Journey of

excellence
Annual Report 2016
Annual Report 2016
Soneri Bank’s 25 year journey encompasses the challenges
we resiliently faced through a commitment to deliver innovative
financial solutions, state-of-the-art banking convenience and security.
Our ethos of Roshan Har Qadam remains a guiding light for all our
initiatives for products and services as we now embark on the
journey ahead.
Contents

06 Vision 42 Key Performance Indicators 55 Market Statistics of SNBL Shares 77 Auditors’ Report to the Members
08 Mission 43 Six Years’ Financial Summary 56 Financial Calendar 78 Statement of Financial Position
10 Core Values 46 Branch Performance 79 Profit & Loss Account
57 Directors’ Report to Shareholders
12 Board of Directors 80 Statement of Comprehensive Income
47 Concentration of Advances, NPLs, Deposits
14 Senior Management 69 Statement of Internal Controls
and Off-Balance Sheet Items 81 Cash Flow Statement
16 Products and Services 48 Maturities of Assets and Liabilities 70 Code of Conduct
82 Statement of Changes in Equity
26 Corporate Social Responsibility (CSR) Activities 73 Mechanism adopted for Board's own Performance
49 Key Interest Bearing Assets and Liabilities 83 Notes to the Financial Statements
32 Complaint Handling Evaluation
50 Statement of Value Addition 161 Report of Shari’ah Board
33 Corporate Information 74 Statement of Compliance with the Best Practices of
51 Quarterly Performance 163 Notice of the Annual General Meeting
34 Organizational Structure Code of Corporate Governance
36 List of Committees of the Board of Directors 52 Six Years’ Vertical Analysis 168 Pattern of Shareholding
76 Auditors’ Review Report to the Members on
39 Management Committees 53 Six Years’ Horizontal Analysis Statement of Compliance With the Best Practices of 171 List of Branches
41 Inspiring Growth 54 Cash Flow Analysis Code of Corporate Governance 177 List of Foreign Correspondents
Vision

To better serve customers

to help them and the society grow.

Ours is a journey enlightened by the philosophy

of the majestic sun. Inspired by a vision to provide
superior customer service, Soneri Bank offers a
full range of financial solutions that cater to our
retail and corporate clients.
 09

Mission

We provide innovative and efficient

financial solutions to our customers.

As we sail into the future our technological

infrastructure continues to expand for better
customer experience.
Core Values

We are customer centric

We have high moral standards
We take ownership
We are proactive
We collaborate

Our employees are important partners in our

journey towards excellence. They uphold the
brand values to provide enhanced convenience
and quality customer service, as we reach for
even greater milestones.
 Board of
Directors
Muhammad Rashid Zahir Amar Zafar Khan Shahid Anwar Syed Ali Zafar
Director Director Director (NIT Nominee) Director

Mohammad Aftab Manzoor Nooruddin Feerasta Manzoor Ahmed

Alauddin Feerasta
President &
Chairman Director Director (NIT Nominee)
Chief Executive Officer
Senior
Management
Mohammad Aftab Manzoor
Mubarik Ali
President &
Country Credit Head
Chief Executive Officer

Amin A. Feerasta Anita Lalani

Chief Operating Officer Head of Human Resources

Abdul Aleem Qureshi

Ali Hassan Shah
Head of Commerical
Head of Operations
& Retail Banking

Shahid Abdullah
Ahmed Saqib Asad
Head of Treasury,
Chief Information Officer
Capital Markets, FI & PRI

Muhammad Qaisar Iqbal Zaidi

Head of Corporate & Head of Compliance
Investment Banking & Control

Anjum Hai Syed Asim Ali

Chief Financial Officer Head of Internal Audit
Soneri Bank Limited | Annual Report 2016 17

Products
and Services
At Soneri Bank, we strive to offer vibrant range of products and services to
exceed our customer’s expectations.

Our commitment to the customers

is to leverage our brand promise
“Roshan Har Qadam” by constantly
innovating our product suite to best
match the personal & business
needs of our customers, including
Commercial, Retail & Corporate
and Islamic segments.

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. Our current accounts include:

Soneri Ikhtiar Account

Soneri Ikhtiar is the flagship current account which is Savings Accounts
ideally suited for businesses who need a bank account Soneri Bank offers a complete range of savings products
with features that fulfill their daily banking needs with with attractive returns. These accounts are designed to
convenience. This account offers numerous free cater to the specific needs of individuals, senior citizens
facilities, including: Banker’s Cheque Issuance, Online and corporates. Our savings product suite include:
Banking, Cheque Books, VISA Classic Debit Card and
much more. In addition, Soneri Ikhtiar Account offers free PLS Savings Account
Worldwide Accidental Insurance and ATM Withdrawal Basic deposit account with no minimum balance
Coverage to help protect customers and their loved ones. requirement. It can be opened with an initial deposit of
just PKR 100/-. The complete range of ADC services
Soneri Current Account are offered on this account, i.e. VISA Debit Card,
Soneri Current Account lets the customer enjoy a host Internet/Mobile Banking, Online Banking and SMS Alerts.
of free banking services with no restriction on number
of transactions. It also provides complete peace of
mind with the free Worldwide Accidental Insurance and
ATM Withdrawal Coverage.
Soneri Bank Limited | Annual Report 2016 19

Foreign Currency Accounts

Soneri Savings Account Dealing in foreign currencies is no more a hassle. Soneri
Flexible and fast growing cumulative monthly profit account. Bank offers FCY Current, Savings & Term Deposit accounts
The rate of profit on this account increases with the account to cater to the foreign currency transactional and saving
balance as per the defined tiers. The complete range of ADC needs of the customers with a host of attractive features.
services are offered on this account.
Financing Products
Soneri Sahara Account Soneri Bank ensures meeting all banking needs of its
customers by offering variety of financing products to
It is a savings account for senior citizens, retired individuals and
facilitate them to grow their businesses and also contribute
pensioners aged 60 years and above, for meeting their basic
their share towards industrial growth of the country. The
banking needs, while offering them high monthly returns. The Bank is also committed to play its role towards strengthening
complete range of ADC services are offered on this account. the SME sector by encouraging quality players to avail
credit facilities through our nationwide branches, empowering
them to grow beyond financial limitations. In addition to our
conventional financing products including Running Finance,
Cash Finance, Term/Demand Finance, Letter of Credits
(LCs), Finance against Imported Merchandise (FIM),
Finance against Trust Receipts (FATR) and Letter of
Guarantees (LGs), the Bank also offers the following specific
financing products to help its customers to operate their
businesses without worrying about funding requirements.
Soneri Asaan Account
Soneri Asaan Account offers a simple and
convenient way to fulfill all banking needs with
minimum documentation requirement. It is
offered in both current & savings account types
and is suitable for self-employed individuals,
students, housewives & daily wagers. The
complete range of ADC services are available
on these accounts.

Rupee Term Deposit Accounts

Term Deposits
Soneri Term Deposits are for customers who intend to retain their savings for a fixed
period and earn a higher rate of profit. Term Deposits allow customers to save a
fixed amount in Rupees for a set period ranging from 1 month to 3 years at
attractive profit rates. The depositor has the option to reinvest the deposit
automatically with or without profit.

Diamond Deposits (Monthly Income Scheme)

Soneri Diamond Deposits provide investment opportunities to
investors looking for additional monthly income with an attractive
return. With terms from 1 year to 3 years, investors earn a
monthly profit credited to an associated current account for
easy withdrawal and use.
Soneri Bank Limited | Annual Report 2016 21

Soneri Speed Finance Agriculture Financing

Soneri Speed Finance is focused towards providing Agriculture contributes a handsome share in GDP of our
quick and flexible financing solutions to its customers country & livelihood of a large number of rural
while keeping their savings secure. This product is offered population is based on this. Soneri Bank offers various
to Individuals, Small & Medium Enterprises, Commercial Agriculture Financing Products in conventional as well
and Corporate businesses for meeting their business as Islamic domains for the farming/rural communities to
needs. It has been designed to provide hassle-free and meet their working capital/development needs. All these
swift financing solutions to meet both short and long term products help them grow their agricultural produce &
financing needs of the customer. It is primarily secured livelihood. Following Agriculture Financing Products are
against liquid security including Soneri Bank’s deposits available for the uplifting of Agri-Economy:
(LCY & FCY Term Deposits, Cash Margin, Lien on
Account) and Government Securities (DSC/SSC/RIC). • Farm Production Loans - Revolving Credit
• Farm Development Loans
Prime Minister Youth Business Loan (PMYBL) Scheme • Tractor & Implements Loans
The Government has introduced Prime Minister’s Youth • Non-Farm Working Capital Loan - Dairy Farming
Business Loan Scheme with a markup subsidy and partial • Non-Farm Development Loan - Dairy Farming
guarantee facility for extension of small business loans. • Non-Farm Working Capital Loan - Poultry Farming
The scheme was launched by the Prime Minister for • Non-Farm Development Loan - Poultry Farming
promoting youth entrepreneurship in the country. The main • Non-Farm Working Capital Loan - Fish Farming
objective of the PMYBL Scheme is to provide loans to the • Non-Farm Development Loan - Fish Farming
unemployed youth for establishing or extending business • Non-Farm Working Capital Loan - Cattle Farming
enterprises. As an executing agency, Soneri Bank is also • Non-Farm Development Loan - Cattle Farming
offering loans under this scheme. • Value Chain - Contract Farmers Financing
• Mustaqeem Tractor loans
• Ijarah
Consumer Finance

Soneri Car Finance

Now you can become the owner of a brand new
car through Soneri Car Finance Scheme. Soneri
Bank offers Car Finance facility up to Rs. 3 million,
repayable up to 5 years in equal monthly
installments. Option of used and reconditioned
cars is also available. Processing of application is
fast and hassle-free with partial payment and
early settlement options.

