2nd Quarter Report 2017 - Trust Investment BANK Limited · Chaudhry Mahmood-ur-Rehman Registrars...

TRUST INVESTMENT BANK Trust InvestmentBank Limited

2nd Quarterly Report (un-audited)For the half year ended December 31,

2017

TRUST INVESTMENT BANK TRUST INVESTMENT BANK LIMITED

FOR THE HALF YEAR ENDED DECEMBER 31, 2017

TRUST INVESTMENT BANKTRUST INVESTMENT BANK LIMITED


Company Information

Directors Report To Share Holders

Auditors' Report To The Members On Review Of Condensed Interim Financial Information

Condensed Interim Stand Alone Financial Information (un-audited)

Condensed Interim Balance Sheet (un-audited)

Condensed Interim Profit And Loss Account (un-audited)

Condensed Interim Statement Of Cash Flows (un- audited)

Condensed Interim Statement Of Comprehensive Income (un-audited)

Condensed Interim Statement Of Changes In Equity (un-audited)

Notes To And Forming Part Of The Condensed Interim Financial Information (un-audited)

Condensed Interim Consolidated Financial Information (un-audited)

Condensed Interim Consolidated Balance Sheet (un-audited)

Condensed Interim Consolidated Profit And Loss Account (un-audited)

Condensed Interim Consolidated Statement Of Cash Flows (un-audited)

Condensed Interim Consolidated Statement Of Comprehensive Income (un-audited)

Condensed Interim Consolidated Statement Of Changes In Equity (un-audited)

Notes To The Condensed Interim Consolidated Financial Information (un-audited)

01

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CONTENTS

Board of Directors

Mr. Asif Kamal DirectorMr. Tariq Husain DirectorSyed Sajjad Hussain Rizvi DirectorMr. Mamoon-ur-Rashid Qureishi DirectorMr. Abdul Shakeel DirectorMr. Asad Ali Kazmie Director Mr. Ahsan Rafique Director/Chief Executive Officer

Audit CommitteeMr. Abdul Shakeel ChairmanMr. Asif Kamal MemberMr. Asad Ali Kazmie Member

Human Resource and Remuneration CommitteeMr. Mamoon-ur-Rashid Qureishi ChairmanMr. Asif Kamal MemberMr. Ahsan Rafique Member

Company SecretaryZahra Khalid

Chief Financial Officer Khurram Sabah

Head of Internal AuditorRehan Butt

AuditorsTARIQ ABDUL GHANI MAQBOOL & CO.Chartered Accountants

Legal AdvisorChaudhry Mahmood-ur-Rehman

RegistrarsCORPLINK (PVT.) LTD.1-K Commercial, Model Town, [email protected]@corplink.com.pk

Registered & Head Office6th Floor, M. M. Tower, 28-A/K, Gulberg-II, Lahore.Tel: 042-3581 7601-05 Fax: 042-3581 7600Email: [email protected]: www.trustbank.com.pk


03

COMPANY INFORMATION


The Directors are pleased to present the Un-Audited Condensed Interim Standalone and Consolidated Financial Information of Trust Investment Bank for the Half year ended, December 31, 2017.

Financial Summary or Highlights/Performance of the Company:

The operating results and appropriations, for the Half year ended, December 31, 2017 along with the corresponding figures for the last year are as under.

Operating Expenses 33.6 34.8

Profit before taxation 4.5 1.1

Profit after taxation 4.2 1.1

Earnings per Share (Basic) Rs. 0.05 Rs. 0.01

Earnings per Share (Diluted) Rs. 0.05 Rs. 0.01

Companies Overview:

The bank is steadily improving over the last four years and continued its journey toward perpetually improving profitability. The management is focused on to reduce the expenses, improve revenues, increase the efficiency and optimal utilization of resources and expedite the recoveries.

Profit before tax for the period has been increased from Rs. 1.1 million to 4.5 million and profit after tax for the year has been increased to 4.2 million. Total liabilities declined from Rs. 2,495.53 million to Rs. 2,349.18 million. Current ratio is also improved significantly from 0.64 times (2016) to 2.16 times (2017). TIBL's basic and diluted earnings per share up by 30.83 % to Rs. 0.05 and 46.22 % to Rs. 0.05 respectively.

During the year, bank continued settlements and restructuring of overdue liabilities. Some non-current assets are classified as held for sale amounting to Rs. 280.00 million to settle its overdue current liabilities. Efforts for recoveries from stuck up portfolio continued with slight improvement over the past year. The Preference Shares are converted into Ordinary Shares and gradual restructuring of Term Finance Certificates (TFC) is going on.

The most significant thing is that Auditor's opinion was modified this year. Bank also improved its equity by Rs. 491 million The Company has recognized tax losses of Rs. 2,300,000 million of the past years that will give relief to the bank in the coming years..

Future Outlook:

Despite the challenging environment, we are optimistic about the future of the company. Bank is gradually coming out of the turmoil it had been facing in past years. Last year we anticipated increase in equity which has been materialized. We also foresee further rise in capital as well which will help long term sustainability of the company and to overcome its liquidity constraints. Management will continue with its commitment not to increase its borrowings in the coming year. Company has started new businesses at limited scale and it will flourish in coming years. The management believes that the Bank will be able to continue as a going concern and meet its obligations towards its creditors in view of the mitigating factors stated herein.


04

DIRECTORS' REPORT


For the half year ended

31-Dec-17 31-Dec-16(Rupees in millions)

Particulars


05FOR THE HALF YEAR ENDED DECEMBER 31, 2017

Director Compliance:

The Board is aware of its responsibilities under the Code of Corporate Governance and is pleased to report that:

· The financial statements, prepared by the management of the Bank, present its state of affairs fairly, 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 applied in preparation of financial statements and accounting estimates are based on reasonable and prudent judgment;

· International Financial Reporting Standards, as applicable in Pakistan, have been followed in preparation of financial statements and any departure has been adequately disclosed and explained in this annual report;

· The system of internal control is sound in design and has been effectively implemented and monitored;

· There are no significant doubts upon Bank's ability to continue as a going concern;

· There has been no material departure from the best practices of corporate governance as detailed in the Listing Regulations being notified by the Pakistan Stock Exchange;

· The Statement of Code of Ethics and Business Practices has been developed and acknowledged by the directors and employees of the Bank.

· All the major decisions relating to investment or disinvestment of funds, changes in significant policies and overall corporate strategies, appointment, remuneration and terms and conditions of appointment of Chief Executive and Executive Director are taken by the Board.

Dividend:

No dividend has been declared for the period under review.

Audit Committee:

The internal control frame work has been effectively implemented through an independent in house Internal Audit Function. The audit committee is performing its duties in line with its terms of reference as determined by the Board of Directors. The Audit Committee of the Board comprises of three non-executive directors. The coordination between External and Internal Auditors was facilitated to ensure efficiency and contribution to the Bank's objectives, including a reliable financial reporting system and compliance with laws & regulations. During the year four (04) meetings of the Audit Committee were held.

Acknowledgement:

The Directors of bank would like to show their appreciation of the support of SECP and other regulatory bodies and shareholders for achieving good results and hope that this cooperation and support continues to grow in the future. The directors of the bank would also like to express their deep appreciation for the services, loyalty and efforts being continuously rendered by the employees of the Company and hope that they will continue to do so in the future. We would also thanks to SECP for their continued support and patronage extended during the challenging period.

For and on behalf of the Board of Directors

Lahore Mamoon-ur-Rasheed Ahsan RafiqueFebruary 27, 2018 Director President & Chief Executive Officer


06 FOR THE HALF YEAR ENDED DECEMBER 31, 2017

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Introduction

We have reviewed the accompanying condensed interim balance sheet of “Trust Investment Bank Limited” (“the Company”) as at 31 December 2017 and the related condensed interim profit and loss account, condensed interim statement of comprehensive income, condensed interim cash flow statement, condensed interim statement of changes in equity and notes to the financial information for the six months period then ended (here-in-after referred to as the “condensed interim financial information”). Management of the Company is responsible for the preparation and presentation of this condensed interim financial information in accordance with approved accounting standards as applicable in Pakistan for interim financial reporting. Our responsibility is to express a conclusion on this condensed interim financial information based on our review. The figures of the condensed interim profit and loss account and condensed interim statement of comprehensive income for the quarters ended 31 December 2017 and 2016 have not been reviewed, as we are required to review only the cumulative figures for the six months period ended 31 December 2017.

Scope of Review

We conducted our review in accordance with the International Standard on Review Engagements 2410, “Review of Interim Financial Information performed by the Independent Auditor of the Entity”. A review of condensed interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Basis for Qualified Conclusion

a) As described in note No. 1.02 to the condensed interim financial information, overdue installments of financing from banking companies, financial institutions, term finance certificates (TFC) holders and depositors are amounting to Rs.1,849.48 million (30 June 2017: Rs. 1,865.85 million). Moreover, as mentioned in note of contingencies to the condensed interim financial information, the company is defendant / petitioner in various law suits but the company has not charged markup / cost of fund amounting to Rs. 574.64 million (30 June 2017: Rs. 537.01 million) on various financings / investments due to pending litigations. Had the management recognized the said markup / cost of fund then equity and net assets would have been decreased by Rs. 574.64 million (30 June 2017: Rs. 537.01 million) and net profit for the year would have been decreased by Rs. 40.44 million (30 June 2017: Rs. 80.50 million).

