Dubai Islamic Bank

Pakistan Limited

Financial Statements
for the year ended
December 31, 2022
Dubai Islamic Bank Pakistan Limited
Statement of Financial Position
As at December 31, 2022

2022 2021
Note --- Rupees in '000 ---
ASSETS

Cash and balances with treasury banks 5 45,632,108 25,761,239

Balances with other banks 6 1,146,321 1,363,873
Due from financial institutions 7 23,500,000 1,031,302
Investments 8 103,361,135 84,861,748
Islamic financing and related assets 9 247,767,953 225,364,893
Fixed assets 10 5,336,223 4,281,548
Intangible assets 11 409,352 378,536
Deferred tax assets 12 2,001,279 -
Other assets 13 16,236,091 8,431,020
445,390,462 351,474,159

LIABILITIES

Bills payable 14 7,207,894 7,449,011

Due to financial institutions 15 35,875,060 33,545,307
Deposits and other accounts 16 345,811,211 261,573,620
Subordinated sukuks 17 7,120,000 7,120,000
Deferred tax liabilities - 104,792
Other liabilities 18 19,269,480 14,114,370
415,283,645 323,907,100
NET ASSETS 30,106,817 27,567,059

REPRESENTED BY

Share capital 19 11,652,288 11,652,288

Reserves 20 3,875,828 3,092,713
(Deficit) / surplus on revaluation of investments 21 (674,055) 683,374
Unappropriated profit 15,252,756 12,138,684
30,106,817 27,567,059

CONTINGENCIES AND COMMITMENTS 22

The annexed notes 1 to 46 and Annexure I form an integral part of these financial statements.

President & CEO Chief Financial Officer Director Director Director

Dubai Islamic Bank Pakistan Limited
Profit and Loss Account
For the year ended December 31, 2022

2022 2021
Note --- Rupees in '000 ---

Profit / return earned 23 45,885,614 22,754,753

Profit / return expensed 24 (26,435,715) (10,858,227)
Net Profit / return 19,449,899 11,896,526

OTHER INCOME

Fee and commission income 25 2,128,134 1,981,011

Dividend income - -
Foreign Exchange income 1,394,739 1,097,646
Gain on securities 26 - 576,907
Other (loss) / income 27 (23,165) 1,354
Total other income 3,499,708 3,656,918
Total income 22,949,607 15,553,444

OTHER EXPENSES

Operating expenses 28 (10,132,049) (8,285,564)

Workers Welfare Fund (211,782) (110,945)
Other charges 29 (13,805) (4,301)
Total other expenses (10,357,636) (8,400,810)
Profit before provisions 12,591,971 7,152,634

Provisions and write offs - net 30 (4,629,854) (2,097,707)

Extra ordinary / unusual items - -
PROFIT BEFORE TAXATION 7,962,117 5,054,927

Taxation 31 (4,046,543) (1,965,617)

PROFIT AFTER TAXATION 3,915,574 3,089,310

--- Rupees ---

Basic & diluted earnings per share 32 3.36 2.65

The annexed notes 1 to 46 and Annexure I form an integral part of these financial statements.

President & CEO Chief Financial Officer Director Director Director

Dubai Islamic Bank Pakistan Limited
Statement of Comprehensive Income
For the year ended December 31, 2022

2022 2021
--- Rupees in '000 ---

Profit after taxation for the year 3,915,574 3,089,310

Other comprehensive income

Items that may be reclassified to profit and loss account

in subsequent periods:

Movement in revaluation of investments - net of tax (1,357,429) (141,971)

Items that will not be reclassified to profit and loss account

in subsequent periods:

Remeasurement loss on defined benefit obligation - net of tax (18,387) (3,978)

Total comprehensive income 2,539,758 2,943,361

The annexed notes 1 to 46 and Annexure I form an integral part of these financial statements.

President & CEO Chief Financial Officer Director Director Director

Dubai Islamic Bank Pakistan Limited
Statement of Changes in Equity
For the year ended December 31, 2022

(Deficit) /
surplus on Unappro-
Share Statutory
revaluation priated Total
capital reserve
of profit
investments
--------------------------------------------- Rupees in '000 ---------------------------------------------

Balance as at January 01, 2021 11,652,288 2,474,851 825,345 9,671,214 24,623,698

Profit after taxation for the year - - - 3,089,310 3,089,310

Other comprehensive loss - net of tax - - (141,971) (3,978) (145,949)

- - (141,971) 3,085,332 2,943,361

Transfer to statutory reserve - 617,862 - (617,862) -

Balance as at December 31, 2021 11,652,288 3,092,713 683,374 12,138,684 27,567,059

Profit after taxation for the year - - - 3,915,574 3,915,574

Other comprehensive loss - net of tax - - (1,357,429) (18,387) (1,375,816)

- - (1,357,429) 3,897,187 2,539,758

Transfer to statutory reserve - 783,115 - (783,115) -

Balance as at December 31, 2022 11,652,288 3,875,828 (674,055) 15,252,756 30,106,817

The annexed notes 1 to 46 and Annexure I form an integral part of these financial statements.

President & CEO Chief Financial Officer Director Director Director

Dubai Islamic Bank Pakistan Limited
Cash Flow Statement
For the year ended December 31, 2022

2022 2021
Note ------ Rupees in '000 ------
CASH FLOW FROM OPERATING ACTIVITIES
Profit before taxation 7,962,117 5,054,927

Adjustments for:
Depreciation 10.2 349,766 324,220
Depreciation on right-of-use assets 10.3 917,404 896,452
Amortisation 11.1 95,193 73,687
Finance cost on Ijarah (lease) liabilities 24 360,685 310,470
Gain on securities 26 - (576,907)
(Loss) / gain on sale of fixed assets 27 23,165 (1,354)
Provisions and write offs - net 30 4,629,854 2,097,707
6,376,067 3,124,275
14,338,184 8,179,202
(Increase) / decrease in operating assets
Due from financial institutions (22,468,698) 1,366,214
Islamic financing and related assets (27,032,914) (28,038,948)
Others assets (excluding current taxation) (6,015,947) 104,376
(55,517,559) (26,568,358)
(Decrease) / increase in operating liabilities
Bills payable (241,117) 3,202,770
Due to financial institutions 2,386,125 16,137,347
Deposits and other accounts 84,237,591 24,020,255
Other liabilities (excluding current taxation) 871,564 1,611,058
87,254,163 44,971,430
46,074,788 26,582,274
Income tax paid (3,872,282) (2,129,362)
Net cash flow generated from operating activities 42,202,506 24,452,912

CASH FLOW FROM INVESTING ACTIVITIES

Net investments in available-for-sale securities (20,802,225) (17,854,747)

Investments in fixed assets (719,692) (682,621)
Proceeds from sale of fixed assets 12,859 21,400
Investments in intangibles (126,009) (130,307)
Net cash flow used in investing activities (21,635,067) (18,646,275)

CASH FLOW FROM FINANCING ACTIVITIES

Payment of Ijarah (lease) liabilities against right-of-use assets (857,750) (1,115,362)

Increase in cash and cash equivalents 19,709,689 4,691,275

Cash and cash equivalents at beginning of the year 27,068,101 22,376,826

Cash and cash equivalents at end of the year 33 46,777,790 27,068,101

The annexed notes 1 to 46 and Annexure I form an integral part of these financial statements.

President & CEO Chief Financial Officer Director Director Director

Dubai Islamic Bank Pakistan Limited
Notes to and forming part of the Financial Statements
For the year ended December 31, 2022

1 STATUS AND NATURE OF BUSINESS

1.1 Dubai Islamic Bank Pakistan Limited (the Bank) was incorporated in Pakistan as an unlisted public limited company on May 27,
2005 under the Companies Act, 2017 to carry out the business of an Islamic Commercial Bank in accordance with the principles of
Islamic Shari'a.

1.2 The State Bank of Pakistan (the SBP) granted a “scheduled islamic commercial bank” license to the Bank on November 26, 2005
and subsequently the Bank received the certificate of commencement of business from the Securities and Exchange Commission of
Pakistan (the SECP) on January 26, 2006. The Bank commenced its operations as a scheduled Islamic Commercial Bank with effect
from March 28, 2006 on receiving certificate of commencement of business from the SBP. The Bank is principally engaged in
corporate, commercial, consumer, investing and retail banking activities.

1.3 VIS Credit Rating Company Limited on June 29, 2022 has reaffirmed the Bank's medium to long-term rating at 'AA' (Double A)
and the short term rating at 'A-1+' (A-One Plus) with stable outlook.

1.4 The Bank is operating through 235 branches as at December 31, 2022 (2021: 235 branches). The registered office of the Bank is
situated at Hassan Chambers, DC-7, Block-7 Kehkashan, Clifton, Karachi. The Bank is a wholly owned subsidiary of Dubai Islamic
Bank PJSC, UAE (the Holding Company).

2 BASIS OF PRESENTATION

The Bank provides Islamic financing and makes investments mainly through Murabaha, Musharaka, Running Musharaka,
Shirkatulmilk, Istisna cum Wakala, Wakala Istithmar and export refinance under Islamic export refinance schemes as well as various
long term refinancing facility of the SBP respectively as briefly explained in the notes to these financial statements. The transactions
of purchases, sales and leases executed 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 rental / profit thereon. The income on such Islamic
financing and related assets is recognised in accordance with the principles of Shari'a. However, income if any, received which does
not comply with the principles of Shari'a is recognised as charity payable if so directed by the Shari'a Board / Resident Shari'a Board
Member of the Bank.

2.1 Statement of Compliance

These financial statements have been prepared in accordance with the accounting and reporting standards as applicable in Pakistan.
The accounting and reporting standards comprise of:

- International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB) as are
notified under the Companies Act, 2017;
- Islamic Financial Accounting Standards (IFAS) issued by the Institute of Chartered Accountants of Pakistan, as are notified
under the Companies Act, 2017;
- Provisions of and directives issued under the Banking Companies Ordinance, 1962 and the Companies Act, 2017; and
- Directives issued by the SBP and the SECP.

Whenever the requirements of the Banking Companies Ordinance, 1962, the Companies Act, 2017 or the directives issued by the
SBP and the SECP differ with the requirements of the IFRS or IFAS, requirements of the Banking Companies Ordinance, 1962, the
Companies Act, 2017 and the said directives shall prevail.

The SBP has deferred the applicability of International Accounting Standard (IAS) 39 - 'Financial Instruments: Recognition and
Measurement' and IAS 40 - 'Investment Property' for Banking Companies in Pakistan through BSD Circular Letter 10 dated August
26, 2002 till further instructions. Further, the SECP has deferred the applicability of IFRS 7 - 'Financial Instruments: Disclosures'
through its notification S.R.O 633(I)/2014 dated July 10, 2014. Accordingly, the requirements of these standards have not been
considered in the preparation of these financial statements. However, investments have been classified and valued in accordance
with the requirements prescribed by the SBP through various circulars.

The SBP vide its BPRD circular No. 03 dated July 05, 2022 has extended the implementation date of IFRS 9 from January 01, 2022
to January 01, 2024 for banks having assets size of less than PKR 500 billion as at December 31, 2021. However, during the
transition period, the banks are required to carry out the parallel run reporting.
 The SBP vide its BPRD Circular Letter No. 4 dated February 25, 2015, has clarified that the reporting requirements of IFAS 3,
'Profit and Loss Sharing on Deposits', for Islamic Banking Institutions (IBIs) relating to annual, half-yearly and quarterly financial
statements would be notified by the SBP through issuance of specific instructions and uniform disclosure formats in consultation
with IBIs. These reporting requirements have not been ratified to date. Accordingly, the disclosure requirements under IFAS 3 have
not been considered in preparation of these financial statements.

2.2 Amendments to accounting and reporting standards as applicable in Pakistan that are effective in the current year

There are certain new and amended standards, interpretations and amendments that are mandatory for the Bank's accounting periods
beginning on or after January 01, 2022 but are considered not to be relevant or do not have any significant effect on the Bank's
operations and therefore not detailed in these financial statements.

Effective from Accounting

period beginning on or after

Amendment to IFRS 16 'Leases' - Covid-19 related rent concessions extended beyond June April 01, 2021
30, 2021

Amendments to IAS 16 'Property, Plant and Equipment' - Proceeds before intended use January 01, 2022

Amendments to IAS 37 'Provisions, Contingent Liabilities and Contingent Assets' - Onerous

January 01, 2022
Contracts — cost of fulfilling a contract

2.3 Standards, interpretations and amendments to accounting and reporting standards as applicable in Pakistan that are not
yet effective

The following amendments are only effective for accounting periods, beginning on or after the date mentioned against each of them.

Effective from Accounting

period beginning on or after

Amendments to IAS 1 'Presentation of Financial Statements' - Disclosure of accounting policies January 01, 2023

Amendments to IAS 8 'Accounting Policies, Changes in Accounting Estimates and Errors' -

January 01, 2023
Definition of accounting estimates

Amendments to 'IAS 12 Income Taxes' - deferred tax related to assets and liabilities arising
January 01, 2023
from a single transaction.

Amendments to IFRS 16 ' Leases' -Lease Liability in a Sale and Leaseback January 01, 2024

Amendments to IAS 1 'Presentation of Financial Statements' - Non-current Liabilities with

January 01, 2024
Covenants

The above amendments are not expected to have any material impact on the Bank's financial statements in the period of initial
application.

In addition to above amendments, the International Accounting Standards Board (IASB) has also issued the following standards
which are yet to be notified by the SECP for the purpose of applicability in Pakistan:

- IFRS 1 – First Time Adoption of International Financial Reporting Standards

- IFRS 17 – Insurance Contracts

3 BASIS OF MEASUREMENT

3.1 Accounting convention

These financial statements have been prepared under the historical cost convention, except that available for sale investments and
derivative financial instruments are carried at fair value. Further, net obligations in respect of defined benefit schemes and ijarah
(lease) liabilities which are carried at their present values.

3.2 Functional and presentation currency

These financial statements have been presented in Pakistani Rupees, which is the Bank's functional and presentation currency.
3.3 Critical accounting estimates and judgments

The preparation of financial statements in conformity with accounting and reporting standards as applicable in Pakistan requires
management to make judgments, estimates and assumptions that affect the reported amounts of assets and liabilities and income and
expenses. It also requires management to exercise judgment in application of its accounting policies. The estimates and associated
assumptions are continually evaluated and are based on historical experience and various other factors including expectation of
future events that are believed to be reasonable under the circumstances. These estimates and assumptions are reviewed on an
ongoing basis. Actual results may differ from these estimates. Revisions to accounting estimates, if any, are recognised in the period
in which the estimate is revised if the revision affects only that period, or in the period of revision and future periods if the revision
affects both current and future periods.

The significant accounting areas where various assumptions and estimates are significant to the Bank's financial statements or where
judgment was exercised in the application of accounting policies are as follows:

i) classification, valuation and provisioning against investments (notes 4.3 and 8)

ii) classification and provisioning against Islamic financing and related assets (notes 4.4 and 9)
iii) assumption and estimation in recognition of provision for taxation and deferred taxation (notes 4.6, 12 and 31)
iv) determination of useful lives and depreciation / amortisation (notes 4.5, 10 and 11)
v) accounting for defined benefit plan (notes 4.12 and 35)
vi) determination of the lease term and incremental fund acceptance rate for lease contracts (note 4.10)
vii) provision, contingent assets and liabilities (note 4.18 and 21)

4 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The principal accounting policies applied in the preparation of these financial statements are set out below. These have been
consistently applied to all the years presented.

4.1 Cash and cash equivalents

Cash and cash equivalents for the purpose of cash flow statements comprise of cash, balances with treasury banks, balances with
other banks in current and deposit accounts and overdrawn nostro accounts.

4.2 Due to / from financial institutions

Commodity Murabaha

In Commodity Murabaha, the Bank sells commodities on credit to other financial institutions. The credit price is agreed at the time
of sale and such proceeds are received at the end of the credit period.

Bai Muajjal

In Bai Muajjal, the Bank sells sukuk on credit to other financial institutions. The credit price is agreed at the time of sale and such
proceeds are received at the end of the credit period.

Musharaka / Mudaraba

In Musharaka / Mudaraba, the Bank invests in the shari'a compliant business pools of the financial institutions at the agreed profit
and loss sharing ratio.

Musharaka from State Bank of Pakistan under Islamic Export Refinance Scheme (IERS)

Under IERS, the Bank accepts funds from the SBP under Shirkat-ul-Aqd to constitute a pool for investment in export refinance
portfolio of the Bank under guidelines issued by the SBP. The profit of the pool is shared as per the agreed weightages between the
partners

Mudaraba investments from the SBP under Islamic Long Term Financing Facility and other refinance schemes

The Bank accepts funds from the SBP for financial assistance on Mudaraba basis for investment in general pool of the Bank. The
profit of the pool is shared as per the announced profit sharing ratio of the pool and the weightages assigned to these investments.
4.3 Investments

4.3.1 Classification

Investments of the Bank are classified as follows:

(a) Held-for-trading

These are investments, which are either acquired for generating profits from short-term fluctuations in market prices or are securities
included in a portfolio for which there is evidence of a recent actual pattern of short-term profit taking.

(b) Held-to-maturity

These are investments with fixed or determinable payments and fixed maturity that the Bank has the positive intent and ability to
hold till maturity.

(c) Available-for-sale

These are investments which do not fall under the 'held for trading' or 'held to maturity' categories.

4.3.2 Regular way contracts

All purchases and sales of investments that require delivery within the time frame established by regulation or market convention are
recognised at trade date, which is the date on which the Bank commits to purchase or sell the investments.

4.3.3 Initial recognition and measurement

Investments other than those categorised as 'held for trading' are initially recognised at fair value which includes transaction costs
associated with the investment. Investments classified as 'held for trading' are initially recognised at fair value and transaction costs
are expensed in the profit and loss account.

4.3.4 Subsequent measurement

Subsequent to initial recognition investments are valued as follows:

(a) Held-for-trading

These are measured at subsequent reporting dates at fair value. Gains and losses on remeasurement are included in the profit and loss
account.

(b) Held-to-maturity

These are measured at amortised cost using the effective profit rate method, less any impairment loss recognised to reflect
irrecoverable amount.

(c) Available for sale

In accordance with the requirements specified by the SBP, quoted securities other than those classified as 'held to maturity' are
subsequently re-measured to market value. Unquoted equity securities are valued at the lower of cost and break-up value. Break-up
value of unquoted equity securities is calculated with reference to the net assets of the investee company as per the latest available
audited financial statements. Investment in other unquoted securities are valued at cost less impairment losses, if any.

Surplus / deficit arising on revaluation of quoted securities which are classified as 'available for sale', is included in the statement of
comprehensive income and is shown in the statement of financial position as part of equity. On derecognition of available-for-sale
investments, the cumulative gain / loss, if any, previously reported in other comprehensive income is transferred to profit and loss
account for the period within statement of comprehensive income.

4.3.5 Impairment

Impairment loss in respect of investments classified as available for sale and held to maturity (except sukuk) is recognised based on
management's assessment of objective evidence of impairment as a result of one or more events that may have an impact on the
estimated future cash flows of the investments. A significant or prolonged decline in fair value of an equity investment below its
cost is also considered an objective evidence of impairment. Provision for diminution in the value of sukuk is made as per the
Prudential Regulations issued by the SBP. In case of impairment of available for sale securities, the cumulative loss that previously
reported in other comprehensive income is transferred to profit and loss account for the year. For investments classified as held to
maturity, the impairment loss is recognised in the profit and loss account.

4.3.6 Gains or losses on sale of investments are included in the profit and loss account for the year.
4.4 Islamic financing and related assets

The products originated by the Bank principally comprise of Murabaha, Running Musharaka, Wakala, Wakala Istithmar, Istisna
cum Wakala, Tijarah, Islamic Export Refinance Scheme and Shirkatulmilk. These are stated net of general and specific provisions.

Murabaha to the purchase orderer is a sale transaction wherein the first party (the Bank) sells to the client / customer a shari'a
compliant asset / good for cost plus a pre-agreed profit after getting title and possession of the same. On the basis of an undertaking
(Promise-to-Purchase) from the client (the purchase orderer), the Bank purchases the goods / assets subject of the Murabaha from a
third party and takes the possession thereof. However, the Bank can appoint the client as its agent to purchase the goods / assets on
its behalf. Thereafter, it sells it to the client at cost plus the profit (agreed upon).

Import Murabaha is a product used to finance a commercial transaction which consists of purchase by the Bank (generally through
an undisclosed agent) the goods from the foreign supplier and selling them to the customer after getting the title to and possession of
the goods. Murabaha financing is extended to all types of trade transactions i.e. under Documentary Credits (LCs) and Documentary
Collections.

Musharaka is a form of partnership in business with distribution of profit in agreed ratio and distribution of loss in the ratio of
capital invested.

