Balance Sheet2006

7/30/2019 Balance Sheet2006

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THE BANK OF KHYBER

BALANCE SHEET

AS AT DECEMBER 31, 2006

Note 2006 2005

Rupees in '000

(Restated)

ASSETS

Cash and balances with treasury banks 7 1,574,531 1,618,521Balances with other banks 8 3,755,151 2,510,190

Lendings to financial institutions 9 2,493,430 1,552,190

Investments 10 8,565,483 7,698,406

Advances 11 9,219,391 10,589,737

Operating fixed assets 12 142,002 140,206

Deferred tax assets 13 96,288 73,342

Other assets 14 1,364,984 891,345

27,211,260 25,073,937

LIABILITIESBills payable 15 150,435 119,308

Borrowings 16 4,325,809 4,374,154

Deposits and other accounts 17 19,076,564 17,452,170

Sub-ordinated loans - -

Liabilities against assets subject to finance lease - -

Deferred tax liabilities - -

Other liabilities 18 629,496 631,533

24,182,304 22,577,165

NET ASSETS 3,028,956 2,496,772

REPRESENTED BY

Share capital 19 2,000,949 1,231,034

Reserves 758,290 639,543

Unappropriated profit 103,890 176,089

2,863,129 2,046,666

Surplus on revaluation of securities 20 165,827 450,106

3,028,956 2,496,772

CONTINGENCIES AND COMMITMENTS 21

The annexed notes from 1 to 41 form an integral part of these financial statements.

Managing Director Director Director Director


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THE BANK OF KHYBER

PROFIT AND LOSS ACCOUNT

FOR THE YEAR ENDED DECEMBER 31, 2006

Note 2006 2005

Rupees in 000(Restated)

Mark-up/Return/Interest Earned 22 1,943,335 1,416,322Mark-up/Return/Interest Expensed 23 1,304,742 908,085Net Mark-up/ Interest Income 638,593 508,237Provision against non-performing loans and advances 11.4 346,655 232,357

Provision for doubtful placement with a financial institution 9.4 10,000 -

Provision for diminution in the value of investments 10.3 - (2,013)

Bad debts written off directly - -

356,655 230,344Net Mark-up/ Interest Income after provisions 281,938 277,893

Fee, Commission and Brokerage Income 67,883 74,977Dividend Income 120,743 94,917Income from dealing in foreign currencies 12,572 12,964Gain on sale of securities 24 65,079 183,580

Unrealized gain / (loss) on revaluation of investments classified as

held for trading 382 (89,586)

Other Income 25 40,018 24,903Total non-markup/interest Income 306,677 301,755

588,615 579,648

Administrative expenses 26 372,129 361,569Other provisions/write offs - -

Other charges 27 3,828 1,581Total non-markup/interest expenses 375,957 363,150

212,658 216,498Extra ordinary/unusual items - -

212,658 216,498Share in results of associate before taxation 10.6.1 12,207 18,211

224,865 234,709Taxation

Current 28 20,025 16,833Prior years - -Deferred 3,250 (775)

23,275 16,058

201,590 218,651

Unappropriated profit brought forward - 7,591Profit available for appropriation 201,590 226,242

29 #REF! #REF!


PROFIT AFTER TAXATION

Basic and diluted earnings per share

PROFIT BEFORE TAXATION

NON MARK-UP/INTEREST INCOME

NON MARK-UP/INTEREST EXPENSES



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THE BANK OF KHYBER

STATEMENT OF CHANGES IN EQUITY


Note

------------------------------------------------------------------- Rupees in '000' --------------------------------------------------------------------

Balance as at January 01,

2005 1,231,034 - - 285,208 183,000 21,182 100,000 589,390 7,591 1,828,015

Profit for the year - - - - - - - - 287,453 287,453

Transfer from revenue

reserve - - - - (128,869) - - (128,869) 128,869 -

Transfer to statutory

reserve - - - 57,491 - - - 57,491 (57,491) -

Transfer to reserve

against consumer

financing - - - - - 6,422 - 6,422 (6,422) -

Transfer to reserve for

issue of bonus shares - 360,000 - - - - 360,000 (360,000) -

Balance as at December31, 2005 1,231,034 360,000 - 342,699 54,131 27,604 100,000 884,434 - 2,115,468

Effect of prior period

restatement on:

Unappropriated profit - - - - - - - - (68,802) (68,802)


reserve - - - (13,760) - - - (13,760) 13,760 -

Effect of change in

accounting policy on:


reserve - - - - 128,869 - - 128,869 (128,869) -


issue of bonus shares - (360,000) - - - - - (360,000) 360,000 -

Balance as at December

31, 2005 - Restated

5.1.1

1,231,034 - - 328,939 183,000 27,604 100,000 639,543 176,089 2,046,666


reserve - - - - (128,869) - - (128,869) 128,869 -


issue of bonus shares - 360,000 - - - - 360,000 (360,000) -

Issue of share capital 409,915 - - - - - - - - 409,915

Share premium - - 204,958 - - - - 204,958 - 204,958

Transfer to share capital 360,000 (360,000) - - - - - (360,000) - -

Profit for the year - - - - - - - - 201,590 201,590


reserve - - - 40,318 - - - 40,318 (40,318) -

Transfer to reserve

against consumerfinancing - - - - - 2,340 - 2,340 (2,340) -

Balance as at December

31, 2006 2,000,949 - 204,958 369,257 54,131 29,944 100,000 758,290 103,890 2,863,129


Revenue

reserve

Statutory

reserveShare

premium

Reserve for

bonus

issue

Total

Reserves

Unappropr-

iated profit

Share

capitalTOTAL

Capital Revenue

Reserve for

contingenc-

ies*

Reserve for

consumer

financing



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THE BANK OF KHYBER

CASH FLOW STATEMENT


Note 2006 2005

Rupees in '000

(Restated)

CASH FLOW FROM OPERATING ACTIVITIES

Profit/(Loss) before taxation 224,865 234,709

Less: Dividend income 120,743 94,917

104,122 139,792Adjustments:

Depreciation 16,534 18,353

Amortization 1,768 2,201

Provision against non-performing advances 346,051 232,357

Unrealized gain / (loss) on revaluation of investments classified as held for trading (382) 89,586

Provision against doubtful placement with financial institution 10,000 -

Provision for Diminution in the value of investments/ other assets - (2,013)

Loss/ (Gain) on sale of fixed assets (634) (1,155)

Share in results of an associate (12,207) (18,211)

Fixed assets adjustment - (147)

361,130 320,971

465,252 460,763(Increase)/ Decrease in operating assets

Lendings to financial institutions (127,810) 1,127,498

Advances 1,024,295 (1,715,415)

Others assets (excluding advance taxation) (453,600) 299,609

442,885 (288,308)

Increase/ (Decrease) in operating liabilities

Bills Payable 31,127 (901,586)

Borrowings (48,345) 193,901

Deposits and other accounts 1,624,394 1,620,858

Other liabilities (excluding current taxation) (2,037) (42,913)

1,605,139 870,260

Cash generated from operations 2,513,276 1,042,715

Income tax paid (67,619) (65,703)Net cash flow from operating activities 2,445,657 977,012

CASH FLOW FROM INVESTING ACTIVITIES

Net investments in held for trading securities 238,359 (338,593)

Net investments in available-for-sale securities (1,862,114) (525,166)

Net investments in held-to-maturity securities 485,938 67,237

Dividend income 121,153 95,117

Investments in operating fixed assets (21,122) (33,885)

Sale proceeds of property and equipment disposed-off 1,657 1,956

Net cash used in investing activities (1,036,129) (733,334)

CASH FLOW FROM FINANCING ACTIVITIESIssue of share capital 614,873 -

Net cash flow from financing activities 614,873 -

Increase/(Decrease) in cash and cash equivalents 2,024,401 243,678

Cash and cash equivalents at beginning of the year 29 5,488,711 5,245,033

Cash and cash equivalents at end of the year 29 7,513,112 5,488,711




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THE BANK OF KHYBER

NOTES TO THE FINANCIAL STATEMENTS


1. STATUS AND NATURE OF BUSINESS

2. BASIS OF PRESENTATION

2.1

2.2

3. STATEMENT OF COMPLIANCE

3.1

3.2

4. BASIS OF MEASUREMENT

The Bank was established under The Bank of Khyber Act, 1991 (N.W.F.P. Act No. XIV of 1991) and is principally

engaged in the business of commercial, investment and development Banking. The Bank acquired the status of a

scheduled bank in 1994. The Bank is listed on the Karachi Stock Exchange (KSE). The registered off ice of the

Bank is situated at 24 The Mall, Peshawar Cantt, Peshawar. The Bank was operating 29 branches as atDecember 31, 2006 (2005: 29 branches).

In accordance with the directives of the Federal Government regarding the shift ing of the banking system to

Islamic modes, the State Bank of Pakistan (SBP) has issued various circulars from time to time. One permissible

form of trade related mode of f inancing comprises of purchase of goods by the banks from their customers and

resale to them at appropriate mark-up in price on deferred payment basis. The purchases and sales arising under

the respective arrangements (except for murabaha financings accounted for under Islamic Financial Accounting

Standard - 1 "Murabaha") are not reflected in these financial statements as such but are restricted to the amount

of facility actually utilized and the appropriate portion of rental/profit thereon. Following the sett ing up of the

Islamic Banking Division the Bank also provides financing through Shariah compliant modes of financing.

