the punjab provincial cooperative bank limited … · the punjab provincial cooperative bank...

BALANCE SHEETAS AT JUNE 30, 2009

Restated

Note 2009 2008

Rupees in ‘000'ASSETSCash and balances with treasury banks 7 601,882 695,200 Balances with other banks 8 2,017,990 2,230,225 Lending to financial institutions - - Investments 9 451,012 508,762 Advances 10 6,733,775 7,539,306 Operating fixed assets 11 3,705,253 3,712,774 Deferred tax assets - - Other assets 12 202,010 148,229

13,711,922 14,834,496

LIABILITIESBills payable 13 44,305 75,186 Borrowings 14 8,000,000 8,000,000 Deposits and other accounts 15 1,837,175 1,929,185 Sub-ordinated loans - - Liabilities against assets subject to finance lease - - Deferred tax liabilities - - Other liabilities 16 134,690 109,525

10,016,170 10,113,896

NET ASSETS 3,695,752 4,720,600

REPRESENTED BYShare capital 17 434,647 434,155 Reserves 401,727 402,298 Unappropriated (loss) / profit (749,013) 230,058

87,361 1,066,511 Surplus on revaluation of assets 18 3,608,391 3,654,089

3,695,752 4,720,600

CONTINGENCIES AND COMMITMENTS 19 - -

The annexed notes from 1 to 37 form an integral part of these accounts

THE PUNJAB PROVINCIAL COOPERATIVE BANK LIMITED

PROFIT AND LOSS ACCOUNTFOR THE YEAR ENDED JUNE 30, 2009

Note 2009 2008

Rupees in ‘000'

20 1,193,637 984,869

21 1,570,956 618,581

(377,319) 366,288

Provision against non-performing loans and advances - -

Provision for diminution in the value of investments - 3,551 Bad debts written off directly - -

- 3,551

(377,319) 362,737

Fee, commission and brokerage Income 30,223 32,944

Dividend Income 7,386 6,167

Income from dealing in foreign currencies - -

Gain / (loss) on sale of securities - -

Other income 22 39,785 316,282

77,394 355,393

(299,925) 718,130

Administrative expenses 23 678,896 596,293

Other provisions/write offs - -

Other charges 24 250 251

679,146 596,544

Extra ordinary/ unusual items - -

(979,071) 121,586

Taxation - Current 25 - 1,170

- Prior years - -

- Deferred - -

- 1,170

(979,071) 120,416

Unappropriated profit brought forward - restated 230,058 133,776

(Loss)/Profit available for appropriation (749,013) 254,192

26 (225.80) 27.78


Non mark-up/ interest expenses

(Loss)/Profit before taxation

(Loss)/Profit after taxation

(Loss)/earning per share

Total non-markup/interest expenses

Total non-mark-up/interest (expense)/income

Net mark-up/ interest (expense) / income

Mark-up/return/interest earned

Non mark-up/interest income

Net mark-up/ interest (expense)/ income after provisions

Mark-up/return/interest expensed

CASH FLOW STATEMENTFOR THE YEAR ENDED JUNE 30, 2009

Note 2009 2008

Rupees in ‘000'

CASH FLOW FROM OPERATING ACTIVITIES

(Loss)/Profit before taxation (979,071) 121,586

Less: Dividend income (7,386) (6,167)

(986,457) 115,419

Adjustments for non-cash items:

Depreciation 10,980 10,836

Amortization 159 159

Provision Against Non-performing Advances - -

Provision for Diminution in value of investments - 3,551

(Gain) on sale of fixed assets (22) (273,200)

11,117 (258,654)

(975,340) (143,235)

(Increase)/ Decrease in operating assets

Advances 805,531 470,515

Others assets (excluding advance taxation) (46,205) 33,251

759,326 503,766

Increase/ (Decrease) in operating liabilities

Bills Payable (30,881) 35,532

Borrowings from financial institutions - (4,000,000)

Deposits (92,010) (78,460)

Other liabilities (excluding current taxation) 25,165 (76,098)

(97,726) (4,119,026)

(313,740) (3,758,495)

Income tax paid (8,216) 33,327

Net cash flow from operating activities (321,956) (3,725,168)

CASH FLOW FROM INVESTING ACTIVITIES

Dividend income 7,386 6,167

Investments in operating fixed assets (3,593) (12,080)

Capital work in progress 12,447 7,421

Sale proceeds of property and equipment disposed-off 243 345,170

Net cash flow from investing activities 16,483 346,678

CASH FLOW FROM FINANCING ACTIVITIES

Issue of share capital 492 3,804

Dividend paid - -

Medical aid to employees from Common Good Fund (572) (1,680)

Net cash flow from financing activities (80) 2,124

Increase/(Decrease) in cash and cash equivalents (305,553) (3,376,366)

Cash and cash equivalents at beginning of the year 2,925,425 6,301,792

Cash and cash equivalents at end of the year 27 2,619,872 2,925,426


STATEMENT OF CHANGES IN EQUITYFOR THE YEAR ENDED JUNE 30, 2009

Share Statutory Common Reserve for Unappropriated/ Totalcapital reserve Good Consumer profit/(loss)

Fund Finance

Balance as on June 30, 2007 430,351 364,174 5,173 1,480 133,776 934,954

Profit for the year - - - - 120,416 120,416

Transfer to statutory reserve - 30,104 - - (30,104) -

Transfer to reserve for Consumer Finance - - - 2,048 (2,048) -

Transfer to reserve for Common Good Fund - - 1,000 - (1,000) - Issue of share capital 3,804 - - - - 3,804 Medical aid to staff - - (1,680) - - (1,680)

Balance as on June 30, 2008 434,155 394,278 4,493 3,528 221,040 1,057,494

Prior year error (Note - 2) - - 9,018 9,018

Balance as on June 30, 2008 - restated 434,155 394,278 4,493 3,528 230,058 1,066,512

Loss for the year - - - - (979,071) (979,071)

Transfer to statutory reserve - - - - - -

Transfer to reserve for Common Good Fund - - - - - - Issue of share capital 492 - - - - 492 Medical aid to staff - - (572) - - (572)

Balance as on June 30, 2009 434,647 394,278 3,921 3,528 (749,013) 87,361


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

FOR THE YEAR ENDED JUNE 30, 2009

1 STATUS AND NATURE OF BUSINESS

2 PRIOR YEAR ERROR

3 BASIS OF PRESENTATION

4 STATEMENT OF COMPLIANCE

5 BASIS OF MEASUREMENT

6 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

6.1 Cash and cash equivalents

6.2 Revenue recognition

For the purpose of the cash flow statement, cash and cash equivalents comprise cash and balances with

treasury banks and balances with other banks in current and deposit accounts.

