II'I,IIIII,IIIIIIIIIIII.

----------,---------- .,----------------- -------------.-- --------

Audited financial statementsWith accompanying notes toThe financial statements for

The year ended,December 21,2017

IMAIWAND BANK

STATEMENT OF FINANCIAL POSITION

AS AT DECEMBER 21, 2017

I December 21, December 20,2017 2016

----------- (Afs in '000) -----------NoteASSETS

Total assets

5 15,212,048 15,202,6695.2.2 327,902 1,748,3836 6,145,309 6,339,7457 360,902 478,3207.1 109,7988 6,321 1,7019 641,160 I 533,13812 839,90010 219,214 230,29711 516,220 880,597

24,378,774 25,414,850

ICash and bank balancesInvestment in DAB Capital NotesLoans and advances to customersProperty and equipmentInvestment PropertyIntangible assetsOther assetsOther banking assetsDeferred tax assets - netNon-current assets - held for sale

II

LIABILITIES

I Deposits from customers 13 22,147,076 24,183,600Other liabilities 14 1,048,622 173,243Total liabilities 23,195,698 I 24,356,843

I EQUITY

Authorized and paid-up capital 15 2,581,300 2,181,300Accumulated losses (1,398,224) (1,123,293)Total equity 1,183,076 1,058,007

Total liabilities and equity 24,378,774 25,414,850

CONTINGENCIES AND COMMITMENTS 16

II

The annexed notes 1 to 29 form an integral part of these financial statements.~.

Chairman Chief Financial Officer

I\

II

I

III

I

I

MAIWAND BANK

STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED DECEMBER 21, 2017

Note

Interest incomeInterest expenseNet interest income

Profit / return on Islamic financingReturn on Islamic depositsNet spread earned

Fee and commission incomeFee and commission expenseNet fee and commission income

Foreign exchange (loss) / gainOther incomeOperating income

Personnel expensesAllowance for impairment lossDepreciation and amortisationOther operating expensesLoss on acquisition of other banking assets - netLoss before taxation

206

7&821

Taxation - net

Loss after taxation

Other comprehensive income

Total comprehensive loss for the year

The annexed notes 1 to 29 form an integral part of these financial statements. eft .

Chairman

1717

1818

19

22

December 21, December 20,2017 2016

----------- (.Js in '000) -----------

721,139(132,397,)

732,571588,742

23,486

176,348I

(72,117)176,274(65,034111,240104,231

(12,714)87,019

(21,312)4,781

819,123790,764

(367,537)170,158(38,436)

(657,36~)(161,42b)

(356,927)(817,692)(38,347)

(517,747)

(911,590)(263,848)

(11,083) 179,711

(274,931) (731,879)

- I(731,879)(274,93,1)

AccumulatedPaid-up capital losses Total

---------------------- (Afs in '000) ----------------------

MAIWANDBANK

STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED DECEMBER 21,2017

Balance as at January 01, 2016 1,500,000 (391,414) 1,108,586

Add: Capital injected during the year 681,300 681,300

(731'~79)11,_1__ ~(7=31-'~=79_::_')1

(731,879) (731,879)

1,058,007

Loss after taxationOther comprehensive income ,-------,IIBalance as at December 20, 2016 2,181,300 (1,123,293)

Balance as at December 21,2016 2,181,300 (1,123,293) 1,058,007

Add: Capital injected during the year 400,000 400,000

Loss after taxation

II (274,~31)II (274,~31)1

IOther comprehensive income

(274,931) (274,931)

Balance as at December 21,2017 2,581,300 (1,398,224) 1,183,076

The annexed notes 1 to 29 form an integral part of these financial statements~ .

Chairman

II

MAIWAND BANK

STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED DECEMBER 21,2017

December 21, December 20,2017 2016

Note ----------- (Afs in '600) -----------Cash flows from operating activitiesLoss before taxation

8

(263,848) (911,590)

38,436 38,347(588,742) (732,571)(23,486) 8,157

1,440(170,158) 817,692

(1,007,798) (778,525)

(218,341) (118,512)

364,594 835,805(108,022) (392,861)(839,900)364,377 (880,597)

(2,036,524) 2,322,873875,379 97,211

(2,606,235) 1,085,394

758,775 954,783(146,547) ~230,369~

(1,994,007) 1,809,808

1,420,481 (1,748,383)82,082 (243,728)

(109,798)223

(7,719) ~603~1,385,046 (1,992,491)

400,000 681,300400,000 681,300

(208,961) 498,61713,352,70613,143,745

c

Adjustments:Depreciation and amortisationNet interest incomeNet spread earned

7&817

Loss / (gain) on disposal of fixed assetsAllowance for impairment loss 6

Working capital adjustments:Increase in deposits in banksIncrease in loans and advancesto customers

Increase in other assetsIncrease other banking assetsIncrease in non-currents assets held-for-saleIncrease in deposits from customersIncrease / (decrease) in other liabilities

6912

1314

Interest / profit receivedInterest / profit paidNet cash flows from operating activities

I

Cash flows from investing activities(Investment made in) / proceeds from capital notesPurchase of property and equipmentAcquisition of investment propertyProceeds from sale of property and equipmentPurchase of intangible assetsNet cash flows (used in) / from investing activities

77.1

Cash flows from financing activitiesProceeds from capital injectedNet cash flows from financing activities

Net increase in cash and cash equivalentsCash and cash equivalents at beginning of the yearCash and cash equivalents at end of the year 23

Chairman Chie Executive Officer Chief Finan,ial Officer

I

IMAIWAND BANK

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED DECEMBER 21, 2017

1. STATUS AND NATURE OF BUSINESS

I 1.1 ,Maiwand Bank (the Bank) is a commercial bank registered and operating in Afghanistan. lfhe Bank is primarilyinvolved in commercial banking in Afghanistan. The Bank has obtained business license from AfghanistanInvestment Support Agency (AISA) to operate as a limited liabilitycompany. The Bank obtatiJed its banking licensefrom Da Afghanistan Bank ("DAB") under the Law of Banking in Afghanistan on December 31, 2008 andcommenced its operations on January 01, 2009. Currently, the Bank is being operated with b4 branches and 22extension counters in different parts of Afghanistan.

1.2 The registered office of the Bank is situated at Charrahi Torabaz Khan, Shar-e-Naw, Kabul, Aflhanistan.

2. STATEMENT OF COMPLAINCE

I2.1 The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs)

as issued by the International Accounting Standards Board (lASB) and the requirements of the Law of Banking inAfghanistan. In case requirements differ, the provisions of the Law of Banking in Afghanistan Jhall prevaiL

3. BASIS OF MEASUREMENT

3.1 These financial statements have been prepared on the historical cost basis except as otherwise disclosed in accountingpolicies.

I 3.2 Functional and presentation cwrency

Items included in the financial statements of the Bank are measured using the currency of he primary economicenvironment in which the entity operates. The financial statements are presented in Afgha . CAfs), which is theBank's functional and presentation currency.

3.3 Use of estimates and judgments

The preparation of financial statements in conformity with IFRSs requires management to make judgments, estimatesand assumptions that affect the application of Bank's accounting policies and the report~d amounts of assets,liabilities,income and expenses. Actual results may differ from these estimates.

Estimates and unde.r:lyingassumptions are reviewed on an ongoing basis. Revisions to accounting estimates arerecognized in the period in which the estimate is revised and in any future periods affected.

Information about significant areas of estimation, uncertainty and critical judgments in applying accounting policiesthat have the most significant effect on the amounts recognized in the financial statements areldescribed in notes 4.3,4.4,4.5, 4.6 and 4.10. t ~

IIII

I MAIWAND BANKNOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED DECEMBER 21, 2017

MaiwandBankI

I 3.4 Standards, interpretations and amendments to approvedaccounting standards that are nat yet effective

Th, following standards, amendments and interpretations with respec <0 the approved ,~o=L standards wouldbeeffective from the dates mentioned below against the respective standard or interpretation:I

II

Standards,Interpretations and Amendments

Effec;ve date(accountingperiodsbeginninJ on or after)

IIFRS 2 Share-based Payments - Classification and Measurementof Share-based Payments Transactions (Amendments) IJanuary 01, 2018

I IFRS 10 Consolidated Financial Statements and lAS 28 InvestmentinAssociates and Joint Ventures - Sale or Contribution of Assetsbetween an Investor and its Associate or Joint Venture (Amendment) Not yet finalizedI T.r\~7 Financial Iusrrurnenrs: Disclosures -Disclosure Initiative - (Amendment) Januar), 0 I. ~OJ7

I I"~ 12 Incorne Taxes - Recognition of Deferred 'TaxAssets for Unrealized losses (Ameudrneuts) }U111ar,01,2017

I IFRS 4 Insurance Contracts: Applying IFRS 9 FinancialInstruments with IFRS 4 Insurance Contracts - (Amendments) JanllaJ 01, 2018

IJanua) 01, 2018

I lAS 40 Investment Property: Transfers ofInvestment Property (Amendments)

I IFRIC 22 Foreign Currency Transactions and Advance Consideration January 01, 2018

IFRS 9 Financial Instruments: Classification and Measurement Janual 01, 2018

January 01, 2018I IFRS 15 Revenue from Contracts with Customers

I IFRS 16 Leases January 01, 2019

The above standards and amendments are not expected to have any material impact on the Balk's financial statementsin the period of initial application.

IIn addition to the above standards and amendments, improvements to various accounting standards have also been

issued by the lASB in December 2017. Such improvements are generally effective for accounting periods beginning on

or after January 01, 2018 (see note 4.1 below). The Bank expects that such improvements to the standards will not have

any impact on the Bank's financial statements in the period of initial application.

