ADVICE FOR INVESTORS INVESTORS ARE STRONGLY ADVISED IN THEIR OWN INTEREST TO CAREFULLY READ THE CONTENTS OF THIS PROSPECTUS, ESPECIALLY THE RISK FACTORS GIVEN AT PARA 4.11 OF THIS PROSPECTUS BEFORE MAKING ANY INVESTMENT DECISION.

SUBMISSION OF FALSE AND FICTITIOUS APPLICATIONS ARE PROHIBITED AND SUCH APPLICATIONS’ MONEY MAY BE FORFEITED UNDER SECTION 87(8) OF THE SECURITIES ACT, 2015.

SONERI BANK LIMITED PROSPECTUS THE ISSUE SIZE OF FULLY PAID UP, RATED, LISTED, PERPETUAL, UNSECURED, SUBORDINATED, NON-CUMULATIVE AND CONTINGENT CONVERTIBLE DEBT INSTRUMENTS IN THE NATURE OF TERM FINANCE CERTIFICATES (“TFCS”) IS PKR 4,000 MILLION, OUT OF WHICH TFCS OF PKR 3,600 MILLION (90% OF ISSUE SIZE) ARE ISSUED TO THE PRE-IPO INVESTORS AND PKR 400 MILLION (10% OF ISSUE SIZE) ARE BEING OFFERED TO THE GENERAL PUBLIC BY WAY OF INITIAL PUBLIC OFFER THROUGH THIS PROSPECTUS

RATE OF RETURN: PERPETUAL INSTRUMENT @ 6 MONTH KIBOR* (ASK SIDE) PLUS 2.00% P.A INSTRUMENT RATING: A (SINGLE A) BY THE PAKISTAN CREDIT RATING COMPANY LIMITED LONG TERM ENTITY RATING: “AA-” (DOUBLE A MINUS) SHORT TERM ENTITY RATING: “A1+” (A ONE PLUS) BY THE PAKISTAN CREDIT RATING AGENCY LIMITED AS PER PSX’S LISTING OF COMPANIES AND SECURITIES REGULATIONS, THE DRAFT PROSPECTUS WAS PLACED ON PSX’S WEBSITE, FOR SEEKING PUBLIC COMMENTS, FOR SEVEN (7) WORKING DAYS STARTING FROM OCTOBER 18, 2018 TO OCTOBER 26, 2018. NO COMMENTS HAVE BEEN RECEIVED ON THE DRAFT PROSPECTUS.

DATE OF PUBLIC SUBSCRIPTION: FROM DECEMBER 5, 2018 TO DECEMBER 6, 2018 (FROM: 9:00 AM TO 5:00 PM) (BOTH DAYS INCLUSIVE)

CONSULTANT TO THE ISSUE

BANKERS TO THE ISSUE (RETAIL PORTION) Allied Bank Limited Askari Bank Limited Bank Alfalah Limited** Bank Al Habib Limited Faysal Bank Limited Habib Metropolitan Bank Limited JS Bank Limited MCB Bank Limited Silk Bank Limited Soneri Bank Limited United Bank Limited** **In order to facilitate investors, United Bank Limited (“UBL”) and Bank Alfalah Limited (“BAFL”) are providing the facility of electronic submission of application (e‐IPO) to their account holders. UBL account holders can use UBL net banking to submit their application via link http://www.ubldirect.com/corporate/ebank and BAFL account holders can use BAFL net banking to submit their applications via link https://netbanking.bankalfalah.com.Further, please note that online applications can be submitted 24 hours a day during the subscription period which will close at midnight on December 6, 2018.

The Central Depository Company of Pakistan (“CDC”) in collaboration with 1 Link (G) Limited (1 Link) has developed a Centralized e-IPO System (“CES”) through which applications for subscription of securities offered through IPOs can be made electronically. CES has been made available in this IPO which can be accessed through the web link www.cdceipo.com. Payment of subscription money can be made through 1Link’s member banks available for CES, list of which is available on above web link. For making application though CES, investors must be registered with CES. Registration with CES is one-time activity, free of cost, and a self-registration process by filling the CES registration form, which is available 24/7 all around the year. Investors who have valid Computerized National Identity Card (CNIC), bank account with any of the commercial bank, email address, mobile phone number and CDS Account (Investor Account or sub Account) may register themselves with CES. Investors who do not have CDS account may visit www.cdcpakistan.com for information and details. For further guidance and queries regarding CES and opening of CDS account, investors may contact CDC at phone Number: 0800 – 23275 (CDCPL) and e-mail: [email protected]. CES is connected to a number of banks through 1 Link for payment of the subscription money. For further details on CES, please refer para 2.10 of this Prospectus or contact Mr. Farooq Ahmed Butt at Phone 021-34326030 and email: [email protected].

Underwriters for Retail Portion of the Issue: For investor education, please visit www.jamapunji.com.pk, and read the IPO Investor Guide placed at web link https://www.secp.gov.pk/document/initial-public-offering-ipo-a-concise-guide-for-

investors/?wpdmdl=29584 Jama Punji is an investor education initiative of the Securities & Exchange Commission of Pakistan.

Prospectus and Subscription Forms can be downloaded from the following websites https://www.psx.com.pk, http://www.soneribank.com/ and https://www.nextcapital.com.pk

For further queries you may contact: Saad Reaz Marium Ejaz Umer Habib Talha Azher P: 111 567 890 (Ext. 2265) P: 111 567 890 (Ext. 2188) P: +92 21 3516 9513 P: +92 21 3516 9516 E: [email protected] E: [email protected] E: [email protected] E:[email protected] DATE OF PUBLICATION OF THIS PROSPECTUS: NOVEMBER 28, 2018

*Average rate ‘Ask Side’ of the six-month Karachi Inter Bank offered Rate (“KIBOR”) as published on Reuters Page KIBR or as published by the Financial Markets Association of Pakistan in case Reuters page is unavailable on the Base Rate setting date.

TFC PROSPECTUS | SONERI BANK LIMITED

UNDERTAKING BY THE CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER

DATE: OCTOBER 5, 2018

WE, MOHAMMAD AFTAB MANZOOR, THE PRESIDENT & CEO AND MIRZA ZAFAR BAIG, THE CHIEF FINANCIAL OFFICER OF SONERI BANK LIMITED HEREBY UNDERTAKE THAT:

1. THIS PROSPECTUS CONTAINS ALL INFORMATION WITH REGARD TO THE ISSUER AND THE ISSUE, WHICH IS MATERIAL IN THE CONTEXT OF THE ISSUE AND NOTHING HAS BEEN CONCEALED IN THIS RESPECT; 2. THE INFORMATION CONTAINED IN THIS PROSPECTUS IS TRUE AND CORRECT TO THE BEST OF OUR KNOWLEDGE AND BELIEF; 3. THE OPINIONS AND INTENTIONS EXPRESSED THEREIN ARE HONESTLY HELD; 4. THERE ARE NO OTHER FACTS, THE OMISSION OF WHICH MAKES THIS PROSPECTUS AS A WHOLE OR ANY PART THEREOF MISLEADING; 5. ALL REQUIREMENTS OF THE SECURITIES ACT, 2015, THE DISCOLSURES IN PUBLIC OFFERING REGULATIONS, 2017 FOR PREPARATION OF PROSPECTUS, RELATING TO APPROVAL AND DISCLOSURES HAVE BEEN FULFILLED; AND 6. NO CHARGES, FEE, EXPENSES, PAYMENTS ETC. HAVE BEEN COMMITTED TO BE PAID TO ANY PERSON IN RELATION TO THIS PUBLIC OFFERING EXCEPT FOR THOSE AS DISCLOSED IN PART 03 OF THE PROSPECTUS.

FOR AND BEHALF OF SONERI BANK LIMITED

-sd- -sd- ______MOHAMMAD AFTAB MANZOOR MIRZA ZAFAR BAIG PRESIDENT & CEO CHIEF FINANCIAL OFFICER

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GLOSSARY OF ABBREVIATIONS AND TECHNICAL TERMS

Additional Tier 1 Capital means the additional Tier 1 capital as Additional Tier 1 Capital defined in the Basel III Circular ALCO Asset Liability Management Committee Consultant to the Issue Next Capital Limited SNBL or the Bank or the Issuer Soneri Bank Limited For first profit payment, the Base Rate will be set one working day before the Issue Date and for subsequent profit payments, it will be Base Rate Setting Date set on semiannual basis, one working day prior to the commencement of the next semiannual period. Instructions for Basel III Implementation in Pakistan issued by the Basel III Circular State Bank of Pakistan under BPRD circular # 06 dated August 15, 2013 (as may be amended, modified or replaced from time to time) Board / BOD Board of Directors of the Bank CAGR Compounded Annual Growth Rate Capital Adequacy Ratio; the amount of risk-based capital (Tier 1 and CAR Tier 2) as a percentage of risk-weighted assets CDC The Central Depository Company of Pakistan Limited CDS Central Depository System Credit Rating Agency The Pakistan Credit Rating Agency Limited (“PACRA”) Common Equity Tier 1 as defined in chapter 2, section 2.1.1 of the CET 1 Basel III Circular As described thereto in Paragraph A-5-2 of Annexure 5 of the Basel CET 1 Trigger Event III Circular. The Issuer shall immediately notify the SBP upon the occurrence of the CET 1 Trigger Event Conditions The terms and conditions governing and regulating the TFCs CY Calendar Year DFI Development Financial Institutions EPS Earnings per Share FY Financial Year GOP Government of Pakistan The Investment Agreement entered into between each pre-IPO Investment Agreement Investor and the Issuer, prior to the Issue Date The date of closing of the subscription list for the public offering of Issue Date the TFCs, being the last date for subscription of the TFCs by potential investors/general public KIBOR Karachi Inter-Bank Offer Rate (Ask Side) Mark-up will only be paid from the Issuer’s current year’s earning and if the Issuer is in compliance of regulatory Minimum Capital Lock-in-Clause Requirement and Capital Adequacy Ratio requirements set by SBP from time to time Lock-in-Event Inability of the Issuer to comply with the Lock-in clause Mandatory conversion of the TFCs into ordinary shares in Mandatory Conversion accordance with the Trust Deed and upon the occurrence of a Mandatory Conversion Event

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Issuance of a written direction by the SBP to the Issuer to Mandatorily Convert the TFCs on account of: (i) a CET 1 Trigger Mandatory Conversion Event Event; (ii) the PONV Trigger Event; (iii) Lock-In Event or (iv) inability to exercise the non-cumulative feature Mandatory write-off (in whole or in part) of the Outstanding Face Mandatory Write-off Value of the TFCs in accordance with the Trust Deed and upon the occurrence of a Mandatory Write Off Event Mandatory Write-off Event will occur upon issuance of a written directive of the SBP requiring the Mandatory Write-Off of the TFCs on account of: (i) a PONV Trigger Event; (ii) a CET 1 Trigger Event; (iii) Mandatory Write-off Event upon the Issuer being unable to Mandatorily Convert the TFCs into Ordinary Shares upon occurrence of a CET 1 Trigger Event; (iv) Lock- in Event; or (v) inability to exercise non-cumulative feature Market Maker Next Capital Limited MCR Minimum Capital Requirement as prescribed by applicable laws NBFC Non-Banking Financial Company NII Net Interest Income NPLs Non-Performing Loans PSX Pakistan Stock Exchange PKR or Rs. Pakistani Rupee PONV Point of Non-Viability As described thereto in Paragraph A-5-3 of Annexure 5 of the Basel PONV Trigger Event III Circular. The SBP will have full discretion in declaring the PONV Trigger Event ROA Return on Assets ROE Return on Equity SBP State Bank of Pakistan SECP or the Commission Securities & Exchange Commission of Pakistan Fully paid up, rated, listed, perpetual, unsecured, subordinated, non- cumulative debt instruments in the nature of Term Finance TFC Certificates issued under Section 66 of the Companies Act, 2017 which will qualify as Additional Tier 1 Capital as outlined by SBP under the Basel III Circular Each person registered in the Register of TFC Holders as the holder of TFCs and the persons shown as the holders of the TFC Certificates in the records of the CDS, who shall be the beneficiaries under the TFC Holders / Certificate Trust Deed and will include the Pre-IPO investors who have entered Holders into an Investment Agreement and the general public who have subscribed to the TFCs. SNBL shall issue TFC Certificates to the successful allottees within 21 days of closure of the subscription list in compliance with the requirements of PSX. TFC Issue Issuance of TFCs of PKR 4,000 million The Tier 2 capital shall bear the meaning ascribed to it under the Tier 2 Capital Basel III Circular 1. Trust Deed Transaction Documents 2. The Investor Agreements; and 3. TFCs (when issued)

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The Amended and Restated Trust Deed executed between the Bank Trust Deed and the Trustee dated October 1, 2018 Trustee Pak Brunei Investment Company Limited Transfer Agent & Balloter THK Associates (Pvt.) Limited Transaction Legal Counsel or Mohsin Tayebaly & Co. MTC

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TABLE OF CONTENTS PAGE NO. PART 1: APPROVAL, CONSENTS AND LISTING ON THE STOCK EXCHANGE 09

PART 2: TFCS AND RELATED MATTERS 12

PART 3: UNDERWRITING, COMMISSIONS, BROKERAGE AND OTHER EXPENSES TO THE ISSUE 26

PART 4: HISTORY AND PROSPECTS 28

PART 5: FINANCIAL INFORMATION AND CREDIT RATING REPORT 45

PART 6: TRUSTEE AND SECURITY 82

PART 7: MANAGEMENT OF THE BANK 95

PART 8: MISCELLANEOUS INFORMATION 104

PART 9: APPLICATION AND ALLOTMENT INSTRUCTIONS 108

PART 10: SIGNATORIES TO THE PROSPECTUS 113

PART 11: MEMORANDUM OF ASSOCIATION 114

PART 12: APPLICATION FORM 118

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SUMMARY OF THE ISSUE

Issue Size : PKR 4,000 million

Pre-IPO Placement : PKR 3,600 million

Initial Public Offering (IPO) : PKR 400 million

The proceeds of Issue will contribute toward the Issuer’s Additional Tier I Purpose : Capital for capital adequacy ratio as per guidelines set by SBP The proceeds of the Issue will be utilized in the Issuer’s normal business Utilization of Proceeds : operations as permitted by its Memorandum & Articles of Association The TFCs will be offered in denominations of PKR 5,000/- or multiples Minimum Investment : thereof to the investors subject to a minimum Investment amount of PKR 5,000/- The date of closing of the subscription list for the public offering of the Issue Date : TFCs, being the last date for subscription of the TFCs by potential investors/general public

Tenor : Perpetual

Principal Redemptions : Not Applicable

The following markup rates & conditions will be applicable on the Issue:

i) During the period at the end of which SNBL is compliant with Capital Adequacy Ratio (“CAR”) and Minimum Capital (paid-up) Requirement Coupon Rate / Markup (“MCR”); 6-month KIBOR + 200 BPS (2%). : Rate ii)During the period at the end of which SNBL is CAR or MCR non- compliant or when the coupon payment at the end of that period may render it non-compliant with the CAR or MCR; 0% (i.e. no coupon payment will be made). Payable semi-annually in arrears on a non-cumulative basis on the outstanding principal amount of the Issue. The first such payment will be Coupon Payment Date : due six months from the Issue Date and subsequently every six months thereafter

Issue Price : Par (i.e. each TFC having a face value of PKR 5,000)

The TFC will be unsecured and subordinated to payment of principal and Security : profit of all other claims except ordinary shares

Transaction Legal Counsel : Mohsin Tayebaly & Co.

Listing : Pakistan Stock Exchange Limited

Long Term Rating: AA- (double A minus)* Short Term Rating: A1+ (A one plus)* Entity Rating :

*Rating issued by PACRA

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Instrument Rating : A (Single A) – Rated, assigned by PACRA

December 5, 2018 to December 6, 2018 (From: 9:00 am to 5:00 pm) (both Subscription Date : days Inclusive)

Risk Factors : For details please refer to Part 4.11 of the Prospectus

Trustee to the Issue : Pak Brunei Investment Company Limited

Muhammad Altaf Butt – Chief Compliance Officer Email: [email protected] Address: Central Office, Soneri Bank Limited, 10th Floor, PNSC Building, Compliance Officer : MT. Khan Road, Karachi Telephone: +92 (0213) 8900131 Fax: +92 (0213) 5643326 Pak China Investment Company Limited Underwriters to the Issue : PAIR Investment Company Limited

Market Maker : Next Capital Limited

1. Allied Bank Limited 2. Askari Bank Limited 3. Bank Alfalah Limited 4. Bank Al Habib Limited 5. Faysal Bank Limited Bankers to the Issue : 6. Habib Metropolitan Bank Limited 7. JS Bank Limited 8. MCB Bank Limited 9. Silk Bank Limited 10. Soneri Bank Limited 11. United Bank Limited The TFC will be inducted into the CDC, transfer shall be made in Transferability : accordance with the Central Depository Act, 1997 and CDC Regulations The TFC shall be subject to the laws of Islamic Republic of Pakistan and Governing Law : non-exclusive jurisdiction of the Pakistan Courts

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PART 1: APPROVAL, CONSENTS AND LISTING ON THE STOCK EXCHANGE

1.1. APPROVAL OF THE SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN

Approval of the Securities and Exchange Commission of Pakistan (the “Commission” or the “SECP”) as required under Section 87(2), read with Section 88(1) of the Securities Act, 2015 (the “Act”) has been obtained for the Issue, circulation and publication of this Prospectus.

DISCLAIMER:

IT MUST BE DISTINCTLY UNDERSTOOD THAT IN GIVING THIS APPROVAL, SECP DOES NOT TAKE ANY RESPONSIBILITY FOR THE FINANCIAL SOUNDNESS OF THE ISSUER AND ANY OF ITS SCHEMES STATED HEREIN OR FOR THE CORRECTNESS OF ANY OF THE STATEMENTS MADE OR OPINIONS EXPRESSED WITH REGARDS TO THEM BY THE ISSUER IN THIS PROSPECTUS.

SECP HAS NOT EVALUATED QUALITY OF THE ISSUE AND ITS APPROVAL FOR ISSUE, CIRCULATION AND PUBLICATION OF PROSPECTUS SHOULD NOT BE CONSIDERED AND CONSTRUED AS ANY COMMITMENT OF THE SAME. THE PUBLIC / INVESTORS SHOULD CONDUCT THEIR OWN INDEPENDENT DUE DILIGENCE AND ANALYSIS REGARDING THE QUALITY OF THE ISSUE BEFORE SUBSCRIBING.

1.2. APPROVAL OF THE PROSPECTUS BY THE PAKISTAN STOCK EXCHANGE

The Prospectus for the issue of fully paid-up, rated, listed, perpetual, unsecured, non-cumulative and subordinated debt instrument in the nature of Additional Tier 1 Term Finance Certificates (“TFC” or “TFCs”) has been approved by the Pakistan Stock Exchange Limited (“PSX") in accordance with the requirements of its Listing Regulations.

DISCLAIMER:

A) PSX HAS NOT EVALUATED THE QUALITY OF THE ISSUE AND ITS APPROVAL SHOULD NOT BE CONSIDERED AND CONSTRUED AS ANY COMMITMENT OF THE SAME. THE PUBLIC / INVESTORS SHOULD CONDUCT THEIR OWN INDEPENDENT INVESTIGATION AND ANALYSIS REGARDING THE QUALITY OF THE ISSUE BEFORE SUBSCRIBING.

B) THE PUBLICATION OF THIS DOCUMENT DOES NOT REPRESENT SOLICITATION BY PSX.

C) THE CONTENTS OF THIS DOCUMENT DO NOT CONSTITUTE AN INVITATION TO INVEST IN TFCS OR SUBSCRIBE FOR ANY SECURITIES OR OTHER FINANCIAL INSTRUMENT BY PSX, NOR SHOULD IT OR ANY PART OF IT FORM THE BASIS OF, OR BE RELIED UPON IN ANY CONNECTION WITH ANY CONTRACT OR COMMITMENT WHATSOEVER OF PSX.

D) IT IS CLARIFIED THAT INFORMATION IN THIS PROSPECTUS SHOULD NOT BE CONSTRUED AS ADVICE ON ANY PARTICULAR MATTER BY PSX AND MUST NOT BE TREATED AS A SUBSTITUTE FOR SPECIFIC ADVICE.

E) PSX DISCLAIMS ANY LIABILITY WHATSOEVER FOR ANY LOSS HOWSOEVER ARISING FROM OR IN RELIANCE UPON THIS DOCUMENT TO ANY ONE, ARISING FROM ANY REASON, INCLUDING, BUT NOT LIMITED TO, INACCURACIES, INCOMPLETENESS, AND/OR MISTAKES, FOR DECISION AND/OR ACTIONS TAKEN BASED ON THIS DOCUMENT.

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F) PSX NEITHER TAKES RESPONSIBILITY FOR THE CORRECTNESS OF CONTENTS OF THIS DOCUMENT NOR THE ABILITY OF THE ISSUER TO FULFIL ITS OBLIGATIONS THERE UNDER.

1.3. APPROVAL FROM STATE BANK OF PAKISTAN

In-principle Approval

In-principle approval of the State Bank of Pakistan (“SBP”) has been obtained vide SBP’s letter No. BPRD/BA&CP/647/8142/2018 dated April 13, 2018, for the issuance of unsecured, subordinated, perpetual, non-cumulative Term Finance Certificates (“TFC”) of PKR 4,000 million, subject to compliance of relevant laws and regulations. State Bank of Pakistan has granted in-principle approval for the issuance of the captioned Term Finance Certificates (TFCs) of PKR 4 Billion as eligible for Additional Tier 1 capital subject to following conditions:

a. The subject TFCs will not be eligible for Minimum Paid up Capital Requirements (net of losses) – MCR, as determined by SBP from time to time. b. In case of public offering, the instrument needs to be rated. c. The bank shall submit its shareholder’s approval by March 31, 2019. This approval should cover the maximum number of common shares that can be issued upon the conversion of these TFCs at the Point of Non – viability (PONV), pricing formula etc. in line with the SBP approved term sheet and requirements of BPRD circular no. 6 of 2013. Failure to submit this approval within due date will render the subject instrument ineligible as additional tier-1 (ADT-1) capital for CAR purposes. d. The bank shall increase the level of its existing authorized capital by March 30, 2019 to facilitate the issuance of new common shares due to conversion of these TFCs at PONV. Moreover, the bank shall also submit an undertaking to the effect that it will, at all times maintain sufficient cushion in the authorized capital at least equal to the “cap on the maximum number of common shares to be issued at PONV or CET-1 trigger event”. e. After completion of all other legal and regulatory formalities, the bank will approach SBP for final approval to issue the subject TFCs. f. Ensure, at all times, compliance with the applicable laws, rules and regulations including BPRD Circular No. 6 of 2013.

Moreover, the Bank has been given relaxation by SBP from obtaining prior approval of SECP for conversion of TFCs into common shares (as contained in A-5-3 (viii) of BPRD Circular # 6 of 2013) and the same shall be provided on a post facto basis. However, the bank shall submit an undertaking that it has fulfilled all other preconditions (except SECP’s approval) necessary for conversion of these TFCs at the PONV.

It may be noted that SBP’s in-principle approval to treat the proposed TFCs as Additional Tier-1 capital cannot be construed as ratification of economic risk and legal aspects of the proposed TFCs that are the sole responsibility of the bank’s management and board of directors.

Final Approval

Final approval vide SBP letter No. BPRD/BA&CP/647/14692/2018 dated July 09, 2018 has been obtained for the issuance of unsecured, subordinated, perpetual and non-cumulative Term Finance Certificates (“TFC”) of PKR 4,000 million, and recognition of the same as ADT1 eligible capital subject to compliance with BPRD Circular No.6 of 2013 and all other relevant laws, rules and regulations.

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The bank is required to submit a report to Banking Policy and Regulations Department of SBP, covering the details of subject TFCs including the names of investors and relevant amount of investment etc., along with a copy of the offering document, within one month from the date of issue.

Moreover, the Bank shall ensure to meet the timelines for providing the “shareholder’s due approval” and “increasing the authorized capital” as conveyed in SBP’s in-principle approval.

It may be noted that SBP’s final approval to treat the proposed TFCs as Additional Tier-1 capital cannot be construed as ratification of economic risk and legal aspects of the proposed TFCs that are the sole responsibility of the bank’s management and board of directors.

1.4. FILING OF PROSPECTUS AND OTHER DOCUMENTS WITH THE REGISTRAR OF COMPANIES

SNBL has delivered to the Registrar of Companies as required under Sections 57 (1) of the Act, a copy of this Prospectus signed by all the Directors of SNBL.

1.5. LISTING AT PSX

Application has been submitted by the Issuer to PSX for listing of the TFCs.