Mark-up on advances, fee commission, brokerage and dividend are recognized on receipt basis,

whereas, mark up received on deposits with other banks and mark up paid on deposits with the bank

are recognized on accrual basis.

These financial statements have been prepared in accordance with the International Accounting

Standards (IAS) , as applicable in Pakistan, directives issued by the State Bank of Pakistan, Cooperative

Societies Act 1925 and Cooperative Societies Rules 1927. Wherever, the requirements of the Act, Rules,

or the directives issued by the State Bank of Pakistan differ with the requirements of these IAS, the

requirements of Act, Rules, or the requirements of the said directives take precedence.

These financial statements have been prepared on historical cost convention (receipt basis) in

accordance with the Cooperative Societies Rules 1927, except that free hold land and available for sale

securities have been recognized in these accounts at revalued amounts / accrual basis.

Bank had charged major renovation expenses on its branches to profit and loss account during the

previous years. These expenses related to period from 2006 to 2008. During the year the bank has

classified the expenses in capital work in progress account. Accordingly, prior year figures for

unappropriated profit and capital work in progress has been restated.

NOTES TO THE ACCOUNTS

The Punjab Provincial Cooperative Bank Limited (The Bank) was incorporated in Punjab in the year

1924 as a Cooperative Bank under the Cooperative Societies Act, 1912 (repealed) and commenced its

operations from 1924. It was given status of a Scheduled Bank by the State Bank of Pakistan

w.e.f. November 07, 1955. The Bank is operating under the supervision of Cooperative Department

and State Bank of Pakistan. The objects for which the bank is established are to carry out the

business of agricultural credit and other activities as defined in the Cooperative Societies Act 1925

and its Rules. The Bank operates through its 159 branches in Punjab. Its Head Office is located at

Bank Square, The Mall, Lahore.

These financial statements have been prepared in conformity with the format of financial statements

prescribed by SBP vide BSD Circular No. 04 dated February 17, 2006.

The Punjab Provincial Cooperative Bank LimitedNotes to the Accounts Year Ended June 30, 2009

6.3 Advances

6.4 Investments

Held-for-trading securities

Held-to-maturity securities

Available-for-sale securities

6.5 Operating fixed assets

These are investment securities with fixed or determinable payments and fixed maturity and the Bank

has the positive intent and ability to hold-to-maturity.

These are investments, which do not fall under the held-for-trading or held-to-maturity category.

Investments in quoted securities are valued at market prices prevailing at the terminal date except for

investments in Pakistan Investment Bonds and Government Securities and the difference between the

carrying value (representing cost adjusted for amortization of premium or accretion of discount) and the

revalued amount is recognized in the surplus/deficit on revaluation account as required under BSD

circular No. 10 dated July 13, 2004. Investments in unquoted securities are accounted for at cost. Gain

or loss on disposal is charged to current year's profit and loss account.

These are stated at cost less accumulated depreciation except freehold land which are stated at

revalued amount.

Depreciation is computed over the estimated useful lives of the related fixed assets at the rates

specified in note 11.1 on diminishing balance method, except vehicles which are being depreciated on

straight line method. Full year depreciation is charged on additions while no depreciation is charged on

assets deleted during the year. Profit or loss on disposal of fixed assets is charged to current year's

income.

Advances are stated net of general and specific provisions. General and specific provisions is calculated

as per the Prudential Regulations issued by the State Bank of Pakistan and is charged to profit and loss

account.

Investments are classified on the basis of the intended purpose of holding such investments, which is as

follows:

These are investment securities, which are acquired principally for the purpose of generating profit from

short-term fluctuations in price or dealer's margin.

The Punjab Provincial Cooperative Bank LimitedNotes to the Accounts Year Ended June 30, 2009

6.6 Taxation

6.7 Staff retirement benefits

6.7.1 Defined benefit plan

6.7.2 Defined contribution plan

6.8 Impairment of assets

6.9 Transactions with related parties

6.10 Offsetting

Financial assets and financial liabilities are only offset and the net amount reported in the balance sheet

when there is legally enforceable right to set off the recognized amounts and the Bank intends to either

settle on net basis or to realize the assets and settle the liability simultaneously.

The bank also operates a recognized provident fund scheme for all its regular employees, which is

administered by the board of trustees. Equal monthly contribution of 10% of the basic salary is made in

accordance with the terms of the scheme (only to those staff members who have not opted pension).

The carrying amount of Bank's assets except deferred tax assets are reviewed at each balance sheet

date to determine whether there is any indication of impairment loss. If such indication exists, the

assets recoverable amount is estimated in order to determine the extent of the impairment loss, if any.

Impairment losses are recognized as expense in profit and loss account.

Provision for taxation is based on the assessable income for the year after taking into account tax

credits available, if any, and any under/over provisions in respect of prior years.

The bank operates a funded pension scheme for all its permanent employees. Retirement benefits are

payable to the members of the scheme on completion of prescribed qualifying period of service under

the pension scheme. Contribution of 15% of the basic salary are being made by the bank. The gratuity

is also paid to the employees on the basis of maximum period of service and last basic pay drawn

subject to a maximum of Rs. 125,000 at the end of service.

The transactions with related parties are entered into at arm's length prices using the comparable

uncontrolled price method except for advances to the employees which are extended in accordance

with the industry practice.

