Docstoc

State Bank Clerical Preparation

Document Sample
State Bank Clerical Preparation Powered By Docstoc
					                                 ZARAI TARAQIATI BANK LIMITED
                             BALANCE SHEET AS AT 31 DECEMBER 2005

                                                                                      2005          2004
ASSETS                                                                    Notes      (Rupees in thousand)

Cash and balances with treasury banks                                       6       1,585,421      1,593,898
Balances with other banks                                                   7       7,813,844     14,791,268
Lending to financial institutions                                                         -              -
Investments                                                                 8      12,820,668      2,849,677
Advances                                                                    9      52,925,286     54,335,440
Other assets                                                                10      8,010,698      9,381,766
Operating fixed assets                                                      11        690,141        976,985
Deferred tax assets                                                         12          1,829          1,222
                                                                                   83,847,887     83,930,256
LIABILITIES
Bills payable                                                               13        235,741        197,434
Borrowings from financial institutions                                      14     51,257,213     51,257,213
Deposits and other accounts                                                 15      2,644,647      3,122,206
Sub-ordinated loan                                                          16      3,204,323      3,204,323
Liabilities against assets subject to finance lease                                       -              -
Other liabilities                                                           17     13,441,518     13,048,358
Deferred tax liabilities                                                                  -              -
Deferred income                                                             18          2,048         17,105
                                                                                   70,785,490     70,846,639
NET ASSETS                                                                         13,062,397     13,083,617

REPRESENTED BY
Share capital                                                               19     11,869,612     11,869,611
Advance against equity                                                      20            -                1
Statutory reserve                                                           21        215,387        215,387
Contingencies reserve                                                       22         30,000            -
Unappropriated profit                                                                 702,355        861,549
                                                                                   12,817,354     12,946,548
Surplus on revaluation of assets                                            23        245,043        137,069
                                                                                   13,062,397     13,083,617

CONTINGENCIES AND COMMITMENTS                                               24


The annexed notes 1 to 45 and annexure-1 form an integral part of these financial statements.




PRESIDENT                               DIRECTOR                       DIRECTOR                   DIRECTOR
                             ZARAI TARAQIATI BANK LIMITED
            PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31 DECEMBER 2005

                                                                                            2005          2004
                                                                              Notes        (Rupees in thousand)
Mark-up/ return/ interest earned                                                25        6,822,719       8,105,383
Mark-up/ return/ interest expensed                                              26          391,738       3,135,736
 Net mark-up/ interest income                                                             6,430,981       4,969,647
 Provision against non-performing loans and advances                                      4,731,992       3,406,277
 (Reversal)/provision for impairment in the value of investments                               (585)            998
 Reversal against Portfolio audit                                                               -        (1,098,570)
 Provision against other assets                                                              12,936           2,698
 Bad debts written off directly                                                                 -               -
                                                                                          4,744,343       2,311,403
 Net mark-up/ interest income after provisions                                            1,686,638       2,658,245
NON MARK-UP/INTEREST INCOME
 Fee, commission and brokerage income                                                         3,157           2,410
 Dividend income                                                                              6,458           6,028
 Deferred income                                                                             32,178           6,349
 Income from dealing in foreign currencies                                                        -             -
 Other income                                                                   27          796,341         939,990
 Total non-markup/ interest income                                                          838,134         954,777
                                                                                          2,524,772       3,613,021
NON MARK-UP/INTEREST EXPENSES
 Administrative expenses                                                        28        2,580,159       2,437,251
 Amortization of deferred income                                                             32,178           6,349
 Other provisions/write offs                                                                       -            -
 Other charges                                                                  29            3,802           2,196
 Total non-markup/interest expenses                                                       2,616,139       2,445,796
                                                                                            (91,367)      1,167,225
Extra ordinary/ unsual items                                                                     -              -
PROFIT/(LOSS) BEFORE TAXATION                                                               (91,367)      1,167,225
 Taxation – Current year                                                                     38,434        503,234
          – Prior years                                                                           -             -
          – Deferred                                                                           (607)              5
                                                                                30           37,827        503,239
PROFIT/(LOSS) AFTER TAXATION                                                               (129,194)       663,986
Unappropriated profit brought forward                                                       861,549        330,360
Profit available for appropriation                                                          732,355        994,346
APPROPRIATIONS:
 Transfer to statutory reserve                                                                    -        132,797
 Transfer to contingencies reserves                                                          30,000              -
 Unappropriated profit carried forward                                                      702,355        861,549
 Basic earnings per share                                                       31             (0.11)         0.62


The annexed notes 1 to 45 and annexure-1 form an integral part of these financial statements.



 PRESIDENT                               DIRECTOR                        DIRECTOR                       DIRECTOR
                                 ZARAI TARAQIATI BANK LIMITED
                   CASH FLOW STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2005

                                                                                   Notes          2005          2004
                                                                                                 (Rupees in thousand)
CASH FLOW FROM OPERATING ACTIVITIES
Profit before taxation                                                                             (91,367)      1,167,225
Dividend income                                                                                     (6,458)         (6,028)
                                                                                                   (97,825)      1,161,197
Adjustments for non-cash charges
 Depreciation                                                                                       85,806           88,403
 Amortization of deferred income                                                                   (32,178)          (6,349)
 Amortization of preliminary expenses                                                                6,570            2,190
 Provision against non-performing loans and advances                                             4,731,992        3,406,277
 Reversal against portfolio audit                                                                      -         (1,098,570)
 Reversal for employees post retirement medical benefits                                           (79,692)        (151,537)
 Provision against other assets                                                                     12,936            2,698
 (Gain)/ loss on sale of fixed assets                                                              (23,591)              14
                                                                                                 4,701,843        2,243,126
                                                                                                 4,604,018        3,404,323
(Increase)/ decrease in operating assets
   Advances                                                                                     (3,321,839)      (2,470,762)
   Others assets (excluding advance taxation)                                                    1,600,661         (624,688)
                                                                                                (1,721,178)      (3,095,450)
Increase/ (decrease) in operating liabilities
  Bills payable                                                                                     38,307           7,153
  Deposits and other accounts                                                                     (477,558)        844,877
  Other liabilities (excluding current taxation)                                                   592,889       3,304,495
  Deferred income                                                                                    2,040          17,105
                                                                                                   155,678       4,173,630
Income tax paid                                                                                   (157,864)       (151,274)
Net cash flow from operating activities                                                          2,880,654       4,331,229
CASH FLOW FROM INVESTING ACTIVITIES
 Net investments in held to maturity securities                                                 (9,863,017)        (75,874)
 Dividend received                                                                                   6,458           6,028
 Investments in operating fixed assets                                                             (24,945)        (23,027)
 Sale proceeds of property and equipment disposed off                                               14,949           2,894
Net cash flow used in investing activities                                                      (9,866,555)        (89,979)
CASH FLOW FROM FINANCING ACTIVITIES
 Advance against equity                                                                                -                 -
 Dividend paid                                                                                         -                 -
 Reserves                                                                                              -                 -
Net cash flow from financing activities                                                                -                 -
Increase in cash and cash equivalents                                                           (6,985,901)      4,241,250
Cash and cash equivalents at beginning of the year                                              16,385,166      12,143,916
Cash and cash equivalents at end of the year                                         32          9,399,265      16,385,166

The annexed notes 1 to 45 and annexure-1 form an integral part of these financial statements.




 PRESIDENT                              DIRECTOR                        DIRECTOR                              DIRECTOR
                                   ZARAI TARAQIATI BANK LIMITED
                 STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2005



                                                                Advance      Statutory Contingencies Un-appropriated
                                             Share capital                                                                         Total
                                                              against equity reserve      reserve         profit


                                                                    ( R u p e e s           i n   t h o u s a n d )
Balance as at 31 December 2003 -
as reported earlier                             8,950,656        2,918,954         82,590              -              330,360    12,282,560

Adjustment during the year                            -                     2         -                -                  -                  2

Transfer to share capital                       2,918,955        (2,918,955)          -                -                  -              -

Profit after taxation for the current year            -                 -             -                -              663,986       663,986

Transfer to statutory reserve                         -                 -         132,797              -          (132,797)              -

Balance as at 31 December 2004                11,869,611                    1     215,387              -              861,549    12,946,548

Transfer to share capital                                 1                 (1)       -                -                  -              -

Profit after taxation for the current year            -                 -             -                -          (129,194)        (129,194)

Transfer to statutory reserve                         -                 -             -                -                  -              -

Transfer to contingencies reserve                     -                 -             -            30,000             (30,000)           -

Balance as at 31 December 2005                11,869,612                -         215,387          30,000             702,355    12,817,354


The annexed notes 1 to 45 and annexure-1 form an integral part of these financial statements.




     PRESIDENT                                     DIRECTOR                                 DIRECTOR                          DIRECTOR
                                ZARAI TARAQIATI BANK LIMITED
          NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2005

1.   STATUS AND NATURE OF BUSINESS
1.1 Reorganization and conversion

     The Federal Government in its cabinet meeting held on 28 August 2002 decided for the reorganization and conversion of
     Agricultural Development Bank of Pakistan into a public limited company for the purposes of ensuring good governance,
     autonomy, delivering high quality and viable financial services to a greater number of rural clientele and adequate returns to
     stake holders. Accordingly the Agricultural Development Bank of Pakistan (Reorganization and Conversion) Ordinance, 2002
     was promulgated for taking over the entire undertaking of Agricultural Development Bank of Pakistan and for matters
     connected therewith or incidental thereto.

1.2 Status

     Thus as required under section 3 of the Agricultural Development Bank of Pakistan (Reorganization and Conversion)
     Ordinance, 2002, Zarai Taraqiati Bank Limited was incorporated as public limited company under the Companies Ordinance,
     1984 on 23 October 2002. Consequently, under SRO 823 (1)/2002 dated 18 November 2002, all the assets, contracts,
     liabilities, proceedings and undertakings of Agricultural Development Bank of Pakistan were transferred to, and vested in
     Zarai Taraqiati Bank Limited on 14 December 2002.The Bank's principal office is situated at 1-Faisal Avenue (Zero Point),
     Islamabad.The Bank operates 345 (31 December 2004:345) branches in Pakistan as at close of the year.

1.3 The main purpose of the Bank is to provide sustainable rural finance and services particularly to small farmers and low
    income houses to strengthen the rural and agricultural sector, mitigate poverty, capital market and investment activities and
    other Banking business.

2.   BASIS OF PRESENTATION

     These financial statements have been presented in accordance with the revised form of Accounts and Balance Sheet under
     BSD Circular No. 36 dated 10 October 2001 issued by the Banking Supervision Department of Sate Bank of Pakistan.


3.   STATEMENT OF COMPLIANCE

     These financial statements are prepared in accordance with the approved International Accounting Standards as applicable
     in Pakistan and the requirements of the Companies Ordinance, 1984 and the Banking Companies Ordinance,1962. Approved
     accounting standards comprise of such International Accounting Standards as notified under the provisions of the Companies
     Ordinance,1984. Wherever the requirements of the Companies Ordinance, 1984, Banking Companies Ordinance,1962 or the
     directives issued by the Securities and Exchange Commision of Pakistan (SECP) and the State Bank of Pakistan differ with
     the requirements of these standards, the requirements of the Companies Ordinance,1984, Banking Companies Ordinance,
     1962 or the requirements of the said directives take precedence.

     The Securities and Exchange Commission of Pakistan (SECP) has approved and notified the adoption of International
     Accounting Standard 39, Financial Instruments; Recognition and Measurement and International Accounting Standard 40,
     Investment Property. The requirements of these standards have not been followed in preparation of these financial
     statements as the State Bank of Pakistan has deferred the implementation of these standards in Pakistan till further
     instructions. However, investments have been classified in accordance with the requirments of the format prescribed by the
     State Bank of Pakistan for the financial statements.

4.   BASIS OF MEASUREMENT

     These financial statements have been prepared on the historical cost convention as modified for the revaluation of certain
     investments (note 8) and in conformity with the accepted accounting practices of the banking institutions in Pakistan.
5.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 5.1 Staff Retirement Benefits
     Pension Scheme
     The Bank operates defined benefits funded pension scheme approved by income tax authorities, for its eligible employees
     who opted for the new employees benefits scheme, introduced in 1975 and 1977 for clerical/non-clerical staff and for
     executives/officers, respectively. The bank's costs are determined on the basis of actuarial valuation carried out by
     independent actuaries by using 'Projected Unit Credit Method'. Any surplus/deficit arising on actuarial valuation in excess of
     the higher of 10% of present value of defined benefits obligations or 10% of the fair value of plan assets is recognized as
     income or expense over the estimated working lives of the employees.
     Gratuity Scheme
     The Bank operates defined benefits funded gratuity scheme approved by income tax authorities, for its eligible employees
     who did not opt for the new employees benefits scheme, introduced in 1975 and 1977 for clerical/non-clerical staff and for
     executives/officers, respectively. Annual contributions are made on the basis of actuarial recommendations. Any
     surplus/deficit arising on actuarial valuation by independent actuaries in excess of the higher of 10% of present value of
     defined benefit obligation or 10% of the fair value of plan assets is recognized as income or expense over the estimated
     working lives of the employees.

     Provident Fund Scheme
     The Bank operates a defined contribution funded provident fund scheme for its employees who did not opt for the new
     employees benefits scheme introduced in 1975 and 1977 for clerical/non clerical staff and for executives/officers respectively.
     Under this scheme, equal contributions at defined rates are made by the member employees and the bank. The bank also
     operates non-contributory provident fund for its employees who opted for the new employees benefits scheme, as
     mentioned above. Under this, non contributory provident fund, contributions at defined rates are made by its member
     employees only. Both of these provident funds are approved by the income tax authorities.
     Benevolent Scheme
     The Bank also has two funded defined benefits benevolent fund schemes for its employees, separately for officers and for
     clerical and non-clerical staff. Contribution to these schemes are made by employees and the bank. The employee's
     contribution is matched by an equal contribution by the bank which is also liable to meet any shortfall in the fund, determined
     on the basis of actuarial valuation. Transitional liability arising on first adoption of International Accounting Standard - 19
     (revised 2000) "Employee Benefits" is recognized as an expense on straight line basis over five years from the date of its
     adoption.

     Post retirement medical benefits
     The Bank operates an unfunded defined benefit post retirement medical benefit scheme for all of its employees . Provision is
     made in the accounts for the benefit based on actuarial valuation. Actuarial gains/losses are accounted for in the manner
     similar to pension scheme.
     The Bank operates an unfunded defined benefit post retirement medical benefit scheme for all of its employees. Provision is
     made in the financial statements for the benefit based on actuarial valuation. Actuarial gains/losses are accounted for in the
     manner similar to pension scheme.

     Employees Compensated Absences
     The Bank accounts for all accumulating compensated absences when the employees render service that increases their
     entitlement to future compensated absences. Provision is made in the financial statements for the benefit based on entitled un-
     availed leave balances carried forwarded to the next year.

5.2 Cash and cash equivalents

     Cash and cash equivalents comprise of cash, balances with treasury banks and balances with other banks.
5.3 Revenue recognition

    Markup/interest on advances and returns on investments are recognized on an accrual basis except markup/interest on
    classified advances which is recognized on a receipt basis, in accordance with the Prudential Regulations issued by the
    State Bank of Pakistan.