In Shirkat-ul-Milk, the Bank and the customer become co-owners in certain identified assets by acquiring the same from a third
party or by purchase of an undivided share of an asset from the customer by the Bank. Thereafter, the customer / co-owner
undertakes to purchase the share of the Bank from the Bank in a manner that the Bank would recover its cost plus the desired profit
over a period of time (i.e. till the maturity of the facility). At the end of the facility term the Bank at its own discretion may sell its
share to the customer at a nominal price.

Wakala Istithmar has been developed to facilitate exporters through investment agency where the customer acts as the investment
agent of the Bank. This medium is used to cater to the export based customer’s financial needs i.e. help the customer to bridge the
gap between the commencement of the manufacturing process and the dispatch of goods to the ultimate buyer / buyers.

Istisna cum Wakala product has two legs: first the Bank acquires the described goods by way of Istisna to be manufactured by the
customer from raw material of its own and once the goods are delivered to the Bank, the customer through an independent agency
contract, sells the same to various end-users as the agent of the Bank.

Salam is a sale transaction where the seller undertakes to supply some specific goods to the buyer at a future date against an advance
price fully paid on spot.

In Running Musharaka financing, the Bank enters into financing with the customer based on Shirkat-ul-Aqd or Business Partnership
in customers operating business. Under this mechanism the customer can withdraw and return funds to the Bank subject to his
Running Musharaka Financing limit during the Musharaka period. At the end of each quarter / half year the customer pays the
provisional profit as per the desired profit rate which is subject to final settlement based on the relevant quarterly/half-yearly/annual
accounts of the customer.

In Tijarah financing, the Bank purchases specific goods / commodities on cash basis from its customers which is then onward sold
by the customer on behalf of the Bank and on subsequent sale, the financed amount along with profit is paid by the customer to the
Bank.

In Musawamah financings, the Bank purchases the goods and after taking the possession, sells them to the customer either in spot or
credit transaction, without disclosing the cost.

Inventory

The Bank values its inventories at the lower of cost or net realisable value. The net realisable value is the estimated selling price in
the ordinary course of business less the estimated cost necessary to make the sale. Cost of inventories represents actual purchases
made by the Bank / customers as an agent of the Bank for subsequent sale.

Specific provision

The Bank maintains specific provision for non performing Islamic financing based on the requirements specified in the Prudential
Regulations issued by the SBP.

General provision

In accordance with the Prudential Regulations issued by SBP, unless specific exemption is available from SBP (note 9.13.3), the
Bank maintains general provisions as follows:

Secured Unsecured

Consumer financings (including housing finance) 0.5% - 1.5% 5.0%

The SBP vide its letter no. BPRD/BLRP-04/DIB 2013/1644 dated October 15, 2009 has allowed relaxation to the Bank for
recognizing general provision against Musharaka cum Ijara-Autos on the condition that the facility will be categorized as 'Loss' on
the 180th day from the date of default.
 In this regard, the SBP vide its letter no. BPRD/BLRP-04/DIB 2013/1644 dated February 15, 2013 has decided that the exemption
from general reserve requirement shall only be valid till classified Auto financing portfolio of the Bank remain up to 5% of total auto
financing of the Bank i.e. if the classified auto financing portfolio increases beyond 5% threshold, the exemption shall stand
withdrawn from that point of time.

The net provision made / reversed during the year is charged to the profit and loss account and accumulated provision is netted off
against Islamic financing and related assets. Islamic financing and related assets are written off when there are no realistic prospects
of recovery.

4.5 Fixed assets and intangibles

4.5.1 Property and equipment

These assets are stated at cost less accumulated depreciation and accumulated impairment losses, if any. Depreciation is charged to
income by applying the straight line method over the estimated useful lives of the assets, using the rates specified in note 10.2 to
these financial statements. The depreciation charge for the year is calculated after taking into account residual value, if any.
Depreciation is charged from the month of acquisition and upto the month preceding the month of disposal.

The assets residual values, if significant, and their useful lives are reviewed and adjusted, if appropriate, at each reporting date.

Maintenance and normal repairs are charged to profit and loss account as and when incurred. Subsequent costs are included in the
asset's carrying amount or are 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.

Gains and losses on disposal of property and equipment, if any, are taken to the profit and loss account.

4.5.2 Right-of-Use (RoU) assets

At the commencement date of the lease, the right-of-use asset is initially measured at the present value of lease liability.
Subsequently, RoU assets are measured at cost, less accumulated depreciation and any impairment losses, and adjusted for any
premeasurement of lease liabilities and prepayments. RoU assets are depreciated on a straight-line basis over the shorter of its
estimated useful life and the lease term.

4.5.3 Capital work-in-progress

Capital work-in-progress is stated at cost less accumulated impairment losses, if any.

4.5.4 Intangible assets

Intangible assets having a finite useful life are stated at cost less accumulated amortisation and accumulated impairment losses, if
any. Such intangible assets are amortised using the straight-line method over their estimated useful lives. The useful lives and
amortisation method are reviewed and adjusted, if appropriate at each reporting date. Intangible assets having an indefinite useful
life are stated at acquisition cost, less impairment loss, if any. Amortisation is charged from the month of acquisition and upto the
month preceding the month of deletion using the rates specified in note 11.1 to these financial statements.

4.5.5 Impairment

The Bank assesses at each reporting date whether there is any indication that the fixed assets and intangibles may be impaired. If
such indication exists, the carrying amounts of such assets are reviewed to assess whether they are recorded in excess of their
recoverable amounts. Where carrying values exceed the respective recoverable amounts, assets are written down to their recoverable
amounts and the resulting impairment charge is recognised in the profit and loss account.

4.6 Taxation

Income tax expense comprises of current, prior and deferred tax. Income tax expense is recognised in the profit and loss account
except to the extent that it relates to items recognised in other comprehensive income, in which case it is recognised in other
comprehensive accordingly.

Current

Provision for current taxation is based on taxable income for the year, at current rates of taxation, after taking into consideration
available tax credits, rebates and tax losses as required under the Seventh schedule to the Income Tax Ordinance, 2001. The charge
for current tax also includes adjustments, where considered necessary relating to prior years, which arises from assessments /
developments made during the year.
 Deferred

Deferred tax is recognised using the liability method on all major temporary differences between the carrying amounts of assets and
liabilities used for financial reporting purposes and amounts used for taxation purposes. Deferred tax is calculated using the rates
that are expected to apply to the period when the differences reverse based on tax rates that have been enacted or substantively
enacted at the reporting date.

A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the
asset can be utilised.

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

4.7 Deposits

Deposits are generated on the basis of two modes i.e. Qard and Mudaraba.

Deposits taken on Qard basis are classified as 'Current accounts' and deposits generated on mudaraba basis are classified as 'Savings
deposits' and 'Fixed deposits'. No profit or loss is passed on to current account depositors. While the product features of each product
differ, there is usually no restriction on withdrawals or number of transactions in current and saving accounts. In case of fixed
deposits, pre-mature withdrawals can be made as per approved terms only.

Profits realised in common pool are distributed between the Bank and the depositors in proportion to their respective share in the
pool. All Mudarba based deposits are fully invested in the Common Pool to produce returns for them. In case where the Bank is
unable to utilise all funds available for investment, priority is given to the deposit account holders. Rab-ul-Maal share is distributed
among depositors according to weightages assigned at the inception of profit calculation period. Mudarib can distribute its share of
profit to Rab-ul-Maal upto a maximum of 60% of their profit as incentive profits (General Hiba).

Profits are distributed from the pool such that the depositors (remunerative) only bear the risk of assets in the pool during the profit
calculation period. In case of loss in a pool during the profit calculation period, the loss is distributed among the depositors
(remunerative) according to their ratio of investments.

When foreign currency deposits are swapped for investment in local currency, the swap element is separated from foreign exchange
income and is charged to profit / return expensed directly (note 24).

4.8 Pool Management

The Bank operates general and specific pools for deposits and inter-bank funds accepted / acquired under Mudaraba and Musharaka
modes.

Under the general deposits pool, the Bank accepts funds on Mudaraba basis from depositors (Rab-ul-Maal) where the Bank acts as
Manager (Mudarib) and invests the funds in the Shari'a Compliant modes of financing, investments and placements. When utilising
and investing funds, the Bank prioritises the funds received from depositors over the funds generated from own sources after
meeting the regulatory requirement relating to such deposits.

Specific pools are operated for funds acquired / accepted from the SBP under IERS, high net-worth individuals / companies /
financial institutions and other banks for investments in Shari'a compliant modes of financing and liquidity management under the
Musharaka / mudaraba / Wakala modes respectively.

The profit of each deposit pool is calculated on all the remunerative assets booked by utilising the funds from the pool after
deduction of expenses directly incurred in earning the income of such pool along with related fee income, if any. The directly related
costs comprise of tracker and similar related costs. No expense of general or administrative nature is charged to pools. No provision
against any non-performing asset of the pool is passed on to the pool except on the actual loss / write-off of such non-performing
asset. Further, provisions passed on to the pool in prior periods have been credited to pool income in the current period as reduction
in expense to the extent of recovery of provision previously charged to the pool. The profit of the pool is shared between equity and
other members of the pool on pro-rata basis at gross level (i.e. before charging of mudarib fee) as per the investment ratio of the
equity. The profit of the pool is shared among the depositors of the pool on pre-defined mechanism based on the weightages
announced before the commencement of profit calculation period after charging mudarib fee. Incentive profits (General Hiba) is
allocated to the depositors based on SBP guidelines across the board.

General Pool

For General Pool, the Bank allocates financing to Corporate, SME and Consumer Finance customers in diversified sectors and
avenues of the economy / business as mentioned in note 44. All remunerative deposits are tagged to these general pool and their
funds generated from the depositors are invested on priority basis. Depositors are Rabb-ul-Maal as they are the provider of capital
while the Bank acts as Mudarib by investing these funds in business. Since there are more than one Rabb-ul-Maal (depositor), their
mutual relationship is that of Musharaka. Profit is shared among Mudaraba partners (Bank and depositors) as per pre-agreed profit
sharing ratio. Whereas, profit sharing among the depositors is based on pre-assigned weightages. Loss, if any, is borne by Rabb-ul-
Maal as per the principles of Mudaraba.
 Islamic Export Refinance - Musharaka Pool

The IERS pool assets comprise of Sovereign Guarantee Sukuk, and financing to / sukuk of blue chip companies and exporters as
allowed under the applicable laws and regulations, and as such are exposed to lower credit risk. In this Scheme, the SBP enters into a
Musharaka arrangement with the Bank for onward financing to exporters and other blue chip companies on the basis of Shari'a
compliant modes such as Murabaha, Istisna, etc. Under the scheme, the SBP is required to share in profit and loss of the Bank's
IERS Musharaka pool.

Interbank Musharaka / Mudaraba Pools

The pool assets generally comprise of Sovereign Guarantee Sukuk only and the related liability of the Financial Institution (FI) pool
comprise of Musharaka/Mudaraba from other banks and financial institutions. These pools are created to meet the liquidity
requirements of the Bank.

Key features and risk & reward characteristics of all pools

The risk characteristics of each pool mainly depends on the assets and liability profile of each pool. As per the Bank's policy,
relatively low risk / secured financing transactions and assets are allocated to general depositors pool. The Bank maintains General
Pool, FI Pools, IERS pool and Equity pool. The general pool are exposed to general credit risk, asset ownership risk and profit rate
risk of the underlying assets involved.

The pool is exposed to Asset Risk which is the risk that is associated with Islamic mode of finance(s) applied / used under the
transaction structure(s). The Bank is well equipped to identify and properly mitigate such risk. The Bank also analyses transaction
structure of each customer to further ensure proper safeguard of depositors' interest. The review is done by a team of professionals
having considerable experience in the field of Islamic banking and finance. Nevertheless since Islamic banking is a growing
industry, we believe that the process of further improvement will continue as the business grows.

Credit Risk is the risk which is associated with financing that is mitigated by placing safeguards through available standards within
Shari'a guidelines as disclosed in note 43.1 to these financial statements.

Gross income (Revenue less cost of goods sold and after deduction of other direct expenses), generated from relevant assets is
calculated at the end of the month. The income is shared between the Bank and the depositors as per agreed profit sharing ratio after
deduction of commingled Bank's equity share on pro rata basis. The residual is shared among depositors as per agreed weightages.
These weightages and profit sharing ratios are declared by the Bank in compliance with the requirements of the SBP and Shari'a.

The allocation (of income and expenses to different pools) is based on pre-defined basis and accounting principles / standards.
Provisions against any non-performing assets of the pool is not passed on to the pool.

4.9 Subordinated Sukuk

The Bank records subordinated sukuk initially at the amount of proceeds received. Profit accrued on subordinated sukuk is charged
to the profit and loss account.

4.10 Ijarah (lease) Liability

At the commencement date of the ijarah (lease), the Bank recognises ijarah (lease) liability measured at the present value of the
consideration (ijarah payments) to be made over the Ijarah (lease) term. The lease payments are discounted using the effective rate
implicit in the ijarah (lease), unless it is not readily determinable, in which case the Mustajir (lessee) may use the incremental rate of
financing. After the commencement date, the carrying amount of ijarah (lease) liability is increased to reflect the accretion of
finance cost and reduced for the ijarah (lease) payments made.

4.11 Earnings Per Share

Basic EPS is calculated by dividing the profit attributable to ordinary shareholders of the Bank by the weighted average number of
ordinary shares outstanding during the year. Diluted EPS is determined by adjusting the profit attributable to ordinary shareholders
and the weighted average number of ordinary shares outstanding for the effects of all dilutive potential ordinary shares, if any.

4.12 Staff Retirement Benefits

4.12.1 Defined benefit plan

The Bank operates an approved funded gratuity scheme for its permanent employees. The liability recognised in the statement of
financial position in respect of defined benefit gratuity scheme, is the present value of the defined benefit obligation at the reporting
date less the fair value of plan assets. Contributions to the fund are made on the basis of actuarial recommendations. The defined
benefit obligation is calculated periodically by an independent actuary using the projected unit credit method. Last valuation was
conducted as on December 31, 2022.

Amounts arising as a result of remeasurements, representing the actuarial gains and losses and the difference between the actual
investment returns and the return implied by the net interest cost are recognised in the statement of financial position immediately,
with a charge or credit to other comprehensive income in the years in which they occur.
4.12.2 Defined contribution plan

The Bank operates an approved funded contributory provident fund for all its permanent employees to which equal monthly
contributions are made both by the Bank and the employees at the rate of 10% per annum of basic salary. The Bank has no further
payment obligations once the contributions have been paid. The contributions made by the Bank are recognised as employee benefit
expense when they are due.

4.13 Revenue Recognition

- Profit from Murabaha is accounted for on consummation of Murabaha transaction. However, profit on the portion of revenue
not due for payment is deferred by accounting for unearned Murabaha income with a corresponding credit to deferred
Murabaha income which is recorded as a liability. The same is then recognised as revenue on time basis after acquisition of
assets. In Murabaha transactions, the Bank purchases the goods and after taking the possession, sells them to the customer on
cost plus profit basis either in a spot or credit transaction.

- Profit from Istisna cum wakala and salam financings is recorded on an accrual basis commencing from the time of sale of
goods till the realisation of proceeds by the Bank.

- Profit on Shirkatulmilk is recognised on the basis of the reducing balance method on a time apportioned basis that reflects the
effective return / profit on the asset.

- Profit on Wakala is accounted for on a time apportioned basis that reflects the effective yield on the asset.

- Profit on Running Musharaka financing is recognised on an accrual basis. Actual profit / (loss) on Musharaka and mudaraba
financing is adjusted after declaration of profit / (loss) by Musharaka partner / mudarib or at liquidation of Musharaka /
mudaraba.

- Profit on Bai Muajjal transaction is recognised on an accrual basis.

- Gains and losses on sale of investments are included in the profit and loss account.

- Profit on Sukuk is recognised on an accrual basis. Where Sukuk (excluding held for trading securities) are purchased at a
premium or discount, those premiums / discounts are amortised through the profit and loss account over the remaining
maturity, using the effective yield method.

- Commission on letters of credit, acceptances and guarantees is recognised on receipt basis.

- Fee, commission and brokerage are recognised when earned.

- Profit suspended in compliance with the Prudential Regulations issued by the SBP is recorded on receipt basis. Profit on
rescheduled / restructured financings and investments are recognised as per the guidance in prudential regulations.

4.14 Financial Instruments

4.14.1 Financial assets and financial liabilities

All financial assets and liabilities are recognised at the time when the Bank becomes a party to the contractual provisions of the
instrument. Financial assets are derecognised when the Bank loses control of the contractual rights that comprise the financial assets.
Financial liabilities are derecognised when they are extinguished, i.e. when the obligation specified in the contract is discharged,
cancelled or expires. Any loss on derecognition of the financial assets and financial liabilities is taken to income directly. Financial
assets carried on the statement of financial position include cash and bank balances, due from financial institutions, investments,
Islamic financing and related assets, certain receivables and financial liabilities include bills payable, due to financial institutions,
deposits, sub-ordinated debt and other payables. The particular recognition methods adopted for significant financial assets and
financial liabilities are disclosed in the individual policy statements associated with them.

4.14.2 Offsetting of financial instruments

Financial assets and financial liabilities are off-set and the net amount is reported in the financial statements only when there is a
legally enforceable right to set-off the recognised amount and the Bank intends either to settle on a net basis, or to realise the assets
and to settle the liabilities simultaneously. Income and expense items of such assets and liabilities are also off-set and the net amount
is reported in the financial statements.

4.14.3 Derivatives

Derivative financial instruments are recognised at fair value. Derivatives with positive market values (unrealised gains) are included
in other receivables and derivatives with negative market values (unrealised losses) are included in other liabilities in the statement
of financial position. The resultant gains and losses are taken to profit and loss account.
4.15 Fiduciary Assets

Assets held in a fiduciary capacity are not treated as assets of the Bank in these financial statements.

4.16 Acceptances

Acceptances comprise undertakings by the Bank to pay bill of exchange drawn on customers. Acceptances are recognised as
financial liability in the statement of financial position with a contractual right of reimbursement from the customer as a financial
asset. Therefore, commitments in respect of acceptances have been accounted for as financial assets and financial liabilities.

4.17 Foreign Currencies

Foreign currency transactions and balances

Foreign currency transactions are recorded in rupees at exchange rates prevailing on the date of transaction. Monetary assets,
monetary liabilities and contingencies and commitments in foreign currencies, except commitments for forward promises, at the year
end are converted in Rupees through exchange rates prevalent on the reporting date.

Forward contracts relating to foreign currency promises are valued at forward rates applicable to the respective maturities of the
relevant foreign exchange contracts.

Translation gains and losses

Translation gains and losses are included in the profit and loss account.

Commitments

Commitments for outstanding forward foreign exchange promises are disclosed at agreed rates. Contingent liabilities / commitments
for letters of credit and letters of guarantee denominated in foreign currencies are expressed in rupee terms at the exchange rates
prevalent on the reporting date.

4.18 Provisions and Contingent Assets and Liabilities

Provisions are recognised when the Bank has a present legal or constructive obligation arising as a result of past events and it is
probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate of
the amount of the obligation can be made. Provisions are reviewed at each reporting date and are adjusted to reflect the current best
estimates.

Contingent assets are not recognised, and are also not disclosed unless an inflow of economic benefits is probable and contingent
liabilities are disclosed unless the probability of an outflow of resources embodying economic benefits is remote.

4.19 Segment Reporting

A segment is a distinguishable component of the Bank that is engaged in business activities (business segment), within a particular
economic environment (geographical segment). Performance of each segment is reviewed on a periodic basis.

4.19.1 Business segments

Corporate Banking
Principally handling financing, other credit facilities, deposits, current accounts, cash management and risk management products
for corporate and institutional customers.

SME & Commercial Banking

Principally handling financing, other credit facilities, deposits, current accounts, cash management and risk management products
for customers of small and medium enterprises and commercial enterprises.

Consumer banking
Principally handling individual customers' deposits, providing consumer musawamah, home finance, car finance and other banking
products.

Treasury
Principally responsible for managing the Bank's overall liquidity and market risk and provides treasury services to customers.

Others
Others includes functions which cannot be classified in any of the above segments.

4.19.2 Geographical segment

The Bank operates only in Pakistan.