The financial results of the Islamic Banking Division have been consolidated in these financial statements for

reporting purpose, after eliminating the effects of intra-bank transactions and balances. The bank is conducting

Islamic Banking in five (2005: four) of its branches. Key financial f igures of the Islamic Banking Division are

disclosed in annexure "A" to these financial statements.

These financial statements have been prepared in accordance with the requirements of the Banking Companies

Ordinance, 1962, the Companies Ordinance, 1984, the directives issued by SBP including format for the financialstatements of banks issued by SBP through BSD Circular No. 04 dated February 17, 2006, and the International

Financial Reporting Standards (IFRSs) issued by the International Accounting Standards Board (IASB) and

interpretations issued by the Standing Interpretation Committee of IASB (the interpretations), as adopted in

Pakistan. However, the requirements of the Banking Companies Ordinance, 1962, the Companies Ordinance,

1984 and the directives of the SBP have been followed in case where their requirements are not consistent with

the requirements of the IFRSs and the interpretations.

The Securities and Exchange Commission of Pakistan (SECP) has approved the adoption of IAS 39 "Financial

Instruments: Recognition and Measurement" and IAS 40 "Investment Property". However, SBP through its BSD

Circular letter No.10 dated August 26, 2002 has deferred the implementation of these standards for banks in

Pakistan till further instructions. Accordingly, the requirements of these standards have not been considered in

preparation of these financial statements for the year ended December 31, 2006. However, investments havebeen classified in accordance with the requirements of various circulars issued by the State Bank of Pakistan.

These financial statements have been prepared under the historical cost convention except for certain financial

instruments which have been stated at fair value.


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THE BANK OF KHYBER

5. SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGMENTS

5.1 Classification of investments

5.2 Impairment of available-for-sale equity investments

5.3 Held-to-maturity investments

5.4 Provision against non-performing loans and advances

5.5 Income taxes

5.6 Defined benefit plan

Investments are classified as disclosed in Note 6.3 to these financial statements.

While making the estimates for income taxes currently payable by the Bank, the management looks at the current

income tax law and the decisions of appellate authorities on certain issues in the past. There are various matters

where banks view differs with the view taken by the income tax department and such amounts are shown as

contingent liability.

The cost of the defined benefit plan (gratuity) is determined using actuarial valuations. The actuarial valuation

involves making assumptions about discount rates, expected rates of returns on assets, future salary increases

and mortality rates. Due to the long term nature of these plans, such estimates are subject to significant

uncertainty.

The preparation of financial statements in conformity with approved accounting standards requires management

to make judgments, estimates and assumptions that affect the application of policies and reported amounts of

assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical

experience and various other factors that are believed to be reasonable under the circumstances, the results of

which form the basis of making the judgments about carrying values of assets and liabilities that are not readilyapparent from other sources. Actual results may differ from these estimates. The estimates and underlying

assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in

which the estimate is revised if the revision affects only that period or in the period of the revision and future

periods if the revision affects both current and future periods.

The areas involving a higher degree of judgment, complexity or areas where assumptions and estimates are

significant to the financial statements are disclosed below:

The Bank reviews its loan portfolio to assess amount of non performing loans and advances and provision

required there against on a quarterly basis. While assessing this requirement various factors including the

delinquency in the account, financial position of the borrower, the forced sale value of securities and requirements

of the Prudential Regulations are considered. The estimates of forced sale values are supported by independent

valuations of the assets mortgaged / pledged. The amount of provision against advances is determined in

accordance with the relevant Prudential Regulations.

The Bank determines that available-for-sale equity investments are impaired when there has been a significant or

prolonged decline in the fair value below its cost. This determination of what is significant or prolonged requires

judgment. In making this judgment, the Bank evaluates among other factors, the normal volatility in share prices.

In addition, impairment may be appropriate when there is evidence of deterioration in the financial health of the

investee, industry and sector performance, changes in technology, and operational and financing cash flows.

The Bank follows the guidance provided in State Bank of Pakistans circulars on classifying non-derivative

financial assets with f ixed or determinable payments and fixed maturity as held-to-maturity. In making this

judgment, the Bank evaluates its intention and ability to hold such investments to maturity.


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THE BANK OF KHYBER

6. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

6.1 Change in accounting policy

6.1.1

6.1.2

2006 2005

Rupees in '000'

Loans, cash credits, running finances, etc. (64,840) (97,367)

Other assets 22,691 34,230Other liabilities (42,149) (63,137)

6.2

a) IAS 1: Presentation of financial statements - Capital disclosures effective from January 01, 2007

b) IFRIC 11, IFRS 2 Group Treasury Share Transactions effective from March 01, 2007

c) IFRIC 12 Service Concession Arrangements effective from January 01, 2009

During the year the Institute of Chartered Accountants of Pakistan (ICAP) issued a circular No. 06-2006 dated

June 19, 2006 which requires that all declarations of dividends to holders of equity instruments including

declaration of bonus issues and other appropriations except appropriations which are required by law after the

balance sheet date, should not be recognized as liabi li ties or change in reserves at the balance sheet date.Previously all declarations of dividend to holders of equity instruments and transfers to reserves relating to profit

for the year declared subsequent to year end, were accounted for in the year to which those related. This change

has been accounted for as a change in accounting pol icy with retrospective effect in accordance with the

treatment specified in International Accounting Standard - 8 "Accounting Policies, Changes in Accounting

Estimates and Errors". The effect of this change has been disclosed in the Statement of Changes in Equity.

Adoption of above amendments would result in an impact on the extent of disclosures presented in the future

financial statements of the Bank.

During the year, the Bank has adopted the Islamic Financial Accounting Standard 1 - "Murabaha" issued by the

Institute of Chartered Accountants of Pakistan and notified for adoption by the Securities and Exchange

Commission of Pakistan, vide SRO 865(I)/2005 dated August 24, 2005, by all f inancial insitut ions for periods

beginning on or after January 01, 2006. Pursuant to the requirements of the said standard, funds disbursed for

puchase of goods are recorded as 'Advance against Murabaha'. On culmination of murabaha transaction, i.e.sale of goods to the customer, murabaha financing is recorded at the invoiced amount. Previously, murabaha

financing were recorded at the cost of goods sold. Profit on murabaha transactions is recognized on accrual basis

whereby profit is recognized over the period of the contract. This change in accounting policy has been applied

retrospectively and does not have any impact on current or prior period's profit.

Had there been no change in accounting policy, amounts in the following balance sheet line items would have

been higher/(lower) by:

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

effective:

The IAS / IFRS / IFRIC interpretations, which have been published and / or revised and are applicable to financial

statements of the Bank covering accounting periods on or after January 01, 2007 or later periods are as follows:


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THE BANK OF KHYBER

a) IFRS 2 Share-based payments

b) IFRS 3 Business combinations

c) IFRS 5 Non-current assets held for sale and discontinued operations

d) IFRS 6 Exploration for and evaluation of mineral resources

6.3 Investments

6.3.1

6.3.2 The Bank classifies its investments as follows:

Held to maturity

Held for trading

Available for sale

Investment in associate is accounted for using the equity method of accounting wherein the company's share of

underlying net assets of the investee is recognized as the carrying amount of such investment. Difference

between the amounts previously recognized and the amount calculated at each year end is recognized in the

profit and loss account as share of profits of associate. Distribution received out of such profits is credited to the

carrying amount of investment in associated undertaking.

These are investments that do not fall under the held fortrading orheld to maturity categories. Surplus/(deficit)

arising as a result of revaluation of securities categorized as available for sale is presented below the

shareholders equity in the balance sheet. The surplus/(deficit) arising on these securit ies is taken to the profit

and loss account when realized.

Provision for diminution in the value of securities (except TFCs) is made for permanent impairment, if any, in their

value. Provision against TFCs is made as per the aging criteria prescribed by Prudential Regulations.

In addition to the above, a new series of standards called International Financial Reporting Standards (IFRS)

have been introduced and seven IFRSs have been issued by the IASB. Out of these following four IFRSs have

been adopted by Securities and Exchange Commission of Pakistan (SECP) vide its S.R.O. (1) / 2006 dated

December 06, 2006:

All investments acquired by the Bank are initially recognized at cost, being the fair value of consideration given

including acquisition cost. In accordance with the directives of the SBP, quoted and government securit ies,

excluding investments categorized as held to maturity securities, are stated at revalued amounts. Investment in

unquoted securities (excluding investment in an associate) are stated at the lower of cost and break-up value.

Break-up value is calculated on the basis of net assets of the investee companies according to their latest

available audited financial statements.

These are investments acquired principally for the purpose of generating profit from short-term fluctuation in

prices ordealers margins, or are securit ies included in a portfolio in which a pattern of short-term profit taking

exists. These securities are not held for more than ninety (90) days. Surplus/(deficit) arising on revaluation of

held for trading securities is credited / charged to the profit and loss account.

These are securities acquired by the Bank with the intention and ability to hold them upto maturity. In accordance

with BSD Circular No. 14 dated September 24, 2004 investments in securities categorized as held to maturity

are carried at amortized cost.

The Bank expects that the adoption of the above-mentioned pronouncements will have no significant impact on

the financial statements in the period of initial application.


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THE BANK OF KHYBER

6.4 Repurchase and resale agreements

6.5 Advances

6.5.1 Murabaha

6.5.2 Ijarah

6.6 Inventories

6.7 Operating fixed assets

6.7.1 Tangible fixed assets

In case of ijarah financing, the present value of the ijarah rental is recognized as a receivable. The difference

between the gross receivable and the present value of the receivable is recognized as unearned ijarah income.

