PAΪR INVESTMENT COMPANY LIMITED

STATEMENT OF FINANCIAL POSITION

AS AT DECEMBER 31, 2016

Note 2016 2015

(Rupees in '000)
ASSETS
Cash and balances with treasury banks 5 64,205 46,114
Balances with other banks 6 432,783 215,426
Lendings to financial institutions - -
Investments 7 11,842,973 18,543,009
Advances 8 5,424,351 3,502,948
Operating fixed assets 9 176,982 191,311
Deferred tax asset - net 10 238,128 259,691
Other assets 11 419,049 462,778
18,598,471 23,221,277
LIABILITIES
Bills payable - -
Borrowings 12 6,549,981 11,652,435
Deposits and other accounts 13 2,079,728 1,890,502
Sub-ordinated loans - -
Liabilities against assets subject to finance lease - -
Deferred tax liabilities - -
Other liabilities 14 518,803 484,862
9,148,512 14,027,799
NET ASSETS 9,449,959 9,193,478

REPRESENTED BY
Share capital 15 6,000,000 6,000,000
Reserves 16 794,107 673,449
Unappropriated profit 2,572,774 2,390,166
9,366,881 9,063,615
Surplus on revaluation of assets - net of deferred tax 17 83,078 129,863
9,449,959 9,193,478
CONTINGENCIES AND COMMITMENTS 18

The annexed notes 1 to 40 form an integral part of these financial statements.

____________________ ________________________
Chief Financial Officer Chief Executive Officer /
Managing Director

____________ ___________________ __________ __________

Chairman Chief Executive and Director Director
Managing Director
PAΪR INVESTMENT COMPANY LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED DECEMBER 31, 2016

Note 2016 2015

(Rupees in '000)
Mark-up / return / interest earned 21 1,243,694 1,509,674
Mark-up / return / interest expensed 22 533,274 627,125
Net mark-up / interest income 710,420 882,549
(Reversal)/Provision for non-performing loans and advances 8.5 (49,647) 36,247
(Reversal) of provision for diminution in the
value of investments 7.3 (366,209) (19,298)
(415,856) 16,949
Net mark-up / interest income after provisions 1,126,276 865,600
NON MARK-UP / INTEREST INCOME
Fee, commission and brokerage income 19,631 13,825
Dividend income 30,205 30,260
Gain from dealing in foreign currencies 408 542
Gain on sale of securities - net 23 4,913 313,567
Unrealised (loss) / gain on revaluation of
investments classified as held for trading-net 7.10 (1,920) 738
Other income 24 5 828
Total non mark-up / interest income 53,242 359,760
NON MARK-UP / INTEREST EXPENSES
Administrative expenses 25 318,148 302,183
Other provisions / write offs - -
Other charges / (reversal) -net 26 279 (154)
Total non mark-up / interest expenses 318,427 302,029
861,091 923,331
Extra ordinary / unusual items - -
PROFIT BEFORE TAXATION 861,091 923,331
Taxation
- current 214,558 267,480
- prior years 10,984 42,925
- deferred 32,258 15,512
27 257,800 325,917
PROFIT AFTER TAXATION 603,291 597,414

Basic and diluted earnings per share - (Rupees) 28 1.01 1.00

The annexed notes 1 to 40 form an integral part of these financial statements.

____________________ _______________________
Chief Financial Officer Chief Executive Officer/
Managing Director
___________ __________________ __________ __________
Chairman Chief Executive and Director Director
Managing Director
PAΪR INVESTMENT COMPANY LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED DECEMBER 31, 2016

Note 2016 2015

(Rupees in '000)

Profit after taxation 603,291 597,414

Other comprehensive income
Items that will not be reclassified to profit and loss
account in subsequent periods:
Actuarial (loss) on re-measurement of defined
benefit obligation 31.9 (36) (1,970)
Related deferred tax 11 630
(25) (1,340)
Comprehensive income transferred to equity 603,266 596,074

Components of comprehensive income not

reflected in equity

Surplus on revaluation of available for sale securities - net (57,469) (48,457)

Deferred tax on revaluation 10.1 10,684 2,283
(46,785) (46,174)
Total comprehensive income 556,481 549,900

The surplus / (deficit) on revaluation of ''Available-for-Sale'' securities is presented under a separate head
below equity as ''surplus / (deficit) on revaluation of assets'' in accordance with the requirements specified
by the Companies Ordinance, 1984, and the State Bank of Pakistan vide its BSD Circular no. 20 dated
August 4, 2000 and BSD Circular no 10 dated July 13, 2004.

The annexed notes 1 to 40 form an integral part of these financial statements.

_________________ ______________________
Chief Financial Chief Executive Officer /
Officer Managing Director

___________ __________________ ___________ ___________

Chairman Chief Executive and Director Director
Managing Director
PAΪR INVESTMENT COMPANY LIMITED
CASH FLOW STATEMENT
FOR THE YEAR ENDED DECEMBER 31, 2016

Note 2016 2015

(Rupees in '000)
CASH FLOWS FROM OPERATING ACTIVITIES
Profit before taxation 861,091 923,331
Less: Dividend income (30,205) (30,260)
830,886 893,071
Adjustments for:
Depreciation 9.2 14,957 20,655
Amortisation 9.3 288 1,094
(Reversal) / provision against non-performing loans and advances 8.5 (49,647) 36,247
Reversal of provision for diminution in the value of investments 7.3 (366,209) (19,298)
Gain on sale of operating fixed assets 24 (5) (828)
Charge for defined benefit plan 25 8,499 9,600
Unrealised loss on revaluation of held for trading investments 7.10 1,920 738
(390,197) 48,208
440,689 941,279
(Increase) / decrease in operating assets ###
Held-for-trading securities 5,924,979 (552,161)
Advances (1,871,756) 52,983
Others assets 45,334 74,348
4,098,557 (424,830)
Increase / (decrease) in operating liabilities
Borrowings (5,102,454) 2,431,210
Deposits and other accounts 189,226 1,504,442
Other liabilities (excluding provision for taxation - net) (95,940) 74,599
(5,009,168) 4,010,251
(469,922) 4,526,700
Income tax paid (244,354) (316,724)
Defined benefits paid (10,827) (28,168)
Net cash flows (used in ) / from operating activities (725,103) 4,181,808
CASH FLOWS FROM INVESTING ACTIVITIES
Net investments in available for sale securities 938,544 (4,150,551)
Net investments in held to maturity securities 143,333 (17,403)
Dividend income received 29,586 30,202
Investment in operating fixed assets (1,000) (2,865)
Sale proceeds of operating fixed asstes disposed off 88 987
Net cash flows from / (used in) investing activities 1,110,551 (4,139,630)
CASH FLOWS FROM FINANCING ACTIVITIES
Dividend paid (150,000) (75,000)
Net cash flows from financing activities (150,000) (75,000)
Increase in cash and cash equivalents 235,448 (32,822)
Cash and cash equivalents at beginning of the year 29 261,540 294,362
Cash and cash equivalents at end of the year 29 496,988 261,540
###
The annexed notes 1 to 40 form an integral part of these financial statements. ###

____________________ ________________________ ###

Chief Financial Officer Chief Executive Officer /
Managing Director

____________ ____________
Chairman Chief Executive / Director Director
Managing Director
Cash flow working

PAЇR Investment Company Limited

Condensed Interim Statement of Financial Position (Unaudited)
As at December 31, 2015
Note 31 December 31 December
2015 2014
(Audited) (Audited)
(Rupees in '000)
ASSETS
Cash and balances with treasury banks 64,205 46,114 (18,091)
Balances with other banks 432,783 215,426 (217,357)
Lendings to financial institutions - - -
Investments - net 5 11,842,973 18,543,009 6,700,036
Advances - net 6 5,424,351 3,502,948 (1,921,403)
Operating fixed assets 7 176,982 191,311 14,329
Deferred tax assets - net 238,128 259,691 21,563
Other assets 419,049 462,778 43,729
18,598,471 23,221,277
LIABILITIES
Bills payable - - -
Borrowings 6,549,981 11,652,435 (5,102,454)
Deposits and other accounts 2,079,728 1,890,502 189,226
Sub-ordinated loans - - -
Liabilities against assets subject to finance lease - - -
Deferred tax liabilities - - -
Other liabilities 518,803 484,862 33,941
9,148,512 14,027,799
NET ASSETS 9,449,959 9,193,478
REPRESENTED BY
Share capital 6,000,000 6,000,000 -
Reserves 794,107 673,449 120,658
Unappropriated profit 2,572,774 2,390,166 182,608
9,366,881 9,063,615
Surplus on revaluation of assets - net of tax 83,078 129,863 (46,785)
9,449,959 9,193,478 -
Other Assets
Opening 462,778
Less: Closing (419,049)
Add: Dividend Receivable 1,054
less: Opening Receivable (435)
44,348
Tax Paid
Current Income Tax 225,542
Add: Provison for Taxation closing 89,387
Less: Provision for Taxation opening (108,199)
Tax paid (206,730)
Gratuity
Opening Balance' 1,307 14320
Charge during the year 8,499 5081
Remeasurement 36 2287
Payment (10,828) -2288
Closing Balance (986) 0
2021
WWF / Govt. Levies 21421
Opening Balance' 2,864
Provision during the year (379)
Closing Balance 3,243

Dividend Payable
Opening Balance' 150,000
Provision during the year 300,000
Payment 150,000
Closing Balance 300,000

Dividend Income Received

Dividend income 30,205
Less: Closing receivable (1,054)
Add: opening receivable 435
29,586

Operating Fixed Assets

Opening balance 191,311
Less: Depreciation (14,957)
Less: amortization (288)
Cost of assets sold (148)
Accumulated depreciation on disposals (65)
Less: Closing Balance (176,982)
Investment in operating fixed assets (1,129)

Increase in Other Liabilities

Movement in other liabilities 33,941 111,958
Closing provision for taxation (89,387) 38,419
Opening provision for taxation 108,199 32,496
Closing payable for DBP - -
Opening payable for DBP 1,307 (25,000)
54,060 157,873

Net investments in 'available for sale' securities

opening investment 18,807,372
closing investment (11,840,995)
opening surplus on revaluation of asset (129,863)
closing surplus on revaluation of asset 85,602
less provision on devaluation of investment 366,209
Add related deffer tax liability 27,118
less opening related deffer tax (44,586)
less opening HFT securities given as collateral (5,128,229)
Add Total closing HFT securities 327,030
less Opening HTM securities (143,333)
add Closing HTM securities -
2,326,325
Net increase in investments in HFT

Unrealised gain/(loss) on revaluation of

investments classified as 'held for trading'-net

Add op HFT securities held as collateral 6,252,009

Less Closing total HFT securities (325,110)
5,926,899

Net investments in HTM securities

Total opening HTM securities 143,333
Total closing HTM securities -
143,333

Sale proceeds of property and equipment disposed off

Cost of assets sold 148
Accumulated depreciation on disposals (65)
Gain on sale of fixed assets 5
88
PAΪR INVESTMENT COMPANY LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED DECEMBER 31, 2016

Issued, Reserves
subscribed and
paid-up share Statutory Unappropriated
Note Total
capital reserve profit

'--------------------------------------- (Rupees in '000) ---------------------------------------

Balance as at December 31, 2014 6,000,000 553,966 2,063,575 8,617,541

Total comprehensive income for the year

Profit for the year ended December 31, 2015 - - 597,414 597,414
Other comprehensive income - - (1,340) (1,340)
Total comprehensive income for the year ended
December 31, 2015 - - 596,074 596,074

Transfer to statutory reserve 16 - 119,483 (119,483) -

Transactions with owners recognised
directly in equity
Final cash dividend - December 31, 2014 declared
subsequent to the year end - - (150,000) (150,000)
Balance as at December 31, 2015 6,000,000 673,449 2,390,166 9,063,615

Total comprehensive income for the year

Profit for the year ended December 31, 2016 - - 603,291 603,291

Other comprehensive income - - (25) (25)

Total comprehensive income for the year ended
December 31, 2016 - - 603,266 603,266

Transfer to statutory reserve 16 - 120,658 (120,658) -

Transactions with owners recognised

directly in equity

Final cash dividend - December 31, 2015 declared

subsequent to the year end - - (300,000) (300,000)

Balance as at December 31, 2016 6,000,000 794,107 2,572,774 9,366,881

The annexed notes 1 to 40 form an integral part of these financial statements.

____________________ _______________________
Chief Financial Officer Chief Executive Officer /
Managing Director

______________ ___________________ ______________ ______________

Chairman Chief Executive and Director Director
Managing Director
PAΪR INVESTMENT COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2016

1. STATUS AND NATURE OF BUSINESS

PAΪR Investment Company Limited, "the Company" is an unlisted Public Limited Company incorporated
in Pakistan on January 15, 2007 under the Companies Ordinance, 1984. The Company has been notified as
a Development Financial Institution by the Ministry of Finance, Government of Pakistan.
The Company is a Joint Venture (50:50) between Government of Pakistan and Iran Foreign Investment
Company which is owned by the Government of Iran. The Company's objectives interalia includes
financing for industrial and commercial projects, capital and money market operations and other
investment banking activities. Its registered and principal office is situated at ICCI Building, Clifton,
Karachi.
2 BASIS OF PREPARATION
2.1 Basis of measurement
These financial statements have been prepared in accordance with the requirements of the format
prescribed by the State Bank of Pakistan's (SBP) BSD Circular No. 4 dated February 17, 2006 and BSD
Circular letter No. 07 dated April 20, 2010.

These financial statements have been presented in Pakistani Rupees, which is the Company's functional
and presentation currency. The amounts are rounded to nearest thousand rupees.

3 STATEMENT OF COMPLIANCE
3.1 These financial statements have been prepared in accordance with approved accounting standards as
applicable in Pakistan. Approved accounting standards comprise of such International Financial Reporting
Standards (IFRSs) issued by the International Accounting Standards Board (IASB) as are notified under
the Companies Ordinance, 1984, the provisions of and directives issued under the Companies Ordinance,
1984 and the Banking Companies Ordinance, 1962 and the directives issued by State Bank of Pakistan
(SBP) and Securities and Exchange Commission of Pakistan (SECP). Wherever the requirements of
Companies Ordinance, 1984, the Banking Companies Ordinance, 1962 or directives of SBP or SECP
differ with the requirements of IFRSs, the requirements of the Companies Ordinance, 1984, the Banking
Companies Ordinance, 1962 or the requirements of the said directives shall prevail.
The SBP through its BSD Circular letter No. 11 dated September 11, 2002 has deferred the
implementation of IAS 39 ‘Financial Instruments: Recognition and Measurement’ and IAS 40 ‘Investment
Property’ for Non-Banking Financial Institutions (NBFIs) in Pakistan. Further, SECP has deferred the
implementation of IFRS 7 'Financial Instruments: Disclosures' through SRO 411(1)/2008. Accordingly,
the requirements of these IFRS and their respective interpretations issued by International Financial
Reporting Interpretations Committee (IFRIC) and Standing Interpretations Committee (SIC), have not
been considered in preparation of these financial statements.
IFRS 8, 'Operating Segments' is effective for the Company's accounting period beginning on or after
January 1, 2009. All banking companies in Pakistan are required to prepare their annual financial
statements in line with the format prescribed under BSD Circular No. 4 dated February 17, 2006, 'Revised
Forms of Annual Financial statements', effective from the accounting year ended December 31, 2006.
The management of the Company believes that as the SBP has defined the segment categorisation in the
above mentioned circular, the SBP requirements prevail over the requirements specified in IFRS 8.
Accordingly, segment information disclosed in these financial statements is based on the requirements laid
down by the SBP.
PAΪR INVESTMENT COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2016

3.2 Standards, amendments and interpretations to the published standards that are relevant to the
company and adopted in the current year
The Company has adopted the following new standards, amendments to published standards and
interpretations of IFRSs which became effective during the current year.
Standard or Interpretation Effective Date
IAS 1 - Disclosure Initiative (Amendments to IAS 1 Presentation of Financial January 1, 2016
Statements)
IFRS 10, IFRS 12 and IAS 28 - Investment Entities : Applying the
Consolidation Exception (Amendments to IFRS 10, IFRS 12 and IAS 28) January 1, 2016
Annual Improvements to IFRSs 2012 - 2014 Cycle January 1, 2016
IAS 16 and IAS 41 - Agriculture: Bearer Plants (Amendments to IAS 16 and January 1, 2016
IAS
IAS 41)
27 - Equity method in Separate Financial Statatements (Amendments to January 1, 2016
IAS
IAS 27)
16 and IAS 38 - Clarification of Acceptable Methods of Depreciation and
Amortisation (Amendments to IAS 16 and IAS 38) January 1, 2016
IFRS 11 - Accounting for Acquisitions of Interests in Joint Operations
(Amendments to IFRS 11) January 1, 2016
Adoption of the above revisions, amendments and interpretations of the standards have no significant
effect on the amounts for the year ended December 31, 2015 and 2016.
Standards, amendments and interpretations to the published standards that are relevant but not yet
effective and not early adopted by the Company

The following new standards, amendments to published standards and interpretations would be effective
from the dates mentioned below against the respective standard or interpretation.
Standard or Interpretation Effective Date
IFRS 10 and IAS 28 - Sale or Contribution of Assets between an Investor and
its Associate or Joint Venture (Amendments to IFRS 10 and IAS 28) Postponed
IAS 7 - Disclosure Initiative (Amendments to IAS 7) January 1, 2017
IAS 12 - Recognition of Deferred Tax Assets for Unrealized Losses January 1, 2017
(Amendments to IAS 12)
IFRS 2 - Classification and Measurement of Share-based Payment Transaction
(Amendements to IFRS 2) January 1, 2018
The Company is in the process of assessing the impact of these Standards, amendments and interpretations
to the published standards on the financial statements of the Company.
Standards, amendments and interpretations to the published standards that are not yet notified by
the Securities and Exchange Commission of Pakistan (SECP)
Following new standards have been issued by the International Accounting Standards Board (IASB)
which are yet to be notified by the SECP for the purpose of applicability in Pakistan.
IASB effective date
(Annual periods
Standard or Interpretation beginning on or after)
IFRS 14 - Regulatory Deferral Accounts January 1, 2016
IFRS 15 - Revenue from Contracts with Customers January 1, 2018
IFRS 9 - Financial Instruments (2014) January 1, 2019
PAΪR INVESTMENT COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2016

IFRS 16 - Leases January 1, 2018

4 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
4.1 Cash and cash equivalents
For the preperation of cash flow statement, cash and cash equivalents include cash and balances with
treasury banks and balances with other banks excluding any term deposit with original terms of greater
than three months.

4.2 Sale and re-purchase agreements

The Company enters into transactions of repos and reverse repos at contracted rates for a specified period
of time. These are recorded as under:

Sale under re-purchase obligations

Securities sold subject to a re-purchase agreement (repo) are retained in the financial statements as
investments and the counter party liability is included in borrowings. The differential in sale and re-
purchase value is accrued over the period of the agreement and recorded as an expense.

Securities purchased under agreement to re-sale (reverse repo) are included in lendings to financial
institutions. The differential between the contracted price and re-sale price is amortised over the period of
the agreement and recorded as income.

4.3 Critical accounting estimates and judgments

The preparation of financial statements in conformity with approved accounting standards as applicable in
Pakistan requires management to make judgments, estimates and associated assumptions that affect the
application of accounting policies and the reported amounts of assets and liabilities, income and expenses.
The judgments, estimates and associated assumptions are based on historical experiences, current trends
and various other factors that are believed to be reasonable under the circumstances, the results of which
form the basis of making the estimates.

Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on
an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is
revised, if the revision affects only that period, or in the period of the revision and future period if the
revision affects both current and future periods.

The significant judgments made by the management in applying the accounting policies and the key
sources of estimating uncertainty were the same as those applied to financial statements for the year ended
December 31, 2015.

In particular, information about significant areas of estimation uncertainty and critical judgments in
applying accounting policies that have the most significant effect on the amounts recognised in the
financial statements are described in the following:

- Classification and valuation of financial instruments and impairment (Note 4.4)

- Provision against non-performing advances (Note 4.5)
- Valuation and depreciation rates for operating fixed assets (Note 4.6)
- Taxation - Current (Note 4.7)
- Taxation - Deferred (Note 4.7)
- Staff retirement benefit (Note 4.19)
PAΪR INVESTMENT COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2016

4.4 Investments
The Company classifies its investments as follows:
Held for trading
These are securities, which are acquired with the intention to trade by taking advantages of short term
market/ interest rate movements and are carried at market value. Cost of investment is determined on
weighted average basis. These securities are required to be sold within 90 days from the date of their
classification as 'Held for trading' under normal circumstances, in accordance with the requirements of
State Bank of Pakistan.

Held to maturity
These are securities with fixed or determinable payments and fixed maturity in respect of which the
Company has the positive intent and ability to hold to maturity.

Available for sale

Investments that do not fall under the 'held for trading' or 'held to maturity categories' are classified as
'available for sale'.

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

Initial Recognition
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.

Subsequent Measurement
Investments in governmnent securities and quoted investments, categorized as 'held for trading' and
'available for sale' are valued at rates quoted on PKRV and Pakistan Stock Exchange (PSE) as at the date
of statement of financial position respectively. Any surplus or deficit arising as a result of revaluation of
securities categorised as 'held for trading' is taken to profit and loss account ant that of 'available for sale' is
taken to the statement of financial position, and shown below equity in accordance with the requirments of
State Bank of Pakistan.
Management has determined fair value of certain investments by using quotations from active market, and
review of conditions and information about the financial instruments. These estimates are subjective in
nature and involve some uncertainties and matter of judgement (e.g. evaluation, interest rates, etc.) and
therefore, cannot be determined with precision.

Investments classified as 'held-to-maturity' are stated at their ammortized cost less impairment In value, if
any.
Unquoted equity securities are valued at the lower of cost and break-up value less impairment losses, if
any. 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. Investments in subsidiaries and
associates if any (which qualify for accounting under International Accounting Standard - 28) are carried
at cost less impairment, if any.

Premium or discount on acquisition of investments is amortised through the profit and loss account over
the remaining period till maturity using effective interest method.
PAΪR INVESTMENT COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2016

Impairment
Impairment loss on investments in respect of available for sale (except term finance certificates) and held
to maturity 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 investment below its cost is also considered an
objective evidence of impairment. Provisions for diminution in the value of debt securities is made as per
the Prudential Regulations issued by the State Bank of Pakistan. In case of impairment of available for sale
securities, the cumulative loss that has been recognised below equity is removed and recognised in the
profit and loss account. For investments classified as held to maturity, the impairment loss is recognised in
profit and loss account.
4.5 Advances including net investment in finance lease
Advances are stated net of specific and general provisions. Specific provision for doubtful debts is
determined on the basis of Prudential Regulations issued by SBP and the other directives issued by the
SBP and charged to the profit and loss account. These regulations prescribe an age based criteria (as
supplemented by subjective evaluation of advances) for classification of non - performing loans and
advances and computing provision / allowance there against. Advances are written off when there is no
realistic prospect of recovery.
Leases in which the Company transfers substantially all the risks and rewards incidental to the ownership
of an asset to the lessees are classified as finance leases. A receivable is recognised at an amount equal to
the present value of the minimum lease payments, including any guaranteed residual value which are
included in the financial statements as “net investment in finance lease”.

The Company reviews its loan portfolio to assess the amount of non-performing advances and provision
required there against on a regular basis. While assessing this requirement various factors including the
delinquency in the account, financial position of the borrowers and the requirements of the Prudential
Regulations are considered.

4.6 Operating fixed assets

Tangible assets
Operating fixed assets except capital work in progress, are stated at cost less accumulated depreciation and
impairment loss, if any. Depreciation is charged to profit and loss account on straight line basis so as to
write-off the assets over their expected economic lives at the rates specified in note 9.2 to these financial
statements. The depreciation charge for the year is calculated after taking into account residual value, if
any. The residual values, useful lives and depreciation method are reviewed and adjusted, if appropriate, at
each balance sheet date. Full month depreciation is charged in the month the assets are available for use
and no depreciation is charged in the month of disposal.

Normal repairs and maintenance are charged to profit and loss account as and when incurred. Subsequent
expenditure is capitalised only when it increases the future economic benefits embodied in operating fixed
assets.