4. SIGNIFICANT ACCOUNTING POLICIES

I Th, accounting policies adopted in the preparation of these fiTf"'" statements are consistentwi~ those of the previousjinancial year "'''P' as described below ~ H

III

I Maiwand Bank

I 4.1 Standard or Interpretation

II

The Bank has adopted the following accounting standards, amendments and interpretations of IFRSs which becameeffective for the current year:

IFRS 11 Joint Arrangements - Accounting for Acquisition of Interest in Joint Operation (Amendment)I

IFRS 10 Consolidated Financial Statements, IFRS 12 Disclosure of Interests inOther Entities and lAS 27 Separate Financial Statements - Investment Entities:Applying the Consolidation Exception (Amendment)

I lAS 1 Presentation of Financial Statements - Disclosure Initiative (Amendment)

IL,\S 16 Property, Plant and Equipment and lAS 38 intangible assets -Clarification of Acceptable Method of Depreciation and Amortization (Amendment)

IlAS 16 Property, Plant and Equipment lAS 41 Agriculture - Agriculture: Bearer Plants (Amendment)

lAS 27 Separate Financial Statements - Equity Method in Separate Financial Statements (Amendment)

IIFRS 14 Regulatory Deferral Accounts

IFRS 5 Non-current Assets Held for Sale and Discontinued Operations - Changes in methods ofldispOSal

I lAS 19 Employee Benefits - Discount rate: regional market issue

I LI\S 34 Interim Financial Reporting - Disclosure of information 'elsewhere in the interim financial report'

The adoption of 'he above amendments, improvements '0 accounting standards and in"q>,,,Lo, did 00' have '0'effect on the financial statements. IICertain annual improvements have also been made to a number of IFRSs.

I 4.2 Cash and cash equivalents

Cash and cash equivalents include notes and coins in hand, unrestricted balances held with central bank, balances inNostro accounts and highly liquid financial assets with maturities of three months or less from !cquisition date that aresubject to insignificant risk of changes in their fair value, and are used by the Bank in the man:Jemem of its short-termcommitments.I

I 4.3 Loans and advances

Advances are stated net of general and specific provisions. The specific and general provisions fer advances are made inaccordance with the requirements of Asset Classification and Provisioning Regulation SeptembJr 2017 (the Regulation)issued by Da Afghanistan Bank and are charged to the statement of comprehensive income.I

IIIIII

(i) Recognition and measurement

4.4 Property and equipment

Items of property and equipment are measured at cost less accumulated depreciation andr:impairmentlosses, (if any).

Cost includes expenditures that are directly attributable to the acquisition of the asset. The Icost of self-constructedassets includes the cost of materials and direct labour, any other costs directly attributable to bringing the asset to aworking condition for its intended use, and the costs of dismantling and removing the items and restoring the siteon which they are located and capitalized borrowing costs. Purchased software that is intdgral to the functionalityof the related equipment is capitalized as part of that equipment.

The gain or loss on disposal of an item of property and equipment is determined by comparing the proceeds fromdisposal with the carrying amount of the item and are recognized net within other income ik profit or loss.

(ii) Subsequent costs

IThe cost of replacing part of an item of property and equipment is recognized in the carrying amount of the item ifit is probable that the future economic benefits embodied within the part will flow to the ~ank and its cost can bemeasured reliably. The carrying amount of the replaced part is derecognized. The costs of the day-to-day servicingof property and equipment are recognized in profit or loss as incurred.

I (iii) Depreciation

Property and Equiprnents are stated at cost less accumulated depreciation and any provisi~n for impairment loss.Depreciation on Property and Equipments is charged to Statement of Comprehensi'le income applying thereducing balance method whereby the cost of the asset is written off over the estimated useful life. The usefullives, residual value and depreciation method are reviewed and adjusted if appropriate, at ~ach balance sheet date.Depreciation on additions is charged for the full month in which the asset is put to use and on deletions up to themonth immediately preceding the deletion. The rate of depreciation used are as follows:

December 21, December 20,2017 2016

Building 5%Leasehold improvements 5% 5%Office equipment 10% - 33% 10% - 33%Furniture and fixture 10% 10%IT equipment 33% 33%Vehicles 20% 20%ATM 10% 10%

Depreciation methods, useful lives and residual values are reassessed at the reporting date and adjusted ifappropria teo

4.5 Intangible assets

Banking software acquired by the Bank is stated at cost less accumulated amortization and accumulated impairmentlosses, if any.

Subsequent expenditure on the software is capitalized only Wh~it increases the future econollc benefits embodied inthe asset. All other expenditure is expensed as incurred.

~

I MaiwandBank

I Amortization is recognized in profit or loss using reducing balance method @ 33%, from the date it is available for use,since this most closely reflects the expected pattern of consumption of the future economic benefits embodied in theasset.

I Amortization method, useful life and residual value are reviewed at each financial year-end and djusred if appropriate.

I 4.6 Impairment of non-financial assets

IThe carrying amounts of assets are reviewed at each statement of financial position date for impairment whenever eventsor changes in circumstances indicate that the carrying amounts may not be recoverable. If such indication exists, andwhere the carrying value exceeds the estimated recoverable amount, assets are written down to treir recoverable amount.The recoverable amount is the higher of an asset's fair value less costs to sell and value in use. The resulting impairmentloss is taken to the profit and loss account.

I4.7 Tax expense

II

Tax expense comprises current and deferred tax. Current tax and deferred tax are recognized in profit or loss except tothe extent that i, relates '0 items recognized directly inequity or inother comprehensive in,om'l

Current tax is the expected ta.x payable or receivable on the taxable income for the year, using tax rates enacted orsubstantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years.

I

I Deferred tax is recognized in respect of temporary differences between the carrying amounts of assets and liabilities forfinancial reporting purposes and the amounts used for taxation purposes.

I Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse,based on the laws that have been enacted or substantively enacted by the reporting date.

I Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset cur ent tax liabilities againstcurrent tax assets, and they relate to taxes levied by the same tax authority on the entity and the burrent tax liabilities andassets are intended to be settled on a net basis and are expected to be realized simultaneously.

IA deferred tax asset is recognized for unused tax losses, tax credits and deductible temporary fifferences to the extentthat it is probable that future taxable profits will be available against which they can be utilized Deferred tax assets arereviewed at each reporting date and are reduced to the extent that it is no longer probable that t~e related tax benefit willbe realized.

I 4.8 Deposits

Deposits are initially recorded at the amount of proceeds received. Mark-up accrued on deposit. is recognised separatelyas part of other liabilities and is charged to the profit and loss account on a time proportion basi~.

I4.9 Non-current assets held forSale

IThe Bank acquires properties in settlement of certain advances and are classified as non-current assets held for saleunder IFRS 5 - Non-current Assets Held for Sale and Discontinued Operations. These are stated at lower of thecarrying value of the related advances and the current fair value of such assets.

I4.10 Other Banking Assets:

The Bank acquires properties in settlement of certain advances and are settled through out of court settlement. Suchassets, which are acquired in satisfaction of claims against advances are classified as "Other Banking Assets". Theseassets are taken over at lower of Qabala Value or carrying amount. The e.xcess amount is transferred as "DeferredIncome" and shorfall, if any is charged to Profit & Loss account ~as "Loss". The excess amount is transferred asunrealized inome and shortfall, if any is chargd to bad debts.

~V(I

IIIIIIII

IIIII

IIIIII

Maiwand Bank

4.11 Provisions

Provisions are recognised when the Bank has a present obligation (legalor constructive) as a result of past events and itis probable that an outflow of resources will be required to settle the obligation and a reliable estilnate of the amuunt canbe made. Provisions are reviewed at each statement of financialposition dare and are adjusted t~ reflect the current bestestimate.

4.12 Financial guarantees

Financialguarantees are contracts that require the Bank to make specifiedpayments to reimburs the holder for a loss itincurs because a specified debtor fails to make payment when due in accordance with the terms of a debt instrument.Financialguarantee liabilitiesare recognized initiallyat their fair value, and the initial fair value i amortized over the lifeof the financialguarantee. The guarantee liabilityis subsequently carried at the higher of this amortized amount and thepresent value of any expected paymentwhen a payment under the guarantee has become probable.

4.13 Foreign currency

Transactions in foreign currencies are translated into the functional currency of the Bank at the spot exchangerate at thedates of the transactions.

Monetary assets and liabilitiesdenominated in foreign currencies at the reporting date are translated into the functionalcurrency ar the spot exchange rate at that date. Non-monetary assets and liabilitiesdenominat~d in foreign currenciesthat are measured at fair value are retranslated into the functional currency at the spot exchange rate at the date that thefair value was determined. Non-monetary assets and liabilitiesthat are measured in terms of hisrtoricalcost in a foreigncurrency are translated using the exchange rate at the date of the transaction. Foreign currency differences arising ontranslation is recognized in profit or loss. .

4.14 Revenue recognition

Interest income and expense are recognized in profit or loss using the effective interest method, The effective interestrate is the rate that exactly discounts the estimated future cash payments and receipts through the expected life of thefinancialasset or liability(or,where appropriate a shorter period) to the carryingamount of the financialasset or liability.When calculatingthe effective interest rate, the Bank estimates future cash flows considering all contractual terms of thefinancialinstrument, but not future credit losses.

The calculation of the effective interest rate includes all fees paid or received that are an integlal part of the effectiveinterest rate. Transaction costs include incremental costs that are directly attributable to the acquisition,issue or disposalof a financialasset or liability.

Interest income and expense presented in the statement of comprehensive income include int rest on financialassetsand financialliabilitiesmeasured at amortised cost calculatedon an effective interest basis. IIn Murabaha Account, when the installments are due , the profits are recognised and subsequently realisation isconsidered,when actuallyinstallments are received.

In Musharika Account, the profits are recognised based on estimation I projection. Subsequently realisation IS

considered, when actuallyinstallments are received.

In Diminishing Musharika, the profits are based on specific rental in77 The same is recognised as &when due. Andrealised subsequently, when i, is actually received. It.. ~ 1

Maiwand Bank

4.15 Fee and commission

Fees and commission income and expense that are integral to the effective interest rate on a financial asset or liability areincluded in the measurement of effective interest rate.