    Commission is recognized when earned.
    Profit/(loss) on sale of investments is credited/charged to profit and loss account currently.
    Dividend income is recognized when the Bank's right to receive has been established.
5.4 Advances
    Advances are stated at net of provision for non-performing advances. Provision for non-performing advances is determined
    on the basis of Prudential Regulations issued by the State Bank of Pakistan and charged to profit and loss account.
    Advances are written off when there is no realistic prospect of recovery. As a further prudence, value of mortgage land and
    buildings relating to non-performing loans and advances is treated as nil.
5.5 Investments
    In accordance with BSD circular No. 10 and 14 dated 13 July 2004 and 24 September 2004 respectively, issued by the State
    Bank of Pakistan, the bank classifies its investment portfolio into 'Held for Trading', 'Held to Maturity' and 'Available for Sale
    Securities' as follows:
    Held for trading
    These are investments acquired principally for the purpose of generating profits from short term fluctuations in price.

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

    Available for sale
    These are investments which do not fall under the held for trading and held to maturity categories.

    Quoted securities where ready quotes are available on Reuters Page (PKRV) or Stock Exchange, other than investments
    classified as held to maturity, are valued at fair value. Investments classified as held to maturity are carried at amortised cost.

    Investment in un quoted securities are carried at cost less impairment loss, if any.

    The difference between the face value and purchase price is amortised over the remaining life of the investment using
    effective yield method, in order to determine amortised cost.

    The surplus/deficit arising as a result of revaluation at fair value on trading portfolio is taken to income and that relating to the
    available for sale portfolio is kept in a seperate account and shown below equity.

    Gains or losses on disposals of investments are dealt with through profit and loss account in the year in which they arise.

    All purchases and sales of investments that requires delivery within the timeframe established by regulation or market
    convention are recognized using the trade date method of accounting.

5.6 Impairment
    The carrying amount of assets are reviewed at each balance sheet date to determine whether there is any indication of
    impairment of any asset or group of assets. If such indication exists, the recoverable amount of the assets is estimated. An
    impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount. Impairment losses
    are recognized in profit and loss account.
5.7 Operating fixed assets and depreciation/amortization
    Operating fixed assets are stated at cost less accumulated depreciation except free hold land which is stated at cost.
    Depreciation is computed over the estimated useful lives of the related assets at the rates set out in note 11. Depreciation is
    charged on reducing balance method except for vehicles, computer equipment and lease hold land which are
    depreciated/amortized on straight line method. Depreciation on addition / deletion in fixed assets during the year is charged
    for the proportionate period for which the asset remained in use.
    Maintenance and normal repairs are charged to profit and loss account as and when incurred whereas major renewals and
    improvements are capitalized.

    Gains/losses, if any, on disposal of fixed assets are charged to profit and loss account during the year.
    International Accounting Standard (IAS) 16, "Property, Plant and Equipment (revised 2003)" is applicable to financial
    statements covering annual periods beginning on or after 01 January 2005 and requires a review of residual value of assets,
    useful lives and depreciation method at each financial year end. Accordingly, based on a review of the above, the
    management has revised the rate of depreciation on computer equipment from 20 percent to 33.3 percent.

    The above revision have been accounted for as changed in accounting estimate in accordance with the requirements of
    International Accounting Standard (IAS) 8, "Accounting Policies, Changes in Accounting Estimates and Errors". Accordingly,
    the effect of these changes in accounting estimates has been recognised propectively in the profit and loss account of the
    current year. Had there been no change in these accounting estimates, the loss for the year would have been lower by
    Rupees 2.270 million.
5.8 Taxation
    Current
    Provision for current taxation is based on taxable income at the current rate after taking into account tax credits, exemptions
    and rebates as laid down in the applicable income tax law.
    Deferred
    Deferred tax is provided using the balance sheet liability method, providing for all temporary differences between the carrying
    amounts of assets and liabilities for the financial reporting purposes and amount used for the taxation purposes. The amount
    of deferred tax provided is based on the expected manner of realization or settlement of the carrying amount of assets and
    liabilities using the tax rates enacted at the balance sheet date. A deferred tax asset is recognized only to the extent it is
    probable that future taxable profit will be available and the credits can be utilized. Deferred tax asset is reduced to the extent
    that it is no longer probable that the related tax benefits will be realized.
5.9 Provisions
    Provisions are recognized when the Bank has a legal or constructive obligation as a result of past events and it is probable
    that an outflow of resources will be required to settle the obligation and a realiable estimate of the amount can be made.
    Provisions are reviewed at each balance sheet date and are adjusted to reflect current best estimate.
5.10 Foreign currencies
    The Bank operates foreign currency transactions through State Bank of Pakistan in local currency by paying exchange
    fluctuation risk fee to the State Bank of Pakistan.
5.11 Related party transactions
    All transactions undertaken between the Bank and the related parties are measured at arms' length prices determined in
    accordance with the methods for determining arms' length prices as prescribed by the Securities and Exchange Commission
    of Pakistan (SECP).
5.12 Financial instruments
    Financial instruments carried on the balance sheet include certain receivables, cash and bank balances, investments,
    advances, borrowing from financial institutions, deposits and other payables. The particular recognition methods adopted are
    disclosed in the individual policy statements associated with each item.
6.    CASH AND BALANCES WITH TREASURY BANKS
                                                                                                          2005                 2004
                                                                                        Note
                                                                                                          (Rupees in thousand)

      Local currency
      In hand                                                                                               395,962             969,443
      In current accounts with:
         State Bank of Pakistan                                                          6.1              1,189,047              624,446
         National Bank of Pakistan                                                                              412                    9
                                                                                                          1,585,421            1,593,898
6.1   It represents deposits maintained with State Bank of Pakistan to comply with the regulations issued from time to time.
7.    BALANCES WITH OTHER BANKS
      In Pakistan:
       On current accounts                                                                                   21,673            38,308
       On deposit accounts                                                               7.1              7,792,171        14,752,960
      Outside Pakistan:
       On current accounts                                                                                      -                 -
       On deposit accounts                                                                                      -                 -
                                                                                                          7,813,844        14,791,268
7.1   These carry a markup ranging from 2% to 12.75%.

8.    INVESTMENTS


8.1
                                                                                    Note             2005              2004
8.2    Investments by segments
                                                                                                     (Rupees in thousand)
       Federal Government Securities                                                 8.3
       Market treasury bills                                                                         5,940,943          595,331
       Pakistan investment bonds                                                                     1,148,835        1,155,895
       Federal investment bonds                                                                        818,208          867,087
                                                                                                     7,907,986        2,618,313
       Add/(less) : Surplus/(deficit) on revaluation of Government securities                              -                -
                                                                                                     7,907,986        2,618,313
       Fully Paid up Ordinary Shares:
       Listed Companies                                                              8.4                90,294           90,293
       Unlisted Companies                                                            8.5                 5,000            5,000
                                                                                                        95,294           95,293
       Add: Surplus on revaluation of listed shares                                                    245,043          137,069
                                                                                                       340,337          232,362

       Certificates of investments                                                   8.6             4,572,758              -
                                                                                                    12,821,081        2,850,675
       Provision for impairment in value of investments in listed shares             8.7                  (413)            (998)
       Investments at revalued amounts - net of provisions                                          12,820,668        2,849,677

8.3    Principal terms of investments in Federal Government securities




8.3.1 Market Treasury Bills, Federal Investment Bonds and Pakistan Investment Bonds are held by the Bank which also covers
      statutory liquid reserve requirements.
8.3.2 Federal Investment Bonds having amortised cost of Rupees 2.866 millions (Rupees 3.037 million: 31 December 2004) are
      pledged/lodged with State Bank of Pakistan as security for TT/DD discounting facility obtained for branches.

8.4    Particulars of investments held in listed companies




8.4.1 Dadabhoy Agricultural Leasing Limited is under suspension since November 2001. At the date of suspension, its market value
      per share was Rupees 2.50 against its face value of Rupees 10 per share.
8.5    Particulars of investments held in unlisted companies




8.5.1 Saudi Pak Kala Bagh Livestock Limited has defaulted in the repayment of loan and the case has been referred to National
      Accountability Bureau.
8.5.2 Larkana Sugar Mills Limited is in the process of liquidation since February 2000 and there is no probability of any recovery of
      amount invested on final settlement.
8.5.3 Investment in Saudi Pak Kalabagh Livestock Limited and Larkana Sugar Mills Limited are stated at book value due to non-
      availability of required information for the calculation of breakup value. Moreover, these investments are fully provided for in
      these financial statements.
8.5.4 Market value of listed investment is Rupees 333.046 million and book value of unlisted investments is Rupees 5 million. Face
      value of investment in unlisted securities is Rupees 31.697 million.
8.6    Particulars of certificates of investments




                                                                                                         2005            2004
                                                                                                         (Rupees in thousand)
8.7     Particulars of provision for impairment in value of investments in listed shares
        Opening balance                                                                                        998               -
        Charge for the year                                                                                    -                 998
        Reversal for the year                                                                                 (585)              -
        Closing balance                                                                                        413               998
9.      ADVANCES
        Loans, cash credits, running finances, etc.
        In Pakistan                                                                                     64,744,526        79,902,100
        Outside Pakistan                                                                                       -                 -
                                                                                       9.1.3            64,744,526        79,902,100
        Less:
        Provision for non-performing advances                                           9.2            (11,814,916)      (25,562,137)
        Provision for long outstanding employee advances                                                    (4,324)           (4,523)
                                                                                        9.4            (11,819,240)      (25,566,660)
                                                                                                        52,925,286        54,335,440
                                                                                                              2005            2004
                                                                                                              (Rupees in thousand)
9.1     Particulars of advances
9.1.1   In local currency                                                                                    52,925,286         54,335,440
        In foreign currencies                                                                                       -                  -
                                                                                                             52,925,286         54,335,440
9.1.2   Short Term - upto one year                                                                           32,744,545         20,990,460
        Long Term - over one year                                                                            20,180,741         33,344,980
                                                                                                             52,925,286         54,335,440
9.1.3 Loans and advances have been shown in accordance with the BSD Circular No.9 dated 09 November 2003 issued by the
      State Bank of Pakistan.
9.2     Advances include Rupees 23,424 million (31 December 2004 : Rupees 40,465 million) which have been placed under non-
        performing status as detailed below:




9.2.1 Specific provision amounting to Rupees 1,031 million held under portfolio audit has been charged off as required under State
      Bank of Pakistan's Prudential Regulations for agricultural financing issued vide BPD circular No. 27 dated 22 October 2005.

                                                                                                          *Maximum total amount of
        Particulars of loans and advances to                           Balance Outstanding as at        advances including temporary
9.2.2
        directors and associated companies etc.                            31 December 2005              advances granted during the
                                                                                                                     year
                                                                                             (Rupees          in     thousand)
        Debts due by directors, executives or officers                                         -                                        -
        of the bank or any of them either severally or
        jointly with any other person
        Debts due by companies or firms in which the                                          34,263                                34,263
        directors of the bank are interested as
        directors, partners or in the case of private
        companies as members
        Debts due by subsidiary companies, controlled                                             -                                     -
        firms, managed modarabas and other related
        parties
        * The maximum amount has been calculated by reference to month-end balances.
9.3     The Federal Government has decided, in the meeting of the Federal Cabinet on 28 August 2002, to Corporatize / restructure
        the Agricultural Development Bank of Pakistan (ADBP). ADBP (Reorganization and Conversion) Ordinance, 2002 (LX of 2002)
        was promulgated by the Federal Government on 04 October 2002 to provide for necessary legal/statutory cover for
        reorganization and conversion of (ADBP) into a public limited company, incorporated under the Companies Ordinance, 1984.
        Consequently, under SRO 823(1)/2002 dated 18 November 2002, the Federal Government specified 14 December 2002 to be
        the effective date on which all the assets, contracts, liabilities, proceedings and undertakings of ADBP shall stand transferred to,
        and vest in Zarai Taraqiati Bank Limited (ZTBL).
        Accordingly State Bank of Pakistan appointed an independent firm of Chartered Accountants who carried out a portfolio audit
        and recommended a provision of Rupees 10 billion against its non-performing advances to meet the requirement of the
        Prudential Regulation No. VIII of State Bank of Pakistan. The Bank incorporated a general provision of Rupees 3 billion in the
        year ended 30 June 2002 on the basis of the provisional portfolio audit Report. Government of Pakistan approved cash support
         of Rupees 07 billion which will be provided to Zarai Taraqiati Bank Limited over a period of three years. In consequence to this
        the State Bank of Pakistan vide their revised letter No.BSD/SU-54/4033286/2004 dated 05 June 2004 has allowed that the
        provision of Rupees 7 billion is to be provided by Zarai Taraqiati Bank Limited in their account in three installments as follows:
        1)     Provision of Rupees 3 billion be created in the financial statements for the year ending 31 December 2003.
        2)     Provision of Rupees 3 billion be created in the financial statements for the year ending 31 December 2004.
        3) The balance of provision of Rupees 1 billion in the financial statements for the year ending 31 December 2005.
        Subsequently the Ministry of Finance, Government of Pakistan has directed the Bank vide their letter No. (6)-3 IF-I/2005 dated
        08 June 2005 to reverse the specific provision created on the basis of portfolio audit against loans and advances which have
        been subsequently recovered in the financial statements for the year ended 2004 and comply with the State Bank of Pakistan's
        Prudential Regulations for making the necessary time based provisions. In complying with Ministry of Finance, Government of
        Pakistan's directives, the Bank has reversed the specific provision to the extent of recoveries against the specific provision of
        Rupees 3,000.799 million made in the accounts for the year 2003 over and above the Prudential Regulations provisioning
        pursuant to portfolio audit carried out as a part of restructuring process of the Bank.