Gains and losses on disposal of assets are included in profit and loss account. The Company reviews the
rate of depreciation / useful life, residual values and value of assets for possible impairment on an annual
basis. Any change in the estimates in future years might affect the carrying amounts of the respective
items of operating fixed assets with a corresponding effect on depreciation charge and impairment.

Intangible assets
Intangible assets having a finite useful life are stated at cost less accumulated amortisation and impairment
losses, if any. Intangible assets are amortised from the month when these are available for use, using the
straight line method, whereby the cost of an intangible asset is amortised over the period which takes into
account the economic benefits that will be available to the Company. The residual value, useful life and
amortisation method is reviewed and adjusted, if appropriate, at each balance sheet date.
PAΪR INVESTMENT COMPANY LIMITED
Intangible assets having a finite useful life are stated at cost less accumulated amortisation and impairment
NOTES TO THE FINANCIAL STATEMENTS
losses, if any. Intangible assets are amortised from the month when these are available for use, using the
FOR THE YEAR
straight line ENDED
method, DECEMBER
whereby the cost31,of2016
an intangible asset is amortised over the period which takes into
account the economic benefits that will be available to the Company. The residual value, useful life and
amortisation method is reviewed and adjusted, if appropriate, at each balance sheet date.

Capital work-in-progress
Capital work in progress are stated at cost less impairment, if any. These are transferred to specific assets
as and when assets become available for use.
4.7 Taxation
Current
Provision for current taxation is based on the taxable income at the current rates of taxation after taking
into account available tax credit and rebates, if any. The charge for current tax also includes adjustments,
where considered necessary relating to prior years, which arises from assessments /developments made
during the year. The charge for current tax is calculated using prevailing tax rates enacted at the balance
sheet date and, any adjustments to tax payable relating to prior years.

In making the estimates for income taxes currently payable by the Company, the management considers
the current income tax laws and the decisions of appellate authorities on certain issues in the past. In
making the provisions for deferred taxes, estimates of the Company's future taxable profits are also taken
into account.
Deferred
Deferred tax is recognised using the balance sheet method on all temporary differences between the
amounts attributed to the assets and liabilities for financial reporting purposes and amounts used for
taxation purpose. Deferred tax is measured at the tax rates that are expected to be applied to the temporary
differences when they reverse, based on the laws 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 would be
available against which it can be utilised.
Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is not probable
that related tax benefits will be realised.
4.8 Borrowings and deposits
Borrowings and deposits are recorded at the amount of proceeds received. Mark-up on borrowings and
deposits are charged to profit and loss account on a time proportion basis.
4.9 Foreign currencies
Foreign currency transactions
Monetary assets and liabilities in foreign currencies are translated into Pakistan Rupees at the exchange
rates prevailing at the balance sheet date. Foreign currency transactions during the period are recorded at
the rates prevailing on the date of transaction.

Functional and presentation currency

Items included in the financial statements are measured using the currency of the primary economic
environment in which the Company operates. The financial statements are presented in Pakistani Rupees,
which is the Company's functional and presentation currency.

Translation gains and losses

Exchange gains and losses are included in profit and loss account.
4.10 Revenue recognition
Mark-up / return / interest income is recognised on a time proportion basis taking into account effective
yield on the asset, except where recovery is considered doubtful, the income is recognised on receipt basis.
Interest / return / mark-up on rescheduled / restructured advances and investments is recognised as
permitted by the Prudential Regulations issued by the SBP.
PAΪR INVESTMENT COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2016

A gain / loss on sale of securities is recognised in profit and loss account at the time of sale of relevant
securities.
The surplus / deficit arising on revaluation of the Company's held for trading investment portfolio is taken
to the profit and loss account.
Premium or discount on acquisition of investments is capitalised and amortised through the profit and loss
account over the remaining period through effective interest method.
Dividend income is recognised when the Company's right to receive the dividend is established.
Fee, commission and brokerage income is recognised as the services are rendered.
4.11 Impairment
The carrying amount of the Company’s assets (other than deferred tax asset) are reviewed at each balance
sheet date to determine whether there is any indication of impairment. If such indication exists, the
recoverable amount of the relevant asset is estimated. An impairment loss is recognised whenever the
carrying amount of an asset exceeds its recoverable amount. Impairment losses are recognised in profit
and loss account. An impairment loss is reversed if the reversal can be objectively related to an event
occurring after the impairment loss was recognised.

4.12 Off setting

Financial assets and financial liabilities are only offset and the net amount is reported in the financial
statements when there is a legally enforceable right to set-off the recognised amount and the Company
intends either to settle on a net basis, or to realise the assets and to settle the liabilities simultaneously.

4.13 Other provisions

Other provisions are recognised when the Company has a legal or constructive obligation as a result of a
past event, and it is probable that outflow of resources embodying economic benefits would be required to
settle the obligation and a reliable estimate of the amount can be made. Provisions are reviewed at each
reporting date and are adjusted to reflect the current best estimate.

4.14 Financial assets and liabilities

Financial assets and financial liabilities are recognised at the time when the Company becomes a party to
the contractual provision of the instrument. Financial assets are de-recognised when the contractual right
future cash flows from the asset expires or is transferred along with the risk and reward of the asset.
Financial liabilities are de-recognised when obligation specific in the contract discharge, cancel or expire.
Any gain or loss on de-recognition of the financial asset and liability is recognised in the profit or loss
account of the current period.

4.15 Dividend and appropriation to reserves

Dividend and appropriation to reserves, except appropriation which is required by the law after the balance
sheet date, is recognised as liability in the Company's financial statements in the period in which these are
approved.

4.16 Derivative financial instruments

Derivative financial instruments are initially recognised at their fair value on the date on which the
derivative contract is entered into and are subsequently remeasured at fair value. All derivative financial
instruments are carried as asset when fair value is positive and liabilities when fair value is negative. Any
change in the value of derivative financial instruments is taken to the profit and loss account.

4.17 Earnings per share

The Company presents earnings per share (EPS) data for its ordinary shares. EPS is calculated by dividing
the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of
ordinary shares outstanding during the year.
PAΪR INVESTMENT COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2016
The Company presents earnings per share (EPS) data for its ordinary shares. EPS is calculated by dividing
the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of
ordinary shares outstanding during the year.

4.18 Segment information

A segment is distinguishable component of the Company that is engaged in providing products or services
(business segment), or in providing products or services within a particular economic environment
(geographical segment), which is subject to risks and rewards that are different from those of other
segments. The Company's primary format of reporting is based on business segments.

4.18.1 Business segments

Following are the main segments of the Company:
Corporate finance and It includes loans, advances, leases and other transactions with corporate
commercial banking customers. Further, it undertakes advisory services including mergers and
acquisitions, listed debt syndication, trustee activities and other investment
banking activities
Trading & Sales (other Undertakes Company's fund management activities through leveraging and
than Capital Market) investing in liquid assets such as short term placements, government securities and
reverse repo activities. It carries out spread based activities in the inter bank
market and manages the interest rate risk exposure of the Company.

Capital Market Includes trading in listed securities with a view to trade and earn the benefit of
market fluctuations and to hold securities for dividend income and capital gains.

4.18.2 Geographical segments

The Company operate only in Pakistan.
4.19 Staff retirement benefit
Defined benefit plan
The Company operates an approved funded gratuity scheme for all its permanent employees who have
completed the qualifying period under the scheme. The scheme is administered by a Board of Trustees and
contributions therein are made in accordance with the actuarial recommendations. The valuation in this
regard is carried out at each balance sheet date, using the Projected Unit Credit Method for the valuation of
the scheme.

Gratuity is payable to staff on completion of two years of service.

Past service cost is the change in the present value of the defined benefit obligation resulting from a plan
amendment or curtailment. The company recognise past service cost as an expense at the earlier of the
following dates:

(a) when the plan amendment or curtailment occurs; or

(b) and when the Bank recognises related restructuring costs or termination
benefits.
The Company has adopted certain actuarial assumptions as disclosed in the note 31.2 for valuation of
defined benefit obligation and fair value of plan assets, based on actuarial advice.
Defined contribution plan
The Company operates a recognised provident fund scheme for its employees. Equal monthly
contributions are made, both by the Company and the employees, to the fund at the rate of 10% of the
basic salary.
4.20 Employees' compensated absences
Employees' entitlement to annual leave is recognised when they accrue to employees. A provision is made
for estimated liability for annual leave as a result of services rendered by the employee against un-availed
leaves upto the balance sheet date.
PAΪR INVESTMENT COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2016

Note 2016 2015

5 CASH AND BALANCES WITH TREASURY BANKS (Rupees in '000)
In hand
Local currency 70 70
Foreign currencies 642 706
712 776
With State Bank of Pakistan in
Local currency current account 5.1 62,960 44,808
With National Bank of Pakistan in
Local currency current account 8 385
Local currency deposit account 5.2 525 145
533 530
64,205 46,114

5.1 This represents current account maintained for minimum cash reserve required to be maintained with
the State Bank of Pakistan in accordance with its requirements.

5.2 This carries mark-up at the rate 3.75% per annum (2015: 4%).

2016 2015
6 BALANCES WITH OTHER BANKS Note (Rupees in '000)
In Pakistan
In current accounts 4,509 3,468
In deposits accounts 6.1 428,274 211,958
432,783 215,426

6.1 These deposit accounts carry annual markup ranging from 3.75% to 4% (2015: 4% to 4.5%).
PAΪR INVESTMENT COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2016

7. IN VESTMEN TS
2016 2015
Held by the Given as Held by the Given as
Total Total
7.1 Investments by type N ote Company collateral Company collateral
(Rupees in '000)

Held for trading securities

Market treasury bills - - - 638,631 4,322,407 4,961,038
Pakistan Investment Bonds 322,815 - 322,815 433,950 805,822 1,239,772
Shares in listed companies 4,215 - 4,215 50,461 - 50,461
327,030 - 327,030 1,123,042 5,128,229 6,251,271

Available for sale securities

Market treasury bills 1,744,779 3,696,579 5,441,358 1,924,043 1,924,044 3,848,087
Pakistan Investment Bonds 463,663 1,568,555 2,032,218 871,909 3,749,214 4,621,123
Units of mutual funds 800,000 - 800,000 300,000 - 300,000
Shares in listed companies 250,022 10,822 260,844 635,595 - 635,595
Shares in unlisted companies - - - 296,860 - 296,860
Sukuk bonds 255,468 - 255,468 240,002 - 240,002
Term finance certificates - Listed 339,371 659,869 999,240 999,640 - 999,640
Term finance certificates - Unlisted 1,626,609 - 1,626,609 1,412,974 - 1,412,974
5,479,912 5,935,825 11,415,737 6,681,023 5,673,258 12,354,281

Held to maturity securities

Preference shares - Unlisted - - - 143,333 - 143,333

- - - 143,333 - 143,333

Investments at cost 5,806,942 5,935,825 11,742,767 7,947,398 10,801,487 18,748,885

Provision for diminution in value

of investments 7.3 (12,571) - (12,571) (378,780) - (378,780)

Investments - net of provisions 5,794,371 5,935,825 11,730,196 7,568,618 10,801,487 18,370,105

(Deficit) / Surplus on revaluation

of held for trading securities 7.10 (1,920) - (1,920) (126) 864 738

Surplus on revaluation of
available for sale securities 17 48,191 66,506 114,697 118,606 53,560 172,166

Total investments at market value 5,840,642 6,002,331 11,842,973 7,687,098 10,855,911 18,543,009
PAΪR INVESTMENT COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2016

7 INVESTMENTS
2016 2015
Held by the Given as Held by the Given as
Company collateral Total Company collateral Total
7.1 Investments by type Note
(Rupees in '000)

Held for trading securities

Market treasury bills - - - 638,631 4,322,407 4,961,038
Pakistan Investment Bonds 322,815 - 322,815 433,950 805,822 1,239,772
Shares in listed companies 4,215 - 4,215 50,461 - 50,461
327,030 - 327,030 1,123,042 5,128,229 6,251,271

Available for sale securities

Market treasury bills 1,744,779 3,696,579 5,441,358 1,924,043 1,924,044 3,848,087
Pakistan Investment Bonds 463,663 1,568,555 2,032,218 871,909 3,749,214 4,621,123
Units of mutual funds 800,000 - 800,000 300,000 - 300,000
Shares in listed companies 250,022 10,822 260,844 635,595 - 635,595
Shares in unlisted companies - - - 296,860 - 296,860
Sukuk bonds 255,468 - 255,468 240,002 - 240,002
Term finance certificates - Listed 339,371 659,869 999,240 999,640 - 999,640
Term finance certificates - Unlisted 1,626,609 - 1,626,609 1,412,974 - 1,412,974
5,479,912 5,935,825 11,415,737 6,681,023 5,673,258 12,354,281
###
Held to maturity securities ###
###
Preference shares - Unlisted - - - 143,333 - 143,333
- - - 143,333 - 143,333

Investments at cost 5,806,942 5,935,825 11,742,767 7,947,398 10,801,487 18,748,885

Provision for diminution in value

of investments 7.3 (12,571) - (12,571) (378,780) - (378,780)

Investments - net of provisions 5,794,371 5,935,825 11,730,196 7,568,618 10,801,487 18,370,105

(Deficit) / Surplus on revaluation

of held for trading securities 7.10 (1,920) - (1,920) (126) 864 738

Surplus on revaluation of
available for sale securities 17 48,191 66,506 114,697 118,606 53,560 172,166

Total investments at market value 5,840,642 6,002,331 11,842,973 7,687,098 10,855,911 18,543,009
PAΪR INVESTMENT COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2016

2016 2015
7.2 Investments by segment Note (Rupees in '000)
Federal Government securities
- Market treasury bills 7.4 5,441,358 8,809,125
- Pakistan Investment Bonds 7.5 2,355,033 5,860,895
Units in mutual funds 800,000 300,000
Fully paid up ordinary shares
- Listed companies 265,059 686,056
- Unlisted companies - 296,860
265,059 982,916
Sukuk bonds 255,468 240,002
Term finance certificates
- Listed 999,240 999,640
- Unlisted 1,626,609 1,412,974
2,625,849 2,412,614
Unlisted Preference Shares - 143,333

Total investments at cost 11,742,767 18,748,885

Provision for diminution in value of investments 7.3 (12,571) (378,780)
Investments - net of provisions 11,730,196 18,370,105
(Deficit) / Surplus on revaluation of held for trading securities 7.10 (1,920) 738
Surplus on revaluation of available for sale securities 17 114,697 172,166
Total investments at market value 11,842,973 18,543,009

7.3 Particulars of provision held for diminution in the

value of investments

Opening balance 378,780 398,078

Charge for the year - 24,506
Reversals (366,209) (43,804)
(366,209) (19,298)
Closing balance 12,571 378,780

Particulars of provision in respect of types and segments

Available for sale securities
Shares in listed companies - 173,250
Shares in unlisted companies - 192,959
Sukuk bonds 1,326 1,326
Term finance certificates - Unlisted 11,245 11,245
12,571 378,780

7.4 Market treasury bills carry yield ranging from 5.83% to 5.96% per annum (2015: 6.39% to 6.95% per annum) with
maturities upto July 20, 2017 (2015: August 18, 2016).

7.5 The investments in Pakistan investment bonds are maturing upto July 17, 2019 and the effective yield ranges from
6.57% to 12.58%
PAΪR INVESTMENT COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2016

7.6 Quality of held for trading securities Market value Cost Long / medium Rated by
2016 2015 2016 2015 term credit
rating

(Rupees in '000) (Entity)

Unrated - Government
Market treasury bills - 4,961,019 - 4,961,038 Securities ###
Unrated - Government
Pakistan Investment Bonds 320,897 1,241,181 322,815 1,239,772 Securities ###

Number of Shares
2016 2015 Shares in listed Companies
- 40,000 Attock Refinery Limited - 8,475 - 8,558 AA PACRA
- 100,000 D.G.Khan Cement Company Limited - 14,759 - 14,725 Unrated
- 25,000 Fauji Fertilizer Company Limited - 2,950 - 2,787 Unrated
- 3,000 Engro Fertilizer Limited - 252 - 252 AA- PACRA
- 200,000 Fauji Cement Company Limited - 7,364 - 7,359 Unrated
- 100,000 Ghani Gases Limited - 2,644 - 2,900 Unrated
- 9,400 Hascol Petroleum Limited - 1,356 - 1,455 A+ JCR-VIS
- 300,000 Hum Network Limited - 3,942 - 3,956 A+ PACRA
50,000 - K-Electric Limited 468 - 440 - AA PACRA
50,000 - National Bank of Pakistan 3,745 - 3,775 - AAA PACRA
- 21,000 Oil & Gas Development Company Ltd - 2,464 - 2,449 Unrated
- 150,000 Sui Southern Gas Company Limited - 5,602 - 6,020 AA- PACRA
. 4,213
### 49,808
### 4,215 50,461 ###

7.7 Quality of available for sale securities Market value Cost Long / medium
2016 2015 2016 2015 term credit Rated by
rating
(Rupees in '000) (Entity)

Unrated - Government
Market treasury bills 5,439,003 3,851,936 5,441,358 3,848,087 Securities ###
Unrated - Government
Pakistan investment bonds 2,108,345 4,797,976 2,032,218 4,621,123 Securities ###
PAΪR INVESTMENT COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2016

Number of Certificates / Market value Cost Long / medium Rated by

Units Certificates / Units in Listed 2016 2015 2016 2015 term credit
2016 2015 Mutual Funds rating
(Rupees in '000) (Entity)

36,251,570 27,831,637 NAFA Income Opportunity Fund 400,711 310,150 400,000 300,000 A-(f) PACRA
4,583,203 - United Growth and Income Fund 402,337 - 400,000 - BBB+(f) JCR-VIS
803,048 310,150 800,000 300,000 ###

Number of Shares Market value Cost Long / medium Rated by

2016 2015 Shares in listed companies 2016 2015 2016 2015 term credit
rating
(Rupees in '000) (Entity)
340,000 340,000 Allied Bank Limited 40,531 32,048 36,796 38,677 AA+/A1+ PACRA
30,000 11 Adamjee Insurance Company Limited 2,224 1 1,696 1 AA PACRA
- 6,680,058 Agritech Limited - 62,459 - 200,402 Unrated ###
600,000 425,000 Bank Alfalah Limited 22,776 12,070 15,882 12,764 AA PACRA
45,000 - Bank Al-Habib Limited 2,655 - 1,999 - AA+ PACRA
- 50,000 DG Khan Cement Company Limited - 7,380 - 7,435 Unrated
- 100,000 Engro Polymer - 1,044 - 1,073 A- PACRA
340,000 175,000 Engro Powergen Qadripur ltd 11,818 5,982 12,210 6,942 Unrated
100,000 300,000 Fauji cement Company Limited 4,508 11,046 4,371 11,119 Unrated
- - Fauji Fertilizer Bin Qasim Limited - - - - Unrated
260,000 139,300 Fauji Fertilizer Company Limited 27,136 16,435 29,892 16,916 Unrated
10,000 - GlaxoSimthKline (Pakistan) Limited 2,333 - 2,211 - Unrated
117,500 - Ghani Gases Limited 3,082 - 2,940 - Unrated
25,000 - Gul Ahmed Textile Mills Ltd 1,279 - 1,324 - AAA JCR-VIS
54,500 - Habib Bank Limited 14,892 - 11,794 - AAA/A-1+ JCR-VIS
175,000 125,000 Habib Metropolitan Bank Limited 6,475 3,809 5,577 4,419 AA+ PACRA
- 60,000 Honda Atlas Cars (Pakistan) Limited. - 14,336 - 14,582 Unrated
30,000 312,500 Hub Power Company Limited 3,704 32,063 3,452 27,288 AA+/A1+ PACRA
1,650,000 200,000 K-Electric Limited 14,992 1,488 13,160 1,621 AA+ JCR-VIS
210,000 210,000 Kot Addu Power Company Limited 16,548 17,010 16,857 14,272 AA+ JCR-VIS
304,500 - Lalpir Power Limited 7,369 - 7,058 - Unrated
- 12,500 Lotee Chemical Pakistan Limited - 257 - 91 Unrated
35,000 40,000 MCB Bank Limited 8,324 8,674 8,176 9,960 AAA/A1+ PACRA
Subtotal 190,646 226,102 175,395 367,562
PAΪR INVESTMENT COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2016

Number of Shares Market value Cost Long / medium Rated by

2016 2015 2016 2015 2016 2015 term credit
rating
(Rupees in '000) (Entity)
Brought forward 190,646 226,102 175,395 367,562 Unrated
- 100,000 Maple Leaf Cement Factory Limited - 7,458 - 7,401 A PACRA
40,000 - Mughal Steel and Iron 3,526 - 3,984 - Unrated
130,000 228,000 National Bank of Pakistan 9,736 12,321 9,830 13,739 AAA/A-1+ JCR-VIS
- - Next Capital Limited - - - - Unrated
500,000 500,000 NIB Bank 905 950 993 993 AA- PACRA
8,000 60,000 Nishat Chunian Limited 444 2,040 449 2,607 A- JCR-VIS
- 190,000 Nishat Mills Limited - 18,025 - 21,836 AA PACRA
105,300 450,000 Oil and Gas Development Company Limited 17,411 52,803 14,892 63,056 Unrated
12,500 - Pak Gen Power Limited 335 - 323 - Unrated
20,000 - Pak Suzuki Motor Company Limited 12,256 - 10,756 - Unrated
10,000 355,400 Pakistan Petroleum Limited 1,882 43,291 1,593 56,333 Unrated
19,000 42,160 Pakistan State Oil Company Limited 8,250 13,734 7,979 15,036 AA PACRA
1,200,000 1,554,000 Pakistan Telecommunication Company Limited 20,645 25,625 23,097 34,749 Unrated
33,500 - Saif Power Limited 1,191 - 1,142
- 200,000 Sui Northern Gas Pipelines Company Limited - ` 4,808 - 6,232 AA- PACRA
- 725,000 Sui Southern Gas Company Limited - 27,079 - 29,668 AA- PACRA
- 200,000 Telecard Limited - 576 - 1,076 Unrated
- 200,000 TRG Pak Ltd - 6,930 - 7,358 Unrated
49,600 48,100 United Bank Limited 11,849 7,453 10,411 7,949 AA+/A-1+ JCR-VIS
279,076 449,195 260,844 635,595 ###

Number of Shares Book value Cost Long / medium Rated by

2016 2015 Shares in unlisted companies 2016 2015 2016 2015 term credit
rating
(Rupees in '000) (Entity)
Burj Bank Limited
CEO: Ahmed Khizer Khan ###
- 29,685,986 Percentage holding: Nil (2015: 3.63%) 7.7.1 - 103,901 - 296,860 A- JCR-VIS
###

7.7.1 During the current year the Company disposed off 29.69 million shares of Burj Bank, to AlBaraka Bank (on behalf of AlBaraka Islamic Bank (AIB)) for Rs. 4/- share, the same was
duly approved by the Board of PAIR Investment Company Limited. The offer is made as a part of scheme of amalgamation of Burj Bank into AlBaraka Bank.
PAΪR INVESTMENT COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2016

Number of Certificates of Market value Cost Long / medium Rated by

Rs. 5,000 each 2016 2015 2016 2015 term credit
2016 2015 Sukuk bonds rating
(Rupees in '000) (Entity)

30,000 30,000 Eden Housing Limited 19,680 19,680 19,680 19,680 Unrated
12,000 12,000 Sitara Peroxide Limited 22,085 30,037 23,411 31,362 Unrated
32,475 37,792 Liberty Powertech Limited 162,377 188,960 162,377 188,960 A+ PACRA
###
204,142 238,677 205,468 240,002 ###
Number of Certificates of
Rs. 1 million each
2016 2015 Sukuk bonds
50 - Pak Electron Limited 50,000 - 50,000 -

Number of Certificates of Market value Cost Long / medium Rated by

Rs. 5,000 each 2016 2015 2016 2015 term credit
2016 2015 Term Finance Certificates- Listed rating
(Rupees in '000) (Entity)
120,000 120,000 NIB Bank Limited 606,207 593,644 599,400 599,640 A+ PACRA
80,000 80,000 Soneri Bank Ltd 407,037 391,886 399,840 400,000 A+ PACRA
1,013,244 985,530 999,240 999,640