The Punjab Provincial Cooperative Bank LimitedNotes to the accounts Year Ended June 30, 2009

Note 2009 2008Rupees in '000'

7 CASH AND BALANCES WITH TREASURY BANKS

In handLocal currency 111,961 155,097

With State Bank of Pakistan inLocal currency current account 7.1 174,018 170,876

With National Bank of Pakistan inLocal currency current account 7.1 269,412 133,942 Local currency deposit account NIDA 7.1 46,491 235,285

601,882 695,200

7.1

8 BALANCES WITH OTHER BANKS

In PakistanOn current account - 211,291 On deposit account 8.1 2,017,990 2,018,934

2,017,990 2,230,225

8.1

2009 2008INVESTMENTS Note Held by Given as Total Held by Given as Total

bank collateral bank collateral---------------------- Rupees in '000' --------------------

9.1 INVESTMENTS BY TYPES:

Available-for-sale securities

Share of Listed Companies 9.4 7,022 - 7,022 7,023 - 7,023

Share of Cooperative Institutions 9.5 3,551 - 3,551 3,551 - 3,551

Held-to-maturity securities

Pakistan Investment Bonds 9.6 300,000 - 300,000 300,000 - 300,000

Provincial Government Securities 9.7 - - - 12,051 - 12,051

Investment at cost 310,573 - 310,573 322,625 - 322,625

Less: Provision for Diminution in value of Investments (3,551) - (3,551) (3,551) - (3,551) Investments (Net of Provisions) 307,022 307,022 319,074 319,074

Add: Surplus on revaluation on Available-for-sale securities 18.2 143,990 - 143,990 189,688 - 189,688

Total investments at market value 451,012 451,012 508,762 508,762

9.2 INVESTMENTS BY SEGMENTS:

Federal Government Securities:- Pakistan Investment Bonds 300,000 300,000

Provincial Government Securities - 12,051

Fully Paid up Ordinary Shares: -Listed Companies 7,022 7,023 -Cooperative Institutions 3,551 3,551 Total investment at cost 310,573 322,625

Less: Provision for diminution in value of investment (3,551) (3,551) Investments (Net of Provisions) 307,022 319,074

Add: Surplus on revaluation on Available-for-sale securities 18.2 143,990 189,688

Total investments at market value 451,012 508,762

These accounts are maintained under the requirements of BSD Circular No.16 and 18 dated August 10, 2002 and March 31, 2001

respectively, issued by the SBP. The NIDA account bears profit @ 2.50% per annum (2008 : 2.50% per annum)

Deposit accounts maintained with the banks bear profit @ 5.00% to 13.00% per annum (2008 :3.00% to 10.50% per annum)


9.3 Quality of Available for Sale Securities

Securities (At market value) Amount Rating Amount Rating

Shares of listed companies

Security Papers Limited 148,457 AAA 188,735 AAA

NIB Bank Limited 1,061 AA- 2,482 AA-

Dawood Lawrencepur Limited 1,481 Unrated 5,454 Unrated

PICIC Insurance Limited 14 A- 40 A-

Total 151,013 196,711

9.4 Shares of Listed Companies

2009 2008 2009 2008

Rupees in '000'

2,051,641 1,578,186 Security Papers Limited 6,708 6,708

68,644 62,404 PICIC - -

35,007 31,825 Dawood Lawrencepur Limited 315 315

2,314 - PICIC Insurance Limited - -

7,023 7,023

9.5. Shares of Cooperative Institutions

2009 2008 Face Value Name of Cooperative Institution 2009 2008

of Shares Rs.

191,876 191,876 10 Coop: Insurance Society of Pakistan 1,919 1,919

460 460 100 National Coop. Supply Corporation 43 43

3,410 3,410 100 Coop: Investment & Management Agency 341 341

71 71 1000 Oberoi Coop: Society Sialkot 71 71

3,041 3,041 100 Shahdara Pioneer Coop: M.P. Society 300 300

7,360 7,360 100 Lahore Central Coop: Store 536 536

10 10 100 Jhelum Distt. Coop: Society 1 1

12 12 1000 All Pakistan Coop: Multi Purpose Society 11 11

129 129 500 Punjab Prov. Coop: Cotton Corp. 65 65

1 1 100 Pakistan Product Coop: Marketing - -

250 250 100 Anjuman Imdad-e-Bahami M.P. Society 12 12

30 30 1000 Pioneer Coop: Leather & Rubber Society 30 30

4 4 500 Punjab Prov. Coop: Marketing 2 2

10 10 100 West Pakistan Coop: Consumer Society 1 1

52 52 500 Sargodha Distt. Coop: Society 18 18

4 4 100 Sialkot Central Coop: Multi Purpose Society - -

200 200 50 Multan Distt. Coop: Multi Purpose Society 8 8

100 100 100 Lyalpur Distt. Coop: Multi Purpose Society 10 10

20 20 100 Lyalpur Distt. Coop: Store 1 1

1,020 1,020 100 Montgomery Coop: Society 102 102

250 250 100 Bahawalpur Coop: Society 25 25

500 500 100 Arifwala Mills Society 45 45

1 1 10 Jhang Coop: Supervising - -

200 200 50 Rawalpindi Multi Purpose Union 10 10

3,551 3,551

9.5.1

At Cost

At CostNumber of shares

The shares of Cooperative Institutions showing nil value is due to amounts rounded off to the nearest thousand. These

shares have value less than a thousand rupee.

Rupees in '000'

2009 2008

Name of Company

Ordinary share of Rs. 10/- each

Number of Shares

-------------- Rs. in '000 -----------


9.6

2009 200810 ADVANCES Rupees in '000'

Loans, cash credits, running finances, etc. In Pakistan 8,177,505 8,983,036 Bills discounted and purchased (excluding treasury bills) Payable in Pakistan 184 184 Advances - gross 8,177,689 8,983,220

Provision for non-performing advances (1,443,914) (1,443,914)

Advances - net of provision 6,733,775 7,539,306

10.1 Particulars of advances (Gross)

10.1.1 In local currency 8,177,689 8,983,220

10.1.2 Short Term ( for upto one year) 4,592,171 4,903,992 Long Term ( for over one year) 3,585,518 4,079,228

8,177,689 8,983,220

10.2

Domestic Overseas Total

Other Assets Especially Mentioned 373,195 - 373,195 - - Substandard 534,695 - 534,695 117,446 117,446 Doubtful 624,367 - 624,367 271,553 271,553 Loss 2,583,478 - 2,583,478 1,496,005 1,054,915

4,115,735 - 4,115,735 1,885,004 1,443,914

10.3

10.4 Particulars of provision against non-performing advances

Specific General Total Specific General Total

Opening balance 1,443,914 - 1,443,914 1,443,914 - 1,443,914

Charge for the year - - - - - -

Closing balance 1,443,914 - 1,443,914 1,443,914 - 1,443,914

10.4.1 Particulars of provisions against non-performing advances

Specific General Total Specific General Total

In local currency 1,443,914 - 1,443,914 1,443,914 - 1,443,914

Pakistan Investment Bonds are purchased for period of 10 years starting from December 14, 2000 with the yield 14% per

annum (2008: 14% per annum).

