(Sponsor)

4,174

1,516

-5,689

4,174

1,516

3,101

8,790

P.O.Box.23257,Sharjah

VinayKumarTandon

121

AliaContractingCoLlc

AbdullahGhaloom

Abdullah

-1,865

-1,865

-1,865

-1,865

P.O.Box.45427

AbuDhabi

MohammadMoinuddinGhori

122

HamadAzanMohammadAlMazroui

HamadAzanMohammadAlMazroui

38,821

--

38,821

38,821

-24,785

63,606

P.O.Box.5025AbuDhabi

123

KhizarAbdullahAhmed.

KhizarAbdullahAhmed.

979

1,585

-2,565

979

1,585

956

3,521

P.O.Box.791,AbuDhabi

124

GulfGroupInformation

IssaAmanObaidAman

-4,080

-4,080

-4,080

-4,080

P.O.Box.46964,20,AbuDhabiAsaadAlAmiri


(PKRin'000)



S.

Nameandaddress

Nameofindividuals/

CNICNumber

Father/Husband

Principal

Markup

Other

No.


Name

Principal

Markup

Others

Total

writtenoff

writtenoff

financial

Total

relief

provided


[Annexu

re'B'

asref

erred

toinn

ote10.

7ofth

eBank's

uncon

solida

tedandc

onsol

idated

financia

lstate

ments

]

125

AlAmlaqEngineeringLlc

MohammadAbdulKarim

7,578

5,503

-13,080

7,578

5,503

117

13,197

P.O.Box.26423

Sharjah

InayatAli

9040-60-1505447

MuhammadShafi

126

AlMajidEngg.&SupplyCo

MarronKharaish

-12,940

-12,940

-12,940

-12,940


127

VirkHouseTradingLlcDubai

MohammadJawadHabibJaffar

50,199

6,505

-56,704

50,199

6,505

71,463

128,167

P.O.Box.4284,Dubai

ChaudhryHabibullahVirk

293-41-098837

ChaudhryKhushiMuhammadVirk

ShehryarAliVirk

293-91-328840

ChaudhryHabibullahVirk

128

PakArabEnterprises

ZaalBinSohailMufta

1,376

4,523

-5,899

1,376

4,523

1,376

7,275

P.O.Box.77,RasAlKhaimah

YounisKhan

129

AlRashidBuildingMaterial

MohammadHassanYousaf

3,288

7,531

-10,819

3,288

7,531

3,288

14,106


130

SereenEstablishment

Mohamm

adAhmedHamidAlHumaidi

20,285

5,013

-25,298

20,285

5,013

23,759

49,056

P.O.Box.4231,Dubai

AhmedMohammadIsmail

517-56-148247

MohammadIsmail

ZakriaMohammadIsmail

513-58-057091

MohammadIsmail

131

DelmonTransport

AbdullahMirzaHassanAlRahma

36,699

25,577

-62,277

36,699

25,577

-62,277

P.O.Box.52864,Dubai

ShahJahanGhulamSarwar

228-53-384058

132

AlSaigalcoTradingCo

AbdulRahimMohammadAlMulla

42,784

23,013

-65,797

42,784

23,013

53,696

119,493

P.O.Box.7101,Dubai

SurendarLalMakhanLal

MakhanLal

133

AgadeerGeneralTrading

AhmedRashidAbdullah

8,837

3,777

-12,614

8,837

3,777

14,945

27,559

P.O.Box.20018,Ajman

RajaSafdarHussain

244-42-044038

AkhbarHussain

134

WrsmTradingCoLlc

JumaDarwishSalem

56,821

9,047

-65,867

56,821

9,047

54,349

120,216

P.O.Box.5305,Dubai

AbdulRashid

GhulamMohyuddin

AbdulWaheed

GhulamMohyuddin

AbdulSaeed

GhulamMohyuddin

AbdulMajid

GhulamMohyuddin

135

HajiFurniture

MohammadAkram

301-63-154005

AllahRakha

233

3,054

-3,288

233

3,054

-3,288

P.O.Box.1422,Dubai


(PKRin'000)



S.

Nameandaddress

Nameofindividuals/

CNICNumber

Father/Husband

Principal

Markup

Other

No.


Name

Principal

Markup

Others

Total

writtenoff

writtenoff

financial

Total

relief

provided


[Annexu

re'B'

asref

erred

toinn

ote10.

7ofth

eBank's

uncon

solida

tedandc

onsol

idated

financia

lstate

ments

]

136

ChemlinkLlc

MajeedJaffarHabib

-4,034

-4,034

-4,034

746

4,780

P.O.Box.80610,Dubai

MehdiSadegh

SyedMohsinAwais

271-60-005704

SyedOwaisAwais

137

AlMehranGolds

SultanMohammedAli

6,225

3,474

-9,699

6,225

3,474

6,225

15,925


RiazAhmed

358-64-013176

AdamKhanKhatak

138

AmericanFurnitureCentre

JumaAliKhalfan

1,959

1,795

-3,754

1,959

1,795

2,052

5,806

OldAirportRoad,AbuDhabi

139

MajorKhalidAbdullaA.Rehman

MajorKhalidAbdullaA.Rehman

303

816

-1,119

303

816

303

1,422

P.O.Box.12863Dubai

140

InternationalLighting

DecorationCo.

MohammadAhmedKhalfan


MohammadManzer

-1,632

-1,632

-1,632

-1,632

141

NoorWaliKhanTradingLlc

MuhayerKhamisAlMazroui

3,381

--

3,381

3,381

-2,705

6,085

P.O.Box.8906,AlAin

NoorWaliKhan

SherWali

142

DeltaStarIndustriesL.L.C.

AliMohammedMotiwala.

42201-5543809-1

AbdulSattarMotiwala(Late)

39,307

--

39,307

4,967

-171

5,138

Plot#2&3,SectorA-1,Kepz

SalimMotiwala

42301-0815377-9


YakubMotiwala.

42201-6693980-3


OmarMotiwala

42301-0899462-1

SalimMotiwala

143

AbdulMajidEbrahimPalangi

AbdulMajidEbrahimPalangi

1,610

488

722,170

1,610

488

722,170

P.O.Box.150,Sharjah

144

RaviKumar

RaviKumar

409

358

70837

409

358

70837


145

JoeMarTrinidadAlFaro

JoeMarTrinidadAlFaro

1,243

278

-1,521

1,243

278

-1,521


146

SergioNituralSena

SergioNituralSena

4,221

1,336

565,613

4,221

1,336

565,613

P.O.Box.15258,AlAin

147

HareshArjandasChandiramaniHareshArjandasChandiramani

1,194

261

261,481

1,194

261

261,481

P.O.Box.12407,Dubai


(PKRin'000)



S.

Nameandaddress

Nameofindividuals/

CNICNumber

Father/Husband

Principal

Markup

Other

No.


Name

Principal

Markup

Others

Total

writtenoff

writtenoff

financial

Total

relief

provided


[Annexu

re'B'

asref

erred

toinn

ote10.

7ofth

eBank's

uncon

solida

tedandc

onsol

idated

financia

lstate

ments

]

148

AasitRatanlalParekh

AasitRatanlalParekh

520

317

65902

520

317

65902

P.O.Box.51591,Dubai

149

SamerHekmatMeho

SamerHekmatMeho

302

134

86522

302

134

86522

P.O.Box.33761,Dubai

150

MarthaArcenasManzanilla

MarthaArcenasManzanilla

566

369

39975

566

369

39975


151

AbdulKharim

AbdulVahab

AbdulKharim

AbdulVahab

1,750

477

-2,228

1,750

477

-2,228

P.O.Box.37564,Dubai

152

JalalEmad

JalalEmad

1,330

579

531,962

1,330

579

531,962

P.O.Box.1038,Dubai

153

MahaMohamedFouadMohamed

MahaMohamedFouadMohamed

1,444

457

231,924

1,444

457

231,924

P.O.Box.1038,Dubai

154

SarpudeenAbbasAlias

Alias

Settu

SarpudeenAbbasAliasAliasSettu

1,453

812

262,291

1,453

812

262,291

P.O.Box.3258,Duabi

155

KhalidMahmood

KhalidMahmood

1,622

574

772,272

1,622

574

772,272

P.O.Box.17580,AlAin

156

AllanDimalantaBansil

AllanDimalantaBansil

1,368

287

-1,655

1,368

287

-1,655

P.O.Box1038,Dubai

157

ThekiniyedathPrasannakumar

ThekiniyedathPrasannakumar

584

685

-1,269

584

685

-1,269

P.O.Box.6512,Dubai

158

DanyalKraketAdnan

DanyalKraketAdnan

1,582

651

392,272

1,582

651

392,272


159

ChinChinJoyH.Atienza

ChinChinJoyH.Atienza

497

328

37862

497

328

37862


160

JawedAli

JawedAli

388

136

30554

388

136

30554

P.O.Box.251876,Dubai


(PKRin'000)



S.

Nameandaddress

Nameofindividuals/

CNICNumber

Father/Husband

Principal

Markup

Other

No.


Name

Principal

Markup

Others

Total

writtenoff

writtenoff

financial

Total

relief

provided


[Annexu

re'B'

asref

erred

toinn

ote10.

7ofth

eBank's

uncon

solida

tedandc

onsol

idated

financia

lstate

ments

]

161

ZulfiqarAliTahir

ZulfiqarAliTahir

664

278

-942

664

278

-942

P.O.Box.894,Dubai

162

ShrawanaKumarShukla

ShrawanaKumarShukla

1,743

451

262,220

1,743

451

262,220

P.O.Box.6891,Dubai

163

YudaraMalithDeSilvaManam

YudaraMalithDeSilvaManam

1,279

312

-1,591

1,279

312

-1,591

P.O.Box.6891,Dubai

164

ShahulHameedSyeduAli

ShahulHameedSyeduAli

540

222

56819

540

222

56819

P.O.Box.22577,Dubai

165

ChackoThomas

ChackoThomas

560

187

-747

560

187

-747

P.O.Box.286,Dubai

166

HasanAhmedAzeri

HasanAhmedAzeri

2,421

592

-3,013

2,421

592

-3,013


167

BrianJoseAysonBarin

BrianJoseAysonBarin

394

227

-622

394

227

-622

P.O.Box.30439,Dubai

168

MuhammadJunaidBawany

MuhammadJunaidBawany

1,701

826

-2,527

1,701

826

-2,527

P.O.Box.1123,Dubai

169

NihalChristopherPaul.F.Maln

NihalChristopherPaul.F.Maln

1,691

464

582,213

1,691

464

582,213


170

MohamedNayefOmarNourEldinB

esiso

MohamedNayefOmarNourEldinBesiso

656

220

26902

656

220

26902


171

MustafaTuren

MustafaTuren

656

356

651,078

656

356

651,078


172

ReginoSantaderLaders

ReginoSantaderLaders

1,636

376

-2,012

1,636

376

-2,012


173

ElmerNagalesDelaCruz

ElmerNagalesDelaCruz

3,519

574

-4,092

3,519

574

-4,092



(PKRin'000)



S.

Nameandaddress

Nameofindividuals/

CNICNumber

Father/Husband

Principal

Markup

Other

No.


Name

Principal

Markup

Others

Total

writtenoff

writtenoff

financial

Total

relief

provided


[Annexu

re'B'

asref

erred

toinn

ote10.

7ofth

eBank's

uncon

solida

tedandc

onsol

idated

financia

lstate

ments

]

174

IqbalAhmedAbdulRehman

IqbalAhmedAbdulRehman

1,215

914

-2,129

1,215

914

-2,129

P.O.Box.3258,Dubai

175

QaziGhollamHussain

QaziGhollamHussain

543

198

30771

543

198

30771


176

ArvindRaina

ArvindRaina

758

232

-990

758

232

-990


177

ShoukathPasha

ShoukathPasha

408

229

-637

408

229

-637

P.O.Box.32852,Dubai

178

LafirMohamedGhouse

LafirMohamedGhouse

1,270

353

531,676

1,270

353

531,676

P.O.Box.135,Sharjah

179

MohammadHatmian

MohammadHatmian

784

743

-1,527

784

743

-1,527

P.O.Box.17000,Dubai

180

FasmeerKuillathayiPullantholFasmeerKuillathayiPullanthol

1,460

297

-1,757

1,460

297

-1,757

P.O.Box.894,Dubai

181

OscarDavidOchiengOgutu

OscarDavidOchiengOgutu

811

355

-1,166

811

355

-1,166

P.O.Box.30439,Dubai

182

JuanNestorRamosMateo

JuanNestorRamosMateo

1,626

1,246

282,899

1,626

1,246

282,899

P.O.Box.3258,Dubai

183

LorenzoTengNulud

LorenzoTengNulud

3,108

796

-3,905

3,108

796

-3,905

P.O.Box.16870,Dubai

184

AsharafKunnummal

AsharafKunnummal

1,403

496

351,934

1,403

496

351,934

P.O.Box.16870,Dubai

185

MohamedIsmailNishar

MohamedIsmailNishar

1,011

786

421,839

1,011

786

421,839

P.O.Box.3258,Dubai

186

LiaquathHussainWahab

LiaquathHussainWahab

1,091

878

842,053

1,091

878

842,053



(PKRin'000)



S.

Nameandaddress

Nameofindividuals/

CNICNumber

Father/Husband

Principal

Markup

Other

No.


Name

Principal

Markup

Others

Total

writtenoff

writtenoff

financial

Total

relief

provided


[Annexu

re'B'

asref

erred

toinn

ote10.

7ofth

eBank's

uncon

solida

tedandc

onsol

idated

financia

lstate

ments

]

187

AmparoBananaAmpey

AmparoBananaAmpey

937

275

601,272

937

275

601,272


188

ChamindaJayanathKuruppuG

ChamindaJayanathKuruppuG

1,028

338

281,394

1,028

338

281,394

P.O.Box.16876,Dubai

189

AmirMassoudAhmedMoezziAmirMassoudAhmedMoezzi

350

147

26523

350

147

26523

P.O.Box.27237,Dubai

190

MuhammadMobeen

MuhammadMobeen

427

376

77879

427

376

77879

P.O.Box.99999,Dubai

191

AnicetoMoralesGabinete

AnicetoMoralesGabinete

748

448

491,245

748

448

491,245


192

EdmonDeJesusMagat

EdmonDeJesusMagat

989

643

321,665

989

643

321,665

P.O.Box.47814,Dubai

193

MargeeJoyGarcesa

MargeeJoyGarcesa

1,215

374

211,609

1,215

374

211,609


194

RamilSantosParinas

RamilSantosParinas

357

534

109

1,000

357

534

109

1,000

P.O.Box.44486

AbuDhabi

195

AghiadWaelKujan

AghiadWaelKujan

490

310

49849

490

310

49849

P.O.Box.60772,Dubai

196

SajidMahmood

SajidMahmood

748

212

23983

748

212

23983


197

GeetaAasitParekh

GeetaAasitParekh

493

191

53737

493

191

53737

P.O.Box.51591,Dubai

198

MuhammedAqeelKhan

MuhammedAqeelKhan

371

120

53544

371

120

53544

P.O.Box.42457,Dubai

199

AndoorNilathKunjuMMusthafaAndoorNilathKunjuMMusthafa

1,443

783

-2,226

1,443

783

-2,226

P.O.Box.3258,Dubai


(PKRin'000)



S.

Nameandaddress

Nameofindividuals/

CNICNumber

Father/Husband

Principal

Markup

Other

No.


Name

Principal

Markup

Others

Total

writtenoff

writtenoff

financial

Total

relief

provided


[Annexu

re'B'

asref

erred

toinn

ote10.

7ofth

eBank's

uncon

solida

tedandc

onsol

idated

financia

lstate

ments

]

200

KochikkaranKaderAbdulMajeedKochikkaranKaderAbdulMajeed

1,105

801

211,927

1,105

801

211,927

P.O.Box.2149,Dubai

201

LoretoJr.SanchezSunga

LoretoJr.SanchezSunga

624

853

-1,477

624

853

-1,477

P.O.Box.3258,Dubai

202

DennisVejeranoCreencia

DennisVejeranoCreencia

2,004

640

-2,644

2,004

640

-2,644

P.O.Box.47814,Dubai

203

AbdulLatiffMohamedZahir

AbdulLatiffMohamedZahir

1,733

894

-2,627

1,733

894

-2,627

P.O.Box.3258,Dubai

204

YuvrajGurung

YuvrajGurung

288

472

53813

288

472

53813


205

MohamedJiffryMohamedZifnaasMohamedJiffryMohamedZifnaas

1,653

423

492,125

1,653

423

492,125


206

MohammedMahmoodAbdulKareem

MohammedMahmoodAbdulKareem

840

279

-1,119

840

279

-1,119

P.O.Box.18484,Dubai

207

PoojaryAshokaGopala

PoojaryAshokaGopala

1,485

568

-2,053

1,485

568

-2,053

P.O.Box.3258,Dubai

208

AnwarHasenShaikasan

AnwarHasenShaikasan

1,119

824

-1,943

1,119

824

-1,943

P.O.Box.3258,Dubai

209

AkbarAliUdumangani

AkbarAliUdumangani

891

910

-1,801

891

910

-1,801

P.O.Box.3258,Dubai

210

WilfredoMirandaCasalme

Wilfredo

MirandaCasalme

960

268

-1,228

960

268

-1,228


211

RickManalotoNitug

RickManalotoNitug

508

256

125

889

508

256

125

889


212

AbdulRaufEdhi

AbdulRaufEdhi

581

173

26779

581

173

26779



(PKRin'000)



S.

Nameandaddress

Nameofindividuals/

CNICNumber

Father/Husband

Principal

Markup

Other

No.


Name

Principal

Markup

Others

Total

writtenoff

writtenoff

financial

Total

relief

provided


[Annexu

re'B'

asref

erred

toinn

ote10.

7ofth

eBank's

uncon

solida

tedandc

onsol

idated

financia

lstate

ments

]

213

AliIbrahimJama

AliIbrahimJama

509

125

30664

509

125

30664


214

MShafaqatShazad

MShafaqatShazad

509

113

28650

509

113

28650


215

KamalKanayalalAhuja

KamalKanayalalAhuja

472

117

26614

472

117

26614

P.O.Box.8799,Dubai

216

AmapolaArnocoMayuga

AmapolaArnocoMayuga

278

282

-560

278

282

-560

P.O.Box.202088AlAin

217

JaikishanShyamdasGamnani

JaikishanShyamdasGamnani

354

129

63546

354

129

63546

P.O.Box.46444,Dubai

218

MuhammadNadeemHameedPuri

MuhammadNadeemHameedPuri

392

124

26542

392

124

26542

P.O.Box.40132,Ajman

219

AbdullahMohammadRamkaniAbdullahMohammadRamkani

376

9726

499

376

9726

499

P.O.Box.15469,Dubai

220

HashimMohamm

adJaddouaA

lQurnen

HashimMohammadJaddouaAlQurnen

2,925

2,175

565,155

2,925

2,175

565,155

P.O.Box.15258,AlAin

221

NeliaSantezoTejero

NeliaSantezoTejero

2,214

895

-3,109

2,214

895

-3,109

P.O.Box.15258,AlAin

222

ClaroJrRioRamirez

ClaroJrRioRamirez

1,520

1,352

-2,872

1,520

1,352

-2,872

P.O.Box.3258,Dubai

223

IbrahimRamosUri

IbrahimRamosUri

1,851

529

582,438

1,851

529

582,438


224

ThandiyakkalR.RadhaKrishnan

ThandiyakkalR.RadhaKrishnan

2,295

1,143

193,456

2,295

1,143

193,456

P.O.Box.65948,Dubai

225

MuhammadAbdiIsmail

MuhammadAbdiIsmail

2,655

749

-3,403

2,655

749

-3,403

P.O.Box.51900

AbuDhabi


(PKRin'000)



S.

Nameandaddress

Nameofindividuals/

CNICNumber

Father/Husband

Principal

Markup

Other

No.


Name

Principal

Markup

Others

Total

writtenoff

writtenoff

financial

Total

relief

provided


[Annexu

re'B'

asref

erred

toinn

ote10.

7ofth

eBank's

uncon

solida

tedandc

onsol

idated

financia

lstate

ments

]

226

MeiaadJalalA.J.J.AlBoloushiMeiaadJalalA.J.J.AlBoloushi

5,999

2,306

-8,305

5,999

2,306

-8,305

P.O.Box.6525,Dubai

227

AnicetaACempron

AnicetaACempron

1,057

521

-1,578

1,057

521

-1,578


228

Ram

Shankar

Ram

Shankar

235

404

51690

235

404

51690


229

BhagwanSadhwani

BhagwanSadhwani

300

207

21528

300

207

21528

P.O.Box.21967,Ajman

230

DiptiMahendraNagindas

DiptiMahendraNagindas

320

114

86520

320

114

86520

P.O.Box.669,Sharjah

231

MoryaniChandruGobindram

MoryaniChandruGobindram

373

105

26503

373

105

26503

P.O.Box.34186,Dubai

232

MuruganVeeramuthu

MuruganVeeramuthu

1,537

381

-1,918

1,537

381

-1,918


233

RemeoContrerasLoalhati

RemeoContrerasLoalhati

1,404

405

-1,809

1,404

405

-1,809

P.O.Box.16785,Dubai

234

Sa-AdudinMacarimbangAla

Sa-AdudinMacarimbangAla

502

551

511,104

502

551

511,104

P.O.Box.12189,Dubai

235

IrfanHaider

IrfanHaider

541

376

931,010

541

376

931,010

P.O.Box.1123,Dubai

236

ShakeelAhmedKhan

ShakeelAhmedKhan

313

409

26747

313

409

26747

P.O.Box.158,Dubai

237

BeverlyMendonzaBalingit

BeverlyMendonzaBalingit

430

264

-694

430

264

-694

P.O.Box.30439,Dubai

238

OswaldMilenJohnson

OswaldMilenJohnson

363

150

2515

363

150

2515

P.O.Box.51304,Dubai


(PKRin'000)



S.

Nameandaddress

Nameofindividuals/

CNICNumber

Father/Husband

Principal

Markup

Other

No.


Name

Principal

Markup

Others

Total

writtenoff

writtenoff

financial

Total

relief

provided


[Annexu

re'B'

asref

erred

toinn

ote10.

7ofth

eBank's

uncon

solida

tedandc

onsol

idated

financia

lstate

ments

]

239

JuraijPunnakkantakkath

JuraijPunnakkantakkath

1,140

465

211,626

1,140

465

211,626

P.O.Box.13001,Dubai

240

PoikayilMathaiGinumon

PoikayilMathaiGinumon

1,084

467

261,577

1,084

467

261,577

P.O.Box320,Dubai

241

RashidMehboob

RashidMehboob

630

440

211,091

630

440

211,091

P.O.Box.7631,Dubai

242

HaniSalahE.IbrahimMohammad

HaniSalahE.IbrahimMohammad

712

219

32964

712

219

32964

P.O.Box.1184,Dubai

243

ChidambaramShenbagaKumarChidambaramShenbagaKumar

643

185

56884

643

185

56884


243

HilarionaRiveraAblalle

HilarionaRiveraAblalle

1,342

570

-1,912

1,342

570

-1,912


244

MuhammadYousafSaeedi

MuhammadYousafSaeedi

567

5723

647

567

5723

647

P.O.Box.31308,Dubai

245

EyattuP.A.RehmanBinshad

EyattuP.A.RehmanBinshad

1,173

534

421,749

1,173

534

421,749

P.O.Box.61450,Dubai

246

ShubanAli

ShubanAli

551

249

-800

551

249

-800


247

MuhammadImranChaudhry

MuhammadImranChaudhry

364

192

67622

364

192

67622


248

MaryJoseph

MaryJoseph

2,659

691

-3,350

2,659

691

-3,350

P.O.Box.62870,Dubai

250

AgnesMandocdoc

AgnesMandocdoc

1,675

367

-2,043

1,675

367

-2,043

P.O.Box.62532,Dubai

251

RedaAbdelKader.

RedaAbdelKader.

1,260

894

-2,155

1,260

894

-2,155

P.O.Box.17000,Dubai


(PKRin'000)



S.

Nameandaddress

Nameofindividuals/

CNICNumber

Father/Husband

Principal

Markup

Other

No.


Name

Principal

Markup

Others

Total

writtenoff

writtenoff

financial

Total

relief

provided


[Annexu

re'B'

asref

erred

toinn

ote10.

7ofth

eBank's

uncon

solida

tedandc

onsol

idated

financia

lstate

ments

]

252

JorgeGaluraNulud

JorgeGaluraNulud

276

169

63507

276

169

63507

P.O.Box.2222,Dubai

253

AdnanAliSyed

AdnanAliSyed

2,326

399

462,771

2,326

399

462,771


254

MildredInocencioMercado

MildredInocencioMercado

959

911

100

1,970

959

911

100

1,970


255

MartinVargheese

MartinVargheese

224

324

49597

224

324

49597


256

AmritBahadurKhadka

AmritBahadurKhadka

592

184

46822

592

184

46822


257

AliAbd

MohammadDhaif

AliAbd

MohammadDhaif

1,936

1,012

-2,949

1,936

1,012

-2,949


258

JosephineOrbanan

JosephineOrbanan

186

247

118

551

186

247

118

551


259

MdAzizulHaque

MdAzizulHaque

530

327

104

961

530

327

104

961


260

JohnPius

JohnPius

1,408

671

-2,079

1,408

671

-2,079


261

RajMohammadHajaMydeen

RajMohammadHajaMydeen

1,134

929

372,100

1,134

929

372,100


262

WimalaWeeraLiyanag

WimalaWeeraLiyanag

1,210

406

-1,616

1,210

406

-1,616


263

HamzaMannanthara

HamzaMannanthara

431

7642

549

431

7642

549


264

AudrylaneRubia

AudrylaneRubia

521

345

74939

521

345

74939



(PKRin'000)



S.

Nameandaddress

Nameofindividuals/

CNICNumber

Father/Husband

Principal

Markup

Other

No.


Name

Principal

Markup

Others

Total

writtenoff

writtenoff

financial

Total

relief

provided


[Annexu

re'B'

asref

erred

toinn

ote10.

7ofth

eBank's

uncon

solida

tedandc

onsol

idated

financia

lstate

ments

]

265

GloriaCedillaSepe

GloriaCedillaSepe

762

524

771,362

762

524

771,362


266

DennisTanFaldan

DennisTanFaldan

1,188

476

-1,664

1,188

476

-1,664


267

DamodaranNepal

DamodaranNepal

500

137

-637

500

137

-637


268

CherylCabalarEcaldre

CherylCabalarEcaldre

958

366

-1,324

958

366

-1,324


269

ChristianMangawangBautista

ChristianMangawangBautista

892

443

104

1,439

892

443

104

1,439


270

SaidAghaf

SaidAghaf

1,347

482

-1,829

1,347

482

-1,829

P.O.Box.34216,Dubai

271

MarilynAntonioRuanto

MarilynAntonioRuanto

1,138

590

561,784

1,138

590

561,784


272

NelsonFrancoMunsayac

NelsonFrancoMunsayac

387

421

-808

387

421

-808


273

KunhickadanKunnummal

KunhickadanKunnummal

249

295

-544

249

295

-544


274

JavedAkhtarRaja

JavedAkhtarRaja

571

275

-846

571

275

-846


275

SurendraSharma

SurendraSharma

581

353

671,001

581

353

671,001


276

BijuOommenArayalUmmoottilBijuOommenArayalUmmoottil

4,216

839

-5,056

4,216

839

-5,056

P.O.Box.1000AlAin

277

SalimGhulamFarid

SalimGhulamFarid

456

319

63838

456

319

63838

P.O.Box.80771,Dubai


(PKRin'000)



S.

Nameandaddress

Nameofindividuals/

CNICNumber

Father/Husband

Principal

Markup

Other

No.


Name

Principal

Markup

Others

Total

writtenoff

writtenoff

financial

Total

relief

provided


[Annexu

re'B'

asref

erred

toinn

ote10.

7ofth

eBank's

uncon

solida

tedandc

onsol

idated

financia

lstate

ments

]

278

NarayananKarimbuValappil

NarayananKarimbuValappil

340

299

-639

340

299

-639

P.O.Box27029,AbuDhabi

279

MichelleDonesPancho

MichelleDonesPancho

827

400

371,264

827

400

371,264


280

SyedSajidAli

SyedSajidAli

679

443

651,187

679

443

651,187

P.O.Box.66774,Dubai

281

MohammedAbdulMoid

MohammedAbdulMoid

524

444

371,005

524

444

371,005

P.O.Box.29,Sharjah

282

AqeelAhmed

AqeelAhmed

628

276

88993

628

276

88993


283

ElsaCristalesArcigal

ElsaCristalesArcigal

596

324

58978

596

324

58978

P.O.Box.30439,Dubai

284

MohammadAm

anullaSabrideen

MohammadAmanullaSabrideen

405

337

39781

405

337

39781

P.O.Box2915AbuDhabi

285

UsmanGaniMusbah

UsmanGaniMusbah

214

507

37758

214

507

37758

P.O.Box.1123Dubai

286

GaneshKumarEramath

GaneshKumarEramath

118

421

56595

118

421

56595

P.O.Box.13001,Dubai

287

FelicidadTalvoPimentel

FelicidadTalvoPimentel

2,426

823

903,339

2,426

823

903,339

P.O.Box370AbuDhabi

288

LeelaratneBopeKananamge

LeelaratneBopeKananamge

1,959

1,102

393,101

1,959

1,102

393,101

P.O.Box3668

AbuDhabi

289

UmmerKuttyMohamdeesa

UmmerKuttyMohamdeesa

2,024

628

-2,652

2,024

628

-2,652

P.O.Box3668AbuDhabi

290

SankaranBhadran

SankaranBhadran

1,751

637

372,425

1,751

637

372,425

P.O.Box4017AbuDhabi


(PKRin'000)



S.

Nameandaddress

Nameofindividuals/

CNICNumber

Father/Husband

Principal

Markup

Other

No.


Name

Principal

Markup

Others

Total

writtenoff

writtenoff

financial

Total

relief

provided


[Annexu

re'B'

asref

erred

toinn

ote10.

7ofth

eBank's

uncon

solida

tedandc

onsol

idated

financia

lstate

ments

]

291

AbdulSaleamAppattillath

AbdulSaleamAppattillath

1,193

694

811,969

1,193

694

811,969

P.O.Box1065AlAin

292

RobinaLasolaMartin

RobinaLasolaMartin

1,333

469

601,863

1,333

469

601,863

P.O.Box23727AlAin

293

HamdanAm

edMohamm

adKhalidAlafar

HamdanAmedMohammadKhalidAlafar

1,117

93-

1,210

1,117

93-

1,210

P.O.Box1969AlAin

294

MohammadRamzan

MohammadRamzan

568

461

211,050

568

461

211,050

P.O.Box.80771,Dubai

295

RuelIlaoCuevas

RuelIlaoCuevas

673

204

-877

673

204

-877

P.O.Box.5530,Dubai

296

AbdulNaserAliHussein

AbdulNaserAliHussein

543

243

70856

543

243

70856

P.O.Box46231AbuDhabi

297

AliFawziAbdelRahimNatour

AliFawziAbdelRahimNatour

137

672

42851

137

672

42851


298

SunilVarikkayilHeriya

Ayyappan

SunilVarikkayilHeriyaAyyappan

331

388

26744

331

388

26744

P.O.Box.54372,Dubai

299

SultanMapillaiThambi

SultanMapillaiThambi

363

340

35737

363

340

35737

P.O.Box.22577Dubai

300

AkberAliQureshi

AkberAliQureshi

460

230

-690

460

230

-690

P.O.Box372AbuDhabi

301

GhanemJumaaKhalfaAlRomaithi

GhanemJumaaKhalfaAlRomaithi

633

-51

684

633

-51

684


302

PoonkaranJohnBiju

PoonkaranJohnBiju

300

302

58660

300

302

58660


303

SunnyJohn

SunnyJohn

258

380

-638

258

380

-638

P.O.Box.2623,Dubai


(PKRin'000)



S.

Nameandaddress

Nameofindividuals/

CNICNumber

Father/Husband

Principal

Markup

Other

No.


Name

Principal

Markup

Others

Total

writtenoff

writtenoff

financial

Total

relief

provided


[Annexu

re'B'

asref

erred

toinn

ote10.

7ofth

eBank's

uncon

solida

tedandc

onsol

idated

financia

lstate

ments

]

304

RajaHaroonSaleemKayani

RajaHaroonSaleemKayani

283

281

51614

283

281

51614


305

SyedMussaratHussainShah

SyedMussaratHussainShah

137

470

-607

137

470

-607

P.O.Box.27016,Dubai

306

SaoodMohammedHassan

Saood

MohammedHassan

1,841

194

282,063

1,841

194

282,063


307

HassanJumaAhmed

HassanJumaAhmed

659

119

56834

659

119

56834


308

ObaidAlMansouri

ObaidAlMansouri

217

324

70610

217

324

70610

P.O.Box.1367,Dubai

309

ShaikhaKhazalSaedKhair

ShaikhaKhazalSaedKhair

411

8749

547

411

8749

547

P.O.Box.1367,Dubai

310

RajendranKalliyottuM.AcharyRajendranKalliyottuM.Achary

1,038

806

100

1,944

1,038

806

100

1,944


311

NajeeruDeenSayedHameed

NajeeruDeenSayedHameed

1,316

206

-1,522

1,316

206

-1,522


312

Md.AbulKalam

Md.AbulKalam

922

583

-1,505

922

583

-1,505

P.O.Box640,AbuDhabi

313

WalidFawzy

WalidFawzy

1,143

266

951,504

1,143

266

951,504

P.O.Box3167AbuDhabi

314

RayammarVeettilPulipambilAbdul

RayammarVeettilPulipambilAbdul

578

535

-1,113

578

535

-1,113

P.O.Box97,AbuDhabi

315

EliasBairam

EliasBairam

464

598

-1,062

464

598

-1,062


316

VazhavilaK.T.John

VazhavilaK.T.John

460

332

72864

460

332

72864



(PKRin'000)



S.

Nameandaddress

Nameofindividuals/

CNICNumber

Father/Husband

Principal

Markup

Other

No.


Name

Principal

Markup

Others

Total

writtenoff

writtenoff

financial

Total

relief

provided


[Annexu

re'B'

asref

erred

toinn

ote10.

7ofth

eBank's

uncon

solida

tedandc

onsol

idated

financia

lstate

ments

]

317

MuhammadIqbal

MuhammadIqbal

427

316

72815

427

316

72815

P.O.Box.42,Dubai

318

NoushadPayayil

NoushadPayayil

363

321

49732

363

321

49732

P.O.Box.12848,Dubai

319

ReynaldoGaluraNulud

ReynaldoGaluraNulud

368

279

21667

368

279

21667

P.O.Box.2222,Dubai

320

KhadimHussain

KhadimHussain

180

342

-522

180

342

-522

P.O.Box1828,AlAin

321

SidiOuldMohamedSalem

MrSidiOuldMohamedSalem

3,499

889

-4,388

3,499

889

-4,388

P.O.Box7644

AlAin

322

FayazGhafoor

FayazGhafoor

1,957

1,586

603,604

1,957

1,586

603,604

P.O.Box.1123,Dubai

323

KamalEldinHamadaA.R.ShalabiKamalEldinHamadaA.R.Shalabi

2,101

1,316

633,479

2,101

1,316

633,479


324

MohammedIsrail

MohammedIsrail

1,302

1,123

882,513

1,302

1,123

882,513

P.O.Box.3258,Dubai

325

MohanVettiyattilKarappandy

MohanVettiyattilKarappandy

1,045

394

-1,439

1,045

394

-1,439

P.O.Box9138

AbuDhabi

326

GhasemChakeri

GhasemChakeri

832

561

-1,393

832

561

-1,393

P.O.Box.29,Sharjah

327

RiyazAbdulShukoorSab

RiyazAbdulShukoorSab

406

259

-665

406

259

-665

P.O.Box.1123,Dubai

328

ChristianIgnacio

ChristianIgnacio

278

310

-588

278

310

-588


329

AmjadAli

AmjadAli

357

185

-542

357

185

-542

P.O.Box124,AbuDhabi


(PKRin'000)



S.

Nameandaddress

Nameofindividuals/

CNICNumber

Father/Husband

Principal

Markup

Other

No.


Name

Principal

Markup

Others

Total

writtenoff

writtenoff

financial

Total

relief

provided


[Annexu

re'B'

asref

erred

toinn

ote10.

7ofth

eBank's

uncon

solida

tedandc

onsol

idated

financia

lstate

ments

]

330

ImranRafiq

ImranRafiq

209

325

-534

209

325

-534

P.O.Box.12752,Dubai

331

NissarThalayillath

NissarThalayillath

1,568

299

123

1,990

1,568

299

123

1,990


332

AliKaramaSaeedSaleh

AliKaramaSaeedSaleh

2,667

1,015

-3,682

2,667

1,015

-3,682


333

SubairMohammedRafi

SubairMohammedRafi

740

761

531,554

740

761

531,554

P.O.Box.6891,Dubai

334

MohammedJavidIqbal

MohammedJavidIqbal

789

570

-1,358

789

570

-1,358


335

DoaaZiadBouMosieh,

DoaaZiadBouMosieh

489

243

-732

489

243

-732

P.O.Box.888,Dubai

336

AwnEissaAlsayegh

AwnEissaAlsayegh

533

2297

653

533

2297

653


337

Annamalai.S.SenthilKumar

Annamalai.S.SenthilKumar

-614

-614

-614

-614


338

MehboobAlam

Mehboob

Alam

809

1,104

261,938

809

1,104

261,938

P.O.Box.3258,Dubai

339

ThomasJoseKavampurathu

ThomasJoseKavampurathu

1,069

407

-1,475

1,069

407

-1,475

P.O.Box.7271,Dubai

340

RatheeshAriyakkaraRajeev

RatheeshAriyakkaraRajeev

582

467

771,126

582

467

771,126

P.O.Box.54372,Dubai

341

RafiqRamzanAliPanjwani

RafiqRamzanAliPanjwani

626

47168

842

626

47168

842


342

FahadSalehAlmawti

FahadSalehAlmawti

653

316

969

653

--

653

343

RicardoSarteBaqorio

Ricardo

SarteBaqorio

457

221

678

457

--

457


(PKRin'000)



S.

Nameandaddress

Nameofindividuals/

CNICNumber

Father/Husband

Principal

Markup

Other

No.


Name

Principal

Markup

Others

Total

writtenoff

writtenoff

financial

Total

relief

provided


[Annexu

re'B'

asref

erred

toinn

ote10.

7ofth

eBank's

uncon

solida

tedandc

onsol

idated

financia

lstate

ments

]

344

AdrianaNatalia

AdrianaNatalia

1,349

532

1,881

1,328

--

1,328

345

ManalYousifFarah

ManalYousifFarah

549

88637

549

--

549

346

JonathanGasper

JonathanGasper

503

220

724

503

--

503

347

GaneshNavaneethaNambi

GaneshNavaneethaNambi

1,137

145

1,282

1,137

--

1,137

348

JamalHussainSaeed

JamalHussainSaeed

1,936

461

2,397

1,936

--

1,936

349

JuliaPowell

JuliaPowell

-1,022

1,022

-943

-943

350

ShaileshKumar

ShaileshKumar

531

227

758

531

--

531

351

AmeerM

ohammadHammooda

AmeerM

ohammadHammood

1,073

1,097

2,169

1,072

--

1,072

352

TuanTaraam

Jaliel

TuanTaraam

Jaliel

525

113

638

523

--

523

353

ChempattuvilaiMasillamony

ChempattuvilaiMasillamony

435

289

723

433

--

433

354

CamiloJrDailegTolention

CamiloJrDailegTolention

579

399

978

579

--

579

355

HasanAbdulrahmanAbuBakr

HasanAbdulrahmanAbuBakr

415

98513

413

--

413

356

RamyalalDeSilvaDeva

RamyalalDeSilvaDeva

379

204

583

379

--

379

357

NomanKhanZulfiqarKhan

NomanKhanZulfiqarKhan

425

150

575

424

--

424

358

RodrickJosephDemicoli

RodrickJosephDemicoli

950

840

1,790

946

--

946

359

PrajithLalCheeni

PrajithLalCheeni

475

121

596

473

--

473

360

RashidHussainHaji

RashidHussainHaji

339

354

692

339

--

339

361

A.BasitHajiMurad

AbdulBasitHajiMurad

603

1,012

1,615

603

--

603

362

AymanMoosa

AymanMoosa

-783

783

-783

-783

363

ShirleyJoaquin

ShirleyJoaquin

750

396

1,146

745

--

745


(PKRin'000)



S.

Nameandaddress

Nameofindividuals/

CNICNumber

Father/Husband

Principal

Markup

Other

No.


Name

Principal

Markup

Others

Total

writtenoff

writtenoff

financial

Total

relief

provided


[Annexu

re'B'

asref

erred

toinn

ote10.

7ofth

eBank's

uncon

solida

tedandc

onsol

idated

financia

lstate

ments

]

364

MichaelChuDimaculangan

MichaelChuDimaculangan

355

397

752

355

--

355

365

NadeemAhmedAmirulla

NadeemAhmedAmirulla

998

335

1,334

998

--

998

366

GilbertBaheej

GilbertBaheej

504

194

698

500

--

500

367

AnyumbaTony

AnyumbaTony

901

886

1,787

900

--

900

368

BassamM.JAlqattan

BassamM.JAlqattan

1,217

105

1,323

1,217

--

1,217

369

HussainAbdulnabiAhmed

HussainAbdulnabiAhmed

1,741

141

1,882

1,741

--

1,741

370

TariqMohammedSalim

TariqMohammedSalim

497

493

990

497

--

497

371

RekhaBhaskaranNair

RekhaBhaskaranNair

570

191

761

569

--

569

372

PriyanthaSanjeewaJ.Konara

PriyanthaSanjeewaJ.Konara

437

394

831

433

--

433

373

AbdullaA.RahmanAbdulWahab

AbdullaA.RahmanAbdulWahab

1,647

264

1,911

1,647

--

1,647

374

ZuhairMohammedJaafar

ZuhairMohammedJaafar

536

155

691

535

--

535

375

HijazMaqbolAhmedWahed

HijazMaqbolAhmedWahed

1,012

276

1,289

1,012

--

1,012

376

MohammmadAlawiSayedMohsin

MohammmadAlawiSayedMohsin

630

94724

630

--

630

377

MarjanMohammedJawad

MarjanMohammedJawad

2,300

562

2,862

2,300

--

2,300

378

QassimMustafaKhalafMoosa

QassimMustafaKhalafMoosa

2,300

554

2,855

2,300

--

2,300

379

NishanthaR.A.Arachchige

NishanthaR.A.Arachchige

26614-40147-6

8,570

1,882

-10,452

8,570

1,882

-10,452

P.O.Box22550DohaQatar

380

MohammedMubarakSaidAlBreiki

MohammedMubarakSaidAlBreiki

28251-20016-3

7,075

1,060

-8,135

7,075

1,060

-8,135

P.O.BoxNo100001DohaQatar

381

UdayaMeddumaB.Ratnayake

UdayaMeddumaB.Ratnayake

27014-40431-0

6,067

1,543

-7,611

6,067

1,543

-7,611

P.O.Box383DohaQatar


(PKRin'000)



S.

Nameandaddress

Nameofindividuals/

CNICNumber

Father/Husband

Principal

Markup

Other

No.


Name

Principal

Markup

Others

Total

writtenoff

writtenoff

financial

Total

relief

provided


[Annexu

re'B'

asref

erred

toinn

ote10.

