Financial Statements - United Bank Limited

NOTES TO AND FORMING PART OF THE UNCONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2012
13. OTHER ASSETS
Note 2012 2011
------- (Rupees in '000) -------
Income / mark-up accrued in local currency 11,478,549 11,595,686
Income / mark-up accrued in foreign currency 2,647,110 1,675,153
14,125,659 13,270,839
Advance taxation - net of provision for taxation 13.1 5,917,699 3,091,744
Receivable from staff retirement funds 5,377 99,182
Receivable on account of encashment of savings certificates 14,586 18,892
Receivable in respect of derivative transactions 18,033 18,033
Receivable from other banks against telegraphic transfers and demand drafts 842,483 817,422
Unrealized gain on forward foreign exchange contracts 779,924 1,671,007
Branch adjustment account 208,866 345,007
Unrealized gain on derivative financial instruments 19.3.1 & 23.2 489,130 394,924
Advance against Murabaha 17,531 31,039
Advance against Ijarah assets 110,382 3,722
Suspense accounts 392,516 338,017
Stationery and stamps on hand 211,031 162,521
Receivable against redemption of units of mutual funds 1,004,226 -
Non banking assets acquired in satisfaction of claims 13.3 1,094,305 584,337
Advances, deposits, advance rent and other prepayments 956,200 798,851
Advance against Pre-IPO investment 364,000 100,000
Others 1,768,728 1,869,028
28,320,676 23,614,565
Provision held against other assets 13.2 (3,575,994) (2,777,829)
Other assets (net of provisions) 24,744,682 20,836,736
13.1
The Income Tax returns of the Bank have been filed up to the tax year 2012 (accounting year ended December 31,
2011) and were deemed to be assessed under section 120 of the Income Tax Ordinance, 2001 (Ordinance) unless
amended by the Commissioner of Inland Revenue.
The income tax authorities have issued amended assessment orders for the tax years 2003 to 2012, and created
additional tax demands of Rs.9,589 million, which have been fully paid as required under the law. The Bank has filed
appeals before the various appellate forums against these amendments. Where the appellate authorities have allowed
relief on certain issues, the assessing authorities have filed appeals before higher appellate forums. Where the appellate
authorities have not allowed relief the Bank has filed appeals before higher appellate forums. The management of the
Bank is confident that the appeals will be decided in favor of the Bank.
Under the Seventh Schedule to the Ordinance, banks are allowed to claim provisions against advances up to 5% of total
advances for consumer and small and medium enterprises and up to 1% of total advances for remaining advances.
Amounts above these limits are allowed to be claimed in future years. The Bank has booked a deferred tax asset of
Rs.3,229 million (2011: Rs.3,200 million) in respect of provisions in excess of the above mentioned limits.
The Bank also carries a tax asset amounting to Rs.4,114 million (2011: Rs.4,114 million), representing disallowance of
provisions against advances and off balance sheet obligations, for the periods prior to the applicability of the Seventh
Schedule. The management, in consultation with its tax advisor, is confident that these would be allowed to the Bank at
appellate levels.
The tax returns for Azad Kashmir (AK) Branches have been filed upto the tax year 2012 (financial year 2011) under the
provisions of section 120(1) read with section 114 of the Ordinance and in compliance with the terms of the agreement
between banks and the Azad Kashmir Council in May 2005. The returns filed are considered as deemed assessment
orders under the law.
The tax returns for overseas branches have been filed up to the accounting year ended December 31, 2011 under the
provisions of the laws prevailing in the respective countries, and are deemed as assessed unless opened for
reassessment.
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