Advances include Rs. 4,113,247 (thousand) (2008 : 4,228,634 thousand) which have been placed under non-performing status

as detailed below:-

Position is calculated as of 31.03.2008 after taking benefit of collateral in agricultural loans as per Prudential Regulations on

Agricultural Loans & Advances after approval of administrator/BOD.

20082009

Provision

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

2009

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

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

Classified Advances Provision

Required

2009 2008


10.5 PARTICULARS OF WRITE OFFs: 2009 2008Rupees in '000'

10.5.1 Against Provisions - - Directly charged to Profit & Loss account - -

- -

10.5.2 Write Offs of Rs. 500,000 and above - -

Write Offs of Below Rs. 500,000 - - - -

10.6 DETAILS OF LOAN WRITE OFF OF Rs. 500,000/- AND ABOVE

11 OPERATING FIXED ASSETS Note 2009 2008

Rupees in '000'

Capital work-in-progress (Civil Works) 12,447 14,969

Property and equipment 11.1 3,692,806 3,697,805

3,705,253 3,712,774

11.1 Property and equipment

COST DEPRECIATIONOpening Additions/ Closing Opening Charge/ Closing Book Rate ofBalance (Deletions) Balance Balance (Deletion) Balance Revaluation value depreciation

As At As At As At As At Surplus As At %01-07-08 30-06-09 01-07-08 30-06-09 30-06-09

Free hold land 116,907 - 116,907 - - - 3,464,401 3,581,308 - -

Lease hold land - - - - - - - - -

Building on free hold land 126,637 4,913 131,550 43,647 2,289 45,936 - 85,614 2.50-20-

Building on lease hold land 4,286 - 4,286 1,772 - 1,772 - 2,514 -

Furniture and fixture 21,343 623 21,607 13,131 1,850 14,793 - 6,814 20.00 (359) (188)

Electrical, office and 7,289 668 7,868 4,217 744 4,949 - 2,919 20.00 computer equipments (89) (12)

Vehicles 47,825 - 47,825 28,377 6,050 34,400 - 13,425 20.00 - (27)

Telephone Exchange &Conference system 887 - 887 645 49 694 - 193 20.00

Arms & Ammunitions 94 - 94 76 - 76 - 18 - -

Library 1 - 1 - - - - 1 - 325,269 6,204 331,025 91,865 10,982 102,620 3,464,401 3,692,806

(448) (227) 2009 325,269 5,756 331,025 91,865 10,755 102,620 3,464,401 3,692,806

2008 389,263 (63,994) 325,269 85,133 6,732 91,865 3,464,401 3,697,805

In terms of sub-section (3) of Section 33A of the Banking Companies Ordinance, 1962 the Statement in respect of written-off loans or any other financial relief of five hundred

thousand rupees or above allowed to a person(s) during the year ended June, 2008 is NIL.

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


11.2

11.3 Restriction on disposal of assets

The land of Bank were last revalued by independent proffessional valuers in March 2008. The

revaluation was carried out by Arch-e-Decon Consultants (A valuer on approved list of the Pakistan

Banks Association) on the basis of professional assesment of present market values and resulted in

a surplus of Rs. 1.508 Billion. During the year revaluation surplus amounting to Rs. 297.248 million

has been reversed due to sale/adjustment of land. Had there been no revaluation, the carrying

amount of the land would be 116.906 millions (2008:189.322 million).

As discussed in Note 35 to the financial statements, the Government of Punjab vide Clause 1, sub-

clause (v), of the agreement dated September 16, 2009 has restricted the bank from selling

immoveable properties. The Additonal Secretary (Staff) to Chief Secretary through letter #

PA/AS(S)/34/07-505 dated July 20, 2007 has also restricted the sale of properties of the Bank till

such time the merger/restructuring issue of the bank is finalized.


Note 2009 2008

Rupees in '000

12 OTHER ASSETS

Advances, deposits, advance rent and others prepayments 1,778 2,225

Advance taxation (payments less provisions) 40,748 33,013

Branch adjustment account - -

Suspense Account 50,659 10,290

Deferred Costs 159 318

Dissolved bank recoverable 55,992 56,021

Insurance recoverable 22,829 -

Profit recoverable from banks 10,362 8,280

Others 19,483 38,082

202,010 148,229

13 BILLS PAYABLE

In Pakistan 44,305 75,186

14 BORROWINGS

In Pakistan 8,000,000 8,000,000

14.1 Particulars of borrowings with respect to Currencies

In local currency from State Bank of Pakistan 14.3 8,000,000 8,000,000

14.2 Details of borrowings Secured / Unsecured

Secured

Borrowings from State Bank of Pakistan (S.B.P)

Under agriculture credit portfolio 8,000,000 8,000,000

14.3

14.4

15 DEPOSITS AND OTHER ACCOUNTS

Fixed deposits 162,720 165,295

Savings deposits 1,211,328 1,195,243

Current Accounts - Non-remunerative 370,230 399,595

Call Deposits 6,111 2,732

Term Deposits 12,062 4,125

Other deposits 15.1 74,724 162,195

1,837,175 1,929,185

This loan has been sanctioned by the State Bank of Pakistan under Section 17 (6) of the State Bank of Pakistan Act,

1956 for disbursement of agricultural credit. These are secured against the Guarantee of Government of the Punjab.

Mark up payable on this borrowing is 8.9017% per annum (2008: ranges from 7.9677% to 8.9017% per annum).

The bank had been providing agriculture credit to small farmers by borrowing funds from S.B.P since 2001. On July

31, 2007, S.B.P declined further sanction of credit line of Rs. 8 billion due to failure of the bank to carry reforms for

its revamping. The bank was unable to repay the loan and interest accrued thereon due to unavailability of surplus

funds. Government of Punjab being the guarantor has agreed to repay the debt of the bank in terms of the

agreements dated September 16, 2009 entered with the bank and S.B.P. (Note 35)


Note 2009 2008

Rupees in '000'

15.1 Others deposits include staff provident fund and staff security deposits.

15.2 Particulars of deposits

In local currency 1,837,175 1,929,185

16 OTHER LIABILITIES

Mark-up/ Return/ Interest payable in local currency 26,129 16,117

Accrued expenses 815 933

Branch adjustment account 31,222 17,743

Sundry creditors 31,277 31,984

Dissolved banks payable 35,544 35,544

Others 9,703 7,204

134,690 109,525

17 SHARE CAPITAL

17.1 Authorized Capital

2009 2008 2009 2008

Unlimited Unlimited Ordinary shares of Rs.100/- each Unlimited Unlimited

17.2 Issued, subscribed and paid up capital

3,970,740 3,965,820 397,074 396,582

375,730 375,730 Issued as bonus shares 37,573 37,573

4,346,470 4,341,550 434,647 434,155

17.2.1

18 SURPLUS ON REVALUATION OF ASSETS

18.1 Surplus on revaluation of Fixed Assets 3,464,401 3,464,401

Land

18.2 Surplus on revaluation of Available-for-sale securities

Shares in Listed Companies 143,990 189,688

3,608,391 3,654,089

19 CONTINGENCIES AND COMMITMENTS

19.1

(Number of shares) Rupees in '000'

The Bank has total of 3,417 cases under litigation in different courts. The total involved in such outstanding

cases aggregate to Rs. 767.219 million. Zone wise detail is given as under;

Ordinary shares of Rs.