Soneri Personal Finance

Applicants of Soneri Personal Finance are offered
up to Rs. 500,000 with amount repayable in 5 years
in equal monthly installments.

Soneri Ghar Finance

To facilitate customers to realize their dream of a
beautiful house, Soneri Bank offers Soneri Ghar
Finance of up to Rs.10 million, repayable in 20
years in equal monthly installments.
Soneri Bank Limited | Annual Report 2016 23

Alternate Delivery Channel

ATMs
With a growing network of 300+ ATMs across the country,
customer can conveniently withdraw cash and avail ancillary
services through our ATMs.
Home Remittance
Soneri Bank Limited (SBL) under guidance of Pakistan Soneri Mobile Banking
Remittance Initiative (PRI) (a joint venture of State Bank, With Soneri Mobile Banking, customers can access their
Ministry of Finance and Ministry of Overseas Pakistanis, accounts anytime and anywhere via their mobile phones. They
Pakistan), started Home Remittance Payments can view their account statements, perform fund transfers, get
Disbursement Initiative in July – 2012. mobile top-ups and pay their bills conveniently sitting in the
comfort of their homes and workplaces. Soneri Direct Internet
In a very short span of time and with exceptional customer
Banking's app is also available for Android/iOS users.
support and service delivery standards, Soneri Bank
managed to make a positive contribution towards Home
Soneri Direct Internet Banking
Remittance Business.
Soneri Direct Internet Banking provides our customers
Soneri Bank has recognized the potential in Home a simple, convenient and secure solution to operate their bank
Remittance business and therefore brands its business account(s) online 24/7 from anywhere in the world. Customers
with the product name of “Soneri Mehnat Wasool can access their account(s) anytime, print account statements,
Remittance” the Home Remittance Service. This service pay utility bills, transfer funds and view the history of their Soneri
provides the customer avenue to receive their money with Internet Banking activities with a single click from their computers.
ease sent from abroad and over 285 Soneri Bank
branches in 130 cities across Pakistan. Soneri Bank has Soneri VISA Debit Card
already established the relationships with many Exchange With Soneri VISA Debit Card, customers enjoy a cashless
Companies operating in different region of Gulf Countries, experience of spending and making payments anywhere within
UK, America and Canada to facilitate its customers. the country and across the globe. Customers are able to avail
unmatched opportunities and benefits of the VISA Debit Classic
& Gold Cards.

SMS Alerts
Soneri Bank offers SMS Alerts Service to all of its customers in
order to make them feel secure and in control of their spending.
The alerts are instant and keep customers updated about their
account transactions.

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 VISA Debit Card Replacement, Stop
Cheque Request, Banker’s Cheque, e-Statement & Account
Statement Request. Simply dialing + 92-21-111-SONERI (766374)
can give a lot of ease to customers and will help to fulfill their
financial needs with just a call.
Soneri Bank Limited | Annual Report 2016 25

Protection and Coverage Products Soneri Mustaqeem Islamic Banking These are instrumental in improving liquidity and cost the risk appetite of the Bank. Further, we continued to
“Soneri Mustaqeem Islamic Banking” offers a broad efficiency of business activity of our clientele. facilitate our clients and retail investors as a banker to the
Bancassurance range of 100% Shari’ah-compliant financial solutions for issue in 2016.
Soneri Bank offers numerous coverage products to protect the customers. Our Islamic portfolio includes: Investment Banking
customers and their dear ones. These include an array of Our Investment Banking wing offers medium & long term China Desk
Bancassurance products to match your specific needs, Financing Products loans under bilateral as well as syndicate arrangements for The China–Pakistan Economic Corridor is a collection of
ranging from children’s education, retirement, middle-age • Murabaha financing of CAPEX, BMR & Project funding activity. projects currently under construction at a cost of $54 billion
saving and business protection planning: • Commercial Ijarah Investment Banking team is also carrying out Advisory as part of China's ambitious One Belt, One Road initiative,
• Consumer Car Ijarah Services for our clients besides giving the best solutions for and is part of Pakistan's Vision 2025. Projects under CPEC
Sunehra Saver Plan & Sunehra Saver Takaful Plan • Salam the financial modeling and effective structuring of their are intended to strengthen the Pakistani economy by the
This bancassurance plan is designed for young • Istisna funding requirements. rapid overhaul and construction of major infrastructure
executives, entrepreneurs, middle-aged professionals, • Diminishing Musharakah projects, establishment of special economic zones,
working ladies and housewives to meet their future • Running Musharakah Supply Chain Management power generating projects and Gwadar Port which will
financial needs. Sunehra Saver lets you save money in • Letter of Credit & Guarantees Being a provider of financial services, we offer end-to-end connect China’s northwestern region via network of
different stages of your career, which helps augment funds • Islamic Export Refinance supply chain financing solutions to dealers & vendors of highways and railways.
later when your expenses exceed your income, letting you our blue chip Corporate customers to meet business
We have established a Chinese Business Unit at Blue
enjoy life with less worries. Deposit Products requirements.
Area, Islamabad to cater all banking requirements of
• Soneri Rahat Business Account
Chinese customers via our tailor-made product suite
Roshan Takmeel Plan • Soneri Asaan Account Cash Management
under one roof.
A bancassurance plan designed for self-employed • Soneri Bachat Savings Account SBL’s Cash Management coupled with our next generation,
professionals, business people, lower and middle • Soneri Munafa Savings Account web-based Cash Management System ‘Soneri Trans@ct’,
Trade
management employees who wish to have financial • Soneri Meaadi Term Deposit provides our valued customers with comprehensive, one
We are offering trade solutions such as, LC Advising,
independence after retirement or wish to retire early. • Soneri Jari Current Account (Local & Foreign Currency) stop solution for cash flow management, i.e. Receivables
LC Confirmation, LC Negotiation/Discounting, Letter of
and Payables Management, in the most effective and
Guarantees, Risk Participation and others. SBL also
Roshan Aghaz & Roshan Aghaz Takaful Plan Corporate & Investment Banking efficient manner.
facilitates their correspondents by catering foreign
A bancassurance plan designed for parents to plan Soneri Bank’s Corporate & Investment Banking is well
Our Cash Management services, comprise of a full array of guarantee business against their counter guarantees
for their children’s educational expenses and equipped to meet the requirements of Corporate clients
products & services, designed and tailored to enable our favoring beneficiaries in Pakistan.
marriage of daughters. having strong presence in Karachi, Lahore and
Corporate, Commercial and SME customers to securely
Islamabad.
exchange funds and financial information in real-time
Karobar Muhafiz
Our team of Relationship Managers and Team Leaders with their trading partners, for optimal management of
A bancassurance plan designed to enable you to
are fully geared to establish meaningful relationships with working capital.
save regular amounts and safeguard you and your family
our blue chip Corporate & Institutional clients including
against unforeseen circumstances, such as death of a key
public sector entities to become partners in their growth Underwriting
person running the business. SMEs, large enterprises and
by acting as financial advisors, effectively catering to their Underwriting commitment business maintained its
partnerships can avail this plan to ensure stability of their
financial needs and offering financial solutions through momentum in 2016 as well. Going forward our focus will be
businesses.
the following suite of products: to increase this business and capture opportunities as per

ATM Withdrawal Coverage – Soneri Tahaffuz

Working Capital & Trade Finance Facilities
Soneri Tahaffuz ATM Withdrawal Coverage covers you in
Our Corporate Banking teams offer working capital
the event of loss of cash resulting from armed hold-up or
funding solutions for efficient financing of business cycles
forced deprivation on cash withdrawals from any
through pre & post shipment facilities alongside trade
1-Link/M-net ATMs in Pakistan. The coverage is available
finance products which are structured as per our clients’
for both Conventional and Islamic account holders.
specific requirements.
Soneri Bank Limited | Annual Report 2016 27