If for any reason the application for formal listing is not accepted by PSX or approval for formal listing is not granted by PSX before the expiration of twenty-one days from the date of closing of the subscription period / list or such longer period not exceeding forty-two days as may, within the said twenty-one days, be notified to the applicants for permission by the PSX, the Issuer undertakes that a notice to that effect will immediately be published in the press and will refund subscription money to the applicants without surcharge as required under the provisions of Section 69 of the Companies Act, subject to approval of the State Bank of Pakistan (if applicable/required).

However, and, if any such money is not repaid within eight (08) days after the Bank becomes liable to repay it, the Directors of the Bank shall be jointly and severally liable to repay that money from the expiration of the eighth day together with surcharge at the rate of two per cent (2.00%) for every month or part thereof from the expiration of the eight day and, in addition, shall be liable to a penalty of level 3 on the standard scale in accordance with the provisions of sub-section (2) of Section 69 of the Companies Act.

As required under sub-section (3) of Section 69 of the Companies Act, the subscription money, shall be deposited and kept in a separate bank account in a scheduled bank so long as the Bank may become liable to repay it under sub-section (2) of Section 69 of the Companies Act.

1.6. COMPLIANCE OFFICER

Muhammad Altaf Butt – Chief Compliance Officer Email: [email protected] Address: Central Office, Soneri Bank Limited, 10th Floor, PNSC Building, MT. Khan Road, Karachi Telephone: +92 (0213) 8900131 Fax: +92 (0213) 5643326

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PART 2: TFCS AND RELATED MATTERS

2.1. THE ISSUE

SNBL is issuing the TFCs under the Basel III Circular in the aggregate amount of PKR 4,000 million. The TFCs will be fully paid-up, rated, listed, unsecured, perpetual and non-cumulative. The TFCs will be subordinated to the payment of principal and profit, to all other indebtedness of the Bank, including deposits. The instrument is rated A (Single A) by PACRA. The total issue size of the TFCs is PKR 4,000 million and will be offered in denominations of PKR 5,000/- (Pakistani Rupees Five Thousand Only) or in multiples thereof to the investors subject to a minimum investment amount of PKR 5,000/- (Pakistani Rupees Five Thousand Only). Out of the total Issue size of PKR 4,000 million, PKR 3,600 million is being issued to Pre-IPO investors while PKR 400 million is being offered to the general public via this prospectus. Break-up of pre-IPO placement is provided in para 2.8 below.

The TFCs have a floating rate coupon priced with a spread of 200 bps over 6-month KIBOR with no floor or cap. For the first profit payment, the Base Rate will be set using the 6-month KIBOR (Ask side), one (1) working day prior to the Issue Date and for subsequent profit payments, it will be set on semi-annual basis, i.e., one (1) working day prior to each subsequent profit payment date. Profit will be payable semi- annually in arrears calculated on a 365-day year basis on the outstanding principal amount. The first such profit payment will fall due six (6) months from the Issue Date and subsequently every six months thereafter, subject to the Bank meeting regulatory requirements as prescribed by the SBP. To bring Pre- IPO and IPO investors at par before credit of TFCs, profit for the interim period (i.e. from the disbursement of funds by the Pre-IPO investors until the day before Issue Date) will be paid separately to the Pre-IPO investors.

The TFCs may be called with the prior written approval of SBP, starting from and including the fifth anniversary of the Issue Date (refer to section 2.2), subject to not less than 60 calendar days’ prior notice being given to the TFC Holders through the Trustee. The Call Option, once announced, will be irrevocable. No Put Option shall be available to the TFC Holders.

The TFCs shall be subject to a standard lock-in clause (refer to section 2.2) which would mean that coupon / markup may not be paid if such payments would result in shortfall in the Bank’s MCR or CAR or increase any existing shortfall in MCR and CAR as mandated by the SBP. The TFCs will also be subject to a standard loss absorbency clause (refer to section 2.2) under the Basel III Circular and/or any other requirements that the SBP may introduce.

2.2. TERM SHEET Issuer Soneri Bank Limited (“SNBL” or the “Issuer”) Issuer Rating Long Term Rating: AA- (double A minus)* Short Term Rating: A1+ (A one plus)*

*Rating issued by PACRA Issue Summary Unsecured, Subordinated, Rated, Listed, Perpetual, Non-Cumulative and Contingent Convertible Term Finance Certificates (“TFCs” or the “Issue” or the “Instrument”) issued as an instrument of redeemable capital under Section 66(1) of the Companies Act, 2017 and as outlined by State Bank of Pakistan (“SBP”) under BPRD Circular No. 6 dated August 15, 2013 (“Circular”). Rating of Issue A (Single A) – Rated issued by PACRA Face Value of Issue PKR 4,000,000,000/- (Pak Rupees Four Billion Only)

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Purpose & Utilization of The amount raised through this Issue, subject to necessary corporate Funds and regulatory approvals, will contribute towards SNBL’s Additional Tier 1 Capital in accordance with SBP guidelines on capital adequacy. Furthermore, the amount raised will be utilized in SNBL’s normal business operations as permitted under its Memorandum & Articles of Association. Tenor The instrument will be Perpetual in nature with no fixed redemption date. Issue Date The date of closing of the subscription list for Public Offering of the TFCs, being the last date for subscription by potential investors as specified in the Prospectus for the Public Offering Target Market The TFCs will be offered to the general public including retail and institutional investors Minimum Investment PKR 5,000/- (Pak Rupees Five Thousand Only) Base Rate 6 months Karachi Inter Bank Offer Rate (“KIBOR”). For the first profit payment, the Base Rate will be set one working day before the Issue Date and for subsequent profit payments, it will be set on a semiannual basis, one working day prior to the commencement of the next semiannual period. Profit Rate The following profit rates & conditions will be applicable on the Issue: i) During the period at the end of which SNBL is compliant with Capital Adequacy Ratio (“CAR”) and Minimum Capital (paid- up) Requirement (“MCR”); 6-month KIBOR + 200 BPS (2%). ii) During the period at the end of which SNBL is CAR or MCR non-compliant or when the profit payment at the end of that period may render it non-compliant with the CAR or MCR; 0% (i.e. no profit payment will be made).

Profit Payment Frequency, Frequency Available Discretions & Payable semi-annually in arrears on a non-cumulative basis on the Lock-in Clause outstanding principal amount of the Issue. The first such payment will be due six months from the Issue Date and subsequently every six months thereafter.

Discretions Profit payments will only be paid from SNBL’s most recent / current year’s earning on a non-cumulative basis subject to the SNBL’s compliance with SBP regulatory guidelines on Minimum Capital Requirement (“MCR”) and Capital Adequacy Ratio (“CAR”). SNBL will have full discretion over the amount (in whole or in part) and the timing of Profit payments, and as such a waiver or cancellation of any due Profit or other payment will not constitute an event of default. Furthermore, upon waiver or cancellation of Profit payments, SNBL’s obligations under the Issue shall cease to exist and SNBL will have no obligation to make any further payments in actual or in kind.

Lock-in Clause Profit payments will be subject to the condition that such payments will not result in a breach of SNBL’s MCR or CAR requirements as regulated by SBP and as per Clause iii(g) of Annexure 2 of the Circular. Any inability to exercise the lock-in clause or the non-

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cumulative feature will subject these TFCs to mandatory conversion into common shares / write-off at the discretion of SBP. Consultant to the Issue Next Capital Limited Market Maker to the Issue Next Capital Limited Trustee to the Issue Pak Brunei Investment Company Limited Legal Counsel Mohsin Tayebaly & Co. Call Option SNBL may call the TFCs (either partially or in full), after five (5) years from the date of issuance with the prior approval of SBP. Moreover, and as per Clause iv(b) of Annexure 2 of the Basel III Circular, the Issuer shall not exercise a call option unless the called instrument is replaced with capital of same or better quality. The Call must be subject to a prior notice of not less than 60 days given by SNBL to the investors. The Call Option once announced will not be revocable. Collateralization of The Issue will be unsecured and subordinated to payment of principal Issue/Security and profit of all other claims except ordinary shares. Loss Absorption at The Instrument will be subject to loss absorption upon the occurrence Pre-Specified Trigger of a Pre-Specified Trigger (“PST”) as per section A-5-2 of Annexure 5 of the Circular, which stipulates that if an Issuer’s Common Equity Tier 1 (“CET 1”) ratio falls to or below 6.625% of Risk Weighted Assets (“RWA”), the Issuer will have full discretion to determine the amount of TFCs to be permanently converted into common shares or written off, subject to SBP regulations / instructions, and the cap specified below. SNBL will be able to exercise this discretion subject to the following conditions: (a) If and when SNBL’s CET 1 reaches the loss absorption trigger point, the aggregate amount of Additional Tier-1 capital to be converted must at least be the amount sufficient to immediately return the CET 1 ratio to above 6.625% of total RWA (if possible). (b) The converted amount should not exceed the amount needed to bring the CET 1 ratio to 8.5% of RWA (i.e. minimum CET 1 of 6.0% plus capital conservation buffer of 2.5%). (c) In case, conversion of Additional Tier-1 capital instrument is not possible following the trigger event, the amount of the instrument must be written off in the accounts resulting in increase in CET 1 of the Issuer.

In the event that the Additional Tier-1 capital instrument includes a write-off provision, section A-5-2 (vi) of Annexure-5 of the Circular requires that: (a) The claim of the instrument on liquidation of the Issuer is reduced to (or below) the value of the written-off instrument. (b) The amount of the instrument to be paid in case of a call is reduced by the written-off amount of the instrument. (c) The distributions (dividends/ profit) payable on the instrument will be permanently reduced. Loss Absorption Features at The Instrument will be subject to loss absorption and / or any other Point of Non-Viability requirements of SBP upon the occurrence of a Point of Non-Viability (“PONV”) event as per section A-5-3(i) of Annexure 5 of the Circular, which stipulates that SBP may, at its option, fully and permanently convert the TFCs into common shares of the Issuer and / or have them

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immediately written off (either partially or in full). Number of shares to be issued to TFC holders at the time of conversion will be equal to the ‘Outstanding Face Value of the TFCs’ divided by market value per share of the Issuer’s common / ordinary share on the date of the PONV trigger event as declared by SBP, subject to the cap specified below. The PONV trigger event is the earlier of: (a) A decision made by SBP that a conversion or temporary / permanent write-off is necessary without which the Issuer would become non-viable. (b) The decision to make a public-sector injection of capital, or equivalent support, without which the Issuer would have become non-viable, as determined by SBP. Cap on Conversion of Issue The maximum number of shares to be issued to TFC holders at the into Ordinary Shares Pre-Specified Trigger and / or Point of Non-Viability (or otherwise as directed by SBP) will be 360 million ordinary shares. The number of ordinary shares issued to Investors at the time of conversion will be determined through the following formula: ‘Outstanding Face Value of the TFCs’ divided by market value per ordinary share of SNBL on the date of trigger at the Pre-Specified Trigger and / or Point of Non-Viability (or otherwise as directed by SBP). Conversion Events Conversion Event includes each of the following events:

• Where all or part of the TFCs are subject to a mandatory conversion into common shares at the discretion of SBP in case of the Issuer’s inability to exercise the lock-in clause; • Where all or part of the TFCs are subject to a mandatory conversion into common shares at the discretion of SBP in case of the Issuer’s inability to exercise the non-cumulative feature; • Where all or part of the TFCs are converted into common shares upon the declaration by the SBP of the occurrence of a Point of Non-Viability event; or • Where all or part of the TFCs are converted into common shares by the Issuer upon the occurrence of a Pre-Specified Trigger Event. Write-off Provisions Issuance of a written direction of the SBP requiring the Mandatory Write-Off of the TFCs on account of: (i) a PONV Trigger Event; (ii) a CET 1 Trigger Event; (iii) upon the Issuer being unable to Mandatorily Convert the TFCs into Ordinary Shares upon occurrence of a CET 1 Trigger Event; (iv) Lock-in Event; or (v) inability to exercise non- cumulative feature Applicable Taxes, Duties, Payable as per applicable provincial and or federal laws and Zakat regulations. Other Conditions Dividend Stopper SNBL will not make any dividend payments on equity / ordinary shares in the event of a non-payment of mark-up on the TFCs.

Discretion on Coupon / Profit Payments In the event that the Bank determines that it shall not make payment of the expected Profit Payment Amount to the TFC Holders, the Bank shall notify the Trustee of the same within 21 (twenty-one) days of such determination being finalized, including the amount that shall

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not be paid.

Put Option Not available to investors / holders of Issue i.e. the TFC holders shall have no put option.

Call Option No redemption shall be allowed in the first five years of issuance i.e. after five years, the Issuer can call the TFCs. However, any repayment of principle must be with the explicit approval of SBP, and SNBL must not create market expectation that supervisory approval will be granted. Additionally, any call premium (when the Issue is redeemed) is not allowed. SNBL will also have to demonstrate that capital position is in compliance with the minimum capital requirement after the call is exercised.

Related Party Neither SNBL nor a related party over which SNBL exercises control or significant influence should purchase the Instrument/TFCs, nor should SNBL directly or indirectly have funded the purchase of the Instrument/TFCs. SNBL will not be allowed to grant advances against the security of the capital instruments/TFC issued by it.

Recapitalization The Instrument/TFC should not have any features that hinder recapitalization, such as provisions that require the Issuer to compensate investors if a new instrument is issued at a lower price during a specified time frame. Governing Law The Issue will be governed by and construed in accordance with the laws of the Islamic Republic of Pakistan and exclusive jurisdiction of the competent courts in Karachi.

2.3. DISCRETION FOR PAYMENT / NON-PAYMENT OF PROFIT

In accordance with the terms of the Basel III Circular issued by SBP, the Bank will have discretion to cancel (in whole or in part) any scheduled profit payment and such cancellation shall be deemed to be a waiver by the TFC Holders of their right to receive any scheduled profit payment. Cancellation by the Bank of any scheduled profit payment will not constitute an event of default. On cancellation of the payment of mark-up, the Bank’s obligation to pay mark-up on the TFCs shall stand extinguished and the Bank shall have no obligation to make distributions/payments in kind.

2.4. CONVERSION MECHANISM

In conformity with Basel III Circular, the TFCs shall, if directed by the SBP, be permanently converted into ordinary shares upon: (i) CET 1 Trigger Event; (ii) PONV Trigger Event; (iii) the Lock-In Event; or (iv) Inability to exercise Non-cumulative feature.

In the case of CET 1 Trigger Event, the Issuer will have full discretion to determine the amount of TFCs to be converted into ordinary shares, which amount shall at least be the amount required to immediately return the Issuer’s CET 1 ratio to above the CET 1 Trigger Event but will not exceed the amount required to bring the CET 1 ratio to 8.5% of RWA.

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In the case of a PONV Trigger Event or Lock-In Event, the amount of TFCs to be converted will be determined by the SBP in its sole discretion.

The number of shares to be issued to TFC Holders at the time of conversion will be equal to the ‘Outstanding Face Value of the TFCs’ divided by market value per share of the Issuer’s ordinary share on the date of trigger of the PONV event, occurrence of the Pre-Specified Trigger Point or Lock-in Event as declared by SBP, subject to a maximum of 360,000,000 ordinary shares to be issued. The maximum number of shares will not be adjusted on account of any further issue of capital, stock splits, stock dividends or similar corporate actions. As on November 20, 2018 market closing price of the ordinary share of the Bank was Rs. 12.40/-.

In the event of conversion of the TFCs into common shares by SBP, any person consequently holding 5% (five percent) or more of the paid-up share capital of the Issuer will be required to comply with the fit and proper criteria of SBP.

The Bank shall, in accordance with directions of the SBP, procure all approvals to enable conversion of the TFCs into ordinary shares, including approvals in relation to the increase in authorized capital of the Issuer (to the extent necessary).

The Bank has already obtained approval of the shareholders of the Bank for the conversion of TFCs on October 26, 2018 while an application has been filed with the Securities and Exchange Commission of Pakistan for obtaining approval under section 83(1)(b) of the Companies Act, 2017.

2.5. MINIMUM CAPITAL REQUIREMENT

The SBP through its BSD Circular No.07 of 2009 dated April 15, 2009 requires the minimum paid up capital (net of losses) for all locally incorporated Banks to be raised to PKR 10 billion in a phased manner from the financial year December 2013 onwards. The paid-up capital of the Bank for the period ended June 30, 2018 stood at PKR 11.025 billion and is in compliance with the SBP requirement.

2.6. CAR REQUIREMENT

The Capital Adequacy Ratio (CAR) of the Bank is subject to the Basel III capital adequacy guidelines stipulated by the SBP through its Basel III Circular. These instructions are effective from December 31, 2013 in a phased manner with full implementation intended by December 31, 2019. Under Basel III guidelines, Banks are required to maintain the following ratios on an ongoing basis: 2013 2014 2015 2016 2017 2018 2019 & onwards CAR Requirement 10.0% 10.0% 10.25% 10.65% 11.275% 11.90% 12.50%

As of December 31, 2017, SNBL’s CAR was 12.77% while CAR of the Bank as of June 30, 2018 is at 12.50% which is compliant against the SBP minimum requirement of 11.275% to be met as of December 31, 2017.

2.7. MODE OF PAYMENT

The payment of profit shall be credited in TFC Holders’ bank accounts electronically on semi-annual basis. The applicants, therefore, must provide their International Bank Account Number (IBAN) in the TFCs Subscription Form.

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2.8. PRE-IPO INVESTORS

The Pre-IPO portion for the TFCs closed at PKR 3,600 million out of the total issue size of PKR 4 billion and the disbursement of Pre-IPO portion was completed on November 01, 2018. The list of investors in the Pre-IPO portion along with their respective investment amount is below: Soneri Bank Tier 1 TFC – Pre-IPO Investors List Serial # Investor Name Pre-IPO Participation (PKR) 01 Askari General Insurance Company Limited 10,000,000 02 Bank Alfalah Limited 100,000,000 03 Bank Al-Habib Limited 300,000,000 04 The Bank of Khyber 500,000,000 05 Century Insurance Company Limited 20,000,000 06 EFU Life Assurance Limited 50,000,000 07 Habib Bank Limited 300,000,000 08 Habib Metropolitan Bank Limited 100,000,000 09 IGI Life Insurance Limited 50,000,000 10 Jubilee Life Insurance Company Limited 320,000,000 11 Khushhali Microfinance Bank Limited 100,000,000 12 National Bank of Pakistan 400,000,000 13 Pak Brunei Investment Company Limited* 100,000,000 14 Pak China Investment Company Limited 200,000,000 15 Pak Libya Holding Company (Pvt.) Limited 300,000,000 16 United Bank Limited 250,000,000 17 Karandaaz Pakistan 500,000,000 Total 3,600,000,000 All the Pre-IPO investors have signed the Investor Agreements for the above-mentioned participation amount.

*Pak Brunei is also acting as the Trustee to the Issue. As per regulation 13 (ii) of the Debt Securities Trustees Regulations, 2017, the trustee shall not invest more than ten percent (10%) of the total issue size where it is acting as debt securities trustee. Pak Brunei is in compliance with the referred regulation as it has made an investment of only two and a half percent (2.5%) of the total Issue size.

2.9. OPENING AND CLOSING OF SUBSCRIPTION LIST

The subscription list will open at the commencement of the banking hours on December 5, 2018 and close at the end of banking hours on December 6, 2018.

2.10. PUBLIC SUBSCRIPTION THROUGH E-IPO

E-IPO is submission of application for subscription of securities electronically through internet, Automated Teller Machines (ATM) and mobile phones. In order to facilitate the public during IPOs, SECP has introduced the concept of e-IPO. The following two systems are available for e-IPOs: i. Centralized e-IPO System (CES):

In order to facilitate investors, CDC in collaboration with 1Link (G) Limited (1Link) has developed a Centralized e-IPO System (“CES”) through which applications for subscription of securities offered to the general public can be made electronically. CES has been made available in this Initial Public Offering (IPO) and can be accessed through the web link www.cdceipo.com. Payment of subscription money can be made through 1LINK’s member banks available for CES, list of which is available on above website.

For making application though CES, investors must be registered with CES. Registration with CES is one- time activity, free of cost and can be done under a self-registration process by filling the CES registration

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form, which is available 24/7 all around the year. Investors who have valid Computerized National Identity Card (CNIC), bank account with any of the commercial bank, email address, mobile phone number and CDS Account (Investor account or sub account) can register themselves with CES.

Investors who do not have CDS account can visit www.cdcpakistan.com for information regarding opening CDS account.

For further guidance and queries regarding CES and opening of CDS account, investors may contact CDC at phone number: 0800 – 23275 (CDCPL) and e-mail: [email protected] or Mr. Farooq Ahmed Butt at Phone 021-34326030 and email: [email protected].

Investors who are registered with CES can submit their applications through the web link www.cdceipo.com24 hours a day during the subscription period which will close at midnight on December 6, 2018. ii. E-IPO Facilities by Bankers to the Issue:

Currently, United Bank Limited (UBL) and Bank Alfalah (BAFL) are providing e-IPO facilities to their respective accountholders.

UBL account holders can use UBL Net Banking to submit their application via link http://www.ubldirect.com/corporate/ebank and BAFL account holders can use BAFL Net Banking to submit their application via link: https://netbanking.bankalfalah.com

2.11. BENEFITS OF E-IPO

E-IPO has the following benefits: 1. It enables the investors to make application for subscription of securities including TFCs through the internet without going to the bank and waiting in long queues; 2. It is efficient and simultaneously facilitative for both the Issuer and the investors; 3. It is available for use 24 hours during the subscription period; and 4. If you are registered with CES or accountholder of a bank providing e-IPO facility, you may get SMS for new IPOs.

By applying through CES you can also track your application status.

2.12. INVESTORS ELIGIBILITY

1. Pakistani citizens resident in Pakistan 2. Pakistani citizens residing outside Pakistan 3. Persons holding two nationalities including Pakistani nationality 4. Foreign nationals whether living in or outside Pakistan 5. Companies, bodies corporate or other legal entities incorporated or established in or outside Pakistan (to the extent permitted by their constitutive documents and existing regulations, as the case may be) 6. Mutual funds, provident/pension/gratuity funds/trusts (subject to the terms of their trust deeds and existing regulations; and 7. Branches in Pakistan of companies and bodies corporate incorporated outside Pakistan

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2.13. FACILITIES AVAILABLE TO FOREIGN/NON-RESIDENT PAKISTANI INVESTORS

Companies are permitted under paragraph 6 (with specific reference to sub para (B) (VIII)) of Chapter 20 of the State Bank of Pakistan’s (“SBP”) Foreign Exchange Manual (the “Manual”) to issue TFCs on repatriation basis to non-residents who are covered under paragraph 6 (A) of Chapter 20 of the Manual, i.e. (I) A Pakistan national resident outside Pakistan, (II) A person who holds dual nationality including Pakistan nationality, whether living in or outside Pakistan, (III) A foreign national, whether living in or outside Pakistan and (IV) A firm (including a partnership) or trust or mutual fund registered and functioning outside Pakistan, excluding entities owned or controlled by a foreign government, provided the issue price, is paid in foreign exchange through normal banking channel by remittance from abroad or out of foreign currency account maintained by the subscriber/purchaser in Pakistan.

Non-residents who wish to subscribe TFCs out of the general public portion may contact any of the bankers to the issue (retail portion) for taking instructions regarding payment of subscription money against TFCs offered to general public / retail investors. List of bankers to the issue for retail portion is available on page 1 and para 8.7 of this Prospectus.

The TFCs issued to non-resident investors shall be intimated by the Bank to the designated Authorized Dealer, along with the documents prescribed in the Manual within 30 days of issue.

Non-residents who are covered under paragraph 6 (A) of Chapter 20 of the Manual do not require SBP’s approval to invest in the TFCs being issued in terms of this Prospectus. Furthermore, under paragraph 7(vii)of Chapter 20 of the Manual the Authorized Dealer shall allow repatriation of profit, net of applicable taxes and proceeds on sale of listed TFCs (i.e. divestment proceeds) not exceeding the market value less brokerage/commission on provision of prescribed documents.

Payments made by non-residents shall be supported by proof of receipt of foreign currency through normal banking channels. Such proof shall be submitted along with the Application by the non-residents.

2.14. MINIMUM AMOUNT OF APPLICATION AND BASIS OF ALLOTMENT OF TFCS

The basis and conditions of allotment shall be as follows: a) Face value of the TFC is PKR 5,000/-. b) The minimum amount of application for subscription of TFCs is PKR. 5,000/-. c) Applications for TFCs below the aggregate face value of PKR. 5,000/- shall not be entertained. d) Applications for TFCs by the general public, including institutions and individuals, must be for a minimum of the aggregate face value of PKR. 5,000/- or in multiples thereof. e) If the TFCs to be issued to the general public are sufficient for the purpose, all applications shall be accommodated. f) If the issue is oversubscribed in terms of amount, then all applications shall be accommodated initially for TFCs of face value of PKR 5,000/- each and the balance TFCs shall be allotted on pro- rata basis to all applicants who applied for TFCs in multiple of PKR. 5,000/-. g) If the issue is over-subscribed in terms of number of applications and the amount, the TFCs shall be allotted through computer balloting in the presence of representatives of PSX. h) Allotment of TFCs shall be subject to scrutiny of applications for subscription.