Other fees and commission income, including account servicing fee, funds transfer fee and placement fee, arerecognized as the related services are performed. When a loan commitment fee is not expected to result in the draw­down of a loan, loan commitment fees are recognized on a straight-line basis over the commitment period.

I

4.16

Other fees and commission expense relate mainly to transaction and service fees, which are expensed as the services arereceived. I

I

IFinancial assets and financial liabilities

(i) Recognition and initial measurement

The Bank initially recognizes loans and advances to customers and deposits from customers on the date that theyare originated. All other financial assets and liabilities (including financial assets and liatlilities designated at fairvalue through profit or loss) are initially recognized on the trade date at which the Banklbecomes a party to thecontractual provisions of the instrument.

A financial asset or liability is measured initially at fair value plus, for an item not at fairlvalue through profit orloss, transaction costs that are directly attributable to its acquisition or issue.

I(ii) Derecognition

The Bank derecognizes a financial asset when the contractual rights to the cash flows from the asset expire, orwhen it transfers the financial asset ina transaction in which substantially all the risks and rewards of ownership areof the financial asset are transferred or in which the Bank neither transfers nor retains sub~tantially all the risk andrewards of ownership and it does not retain control of the financial asset. Any interest in transferred financialassets that qualify for derecognition that is created or retained by the Bank is recognized as a separate asset orliability in the statement of financial position.

I On derecognition of a financial asset, the difference between the carrying amount of tlre asset (or the carryingamount allocated to the portion of the asset transferred) and consideration received (ihcluding any new assetobtained less any new liability assumed) and (ii) any cumulative gain or loss that had been recognized in the othercomprehensive income, is recognized in profit or loss.

The Bank derecognizes a financial liability when its contractual obligations are discharged o~ cancelled or expired.

(iii) Offsetting

Financial assets and liabilities are set off and the net amount presented in the statement of financial position when,and only when, the Bank has a legal right to set off the amounts and intends either to s~lttle on a net basis or torealize the asset and settle the liability simultaneously.

Income and expenses are presented on a net basis only when permitted under IFRSs, or fOJ!gains and losses arisingfrom a group of similar transactions. I

(iv) Amortised cost measurement

The amortized cost of a financial asset or liability is the amount at which the financial asset or liability is measuredat initial recognition, minus principal repayments, plus or minus the cumulative amortizJtion using the effectiveinterest method of any difference between the initial amount v: and the maturity amount, minus any

reduction for impairment Pt.~. Y

I (v) Identification of measurement of impairment

Maiwand BankI

I At each reporting date, the Bank assesses whether there is objective evidence that the fin ncial assets not carried atfair value through profit or loss are impaired. Financial asset or group of financial assets is (are) impaired whenobjective evidence demonstrates that a loss event has occurred after the initial recognitioh of the asset(s), and thatthe loss event has an impact on the future cash flows on the asset(s) that can be estimated ~eliably.

II

I

Objective evidence that the financial assets are impaired can include default or delinquency by a borrower,restructuring of a loan or advance by the Bank on terms that the Bank would not othe ise consider, indicationthat a borrower or issuer will enter bankruptcy, disappearance of an active market for a security, or otherobservable data relating to a group of assets such as adverse changes in the payment status of a borrowers orissuers in the Bank, or economic conditions that correlate with defaults in the Bank.

I

I

Impairment losses on assets carried at amortized cost are measured as the difference between the carrying amountof the financial assets and the present value of estimated future cash flows discounted at the assets' originaleffective interest rate. Losses are recognized in profit or loss and reflected in an allowance account against loansand advances. Interest on the impaired asset continues to be recognized through the unwkding of the discount (ifapplicable).

I

IWhen a subsequent event causes the amount of impairment loss to decrease, the imf1airment loss is reversedthrough profit or loss.

IThe Bank writes off certain loans and advances when they are determined to be uncolledable and are classified inaccordance with the regulations ofDa Afghanistan Bank: I

Ii) Standard: These are loans and advances, which are paying in a current manner and are adequately protected bysound net worth and paying capability of the borrower or by the collateral, if any supporting it. Further, all loansand advances which are past due by 1 to 30 days (Islamic 1 to 30 days) for principle e interest payments areclassified as Standard. Bank has not made any provision on standered advances as it is optional.

I ii) Watch: These are loans and advances which are adequately protected by the collateral, if any supporting it, butare potencially weak. Such advances constitute an unwarranted credit risk, but not to he point of requiring aclassification to Substandard. Further, all loans and advances which are past due by 31 to 60 days (Islamic 31 to 60days) for principal or interest payments are classified as Watch. A provision is maintained in the books of account@ 5% of value of such loans and advances.

II

iii) Substandard: These are loans and advances which are inadequately protected by current sound net worth andpaying capacity of the borrower or by the collateral, if any, supporting it. Further, allloansl and advances which arepast due by 61 to 120 days (Islamic 61 to 90 days) for principal or interest payments are also classified asSubstandard. A provision is maintained in the books of account @ 25% of value of such loans and advances.

I iv) Doubtful: These are loans and advances which can be classified as Substandard and have added characteristicthat these weaknesses make collection or liquidation in full, on the basis of current circumstances and values,highly questionable and improbable. Further, all loans and advances which are past due by 21 to 480 days (Islamic91 to 180 days) for principal or interest payments are also classified as Doubtful. A provision is maintained in thebooks of account @ 50% of value of such loans and advances.

I v) Loss: These are loans and advances which are not collectible and or such little value that its continuance as abankable asset is not warranted. Further, all loans and advances which are past due over 48a (Islamic over 181 daysor more) days for principal or interest payments are also classified as Loss. A provision is maintained in the booksof account@100%ofvalueofsuchloansandadvancesandthen thiS loans are charged off and the reserve for10""is reduced immediately upon determination of 1.0" '''M. I ~ ~

..:..:Y

II

December 21,2017

Maiwand Bank

December 20,2016

Note --------- (Ms in '000) --------­I

980,222 927,6813,108,678 3,633,4904,088,900 4,561,171

9,229,892 8,835,5261,893,256 1,805,97211,123,148 10,641,49815,212,048 15,202,669

1,966,737 1,361,3021,750,244 5,619,6153,716,981 6,980,917

3,444,6081 4,64613,444,608 4,646

1,500 1,5002,066,803 1,848,4639,229,892 8,835,526

5. CASH AND BANK BALANCES

Cash in hand:Local currencyForeign currency 5.1

Balances with Da Afghanistan Bank (DAB)Balances with other banks and financial institutions

5.25.3

II 5.1 Foreign currency profile

2,733,115341,2711

34,292

US DollarEuroGB Pound

3,108,678

5.2 Balances with Da Mghanistan Bank (DAB)

I Current accounts:Local currencyForeign currency 5.2.1

Saving accounts - local currency:Overnight deposits 5.2.3

Security deposit with DABRequired reserve with DAB 5.2.5

5.2.1 Foreign currency profile:US DollarEuro

5.2.1.1 1,643,803106,441

1,750,244 I

3,237,903352,12743,460

3,633,490

5,446,249173,366

5,619,615

5.2.1.1 This includes an amount ofUSD Dollers 14,905,521 withheld by the Da Afghanistan Bank due to delayin settlement of litigated bank guarantee issued in favor of Ministry of Energy and Water (MoEW).However, on renewal of contract of Mis Hawadwal Company with Ministry of Energy and Water, bankhas renewed the bank guarantee. Matter has been resolved, only court clearance process is on going toget these funds unbarred.

5.2.2 Investment in DAB capital notes December 21,2017

327,902

IDAB Capital notes

327,902

The capital note. carries interest @ 6.67( 2016,6.665%) r= '=~

December 20,20161,748,3831,748,383

,,­\ I

IMaiwand Bank

5.2.3 TIlls represents overnight deposit facility provided by DAB. These deposits earn interest 0.099% p.a.(2016: rate applicable to 7 days capital notes reduced by 1%) per annum and havd maximum maturity of7 days. I

I

5.2.5 TIlls represents the required reserve account being maintained with DAB which i$ denominated in AFNto meet minimum reserve requirement in accordance with Article 3 "Required ~eserves Regulation" ofthe Banking Regulations issued by DAB. These balances are interest free and are hot available for use inthe Bank's day-to-day operations.

I 5.2.6 Currency profile of required reserve with DABDecember 21, December 20,

2017 2016

I Local currency 592,608 1,782,912US Dollar 1,430,802Euro 43,391

2,066,801 1,782,912

INote: DAB made it mandatory vide their circular issued in July, 2017, that all Banks to maintainrequired reserve on all customer deposits accepted in local currency @8% & oJ all customer depositsaccepted in Foreign Currency @10%. I

December 21,2017

December 20,2016

Note ----------- (Afs in '000) -----------

I

I

5.3 Balances with other banks and financialinstitutions

HDFC Bank, India 8,974 7,632Pashtanay Bank, Afghanistan 789 765Bank-e-Millie Afghan, Afghanistan 8 8New Kabul Bank, Afghanistan 10,000Emirates NBD Bank, UAE 83,755 43,143UniCredit S.P.A, Italy 508 5,580KBC Bank, Belgium 91,598 72,821Bank of China, China 51,292 1,671,417AktifYatirim BanasiA.S., Turkey 380,771 2,182Yinzhou Bank, China 2,510 2,424BMCE, Spain 1,111,1621National Bank of Uzbekistan, Uzbekistan 151,888

1,893,2561 1,805,972

I

I5.3.1 Currency profile of balances with other banks and financial institutions is as folio s:

ICurrent accounts:Local currencyForeign currency 5.3.1.1

10,1081,883,148

1091,805,863

1,893,256 1,805,972

I 5.3.1.1 Foreign currency profile:US DollarEuro

1,783,090100,057

1,883,148

1,711,99793,866

I rI

1,805,863

I

IIIIIIIIIIIIIIIIIIIII

5.3.2 Geographic profile of balances with other banks and financial institutions is as fo ows:

Maiwand Bank

Europe 1,584,039 80,583South Asia 214,664 1,681,473Middle East 83,755 43,143Afghanistan 10,797 773

1,893,2561 1,805,972

These balances with other banks and financial institutions are interest free excep balance with the Bankof Chin" which 0=' interest at tho rate of 0.15% (2016~%) P" annum. ~ ~

5.3.3

r,'-)

- - -- - - - - --December 21,

2017

- - --Maiwand Bank

------ (Ms in '000) ---------

December 20,2016

Note6. LOANSANDADVANCESTO CUSTOMERS

ConventionalIslamic

6.16.2

5,240,646904,663

6,145,309

December 21, 2017 December 20, 2016Gross amount Impairment Carrying

------------------ (Ms in '(00) -------------------NoteGross amount Impairment Carrying

------------------ (Ms in '000) -----------------6.1 Conventional

5,159,1721,180,5736,339,745

Retail customers· running financesShort term loans to employeesOther consumer loans

6.1.1 6,090,345 (849,699) 5,240,646 6,102,108 (944,813) 5,157,295

61.2 1,763 (18) 1,745

6.1.3 133 ~lL 1326,090,345 {849,699} 5,240,646 6,104,004 {944,832L 5,159,172

6.1.1 Running finance facilities are extended to borrowers for a period of one year renewable every year with proper sanction on satisfactory conduct of account. These facilities carryinterest ranging from 15% and 20% (2016: 15% and 20%) per annum. The facilities are secured against immovable properties, stocks and receivables of the borrowers and personalguarantees. AU these loans are subject to mandatory cleanup for 5 days in terms of DAB guidelines.

December 21,2017

Allowance for impairment:Balance at beginning of yearLoans written off during the yearCharge to comprehensive income

ReversalExchange rate differenceImpairment loss for the year

944,832

--------- (Ms in '000) --------

December 20,2016

526,369(168,832)

(539,710) (277,279)120,491 (7,114)324,086 871,688(95,133) 587,295

Balance at.end.of yea.L._ 849,699

6.1.2 Short term loans to employees were repayable within twelve months. These loans carry interest at the rate of 0% (2016: 10%) per annum.

6.1.3 Other consumer loans were extended for a maximum period of one year. These carry interest at the rate of 0% (2016: ranging from 10% and 16%) per annum and are secured against

immovablepropertiesand personal,,"~o"',. t" ~y

- - -- - - - -December 21,

2017

-Maiwand Bank

--------- (Afs in '000) -------

December 20,2016

6.1.4 Currency profile of loans and advances - conventional is as follows:

Local currencyForeign currency - US Dollar

901,9575,188,3886,090,345

December 21,2017 December 20, 2016Note Gross amount Impairment Carrying

--------------- (Afs in '000) -----------

845,8645,258,1406,104,004

Gross amount Impairment Carrying--------------- (Afs in '000) ------------

6.2 Islamic

Musharaka financing 6.2.1 42,091 (24,281) 17,810 46,901 (23,451) 23,450Diminishing Musharaka 6.2.1 114,455 (38,594) 75,861 126,541 (53,513) 73,028Murahaba finance 6.2.2 1,101,131 (290,139) 810,992 1,407,853 (323,758) 1,084,095

1,257,677 {353,014~ 904,663 1,581,295 ~400,722} 1,180,573

6.2.1 Musharaka and Diminishing Musharaka facilities are extended to customers on profit / loss sharing basis. These carry profit sharing ratio of 10% to 16% (2016: 10% to 16%) onannual basis. These are secured against immovable properties and stocks.

6.2.2 Murabaha facilities are extended to customers for purchase of immovable properties. These are secured against the underlying properties.

December 21,2017

--------- (Afs in '0(0) ---------

December 20,2016

6.2.3 Allowance for impairment:Balance at beginning of yearLoans written off during the yearCharge to comprehensive income

ReversalExchange rate differenceCharge for the year

400,722(71)

187,097(6,621)

(221,626) (67,958)(93,103) (3,037)267,092 291,241(47,637)

Balance at end of year 353,014

6.2.4 Currency profile of loans and advances - Islamic is as follows:

Local currencyForeign currency - US Dollar

108,6571,149,0201,257,677

220,246400,722

122,2541,459,041

\,5B1ery

- - - - - - - -Maiwand Bank

7. Property and Equipment

Land Building Leasehold Office Furniture IT Motor ATM Totalimprovements equipment and fittings equipment vehicles

--------------------------------------------------- (Ms in '000) -----------------------------------------------------CostBalance as at January 01,2016 25,407 108,095 120,110 20,626 179,299 75,725 27,792 557,054Additions 45,909 178,489 6,898 65 12,367 243,728Disposal (2,080) (2,080)Write-off (43l (43lBalance as at December 20, 2016 71,316 286,584 124,885 20,691 191,666 75,725 27,792 798,659

Balance as at December 21, 2016 71,316 286,584 124,885 20,691 191,666 75,725.00 27,792 798,659Additions I Reclassification 84,101 (193,899) 3,516 225 14,695 3,165 183 (88,014)DisposalWrite-off ~86,254l (86,254)Balance as at December 21, 2017 71,316 84,101 92,685 128,401 20,916 120,107 78,890 27,975 624,391

Rate 0% 5% 5% 10%- 33% 10% 33% 20% 10%

DepreciationBalance as atJanuary 01, 2016 35,378 43,090 8,464 139,788 45,271 11,438 283,429Charge for the year 6,009 7,893 1,186 14,767 5,924 1,591 37,370Disposal (451) (451)Write off (9) 9Balance as at December 20, 2016 41,387 50,523 9,650 154,555 51,195 13,029 320,339

Balance as at December 21, 2016 41,387 50,523 9,650 154,555 51,195 13,029 320,339Charge for the year 9,147 7,098 1,031 12,283 4,393 1,384 35,336Reversal I Adjustments (5,932) (5,932)Rccalssification 9,019 (9,019)Write off ~86,254l (86,254)Balance as at December 21, 2017 9,019 35,583 57,621 10,681 80,584 55,588 14,413 263,489

Carrying amountsAs at December 20, 2016 71,316 71,316 245,197 74,362 11,041 37,111 24,530 14,763 478,320

-----As atDecemberZt, 2017 71;316 75,082- "57,102 70,780 10$5" 39,523 23,302 13,562 360,902

December 21, December 20,2017 2016

--------- (Ms in '000) --------

7"1 INVESTMENT PROPERTY 109,798

During the year bank has re-classified lease hold improvements to investment property initially purchased by Mis Farah S Limited amounting to Afs, 109,798,426" Related rental income has been duly disclosed in~es: "') /financial statements. _,,='0' is cornrnirted to start "P the pro~" of "'I'.o~1 from D, Afghanisan B,ok (DAB). ~ ((, '(

I Maiwand Bank

December 21, ecember 20,

Note2017 I 2016

--------- (Afs in '000) ---------

I 8. INTANGIBLE ASSETS

CostBalance at beginning of year 25,850 25,247Acquisitions 7,719 603Written off (25,247)

I Balance at end of year 8,322 25,850

Amortization

I Balance at beginning of year 24,149 23,172Charge for the year 3,099 977Written off ~25,247)Balance at end of year 2,001 24,149

I Carrying amounts 6,321 1,701

I9. OTHER ASSETS

Prepayments 24,411 46,125Advances to suppliers and contractors 63 63Receivable from Ministry of Labour 9.1 691 691Advances to employees 611 8,870Securitydeposit - Western Union 13,808 13,336

ISecuritydeposit - others 5,125 1,671Receivable fromWestern Union 23,774 23,748Advance and withholding tax receivable 51,832 22,160Markup receivable on Musharka investment 42,041

I Interest receivable on capital notes 5.2.3 20,944 12,623Loan fee recoverable on Non-current assets held for sale 21,572MarginMoney with Bank-e-Millie, Kabul 9.2 375,200 363,400

I Commercial Bank, Kabul 9.3 40,000 40,000Others 21,088 451

641,160 533,138

9.1 This represents payments made on behalf of Ministry of Labour, Government of Afghanistan toGovernment employees on account of pension.

I 9.2 This includes margin money of Afs.345.20 million (2016: Afs 333.40 million) paid to the Bank-e-MillieAfghan against performance guarantee for securing a contract in respect of collection of1utility bills onbehalf ofDa Afghanistan Breshna Sherkat.

This represents margin money of Afs.40 million (2016:Afs 40 million) paid to the Afghanist,n CommercialBank against bid guarantee for securing Government business of Salary disbursements to, employees ofvarious ministries. Currently bank is in the process of reconciling the reciprocal arrangement withAfghanistan Commercial Bank as the said bank guarantee has been expired inJanuary 2017.

9.3

II 9.4 Currency profile of other assets is as follows:

Local currencyForeign currency - US Dollar

195,641 130,898445,519 402,240641,160 533,138

~~'\\

Maiwand Bank

10. DEFERRED TAX ASSET - NET

IRecognised deferred tax assets and (liabilities)Deferred tax assets and (liabilities) are attributable to the following:

IDecember 21, ~017

I Assets Liabilities Net----------------- (Ms in '000) -----------------

Property and equipment and intangible assetsUnused tax losses

(50,527)269,741

(50,527)269,741

269,741 (50,527) 219,214

December 20, 2016

IAssets Liabilities Net

-----------------(Ms in '000) -----------------

Property and equipment and intangible assetsUnused tax losses

(59,761)290,058 290,058

======2=9~0=,0=58======~(5=9=,7=61=)======~23~0~,2~97~

(59,761)

Movements in temporary differences during the year

II

Opening Profit / (loss)balance for the year Closing balance

----------------- (Ms in '000) -----------------December 21, 2017

Property and equipment and intangible assetsUnused tax lossesDeferred tax asset

(59,761) 9,234 (50,527)___ 2_9""""",,0,,--05_8 __,_(2_0:-,3_17......} ...:2:.,:.6.:....:9',-=--74.:...:1:......