Number of Certificates of
Rs. 5,000 each
2016 2015 Term Finance Certificates- Unlisted
20,000 20,000 Bank Alfalah Limited - II 67,490 101,329 66,493 99,760 AA- PACRA
- 29,400 Engro Fertilizer Limited - IV - 146,878 - 146,617 AA PACRA
65,000 65,000 Faysal Bank Limited 163,472 331,648 162,817 324,734 AA- JCR-VIS
- 38,400 Jahangir Siddiqui & Company Ltd - 46,946 - 48,344 AA+ PACRA
6,000 6,000 Trust Investment Bank Ltd. - - 11,245 11,245 Unrated
10,000 10,000 Independent Media Corporation (Private) Limited 17,500 27,500 17,500 27,500 BBB- JCR-VIS
90,000 - JS Bank Ltd 450,000 - 450,000 - AA- PACRA
80,000 - NRSP Micro Finance Bank Ltd 300,991 - 300,000 - A JCR-VIS
40,000 40,000 Pak Electron Limited 114,286 145,238 114,286 145,238 Unrated ###
20,000 20,000 Jahangir Siddiqui & Company Ltd (3rd Issue) 70,042 86,326 70,000 86,250 AA+ PACRA
###
1,183,781 885,865 1,192,341 889,688 ###
PAΪR INVESTMENT COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2016

Number of Certificates of Market value Cost Long / medium Rated by

Rs. 1 million each 2016 2015 2016 2015 term credit
2016 2015 Term Finance Certificates- Unlisted rating
(Rupees in '000) (Entity)
300 300 Askari Bank Limited 303,891 302,216 300,935 301,064 AA- PACRA

Number of Certificates of
Rs. 50 million each
2016 2015 Term Finance Certificates- Unlisted
8 8 JDW Sugar Mills Limited - 2 133,333 222,222 133,333 222,222 A+ JCR-VIS

7.8 Quality of held to maturity securities Market value Cost Long / medium Rated by
2016 0 2015 ### 2016 ### 2015 term credit
Number of Certificates of ### ### ### rating
Rs. 2.5 each Preference shares (Rupees in '000) (Entity)
2016 2015
- 40,000,000 - 143,333 - 143,333
###
Total investments 11,842,973 18,543,009 11,742,767 18,748,885

7.9 In accordance with BSD Circular No. 1 dated October 21, 2011 issued by the SBP, the Company has availed the benefit of Forced Sales Values (FSVs) against the non-performing
investments. Had this benefit of FSV not been taken by the Company, the specific provision against impaired investment would have been higher by Rs. 24.2 million (2015: Rs. 26.195
million). Further, this amount arising from availing the benefit of FSV is not available for distribution amongst the shareholders either in the form of cash or stock dividend.
PAΪR INVESTMENT COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2016

2016 2015
7.10 Unrealised (loss) / gain on revaluation of Note (Rupees in '000)
investments classified as held for trading - net

Market treasury bills - (19)

Pakistan investment bonds (1,918) 1,409
Shares of listed companies (2) (652)
(1,920) 738

8 ADVANCES
In Pakistan
Loans, cash credits, finances etc. 8.2 6,127,766 4,346,407
Net investment in finance lease 8.3 129,748 64,069
6,257,514 4,410,476
Bill discounted and purchased (excluding treasury bills) 24,718 -
Advances - gross 6,282,232 4,410,476

Provision against non-performing loans and advances 8.4 (857,881) (907,528)

Advances - net of provision 5,424,351 3,502,948

8.1 Particulars of advances - gross

In local currency 8.1.1 6,282,232 4,410,476

In foreign currencies - -
6,282,232 4,410,476

8.1.1 Short-term (upto one year) 1,943,056 1,986,003

Long-term (over one year) 4,339,176 2,424,473
6,282,232 4,410,476

8.2 These include personal loans and house loans advanced to employees in accordance with their terms of
employment. These personal loans and house loans carry mark-up at the rates of 3% and 5% (2015: 3% and 5%)
respectively.
8.3 Net investment in finance lease
2016 2015
Not later Later than Later than Total Not later Later than Later than Total
than one one and five than one one and five
Description year less than years year less than years
five years five years
(Rupees in '000)
Lease rentals receivable 41,431
### 91,036 - 132,467 9,718 63,078 - 72,796
Guaranteed residual value ###
- 19,839 19,839 - 9,869 9,869
41,431 110,875 - 152,306 9,718 72,947 - 82,665
Finance charge for future
periods (10,383)
### (12,175) - (22,558) (5,969) (12,627) - (18,596)
Present value of minimum
lease payments 31,048 98,700 - 129,748 3,749 60,320 - 64,069

8.3.1 The Company’s implicit rate of return on leases ranges between 8.39% and 13.37% (2015: 11% and 13.37%) per
annum. These are secured against leased assets and security deposits generally upto 20% (2015: 20%) of the cost of
leased assets.
8.3.2 Lease rentals received during the year aggregate to Rs. 22.648 million (2015: Rs. 1.340 million).
PAΪR INVESTMENT COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2016

8.4 Advances include Rs. 1,168.33 million (2015: Rs. 1,300.08 million) which has been placed under non-
performing status as detailed below:
2016
Non-performing advances Provision required and held
Domestic Overseas Total Domestic Overseas Total
(Rupees in '000)
Category of classification

Other assets especially

mentioned - - - - - -
Substandard 204,672 - 204,672 35,289 - 35,289
Doubtful - - - - - -
Loss 963,666 - 963,666 822,592 - 822,592
1,168,338 - 1,168,338 857,881 - 857,881

2015
Non-performing advances Provision required and held
Domestic Overseas Total Domestic Overseas Total
(Rupees in '000)
Category of classification

Other assets especially

mentioned - - - - - -
Substandard 236,481 - 236,481 32,999 - 32,999
Doubtful 8,904 - 8,904 8,904 - 8,904
Loss 1,054,693 - 1,054,693 865,625 - 865,625
1,300,078 - 1,300,078 907,528 - 907,528

8.5 Particulars of provision against non-performing advances - in local currency

2016 2015
Specific General Total Specific General Total
(Rupees in '000)

Opening balance 907,528 - 907,528 871,281 - 871,281

Charge for the year 58,235 - 58,235 37,308 - 37,308

Reversals (107,882) - (107,882) (1,061) - (1,061)
(49,647) - (49,647) 36,247 - 36,247
Amounts written off - - - - - -
Closing balance 857,881 - 857,881 907,528 - 907,528

8.5.1 Particulars of provision against non-performing advances

2016 2015
Specific General Total Specific General Total
(Rupees in '000)

In local currency 857,881 - 857,881 907,528 - 907,528

8.6 In accordance with BSD Circular No. 1 dated October 21, 2011 issued by the SBP, the Company has availed
the benefit of Forced Sales Value (FSV) against the non-performing advances. Had this benefit of FSV not been
taken by the Company, the specific provision against non-performing advances would have been higher by Rs.
156.95 million (2015: Rs. 215.19 million). Further, this amount arising from availing the benefit of FSV is not
available for distribution amongst the shareholders either in the form of cash or stock dividend.
PAΪR INVESTMENT COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2016

8.7 The SBP has allowed specific relaxation to the Company for non-classification of overdue loans to ASG Metals
(Private) Limited and its associated companies till September 30, 2017. Had that relaxation not provided, the
amount of non-performing loans and provision would have been higher by Rs. 546.67 million and markup
income of Rs. 117.13 million would have been recorded in suspended account.

8.8 Particulars of loans and advances to directors, executives, associated companies etc.
Debts due by executives or officers of the Company or any of them either severally or jointly with any other persons.
Note 2016 2015
(Rupees in '000)

Balance at beginning of the year 43,904 34,921

Loans granted during the year 5,718 25,681
Repayments during the year (5,004) (16,698)
Balance at end of the year 44,618 43,904

9 OPERATING FIXED ASSETS

Capital work-in-progress 9.1 154,343 154,343

Property and equipment 9.2 22,365 36,457
Intangible asset 9.3 274 511
176,982 191,311

9.1 This represents office building situated at The Ocean Mall, Clifton, Karachi purchased by the Company to
transfer its registered and principal office.

9.2 Property and equipment

Cost Accumulated depreciation

N et book Rate of
At Additions As at At Charge/ At value at depreciatio
January / December January (disposa December December n
1, 2016 (disposal) 31, 2016 1, 2016 l) 31, 2016 31, 2016 (%)
Rupees in '000

Furniture and fixtures 35,100 323 35,423 28,548 2,910 31,458 3,965 20%
Electrical, office and 35,116 626 35,594 28,328 3,233 31,496 4,098 20% to
computer equipment (148) (65)

Vehicles 37,406 - 37,406 14,290 8,814 23,104 14,302 25%

2016 107,622 949 108,423 71,166 14,957 86,058 22,365
(148) - (65)
2015 107,137 2,743 107,622 52,610 20,655 71,166 36,457
(2,258) - (2,099)

9.3 Intangible assets

Cost Accumulated depreciation

N et book Rate of
At Additions As at At Charge/ At value at ammortizat
January / December January (disposa December December ion
1, 2016 (Disposal) 31, 2016 1, 2016 l) 31, 2016 31, 2016 (%)
Rupees in '000

Computer software

2016 18,673 51 18,724 18,162 288 18,450 274 33%

2015 18,550 122 18,673 17,068 1,094 18,162 511 33%

PAΪR INVESTMENT COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2016

8.6.1 The SBP has allowed specific relaxation to the Bank for non-classification of overdue loans of ASG Metals (Private) Limited and its
associated companies till September 30, 2017. Had that relaxation not provided, the amount of non-performing loans and provision
would have been higher by Rs. 546.67 million and markup income of Rs. 117.13 million would have been recorded in suspended
account.
8.7 Particulars of loans and advances to directors, executives, associated companies etc.
Debts due by executives or officers of the Company or any of them either severally or jointly with any other persons.

Note 2016 2015

(Rupees in '000)

Balance at beginning of the year 43,904 34,921

Loans granted during the year 5,718 25,681
Repayments during the year (5,004) (16,698)
Balance at end of the year 44,618 43,904

9 OPERATING FIXED ASSETS

Capital work-in-progress 9.1 154,343 154,343

Property and equipment 9.2 22,365 36,457
Intangible asset 9.3 274 511
176,982 191,311

9.1 This represents office building situated at The Ocean Mall, Clifton, Karachi purchased by the Company to transfer its registered and
principal office.

9.2 Property and equipment

Cost Accumulated depreciation

Net book
Rate of
At As at At At value at
Additions/ Charge/ depreciation
January December January December December
(disposal) (disposal) (%)
1, 2016 31, 2016 1, 2016 31, 2016 31, 2016

Rupees in '000

Furniture and fixtures 35,100 323 35,423 28,548 2,910 31,458 3,965 20%
Electrical, office and 20% to 25%
35,116 626 35,594 28,328 3,233 31,496 4,098
computer equipment (148) (65)

Vehicles 37,406 - 37,406 14,290 8,814 23,104 14,302 25%

2016 107,622 949 108,423 71,166 14,957 86,058 22,365
(148) - (65)
2015 107,137 2,743 107,622 52,610 20,655 71,166 36,457
(2,258) - (2,099)

9.3 Intangible assets

Cost Accumulated depreciation

Net book Rate of
At As at At At value at ammortizati
Additions/ Charge/
January December January December December on
(Disposal) (disposal)
1, 2016 31, 2016 1, 2016 31, 2016 31, 2016 (%)
Rupees in '000

Computer software

2016 18,673 51 18,724 18,162 288 18,450 274 33%

### 2015 18,550 122 18,673 17,068 1,094 18,162 511 33%
PAΪR INVESTMENT COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2016

2016 2015
10 DEFERRED TAX ASSET - NET (Rupees in '000)
Deferred tax asset - net 238,128 259,691
The balance of deferred taxation comprises
Debit / (credit) balances arising on account of:
Surplus on revaluation of assets (31,024) (42,301)
Accelerated tax depreciation allowance (381) (6,945)
Provision for gratuity, LFA and leave encashment (306) 632
Provision against non - performing loans 265,942 290,008
Provision against investments 3,897 18,297
238,128 259,691

10.1 Movement in temporary differences during the year

Balance at Recognized Recognized Balance at

January in profit in equity December
01, 2016 & loss 31, 2016
----------------------------(Rupees in '000)----------------------------
Debit / (Credit) balances arising
on account of:
(Deficit) / surplus on revaluation of assets (42,301) 593 10,684 (31,024)
Accelerated tax depreciation allowance (6,945) 6,564 - (381)
Provision for gratuity, LFA & leave encashment 632 (949) 11 (306)
Provision against non performing loans 290,008 (24,066) - 265,942
Provision against investments 18,297 (14,400) - 3,897
259,691 (32,258) 10,695 238,128

Balance at Recognized Recognized Balance at

January in profit in equity December
01, 2015 & loss 31, 2015
------------------------------(Rupees in '000)------------------------------
Debit / (Credit) balances arising
on account of:
(Deficit) / surplus on revaluation of assets (45,035) 451 2,283 (42,301)
Accelerated tax depreciation allowance 6,809 (13,754) - (6,945)
Provision for gratuity, LFA & leave encashment 6,706 (6,074) - 632
Provision against non performing loans 287,523 2,485 - 290,008
Provision against investments 16,917 1,380 - 18,297
272,920 (15,512) 2,283 259,691

Note 2016 ### 2015

11 OTHER ASSETS (Rupees in '000)
Income / mark-up accrued in local currency 281,187 435,767
Advances, deposits, advance rent and other prepayments 23,141 19,345
Dividend receivable 1,054 435
Receivable from defined benefit plan 31.4 986 -
Security deposits 7,231 7,231
Non-banking asset acquired in satisfaction of claims 11.1 105,450 -
419,049 462,778
11.1 This represents property against which debt previously fully provided aggregating to Rs. 172.31 million (including
mark up of Rs. 75.87 million) was assigned / novated in accordance with the 'Debt Property Swap / Settlement
Agreement' with the borrower. The remaining unassigned debt of Rs. 66.86 million represents fully provided markup
and has been restructured as debt payable in 7 years at 0% markup in 16 equal quarterly installments after the expiry
of moratorium period of 3 years. The property acquired in satisfaction of claims has been evaluated based on the
valuation reports from valuers on Pakistan Banks Association's list of approved valuers.
PAΪR INVESTMENT COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2016

Note 2016 2015

12 BORROWINGS (Rupees in '000)
In Pakistan (local currency) 12.1 6,549,981 11,652,435

12.1 Details of borrowings secured / unsecured

Secured
Borrowings from State Bank of Pakistan- Under financing facility
-for Storage of Agricultural Produce (FFSAP) 12.2 9,870 16,446
-for Imported & Locally Manufactured Plant & Machinery (LTFF) 12.3 273,150 273,150
Repurchase agreement borrowings 12.4 5,187,461 10,425,339
Term borrowings 12.5 562,500 937,500
6,032,981 11,652,435
Unsecured
Call borrowings 517,000 -
6,549,981 11,652,435

12.2 The Company has entered into agreement with the SBP for extending Financing Facility for Storage of Agricultural
Produce (FFSAP). The borrowing carries mark-up rate of 4.5% (2015: 6.5%). The borrowing will mature in
November 2019.

12.3 The Company has entered into agreement with the SBP for extending Long Term Financing Facility (LTFF) for
Imported & Locally Manufactured Plant & Machinery. The borrowing carries mark-up rate of 3.5% per annum
(2015: 3.5%). The borrowing will mature in November 2023.

12.4 These carry mark-up at the rates ranging from 5.9% to 6.2% per annum (2015: 6.40% to 6.55%) and are secured
against government securities having carrying amount of Rs. 5.26 billion (2015: Rs. 10.8 billion). These borrowings
will mature up to January 2017 (2015: February 2016).

12.5 These represent finances obtained from Allied Bank Limited to finance regular business operations of the Company.
These finances is secured by pledge of listed and unlisted Term finance certificates. It carries mark up at the rate of 6
months KIBOR + 0.5% per annum. These are repayable in semi annual installments and shall be repaid by 2019.

Note 2016 ### 2015

13 DEPOSITS AND OTHER ACCOUNTS (Rupees in '000)
Customers
Term Deposits - Remunerative 13.2 1,254,468 240,362
Term Deposits - Non-Remunerative 13.3 260 140
Financial Institutions
Term Deposits - Remunerative 13.4 825,000 1,650,000
2,079,728 1,890,502
13.1 Particulars of deposits
In local currency 2,079,728 1,890,502
In foreign currencies - -
2,079,728 1,890,502

13.2 The mark-up rates on these certificate of investments (COI) range between 6.2% to 7% per annum (2015: 6.8% to
7.5% per annum). These COIs will mature up to December 2017 (2015: March 2016).

13.3 These include non-interest bearing certificate of investments (COI) issued to employees of the Company maturing
up to December 2017 (2015: November 2016).

13.4 The mark-up rates on these certificate of investments (COI) range between 6.25% to 6.40% per annum (2015: 6.8%
to 7.5% per annum). These COIs will mature up to December 2017 (2015: March 2016).
PAΪR INVESTMENT COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2016

Note 2016 ### 2015

14 OTHER LIABILITIES (Rupees in '000)
Mark-up / return / interest payable in local currency 40,966 80,403
Accrued expenses 8,932 11,950
Provision for taxation - net 89,387 108,199
Dividend payable 300,000 150,000
Payable Brokerage/NCCPL 179 57,815
Payable to defined benefit plan 31.4 - 1,307
Payable to an associated undertaking 4,900 4,900
Government levies payable 3,243 2,864
Provision for compensated absences - 1,321
Provison for audit fee 1,495 1,357
Advance insurance premium on lease 265 41
Security deposits against finance lease 23,102 9,869
Provision for staff rewards 46,334 54,836
518,803 484,862
###
15 SHARE CAPITAL ###
###
15.1 Authorised capital
2016 ### 2015 2016 ### 2015
(Number of shares) (Rupees in '000)

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

15.2 Issued, subscribed and paid-up share capital

600,000,000 600,000,000 Ordinary shares of Rs. 10 each 6,000,000 6,000,000

600,000,000 600,000,000 Fully paid in cash 6,000,000 6,000,000

15.3 Major shareholders (holding more than 5% of total paid-up capital)

2016 2015
Number of Percentage Number of Percentage of
shares held of shares held shareholding
shareholding
Name of shareholder
Government of Pakistan * 300,000,000 50% 300,000,000 50%
Iran Foreign Investment Company * 300,000,000 50% 300,000,000 50%
600,000,000 100% 600,000,000 100%

* This includes nominal shares allotted to the nominee Directors of the Company nominated by Government of
Pakistan and Iran Foreign Investment Company.

2016 ### 2015

16 RESERVES (Rupees in '000)
Statutory reserve
Opening balance 673,449 553,966
Transfer during the year 120,658 119,483
Closing balance 794,107 673,449

16.1 According to BPD Circular No. 15 dated 31 May 2004 issued by SBP, an amount not less than 20% of the after tax
profits shall be transferred to create a reserve fund till such time the reserve fund equals the amount of the paid-up
capital and after that a sum not less than 5% of profit after tax shall be credited to the statutory reserve.
PAΪR INVESTMENT COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2016

2016 ### 2015

17 SURPLUS ON REVALUATION OF ASSETS - (Rupees in '000)
NET OF DEFERRED TAX
On revaluation of available-for-sale securities- net of deferred tax
Surplus arising on revaluation of quoted equity shares 18,232 (13,148)
Surplus arising on revaluation of mutual funds 3,048 10,150
(Deficit) / surplus arising on revaluation of market treasury bills (2,355) 3,849
Surplus arising on revaluation of term finance certificate 19,645 (5,538)
Surplus arising on revaluation of Pakistan investment bond 76,127 176,853
114,697 172,166
Related deferred tax (liability) (31,619) (42,303)
83,078 129,863

18 CONTINGENCIES AND COMMITMENTS

18.1 The income tax department has amended the assessments for the tax years 2009 to 2015, which resulted in additional
liability of Rs 194.698 million in respect of Workers' Welfare Fund (WWF), allocation of Interest expenses against
capital gains which are exempt and dividend income which is subject to tax at reduced rate etc.
For tax years 2009 to 2013, the Company has filed appeals before the Appellate Tribunal Inland Revenue (ATIR)
against the orders passed by Commissioner Inland Revenue and confirmed by Commissioner (Appeals), which are
pending for hearing. The management of the Company is confident that outcome of the appeals will be in favor of
the Company.
The ATIR has passed the orders for Tax Year 2014 and 2015 in which it has deleted the demand raised on account
of allocation of mark-up expenses to capital gain and dividend income and directed the department to work out the
liability of WWF in the light of the Supreme Court's order. Further ATIR has also remanded back certain issues for
re-adjudication. However, the income tax department may file reference before High Court on the orders passed by
ATIR.
2016 ### 2015
18.2 Commitments in respect of repo transactions (Rupees in '000)
Repurchase agreement borrowings - 106,732
18.3 Direct credit substitutes 222,392 -
18.4 Commitments to extend credit ###
The Company makes commitments to extend credit in the normal course of its business but these being revocable
commitments do not attract any significant penalty or expense if the facility is unilaterally withdrawn.

19 OFF BALANCE SHEET FINANCIAL INSTRUMENTS

Off balance sheet financial instruments referred to as derivatives, contracts the characteristics of which are derived
from those of underlying assets. These include forwards and swaps in money and foreign exchange markets. The
Company's exposure in these instruments represents equity futures. The Company also enters into repo transactions
against government securities carrying fixed interest rates and having fixed contractual maturities. The credit risk
associated with repo transactions is secured through underlying government securities.

20 DERIVATIVE INSTRUMENTS
The Company at present does not offer structured derivative products such as interest rate swaps, forward rate
swaps, forward rate agreements or forward exchange options. However, the Company treasury and investment group
buy and sell derivative instruments such as equity futures.

20.1 Equity futures

An equity futures contract is a standardized contract, traded on a futures counter of the stock exchange, to buy or sell
a certain underlying scrip at a certain date in the future, at a specified price.
The Company uses equity futures as a hedging instrument to hedge its equity portfolio against equity price risk. Only
selected shares are allowed to be traded on futures exchange. Equity futures give flexibility to the Company either to
take delivery on the future settlement date or to settle it by adjusting the notional value of the contract based on the
current market rates.

Maximum exposure limit to the equity futures is 10% of tier 1 capital of the Company, based on prevailing SBP
regulations.
PAΪR INVESTMENT COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARexposure
Maximum ENDEDlimit
DECEMBER 31,futures
to the equity 2016 is 10% of tier 1 capital of the Company, based on prevailing SBP
regulations.