100/- each fully paid

State Bank of Pakistan has exempted the Bank from meeting the minimum capital requirement as prescribed

vide BPRD Circular no.36 dated November 4, 1997 through exemption letter no. BPRD (RU-43)512-

09(B)/x/1516/98 dated September 8, 1998.

Rawalpindi Zone 2,601

DG Khan Zone 89,029

Bahawalpure Zone 28,378

Multan Zone 176,885

Faisalabad Zone 91,619

Sargodha Zone 28,396

Gujranwala Zone 51,646

Lahore Zone 288,088

Main Branch 2,120

Head Office 8,457

Total 767,219

19.2 Guarantee Acceptances 19.2.1 445 445

19.2.1

19.3 Show cause notices by sales tax-under appeal 19.3.1 5,041 5,041

19.3.1

19.4

The appeals for the assessment year 1999-2000 to 2002-2003 are pending with Income Tax appellate

Tribunal (ITAT), the outcome of which is not certain

Mr. Fazal-ur-Rehman deposited Rs.100,000/- & Rs.200,000/- (Total Rs.300,000/-) on 12.07.1990 &

14.07.1990 through DDs at Head Office as bid money in auction of land measuring 187(A) - 02(K)-17(M)

situated at Muza Nadha The & Distt. Gujranwala. Mr. Fazal-ur-Rehman did not fulfil the conditions of

Landed Committee, resultantly Bank confiscated Bid Money. He filed Civil Suit No.156/1 in 1993 titled as

Fazal-ur-Rehman v/s PPCBL at Gujranwala, which was decreed in favour of plaintiff. Bank filed an appeal

No.RFA 243/95 in Lahore High Court, which has also decided against Bank and Lahore High Court directed

Bank to furnish a guarantee No.2096/92 dated 15.09.1995 amounting to Rs.444,939/- through Main Branch

from NBP for the satisfaction of the Court. Now the case is pending adjudication in the Court of Civil Judge,

Lahore.

Zones

The sales tax department has issued a show cause notice dated: 14-07-2003 to the bank as to why the sales

tax amounting to Rs. 5.041 millions has not been paid to the Government in regard to sale of machinery

valuing Rs. 33.600 million of Rahwali Sugar Mills to Messers Ali Industrial and Engineering Works, Karachi

without charging and depositing sales tax leviable thereon. Further the sales tax department reported that

Messers Ali Industrial and Engineering Works filed written statement before Deputy Collector Audit-I, that

they had paid sales tax on purchase of such machinery. The bank filed petition against the above show cause

notice on the ground that bank has sold debris, scrap and non-operative machinery which were not sales tax

leviable items,on which Lahore High Court has suspended the show cause notice vide order dated: 06-08-

2003. The case is still pending in Lahore High Court.

The Income Tax Returns for the tax years 2003, 2004, 2005,2006,2007 and 2008 have been filed under Self

Assessment scheme whereby the Income Tax Returns filed with the I.T. department become the " deemed

assessment order" unless selected for Audit. The assessment Order for Tax Year 2004 was amended by the

Tax Department and challenged by the assessee in appeal before CIT(A). The case was decided in favour of

the assessee by the Appellate Commissioner and the Department has preferred appeal against this order

before the Learned Income Tax Appellate Tribunal ( ITAT). However , before the outcome of the Appeal &

Under this present status the assessed losses for the tax year 2003 to 2006 ( after appeal effect of 2004) are

Rs. 72.029 million

Tax Consultant of the Bank has strong opinion that following the normal assessment procedure and history of

the case, the assessing officer I.e. Income Tax department may amend the orders for the years 2005 & 2006

and the assessments would be amended accordingly.

If it is done the brought forward losses from the years 2003 to 2006 would not be available and might even

be converted to Income for the years and subject to charge of income-tax. Likewise the business losses for

the year 2007 would be reduced accordingly or converted into Income for the year, which would be subject

to income-tax.

Rupees in

'000'

2009 2008

Rupees in '000'

19.5 Commitment against construction and repair of building 9,849 13,278

19.6 The value of Land & Building includes Rs. 137.311 million of under litigation/disputed properties for which

adjudicatiion is pending. Rs.43.53 million includes for those properties which has neither title nor possession

are merely transferred from Central Co-operative Banks (now dissolved) and also includes Rs. 0.141 milliion

for those properties which are not traceable.


Note 2009 2008Rupees in '000

20 Mark-up/Return/Interest earned

On loans and advances to customers 886,996 826,137 On Investments in Held to Maturity Securities 43,054 44,108 On Deposits with financial institutions 263,587 114,624

1,193,637 984,869

21 Mark-up/Return/Interest expensed

Deposits 70,953 50,278 Other short term borrowings 1,500,003 568,303

1,570,956 618,581

22 OTHER INCOME

Rent on property 12,194 11,073 Gain on sale of fixed assets 22 273,236 Profit on sale of books 1,073 1,012 Bank & Service Charges. 12,238 15,627 Others 14,258 15,334

39,785 316,282

23 ADMINISTRATIVE EXPENSES

Salaries, allowances, etc. 546,212 463,277

Charge for defined benefit plan 30,090 24,770

Contribution to defined contribution plan 207 153

Non-executive directors' fees, allowances and other expenses 65 138 Rent, taxes, insurance, electricity, etc. 28,475 27,726 Legal and professional charges 1,089 2,603 Communications 9,796 10,016

Repairs and maintenance 5,636 9,597 Stationery and printing 2,455 2,427 Advertisement and publicity 1,414 2,077

Subscription 512 758

Auditors' remuneration 23.1 468 1,943 Depreciation 11.1 10,980 10,836 Amortization 159 159 General Charges 10,429 9,927 Vehicles expenses 16,492 15,387

Others 14,417 14,499

678,896 596,293


2009 2008Rupees in '000

23.1 Auditors' remuneration

Audit fee 468 1,943 Out-of-pocket expenses - -

468 1,943

24 OTHER CHARGES

Penalties imposed by State Bank of Pakistan 250 251

250 251

25 TAXATION

For the yearCurrent - 1,170 For the prior year(s) - -

- 1,170

25.1

26 (LOSS)/EARNINGS PER SHARE - BASIC

(Loss)/Profit for the year (979,071) 120,416

Weighted average number of ordinary shares (Numbers) 4,336,069 #REF!