Conclusion

Based on our review, except for the effects of the matters as discussed in paragraph “(a)” above, nothing has come to our attention that causes us to believe that the accompanying condensed interim financial information as of and for the half year ended 31 December 2017 is not prepared, in all material respects, in accordance with approved accounting standards as applicable in Pakistan for interim financial reporting.

Emphasis of matters paragraph

Notwithstanding our qualified conclusion, we draw attention to the following matters;

- as described in note No. 1.02 the condensed interim financial information which indicates that at the balance sheet date, the Company has accumulated losses amounting to Rs. 2,786.12 million (30 June 2017: Rs. 2,790.41 million) and its current liabilities exceed its current assets by Rs. 617.58 million (30 June 2017: Rs. 641.58 million). The Company is facing operational and financial crisis. These factors indicate a material uncertainty which may cast significant doubt on the company's ability to continue as a going concern and therefore, it may be unable to realize its assets and discharge its liabilities in normal course of business. However, due to the mitigating factors as described in the above mentioned note, this condensed interim financial information has been prepared on going concern basis. Our conclusion is not qualified in respect of this matter. And,

- as described in note No. 1.03 to this condensed interim financial information which inter alia states that equity of the company is falling short by Rs. 1,702.47 million (2017: Rs. 1,706.75 million) to meet prescribed minimum equity as required under the Non-Banking Finance Companies and Notified Entities Regulation, 2008 for the Companies undertaking business of investment finance services. Our conclusion is not qualified in respect of this matter.

Lahore Tariq Abdul Ghani Maqbool and Co.Dated: February 27, 2018 Chartered Accountants

Shahid Mehmood

AUDITORS' REPORT TO THE MEMBERSON REVIEW OF CONDENSED INTERIM FINANCIAL INFORMATION



Trust Investment Bank Limited

2nd Quarterly Report (un-audited)

For the half year ended December 31, 2017

Condensed InterimStandalone Financial Information


11

ASSETSNon-current assetsProperty and equipments 5 529,002,861 528,376,089Intangible assets 6 2,897,498 -Investment property 1,970,571,427 1,970,571,427Long term investments 7 4,174,149 11,963,894Long term loans and advances 8 - -Finance lease receivables 9 - -Long term deposits 3,602,231 3,602,231

2,510,248,166 2,514,513,641

Current assets Current maturities of non-current assets 10 1,022,198,360 1,011,480,764Short term loans and advances 11 62,956,241 70,151,078Short term investments 12 - -Short term prepayments 2,688,007 289,511Mark-up accrued 192,797,225 192,719,996Taxation - net 1,130,548 1,367,210Other receivables 13 312,658,734 311,267,131Cash and bank balances 14 5,270,832 4,784,171

1,599,699,947 1,592,059,861Assets classified as held for sale 280,000,000 280,000,000

4,389,948,113 4,386,573,502

EQUITY AND LIABILITIESShare capital and reservesAuthorized share capital 2,200,000,000 2,200,000,000

Issued, subscribed and paid up capital 1,383,982,139 1,383,982,139Reserves (2,465,687,227) (2,469,970,886)Long term financing - subordinated loan 15 129,238,592 129,238,592Loan from related parties 16 2,490,547,689 2,490,547,689

1,538,081,193 1,533,797,534

Non-current liabilitiesLong term financing 17 20,952,780 20,952,780Liabilities against assets subject to finance lease 18 1,082,445 604,415Long term morabaha 19 - -Long term certificates of investment 20 218,662,389 221,062,389Deferred liabilities 7,328,114 8,053,270Long term deposits 21 106,557,973 88,467,647

354,583,701 339,140,501

Current liabilitiesShort term borrowings 22 39,413,532 39,413,532Short term certificates of investment 23 458,770,519 465,970,519Current maturities of non-current liabilities 24 1,298,637,595 1,305,974,991Mark-up accrued 167,737,510 168,270,073Trade and other payables 25 65,125,755 61,908,044

2,029,684,911 2,041,537,159Liabilities against assets classified as held for sale 467,598,308 472,098,308Contingencies and commitments 26 - -

4,389,948,113 4,386,573,502

The annexed notes from 1 to 34 form an integral part of this condensed interim financial information.

CONDENSED INTERIM BALANCE SHEET (un-auditd)AS AT DECEMBER 31, 2017

CHIEF EXECUTIVE DIRECTOR

Un-auditedDecember 31,

2017Rupees

AuditedJune 30,

2017RupeesNote



12

Income from lease operations - 174,300 - 174,300Income from investments 215,190 217,629 162,194 134,141Income from term loans 13,192,675 12,171,277 5,609,875 8,665,570Commission income 7,250,321 9,623,257 3,536,145 6,188,254

20,658,186 22,186,463 9,308,214 15,162,265

Less: Finance cost 213,483 427,144 158,917 71,63820,444,703 21,759,319 9,149,297 15,090,627

Less: Administrative and operating expenses 33,633,325 34,811,369 23,665,561 23,261,344

(13,188,622) (13,052,050) (14,516,264) (8,170,717)

Other income 5,158,892 14,307,593 5,158,892 8,723,786(Loss) / profit before provisions and taxation (8,029,730) 1,255,543 (9,357,372) 553,069

Provision reversed / (charged) against lease and term loan 20,361,361 - 20,361,361 -Impairment (charged) / reversed on investment in subsidiary (7,789,745) (112,857) (7,746,381) 64,703

12,571,616 (112,857) 12,614,980 64,703Profit before taxation 4,541,886 1,142,686 3,257,608 617,772Provision for taxation 258,227 - 258,227 -Net profit for the period 4,283,659 1,142,686 2,999,381 617,772

Earnings per share - basic and diluted 27 0.05 0.01 0.03 0.01



CONDENSED INTERIM PROFIT AND LOSS ACCOUNT (un-audited)

Half year endedDecember 31,

Note2017

Rupees2016

Rupees2016

Rupees2017

Rupees

Quarter endedDecember 31,


CHIEF EXECUTIVE DIRECTOR CHIEF FINANCIAL OFFICER


13

CASH FLOWS FROM OPERATING ACTIVITIESProfit before taxation 4,541,886 1,142,686

Adjustments for non cash / non operating items:Depreciation and amortization 1,891,546 1,387,545Provision reversed against lease receiveable (20,361,361) -Finance cost 213,483 427,144Profit on disposal of fixed assets - (78,829)Profit on settlement (5,158,892) -Impairment charged on investment in subsidiary 7,789,745 112,857

(15,625,479) 1,848,717Operating (loss) / profit before working capital changes (11,083,593) 2,991,403

Changes in operating assets and liabilities:(Increase) / decrease in current assets:

Long term loans and advances - 2,158,386Net investment in lease finance 9,643,765 15,231,282Short term loans and advances 7,194,837 (5,699,920)Short term investments - (2,000,000)Short term prepayments (2,398,496) 345,636Mark-up accrued (77,229) (454,100)Other receivables (1,391,603) 1,951,079

12,971,274 11,532,363

Increase / (decrease) in current liabilities:Certificates of investment (14,100,000) (54,099,931)Trade and other payables 3,217,711 1,234,604Long term deposits 18,090,326 681,065

7,208,037 (52,184,262)Cash generated fom / (used in) operations 9,095,718 (37,660,496)

Finance cost paid (746,046) (7,246,048)Taxes paid (21,565) (45,657)Staff service cost paid (725,156) (200,070)

(1,492,767) (7,491,775)Net cash generated from / (used in) operating activities 7,602,951 (45,152,271)

CASH FLOWS FROM INVESTING ACTIVITIESPurchase of property and equipment (2,365,816) (4,278,396)Purchase of intangible assets (3,050,000) -Long term investment - 2,159,124Proceeds from disposal of property and equipment - 2,548,700

Net cash (used in) / generated from investing activities (5,415,816) 429,428

CASH FLOWS FROM FINANCING ACTIVITIESLong term financing (2,683,981) 34,863,750Liabilities against assets subject to finance lease 983,507 (256,876)Net cash (used in) / generated from financing activities (1,700,474) 34,606,874Net increase / (decrease) in cash and cash equivalents 486,661 (10,115,969)Cash and cash equivalents at the beginning of the period (34,629,361) (24,465,167)Cash and cash equivalents at the end of the period (34,142,700) (34,581,136)


CONDENSED INTERIM STATEMENT OF CASH FLOWS (un- audited)FOR THE HALF YEAR ENDED DECEMBER 31, 2017 Un-audited

December 31,2017

Rupees


2016Rupees




14

CONDENSED INTERIM STATEMENT OF COMPREHENSIVE INCOME (un-audited)FOR THE HALF YEAR ENDED DECEMBER 31, 2017

Net profit for the period 4,283,659 1,142,686 2,999,381 617,772

Other comprehensive income - - - -

Total comprehensive income for the period 4,283,659 1,142,686 2,999,381 617,772


2017Rupees

2016Rupees

2016Rupees

2017Rupees







CONDENSED INTERIM STATEMENT OF CHANGES IN EQUITY (un-audited)FOR THE HALF YEAR ENDED DECEMBER 31, 2017


(Rupees)