2.15. REFUND OF MONEY TO UNSUCCESSFUL APPLICANTS

SNBL shall take a decision within ten (10) days of the closure of subscription list as to which applications have been accepted or are successful and refund the money in cases of unaccepted or unsuccessful

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applications within ten (10) days of the date of such decision as required under regulation 5B 4.19 read with regulation 5B4.20 of the PSX Rule Book.

As per sub-section (2) of Section 68 of the Companies Act, 2017, if a refund is not made within the time specified therein, the Directors of the Company shall be jointly and severally liable to repay the money with surcharge at the rate of 2.00%, for every month or part thereof from the expiration of the 15th day and, in addition, shall be liable to a penalty of level 3 on the standard scale.

2.16. MINIMUM SUBSCRIPTION

The minimum amount of subscription on which the Directors will proceed to allot TFCs is the full amount of the Issue i.e. PKR 4,000 million.

2.17. ISSUE AND CREDIT OF TFCS

SNBL shall credit TFCs to the successful allottees within twenty-one (21) days of closure of subscription list in compliance with the requirements of PSX. TFCs will be issued only in the Book-Entry Form through credit in their CDS Accounts. The applicants, therefore, must provide their CDS Account Number (Investor Account Number or Sub-Account Number) in the TFCs Subscription Form.

The TFCs issued shall be subject to the terms & conditions for the issuance of the TFCs specified in the Amended and Restated Trust Deed dated October 1, 2018.

If the Bank defaults on complying with the requirements of the Listing Regulations, it will pay to PSX a penalty of PKR. 5,000/- per day during which the default continues. PSX may also notify the fact of such default and the name of the Bank by notice and also by publication, in the Daily Quotations.

2.18. REDEMPTION RESERVE

No redemption reserve is being created for redemption of TFCs as the instrument is perpetual in nature.

2.19. DEDUCTION OF ZAKAT

Zakat is deductible in case of the TFC being held by Muslim citizens of Pakistan, except where a statutory declaration of exemption is filed, and in case of certain non-corporate entities such as Trusts, Funds, etc. (subject to being qualified for non-deduction of Zakat under the Zakat and Ushr Ordinance, 1980). Zakat is withheld at 2.5% of the redeemed principal amount.

2.20. INCOME TAX

Any income derived from investment in TFCs shall be subject to income tax as per the Income Tax Ordinance, 2001. Withholding tax, as specified in Part III Division IA of the First Schedule of the said ordinance shall be deemed to be the final discharge of tax liability on the profit arising to a tax payer other than a company under subsection 3(a) of section 151 of the Income Tax Ordinance, 2001.

2.21. DEDUCTION OF WITHHOLDING TAX

Profit or markup paid to TFC Holders will be subject to withholding tax under section 151 of the Income Tax Ordinance, 2001 specified in Part III Division IA of the First Schedule of the said Ordinance or any time to time amendments therein. The rate of tax to be deducted shall be:

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(a) For filer of Income Tax Returns: 10.00 % (b) For non‐filer of Income Tax Return: 17.5%

Provided that for a non-filer, if the profit or markup paid is rupees five hundred thousand or less, the rate shall be 10%.

2.22. CAPITAL GAINS

Any capital gain derived from the sale of TFCs shall be subject to capital gain tax as per section 37A of the Income Tax Ordinance, 2001. Applicable Capital Gain Tax Rates for FY19 are as follows:

(a) For filers: 15.0% (b) For non‐filers: 20.0%

2.23. MARKET MAKING

Next Capital Limited will act as Market Maker for the TFCs. The Market Maker will at all times hold at least one percent (1%) of the IPO portion of the TFCs only.

The Market Maker shall mandatorily make available two-way quotes on daily basis with a maximum spread of 7.5% till complete redemption of the TFCs.

The Market Maker shall be bound to purchase or sale a maximum of two and a half percent (2.5%) of the IPO portion of the TFCs during a trading day, provided that at any given time the Market Maker shall not hold more than two and a half percent (2.5%) of the IPO portion of TFCs on its books as inventory.

The Market Maker will be obligated to replenish its orders/quotes within 90 seconds following full execution, withdrawal, expiration or any change in the price of either bid or offer.

The Market Making Orders/Quotes are to be maintained on both sides during Market Making period as per Market Making agreement which shall be for the tenure of the Debt Security.

The Market Maker shall be allowed to Blank Sale in Debt Security subject to sufficient pre-existing interest at the end of each Blank Sale day to validate that the Market Maker can deliver the quantity sold blank during the trading day.

Market Marker shall make available copy of the Prospectus to the investors at all times.

2.24. DISCLOSURE OF DEFERRED TAXATION

Deferred tax is recognised using the balance sheet liability method on all temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and amounts used for the taxation purposes. Deferred tax is calculated at the rates that are expected to apply to the period when the differences are expected to reverse based on tax rates that have been enacted or substantively enacted by the reporting date. A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available, against which the asset can be utilised. The carrying amount of deferred tax asset is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the deferred tax asset to be utilised.

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The Bank also recognises deferred tax asset / liability on deficit / surplus on revaluation of operating fixed assets and securities which is adjusted against the related deficit / surplus in accordance with the requirements of International Accounting Standard (IAS) 12, ‘Income Taxes’. The balance of deferred tax liability (net) as of June 30, 2018 was PKR 627.8 million.

2.25. TFCS ISSUED IN PRECEEDING YEARS

Previous Amount Issue Maturity Tenor Markup Type Security Rating Outstanding Issue TFCs (PKR Date Date Amount mn) (PKR mn) Tier-II TFC 3,000 08, 07, July 8 6MK + Listed, Unsecured A+ 3,000 July 2023 years 1.35% Subordinated, 2015 Debt Security

2.26. INTEREST OF PRE-IPO INVESTORS

Except as provided below, the Pre-IPO Investors only have interest in this TFC as TFC holders:

• Pak Brunei Investment Company Limited is also acting in the capacity of Trustee to the TFC in addition to being an investor in the Pre-IPO portion; • Bank Alfalah Limited, Bank Al Habib Limited, Habib Metropolitan Bank Limited and United Bank Limited are acting as Bankers to the Issue for the TFC and have also participated in the Pre-IPO portion; and • Pak China Investment Company Limited has underwritten 50% of the IPO portion and has also participated in the Pre-IPO portion.

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2.27. STATEMENT BY THE ISSUER

The General Manager Pakistan Stock Exchange Limited Stock Exchange Limited Stock Exchange Road Karachi

On behalf of Soneri Bank Limited, (“SNBL” or the “Bank”), we hereby confirm that all material information as required under the Securities Act, 2015, the Public Offering Regulations, 2017 and the Listing of Companies and Securities Regulations of the Pakistan Stock Exchange Limited has been disclosed in the Prospectus and that whatever is stated in Prospectus and the supporting documents is true and correct to the best of our knowledge and belief and that nothing has been concealed.

For and on behalf of Soneri Bank Limited

-sd- -sd- ______Mohammad Aftab Manzoor Mirza Zafar Baig President & CEO Chief Financial Officer

Date: 05/10/2018

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2.28. STATEMENT BY THE CONSULTANT TO THE ISSUE

The General Manager Pakistan Stock Exchange Limited Stock Exchange Limited Stock Exchange Road Karachi

Being mandated as the Consultant to the Issue to this Initial Public Offering of TFCs of Soneri Bank Limited, we hereby confirm that all material information as required under the Securities Act, 2015, the Listing of Companies and Securities Regulation of Pakistan Stock Exchange Limited and Public Offering Regulations, 2017 has been disclosed in this prospectus and that whatever is stated in the prospectus and in the supporting documentations is true and correct to the best of our knowledge and belief and that nothing has been concealed.

For and on behalf of Next Capital Limited

-sd- ______Umer Habib Head of Investment Banking and Advisory

Date: 05/10/2018

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PART 3: UNDERWRITING, COMMISSIONS, BROKERAGE AND OTHER EXPENSES TO THE ISSUE

3.1. UNDERWRITING

The present Public Issue of TFCs of PKR 400 million has been fully underwritten as follows: S. No. Underwriter No. of TFCs Amount in Rupees 01 Pak China Investment Company Limited 40,000 200,000,000 02 PAIR Investment Company Limited 40,000 200,000,000 Total 80,000 400,000,000

If and to the extent that the TFCs offered to the general public shall not have been subscribed and paid for in full by the closing date, the underwriters shall within 5 business days of being called upon by SNBL to do so, subscribe or procure subscribers to subscribe and pay in readily available funds in accordance with their underwriting commitments.

In the opinion of the Directors of the Bank, the resources of the underwriters are sufficient to discharge their underwriting obligations.

3.2. NO BUYBACK / REPURCHASE AGREEMENT

THE UNDERWRITERS NOR ANY OF THEIR ASSOCIATES HAVE ENTERED INTO ANY BUYBACK OR REPURCHASE AGREEMENT WITH THE SPONSORS, THE BANK OR ANY OTHER PERSON IN RESPECT OF THIS PUBLIC ISSUE.

ALSO, NEITHER THE BANK NOR ANY OF ITS ASSOCIATES HAVE ENTERED INTO ANY BUY BACK / RE- PURCHASE AGREEMENT WITH THE UNDERWRITERS OR THEIR ACCOCIATES.

THE BANK AND ITS ASSOCIATES SHALL NOT BUY BACK / RE-PURCHASE CERTIFICATES FROM THE UNDERWRITERS AND THEIR ASSOCIATES.

3.3. UNDERWRITING EXPENSES

The underwriters will be paid an underwriting commission of 1.25% on the amount of the public portion underwritten by them. Further in case of take-up, a take-up commission of 1.25% of the take-up amount will be paid to the underwriters.

3.4. FEES AND EXPENSES FOR CENTRAIZED E-IPO SYSTEM

The commission on application received through CES will be paid to CDC, which shall not be more than 0.8% of the amount of successful applications. CDC will share the fee with other participants of CES at a ratio agreed amongst them.

3.5. COMMISSION TO THE BANKERS TO THE ISSUE

A commission at the rate of 0.25% of the amount collected, in respect of successful applications will be paid to the Bankers to the Issue for services to be rendered by them in connection with the Public Offer.

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No commission shall be paid to the Bankers in respect of the TFCs actually taken up by the underwriters by virtue of their respective underwriting commitments.

3.6. BROKERAGE COMMISSION

Brokerage shall be paid to the TREC holders of PSX, at the rate of 1.0% of paid-up value of TFCs actually sold through them. No brokerage shall be payable in respect of TFCs taken up by the Underwriters by virtue of their underwriting commitment.

3.7. EXPENSES TO THE ISSUE

The initial expenses of the issue paid or payable by the Bank inclusive of commission to the Underwriters, Bankers to the Issue and members of the PSX, etc., are estimated to be as follows:

Key Expenses to the Issue Rate Amount (PKR) Bankers to the Issue Commission 0.25% 1,000,000 Bankers to the Issue – Out of Pocket Expenses 350,000 Underwriting Commission – General Public 1.25% 5,000,000 Take-up Commission 1.25% 5,000,000 Consultant Fees 0.40% 16,000,000 Participation Fee 0.25% 9,000,000 Trustee Fee p.a. 900,000 Rating Fee p.a. 1,200,000 Market Making Fee p.a. 2,000,000 E-IPO Facilities Charges of CDC* 0.80% 3,200,000 E-IPO Facilities Charges of other Banks* 600,000 Brokerage to TREC Holders of the Stock Exchange 1.00% 4,000,000 PSX Initial Listing Fee 500,000 PSX Annual Listing Fee 50,000 CDC Annual Fees for Eligible Security p.a. 560,000 CDC Fresh Issue Fee 1,000,000 SECP Application & Processing Fees 100,000 SECP Supervisory Fee 10% 55,000 Legal Advisory Fee 2,500,000 Registrar / Balloting Agent Fee 200,000 Marketing and Printing Expenses 6,000,000 Auditors’ fee for preparation of various certificates 800,000 Miscellaneous Costs 1,000,000 Total 61,015,000 Note: Stamp duty fee (if any) will be calculated based on the advice of Transaction Legal Counsel *CDC E-IPO fee is 0.8% of the general portion. Currently only 2 banks are offering E-IPO services for this IPO in addition to CDC. The Actual cost is dependent on the subscriptions received through E-IPO.

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PART 4: HISTORY AND PROSPECTS

4.1. KEY INFORMATION

Name of the Issuer Soneri Bank Limited Date of Incorporation 28 September 1991 Registration Number L-04037 Listing Information Listed on Pakistan Stock Exchange on June 01, 1992

4.2. BACKGROUND & HISTORY

Soneri Bank Limited was incorporated in Pakistan in 1991 with a single branch operating out of Lahore. Since inception, the bank has grown its network to over 290 branches operating in numerous urban and rural centers. Through this extensive network, the Bank offers a full range of corporate, treasury, retail, consumer and trade related products and services. On the back of a successful track record of more than 25 years, Soneri Bank has established substantial brand equity which is evident through the Bank’s growing presence and clientele.

4.3. ORGANIZATION STRUCTURE OF THE BANK

Board of Directors

Shariah Audit Board Audit Committee Committee COO & Executive Director President & CEO Head of Audit

Head of Risk Chief Financial Head of Treasury, FI Head of Retail & Head of IT Head of Operations Company Secretary Head of CIBG Management Officer & PRI Commercial Banking

Head of Islamic Head of Remedial Country Credit Head of Head of Human Banking Management Unit Head Compliance Resources

4.4. PATTERN OF SHAREHOLDING

The Bank’s primary sponsors are the Feerasta Family. The Feerasta Family holds a majority stake of approximately 61% in SNBL. Pattern of shareholding of the Bank as of September 30, 2018 is given below:

Shareholder Category No. of Shares Percentage Directors, Chief Executive Officer and their spouses and minor children 10,129,642 0.92% Family Trusts 579,459,574 52.56% National Investment Trust Limited 104,843,049 9.51% Financial Institutions 22,434,021 2.03% Insurance Companies 13,562,912 1.23% Modarabas 1,792 0.00% Mutual Funds 7,183 0.00% Joint Stock Companies 168,267,723 15.26% Foreign Companies 47,309,943 4.29% Others 8,871,558 0.80%

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General Public (Local & Foreign) 147,576,084 13.39% Total 1,102,463,481 100.0%

Shares held by the Feerasta Family & their Family Trusts Shareholders Name No. of Shares Percentage Trustees Alauddin Feerasta Trust 387,386,560 35.14% Trustees Feerasta Senior Trust 128,006,009 11.61% Trustees Alnu Trust 64,067,005 5.81% Mr. Amir Feerasta 62,140,630 5.64% Mr. Alauddin Feerasta 10,080,679 0.91% Mrs. Amynah Maqsood Noorani 4,650,500 0.42% Mrs. Ashraf Pervez Daredia 4,649,000 0.42% Mrs. Naimat Ali Akbar 3,591,580 0.33% Mrs. Malika Mansoor Ali Hasham 3,441,416 0.31% Mrs. Shah Bibi Sayani 2,766,216 0.25% Mrs. Shirin Feerasta 1,214,807 0.11% Mr. Uzair Feerasta 493,500 0.04% Mr. Nooruddin Feerasta 14,048 0.00% Mrs. Amyna N. Feerasta w/o Mr. Nooruddin Feerasta 7,021 0.00% Mrs. Munira N.Feerasta 7,021 0.00% Mr. Noor Feerasta 7,021 0.00% Mr. Amin A. Feerasta 5,401 0.00% Mrs. Aziza A. Feerasta w/o Mr. Alauddin Feerasta 5,401 0.00% Mrs. Salima A. Feerasta w/o Mr. Amin A. Feerasta 5,401 0.00% Mr. Ahmed A. Feerasta 5,401 0.00% Total 672,544,617 61.00%

4.5. PRODUCTS AND SERVICES

The Bank has a full range of products and services catering to various customer segments. A summary of the products/services offered by the Bank is given below:

Current Accounts

Customers can open any current account for their transactional needs and enjoy banking convenience offered via over 285 branches and a growing network of 300+ ATMs across the country. The current accounts include:

• Soneri Ikhtiar Account • Soneri Current Account • Basic Banking Account • Soneri Asaan Account • Soneri Pensioners Account • Soneri INSTA PAY Payroll Solution

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Savings Accounts

Soneri Bank offers a complete range of savings product with attractive returns. These accounts are designed to cater to the specific needs of individuals, senior citizens and corporates. The savings product suite includes:

• PLS Saving Account • Soneri Saving Account • Soneri Sahara Account • Soneri Rupee Term Deposits • Soneri Diamond Deposits (Monthly Income Scheme) • Soneri Foreign Currency Accounts • FCY Term Deposits

Financing Products

Soneri Bank ensures meeting all banking needs of its customers by offering variety of financing products to facilitate them to grow their businesses and contribute their share towards industrial growth of the country. The bank is also committed to play its role towards strengthening the SME sector by encouraging quality players to avail credit facilities through their nationwide branches, empowering them to grow beyond financial limitations. Their financing products include:

• Running Finance • Cash Finance • Term/Demand Finance • Letter of Credits (LCs) • Finance against Imported Merchandise (FIM) • Finance against Trust Receipts (FATR) • Letter of Guarantees (LGs) • Soneri Speed Finance • Prime Minister’s Youth Business Loan (PMYBL) Scheme

Consumer Finance

Soneri Car Finance and Soneri Personal Finance are products of the Consumer Finance Category. Soneri Bank provides Car Finance facility up to PKR 3 Million, repayable up to 5 years in equal monthly installments. Option of used and reconditioned cars is also available. Soneri Bank offers Personal Finance up to PKR 500,000, repayable up to 5 years in equal monthly installments.

Agriculture Financing

Agriculture contributes a significant portion in the GDP of the country, and the livelihood of a large number of rural population is based on this sector. Soneri Bank provides various Agriculture Financing Products (conventional as well as Islamic). The following Agriculture Financing Products are available for the uplifting of agri economy: • Farm Production Loans – Revolving Credit • Farm Development Loans • Tractor & Implements Loans • Non – Farm Working Capital Loan – Dairy Farming

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• Non – Farm Development Loan – Dairy Farming • Non – Farm Working Capital Loan – Poultry Farming • Non – Farm Development Loan – Poultry Farming • Non – Farm Working Capital Loan – Fish Farming • Non – Farm Development Loan – Fish Farming • Non – Farm Working Capital Loan – Cattle Farming • Non – Farm Development Loan – Cattle Farming • Value Chain – Contract Farmers Financing • Mustaqeem Tractor Loans • Ijarah

Home Remittance

Soneri Bank Limited (SBL), under guidance of Pakistan Remittance Initiative (PRI) (a joint venture of State Bank, Ministry of Finance and Ministry of Overseas Pakistanis, Pakistan), started Home Remittance Payments Disbursement Initiative in July 2012. In a very short span of time with exceptional customer support and service delivery standards, Soneri Bank managed to make a positive contribution towards Home Remittance Business. This service provides the customer with an avenue to receive their money with ease, sent from abroad and over 285 branches in 130 cities across Pakistan. Soneri Bank has already established cordial relationships with many Global Exchange Companies operating in different region of Gulf Countries, United Kingdom, United States of America, and Canada to facilitate its customers.

Alternate Delivery Channel

Alternate Delivery Channels by Soneri Bank include: • ATMs: With the growing network 300+ ATMs across the country, customer can conveniently withdraw cash and avail ancillary services through the ATMs of Soneri Bank. • Soneri Mobile Banking: With Soneri Mobile Banking, customers can access their accounts anytime and anywhere via their mobile phones. They can view their account statements, perform fund transfers, get themselves registered for e-statement, enquire about different Soneri products by product info tab, get mobile top-ups and pay their bills conveniently sitting in the comfort of their homes and workplaces. Soneri Mobile App is available on Android / IOS (iPhone operating system). • Soneri Direct Investment Banking: This provides the customer with a simple, convenient and secure solution to operate their bank accounts online 24/7 from anywhere in the world. • Soneri EMV Master Debit Card: With Soneri EMV Master Debit Card having an upgrade security layer, customers enjoy a cashless experience of spending and making payments anywhere within the country and across the globe. • SMS Alerts: Soneri Bank offers SMS Alert Service to all of its customers. • Phone Banking: Customers can not only access their accounts 24/7 with Soneri Phone Banking but can also request for different services being offered including ATM Debit Card replacement, Stop Cheque request, Banker’s Cheque, E-Statement and Account Statement request. • FonePay: The FonePay is an easy app that allows Soneri customers to have a cashless lifestyle and allow them to pay 45,000 online and offline merchants.

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Protection and Coverage Products

Soneri Bank offers a variety of exclusively designed Bancassurance conventional and Takaful products that cater to the protection, savings and investment needs of its customers. Bancassurance is one of the best purchases for the future of customers’ family. Few of the products are:

• Sunehra Saver and Sunehra Saver Takaful • Roshan Aghaz & Roshan Aghaz Takaful • Roshan Takmeel • Karobar Muhafiz • Sunehra Cash Builder • Sunehra Income Builder • Sunehra Ehad Takaful

Soneri Mustaqeem Islamic Banking

Soneri Mustaqeem Islamic Banking offers a broad range of 100% Shariah compliant financial solutions for the customers. The Islamic portfolio includes:

• Current Account – Soneri Jari Account • Current Account – Rahat Mustaqeem Account • Saving Account – Soneri Munafa & Soneri Bachat Account • Foreign Currency Account • Soneri Car Ijarah

Corporate & Investment Banking

Soneri Bank’s Corporate and Investment Banking is well equipped to meet the requirements of corporate clients having strong presence in Karachi, Islamabad and Lahore. The Bank acts as financial advisor effectively catering to the financial needs through the following suite of products:

• Working Capital and Trade Finance Facilities • Investment Banking • Supply Chain Management • Cash Management

China Desk

The China Pakistan Economic Corridor (CPEC) is a collection of projects currently under construction at a cost of around USD 54 Billion as part of China’s ambitious One Belt One Road Initiative and Pakistan’s Vision 2025. In addition to a Chinese Business Unit in Islamabad, the Bank has established another unit in Karachi and is planning to establish one in Lahore to cater to all banking requirements.

4.6. BRANCH AND ATM NETWORK

The Bank has grown its branch and ATM network across the country taking the branch count to 290 and ATMs to 313 as of December 2017.

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2013 2014 2015 2016 2017 No. of Branches 239 246 266 288 290 ATMs 265 263 274 306 313

4.7. ISSUER RATING

As of September 26, 2018, Pakistan Credit rating Agency (“PACRA”) has assigned a long-term rating of “AA-” (Double A minus) to the Bank which is a very high credit rating and indicates very strong capacity for timely payment of financial commitments. The short-term rating consistently stands at “A1+” (A One Plus) which shows the Bank’s highest capacity for timely repayment. Also, the Outlook of the Bank has been maintained at “Stable”.

These ratings reflect Soneri Bank’s sustained business profile. Entity rating history of the Bank for the last five reviews are summarized below:

Dissemination Date Long Term Rating Short Term Rating Outlook Action 26-Sep-18 AA- A1+ Stable Maintain 14-Jun-18 AA- A1+ Stable Maintain 15-Dec-17 AA- A1+ Stable Maintain 16-Jun-17 AA- A1+ Stable Maintain 17-Jun-16 AA- A1+ Stable Maintain

4.8. OPERATING AND FINANCIAL PERFORMANCE HIGHLIGHTS

During the history of 25 years of operations, the Bank has delivered a sustained growth and has strengthened its position in the banking industry. The Bank, with a view to grow the business volumes with adequate margins, has continued with the strategy of business expansion along with adopting new technologies and best operating practices.

The deposit base of the Bank has grown at a 5-year CAGR of 13.5% reaching at PKR 227 billion as of December 31, 2017and PKR 243 billion as of June 30, 2018 while asset base has grown with a 5-yr CAGR of 15.2% reaching to PKR 372 billion as of June 30, 2018. The infection ratio of the Bank has also reduced significantly over the past few years along with increased coverage, which is reflective of Banks’s healthier position and prudence exercised by the management in extending credits. Currently, the Bank has one of the lowest net infection ratios of 1.4%with a coverage ratio of 77%.

Capital Adequacy Ratio (“CAR”) of the Bank stands at 12.5%as of June 30, 2018 which is well above the minimum requirement of 11.9% set by the SBP. CAR will be further strengthened by the current TFC issue.