Basic (loss)/earnings per share (Rupees) (225.80) #REF!

26.1 There is no dilutive efffect on (loss) per share during the year.

27 CASH AND CASH EQUIVALENTS

Cash and Balance with Treasury Banks 601,882 695,200 Balance with other banks 2,017,990 2,230,225

2,619,872 2,925,425

28 STAFF STRENGTH(Number)

Permanent 1,513 1,501 Temporary/ on contractual basis 151 120 Daily wages 375 422

Total Staff Strength 2,039 2,043

In view of taxable loss incurred for the year ended 30 June 2009, provision has been made only

against dividend & rental income.


29 COMPENSATION OF DIRECTORS AND EXECUTIVES

President / Chief Executive Directors Executives 2009 2008 2009 2008 2009 2008

Fees - - - - - - Managerial remuneration - - - - - -

Charge for defined benefit plan - - - - - -

Contribution to defined contribution plan - - - - - -

Rent and house maintenance - - - - - -

Utilities - - - - - -

Medical - - - - - -

Conveyance - - - - - - - - - - - -

Number of persons 1 1 - - - -

29.1

30 FAIR VALUE OF FINANCIAL INSTRUMENTS

30.1 On-balance sheet financial instruments

Book value Fair value Book value Fair value

AssetsCash balances with treasury banks 601,882 601,882 695,200 695,200 Balances with other banks 2,017,990 2,017,990 2,230,225 2,230,225 Lending to financial institutions - - - - Investments 451,012 451,012 508,762 508,762 Advances 6,733,775 6,733,775 7,539,306 7,539,306 Other assets 105,111 105,111 58,877 58,877

9,909,770 9,909,770 11,032,370 11,032,370

LiabilitiesBills payable 44,305 44,305 75,186 75,186 Borrowings 8,000,000 8,000,000 8,000,000 8,000,000

Deposits and other accounts 1,837,175 1,837,175 1,929,185 1,929,185

Sub-ordinated loans - - - -

Liabilities against assets subject to finance lease - - - - Other liabilities 134,690 134,690 109,525 109,525

10,016,170 10,016,170 10,113,896 10,113,896

30.2

30.3

31 RELATED PARTY TRANSACTIONS

31.1

At present, the Secretary Co-operatives, Government of the Punjab is the administrator of the bank, who has full powers and

duties that of a Board of Directors.

Related parties comprise of key bank executives, member societies, Registrar Co-operative Socities, Punjab and Government of

Punjab. The transactions and contracts with related parties, other than those under the terms of employment, are carried out on

an Arm's length basis. No related party transaction was made during the year.

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

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

20082009

In the opinion of the management, the fair value of the remaining financial assets and liabilities are not significantly different

from their carrying values since assets and liabilities are either short term in nature or in the case of customer loans and deposits

are frequently repriced.

The fair value of available for sale investments other than those classified as held to maturity is based on quoted market price.


32 CAPITAL ADEQUACY

Restated

2009 2008

Rupees in '000Regulatory Capital BaseTier I Capital Shareholders Capital/Assigned Capital 434,647 434,155 Reserves 401,727 402,298 Unappropriated / unremitted profits (Net of Losses) (749,013) 230,058

87,361 1,066,511 Less: AdjustmentsShortfall in provisions required against classified assets (279,223) - Total Tier I Capital (191,862) 1,066,511

Tier II Capital Subordinated Debt (upto 50% of total Tier I Capital) - - General Provisions subject to 1.25% of Total Risk Weighted Assets - - Revaluation Reserve (upto 50%) 1,804,196 1,827,045

1,804,196 1,827,045 Total Tier II Capital (restricted upto the amount of total tier I capital) (191,862) 1,066,511 Eligible Tier III Capital - - Total Regulatory Capital (a) (383,724) 2,133,022

Risk-Weighted Exposures

Book Value Risk Adjusted Book Value Risk AdjustedValue Value

Credit RiskBalance Sheet Items:- Cash and balances with treasury banks 285,979 - 325,972 - Balances with other banks 2,333,893 466,779 2,599,452 519,890 Investments 451,012 508,762 200,262 Advances 8,177,689 6,045,209 8,983,220 5,685,437 Operating fixed assets 3,705,253 3,705,253 3,712,774 3,712,774 Other Assets 202,010 148,627 148,229 115,216

16,802,930 10,365,868 16,278,409 10,233,579 Off Balance Sheet items Loan Repayment Guarantees Purchase and Resale Agreements Guarantee acceptance 445 445 445 445 Revolving underwriting Commitments Stand By Letters of Credit Outstanding Foreign Exchange Contracts -Purchase -Sale

445 445 445 445Credit risk-weighted exposures 10,366,313 10,234,024

Market Risk General market risk - - Specific market Risk - - Market risk-weighted exposures - - Total Risk-Weighted exposures (b) 10,366,313 10,234,024

Capital Adequacy Ratio [ (a) / (b) x 100) (3.70) 20.84

32.1

The risk weighted assets to capital ratio, calculated in accordance with the State Bank's guidelines on capital adequacy was as

follows:-

The Bank has obtained exemption from S.B.P for the implemention of Basel II requirements vide letter no.RCS/PA/2242 dated

December 16, 2008. It has been decided to discountinue the submission of capital adequacy return under Basel I framework.