Corporate Social Responsibility

(CSR) Activities
To ensure the spirit of its brand promise of ‘Roshan Har Patient’s Aid Foundation Promoting Arts and Culture Empowering Education
Qadam’ Soneri Bank aims to enrich the society in Patient’s Aid Foundation is a charity based organization With the focus in the field of education, Soneri Bank has
all walks of life. In 2016, our CSR activities embodied committed to provide free quality healthcare to all. In Gallery 6, Islamabad generously supported and promoted various educational
principle of inclusiveness for the betterment of fellow collaboration with JPMC (Jinnah Postgraduate Medical Gallery 6, Islamabad, a well-known Art Gallery, organizations for its development.
beings in the field of education, healthcare, community, Centre) various patient related activities have been promotes and awards young Pakistani artists with
arts and culture, women empowerment, environment, accomplished which includes reconstructing and “Arjumand Painting Award”. The objective is to highlight Aga Khan Education Service, Pakistan
sports and rehabilitation. renovating buildings, reinstating crucial equipment, and the importance of classical painting and generate interest The Aga Khan Education Service, Pakistan is amongst
providing free medicine and laboratory tests. PAF also in classical art. Soneri Bank supported the cause to revive the largest private network of education institutions in
Contribution to Healthcare brought CyberKnife technology in Pakistan that treats the culture of classical arts. Pakistan. The institutions working under AKESP works to
Soneri Bank has generously contributed to cancer. Soneri Bank pledged to the cause by sponsoring eradicate illiteracy. Soneri Bank has sponsored several
healthcare organizations, to serve the purpose of humanity. its annual fundraising event. SIACHEN – A Pakistani Theatrical Masterpiece educational programs for the enhancement and
Siachen has been one of the most popular patriotic improvement of education.
The Kidney Centre (TKC) Installation of RO Water Plant for Public Use plays staged over a hundred shows in the country. As
The Kidney Centre (TKC), a non-profit organization provides The need of clean water is a necessity for every human part of its Employee Engagement Drive 2016, Soneri Bank The Citizens Foundation
comprehensive quality renal care to patients suffering from being, thus, to support this noble cause, Soneri Bank reserved three consecutive staff shows that received a The Citizens Foundation (TCF), a non-profit organization
kidney problems. Soneri Bank took the opportunity to installed an RO water plant in a village called Nathuwala heartening response. brings positive social change through education. It is
support one of its fundraising events of the year. Chak, Tehsil Shahkot, District Nankana Sahib to provide one of Pakistan’s leading organizations in the field of
clean drinking water for the villagers. Mauseeqar-e-Azam Memorial Society education for the less privileged. To support TCF’s cause
Lady Dufferin Hospital Soneri bank packaged and partly sponsored Pakistani of improving the literacy rate of Pakistan, Soneri Bank
Lady Dufferin, Pakistan’s largest and well known women’s classic music arranged by Mauseeqar-e-Azam Memorial sponsored basic education of 3 children for 11 years i.e.
hospital provides quality healthcare to all socio-economic Society, a Lahore based music academy to pay tribute to late (Kindergarten to Matric)
groups at subsidized rates. To improve the healthcare "Master Ghulam Haider" to preserve the classical music
facilities of the organization, Soneri Bank extended its of the sub-continent.
support by sponsoring its annual fundraising event for
society’s prosperity.

Fatimid Foundation
Fatimid Foundation, a non-profit organization provides
free blood/blood components to patients suffering from
various chronic blood disorders requiring blood/blood
component therapy as an essential part of their treatment.
To support the cause Soneri Bank co-sponsored the
seminar for International Thalassaemia Day.
Soneri Bank Limited | Annual Report 2016 29

Institute of Business Administration, Karachi SOS Children’s Villages Pakistan NOWPDP Rotary Metropolitan Trust
Institute of Business Administration (IBA) is the oldest SOS Children's Villages Pakistan is a social welfare Network of Organizations Working with People with Rotary Metropolitan Trust is a non-profit organization
educational institution in Karachi. IBA has maintained its organization affiliated with the world's largest orphan and Disabilities, Pakistan (NOWPDP) raises awareness in the working for the development of community. Their projects
position as the premier institution of higher learning in the abandoned children charity. SOS is working for their shelter, society about the rights of persons with disabilities. For this are focused in the field of health, basic education and skill
field of Management and Business Administration. Soneri education, job trainings to help them lead a better life in the noble cause, the Bank has sponsored 25 Baithaks to the development in Karachi and across Sindh. Soneri Bank
Bank widened its support by partially sponsoring a CPEC long-term. Soneri Bank continued to support this cause by well-being of the disabled. extended its support by sponsoring its annual fundraising
Business Conference in order to create awareness for sponsoring an annual carnival for kids. event for community development projects.
China-Pakistan Economic Corridor (CPEC) Program among
public/private sector investors, policy makers, government Rehabilitation Efforts
officials and others.
Saving Thar – Old Associates of Kinnaird Society (OAKS)
Family Education Services Foundation Saving Thar is a life-saving project for building the lives and
Family Educational Services Foundation (FESF) is a empowering communities in the drought-prone areas of
non-profit educational organization active in Pakistan since Tharparkar. Soneri Bank expanded the Village
1984. FESF is dedicated to enhance the quality of life for all Development Model by adopting a village of Rohaj
members of the community, especially those who are Halepoto which caters 157 households. Several activities
disadvantaged. Soneri Bank supported generously in their like ber grafting, tree plantation, kitchen gardening training,
educational development training programs in order to gifting goats and providing solar panels for households are
empower the underpriviledged to reach their full potential. part of the sustainability program.

Citizens Archive of Pakistan (CAP)

CAP, a non-profit organization dedicated to cultural and
historic preservation, aims at educating the community and
creates quality awareness about our nation’s history. To
support CAP in achieving its mission to build and support
educational programs and develop educational
product-based testimonies, Soneri Bank supported the
cause by providing sponsorship for the fundraiser carnival
in 2016.

Development in Literacy
Developments in Literacy, educates and empowers
underprivileged students, especially girls, by operating
student-centered model schools; and provides a
high-quality professional development to teachers and
principals across Pakistan. Soneri Bank has supported this
cause by sponsoring the fundraising event for the
development of education and literacy.
Soneri Bank Limited | Annual Report 2016 31

Promoting Sports

Karachi Golf Club

The Karachi Golf Club is the oldest golf club in Pakistan.
To promote and support Golf in Karachi, Soneri Bank
sponsored a Golf Tournament which provided a recreational
sports forum for corporate clientele and staff.

Airmen Golf Club

The Airmen Golf Course is one of the largest golf courses in
the country spread over hundreds of acres. To promote sports
and recreational activities, the Bank sponsored a golf event at
the Club.

Supporting Golfer
In the spirit of promoting new talent and ambitious people to
achieve their dreams, Soneri Bank has sponsored an inspiring
Women Empowerment Environment Care golfer, to represent the Bank in various tournaments nationwide.

International Women Leaders Summit WWF, Pakistan

Soneri Bank was part of International Women Leaders WWF is one of the world’s largest and recognized nature
Summit in 2016. The conference was a professional conservation organization. For this noble cause of saving
forum to collate successful and diversified professional nature and environment, SBL contributed through
women leaders across the globe to impart and integrate employee activities which included beach cleaning,
their experiences at a local forum for an exchange of planting mangrove sapling, transit walk, web yarn and
broader perspectives and learning. various environment preservation for the protection and
conservation of nature.
Attock Sahara Foundation
Attock Sahara Foundation (ASF) is a welfare based Seeding Hope
non-profit organization serving the community since 1966. With the objective to support environment preservation,
Its aim is to play a vital role in uplifting the socio-economic Soneri Bank metaphorically depicted the journey of the
conditions of the surrounding communities through Bank via a ‘Seed Concept’, a harbinger for growth,
various welfare projects. Soneri Bank supported their happiness and celebration of 25 Years of Silver Jubilee.
mission by sponsoring an annual fundraising exhibition for With the provision of a seed bag as part of the concept
this noble cause. and design, it motivated people to plant a ‘Seed of Hope’
for environmental nurturance.
Behbud Association Karachi
Behbud Association Karachi is a well-known NGO
conducting the development programs in the areas of
health, education and women empowerment for many
years. By contributing in their annual fundraising event,
Soneri Bank supported their cause of serving humanity.
Soneri Bank Limited | Annual Report 2016

Complaint Handling

Soneri Bank Limited (SBL) is committed to provide Following channels are available for customers to register
outstanding banking services to its customers and aims to their complaints:
offer services at par with international banking standards.
• Phone Banking
Complaint Management Unit (CMU) owns the Service
• Branches
Pledges completely and has inculcated it into all stages of
• Soneri Bank Website
complaint handling. These service pledges are:
• Emails
• We manage time
CMU monitors, investigates and responds to the
• We provide equality
complaints based on their findings and feedback
• We know customers
received; keeping in view the regulatory guidelines. The
• We think forward
unit also maintains full record of complaints including
• We listen more
action that has been taken to resolve them.
CMU has been established for thorough evaluation
In order to enhance control environment and to improve
of customers’ complaints and to address customer
the review regarding customer complaints, we have
grievances along with the timely resolution in compliance
implemented Complaints System in 2016 through which
with all regulatory requirements. CMU plays an integral
proper record of customer complaints are obtained.
role between customers and core units of SBL to get
feedback properly addressed and answered. All
feedback received are classified into 3 category i.e.
complaints, queries and dispute, and are worked on
according to their nature.