7ofth

eBank's

uncon

solida

tedandc

onsol

idated

financia

lstate

ments

]

382

Ibrahim

MohammedRashidAlJabri

Ibrahim

MohammedRashidAlJabri28351-20020-2

3,770

1,300

-5,070

3,770

1,300

-5,070


383

NapoleonEmitDionzon

NapoleonEmitDionzon

25960-80329-0

3,675

1,233

-4,908

3,675

1,233

-4,908


384

SharifJahan

SharifJahan

26005-00238-3

3,908

790

-4,698

3,908

790

-4,698


385

KhalilI.Salim

KhalilI.Salim

28551-20016-4

4,034

612

-4,647

4,034

612

-4,647


386

MajeedKhanKhaderKhan

MajeedKhanKhaderKhan

27235-60391-9

3,649

883

-4,532

3,649

883

-4,532


387

SultanQamarEjaz

SultanQamarEjaz

26458-60204-1

3,280

1,088

-4,368

3,280

1,088

-4,368


388

ManoharanVellian

ManoharanVellian

26735-60087-7

2,970

1,231

-4,201

2,970

1,231

-4,201


389

EdithaGalangDizon

EdithaGalangDizon

27060-80183-1

3,032

952

-3,984

3,032

952

-3,984


390

RedentorRegalaTolentino

RedentorRegalaTolentino

26060-80351-5

3,233

659

-3,892

3,233

659

-3,892

P.O.Box383DohaQatar

391

NadiaFawazKamhaz

NadiaFawazKamhaz

27542-20023-9

2,614

732

-3,346

2,614

732

-3,346


392

WilfredoAlCoberTolibas

Wilfredo

AlCoberTolibas

26660-80300-9

2,467

527

-2,995

2,467

527

-2,995


393

MohantyAbhayaKumar

MohantyAbhayaKumar

25835-60377-5

2,220

677

-2,896

2,220

677

-2,896


394

AbdulRahimanM.Ahmad

AbdulRahimanM.Ahmad

26735-60015-6

2,214

612

-2,826

2,214

612

-2,826



(PKRin'000)



S.

Nameandaddress

Nameofindividuals/

CNICNumber

Father/Husband

Principal

Markup

Other

No.


Name

Principal

Markup

Others

Total

writtenoff

writtenoff

financial

Total

relief

provided


[Annexu

re'B'

asref

erred

toinn

ote10.

7ofth

eBank's

uncon

solida

tedandc

onsol

idated

financia

lstate

ments

]

395

TauqirAhmedKhan

TauqirAhmedKhan

26235-60401-8

1,835

886

-2,721

1,835

886

-2,721


396

PaulinoJr.TalampasCabrera

PaulinoJr.TalampasCabrera

25460-80017-8

2,014

533

-2,547

2,014

533

-2,547


397

IbrahimHassanI.Albalushi

IbrahimHassanI.Albalushi

27351-20008-1

1,573

704

-2,277

1,573

704

-2,277


398

MaryAnnDalupangReys

MaryAnnDalupangReys

27160-80095-6

1,388

802

-2,190

1,388

802

-2,190


399

YousufKhalifaS.AlSahi

YousufKhalifaS.AlSahi

26751-20008-7

1,418

732

-2,151

1,418

732

-2,151


400

HarveySantosPerez

HarveySantosPerez

28660-80006-9

1,583

442

-2,026

1,583

442

-2,026

P.O.BoxNo363,DohaQatar

401

WilfredoG.SanPedro

Wilfredo

G.SanPedro

26560-80507-6

1,326

512

-1,839

1,326

512

-1,839


402

SandaruwanLankeshwara

SandaruwanLankeshwara

27114-40428-4

1,330

481

-1,811

1,330

481

-1,811


403

AlbertoRodriguezRodolfo

AlbertoRodriguezRodolfo

26860-80262-9

1,256

501

-1,757

1,256

501

-1,757


404

AbdelBasetM.Shaker

AbdelBasetM.Shaker

26540-00066-8

1,240

298

-1,538

1,240

298

-1,538


405

ImadYehyaJaber

ImadYehyaJaber

27742-20041-5

1,219

204

-1,423

1,219

204

-1,423


406

AhmedAbdusattarAlakkoumiAhmedAbdusattarAlakkoumi27742-20061-7

1,158

112

-1,270

1,158

112

-1,270


407

RonaldBobisDeLaPasion

RonaldBobisDeLaPasion

28160-80056-5

930

309

-1,239

930

309

-1,239

P.O.BoxNo1290

DohaQatar

408

EduardoBucolMansueto

Eduardo

BucolMansueto

28060-80209-1

594

478

-1,072

594

478

-1,072



(PKRin'000)



S.

Nameandaddress

Nameofindividuals/

CNICNumber

Father/Husband

Principal

Markup

Other

No.


Name

Principal

Markup

Others

Total

writtenoff

writtenoff

financial

Total

relief

provided


[Annexu

re'B'

asref

erred

toinn

ote10.

7ofth

eBank's

uncon

solida

tedandc

onsol

idated

financia

lstate

ments

]

409

HamoodSuwaidJumaAlHooti

HamoodSuwaidJumaAlHooti

27651-20015-6

604

424

-1,028

604

424

-1,028

P.O.BoxNo36

DohaQatar

410

AhmedHassanElBanna

AhmedHassanElBanna

28081-80112-9

550

424

-974

550

424

-974


411

GarryTalenjaleIbanez

GarryTalenjaleIbanez

26360-80435-2

681

263

-944

681

263

-944


412

AlbertoBocalaConda

AlbertoBocalaConda

27160-80499-9

566

271

-837

566

271

-837


413

YousefMohammad.A.Y

YousefMohammad.A.Y

27463-40008-1

706

119

-824

706

119

-824


414

MustafaKhammash

MustafaKhammash

25484-00013-2

706

108

-813

706

108

-813


415

AmberBahadurShrestha

AmberBahadurShrestha

27352-40529-3

651

116

-768

651

116

-768

P.O.Box153DohaQatar

416

KumarKhadka

KumarKhadka

26552-40384-9

483

279

-762

483

279

-762

P.O.Box153DohaQatar

417

UdukalageDonSirikumara

UdukalageDonSirikumara

25414-40170-6

309

451

-760

309

451

-760


418

ArjunanVeeradiyan

ArjunanVeeradiyan

26935-61356-4

380

356

-736

380

356

-736


419

MotiLalPandey

MotiLalPandey

27852-40596-7

283

360

-644

283

360

-644


420

RonaldDeLaraPacis

RonaldDeLaraPacis

26260-80434-3

-611

-611

-611

-611


421

AhmedMohamedS.A.AlRomaihi

AhmedMohamedS.A.AlRomaihi

26263-40234-9

470

64-

534

470

64-

534


422

JacobThottathilKoshy

JacobThottathilKoshy

26035-60702-8

521

--

521

521

--

521


1,468,696

350,165

12,510

1,831,371

774,208

277,322

748,5181,800,048


(PKRin'000)



S.

Nameandaddress

Nameofindividuals/

CNICNumber

Father/Husband

Principal

Markup

Other

No.


Name

Principal

Markup

Others

Total

writtenoff

writtenoff

financial

Total

relief

provided


[ Annexure 'C' as referred to in note 11.7 of Bank'sUnconsolidated Financial Statements ]

Disposals of operating fixed assets during the year 2010

Cost Accumu- Book Sale Mode oflated value proceeds disposal Particulars of Buyersdeprec-iation

------------ (Rupees in '000) ------------

Furniture and fixturesItems having book value of less

than Rs. 250,000 or cost ofless than Rs. 1,000,000 17,770 14,760 3,010 549 Auction Various

Electrical, office and computer equipmentItems having book value of less

than Rs. 250,000 or cost ofless than Rs. 1,000,000 31,186 29,681 1,505 1,759 Auction Various

VehiclesItems having book value of

more than Rs. 250,000or cost of more than Rs. 1,000,000

M/Lancer 1,399 1,399 - 550 Auction Ejaz AhmedH/Civic 1,042 1,042 - 766 Auction Wasim MirzaM/Lancer 1,439 1,439 - 288 Buy Back Atif Riaz BokhariT/Corolla 1,309 916 393 633 Buy Back Aqeel A. NasirS/Cultus 652 337 315 424 Buy Back Zeeshanul HaqS/Cultus 636 223 413 456 Buy Back Amjad PervaizS/Cultus 636 223 413 456 Buy Back Muhammad Munir TariqS/Cultus 636 223 413 456 Buy Back Mumtaz Ali AbroS/Cultus 636 233 403 552 Buy Back Shaukat AliS/Cultus 636 233 403 570 Buy Back Munnawar AliS/Cultus 636 223 413 552 Buy Back Javaid Afzal QaziH/Accord 6,300 210 6,090 5,573 Insurance Claimed UBL InsurersT/Corolla 1,389 208 1,181 1,354 Insurance Claimed UBL Insurers

Items having book value ofless than Rs. 250,000or cost of less thanRs. 1,000,000

T/Corolla 849 849 - 678 Auction Ahmed Hussain QadriT/Corolla 849 849 - 650 Auction Shahzad MangiT/Corolla 849 849 - 813 Auction NaveedT/Corolla 849 849 - 780 Auction Sikander AliS/Cultus 620 548 72 532 Auction Sikander AliS/Cultus 620 527 93 528 Auction Sikander AliS/Cultus 560 392 168 480 Auction Nasir & Co.S/Cultus 560 523 37 516 Auction Tariq AjmeriS/Cultus 555 555 - 441 Auction Tariq AjmeriS/Cultus 555 555 - 427 Auction Sikander Ali





------------ (Rupees in '000) ------------

S/Cultus 555 555 - 423 Auction Wasim MirzaS/Cultus 555 555 - 424 Auction M. Imran AyubS/Cultus 555 555 - 435 Auction Sikander AliS/Cultus 555 555 - 416 Auction Imran Shaikh

S/Alto 419 419 - 84 Auction Suhail Ahmed QaziS/Bolan 367 355 12 345 Auction Khalil Ur RehmanS/Cultus 620 393 227 362 Buy Back Naveed Khan AnjumS/Cultus 620 444 176 310 Buy Back Zahid HamidS/Cultus 615 430 185 318 Buy Back Mushtaq AliS/Cultus 560 355 205 391 Buy Back Zakaria Naseem MirS/Cultus 560 355 205 205 Buy Back Mahmood Saeed SiddiquiS/Cultus 560 364 196 317 Buy Back Hammad Umer ShafiqS/Cultus 555 500 55 241 Buy Back Toufique Ahmed ShaikhS/Cultus 555 509 46 222 Buy Back Sheikh Muhammad TayyabS/Alto 419 314 105 84 Buy Back Rasool Bux SoomroS/Cultus 550 550 - - Write-offS/Cultus 550 550 - - Write-offS/Alto 419 419 - - Write-offS/Alto 419 419 - - Write-offS/Alto 419 419 - - Write-offVarious 215 211 4 5 Auction Various

34,854 22,631 12,223 23,057

Ijara AssetsItems having book value of

more than Rs. 250,000or cost of more thanRs. 1,000,000

Commercial Ijarah - Atlas Honda Limited 3,325 210 3,115 3,139 Buy Back Atlas Honda LimitedH/Civic 1,564 462 1,102 917 Buy Back M.Kamran SabowalaT/Corolla 1,389 230 1,159 1,050 Buy Back Riaz HussainT\Altis 1,319 402 917 598 Buy Back Mahinder KumarT/Corolla 1,286 366 920 886 Buy Back Muhammad Shoaib KhanzadaT/Corolla 1,240 426 814 898 Buy Back Abdullah ShaikhT/Corolla 1,237 412 825 322 Buy Back Muhammad Aslam ParachaT/Corolla 1,225 471 754 278 Buy Back Khader KheilH/City 1,215 408 807 793 Buy Back Sarfaraz KhanT/Corolla 1,205 422 783 616 Buy Back Arshad HussainT/Corolla 1,205 299 906 987 Buy Back Maheen AfaqT/Corolla 1,204 301 903 774 Buy Back Ghulam Hussain





------------ (Rupees in '000) ------------



T/Corolla 980 391 589 426 Buy Back Dahar JunejoT/Corolla 980 564 416 256 Buy Back Mohammad Ayoob JamaliS/Liana 955 456 499 551 Buy Back Muhammad Junaid GhaffarT/Corolla 950 487 463 660 Buy Back Muhammad IrfanS/Cultus 940 308 632 442 Buy Back Talat MehmoodT/Corolla 940 486 454 620 Buy Back Mohammad Hamid Ali KhanT/Corolla 940 528 412 255 Buy Back Sharmeen ZindaniT/Corolla 925 435 490 559 Buy Back Yaar GulT/Corolla 915 511 404 492 Buy Back Muhammad KousarS/Liana 907 434 473 534 Buy Back Manohar Lal WadhwaniH/City 907 484 423 461 Buy Back Tarana ZafarT/Belta 900 460 440 241 Buy Back Muhammad NaeemT/Corolla 890 319 571 502 Buy Back Waheed Ahmed ShaikhT/Corolla 890 526 364 476 Buy Back Mohammad Asmat ParachaH/City 879 343 536 559 Buy Back Aasima KhanS/Liana 856 540 316 355 Buy Back Mohammad RehanH/City 852 235 617 674 Buy Back Syed Muhammad Hasan Qutb

H/City 846 451 395 493 Buy Back Mohammad Asim SaleemS/Liana 825 406 419 490 Buy Back Farooq Ahmed SiddiquiT/Vitz 811 560 251 151 Buy Back Saqib KhanK/Sportage 800 494 306 403 Buy Back Noor Ahmed ShahtajS/Cultus 742 448 294 435 Buy Back Ahson Iqbal RazaS/Cultus 704 286 418 424 Buy Back Muhmmad AshrafS/Cultus 694 211 483 177 Buy Back Zubair AkramS/Cultus 694 257 437 442 Buy Back Suman KhurramS/Cultus 694 292 402 379 Buy Back Muhammad HaroonS/Cultus 682 252 430 345 Buy Back Syed Javed AkhtarS/Cultus 647 163 484 536 Buy Back Tanzeel Ul RehmanS/Bolan 644 209 435 380 Buy Back Syed Fahim HasanS/Cultus 632 208 424 385 Buy Back Asif Ali AbbasiS/Cultus 632 225 407 353 Buy Back Babar Gulzar ButtS/Cultus 632 241 391 380 Buy Back Khalid Mahmood MirzaS/Cultus 632 274 358 297 Buy Back Imran IjazS/Cultus 632 288 344 417 Buy Back Syed Asim UddinS/Cultus 632 329 303 358 Buy Back Mohammad BukshS/Cultus 631 302 329 262 Buy Back SamiullahT/Vitz 600 209 391 447 Buy Back Fawad IqbalS/Cultus 600 311 289 365 Buy Back Maria Noureen





------------ (Rupees in '000) ------------



S/Alto 590 181 409 491 Buy Back Sandra GraceS/Alto 590 188 402 157 Buy Back Muhammad RaeesS/Alto 590 191 399 346 Buy Back Javed AkhtarS/Alto 585 158 427 310 Buy Back AsifS/Liana 560 142 418 377 Buy Back Sami UllahC/Joy 555 251 304 359 Buy Back Mailik Anas RabbaniS/Alto 529 106 423 200 Buy Back Sameen UmairS/Alto 521 162 359 147 Buy Back Mahmood Ul HaqS/Alto 521 219 302 361 Buy Back Atif SyedD/Cuore 519 181 338 321 Buy Back Muhammad Musawwir KhanS/Alto 513 214 299 296 Buy Back Waquar AhmedS/Alto 508 151 357 187 Buy Back Shuja HaiderS/Alto 508 201 307 326 Buy Back Tariq QaziS/Alto 508 258 250 262 Buy Back Mohammad Ali SiddiquiS/Alto 504 88 416 295 Buy Back Muhammad Fasihuddin KhanS/Cultus 500 179 321 286 Buy Back Shazia Marium SiyalS/Ravi 497 99 398 282 Buy Back Mohisin JhangirD/Cuore 497 145 352 238 Buy Back Amna AkmalD/Cuore 497 163 334 223 Buy Back Atif Hameed BajwaS/Mehran 495 245 250 372 Buy Back Muhammad AliD/Cuore 492 217 275 176 Buy Back Iftikhar MuhiuddinS/Bolan 458 114 344 156 Buy Back Rehan Ahmed GhaffarD/Cuore 455 50 405 140 Buy Back Tanveer Imran NiazS/Every 450 160 290 155 Buy Back Abdul KhaliqS/Ravi 447 140 307 278 Buy Back Afzaal KhalilS/Mehran 431 171 260 308 Buy Back Zafar IqbalS/Mehran 431 171 260 308 Buy Back Zafar IqbalS/Mehran 426 101 325 332 Buy Back Hummad AliS/Bolan 418 159 259 261 Buy Back IrfanS/Ravi 372 118 254 179 Buy Back Shahid ArabS/Mehran 366 70 296 242 Buy Back Zeeshan SuchwaniS/Ravi 357 84 273 338 Buy Back Mohammad Rashid Imran Kayani

T/Surf 2,450 918 1,532 1,138 Buy Back Amir Hader ButtT/Corolla 1,336 463 873 713 Buy Back Syed Arshad Abbas ZaidiT/Corolla 1,260 515 745 454 Buy Back M.SaleemT/Corolla 1,260 516 744 479 Buy Back Sikander ImranT/Corolla 1,205 505 700 702 Buy Back Syed Muhammad TanzeemT/Corolla 1,205 556 649 787 Buy Back Pervaiz SaeedT/Corolla 915 472 443 524 Buy Back Muhammad Afroze





------------ (Rupees in '000) ------------



T/Corolla 915 481 434 332 Buy Back Rashida KhanumT/Corolla 915 489 426 504 Buy Back Ghulam Sarwar QureshiS/Liana 906 543 363 449 Buy Back Muhammad AleemH/City 888 488 400 272 Buy Back Muhammad Ibrar HussainH/City 879 478 401 168 Buy Back Saba ZehraH/City 854 456 398 470 Buy Back Sajid ShabirH/City 852 456 396 469 Buy Back Fazal ElahiiS/Cultus 752 288 464 171 Buy Back Mian Riffat BaqarS/Cultus 687 345 342 111 Buy Back Ayaz Mustafa ChaudhryS/Alto 685 370 315 336 Buy Back Adeel AnwerShehzore 675 408 267 329 Buy Back M. KhalidS/Alto 601 247 354 344 Buy Back Muhammad Umair MazharS/Alto 521 214 307 363 Buy Back Mustaq AhmedD/Cuore 519 227 292 361 Buy Back Mallick Muhammad

Afroz Alam DawoodiS/Alto 508 254 254 301 Buy Back Asif-Ur-RehmanS/Liana 888 420 468 472 Auction Muhammad RashidS/Cultus 712 320 392 405 Auction Raza Ullah KhaldiS/Cultus 632 201 431 343 Auction Sikander AliS/Alto 590 241 349 349 Auction Munaweer HussainS/Alto 542 158 384 460 Auction Muhammad Atif BhattiS/Bolan 520 125 395 457 Auction Muhammad RashidT/Corolla 950 261 689 694 Insurance Claimed Pak Qattar TakafulT/Corolla 829 415 414 345 Insurance Claimed Pak Qattar TakafulD/Cuore 587 95 492 360 Insurance Claimed Pak Kwait TakafulD/Cuore 502 247 255 351 Insurance Claimed Pak Qattar TakafulD/Cuore 497 214 283 375 Insurance Claimed Pak Qattar TakafulS/Mehran 409 115 294 115 Insurance Claimed Pak Kwait Takaful


T/Corolla 879 769 110 191 Buy Back Masood TextileT/Vitz 750 549 201 507 Buy Back Abid HussainS/Cultus 730 524 206 113 Buy Back Syed Asim Zafar ZaidiS/Cultus 704 504 200 492 Buy Back Imtiaz AhmedT/Corolla 704 515 189 372 Buy Back Imran Ul HafeezT/Corolla 704 515 189 472 Buy Back Imran Ul HafeezShehzore 699 477 222 307 Buy Back Syed Farooq Ali ShahS/Cultus 694 449 245 308 Buy Back Muhammad Saeed JamsaS/Cultus 682 469 213 315 Buy Back Mohammad Aslam Sabri





------------ (Rupees in '000) ------------



S/Liana 660 476 184 295 Buy Back Muhammad FaisalS/Cultus 632 476 156 184 Buy Back Muhammad Zeeshan AliS/Cultus 600 399 201 252 Buy Back Mohammad YousufS/Cultus 600 474 126 224 Buy Back Ramesh BabuS/Cultus 595 521 74 130 Buy Back Masood TextileS/Alto 590 403 187 415 Buy Back Muhammad Rizwan Afzal Khan

S/Alto 529 283 246 291 Buy Back Mohammad IslamS/Alto 529 330 199 113 Buy Back Muhammad AhsanS/Alto 529 449 80 147 Buy Back Akbar HussainS/Alto 524 292 232 395 Buy Back Mohammad SaeedD/Cuore 520 421 99 210 Buy Back JavedS/Alto 519 285 234 225 Buy Back Sofia ParachaS/Alto 519 404 115 214 Buy Back Mohammad ShahidS/Alto 519 415 104 125 Buy Back Mehboob Alam MazariS/Alto 521 468 53 163 Buy Back Mirza Ahmed AliD/Cuore 507 387 120 232 Buy Back Syed Matloob Hussain RizviD/Cuore 495 271 224 106 Buy Back Asif NisarS/Mehran 497 370 127 170 Buy Back Abbas AliD/Cuore 492 416 76 111 Buy Back Muhammad Umair AbbasiD/Cuore 464 406 58 101 Buy Back Masood TextileS/Bolan 458 259 199 142 Buy Back Yahya KhanS/Ravi 447 223 224 247 Buy Back Niaz Iqbal SiddiqS/Bolan 444 227 217 147 Buy Back Jamil Ahmed ShaikhS/Bolan 444 327 117 138 Buy Back Salamat Ali AnjumS/Mehran 435 190 245 268 Buy Back Syed Ammad Uddin GramiS/Mehran 435 320 115 135 Buy Back Syed Latif MirzaD/Cuore 430 365 65 141 Buy Back Saima MalikS/Bolan 428 182 246 293 Buy Back Muhammad SaleemS/Bolan 428 363 65 276 Buy Back Iftikhar Ali KhanS/Bolan 418 188 230 225 Buy Back Ali Ahmed KhanS/Bolan 418 264 154 270 Buy Back Muhammad ImranS/Bolan 407 260 147 111 Buy Back Mudasir HussainS/Mehran 408 319 89 216 Buy Back Mohammad Noor-e-Arshi Khan

S/Bolan 402 289 113 135 Buy Back Mirza Shadab BaigS/Mehran 395 203 192 170 Buy Back Syeda Safoora HamidD/Cuore 390 335 55 162 Buy Back Abdul WaheedS/Bolan 382 315 67 278 Buy Back Muhammad Akram NoorS/Mehran 362 140 222 305 Buy Back Muhammad Fakhar Uz Zaman Khan





------------ (Rupees in '000) ------------



D/Cuore 360 144 216 351 Buy Back Denial ChristopherT/Premio 358 239 119 148 Buy Back Mohammad Arif KhanS/Mehran 353 142 211 243 Buy Back Muhmmad ShafiS/Mehran 352 110 242 235 Buy Back Muhammad Haider Hussain Hashmi

S/Mehran 350 289 61 136 Buy Back Danish KazmiT/Corolla 750 510 240 223 Buy Back Talha AnwarS/Cultus 632 500 132 226 Buy Back Qasim MansoorS/Alto 632 431 201 246 Buy Back Shahzad Ahmed KhanS/Cultus 632 496 136 295 Buy Back Muhammad Suleman Ansari

S/Cultus 617 456 161 190 Buy Back Muhammad Ayaz Imam Rizvi

S/Bolan 526 383 143 249 Buy Back Muhammad Zubair KhanT/Corolla 522 468 54 288 Buy Back Yasir YousafT/Corolla 522 468 54 277 Buy Back Yasir YousafS/Alto 508 278 230 272 Buy Back Wasim RazaS/Alto 508 466 42 150 Buy Back Mumtaz AhmedS/Alto 504 422 82 373 Buy Back Saima AnjumS/Alto 504 422 82 273 Buy Back Saima AnjumD/Cuore 487 238 249 233 Buy Back AminaS/Bolan 483 272 211 131 Buy Back Liaquat Ali AbbasiD/Cuore 456 343 113 135 Buy Back Hammad HaiderS/Ravi 447 222 225 248 Buy Back Nadeem-Ul-Haq NajmiS/Ravi 447 222 225 248 Buy Back Nadeem-Ul-Haq NajmiS/Ravi 447 290 157 282 Buy Back Naeem-Ur-Rehman ShaikhS/Ravi 447 290 157 262 Buy Back Naeem-Ur-Rehman ShaikhS/Alto 425 316 109 138 Buy Back Asif AliS/Bolan 414 233 181 213 Buy Back Syed Arshad IqbalS/Bolan 408 371 37 170 Buy Back Shabbir Ahmed MemonS/Ravi 402 305 97 160 Buy Back Riyasat Hussain TahirS/Mehran 398 321 77 257 Buy Back Shahab SharifS/Ravi 397 349 48 131 Buy Back Jalil-Ur-Rehman ShaikhS/Ravi 397 349 48 231 Buy Back Jalil-Ur-Rehman ShaikhS/Bolan 370 219 151 186 Buy Back Syed Ghazanfar AhmedD/Cuore 497 275 222 326 Auction Muhammad FurrakhD/Cuore 519 404 115 255 Insurance Claimed Pak Qattar TakafulS/Bolan 515 416 99 213 Insurance Claimed Pak Kwait Takaful

133,066 65,055 68,011 69,285





------------ (Rupees in '000) ------------

Buildings on leasehold landItems having book value of


Old lifts of Jinnah Ave. Building 5,431 5,431 - 2,200 Auction Rehmat Ullah

Leasehold ImprovementItems having book value of


Various 7,818 5,436 2,382 - Write-off

IntangiblesItems having book value of

less than Rs. 250,000or cost of less thanRs. 1,000,000


Total 235,986 145,685 90,301 96,850


[ Annexure 'D' of the Bank'sUnconsolidated Financial Statements ]

Guidelines for mapping of Business Lines

Segment Reporting

A segment is a distinguishable component of the Bank that is engaged either in providing product or services (business segment),or in providing products or services within a particular economic environment, which is subject to risks and rewards that are differentfrom those of other segments.

Business segments





(c) Retail Banking



Commercial banking includes project finance, real estate, export finance, trade finance, factoring, leasing, lending, guarantees,bills of exchange and deposits.

(e) Others

Other includes support functions of the bank which can not be classified in any of the above segment.

167



BDO Ebrahim & Co.Chartered AccountantsAudit Engagement PartnerZulfikar Ali Causer

Ernst & Young Ford Rhodes Sidat HyderChartered AccountantsAudit Engagement PartnerShabbir Yunus

Annual Report 2010

We have audited the annexed consolidated financialstatements comprising consolidated statement of financialposition of United Bank Limited (the Bank) as at December31, 2010 and the related consolidated profit and loss account,consolidated statement of comprehensive income,consolidated cash flow statement and consolidated statementof changes in equity together with the notes forming partthereof, for the year then ended. These financial statementsinclude unaudited certified returns from the branches, exceptfor thirty six branches which have been audited by us and 17branches audited by auditors abroad. We have alsoexpressed separate opinion on the financial statements ofUnited Bank Limited. The financial statements of UnitedExecutors and Trustees Company Limited and UBL FundManagers Limited were audited by BDO Ebrahim & Co.,Chartered Accountants while the financial statements of theremaining subsidiary companies were audited by other firmsof auditors, whose reports have been furnished to us and ouropinion in so far as it relates to the amounts included for suchcompanies, is based solely on the report of such auditors.

These financial statements are responsibility of the Bank’smanagement. Our responsibility is to express our opinion onthese financial statements based on our audit.

We conducted our audit in accordance with the auditingstandards as applicable in Pakistan. These standards requirethat we plan and perform the audit to obtain reasonableassurance about whether the above said statements are free

of any material misstatement. An audit includes examining, ona test basis, evidence supporting the amounts and disclosuresin the above said statements. An audit also includes assessingthe accounting policies and significant estimates made by themanagement, as well as, evaluating the overall presentationof the above said statements. We believe that our auditprovides a reasonable basis for our opinion.

In our opinion, the consolidated financial statements presentfairly the financial position of the Bank and its subsidiarycompanies as at December 31, 2010 and the results of theiroperations, their cash flows and changes in equity for the yearthen ended in accordance with approved accountingstandards as applicable in Pakistan.


Date : February 21, 2011Karachi


[ Consolidated Statement of Financial Position As at December 31, 2010 ]

Note 2010 2009(Rupees in ‘000)

ASSETSCash and balances with treasury banks 6 67,667,226 61,562,141Balances with other banks 7 25,980,928 14,049,990Lendings to financial institutions 8 12,384,778 23,162,130Investments 9 231,717,214 137,734,578AdvancesPerforming 10 326,441,450 349,715,209Non-performing - net of provision 10 15,068,962 12,364,387

341,510,412 362,079,596Operating fixed assets 11 24,684,566 23,734,082Deferred tax asset - net 12 1,298,247 649,814Other assets 13 20,146,272 17,449,580

725,389,643 640,421,911

LIABILITIESBills payable 15 5,074,700 5,166,361Borrowings 16 47,631,814 37,168,277Deposits and other accounts 17 567,611,258 503,831,672Sub-ordinated loans 18 11,985,748 11,989,800Liabilities against assets subject to finance lease - 611Other liabilities 19 17,951,943 14,946,827

650,255,463 573,103,548

NET ASSETS 75,134,180 67,318,363

REPRESENTED BY:Share capital 20 12,241,798 11,128,907Reserves 24,101,838 21,167,954Unappropriated profit 27,576,333 23,617,875Total equity attributable to the equity holders of the Bank 63,919,969 55,914,736Non-controlling interest 2,207,241 2,279,691

66,127,210 58,194,427Surplus on revaluation of assets - net of deferred tax 21 9,006,970 9,123,936

75,134,180 67,318,363

CONTINGENCIES AND COMMITMENTS 22

The annexed notes from 1 to 48 and annexures form an integral part of these consolidated financial statements.






169

[ Consolidated Profit and Loss account For the year ended December 31, 2010 ]

Annual Report 2010


Mark-up / return / interest earned 24 60,100,410 61,745,462Mark-up / return / interest expensed 25 25,433,850 28,323,272Net mark-up / interest income 34,666,560 33,422,190

Provision against loans and advances - net 10.5 6,838,336 9,644,927Provision against lending to financial institutions 8.5 - 560,852Provision for diminution in value of investments - net 9.3 304,026 1,187,460Bad debts written off directly 10.6 1,007,896 1,485,976

8,150,258 12,879,215Net mark-up / return / interest income after provisions 26,516,302 20,542,975

Non Mark-up / Interest IncomeFee, commission and brokerage income 7,021,661 6,736,356Dividend income 133,962 214,727Income from dealing in foreign currencies 1,734,651 1,275,914Gain on sale of securities - net 26 188,164 699,275Unrealized loss on revaluation of investments classified as

held for trading 9.4 (33,214) (2,582)Other income 27 1,569,731 3,146,810Total non mark-up / return / interest income 10,614,955 12,070,500

37,131,257 32,613,475Non Mark-up / Interest ExpensesAdministrative expenses 28 18,996,661 17,803,338Other provisions / write offs - net 29 68,113 642,274Workers' Welfare Fund 30 414,833 401,073Other charges 31 240,391 64,552Total non mark-up / interest expenses 19,719,998 18,911,237Share of income of associates 277,364 689,943Profit before taxation 17,688,623 14,392,181

Taxation - Current 32 6,850,854 6,996,257- Prior years 32 415,329 78,710- Deferred 32 (598,485) (2,170,738)

6,667,698 4,904,229Profit after taxation 11,020,925 9,487,952

Attributable to:Equity shareholders of the Bank 11,031,630 9,521,546Non-controlling interest (10,705) (33,594)

11,020,925 9,487,952

(Rupees)Restated

Earnings per share - basic and diluted 33 9.01 7.78








[ Consolidated Statement of Comprehensive Income For the year ended December 31, 2010 ]

2010 2009(Rupees in ‘000)

Profit after tax for the year attributable to:

- Equity shareholders of the Bank 11,031,630 9,521,546

- Non-controlling interest (10,705) (33,594)

11,020,925 9,487,952

Other comprehensive income / (loss):

Exchange differences on translation of net investment in

foreign branches and subsidiaries

- Equity shareholders of the Bank 615,495 2,003,138

- Non-controlling interest (30,568) 351,725

Net gain on cash flow hedges 118,866 108,028

Related deferred tax liability on cash flow hedges (41,603) (37,810)

662,190 2,425,081

Comprehensive income transferred to equity - net of tax 11,683,115 11,913,033

Surplus / (deficit) arising on revaluation of assets has been reported in accordance with the requirements of the Companies Ordinance, 1984and the directives of the State Bank of Pakistan in a separate account below equity.







171

[ Consolidated Cash Flow Statement For the year ended December 31, 2010 ]

Annual Report 2010


CASH FLOW FROM OPERATING ACTIVITIESProfit before taxation 17,688,623 14,392,181Less: Dividend income (133,962) (214,727)

Share of profit of associates (277,364) (689,943)17,277,297 13,487,511

Adjustments:Depreciation 1,576,984 1,539,028Amortization 224,017 185,985Workers' welfare fund 414,833 401,073Provision for retirement benefits 7,927 605,672Provision against loans and advances 6,838,336 9,644,927Provision against lending to financial institutions - 560,852Provision for diminution in value of investments 304,026 1,187,460Reversal of provision in respect of investments disposed off during the year (340,488) (1,208,711)Provision against off balance sheet items - 20,250Gain on sale of fixed assets (16,248) (31,829)Bad debts written-off directly 1,007,896 1,485,976Amortization of cash flow hedge reserve 118,866 108,028Unrealized loss on revaluation of investments classified as held for trading 33,214 2,582Finance charges on leased assets 147 110Provision / (reversal of provision) against other assets 68,113 622,024

10,237,623 15,123,42727,514,920 28,610,938

Decrease / (Increase) in operating assetsLendings to financial institutions 10,777,352 (917,641)Held for trading securities (12,521,604) 526,935Advances 12,722,952 4,734,867Other assets (excluding advance taxation) (2,085,878) 1,950,068

8,892,822 6,294,229(Decrease) / Increase in operating liabilities

Bills payable (91,661) (44,509)Borrowings 10,463,537 (7,581,413)Deposits and other accounts 63,779,586 11,563,774Other liabilities (excluding current taxation) 2,575,258 (1,255,808)

76,726,720 2,682,044113,134,462 37,587,211

Staff retirement benefits received / (paid) 986,402 (783,198)Income taxes paid (8,963,257) (9,719,771)Net cash flow from operating activities 105,157,607 27,084,242

CASH FLOW FROM INVESTING ACTIVITIESNet investments in securities (81,899,081) (16,446,722)Dividend income received 490,012 457,237Investments in operating fixed assets (2,393,600) (1,595,660)Sale proceeds from disposal of property and equipment 107,228 174,458Net cash flow from investing activities (83,695,441) (17,410,687)

CASH FLOW FROM FINANCING ACTIVITIESRepayments of principal of sub-ordinated loans (4,052) (4,048)Payments in respect of lease obligations (611) (1,367)Dividends paid (4,006,407) (1,094,748)

Net cash used in financing activities (4,011,070) (1,100,163)Exchange adjustment on translation of net assets attributable to non-controlling interest (30,568) 351,725Exchange differences on translation of net investment in foreign branches and subsidiaries 615,495 2,003,138Increase in cash and cash equivalents 18,036,023 10,928,255Cash and cash equivalents at beginning of the year 75,612,131 64,683,876

Cash and cash equivalents at end of the year 34 93,648,154 75,612,131








[ Consolidated Statement of Changes in Equity For the year ended December 31, 2010 ]

Attributable to ordinary shareholders of the BankCapital reserves

Share General Statutory Exchange Reserve for Cash flow Unappro- Non-Capital reserve reserve translation issue of hedge priated Sub total controlling Total

reserve bonus reserve profit Interestshares

(Rupees in '000)

Balance as at January 01, 2009 10,117,188 3,000 10,383,033 7,146,661 - (276,633) 17,703,327 45,076,576 2,044,589 47,121,165

Final cash dividend for the year endedDecember 31, 2008 declared subsequentto year end at Re.1.00 per share - - - - - - (1,011,719) (1,011,719) - (1,011,719)

Transfer to reserve for issue of bonus shares - - - - 1,011,719 - (1,011,719) - - -

Issue of bonus shares at 10% 1,011,719 - - - (1,011,719) - - - - -


Profit after taxation for the year endedDecember 31, 2009 - - - - - - 9,521,546 9,521,546 (33,594) 9,487,952

Other comprehensive income - net of tax - - - 2,003,138 - 70,218 - 2,073,356 351,725 2,425,081

Total comprehensive income - - - 2,003,138 - 70,218 9,521,546 11,594,902 318,131 11,913,033

Transfer from surplus on revaluation of fixedassets to unappropriated profit - net of tax - - - - - - 254,977 254,977 - 254,977

Ordinary dividend relating tonon-controlling shareholders - - - - - - - - (27,510) (27,510)

Preferred dividend relating tonon-controlling shareholders - - - - - - - - (55,519) (55,519)

Transfer to statutory reserve - - 1,838,537 - - - (1,838,537) - - -

Balance as at December 31, 2009 11,128,907 3,000 12,221,570 9,149,799 - (206,415) 23,617,875 55,914,736 2,279,691 58,194,427

Final cash dividend for the year endedDecember 31, 2009 declared subsequentto year end at Rs.2.50 per share - - - - - - (2,782,227) (2,782,227) - (2,782,227)

Interim cash dividend for the half year endedJune 30, 2010 declared at Re.1.00 per share - - - - - - (1,224,180) (1,224,180) - (1,224,180)

Transfer to reserve for issue of bonus shares - - - - 1,112,891 - (1,112,891) - - -

Issue of bonus shares at 10% 1,112,891 - - - (1,112,891) - - - - -


Profit after taxation for the year endedDecember 31, 2010 - - - - - - 11,031,630 11,031,630 (10,705) 11,020,925

Other comprehensive income - net of tax - - - 615,495 - 77,263 - 692,758 (30,568) 662,190

Total comprehensive income - - - 615,495 - 77,263 11,031,630 11,724,388 (41,273) 11,683,115

Transfer from surplus on revaluation of fixed assetsto unappropriated profit - net of tax - - - - - - 256,075 256,075 - 256,075

Preferred dividend relating tonon-controlling shareholders - - - - - - 31,177 31,177 (31,177) -

Transfer to statutory reserve - - 2,241,126 - - - (2,241,126) - - -

Balance as at December 31, 2010 12,241,798 3,000 14,462,696 9,765,294 - (129,152) 27,576,333 63,919,969 2,207,241 66,127,210

Appropriations made by the Directors subsequent to the year ended December 31, 2010 are disclosed in note 46 to these consolidated financial statements.







173

[ Notes to and forming part of the ConsolidatedFinancial Statements For the year ended December 31, 2010 ]

Annual Report 2010

1. STATUS AND NATURE OF BUSINESS

The "Group" consists of:

- Holding Company

United Bank Limited (the Bank) is a banking company incorporated in Pakistan and is engaged in commercial bankingand related services. The Bank's registered office and principal office are situated at UBL building, Jinnah Avenue,Blue Area, Islamabad and at State Life Building No. 1, I. I. Chundrigar Road, Karachi respectively. The Bank operates1,123 (2009: 1,120) branches including 6 (2009: 5) Islamic banking branches, 1 (2009: 1) branch in Karachi ExportProcessing Zone (KEPZ) and 17 (2009: 17) branches outside Pakistan.

The Bank's Ordinary shares are listed on all three stock exchanges in Pakistan whereas its Global Depository Receipts(GDRs) are on the list of the UK Listing Authority and the London Stock Exchange Professional Securities Market. TheseGDRs are also eligible for trading on the International Order Book System of the London Stock Exchange. Further, theGDRs constitute an offering in the United States only to qualified institutional buyers in reliance on Rule 144A under theUS Securities Act of 1933 and an offering outside the United States in reliance on Regulation S.

Subsidiary Companies

The Group is engaged in carrying out the following business activities:

- United National Bank Limited (UNBL), United Kingdom - 55 percent holding

UNBL is an authorised banking institution incorporated in the United Kingdom (UK) and regulated by the FinancialServices Authority (FSA). The Bank was formed in 2001 from the merger of the UK branches of United Bank Limited andNational Bank Limited. The principal activities of UNBL are to provide retail banking products through its branch networkin major cities of the UK, wholesale banking and treasury services to financial institutions and trade finance facilities tobusinesses of all sizes.

- United Bank AG (Zurich), Switzerland - 100 percent holding

United Bank AG (Zurich) is a commercial bank owned by United Bank Limited, Karachi. Founded in 1967, its main activitiesare in credit operations and related trade financing. In doing so, it supports its international clientele in their import andexport business with Pakistan, the rest of the sub-continent and the Gulf States.

- United Executors and Trustees Company Limited, Pakistan - 100 percent holding

United Executors and Trustees Company Limited ("the Company") was incorporated in Pakistan in 1965 as an unlistedpublic limited company. The registered office of the Company is situated at State Life Insurance Building No. 1, I.I.Chundrigar Road, Karachi. Currently, the Company is engaged in the business of investments.

- UBL Fund Managers Limited, Pakistan - 100 percent holding

UBL Fund Managers Limited was incorporated as a public limited company in Pakistan under the Companies Ordinance,1984 on April 03, 2001. The Company is licensed to carry out Asset Management and Investment Advisory Servicesunder the Non-Banking Finance Companies (Establishment and Regulation) Rules, 2003 and the Non-Banking FinanceCompanies and Notified Entities Regulations, 2008 (the NBFC Regulations). The principal activities of the Company arefloating and managing mutual funds and providing investment advisory services. The registered office of the Company issituated at 8th Floor, State Life Building No. 1, I. I. Chundrigar Road, Karachi.



2. BASIS OF PRESENTATION

2.1 In accordance with the directives of the Federal Government regarding the shifting of the banking system to Islamic modes,the State Bank of Pakistan (SBP) has issued various circulars from time to time. Permissible forms of trade-related modes offinancing include purchase of goods by banks from their customers and immediate resale to them at appropriate mark-up inprice on deferred payment basis. The purchases and sales arising under these arrangements are not reflected in theseconsolidated financial statements as such, but are restricted to the amount of facility actually utilized and the appropriateportion of mark-up thereon. However, the Islamic Banking branches of the Group have complied with the requirements setout under the Islamic Financial Accounting Standards issued by the Institute of Chartered Accountants of Pakistan and notifiedunder the provisions of the Companies Ordinance, 1984.

2.2 The financial results of the Islamic banking branches of the Group have been included in these consolidated financialstatements for reporting purposes, after eliminating material inter-branch transactions / balances. Key financial figures of theIslamic banking branches are disclosed in note 45 to these consolidated financial statements.

2.3 With effect from the current year, 'Balance Sheet' has been renamed as 'Statement of Financial Position' keeping in view therequirement of BSD Circular letter No.7 of 2010 dated April 20, 2010 issued by the SBP.