 2022 2021
Note ------ Rupees in '000 ------
5 CASH AND BALANCES WITH TREASURY BANKS

In hand
Cash in HandLCY
- local currency 4,614,182 4,123,049
Cash in HandFCY
- foreign currencies 981,572 801,268
5,595,754 4,924,317
0000335001ABN
With State AMRO
Bank ofSETTLEMENT
Pakistan in ACCOUNTPKR
SBP BalanceLCY
- local currency current accounts 5.1 38,154,888 16,286,776
SBP Clearing
- foreign
Account
currency
- FCY
current accounts 34,744 59,647
- foreign currency deposit accounts
SBP Current
- Cash
Account
reserve
5%account
- FCY 5.2 1,674,570 1,601,948
SBP Deposit
- Special
Account
cash
6% reserve
- FCYaccount 5.2 - 1,922,214
SBP Current Account 5% - FCY 1,674,570 3,524,162
With National Bank of Pakistan in
NBP LCY
- local currency current accounts 172,152 966,337
45,632,108 25,761,239
NBP LCY
5.1 The local currency current account is maintained with the State Bank of Pakistan (SBP) as per the requirements of Section
22 of the Banking Companies Ordinance, 1962. This section requires banking companies to maintain a local currency cash
reserve in the current account opened with the SBP at a sum not less than 6% (2021: 6%) of its demand and time liabilities
in Pakistan.

5.2 As per DMMD Circular No. 20 dated November 13, 2021 and BSD Circular No. 15 dated June 21, 2008, , cash reserve of
6% (2021: 6%) and special cash reserve of 6% (2021: 6%) are required to be maintained with SBP on deposits held under
the New Foreign Currency Accounts Scheme (FE-25 deposits). However, SBP has allowed relaxation to the Bank in
maintaining the special cash reserve requirement of 6% till January 05, 2023. These accounts are non-remunerative in
nature.

2022 2021
Note ------ Rupees in '000 ------
6 BALANCES WITH OTHER BANKS

In Pakistan
Current Account
- in local- Inside
currency
Pakistan
current account 244,841 753,540
Current Account
- in foreign
- Inside
currency
Pakistan
current
- FCY
account 95 322
244,936 753,862
NBP FCY
Outside Pakistan
Current Account
- in foreign
- Outside
currency
Pakistan
current accounts 6.1 901,385 610,011
1,146,321 1,363,873

6.1 This includes an amount of Rs. 128.64 million (2021: Rs. 128.77 million) deposited with the holding company.

Note 2022 2021

7 DUE FROM FINANCIAL INSTITUTIONS ------ Rupees in '000 ------

Musharaka
Musharaka
Placements
- unsecured 7.1 23,500,000 1,000,000
Placement
Other
to placement
SBP - MPMGwith State Bank of Pakistan - 31,302
23,500,000 1,031,302

7.1 These carry expected yield of 15% to 16.25% (2021: 10.50%) per annum and are due to mature latest by January 03, 2023
(2021: January 4, 2022).

2022 2021
7.2 Particulars of amounts due from financial institutions ------ Rupees in '000 ------
In local currency 23,500,000 1,031,302
In foreign currency - -
23,500,000 1,031,302
8 INVESTMENTS

8.1 Investments by types:

Note 2022 2021

Cost / Provision for (Deficit) / Carrying Cost / Provision for (Deficit) / Carrying
amortised cost diminution surplus value amortised cost diminution surplus value

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

Available-for-sale securities
Federal Government securities 8.4.1 47,237,843 - (218,500) 47,019,343 24,258,893 - (139,520) 24,119,373

Non-Government debt securities 8.4.2 39,273,566 (89,316) 1,047,563 40,231,813 42,749,533 (89,316) 1,365,876 44,026,093

Foreign securities 8.4.3 18,121,595 - (2,011,616) 16,109,979 16,822,353 - (106,071) 16,716,282

Total investments 104,633,004 (89,316) (1,182,553) 103,361,135 83,830,779 (89,316) 1,120,285 84,861,748

2022 2021

Cost / Provision for (Deficit) / Carrying Cost / Provision for (Deficit) / Carrying
amortised cost diminution surplus value amortised cost diminution surplus value

8.2 Investments by segments:

----------------------------------------------------------- Rupees in '000 -----------------------------------------------------------
Federal Government securities
GOP Ijarah sukuk 43,400,000 - (218,500) 43,181,500 23,400,000 - (139,520) 23,260,480
Islamic Naya Pakistan Certificates 3,837,843 - - 3,837,843 858,893 - - 858,893
47,237,843 - (218,500) 47,019,343 24,258,893 - (139,520) 24,119,373
Non-Government debt securities
Listed 37,314,250 - 945,311 38,259,561 37,600,217 - 1,305,723 38,905,940
Unlisted 1,959,316 (89,316) 102,252 1,972,252 5,149,316 (89,316) 60,153 5,120,153
39,273,566 (89,316) 1,047,563 40,231,813 42,749,533 (89,316) 1,365,876 44,026,093

Foreign securities
Government debt securities 5,957,931 - (893,687) 5,064,244 4,644,742 - 34,238 4,678,980
Non-Government debt securities 12,163,664 - (1,117,929) 11,045,735 12,177,611 - (140,309) 12,037,302
18,121,595 - (2,011,616) 16,109,979 16,822,353 - (106,071) 16,716,282

Total investments 104,633,004 (89,316) (1,182,553) 103,361,135 83,830,779 (89,316) 1,120,285 84,861,748

8.2.1 Investments given as collateral

No investments given as collateral at December 31, 2022 (2021: Nil).

8.3 Provision for diminution in value of investments 2022 2021

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

8.3.1 Opening balance 89,316 89,316

Provision
Charge
for diminution
/ (reversal) for
in the
the year
value of investments - -

Closing balance 89,316 89,316

8.3.2 Particulars of provision against debt securities

Category of classification 2022 2021

*NPI Provision *NPI Provision
-------------------- Rupees in '000 --------------------
Domestic
Other Assets Especially Mentioned - - - -
Substandard - - - -
Doubtful - - - -
Loss 89,316 89,316 89,316 89,316
89,316 89,316 89,316 89,316
Overseas - - - -
Total 89,316 89,316 89,316 89,316

* NPI stands for non-performing investments.

8.4 Quality of Available-For-Sale (AFS) Securities

Details regarding quality of AFS securities are as follows:

Cost / amortised cost
2022 2021
8.4.1 Federal Government securities - Government guaranteed ------ Rupees in '000 ------

Islamic Naya Pakistan Certificates 3,837,843 858,893

GOP Ijara sukuk - XXII 500,000 500,000
GOP Ijara sukuk - XXIII 400,000 400,000
GOP Ijara sukuk - XXIV 20,500,000 20,500,000
GOP Ijara sukuk - XXV 22,000,000 2,000,000
47,237,843 24,258,893

8.4.2 Non-Government debt securities

Listed
AA+, AA,AA+,
AA-AA, AA- - 192,217
A+, A, A-
A+, A, A- 406,250 500,000
Unrated Unrated 36,908,000 36,908,000
37,314,250 37,600,217
Unlisted
AAA 1,470,000 2,250,000
AA+, AA, AA- - 400,000
Unrated A+, A, A- 400,000 47,500
Unrated 89,316 2,451,816
1,959,316 5,149,316

39,273,566 42,749,533

Rating Cost / amortised cost

2022 2021 2022 2021
------ Rupees in '000 ------
8.4.3 Foreign securities

Government securities
Government of the Emirate of Sharjah Ba1 Baa3 5,957,931 4,644,742
5,957,931 9,289,484

Non-Government debt securities

Listed
BBB+/ Baa1,
BBB+BBB/
/ Baa1,
Baa2,
BBBBBB-/
/ Baa2,
Baa3
BBB- / Baa3 12,163,664 9,525,918
CCC+ CCC- - 2,651,693
12,163,664 12,177,611
18,121,595 16,822,353
9 ISLAMIC FINANCING AND RELATED ASSETS
Performing Non-Performing Total
2022 2021 2022 2021 2022 2021
Note ----------------------------------------------- Rupees in '000 -----------------------------------------------

Murabaha 9.1 19,296,641 21,938,164 1,017,271 1,361,618 20,313,912 23,299,782

Musawamah 9.2 5,493,399 3,777,120 198,937 163,900 5,692,336 3,941,020
Tijarah cum wakala 9.3 13,817,610 10,813,657 63,000 192,000 13,880,610 11,005,657
Istisna cum Wakala 9.4 17,898,652 14,909,213 502,698 609,411 18,401,350 15,518,624
Salam 9.5 182,070 1,763,274 - - 182,070 1,763,274
Islamic Export Refinance Scheme - SBP 9.6 16,369,663 16,186,797 125,295 136,322 16,494,958 16,323,119
Other Islamic Refinance Schemes - SBP 9.7 18,003,607 15,655,471 15,649 8,000 18,019,256 15,663,471
Wakala Istithmar 28,247,608 25,926,888 617,987 317,558 28,865,595 26,244,446
Running Musharaka financing 21,716,947 20,993,803 655,901 655,901 22,372,848 21,649,704
Shirkatulmilk - Housing 9.8 17,119,176 12,824,946 566,990 484,533 17,686,166 13,309,479
Shirkatulmilk - Autos 9.9 24,875,744 27,062,639 239,933 258,366 25,115,677 27,321,005
Shirkatulmilk - Fleet financing 9.10 4,735,574 5,676,188 175,388 312,691 4,910,962 5,988,879
Shirkatulmilk - Others 9.11 9,813,839 13,396,134 3,525,084 1,398,423 13,338,923 14,794,557
Diminishing Musharaka - Others 49,274,868 32,396,629 2,111,333 638,734 51,386,201 33,035,363
Staff financing 2,622,073 2,454,777 - - 2,622,073 2,454,777
Islamic financing and related assets (gross) 249,467,471 225,775,700 9,815,466 6,537,457 259,282,937 232,313,157

Provision against Islamic financing and

related assets 9.13
Specific - - (8,335,970) (4,034,938) (8,335,970) (4,034,938)
General (3,179,014) (2,913,326) - - (3,179,014) (2,913,326)
(3,179,014) (2,913,326) (8,335,970) (4,034,938) (11,514,984) (6,948,264)
Islamic financing and related assets
- net of provision 246,288,457 222,862,374 1,479,496 2,502,519 247,767,953 225,364,893

2022 2021
9.1 Murabaha Note --- Rupees in '000 ---
Financing 9.1.2 4,550,410 6,694,396
Inventory 14,775,412 15,573,375
Advance 988,090 1,032,011
20,313,912 23,299,782

9.1.1 Murabaha receivable - gross 9.1.2 4,550,410 6,694,396

Less: Deferred murabaha income 9.1.4 (673,569) (1,409,504)
Profit receivable (610,866) (541,010)
Murabaha financing 3,265,975 4,743,882

9.1.2 The movement in Murabaha financing during the year is as follows:

Opening balance 6,694,396 5,615,009
Sales during the year 33,804,698 11,118,683
Received during the year (35,948,684) (10,039,296)
Closing balance 4,550,410 6,694,396

9.1.3 Murabaha sale price 33,804,698 11,118,683

Murabaha purchase price (30,392,027) (9,115,826)
3,412,671 2,002,857
9.1.4 Deferred murabaha income
Opening balance 1,409,504 1,053,844
Arising during the year 3,412,671 2,002,857
Less: Recognised during the year (4,148,606) (1,647,197)
Closing balance 673,569 1,409,504

9.2 Musawamah
Financing 9.2.2 5,589,734 3,834,238
Advance 102,602 106,782
5,692,336 3,941,020

9.2.1 Musawamah receivable 9.2.2 5,589,734 3,834,238

Less: Deferred musawama income 9.2.4 (1,549,359) (1,026,748)
Profit receivable (72,833) (48,337)
Musawamah financings 3,967,542 2,759,153

9.2.2 The movement in Musawamah financing during the year is as follows:

Opening balance 3,834,238 2,858,989
Sales during the year 4,124,012 2,682,825
Received during the year (2,368,516) (1,707,576)
Closing balance 5,589,734 3,834,238

9.2.3 Musawamah sale price 4,124,012 2,682,825

Musawamah purchase price (2,706,514) (1,830,044)
1,417,498 852,781
9.2.4 Deferred Musawamah income
Opening balance 1,026,748 796,444
Arising during the year 1,417,498 852,781
Less: Recognised during the year (894,887) (622,477)
Closing balance 1,549,359 1,026,748
 2022 2021
--- Rupees in '000 ---
9.3 Tijarah cum wakala
Financing 10,125,486 7,930,533
Inventory 3,755,124 3,075,124
13,880,610 11,005,657

9.4 Istisna cum Wakala

Financing 12,918,728 7,581,580
Advance 5,482,622 7,937,044
18,401,350 15,518,624

9.5 Salam
Financing - 289,497
Advance 182,070 1,473,777
182,070 1,763,274

9.6 Islamic Export Refinance Scheme - SBP

Istisna - Advance 200,000 279,500
Istisna - Financing 419,000 509,500
Running Musharaka - Financing 8,900,800 8,885,800
Wakala Istithmar - Financing 6,975,158 6,648,319
16,494,958 16,323,119

9.7 Other Islamic Refinance Schemes - SBP

Islamic Long Term Financing Facility

-Diminishing Musharaka - Financing 4,534,058 3,464,187

Payment of Wages and Salaries Refinance Scheme

-Shirkatulmilk - Financing 199,665 1,912,456
-Running Musharaka - Financing - 545,235
-Murabaha - Financing 17,614 109,337
217,279 2,567,028
Islamic Financing Facility for Combating COVID 19
-Musharaka - Financing 633,493 817,893

Islamic Finance Facility For Renewable Energy

-Diminishing Musharaka - Financing 966,331 356,248

Islamic Temporary Economic Refinance Facility

-Musharaka - Financing 384,184 444,626
-Shirkatulmilk - Financing 10,809,500 7,639,539
11,193,684 8,084,165
Other Islamic Refinance Facilities
-Musharaka - Financing 474,411 373,950

18,019,256 15,663,471
9.8 Shirkatulmilk - Housing
Financing 17,348,216 12,950,699
Advance 337,950 358,780
17,686,166 13,309,479

9.9 Shirkatulmilk - Autos

Financing 24,544,215 23,835,334
Advance 571,462 3,485,671
25,115,677 27,321,005

9.10 Shirkatulmilk - Fleet financing

Financing 4,596,342 5,292,809
Advance 314,620 696,070
4,910,962 5,988,879

9.11 Particulars of Islamic financing and related assets (gross)

In local currency 258,581,768 230,215,986
In foreign currencies 701,169 2,097,171
259,282,937 232,313,157

9.12 Islamic financing and related assets include Rs. 9,815.47 million (2021: Rs. 6,537.46 million) which have been placed under non-performing status as detailed
below:
2022 2021
Non- Non-
Category of Classification Provision held Provision held
Performing Performing
----------------------- Rupees in '000 -----------------------
Domestic
Other Assets Especially Mentioned 62,572 156 22,122 -
Substandard 379,570 31,104 244,858 35,960
Doubtful 95,632 15,042 338,321 12,337
Loss 9,277,692 8,289,668 5,932,156 3,986,641
9,815,466 8,335,970 6,537,457 4,034,938
9.13 Particulars of provision against Islamic financing and related assets:

2022 2021
Specific General Total Specific General Total
---------------------------------------- Rupees in '000 ----------------------------------------

Opening balance 4,034,938 2,913,326 6,948,264 3,082,610 1,912,859 4,995,469

General Charge
Provision
forExp
the year 4,590,781 265,688 4,856,469 1,685,654 1,000,467 2,686,121
Reversals during the year (226,615) - (226,615) (595,661) - (595,661)
4,364,166 265,688 4,629,854 1,089,993 1,000,467 2,090,460
Amounts written-off (63,134) - (63,134) (137,665) - (137,665)
Closing balance 8,335,970 3,179,014 11,514,984 4,034,938 2,913,326 6,948,264

9.13.1 Particulars of provision against Islamic financing and related assets in respect of currencies:

2022 2021
Specific General Total Specific General Total
---------------------------------------- Rupees in '000 ----------------------------------------

In local currency 8,324,716 3,179,014 11,503,730 4,027,113 2,913,326 6,940,439

In foreign currency 11,254 - 11,254 7,825 - 7,825
8,335,970 3,179,014 11,514,984 4,034,938 2,913,326 6,948,264

9.13.2 As allowed by the SBP, the Bank has availed benefit of Forced Sale Value (FSV) amounting to Rs. 1,078.16 million (2021: Rs. 2,123.29
million) in determining the provisioning against non performing Islamic financings as at December 31, 2022. The additional profit arising
from availing the FSV benefit - net of tax as at December 31, 2022 which is not available for distribution as either cash or stock dividend to
shareholders amounted to Rs. 549.86 million (2021: Rs. 1,295.21 million).

9.13.3 General provisioning is held against consumer finance portfolio and small enterprise financings in accordance with the requirements of the
Prudential Regulations issued by the State Bank of Pakistan except for Shirkatulmilk financing - Autos. The SBP vide its letter no BPRD /
BLRD - 03 / 2009 / 6877 dated October 15, 2009 has allowed relaxation to the Bank from recognising general provision against
Shirkatulmilk financing - Autos on the condition that the facility will be categorised as "Loss" on the 180th day from the date of default. In
this regard, the SBP vide its letter no BPRD / BRD - 04 / DIB / 2013 / 1644 dated February 12, 2013 has decided that the exemption from
general reserve requirement shall only be valid till classified Auto Financing portfolio of the Bank remains upto 5% i.e. if the classified Auto
Financing portfolio increases beyond the 5% threshold, the exemption shall stand withdrawn from that point of time.

9.13.4 In addition to the above, the Bank has maintained a general provision of Rs. 2,914 million (2021: Rs. 2,714 million) against financing made
on prudent basis, in view of the prevailing economic conditions. This general provision is in addition to the existing requirements of
Prudential Regulations.
2022 2021
--- Rupees in '000 ---
9.14 Particulars of write offs:

9.14.1 Against Provisions 63,134 137,665

Directly charged to - -
Profit & Loss 63,134 137,665

9.14.2 Write Offs of Rs. 500,000 and above - Domestic 63,134 114,322
Write Offs of Below - 23,343
Rs. 500,000 63,134 137,665

9.15 Details of loan write off of Rs. 500,000/- and above

In term of sub-section (3) of section 33A of the Banking Companies Ordinance, 1962, the Statement in respect of written off financing or any
other financial relief of five hundred thousand rupees or above allowed to any person during the year ended December 31, 2022 is given as
Annexure 1.

2022 2021
Note --- Rupees in '000 ---
10 FIXED ASSETS

Capital work-in-progress 10.1 50,723 13,754

Property and equipment 10.2 1,605,101 1,494,794
Right-of-use assets 10.3 3,680,399 2,773,000
5,336,223 4,281,548

10.1 Capital work-in-progress

Civil works 8,768 441

Equipment 41,955 13,313
50,723 13,754
10.2 Property and equipment 2022
Electrical,
Furniture and office and Leasehold
Vehicles Total
fixture computer Improvements
equipment
----------------------------------- Rupees in '000 ----------------------------------
As at January 1,
Cost 446,556 2,884,413 84,139 1,563,888 4,978,996
Accumulated depreciation (342,304) (1,883,670) (50,214) (1,208,014) (3,484,202)
Net book value 104,252 1,000,743 33,925 355,874 1,494,794

Year ended December 31,

Opening net book value 104,252 1,000,743 33,925 355,874 1,494,794
Additions 28,746 335,467 51,827 80,057 496,097
Cost of assets disposed off (1,248) (243,835) (6,634) - (251,717)
Cost of assets written off - - - - -
27,498 91,632 45,193 80,057 244,380
Depreciation charge (23,862) (227,348) (16,902) (81,654) (349,766)
Accumulated depreciation of
disposals 1,011 209,375 5,307 - 215,693
Accumulated depreciation of assets
written-off - - - - -
(22,851) (17,973) (11,595) (81,654) (134,073)
Closing net book value 108,899 1,074,402 67,523 354,277 1,605,101

As at December 31,
Cost 474,054 2,976,045 129,332 1,643,945 5,223,376
Accumulated depreciation (365,155) (1,901,643) (61,809) (1,289,668) (3,618,275)
Net book value 108,899 1,074,402 67,523 354,277 1,605,101

Rate of depreciation 10% 10% to 33.33% 25% 5% to 15%

2021
Electrical,
Furniture and office and Leasehold
Vehicles Total
fixture computer Improvements
equipment
----------------------------------- Rupees in '000 ----------------------------------
As at January 1,
Cost 414,275 2,645,631 80,572 1,481,558 4,622,036
Accumulated depreciation (319,588) (1,783,176) (40,554) (1,117,878) (3,261,196)
Net book value 94,687 862,455 40,018 363,680 1,360,840

Year ended December 31,

Opening net book value 94,687 862,455 40,018 363,680 1,360,840
Additions 33,079 353,635 6,801 84,705 478,220
Cost of assets disposed-off (798) (114,853) (3,234) (2,375) (121,260)
Cost of assets written-off - - - - -
32,281 238,782 3,567 82,330 356,960
Depreciation charge (23,313) (196,946) (12,247) (91,714) (324,220)
Accumulated depreciation of
disposals 597 96,452 2,587 1,578 101,214
Accumulated depreciation of assets
written-off - - - - -
(22,716) (100,494) (9,660) (90,136) (223,006)
Closing net book value 104,252 1,000,743 33,925 355,874 1,494,794

As at December 31,
Cost 446,556 2,884,413 84,139 1,563,888 4,978,996
Accumulated depreciation (342,304) (1,883,670) (50,214) (1,208,014) (3,484,202)
Net book value 104,252 1,000,743 33,925 355,874 1,494,794

Rate of depreciation 10% 10%-33.33% 25% 5%-15%

10.2.1 Details of disposal of fixed assets are as follows:

2022
Accumulated Net book Mode of Particulars of
Cost Sale price (Loss) / gain
depreciation value disposal buyer
--------------------------------------------------- Rupees in '000 ---------------------------------------------------
Vehicle - Toyota Prado 4,950 3,960 990 4,200 3,210 Bank's Policy Hamza Cars
Host Security Module 3,452 2,934 518 17 (501) Bank's Policy Hanif & Co.
Host Security Module 3,452 2,935 517 17 (500) Bank's Policy Hanif & Co.
PABX 6,806 5,785 1,021 32 (989) Bank's Policy Hanif & Co.
Router/Switch 7,767 6,602 1,165 36 (1,129) Bank's Policy Hamid Manzoor
Router/Switch 7,767 6,602 1,165 36 (1,129) Bank's Policy Hamid Manzoor
Router/Switch 12,554 10,671 1,883 59 (1,824) Bank's Policy Hamid Manzoor

Items having book value

less than Rs. 500,000
Electrical, office and
201,912 173,733 28,179 6,725 (21,454) Bank's Policy Various
computer equipment
Electrical, office and Farhan Firdous Ali
125 113 12 12 - Bank's Policy
computer equipment (ex employee)
Vehicle 1,684 1,347 337 1,475 1,138 Insurance Claim Salaam Takaful
Furniture and fixture 1,248 1,011 237 250 13 Bank's Policy Various
204,969 176,204 28,765 8,462 (20,303)

251,717 215,693 36,024 12,859 (23,165)

10.2.2 During the year, there were no sale proceeds made to any related party.

10.2.3 The cost of fully depreciated fixed assets still in use amount to Rs. 2,718.40 million (2021: Rs. 2,629.57 million).

