Financial Statements - United Bank Limited

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NOTES TO AND FORMING PART OF THE UNCONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2012 44.5 Operational risk Operational risk is the risk of loss resulting from inadequate or failed internal processes, people and systems or from external events. The Operational Risk & Basel II Division is primarily responsible for the oversight of operational risk management across the Bank. The operational risk management framework of the Bank is governed by the Operational Risk Management Policy and Procedures, while the implementation is supported by an operational risk management system and designated operational risk coordinators within different units across the bank. The framework is in line with international best practices, flexible enough to implement in stages and permits the overall approach to evolve in response to organizational learning and future requirements. Loss data, collected through a well defined program, is evaluated and processes are reviewed for improvements in mitigation techniques. Periodic workshops are conducted for Risk & Control Self Assessment and key risk exposures are identified and assessed against existing controls to evaluate improvement opportunities. Key Risk Indicators are also defined for monitoring of risk exposures. Business Continuity Plans have been implemented across the bank, clearly defining the roles and responsibilities of respective stakeholders, and covering recovery strategy, IT and structural backups, scenario and impact analyses and testing directives. The outsourcing policy has also been augmented to address risks associated with such arrangements. 45. ISLAMIC BANKING BUSINESS The Bank operates 19 (2011: 14) Islamic Banking Branches and 15 (2011: 15) Islamic Banking windows. BSD Circular Letter No. 03 dated January 22, 2013 requires all Islamic Banks and Banks with Islamic banking Branches to present all financing, advances for assets under Islamic modes of financing and any other related items pertaining to Islamic modes of financing under the caption "Islamic Financing and Related Assets" in the Statement of Financial Position. Previously, advances for assets under Islamic modes of financing were reported under "Other Assets" and Ijarah Assets were reported under "Operating Fixed Assets". This change in presentation is effective from December 31, 2012 and accordingly, the Bank has presented the Statement of Financial Position of Islamic Banking branches as per the revised regulations. The statement of financial position of the Bank's Islamic Banking Branches as at December 31, 2012 is as follows: Note 2012 2011 --------- (Rupees in '000) --------- ASSETS Cash and balances with treasury banks 748,333 520,737 Balances with other banks 1,293,290 2,185,282 Due from financial institutions - - Investments 8,036,026 5,006,664 Islamic financing and related assets 45.1 3,118,266 1,128,458 Operating fixed assets 100,250 62,292 Due from Head Office - - Other assets 173,481 209,828 Total Assets 13,469,646 9,113,261 LIABILITIES Bills payable 960 960 Due to financial institutions - - Deposits and other accounts Current accounts 1,863,420 1,453,763 Saving accounts 2,533,628 1,233,772 Term deposits 3,141,108 1,652,628 Deposits from financial institutions - remunerative 4,956,027 2,841,225 12,494,183 7,181,388 Due to Head Office 272,971 1,339,874 Other liabilities 162,915 105,099 12,931,029 8,627,321 NET ASSETS 538,617 485,940 REPRESENTED BY Islamic Banking Fund 681,000 681,000 Accumulated losses (194,579) (199,658) 486,421 481,342 Surplus on revaluation of assets 52,196 4,598 538,617 485,940 57
NOTES TO AND FORMING PART OF THE UNCONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2012 The profit and loss account of the Bank's Islamic Banking Branches for the year ended December 31, 2012 is as follows: 2012 2011 --------- (Rupees in '000) --------- Return earned 1,266,785 885,293 Return expensed 865,577 614,947 401,208 270,346 Provision against loans and advances - net 7,880 21,982 Reversal for diminution in value of investments - net (37,216) (27,384) Charge / (reversal) against assets given on Ijarah 12,626 (5,184) (16,710) (10,586) Net return after provisions 417,918 280,932 Other Income Fee, commission and brokerage income 12,124 8,755 Dividend income 60,432 29,586 Income from dealing in foreign currencies 34,504 331 Gain on sale of securities - net 860 - Other income 14,906 5,694 Total other income 122,826 44,366 540,744 325,298 Other Expenses Administrative expenses 516,659 304,458 Other provisions - net 19,006 17,498 Total other expenses 535,665 321,956 Net profit for the year 5,079 3,342 Accumulated losses brought forward (199,658) (203,000) Accumulated losses carried forward (194,579) (199,658) Remuneration to Shariah Advisor 2,329 2,482 45.1 Islamic financing and related assets Financings Murabaha 1,394,021 355,909 Ijarah 982,463 441,220 Musharaka 55,556 111,111 Diminishing Musharaka 192,924 67,051 Salam 347,171 - Provision against financings (29,864) (21,982) 2,942,271 953,309 Advances Advances and receivables against Ijarah 171,780 143,784 Advances for Diminishing Musharaka - 11,080 Advances for Murabaha 17,531 31,039 Provision against advances for Murabaha (17,498) (17,498) 171,813 168,405 Profit receivable against financings 4,182 6,744 3,118,266 1,128,458 45.2 Charity Fund Opening balance 8,967 11,792 Addition during the year 959 3,825 Payments during the year (3,450) (6,650) Closing balance 6,476 8,967 58
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United Bank Limited UNCONSOLIDATED
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U N I T E D B A N K L I M I T E D i
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U N I T E D B A N K L I M I T E D B
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U N I T E D B A N K L I M I T E D n
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U N I T E D B A N K L I M I T E D
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U N I T E D B A N K L I M I T E D A
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U N I T E D B A N K L I M I T E D T
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BOO EBRAHIM a: CO. CHARTERED ACCOUN
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BOO EBRAHIM ft CO. CHARTERED ACCOUN
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UNCONSOLIDATED STATEMENT OF FINANCI
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UNCONSOLIDATED STATEMENT OF COMPREH
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UNCONSOLIDATED STATEMENT OF CHANGES
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NOTES TO AND FORMING PART OF THE UN
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NOTES TO AND FORMING PART OF THE UN
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Page 97 and 98: Sr. No. Annexure 'B' as referred to
Page 111 and 112: Disposals of operating fixed assets
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Financial Statements - United Bank Limited

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