9.4




9.4.1 The State Bank of Pakistan has issued Prudential Regulations for Agriculture Financing during the current year vide BPD
      Circular No. 27 dated 22 October 2005. These regulations require agricultural advances overdue by 90 days, one year, one and
      a half years and two years to be classified as OAEM, substandard, doubtful and loss respectively. In addition, these regulations
      specify that provision should be made in the financial statements equal to 20 percent, 50 percent, and 100 percent, in respect of
      overdue agricultural advances classified as substandard, doubtful and loss respectively, of the outstanding balance of principal
      and value of mortgaged land and building as valued at the time of sanctioning of loan. No provision is required to be made
      against the outstanding balance of principal relating to overdue agricultural advances classified as OAEM. These regulations
      also require that in any case the loan account shall be fully charged off after three years from the date of default.
      However, as a matter of prudence the Bank has not applied the adjustment factor of the value of mortgaged land and building in
      determining the provisioning requirement against the non-performing loans and advances portfolio. Had the value of mortgaged
      land and building been discounted strictly in accordance with the requirement of the Prudential Regulation, the specific
      provision against non-performing advances as at 31 December 2005 would have been lower and consequently the loss for the
      year and advances would have been lower and higher by Rupees 5,633 million respectively.
      Previously, provision was determined in respect of non performing agricultural advances in accordance with the guidelines
      given in the Prudential Regulations for Corporate / Commercial banking. Had the provision against agricultural advances been
      determined on previous year basis, the specific provision against non-performing loans and advances would have been lower
      by Rupees 2,573 million.
                                                                                                            2005            2004
9.5     Particulars of write offs                                                          Note             (Rupees in thousand)
9.5.1        Against provisions                                                                            18,479,412            734,029
             Directly charged to profit and loss account                                                          -                  -
                                                                                                           18,479,412            734,029
9.5.2        Write offs of Rupees 500,000 and above                                         9.6             5,729,521            698,456
             Write offs of below Rupees 500,000                                                            12,749,891             35,573
                                                                                                           18,479,412            734,029
9.6    In terms of sub-section (3) of section 33 (A) of the Banking Companies Ordinance, 1962 the statement of amount in respect of
       written-off loans or any other financial relief of Rupees 500,000 or above allowed to a person(s) during the year ended 31
       December 2005 is given at Annexure-1 in respect of project loans only. Further an additional amount of Rupees 13,705 million
       has been charged off as required under State Bank of Pakistan's prudential regulations for agricultural financing issued vide
       BPD Circular No.27 dated 22 October 2005 which has not been shown at annexure-1. However, this write off does not affect
       the Bank's right to recover these debts from the customers.
                                                                                       Note              2005            2004
                                                                                                         (Rupees in thousand)
10.    OTHER ASSETS
       Income/mark-up accrued on loans and advances                                     10.1             2,085,487         3,537,383
       Income/mark-up accrued on investments                                                               178,026           152,168
       Other advances, deposits, advance rent and other prepayments                                         63,902            73,396
       Stationery and stamps on hand                                                                        10,970            10,114
       Tax recoverable                                                                  10.2               308,053           308,053
       Amount recoverable from Federal Government                                       10.3                   -           3,849,290
       Presidential relief package                                                                             -           1,741,162
       Relief Packages                                                                                     939,468               -
       Preliminary expenses                                                             10.4                   -               6,570
       Branch adjustment account                                                                           792,819           593,184
       Receivable from defined benefit plans                                            10.5             1,936,411         1,564,267
       Stock in hand                                                                                        14,640            14,808
       Assets relating to Bangladesh                                                    10.6             1,343,235         1,313,865
       Receivable from Federal Government against Golden Hand Shake Scheme                                   2,643         1,532,217
       Receivable from Pension Trust Fund against Golden Hand Shake Scheme              10.7               117,901           237,901
       Receivable from Benevolent Trust Fund against Golden Hand Shake Scheme           10.7                17,250            41,092
       Suspense account                                                                                      3,848            12,784
       Non-banking assets acquired in satisfaction of claims                            10.8               209,574               -
       Others                                                                           10.9                15,208             8,789
                                                                                                         8,039,435        14,997,043
       Less: Provision held against other assets                                       10.10               (28,737)       (5,615,277)
                                                                                                         8,010,698         9,381,766
10.1   This includes an amount of Rupees 1,756 million in respect of agricultural loans and advances which has been arrived at after
       netting off interest suspense of Rupees 6,119 million ( 31 December 2004: 23,234 million). Further, the interest suspense
       account amounting to Rupees 11,550 million has been charged off as required under State Bank of Pakistan's Prudential
       Regulations for agricultural financing issued vide BPD circular No. 27 dated 22 October 2005.

10.2   This includes an amount of Rupees 297.149 million receivable on account of minimum income tax levied by the income tax
       authorities under Section 80-D of Income Tax Ordinance, 1979, for assessment years 1991-92 to 1998-99. The income of the
       Bank was exempt from tax upto income year ended 30 June 1999. The Bank paid, under protest, the disputed tax demand and
       also filed writ petition in this respect in Lahore High Court, Rawalpindi Bench, Rawalpindi. Later on, the bank withdrew the
       petition on directions of the Federal Government and the case was referred to the Law and Justice division of the Government
       of Pakistan which decided the reference in Bank’s favour. The Central Board of Revenue disagreed with the aforesaid decision
       and has further taken up the matter with Federal Cabinet for its review. Federal cabinet has referred the case to the Attorney
       General for final decision.The advice/decision of the Attorney General is still awaited. Since the Bank is very confident for a
       favourable decision from the Attorney General, no provision in this respect has been made by the Bank in its books of account.
10.3   Preliminary expenses are recognized as expense in compliance with the requirement of International Accounting Standard-38
       "Intangible Assets".

10.4   The Bank has been allowing remissions, under the instructions of the Federal Government from time to time, which aggregates
       to Rupees 5,599.476 million (31 December 2004: Rupees 5,590.397 million) including Rupees 1,741.162 million allowed under
       the Presidential Relief Package 2002. The amount has now been off-setted against the provision held as desired by the Audit
       Committee of the Board of Directors.
                                                                                                            2005            2004
10.5   Receivable from defined benefit plans                                         Note                   (Rupees in thousand)
       Pension scheme                                                                    34.3             778,701          552,942
       Benevolent scheme - officers / executives                                         34.9             156,435          140,418
       Benevolent scheme-clerical/non-clerical                                           34.14            (34,760)         (43,643)
       Gratuity scheme                                                                   34.19          1,036,035          914,550
                                                                                         10.5.1         1,936,411        1,564,267
10.5.1 It represents assets recognized by the Bank as required by International Accounting Standard-19 "Employee Benefits " against
       its defined benefit schemes on the recommendation of independent actuaries.
10.6   It represents the amount relating to the activities of the Bank in Bangladesh (former East Pakistan) before its separation. In line
       with the decision contained in Finance Division letter No.F.5(12)PEC(op-FR)/78-236 dated 06 May 1979, the Bank is accruing
       interest at the rate of 8% on its loans and advances made in Bangladesh (former East Pakistan) with contra increase in its
       liabilities (note-17) relating to its activities in Bangladesh.
10.7   It represents the amount receivable from Pension Fund Trust and Benevolent Fund Trusts against Golden Hand Shake
       Scheme.
10.8   Market value of non-banking assets acquired in satisfaction of claims is Rupees 358.680 million. Market value of non-banking
       assets acquired in satisfaction of claims for the year ended 31 December 2004, having book value of Rupees 217.472 million,
       was not available.
                                                                                                           2005                2004
                                                                                                            (Rupees in thousand)
10.9   Others
       Defence Saving Certificate                                                                                    17                17
       Advance for purchase of machinery/goods in transit                                                            17                17
       Legal charges recoverable on suits filed against loan defaulters                                         15,174              8,748
       Others                                                                                                      -                    8
                                                                                                                15,208              8,790
10.10 Provision against other assets
       Opening balance                                                                                       5,615,277         5,612,579
       Charge for the year                                                                                      12,936             2,698
       Receivable from Federal Government written off against provisions                                    (5,599,476)              -
       Closing balance                                                                                          28,737         5,615,277
11.    OPERATING FIXED ASSETS




11.1   The detail of disposal of assets whose original cost or the book value exceed one million and two hundred fifty thousand
       Rupees respectively, whichever is lower is NIL.
11.2   Acquired Land and building having a book value of Rupees 217.341 million has been transferred to other assets being the
       assets acquired in satisfaction of claims.
11   Detail of disposals of operating fixed assets.

     Particulars                    Accumulated
                        Cost                          Book Value   Sale proceeds   Gain/(loss)            Particulars of buyers
      of Assets                     Depreciation

     TLC-5 Door         700,001           490,000        210,000      1,250,000     1,040,000    Mian Allah Ditta S/O Mian Nawab R/O
      IDF-1149                                                                                   Mati Sau The. K/Wala, Khanwal

     TLC-5 Door         700,001           490,000        210,000      1,400,000     1,190,000    M.Aslam Tahir R/O. H.No.P-1566-2,
      IDE-8871                                                                                   Asghar Mall Scheme, RWP.

     TLC-5 Door         700,001           490,000        210,000      1,160,000       950,000    Awais Ali Khan R/O H.No.B-150,
      IDF-1306                                                                                   St.No.4, Mohalla Lala Rukh, Wah Cantt.

     TLC-5 Door         700,001           490,000        210,000      1,110,000       900,000    Raja M.Aftab Satti R/O H.No.B-6-150,
      IDF-1147                                                                                   Mohammadi Colony, Shakrial Rwp.

     TLC-5 Door         700,001           490,000        210,000      1,250,000     1,040,000    Qamar Naseer Ahmed R/O H.No.67168,
      IDF-1499                                                                                   Army Colony, No.2 Rwalpindi

     TLC-5 Door         700,001           490,000        210,000      1,450,000     1,240,000    M.Aurang Zeb Khan R/O H.No. P-1547-
      IDF-1320                                                                                   A/1, Naseern House Asghar Mall
                                                                                                 Scheme, Rawalpindi
     TLC-5 Door         700,001           490,000        210,000      1,190,000       980,000    Moharam Khan Raja R/O H.No.Z 670-A,
      IDF-1146                                                                                   Dhoke Rata, Raja St. Babu Lal Hussain
                                                                                                 Road, Rawalpindi
     TLC-5 Door         700,001           490,000        210,000      1,420,000     1,210,000    Zahid Akbar R/O H.No.987 St.No.96, I-
      RIU-1457                                                                                   10/1, Islamabad

     TLC-5 Door         700,001           490,000        210,000      1,120,000       910,000    M.Yousaf Amjad S/O Abdul Ghafoor,R/O
      RIU-1458                                                                                   H.No. E-1/4, St.No.10,G/7-2, Islamabad

     TLC-5 Door         700,001           490,000        210,000      1,430,000     1,220,000    Sarda Sajid Ahmed, R/OH.No.5-A, St.42
      RIU-1414                                                                                   Moh. Quaid-e-Azam Colony Dhomial
                                                                                                 Road, Rawalpindi
     TLC-5 Door         700,001           490,000        210,000      1,210,000     1,000,000    Tariq Mehmood R/O Near Mian Bazar
      RIU-1440                                                                                   Bara Kahu, Mohallad Rafiqabad,
                                                                                                 Islamabad.
     TLC-5 Door         700,001           490,000        210,000      1,300,000     1,090,000    Masood Ahmed Arif R/O Garden Town
      IDF-1042                                                                                   Highway, H.No.Kh-1376 Khana Dak
                                                                                                 Islamabad.
     TLC-5 Door         700,001           490,000        210,000      1,400,000     1,190,000    Rana M.Nawaz R/O Chak No.17 Vcc,
      IDF-1308                                                                                   The Ferozwala, Sheikhupura

      T.Coastar         700,001           490,000        210,000      1,300,000     1,090,000    Imtiaz A.Warriach R/O Near Moon Light
      IDE-5048                                                                                   School, Shahzed, St. Mohalla Margazar
                                                                                                 Colony, Gujrat
     TLC-3 Door         600,001           420,000        180,000        780,786       600,786    Mumtaz Mohammad Khan R/O Tibba
      MDAA-540                                                                                   Sultanpur, The. Mailsi, Distt. Vehari

     TLC-3 Door         600,001           420,000        180,000        720,000       540,000    Malik Sikandar Khan Awan R/O Club
      GP-2043                                                                                    Road H.No.102 Bukhari St.Sargodha.

     TLC-3 Door         600,001           420,000        180,000        856,000       676,000    ABDUL Rashid Khan R/O H.No.9-A,
      GP-2041                                                                                    Circular, Road Abbottabad Cantt.

     TLC-3 Door         600,001           420,000        180,000        866,666       686,666    Masood-ur-Rehman Khan R/O H.No.Nw-
      MNQ-4406                                                                                   1012, Rehmanabad S/Town Rawalpindi

     TLC-3 Door         600,001           420,000        180,000        707,707       527,707    Abid Ansar R/O H.No.80 Badar Block,
      LSA-8801                                                                                   Allama Iqbal Town, Lahore

     TLC-3 Door         600,001           420,000        180,000        916,786       736,786    Raja M.Asif Khan R/O Hotel Lalazar,
       A-2036                                                                                    Shaheed Road GPO Murree

     TLC-3 Door         600,001           420,000        180,000        786,786       606,786    Mumtaz Muhammad Khan R/O Tibba
       A-1884                                                                                    Sultanpura, The. Mailsi Distt. Vehari
Particulars             Accumulated
              Cost                     Book Value   Sale proceeds   Gain/(loss)           Particulars of buyers
 of Assets              Depreciation

TLC-3 Door    600,001        420,000      180,000        731,313       551,313    Shaukat Iqbal R/O H.No.80 Badar Block,
 FDP-6510                                                                         Allama Iqbal Town, Lahore

TLC-3 Door    600,001        420,000      180,000        706,707       526,707    Abid Ansar R/O H.No.80 Badar Block,
 MNQ-4238                                                                         Allama Iqbal Town, Lahore

TLC-3 Door    600,001        420,000      180,000        722,000       542,000    Raja M.Asif Khan R/O Hotel Lalazar,
 LOR-5098                                                                         Shaheed Road GPO Murree

S/Mehran      100,001         70,000       30,000        160,260       130,260    Liaquat Hussain Shah, Haji Camp Road,
IDF-4685                                                                          Nai Abadi Islamabad
Particulars              Accumulated
               Cost                     Book Value   Sale proceeds   Gain/(loss)            Particulars of buyers
 of Assets               Depreciation

 S/Mehran      100,001         70,000       30,000        185,766       155,766    Farakh Saleem Khan R/O H.No.5, St.
 IDF-4757                                                                          No.34, Korang Town, Islamabad
 S/Mehran      100,001         70,000       30,000        192,000       162,000    Qazi Ahmed Haroon S/O Shamim
 IDF-4785                                                                          Ahmed R/O, H.No.75-b Commercial
                                                                                   Market S/Town Rawalpindi
Suzuki Van      80,001         56,000       24,000        151,000       127,000    Sheikh Muhammad Nazir, H.No.k-606,
 IDB-9376                                                                          Sarfraz Road, Rawalpindi

  Honda        400,001        280,000      120,000        555,556       435,556    Muhammad Pervez R/O H.No.599
accord IDD-                                                                        St.No.14, G-10/1, Islamabad
    991
 T/Pick-up     250,001        175,000       75,000        472,999       397,999    Abdul Aziz Shah R/O Shah Street
 IDA-9788                                                                          Behind superior, Science College,
                                                                                   Mohallah Hafizabad Peshawar
 N-Pick-up      95,001         66,500       28,500        176,787       148,287    Muhammad Shah R/O Quarter No.1-V-3
 IDB-2185                                                                          , Civil Colony Cantt. Road Peshawar