2022 2021
Note --- Rupees in '000 ---
10.3 Right-of-use assets

Building on leasehold land 10.3.1 3,680,399 2,773,000

10.3.1 Right-of-use assets - building on leasehold land

As at January 01,
Cost 5,188,669 3,794,384
Accumulated depreciation (2,415,669) (1,519,217)
Net book value 2,773,000 2,275,167

Year ended December 31,

Opening net book value 2,773,000 2,275,167
Additions 1,824,803 1,394,285
Depreciation charge (917,404) (896,452)
Closing net book value 3,680,399 2,773,000

As at December 31,
Cost 7,013,472 5,188,669
Accumulated depreciation (3,333,073) (2,415,669)
Net book value 3,680,399 2,773,000

11 INTANGIBLE ASSETS

Capital work-in-progress - Advance to suppliers 59,148 59,168

Computer software 11.1 350,204 319,368
409,352 378,536
 2022 2021
11.1 Intangible assets - computer software --- Rupees in '000 ---

As at January 01,
Cost 1,406,688 1,238,334
Accumulated amortisation (1,087,320) (1,013,633)
Net book value 319,368 224,701

Year ended December 31,

Opening net book value 319,368 224,701
Additions - directly purchased 126,029 168,354
Amortisation expense (95,193) (73,687)
Closing net book value 350,204 319,368

As at December 31,
Cost 1,532,717 1,406,688
Accumulated amortisation (1,182,513) (1,087,320)
Net book value 350,204 319,368

Rate of amortisation 11.11% to 11.11% to

33.33% 33.33%

Useful life (years) 3 to 9 3 to 9

11.2 The cost of fully amortised intangible assets still in use amounts to Rs. 935.72 million (2021: Rs. 925.30 million).

2022
At Jan 1, Recognised in Recognised in At Dec 31,
12 DEFERRED TAX ASSETS / (LIABILITIES) 2022 P&L OCI 2022
Deferred Tax Asset ------------------- Rupees in '000 -------------------
Deductible temporary differences on:
Provision against non-performing Islamic
financing and related assets 302,873 1,143,386 - 1,446,259
Provision against other assets 3,507 360 - 3,867
Deficit on revaluation of investments (436,911) - 945,409 508,498
Deficit on defined benefit plan 25,940 - 18,538 44,478
(104,591) 1,143,746 963,947 2,003,102
Taxable temporary differences on:
Accelerated tax depreciation and amortisation (201) (1,622) - (1,823)
(104,792) 1,142,124 963,947 2,001,279

2021
At Jan 1, Recognised in Recgonised in At Dec 31,
2021 P&L OCI 2021
------------------- Rupees in '000 -------------------
Deductible temporary differences on:
Provision against non-performing Islamic
financing and related assets 71,741 231,132 - 302,873
Provision against other assets 611 2,896 - 3,507
Deficit on defined benefit plan 19,705 - 6,235 25,940
92,057 234,028 6,235 332,320
Taxable temporary differences on:
Accelerated tax depreciation and amortisation (695) 494 - (201)
Surplus on revaluation of investments (444,416) - 7,505 (436,911)
(445,111) 494 7,505 (437,112)
(353,054) 234,522 13,740 (104,792)

2022 2021
13 OTHER ASSETS Note --- Rupees in '000 ---

Profit / return accrued in local currency - net 9,915,595 4,389,992

Profit / return accrued in foreign currencies - net 197,375 125,935
Advances, deposits and other prepayments 863,106 892,810
Mark to market gain on forward foreign exchange contracts 566,774 111,827
Acceptances 4,436,519 2,478,225
Advance taxation (payments less provisions) - 169,170
Commission receivable 14,278 52,185
Others 251,437 219,869
16,245,084 8,440,013
Less: Provision held against other assets 13.1 (8,993) (8,993)
16,236,091 8,431,020
 2022 2021
--- Rupees in '000 ---
13.1 Provision held against other assets - others

Opening balance 8,993 1,746

Other provisions
Charge for/the
write
year
offs - 8,993
Reversals during the year - (1,746)
Closing balance 8,993 8,993

14 BILLS PAYABLE

In Pakistan 7,196,760 7,440,147

Outside Pakistan 11,134 8,864
7,207,894 7,449,011

15 DUE TO FINANCIAL INSTITUTIONS

Secured
Musharaka from the State Bank of Pakistan
under Islamic Export Refinance Scheme 15.1 15,878,463 15,721,797

Investment from the State Bank of Pakistan

under Islamic Long Term Financing Facility 15.2 4,268,281 3,414,483
under Payment of Wages and Salaries Refinance Scheme 15.3 375,164 2,569,020
under Islamic Financing Facility for Combating COVID 19 15.4 591,857 759,143
under Islamic Finance Facility For Renewable Energy 15.5 466,849 310,003
under Islamic Temporary Economic Refinance Facility 15.6 10,819,396 6,539,900
under other Islamic Refinance Facilities 15.7 474,411 373,950
32,874,421 29,688,296
Other Musharaka acceptance 3,000,000 -
Total Secured 35,874,421 29,688,296
Unsecured
Musharaka acceptance - 3,800,000
Overdrawn nostros accounts 639 57,011
Total unsecured 639 3,857,011
35,875,060 33,545,307

15.1 These Musharaka are on a profit and loss sharing basis having maturity between January 09, 2023 to June 28, 2023 (2021: January 05,
2022 to June 26, 2022) and are secured against demand promissory notes executed in favor of the SBP.

15.2 These are on a profit and loss sharing basis having maturity between February 21, 2024 to November 20, 2031 (2021: February 21, 2024
to November 20, 2031) and are secured against demand promissory notes executed in favor of the SBP.

15.3 These are on a profit and loss sharing basis having maturity between January 03, 2023 to June 29, 2023 (2021: October 01, 2022 to June
29, 2023) and are secured against demand promissory notes executed in favor of the SBP.

15.4 These are on a profit and loss sharing basis having maturity between June 07, 2025 to June 26, 2031 (2021: June 07, 2025 to June 26,
2031) and are secured against demand promissory notes executed in favor of the SBP.

15.5 These are on a profit and loss sharing basis having maturity between February 03, 2026 to November 13, 2031 (2021: December 12,
2022 to November 13, 2031) and are secured against demand promissory notes executed in favor of the SBP.

15.6 These are on a profit and loss sharing basis having maturity between December 14, 2025 to October 27, 2032 (2021: February 06, 2022
to December 19, 2031) and are secured against demand promissory notes executed in favor of the SBP.

15.7 These are on a profit and loss sharing basis having maturity latest by October 10, 2025 to June 30, 2029 (2021: March 21, 2026) are
secured against demand promissory notes executed in favor of the SBP.

2022 2021
--- Rupees in '000 ---
15.8 Particulars of due to financial institutions with respect to currencies

In local currency 35,874,421 33,488,296

In foreign currencies 639 57,011
35,875,060 33,545,307
16 DEPOSITS AND OTHER ACCOUNTS
2022 2021
In local In foreign In local In foreign
Total Total
currency currencies currency currencies
------------------------------------------------------------ Rupees in '000 ------------------------------------------------------------
Customers
Current deposits 68,772,344 17,032,944 85,805,288 68,719,908 16,005,918 84,725,826
Savings deposits 114,270,169 8,752,595 123,022,764 93,132,815 8,446,665 101,579,480
Term deposits 44,015,825 26,456,553 70,472,378 34,972,950 7,560,198 42,533,148
Others 11,840,762 - 11,840,762 4,934,565 - 4,934,565
238,899,100 52,242,092 291,141,192 201,760,238 32,012,781 233,773,019

Financial institutions
Current deposits 208,483 43,930 252,413 373,845 40,620 414,465
Savings deposits 52,293,215 - 52,293,215 22,290,009 - 22,290,009
Term deposits 2,124,391 - 2,124,391 5,096,127 - 5,096,127
54,626,089 43,930 54,670,019 27,759,981 40,620 27,800,601
293,525,189 52,286,022 345,811,211 229,520,219 32,053,401 261,573,620

2022 2021
16.1 Composition of deposits ---- Rupees in '000 ----

Individuals 143,766,555 132,326,205

Government (Federal and Provincial) 18,331,714 21,333,895
Public Sector Entities 2,008,681 1,259,185
Banking Companies 598,356 5,336
Non-Banking Financial Institutions 54,071,663 27,795,265
Private Sector 127,034,242 78,853,734
345,811,211 261,573,620

16.2 This includes deposits eligible to be covered under takaful arrangements amounting to Rs. 85,852 million (2021: Rs. 86,982 million).

Note 2022 2021

17 SUBORDINATED SUKUKS ---- Rupees in '000 ----

Additional Tier I Sukuk 17.1 3,120,000 3,120,000

Tier II Sukuk 17.2 &17.3 4,000,000 4,000,000
7,120,000 7,120,000

17.1 In December 2018, the Bank issued regulatory Shari'a compliant perpetual, unsecured, subordinated privately placed Additional Tier I Sukuk based on
Mudaraba of Rs. 3,120 million as instrument of redeemable capital under section 66 of the Companies Act, 2017. The brief description of sukuk is as
follows:
Credit rating A+ (Single A - Plus) by VIS Credit Rating Company Limited.
Tenor Perpetual
Profit payment frequency Monthly in arrears
Redemption Perpetual
Expected periodic profit amount (Mudaraba profit The Mudaraba Profit is computed under General Pool on the basis of profit sharing ratio and
amount) monthly weightages announced by the Bank under the SBP guidelines of pool management. Last
announced profit rate on the Sukuk is 17.66% per annum.
The Bank may call Additional Tier I Sukuk with prior approval of SBP on or after five years from
Call option
the date of issue.
The Additional Tier I Sukuk, at the option of the SBP, will be fully and permanently converted into
Loss absorbency common shares upon the occurrence of a point of non-viability trigger event as determined by SBP
or for any other reason as may be directed by SBP.
Profit and/or redemption amount can be held back in respect of the Additional Tier I Sukuk, if such
Lock-in-clause payment will result in a shortfall in the Issuer’s minimum capital or capital adequacy ratio
requirement.

17.2 In December 2022, the Bank issued regulatory Shariah compliant unsecured, subordinated privately placed Tier II Sukuk based on Mudaraba of Rs. 4,000
million as instrument of redeemable capital under section 66 of the Companies Act, 2017. The brief description of sukuk is as follows:

Credit rating AA- (Double AA - Minus) by VIS Credit Rating Company Limited.
Tenor 10 years form the issue date
Profit payment frequency Semi-annually in arrears
Redemption On the tenth anniversary from the issue date of sukuk.
The Mudaraba Profit is in accordance with the agreed profit sharing ratios / weightages assigned by
Expected periodic profit amount (Mudaraba profit the bank from time-to-time coinciding with the relevant profit distribution frequency for the relevant
amount) profit distribution period. Last announced profit rate on the sukuk is 17.51% per annum.
The Bank may call Tier II Sukuk with prior approval of SBP on or after five years from the date of
Call option
issue.
The Tier II Sukuk, at the option of the SBP, will be fully and permanently converted into common
Loss absorbency shares upon the occurrence of a point of non-viability trigger event as determined by SBP or for any
other reason as may be directed by SBP.
Profit and/or redemption amount can be held back in respect of the Tier II Sukuk, if such payment
Lock-in-clause will result in a shortfall in the Issuer’s minimum capital or capital adequacy ratio requirement.

17.3 During the year, the Bank exercised Call Option with prior approval of SBP in respect of its regulatory Shariah compliant unsecured, subordinated privately
placed Tier II Sukuk of Rs 4,000 million issued by the Bank in July 2017. The principal and profit component of these sukuk were paid back to investors in
December 2022. Last announced profit rate on the Sukuk was 15.99%. Further, the Bank has issued Tier II sukuk of Rs 4,000 million during the year (Note
17.2).
 2022 2021
Note --- Rupees in '000 ---
18 OTHER LIABILITIES

Profit / return payable in local currency 3,178,501 1,462,977

Profit / return payable in foreign currencies 169,666 55,258
Deferred income murabaha / musawamah / SBP refinance schemes 2,224,289 2,440,527
Accrued expenses 1,060,452 777,835
Advance from financing customers 1,206,145 1,410,787
Mark to market loss on forward foreign exchange contracts 22,728 112,337
Acceptances 4,436,519 2,478,225
Current taxation (provisions less payments) 1,147,215 -
Security deposits against Islamic financing and related assets 35,173 151,374
Retention money 2,144 1,802
Payable to dealers, contractors, etc. 188,750 581,398
Ijarah (lease) liabilities 18.1 3,807,378 2,666,266
Charity payable 18.1 4,175 3,982
Workers welfare fund payable 18.2 711,792 500,010
Duties and taxes payable 154,166 56,083
Payable to defined benefit plan 35.4 22,335 30,432
Payable to Employees Old Age Benefit Institution (EOBI) 158,729 136,201
Sundry Creditors 280,125 281,976
Others 459,198 966,900
19,269,480 14,114,370

18.1 Charity Fund

Opening balance 3,982 396

Additions during the year

Received from customers on account of delayed payment 12,777 5,480
Shariah non-compliant income 2,318 12,462
Profit on charity fund 98 94
15,193 18,036

Payments / utilisation during the year 18.1.1

Health (11,200) (9,750)
Education (3,800) (4,700)
(15,000) (14,450)
4,175 3,982

18.1.1 During the year, charity from the Charity Fund of the Bank was paid to the following organisations:

2022 2021
--- Rupees in '000 ---
Airport Security Force Welfare Foundation 500 -
Aga Khan Hospital and Medical College Foundation 500 -
Family Educational Services Foundation 500 -
Koohi Goth Hospital 500 -
Nigahban Welfare Association 500 -
The Indus Hospital 800 -
Trust Jamiat Talimul Quran 500 -
Baitussalam Welfare Trust 4,800 2,825
Sindh Institute of Urology and Transplantation 3,100 2,825
The Citizen Foundation 1,500 2,500
KPSS Secondary School Saigolabad - Alif Noon Foundation 800 1,000
Afzaal Memorial Thalassemia Foundation (AMTF) 500 900
Layton Rahmatulla Benevolent Trust 500 400
Child Aid Association - 1,000
Namal Education Foundation - 1,200
Pakistan Children's Heart Foundation - 1,000
Saylani Welfare Trust - 800
15,000 14,450

18.1.2 Charity was not paid to any active staff of the Bank or to any individual / organisation in which a director or his spouse had any
interest at any time during the year.
18.2 Workers welfare fund

Supreme Court of Pakistan vide its order dated November 10, 2016 has held that the amendments made in the law
introduced by the Federal Government in respect of levy of Workers Welfare Fund (WWF) were not lawful. The Federal
Board of Revenue (FBR) challenged the said order by way of review petition before Supreme Court. While the petition is
still pending, however, the outcome is expected to be in favor of the Bank.

Further, consequent to the 18th amendment to the Constitution, the Government of Sindh levied its WWF (Sindh WWF)
which was effective from January 01, 2014. The definition of industrial undertakings under the aforesaid Sindh WWF law
covers banks and financial institutions as well. The Bank has challenged applicability of the said law on Banks before the
Sindh High Court.

19 SHARE CAPITAL

19.1 Authorised Capital

2022 2021 2022 2021

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

1,800,000,000 1,800,000,000 Ordinary shares of Rs.10 each 18,000,000 18,000,000

19.2 Issued, subscribed and paid up

2022 2021
---------- Number ----------
Ordinary shares
1,165,228,776 1,165,228,776 Fully paid in cash 11,652,288 11,652,288

19.2.1 The Bank’s shares are held 100 percent by Dubai Islamic Bank PJSC, UAE – the holding company and its nominee
directors.

2022 2021
Note ---- Rupees in '000 ----

20 RESERVES

Statutory reserve 20.1 3,875,828 3,092,713

20.1 Under section 21 of the Banking Companies Ordinance, 1962 an amount of not less than 20% of the profit is to be
transferred to create a reserve fund till such time the reserve fund and the share premium account equal the amount of the
paid up capital. Thereafter, an amount of not less than 10 percent of the profit is required to be transferred to such reserve
fund.

2022 2021
Note ---- Rupees in '000 ----

21 (DEFICIT) / SURPLUS ON REVALUATION OF INVESTMENTS

(Defitcit) / surplus on revaluation of Available-for-sale securities

Surpl Sukuk certificates 8.1 (1,182,553) 1,120,285

us/ Less: Related deferred tax asset / (liability) 508,498 (436,911)
(674,055) 683,374
 2022 2021
Note --- Rupees in '000 ---

22 CONTINGENCIES AND COMMITMENTS

Guarantees 22.1 26,997,386 26,262,065

Commitments 22.2 76,020,890 51,790,251
Other contingent liabilities 22.3 211,480 211,480
103,229,756 78,263,796

22.1 Guarantees

Financial guarantees 14,874 108,546

Performance guarantees 10,565,865 6,209,764
Other guarantees 16,416,647 19,943,755
26,997,386 26,262,065

22.2 Commitments

Documentary credits and short-term

trade-related transactions
- Letters of credit 43,094,462 34,649,476

Commitments in respect of:

- Forward foreign exchange contracts - net 22.2.1 25,433,348 7,329,426
- Islamic financing and related assets 7,096,289 9,602,000

Commitments for acquisition of:

- Fixed assets 162,172 77,838
- Intangible assets 234,619 131,511
76,020,890 51,790,251

22.2.1 Commitments in respect of forward foreign exchange

contracts - net

Purchase 33,437,162 17,847,323

Sale 8,003,814 10,517,897
25,433,348 7,329,426

22.3 Tax contingencies

The income tax authorities have amended assessment orders of the Bank for prior years including the tax year
2022. The disallowances were mainly due to IFRS 16 “Leases” related adjustments, charge/reversals of
provision against financing, provision against investments and Workers Welfare Fund. The Bank has filed
appeals before the various appellate forums against these amendments for prior years up until Tax Year 2021.