Key highlights of the Bank’s operating and financial performance are given in the charts below:

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400,000 372,164 300,000 5-yr CAGR of 15.2% 5-yr CAGR of 13.5% 243,417 322,134 227,348 250,000 209,925 278,521 300,000 253,342 184,847 200,000 162,964 213,175 140,439 150,000 120,451 200,000 158,629 169,234

100,000 PKR million PKR PKR million PKR 100,000 50,000

- - CY12 CY13 CY14 CY15 CY16 CY17 Jun-18 CY12 CY13 CY14 CY15 CY16 CY17 Jun-18 Deposits Total Assets

90.0% 82.8% 5.0% 200,000 12,000 81.1% 77.7% 172,772 176,427 4.5% 80.0% 74.8% 74.4% 11,584 68.5% 4.0% 11,500 70.0% 64.8% 150,000 133,753 60.0% 3.4% 115,614 120,617 11,000 3.0% 104,673 50.0% 2.7% 10,558 100,000 83,599 10,500 40.0% 2.4% 10,424 10,419 2.0% 10,224 10,245

30.0% 1.6% million PKR 10,000 1.4% 9,927 20.0% 1.1% 50,000 1.0% 9,500 10.0% 0.0% 0.0% - 9,000 CY12 CY13 CY14 CY15 CY16 CY17 Jun-18 CY12 CY13 CY14 CY15 CY16 CY17 Jun-18

Coverage Ratio Infection Ratio - Net Advances - Gross NPLs

The Bank has managed to increase its net interest income from PKR 4.9 billion in CY12 to PKR 6.7 billion in CY17 delivering a CAGR of 6.4%. Non-interest income has also grown significantly with a 5-year CAGR of 13.6% and reaching to PKR 3.2 billion in CY17 against PKR 1.7 billion in CY12.

Operating expenses have been increased from 4.4 billion in CY12 to PKR 7.0 billion in CY17 as the Bank grew in terms of its geographical footprint and invested in building its brand. Profit after tax of the Bank has also grown decently over the past 5 years reaching to PKR 1.6 billion in CY17 from 1.1 billion in CY12.

7,598 8,000 8,000 42.0% 7,031 41.5% 6,659 6,479 7,000 6,280 6,844 7,000 6,123 40.0% 5,798 6,000 6,000 4,879 4,888 39.1% 4,868 5,000 38.0% 5,000 4,368 4,000 37.1% 3,380 4,000 3,559 3,000 35.8% 36.0% 35.7% 36.0% 3,000 2,213 PKR million PKR 35.3% 1,878 2,000 2,000 1,581 1,644 34.0% 1,104 1,036 976 1,000 1,000 - 32.0% - CY12 CY13 CY14 CY15 CY16 CY17 Jun-18 CY12 CY13 CY14 CY15 CY16 CY17 Jun-18

Net Interest Income Gross Spread (NII / Interest Income) - % Operating Expenses Profit after Taxation

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4.9. INDUSTRY ANALYSIS AND PEER COMPARISON

Pakistan’s banking industry comprises of 34 commercial banks out which 20 are listed on the Pakistan Stock Exchange. The industry is regulated by the State Bank of Pakistan and is highly concentrated with private commercial banks. A distribution of the Pakistan’s banking sector is provided below:

40 34

30 20 20

No. Banks of 10 4 5 5

0 Specialized Public Sector Foreign Banks Local Private Total Banks Banks Commercial Banks Banks Performance Highlights

Performance of the banking industry over the past few years has been robust as indicated by considerable growth in asset base, deposits, advances accompanied by sound financial indicators. Some of the key performance highlights of the banking industry are depicted in the charts below:

20,000 18,342 5-yr CAGR of 13.5% 14,000 5-yr CAGR of 12.3% 13,012 18,000 15,831 11,798 12,000 16,000 14,143 10,389 14,000 12,106 10,000 9,230 8,311 12,000 10,487 9,720 8,000 7,291 10,000

8,000 6,000 billion PKR 6,000 4,000 4,000 2,000 2,000 - - Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Dec-17 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Dec-17 Total Assets Deposits

Min Regulatory 17.3 17.5 Requirement is 17.1 20.0 17 11.275% 14.6 16.2 13.3 16.5 15.0 12.3 15.8 11.4 16 15.6 10.1

8.4 % 15.5 % 10.0 14.9 15 5.0 14.5 14 0.0 13.5 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Dec-17 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Dec-17 NPLs to Total Loans Risk Weighted Capital Adequacy Ratio

Source: Compendium of the Banking System by State Bank of Pakistan, Dec 2017

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Despite improving performance of the banking industry, Pakistan has very low loan to GDP and loans to deposit ratios when compared with peers. Favorable macros, infrastructural projects including CPEC and improving standard of living will help capturing the growth in banking sector of Pakistan.

Loans to GDP (2017) Loans to Deposits (2015) 150.2% 160.0% 144.5% 160.0% 140.0% 140.0% 128.2% 123.9% 116.0% 120.0% 120.0% 101.0% 100.0% 100.0% 79.8% 80.0% 66.5% 80.0% 66.4% 51.2% 60.0% 47.8% 49.5% 60.0% 38.7% 40.0% 40.0% 17.0% 20.0% 20.0% 0.0% 0.0%

Source: IMF / World Bank *2016 Peer Comparison

Out of the 20 commercial banks operating in the country, top 5 conventional banks collectively hold 53% of deposits and 47% of advances in the economy. A comparison of the key players of the conventional banking industry is given below:

PKR million Total Deposits Advances NPLs NII IDR ADR CAR No. of Assets (%) (%) (%) Branches

2,684,102 1,998,935 54,901 75,845 83,067 68.8 42.6 16.0 1,751

2,369,885 1,727,102 739,772 120,798 54,253 75.0 42.8 15.9 1,519

2,007,381 1,289,247 604,562 51,073 56,424 84.7 46.9 15.4 1,361

1,373,430 1,001,146 500,966 48,753 43,540 65.9 50.0 16.3 1,444

1,245,712 883,741 372,038 18,052 31,578 79.0 42.1 22.4 1,250

988,829 653,406 400,655 17,579 29,281 61.3 61.3 13.7 485

919,052 692,576 339,833 5,289 25,918 68.7 49.1 13.8 605

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656,708 525,808 258,693 26,753 16,195 59.9 49.2 12.1 516

644,554 518,364 174,319 18,520 13,971 76.5 33.6 17.2 286

488,027 373,081 231,532 27,321 13,960 48.2 62.1 15.9 405

322,134 227,348 164,293 10,245 6,659 51.7 72.3 12.8 290

233,050 145,730 85,522 17,068 2,900 65.3 58.7 5.01 193

166,855 110,278 85,851 5,860 5,486 34.7 77.8 10.9 123

117,151 54,901 40,182 2,336 2,359 114.6 73.2 19.7 37

Note: 1. NPLs: Non-Performing Loans, NII: Net Interest Income, IDR: Investment to Deposit Ratio, ADR: Advance to Deposit Ratio, CAR: Capital Adequacy Ratio 2. All financials are for the period ended December 2017 3. Sources of this information are the financial reports of the banks

4.10. FUTURE OUTLOOK

Going forward, the Bank, while focusing on a continued improvement in overall asset quality and yield, will continue to implement its prudent growth strategy. Simultaneously there will be a continued focus on enhancing non-fund and fee revenues. The Bank will also continue to capitalize on potential business opportunities arising from China-Pakistan Economic Corridor. To fuel this growth, the Bank will continue to mobilize low-cost deposits with an increase in branch network.

The future profitability of the banking sector will depend upon the momentum in advances, developments in the FX market and performance of the capital markets in general. With regards to advances, private sector credit is expected to pick up with the various expansions and other green field projects being set up in industries such as automobiles, steel, cement and glass. In a rising interest rate environment, this is expected to positively impact the net interest yield for banks. On the investment side, there has been a shift from PIBs to MTB and TFCs as a rise in the interest rates is expected going forward with inflation expected to increase in the coming months due to the recent devaluation. On the deposit side moderate growth is expected due to external sector pressures, however a general growth in money supply and economic activity is required to maintain historical levels of growth in deposits.

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4.11. RISK FACTORS

4.11.1. RISK FACTORS RELATED TO THE TFC ISSUE:

4.11.1.1. Summary of Risk Factors related to the TFC Issue:

Given the inherent nature and structure of Additional Tier-1 instruments as per Basel III instructions of SBP, following are the risks related to the TFC Issue:

i. the Issuer will have the discretion to cancel any scheduled profit/markup payment and such cancellation will not constitute an event of default;

ii. no markup shall be paid to the TFCs Holders for the period during which the Issuer is non-compliant with MCR and CAR requirements of SBP;

iii. the Issue may be called by the Issuer after 5 years from the date of Issuance (either partially or in full);

iv. the Issuer may permanently convert the TFCs (either partially or in full) into common shares at its own discretion or at the discretion of SBP;

v. the Issuer may permanently write off (either partially or in full) the outstanding principal amount of the TFCs at its own discretion or at the discretion of SBP; and

vi. The written off amount of the TFCs shall not be restored in any circumstances.

4.11.1.2. Details on Risk Factors related to the TFC Issue: a) Discretion on Profit Payment Clause

In accordance with the terms of the Basel III Circular issued by SBP, the Bank will have discretion to cancel (in whole or in part) any scheduled profit payment and such cancellation shall be deemed to constitute a waiver by the TFC Holders of their right to receive such schedule profit payment. Cancellation by the Issuer of any schedule profit payment will not constitute an event of default. On cancellation of the payment of mark-up, the Bank’s obligation to pay mark-up on the TFCs shall stand extinguished and the Bank shall have no obligation to make distributions/payments in kind. b) Lock-in Clause & Loss Absorbency Clauses

Lock-in Clause

As per the lock-in requirement provided under the Basel III Circular, neither profit nor principal can be paid in respect of the TFC Issue, if such payment will result in a shortfall in the Issuer’s minimum capital requirement or capital adequacy ratio or results in an increase in any existing shortfall in minimum capital requirement or capital adequacy ratio.

Any inability to exercise the lock-in clause will subject these TFCs to mandatory conversion into common shares / write-off at the discretion of SBP.

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Loss Absorption at Pre-Specified Trigger

The Instrument will be subject to loss absorption upon the occurrence of a Pre-Specified Trigger (“PST”) as per section A-5-2 of Annexure 5 of the Circular, which stipulates that if an Issuer’s Common Equity Tier 1 (“CET 1”) ratio falls to or below 6.625% of Risk Weighted Assets (“RWA”), the Issuer will have full discretion to determine the amount of TFCs to be permanently converted into common shares or written off, subject to SBP regulations / instructions, and the cap specified below. SNBL will be able to exercise this discretion subject to the following conditions:

• If and when SNBL’s CET 1 reaches the loss absorption trigger point, the aggregate amount of Additional Tier-1 capital to be converted must at least be the amount sufficient to immediately return the CET 1 ratio to above 6.625% of total RWA (if possible). • The converted amount should not exceed the amount needed to bring the CET 1 ratio to 8.5% of RWA (i.e. minimum CET 1 of 6.0% plus capital conservation buffer of 2.5%). • In case, conversion of Additional Tier-1 capital instrument is not possible following the trigger event, the amount of the instrument must be written off in the accounts resulting in increase in CET 1 of the Issuer.

Loss Absorption Features at Point of Non - Viability

The Instrument will be subject to loss absorption and / or any other requirements of SBP upon the occurrence of a Point of Non-Viability (“PONV”) event as per Section A-5-3(i) of Annexure 5 of the Circular, which stipulates that SBP may, at its option, fully and permanently convert the TFCs into common shares of the Issuer and / or have them immediately written off (either partially or in full). Number of shares to be issued to TFC holders at the time of conversion will be equal to the ‘Outstanding Value of the TFCs’ divided by market value per share of the Issuer’s common / ordinary share on the date of the PONV trigger event as declared by SBP, subject to the cap specified below.

The PONV trigger event is the earlier of: • A decision made by SBP that a conversion or temporary / permanent write-off is necessary without which the Issuer would become non-viable. • The decision to make a public sector injection of capital, or equivalent support, without which the Issuer would have become non-viable, as determined by SBP.

The maximum number of shares to be issued to TFC holders at the Pre-Specified Trigger and / or Point of Non-Viability (or otherwise as directed by SBP) will be 360 million ordinary shares. The number of ordinary shares issued to Investors at the time of conversion will be equal through the formula: ‘Outstanding Face Value of the TFCs’ divided by Fair value per share of SNBL’s Shareholders Equity on the date of trigger. c) Effects of Write-off:

In the event that the Additional Tier-1 capital instrument includes a write-off provision, section A-5-2 (vi) of Annexure 5 of the Circular requires that:

• The claim of the instrument on liquidation of the Issuer is reduced to (or below) the value of the written-off instrument. • The amount of the instrument to be paid in case of a call is reduced by the written-off amount of the instrument. • The distributions (dividends/profit) payable on the instrument will be permanently reduced.

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4.11.2. RISK FACTORS RELATED TO THE BANK:

4.11.2.1. Credit Risk

Credit risk is a risk arising from the potential that an obligor is either unwilling to perform on an obligation or its ability to perform is impaired resulting in financial loss to the Bank. Credit risk mainly arises from all placement of deposits, lending and investing activities i.e. transactions that give rise to actual, contingent or potential claims against any counterparty, borrower or obligor.

Lending of money is the core business activity, a major source of revenue and a significant exposure for the Bank. Lending is mainly funded from depositors’ money.

Mitigant: In order to protect the stakeholders’ wealth, the Bank has deployed considerable resources and adequate controls to manage, monitor and control credit risk throughout the Bank. The main objective of the credit risk management process is to identify, assess, measure and monitor credit risk in all the financial exposures of the Bank. The Bank has established a rigorous credit risk management framework to timely and effectively manage credit risk at transaction as well as at portfolio level. In addition to this, the Enterprise Risk Management (ERM) solution of SAS provides information / analysis in making better credit decisions, measured risk-taking, better loan pricing and efficient capital allocation there against thus resulting in efficient and effective use of funds and increase in profitability of the Bank. The Bank has an organisational structure for managing credit risk, established on internal control environment and equipped with adequate level of expertise and resources.

The Board of Directors has delegated lending powers to different tiers of credit approving authorities, constituted at central and regional levels. Extension of credit is executed, in strong internal control environment, in the light of the Bank’s credit policies and procedures and regulatory requirements.

Besides managing credit risk at transaction level, the Bank regularly monitors credit risk at portfolio level and ensures that no undue concentration of risk is present in the overall credit exposure at Bank level. The Bank has a well-established and rigorous management information set-up which allows efficient and effective assessment, monitoring and management of its credit risk profile in various dimensions.

The Credit Risk Rating System provides solid grounds for the assessment and measurement of credit risk against each obligor in addition to fulfilling regulatory requirements. The SAS based Internal Obligor Risk Rating System for Agriculture, Corporate, ME/SE and Consumer borrowers has been approved by the BoD of the Bank. This rating system is an empirical risk rating system which will helps to assess the Probability of Default (PD) of these obligors; risk-based pricing, risk diversification and portfolio management as per the requirements of SBP / Basel Accords and also has the capability to track historical defaults and loss experiences. These Credit Risk Rating Systems are now incorporated with Bank’s Credit Approval Processing Systems (CAPs) for its Corporate, ME/SE and Consumer borrowers; resultantly this facility reduces the TAT in Credit Risk Review process and approvals and establishes a single platform for initiation and monitoring the Bank’s portfolio. The ORR assigns risk grades to customers, in accordance with the regulatory requirements, in twelve grades, out of which top nine grades refer to regular customers whereas remaining three grades pertain to defaulted ones. Whereas, FRR assigns each loan facility in six categories, in accordance with regulatory requirements. Business Units assign credit risk rating to every customer and loan facility as an integral part of the Bank’s credit approval process.

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A sound credit risk management framework forms part of the overall business strategy and credit operations of the Bank. The principles for credit risk management have been laid down in the Bank’s credit policy, credit manual, and credit risk procedural manual. The policy has been developed in accordance with the requirements of the State Bank of Pakistan and is reviewed and updated (where required) on a periodic basis.

The Bank has a well-established and rigorous pre-approval evaluation process of credit risk embedded in credit transaction executed by the Business Units. The entire process broadly encompasses, gathering relevant information on the borrower, credit investigations and visits, detailed credit appraisal and credit risk assessment / measurement.

In addition to monitoring credit limits specified in the Prudential Regulations of the State Bank of Pakistan, the credit limit structure of the Bank includes internal limits as established by the senior management and the BOD. Internal limits include limits with respect to BOD approved risk appetite, industry / sector, credit approval authority, large exposures limits, linkage ratio limits for corporate borrowers, exposure with banks and NBFIs, exposure with insurance companies and foreign countries. All these limits are monitored on a regular basis and any exceptions are reported to the relevant authorities for their timely action where necessary.

Collateral act as mitigates in case of default by the borrower. Therefore, most of the facilities extended by the Bank are backed by appropriate and quality collaterals. Similarly, lending to financial institutions and DFIs are backed by securities viz., Market Treasury Bills and Pakistan Investment Bonds. Clean facilities are provided, under strict control environment, only to the extent permissible under the Prudential Regulations of the State Bank of Pakistan. The credit manual of the Bank contains list of approved collaterals that the Bank can take and internal control standards for the management of collaterals obtained against credit facilities.

The Bank has an effective early warning system which enables the Business Units / credit managers / credit administration personnel to identify and report problem loans on a prompt basis. Reports are received from Business Units on a regular basis, which are escalated to the concerned authority for necessary action on a timely basis.

The Bank has standards for identification and classification of credit facilities, restructuring as well as related provisioning requirements and write-off policy, with clear responsibilities pertaining to all processes that are required to be followed. Non-performing loans beyond certain aging / classification category are required to be referred to Remedial Management Group (RMG) which initiates recovery proceedings against the borrowers in accordance with the applicable laws.

4.11.2.2. Liquidity Risk

Liquidity risk is the potential inability to meet contractual and contingent financial obligations, either on or off-balance sheet, as they become due. Primary liquidity objective of the Bank is to provide adequate funding for businesses throughout market cycles, including periods of financial stress.

Mitigant: Day to day funding, is managed by Treasury Division through net cash flows from payment systems, fresh deposits mobilized by branches, maturing money market deposits, etc. The Bank maintains a portfolio of highly marketable assets viz., Market Treasury Bills and Pakistan Investment Bonds that can either be sold

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in the open market or funds can be arranged there against under repo arrangements. This is further supported by investments in short term securities viz., Certificate of Investments etc. In line with its liquidity risk management policy, the Bank maintains a cushion over and above the minimum statutory liquidity requirement of the SBP, for maintaining liquidity reserves, to ensure continuity of cash flows.

The Bank monitors its liquidity risk through various liquidity ratios and liquidity risk indicators and any deviations or breaches are reported to the relevant authorities for timely action. Moreover, Asset and Liability Management Committee (ALCO), a senior management committee, also reviews the liquidity position of the Bank on at least monthly basis and takes appropriate measures where required.

The Bank uses liquidity gap ladder to assess the liquidity gaps and liquidity needs in different time buckets, under normal and stressed scenarios. Whereas, the Contingency Funding Plan (CFP) of the Bank is also tested on the basis of the results of liquidity stress testing. Sources of liquidity are regularly reviewed / monitored by the Asset and Liability Management Committee (ALCO). The ALCO reviews the current economic situation, projected cash flows and asset / liability mix and approves strategy for managing appropriate liquidity. The liquidity risk management policy of the Bank encompasses liquidity contingency plan for actions to be taken in case of liquidity crises. Mandatory stress tests of SBP are conducted, on a periodic basis, to test the adequacy of liquidity contingency plan and to identify the extent of liquidity stress that the Bank is able to take in current conditions.

4.11.2.3. Operational Risk

Operational risk is defined as the risk of loss resulting from inadequate or failed internal processes, people and systems or external events. This includes legal risk as well as the reputational consequences of failures in operational risk management. The Bank uses Basic Indicator approach for assessing capital charge for operational risk.

Mitigant: The Bank has established a rigorous operational risk management framework to efficiently and effectively monitor and manage operational risk in each business and support activity of the Bank as well as those arising from external events like from natural disasters, outsourcing, etc. The Bank has a sound organisation structure for managing operational risk, established on strong internal control environment and equipped with adequate level of expertise and resources. The Bank has also formed an Operational Risk Management Committee (ORMC), a senior management committee to assist the Board Risk Management Committee (RMC), to ensure the compliance of BoD approved operational risk management framework, supported by the Risk Management Division (RMD).

The Bank has been conducting risk and control self-assessment (RCSA) exercise for each business and support function of the Bank in order to identify and assess operational risks inherent in existing activities, processes and systems. Through the RCSA exercise, the Bank has been able to develop inventory of risks, controls and key risk indicators (KRI) and has identified gaps in its operating activities which are rectified on a priority basis.

Operational risk monitoring is conducted through KRIs, identified in the RCSA exercise for each process. All branches, offices, divisions / departments furnish KRI reports on a periodical basis to the Operational Risk Management Department (within the Risk Management Division).

The Bank keeps a detailed track of its operational loss events and maintains a database. This helps the Bank to step towards advanced approach of Basel II accord and also allows the Bank to formulate strategy to rectify the gap of reoccurrence of the incident. The Bank has, in compliance of BPRD Circular No. 04 of 2014 “Implementation of Operational Risk Management Framework” created separate Op-Loss general ledgers in the Bank’s system which are being used for reporting of operational losses and are bifurcated

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into 7 operational loss categories as per the requirement of Basel II accord. The Bank also gathers external loss events occurring in the banking industry and designs strategies to prevent occurrence of similar incidents in the Bank.

In order to ensure continuity of the Bank’s operations, the Bank has in place a well-developed, BoD approved Business Continuity Plan (BCP) which has been implemented across the Bank. The BCP has been well communicated down the line and regular trainings and testing is conducted across the country. Permanent back up sites have also been established and related testing carried out by critical staff to their designated back up sites. The BCP Steering Committee, a senior management committee, is responsible to ensure the adequacy of the BCP of the Bank as well as to ensure its effective implementation and compliance. The committee reports to the Board Risk Management Committee.

4.11.2.4. Market Risk

Market Risk is the risk that the value of on and off-balance sheet positions of a financial institution will be adversely affected by movements in market rates or prices such as interest rates, equity prices and/or commodity prices resulting in a loss to earnings and capital.

Mitigant: The Bank has established a rigorous market risk management framework to efficiently and effectively monitor and manage market risk in every transaction as well as at portfolio level. The Bank has made substantial investment to add value to its market risk management framework by purchasing the license of Market Risk Management System (MRMS), part of Enterprise Risk Management (ERM) solution, of SAS. The said solution provides adequate analysis to facilitate better investment decisions, measured risk-taking and efficient capital allocation there against; thus, leading to efficient and effective use of funds. The Bank has a sound organization structure for managing market risk, established on strong internal control environment and equipped with adequate level of expertise and resources. The Risk Management Committee (RMC), a BOD level sub-committee, is primarily responsible to monitor and manage market risk in all the financial exposures of the Bank, supported by senior management committees namely Asset and Liability Management Committee (ALCO) and Market Risk Management Committee (MRMC).

4.11.2.5. Yield/Interest Rate Risk

Yield risk is the risk of decline in earnings due to adverse movement of the yield curve. Interest rate risk represents the risk that value of financial instruments will fluctuate due to change in market interest rates. The Bank is exposed to yield / interest rate risk as a result of mismatches or gaps in the amounts of assets and liabilities and off-balance sheet instruments that mature or re-price in a given period.

Mitigant: The Bank manages this risk by matching the re-pricing of assets and liabilities and off-balance sheet instruments. The Bank’s yield / interest rate sensitivity position for on-balance sheet instruments is based on the earlier of contractual re-pricing or maturity date and for off-balance sheet instruments is based on settlement date. The Bank quantifies the yield curve risk via duration, PVBP and convexity for rate sensitive assets and liabilities held in banking and trading book. The Bank also measure impact on net worth depending on duration gap of rate sensitive assets and liabilities.

4.11.2.6. Foreign Exchange Risk

Foreign exchange risk is the probability of loss resulting from adverse movements in exchange rates. Exchange position arising from trading activities is monitored through foreign exchange limits on aggregate and individual currency basis.

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Mitigant: Hedging strategies and mark-to-market valuations are used to mitigate exchange risk resulting from open position. Overall exchange position risk is maintained in accordance with the regulatory requirements prescribed by the State Bank of Pakistan.

4.11.2.7. Equity position risk

The Bank invests mainly in blue chip securities depending upon market mispricing through arbitrage. Further, the risk arising from investments in equity securities lies in both its banking and trading books which is measured and assessed using the Value at Risk (VaR) approach. The VaR of the portfolio is reported to the BRMC, ALCO/MRMC and other authorities on a periodical basis.

4.11.2.8. Country Risk

Country risk refers to the possibility that economic and political conditions in a foreign country could adversely impact the Bank’s exposure in that country. For the Bank, country risk arises as a result of the Bank’s foreign currency lending, trade and treasury business with counterparties domiciled in other countries as well as investments and capital transactions.