Capital Reserve

Balance as at 01 July 2016 Re-stated

Total comprehensive income for the half year ended:

Profit for the half year ended 31 December 2016

Other comprehensive income for the half year ended:

Items that may be reclassified subsequently

to profit and loss account:

- Gain during the period transferred to profit and loss

account on derecognition of available for sale investment

Items that may not be reclassified subsequently to

profit and loss account in subsequent periods:

- Remeasurement of defined benefit obligation

Transfer to statutory reserve

Settlement of liability

Conversion of preference shares into ordinary shares

Issue of ordinardy share against liability

Balance as at 31 December 2016


Profit for the half year ended 30 June 2017






- Unrealized gain on remeasurement of

available for sale investments

Items that may not be reclassified subsequently to profit and loss

account in subsequent periods:






Balance as at 01 July 2017










- Remeasurement of defined benefit liability






892,028,729

-

-

-

-

-

-

-

892,028,729

-

-

-

-

-

-

185,131,020

306,822,390

1,383,982,139

-

-

-

-

-

-

-

1,383,982,139

248,055,489

-

-

-

-

228,537

-

-

248,284,026

-

-

-

-

-

11,153,720

-

-

259,437,746

-

-

-

-

-

-

-

259,437,746

61,000,000

-

-

-

-

-

-

-

61,000,000

-

-

-

-

-

-

-

-

61,000,000

-

-

-

-

-

-

-

61,000,000

(2,835,911,444)

1,142,686

-

-

1,142,686

(228,537)

-

-

(2,834,997,295)

55,768,598

-

-

(26,215)

55,742,383

(11,153,720)

-

-

(2,790,408,632)

4,283,659

-

-

4,283,659

-

-

-

(2,786,124,973)

(8,710,969)

-

-

-

-

-

-

-

(8,710,969)

-

8,710,969

-

-

8,710,969

-

-

-

-

-

-

-

-

-

-

-

-

2,575,547,689

-

-

-

-

-

-

-

-

2,575,547,689

-

-

-

-

-

(85,000,000)

-

-

2,490,547,689

-

-

-

-

-

-

-

-

2,490,547,689

398,515,980

-

-

-

-

-

-

-

-

398,515,980

-

-

-

-

-

(269,277,388)

-

-

129,238,592

-

-

-

-

-

-

-

-

129,238,592

1,330,525,474

1,142,686

-

-

1,142,686

-

-

-

-

1,331,668,160

55,768,598

-

8,710,969

-

(26,215)

64,453,352

-

(354,277,388)

185,131,020

306,822,390

1,533,797,534

4,283,659

-

-

4,283,659

-

-

-

-

1,538,081,193


Statutory

reserve

Loss on

remeasurement

of available for

sale investments

General

reserves

Accumulated

losses

Ordinary

Shares

Loan from

related partiesSubordinated

loanTotal

Revenue Reserves

1 LEGAL STATUS AND NATURE OF BUSINESS

1.01 Trust Investment Bank Limited ("the Company") was incorporated in 1992 as a public limited company under the provisions of the Companies Ordinance, 1984 and is listed on Pakistan Stock Exchange Limited. The registered office of the Company is situated at 6th Floor, M. M. Tower, 28 - A / K, Gulberg II, Lahore. The Company is mainly engaged in the business of investment finance services. It is classified as a Non-Banking Finance Company (NBFC) and is regulated by the Securities and Exchange Commission of Pakistan (SECP).

1.02 The accumulated losses of the Company amounting to Rs. 2,786.12 million as at balance sheet date and as on that date its current liabilities exceeds its current assets by Rs. 617.58 million and over due installments of financing from banking companies, financial Institutions, term finance certificates holders and depositors amounting to Rs. 1,849.48 million. The Company has paid renewal fee for Investment Finance Services (IFS) license, however, the Securities and Exchange Commission of Pakistan (SECP) has not yet renewed company’s license to operate Investment Finance Services (IFS) and also suspended the permission for raising deposits in any form. Moreover, the Pakistan Credit Rating Agency Limited (PACRA) has withdrawn the long-term (previously D) and short-term (previously D) credit rating since 19 November 2012 on the management's request. These conditions along with adverse key financial ratios and the pending litigations with the banking companies, financial institutions and investors indicate the existence of a material uncertainty which may cast significant doubt about the Company's ability to continue as a going concern and therefore, it may be unable to realize its assets and discharge its liabilities in the normal course of business.

1.03 SECP vide SRO # 1160/(1)/2015 dated 25 November 2015 has made certain amendments in NBFCs and Notified Entities Regulations 2008 which inter alia also specify the minimum equity requirement for the companies undertaking business of deposit taking investment finance companies as Rs. 750 million however, the equity under the said regulations is falling short by Rs. 1,702.47 million (30 June 2017: Rs. 1,706.75 million). SECP had given time period of one year to the existing lending NBFCs to meet the minimum equity requirement provided. The said period had lapsed on i.e. 25 November 2016, but the Company did not meet the minimum equity requirement.

1.04 The Company has successfully negotiated settlement with major depositors through settlement against cash / properties and Company has classified its non current assets held for sale amounting to Rs. 280 million to settle its overdue current liabilities amounting to Rs. 467.60 million which will strengthen the liquidity of the Company. The management has already initiated an active plan to sell the assets within one year. Negotiations with banks / financial institutions under litigation with the company are in process. Further, the management is very hopeful that it will be able to negotiate / restructure the remaining loans on favourable terms. The Company has generated some liquidity through expediting recovery process. The directors / sponsors of the Company has also injected the funds on and when required, and has also given the surety to inject the funds as per the requirements of the Company in future which will result in improvement in the financial and operational conditions of the Company. With all these measures in place and expected cash injection from directors and financial institutions in coming months, the liquidity position will be strengthened. Based on the above and the financial projections as prepared by the Company for future periods, the management is confident that the company shall continue and further improve its business growth during the coming years resulting in improvement of its profitability. Hence, due to the above mentioned mitigating factors this condensed financial information have been prepared on going concern basis.


16

NOTES TO AND FORMING PART OF THE CONDENSED INTERIMFINANCIAL INFORMATION (un-audited)



2 BASIS OF PRESENTATION AND MEASUREMENT

2.01 This condensed interim financial information is un-audited but subject to limited scope review by the auditors and has been prepared in accordance with the requirements of the International Accounting Standards (IAS- 34 ) "Interim Financial Reporting" and provisions of and directives issued under the Companies Ordinance, 1984. In case where the requirements differ, the provision of or directives issued under Companies Ordinance, 1984 have been followed. The Companies Ordinance, 1984 has been repealed after the enactment of Companies Act, 2017. However, as allowed by the SECP wide its circular No. 23 \2017 dated October 04, 2017 and as clarified by the Institute of Chartered Accountants of Pakistan through its circular No. 17 \2017 dated October 06, 2017, this condensed interim financial information has been prepared in accordance with the provisions of the Companies Ordinance, 1984.

2.02 This condensed interim financial statements has been prepared in accordance with the requirements of the International Accounting Standard (IAS - 34) "Interim Financial Reporting" as applicable in Pakistan and submitted to the shareholders in accordance with Section 245 of the Companies Ordinance, 1984 and the Listing Regulations of Pakistan Stock Exchange.

The disclosures made in these financial statements have, however, been limited based on the requirements of International Accounting Standard (IAS - 34). These do not include all the information and disclosures made in the annual published financial statements and therefore should be read in conjunction with the financial statements of the Company for the year ended 30 June 2017.

2.03 The classifications and provisioning requirements against non-performing assets have been considered in accordance with the applicable requirements of the Non-Banking Finance Companies and Notified Entities Regulations, 2008.

3 SIGNIFICANT ACCOUNTING POLICIES

The accounting policies applied for the preparation of this interim financial information are the same as those applied in preparation of the annual audited financial statements of the Company for the year ended 30 June 2017. However, the management of the bank suspended the accrual of financial charges on borrowings, preference shares and certificate of investments (COIs) etc. from July 2012.

4 JUDGEMENTS, ESTIMATES AND ASSUMPTIONS

The preparation of interim financial information requires management to make judgments, estimates and assumption that affect the application of accounting policies and the reported amounts of assets and liabilities, incomes and expenses. Actual results may differ from these estimates. The significant judgments made by management in applying the Company's accounting policies and the key sources of estimation uncertainty were the same as those that were applied to the financial statements for the year ended 30 June 2017.