20082009Rupees in '000


33 RISK MANAGEMENT

33.1 CREDIT RISK

33.1.1 Segmental Information2009

33.1.1.1 Segments by class of business Advances (Gross) Deposits Contingencies and

CommitmentsRupees Percent Rupees Percent Rupees Percent in '000 in '000 in '000

Agriculture, Forestry, Hunting and Fishing 7,451,062 91.11 120,812 6.58 - - Mining and Quarrying - - - - - - Textile 1,347 0.02 33 0.00 - - Chemical and Pharmaceuticals - - - - - - Cement - - - - - - Sugar - - - - - - Footwear and Leather garments - - - - - - Automobile and transportation equipment - - 162 0.01 - - Electronics and electrical appliances - - - - - - Construction - - - - - - Power (electricity), Gas, Water, Sanitary - - - - - - Financial - - - - - - Insurance - - 1,685 0.09 - - Services - - - - - - Individuals 60,060 0.73 1,406,877 76.58 - -

Others 665,220 8.13 307,606 16.74 9,849 100.00 8,177,689 100.00 1,837,175 100.00 9,849 100.00

33.1.1.2 Segment by sector 2009Contingencies and

Advances Deposits CommitmentsRupees Percent Rupees Percent Rupees Percent in '000' in '000' in '000'

Public/ Government - - - - - - Private 8,177,689 100.00 1,837,175 100.00 9,849 100.00

8,177,689 100.00 1,837,175 100.00 9,849 100.00

The Bank's credit risk exposure is not significantly different from that reflected in the financial statements. The management monitors and limits Bank's exposure to

credit risk through monitoring of clients' credit exposure, review and conservative estimates of provisions for doubtful receivable and through the prudent use of

collateral for major amounts of credit. The management is of the view that the Bank is exposed to significant concentration of credit risk as its financial assets mostly

relate to agriculture sector. Detail is given below:


33.1.1.3 Details of non-performing advances and specific provisions by class of business segment

2009 2008

Classified Specific Classified Specific Advances Provisions Advances Provisions

Held Held

Agriculture, Forestry, Hunting and Fishing 4,000,596 - 4,117,888 - Mining and Quarrying - - - - Textile 1,347 - 1,419 - Chemical and Pharmaceuticals - - - - Cement - - - - Sugar - - - - Footwear and Leather garments - - - - Automobile and transportation equipment - - - - Electronics and electrical appliances - - - - Construction - - - - Power (electricity), Gas, Water, Sanitary - - - - Wholesale and Retail Trade - - - - Exports/Imports - - - - Transport, Storage and Communication - - - - Financial - - - - Insurance - - - - Services - - - - Individuals 27,174 - 24,973 -

Others 86,618 - 84,354 - 4,115,735 - 4,228,634 -

33.1.1.4 Details of non-performing advances and specific provisions by sector

Public/ GovernmentPrivate 4,115,735 - 4,228,634 -

4,115,735 - 4,228,634 -

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


33.1.1.5 GEOGRAPHICAL SEGMENT ANALYSIS

Profit before Total assets Net assets Contingencies andtaxation employed employed commitments

Rupees in '000'

Pakistan (979,071) 13,711,922 3,695,752 777,068 Asia Pacific (including South Asia) - - - - Europe - - - - United States of America and Canada - - - - Middle East - - - - Others - - - -

(979,071) 13,711,922 3,695,752 777,068

2009


33.2 Market Risk

33.2.1 FOREIGN EXCHANGE RISK

Pakistan rupee 13,711,922 10,016,170 - -

33.2.2 YIELD / MARKUP RATE RISK

On-balance sheet financial instruments

AssetsCash and balances with treasury banks 1.40% 601,882 566,920 - - - - - - - - 34,962 Balances with other banks 9.16% 2,017,990 2,017,990 - - - - - - - - - Lending to financial institutions - - - - - - - - - - - Investments 10.50% 451,012 147,461 - - - - - 300,000 - - 3,551 Advances 13.50% 6,733,775 993,207 357,915 651,242 1,734,740 727,387 632,485 1,059,072 444,429 133,114 184 Other assets 202,010 - - - - - - - - - 202,010

10,006,669 3,725,578 357,915 651,242 1,734,740 727,387 632,485 1,359,072 444,429 133,114 240,707 LiabilitiesBills payable 44,305 - - - - - - - - - 44,305 Borrowings 8.82% 8,000,000 8,000,000 - - - - - - - - - Deposits and other accounts 3.75% 1,837,175 1,475,094 66,764 15,273 7,419 43,797 15,667 127,790 6,259 62,131 16,981 Sub-ordinated loans - Liabilities against assets subject to finance lease - Other liabilities 134,690 - - - - - - - - - 134,690

10,016,170 9,475,094 66,764 15,273 7,419 43,797 15,667 127,790 6,259 62,131 195,976

On-balance sheet gap (9,501) (5,749,516) 291,151 635,969 1,727,321 683,590 616,818 1,231,282 438,170 70,983 44,731

Over 1 to 2

years

Over 2 to 3

years

Over 3 to 5

years

The Bank's credit risk exposure is not significantly different from that reflected in the financial statements. The management monitors and limits Bank's exposure to credit risk through monitoring of clients' credit exposure,

review and conservative estimates of provisions for doubtful receivable and through the prudent use of collateral for major amounts of credit. The management is of the view that the Bank is exposed to significant concentration of

Yield / markup rate risk is the risk of decline in earnings due to adverse movement of yield curve. It arises from the possibility that changes in yield / markup rates will affect the value of financial instruments. The bank is

exposed to yield / markup rate risk as a result of mismatch or gaps in the amounts of assets and liabilities that mature or reprice in a given period. Sensitivity of the bank's financial assets and financial liabilities to yield /

markup rate can be evaluated from the following:

Over 6 to 1

years

Net foreign

currency

exposure

Off-

balance

sheet

items

2009

2009

Effective

yield /

interest

rate

Total

Exposed to Yield/ Interest risk

LiabilitiesAssets

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

Over 3 to 6

months

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

Non-interest

bearing

financial

instruments

Upto 1

month

Over 1 to 3

months

Over 5 to 10

years

Above 10

Years


Off-balance sheet financial instruments

Forward Lending - - - - - - - - - - - (including call lending, repurchase agreement lending,commitments to extend credit, etc.)