During the year 2016, 3,658 complaints were received through different channels, out of which 100%
were investigated and resolved within the prescribed timeline, which is reflected in the following bar chart:

Year 2016: Turn around time

1962

1318

Complaints

376

2 0 0

Days 0-5 6-10 11-15 16-20 21-30 30+

 33

Corporate
Information
CHAIRMAN LEGAL ADVISORS
MR. ALAUDDIN FEERASTA MANAN ASSOCIATES, ADVOCATES

CHIEF EXECUTIVE OFFICER REGISTERED OFFICE

MR. MOHAMMAD AFTAB MANZOOR RUPALI HOUSE 241-242,
UPPER MALL SCHEME,
DIRECTORS ANAND ROAD, LAHORE - 54000
MR. NOORUDDIN FEERASTA
MR. MUHAMMAD RASHID ZAHIR CENTRAL OFFICE
MR. AMAR ZAFAR KHAN 10TH FLOOR, PNSC BUILDING,
SYED ALI ZAFAR M.T. KHAN ROAD, KARACHI
MR. MANZOOR AHMED (NIT NOMINEE)
MR. SHAHID ANWAR (NIT NOMINEE) REGISTRAR AND SHARE
TRANSFER AGENT
CHIEF FINANCIAL OFFICER THK ASSOCIATES (PRIVATE) LTD.,
MS. ANJUM HAI 1ST FLOOR, 40-C,
BLOCK-6, P.E.C.H.S.,
COMPANY SECRETARY KARACHI - 75400
MR. MUHAMMAD ALTAF BUTT UAN: (021) 111-000-322
FAX: (021) 341 68271
AUDITORS
A.F. FERGUSON & CO.
CHARTERED ACCOUNTANTS

SHARI’AH BOARD
MUFTI EHSAN WAQUAR AHMAD (CHAIRMAN)
MUFTI MUHAMMAD ZAHID (RESIDENT MEMBER)
MUFTI BILAL QAZI (MEMBER)
 Soneri Bank Limited | Annual Report 2016 35

Organizational
Structure
Head of Administration

Head of
Information Technology

Head of Legal
Chief Operating Officer
Head of Risk Management ShariÕah Board

Head of Security

Head of Operations

President & CEO Board of Directors

Company Secretary Head of Marketing Head of Compliance Head of Human Head of Corporate & Head of Retail &
& Controls Resources Investment Banking Commercial Banking

Head of Islamic Banking Head of Remedial Country Credit Chief Financial Head of Treasury, Head of Audit Board Audit Committee
Management Unit Head Officer FI & PRI
Soneri Bank Limited | Annual Report 2016

List of Committees
of the Board of Directors
Audit Committee of the Board
1. Mr. Amar Zafar Khan Chairman
2. Mr. Nooruddin Feerasta Member
3. Mr. Muhammad Rashid Zahir Member
4. Mr. Shahid Anwar Member
Mr. Muhammad Altaf Butt Secretary

Credit Committee of the Board

1. Mr. Nooruddin Feerasta Chairman
2. Mr. Alauddin Feerasta Member
3. Mr. Mohammad Aftab Manzoor Member
4. Mr. Muhammad Rashid Zahir Member
5. Mr. Amar Zafar Khan Member
Mr. Muhammad Altaf Butt Secretary

Risk Management Committee of the Board

1. Mr. Shahid Anwar Chairman
2. Mr. Mohammad Aftab Manzoor Member
3. Mr. Amar Zafar Khan Member
Mr. Javed H. Siddiqi Secretary

Human Resource Committee of the Board

1. Mr. Manzoor Ahmed Chairman
2. Mr. Mohammad Aftab Manzoor Member
3. Mr. Shahid Anwar Member
4. Mr. Amar Zafar Khan Member
Mr. Muhammad Altaf Butt Secretary
 37

List of Committees
of the Board of Directors
Audit Committee Terms of Reference
Constitution: Audit Committee is mandated the responsibilities to determine appropriateness of measures taken
by the management to safeguard Bank's assets, ensure consistency of accounting policies, review
Mr. Amar Zafar Khan financial statements and recommend appointment of the external auditors as well as to have close
Chairman
coordination with them so as to comply with statutory and CCG requirements. The Committee is
Mr. Nooruddin Feerasta inter-alia also responsible to ascertain the effectiveness of the Internal Control System including
Member financial and operational controls, ensuring adequate and effective accounting and reporting
structure and monitoring compliance with the best practices of the corporate governance. The
Mr. Muhammad Rashid Zahir other functions of the Committee include consideration of major findings of internal investigations
Member and management's response thereto as well as ensuring that an effective internal audit functions
is in place.
Mr. Shahid Anwar
Member

Credit Committee Terms of Reference

Constitution: The primary functions of the Credit Committee of the Board are to ensure adherence to the lending
policies, review the credit policies, systems and controlling strategies for their further strengthening
Mr. Nooruddin Feerasta and monitoring the loan portfolios regularly on an overall basis including a periodical review of
Chairman
problem loans including classified and stuck-up cases. The Committee is also required to ensure
Mr. Alauddin Feerasta that there are adequate systems, procedures and controls in the Bank for all significant areas
Member related to credit and that the laid down procedures / guidelines are effectively communicated
down the line and put in place a reasonable setup to implement the same. The Committee has
Mr. Mohammad Aftab Manzoor also assigned the responsibility to review the credit related activities of the Executive Credit
Member Committee (ECC) on a quarterly basis for threshold; fund based Rs.200.00 million & above, non-
fund based Rs.400.00 million & above and total exposure Rs.400.00 million & above.
Mr. Muhammad Rashid Zahir
Member

Mr. Amar Zafar Khan

Member

Risk Management Committee Terms of Reference

Constitution: Primary responsibilities of the Board Risk Management Committee is to provide oversight and advice
to the BoD of Soneri Bank Limited in relation to current and potential future risk exposures of the Bank
Mr. Shahid Anwar and future risk strategy, including approval of risk appetite and tolerance. The Committee also ensures
Chairman that an organizational culture that places a high priority required for effective risk management is
Mr. Mohammad Aftab Manzoor established by promoting a risk awareness culture within the bank. It also validates that resources
Member allocated for risk management are adequate, given the size, nature and volume of the business and
the managers and staff that take, monitor and control risk posses sufficient knowledge and expertise.
Mr. Amar Zafar Khan The Committee also monitors the development of appropriate financial models and a system used
Member to calculate each category of risk, and ensure that the Bank has a clear, comprehensive and well
documented polices and procedural guidelines relating to risk management available at all times
and the relevant staff fully understand those policies. The Committee also ensures that the Bank's
overall exposure to credit, market, liquidity, and operational risk is maintained at prudent levels and
consistent with the available capital under rigorous stress tests.

Human Resource Committee Terms of Reference

Constitution: The Human Resource Committee is responsible for overseeing the Human Resources function
of the Bank by ensuring development and implementation of HR strategies that recruit, retain
Mr. Manzoor Ahmed and inspire professional excellence in employees of the Bank. It recommends human resource
Chairman management policies to the Board that ensures equal opportunity, gender balance, and
Mr. Mohammad Aftab Manzoor transparency. It also reviews the significant HR policies of the Bank and ensures that they are
Member well aligned to the market.

