۔ مز پآ ماا تآ آ ُ

© Faysal Bank Islami 2022. All Rights Reserved.

Table of Contents

Chairman's Message

Organisational Overview and External Environment

Corporate DNA

Corporate Information

Ownership structure

Products & Services

Our Network

Competitive Landscape

SWOT

Value Chain & Business Model

History of Major Events

Major events during the year

Significant changes from prior years

Governance

Board of Directors' - Profiles

Senior Management - Profiles Shariah Board - Profiles

Senior Management & Internal Committees Organisational Structure

Board Committees and Terms of Reference Board Meetings and Attendance

Role of the Board of Directors

Annual Evaluation of the BOD Directors' Orientation Directors' Training

Oversight over Internal Controls & Systems Remuneration Policy Disclosures

Policy for security clearance of foreign directors Governance Practices Exceeding Legal Requirements Diversity, Equity & Inclusion

Conflict of Interest Related Party Transactions

Policy for safety records of the company IT Governance Policy

Whistle blowing policy

Human resource management policies Business Continuity Management Enterprise Resource Planning (ERP)

External Search Consultancy for Directors selection

Corporate Social Responsibility

CSR Statement

Social and Environmental Responsibility Policy

Performance & Position

Six Year Financial Summary Financial Ratios

DuPont Analysis

Quarterly Performance review Highlights

Sensitivity Analysis due to Foreign Currency Fluctuations Methods and assumptions used in compiling the indicators Share Price Sensitivity Analysis

Business Rationale for Major Capital Expenditure

Outlook

Forward Looking Statement

Sources of Information & assumptions used for Projections & Forecasts

How the performance of the Bank meets the disclosures made in 2021

Response to Critical Challenges and Uncertainties

04 Strategy & Resource Allocation

Objectives, Actions & KPIs

114

08

Significant changes in objectives & strategies

115

10

Stakeholder Relationship and Engagement

12

118

13

Identification of key stakeholders

Stakeholders Engagement Process and Frequency

118

26

28

Investor Relation Section on Corporate Website

118

30

Steps to Encourage Minority Shareholders Participation in AGM

120

32

Investors' grievance policy

120

35

Summary of Analyst Briefing

120

38

Issues Raised in Last AGM

121

39

Statement of Value Added

122

42

Risk and Opportunity

126

49

Risks and Opportunity Report

58

Sources of Risks & Opportunities

127

60

62

Corporate Governance

64

Report of the Board Audit and Corporate Governance Committee

130

68

Auditors Review Report on Compliance

70

71

with Code of Corporate Governance

132

71

Statement of Compliance with Code of Corporate Governance

133

72

Shariah Advisor Report

136

72

74

Statement on Internal Controls

143

76

Authorization of Financial Statements by the Board of Directors

143

76

77

Unconsolidated

78

Directors' Report

146

78

Auditors Report to the Members

173

79

Unconsolidated Statement of Financial Position

178

79

Unconsolidated Profit and Loss Account

179

82

Unconsolidated Statement of Comprehensive Income

180

83

Unconsolidated Statement of Changes in Equity

181

83

84

Unconsolidated Cash Flow Statement

182

84

Notes to the Unconsolidated Financial Statements

183

Annexures

258

88

Consolidated

89

Directors' Report

282

Auditors Report to the Members

289

92

Consolidated Statement of Financial Position

293

93

Consolidated Profit and Loss Account

294

102

Consolidated Statement of Comprehensive Income

295

103

Consolidated Statement of Changes in Equity

296

104

Consolidated Cash Flow Statement

297

106

Notes to the Consolidated Financial Statements

298

106

Annexures

378

106

107

Other Information

110

Consumer Grievances

Mechanism

402

Combined Pattern of CDC and Physical Shareholding

403

110

Pattern of Shareholding

405

Code of Conduct

406

Jama Punji

407

111

Notice of the 28th Annual General Meeting

408

Forms of Proxy

415

111

Key Message from the Chairman

Dear Stakeholders,

On behalf of the Board of Directors of Faysal Bank, it gives me immense pleasure to present our Annual Report and audited financial statements for the year ended December 31, 2022. While we look back on the past three decades with pride, we also look forward with optimism to the next three decades and beyond. On behalf of the Board and myself, I would like to voice our sincere thanks and utmost gratitude for your unwavering support to the Bank.

I trust our report will provide you with an in-depth understanding of the Bank as well as the strategies that enabled us to successfully navigate through these challenging times and emerge stronger and more resilient.

