Annual Report 2006

NOTICE OF ANNUAL GENERAL MEETING
Notice is hereby given that the 15th Annual General Meeting of mybank Limited will be held on Friday,
March 30, 2007 at 9:45 a.m. at its Registered Office situated at Regal Chowk, Jinnah Road, Quetta to transact
the following business:
1. To confirm the minutes of the 14th Annual General Meeting of the Bank held on March 31, 2006.
2. To receive, consider and adopt the Audited Accounts of the Bank together with the Directors’ and Auditor’s
Reports thereon for the year ended December 31, 2006.
3. To appoint the auditors for the year ending December 31, 2007 and to fix their remuneration. The present
Auditors M/s. M. Yousuf Adil Saleem & Co., Chartered Accountants, have offered themselves for
re-appointment as auditors of the Bank.
Special Business
4. To approve payment of remuneration and provision of certain facilities to the President and
CEO of the Bank
Any other business
5. To transact any other business of the Bank with the permission of the Chair
By Order of the Board
Place: Karachi
Date: February 23, 2007
Notes:
1. Share Transfer Books of the Bank will remain closed from March 24, 2007 to March 30, 2007
(both days inclusive).
2 A member entitled to attend and vote at this meeting is entitled to appoint a proxy to attend the meeting
and vote for him/her. A Proxy must be a member of the Bank. Proxy forms in order to be effective must
be received by the Bank at the Registered Office not later than 48 hours before the time of the meeting.
3 CDC members are requested to bring with them their Computerized National Identity Cards alongwith
Participant’s ID numbers and their account numbers at the time of attending the Annual General Meeting
in order to facilitate identification of the respective members. In case of corporate entity, the Board of
Directors Resolution/Power of Attorney with specimen signatures be produced at the time of meeting.
4 Members are requested to promptly notify the change of address, if any, and also for the consideration of
folio numbers, if any member holds more than one folio, to the Registrar.
STATEMENT UNDER SECTION 160(1)(b) OF THE COMPANIES ORDINANCE, 1984:
Agenda Item No. 4
To approve the payment of remuneration and provision of certain facilities to the President and CEO of the
Bank. In this regard, the following proposed Ordinary Resolution be put before the shareholders of the Bank
for their approval.
“RESOLVED THAT The President & Chief Executive Officer’s remuneration not exceeding Rs.1,000,000/- per
month excluding two bank maintained cars with petrol at actual, telephone bills at actual, international business
class air ticket for self and spouse once a year, along with other perquisites, benefits and allowances to which
he is entitled under his terms of employment, be and is hereby approved by the Bank”.
10 Annual Report 2006 mybank Limited

Message from the Chairman
The Bank has made significant progress during 2006 in terms of restructuring,
re-branding and growth in stakeholders’ interest in terms of assets and
earnings.
During the first time in the Bank’s history, the Board of Directors declared
5% Cash Dividend to convey the commitment of the Board of Directors
and the management, both to the internal and external stakeholders. At
the same time we have also put significant focus on core banking activities
to generate business which is imperative in the long term stability of the
organization.
In the financial sector a lot of consolidation has been witnessed during

2006. Serious competitive challenges face us but we strongly believe in
combined team effort and firmly achieving our objectives through effective
policies, team effort, automating operations and increasing customer
service standards. We are also committed to maximize return on all
stakeholders’ investments.
The change of senior management team in August 2006 turned out very
positive in terms of business. The focus is to compete with peer banks
and cater multiple economic segments. We will continue to invest in
People, Premises and Technology, develop a core team of seasoned
professionals, growing branch network not only in bigger cities but also
in remote areas where the banking facilities have not been extended yet
and automate operations to ensure effective internal controls and enforce
Enterprise Risk Management.
I am thankful to the management for their dedication and loyalty and to

all stakeholders for their patience that helped us transforming this bank
to a new era of success, stability and strength.
IQBAL ALIMOHAMED
Chairman
Place: Karachi
Annual Report 2006 mybank Limited 11

engaged and motivated People.” I believe in building up the core top
management team to successfully implement the vision of the Bank and
to achieve the targets set for the year to come; 2007.
Initiation of Technology rollout, outsourcing of Business Continuity Plan
and adopting methodologies to implement Enterprise Risk Management
are the key areas under progress besides strengthening the core operations.
The shareholders and our clientele will be satisfied to note the following
yearly comparative key financial results which indicate that reasonable
improvement has taken place in the size of balance sheet but there is lot
yet to be done.
Financial Highlights
Rs in Millions
December December Increase /
2006 2005 (Decrease)
Deposits 19,169.226 12,856.615 49%
Advances
(Net of Provision) 13,486.839 9,294.381 45%
Gross Assets 26,549.480 17,218.757 54%
Net Assets 5,065.634 2,549.622 99%

Net Profit
(Before Tax) 623.060 210.848 196%
Profit
After Taxation 492.888 274.250 80%
Capital 3,085.721 2,057.147 50%
Intermediation Cost 3.06 4.13 (-) 26%
Insha Allah with the support of all stakeholders and motivated team of
professionals, we have planned desirable projections for the year 2007
when mybank will place itself amongst the top performing banks within
next three years.
Changing economic conditions with growing customer database is another
positive outlook of the years to come. We look forward to seek guidance
from the regulators, the State Bank of Pakistan and the Securities Exchange
Commission of Pakistan through their team of strong professionals.
My thanks to the Customers and Staff for their continuous support and
loyalty with a commitment to deliver the Bank’s Vision and Core Values
in true spirits.
MUHAMMAD BILAL SHEIKH
President & Chief Executive Officer
Place: Karachi

DIRECTORS’ REPORT
The Board of Directors is pleased to present the 15th Annual Report of mybank Limited for the year ended
December 31, 2006.
Performance Review
During the year 2006, the Bank made significant progress in all major areas. The Bank remained focused on
achieving its targets of growth in revenue, profitability, deposits and significant progress in all areas of operations.
The operating financial results of the Bank are summarized as follows:
Rs. in ‘million’
Profit before taxation and provision against non-performing loans 660.832

Less : Provision against non-performing loans -net 37.772
Profit before taxation 623.060
Less: Taxation 130.172
Profit after taxation 492.888
Add: Profit brought forward 278.297
Profit available for appropriation 771.185
Earnings per share – Rupees 1.89
Appointment of President & CEO:
The Board appointed Mr. Muhammad Bilal Sheikh as President & CEO of the Bank. He took charge of the
office with effect from August 11, 2006. Mr. Muhammad Bilal Sheikh is a seasoned banker with almost 40
years of diversified experience in banking; he enjoys a very high reputation in the banking industry. His last
assignment before joining mybank Limited was President & Chief Executive Officer, PICIC Commercial Bank
Limited. Prior to that, Mr. Sheikh also served as Deputy Managing Director PICIC Corporation Limited and
Chairman National Development Finance Corporation (NDFC).The Board of Directors welcomes Mr. Muhammad
Bilal Sheikh to the Bank.
Changes in Board composition during 2006
Mr. Muhammad Humayun Nabi Jan resigned from the Board and Mr. Afzal Ghani was co-opted in his place
on August 25, 2006 in the 97th meeting of the Board of Directors.
Mr. Muhammad Bilal Sheikh, President & CEO, is also a member of the Board.
Cash Dividend
For the first time in mybank history, the Board of Directors declared 5% Cash Dividend as a mark of commitment
to its shareholders.
Increase in Paid up Capital
As per the requirement of the State Bank of Pakistan, Banking Supervision Department circular No. 12 dated:
August 25, 2006, the Bank increased the Paid-up Capital through 50 percent Right Issue (R5) at Par. The Paid-
up Capital of the Bank was enhanced from Rs. 2.057 billion to Rs. 3.058 billion in December 2006.
Credit Rating
The Bank enjoys A- (A minus) for the medium to long term and A-2 (A-two) for the short term with a stable
outlook by Pakistan Credit Rating Agency Limited.

Internal Controls
The Board of Directors endorses the management evaluation on the Internal control system prevailing in the
Bank during the year. The system of internal controls are being further strengthened to manage rather than
eliminate risk of failure to achieve objectives, and by its nature can only provide reasonable not absolute
assurance against material misstatement or loss. The management has made statements relating to internal
control and risk assessment framework to meet the requirements of State Bank of Pakistan (SBP) circular # BSD
7 of 2004, BSD Circular letter # 2 of 2005 and the Code of Corporate Governance issued by the Securities &
Exchange Commission of Pakistan (SECP).
Audit Committee
An Audit Committee of the Board is functioning effectively in compliance with Corporate Governance rules
framed by the Securities & Exchange Commission of Pakistan comprising non executive directors. The committee
functions under written terms and reference incorporated in its charter as approved by the Board. The role of
the committee is to assist the Board in fulfilling responsibilities.
Corporate & Financial Reporting Framework
(Code of Corporate Governance)
The Board extends support and commitment towards the implementation of the highest standards of Corporate
Governance. The Bank is in compliance of the Code of Corporate Governance issued by the Securities &
Exchange Commission of Pakistan and other instructions issued by the State Bank of Pakistan on the code. It
has also followed the principles set out in the Listing Regulations of the Stock Exchanges. A prescribed statement
by the management along with the auditors’ review report thereon forms part of this Annual Report.
Statements under Clause XIX of the Code of Corporate Governance

a) The financial statements prepared by the management of the Bank present fairly its state of affairs, the result
of its operations, cash flows and changes in equity.
b) Proper books of account of the Bank have been maintained.
c) Appropriate accounting policies have consistently been applied in preparation of financial statements and
accounting estimates are based on reasonable and prudent judgment.
d) International Accounting Standards, as applicable to banks in Pakistan, have been followed in the preparation
of financial statements without any material departure.
However, the State Bank of Pakistan has specifically deferred the implementation of International Accounting
Standard 39, Financial Instruments: Recognition and Measurement and International Accounting Standard
40, Investment Property, till further instructions. Accordingly the requirements of those standards have not
been followed in the preparation of these financial statements.
e) The system of internal control is sound in design and has been effectively implemented and monitored.
f) There are no doubts about the Bank continuing as a going concern.
g) There has been no material departure from the best practices of corporate governance as detailed in the
listing regulations of the stock exchanges of Pakistan.
h) Summarized key operating and financial data of the last six years is tabulated in this Annual Report.
i) The details of Board Meetings held and attended by the directors forms part of this Annual Report.
j) The prescribed pattern of shareholding is given as part of the Annual Report along with the disclosure
requirement of clause (xix) sub clause(j) of the Code of Corporate Governance issued by the Securities &
Exchange Commission of Pakistan.

The present auditors, Messers M. Yousuf Adil Saleem & Co., Chartered Accountants, retire and offer themselves
for re-appointment. The directors endorse recommendation of the Audit Committee for the re-appointment
of Messers M. Yousuf Adil Saleem & Co., Chartered Accountants, as the auditors for the year 2007 subject to
the laws and regulations prevailing as at the date of the forthcoming Annual General Meeting.
Future Plans
Under the new leadership, bank is striving to achieve success on various grounds including strengthening of
the core deposit base, increasing profitability, customer services focus and gradual enhancement in overall
bank operations. The bank intends to grow its network in terms of number of branches subject to the approval
of the State Bank of Pakistan for which the formalities are underway.
Going forward, the Bank plans to grow the balance sheet size significantly. Paradigm shift in deposits and
profitability is of immense importance among other strategic initiatives. Substantial resources in terms of human
efforts are being applied towards settlement of past misdeeds; classified/ non-performing loans.
IT Infrastructure
Technology revamping is underway and the User Acceptance Test has been successfully completed. The rollout
is under implementation of both Misys modules i.e. Equation and EBA. The deployment of Equation Branch
Automation (front-end) will automate cashier/teller services reducing turn around time of various banking
services/products. The deployment of Equation (back-end) will centralize end of day reporting, and enable
the maker/checker concept further segregating front-end and back-end functions, thereby strengthening
operational controls. Equation today helps banks improve their business by increasing customer revenues,
reducing risk and driving business efficiency. This is achieved through the creative application of straight-
through-processing, automation and centralization. Currently our focus is to implement Misys in parallel to
Unibank targeting first the Karachi Region Branches and then the other regions. Once Misys is deployed
successfully we will be working on the phase out of Unibank as the primary system.
The formal contracts have been signed off with MSCL and TPS to develop an ATM interface with Misys our
new core banking system which will enable us to deploy our own ATM machines in the very near future.
These ATM machines will be strategically located not only in the bigger cities both at the branches and offsite
locations, but also remote areas allowing customers from all walks of life to be able to carry-out their transactions
around the clock. The Bank has also signed off contract with 1-Link which will enable us to diversify into other
financial products/services such as debit/credit cards and payment of utility bills via ATM machines.
The Bank has invested heavily in PC deployment. Our network strategy is based on deploying LAN/WAN
connecting all our 50 branches through three main hubs of Karachi, Islamabad and Lahore. This network will
enable centralized, real time processing of banking services. The integration of Trade Innovations with Equation
will centralize Foreign Trade Processing again reducing processing turn around and approval times.
Our core strategy is to eventually integrate all other systems including the Consumer Asset Management System
(CAMs), Margin Connect, SWIFT, HR Payroll with our core banking system i.e. Equation for effective controls
and monitoring and reduced processing times. We are also working on proposals to implement our Disaster
Recovery Strategy in due course of time.
The deployment strategy for Lotus Notes is already ensuring paperless environment and faster communication
between the various internal customers and stakeholders in the bank.
Training is a very crucial part of our IT strategy where we have invested in foreign Misys consultants to train
our staff on the new core banking system. We have also developed a core UAT user team of 11 staff who will
not only be responsible for the roll-out of the system but also for training them on it.
In terms of IT security strategy we have developed and implemented essential policies and are also in the
process of implementing an intrusion detection system which will further safeguard our network. We have
also implemented e-CIB reporting and are also working to implement other regulatory requirements such as
RTGS along with the relevant staff training.

As part of an ongoing requirement our IT strategy is also keeping abreast of the Basel 2 compliance. Misys
enables banks to integrate the measurement and management of their margins, risks and costs to drive more
effective and consistent decision-making whilst more easily meeting regulatory requirements such as that of
Basel 2.
Risk Management
2006 saw a major development in the Pakistan Banking sector, for Risk Management, with the introduction
of the Basel II Capital Accord. The Basel II recommendations enable banks to further enhance the risk
management process, capital planning, allocation of capital to business and to identify, measure, monitor and
mitigate risks, ultimately protecting the shareholder ’s and other stake holder ’s interests.
Mybank risk management framework is moving toward enterprise wise risk management framework, it set
three broad risk management objectives; protect against unforeseen losses, ensure earning stability, and
maximize earnings potential and opportunities leading to shareholder value creation.
During the year the bank has taken the following major initiatives for strengthening its risk management
framework:-
n Formulation of Board Risk Management Committee
n Approval of Credit and Market Risk strategy
n Approval of clearly defined risk management policies covering risk identification, acceptance, measurement,
monitoring, reporting and control The revised policy manuals were prepared as per the best practices in
the banking industry and in terms of requirements of the Risk Management Guidelines.
n Establishment of different committees as per the requirement of Risk Management Guidelines and regulations.
n Implementation of Advance Warning System
n Establishment of Centralized Credit Administration Division
n Initiation of Business Continuity Planning project.
Our key focus areas in 2007 include:

n Implementation of Basel-II, particularly the related IT systems
n Completing the implementation of risk management framework aligned with the SBP Risk Management
Guidelines and Basel II
n Maintaining the strong risk management culture, governance and environment that have been built over
the past two years.
Business Continuity Plan
The bank initiated its Business Continuity Planning Process by outsourcing the project to Sidat Hyder Morshed
Associates (Pvt.) Ltd. The project initiated in November 2006 and the project close-out is planned during April
2007. The project will include the preparation and testing of the plan on the critical areas of the bank along
with 3 branches identified as big, medium, and small in nature. On the completion of the project, the
management expects to have addressed the requirements of State Bank and Basel II stipulating the necessity
and obligation for the implementation of Business Continuity Plan.
Acknowledgement
We would like to express our gratitude and thanks to the State Bank of Pakistan, Securities & Exchange
Commission of Pakistan for their professional support and guidance. Our gratitude is due to our customers
for the confidence that they have expressed in the Bank. We thank our shareholders for their patronage and
help. We also thank the management and the staff for their hard work and commitment.
On behalf of the Board
Iqbal Alimohamed
Chairman
Place: Karachi

STATEMENT OF COMPLIANCE WITH
CODE OF CORPORATE GOVERNANCE
The Board of Directors and management of mybank Limited has always supported and re-confirm its commitment
to continued support and implementation of the highest standards of Corporate Governance at all times.
The Bank has applied the principles contained in the Code in the following manner:
1. The Bank encourages representation of independent Non - Executive Directors and Directors representing
minority interests on its Board of Directors. At present the Board comprises of seven Non- Executive
Directors.
2. The Directors have confirmed that none of them is serving as a Director in more than ten listed companies,
including this Bank.
3. All the Non - Executive Directors of the Bank are registered as a tax payers and none of them has defaulted
in payment of any loan to a banking company, a DFI or an NBFI and are not members of any stock
exchange.
4. The casual vacancy occurred during the year in the Board of Directors have been filled in by the Directors
within the stipulated time.
5. The Bank has prepared a ‘Statement of Ethics and Business Practices’ which has been signed by all the
Directors and employees of the Bank.
6. The Board has developed a vision / mission statement, core values, overall corporate strategy and significant
policies of the Bank. A complete record of particulars of significant policies along with the dates on which
these were approved or amended has been maintained.
7. The Board has the following functioning Committees and their terms of reference have been approved
by the Board:
a. Audit Committee – also ensures the independence of the internal audit function and the independence
and objectivity of the external auditors.
b. Human Resource Management Sub-Committee – also monitors the remuneration and appointments of
senior management as defined in the terms of reference as well as personnel policies and its implementation.
c. Credit and Risk Management Committees – also ensures compliance of the Bank’s Credit Policies, Risk
Management Framework and SBP Prudential Regulations.
8. All the powers of the Board have duly been exercised and decision on material transaction, including
appointment and determination of remuneration and terms and conditions of employment of the CEO
have been taken by the Board.
9. The meetings of the Board were presided over by the Chairman and the Board met eight (8) times in the
year. Written notices of the Board meetings, along with agenda and working papers are always circulated
at least seven days before the meetings. The minutes of the meetings were appropriately recorded and
circulated.
10. The members of the Board have attended a presentation on Corporate Governance conducted by the
Secretary of the Bank to acquaint them with their duties and responsibilities. Further training courses will
be conducted in year 2007 to enhance the Board members understanding of their responsibilities and
duties under the code.