For the tax year 2015, tax authorities have issued a notice to amend assessment against the adjustment of
minimum tax paid in prior years amounting to Rs. 211.48 million. The management of the Bank approached
Sindh High Court and subsequently the Honorable Supreme Court of Pakistan against the order of the Sindh
High Court. The Honorable Supreme Court of Pakistan has granted leave to appeal. The appeal is expected to
be fixed soon. Through Finance Act 2021 favorable amendment has been made to section 113(2)(c)
strengthening Bank’s stance on adjustment of minimum tax for the years where no tax was payable. The
management of the Bank is confident that the appeals will be decided in favor of the Bank in respect of the
aforementioned matters.
 2022 2021
--- Rupees in '000 ---
23 PROFIT / RETURN EARNED

Profit On
on Customers
Islamic financing and related assets to customers 34,677,542 17,777,502
Profit On
on AFS
investments
Securities
in available-for-sale securities 10,748,847 4,652,039
On deposits / placements with financial institutions 459,225 325,212
45,885,614 22,754,753

24 PROFIT / RETURN EXPENSED

Profit Deposits
paid on deposits
and other accounts 20,047,864 9,127,903
Subordinated
Subordinated
debt expense
sukuk 1,024,297 607,577
Profit Due
paid to
onfinancial
Due to FI
institutions 4,053,581 689,353
FinanceFinance
chargecost
on Lease
on Ijarah
Liabilities
(lease) liabilities 360,685 310,470
Cost ofCost
foreign
of foreign
currency
currency
swapsswaps 949,288 122,924
26,435,715 10,858,227

25 FEE & COMMISSION INCOME

Consumer
Consumer
finance finance
relatedrelated
fees fees 670,869 631,895
CreditCredit
relatedrelated
fees fees 95,977 126,268
Investment
Investment
banking banking
fees fees 152,494 151,135
BranchBranch
bankingbanking
customer
customer
fees fees 98,529 107,300
Card related
Card related
fees (debit
fees and credit cards) 248,629 208,809
Commission
Commission
on tradeon trade 353,638 375,215
Commission
Commission
on guarantees
on guarantees 206,427 77,279
Commission
Commission
on cash onmanagement
cash management 79,299 55,723
Commission
Commission
on remittances
on remittances
including
including
home home
remittances
remittances 14,156 22,650
Commission
Commission
on bancassurance
on bancassurance 40,145 60,077
RebateRebate
Income income
- FI 136,339 139,071
OthersOthers 31,632 25,589
2,128,134 1,981,011

26 GAIN ON SECURITIES

Realised
- Debt securities - 576,907

27 OTHER (LOSS) / INCOME

IN0604000
(Loss) / gain on sale of fixed assets - net (23,165) 1,354
 2022 2021
Note --- Rupees in '000 ---
28 OPERATING EXPENSES

Total compensation expense 28.1 4,230,005 3,530,280

Property expense
Utilities cost 629,419 346,467
Security 285,281 259,527
Repair & maintenance (including janitorial charges) 201,006 159,717
Takaful charges 876 910
Depreciation
Depreciation
on lease hold items 81,653 91,713
Depreciation
Depreciation
Expenseon on
right-of-use
Right-of-use
assets
assets 917,404 896,452
2,115,639 1,754,786
Information technology expenses
Software
Software
maintenance
maintenance 388,660 317,158
Hardware
Hardware
maintenace
maintenance 164,848 145,787
Depreciation
Depreciation
on hardware 139,635 103,251
Amortisation 95,193 73,687
Networking and connectivity charges 159,637 153,524
Outsourced services cost 40,774 33,522
Takaful charges 1,502 1,407
IT supplies
Others 4,849 2,777
995,098 831,113
Other operating expenses
Directors' fee and allowances 37.1 10,271 11,466
Fees and
Feesallowances
and allowances
to Sharia'h
to Sharia'h
BoardBoard members 37.1 13,958 11,999
Legal and professional charges 56,917 49,127
Outsourced services cost 28.2 169,679 124,885
Travelling
Travelling
and conveyane
and conveyance 46,309 25,942
NIFT clearing charges 45,814 34,933
Depreciation
Depreciation
on other fixed assets 128,478 129,256
Training and development 16,629 13,260
Postage and courier charges 35,216 36,059
Communications 264,523 221,171
Stationary and printing 236,748 156,967
Marketing, advertising and publicity 234,854 161,141
Auditors' remuneration 28.3 7,127 7,127
Brokerage, commission and bank charges 535,591 394,354
Tracker related charges 154,759 162,631
Cash transportation charges 297,961 217,366
Repair and maintenance 119,266 102,406
Subscription fees 52,137 20,449
Takaful charges 44,388 51,552
Deposit premium cost 139,171 122,237
Others-
Others 181,511 115,057
2,791,307 2,169,385
10,132,049 8,285,564
 2022 2021
Note --- Rupees in '000 ---
28.1 Total compensation expense

Managerial remuneration - fixed 1,477,748 1,332,434

Managerial remuneration - variable (including bonus) 300,432 243,328
Salaries
Allowances
and allowances 1,007,436 689,735
Contribution to provident fund 36 136,316 123,666
Contribution to gratuity fund 35.8.1 81,408 77,701
Rent & house maintenance 597,600 539,097
Utilities 149,117 134,620
Medical 64,642 62,131
EOBI - employer contribution 18,773 18,304
Staff takaful expense 82,754 74,511
Outsourced services - third party staff 304,622 232,273
Others-
Staff
Salary
antecedent verification 9,157 2,480
4,230,005 3,530,280

28.2 Total cost for the year included in other operating expenses relating to outsourced activities pertaining to
companies incorporated in Pakistan is Rs. 43.36 million (2021: Rs. 37.50 million). This includes payments
other than outsourced services costs, which are disclosed above.

2022 2021
Note --- Rupees in '000 ---
28.3 Auditors' remuneration

Audit fee 1,271 1,271

Fee for other statutory certifications 534 534
Special certifications and sundry other reporting 4,875 4,875
Out-of-pocket expenses 447 447
7,127 7,127

29 OTHER CHARGES

Penalties imposed by State Bank of Pakistan 13,805 4,301

30 PROVISIONS & WRITE OFFS - NET

Provision against Islamic financing and related assets 9.13 4,629,854 2,090,460
Provision against other assets 13.1 - 7,247
4,629,854 2,097,707
 2022 2021
--- Rupees in '000 ---
31 TAXATION

Current 5,188,667 2,163,430

Prior year
- Current - 36,709
- Deferred (31,404) (44,898)
Deferred (1,110,720) (189,624)
4,046,543 1,965,617

31.1 Relationship between tax charge and accounting profit

Profit before taxation 7,962,117 5,054,927

Effect of:
Tax at the applicable rate of 49% (2021: 39%) 3,901,437 1,971,422
Permanent differences 176,509 2,384
Prior year (31,403) (8,189)
Tax charge for the year 4,046,543 1,965,617

2022 2021
--- Rupees in '000 ---
32 BASIC AND DILUTED EARNINGS PER SHARE

Profit for the year 3,915,574 3,089,310

------- (Number) -------

Weighted average number of ordinary shares 1,165,228,776 1,165,228,776

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

Earning per share - basic and diluted 3.36 2.65

2022 2021
Note --- Rupees in '000 ---
33 CASH AND CASH EQUIVALENTS

Cash and balance with treasury banks 5 45,632,108 25,761,239

Balance with other banks 6 1,146,321 1,363,873
Overdrawn nostro accounts 15 (639) (57,011)
46,777,790 27,068,101
 2022 2021
34 STAFF STRENGTH ------ Number of staff ------

In Pakistan
Permanent 2,436 2,376
On Bank contract 6 5
Others - third party staff 1,026 842
Bank's own staff strength at the end of the year 3,468 3,223

34.1 In addition to the above, 18 (2021: 29) employees of outsourcing services companies were assigned to the Bank
as at the end of the year to perform services other than security and janitorial services.

35 DEFINED BENEFIT PLAN

35.1 General description

As mentioned in note 4.12.1, the Bank operates a funded gratuity scheme for all its permanent employees. The
benefits under the gratuity scheme are payable on retirement at the age of 60 years or earlier cessation of
service, in lump sum. The benefit is equal to one month's last drawn basic salary for each year of eligible service
with the Bank subject to a minimum qualifying period of service of three years.

35.2 Number of employees under the scheme

The number of employees covered under the following defined benefit scheme are:

2022 2021
------------ (Number) ------------

Gratuity fund 2,432 2,372

35.3 Principal actuarial assumptions

The actuarial valuations were carried out at the year end using the following significant assumptions:

2022 2021
---------- Per annum ----------

Discount rate 13.25% 10.50%

Expected rate of return on plan assets 13.25% 10.50%
Expected rate of salary increase 11.25% 8.50%

35.4 Reconciliation of payable to defined benefit plan

2022 2021
--- Rupees in '000 ---

Present value of obligations 612,924 496,826

Fair value of plan assets (590,589) (466,394)
Payable to defined benefit plan 22,335 30,432
 2022 2021
Note --- Rupees in '000 ---
35.5 Movement in defined benefit obligation

Obligation at beginning of the year 496,826 438,797

Current service cost 84,850 79,553
Cost of funds 49,755 39,046
Benefits paid (45,943) (76,626)
Actuarial loss on obligation 27,436 16,056
Obligations at the end of the year 612,924 496,826

35.6 Movement in fair value of plan assets

Fair value at beginning of the year 466,394 419,280

Expected return on plan assets 53,197 40,898
Bank's contribution to the fund made during the year 126,430 77,000
Benefits paid (45,943) (76,626)
Actuarial (loss) / gain on plan assets (9,489) 5,842
Fair value at end of the year 590,589 466,394

35.7 Movement in payable to defined benefit scheme

Opening balance 30,432 19,517

Charge for the year 28.1 81,408 77,701
Re-measurements recognised in OCI during the year 35.8.2 36,925 10,214
Bank's contribution to the fund made during the year (126,430) (77,000)
Closing balance 22,335 30,432

35.8 Charge for defined benefit plan

35.8.1 Cost recognised in profit and loss

Current service cost 84,850 79,553

Net return (3,442) (1,852)
81,408 77,701
35.8.2 Re-measurements recognised in OCI during the year

Loss on obligation - Experience adjustment 27,436 16,056

Actuarial (loss) / gain on plan assets 9,489 (5,842)
Total re-measurements recognised in OCI 36,925 10,214

35.9 Components of plan assets

Cash and cash equivalents 493,783 371,394
Sukuk 96,806 95,000
590,589 466,394

35.9.1 Risks

Through its defined benefit plan, the Bank is exposed to a number of risks, the most significant of which are detailed
below:

Investment risk

The risk arises when the actual performance of the investments is lower than expectation thus creating a shortfall in
the funding objectives.

Longevity risks

The risk arises when the actual lifetime of retirees is longer than expectation. This risk is measured at the plan level
over the entire retiree population.
 Salary increase risk

The risk arises when the actual increase is higher than expectation and impacts the liability accordingly.

Withdrawal risk

The risk of actual withdrawals varying with the actuarial assumptions can impose a risk to the benefit obligation.
The movement of the liability can go either way.

35.10 Sensitivity analysis

The sensitivity of the defined benefit obligation to changes in the weighted principal assumptions is:

2022
Rupees in '000
1% increase in discount rate 536,949
1% decrease in discount rate 624,581
1 % increase in expected rate of salary increase 625,028
1 % decrease in expected rate of salary increase 535,911
1 year increase in Life expectancy / Withdrawal rate 608,912
1 year decrease in Life expectancy / Withdrawal rate 609,748

35.11 Estimated expenses to be charged to profit and loss account

Based on the actuarial advice, the management estimates that charge and expected contribution in respect of defined
benefit plan for the year ending December 31, 2023 would be Rs. 92.48 million and Rs. 114.81 million respectively.

35.12 Maturity profile

The weighted average duration of the defined benefit obligation is 8.46 years.

35.13 Funding Policy

The activities of the gratuity scheme are governed by Dubai Islamic Bank Pakistan Limited Gratuity Fund
established in 2006 under the provisions of a trust deed. Plan assets held in trust are governed by the Trust Deed as
is the nature of the relationship between the Bank and the trustees and their composition. Responsibility for
governance of the plan including the investment decisions lies with the Trustees. Funding levels are monitored on an
annual basis and are based on actuarial recommendations.

35.14 Following are the significant risks associated with the gratuity fund scheme:

Asset volatility The plan assets includes remunerative bank account and sukuks. The Fund believes
that due to long-term nature of the plan liabilities and the strength of the Bank's
support, the current investment strategy manages this risk adequately.

Inflation risk The majority of the plans' benefit obligations are linked to inflation, and higher
inflation will lead to higher liabilities. However, plan assets are based on variable
rate and are re-priced at regular intervals to off-set inflationary impacts.

Life expectancy / Withdrawal The majority of the plans' obligations are to provide benefits on severance with the
rate Bank on achieving retirement. Any change in life expectancy / withdrawal rate
would impact plan liabilities.
36 DEFINED CONTRIBUTION PLAN (PROVIDENT FUND)

The Bank operates a contributory provident fund scheme for permanent employees. The number of employees eligible for the scheme at the end of the
reporting year is 2,090 (2021: 2,007). The employer and employee both contribute 10% of the basic salaries to the funded scheme every month. Equal
monthly contribution by employer and employees during the year amounted to Rs. 136.32 million (2021: Rs. 123.67 million) each.

37 COMPENSATION OF DIRECTORS AND KEY MANAGEMENT PERSONNEL

37.1 Total Compensation Expense

2022
Directors Other
Members Key
Executives President / Material Risk
Non- Shariah Management
Chairman (other than CEO Takers /
Executives Board Personnel
CEO) Controllers
--------------------------------------------------- Rupees in '000 ---------------------------------------------------

Fees and allowances - - 10,271 13,958 - - -

Managerial
remuneration - fixed - - - 955 34,044 119,384 149,827
Managerial remuneration
- variable (including bonus) - - - 185 30,081 43,906 40,736
Contribution to provident fund - - - 95 3,404 11,938 14,983
Contribution to gratuity fund - - - 80 2,837 9,949 12,486
Rent & house maintenance - - - 382 13,619 47,757 60,229
Utilities - - - 95 3,401 11,926 14,967
Medical - - - 30 - 517 1,662
Conveyance - - - 348 2,400 19,723 31,473
Others - - - 551 2,837 22,061 46,910
- - 10,271 16,679 92,623 287,161 373,273

------------------------------------------------------------ (Number) ------------------------------------------------------------

Number of persons 1 - 7 3 1 13 46

2021
Directors
Key Other Material
Executives Members President /
Non- Management Risk Takers /
Chairman (other than Shariah Board CEO
Executives Personnel Controllers
CEO)
------------------------------------------------- Rupees in '000 -----------------------------------------------

Fees and allowances - - 11,466 12,578 - - -

Managerial
remuneration - fixed - - - 920 30,126 98,932 126,422
Managerial remuneration
- variable (including bonus) - - - 171 26,200 31,380 34,362
Contribution to provident fund - - - 92 3,013 9,893 12,643
Contribution to gratuity fund - - - 77 2,511 8,244 10,535
Rent & house maintenance - - - 368 18,778 39,576 50,572
Utilities - - - 92 3,009 9,883 12,629
Medical - - - 30 - 400 1,630
Conveyance - - - 348 1,550 16,239 29,376
Others - - - 391 2,551 14,225 31,453
- - 11,466 15,067 87,738 228,772 309,622

------------------------------------------------------------ (Number) ------------------------------------------------------------

Number of persons 1 - 7 3 1 12 49

The Chief Executive and certain Executives are provided with club membership and mobile telephone facilities and the Chief Executive is also provided
with bank maintained car in accordance with the Bank’s service rules.
37.2 Fees and allowances paid to Directors for participation in Board and Committee meetings

2022
Meeting Fees Paid
For Board Committees
Sr. Nominations
Name of Director For Board Risk
No. Audit and Total Amount
Meetings Monitoring IT Committee
Committee Remunerations Paid
Committee
Committee
------------------------------------------------- Rupees in '000 -----------------------------------------------

1 Shabbir Ahmed Shaikh 2,221 427 399 399 - 3,446

2 Faaria Rehman Salahuddin 2,221 - 399 - 540 3,160
3 Shabnam Faqir Mohammad 2,221 337 - 567 540 3,665
6,663 764 798 966 1,080 10,271

2021
Meeting Fees Paid
For Board Committees
Sr. Nominations
Name of Director For Board
No. Audit Risk Monitoring and Total Amount
Meetings IT Committee
Committee Committee Remunerations Paid
Committee
------------------------------------------------- Rupees in '000 -----------------------------------------------

1 Muhammad Maqbool Alam * 2,244 673 - - 561 3,478

2 Naved A. Khan * 2,244 - 1,010 - 561 3,815
3 Shabnam Faqir Mohammad 2,244 561 - 1,368 - 4,173
6,732 1,234 1,010 1,368 1,122 11,466
* Retired on October 30, 2021.

37.3 Remuneration paid to Shariah Board Members

2022 2021
Resident Non-Resident Resident Non-Resident
Chairman Chairman
Members Member(s) Members Member(s)
------------------------------------------------- Rupees in '000 -----------------------------------------------
Fees and allowances 2,708 - 11,250 1,976 - 10,023
Managerial remuneration - fixed - 955 - - 920 -
Managerial remuneration - variable
(including bonus) - 185 - - 171 -
Contribution to provident fund - 95 - - 92 -
Contribution to gratuity fund - 80 - - 77 -
Rent & house maintenance - 382 - - 368 -
Utilities - 95 - - 92 -
Medical - 30 - - 30 -
Conveyance - 348 - - 348 -
Others - 551 - - 102 -
2,708 2,721 11,250 1,976 2,200 10,023

------------------------------------------------------------ (Number) ------------------------------------------------------------

Number of persons 1 1 1 1 1 1
38 SEGMENT DETAILS WITH RESPECT TO BUSINESS ACTIVITIES

2022
SME &
Corporate Consumer Inter-segment
Commercial Treasury Others Total
Banking Banking Elimination
Banking
------------------------------------------------------ Rupees in '000 ------------------------------------------------------

Profit and Loss

Net profit earned 12,025,896 2,484,081 (4,075,363) 8,934,052 81,233 - 19,449,899

Inter segment revenue - net (9,947,114) 1,334,521 16,893,815 (8,223,154) (58,068) - -
Other income / (loss) 1,125,118 910,138 1,546,522 (58,905) (23,165) - 3,499,708
Total income 3,203,900 4,728,740 14,364,974 651,993 - - 22,949,607

Segment direct expenses (711,369) (1,772,364) (6,282,863) (155,139) - - (8,921,735)

Inter segment expense
allocation (146,135) (295,384) (943,259) (51,123) - - (1,435,901)
Total expenses (857,504) (2,067,748) (7,226,122) (206,262) - - (10,357,636)

Provisions (1,901,406) (2,634,741) (93,707) - - - (4,629,854)

Profit before tax 444,990 26,251 7,045,145 445,731 - - 7,962,117

Statement of Financial Position

Cash and bank balances - 884,448 4,711,307 1,146,321 40,036,353 - 46,778,429

Due from financial institutions - - - 23,500,000 - - 23,500,000
Investments - - - 103,361,135 - - 103,361,135
Net inter segment lending - 30,737,695 144,643,559 - - (175,381,254) -
Islamic financings and related
assets - performing 141,724,106 50,052,050 51,890,228 - 2,622,073 - 246,288,457
- non-performing 144,163 888,008 447,325 - - - 1,479,496
Others 11,838,368 1,939,323 5,588,431 4,252,285 364,538 - 23,982,945
Total Assets 153,706,637 84,501,524 207,280,850 132,259,741 43,022,964 (175,381,254) 445,390,462

Due to financial institutions 21,262,593 11,611,828 - 3,000,639 - - 35,875,060

Deposits & other accounts 83,358,092 66,111,481 196,241,691 99,947 - - 345,811,211
Net inter segment borrowing 44,504,794 - - 129,231,862 1,644,598 (175,381,254) -
Subordinated sukuk - - - - 7,120,000 - 7,120,000
Others 4,581,158 6,778,215 11,039,159 601,348 3,477,494 - 26,477,374
Total liabilities 153,706,637 84,501,524 207,280,850 132,933,796 12,242,092 (175,381,254) 415,283,645

Equity - - - (674,055) 30,780,872 - 30,106,817

Total Equity and liabilities 153,706,637 84,501,524 207,280,850 132,259,741 43,022,964 (175,381,254) 445,390,462

Contingencies and
Commitments 39,378,385 32,561,815 5,601,115 25,438,421 250,020 - 103,229,756
 2021
SME &
Corporate Consumer Inter-segment
Commercial Treasury Other Total
Banking Banking Elimination
Banking
------------------------------------------------------ Rupees in '000 ------------------------------------------------------
Profit and Loss

Net profit earned 6,463,292 1,651,063 (506,362) 4,812,969 (524,436) - 11,896,526

Inter segment revenue - net (4,901,306) 1,053,093 7,838,969 (4,513,838) 523,082 - -
Other income 677,288 644,115 1,432,603 901,558 1,354 - 3,656,918
Total income 2,239,274 3,348,271 8,765,210 1,200,689 - - 15,553,444

Segment direct expenses (517,840) (1,475,090) (5,300,325) (141,828) - - (7,435,083)

Inter segment expense
allocation (103,075) (115,636) (699,231) (47,785) - - (965,727)
Total expenses (620,915) (1,590,726) (5,999,556) (189,613) - - (8,400,810)