3. STATEMENT OF COMPLIANCE

3.1 These consolidated financial statements have been prepared in accordance with approved accounting standards as applicablein Pakistan. Approved accounting standards comprise of such International Financial Reporting Standards (IFRS) andinterpretations issued by the International Accounting Standards Board and Islamic Financial Accounting Standards (IFAS)issued by the Institute of Chartered Accountants of Pakistan, the requirements of the Companies Ordinance, 1984, BankingCompanies Ordinance, 1962 or directives issued by the Securities and Exchange Commission of Pakistan and the StateBank of Pakistan. Wherever the requirements of the Companies Ordinance, 1984, Banking Companies Ordinance, 1962 ordirectives issued by the Securities and Exchange Commission of Pakistan and the State Bank of Pakistan differ with therequirements of IFRS or IFAS, the requirements of the Companies Ordinance, 1984, Banking Companies Ordinance, 1962or said directives prevail.

3.2 The SBP vide BSD Circular letter No. 10, dated August 26, 2002 has deferred the applicability of International AccountingStandard 39, Financial Instruments: Recognition and Measurement (IAS 39) and International Accounting Standard 40,Investment Property (IAS 40) for banking companies till further instructions. Further, according to the notification of SECPissued vide SRO 411(I)/2008 dated April 28, 2008, IFRS - 7 "Financial Instruments: Disclosures" has not been made applicablefor banks. Accordingly, the requirements of these standards have not been considered in the preparation of these financialstatements. However, investments have been classified and valued in accordance with the requirements of various circularsissued by the SBP.

175


Annual Report 2010

3.3 Standards, interpretations and amendments to approved accounting standards that are not yet effective

The following revised standards, amendments and interpretations with respect to approved accounting standards asapplicable in Pakistan would be effective from the dates mentioned below against the respective standard or interpretation:

Standard or Interpretation Effective date(annual periods beginning

on or after)

IAS 32 - Financial Instruments: Presentation -Classification of Rights Issues (Amendment) February 01, 2010

IAS 24 - Related Party Disclosures (Revised) January 01, 2011

IAS 12 - Income Taxes: Deferred Tax Amendment –Recognition of Underlying Assets January 01, 2012

IFRIC 14 - IAS 19 – The Limit on a Defined Benefit Asset,Minimum Funding Requirements and their Interaction (Amendments) January 01, 2011

IFRIC 19 - Extinguishing Financial Liabilities with Equity Instruments July 01, 2010

The Group expects that the adoption of the above revisions, amendments and interpretations of the standards will not affectthe Group's financial statements in the period of initial application.

In addition to the above, amendments to various accounting standards have also been issued by the IASB. Suchimprovements are generally effective for accounting periods beginning on or after January 01, 2011. The Group expectsthat such improvements to the standards will not have any material impact on the Group's financial statements in theperiod of initial application.

4. BASIS OF MEASUREMENT

4.1 Accounting convention

These consolidated financial statements have been prepared under the historical cost convention except that certainoperating fixed assets have been stated at revalued amounts and certain investments and derivative financial instrumentshave been stated at fair value.

4.2 Critical accounting estimates and judgements

The preparation of these consolidated financial statements in conformity with approved accounting standards requiresmanagement to make judgments, estimates and assumptions that affect the reported amounts of assets and liabilities andincome and expenses. It also requires management to exercise judgment in application of its accounting policies. Theestimates and associated assumptions are based on historical experience and various other factors that are believed to bereasonable under the circumstances. These estimates and assumptions are reviewed on an ongoing basis. Revisions toaccounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period, orin the period of revision and future periods if the revision affects both current and future periods.


Significant accounting estimates and areas where judgments were made by the management in the application of accountingpolicies are as follows:

i) classification of investments (notes 5.5 and 9)ii) provision against investments (notes 5.5 and 9.3) and advances (notes 5.6 and 10.5)iii) income taxes (notes 5.9 and 32)iv) staff retirement benefits (note 5.11 and 36)v) fair value of derivatives (note 5.16 and 19.4)vi) operating fixed assets, depreciation and amortization (note 5.7 and 11)vii) impairment (note 5.8)

5. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

5.1 Basis of consolidation

- The consolidated financial statements include the financial statements of UBL - Holding Company and its subsidiarycompanies - "the Group".

- Subsidiary companies are fully consolidated from the date on which more than 50% of voting rights are transferred to theGroup or the power to control the company is established and are excluded from consolidation from the date of disposalor when the control is lost.

- The financial statements of subsidiaries are prepared for same reporting period as the holding company using consistentaccounting policies except for the non-banking subsidiaries in Pakistan which follow the requirements of IAS 39 andoverseas subsidiaries which are required to comply with local regulations enforced within the respective jurisdiction.

- The assets and liabilities of subsidiary companies have been consolidated on a line by line basis and the carrying value ofinvestments in the subsidiary companies held by the Bank is eliminated against the subsidiaries' share capital and preacquisition reserves in the consolidated financial statements.

- Non-controlling interest represents that part of the net results of operations and of net assets of the subsidiary companiesthat is not owned by the Group.

- All material intra-group balances and transactions have been eliminated in full.

5.2 Significant accounting policies

The accounting policies adopted in the preparation of these financial statements are consistent with those of the previousfinancial year except as follows:

The Group has adopted the following new and amended IFRS and related interpretations which became effectiveduring the year:

IFRS 2 – Share-based Payments: Amendments relating to Group Cash-settled Share-based Payment Transactions

IFRS 3 – Business Combinations (Revised)

IAS 27 - Consolidated and Separate Financial Statements (Amendment)

IFRIC 17 - Distributions of Non-cash Assets to owners



In May 2008 and April 2009, International Accounting Standards Board issued amendments to various standards primarilywith a view to removing inconsistencies and clarifying wording. These improvements are listed below:

Issued in May 2008

IFRS 5 – Non-Current Assets Held for Sale and Discontinued Operations

Issued in April 2009

IFRS 2 – Share-based Payments (note 37.3)IFRS 5 – Non-Current Assets Held for Sale and Discontinued OperationsIFRS 8 – Operating SegmentsIAS 1 – Presentation of Financial StatementsIAS 7 – Statement of Cash FlowsIAS 17 – LeasesIAS 36 – Impairment of AssetsIAS 38 – Intangible AssetsIAS 39 – Financial Instruments: Recognition and measurementIFRIC 9 – Reassessment of Embedded DerivativesIFRIC 16 – Hedges of a Net Investment in a Foreign Operation

The adoption of the above standards, amendments / improvements and interpretations did not have a material effect on thefinancial statements.

5.3 Cash and cash equivalents

Cash and cash equivalents for the purpose of the cash flow statement represent cash and balances with treasury banks andbalances with other banks in current and deposit accounts.

5.4 Lendings to / borrowings from financial institutions

The Group enters into transactions of repos and reverse repos at contracted rates for a specified period of time. Theseare recorded as under:

5.4.1 Sale under repurchase agreements

Securities sold subject to a re-purchase agreement (repo) are retained in the consolidated financial statements as investmentsand the counter party liability is included in borrowings from financial institutions. The differential in sale and re-purchase valueis accrued over the period of the agreement and recorded as an expense.

5.4.2 Purchase under resale agreements

Securities purchased under agreement to resell (reverse repo) are included in lendings to financial institutions. The differentialbetween the purchase price and resale price is amortized over the period of the agreement and recorded as income.

Securities held as collateral are not recognized in the consolidated financial statements, unless these are sold to third parties,in which case the obligation to return them is recorded at fair value as a trading liability under borrowings from financialinstitutions.



5.5 Investments

Investments of the Group, other than investments in associates are classified as held for trading, held-to-maturity andavailable for sale.

Held for trading

These are securities which are either acquired for generating a profit from short-term fluctuations in market prices, interest ratemovements, dealer's margin or are securities included in a portfolio in which a pattern of short-term profit taking exists.

Held to maturity

These are securities with fixed or determinable payments and fixed maturity in respect of which the Group has the positiveintent and ability to hold to maturity.

Available for sale

These are investments, other than those in associates, that do not fall under the held for trading or held to maturity categories.

Initial measurement

All “regular way” purchases and sales of investments are recognized on the trade date, i.e., the date that the Group commitsto purchase or sell the asset. Regular way purchases or sales are purchases or sales of investments that require delivery ofassets within the time frame generally established by regulation or convention in the market place.

Investments are initially recognized at fair value which, in the case of investments other than held-for-trading, includestransaction costs associated with the investments.

Subsequent measurement

Held-for-trading

These are measured at subsequent reporting dates at fair value. Gains and losses on re-measurement are included in the profitand loss account.

Held-to-maturity

These are measured at amortized cost using the effective interest rate method, less any impairment loss recognized to reflectirrecoverable amounts.

Available for sale

Quoted-securities classified as available-for-sale investments are measured at subsequent reporting dates at fair value. Anysurplus / deficit arising thereon is kept in a separate account shown in the balance sheet below equity and taken to the profitand loss account when actually realized upon disposal or when the investment is considered to be impaired.

Unquoted equity securities are valued at the lower of cost and break-up value. A decline in the carrying value is charged tothe profit and loss account. The break-up value of these equity securities is calculated with reference to the net assets of theinvestee company as per the latest available audited financial statements. Investments in other unquoted securities are valuedat cost less impairment losses.



Provision for diminution in the value of securities (except term finance certificates) is made for impairment, if any. Provision fordiminution in the value of term finance certificates is made as per the aging criteria prescribed by the Prudential Regulationsissued by the SBP.

Associates

Associates are all entities over which the Group has a significant influence, but control does not exist.

Investments in associates are accounted for using the equity method of accounting. Under the equity method, the investmentin the associate is initially recognised at cost and the carrying amount is increased or decreased to recognise the investor'sshare of the profit or loss of the investee subsequent to the date of acquisition. Increase / decrease in share of profit or lossof associates is accounted for in the consolidated profit and loss account. The Group applies equity accounting for UBLInsurers Limited, Oman United Exchange Company Limited and its own investment in mutual funds managed by UBL FundManagers Limited that are categorized as associates.

5.6 Advances

Advances are stated net of specific and general provisions. Specific provision against domestic advances is determined onthe basis of the Prudential Regulations and other directives issued by the SBP and is charged to the profit and loss account.General provision against consumer loans is made in accordance with the requirements of the Prudential Regulations issuedby the SBP. General and specific provisions pertaining to overseas advances are made in accordance with the requirementsof the monetary agencies and the regulatory authorities of the respective countries. The Group, from time to time, makesgeneral provision against weaknesses in its portfolio if circumstances warrant on the basis of management's estimation.Advances are written off when there is no realistic prospect of recovery. The amount so written off is a book entry withoutprejudice to the Group's right of recovery against the customer.

The Bank determines write-offs in accordance with the criteria prescribed by the SBP vide BPRD Circular No. 06 datedJune 05, 2007.

5.7 Operating fixed assets and depreciation

5.7.1 Owned

Property and equipment, other than freehold land (which is not depreciated) and capital work-in-progress, are stated at costor revalued amount less accumulated depreciation and accumulated impairment losses (if any). Freehold land is carried atrevalued amount less impairment losses while capital work-in-progress is stated at cost less impairment losses. The cost ofproperty and equipment of foreign branches and subsidiaries includes exchange difference arising on currency translation atthe year-end rates of exchange.

Depreciation is calculated so as to write off the depreciable amount of the assets over their expected economic lives at therates specified in note 11.2 to these consolidated financial statements. The depreciation charge for the year is calculatedafter taking into account residual value, if any, and using methods depending on the nature of the asset and the country ofits location. The residual values, useful lives and depreciation methods are reviewed and adjusted, if appropriate, at eachstatement of financial position date.

Depreciation on additions is charged from the month the asset is available for use. No depreciation is charged in themonth of disposal.

Land and buildings are revalued by professionally qualified valuers with sufficient regularity to ensure that their net carrying valuedoes not differ materially from their fair value.



Surplus arising on revaluation is credited to the surplus on revaluation of fixed assets account. Deficit arising on subsequentrevaluation of fixed assets is adjusted against the balance in the above-mentioned surplus account as allowed under theprovisions of the Companies Ordinance, 1984. The surplus on revaluation of fixed assets, to the extent of incrementaldepreciation charged on the related assets, is transferred to unappropriated profit.

Gains and losses on sale of fixed assets are included in income currently, except that the related surplus on revaluation of fixedassets (net of deferred taxation) is transferred directly to unappropriated profit.

Major renewals and improvements are capitalized and the assets so replaced, if any, are retired. Normal repairs andmaintenance are charged to the profit and loss account as and when incurred.

5.7.2 Leased (Ijarah)

Assets leased out under Ijarah are stated at cost less accumulated depreciation and accumulated impairment losses, if any.Assets under Ijarah are depreciated over the period of the lease term.

Ijarah income is recognized on an accrual basis as and when the rental becomes due.

5.7.3 Intangible assets

Intangible assets having a finite useful life are stated at cost less accumulated amortization and accumulated impairmentlosses, if any. Intangible assets are amortized using the straight line method, from the month when these assets are availablefor use, whereby the cost of the intangible asset is amortized on the basis of the estimated useful life over which economicbenefits are expected to flow to the Group. The residual values and useful lives are reviewed and adjusted, if appropriate, ateach statement of financial position date.

5.8 Impairment

Impairment in available for sale equity investments

Available for sale equity investments are impaired when there has been a significant or prolonged decline in the fair valuebelow its cost. The determination of what is significant or prolonged requires judgment. In making this judgment, the Groupevaluates among other factors, the normal volatility in share price.

Impairment in investments in associates

The Group considers that a decline in the recoverable value of investment in associates below their cost may be evidence ofimpairment. Recoverable value is calculated as the higher of fair value less costs to sell and value in use. An impairment lossis recognized when the recoverable value falls below the carrying value and is charged to the profit and loss. Subsequentreversal of impairment loss, upto the cost of investment in associates is credited to the profit and loss account.

Impairment in non-financial assets (excluding deferred tax)

The carrying amounts of non-financial assets are reviewed at each reporting date for impairment whenever events or changesin circumstances indicate that the carrying amounts of the assets may not be recoverable. If such indication exists, and wherethe carrying value exceeds the estimated recoverable amount, assets are written down to their recoverable amount. Theresulting impairment loss is taken to the profit and loss account except for impairment loss on revalued assets, which isadjusted against the related revaluation surplus to the extent that the impairment loss does not exceed the surplus onrevaluation of the revalued assets.



5.9 Taxation

5.9.1 Current

Provision for current taxation is based on taxable income for the year determined in accordance with the prevailing laws fortaxation on income earned from local as well as foreign operations, as applicable to the respective jurisdictions. The chargefor current tax is calculated using prevailing tax rates. The charge for current tax also includes, where considered necessary,adjustments relating to prior years, arising from assessments made during the year.

5.9.2 Deferred

Deferred tax is recognized using the liability method on all major temporary differences between the amounts attributed toassets and liabilities for financial reporting purposes and the amounts used for taxation purposes. In addition, the Group alsorecords a deferred tax asset on available tax losses. Deferred tax is calculated at the rates that are expected to apply to theperiod when the differences are expected to reverse, based on tax rates that have been enacted or substantively enacted atthe statement of financial position date.

Deferred tax assets are recognized only to the extent that it is probable that future taxable profits will be available against whichthe assets can be utilized.

The carrying amount of the deferred tax asset is reviewed at each statement of financial position date and reduced to theextent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the deferred tax assetto be utilized.

The Bank also recognizes a deferred tax asset / liability on deficit / surplus on revaluation of fixed assets, cash flow hedgereserve and securities which is adjusted against the related deficit / surplus in accordance with the requirements of the revisedInternational Accounting Standard (IAS) 12, Income Taxes.

5.10 Provisions

Provisions are recognized when the Group has a legal or constructive obligation as a result of past events which makesit probable that an outflow of resources will be required to settle the obligation and a reliable estimate of the amountcan be made.

Provision against identified non-funded losses is recognized when intimated and reasonable certainty exists for the Group tosettle the obligation. The loss is charged to the profit and loss account net of expected recovery and the provision is classifiedunder other liabilities.

Provisions are reviewed at each statement of financial position date and are adjusted to reflect the current best estimate.



5.11 Staff retirement and other benefits

5.11.1 United Bank Limited (UBL)

The Bank operates the following staff retirement schemes for its employees:

a) For new employees and for those who opted for the new scheme introduced in 1991, the Bank operates an

- approved contributory provident fund (defined contribution scheme); and

- approved gratuity scheme (defined benefit scheme).

b) For employees who have not opted for the new scheme introduced in 1991, the Bank operates an

- approved funded pension scheme, introduced in 1986 (defined benefit scheme); and

- approved non-contributory provident fund in lieu of the contributory provident fund.

In the year 2001, the Bank modified the pension scheme and introduced a conversion option for employees covered underoption (b) above to move to option (a). This conversion option ceased on December 31, 2003.

The Bank also operates a contributory benevolent fund for all its eligible employees (defined benefit scheme).

Annual contributions towards the defined benefit schemes are made on the basis of actuarial advice using the ProjectedUnit Credit Method.

For defined contribution plans, the Bank pays contributions to the Fund on a periodic basis. The Bank has no further paymentobligation once the contributions have been paid. The contributions are recognized as an expense when they are due. Prepaidcontributions are recognized as an asset to the extent that a cash refund or a reduction of the future payments is available.

Other benefits

a) Employees' compensated absences

The Bank makes provisions for compensated vested and non-vested absences accumulated by its eligible employees onthe basis of actuarial advice under the Projected Unit Credit Method.

b) Post retirement medical benefits (defined benefit scheme)

The Bank provides post retirement medical benefits to eligible retired employees. Provision is made annually to meet thecost of such medical benefits on the basis of actuarial advice under the Projected Unit Credit Method.

c) Employee motivation and retention scheme

The Bank operates a long term motivation and retention scheme for its employees with the objective of rewarding,motivating and retaining its high performing executives and officers. The liability of the Bank is fixed and is determined eachyear based on the performance of the Bank.



Actuarial gains and losses

Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions in excess of the greaterof 10% of the value of the plan assets or 10% of the defined benefit obligation at the end of the last reporting year are chargedor credited to income over the employees' expected average remaining working lives. These limits are calculated and appliedseparately for each defined benefit plan.

Actuarial gains and losses pertaining to long term compensated absences are recognized immediately.

5.11.2 United National Bank Limited (UNBL)

Defined benefit scheme

UNBL operates a pension scheme (defined benefit scheme) for certain staff. This scheme is closed for new members and theaccrual of benefits has ceased from January 01, 2010. The amount charged to the profit and loss account are the gains andlosses on settlements and curtailments. The interest cost and the expected return on assets are included in interest payableand interest receivable. Acturial gains and losses are recognised immediately in the profit and loss account.

The defined benefit scheme is funded, with the assets of the scheme held separately from those of UNBL, in separate trusteeadministered funds. Pension scheme assets are measured at fair value and liabilites are measured on an actuarial basis usingthe Projected Unit Credit Method and discounted at a rate equivalent to the current rate of return on a high-quality corporatebond of equivalent currency and term to the scheme liabilities. The actuarial valuations are obtained at least triennially and areupdated at each balance sheet date. The resulting defined benefit asset or liability is presented separately on the face of thestatement of financial position.

Defined contribution scheme

UNBL operates a defined contributory pension scheme, the amount charged to the profit and loss account in respect ofpension costs and other post-retirement benefits is the contribution payable in the year. Differences between thecontribution payable in the year and contribution actually paid are shown as either accruals or prepayments in thestatement of financial position.

5.11.3 UBL Fund Managers Limited (UFML)

Defined benefit plan

UFML operates an approved gratuity fund for all employees. Annual contributions to the Fund are made on the basis ofactuarial advice using the Projected Unit Credit Method. The net cumulative actuarial gains / losses, in excess of thehigher of the following corridor limits are recognised over the expected remaining average working lives of employees ona straight line basis:

- 10% of the present value of the defined benefit obligation (before deducting plan assets); or

- 10 percent of the fair value of plan assets.

Defined contribution plan

UFML operates an approved contributory provident fund (Defined Contribution Scheme) for all eligible employees.



5.11.4 United Bank AG (Zurich) (UBAG)

UBAGmaintains a contribution-oriented pension scheme for employees who have reached the age of 25. It bears a large shareof the costs of the occupational pension plan for all employees as well as their surviving dependants pursuant to legalrequirements. The employee benefit obligations and the assets serving as coverage are outsourced to a collective insurancefirm. Organisation, management and financing of the pension plan comply with the legal regulations, the deed of foundationand the applicable regulations of the benefit plan.

5.12 Sub-ordinated Debt

Sub-ordinated debt is initially recorded at the amount of proceeds received. Mark-up accrued on subordinated debtis recognised separately as part of other liabilities and is charged to the profit and loss account over the period onan accrual basis.

5.13 Borrowings / deposits and their cost

a) Borrowings / deposits are recorded at the proceeds received.

b) Borrowings / deposits costs are recognized as an expense in the period in which these are incurred.

5.14 Revenue recognition

Revenue is recognized to the extent that the economic benefits will flow to the Group and the revenue can be reliablymeasured. The following recognition criteria must be met before revenue is recognized.

5.14.1 Advances and investments

Mark-up / return on performing advances and investments is recognized on a time proportionate basis over the term of theadvances and investments. Where debt securities are purchased at premium or discount, such premium / discount isamortized through the profit and loss account over the remaining period of maturity.

Interest or mark-up recoverable on non-performing advances and classified investments is recognized on receipt basis.Interest / return / mark-up on rescheduled / restructured loans and advances and investments is recognized as permitted bythe regulations of the SBP or overseas regulatory authorities of the countries where the branches and subsidiaries operate,except where, in the opinion of the management, it would not be prudent to do so.

5.14.2 Dividend income

Dividend income is recognised when the right to receive the dividend is established.

5.14.3 Fee, brokerage and commission

Fee, brokerage, commission and other income is recognized on an accrual basis.

5.15 Foreign currencies

5.15.1 Functional and presentation currency

Items included in the financial statements are measured using the currency of the primary economic environment in whichthe Group operates. The financial statements are presented in Pakistani Rupees, which is the Group's functional andpresentation currency.



5.15.2 Foreign currency transactions

Transactions in foreign currencies are translated to rupees at the foreign exchange rates prevailing on the transaction date.Monetary assets and liabilities in foreign currencies are expressed in rupee terms at the rates of exchange prevailing at thestatement of financial position date. Forward foreign exchange contracts and foreign bills purchased are valued at forward ratesapplicable to their respective maturities.

5.15.3 Foreign operations and subsidiaries

The assets and liabilities of foreign operations and subsidiaries are translated to rupees at exchange rates prevailing at thestatement of financial position date. The results of foreign operations and subsidiaries are translated at the average rate ofexchange for the year.

5.15.4 Translation gains and losses

Translation gains and losses are taken to the profit and loss account, except those arising on the translation of net investmentin foreign branches and subsidiaries which are taken to capital reserve (Exchange Translation Reserve) until the disposal ofthe net investment at which time these are recognised in the profit and loss account.

5.15.5 Commitments

Commitments for outstanding forward foreign exchange contracts are disclosed in the consolidated financial statements atcontracted rates. Contingent liabilities / commitments for letters of credit and letters of guarantee denominated in foreigncurrencies are expressed in rupee terms at the rates of exchange prevailing at the date of the statement of financial position.All other commitments are disclosed in the consolidated financial statements at the committed amount.

5.16 Financial instruments

5.16.1 Financial assets and liabilities

Financial instruments carried on the statement of financial position include cash and bank balances, lendings to financialinstitutions, investments, advances, certain receivables, bills payable, borrowings from financial institutions, deposits, sub-ordinated loans and certain other payables. The particular recognition methods adopted for significant financial assets andfinancial liabilities are disclosed in the individual policy notes associated with them.

5.16.2 Derivative financial instruments

Derivative financial instruments are initially recognized at fair value on the date on which the derivative contract is entered intoand are subsequently re-measured at fair value using appropriate valuation techniques. All derivative financial instruments arecarried as assets when their fair value is positive and liabilities when their fair value is negative. Any change in the fair value ofderivative financial instruments is taken to the profit and loss account.

5.16.3 Hedge accounting

The Group makes use of derivative instruments to manage exposures to interest rate, foreign currency and credit risks,including exposures arising from forecast transactions. In order to manage particular risks, the Group applies hedge accountingfor transactions which meet the specified criteria.

At the inception of the hedge relationship, the Group formally documents the relationship between the hedged item and thehedging instrument, including the nature of the risk, the objective and strategy for undertaking the hedge and the method thatwill be used to assess the effectiveness of the hedging relationship.



Also, at the inception of the hedge relationship, a formal assessment is undertaken to ensure the hedging instrument isexpected to be highly effective in offsetting the designated risk in the hedged item. Hedges are formally assessed each quarter.A hedge is regarded as highly effective if the changes in fair value or cash flows attributable to the hedged risk during the periodfor which the hedge is designated are expected to offset in a range of 80% to 125%. For situations where the hedged itemis a forecast transaction, the Group assesses whether the transaction is highly probable and presents an exposure to variationsin cash flows that could ultimately affect the profit and loss account.

(a) Fair value hedges

For designated and qualifying fair value hedges, the change in the fair value of a hedging derivative is recognised in theprofit and loss account within other income. The change in the fair value of the hedged item attributable to the riskhedged is recorded as part of the carrying value of the hedged item and is also recognised in the profit and loss accountwithin other income.

(b) Cash flow hedges

For qualifying cash flow hedges, the fair value gain or loss associated with the effective portion of the cash flow hedge isrecognised initially in the statement of changes in equity, and recycled to the profit and loss account in the periods whenthe hedged item will affect profit or loss. Any ineffective portion of the gain or loss on the hedging instrument is recognisedin the profit and loss account immediately.

When a hedging instrument expires or is sold, or when a hedge no longer meets the criteria for hedge accounting, anycumulative gain or loss existing in equity at that time remains in equity and is recognised when the hedged item is ultimatelyrecognised in the profit and loss account. When a forecast transaction occurs or is no longer expected to occur, thecumulative gain or loss that was recognised in equity is immediately transferred to the profit and loss account.

5.16.4 Off setting

Financial assets and financial liabilities are set off and the net amount is reported in the consolidated financial statementswhen there is a legally enforceable right to set off and the Group intends to either settle on a net basis, or to realize the assetsand to settle the liabilities simultaneously.

5.17 Assets acquired in satisfaction of claims

The Group occasionally acquires assets in settlement of certain advances. These are stated at the lower of the carrying valueof the related advances and the current fair value of such assets.

5.18 Segment reporting

A segment is a distinguishable component of the Group that is engaged either in providing particular products or services(business segment), or in providing products or services within a particular economic environment (geographical segment),which is subject to risks and rewards that are different from those of other segments.

5.18.1 Business segments







(c) Retail banking



Commercial banking includes project finance, real estate, export finance, trade finance, factoring, leasing, lending,guarantees, bills of exchange and deposits.

(e) Asset management

It includes discretionary and non discretionary fund management activities in the form of pooled, segregated, retail,institutional, private equity, open, close ended funds etc.

(f) Others

It includes results of support functions of the Group and subsidiary which cannot be classified in any of theabove segments.

5.18.2 Geographical segments

The Group operates in five geographical regions being:

- Pakistan- Karachi Export Processing Zone- United States of America- Middle East- Europe

5.19 Dividend and appropriation to reserves

Dividends and appropriations to reserves are recorded in the year in which these are approved, except appropriations requiredby the law which are recorded in the period to which they pertain.

5.20 Earnings per share

The Group presents basic and diluted earnings per share (EPS) for its shareholders. Basic EPS is calculated by dividingthe profit or loss attributable to ordinary shareholders of the Group by the weighted average number of ordinary sharesoutstanding during the year.




6. CASH AND BALANCES WITH TREASURY BANKS

In handLocal currency 11,680,346 10,911,350Foreign currency 2,594,433 3,153,898

14,274,779 14,065,248

With State Bank of Pakistan inLocal currency current account 6.1 22,362,478 18,937,149Local currency deposit account 3,864 3,864Foreign currency current account 6.2 1,287,860 1,125,581Foreign currency deposit account 6.3 3,781,588 3,365,199

27,435,790 23,431,793

With other central banks in foreign currency current account 6.4 12,111,644 15,398,540With National Bank of Pakistan in local currency current account 13,798,332 8,609,162National Prize Bonds 46,681 57,398

67,667,226 61,562,141

6.1 This represents current accounts maintained with the SBP under the requirements of section 22 (Cash Reserve Requirement)of the Banking Companies Ordinance, 1962.

6.2 This represents US Dollar Settlement Account maintained with SBP and includes current accounts maintained with SBP tomeet cash reserve requirement of 5% on FE 25 deposits, under the requirements of BSD Circular No. 18 dated March 31,2001 and OSED Circular No. 1 dated November 13, 2006.

6.3 This represents special cash reserve requirement maintained with SBP under the requirements of BSD Circular No. 14 of2008 dated June 21, 2008. The return on this account is declared by SBP on a monthly basis and, as at December 31, 2010carries, mark-up at the rate of 0% (2009: 0%) per annum.

6.4 Deposits with other central banks are maintained to meet the minimum cash reserves and capital requirements pertaining tothe foreign branches and subsidiaries of the Group.


7. BALANCES WITH OTHER BANKS

Inside PakistanIn current accounts - 26,715In deposit accounts 7.1 1,609 124,151

1,609 150,866

Outside PakistanIn current accounts 5,277,503 5,200,157In deposit accounts 7.1 20,701,816 8,698,967

25,979,319 13,899,12425,980,928 14,049,990

7.1 These carry mark-up at rates ranging from 0.10% to 12.50% (2009: 0.12% to 11.50%) per annum.




8. LENDINGS TO FINANCIAL INSTITUTIONS

Call money lendings 8.2 450,000 1,110,610Repurchase agreement lendings 8.3 4,431,877 17,941,216Other lendings to financial institutions 8.4 7,502,901 4,671,156

12,384,778 23,722,982Provision against lendings to financial institutions 8.5 - (560,852)

12,384,778 23,162,130

8.1 Particulars of lendings to financial institutions


12,384,778 23,162,130

8.2 These are unsecured lendings carrying mark-up at rates ranging from 10.25% to 11.75% per annum (2009: 11.95% to12.65% per annum) and are due to mature latest by March 2011.

8.3 Securities held as collateral against repurchase agreement lendings

2010 2009Held by Further given Total Held by Further given TotalGroup as collateral / Group as collateral /

sold sold(Rupees in '000)

Market Treasury Bills 2,881,877 - 2,881,877 16,691,063 990,566 17,681,629Pakistan Investment Bonds 650,000 900,000 1,550,000 159,587 100,000 259,587

3,531,877 900,000 4,431,877 16,850,650 1,090,566 17,941,216

These carry mark-up at rates ranging from 11.75% to 13.50% per annum (2009: 10.75% to 12.35% per annum) and are dueto mature latest by February 2011.

8.4 Lendings pertaining to domestic operations carry mark-up at rates ranging from 3.00% to 15.34% per annum (2009: 3.00%to 15.87% per annum) and are due to mature latest by April 2014, whereas lendings pertaining to overseas operations carrymark-up at rates ranging from 0.75% to 3.8% per annum (2009: 1.03% to 3.46% per annum) and are due to mature latestby December 2012.

8.5 This represents provision made against lendings to overseas financial institutions with movement as follows:


Opening balance 560,852 -Charged during the year - 560,852Transferred during the year 8.5.1 (560,852) -Closing balance - 560,852

8.5.1 The balance has been transferred to 'Investments' on issuance of recovery notes and preference shares by the financialinstitution.



9. INVESTMENTS2010 2009

9.1 Investments by types Note Held by Given as Total Held by Given as TotalGroup collateral Group collateral

(Rupees in '000)


Market Treasury Bills 12,984,400 1,189,144 14,173,544 3,268,035 - 3,268,035Pakistan Investment Bonds 805,257 - 805,257 438,505 97,306 535,811Ordinary shares of listed companies 8,928 - 8,928 - - -Foreign securities 1,392,186 - 1,392,186 - - -Term Finance Certificate 106,431 - 106,431 - - -Government of Pakistan - Eurobonds 73,494 - 73,494 76,206 - 76,206Units of Mutual Funds 46,966 - 46,966 214,865 - 214,865Sukuk Bonds 22,852 - 22,852 15,719 - 15,719

15,440,514 1,189,144 16,629,658 4,013,330 97,306 4,110,636Available for sale securities

Market Treasury Bills 39,519,598 20,695,498 60,215,096 35,572,747 3,978,323 39,551,070Pakistan Investment Bonds 18,988,194 536,428 19,524,622 16,728,759 - 16,728,759Government of Pakistan - Sukuk 4,122,000 - 4,122,000 3,470,000 - 3,470,000Government of Pakistan - Eurobonds 3,938,516 - 3,938,516 3,870,557 - 3,870,557Ordinary shares of listed companies 3,629,335 - 3,629,335 3,644,398 - 3,644,398Preference shares 472,097 - 472,097 197,015 - 197,015Ordinary shares of unlisted companies 9.7 445,632 - 445,632 441,824 - 441,824Term Finance Certificates 2,163,818 - 2,163,818 1,948,702 - 1,948,702Units of mutual funds 164,662 - 164,662 191,299 - 191,299Foreign securities 15,285,049 - 15,285,049 12,740,879 - 12,740,879

88,728,901 21,231,926 109,960,827 78,806,180 3,978,323 82,784,503Held to maturity securities

Market Treasury Bills 58,843,648 - 58,843,648 11,611,110 - 11,611,110Pakistan Investment Bonds 4,392,225 - 4,392,225 2,497,301 - 2,497,301Government of Pakistan - Sukuk 30,000 - 30,000 30,000 - 30,000Government of Pakistan - Eurobonds 696,506 - 696,506 922,505 - 922,505Government of Pakistan - Guaranteed Bonds 51,399 - 51,399 1,485,057 - 1,485,057Term Finance Certificates 27,106,749 - 27,106,749 25,289,199 - 25,289,199Sukuk Bonds 2,548,739 - 2,548,739 2,640,040 - 2,640,040Participation Term Certificates 19,202 - 19,202 26,838 - 26,838Debentures 4,392 - 4,392 4,592 - 4,592Foreign securities 9,772,562 - 9,772,562 4,001,718 - 4,001,718CDC SAARC Fund 428 - 428 421 - 421

103,465,850 - 103,465,850 48,508,781 - 48,508,781Associates

United Growth and Income Fund 9.9.1 3,023,430 - 3,023,430 5,279,234 - 5,279,234UBL Liquidity Plus Fund 9.9.2 2,613,475 - 2,613,475 749,831 - 749,831United Composite Islamic Fund 9.9.3 338,110 - 338,110 539,012 - 539,012United Islamic Income Fund 9.9.4 196,425 - 196,425 249,850 - 249,850United Stock Advantage Fund 9.9.5 354,897 - 354,897 305,297 - 305,297UBL Participation Protected Plan 9.9.6 184,639 - 184,639 170,136 - 170,136UBL Capital Protected Fund - II 9.9.7 108,757 - 108,757 - - -UBL Savings Income Fund 9.9.8 174,469 - 174,469 - - -UBL Islamic Savings Fund 9.9.9 197,224 - 197,224 - - -UBL Islamic Retirement Savings Fund 9.9.10 98,310 - 98,310 - - -UBL Retirement Savings Fund 9.9.11 99,681 - 99,681 - - -UBL Capital Protected Fund - I 9.9.12 61,652 - 61,652 90,299 - 90,299UBL Insurers Limited 9.9.13 150,038 - 150,038 67,583 - 67,583Oman United Exchange Company, Muscat 9.9.14 65,108 - 65,108 71,399 - 71,399

9.9 7,666,215 - 7,666,215 7,522,641 - 7,522,641215,301,480 22,421,070 237,722,550 138,850,932 4,075,629 142,926,561

Provision for diminution in value of investments 9.3 (2,649,005) - (2,649,005) (2,146,794) - (2,146,794)Investments (net of provisions) 212,652,475 22,421,070 235,073,545 136,704,138 4,075,629 140,779,767Deficit on revaluation of available for sale securities 21.2 (3,311,399) (11,718) (3,323,117) (3,045,011) 2,404 (3,042,607)Deficit on revaluation of held for trading securities 9.4 (33,050) (164) (33,214) (1,862) (720) (2,582)Total investments 209,308,026 22,409,188 231,717,214 133,657,265 4,077,313 137,734,578




9.2 Investments by segments

Federal Government SecuritiesMarket Treasury Bills 127,315,215 48,577,758Pakistan Investment Bonds 24,722,104 19,761,871Government of Pakistan - Sukuks 4,152,000 3,500,000Government of Pakistan - Euro Bonds 4,708,516 4,869,268Government of Pakistan - Guaranteed Bonds 51,399 1,485,057

160,949,234 78,193,954

Foreign SecuritiesMarket Treasury Bills 5,917,073 5,852,457Government securities 5,043,926 3,214,893CDC SAARC Fund 428 421Other securities 21,405,871 13,527,704

32,367,298 22,595,475

Ordinary SharesListed companies 3,638,263 3,644,398Unlisted companies 9.7 445,632 441,824

4,083,895 4,086,222Preference Shares 472,097 197,015Units of Mutual Funds 211,628 406,164

Term Finance CertificatesListed 2,437,296 2,667,787Unlisted 26,939,702 24,570,114

29,376,998 27,237,901Sukuk Bonds 2,571,591 2,655,759Debentures 4,392 4,592Participation Term Certificates 19,202 26,838

31,972,183 29,925,090Investment in associates 9.9 7,666,215 7,522,641Total investments at cost 237,722,550 142,926,561

Provision for diminution in value of investments 9.3 (2,649,005) (2,146,794)Investments (net of provisions) 235,073,545 140,779,767

Deficit on revaluation of available for sale securities 21.2 (3,323,117) (3,042,607)Deficit on revaluation of held for trading securities 9.4 (33,214) (2,582)Total investments 231,717,214 137,734,578



2010 2009(Rupees in ‘000)

9.3 Particulars of provision for diminution in value of investments:

9.3.1 Opening balance 2,146,794 2,188,793Charged during the year 346,263 1,162,066(Reversal) / impairment loss on associate (25,394) 25,394Reversed during the year (16,843) -

304,026 1,187,460Reversed on disposal (340,488) (1,208,712)Transfers 548,318 -

207,830 (1,208,712)Written off during the year (9,645) (20,747)Closing balance 2,649,005 2,146,794

9.3.2 Particulars of provision for diminution in value of investments by type

Available for sale securitiesOrdinary shares of listed companies 2,017,861 1,832,026Ordinary shares of unlisted companies 141,761 150,524Preference shares 6,090 2,436Foreign securities 281,585 -

2,447,297 1,984,986

Held to maturity securitiesTerm Finance Certificates 100,448 104,985Sukuk 77,667 -Debentures 4,391 4,591Participation Term Certificates 19,202 26,838

201,708 136,414Associates - 25,394

2,649,005 2,146,794

9.3.3 Particulars of provision for diminution in value of investments by segment

Ordinary SharesListed companies 2,017,861 1,832,026Unlisted companies 141,761 150,524Foreign securities 281,585 -

2,441,207 1,982,550

Preference shares 6,090 2,436

Term Finance Certificates, Debentures and Participation Term CertificatesTerm Finance Certificates 100,448 104,985Sukuk 77,667 -Debentures 4,391 4,591Participation Term Certificates 19,202 26,838

201,708 136,414Associates - 25,394

2,649,005 2,146,794



2010 2009(Rupees in ‘000)

9.4 Unrealized loss on revaluation of investments classified as held for tradingMarket Treasury Bills (353) 1,416Pakistan Investment Bonds 2,440 (4,422)Ordinary shares of listed companies 91 -Foreign Securities (40,543) -Term Finance Certificates 7,834 -Mutual Funds (2,683) 424

(33,214) (2,582)

9.5 Investments include certain approved / government securities which are held by the Group to comply with the StatutoryLiquidity Requirement as set out under Section 29 of the Banking Companies Ordinance, 1962.

9.6 Investments include Rs.282 million (2009: Rs.282 million) held by the State Bank of Pakistan and National Bank of Pakistanas pledge against demand loan, TT / DD discounting facilities and foreign exchange exposure limit sanctioned to the Groupand Rs.5 million (2009: Rs.5 million) held by the Controller of Military Accounts (CMA) under Regimental Fund Arrangements.

9.7 This includes the Group's subscription towards the paid-up capital of Khushhali Bank Limited amounting to Rs.200 million(2009: Rs.200 million). Pursuant to Section 10 of the Khushhali Bank Ordinance, 2000 strategic investors including the Groupcould not sell or transfer their investment before a period of five years that has expired on October 10, 2005. Thereafter, suchsale/ transfer would be subject to the prior approval of the SBP. In addition, the profit of Khushhali Bank Limited cannot bedistributed as dividend under clause 35(i) of the Khushhali Bank Ordinance, 2000.

The SBP prepared a conversion structure for Khushhali Bank Limited to operate as a Microfinance Bank under theMicrofinance Institutions Ordinance, 2001 which was approved by the Ministry of Finance. The scheme of conversion was alsoapproved by the shareholders of Khushhali Bank Limited in an Extra-Ordinary General Meeting held on December 17, 2007.Accordingly, an application for incorporation was submitted to the SECP on February 15, 2008. The SECP has incorporatedKhushhali Bank Limited under the Microfinance Institutions Ordinance, 2001 and issued a Certificate of Incorporation onFebruary 28, 2008 under section 32 of the Companies Ordinance, 1984.

In a meeting between SBP and the Board of Directors of Khushhali Bank Limited held on June 12, 2008, it was agreed thatsince Khushhali Bank Limited has a majority of private sector commercial banks as its shareholders and is legally a privatesector bank, it is required to be managed as a private sector institution.

In order to achieve the strategic restructuring of Khushhali Bank Limited, a consortium of commercial banks including theGroup decided to completely divest their shareholding in Khushhali Bank Limited. Thereafter, the Consortium appointedAdvisors (financial, legal and accounting) for conducting preliminary due diligence for valuation and preparing a data room forthe prospective purchasers. Khushhali Bank Limited, on behalf of the Consortium of the Commercial Banks has sought priorclearance/approval of the SBP for appointment of Advisors to conduct due diligence of Khushhali Bank Limited.

SBP has conveyed its, in principle, no objection to the consortium of selling shareholders of Khushhali Bank Limited forconducting due diligence/valuation of Khushhali Bank Limited subject to compliance with all the applicablelaws/rules/regulations etc. The due diligence / valuation is in the process of being carried out. The establishment of a dataroom and due diligence report/ valuation from Accounting and Financial Advisor is in process.



9.8 Information relating to investments in Ordinary and Preference shares / certificates of listed and unlisted companies /modarabas / mutual funds, term finance certificates, debentures and bonds, required to be disclosed as part of the financialstatements under State Bank of Pakistan's BSD Circular No. 4 dated February 17, 2006, is given in Annexure 'A' to theseconsolidated financial statements. Details in respect of quality of available for sale securities are also disclosed in Annexure 'A'.

9.9 Investment in associates

This includes investment in the seed capital aggregating to Rs.630 million (2009: Rs.1,100 million) which is required to be keptfor a period of two years.

2010 2009(Rupees in ‘000)

9.9.1 United Growth and Income Fund

Investment as at January 01 5,279,234 327,193(Redemption) / investment during the year (1,993,891) 2,984,094Transfer - 1,836,533Share of profit 42,202 239,488Dividend distribution (250,385) (118,083)Share of unrealised (deficit) / surplus on assets (53,730) 10,009Balance as at December 31 3,023,430 5,279,234

Percentage holding as at December 31 70.85% 35.68%

9.9.1.1 United Growth and Income Fund is an open ended mutual fund, listed on the Karachi Stock Exchange. Being an open endedmutual fund, the fund offers units for public subscription on a continuous basis.