11. The Board has approved the appointment of CFO, company secretary and head of internal audit, as
determined by the CEO.
12. The Directors’ report for this year has been prepared in compliance with the requirements of the code
and which fully describes the salient matters required to be disclosed.
13. The information regarding change of Directors has been communicated to the Securities and Exchange
Commission of Pakistan (SECP) and Stock Exchanges within the stipulated time.
14. The financial statements of the Bank were duly endorsed by CEO and CFO prior to presentation before
the Audit Committee and the Board of Directors for approval.
15. The Directors, CEO and Executives of the Bank do not hold any interest in the shares of the Bank other
than that disclosed in the pattern of shareholding.
16. The Bank has complied with all the corporate and financial reporting requirements of the code.
17. The Board has formed an Audit Committee, which comprises of four members, all of whom are Non -
Executive Directors including the Chairman of the Committee.
18. The meetings of the Audit Committee were held at least once every quarter prior to approval of interim
and final results of the Bank and as required by the code. The terms of reference of the Committee have
been formed and advised to the Committee for compliance.
19. The Board has set-up an Internal Audit Division. The Internal Audit Division reports directly to the
Chairman Audit Committee.
20. The statutory auditors of the Bank have confirmed that they have been given a satisfactory rating under
the quality control review program of the Institute of Chartered Accountants of Pakistan, and they or any
of the partners of the firm, their spouses and minor children do not hold shares of the Bank and that the
firm and all of its partners are in compliance with International Federation of Accountants Committee
(IFAC) guidelines on code of ethics as adopted by the Institute of Chartered Accountants of Pakistan.
21. The statutory auditors or the persons associated with them have not been appointed to provide other
services except in accordance with the listing regulations and auditors have confirmed that they have
observed IFAC guidelines in this regard.
22. The quarterly un-audited financial statements of the Bank are circulated along with the Report of Directors.
Half-yearly financial statements were subjected to limited review by the statuary auditors. Financial
statements for the year ended December 31, 2006 have been audited and circulated in accordance with
the clause (xxii) of the code.
23. All material information as described in clause (xxiii) of the code is disseminated to the Stock Exchange
and Securities and Exchange Commission of Pakistan in a timely fashion.
24. We confirm that all other material principles contained in the code have been complied with.
By order of the Board
Muhammad Bilal Sheikh

President & CEO
Place: Karachi

STATEMENT OF INTERNAL CONTROLS
Management of mybank Limited is responsible for establishing and maintaining a desirable system of internal
control aimed at achieving the following objectives of the Bank:
• Efficiency and effectiveness of operations.

• Compliance with applicable laws and regulations.
• Reliability of financial reporting.
The following statements are made by the management, to meet the requirements of the State Bank of Pakistan
(SBP) circular No. BSD 7 of 2004, Banking Supervision Department circular letter No. 2 of 2005 and the Code
of Corporate Governance issued by the Securities & Exchange Commission of Pakistan (SECP).
1. The management has adopted different strategies to monitor and improve internal controls on going basis.
These include internal audit and various management committees. In addition the management had
arranged review of the design and effectiveness of the system of internal control through policy revision
outsourced to a consultant firm specialized in audit and control procedures, which is currently being
implemented. The reviews of the internal controls are being strengthened and measures for improvement
where required are implemented.
2. The Bank has adopted a statement of ethics and business practices that is signed by all Directors and
employees every year. Further, a compliance function has been established to ensure ongoing monitoring
of Bank’s compliance with laws, regulations and code of ethics.
3. The Bank has written policies and procedures duly approved by the Board of Directors and are presently
under review and being revised.
4. The Bank has mission, vision and corporate strategy duly approved by the Board.
5. A comprehensive and enhanced organization structure is being developed which supports clear lines of
communication and tiered levels of authority with delegation of responsibility and accountability.
6. The Bank has an effective internal audit division, which reports directly to the Audit Committee of the
Board. The internal audit periodically carries out audits of branches and central office divisions to monitor
the compliance of Bank’s policies and procedures based on an audit plan approved by the Audit Committee.
7. Management gives due considerations to the recommendations made by the internal and external auditors
for improvements in the internal control system and take timely action to implement such recommendations.
8. The management has in place evaluation and approval procedures for major capital expenditure and
other transactions.
9. There is an annual budgeting and strategic planning process. Financial forecasts are reviewed during the
year to reflect significant changes in business environment. Regular reporting and monitoring of financial
performance of the divisions highlighting key performance indicators and variance from budgets and
forecasts, is in place.
During the year 2006, the Bank made considerable efforts in maintaining a suitable internal control framework,
considering size of its operations, to ensure a comfortable level of effectiveness, efficiency and soundness of
its internal control system and in implementing the desired control procedures.
During the year, the management initiated necessary steps to ensure non-repetition and elimination of
observations, deficiencies and weaknesses identified by the statuary auditors, internal audit and the regulatory
agency to the maximum possible level. The existing policies and procedures are being reviewed and revised.

Development of internal controls systems is an ongoing process, which includes identification, evaluation and
management of significant risks faced by the Bank. Accordingly the Bank continuously reviews its entire system
of controls, including the control environment, risk management and compliance procedures, and revisiting
the policies and procedures to ensure that these conform to best practices.
Additionally, the Bank is also in the process of strengthening its systems for capturing and communicating
relevant information and had acquired state of art technology which is in the pilot phase of implementation.
Based on the evaluation of the system of internal control, the management assesses that the internal control
system, customer services and operation was adequate, considering the size and nature of banks operations,
and expect that the internal control system will further improve in the period ahead.
By order of the Board
Muhammad Bilal Sheikh

President & CEO
Place: Karachi

AUDITORS’ REVIEW REPORT TO THE MEMBERS ON
STATEMENT OF COMPLIANCE WITH
BEST PRACTICES OF CODE OF CORPORATE GOVERNANCE
We have reviewed the Statement of Compliance with the best practices contained in the Code of Corporate
Governance prepared by the Board of Directors of mybank Limited to comply with Regulation G-1 of the
Prudential Regulations for Corporate / Commercial Banking issued by the State Bank of Pakistan, Listing
Regulation No.37 of the Karachi Stock Exchange and Chapter XIII of the Lahore Stock Exchange where the
Bank is listed.
The responsibility for compliance with the Code is that of the Board of Directors of the Bank. Our responsibility
is to review, to the extent where such compliance can be objectively verified, whether the Statement of
Compliance reflects the status of the Bank’s compliance with the provisions of the Code of Corporate Governance
and report if it does not. A review is limited primarily to inquiries of the Bank personnel and review of various
documents prepared by the Bank to comply with the Code.
As part of our audit of financial statements we are required to obtain an understanding of the accounting and
internal control systems sufficient to plan the audit and develop an effective audit approach. We have not
carried out any special review of the internal control system to enable us to express an opinion as to whether
the Board’s statement on internal control covers all controls and the effectiveness of such internal controls.
Based on our review, nothing has come to our attention, which causes us to believe that the Statement of
Compliance does not appropriately reflect the Bank’s compliance, in all material respects, with the best practices
contained in the Code of Corporate Governance as applicable to the Bank for the year ended December 31,
2006.
Place: Karachi M. Yousuf Adil Saleem & C

Date: February 23, 2007 Chartered Accountants

AUDITORS’ REPORT TO THE MEMBERS
We have audited the annexed balance sheet of mybank Limited (the bank) as at December 31, 2006 and the
related profit and loss account, cash flow statement and statement of changes in equity, together with the notes
forming part thereof (here-in-after referred to as the financial statements) for the year then ended, in which are
incorporated the unaudited certified returns from the branches except for nine branches which have been
audited by us and we state that we have obtained all the information and explanations which, to the best of
our knowledge and belief, were necessary for the purposes of our audit.
It is the responsibility of the bank’s Board of Directors to establish and maintain a system of internal control,
and prepare and present the financial statements in conformity with approved accounting standards and the
requirements of the Banking Companies Ordinance, 1962 (LVII of 1962), and the Companies Ordinance, 1984
(XLVII of 1984). Our responsibility is to express an opinion on these statements based on our audit.
We conducted our audit in accordance with the International Standards on Auditing as applicable in Pakistan.
These standards require that we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of any material misstatement. An audit includes examining, on a test basis, evidence
supporting amounts and disclosures in the financial statements. An audit also includes assessing the accounting
policies and significant estimates made by management, as well as, evaluating the overall presentation of the
financial statements. We believe that our audit provides a reasonable basis for our opinion and after due
verification, which in case of loans and advances covered more than 60 percent of the total loans and advances
of the bank, we report that:
(a) In our opinion proper books of account have been kept by the bank as required by the Companies
Ordinance, 1984 (XLVII of 1984), and the returns referred to above received from the branches have
been found adequate for the purposes of our audit;
(b) In our opinion:
(i) The balance sheet and profit and loss account together with the notes thereon have been drawn
up in conformity with the Banking Companies Ordinance, 1962 (LVII of 1962), and the Companies
Ordinance, 1984 (XLVII of 1984), and are in agreement with the books of account and are further
in accordance with accounting policies consistently applied;
(ii) The expenditure incurred during the year was for the purpose of the bank’s business; and
(iiii) The business conducted, investments made and the expenditures incurred during the year were
in accordance with the objects of the bank and the transactions of the bank which have come
to our notice have been within the powers of the bank;
(c) In our opinion and to the best of our information and according to the explanations given to us the
balance sheet, profit and loss account, cash flow statement and statement of changes in equity together
with the notes forming part thereof, conform with the approved accounting standards as applicable
in Pakistan, and give the information required by the Banking Companies Ordinance, 1962 (LVII of
1962), and the Companies Ordinance, 1984 (XLVII of 1984), in the manner so required and give a true
and fair view of the state of the bank’s affairs as at December 31, 2006 and its true balance of the profit,
its cash flows and changes in equity for the year then ended; and
(d) In our opinion, Zakat deductible at source under the Zakat and Ushr Ordinance, 1980 (XVIII of 1980),
was deducted by the bank and deposited in the Central Zakat Fund established under section 7 of that
Ordinance.
Place: Karachi M. Yousuf Adil Saleem & Co.,

Date: February 23, 2007 Chartered Accountants

Balance Sheet As At December 31, 2006
2006 2005
Note Rupees in ‘000
ASSETS
Cash and balances with treasury banks 6 1,990,052 1,410,398
Balances with other banks 7 1,222,089 404,735
Lendings to financial institutions 8 4,030,887 1,533,503
Investments 9 2,961,220 3,252,736
Advances 10 13,486,839 9,294,381
Operating fixed assets 11 2,036,225 772,148
Deferred tax assets 12 131,587 135,409
Other assets 13 690,581 415,447
26,549,480 17,218,757
LIABILITIES
Bills payable 14 225,322 266,152
Borrowings 15 1,624,470 1,339,662
Deposits and other accounts 16 19,169,226 12,856,615
Sub-ordinated loans – –
Liabilities against assets subject to finance lease – –
Deferred tax liabilities – –
Other liabilities 17 464,828 206,706
21,483,846 14,669,135
NET ASSETS 5,065,634 2,549,622
REPRESENTED BY
Share capital 18 3,085,721 2,057,147

Reserves 254,649 156,072
Unappropriated profit 588,197 278,297
3,928,567 2,491,516
Surplus on revaluation of assets 19 1,137,067 58,106
5,065,634 2,549,622
CONTINGENCIES AND COMMITMENTS 20
The annexed notes 1 to 42 form an integral part of these accounts.
Muhammad Bilal Sheikh Iqbal Alimohamed Sohail Muzaffar Danish Iqbal

President & CEO Chairman Vice Chairman Director

Profit And Loss Account For The Year Ended December 31, 2006
2006 2005
Mark-up / return / interest earned 21 1,685,810 1,026,000

Mark-up / return / interest expensed 22 865,668 322,570
Net mark-up / interest income 820,142 703,430
Provision against non-performing loans and advances 10.3 31,231 200,152
Provision for diminution in the value of investments – –
Bad debts written off directly 10.4 6,541 2,534
37,772 202,686
Net mark-up / interest income after provisions 782,370 500,744
NON MARK-UP/ INTEREST INCOME
Fee, commission and brokerage Income 115,544 68,370
Dividend income 138,094 62,040
Income from dealing in foreign currencies 37,194 15,516
Gain on sale of securities 23 49,927 32,257
Unrealized gain / (loss) on revaluation of
investments classified as held-for-trading 9.4 40,993 (902)
Other income 24 70,486 71,548
Total non mark-up / interest Income 452,238 248,829
1,234,608 749,573
NON MARK-UP/ INTEREST EXPENSES
Administrative expenses 25 587,525 530,997
Other provisions / write-offs 20.5 1,000 5,000
Other charges 26 23,023 2,728
Total non mark-up / interest expenses 611,548 538,725
Extra ordinary / unusual items – –
PROFIT BEFORE TAXATION 623,060 210,848
Taxation - current 126,085 38,827
- prior years’ – 39
- deferred 4,087 (102,268)
27 130,172 (63,402)
PROFIT AFTER TAXATION 492,888 274,250
Unappropriated profit brought forward 278,297 58,897
Profit available for appropriation 771,185 333,147
Basic / diluted earnings per share - Rupees 28 1.89 1.23


Cash Flow Statement For The Year Ended December 31, 2006
2006 2005
CASH FLOW FROM OPERATING ACTIVITIES

Profit before taxation 623,060 210,848
Less: dividend income (138,094) (62,040)
484,966 148,808
Adjustments for non-cash charges
Depreciation 11.2 74,219 50,692
Amortisation 11.3 1,920 16,476
Provision and write-off against non-performing advances 37,772 202,686
Provision against other assets 13.3 1,000 5,000
(Gain) on sale of fixed assets 11.2.3 (3,867) (11,754)
(Gain) on dealing in government securities – (2,500)
111,044 260,600
596,010 409,408
(Increase) / decrease in operating assets
Lendings to financial institutions (2,497,384) (637,213)
Held-for-trading securities (229,751) (49,614)
Advances (4,230,230) (2,251,696)
Others assets (excluding advance taxation) (249,278) (149,541)
(7,206,643) (3,088,064)
Increase/ (decrease) in operating liabilities
Bills Payable (40,830) (5,206)
Borrowings from financial institutions 284,808 864,729
Deposits and other accounts 6,312,611 1,934,100
Other liabilities (excluding current taxation) 132,037 59,150
6,688,626 2,852,773
77,993 174,117
Income tax paid (25,108) (27,261)
Net cash flow from investing activities 52,885 146,856
CASH FLOW FROM INVESTING ACTIVITIES

Net investments in available-for-sale securities (1,531,184) 293,590
Net investments in held-to-maturity securities 1,907,178 (1,478,682)
Dividend income received 136,081 62,040
Investments in operating fixed assets (105,907) (240,239)
Sale proceeds of property and equipment disposed-off 11.2.3 12,239 22,447
Net cash flow (used in) / from investing activities 418,407 (1,340,844)
CASH FLOW FROM FINANCING ACTIVITIES

Issue of share capital 1,028,574 533,334
Dividend paid (102,858) –
Net cash flow from financing activities 925,716 533,334
Effects of exchange rate changes on cash and cash equivalents – –
Increase / (decrease) in cash and cash equivalents 1,397,008 (660,654)
Cash and cash equivalents at beginning of the year 29 1,815,133 2,475,787
Cash and cash equivalents at end of the year 29 3,212,141 1,815,133


Statement Of Changes In Equity For The Year Ended December 31, 2006
Share capital Statutory Unappropriated Total

reserves profit
Rupees in ‘000
Opening balance as at January 01, 2005 1,523,813 101,222 58,897 1,683,932
Profit for the year ended December 31, 2005 – – 274,250 274,250
Transfer to statutory reserve – 54,850 (54,850) –
Issue of share capital 533,334 – – 533,334
Opening balance as at January 01, 2006 2,057,147 156,072 278,297 2,491,516
Profit for the year ended December 31, 2006 – – 492,888 492,888
Transfer from surplus on revaluation of fixed

assets on account of incremental depreciation – – 18,447 18,447
Net income recognised directly in equity – – 511,335 511,335
Transfer to statutory reserve – 98,577 (98,577) –
Cash dividend @50 paisas per share – – (102,858) (102,858)
Issue of share capital 1,028,574 – – 1,028,574
Closing balance as at December 31, 2006 3,085,721 254,649 588,197 3,928,567