5 FIXED ASSETS

Property and equipment 5.01 529,002,861 528,376,089

5.01 Property and equipment

Opening book value 528,376,089 650,390,401Add: Additions during 6 months / 12 months 5.1.1 2,365,816 4,751,224

Add: Tranferred from assets classified as held for sale during 6 months / 12 months - 159,000,000

530,741,905 814,141,625Less: Deletions during 6 months / 12 months 5.1.2 - 2,574,000

530,741,905 811,567,625Less: Depreciation during 6 months / 12 months 1,739,044 3,295,665

529,002,861 808,271,960Add: Depreciation on assets sold during 6 months / 12 months - 104,129

529,002,861 808,376,089Less: Transferred to non-current assets held for sale - 280,000,000 Book value at the end of 6 months / 12 months 5.1.3 529,002,861 528,376,089

5.1.1 Additions during 6 months / 12 months

Office equipment and machines 209,910 1,645,864Furniture and fixtures - 36,000Air conditioning - 85,000Leased vehicles 2,155,906 2,984,360

2,365,816 4,751,224

5.1.2 Deletions during 6 months / 12 months

Office equipment and machines - 30,000Leased vehicles - 2,544,000

- 2,574,000

5.1.3 Book value at the end of 6 months / 12 months

Land 506,000,000 506,000,000Building on freehold land 9,510,438 9,754,296Lease hold improvements 1,790,960 1,989,967Office equipment and machines 4,354,180 4,623,550Furniture and fixtures 2,840,347 2,989,831Air-conditioning equipment 243,446 256,262Vehicles 1,527,825 484,219Leased vehicles 2,735,665 2,277,964

529,002,861 528,376,089




2017Rupees

AuditedJune 30,

2017RupeesNote

6 INTANGIBLE ASSETS

Opening balance - -Additions during 6 months / 12 months 3,050,000 -

3,050,000 -Less: Amortization during 6 months / 12 months 152,502 -Closing balance 2,897,498 -

7 LONG TERM INVESTMENTS

Investment in subsidiary - at cost (Logic Management Services (private) limited) 60,000,000 60,000,000Investment in financial instruments 40,329,060 40,329,060

100,329,060 100,329,060Less: Accumulated impairment on investment in subsidiary 7.01 57,281,161 49,491,416

43,047,899 50,837,644Less: Current portion of long term investments 10 38,873,750 38,873,750

4,174,149 11,963,894

7.01 Breakup value is Rs. 0.45 per share as at 31 December 2017 (June 2017: Rs. 1.75/- per share), based on unaudited / audited financial statements as at 31 December 2017/30 June 2017 respectively.

8 LONG TERM LOANS AND ADVANCES

Secured:Companies, organizations and individuals:

- Considered good 31,190,779 31,190,779- Considered doubtful 2,547,805 2,547,805

33,738,584 33,738,584

Un-secured:Companies, organizations and individuals - considered doubtful 393,125,286 393,125,286

426,863,870 426,863,870Less: Provision against doubtful loans 393,386,559 393,386,559

33,477,311 33,477,311Less: Current portion of long term loans and advances 10 33,477,311 33,477,311

- -




2017Rupees

AuditedJune 30,

2017RupeesNote

9 FINANCE LEASE RECEIVABLES

Lease payments receivable 1,011,772,263 1,021,416,028Add: Residual value 273,917,501 273,917,501Gross investment in leases 1,285,689,764 1,295,333,529Less: Unearned finance income - -Present value of minimum lease payments receivables 1,285,689,764 1,295,333,529Less: Unearned finance income 83,564,305 83,564,305

Provision for lease losses 252,278,160 272,639,521335,842,465 356,203,826

Net investment in lease finance 949,847,299 939,129,703Less: Current portion of net investment in lease finance 949,847,299 939,129,703

- -

10 CURRENT MATURITIES OF NON-CURRENT ASSETS

Long term investments 7 38,873,750 38,873,750Long term loans and advances 8 33,477,311 33,477,311Finance lease receivables 9 949,847,299 939,129,703

1,022,198,360 1,011,480,764

11 SHORT TERM LOANS AND ADVANCES

Short term loans - secured 34,208,755 34,646,749Short term advances 28,747,486 35,504,329

62,956,241 70,151,078

12 SHORT TERM INVESTMENTS

Held to maturity:Considered doubtful:

Placement with First Fidelity Leasing Modaraba 1,000,000 1,000,000Repurchase agreement lendings (Reverse Repo) 7,022,877 7,022,877

8,022,877 8,022,877Less: Provision against doubtful lending 8,022,877 8,022,877

- -

13 OTHER RECEIVABLES

Receivable from organisation - considered doubtful 11,614,432 11,614,432Miscellaneous receivables from lessees - considered doubtful 386,145,359 386,108,526Other receivables:- Considered good 271,112,717 269,757,947- Considered doubtful 4,625,524 4,625,524

275,738,241 274,383,471673,498,032 672,106,429

Less: Provision for doubtful receivables 360,839,298 360,839,298312,658,734 311,267,131




2017Rupees

AuditedJune 30,

2017RupeesNote

14 CASH AND BANK BALANCES

Cash in hand 1,843,741 374,207Cash with banks in:

- Current accounts 244,194 244,194- Deposit accounts 3,182,897 4,165,770

3,427,091 4,409,9645,270,832 4,784,171

14.01 Deposit accounts carry mark-up rate ranging from 4% to 10% per annum (30 June 2017: 4% to 10%).

15 LONG TERM FINANCING - SUBORDINATED LOAN

Long term financing - subordinated loan 15.01 129,238,592 129,238,592

15.01 Particulars of subordinated loan

Loan from directorsDirector - Asif Kamal 15.02 99,810,000 99,810,000Director - Asad Kazmi 15.03 29,428,592 29,428,592

129,238,592 129,238,592

15.02 This represents equity injection in Trust Investment Bank Limited (TIBL) as subordinated loan in accordance with Rule 2(viii) clause (ii) sub clause (f) of SRO 1002(1)/2015.

15.03 This represents subordinated loan acquired against land from Mr. Khizer Hayat for equity participation in favor of Mr. Asad Kazmi through equity participation agreement. As per the terms of the agreement TIBL will pay an amount of Rs. 50 million as an initial payment and balance in the form of issuance / transfer of shares of Trust Investment Bank Limited at par, subject to approval of SECP. Title of this property has been transferred in the name of the Company through court order.

16 LOAN FROM RELATED PARTIES

Loan from directors- Asif Kamal 523,026,262 523,026,262- Asad Kazmi 1,967,521,427 1,967,521,427

2,490,547,689 2,490,547,689

17 LONG TERM FINANCING

Banking companies and other financial institutions - secured 17.01 20,952,780 20,952,780Banking companies and other financial institutions - unsecured 17.02 - -Term finance certificates (TFC) - secured 17.03 - -

20,952,780 20,952,780




2017Rupees

AuditedJune 30,

2017RupeesNote

17.01 Banking companies and other financial institutions - secured

Banking companies and other financial institutions 744,997,832 744,997,832Less: Current portion shown under current liabilities 24 724,045,052 724,045,052

20,952,780 20,952,780

17.02 Banking companies and other financial institutions - unsecured


- -

17.03 Term finance certificates (TFC) - secured

TFC III 171,449,518 171,449,518Less: Current portion shown under current liabilities 24 171,449,518 171,449,518

- -

18 LIABILITIES AGAINST ASSETS SUBJECT TO FINANCE LEASE

Present value of minimum lease payments 2,215,084 1,231,577Less: Current portion shown under current liabilities 24 1,132,639 627,162

1,082,445 604,415

19 LONG TERM MORABAHA

Long term morabaha 15,500,000 15,500,000Less: Current portion shown under current liabilities 24 15,500,000 15,500,000

- -

20 LONG TERM CERTIFICATES OF INVESTMENT

Corporate:- Secured 22,371,263 22,371,263- Unsecured 227,845,994 230,245,994

250,217,257 252,617,257Less: Current portion shown under current liabilities 24 31,554,868 31,554,868

218,662,389 221,062,389




2017Rupees

AuditedJune 30,

2017RupeesNote

21 LONG TERM DEPOSITS

Margin against letters of guarantee 182,196,444 164,106,118Less: Current portion shown under current liabilities 24 75,638,471 75,638,471

106,557,973 88,467,647Deposits against lease arrangements 273,407,961 273,407,961Less: Current portion shown under current liabilities 24 273,407,961 273,407,961

- -106,557,973 88,467,647

22 SHORT TERM BORROWINGS

Banking companies and other financial institutions:Running finances - secured 39,413,532 39,413,532

23 SHORT TERM CERTIFICATES OF INVESTMENT

- Financial institutions: 2,350,006 2,350,006 - Corporate 456,420,513 463,620,513

23.01 458,770,519 465,970,519

23.01 These represent unsecured short term certificates of investment for a period of one month to one year. These carry mark-up rate ranging from 11.5% to 13.75% (30 June 2017: 11.5% to 13.75%) per annum.

24 CURRENT MATURITIES OF NON CURRENT LIABILITIES

Long term financing from banking companies and financial institutions:

- Secured 17.01 724,045,052 724,045,052- Unsecured 17.02 5,909,086 13,751,959

Term finance certificates-secured 17.03 171,449,518 171,449,518Liabilities against assets subject to finance lease 18 1,132,639 627,162Long term morabaha 19 15,500,000 15,500,000Long term certificates of investment 20 31,554,868 31,554,868Long term deposits 21 349,046,432 349,046,432

1,298,637,595 1,305,974,991

25 TRADE AND OTHER PAYABLES

Unclaimed dividend 3,092,624 3,092,624Accrued liabilities 19,228,305 18,109,608Other liabilities 42,804,826 40,705,812

65,125,755 61,908,044




2017Rupees

AuditedJune 30,

2017RupeesNote

26 CONTINGENCIES AND COMMITMENTS

26.01 Contingencies

There is no material change in the status of contingencies as disclosed in note No. 34.01 of the financial statements for the year ended 30 June 2017.