2016 2015
21 MARK-UP/RETURN/INTEREST EARNED (Rupees in '000)
###
On loans and advances to
- customers 325,972 362,930
- employees 2,082 1,788
On investments in
- held-for-trading securities 59,819 5,355
- available-for-sale securities 832,484 1,112,481
- held-to-maturity securities 3,067 17,403
On deposits with financial institutions 11,839 8,473
On placements 8,431 1,244
1,243,694 1,509,674

22 MARK-UP/RETURN/INTEREST EXPENSED
Deposits and other accounts 104,276 110,994
Securities sold under repurchase agreements 363,959 414,725
On borrowing from State Bank of Pakistan- Under financing facility Clean
-for Storage of Agricultural Produce (FFSAP) 557 936
-for Imported & Locally Manufactured Plant & Machinery (LTFF) 5,493 584
Other short-term borrowings 7,996 -
Long term borrowings 50,993 99,886
533,274 627,125

23 GAIN ON SALE OF SECURITIES - NET

Market treasury bills 1,126 230
Ordinary shares in companies (196,919) 57,318
Units of mutual funds 33,504 25,737
Term finance certificates 370 15,737
Pakistan investment bonds 166,832 214,545
4,913 313,567

24 OTHER INCOME
This represents gain on sale of operating fixed assets amounting to Rs. 0.005 million ( 2015: Rs 0.828 million)

Note 2016 2015

(Rupees in '000)
25 ADMINISTRATIVE EXPENSES
Salaries, allowances and benefits 187,654 176,176
Charge for defined benefit plan 8,499 9,600
Contribution to defined contribution plan 9,216 7,850
Non-executive Directors' fee 2,182 1,830
Rent and utilities 26,473 23,753
Repairs and maintenance 7,089 10,792
Insurance 4,703 3,905
Communication 3,764 3,372
Advertisement 468 1,129
Depreciation 9.2 14,957 20,655
Amortisation 9.3 288 1,094
Printing and stationery 1,706 888
Legal and professional charges 12,167 3,168
Travelling, conveyance and entertainment 22,176 20,641
Brokerage and commissions 3,223 6,084
Bank charges 452 729
Balance carried forward 305,017 291,666
PAΪR INVESTMENT COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2016

Note 2016 2015

(Rupees in '000)
Balance brought forward 305,017 291,666
Fee and subscriptions 8,275 6,373
Auditors' remuneration 25.1 1,436 1,426
Donations and charity 25.2 774 415
Others 2,646 2,303
318,148 302,183

25.1 Auditors' remuneration

Audit fee 518 518
Half yearly review 204 204
Special certifications and others 583 583
Out of pocket expenses 131 121
1,436 1,426

25.2 Donations and charity

None of the directors, executives or their spouses had any interest in the donee. Detail of donations made during the
year is as follows:
2016 2015
(Rupees in '000)
Rotary Club 150 -
Special Olympics 200 -
Patient Aid Foundation 100 -
Inner Wheel Club 24 -
Kidney Center 300 -
Sharmeen Khan Memorial Foundation - 200
Institute of Business Administration - 215
774 415

26 OTHER CHARGES/ (REVERSALS) - NET

This represents penalties imposed by State Bank of Pakistan amounting to Rs 0.279 million (2015: Rs 0.154
million)
2016 2015
27 TAXATION (Rupees in '000)

Current 214,558 267,480

Prior year 10,984 42,925
Deferred 32,258 15,512
257,800 325,917
27.1 Relationship between tax expense and accounting profit
Profit before tax 861,091 923,331

Tax on income @ 31% (2015: 32%) 265,295 295,466

Net tax effect on income taxed at reduced rates (20,075) (11,144)
Net tax effect on income subject to FTR (9,318) (2,765)
Net tax effect of income / expenses not subject to tax (21,727) (5,788)
Tax effect of expenses that are not
deductible in determining taxable profit (4,766) (18,297)
Effect of change in rate of tax 9,322 8,270
Prior years charge -
Others (4,173) 1,738
Tax charge 214,558 267,480
PAΪR INVESTMENT COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2016

2016 2015
(Rupees in '000)
28 BASIC / DILUTED EARNINGS

Profit after taxation for the year 603,291 597,414

(Number of shares in '000)
Weighted average number of ordinary shares
outstanding during the year 600,000 600,000
(Rupees per share)
Basic / diluted earnings 1.01 1.00

Note 2016 2015

29 CASH AND CASH EQUIVALENTS (Rupees in '000)

Cash and balances with treasury banks 5 64,205 46,114

Balances with other banks 6 432,783 215,426
496,988 261,540

2016 2015
30 STAFF STRENGTH (Number of employees)

Permanent 45 47
Contractual 2 1
Company's own staff strength at the end of the year 47 48
Outsourced 7 8
Total staff strength 54 56

31 DEFINED BENEFIT PLAN

31.1 General description

As mentioned in note 4.19, the Company operates an approved funded gratuity scheme for all its permanent
employees. The benefits under the gratuity scheme are payable on retirement at the age of 60 or earlier cessation of
service, in lump sum. The benefit is equal to one month's last drawn salary for each year of eligible service or part
thereof, subject to a minimum of two years of service.

31.2 Principal actuarial assumptions

The actuarial valuation was carried out as at 31 December 2016 using the "Projected Unit Credit Actuarial Cost
Method". The information provided in notes 31.3 to 31.14 has been obtained from the actuarial valuation carried out
as at 31 December 2016.

31.3 Actuarial Assumptions 2016 2015

Financial Assumptions
Discount rate 8.00% 9.00%
Expected rate of increase in salaries 7.00% 8.00%
Demographic Assumptions
Mortality rates (for death in service) SLIC (2001-05)-1
Rates of employee turnover "moderate" "moderate"

2016 2015
(Rupees in '000)
31.4 Reconciliation of amount payable to defined benefit obligation
Present value of defined benefit obligation 31,920 25,727
Fair value of any assets (32,906) (24,420)
PAΪR INVESTMENT COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2016
(Surplus) / deficit (986) 1,307

2016 2015
(Rupees in '000)

31.5 Movement in (receivable) / payable to defined benefit plan

Balance Sheet accrued as at the beginning of the year 1,307 18,106
Expense charged in the current period 8,499 9,196
Company's contribution to gratuity fund (10,600) (24,420)
Benefits paid to outgoing members by the company (228) (3,545)
Remeasurements recognized in OCI during the year 36 1,970
Balance Sheet (prepaid)/accrued as at the end of the year (986) 1,307

31.6 Charge for defined benefit plan

Cost recognised in profi and loss account for the year
Current service cost 8,386 6,841
Net interest cost
- Interest cost on defined benefit obligation 2,595 2,355
- Interest income on plan assets (2,482) -
113 2,355
8,499 9,196
Re-measurements recognised in OCI during the year
Actuarial (gain) / loss on obligation (708) 1,970
Actuarial loss on assets 744 -
36 1,970
Total defined benefit cost recognized in profit and loss
and OCI 8,535 11,166

31.7 Reconciliation of present value of defined benefit obligation

Opening balance of defined benefit obligation 25,727 18,106
Current service cost 8,386 6,841
Interest cost 2,595 2,355
Benefits paid during the year to outgoing members by the Company (228) (3,545)
Benefits paid during the year to outgoing members by the fund (3,852) -
Remeasurements: Actuarial (gain) / during the year (708) 1,970
Closing balance of defined benefit obligation 31,920 25,727

31.8 Reconciliation of fair value of plan assets

Opening fair value of plan assets 24,420 -
Expected return on plan assets during the year 2,482 -
Actual contribution made by the Company 10,600 24,420
Actual benefits paid during the year (3,852) -
Remeasurements: Actuarial (loss) on plan assets (744) -
Closing fair value of plan assets 32,906 24,420

Actual return on plan assets is 9.5% as at December 31, 2016.

2016 2015
(Rupees in '000)
31.9 Remeasurements recognized in other comprehensive income,
expense/ (income) during the year

Remeasurements: Actuarial loss / (gain)on obligation:

(Gain) / Loss due to change in financial assumptions (99) 909
(Gain) / Loss due to change in demographic assumptions - -
(Gain) / Loss due to change in experience adjustments (609) 1,061
Total actuarial loss / (gain) on obligation carried forward (708) 1,970
PAΪR INVESTMENT COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2016

2016 2015
(Rupees in '000)
Total actuarial loss / (gain) on obligation brought forward (708) 1,970

Remeasurements: Actuarial gain/ (loss) on assets:

Actual net return on plan assets 1,502 -
Less: Interest income on plan assets 2,482 -
980 -
Opening difference 236 -
Net return on plan assets 744 -

Total Remeasurements recognized in OCI during the year 36 1,970

31.10 Disaggregation of fair value of plan assets

Quoted:
Cash and cash equivalents- after adjusting for current liabilities 819 24,420
Debt instruments 28,622 -
29,441 24,420
Unquoted:
Debt instruments 3,465 -
Total (Quoted and Unquoted) 32,906 24,420

2016 2015
31.11 Maturity profile of defined benefit obligation Years Years

Weighted average duration of the present value of defined benefit obligation 8.44 9.37

2016 2015
Benefit Payments (Rupees in '000)
Distribution of timing of benefit payments
Years
1 1,491 2,040
2 14,770 9,449
3 2,396 3,196
4 2,108 2,697
5 2,338 2,447
6-10 18,571 15,949

31.12 Sensitivity analysis on significant actuarial assumptions: Actuarial liability

Base
Discount rate +0.5% 30,620 24,566
Discount rate -0.5% 33,318 26,982
Future salary increases +0.5% 33,363 27,051
Future salary increases -0.5% 30,567 24,493

32 DEFINED CONTRIBUTION PLAN

The Company operates an approved provident fund scheme for all its permanent employees to which both the
Company and employees contribute at 10% of basic salary in equal monthly contributions.

2016 2015
(Rupees in '000)
Contribution from the Company during the year 9,216 7,850
Contribution from the employees during the year 9,216 7,850
PAΪR INVESTMENT COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2016
Employees covered under the plan 47 48
PAΪR INVESTMENT COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2016

33 COMPENSATION OF DIRECTORS AND EXECUTIVES

Managing Director /
Chief Executive Director Executives
Officer
2016 2015 2016 2015 2016 2015
-------------------------------- (Rupees in '000) --------------------------------

Fees - - 2,182 1,830 - -

Managerial remuneration 26,222 28,405 - - 47,630 37,875
Contribution to defined -
-
contribution plan 2,622 3,027 - 5,313 3,441
Rent and house maintenance 19,052 - - - 19,052 15,150
Utilities 1,272 1,152 - - 4,763 3,788
Medical 374 - - - 5,954 4,890
Others 28,787 15,348 - - 41,188 31,607
78,329 47,932 2,182 1,830 123,900 96,751

Number of persons 1 1 *7 *7 *28 *25

The Managing Director / Chief Executive Officer is provided with free use of the Company maintained cars. All non-
executive directors are given traveling allowance of Euro 5,000 per meeting for attending the board meeting held during
the year.
*This also includes outgoing directors / executives during the year.

34 FAIR VALUE OF FINANCIAL INSTRUMENTS

34.1 On balance sheet financial instruments

2016 2015
Book value Fair value Book value Fair value
------------------------(Rupees in '000)------------------------
Assets
Cash and balances with treasury banks 64,205 64,205 46,114 46,114

Balances with other banks 432,783 432,783 215,426 215,426

Lendings to financial institutions - - - -
Investments 11,742,767 11,842,973 18,748,885 18,543,009
Advances 6,282,232 5,424,351 6,282,232 3,502,948
Other assets 283,227 283,227 462,778 462,778
18,805,214 18,047,539 25,755,435 22,770,275

Borrowings from financial institutions 6,549,981 6,549,981 11,652,435 11,652,435

Government securities
Sukuk Bonds (other than government)
Listed securities

In the opinion of the management, the fair value of the remaining financial assets and liabilities is not significantly
different from their carrying values.
PAΪR INVESTMENT COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2016

33 COMPENSATION OF DIRECTORS AND EXECUTIVES

Managing Director /
Chief Executive Director Executives
Officer
2016 2015 2016 2015 2016 2015
--------------------------------------(Rupees in '000) -------------------------------------

Fees - - 2,182 1,830 - -

Managerial remuneration 26,222 28,405 - - 47,630 37,875
Contribution to defined -
-
contribution plan 2,622 3,027 - 5,313 3,441
Rent and house maintenance 19,052 - - - 19,052 15,150
Utilities 1,272 1,152 - - 4,763 3,788
Medical 374 - - - 5,954 4,890
Others 28,787 15,348 - - 41,188 31,607
78,329 47,932 2,182 1,830 123,900 96,751

Number of persons 1 1 *7 *7 *28 *25

The Managing Director / Chief Executive Officer is provided with free use of the Company maintained cars. All non-
executive directors are given traveling allowance of Euro 5,000 per meeting for attending the board meeting held during
the year.
*This also includes outgoing directors / executives during the year.

34 FAIR VALUE OF FINANCIAL INSTRUMENTS

34.1 On balance sheet financial instruments

2016 2015
Book value Fair value Book value Fair value
------------------------(Rupees in '000)------------------------
Assets
Cash and balances with treasury banks 64,205 64,205 46,114 46,114
Balances with other banks 432,783 432,783 215,426 215,426
Lendings to financial institutions - - - -
Investments 11,730,196 11,842,973 18,370,105 18,543,009
Advances 5,424,351 5,424,351 6,282,232 3,502,948
Other assets 289,472 289,472 443,433 443,433
17,941,007 18,053,784 25,357,310 22,750,930

Liabilities
Borrowings from financial institutions 6,549,981 6,549,981 11,652,435 11,652,435
Deposits and other accounts 2,079,728 2,079,728 1,890,502 1,890,502
Other liabilities 401,311 401,311 362,532 362,532
9,031,020 9,031,020 13,905,469 13,905,469

Off-balance sheet financial instruments - - - -

Fair value is the amount for which an asset could be exchanged, or a liability settled, between knowledgeable willing
parties in an arm's length transaction. Fair value of financial instruments is based on:
Government securities PKRV rates (Reuters page)
Term finance certificates and sukuk bonds (other than government) MUFAP rates
Listed securities Market rates
In the opinion of the management, the fair value of the remaining financial assets and liabilities is not significantly
different from their carrying values.
PAΪR INVESTMENT COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2016

34.2 The table below analyses financial instruments measured at the end of the reporting period by the level in the fair value hirearchy into which the fair value measured is categorised.

On balance sheet financial instruments

2016
Book value Fair value
Other
Held for Available Held-to- Loans and
financial Total Level 1 Level 2 Level 3 Total
trading for sale maturity receivables
liabilities
-----------------------------------------------------------------------------(Rupees in '000)-----------------------------------------------------------------------------
Financial assets measured at fair value

Investments
Market treasury bills - 5,441,358 - - - 5,441,358 - 5,441,358 - 5,441,358
Pakistan Investment Bonds 322,815 2,032,218 - - - 2,355,033 - 2,429,242 - 2,429,242
Units of mutual funds - 800,000 - - - 800,000 803,048 - - 803,048
Shares in listed companies 4,215 260,844 - - - 265,059 283,289 - - 283,289
Term finance certificates - Listed - 999,240 - - - 999,240 - 1,013,244 - 1,013,244

Financial assets not measured at fair value

Cash and balances with treasury banks - - - 64,205 - 64,205 - - - -

Balances with other banks - - - 432,783 - 432,783 - - - -
Investments - - - - -
Shares in unlisted companies - - - - - - - - - -
Sukuk bonds - 254,142 - - - 254,142 - - - -
Term finance certificates - Unlisted - 1,615,364 - - - 1,615,364 - - - -
Advances - - - 5,424,351 - 5,424,351 - - - -
Other assets - - - 313,599 - 313,599 - - - -

Financial liabilities not measured at fair

value
Borrowings (6,549,981) (6,549,981) - - - -
Deposits and other accounts (2,079,728) (2,079,728) - - - -
Other liabilities (518,803) (518,803) - - - -
327,030 11,403,166 - 6,234,938 (9,148,512) 8,816,622
### 1,086,337 8,883,844 - 9,970,181
PAΪR INVESTMENT COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2016

2015
Book value Fair value
Other
Held for Available for Held-to- Loans and
financial Total Level 1 Level 2 Level 3 Total
trading sale maturity receivables
liabilities
-----------------------------------------------------------------------------(Rupees in '000)-----------------------------------------------------------------------------
Financial assets measured at fair value
Investments
Market treasury bills 4,961,038 3,848,087 - - - 8,809,125 - 8,812,955 - 8,812,955
Pakistan Investment Bonds 1,239,772 4,621,123 - - - 5,860,895 - 6,039,157 - 6,039,157
Units of mutual funds - 300,000 - - - 300,000 310,150 - - 310,150
Shares in listed companies 50,461 462,345 - - - 512,806 499,003 - - 499,003
Term finance certificates - Listed - 999,640 - - - 999,640 - 985,530 - 985,530

Financial assets not measured at fair value

Cash and balances with treasury banks - - - 46,114 - 46,114 - - - -
Balances with other banks - - - 215,426 - 215,426 - - - -
Investments - - - - - -
Shares in unlisted companies - 103,901 - - - 103,901 - - - -
Preference shares - Unlisted - 143,333 - - - 143,333 - - - -
Sukuk bonds - 238,676 - - - 238,676 - - - -
Term finance certificates - Unlisted - 1,401,729 - - - 1,401,729 - - - -
Advances - - - 3,502,948 - 3,502,948 - - - -
Other assets - - - 462,778 - 462,778 - - - -

Financial liabilities not measured at fair value

Borrowings - - - - (11,652,435) (11,652,435) - - - -

Deposits and other accounts - - - - (1,890,502) (1,890,502) - - - -
Other liabilities - - - - (484,862) (484,862) - - - -
6,251,271 12,118,834 - 4,227,266 (14,027,799) 8,569,572
### 809,153 15,837,642 - 16,646,795

The Company measures fair values using the following 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 that quoted prices included within Level 1 that are observable for the asset or liability either directly (i.e. as prices) or indirectly (i.e.
derived from prices).
LEVEL 3: Fair value measurements using inputs for the assets or liability that are not based on observable market data (i.e. unobservable inputs)
PAΪR INVESTMENT COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2016

35 RELATED PARTY TRANSACTIONS

Related parties comprise of major shareholders, directors and key management personnel and their close family
members and retirement benefit funds.

Transactions with employees as per the terms of employment and transactions with other related parties are executed
substantially on the same terms, as those prevailing at the time for comparable transactions with unrelated parties and
do not involve more than a normal risk.

The details of transactions with related parties, other than those which have been specifically disclosed elsewhere in
the financial statements are as follows:

35.1 The Key Management Personnel / Directors' compensation are as follows:

2016 2015
------(Rupees in '000)------
Loans and advances to key management personnel
Balance at beginning of the period / year 29,818 17,228
Loans granted during the period / year 1,369 22,169
Repayments during the period / year (4,561) (9,579)
Balance at end of the period / year 26,626 29,818

Deposits from the key management personnal

Balance at beginning of the period / year 60 20
Deposits received during the period / year 360 60
Deposits redemed during the period / year (300) (20)
Balance at end of the period / year 120 60

Disposal of Fixed Assets to Key Management Personnal 26 -

Mark-up earned on loans and advances 1,341 1,788

Salaries & Benefits 138,333 111,619

Contribution to defined contribution plan 6,104 5,588

Non-executive directors' remuneration 2,182 1,830

35.2 Receivable from Iran Foreign Investment Company (net) 2,664 2,218

35.3 Dividend payable to Iran Foreign Investment Company 300,000 150,000

35.4 Deposit from PAIR Investment Co. Ltd. Employees Gratuity Fund 3,400 -

35.5 Deposit from Pak Iran Joint Inv. Co. Ltd. Staff Provident Fund 12,500 -

35.6 Receivable/ (Payable) from PAIR Investment Employee Gratuity Funds 986 (1,307)

35.7 Amount transferred to provident fund 17,205 13,902

35.8 Amount transferred to gratuity fund 10,600 24,420

35.9 Dividend paid to Ministry of Finance - Govt. of Pakistan 150,000 75,000

*Directors are also given travelling allowance of Euro 5,000/- per meeting for attending the board meetings held
during the period.
PAΪR INVESTMENT COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2016

36 SEGMENT ANALYSIS WITH RESPECT TO BUSINESS ACTIVITIES

The segment analysis with respect to business activity is as follows:
2016
------------------------------(Rupees in '000)------------------------------
Corporate Trading &
Finance & Sales (other Capital
Others Total
Commercial than Capital Markets
Banking Market)

2016
Total income - Gross 348,737 999,479 126,423 (177,703) 1,296,936
Total markup / return / interest expense 77,906 455,368 - - 533,274
Segment provision / (reversal) / impairment (199,497) - (23,400) (192,959) (415,856)
(121,591) 455,368 (23,400) (192,959) 117,418
Net operating income 470,328 544,111 149,823 15,256 1,179,518

Administrative expenses and other charges 318,427

Profit before taxation 861,091

Segment assets 7,373,918 9,870,133 261,401 1,093,019 18,598,471

Segment impaired assets / non performing loans 1,222,674 - - - 1,222,674
Segment provision required and held 870,452 - - - 870,452
Segment liabilities 1,534,734 7,094,975 - 518,803 9,148,512
Segment return on assets -% 8.94% 4.81% 29.08% 0.00% 6.49%
Segment cost of funds -% 5.79% 6.29% 0.00% 0.00% 6.21%

2015
------------------------------(Rupees in '000)------------------------------
Corporate Trading &
Finance & Sales (other Capital
Others Total
Commercial than Capital Markets
Banking Market)

2015
Total income - Gross 478,841 1,256,505 132,718 1,370 1,869,434
Total markup / return / interest expense 106,960 520,165 - - 627,125
Segment provision / (reversal) / impairment (5,878) - 22,827 - 16,949
101,082 520,165 22,827 - 644,074
Net operating income 377,759 736,340 109,891 1,370 1,225,360

Administrative expenses and other charges 302,029

Profit before taxation 923,331

Segment assets 5,300,030 16,873,165 396,817 651,265 23,221,277

Segment impaired assets / non performing loans 1,562,768 - 61,815 296,860 1,921,443
Segment provision required and held 1,069,949 - 23,399 192,959 1,286,307
Segment liabilities 1,703,597 11,839,340 - 484,862 14,027,799
*Segment return on assets -% 7.33% 6.74% 20.63% 0.00% 7.38%
*Segment cost of funds -% 8.94% 8.94% 0.00% 0.00% 8.94%

* These are based on average balances of assets and liabilities.

36.1 Under the Company's policy capital market department assets are financed through equity funds.
PAIR INVESTMENT COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2016

37 CAPITAL ASSESSMENT AND ADEQUACY - BASEL III SPECIFIC

37.1 Capital adequacy

The objective of capital management is to safeguard the Company's ability to continue as a going concern, so that
it could continue to manage risk and provide adequate returns to shareholders by pricing products and services
commensurate with the level of risk.

It is the policy of the Company to maintain 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 Company recognises the need to maintain a balance between the higher returns
and manage acceptable risk appetite that might be possible with greater gearing and the advantages and security
supported by a sound capital position.

Goals of
managing
capital
The goals of managing capital of the Company are as follows:

- To ensure availability of adequate capital at a reasonable cost so as to enable the Company to grow accordingly.

- To achieve a low cost of capital with appropriate mix of capital elements.

- To be an appropriately capitalized institution, as prescribed by regulatory authorities from time to time.

- To maintain highest quality ratings and to protect the Company against unexpected events.

The Capital of the Company is managed keeping in view the minimum “Capital Adequacy Ratio” required by SBP
through BSD Circular No. 8 dated 27 June 2006 and BPRD Circular No. 04 of 2013 dated May 16, 2013. The
adequacy of the capital is tested with reference to the Risk Weighted Assets of the Company.

The Company's operations are categorized as at trading book and banking book and risk-weighted assets are
determined according to specified requirements of SBP in order to seek and reflect the varying levels of risk
attached to assets and off-balance sheet exposures. The total risk-weighted exposures comprises of credit, market
and operational risk.

The calculation of Capital Adequacy enables the Company to assess its long-term soundness. It is critically
important to continuously monitor the exposure across the entire organization and create aggregate view on the
same by generating management level information trial to manage risk and return trade-offs.

The Company is in compliance of the Minimum Capital Requirement, set by the State Bank of Pakistan.

Scope of Applications

The Company has implemented standardized approach of Basel III on standalone basis. The objectives of Basel III
aims to further strengthen the existing capital framework by amending certain provisions of Basel II and
introduction of new requirements.

The Company at present does not have any overseas operations, subsidiary / associate or engage in joint venture
with any other entity.

37.1.1 Leverage Ratio

The leverage ratio of the DFI as on December 31, 2016 is 42.48% (2015: 39.38%).

The ratio has been computed as prescribed by State Bank of Pakistan through Instructions for Basel III
Implementation in Pakistan.

As on December 31, 2016, Total Tier 1 capital of the DFI amounts to Rs. 8.32 billions (2015: Rs. 8.40 billions)
whereas the total exposure amounts to Rs. 19.60 billions (2015: Rs. 21.35 billions).

Shift in leverage ratio is primarily due to decrease in investments.