Notes to the accounts for the year ended December 31, 2006
1. STATUS AND NATURE OF BUSINESS

mybank Limited was incorporated in Pakistan on October 7, 1991 as a public limited company under
the Companies Ordinance, 1984. The Bank’s registered office is based in Quetta with principal place
of business in Karachi. Its shares are quoted on Karachi and Lahore Stock Exchanges of Pakistan. The
Bank is engaged in commercial banking and related services as described in the Banking Companies
Ordinance, 1962 and operates 50 (2005: 50) branches in Pakistan. Currently the Bank’s medium and
long-term credit rating is A- (A minus), and its short term credit rating is A-2 (A-two) with a stable outlook.
2. BASIS OF PRESENTATION
In accordance with the directives of the Federal Government regarding the shifting of the banking system
to Islamic modes, the State Bank of Pakistan (SBP) has issued various circulars from time to time. Permissible
forms of trade-related modes of financing include purchase of goods by banks from their customers and
immediate resale to them at appropriate mark-up in price on deferred payment basis. The purchases and
sales arising under these arrangements are not reflected in these financial statements as such but are
restricted to the amount of facility actually utilized and the appropriate portion of mark-up there-on.
3. STATEMENT OF COMPLIANCE
These financial statements are prepared in accordance with the directives issued by the State Bank of
Pakistan, the Banking Companies Ordinance, 1962, the Companies Ordinance, 1984, and approved
accounting standards as applicable in Pakistan. Approved accounting standards comprise of such
International Financial Reporting Standards as are notified under the provisions of the Companies
Ordinance, 1984. Wherever the requirements of the Banking Companies Ordinance, 1962, the Companies
Ordinance, 1984, or directives issued by the State Bank of Pakistan and the Securities and Exchange
Commission of Pakistan differ with the requirements of these standards, the requirements of the Banking
Companies Ordinance, 1962, the Companies Ordinance, 1984, and the requirements of the said
directives take precedence.
The SECP has approved the adoption of International Accounting Standard 39, "Financial Instruments:
Recognition and Measurement" and International Accounting Standard 40, "Investment Property". The
requirements of these standards have not been taken into account for the purpose of these financial
statements as the implementation of the said standards has been deferred by SBP, vide BSD circular number
10 dated August 26, 2002, for banks in Pakistan till further instructions. However, investments have been
classified and valued in accordance with the requirements of various circulars issued by SBP.
Standard, interpretation and amendment to published approved accounting standards that are not yet
effective
The following amendments to existing standards have been published that are applicable to the Bank's
financial statements covering annual periods, beginning on or after the following dates:
(i) IAS-1, "Presentation of Financial Statements"
- Capital Disclosures effective from January 01, 2007
(ii) IFRIC 11, IFRS 2- " Group Treasury Share Transactions" effective from March 01, 2007
(iii) IFRIC 12, " Service Concession Arrangements" effective from January 01, 2009
Adoption of the above amendments / interpretations may only impact the extent of disclosures presented
in the financial statements.
In addition to above, a new series of standards called "International Financial Reporting Standards (IFRSs)"
have been introduced and seven IFRSs have been issued by IASB. Out of these, following four IFRSs
have been adopted by SECP vide its S.R.O. (I)/2006 dated December 06, 2006.
(i) IFRS-2 "Share-based Payments";
(ii) IFRS-3 "Business Combinations";
(iii) IFRS-5 " Non-current Assets Held for Sale and Discontinued Operations"; and
(iv) IFRS-6 " Exploration for and Evaluation of Mineral Resources".

The Bank expects that the adoption of these pronouncements mentioned above will have no significant
impact on the Bank's financial statements in the period of initial application.
4. BASIS OF MEASUREMENT
These financial statements have been prepared under the ‘historical cost convention’ as modified by
revaluation of land and buildings and valuation of certain investments and derivative financial instruments
at fair value.
The preparation of financial statements in conformity with International Accounting Standards requires
the use of certain critical accounting estimates. It also requires management to exercise its judgement
in the process of applying the Bank’s accounting policies. The areas involving a higher degree of judgement
or complexity, or areas where assumptions and estimates are significant to the financial statements, are
disclosed in Note 5.13.
5. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The principal accounting policies applied in the preparation of these financial statements are set out
below. These policies have been consistently applied to all the years presented, unless otherwise stated.
5.1 Cash and cash equivalents
Cash and cash equivalents comprise cash and balances with treasury banks, balances with other banks
in current and deposit accounts and call money lending in the money market.
5.2 Lendings to / borrowings from financial institutions
Sale under re-purchase obligation
Securities sold subject to a re-purchase agreement (Repo) are retained as investments and the corresponding
counter party liability is recognized as borrowings from financial institutions. The difference in sales and
re-purchase value is recorded as expense over the period of agreement.
Purchase under re-sale obligation
Securities purchased subject to a re-sale agreement (Reverse Repo) are recognized as lendings to financial
institutions. The difference between contracted and re-sale price is recorded as income over the period
of agreement.
5.3 Investments
All purchase and sale of investments that require delivery within the time frame established by regulations
or market conventions are recognized at the trade date. Trade date is the date on which the Bank commits
to purchase or sell the securities. Classification of investments is made based on the intended purpose
of holding such investments, which is as follows:
Held-for-trading securities
These are investment securities, which are acquired principally for the purpose of generating profit from
short-term fluctuations in price, interest rate movement or dealer's margin.
Held-to-maturity securities
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.
Available-for-sale securities
These are investments, which do not fall under the held-for-trading or held-to-maturity category.
Quoted securities other than those classified under held-to-maturity securities are stated at market value
in accordance with the requirements of the State Bank of Pakistan (SBP). Investments held-to-maturity
are stated at amortized cost.
Surplus / (deficit) arising on revaluation of held-for-trading securities and amortization of held-to-maturity
investments are directly taken to profit and loss account.

In accordance with the requirements of Banking Surveillance Department circular No. 20 dated August
4, 2000, the surplus / (deficit) arising on securities classified as available-for-sale investments for which
ready quotes are available on Reuters page (PKRV) or Stock Exchange is kept in a separate account and
shown in balance sheet below equity. Unquoted equity securities are valued at lower of cost and break-
up value less impairment losses, if any. Break-up value of shares is calculated with reference to net assets
of investee company based on latest available audited financial statements.
Provision for diminution in the value of securities (except debentures, bonds, participatory certificates
and term finance certificates) is made after considering impairment, if any, in their value. Provision for
diminution in value of debentures, bonds, participatory certificates and term finance certificates is made
in accordance with the requirements of Prudential Regulations issued by the State Bank of Pakistan (SBP).
Gains and losses on disposal of investments are taken to profit and loss account in the year in
which they arise.
5.4 Advances
Advances are stated net of general and specific provisions. Specific and general provisions are determined
in accordance with the Prudential Regulations issued by the State Bank of Pakistan and charged to profit
and loss account. Advances are written-off when there is no realistic prospect of recovery.
5.5 Operating fixed assets - owned
Property and equipment
During the year the Bank has changed its accounting policy with respect to the valuation of its immoveable
assets. As per the revised policy, property and equipments, other than land which is carried at revalued
amount, are stated at cost or revalued amounts less accumulated depreciation and impairment
losses, if any.
Depreciation on premises on leasehold land and furniture and fixture is charged to income applying
the reducing balance method and depreciation on computer equipments and vehicles is charged to
income applying straight line method at the rates stated in note 11.2.
Depreciation is provided on assets acquired during the year from the month of purchase of assets, and
on assets disposed-off during the year till the month these assets are disposed-off.
Subsequent costs are included in an asset's carrying amount or recognised as a separate asset, as
appropriate, only when it is probable that future economic benefits associated with the item will flow
to the Bank and the cost of the item can be measured reliably. All other repairs and maintenance are
charged to the income statement during the financial period in which they are incurred.
Gains and losses on disposal of fixed assets are included in income currently.
Surplus on revaluation of fixed assets to the extent of incremental depreciation charged to the related
assets is transferred to retained earnings (net of deferred tax).
The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at each balance
sheet date.
Capital work-in-progress
Capital work-in-progress is stated at cost.
Intangible assets
Intangible assets are stated at cost less accumulated amortization and impairment loss, if any.
Amortisation is provided applying the straight line method at the rates mentioned in note 11.3.

5.6 Impairment
At each balance sheet date, the Bank reviews the carrying amounts of its assets to determine whether
there is any indication that those assets have suffered an impairment loss. If any such indication exists,
the recoverable amount of the assets is estimated in order to determine the extent of the impairment
loss, if any. Recoverable amount is the greater of net selling price and value in use. If the recoverable
amount of an asset is estimated to be less than its carrying amount, the carrying amount of the assets
is reduced to its recoverable amount. Impairment losses are recognized as an expense immediately.
5.7 Taxation
Current
Provision for current taxation is based on taxable income at the current rate of taxation after taking into
account; tax credits, tax rebates and exemption available if any, or half percent of turnover whichever
is higher in accordance with the provisions of Income Tax Ordinance, 2001.
Deferred
Deferred tax is calculated using balance sheet liability method, providing for major temporary differences
arising at the balance sheet date, between the carrying amounts of assets and liabilities for financial
reporting purposes and the amounts used for taxation purposes.
Deferred tax liabilities are generally recognized for all taxable temporary differences and deferred tax
assets are recognized to the extent that it is probable that tax profits and taxable temporary differences
will be available against which deductible temporary differences can be utilized. The carrying amount
of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer
probable that sufficient taxable profits and taxable temporary differences will be available to allow or
part of the asset to be recovered.
Deferred taxes are calculated at the tax rate that are expected to apply to the period when the liability
is settled or the asset realized. Deferred tax is charged or credited in the profit and loss account, except
when it relates to items charged or credited directly to equity, in which case their deferred tax is also
dealt within equity.
5.8 Staff retirement benefits
Defined contribution plan
The Bank operates an approved provident fund scheme for all its permanent employees. Equal monthly
contributions are made, both by the Bank and its employees, to the fund at the rate of 8.33 percent of
the basic salaries of the employees.
Defined benefit plan
The Bank has a gratuity fund, contributions to which have been discontinued since 2002. However, the
Fund being a separate legal entity still exists and the members entitled to the balance of fund shall be
able to draw their balances upon completion of or termination from the employment of the Bank.
5.9 Revenue recognition
Mark-up / return / interest on advances and return on investments are recognized on time proportion
basis except in case of advances classified under the Prudential Regulations issued by the State Bank
of Pakistan (SBP) on which mark-up is recognized on receipt basis. Interest / mark-up on re-scheduled
/ re-structured loans and advances and investments is recognized in accordance with the directives of
the State Bank of Pakistan.
Fees, commission and brokerage income is recognized on accrual basis.
Dividend income is recognized when right to receive is established.
Rent on lockers is recognized on receipt basis.

5.10 Provisions
Provisions are recognized when the Bank has a legal or constructive obligation as a result of past
events, it is probable that the outflow of resources will be required to settle the obligation and a
reliable estimate of the amount can be made. Provisions are reviewed at each balance sheet date
and are adjusted to reflect the current best estimates.
5.11 Foreign currency translation
5.11.1 Functional and presentation currency
These financial statements are presented in rupees, which is the Bank’s functional and
presentation currency.
5.11.2 Transaction and balances
Foreign currency transactions are translated into the functional currency using the exchange rates
prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement
of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities
denominated in foreign currencies are recognized in the income statement. Foreign bills purchased
and forward foreign exchange other than those relating to foreign currency deposits are valued at the
rates applicable to the respective maturities of the relevant foreign bills purchased and forward exchange
contracts.
5.11.3 Commitments
Commitments for outstanding forward foreign exchange contracts are disclosed in these financial
statement at committed amount. Contingent liabilities / commitments for letters of credit and letters
of guarantee denominated in foreign currencies are expressed in functional currency at the rates of
exchange ruling on the balance sheet date.
5.12 Financial instruments
Financial assets and liabilities are recognized at the time the Bank becomes a party to the contractual
provisions of the instruments. Any gain or loss on the recognition and de-recognition of the financial
assets and liabilities is included in the net profit and loss for the year in which it arises.
5.13 Critical accounting judgements and key sources of estimation uncertainty
Critical judgements in applying the Bank’s accounting policies.
In the process of applying the Bank’s accounting policies, management has made the following
judgements that have the most significant effect on the amounts recognized in the financial statements
(a part from those involving estimations, which are dealt with below):
a) Held-to-maturity securities
As described in note 5.3, held-to-maturity securities are investments where the management has
positive intent to hold-to-maturity. The classification of these securities involves management
judgment whether the financial assets are held-to-maturity investments.
b) Taxation and Contingencies
As described in notes 20.4 and 20.5, management considers that the Bank is not likely to incur
further liabilities mentioned therein.
Key sources of estimation uncertainty
The key assumptions concerning the future, and other key sources of estimation uncertainty at the
balance sheet date, that have a significant risk of causing a material adjustment to the carrying amounts
of assets and liabilities within the next financial year, are discussed below:
a) Provision against non-performing advances
The Bank continuously monitors the recoverability of advances and makes general and specific
provisions as considered necessary to comply with the Prudential Regulations issued by the State
Bank of Pakistan (SBP).

The Bank also applies the subjective criteria of classification on regular basis and accordingly the
classification of an advance is downgraded on the basis of evaluation of credit worthiness of borrower,
its cash flows, operations in account and adequacy of security in order to ensure the best estimate of
the provision.
b) Useful life of property and equipment
Useful life of the property and equipment are based on management’s best estimates.
5.14 Off - setting
Financial assets and 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 the net basis
or to realize the assets and to settle the liabilities simultaneously.
2006 2005
6. CASH AND BALANCES WITH TREASURY BANKS

In hand
Local currency 382,481 406,814
Foreign currencies 14,920 20,333
397,401 427,147
With State Bank of Pakistan in
Local currency current accounts 6.1 1,489,763 780,366
Foreign currency current account 6.2 10,111 6,927
Foreign currency deposit account 6.3 25,519 16,946
1,525,393 804,239
With National Bank of Pakistan in
Local currency current accounts 67,258 179,012
1,990,052 1,410,398
6.1 Deposits are maintained with the State Bank of Pakistan (SBP) to comply with their requirements issued
from time to time.
6.2 This represents non-remunerative cash reserve of 5 percent on deposits held under the new foreign
currency account scheme, required to be maintained with the State Bank of Pakistan.
6.3 This represents statutory cash reserve maintained against foreign currencies deposits mobilised under
FE-25 scheme, as prescribed by the State Bank of Pakistan (SBP) and is remunerated on monthly basis
at rate of return specified by the SBP.
2006 2005
7. BALANCES WITH OTHER BANKS

In Pakistan
On current accounts 240,729 248,546
On deposit account 7.1 500,000 –
740,729 248,546
Outside Pakistan
On current accounts 475,392 122,768
On deposit accounts 7.2 5,968 33,421
481,360 156,189
1,222,089 404,735

7.1 This represents placement of funds with a local bank maturing within 3 months of the balance sheet date
and carrying interest of 12.75 percent (2005: Nil) per annum. The principal and interest amount is receivable
at the time of maturity.
7.2 This represents placement of funds with foreign bank amounting to GBP 50,000 (2005: GBP 50,000 and
EURO 400,000) maturing within 1 month of the balance sheet date and carrying interest of 5.00 percent
per annum (2005: 4.37 percent and 2.22 percent per annum respectively). The principal and interest
amount is receivable at the time of maturity.
2006 2005
8. LENDINGS TO FINANCIAL INSTITUTIONS

Call money lendings 8.1 1,025,000 637,000
Repurchase agreement lendings (reverse repo) 8.2 3,005,887 896,503
4,030,887 1,533,503
8.1 These represent clean placements and call money lendings to various non-banking finance companies
and financial institutions with maturity period of 4 days and carry mark-up ranging from 12.00 percent
to 12.50 percent per annum (2005: 5.75 percent to 13.00 percent per annum).
8.2 These represent lendings to financial institutions against purchase of government securities and listed
shares under resale obligation (reverse repo) at mark-up rates ranging from 8.40 percent to 15.00 percent
per annum for periods ranging between 4 to 47 days. These are secured against underlying government
securities and listed shares. The difference between purchase and resale purchase price is treated as
mark-up income and recognised over the period of reverse repo agreement.
2006 2005
Rupees in ‘000
8.3 Particulars of Lending

In local currency 4,030,887 1,533,503
In foreign currencies – –
4,030,887 1,533,503

8.4 Securities held as collateral against lending to financial institution
2006 2005
Held by Further Total Held by Further Total
the Bank given as the Bank given as
collateral collateral
Rupeesin ‘000
Market treasury bills 1,210,227 – 1,210,227 – – –
Pakistan investment bonds 525,000 – 525,000 – – –
Listed companies’ shares 1,270,660 – 1,270,660 896,503 – 896,503
3,005,887 – 3,005,887 896,503 – 896,503
8.5 Market value of the collaterals held under repurchase agreement lending amounts to Rs. 3,678 million.
9. INVESTMENTS
9.1 INVESTMENTS BY TYPES
2006 2005
Note Held by Given as Total Held by Given as Total
the Bank collateral the Bank collateral
Rupees in ‘000
Held-for-trading securities
Listed companies’ shares 248,715 – 248,715 149,788 – 149,788
Mutual fund - units - listed 88,929 – 88,929 – – –
337,644 – 337,644 149,788 – 149,788
Available-for-sale securities
Market Treasury Bills 779,163 – 779,163 – – –
National Investment Trust units 346,250 – 346,250 – – –
Term finance certificates 254,893 – 254,893 – – –
Unlisted companies’ shares 10,000 – 10,000 10,000 – 10,000
Mutual funds - units - listed 313,913 – 313,913 488,035 – 488,035
Mutual funds - units - unlisted 75,000 – 75,000 – – –
Certificates of investment 250,000 – 250,000 – – –
Preference shares 50,000 – 50,000 50,000 – 50,000
2,079,219 – 2,079,219 548,035 – 548,035
Held-to-maturity securities
Pakistan Investment Bonds 539,535 – 539,535 552,198 – 552,198
Market Treasury Bills – – – 1,243,280 – 1,243,280
Term finance certificates – – – 650,484 – 650,484
WAPDA bonds 50,996 – 50,996 51,747 – 51,747
590,531 – 590,531 2,497,709 – 2,497,709
Investment at cost 3,007,394 – 3,007,394 3,195,532 – 3,195,532
Less: Provision for diminution
in value of Investments – – – – – –
Investments (net of provisions) 3,007,394 – 3,007,394 3,195,532 – 3,195,532
Surplus / (deficit) on
revaluation of 9.4 40,993 – 40,993 (902) – (902)
held-for-trading securities
Surplus / (deficit) on
revaluation of available
-for-sale securities 19 (87,167) – (87,167) 58,106 – 58,106
Investments at market value 2,961,220 – 2,961,220 3,252,736 – 3,252,736

2006 2005
9.2 INVESTMENTS BY SEGMENTS
Federal Government Securities:
Market Treasury Bills 9.2.1 779,163 1,243,280
Pakistan Investment Bonds 9.2.1 & 9.2.2 539,535 552,198
1,318,698 1,795,478
Fully Paid up Ordinary Shares:
Listed companies 248,715 149,788
Unlisted companies 10,000 10,000
Preference shares 50,000 50,000
308,715 209,788
Term Finance Certificates, Debentures,
Bonds and Participation Term Certificates:
Listed term finance certificates 200,263 114,986
Unlisted term finance certificates 54,630 535,498
WAPDA bonds 50,996 51,747
305,889 702,231
Other Investments
Mutual funds - units - listed 402,842 488,035
Mutual funds - units - unlisted 75,000 –
Certificate of investment 250,000 –
National Investment Trust - units 346,250 –
1,074,092 488,035
Total investment at cost 3,007,394 3,195,532
Less: Provision for diminution in value of investment – –
Investments (net of provisions) 3,007,394 3,195,532
Surplus / (deficit) on revaluation of
held-for-trading securities 9.4 40,993 (902)
Surplus / (deficit) on revaluation of
available-for-sale securities 19 (87,167) 58,106
Total investments at market value 2,961,220 3,252,736
9.2.1 Market treasury bills and Pakistan investment bonds are held with the State Bank of Pakistan and are
eligible for re-discounting.
9.2.2 This includes securities having face value of Rs. 12.10 million (2005:Rs. 12.10 million) pledged with
National Bank of Pakistan as security to facilitate T.T discounting of the branches of the Bank.