(a) The company has issued guarantees to various parties on behalf of clients amounting to Rs. 176.92 million (30 June 2017: 566.93 million).

(b) The Company has not provided for mark-up of Rs. 537.012 million in preceding year and Rs. 40.44 million during the period on financing from banking companies and other financial institutions, term finance certificates, preference shares, certificates of Investment, long term morabaha and on running finance in this condensed financial information due to pending litigations. According to legal advisor of the Company, the cost of fund after the filing of recovery suits by different parties till the settlement date is expected to be waived off.

26.02 Commitments

There exists no commitment as at balance sheet date.

27 EARNINGS PER SHARE

27.01 Earnings per share - basic

Profit for the period after taxation Rs. 4,283,659 1,142,686 2,999,381 617,772Weighted average number of ordinary shares No. 89,202,873 89,202,873 89,202,873 89,202,873

Earnings per share - basic Rs. 0.05 0.01 0.03 0.01

28 CASH AND EQUIVALENTS

Cash and bank balances 5,270,832 4,784,171Short term running finances (39,413,532) (39,413,532)

(34,142,700) (34,629,361)



31 December2017

Rupees

31 December2016

Rupees

31 December2017

Rupees

31 December2016

Rupees

Half year ended Quarter ended


2017Rupees

AuditedJune 30,

2017Rupees

29 TRANSACTIONS WITH RELATED PARTIES

Related parties comprise of directors, entities over which directors are able to exercise significant influence, entities with common directors, major shareholders, key management employees and employees' fund. The transactions and balances with related parties, other than those which have been disclosed in the relevant notes are disclosed as follows:

Mr. Asif KamalShare capital 71,065,510 71,065,510Subordinate Loan 99,810,000 99,810,000Loan from director 523,026,262 523,026,262

Asad KazmiSubordinate Loan 29,428,573 29,428,573Long term loan 1,967,521,427 1,967,521,427

Genesis Securities (Private) LimitedShare capital 122,097,420 122,097,420

Associated undertakings:Habib Rafiq (Private) LimitedLetters of guarantees outstanding 39,371,500 214,042,809

Logic Managment Services (Private) LimitedOutstanding loans an advances 37,950,239 36,595,469

Related parties transactions:Habib Rafiq (Private) LimitedIncome charged during the period Letters of guarantees expired / issued during the period 174,671,309 172,688,673

Logic Managment Services (Private) LimitedLoan (recovered) / paid during the period 1,354,770 11,475




2017Rupees

Year endedJune 30,

2017Rupees

December 31,2017

Rupees

December 31,2016

Rupees

Half year ended

30 SEGMENT ANALYSIS

The activities of the Company are broadly categorized into two primary business segments namely financing activities and investing activities.

Financing activities

Financing activities include providing long-term and short term financing facilities to corporate and individual customers including lease financing.

Investment activities

Investment activities include money market activities, investment in government securities and capital market activities.

Income from lease operations - - -Income from investments - 215,190 215,190Income from term loans 13,192,675 - 13,192,675Commission income 7,250,321 - 7,250,321Total income for reportable segments 20,442,996 215,190 20,658,186

Less: Finance cost 181,095 32,388 213,483 Administrative and operating expenses 33,633,325 - 33,633,325 Impairment on available for sale investment

Impairment charged on investment in subsidiary - 7,789,745 7,789,745Add: Provision reversed against lease and term loan 20,361,361 - 20,361,361

Other income - 5,158,892 5,158,892Segment result 6,989,937 (2,448,051) 4,541,886

Profit before taxation 4,541,886

Segment assets 1,775,509,875 113,622,769 1,889,132,644Unallocated assets 2,500,815,469

4,389,948,113

Segment liabilities 1,217,258,560 1,050,336,084 2,267,594,644Unallocated liabilities 2,122,353,469

4,389,948,113




Total31 December 2017

Investment activitiesRupees


Income from lease operations 174,300 - 174,300Income from investments - 217,629 217,629Income from term loans 12,171,277 - 12,171,277Commission income 9,623,257 - 9,623,257Total income for reportable segments 21,968,834 217,629 22,186,463

Less: Finance cost 411,397 15,747 427,144 Administrative and operating expenses 34,811,369 - 34,811,369 Impairment on available for sale investment

Impairment charged on investment in subsidiary 112,857 - 112,857Add: Provision reversed against lease and term loan - - -

Other income - 14,307,593 14,307,593Segment result (13,366,789) 14,509,475 1,142,686



4,339,843,920

Segment liabilities 1,561,931,321 983,263,272 2,545,194,593Unallocated liabilities 1,794,649,327

4,339,843,920

31 FINANCIAL RISK MANAGEMENT AND FINANCIAL INSTRUMENTS

The Company's activities expose it to a variety of financial risks: credit risk, liquidity risk and market risk (including currency risk and interest rate risk).

The condensed interim financial information does not include all financial risk management information and disclosures required in the annual financial statements and should be read in conjunction with the Company's audited annual financial statements for the year ended 30 June 2017.

The Company's financial risk management objectives and policies are consistent with those disclosed in the annual consolidated financial statements of the Company as at and for the year ended 30 June 2017.

The carrying value of all financial assets and liabilities reflected in the condensed interim financial information approximate their fair value.






32 EXPOSURE EXCEEDING 20% OF EQUITY

Below is the outstanding exposure exceeding 20% of equity:

Particulars Party name Amount(in Rupees)

Long term loans Ali Pervaiz and Associates 393,125,286/-

33 DATE OF AUTHORIZATION

These financial statements were authorized for issue on 27 February 2018 by the Board of Directors.

34 GENERAL

34.01 The figures of condensed interim profit and loss account and condensed interim statement of comprehensive income for the quarters ended 31 December 2017 and 2016 were subject to limited scope review by the auditors as scope of review covered only the cumulative figures.

34.02 Figures have been rounded off to the nearest of rupee.

34.03 Comparative figures have been rearranged and reclassified, where necessary, for the purpose of better presentation and comparison.





Trust Investment Bank Limited

Condensed InterimConsolidated Financial Information

2nd Quarterly Report (un-audited)

For the half year ended December 31, 2017

ASSETSNon-current assetsProperty and equipments 5 529,002,861 529,120,013Intangible assets 6 2,897,498 30,756,784Investment property 1,970,571,427 1,970,571,427Long term investments 7 1,455,310 1,455,310Long term loans and advances 8 - -Finance lease receivables 9 - -Long term deposits 3,602,231 14,684,139

2,507,529,327 2,546,587,673

Current assets Current maturities of non-current assets 10 1,022,198,360 1,011,480,764Short term loans and advances 11 62,956,241 70,151,078Short term investments 12 10,000,000Short term prepayments 2,688,007 289,511Mark-up accrued 192,797,225 192,719,996Taxation - net 1,130,548 1,233,913Other receivables 13 316,367,490 287,105,542Cash and bank balances 14 8,563,493 6,591,640

1,616,701,364 1,569,572,444Assets classified as held for sale 280,000,000 280,000,000

4,404,230,691 4,396,160,117

EQUITY AND LIABILITIESShare capital and reservesAuthorized share capital 2,200,000,000 2,200,000,000

Issued, subscribed and paid up capital 1,383,982,139 1,383,982,139Reserves (2,465,687,227) (2,469,970,886)Long term financing - subordinated loan 15 129,238,592 129,238,590Loan from related parties 16 2,490,547,689 2,490,547,689

1,538,081,193 1,533,797,532

Non-current liabilitiesLong term financing 17 20,952,780 20,952,780Liabilities against assets subject to finance lease 18 1,082,445 604,415Long term morabaha 19 - -Long term certificates of investment 20 218,662,389 221,062,389Deferred liabilities 7,328,114 8,053,270Long term deposits 21 106,557,973 88,467,647

354,583,701 339,140,501

Current liabilitiesShort term borrowings 22 39,413,532 39,413,532Short term certificates of investment 23 458,770,519 465,970,519Current maturities of non-current liabilities 24 1,298,637,595 1,305,974,991Mark-up accrued 167,737,510 168,270,073Trade and other payables 25 79,408,333 71,494,661

2,043,967,489 2,051,123,776Liabilities against assets classified as held for sale 467,598,308 472,098,308Contingencies and commitments 26 - -

4,404,230,691 4,396,160,117


AS AT DECEMBER 31, 2017Un-audited

December 31,2017

Rupees

AuditedJune 30,

2017RupeesNote


30

CONDENSED INTERIM CONSOLIDATED BALANCE SHEET (un-audited)



Income from lease operations - 174,300 - 174,300Income from investments 215,190 217,629 162,194 134,141Income from term loans 13,192,675 12,171,277 5,609,875 8,665,570Commission income 10,450,321 9,623,257 6,736,145 6,188,254