9.9.1.2 The details of assets, liabilities, revenues and profits of the Fund as of December 31, based on reviewed financial statementsare as follows:

Assets Liabilities Revenue Profit(Rupees in '000)

United Growth and Income Fund 2010 4,275,118 7,717 871,447 324,134

2009 14,844,857 48,940 1,568,234 1,137,702



2010 2009(Rupees in ‘000)

9.9.2 United Liquidity Plus Fund

Investment as at January 01 749,831 -Investment during the year 1,874,833 745,469Share of profit 64,591 7,016Dividend distribution (75,421) (2,661)Share of unrealised (deficit) / surplus on assets (359) 7Balance as at December 31 2,613,475 749,831


9.9.2.1 United Liquidity Plus Fund is an open ended mutual fund, listed on the Islamabad Stock Exchange. Being an open endedmutual fund, the fund offers units for public subscription on a continuous basis.



United Liquidity Plus Fund 2010 12,295,334 75,871 1,126,713 933,133

2009 4,267,245 3,571 218,554 187,547

2010 2009(Rupees in ‘000)

9.9.3 United Composite Islamic Fund

Investment as at January 01 539,012 338,024(Redemption) / investment during the year (262,811) 6,547Share of profit 70,735 189,412Share of unrealised (deficit) / surplus on assets (8,826) 5,029Balance as at December 31 338,110 539,012


9.9.3.1 United Composite Islamic Fund is an open ended mutual fund, listed on the Islamabad Stock Exchange. Being an openended mutual fund, the fund offers units for public subscription on a continuous basis.



United Composite Islamic Fund 2010 489,848 6,369 134,181 78,441

2009 808,306 1,704 394,105 360,516



2010 2009(Rupees in ‘000)

9.9.4 United Islamic Income Fund

Investment as at January 01 249,850 308,700Redemption during the year (50,000) (83,852)Share of profit 33,783 12,338Dividend distribution (8,075) (9,575)Share of unrealised (deficit) / surplus on assets (29,133) 22,239Balance as at December 31 196,425 249,850


9.9.4.1 United Islamic Income Fund is an open ended mutual fund, listed on the Islamabad Stock Exchange. Being an open endedmutual fund, the fund offers units for public subscription on a continuous basis.



United Islamic Income Fund 2010 411,540 2,974 141,110 84,842

2009 1,265,397 3,652 172,447 71,325

2010 2009(Rupees in ‘000)

9.9.5 United Stock Advantage Fund

Investment as at January 01 305,297 142,766(Redemption) / investment during the year (1,075) 35,200Share of profit 40,421 121,231Share of unrealised surplus on assets 10,254 6,100Balance as at December 31 354,897 305,297


9.9.5.1 United Stock Advantage Fund is an open ended mutual fund, listed on the Karachi Stock Exchange. Being an open endedmutual fund, the fund offers units for public subscription on a continuous basis.


9.9.5.3 The share of profit includes gain on account of redemption made in the Fund during the year.


United Stock Advantage Fund 2010 1,124,139 4,808 427,056 (629,162)

2009 1,951,232 47,966 904,450 835,578



2010 2009(Rupees in ‘000)

9.9.6 UBL Participation Protected Plan

Investment as at January 01 170,136 138,887Share of profit 14,503 31,249Balance as at December 31 184,639 170,136

9.9.6.1 UBL Participation Protected Plan is an open ended administrative plan with the objective of earning potentially high returnsthrough dynamic asset allocation between equity and fixed income investments. The life of the plan is 3 years.

2010 2009(Rupees in ‘000)

9.9.7 UBL Capital Protected Fund - II

Investment as at January 01 - -Investment during the year 103,459 -Share of profit 5,298 -Balance as at December 31 108,757 -

Percentage holding as at December 31 53.04% -

9.9.7.1 UBL Capital Protected Fund II is an open ended capital protected fund, listed on the Islamabad Stock Exchange. Being an openended mutual fund, the fund offers units for public subscription on a continuous basis.



UBL Capital Protected Fund - II 2010 206,169 1,133 14,305 10,594

2010 2009(Rupees in ‘000)

9.9.8 UBL Savings Income Fund

Investment as at January 01 - -Investment during the year 169,577 -Share of profit 4,898 -Share of unrealised deficit on assets (6) -Balance as at December 31 174,469 -


9.9.8.1 UBL Savings Income Fund is an open ended mutual fund, listed on the Islamabad Stock Exchange. Being an open endedmutual fund, the fund offers units for public subscription on a continuous basis.



UBL Savings Income Fund 2010 923,788 16,222 28,611 21,305



2010 2009(Rupees in ‘000)

9.9.9 UBL Islamic Savings Fund

Investment as at January 01 - -Investment during the year 195,376 -Share of profit 1,775 -Share of unrealised surplus on assets 73 -Balance as at December 31 197,224 -


9.9.9.1 UBL Islamic Savings Fund is an open ended Shariah Compliant (Islamic) Income fund listed on the Islamabad Stock Exchange.Being an open ended mutual fund, the fund offers units for public subscription on a continuous basis.



UBL Islamic Savings Fund 2010 1,241,983 3,624 14,192 20,244

2010 2009(Rupees in ‘000)

9.9.10 UBL Islamic Retirement Savings Fund

Investment as at January 01 - -Investment during the year 90,000 -Share of profit 8,720 -Share of unrealised deficit on assets (410) -Balance as at December 31 98,310 -


9.9.10.1 UBL Islamic Retirement Savings Fund is an open ended pension fund and offers units for public subscription on a continuousbasis.



UBL Islamic Retirement Savings Fund 2010 103,218 852 10,796 9,130



2010 2009(Rupees in ‘000)

9.9.11 UBL Retirement Savings Fund

Investment as at January 01 - -Investment / (redemption) during the year 90,000 -Share of profit 9,665 -Share of unrealised surplus on assets 16 -Balance as at December 31 99,681 -


9.9.11.1 UBL Retirement Savings Fund is an open ended pension fund and offers units for public subscription on a continuous basis.



UBL Retirement Savings Fund 2010 111,488 813 12,303 10,476

2010 2009(Rupees in ‘000)

9.9.12 UBL Capital Protected Fund - I

Investment as at January 01 64,905 75,500(Redemption) / Investment during the year (1,105) 1,122Share of (loss) / profit (27,523) 13,677Share of unrealised deficit on assets (19) -

36,258 90,299Reversal / (impairment) loss 25,394 (25,394)Balance as at December 31 61,652 64,905


9.9.12.1 UBL Capital Protected Fund (UCPF-1) is a closed ended mutual fund, listed on the Islamabad Stock Exchange.



UBL Capital Protected Fund - I 2010 856,256 10,283 85,644 68,440

2009 782,298 4,605 134,019 121,250



2010 2009(Rupees in ‘000)

9.9.13 UBL Insurers Limited

Investment as at January 1 67,583 52,154Investment during the year 90,000 60,000Share of loss (7,545) (44,571)Balance as at December 31 150,038 67,583


9.9.13.1 UBL Insurers Limited is an unquoted public company . The principal objective of the Company is to conduct general insurancebusiness

9.9.13.2 The details of assets, liabilities, revenues and profits of the insurance company as at December 31, based on unauditedfinancial statements are as follows:

Assets Liabilities Revenue Loss(Rupees in '000)

UBL Insurers Limited 2010 1,075,333 575,205 270,760 (26,717)

2009 824,430 599,154 264,095 (129,148)

2010 2009(Rupees in ‘000)

9.9.14 Oman United Exchange Company

Investment as at January 01 71,399 72,307Share of profit 15,838 22,586Dividend distribution (22,129) (23,494)Balance as at December 31 65,108 71,399


9.9.14.1 Oman United Exchange Company LLC is incorporated in the Sultanate of Oman as a limited liability company and is primarilyengaged in money changing, issuing of drafts and the purchase and sale of travellers cheques.

9.9.14.2 The details of assets, liabilities, revenues and profits of the company as of December 31, based on reviewed financialstatements are as follows:


Oman United Exchange Company 2010 307,397 46,965 159,390 58,775

2009 340,644 55,048 173,265 87,134




Note Performing Non-performing Total2010 2009 2010 2009 2010 2009

(Rupees in '000)

10. ADVANCES

Loans, cash credits, running

finances, etc.

In Pakistan 10.2 228,034,418 244,389,450 40,726,130 32,220,534 268,760,548 276,609,984

Outside Pakistan 82,913,093 89,370,415 5,219,441 5,028,007 88,132,534 94,398,422

310,947,511 333,759,865 45,945,571 37,248,541 356,893,082 371,008,406

Bills discounted and purchased

(excluding government treasury bills)

Payable in Pakistan 12,429,950 11,607,055 2,235,582 2,400,013 14,665,532 14,007,068

Payable outside Pakistan 4,489,485 5,061,796 431,925 416,683 4,921,410 5,478,479

16,919,435 16,668,851 2,667,507 2,816,696 19,586,942 19,485,547

Advances - gross 327,866,946 350,428,716 48,613,078 40,065,237 376,480,024 390,493,953

Provision against advances 10.5

- Specific - - (33,544,116) (27,700,850) (33,544,116) (27,700,850)

- General (1,425,496) (713,507) - - (1,425,496) (713,507)

(1,425,496) (713,507) (33,544,116) (27,700,850) (34,969,612) (28,414,357)

Advances - net of provision 326,441,450 349,715,209 15,068,962 12,364,387 341,510,412 362,079,596

Performing Non-performing Total

2010 2009 2010 2009 2010 2009

(Rupees in '000)

10.1 Particulars of advances - gross

10.1.1 In local currency 235,079,268 253,182,865 42,816,359 33,781,868 277,895,627 286,964,733

In foreign currencies 92,787,678 97,245,851 5,796,719 6,283,369 98,584,397 103,529,220

327,866,946 350,428,716 48,613,078 40,065,237 376,480,024 390,493,953

10.1.2 Short term 247,828,594 232,398,519 - - 247,828,594 232,398,519

Long term 80,038,352 118,030,197 48,613,078 40,065,237 128,651,430 158,095,434

327,866,946 350,428,716 48,613,078 40,065,237 376,480,024 390,493,953

10.2 This includes performing advances given under various Islamic financing modes amounting to Rs.461.342 million (2009: Rs.638.131 million).

10.3 Non-performing advances include advances having gross book value of Rs.5,774.675 million (2009: Rs.1,596.136 million) and net book value ofRs.2,110.614 million (2009: Rs.919.006 million) which, though restructured and performing have been placed under non-performing status as requiredby the revised Prudential Regulations issued by the SBP, which requires monitoring for at least one year before any upgradation is considered.



10.4 Advances include Rs.48,613 million (2009: Rs.40,065 million) which have been placed under non-performing status as detailed below:

2010

Category of Classification Classified Advances Provision Required Provision Held


(Rupees in '000)


Mentioned * 336,651 - 336,651 - - - - - -

Substandard 6,320,318 1,037,361 7,357,679 1,414,035 259,344 1,673,379 1,414,035 259,344 1,673,379

Doubtful 5,716,839 3,005,088 8,721,927 1,530,397 1,502,546 3,032,943 1,530,397 1,502,546 3,032,943

Loss 30,587,904 1,608,917 32,196,821 27,239,551 1,598,243 28,837,794 27,239,551 1,598,243 28,837,794

42,961,712 5,651,366 48,613,078 30,183,983 3,360,133 33,544,116 30,183,983 3,360,133 33,544,116

2009

Category of Classification Classified Advances Provision Required Provision Held


(Rupees in '000)


Mentioned * 386,517 923,161 1,309,678 - - - - - -

Substandard 3,802,275 1,474,283 5,276,558 891,498 368,571 1,260,069 891,498 368,571 1,260,069

Doubtful 6,007,332 1,696,401 7,703,733 2,651,589 848,206 3,499,795 2,651,589 848,206 3,499,795

Loss 24,424,423 1,350,845 25,775,268 21,602,032 1,338,954 22,940,986 21,602,032 1,338,954 22,940,986

34,620,547 5,444,690 40,065,237 25,145,119 2,555,731 27,700,850 25,145,119 2,555,731 27,700,850

* The Other Assets Especially Mentioned category includes agricultural finance inside Pakistan and finances relating to overseas subsidiaries.

10.5 Particulars of provision against advances

2010 2009

Note Specific General Total Specific General Total

(Rupees in '000)

Opening balance 27,700,850 713,507 28,414,357 18,567,383 1,223,697 19,791,080

Exchange adjustments 196,861 - 196,861 274,342 (10,910) 263,432

Charge / (Reversals)

Charge for the year 8,078,140 910,973 8,989,113 11,552,516 - 11,552,516

Reversals (1,956,300) (194,477) (2,150,777) (944,245) (963,344) (1,907,589)

6,121,840 716,496 6,838,336 10,608,271 (963,344) 9,644,927

Transfers 86,812 (4,507) 82,305 (464,064) 464,064 -

Amounts written off 10.6 (562,247) - (562,247) (1,285,082) - (1,285,082)

Closing balance 33,544,116 1,425,496 34,969,612 27,700,850 713,507 28,414,357

10.5.1 General provision represents provision amounting to Rs.375.327 million (2009: Rs.569.195 million) against consumer finance portfolio as required by the PrudentialRegulations issued by the SBP, Rs.415.169 million (2009: Rs.144.311 million) pertaining to overseas advances to meet the requirements of monetary agencies andregulatory authorities of the respective countries in which the overseas branches operate. General provisions also include an amount of Rs.635 million (2009: Rs.Nil)which the Group carries as matter of prudence given the current economic environment prevailing in Pakistan and is based on management estimates.

10.5.2 Particulars of provision against advances

2010 2009

Specific General Total Specific General Total

(Rupees in '000)

In local currency 30,183,984 1,010,327 31,194,311 24,327,702 569,195 24,896,897

In foreign currencies 3,360,132 415,169 3,775,301 3,373,148 144,312 3,517,460

33,544,116 1,425,496 34,969,612 27,700,850 713,507 28,414,357




10.6 Particulars of write-offs

10.6.1 Against provisions 10.5 562,247 1,285,082Directly charged to profit and loss account 1,007,896 1,485,976

1,570,143 2,771,058

10.6.2 Write-offs of Rs.500,000 and above 10.7 764,563 1,588,946Write-offs of Rs.500,000 and above - subsidiaries 10.6.3 17,221 -Write-offs of below Rs.500,000 788,359 1,182,112

1,570,143 2,771,058

10.6.3 Due to restriction in local regulations of foreign subsidiaries on disclosure, the name of parties written off cannot be disclosed.

10.7 Details of loan write-offs of Rs.500,000 and above

In terms of sub-section (3) of Section 33A of the Banking Companies Ordinance, 1962 the statement in respect of written-off loans or any other financial relief of five hundred thousand rupees or above allowed to a person during the year endedDecember 31, 2010 is given in Annexure 'B' to these financial statements. These loans are written off as a book entry withoutprejudice to the Bank's right of recovery against the customers.


10.8 Particulars of loans and advances to executives, directors,associated companies etc.

Debts due by directors or executives of the Group or any of themeither severally or jointly with any other persons

Balance at the beginning of the year 1,536,523 1,057,982Loans granted during the year 717,242 1,020,264Repayments made during the year (633,956) (555,826)Exchange adjustment 1,228 14,103Balance at end of the year 1,621,037 1,536,523

11. OPERATING FIXED ASSETS

Capital work-in-progress 11.1 1,337,697 1,006,331Property and equipment 11.2 22,405,859 22,236,240Intangible assets 11.3 941,010 491,511

24,684,566 23,734,082

11.1 Capital work-in-progress

Civil works 11.1.1 537,257 484,612Equipment 268,949 202,119Software 11.1.2 519,651 306,590Advances to suppliers and contractors 11,840 13,010

1,337,697 1,006,331

11.1.1 This includes Rs.437.916 million (2009: Rs.297.430 million) paid in respect of construction of the Head Office building of the Bank.

11.1.2 This includes Rs.516.081 million (2009: Rs.221.56 million) paid in respect of the Core Banking Software of the Bank.



11.2 Property and equipment2010

COST/ REVALUATION ACCUMULATED DEPRECIATIONAt Additions / Surplus on Reclassif- Exchange At At Charge for Reversal Exchange At Net book Annual

January (deletions) revaluation / ication Adjustment / December January the year / due to Adjustment / December value at rate of01, 2010 (Reversal of Other 31, 2010 01, 2010 (Reversal on revaluation Other 31, 2010 December deprec-

accumulated adjustments deletions) adjustments 31, 2010 iation %depreciation)

(Rupees in '000)OwnedFreehold land 1,825,754 125,305 - 1,090,717 - 3,041,776 - - - - - 3,041,776 -

- - - -Leasehold land 12,802,015 9,865 - - 22 11,721,185 1,052 291,697 - 18 292,767 11,428,418 1 - 3.33

- - (1,090,717) - - - -Buildings on freehold land 1,908,294 59,015 458,837 173,900 - 2,560,340 145,647 38,217 - - 181,790 2,378,551 5

- - - (39,706) - - (2,074)Buildings on leasehold land 2,182,998 90,124 8,788 - - 2,093,272 39,675 106,090 - 317 131,944 1,961,328 5

(5,431) (8,707) (173,900) (600) (5,431) (8,707) -Leasehold improvements 1,495,013 169,079 - - 4,911 1,661,185 415,414 153,380 - - 562,856 1,098,329 10

(7,818) - - - (5,436) - (502)Furniture and fixtures 978,099 92,933 - - 1,601 1,048,078 530,004 97,562 - 2,730 612,837 435,242 10

(24,555) - - - (16,639) - (820)Electrical, office and computerequipment 4,155,052 729,829 - - - 4,841,450 2,604,119 717,413 - 2,767 3,265,339 1,576,111 20-25

(33,732) - - (9,699) (31,234) - (27,726)Vehicles 268,342 48,937 - 3,772 174 286,371 159,287 35,162 - 2,501 171,770 114,601 20

(34,854) - - - (22,631) - (2,549)Assets held underoperating lease Ijarah assets - note 11.8 810,456 59,658 - - 2,931 739,979 296,066 137,463 - - 368,474 371,505 20 - 33.33

(133,066) - - - (65,055) - -Finance lease Vehicles 4,332 - - - - - 2,852 - - - - - 20

(560) - (3,772) - (26) - (2,826)2010 26,430,355 1,384,745 467,625 1,268,389 9,639 27,993,636 4,194,115 1,576,984 - 8,333 5,587,777 22,405,859

(240,016) (8,707) (1,268,389) (50,005) (146,452) (8,707) (36,497)


At Additions / Surplus on Reclassif- Exchange At At Charge for Other Exchange At Net book AnnualJanuary (deletions) revaluation / ication Adjustment / December January the year / adjustments Adjustment December value at rate of01, 2009 (Reversal of Other 31, 2009 01, 2009 (Reversal on 31, 2009 December deprec-

accumulated adjustments deletions) 31, 2009 iation %depreciation)

(Rupees in '000)OwnedFreehold land 1,502,746 1,724 332,426 - - 1,825,754 - - - - - 1,825,754 -

(11,142) -Leasehold land 10,092,131 9,470 3,328,235 - 1,793 12,802,015 307,447 305,640 - 63 1,052 12,800,963 1 - 3.33

(106,551) (523,063) - (87,760) (523,063) (1,275)Buildings on freehold land 1,856,780 3,823 (363,272) - 418,915 1,908,294 68,027 29,341 - 56,232 145,647 1,762,647 5

(112) (7,840) - (112) (7,840)Buildings on leasehold land 1,931,510 1,661 434,008 - 5,529 2,182,998 128,822 97,074 - 697 39,675 2,143,323 5

(5,240) (184,470) - (1,965) (184,470) (483)Lease hold improvement 1,169,850 305,714 - - 19,449 1,495,013 255,760 149,724 - 9,929 415,414 1,079,600 10

Furniture and fixtures 917,948 107,900 - - 8,745 978,099 464,913 83,230 - 4,595 530,004 448,095 10(28,986) (27,508) - (22,734)

Electrical, office and computerequipment 3,377,168 808,870 - - 33,966 4,155,052 1,987,369 643,969 - 15,211 2,604,119 1,550,933 20-25

(52,476) (12,476) - (42,430)Vehicles 273,266 51,958 - - 2,697 268,342 142,353 58,744 - 2,161 159,287 109,055 20

(59,579) (43,971)Assets held underoperating lease Ijarah assets - note 11.8 895,217 39,648 - - - 810,456 153,297 170,285 - - 296,066 514,390 20 - 33.33

(104,750) (19,659) - (27,516)Finance lease Vehicles 5,280 70 - - - 4,332 2,644 1,022 - - 2,852 1,480 20

(1,018) (814)2009 22,021,896 1,330,838 4,094,669 - 491,094 26,430,355 3,510,632 1,539,029 - 88,888 4,194,115 22,236,240

(369,854) (1,138,288) - - (227,302) (715,373) (1,758)



11.3 Intangible assets

2010Cost Accumulated Amortization

At Additions/ Exchange At At Charge for Exchange At Net book AnnualJanuary 01, (deletions) Adjustment/ December 31, January 01, the year / Adjustment/ December 31, value at rate of

2010 Other 2010 2010 (reversal on Other 2010 December 31, amorti-adjustments deletion) adjustments 2010 sation %

(Rupees in '000)

Software 1,052,072 672,056 19,899 1,739,887 560,561 224,017 16,990 798,877 941,010 10-25(4,140) - (2,691)

2009Cost Accumulated Amortization

At Additions/ Exchange At At Charge for Exchange At Net book AnnualJanuary 01, (deletions) Adjustment/ December 31, January 01, the year / Adjustment/ December 31, value at rate of

2009 Other 2009 2009 (reversal on Other 2009 December 31, amorti-adjustments deletion) adjustments 2009 sation %

(Rupees in '000)

Software 783,858 268,895 8,144 1,052,072 378,611 185,985 4,790 560,561 491,511 10-25(8,825) - (8,825)

11.4 Revaluation of properties

The properties of the Bank were last revalued by independent professional valuers as at December 31, 2009. The revaluationwas carried out by M/s. Pirsons Chemicals Engineering (Private) Limited, M/s. Sadruddin Associates, M/s. MariconConsultants (Private) Limited and M/s. Engineering Pakistan International (Private) Limited. These revaluations were based onprofessional assessment of present market values and resulted in a surplus of Rs.4,139.592 million.

The properties of UNBL were last revalued by an independent professional valuer as at December 31, 2010 by King Sturge.These revaluations were based on present market values and resulted in a surplus of Rs.414.843 million. Had there been norevaluation, the carrying amount of revalued assets at December 31, 2010 would have been as follows:

2010 2009(Rupees in ‘000)

Freehold land 1,484,906 1,484,906Leasehold land 9,168,903 9,472,729Buildings on freehold land 1,134,537 1,179,068Buildings on leasehold land 1,584,701 1,679,280

11.5 Carrying amount of temporarily idle properties of the Group 126,717 158,927

11.6 The cost of fully depreciated assets still in use

Furniture and fixtures 267,283 251,347Electrical, office and computer equipment 1,772,687 1,329,088Vehicles 69,474 33,601

2,109,444 1,614,036



11.7 Details of disposals of operating fixed assets

The information relating to operating fixed assets disposed off during the year is given in Annexure 'C' and is an integral partof these consolidated financial statements.

11.8 The Islamic Banking Branches of the Group have entered into Ijarah transactions with customers during the year. The majorityof Ijarah transactions entered into are in respect of vehicles.

The ijarah payments receivable from customers for each of the following periods under the terms of the respectivearrangements are given below:


Not later than one year 103,811 270,864Later than one year but not later than five years 242,387 436,129Later than five years 94 3,020

346,292 710,013

12. DEFERRED TAX ASSET - NET

Deferred tax asset - net 12.1 1,298,247 649,814

12.1 Movement in temporary differences during the year2010

Note At January 01 Recognised in Others At December 31profit and loss

(Rupees in '000)

Deductible temporary differences on- Recognized tax losses on subsidiary 41,473 (39,519) (1,225) 729- Deficit on revaluation of investments 21.2 1,066,434 - 95,868 1,162,302- Ijarah financing 52,314 (66,685) - (14,371)- Workers' Welfare Fund 139,142 5,598 - 144,740- Cash flow hedge reserve 111,148 - (41,603) 69,545- Provision against off balance sheet

items, post retirement medicalbenefits and advances 4,665,734 542,187 - 5,207,921

6,076,245 441,581 53,040 6,570,866

Taxable temporary differences on- Surplus on revaluation of fixed assets 21.1 (5,275,900) 136,794 (3,092) (5,142,198)- Accelerated tax depreciation (150,531) 20,110 - (130,421)

(5,426,431) 156,904 (3,092) (5,272,619)649,814 598,485 49,948 1,298,247



2009Note At January 01 Recognised in Others At December 31

profit and loss(Rupees in '000)

Deductible temporary differences on- Recognized tax losses on subsidiary 114,713 - (73,240) 41,473- Deficit on revaluation of investments 21.2 3,201,075 (2,134,641) 1,066,434- Ijarah financing 118,653 (66,339) - 52,314- Workers' Welfare Fund 117,950 21,192 - 139,142- Cash flow hedge reserve 148,956 - (37,808) 111,148- Provision against off balance sheet

items, post retirement medicalbenefits and advances 2,659,482 2,006,252 - 4,665,734

6,360,829 1,961,105 (2,245,689) 6,076,245Taxable temporary differences on- Surplus on revaluation of fixed assets 21.1 (3,972,755) 136,238 (1,439,383) (5,275,900)- Accelerated tax depreciation (223,926) 73,395 - (150,531)

(4,196,681) 209,633 (1,439,383) (5,426,431)2,164,148 2,170,738 (3,685,072) 649,814


13. OTHER ASSETS

Income / mark-up accrued in local currency 11,753,658 11,036,265Income / mark-up accrued in foreign currency 1,227,402 361,643

12,981,060 11,397,908Advance taxation - net of provision for taxation 13.1 3,693,123 1,996,049Receivable from staff retirement funds 66,595 1,045,899Receivable on account of encashment of savings certificates 43,086 74,406Receivable in respect of derivative transactions 31,121 124,977Receivable against sale of securities - 897,457Receivable from other banks against telegraphic transfersand demand drafts 1,219,425 836,556Unrealized gain on forward foreign exchange contracts 145,346 141,324Unrealized gain on derivative financial instruments 19.4.1 & 23.2 693,675 499,671Advance against Murabaha - 383,929Suspense accounts 237,439 187,143Stationery and stamps on hand 151,528 143,825Advances, deposits, advance rent and other prepayments 768,894 805,474Non-banking assets acquired in satisfaction of claim 13.2 1,192,095 330,029Receivable from non-controlling interest - 10,312Others 1,275,329 1,208,513

22,498,716 20,083,472Provision held against other assets 13.3 (2,352,444) (2,633,892)Other assets (net of provisions) 20,146,272 17,449,580



13.1 The Income Tax returns of the Bank have been filed up to the tax year 2010 (accounting year ended December 31, 2009)and were deemed to be assessed under section 120 of the Income Tax Ordinance, 2001 (Ordinance) unless amended by theCommissioner of Inland Revenue.

The tax authorities have issued the amended assessment orders for the tax years 2003 to 2010 (accounting year endedDecember 31, 2002 to 2009) determining additional tax liability of Rs.7,308 million. The amount has been fully paid as requiredunder the law. For the tax years 2004 to 2009, appeals have been decided by the Commissioner of Inland Revenue [CIR(A)]by allowing relief on certain issues. For the remaining issues, the Bank has filed an appeal before the Appellate Tribunal InlandRevenue (ATIR). For the tax years 2003 and 2010, the hearing is still pending with CIR (A). The management is confident thatthe appeals will be decided in favor of the Bank.

During the year, the tax authorities have further amended the assessment order for the tax year 2009 adding back unrealizedlosses on derivative transactions resulting in a demand of Rs.146 million, which has been paid. CIR(A) has upheld the orderof the taxation officer, however, the Bank is in the process of filing an appeal before ATIR. The Management is confident thatthis matter will be decided in favor of the Bank.

The tax returns for Azad Kashmir (AK) Branches have been filed for tax years 2005 to 2010 (financial years ended December31, 2004 to 2009) under the provisions of section 120(1) read with section 114 of the Ordinance and in compliance with theterms of agreement between banks and the Azad Kashmir Council in May 2005. The returns filed are considered as deemedassessment orders under the law.

The Seventh Schedule to the Ordinance has been amended through the Finance Act, 2010. Through this amendment,provision for advances and off balance sheet exposures would be allowed @ 5% of advances to consumer and small andmedium enterprises (SMEs), and 1% for other advances. The said change will be applicable from current year. A deferred taxasset of Rs.2,574 million has been recognized relating to amounts in excess of the allowable limits which is carried forwardto future years.

The Bank also carries a tax asset amounting to Rs.5,454 million (2009: Rs.5,454 million), representing disallowance ofprovisions against advances and off balance sheet obligations, for the periods prior to the applicability of the Seventh schedule.The Management, in consultation with its tax advisors, is confident that these would be allowed to the Bank at appellatelevels.


13.2 Market value of non-banking assets acquired in satisfaction of claims 1,221,295 359,908

13.3 Provision against other assets

Opening balance 2,633,892 2,473,775Exchange adjustments 8,638 32,381

2,642,530 2,506,156

Charge for the year 40,598 361,391Reversals (162,859) (22,260)

29 (122,261) 339,131Transfers 221,772 117,690Amounts written off (389,597) (329,085)Closing balance 2,352,444 2,633,892



14. CONTINGENT ASSETS

There were no contingent assets as at the balance sheet date.


15. BILLS PAYABLE

In Pakistan 4,136,487 4,944,903Outside Pakistan 938,213 221,458

5,074,700 5,166,36116. BORROWINGS

In Pakistan 43,401,942 30,953,356Outside Pakistan 4,229,872 6,214,921

47,631,814 37,168,277

16.1 Particulars of borrowings with respect to currencies


47,631,814 37,168,277

16.2 Details of borrowings from financial institutions

Secured

Borrowings from the State Bank of Pakistan under- Export refinance scheme 16.3 14,840,163 14,666,570- Refinance facility for modernization of SME 16.4 27,500 -- Long-term fixed finance 16.5 2,444,872 1,018,535- Long-term financing under export oriented projects 16.6 2,770,789 3,705,568

20,083,324 19,390,673Repurchase agreement borrowings 16.7 22,412,235 5,066,098

42,495,559 24,456,771

Unsecured

Call borrowings 16.8 428,195 8,679,283Overdrawn nostro accounts 452,682 688,082Trading liabilities 806,942 96,586Other borrowings 16.9 3,448,436 3,247,555

5,136,255 12,711,50647,631,814 37,168,277



16.3 The Bank has entered into agreements with the SBP for extending export finance to customers. As per the terms of theagreement, the Bank has granted the SBP the right to recover the outstanding amounts from the Bank at the date of maturityof the finances by directly debiting the current account maintained by the Bank with the SBP. These borrowings are repayablewithin six months, latest by June 2011. These carry markup rates at 9% per annum (2009: 7.5% per annum).

16.4 These borrowings have been obtained from the SBP for modernization of Small and Medium Enterprises (SMEs) by providingfinancing facilities for purchase of new plant and machinery for BMR of existing units and setting up of new units. In addition,financing for import /local purchase of new generators upto a maximum capacity of 500 KVA shall also be eligible under thisScheme. These borrowings are repayable within a period ranging from 3 years to 10 years and the Scheme will remain effectiveup to December 31, 2012. These carry markup rates ranging from 5.5% to 7.0% per annum.

16.5 These borrowings have been obtained from the SBP for providing financing facilities to exporters for adoption of newtechnologies and modernizing their plant and machinery. These borrowings are repayable within a period ranging from 3 yearsto 10 years. These carry markup rates ranging from 8.2% to 9.5% per annum (2009: 7.2% to 7.7% per annum).

16.6 These borrowings have been obtained from the SBP for providing financing facilities to customers for import of machinery,plant, equipment and accessories thereof by export oriented units. These carry markup rates ranging from 4% to 5% perannum (2009: 4% to 5% per annum).

16.7 These repurchase agreement borrowings are secured against Market Treasury Bills and Pakistan Investment Bonds and carrymark-up at rates ranging from 12.50% to 13.25% per annum (2009: 11.50% to 12.40% per annum). These borrowings arerepayable latest by January 2011. The carrying value of securities given as collateral is given in note 9.1.

16.8 These are borrowings pertaining to overseas operations which carry mark-up at rates ranging from 0.35% to 1.58% perannum (2009: 0.5% to 0.6% per annum) and are due to mature latest by June 2011.

16.9 This includes borrowing from an overseas bank for the development of Small and Medium Sized Enterprises (SMEs) inPakistan, carries mark-up at the rate of six months LIBOR + 1.2% (2009: six months LIBOR + 1.2%) and is repayableby June 2013.

2010 2009(Rupees in ‘000)

17. DEPOSITS AND OTHER ACCOUNTS

CustomersFixed deposits 169,880,101 155,634,121Savings deposits 195,535,049 179,752,604Sundry deposits 4,767,873 4,643,923Margin deposits 3,696,330 4,319,476Current accounts - remunerative 4,235,253 2,820,934Current accounts - non-remunerative 184,647,813 154,283,090

562,762,419 501,454,148Financial Institutions

Remunerative deposits 2,359,999 1,529,551Non-remunerative deposits 2,488,840 847,973

4,848,839 2,377,524567,611,258 503,831,672

17.1 Particulars of deposits and other accounts


567,611,258 503,831,672



18. SUB-ORDINATED LOANS - UNSECURED

Note Issue Date Tenor Rate % per annum Maturity Frequencyof principal 2010 2009redemption

(Rupees in '000)

Term Finance August August SemiCertificates - I 18.1 2004 8 years 8.45% 2012 Annual 1,995,388 1,996,160

Term Finance March March SemiCertificates - II 18.1 2005 8 years 9.49% 2013 Annual 1,999,560 1,999,640

Term Finance September September SemiCertificates - III 18.1 2006 8 years 6 months KIBOR+1.70% 2014 Annual 1,996,800 1,997,600

Term Finance February For the first five years February SemiCertificates - IV 18.2 2008 10 Years 6 months 2018 Annual 5,994,000 5,996,400

KIBOR+0.85% and forthe remaining term,

6 months KIBOR+1.35%11,985,748 11,989,800

18.1 These represent listed Term Finance Certificates (TFCs) issued by the Group. The liability of the Group is subordinated as tothe payment of principal and profit to all other indebtedness of the Group (including deposits) and is not redeemable beforematurity without approval of the State Bank of Pakistan.

18.2 This represents listed Term Finance Certificates (TFCs) issued by the Group. The liability of the Group is subordinated as tothe payment of principal and profit to all other indebtedness of the Group (including deposits). The Group has the right toexercise a call option after a period of 5 years from the issue date.


19. OTHER LIABILITIES

Mark-up / return / interest payable in local currency 8,427,554 7,015,580Mark-up / return / interest payable in foreign currency 334,899 349,630Accrued expenses 19.1 2,283,207 1,686,129Branch adjustment account 1,399,052 839,346Payable against purchase of securities 236,683 197,722Payable under severance scheme 32,563 33,452Unearned commission 151,611 221,434Provision against off - balance sheet obligations 19.2 669,891 682,141Unrealized loss on forward foreign exchange contracts 664,027 207,567Deferred liabilities 19.3 2,113,439 2,098,414Unrealised loss on derivative financial instruments 19.4.1 & 23.2 753,854 557,414Workers' Welfare Fund payable 418,384 404,622Insurance payable against consumer assets 183,095 393,288Others 283,684 260,088

17,951,943 14,946,827



19.1 This includes an accrual of Rs.255 million (2009: Rs.216 million) for the year ended December 31, 2010 in respect of employeebenefit scheme. The objective of the scheme is to reward, motivate and retain high performing executives and officers of theBank by way of bonus in the form of shares of the Bank. The liability of the Group in respect of this scheme is fixed and isapproved each year by the Board of Directors of the Bank. The scheme for each year is managed by a separate Trust formedfor this purpose.


19.2 Provision against off - balance sheet obligations

Opening balance 682,141 651,697

Charge during the year 29 - 20,250Transfers during the year - 10,194

- 30,444Payments during the year (12,250) -

669,891 682,141

19.3 Deferred liabilities

Provision for post retirement medical benefits 36.1.5 1,139,616 1,147,095Provision for gratuity 296,671 219,411Provision for compensated absences 36.1.5 677,152 731,908

2,113,439 2,098,414

19.4 Unrealized gain / (loss) on derivative financial instruments

Contract/ Notional amount Unrealised gain / (loss)2010 2009 2010 2009

(Rupees in '000)

Derivatives held for trading- Interest rate swaps 6,985,703 11,014,381 (111,793) (187,593)- Cross currency swaps 35,570,843 36,372,837 51,100 143,894- Swaptions - 2,527,248 - (14,044)- Fx options 4,110,884 821,070 - -- Forward sale contracts ofgovernment securities 441,981 - 514 -

19.4.1 47,109,411 50,735,536 (60,179) (57,743)


19.4.1 Unrealized loss on derivative financial instruments - net

Unrealized gain on derivative financial instruments 13 693,675 499,671Unrealized loss on derivative financial instruments 19 (753,854) (557,414)

23.2 (60,179) (57,743)



20. SHARE CAPITAL

20.1 Authorized Capital2010 2009 2010 2009Number of shares (Rupees in '000)

2,000,000,000 2,000,000,000 Ordinary shares of Rs.10 each 20,000,000 20,000,000

20.2 Issued, subscribed and paid-up capital

Fully paid-up ordinary shares of Rs. 10 each

2010 2009 2010 2009Number of shares (Rupees in '000)

Fully paid-up ordinary shares of Rs.10 each518,000,000 518,000,000 Issued for cash 5,180,000 5,180,000706,179,687 594,890,625 Issued as bonus shares 7,061,798 5,948,907

1,224,179,687 1,112,890,625 12,241,798 11,128,907

20.3 During the year 2007, the Bank was admitted to the official list of the UK Listing Authority and to the London Stock ExchangeProfessional Securities Market for trading of Global Depository Receipts (GDRs), each representing four ordinary equity sharesissued by the Bank. The GDRs constitute an offering in the United States only to qualified institutional buyers in reliance onRule 144A under the U.S Securities Act of 1933 and an offering outside the United States in reliance on Regulation S.

Holders of GDRs are entitled, subject to the provision of the depository agreement, to receive dividends, if any, and rank paripassu with other equity shareholders in respect of such entitlement to receive dividends. However, the holders of GDRs haveno voting rights or other direct rights of shareholders with respect to the equity shares underlying such GDRs. Subject to theterms and restrictions set out in the offering circular dated June 25, 2007, the deposited equity shares in respect of whichthe GDRs were issued may be withdrawn from the depository facility. Upon withdrawal, the holders will rank pari passu withother equity shareholders in respect of voting powers. As at December 31, 2010: 78,503,082 (2009: 92,519,435) GDR shareswere in issue.

20.4 Major shareholders (holding more than 5% of total paid-up capital)

2010 2009Number of Percentage of Number of Percentage of

Name of shareholders shares held shareholding shares held shareholding

Government of Pakistan 238,567,381 19.49% 216,879,438 19.49%Bestway (Holdings) Limited 222,775,183 18.20% 202,522,894 18.20%Bestway Cement Limited 93,649,744 7.65% 85,136,131 7.65%His HighnessShaikh Nahayan Mabarak Al Nahayan 78,942,102 6.45% 71,765,548 6.45%H.E. Dr. Mana'a Saeed Al Otaiba 67,492,392 5.51% 61,356,720 5.51%Sir Mohammed Anwar Pervez, OBE, HPk 62,433,163 5.10% 56,757,421 5.10%

As at December 31, 2010 the Abu Dhabi Group (ADG) held 30.30% (2009: 30.30%) shareholding (including GDRs) and theBestway Group (Bestway) held 31.07% (2009: 31.07%) shareholding of the Bank.

ADG and Bestway (Holdings) Limited had entered into a Share Purchase Agreement dated December 28, 2010 for the saleof 20% of the issued and outstanding ordinary shares of the Bank held by ADG to Bestway (Holdings) Limited.

Subsequent to the statement of financial position date, Bestway held 51.07% of the issued and outstanding ordinary sharesof the Bank whereas control shall continue to rest with the consortium of ADG and Bestway for which all regulatory approvalshave been obtained.




21. SURPLUS / (DEFICIT) ON REVALUATION OF ASSETS -NET OF DEFERRED TAX

Surplus arising on revaluation of assets - net of tax :Fixed assets- Group's share 10,865,342 10,870,484- Non-controlling interest 386,706 185,357

21.1 11,252,048 11,055,841Securities

- Group's share (2,159,801) (1,976,173)- Non-controlling interest (1,014) -

21.2 (2,160,815) (1,976,173)

(Deficit) / Surplus arising on revaluation of assets of associates (84,263) 44,2689,006,970 9,123,936

21.1 Surplus on revaluation of fixed assets

Surplus on revaluation of fixed assets at January 01 16,331,741 12,957,920

Revaluation of fixed assets during the year / adjustments 467,625 3,646,052Exchange adjustments (12,251) 146,055Written off during the year - (27,071)Transferred to unappropriated profit in respect of incremental

depreciation charged during the year (256,075) (254,977)Related deferred tax liability on incremental depreciation charged

during the year 12.1 (136,794) (136,238)62,505 3,373,821

16,394,246 16,331,741Less: Related deferred tax liability on:

Revaluation as on January 01 5,275,900 3,972,755Revaluation of fixed assets during the year 3,092 1,448,858Written off during the year - (9,475)Incremental depreciation charged on related assets (136,794) (136,238)

12.1 5,142,198 5,275,90011,252,048 11,055,841

21.2 Surplus / (Deficit) on revaluation of available-for-sale securities

Market Treasury Bills (55,830) 20,995Pakistan Investment Bonds (1,937,605) (1,129,224)Listed shares (34,452) 95,326Mutual fund units (709) (2,302)Term Finance Certificates, Sukuk, other Bonds etc (27,242) (41,213)Overseas securities (1,267,279) (1,986,189)

(3,323,117) (3,042,607)Related deferred tax asset 12.1 1,162,302 1,066,434

(2,160,815) (1,976,173)



2010 2009(Rupees in ‘000)

22. CONTINGENCIES AND COMMITMENTS

22.1 Direct credit substitutes

Contingent liabilities in respect of guarantees given favouringGovernment 8,742,208 10,831,974Banking companies and other financial institutions 5,766,641 2,910,518Others 6,124,874 7,396,201

20,633,723 21,138,69322.2 Transaction-related contingent liabilities

Contingent liabilities in respect of performance bonds,bid bonds, warranties, etc. given favouring


98,912,598 99,281,83522.3 Trade-related contingent liabilities

Contingent liabilities in respect of letters of credit opened favouringGovernment 58,188,686 56,186,541Banking companies and other financial institutions 760,593 -Others 69,387,773 62,787,741

128,337,052 118,974,28222.4 Other contingencies

Claims against the Group not acknowledged as debts 29,938,014 20,670,923

22.5 Commitments in respect of forward lending

The Group makes commitments to extend credit in the normal course of its business but these being revocable commitmentsdo not attract any significant penalty or expense if the facility is unilaterally withdrawn.

22.6 Commitments in respect of forward foreign exchange contracts

Sale 85,906,329 47,499,455

Purchase 131,134,706 92,086,590

22.7 Commitments in respect of derivatives

Interest rate swaps 6,985,703 11,014,381

Cross currency swaps 35,570,843 36,372,837

Swaptions - 2,527,248

FX Options - purchased 2,055,442 410,535

FX Options - sold 2,055,442 410,535

Forward sale contracts of government securities 441,981 -

22.8 Commitments in respect of capital expenditure 576,398 575,176

22.9 For contingencies relating to taxation refer note 13.1



23. DERIVATIVE INSTRUMENTS

Derivatives are a type of financial contract, the value of which is determined by reference to one or more underlying assets orindices. The major categories of such contracts include forwards, futures, swaps and options. Derivatives also includestructured financial products that have one or more characteristics of forwards, futures, swaps and options.