Ijarah income is recognized over the term of the ijarah using the net investment method (before tax), which

reflects a constant periodic rate of return.

Minor renewals, replacements, maintenance, repairs and gains and losses on disposal of fixed assets are

charged to the profit and loss account when incurred. Major renewals and improvements are capitalized.

The Bank values its inventories at the lower of cost and net realizable value. Cost of inventories represent the

actual purchase made by the customer as an agent on behalf of the Bank from the funds disbursed for the

purposes of culmination of murabaha. The net realisable value is the estimated selling price in the ordinary

course of business less the estimated cost necessary to make the sale.

Property and equipment, except land and CWIP which are not depreciated, are stated at cost less accumulated

depreciation and accumulated impairment, if any. Depreciation on fixed assets is charged to income over the

useful l ife of the asset on a systematic basis by using the reducing balance method at the rates stated in Note

12.2.

Depreciation charge commences from the month when the asset is available for use and continues till the month

the asset is discontinued either through disposal or retirement.

Securities sold with a simultaneous commitment to repurchase at a specified future date (repos) continue to be

recognised in the balance sheet and are measured in accordance with accounting policies for investment

securities. The counterparty liability for amounts received under these agreements is included in borrowings from

financial institutions. The difference between sale and repurchase price is treated as mark- up/return/interest

expense and accrued over the term of the related repo agreement.Securities purchased with a corresponding commitment to resell at a specified future date (reverse repos) are not

recognised in the balance sheet, as the bank does not obtain control over the assets. Amounts paid under these

agreements are included in lendings to financial institutions. The difference between purchase and resale price is

treated as mark-up/return/interest income and accrued over the term of the related reverse repo agreement.

Advances are stated net of provisions for bad and doubtful debts and are based on the appraisal carried out,

taking into consideration the Prudential Regulations issued by the State Bank of Pakistan and where such

provision is considered necessary, it is charged to profit and loss account. The Bank also maintains general

provision in line with the Banks prudent policies as precautionary provision to hedge against unforeseencontingencies. Advances are written-off when there are no realistic prospects of recovery.

Funds disbursed for purchase of goods are recorded as 'Advance for Murabaha'. On culmination of murabaha i.e.

sale of goods to customers, murabaha financings are recorded at the invoiced amount. Goods that have been

purchased but remained unsold are recorded as inventories. Profit is recorded at the time of sale of goods under

murabaha as deferred income and is included in the amount of murabaha financings. Profit is taken to the profit

and loss account over the period of the murabaha.


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THE BANK OF KHYBER

Change in accounting estimate

6.7.2 Intangible fixed assets

6.7.3 Capital work in progress

6.8 Taxation

6.8.1 Current

6.8.2 Deferred

When the carrying amount of an asset is greater than its estimated recoverable amount it is written down

immediately to its recoverable amount.

Pursuant to change in IAS-16 'Property, plant and equipment', the Bank has changed its estimate for charging

depreciation on assets. Previously, full year's depreciation was charged in the year of addition while no

depreciation was charged in the year of disposal. Now the Bank charges depreciation from the month the asset is

available for use till the month the asset is derecognized either through disposal or retirement. This change has

an immaterial impact on the profits and operating fixed assets reported in the financial statements.

Intangible fixed assets comprise of cost of computer software, which are being amortized using the straight-line

method over their useful lives but restricted to a maximum period of five years (Note 12.3). Costs associated with

maintaining computer software are recognized as an expense when incurred.

Capital work in progress is stated at cost. These are transferred to operating fixed assets as and when assets are

available for use.

The assets' residual values and useful l ives are reviewed, and adjusted if appropriate, at each balance sheet

date.

Provision for current taxation is based on taxable income at the current rates after considering tax credits and

rebates, if any.

Deferred income tax is provided, using the liability method, on all temporary differences at the balance sheet date

between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax

assets and any unused tax losses, to the extent that it is probable that taxable profits will be available against

which the deductible temporary differences, carry forward of unused tax assets and unused tax losses can be

utilised.

The carrying amount of deferred income tax assets is reviewed at each balance sheet date and reduced to the

extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred

income tax asset to be utilised.

Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the period

when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or

substantively enacted at the balance sheet date.

Income tax relating to the items recognized directly in equity are recognized in equity.


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THE BANK OF KHYBER

6.9 Staff retirement benefits

6.9.1 Defined benefit plan

Change in accounting estimate

6.9.2 Defined contribution plan

6.10 Revenue recognition

Dividends are recognized as income when the right to receive is established.

Return / markup on advances (other than murabaha) and investments is recognized on accrual basis, except the

income which is required to be carried forward or taken to "mark-up in suspense account" in compliance with the

Prudential Regulations of the SBP.

The Bank follows the finance method in recognizing income on ijarah contracts. Under this method the unearned

income i.e. the excess of aggregate ijarah rentals over the cost of the asset under ijarah facil ity is deferred and

then amortized over the term of the ijarah, so as to produce a constant rate of return on net investment in the

ijarah. Gains / losses on termination of ijarah contracts, documentation charge, front-end fees and other ijarah

income are recognized as income on receipt basis.

Purchase and sale of investments are recorded on the dates of contract. Gains and losses on sale of investment

are also recorded on those dates.

Fee, commission, liquidated damages etc., are recorded on receipt basis except guarantee commission, which is

recognized on time proportion basis.

During the year the Bank has changed its accounting estimate for determination of liability regarding defined

benefit plan (gratuity). Previously, the liability was determined using the Bank's own estimates based on the lasrdrawn salary of each employee at each year end. Now, the liability is determined using actuarial techniques as

explained above. This change in accounting estimate has been prospectively applied. Had there been no change

in this estimate, the profits for the year (before taxation) would have been higher by Rs. 21.952 million while

receivable from gratuity fund would have been lower by the same amount.

The Bank operates a recognized contributory provident fund covering all its permanent employees. Equal monthly

contributions are made by the Bank and the employees to the fund at a rate of fifteen percent of basic salary.

Income on murabaha is accounted for on culmination of murabaha transaction. However, profi t not due for

payment in the current year is deferred by accounting for unearned murabaha income with a corresponding credit

to deferred murabaha income which is recorded as a liability. The same is then recognized as revenue on a time

proportionate basis.

The principle actuarial assumptions used in the actuarial valuation comprised of discount rate at 10% per annum,

salary increase at 9% per annum, expected return on plan assets at 10% per annum and average expected

remaining working life of employees at 14 years.

The Bank operates a funded gratuity scheme for all its permanent employees. Contributions are made to the fund

in accordance with the rules of the scheme by the Bank. Employees are entitled to the benefits under the scheme

which comprise of 2 last drawn basic salaries for each completed year of service. Further, the profi t earned

through the investments of the fund shall also be credited to the account of each employee on proport ionate

basis at the end of each year.Contributions to the fund are made on the basis of actuarial recommendations. Actuarial valuation was carried as

on December 31, 2006 using the projected unit credit actuarial cost method. Actuarial gains and losses, if any,

arising during the year are fully charged to the profit and loss account.


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THE BANK OF KHYBER

6.11 Foreign currencies

6.12 Cash and cash equivalents

6.13 Provisions and contingent assets and liabilities

6.14 Financial instruments

6.15 Derivative financial instruments

6.16 Trade date accounting

6.17 Off-Setting

The Bank's financial statements are presented in Pak Rupees (Rs.) which is the Bank's functional and

presentation currency. Assets and liabilities in foreign currencies are translated into Pak Rupees at the rates of

exchange approximating those prevailing at the balance sheet date except those covered by forward exchange

contracts, which are translated at the contracted rates. Consistent with prior years, forward exchange contracts

are valued at the rates applicable to the respective maturities of the relevant foreign exchange contracts. Gains or

losses on forward exchange contracts outstanding as at the year end are recognized currently. Exchange gainsor losses are included in income currently.

Financial assets and financial liabilities are only set off and the net amount is reported in the financial statements

when there is a legally enforceable right to set off and the bank intends either to settle on a net basis, or to realize

the assets and to settle the liabilities simultaneously.

For purposes of the cash flow statement the cash and cash equivalents comprise of cash and balances with

treasury banks, balances with other banks and call lendings and placements with financial institutions having

maturities of three (3) months or less.

Provisions are recognized when the Bank has a present legal or constructive obligation arising as a result of past

events and it is probable that an outflow of resources embodying economic benefits will be required to settle the

obligation and a reliable estimate of the amount of the obligation can be made.

Contingent assets are not recognized, and are also not disclosed unless the realization of the asset is virtually

certain and contingent l iabil ities are not recognized, and are disclosed unless the probability of outflow of

resources embodying economic benefits is remote.

All the financial assets and financial liabilities are recognized at the time when the bank becomes a party to the

contractual provisions of the instrument. Any gain or loss on derecognition of the financial assets and financial

liabilities is taken to income currently.

Derivative financial instruments are initially recognized at their fair value on the date on which the derivative

contract is entered into and are subsequently remeasured at fair value. All derivative financial instruments are

carried as asset when fair value is posit ive and liabilities when fair value is negative. Any change in the value of

derivative financial instruments is taken to the profit and loss account.

All regular way purchases/sales of investment are recognised on the trade date, i.e. the date the Bank commits topurchase/sell the investments. Regular way purchases of sales of investment require delivery of securities within

three days after the transaction date as required by stock exchange regulations.