Provisions (1,563,526) (396,737) (137,444) - - - (2,097,707)

Profit before tax 54,833 1,360,808 2,628,210 1,011,076 - - 5,054,927

Statement of Financial Position

Cash and bank balances - 836,779 4,087,538 1,363,873 20,836,922 - 27,125,112

Due from financial institutions - - - 1,031,302 - - 1,031,302
Investments - - - 84,861,748 - - 84,861,748
Net inter segment lending - 7,744,868 123,871,120 - 12,947,607 (144,563,595) -
Islamic financings and related
assets - performing 116,944,943 53,658,495 49,804,159 - 2,454,777 - 222,862,374
- non-performing 1,397,132 698,546 406,841 - - - 2,502,519
Others 3,757,099 2,896,443 4,940,040 1,204,906 292,616 - 13,091,104
Total Assets 122,099,174 65,835,131 183,109,698 88,461,829 36,531,922 (144,563,595) 351,474,159

Due to financial institutions 19,987,647 9,700,650 - 3,857,010 - - 33,545,307

Deposits & other accounts 39,404,696 51,389,245 170,692,153 87,526 - - 261,573,620
Net inter segment borrowing 60,746,267 - - 83,817,328 - (144,563,595) -
Subordinated sukuk - - - - 7,120,000 - 7,120,000
Others 1,960,564 4,745,236 12,417,545 16,591 2,528,237 - 21,668,173
Total liabilities 122,099,174 65,835,131 183,109,698 87,778,455 9,648,237 (144,563,595) 323,907,100

Equity - - - 683,374 26,883,685 - 27,567,059

Total Equity and liabilities 122,099,174 65,835,131 183,109,698 88,461,829 36,531,922 (144,563,595) 351,474,159

Contingencies and
Commitments 38,273,909 23,104,030 9,319,275 7,329,426 237,156 - 78,263,796

39 TRUST ACTIVITIES

The Bank commonly acts as trustee and in other fiduciary capacities that result in the holding or placing of assets on behalf of individuals, trusts,
retirement benefit plans and other institutions including on behalf of certain related parties. These are not assets of the Bank and, therefore, are not
included in the Statement of Financial Position. The following is the list of assets held under trust:

--- Rupees in '000 ---

Number of securities
Category Security type Face Value
2022 2021 2022 2021

Financial institution - related party Shares 3,347,600 3,347,600 33,476 33,476

Asset Management Company Ijara Sukuk 345,000 4,450,000 34,500 445,000
Funds Ijara Sukuk 351,000 - 35,100 -
Funds - related party Ijara Sukuk 4,000,000 4,000,000 400,000 400,000
8,043,600 11,797,600 503,076 878,476
40 FAIR VALUE OF FINANCIAL INSTRUMENTS
The table below analyses financial instruments measured at the end of the reporting period by the level in the fair value hierarchy into which the fair value measurement is categorised:
2022
Carrying Value Fair Value
Other Other
Held to Available for Financing and
On-Balance sheet Financial Instruments financial financial Total Level 1 Level 2 Level 3 Total
Maturity Sale receivables
assets liabilities
------------------------------------------------------------------------------- Rupees in '000 -------------------------------------------------------------------------------
Financial assets - measured at fair value
Investments
Federal Government securities - 43,181,500 - - - 43,181,500 - 43,181,500 - 43,181,500
Non-Government debt securities - 39,831,813 - - - 39,831,813 38,259,561 1,572,252 - 39,831,813
Foreign securities - 16,109,979 - - - 16,109,979 16,109,979 - - 16,109,979

Other assets
Unrealized gain on foreign exchange contracts - - - 566,774 - 566,774 - 566,774 - 566,774

Financial assets - not measured at fair value

Cash and balances with treasury banks - - - 45,632,108 - 45,632,108
Balances with other banks - - - 1,146,321 - 1,146,321
Due from financial institution - - - 23,500,000 - 23,500,000
Investments - 4,237,843 - - - 4,237,843
Islamic financings and related assets - net - - 247,767,953 - - 247,767,953
Other asset - - - 14,838,527 - 14,838,527

- 103,361,135 247,767,953 85,683,730 - 436,812,818

Financial liabilities - measured at fair value

Other liabilities
Unrealized loss on foreign exchange contracts - - - - 22,728 22,728 - 22,728 - 22,728

Financial liabilities - not measured at fair value

Bills payable - - - - 7,207,894 7,207,894
Due to financial institutions - - - - 35,875,060 35,875,060
Deposits and other accounts - - - - 345,811,211 345,811,211
Subordinated sukuk 7,120,000 - - - - 7,120,000
Other liabilities - - - - 14,944,947 14,944,947

7,120,000 - - - 403,861,840 410,981,840

Off-balance sheet financial
instruments - measured at fair value
Forward foreign exchange contracts - net - - - 25,977,394 - 25,977,394 - 25,977,394 - 25,977,394

2021
Carrying Value Fair Value

Held to Available for Financing and Other financial Other financial

On-Balance sheet Financial Instruments Total Level 1 Level 2 Level 3 Total
Maturity Sale receivables assets liabilities
------------------------------------------------------------------------------- Rupees in '000 -------------------------------------------------------------------------------
Financial assets - measured at fair value
Investments
Federal Government securities - 23,260,480 - - - 23,260,480 - 23,260,480 - 23,260,480
Non-Government debt securities - 41,263,593 - - - 41,263,593 38,905,940 2,357,653 - 41,263,593
Foreign securities - 16,716,282 - - - 16,716,282 16,716,282 - - 16,716,282

Other assets
Unrealized gain on foreign exchange contracts - - - 111,827 - 111,827 - 111,827 - 111,827

Financial assets - not measured at fair value

Cash and balances with treasury banks - - - 25,761,239 - 25,761,239
Balances with other banks - - - 1,363,873 - 1,363,873
Due from financial institution - - - 1,031,302 - 1,031,302
Investments - 3,621,393 - - - 3,621,393
Islamic financings and related assets - net - - 225,364,893 - - 225,364,893
Other asset - - - 7,350,181 - 7,350,181

- 84,861,748 225,364,893 35,618,422 - 345,845,063

Financial liabilities - measured at fair value

Other liabilities
Unrealized loss on foreign exchange contracts - - - - 112,337 112,337 - 112,337 - 112,337

Financial liabilities - not measured at fair value

Bills payable - - - - 7,449,011 7,449,011
Due to financial institutions - - - - 33,545,307 33,545,307
Deposits and other accounts - - - - 261,573,620 261,573,620
Subordinated sukuk 7,120,000 - - - - 7,120,000
Other liabilities - - - - 10,865,193 10,865,193

7,120,000 - - - 313,545,468 320,665,468

Off-balance sheet financial

instruments - measured at fair value
Forward foreign exchange contracts - net - - - 7,328,916 - 7,328,916 - 7,328,916 - 7,328,916

The Bank measures fair values using the following fair value hierarchy that reflects the significance of the inputs used in making the measurements:

Level 1: Fair value measurements using quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: Fair value measurements using inputs other than quoted prices included within Level 1 that are observable for the assets or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3: Fair value measurements using input for the asset or liability that are not based on observable market data (i.e. unobservable inputs).
41 RELATED PARTY TRANSACTIONS

The Bank has related party relationship with Dubai Islamic Bank P.J.S.C, U.A.E, the holding company, directors, related group companies, associated companies, key management personnel and Staff Retirement
Funds.

A number of banking transactions are entered into with related parties in the normal course of business. These include financing and deposit transactions. These transactions are executed substantially on the same
terms including profit rates and collateral, as those prevailing at the time for comparable transactions with unrelated parties and do not involve more than a normal risk. Contributions to staff retirement benefit plan
are made in accordance with the terms of the contribution plan. Remuneration and other benefits to the executives are determined in accordance with the terms of their appointment.

Usual transactions with related parties include deposits, financing, returns and provision of other banking services. Transactions with executives are undertaken at terms in accordance with employment agreements
and service rules.

The details of transactions with related parties and balances with them are given below:

2022 2021

Key manage-
Associated Holding Associated Holding Key manage-
Directors ment Others** Total Directors Others** Total
companies Company companies Company ment personnel
personnel

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

Balances with other banks

As at January 1, - 128,774 - - - 128,774 - 51,819 - - - 51,819

Deposited during the year - 53,162,099 - - - 53,162,099 - 41,757,775 - - - 41,757,775
Withdrawals during the year - (53,162,232) - - - (53,162,232) - (41,680,820) - - - (41,680,820)
Closing balance - 128,641 - - - 128,641 - 128,774 - - - 128,774

Islamic financing and related assets

As at January 1, - - - 169,974 - 169,974 - - - 144,043 - 144,043

Disbursed during the year - - - 67,120 - 67,120 - - - 83,338 - 83,338
Repaid during the year - - - (51,057) - (51,057) - - - (76,059) - (76,059)
Adjustments * - - - 19,059 - 19,059 - - - 18,652 - 18,652
Closing balance - - - 205,096 - 205,096 - - - 169,974 - 169,974

Deposits and other accounts

As at January 1, - 87,254 6,705 110,850 1,056,088 1,260,897 - 142,168 12,155 97,826 1,434,819 1,686,968
Received during the year - 10,764,588 4,945 934,867 652,181 12,356,581 - 15,951,267 24,408 804,874 9,262,362 26,042,911
Withdrawals during the year - (10,777,911) (9,687) (906,293) (301,528) (11,995,419) - (16,006,181) (26,056) (795,644) (9,641,093) (26,468,974)
Adjustments * - - - (38,099) - (38,099) - - (3,802) 3,794 - (8)
Closing balance - 73,931 1,963 101,325 1,406,741 1,583,960 - 87,254 6,705 110,850 1,056,088 1,260,897

Other Liability

As at January 1, - - - 21,077 - 21,077 - - - 12,374 - 12,374

Withheld during the year - - - 16,256 - 16,256 - - - 12,070 - 12,070
Paid during the year - - - (8,307) - (8,307) - - - (3,367) - (3,367)
Closing balance - - - 29,026 - 29,026 - - - 21,077 - 21,077

2022 2021

Key manage-
Associated Holding Associated Holding Key manage-
Directors ment Others** Total Directors Others** Total
companies Company companies Company ment personnel
personnel

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

Transactions during the year

Profit earned on financings - - - 8,343 - 8,343 - - - 6,771 - 6,771

Profit expensed on deposits - - 3 12,963 154,863 167,829 - - 201 4,456 93,122 97,779
Profit expensed on other liability - - - 3,241 - 3,241 - - - 1,270 - 1,270
Fees and allowances
EX0253000 - - 10,271 11,250 - 21,521 - - 11,466 10,023 - 21,489
Remuneration to key management
personnel (including bonus) - - - 365,452 - 365,452 - - - 310,382 - 310,382
Contribution made to gratuity fund - - - - 81,408 81,408 - - - - 77,000 77,000
Contribution made to provident fund - - - - 136,316 136,316 - - - - 123,666 123,666

Contingencies and commitments

Foreign currency purchase contracts - 6,686,110 - - - 6,686,110 - 6,058,663 - - - 6,058,663

Foreign currency sale contracts - 6,686,110 - - - 6,686,110 - 6,058,663 - - - 6,058,663
Other guarantees - 2,807 - - - 2,807 - - 399,128 - - 399,128

* Primarily relates to those directors, associates and key management personnel who are no longer related parties or have become related parties of the Bank as at December 31, 2022.

* * Represents Dubai Islamic Bank Pakistan Limited's Provident & Gratuity Funds.
 2022 2021
--- Rupees in '000 ---
42 CAPITAL ADEQUACY, LEVERAGE RATIO &
LIQUIDITY REQUIREMENTS

Minimum Capital Requirement (MCR):

Paid-up capital 11,652,288 11,652,288

Capital Adequacy Ratio (CAR):

Eligible Common Equity Tier I (CET I) Capital 29,700,887 26,514,582
Eligible Additional Tier I (ADT I) Capital 3,120,000 3,120,000
Total Eligible Tier I Capital 32,820,887 29,634,582
Eligible Tier II Capital 6,746,267 7,330,705
Total Eligible Capital (Tier I + Tier II) 39,567,154 36,965,287

Risk Weighted Assets (RWAs):

Credit Risk 219,701,355 211,786,481
Market Risk 1,386,293 210,919
Operational Risk 32,576,501 26,305,661
Total 253,664,149 238,303,061

Common Equity Tier I Capital Adequacy ratio 11.71% 11.13%

Tier I Capital Adequacy Ratio 12.94% 12.44%
Total Capital Adequacy Ratio 15.60% 15.51%

42.1 Capital management

Capital Management aims to safeguard the Bank's ability to continue as a going concern so that it could continue to provide adequate
returns to shareholders by pricing products and services commensurately with the level of risk. For this the Bank ensures strong capital
position and efficient use of capital as determined by the underlying business strategy i.e. maximizing growth on continuing basis. The
Bank maintains a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the
business. The impact of the level of capital on shareholders’ return is also recognised and the Bank recognises the need to maintain a
balance between the higher returns that might be possible with greater gearing and the advantages and security afforded by a sound
capital position.

The State Bank of Pakistan (SBP) has prescribed guidelines with respect to disclosure of capital adequacy related information in the
financial statements of banks. These guidelines are based on the requirements of Basel III which were introduced earlier by the SBP in
August 2013 for implementation by banks in Pakistan. The disclosures below have been prepared on the basis of the SBP's guidelines.

42.2 Goals of managing capital

The goals of managing capital of the Bank are as follows:

- To be an appropriately capitalised institution, considering the requirements set by the regulators of the banking markets where the
Bank operates;

- Maintain strong ratings and to protect the Bank against unexpected events; and

- Ensure availability of adequate capital at a reasonable cost so as to enable the Bank to operate adequately and provide reasonable
value addition for the shareholders and other stakeholders.

42.3 Statutory minimum Capital Adequacy Ratio requirement:

In implementing current capital requirements the State Bank of Pakistan requires banks to maintain minimum Capital Adequacy Ratio
(CAR) of 11.50% as of December 31, 2022 whereas CAR stood at 15.60% at the year ended December 31, 2022.

42.4 Capital Structure

Under Basel III framework, the Bank's regulatory capital has been analysed into two tiers as follows:

- Tier I capital (going concern capital) which is sub divided into:

a) Common Equity Tier I (CET I), which includes fully paid up capital, reserve for bonus issue, general reserves and un-appropriated
profits (net of losses), etc. after regulatory deductions for investment in own shares, and book value of intangibles.
 Common Equity Tier I (CET I), which includes fully paid up capital, reserve for bonus issue, general reserves and un-appropriated
profits (net of losses), etc. after regulatory deductions for investment in own shares, and book value of intangibles.

b) Additional Tier I capital (AT I), which includes perpetual, unsecured, sub-ordinated, non-cumulative and contingent convertible
Sukuk instrument issued by the Bank.

- Tier II capital, which includes sub-ordinated sukuk, general provisions for loan losses (upto a maximum of 1.25% of credit risk
weighted assets), reserves on revaluation of available for sale investments after deduction of indirect holding of own capital.

Banking operations are categorised in either the trading book or the banking book and risk weighted assets are determined according to
the specified requirements that seek to reflect the varying levels of risk attached to assets and off balance sheet exposures.

2022 2021
---- Rupees in '000 ----
Leverage Ratio (LR):
Eligible Tier I Capital 32,820,887 29,634,582
Total Exposures 527,359,837 425,221,999
Leverage Ratio 6.22% 6.97%

Liquidity Coverage Ratio (LCR):

Total High Quality Liquid Assets 93,343,235 78,831,848
Total Net Cash Outflow 74,425,165 48,527,995
Liquidity Coverage Ratio 125.42% 162.45%

Net Stable Funding Ratio (NSFR):

Total Available Stable Funding 286,050,477 234,218,377
Total Required Stable Funding 217,892,083 189,869,716
Net Stable Funding Ratio 131.28% 123.36%

42.5 The full disclosures on the capital adequacy, leverage ratio & liquidity requirements as per SBP instructions issued from time to time is
available at https://www.dibpak.com/index.php/financials.

43 RISK MANAGEMENT

The wide variety of the Bank’s business activities require the Bank to identify, assess, measure, aggregate and manage risks effectively
which are constantly evolving as the business activities expand in response to the Bank's strategy and growth. The Bank manages the
risk through a framework of risk management encompassing policies and procedures, organisational structures, risk measurement and
monitoring processes and techniques that are closely aligned with business activities of the Bank.

In the currently competitive banking market the Bank’s rate of return is greatly influenced by its risk management capabilities as
“Banking is about managing risk and return”. Success in the banking business is not to eliminate or avoid risk altogether but to
proactively assess and manage risks for the organization’s strategic advantage.

Bank is regularly monitoring various sectors which have been or are most likely to get affected. The Bank believes that its current
policies for managing credit and liquidity risk are adequate in response to the current situation. Further, the CAR buffer is sufficient to
absorb any unexpected shocks.

The bank has invoked various actions to ensure safety of staff and to provide uninterrupted service to customers. The remote work
capabilities were enabled for staff and related risk and control measures were assessed to make sure they are fully protected using
virtual private network ("VPN") connections. The Bank has been encouraging customers to use Alternate Delivery Channels (ADCs) to
reduce contact with currency notes and other financial instruments. The Bank has also ensured 24/7 availability of its ADCs for
uninterrupted services and Call Center staff for instant customer support.

Risk Framework

The Bank’s Risk management framework is based on three pillars; (a) Risk Principles and Strategies, (b) Organizational Structures and
Procedures and (c) Prudent Risk Measurement and Monitoring Processes which are closely aligned with the activities of the Bank so as
to give maximum value to the shareholders while ensuring that risks are kept within an acceptable level / risk appetite.

The Board determines the overall risk appetite and philosophy for the Bank. The overall risk is monitored by the Board Risk Monitoring
Committee (BRMC). The terms of reference of BRMC have been approved by the Board. Various Management Committees such as
Risk Management Committee (RMC), Management Credit Committee (MCC), Asset and Liability Committee (ALCO) and Control
and Compliance Committee to support these goals.
 The Chief Executive Officer (CEO) and Chief Risk Officer (CRO), in close coordination with all businesses / support functions, ensure
that the Risk Management Framework approved by the Board is implemented in true spirit and risk limits are communicated and
adhered for quantifiable risks by those who accept risks on behalf of the organization. Further, they also ensure that the non-
quantifiable risks are communicated as guidelines and adhered to in management business decisions.

Risk Appetite

Risk management across the Bank is based on the risk appetite and philosophy set by the Board and the associated risk committees. The
Board establishes the parameters for risk appetite for the Bank through:

- Setting strategic direction;

- Contributing to, and ultimately approving plans for each division; and
- Regularly reviewing and monitoring the Bank’s performance in relation to risk through related reports.

It is to be ensured that the risk remains within the acceptable level and sufficient capital is available as a buffer to absorb all the risks. It
forms the basis of strategies and policies for managing risks and establishing adequate systems and controls to ensure that overall risk
remain within acceptable level.

Risk Organisation

The nature of the Bank’s businesses requires it to identify, measure and manage risks effectively. The Bank manages these risks
through a framework of risk vision, mission, strategy, policies, principles, organizational structures, infrastructures and risk
measurement and monitoring processes that are closely aligned with the activities of the Bank. The Bank Risk Management function is
independent of the business areas.

In line with best practices, the Bank exercises adequate oversight through the Risk Management Committee and the Bank’s Risk
Management Group and has developed an elaborate risk identification measurement and management framework.

Along with the above, business heads are also specifically responsible for the management of risk within their respective businesses. As
such, they are responsible for ensuring that they are in compliance with appropriate risk management frameworks in line with the
standards set by the Bank.

Business heads are supported by the Risk Management Group and the Finance Department. An important element that underpins the
Bank’s approach to the management of all risk is independence, where the risk monitoring function is independent of the risk taking
function.

The Bank also has credit risk, market risk, liquidity risk, operational risk, and investment policies in place.

43.1 Credit Risk

Credit risk arises from the potential that an obligor is either unwilling to perform on an obligation or its ability to perform such
obligation is impaired resulting in economic loss to the Bank. The credit risk arises mainly from both direct financing activities as well
as contingent liabilities. The objective of credit risk management framework / policies for the Bank is to achieve sustainable and
superior risk versus reward performance whilst maintaining credit risk exposure in line with the approved risk appetite.

The Bank has adopted Standardised Approach for calculation of capital charge against credit risk. Therefore, risk weights for the credit
risk related assets (on-balance sheet and off-balance sheet - market and non-market related exposures) are assigned taking into
consideration external rating(s) of counterparty(s) for the purpose of calculating Risk Weighted Assets.