====~2=3=0,=29=7======~(1=1=,0=83=}=====";21;,;;9::l,;;;,2;;,14,;.,,

December 20, 2016

Property and equipment and intangible assetsAccumulated tax lossesDeferred tax asset 50,586

(7,902)187,613

(59,761)290,058

(51,859)102,445

179,711 230,297

11. NON-CURRENT ASSETS - HELD FOR SALE

During the year, the Bank has acquired 6 (Six) Properties (previous year: 9 (Nine) properties) IDfdefaulted borrowers(NPA accounts) in satisfaction of claims. According to the requirements of DAB guidelines, these properties areclassified as "Non-current assets - held for sale" during the year, till such properties are disposed off by the Bankwithin 4 years after the acquisition of such assets. Recoverable value has been recognized in comparison of lowervalue of carrying amount and final rnazhar amount.

U. OTHER BANKING ASSETS

This represents the value of collaterals recoverable from the customers, acquired other tran the court of lawsettlement for 08 loans and advances. These has been recognized on the basis of approval granted by DaAfghanistan Bank vide letter no. 7240/7208 dated 16-11-1396. Deliberations against the exclusive approval forrecognition were initiated prior to the year end. Recognition has been made lower of carrying value and qabala vlue,>ny related unrealised ".un! (loss) Ill" been adjusted in these financial statements. ~ y"\

December 21,2017

Maiwand Bank

December 20,2016

Note --------- (Ms in '000) ---------

13 DEPOSITS FROM CUSTOMERS

I Conventional depositsIslamic depositsMargin money against letter of guaranteesDeposits under lien

13.1 14,967,557 17,409,85213.2 3,383,691 3,222,286

3,554,019 3,384,30713.3 241,809 167,155

22,147,076 24,183,600II 13.1 Conventional deposits

Term depositsCurrent depositsSaving deposits

13.1.1 734,85411,830,1572,402,546

1,169,60213,977,4902,262,76013.1.2

14,967,557 17,409,852

13.1.1 Term deposits carry interest at rates ranging from 0.25% and 3% (2016: 1% and 5%) per annum.

13.1.2I

Saving deposits carry interest at rates ranging from 0.25% and 2.5% (2016: 0.5% and 3%) perannum.

13.1.3 Currency profile of customer deposits - Conventional is as follows:

I December 21,2017

December 20,2016

Note --------- (Afs in '000) ---------

Local currency:Term depositsCurrent depositsSaving deposits

39,7943,888,8201,578,748

61,4773,008,9351,346,663

5,507,362 4,417,075

Foreign currency:Term depositsCurrent depositsSaving deposits

695,060 1,108,1247,941,337 10,968,555823,798 916,098

13.1.4 9,460,195 12,992,777

14,967,557 17,409,852

13.1.4 Foreign currency profile

I US Dollar 9,050,448 12,423,680Euro 394,330 543,117GB Pound 15,417 25,980

I 9,460,195 ~.9::C~

I

Maiwand Bank

13.2 Islamic deposits

Term deposits 13.2.1 274,073 293,706Current deposits 386,356 434,860Saving deposits 13.2.2 2,723,262 2,493,720

3,383,691 3,222,286

II December 21,

2017--------- (Ms iNote

III ITerm deposits include Meaadi Certificates carrying profit at the rate of 1% (2016: 3%) per annum.13.2.1

I13.2.2 Saving deposits include the following:

I 1. Musharaka Saving2. Mutalim Musharaka3. Khass MusharakaIThese deposits carry profit at rate of 0.25% (2016: 0.5%) per annum.

I 13.2.3 Currency profile of customer deposits - Islamic is as follows:

I December 21,2017

Note

December 20,2016

'000) ---------

December 20,2016

--------- (Ms in '000) ---------

ILocal currency:Term deposits 6,747 5,494Current deposits 80,557 80,065Saving deposits 914,769 805,286

1,002,073 890,845Foreign currency:Term deposits 267,326 288,212Current deposits 305,799 354,795Saving deposits 1,808,493 1,688,434

13.2.4 2,381,618 2,331,441

3,383,691 3,222,286

IIIII 13.2.4 Foreign currency profile

US DollarEuro

2,356,90424,715I 2,381,619

IIIII

2,283,07648,365

2,331,441

Maiwand Bank

13.3 This represents deposits of customers which are "Lien Marked" against certificate of account balance issuedto the customer and addressed to a third party. This certificate is a security for that third party. This balancecan only be withdrawn by the customer upon showing "No objection letter" from that cikd party.

II

December 21,2017

December 20,2016

Note ---------(Ms' '000) ---------

I 14. OTHER LIABILITIES

IAfghan Deposit Insurance Corporation (ADIC)premium payable

Interest / Markup payable to customer deposit accoountsWithholding tax payableAccrued expenses and other payablesAmount payable to Da Afghanistan Breshna ShirkatProvision on Bank GuaranteesProvision on Other Assets

14.214.314.3

74,728881,25349,00026,753

14.1 13,8053,083

I 1,048,622

17,3953,34912,49363,61976,387

173,243

14.1 This represents premium paid to ADIC, at the rate of 0.3% per annum on Quarter! average deposits, inrespect of deposit insurance to protect depositors within a certain coverage amount against the loss of theirdeposits placed at the Bank in the unlikely events of the Bank's failure.

14.2 Amount payable to DABS against collection of utility bills.

I14.3 Provision for Bank Guarantees and other assets have been recognized @ 1% on relevant class of assets as

defined in Article 20 of Asset classification and Provisioning Regulations, issued by Da Afghanistan Bank

I

I 15. AUTHORIZED AND PAID-UP CAPITALDecember 21,

2017

Autohrized capital 3,000,000

Paid-up capital 2,581,300

I 15.1 As of December 21, the shareholding pattern of the Bank is as follows:

December 21,2017

December 20,2016

3,000,000

2,181,300

December 20,2016

------------- % -------------

50 5020 2010 1010 1010 10100 100

~ ~~

Dr. Fraidoon NoorzadHaji Naseer AhmedHaji Abdul Qayoom PardisEng AllauddinHaji Abdul Samad

III

Movement in share capital during the year isas follows:

IOpening balanceCapital injected during the yearClosing balance

16. CONTINGENCIES AND COMMITMENTS

I 16.1 Contingencies

ILetters of guarantees

16.1.1 These are b'Uaranteesextended to corporate entities against performance of contracts and bids.

I 16.2 Commitments

There were no outstanding commitments as at 21 December 2017.

I 17. NET INTEREST INCOME

IInterest incomeCash and cash equivalentsLoans and advances to customers

I Interest expenseDeposits from customers

II

Profit / return on Islamic financingProfit on Murabaha financingRental of Diminsing Musharika

IReturn on Islamic depositsProfit on Murabaha KhasProfit on MutaleemaccountProfit on Meeadi MurdarabaProfit on Murabaha SavingI

INet spread earned

17.1 Interest income - loans and advances to customers

IOn

Retail customers - cunning financesShort term loan to employeesOther consumer loans

I 17.2 Interest expense - deposits from customers

I OnTerm depositsSaving deposits

III

Note

16.1.1

17.1

17.2

December 21,2017

December 20,2016

Maiwand Bank

--------- (Afs in '000) ---------

2,181,300400,000

1,500,000681,300

2,581,300 2,181,300

4,890,847 5,074,444

87,343 47,148633,796 892,140721,139 939,288

132,397 206,717132,397 206,717

588,742 732,571

37,609 9,81027 5,685

37,636 15,495

6,742 8,430912 2,085

5,945 12,049551 1,088

14,150 23,652

23,486 (8,157)

633,744483

891,658346136

633,795 892,140

57,65474,743

70,710136,007

-I Maiwand Bank

I December 21,2017

--------- (Afs in tOOO) ------ _

December 20,

2016

87,343 47,148633,796 892,140721,139 939,288

132,397 206,717132,397 206,717

588,742 732,571

37,609 9,81027 5,685

37,636 15,495

6,742 8,430912 2,085

5,945 12,049551 1,088

14,150 23,652

23,486 (8,157)

Note

IMovement in share capital during the year is

as follows:

IOpening balanceCapital injected during the yearClosing balance 2,581,300

2,181,300400,000

16. CONTINGENCIES AND COMMITMENTS

I 16.1 Contingencies

ILetters of guarantees 4,890,84716.1.1

16.1.1 These are guarantees extended to corporate entities against performance of contracts and bids.

I 16.2 Commitments

There were /\ fn 564 Million un-avalied limits outstanding commitments as at 21 December 2017.