37.2 Capital Adequacy Ratio (CAR) disclosure template:

CAPITAL ADEQUACY RETURN AS OF DECEMBER 31, 2016 2016 2015

(Rupees in '000)
Amount Amount
Rows # Common Equity Tier 1 capital (CET1): Instruments and reserves
1 Fully Paid-up Capital/ Capital deposited with SBP 6,000,000 6,000,000
2 Balance in Share Premium Account
3 Reserve for issue of Bonus Shares
4 Discount on Issue of shares
5 General/ Statutory Reserves 794,107 673,449
6 Gain/(Losses) on derivatives held as Cash Flow Hedge
7 Unappropriated/unremitted profits/
Minority Interests arising from CET1 (losses)
capital instruments issued to third parties by consolidated 2,572,774 2,390,166
8 bank subsidiaries (amount allowed in CET1 capital of the consolidation group)
9 CET 1 before Regulatory Adjustments 9,366,881 9,063,615
10 Total regulatory adjustments applied to CET1 (Note 37.2.1) (1,055,240) (678,453)
11 Common Equity Tier 1 8,311,641 8,385,162

Additional Tier 1 (AT 1) Capital

12 Qualifying Additional Tier-1 capital instruments plus any related share premium
13 of which: Classified as equity
14 of which: Classified as liabilities
15 Additional Tier-1 capital instruments issued to third parties by consolidated subsidiaries (amount
16 allowed in group
of which: AT 1) issued by subsidiaries subject to phase out
instrument
17 AT1 before regulatory adjustments 0 0
18 Total regulatory adjustment applied to AT1 capital (Note 37.2.2) 0 0
19 Additional Tier 1 capital after regulatory adjustments
20 Additional Tier 1 capital recognized for capital adequacy 0 0

21 Tier 1 Capital (CET1 + admissible AT1) (11+20) 8,311,641 8,385,162

Tier 2 Capital
22 Qualifying Tier 2 capital instruments under Basel III plus any related share premium
23 Tier 2 capital instruments subject to phaseout arrangement issued under pre-Basel 3 rules
24 Tier 2 capital instruments issued to third parties by consolidated subsidiaries (amount allowed in
25 group tier 2) instruments issued by subsidiaries subject to phase out
of which:
26 General provisions or general reserves for loan losses-up to maximum of 1.25% of Credit Risk
27 Weighted Assets
Revaluation Reserves (net of taxes)
28 of which: Revaluation reserves on fixed assets
29 of which: Unrealized gains/losses on AFS 94,052 115,350
30 Foreign Exchange Translation Reserves
31 Undisclosed/Other Reserves (if any)
32 T2 before regulatory adjustments 94,052 115,350
33 Total regulatory adjustment applied to T2 capital (Note 37.2.3) (94,052) (115,350)
34 Tier 2 capital (T2) after regulatory adjustments 0 0
35 Tier 2 capital recognized for capital adequacy 0 0
36 Portion of Additional Tier 1 capital recognized in Tier 2 capital 0 0
37 Total Tier 2 capital admissible for capital adequacy 0 0
38 TOTAL CAPITAL (T1 + admissible T2) (21+37) 8,311,641 8,385,162

39 Total Risk Weighted Assets (RWA) {for details refer Note 37.5} 10,772,462 10,048,068

Capital Ratios and buffers (in percentage of risk weighted assets)

40 CET1 to total RWA 77.16% 83.45%
41 Tier-1 capital to total RWA 77.16% 83.45%
42 Total capital to total RWA 77.16% 83.45%
43 Bank specific buffer requirement (minimum CET1 requirement plus capital conservation buffer
plus any other buffer requirement) 10% 10%

44 of which: capital conservation buffer requirement

45 of which: countercyclical buffer requirement
46 of which: D-SIB or G-SIB buffer requirement
47 CET1 available to meet buffers (as a percentage of risk weighted assets) 71.16% 77.45%

National minimum capital requirements prescribed by SBP

48 CET1 minimum ratio 6.00% ### 6.00%
49 Tier 1 minimum ratio 7.50% 7.50%
50 Total capital minimum ratio 10.65% 10.00%

Note 37.2
 2016 2015
Rupees in '000

Amounts Amounts
subject to subject to
Regulatory Adjustments and Additional Information Amount Amount
Pre- Basel III Pre- Basel III
treatment* treatment*

37.2.1 Common Equity Tier 1 capital: Regulatory adjustments

1 Goodwill (net of related deferred tax liability)
All other intangibles (net of any associated deferred
2 274 511
tax liability)

3 Shortfall in provisions against classified assets

Deferred tax assets that rely on future profitability

4 excluding those arising from temporary differences
(net of related tax liability)

5 Defined-benefit pension fund net assets

Reciprocal cross holdings in CET1 capital
6 instruments of banking, financial and insurance
entities
7 Cash flow hedge reserve
8 Investment in own shares/ CET1 instruments
9 Securitization gain on sale
10 Capital shortfall of regulated subsidiaries
Deficit on account of revaluation from bank's
11
holdings of fixed assets/ AFS

Investments in the capital instruments of banking,

financial and insurance entities that are outside the
12 scope of regulatory consolidation, where the bank 33,001 22,001 43,769 65,654
does not own more than 10% of the issued share
capital (amount above 10% threshold)

Significant investments in the common stocks of

banking, financial and insurance entities that are
13
outside the scope of regulatory consolidation
(amount above 10% threshold)

Deferred Tax Assets arising from temporary

14 differences (amount above 10% threshold, net of
related tax liability)
15 Amount exceeding 15% threshold
of which: significant investments in the common
16
stocks of financial entities
of which: deferred tax assets arising from
17
temporary differences
National specific regulatory adjustments applied to
18
CET1 capital
Investments in TFCs of other banks exceeding
19 297,156 - 297,523
the prescribed limit
Any other deduction specified by SBP (mention
20
details)
Adjustment to CET1 due to insufficient AT1 and
21 724,809 313,092
Tier 2 to cover deductions
Total regulatory adjustments applied to CET1 (sum
22 1,055,240 654,895
of 1 to 21)
 2016 2015
Rupees in '000

Amounts Amounts
subject to subject to
Regulatory Adjustments and Additional Information Amount Amount
Pre- Basel III Pre- Basel III
treatment* treatment*

Note
Additional Tier-1 & Tier-1 Capital: regulatory adjustments
37.2.2

23 Investment in mutual funds exceeding the

prescribed limit [SBP specific adjustment]
24 Investment in own AT1 capital instruments
Reciprocal cross holdings in Additional Tier 1
25 capital instruments of banking, financial and
insurance entities
Investments in the capital instruments of banking,
financial and insurance entities that are outside the
scope of regulatory consolidation, where the bank
26 does not own more than 10% of the issued share - - 32,433 48,651
capital (amount above 10% threshold)

Significant investments in the capital instruments of

banking, financial and insurance entities that are
27 outside the scope of regulatory consolidation

Portion of deduction applied 50:50 to Tier-1 and

28 Tier-2 capital based on pre-Basel III treatment
which, duringtotransitional
Adjustments Additionalperiod, remain
Tier 1 due subject to
to insufficient
29 deduction from additional
Tier 2 to cover deductions tier-1 capital 724,809 280,658

30 Total regulatory adjustment applied to AT1 capital

(sum of 23 to 29) - -

Note
Tier 2 Capital: regulatory adjustments
37.2.3
Portion of deduction applied 50:50 to Tier-1 and
Tier-2 capital based on pre-Basel III treatment
31 which, during transitional period, remain subject to
deduction from tier-2 capital

Reciprocal cross holdings in Tier 2 instruments of

32 banking, financial and insurance entities

33 Investment in own Tier 2 capital instrument

Investments in the capital instruments of banking,
financial and insurance entities that are outside the
scope of regulatory consolidation, where the bank
34 does not own more than 10% of the issued share 818,861 545,907 396,009 295,942
capital (amount above 10% threshold)

Significant investments in the capital instruments

issued by banking, financial and insurance entities
35 that are outside the scope of regulatory
consolidation

Total regulatory adjustment applied to T2 capital

36 94,052 115,350
(sum of 31 to 35)
 2016 2015
Rupees in '000
Note
Additional Information Amount Amount
37.2.4
Risk Weighted Assets subject to pre-Basel III treatment
Risk weighted assets in respect of deduction items (which during the transitional
37 period will be risk weighted subject to Pre-Basel III Treatment) 586,521 779,299

(i) of which: deferred tax assets

(ii) of which: Defined-benefit pension fund net assets
of which: Recognized portion of investment in capital of banking, financial
(iii) and insurance entities where holding is less than 10% of the issued common share 586,521 779,299
capital of the entity

of which: Recognized portion of investment in capital of banking, financial

(iv) and insurance entities where holding is more than 10% of the issued common share
capital of the entity
Amounts below the thresholds for deduction (before risk weighting)
38 Non-significant investments in the capital of other financial entities
39 Significant investments in the common stock of financial entities
Deferred tax assets arising from temporary differences (net of related tax liability)
40 258,889 259,691
Applicable caps on the inclusion of provisions in Tier 2
Provisions eligible for inclusion in Tier 2 in respect of exposures subject to
41 standardized approach (prior to application of cap)
Cap on inclusion of provisions in Tier 2 under standardized approach
42
Provisions eligible for inclusion in Tier 2 in respect of exposures subject to internal
43 ratings-based approach (prior to application of cap)
Cap for inclusion of provisions in Tier 2 under internal ratings-based approach
44
37.3 Capital Structure Reconciliation
Balance sheet of the Under regulatory scope
Table: 37.3.1 published financial of consolidation
statements
(in thousand PKR) As at period end As at period end
Assets (1) (2) (3)
Cash and balances with treasury banks 64,205 64,205
Balanced with other banks 432,783 432,783
Lending to financial institutions - -
Investments 11,842,973 11,842,973
Advances 5,424,351 5,424,351
Operating fixed assets 176,982 176,982
Deferred tax assets 238,128 238,128
Other assets 419,049 419,049
Total assets 18,598,471 18,598,471
Liabilities & Equity
Bills payable - -
Borrowings 6,549,981 6,549,981
Deposits and other accounts 2,079,728 2,079,728
Sub-ordinated loans - -
Liabilities against assets subject to finance lease - -
Deferred tax liabilities - -
Other liabilities 518,803 518,803
Total liabilities 9,148,512 9,148,512

Share capital/ Head office capital account 6,000,000 6,000,000

Reserves 794,107 794,107
Unappropriated/ Unremitted profit/ (losses) 2,572,774 2,572,774
Minority Interest - -
Surplus on revaluation of assets 83,078 83,078
Total liabilities & equity 9,449,959 9,449,959

Balance sheet as in Under regulatory scope Reference

Table: 37.3.2 published financial of consolidation
statements
As at period end As at period end
Assets (1) (2) (3) (4)
Cash and balances with treasury banks 64,205 64,205
Balanced with other banks 432,783 432,783
Lending to financial institutions - -
Investments 11,842,973 11,842,973
of which: Non-significant investments in the capital
instruments of banking, financial and insurance entities
exceeding 10% threshold 2,356,417 2,356,417 a
of which: significant investments in the capital - - b
instruments issued by banking, financial and insurance
entities exceeding regulatory threshold
of which: Mutual Funds exceeding regulatory thresho - - c
of which: reciprocal crossholding of capital - - d
instrument (separate for CET1, AT1, T2)
of which: others (mention details) - - e
Advances 5,424,351 5,424,351
shortfall in provisions/ excess of total EL amount - - f
over eligible provisions under IRB
general provisions reflected in Tier 2 capital - - g
Fixed Assets 176,982 176,982
Deferred Tax Assets 238,128 238,128
of which: DTAs that rely on future profitability - - h
excluding those arising from temporary differences
of which: DTAs arising from temporary differences
exceeding regulatory threshold - - i
Other assets 419,049 419,049
of which: Goodwill - - j
of which: Intangibles 274 274 k
of which: Defined-benefit pension fund net assets - - l
Total assets 18,598,471 18,598,471

Note 37.3
 Balance sheet as in Under regulatory scope Reference
Table: 37.3.2 published financial of consolidation
statements
As at period end As at period end
Liabilities & Equity (1) (2) (3) (4)
Bills payable - -
Borrowings 6,549,981 6,549,981
Deposits and other accounts 2,079,728 2,079,728
Sub-ordinated loans - -
of which: eligible for inclusion in AT1 - - m
of which: eligible for inclusion in Tier 2 - - n
Liabilities against assets subject to finance lease - -
Deferred tax liabilities - -
of which: DTLs related to goodwill - - o
of which: DTLs related to intangible assets - - p
of which: DTLs related to defined pension fund net as - - q
of which: other deferred tax liabilities - - r
Other liabilities 518,803 518,803
Total liabilities 9,148,512 9,148,512

Share capital 6,000,000 6,000,000

of which: amount eligible for CET1 6,000,000 6,000,000 s
of which: amount eligible for AT1 - - t
Reserves 794,107 794,107
of which: portion eligible for inclusion in
CET1(provide breakup) 794,107 794,107
u
of which: portion eligible for inclusion in Tier 2 - - v
Unappropriated profit/ (losses) 2,572,774 2,572,774 w
Minority Interest - -
of which: portion eligible for inclusion in CET1 - - x
of which: portion eligible for inclusion in AT1 - - y
of which: portion eligible for inclusion in Tier 2 - - z
Surplus on revaluation of assets 83,078 83,078
of which: Revaluation reserves on Fixed Assets - -
aa
of which: Unrealized Gains/Losses on AFS 83,078 83,078
In case of Deficit on revaluation (deduction from CET - - ab
Total liabilities & Equity 9,449,959 9,449,959

Basel III Disclosure Template (with added column)

Component of Source based on
S.No regulatory capital reference number from
Table: 37.3.3
reported by bank step 2
Common Equity Tier 1 capital (CET1): Instruments and reserves
1 Fully Paid-up Capital/ Capital deposited with SBP 6,000,000
2 Balance in Share Premium Account - (s)
3 Reserve for issue of Bonus Shares -
4 General/ Statutory Reserves 794,107
(u)
5 Gain/(Losses) on derivatives held as Cash Flow Hedge -
6 Unappropriated/unremitted profits/ (losses) 2,572,774 (w)
Minority Interests arising from CET1 capital
7 instruments issued to third party by consolidated bank - (x)
subsidiaries (amount allowed in CET1 capital of the
consolidation group)
8 CET 1 before Regulatory Adjustments 9,366,881

Common Equity Tier 1 capital: Regulatory adjustments

9 Goodwill (net of related deferred tax liability) - (j) - (o)
All other intangibles (net of any associated deferred tax
10 liability) 274
(k) - (p)
11 Shortfall of provisions against classified assets - (f)
where 'x' depends on
Deferred tax assets that rely on future profitability transitional arrangement
12 excluding those arising from temporary differences (net - {(h) - (r} * x% for capital deduction (e.g.
of related tax liability) 0%, 20% etc.), Section
2.4.11
13 Defined-benefit pension fund net assets - {(l) - (q)} * x%
Reciprocal cross holdings in CET1 capital instruments
14 - (d)
15 Cash flow hedge reserve -
16 Investment in own shares/ CET1 instruments -
17 Securitization gain on sale -

Note 37.3
18 Capital shortfall of regulated subsidiaries -
Deficit on account of revaluation from bank's holdings
19 of fixed assets/ AFS - (ab)
Portion of amount above
the threshold that is to be
Investments in the capital instruments of banking, deducted from CET1,
financial and insurance entities that are outside the scope whereas "ac" is the portion
20 of regulatory consolidation, where the bank does not 33,001 (a) - (ac) - (ae) to be deducted from AT1
own more than 10% of the issued share capital (amount and "ae" is the portion to
above 10% threshold) be deducted from T2

Portion of amount above

the threshold that is to be
Significant investments in the capital instruments issued deducted from CET1,
by banking, financial and insurance entities that are whereas "ad" is the portion
21 - (b) - (ad) - (af) to be deducted from AT1
outside the scope of regulatory consolidation (amount
above 10% threshold) and "af" is the portion to
be deducted from T2

Deferred Tax Assets arising from temporary differences

22 (amount above 10% threshold, net of related tax - (i)
liability)
23 Amount exceeding 15% threshold
of which: significant investments in the common
24 stocks of financial entities -
of which: deferred tax assets arising from temporary
25 differences -
National specific regulatory adjustments applied to
26 CET1 capital -
of which: Investment in TFCs of other banks
27 exceeding the prescribed limit 297,156
of which: Any other deduction specified by SBP
28 (mention details) -
Regulatory adjustment applied to CET1 due to
29 insufficient AT1 and Tier 2 to cover deductions 724,809
Total regulatory adjustments applied to CET1 (sum of 9
30 to 29) 1,055,240
31 Common Equity Tier 1 8,311,641

Additional Tier 1 (AT 1) Capital

Qualifying Additional Tier-1 instruments plus any
32 related share premium -
33 of which: Classified as equity - (t)
34 of which: Classified as liabilities - (m)
Additional Tier-1 capital instruments issued by
35 consolidated subsidiaries and held by third parties - (y)
(amount allowed in group AT 1)
of which: instrument issued by subsidiaries subject to
36 phase out -
37 AT1 before regulatory adjustments

Additional Tier 1 Capital: regulatory adjustments

Investment in mutual funds exceeding the prescribed

38 limit (SBP specific adjustment) -
39 Investment in own AT1 capital instruments -
Reciprocal cross holdings in Additional Tier 1 capital
40 instruments -

Note 37.3
 Investments in the capital instruments of banking,
financial and insurance entities that are outside the scope
41 of regulatory consolidation, where the bank does not - (ac)
own more than 10% of the issued share capital (amount
above 10% threshold)

Significant investments in the capital instruments issued

by banking, financial and insurance entities that are
42 outside the scope of regulatory consolidation - (ad)

Portion of deduction applied 50:50 to core capital and

supplementary capital based on pre-Basel III treatment
43 which, during transitional period, remain subject to -
deduction from tier-1 capital

Regulatory adjustments applied to Additional Tier 1 due

44 to insufficient Tier 2 to cover deductions 724,809
Total of Regulatory Adjustment applied to AT1 capital
45 (sum of 38 to 44) -
46 Additional Tier 1 capital -
Additional Tier 1 capital recognized for capital
47 adequacy -

Tier 1 Capital (CET1 + admissible AT1) (31+47)

48
8,311,641

Tier 2 Capital
Qualifying Tier 2 capital instruments under Basel III
49 plus any related share premium -
Capital instruments subject to phase out arrangement (n)
50 from tier 2 (Pre-Basel III instruments) -

Tier 2 capital instruments issued to third party by

51 consolidated subsidiaries (amount allowed in group tier - (z)
2)
of which: instruments issued by subsidiaries subject
52 to phase out -
General Provisions or general reserves for loan losses-
53 up to maximum of 1.25% of Credit Risk Weighted - (g)
Assets
54 Revaluation Reserves -
55 of which: Revaluation reserves on fixed assets -
portion of (aa)
56 of which: Unrealized Gains/Losses on AFS 94,052
57 Foreign Exchange Translation Reserves - (v)
58 Undisclosed/Other Reserves (if any) 94,052
59 T2 before regulatory adjustments 94,052

Tier 2 Capital: regulatory adjustments

Portion of deduction applied 50:50 to core capital and
supplementary capital based on pre-Basel III treatment
60 which, during transitional period, remain subject to -
deduction from tier-2 capital

61 Reciprocal cross holdings in Tier 2 instruments -

62 Investment in own Tier 2 capital instrument -
Investments in the capital instruments of banking,
financial and insurance entities that are outside the scope
of regulatory consolidation, where the bank does not
63 (818,861) (ae)
own more than 10% of the issued share capital (amount
above 10% threshold)

Significant investments in the capital instruments issued

by banking, financial and insurance entities that are
64 outside the scope of regulatory consolidation - (af)

Amount of Regulatory Adjustment applied to T2 capital

65 (sum of 60 to 64) (94,052)
66 Tier 2 capital (T2) -
67 Tier 2 capital recognized for capital adequacy -
Excess Additional Tier 1 capital recognized in Tier 2
68 capital -

69 Total Tier 2 capital admissible for capital adequacy -

TOTAL CAPITAL (T1 + admissible T2) (48+69)
70
8,311,641

Note 37.3
37.4 Main Features Template of Regulatory Capital Instruments
Set out below is the template that banks must use to ensure that the key features of all regulatory capital instruments are disclosed. Banks will be required to complete all of the cells for each
outstanding regulatory capital instrument (please insert “NA” if the question is not applicable). Banks are required to report each regulatory capital instrument in a separate column of the
Disclosure template for main features of regulatory capital instruments
template, such that the completed template would provide a "main features report" that summaries all of the regulatory capital instruments of the bank/ banking group.

Instrument - Inst.- 3 &

Main Features Common Shares Explanation
2 so on …

1 Issuer PAIR Investment Identifies issuer legal entity.

Company Limited
2 Unique identifier (eg KSE Symbol or Bloomberg identifier etc.)
Not Applicable
3 Governing law(s) of the instrument Laws of Islamic Specify the governing law(s) of the instrument
Republic of
Pakistan

Regulatory treatment
Specifies the regulatory capital treatment during Basel III
transitional phase (i.e. the component of capital that the
4 Transitional Basel III rules Not Applicable instrument is being phased-out from).
Enter: [Common Equity Tier 1]
[Additional Tier 1] [Tier 2]

Specifies regulatory capital treatment under Basel III rules not

taking into account transitional treatment.
5 Post-transitional Basel III rules Not Applicable Enter: [Common Equity Tier 1] [Additional Tier 1]
[Tier 2] [Ineligible]
Specifies the level(s) within the group at which the instrument
6 Eligible at solo/ group/ group & solo Solo is included in capital.
Enter: [Solo] [Group] [Solo and Group]
Enter: [Ordinary shares] [Perpetual non-cumulative
7 Instrument type Ordinary Shares preference shares] [perpetual debt instruments] [Other Tier 2]
(others: please specify)
8 Amount recognized in regulatory capital (Currency in PKR thousands, Specifies amount recognized in regulatory capital.
as of reporting date) PKR 6,000,000
9 Par value of instrument PKR 10 Par value of instrument
Specifies accounting classification. Helps to assess loss
absorbency. Enter:
10 Accounting classification Shareholders's equity [Shareholders' equity] [Liability - amortized cost] [Liability -
fair value option] [Non-controlling interest in consolidated
subsidiary]

11 Original date of issuance 2007 Specifies date of issuance.

Note 37.4
 Specifies whether dated or perpetual.
12 Perpetual or dated Perpetual
Enter: [Perpetual/ no Maturity] [Dated]
13 Original maturity date No Maturity For dated instrument, specifies original maturity date.
Specifies whether there is an issuer call option. Helps to
14 Issuer call subject to prior supervisory approval No assess permanence.
Enter: [Yes] [No]
For instrument with issuer call option, specifies first date of
call if the instrument has a call option on a specific date (day,
month and year) and in addition mention if the instrument has
15 Optional call date, contingent call dates and redemption amount Not Applicable a tax and/or regulatory event call. Also specifies the
redemption price. Helps to assess permanence

Specifies subsequent call dates, if applicable. Helps to assess

16 Subsequent call dates, if applicable Not Applicable permanence.
Coupons / dividends
17 Fixed or floating dividend/ coupon Enter [fixed], [floating], [fixed to floating], [floating to fixed]
Not Applicable
18 Coupon rate and any related index/ benchmark Not Applicable
Specifies whether the non payment of a coupon or dividend
on the instrument prohibits the payment of dividends on
19 Existence of a dividend stopper No common shares (i.e. whether there is a dividend stopper)
Enter: [yes], [no]
Enter: [fully discretionary] [partially discretionary]
20 Fully discretionary, partially discretionary or mandatory Fully discretionary [mandatory]
Specifies whether there is a step-up or other incentive to
21 Existence of step up or other incentive to redeem No redeem. Enter: [Yes] [No]

Specifies whether dividends / coupons are cumulative or

22 Non-cumulative or cumulative Not Applicable noncumulative.
Enter: [Noncumulative] [Cumulative]
Specifies whether instrument is convertible or not. Helps to
23 Convertible or non-convertible Non-convertible assess loss absorbency.
Enter: [Convertible] [Nonconvertible]
Specifies the conditions under which the instrument will
convert, including point of non-viability. Where one or more
authorities have the ability to trigger conversion, the
authorities should be listed. For each of the authorities it
should be state whether it is the terms of the contract of the
24 If convertible, conversion trigger (s) No
instrument that provide the legal basis for the authority to
trigger conversion (a contractual approach) or whether the
legal basis is provided by statutory means (a statutory
approach)

Note 37.4
 Specifies whether the instrument will: (i) always convert
25 If convertible, fully or partially Not Applicable fully, (ii) may convert fully or partially; or (iii) will always
convert partially Enter: one of the
options
Specifies rate of conversion into the more loss absorbent
26 If convertible, conversion rate Not Applicable instrument. Helps to assess the degree of loss absorbency.