The Bank as an Authorized Derivative Dealer (ADD) is an active participant in the Pakistan derivatives market. Although theADD license covers the below mentioned transactions only (permitted under Financial Derivatives Business Regulations issuedby the SBP), the Group offers a wide variety of derivative products to satisfy customers’ needs, specific approval for whichis sought from the SBP on a transaction by transaction basis:

(a) Foreign Currency Options(b) Forward Rate Agreements(c) Interest Rate Swaps(d) Cross Currency Swaps(e) Equity indices(f) Commodity options

These transactions cover both the aspects of market making and hedging.

The authority for approving policies lies with the Board of Directors (BoD) and Board Risk Management Committee (BRMC),who has delegated its powers to the Market Risk Committee (MRC).

With regard to derivatives, the MRC is authorized to:

- Review the derivatives business with reference to market risk exposure and assign various limits in accordance with therisk appetite of the Bank.

- Review and approve the Derivatives Business Policy- Review and sign off derivatives product programs- Authorize changes in procedures and processes regarding derivatives and structured products

Overall responsibility for derivatives trading activity lies with the Treasury and Capital Markets Group (TCM). Identifying andquantifying market risk on derivatives, coordinating approvals on temporary or permanent market risk limits, formulation ofpolicies and procedures with respect to market risk arising from derivatives, formal monitoring of market and credit riskexposure and limits and its reporting to the senior management and BoD is done by the Treasury and Market Risk (TMR)Department. Treasury Operations records derivative activity in the Group's books, and handles its reporting to the SBP.

Derivative Risk Management

There are a number of risks undertaken by the Group, which need to be monitored and assessed, which include:



Credit Risk

Credit risk refers to the risk of non-performance or default by a party (a customer, guarantor, trade counterparty, third party,etc.), resulting in an adverse impact on the Group’s profitability. Credit risk associated with derivative transactions iscategorized into settlement risk and pre-settlement risk. Credit limit proposals for derivative transactions are reviewed byHead Market and Treasury Risk who recomends the appropriate limits to the Credit Committee for approval. Credit exposureof each counterparty is estimated and monitored by Treasury Middle Office on daily basis. Settlement risk is also mitigatedby netting off the amounts receivable and payable i.e., the net amount is either received or paid.

Market Risk

The Group, as a policy, hedges back-to-back all Options transactions. The Group also does not carry any exchange risk onits Cross Currency Swaps portfolio as it hedges the exposure in the interbank market. To manage interest rate risk of InterestRate Derivatives the Group has implemented various limits which are monitored and reported by Treasury Middle Office ondaily basis.

Liquidity Risk

Derivative transactions, usually being non-funded in nature, do not involve funds therefore there is no specific risk of liquidity.

However, there is another aspect of liquidity which is the availability of certain instruments or hedges in the market. This isrelevant to the Pakistan market, as interest rate derivatives have a uni-directional demand, and no perfect hedge is available.The Group mitigates its risk, on one side, by limiting the portfolio in terms of tenor, notional and sensitivity limits, and on theother side by taking on and off balance sheet positions in the interbank market, where available.

Operational Risk

The staff involved in the process of trading, settlement and risk management of derivatives are carefully trained to deal withthe complexities involved in the process. A state-of-the-art system has been put in place which handles derivative transactions.Each transaction is processed in accordance with the product program or transaction memo, which contains detailedaccounting and operational aspects of the transaction to further mitigate operational risk. In addition, the Treasury MiddleOffice and the Compliance and Control Department are assigned the responsibility of monitoring any deviation from thepolicies and procedures. The Group’s Audit and Inspection Group also reviews this function, which covers regular review ofsystems, transactional processes, accounting practices, end-user roles and responsibilities.

The Bank has installed a state of the art derivatives system called 'Super Derivatives' which provides an end-to-end solution.Other than supporting the routine transactional process it also provides analytical tools to measure various risk exposures,stress tests and sensitivity analysis.

Treasury Middle Office produces various reports for higher management (BoD, BRMC, MRC, etc) on a periodic basis. Thesereports provide details of the derivatives business profile and various risk exposures.



23.1

ProductAnalysis

2010

Interestrateswaps

Crosscurrencyswaps

Swaptions

FXoptions



Num

berof

National

Num

berof

Notional

Num

berof

Notional

Num

berof

Notional

Num

berof

Notional

Total

contracts

principal

contracts

principal

contract

principal

contracts

principal

contracts

principal

Notional

(Rupeesin'000)

(Rupeesin'000)

(Rupeesin'000)

(Rupeesin'000)

(Rupeesin'000)

(Rupeesin'000)

WithBanksfor

Hedging

43,475,777

414,996,850

--

822,055,442

--

20,528,069

Marketm

aking

31,871,064

22,201,000

--

--

--

4,072,064

75,346,841

617,197,850

--

822,055,442

--

24,600,133

Withotherentities

MarketM

aking

41,638,862

918,372,993

--

822,055,442

2441,981

22,509,278

Total

Hedging

43,475,777

414,996,850

--

822,055,442

--

20,528,069

Marketm

aking

73,509,926

1120,573,993

--

822,055,442

2441,981

26,581,342

116,985,703

1535,570,843

--

164

4,110,884

2441,981

47,109,411

2009

Interestrateswaps

Crosscurrencyswaps

Swaptions

FXoptions



Num

berof

National

Num

berof

Notional

Num

berof

Notional

Num

berof

Notional

Num

berof

Notional

Total

contracts

principal

contracts

principal

contract

principal

contracts

principal

contract

principal

Notional

(Rupeesin'000)

(Rupeesin'000)

(Rupeesin'000)

(Rupeesin'000)

(Rupeesin'000)

(Rupeesin'000)

WithBanksfor

Hedging

87,740,900

414,571,600

--

4410,535

--

22,723,035

Marketm

aking

42,206,208

52,335,884

12,527,248

7,069,340

129,947,108

916,907,484

12,527,248

4410,535

--

29,792,375

Withotherentities

MarketM

aking

81,067,273

819,465,353

--

4410,535

--

20,943,161

Total

Hedging

87,740,900

414,571,600

--

4410,535

--

22,723,035

Marketm

aking

123,273,481

1321,801,237

12,527,248

4410,535

--

28,012,501

2011,014,381

1736,372,837

12,527,248

8821,070

--

50,735,536



23.2 Maturity analysis of derivatives


contracts principal (Loss) Gain Net(Rupees in '000)

Upto 1 Month 66 1,152,095 - 514 5141 to 3 Month 101 3,425,771 (360) - (360)3 to 6 Month 1 9,091 (264) - (264)6 Month to 1 Year 2 1,050,000 (27,191) 117 (27,074)1 to 2 Year 2 6,921,500 (19,363) 220,133 200,7702 to 3 Year 8 6,039,258 (60,313) 195,625 135,3123 to 5 Year 4 8,883,870 (816) 254,858 254,0425 to 10 Year 8 19,627,826 (645,547) 22,428 (623,119)Above 10 Year - - - - -

192 47,109,411 (753,854) 693,675 (60,179)


contracts principal (Loss) Gain Net(Rupees in '000)

Upto 1 Month 2 40,000 (918) - (918)1 to 3 Month 11 979,704 - 2,150 2,1503 to 6 Month - - - - -6 Month to 1 Year 7 1,225,196 (8,367) 21,138 12,7711 to 2 Year 4 1,202,273 (61,448) 57 (61,391)2 to 3 Year 2 6,975,000 (32,171) 119,516 87,3453 to 5 Year 14 17,317,094 (145,045) 215,404 70,3595 to 10 Year 6 22,996,269 (309,465) 141,406 (168,059)Above 10 Year - - - - -

46 50,735,536 (557,414) 499,671 (57,743)



2010 2009(Rupees in ‘000)

24. MARK-UP / RETURN / INTEREST EARNED

On loans and advances to customers 40,375,630 45,815,220On lending to financial institutions- Call money lending 75,784 300,863- Securities purchased under resale agreements 930,386 1,115,663- Advances to financial institutions 243,905 348,117

1,250,075 1,764,643On investments in- Held for trading securities 798,013 942,613- Available for sale securities 8,118,652 9,419,796- Held to maturity securities 9,169,756 3,510,314- Associates 3,828 18,532

18,090,249 13,891,255On deposits with financial institutions 351,454 250,014Discount income 33,002 24,330

60,100,410 61,745,462

25. MARK-UP / RETURN / INTEREST EXPENSED

On deposits 19,138,026 22,335,927On securities sold under repurchase agreements 1,686,337 1,622,552On other short - term borrowings 3,009,529 2,615,138On long - term borrowings 1,428,292 1,514,905Discount expense 171,666 234,750

25,433,850 28,323,272

26. GAIN ON SALE OF SECURITIES - NET

Federal Government SecuritiesMarket Treasury Bills (598) 108,683Pakistan Investment Bonds (12,899) 46,290

(13,497) 154,973Ordinary shares

Listed companies 118,090 331,362

Other securities 83,571 212,940188,164 699,275

27. OTHER INCOME

Charges recovered from customers 768,840 1,162,018Rent on properties 155,590 166,361Income from dealing in derivatives 501,118 1,721,740Others 144,183 96,691

1,569,731 3,146,810




28. ADMINISTRATIVE EXPENSES

Personnel costSalaries, allowances etc. 28.1 7,799,700 7,586,763Charge for compensated absences 36.1.8 152,261 418,143Medical expenses 384,422 377,104Contribution to defined contribution plan 132,641 517,083Reversal in respect of defined benefit obligations (276,975) (329,554)

8,192,049 8,569,539

Premises costRent, taxes, insurance, electricity etc. 2,336,782 2,090,735Depreciation 11.2 589,384 581,780Repairs and maintenance 95,852 98,038

3,022,018 2,770,553Other operating costOutsourced service charges including sales commission 1,520,532 1,313,164Advertisement and publicity 794,271 231,939Communications 783,934 764,049Depreciation 11.2 987,600 957,249Legal and professional charges 300,169 233,312Banking service charges 407,414 336,749Stationery and printing 450,659 354,134Travelling 192,471 178,392Cash transportation charges 292,392 343,558Repairs and maintenance 143,726 130,702Maintenance contracts 509,225 362,105Insurance expense 94,477 174,956Vehicle expense 132,446 107,213Amortization 11.3 224,017 185,985Training and seminars 53,390 53,887Office running expense 199,895 152,455Entertainment 104,718 98,112Cartage, freight and conveyance 68,378 68,553Auditors' remuneration 28.3 61,257 62,662Subscriptions 32,665 37,417Brokerage expenses 17,153 19,772Sub-ordinated debt related costs 7,086 7,990Donations 28.2 82,696 58,020Non-executive Directors' fee and allowances 42,993 54,090Finance charges on leased assets 147 110Miscellaneous expenses 278,883 176,672

7,782,594 6,463,24718,996,661 17,803,338



28.1 This includes employee benefits in the form of awards / bonus to all permanent staff including the Chief Executive Officer andis determined on the basis of employees' evaluation and the Bank's performance during the year. The aggregate benefitdetermined in respect of all permanent staff amounted to Rs.571.276 million (2009: Rs.318.812 million).


28.2 Donations exceeding Rs.0.1 million

Karachi Education Initiative 28.2.1 40,000 40,000UBL Flood Relief Campaign 28,142 -Police Hospital Fund 5,000 -The Citizens Foundation 2,200 -Hisaar Foundation 1,086 550Friends of Burns Centre 1,008 1,728Family Education Services Foundation 900 900Marie Adelaide Leprosy Centre 850 850Lahore University of Management Sciences 815 315Patient Welfare Association 800 -SOS Childrens' Villages of Sindh 581 451Edhi Foundation 550 -Glückskette - Switzerland 410 -Special Olympics Pakistan 200 -Umeed-e-Noor 150 -Karachi City Police - 9,793Shalamar Hospital - 545Sun Development Foundation - 483Institute of Business Administration - 360

82,692 55,975

28.2.1 The President is a Director on the Board of the Karachi Education Initiative, a sponsoring and fund raising entity of the KarachiSchool for Business and Leadership.

28.3 Auditors' remuneration

2010Ernst & Young BDO Overseas TotalFord Rhodes Ebrahim AuditorsSidat Hyder & Co.

(Rupees in '000)

Audit fee 5,738 5,738 45,361 56,837Fee for audit of EPZ branch 250 - - 250Fee for audit of domestic subsidiaries - 502 - 502Out of pocket expenses 1,725 1,709 234 3,668

7,713 7,949 45,595 61,257



2009Ernst & Young BDO Overseas TotalFord Rhodes Ebrahim AuditorsSidat Hyder & Co.

(Rupees in '000)

Audit fee 5,738 5,738 47,087 58,563Fee for audit of EPZ branch 221 - - 221Fee for audit of domestic subsidiaries - 328 - 328Out of pocket expenses 1,868 1,682 - 3,550

7,827 7,748 47,087 62,662


29. OTHER PROVISIONS / WRITE OFFS - Net

(Reversal) / provision against other assets - net 13.3 (122,261) 339,131Provision against off - balance sheet obligations 19.2 - 20,250Other provisions / write offs 193,304 276,716(Reversal) / provision against Ijarah assets - specific (803) 9,191Reversal against Ijarah assets - general (2,127) (3,014)

68,113 642,274

30. WORKERS WELFARE FUND

Certain members of the Group are liable to pay Workers' Welfare Fund @ 2% of profit before tax as per the accounts ordeclared income as per the income tax return, whichever is higher, under the Workers' Welfare Ordinance, 1971.

2010 2009(Rupees in ‘000)

31. OTHER CHARGES

Penalties imposed by the SBPPertaining to current year 107,491 25,535Pertaining to prior year 128,000 39,000

235,491 64,535Other penalties 4,900 17

240,391 64,552



32. TAXATION2010

Overseas Azad Kashmir Domestic Total

(Rupees in '000)

Current tax 1,034,572 22,653 5,793,629 6,850,854Prior year tax 414,937 - 392 415,329Deferred tax 37,176 (239) (635,422) (598,485)

1,486,685 22,414 5,158,599 6,667,698

2009

Overseas Azad Kashmir Domestic Total

(Rupees in '000)

Current tax 906,230 113,181 5,976,846 6,996,257Prior year tax 78,598 - 112 78,710Deferred tax (7,677) (684) (2,162,377) (2,170,738)

977,151 112,497 3,814,581 4,904,229

2010 2009(Rupees in ‘000)

32.1 Relationship between tax expense and accounting profit

Accounting profit for the year 17,688,623 14,392,181

Tax on income @ 35% (2009: 35%) 6,191,018 5,037,263Tax effect of items that are either not included in

determining taxable profit or taxed at reducedrates / permanent difference (58,487) (316,009)

Prior year tax charge 415,329 78,710Other charges 119,838 104,265

Tax charge 6,667,698 4,904,229



2010 2009(Rupees in ‘000)

33. EARNINGS PER SHARE

Profit after tax attributable to equity shareholders of the Bank 11,031,630 9,521,546

(Number of shares)

Weighted average number of ordinary shares 1,224,179,687 1,224,179,687

(Rupees)


33.1 Diluted earnings per share has not been presented as the Group does not have any convertible instruments in issue atDecember 31, 2010 and 2009 which would have any effect on the earnings per share if the option to convert is exercised.

33.2 Earnings per share for the year 2009 has been restated for the effect of bonus shares issued during the current year.


34. CASH AND CASH EQUIVALENTS

Cash and balances with treasury banks 6 67,667,226 61,562,141Balances with other banks 7 25,980,928 14,049,990

93,648,154 75,612,131

35. STAFF STRENGTH(Number)

Permanent 8,669 8,648Contractual basis 104 90Group's own staff strength at the end of the year 8,773 8,738Outsourced 3,074 2,905Total number of employees at the end of the year 11,847 11,643



36. EMPLOYEE BENEFITS

36.1 United Bank Limited

36.1.1 Defined benefit plan

36.1.2 General description

The Bank operates a funded pension scheme established in 1986. The Bank also operates a funded gratuity scheme for newemployees and those employees who have not opted for the pension scheme. The Bank also operates a contributorybenevolent fund scheme and provides post retirement medical benefits to eligible retired employees. The benevolent fund planand the post-retirement medical plan cover all regular employees of the Bank who joined the Bank pre-privatisation. TheBank also maintains an employee compensated absences scheme. The liability of the Bank in respect of long-term employeecompensated absences is determined based on actuarial valuation carried out using the Projected Unit Credit Method.Actuarial valuation of the defined benefit plan scheme is carried out every year and the latest valuation was carried out as atDecember 31, 2010.

36.1.3 Number of Employees under the scheme

The number of employees covered under the following defined benefit scheme / plans are:

2010 2009(Number)

- Pension fund 7,723 7,845- Gratuity fund 5,589 5,416- Benevolent fund 7,490 7,888- Employee' compensated absences 6,708 6,942- Post retirement medical benefit scheme 4,480 4,790

The Pension fund, benevolent fund and post retirement medical benefit schemes include 5,384 (2009: 5,372), 3,010 (2009:3,098) and 2,228 (2009: 2,152) members respectively who have retired or whose widows are receiving the benefits.

36.1.4 Principal actuarial assumptions

The actuarial valuations were carried out as at December 31, 2010 based on the Projected Unit Credit Actuarial Cost Method,using the following significant assumptions:

2010 2009(Per annum)

Discount rate 14.50% 12.75%Expected rate of return on plan assets 14.50% 12.75%Expected rate of salary increase 12.50% 10.50%Expected rate of pension increase 6.75% 5.00%



36.1.5 Reconciliation of (receivable from) / payable to defined benefit plans


medical benefit absences(Rupees in '000)






(2,522,004) 64,118 (337,222) - -Present value of unfunded obligation - - 852,603 731,908Net actuarial gains or (losses) not recognized 2,119,273 (79,620) 205,656 294,492 -(Receivable) / payable (402,731) (15,502) (131,566) 1,147,095 731,908

36.1.6 Movement in defined benefit obligation


fund fund fund retirement compensatedmedical benefit absences

(Rupees in '000)

Obligation at the beginning of the year 3,585,208 365,292 459,080 852,603 731,908Current service cost 10,788 48,711 6,694 6,430 41,106Interest cost 118,861 48,331 48,347 112,903 104,760Benefits paid by the Bank (333,708) (61,513) (73,242) (100,658) (207,017)Recognition of prior service cost - - - - -Return allocated to other funds 36.1.9 232,232 - - - -Early retirement liability - - - - -Actuarial (gain) / loss on obligation (15,150) 16,912 (20,101) (45,190) 6,395Obligation at the end of the year 3,598,231 417,733 420,778 826,088 677,152





Obligation at the beginning of the year 3,625,280 384,786 529,647 875,509 613,602Current service cost 10,051 46,619 7,103 5,914 34,461Interest cost 156,655 53,312 62,995 103,084 110,245Benefits paid by the Bank (653,986) (86,446) (127,518) (125,019) (299,837)Recognition of prior service cost - - - - 62,201Return allocated to other funds 322,253 - - - -Early retirement liability - - - (24,242) -Actuarial (gain) / loss on obligation 124,955 (32,979) (13,147) 17,357 211,236Obligation at the end of the year 3,585,208 365,292 459,080 852,603 731,908

36.1.7 Movement in fair value of plan assets2010



Fair value at the beginning of the year 6,107,212 301,174 796,302 - -Expected return on plan assets 642,077 40,904 87,822 - -Contribution by the Bank - 68,631 5,450 - -Contribution by the employees - - 5,450 - -Amount paid by the fund to the Bank (1,214,658) (77,251) (85,232) - -Actuarial gain / (loss) on plan assets (7,392) (7,677) (9,875) - -Fair value at the end of the year 5,527,239 325,781 799,917 - -



Fair value at the beginning of the year 6,526,828 291,292 739,180 - -Expected return on plan assets 843,551 41,702 90,031 - -Contribution by the Bank - 75,044 5,979 - -Contribution by the employees - - 5,979 - -Amount paid by the fund to the Bank (1,272,621) (119,390) (122,924) - -Actuarial gain / (loss) on plan assets 9,454 12,526 78,057 - -Fair value at the end of the year 6,107,212 301,174 796,302 - -



36.1.8 Movement in (receivable from) / payable to defined benefit plans2010



Opening balance (402,731) (15,502) (131,566) 1,147,095 731,908Mark-up receivable on Bank's balance (13,046) (237) (1,773) - -Charge / (reversal) for the year (468,765) 60,447 (53,984) 93,179 152,261Contribution by the Bank - (68,631) (5,450) - -Amount paid by the Fund to the Bank 1,214,658 77,251 85,232 - -Benefits paid by the Bank (333,708) (61,513) (73,242) (100,658) (207,017)Closing balance (3,592) (8,185) (180,783) 1,139,616 677,152



Opening balance (414,783) (40,318) (89,177) 1,219,400 613,602Mark-up receivable on Bank's balance (22,731) (846) (99) - -Charge / (reversal) for the year (583,852) 67,762 (31,717) 52,714 418,143Contribution by the Bank - (75,044) (5,979) - -Amount paid by the Fund to the Bank 1,272,621 119,390 122,924 - -Benefits paid by the Bank (653,986) (86,446) (127,518) (125,019) (299,837)Closing balance (402,731) (15,502) (131,566) 1,147,095 731,908

36.1.9 Charge for defined benefit plans


fund fund fund retirement compensatedmedical benefit absences

(Rupees in '000)

Current service cost 10,788 48,711 6,694 6,430 41,106Interest cost 118,861 48,331 48,347 112,903 104,760Expected return on plan assets (642,077) (40,904) (87,822) - -Recognition of prior service cost - - - - -Actuarial (gains) and losses (188,569) 4,309 (15,753) (26,154) 6,395Return allocated to other funds 36.1.9.1 232,232 - - - -Employees' contribution - - (5,450) - -Settlement loss / gains - - - - -

(468,765) 60,447 (53,984) 93,179 152,261





Current service cost 10,051 46,619 7,103 5,914 34,461Interest cost 156,655 53,312 62,995 103,084 110,245Expected return on plan assets (843,551) (41,702) (90,031) - -Recognition of prior service cost - - - - 62,201Actuarial (gains) and losses (229,260) 9,533 (5,805) (32,042) 211,236Return allocated to other funds 322,253 - - -Employees' contribution - - (5,979) - -Settlement loss / gains - - - (24,242) -

(583,852) 67,762 (31,717) 52,714 418,143

36.1.9.1 This represents return allocated to those employees who exercised the conversion option offered in the year 2001 as referred toin note 5.11.1.

36.1.10 Actual return on plan assets

Amongst the defined benefit plans, the pension, gratuity and benevolent fund plans are funded. The actual return earned on the assetsduring the year are:



Expected return on plan assets 642,077 40,904 87,822 - -Actual gain / (loss) on plan assets (7,392) (7,677) (9,875) - -

634,685 33,227 77,947 - -



Expected return on plan assets 843,551 41,702 90,031 - -Actual gain / (loss) on plan assets 9,454 12,526 78,057 - -

853,005 54,228 168,088 - -



36.1.11 Five year data on surplus/ (deficit) of the plans and experience adjustments

Pension Fund 2010 2009 2008 2007 2006(Rupees in '000)

Present value of defined benefit obligation (3,598,231) (3,585,208) (3,625,280) (4,343,529) (4,433,583)

Fair value of plan assets 5,527,239 6,107,212 6,526,828 7,260,256 7,116,577

Surplus 1,929,008 2,522,004 2,901,548 2,916,727 2,682,994

Experience adjustments on plan liabilities [loss / (gain)] (214,828) 89,216 (87,141) 126,265 238,500

Experience adjustments on plan assets [loss / (gain)] 57,726 (282,376) (1,195) (11,848) (411,713)

Gratuity Fund



Surplus / (deficit) (91,952) (64,118) (93,494) (42,613) (101,924)

Experience adjustments on plan liabilities [loss / (gain)] 36,338 137,106 43,905 27,782 33,547

Experience adjustments on plan assets [loss / (gain)] 6,400 96,896 55,290 (5,179) 10,979

Benevolent Fund



Surplus / (deficit) 379,139 337,222 209,533 349,765 246,543

Experience adjustments on plan liabilities [loss / (gain)] 1,505 (8,798) 138,712 (90,203) (11,064)

Experience adjustments on plan assets [loss / (gain)] 2,737 (56,670) 144,550 (45,638) (64,187)

Post retirement medical benefit

Present value of defined benefit obligation (826,088) (852,603) (875,509) (1,202,462) (1,298,048)

Experience adjustments on plan liabilities [loss / (gain)] (26,232) 37,473 761 (67,904) (37,633)

Employee compensated absences

Present value of defined benefit obligation 677,152 731,908 613,602 843,193 1,074,258

Experience adjustments on plan liabilities [loss / (gain)] - - - - -

36.1.12 Effects of a 1% movement in assumed medical cost trend rates

Annual medical expense limit is based on frozen non-monetized basic pay of employees as on June 30, 2001. Accordingly, movement in

medical cost trend rates would not affect current service cost, interest cost and defined benefit obligations.



36.1.13 Components of plan assets as a percentage of total plan assets2010


medical benefit absences(Percentage)

Government securities 6.58% 98.51% 95.35% - -Units of mutual funds 5.20% 0.00% 0.00% - -Ordinary shares of listed companies 0.68% 0.75% 2.55% - -Term finance certificates 9.72% 0.73% 1.99% - -Others (including bank balances) 77.82% 0.01% 0.11% - -

100.00% 100.00% 100.00% - -


medical benefit absences(Percentage)

Government securities 15.95% 51.14% 41.32% - -Units of mutual funds 24.98% 17.84% 45.40% - -Ordinary shares of listed companies 0.62% 0.77% 3.63% - -Term finance certificates 7.23% 29.35% - - -Others (including bank balances) 51.22% 0.90% 9.65% - -

100.00% 100.00% 100.00% - -

As per the actuarial recommendations the expected return on plan assets was taken as 14.5% per annum on Pension Fund Assets, GratuityFund Assets and Benevolent Fund Assets. The expected return on plan assets was determined by considering the expected returns availableon the assets underlying the current investment policy.

36.1.14 Expected contributions to be paid to the funds in the next financial year

The Bank contributes to the pension and gratuity funds according to the actuary's advice. Contribution to the benevolent fund is made bythe Bank as per the rates set out in the benevolent scheme. Based on actuarial advice, the management estimates that the charge inrespect of defined benefit plans for the year ended December 31, 2011 would be as follows:



Expected charge for the year (410,926) 71,743 (59,992) 96,810 190,540



36.2 United National Bank Limited Pension and Life Assurance Scheme for U.K Employees.

As part of the Shareholders’ Agreement (“the Agreement”) signed on November 09, 2001 between UNBL and theshareholders, United Bank Limited and National Bank of Pakistan, it was agreed that UNBL may participate as an associatedemployer in the United Bank Limited Pension and Life Assurance Scheme (“the Scheme”) with effect from completion of thetransfer of the businesses (November 19, 2001) (“the Completion Date”). The Scheme is classified as a defined benefit schemeproviding benefits based on final pensionable salary.

Under the terms of the Agreement, UNBL is responsible for the funding requirements of the active members whoseemployment was transferred to UNBL on the Completion Date and for any new members admitted to the scheme after thisdate. United Bank Limited remains responsible for the funding of the deferred members as till the Completion Date.

No new members have been admitted to the scheme in the year ended December 31, 2010.

The last full actuarial valuation of the scheme was carried out at January 01, 2008 and was updated as at January 01, 2010by a qualified actuary on the basis of triennial valuations using Projected Unit Credit Method. The major assumptions used bythe actuary are as follows:

2010 2009Per annum

Discount rate 5.50% 5.60%Rate of revaluation of pension in deferment 5.00% 5.00%Expected rate of salary increase 0.00% 0.00%Expected rate of pension increase 3.50% 3.70%Price inflation 3.50% 3.70%

The assets and liabilities of the scheme noted below relate to those employees for whom the UNBL has a funding liability. Thecombined assets in the scheme and the expected rate of return were:

2010 2009Percentage (Rupees '000) Percentage (Rupees '000)

Other - insurance policy 5.50% 512,198 5.60% 510,254

Total market value of assets 512,198 510,254Actuarial value of liability (610,152) (654,625)Gross pension liability (97,954) (144,371)Related Deferred Tax Relief 27,475 40,473Net pension liability (70,479) (103,898)

The asset value supplied by the insurance company for 2009 is on an ongoing basis. If the policy had been surrendered atDecember 31, 2010 the surrender value would have been Rs.512.198 million (2009: Rs.510.250 million). It is not UNBL'sintention to surrender the policy.



2010 2009(Rupees in '000)

36.2.1 Movement in surplus / (deficit) during the year

Obligation at the beginning of the year (103,897) 4,703Current service cost - (14,089)Past service cost - (28,178)Interest (expense) / income (8,431) 1,281Employer`s contribution - 21,262Actuarial losses / (gains) 51,631 (121,679)Exchange adjustment (37,257) (5,366)Related deferred tax relief 27,475 38,169Obligation at the end of the year (70,479) (103,897)

No directors were members of the defined benefit scheme during the year or as at December 31, 2010.

2010 2009(Rupees in '000)

36.2.2 Analysis of the amount charged to operating profit

Current service cost - 14,089Past service cost - 28,178Total operating charge - 42,267

The defined benefit scheme is now closed to new entrants and future accrual has ceased from January 01, 2010. As a resultof the curtailment in benefits UNBL recognised a past service cost of Rs.28.178 million in prior year.

2010 2009(Rupees in '000)

36.2.3 Analysis of the amount credited / (debited) to net interest income

Expected return on pension scheme assets 26,609 29,331Interest on pension scheme liabilities (35,040) (28,050)Net return (8,431) 1,281

36.3 UBL Fund Managers Limited

The latest actuarial valuation of the Company's gratuity fund has been carried out as at December 31, 2010 using theProjected Unit Credit Method. The main assumption used in the actuarial valuation are as follows:

36.3.1 Principal actuarial assumptions

The key assumptions used for actuarial valuation were as follows:2010 2009

Per annum

Discount rate 14.50% 12.75%Expected rate of return on plan assets 14.50% 12.75%Expected rate of salary increase 14.50% 12.75%



2010 2009(Rupees in '000)

36.3.2 Reconciliation of payable to defined benefit plan

Present value of defined benefit obligations 19,776 13,168Fair value of plan assets (11,619) (7,246)

8,157 5,922Net actuarial losses not recognized (2,749) (1,131)

5,408 4,791

36.3.3 Movement in defined benefit obligation

Obligation at the beginning of the year 13,168 8,041Current service cost 4,730 4,045Interest cost 1,948 1,491Benefits paid (1,701) (250)Actuarial losses / (gains) 1,631 (159)Obligation at the end of the year 19,776 13,168

36.3.4 Movement in the fair value of plan assets

Fair value of plan assets at the beginning of the year 7,246 3,061Expected return on plan assets 1,270 828Contributions to the plan 4,791 2,930Benefits paid (1,701) (250)Actuarial gains 13 677

11,619 7,246

36.3.5 Plan assets are comprise as follows:

Debt 7,936 2,809Cash 592 847Equity 2,582 3,575Others 509 15

11,619 7,246

36.3.6 Charge for defined benefit plan

Current service cost 4,730 4,045Interest cost 1,948 1,491Expected return on plan asset (1,270) (828)Amortization of loss - 83

5,408 4,791

Actual return on plan assets 1,301 1,433



2010 2009(Rupees in '000)

36.3.7 Movement in net liability recognised

Opening net asset 4,791 2,930Expense recognised 5,408 4,791Contribution to the fund made during the year (4,791) (2,930)Closing net assets 5,408 4,791

37 OTHER EMPLOYEE BENEFITS

37.1 Defined contribution plan

The Bank operates a contributory provident fund scheme for 5,209 (2009: 5,356) employees who are not in the pensionscheme. The employer and employee both contribute 8.33% of the basic salary to the funded scheme every month.

37.2 Employee Motivation and Retention Scheme

The Bank operates a long term motivation and retention scheme for its employees. The objective of the scheme is to reward,motivate and retain high performing executives and officers of the Bank by way of bonus in the form of shares of the Bank.The liability of the Bank in respect of this scheme is fixed and approved each year by the Board of Directors of the Bank .Thescheme is managed by separate Trusts formed in respect of each year. During the year, Rs.206.819 million (2009: Rs.40.212million) and Rs.33.817 million (2009: Rs.6.409 million) were received by the executives and the chief executive respectivelyfrom the scheme. For further details, refer note 19.1.

37.3 Benazir Employees’ Stock Option Scheme

The Government of Pakistan (GoP), being one of the shareholders of the Bank, decided to launch the Benazir Employees’Stock Option Scheme on August 14, 2009, whereby the GoP intends to transfer free of cost 26,391,483 shares of the Bank,including 26,025,533 shares held by the SBP as at December 31, 2010, to UBL Employees Empowerment Trust [the “Trust”].

As per the Trust Deed such shares will be allocated through Unit Certificates to eligible employees in proportion to theirentitlement which will be based on length of service subject to certain restrictions. The Trust is entitled to receive dividendsdeclared, of which 50 percent will be distributed amongst employees on the basis of units held. The balance 50 percentwould be remitted to a Central Revolving Fund of the Privatization Commission of Pakistan for payment to employees at thetime of end of service settlement on fulfilment of vesting conditions, against surrendered units with the shares underlying suchsurrendered units being transferred back to the GoP.

This generalized scheme being a government policy to provide empowerment to employees of State Owned Enterprises andother entities where the GoP has a shareholding, may attract the provisions of amended IFRS-2 (Share-based Payments).However, keeping in view the nature, characteristics, exceptions and manner of operation of the generalized scheme, theapplicability of IFRS-2 to the said scheme is under consideration of the Institute of Chartered Accountants of Pakistan andthe Securities and Exchange Commission of Pakistan.



38. COMPENSATION OF DIRECTORS AND EXECUTIVES

President / Chief Directors ExecutivesExecutive

2010 2009 2010 2009 2010 2009(Rupees in '000)

Fees - - 42,993 54,090 7,935 9,163

Managerial remuneration 61,349 61,287 - - 2,899,401 2,691,546

Charge for defined benefit plan 1,001 1,001 - - 215,447 231,579

Charge for defined contribution plan 1,880 1,880 - - 77,172 62,835

Rent and house maintenance 4,750 2,375 - - 399,407 345,490

Utilities 269 148 - - 176,827 110,030

Medical 65 56 - - 86,505 74,326

Conveyance - - - - 306,773 292,845

Reimbursement of children's education fees 1,106 5,928 - - - -

Others 3,133 1,880 - - 196,209 184,724

73,553 74,555 42,993 54,090 4,365,676 4,002,538

Number of persons 1 1 9 7 1,360 1,246

The Bank's President / Chief Executive Officer and certain Executives are provided with free use of Group maintained cars andhousehold equipment.

In addition to the above, all executives including Chief Executive Officer of the Bank, are also entitled to certain short and longterm employee benefits which are disclosed in notes 36 and 37 to these financial statements.

39. FAIR VALUE OF FINANCIAL INSTRUMENTS

The fair value of traded investments other than those classified as held to maturity is based on quoted market price. Fair valueof unquoted equity investments, is determined on the basis of break-up value of these investments as per the latest availableaudited financial statements. The provision for impairment of associates and other investments has been determined inaccordance with the Group's accounting policy as stated in notes 4.2 and 5.8 to these consolidated financial statementsrespectively.

The fair value of fixed term loans, other assets, other liabilities and fixed term deposits cannot be calculated with sufficientreliability due to the absence of a current and active market for assets and liabilities and reliable data regarding market rates forsimilar instruments. The provision for impairment of loans and advances has been calculated in accordance with the Group'saccounting policy as stated in note 5.6 to these consolidated financial statements.

The repricing profile, effective rates and maturity of financial instruments are stated in note 44 to these consolidated financialstatements.

In the opinion of the management, the fair value of the remaining financial assets and liabilities are not significantly different fromtheir carrying values since these are either short-term in nature or, in the case of customer loans and deposits, are frequentlyrepriced.



40. SEGMENT DETAILS WITH RESPECT TO BUSINESS ACTIVITIES

For the year ended December 31, 2010Corporate Trading and Retail Commercial Asset OthersFinance Sales Banking Banking Management

(Rupees in '000)

Total income 471,169 2,647,783 32,132,512 9,208,767 370,918 764,339Total expenses (102,402) (690,072) (21,703,895) (4,291,011) (315,443) (804,042)Profit / (loss) before tax 368,767 1,957,711 10,428,617 4,917,756 55,475 (39,703)Segment return on assets (ROA) (%) 5.4% 0.7% 1.1% 1.8% 7.4% -Segment cost of funds (%) 0.3% 8.0% 4.0% 10.7% - -

For the year ended December 31, 2009Corporate Trading and Retail Commercial Asset OthersFinance Sales Banking Banking Management

(Rupees in '000)

Total income 187,140 3,860,120 30,605,367 9,456,906 464,019 1,609,080Total expenses (641,566) (831,738) (21,643,892) (7,302,410) (300,779) (1,070,066)Profit / (loss) before tax (454,426) 3,028,382 8,961,475 2,154,496 163,240 539,014Segment return on assets (ROA) (%) -5.4% 1.4% 1.0% 1.0% 21.6% -Segment cost of funds (%) 6.6% 9.3% 4.9% 10.0% - -

As at December 31, 2010Corporate Trading and Retail Commercial Asset OthersFinance Sales Banking Banking Management

(Rupees in '000)

Segment assets (gross of NPL provisions) 5,004,302 257,667,931 199,958,760 265,008,433 483,062 30,811,271Segment non performing loans (NPL) - 2,002,017 21,787,039 24,810,869 - 13,153Segment provision required against NPL - 10,105 16,691,950 16,828,908 - 13,153Segment liabilities 4,665,722 258,459,687 170,683,576 245,510,597 37,560 (29,101,679)

As at December 31, 2009Corporate Trading and Retail Commercial Asset OthersFinance Sales Banking Banking Management

(Rupees in '000)

Segment assets (gross of NPL provisions) 7,166,858 166,715,474 219,950,038 247,434,473 495,052 26,360,866Segment non performing loans (NPL) - - 19,342,444 20,709,293 - 13,500Segment provision required against NPL - - 13,546,998 14,140,352 - 13,500Segment liabilities 6,410,759 161,934,319 203,523,777 221,518,027 51,050 (20,334,384)

41. TRUST ACTIVITIES

The Group is not engaged in any significant trust activities. However, it acts as custodian for some of the Term FinanceCertificates it arranges and distributes on behalf of its customers.



42. RELATED PARTY TRANSACTIONS

The Group has related party transactions with its associates, employee benefit plans (refer notes 36 and 37) and its directorsand executive officers (including their associates).

Details of loans and advances to key management personnel, the companies or firms in which the Directors of the Group areinterested as directors, partners or in case of private companies as members are given in note 10.8 to these consolidatedfinancial statements.

Contributions to and accruals in respect of staff retirements and other benefit plans are made in accordance with the actuarialvaluations / terms of the contribution plan (refer note 36 to these consolidated financial statements for the details of plans).

42.1 RELATED PARTY TRANSACTIONS

Details of transactions with related parties during the year, other than those which have been disclosed elsewhere in thesefinancial statements, are as follows:


management Associates related management Associates relatedpersonnel parties personnel parties

(Rupees in '000)

Balances with other banks

In saving accounts - - 2,773 - - -

Lendings to financial institutions

Call Money Lendings - - 350,000 - - -

Investments In shares / mutual funds

Opening balance - 7,522,641 50,372 - 2,905,831 50,372

Investment made during the year - 2,738,412 - - 4,481,858 -

Investment sold / liquidated during the year - (2,434,051) - - (380,751) -

Equity method adjustment - (160,787) - - 515,703 -

Closing balance - 7,666,215 50,372 - 7,522,641 50,372

Ordinary Shares - - 46,634 13,950

Term Finance Certificates - - 148,368 - - 41,534

Advances

Opening balance 102,750 - - 148,875 - -

Addition during the year 170,447 - - 38,092 - .

Repaid during the year (131,435) - - (84,217) - -

Closing balance 141,762 - - 102,750 - -





(Rupees in '000)

Other Assets

Interest markup accrued 4,656 2,103

Receivable from staff retirement funds - - 66,595 - - 1,045,899

Prepaid insurance - 1,368 - 18,759 -

Remuneration receivable from management of fund - 14,398 - - 15,256 -

Sales load receivable - 304 - - 3,913 -

Other receivable - - - - 108,522 -

Borrowings

Opening balance - 300,000 100,000 - - -

Borrowings during the year - 2,100,000 - - 1,650,000 1,100,000

Settled during the year - (2,400,000) (100,000) - (1,350,000) (1,000,000)

Closing balance - - - - 300,000 100,000

Overdrawn nostros - 533 - - 319 -

Deposits and other accounts

Opening balance 19,365 164,877 56,453 20,149 147,701 308,347

Received during the year 444,766 31,725,811 34,749,151 258,920 15,508,596 1,151,870

Withdrawn during the year (439,274) (28,111,680) (34,742,618) (259,704) (15,491,420) (1,403,764)

Closing balance 24,857 3,779,008 62,986 19,365 164,877 56,453

Sub-ordinated loans 5 5,999 - 5 761,987 -

Other Liabilities

Interest / markup payable on deposits 41 17,769 1,024 174 449 1,095

Interest / markup payable on borrowings - - - - 814 1,899

Interest / markup payable on sub-ordinated loans - 167 - - 36,497 -

Unrealised loss on derivative transactions - - 618,818 - - 307,241

Provision for employee benefit scheme - - 250,000 - - 210,000

Other payable - - - - 26,851 -





(Rupees in '000)

Mark-up / return / interest earned 9,238 - 75,321 7,398 - 29,597

Dividend received - 356,010 1,600 - 228,516 -

Net gain on sale of investment - 2,393 - - - -

Realised gain on derivative transactions - - 2,127,895 - - 1,662,595

Remuneration received from management of fund - 319,268 - - 376,969 -

Sales load received - 9,130 - - 18,486 -

Other income 528 749 23 - 576 -

Mark-up / return / interest paid 716 242,488 8,984 389 69,402 816

Remuneration paid 336,588 - - 268,383 - -

Post employment benefits 12,224 - - 10,286 - -

Non-executive directors' fee and allowances - - 42,993 - - 54,090

Net charge for defined contribution plans - - 104,035 - - 416,114

Net reversal for the defined benefit plans - - (402,939) - - (493,415)

Payment for employee motivation and retention scheme - - 210,000 - - 50,005

Other expenses

Insurance premium paid - 204,492 - - 215,804 -

Insurance claims settled - 164,859 - - 217,907 -

43. CAPITAL ADEQUACY

43.1 The Basel II Framework is applicable to the Bank whereby the Standardized Approach for reporting Capital Adequacy is currentlyimplemented. Under the said approach, credit risk and market risk exposures are measured using the Standardized Approachand operational risk is measured using the Basic Indicator Approach.

The Group’s capital adequacy is reported using the rules and ratios provided by the State Bank of Pakistan.

The subsidiaries comply with the capital adequacy and risk management frameworks prescribed by their respective regulationsin their jurisdictions.

The capital adequacy ratio is a measure of the amount of Group's capital expressed as a percentage of its risk weighted assets.Measuring capital adequacy requires risk mitigants to be applied to the amount of assets shown on a Group's balance sheet.These assets are then applied weightages according to the degree of inherent risk. The capital adequacy ratios compares theamount of eligible capital with the total of risk-weighted assets (RWAs).