Mr. Amar Zafar Khan

Member

Mr. Shahid Anwar

Member
Soneri Bank Limited | Annual Report 2016

Board and
Committees' Meetings
Details of the meetings of the Board of Directors and its Committees held during 2016 and the attendance by each director/committee
member are given as under:

Board of Board Audit Board Credit Board Human Board Risk

Directors Committee Committee Resource Management
Meetings Meetings Meetings Committee Committee
Meetings Meetings
[Link]. Name of Director Held Held Held Held Held
Attended**

Attended**

Attended**

Attended**

Attended**
during during during during during
the the the the the
year year year year year

1 Mr. Alauddin Feerasta 6 6 * * 4 4 * * * *

2 Mr. Mohammad Aftab Manzoor 6 6 * * 4 4 4 4 3 3

3 Mr. Nooruddin Feerasta 6 5 4 2 4 3 * * * *

4 Mr. Muhammad Rashid Zahir 6 6 4 4 4 4 * * * *

5 Mr. Amar Zafar Khan 6 6 4 4 4 4 4 3 3 2

6 Syed Ali Zafar 6 3 * * * * * * * *

7 Mr. Manzoor Ahmed (NIT Nominee) 6 6 * * * * 4 4 * *

8 Mr. Shahid Anwar (NIT Nominee) 6 6 4 4 * * 4 4 3 3

Total Number of meetings held during the year 6 4 4 4 3

* Not a member of the Committee

** Leave of absence was granted to those directors/members, by the Board/Committee, who could not attend some of the meetings.
 39

Management
Committees
1. Management Committee 1. Mr. Mohammad Aftab Manzoor - Chairman
2. Mr. Amin A. Feerasta
3. Mr. Iqbal Zaidi
4. Mr. Abdul Aleem Qureshi
5. Mr. Shahid Abdullah
6. Mr. Ali Hassan Shah
7. Mr. Muhammad Qaisar
8. Ms. Anjum Hai
9. Ms. Anita Lalani
10. Mr. Mubarik Ali
11. Mr. Ahmed Saqib Asad
12. Mr. Abbas Hatim, Secretary

2. Executive Credit Committee 1. Mr. Mohammad Aftab Manzoor, Chairman

2. Mr. Amin A. Feerasta
3. Mr. Abdul Aleem Qureshi
4. Mr. Muhammad Qaisar
5. Mr. Mubarik Ali, Secretary

3. Assets and liability Committee 1. Mr. Mohammad Aftab Manzoor, Chairman

2. Mr. Amin A. Feerasta
3. Mr. Abdul Aleem Qureshi
4. Mr. Mubarik Ali
5. Ms. Anjum Hai
6. Mr. Javed Hussain Siddiqi
7. Mr. Muhammad Qaisar
8. Mr. Shahid Abdullah, Secretary

4. Investment Committee 1. Mr. Mohammad Aftab Manzoor, Chairman

2. Mr. Amin A. Feerasta
3. Mr. Shahid Abdullah
4. Mr. Abdul Aleem Qureshi
5. Ms. Anjum Hai
6. Mr. Muhammad Qaisar
7. Mr. Muhammad Imran Khan, Secretary

5. I.T. Steering Committee 1. Mr. Mohammad Aftab Manzoor, Chairman

2. Mr. Amin A. Feerasta
3. Mr. Abdul Aleem Qureshi
4. Ms. Anjum Hai
5. Mr. Ahmed Saqib Asad
6. Mr. Ali Hassan Shah
7. Mr. Mir Tehmeed
8. Mr. Qurban R. Punjwani, Secretary

6. Credit Risk Management Committee 1. Mr. Mohammad Aftab Manzoor, Chairman

2. Mr. Amin A. Feerasta
3. Mr. Abdul Aleem Qureshi
4. Mr. Mubarik Ali
5. Ms. Anjum Hai
6. Mr. Muhammad Qaisar
7. Mr. Javed H. Siddiqi, Secretary
Soneri Bank Limited | Annual Report 2016

Management
Committees
7. Market & Liquidity Risk Management Committee 1. Ms. Anjum Hai, Chairperson
2. Mr. Javed H. Siddiqi
3. Mr. Shahid Abdullah
4. Mian Nadeem Aslam
5. Mr. Junaid Qamar
6. Mr. Muhammad Imran Khan
7. Syed Ahmed Ali Jafari
8. Mian Umar Farooq, Secretary

8. Operational Risk Management Committee 1. Mr. Mohammad Aftab Manzoor, Chairman

2. Mr. Amin A. Feerasta
3. Mr. Abdul Aleem Qureshi
4. Mr. Iqbal Zaidi
5. Mr. Ali Hassan Shah
6. Ms. Anjum Hai
7. Syed Asim Ali
8. Mr. Muhammad Qaiser
9. Mr. Mubarik Ali
10. Mr. Ahmed Saqib Asad
11. Mr. Javed H. Siddiqi, Secretary

9. Business Continuity Plan Steering Committee 1. Mr. Mohammad Aftab Manzoor, Chairman
2. Mr. Amin A. Feerasta
3. Mr. Abdul Aleem Qureshi
4. Mr. Iqbal Zaidi
5. Ms. Anjum Hai
6. Mr. Ahmed Saqib Asad
7. Mr. Ali Hassan Shah
8. Ms. Anita Lalani
9. Syed Asim Ali
10. Lt. Col(R) Zahid Raza
11. Mr. Javed Munshi
12. Mr. Muhammad Azizullah Abid
13. Mian Asif Iqbal
14. Mr. Muhammad Khawar Ali Shah
15. Mr. Gul Husnain
16. Mr. Javed H. Siddiqi, Secretary
 41

Inspiring
Growth
As of 31 December 2016
2016 2015 Growth

Advances - Gross Rs. In Million 133,753 120,617 10.89%

Deposits " 210,840 185,222 13.83%

Net assets " 18,289 18,192 0.53%

Profit after tax " 1,879 2,213 -15.09%

Interest income " 6,844 7,597 -9.91%

Non-markup income " 2,736 3,150 -13.14%

Earnings per share Rs. 1.7042 2.0071 -15.09%

Total revenue Rs. In Million 9,580 10,748 -10.87%

Return on equity % 12.01% 15.03% -20.03%

Return on capital employed % 16.83% 19.77% -14.87%

Trade business Rs. In Million 276,512 269,312 2.67%

Number of accounts (In '000) 542 510 6.27%

Statement of Financial Position Variance during the FY 16

(Rs. in Million)
Equity, 11%
18,289
10%

Liabilities, Assets,
260,232 278,521

1%

Assets Liabilities Equity

Soneri Bank Limited | Annual Report 2016

Key Performance
Indicators
2016 2015 Variance
Compared to 2015
Amount %

Financial
Investment-Gross Rs. In Million 117,998 108,972 9,026 8%
Advances-Gross " 133,753 120,617 13,136 11%
Deposits " 210,840 185,222 25,618 14%
Shareholders' equity (including surplus) " 18,289 18,192 97 1%
Net-interest income " 6,844 7,597 (753) -10%
Non-interest income " 2,736 3,150 (414) -13%
Profit before provisions " 3,102 4,625 (1,523) -33%
Provisions " 24 1,029 (1,005) -98%
Profit before taxation " 3,077 3,596 (519) -14%
Profit after taxation " 1,879 2,213 (334) -15%

Non Financial

No. of customers Absolute 470,379 438,245 32,134 7%

No. of new branches opened " 25 20 5 20%
No. of branches closed " 3 - 3 100%
No. of new accounts opened " 75,602 80,171 (4,569) -6%
No. of ATM cards issued " 84,416 104,556 (20,140) -19%
No. of permanent employees " 2,715 2,715 - 0%
No. of virtual banking customers " 32,841 30,344 2,497 8%
No. of mobile banking customers " 35,073 27,726 7,347 26%

Key Financial Ratios

Earnings per share Rs. 1.7042 2.0071

Book value per share " 14.46 13.91
Share price " 17.65 15.13
Market capitalization Rs. In Million 19,458 16,680
Price earning ratio Times 10.38 7.53
Return on equity % 12.01% 15.03%
Return on assets % 0.71% 0.95%
Capital adequacy ratio % 14.12% 15.39%
 43

Six YearsÕ
Financial Summary 2011-2016
(Rs. In Million)
2016 2015 2014 2013 2012 2011
Profit & loss account
Mark-up / return / interest earned 17,524 18,319 16,906 13,639 13,813 12,940
Mark-up / return / non interest expensed 10,680 10,722 10,626 8,751 8,934 8,997
Fund based income 6,844 7,597 6,280 4,888 4,879 3,943
Fee, commission, brokerage and exchange income 1,577 1,809 1,939 1,600 1,191 1,194
Dividend income and capital gain 1,131 1,284 535 623 528 428
Other income 29 57 35 22 12 154
Non interest income 2,737 3,150 2,509 2,245 1,731 1,776
Total income 9,581 10,747 8,789 7,133 6,610 5,719
Operating expenses 6,480 6,123 5,798 4,868 4,368 3,369
Profit before tax and provisions 3,101 4,624 2,991 2,265 2,242 2,350
Provisions 24 1,029 549 735 520 1,272
Profit before tax 3,077 3,595 2,442 1,530 1,722 1,078
Profit after tax 1,879 2,213 1,582 1,037 1,104 784
Bonus shares issued - - - 1,002 993 1003
Right shares issued - - - - - 1001
Cash dividend paid - 1,378 1,102 - - -