Forward borrowings - - - - - - - - - - - (including call borrowing, repurchase agreementborrowing, etc.)Off-balance sheet gap - - - - - - - - - - -

Total Yield/Interest Risk Sensitivity Gap (9,501) (5,749,516) 291,151 635,969 1,727,321 683,590 616,818 1,231,282 438,170 70,983 44,731

Cumulative Yield/Interest Risk Sensitivity Gap (9,501) (5,759,017) (5,467,866) (4,831,897) (3,104,576) (2,420,986) (1,804,168) (572,886) (134,716) (63,733) (19,002)


33.3 LIQUIDITY RISK

33.3.1 Maturities of Assets and Liabilities

AssetsCash and balances with treasury banks 601,882 601,882 - - - - - - - - Balances with other banks 2,017,990 2,017,990 - - - - - - - - Lending to financial institutions - - - - - - - - - - Investments 451,012 138,961 - - - 12,051 - 300,000 - - Advances 6,733,775 993,391 357,915 651,242 1,734,740 727,387 632,485 1,059,072 444,429 133,114 Other assets 202,010 123,568 1,336 274 17,194 478 374 58,435 2 349 Operating fixed assets 3,705,253 6,629 387 181 1,738 436 14,367 18,790 3,662,121 604 Deferred tax assets - - - - - - - - - -

13,711,922 3,882,421 359,638 651,697 1,753,672 740,352 647,226 1,436,297 4,106,552 134,067 LiabilitiesBills payable 44,305 44,305 - - - - - - - - Borrowings 8,000,000 8,000,000 - - - - - - - -

Deposits and other accounts 1,837,175 1,492,075 66,764 15,273 7,419 43,797 15,667 127,790 6,259 62,131

Sub-ordinated loans - - - - - - - - - -

Liabilities against assets subject to finance lease - - - - - - - - - - Other liabilities 134,690 58,202 23,490 226 85 222 255 14,896 35,544 1,770 Deferred tax liabilities - - - - - - - - - -

10,016,170 9,594,582 90,254 15,499 7,504 44,019 15,922 142,686 41,803 63,901 Net assets 3,695,752 (5,712,161) 269,384 636,198 1,746,168 696,333 631,304 1,293,611 4,064,749 70,166

Share capital 434,647 Reserves 401,727 Unappropriated loss (749,013) Surplus on revaluation of assets 3,608,391

3,695,752

33.3.2

34

Liquidity risk is the risk that the Bank will encounter difficulties in raising funds to meet the commitments associated with financial instruments. To safeguard this risk, the Bank has diversified its funding

sources and managed its assets with liquidity in mind thereby maintaining a healthy balance of cash and cash equivalents and readily marketable securities. The maturity profile of assets and liabilities is

monitored on regular basis to ensure that the adequate liquidity is maintained. The maturity profile of the Company's assets and liabilities is summarized below:

Messer JCR-VIS Credit Rating Company Limited has assigned the medium to long term rating of the bank at CCC (Triple C) while short term rating is revised to C on July 23, 2008 ( Previously: BB+ / B).

Total

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

Some assets / liabilities of the bank do not have a contractual maturity date. The period in which these assets / liabilities are assumed to mature is taken as the expected date on which the assets /

liabilities be realized / settled. The above maturity analysis is based on the remaining period at the balance sheet date to the contractual maturity date.

Above 10

years

Over 5 to

10 years

Over 3 to 6

months

Over 2 to 3

years

Over 1 to 3

months

Over 3 to 5

years

Upton 1

month

Over 6

months to

1 year

Over 1 to 2

years

2009


34.1

35 EVENT AFTER BALANCE SHEET DATE

(i)

(ii)

(iii)

(iv)

(v)

(vi)

(vii)

(viii)

(ix)

36 DATE OF AUTHORIZATION FOR ISSUE

These financial statements were authorized for issue on ________________ by the Administrator of the Bank.

37 GENERAL

- Figures have been rounded off to the nearest thousand rupees.

-

KHALID RAZA MIRA.SENIOR MANAGER,

ACCOUNTS

The S.B.P has exempted the Bank from credit rating requirements under Prudential Regulation G-4, till the completion of restructuring process vide letter no. BPRD/LRD-02/RATING/2009/1856 dated

March 17, 2009.

The correspondence figures have been reclassified wherever necessary to achieve batter compression.

The GoP shall make payment of loan of Rs. 8 billion in twelve monthly installments of Rs.250 million and 18 monthly installments of Rs.277.778 million starting from August 01, 2009. The monthly

repayments are made through the Bank with Government providing loans of equivalent amount to the Bank.

The out standing loan amount shall attract mark-up / interest at the original rates of 6-months T-bill i.e. the rates on which the loan was withdrawn by the bank.

Subsequent to the balance sheet date the bank had entered into agreement with the Government of Punjab (GoP) for the assignment of loan of Rs. 8 billion payable to the State Bank of Pakistan (S.B.P).

The agreement was signed on September 16, 2009 by virtue of which the liability was bank was transferred to GoP. The terms and conditions of the agreement are given below:-

The loan advanced by the Government shall be secured by the immoveable properties and agricultural loans & advances of the Bank. The list of immoveable properties evaluated by M/s. ARCH-e-

deacon aggregating to Rs. 3,896,452,450/- The aggregate balance of agricultural loans and advances as of 31st August, 2008 stands at Rs. 8,516.931 million. Nevertheless, the Bank shall be free

to dispose off any of its immoveable properties, not in business use, with the concurrence of the Finance Department of the Government. It is agreed that the Bank shall be free to manage its

agricultural loans and advances by refinancing recoveries or fresh advances as per policy of the Bank. However, the aggregate value of the aforesaid securities shall be kept equal to the amount of

loan so advanced by the Government to the Bank.

That the loan so advanced by the Government to the Bank shall be repaid by the latter to the former within a period of five years through annual equal installments on or before 31st December of

every year starting from the year during which the State Bank credit line of Rs. 8.00 billion along with accrued markup is fully repaid. However, both the parties may, with mutual consent, review

the prepayment schedule if there are reasonable ground that the payment within due date is beyond the control of the Bank.

CHIEF MANAGER,

The amount of loan shall exclusively be utilized by the Bank for repayment to State Bank against the outstanding loan of Rs. 8.00 billion along with mark-up with markup accrued thereon.

The Bank will pay interest to State Bank against outstanding loan amount at the original rates of 6-months T-bill i.e. the rates on which the loan was withdrawn by the Bank.

The Government may convert the whole amount of loan or a part thereof into any other form or mode as considered appropriate depending upon future status of the Bank enabling it to meet

consequential regulatory requirements or financial position of the Bank.

FINANCEA.GENERAL MANAGERPERVEZ TARIQ DAR

The Government shall make the payment of the amount by monthly loan installment and accrued mark-up as aforesaid by or before the due dates enabling the Bank to pass on the same amount to

the State Bank of Pakistan.

The Bank will make quarterly payment of interest to the State Bank of Pakistan.

TAHIR IQBAL BUTT

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