For convertible instruments, specifies whether conversion is

mandatory or optional. Helps to assess loss absorbency.
27 If convertible, mandatory or optional conversion Not Applicable Enter: [Mandatory] [Optional] [NA]

For convertible instruments, specifies instrument type

convertible into. Helps to assess loss absorbency.
28 If convertible, specify instrument type convertible into Not Applicable Enter: [Common Equity Tier 1] [Additional
Tier 1] [Tier 2]
If convertible, specify issuer of instrument into which it
29 If convertible, specify issuer of instrument it converts into Not Applicable converts.
Specifies whether there is a write down feature. Helps to
30 Write-down feature No assess loss absorbency. Enter: [Yes] [No]
Specifies the trigger at which write-down occurs, including
point of non-viability. Where one or more authorities have the
ability to trigger write-down, the authorities should be listed.
For each of the authorities it should be state whether it is the
31 If write-down, write-down trigger(s) Not Applicable terms of the contract of the instrument that provide the legal
basis for the authority to trigger write-down (a contractual
approach) or whether the legal basis is provided by statutory
means (a statutory approach)

For each write-down trigger separately, specifies whether the

instrument will (i) always be written-down fully, (ii) may be
written down partially; or (iii) will always be written down
32 If write-down, full or partial Not Applicable
partially. Help assess the level of loss absorbency at write-
down

For write down instrument, specifies whether write down is

permanent or temporary. Helps to assess loss absorbency.
33 If write-down, permanent or temporary Not Applicable Enter: [Permanent] [Temporary] [NA]

For instrument that has a temporary write-down, description

34 If temporary write-down, description of write-up mechanism Not Applicable of write-up mechanism.
Position in subordination hierarchy in liquidation (specify instrument Specifies instrument to which it is most immediately
35 Not Applicable subordinate. Helps to assess loss absorbency on gone-concern
type immediately senior to instrument
basis.
Specifies whether there are non-compliant features.
36 Non-compliant transitioned features No Enter: [Yes] [No]
If there are non-compliant features, specify which ones. Helps
37 If yes, specify non-compliant features Not Applicable to assess instrument loss absorbency.

Note 37.4
PAIR INVESTMENT COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2016

37.5 Risk Weighted Assets

The capital requirements for the Company as per major risk categories are given below:

2016 2015

Capital Risk weighted Capital Risk weighted

requirements assets requirements assets

Credit risk (Rupees in '000) (Rupees in '000)

Claims on:
Banks 12,120 113,803 9,005 90,049
Corporate 587,226 5,513,857 388,403 3,884,028
Retail portfolio 358 3,365 370 3,699
Secured by residential property 1,496 14,046 1,364 13,640
Past due loans 89,189 837,457 91,288 912,880
Listed equity investments 122,876 1,153,768 104,550 1,045,497
Unlisted equity investments - - 28,693 286,934
Investments in fixed assets 18,849 176,982 19,131 191,311
All other assets 78,047 732,835 67,573 675,728
910,161 8,546,113 710,377 7,103,766

2016 2015
Market risk
Interest rate risk 12,988 162,350 35,864 448,302
Equity risk 40,272 503,400 76,938 961,731
53,260 665,750 112,802 1,410,033
Operational risk 124,848 1,560,599 122,742 1,534,269
1,088,269 10,772,462 945,921 10,048,068

Capital adequacy ratio

Total eligible regulatory capital held (a) 8,311,641 8,385,162

Total risk weighted assets (b) 10,772,462 10,048,068

Capital adequacy ratio (a) / (b)*100 77.16% 83.45%

2016 2015
Capital Adequacy Ratios
Required Actual Required Actual

CET1 to total RWA 6.00% 77.16% 6.00% 83.45%

Tier-1 capital to total RWA 7.50% 77.16% 7.50% 83.45%
Total capital to total RWA 10.65% 77.16% 10.00% 83.45%
PAIR INVESTMENT COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2016

38 RISK MANAGEMENT
The primary risks associated with the Company's exposure are:
Credit Risk: the risk of loss resulting from client or counterparty default.
Market Risk: the exposure to market variables such as interest rates and equity prices.
Operational Risk: the risk of loss resulting from inadequate or failed internal processes, people and systems or from
external events, and therefore includes legal risk.

The Company's Credit & Risk Management Department has BASEL Compliant, Credit, Market, Liquidity and
Operational Risk functions.

The Company's portfolio and exposures are governed through relevant policies, procedures and various risk measurement
techniques by adopting Internal Capital Adequacy Assessment Process (ICAAP) and Stress Testing with a purpose to
achieve efficiency, effectiveness and compliance. Internal Risk Rating mechanism and transaction level risk analytics
have been adopted in order to have ongoing risk sensitive assessment and reporting. The Company is more focused
towards implementing system based risk assessment by acquiring risk systems in order to have more efficiency in overall
risk management processes.

38.1 Credit risk

Credit risk is the risk of loss to the Company as a result of failure by a client or counterparty to meet its contractual
obligations. It is inherent in loans, commitments to lend, traded products, repurchase agreements (reverse repos),
placements and other lending transactions. The role of Credit Risk Management particularly includes:

-Participation in portfolio planning and management.

-Establishment of credit policies and standards that conform to regulatory requirements and the Company’s overall
objectives.

-Working with Business Units in keeping aggregate credit risk exposure within the Company’s risk appetite.
-Organizing portfolio reviews focusing on quality assessment, risk profiles, industry concentrations.
-Setting systems to identify significant portfolio indicators, problem credits and level of provisioning required.
The Company has designed an Internal Risk Rating Models and methodology to gauge credit risk elements in the
banking book of the Company.

The credit products mainly comprise of Fund based & Non-Fund based, including short term and long term financing,
project finance, term lending, reverse repurchase, bridge finance, investment in TFCs , sukuk bonds and placements with
financials institutions, etc. Exposures are collateralized by cash equivalents, fixed assets, and current assets including
property plant and equipment, land and building, hypothecation, pledge on stocks and receivables as the case may be.
The Company manages limits and controls concentrations of credit risk as identified, in particular to individual
counterparties and groups, and to industries, where appropriate.

Concentrations of credit risk exist if clients are engaged in similar activities, or are located in the same geographic region
or have comparable economic characteristics such that their ability to meet contractual obligations would be similarly
affected by changes in economic, political or other conditions. The Company sets limits on its credit exposure to
counterparty, to groups, and to industry, which are in line with SBP standards.
Stress testing on credit portfolio is being carried out on regular basis to assess the impact of defaults on Company's
earning and capital adequacy. Credit concentration, rating migration, default shocks and risk aggregation of large
exposures are few of the main shocks used to gauge the strength of Credit risk standing of the Company.

38.1.1 Credit Risk – General Disclosures Basel II/ III specific

The Company is more focused on the intent of Basel II/ III rather than just treating it as a regulatory requirement.
Therefore, in addition to the adoption of Standardized approach and reporting to SBP, the Company has already adopted
the practice of ongoing assessment as required under the advanced approaches of Basel II .The Company has adopted
Pillar II ICAAP requirements duly approved by the Board of Directors.

38.1.2 Credit Risk: Disclosure for portfolio subject to the Standardized Approach
For the calculation of Risk Weighted Assets under Standardized Approach, external credit ratings have been used for all
exposures, where available, against banks lending, corporate lending and debt instruments. The external ratings are
further mapped with SBP ratings scale to arrive at risk weights of each transaction.
PAIR INVESTMENT COMPANY LIMITED
For THE
NOTES TO the calculation
FINANCIAL of Risk Weighted Assets under Standardized Approach, external credit ratings have been used for all
STATEMENTS
FOR THEexposures, where available,
YEAR ENDED DECEMBER against
31,banks
2016 lending, corporate lending and debt instruments. The external ratings are
further mapped with SBP ratings scale to arrive at risk weights of each transaction.

Types of exposures and ECAI's used

Exposures JCR-VIS PACRA

Banks P P
Corporate P P

Credit exposures subject to standardised approach

Exposures
Rating Amount Net
Category Outstanding Deduction amount
------------------(Rupees in '000)---------
Corporate 1 538,257 - 538,257
2 1,742,806 - 1,742,806
3,4 17,675 - 17,675
5,6 - - -
Unrated 1 1,479,221 - 1,479,221
Unrated 2 2,494,867 - 2,494,867
Banks 1 5,756,889 5,187,461 569,428
Sovereigns 7,828,609 - 7,828,609
Retail Portfolio 4,486 - 4,486
Residential Mortgage Finance 40,132 - 40,132
Past Due Loans 879,461 - 879,461
Listed Equity investmnents 1,140,239 - 1,140,239
Unlisted Equity investmnents - - -
Cash and Cash Equivalents 726 - 726
Others 572,401 - 572,401
22,495,769 5,187,461 17,308,308
CRM = Credit Risk Mitigation

38.1.2.1 Credit Risk: Disclosure with respect to Credit Risk Mitigation for Standardized approach - Basel II specific

The credit policy of the Company covers credit risk mitigation process and requirements for all secured transactions. Key
elements include:

- Collateral type;
- Collateral quality and ranking;
- Collateral valuation process, and
- Margin requirements
Equitable Mortgage, Token Registered Mortgage, Hypothecation Charge Over Fixed Assets , Current Assets, Pledge of
Shares, Lending against Government Securities (for repo style transaction), GOP Guarantee and Pledge of stocks are the
main type of collaterals taken against the exposure.
PAIR INVESTMENT COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2016

38.1.3 Segmental information

38.1.3.1 Segments by class of business
2016
Advances - Gross Deposits Contingencies and
commitments
(Rupees in (Rupees in (Rupees in
Percentage Percentage Percentage
'000) '000) '000)
Cement 75,000 1% - 0% - 0%
Sugar 801,225 13% - 0% - 0%
Electronics and electrical appliances - 0% - 0% - 0%
Construction 284,860 5% - 0% - 0%
Power (electricity), gas, water, sanita 689,002 11% - 0% 163,658 74%
Financial 577,731 9% 825,000 40% - 0%
Services 608,340 10% 981,468 47% - 0%
Textile 773,150 12% - 0% - 0%
Transport, Storage and Communicat 45,896 1% - 0% - 0%
Fertilizer 799,857 13% - 0% - 0%
Infrastructure 214,542 3% - 0% - 0%
Individuals - 0% 23,260 1% - 0%
Paper and board 52,009 1% - 0% - 0%
Steel 670,899 11% - 0% - 0%
Oil and Gas 360,000 6% - 0% - 0%
Others 329,721 5% 250,000 12% 58,734 26%
6,282,232 100% 2,079,728 100% 222,392 100%

2015
Advances - Gross Deposits Contingencies and
commitments
(Rupees in (Rupees in (Rupees in
Percentage Percentage Percentage
'000) '000) '000)
Cement 75,000 2% 61,962 0% - 0%
Sugar 455,736 10% 10,000 0% - 0%
Electronics and electrical appliances - 0% - 0% - 0%
Construction 314,443 7% - 0% - 0%
Power (electricity), gas, water, sanitary 760,652 17% - 0% - 0%
Financial - 0% 1,650,000 87% - 0%
Services 459,871 11% - 0% - 0%
Textile 864,817 20% - 0% - 0%
Transport, Storage and Communication - 0% - 0% - 0%
Fertilizer 285,714 7% - 0% - 0%
Infrastructure 256,997 6% - 0% - 0%
Individuals - 0% - 0% - 0%
Paper and board 86,250 2% - 0% - 0%
Steel 546,665 13% - 0% - 0%
Oil and Gas 146,429 3% - 0% - 0%
Others 113,998 3% 168,540 9% - 0%
4,366,572 100% 1,890,502 100% - 0%

38.1.3.2 Segment by sector

2016
Advances - Gross Deposits Contingencies and
commitments
(Rupees in (Rupees in (Rupees in
Percentage Percentage Percentage
'000) '000) '000)

Public / Government - 0% - 0% - -
PAIR INVESTMENT COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2016
Private 6,282,232 100% 2,079,728 100% 222,392 -
6,282,232 100% 2,079,728 100% 222,392 -

2015
Advances - Gross Deposits Contingencies and
commitments
(Rupees in (Rupees in (Rupees in
Percentage Percentage Percentage
'000) '000) '000)

Public / Government - 0% - 0% - -
Private 4,366,572 100% 1,890,502 100% - -
4,366,572 100% 1,890,502 100% - -

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

2016 2015
(Rupees in '000)
Classified Specific Classified Specific
Advances Provision Advances Provision
Held Held

Cement 75,000 75,000 75,000 75,000

Construction 218,000 218,000 314,443 314,443
Textile 500,000 500,000 500,000 476,182
Infrastructure 204,672 35,288 231,481 31,749
Sugar 75,416 29,591 78,904 8,904
Others 95,250 - 100,250 1,250
1,168,338 857,879 1,300,078 907,528

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

2016 2015
(Rupees in '000)

Public / Government - - - -
Private 1,168,338 857,879 1,300,078 907,528
1,168,338 857,879 1,300,078 907,528

38.1.3.5 Geographical segment analysis

2016
Profit before Total assets Net assets Contingencies
taxation employed employed & commitments
(Rupees in '000)

Pakistan 861,091 18,598,471 9,449,959 222,392

2015
Profit before Total assets Net assets Contingencies
taxation employed employed & commitments
(Rupees in '000)

Pakistan 923,331 23,221,277 9,193,478 -

38.2 Equity position risk in the trading book-Basel II / III specific

Equity position risk in trading book arises due to changes in prices of individual stocks or levels of equity indices. The
Company’s equity trading book comprises of Treasury Capital Market’s (TCM), Held for trading (HFT) & Available for
Sale (AFS) portfolios.
As of 31 December 2016 the equity portfolio of the Company comprised of investment in equities Majortiy of listed and
unlisted equities are classified in Held for trading (HFT) and Available for Sale (AFS) while some unlisted equities are
classified in Held to Maturity (HTM) category. The marked to market valuation on the listed equities is done on daily
basis and any unrealised gain / loss is booked in the profit and loss account and the statement of financial position
respectively.
PAIR INVESTMENT COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2016

38.3 Market risk

Trading activities are executed in the Treasury & Investment Unit (T&IU). Major equity holdings are held to earn capital
gain and dividend to support the Company’s business activities while some of the investment positions of equity holding
are made for revenue generation as part of strategic initiatives. The Company is active in the Money Market, Fixed
Income and Equity market that carry interest rate and equity price risk on both trading and banking book respectively.
Management level Market Risk Committee has been invoked to ensure specific & general risk assessment of all Market
related products on timely basis.
Controls are also applied to prevent any undue risk concentrations in trading books, taking into account variations in
price volatility and market depth and liquidity. They include controls on exposure to individual market risk variables,
such as individual interest or equity price ('risk factors'), and on positions in the securities of individual issuers.

Market risk measures and controls are applied at the portfolio level, and concentration limits and other controls are
applied where necessary to individual risk types, to particular books and to specific exposures. Portfolio risk measures are
common to all market risks, but concentration limits and other controls are tailored to the nature of the activities and the
risks they create.
The Company has developed Market Risk Policy, which covers the techniques to gauge, monitor and report the impact of
interest rate and price risk implications.

38.3.1 Foreign exchange risk

Foreign Exchange Risk is the risk of loss resulting from changes in exchange rates. The Company does not carry any
product specific Foreign Exchange Risk.

2016
Off - Net
Assets Liabilities balance currency
sheet items exposure
(Rupees in '000)
Pakistan Rupees 18,590,647 9,148,512 222,392 9,664,527
US Dollars 7,515 - - 7,515
Euros 309 - - 309
18,598,471 9,148,512 222,392 9,672,351

2015
Off - balance Net
Assets Liabilities sheet items currency
(Rupees in '000) exposure

Pakistan Rupees 22,408,194 14,027,799 - 8,380,395

US Dollars 813,036 - - 813,036
Euros 47 - - 47
23,221,277 14,027,799 - 9,193,478

38.3.2 Equity position risk

The objective of 'Held for Trading' portfolio is to take advantages of short-term capital gains, while the 'Available for
Sale' portfolio is maintained with a medium-term view of capital gains and dividend income. The Company has also
invested in mutual funds categorize as "Available for Sale". Investment policy has been developed to discuss in detail the
objectives / policies, risks / mitigates, limits / controls for exposures against price risk.

38.3.3 Yield / Interest Rate Risk in the Banking Book (IRRBB)-Basel II/III Specific

The Company's Banking Book consists of significant amount of Interest Rate sensitive assets. The investment portfolio
comprises of floating interest rate TFCs and Sukuk that are mainly linked to six month KIBOR. Therefore, the overall
 frequency of banking book interest rate is around six months. Interest rate position for on-balance sheet instruments is
based on the earlier of contractual re-pricing or maturity date, the instrument’s repayment nature varies from monthly
payments to bullet maturity.

Capital Adequacy Stress test exercise has been conducted by using duration method for measuring the upward and
downward shocks of interest rate. This provides the Company risk taking and absorption capacity and its implication on
capital adequacy in the worst case scenarios.
PAIR INVESTMENT COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2016

38.3.4 Mismatch of interest rate sensitive assets and liabilities

2016
Exposed to yield / interest risk
Effective Non-interest
yield / Over 1 Over 3 Over 6 Over 5 bearing
Total Upto one Over 1 year Over 2 year Over 3 year Over 10
interest month to 3 months to 6 months to 1 year to 10 financial
rate month to 2 years to 3 years to 5 years years instruments
months months year year

---------------------------------------------------------------------------------------------- (Rupees in '000) ----------------------------------------------------------------------------------------------

On-balance sheet financial instruments
Assets
Cash and balances with
treasury banks 0.03% 64,205 525 - - - - - - - - 63,680
Balances with other banks 3.87% 432,783 432,783 - - - - - - - - -
Lendings to financial - - -
institutions - - - - - - - - - - -
Investments - net 7.20% 11,842,973 1,674,440 4,157,544 1,206,870 2,039,635 - 1,337,549 320,918 - - 1,106,017
Advances - net 7.66% 5,424,351 2,242,284 1,379,615 716,676 462,543 4,087 2,881 5,291 287,649 12,866 310,459
Other assets - net 0.00% 313,599 - - - - - - - - - 313,599
18,077,911 4,350,032 5,537,159 1,923,546 2,502,178 4,087 1,340,430 326,209 287,649 12,866 1,793,755

Liabilities
Borrowings from
financial institutions 6.05% 6,549,981 5,307,749 650,000 312,500 3,288 47,066 45,583 91,167 92,628 - -
Deposits and other accoun 6.39% 2,079,728 233,696 1,282,599 494,733 68,480 - - - - - 220
Other liabilities - net 0.00% 518,803 - - - - - - - - - 518,803
9,148,512 5,541,445 1,932,599 807,233 71,768 47,066 45,583 91,167 92,628 - 519,023
On-balance sheet gap 8,929,399 (1,191,413) 3,604,560 1,116,313 2,430,410 (42,979) 1,294,847 235,042 195,021 12,866 1,274,732

Non financial net assets 520,560

Total net assets 9,449,959

PAIR INVESTMENT COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2016

2016
Exposed to yield / interest risk
Effective Non-interest
yield / Over 1 Over 3 Over 6 Over 5 bearing
Total Upto one Over 1 year Over 2 year Over 3 year Over 10
interest month to 3 months to 6 months to 1 year to 10 financial
rate month to 2 years to 3 years to 5 years years instruments
months months year year

---------------------------------------------------------------------------------------------- (Rupees in '000) ----------------------------------------------------------------------------------------------

Off-balance sheet financial instruments

Equity Future - - - - - - - - - - -

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

Forward borrowings
(including call borrowing,
repurchase agreement borrowing, - - - - - - - - - - -
etc.)

Off-balance sheet gap - - - - - - - - - - -

Total yield / interest

risk sensitivity gap 8,929,399 (1,191,413) 3,604,560 1,116,313 2,430,410 (42,979) 1,294,847 235,042 195,021 12,866 1,274,732

Cumulative yield /
interest risk sensitivity 8,929,399 (1,191,413) 2,413,147 3,529,460 5,959,870 5,916,891 7,211,738 7,446,780 7,641,801 7,654,667 8,929,399
gap
PAIR INVESTMENT COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2016

2015
Exposed to yield / interest risk
Effective Non-interest
yield / Over 1 Over 3 Over 6 bearing
Total Upto one Over 1 year to Over 2 year to Over 3 year Over 5 year Over 10
interest month to 3 months to 6 months to 1 financial
rate month 2 years 3 years to 5 years to 10 year years instruments
months months year

---------------------------------------------------------------------------------------------- (Rupees in '000) ----------------------------------------------------------------------------------------------

On-balance sheet financial instruments
Assets
Cash and balances with
treasury banks 0.01% 46,114 46,114
Balances with other banks 4.37% 215,426 215,426
Lendings to financial
institutions 0.00% -
Investments - net 7.87% 18,543,009 817,874 2,152,969 4,340,671 6,052,209 1,060,643 345,961 2,696,610 - - 1,076,072
Advances - net 8.53% 3,502,948 849,076 964,561 659,673 327,879 3,617 3,007 4,414 284,999 16,921 388,801
Other assets - net 0.0% 462,778 462,778
22,770,275 1,882,376 3,117,530 5,000,344 6,380,088 1,064,260 348,968 2,701,024 284,999 16,921 1,973,765
Liabilities
Borrowings from
financial institutions 6.41% 11,652,435 7,247,343 3,677,996 437,500 16,446 273,150
Deposits and other accoun 7.29% 1,890,502 170,354 1,706,608 13,460 80
Other liabilities - net 0.00% 484,862 484,862
14,027,799 7,417,697 5,384,604 450,960 - - 16,446 - 273,150 - 484,942

On-balance sheet gap 8,742,476 (5,535,321) (2,267,074) 4,549,384 6,380,088 1,064,260 332,522 2,701,024 11,849 16,921 1,488,823

Non financial net assets 451,002

Total net assets 9,193,478

PAIR INVESTMENT COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2016

2015
Exposed to yield / interest risk
Effective Non-interest
yield / Over 1 Over 3 Over 6 bearing
Total Upto one Over 1 year to Over 2 year to Over 3 year Over 5 year Over 10
interest month to 3 months to 6 months to 1 financial
rate month 2 years 3 years to 5 years to 10 year years instruments
months months year

---------------------------------------------------------------------------------------------- (Rupees in '000) ----------------------------------------------------------------------------------------------

Off-balance sheet financial instruments

Equity Future - - - - - - - - - - -

Forward Lending - - - - - - - - - - -
(including call lending, repurchase
agreement lending, commitments to
Forward borrowings - - - - - - - - - - -
extend
(including calletc.)
credit, borrowing, repurchase
agreement
Off-balanceborrowing,
sheet gap etc.) - - - - - - - - - - -

Total yield / interest risk

sensitivity gap 8,742,476 (5,535,321) (2,267,074) 4,549,384 6,380,088 1,064,260 332,522 2,701,024 11,849 16,921 1,488,823

Cumulative yield /
interest risk sensitivity 8,742,476 (5,535,321) (7,802,395) (3,253,011) 3,127,077 4,191,337 4,523,859 7,224,883 7,236,732 7,253,653 8,742,476
gap
38.4 Liquidity risk

The Company's approach to liquidity management is to ensure, that it will always have sufficient liquidity to meet its obligations when due, under both normal and stressed conditions without
incurring unacceptable losses or risking sustained damage.

Liquidity risk policy has been designed that entails careful monitoring and control of the daily liquidity position, and regular liquidity stress tests under a variety of scenarios. Scenarios
encompass both normal and stressed market conditions, including general market crises and the possibility that access to markets could be impacted by a stress event affecting some part of the
Company’s business.
The Company has developed Liquidity Risk Policy, which covers the techniques to gauge, monitor and report the impact of potential liquidity risk indicators and its implications.