Fund based income Non-Markup Income

(Rs. in Million) (Rs. in Million)
7,597 3,150
6,844
8,000 6,280 3,500 2,736
2,509
7,000 3,000
2,245
6,000 4,879 4,888 2,500 1,776 1,731
5,000 3,943
2,000
4,000
1,500
3,000
1,000
2,000

1,000 500

0 0
2011 2012 2013 2014 2015 2016 2011 2012 2013 2014 2015 2016

Profit before tax Profit after tax

(Rs. in Million) (Rs. in Million)
3,596 2,213
4,000 2,500
3,077 1,879
3,500 1,582
2,000
2,442
3,000
1,104
1,500 1,037
2,500 1,722
1,530 784
2,000 1,000
1,078
1,500
500
1,000

0 0
2011 2012 2013 2014 2015 2016 2011 2012 2013 2014 2015 2016
Soneri Bank Limited | Annual Report 2016

Six YearsÕ
Financial Summary 2011-2016
(Rs. In Million)
2016 2015 2014 2013 2012 2011
Statement of Financial Position
Paid up capital - net of discount 11,025 10,023 10,023 10,023 9,021 8,028
Reserves 1,424 1,049 934 618 410 1,183
Unappropriate profit 3,496 4,264 3,150 1,810 1,947 982
Shareholders' equity 15,945 15,336 14,107 12,451 11,378 10,193
Surplus on revaluation of assets 2,344 2,856 2,932 832 954 740
Net assets 18,289 18,192 17,039 13,283 12,332 10,933
Total assets 278,521 253,342 213,175 169,234 158,629 129,756
Earning assets 248,727 223,942 184,288 147,225 137,810 112,212
Gross advances 133,753 120,617 115,614 104,673 83,599 71,355
Advances-Net of provisions 125,306 112,002 107,968 97,534 77,170 65,623
Non-performing loans (NPLs) 10,419 11,584 10,224 10,424 9,927 8,942
Investments 117,884 108,846 75,716 46,703 59,517 45,776
Total liabilities 260,232 235,150 196,136 155,951 146,297 118,823
Deposits and other accounts 210,840 185,222 163,250 140,580 120,591 99,419
Current and saving deposits (CASA) 151,076 132,461 110,135 98,633 82,363 62,033
Borrowings 38,905 39,876 25,825 10,485 20,398 14,557
Interest bearing liabilities 199,807 184,209 149,236 116,929 114,209 94,364
Contingent and commitments 83,398 117,301 64,358 74,136 61,327 41,731

Paid up Capital ShareholdersÕ Equity Total Assets

(Rs. in Million) (excluding surplus) (Rs. in Million)
(Rs. in Million)
278,521
11,025
10,023 15,945 253,342
10,023 15,336
12,000 10,023 18,000 14,107 300,000
9,021
8,028 16,000 12,451 213,175
10,000 11,378 250,000
14,000 10,193 158,629 169,234
8,000 12,000 200,000
10,000 129,756
6,000 150,000
8,000
4,000 6,000 100,000
4,000
2,000 50,000
2,000
0 0 0
2011 2012 2013 2014 2015 2016 2011 2012 2013 2014 2015 2016 2011 2012 2013 2014 2015 2016

Gross Advances Deposits Investments

(Rs. in Million) (Rs. in Million) (Rs. in Million)

210,840
133,753 117,884
120,617
185,222 108,846
140,000 115,614 200,000 163,250 120,000
104,673
140,580
120,000 83,599 180,000
160,000 120,591 100,000 75,716
100,000 71,355
140,000 99,419 59,517
80,000
80,000 120,000 46,703
45,776
60,000 100,000 60,000

40,000 80,000
60,000 40,000
20,000
40,000
20,000
10,000 20,000
0 0 0
2011 2012 2013 2014 2015 2016 2011 2012 2013 2014 2015 2016 2011 2012 2013 2014 2015 2016
 45

Six YearsÕ
Financial Summary 2011-2016
2016 2015 2014 2013 2012 2011
Financial Ratios
Profit before tax ratio (PBT/total income) % 32.12% 33.45% 27.78% 21.45% 26.05% 18.85%
Gross spread (NIM/Interest income) " 39.06% 41.47% 37.15% 35.84% 35.32% 30.47%
Non interest income to total income " 28.57% 29.31% 28.55% 31.47% 26.19% 31.05%
Income /expense ratio (excluding provisions) Times 1.48 1.76 1.52 1.47 1.51 1.70
Return on average equity (ROE) % 12.01% 15.03% 11.91% 8.70% 10.24% 8.44%
Return on average assets (ROA) " 0.71% 0.95% 0.83% 0.63% 0.77% 0.66%
Return on capital employed (ROCE) " 16.82% 19.76% 14.33% 11.60% 14.32% 10.56%
Earning per share (EPS before tax) Rs. 2.79 3.59 2.44 1.53 1.91 1.34
Earning per share (EPS after tax) Rs. 1.7 2.01 1.44 0.94 1.00 0.78
Gross advances to deposit ratio % 63.44% 65.12% 70.82% 74.46% 69.32% 71.77%
Net advances to deposit ratio " 59.43% 60.47% 66.14% 69.38% 63.99% 66.01%
Break up value per share (excl. surplus on revaluation of assets) Rs. 14.46 15.30 14.07 12.42 12.61 12.70
Break up value per share (excl. surplus on revaluation of fixed assets) " 15.75 17.04 15.77 12.67 12.96 12.83
Break up value per share (incl. surplus on revaluation of assets) " 16.59 18.15 17.00 13.25 13.67 13.62
Earning assets to total assets % 89.30% 88.40% 86.45% 86.99% 86.88% 86.48%
Earning assets to interest bearing liabilities Times 1.24 1.22 1.23 1.26 1.21 1.19
Weighted average cost of deposits % 3.47% 4.42% 6.18% 5.85% 6.84% 7.88%
CASA to total deposits " 71.65% 71.51% 67.46% 70.16% 68.30% 62.40%
NPLs to total advances ratio " 7.79% 9.60% 8.84% 9.96% 11.87% 12.53%
Coverage ratio (Specific provisions/NPLs) " 80.58% 73.97% 74.44% 68.20% 64.68% 64.01%
Assets to equity Times 17.47 16.52 15.11 13.59 13.94 12.73
Total assets per share Times 252.63 252.76 212.69 168.85 175.84 161.63
Deposits to shareholders' equity Times 13.22 12.08 11.57 11.29 10.60 9.75

Risk Adequacy

Tier I Capital [Link] Million 15,329 15,032 13,916 12,229 11,240 10,048
Risk Weighted Assets (RWA) " 141,609 128,905 124,596 106,768 96,176 84,045
Tier I to RWA % 10.82% 11.66% 11.17% 11.45% 11.69% 11.96%
Capital Adequacy Ratio " 14.12% 15.39% 12.50% 11.93% 12.37% 12.64%
Net Return on Average RWA " 1.33% 1.72% 1.27% 0.97% 1.15% 0.93%

Stock Dividend

Bonus shares issued % 0% 0% 0% 10.00% 11.00% 12.50%

Cash Dividend % *12.50% 12.50% 10.00% - - -

Share Information

Market Value per share-31 December Rs. 17.65 15.13 12.33 10.93 7.09 3.90
- High during the year " 17.90 15.35 16.73 11.38 9.40 8.01
- Low during the year " 12.76 10.06 9.50 5.90 3.71 3.56
Market Capitalization [Link] Million 19,458.48 16,680.27 13,593.37 12,049.93 7,105.88 3,521.38
Price to book value (excl. surplus on revaluation of assets) Rs. 1.22 0.99 0.88 0.88 0.56 0.31
Price earning ratio Times 10.38 7.53 8.56 11.63 7.09 5.00

Industry Share

Deposits % 1.88% 1.99% 1.96% 1.87% 1.80% 1.69%

Advances " 2.40% 2.52% 2.59% 2.57% 2.17% 2.04%

Non Financial Information

No. of branches Absolute 288 266 246 239 233 214
No. of permanent employees " 2,715 2,715 2,639 2,835 2,644 2,286
No. of ATMs " 306 274 263 265 251 216

* Subject to shareholderÕs approval in the forthcoming AGM.