Note 2006 2005
Amount Rating Amount Rating
Rupees in ‘000
9.3 Quality of Available for Sale Securities
Securities (At market value)
Market Treasury Bills 778,860 Unrated –
National Investment Trust-unit 315,991 4 Stars –
Term finance certificates - unlisted
Bosicor Pakistan Ltd. 9.3.1 25,714 Unrated –
Dewan Textile Mill Ltd. 9.3.1 5,000 Unrated –
Dewan Mushtaq Textile Mill Ltd. 9.3.1 5,166 Unrated –
Dewan Farooq Spinning Mills Ltd. 9.3.1 18,750 Unrated –
54,630 –
Term finance certificates - listed
Crescent Leasing Corporation Ltd. 31,177 A- –
Azgard Nine Ltd. 99,980
Telecard Ltd 70,283 A –
201,440 –
Unlisted companies’ shares
Khushhali Bank Ltd. 9.3.2 11,030 A- 10,960 A-
Mutual funds - units - unlisted
NAFA Cash Fund 75,000 A –
Mutual funds - shares - listed
UTP Large Capital Fund
(Formerly ABAMCO 171,131 4 Stars 204,287
composite fund)
Faysal balance growth fund – 126,210
Pak strategic allocation fund 85,000 4 Stars 117,000
Dawood money market fund – 98,644
256,131 546,141
Certificates of Investment
Saudi Pak Leasing 9.3.1 150,000 A-2 –
Security Leasing 9.3.1 100,000 A-2 –
250,000
Preference shares
Pak Elektron Ltd. 9.3.2 129,400 Unrated 122,850 Unrated
Total 2,072,482 679,951
9.3.1 Fair value of these investments can not be calculated as active market does not exist.
9.3.2 These represent the break-up values of the assets which are higher than the cost at which these have
been carried in the financial statements.
9.4 Unrealized gain / (loss) on revaluation of investments classified as held for trading
Note 2006 2005

Rupees in ‘000
Listed companies’ shares 9.7 5,648 (902)
Mutual fund - units - listed 9.8 35,345 –
40,993 (902)

2006 2005
Rupees in ‘000
9.5 Particulars of investments held as strategic investment

UTP large capital funds
(Formerly ABAMCO composite fund) 213,913 213,913
Pakistan strategic allocation fund 100,000 100,000
Faysal balance growth fund – 100,000
Dawood money market fund – 100,000
Preferences shares - Pak Elektron 50,000 50,000
Unlisted Shares - Khushhali Bank Ltd. 10,000 10,000
373,913 573,913
9.6 Principal terms of investments
9.6.1 Particulars of investments held in Government Securities
Investee Maturity Principal Coupon Coupon
Payment Rate % Payment
Pakistan investment bond Feb 2011 to Oct 2013 On maturity 8.00 to 14.00 Semi-annually
Market treasury bills Feb 2007 to Dec 2007 On maturity 8.64 to 9.00 At maturity
9.6.2 Particulars of investments held in Term Finance Certificate

Investee Principal Interest Rate of mark-up profit
Bosicor Pakistan Ltd. After 2 years on equal Semi-annually 6 month KIBOR plus 550 bps with
basis - over 5 years a floor and cap respectively of
9.00 and 13.00 percent per
annum.
Dewan Textile Mills Ltd. Over 4 years Quarterly SBP discount rate plus 1.50
percent with floor and cap
respectively of 7.50 and 12.50
percent per annum.
Dewan Mushtaq Textile Mills Ltd. Over 4 years Quarterly SBP discount rate plus 1.50
percent with floor and cap
respectively of 7.50 and 12.50
percent per annum.
Crescent Leasing Corp. Ltd. Over 5 years Semi-annually Average 'ask side' rate of 6 month
KIBOR plus 175 bps with no floor
and no cap.
Dewan Farooq Spinning Mills Ltd. After 18 months - over Semi-annually Average 6 months KIBOR plus
5 Years 3.75 percent per annum.
Telecard Ltd. Over 6 years Semi-annually Average 6 months KIBOR plus
3.75 percent per annum.
Azgard Nine Ltd. Over 7 years Semi-annually Average 6 months KIBOR plus
3.75 percent per annum.

9.6.3 Particulars of investments held in WAPDA bonds
Bonds and debenture Principal mark-up/ Rate of
Profit Cost mark-up/
profit
Rupees in ‘000
WAPDA bonds - 10th issue Repayment in 5 Years Semi-annually 51,747 SBP discount
rate - 0.25%
9.6.4 Particulars of investments held-certificates of investment
Party Name Face Maturity Principal
Value Date and Mark-
up Payment
Rupees in ‘000
Saudi Pak Leasing 150,000 Jun 03, 2007 On maturity
Security Leasing Corporation 75,000 Mar 29, 2007 On maturity
Security Leasing Corporation 25,000 Mar 30, 2007 On maturity
250,000
9.6.5 Particulars of investments in NIT units
Face Book Market
Value Value Value
Rupees in ‘000
National Investment Trust units 250,000 246,250 223,803

National Investment Trust units 100,000 100,000 92,188
350,000 346,250 315,991
9.7 Investment in listed securities - ordinary shares
2006 2005 Paid up 2006 2005

value per Rupees in ‘000
No. of ordinary shares share (Rupees) Name of Company
350,000 – 10 MCB Bank Ltd. 81,550 –

170,000 – 10 National Bank of Pakistan 37,273 –
750,000 – 10 Oil and Gas Development Corporation 86,287 –
190,000 – 10 Pakistan Petroleum Ltd. 43,605 –
– 178,500 10 Pakistan Oil Fields Ltd. – 74,988
– 680,000 10 D. G. Khan Cement Ltd. – 74,800
1,460,000 858,500 248,715 149,788
Add: Surplus / (loss) on revaluation of shares - net 5,648 (902)

Market Value as on December 31 254,363 148,886

9.8 Investment in mutual funds
No. of Units Book Market

Investee Value Value
Rupees in ‘000
UTP large capital fund Close ended 21,391,312 213,913 171,131
(Formerly ABAMCO composite fund)
Pak strategic allocation fund Close ended 10,000,000 100,000 85,000
Faysal balance growth fund Open ended 1,234,953 88,929 124,274
NAFA cash fund Open ended 7,126,974 75,000 75,000
39,753,239 477,842 455,405
Less: Deficit on revaluation of mutual funds (net)- available - for - sale (57,782)
Add: Surplus revaluation of mutual funds (net) - held-for-trading 35,345
Market Value as on December 31 455,405
9.9 Investment in term finance certificate - listed - each with face value of Rs. 5,000
Redeemed Value
2006 2005
No. of certificates Name of Company Name of Chief Executive Rupees in ‘000
10,000 10,000 Crescent Leasing Mr. Javed A. Challea 30,000 40,000
Corporation Ltd.
15,000 15,000 Telecard Ltd. Mr. Sultan-ul-Arfeen 70,283 74,985
20,000 20,000 Azgard Nine Ltd. Mr. Mueen Afzal 99,980 100,000
45,000 45,000 200,263 214,985
Add: Surplus on revaluation of TFCs - (net) 1,177 –

Market Value as on December 31 201,440 214,985
Investment in term finance certificate - unlisted - each with face value of Rs. 5,000
Pak Mobile
– 20,000 Telecommunication Ltd. Mr. Hamid Farooq – 100,000
6,000 6,000 Bosicor Pakistan Ltd. Mr. Pervaiz Abbasi 25,714 30,000
Dewan Textile Mr. Dewan Ghalib
8,000 8,000 Mill Ltd. Mustafa Khalid 5,000 15,000
Dewan Mushtaq Mr. Dewan Ghalib
8,266 8,266 Textile Mill Ltd. Mustafa Khalid 5,166 15,498
Dewan Farooq
5,000 5,000 Spinning Mills Ltd. M. Yousuf Farooqi 18,750 25,000
Pak Arab Fertilizer
– 25 Pvt. Ltd. Mr. Tanveer Ahmed – 250,000
(face value of
Rs. 10 million each)
27,266 47,291 54,630 435,498
72,266 92,291 256,070 650,483

9.10 Investment in unlisted securities - ordinary shares / preference shares
Cost / Total Based on
No. of shares / Note Name of Investee Name of Chief Percentage Paid up Paid up Break accounts
units held Company Executive of holding Value per Value up Value audited
% share / unit as at
Rupees in ‘000
1,000,000 9.10.1 Khushhali Bank Ltd. Mr. Ghalib Nishtar 0.60% 10 10,000 11,030 Dec-05
5,000,000 9.10.2 Pak Elektron Ltd. (PEL) Mr. Naseem Saigol 4.00% 10 50,000 129,400 Jun-06
9.10.1 This represents the Bank’s subscription towards the paid up capital of Khushhali Bank in terms of
SBP letter No. BSD ( RU-26) 265)/625-MfB/13817/00 dated August 07, 2000. The break up value
per share was Rs.11.03.
9.10.2 These preference shares carry fixed dividend of 9.50 percent on cumulative basis. For redemption,
payment of call option can be exercised by PEL upto 75 percent after 3 years but before 5 years of
issue at the higher of three months average quoted price of preference shares plus any cumulative
unpaid dividend or issue price plus call premium of 1.0 percent plus any cumulative unpaid dividends.
Conversion option of preference shares into ordinary shares can be exercised by the Bank upto 25
percent after 3 years but before 5 years of issue date as per ratio specified in the agreement.
2006 2005
10. ADVANCES
Loans, cash credits, running finances, etc.
In Pakistan 13,123,628 8,637,206
Outside Pakistan – –
13,123,628 8,637,206
Bills discounted and purchased
(excluding treasury bills)
Payable in Pakistan 467,098 546,303
Payable outside Pakistan 296,054 140,351
763,152 686,654
Financing in respect of
continuous funding system (CFS) 10.7 6,743 389,145
Advances - Gross 10.1 13,893,523 9,713,005
Provision against loans and advances
Specific provision (403,844) (413,379)
General provision against consumer loans (2,840) (5,245)
10.3 (406,684) (418,624)
Advances - net of provision 13,486,839 9,294,381
10.1 Particulars of advances - Gross
10.1.1 In local currency 13,886,275 9,713,005
In foreign currencies 7,248 –
13,893,523 9,713,005
10.1.2 Short Term ( for upto one year) 12,354,524 8,135,151

Long Term ( for over one year) 1,538,999 1,577,854
13,893,523 9,713,005

10.2 Advances include Rs.1,011.020 million (2005: 1,313.237 million) which have been placed under
non-performing status as detailed below:
2006
Category of Classification Classified Advances Provision Required Provision Held
Domestic Overseas Total Domestic Overseas Total Domestic Overseas Total
Rupees in ‘000
Other Assets Especially Mentioned 4,660 – 4,660 – – – – – –

Substandard 46,649 – 46,649 7,220 – 7,220 7,220 – 7,220
Doubtful 19,177 – 19,177 8,376 – 8,376 8,376 – 8,376
Loss 940,534 – 940,534 388,248 – 388,248 388,248 – 388,248
1,011,020 – 1,011,020 403,844 – 403,844 403,844 – 403,844
10.3 Particulars of provision against non-performing advances

2006 2005
Specific General Total Specific General Total
Rupees in ‘000
Opening balance 413,379 5,245 418,624 258,735 4,125 262,860
Exchange adjustments – – – – – –
Charge for the year 94,413 – 94,413 231,762 1,120 232,882
Reversals (60,777) (2,405) (63,182) (32,730) – (32,730)
33,636 (2,405) 31,231 199,032 1,120 200,152
Amounts written off 10.4 (43,171) – (43,171) (44,388) – (44,388)
Closing balance 403,844 2,840 406,684 413,379 5,245 418,624
10.3.1 Particulars of provisions against non-performing advances

2006 2005
Specific General Total Specific General Total
Rupees in ‘000
In local currency 403,844 2,840 406,684 413,379 5,245 418,624
In foreign currencies – – – – – –
403,844 2,840 406,684 413,379 5,245 418,624
10.3.2 During the current year, in order to comply with the requirements of BSD Circular No. 02, dated
January 14, 2006, issued by the SBP, the Bank changed the method of computation of provision
against the non-performing advances. The Circular requires the Bank to create provision at a rate of
25 percent, instead of 10 percent of non-performing loans, in the substandard category. The Circular
also requires the adjustment of the Forced Sale Value (FSV) of the collaterals to financing facilities
of Rs. 10.00 million and above as against the previous requirement to restrict the same to financing
facilities of Rs. 5.00 million and above, for the purposes of determining provision against non-
performing advances.
Had the above referred increase in the rate of the provision for substandard category and increase
in the limit of financing for taking the benefit of the FSV not occurred, profit before taxation for the
current period and advances net of provision at the end of the current period would have been higher
by Rs. 61.00 million.

2006 2005
10.4 Particulars of write offs:
10.4.1 Against provision 10.3 43,171 44,388
Directly charged to profit and loss account 6,541 2,534
49,712 46,922
10.4.2 Write offs of Rs. 500,000 and above 10.5 49,083 46,499
Write offs of Below Rs. 500,000 629 423
49,712 46,922
10.5 Details of loan write off of rs. 500,000/- and above

In terms of sub-section (3) of Section 33A of the Banking Companies Ordinance, 1962 the Statement
in respect of written-off loans or any other financial relief of five hundred thousand rupees or above
allowed to a person(s) during the year ended December 31, 2006 is given at Annexure-I. However,
this write-off does not affect the Bank's right to recover the debt from their customers.
10.6 Particulars of loans and advances to directors,
associated companies, etc.
2006 2005
Rupees in ‘000
Debts due from directors, executives or
officers of the Bank or any of them either
severally or jointly with any other persons
Balance at beginning of year 58,964 9,404
Loans granted during the year 5,211 64,982
Repayments (10,098) (15,422)
Balance at end of year 54,077 58,964
Debts due from companies or firms in
which the directors of the Bank
are interested as directors, partners or
in the case of private companies as members
Balance at beginning of year 14,340 7,477
Loans granted during the year 39,992 43,511
Repayments (34,332) (36,648)
Balance at end of year 20,000 14,340
74,077 73,304
10.7 This represents secured financing in respect of purchase of shares from the CFS market and carries
markup of 12.63 percent (2005: 12.12 percent) per annum.
11. OPERATING FIXED ASSETS 2006 2005

Capital work-in-progress 11.1 132,133 159,363

Property and equipment 11.2 1,900,364 609,602
Intangible assets 11.3 3,728 3,183
2,036,225 772,148

2006 2005
11.1 Capital work-in-progress
Civil works 628 25,807
Equipments - 29,719
Advances to suppliers and contractors 11.1.1 131,505 103,837
132,133 159,363
11.1.1 This includes payments made towards implementation of Misys (Core Banking Application
Software System)
11.2 Property and equipment

Book value Rate of
COST DEPRECIATION
Balance Balance Balance Balance as at Dec 31, depreciation
Note as at Jan 01, Additions/ Revaluation as at Dec 31, as at Jan 01, Charge/ Revalution as at Dec 31,
2006 (deletions) adjustment 2006 2006 impairment adjustment 2006 2006 %
Rupees in ‘000
Lease hold land 11.2.1 – – 504,782 504,782 – – – – 504,782