38.4.1 Maturity of assets and liabilities

The maturity profile has been prepared on the basis of contractual maturities and the position is discussed by the Assets and Liabilities Management Committee (ALCO) on monthly basis. The
withdrawal pattern of these cash flows reflects a more meaningful analysis of the liquidity risk of the Company.
PAIR INVESTMENT COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2016

38.4.1.1 Maturities of assets and liabilities

2016
Total Upto One Over 1 Over 3 Over 6 Over 1 Over 2 Over 3 Over 5 Over 10
month month to 3 months to 6 months to 1 years to 2 years to 3 years to 5 years to 10 years
months months year years years years years
----------------------------------------------------------------------------------------- (Rupees in '000) -----------------------------------------------------------------------
Assets ###
Cash and balances with treasury banks 64,205 64,205 - - - - - - - -
Balances with other banks 432,783 432,783 - - - - - - - -
Lendings to financial institutions - - - - - - - - - -
Investments - net 11,842,973 536,433 4,043,715 1,240,364 2,155,380 281,086 1,436,797 673,146 1,476,052 -
Advances - net 5,424,351 561,343 152,771 286,771 1,234,740 866,635 1,005,118 693,776 601,106 22,091
Operating fixed assets 176,982 - - - - - - - - 176,982
Deferred tax asset - net 238,128 - - - - - - - - 238,128
Other assets - net 419,049 50,996 16,335 137,639 108,629 - - - - 105,450
18,598,471 1,645,760 4,212,821 1,664,774 3,498,749 1,147,721 2,441,915 1,366,922 2,077,158 542,651
Liabilities ###
Borrowings from financial institutions 6,549,981 5,307,749 525,000 62,500 190,788 172,066 108,083 91,167 92,628 -
Deposits and other accounts 2,079,728 233,696 1,282,599 494,813 68,620 - - - - -
Other liabilities - net 518,803 314,965 186,286 17,552 - - - - - -
9,148,512 5,856,410 1,993,885 574,865 259,408 172,066 108,083 91,167 92,628 -
###
Net assets 9,449,959 (4,210,650) 2,218,936 1,089,909 3,239,341 975,655 2,333,832 1,275,755 1,984,530 542,651
###
Represented by: ###
Share capital 6,000,000 ###
Reserves 794,107 ###
Unappropriated profit 2,572,774 ###
Surplus on revaluation of assets-net of deferred 83,078 ###
tax 9,449,959 ###
PAIR INVESTMENT COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2016

2015
Total Upto One Over 1 month Over 3 Over 6 Over 1 years Over 2 years Over 3 years Over 5 years Over 10 years
month to 3 months months to 6 months to 1 to 2 years to 3 years to 5 years to 10 years
months year
----------------------------------------------------------------------------------------- (Rupees in '000) -----------------------------------------------------------------------
Assets
Cash and balances with treasury banks 46,114 46,114 - - - - - - - -
Balances with other banks 215,426 215,426 - - - - - - - -
Lendings to financial institutions - - - - - - - - - -
Investments - net 18,543,009 158,234 2,180,418 3,646,364 6,285,379 1,493,102 617,703 2,999,957 1,161,852 -
Advances - net 3,502,948 228,998 341,009 149,480 417,816 834,004 758,315 448,337 324,989 -
Operating fixed assets 191,311 - - - - - - - - -
Deferred tax asset - net 259,691 - - - - - - - - -
Other assets - net 462,778 52,711 24,866 368,582 11,719 4,900 - - -
23,221,277 701,483 2,546,293 4,164,426 6,714,914 2,332,006 1,376,018 3,448,294 1,486,841 -
Liabilities
Borrowings from financial institutions 11,652,435 7,250,631 3,456,663 62,500 190,788 381,576 173,877 136,400 - -
Deposits and other accounts 1,890,502 170,354 1,706,608 13,460 80 - -
Other liabilities - net 484,862 219,805 30,787 229,370 - 4,900 - - - -
14,027,799 7,640,790 5,194,058 305,330 190,868 386,476 173,877 136,400 - -

Net assets 9,193,478 (6,939,307) (2,647,765) 3,859,096 6,524,046 1,945,530 1,202,141 3,311,894 1,486,841 -

Represented by:
Share capital 6,000,000
Reserves 673,449
Unappropriated profit 2,390,166
Surplus on revaluation of assets-net of deferred 129,863
tax 9,193,478
PAIR INVESTMENT COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2016

38.5 Operational risk

Operational risk is the risk of loss resulting from inadequate or failed internal processes, people and system or from
external events. PAIR Investment Company, in the light of SBP guidelines on Operational Risk Framework via
BPRD Circular# 04-2014 dated May 20, 2014, has developed Operational Risk Management Framework
considering the regulatory guidelines and best practices in the market. The internal and regulatory reporting
pertaining to Operational Risk Management shall start from 1st Quarter CY`17, as timelines defined by the
regulator. Once the freamework is implemented, the Company will be able to manage operational risks in a more
systematic way that includes analyzing current systems for data collection, migration, validation and retention for
current and historical reference and calculation.

38.5.1 Operational risk disclosure - Basel II/III specific

Basic Indicator approach of Basel II/ III has been used to calculate Operational Risk charge of the Company.

39 RECLASSIFICATION

For the better presentation of financial statements, the figures have been reclassified as follows:

From To Rs in '000
Investments Other assets 264,364

. GENERAL

40.1 These financial statements were authorized for issue on ______________________ by the Board of Directors of the
Company.

40.2 The Pakistan Credit Rating Agency Limited (PACRA) has maintained the long term entity rating to AA (Double A)
and the short term rating at A1+ (A one plus) of the Company.

40.3 The Board of Director of the Company has proposed cash dividend of _____________ (2015: Rs. 300 million) for
the year ended December 31, 2016 in their meeting held on ________________. These financial statements do not
include the effect of this appropriation which will be accounted for subsequent to the year end.

____________________ ______________________
Chief Financial Officer Chief Executive Officer /
Managing Director

____________ __________________ ____________ ____________

Chairman Chief Executive and Director Director
Managing Director
PAIR Investment Company Limited
Dr. Cr.
ASSETS 18,597,487
CASH AND BALANCES WITH TREASURY BANKS 64,205
In hand 712
Local currency 03-002-006-0008 Petty Cash Imprest 70 - 70 - 70
Foreign currency 03-002-006-0010 Foreign Currency in Hand - USD 239 - 239 - 642
03-002-006-0014 Foreign Currency in Hand - Euro 403 - 403 -

With State Bank of Pakistan in 62,960

Local currency current account 03-002-006-0001 SBP Current Account 62,960 - 62,960 - 62,960
With National Bank of Pakistan in 533
Local currency current account 03-002-006-0005 NBP 1500-6 Current A/c FTC Branch. 8 - 8 - 8
Local currency deposit account 03-002-006-0004 NBP NIDA Account FTC Branch 525 - 525 - 525

BALANCES WITH OTHER BANKS 432,783

Current accounts 03-002-006-0006 HBL Plaza Main Branch Karachi. 6 - 6 - 6 4,509
03-002-006-0009 MCB Bank Ltd. Stock Exchange Branch 1,474 - 1,474 - 1,474
03-002-006-0011 Bank Islami Sana Arcade Clifton Br - Current a/c# 130104-001 - - - - -
03-002-006-0013 Allied Bank Ltd. Bath Island Clifton Br - Current a/c# 0010005409840014 11 - 11 - 11
03-002-006-0017 Allied Bank - Ocean Tower Br Current a/c 3,018 - 3,018 - 3,018

Deposit balances 03-002-006-0002 Askari Bank Attrium Mall Branch 64 - 64 - 64 428,274

03-002-006-0003 MCB Bank Ltd. PIDC Branch 15 - 15 - 15
03-002-006-0007 UBL Unisaver Plus City Branch 65 - 65 - 65
03-002-006-0012 Bank Islami Sana Arcade Clifton Br - PLS a/c# 130104-121 122 - 122 - 122
03-002-006-0015 Bank Islami Sana Arcade Clifton -Dividend Account # 0019-134878-121 32 - 32 - 32
03-002-006-0016 Burj Bank - Dividend A/c 0005014586000002 3,419 - 3,419 - 3,419
03-002-006-0018 Allied Bank -Ocean Tower Br PLS a/c # 0010000001180075 118,176 - 118,176 - 118,176
03-002-006-0020 Allied Bank - Ocean Tower GF A/c - - - - -
03-002-006-0019 Allied Bank - Ocean Tower Br-Dividend a/c 306,381 - 306,381 - 306,381

LENDINGS TO FINANCIAL INSTITUTIONS -

Letter of Placement 03-002-002 LENDINGS / PLACEMENTS - - - - -

INVESTMENTS 11,842,973
Held to maturity -
Commercial paper 03-002-009 INVESTMENT IN COMMERCIAL PAPERS - - - - -
03-003-003 ACCRUED INCOME - COMMERCIAL PAPERS - - - -

Unlisted preference shares 03-002-020 INVESTMENT IN SHARES HTM - - - - -

03-003-020 ACCRUED INCOME ON PREF SHARES - HTM - - - -
Held for Trading 327,030
Shares in listed companies 03-002-011 INVESTMENT IN SHARES (HFT) 4,213 - 4,213 - 4,215
03-002-011-0998 MTM_Investment in Shares-HFT - 2 - 2
03-002-011-0999 MTM on Future Contracts - Derivatives - - - -

Units in mutual funds 03-002-019 INVESTMENT IN OPEN END MUTUAL FUND_ HFT - - - - -

Market treasury bills 03-002-021 INVESTMENT IN T-BILLS - HFT

03-002-021-0001 INVESTMENT IN T-BILLS HFT - - - - -
03-003-021 ACCRUED INCOME ON T-BILLS - HFT
03-003-021-0001 ACCRUED INCOME ON T-BILL HFT - - - -

Investment in PIB - HFT 03-002-023-0001 Investment in PIB HFT 300,000 - 300,000 - 322,815
03-002-023-0003 PRemium/Discount PIB HFT 22,815 - 22,815 -

Available for sale 11,415,737

Market treasury bills 03-002-001-0004 Investment in T-Bills 5,333,708 - 5,333,708 - 5,441,358
03-003-006-0001 Income Receivable on T-Bills 107,650 - 107,650 -

Units in mutual funds 03-002-008 INVESTMENTS IN CLOSED ENDMUTUAL FUNDS - - - - -

Units in mutual funds 03-002-012 INVESTMENT IN OPEN END MUTUAL FUND 803,048 - 803,048 - 800,000
03-002-012-0998 MTM_Investment in Open End Fund-AFS 3,048 - 3,048 -

Shares in listed companies 03-002-007 INVESTMENT IN SHARES (AFS) 260,479 - 260,479 - 242,247
Strategic Investment 03-002-007-0047 Strategic Investment - Burj Bank (FormerlY Dawood Islamic Bank Ltd) - - - - -
03-002-007-0998 MTM_Investment in Shares-AFS 18,232 - 18,232 -

Shares in listed companies 03-002-027 INVESTMENT IN SHARES - CIBG PORTFOLIO 18,597 - 18,597 - 18,597

Sukuk bonds 03-002-016 INVESTMENT IN SUKKUK 255,468 - 255,468 - 255,468

03-002-016-0998 MTM_Investment in Sukkuk-AFS - - - -

Term finance certificates - Listed 03-002-014 INVESTMENT IN LISTED TFC's 1,350,638 - 1,350,638 - 1,330,993
03-002-014-0998 MTM_Investment in Listed TFC's-AFS 19,645 - 19,645 -

Term finance certificates - Unlisted 03-002-015 INVESTMENT IN PP - TFC's 1,294,856 - 1,294,856 - 1,294,856
03-002-015-0998 MTM_Investment in PPTFC's-AFS - - - -

Investment in PIB - AFS 03-002-022-0001 Investment in PIB AFS 1,950,000 - 1,950,000 - 2,032,218
03-002-022-0002 Premium/Discount on PIB AFS (Asset) 82,218 - 82,218 -

Provision for diminution in value of investents (12,571)

03-002-013-0003 Povision for diminution in value of investments - 12,571 - 12,571 (12,571)

Surplus/(deficit) on revaluation of AFS 114,697

OEMF MTM_Investment in Open End Fund-AFS - - 3,048 - 3,048
Shares MTM_Investment in Shares-AFS - - 18,232 - 18,232
TFCs MTM_Investment in Listed TFC's-AFS - - 19,645 - 19,645
PP-TFC MTM_Investment in PPTFC's-AFS - - - - -
PIB 03-002-022-0100 MTM Investmnet in PIB AFS 76,127 - 76,127 - 76,127
T-Bills 03-002-001-0998 MTM_Investment in T-Bill_AFS - 2,355 - 2,355 (2,355)
 Surplus / (deficit) on revaluation of held for trading securities (1,920)
Shares MTM_Investment in Shares-HFT - - - 2 (2)
Derivatives MTM on Future Contracts - Derivatives - - - - -
T-Bills 03-002-021-0100 MTM Investment in T-Bills HFT - - - - -
PIBs 03-002-023-0002 MTM Investment in PIB HFT - 1,918 - 1,918 (1,918)

ADVANCES 5,424,353
Loans, cash credits, finances etc. 5,800,128
03-002-017 LOANS AND ADVANCES 5,101,148 - 5,101,148 - 6,083,148
03-002-013-0001 Investments in (Pre IPO)- TFCs 732,000 - 732,000 -
03-002-013-0002 Advance Against Issuance of Sukkuk 250,000 - 250,000 -

SBP Refinance 283,020

03-002-017-0010 Syndicated Term Finance Facility-SBP Refinance-(Fauji Akbar Portia Marine Termina 9,870 - 9,870 - 283,020
03-002-017-0066 Term Finance Facility - Gul Ahmed Textile Mills Ltd 8 yr LTTF 273,150 - 273,150 -

Bill Discounted and Purchased 24,718

03-002-026 BILL DISCOUNTED & PURCHASES 24,718 - 24,718 - 24,718

Staff loans 44,618

03-002-005-0002 Loans to Staff 44,618 - 44,618 - 44,618

Net investment in finance lease 129,748

Lease rentals receivable 03-002-024 GROSS INVESTMENT IN FINANCE LEASE 152,298 - 152,298 - 129,748
Finance charge for future periods 02-001-002 UNEARNED FINANCE LEASE RENTAL - 22,550 - 22,550

Provision against non-performing loans and advances (857,879)

03-002-001-0009 Provision against advance for term finance - 782,879 - 782,879 (857,879)
03-002-001-0011 Provision against advance against TFC's - 75,000 - 75,000
03-002-001-0012 Provision against loan to staff - - - -
03-002-001-0013 Provision against non performing loans & advances - General - - - -
OPERATING FIXED ASSETS 176,982
Capital Work In Progress - - -
03-001-004 Capital Work In Progress - - - - -
03-001-004-0001 Capital Work In Progress - - - -

Property and equipment 176,708

Cost 03-001-001 TANGIBLE ASSETS 262,767
03-001-001-0001 Office Equipments 13,863 - 13,863 -
03-001-001-0002 Computers 21,731 - 21,731 -
03-001-001-0003 Furniture & Fixtures 35,424 - 35,424 -
03-001-001-0004 Motor Vehicles 37,406 - 37,406 -
03-001-001-0005 Generator - - - -
03-001-001-0006 Land & Building 154,343 - 154,343 -
- -
Accumulated Depreciation 03-001-003 ACCUMULATED DEPRECIATION / AMORTIZATION - - (86,059)
03-001-003-0001 Accumulated Dep - Office Equipments - 12,388 - 12,388
03-001-003-0002 Accumalated Dep - Computers - 19,108 - 19,108
03-001-003-0003 Accumalated Dep - Furniture & Fixtures - 31,459 - 31,459
03-001-003-0004 Accumulated Dep - Vehicles - 23,104 - 23,104
03-001-003-0005 Accumalated Dep - Generator - - - -

Intangibles 03-001-002 INTANGIBLE ASSETS - - 274

Cost 03-001-002-0001 Software Licences 18,722 - 18,722 - 18,722
Accumulated Depreciation 03-001-003-0100 Accumalated Amortization Software Licence - 18,448 - 18,448 (18,448)

DEFERRED TAX ASSET - Net 238,128

03-002-010 DEFERRED TAX ASSETS 238,128 - 238,128 - 238,128

OTHER ASSETS 418,063

A Income / mark-up accrued in local currency 418,063 418,063
03-003-001 ACCRUED INCOME - BRIDGE FINANCE - - - - - 281,187

Placements 03-003-002 ACCRUED INCOME - PLACEMENT - 115 - 115 (115)

Sukkuk & T-BILL 03-003-004 ACCRUED INCOME - SUKKUK 13,519 - 13,519 - 13,519

Term Finance Certificates 03-003-005 ACCRUED INCOME - TFC's 148,649 - 148,649 - 39,686
03-003-005-0001 Income Receivable - TFCs Dewan Cement 108,963 - 108,963 -

03-003-007 ACCRUED INCOME - BANKS - -

03-003-007-0001 Income Receivable on Banks - - - - -
03-003-009 ACCRUED INCOME - COMMISSIONS - -
03-003-009-0001 Commission & Fee Income Receivable 973 - 973 - 973
03-003-010 ACCRUED INCOME - CFS - -
03-003-010-0001 Inome Receivable on CFS - - - - -
 Term Finance Facilities & Adv. TFCs 03-003-011 ACCRUED INCOME - TERM FINANCE FACILITIES 597,905 - 597,905 - 707,394
03-003-005-0001 Income Receivable - TFCs Dewan Cement 108,963 - 108,963 -
03-003-025 ACCRUED INCOME - BILL DISCOUNTING 526 - 526 -

Interest receivable Finance Lease 03-003-024 ACCRUED INCOME ON FINANCE LEASE - - - - -

Accrued Income on PIB AFS 112,836

03-003-022-0001 Accrued Income on PIB AFS 105,449 - 105,449 -
03-003-023-0001 Accrued Income on PIB HFT 7,387 - 7,387 -

03-003-012 ACCRUED INCOME - PLEDGE FINANCE FACILITY - - -

03-003-012-0001 Income Receivable on Pledge Finance - Matiari Sugar Mills - - - -
03-003-013 ACCRUED INCOME - SBP REFINANCE - - - -
03-003-018 ACCRUED INCOME - TDR - - - -
03-003-019 ACCRUED FEE & COMMISSION INCOME - - -
03-003-019-0101 Fee & Commission Income Receivable - South - - - -
03-003-019-0102 Fee & Commission Income Receivable - Nprth - - - -
Suspense a/c (593,106)
03-002-004-0006 Markup Suspense A/c - 593,106 - 593,106
B. Dividend Receivable 1,054 1,054
03-003-008-0001 Dividend Income Receivable 1,054 - 1,054 -
C. Security Deposit 7,231 7,231
03-002-005-0007 Security Deposits 1,938 - 1,938 -
03-002-005-0008 Security Deposits - Office Premises 5,293 - 5,293 -
D. Advances, deposits, advance rent and other prepayments 23,141
03-002-004-0028 Receivable from PAIR Investment Employee Gratuity fund - - - - -

03-002-005 ADVANCES, DEPOSITS & PREPAYMENTS 10,727

03-002-005-0003 Prepaid Office Rent 5,282 - 5,282 -
03-002-005-0004 Prepaid Insurance 1,991 - 1,991 -
03-002-005-0005 Other Prepayments 1,948 - 1,948 -
03-002-005-0009 Advance to EY Fords Rhodes - - - -
03-002-005-0010 Deposit from Eden Housing - - - -
03-002-005-0011 Advance against LFA - - - -
03-002-004-0024 Others 4 - 4 -
03-002-004-0025 Salaes Tax Claimable - (Input Sales Tax) 1,502 - 1,502 -
Other Receivable 4,556
03-002-004-0010 Others Receivable 4,556 - 4,556 -
Advances against Expenses 294
03-002-005-0006 Advance against expenses 294 - 294 -
Advances to Staff -
03-002-005-0001 Advances to Staff - - - -
Receivable from IFIC (US $ 65-K) 7,564
03-002-004-0022 Receivable from IFIC (Related party) 7,564 - 7,564 -

Receivable from brokers/NCCPL 03-004-001 RECEIVABLES FROM BROKERS - - -

E. Non-Banking Assets acquired in satisfaction of claims 105,450 105,450
03-002-004-0105 Non-Banking Assets acquired in satisfaction of claims 105,450 - 105,450 -
LIABILITIES 24,061,083
BORROWINGS 8,629,709
Borrowings from SBP 02-002-005 BORROWINGS - SBP REFINANCE 283,020 283,020
02-002-005-0001 - 9,870 - 9,870
02-002-005-0002 - 273,150 - 273,150

Repurchase agreement borrowings 02-002-001 BORROWINGS FROM FINANCIAL INSTITUTIONS - 6,404,461 - 6,404,461 6,404,461 6,404,461

Borrowing from NBFI's 02-002-002 BORROWING FROM NBFI's - - - - - -

Borrowing from DFI's 02-002-003 BORROWING FROM DFI's - - - - - -

Borrowing against T-Bills 02-002-004 BORROWING AGAINST T-BILLS - - - - - -

Term borrowings 02-002-007 Borrowings- Term Finance Facility - 562,500 - 562,500 562,500 562,500
Borrowing - Commercial Paper 02-002-008 Borrowing - Commercial Paper - - - - - -
Borrowings againstCOI 02-002-006 BORROWINGS AGAINST COI - 1,379,728 - 1,379,728 1,379,728 1,379,728

OTHER LIABILITIES 15,431,374

E Markup in local currency 40,966 40,966
02-003-003-0001 Markup Payable on Borrowing - 21,295 - 21,295
 02-003-003-0002 Markup Payable on Borrowing NBFI's - - - -
02-003-003-0003 Markup Payable on Borrowing DFI'S - - - -
02-003-003-0004 Markup Payable on Borrowing T-BILLS - - - -
02-003-003-0005 Markup Payable on Borrowing SBP REFINANCE - 1,632 - 1,632
02-003-003-0006 Markup Payable on Borrwoing COI - - - -
02-003-006 Markup payable on COIs - 9,779 - 9,779
02-003-007 Markup payable on Term Borrowing - 8,260 - 8,260

Payable to an associated Undertaking 4,900

02-003-004-0004 Payable to IFIC (Related Party) - 4,900 - 4,900 4,900
Accrued Expenses 7,977 7,977
02-003-002-0001 Brokerage & Commission Payable on Money & Equity Market 32 - 32 -
02-003-002-0002 Salaries Payable 3 - 3 -
02-003-005 Payable to Suppliers - 733 - 733
02-003-004-0001 Other Payable - 4,498 - 4,498
02-003-004-0008 Payable against purchase of Assets 242 - 242 -
02-003-004-0011 Payable to Trust Inv Bank - 91 - 91
02-003-004-0012 Advance Fee - - - -
02-003-003-0014 Provision for Legal & Prof. Charges - 60 - 60
02-003-003-0013 Provision for Tax Consultancy Exp. - 81 - 81
02-003-003-0015 Provision for Electricity Exp. - - - -
02-003-003-0016 Provision for Water Exp. - - - -
02-003-003-0017 Provision for Telephone Exp. - - - -
02-003-003-0018 Provision for Brokerage Exp. - - - -
02-003-003-0026 Provision against customer fee - 177 - 177
02-003-003-0027 Provision against Software Support Fee - - - -
02-003-003-0028 Accrued Expenses - 2,657 - 2,657
02-003-003-0023 Provision for Medical Expenses 43 - 43 -
02-003-003-0029 Provision for Charity & Donation - - - -
02-003-003-0022 Provision for WWF - - - -
Staff EOBI Payable 34
02-003-004-0015 EOBI Payable - 34 - 34 34
Government levies payable 2,896
02-003-002-0007 Federal Excise Duty Payable - 2,896 - 2,896 2,896
Withholding Tax Payable 788
02-003-002-0005 Withholding Tax Payable - 788 - 788 788
Sales Tax Payable (441)
02-003-002-0011 Sales Tax Payable - (Output Sales Tax) - 874 - 874 (441)
02-003-002-0012 Witholding Tax on Sales Tax - 3 - 3
02-003-002-0013 Sales tax payable - arrears of demand 1,318 - 1,318 -