The Bank has its own credit rating system (Moody’s) in place which takes into account both quantitative and qualitative aspects. In
addition, pro-active credit risk management is undertaken through risk concentration, counterparty limits, counterparty group limits and
industry concentration limits, defining minimum risk acceptance criteria for each industry. Periodic review process and risk asset
review coupled with policies on internal watch listing are capable of identifying problem financings at an early stage. In addition a full-
fledged Special Assets Management (SAM) department has also been set up for dealing with problem accounts.
43.1.1 Due from financial institutions

Credit risk by public / private sector

Gross Non-performing Provision held
2022 2021 2022 2021 2022 2021
------------------------------------------- Rupees in '000 -------------------------------------------

Public / Government - 31,302 - - - -

Private 23,500,000 1,000,000 - - - -
23,500,000 1,031,302 - - - -

43.1.2 Investment

Credit risk by industry sector

Gross Non-performing Provision held
2022 2021 2022 2021 2022 2021
------------------------------------------- Rupees in '000 -------------------------------------------

Chemical and Pharmaceuticals - 47,872 - - - -

Construction 5,689,049 4,825,385 - - - -
Financial 9,194,529 4,643,647 - - - -
Government 43,181,500 24,119,373 - - - -
Iron / steel - 520,202 - - - -
Other Sovereign 5,064,245 4,678,979 - - - -
Power (electricity), Gas, Water, Sanitary 40,231,812 43,458,020 - - - -
Real Estate - 2,568,270 - - - -
Textile 89,316 89,316 89,316 89,316 89,316 89,316
Transport, Storage and Communication - - - - - -
103,450,451 84,951,064 89,316 89,316 89,316 89,316

Credit risk by public / private sector Gross Non-performing Provision held

2022 2021 2022 2021 2022 2021
------------------------------------------- Rupees in '000 -------------------------------------------

Public / Government 82,607,496 66,983,443 - - - -

Private 20,842,955 17,967,621 89,316 89,316 89,316 89,316
103,450,451 84,951,064 89,316 89,316 89,316 89,316

43.1.3 Islamic Financing and related assets

Credit risk by industry sector Gross Non-performing Provision held - Specific

2022 2021 2022 2021 2022 2021
------------------------------------------- Rupees in '000 -------------------------------------------

Agriculture, Forestry, Hunting and Fishing 1,995,592 2,725,983 492,983 - - -

Automobile and transportation equipment 4,926,070 2,823,816 - - - -
Cement 3,703,990 3,626,556 - - - -
Chemical and Pharmaceuticals 8,217,835 7,447,662 523,328 563,944 523,328 563,944
Construction 5,562,419 5,076,088 22,643 20,954 22,643 20,954
Electronics and electrical appliances 4,479,307 6,554,681 - - - -
Food and Beverages 34,383,477 31,510,899 1,956,222 1,967,249 1,921,113 530,529
Footwear and Leather garments 1,502,708 1,373,383 - - 409,683 -
Individuals 50,923,975 47,817,879 985,166 906,799 574,983 553,980
Iron / Steel 13,851,043 15,130,894 2,937,899 378,583 2,577,904 37,370
Mining and Quarrying 416,667 1,506,345 - - - -
Paper, Board and Packaging 715,439 648,386 54,304 - - -
Power (electricity), Gas, Water, Sanitary 36,930,717 25,002,780 - - - -
Real Estate 1,657,896 978,282 - - - -
Rubber and plastic 8,952,533 9,811,255 192,762 192,762 129,557 93,771
Services 8,918,783 10,988,768 214,431 222,154 49,043 20,247
Ship Breaking and Waste / Scrape - 550,898 - - - -
Textile 37,605,622 29,011,420 719,013 441,561 448,142 422,963
Transport, Storage and Communication 10,467,148 10,393,403 433,055 465,114 395,917 420,014
Wholesale and Retail Trade 23,483,026 18,437,851 1,283,660 1,378,337 1,283,657 1,371,166
Others 588,690 895,928 - - - -
259,282,937 232,313,157 9,815,466 6,537,457 8,335,970 4,034,938

Credit risk by public / private sector Gross Non-performing Provision held - Specific
2022 2021 2022 2021 2022 2021

Public / Government 10,155,078 10,581,140 - - - -

Private 249,127,859 221,732,017 9,815,466 6,537,457 8,335,970 4,034,938
259,282,937 232,313,157 9,815,466 6,537,457 8,335,970 4,034,938
43.1.4 Contingencies and Commitments

Credit risk by industry sector 2022 2021

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

Automobile and transportation equipment 2,465,252 3,231,157

Cement 649,542 471,032
Chemical and Pharmaceuticals 9,969,088 8,009,718
Commerce and Trade 2,403 2,304,669
Construction 2,410,894 3,082,279
Electronics and electrical appliances 4,651,125 375,740
Financial 28,667,173 21,083,957
Food and Beverages 7,115,023 6,041,761
Iron / Steel 9,887,367 6,832,740
Machinery and Equipment 508,571 970,717
Paper, Board and Packaging 469,143 328,478
Power (electricity), Gas, Water, Sanitary 15,891,050 9,062,394
Rubber and plastic 674,760 849,159
Services 3,447,786 3,419,877
Textile 3,043,153 5,663,038
Transport, Storage and Communication 1,843,000 1,599,573
Wholesale, Retail and Trade 10,520,587 3,845,909
Others 405,568 670,769
102,621,485 77,842,967

Credit risk by public / private sector

Public / Government 17,770,554 10,997,982

Private 84,850,931 66,844,985
102,621,485 77,842,967

43.1.5 Concentration of Islamic financing and related assets

The Bank top 10 exposures on the basis of total (funded and non-funded exposures) aggregated to Rs. 51,423 million (2021: Rs. 33,406 million) are as following:

2022 2021
------- Rupees in '000 -------

Funded 40,416,134 28,908,465

Non Funded 11,007,157 4,497,259
Total Exposure 51,423,291 33,405,724

The sanctioned limits against these top 10 exposures aggregated to Rs. 54,577 million (2021: Rs. 36,827 million). Further, none of the top 10 customers have been
placed under non-performing status as at December 31, 2022 and December 31, 2021.

43.1.6 Islamic financing and related assets - Province / Region-wise Disbursement & Utilization

2022
Utilization

KPK
Disbursements
Province / Region Punjab Sindh including Baluchistan Islamabad AJK
FATA

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

Punjab 116,711,198 113,696,136 970,000 1,990,257 - 54,805 -

Sindh 292,799,773 39,080,765 241,059,686 488,551 10,059,476 2,032,026 79,269
KPK including FATA - - - - - - -
Baluchistan - - - - - - -
Islamabad 19,794,760 2,428,274 820,089 2,219,609 650,000 13,676,788 -
AJK - - - - - - -
Total 429,305,731 155,205,175 242,849,775 4,698,417 10,709,476 15,763,619 79,269

2021
Utilization
Disbursements KPK including
Province / Region Punjab Sindh Baluchistan Islamabad AJK
FATA
------------------------------------------------------------ Rupees in '000 ------------------------------------------------------------

Punjab 125,867,395 122,917,997 2,497,742 273,504 - 178,152 -

Sindh 256,835,021 30,081,250 209,182,736 239,146 14,240,385 2,971,053 120,451
KPK including FATA 72,801 - - 72,801 - - -
Baluchistan - - - - - - -
Islamabad 26,383,895 3,692,546 1,336,279 1,810,414 498,000 19,046,656 -
AJK 23,927 - - - - - 23,927
Total 409,183,039 156,691,793 213,016,757 2,395,865 14,738,385 22,195,861 144,378
43.2 Market Risk

Market risk is the risk that the value of the on and off balance sheet positions of the Bank will be adversely affected by movements in market rates or other
underlying risk factors.

The Bank manages the market risk in its portfolios through its Market Risk Management framework and methodologies set out in its Board approved Market Risk
Policy as per the SBP guidelines. A separate market risk monitoring function has also been set up.

Market Risk at the Bank is controlled by:

- Identifying the relevant market risk factors for a particular product, portfolio or business proposition;
- Applying an appropriate limit structure; and
- Setting and monitoring appropriate levels of limits.

These are adequately supported by stringent operational controls and standards and compliance with internal and regulatory policies.

Standard risk management techniques and tools have been adopted by the risk management group, including the SBP mandated stress testing methodology to
monitor and manage market risk. The Bank has adopted Standardised Approach for calculation of capital charge against market risk charge.

43.2.1 Balance sheet split by trading and banking books 2022 2021
Banking Book Trading Book Total Banking Book Trading Book Total
------------------ Rupees in '000 ------------------ ------------------ Rupees in '000 ------------------

Cash and balances with treasury banks 45,632,108 - 45,632,108 25,761,239 - 25,761,239
Balances with other banks 1,146,321 - 1,146,321 1,363,873 - 1,363,873
Due from financial institutions 23,500,000 - 23,500,000 1,031,302 - 1,031,302
Investments 103,361,135 - 103,361,135 84,861,748 - 84,861,748
Islamic financing and related assets 247,767,953 - 247,767,953 225,364,893 - 225,364,893
Fixed assets 5,336,223 - 5,336,223 4,281,548 - 4,281,548
Intangible assets 409,352 - 409,352 378,536 - 378,536
Deferred tax assets 2,001,279 - 2,001,279 - - -
Other assets 16,236,091 - 16,236,091 8,431,020 - 8,431,020
445,390,462 - 445,390,462 351,474,159 - 351,474,159
43.2.2 Foreign Exchange Risk

Currency risk is the risk of loss arising from the fluctuations of exchange rates.

In the normal course of conducting commercial banking business, which ranges from intermediation only to taking on principal risk as dealer or as counterparty, the
Bank purchases or sells currencies in today / ready and gives or receives unilateral promises for sale or purchase of foreign exchange at future dates in a long or
short position in different currency pairs. These positions expose the Bank to foreign exchange risk. To control this risk, the Bank primarily uses principal limits at
various levels to control the open position, and ultimately the residual foreign exchange risk of the Bank. The Bank also strictly adheres to all associated regulatory
limits.

The following is a summary of the assets of the Bank subject to foreign exchange risk:

2022 2021

Foreign Foreign Net foreign Foreign Net foreign

Off-balance Foreign Off-balance sheet
Currency Currency currency Currency currency
sheet items Currency Assets items
Assets Liabilities exposure Liabilities exposure

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

United States Dollar 25,292,817 (45,758,227) 19,595,629 (869,781) 23,986,797 (25,272,453) 1,251,807 (33,849)
Great Britain Pound 589,349 (1,966,789) 1,383,128 5,688 325,858 (1,874,342) 1,548,849 365
Japanese Yen 1,562 - - 1,562 2,686 (51,572) 51,585 2,700
Euro 467,558 (1,175,098) 712,271 4,731 281,877 (892,883) 612,393 1,388
Swiss Franc - - - - - - (2,692) (2,692)
U.A.E Dirham 415,007 (4,451,330) 4,038,232 1,909 237,342 (3,790,491) 3,553,772 623
Australian Dollar 7,707 - - 7,707 4,730 - - 4,730
Canadian Dollar 149 (235,040) 233,916 (975) 18,440 (193,956) 180,215 4,699
Saudi Riyal 20,659 (173) (30,103) (9,617) 481 - - 481
Chinese Yen 1,088 - - 1,088 4,731 - 887 5,618
Singapore Dollar 4,240 - - 4,240 7,563 - - 7,563
26,800,136 (53,586,657) 25,933,073 (853,448) 24,870,505 (32,075,697) 7,196,816 (8,376)

Trading book Banking book

2022 2021 2022 2021
Impact of 1% change in foreign exchange rates on --- Rupees in '000 --- --- Rupees in '000 ---

- Profit and loss account - - 11,666 977

- Other comprehensive income - - (20,116) (1,060)

43.2.3 Equity position Risk

The Bank had no exposure to equities as at the reporting date.

43.2.4 Yield / Profit Rate Risk

All products dealt in by the Bank are duly approved by the Bank’s Shari'a Board / Resident Shari'a Board Member and the Bank does not conduct any business in interest related products.

The objective of yield / profit rate risk monitoring is to manage the resultant impact on the Bank’s statement of financial position due to changes in profit / return on investment and financing products. Yield / profit rate risk review of the statement of
financial position is also done monthly in ALCO meetings. Various ratios as prescribed by the SBP are also monitored. The Bank also uses Gap Analysis and Notional Principal Limits to monitor the risks.

2022 2021
Banking Book Trading Book Banking Book Trading Book
-------------------------- Rupees in '000 --------------------------
Impact of 1% change in profit rates on
- Profit and loss account 818,834 - 960,164 -

43.2.5 Mismatch of Yield Rate Sensitive Assets and Liabilities

2022
Effective Exposed to Yield / Profit risk Non-profit
Yield / Over 1 Over 3 Over 6 Over 1 Over 2 Over 3 Over 5 bearing
Total
profit Upto 1 Month to 3 to 6 Months to 1 to 2 to 3 to 5 to 10 Above financial
rate Months Months Year Years Years Years Years 10 Years instruments
On-balance sheet financial instruments ----------------------------------------------------------------------------------------- Rupees in '000 -----------------------------------------------------------------------------------------

Assets
Cash and balances with treasury banks - 45,632,108 - - - - - - - - - 45,632,108
Balances with other banks - 1,146,321 - - - - - - - - - 1,146,321
Due from financial institutions 15.79% 23,500,000 23,500,000 - - - - - - - - -
Investments 10.92% 103,361,135 4,237,443 15,659,561 67,354,152 - - - 11,045,734 5,064,245 - -
Islamic financing and related assets- net 13.34% 247,767,953 64,616,217 85,597,136 61,760,069 12,375,088 3,987,035 4,842,101 5,374,828 5,323,767 2,053,882 1,837,830
Other assets - 15,405,301 - - - - - - - - - 15,405,301
436,812,818 92,353,660 101,256,697 129,114,221 12,375,088 3,987,035 4,842,101 16,420,562 10,388,012 2,053,882 64,021,560
Liabilities
Bills payable - 7,207,894 - - - - - - - - - 7,207,894
Due to financial institutions 7.47% 35,875,060 1,758,043 8,884,977 6,337,507 1,062,270 2,784,486 5,769,766 4,765,285 4,512,726 - -
Deposits and other accounts 6.71% 345,811,211 247,912,748 - - - - - - - - 97,898,463
Subordinated sukuk 14.41% 7,120,000 3,120,000 - 4,000,000 - - - - - - -
Other liabilities - 14,967,675 - - - - - - - - - 14,967,675
410,981,840 252,790,791 8,884,977 10,337,507 1,062,270 2,784,486 5,769,766 4,765,285 4,512,726 - 120,074,032

On-balance sheet gap 25,830,978 (160,437,131) 92,371,720 118,776,714 11,312,818 1,202,549 (927,665) 11,655,277 5,875,286 2,053,882 (56,052,472)

Off-balance sheet financial instruments

Commitments in respect of:

Guarantees 26,997,386 - - - - - - - - - 26,997,386
Forward purchase 33,437,162 - - - - - - - - - 33,437,162
Forward sale (8,003,814) - - - - - - - - - (8,003,814)
Import letters of credit 43,094,462 - - - - - - - - - 43,094,462
Islamic financing and related assets 7,096,289 - - - - - - - - - 7,096,289
Commitments for acquisition of:
- Fixed assets 162,172 - - - - - - - - - 162,172
- Intangible assets 234,619 - - - - - - - - - 234,619
Other contingent liabilities 211,480 211,480
Off-balance sheet gap 103,229,756 - - - - - - - - - 103,229,756

Total yield / profit rate risk sensitivity gap (160,437,131) 92,371,720 118,776,714 11,312,818 1,202,549 (927,665) 11,655,277 5,875,286 2,053,882 (159,282,228)

Cumulative Yield / Profit Rate Risk Sensitivity Gap (160,437,131) (68,065,411) 50,711,303 62,024,121 63,226,670 62,299,005 73,954,282 79,829,568 81,883,450 (77,398,778)
 2021
Effective Exposed to Yield / Profit risk Non-profit
Yield / Over 1 Over 3 Over 6 Over 1 Over 2 Over 3 Over 5 bearing
Total
profit Upto 1 to 3 to 6 Months to 1 to 2 to 3 to 5 to 10 Above financial
rate Month Months Months Year Years Years Years Years 10 Years instruments
On-balance sheet financial instruments ----------------------------------------------------------------------------------------- Rupees in '000 -----------------------------------------------------------------------------------------

Assets
Cash and balances with treasury banks - 25,761,239 - - - - - - - - - 25,761,239
Balances with other banks - 1,363,873 - - - - - - - - - 1,363,873
Due from financial institutions 5.24% 1,031,302 1,000,000 - - - - - - - - 31,302
Investments 6.76% 84,861,748 1,258,974 1,162,022 68,292,742 - - - 9,469,031 4,678,979 - -
Islamic financing and related assets- net 8.60% 225,364,893 24,061,942 53,503,641 110,713,041 10,691,692 1,120,010 5,176,182 4,941,331 9,767,101 2,343,812 3,046,141
Other assets - 7,462,008 - - - - - - - - - 7,462,008
345,845,063 26,320,916 54,665,663 179,005,783 10,691,692 1,120,010 5,176,182 14,410,362 14,446,080 2,343,812 37,664,563
Liabilities
Bills payable - 7,449,011 - - - - - - - - - 7,449,011
Due to financial Institutions 2.61% 33,545,307 4,449,856 9,807,690 5,469,182 363,424 2,212,597 89,125 3,365,362 7,788,071 - -
Deposits and other accounts 3.73% 261,573,620 171,498,764 - - - - - - - - 90,074,856
Subordinated sukuk 8.53% 7,120,000 4,000,000 3,120,000 - - - - - - - -
Other liabilities - 10,977,530 - - - - - - - - - 10,977,530
320,665,468 179,948,620 12,927,690 5,469,182 363,424 2,212,597 89,125 3,365,362 7,788,071 - 108,501,397
On-balance sheet gap 25,179,595 (153,627,704) 41,737,973 173,536,601 10,328,268 (1,092,587) 5,087,057 11,045,000 6,658,009 2,343,812 (70,836,834)

Off-balance sheet financial instruments

Commitments in respect of:

Guarantees 26,262,065 - - - - - - - - - 26,262,065
Forward purchase 17,847,323 - - - - - - - - - 17,847,323
Forward sale (10,517,897) - - - - - - - - - (10,517,897)
Import letters of credit 34,649,476 - - - - - - - - - 34,649,476
Islamic financing and related assets 9,602,000 - - - - - - - - - 9,602,000
Acquisition of:
- Fixed assets 77,838 - - - - - - - - - 77,838
- Intangible assets 131,511 - - - - - - - - - 131,511
Other contingent liabilities 211,480 211,480
Off-balance sheet gap 78,263,796 - - - - - - - - - 78,263,796
Total yield / profit rate risk sensitivity gap (153,627,704) 41,737,973 173,536,601 10,328,268 (1,092,587) 5,087,057 11,045,000 6,658,009 2,343,812 (149,100,630)

Cumulative Yield / Profit Rate Risk Sensitivity Gap (153,627,704) (111,889,731) 61,646,870 71,975,138 70,882,551 75,969,608 87,014,608 93,672,617 96,016,429 (53,084,201)

2022 2021
---- Rupees in '000 ----

Total financial asset as per note 43.2.5 436,812,818 345,845,063

Add: Non-financial assets
Fixed asset 5,336,223 4,281,548
Intangibles 409,352 378,536
Deferred tax assets 2,001,279 -
Other asset 830,790 969,012
Total assets as per statement of financial position 445,390,462 351,474,159

Total financial liabilities as per note 43.2.5 410,981,840 320,665,468

Add: Non-financial liabilities
Deferred tax liabilities - 104,792
Other liabilities 4,301,805 3,136,840
Total liabilities as per statement of financial position 415,283,645 323,907,100
43.3 Operational Risk
43.3.1 Operational risk is the risk of loss resulting from inadequate or failed processes, people and systems or from external events and Sharia non-compliance. In this regard, in-compliance with the Risk Management Guidelines, issued by SBP, an Operational Risk Management Unit has been established within the Risk Management
Group, under supervision of the CRO.
43.3.2 The Bank uses Basic Indicator Approach (BIA) for assessing the capital charge for operational risk. To reduce losses arising from operational risk, the Bank has strengthened its risk management framework duly approved by the BOD by developing strategies, polices, guidelines and manuals. It also includes risk and control self-
assessment, key risk indicator, loss data management, set up independent fraud risk management unit, enhancing security measures, improving efficiency and effectiveness of operations and improving quality of human resources through trainings.

43.4 Liquidity Risk

Liquidity risk is defined as the potential loss arising from the Bank's inability to meet in an orderly way its contractual obligations when due. Liquidity risk arises in the general funding of the Bank's activities and in the management of its assets. The Bank maintains sufficient liquidity to fund its day-to-day operations, meet
customer deposit withdrawals either on demand or at contractual maturity, meet customers' demand for new financings, participate in new investments when opportunities arise, and to meet any other commitments. Hence, liquidity is managed to meet known as well as unanticipated cash funding needs.