75 years of Pakistan and 35 years of FBL presence in Pakistan The year 2022 marked the Platinum Jubilee of Pakistan's independence. Our journey started 75 years ago with the motto of "Kalma-e-Tayyaba"in which we promised that we will build this country as a prodigious Islamic democratic country of the Muslim world. In the last 75 years, though the country has faced serious economic and socioeconomic problems, it has come a long way being the only Islamic nuclear power state.

FBL takes pride in playing a significant role to establish a viable Islamic financial system in the country. The team of FBL, by converting the bank into a full-fledged Islamic Bank, has made history, which will be considered as a benchmark for Pakistan's

banking industry. FBL conversion has provided a perfect road map to convert Pakistan's financial structure on Islamic system as per the vision put forward by the Government of Pakistan.

Largest conversion of a Conventional Bank into an Islamic Bank It is indeed an incredibly special occasion for us, as FBL celebrates its commendable conversion to a full-fledgedIslamic bank. Alhamdulilah, with the grace of the All-Mighty,the unwavering vision of the Board, the dedication of the management and the determination of the employees, the Bank has successfully pulled a one-of-a-kindfeat: the largest global conversion of a Conventional Bank into an Islamic Bank.

Looking back at our Financial Performance in 2022

FBL delivered solid financial results for 2022, reporting 38% increase in net profit to Rs. 11.2 billion. FBL has achieved several milestones including the landmark of Rs. 1.1 trillion in balance sheet footings with deposit market share increasing to 3.5%.

People are our asset

It goes without saying that our staff is our most valuable asset. They are not only the face of our organization, but also determine our performance. During the year, the Bank continued to invest in their training and development as we firmly believe in developing capabilities from within the organization. The trainings were more emphasized on Islamic Banking courses to upscale the knowledge and reinforce our commitment towards the conversion while also providing career growth to staff.

Embracing Technology

Adoption of modern technology is critical in today's world, and the increasing rate of digitization is visible in Pakistan across all sectors; and banks are no exceptions. FBL is investing in innovation to ensure that the customers have a seamless banking experience. The Bank's focus on enhancing its digital offerings has led to, not only growth in onboarding of new customers on digital channels, but also increase in transaction volumes. Customers can now fulfill their basic banking needs through WhatsApp Banking without having to login to the mobile banking Application. All these initiatives are part of our commitment to provide best service to customers. We are committed to incorporate modern processes and technologies into our operations and services to achieve higher levels of customer satisfaction.

Contribution in Corporate Social Responsibility (CSR) Corporate Social Responsibility programs have a significant impact on society while leveraging an organization's strengths. FBL has always been committed to support initiatives in the areas of education, professional development of youth, health, and poverty alleviation. We are committed to carrying out our CSR activities for the benefit of society and in 2022 our overall philanthropic contributions were Rs. 88 million.

Awards for our excellent performance

FBL has received awards during 2022 from distinguished national and international organizations namely, 'Best Bank of the Year 2021' amongst mid-size banks of the country by Chartered Financial Analyst (CFA) Society Pakistan; 'Best Islamic Retail Bank in Pakistan 2022' at Islamic Retail Bank Awards (IRBA) organized by Cambridge IFA. All these recognitions and awards are testament to the strategic brilliance of our Board of Directors, Senior Management and the hard work and perseverance of our employees. This shows FBL is on track to achieve the vision of being a premier Islamic Bank in Pakistan and contributing significantly to the economy.

Positioned for a better future

Considering the current situation, it seems that 2023 is going to be another challenging year. While uncertainties persist, we see opportunity in change, and value in innovating for the future. We are committed to strengthen our market position by focusing on asset quality, innovation in product development, offering personalized services and mobilizing core deposits. During the year we opened 94 branches taking the branch network to 700 and we will continue to open more branches in coming years.

Heartfelt thanks

With each passing year, we increasingly recognize just how important our stakeholders are to our sustainable growth journey. I would like to thank all our stakeholders for their continued trust and confidence on the Bank.

I would like to express my gratitude to the State Bank of Pakistan and the Securities & Exchange Commission of Pakistan for their continued support and guidance.

I would also like to express my gratitude to our shareholders, members of our Shariah Board and my fellow Board members as well as all members of the Faysal Bank team who worked untiringly to achieve the desired goals of the Bank.

Yours sincerely,

Farooq Rahmatullah Khan

Chairman of the Board

Dated: February 23, 2023

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Faysal Bank Ltd. published this content on 07 March 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 07 March 2023 06:32:03 UTC.