Q Provision for taxation - net 89,387

02-003-004-0003 Income Tax Payable - Current - 1,563,730 - 1,563,730 89,387
03-002-004-0009 Tax Deducted at Source (Mobile) 21 - 21 -
03-002-004-0011 Tax Deducted at Source 1,579,274 - 1,579,274 -
03-002-004-0012 Tax Deducted at Source (Electricity) 1,658 - 1,658 -
03-002-004-0013 Tax Deducted at Source (Telephone) 402 - 402 - 14,916,702
03-002-004-0020 Tax Deducted at Source (Vehicle) 539 - 539 -
03-002-004-0023 Surcharge on Income Tax deducted at source 3,359 - 3,359 -
02-003-004-0014 Income Tax Payble - FY 2015 - 281,672 - 281,672
02-003-004-0016 Income Tax Payble - FY 2016 - 229,584 - 229,584
03-002-004-0018 Tax Deducted at Source FY 2015 243,245 - 243,245 -
03-002-004-0026 Tax deducted at source FY 2016 157,101 - 157,101 -
02-003-002-0008 Surcharge 15% on Withholding Tax Payable - - - -
Provision for compensated absences -
02-003-003-0021 Provision for Leave Encashment - - - - -
Provision for gratuity (784)
02-003-003-0019 Provision for Gratuity 784 - 784 - (784)
Provision for bonus to employees 20,000
02-003-003-0020 Provision for Bonus - 20,000 - 20,000 20,000
Dividend payable 300,000
02-003-004-0013 Dividend Payable (related party) - 300,000 - 300,000 300,000
Provison for Audit Fee 1,627
02-003-003-0012 Provision for Audit Fee - 1,627 - 1,627 1,627
Provision for Board Expenses -
02-003-003-0030 Provision for Board Expenses - - - - -
Provision for Bonus CEO 22,800
02-003-003-0031 Provision for Bonus CEO - 22,800 - 22,800 22,800
Provision for Eid Bonus -
 02-003-003-0032 Provision for Eid Bonus - - - - -
Other Porivisons 955
02-003-003-0033 Provision for Director Fee - - - - 955
02-003-003-0034 Provision for Rent - - - -
02-003-003-0035 Provision for Insurance - - - -
02-003-003-0036 Provison for Tehran Office Expenses - - - -
02-003-003-0037 Provision for Consultancy Fees - - - -
02-003-003-0038 Provision for - Maintainence charges Ocean Mall - 955 - 955
Staff Provident Fund Payable 21
02-003-004-0002 Staff Provident Fund Payable - 21 - 21 21
Provision for Salaries & benefits -
02-003-003-0024 Provision for Salaries - - - - -
Provision for LFA -
02-003-003-0025 Provision for LFA - - - - -

179
Payable Brokerage/NCCPL 03-004-001 RECEIVABLES FROM BROKERS - 179 - 179 179

Advance Insurance Premium on Lease 02-001-004 Advance Insurance Premium - 265 - 265 265 265

Finance Lease Deposits 02-001-003 FINANCE LEASE DEPOSITS - 23,102 - 23,102 23,102 23,102

NET ASSETS (5,463,596)

REPRESENTED BY 8,847,199
Share Capital 6,000,000
Paid up Capital 01-001-001-0001 Paid up Capital - 6,000,000 - 6,000,000 6,000,000
Advance against Issue of Shares 01-001-002-0001 Advance against Issue of Shares - - - -

Reserves 673,449
General Reserve 01-002-001-0001 General Reserve - - - - 673,449
Reserve for Issue of Bonus Shares 01-002-001-0003 Reserve for Issue of Bonus Shares - - - -
Statutory Reserve 01-002-002-0001 Statutory Reserve - 673,449 - 673,449

Un-Appropriated Profit 2,090,672

01-003-001-0001 Un-Appropriated Profit - 2,090,672 - 2,090,672 2,090,672

Surplus on revaluation of assets - net of deferred tax 83,078

PIBs - Equi 01-004-001-0001 Surplus/ (Deficit) on Reval. of PIBs-Equi - - - - -
T-Bills 01-004-001-0002 Surplus/ (Deficit) on Reval. of T-Bills 2,355 - 2,355 - (2,355)
TFC - HTM 01-004-001-0003 Surplus/ (Deficit) on Reval. of TFCs-HTM - - - - -
TFC - AFS 01-004-001-0004 Surplus/ (Deficit) on Reval. of TFCs-AFS - 19,645 - 19,645 19,645 19,645
Equity - P 01-004-001-0005 Surplus/ (Deficit) on Reval. of Equity-P - - - - -
Open end Mutual Funds 01-004-001-0006 Surplus/ (Deficit) on Reval. of Open End Mutual Fund - 3,048 - 3,048 3,048
Closed end Mutual Funds 01-004-001-0007 Surplus/ (Deficit) on Reval. of Closed End Mutual Fund - - - -
Quoted Equity Shares 01-004-001-0008 Surplus/ (Deficit) on Reval. of Shares - 18,232 - 18,232 18,232
Sukuks 01-004-001-0009 Surplus / (Deficit) on Reval. of Sukkuk - - - - -
Commercial Paper 01-004-001-0011 Surplus / (Deficit) on Reval. of Commercial Paper (CP) - - - - -
PIBs 01-004-001-0012 Surplus/Deficit on Reval PIB - 76,127 - 76,127 76,127
01-004-001-0010 Related Defered Tax Assets 31,619 - 31,619 - (31,619)

INCOME 1,296,936

MARK-UP/RETURN/INTEREST EARNED 1,243,694

On loans and advances to 328,054
Term Finance 04-001-001-0002 Income from Investment in Bridge Finance - - - - 315,498
04-001-001-0006 Income from Investment in Term Finance Facilities - 315,498 - 315,498
Finance Lease 04-001-001-0010 Income on Finance Lease - 9,517 - 9,517 9,517
04-001-001-0011 Income from Bill Discounting - 957 - 957 957
Staff Finance 04-003-001-0003 Markup on Staff Loans - 2,082 - 2,082 2,082

On investments in 915,640
-Held For Trading
PIB - HFT 04-001-001-0009 Income from Investment in PIB - HFT - 59,819 - 59,819 59,819
-Available of Sale 832,484
T-Bills 04-001-001-0001 Inocme from Investment in T-Bills - 277,902 - 277,902 277,902
CFS 04-001-001-0003 Income on Investment in CFS - - - - -
Sukuks 04-001-001-0004 Income from Investments in Sukkuk - 18,956 - 18,956 18,956
TFCs 04-001-001-0005 Income on Investments - TFC's - 188,850 - 188,850 188,850
 Premium on TFC's 04-003-001-0007 Premium on TFC's 82 - 82 - (82)
PIB AFS 04-001-001-0008 Income from Investment in PIB AFS - 415,715 - 415,715 415,715
04-003-001-0009 Premium on PIB AFS 65,954 - 65,954 - (65,954)
04-003-001-0010 Premium on PIB HFT 2,903 - 2,903 - (2,903)
04-002-002-1000 Income on TDR - - - - -
04-002-002-1001 Income of Reverse Repo - - - - -
04-002-002-1002 Income on COI - - - - -
Placement Income 04-002-002-9999 Placement Income - 8,431 - 8,431 8,431 8,431

- Held to maturity securities 3,067

04-002-009 INCOME FROM COMMERCIAL PAPERS - - - - -

Preference Shares 04-001-001-0111 Income from Investment in Pref Shares - 3,067 - 3,067 3,067

Income on Bank Accounts 04-002-004-0001 Profit on NBP NIDA A/C - 6 - 6 6 11,824

04-002-004-0002 Profit on KASB PLS 0019-130104-121 - 2 - 2 2
04-002-004-0003 Profit on Askari Commercial Bank - 2 - 2 2
04-002-004-0004 Profit on UBL Unisaver A/c - 2 - 2 2
04-002-004-0005 Profit on MCB Bank Ltd. (PIDC Br.) - 1 - 1 1
04-002-004-0006 Profit on HBL - 1 - 1 1
04-002-004-0007 Profit on KASB/Burj Dividend Account - 3,873 - 3,873 3,873
04-002-004-0008 Profit on Allied Bank - 7,937 - 7,937 7,937
Misc. Income 04-003-001-0004 Misc. Income - 10 - 10 10 15
04-003-001-0008 Profit on NCCPL Margin - 5 - 5 5

NON MARK-UP / INTEREST INCOME 53,242

Ordinary shares of listed companies 04-001-002-0001 Gain / Loss on Sale of Shares 196,919 - 196,919 - (196,919) (196,919)
04-001-002-0006 Gain/Loss on Sale of Shares - Manual - - - -

Units of mutual funds 04-001-002-0002 Gain / Loss on Sale of Closed End Mutual Fund - - - - 33,504 33,504
04-001-002-0003 Gain / Loss on Sale of Open End Mutual Fund - 33,504 - 33,504

Government Securities
Pakistan investment bond 04-001-002-0007 Gain/Loass on Sale of PIB - 166,832 - 166,832 166,832 167,958
Market treasury bills 04-001-002-0004 Gain / Loss on Sale of T-Bills - 1,126 - 1,126 1,126

Term finance certificates 04-001-002-0005 Gain / Loss on Sale of TFC's - 370 - 370 370 370

Fee, commission and brokerage income 19,631

04-003-001-0001 Commission & Fee Income - 19,630 - 19,630 19,631
04-004-001-0001 LC Commission Income - 1 - 1
Dividend income 30,205
04-003-001-0002 Dividend Income - 30,205 - 30,205 30,205
Other Income 5
Gain on sale of operating fixed assets 04-003-001-0006 Gain/Loss on Sale of Fixed Assets - 5 - 5 5
- - -
Unrealized Gain / Loss on Derivative 04-002-021-0001 Unrealized Gain / Loss on Derivative - - - - -

Shares - HFT (2)

Shares - HFT 04-002-010-0001 MTM_Shares HFT 2 - 2 - (2)
Mutual Funds - HFT -
MF - HFT 04-002-010-0002 MTM_Open End Fund HFT - - - - -
Government Securities - HFT (1,918)
T-Bills - HFT 04-002-010-0003 MTM_T-Bill HFT - - - - -
PIB - HFT 04-002-010-0004 MTM PIB HFT 1,918 - 1,918 - (1,918)

Gain /(Loss) in from dealing in foreign currencies 408

04-003-001-0005 Income / (loss) on dealing in Foreign Currency - 408 - 408 408

EXPENSES 848,612
MARK-UP/RETURN/INTEREST EXPENSED 533,274
Markup on Borrowings from FI 476,231
05-002-001-0001 Markup on Borrowings 454,233 - 454,233 - 476,231
05-002-001-0004 Markup on Clean Borrowing - - - -
 05-002-001-0005 Markup on Repo Borrowing 21,998 - 21,998 -
Markup on Borrowings from SBP-Refinance 6,050
05-002-005-0001 Interest Expense - Borrowing against SBP REFINANCE 6,050 - 6,050 - 6,050
Markup on Borrowings fromTerm Borrowing 50,993
05-002-006-0001 Interest Expense on Term Borrowing - Allied Bank Limited - - - - 50,993
05-002-006-0002 Interest Expense on Term Borrowing - Allied Bank Limited 2 24,318 - 24,318 -
05-002-006-0003 Interest Expense on Term Borrowing - Allied Bank Limited 3 26,675 - 26,675 -
NET PROVISION / (REVERSAL) FOR NPL & INVESTMENTS (415,857)
Provision for dimunition in value of investments 05-004-001 PROVISION FOR DIMINUTION IN VALUE OF INVESTMENTS - 366,209 - 366,209 (366,209)
Provision against Non performing Advances 05-004-002 PROVISION AGAINST NON-PERFORMING LOANS & ADVANCES - 49,648 - 49,648 (49,648)

NON MARK-UP / INTEREST EXPENSES 315,338

ADMINISTRATIVE EXPENSES 05-001 313,975 - 315,059
A Salaries allowances and benefits 145,173
05-001-001-0001 Salary & Allowances 106,784 - 106,784 - 145,173
05-001-001-0002 Leave Encashment - 1,139 - 1,139
05-001-001-0004 Domestic Staff Salaries 504 - 504 -
05-001-001-0007 Medical / OPD (Re-Imbursements) 7,198 - 7,198 -
05-001-001-0008 Arrears - - - -
05-001-001-0009 Vehicle / Car Allowance 14,063 - 14,063 -
05-001-001-0010 Car Maintenence Allowance 792 - 792 -
05-001-001-0011 Outsource Staff / Internees 1,905 - 1,905 -
05-001-001-0012 Employees Hajj Scheme 25 - 25 -
05-001-001-0013 Leave Fare Assistance (LFA)/Eid Bonus 8,709 - 8,709 -
05-001-020-0005 Security Guards Charges 1,314 - 1,314 -
05-001-006-0001 Staff Fuel 5,018 - 5,018 -
B Bonus 38,981 42,481
05-001-001-0003 Bonus Expense 12,478 - 12,478 - 38,981
05-001-001-0015 Bonus Expenses CEO 22,800 - 22,800 -
05-001-001-0016 Eid Bonus 3,703 - 3,703 -

B Contribution to Defined contribution plan 9,216

05-001-001-0005 Company's Contribution to Provident Fund 8,597 - 8,597 - 9,216
05-001-001-0014 Company's Contribution on EOBI 619 - 619 -
C Contribution to Defined benefit plan 8,499
05-001-001-0006 Gratuity 8,499 - 8,499 - 8,499
D Non-executive director's fee 2,182
05-001-015-0001 Director's Fee 2,182 - 2,182 - 2,182
E Rent and utilities 26,473
05-001-004-0001 Rent, Rates & Taxes 18,098 - 18,098 - 26,473
05-001-004-0002 Property Tax 832 - 832 -
05-001-005-0001 Electricity Expenses 5,416 - 5,416 -
05-001-005-0002 Telephone & Fax Expenses 873 - 873 -
05-001-005-0003 Water Charges 139 - 139 -
05-001-005-0006 Gas Charges (SSGC) 22 - 22 -
05-001-005-0007 Utilities Exp MD's Residence 1,093 - 1,093 -
1,186
O Vehicle Repair & Maintenance 1,186
05-001-006-0002 Vehicle Repair & Maintenance 537 - 537 -
05-001-006-0003 Vehicle Registration Charges - - - -
05-001-006-0004 Vehicle Fuel -Admin 455 - 455 -
05-001-006-0005 Vehicle Fuel - MD CEO 194 - 194 -
- -
F Office Repair/Renovate & Maintenance - - 5,903
05-001-020-0008 Office Repair/Renovate & Maintenance 5,903 - 5,903 - 5,903
G Insurance - - 4,703
05-001-010 INSURANCE 4,703 - 4,703 - 4,703
H Communication - - 3,764
05-001-005-0004 Communication (Mobile Phones) 1,087 - 1,087 - 3,764
05-001-005-0005 Communication (Internet) 2,677 - 2,677 -
I Advertisement - - 468
05-001-020-0002 Advertisement 468 - 468 - 468
J Depreciation - - 14,957
05-001-009-0001 Deprecation Expense - Office Equipments 1,177 - 1,177 - 14,957
05-001-009-0002 Deprecation Expense - Computer 2,056 - 2,056 -
05-001-009-0003 Deprecation Expense - Furniture & Fixture 2,910 - 2,910 -
05-001-009-0004 Deprecation Expense - Vehicles 8,814 - 8,814 -
 05-001-009-0005 Deprecation Expense - Generator - - - -
K Amortisation 288
05-001-013-0001 Amortisation of Software Licences 288 - 288 - 288
L Printing and Stationery 1,706
05-001-020-0003 Printing & Stationery 1,706 - 1,706 - 1,706
M Legal and Professional charges 12,167
05-001-007-0001 Legal & Professional Charges 12,167 - 12,167 - 12,167
V Consultancy Fee 731
05-001-008-0001 Consultancy Fee 731 - 731 - 731
N Travelling, conveyance and entertainment - - 22,176
05-001-003-0001 Travelling - Air Fare 17,356 - 17,356 - 22,176
05-001-003-0002 Hotel Accommodation/Boarding-Lodging 2,802 - 2,802 -
05-001-003-0003 Conveyance 152 - 152 -
05-001-014-0001 Entertainment 1,720 - 1,720 -
05-001-014-0002 Staff Recreation 146 - 146 -
P Brokergae and commissions 3,223
05-001-020-0013 Brokerage / Commission on Money & Equity Market 3,223 - 3,223 - 3,223
Q Bank charges 452
05-002-001-0002 Bank Charges 452 - 452 - 452
R Fee and subscriptions 7,544
05-001-015-0002 CDC Transaction Fee / Charges 962 - 962 - 7,544
05-001-015-0003 Fee & Subscription 2,855 - 2,855 -
05-001-020-0009 Training, Workshop & Seminar Fee 336 - 336 -
05-001-020-0014 Software Support Service Fee 3,391 - 3,391 -

Charity and donations 774

05-001-020-0016 Charity & Donation 774 - 774 - 774

S Auditors' remuneration 05-001-012 AUDITORS REMUNERATION 1,568 - 1,568 - 1,568 1,568

T Others 2,646
05-001-020-0001 Generator Diesel 180 - 180 - 2,646
05-001-020-0004 Office General Expenses 728 - 728 -
05-001-020-0006 Postage & Courier 180 - 180 -
05-001-020-0007 News Paper, Books & Periodicals 158 - 158 -
05-001-020-0010 Computer General Expenses 432 - 432 -
05-001-020-0011 Generator Repair & Maintnence 94 - 94 -
05-001-020-0015 Misc. Expenses 249 - 249 -
05-001-020-0018 Repair & Maintenence Equipment 210 - 210 -
05-001-020-0019 Provident Funds & Gratuity Fund Expenses 59 - 59 -
05-002-001-0003 Federal Excise Duty (FED) 356 - 356 -
U WWF expense -
05-001-020-0012 WWF Charges - - - - -

OTHER CHARGES/ (REVERSALS) - Net 279

Penalties imposed by State Bank of Pakistan 05-002-001-0006 SBP Penalty 279 - 279 - 279

05-003-004 PROVISION FOR DIMINUTION IN VALUE OF INVESTMENTS - - - -

TAXATION 257,800
Current tax 05-003-001 TAXATION (CURRENT) 214,558 - 214,558 - 214,558 214,558

Deferred tax 05-003-002 TAXATION (DEFERRED) 32,258 - 32,258 - 32,258 32,258

Prior Years 05-003-003 TAXATION (PRIOR YEARS) 10,984 - 10,984 - 10,984 10,984

24,445 23,590
(855)
PAIR INVESTMENT COMPANY LIMITED
PROVISION HELD AGAINST ADVANCES & INVESTMENTS

Impairment
Provision for
Segment Book value Net of (charge) /
Particulars Cost of Investment impairment as at 31
Owner Dec 2015 Impairment reversal during
Oct to Dec
Shares
Telecard Equity 1,075,977 (571,977) 504,000 -
OGDC Equity 26,150,239 (9,135,939) 17,014,300 (1,062,850)
PPL Equity 34,588,679 (13,691,523) 20,897,156 -
PTCL Equity
Agritech Limited CIBG 200,401,740 (149,850,332) 50,551,408 21,580,055
Burj Bank Limited HO 296,859,860 (192,958,909) 103,900,951 -
Sukuk
Sitara Peroxide CIBG 31,363,290 (1,325,867) 29,668,193 471,070
Eden
TFCs
Trust Investment Bank Limited CIBG 11,245,000 (11,245,000) - -
601,684,785 (378,779,547) 222,536,008 20,988,275
Incremental
Reversal
CIBG 243,010,030 (162,421,199) 80,219,601 CIBG
Equity 61,814,895 (23,399,439) 38,415,456 Equity
HO 296,859,860 (192,958,909) 103,900,951 HO
601,684,785 (378,779,547) 222,536,008

Advances Category Provision Required FSV Benefit Shortfall

Pace Pakistan Limited Loss 100% - -96,443,432
Polygon Loss 100% 218,000,000 0
Dewan Cement Limited Loss 100% 75,000,000 0
Fauji Akbar Portia SS 25% 51,168,113 9,178,052 9,178,052
Haseeb Waqas Sugar Mill Loss 100% 70,000,000 45,824,412 45,824,412
Digiri Loss 100% 5,416,027 0 0
Madina Loss 100% 95,250,000 95,250,000 95,250,000
Al Abid Loss 100% 150,000,000 0 0
Sigma Refrigeration Loss 100% - 0
Gulistan Spinning Mills Ltd. Loss 100% 350,000,000 0
1,014,834,140 150,252,464 53,809,032
 1st Quarter 2016 2nd Quarter 2016

Provision for Impairment (charge) / Provision for

Book value Net of Cost of
Cost of Investment impairment as at 31 reversal during Jan to impairment as at
Mar2016 Impairment March 2016 Investment 30 Jun2016

1,075,977 (571,977) 504,000 - 1,075,977 (571,977)

- - - (9,135,939) - -
- - - (13,691,523) - -
27,299,140 (10,777,140) 16,522,000 10,777,140 27,299,140 (10,777,140)
197,401,740 (147,607,083) 49,794,657 (2,243,249) 197,401,740 (147,607,083)
296,859,860 (192,958,909) 103,900,951 - 296,859,860 (192,958,909)
- - - -
29,222,541 (1,325,867) 27,896,674 - 26,973,000 (1,325,867)

- - - -
11,245,000 (11,245,000) - - 11,245,000 (11,245,000)
563,104,258 (364,485,976) 198,618,282 (14,293,571) 560,854,717 (364,485,976)

237,869,281 (160,177,950) 77,691,331 (2,243,249) 235,619,740 (160,177,950)

28,375,117 (11,349,117) 17,026,000 (12,050,322) 28,375,117 (11,349,117)
296,859,860 (192,958,909) 103,900,951 - 296,859,860 (192,958,909)
563,104,258 (364,485,976) 198,618,282 (14,293,571) 560,854,717 (364,485,976)

Principal O/S Provision Provision

31-Dec-16 31-Dec-16 Dec -15 Incremental Reversal Net
(96,443,432) (96,443,432) - -
218,000,000 (218,000,000) (218,000,000) - -
75,000,000 (75,000,000) (75,000,000) - -
204,672,453 (41,990,061) (31,748,914) 10,241,147 10,241,147
70,000,000 (24,175,588) - 24,175,588 24,175,588
5,416,027 (5,416,027) (8,903,878) (3,487,851) (3,487,851)
95,250,000 - - - -
150,000,000 (150,000,000) (126,181,500) 23,818,500 23,818,500
- - (1,250,000) (1,250,000) (1,250,000)
350,000,000 (350,000,000) (350,000,000) - -
1,168,338,480 (961,025,108) (907,528) 58,235,235 (4,737,851) 53,497,384
2nd Quarter 2016 3rd Quarter 2016
Impairment Impairment
Provision for
Book value Net of (charge) / reversal Book value Net of (charge) / reversal
Cost of Investment impairment as at 30
Impairment during Apr to Jun Sep 2016 Impairment during Jul to Sep
2016 2016

504,000 - - - - (571,977)
- - - - - -
- - - - - -
16,522,000 - 27,299,140 (10,777,140) 16,522,000 -
49,794,657 - 12,601,740 (9,422,947) 3,178,793 (138,184,136)
103,900,951 - 296,859,860 (192,958,909) 103,900,951 -
- - - - -
25,647,133 - 23,411,061 (1,325,867) 22,085,194 -

- - - - -
- - 11,245,000 (11,245,000) - -
196,368,741 - 371,416,801 (225,729,863) 145,686,938 (138,756,113)

75,441,790 - 47,257,801 (21,993,814) 25,263,987 (138,756,113)

17,026,000 - 27,299,140 - 16,522,000 -
103,900,951 - 296,859,860 (192,958,909) 103,900,951 -
196,368,741 - 371,416,801 (214,952,723) 145,686,938 (138,756,113)
 4th Quarter 2016
Impairment
Provision for
Book value Net of (charge) / reversal Total
Cost of Investment impairment as at 31
Dec 2016 Impairment during Oct to Dec 2016
2016

-
(571,977)
-
(9,135,939)
-
(13,691,523)
- - - (10,777,140) -
- - - (9,422,947) (149,850,332)
- - - (192,958,909) (192,958,909)
- -
23,411,061 (1,325,867) 22,085,194 - -
19,680,001 - 19,680,001
- -
11,245,000 (11,245,000) - - -
54,336,062 (12,570,867) 41,765,195 (213,158,996) (366,208,680)
0
(366,208,680)
34,656,061 (12,570,867) 22,085,194
- - -
- - -
34,656,061 (12,570,867) 22,085,194
Shares of listed company 0
Shares of unlisted company 0
Sukuk bonds - Unlisted (1,326)
Term finance certificates - Unlisted (11,245)