23,858,186 22,186,463 12,508,214 15,162,265

Less: Finance cost 214,885 427,462 160,238 71,87523,643,301 21,759,001 12,347,976 15,090,390

Less: Administrative and operating expenses 52,311,837 46,661,038 42,300,790 34,933,534

(28,668,536) (24,902,037) (29,952,814) (19,843,144)

Other income 12,849,061 26,044,723 12,849,061 20,460,916(Loss) / profit before provisions and taxation (15,819,475) 1,142,686 (17,103,753) 617,772

Provision reversed / (charged) against lease and term loan 20,361,361 - 20,361,361 -Impairment (charged) / reversed on investment in subsidiary - - - -

20,361,361 - 20,361,361 -Profit before taxation 4,541,886 1,142,686 3,257,608 617,772

Provision for taxation 258,227 - 258,227 -


Earnings per share - basic and diluted 27 0.05 0.01 0.03 0.01



Note2017

Rupees2016

Rupees2016

Rupees2017

Rupees



31

CONDENSED INTERIM CONSOLIDATED PROFIT AND LOSS ACCOUNT (un-audited)




CASH FLOWS FROM OPERATING ACTIVITIESProfit before taxation 4,541,886 1,142,686

Adjustments for non cash / non operating items:Depreciation and amortization 1,978,112 1,486,938Provision reversed against lease receiveable (20,361,361)Finance cost 214,885 427,462Profit on disposal of fixed assets - (78,829)Profit on settlement (5,158,892) -Impairment charged on investment in subsidiary - -

(23,327,256) 1,835,571Operating (loss) / profit before working capital changes (18,785,370) 2,978,257

Changes in operating assets and liabilities:(Increase) / decrease in current assets:

Long term loans and advances (3,553,816) 2,158,386Net investment in lease finance 9,643,765 15,231,282Short term loans and advances 7,194,837 6,315,168Short term investments (2,000,000) (2,000,000)Short term prepayments (3,073,713) 345,636Mark-up accrued (77,229) (454,100)Other receivables (29,261,948) (10,473,671)

(21,128,104) 11,122,701

Increase / (decrease) in current liabilities:Certificates of investment (14,100,000) (54,099,931)Trade and other payables 15,969,175 1,193,606Long term deposits 18,090,326 681,065

19,959,501 (52,225,260)Cash generated from / (used in) operations (19,953,973) (38,124,302)

Finance cost paid (747,448) (7,246,366)Taxes paid (242,066) (45,657)Staff service cost paid (725,156) (200,070)

(1,714,670) (7,492,093)Net cash generated from / (used in) operating activities (21,668,643) (45,616,395)

CASH FLOWS FROM INVESTING ACTIVITIESPurchase of property and equipment (2,365,816) (4,278,396)Purchase of intangible assets 27,706,784 -Long term investment - 2,046,267Proceeds from disposal of property and equipment - 2,548,700Net cash (used in) / generated from investing activities 25,340,968 316,571


32

CONDENSED INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS (un-audited)


FOR THE HALF YEAR ENDED DECEMBER 31, 2017 Un-auditedDecember 31,

2017Rupees


2016Rupees

CASH FLOWS FROM FINANCING ACTIVITIESLong term financing (2,683,979) 34,863,750Liabilities against assets subject to finance lease 983,507 (256,876)Net cash (used in) / generated from financing activities (1,700,472) 34,606,874Net increase / (decrease) in cash and cash equivalents 1,971,853 (10,692,950)Cash and cash equivalents at the beginning of the period (32,821,892) (21,798,175)Cash and cash equivalents at the end of the period (30,850,039) (32,491,125)






2017Rupees


2016Rupees


34

CONDENSED INTERIM CONSOLIDATED STATEMENT OFCOMPREHENSIVE INCOME (un-audited)



Other comprehensive income - - - -

Total comprehensive income for the period 4,283,659 1,142,686 2,999,381 617,772


2017Rupees

2016Rupees

2016Rupees

2017Rupees






CONDENSED INTERIM STATEMENT OF CHANGES IN EQUITY (un-audited)FOR THE HALF YEAR ENDED DECEMBER 31, 2017


(Rupees)

Capital Reserve

Statutory

reserve

Loss on

remeasurement

of available for

sale investments

General

reserves

Accumulated

losses

Ordinary

Shares

Loan from

related partiesSubordinated

loanTotal

Revenue Reserves


Balance as at 01 July 2016 Re-stated








Items that may not be reclassified subsequently to

profit and loss account in subsequent periods:








Profit for the half year ended 30 June 2017






- Unrealized gain on remeasurement of

available for sale investments








Balance as at 01 July 2017










- Remeasurement of defined benefit liability






892,028,729

-

-

-

-

-

-

-

892,028,729

-

-

-

-

-

-

185,131,020

306,822,390

1,383,982,139

-

-

-

-

-

-

-

1,383,982,139

248,055,489

-

-

-

-

228,537

-

-

248,284,026

-

-

-

-

-

11,153,720

-

-

259,437,746

-

-

-

-

-

-

-

259,437,746

61,000,000

-

-

-

-

-

-

-

61,000,000

-

-

-

-

-

-

-

-

61,000,000

-

-

-

-

-

-

-

61,000,000

(2,835,911,444)

1,142,686

-

-

1,142,686

(228,537)

-

-

(2,834,997,295)

55,768,598

-

-

(26,215)

55,742,383

(11,153,720)

-

-

(2,790,408,632)

4,283,659

-

-

4,283,659

-

-

-

(2,786,124,973)

(8,710,969)

-

-

-

-

-

-

-

(8,710,969)

-

8,710,969

-

-

8,710,969

-

-

-

-

-

-

-

-

-

-

-

-

2,575,547,689

-

-

-

-

-

-

-

-

2,575,547,689

-

-

-

-

-

(85,000,000)

-

-

2,490,547,689

-

-

-

-

-

-

-

-

2,490,547,689

398,515,980

-

-

-

-

-

-

-

-

398,515,980

-

-

-

-

-

(269,277,388)

-

-

129,238,592

-

-

-

-

-

-

-

-

129,238,592

1,330,525,474

1,142,686

-

-

1,142,686

-

-

-

-

1,331,668,160

55,768,598

-

8,710,969

-

(26,215)

64,453,352

-

(354,277,388)

185,131,020

306,822,390

1,533,797,534

4,283,659

-

-

4,283,659

-

-

-

-

1,538,081,193


NOTES TO THE CONDENSED INTERIM CONSOLIDATEDFINANCIAL INFORMATION (un-audited)




1 LEGAL STATUS AND NATURE OF BUSINESS

1.01 Trust Investment Bank Limited ("the Company") was incorporated in 1992 as a public limited company under the provisions of the Companies Ordinance, 1984 and is listed on Pakistan Stock Exchange Limited. The registered office of the Company is situated at 6th Floor, M. M. Tower, 28 - A / K, Gulberg II, Lahore. The Company is mainly engaged in the business of investment finance services. It is classified as a Non-Banking Finance Company (NBFC) and is regulated by the Securities and Exchange Commission of Pakistan (SECP).

1.02 The accumulated losses of the Company amounting to Rs. 2,786.12 million as at balance sheet date and as on that date its current liabilities exceeds its current assets by Rs. 614.86 million and over due installments of financing from banking companies, financial Institutions, term finance certificates holders and depositors amounting to Rs. 1,849.48 million. The Company has paid renewal fee for Investment Finance Services (IFS) license, however, the Securities and Exchange Commission of Pakistan (SECP) has not yet renewed company’s license to operate Investment Finance Services (IFS) and also suspended the permission for raising deposits in any form. Moreover, the Pakistan Credit Rating Agency Limited (PACRA) has withdrawn the long-term (previously D) and short-term (previously D) credit rating since 19 November 2012 on the management's request. These conditions along with adverse key financial ratios and the pending litigations with the banking companies, financial institutions and investors indicate the existence of a material uncertainty which may cast significant doubt about the Company's ability to continue as a going concern and therefore, it may be unable to realize its assets and discharge its liabilities in the normal course of business.

1.03 SECP vide SRO # 1160/(1)/2015 dated 25 November 2015 has made certain amendments in NBFCs and Notified Entities Regulations 2008 which inter alia also specify the minimum equity requirement for the companies undertaking business of deposit taking investment finance companies as Rs. 750 million however, the equity under the said regulations is falling short by Rs. 1,702.47 million (30 June 2017: Rs. 1,706.75 million). SECP had given time period of one year to the existing lending NBFCs to meet the minimum equity requirement provided. The said period had lapsed on i.e. 25 November 2016, but the Company did not meet the minimum equity requirement.