Liquidity risk is managed within a framework of liquidity policies, controls and limits. These policies, controls and limits ensure that the Bank maintains well diversified sources of funding, as well as sufficient liquidity to meet all its contractual obligations when due. The management of liquidity is carried out using a prudent
strategic approach to manage the Bank's funding requirements.

It is the policy of the Bank to maintain adequate liquidity at all times and for all currencies and hence to be in a position, in the normal course of business, to meet all its obligations, to repay depositors, to fulfill commitments, to finance and to meet any other commitments made.

The management of liquidity risk within the Bank is undertaken within limits and other policy parameters set by ALCO, which meets monthly and reviews compliance with policy parameters. Day to day monitoring is done by the treasury while overall compliance is monitored and coordinated by the ALCO and includes
reviewing the actual and planned strategic growth of the business and its impact on the statement of financial position from a statement of financial position integrity and sustainability perspective and monitoring the Bank’s liquidity profile and associated activities.

43.4.1 Maturities of Assets and Liabilities - based on contractual maturity of the assets and liabilities of the Bank
2022
Over 1 to 7 Over 7 to 14 Over 14 days to Over 1 to 2 Over 2 to 3 Over 3 to 6 Over 6 to 9 Over 9 months
Total Upto 1 Day Over 1 to 2 years Over 2 to 3 years Over 3 to 5 Years Over 5 Years
days days 1 Month Months Months Months Months to 1 year
------------------------------------------------------------------------------------------------------------------------------- Rupees in '000 -------------------------------------------------------------------------------------------------------------------------------
Assets
Cash and balances with treasury banks 45,632,108 45,632,108 - - - - - - - - - - - -
Balances with other banks 1,146,321 1,146,321 - - - - - - - - - - - -
Due from financial institutions 23,500,000 - 23,500,000 - - - - - - - - - - -
Investments 103,361,135 3,837,843 - - - - 56,217 56,217 31,217 291,520 759,646 2,156,546 53,253,940 42,917,989
Islamic financing and related assets - net 247,767,953 5,305,259 1,289,535 4,078,617 9,012,110 18,870,261 22,956,640 40,894,307 13,073,026 12,953,391 21,063,005 21,478,800 33,630,920 43,162,082
Fixed assets 5,336,223 4,894 29,363 34,257 80,875 108,952 108,129 354,878 319,931 308,640 1,050,912 754,249 1,207,853 973,290
Intangible assets 409,352 347 2,083 2,428 5,551 10,408 10,408 31,223 31,223 31,143 122,217 98,034 62,009 2,278
Deferred tax assets 2,001,279 5,483 32,898 38,381 93,210 164,489 169,972 493,466 498,949 504,431 - - - -
Other assets 16,236,091 714,676 1,406,100 172,418 1,533,801 2,353,907 3,104,347 6,305,712 150,367 48,355 141,317 101,338 99,283 104,470
445,390,462 56,646,931 26,259,979 4,326,101 10,725,547 21,508,017 26,405,713 48,135,803 14,104,713 14,137,480 23,137,097 24,588,967 88,254,005 87,160,109
Liabilities
Bills payable 7,207,894 7,207,894 - - - - - - - - - - - -
Due to financial institutions 35,875,060 373,706 51,823 576,819 755,695 4,726,961 4,158,016 6,337,507 478,240 584,031 2,784,486 5,769,766 4,765,285 4,512,725
Deposits and other accounts 345,811,211 274,116,664 5,641,088 4,745,628 10,395,517 5,759,904 12,831,097 5,689,322 2,993,164 3,872,285 3,066,787 1,662,459 1,740,370 13,296,926
Subordinated sukuk 7,120,000 - - - - - - - - - - - - 7,120,000
Deferred tax liability - - - - - - - - - - - - - -
Other liabilities 19,269,480 68,869 3,404,638 304,847 3,064,815 1,367,062 2,917,617 2,149,349 676,966 723,978 736,857 1,304,824 1,104,394 1,445,264
415,283,645 281,767,133 9,097,549 5,627,294 14,216,027 11,853,927 19,906,730 14,176,178 4,148,370 5,180,294 6,588,130 8,737,049 7,610,049 26,374,915
Net assets 30,106,817 (225,120,202) 17,162,430 (1,301,193) (3,490,480) 9,654,090 6,498,983 33,959,625 9,956,343 8,957,186 16,548,967 15,851,918 80,643,956 60,785,194

Share capital 11,652,288

Reserves 3,875,828
Surplus on revaluation of investments (674,055)
Unappropriated profit 15,252,756
30,106,817
 2021

Over 7 to 14 Over 14 days to 1 Over 1 to 2 Over 6 to 9 Over 9 months to

Total Upto 1 Day Over 1 to 7 days Over 2 to 3 Months Over 3 to 6 Months Over 1 to 2 years Over 2 to 3 years Over 3 to 5 Years Over 5 Years
days Month Months Months 1 year

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

Assets
Cash and balances with treasury banks 25,761,239 25,761,239 - - - - - - - - - - - -
Balances with other banks 1,363,873 1,363,873 - - - - - - - - - - - -
Due from financial institutions 1,031,302 - 1,000,000 - - - - 31,302 - - - - - -
Investments 84,861,748 858,894 - - - - 120,910 3,315,837 32,513 626,654 1,018,335 1,018,335 34,812,001 43,058,269
Islamic financing and related assets - net 225,364,893 5,108,201 1,542,649 5,744,133 7,328,322 17,000,250 20,884,737 38,074,473 12,752,247 17,247,023 19,542,815 20,154,792 28,888,117 31,097,134
Fixed assets 4,281,548 4,697 28,183 32,880 77,678 103,029 101,573 326,184 289,181 258,506 937,255 629,395 958,240 534,747
Intangible assets 378,536 286 1,717 2,003 4,579 8,574 8,574 25,733 25,542 25,138 99,470 96,880 70,929 9,111
Deferred tax assets - - - - - - - - - - - - - -
Other assets 8,431,020 32,165 666,715 519,577 826,663 1,508,887 1,641,459 2,593,789 108,610 94,357 143,994 99,989 109,048 85,767
351,474,159 33,129,355 3,239,264 6,298,593 8,237,242 18,620,740 22,757,253 44,367,318 13,208,093 18,251,678 21,741,869 21,999,391 64,838,335 74,785,028
Liabilities
Bills payable 7,449,011 7,449,011 - - - - - - - - - - - -
Due to financial institutions 33,545,307 104,541 2,307,000 1,500,000 538,315 1,078,617 8,729,073 5,469,182 - 363,424 2,212,597 89,125 3,365,362 7,788,071
Deposits and other accounts 261,573,620 215,126,043 2,666,669 4,294,033 13,102,578 3,991,487 4,283,874 5,934,237 2,662,712 5,756,979 2,333,728 1,169,330 132,138 119,812
Subordinated sukuk 7,120,000 - - - - - - - - - - - - 7,120,000
Deferred tax liability 104,792 287 1,723 2,010 4,881 8,039 8,900 26,126 26,413 26,413 - - - -
Other liabilities 14,114,370 710,883 1,651,541 648,996 2,468,453 1,394,575 2,265,082 1,660,808 184,676 316,324 648,815 853,576 671,521 639,120
323,907,100 223,390,765 6,626,933 6,445,039 16,114,227 6,472,718 15,286,929 13,090,353 2,873,801 6,463,140 5,195,140 2,112,031 4,169,021 15,667,003
Net assets 27,567,059 (190,261,410) (3,387,669) (146,446) (7,876,985) 12,148,022 7,470,324 31,276,965 10,334,292 11,788,538 16,546,729 19,887,360 60,669,314 59,118,025

Share capital 11,652,288

Reserves 3,092,713
Deficit on revaluation of investments 683,374
Unappropriated profit 12,138,684
27,567,059
43.4.2 Maturities of assets and liabilities - based on expected maturities of the assets and liabilities of the Bank

2022
Over 6
Upto 1 Over 1 to 3 Over 3 to 6 Over 1 to 2 Over 2 to 3 Over 3 to 5 Over 5 to 10 Above 10
Total Months to 1
Month Months Months Years Years Years Years Years
Year

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

Assets
Cash and balances with treasury banks 45,632,108 45,632,108 - - - - - - - -
Balances with other banks 1,146,321 1,146,321 - - - - - - - -
Due from financial institutions 23,500,000 23,500,000 - - - - - - - -
Investments 103,361,135 3,837,843 56,217 56,217 322,736 759,646 2,156,546 53,253,940 42,917,990 -
Islamic financing and related assets - net 247,767,953 19,685,520 41,826,901 40,894,307 26,026,417 21,063,005 21,478,800 33,630,920 27,428,138 15,733,945
Fixed assets 5,336,223 149,390 217,081 354,878 628,571 1,050,912 754,249 1,207,853 973,289 -
Intangible assets 409,352 10,409 20,816 31,223 62,366 122,217 98,034 62,009 2,278 -
Deferred tax assets 2,001,279 169,972 334,460 493,466 1,003,381 - - - - -
Other assets 16,236,091 3,826,995 5,458,254 6,305,712 198,722 141,317 101,338 99,283 104,470 -
445,390,462 97,958,558 47,913,729 48,135,803 28,242,193 23,137,097 24,588,967 88,254,005 71,426,165 15,733,945

Liabilities
Bills payable 7,207,894 7,207,894 - - - - - - - -
Due to financial institutions 35,875,060 1,758,043 8,884,977 6,337,507 1,062,270 2,784,486 5,769,766 4,765,285 4,512,726 -
Deposits and other accounts 345,811,211 28,181,719 30,956,762 24,761,935 45,429,856 52,346,370 50,807,397 100,030,247 13,296,925 -
Subordinated sukuk 7,120,000 - - - - - - - 4,000,000 3,120,000
Deferred tax liabilities - - - - - - - - - -
Other liabilities 19,269,480 6,843,168 4,284,679 2,149,349 1,400,945 736,857 1,304,824 1,104,394 1,445,264 -
415,283,645 43,990,824 44,126,418 33,248,791 47,893,071 55,867,713 57,881,987 105,899,926 23,254,915 3,120,000
Net assets 30,106,817 53,967,734 3,787,311 14,887,012 (19,650,878) (32,730,616) (33,293,020) (17,645,921) 48,171,250 12,613,945

Share capital 11,652,288

Reserves 3,875,828
Surplus on revaluation of investments (674,055)
Unappropriated profit 15,252,756
30,106,817
 2021

Over 1 to 3 Over 3 to 6 Over 6 Months Over 1 to 2 Over 2 to 3 Over 3 to 5 Over 5 to 10 Above 10

Total Upto 1 Month
Months Months to 1 Year Years Years Years Years Years

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

Assets
Cash and balances with treasury banks 25,761,239 25,761,239 - - - - - - - -
Balances with other banks 1,363,873 1,363,873 - - - - - - - -
Due from financial institutions 1,031,302 1,000,000 - 31,302 - - - - - -
Investments 84,861,748 858,894 120,910 3,315,837 659,167 1,018,335 1,018,335 34,812,001 43,058,269 -
Islamic financing and related assets - net 225,364,893 19,723,305 37,884,987 38,074,473 29,999,271 19,542,815 20,154,792 28,888,117 19,483,908 11,613,225
Fixed assets 4,281,548 143,438 204,602 326,184 547,686 937,255 629,395 958,240 531,705 3,043
Intangible assets 378,536 8,585 17,148 25,733 50,680 99,470 96,880 70,929 9,111 -
Deferred tax assets - - - - - - - - - -
Other assets 8,431,020 2,045,118 3,150,346 2,593,789 202,967 143,994 99,989 109,048 67,281 18,488
351,474,159 50,904,452 41,377,993 44,367,318 31,459,771 21,741,869 21,999,391 64,838,335 63,150,274 11,634,756

Liabilities
Bills payable 7,449,011 7,449,011 - - - - - - - -
Due to financial institutions 33,545,307 4,449,856 9,807,690 5,469,182 363,424 2,212,597 89,125 3,365,362 7,788,071 -
Deposits and other accounts 261,573,620 26,168,628 18,122,663 20,869,311 38,618,081 40,817,352 39,652,954 77,204,820 119,811 -
Subordinated sukuk 7,120,000 - - - - - - - 4,000,000 3,120,000
Deferred tax liability 104,792 8,900 16,939 26,126 52,827 - - - - -
Other liabilities 14,114,370 5,479,873 3,659,657 1,660,808 501,000 648,815 853,576 671,521 639,120 -
323,907,100 43,556,268 31,606,949 28,025,427 39,535,332 43,678,764 40,595,655 81,241,703 12,547,002 3,120,000

Net assets 27,567,059 7,348,184 9,771,044 16,341,891 (8,075,561) (21,936,895) (18,596,264) (16,403,368) 50,603,272 8,514,756

Share capital 11,652,288

Reserves 3,092,713
Deficit on revaluation of investments 683,374
Unappropriated profit 12,138,684
27,567,059
44. PROFIT / (LOSS) DISTRIBUTION TO DEPOSITOR'S POOL & SPECIFIC POOLS

44.1 The Bank managed following general and specific pools during the year:

2022

Mudarib Mudarib
Profit rate
Share Share
Profit rate and Profit return
Mudarib transferred transferred
weightages Profit rate return Sharing distributed to
General Depositors Mudaraba Pool Share to the to the
announcement earned Ratio of remunerative
('000) depositors depositors
period Mudarib deposits (Saving
through Hiba through Hiba
and Term)
('000) (%)

Common mudaraba pool Monthly 6.01% 50.00% 4,140,524 748,434 45.19% 3.72%

2021

Mudarib Mudarib
Profit rate return
Profit rate and Share Share
Profit Sharing Mudarib distributed to
weightages Profit rate return transferred to transferred to
General Depositors Mudaraba Pool Ratio of Share remunerative
announcement earned the depositors the depositors
Mudarib ('000) deposits (Saving
period through Hiba through Hiba
and Term)
('000) (%)

Common mudaraba pool Monthly 4.54% 50.00% 2,158,573 413,006 16.06% 2.35%

2022

Mudarib Mudarib
Share Share
Profit rate and Profit
Mudarib transferred transferred Profit rate
weightages Profit rate return Sharing
Specific Pools Share to the to the return
announcement earned Ratio of
('000) depositors depositors distributed
period Mudarib
through Hiba through Hiba
('000) (%)

Islamic Export Refinance

- Musharaka Pool Monthly 7.63% 40.00% 1,649,925 212,428 31.07% 4.50%

Inter-bank Wakala / Musharaka

borrowing pool As required 12.04% - 17.81% * * N/A - 9.80% - 16.05%

Other Mudaraba Pools ** As required 1.42% - 20.23% * 7,823,408 1,493,158 26.80% 0.25% - 15.11%

2021

Mudarib Mudarib
Profit rate and Share Share
Profit Sharing Mudarib
weightages Profit rate return transferred to transferred to Profit rate return
Specific Pools Ratio of Share
announcement earned the depositors the depositors distributed
Mudarib ('000)
period through Hiba through Hiba
('000) (%)

Islamic Export Refinance

- Musharaka Pool Monthly 4.13% * 805,607 9,076 1.11% 2.00%

Inter-bank Wakala / Musharaka

borrowing pool As required 3.30% - 14.88% * * N/A - 3.0% - 10.50%

Other Mudaraba Pools ** As required 0.41% - 13.04% * 8,472,265 2,002,315 19.12% 0.25% - 11.93%

* The profit sharing ratio and the investment ratio varies case to case basis.

** The number of pools maintained by the Bank is 123 (2021: 116).

45 DATE OF AUTHORISATION FOR ISSUE

These financial statements were authorised for issue on _______________by the Board of Directors of the Bank.

46 GENERAL

46.1 Figures have been rounded off to the nearest thousand Rupees, unless otherwise stated.

President & CEO Chief Financial Officer Director Director Director

 ANNEXURE - 1
DUBAI ISLAMIC BANK PAKISTAN LIMITED
STATEMENT SHOWING WRITTEN-OFF ISLAMIC FINANCING AND RELATED ASSETS OR
ANY OTHER FINANCIAL RELIEF OF RUPEES 500,000/- OR ABOVE
DURING THE YEAR ENDED DECEMBER 31, 2022

S. Name and address of the customer Father/Husband Name CNIC No. Outstanding Liabilities at beginning of year Principal Profit Other Total
No. Principal Profit Others Total written-off written-off financial (10+11+12)
(Early (6+7+8) relief
Settlement provided
charges) (Early
Name Address
Settlement
charges)

1 2 3 4 5 6 7 8 9 10 11 12 13
-------------------------------------------------------------- Rupees in '000 --------------------------------------------------------------

1 ZAHEER UD DIN BABAR P-1566 STREET# 01 CHACK# 223 RB (KORIAN) FAISALABAD IRSHAD AHMED 33102-1774458-7 19,958 4,975 - 24,933 - 1,821 - 1,821
H NO 74 L MOH. IZMIR TOWN SOCIETY CANAL ROAD MULTAN ROAD
2 JAVED IQBAL MAQBOOL AHMAD 35202-1482415-5 9,335 1,754 - 11,089 - 988 - 988
LAHORE
3 ANWAAR ELAHI H NO. P-413, ST. 2 CHIBAN FAISALABAD 0321-6606263 ZULFIQAR ALI 33100-5644734-5 8,090 78 - 8,168 - 694 - 694
TRAVEL CHAIN INTERNATIONAL PVT LTD OFF NO 3,MAJID SONS CARPET
4 HABIB-UR-REHMAN ASHIQ HUSSAIN 35202-2920931-9 14,539 3,617 - 18,156 - 1,701 - 1,701
MANSION OPP. PTV STATION 19-ABBOT ROAD LHR
5 UZMA HOUSE#L-1,L-2,L-24 R-95 SECTOR 11-B NORTH KARACHI KARACHI Akram Khan 42000-0365773-2 14,663 100 - 14,763 - 1,455 - 1,455
HOUSE NO 350 SECTOR A STREET 7 KASHMIR COLONY KORANGI ROAD
6 ATIF ZAMAN ALI ZAMAN 42301-6277756-5 4,785 189 - 4,974 - 1,036 - 1,036
KARACHI SOUTH
7 MUKHTAR AHMED KHAN H # NO 337 STREET BLOCK K SABZAZAR SCHEME LAHORE GHULAM QADIR 42301-5822607-3 11,137 2,049 - 13,186 - 1,878 - 1,878
H NO 123 VIP BLOCK SITARA SAPNA CITY NEAR ISMAIL MARKET
8 MUHAMMAD NAEEM MUHAMMAD ALI 33100-3761740-5 8,173 653 - 8,826 - 1,133 - 1,133
FAISALABAD
C/O ZOHAIB ALI MANZOOR P-1099-5 FLOUR MILLS ROAD LALL MILL
9 ZOHAIB ALI MANZOOR MANZOOR HUSSAIN 33100-8145798-5 10,665 2,003 - 12,668 - 2,646 - 2,646
CHOWK FACTORY AREA FAISALABAD 03018662000
10 INTIZAR HUSSAIN 53 F, 1ST FLOOR, RAJA CENTER, MAIN MARKET,GULBERG III, LAHORE MUHAMMAD ALI 35402-2553372-3 1,182 1,030 - 2,212 - 1,016 - 1,016
11 ALI SHAHID HOUSE NO 97/1 STREET 15 PHASE 6 DHA KARACHI SHAHID AKHTAR 42301-5723966-3 9,487 205 - 9,692 - 920 - 920
HOUSE NO B- 306/1 MUHALLAH FORT SULTAN FAISAL TOWN AIR PORT IMTIAZ HUSSAIN
12 SAQLAIN RAZA WARRAICH 42201-5631272-9 1,178 769 - 1,947 - 698 - 698
KARACHI WARRAICH
13 H SHEIKH NOOR UD DIN AND SONS PVT 21-B SHAMI ROAD CANTT LAHORE N/A N/A 244,500 17,854 - 262,354 - 3,071 - 3,071

14 M. IMRAN AND ADNAN ENTERPRISES SUIT 3F,3RD FLOOR CRAZE 1PALAZA DHA LAHORE N/A N/A 33,705 1,124 - 34,829 33,705 1,124 - 34,829

15 ZAIN BUSINESS EMPIRE SMC. PVT LTD 19-G, MUHAMMAD PLAZA F-6,JINNAH AVENUE,BLUE AREA ISLAMABAD N/A N/A 862 47 - 909 862 47 - 909

16 Zubair / Z R Corporation - Pledge FLAT NO A-6 FALCON APPT 'PLOT 716/10 JAMSHED ROAD KARACHI N/A N/A 52,637 3,937 - 56,574 28,567 7,265 - 35,832

444,896 40,384 - 485,280 63,134 27,493 - 90,627