I 17. NET INTEREST INCOME

IInterest incomeCash and cash equivalentsLoans and advances to customers 17.1

I Interest expenseDeposits from customers 17.2

II

Profit / return on Islamic financingProfit on Murabaha financingRental of Diminsing Musharika

IReturn on Islamic depositsProfit on Murabaha KhasProfit on Mutaleem accountProfit on Meeadi MurdarabaProfit on Murabaha SavingINet spread earned

I 17.1 Interest income - loans and advances to customers

IOn

Retail customers - running financesShort term loan to employeesOther consumer loans

633,744483

I 633,795

17.2 Interest expense - deposits from customers

I On'reflll deposits

Saving deposits57,654

74,743

I 132,397

I

1,500,000681,300

2,181,300

5,074,444

891,658346136

892,140

70,710136,007206,717

I,

III 18. NET FEE AND COMMISSION INCOME

IFee and commission incomeCommission on guarantees issuedCommission on remittancesLoan processing feeAccount servicing feeOthersTotal fee and commission incomeI

IFee and commission expenseCommission on remittancesInter-bank transaction feesTotal fcc and commission expense

I Net fee and commission income

19. OTHER INCOME

I Bad debt recoveryOthersRental income(Loss) / gain on disposal of property and equipmentI

I 20. PERSONNEL EXPENSES

Salariesand wagesStaff welfare

I

December 21,2017

December 20,2016

Maiwand Bank

Note --------- (Afs in '000) ---------

7,469 28,08494,481 86,98927,158 33,17729,645 22,17217,595 5,852176,348 176,274

(43,072) (11,622)(29,045) ~53,412l(72,117) (65,034)

104,231 111,240

74,616 6,2215,9326,471

~1,440l87,019 4,781

344,83922,698

324,40132,526

367,537 356,927

20.1 It includes an amount of Afs. 33.045 million (2016:Afs.42.432 million) in respect of short-term emPloyL benefits paid toKey Management Personnel.I 2L OTHER OPERATING EXPENSES

I RentInternet and connectivityElectricity and powerLegaland professional chargesAdvertisement expensesTravelADIC insurance chargesRepair and maintenancePrinting and stationerySoftware maintenance feeSecurity expensesSubscriptionCommunicationDirectors' remunerationOffice expensesProvision against other assets and bank guaranteesOthers

IIIII 21.1 These charges are paid to Afghan Deposit

deposits.

III

68,413 67,81181,385 82,54641,671 38,25789,863 24,17017,942 18,9789,430 8,536

21.1 64,813 67,00915,538 18,3793,356 4,0417,705 8,611

128,431 113,937683 842

3,731 4,10014,016 14,68017,084 16,79971,756 11,58521,551 17,466

657,368 517,747

Insurance Corporation (ADIC) @ 0.30% (2016: 0.3%) p r annum of total

M I~'{

December 21,2017

Maiwand BankII December 20,

201622. TAXATION - NET Note --------- (Afs in '000) ---------

Deferred tax 10 (11,083) 179,711(11,083) 179,711

(263,848) (911,590)

(20,317) 187,6139,234 (7,902l

(11,083) 179,711

15,212,048 15,202,669(1,500) (1,500)

(2,066,803) (1,848,463)13,143,745 13,352,706

22.1 Reconciliation of accounting loss

Loss before taxation

ITax on taxable profit @ 20%Impact of deductible temporary differencesImpact of taxable temporary differencesTax expense for the year

23. CASH AND CASH EQUIVALENTS

ICash and bank balancesSecuritydeposit with DABRequired reserve with DAB

523.123.1

II

23.1 The deposits with DAB are not available to finance the Bank's day-to-day operations and, therefore, are not part of cashand cash equivalents.

24. RELATED PARTY TRANSACTIONS

Ultimate controlling party

The Bank is owned by individual persons, who own the Bank's shares in different proportions (Refer note 14.1).

Transactions with key management personnel

The Bank has a related party relationship with its shareholders, directors, key management personnel and their close familymembers. The bank had transactions with following related parties at mutually agreed terms during the year:

Key management personnel(and close family members)

December 21,2017

December 20,2016

Directors and rhareholders

December 21,2017

December 20,2016

----- (Afs in '000) --------- --------- (Afs in '000) --------(a) Deposits from related parties

At beginning of the yearReceived during the yearWithdrawn during the yearAt end of the year

413 91 29,096 2,03834,541 35,060 821,571 912,217

____ ~(3~4~,6~61~) ~(3~4L'7~38L) ~(8_4_8,~93_0~)~ __ ~(~88~5~,1_59~l293 413 1,737 29,096

(b) Other transactions with related partiesSitting fee paid to membersof Board of Supervisors 11,506 14,680

(c) Key management compensationEmployee benefits paid 33,045 42,432

Key management personnel of the Bank include the Chief Executive Officer, Chief Financial Officer, Chief Operating Officer,Chief RiskOfficer, Chief Credit Officer and Chief of Compliance.

IIn addition to their salaries, the Bank also provides non-cash benefits to executives which includes furnished accommodation,

meals and travel. I"'"f IThere were no related P"" transactions and outstanding balances .,1,,, than those disclosed above. ~ ~ ~ ''{

I

I'7\'v

- - - - - - -- -- - - - - -Maiwand Bank

25. FINANCIAL ASSETS AND liABILITIES

Accounting classification of financial assets and financial liabilities and fair values

IFRS 13 establishes a single source of guidance under [FRS for all fair value measurements and disclosures about fair value measurement where such measurements are required as permitted by otherTFRSs.It defines fair value as the price that would be received to sell an asset or paid to transfer a liabilityin an orderly transaction between market participants at the measurement date (i.e. an ex.itprice).

Financial assets which are tradable in an open market are revalued at the market prices prevailing on the statement of financial position date. The estimated fair value of all other financial assets andliabilities is considered not significantly different from book value.

The table below sets out the Bank's classification of each class of financial assets and liabilities,and their fair values.

Designated at Available-for- Held-to- Loans and Other amortised Total carryingNote fair value sale maturity receivables cost amount Fair value

------------------------------------------------- (Ms in '000) ----------------------------------------------------------December 21, 2017

Financial assets

Cash and bank balancesLoans and advances to customersOther assets

569

327,902 14,884,146 15,212,048 15,212,0486,145,309 6,145,309 6,145,309564,226 564,226 564,226

327,902 21,593,681 21,921,583 21,921,583

22,147,076 22,147,076 22,147,076972,869 972,869 972,869

23,119,945 23,119,945 23,119,945

Financial liabilities

Deposits from customersOther liabilities

1314

December 20, 2016

Financial assets

Cash and bank balancesLoans and advances to customersOther assets

569

1,748,383 13,454,2866,339,745464,162

15,202,6696,339,745464,162

15,202,6696,339,745464,162

-Financial liabilities1,748,383 20,258,193 22006576

Deposits from customersOther liabilities

1314

24,183,600160,750

24,183,600160,750

24,183,600160,750

24,344,35024,344,350 24,344,350

III

IIIIIIIIIIIIIIII

Maiwand Bank

26. FINANCIALRISKMANAGEMENT

26.1 Introduction and overview

The Bank has exposure to the following risks from its use of financial instruments:

a) credit riskb) liquidity riskc) market risksd) operational risk

This note presents information about the Bank's exposure to each of the above risks, the Bank's objectives, policies andprocesses for measuring and managing risks, and the Bank's management of capital. IRisk management framework

The Board of Supervisors has the overall responsibility for the establishment and oversight of the Bank's risk managementframework. The Board has established Management Board and a Credit Committee which are responsible for developingand monitoring Bank's risk management policies in their specified areas.

The Bank's risk management policies are established to identify and analyze the risks faced by the ~ank, to set appropriaterisk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewedregularly to reflect changes in market conditions, new regulatory requirements, products and services offered. The Bank,through its training and management standards and procedures, aims to develop a disciplined and constructive controlenvironment, in which all employees understand their roles and obligations.

26.2 Credit risk

Credit risk is the risk of financial loss to the Bank if a customer or counterparty to a financial instrument fails to meet itscontractual obligations, and arises principally from the Bank's loans and advances to customers! For risk managementreporting purposes, the Bank considers and consolidates all elements of credit risk exposure.

Management of credit risk

The Board has delegated responsibility for the management of credit risk to its Bank's Credit Committee which isresponsible for oversight of the Bank's credit risk.

A separate credit department has been established by the Bank that is responsible for oversight of the Bank's credit risk andwhich reports to the Credit Committee. The Credit department is headed by Chief Credit Officer 1eeo).ceo along withcredit department staff looks after credit risk matters and conduct portfolio analysis for managing credit risk.

The Bank has established and maintained loan portfolio in line with the Bank's credit policy. The credit evaluation systemcomprises of credit appraisal, sanctioning and review procedures for the purposes of emphasising prudence in lendingactivities and ensuring the high quality of asset portfolio. IExposure to credit risk managed through regular analysis of the borrowers to meet their respective interest and capitalrepayment obligations, by reviewing their lending limits and rationalising where appropriate. Expo Iure to credit risk is alsomanaged against personal guarantee of the borrower and mortgage of immoveable property duly registered Withv:of law and hypothecation over stock. ~ '<iI.(' "'!

Loans and advances to customers

MaiwandBank

Exposure to credit risk

December 21,2017

December 20,2016

Total! arrying amount

Carrying amount 6

Decembd 21, December 20,2017 2016

--------- ~Afs in '000) ---------

I__ =6 ...,1=45=,3=0=9=====6=,3 ...3=9,=74=5======6,=14 ..5=,3...0=9... 6,339,745

7,348,022 7,685,299(1,202,713) (1,345,554)6,145,309 6,339,745

--------- (Afs in '000) ---------Note

Gross amountAllowance for impairmentCarrying amount

7,348,022(1,2P2,713)6,1~5,309

7,685,299(1,345,554)6,339,745

Cash and bank balances

I

As of the reporting date, the Bank held cash and bank balances amounting to Afs.15,212 million (~016: Afs.16,951 million),which represents its maximum credit exposure on these assets. The bank balances are held with central bank and otherbanks and financial institutions. Management believes that cash and bank balances are not exposed to significant credit risk.The geographical profile of cash and bank balances has been disclosed in note 5.3.2 to these financial statements.

IIn addition to the above, the Bank has issued financial guarantees / contracts for which the maximum amount payable bythe Bank, assuming all guarantees are called upon is Afs.4,891 (2016: Afs.5,074) million. (Refer note 15).

IPast due but not impaired loans IPast due but not impaired loans are those for which contractual interest or principal payments are past due but the Bankbelieves impairment is not appropriate.

I Allowances for impairment

I

The Bank establishes an allowance for impairment losses on assets carried at amortised cost that represents its estimate ofincurred losses in its loan portfolio. The main components of this allowance are a specific loss component that relates toindividually significant exposures, and a collective loan loss allowance established for the groups 4f homogeneous assets inrespect of losses that have been incurred but have not been identified on loans that are considereq individually insignificantas well as individually significant exposures that were subject to individual assessment for impairment but not found to beindividually impaired.