T Hiace IDF-   300,001        210,000       90,000        490,000       400,000    Muhammad Hasaq R/O Haju Ghabi
    6391                                                                           Road, Shaldara Quetta
 T.Corolla     400,001        280,000      120,000        195,325        75,325    Sahib Nawaz Khan, SED (Rtd.)
 IDD-4070
 S/Car IDD-     90,001         63,000       27,000         94,590        67,590    Sher Zaman Khan Director (Rtd.)
    6460
 S/Mehran       90,001         63,000       27,000         71,936        44,936    Anwar Shirani, Director (Rtd.)
  IDE-9707
 S/Mehran       90,001         63,000       27,000         72,330        45,330    RA Mazhar Director (Rtd)
   LOM-24
S/Mehran        90,001         63,000       27,000         89,044        62,044    Sultan Muhd Khan Director (Retired)
PRP-2638
Toyota         400,001        280,000      120,000        277,636       157,636    Mr.M.Rafiq Saroya, ED (Retired) HO,
Corolla Car                                                                        Ibd.
LSA-5507
Yamaha          30,001         21,000        9,000         28,520        19,520    Mr.Iftikharullah PP.No 081123, EAD/
100 CC                                                                             Credited Officer, ZTBL, Shergarh Br.
MRF-1927
Yamaha          30,001         21,000        9,000         26,168        17,168    Mr.Azam Khan, PP.No.061908, AD/,
100 CC                                                                             Accouts Officer ZTBL, Takht Bhai
MRF-1930
Yamaha          30,001         21,000        9,000         24,679        15,679    Mr.Azam Khan, PP.No.061908, AD/,
100 CC SB-                                                                         Accouts Officer ZTBL, Takht Bhai
6501
SKE-763         22,001         15,400        6,600          9,999         3,399    Mr.Abdul Hakim Soomro, N/Qasid,
Yamaha                                                                             Sheikhupura
SKE-772         22,001         15,400        6,600         18,200        11,600    Mr.Zulfiqar Ali    Shaikh      EAD/MCO
Yamaha                                                                             Kandhkot Br.
Yamaha          30,001         21,000        9,000         15,800         6,800    Mr.M.Ramazan,       N/Qasid,     RMO,
100 CC                                                                             Bahawalpur
BRF-8082
Yamaha          30,001         21,000        9,000         15,700         6,700    Mr.Abdul Ghaffar,Driver,         RMO,
100 CC                                                                             Bahawalpur
BRF-8835
Yamaha          30,001         21,000        9,000         19,747        10,747    Mr.Shakil Ahmed, Driver,Bahawalpur
100 CC                                                                             Branch
BRF-8813
Yamaha          30,001         21,000        9,000         27,899        18,899    G.H. Shahzad/EAD/MCO, Chiniot Branch
100 CC
FDU-7513
SAD-1795        27,001         18,900        8,100         11,769         3,669    Shoukat Ali,      Driver,   RM    Office
Yamaha                                                                             Sheikhupura
SAD-2822        27,001         18,900        8,100         13,799         5,699    Noor Mohd, AD, RM Office Sheikhupura
Yamaha
SAC-9842        25,001         17,500        7,500         13,949         6,449    Waqar Aslam, N/Qasid RM Offoce
Yamaha                                                                             Sheikhupura
TSA-5972        26,001         18,200        7,800         18,000        10,200    Mr.Abdul Waheed, Sr.Asstt., Rajana
yamaha                                                                             Town Br.
Particulars               Accumulated
               Cost                      Book Value   Sale proceeds   Gain/(loss)   Particulars of buyers
 of Assets                Depreciation

              #########     13,120,800    5,623,200     29,214,209    23,591,009
                                                                                                     2005            2004
                                                                                       Note          (Rupees in thousand)
12.   DEFERRED TAX ASSETS
      Deferred tax arising in respect of
          Tax depreciation                                                                               1,829              1,222

                                                                                                         1,829              1,222
13    BILLS PAYABLE
      In Pakistan                                                                                     235,741            197,434
      Outside Pakistan                                                                                    -                  -
                                                                                                      235,741            197,434
14    BORROWINGS FROM FINANCIAL INSTITUTIONS
      In Pakistan                                                                                  51,257,213         51,257,213
      Outside Pakistan                                                                                    -                  -
                                                                                                   51,257,213         51,257,213
14.1 Particulars of borrowings from financial institutions
      In local currency                                                                            51,257,213         51,257,213
      In foreign currencies                                                                               -                  -
                                                                                                   51,257,213         51,257,213
      Secured
         Borrowings from State Bank of Pakistan
             Agricultural loans                                                         14.2       50,174,089         50,174,089
             Agri-Project loans                                                         14.3        1,083,124          1,083,124
                                                                                                   51,257,213         51,257,213

14.2 As per agreement with the State Bank of Pakistan, these loans were obtained for providing finance to customers for
     agriculture purposes. Three credit lines amounting to Rupees 1.577 billion carry interest rate of 4% per annum while
     remaining thirty two credit lines amounting to Rupees 49.680 billion are based on profit and loss sharing subject to
     maximum share of profit to State Bank of Pakistan ranging from 4% to 10% per annum. These loans are secured by way
     of guarantee of Government of Pakistan.The bank has submitted a proposals to State Bank of Pakistan for restructuring
     the debt according to which the State Bank of Pakistan's debt of Rupees 51.257 billion and State Bank of Pakistan's
     subordinated debt of Rupees 3.204 billion is repayable in 15 years in 30 bi-annual installment with a grace period of 3
     years starting from July 2003 i.e. the period of 15 years for repayment of State Bank of Pakistan debts will start from July
     2006.

      State Bank of Pakistan vide its letter No. ACD/3104/Loans-15-A/2004 dated 16 December 2004 has approved the above
      said proposal except for the terms and conditions in respect of markup rate which is still under negotiation. In view of the
      critical importance of debt pricing for the future finacial viability and sustainability of Zarai Taraqiati Bank Limited the
      matter has been referred to Ministry of Finance for a considered Government decision. Keeping in view the above stated
      facts mark-up has been charged on these loans as per existing contractual rates in respective credit lines.

14.3 These loans were given by the State Bank of Pakistan for the purpose of providing finance to agro based industry. These
     are subject to profit and loss sharing with a maximum share of profit to State Bank of Pakistan ranging from 4% to 6 % per
     annum. These are secured by guarantee given by the Government of Pakistan. The bank has submitted a proposal to
     State Bank of Pakistan for restructuring of the debt as stated in note 14.2.
                                                                                                  2005            2004
                                                                                     Note         (Rupees in thousand)
15   DEPOSITS AND OTHER ACCOUNTS
     Customers
     Fixed deposits                                                                                  64,742            69,665
     Saving deposits                                                                                111,724           160,886
     Current accounts - remunerative                                                                297,174           245,459
     Current accounts - non-remunerative                                                          2,136,334         2,622,759
     Others - unclaimed deposits                                                                     34,673            23,437
                                                                                     15.1         2,644,647         3,122,206
15.1 Particulars of deposits
     In local currency                                                                            2,644,647         3,122,206
     In foreign currencies                                                                              -                 -
                                                                                                  2,644,647         3,122,206
16   SUB-ORDINATED LOAN
     As per restructuring plan of the Bank approved by the ECC of the cabinet, State Bank's Equity holding of Rupees 3.204
     billions was converted into sub-ordinated loan on terms to be agreed with State Bank of Pakistan. Accordingly, the Bank
     has submitted a proposal to State Bank of Pakistan for repayment of the loan in 15 years in 30 bi-annual installments
     starting from July 2006 and rate of mark up to be pegged at weighted average yield of 12 months treasury bill rate at the
     rate of 2.3558% per annum as per treasury bill auction dated 12 June 2003 and capped at the aforesaid markup rate for
     an initial period of five years. State Bank of Pakistan vide its letter No. ACD/3104/Loans-15-A/2004 dated 16 December
     2004 has agreed with proposed terms except the proposed capping of markup rate which has been fixed on last auction's
     weighted yield of Government Treasury bill of 12 months maturity on floating basis every year.

     Since the capping of markup charges at 2.3558% has not been agreed by SBP which is of critical importance for the
     future financial viability and sustainability of Bank, the matter has been referred to Ministry of Finance for considered
     government decision. However the markup on sub-ordinated debt at the rate of 2.3558% (from 14 December 2002 to 30
     June 2004), 2.1867% (from 01 July 2004 to 30 June 2005) and at the rate of 8.4009% (from 01 July 2005 to 31 December
     2005) has been charged which is subject to adjustment on finalization of debt restructuring/repricing agreement with State
     Bank of Pakistan.
                                                                                                  2005            2004
                                                                                     Note         (Rupees in thousand)
17   OTHER LIABILITIES
     Mark-up/ return/ interest payable in local currency                                         6,624,360          6,301,937
     Accrued expenses                                                                               37,512             37,370
     Taxation                                                                                      672,032            792,069
     Payable to Ministry of Food Agriculture and Livestock                           17.1          352,715            332,527
     Profit payable on deposits and other accounts                                                  19,282             19,207
     Liabilities relating to Bangladesh                                              10.6        1,343,424          1,314,054
     Provision for employees' post retirement medical benefits                                   3,649,671          3,586,925
     Provision for employees' compensated absences                                                 355,011            300,672
     Payable to employees' against Golden handshake scheme                                          33,133             75,628
     Security deposits                                                                             209,153             95,852
     Sundry deposits                                                                               140,919            180,048
     Others                                                                                          4,306             12,069
                                                                                                13,441,518         13,048,358
17.1   It represents the amount of Rupees 9.715 million, Rupees 168.000 million and Rupees 175.000 million payable to Ministry of
       Food Agriculture and Livestock under Japanies KR-II grant-1996, Crop Maximization Project-Productivity enhancement on
       sustainable basis and incentive for Baluchistan respectively.
                                                                                                  2005                2004
                                                                                                   (Rupees in thousand)
18     DEFERRED INCOME
       Opening balance                                                                                     17,105                 -
       Receipt during the year against Senior Management Team Remuneration                                 17,121              23,454
       Amortization during the year                                                                        32,178               6,349
       Closing balance                                                                                      2,048              17,105
19     SHARE CAPITAL
19.1   Authorized Capital
       2,500,000,000 Ordinary Shares of Rupees 10 each
       (31 December 2004: 2,500,000,000 ordinary shares of Rupees 10 each)                            25,000,000          25,000,000
19.2   Issued, subscribed and paid up
       1,186,961,201 ordinary shares of Rupees 10 each fully paid                                     11,869,612          11,869,611
       (31 December 2004: 1,186,961,100 shares of Rupees 10 each fully paid)                          11,869,612          11,869,611
                                                       Number of                  Paid-up value
       Shareholder
                                                     ordinary shares                per share
                                                                                   Rupees
       Government of Pakistan                        1,185,961,201                     10             11,859,612          11,859,611
       Government of Punjab                                277,100                     10                  2,771               2,771
       Government of Sindh                                 119,000                     10                  1,190               1,190
       Government of NWFP                                   68,000                     10                    680                 680
       Government of Balochistan                            35,900                     10                    359                 359
       Erstwhile East Pakistan                             500,000                     10                  5,000               5,000
                                                     1,186,961,201                                    11,869,612          11,869,611
20     ADVANCE AGAINST EQUITY
       An amount of Rupees 2,918,955,000 was transferred by the Federal Government as cash equity against which the shares
       amounting to Rupees 2,918,953,990 have been issued during the year ended 31 December 2004 and the balance of Rupees
       1,010 have been issued during the year ended 31 December 2005.
21     STATUTORY RESERVE
       This represent reserve maintained as per requirement of Section 21 of the Banking Companies Ordinance ,1962.
22     CONTINGENCIES RESERVE
       The Bank has set aside contingencies reserve for insurance of cash, building and vehicles.
23     SURPLUS/(DEFICIT) ON REVALUATION OF ASSETS
       Surplus on revaluation of fixed assets
       Less: Surplus on disposal                                                                              -                   -
             Incremental depreciation                                                                         -                   -
                                                                                                              -                   -
       Surplus on revaluation of securities
       i) Federal and Provincial Government securities                                                       -                   -
       ii) Quoted shares                                                                                 242,543             134,569
       iii) Other securities                                                                               2,500               2,500
                                                                                                         245,043             137,069
                                                                                                         245,043             137,069
24     CONTINGENCIES AND COMMITMENTS
24.1   Contingent liability in respect of 15 cases (31 December 2004: 14 cases) filed against the Bank by various parties is estimated
       at Rupees 11,307 million (31 December 2004: Rupees 10,600 million).
24.2   Contingent liability in respect of 05 cases (31 December 2004: 24 cases) filed against the Bank in various courts of law by the
       employees is estimated at Rupees 0.572 million (31 December 2004: Rupees 3.022 million).
24.3   Income tax of Rupees 929.632 million was levied by the income tax department for assessment year 2001-2002, against
       provision of Rupees 326.281million in the books of account of the Bank for that assessment year. The Bank has paid Rupees
       785,103 million and also filed appeal before the Commissioner of Income Tax (Appeals) agaist the aforesaid order. The
       commissioner has setaside the aforesaid order. However, the tax department preferred an appeal against the order of CIT(A)
       before the ITAT which is pending for hearing.

24.4   Income tax of Rupees 1,928.362 million was levied by the income tax department for assessment year 2002-2003, against
       provision of Rupees 1,919.929 million in the books of account of the Bank for that assessment year. The Bank has paid Rupees
       577.092 million against the said demand and also filed an appeal before the Commissioner of Income Tax (Appeals). The
       commissioner has setaside the aforsaid order and now tax department preferred an appeal against the order of CIT(A) before
       the ITAT.
24.5   The Government of Pakistan has reduced the markup rates on ZTBL advances from 14% to 9% vide Presidential Releif Package
       2004 w.e.f. 01 July 2004. As per the directive of the bank's Board of Directors, the bank has requested the Ministry of Finance to
       compensate the loss of revenue due to this reduction in rate of markup. The total claim in this respect has provisionally been
       worked out at Rupees 3,640 millions for the period from 01 July 2004 to 31 December 2005. However, this amount has not been
       accounted for in the accounts as the formal approval from Ministry of Finance has not been received by the bank.