1.04 The Company has successfully negotiated settlement with major depositors through settlement against cash / properties and Company has classified its non current assets held for sale amounting to Rs. 280 million to settle its overdue current liabilities amounting to Rs. 467.60 million which will strengthen the liquidity of the Company. The management has already initiated an active plan to sell the assets within one year. Negotiations with banks / financial institutions under litigation with the company are in process. Further, the management is very hopeful that it will be able to negotiate / restructure the remaining loans on favourable terms. The Company has generated some liquidity through expediting recovery process. The directors / sponsors of the Company has also injected the funds on and when required, and has also given the surety to inject the funds as per the requirements of the Company in future which will result in improvement in the financial and operational conditions of the Company. With all these measures in place and expected cash injection from directors and financial institutions in coming months, the liquidity position will be strengthened. Based on the above and the financial projections as prepared by the Company for future periods, the management is confident that the company shall continue and further improve its business growth during the coming years resulting in improvement of its profitability. Hence, due to the above mentioned mitigating factors this condensed financial information have been prepared on going concern basis.



2 BASIS OF PRESENTATION AND MEASUREMENT

2.01 This condensed interim financial information is un-audited but subject to limited scope review by the auditors and has been prepared in accordance with the requirements of the International Accounting Standards (IAS- 34 ) "Interim Financial Reporting" and provisions of and directives issued under the Companies Ordinance, 1984. In case where the requirements differ, the provision of or directives issued under Companies Ordinance, 1984 have been followed. The Companies Ordinance, 1984 has been repealed after the enactment of Companies Act, 2017. However, as allowed by the SECP wide its circular No. 23 \2017 dated October 04, 2017 and as clarified by the Institute of Chartered Accountants of Pakistan through its circular No. 17 \2017 dated October 06, 2017, this condensed interim financial information has been prepared in accordance with the provisions of the Companies Ordinance, 1984.

2.02 This condensed interim financial statements has been prepared in accordance with the requirements of the International Accounting Standard (IAS - 34) "Interim Financial Reporting" as applicable in Pakistan and submitted to the shareholders in accordance with Section 245 of the Companies Ordinance, 1984 and the Listing Regulations of Pakistan Stock Exchange.

The disclosures made in these financial statements have, however, been limited based on the requirements of International Accounting Standard (IAS - 34). These do not include all the information and disclosures made in the annual published financial statements and therefore should be read in conjunction with the financial statements of the Company for the year ended 30 June 2017.

2.03 The classifications and provisioning requirements against non-performing assets have been considered in accordance with the applicable requirements of the Non-Banking Finance Companies and Notified Entities Regulations, 2008.

3 SIGNIFICANT ACCOUNTING POLICIES

The accounting policies applied for the preparation of this interim financial information are the same as those applied in preparation of the annual audited financial statements of the Company for the year ended 30 June 2017. However, the management of the bank suspended the accrual of financial charges on borrowings, preference shares and certificate of investments (COIs) etc. from July 2012.

4 JUDGEMENTS, ESTIMATES AND ASSUMPTIONS

The preparation of interim financial information requires management to make judgments, estimates and assumption that affect the application of accounting policies and the reported amounts of assets and liabilities, incomes and expenses. Actual results may differ from these estimates. The significant judgments made by management in applying the Company's accounting policies and the key sources of estimation uncertainty were the same as those that were applied to the financial statements for the year ended 30 June 2017.



5 FIXED ASSETS

Property and equipment 5.01 529,002,861 529,120,013

5.01 Property and equipment

Opening book value 529,120,013 651,249,014Add: Additions during 6 months / 12 months 5.1.1 2,365,816 4,751,224Add: Transferred from assets classified

as held for sale during 6 months / 12 months - 159,000,000531,485,829 815,000,238

Less: Deletions during 6 months / 12 months 5.1.2 743,924 2,574,000530,741,905 812,426,238

Less: Depreciation during 6 months / 12 months 1,739,044 3,410,354529,002,861 809,015,884

Add: Depreciation on assets sold during 6 months / 12 months - 104,129

529,002,861 809,120,013Less: Transferred to non-current assets held for sale - 280,000,000Book value at the end of 6 months / 12 months 5.1.3 529,002,861 529,120,013

5.1.1 Additions during 6 months / 12 months

Office equipment and machines 209,910 1,645,864Furniture and fixtures - 36,000Air conditioning - 85,000Leased vehicles 2,155,906 2,984,360

2,365,816 4,751,224

5.1.2 Deletions during 6 months / 12 months

Office equipment and machines 230,624 30,000Furniture and fixtures 513,300 -Leased vehicles - 2,544,000

743,924 2,574,000

5.1.3 Book value at the end of 6 months / 12 months

Land 506,000,000 506,000,000Building on freehold land 9,510,438 9,754,296Lease hold improvements 1,790,960 1,989,967Office equipment and machines 4,354,180 4,854,174Furniture and fixtures 2,840,347 3,503,131Air-conditioning equipment 243,446 256,262Vehicles 1,527,825 484,219Leased vehicles 2,735,665 2,277,964

529,002,861 529,120,013


2017Rupees

AuditedJune 30,

2017RupeesNote



6 INTANGIBLE ASSETS

Opening balance 30,756,784 30,840,871Additions / (Deletions) during 6 months / 12 months (27,706,784) -

3,050,000 30,840,871Less: Amortization during 6 months / 12 months 152,502 84,087 Closing balance 2,897,498 30,756,784

7 LONG TERM INVESTMENTS

Investment in subsidiary - at cost (Logic Management Services (private) limited) Investment in financial instruments 40,329,060 40,329,060Less: Current portion of long term investments 10 38,873,750 38,873,750

1,455,310 1,455,310

8 LONG TERM LOANS AND ADVANCES

Secured:Companies, organizations and individuals:


33,738,584 33,738,584

Un-secured:Companies, organizations and individuals - considered doubtful 393,125,286 393,125,286

426,863,870 426,863,870Less: Provision against doubtful loans 393,386,559 393,386,559

33,477,311 33,477,311Less: Current portion of long term loans and advances 10 33,477,311 33,477,311

- -

9 FINANCE LEASE RECEIVABLES

Lease payments receivable 1,011,772,263 1,021,416,028Add: Residual value 273,917,501 273,917,501Gross investment in leases 1,285,689,764 1,295,333,529Less: Unearned finance income - -Present value of minimum lease payments receivables 1,285,689,764 1,295,333,529Less: Unearned finance income 83,564,305 83,564,305

Provision for lease losses 252,278,160 272,639,521335,842,465 356,203,826

Net investment in lease finance 949,847,299 939,129,703Less: Current portion of net investment in lease finance 949,847,299 939,129,703

- -


2017Rupees

AuditedJune 30,

2017RupeesNote



10 CURRENT MATURITIES OF NON-CURRENT ASSETS

Long term investments 7 38,873,750 38,873,750Long term loans and advances 8 33,477,311 33,477,311Finance lease receivables 9 949,847,299 939,129,703

1,022,198,360 1,011,480,764

11 SHORT TERM LOANS AND ADVANCES

Short term loans - secured 34,208,755 34,646,749Short term advances 28,747,486 35,504,329

62,956,241 70,151,078

12 SHORT TERM INVESTMENTS

Held to maturity:Considered doubtful:

Placement with First Fidelity Leasing Modaraba 1,000,000 1,000,000Investment in TDR's 10,000,000 -Repurchase agreement lendings (Reverse Repo) 7,022,877 7,022,877

18,022,877 8,022,877Less: Provision against doubtful lending 8,022,877 8,022,877

10,000,000 -

13 OTHER RECEIVABLES

Receivable from organisation - considered doubtful 11,614,432 11,614,432 Miscellaneous receivables from lessees - considered doubtful 386,145,359 386,108,526Other receivables:


279,446,997 250,221,882677,206,788 647,944,840

Less: Provision for doubtful receivables 360,839,298 360,839,298316,367,490 287,105,542

14 CASH AND BANK BALANCES

Cash in hand 1,843,741 404,207Cash with banks in:

- Current accounts 3,536,855 2,021,663- Deposit accounts 3,182,897 4,165,770

6,719,752 6,187,4338,563,493 6,591,640

14.01 Deposit accounts carry mark-up rate ranging from 4% to 10% per annum (30 June 2017: 4% to 10%).


2017Rupees

AuditedJune 30,

2017RupeesNote



15 LONG TERM FINANCING - SUBORDINATED LOAN

Long term financing - subordinated loan 15.01 129,238,592 129,238,590

15.01 Particulars of subordinated loan

Loan from directorsDirector - Asif Kamal 15.02 99,810,000 99,810,000Director - Asad Kazmi 15.03 29,428,592 29,428,590

129,238,592 129,238,590

15.02 This represents equity injection in Trust Investment Bank Limited (TIBL) as subordinated loan in accordance with Rule 2(viii) clause (ii) sub clause (f) of SRO 1002(1)/2015.

15.03 This represents subordinated loan acquired against land from Mr. Khizer Hayat for equity participation in favor of Mr. Asad Kazmi through equity participation agreement. As per the terms of the agreement TIBL will pay an amount of Rs. 50 million as an initial payment and balance in the form of issuance / transfer of shares of Trust Investment Bank Limited at par, subject to approval of SECP. Title of this property has been transferred in the name of the Company through court order.