Soneri Bank Limited | Annual Report 2016

Per Branch
Performance

Gross Advances Deposits

(Rs. in Million) (Rs. in Million)

469.98 453.44 464.42 732.08

437.96 663.62 696.32
500 800
358.79
450 588.16
700 517.55
333.44
400
600 464.57
350
300 500

250 400
200 300
150
200
100
50 100

0 0
2011 2012 2013 2014 2015 2016 2011 2012 2013 2014 2015 2016

CASA Profit Before Tax

(Rs. in Million) (Rs. in Million)

13.52
524.57
600 497.97 14 10.68
412.69 451.20
12 9.93
500
353.49
10 7.39
400 6.40
288.40
8 5.04
300
6
200
4

100 2

0 0
2011 2012 2013 2014 2015 2016 2011 2012 2013 2014 2015 2016
 47

Concentration of Advances, NPLs,

Deposits and Off-Balance Sheet
Items - 31 December 2016
Advances (Gross) Classified Advances Deposits Contingencies
(Rupees (Percent) (Rupees (Percent) (Rupees (Percent) (Rupees (Percent)
in '000) in '000) in '000) in '000)

Agriculture, Forestry, Hunting and Fishing 3,222,913 2.41% 240,810 2.31% 83,271 0.04% 434,278 0.95%
Textile 28,707,232 21.46% 6,304,340 60.51% 2,033,721 0.96% 4,906,597 10.75%
Chemical and Pharmaceuticals 4,844,065 3.62% 450,871 4.33% 2,682,125 1.27% 3,372,462 7.39%
Cement 1,215,055 0.91% - 0.00% 73,336 0.03% 551,519 1.21%
Sugar 2,837,320 2.12% 86,454 0.83% 233,554 0.11% 9,390 0.02%
Footwear and Leather garments 954,568 0.71% 24,900 0.24% 788,401 0.37% 264,313 0.58%
Automobile and transportation equipment 891,890 0.67% 49,310 0.47% 7,843,582 3.72% 714,212 1.56%
Electronics and electrical appliances 1,381,090 1.03% 50,898 0.49% 810,801 0.38% 2,840,490 6.22%
Construction 900,940 0.67% - 0.00% 1,694,297 0.80% 2,371,761 5.19%
Power (electricity), Gas, Water, Sanitary 7,358,320 5.50% - 0.00% 6,407,546 3.04% 2,137,140 4.68%
Wholesale and Retail Trade 17,879,883 13.37% - 0.00% 3,396,733 1.61% 6,323,110 13.85%
Exports/Imports 6,842,185 5.12% - 0.00% 1,915,437 0.91% 2,495,322 5.47%
Financial 999,275 0.75% 233,301 2.24% 12,588,410 5.97% 1,578,513 3.46%
Food and Allied 31,175,457 23.31% - 0.00% 4,771,451 2.26% 7,277,675 15.94%
Individuals 6,788,432 5.08% 70,498 0.68% 101,114,282 47.96% 156,732 0.34%
Others 17,754,411 13.27% 2,908,038 27.90% 64,402,699 30.57% 10,221,576 22.39%
133,753,036 100.00% 10,419,420 100.00% 210,839,646 100.00% 45,655,090 100.00%

Advances (Gross) Classified Advances

0.24%
0.49%
23% 5%
% 0.68% 27.90%
24
2.
3%
1%

13

4.3
%

7% %
0.4 2.31
5%

%
0.00
2%
13%

21
%

6%
2% 4%
%1
%
% 1
1% 1 60.51%
1%

Deposits Off-Balance Sheet items

0.03% 0.95%
1.27% 0.11%
0.96% 0.37% 10.75%
0.04% 3.72% 0.38% 15.94%
7.39%
0.80%
3.04%
0.02%
7%

1.61% 1.21%
.5
30

5.97% 5.47%
0.58%
2.26%
1.56%
4.68%
6.22%

5.19%
3.46%

0.34%

13.85%
22.39%

47.96%

Agriculture, Forestry, Hunting and Fishing Textile

Chemical and Pharmaceuticals Cement
Sugar Fotwear and Leather garments
Automobile and transportation eqjuipment Electronics and electrical appliances
Construction Power (electricity), Gas, Water, Sanitary
Wholesale and Retail Trade Exports/Imports
Financial Food and Allied
Individuals Others
Soneri Bank Limited | Annual Report 2016

Maturities of
Assets and Liabilities
(Contractual)

TOTAL Upto 3M to 1Y to 3Y to 5Y &

3M 1Y 3Y 5Y above
-------------------------------(Rupees in Million)-------------------------------
Assets
Cash and balances with treasury banks 18,279 18,279 - - - -
Balances with other banks 823 823 - - - -
Lendings to financial and other institutions 5,537 4,491 1,046 - - -
Investments - net 117,884 20,039 33,240 34,895 20,125 9,585
Advances - net 125,306 25,815 68,356 9,610 8,230 13,295
Operating fixed assets 5,138 222 832 1,239 962 1,883
Deferred tax assets - - - - - -
Other assets - net 5,554 4,452 1,096 - 6 -
278,521 74,121 104,570 45,744 29,323 24,763
Liabilities
Bills payable 3,254 3,254 - - - -
Borrowings 38,905 33,294 4,739 70 341 461
Deposits and other accounts 210,840 182,320 27,643 877 - -
Sub-ordinated loans 2,999 1 1 2 2 2,993
Deferred tax liabilities - net 1,138 - 1,138 - - -
Other liabilities 3,096 2,715 381 - - -
260,232 221,584 33,902 949 343 3,454

Assets Liabilities
(Rs. in Million) (Rs. in Million)

221,584
104,570
120,000 250,000
74,121
200,000
80,000 150,000

100,000
60,000 45,744 33,902
50,000
29,323
40,000 24,763 15,000

10,000
20,000 949 3,454
343
5,000

0 0
Upto 3M 3M to 1Y 1Y to 3Y 3Y to 5Y 5Y & above Upto 3M 3M to 1Y 1Y to 3Y 3Y to 5Y 5Y & above
 49

Key Interest Bearing

Assets and Liabilities
2016 2015
Effective Effective
[Link] Interest Interest [Link] Interest Interest
(Rs. in Rate % (Rs. in (Rs. in Rate % (Rs. in
Million) Million) Million) Million)

Interest Bearing Assets

Balances with other banks 816 0.45 4 427 1 4
Lendings to financial and other institutions 6,649 4.93 328 3,348 7.39 247
Advances (excluding NPLs) 129,093 7.33 9,463 103,168 8.33 8,594
Investments (excluding equity investments) 125,859 7.52 9,465 98,209 9.65 9,477

Interest Bearing Liabilities

Deposits 171,134 4.04 6,914 171,134 5.00 8,557
Sub-ordinated loans 2,080 7.64 159 2,080 8.61 179
Borrowings 33,200 5.27 1,750 33,226 5.96 1,980

Effective interest rate on Assets & Liabilities

2016 2015

12 9.65
8.33 8.61
7.39 7.33
10 7.52 7.64

8 5.27 5.96
4.93 5
4.04
6

4 1.00
0.45
2

0
Balances with Return on Return Return Cost of Cost of Cost of
other Banks lendings to [Link] on Loans on Investments Deposits Borrowings Sub-ordinated loans

KIBOR-6 Months
2016 2015

10.00%

8.00%

6.00%

4.00%

2.00%

0.00%
Dec Nov Oct Sep Aug Jul Jun May Apr Mar Feb Jan
Soneri Bank Limited | Annual Report 2016

Statement of
Value Addition
31 DECEMBER 2016 2015
(Rs. in Million) % (Rs. in Million) %
Value added

Net Interest Income 6,844 7,597

Non interest income 2,737 3,150
Operating expenses excluding staff costs,depreciation,
amortization,donation and Workers Welfare Fund (3,062) (2,885)
Provision against advances,investments & others (24) (1,029)
Value added available for distribution 6,495 6,834

To employees
-Salaries, allowances and other benefits 2,674 41.17% 2,519 36.86%
To Government
-Income tax 1,198 18.44% 1,382 20.22%
-Workers Welfare Fund 64 0.99% 82 1.20%
To providers of capital
-Cash dividends *1,378 21.22% 1,378 20.16%
To Society
-Donations 15 0.23% 15 0.22%
To expansion and growth
- Depreciation 576 8.87% 584 8.55%
- Amortization 89 1.37% 38 0.56%
-Retained in business 501 7.71% 836 12.23%
6,495 100% 6,834 100%

* Subject to shareholderÕs approval in the forthcoming AGM.