                                                                                       Note               2005             2004
                                                                                                           (Rupees in thousand)
25     MARK UP/RETURN/INTEREST EARNED
       On loans and advances to
         i) Customers                                                                                     5,479,450           7,911,216
       On investments in:
        i) Held for trading securities                                                                          -                   -
        ii) Available for sale securities                                                                       -                   -
        iii) Held to maturity securities                                                                    290,496                 599
       On deposits with financial institutions                                                            1,052,773             193,568
                                                                                                          6,822,719           8,105,383
26     MARK UP/RETURN/INTEREST EXPENSED
       Deposits                                                                                               5,115               4,641
       Short term borrowings - State Bank of Pakistan                                                           -                   -
       Long term borrowings - State Bank of Pakistan                                                        385,502           3,129,062
       Bank commission and other charges                                                                      1,121               2,033
                                                                                                            391,738           3,135,736
27     OTHER INCOME
       Rent on property                                                                                       7,326               1,777
       Net profit/ (loss) on sale of property and equipment                                                  23,591                 (14)
       Loan application fee                                                                                 309,875             310,629
       Excess provision relating to defined benefit plans                               27.1                270,279             305,018
       Others                                                                           27.2                185,269             322,580
                                                                                                            796,341             939,990
27.1   Excess provision in respect of defined benefit plans has been written back on the basis of actuarial valuation carried out by an
       independent actuarial valuer.
27.2   OTHERS
       Recovery of loans transferred to proforma ledger                                                      15,250               3,529
       Sale proceeds of forms                                                                                 3,771               3,975
       Recovery charges                                                                                      41,062             217,325
       Postal charges received from loanees                                                                  44,226              45,755
       Recovery of private use of vehicles                                                                      753                 685
       Miscellaneous income                                                                                  80,207              51,311
                                                                                                            185,269             322,580
                                                                                 Note          2005             2004
                                                                                                (Rupees in thousand)
28     ADMINISTRATIVE EXPENSES
       Salaries, allowances etc.                                                               2,062,107       1,945,280
       Contribution to defined contribution plan - Provident Fund                                    240             389
       Non-executive directors' fees, allowances and other expenses                                  649             134
       Rent, taxes, insurance, electricity, etc.                                                  75,231          72,011
       Legal and professional charges                                                              3,800           2,661
       Communications                                                                             35,275          37,240
       Repairs and maintenance                                                                    10,534          10,785
       Motor vehicles expenses                                                                   162,920         143,594
       Traveling expenses                                                                         72,579          77,588
       Stationery and printing                                                                    21,968          22,699
       Advertisement and publicity                                                                14,142          13,194
       Auditors' remuneration                                                    28.1              3,386           2,814
       Depreciation                                                                               85,806          88,403
       Amortization of preliminary expenses                                                        6,570           2,190
       Others                                                                                     24,952          18,269
                                                                                               2,580,159       2,437,251
28.1   Auditors' remuneration
       Audit fee                                                                                  1,200                924
       Fee for audit of foreign branches                                                            -                  -
       TA/DA for auditors                                                                         1,333
       Special certifications and sundry advisory services                                          400              240
       Tax services                                                                                 227              742
       Out of pocket expenses                                                                       226              908
                                                                                 28.2             3,386            2,814
28.2   Particulars of auditors' remuneration
                                                       2005                                     2004
                                  RIAZ AHMAD                                  RIAZ AHMAD
                                                       KMRSRIR*        Total                  KMRSRIR*         Total
                                  & COMPANY                                   & COMPANY
                                                              ( R u p e e s in t h o u s a n d )
       Audit fee                            600                  600    1,200         462           462              924
       Tax services                         -                    227      227         -             742              742
       Other certification                  200                  200      400         120           120              240
       Out of pocket expenses             1,014                  545    1,559         454           454              908
                                          1,814                1,572    3,386       1,036         1,778            2,814

       * Khalid Majid Rahman Sarfaraz Rahim Iqbal Rafiq
29     OTHER CHARGES
       Penalties imposed by State Bank of Pakistan                                                3,802            2,196
                                                                                                  3,802            2,196
30     TAXATION
       For the year
         Current                                                                                 38,434          503,234
         Deferred                                                                                  (607)               5
                                                                                                 37,827          503,239
       For the prior year(s)
         Current                                                                                    -                  -
         Deferred                                                                                   -                  -
                                                                                                    -
                                                                                                 37,827          503,239
                                                                                      Note               2005             2004
                                                                                                          (Rupees in thousand)
30.1   Relationship between tax expense and accounting profit
         Accounting profit / (loss) for the current period                                                 (91,367)         1,167,225
         Add: Deferred cost                                                                                    -                  -
               Accounting depreciation                                                                      85,806             88,403
         Less: Tax depreciation                                                                             23,129             22,936
                                                                                                           (28,689)         1,232,692
         Tax - excluding dividend income                                                                   38,111             502,932
         Tax on dividend income                                                                               323                 301
         Tax for the current period                                                                         38,434            503,234
         Applicable tax rate                                                                             0.5%                     41%
31     BASIC EARNINGS PER SHARE
       Profit / (loss) for the period                                   Rupees in thousand               (129,194)            663,986
       Number of ordinary shares                                        Numbers in thousand             1,186,961           1,065,338
       Earnings per share                                               Rupees                              (0.11)               0.62
32     CASH AND CASH EQUIVALENTS
       Cash and balance with treasury banks                                                             1,585,421           1,593,898
       Balance with other banks                                                                         7,813,844          14,791,268
                                                                                                        9,399,265          16,385,166
33     STAFF STRENGTH
       Total number of employees at the end of the year                 Number of Employees                  5,727               5,801
34     DEFINED BENEFIT PLANS
34.1   Pension scheme
       For new employees and for those who opted for the new scheme introduced in 1975 for clerical staff and in 1977 for officers, the
       Bank operates an approved funded pension scheme on which monthly contributions are made on the basis of actuarial
       recommendation.
34.2   Principal actuarial assumption
       The latest actuarial valuation is carried out as at 31 December 2005. The actuarial valuations were made using the Projected
       Unit Credit Actuarial Cost method based on the following significant assumption:
       Valuation discount rate                      -   9% per annum
       Expected rate of increase in salary          -   8% per annum
       Expected rate of return on investments       -   9% per annum
34.3   Reconciliation of payable/ (recoverable) to/ (from) pension fund
       Present value of obligation                                                                      2,794,466            2,209,128
       Fair value of assets                                                                            (4,057,773)          (3,885,766)
       Unrecognized actuarial gain/(loss)                                                                 484,606            1,123,696
                                                                                                         (778,701)            (552,942)
34.4   Movement in payable/ (recoverable) to/ (from) pension fund
       Opening liability                                                                                 (552,942)           (415,267)
       Charge for the period                                                          34.5               (138,553)            (51,500)
       Contribution to fund made during the period                                                        (87,206)            (86,175)
       Closing liability/(asset)                                                                         (778,701)           (552,942)
34.5   Charge for pension fund
       Current service cost                                                                                52,126              48,823
       Interest cost                                                                                      176,730             161,107
       Expected return on plan assets                                                                    (310,861)           (241,153)
       Adjusted for outgoing employees                                                                    (56,548)            (20,277)
                                                                                                         (138,553)            (51,500)
       Benevolent scheme - officers / executives
34.6   General Description
       For all officers/executives, the Bank operates an approved funded benevolent scheme to which contributions are made at the
       rate 2% of basic pay to a maximum of Rupees 100, by each officer/executive. Employee contributions are matched by an equal
       amount of contributions by the Bank which is also liable to meet any shortfall in the fund.
34.7   Principal actuarial assumption
       The latest actuarial valuation is carried out as at 31 December 2005. Actuarial valuation was made using the following significant
       assumption:
       Expected rate of increase in salary           -   8% per annum
       Expected rate of return on investments        -   9% per annum
                                                                                       Note               2005             2004
                                                                                                           (Rupees in thousand)
34.8   Reconciliation of payable/(receivable) to /(from) benevolent fund
       Present value of obligation                                                                          187,332             193,799
       Fair value of plan assets                                                                           (386,738)           (381,310)
       Unrecognized part of transitional liability                                                              -                   -
       Unrecognized actuarial gain/(loss)                                                                    42,971              47,093
                                                                                                           (156,435)           (140,418)
34.9   Movement in payable/(recoverable) to/ (from) benevolent fund
       Opening liability                                                                                   (140,418)           (117,386)
       Charge for the period                                                           34.10                (11,346)            (18,624)
       Contribution to fund made during the period                                                           (4,671)             (4,408)
       Closing liability/(asset)                                                                           (156,435)           (140,418)
34.10 Charge for benevolent fund
       Current service cost                                                                                   9,015                8,168
       Interest cost                                                                                         15,504               13,952
       Expected return on plan assets                                                                       (30,505)             (26,650)
       Acturial (gain)/losses recognized                                                                       (689)              (9,686)
       Transitional liability recognized                                                                        -                    -
       Contributions from employees                                                                          (4,671)              (4,408)
                                                                                                            (11,346)             (18,624)
       Benevolent scheme-clerical/non-clerical
34.11 General Description
       For all clerical/non-clerical staff, the Bank operates an approved funded benevolent scheme to which contributions are made at
       different rates but not exceeding Rupees 100 by each employee. Employee contributions are matched by an equal amount of
       contributions by the Bank which is also liable to meet any shortfall in the fund.
34.12 Principal actuarial assumption
       The latest actuarial valuation is carried out as at 31 December 2005. Actuarial valuation was made using the following significant
       assumption:
       Expected rate of increase in salary           -   8% per annum
       Expected rate of return on investments        -   9% per annum
34.13 Reconciliation of payable/(receivable) to /(from) benevolent fund
       Present value of obligation                                                                           49,297              54,794
       Fair value of plan assets                                                                           (171,473)           (173,028)
       Unrecognized part of transitional liability                                                           (7,606)            184,661
       Unrecognized actuarial gain/(loss)                                                                   164,542             (22,784)
                                                                                                             34,760              43,643
                                                                                       Note              2005             2004
                                                                                                          (Rupees in thousand)
34.14 Movement in payable/(recoverable) to/ (from) benevolent fund
       Opening liability                                                                                    43,643              49,275
       Charge for the period                                                          34.15                 (6,247)             (3,146)
       Contribution to fund made during the period                                                          (2,636)             (2,486)
       Closing liability/(asset)                                                                            34,760              43,643
34.15 Charge for benevolent fund
       Current service cost                                                                                  3,544                4,028
       Interest cost                                                                                         4,384                4,610
       Expected return on plan assets                                                                      (13,842)             (12,399)
       Acturial (gain)/losses recognized                                                                   (12,874)             (12,078)
       Contributions from employees                                                                         (2,637)              (2,485)
       Transitional liability recognized                                                                    15,178               15,178
                                                                                                            (6,247)              (3,146)
       Gratuity scheme
34.16 General description
       For all employees and for those who did not opt for the new scheme introduced in 1975 for clerical/non-clerical staff and in 1977
       for officers, the Bank operates an approved funded gratuity scheme on which monthly contributions are made by the Bank on the
       basis of actuarial recommendation.
34.17 Principal actuarial assumption
       The latest actuarial valuation is carried out as at 31 December 2005. The Projected Unit Credit Actuarial Cost method with the
       following significant assumption was used for actuarial valuation purposes:
       Expected rate of increase in salary       -   8% per annum
       Expected rate of return on investments    -   9% per annum
34.18 Reconciliation of payable/(recoverable) to/ (from) gratuity fund


       Present value of obligation                                                                             275                 635
       Fair value of plan assets                                                                        (1,296,996)         (1,237,421)
       Unrecognized actuarial gains/(loss)                                                                 260,686             322,236
                                                                                                        (1,036,035)           (914,550)
34.19 Movement in Payable /(recoverable) to/ (from) gratuity fund
       Opening liability                                                                                  (914,550)           (796,873)
       Charge for the year                                                            34.20               (114,133)           (109,954)
       Contribution to fund made during the period                                                          (7,352)             (7,723)
       Closing liability/(asset)                                                                        (1,036,035)           (914,550)
34.20 Charge for gratuity fund
       Current service cost                                                                                     79                 136
       Interest cost                                                                                            51                  81
       Expected return on plan assets                                                                      (98,994)            (92,684)
       Recognized actuarial (gains) / losses                                                               (15,269)            (17,487)
       Adjusted for outgoing employees                                                                         -                   -
                                                                                                          (114,133)           (109,954)
35   DEFINED CONTRIBUTION PLAN
     For all the employees of the Bank who have opted new retirement benefits scheme announced in 1975 and 1977 for clerical/non-clerical staff
     and for executives/officers, respectively, the Bank operates an approved non-contributory provident fund through an independent trust.
     Contributions to the fund are made by the employees only at the rate of 8% of mean of pay scale per month. For employees who have not
     opted for aforesaid new retirement benefit scheme, the Bank operates an approved contributory provident fund where contributions are made
     by the Bank and employees at the rate of 8.33% of basic salary per month.
36   REMUNERATION OF DIRECTORS AND EXECUTIVES
                                                          President                       Directors                       Executives
                                                      2005          2004              2005          2004           2005                2004
                                                                               ( R u p e e s i n t h o u s a n d )
     Fee                                                     -            -               610              20           -                  -
     Managerial remuneration                               3,600        1,516              -             -            2,340                574
     Charge for defined benefit plan                         -            107              -             -              -
     Contribution to defined contribution plan               -            334              -             -              -                    48
     Rent and house maintenance                              840          520              -             -              960                230
     Utilities                                               -            207              -             -              255                  57
     Medical                                                 -            221              -             -                25                 63
     Conveyance                                              271          274              -             -              361                102
     Furnishing allowance                                                 100              -             -              -                  -
     Education expenses                                                     47             -             -              -                  -
     Leave fare assistance                                                406              -             -              -                  -
     Club facility                                                          99             -             -              -                  -
     Others                                                   300         145                            113            195                -
                                                           5,011        3,976             610            133          4,136              1,074
     Number of persons                                         1              1            7               7                2                   1
     Executives mean employees, other than the chief executive and directors, whose basic salary exceeds five hundred thousand Rupees in a
     financial year. The Chief Executive / Executives are provided with Bank maintained cars.
                                                                                                    2005
                                                                                  Upto three Over 3 months Over one year            Over five
37   MATURITIES OF ASSETS AND LIABILITIES                             Total
                                                                                   months       to one year  to five years           years
                                                                                   ( R u p e e s i n t h o u s a n d )
     Assets
     Cash and balances with treasury banks                           1,585,421     1,585,421             -               -                -
     Balances with other banks                                       7,813,844     7,813,844             -               -                -
     Investments                                                    12,820,668     9,065,149       1,448,552         818,208        1,488,759
     Advances                                                       52,925,286         2,075      32,742,470       4,001,540       16,179,201
     Other assets                                                    8,010,698         8,256       4,955,954       3,050,688              -
     Operating fixed assets                                            690,141           -               -           261,415          428,726
     Deferred tax assets                                                 1,829           -               -             1,222              607
                                                                    83,847,887    18,474,745      39,146,976       8,133,073       18,097,293
     Liabilities
     Bills payable                                                     235,741       235,741             -               -                 -
     Borrowings from financial institutions                         51,257,213           -         1,818,385      14,523,076        34,915,752
     Deposits and other accounts                                     2,644,647     2,580,662           3,149          58,433             2,404
     Sub-ordinated loans                                             3,204,323           -               -               -           3,204,323
     Liabilities against assets subject to finance lease                   -             -               -               -                 -
     Other liabilities                                              13,441,518        51,313       6,904,007       4,273,860         2,212,338
     Deferred income                                                     2,048         2,048             -               -                 -
                                                                    70,785,490     2,869,764       8,725,541      18,855,369        40,334,817
                                                                    13,062,397    15,604,981      30,421,435     (10,722,296)      (22,237,524)
     Net assets represented by

     Share capital                                                  11,869,612
     Advance against equity                                                -
     Statutory reserve                                                 215,387
     Contingncies reserve                                               30,000
     Accumulated profit                                                702,355
     Surplus on revaluation of assets (investments)                    245,043
                                                                    13,062,397
38 Related party transactions

    Loan made to the General Provident Trust                                                                                                                                   -              -

39 YIELD/INTEREST RATE RISK

    Yield/Interest rate sensitivity position for on-balance sheet instruments is based on the earlier of contractual re-pricing or maturity date.