13/50

THE BANK OF KHYBER

7 CASH AND BALANCES WITH TREASURY BANKS Note 2006 2005

Rupees in '000

In hand

Local currency 147,461 161,558

Foreign currency 30,305 17,623

177,766 179,181

With State Bank of Pakistan in

Local currency current account 7.1 & 7.2 1,256,789 868,450Foreign currency current account 7.2 12,204 7,166

Foreign currency deposit account 7.2 & 7.3 33,805 21,928

1,302,798 897,544

With National Bank of Pakistan in

Local currency current account 93,067 541,663

National prize bonds 900 133

1,574,531 1,618,521

7.1

7.2

7.3

8. BALANCES WITH OTHER BANKS Note 2006 2005

Rupees in '000In Pakistan

On current account 576,224 514,436

On deposit account 8.1 2,951,075 1,901,510

Outside Pakistan

On current account 181,716 74,415

On deposit account 8.2 56,164 29,857

3,765,179 2,520,218

Less: Provision for doubtful placement with a bank 8.3 10,028 10,028

3,755,151 2,510,190

8.1

8.2 These represent placements of funds with banks outside Pakistan, which have been generated through the

foreign currency deposit scheme (FE-25). The placements had been made at the rates ranging from 3.5% to

5.22% per annum (2005: 4.25% per annum) and had maturit ies upto January 17, 2007 (2005: January 19,

2006).

The current account is maintained under the requirements of section 29 of the Banking Companies

Ordinance, 1962 as amended from time to time by the State Bank of Pakistan.

These include accounts maintained for mandatory reserve requirements and such balances are not available

for use in the Bank's operations.

The balance held in the foreign currency deposit account with the SBP represents the 20% (2005: 15%)

reserve requirement for holding FE-25 deposits. The rate of return on this account is 4.32% (2005: 3.29%)

per annum.

These represent short-term deposits with banks and carry mark-up at the rates ranging from 11.50% to

12.68% per annum (2005: 2.50% to 12.50% per annum) and having maturities upto June 28, 2007 (2005:

March 31, 2006).


14/50

THE BANK OF KHYBER

8.3 Provision for doubtful placement with a bank Note 2006 2005

Rupees in '000

Balance as at January 01 10,028 10,028

Charge for the year - -

Reversals - -

Balance as at December 31 10,028 10,028

9. LENDINGS TO FINANCIAL INSTITUTIONS

Repurchase agreement lendings (Reverse Repo) 9.2 & 9.5 310,000 192,190

Placements with financial institutions 9.3 2,194,430 1,361,000

2,504,430 1,553,190

Less: Provision for doubtful placements with financial institutions 9.4 11,000 1,000

2,493,430 1,552,190

9.1 Particulars of lendingIn local currency 2,504,430 1,553,190

In foreign currencies - -

2,504,430 1,553,190

9.2

9.3

9.4 Provision for doubtful placements with financial institutions Note 2006 2005

Rupees in '000

Balance as at January 01 1,000 1,000

Charge for the year 10,000 -

Reversals - -

Balance as at December 31 11,000 1,000

Repurchase agreement lendings (reverse repos) carry interest at the rates ranging from 9.40% to 15% (2005:

7.50% to 13.00%) per annum and had maturities upto June 28, 2007 (2005: January 16, 2006).

These unsecured placements carry interest at rates ranging from 11.20% to 14% per annum (2005: 10.90%

to 14.00% per annum) and have maturities upto March 27, 2007 (2005: March 27, 2006).


15/50

THE BANK OF KHYBER

9.5 2006 2005

Held by Further Total Held by Further Total

bank given as bank given as

collateral collateral

Rupees in '000

Market Treasury Bills - - - 92,190 - 92,190

Pakistan Investment Bonds 115,000 - 115,000 - - -

Others - Listed securities 195,000 - 195,000 100,000 - 100,000

9.6 310,000 - 310,000 192,190 - 192,190

9.6 Aggregate market value of securities held as collateral is Rs.412.462 million as on December 31, 2006 (2005: Rs.. 238.766 million).

2006 2005

Held by Further Total Held by Further Total

10. INVESTMENTS bank given as bank given as

collateral collateral

10.1 Investments by types Rupees in '000

Held for trading securities

Dawood Money Market fund 50,000 - 50,000 - - -

Fully paid ordinary shares in listed compani - - - 338,593 338,593

50,000 50,000 338,593 338,593

Available-for-sale securities

Treasury Bills 1,934,359 1,834,755 3,769,114 1,095,081 1,866,859 2,961,940

Pakistan Investment Bonds 10.1.1 145,210 1,715,000 1,860,210 287,780 1,094,339 1,382,119

National Investment Trust Units 243,476 - 243,476 243,476 - 243,476

Term Finance Certificates 340,039 - 340,039 354,899 - 354,899

UTP AAA Fund 20,000 20,000 - - -

UTP Islamic Fund 15,000 - 15,000 - - -

Meezan Balanced Growth Fund 5,000 - 5,000 5,000 - 5,000

Pakistan Strategic Allocation Fund 4,500 - 4,500 4,500 - 4,500

Pakistan International Element Islamic Fun 30,000 - 30,000 - - -

ABAMCO Composite Fund - - - 30,000 - 30,000

NAMCO Fund 68,673 - 68,673 - - -

AMZ Income Fund 50,000 - 50,000 - - -

Askari Income Fund 50,000 - 50,000 - - -

Alfalah GHP Value Fund 5,000 - 5,000 5,000 - 5,000

Fully paid ordinary sharesOrdinary shares in listed companies 551,039 - 551,039 172,149 - 172,149

Ordinary shares in unlisted companie 80,487 - 80,487 80,487 - 80,487

3,542,783 3,549,755 7,092,538 2,278,372 2,961,198 5,239,570

Held-to-maturity securities

Pakistan Investment Bonds 1,033,651 - 1,033,651 548,232 1,046,357 1,594,589

Wapda Bonds 200,010 - 200,010 200,010 - 200,010

Wapda Sukuk Bonds 75,000 - 75,000 - - -

1,308,661 - 1,308,661 748,242 1,046,357 1,794,599

Associates

Ordinary shares in unlisted compan 10.6 78,229 - 78,229 69,083 - 69,083

78,229 - 78,229 69,083 - 69,083

Investment at cost 4,979,673 3,549,755 8,529,428 3,434,290 4,007,555 7,441,845

Less: Provision for diminution invalue of investments 10.3 38,754 - 38,754 38,754 - 38,754

Investments (Net of Provisions) 4,940,919 3,549,755 8,490,674 3,395,536 4,007,555 7,403,091

Surplus/(deficit) on revaluation of

Available-for-sale securities 23.2 334,728 (260,301) 74,427 556,433 (171,532) 384,901

Surplus/(deficit) on revaluation of

held for trading securities 382 - 382 (89,586) - (89,586)

Total investments at market value 5,276,029 3,289,454 8,565,483 3,862,383 3,836,023 7,698,406

10.1.1

Securities held as collateral

against lending to financial

Pursuant to the requirements of BSD Circular no 7, dated May 30, 2006, which allowed a one time reclassification of securities between the

three catagories, the bank reclassified Pakistan Investment Bonds amounting to Rs. 537 million from "Held to Maturity" to "Availale for Sale"


16/50

THE BANK OF KHYBER

10.2 Investments by segments Note 2006 2005

Rupees in '000

Federal Government Securities:

Market Treasury Bills 10.2.2 3,769,114 2,961,940

Pakistan Investment Bonds 10.2.3 2,893,861 2,976,708

6,662,975 5,938,648

Fully Paid up Ordinary Shares:Listed Companies 551,039 510,742

Unlisted Companies 158,716 149,570

709,755 660,312

Term Finance Certificates:

Listed TFCs 216,185 203,485

Unlisted TFCs 123,855 151,414

340,040 354,899

Other Investments

National Investment Trust Units 10.5 243,476 243,476

WAPDA Bonds 10.2.4 200,010 200,010WAPDA Sukuk Bonds 10.2.5 75,000 -

UTP Islamic Fund 15,000 -

UTP AAA FUND 20,000 -

Meezan Balanced Growth Fund 5,000 5,000

Pakistan Strategic Allocation Fund 4,500 4,500

Pakistan International Element Islamic Fund 30,000 -

Alfalah GHP Value Fund 5,000 5,000

Dawood Money Market Fund 50,000 -

NAMCO Fund 68,672 -

AMZ Income Fund 50,000 -

Askari Income Fund 50,000

ABAMCO Composite Fund - 30,000

10.2.6 816,658 487,986

Total investment at cost 8,529,428 7,441,845

Less: Provision for diminution in value of invest 10.3 38,754 38,754

Investments (Net of Provisions) 8,490,674 7,403,091

Surplus on revaluation of Available-for-

sale securities 23.2 74,427 384,901

Deficit on revaluation of held for trading

securities 382 (89,586)

Total investments at market value 8,565,483 7,698,406

10.2.1

10.2.2

held by the Bank to meet Statutory Liquidity Requirements (SLR) of the SBP calculated on the

basis of time and demand liabilities.

Market Treasury Bills have a market value of Rs. 3,764.489 million (2005: Rs. 2,955.941 million).

These carry returns ranging from 8.49% to 9% per annum (2005: 5.85% to 8.79% per annum) and

have maturity periods ranging between Jan 2007 to December 2007 (2005: March 2006 to

December 2006). These are held with the SBP and are eligible for rediscounting.