Buildings 11.2.1 659,127 67,678 563,677 1,290,482 190,179 42,934 (174,222) 58,891 1,231,591 5
Furnitures and fixtures 184,749 23,439 – 202,816 116,032 10,581 – 122,707 80,109 10 to 33.33
(5,372) (3,906)
Computer equipments 113,281 7,954 – 121,235 97,889 6,266 – 104,155 17,080 25
Vehicles 94,080 31,601 – 107,667 37,535 14,438 – 40,865 66,802 20
(18,014) (11,108) –
2006 1,051,237 130,672 1,068,459 2,226,982 441,635 74,219 (174,222) 326,618 1,900,364
11.2.3 (23,386) (15,014)
COST DEPRECIATION Book value
Balance, Additions / Balance, Balance, Balance, Balance, Rate of

as at Jan 1, (deletions) as at Dec 31, as at Jan 1, Charge / as at Dec 31, as at Dec 31, depreciation
2005 2005 2005 impairment 2005 2005 %
(Rupees in ‘000)
Tangible
Premises on lease
hold land 634,473 27,423 659,127 167,395 23,634 190,179 468,948 5
(2,769) (850)
Furniture and fixture 175,218 19,306 184,749 114,247 8,736 116,032 68,717 10 to 33.33
(9,775) (6,951)
Computer equipments 106,518 6,763 113,281 90,871 7,018 97,889 15,392 25
Vehicles 83,927 43,020 94,080 53,148 11,304 37,535 56,545 20
(32,867) (26,917)
2005 1,000,136 96,512 1,051,237 425,661 50,692 441,635 609,602
(45,411) (34,718)
11.2.1 Previously the break-up of land and buildings as separate categories of fixed assets had not been
given, as in many cases cost of land had been merged with the cost of building at the time of purchase.
During the current year a detailed exercise was conducted by Sadruddin Associates (Pvt.) Limited
(independent valuer) to determine the cost of land. Based on the report of the valuation consultants,
the value of land has been transferred from the land and buildings category and is being shown
separately

11.2.2 The properties of the Bank were revalued on June 30, 2006 by Sadruddin Associates (Pvt.) Limited
on the basis of market value. This valuation was incorporated at June 30, 2006. The revaluation
resulted in a surplus of Rs.1,242.681 million of these assets, details of which are as follows:
Description Book value Revalued Revaluation Valuer Date of
before Amount Surplus Valuation
Revaluation
Rupees in ‘000
M/s
Lease hold land – 504,782 504,782 Sadruddin
Buildings 441,254 1,179,153 737,899 Associates 30-June-06
441,254 1,683,935 1,242,681
Had there been no revaluation the carrying amount of land and building would have been
Rs. 512.139 million. Due to non-availability of breakup of land and buildings before revaluation,
separate disclosure of carrying amount of these land and buildings can not be given.
11.2.3 Details of disposals of fixed assets
Description Cost Accumulated WDV Sale Gain / Mode of Name of purchaser
depreciation proceeds loss disposal
Vehicles Rupees in ‘000
1 Toyota Corolla 557 557 – 375 375 Quotations Mr. Adnan Bhatti
3 Suzuki Swift 363 363 – 155 155 Quotations Mr. Adnan Bhatti
5 Honda Civic 723 723 – 450 450 Negotiation Insurance Claim Recovered
6 Honda Civic 828 828 – 238 238 Negotiation Ch. Nazir Ahmed (EVP)
7 Toyota Corolla 602 602 – 275 275 Negotiation Mr. Ajmal Khan (VP)
8 Toyota Corolla 602 602 – 275 275 Quotations Mr. Moin ul Haq
9 Suzuki Khyber 365 365 – 160 160 Quotations Mr. Ahmed Bhatti
10 Yamaha 100 48 48 – 13 13 Quotations Mr. Mohammad Iqbal
11 Vespa Scooter 60 60 – 10 10 Quotations Mr. Mohammad Iqbal
14 Honda Civic 858 858 – 425 425 Quotations Mr. Adnan Bhatti
15 Toyota Corolla 619 619 – 450 450 Quotations Mr. Iqbal Saleem
16 Suzuki Baleno 749 524 225 280 55 Quotations Mr. Ajmal Kanju
17 Honda Civic 1,255 1,255 – 390 390 Quotations Mr. Adnan Bhatti
18 Toyota Corolla 679 679 – 500 500 Quotations Mr. Iqbal Saleem
19 Mercedez Benz 4,400 1,100 3,300 3,550 250 Quotations Mr. Bahauddin Khan
20 Suzuki Swift 205 205 – 85 85 Quotations Mr. Masood Ahmed
21 Toyota Land Cruiser 3,689 308 3,381 3,125 (256) Quotations Mr. Shshid Mian
18,014 11,108 6,906 11,583 4,677

Furniture & Fixture
Other items having
book value of less than
Rs. 0.25 million or cost
of less than Rs. 1 million
which ever is lower 5,372 3,906 1,466 656 (810)
23,386 15,014 8,372 12,239 3,867
11.2.4 The land and buildings currently in use of the bank include certain properties that have been
acquired in satisfaction of claims. The carrying amount of these properties as at December 31,
2006 amounted to Rs. 53.57 million.
11.3 Intangible assets
COST AMORTISATION Book value Rate of
Balance Additions/ Balance Balance Amortisation/ Balance
as at Jan (Deletions) as at Dec as at Jan Impairment as at Dec at closing amortization
01, 2006 31, 2006 01, 2006 31, 2006 Dec 31, 2006 %
Rupees in ‘000
2006 5,620 2,465 8,085 2,437 1,920 4,357 3,728 33.33
2005 2,956 2,664 5,620 985 1,452 2,437 3,183

2006 2005
12. DEFERRED TAX ASSETS
Deferred tax debits arising in respect of
Provision against advances 142,082 146,489
Provision against other assets 2,100 1,750
Mark-up in suspense account 11,489 15,451
155,671 163,690
Deferred tax credits arising due to
Accelerated tax depreciation (24,084) (28,281)
131,587 135,409
13. OTHER ASSETS

Income / mark-up accrued in local currency 13.1 & 13.2 365,438 175,480
Advances, deposits, advance rent
and other prepayments 114,481 115,639
Advance taxation 128,176 103,333
Branch adjustment account 31,070 –
Unrealized gain on forward foreign exchange contracts 3,880 –
Others 54,250 26,709
697,295 421,161
Less: provision held against other assets 13.3 (6,714) (5,714)
Other assets (net of provision) 690,581 415,447
13.1 This balance has been arrived at after adjusting mark-up in suspense accounts of Rs. 209.479 million
(2005: Rs. 175.480 million)
13.2 This includes the mark-up accrued on related parties transaction amounting to Rs.0.637 million
(2005: Rs.0.502 million)
13.3 Provision against other assets
Opening balance 5,714 714
Charge for the year 1,000 5,000
Reversals – –
Amount Written off – –
Closing balance 6,714 5,714
14. BILLS PAYABLE

In Pakistan 225,322 266,152
225,322 266,152
15. BORROWINGS
In Pakistan 15.1 1,624,470 1,339,662
1,624,470 1,339,662

2006 2005
15.1 Particulars of borrowings with respect to currencies
In local currency 1,563,560 1,291,891
In foreign currencies 60,910 47,771
1,624,470 1,339,662
15.2 Details of borrowings secured / unsecured
Secured
Borrowings from the State Bank of Pakistan
Under export refinance scheme 15.3 1,450,805 807,750
Under Long Term Finance -
Export Oriented Products
Scheme (LTF-EOP) 15.4 112,755 34,141
1,563,560 841,891
Unsecured
Call borrowings – 450,000
Borrowing from financial institutions 15.5 60,910 47,771
60,910 497,771
1,624,470 1,339,662
15.3 The Bank has entered into agreement with the State Bank of Pakistan (SBP) for extending export re-
finance to customers. As per the terms of the agreement, the Bank has granted the SBP the right to recover
the outstanding amount from the Bank at the date of maturity by directly debiting the current account
maintained with the SBP. The effective mark-up rate ranges from 6.50% to 7.50% (2005: 3.50% to
7.50%) payable on quarterly basis.
15.4 The Bank has entered into agreement with the State Bank of Pakistan (SBP) for extending LTF-EOP to
customers. As per the terms of the agreement, the Bank has granted the SBP the right to recover the
outstanding amount from the Bank at the date of maturity by directly debiting the current account maintained
with the SBP. The effective mark-up rate is 5.00% per annum (2005: 5.00%) payable on quarterly basis.
These LTF-EOP have the maturity of 7 years and 6 months from the date of contract with the SBP.
15.5 This represents foreign currency borrowings aggregating USD 1,000,000 (2005: USD 800,000) carrying
mark-up of 6.00 % per annum payable on maturity (2005: 3.80 % to 4.20 %), having maturities upto
June 30, 2007.
16. DEPOSITS AND OTHER ACCOUNTS 2006 2005
Customers
Fixed deposits 4,476,246 2,292,893
Savings deposits 7,047,793 5,006,692
Non-remunerative
Current Accounts 4,476,836 5,122,419
Call deposits 179,710 200,947
Margin Accounts 343,641 209,814
16,524,226 12,832,765
Financial institutions
Remunerative deposits 2,645,000 23,850
Non-remunerative deposits – –
2,645,000 23,850
19,169,226 12,856,615

2006 2005
16.1 Particulars of deposits
In local currency 16.1.1 19,025,326 12,732,544
In foreign currencies 143,900 124,071
19,169,226 12,856,615
16.1.1 The above includes deposits of related parties amounting to Rs.31.128 million. ( 2005 : 28.325 million)
17. OTHER LIABILITIES

Mark-up / return / interest payable in local currency 221,283 106,611
Mark-up / return / interest payable in foreign currencies 1,613 2,420
Accrued expenses 6,211 6,729
Provision for taxation 190,417 64,332
Dividends payable 1,421 –
Branch adjustment account – 1,656
Unrealized loss on forward foreign exchange contracts – 5,123
Payable to defined contribution plan 720 1,305
Excise duty Payable 17.1 342 –
Others 42,821 18,530
464,828 206,706
17.1 This represents the excise duty payable on services provided by the Bank for the month of December
2006 under section 40A of Federal Excise Act 2005, relating to special procedures for collection of
excise duty.
18. SHARE CAPITAL 2006 2005

Rupees in ‘000
18.1 Authorized capital
2006 2005
No. of shares in ‘000
700,000 250,000 Ordinary shares of Rs.10 each 7,000,000 2,500,000
18.2 Issued, subscribed and paid up

No. of shares in ‘000
303,903 201,046 Fully paid in cash 3,039,033 2,010,459

4,669 4,669 Issued as bonus shares 46,688 46,688
308,572 205,715 3,085,721 2,057,147
During the year paid-up capital was raised through right issue offering 50 shares (2005: 35 shares)
for every 100 shares held at face value of Rs. 10 each.

2006 2005
19. SURPLUS / (DEFICIT) ON REVALUATION OF ASSETS

Surplus on revaluation of fixed assets
Surplus on revaluation of fixed assets 19.1 1,242,681 –
Less: Incremental depreciation charge for the year (18,447) –
1,224,234 –
Surplus / (deficit) on revaluation of available-for-sale securities
Federal Government securities:
Market Treasury Bills (303) –
Term finance certificates 1,177 –
Other Investments
Mutual funds-units-listed (57,782) 58,106
National Investment Trust units (30,259) –
(87,167) 58,106
1,137,067 58,106
19.1 The Bank's properties were revalued by an independent professional valuer as on June 30, 2006, on the
basis of current market value. The revaluation has resulted in surplus on revaluation of fixed assets of
Rs. 1,242.681 million.
2006 2005
Rupees in ‘000
20 CONTINGENCIES AND COMMITMENTS
20.1 Direct credit substitutes

i) Government – –
ii) Banks and other financial institutions – –
iii) Others 2,520,183 850,854
20.2 Transaction-related contingent liabilities
Contingent liabilities in respect of guarantees
given, favouring
i) Government 970,739 606,076
ii) Banks and other financial institutions 20,896 –
iii) Others 367,695 203,651
Guarantees include Rs 1.685 million issued in favor of Collector of Custom on behalf of MGM Corporation
(a related party) expired on January 8, 2004 against which Collector of Custom has lodged a claim with
the Bank on June 16, 2004. MGM has filed a suit against the said order and obtained a stay from the
Honourable High Court of Sindh and the matter is subjudicated at present.

2006 2005
Rupees in ‘000
20.3 Trade-related contingent liabilities

Contingent liabilities in respect of letter of credits accepted, favouring
i) Banks and other financial institutions 5,086,360 1,994,737
20.4 Taxation
Return filed by the Bank for tax year 2006 (Financial year 2005) has been assessed under the
self assessment scheme envisaged in section 120 of the Income Tax Ordinance, 2001. In respect of
assessment years 1999-2000 and 2002-2003, the bank has preferred appeal against various disallowances
by tax department with tax impact of Rs. 3.397 million. While finalizing assessments for the tax years
2003, 2004 and 2005, the taxation officer has issued notice u/s 122(5A) of the Income Tax Ordinance,
2001, intending to disallow certain deductions and raised a demand of Rs.149.217 million. The Bank
has appealed before the Commissioner of Income Tax (Appeals), where matter is pending disposal.
Further, the bank has preferred appeals before various appellate forums of Azad Jammu and Kashmir,
where the matter is pending disposal, regarding excessive assessments on account of profits relating to
Azad Jammu and Kashmir branches for the assessment years 2000-2001, 2001-2002, 2002-2003, and
tax year 2003 and 2004 against creation of tax demand aggregating Rs.50.106 million. No provision
has been made in the financial statements, as the management is confident about favorable outcome
of the above matters.
20.5 Other Contingencies
In the year 2004, forward purchase of Pakistan Investment Bonds (PIB's) with face value of Rs. 250
million was entered into with Speedway Fondmetall (Private) Limited (Speedway). The deal was not
honoured by Speedway on the due date and the contract was rolled over subject to receipt of Rs. 6
million and mortgage of properties. Consequent upon the failure by Speedway to honour the terms of
the contract, the Bank served a final notice intimating to settle the deal within stipulated time otherwise
the Bank will liquidate the deal, and claim the loss on deal by taking legal recourse. In response,
Speedway filed a suit against the Bank and obtained stay from Honorable High Court of Sindh against
the sale of PIB's which was vacated by the High Court during the year 2005.
The Bank started proceeding during the period to recover the loss on the deal by disposing off the mortgaged
properties. However, Speedway filed another suit and obtained stay from the court against the sale of the
properties mortgaged with the Bank, which was also dismissed as withdrawn by Speedway. Speedway filed
third suit in the Banking Court No.2 against publication by which the mortgage properties were put to sale.
The Bank has also filed recovery suit of the Speedway in the Honourable High Court of Sindh. Subsequently
the bank moved an application for transfer of the suit filed by the Speedway in Banking Court No. 2 to
the Honourable High Court of Sindh, so that the two suits are heard together in the apex Court. In this
regard a provision of Rs. 6 million (Note 13.3) has been kept in the financial statements as a matter of
prudence against the claim receivable of Rs. 26 million. Management is confident about the favourable
outcome of the case.

2006 2005
Rupees in ‘000
20.6 Commitments in respect of forward exchange contracts

Sale 1,326,785 370,895
Purchase 1,196,758 537,581
Principal Terms of Agreement
Sale:
Currencies Counter Parties Maturity
USD Banks and financial institutions Jan 04, 2007 - Jun 18, 2007
USD Customers Jan 12, 2007 - Mar 10, 2007
EURO Banks and financial institutions Jan 05, 2007 - Apr 13, 2007
GBP Banks and financial institutions Jan 04, 2007 - Mar 26, 2007
Purchase:
Currencies Counter Parties Maturity
USD Banks and financial institutions Jan 04, 2007 - Apr 13, 2007
USD Customers Jun 02, 2007
EURO Customers Jan 12, 2007 - Apr 10, 2007
GBP Banks and financial institutions Jan 04, 2007
GBP Customers Jan 05, 2007 - Mar 30, 2007
2006 2005
Rupees in ‘000
20.7 Commitments in respect of sale and purchase of securities

Purchased under re-sale agreements 3,028,496 1,293,348
Forward sale of equity securities 252,149 151,167
20.8 Commitments to extent credit
The Bank has made commitments to extend credits to its customers in the normal course of business
that amounts to Rs 16.535 billion as at Dec. 31, 2006 (2005: 1.783 billion). These being revocable
commitments do not attract any significant penalty or expense if the facility is unilaterally withdrawn.