                                                                                                                          2005
                                                    Effective                                                        Exposed to Yield/ Interest risk                                 Not exposed
                                                      Yield/           Total           Upto three       Over 3 months            Over one year                     Over five           to Yield/
                                                    Interest                            months           to one year              to five years                     years              Interest
                                                       rate                                                                                                                              Risk
    On-balance sheet financial instruments           (% p.a)                                                      ( R u p e e s i n t h o u s a n d )

    Assets

    Cash and balances with treasury banks                             1,585,421                  -                 -                                       -                 -         1,585,421
    Balances with other banks                         8.24            7,813,844                  -                 -                                       -                 -         7,813,844
    Investments                                       5.52           12,820,668                  -                 -                                       -             339,714      12,480,954
    Advances                                          8-9            52,925,286                2,075        32,742,470                               4,001,540        16,179,201             -
    Other assets                                                      8,010,698                  -                 -                                       -                 -         8,010,698
                                                                     83,155,917                2,075        32,742,470                               4,001,540        16,518,915      29,890,917
    Liabilities

    Bills payable                                                       235,741                 -                  -                                        -                 -          235,741
    Borrowings from financial institutions            6.09           51,257,213                 -            1,818,385                               14,523,076        34,915,752            -
    Deposits and other accounts                       1-2.5           2,644,647           2,580,662              3,149                                   58,433               -            2,404
    Other liabilities                                                13,441,518             136,699          3,534,825                                4,273,860         5,542,038            -
    Deferred income                                                       2,048               2,048                -                                        -                 -              -
                                                                     67,581,167           2,719,409          5,356,359                               18,855,369        40,457,790        238,145
                                                                     15,574,750          (2,717,334)        27,386,111                              (14,853,829)      (23,938,875)    29,652,772

    On-balance sheet gap
    Off-balance sheet financial instruments
    Forward Lendings                                                           -                 -                  -                                         -                -              -
    (Including call lending, repurchase agreement lending,
    commitments to extend credit, etc.)
    Forward borrowings                                                         -                 -                  -                                         -                -              -
    (Including call borrowing, repurchase agreement borrowing,
    commitments to extend credit, etc.)
    Off-balance sheet gap                                                      -                 -                  -                                         -                -              -

    Total Yield/Interest Risk Sensitivity Gap                        15,574,750          (2,717,334)        27,386,111                              (14,853,829)      (23,938,875)    29,652,772

    Cumulative Yield/Interest Sensitivity Gap                        15,574,750          12,857,416         40,243,527                              25,389,698         1,450,823      31,103,595

40 CURRENCY RISK
                                                                                                                                                       2005
                                                                                                                                                                 Off-Balance         Net foreign
                                                                                                        Assets             Liabilities
                                                                                                                                                                 sheet items          exposure
                                                                                                                                     ( R u p e e s i n t h o u s a n d )
    Pakistan rupee                                                                                                  -                                   -                    -                -
    United States dollar                                                                                            -                                   -                    -                -
    Great Britain pound                                                                                             -                                   -                    -                -
    Deutsche mark                                                                                                   -                                   -                    -                -
    Japanese yen                                                                                                    -                                   -                    -                -
    Euro                                                                                                            -                                   -                    -                -
    Other currencies                                                                                                -                                   -                    -                -
                                                                                                                    -                                   -                    -                -
41 FAIR VALUE OF FINANCIAL INSTRUMENTS

41.1 On-balance sheet financial Instruments                                                                                        2005                                                  2004
                                                                                                           Book value                     Fair value              Book value                       Fair value
                                                                                                                                      ( R u p e e s i n t h o u s a n d )
     ASSETS
     Cash and balances with treasury banks                                                                   1,585,421                                  1,585,421                1,593,898          1,593,898
     Balances with other banks                                                                               7,813,844                                  7,813,844               14,791,268         14,791,268
     Investments                                                                                            12,820,668                                 12,820,668                2,849,677          2,849,677
     Advances - net                                                                                         52,925,286                                 52,925,286               54,335,440         54,335,440
     Other assets                                                                                            8,010,698                                  8,010,698                9,381,766          9,381,766
                                                                                                            83,155,917                                 83,155,917               82,952,049         82,952,049
     LIABILITIES

     Bills payable                                                                                             235,741                                    235,741                  197,434            197,434
     Borrowings from financial institutions                                                                 51,257,213                                 51,257,213               51,257,213         51,257,213
     Deposits and other accounts                                                                             2,644,647                                  2,644,647                3,122,206          3,122,206
     Sub-ordinated loan                                                                                      3,204,323                                  3,204,323                3,204,323          3,204,323
     Other liabilities                                                                                      13,441,518                                 13,441,518               13,048,358         13,048,358
                                                                                                            70,783,442                                 70,783,442               70,829,534         70,829,534
41.2 Off-balance sheet financial Instruments

     Forward purchase of foreign exchange                                                                            -                                         -                         -                  -
     Forward agreements for borrowing                                                                                -                                         -                         -                  -
     Forward sale of foreign exchange                                                                                -                                         -                         -                  -
     Forward agreements for lending                                                                                  -                                         -                         -                  -

     The fair value of investment is based on quoted market prices and rates at Reuters Pages (PKRV) with the exception of un quoted securities.

42 CONCENTRATION OF CREDIT AND DEPOSITS
     Out of total financial assets of Rupees 83,155.917 million the financial assets which were subject to credit risk amounted to Rupees 29,652.772 million. The Bank's major credit risk is
     concentrated in the agriculture sector. To manage credit risk, the Bank applies credit limits to its customers and obtains adequate collaterals.


42.1 Credit Risk Management.
     Credit risk is the risk that one party to a financial instrument will fail to discharge its obligation and cause the other party to incur financial loss. Credit risk in the Bank's portfolio is monitored,
     reviewed and analyzed by its credit department and the exposure is controlled through continuous review and conservative provisions for doubtful receivable, credit limits and prudent use of
     collaterals, as required by prudential regulation framed by the State Bank of Pakistan for banks.


                                                                                                                                       2005
42.2 Segment by class of business                                                                                                                                              Contingencies and
                                                                               Advances                                          Deposits
                                                                                                                                                                                 Commitments
                                                                      Rupees             Percent             Rupees                         Percent                          Rupees            Percent
                                                                       '000'                                  '000'                                                           '000'
     Agribusiness                                                     51,083,952                  97                -                                          -                       -                    -
     Individuals                                                             -                   -            2,644,647                                        100              11,307,720                  95
     Others (staff advances)                                           1,841,334                   3                -                                          -                   572,000                   5
                                                                      52,925,286                 100          2,644,647                                        100              11,879,720                 100
42.3 Segment by sector
                                                                                                                                       2005
                                                                               Advances                                          Deposits                                      Contingencies and
                                                                                                                                                                                  commitments
                                                                      Rupees             Percent             Rupees                         Percent                          Rupees            Percent
                                                                       '000'                                  '000'                                                           '000'
     Public/ Government                                                      -                   -               35,191                                        -                   572,000                   5
     Private                                                          52,925,286                 100          2,609,457                                         99              11,307,720                  95
                                                                      52,925,286                 100          2,644,648                                         99              11,879,720                 100
43 GEOGRAPHICAL SEGMENT ANALYSIS

                                                                                                                                               2005
                                                                                                                                                                                  Contingencies
                                                                                                   Profit before                                               Net assets
                                                                                                                          Total assets employed                                        and
                                                                                                     taxation                                                  employed
                                                                                                                                                                                  commitments
                                                                                                                             ( R u p e e s i n t h o u s a n d )

     Pakistan                                                                                           (91,367)                            83,847,887              13,062,397       11,879,720
     Asia Pacific (including South Asia)                                                                    -                                      -                       -                -
     Others                                                                                                 -                                      -                       -                -
                                                                                                        (91,367)                            83,847,887              13,062,397       11,879,720

44 DATE OF AUTHORIZATION FOR ISSUE

     These financial statements were authorized for issue on _________________ 2006 by the Board of Directors of the Bank.

45 GENERAL

45.1 Figures have been rounded off to the nearest thousand rupees.

45.2 These financial statements have been prepared in accordance with the revised format of financial statements for banks issued by the State Bank of Pakistan vide BSD Circular No. 36 dated 10
     October 2001.

45.3 Captions as prescribed by BSD Circular No. 36 dated 10 October 2001 issued by the State Bank of Pakistan in respect of which there are no amounts have not been reproduced in these
     financial statements except for the balance sheet and profit and loss account.




     PRESEIDENT                                  DIRECTOR                                        DIRECTOR                                                                           DIRECTOR
                                                                                                                                                                                                                     Annexure-1
                                                                                               ZARAI TARAQIATI BANK LIMITED
                                                            STATEMENT SHOWING WRITTEN OFF LOAN OR ANY OTHER FINANCIAL RELEIF OF FIVE HUNDRED THOUSAND
                                                                           OR ABOVE PROVIDED DURING THE PERIOD ENDED DECEMBER 31 2005
                                                                                                                                                                                     ( Rs. in Million )

Sr.                                       Name of Individual/parteners/
        Name & Address of the borrower                                    NIC Numbers        Father's/Husband Name    Outstanding Liabilities at beginning of the year                     Amount Written off
No.                                                 Directors
                                                                                                                     Principal     Interest        others       Total    Principal         Interest        others        Total
 1    SIRANI INDUSTIRES                  CAP.SHEHREZ LATIF (LATE)         155-47-033125   CH. ABDUL LATIF                  1.092     0.493        0.000         1.585     0.513              0.008         0.000            0.521
      MOUZA WEESLAN THE. &               CH.MUHAMMAD ASHARF (LATE)        344-20-164554   CH. AHMED DIN
      DISTT.BAHAWALPUR                   CH. MUHAMMAD AFZAL               344-35-164548   BAHAWAL BUX
                                         MRS. SHAHNAZ SHAHREZ             155-53-033126   W/O CAP. SHEHREZ LATIF
                                         SURAYYA BEGUM (LATE)             344-32-164555   D/O BAHAWAL BUX
 2    NOOR AGRI TECH.                    QAMAR ELLAHI                     286-52-170467 MUHAMMAD NAWAZ KHAN                3.713     6.707        0.138        10.558     0.000              4.389         0.000            4.389
      VILL.TALWANDI MOOSA                MEHBOOB ELLAHI                   286-57-170468 MUHAMMAD NAWAZ KHAN
      KHAN, THE. & DISTT.                MANZOOR ELLAHI                   286-47-170466 MUHAMMAD NAWAZ KHAN
      GUJRANWALA
 3    AGRI PROJECT                       AHMED SHAH SHAHZAD               517-28-118193   SHAHZAD SULTAN AZIZ            10.067      35.396       0.900        46.363     10.067            15.996         0.000           26.063
      VILLAGE RENALA KHURD               ZAHIR SHAH SHAHZAD               517-57-271607   AHMAD SHAH SHAHZADA
      OKARA                              MRS. LAILA SHAH SHAHZADA         517-36-194508   W/O AHMED SHAH SHAHZADA
                                         SYED SAJJAD HUSSAIN              270-22-046973   SYED ARSHAD HUSSAIN
                                         SYED ASGHAR ABBAS ZAIDI          269-44-170728   S.M. ABBAS ZAIDI
 4    AMSON DAIRIES                      MAJ. GEN. RETD. GHULAM UMER      N.A.            M.A.D. QURESHI                   0.470     0.117        0.000         0.587     0.000              0.587         0.000            0.587
      PLOT NO.447,DEHTHANO               TARIQ UMER                       N.A.            MAJ.G. R. GHULAM UMER
      NEAR KHOKHARAPAR COLONY            ASAD UMER                        N.A.            MAJ.G. R. GHULAM UMER
      KARACHI                            WASEEM UD DIN SIDDIQUI           N.A.            FAHIMUDDIN SIDDIQUI
                                         AHMED MUSA PAREKH                N.A.            MUSSA PARKEH
                                         ABDUL SATTAR PARKEH              N.A.            MUSSA PARKEH
                                         SADIQ ABBAS (LATE)               N.A.            MAJ.G. R. GHULAM UMER
 5    M.A FARM                           LAEEQ MEHMOOD MUSTAFA            502-53-253533 GHULAM MEHMOOD MUSTAFA             2.600     2.451        0.021         5.072     1.269              0.000         0.000            1.269
      DEH KONKAR,SUPER HIGHWAY           ATEEQ MUSTAFA                    502-55-253532 GHULAM MEHMOOD MUSTAFA
      KARACHI EAST.
 6    AGRO TECH ASSOSIATES               CH. UMER ASADULLAH BAJWA         271-28-072318   KHURSHID AHMED BAJWA             4.352     4.217        0.128         8.697     4.352              0.863         0.018            5.233
      VILL.MISSAN KALER THE.             CH. ABDULLAH KHALID BAJWA        312-36-023289   CH. KHURSHID AHMED BAJWA
      FEROZWALA, DISTT                   IRFAN ASAD BAJWA                 271-54-072320   UMER ASAD BAJWA
      SHEIKHUPURA                        MRS. FARZANA IRFAN BAJWA         271-86-241311   W/O IRFAN ASAD BAJWA
                                         MST. GHULAM FATIMA               N.A.            W/O CH. KHURSHID AHMED
                                         MST. SAEED FATIMA                N.A.            W/O MUSHTAQ AHMED
                                         MST. SHAFQAT BIBI                N.A.            W/O MUHAMMAD IJAZ
                                         MST. PERVEEN FATIMA              N.A.            W/O IMTIAZ AHMED
 7    AL QASIM AGRO SERVICES             MUHAMMAD QASIM                   295-89-383855 RIAZ AHMED                         4.229     5.852        0.030        10.111     0.000              3.326         0.000            3.326
      KOT NAZIR THE.FEROZWALA
      DISTT: SHEIKHUPURA




                                                                                                                                                                                                              32 of 48
Sr.                                       Name of Individual/parteners/
        Name & Address of the borrower                                    NIC Numbers        Father's/Husband Name    Outstanding Liabilities at beginning of the year               Amount Written off
No.                                                 Directors
                                                                                                                     Principal     Interest        others       Total    Principal   Interest        others        Total