17/50

THE BANK OF KHYBER

10.2.3

10.2.4

10.2.5

10.2.6

10.3 Particulars of provision Note 2006 2005

Opening balance 38,754 40,767

Charge for the year - -

Reversals - (2,013)

Closing Balance 10.3.1 38,754 38,754

10.3.1 Particulars of provision in respect of type and segment

Available-for-sale securities

Ordinary shares in listed companies 8,267 8,267

Ordinary shares in unlisted companies 30,487 30,487

38,754 38,754

Rupees in '000

The WAPDA bonds carry a return of 8.75% per annum (2005: 8.75% per annum) and are maturing

in March 2008 (2005: March 2008).

The market value of these open ended mutual fund units aggregated to Rs. 1,012.94 million (2005:

Rs. 831.992 million) as at December 31, 2006.

PIBs under 'available for sale' category have a market value of Rs. 1,603.691 mill ion (2005: Rs.

1,209.346 million). These PIBs carry returns ranging from 7% to14% per annum (2005: 6% to13%

per annum) and have maturity periods ranging between October 2008 to October 2013 (2005:

October 2006 to October 2013). These are held with the SBP and are eligible for rediscounting.

WAPDA Sukuk Bonds carry return of 10.89% per annum (2005: Nil) and are maturing in October

2012 (2005: Nil)


18/50

THE BANK OF KHYBER

10.4

10.5

10.6 Investment in associate Note 2006 2005

Taurus Securities Limited

Number of shares held - number 4,500,001 4,500,001

Value of investment - rupees in thousands 78,229 69,083

Percentage of investment - percentage 33.33 33.33

Break-up value per share - rupees 17.38 15.35

Latest available financial statements December 31, 2006 December 31, 2005

Name of Chief Executive Mr. Zia Hussain Mr. Zia Hussain

(i) to enter into an agreement with NIT for a stagged redemption spread over period of several years with an initial payment from proceeds of sale

of PICIC and PSO shares.

The bank has not yet conveyed its concurrance to any of the above referred options as the matter is under consideration by the management.

The cost of investment in 16,055,670 units of National Investment Trust (NIT) as of December 31, 2006 aggregates to Rs. 243.476 million (2005: 243.476

million). The Government of Pakistan through a letter of comfort (LOC) dated August 8, 2001 has undertaken to facilitate NIT in redeeming these units at

Rs. 13.70 per uni t on the condition that the Bank shall continue to hold all the uni ts for a minimum period of five years from the date of the letter of

comfort. An amount of Rs. 476.621 million is included in surplus on revaluation of securities as at December 31, 2006 (2005: Rs. 414.806 million) which

represents the difference between the repurchase price of NIT units and their cost.

The Government of Pakistan (Ministry of Privitisation) through its letter ref. 2(10)Bkg/PC/97 dated November 27, 2005 had given options to the LOC

holders to either acquire proportionate management rights and manage its portion of funds as a separate split fund or to continue with the existing

arrangement wherein the funds continue to be managed by National Investment Trust Limited (NITL). In response, the Bank's management has

requested the Government of Pakistan (Ministry of Privitisation) to waive off the LOC status on its NIT units and conveyed that accordingly its holding may

be split and privatised in accordance with the terms mentioned in the aforementioned instructions for Non-LOC holders. A response from the Government

of Pakistan (Ministry of Privitisation) is awaited. However, Government of Pakistan vide its letter dated December 22, 2006 has extended the LOC status

upto June 30, 2007. Subsequent to year end, NIT through its letter dated February 23, 2007 has given following options to LOC holders:

Information relating to investment in ordinary shares / certificates of listed and unlisted companies / mutual funds, term finance certificates and bonds,

which is required to be disclosed as part of the financial statements under State Bank of Pakistan's BSD Circular No. 4 dated February 17, 2006, is

disclosed in Annexure "C" to these financial statements. Information relating to quality of available for sale secur ities is given in annexure "D"

Option (a): LOC holders may exercise their option of acquiring the right to manage their funds at same terms as determined by a competitive biddingprocess for auction of the non-LOC management rights with no discount.

Option (b): In the event the above option is not acceptable the LOC holders may either choose:

(ii) to excerise the redemption option before the expiry of current LOC date with immediate payment at a discount of 10% over and above the

normal procedure.


19/50

THE BANK OF KHYBER

10.6.1 Carrying value of associate under equity method of accounting Note 2006 2005

(Rupees in '000)

Carrying value of investment as at January 01 69,083 54,777

Share in profit before taxation of the associate for

the year ended December 31 12,207 18,211

Share in charge for taxation 27 (3,061) (3,905)

Carrying value of investment as at December 31 78,229 69,083

-10.6.2 Associate key information

Assets 674,212 1,048,720

Liabilities 439,502 842,682

Revenue for the year 109,975 132,955

Profit before taxation for the year 37,855 51,500

Profit after taxation for the year 28,672 41,691

10.7

The effects of the said restatements on the prior year financial statements are tabulated below:

(Rupees in '000)

Decrease in advances under CFS 119,736

Increase in investments 75,782

Decrease in deficit on revaluation on securities 45,632

Decrease in profit 89,586

Decrease in CFS income 37,619

Decrease in income on Reverse Repo 2,485

Increase in Capital gains 31,739

Increase in Dividend income 8,365

Considering the above, the bank has appointed an independent firm of Chartered Accountants to carry out special audit of its Treasury and Investment

Division for the period from January 01, 2005 to September 30, 2006. Pending completion of the special audit, further misclassification/adjustment, if any,

would be accounted for in the subsequent year. However, the management believes that with the aforesaid adjustment and restatements, it is not

probable that a material misstatement relating to prior or current financial statements would have remained unidentified and unadjusted.

Similarly a portfolio of investments costing Rs. 218.856 million having market value of Rs.173.224 million was misclassified as Available forsale instead

of Held for Trading as on December 31, 2005 which resulted in overstatement of profit and loss for the year then ended by Rs. 45.6 million.

In addit ion to this CFS income and income on securit ies purchased under resale agreements (Reverse Repo) was overstated by 37.62 mil lion and

Rs.2.49 mil lion in 2005 while capital gains and dividend income was understated by 31.74 mil lion and 8.4 mil lion respectively. The same has been

reclassified accordingly.

During the year ended December 31, 2005 and during the period upto September 30, 2006, the bank has been carrying out investment trading

transactions in respect of a portfolio which was owned by the bank but classified and treated as Advances under Continuous Funding System (CFS) in

the year ended December 31, 2005 and during the period from January 2006 to September 30, 2006 as Advances underCFS and partially as Other

Assets. Upon identif ication of the above matter by the management in September 2006, the bank carried out a review of its treasury transactions,

investment portfolio and advances under CFS and as a result transferred an aggregate portfolio of Rs 132.12 million, having a market value amounting toRs.107.52 million to Investments Account from Advances under CFS and Other assets. Consequently, the unrealized loss amounting to Rs.24.6

million relating to the above portfolio has also been recognized in the Profit and Loss Account for the current year. Further, the financial statements for the

year ended December 31, 2005 have also been restated to adjust the misclassification of investments which were previously classified as Advances

under CFS.


20/50

THE BANK OF KHYBER

11. ADVANCES Note 2006 2005

Rupees in '000

Loans, cash credits, running finances, etc.

In Pakistan 11.8 10,140,190 10,460,232

Outside Pakistan - -

10,140,190 10,460,232Net investment in ijarah

In Pakistan 11.2 386,600 316,597


386,600 316,597

Bills discounted and purchased (excluding treasury bills)

Payable in Pakistan 94,100 191,551

Payable outside Pakistan 485,803 472,212

579,903 663,763

Financing in respect of continuous funding system 2,022 691,814

Advances - gross 11,108,715 12,132,406Less: Provision for non-performing advan 11.4 1,889,324 1,542,669

Advances - net of provision 9,219,391 10,589,737

11.1 Particulars of advances - net of provision

11.1.1 In local currency 9,219,391 10,589,737


9,219,391 10,589,737

11.1.2 Short Term ( for upto one year) 3,564,233 3,564,233

Long Term ( for over one year) 5,655,158 7,025,504

9,219,391 10,589,737


21/50

THE B

11.2 Net investment in Ijarah 2006 2005

Not later Later than Over Total Not later Later than Over Tota

than one one and less five than one one and less five

year han five years years year than five years years

-----------------------------------------------------------Rupees in '000-----------------------------------------------------------------

Ijarah rentals receivable 161,519 224,287 2,636 388,442 117,798 203,678 2,595 324

Residual value 153 52,287 - 52,440 295 39,808 - 40Minimum ijarah rentals 161,672 276,574 2,636 440,882 118,093 243,486 2,595 364

Profit for future periods 23,524 30,039 719 54,282 24,048 23,459 70 47

Net investment in ijarah 138,148 246,535 1,917 386,600 94,045 220,027 2,525 316

11.3

Category of Classification Domestic Overseas Total Domestic Overseas Total Domestic Overse

Substandard 293,387 - 293,387 17,184 - 17,184 17,184

Doubtful 284,451 - 284,451 27,080 - 27,080 27,080

Loss 2,609,808 - 2,609,808 1,845,060 - 1,845,060 1,845,0603,187,646 - 3,187,646 1,889,324 - 1,889,324 1,889,324

Category of Classification Domestic Overseas Total Domestic Overseas Total Domestic Overse

Substandard 41,886 - 41,886 3,533 - 3,533 3,533

Doubtful 96,244 - 96,244 26,057 - 26,057 26,057

Loss 2,731,316 - 2,731,316 1,513,079 - 1,513,079 1,513,079

2,869,446 - 2,869,446 1,542,669 - 1,542,669 1,542,669

*

11.3.1

11.4 Particulars of provision against non-performing advances

Specific General Total Specific Gener

Opening balance 1,542,669 - 1,542,669 1,310,312

Charge for the year 414,138 - 414,138 269,166

Reversals (67,483) - (67,483) (36,809)

Closing balance 1,889,324 - 1,889,324 1,542,669

11.4.1 Particulars of provisions against non-performing advances

In local currency 1,889,324 - 1,889,324 1,542,669

In foreign currencies - - - -

1,889,324 - 1,889,324 1,542,669

11.4.2

11.5 Details of loans amounting to Rs 500,000 and above written off:

2005

(Rupees in '000)

Classified Advances Provision Required Provision

Advances include amounts aggregating to Rs.3,187.646 million ( 2005: Rs.. 2,869.446 million) which have been placed under non-performing status as deta

Rupees in '000

2006

(Rupees in '000)

20052006

Classified Advances Provision Required

The loss category includes balances aggregating Rs. 793.707 million (2005: Rs. 1,075.613 million) forwarded to the National Accountability Bureau for settle

against which a provision of Rs. 631.556 million (2005: Rs. 677.869 million) is held in accordance with the Prudential Regulations of SBP.