2006 2005
21. Mark-up / Return / Interest earned

a) On Loans and advances to:
i) Customers 21.1 1,228,039 639,444
ii) Financial institutions – –
b) On Investments in:
i) Held-for-trading securities – –
ii) Available-for-sale securities 184,636 –
iii) Held-to-maturity securities 21.2 35,760 135,843
c) On Deposits with financial institutions 17,096 3,852
d) On Securities purchased under resale agreements
i) Govenment 26,207 81,047
ii) Shares 149,522
iii) CFS 22,904 156,385
e) Call money lendings 21,646 9,429
1,685,810 1,026,000
21.1 This includes mark-up earned on advances to associated undertakings of Rs. 2.090 million
(2005: Rs 1.375 million).
21.2 This balance has been arrived at after adjusting amortization of PIBs of Rs. 13.415 million
(2005: Rs 15.024 million).
2006 2005
Rupees in ‘000
22. Mark-up / Return / Interest expensed
Deposits 816,430 265,049
Securities sold under re-purchase agreements 1,670 6,579
Other short term borrowings 27,237 31,699
Borrowing from the State Bank of Pakistan 20,331 19,243
865,668 322,570
23. Gain on sale of securities

Federal Government Securities
Market Treasury Bills – 2,500
Shares-Listed 27,713 29,757

Mutual Fund 22,214 –
49,927 32,257
24. OTHER INCOME

Net profit on sale of fixed assests 3,867 11,754
Recovery income 36,466 29,461
Rent of lockers 2,450 2,727
Miscellaneous 27,703 27,606
70,486 71,548

2006 2005
25. ADMINISTRATIVE EXPENSES

Salaries, allowances, etc. 259,077 222,922
Contribution to defined contribution plan 7,839 7,118
Non- executive directors’ fees, allowances
and other expens 637 –
Rent, taxes, insurance, electricity, etc. 67,781 68,957
Legal and professional charges 8,596 6,798
Communications 21,565 23,144
Repairs and maintenance 10,463 10,318
Donations 25.1 15 1,202
Stationery and printing 18,243 14,802
Advertisement and publicity 9,460 21,579
Auditors’ remuneration 25.2 1,175 1,175
Depreciation 11.2 74,219 50,692
Amortisation 11.3 1,920 1,452
Travelling and Conveyance 23,362 21,565
Security Charges 7,915 5,585
Others 75,258 73,688
587,525 530,997
25.1 This represents donation paid to President’s Earthquake Relief Fund

25.2 Auditors’ remuneration
Audit fee 1,000 1,000
Special certifications and sundry advisory services 75 75
Out-of- pocket expenses 100 100
1,175 1,175
26. OTHER CHARGES
Penalties imposed by the State Bank of Pakistan 20,851 1,070
Stock Exchange Listing Fee 2,172 1,658
23,023 2,728
27. TAXATION
For the year
Current 126,085 38,827
Deferred 4,087 (102,268)
130,172 (63,441)
For the prior year(s)
Current – 39
Deferred – –
– 39
130,172 (63,402)

2006 2005
27.1 Relationship between tax expense and accounting profit

Accounting profit for the year 623,060 210,848
Tax rate 35% 38%
Tax on accounting profit 218,071 80,122
Tax effect on separate block of income (9,132) (22,638)
Tax effect of permanent differences (62,120) (59,276)
Tax effect of deductible temporary differences
previously unrecognised (16,647) (31,134)
Tax effect of items chargeable to tax at reduced rates – (30,515)
Tax charge for the prior year – 39
Tax expense for the year 130,172 (63,402)
28. EARNINGS PER SHARE - BASIC AND DILUTED

There is no diluted effect on the basic earnings per share of the Bank
Profit for the year - Rupees in thousand 492,888 274,250
Weighted average number of ordinary shares (in thousand) 261,229 223,226
Basic earnings per share - Rupees 1.89 1.23
29. CASH AND CASH EQUIVALENTS

Cash and Balance with treasury banks 6 1,990,052 1,410,398
Balance with other banks 7 1,222,089 404,735
3,212,141 1,815,133
30. STAFF STRENGTH

2006 2005
Number
Permanent 916 924
Temporary / on contractual basis 53 54
Total Staff Strength 969 978
31. DEFINED CONTRIBUTION PLAN

The Bank operates an approved contributory provident fund for 916 employees (2005: 924 employees)
where contributions are made by the Bank and employees @ 8.33 % (2005: 8.33 %) of the basic salary.
During the year, the Bank has contributed Rs.8.474 million ( 2005: Rs. 7.118 million) in respect of this
fund.

32 COMPENSATION OF DIRECTORS AND EXECUTIVES
President / Chief Exectutiive Directors Executives

2006 2005 2006 2005 2006 2005
Rupees in ‘000
Fees – – 637 –
Managerial remuneration 6,901 6,642 – – 34,001 7,467
Contribution to defined contribution plan – – – – 29,343 622
Rent and house maintenance 1,263 – – – 15,301 3,360
Utilities – – – – 3,259 848
Medical 281 177 – – 2,720 475
Conveyance 314 282 – – 13,445 1,631
Others 183 699 – – 9,088 2,310
8,942 7,800 637 – 107,157 16,713
Number of persons 1 1 7 7 71 8
The Chief Executive and Executives are provided with free use of Bank’s maintained cars. Executive means
employees, other then the Chief Executive Officer and directors, whose basic salary exceeds five hundred
thousand in a financial year.
33 FAIR VALUE OF FINANCIAL INSTRUMENTS

33.1 On-balance sheet financial instruments
2006 2005
Book value Fair value Book value Fair value
Rupees in ‘000
Assets
Cash balances with treasury banks 1,990,052 1,990,052 1,410,398 1,410,398
Balances with other banks 1,222,089 1,222,089 404,735 404,735
Lending to financial institutions 4,030,887 4,030,887 1,533,503 1,533,503
Investments 2,961,220 2,950,537 3,252,736 3,172,152
Advances 13,486,839 13,486,839 9,294,381 9,294,381
Other assets 369,318 369,318 175,480 175,480
24,060,405 24,049,722 16,071,233 15,990,649
Liabilities
Bills payable 225,322 225,322 266,152 266,152
Borrowings 1,624,470 1,624,470 1,339,662 1,339,662
Deposits and other accounts 19,169,226 19,169,226 12,856,615 12,856,615
Sub-ordinated loans – – – –
Sub-ordinated loans – – – –
Other liabilities 231,248 231,248 123,844 123,844
21,250,266 21,250,266 14,586,273 14,586,273

2006 2005
Book value Fair value Book value Fair value
Rupees in ‘000
33.2 Off-balance sheet financial instruments
Forward purchase of foreign exchange 1,196,758 1,196,758 537,581 537,581
Forward sale of foreign exchange 1,326,785 1,326,785 370,895 370,895
Purchase under re-sale agreements 3,028,496 3,028,496 1,293,348 1,293,348
Forward sale of equity securities 252,149 252,149 151,167 151,167
Investment in quoted shares and government securities are valued at market prices taken from Stock
Exchange quotations and Reuters (PKRV) page. Fair value of investments in unquoted shares have been
estimated using the net assets value based on latest available financial statements.
Fair value of loans and advances can not be determined with reasonable accuracy as there is no active
market. Loans and advances are re-priced frequently on market rates. The provision for impairment of
advances has been accounted for in accordance with the Bank's accounting policy as stated in note 5.4.
Fair value of all other assets and liabilities including deposits and capital / reserves cannot be calculated
with reasonable accuracy as active market does not exist for these instruments. Most of the deposits are
short term in nature. In management's opinion fair value of these instruments does not significantly differ
from their carrying values.
34. Segment Details with respect to Business Activities
The segment analysis with respect to business activity is as follows:–

Corporate Trading & Retail Commercial Payment & Agency Assets Retail Others
Finance Sales Banking Banking Settlement Services Management Brokerage
Rupees in ‘000
2006
Total income 153,460 660,580 1,130,134 193,874 – – – – –
Total expenses 36,289 244,060 1,129,487 105,152 – – – – –
Net income 117,171 416,520 647 88,722 – – – – –
Segment Assets (Gross) 2,232,184 7,632,914 13,351,427 3,746,353 – – – – –
Segment Non Performing Loans – – 859,367 151,653 – – – – –
Segment Provision Required – – 342,841 61,003 – – – – –
Segment Liabilities 1,421 5,834 17,191,434 4,285,157 – – – – –
Segment Return on net Assets (ROA) (%) 5.43% 5.69% 0.01% 2.37% – – – – –
2005
Total income 93,193 446,003 662,633 73,000 – – – – –
Total expenses 46,184 323,941 628,988 64,868 – – – – –
Net income (loss) 47,009 122,062 33,645 8,132 – – – – –
Segment Assets (Gross) 1,049,271 4,551,307 9,833,256 2,209,262 – – – – –
Segment Non Performing Loans – – 1,116,251 196,986 – – – – –
Segment Provision Required – – 356,617 62,007 – – – – –
Segment Liabilities – 7,543 13,321,930 1,339,662 – – – – –
Segment Return on net Assets (ROA) (%) 4.48% 2.68% 0.34% 0.37% – – – – –

35. RELATED PARTY TRANSACTIONS
Related parties include associated undertakings, major shareholders, employee benefit plans, and its
directors and executive officers (including their associates).
Other than those transactions which are made under the terms of employment, major transactions with
related parties comprise of loans and advances, deposits, issuance of letters of credit and guarantees.
Advances for house building, conveyance for personal use have also been provided to the staff and
executives at the reduced rates in accordance with the employment and pay policy.
Detail of transactions with related parties and balances with them as at the year ended were as follows:
Directors Associated Companies Staff

2006 2005 2006 2005 2006 2005
Rupees in ‘000
Deposits
Deposits at the beginning of the year 152 784 2,963 440 25,210 28,265
Deposits accepted during the year 31 1,306 313,325 735,292 24,707 18,811
Deposits withdrawl during the period / year (145) (1,938) (313,746) (732,769) (21,369) (21,866)
Deposits at the end of year 38 152 2,542 2,963 28,548 25,210
Advances
Advances at the beginning of the year – – 14,340 7,477 58,964 9,404
Advances disbursed during the year – – 39,992 43,511 5,211 64,982
Advances repaid during the year – – (34,332) (36,648) (10,098) (15,422)
Advances at the end of year – – 20,000 14,340 54,077 58,964
Letter of credits – – 5,043 10,679 – –

Letter of guarantees – – 1,685 1,685 – –
Mark-up earned – – 2,090 1,375 2,817 1,509
Mark-up receivable – – 637 502 – –
Mark-up paid – – – – 1,005 705
Commission earned – – 56 95 – –
Contribution to provident fund – – – – 8,474 7,118

2006 2005
36. CAPITAL ADEQUACY
The risk weighted assets to capital ratio, calculated in accordance with the State Bank’s guidelines on
capital adequacy was as follows:
Regulatory Capital Base

Tier I Capital
Shareholders Capital/Assigned Capital 3,085,721 2,057,147
Reserves 254,649 156,072
Unappropriated profits (Net of Losses) 588,197 278,297
Total Tier I Capital 3,928,567 2,491,516
Tier II Capital
Subordinated Debt (upto 50% of total Tier I Capital) – –
General Provisions subject to 1.25% of Total Risk Weighted Assets 2,840 5,245
Revaluation Reserve (upto 50%) 568,534 29,053
Total Tier II Capital 571,374 34,298
Eligible Tier III Capital – –
Total Regulatory Capital (a) 4,499,941 2,525,814
Risk– Weighted Exposures 2006 2005

Book Value Risk Adjusted Book Value Risk Adjusted
Value Value
Rupees in ‘000
Credit Risk
Balance Sheet items:–
Cash and other liquid Assets 3,212,141 257,869 1,815,133 116,750
Money at call 4,030,887 2,215,660 1,533,503 1,533,503
Investments 2,582,583 889,200 3,103,850 1,248,625
Loans and Advances 12,693,691 10,849,090 8,981,040 6,760,471
Fixed Assets 2,036,225 2,036,225 772,148 772,148
Other Assets 822,167 670,475 486,524 433,726
25,377,694 16,918,519 16,692,198 10,865,223
Off Balance Sheet items
Loan Repayment Guarantees 2,220,183 2,220,183 849,333 849,333
Purchase and Resale Agreements 1,545,291 – 1,293,348 –
Performance Bonds etc 1,220,884 610,442 662,171 331,086
Stand By Letters of Credit 5,287,084 2,643,542 1,994,738 866,153
Outstanding Foreign Exchange Contracts 2,332,890 16,484 908,476 6,103
12,606,332 5,490,651 5,708,066 2,052,675
Credit risk– weighted exposures 22,409,170 12,917,898
Market Risk
General market risk 126,488 2,275
Specific market Risk 839,813 472,663
Market risk-weighted exposures 966,301 474,938
Total Risk-Weighted exposures (b) 23,375,471 13,392,836
Capital Adequacy Ratio [ (a) / (b) x 100) 19.25% 18.86%

37. RISK MANAGEMENT
37.1 Risk Management

The Bank's Risk Management Framework sets three broad risk management objectives:
- Protect against unforeseen losses;
- Ensure earning stability; and
- Maximize earnings potential and opportunities leading to shareholder value creation.
The Bank's risk management framework encapsulated in its design three lines of defense
- Focused and informed oversight by the board, and accountability and responsibility of business
management, all supported by appropriate internal control, risk management and governance structures
- Independent monitoring at Bank level by Risk Management Division
- Independent assurance provided by internal audit
The Risk Management Division is independent of the operational business units. The Head of Risk
Management Division, who reports to the Chief Executive, provides key support to the various risk
committees and work closely with the business units.
37.2 Credit Risk
Credit risk is the risk that arises from the potential that an obligor is either unwilling to perform an
obligation or its ability to perform such obligation is impaired resulting in economic loss to the bank.
Credit risk, which arises from lending activities that forms the Bank’s core business, is by far the most
significant risk type. Credit risk is managed in terms of the Board-approved Credit Risk Management
Framework, which encompasses comprehensive credit policy, approved counter party limits and
governance structure. The Bank focuses on short-term trade related financing on a secured and self-
liquidating basis.
Credit and Investment Committee, chaired by CEO is responsible for approving and recommending
credits. At the Central Office, independent Credit Sanctioning and Monitoring Division is responsible
for continuing review and monitoring of borrowers’ account and effective compliance of Prudential
Regulations. Risk Management Division monitors credit at portfolio level and reports to executive
management and board risk management committee on a regular basis. An “early warning” procedure
is also functioning which identifies loans showing early warning signals of becoming non-performing.
37.3 Market Risk
Market Risk is the risk of loss in earnings and capital due to adverse changes in interest rates, foreign
exchange rate, equity prices and market conditions. A comprehensive market risk framework is used
to support and assist the Board in its responsibility to oversee that market risks are understood and
managed. Governance structures are in place to achieve effective independent monitoring and management
of market risk as follows:
- The Board Risk Management Committee
- The Asset and Liability Committee (ALCO). ALCO reviews the portfolio on regular basis
to ensure that market risk is within acceptable limits
- Investment and Treasury Division
- Independent Risk Management Division
37.4 Equity position Risk
Equity position Risk is the risk arising from taking long or short position, in the trading book, in the equities
and all the equities and all instruments that exhibit market behavior similar to equities.
Equity position risk is measured using mark to market, stress testing and limit structure. The aggregate limit
for equity securities shall not at any time exceed the limit prescribed by the SBP.
37.5 Liquidity Risk

Liquidity Risk is the potential for loss to an institution arising from either its inability to meet its obligations
or to fund increase as they fall due without incurring unacceptable costs or loss. The Bank’s liquidity
position is managed by the Assets and Liability Committee (ALCO). The committee monitors the maintenance
of balance sheet liquidity ratios, depositors concentrations both in terms of the overall funding mix and
avoidance of undue reliance on large individual depositors and liquidity contingency plans.

37.6 Operational Risk
Operational Risk is the risk of loss resulting from inadequate or failed internal process, people and system
or from external events.
The Bank's operational risk management framework has been developed to create an environment within
which operational risk can be identified, measured, managed and monitored in a consistent manner.
Business management is responsible for the identification, management and monitoring of operational
risk. Central Operation Division coordinates with the respective business units for controlling their
operational risk. Internal audit division provides assurance to the board of directors that the operational
risk management framework is sound and that the policies and processes related to operational risk
management are adhered to.
38. SEGMENTAL INFORMATION

Segmental Information is presented in respect of the class of business and geographical distribution of
Advances, Deposits, Contingencies and Commitments.
2006
38.1 Segments by class of business Contingencies and
Advances (Gross) Deposits Commitments
Rupees Percent Rupees Percent Rupees Percent
in ‘000 in ‘000 in ‘000
Agriculture, Forestry, Hunting and Fishing 192,957 1.27% 292,449 1.52% – 0.00%
Mining and Quarrying 20,763 0.14% 11,563 0.06% – 0.00%
Textile 2,373,162 15.65% 804,614 4.20% 899,309 6.09%
Chemical and Pharmaceuticals 128,304 0.85% 282,975 1.48% 699,151 4.73%
Cement – 0.00% – 0.00% 104,518 0.71%
Sugar 904,806 5.97% 4,171 0.02% 402,474 2.72%
Footwear and Leather garments 469,932 3.10% 294,463 1.53% 11,015 0.07%
Automobile and transportation equipment 453,668 2.99% 22,750 0.12% 1,149,401 7.78%
Electronics and electrical appliances 209,341 1.38% 140,506 0.73% 816,198 5.53%
Machinery and allied equipments 780,403 5.15% 70,962 0.37% 1,770 0.01%
Construction 569,511 3.75% 153,181 0.80% 336,885 2.28%
Power (electricity), Gas, Water, Sanitary – 0.00% 2,137,597 11.15% 280,571 1.90%
Wholesale and Retail Trade 4,608,747 30.39% 6,409,293 33.44% 350,901 2.38%
Exports / Imports 228,087 1.50% 368,214 1.92% 51,502 0.35%
Transport, Storage and Communication 1,040,027 6.86% 383,948 2.00% 1,222,901 8.28%
Financial 6,743 8.42% 2,645,000 13.80% 5,808,937 39.33%
Insurance – 0.00% – 0.00% 24,380 0.70%
Services 452,863 2.99% 375,566 1.96% 1,459,907 9.88%
Individuals 211,650 1.40% 3,398,395 17.73% 142,062 0.96%
Others 1,242,559 8.19% 1,373,579 7.17% 1,008,179 6.83%
13,893,523 100% 19,169,226 100% 14,770,061 100%
38.2 Segment by sector 2006
Contingencies and
Advances (Gross) Deposits Commitments
Rupees Percent Rupees Percent Rupees Percent
in ‘000 in ‘000 in ‘000
Public/ Government – – 2,514,257 13.12% 970,739 7%
Private 13,893,523 100% 16,654,969 86.88% 13,799,322 93%
13,893,523 100% 19,169,226 100% 14,770,061 100%

38.3 Details of non-performing advances and specific provisions by class of business segment
2006 2005
Rupees in ‘000
Specific Specific
Classified Provisions Classified Provisions
Advances Held Advances Held
Agriculture, Forestry, Hunting and Fishing 68,810 17,672 70,453 10,015
Mining and Quarrying – –
Textile 388,393 158,031 451,089 149,994
Chemical and Pharmaceuticals 25,251 10,274 24,453 8,131
Cement – –
Sugar – 18,785 6,246
Footwear and Leather garments 11,079 4,508 10,903 3,625
Automobile and transportation equipment 2,987 1,215 7,841 2,607
Electronics and electrical appliances – – – –
Construction – – – –
Power (electricity), Gas, Water, Sanitary – – – –
Wholesale and Retail Trade 53,071 21,594 309,885 103,041
Exports/Imports – – – –
Transport, Storage and Communication – – – –
Financial – – – –
Insurance – – – –
Services 10,000 4,069 – –
Individuals 9,259 6,570 43,727 4,660
Others 442,170 179,911 376,101 125,060
1,011,020 403,844 1,313,237 413,379
38.4 Details of non-performing advances and specific provisions by sector

Public/ Government – – – –
Private 1,011,020 403,844 1,313,237 413,379
1,011,020 403,844 1,313,237 413,379

38.5 GEOGRAPHICAL SEGMENT ANALYSIS
The Bank does not have operations outside Pakistan, therefore, these financial statements represent operations of
the Bank in Pakistan.