 8    COMPACT PARTICLE BOARD             CH. FAZAL MAHMOOD                270-61-312937   CH. SHAH MUHAMMAD              19.480      26.938       0.056        46.474     19.480     13.586          0.000           33.066
      27TH-KM OFF LAHORE,                CH. GHULAM MOHIUDDIN             270-59-312934   CH. SHAH MUHAMMAD
      SHEIKHUPURA ROAD, NEAR             CH. MUNAWAR HUSSAIN              270-66-312939   CH. SHAH MUHAMMAD
      WAPDA TOWN                         CH. MURID HUSSAIN                270-64-312938   CH. SHAH MUHAMMAD
      LAHORE                             MST. SURRIYA BEGUM               270-40-312935   W/O CH. SHAH MUHAMMAD
                                         MST. ANWAR SULTANA               270-56-312936   D/O CH. SHAH MUHAMMAD
                                         MST. NOOR SULTANA                270-90-312940   D/O CH. SHAH MUHAMMAD
                                         CH. SHAH MUHAMMAD                270-34-155417   QADAR BAKHSH
 9    DIAMOND BREEDERS                   CH. MUHAMMAD ISHAQ               275-43-122518   ABDUL AZIZ                       4.414     9.174        0.345        13.933     4.414       5.850          0.000           10.264
      MOUZA MANGA AUTTAR,                ASMAT QADRI                      272-35-145747   D/O ASGHAR ALI
      38-KM, MULTAN ROAD, THE &          M. ANWAR KHAN LODHI              213-35-093316   M. SULTAN KHAN QADRI
      DISTT. LAHORE                      RIZWAN AHMED KHAN LODHI          213-63-093318   M. ANWAR KHAN LODGHI
10    KHILJEE INDUSTRIES                 MUHAMMAD RAFIQ KHILJEE           300-40-155567   MUHAMMAD AMIN                  15.027      50.239       0.564        65.830     15.027     35.474          0.037           50.538
      47-KM MULTAN ROAD VILL.            QASIR JAVED KHILJEE              300-50-995009   MUHAMMAD AMIN
      NATHE JAGIR, THE.CHUNIAN           FARUKH JAVAID KHILJEE            300-54-359978   MUHAMMAD AMIN
      DISTT.KASUR.                       AHMED SARFRAZ KHILJEE            300-48-349702   MUHAMMAD AMIN
                                         KHUSHNOOD MALIK                  300-54-133899   AFZAL MALIK
                                         MRS. NUSRAT PERVAIZ              235-51-273558   W/O PERVAIZ RASHID
                                         MRS. ROOHI WASIM                 267-86-429884   W/O MIAN WASIM
                                         MUHAMMAD KAMRAN                  286-56-046412   MUHAMMAD ASLAM
11    MONOO DAIRIES                      MIAN MUHAMMAD IRFAN MONNO 244-55-037446 MIAN MUHAMMAD RAFI MONNO                50.065      97.789       3.988       151.842     50.065     86.534          0.043          136.642
      MOUZA MEGINEE BHAWANA              MRS. RUKHSANA SAIGAL      270-55-111978 W/O MIAN MOHD.IRFAN MONNO
      THE.CHINIOT DISTT, JHANG
12    NEW SHADAB AGRO SERVICES           MUHAMMAD YASIN                   295-62-203190 MAQBOOL HUSSAIN                    1.700     1.908        0.192         3.800     0.000       1.018          0.000            1.018
      VILL.NABIPUR SHEIKHUPURA
      ROAD, DISTT.SHEIKHUPURA
13    QADRIA POULTRY FARM                CH. MUHAMMAD ANWAR               272-42-270752 CH. GHULAM HAIDER                  3.500     6.778        0.000        10.278     0.000       6.711          0.000            6.711
      1.(HATCHERY)VILL.KHARAK,           DR. MUHAMMAD SAEED AHMED         272-40-112605 CH. FATEH DIN
      8TH KM, MULTAN ROAD LAHORE
      2.(FARM)VILL,SUNDAR MULTAN
      ROAD LAHORE
14    RAVI AGRI & DAIRY PROD.            CH. MOHAMMAD AKRAM               275-85-043338   CH. FARZAND ALI                99.052     432.007       0.048       531.107     99.052     410.641         0.033          509.726
      CHAK NO.144 GB,THE.JARANWALA       MST. MURAD BEGUM                 409-38-080100   W/O AKBER ALI ALVI
      DISTT FAISALABAD                   SH. MUHAMMAD SALEEM              272-49-138925   SH. MUHAMMAD SAEED
                                         MUZAMMIL KHAN LODHI              244-45-027675   GHULAM MOHD. KHAN LODHI
                                         CH. AMJAD MUSTAFA                275-62-336241   CH. MUHAMMAD AKRAM
                                         SH.MUHAMMAD NASIM                273-56-128330   SH. MUHAMMAD SAEED
                                         KALEEM HAIDER ZAIDI              270-86-425551   SHAMIM HAIDER ZAIDI




                                                                                                                                                                                                        33 of 48
Sr.                                        Name of Individual/parteners/
        Name & Address of the borrower                                     NIC Numbers        Father's/Husband Name      Outstanding Liabilities at beginning of the year               Amount Written off
No.                                                  Directors
                                                                                                                        Principal     Interest        others       Total    Principal   Interest        others        Total

15    SARGROH FARM AID                   ASIF SHARIF                       337-52-008251   CH. MUHAMMAD SHARIF                1.738     3.069        0.046         4.853     1.738       0.495          0.000            2.233
      VILL.SUNDAR TEHSIL &               MIAN TARIQ PERVAIZ                333-85-010774   MIAN SHAUKAT ALI
      DISTT. LAHORE                      HAROON KHALID                     245-85-023552   CH. KHALID SHARIF
                                         MIAN SAEED AKHTER                 253-50-410615   CH. ABDUL WAHID
16    TANDLIANWALA SUGAR MILLS           HAROON AKHTER                     215-88-016631   AKHTER ABDUR REHMAN (LATE)       89.478        190.940       0.045    280.463     0.000      101.467         0.000          101.467
      KANJWANI, THE. TANDLIANWALA        GHAZI AKHTER KHAN                 215-59-096961   AKHTER ABDUR REHMAN (LATE)
      DISTT. FAISALABAD                  AKBAR AKHTER                      215-54-096960   AKHTER ABDUR REHMAN (LATE)
                                         BEG RASHEEDA AKHTAR REHMAN        601-31-010709   W/O AKHTER A.REHMAN (LATE)
                                         MOBINA AKBER KHAN                 N.A             AKBER AKHTER KHAN
                                         SAEED ULLAH KHAN PARACHA          517-85-047765   HABIBULLAH KHAN PARACHA
                                         HAMEEDULLAH KHAN PARACHA          601-85-020036   HABIBULLAH KHAN PARACHA
                                         JEHANGIR KHAN TAREEN              322-54-035403   ALLAH NAWAZ KHAN TAREEN
                                         SHAUKAT HAYAT                     293-53-096402   INIAT ALI
                                         SAIFULLAH KHAN PARACHA            601-31-010709   HABIBULLAH KHAN PARACHA
17    TECHNO AGRI IND. (PVT) LTD.        ZAFAR SAEED QAZI                  270-34-044167   DR. QAZI MUHAMMAD SAEED            8.997        33.892       0.173     43.062     8.997      25.172          0.025           34.194
      VILLAGE RAKH PURA,DISTT.           AIZAD HABIB                       274-86-005678   HAJI HABIB UR REHMAN
      LAHORE                             MRS. PARVEEN HABIB                272-88-044343   D/O MEHBOOB HAMEED
                                         KHURAM HAMID                      272-88-044344   MEHBOOB HAMEED
                                         GOHER HAMEED                      272-88-044345   MEHBOOB HAMEED
18    TRANSTECH PVT. LTD.                MUHAMMAD ASGHAR                   255-89-411154   RAYASAT ALI                     106.070        327.734       6.971    440.775    106.070     297.314         0.065          403.449
      60-KM, LAHORE-MULTAN ROAD          RANA ALLAH DITTA                  249-56-071339   KHADIM HUSSAIN
      BHAI PHERU,                        DR. MUHAMMAD TAYYAB               273-42-150143   HAJI GHULAM MUHAMMAD KHAN
      DISTT.KASUR                        M. ATHER MAQBOOL                  316-69-245529   MAQBOOL AHMED
                                         ASLAM KHAN KHICHI                 325-87-064303   SHER MUHAMMAD KHAN
                                         RAB NAWAZ KHAN KHICHI             325-87-160301   MUHAMMAD KHAN KHICHI
                                         GUL HASSAN KHAN                   325-87-064307   MUHAMMAD YAR KHAN
19    SYED AGRO SERVICES                 MUHAMMAD YOUNAS                   NA              ABDUL AZIZ                         0.165         3.114       0.000      3.279     0.000       2.336          0.000            2.336
      MOUZA MUSTAFABAD                   MUHAMMAD SAEED                    NA              ABDUL AZIZ
      SHERGARAH ROAD DEPALPUR,
      OKARA
20    GOLDEN CHICKS                      MST. SURRAYA BEGUM                NA              W/O ABDUL WADOOD KHAN              1.300         7.194       0.036      8.530     1.300       6.374          0.000            7.674
      MOUZA PHULGRAM, NEAR               ABDUL MOEED KHAN                  NA              ABDUL WADOOD KHAN
      CHATTAR, MURREE ROAD               NAVEED KHAN                       NA              ABDUL WADOOD KHAN
      THE. & DISTT. RAWALPINDI           ADIL WADOOD KHAN                  NA              ABDUL WADOOD KHAN
                                         HUMAIRA WADOOD                    NA              D/O ABDUL WADOOD KHAN
                                         SUMERA WADOOD                     NA              D/O ABDUL WADOOD KHAN
                                         SAIRA WADOOD                      NA              D/O ABDUL WADOOD KHAN
                                         SAIDA WADOOD                      NA              D/O ABDUL WADOOD KHAN
                                         UZAMA WADOOD                      NA              D/O ABDUL WADOOD KHAN
                                         ABDUL WADOOD KHAN                 NA




21    ZAKIA DAIRIES                      SHAFIULLAH KHAN (LATE)            136-58-044385   HIDAYATULLAH KHAN (LATE)           7.800        70.993       0.024     78.817     7.800      62.785          0.000           70.585
      LEHTRAR ROAD, ALIPUR FARASH        MRS. ZAKIA SHAFIULLAH KHAN        136-32-044384   W/O SHAFIFULLAH KHAN
      ISLAMABAD                          TAIMOOR KHAN                      NA              SHAFIULLAH KHAN (LATE)
                                         ARSHAD KHAN                       NA              SHAFIULLAH KHAN (LATE)
22    RANA AGRO SERVICES                 RANA M. MAHFOOZ HUSSAIN           334-50-027847   SAKHAWAT ALI                       1.799         4.139       0.000      5.938     0.000       5.354          0.000            5.354
      CHAK NO.94/6-R THE, & DISTT        SAKHAWAT ALI KHAN                 334-26-025387   ABDUL WAHID KHAN
      SAHIWAL                            MEHMOOD HUSSAIN                   334-55-025394   SAKHAWAT ALI KHAN
                                         RANA SOHAIL IQBAL                 334-62-025390   SAKHAWAT ALI KHAN
                                                                                                                                                                                                           34 of 48
Sr.                                       Name of Individual/parteners/
        Name & Address of the borrower                                    NIC Numbers      Father's/Husband Name    Outstanding Liabilities at beginning of the year                  Amount Written off
No.                                                 Directors
                                                                                                                   Principal     Interest        others       Total      Principal    Interest        others        Total
                                         FARRUKH ABBAS                    334-87-025391 SAKHAWAT ALI KHAN
                                         MST. KALSOOM KHANUM              334-34-025388 W/O SAKHAWAT ALI KHAN
23    MODERN SARGODHA S. BOARD           CH. MUHAMMAD ASHRAF              271-35-112405 CH. AMIR ALI                     2.677        20.127       0.000     22.804       0.000       19.817          0.000           19.817
      CHAK NO.91 SB,THE. & DISTT         MUHAMMAD HUSSAIN                 294-20-343237 NAWAB DIN
      SARGODHA                           MST. SHAHZADI IQBAL              278-44-414399 W/O SYED MUHAMMAD ZAHEER
                                                                                        TOTAL                         439.785      1341.268       13.705      1794.758      330.144       1106.097      0.221       1436.462




                                                                                                                                                                                                         35 of 48
                                          ZARAI TARAQIATI BANK LIMITED
                                             CAPITAL ADEQUACY RETURN
                                                  As on 31.12.2005
                                                                                                    (Rupees in thousands)
                                   A -Summary /Overall Capital Adequacy Ratio
S.No.                                           ITEMS                                                 AMOUNT
  1     Equity
         1.1      Fully Paid-up capital/Capital deposited with SBP                                           11,869,612
         1.2      Balance in Share Premium Account                                                                  -
         1.3      Reserve for Bonus Shares                                                                          -
         1.4      General Reserves as disclosed on the Balance Sheet                                            215,387
         1.5     Un-appropriated/ unremitted profits (net of accumulated losses, if any)                        702,355
         1.6     Advance against equity                                                                             -
         1.7            Sub-Total (1.1 to 1.6)                                                               12,787,354

              Less:
          1.8    Good WILL                                                                                           -
          1.9    Investments in equity of subsidiary companies engaged in banking and financial
                activities (including insurance) not consolidated in the balance sheet                               -
         1.10   Shortfall in Provisions required against Classified assets                                          -
         1.11      Deficit on account of Revaluation of AFS Investments                                             -
         1.12            Sub-Total (1.8 to 1.11)                                                                    -
         1.13            TOTAL EQUITY (1.7- 1.12)                                                            12,787,354

 2      Supplementary Capital
          2.1   Freely available General Provisions or Reserves for loan losses-upto maximum of
               1.25% of Risk Weighted assets (see para 5(b) of part-I of Instructions)                          822,714
          2.2    Revaluation reserves eligible upto 50% (see para 5 of part-I of Instructions)                  122,521
          2.3    Contingencies reserves                                                                          30,000
          2.4    Foreign exchange translation reserves                                                              -
          2.5    Undisclosed reserves (see para 5 (d) of part-I of Instructions)                                    -
          2.6    Subordinated debt –upto maximum of 50% of Total Equity –Item 1.12 (see para 5 of
                 part-I of the Instructions)                                                                  3,204,323
          2.7                Total tier 2 Supplementary Capital (2.1 to 2.5)                                  4,179,558
          2.8                Eligible tier 3 (As worked out in 3.9 below)

          2.9            Total Supplementary Capital eligible for MCR
                 (Maximum upto 100% of Total Equity-see para 5 of part-I of the Instructions)                 4,179,558

                         TOTAL CAPITAL (1.13 + 2.8)                                                          16,966,913

 3      Risk Assets and Off-Balance Sheet Items
          3.1     Adjusted value of funded risk assets i.e., On-Balance Sheet Items                          65,817,107
                  (To tally with total of Schedule B of part-IV)
          3.2      Adjusted value of non-funded risk exposure i.e. Off-Balance Sheet Items                          -
                 (To tally with total of Schedule C1 and C2 of part-IV)                                             -
          3.3 TOTAL CREDIT RISK-WEIGHTED ASSETS (3.1+3.2)                                                    65,817,107
          3.4 TOTAL MARKET RISK WEIGHTED ASSETS. To tally with total of
                 part-IV(D).                                                                                         -
          3.5    MINIMUM CAPITAL REQUIRED (For credit risk)
                 (8% of Credit Risk-Weighted Assets – Item 3.3)                                               5,265,369
          3.6    Tier 1 and Tier 2 Capital held (1.13 + 2.6)                                                 16,966,913
          3.7    Tier 3 Capital limit (See para 5 of part I of instructions)
          3.8    Actual Tier 3 Capital                                                                               -
          3.9    Eligible Tier 3 Capital (See para 5 of part I of instructions)                                      -

                 CAPITAL ADEQUACY RATIO CREDIT RISK                                                                25.78
                 TOTAL CAPITAL ADEQUACY RATIO (2.9/3.3+3.4)                                                       25.78
                                                            B-RISK-WEIGHTED ASSETS-ON-BALANCE SHEET ITEMS