Mitigant: In order to monitor and mitigate the risk, Bank has in place a comprehensive country risk management framework. Under this framework, the transfer risk is measured using financial market and economic factors. Political risk is measured using a variety of indicia indicative of relative certainty of payment of foreign obligations. Based on this framework, risk limits are assigned to countries within the Board approved limits. The limits and their utilization are monitored and controlled at head office level and country risk exposures are reported to Central Credit Committee at a defined frequency.

4.11.2.9. Regulatory Risk

The term ‘Regulatory Risk’ is dealt by adaptation of changes in the regulatory environment & to develop an effective program including the controls based on applicable laws, rules, regulation issued by regulators and legislators. Accordingly, the regulatory risk refers to the potential material impact (i.e. financial as well as reputational loss) which bank may face in case of non-compliance.

NOTE: IT IS STATED THAT ALL MATERIAL RISK FACTORS HAVE BEEN DISCLOSED AND THAT NOTHING HAS BEEN CONCEALED IN THIS RESPECT.

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PART 5: FINANCIAL INFORMATION AND CREDIT RATING REPORT

5.1. AUDITORS CERTIFICATE UNDER SECTION 2 OF THE FIRST SCHEDULE TO THE PUBLIC OFFERING REGULATIONS, 2017 FOR THE PURPOSE OF INCLUSION IN THE PROSPECTUS FOR PROPOSED ISSUE OF ADDITIONAL TIER 1 TERM FINANCE CERTIFICATES BY THE BANK

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5.2. AUDITORS CERTIFICATE FOR BREAKUP VALUE OF SHARES

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5.3. BREAK-UP VALUE OF SHARES BASED ON UN-AUDITED ACCOUNTS OF JUNE 2018

(Rupees in ‘000)

Share capital 11,024,636 Unappropriated profit 3,625,376 Reserves 1,947,690 16,597,702

Surplus on revaluation of operating fixed assets – net of tax 1,916,334 Surplus/(deficit) on revaluation of “available-for-sale” securities – net of tax (311,271) 18,202,765

(Number of shares)

Number of ordinary shares 1,102,463,483

(Rupees per share)

Break-up value per ordinary share of Rs. 10 each (including surplus on revaluation of operating fixed assets – net of tax) 16.51

Break-up value per ordinary share of Rs. 10 each (excluding surplus on revaluation of operating fixed assets – net of tax) 14.77

The equity for the purpose of above calculation includes surplus/(deficit) arising on revaluation of available for sale securities – net of deferred tax.

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5.4. AUDITORS CERTIFICATE ON ISSUED, SUBSCRIBED AND PAID UP SHARE CAPITAL

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5.5. UN-AUDITED FINANCIAL STATEMENTS FOR THE PERIOD ENDED JUNE 30, 2018

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5.6. SUMMARY OF HISTORICAL FINANCIALS

Profit and Loss Account - PKR million CY12 CY13 CY14 CY15 CY16 CY17 1HCY18 Mark-up / return / interest earned 13,813 13,639 16,906 18,320 17,524 18,505 9,472 Mark-up / return / interest expensed 8,934 8,751 10,626 10,722 10,680 11,846 6,092 Net mark-up / return / interest income 4,879 4,888 6,280 7,597 6,844 6,659 3,380 Non-mark-up / interest income 1,731 2,245 2,509 3,150 2,736 3,269 1,569 Total Income 6,610 7,133 8,789 10,748 9,580 9,928 4,950 Operating Expenses 4,368 4,868 5,840 6,123 6,479 7,017 3,559 Provisions or write-offs 520 735 549 1,029 24 66 (234) Profit before Taxation 1,722 1,530 2,400 3,596 3,077 2,845 1,624 Profit after Taxation 1,104 1,037 1,540 2,213 1,879 1,657 976

Statement of Financial Position - PKR million CY12 CY13 CY14 CY15 CY16 CY17 1HCY18 Authorized Capital 12,000 12,000 12,000 15,000 15,000 15,000 15,000 Paid-up capital # 10,022 11,025 11,025 11,025 11,025 11,025 11,025 Discount on issue of right shares (1,001) (1,001) (1,001) (1,001) - - - Reserves # 410 618 934 1,049 1,424 1,752 1,948

Unappropriated profit # 1,947 1,810 3,108 4,221 3,454 3,636 3,625

Shareholders’ Equity # 11,378 12,450 14,065 15,294 15,902 16,413 16,598

Surplus on revaluation of assets - net of tax # 954 832 2,974 2,898 2,387 2,091 1,605

Equity including Surplus # 12,332 13,283 17,039 18,192 18,289 18,505 18,203 Net Assets 12,332 13,283 17,039 18,192 18,289 18,505 18,203 Total Assets # 158,629 169,234 213,175 253,342 278,521 322,134 372,164 Earning Assets # 137,810 147,225 184,288 223,942 248,726 288,266 333,256 Gross Advances 83,599 104,673 115,614 120,617 133,753 172,772 176,427 Provisions (Specific and General) 6,429 7,139 7,646 8,615 8,447 8,480 8,208 Advances - net 77,170 97,534 107,968 112,002 125,306 164,293 168,219 Non-Performing Loans 9,927 10,424 10,224 11,584 10,419 10,245 10,558 Investments - net 59,517 46,703 75,716 108,846 117,884 117,429 157,487 Total Liabilities 146,297 155,951 196,136 235,150 260,231 303,629 353,961 Deposits and Other Accounts 120,591 140,580 163,250 185,222 209,925 227,348 243,417 Current and Savings accounts (CASA) 82,363 98,633 110,135 126,798 142,241 158,339 163,291 Borrowings 20,398 10,485 25,825 39,876 38,905 64,584 98,715

Cash Flow Summary CY12 CY13 CY14 CY15 CY16 CY17 1HCY18 Net cash (used in) / generated from operating activities 17,573 (11,213) 30,230 33,745 13,075 (5,930) 49,642 Net cash generated from / (used in) investing activities (13,881) 12,076 (27,389) (33,398) (11,079) 8,650 (43,305) Net cash used in financing activities (599) (299) - 1,898 (1,379) (1,379) (827) Increase in cash and cash equivalents 3,093 564 2,841 2,245 617 1,341 5,509 Cash and cash equivalents at the beginning of the year 9,604 12,697 13,261 16,102 18,347 18,964 20,305 Cash and cash equivalents at the end of the year 12,697 13,261 16,102 18,347 18,964 20,305 25,814

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Profitability Ratios CY12 CY13 CY14 CY15 CY16 CY17 1HCY18 PBT Margin (PBT / Total Income) - % 26.1% 21.5% 27.3% 33.5% 32.1% 28.7% 32.8% Net Interest Margin - % 3.9% 3.4% 3.8% 3.7% 2.9% 2.5% 2.2%* Gross Spread (NII / Interest Income) - % 35.3% 35.8% 37.1% 41.5% 39.1% 36.0% 35.7% Gross Yield on Average Earning Assets - % 11.0% 9.6% 10.2% 9.0% 7.4% 6.9% 6.1%* Non-Interest Income to Total Income - % 26.2% 31.5% 28.5% 29.3% 28.6% 32.9% 31.7% Income / Expense ratio (excluding provisions) - times 1.51 1.47 1.50 1.76 1.48 1.41 1.39 Return on Average Equity (excluding surplus) - % 9.8% 8.7% 11.6% 15.1% 12.0% 10.3% 11.8%* Return on Average Assets - % 0.77% 0.63% 0.81% 0.95% 0.71% 0.55% 0.56%* Operating Cost to Total Income - % 66.1% 68.2% 66.4% 57.0% 67.6% 70.7% 71.9%

Investment Ratios - PKR CY12 CY13 CY14 CY15 CY16 CY17 1HCY18 Earnings per Share 1.00 0.94 1.40 2.01 1.70 1.50 0.89 Breakup Value per Share - excluding surplus on revaluation of operating fixed assets and surplus/(deficit) on 11.35 11.29 12.76 13.87 14.42 14.89 15.06 revaluation of available for sale securities Breakup Value per Share - including surplus on revaluation of operating fixed assets and surplus/(deficit) on 12.30 12.05 15.46 16.50 16.59 16.78 16.51 revaluation of available for sale securities

Market Ratios CY12 CY13 CY14 CY15 CY16 CY17 1HCY18 Bonus Issue - % 11.0% 10.0% 0% 0% 0% 0% 0% Cash Dividend - PKR per share - - 1.00 1.25 1.25 0.75 - Dividend Yield (Cash Dividend / VWAP) - % 0% 0% 7% 10% 9% 5% 0% Dividend Payout - % 0% 0% 72% 62% 73% 50% 0% Dividend Cover - times - - 1.40 1.61 1.36 2.00 - Price (VWAP) to Book Value (excluding surplus) - times 0.53 0.63 1.10 0.94 0.99 1.06 0.84 Price (VWAP) to Book Value (including surplus) - times 0.49 0.59 0.91 0.79 0.86 0.94 0.77 Price (VWAP) to Earning Ratio - times 6.0 7.5 10.0 6.5 8.4 10.5 7.1*

Share Information CY12 CY13 CY14 CY15 CY16 CY17 1HCY18 Market Value per share on last day of the period - PKR 6.45 10.93 12.33 15.13 17.65 13.40 12.97 Volume Weighted Average Price (VWAP) - PKR 5.97 7.08 13.99 13.09 14.33 15.75 12.64 Market Capitalization at VWAP - PKR million 5,987 7,811 15,426 14,428 15,800 17,365 13,932 No. of shares outstanding - millions 1,002 1,102 1,102 1,102 1,102 1,102 1,102

Asset Quality and Liquidity Ratios CY12 CY13 CY14 CY15 CY16 CY17 1HCY18 Gross Advances to Deposits - % 69.3% 74.5% 70.8% 65.1% 63.7% 76.0% 72.5% Net Advances to Deposits - % 64.0% 69.4% 66.1% 60.5% 59.7% 72.3% 69.1% Net Investments to Deposits - % 49.4% 33.2% 46.4% 58.8% 56.2% 51.7% 64.7% Weighted Average Cost of Deposits - % 6.84% 5.85% 6.18% 4.42% 3.47% 3.78% 3.83% Gross Infection Ratio (NPLs / Gross Advances) - % 11.9% 10.0% 8.8% 9.6% 7.8% 5.9% 6.0% Net Infection Ratio (NPLs less provisions / Net Advances) - 4.5% 3.4% 2.4% 2.7% 1.6% 1.1% 1.4% % Coverage ratio (Specific Provisions / NPLs) - % 64.7% 68.2% 74.4% 74.0% 80.6% 82.4% 77.3% Earnings Assets to Total Assets - % 86.9% 87.0% 86.4% 88.4% 89.3% 89.5% 89.5% Deposits to Shareholders Equity - times 10.6 11.3 11.6 12.1 13.2 13.9 14.7 Assets to Shareholders Equity – times 13.94 13.59 15.16 16.57 17.51 19.63 22.42

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Risk Adequacy CY12 CY13 CY14 CY15 CY16 CY17 1HCY18 Tier I Capital - PKR million 11,240 12,229 13,916 15,032 15,329 15,963 15,750 Risk Weighted Assets (RWA) - PKR in million 96,176 106,768 124,596 128,905 141,609 161,971 162,798 Tier I to RWA - % 11.7% 11.5% 11.2% 11.7% 10.8% 9.9% 9.67% Capital Adequacy Ratio - % 12.4% 11.9% 12.5% 15.4% 14.1% 12.8% 12.50% Net Return on Average RWA - % 1.2% 1.0% 1.3% 1.7% 1.3% 1.0% 0.60%

Other Non-Financial Information CY12 CY13 CY14 CY15 CY16 CY17 1HCY18 No. of Branches 233 239 246 266 288 290 290 No. of Permanent Employees 2,644 2,835 2,639 2,715 2,715 2,847 2,851 No. of ATMs 251 265 263 274 306 313 316

*half year numbers have been annualized to calculate these ratios

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5.7. ENTITY RATING REPORT

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5.8. INSTRUMENT RATING REPORT

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PART 6: TRUSTEE AND SECURITY

6.1. THE SECURITY

SNBL is not providing any security for the TFC issue. Further, the TFCs are being issued as subordinated debt as per the guidelines set by the SBP under the Banking Supervision Department Circular No. 8 dated June 27, 2006. The TFCs are unsecured and subordinated debt instruments.

In accordance with Clause 2.7.3 of the Trust Deed, at any time after the occurrence of an Event of Default, the Trustee (to the exclusion of the TFC Holders) may, at its discretion (subject to the Trustee being indemnified to its satisfaction against all proceedings, claims and demands to which the Trustee may be liable and all costs, charges and expenses which may be incurred by the Trustee in connection therewith), take such proceedings / actions against the Issuer on behalf of the TFC Holders as may be permissible under law and the Trust Deed.

6.2. THE TRUSTEE

In order to safeguard the interests of the TFC Holders, Pak Brunei Investment Company Limited has been appointed to act as Trustee for the Issue. The Issuer shall pay to the Trustee in respect of its role as a Trustee, a fixed fee of PKR 900,000/- per annum. The fee shall be payable at the beginning of each year commencing from the date of signing of the Trust Deed and on each subsequent anniversary thereof.

Although the TFCs are unsecured, the rights of the TFC holders are still protected as per the terms of the Trust Deed. The Security Trust Deed executed between the Bank and the Trustee specifies the functions and obligations of the Trustee. Furthermore, the Trustee has all the powers available to it under the Trusts Act, 1882 and the Debt Securities Trustee Regulations, 2017.

6.3. THE TRUST DEED

The Trust Deed signed between the Bank and Pak Brunei Investment Company Limited specifies the rights and the obligations of the Trustee. In the event of Issuer defaulting on any of its obligations under the terms of the Trust Deed, the Trustee may enforce Issuer’s obligations in accordance with the terms of the Trust Deed.

6.4. POWERS OF THE TRUSTEE

The Trustee shall have all the powers and discretions conferred upon trustees by the Trust Act, 1882 (to the extent not inconsistent with these presents) and, in addition thereto and subject to the terms of the DST Regulations, it is expressly declared as follows:

a) the Trustee shall in terms of the Trust Deed, for the benefit of the TFC Holders, seek the enforcement and implementation of the Issuer's covenants, in terms of the Trust Deed;

b) the Trustee may in relation to any of the provisions of the Trust Deed pay for the advice or services of, and act on the opinion or advice of, or any information obtained (whether by the Trustee or any other person duly authorized by the Trustee), from any lawyer, accountant, banker, broker, surveyor, valuer or other professional advisor or other expert whose advice, services, opinion or information may seem to it reasonably necessary, expedient or desirable and shall not be responsible for any loss occasioned by so acting;

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c) any such advice or opinion or information referred to in sub-clause (b) above may be sent or obtained by letter, telegram, telex, cable or facsimile transmission and the Trustee shall not be liable for acting on any such advice, opinion or information purporting to be conveyed by any such letter, telegram, telex, cable or facsimile transmission although the same may contain some error or may not be authentic provided that such error or lack of authenticity is not manifest;

d) the Trustee shall be at liberty to place the Trust Deed and any other instrument, documents or deed delivered to it pursuant to or in connection with the Trust Deed for the time being in its possession in any safe deposit selected by the Trustee or with any bank, any company whose business includes undertaking the safe custody of documents or any firm of lawyers and the Trustee shall not be responsible for any loss thereby incurred (save that the Trustee shall take reasonable steps to pursue any person who may be liable to it in connection with such loss);

e) save as otherwise expressly provided in the Trust Deed and unless directed to the contrary by the TFC Holders in accordance with the terms of the Trust Deed, the Trustee shall in regards to all rights, trusts, powers, authorities and discretions vested in it by the Trust Deed, have absolute and uncontrolled discretion as to the exercise or non-exercise thereof and as to the manner and time of any such exercise thereof and provided it shall have acted lawfully, it shall be in no way responsible for any loss, costs, damages, expenses or inconveniences resulting from the exercise or non-exercise thereof;

f) the Trustee (or any of its directors or officers) shall not be precluded by reason of its acting as Trustee hereunder from underwriting, guaranteeing the subscription of, subscribing of or otherwise acquiring, holding or dealing with any debentures, TFCs, shares or securities whatsoever of the Issuer or any subsidiary thereof or any other company in which the Issuer may be interested or from entering into any contract or financial or other transaction with or from engaging in any other business with, or from accepting or holding the trusteeship of any other trust deed constituting or securing any securities issued by or relating to, the Issuer or any subsidiary thereof or any other company in which the Issuer or any such subsidiary may be interested provided the aforesaid transactions are otherwise permissible under SBP’s Prudential Regulations for Banks and / or SECP Rules for Non-Banking Finance Companies. The Trustee shall not be liable to account for any profit made or payment received by it thereby or in connection therewith provided that the Trustee shall ensure that, as far as practicable, the personnel assigned to deal with normal administrative matters in relation to such other trusteeship shall not be assigned to deal with any functions in relation to the trusteeship of these presents and vice versa;

g) the Trustee may assume that no event which entitles the TFC Holders to exercise any of their rights under the Trust Deed has occurred and that the Issuer is not in breach of any of its obligations under the Trust Deed, unless it has received either a written notice to the contrary from the Issuer or a notice or information which the Trustee believes to be accurate regarding an occurrence of an Event of Default;

h) the Trustee shall not be liable for acting in relation to the Trust Deed or any related documents or any notice, request, certificate, direction or other communication or other document purporting to emanate from the Issuer or any other person notwithstanding that the same shall include some error or omission or not be authentic;

i) the Trustee may call for and rely as to any matters of fact which might reasonably be expected to be within the knowledge of the Issuer upon a certificate signed by authorized signatory(ies) of the Issuer, the names of whom shall be conveyed to the Trustee pursuant to the signing of the Trust

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Deed, as sufficient evidence thereof and shall not be bound in any such case to call for further evidence or be responsible for any loss that may be occasioned by the Trustee failing to do so; and

j) the Trustee shall not be responsible for any recitals or statements, warranties or representations of any party (other than the Trustee) contained herein or for the execution, effectiveness, genuineness, validity, admissibility in evidence or enforceability of any such agreement or other document or any obligations or rights created or purported to be created thereby (nor shall it be responsible or liable to any person because of any invalidity of any provision of such documents, whether arising from statute, law or decision of any court or otherwise).

6.5. OBLIGATIONS OF THE TRUSTEE

The Trustee shall:

(a) within 7 (seven) Business Days of receipt by the Trustee, inform the TFC Holders of any notice in writing received by it or any information received by it which it believes to be accurate of (i) any general meeting of the Issuer convened for the purpose of considering any resolution of the winding-up of the Issuer; (ii) any such resolution being proposed (whether in general meeting or otherwise); or (iii) any petition for the winding-up of the Issuer or for the appointment of an administrator of the Issuer or a receiver in respect of the property / assets of the Issuer and any breach or alleged breach by the Issuer of any of its obligations under the Trust Deed;

(b) for the purposes of Clause 2.2.2 of the Trust Deed (“Powers and Obligations of the Trustee”), inform the TFC Holders of the notice or notices referred to above in the manner set out in Paragraph 2 of Schedule 1 of the Trust Deed. In addition, the Trustee may make available at its offices during business hours a copy of the notice or notices for the inspection of TFC Holders;

(c) except as herein otherwise expressly provided, be authorized to assume without enquiry, and it is hereby declared to be the intention that it shall assume without enquiry, in the absence of express written notice to the contrary, that the Issuer is duly performing and observing all the provisions contained in the Trust Deed and that all covenants, warranties and undertakings contained in the Trust Deed are being complied with and that no event or circumstances which might constitute an Event of Default has occurred or exists;

(d) subject to Clause 2.2.1 of the Trust Deed (“Powers and Obligations of the Trustee”), be entitled to refrain from exercising any right, power or discretion vested in it hereunder unless and until (i) instructed by the TFC Holders as to whether or not such right, power or discretion is to be exercised and, if it is to be exercised, as to the manner in which it should be exercised; and (ii) the Trustee is indemnified or granted security in accordance with Clause 2.5 of the Trust Deed (“Indemnification of the Trustee”);

(e) be entitled to refrain from acting in accordance with any instructions or requests of the TFC Holders or of any other person until it shall have received such security and / or indemnity as it may require (whether by way of payment in advance or otherwise) against all costs, claims, expenses (including legal fees) and liabilities which it will or may expend or incur in complying with such instructions or requests; and

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(f) be entitled to invest the Proceeds (obtained in accordance with the provisions hereof) which, in the opinion of the Trustee, are not to be paid over or cannot legally be paid over promptly to the TFC Holders following receipt in the name or under the control of the Trustee, in accordance with the provisions of Section 20 of the Trusts Act, 1882, subject to obtaining the approval of all TFC Holders holding TFCs at the relevant time, provided that the Trustee shall not be responsible for any loss due to depreciation in value or otherwise of such investments made in accordance with the provisions hereof.

The Trustee shall not:

(a) be bound to disclose to any other person any information relating to the Issuer if such disclosure would or might in its sole opinion constitute a breach of any law or regulation or be otherwise actionable at the suit of any person, unless otherwise required to be disclosed by law or under any direction or order of any competent authority or court. The Trustee shall give a prior notice to the Issuer and cooperate with the Issuer to enable the Issuer to invoke any remedies that are available under the law to prevent such disclosure;

(b) under the Trust Deed be concerned with the interests of or owe any duty whatsoever to any persons other than the TFC Holders; and

(c) be under any duty to disclose to any person interested hereunder any confidential information supplied to it which comes to its knowledge through any of its affiliates, directors, employees, delegates or agents and shall not be liable to any person for not doing so.

6.6. TRUSTEE AND TFC HOLDERS

a) Subject to the provisions of the Trust Deed and, in particular to the provisions of Clause 2.2.1 and 2.2.2 thereof, the Trustee shall:

i. act as trustee in accordance with any instructions given to it by the TFC Holders; and

ii. if so instructed by the TFC Holders, refrain from exercising a right, power or discretion vested in it as trustee under the Trust Deed.

The instructions of the TFC Holders for the purposes of this Clause and the Trust Deed shall be deemed to be given in writing by the TFC Holders holding together more than 50% (fifty percent) of the total outstanding face value of TFCs or supported by an Extraordinary Resolution passed at the meeting of the TFC Holders (as detailed in the Provisions for Meetings of the TFC Holders attached in Schedule 1 of the Trust Deed).

b) The Issuer will, on request from the Trustee, promptly give to the Trustee a written certificate in such form as the Trustee may reasonably require setting out all information available to them to facilitate the performance by the Trustee of its rights, trusts, powers, authorities, discretions, duties and obligations under the Trust Deed, such certificate to be signed as contemplated in accordance with the Trust Deed.

c) Notwithstanding any other provision of the Trust Deed, the Trustee shall not be obliged to provide any indemnity to, or in favor of, any receiver.

d) Nothing contained in the Trust Deed shall, in any case in which the Trustee has failed to show the degree of care and diligence required of it as trustee having regard to the provisions of the Trust

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Deed imposing or conferring on the Trustee any obligations, powers, authorities or discretions, relieve the Trustee from any liability for breach of trust or any liability which by virtue of any rules of law would otherwise attach to it in respect of any negligence, default, breach of duty or breach of trust of which it may be guilty in relation to its duties under the Trust Deed.

6.7. OBLIGATION TO ACT WITH DUE CARE

Both the Issuer and the Trustee agree to act in good faith and with due diligence and with all reasonable care which is in the circumstances required in the performance of their duties and obligations under the Trust Deed or when exercising any power, authority or discretion which is vested in them under the Trust Deed.

6.8. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE ISSUER

The Issuer hereby represents and warrants:

a) that the execution by it of the Trust Deed and the issuance of the TFCs does not contravene any of the provisions of its constitutive documents and rules and regulations, consents, or any law or any agreement to which it is expressed to be a party and constitute valid, legal and binding obligations of the Issuer in terms thereof;

b) that all actions on the part of its officers, directors and shareholders necessary to authorize the execution of and performance by it of the obligations expressed to be assumed by it under the Trust Deed and the TFCs have been taken;

c) that no Event of Default has occurred as of the date of the Trust Deed;

d) that there is no reason to the knowledge of the Issuer whereby the application of the Issuer for listing of the TFCs or approval of the Prospectus may be revoked or cancelled by the SECP or the Stock Exchange, as the case may be;

e) that it shall inform the Trustee of (i) any general meeting of the Issuer convened for the purpose of considering any resolution for the winding up of the Issuer; (ii) any such resolution being proposed (whether in general meeting or otherwise) or; (iii) any petition for the winding up of the Issuer or for the appointment of an administrator of the Issuer or a Receiver in respect of the property or assets of the Issuer and any breach by the Receiver in respect of the property or assets of the Issuer and any breach or alleged breach by the Issuer of any of its obligations under the Trust Deed;

f) that the TFCs and the Trust Deed executed by the Issuer are valid, enforceable and binding obligations of the Issuer and there has been no Event of Default in relation to any such documents; and

g) that all governmental, regulatory, creditors' and corporate consents, approvals, registrations and authorizations (to the extent required) for the purposes of the TFC Issue (other than for the listing of the TFCs on the Stock Exchange) have been obtained.