16 LOAN FROM RELATED PARTIES

Loan from directors- Asif Kamal 523,026,262 523,026,262- Asad Kazmi 1,967,521,427 1,967,521,427

2,490,547,689 2,490,547,689

17 LONG TERM FINANCING

Banking companies and other financial institutions - secured 17.01 20,952,780 20,952,780Banking companies and other financial institutions - unsecured 17.02 - -Term finance certificates (TFC) - secured 17.03 - -

20,952,780 20,952,780

17.01 Banking companies and other financial institutions - secured


20,952,780 20,952,780

17.02 Banking companies and other financial institutions - unsecured


- -


2017Rupees

AuditedJune 30,

2017RupeesNote



17.03 Term finance certificates (TFC) - secured

TFC III 171,449,518 171,449,518Less: Current portion shown under current liabilities 24 171,449,518 171,449,518

- -

18 LIABILITIES AGAINST ASSETS SUBJECT TO FINANCE LEASE

Present value of minimum lease payments 2,215,084 1,231,577Less: Current portion shown under current liabilities 24 1,132,639 627,162

1,082,445 604,415

19 LONG TERM MORABAHA

Long term morabaha 15,500,000 15,500,000Less: Current portion shown under current liabilities 24 15,500,000 15,500,000

- -

20 LONG TERM CERTIFICATES OF INVESTMENT

Corporate:- Secured 22,371,263 22,371,263- Unsecured 227,845,994 230,245,994

250,217,257 252,617,257Less: Current portion shown under current liabilities 24 31,554,868 31,554,868

218,662,389 221,062,389

21 LONG TERM DEPOSITS

Margin against letters of guarantee 182,196,444 164,106,118Less: Current portion shown under current liabilities 24 75,638,471 75,638,471

106,557,973 88,467,647Deposits against lease arrangements 273,407,961 273,407,961Less: Current portion shown under current liabilities 24 273,407,961 273,407,961

- -106,557,973 88,467,647

22 SHORT TERM BORROWINGS

Banking companies and other financial institutions:Running finances - secured 39,413,532 39,413,532


2017Rupees

AuditedJune 30,

2017RupeesNote

23 SHORT TERM CERTIFICATES OF INVESTMENT

- Financial institutions: 2,350,006 2,350,006 - Corporate 456,420,513 463,620,513

23.01 458,770,519 465,970,519

23.01 These represent unsecured short term certificates of investment for a period of one month to one year. These carry mark-up rate ranging from 11.5% to 13.75% (30 June 2017: 11.5% to 13.75%) per annum.

24 CURRENT MATURITIES OF NON CURRENT LIABILITIES

Long term financing from banking companies and financial institutions:

- Secured 17.01 724,045,052 724,045,052- Unsecured 17.02 5,909,086 13,751,959

Term finance certificates-secured 17.03 171,449,518 171,449,518Liabilities against assets subject to finance lease 18 1,132,639 627,162Long term morabaha 19 15,500,000 15,500,000Long term certificates of investment 20 31,554,868 31,554,868Long term deposits 21 349,046,432 349,046,432

1,298,637,595 1,305,974,991

25 TRADE AND OTHER PAYABLES

Unclaimed dividend 3,092,624 3,092,624Accrued liabilities 19,228,305 18,355,608Other liabilities 57,087,404 50,046,429

79,408,333 71,494,661

26 CONTINGENCIES AND COMMITMENTS

26.01 Contingencies

There is no material change in the status of contingencies as disclosed in note No. 34.01 of the financial statements for the year ended 30 June 2017.

(a) The company has issued guarantees to various parties on behalf of clients amounting to Rs. 176.92 million (30 June 2017: 566.93 million).

(b) The Company has not provided for mark-up of Rs. 537.012 million in preceding year and Rs. 40.44 million during the period on financing from banking companies and other financial institutions, term finance certificates, preference shares, certificates of Investment, long term morabaha and on running finance in this condensed financial information due to pending litigations. According to legal advisor of the Company, the cost of fund after the filing of recovery suits by different parties till the settlement date is expected to be waived off.


FOR THE HALF YEAR ENDED DECEMBER 31, 2017 43


2017Rupees

AuditedJune 30,

2017RupeesNote

26.02 Commitments

There exists no commitment as at balance sheet date.

27 EARNINGS PER SHARE

27.01 Earnings per share - basic

Profit for the period after taxation Rs. 4,283,659 1,142,686 2,999,381 617,772Weighted average number of ordinary shares No. 89,202,873 89,202,873 89,202,873 89,202,873

Earnings per share - basic Rs. 0.05 0.01 0.03 0.01

28 CASH AND EQUIVALENTS

Cash and bank balances 8,563,493 4,784,171Short term running finances (39,413,532) (39,413,532)

(30,850,039) (34,629,361)

31 December2017

Rupees

31 December2016

Rupees

31 December2017

Rupees

31 December2016

Rupees

Half year ended Quarter ended




2017Rupees

AuditedJune 30,

2017Rupees



29 TRANSACTIONS WITH RELATED PARTIES

Related parties comprise of directors, entities over which directors are able to exercise significant influence, entities with common directors, major shareholders, key management employees and employees' fund. The transactions and balances with related parties, other than those which have been disclosed in the relevant notes are disclosed as follows:

Mr. Asif KamalShare capital 71,065,510 71,065,510Subordinate Loan 99,810,000 99,810,000Loan from director 523,026,262 523,026,262

Asad KazmiSubordinate Loan 29,428,573 29,428,573Long term loan 1,967,521,427 1,967,521,427

Genesis Securities (Private) LimitedShare capital 122,097,420 122,097,420

Associated undertakings:Habib Rafiq (Private) LimitedLetters of guarantees outstanding 39,371,500 214,042,809

Logic Managment Services (Private) LimitedOutstanding loans an advances 37,950,239 36,595,469

Related parties transactions:Habib Rafiq (Private) LimitedIncome charged during the period Letters of guarantees expired / issued during the period 174,671,309 172,688,673

Logic Managment Services (Private) LimitedLoan (recovered) / paid during the period 1,354,770 11,475


2017Rupees

Year endedJune 30,

2017Rupees

December 31,2017

Rupees

December 31,2016

Rupees

Half year ended

46

30 SEGMENT ANALYSIS

The activities of the Company are broadly categorized into two primary business segments namely financing activities and investing activities.


Financing activities include providing long-term and short term financing facilities to corporate and individual customers including lease financing.

Investment activities

Investment activities include money market activities, investment in government securities and capital market activities.

Income from lease operations - - -Income from investments - 215,190 215,190Income from term loans 13,192,675 - 13,192,675Commission income 10,450,321 - 10,450,321Total income for reportable segments 23,642,996 215,190 23,858,186

Less: Finance cost 181,095 32,388 214,885 Administrative and operating expenses 52,311,837 - 52,311,837

Impairment on available for sale investmentImpairment charged on investment in subsidiary - - -

Add: Provision reversed against lease and term loan 20,361,361 - 20,361,361Other income - 12,849,061 12,849,061

Segment result (8,488,575) 13,031,863 4,541,886



4,404,230,691

Segment liabilities 1,217,258,560 1,050,336,084 2,267,594,644Unallocated liabilities 2,136,636,047

4,404,230,691








Income from lease operations 174,300 - 174,300Income from investments - 217,629 217,629Income from term loans 12,171,277 - 12,171,277Commission income 9,623,257 - 9,623,257Total income for reportable segments 21,968,834 217,629 22,186,463

Less: Finance cost 411,715 15,747 427,462 Administrative and operating expenses 46,661,038 - 46,661,038

Impairment on available for sale investmentImpairment charged on investment in subsidiary - - -

Add: Provision reversed against lease and term loan - - - Other income - 26,044,723 26,044,723

Segment result (25,103,919) 26,246,605 1,142,686



4,339,843,920

Segment liabilities 1,561,931,321 983,263,272 2,545,194,593Unallocated liabilities 1,794,649,327

4,339,843,920

31 FINANCIAL RISK MANAGEMENT AND FINANCIAL INSTRUMENTS

The Company's activities expose it to a variety of financial risks: credit risk, liquidity risk and market risk (including currency risk and interest rate risk).

The condensed interim financial information does not include all financial risk management information and disclosures required in the annual financial statements and should be read in conjunction with the Company's audited annual financial statements for the year ended 30 June 2017.

The Company's financial risk management objectives and policies are consistent with those disclosed in the annual consolidated financial statements of the Company as at and for the year ended 30 June 2017.

The carrying value of all financial assets and liabilities reflected in the condensed interim financial information approximate their fair value.




48

32 EXPOSURE EXCEEDING 20% OF EQUITY

Below is the outstanding exposure exceeding 20% of equity:

Particulars Party name Amount(in Rupees)

Long term loans Ali Pervaiz and Associates 393,125,286/-

33 DATE OF AUTHORIZATION

These consolidated financial statements were authorized for issue on 27 February 2018 by the Board of Directors.

34 GENERAL

34.01 The figures of condensed interim profit and loss account and condensed interim statement of comprehensive income for the quarters ended 31 December 2017 and 2016 were subject to limited scope review by the auditors as scope of review covered only the cumulative figures.

34.02 Figures have been rounded off to the nearest of rupee.

34.03 Comparative figures have been rearranged and reclassified, where necessary, for the purpose of better presentation and comparison.




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2nd Quarter Report 2017 - Trust Investment BANK Limited · Chaudhry Mahmood-ur-Rehman Registrars...

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