                                                                                                                                                             (Rupees in thousands)
 S.NO                                                       ITEMS                                                     BOOK VALUE       RISK WEIGHTS %          ADJUSTED VALUE

    1     Cash (including approved Foreign Currencies and Gold bullions                                                     395,962            0%                                -
    2     Balances with Central Banks :
          2.1 With State Bank of Pakistan                                                                                  1,189,047           0%                                -
          2.2 With Other Central Banks                                                                                            -            0%                                -

    3     Balances with other Banks (including Term Deposits /Certificates of Deposit):
          3.1 With Scheduled Banks in Pakistan                                                                               22,085           20%                             4,417
          3.2 With Banks outside Pakistan                                                                                         -           20%                                -

    4     Money at Call & Short notice in Pakistan
          4.1 With Scheduled Banks                                                                                         7,792,171           20%                        1,558,434
          4.2 Others                                                                                                               -          100%                                -
    5     Investments in :
          5.1 Federal Govt. Securities                                                                                     7,907,986           0%                                -
          5.2 Provincial Govt. Securities                                                                                          -           0%                                -
          5.3 Shares of :
             a) Enterprises owned or controlled by Fed. Govt.                                                                     -        0% - 50%*
             b) Private Sector Enterprises                                                                                        -          100%
          5.4 Debentures, Bonds, PTCs, TFCs, etc, of:
              a) Enterprises owned or controlled by Fed. Govt.,                                                                   -
                 i) Guaranteed by Federal Govt./ SBP                                                                              -            0%
                ii) Enterprises other then those having corporate status or being run on commercial basis.                        -           20%

                 iii) Enterprises having corporate status or being run on commercial basis.                                       - 50% to 100%
                                                                                                                                    To be determined by
                                                                                                                                         institution
              b) Private Sector Enterprises                                                                                 339,924        100%
          5.5 Other Investments (Certificates of Investment)                                                               4,572,758          100%                        4,572,758

    6     Loans & Advances including Bills Purchased / Discounted (Less Cash Margin and Govt. Securities held) to :


          6.1 Federal Government                                                                                                  -            0%
          6.2 Provincial Government                                                                                               -            0%
          6.3 Loans guaranteed by Federal Govt./SBP                                                                               -            0%
          6.4 Enterprises Owned or Controlled by Federal Govt.                                                                    -
                 i) Guaranteed by Federal Govt./ SBP                                                                              -            0%
                ii) Enterprises other then those having corporate status or being run on commercial basis.                        -            20%
                 iii) Enterprises having corporate status or being run on commercial basis.                                       -    50% to 100%
                                                                                                                                       To be determined by
                                                                                                                                            institution

          6.5 Claims on or guaranteed by banks of international repute incorporated in G-10 countries                             -
                                                                                                                                              20%

          6.6 Private Sector Enterprises                                                                                                      100%
          6.7 Loans fully secured by mortgage of residential or commercial property (Excluding industrial property)               -
                                                                                                                                              50%

          6.8 Staff loans (Annexure-II)                                                                                    1,841,334           0%                                 -
          6.9 Others (Annexure-II)                                                                                        51,083,952          100%                       51,083,952

    7     Fixed Assets (Net of Accumulated Depreciation)                                                                    690,141           100%                          690,141

    8     Assets deducted from Capital :
          8.1 Good will                                                                                                           -            0%
          8.2 Unconsolidated Investment in subsidiary companies engaged in banking and financial activities                       -
          (including insurance)                                                                                                                0%


    9     Other Assets
          9.1 Taxation ( Net of Provisions)                                                                                    1,355           0%
          9.2 Accrued Interest/Profit on Govt. Securities                                                                    103,768           0%                                 -
          9.3 Others (Annexure-III)                                                                                        7,907,404          100%                        7,907,404
                                                                Total                                                     83,847,887                                     65,817,107

* 0%, 10%, 20% or 50% as may be prudently determined by the bank/DFI.
C(1)-WEIGHTED NON-FUNDED EXPOSURES/OFF-BALANCE SHEET ITEMS (Non-Market Related)

                                                                                                                                       (Rupees in thousands)
 S.NO                                       ITEMS                                        BOOK    Conversion   Equivalent   RISK WEIGHTS    ADJUSTED
                                                                                         VALUE    Factor %      Value            %            VALUE
   1    Loans Repayment Guarantees & Acceptances
        (Less Cash Margin) issued on behalf of :
        1.1 Federal / Provincial Govts. and SBP or guaranteed by the Federal Govt. /               100%                          0%
        SBP
        1.2 Enterprises owned or controlled by the Federal Govt..                                  100%                        0-50%*
        1.3. Banks of international repute incorporated in G-10 countries and domestic             100%                          20%
        banks having at least rating of "A"
        1.4 Private Sector Enterprises                                                             100%                         100%
        1.5 Others ( to be specified)                                                              100%                         100%

   2    Purchase & Resale Agreements (Reverse Repo) other than those effected
                                                                                                   100%                          0%
        through SGL of SBP

   3    Performance Bonds, Bid Bonds, Warranties & similar instruments (less
        Cash Margin & Govt. Securities held)
        issued on behalf of
        3.1 Federal / Provincial Govts. and SBP or guaranteed by the Federal Govt. /
                                                                                                    50%                          0%
        SBP.
        3.2 Enterprises owned or controlled by the Federal Govt.                                    50%                        0-50%*
        3.3. Banks of international repute incorporated in G-10 countries and domestic
                                                                                                    50%                          20%
        banks having at least rating of "A"
        3.4 Private Sector Enterprises                                                              50%                         100%
        3.5 Others (to be specified )                                                               50%                         100%

   4    Revolving Underwriting Commitments                                                          50%                         100%

   5    Standby L/Cs & other Standby facilities with an original maturity of over
        one year and other L/Cs (less cash Margin & Govt. Securities held)

        Issued on behalf of :
        5.1 Federal / Provincial Govts., and SBP or guaranteed by the Federal Govt. /
                                                                                                    50%                          0%
        SBP.
        5.2 Enterprises owned or controlled by the Federal Govt.                                    50%                        0-50%*
        5.3 Banks of international repute incorporated in G-10 countries                            50%                          20%
        5.4 Private Sector Enterprises                                                              50%                         100%
        5.5 Others (to be specified)                                                                50%                         100%

   6    Outstanding Foreign Exchange Contracts
        6.1 With SBP                                                                                3%                            0%
        6.2 With other banks                                                                        3%                           20%
                                            TOTAL

* 0%, 10%, 20% or 50% as may be prudently determined by the bank/DFI.
C(2)-WEIGHTED NON-FUNDED EXPOSURES/OFF-BALANCE SHEET ITEMS (Market Related)

                                                                                                (Rupees in thousands)
 S.NO                                   ITEMS                      BOOK Conversion Equivalent RISK ADJUSTED
                                                                   VALUE Factor %    Value    WEIGH       VALUE
                                                                                               TS %

  1     Outstanding foreign Exchange Contracts with SBP                                            0%

  2     Outstanding foreign Exchange Contracts with other banks.

  3     Cross currency Swaps

  4     Forward Rate Agreement

  5     Single Currency Interest Rate Swaps

                                         Total
                                            SUMMARY
                                D-CAPITAL CHARGE FOR MARKET RISK


                                                                      (Amount in Thousands)

1. Capital Charge for Interest Rate Risk
   i. Specific Risk                                       D1 (a)
   ii. General Market Risk                                D1 (b)

2. Capital Charge for Equity Exposure
   i. Specific Risk                                       D2 (a)
   ii. General Market Risk                                D2 (b)

3. Capital Charge for Foreign Exchange Risk                D3

4. Capital Charge for Position in options                  D4

5. Total Capital Charge for Market Risk                Sum of D1 to
                                                           D4

Market Risk weighted Assets (5 above*12.5)
                                        D1(a) : INTEREST RATE EXPOSURES (TRADING BOOK)

                                                                                                                   (Rs. in Thousands)
                       DEBT SECURITIES AND OTHER DEBT RELATED DERIVATIVES-SPECIFIC RISK

                                                                             Residual Maturity
                                                      Positions   6 months    Over 6 months      Over 24 Total     Total Specific Risk
                  Nature of items                                  or less     to 24 months      months Exposure    Capital Charge

1. Debt Securities issued by Central Governments or    Long

Central Banks                                          Short

2. Debt Securities eligible for "Qualifying"           Long
category.
                                                       Short

3. Other Debt Securities.                              Long
                                                       Short

Total (Items 2 & 3 above)                              Long
                                                       Short

                            Risk Weight                            0.25%          1.00%          1.60%   8.00%

SPECIFIC RISK CAPITAL CHARGE FOR DEBT

SECURITIES AND DEBT DERIVATIVES (ON
GROSS
POSITION-LONG PLUS SHORT)
                                        DEBT SECURITIES,DEBT DERIVATIVES AND OTHER INTEREST RATE DERIVATIVES-GENERAL MARKET RISK*.
D 1(b).
                                                                                                                                                      (Rs in Thousands)
                      Time Band                                                    Individual position                                    Risk                  Weightaged
Zone      Coupon 3% or more Coupon less than 3%            Debt Securities & debt dervaties          Interest rate dervaties   Total      Weight                  position
                                                                Long               Short             Long             Short                                  Long            Short
    1     1 month or less         1 month or less                                                                                             0.00%
          1 to 3 months           1 to 3 months                                                                                               0.20%
          3 to 6 months           3 to 6 months                                                                                               0.40%
          6 to 12 months          6 to 12 months                                                                                              0.70%
    2     1 to 2 years            1.0 to 1.9 years                                                                                            1.25%
          2 to 3 years            1.9 to 2.8 years                                                                                            1.75%
          3 to 4 years            2.8 to 3.6 years                                                                                            2.25%
    3     4 to 5 years            3.6 to 4.3 years                                                                                            2.75%
          5 to 7 years            4.3 to 5.7 years                                                                                            3.25%
          7 to 10 years           5.7 to 7.3 years                                                                                            4.50%
          10 to 15 years          7.3 to 9.3 years                                                                                            5.25%
          15 to 20 years          9.3 to 10.6 years                                                                                           6.00%
          Over 20 years           10.6 to 12 years                                                                                            8.00%
                                  12 to 20 years                                                                                             12.50%
                                  Over 20 years
Total
OVERALL NET OPEN POSITION
                                                                                                                                                                            Total
          Calculation              Vertical Disallowance              Horizonatal Disallowances in                 Horizontal Disallowances between     Overall net       General
                                                                                                                                                        open postion       Market
                                                                                                                                                                         Risk charge
                                                           Zone-1           Zone-2               Zone-3          Zone-1&2      Zone-2&3 Zone-1&3
      General Market Risk
         Capital Charge
Total Capital Charge for Interest Rate Risk (a+b)
* Separate Forms to be used fro differenet currencies
                              D2-EQUITY EXPOSURES (Trading Book)
                                                                                    (Rs in Thousands)
                                                  Inside Pakistan Outside Pakistan*        Total
Gross (Long plus Short) Positions
Risk Weight                                                   8%                   8%
a.    Specific Risk Charge
Net Long/Short Position
Risk Weight                                                   8%                   8%
b.    General Market Risk Capital Charge
Total Capital Charge for Equity Exposures (a+b)

   * Report position on a market-by Market basis i.e. separate column for each national market to be used
           D-3 FOREIGN EXCHANGE RISK
                                                       (Rs in Thousands)
Currency      Position in F/C             PKR Rate          Position in PKR




                                      Overall Long/Short Position
                           Capital Charge (8% X Net Open Position)
                                 D4-MARKET RISK CAPITAL CHARGE FOR OPTIONS

                                    LONG OPTIONS WITH RELATED CHASH POSITION.
Underlying of the Option           Specific Risk Charge General Market Risk Charge Long Cash & Long PutShort Cash & Long Call Total
            Foreign Exchange                                                     8%


LONG CALL or LONG PUT OPTIONS
Underlying of the Option      Specific Risk Charge General Market Risk Charge  Long Put                 Long Call             Total
            Foreign Exchange                                                8%
                                                               ANNEXURE-I

                          ZARAI TARAQIATI BANK LIMITED

                  DETAIL OF INVESTMENT IN PRIVATE SECTOR
                    ENTERPRISES AS AT 31 DECEMBER 2005
                                                                   (Rupees'000)
S.NO            ITEMS                                            AMOUNT

1      QUOTED INVESTMENTS

       Nestle Milk Pak Limited                                           89,297
       Uqab Breeding Farms Limited                                          585
       Mubarik Dairies Limited                                              412
                                                                         90,294
       UN QUOTED INVESTMENTS
       National Commodity Exchange Limited                                5,000
                                                                         95,294
       Add: Surplus on revaluation of securities                        245,043
       Less Provision for Diminution in value of Investments               (413)
       Total Investment in Quoted/Un Quoted Securities                  339,924
                                                         ANNEXURE-II

                ZARAI TARAQIATI BANK LIMITED

          DETAIL OF LOAN AND ADVANCES AS AT 31 DECEMBER 2005

                                                              (Rupees'000)
S.NO                     ITEMS                              AMOUNT

1      LOANS

       Loan under Pre-Islamic banking System(PIBS)               1,222,429
       Loan under Islamic banking System(IBS)                   61,676,439
                                                                62,898,868
       Less: Provision for bad and doubtful debts               11,814,916
       Unrealized Mark-up                                              -
       Total Loans                                              51,083,952

2      ADVANCES

       Advances under Pre-Islamic banking System(PIBS)               1,018
       Advance under Islamic banking System(IBS)                 1,844,640
                                                                 1,845,658
       Less:Provision against Advance to Ex-Employees                4,324
       Total Advances                                            1,841,334

       Total Loans and advances                                 52,925,286
                                                                            ANNEXURE-III

                           ZARAI TARAQIATI BANK LIMITED

              DETAIL OF OTHER ASSETS AS AT 31 DECEMBER 2005

                                                                                  (Rupees'000)
S.NO                       ITEMS                                                AMOUNT

       Income/ Mark-up accrued on loans and advances                                 2,085,487
       Income/ Mark-up accrued on investments                                          178,026
       Advances, deposits, advance rent and other prepayments                           63,902
       Stationery and stamps on hand                                                    10,970
       Tax recoverable                                                                 308,053
       Releif Packages                                                                 939,468
       Preliminary Expenses                                                                -
       Branch adjustment account                                                       792,819
       Receivable from defined benefit plans                                         1,936,411
       Stock in hand                                                                    14,640
       Assets relating to Bangladesh                                                 1,343,235
       Receivable from Federal Government against Golden Handshake Scheme                2,643
       Receivable from Trust Funds against Golden Handshake Scheme                     117,901
       Receivable from benevolent trust fund against GHSS                               17,250
       Suspense Account                                                                  3,848
       Assets acquired in satisfaction of bank dues                                    209,574
       Deferred tax assets                                                               1,829
       Others                                                                           15,208
                                                                                     8,041,264
       Less:Provsion held against other assets                                         (28,737)
                                                                                     8,012,527

				
DOCUMENT INFO
Shared By:
Categories:
Stats:
views:14
posted:8/19/2011
language:English
pages:48
Description: State Bank Clerical Preparation document sample