2006
39. Currency Risk Off-balance Net foreign
Assets Liabilities sheet items currency
exposure
Rupees in ‘000
Pakistan Rupee 23,970,335 21,278,366 130,026 2,821,995

United States Dollar 458,590 163,753 (122,149) 172,688
Great Britain Pound 28,532 37,619 15,457 6,370
Japanese Yen 7,421 – – 7,421
Euro 25,625 3,907 (23,334) (1,616)
UAE Dirham 6,390 – – 6,390
Canadian Dollar 191 – – 191
Singapore Dollar 134 – – 134
ACU 15,851 201 – 15,650
Swiss Frank 186 – – 186
24,513,255 21,483,846 – 3,029,409
Currency risk arises where the value of financial instrument changes due to changes in foreign exchange rates. In
order to manage currency risk exposure the bank enters into ready, spot and forward transactions with the SBP and
in the inter bank market.
The bank’s foreign exchange exposure comprises of forward contracts, purchases of foreign bills, foreign currencies
cash in hand, balances with banks abroad, foreign placements with SBP and foreign currencies assets and liabilities.
The net open position is managed within the statutory limits, as fixed by the SBP. Counter-parties limits are also
fixed to limit risk concentration. Appropriate segregation of duties exist between the front and back office functions
while compliance with the net open position limit is independently monitored on an ongoing basis.

40. Mismatch of Interest Rate Sensitive Assets and Liabilities
Interest rate risk is the risk that the value of a financial instrument will fluctuate due to changes in the market interest rates. The bank is exposed to interest/mark-up
rate risk as a result of mismatches or gaps in the amount of interest/mark-up based assets and liabilities that mature or re- price in a given period. The bank manages
this risk by matching/re-pricing of assets and liabilities. The bank is not excessively exposed to interest/mark-up rate risk as its assets and liabilities are re-priced
frequently. The Assets and Liabilities Committee (ALCO) of the bank monitors and manages the interest rate risk with the objective of limiting the potential adverse
effects on the profitability of the bank.
2006
Effective Exposed to Yield/ Interest risk
Yield/ Non-interest
Interest Over 1 Over 3 Over 6 Over 1 Over 2 Over 3 Over 5 bearing
rate Total Upto 1 Month to 3 to 6 Months to 1 to 2 to 3 to 5 to 10 Above financial
Months Months Year Years Years Years Years 10 Years instrument
On-balance sheet financial instruments Rupees in ‘000
Assets
Cash and balances with treasury banks 4.35% 1,990,052 25,519 - - - - - - - - 1,964,533
Balances with other banks 12.75% 1,222,089 5,968 500,000 - - - - - - - 716,121
Lending to financial institutions 8.91% 4,030,887 2,760,227 1,270,660 - - - - - - - -
Investments 10.10% 2,961,220 - 843,574 10,166 185,286 50,996 75,643 90,283 619,515 - 1,085,757
Advances 9.92% 13,486,839 2,021,208 3,106,917 3,493,865 3,732,534 351,084 60,796 - 48,263 64,996 607,176
Other assets 369,318 - - - - - - - - - 369,318
24,060,405 4,812,922 5,721,151 3,504,031 3,917,820 402,080 136,439 90,283 667,778 64,996 4,742,905
Liabilities
Bills payable 225,322 - - - - - - - - - 225,322

Borrowings 8.88% 1,624,470 239,884 749,701 457,468 165,446 11,971 - - - - -
Deposits and other accounts 4.67% 19,169,226 2,051,133 4,511,969 2,658,176 3,804,213 377,639 118,903 - 647,006 - 5,000,187
Sub-ordinated loans - - - - - - - - - - - -
Liabilities against assets subject to finance lease - - - - - - - - - - - -
Other liabilities 231,248 - - - - - - - - - 231,248
21,250,266 2,291,017 5,261,670 3,115,644 3,969,659 389,610 118,903 - 647,006 - 5,456,757
On-balance sheet gap 2,810,139 2,521,905 459,481 388,387 (51,839) 12,470 17,536 90,283 20,772 64,996 (713,852)
Off-balance sheet financial instruments
Purchase and resale agreements 9.76% 3,028,496 3,028,496 - - - - - - - - -

Forward sale of equity securities 9.66% 252,149 - 252,149 - - - - - - - -
Off-balance sheet gap

3,280,645 3,028,496 252,149 - - - - - - - -
Total Yield/Interest Risk Sensitivity Gap 5,550,401 711,630 388,387 (51,839) 12,470 17,536 90,283 20,772 64,996 (713,852)
Cumulative Yield/Interest Risk Sensitivity Gap 5,550,401 6,262,031 6,650,418 6,598,579 6,611,049 6,628,585 6,718,868 6,739,640 6,804,636 6,090,784
Reconciliation with total assets:

Assets as per above 24,060,405
Deferred Tax 131,587
Fixed Assets 2,036,225
Other Assets 321,263
Assets as per Balance Sheet 26,549,480
Reconciliation with total liabilities:

Liabilities as per above 21,250,266
Provision for taxation 190,417
Excise duty payable 342
Others 42,821
Liabilities as per Balance Sheet 21,483,846
Annual Report 2006 mybank Limited

63
64
40.1 Maturities of Assets and Liabilities
2006
Over 1 Over 3 Over 6 Over 1 Over 2 Over 3 Over 5
Total Upto 1 to 3 to 6 Months to 1 to 2 to 3 to 5 to 10 Above
Month Months Months Year Years Years Years Years 10 Years
Rupees in ‘000
Assets
Cash and balances with treasury banks 1,990,052 1,990,052 - - - - - - - -

Balances with other banks 1,222,089 722,089 500,000 - - - - - - -
Lending to financial institutions 4,030,887 2,760,227 1,270,660 - - - - - - -
Investments 2,961,220 378,634 903,576 10,166 576,277 50,996 75,643 90,283 875,645 -
Advances 13,486,839 2,021,208 3,106,917 3,493,865 3,732,534 351,084 60,796 607,176 48,263 64,996
Other assets 690,581 365,438 31,169 - 293,974 - - - - -
Operating fixed assets 2,036,225 - - - - - - 20,807 146,911 1,868,507

Deferred tax assets 131,587 - - - - 131,587 - - - -
26,549,480 8,237,648 5,812,322 3,504,031 4,602,785 533,667 136,439 718,266 1,070,819 1,933,503
Liabilities
Bills payable 225,322 225,322 - - - - - - - -

Borrowings 1,624,470 239,884 749,701 457,468 165,446 11,971 - - - -
Deposits and other accounts 19,169,226 7,051,320 4,511,969 2,658,176 3,804,213 377,639 118,903 - 647,006 -
Sub-ordinated loans - - - - - - - - - -
Liabilities against assets subject to finance lease - - - - - - - - - -
Other liabilities 464,828 223,958 1,421 - 239,449 - - - - -
Deferred tax liabilities - - - - - - - - - -
21,483,846 7,740,484 5,263,091 3,115,644 4,209,108 389,610 188,903 - 647,006 -
Net assets 5,065,634 497,164 549,231 388,387 393,677 144,057 17,536 718,266 423,813 1,933,503
Share capital 3,085,721

Reserves 254,649
Unappropriated profit 588,197
Surplus / (deficit) on revaluation of assets 1,137,067
5,065,634
Where an asset or a liability does not have a contractual maturity date, the period in which these are assumed to mature have been taken as expected date of maturity.
41. Date of Authorization for issue

The financial statements were authorized for issue on February 23, 2007 by the Board of Directors of the Bank.
42. General
These accounts have been prepared in accordance with the revised forms of annual financial statements of the banks issued by SBP through its BSD
Circular No. 4 dated February 17, 2006.
Figures have been rounded-off to the nearest thousand Rupees.
Annexure-I
STATEMENT SHOWING WRITTEN-OFF LOANS OR ANY OTHER FINANCIAL RELIEF OF
FIVE HUNDRED THOUSAND RUPEES OR ABOVE PROVIDED DURING THE YEAR ENDED DECEMBER 31, 2006
Amount in thousand
Name of the borrowerName of the borrower with Outstanding liabilities Principal Mark-up Other Total
Sr.# Father's name CNIC No. Address Written - written financial
Principal Interest / Others Total Off off relief
Mark-up
1 Universal Plastic Industries Muno Yousuf 135-55-581735 House No, 3092. Mohallah 25,886 4,446 - 30,332 25,886 4,446 - 30,332
Sethyan, Dak Khana, Chowk
Yadgar, Peshawar
2 Knit Knot (Pvt) Ltd Hafeezullah Khan Niazi S/o House No, 41- 42, Civic Center, 622 57 - 679 622 57 - 679
Zafar Khan Garden Town Lahore
3 Al Aslam International M. Aslam Mian S/o M. Azam 42301-1919397-3 60 / 11. Lane 24, Khayaban-e- 2,054 - - 2,054 1,554 - - 1,554
Mian Badban DHA Phase VII Khi
4 Sultan Muhammad S/o Hazrat Gull 129-80-621077 Mohalla Sherdil Khan P.O. 744 89 - 833 744 89 - 833
Mangan District Mardan
5 Sartaj Hussain S/o Master Hussain 42301-2851841-5 H.No D- 60 T.N.T Colony 744 89 - 833 744 89 - 833
Queens Road Tower Karachi
6 Haider Zaman Khan S/o Mir Zaman Khan 130-43-061866 Sarhad Ciggrate Industries 744 89 - 833 744 89 - 833
Nawab Kazzi District Maradan
7 Syed Riffat Shah Gilani S/o Shah Gilani 225-54-042479 R-135 Pak Kausar Town 744 89 - 833 744 89 - 833
Kokhrapar Maolir Karachi
8 Riasat Ali S/o Charag Ali 516-24-155001 74 M Block 6 P.E.C.H.S Karachi 744 89 - 833 744 89 - 833
9 Ahed Rab S/o Fazal Rab 502-48-012310 C-455 Nazimabad No 3 744 89 - 833 744 89 - 833
Karachi
10 Muhammad Siddiq Palkio S/o Allah Bux Khan Palkio 470-33-158322 M.K Chandni House,Moti 744 89 - 833 744 89 - 833
Bazaar Nawabshah
11 Roman Khalid Shaikh S/o Shaikh Muhammad Yunus 136-63-002635 H.No 506 Street No 15, Sector 744 89 - 833 744 89 - 833
E-2 Hayatabad Peshawar
12 Asad Khan S/o Abdul Waheed 128-90-086545 Village Shah Baig Post Office 744 89 - 833 744 89 - 833
Ibrahim Khan Dist Mardan
13 Rab International S/o Gul-Rab 501-59-396701 Room No 10 / 10A Arkay 744 89 - 833 744 89 - 833
Square Shahrah-e-Liaquat
Karachi
14 Muhammad Aslam S/o Sanaullah 501-39-230670 2/19 C-1 Liaquatabad Karachi 744 89 - 833 744 89 - 833
15 Khalid Abid M. Shah S/o Syed Ezad Mukhtar Shah 510-53-046504 A-122, block C-3 Haroon Royal 744 89 - 833 744 89 - 833
City Phase III Gulistan-e-Johur
Karachi
16 Azeem Gul S/o Gul-Rab 501-59-396701 H.No U / 55 Sector G 744 89 - 833 744 89 - 833
Nazimabad Karachi
17 Nazia Muhammad Aslam S/o Muhammad Aslam 42101-13510596-2 H.No A/25, C-1 Area 744 89 - 833 744 89 - 833
Liaquatabad Karachi
18 Shahid Hafiz Khuaja S/o Abdul Hafeez Khuaja 502-88-20117 D-60 Block 8 Gulshan-e-Iqbal 744 89 - 833 744 89 - 833
19 Virgo International 3,276 1,134 - 4,410 3,276 1,134 - 4,410

Hassan Manzoor S/o B-235, Block-C, North
20 Taurus Commodities 42101-6864879-5 3,805 3,481 - 7,286 3,805 3,481 - 7,286
Manzoor Bhai Nazimabad, Karachi
21 Owais Enterprises 5,341 1,313 - 6,654 340 1,313 - 1,653
22 Subika Enterprises Shaikh Waseem Riaz 502-81-258822 Imperial Hotel Building, 6,316 1,713 - 8,029 2,440 1,713 - 4,153
M.T.Khan Road
58,460 13,479 - 71,939 49,083 13,479 - 62,562

65
SIX YEARS FINANCIAL SUMMARY
2006 2005 2004 2003 2002 2001
(Rupees in million)
OPERATIONAL RESULTS
Total income
– Net income / interest 820 703 411 394 203 288
– Commission income 115 68 45 41 98 44
– Other operating income 337 181 53 82 156 22
Operating expenses
– Administrative expenses 612 539 403 374 382 310
Profit / (loss)
– Profit before tax and provision 661 413 117 143 75 44
against NPLs
– Profit before taxation 623 211 87 6 25 10
BALANCE SHEET
Shareholders’ equity
– Paid-up capital 3,086 2,057 1,524 1,016 1,016 508
– Reserve 843 434 160 76 97 93
Total Equity 3,929 2,491 1,684 1,092 1,113 601
Total assets 26,549 17,219 13,436 11,759 10,595 8,444
Advances - net of provision 13,487 9,294 7,245 5,853 3,298 3,002
Investments 2,961 3,253 1,937 1,929 1,328 630
Deposits
– Remunerative 14168 7,323 4,388 4,161 3,768 3,569
– Non - remunerative 5,001 5,533 6,535 4,845 3,993 3,116

NUMBER OF BOARD MEETINGS HELD
DURING THE YEAR AND ATTTENDANCE BY
EACH DIRECTOR AS REQUIRED UNDER CLAUSE XIX (H) OF THE
CODE OF CORPORATE GOVERNANCE
Name of the Directors / President Meetings Held Meetings Attended
Mr. Iqbal Alimohamed 8 8

Mr. Sohail Muzaffar 8 7
Mr. Iqbal Ebrahim 8 6
Mr. Zahid Saeed 8 5
Mr. Danish Iqbal 8 7
Mr. Mirza Ghulam Mjutaba 8 8
Mr. Muhammad Humayun Nabi Jan 6 2
Mr. Muhammad Azimuddin 5 5
Mr. M.Bilal Sheikh 3 3
Mr. Afzal Ghani 2 2
• Mr. Muhammad Humayun Nabi Jan(Director) resigned from the Board of Directors and Mr. Afzal Ghani
(Director) was co-opted in his place in August, 2006 in the 97th meeting of the Board of Directors.
• Mr. Muhammad Azimuddin,President & CEO resigned from his office in 26th April, 2006 and completed
his notice period,after that Mr. Muhammad Bilal Sheikh was designated as the new President & CEO in
the 97th Meeting of Board of Directors.

PATTERN OF SHAREHOLDINGS
( UNDER CLAUSE XIX (I) OF THE CODE OF CORPORATE GOVERNANCE )
AS AT DECEMBER 31, 2006
A) Directors Shares held % held
1. Mr. Iqbal Alimohamed 143,962,201 46.65

2. Mr. Danish Iqbal 17,490,901 5.67
3. Mr. Sohail Muzaffar 147,511 0.05
4. Mr. Zahid Saeed 3,036 –
5. Mr. Iqbal Ebrahim 1,518 –
6. Mr. Mirza Ghulam Mujtaba 30,190,207 9.78
7. Mr. Afzal Ghani 900 –
B) Directors’ Spouses and Minor Children – –
C) NIT and ICP
1. Investment Corporation of Pakistan 1,000 –

2. National Bank of Pakistan 215 –
D) Others
1. Insurance Companies 24,000 –

2. Joint Stock Companies 7,920,664 2.57
3. Financial Institutions, NBFC 2,971,539 0.96
4. Charitable Trust 14,250 –
5. Individuals 69,976,115 22.68
E) Shares traded by Directors, CEO, CFO, Company Secretary and their spouse and minor children
are given as under:
No. of Shares
Acquired/Purchased Remarks
1. Mr. Iqbal Alimohamed, Director 49,380,320 Received gift by his son

2. Mr. Sohail Muzaffar, Director 4,000
3. Mr. Afzal Ghani, Director 500
F) Shareholders holding ten percent and above. (Other than sponsors and Directors)
Shares Held %
1. Mr. Sulieman Ahmed Said Al-Houqani 34,677,822 11.24