Provision

Adjusted for any amount of liquid assets realizable without recourse to a court of law and the forced sale value of any mortgaged/pledged securities as val

valuers.

In terms of sub-section (3) of section 33A of the Banking Companies Ordinance, 1962 a statement in respect of write off of loans or any other financial reli

above allowed to a person(s) in Pakistan during the year ended December 31, 2006 is enclosed as annexure 'B' to the notes to these financial statements.

As of December 31, 2006 the Bank has modified the method of computing provision against non-performing advances pursuant to the changes in the Pru

issued by SBP. In accordance with the revisions in the regulations, the criteria has been amended as follows:

- provision required under the substandard category has been raised to 25% from 10% previously

- the benefit of forced sales value is allowed for financing facilities of Rs. 10 million and above as compared to Rs. 5 million and above previously, for all

housing finance facilities under consumer financing.

The incremental provision resulting from the aforementioned revisions amounts to Rs. 65.685 million. Had the effect of the aforementioned revisions no

advances (net of provisions) would have been higher by Rs. 65.685 million whereas the profit for the year would have been higher by Rs.65.685 million

contingent liabilities as mentioned in Note 20.6 would have been lower by Rs. 22.332 million.


22/50

THE B

11.6 Note 2006 200

Debts due by directors, executives or officers of the bank or any of

them either severally or jointly with any other persons

Balance at beginning of year 303,072 265

Loans granted during the year 55,000 43

Repayments (4,755) (5

Balance at end of year 353,317 303

12. OPERATING FIXED ASSETS

Capital work-in-progress 12.1 5,919 6

Property and equipment 12.2 133,850 130

Intangible assets 12.3 2,233 4142,002

12.1 Capital work-in-progress

Civil works 1,237

Office equipments 1,182 5

Advances to suppliers and contractors 3,500

5,919

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

(Rupees in '000)


23/50

THE B

12.2 Property and equipment

COST DEPRECIATION

Rupees in '000

Free hold land 41,558 - 41,558 - - - 41,558

Building on free hold land 11,620 - 11,620 7,554 406 7,960 3,660 1

Building on other land 1,964 - 1,964 1,457 51 1,508 456 1

Furniture and fixture 65,811 5,593 70,309 34,287 4,585 38,011 32,298 10

(1,095) (861)

Office equipment 88,861 13,880 102,670 52,860 8,198 60,993 41,677 10

(71) (65)

Vehicles 41,108 1,712 38,471 24,840 3,271 24,545 13,926 2

(4,349) (3,566)

Library books 460 87 547 249 23 272 275 1

251,382 21,272 267,139 121,247 16,534 133,289 133,850

(5,515) (4,492)

COST DEPRECIATION

Rupees in '000

Free hold land 41,558 - 41,558 - - - 41,558

Building on free hold land 11,620 - 11,620 7,102 452 7,554 4,066 1

Building on other land 1,964 - 1,964 1,401 56 1,457 507 1

Furniture and fixture 54,829 11,464 65,811 29,947 4,647 34,287 31,524 10

(482) (307)

Office equipment 75,016 14,359 88,861 43,966 9,057 52,860 36,001 10

(514) (163)

Vehicles 36,497 7,914 41,108 23,401 4,117 24,840 16,268 2

(3,303) (2,678)

Library books 453 7 460 225 24 249 211 1

221,937 33,744 251,382 106,042 18,353 121,247 130,135

(4,299) (3,148)

As at

January 01,

2006

As at

December

31, 2006

Additions /

(Deletions)Book Value

As at

December

31, 2006

Charge for the

year /

(Adjustment)

As at

January 01,

2006

Depre

Rate

Book ValueDepre

Rate

As at

January 01,

2005

Additions /

(Deletions)

As at

December

31, 2005

As at

January 01,

2005

Charge for the

year /

(Adjustment)

As at

December

31, 2005


24/50

THE B

12.2.1 Reconciliation of net book values

Free hold

land

Building on

free hold land

Building on

other land

Furniture

and fixture

Office

equipment

Vehicles Library

books

To

---------------------------------------------------------------------Rupees in '000-----------------------------------------------------------

Net book value as at

January 01, 2005 41,558 4,518 563 24,882 31,050 13,096 228

Additions - Cost - - - 11,464 14,359 7,914 7

Deletions

Cost - - - (482) (514) (3,303) -

Depreciation - - - 307 163 2,678 -

Depreciation charge - (452) (56) (4,647) (9,057) (4,117) (24)


December 31, 2005 41,558 4,066 507 31,524 36,001 16,268 211

Additions - Cost - - - 5,593 13,880 1,712 87

Deletions

Cost - - - (1,095) (71) (4,349) -

Depreciation - - - 861 65 3,566 -

Depreciation charge - (406) (51) (4,585) (8,198) (3,271) (23)


December 31, 2006 41,558 3,660 456 32,298 41,677 13,926 275

12.2.2 None of the operating fixed assets having original cost of Rs. 1 million or book value of Rs. 0.250 million which ever is less, were disposed off during the year

12.2.3 Building on other land represents the cost of building constructed on a plot of land which is owned by the Government of N.W.F.P.

12.2.4 The fair values of operating fixed assets according to estimates of the management are not materially different from their carrying amounts.

12.3 Intangible assets

COST AMORTIZATION

Rupees in '000

Computer software 11,759 - 11,759 7,757 1,768 9,525 2,234 2

11,759 - 11,759 7,757 1,768 9,525 2,234

COST AMORTIZATION

Rupees in '000

Computer software 11,759 - 11,759 5,556 2,201 7,757 4,002 2

11,759 - 11,759 5,556 2,201 7,757 4,002

12.3.1 Reconciliation of net book values

Net book

value as at

January 01,2005

Amortization

charge

Net book

value as at

December31, 2005

Amortizatio

n charge

Net book

value as at

December 31,2006

Computer Software 6,203 (2,201) 4,002 (1,768) 2,234

12.3.2 The cost of computer software includes the cost of fully amortized software amounting to Rs. 2.920 million (2005: Rs. 2.920 million) which is still in use.

As at

January 01,

2006

Additions /

(Deletions)

As at

December

31, 2006

As at

January 01,

2006

Charge for the

year

As at

December

31, 2006

Book ValueAmort

Rate

Rupees in '000

Amort

Rate

As at

January 01,

2005

Additions /

(Deletions)

As at

December

31, 2005

As at

January 01,

2005

Book Value

As at

December

31, 2005

Charge for the

year


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THE BANK OF KHYBER

13. DEFERRED TAX ASSETS Note 2006 2005

Taxable temporary differences

Accelerated depreciation for tax purposes (7,486) (2,704)Deferred tax in respect of investment in associate (11,630) (8,429)

(19,116) (11,133)Deductible temporary differences

Provision for balances with other banks 3,510 3,510Provision for placements with financial institutions 350 350

Provision for lendings to financial institutions 3,500 -

Provision for investments 10,670 10,670

Revaluation of investment 91,400 65,205

Provision for other assets 4,367 4,367

Taxable losses - -

Stabilization reserve 1,607 373

115,404 84,475Net deferred tax asset as at December 31 96,288 73,342

14. OTHER ASSETS

Income/ Mark-up accrued

In local currency 393,597 266,948

In foreign currency - -

Advances, deposits, advance rent and 14.1 313,417 46,057

Advance taxation (payments less provisions) 619,288 568,633

Receivable on account of sale of securities - 7,214

Receivable from gratuity fund 32.2 21,952 857

Prepaid exchange risk fee 14.2 41 40

Stationery and stamps on hand 4,529 4,861

Inventories 14.3 7,101 -

Others 17,537 9,213

1,377,462 903,823Less: Provision held against other ass 14.4 12,478 12,478

1,364,984 891,345

14.1

14.2

14.3

14.4 Provision held against other assets Note 2006 2005


Charge for the period - -

Reversal for the period - -

Closing balance 12,478 12,478

Rupees in '000

The amount represents the cost of goods purchased by the agents of the bank

under agency agreements to be sold under murabaha arrangements.