The Group has developed Internal Capital Adequacy Assessment Process (ICAAP) as per the guidelines provided by the SBP.This framework has been approved by the Group’s Board of Directors and submitted to the SBP. The Group additionally coversrisk not yet included under Pillar I, so as to carry adequate capital to cater for any future business requirements. The Group willreview the ICAAP framework on an annual basis and changes/updates will be recommended to the Basel II committee foronward submission to the Board of Directors.

The Group plans to move towards the Advanced Approach for Basel II, including the Foundation Internal Ratings Based Approachfor credit risk, Internal Models Approach for market risk and the Alternate Standardized Approach for operational risk.



43.2 Capital Management

The objective of managing capital is to safeguard the Group's ability to continue as a going concern. It is the policy of the Groupto maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future developmentof the business. The impact of the level of capital on shareholders’ return is also recognized and the Group recognizes theneed to maintain a balance between the higher returns that might be possible with greater gearing and the advantages andsecurity afforded by a sound capital position.

Statutory minimum capital and capital adequacy requirements

The SBP through its BSD Circular No. 07 dated April 15, 2009 has prescribed the minimum paid-up capital (net ofaccumulated losses) for Banks / Development Finance Institutions to be raised to Rs.10 billion by the year ending December31, 2013.

The paid-up capital of the Group for the year ended December 31, 2010 stood at Rs.12,241.798 million (2009: Rs.11,128.907million) and is in compliance with SBP requirements. In addition, banks are also required to maintain a minimum CapitalAdequacy Ratio (CAR) of 10% of the risk weighted exposure of the Banks. The Group’s CAR as at December 31, 2010 was15.04% (2009: 14.03%). The Group and its individually regulated operations have complied with all capital requirementsthroughout the year.

Tier 1 capital, includes fully paid-up capital, balance in share premium account, general reserves as per the financial statementsand net un-appropriated profits after deduction of book value of goodwill / intangibles, deficit on revaluation of available forsale investments and 50% of investments in equity and other regulatory capital of majority owned securities or other financialsubsidiaries not consolidated in the statement of financial position as per the guidelines laid under the Basel II framework.

Tier 2 capital includes general provisions for loan losses, reserves on the revaluation of fixed assets and equity investments,foreign exchange translation reserves and subordinated debts (upto maximum of 50% of total eligible tier 1 capital) afterdeduction of 50% of investments in equity and other regulatory capital of majority owned securities or other financialsubsidiaries not consolidated in the statement of financial position as per the guidelines laid under the Basel II Framework.

Tier 3 capital has also been prescribed by the SBP for managing market risk; however, the Group does not have any Tier 3capital.

Banking operations are categorized as either trading book or banking book and risk-weighted assets are determined accordingto specified requirements of the SBP that seek to reflect the varying levels of risk attached to assets and off-balance sheetexposures. The total risk-weighted exposures comprise of credit risk, market risk and operational risk.



43.3 Capital Adequacy Ratio

The capital adequacy ratio, calculated in accordance with the SBP's guidelines on capital adequacy was as follows:2010 2009

(Rupees in ‘000)Regulatory capital baseTier I Capital

- Fully paid up capital 12,241,798 11,128,907- Statutory and general reserves as disclosed on the balance sheet 14,465,696 12,354,984- Unappropriated profits 27,576,333 23,617,874- Non-controlling interest 2,207,241 2,279,691

56,491,068 49,381,456Deductions:- Book value of intangibles 1,460,661 491,511- Shortfall in provisions irrespective of relaxation provided 261,637 -- Reciprocal cross holdings by banks 5,999 -- 50 % of Investments in equity and other regulatory capital of majority owned securities

or other financial subsidiaries not consolidated in the statement of financial position 107,573 33,7921,835,870 525,303

Total eligible Tier 1 Capital 54,655,198 48,856,153

Supplementary CapitalTier II Capital- General provisions or general reserves for loan losses-up to maximum of 1.25% of risk weighted assets 1,425,496 569,195- Revaluation reserves up to 45% 5,882,008 5,980,110- Foreign exchange translation reserve 9,765,294 9,019,387- Subordinated debt - upto maximum of 50% of total eligible Tier 1 capital 7,852,176 8,300,938- Cash flow hedge reserve (198,695) (317,562)Total Tier II Capital 24,726,279 23,552,068

Deductions:- 50 % of Investments in equity and other regulatory capital of majority owned securities

or other financial subsidiaries not consolidated in the statement of financial position 107,573 33,792107,573 33,792

Total eligible Tier 2 Capital 24,618,706 23,518,276

Total Eligible Capital 79,273,904 72,374,429

Capital requirements Risk weighted assets2010 2009 2010 2009

(Rupees in '000)

Risk weighted exposures

Credit risk

Claims on:

Federal and Provincial Government, SBP and

Other Sovereigns – in foreign currency 1,910,721 1,304,341 19,107,205 13,043,410

Public Sector Enterprises 1,285,319 1,197,023 12,853,191 11,970,232

Banks 3,588,852 2,591,925 35,888,515 25,919,253

Corporate 23,688,885 25,181,850 236,888,847 251,818,497

Retail portfolio 3,428,589 4,683,906 34,285,894 46,839,059

Secured by residential property 174,425 196,697 1,744,250 1,966,966

Past due loans 1,945,383 1,429,507 19,453,834 14,295,066

Listed equity investments 932,518 908,622 9,325,181 9,086,220

Unlisted equity investments 83,345 66,274 833,448 662,736

Investments in fixed assets 2,322,391 2,324,257 23,223,905 23,242,572

Other assets 673,872 682,561 6,738,724 6,825,606

40,034,300 40,566,963 400,342,994 405,669,617

Market risk

Interest rate risk 2,355,478 1,830,566 29,443,475 22,882,079

Equity exposure risk 305,596 337,635 3,819,945 4,220,436

Foreign exchange risk 949,623 673,653 11,870,288 8,420,665

3,610,697 2,841,854 45,133,708 35,523,180

Operational risk 6,524,466 5,980,740 81,555,828 74,759,246

50,169,463 49,389,557 527,032,530 515,952,043Capital adequacy ratioTotal eligible regulatory capital held 79,273,904 72,374,429Total risk weighted assets 527,032,530 515,952,043Capital adequacy ratio 15.04% 14.03%



43.4. Credit Risk - General Disclosures

The Group follows the standardized approach for all its Credit Risk Exposures. The standardized approach to credit risk sets out fixed riskweights corresponding, where appropriate, to external credit assessment levels. Where no external rating is available, a 100% risk weight isused.

Under the standardized approach, the capital requirement is based on the credit rating assigned to counterparties by External CreditAssessment Institutions (ECAIs) duly recognized by SBP for capital adequacy purposes. The Group selects particular ECAI(s) for each typeof claim. In this connection, the Group utilizes the credit ratings assigned by ECAIs such as PACRA (Pakistan Credit Rating Agency), JCR-VIS (Japan Credit Rating Company Limited – Vital Information Systems), Fitch, Moody’s and Standard & Poors. The Group also utilizes ratingscores of Export Credit Agencies (ECA) participating in the “Arrangement on Officially Supported Export Credits”.

Mapping to SBP Rating Grades

The selected final ratings (after application of the principles stated above) for all exposures need to be translated to the standard rating gradesgiven by the SBP. In this regard, the mapping tables to be used for converting ECAI ratings to SBP rating grades are given below:

Long – Term Rating Grades Mapping

SBP Rating grade Fitch Moody’s S & P PACRA JCR-VIS ECA Scores

1 AAA Aaa AAA AAA AAA 0AA+ Aa1 AA+ AA+ AA+ 1AA Aa2 AA AA AAAA- Aa3 AA- AA- AA-

2 A+ A1 A+ A+ A+ 2A A2 A A AA- A3 A- A- A-

3 BBB+ Baa1 BBB+ BBB+ BBB+ 3BBB Baa2 BBB BBB BBBBBB- Baa3 BBB- BBB- BBB-

4 BB+ Ba1 BB+ BB+ BB+ 4BB Ba2 BB BB BBBB- Ba3 BB- BB- BB-

5 B+ B1 B+ B+ B+ 5B B2 B B B 6B- B3 B- B- B-

6 CCC+ and Caa1 and CCC+ and CCC CCC 7below below below CC CC

C CD

Short – Term Rating Grades Mapping

SBP Rating Grade Fitch Moody’s S & P PACRA JCR-VIS

S1 F1 P-1 A-1+ A-1+ A-1+A-1 A-1 A-1

S2 F2 P-2 A-2 A-2 A-2S3 F3 P-3 A-3 A-3 A-3S4 Others Others Others Others Others

Types of exposures and ECAI's used

JCR-VIS PACRA FITCH Moody's ECA scores

Corporate � � � - -Banks � � � � -Sovereigns - - - - �PSE � � - - -



Credit exposures subject to Standardized Approach2010 2009

(Rupees in '000) (Rupees in '000)Exposures Rating Amount Deduction Net amount Amount Deduction Net amount

category outstanding CRM outstanding CRM

Cash and Cash Equivalents - 14,472,104 - 14,472,104 13,813,277 - 13,813,277Claims on Government of Pakistan(Federal or Provincial Governments) andSBP, denominated in PKR - 121,556,124 12,686,226 108,869,898 62,121,705 6,228,951 55,892,754Foreign Currency claims on SBP arisingout of statutory obligations of banks inPakistan - 5,043,830 - 5,043,830 4,487,971 - 4,487,971Claims on other sovereigns and on 1 207,144 - 207,144 1,946,332 - 1,946,332Government of Pakistan or provincial 2 3,063,371 - 3,063,371 12,669,156 - 12,669,156governments or SBP denominated in 3 7,766,882 - 7,766,882 - - -currencies other than PKR 4,5 - - - 6,668,157 (22,570) 6,690,727

6 9,743,058 2,332 9,740,726 2,528,342 - 2,528,342Unrated - - - 26,338 - 26,338

20,780,455 2,332 20,778,123 23,838,325 (22,570) 23,860,895Corporate 0 - - - - - -

1 24,189,772 2,437,971 21,751,801 15,388,248 9,092 15,379,1562 22,955,606 191 22,955,415 6,182,276 107,907 6,074,3693,4 1,081,533 - 1,081,533 1,679,117 - 1,679,1175,6 1,456,141 75,002 1,381,139 1,182,235 - 1,182,235

Unrated 235,683,438 17,775,900 217,907,538 270,537,693 28,284,682 242,253,011285,366,490 20,289,064 265,077,426 294,969,569 28,401,681 266,567,888

Banks 0 - - - - -1 46,327,423 17,890,757 28,436,666 37,788,122 22,769,911 15,018,2112,3 36,295,927 2,470,749 33,825,178 26,124,854 47,116 26,077,7384,5 7,171,065 1,162,030 6,009,035 3,506,514 576 3,505,9386 - - - - - -

Unrated 14,559,116 - 14,559,116 12,899,955 158,346 12,741,609104,353,531 21,523,536 82,829,995 80,319,445 22,975,949 57,343,496

Claims on banks with maturity less than3 months and denominated inforeign currency 1,2,3 - - - - - -

4,5 - - - - - -6 - - - - - -

Unrated - - - - - -- - - - - -

Public sector 0 - - - - -1 89,861 193 89,668 6,656,459 589,581 6,066,8782,3 4,666 2,678 1,988 - - -4,5 - - - - - -6 - - - - - -

Unrated 81,359,035 55,690,508 25,668,527 66,982,129 45,468,416 21,513,71381,453,562 55,693,379 25,760,183 73,638,588 46,057,997 27,580,591

Retail 75% 48,894,320 3,179,795 45,714,525 65,720,344 3,268,265 62,452,07935% 4,983,571 - 4,983,571 5,619,903 - 5,619,903

53,877,891 3,179,795 50,698,096 71,340,247 3,268,265 68,071,982Equity Investments- Listed 100% 9,325,181 - 9,325,181 9,086,220 - 9,086,220- Unlisted 150% 555,632 - 555,632 441,824 - 441,824

9,880,813 - 9,880,813 9,528,044 - 9,528,044Past due loans- Less than 20% 150% 4,923,887 1,450,172 3,473,715 3,576,454 212,420 3,364,034- Between 20% to 50% 100% 11,380,748 9,844 11,370,904 11,399,342 4,191,246 7,208,096- More than 50% 50% 3,677,090 - 3,677,090 25,846,230 23,347,721 2,498,509

19,981,725 1,460,016 18,521,709 40,822,026 27,751,387 13,070,639Past due loans secured against mortgageof residential property:- past due for more than 90 days 100% 560,433 - 560,433 626,876 80,912 545,964- past due by 90 days 50% 946,757 - 946,757 891,713 400,312 491,401

1,507,190 - 1,507,190 1,518,589 481,224 1,037,365All Fixed Assets 100% 23,223,905 - 23,223,905 23,242,572 - 23,242,572Others 6,738,724 6,738,724 8,372,309 1,546,703 6,825,606Total 748,236,344 114,834,348 633,401,996 708,012,667 136,689,587 571,323,080

246 United Bank Limited

Credit Risk: Disclosures with respect to Credit Risk Mitigation for Standardized Approach

The Group has adopted the Comprehensive Approach of Credit Risk Mitigation for the Banking Book. No credit risk mitigationbenefit is taken in the Trading Book. In instances where the Group’s exposure on an obligor is secured by collateral thatconforms to the eligibility criteria under the Comprehensive Approach of CRM, then the Group reduces its exposure underthat particular transaction by taking into account the risk mitigating effect of the collateral for the calculation of capitalrequirement i.e. the risk weight of the collateral instrument securing the exposure is substituted for the risk weight of thecounter party.

Cash, lien on deposits, government securities and eligible guarantees etc. are considered as eligible collateral under theComprehensive Approach of Credit Risk Mitigation. The Group has in place detailed guidelines with respect to valuation andmanagement of these types of collateral. In order to be prudent, the Group calculates the Credit Risk Mitigation benefit usingthe realizable value of eligible collateral.

44. RISK MANAGEMENT

This section presents information about the Bank’s exposure to and its management and control of risks, in particular, theprimary risks associated with its use of financial instruments:

- Credit risk is the risk of loss resulting from client or counterparty default

- Market risk is the risk of loss arising from adverse movements in market variables such as interest rates, exchange ratesand equity indices

- Liquidity risk is the risk that the Bank may be unable to meet its payment obligations when due

- Operational risk is the risk of loss resulting from inadequate or failed internal processes, people and systems or fromexternal events, and therefore includes legal risk

- Equity position risk is the risk that arises due to changes in prices of individual stocks or levels of equity indices.

Managing risk continues to present a major challenge to the entire banking industry. Success in the banking business dependson how well an institution manages its risks. The main goal is not to eliminate risk, but rather to be proactive in identifying,assessing and managing risks to the organisation’s strategic advantage at the optimum.

The Bank has an integrated risk management structure in place. The Board Risk Management Committee oversees the wholerisk management process of the Bank. The Risk & Credit Policy Group assists the Board Risk Management Committee. TheBank is organized into the functions of Credit Administration, Market and Treasury Risk, Commercial and FIRMU Credit Policy,Consumer and Retail Credit, Credit Risk Management and Operational Risk and Basel II. Each risk category is headed by asenior manager who reports directly to the Group Executive, Risk and Credit Policy. The role of the Risk and Credit PolicyGroup includes:



- Determining guidelines relating to Bank’s appetite for risk.

- Recommending risk management policies in accordance with the Basel-II framework and international best practices.

- Reviewing policies/ manuals and ensuring that these are in accordance with the risk management policies.

- Developing systems and resources to review the key risk exposures of the Group.

- Approving credits.

- Granting approval authority to qualified and experienced individuals.

- Reviewing the adequacy of credit training across the Group.

- Organizing portfolio reviews focusing on quality assessment, risk profiles, industry concentrations, etc.

- Setting systems to identify significant portfolio indicators, problem credits and level of provisioning required.

44.1 Credit risk

Credit risk is the risk that a customer or counterparty may not settle an obligation for full value, either when due or at any time

thereafter. This risk arises from the potential that a customer or counterparty is either unwilling to perform an obligation or its

ability to perform such an obligation is impaired resulting in an economic loss to the Group.

The credit risk management process is driven by the Group's Credit Policy, which provides policies and procedures in relation

to credit initiation, approval, documentation and disbursement, credit maintenance and remedial management.

The Credit risk function is organized into Corporate, Commercial/SME and Retail credit. Corporate and Retail credit functions

are centrally organized while the Commercial credit function is organized regionally across the network. Individual credit

authorities are delegated by the Board according to seasoning/maturity of respective credit officers.

The Group manages, limits and controls concentrations of credit risk as identified, in particular, to individual counterparties

and groups, and to industries, where appropriate. Concentrations of credit risk exist if clients are engaged in similar activities,

or are located in the same geographical region or have comparable economic characteristics such that their ability to meet

contractual obligations would be similarly affected by changes in economic, political or other conditions. Limits are also applied

in a variety of forms to portfolios or sectors where the Group considers it appropriate to restrict credit risk concentrations or

areas of higher risk, or to control the rate of portfolio growth.




44.2 Segmental information

44.2.1 Segments by class of business


commitmentsRupees in '000 Percent Rupees in '000 Percent Rupees in '000 Percent

Chemical and pharmaceuticals 6,217,583 1.65% 8,389,268 1.48% 6,082,131 1.12%

Agri business 53,034,196 14.09% 33,824,201 5.96% 315,807 0.06%

Textile spinning 17,497,654 4.65% 1,289,002 0.23% 5,058,213 0.93%

Textile weaving 6,722,278 1.79% 2,477,437 0.44% 4,289,442 0.79%

Textile composite 23,145,685 6.15% 330,764 0.06% 814,737 0.15%

Textile others 13,780,445 3.66% 2,182,465 0.38% 3,740,450 0.69%

Cement 6,803,468 1.81% 1,908,802 0.34% 2,801,403 0.52%

Sugar 8,153,681 2.17% 3,078,292 0.54% 358,817 0.07%

Shoes and leather garments 2,447,523 0.65% 2,216,787 0.39% 298,515 0.06%

Automobile and transportation equipment 4,516,043 1.20% 3,027,770 0.53% 4,940,641 0.91%

Financial 4,989,842 1.33% 16,853,440 2.97% 299,486,924 55.26%

Insurance - 0.00% 22,443,630 3.95% 43,143 0.01%

Electronics and electrical appliances 2,399,152 0.64% 3,265,744 0.58% 1,541,579 0.28%

Production and transmission of energy 39,057,078 10.37% 17,157,862 3.02% 58,716,619 10.83%

Paper and allied 789,310 0.21% 2,189,563 0.39% 660,772 0.12%

Surgical and metal 2,265,932 0.60% 1,450,750 0.26% 335,306 0.06%

Contractors 4,263,223 1.13% 16,640,821 2.93% 19,463,140 3.59%

Wholesale traders 20,811,787 5.53% 36,074,167 6.36% 1,319,555 0.24%

Fertilizer dealers 6,823,565 1.81% 8,494,701 1.50% 677,458 0.12%

Sports goods 803,919 0.21% 840,738 0.15% 17,885 0.00%

Food industries 6,858,339 1.82% 3,931,436 0.69% 3,699,826 0.68%

Airlines 6,033,039 1.60% 308,457 0.05% 108,106 0.02%

Cables 661,900 0.18% 96,185 0.02% 744,510 0.14%

Construction 21,866,860 5.81% 8,675,833 1.53% 10,260,326 1.89%

Containers and ports 1,813,903 0.48% 1,543,051 0.27% 2,974,909 0.55%

Engineering 1,531,426 0.41% 3,472,111 0.61% 1,618,692 0.30%

Glass and Allied 301,653 0.08% 385,593 0.07% 220,958 0.04%

Hotels 2,708,633 0.72% 1,223,853 0.22% 438,627 0.08%

Infrastructure 2,273,671 0.60% 4,285,714 0.76% 31,461,991 5.81%

Media 620,575 0.16% 365,056 0.06% 40,879 0.01%

Polyester and fibre 1,980,509 0.53% 623,175 0.11% 78,234 0.01%

Telecommunication 11,333,927 3.01% 3,894,923 0.69% 1,167,952 0.22%

Individuals 68,881,652 18.30% 278,129,372 49.00% 18,590,080 3.43%

Others 25,091,573 6.66% 76,540,295 13.48% 59,604,206 11.00%

376,480,024 100.00% 567,611,258 100.00% 541,971,833 100.00%




Chemical and pharmaceuticals 6,081,931 1.56% 11,971,327 2.38% 1,235,141 0.27%Agri business 50,894,347 13.03% 21,026,267 4.17% 48,362 0.01%Textile spinning 19,541,766 5.00% 1,225,983 0.24% 3,153,486 0.70%Textile weaving 7,788,745 1.99% 804,049 0.16% 3,307,899 0.73%Textile composite 21,246,034 5.44% 965,467 0.19% 244,588 0.05%Textile others 13,090,077 3.35% 1,981,459 0.39% 2,521,137 0.56%Cement 6,508,094 1.67% 988,097 0.20% 1,471,077 0.33%Sugar 7,068,609 1.81% 2,360,348 0.47% 16,915 0.00%Shoes and leather garments 2,200,397 0.56% 1,827,377 0.36% 11,522 0.00%Automobile and transportation equipment 5,574,069 1.43% 4,318,840 0.86% 1,306,428 0.29%Financial 5,679,937 1.45% 11,835,140 2.35% 262,516,211 58.29%Insurance - 0.00% 13,802,720 2.74% 37,673 0.01%Electronics and electrical appliances 2,159,288 0.55% 7,076,567 1.40% 1,931,037 0.43%Production and transmission of energy 41,179,308 10.55% 19,932,300 3.96% 20,328,644 4.51%Paper and allied 1,125,589 0.29% 1,016,292 0.20% 267,165 0.06%Surgical and metal 567,366 0.15% 1,553,961 0.31% 95,659 0.02%Contractors 2,600,466 0.67% 18,104,119 3.59% 20,133,503 4.47%Wholesale traders 11,749,311 3.01% 26,658,663 5.29% 1,383,149 0.31%Fertilizer dealers 5,729,029 1.47% 9,516,985 1.89% 1,461,840 0.32%Sports goods 432,121 0.11% 868,470 0.17% 70,510 0.02%Food industries 7,470,504 1.91% 3,231,634 0.64% 2,241,180 0.50%Airlines 5,569,645 1.43% 1,621,206 0.32% 118,910 0.03%Cables 379,600 0.10% 225,097 0.04% 255,330 0.06%Construction 26,087,924 6.68% 7,793,699 1.55% 7,829,209 1.74%Containers and ports 95,855 0.02% 1,223,696 0.24% 1,036,486 0.23%Engineering 1,496,050 0.38% 3,124,994 0.62% 3,093,417 0.69%Glass and Allied 444,982 0.11% 914,092 0.18% 316,022 0.07%Hotels 2,747,484 0.70% 1,018,965 0.20% 303,976 0.07%Infrastructure 2,507,584 0.64% 4,547,147 0.90% 32,018 0.01%Media - 0.00% 448,233 0.09% 77,411 0.02%Polyester and fibre 3,403,956 0.87% 409,196 0.08% 117,122 0.03%Telecommunication 8,557,307 2.19% 3,526,634 0.70% 25,329,025 5.62%Individuals 81,411,045 20.85% 269,979,202 53.59% 3,361,186 0.75%Others 39,105,533 10.01% 47,933,446 9.51% 84,734,076 18.81%

390,493,953 100.00% 503,831,672 100.00% 450,387,314 100.00%44.2.2 Segment by Sector




376,480,024 100.00% 567,611,258 100.00% 541,971,833 100.00%




390,493,953 100.00% 503,831,672 100.00% 450,387,314 100.00%




44.2.3 Details of non performing advances and specific provisions by class of business segment


(Rupees in '000)

Chemical and pharmaceuticals 226,502 196,114 309,349 177,596Agri business 1,430,020 903,057 1,508,525 862,526Textile spinning 5,417,208 4,479,514 5,017,860 3,927,267Textile weaving 910,470 873,022 888,722 867,460Textile composite 5,210,214 2,337,315 998,902 765,271Textile others 2,282,350 1,937,098 2,935,380 2,365,528Cement - - 4,450 4,450Sugar 33,638 33,638 33,638 33,638Shoes and leather garments 226,903 224,110 241,948 180,321Automobile and transportation equipment 726,577 650,422 1,019,508 704,676Financial 2,166,734 64,132 59,305 22,348Electronics and electrical appliances 365,354 345,164 542,892 428,957Production and transmission of energy 3,049,109 2,981,719 2,927,748 1,942,137Paper and allied 179,264 113,240 173,212 116,438Surgical and metal - - 1,775 1,775Wholesale traders 1,167,377 881,274 1,024,613 648,018Fertilizer dealers 7,490 6,878 6,182 4,364Sports goods 128,325 128,325 280,675 279,310Food industries 1,258,725 964,667 795,442 781,194Construction 3,885,120 1,134,507 4,106,175 1,249,378Engineering 440,297 410,139 353,454 353,454Glass and Allied 24,527 12,264 29,796 14,899Hotels 485,993 113,086 489,493 116,586Polyester and fibre 1,751,479 1,743,679 1,702,376 1,668,561Individuals 13,241,553 9,817,528 11,145,588 8,073,785Others 3,997,849 3,193,224 3,468,229 2,110,913

48,613,078 33,544,116 40,065,237 27,700,850

44.2.4 Details of non performing advances and specific provision by sector


(Rupees in '000)

Public / Government - - - -Private 48,613,078 33,544,116 40,065,237 27,700,850

48,613,078 33,544,116 40,065,237 27,700,850

44.2.5 Geographical segment analysis2010

Profit before Total assets Net assets Contingencies &taxation employed employed commitments

(Rupees in '000)


Middle East 2,655,182 138,860,848 24,430,003 108,368,163United States of America 173,800 3,158,076 1,322,216 2,586,153Karachi Export Processing Zone 34,109 487,149 331,686 232,152Europe 122,890 29,381,797 9,209,030 2,294,420

2,985,981 171,887,870 35,292,935 113,480,88817,688,623 725,389,643 75,134,180 541,971,833

2009Profit before Total assets Net assets Contingencies &taxation employed employed commitments

(Rupees in '000)


Middle East 2,322,795 130,479,211 25,356,043 77,206,577United States of America 111,414 2,138,970 1,259,785 320,870Karachi Export Processing Zone 58,448 708,459 321,518 166,269Europe 95,224 22,661,929 8,149,517 3,702,120

2,587,881 155,988,569 35,086,863 81,395,83614,392,181 640,421,911 67,318,363 450,387,314

Total assets employed include intra group items of Rs.Nil.

44.3 Market Risk

Market risk is the uncertainity that the Group may experience due to movements in market prices. It results from changes ininterest rates, exchange rates, equity prices and volatilities of individual market factors as well as the correlations betweenthem. Each component of risk includes a general market risk and a specific aspect of market risk that originates in the portfoliostructure of a bank.

Measuring and controlling market risk is usually carried out at the portfolio level. However, certain controls are applied, wherenecessary, to individual risk types, to particular books and to specific exposures. Controls are also applied to prevent anyundue risk concentrations in trading books, taking into account variations in price, volatility, market depth and liquidity.These controls also include limits on exposure to individual market risk variables ('risk factors') as well as on concentrationsof tenors, issuers etc.

Trading activities are centered in the Treasury and Capital Markets (TCM) Group to facilitate clients as well as run proprietarypositions. The Group is active in the cash and derivative markets for equity, interest rate and foreign exchange.



Market and Treasury Risk (MTR) division performs market risk management activities. The division is composed of twounits, i.e., Market Risk Management and Treasury Middle Office. The Market Risk Management unit is responsible forthe development and review of market risk policies and processes, and is involved in research, financial modeling andtesting / implementation of risk management systems. Treasury Middle Office is responsible for monitoring andimplementation of market risk and other policies, escalation of any deviation to senior management, and MIS reporting.

The scope of market risk management is as follows:

- To keep the market risk exposure within the Group’s risk appetite as assigned by the Board of Directors (BoD) and theBoard Risk Management Committee (BRMC).

- To implement Risk Management policies approved by the BoD and BRMC jointly with the senior management throughMarket Risk Committee (MRC).

- To review new product proposals, propose/recommend/approve procedures for market risk management. Various limitsare assigned to different businesses on a product-portfolio basis. The products are approved through product programs,where risks are identified and limits and parameters are set. Any transaction/ product falling beyond the Product PolicyManual are approved through separate transaction / product memos.

- To develop, review and upgrade procedures for effective implementation of market risk management policy. It also includesimplementation of an Enterprise Risk Management solution for market risk.

- To maintain a comprehensive database for performing risk analysis, stress testing and scenario analysis. Stress testingactivities are performed on a quarterly basis which also includes banking book along-with trading book.

44.3.1 Foreign Exchange Risk2010

Assets Liabilities Off - balance Net foreignsheet items currency

exposure(Rupees in '000)

Pakistan Rupee 543,967,513 469,783,294 (10,416,912) 63,767,307US Dollar 51,721,592 39,509,427 (12,599,803) (387,638)Pound Sterling 25,215,268 24,991,638 7,056,742 7,280,372Japanese Yen 10,406 7,916 1,053 3,543Euro 2,731,292 5,970,493 3,414,013 174,812UAE Dirham 73,556,548 82,624,436 8,968,295 (99,593)Bahrain Dinar 9,079,631 11,750,538 2,654,725 (16,182)Qatari Riyal 3,541,983 3,746,636 256,878 52,225Other Currencies 15,565,410 11,871,085 665,009 4,359,334

725,389,643 650,255,463 - 75,134,180



2009Assets Liabilities Off - balance Net foreign

sheet items currencyexposure

(Rupees in '000)

Pakistan Rupee 544,326,154 477,308,787 (11,086,237) 55,931,130US Dollar 33,366,944 33,073,859 (544,997) (251,912)Pound Sterling 18,293,044 18,760,474 9,339,081 8,871,651Japanese Yen 315,278 275,066 (41,117) (905)Euro 1,040,133 4,601,339 3,497,421 (63,785)UAE Dirham 3,078,195 2,121,758 (1,061,846) (105,409)Bahrain Dinar 18,850,218 18,874,901 - (24,683)Qatari Riyal 795,762 - (842,508) (46,746)Other Currencies 20,356,183 18,087,364 740,202 3,009,021

640,421,911 573,103,548 - 67,318,363

Foreign Exchange Risk is the uncertainty that the Group is exposed to due to changes in exchange rates. Foreign exchangepositions are reported on a consolidated basis and limits are used to monitor exposure in individual currencies.

The Group is an active participant in currency cash and derivatives markets and carries currency risk from these tradingactivities, conducted primarily by Treasury and Capital Markets Group. These trading exposures are subject to prescribedstress tests and sensitivity analysis.

The Group's reporting currency is the Pakistani Rupee, but its assets, liabilities, income and expenses are denominated indifferent currencies. Treasury and Capital Markets Group from time to time, proactively hedges significant expected foreigncurrency earnings / costs within a time horizon of up to one year, in accordance with the instructions of the SBP and subjectto pre-defined limits.

44.3.2 Equity position risk

Equity position risk arises due to changes in prices of individual stocks or levels of equity indices. The Group’s equity bookcomprises of Held for Trading (HFT) & Available for Sale (AFS) portfolios. The objective of the HFT portfolio is to make short-term capital gains, whilst the AFS portfolio is maintained with a medium-term view of capital gains and dividend income.Separate product program manuals have been developed to discuss in detail the objectives and policies, risks and mitigants,limits and controls for the equity portfolios of the Group.

44.3.3 Yield / Interest Rate Risk

Interest rate risk is the uncertainty resulting from changes in interest rates, including changes in the shape of yield curves.Interest rate risk is inherent in many of the Group's businesses and arises from factors such as mismatches betweencontractual maturities or re-pricing of on and off balance sheet assets and liabilities. Interest rate risk arises mainly throughHTM investments, advances and deposits. The interest sensitivity profile is prepared on a quarterly basis based on the re-pricing or maturities of assets and liabilities.

The objective of yield / interest rate risk management is to minimize adverse variances in the Group's profitability. Interest raterisk in the banking book is managed by performing periodic gap analysis, sensitivity analysis and stress testing.





44.3.4Mismatchofinterestratesensitiveassetsandliabilities

2010ExposedtoYield

/Interestrisk

Non-interest

Effective

Total

Upto

Over

Over

Over

Over

Over

Over

Over

Over

bearing

yield/

1month

1month

to3monthsto

6monthsto

1year

to2year

to3year

to5year

to10

years

financial

Interestrate

3months

6months

1year

2years

3years

5years

10years

instruments

%(Rupeesin'000)


Assets


0.28%

67,667,226

--

--

--

--

-67,667,226


0.7%

25,980,928

19,533,240

4,239,309

211,360

--

--

--

1,997,019


9.2%

12,384,778

5,170,604

2,679,720

732,223

1,284,550

2,165,956

145,058

206,667

--

-Investments

11.0%

231,717,214

14,349,668

75,393,453

82,847,477

15,846,289

3,619,142

3,650,019

4,572,191

17,912,130

3,961,636

9,565,209

Advances

11.7%

Performing

326,441,450

52,735,525

186,687,213

57,323,119

11,909,154

4,178,645

7,623,532

5,875,584

34,180

74,498

-NonPerforming

15,068,962

--

--

--

--

-15,068,962

Operatingfixed

assets-Ijarah

assets

6.55%-25.00%

692,584

346,292

9,765

18,603

26,533

48,910

125,787

80,692

35,908

94-

Otherassets

0%14,227,854

--

--

--

--

-14,227,854

694,180,996

92,135,329

269,009,460

141,132,782

29,066,526

10,012,653

11,544,396

10,735,134

17,982,218

4,036,228

108,526,270

Liabilities

Billspayable

0%5,074,700

--

--

--

--

-5,074,700

Borrowings

11.0%

47,631,814

28,608,736

5,596,108

7,670,247

544,798

332,891

855,859

569,933

3,336,625

-116,617


4.0%

567,611,258

113,347,019

129,330,528

63,404,043

51,534,152

3,044,356

2,281,413

2,358,697

8,692,490

-193,618,560

Subordinatedloans

11.91%

11,985,748

-7,991,228

-665,040

1,330,080

1,999,400

--

-Liabilitiesagainstassetssubject

tofinancelease

0.00%

--

--

--

--

--

-Otherliabilities

0%15,747,885

--

--

--

--

-15,747,885

648,051,405

141,955,755

142,917,864

71,074,290

52,743,990

4,707,327

5,136,672

2,928,630

12,029,115

-214,557,762

On-balancesheetgap

46,129,591

(49,820,426)

126,091,596

70,058,492

(23,677,464)

5,305,326

6,407,724

7,806,504

5,953,103

4,036,228

(106,031,492)


29,004,589

Totalnetassets

75,134,180



6,985,703

2,000,000

1,129,713

380,183

-500,000

1,000,000

-1,975,807

--


(6,985,703)

-(1,629,713)

(1,880,183)

(1,000,000)

-(1,000,000)

-(1,475,807)

--

CrossCurrencySw

ap-Longposition

35,570,843

5,255,285

24,893,088

5,422,470

--

--

--

-CrossCurrencySw

ap-ShortPosition

(35,570,843)

(5,255,285)

(24,893,088)

(5,422,470)

--

--

--

-Sw

aptions-LongPosition

--

--

--

--

--

-Sw

aptions-ShortPosition

--

--

--

--

--

-FX

Options-Longposition

2,055,442

--

--

--

--

-2,055,442


(2,055,442)

--

--

--

--

-(2,055,442)


--

--

--

--

--


--

--

--

--

--


--

--

--

--

--


--

--

--

--

--

-ForwardRateAgreem

ents-Shortposition

--

--

--

--

--

-ForwardRateAgreem

ents-Longposition

--

--

--

--

--


--

--

--

--

--


(441,981)

-(441,981)

--

--

--

--

Foreigncurrencyforwardsales

(85,906,329)

(48,388,154)

(32,245,519)

(5,246,944)

(25,712)

--

--

--

Foreigncurrencyforwardpurchases

131,134,706

52,344,200

50,772,312

26,823,607

1,149,200

45,387

--

--

-

Off-balancesheetgap

44,786,396

5,956,046

17,584,812

20,076,663

123,488

545,387

--

500,000

--


90,915,987

(43,864,380)

143,676,408

90,135,155

(23,553,976)

5,850,713

6,407,724

7,806,504

6,453,103

4,036,228

(106,031,492)


(43,864,380)

99,812,028

189,947,183

166,393,207

172,243,920

178,651,644

186,458,148

192,911,251

196,947,479

90,915,987

Yield

riskistheriskofdecline

inearningsduetoadversemovem

entofthe

yieldcurve.





2009ExposedtoYield

/Interestrisk

Non-interest

Effective

Total

Upto

Over

Over

Over

Over

Over

Over

Over

Over

bearing

yield/

1month

1month

to3monthsto

6monthsto

1year

to2year

to3year

to5year

to10

years

financial

Interestrate

3months

6months

1year

2years

3years

5years

10years

instruments

%(Rupeesin'000)


Assets


0.01%

61,562,141

15,707,909

--

--

--

--

45,854,232


0.6%

14,049,990

6,546,749

2,029,733

680,099

--

--

--

4,793,409


10.8%

23,162,130

18,483,354

2,773,622

385,669

143,875

1,210,610

165,000

--

--

Investments

10.4%

137,734,578

6,054,477

49,292,312

28,353,250

17,014,397

3,252,847

4,407,582

1,432,058

13,138,356

3,639,751

11,149,548

Advances

13.0%

Performing

349,715,209

77,542,326

144,052,123

52,589,999

51,493,148

10,279,900

6,853,267

6,853,267

--

51,179

NonPerforming

12,364,387

--

--

--

--

-12,364,387

Operatingfixed

assets-Ijarah

assets

10%-23%

514,391

--

514,391

--

--

--

-Otherassets

0%13,108,576

--

--

--

--

-13,108,576

612,211,402

124,334,815

198,147,790

82,523,408

68,651,420

14,743,357

11,425,849

8,285,325

13,138,356

3,639,751

87,321,331

Liabilities

Billspayable

0%5,166,361

--

--

--

--

-5,166,361

Borrowings

11.2%

37,168,277

11,691,719

6,701,606

14,316,171

455,496

526,093

283,755

137,058

2,928,274

88,581

39,524


4.8%

503,831,672

103,680,943

123,272,252

42,761,077

52,195,507

7,234,507

3,539,662

3,539,662

3,513,600

-164,094,462

Subordinatedloans

12.60%

11,989,800

-7,994,424

-424

665,467

1,330,085

1,999,400

--

-Liabilitiesagainstassetssubject

tofinancelease

11.5-14.5%

611

--

478

133

--

--

--

Otherliabilities

0%13,358,662

--

--

--

--

-13,358,662

571,515,383

115,372,662

137,968,282

57,077,726

52,651,560

8,426,067

5,153,502

5,676,120

6,441,874

88,581

182,659,009

On-balancesheetgap

40,696,019

8,962,153

60,179,508

25,445,682

15,999,860

6,317,290

6,272,347

2,609,205

6,696,482

3,551,170

(95,337,678)


26,622,344

Totalnetassets

67,318,363



11,014,381

7,094,496

175,000

421,208

1,050,196

102,273

750,000

1,000,000

421,208

--


(11,014,381)

(957,598)

(382,598)

(2,198,481)

-(1,000,000)

-(6,054,496)

(421,208)

--

CrossCurrencySw

ap-Longposition

36,372,837

5,712,267

25,438,470

5,222,100

--

--

--

-CrossCurrencySw

ap-ShortPosition

(36,372,837)

(5,712,267)

(25,438,470)

(5,222,100)

--

--

--

-Sw

aptions-LongPosition

2,527,248

-2,527,248

--

--

--

--

Swaptions-ShortPosition

(2,527,248)

-(2,527,248)

--

--

--

--

FXOptions-Longposition

410,535

--

--

--

--

-410,535


(410,535)

--

--

--

--

-(410,535)


--

--

--

--

--


--

--

--

--

--


--

--

--

--

--


--

--

--

--

--

-ForwardRateAgreem

ents-Shortposition

--

--

--

--

--

-ForwardRateAgreem

ents-Longposition

--

--

--

--

--


--

--

--

--

--


--

--

--

--

--

-Foreigncurrencyforwardsales

(47,499,455)

(35,327,341)

(11,286,064)

(886,050)

--

--

--

-Foreigncurrencyforwardpurchases

92,086,590

26,411,085

42,328,428

22,624,587

722,491

--

--

--

Off-balancesheetgap

44,587,135

(2,779,358)

30,834,766

19,961,264

1,772,687

(897,727)

750,000

(5,054,496)

--

-


85,283,154

6,182,795

91,014,274

45,406,946

17,772,547

5,419,563

7,022,347

(2,445,291)

6,696,482

3,551,170

(95,337,678)

CumulativeYield/InterestRisk

SensitivityGap

6,182,795

97,197,069

142,604,014

160,376,561

165,796,124

172,818,471

170,373,180

177,069,662

180,620,832

85,283,154

Yield

riskistheriskofdecline

inearningsduetoadversemovem

entofthe

yieldcurve.





44.4

LiquidityRisk

LiquidityriskistherisktotheGroup

arisingfrom

eitheritsinabilitytomeetitsobligations

ortofund

increase

inassetsas

theyfalldue

withoutincurringunacceptable

costorlosses.

TheAssetsandLiabilityManagem

entCom

mittee(ALCO)oftheGroup

hastheresponsibilityfortheformulationoverallstrategyandoversightofliquiditymanagem

entand

meets

onamonthlybasisormorefrequently,ifrequired.

TheGroup’sapproachtoliquiditymanagem

entistoensure,asfaraspossible,thatitwillalwayshavesufficientliquiditytomeetitsliabilitieswhendue,underbothnormaland

stressed

conditions,withoutincurringunacceptablelossesorrisking

sustaineddamagetobusinessfranchises.Acentralized

approach

isadopted,basedon

anintegrated

frameworkincorporatingan

assessmentofallm

aterialknownandexpected

cash

flowsandtheavailabilityofcollateralwhich

couldbe

used

tosecureadditionalfunding

ifrequired.Theframeworkentailscarefulmonitoringandcontrolofthedailyliquidityposition,andregularliquiditystresstestingunderavarietyofscenarios.Scenariosencompass

bothnormalandstressed

marketconditions,includinggeneralmarketcrisesandthepossibilitythataccesstomarketscouldbe

impacted

byastresseventaffectingsome

partoftheGroup’sbusiness.

44.4.1

Maturitiesofassetsandliabilities-basedon

contractualmaturityoftheassetsandliabilitiesoftheGroup

ThematurityprofilesetoutbelowhasbeenpreparedasrequiredbyIASonthebasisofcontractualmaturities,exceptforproductsthatdo

nothaveacontractualmaturitywhich

areshowninthefirstbucket.Thematurityprofiledisclosedinnote44.4.2includesmaturitiesofproductsthatdo

nothaveacontractualmaturity,asdetermined

bytheAssets

andLiabilitiesManagem

entCom

mittee(ALCO)keeping

inview

thehistoricalbehaviouralpatternoftheseproducts.