PATTERN OF SHARE HOLDING
AS AT DECEMBER 31, 2006
Number of Having shares
Shares held Percentage
shareholders From To
5,344 1 100 243,492 0.08%
1,411 101 500 386,530 0.13%
2,028 501 1,000 1,300,235 0.42%
881 1,001 5,000 1,918,706 0.62%
131 5,001 10,000 988,272 0.32%
45 10,001 15,000 580,647 0.19%
24 15,001 20,000 434,694 0.14%
22 20,001 25,000 516,117 0.17%
10 25,001 30,000 272,875 0.09%
3 30,001 35,000 99,748 0.03%
13 35,001 40,000 489,247 0.16%
5 40,001 45,000 212,169 0.07%
5 45,001 50,000 247,707 0.08%
6 50,001 55,000 305,700 0.10%
2 55,001 60,000 115,250 0.04%
4 60,001 65,000 247,829 0.08%
1 65,001 70,000 67,262 0.02%
3 70,001 75,000 216,938 0.07%
1 85,001 90,000 87,500 0.03%
1 90,001 95,000 94,500 0.03%
4 95,001 100,000 395,250 0.13%
4 100,001 105,000 416,351 0.13%
1 105,001 110,000 108,000 0.03%
2 115,001 120,000 234,750 0.08%
1 125,001 130,000 130,000 0.04%
1 135,001 140,000 136,687 0.04%
3 145,001 150,000 442,567 0.14%
1 150,001 155,000 153,393 0.05%
2 155,001 160,000 316,000 0.10%
1 175,001 180,000 176,000 0.06%
3 195,001 200,000 600,000 0.19%
1 200,001 205,000 205,000 0.07%
1 220,001 225,000 220,892 0.07%
1 255,001 260,000 259,200 0.08%
1 275,001 280,000 278,000 0.09%
1 330,001 335,000 335,000 0.11%
1 350,001 355,000 350,250 0.11%
2 365,001 370,000 733,230 0.24%
1 440,001 445,000 442,160 0.14%
2 445,001 450,000 896,884 0.29%
2 555,001 560,000 1,113,775 0.36%
1 695,001 700,000 700,000 0.23%
1 710,001 715,000 713,500 0.23%
1 830,001 835,000 833,024 0.27%
1 840,001 845,000 841,000 0.27%
1 955,001 960,000 959,643 0.31%
1 1,120,001 1,125,000 1,125,000 0.36%
1 1,210,001 1,215,000 1,212,500 0.39%
1 1,380,001 1,385,000 1,380,400 0.48%
1 1,490,001 1,495,000 1,494,750 0.50%
1 1,535,001 1,540,000 1,540,000 0.58%
1 1,795,001 1,800,000 1,800,000 0.62%
1 1,900,001 1,905,000 1,904,766 0.67%
1 2,070,001 2,075,000 2,074,543 0.70%
1 2,165,001 2,170,000 2,166,614 0.93%
1 2,860,001 2,865,000 2,862,750 1.36%
1 4,205,001 4,210,000 4,207,325 1.90%
1 5,875,001 5,880,000 5,877,085 1.94%
1 5,995,001 6,000,000 5,995,850 2.18%
1 6,740,001 6,745,000 6,741,217 2.44%
1 7,535,001 7,540,000 7,535,274 2.52%
1 7,775,001 7,780,000 7,775,701 2.58%
1 7,950,001 7,955,000 7,951,615 4.37%
1 13,485,001 13,490,000 13,486,609 5.41%
1 16,700,001 16,705,000 16,703,598 5.67%
1 17,490,001 17,495,000 17,490,901 11.22%
1 34,630,001 34,635,000 34,633,972 11.95%
1 36,880,001 36,885,000 36,881,096 34.00%
1 104,910,001 104,915,000.00 104,914,491.00 0.00%
10,004 297,356,669 308,572,031 100.00%

OFFICES / BRANCHES NETWORK
OFFICES
S. City Telephone
No. Name Address Fax No. E-mail Addresses
Code No.
Head Office
1 Regal Chowk, Jinnah Road, Quetta 081 2827057 2825065 jrq@mybankltd.com
(Registered Office)
10th Floor, Business & Finance Centre, UAN 2433623
2 Central Office Opp: State Bank of Pakistan, 021 finance@mybankltd.com
111-692-265 2444197
I.I. Chundrigar Road, Karachi.
Regional Office Pearl Heaven Apartments, Khayaban-e-Roomi,
3 021 5824381-2 5824383 rokhia@mybankltd.com
Karachi Block-5, Clifton, Karachi.
Regional Office 71-B, Block C/2, Liberty Market, 5763910

4 Gulberg - III Lahore. 042 5750036 5760757 rolhr@mybankltd.com
Lahore
Regional Office 2871011

5 20-Al-Asghar Plaza, Blue Area, Islamabad. 051 2875066 2871012 roisb@mybankltd.com
Islamabad 2875023
N.W.F.P Zone
6 Aminpur Bazar Aminpur Bazar, Faisalabad. 0412 2626783 2611363 zofsd@mybankltd.com
Branch
Gujranwala Zone 214170
7 Bank Square Bazar Bank Square, Gujranwala. 0554 214778 223978 zoguj@mybankltd.com
Branch 238431
Area Office Hyderabad
8 Latifabad # 7, 5/D, Unit # 7, Hyderabad 0223 868297 868298 hyd@mybankltd.com
Latifabad Branch
Area Office Quetta

9 Regal Chowk, Jinnah Road, Quetta 081 2837028-29 2825056 jrq@mybankltd.com
Jinnah Road Branch
BRANCHES
S. City Telephone
Code No.
KARACHI Zia Plaza, Altaf Hussain Road,

1 021 2620231-33 2621202 nck@mybankltd.com
New Challi Branch New Challi, Karachi.
Plaza Quarters Al-Shafi Building, Noman Street,

2 021 2771515-16-18 2771517 pqk@mybankltd.com
Branch Off: M.A. Jinnah Road, Karachi.
3 Jodia Bazar Branch Ram Bharti Street, Ismail Trade Centre, Karachi. 021 2437991-3 2437994 jbk@mybankltd.com
Cloth Market 222-Alam Market, 2400790

4 021 2424175 cmk@mybankltd.com
Branch Saleh Muhammad Street, Karachi. 2424177-78
North Napier Road 2766477

5 18-19, North Napier Road, Karachi. 021 2766487 nnk@mybankltd.com
Branch 2766755
Pearl Heaven Apartments, Khayaban-e-Roomi, 5373231

6 Clifton Branch 021 5867651 5867647 clf@mybankltd.com
Block-5, Clifton, Karachi. 5872647
Timber Market 2732729
7 Siddique Wahab Road, Karachi. 021 2733214 tmk@mybankltd.com
Branch 2766995
Gulshan-e-Iqbal B-44, Block 12/A, Main University Road, 4987688

8 021 4987689 gik@mybankltd.com
Branch Gulshan-e-Iqbal, Karachi. 4987739-40
9 Paper Market Al-Abbas Centre, Paper Market, 021 2639671-2 2639670 pmk@mybankltd.com
Branch Shahrah-e-Liaquat, Karachi.
C-51, Central Commercial Area, 4556486

10 Tariq Road Branch 021 4555478 trk@mybankltd.com
Near KFC Tariq Road, P.E.C.H.S., Karachi. 4556682
Abdullah Haroon 282/3, Abdullah Haroon Road, 5685269

11 021 5685393 5683991 sad@mybankltd.com
Road Branch Saddar, Karachi. 5685940
12 Barkat-e-Hyderi Almas Square, Block-G 6628931

021 6629144 bhk@mybankltd.com
Branch North Nazimabad, Karachi. 6629145

S. City Telephone
Code No.
Water Pump Lateef Square, Block-16, 6314817

13 021 6314848 wpk@mybankltd.com
Branch Federal ‘B’ Area, Karachi. 6321387
Shahrah-e-Faisal Business Avenue, Block-6, P.E.C.H.S.

14 021 4386417-18 4531819 sfk@mybankltd.com
Branch Shahrah-e-Faisal, Karachi.
Bahadur Shah Bahadur Shah Centre, Urdu Bazar, 2768547

15 021 2765083 bsk@mybankltd.com
Centre Branch Off: M.A. Jinnah Road, Karachi. 2768559
55-C, Phase-II , D.H.A., Opp. Toyota Motors 5387809

16 Defence Branch 021 5396263 5387810 dha@mybankltd.com
Main Korangi Road, Karachi.
I.I. Chundrigar 5-Business & Finance Centre, 2415974, 2438212

17 Road Branch Opp: State Bank of Pakistan, Karachi. 021 2472176, 2471796 2438218 iic@mybankltd.com
2473656, 2437593
B/9-B/3, Near Metro Chowrangi,
18 S.I.T.E Branch 021 2586801-4 2586806 site@mybankltd.com
S.I.T.E., Area, Karachi.
Stock Exchange Room No. 68 & 69 1st Floor, Stock Exchange

19 021 2462539-42 2462550 kse@mybankltd.com
Branch Building Stock Exchange Road, Karachi
LAHORE 5692580
20 DHA Lahore Branch 159-Y,Block D.H.A. Lahore Cantt. 042 5692581 5692579 dhalhr@mybankltd.com
(Formerly Sqa)
7724583
21 Badami Bagh 203-Grain Market, Badami Bagh, Lahore. 7720382 7730867 bbl@mybankltd.com
Branch 042
7705036
7630616
Shah Alam Gate
22 Branch 12-A, Shah Alam Gate, Lahore. 042 7670250 7663488 sag@mybankltd.com
7663090
Liberty Market 26/C, Commercial Zone, 5717273
23 Branch Liberty Market, Gulberg, Lahore. 042 5763308-9 5763310 lml@mybankltd.com
24 Azam Cloth Market F-1208, Azam Cloth Market, Lahore. 042 7667297 7662026 acm@mybankltd.com
Branch 7651374
Montgomery Road 6364522

25 Branch Abdul Karim Road, Lahore. 042 6364532 6364542 mtg@mybankltd.com
2274001-2
26 ISLAMABAD 20-Al Asghar Plaza, Blue Area, Islamabad. 051 2823204, 2875066 2274276 isd@mybankltd.com
Blue Area Branch 2872913
27 Bharah Koh Branch Muree Road, Tehsil / District Islamabad. 051 2231344 2231345 bkh@mybankltd.com
RAWALPINDI
28 Saddar Bazar, Rawalpindi Cantt. 051 5523840-41 5523837 rwp@mybankltd.com
Bank Road Branch
5534173
29 Raja Bazar Branch Raja Bazar, Rawalpindi. 051 5557244 5559544 rbp@mybankltd.com
QUETTA
30 Regal Chowk, Jinnah Road, Quetta. 081 2837028-29 2825065 jrq@mybankltd.com
Jinnah Road Branch
31 Liaquat Bazar Ainuddin Street, Quetta. 081 2837300-1 2837302 lbq@mybankltd.com

Branch
PESHAWAR 3-A, Arbab Road, Peshawar Cantt., 5270463

32 091 5274251 pwr@mybankltd.com
Arbab Road Branch Peshawar. 5275915
Chowk Yadgar Near Clock Tower, Chowk Yadgar, 5250466

33 Branch Peshawar City, Peshawar. 0915 5250477 5250488 cyp@mybankltd.com
34 HYDERABAD Latifabad # 7, 5/D, Unit # 7, Hyderabad. 0223 868297 868298 hyd@mybankltd.com

Latifabad Branch
SUKKUR
35 Marich Bazar Marich Bazar, Sukkur. 0715 624316 624317 suk@mybankltd.com
Branch
MIRPURKHAS
36 Shaheed-e-Millat Shaheed-e-Millat Road, Mirpurkhas. 0233 874518 862018 mks@mybankltd.com
Road Branch
SAHIWAL
37 High Street 558/B-1, Navid, Plaza High Street Shaiwal. 040 4221615 4460960 swl@mybankltd.com
Branch 4229247

S. City Telephone
Name Address Fax No. E-mail Addresses
No. Code No.
SARGODHA
38 Kutchery Bazar 36-Block-5, Kutchery Bazar, Sargodha. 0483 722913 722914 sgd@mybankltd.com
Branch
OKARA 528755
39 23/A, Ravi Road, Okara. 0442 525355 525356 okr@mybankltd.com
Ravi Road Branch
FAISALABAD 2634705,
40 Aminpur Bazar Aminpur Bazar, Faisalabad. 041 2626783 2611363 fsd@mybankltd.com
Branch
GUJRANWALA 214170
41 Bank Square Bazar Bank Square, Gujranwala. 0554 214778 223978 guj@mybankltd.com
Branch 238431
SIALKOT 582231
42 Railway Road Railway Road, Sialkot. 0524 582232 skt@mybankltd.com
586507
Branch
GUJRAT Sethi Plaza, Opp. MY Guest House, Near 3524640
43 G.T. Road Gujrat Small Industrial Estate Gate, G.T. Road Gujrat 053 3524447 3527108 crg@mybankltd.com
(formerly Circular Road )
MULTAN 785014
44 Hussain Agahi Road 2576, Hussain Agahi Road, Multan. 0614 583168 543794 mul@mybankltd.com
Branch 583268
KASUR Near Pul Qatal Gahri,
45 Kutchery Road, Kasur. 0492 721993 721994 qsr@mybankltd.com
Kutchery Road Kasur
MARDAN
46 Bank Road, Mardan. 09378 65341 65342 mrd@mybankltd.com
Bank Road Branch
RAHIMYAR KHAN
47 Rahimyar Khan Shahi Road, Rahimyar Khan. 06858 83876 76776 ryk@mybankltd.com
Branch
TURBAT
48 Main Bazar, Turbat. 0852 413874 414048 turb@mybankltd.com
Main Bazar Branch
AZAD JAMMU &
49 KASHMIR Nangi Chowk, Mirpur, Azad Kashmir. 058610 44550 44522 mak@mybankltd.com
Nangi Chowk Branch
50 Dadyal Branch Maqbool Butt Shaheed Chowk, 058630 42475 42475 dad@mybankltd.com
Dadyal, Azad Kashmir.

FORM OF PROXY
I / We_________________________________________of__________________________________________________
being member of mybank Limited and holding ______________________________________ordinary shares are per
Register Folio No. / CDC Account and Participant’s ID No.______________________________________________________
hereby appoint Mr./Mrs./Miss.____________________________________ of ________________________________or
failing him / her________________________________________________ of _________________________________as
my / our Proxy in my / our absence to attend and vote for me / us and on my / our behalf at the Annual General
Meeting of the Bank to be held on March 30, 2007 and at any adjournment there-of.
As witness my / our hand this ________________________________ day of __________________________2007
1. Witness_____________________________
Signature____________________________
CNIC No.___________________________
Member's Signature
Address_____________________________ on Rs.5.00
Revenue Stamp
2. Witness_____________________________
(Signature should agree with
Signature____________________________
the specimen signature
CNIC No.___________________________ registered with the Bank)
Address_____________________________
NOTES:
1. A member entitled to attend and vote at the Annual General Meeting of the Bank may appoint another member
as his / her proxy to attend and vote instead of him / her. The proxy shall have the right to attend, speak and
vote in place of the member appointed him at the meeting.
2. The instrument appointing a proxy should be signed by the member(s) or by his / her Attorney, duly authorized
in writing. If the member is a Corporation, its common seal should be affixed to the instrument.
3. The Proxy Form duly completed, must be deposited at the Bank’s Registered Office at mybank Building, Regal
Chowk, Jinnah Road, Quetta not less than 48 hours before the time of holding the meeting.
4. CDC account holder or sub-account holder appointing a proxy should furnish attested copies of his / her own
as well as the proxy’s CNIC / Passport with the proxy form. The proxy shall also produce his / her original CNIC
or passport at the time of meeting. In case of corporate entity, the Board of Directors’ resolution / power of
attorney with specimen signature shall be submitted along with proxy form.

Annual Report 2006

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Annual Report 2006

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NOTICE OF ANNUAL GENERAL MEETING

Any other business

By Order of the Board

STATEMENT UNDER SECTION 160(1)(b) OF THE COMPANIES ORDINANCE, 1984:

Agenda Item No. 4

10 Annual Report 2006 mybank Limited

In the financial sector a lot of consolidation has been witnessed during

I am thankful to the management for their dedication and loyalty and to

Annual Report 2006 mybank Limited 11

Net Assets 5,065.634 2,549.622 99%

Intermediation Cost 3.06 4.13 (-) 26%

Annual Report 2006 mybank Limited 13

Profit before taxation and provision against non-performing loans 660.832

Earnings per share – Rupees 1.89

Appointment of President & CEO:

Changes in Board composition during 2006

Increase in Paid up Capital

14 Annual Report 2006 mybank Limited

Statements under Clause XIX of the Code of Corporate Governance

b) Proper books of account of the Bank have been maintained.

f) There are no doubts about the Bank continuing as a going concern.

Annual Report 2006 mybank Limited 15

16 Annual Report 2006 mybank Limited

Our key focus areas in 2007 include:

Annual Report 2006 mybank Limited 17

18 Annual Report 2006 mybank Limited

By order of the Board

Muhammad Bilal Sheikh

Annual Report 2006 mybank Limited 19

• Efficiency and effectiveness of operations.

20 Annual Report 2006 mybank Limited

By order of the Board

Muhammad Bilal Sheikh

Annual Report 2006 mybank Limited 21

Place: Karachi M. Yousuf Adil Saleem & C

22 Annual Report 2006 mybank Limited

(b) In our opinion:

Place: Karachi M. Yousuf Adil Saleem & Co.,

Annual Report 2006 mybank Limited 23

Share capital 18 3,085,721 2,057,147

CONTINGENCIES AND COMMITMENTS 20

The annexed notes 1 to 42 form an integral part of these accounts.

Muhammad Bilal Sheikh Iqbal Alimohamed Sohail Muzaffar Danish Iqbal

24 Annual Report 2006 mybank Limited

Mark-up / return / interest earned 21 1,685,810 1,026,000

Basic / diluted earnings per share - Rupees 28 1.89 1.23

The annexed notes 1 to 42 form an integral part of these accounts.

Muhammad Bilal Sheikh Iqbal Alimohamed Sohail Muzaffar Danish Iqbal

Annual Report 2006 mybank Limited 25

CASH FLOW FROM OPERATING ACTIVITIES

CASH FLOW FROM INVESTING ACTIVITIES

CASH FLOW FROM FINANCING ACTIVITIES

The annexed notes 1 to 42 form an integral part of these accounts.

Muhammad Bilal Sheikh Iqbal Alimohamed Sohail Muzaffar Danish Iqbal

26 Annual Report 2006 mybank Limited

Share capital Statutory Unappropriated Total

Opening balance as at January 01, 2005 1,523,813 101,222 58,897 1,683,932

Transfer to statutory reserve – 54,850 (54,850) –

Issue of share capital 533,334 – – 533,334

Opening balance as at January 01, 2006 2,057,147 156,072 278,297 2,491,516

Transfer from surplus on revaluation of fixed

Net income recognised directly in equity – – 511,335 511,335

Transfer to statutory reserve – 98,577 (98,577) –