The Issuer covenants with the Trustee:

a) that the Issuer shall ensure that the Issuer or its appointed registrar will, at all times maintain a correct register of TFC Holders showing their names and addresses, the amount of TFC(s) held by

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each and the date on which such TFC Holder was registered as the holder and the date on which he ceased to be so registered; provided nevertheless the Issuer shall not be responsible for the foregoing where the TFC Holders have not intimated the transfer of the TFCs in writing to the Issuer or the registrar, as applicable;

b) that the Issuer will duly perform and observe the obligations imposed upon it by the Trust Deed;

c) that as and when requested by the Trustee, the Issuer shall ensure that the Issuer or registrar shall provide to the Trustee the Register of TFC Holder and / or extracts therefrom as well as any other document or information pertaining to the TFCs and the TFC Holders. Additionally, the Issuer shall ensure that the Issuer or the Registrar send extracts of the Register of TFC Holders to the Trustee on a semi-annual basis;

d) that the Issuer shall submit to the Trustee the annual audited accounts of the Issuer within 30 (thirty) days of publication of such accounts and semi-annual and quarterly accounts within 15 (fifteen) days of publication;

e) that the Issuer shall ensure that during the period that the TFCs or any of them are outstanding, the Issuer will comply with any laws, regulations or conditions applicable to financial ratios and commitments applicable to the business of the Issuer;

f) that payment of all amounts by the Issuer (if any) to the TFC Holders in respect of the TFCs will be made free and clear of deductions of any nature whatsoever except for deductions, if any required compulsorily to be made by law, for which the Issuer will provide suitable evidence of having deposited the amount deducted with the relevant government authority / department / treasury;

g) that the Issuer shall ensure that any investment in the TFCs by the sponsors of the Issuer, individually or collectively, either at the time of subscription or acquired by transfer, does not exceed in the aggregate, at any time, 50% (fifty percent) of the total amount of the outstanding value of the TFCs;

h) the Issuer and its affiliated entities which are under the control (including subsidiaries) or significant influence of the Issuer will not be eligible to invest in the TFC Issue as per the restrictions imposed by BPRD Circular No. 6 dated August 15, 2013 (clause vi of Annexure 2);

i) that the Issuer shall not directly or indirectly, finance the purchase of any TFCs by any person or entity or grant any advances against the security of any TFCs issued hereunder to any TFC holder; and

j) that the Issuer shall, at all times, comply with the requirements of applicable laws including, without limitation, the terms and conditions of the Basel III Circular.

6.9. EVENTS OF DEFAULT

6.9.1. In the event the Issuer defaults in discharging the Issuer’s option redemption obligations (as defined in the Trust Deed) and such default is not rectified within 7 (seven) days, subject to Clause 2.7.2 of the Trust Deed, the Trustee is authorized on behalf of TFC Holders to initiate Legal Proceedings and file Winding up Application. It is clarified that in order to give effect to the SBP Circular, the only remedy available to the Trustees and the TFC Holders in respect of default by the Issuer of the Issuer’s Option Redemption Obligations shall be by way of filing the Winding up

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Application and Legal Proceedings. Where the Issuer has defaulted on the Issuer’s Option Redemption Obligations, it is clarified that in the Winding up Application and Legal Proceedings the Trustee and / or the TFC Holders shall be entitled to claim that the entire outstanding face value of the TFCs have become immediately due and payable without any requirement of prior demand of such entire outstanding amount or acceleration notice to this effect.

6.9.2. An Event of Default will be deemed to have occurred, by a declaration in writing of the Trustee informing the Issuer, that the Trustee has been notified in writing by the TFC Holders representing more than 50% (fifty percent) of the total outstanding face value of the TFCs or supported by an Extraordinary Resolution passed at the meeting of the TFC Holder(s) certifying the occurrence of any of the following events:

(a) Breach of other obligation The Issuer does not comply with any provision of the Trust Deed or the TFCs (other than the Issuer’s option redemption obligations) and such non-compliance continues for 30 (thirty) days after the written notice is received by the Issuer from the Trustee.

(b) Misrepresentation A representation, warranty or statement made or repeated in or in connection with the Trust Deed, TFCs, or in any document delivered by or on behalf of the Issuer under or in connection with the Trust Deed or TFCs is or proves to have been incorrect or misleading in any material respect or any statement, representation or warranty made or repeated by the Issuer in any notice, certificate or statement referred to or delivered under the Trust Deed is or proves to have been incorrect or misleading in any material respect, or any such statement, representation or warranty is incorrect in any material respect at any time and the defect is not rectified within 30 (thirty) days after the written notice is received by the Issuer from the Trustee.

(c) Cross-default The occurrence of any of the following which has a Material Adverse Effect:

(i) Any Financial Indebtedness of the Issuer is not paid when due, including any grace period that may be applicable thereto; or (ii) An event of default howsoever described occurs under any document relating to Financial Indebtedness of the Issuer; or (iii) Any Financial Indebtedness of the Issuer becomes prematurely due and payable or is placed on demand as a result of an event of default (howsoever described) under the document relating to that Financial Indebtedness; or (iv) Any commitment for, or underwriting of, any Financial Indebtedness of the Issuer is cancelled or suspended as a result of an event of default (howsoever described) under the document relating to that Financial Indebtedness; or (v) Any Security Interest becomes enforceable.

(d) Insolvency (i) The Issuer is unable to pay its debts as they fall due or becomes insolvent, or admits inability to pay its Financial Indebtedness as they fall due; or

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(ii) The Issuer suspends making payments on all or any class of its debts or announces an intention to do so or a moratorium is declared in respect of any of its Financial Indebtedness.

(e) Insolvency proceedings (i) A meeting of the Issuer is convened for the purpose of considering any resolution for (or to petition for) its winding-up or its administration or any such resolution is passed; or (ii) Any order for the winding-up or administration of the Issuer is made which is not suspended, revoked or set aside within a period of 45 (forty-five) days; or (iii) Any other step (including petition, proposal or convening a meeting) is taken by the Issuer with a view to the rehabilitation, administration, custodianship, liquidation, winding-up or dissolution of the Issuer or any other similar proceedings involving the Issuer.

(f) Appointment of Receivers and Managers (i) Any liquidator, trustee in bankruptcy, judicial custodian, compulsory manager, receiver, administrative receiver, administrator or the like is appointed in respect of the Issuer or any material part of its assets and is not discharged within 30 (thirty) days of such appointment; or (ii) The directors of the Issuer request the appointment of a liquidator, trustee in bankruptcy, judicial custodian, compulsory manager, receiver, administrative receiver, administrator or the like; or (iii) Any other steps are taken to enforce any Security Interest and such steps are not stayed within 30 (thirty) days thereof.

(g) Creditors’ process Any attachment, sequestration, distress or execution affects any material part of the assets owned by the Issuer and is not discharged within 30 (thirty) days of such attachment, sequestration, distress or execution being levied.

(h) Cessation of business (i) The Issuer ceases, or threatens to cease, to carry on all or a substantial part of its business or any license or permissions to carry on the business in Pakistan is suspended or cancelled; (ii) Issuer’s banking license is suspended or cancelled; or (iii) If, subsequent to the listing of TFCs in terms of Clause 2.12.1 of the Trust Deed, the Stock Exchange suspends the trading of the TFCs pursuant to the Rule and Regulations of the Stock Exchange and the same is not reversed with a period of 60 (sixty) days; (iv) failure to procure listing of the TFCs in terms of Clause 2.12.1 of the Trust Deed; (v) if, subsequent to the listing of the TFCs in terms of Clause 2.12.1 of the Trust Deed, the Issuer fails to comply with or contravenes with any of the provisions of the Rule and Regulations of the Stock Exchange and/or any other laws and regulations which may be applicable from time to time including any conditions imposed on it by the Stock Exchange once listed.

(i) Unlawfulness It is or becomes unlawful for the Issuer to perform any of its material obligations under the Trust Deed or the TFCs and/or any other document executed by the Issuer in respect thereof and the Issuer and the Trustee have been unable to agree, within a period of 30

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(thirty) days from the receipt of a notice from the Trustee, on an appropriate replacement provision containing such terms so as not to relegate either Party to a detrimental or less favourable position than that held under the Trust Deed or TFCs (as originally executed).

(j) Change of provisions of the Trust Deed All or any material provisions of the Trust Deed (i) do not have effect or cease to have effect in accordance with its terms, or (ii) are or become void, voidable, illegal or unenforceable.

(k) Compromise or arrangement with the members or creditors

Taking of any step by the Issuer for the purpose of entering into a compromise or arrangement with any of its members, or creditors, generally or any class of them under the provisions of the Companies Act, 2017.

6.10. CONSEQUENCES OF EVENTS OF DEFAULT

i. At any time after the occurrence of an Event of Default, the Trustee (to the exclusion of the TFC Holders) may, at its discretion (subject to the Trustee being indemnified to its satisfaction against all proceedings, claims and demands to which the Trustee may be liable and all costs, charges and expenses which may be incurred by the Trustee in connection therewith), take such proceedings / actions against the Issuer on behalf of the TFC Holders as may be permissible under law. ii. The Trustee shall be entitled to prove in any winding-up of the Issuer in respect of any amounts payable in relation to the TFCs or other moneys payable under any provision of the Trust Deed.

6.11. APPLICATION OF PROCEEDS

6.11.1. In the event of a winding up order being made by a court of competent jurisdiction, payments to the TFC Holders shall be (a) superior to the claims of common shareholders, (b) subordinate to and rank inferior to all other debts of the Issuer including deposits and any Tier 2 Capital instruments, and (c) paripassu without preference amongst themselves. 6.11.2. Upon enforcement of the Issuer’s Option Redemption Obligations / Non-Option Redemption Obligations in terms of the Trust Deed, any Proceeds recovered / received by the Trustee from such enforcement shall be applied by the Trustee in the following manner:

(a) firstly, in payment of all costs, charges, expenses and liabilities lawfully incurred and payments made by the Trustee and every Receiver, attorney, agent, delegate, sub- delegate or other person appointed by the Trustee in the execution of any powers, authorities or discretions vested in it or him pursuant to the Trust Deed including (without limitation upon the foregoing) the remuneration of the Trustee under the Trust Deed and of every such Receiver or such other person; (b) secondly, in or towards payment of the outstanding Issue Price and declared, but unpaid Profit Payment Amount to the TFC Holders on a paripassu basis in proportion to the amount owed to the respective TFC Holders pursuant to the TFCs; and (c) lastly, the surplus (if any) after the payment of the amounts mentioned in (a) and (b) above, shall be paid to or to the order of the Issuer or other person for the time being

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entitled thereto, subject to such person providing evidence as may be required by the Trustee in support of the claim.

6.11.3. Payment of the Proceeds to the TFC Holders shall be made by the Trustee net of any deductions required under the law (against surrender of the original TFCs, where applicable).

6.12. MANDATORY CONVERSION

Conversion Event includes each of the following events:

(a) Where all or part of the TFCs are subject to a mandatory conversion into common shares at the discretion of SBP in case of the Issuer’s inability to exercise the lock-in clause; (b) Where all or part of the TFCs are subject to a mandatory conversion into common shares at the discretion of SBP in case of the Issuer’s inability to exercise the non-cumulative feature; (c) Where all or part of the TFCs are converted into common shares upon the declaration by the SBP of the occurrence of a Point of Non-Viability event; or (d) Where all or part of the TFCs are converted into common shares by the Issuer upon the occurrence of a Pre-Specified Trigger Event.

6.12.1. Lock-in Clause

In compliance with the lock-in requirement provided under the Basel III Circular, neither profit nor principal can be paid in respect of the TFC Issue, if such payment will result in a shortfall in the Issuer’s minimum capital requirement or capital adequacy ratio or results in an increase in any existing shortfall in minimum capital requirement or capital adequacy ratio. It being clarified that the profit rate for such period shall effectively be 0% (i.e. no profit). Any inability to exercise the lock-in clause will subject the TFCs to mandatory conversion into common shares, or their write-off, at the discretion of the SBP subject to Condition 6.12.6 given below.

6.12.2. Non-Cumulative Feature

In compliance with the requirements as provided under the Basel III Circular, any unpaid profit will be non-cumulative. Any inability to exercise the non-cumulative feature will subject the TFCs to mandatory conversion of the TFCs into common shares or their write-off, at the discretion of the SBP subject to Condition 6.12.6 given below.

6.12.3. Loss Absorbency - Point of Non-Viability Event

As per the requirements of the Basel III Circular, the following loss absorbency conditions will apply to the TFCs: • Upon the occurrence of a Point of Non-Viability (“PONV”) event as defined below, SBP may at its option, fully and permanently convert the TFCs into common shares of the Issuer subject to Condition 6.12.6 and / or have them immediately written off (either partially or in full).

Under Basel III Circular, a “PONV” event has been defined as the earlier of:

a) a decision made by SBP that a conversion or temporary / permanent write-off is necessary,

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without which the Issuer would become non-viable; or b) the decision to make a public sector injection of capital, or equivalent support, without which the Issuer would have become non-viable, as determined by SBP. • The amount to be converted into common shares and / or to be written off shall be solely determined by SBP. • In the event of conversion of the TFCs into common shares by SBP, any person consequently holding 5% (five percent) or more of the paid-up share capital of the Issuer will be required to comply with the fit and proper criteria of SBP.

Conversion Mechanism:

In the event of conversion of the TFCs into common shares by SBP, the TFCs shall be converted in the following manner:

(a) The conversion rate / price shall be based on the market value of the shares of the Issuer on the date of trigger of PONV as declared by SBP; and (b) The number of shares to be issued to TFC Holders at the time of conversion will be equal to the ‘Outstanding Face Value of the TFC’ divided by market value per share of the Issuer’s common equity on the date of trigger of the PONV event as declared by SBP, subject to Condition 6.12.6 given below.

6.12.4. Loss Absorbency - Pre-Specified Trigger Point

• The TFCs shall be permanently converted into common shares of the Issuer upon the occurrence of a Pre-Specified Trigger Point as defined below and the Issuer shall immediately notify the SBP upon the occurrence thereof. • Under Basel III Circular, a “Pre-Specified Trigger Point” shall be deemed to occur when the Issuer’s CET-1 (Common Equity Tier 1) ratio falls to or below 6.625% of its Risk Weighted Assets (RWA). • In the event of conversion of the TFCs into common shares, any person consequently holding 5% (five percent) or more of the paid-up share capital of the Issuer will be required to comply with the fit and proper criteria of SBP.

Conversion Method:

The Issuer shall have full discretion to determine the amount of the TFCs to be converted into common shares subject to the following conditions:

1. Where the Issuer’s CET-1 reaches the loss absorption trigger point, the aggregate amount of Additional Tier 1 Capital to be converted must at least be the amount sufficient to immediately return the CET-1 ratio to above 6.625% of total RWA (if possible); 2. the converted amount should not exceed the amount needed to bring the CET-1 ratio to 8.5% of RWA (minimum CET-1 of 6.0% plus capital conservation buffer of 2.5%; 3. the conversion rate / price shall be based on the market value of the shares of the Issuer on the date of occurrence of the Pre-Specified Trigger Point; and 4. the number of shares to be issued to TFC Holders at the time of conversion will be equal to the ‘Outstanding Face Value of the TFC’ divided by market value per share of the Issuer’s common

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equity on the date of occurrence of the Pre-Specified Trigger Point, subject to Condition 6.12.6 given below.

Write-off Provisions:

In case conversion is not possible following the Pre-Specified Trigger Event, such number of TFCs shall be written off so as to cause an increase in the CET-1 ratio to above 6.625% of total RWA. In the event of a write-off, the following conditions shall apply: (a) The claim of the TFC on liquidation of the Issuer is reduced to (or below) the value of the written-off instrument; (b) The amount of the TFC to be paid in case of a call is reduced by the written-off amount of the instrument; and (c) The distributions (profit) payable on the instrument will be permanently reduced.

6.12.5. Material Adverse Change

If there is any material adverse change in applicable laws or generally in the market conditions applicable in Pakistan, the Issuer would have the option to redeem the TFCs, subject to receipt of prior written approval of SBP.

6.12.6. Conversion Conditions

Notwithstanding any other provision of the Trust Deed, the conversion of TFCs into common shares pursuant to a Conversion Event is subject to

(a) the Issuer obtaining approval from its shareholders and SECP as required under applicable laws; and (b) maximum number of additional shares being issued in respect of all Conversion Events not exceeding 360,000,000 (three hundred sixty million) additional shares.

6.13. EXERCISE TO THE CALL OPTION

6.13.1. Subject to receipt of written approval from SBP and compliance with its minimum capital requirements and capital adequacy ratio, the Issuer will have an option to redeem in full (hereinafter referred to as “Call Option”, as detailed below) or part (hereinafter referred to as the “Partial Call Option”) the outstanding face value of the TFCs in terms of Clauses below. 6.13.2. The Call Option or the Partial Call Option may be exercised by the Issuer after obtaining written approval from SBP at any time after 5 (five) years from the Issue Date by giving to the TFC Holders and the Trustee at least 60 (sixty) days’ prior notice in writing, specifying the Profit Payment Date on which the Issuer will redeem (“Option Redemption Date”) all of the then outstanding TFCs (i.e. the Call Option) or a portion of the then outstanding TFCs (i.e. the Partial Call Option) by payment of the amount(s) calculated in accordance with the provisions of the Clauses below, whereupon the TFC Holders shall be bound to so accept the redemption. Notwithstanding the above, the Issuer shall not implement the Call Option or Partial Call Option unless they replace the amount called with capital of same or better quality.

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6.13.3. In case of the exercise of the Call Option, the Issuer will pay the outstanding Issue Price allocated to then outstanding TFCs (the “Option Redemption Amount”) along with any declared Profit Payment Amount. 6.13.4. In case of Partial Call Option, the TFCs shall be redeemed from each TFC Holder on a pro-rata basis. If the pro-rata calculated number of TFCs so redeemable from a TFC Holder is not a whole number, it shall be rounded up to the next whole number. 6.13.5. The notice for the exercise of the Partial Call Option above shall specify the portion of the outstanding Issue Price intended to be redeemed (“Partial Option Redemption Amount”). 6.13.6. In case of exercise of the Partial Call Option the Issuer will pay the Partial Option Redemption Amount on the Partial Option Redemption Date as specified in the Partial Call Option notice. 6.13.7. Any notice of Call Option or Partial Call Option, once issued shall be irrevocable. In case of any dispute as to the amounts payable by the Issuer to the TFC Holders upon exercise of Call Option or the Partial Call Option, the determination of the Trustee in this regard, save for manifest error, shall be final and binding on the Issuer and the respective TFC Holders.

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PART 7: MANAGEMENT OF THE BANK

7.1. BOARD OF DIRECTORS OF THE BANK

The Board of Directors of the Bank consists of eight (8) directors, out of which, two (2) are independent directors, four (4) are non-executive directors, and two (2) are executive directors i.e. the CEO and COO of the Bank. The details of current serving directors including their experience and education are mentioned below:

Name Designation CNIC No. Directorships in Other Companies Mr. Alauddin Feerasta Chairman / Non- 35202-2634617-9 • Spintex Limited Executive Director • Rupali foods (Pvt.) Limited Mr. Mohammad Aftab President and CEO 42301-2798594-5 • The Institute of Bankers Manzoor Pakistan Mr. Nooruddin Feerasta Non-Executive 35201-1214923-7 • Rupali Polyester Limited Director • Rupafil Limited • Rupafil PowerGen (Pvt) Limited • Rupali Nylon (Pvt.) Limited Mr. Amin Feerasta Executive Director 35202-2634618-5 • 1 Link (Guarantee) Limited • Agha Khan Hospital & Medical Mr. Muhammad Rashid Non-Executive 61101-3839142-3 • Rupali Polyester Limited Zahir Director Mr. Inam Elahi Independent 42301-0931672-9 None Director Mr. Jamil Hassan Independent 42301-7072141-9 • L’Agricole Solutions (Pvt.) Hamdani Director Limited • Pakistan-France Business Alliance Mr. Manzoor Ahmed Director 42301-1130655-7 • Askari Bank Limited (NIT Nominee) • General Tyre & Rubber Co. Limited • Siemens Pakistan Engineering Ltd • Sui Northern Gas Pipeline Co. Ltd • Bank Al-Habib Limited • Fauji Fertilizer Company Ltd. • Hub Power Company Ltd. • Mari Petroleum Company Ltd. • Council Member of the Institute of Bankers Pakistan

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The BoD has formed various sub-committees as listed below to ensure that critical business areas are given specific importance:

• Audit Committee • Credit Committee • Risk Management Committee • Human Resource and Remuneration Committee • Committee of Independent Directors • IT Committee

7.2. PROFILES OF DIRECTORS

Mr. Alauddin Feerasta - Chairman/Non-Executive Director

Mr. Alauddin Feerasta is the Chairman and Sponsor Director of Soneri Bank Limited. Besides this, he is also managing two other corporate entities namely Spintex Limited and Rupali Foods (Pvt.) Limited as its Chairman. He is a veteran and renowned industrialist having diversified experience of over 40 years in manufacturing and marketing of Polyester Staple Fiber, Polyester Yarn, Trading of Cotton Yarn and Commercial Banking. He possesses high level of expertise, which includes setting up of large-scale industrial plants, evaluating project feasibilities, bid evaluation, contract negotiation with International Plant & Machinery suppliers.

Under his leadership, the Bank has shown strong sustainable financial and operational performance with improved profitability creating greater stakeholder value.

Mr. Mohammad Aftab Manzoor - President & Chief Executive Officer / Director

Mr. Mohammad Aftab Manzoor took over the charge as President & Chief Executive Officer of the Bank in 2011. He is a senior banker with over 28 years of banking experience. He had also served the MCB Bank Ltd, Allied Bank Ltd and KASB Bank Ltd in the capacity of Chief Executive Officer and provided them with the strategic leadership and was instrumental in strengthening, repositioning and building them into leading market players. In 1977, he obtained an MBA degree from Quaid-e-Azam University, Karachi. He has also participated in various training programmes that include Loan Restructuring Seminar – World Bank Washington DC, Leading Change and Organizational Renewal – Harvard Business School, Effective use of Information Technology – Sloan Business School, MIT etc. He has held the following board positions:

- Chairman, Pakistan Banks’ Association (PBA) - Member Executive Council - Institute of Bankers, Pakistan (IBP) - Director, Pakistan Institute of Corporate Governance (PICG) - Director, MCB Bank Limited, - Director, Habib Allied Bank Limited UK - Director, Allied Bank Limited - Director, Khushali Bank Limited - Director, First Women Bank Limited - Director, SME Bank Limited - Director, Allied Asset Management Limited

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- Director, Competitive Support Fund - Trustee, Lahore University of Management Sciences (LUMS) - Director, Trading Corporation of Pakistan (TCP)

In Soneri, he is currently chairing the management committees and is member of the Credit, Human Resource and Risk Management Committees of the Board. With his diverse banking experience and instrumental leadership abilities, the Bank is growing from strength to strength.

Mr. Nooruddin Feerasta - Non-Executive Director

Mr. Nooruddin Feerasta is the sponsor director of the Bank. He is also managing his business interests in Rupali Polyester Limited, Rupafil Limited, Ruapli Nylon (Pvt.) Limited and Rupafil PowerGen (Pvt.) Limited where he is the Chairman and Chief Executive Officer.

He joined the Group business after completing his education in MBA from USA in 1986. He has also participated in various International and local seminars on industrial developments, marketing strategies, laws and taxation.

He is a reputable industrialist of Pakistan having business interests ranging from Polyester Staple and Polyester Yarn manufacturing, marketing to Trade and Banking. He has diversified experience of more than 28 years in managing industry’s operational activities such as marketing, finance, manufacturing, plant operations and legal and corporate management. At SBL, presently he is the Chairman of Board’s Credit Committee and Member of the Audit Committee.

Mr. Amin A. Feerasta - Executive Director / Chief Operating Officer

Mr. Amin Feerasta is Executive Director / Chief Operating Officer and acting CEO when necessary. He has more than seventeen years of diversified commercial, corporate, investment, special assets, project finance, IT and administration experience. During the course of his career with a private commercial bank, he had worked in multiple departments in senior management positions with special focus on Credit and SAM. In the year 1999, he received his BSC Finance degree from Santa Clara University, USA.

He is a certified Director from Pakistan Institute of Corporate Governance and has attended various other seminars, workshops conducted by professional institutions both local and international. At Soneri, he is member of various senior level Management Committees as well as Board’s Risk Management Committee.