2010

Total

Upto1

Over1

month

Over3

monthsOver6

months

Over1

years

Over2

years

Over3

years

Over5

years

Over

month

to3months

to6months

to1year

to2years

to3years

to5years

to10

years

10years

(Rupeesin'000)

Assets


67,667,226

62,619,532

--

--

--

-5,047,694


25,980,928

21,530,259

4,239,309

211,360

--

--

--


12,384,778

5,996,233

2,679,728

897,322

1,071,050

1,388,722

145,058

206,665

--

Investments

231,717,214

11,853,741

43,738,459

63,448,607

36,103,690

17,925,607

22,700,516

11,281,533

12,838,951

11,826,110

Advances

341,510,412

110,803,529

49,421,817

33,330,206

27,112,702

9,935,324

13,886,891

45,929,735

40,953,470

10,136,738

Operatingfixed

assets

24,684,566

2,408,336

410,927

883,482

1,414,936

1,970,618

998,142

1,583,020

2,267,867

12,747,238

Deferredtaxasset

1,298,247

--

-584,125

714,122

--

--

Otherassets

20,146,272

6,199,723

9,279,214

183,940

4,176,229

297,012

-9,504

650

-725,389,643

221,411,353

109,769,454

98,954,917

70,462,732

32,231,405

37,730,607

59,010,457

56,060,938

39,757,780

Liabilities

Billspayable

5,074,700

4,895,421

179,279

--

--

--

-Borrowings

47,631,814

29,655,296

5,596,108

7,547,247

544,798

332,891

761,776

524,380

2,669,318


567,611,258

435,033,340

56,131,986

25,441,292

21,159,934

5,323,709

4,090,718

4,003,809

16,426,470

-Subordinatedloans

11,985,748

-2,028

-666,640

1,997,816

2,667,136

670,128

5,982,000

-Liabilitiesagainstassets

subjecttofinanceleases

--

--

--

--

--

Otherliabilities

17,951,943

(832,995)

7,150,286

679,457

5,847,004

2,711,842

494,052

-1,902,297

-650,255,463

468,751,062

69,059,687

33,667,996

28,218,376

10,366,258

8,013,682

5,198,317

26,980,085

-Netassets

75,134,180

(247,339,709)

40,709,767

65,286,921

42,244,356

21,865,147

29,716,925

53,812,140

29,080,853

39,757,780

Representedby:

Sharecapital

12,241,798

Reserves

24,101,838


27,576,333

Non-controllinginterest

2,207,241

Surplus


9,006,970

75,134,180



2009

Total

Upto1

Over1

month

Over3

monthsOver6

months

Over1

years

Over2

years

Over3

years

Over5

years

Over

month

to3months

to6months

to1year

to2years

to3years

to5years

to10

years

10years

(Rupeesin'000)

Assets


61,562,141

48,461,144

--

--

--

-13,100,997


14,049,990

9,836,577

2,662,509

899,726

180,043

37,672

--

-433,463


23,162,130

18,323,555

2,319,313

783,185

216,592

354,485

1,000,000

165,000

--

Investments

137,734,578

2,132,842

20,045,826

19,544,119

20,076,565

6,708,279

8,084,089

33,793,777

25,404,237

1,944,844

Advances

362,079,596

122,194,667

44,938,461

37,724,332

37,850,760

27,098,325

7,526,873

25,376,341

51,269,189

8,100,648

Operatingfixed

assets

23,734,082

1,940,947

364,608

749,032

769,222

2,347,761

907,601

1,613,853

2,622,572

12,418,486

Deferredtaxasset

649,814

40,744

--

273,858

335,212

--

--

Otherassets

17,449,580

1,790,871

1,781,912

9,618,760

2,133,950

1,740,158

-383,929

--

640,421,911

204,721,347

72,112,629

69,319,154

61,500,990

38,621,892

17,518,563

61,332,900

79,295,998

35,998,438

Liabilities

Billspayable

5,166,361

4,972,520

193,841

--

--

--

-Borrowings

37,168,277

11,700,809

6,732,040

14,366,171

405,496

526,093

283,755

137,058

2,928,274

88,581


503,831,672

426,804,901

42,046,318

8,488,651

9,957,838

6,811,436

702,303

1,062,379

7,957,846

-Subordinatedloans

11,989,800

-2,024

-2,024

668,667

1,997,821

3,334,864

5,984,400



611

--

-611

--

--

-Otherliabilities

14,946,827

30,693,887

(26,713,934)

1,729,996

7,450,947

(126,524)

--

1,912,455

-573,103,548

474,172,117

22,260,289

24,584,818

17,816,916

7,879,672

2,983,879

4,534,301

18,782,975

88,581

Netassets

67,318,363

(269,450,770)

49,852,340

44,734,336

43,684,074

30,742,220

14,534,684

56,798,599

60,513,023

35,909,857

Representedby:

Sharecapital

11,128,907

Reserves

21,167,954


23,617,875

Non-controllingInterest

2,279,691

Surplus


9,123,936

67,318,363



44.4.2

Maturitiesofassetsandliabilities-basedon

working

prepared

bytheAssetsandLiabilitiesManagem

entCom

mittee(ALCO)oftheGroup

Currentandsavingsdepositsdo

nothaveanycontractualmaturitytherefore,currentdepositsandsavingsaccountshavebeenclassifiedbetweenallfourmaturities.Further,

ithasbeenassumed

thaton

agoingconcernbasis,thesedepositsarenotexpectedtofallbelowthecurrentyear'slevel.

2010

Total

Upto1

Over1

month

Over3

monthsOver6

months

Over1

years

Over2

years

Over3

years

Over5

years

Over

month

to3months

to6months

to1year

to2years

to3years

to5years

to10

years

10years

(Rupeesin'000)

Assets


67,667,226

32,630,131

5,961,763

4,315,224

4,895,168

5,617,703

226,485

184,107

13,836,645


25,980,928

19,725,869

6,043,699

211,360

--

--

--


12,384,778

5,096,880

3,579,671

897,322

1,070,458

1,388,722

145,058

206,667

--

Investments

231,717,214

12,854,140

42,379,183

67,041,417

28,460,278

9,414,858

14,304,419

28,789,336

26,360,101

2,113,482

Advances-Performing

326,441,450

97,158,964

98,492,837

27,027,709

25,160,493

6,924,150

12,388,931

21,201,986

28,367,635

9,718,745

-Non

Performing

15,068,962

--

--

--

-15,068,962

-Otherassets

20,146,272

2,009,611

1,484,016

11,867,123

3,850,892

297,012

-9,504

628,114

-Operatingfixed

assets

24,684,566

2,192,872

1,937

2,905

8,556

19,364

11,620

23,240

22,424,072

-DeferredtaxAssets

1,298,247

--

-584,125

714,122

--

--

725,389,643

171,668,467

157,943,106

111,363,060

64,029,970

24,375,931

27,076,513

50,414,840

106,685,529

11,832,227

Liabilities

Billspayable

5,074,700

4,068,123

1,006,577

--

--

--

-Borrowing

47,631,814

31,249,685

10,138,567

5,326,026

--

-917,536

--


567,611,258

124,708,489

89,810,309

63,521,312

58,651,534

63,173,648

4,090,812

4,003,812

159,651,342

-Subordinatedloan

11,985,748

-2,028

-666,640

1,997,816

2,667,136

670,128

5,982,000



--

--

--

--

--

Otherliabilities

17,951,943

(6,098,754)

1,272,008

(561,825)

5,154,457

2,711,842

494,053

10,040,293

2,841,691

2,098,178

650,255,463

153,927,543

102,229,489

68,285,513

64,472,631

67,883,306

7,252,001

15,631,769

168,475,033

2,098,178

Netassets

75,134,180

17,740,924

55,713,617

43,077,547

(442,661)

(43,507,375)

19,824,512

34,783,071

(61,789,504)

9,734,049

Representedby:

Sharecapital

12,241,798

Reserves

24,101,838


27,576,333


2,207,241

Surplus


9,006,970

75,134,180



2009

Total

Upto1

Over1

month

Over3

monthsOver6

months

Over1

years

Over2

years

Over3

years

Over5

years

Over

month

to3months

to6months

to1year

to2years

to3years

to5years

to10

years

10years

(Rupeesin'000)

Assets


61,562,141

30,417,709

5,744,339

3,821,791

4,031,174

5,046,748

107,770

294,807

12,097,803


14,049,990

10,364,189

2,443,990

824,096

180,043

37,672

--

200,000


23,162,130

20,623,296

2,159,149

169,075

-210,610

--

--

Investments

137,734,578

17,557,963

19,241,497

18,917,627

16,066,142

5,469,278

3,794,038

29,480,465

25,093,085

2,114,483

Advances-Performing

349,715,209

113,791,821

53,482,143

34,093,945

31,042,626

26,082,159

8,800,873

26,010,075

47,508,041

8,903,526

-Non

Performing

12,364,387

--

--

--

-12,364,387

-Otherassets

17,449,580

3,166,659

1,019,732

12,540,173

62,799

--

-660,217

-Operatingfixed

assets

23,734,082

1,745,741

--

-62,671

--

21,925,670

-DeferredtaxAssets

649,814

40,744

--

274,188

334,882

--

--

640,421,911

197,708,122

84,090,850

70,366,707

51,656,972

37,244,020

12,702,681

55,785,347

119,849,203

11,018,009

Liabilities

Billspayable

5,166,361

3,983,539

1,182,822

--

--

--

-Borrowing

37,168,277

15,452,801

13,603,220

6,848,198

--

-1,264,058

--


503,831,672

99,619,122

101,402,301

49,270,259

54,014,009

60,048,963

1,826,977

4,593,456

133,056,585

-Subordinatedloan

11,989,800

-2,024

-2,024

668,667

1,997,821

3,334,864

5,984,400



611

--

-611

--

--

-Otherliabilities

14,946,827

485,102

12,363,311

--

--

-2,098,414

-573,103,548

119,540,564

128,553,678

56,118,457

54,016,644

60,717,630

3,824,798

9,192,378

141,139,399

-

Netassets

67,318,363

78,167,558

(44,462,828)

14,248,250

(2,359,672)

(23,473,610)

8,877,883

46,592,969

(21,290,196)

11,018,009

Representedby:

Sharecapital

11,128,907

Reserves

21,167,954


23,617,875


2,279,691

Surplus


9,123,936

67,318,363

44.5 Operational Risk

Operational risk is the risk of loss resulting from inadequate or failed internal processes, people and systems or from externalevents.

The Group’s Operational Risk Management implementation framework is based on the advanced risk managementarchitecture. The framework is flexible enough to implement in stages, and permits the overall risk management approach toevolve in response to organizational learning and the future needs of the organization.

Following are the high-level strategic initiatives that the Group has undertaken for the effective implementation of OperationalRisk Management:

- Recruiting skilled resources for Operational Risk Management.

- Developing an operational risk management infrastructure.

- Determining the current state of key risks and their controls residing in each business unit.

- Developing policies, procedures and defining end-to-end information flow to establish a vigorous governance infrastructure.

- Implementing systems for data collection, migration, validation and retention for current and historical reference andcalculation.

A consolidated Business Continuity Plan is being augmented for the Group which encompasses roles and responsibilities,recovery strategy, IT and structural backups, scenario and impact analyses and testing directives.

There are several IT developments underway in the credit, market and operational risk areas. Specifically for operational riskmitigation and control, an IT infrastructure is being developed along with the other high-level initiatives, including process re-engineering and creating an inventory of risks and controls within the Group. A methodology for Risk and Control SelfAssessment has been implemented at all core units of the Group.



45. ISLAMIC BANKING BUSINESS

The Group operates 6 (2009: 5) Islamic banking branches and 17 (2009: 15) Islamic banking windows. The statement offinancial position of the Group's Islamic Banking Branches at December 31, 2010 is as follows:

2010 2009(Rupees in ‘000)

ASSETSCash and balances with treasury banks 389,582 208,180Balances with other banks 46,654 93,410Lendings to financial institutions 450,000 100,000Investments 2,884,260 1,563,953Financing and receivables

- Murabaha 203,787 154,650- Musharaka 166,667 222,222- Diminishing Musharaka 90,888 261,259

461,342 638,131

Operating fixed assets including assets given on Ijarah 426,052 598,452Due from head office 83,725 -Other assets 297,649 548,396Total Assets 5,039,264 3,750,522

LIABILITIES

Bills payable 970 4,522Deposits and other accounts

- Current accounts 724,750 429,412- Saving accounts 933,100 209,676- Term deposits 1,456,596 459,878- Deposits from financial institutions - remunerative 1,344,775 1,109,452

4,459,221 2,208,418

Due to head office - 948,744Other liabilities 101,782 84,544

4,561,973 3,246,228NET ASSETS 477,291 504,294

REPRESENTED BYIslamic Banking Fund 681,000 681,000Accumulated losses (203,000) (174,404)

478,000 506,596Deficit on revaluation of assets (709) (2,302)

477,291 504,294



The profit and loss account of the Group's Islamic Banking Branches for the year ended December 31, 2010 is as follows:

2010 2009(Rupees in ‘000)

Return earned 623,262 484,098Return expensed (308,015) (110,927)

315,247 373,171

(Provision) / reversal for diminution in value of investment (69,091) 99,904Reversal / (provision) against assets given on Ijarah 2,930 (6,177)

(66,161) 93,727Net return after provision 249,086 466,898

Other IncomeFee, commission and brokerage income 5,996 4,444Dividend income 9,871 12,169Income from dealing in foreign currencies 1,414 2,904Loss on sale of securities (4,750) (14,969)Other income 2,184 4,201Total other income 14,715 8,749

263,801 475,647

Other ExpensesAdministrative expenses (289,921) (304,000)Other provision / write offs (2,476) -Total other Expenses (292,397) (304,000)Net (loss) / profit for the year (28,596) 171,647

Accumulated losses brought forward (174,404) (346,051)Accumulated losses carried forward (203,000) (174,404)

Remuneration to Shariah Advisor / Board 2,615 1,924

Charity FundOpening balance 20,732 19,609Addition during the period 840 6,629Payment / utilization during the period (9,780) (5,506)Closing balance 11,792 20,732



46. NON-ADJUSTING EVENT AFTER THE BALANCE SHEET DATE

The Board of Directors in its meeting held on February 21, 2011 has proposed a cash dividend in respect of 2010 ofRs. 4.00 per share (2009: cash dividend Re.2.50 per share). In addition, the directors have also announced a bonus issueof Nil (2009: 10%). These appropriations will be approved in the forthcoming Annual General Meeting. The consolidatedfinancial statements for the year ended December 31, 2010 do not include the effect of these appropriations which willbe accounted for in the consolidated financial statements for the year ending December 31, 2011.

47. DATE OF AUTHORIZATION

These financial statements were authorized for issue on February 21, 2011, by the Board of Directors of the Group.

48. GENERAL

48.1 Comparatives

Comparative information has been re-classified, re-arranged or additionally incorporated in these consolidated financialstatements for the purposes of better presentation. Major reclassifications made are as follows:

- Rs.249.990 million has been reclassified from other income - others to mark-up/interest earned on advances to customers(income on ijarah financing).

- Rs.1,122.772 million has been reclassified from balance with SBP in foreign currency deposit account to balance with SBPin foreign currency current account.

- Rs.1,650.896 million has been reclassified from borrowing in Pakistan to borrowing outside Pakistan.

- Unrealized mark-up held in suspense account amounting to Rs.1,087.189 million has been merged with provision againstother assets.

48.2 Figures have been rounded off to the nearest thousand rupees unless otherwise stated.








1) Particulars of Investment held in listed companies and modarbas

Investee Number of Paid up value Total Costshares / per share / paid up

certificates held certificate value

(Rupees) (Rupees in '000)Held for trading securities

Investment in ordinary sharesEngro Corporation Limited 20,000 10.00 200 3,912Lotte Pakistan PTA Limited 250,000 10.00 2,500 3,287Nishat Chunian Limited 50,000 10.00 500 1,150Pakistan Telecommunication Company Limited 30,000 10.00 300 579

8,928Investment in units of mutual fundsAberdeen Money Market Funds 313 141 44,283 46,966

46,966Available for sale securitiesInvestment in ordinary sharesAdamjee Insurance Company Limited 2,006,000 10.00 20,060 269,001Arif Habib Corporation Limited 1,810,000 10.00 18,100 78,803Atlas Fund Of Funds 800,000 10.00 8,000 7,619Bank Al-Falah Limited 3,683,029 10.00 36,830 46,634BOC Pakistan Limited 338,202 10.00 3,382 44,831D.G. Khan Cement Limited 3,337,387 10.00 33,374 192,199Engro Polymer & Chemicals Limited 3,950,857 10.00 39,509 69,785Fauji Cement Company Limited 105,378,671 10.00 1,053,787 1,710,520First Dawood Mutual Fund 491,000 10.00 4,910 4,227Hira Textile Mills Limited 2,000,000 10.00 20,000 25,000IGI Investment Bank Limited 9,986,501 10.00 99,865 99,865Jahangir Siddiqui & Company Limited 2,000,000 10.00 20,000 91,564KASB Securities Limited 2,342,117 10.00 23,421 158,093Kohat Textile Mills Ltd 100,000 10.00 1,000 1,000Lotte Pakistan PTA Limited 2,489,771 10.00 24,898 33,593National Bank Of Pakistan 1,000,000 10.00 10,000 75,073Nishat Mills Limited 400,000 10.00 4,000 23,230Nishat Power Limited 3,359,679 10.00 33,597 53,318Pak Oilfields Limited 300,000 10.00 3,000 88,111Pakistan Petroleum Limited 523,148 10.00 5,231 113,580Pakistan State Oil Company Limited 1,003,000 10.00 10,030 301,337Pakistan Telecommunication Company Limited 650,000 10.00 6,500 32,800Sakrand Sugar Mills Limited 1,443,540 10.00 14,435 10,936Saritow Spinning Mills Limited 409,000 10.00 4,090 4,090Shell Pakistan Limited 106,672 10.00 1,067 24,966Visa Inc. 12,805 4,193.83 53,702 53,702DP World 138,528 8.56 1,186 15,422PICIC Growth Fund 600 10.00 6 101st Fidelity Leasing Modaraba 997 10.00 10 26

3,629,335Investments in preference sharesChenab Limited 7,889,482 10.00 78,895 78,895Masood Textile Mills Limited 11,000,000 10.00 110,000 110,000JSC Alliance Bank 95,720 3,892.00 275,082 275,082Chenab Ltd.(Pref) 812,000 10.00 8,120 8,120

472,097Investments in units of mutual fundsAtlas Stock Market Fund 17,364 100.00 1,736 5,000Faysal Asset Allocation Fund 406,890 500.00 203,445 38,386Faysal Balance Growth Funds 117,392 50.00 5,870 7,201Meezan Islamic Income Funds 2,209,003 50.00 110,450 114,075

164,662


[ Annexure 'A' as referred to in note 9.8 of Group'sConsolidated Financial Statements For the year ended December 31, 2010 ]

2) Particulars of Investment held in unlisted companies

Investee Percentage Number of Break-up Paid up Cost Based Name ofof holding shares / value value on audited Chief Executive(%) certificates per share per share accounts as at

held(Rupees) (Rupees) (Rupees in '000)


Shareholding more than 10%

Pakistan Agricultural Storage andServices Corporation Limited 18.3% 5,500 20,953 1,000 5,500 31-Mar-09 Maj Gen Sohail Shafkat

World Bridge Connect Inc. 18.1% 1,979,295 - - 77,606 - Gurojot Singh Khalsa

Cinepax Limited 14.6% 5,037,200 5 10 50,372 30-Jun-10 Arif Baigmohamed

Khushhali Bank Limited 11.7% 20,000,000 12 10 200,000 31-Dec-09 Ghalib Nishtar

Shareholding upto 10%

First Women Bank Limited 8.9% 2,532,000 37 10 21,100 31-Dec-09 Ms Shafqat Sultana

National Institutional FacilitationTechnologies (Pvt.) Limited 8.4% 914,093 53 10 1,527 30-Jun-10 M. M. Khan

National Investment Trust Limited 8.3% 79,200 12,310 100 100 30-Jun-10 Wazir Ali Khoja

News - VIS Credit InformationServices (Pvt.) Limited 4.7% 32,500 (2) 10 325 30-Jun-10 Faheem Ahmad

Techlogix International Limited 4.4% 4,455,829 3 0 50,703 31-Dec-09 Mr.Salman Akhtar &Kewan Khawaja(Co Chief Executive)

Equity Participation Fund 1.7% 27,000 665 100 2,700 31-Dec-08 Syed Shabahat Hussain(Executive Director)

Kay Textile Mills Limited - 377,800 - 10 3,778 - -

SME Bank Limited 1.7% 3,975,003 10 10 26,950 31-Dec-09 R. A. Chughtai

SWIFT 0.0% 25 293,090 - 2,905 31-Dec-09 Lazaro Campos

MasterCard Incorporated 0.0% 461 2,324 0 0 31-Dec-09 Ajay Banga

The Benefit Company B.S.C © 0.0% 80 - - 1,817 - Abdul Wahid Janahi

Tri Star Shipping Company 0.0% 15,000 - - 250 - N/A445,632




Investee Terms of Redemption Rate of OutstandingPrincipal Interest / Profit Interest / Profit Amount

(Rupees in '000)


Sukuk bondsMapple Leaf Cement Limited Half Yearly Half Yearly 6 month KIBOR

plus 1.70% 22,85222,852

Foreign securitiesAbu Dhabi Islamic Bank 2015 At Maturity Annually 3.746% 256,917DEWA 2016 At Maturity Half Yearly 6.375% 171,278Dexia Kommunal Bank At Maturity Annually 1.625% 226,262Dubai Government 2015 EMTN At Maturity Half Yearly 6.700% 86,816HSBC Bank Middle East At Maturity Annually 3.000% 88,683IPIC GMTN Limited -2015 At Maturity Half Yearly 3.125% 192,005Qatar International Finance - QTEL 2025 At Maturity Half Yearly 5.000% 254,245QNB Finance Limited 2015 At Maturity Half Yearly 3.125% 21,199Zurich Insurance At Maturity Annually 4.250% 94,781

1,392,186Government of Pakistan- Euro BondsGovernment of Pakistan - Euro Bonds At Maturity Half Yearly 6.88% 73,494

73,494Available for sale securities

Government of Pakistan Islamic BondsGovernment of Pakistan Ijarah Sukuk Bonds At Maturity Half Yearly Weighted average

yield of 6M T-Billsplus 45 bps 272,000

Government of Pakistan Ijarah Sukuk Bonds At Maturity Half Yearly Weighted averageyield of 6M T-Billsplus 75 bps 750,000

Government of Pakistan Ijarah Sukuk Bonds At Maturity Half Yearly Weighted averageyield of 6M T-Bills

plus 0 bps 2,400,000At Maturity Half Yearly Weighted average

yield of 6M T-Billplus 0 bps 700,000

4,122,000Government of Pakistan - EurobondIslamic Republic of Pakistan - 2017 - Eurobond At Maturity Half Yearly 6.875% 3,938,516

3,938,516





(Rupees in '000)

Foreign securitiesAtlantic Finance Limited -2014 At Maturity Half Yearly 10.750% 276,163Bank of Bahrain and Kuwait -2015 USD Bonds At Maturity Half Yearly 4.500% 171,552DEWA Sukuk - AL IJARAH FRN 2013 At Maturity Half Yearly 6M EBOR + 125bps 6,994,740Dubai Government AED FRN-2014 At Maturity Quarterly 3M EBOR + 370bps 514,134Dubai Government EMTN-2015 USD At maturity Half Yearly 6.700% 524,096Dubai Government USD FRN -2014 At Maturity Half Yearly 6.396% 76,224IPIC GMTN Limited -2020 At Maturity Half Yearly 5.000% 69,349Qatar DIAR Finance QSC-2020 At Maturity Quarterly 5.000% 429,937State of Qatar-2030 -USD Bonds At Maturity Quarterly 9.750% 1,424,175Tabreed 06 Financing Corporation FRN-2011 At Maturity Half Yearly 6M LIBOR + 125bps 900,359Tamweel Sukuk FRN 2013 At Maturity Quarterly 3M EBOR + 225bps 3,497,370UK Government At Maturity Quarterly 2.25% 273,848European Investment Bank At Maturity Quarterly 0.81% 133,101

15,285,049

Held to maturity securitiesGovernment of Pakistan Islamic BondsGovernment of Pakistan Sukuk Bond At Maturity Half Yearly 6M weighted avg.

cutt off yield of T-Billsplus 45 Bps 30,000

30,000

Government of Pakistan - Guaranteed BondsWapda Bonds - Sukuk II At Maturity Half Yearly 6M KIBOR

minus 25bps 51,39951,399

Government of Pakistan - Euro BondsGovernment of Pakistan - Euro Bonds At Maturity Half Yearly 6.88% 154,343Government of Pakistan - Euro Bonds At Maturity Half Yearly 6.88% 297,321Government of Pakistan - Euro Bonds At Maturity Half Yearly 6.88% 165,870Government of Pakistan - Euro Bonds At Maturity Half Yearly 6.88% 78,973

696,506Sukuk BondsDawood Hercules Chemicals Limited ^ Half Yearly * 542,880Security Leasing Corporation Bullet Repayment Half Yearly Simple Avg. of

6 months KIBORask side 43,164

B.R.R Guardian Modaraba 7 equal installments Half Yearly Simple Avg.starting from 2011 of 6 months KIBOR

ask side 100,000





(Rupees in '000)

K.S. Sulemanji - Diminishing Musharika Quarterly Quarterly Simple Avg. of3 months KIBOR

ask side 303,997Sitara Energy Limited Repayment after Half Yearly Avg. rate of

completion of 2 years 6 Month KIBORask side

plus 1.15% 73,977Sitara Peroxide Limited Quarterly Quarterly Avg rate of

3 Months KIBORask sideplus 1.1% 281,250

Pakistan International Airlines Limited Half Yearly Half Yearly 6 month KIBORplus 1.75% 890,000

Islamic Sukkuk Bonds - Central Bank of Bahrain At maturity Half Yearly 3.750% 313,4712,548,739

^ Principal redemption on semi annual basis after expiry of twelve months.* Average of 6 months KIBOR ask side plus 120 bps. The rental bench mark rate will be subject to a floor of 3.5% and cap of

25% per annum.


(Rupees in '000)Foreign securitiesJSC Alliance Bank - US $ Discount Bonds At Maturity Half Yearly 10.500% 185,756JSC Alliance Bank - US $ Recovery Notes At Maturity N/A N/A 283,812Srilanka Euro Bonds At Maturity Half Yearly 8.250% 1,714,696Bank of America At Maturity Quarterly 0.83% 66,079Bank of America At Maturity Quarterly 0.83% 66,261Bancaja Emisiones At Maturity Quarterly 0.87% 64,686Jackson Life At Maturity Quarterly 0.87% 106,027Bancaja Emisiones At Maturity Quarterly 0.89% 52,815GE Capital UK Funding At Maturity Quarterly 0.77% 198,436Caja de Ahorras del Mediterraneo At Maturity Quarterly 0.89% 248,409Bank of Ireland At Maturity Quarterly 0.79% 51,280Allied Irish Bank At Maturity Quarterly 0.82% 254,019Bank of America At Maturity Quarterly 0.90% 129,379Banco Santander At Maturity Quarterly 0.84% 130,143Bank of Ireland At Maturity Quarterly 0.81% 75,982Kuwait Projects Company At Maturity Quarterly 1.19% 127,740Old Mutual plc At Maturity Quarterly 0.80% 83,718Emirates Bank At Maturity Quarterly 0.56% 87,363Emirates Bank At Maturity Quarterly 4.79% 169,698SLM Corporation At Maturity Quarterly 1.30% 89,171Alpha Credit At Maturity Quarterly 1.24% 110,180





(Rupees in '000)Foreign securitiesBank of Bahrain and Kuwait At Maturity Quarterly 0.75% 290,342Bank of Bahrain and Kuwait At Maturity Quarterly 0.75% 170,917Mashreq Bank At Maturity Quarterly 0.67% 84,897Mashreq Bank At Maturity Quarterly 0.67% 169,528Mashreq Bank At Maturity Quarterly 0.67% 425,321Emirates Bank At Maturity Quarterly 1.33% 254,071Emirates Bank At Maturity Quarterly 1.33% 213,598Abu Dhabi Commercial Bank At Maturity Annually 5.63% 203,133Marks and Spencer At Maturity Annually 5.88% 131,800Morgan Stanley At Maturity Annually 7.50% 424,496Morgan Stanley At Maturity Annually 7.50% 141,670Bank of America At Maturity Annually 5.13% 172,868Bank of America At Maturity Annually 5.13% 277,952Citi Group At Maturity Annually 5.25% 382,599Citi Group At Maturity Annually 5.25% 215,723Citi Group At Maturity Annually 5.25% 222,737Unicredit Bank of Austria At Maturity Annually 5.63% 692,008Unicredit Bank of Austria At Maturity Annually 5.63% 144,598First Gulf Bank At Maturity Annually 4.00% 87,239Bank of America At Maturity Annually 5.13% 347,478Nationwide Mutual At Maturity Annually 6.25% 278,358Finance for Danish Industry At Maturity Annually 6.00% 109,053EIDG At Maturity Annually 4.00% 9,109EIDG At Maturity Annually 3.00% 18,267CS At Maturity Annually 4.00% 9,152

9,772,5624) Particulars of Debentures


(Rupees in '000)Public SectorSDA - Cold Storage Haripur Overdue Overdue 12.50% 1,300SDA - Cold Storage Haripur Overdue Overdue 12.00% 825

Private SectorEffef Ind Ltd Overdue Overdue 11.00% 1,017Effef Ind Ltd Overdue Overdue 14.00% 379Khyber Textile Mills Ltd Overdue Overdue 14.00% 395Morgah Valey Ltd Overdue Overdue 11.00% 316Morgah Valey Ltd Overdue Overdue 14.00% 160

4,392




Investee No. of Paid up value Total Paid up Outstanding Name ofCertificates held per certificate value Amount Chief Executive


Held for trading securitiesWorldcall Telecom Limited 4,855 5,000 24,275 19,416 Baber Ali SyedPakistan Mobile Communication Limited 10,000 5,000 50,000 42,750 Rashid KhanEngro Fertilizer Limited 10,000 5,000 50,000 44,265 Khalid Siraj Subhani

106,431

Unlisted - available for salePakistan International Airlines 1,700 5,000 8,500 8,495 Captain Muhammad Aijaz HaroonEngro Corporation Limited 7,000 100,000 700,000 702,241 Asad UmarFaysal Bank Limited 46,000 5,000 230,000 230,000 Naved A. KhanStandard Chartered BankPakistan Limited TFC II 2 5,000 10 3 Mohsin Ali Nathani

940,739

Listed - available for saleAllied Bank Limited TFC-II 53,000 5,000 265,000 273,208 Khalid A. SherwaniAzgard Nine Limited 60,000 5,000 300,000 224,694 Ahmed H. ShaikhBank Al Falah Limited TFC II 3,000 5,000 15,000 15,061 Sirajuddin AzizBank Al Falah Limited TFC III 26,200 5,000 131,000 133,307 Sirajuddin AzizBank Al Habib Limited TFC II 44,766 5,000 223,830 228,860 Abbas D. HabibBank Al Habib Limited TFC III 46,000 5,000 230,000 229,724 Abbas D. HabibEngro Corporation Limited TFC III 22,562 5,000 112,810 113,220 Asad UmarStandard Chartered BankPakistan Limited TFC II 4,000 5,000 20,000 5,000 Mohsin Ali NathaniAllied Bank Limited TFC-II 1 5,000 5 5 Khalid A. Sherwani

1,223,079

Unlisted - held to maturityPower Holding (Pvt) Limited 4,615,800 5,000 23,079,000 23,079,000 Fazeel AsifPakistan International Airlines Corporation 408,867 5,000 2,044,335 2,043,518 Captain Muhammad Aijaz HaroonOrix Leasing Pakistan Limited 2,000 100,000 200,000 166,667 Teizoon KisatCrescent Textile Mills Limited 110,000 5000 550,000 99,985 Muhammad AnwarAl Abbas Sugar Mills Limited 12,000 5,000 60,000 36,000 Shunaid QureshiDewan Farooq Spining Mills Limited 30,000 5,000 150,000 37,472 Dewan Abdul Baqi FarooquiSecurity Leasing Corporation Limited 40,000 5,000 200,000 60,937 Mohammad Khalid AliSME Leasing Limited 24,000 5,000 120,000 30,000 Mrs. Arjumand QaziFaysal Bank Limited 24,000 5,000 120,000 120,000 Naved A. KhanAl-Azhar Textile Mills Ltd 14 774,670 10,845 5,418 Mirza Muhammad Azhar BaigBachani Sugar Mills Ltd. - - - 25,500 Noorul Amin BachaniBentonite (Pakistan) Ltd 14 268,894 3,765 3,417 Khalid ShakilBlue Star Textile Mills Ltd 17 497,020 8,449 3,392 Chaudry Ghulam FaridCast-N-Link Products Limited 16 369,054 5,905 2,549 Nisar AhmedFrontier Ceramics Limited 46 370 17 1,965 Omer KhalidKhairpur Sugar Mills Limited 28 1,642,964 46,003 2,783 Mubeen JumaniRegency Textile Ltd 24 108,958 2,615 6,165 M. Iqtidar PervaizTanocrafts Ltd 22 156,227 3,437 537 Ashfaq HussainTharparkar Sugar Mills 5 1,754,000 8,770 26,238 Irfan Ali Shah

25,751,543






Listed - held to maturity

Allied Bank Limited TFC II 129,397 5,000 646,985 646,352 Khalid A. Sherwani

Askari Commercial Bank Limited 43,525 5,000 217,625 217,146 Mohammad Rafiquddin Mehkari

Askari Commercial Bank Limited 40,000 5,000 200,000 199,600 Mohammad Rafiquddin Mehkari

Bank Al Habib Limited 5,000 5,000 25,000 24,940 Abbas D. Habib

Faysal Bank Limited

(Formerly Royal Bank of Scotland) 22,000 5,000 110,000 82,346 Naved A. Khan

Soneri Bank Limited 999 5,000 4,995 4,984 Atif A. Bajwa

IGI Investment Bank Limited 31,083 5,000 155,415 38,838 Syed Javed Hassan

Pak Arab Fertilizer (Private) Limited 30,000 5,000 150,000 141,000 Fawad Ahmad Mukhtar

1,355,206

6) Particulars of Participation Term Certificates



Brother Steel Industries Limited 17 108,024 2,144,313 2,144 Mian Yousuf Aziz

Crystal Chemicals Limited 14 145,933 3,897,000 3,897 Maqsood A. Shaikh

Leatherite Limited 15 22,200 888,603 889 -

Mass Dairies Limited 11 136,818 2,523,000 2,523 Mian Mohammad Akhtar Paganawala

Morgah Valey Limited 16 29,250 436,414 436 Air Marshal A. Rahim Khan

Pangrio Sugar Mills Limited 44 64,000 11,198,023 6,955 Aftab Ahmed

Zamrock Fibers Glass Limited 12 32,833 2,358,000 2,358 -

19,202





Investment in ordinary shares1st Fidelity Leasing Modaraba 2 -Adamjee Insurance Company Limited 175,525 AAArif Habib Corporation Limited 45,051Atlas Fund Of Funds 3,664 -Bank Al-Falah Limited 41,287 AABOC Pakistan Limited 30,810 -D.G. Khan Cement Limited 100,689 -Engro Polymer & Chemicals Limited 56,379 -Fauji Cement Company Limited 575,600First Dawood Mutual Fund 982 2-StarHira Textile Mills Limited 7,800 -IGI Investment Bank Limited 29,260 AJahangir Siddiqui & Company Limited 21,800 AAKASB Securities Limited 10,469 AKohat Textile Mills Ltd 140 -Lotte Pakistan PTA Limited 34,110 -National Bank Of Pakistan 76,820 AAANishat Mills Limited 25,668 A+Nishat Power Limited 54,528 AA-Pak Oilfields Limited 88,788 -Pakistan Petroleum Limited 113,602 -Pakistan State Oil Company Limited 296,066 AA+Pakistan Telecommunication Company Limited 12,636 -PICIC Growth Fund 8 -Sakrand Sugar Mills Limited 4,331 -Saritow Spinning Mills Limited 818 -Shell Pakistan Limited 22,211 -Visa Inc. 77,078 -DP World 7,438 -

1,913,560Investments in preference sharesChenab Limited. 21,754 -Masood Textile Mills Limited 110,000 -JSC Alliance Bank - Unrated

131,754

Investments in units of mutual fundsAMZ Plus Stock Fund 7,040 2-StarAtlas Stock Market Fund 26,827 3-StarFaysal Balance Growth Funds 8,926 5-StarMeezan Islamic Income Fund 113,366 A(f)Aberdeen Money Market Funds 44,283 -

200,442




Investee Cost Credit Rating(Rupees in '000)

Investment in unlisted shares

Shareholding more than 10%Khushhali Bank Limited 200,000 A-World Bridge Connect Inc. 77,606 unratedCinepax Limited 50,372 unratedPakistan Agricultural Storage and Services Corporation Limited 5,500 unratedNational Investment Trust Limited 100 AM-DS

Shareholding upto 10%National Institutional Facilitation Technologies (Pvt.) Limited 1,527 unratedTechlogix International Limited 50,703 unratedSME Bank Limited 26,950 BBBFirst Women Bank Limited 21,100 BBB+Kay Textile Mills Limited 3,778 unratedSWIFT 2,905 unratedEquity Participation Fund 2,700 unratedNews - VIS Credit Information Services (Pvt.) Limited 325 unratedMasterCard Incorporated 0 unratedThe Benefit Company B.S.C © 1,817 unrated

445,382


Federal Government SecuritiesMarket Treasury Bills 60,159,266 Unrated - Govt SecuritiesPakistan Investment Bonds 17,586,966 Unrated - Govt Securities

77,746,232

Government of Pakistan Islamic BondsGovernment of Pakistan Ijarah Sukuk 4,122,000 B- (S&P)

4,122,000

Government of Pakistan - Euro BondIslamic Republic of Pakistan - 2017 - Euro Bond 3,947,801 B- (S&P)

3,947,801





Foreign securitiesAtlantic Finance Limited -2014 278,112 B1 (Moody's)Bank of Bahrain and Kuwait Bond - 2015 171,870 A3 (Moody's)DEWA Sukuk Al Ijarah FRN 6,749,924 Ba2 (Moody's)Dubai Government AED FRN-2014 552,743 Un-ratedDubai Government EMTN-2015 USD 521,476 N/ADubai Government USD FRN -2014 84,372 Un-ratedIPIC GMTN Limited -2020 68,568 Aa3 (Moody's)Qatar DIAR Finance QSC-2020 428,224 AAState of Qatar-2030 -USD Bonds 1,348,894 AATabreed 06 Financing Corporation FRN-2011 696,881 CCC+ (S&P)Tamweel Sukuk 2013 FRN 2,710,462 Baa3 (Moody's)

13,611,525


Term Finance Cerificates

ListedAllied Bank Limited TFC-II 259,892 AA-Azgard Nine Limited 224,694 CCC(RW)Bank Al Falah Limited TFC II 14,795 AA-Bank Al Falah Limited TFC III 128,396 AA-Bank Al Habib Limited TFC II 222,418 AABank Al Habib Limited TFC III 230,149 AAEngro Chemicals Pakistan Limited - TFC III 110,494 AAStandard Chartered Bank Pakistan Limited TFC II 4,993 AAASCB (PAK) Ltd- TFC (20-01-04) 2 AAAAllied Bank Ltd- TFC (06-12-06) 5 AA-

1,195,839

Un ListedPakistan International Airlines 8,495 UnratedEngro Chemical Pakistan Limited 702,241 AAFaysal Bank Limited 230,000 AA-

940,736




Cost Accumu- Book Sale Mode oflated value proceeds disposal Particulars of Buyersdeprec-iation(Rupees in '000)

Furniture and fixturesItems having book value of less

than Rs. 250,000 or cost ofless than Rs. 1,000,000 24,555 16,639 7,916 549 Auction Various

Electrical, office and computer equipmentItems having book value of less

than Rs. 250,000 or cost ofless than Rs. 1,000,000 33,732 31,234 2,498 1,759 Auction Various

VehiclesItems having book value of

more than Rs. 250,000or cost of more than Rs. 1,000,000

M/Lancer 1,399 1,399 - 550 Auction Ejaz AhmedH/Civic 1,042 1,042 - 766 Auction Wasim MirzaM/Lancer 1,439 1,439 - 288 Buy Back Atif Riaz BokhariT/Corolla 1,309 916 393 633 Buy Back Aqeel A. NasirS/Cultus 652 337 315 424 Buy Back Zeeshanul HaqS/Cultus 636 223 413 456 Buy Back Amjad PervaizS/Cultus 636 223 413 456 Buy Back Muhammad Munir TariqS/Cultus 636 223 413 456 Buy Back Mumtaz Ali AbroS/Cultus 636 233 403 552 Buy Back Shaukat AliS/Cultus 636 233 403 570 Buy Back Munnawar AliS/Cultus 636 223 413 552 Buy Back Javaid Afzal QaziH/Accord 6,300 210 6,090 5,573 Insurance

Claimed UBL InsurersT/Corolla 1,389 208 1,181 1,354 Insurance

Claimed UBL Insurers


[ Annexure 'C' as referred to in note 11.7 of Group'sConsolidated Financial Statements For the year ended December 31, 2010 ]




T/Corolla 849 849 - 678 Auction Ahmed Hussain QadriT/Corolla 849 849 - 650 Auction Shahzad MangiT/Corolla 849 849 - 813 Auction NaveedT/Corolla 849 849 - 780 Auction Sikander AliS/Cultus 620 548 72 532 Auction Sikander AliS/Cultus 620 527 93 528 Auction Sikander AliS/Cultus 560 392 168 480 Auction Nasir & Co.S/Cultus 560 523 37 516 Auction Tariq AjmeriS/Cultus 555 555 - 441 Auction Tariq AjmeriS/Cultus 555 555 - 427 Auction Sikander AliS/Cultus 555 555 - 423 Auction Wasim MirzaS/Cultus 555 555 - 424 Auction M. Imran AyubS/Cultus 555 555 - 435 Auction Sikander AliS/Cultus 555 555 - 416 Auction Imran ShaikhS/Alto 419 419 - 84 Auction Suhail Ahmed QaziS/Bolan 367 355 12 345 Auction Khalil Ur RehmanS/Cultus 620 393 227 362 Buy Back Naveed Khan AnjumS/Cultus 620 444 176 310 Buy Back Zahid HamidS/Cultus 615 430 185 318 Buy Back Mushtaq AliS/Cultus 560 355 205 391 Buy Back Zakaria Naseem MirS/Cultus 560 355 205 205 Buy Back Mahmood Saeed SiddiquiS/Cultus 560 364 196 317 Buy Back Hammad Umer ShafiqS/Cultus 555 500 55 241 Buy Back Toufique Ahmed ShaikhS/Cultus 555 509 46 222 Buy Back Sheikh Muhammad TayyabS/Alto 419 314 105 84 Buy Back Rasool Bux SoomroS/Cultus 550 550 - - Write-offS/Cultus 550 550 - - Write-offS/Alto 419 419 - - Write-offS/Alto 419 419 - - Write-offS/Alto 419 419 - - Write-offVarious 215 211 4 5 Auction Various