Rupees in '000

The amount includes Rs. 200.002 million (2005: Rs. 2.000 million) on account of

funds disbursed under agency agreements for purchase of goods to be sold under

Exchange Risk Fee is being amortized over the terms of the respective forward

exchange contracts. According to the SBPs Foreign Exchange (FE) Circular No. 7

dated March 18, 2002, effective April 1, 2002 no fresh forward covers or their


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THE BANK OF KHYBER

15. BILLS PAYABLE Note 2006 2005

Rupees in '000

In Pakistan 150,435 119,308


150,435 119,308

16. BORROWINGS

In Pakistan 4,280,227 4,313,378

Outside Pakistan 45,582 60,776

4,325,809 4,374,154

16.1 Particulars of borrowings with respect to Currencies

In local currency 4,325,809 4,374,154


4,325,809 4,374,154

16.2 Details of borrowings Secured / Unsecured

Secured

Borrowings from State Bank of Pakistan

Under export refinance 16.2.1 380,472 239,615

Repurchase agreement b 16.2.2 3,549,755 3,731,573

3,930,227 3,971,188

Unsecured

Call borrowings 16.3 350,000 342,190

Foreign credit lines 16.4 45,582 60,776

395,582 402,966

4,325,809 4,374,154

16.2.1

16.2.2

16.3

16.4 Foreign credit lines Note 2006 2005

Rupees in '000


Repaid during the year (15,194) (10,130)

Closing balance 16.3.1 45,582 60,776

16.4.1

The Bank has entered into agreements for financing carrying markup

ranging from 6.5% to 7.5% (2005: 3.5% to 7.5%) with the State Bank of

Pakistan for extending export finance to customers. According to the

terms of the respective agreements, the SBP has the right to receive theoutstanding amount from the Bank at the date of maturity of the finances

by directly debiting the current account maintained by the Bank with the

Repurchase agreements with financial institutions carry interest at rates

ranging from 8.60% to 9.00% per annum (2005: 8.00% to 8.55% per

annum) and having maturities upto March 14, 2007 (2005: March 28,

The amount of facility granted by Kreditanstalt fur Wiederaufbau (KfW) is

DM 5 million which was fully availed upto December 31, 1999. The facility

from KfW has been received through the Government of N.W.F.P., at an

annual interest rate of 11% in accordance with the Subsidiary Loan

Agreement dated August 20, 1996 entered into between the Bank and

the Government of N.W.F.P.The principal shall be repaid in Pakistan

These borrowings from a bank carry interest at the rate of 11.70 % per

annum (2005: 10.90% per annum) and have maturit ies upto March 30,


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THE BANK OF KHYBER

17. DEPOSITS AND OTHER ACCOUNTS Note 2006 2005

Rupees in '000Customers

Fixed deposits 7,874,269 6,574,778

Savings deposits 7,474,100 6,824,504Current accounts - Non-remunerative 3,073,370 3,558,289

Call deposits 178,739 110,121

Margin and sundry deposits 471,454 375,37219,071,932 17,443,064

Financial Institutions

Remunerative deposits 3,783 7,087

Non-remunerative deposits 849 2,019

4,632 9,10619,076,564 17,452,170

17.1 Particulars of depositsIn local currency 18,884,238 17,304,731

In foreign currencies 192,326 147,509

19,076,564 17,452,240

18. OTHER LIABILITIES

Mark-up/ Return/ Interest payable

In local currency 350,471 324,016

In foreign currency 261 126

Unearned commission and income on bills discounted 16,144 12,322

Accrued expenses 9,438 32,739

Branch adjustment account 42,937 35,988

Share subscription money refund 1,358 -

Mark-up in suspense 18.1 105,049 105,678

Deferred income on murabaha 42,149 63,137Security deposits against ijarah 52,440 40,103

Charity payable 126 70

Others 9,123 17,354629,496 631,533

18.1 This balance is stated net of mark-up accrued aggregating Rs. 940.505 million (2005: Rs. 946.214

million) against non-performing loans.


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THE BANK OF KHYBER

19 SHARE CAPITAL

19.1 Authorized Capital

2006 2005 Note 2006 2005

Number of shares Rupees in '000

800,000,000 250,000,000 Ordinary shares of Rs.10 each 8,000,000 2,500,000

19.2 Issued, subscribed and paid up

Ordinary shares

Fully paid in cash

75,000,000 75,000,000 Opening balance 750,000 750,000

40,991,500 - Issued during the year 409,915 -

115,991,500 75,000,000 1,159,915 750,000

Issued as fully paid bonus shares

48,103,448 48,103,448 Opening balance 481,034 481,034

36,000,000 - Issued during the year 360,000 -

84,103,448 48,103,448 841,034 481,034

200,094,948 123,103,448 19.3 & 19.4 2,000,949 1,231,034

19.3

19.4

20. SURPLUS/(DEFICIT) ON REVALUATION OF SECURITIES Note 2006 2005Rupees in '000

Surplus on revaluation of available-for-sale securities

Surplus/(deficit) on revaluation of:

Federal government securities (261,144) (178,771)

Fully paid up ordinary shares - quoted (139,271) (26,089)

Other investments 474,842 589,761

10.1 74,427 384,901

Deferred tax asset 91,400 65,205

165,827 450,106

The Bank is in the process of raising its paid up capital to Rs. 4 billion as according to BSD Circular No. 06 dated October

28, 2005 the Bank is required to raise its share capital to Rs 3 billion by December 31, 2006 and Rs. 4 billion by December

31, 2007. The Bank through its letter BOK/FD/06/439 dated November 18, 2006 applied to the SBP for relaxation of therequirement as it intends to offer 100 percent right shares. The SBP vide its letter BSD/SU-1/608/722/2006 dated December

16, 2006 accepted the Banks request and extended the period of compliance with the aforementioned requirement til l

January 15, 2007. Subsequently, the SBP has granted further extension upto March 30, 2007 vide its letter BSD/SU-

1/608/271/2007 dated February 06, 2007 in response to the Bank's letter dated December 26, 2006 for further extension.

At December 31, 2006 the Government of N.W.F.P., held 130,580,604 (2005: 107,100,000) ordinary shares of Rs. 10 each.

The Bank has issued letter of rights on February 26, 2007 to the shareholders for payment by March 30, 2007.This right

issue will raise the paid-up capital of the Bank to over Rs. 4 billion which, in addition to meeting the minimum capital

requirements for the year ended December 31, 2006, will also meet the minimum capital requirements for the year ending

December 31, 2007.


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THE BANK OF KHYBER

21. CONTINGENCIES AND COMMITMENTS Note 2006 2005

Rupees in '000

21.1 Direct Credit Substitutes

Government 49,204 49,204

Banks 73,749 73,749

Others 66,704 89,104189,657 212,057

21.2 Transaction-related Contingent Liabilities

Guarantees favouring:

Government 1,878,065 1,966,507

Banks - 82,062

Others 1,323,221 1,063,489

21.2.1 3,201,286 3,112,058

21.2.1

21.3 Trade-related Contingent Liabilities 2006 2005

Rupees in '000

Letters of credit

Sight 444,436 612,149

Usance 267,160 325,604

711,596 937,753

Acceptances 64,849 49,666

776,445 987,419

21.4 Commitments in respect of forward exchange contracts

Purchase 26,812 4,819

Sale 127,256 -

21.4.1

21.5 Other commitments

Sale of mutual funds 51,061 -

Bills for collection

Inland bills 27,073 48,610

Foreign bills 47,226 42,456

74,299 91,066

125,360 91,066

21.6 Commitments to extend credit

The above amounts include expired letters of guarantee aggregating to Rs. 497.389 million as at December 31,2006 (2005: Rs. 500.976 million) for which the formalities relating to return of the original documents are in

The Bank makes commitments to extend credit in the normal course of its business but these being revocable

commitments do not attract any significant penalty if the facility is unilaterally withdrawn.

All forward exchange contracts are backed by trade related transactions to meet the needs of the Bank's clients

to generate trading revenues and, as part of its asset and liability management activity, to hedge its own

exposure to currency risk. At the year end, all foreign exchange contracts have a remaining maturity of less than


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THE BANK OF KHYBER

21.7 Taxation

21.7.1 Bank

21.7.1.1

21.7.1.2

21.8

21.9

There are a number of legal proceedings outstanding against the Bank which include counter claims and counter suits filed by the

borrowers as at December 31, 2006. No provision has been made in respect of these as the management of the Bank is confident that it

is unlikely that any significant loss will arise.

The State Bank ofPakistans Committee for Resolution of Cases (CRC) and Committee for Revival of Sick Industrial Units (CRSIU) have

finalised the settlement of certain non performing loans of the Bank having principal amounting to Rs. 340.015 million and overdue

markup amounting to Rs. 191.662 million for an aggregate amount of Rs. 137.156. The decision of the CRC in two of the aforementioned

cases have been upheld by the Peshawar High Court (Original Banking Jurisdiction). The Bank has filed writ petitions against three

cases in the Division Bench of the Peshawar High Court and against one case in the Lahore High Court, Rawalpindi Bench. The Bank is

in the process of fil ing a writ petition in one of the cases in the Sindh High Court and in another case the Peshawar High Court has

already considered the CRSIU decision in the normal legal proceeding undertaken by the Bank against the customer. Based on the

advise of its respective legal counsels the management of the Bank is confident that the aforementioned cases shall be decided in its

favour and therefore no further provision has been made for an aggregate amount of Rs. 33.819 million.