Mr. Muhammad Rashid Zahir - Non-Executive Director

Mr. Muhammad Rashid Zahir is an elected director on the Board of the Bank since 2011 and is also the Member on the Board Audit and Credit Committees. He is an MBA from Institute of Business Administration, Karachi in 1968. He has also attended programs on Islamisation of Economy, Advanced Management for Senior Executives, Lease Financing and Industrial Projects organized by national and international organizations.

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He has an ample banking experience that dates back to 1968. He remained chairman of the board of Saudi Pak Commercial Bank Ltd, Saudi Pak Real Estate Ltd., Saudi Pak Insurance Company Ltd., Saudi Pak Leasing Company Ltd. and National Development Finance Institutions. He had also assisted the Implementation Committee appointed by the President of Pakistan for re-organization of Public Sector Enterprises in 1978. Currently, he is serving as member on the board of Rupali Polyester Ltd – the group company.

In the year 2015, he attended week long course on “Accelerated Certificate in Company Direction - International” offered by the Institute of Directors, UK arranged in Pakistan by the Pakistan Institute of Corporate Governance.

Mr. Jamil Hassan Hamdani - Independent Director

Mr. Hamdani is an independent director on the Board of the Bank. He has an ample banking experience that dates back to 1973 and had worked with various foreign banks. In 2016, he retired as Managing Director of Credit Agricole Indosuez (Suisse) SA where he was responsible to oversee areas like Pakistan, Bangladesh, Sri Lanka & Nepal. Presently, he is Chairman/CEO Pakistan France Business Alliance. He did his O & A levels (Cambridge) from Aitcheson College, Lahore. He furthered his education and received bachelor’s degree in Economics from Government College University, Lahore.

As regards his presence on the Board Committees, he is currently the member of the Audit Committee, Credit Committee and Human Resource & Remuneration Committee. He is also the Chairman of the Committee of Independent Directors of the Board

Mr. Manzoor Ahmed - Director (NIT Nominee)

Mr. Manzoor Ahmed represents the interests of National Investment Trust (“NIT”) and has been serving as its Nominee on the board of the Bank since 2004. He has more than 23 years of experience working with the NIT in managing Investments, Capital Market Operations and Asset Management affairs. Presently, he is the acting Managing Director of NIT.

In 1989, he received his MBA degree with distinction from Bahauddin Zakriya University, Multan. He has also passed banking diploma examination (DAIBP) in addition to a candidate for CFA (Chartered Financial Analyst) level-III. Mr. Manzoor Ahmed is among the few persons who is the “Certified Director”, and in February 2012, he has passed the “Board Development Series Certificate” program conducted by Pakistan Institute of Corporate Governance (PICG).

Over the period, he has attended number of short courses related to Investment Analysis, Portfolio Management and Leasing & Capital Markets arranged by Institute of Bankers in Pakistan, Pakistan Institute of Management, Lahore University of Management Sciences, Amembal & Halladay of USA. In the year 2012, he also received “Certificate of Director Education” from Pakistan Institute of Corporate Governance. At Soneri, he is currently chairing the Human Resource & Remuneration Committee as well as Board’s Risk Management Committee. He is also member of the Board Credit Committee.

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Mr. Inam Elahi - Independent Director

Mr. Inam Elahi is an independent director on the Board of SBL. He has a rich banking experience of more than 43 years during which time he was instrumental in managing Allied Bank Ltd, National Bank Ltd, Platinum Commercial Bank Ltd and Saudi Pak Commercial Bank Ltd in the capacity of President & Chief Executive Officer and provided them with the strategic leadership with which these corporate entities were risen to new heights of efficiency, growth and prosperity. He had also served as the Chairman, SBP Committee for resolution of disputes during 2003-2007.

In 1994, the Institute of Bankers in Pakistan has awarded him Gold Medal for his meritorious services and outstanding contributions to banking in Pakistan. He is the fellow of the Institute of Bankers Pakistan and has also vast experience of attending various seminars and workshops - both local and international.

As regards his presence on Board Committees, he is currently the Chairman Audit Committee, Member of Risk Management Committee, Human Resource & Remuneration Committee and Committee of Independent Directors of the Board.

7.3. PROFILES OF KEY MANAGEMENT EXECUTIVE

Mr. Mirza Zafar Baig - Chief Financial Officer

Mr. Mirza Zafar Baig possesses an overall experience of 21 years in the banking industry. He joined Soneri Bank in January 2018 from Bank Alfalah where he held the position of CFO. His varied experience at senior management levels has equipped him to contribute to an organizations growth and success. He has a diversified and in-depth experience in the core areas of Finance, Strategy and automated solutions.

Prior to Bank Alfalah, he was associated with the Royal Bank of Scotland (RBS) and ABN AMRO which later became Faysal Bank. He held the position of Head-Strategic Development at Faysal Bank and the position of Chief Financial Officer at ABN / RBS prior to that. He has also worked with E & Y in their audit wing.

Mr. Muhammad Altaf Butt - Company Secretary

Mr. Muhammad Altaf Butt is a Law graduate as well as fellow member of the Institute of Corporate Secretaries of Pakistan. He also did his Masters’ in Commerce from Hailey College of Commerce University of the Punjab, Lahore. He is also a certified director from the Institute of Directors, UK.

He joined the Bank as Company Secretary in January 2010 and has over 17 years of experience which is a blend of working with the regulator i.e. Securities & Exchange Commission of Pakistan and a private sector.

Mr. Muhammad Qaisar - Head of Commercial and Retail Banking

Mr. Muhammad Qaisar started his career with MCB Bank Limited, where he had enriching experience in the field of Credit and Risk. Later he was associated with Bank Al Falah where he was the Regional Corporate Head since 2013. He possesses more than 21 years of experience in the banking and financial service industry. Mr. Qaisar has a Master’s degree in Business Administration.

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Mr. Masood Tyabji - Head of Corporate & Investment Banking

Mr. Masood Tyabji possess a diverse geographical and functional wholesale banking experience spanning over 25 years with banks including Citi Bank, ANZ Grindlays, HSBC, Gulf International and TAIB. Mr. Masood was associated with Habib Overseas Bank Limited, Johannesburg where he was the Chief Operating Officer. An MBA from Institute of Business Administration, Mr. Masood has successfully led and managed large corporate and financial institutions relationship portfolios both on Islamic and conventional side. He joined Soneri Bank Limited in August 2017 as the Head of Corporate & Investment Banking Group.

Mr. Shahid Abdullah - Head of Treasury, Capital Markets, FI and PRI

Mr. Shahid Abdullah joined Soneri Bank Limited in January 2011 as the Head of Treasury and FI. He has a Business Administration degree in Finance from Indiana University, Bloomington. He has 24 years of experience in the banking and financial service industry. His contribution has been instrumental towards streamlining Soneri Bank’s Treasury Function with includes Corporate Sales, Capital Market, Foreign Exchange, Money Market, Financial Institutions and Home Remittances.

Tariq Yar Khan - Chief Compliance Officer

Mr. Tariq Yar Khan joined Soneri Bank Limited as the Head of Branch Banking operations in September 2013. He possesses more than 15 years of extensive experience in the field of Compliance & Control, Branch Banking Operations, Policy & Procedures and Centralized Operations. He was previously the Country Head Branch Banking Operations at NIB Bank. Mr. Tariq has also been associated with Atlas Bank, MCB Bank, and PICIC Commercial Bank where his responsibilities centered around branch banking and centralized operations. He acquired his Master’s degree from the Department of Public Administration, University of Karachi and DAIBP from Institute of Bankers Pakistan.

Ms. Anita Lalani - Head of Human Resources

Ms. Anita Lalani is currently the Head of HR, Legal and General Services. She possesses more than 25 years of banking experience. She is an IBA graduate. Soon after finishing her MBA, she joined the banking industry as a Management Trainee at MCB. Spending 15 years at MCB, she worked in senior positions in various departments and eventually Human Resources. She left MCB to join Standard Chartered as the Country Head of Talent Acquisition. Ms. Anita joined Soneri Bank as Head of Human Resources in January 2012.

Mr. Ali Hassan Shah - Head of Operations

Mr. Ali Hassan Shah has valuable experience of 28 years in the banking and financial service industry. He has been associated with Barclays, Samba and Citibank in the past where has held senior management positions primarily in operations. Ali has a Master’s degree in Business Administration from National University, California and joined Soneri Bank as Head of Operations in April 2015.

Mr. Mubarik Ali - Country Credit Head

Mr. Mubarik Ali joined Soneri Bank in November 2017 and is currently the Head of Credit. He has a Master’s of Business Administration degree from the Institute of Business Administration. He has over 25

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years of experience in the banking and financial service industry with banks such as MCB First National Equities, Trust Investment Bank and National Asset Management Company. His contribution has been instrumental towards streamlining Soneri Bank’s Credit Division.

Mr. Ahmed Saqib Asad - Chief Information Officer

Mr. Saqib Asad is the Chief Information Officer, responsible for managing the bank’s IT related strategic plans for the bank’s growth and success. Mr. Ahmed joined Soneri Bank from Standard Chartered Bank Pakistan where he was the Head of Information Technology. He has done his Masters in Information Technology and has more than 30 years of experience in the banking and financial service industry. Prior to joining Standard Chartered Bank, Mr. Asad was the Chief Information Officer at Emirates Global Islamic Bank Limited and earlier was associated with Dawood Bank Limited and Bank Alfalah Limited.

Mr. Syed Asim Ali - Head of Audit

Mr. Syed Asim Ali possess over seventeen years of experience in the banking and financial service industry. He joins us from Habib Metro Bank where he was designated as Head of Internal audit. Prior to this he was associated with MCB Bank and State Bank of Pakistan where he had an enriching experience in Audit, Risk, Compliance, IT Management and Governance. Mr. Asim is a Certified Information Systems Auditor, Certified Internal Controls Auditor, as well as Masters in Business Administration in MIS & Islamic Finance & Banking.

7.4. OVERDUE LOANS

The Bank, its Chief Executive and directors; and its associated companies and undertakings have no overdue loans (local and/or foreign currency).

7.5. POWER OF DIRECTORS

As required under clause 47 of Part I of Table A of First Schedule of the Companies Act, 2017 and the Articles of Association of the Company, the authority to conduct business of the Bank is vested with its Board of Directors and they may exercise all such powers of the Bank as are not required by the Companies Act, 2017 or the Articles of Association of the Bank or by a special resolution, required to be exercised by the Bank in the general meeting of the shareholders.

7.6. NUMBER OF DIRECTORS

Pursuant to section 154 of the Companies Act, 2017, the number of directors of a listed company should not be less than seven (7). At present, the Board consists of eight (8) directors, including the Chief Executive Officer.

7.7. QUALIFICATION OF DIRECTORS

The qualification of an elected director of the Bank in addition to his/her being a member shall be the holding of shares in the Bank of the aggregate value of Rs. 5,000/- (Rupees Five Thousand Only) in his/her own name, relaxable in the case of directors representing interest holding shares. This is subject to section 153 of the Companies Act, 2017.

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7.8. REMUNERATION OF DIRECTORS

According to article 55 of the Articles of Association, subject to any approval or limits required by law, the terms and conditions and remuneration of a Director performing extra services, including the holding of the office of Chairman, the Chief Executive and any Director for attending the meetings of the Directors or a committee of Directors shall be determined by the Board of Directors, or if so decided by the Board, by the general body of shareholders.

7.9. AMOUNT OF BENEFITS TO SPONSOR SHAREHOLDER AND OFFICERS DURING THE LAST YEAR

No amount of benefits has been paid or given during the last year or is intended to be paid or given to any sponsor shareholders or to any officer of the Bank other than as remuneration for services rendered as whole-time executives of the Bank or as meeting fee for attending Directors Committee meetings to non- executive directors as per the approved scale of fee.

7.10. INTEREST OF DIRECTORS

The directors may be deemed to be interested to the extent of fees payable to them for attending Board meetings. The Directors performing whole time services in the Bank may also be deemed interested in the remuneration payable to them by the Bank. The nominee directors have interest in the Bank to the extent of representing the sponsors in the Bank.

7.11. ELECTION OF DIRECTORS

The Directors of the Bank are elected for a term of 03 years in accordance with the procedure laid down in section 159 of the Companies Act, 2017 and Banking Companies Ordinance, 1962.

The Directors shall comply with the provisions of Sections 154 to 159 and Sections 161 and 167 of the Companies Act, 2017 relating to the election of Directors and matters ancillary thereto.

Subject to the provisions of the Companies Act, 2017 and Banking Companies Ordinance, 1962, the Company may from time to time increase or decrease the number of Directors.

Any casual vacancy occurring on the Board of Directors may be filled up by the Directors, but the person so appointed shall be subject to retirement at the same time as if he / she had become a Director on the day on which the Director in whose place he / she is chosen was last elected as Director.

The Company may remove a Director in accordance with the provisions of the Banking Companies Ordinance, 1962 and the Companies Act, 2017.

The present Directors of the Company were elected on March 28, 2017 for a period of 03 years.

7.12. BORROWING POWERS

According to article 61 of the Articles of Association of the Bank, the Directors may from time to time raise or borrow any sum or sums of money or make any arrangement for finance for the purpose of the Bank.

The Directors may raise or secure the payment of such sum or sums or make any arrangement for financial arrangement in such manner and upon such terms and conditions in all respects as they think fit

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and in particular by making, drawing, accepting or endorsing on behalf of the Bank any promissory notes or bills of exchange or by issuing bonds, or by issuing redeemable capital, perpetual or redeemable debentures or debenture stock or any mortgage, charge (other than a floating charge certified in writing by the State Bank of Pakistan under section 18 of the Banking Ordinance) or other security on the undertaking or the whole or any part of the property of the Bank (both present and future) but so that no change shall be created upon any unpaid capital of the Bank.

7.13. VOTING RIGHTS

The TFCs shall not carry any voting rights in relation to SNBL.

7.14. INTERNAL AUDIT

The Board of Directors has set up an effective internal audit function managed by suitably qualified and experienced personnel who are conversant with the policies and procedures of the Bank and are involved in the internal audit function on a full-time basis. The Board Audit Committee comprises of the following members:

• Mr. Inam Elahi - Chairman • Mr. Nooruddin Feerasta - Member • Mr. Muhammad Rashid Zahir - Member • Mr. Jamil Hassan Hamdani - Member • Mr. Muhammad Altaf Butt - Secretary

7.15. BOARD HUMAN RESOURCE AND REMUNERATION COMMITTEE

The Board of Directors has set up an effective Human Resources function managed by suitable and qualified personnel who are conversant with the policies & procedures of the Bank and are involved in Human Resources function on a full-time basis. The Board HR Committee comprises of the following members:

• Mr. Manzoor Ahmed - Chairman • Mr. Jamil Hassan Hamdani - Member • Mr. Inam Elahi - Member • Mr. Muhammad Altaf Butt– Secretary

(the space has been left blank intentionally)

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PART 8: MISCELLANEOUS INFORMATION

8.1. REGISTERED OFFICE / CENTRAL OFFICE

Registered Office Address: Rupali House 241-242, Upper Mall Scheme, Anand Road, Lahore - 54000 Central Office Address:10thFloor, PNSC Building, M.T. Khan Road, Karachi-74000 Phone: 042-35713101-4, 021-32444401-05 & 111-567-890 Fax: 042-35713095-96, 92-21-35641114 Website: http://www.soneribank.com

8.2. TRUSTEE

Pak Brunei Investment Company Limited Address: Horizon Vista, Commercial 10, Block No.4, Scheme No. 5, Clifton, Karachi. PABX: (92-21) 35361215-19 Fax: (92-21) 35361213, 35370873 Website: www.pakbrunei.com.pk

8.3. AUDITOR OF THE COMPANY

M/s. A.F Ferguson & Co. Chartered Accountants- Pakistan

8.4. LEGAL ADVISOR TO THE ISSUE

Mohsin Tayebaly & Company Address: Dime Centre, Khayaban-e-Iqbal, Block 9, Clifton, Karachi, Sindh, Block 9 Clifton, Karachi Tel: (92-21) 111-682-529 Fax: (92-21) 35870240 Website: http://mtclaw.com.pk

8.5. COMPLIANCE OFFICER

Muhammad Altaf Butt – Chief Compliance Officer Email: [email protected] Address: Central Office, Soneri Bank Limited, 10th Floor, PNSC Building, MT. Khan Road, Karachi Telephone: +92 (0213) 8900131 Fax: +92 (0213) 5643326

8.6. REGISTRAR AND TRANSFER AGENT

THK Associates (Private) Limited 1st Floor, 40-C, Block-6, P.E.C.H.S., Karachi - 75400 UAN: (021) 111-000-322 FAX: (021) 341 68271 Website: www.thk.com.pk

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8.7. BANKERS TO THE ISSUE

1. Allied Bank Limited 2. Askari Bank Limited 3. Bank Alfalah Limited 4. Bank Al Habib Limited 5. Faysal Bank Limited 6. Habib Metropolitan Bank Limited 7. JS Bank Limited 8. MCB Bank Limited 9. Silk Bank Limited 10. Soneri Bank Limited 11. United Bank Limited

8.8. CONSULTANT TO THE ISSUE

Next Capital Limited Address: 8th Floor, Horizon Tower, Block III, Clifton, Karachi Phone: 111-639-825, 021-35169516 Fax: 021-35292623-21-48 Website: www.nextcapital.com.pk

8.9. MARKET MAKER

Next Capital Limited Address: 8th Floor, Horizon Tower, Block III, Clifton, Karachi Phone: 111-639-825, 021-35169516 Fax: 021-35292623-21-48 Website: www.nextcapital.com.pk

8.10. MATERIAL CONTRACTS / DOCUMENTS RELATED TO THE ISSUE

8.10.1. Investor Agreements

S. No. Pre-IPO Investors Amount (PKR) Date of Agreement 1 Askari General Insurance Company Limited 10,000,000 October 1, 2018 2 Bank Alfalah Limited 100,000,000 October 1, 2018 3 Bank Al-Habib Limited 300,000,000 October 1, 2018 4 The Bank of Khyber 500,000,000 October 1, 2018 5 Century Insurance Company Limited 20,000,000 October 1, 2018 6 EFU Life Assurance Limited 50,000,000 October 1, 2018 7 Habib Bank Limited 300,000,000 October 1, 2018 8 Habib Metropolitan Bank Limited 100,000,000 October 1, 2018 9 IGI Life Insurance Limited 50,000,000 October 1, 2018 10 Jubilee Life Insurance Company Limited 320,000,000 October 1, 2018* 11 Khushhali Microfinance Bank Limited 100,000,000 October 18, 2018 12 National Bank of Pakistan 400,000,000 October 17, 2018 13 Pak Brunei Investment Company Limited 100,000,000 October 1, 2018

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14 Pak China Investment Company Limited 200,000,000 October 1, 2018 15 Pak Libya Holding Company (Pvt.) Limited 300,000,000 October 1, 2018 16 United Bank Limited 250,000,000 October 1, 2018 17 Karandaaz Pakistan 500,000,000 October 18, 2018* Total 3,600,000,000 * Jubilee Life initially signed an agreement for TFCs of worth PKR 400 million and Karandaaz Pakistan for PKR 420 million, however, subsequently they have entered into a Novation Agreement dated October 24, 2018 whereby Jubilee Life has novated TFCs of worth PKR 80 million in favor of Karandaaz Pakistan.

8.10.2. Underwriting Agreements

S. No. Underwriters Name Amount (PKR) Date of Agreement 01 Pak China Investment Company Limited 200,000,000 October 30, 2018 02 PAIR Investment Company Limited 200,000,000 October 25, 2018 Total 400,000,000

8.10.3. Other Material Documents

S. No. Description Date 1 Trust Deed between Soneri Bank Limited and Pak Brunei Investment October 1, 2018 Company Limited 2 Instrument Credit Rating Report by PACRA September 26, 2018 3 Entity Credit Rating Report by PACRA September 26, 2018 4 Approval of Pakistan Stock Exchange Limited vide letter reference no. November 9, 2018 PSX/GEN-5172 5 Approval of the Securities and Exchange Commission of Pakistan vide November 20, 2018 letter reference no. SMD/CIW/SA-88/04/2018 6 Market Making Agreement between Soneri Bank Limited and Next November 12, 2018 Capital Limited 7 Approval of the State Bank of Pakistan vide letter no. July 09, 2018 BPRD/BA&CP/647/14692/2018

8.11. INSPECTION OF DOCUMENTS AND CONTRACTS

All the Balance Sheets and Profit & Loss Accounts, Copies of the Memorandum and the Articles of Association, the Auditor’s Certificates, Trust Deed, the Credit Rating Reports by PACRA, Clearance letter from PSX and the approval letters from SECP, and the copies of agreements referred to in this Prospectus may be inspected during usual business hours on any working day at the registered office of the Bank from the date of publication of this Prospectus until the closing of the Subscription Period.

8.12. LEGAL PROCEEDINGS

There are no pending legal proceedings other than ordinary routine litigation incidental to banking business.

8.13. INDEMNITY

As per the Article 109 of the Articles of Association, every officer or agent for the time being of the Bank may be indemnified out of the assets of the Bank against any liability incurred by him in defending any proceedings, whether civil or criminal, arising out of his dealings in relation to the affairs of the Bank,

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except those brought by the Bank against him in which judgment is given in his favor or which he is acquitted or in connection with any application under section 488 of the Companies Ordinance, 1984 (currently section 492 of the Companies Act, 2017) in which relief is granted to him by Court.

8.14. CAPITALIZATION OF RESERVES

Year Capitalization Mode Proportion (%) Amount (PKR ‘000’) 1994 Bonus Issue 15.00% 49,500 1997 Bonus Issue 20.00% 75,900 1998 Bonus Issue 10.00% 45,540 1999 Bonus Issue 25.00% 125,235 2000 Bonus Issue 25.00% 156,544 2001 Bonus Issue 30.00% 234,816 2003 Bonus Issue 25.00% 254,384 2004 Bonus Issue 30.00% 381,576 2005 Bonus Issue 30.00% 496,048 2006 Bonus Issue 30.00% 741,592 2007 Bonus Issue 20.00% 685,704 2008 Bonus Issue 22.00% 905,129 2011 Bonus Issue 12.50% 1,003,243 2012 Bonus Issue 11.00% 993,210 2013 Bonus Issue 10.00% 1,002,240

8.15. REVALUATION OF FIXED ASSETS

During the year 2017, the Bank’s freehold / leasehold land and buildings on freehold / leasehold land have been revalued by M/s Harvester Services (Private) Limited (Valuation and Engineering Consultants) on the basis of their professional assessment of the present market value. As a result of revaluation, the market value of freehold / leasehold land was determined at Rs. 1,605.017 million and buildings on freehold / leasehold land was determined at Rs. 2,575.037 million.

Revaluation surplus on operating fixed assets as per audited financial statements for the year ended December 31, 2017 is PKR 1,920 million and for the period ended June 30, 2018, the surplus was PKR 1,916million.

8.16. MEMORANDUM OF ASSOCIATION

The Memorandum of Association, inter alia, contains the objects for which SNBL was incorporated and the business, which SNBL is authorized to undertake. A copy of the Memorandum of Association annexed to this Prospectus is being published with all issues hereof except those released as newspaper advertisement.

8.17. INVESTMENT IN SUBSIDIARY AND ASSOCIATED COMPANIES

The Bank does not have any investment in associated companies.

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PART 9: APPLICATION AND ALLOTMENT INSTRUCTIONS

9.1. ELIGIBLE INVESTORS

Eligible Investors include: a) Pakistani citizens resident in or outside Pakistan or persons holding dual nationalities including Pakistani nationality; b) Foreign nationals whether living in or outside Pakistan; c) Companies, bodies corporate or other legal entities incorporated or established in or outside Pakistan (to the extent permitted by their constitutive documents and existing regulations, as the case may be); d) Mutual Funds, Provident / pension / gratuity funds / trusts, (subject to the terms of the Trust Deed and existing regulations); and e) Branches in Pakistan of companies and bodies corporate incorporated outside Pakistan.

9.2. COPIES OF THE PROSPECTUS

Copies of the Prospectus and applications forms can be obtained from the Trading Rights Entitlement Certificate (TREC) Holders of PSX, the Bankers to the Issue and their Branches, the Consultant to the issue and the registered office of the Soneri Bank Limited. The Prospectus and the Application Forms can also be downloaded from the following websites: http://nextcapital.com.pk/, http://www.soneribank.com and https://eipo.cdcaccess.com.pk/

The applicants are required to complete the relevant sections of the application in order to get the Securities in scrip-less form. In accordance with the provisions of the Central Depositories Act, 1997 and the CDCPL Regulations, credit of such securities is allowed ONLY in the applicant’s own CDC account.

9.3. NAME(S) AND ADDRESS(ES) MUST BE WRITTEN IN FULL BLOCK LETTERS, IN ENGLISH, AND SHOULD NOT BE ABBREVIATED. 9.4. ALL APPLICATIONS MUST BEAR THE NAME AND SIGNATURE CORRESPONDING WITH THAT RECORDED WITH THE APPLICANT’S BANKER. IN CASE OF DIFFERENCE OF SIGNATURE WITH THE BANK AND COMPUTERIZED NATIONAL IDENTITY CARD (CNIC) OR NATIONAL IDENTITY CARD FOR OVERSEAS PAKISTANI (NICOP) OR PASSPORT, BOTH THE SIGNATURES SHOULD BE AFFIXED ON THE APPLICATION FORM.