IAll loans and other assets are classified into one of the five classification grades mentioned b~ow for provisioning inaccordance with the regulations of DAB. General and specific allowance for impairment is made by the Bank with thefollowing percentages:

Days past due Percentage %

IConventional

Standard 1-30 days 1%Watch 31-60 days 5%

ISubstandard 61-120 da~s 25%Doubtful 121-480 d~ys 50%Loss 481 days or more 100%

I Islamic

Standard 1-30 days 1%Watch 31-60 days 5%

I Substandard 61-90 days 25%Doubtful 91-180 da s 50%Loss 181 days or rore

100~

l cvy

II

Wn'te-oll policy

Maiwand Bank

The Bank writes off loans or advances and any related allowances for impairment losses, hen the Bank's CreditCommittee determines that the loans or advances are uncollectible. This determination is reached after consideringinformation such as the occurrence of significant changes in the borrower's financial position such that the borrower canno longer pay the obligation, or that proceeds from collateral will not be sufficient to pay back .!be entire exposure and inaccordance with the regulations of Da Afghanistan Bank. For smaller balance standardized oans, write off decisionsgenerally are based on a product specific past due status. Before allowing to written off, it is ensured that all possibleavenues of recovery, inclusive of legal action are exhausted or legal action is not advisable.

The Bank holds collateral against loans and advances in the form of mortgage interest over proPfrty which is subsequentlytransferred in the name of the Bank, other registered securities over assets, and guarantees. Estimates of fair value are basedon the value of collateral assessed at the time of borrowing by one of the five external valuers of t~e Bank.

I An estimate of the fair value of the collateral and other security enhancements held against loans and advances to customersis shown below:

December 21,2017

December 20,2016

Note --------- (Afs in '000) ---------

IAgainst impaired:

PropertyOthers

8,306,180 7,452,220

8,306,180 7,452,220I

8,713,420 7,285,86017,019,600 14,738,080

Against neither past due nor impaired:

IConcentrationof credit risks by sector

All the loans have been disbursed in geographical territory of Afghanistan. The Bank monitors concentrations of credit riskby sector. An analysis of concentrations of credit risk of loans and advances to customers at reportiing date is as follows:

I Carrying amount 6 6,145,309 6,339,745

Concentration by sectorManufacturing 17,476 671,067Trade 1,412,392 2,263,672Construction 1,408,863 1,523,677Services 874,922 1,534,832Others 2,437,840 346,497

6,151,493 6,339,745

Concentration by locationAfghanistan 6,145,309 6,339,745

26.3 Liquidity risk

I

ILiquidity risk is the risk that the Bank will encounter difficulty in meeting obligations from its financial liabilities that aresettled by delivering cash or another financial asset.

IManagement of liquidity risk

The Board ensures that the Bank has necessary tools and framework to cater the requirements of liquidity risk managementand the Bank is capable to confronting uneven liquidity scenarios. The Bank's managemen't is responsible for theimplementation of sound policies and procedures keeping in view the strategic direction and risk appetite specified by theBoard. Management Board is entrusted with the responsibility of managing the mismatch in maturities to ensure sufficientavaiJable cash flows to meet possible withdrawal of deposits, other commitment or challenges associated with suddenchanges in market conditions, whilst enabling the Bank to pursue valued business opportunities.

The Bank relies on deposits from customers as its primary source of funding. Depositsshorter maturities and large proportion of them are repayable on demand.

from Icustomers generally has

~ -v ~

I

- - - -- - -Maiwand Bank

Exposure (0 liquidity risk

The key measure used by the Bank for managing liquidity risk is the ratio of net liquid assets to deposits from customers. For this purpose net liquid assets arc considered including cash andcash equivalent. A similar, but not identical, calculation is used to measure the Bank's compliance with the liquidity limit established by the Bank's Regulator (Da Afghanistan Bank). Detailsof the Bank's reported ratio of net liquid assets to a sum of attracted funds and designated off balance sheet items, at the reporting date and during the reporting period are as follow:

2017 2016

At December 58% 57%Maximum for the year 60% 58%Minimum for the year 53% 51%

The maturity profile of the Bank's liabilities based on contractual maturities is given below:

Note

Gross nominalinflow /(outflow)

1-5 yearsLess than 1

month3months to 1

year1-3 months

December 21, 2017 --------------- (Ms in '000) ----------

Financial assets:Cash and bank balancesInvestment in DAB Capital NotesLoans and advances to

customers (gross)Other assets

5 15,212,047 13,143,744327,902 327,902

(, 7,348,022 3,558,606 883,003 1,421,4289 130,093 44,801 2,733 18,670 63,889

23,018,064 17,075,053 2,733 901,673 1,485,317

13 (22,147,076) (5,158,059) (151,889) (396,002) (16,441,126)14 {1,048,622~ {969,786) F6,269~ {2,567~

{23,195,698~ ~6,127,845~ (228,158~ {396,002~ (16,443,693)

{177,634~ 10,947,208 {225,425~ 505,671 {14,958,37~

Financial liabilities:Deposits from customersOther liabilities

Net assets

December 20, 2016

Financial assets:Cash and bank balancesInvestment in DAB Capital NotesLoans and advances to

customers (gross)­Other assets

5 15,202,669 13,418,2575.3 1,748,383 494,587 1,253,796

z 7,685,299 5,225,496 1,069,364 1,383,547 6,8929 45,755 33,132 3,474 9,149

24,682,106 18,676,885 1,567,425 2,646,492 6,892

13 (24,183,600) (23,212,457) (646,678) (323,179) (1,286)14 !160,750) !160,750)

!24,344,350) !23,373,20Zl !646,(78) !323,179~ (1,286)

337,756 (4,696,322) 920,747 2,323,313 5,606

Financial liabilities:Deposits from customersOther liabilities

Net assets

More than 5years

2,068,303

1,484,985

3,553,288

3,553,288

1,784,412

1,784,412

1,784,412

Carryingamount

15,212,048327,902

7,348,022130,093

23,018,065

22,147,0761,048,622

23,195,698

(177,633)

15,202,6691,748,383

7,685,29945,755

24,682,106

24,183,600160,750

24,344,350

337,756

- - -

-Ar:

- - - - - -- -- -- - -- - -- -Maiwand Bank

The above table shows the undiscounted cash flows on the Bank's financial liabilities on the basis of their earliest possible contractual maturity. The gross nominal inflow / (out flow)disclosed in the above table is the contractual, undiscounted cash flow on the financial liability.

Maturity analysis for off balance sheet items

Note

Gross nominalinflow /(outflow)

1-5 yearsLess than 1

month3months to 1

yearMore than 5

yearsCarryingamount

1-3 months

------------------------------------------- (Ms in '000) ----------

December 21, 2017

Issued fmancial guarantees contracts 4,890,847 1,059,392 894,001 1,815,08316 1,122,371 4,890,847

4,890,847 1,059,392 894,001 1,815,083 1,122,371 4,890,847

NOIe: Bank Guarantees under 1 to 30 days also include Bank Guarantees of Afs 874.45 Million (2016: AFS 974.89 Million) , which arc expired as on December 21, 2017.

December 20, 2016

Issued financial guarantees contracts 5,074,444 1,310,24116 759,496 1,207,045 1,797,662 5,074,444

1,310,2415,074,444 759,496 1,207,045 1,797,662 5,074,444

26.4 Market risks

Market risk is the risk that changes in market prices, such as interest rate, equity prices, foreign exchange rates and credit spreads (not relating to changes in the obligor's / issuer's creditstanding) will affect the Bank's income or the value of its holding of financial instruments. The objective of market risk management is to manage and control market risk e"l'osures with inacceptable parameters, while optimizing the return on risk.

Management of market risks

To manage and control market risk a well defined limits structure is in place. These limits arc reviewed, adjusted and approved periodically. Overall authority for market risk is vested in__ Management Board of the Bank..:..The Manase:ment Board is responsible for the dcvelo12mem of d tailed riskmanagemecrnclicies and..day to day ccview.of. their-.implementatifln.- ---------------

Exposure to interest racerisk

The Bank's risk to which not-trading portfolios are exposed is the risk of loss from fluctuations in the future flows or fair values of financial instrument because of change in market interestrates. Interest rate risk is managed principally through monitoring interest rate gaps and by having pre-approved limits for repricing bands. The Management Board is the monitoring bodyfor compliance with these limits and is assisted by risk management in its monthly monitoring activities. A summary of the Bank's interest rate gap position on non-trading portfolio is as- , ~~

I-I - - - - -- - - - -- - -Interes t bearing

Interest rates(p.a)

Less than 3months

- - -Non-interest

3-6 months 6-U months 1-5 years Total bearing Total----------- (Ms in '000) ----------------------

December 21, 2017

Financial assets:Cash and bank balances 0.10% 3,444,608 3,444,608

0.12% toInvestment in DAB Capital Notes 6.665% 327,902 327,902Loans and advances to

customers (gross) 16% to 20% 3,558,606 1,668 881,335 2,110,284 1,707,118Other assets

7,331,116 1,668 881,335 2,110,284 5,479,628Financial liabilities:Deposits from customers 0.25% to 2.5% 612,923 4,829,872 179,358 5U,582 6,134,735Other liabilities

6U,923 4,829,872 179,358 512,582 6,134,735

On balance sheet interest sensitivity gap 6,718,193 (4,828,204} 701,977 1,597,702 ~655,107)

11,767,439

130,09311,897,532

16,012,3411,048,622

17,060,963

(5,163,431)

If the interest rate increase / decrease by 100 bps, the effect on loss for the year would have been Afs.65.51 million (2016: Afs.48.90 million) higher / lower respectively.