Assessments of the Bank have been finalized upto and including the assessment year 2002-2003 (accounting year ended December 31,

2001). While finalizing the assessments for the assessment years 1994-95 to 2002-2003 the Deputy Commissioner of Income Tax

(DCIT) has made additions to income on account of mark-up taken to reserve in accordance with the requirements of Prudential

Regulations amounting to Rs. 167.886 million and on account of provisions against nonperforming advances charged to income

amounting to Rs. 577.863 million resulting in additional tax demands of Rs. 98.069 million and Rs. 329.464 million respectively. Further,

additional tax demands aggregating Rs. 507.799 million may arise in respect of disallowance of provisions against nonperformingadvances for the tax years 2003, 2004, 2005 and 2006 [accounting years ended December 31, 2002, 2003, 2004, 2005 and 2006.

The management of the Bank, based on the advice of its tax consultant, is confident that the appeals filed in respect of the

aforementioned assessment years will be decided in the Banks favour. Accordingly, no provision has been made in the financial

statements of the Bank in respect of the aggregate amount of Rs 957.113 million referred above.

The Bank had established The Bank of Khyber Employees Gratuity Fund (the fund) through a trust deed dated January 1, 2001. The

CIT has granted approval to the fund in accordance with the requirements of the Sixth Schedule to the Income Tax Ordinance, 2001 with

effect from June 6, 2003.

The Bank while calculating the tax provisions for the years ended December 31, 1999 and 2000 has claimed the gratuity expenditureaggregating Rs 19.684 million as an allowable deduction having an aggregate tax impact of Rs 11.417 million which was disallowed.

However, while finalizing the assessment for the accounting year ended December 31, 2001 the amount claimed as gratuity expenditure

was allowed by the assessing authorities. The management of the Bank, based on the advice of its tax consultant, is confident that based

on the aforementioned assessment for the accounting year ended December 31, 2001 the amounts claimed for the years ended

December 1999 and 2000 will be allowed by the assessing authorities and therefore, no provision has been made for the aforementioned

tax effect of the gratuity expenditure claimed.


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THE BANK OF KHYBER

22. MARK-UP/RETURN/INTEREST EARNED Note 2006 2005

Rupees in '000

On Loans and advances to

Customers

Profit on murabaha financing 22.1 55,219 43,376

Mark-up/Return/Interest Earned on other facilities 859,208 595,298

914,427 638,674

Financial Institutions 74,947 77,036989,374 715,710

On Investments in

Available for sale Secur ities 439,428 306,441

Held to Maturity Securities 96,919 133,348

536,347 439,789

On Deposits with financial institutions 395,863 212,321

On Securities purchased under resale agreements 21,751 48,502

1,943,335 1,416,322

22.1 Profit on murabaha financing

Murabaha sale price 553,597 1,982,448Less: purchase price 22.3 486,912 1,884,605

66,685 97,843

Less: deferred murabaha income 11,466 54,467

55,219 43,376

22.3 Purchase price

Opening stock - -

Purchase price 494,013 1,884,605

Less: Closing stock 7,101 -

486,912 1,884,605

23. MARK-UP/RETURN/INTEREST EXPENSED

Deposits 1,019,502 594,270

Securities sold under repurchase agreements 243,314 236,710

Other short term borrowings 35,845 69,713

Long term borrowings 5,850 6,964

Others 231 428

1,304,742 908,085

24. GAIN / (LOSS) ON SALE OF SECURITIES

Federal Govt. Securities - Pakistan Investment Bonds (6,113) 8,018Shares - Listed 58,607 157,072

Term Finance Certificates 25 18,490

Mutual Funds 12,560 -

65,079 183,580


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THE BANK OF KHYBER

Note 2006 2005

25. OTHER INCOME Rupees in '000

Net profit on sale of property and equipment 634 1,155

Fixed assets adjustment - 147

Others 39,384 23,601

40,018 24,903

26. ADMINISTRATIVE EXPENSES

Salaries, allowances, etc. 173,455 177,311

Charge for defined benefit plan - Gratuity Fund - 13,633

Contribution to defined contribution plan - Provident Fund 8,271 7,589

Rent, taxes, insurance, electricity, etc. 33,873 31,714

Legal and professional charges 5,584 14,443

Communications 22,171 16,754

Repairs and maintenance 4,922 4,667

Stationery and printing 9,042 8,253

Advertisement and publicity 9,297 7,560

Donations 26.1 70 1,000

Auditors' remuneration 26.2 2,714 3,772Depreciation 12.2 16,534 18,353

Amortization 1,768 2,201

Public offer expenses 18,879 -

Brokerage and commission 2,367 2,431

Entertainment 5,506 4,326

Traveling, boarding and lodging 9,830 8,517

Vehicle expenses 21,856 17,013

Newspapers and periodicals 572 521

Training 2,804 3,781

Sports 157 556

Others 22,457 17,174372,129 361,569

26.1

26.2 Auditors' remuneration

Audit fee 750 750

Fee for half-yearly review 325 -

Fee for half-yearly audit - 675

Special certifications and sundry advisory services 1,385 1,905

Out-of-pocket expenses 254 4422,714 3,772

27. The amount represents the penalties imposed by the State Bank of Pakistan.

During the year ended December 31, 2005 donation of Rs. 1 million was paid to Chief Minister's relief fund for earth quake

victims. No directors or his spouse had any interest in donee funds.


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THE BANK OF KHYBER

2006 2005

Rupees in '000

28. TAXATION

Current - for the year

Bank 16,964 13,036

Associate 3,061 3,797

20,025 16,833

Deferred

Bank 27 (883)Associate 3,223 108

3,250 (775)

23,275 16,058

28.1 Current tax charge 16,964 13,036

Deferred tax charge 27 (883)

16,991 12,153

28.2 Relationship between tax expense and accounting profit

Profit before taxation and share of associate 212,658 216,498

Share in associate's profit (net of associate's tax charge) 9,146 14,306221,804 230,804

Tax at the applicable rate of 34% (2005: 38%) 75,413 87,706

Tax effect of reversal of provision (net) for diminution in value of

quoted investments - (765)

Tax effect of dividend income taxed at different rate (35,015) (28,562)

Effect of different tax rates used for current and deferred taxation 2 991

Tax effect of exempt capital gain (24,335) (35,158)

Tax effect of exempt capital gain on Govt securities current year - (3,362)

Others 926 (8,697)

16,991 12,153

29. BASIC AND DILUTED EARNINGS PER SHARE

Profit for the year 201,590 218,651

Weighted average number of ordinary shares #REF! #REF!

Basic and diluted earnings per share - rupees #REF! #REF!

29.1 Basic and diluted earnings per share are the same.

30. CASH AND CASH EQUIVALENTS

Cash and Balance with Treasury Banks 1,574,531 1,618,521

Balance with other banks 3,755,151 2,510,190

Lendings to financial institutions 2,183,430 1,360,000

7,513,112 5,488,711

31. STAFF STRENGTH ---------Numbers----------

Permanent 341 370

Temporary/on contractual basis 122 79

Daily wagers 157 142

620 591


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THE BANK OF KHYBER

32. DEFINED BENEFIT PLAN

32.1

32.2 Reconciliation of payable to defined benefit plan Note 2006

Rupees in '000

Present value of defined benefit obligations 32.3 (129,951)

Fair value of any plan assets 151,903

Net actuarial gains or losses not recognized -

Past service cost not yet recognized -

Any amount not recognized as an asset -

21,952

32.3 Movement in payable to defined benefit plan

Opening balance (124,716)

Current service cost (7,294)

Interest cost (6,560)Actuarial gains/ losses 4,624

Benefits paid during the year 3,994

Closing balance (129,952)

32.4 Amount charges to profit and loss

Current service cost (7,294)

Interest on obligation (6,560)

Expected return on plan assets 12,722

Actuarial gains/(losses) recognized in the year 3,578

Transitional surplus 1,645

4,091

32.5 Movement in net asset

Net asset at the start of year 857

Net expense recognized in the financial statement 1,645

Contribution during the period 4,624

Net asset at the close of year 7,126

32.6 Actual return on plan assets 16,300

33. DEFINED CONTRIBUTION PLAN

During the year the Bank has contributed Rs. 8.271 million (2005: Rs. 7.589 million) to the provident fund.

General description of the type of defined benefit plan and the accounting policy for recognizing actuarial gains and losses

are disclosed in Note 6.9.1 to these financial statements.


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THE BANK OF KHYBER

34. COMPENSATION OF DIRECTORS AND EXECUTIVES

Managing Director Directors Executives

2006 2005 2006 2005 2006 2005

Fees

Managerial remuneration 2,289 800 300 300 - -

Charge for defined benefit plan - - - -

Contribution to defined contribution plan 43 - - - -

Rent and house maintenance 902 412 - - - -Utilities 122 141 - - - -

Medical 55 52 - - - -

Bonus 36 35 - - - -

Conveyance - - - -

Others (to be specified, if material) 401 87 - - - -

3,848 1,527 300 300 - -

Number of persons 2 2 1 1 - -

34.1

34.2

35. FAIR VALUE OF FINANCIAL INSTRUMENTS 2006 2005

Book value Fair value Book value Fair value

35.1 On-balance sheet financial instruments

Assets

Cash balances with treasury banks 1,574,531 1,574,531 1,618,521 1,618,521

Balances with other banks 3,755,151 3,755,151 2,510,190 2,510,190

Lending to financial institutions 2,493,430 2,493,430 1,552,190 1,552,190

Investments

Balance Sheet2006

Documents

Transcript of Balance Sheet2006