9.5. APPLICATIONS MADE BY INDIVIDUAL INVESTORS a) In case of individual investors, a photocopy of the CNIC (in case of resident Pakistanis) / NICOP or Passport (in case of non-resident Pakistanis) as the case may be, should be enclosed and the number of CNIC / NICOP / Passport should be written against the name of the applicant. b) Original CNIC / NICOP / Passport, along with a photocopy, must be produced for verification to the

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Banker to the issue and the applicant’s banker (if different from the Banker to the issue) at the time of presenting an application. The photocopy will, after verification, be retained by the branch along with the application.

9.6. APPLICATIONS MADE BY INSTITUTIONAL INVESTORS a) Applications made by companies, corporate bodies, mutual funds, provident / pension / gratuity funds / trusts and other legal entities must be accompanied by a photocopy of their memorandum and articles of association or equivalent instrument / document. Where applications are made by virtue of power of attorney, the same should also be submitted along with the application. b) Photocopies of the documents mentioned in paragraph (a) above must be produced for verification to the Banker to the Issue and the applicant’s banker (if different from the banker to the issue) at the time of presenting the application. The copies, will after verification, be retained by the bank branch along with the application.

9.7. ADDITIONAL INSTRUCTIONS FOR INVESTORS a) Only one application will be accepted against each account, however, in case of joint accounts, one application may be submitted in the name of each joint account holder. b) Joint application in name of more than two persons will not be accepted. In case of joint application each applicant must sign the application form and submit copies of their CNICs / NICOP / Passports. The securities will be credited to the CDS account mentioned on the face of the form and where any amount is refundable, in whole or in part, the same will be refunded by cheque or other means by post, or through the bank where the application was submitted, to the person named first on the application form, without interest, profit, or return. Please note that application will be considered as a single application for the purpose of allotment of securities. c) Subscription money must be paid by cheque drawn on applicant’s own bank account or pay order / bank draft payable to one of the Bankers to the Issue in favor of “IPO OF Soneri Bank Limited - TFC” and crossed “A/C PAYEE ONLY”. d) For the application made through pay order / bank draft, it would be permissible for a Banker to the Issue to deduct the bank charges while making refund of subscription money to unsuccessful applicants through pay order / bank draft individually for each application. e) The applicant should have at least one bank account with any of the commercial banks. The applicants not having a bank account at all (non-account holders) are not allowed to submit application for subscription of securities. f) Applications are not to be made by minors and / or persons of unsound mind. g) Applicants should ensure that the bank branch, to which the application is submitted, completes the relevant portion of the application form. h) Applicants should retain the bottom portion of their application forms as provisional acknowledgment of submission of their applications. This should not be construed as an acceptance of the application or a guarantee that the applicant will be allotted the number of securities for which the application has been made.

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i) Making of any false statements in the application or willfully embodying incorrect information therein shall make the application fictitious and the applicant or the bank shall be liable for legal action. j) Banker to the issue are prohibited to recover any charges from the subscribers for collecting subscription applications. Hence, the applicants are advised not to pay any extra charges to the Bankers to the issue. k) It would be permissible for a Banker to the issue to refund subscription money to unsuccessful applicants having an account in its bank by crediting such account instead of remitting the same by cheque, pay order or bank draft. Applicants should, therefore, not fail to give their bank account numbers. l) Submission of false and fictitious applications is prohibited, and such Application Money may be forfeited under section 87(8) of Securities Act, 2015.

9.8. ADDITIONAL INSTRUCTIONS FOR FOREIGN / NON-RESIDENT INVESTORS a) In case of Foreign investors who are not individuals, applications must be accompanied with a letter on applicant’s letterhead stating the legal status of the applicant, place of incorporation and operations and line of business. A copy of Memorandum of Association or equivalent document should also be enclosed, if available. Where applications are made by virtue of Power of Attorney, the same must be lodged with the applications. Copies of these documents can be attested by the Bank Manager in the country of applicant’s residence. b) Foreign / Non-resident investors should follow the payment instructions given in para 2.13 of the prospectus.

9.9. BASIS OF ALLOTMENT

The basis and conditions of transfer of securities to the General Public shall be as follows: a) The minimum amount of application for subscription of TFCs is Rs 5,000/- Application for TFCs below the total value of Rs. 5,000/- shall not be entertained. b) Application for TFCs must be made for Rs. 5,000/- TFCs or in multiple thereof only. Applications, which are neither for Rs. 5,000/- TFCs nor for multiple thereof, shall be rejected. c) Allotment/Transfer of TFCs to successful applicants shall be made in accordance with the allotment criteria/ instructions disclosed in the Prospectus. d) Allotment of TFCs shall be subject to scrutiny of applications in accordance with the criteria disclosed in the Prospectus and/or the instructions by the Securities & Exchange Commission of Pakistan. e) Applications, which do not meet the above requirements, or applications which are incomplete will be rejected. The applicants are, therefore, required to fill in all data fields in the Application Form. f) The Issuer will credit the respective CDS accounts of the successful applicants.

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9.10. BANKERS TO THE ISSUE

1. Allied Bank Limited 2. Askari Bank Limited 3. Bank Alfalah Limited 4. Bank Al Habib Limited 5. Faysal Bank Limited 6. Habib Metropolitan Bank Limited 7. JS Bank Limited 8. MCB Bank Limited 9. Silk Bank Limited 10. Soneri Bank Limited 11. United Bank Limited

9.11. CODE OF OCCUPATIONS

Code Occupation Code Occupation 01 Business 06 Professional 02 Business Executive 07 Student 03 Service 08 Agriculturist 04 Housewife 09 Industrialist 05 Household 10 Other

9.12. PUBLIC SUBSCRIPTION THROUGH E-IPO e-IPO is submission of application for subscription of securities electronically through internet, Automated Teller Machines (ATM) and mobile phones. In order to facilitate the public during IPOs, SECP has introduced the concept of e-IPO. The following two systems are available for e-IPOs:

(i) Centralized e-IPO System (CES):

The Central Depository Company of Pakistan Limited (CDC) has developed a Centralized e-IPO System (CES) through which applications for subscription of securities offered to the general public can be made electronically. CES has been made available in this IPO and can be accessed through the web link (www.cdceipo.com). Payment of subscription money can be made through 1LINK’s member banks available for CES, list of which is available on above website.

For making application though CES, investors must be registered with CES. Registration with CES is free of cost and a self-registration process by filling the CES registration form, which is available 24/7 all around the year. Investors who have valid Computerized National Identity Card (CNIC), bank account with any of the commercial bank, email address, mobile phone number and CDS Account (Investor Account or sub Account) may registered themselves with CES.

Investors who do not have CDS account may visit www.cdcpakistan.comfor information and details.

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For further guidance and queries regarding CES and opening of CDS account, investors may contact CDC at phone Number: 0800 – 23275 (CDCPL) and e-mail: [email protected]

For further detail on CES, please refer to para 2.10.

(ii) e-IPO facilities by Bankers to the Issue:

Currently, United Bank Limited (UBL) and Bank Alfalah (BAFL) are providing e-IPO facilities to their respective accountholders for this IPO.

UBL account holders can use UBL Net Banking to submit their application via link http://www.ubldirect.com/corporate/ebank

BAFL account holders can use BAFL Net Banking to submit their application via link: https://netbanking.bankalfalah.com

9.13. NATIONALITY CODE

Code Name of Country Code Name of Country 001 U.S.A. 006 Bangladesh 002 U.K. 007 China 003 U.A.E. 008 Bahrain 004 K.S.A. 009 Other 005 Oman

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PART 10: SIGNATORIES TO THE PROSPECTUS

Name Designation Signature

Chairman / Non-Executive Mr. Alauddin Feerasta -sd- Director

Mr. Mohammad Aftab Manzoor President and CEO -sd-

Mr. Nooruddin Feerasta Non-Executive Director -sd-

Mr. Amin Feerasta Executive Director -sd-

Mr. Muhammad Rashid Zahir Non-Executive Director -sd-

Mr. Inam Elahi Independent Director -sd-

Mr. Jamil Hassan Hamdani Independent Director -sd-

Mr. Manzoor Ahmed Director -sd-

Signed by the above in the presence of following witnesses:

Witness 1 Witness 1

-sd- -sd- ______Name: Saad Reaz Name: Muhammad Yasoob Ali Designation: Head – Structured Finance Designation: Officer CNIC: 35201-4491968-9 CNIC: 42101-1950358-1

Date: 09/11/2018

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PART 11: MEMORANDUM OF ASSOCIATION

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PART 12: APPLICATION FORM

SUBMISSION OF FALSE AND FICTITIOUS APPLICATIONS IS AN OFFENCE UNDER SECTION 87(7) OF THE SECURITIES ACT, 2015 AND SUCH APPLICATIONS' MONEY MAY BE FOREFIETED UNDER SECTION 87(8) OF THE SECURITIES ACT, 2015

INVESTMENT IN SECURITIES IS A HIGHLY RISKY BUSINESS. INVESTORS ARE, THEREFORE, ADVISED IN THEIR OWN INTEREST TO CAREFULLY READ THE CONTENTS OF THE PROSPECTUS ESPECIALLY THE RISK FACTORS BEFORE MAKING ANY INVESTMENT DECISION. SUBSCRIPTION DATE SONERI BANK LIMITED From December 5, 2018 to December 6, 2018 during banking APPLICATION FOR SUBSCRIPTION OF TERM FINANCE CERTIFICATES (TFCs) hours

As per Section 72 of Companies Act, 2017, the TFCs shall be issued in book-entry form only. Therefore, TFCs of Soneri Bank shall only be issued in scrip-less Broker’s Stamp & Code form in the CDS of CDCPL. (Refer to instruction No.4 on the reverse hereof)

The Directors, CDC PARTICIPANT / ACCOUNT HOLDER ID SUB ACCOUNT NUMBER HOUSE A/C NO. Soneri Bank Limited PSX

10th Floor, PNSC Building, M.T. Khan BrokersFor Road, Karachi-74000 OR Code CDC INVESTOR ACCOUNT CDC INVESTOR ACCOUNT SERVICES ID NO.

1) I/We apply for the following number of TFCs at PKR 5,000 per certificate for the value indicated below: Banker's Stamp

No. of TFCs Applied For Amount Payable in PKR Cheque / Demand Draft / Pay Order No.

2) I/We agree to accept the same or any smaller number of TFCs that may be allotted to me/us upon the terms as stated in the Prospectus. I/We authorize you to credit the TFCs to me/us pursuant to this application and if BankersFor Bank Branch Code no TFCs or a smaller number of TFCs are allotted to me/us you are hereby authorized to return to me/us by cheque or other means my/our application money for the amount of TFCs not delivered by post at my/our risk to Code the address written below, or to the Banker to the Issue through which I/we have submitted this application.

For Pakistanis Application Serial No. Resident 01 Non-resident 02 3) DECLARATION

I/We declare that: i) I am/We are national(s) of ______; ii) I am/We are not minor(s); iii) I/We have not made nor have I/we instructed any other person(s)/institution(s) to make any other application(s) in my/our name(s) or in the name of any other person on my/our behalf or in any fictitious name; iv) I/We agree to abide by the instructions provided with this application and in case of any information given herein being incorrect I/we understand that I/we shall not be entitled to the allotment of TFCs if successful rather the application money shall be liable to confiscation if this declaration proves to be incorrect at any time.

Yours faithfully,

4) CONSENT I/We hereby agree to appoint Pak Brunei Investment Company Limited as the Trustee in respect of the TFCs and transaction documents.

Signature(s) a) b)

5) ALL DETAILS MUST BE WRITTEN IN B L O C K - L E T T E R S IN THE SPACES PROVIDED, LEGIBLY IN BLACK PEN a) Name in FULL (as per CNIC)

Mr. Ms. Mrs Co. Please Tick

Father's/Husband's Name (as per CNIC)

Identity Number (CNIC/ Passport/ Registration No.) Identity Number (NTN*)

*INVESTORS ARE ENCOURAGED TO DISCLOSE THEIR NTN NUMBERS TO FACILITATE THE ISSUER TO CHECK STATUS OF THE SECURITIES HOLDERS AS TAX RETURN FILER OR NON FILER FROM THE ACTIVE TAXPAYERS LIST (ATL) AVAILABLE ON THE WEBSITE OF FBR. PLEASE NOTE THAT REDUCED TAX RATE OF 10% APPLIES TO FILERS INSTEAD OF 17.5% FOR NON FILERS ON PAYMENT OF PROFIT.

Full Address

Occupation Phone No. Muslim Non Muslim Code International Bank Account Number (IBAN)

Bank Name

Branch Name & Address

Additional Information - For Non-Resident Pakistanis and Foreign Investors Only Date of Issue of Passport Place of Issue of Passport ― ― (DD-MM-YYYY) Corporate Business Letter enclosed Yes No Nationality Code Country of Residence

6) FOR JOINT HOLDER, IF ANY b) Name in Full (as per CNIC)

Mr. Ms. Mrs Co. Please Tick Identity Number (CNIC/ Passport/ Registration No.) 6) PROFIT PAYMENT / REDEMPTION MANDATE (OPTIONAL): Mark tick (✓) in the appropriate boxes Yes ( ) No ( ) In case the applicant intends that the subsequent profit payment and redemption of the TFCs issued to applicant by the Bank are credited directly in applicant’s bank account, instead of issuance of pay order/crossed cheque, then please fill in the following boxes: Title of Account

International Bank Account Number (IBAN)

Bank Name

Signature of the Applicant Branch Name and Address as per the Bank account (TO BE FILLED IN BY THE APPLICANT’S BANKER)

7) It is certified that the above-mentioned applicant(s) is/are maintaining account number as mentioned above at this bank branch and applicant's particulars and signature(s) are correct and verified as per the bank's record and their CNIC/Passport. It is further certified that only one application has been made in the name of the above account holder through this branch. We also confirm that the original CNIC/Passport has been seen by us.

Note: In case the subscription money is paid through a bank other than the Bankers to the Issue (through pay order or bank draft), this certification shall be provided by the manager of the bank where the applicant maintains his/her bank account. Bank’s Authorized Signatory Bank’s Rubber Stamp SPECIMEN SIGNATURE(S) OF THE APPLICANT NAME OF THE APPLICANT IN BLOCK LETTERS (AS PER CNIC) SPECIMEN SIGNATURE(S)

a)

b)

------

Bankers to the Issue's Provisional acknowledgement of application for TFCs of Soneri Bank Limited

Received from Mr/Ms/Mrs. ______application for ______certificates.

Name of Bank Branch Code Application Serial No. Date of Receipt Signature & Rubber Stamp of ― ― Receiving Bank IMPORTANT: (i) This slip must be retained by the Applicant ii) Please read instructions provided with this application

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APPLICATION AND ALLOTMENT INSTRUCTIONS 1. ELIGIBLE INVESTORS INCLUDE a. Pakistani citizens resident in or outside Pakistan or Persons holding dual nationalities including Pakistani nationality; b. Foreign Nationals whether living in or outside Pakistan; c. Companies, bodies corporate or other legal entities incorporated or established in or outside Pakistan (to the extent permitted by their constitutive documents and existing regulations, as the case may be); d. Mutual Funds, Provident / pension / gratuity funds / trusts, (subject to the terms of the Trust Deed and existing regulations); and e. Branches in Pakistan of companies and bodies corporate incorporated outside Pakistan. 2. COPIES OF THE PROSPECTUS Copies of the Prospectus and application form can be obtained from the Trading Right Entitlement Certificate (TREC) holders of Pakistan Stock Exchange, the Bankers to the Issue and their Branches, the Consultant to the Issue and the central office of Soneri Bank Limited. The Prospectus and the Application Form can also be downloaded from the websites: www.psx.com.pk, www.soneribank.com, www.nextcapital.com.pk and https://eipo.cdcaccess.com.pk/public/index.xhtml 3. The applicants are required to complete the relevant sections of the application in order to get the TFCs in scrip-less form. In accordance with provisions of the Central Depositories Act, 1997 and the CDC Regulations, credit of such TFCs is allowed ONLY in the applicant’s own CDC Account. 4. NAME(S) AND ADDRESSES MUST BE WRITTEN IN FULL BLOCK LETTERS, IN ENGLISH AND SHOULD NOT BE ABBREVIATED. 5. ALL APPLICATIONS MUST BEAR THE NAME AND SIGNATURE CORRESPONDING WITH THAT RECORDED WITH THE APPLICANT’S BANKER. IN CASE OF DIFFERENCE OF SIGNATURE WITH THE BANK AND COMPUTERIZED NATIONAL IDENTITY CARD (CNIC) OR NATIONAL IDENTITY CARD FOR OVERSEAS PAKISTANIS (NICOP) OR PASSPORT, BOTH THE SIGNATURES SHOULD BE AFFIXED ON THE APPLICATION FORM. 6. APPLICATIONS MADE BY INDIVIDUAL INVESTORS i. In case of individual investors, a photocopy of the CNIC (in case of resident Pakistanis) / NICOP or Passport (in case of non-resident Pakistanis) as the case may be, should be enclosed and the number of CNIC/ NICOP / Passport should be written against the name of the applicant. ii. Original CNIC/NICOP/Passport, along with a photocopy, must be produced for verification to the Banker to the Issue and the applicant’s banker (if different from the Banker to the Issue) at the time of presenting an application. The photocopy will, after verification, be retained by the branch along with the application. 7. APPLICATIONS MADE BY INSTITUTIONAL INVESTORS i. Applications made by companies, corporate bodies, mutual funds, provident / pension / gratuity funds / trusts and other legal entities must be accompanied by a photocopy of their memorandum and articles of association or equivalent instrument / document. Where applications are made by virtue of power of attorney, the same should also be submitted along with the application. ii. Photocopies of the documents mentioned in 7(i) must be produced for verification to the Banker to the Issue and the applicant’s banker (if different from the Banker to the Issue) at the time of presenting the application. The attested copies, will after verification, be retained by the bank branch along with the application. 8. ADDITIONAL INSTRUCTIONS FOR INVESTORS i. Only one application will be accepted against each applicant, however, in case of joint account, one application may be submitted in the name of each joint account holder. ii. Joint application in the name of more than two persons will not be accepted. In case of joint application, each applicant must sign the application form and submit attested copies of their CNICs/NICOPs/Passport. The TFCs will be credited to the CDS account mentioned on the face of the form and where any amount is refundable, in whole or in part, the same will be refunded by cheque or other means by post, or through the bank where the application was submitted, to the person named first on the application form, without interest, profit or return. Please note that joint application will be considered as a single application for the purpose of allotment of securities. iii. Subscription money must be paid by cheque drawn on applicant’s own bank account or pay order/bank draft payable to one of the Bankers to the Issue in favor of A/C “IPO of Soneri Bank Limited - TFC” and crossed “A/C PAYEE ONLY”. iv. For the application made through pay order/bank draft, it would be permissible for a Banker to the Issue to deduct the bank charges while making refund of subscription money to unsuccessful applicants through pay order/bank draft individually for each application. v. The applicant should have at least one bank account with any of the commercial banks. The applicants not having a bank account at all (non-account holders) are not allowed to submit application for subscription of securities. vi. Applications are not to be made by minors and/or persons of unsound mind. vii. Applicants should ensure that the bank branch, to which the application is submitted, completes the relevant portion of the application form. viii. Applicants should retain the bottom portion of their application forms as provisional acknowledgement of submission of their applications. This should not be construed as an acceptance of the application or a guarantee that the applicant will be allotted the number of TFCs for which the application has been made. ix. Making of any false statements in the application or willfully embodying incorrect information therein shall make the application fictitious and the applicant or the bank shall be liable for legal action. x. Bankers to the Issue are prohibited to recover any charges from the subscribers for collecting subscription applications. Hence, the applicants are advised not to pay any extra charges to the Bankers to the Issue. xi. It would be permissible for a Banker to the Issue to refund subscription money to unsuccessful applicants having an account in its bank by crediting such account instead of remitting the same by cheque, pay order or bank draft. Applicants should, therefore, not fail to give their bank account numbers. xii. Submission of false and fictitious applications is prohibited, and such applications’ money may be forfeited under section 87(8) of the Securities Act, 2015.

9. ADDITIONAL INSTRUCTIONS FOR FOREIGN / NON-RESIDENT INVESTORS i. In case of foreign investors who are not individuals, applications must be accompanied with a letter on applicant’s letterhead stating the legal status of the applicant, place of incorporation and operations and line of business. A copy of memorandum of association or an equivalent document should also be enclosed, if available. Where applications are made by virtue of Power of Attorney, the same must be lodged with the application. Copies of these documents can be attested by the bank manager in the country of applicant’s residence. ii. Foreign / Non-resident applicants should follow payment instructions given in Section 2.13 of the Prospectus. 10. BASIS OF ALLOTMENT The basis and conditions of transfer of TFCs to the General Public shall be as follows: i. The minimum value of application for subscription of a TFC is PKR 5,000/-. Application for amount below the minimum value shall not be entertained. ii. Application for TFCs must be made for Rs. 5,000 TFCs or in multiple thereof only. Applications, which are neither for Rs. 5,000 TFCs nor for multiple thereof, shall be rejected. iii. Allotment / transfer of TFCs to successful applicants shall be made in accordance with the allotment criteria / instructions disclosed in the Prospectus. iv. Allotment of TFCs shall be subject to scrutiny of applications in accordance with the criteria disclosed in the Prospectus and / or the instructions by the Securities & Exchange Commission of Pakistan. v. Applications, which do not meet the above requirements, or applications which are incomplete will be rejected. The applicants are, therefore, required to fill in all data fields in the application form. vi. The Issuer will credit the respective CDS accounts of the successful applicants.

11. CODE OF BANKERS TO THE ISSUE

Code No. Bank Code No. Bank

01 Allied Bank Limited 07 JS Bank Limited 02 Askari Bank Limited 08 MCB Bank Limited 03 Bank Alfalah Limited (providing e-ipo services) 09 Silk Bank Limited 04 Bank Al Habib Limited 10 Soneri Bank Limited 05 Faysal Bank Limited 11 United Bank Limited (providing e-ipo services) 06 Habib Metropolitan Bank Limited

12. CODE OF OCCUPATIONS

Code No. Occupation Code No. Occupation 01 Business 06 Professional 02 Business Executive 07 Student

03 Service 08 Agriculturist

04 Housewife 09 Industrialist

05 Household 10 Others

13. PUBLIC SUBSCRIPTION THROUGH e-IPO e-IPO is submission of application for subscription of securities electronically through internet, Automated Teller Machines (ATM) and mobile phones. In order to facilitate the public during IPOs, SECP has introduced the concept of e- IPO. The following two systems are available for e-IPOs:

(i) Centralized e-IPO System (CES): The Central Depository Company of Pakistan Limited (CDC) has developed a Centralized e-IPO System (CES) through which applications for subscription of securities offered to the general public can be made electronically. CES has been made available in this IPO and can be accessed through the web link www.cdceipo.com. Payment of subscription money can be made through 1LINK’s member banks available for CES, list of which is available on above website. For making application though CES, investors must be registered with CES. Registration with CES is free of cost and a self-registration process by filling the CES registration form, which is available 24/7 all around the year. Investors who have valid Computerized National Identity Card (CNIC), bank account with any of the commercial bank, email address, mobile phone number and CDS Account (Investor Account or sub Account) may register themselves with CES. Investors who do not have CDS account may visit www.cdcpakistan.com for information and details. For further guidance and queries regarding CES and opening of CDS account, investors may contact CDC at phone Number: 0800 – 23275 (CDCPL) and e-mail: [email protected].

(ii) e-IPO facilities by Bankers to the Issue: In order to facilitate investors, United Bank Limited (“UBL”) and Bank Alfalah Limited (“BAFL”) are providing the facility of electronic submission of application (e‐IPO) to their account holders. United Bank Limited account holders can use UBL net banking to submit their application via link http://www.ubldirect.com/corporate/ebank and BAFL account holders can use BAFL net banking to submit their applications via link https://netbanking.bankalfalah.com. Further, please note that online applications can be submitted 24 hours a day during the subscription period which will close at midnight on December 6, 2018.

14. NATIONALITY CODE Code Name of Country Code Name of Banks 001 U.S.A 006 Bangladesh 002 U.K 007 China 003 U.A.E 008 Bahrain 004 K.S.A 009 Other 005 Oman

For further queries you may contact: Soneri Bank Limited – Mr. Saad Reaz P: 111 567 890 (Ext. 2265), E: [email protected] Next Capital Limited - Mr. Umer Habib P: +92 21 3516 9513; E: [email protected]

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