34,854 22,631 12,223 23,057





Ijarah AssetsItems having book value of


Commercial Ijarah - Atlas Honda Limited 3,325 210 3,115 3,139 Buy Back Atlas Honda LimitedH/Civic 1,564 462 1,102 917 Buy Back M.Kamran SabowalaT/Corolla 1,389 230 1,159 1,050 Buy Back Riaz HussainT\Altis 1,319 402 917 598 Buy Back Mahinder KumarT/Corolla 1,286 366 920 886 Buy Back Muhammad Shoaib KhanzadaT/Corolla 1,240 426 814 898 Buy Back Abdullah ShaikhT/Corolla 1,237 412 825 322 Buy Back Muhammad Aslam ParachaT/Corolla 1,225 471 754 278 Buy Back Khader KheilH/City 1,215 408 807 793 Buy Back Sarfaraz KhanT/Corolla 1,205 422 783 616 Buy Back Arshad HussainT/Corolla 1,205 299 906 987 Buy Back Maheen AfaqT/Corolla 1,204 301 903 774 Buy Back Ghulam HussainT/Corolla 980 391 589 426 Buy Back Dahar JunejoT/Corolla 980 564 416 256 Buy Back Mohammad Ayoob JamaliS/Liana 955 456 499 551 Buy Back Muhammad Junaid GhaffarT/Corolla 950 487 463 660 Buy Back Muhammad IrfanS/Cultus 940 308 632 442 Buy Back Talat MehmoodT/Corolla 940 486 454 620 Buy Back Mohammad Hamid Ali KhanT/Corolla 940 528 412 255 Buy Back Sharmeen ZindaniT/Corolla 925 435 490 559 Buy Back Yaar GulT/Corolla 915 511 404 492 Buy Back Muhammad KousarS/Liana 907 434 473 534 Buy Back Manohar Lal WadhwaniH/City 907 484 423 461 Buy Back Tarana ZafarT/Belta 900 460 440 241 Buy Back Muhammad NaeemT/Corolla 890 319 571 502 Buy Back Waheed Ahmed ShaikhT/Corolla 890 526 364 476 Buy Back Mohammad Asmat ParachaH/City 879 343 536 559 Buy Back Aasima KhanS/Liana 856 540 316 355 Buy Back Mohammad RehanH/City 852 235 617 674 Buy Back Syed Muhammad

Hasan QutbH/City 846 451 395 493 Buy Back Mohammad Asim SaleemS/Liana 825 406 419 490 Buy Back Farooq Ahmed SiddiquiT/Vitz 811 560 251 151 Buy Back Saqib Khan





K/Sportage 800 494 306 403 Buy Back Noor Ahmed ShahtajS/Cultus 742 448 294 435 Buy Back Ahson Iqbal RazaS/Cultus 704 286 418 424 Buy Back Muhmmad AshrafS/Cultus 694 211 483 177 Buy Back Zubair AkramS/Cultus 694 257 437 442 Buy Back Suman KhurramS/Cultus 694 292 402 379 Buy Back Muhammad HaroonS/Cultus 682 252 430 345 Buy Back Syed Javed AkhtarS/Cultus 647 163 484 536 Buy Back Tanzeel Ul RehmanS/Bolan 644 209 435 380 Buy Back Syed Fahim HasanS/Cultus 632 208 424 385 Buy Back Asif Ali AbbasiS/Cultus 632 225 407 353 Buy Back Babar Gulzar ButtS/Cultus 632 241 391 380 Buy Back Khalid Mahmood MirzaS/Cultus 632 274 358 297 Buy Back Imran IjazS/Cultus 632 288 344 417 Buy Back Syed Asim UddinS/Cultus 632 329 303 358 Buy Back Mohammad BukshS/Cultus 631 302 329 262 Buy Back SamiullahT/Vitz 600 209 391 447 Buy Back Fawad IqbalS/Cultus 600 311 289 365 Buy Back Maria NoureenS/Alto 590 181 409 491 Buy Back Sandra GraceS/Alto 590 188 402 157 Buy Back Muhammad RaeesS/Alto 590 191 399 346 Buy Back Javed AkhtarS/Alto 585 158 427 310 Buy Back AsifS/Liana 560 142 418 377 Buy Back Sami UllahC/Joy 555 251 304 359 Buy Back Mailik Anas RabbaniS/Alto 529 106 423 200 Buy Back Sameen UmairS/Alto 521 162 359 147 Buy Back Mahmood Ul HaqS/Alto 521 219 302 361 Buy Back Atif SyedD/Cuore 519 181 338 321 Buy Back Muhammad Musawwir KhanS/Alto 513 214 299 296 Buy Back Waquar AhmedS/Alto 508 151 357 187 Buy Back Shuja HaiderS/Alto 508 201 307 326 Buy Back Tariq QaziS/Alto 508 258 250 262 Buy Back Mohammad Ali SiddiquiS/Alto 504 88 416 295 Buy Back Muhammad Fasihuddin KhanS/Cultus 500 179 321 286 Buy Back Shazia Marium SiyalS/Ravi 497 99 398 282 Buy Back Mohisin JhangirD/Cuore 497 145 352 238 Buy Back Amna AkmalD/Cuore 497 163 334 223 Buy Back Atif Hameed BajwaS/Mehran 495 245 250 372 Buy Back Muhammad AliD/Cuore 492 217 275 176 Buy Back Iftikhar Muhiuddin





S/Bolan 458 114 344 156 Buy Back Rehan Ahmed GhaffarD/Cuore 455 50 405 140 Buy Back Tanveer Imran NiazS/Every 450 160 290 155 Buy Back Abdul KhaliqS/Ravi 447 140 307 278 Buy Back Afzaal KhalilS/Mehran 431 171 260 308 Buy Back Zafar IqbalS/Mehran 431 171 260 308 Buy Back Zafar IqbalS/Mehran 426 101 325 332 Buy Back Hummad AliS/Bolan 418 159 259 261 Buy Back IrfanS/Ravi 372 118 254 179 Buy Back Shahid ArabS/Mehran 366 70 296 242 Buy Back Zeeshan SuchwaniS/Ravi 357 84 273 338 Buy Back Mohammad Rashid

Imran KayaniT/Surf 2,450 918 1,532 1,138 Buy Back Amir Hader ButtT/Corolla 1,336 463 873 713 Buy Back Syed Arshad Abbas ZaidiT/Corolla 1,260 515 745 454 Buy Back M.SaleemT/Corolla 1,260 516 744 479 Buy Back Sikander ImranT/Corolla 1,205 505 700 702 Buy Back Syed Muhammad TanzeemT/Corolla 1,205 556 649 787 Buy Back Pervaiz SaeedT/Corolla 915 472 443 524 Buy Back Muhammad AfrozeT/Corolla 915 481 434 332 Buy Back Rashida KhanumT/Corolla 915 489 426 504 Buy Back Ghulam Sarwar QureshiS/Liana 906 543 363 449 Buy Back Muhammad AleemH/City 888 488 400 272 Buy Back Muhammad Ibrar HussainH/City 879 478 401 168 Buy Back Saba ZehraH/City 854 456 398 470 Buy Back Sajid ShabirH/City 852 456 396 469 Buy Back Fazal ElahiiS/Cultus 752 288 464 171 Buy Back Mian Riffat BaqarS/Cultus 687 345 342 111 Buy Back Ayaz Mustafa ChaudhryS/Alto 685 370 315 336 Buy Back Adeel AnwerShehzore 675 408 267 329 Buy Back M. KhalidS/Alto 601 247 354 344 Buy Back Muhammad Umair MazharS/Alto 521 214 307 363 Buy Back Mustaq AhmedD/Cuore 519 227 292 361 Buy Back Mallick Muhammad

Afroz Alam DawoodiS/Alto 508 254 254 301 Buy Back Asif-Ur-RehmanS/Liana 888 420 468 472 Auction Muhammad RashidS/Cultus 712 320 392 405 Auction Raza Ullah KhaldiS/Cultus 632 201 431 343 Auction Sikander Ali





S/Alto 590 241 349 349 Auction Munaweer HussainS/Alto 542 158 384 460 Auction Muhammad Atif BhattiS/Bolan 520 125 395 457 Auction Muhammad RashidT/Corolla 950 261 689 694 Insurance Pak Qattar

Claimed TakafulT/Corolla 829 415 414 345 Insurance Pak Qattar

Claimed TakafulD/Cuore 587 95 492 360 Insurance Pak Kwait

Claimed TakafulD/Cuore 502 247 255 351 Insurance Pak Qattar

Claimed TakafulD/Cuore 497 214 283 375 Insurance Pak Qattar

Claimed TakafulS/Mehran 409 115 294 115 Insurance Pak Kwait

Claimed Takaful


T/Corolla 879 769 110 191 Buy Back Masood TextileT/Vitz 750 549 201 507 Buy Back Abid Hussain

S/Cultus 730 524 206 113 Buy Back Syed Asim Zafar ZaidiS/Cultus 704 504 200 492 Buy Back Imtiaz AhmedT/Corolla 704 515 189 372 Buy Back Imran Ul HafeezT/Corolla 704 515 189 472 Buy Back Imran Ul HafeezShehzore 699 477 222 307 Buy Back Syed Farooq Ali ShahS/Cultus 694 449 245 308 Buy Back Muhammad Saeed JamsaS/Cultus 682 469 213 315 Buy Back Mohammad Aslam SabriS/Liana 660 476 184 295 Buy Back Muhammad FaisalS/Cultus 632 476 156 184 Buy Back Muhammad Zeeshan AliS/Cultus 600 399 201 252 Buy Back Mohammad YousufS/Cultus 600 474 126 224 Buy Back Ramesh BabuS/Cultus 595 521 74 130 Buy Back Masood TextileS/Alto 590 403 187 415 Buy Back Muhammad Rizwan

Afzal KhanS/Alto 529 283 246 291 Buy Back Mohammad Islam





S/Alto 529 330 199 113 Buy Back Muhammad AhsanS/Alto 529 449 80 147 Buy Back Akbar HussainS/Alto 524 292 232 395 Buy Back Mohammad SaeedD/Cuore 520 421 99 210 Buy Back JavedS/Alto 519 285 234 225 Buy Back Sofia ParachaS/Alto 519 404 115 214 Buy Back Mohammad ShahidS/Alto 519 415 104 125 Buy Back Mehboob Alam MazariS/Alto 521 468 53 163 Buy Back Mirza Ahmed AliD/Cuore 507 387 120 232 Buy Back Syed Matloob Hussain RizviD/Cuore 495 271 224 106 Buy Back Asif NisarS/Mehran 497 370 127 170 Buy Back Abbas AliD/Cuore 492 416 76 111 Buy Back Muhammad Umair AbbasiD/Cuore 464 406 58 101 Buy Back Masood TextileS/Bolan 458 259 199 142 Buy Back Yahya KhanS/Ravi 447 223 224 247 Buy Back Niaz Iqbal SiddiqS/Bolan 444 227 217 147 Buy Back Jamil Ahmed ShaikhS/Bolan 444 327 117 138 Buy Back Salamat Ali AnjumS/Mehran 435 190 245 268 Buy Back Syed Ammad Uddin GramiS/Mehran 435 320 115 135 Buy Back Syed Latif MirzaD/Cuore 430 365 65 141 Buy Back Saima MalikS/Bolan 428 182 246 293 Buy Back Muhammad SaleemS/Bolan 428 363 65 276 Buy Back Iftikhar Ali KhanS/Bolan 418 188 230 225 Buy Back Ali Ahmed KhanS/Bolan 418 264 154 270 Buy Back Muhammad ImranS/Bolan 407 260 147 111 Buy Back Mudasir HussainS/Mehran 408 319 89 216 Buy Back Mohammad Noor-E-Arshi KhanS/Bolan 402 289 113 135 Buy Back Mirza Shadab BaigS/Mehran 395 203 192 170 Buy Back Syeda Safoora HamidD/Cuore 390 335 55 162 Buy Back Abdul WaheedS/Bolan 382 315 67 278 Buy Back Muhammad Akram NoorS/Mehran 362 140 222 305 Buy Back Muhammad Fakhar Uz Zaman KhanD/Cuore 360 144 216 351 Buy Back Denial ChristopherT/Premio 358 239 119 148 Buy Back Mohammad Arif KhanS/Mehran 353 142 211 243 Buy Back Muhmmad ShafiS/Mehran 352 110 242 235 Buy Back Muhammad Haider Hussain HashmiS/Mehran 350 289 61 136 Buy Back Danish Kazmi





T/Corolla 750 510 240 223 Buy Back Talha AnwarS/Cultus 632 500 132 226 Buy Back Qasim MansoorS/Alto 632 431 201 246 Buy Back Shahzad Ahmed KhanS/Cultus 632 496 136 295 Buy Back Muhammad Suleman AnsariS/Cultus 617 456 161 190 Buy Back Muhammad Ayaz Imam RizviS/Bolan 526 383 143 249 Buy Back Muhammad Zubair KhanT/Corolla 522 468 54 288 Buy Back Yasir YousafT/Corolla 522 468 54 277 Buy Back Yasir YousafS/Alto 508 278 230 272 Buy Back Wasim RazaS/Alto 508 466 42 150 Buy Back Mumtaz AhmedS/Alto 504 422 82 373 Buy Back Saima AnjumS/Alto 504 422 82 273 Buy Back Saima AnjumD/Cuore 487 238 249 233 Buy Back AminaS/Bolan 483 272 211 131 Buy Back Liaquat Ali AbbasiD/Cuore 456 343 113 135 Buy Back Hammad HaiderS/Ravi 447 222 225 248 Buy Back Nadeem-Ul-Haq NajmiS/Ravi 447 222 225 248 Buy Back Nadeem-Ul-Haq NajmiS/Ravi 447 290 157 282 Buy Back Naeem-Ur-Rehman ShaikhS/Ravi 447 290 157 262 Buy Back Naeem-Ur-Rehman ShaikhS/Alto 425 316 109 138 Buy Back Asif AliS/Bolan 414 233 181 213 Buy Back Syed Arshad IqbalS/Bolan 408 371 37 170 Buy Back Shabbir Ahmed MemonS/Ravi 402 305 97 160 Buy Back Riyasat Hussain TahirS/Mehran 398 321 77 257 Buy Back Shahab SharifS/Ravi 397 349 48 131 Buy Back Jalil-Ur-Rehman ShaikhS/Ravi 397 349 48 231 Buy Back Jalil-Ur-Rehman ShaikhS/Bolan 370 219 151 186 Buy Back Syed Ghazanfar AhmedD/Cuore 497 275 222 326 Auction Muhammad FurrakhD/Cuore 519 404 115 255 Insurance Pak Qattar

Claimed TakafulS/Bolan 515 416 99 213 Insurance Pak Kwait

Claimed Takaful133,066 65,055 68,011 69,285





Buildings on leasehold landItems having book value of


Old lifts of Jinnah Ave. Building 5,431 5,431 - 2,200 Auction Rehmat Ullah

Leasehold ImprovementItems having book value of



Finance leaseS/Cultus 560 26 534 534 Buy Back Mohammad Gohar

IntangiblesItems having book value of

less than Rs. 250,000or cost of less thanRs. 1,000,000


Total 245,877 149,143 96,734 97,384



Guidelines for mapping of Business Lines

Segment Reporting

A segment is a distinguishable component of the Group that is engaged either in providing particular products or services (businesssegment), or in providing products or services within a particular economic environment (geographical segment), which is subject torisks and rewards that are different from those of other segments.

Business segments





(c) Retail Banking



Commercial banking includes project finance, real estate, export finance, trade finance, factoring, leasing, lending, guarantees,bills of exchange and deposits.

(e) Asset management

It includes discretionary and non discretionary fund management activities in the form of pooled, segregated, retail, institutional,private equity, open, close ended funds etc

(f) Others

It includes results of support functions of the Group and subsidiary which cannot be classified in any of the above segments.


[ Annexure 'D' of Group's ConsolidatedFinancial Statements For the year ended December 31, 2010 ]

2010 2009(US Dollars in ‘000)

ASSETS

Cash and balances with treasury banks 790,166 718,876

Balances with other banks 303,385 164,065

Lendings to financial institutions 144,620 270,470

Investments 2,705,817 1,608,359

Advances

Performing 3,811,934 4,083,707

Non-performing - net of provision 175,964 144,382

3,987,898 4,228,089

Operating fixed assets 288,248 277,148

Deferred tax asset - net 15,160 7,588

Other assets 235,253 203,763

8,470,546 7,478,358

LIABILITIES

Bills payable 59,258 60,329

Borrowings 556,208 434,023

Deposits and other accounts 6,628,131 5,883,362

Sub-ordinated loans 139,960 140,008

Liabilities against assets subject to finance lease - 7

Other liabilities 209,629 174,538

7,593,187 6,692,266

NET ASSETS 877,360 786,092

REPRESENTED BY:

Share capital 142,950 129,955

Reserves 281,443 247,183

Unappropriated profit 322,015 275,792

Total equity attributable to the equity holders of the Bank 746,409 652,930

Non-controlling interest 25,774 26,620

772,183 679,550

Surplus on revaluation of assets - net of deferred tax 105,177 106,542

877,360 786,092

CONTINGENCIES AND COMMITMENTS

These has been converted at Rs.85.6367 per US Dollar from the audited financial statements.


[ Consolidated Statement of Financial Position As at December 31, 2010 ]

2010 2009(US Dollars in ‘000)

Mark-up / return / interest earned 701,807 721,016Mark-up / return / interest expensed 296,997 330,738Net mark-up / interest income 404,810 390,279

Provision against loans and advances - net 79,853 112,626Provision against lending to financial institutions - 6,549Provision for diminution in value of investments - net 3,550 13,866Bad debts written off directly 11,769 17,352

95,172 150,394Net mark-up / return / interest income after provisions 309,637 239,885

Non Mark-up / Interest IncomeFee, commission and brokerage income 81,994 78,662Dividend income 1,564 2,507Income from dealing in foreign currencies 20,256 14,899Gain on sale of securities - net 2,197 8,166Unrealized loss on revaluation of investments classified as - -

held for trading (388) (30)Other income 18,330 36,746Total non mark-up / return / interest income 123,953 140,950

433,590 380,835

Non Mark-up / Interest ExpensesAdministrative expenses 221,829 207,894Other provisions / write offs - net 795 7,500Workers' Welfare Fund 4,844 4,683Other charges 2,807 754Total non mark-up / interest expenses 230,275 220,831Share of income of associates 3,239 8,057Profit before taxation 206,554 168,061Taxation - Current 79,999 81,697

- Prior years 4,850 919- Deferred (6,989) (25,348)

77,860 57,268Profit after taxation 128,694 110,793

Attributable to:Equity shareholders of the Bank 128,819 111,185Non-controlling interest (125) (392)

128,694 110,793

(US Dollars)


These has been converted at Rs.85.6367 per US Dollar from the audited financial statements.


[ Consolidated Profit and Loss Account For the year ended December 31, 2010 ]


[ Category of Shareholders As at 31-12-2010 ]

Particulrs No of Folio Balance Share Percentage

DIRECTORS, CEO & CHILDREN 6 158,805,075 12.9724

NIT & ICP 2 1,307,327 0.1068

BANKS, DFI & NBFI 18 15,267,751 1.2472

INSURANCE COMPANIES 15 7,355,969 0.6009

MODARABAS & MUTUAL FUNDS 39 17,482,437 1.4281

GENERAL PUBLIC (LOCAL) 25,729 31,548,034 2.5771

GENERAL PUBLIC (FOREIGN) 1,139 159,687,780 13.0445

OTHERS 42 48,113,863 3.9303

GOVERNMENT OF PAKISTAN 1 3,354,550 0.2740

FOREIGN COMPANIES 54 444,187,226 36.2845

GOVT. OWNED ENTITIES / BANKS 4 238,569,096 19.4881

JOINT STOCK COMPANIES 147 98,000,849 8.0054

PUBLIC SECTOR COMPANIES 2 143,628 0.0117

CHARITABLE TRUSTS 7 356,102 0.0291

Company Total 27,205 122,417,9687 100.0000


[ Pattern of Shareholding As at 31-12-2010 ]

NO. OF <---- HAVING SHARES ---->SHAREHOLDERS From To SHARES HELD PERCENTAGE

4012 1 100 2,62,794 0.021517895 101 500 7,814,061 0.63831805 501 1,000 1,422,003 0.11622472 1,001 5,000 5,363,127 0.4381435 5,001 10,000 3,094,938 0.2528145 10,001 15,000 1,791,453 0.146365 15,001 20,000 1,142,070 0.093355 20,001 25,000 1,262,879 0.103233 25,001 30,000 931,366 0.076122 30,001 35,000 714,508 0.058429 35,001 40,000 1,105,650 0.090317 40,001 45,000 723,520 0.059125 45,001 50,000 1,224,769 0.100015 50,001 55,000 807,241 0.06594 55,001 60,000 230,670 0.01888 60,001 65,000 492,945 0.04034 65,001 70,000 274,910 0.02254 70,001 75,000 288,654 0.02367 75,001 80,000 542,354 0.04434 80,001 85,000 332,990 0.02723 85,001 90,000 260,110 0.02127 90,001 95,000 656,602 0.05366 95,001 100,000 593,285 0.04851 100,001 105,000 105,000 0.00861 105,001 110,000 106,630 0.00872 110,001 115,000 227,621 0.01866 115,001 120,000 705,962 0.05779 120,001 125,000 1,095,171 0.08951 125,001 130,000 127,615 0.01041 130,001 135,000 135,000 0.01102 135,001 140,000 276,125 0.02262 140,001 145,000 284,391 0.02323 145,001 150,000 446,000 0.03644 150,001 155,000 604,277 0.04941 155,001 160,000 155,612 0.01273 165,001 170,000 502,504 0.04101 175,001 180,000 179,000 0.01461 180,001 185,000 181,034 0.01481 185,001 190,000 187,500 0.01531 190,001 195,000 192,000 0.01571 195,001 200,000 200,000 0.01631 210,001 215,000 211,750 0.01732 220,001 225,000 442,965 0.03621 225,001 230,000 229,291 0.01872 230,001 235,000 467,636 0.03821 235,001 240,000 239,450 0.01961 240,001 245,000 242,000 0.01981 245,001 250,000 250,000 0.02041 250,001 255,000 253,000 0.02071 255,001 260,000 256,700 0.02101 260,001 265,000 262,950 0.02151 265,001 270,000 268,021 0.02191 270,001 275,000 275,000 0.02251 290,001 295,000 294,745 0.02411 295,001 300,000 299,475 0.02451 305,001 310,000 309,000 0.02521 320,001 325,000 324,653 0.02651 340,001 345,000 342,028 0.02791 360,001 365,000 363,000 0.02971 370,001 375,000 372,098 0.03042 395,001 400,000 800,000 0.06541 410,001 415,000 411,860 0.03362 415,001 420,000 834,377 0.06821 420,001 425,000 423,918 0.0346


[ Pattern of Shareholding As at 31-12-2010 ]

NO. OF <---- HAVING SHARES ---->SHAREHOLDERS From To SHARES HELD PERCENTAGE

1 430,001 435,000 431,786 0.03531 455,001 460,000 460,000 0.03761 460,001 465,000 461,450 0.03771 495,001 500,000 500,000 0.04081 515,001 520,000 516,118 0.04221 555,001 560,000 559,743 0.04571 605,001 610,000 610,000 0.04981 640,001 645,000 644,011 0.05261 650,001 655,000 654,200 0.05341 655,001 660,000 655,387 0.05351 670,001 675,000 672,150 0.05491 675,001 680,000 676,764 0.05531 705,001 710,000 707,850 0.05781 725,001 730,000 729,346 0.05961 730,001 735,000 732,000 0.05981 755,001 760,000 757,991 0.06191 775,001 780,000 775,745 0.06341 905,001 910,000 909,945 0.07431 930,001 935,000 931,519 0.07611 935,001 940,000 936,879 0.07651 955,001 960,000 960,000 0.07841 1,160,001 1,165,000 1,161,763 0.09491 1,175,001 1,180,000 1,175,347 0.09601 1,185,001 1,190,000 1,187,730 0.09701 1,190,001 1,195,000 1,193,894 0.09753 1,300,001 1,305,000 3,908,530 0.31931 1455001 1,460,000 1,458,000 0.11911 1,470,001 1,475,000 1,473,506 0.12042 1,495,001 1,500,000 2,997,234 0.24481 1,500,001 1,505,000 1,504,000 0.12291 1,710,001 1,715,000 1,714,970 0.14011 1,855,001 1,860,000 1,858,444 0.15181 1,965,001 1,970,000 1,969,739 0.16091 2,055,001 2,060,000 2,059,401 0.16821 2,245,001 2,250,000 2,249,746 0.18381 2,775,001 2,780,000 2,777,937 0.22691 3,340,001 3,345,000 3,340,119 0.27281 3,350,001 3,355,000 3,354,550 0.27401 3,715,001 3,720,000 3,717,191 0.30361 3,830,001 3,835,000 3,830,544 0.31291 4,595,001 4,600,000 4,597,634 0.37561 4,765,001 4,770,000 4,767,426 0.38941 4,810,001 4,815,000 4,810,566 0.39301 6,565,001 6,570,000 6,568,964 0.53661 6,965,001 6,970,000 6,967,440 0.56921 10,180,001 10,185,000 10,184,572 0.83201 14,995,001 15,000,000 14,998,307 1.22521 18,365,001 18,370,000 18,366,935 1.50031 20,930,001 20,935,000 20,934,809 1.71011 20,995,001 21,000,000 20,997,631 1.71521 22,495,001 22,500,000 22,497,462 1.83781 38,700,001 38,705,000 38,704,926 3.16171 44,990,001 44,995,000 44,994,928 3.67551 59,990,001 59,995,000 59,993,236 4.90071 61,205,001 61,210,000 61,208,980 5.00001 62,430,001 62,435,000 62,433,163 5.10001 67,490,001 67,495,000 67,492,392 5.51331 78,500,001 78,505,000 78,501,099 6.41251 78,940,001 78,945,000 78,942,102 6.44861 93,645,001 93,650,000 93,649,744 7.65001 17,735,5001 177,360,000 1,7735,8401 14.48791 22,277,5001 222,780,000 222,775,183 18.1979

27,205 Company Total 1,224,179,687 100.0000


[ Notice of 52nd Annual General Meeting ]

Notice is hereby given that the 52nd Annual General Meeting (“AGM”) ofthe Shareholders of United Bank Limited (the “Bank”) will be held onTuesday 29 March 2011 at 09:30 a.m. at Islamabad Serena Hotel,Islamabad to transact the following business:

Ordinary Business:

1. To confirm the minutes of the Extraordinary General Meeting held on25 November 2010.

2. To receive, consider and adopt the Annual Audited Accounts(consolidated and unconsolidated), Statement of Compliance withthe Code of Corporate Governance of the Bank for the year ended31 December 2010 together with the Directors’ Report and Auditors’Report thereon.

3. To consider and approve as recommended by the Board of Directors,final cash Dividend at the rate of Rs.4.00 per share i.e. 40%, inaddition to 10% interim dividend already declared/paid for the yearended 31 December 2010.

4. To appoint two external auditors to hold office from this AGM till theconclusion of the next AGM of the Bank and to fix their remuneration.The retiring Auditors M/s. Ernst & Young Ford Rhodes Sidat Hyder,Chartered Accountants, and M/s. BDO Ebrahim & Company,Chartered Accountants, being eligible, have offered themselves forreappointment.

5. To elect six Directors as fixed by the Board of Directors of the Bankunder Section 178(1) of the Companies Ordinance, 1984 inaccordance with the provisions of the said Ordinance for a period ofthree years to commence from 29 March 2011. The total strength ofthe Board of Directors of the Bank shall be nine including the twodirectors nominated by the Government of Pakistan under Section183 of the Companies Ordinance, 1984 and the President & CEO ofthe Bank, being deemed director under section 200(2) of theCompanies Ordinance 1984.

The retiring Directors H.H. Shaikh Nahayan Mabarak Al Nahayan, SirMohammed Anwar Pervez, OBE, HPk, Mr. Omar Z. Al Askari, Mr.Zameer Mohammed Choudrey, Mr. Amin Uddin and Mr. ArshadAhmad Mir, are eligible for re-election.

Special Business:

6. To consider and approve disposal of fractional shares created out ofthe issuance of bonus shares by the Bank for the year 2009 bypassing the following resolution with or without amendment:

“RESOLVED:

(i) That the fractional shares created out of the issuance of bonusshares by the Bank in the year 2009 be consolidated into 18,051shares and sold on the Karachi Stock Exchange and saleproceeds from such disposal be donated to SOS Village, acharitable trust engaged in the welfare of destitute children.

(ii) That the President and/or the Company Secretary of the Bank beand are hereby authorized to take such steps as may benecessary in connection with sale of fractional shares.”

7. To consider and approve the amount of remuneration paid to the non-executive Directors of the Bank for attending the Board and/orCommittees meetings held during the year and in that connection topass the following resolutions, as special resolutions, with or withoutmodification, addition or deletion:

“RESOLVED: that the remuneration paid to the non-executivedirectors of UBL including the Chairman and the Deputy Chairmanduring the year 2010 for attending the Board meetings and/orCommittees meetings, as disclosed in note 38 of the AuditedFinancial Statements of the Bank for the year ended 31 December

2010 be and is hereby confirmed and approved on post facto basis.”

8. To approve investment of Rs. 467,974,930/- by subscribing46,797,493 rights shares at face value of Rs. 10/- per share of UnitedExecutors and Trustees Company Limited (UET), a wholly ownedsubsidiary of UBL.

That the following Resolutions be passed as a special resolution asrequired by Section 208 of the Companies Ordinance, 1984, with orwithout modification:

“RESOLVED :

(i) That the investment of Rs. 467,974,930/- by subscribing46,797,493 rights shares of United Executors and TrusteesCompany Limited (UET) a wholly owned subsidiary of the Bank atthe face value of Rs.10/- per share upon completion of all theregulatory requirements including approvals of SBP be and ishereby approved.

(ii) That the President and/or the Company Secretary of the Bank beand are hereby authorized to take such steps as may benecessary in connection with subscription of 46,797,493 rightsshares offered by UET.”

9. To consider and approve investment of up to Rs.800 million in theform of seed capital in open and/or closed end mutual funds and/orinvestment plans and the units of any scheme(s) to be launchedand/or managed by UBL Fund Managers Ltd., a wholly ownedsubsidiary of the Bank and in this connection to pass the followingresolution as a special resolution as required by Section 208 of theCompanies Ordinance, 1984, with or without modification:

“RESOLVED that the Bank be and is hereby authorized to invest upto Rs. 800 million in the form of seed capital in open and/or closedend mutual funds and/or investment plans and the units of anyscheme(s) to be launched and/or managed by UBL Fund ManagersLtd., a wholly owned subsidiary of the Bank from the date of the AGMtill conclusion of the next AGM of the Bank.”

10. To approve investment of up to US$ 8 million in the proposedsubsidiary of the Bank to be incorporated in Tanzania subject to theapprovals from State Bank of Pakistan and other relevant authorities.

That the following resolution be passed as a special resolution asrequired by Section 208 of the Companies Ordinance, 1984, with orwithout modification:

“RESOLVED that the equity injection of up to US$ 8 Million in theproposed subsidiary of the Bank to be incorporated in Tanzania beand is hereby approved subject to all applicable regulatory approvalsincluding approval of State Bank of Pakistan and compliance of allrelevant formalities.”

11. To transact any other business with the permission of the Chairman.

By order of the Board

Aqeel Ahmed NasirCompany Secretary &Chief Legal Counsel

Karachi, 7 March 2011


[ Notice of 52nd Annual General Meeting ]

Notes:

1. The Share Transfer Books of the Bank shall remain closed from 16March 2011 to 29 March 2011 (both days inclusive). Transfersreceived at M/s. THK Associates (Pvt.) Limited, Ground Floor, StateLife Building No.3, Dr. Ziauddin Ahmed Road, Karachi, the Registrarand Share Transfer Agent of the Bank, by the close of the businesson 15 March 2011 will be treated in time for the purposes of theentitlement of cash dividend and bonus shares.

2. A member entitled to attend and vote at the above Annual GeneralMeeting is entitled to appoint another member as a proxy to attendand vote on his/her behalf, save that a corporation being a membermay appoint as its proxy an officer of such corporation whether amember of the company or not. The instrument appointing a proxyand the power of attorney or other authority (if any) under which it issigned or a notarized certified copy of the power or authority shall bedeposited at the offices of M/s. THK Associates (Pvt.) Limited,Ground Floor, State Life Building No.3, Dr. Ziauddin Ahmed Road,Karachi, the Registrar and Share Transfer Agent of the Bank not laterthan 48 hours before the time of holding the meeting, and must beduly stamped, signed and witnessed.

3. The CDC Account Holders and Sub-Account Holders, whoseregistration details are available in the Share Book Details Report shallbe required to produce their respective original ComputerizedNational Identity Card (CNIC) or original Passport at the time toattending the Annual General Meeting to facilitate identification. SuchAccount Holders and Sub-Account Holders should also bring / knowtheir respective participation I.D. No. and the CDC Account No. incase of proxy, he/she must enclose an attested copy of his/her CNICor Passport. Representative(s) of corporate member(s) should bringusual documents required for such purpose.

4. Members are requested to timely notify any change in their addressesto Bank’s Registrar / Share Transfer Agent M/s. THK Associates (Pvt)Limited, Ground Floor, State Life Building No. 3, Dr. Ziauddin AhmedRoad, Karachi.

5. The election provisions will not apply to the two Government nomineeDirectors who have been nominated on the Board of Directors of UBLby the Government of Pakistan under Section 183 of the CompaniesOrdinance 1984.

6. Any person who seeks to contest the election to the office of aDirector, whether he is retiring director or otherwise, shall file thefollowing with the Company Secretary of the Bank at 2nd Floor, StateLife Building No.1, I.I.Chundrigar Road, Karachi, not later thanfourteen days before the date of the meeting:

(i) His intention to offer himself for the election of directors in termsof Section 178(3) of the Companies Ordinance 1984 togetherwith: (a) consent in Form 28 of the Companies Ordinance 1984,(b) a Declaration with consent to act as Director under clause (ii)of the Code of Corporate Governance of the Securities andExchange Commission of Pakistan to the effect that he is awareof the duties and powers of directors under the CompaniesOrdinance 1984, and the listing regulations of the Karachi Stock

Exchange, Lahore Stock Exchange and Islamabad StockExchange and the Memorandum and Articles of Association ofthe Bank, (c) a Declaration in terms of clauses (iii), (iv) and (v) of theCode of Corporate Governance of the Securities and ExchangeCommission of Pakistan, and (d) a Declaration that he is notineligible to become a director of UBL under any circulars /directives of the State Bank of Pakistan.

(ii) A questionnaire duly completed, recent photograph, copy ofCNIC / Passport and an Affidavit to, inter-alia, meet therequirement of State Bank of Pakistan’s Prudential RegulationsG-I and the Fit and Proper Test for Appointment of Directors ascontained in Annexures VI-A, VI-B and VII-A.

7. In terms of the criteria prescribed by the State Bank of Pakistan,association of the following person as director is undesirable andagainst public interest:

a) A person who is / has been associated with any illegal activity,especially relating to banking business.

b) A person who is in his individual capacity or a proprietary concernof any partnership firm or any private limited company or anyunlisted public company or any listed public company (of whichhe has been a proprietor, partner, director or shareholder), hasbeen in default of payment of dues owed to any financialinstitution and / or in default of payment of any taxes.


Item No.6: Disposal of Fractional Shares

On announcement of 10% bonus shares by the Bank to itsshareholders out of the profit for the year 2009, fractional shareswere created. On account of high cost of computer printing, postprinting, distribution / postage and handling charges on thefractional shares, the Board of Directors of the Bank in its 170thmeeting held on February 21, 2011 recommended that fractionalshares be consolidated into 18,051 shares and sold in the marketand the net sale proceeds of the such shares be donated to SOSVillage, a charitable trust engaged in the welfare of destitutechildren.

Item No.7 : Remuneration of the Non-ExecutiveDirectors of the Bank

As required under SBP Prudential Regulation G-1, total amount ofremuneration paid/payable to the non-executive directorsincluding the Chairman and the Deputy Chairman for attending

the Board meetings and/or Committee meetings during the year2010 as disclosed in Note 38 of the Audited Financial Statementis submitted to the shareholders for approval on post facto basis.

Item No.8 : Investments in United Executors and TrusteesCompany Limited (UET) in the form of right shares.

The Chief Executive of UET informed that in order to strengthenthe balance sheet of the Company to support its businessactivities and meet financing needs for current and futureinvestment activities, the Board of Directors and shareholders ofUET are proposing to increase its authorized share capital fromRs. 40,000,000/- to Rs. 500,000,000/- and paid up share capitalfrom Rs. 32,025,070 to Rs. 500,000,000/- by issuing 46,797,493right issue at face value of Rs. 10/- per share to UBL. Approval forinvestment has already been taken from the Board of Directors ofUBL. To subscribe the right shares of UET, certain regulatoryrequirements have to be fulfilled by UBL including approvals ofSBP and shareholders of UBL.

[ Statement of Material Facts Under Section 160(1)(B) of the Companies Ordinance, 1984 ]

United Executors and Trustees Company Limited

To subscribe right sharesRs. 467,974,930/-

Non-Listed Company

2007 Rs.18.79 per share2008 Rs.18.69 per share2009 Rs.18.73 per share

Rs.10.00 per share

2007 Rs. 0.30 per share2008 Rs. (0.09) per share2009 Rs. 0.03 per share

Own sources

N/A

To support its business activities and to meet financing needsfor current and future investment activities

To improve the profitability and capitalization of the company

The CEO being deemed Director of UBL is the chairman ofthe Board of Directors of UET and is to that extent interested

i. Name of Company

ii. Nature of investment amountand extent of investment

iii. Average Market Price of the Share

iv. Break-up value of shares intended to bepurchased on the basis of last publishedfinancial statement

v. Price at which shares will be purchased

vi. Earnings / (Loss) per share of investee company inlast three years

vii. Source of Funds from where shares will bepurchased

viii. Period for which investment will be made

ix. Purpose of investment

x. Benefits likely to accrue to the company and theshare holders from the proposed investment

xi. Interest of directors and their relatives in theinvestee company



Item No.9 : Investments in form of Seed Capital/Units/Plans to belaunched and/or managed by UBL Fund Managers Limited(UBLFM) from the date of AGM to conclusion of next AGM.

UBL Fund Managers Limited, a wholly owned subsidiary of theBank intends to launch and manage a series of open and/orclosed end mutual funds, scheme(s) and investment plans, whichamongst others shall also include a series of products offeringcapital protection, keeping in view the increase in perceived riskon investments in Pakistan emanating from the political and socio-economic environment in the country.

For various open and/or closed end mutual funds, scheme(s) andinvestment plans to be launched and/or managed by UBLFM willtap the UBL Branch network both within and outside Pakistan tomaximize its geographical coverage. For the purpose, UBLFM hasapproached the Bank for investments of up to Rs.800 million inform of seed capital in the proposed mutual funds, investment inthe units of any scheme(s) to be launched and/or managed byUBLFM and investment in plans to be launched and/or managedby UBLFM.

i) Name of Fund/Units/Plan

ii) Nature of investment amountand extent of investment

iii) Average Market Price of the Share

iv) Break-up value of shares intended to bepurchased on the basis of last published financialstatement

v) Price at which shares will be purchased

vi) Earning per share of investee company in lastthree years

vii) Source of Funds from where shares will bepurchased.

viii) Period for which investment will be made

ix) Purpose of investment

Various open-ended and closed end Funds, schemes andinvestment plans to be launched and/or managed by UBLFund Managers Limited from time to time

Equity/Investment Plan(s)Totaling upto Rs. 800 Million

Not Applicable

Not Applicable for Fund/Investment Plan(s)Break-up value of UBL Fund Managers share is:

2008 Rs. 23.45/share2009 Rs. 23.12/share2010 Rs. 23.10/share

For open-end and closed-end funds and schemes at their parvalue and for investment plans at the then prevailing NAV ofthe underlying funds

Earnings per share (in rupees) of UBL Fund Managers is:

2008 Rs. 6.13/share (Restated)2009 Rs. 7.50/share2010 Rs. 2.49/share

Pool of Funds

Minimum time of Investments is 2 years, however transferablewithin 2 years

Seed Capital and Investment plan(s)



x) Benefits likely to accrue to the company and theshare holders from the proposed investment

xi) Interests of directors and their relatives in theinvestee company

General- Professional fund management by UBL Fund Managers- Higher expected returns compared to fixed deposit

schemes- Diversification

Capital Protected Schemes- Capital protection in case of capital protected series of

funds and plans

Commodity Fund- Tapping the rapidly growing commodity market

None

Item No.10 : Equity Investments in Tanzania :

The shareholders are requested to approve the equity investmentup to US $ 8 Million in the proposed subsidiary to be incorporated

in Tanzania. The subsidiary will be a wholly owned subsidiary ofthe Bank for which all applicable regulatory approvals will besought including the State Bank of Pakistan.

United Bank Tanzania (proposed)

100% Equity investment of up to US$ 8 million by the Bank

N/A – Subsidiary yet to be established

N/A

N/A

N/A

Own sources of the Bank

A wholly owned subsidiary of the Bank

To setup wholly owned subsidiary to start banking operations inTanzania

International expansion and business growth

None

i) Name of Company

ii) Nature of investment amountand extent of investment

iii) Average Market Price of the Share

vi) Break-up value of shares intended to be purchasedon the basis of last published financial statement

v) Price at which shares will be purchased

vi) Earning per share of investee company in last threeyears

vii) Source of Funds from where shares will be purchased

viii) Period for which investment will be made

xi) Purpose of investment

x) Benefits likely to accrue to the company and the shareholders from the proposed investment

xi) Interest of directors and their relatives in the investeecompany

Annual Report 2010

I/We, of being a

member of United Bank Limited (“UBL”) and holder of ordinary shares as per Share Register

Folio No. and / or CDC Participation I.D. No. and

Account No. hereby appoint of

or failing him of as

my/our proxy to vote for me/our and on my/our behalf at the 52nd Annual General Meeting of UBL scheduled to be held on Tuesday,

March 29, 2011 at 09:30 a.m. at Islamabad Serena Hotel, Islamabad and at any adjournment thereof.

Signed this day of 2011.

Witness 1:

Signature:

Name:

CNIC No. or Passport No:

Address:

Witness 2:

Signature:

Name:

CNIC No. or Passport No:

Address:

Note:A. General:1. A member entitled to attend and vote at a General Meeting is entitled to appoint a proxy to attend and vote instead of him/her. No person shall

act as a proxy, who is not a member of UBL except that Government of Pakistan / State Bank of Pakistan / Corporation may appoint a personwho is not a member.

2. The instrument appointing a proxy should be signed by the member or his/her attorney duly authorized in writing. If the member is a corporation(other than Government of Pakistan and State Bank of Pakistan), its common seal should be affixed on the instrument.

3. The instrument appointing a proxy, together with Power of Attorney, if any, under which it is signed or a notarially certified copy thereof, shouldbe deposited, with our Registrar/Transfer Agents, M/s. THK Associates (Pvt.) Limited, Ground Floor, State Life Building No.3, Dr. ZiauddinAhmed Road, Karachi, not less than 48 hours before the time of holding the meeting.

4. If a member appoints more than one proxy, and more than one instrument of proxy are deposited by a member with the Registrar, all suchinstruments of proxy shall be rendered invalid.

B. For CDC Account Holders:1. The proxy form shall be witnessed by two persons whose names, addresses and CNIC / Passport No. shall be mentioned on the form.2. Attested copies of CNIC or the passport of the beneficial owners of the proxy shall be furnished with the proxy form.3. The proxy shall produce his/her original CNIC or original passport at the time of the meeting.

[ Form of Proxy 52nd Annual General Meeting of United Bank Limited]

Revenue Stampsof Rs. 5/-

(Signature should agree with the specimensignature registered with the Registrar)

RegistrarM/s. THK Associates (Pvt.) Limited,Ground Floor, State Life Building No.3,Dr. Ziauddin Ahmed Road,Karachi, Pakistan.

Affixcorrectpostage

ubl annual report 2010

Documents