December 20, 2016

Financial assets:Cash and bank balances 0.05% to 0.15% 2,170,650 925,893 327,903 3,424,446Investment in DAB Capital Notes 1.80% to 6% 494,587 1,253,796 1,748,383Loans and advances to

customers (gross) 10% to 20% 6,294,860 1,104,806 278,741 6,892 7,685,299Other assets

8,465,510 2,525,286 1,860,440 6,892 12,858,128Financial liabilities:Deposits from customers 0.25% to 6% 5,895,323 219,806 103,373 1,286 6,219,788Other liabilities

5,895,323 219,806 103,373 1,286 6,219,788

On balance sheet interest sensitivity gap 2,570,187 2,305,480 1,757,067 5,606 6,638,340

13,526,606

13,572,361

17,963,812_160~75018,124,562

(4,552,201)

45,755

15,212,047

327,902

7,348,022130,093

23,018,064

22,147,0761,048,622

23,195,698

(177,634)

15,202,6691,748,383

7,685,29945,755

24,682,106

24,183,600t60,7W

- -Maiwand Bank

24,344,350

337,756

I Exposure to currency risk

Currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchangerates. Foreign currency activities result mainly from the Bank's holding of foreign currency assets under its foreign reservemanagement function. The overall level of these assets is determined based on the prevailing extent of credit and liquidity risks. Inorder to avoid losses arising from adverse changes in the rates of exchange, the Bank's compliance with th limits established forforeign currency positions is required to be monitored by the management. The Bank has not entered in to any foreign currencyhedging transaction as at year end.

Maiwand Bank

The Bank's exposure to foreign currency risk based on notional amounts is as follow:

I

I

USD Euro GBP Others Total

----------------------------------------- (Afs in '000) ---------------------------------------

IDecember 21, 2017

Financial assets:Cash and bank balances 7,590,8U 591,161 34,293 6,995,783 15,212,048Investment in DAB Capital Notes. 327,902 327,902Loans and advances tocustomers (gross) 6,337,408 1,010,614· 7,348,022

Other assets 436,599 127,6271 564,22614,364,818 591,161 34,293 8,461,926' 23,452,198

Financial liabilities:Deposits from customers 14,290,145 433,909 15,417 7,407,6051 22,147,076Other liabilities 8,074 482 158,813 167,369

14,298,219 434,391 15,417 7,566,418 22,314,445

Net exposure currency wise 66,599 156,770 18,876 895,508 1,137,753

December 20, 2016

Financial assets:Cash and bank balances 10,396,149 619,359 43,460 4,143,701 15,202,669Investment inDAB Capital Notes 1,748,383 1,748,383Loans and advances to

customers (gross) 6,717,181 968,118 7,685,299Other assets 379,003 85,159 464,162

17,492,333 619,359 43,460 6,945,361 25,100,513

Financial liabilities:Deposits from customers 17,419,735 596,695 25,980 6,141,190 24,183,600Other liabilities 24,003 438 136,309 160,750

17,443,738 597,133 25,980 6,277,499 I 24,344,350

Net exposure currency wise 48,595 22,226 17,480 667,862 756,163

I

I

I

The following significant exchange rates applied during the period.

December 21, 2017 December 20, 2016

Average rate Reporting datespot rate Average rate Reporting date

spot rate

--------- (Ms) --------- ----.. -..... (Ms) .---- .....

USDEuroGBP

69.4982.1892.31

69.0481.5291.69

66.8274.87

66.6870.78

~~

I{,;t

I Sensitivity anslysis

Maiwand BankI

IA 10% strengthening of the Afghani currency, as indicated below, against the USD, Euro and GI3P at 21 I ecember 2017 wouldhave increased / (decreased) equity and profit or loss by the amounts shown below. This analysis is based on foreign currencyexchange rate variances that the Bank considered to be reasonably possible at the end of the reporting period The analysisassumesthat all other variables, in particular interest rates, remain constant.

I December 21, 2017 December 20, 2016Equity Profit & (loss)

-------- (Afs in '000) ---------

IUSDEuroGBP

6,66015,6771,888

6,66015,6771,888

Equity Profit & 0055)--------- CAfsin '000) ---------

4,86J 4,8602,223 2,2231,748 1,748

IA 10% weakening of the Afghani against the above currencies at 21 December 2017 would have had the eq'f'l but opposite effecton the above currencies to the amounts shown above, on the basis that all other variables remain constant.

I 26_5 Operational risks

I Operational risk is the risk of direct or indirect loss arising from a wide variety of causes associated with the Bank's processes,personnel, technology and infrastructure, and from external factors other than credit, market and liquidity risk such as those arisingfrom legal and regulatory requirements and generally accepted standards of corporate behaviour. Operational rsks arise from all ofthe Bank's operations and are faced by all business units.

The Bank's objective is to manage operational risk so as to avoid the financial losses and damage to the BInk's reputation withoverall cost effectiveness and to avoid control procedures that restrict initiative and creativity.

I 26.6 Capital management

IRegUlatory capital

IThe Bank's regulator DAB sets and monitors capital requirements for the Bank. The capital adequacy of the BJnk is assessed in twotiers as per regulations of the DAB. As of reporting date, DAB requires the Bank to maintain financial capital hf not less than Afs.lbillion and regulatory capital to risk-weighted asset ratio of not less than 12 percent and a core (Tier 1) capital 0 risk-weighted assetratio of not less than 6 percent.

I- Tier 1 or core capital, consisting of the highest quality capital elements that fullymeet all the essential characteristics of capital; tobe 6% of risk weighted assets. I

I- Tier 2 or supplementary capital, which includes other instruments which, to a varying degree, fall short oflthe quality of Tier 1capital,but nonetheless contribute to the overall strength of a bank as a going concem.

- Regulatorycapital is the sum of Tier 1 and Tier 2 capital and Tier 2 capital cannot exceed the amount of Tier 1 capital.

I The Bank's regulatory capital position at 21 December 2017 was as follows:

IDecember 21,

2017December 20,

2016Note --------- (AfSlin '000) ---------

ITier 1 capitalTotal equity capitalLess: Profit for the yearLess: Intangible assetsLess:Deferred tax assetsTotal tier 1 (core) capital

810

I

1,183,076 1,058,007

(6,321) (1,701)(219,214) ~230,297~957,5411 826,009

li ~~

III

I

Maiwand BankI

I General allowances on Standard AdvancesAdd: Profit for the yearTotal tier 2 (supplementary) capital

December 2 , December 20,2017·' 2016

------~~,::rin '000) ----~~,~oo

- I42,852 45,000

I Total Regulatory capital = Tier 1 + Tier 2 1,000,39~ 871,009

Risk-weight categories

I 0% risk weight:Cash in Afghani and fully-convertible foreign currenciesDirect claims on DABDirect claims on other GovernmentsOthersTotal0% risk-weight total (above total x 0%)

4,088,9009,229,892

4,561,1718,835,526

I 144,58':113,396,69713,463,379

I20% risk weight:Balanceswith other banks20% risk-weight total (above total x 20%)

2,279,351j 1,805,972455,8701 361,194

3,021,4851 6,718,15049,640! 105,003

1,535,5631 3,411,577

5,564,919 3,389,028(6,321) (1,701)

(219,214) ~230,297L5,339,384 3,157,0305,339,384 3,157,030

I50% risk weight:Loans supported by collateralLoans to builders50% risk-weight total (above total x 50%)

I

100% risk weight:AUother assetsLess: intangible assetsLess:Deferred tax assetsAll other assets - net100% risk-weight total (above total x 100%)

Credit conversion factor

I 0% risk weight:Undrawn loan and overdraft facilitiesGuarantees0% credit conversion factor total (risk-weighted total x 0%) *0% risk-weight total (above total x 0%)

* Includes expired bank guarantees of Afs 874.45 Million.

3,980,2511 3,276,782----'---'--

II 20% risk weight:

Commercial letters of credit20% credit conversion factor total (risk-weighted total x 20%)20% risk-weight total (above total x 20%)

I100% risk weight:Guarantees100% credit conversion factor total (risk-weighted total x 100%)100% risk-weight total (above total x 100%)

910,5961 __ .....:;.,.1,7-,-,9_7,<..;..66.:..;:2:.....910,596 1,797,662910,596 1,797,662

Total risk-weighted assets 8,241,413 8,727,463

I Tier 1Capital Ratio(Tier 1 capital as % of total

risk-weighted assets) 11.62% 9.46%

I Regulatory Capital Ratio(Regulatorycapital as% of total risk-weighted assets) U.14% 9.98%

IIIIIIIIIIIIIIIIIIII

----------- -- - -_-

Maiwand Bank

27. ISLAMIC BANKING

The Bank commenced its Islamic Banking Operations in Afghanistan in November 2015. The state sent of financial position ofIslamic branch are as follows:

Islamic statement of financial position

ASSETSCash and bank balancesLoans and advances to customersOperating fixed assetsOther assetsTotal assets

LIABILITIESDeposits and other accounts- Demand deposits- Time deposits- SavingdepositsOther liabilitiesTotal liabilities

EQUITYAccumulated lossesTotal equity

Total liabilities and equity

Decem er 21,207

December 20,2016

-------- (Ms in '000) -----.--

1,5f6,93991°,8471?9,933395,937

1,446,8551,288,648112,746138,202

2,983,656 2,986,451

I388,817

2'ltsI4,0732,7 . ,262

5,196

437,237293,706

2,493,72011,900

3,3,1,348

(4~'692)

3,236,563

(250,112)(4j,692) (250,112)

2,9&,3,656 2,986,451

DATE OF AUTHORISATION FOR ISSUE I

.. .. \ 3~ 6'V\~ -1.0' R:"These financial statements were authonsed for Issue on by the Board of Supervisors of the Bank.

28.

29. GENERAL

29.1 Figures have been re-arranged and re-classified,wherever necessary, for the purpose of better presenratio I.

29.2 Figures have been rounded off to the nearest thousand, except as otherwise mentioned~.

'"

Chairman