2016 2015
To Providers To Providers
of Capital of Capital
21% 20%

Employees Employees
41% 37%
Society Society
0% 0%

Expansion Expansion
& Growth & Growth
18% 41%

Govt. Govt.
20% 21%
 51

Quarterly Performance
2016 & 2015
(Rs. In Million)
2016 2015
4th Quarter 3rd Quarter 2nd Quarter 1st quarter 4th Quarter 3rd Quarter 2nd Quarter 1st quarter

Profit & Loss Account

Interest / Return / Non Interest Income

Mark-up / return / interest earned 4,150 4,045 4,796 4,533 4,484 4,657 4,517 4,661
Mark-up / return / interest expensed (2,566) (2,581) (2,891) (2,642) (2,509) (2,760) (2,619) (2,834)
Net mark-up / interest income 1,584 1,464 1,905 1,891 1,975 1,897 1,898 1,827
Provisions (51) 92 (9) (56) (235) (374) (237) (183)
Non-mark-up / interest income 569 633 965 569 775 726 891 758
Non-mark-up / interest expenses (1,644) (1,618) (1,635) (1,582) (1,543) (1,540) (1,588) (1,452)
Profit before taxation 458 571 1,226 822 972 709 964 950
Taxation (120) (205) (590) (283) (348) (227) (470) (337)
Profit after taxation 338 366 636 539 624 482 494 613

Statement of Financial Position

Assets
Cash and balances with treasury banks 18,279 18,212 19,278 13,341 16,718 14,213 13,251 11,599
Balances with other banks 823 899 1,095 1,090 1,635 547 1,966 1,060
Lendings to financial & other institutions 5,537 10,113 5,486 6,635 3,094 4,818 3,345 1,390
Investment-net 117,884 124,806 151,368 133,334 108,846 114,493 99,976 99,779
Advances-net 125,306 98,606 115,885 112,765 112,002 101,713 104,598 100,148
Operating fixed assets 5,138 5,232 5,257 5,006 4,957 4,989 5,044 5,089
Deferred tax assets -net - - - - - - - -
Other assets 5,554 4,321 6,981 4,333 6,090 4,872 6,735 6,134
Total assets 278,521 262,189 305,350 276,504 253,342 245,645 234,915 225,199

Liabilities
Bills payable 3,254 2,680 3,399 2,718 2,706 2,375 3,354 2,485
Borrowings 38,905 31,623 74,775 52,817 39,876 41,062 27,423 33,998
Customer deposits 210,840 201,967 202,222 195,618 185,222 176,114 179,339 162,731
Sub-ordinated loans 2,999 2,999 2,999 2,999 3,000 3,000 - -
Deferred tax liabilities -net 1,138 1,347 1,448 1,546 1,417 1,687 1,850 1,871
Other liabilities 3,096 3,310 2,432 3,210 2,929 3,338 5,128 6,849
Total liabilities 260,232 243,926 287,275 258,908 235,150 225,889 217,094 207,934
Equity
Share capital - net of discount 11,025 11,025 11,025 11,025 10,023 10,023 10,023 10,023
Reserves 1,424 1,356 1,283 1,156 1,049 925 828 730
Un-appropriated profit 3,496 3,192 2,868 2,338 4,264 3,739 3,321 2,889
Surplus on revaluation of assets 2,344 2,690 2,898 3,077 2,856 3,382 3,649 3,623
Total equity 18,289 18,263 18,074 17,596 18,192 18,069 17,821 17,265
Soneri Bank Limited | Annual Report 2016

Six YearsÕ Vertical Analysis

Statement of Financial Position/
Profit & Loss Account
2016 2015 2014 2013 2012 2011
[Link] Mln % [Link] Mln % [Link] Mln % [Link] Mln % [Link] Mln % [Link] Mln %
Statement of Financial Position

Assets
Cash and balances with treasury banks 18,279 7% 16,718 7% 15,776 7% 12,673 7% 11,491 7% 8,959 7%
Balances with other banks 823 0% 1,635 1% 575 0% 707 0% 1,249 1% 879 1%
Lendings to financial & other institutions 5,537 2% 3,094 1% 604 0% 2,988 2% 1,123 1% 813 1%
Investment-net 117,884 42% 108,846 43% 75,716 36% 46,703 28% 59,517 38% 45,776 35%
Advances-net 125,306 45% 112,002 44% 107,968 51% 97,534 58% 77,170 49% 65,623 51%
Operating fixed assets 5,138 2% 4,957 2% 5,014 2% 3,734 2% 3,821 2% 3,651 3%
Deferred tax assets-net - 0% - 0% - 0% 103 0% 304 0% 386 0%
Other assets 5,554 2% 6,090 2% 7,522 4% 4,792 3% 3,954 2% 3,669 3%
Total assets 278,521 100% 253,342 100% 213,175 100% 169,234 100% 158,629 100% 129,756 100%

Liabilities and Equity

Customer deposits 210,840 76% 185,222 73% 163,250 77% 140,580 83% 120,591 76% 99,419 77%
Borrowings 38,905 14% 39,876 16% 25,825 12% 10,485 6% 20,398 13% 14,557 11%
Bills payable 3,254 1% 2,706 1% 2,780 1% 2,578 2% 2,522 2% 1,571 1%
Other liabilities 3,096 1% 2,929 1% 2,861 1% 2,308 1% 2,487 2% 2,378 2%
Deferred tax liabilities-net 1,138 0% 1,417 1% 1,420 1% - 0% - 0% - 0%
Sub-ordinated loans 2,999 1% 3,000 1% - 0% - 0% 299 0% 898 1%

Total liabilities 260,232 93% 235,150 93% 196,136 92% 155,951 92% 146,297 92% 118,823 92%

Net assets 18,289 7% 18,192 7% 17,039 8% 13,283 8% 12,332 8% 10,933 8%

Represented by:-
Share capital - net of discount 11,025 4% 10,023 4% 10,023 5% 10,023 6% 9,021 6% 8,028 6%
Reserves 1,424 1% 1,049 0% 934 0% 618 0% 410 0% 1,183 1%
Un-appropriated profit 3,496 1% 4,264 2% 3,150 1% 1,810 1% 1,947 1% 982 1%
Surplus on revaluation of assets 2,344 1% 2,856 1% 2,932 1% 832 0% 954 1% 740 0%
18,289 7% 18,192 7% 17,039 8% 13,283 8% 12,332 8% 10,933 8%

Profit & loss account

Interest / Return / Non Interest Income

Mark-up / return / interest earned 17,524 86% 18,320 85% 16,906 87% 13,639 86% 13,813 89% 12,940 88%
Fee, commission, brokerage and
exchange income 1,577 8% 1,809 8% 1,939 10% 1,600 10% 1,191 8% 1,194 8%
Capital gain and dividend income 1,131 6% 1,284 6% 535 3% 623 4% 528 3% 428 3%
Other income 29 0% 57 0% 35 0% 22 0% 12 0% 154 1%
Total Income 20,261 100% 21,470 100% 19,415 100% 15,884 100% 15,544 100% 14,716 100%

Mark-up / Return / Non Interest Expenses

Mark-up / return / non interest expensed 10,680 53% 10,722 50% 10,626 55% 8,751 55% 8,934 57% 8,997 61%
Operating expenses 6,480 32% 6,123 29% 5,798 30% 4,868 31% 4,368 28% 3,369 22%
Provisions 24 0% 1,029 5% 549 3% 735 5% 520 3% 1,271 9%
Taxation 1,198 6% 1,383 6% 860 4% 493 3% 618 4% 295 2%
Total expenses 18,382 91% 19,257 90% 17,833 92% 14,847 93% 14,440 93% 13,932 95%
Profit after taxation 1,879 9% 2,213 10% 1,582 8% 1,037 7% 1,104 7% 784 5%
 53

Six YearsÕ Horizontal Analysis

Statement of Financial Position/
Profit & Loss Account
2016 16 vs 15 2015 15 vs 14 2014 14 vs 13 2013 13 vs 12 2012 12 vs 11 2011 11 vs 10
[Link] Mln % [Link] Mln % [Link] Mln % [Link] Mln % [Link] Mln % [Link] Mln %

BALANCE SHEET

Assets
Cash and balances with treasury banks 18,279 9% 16,718 6% 15,776 24% 12,673 10% 11,491 28% 8,959 24%
Balances with other banks 823 -50% 1,635 184% 575 -19% 707 -43% 1,249 42% 879 -37%
Lendings to financial & other institutions 5,537 79% 3,094 412% 604 -80% 2,988 166% 1,123 38% 813 -68%
Investment-net 117,884 8% 108,846 44% 75,716 62% 46,703 -22% 59,517 30% 45,776 31%
Advances-net 125,306 12% 112,002 4% 107,968 11% 97,534 26% 77,170 18% 65,623 19%
Operating fixed assets 5,138 4% 4,957 -1% 5,014 34% 3,734 -2% 3,821 5% 3,651 12%
Deferred tax assets -net - 0% - 0% - -100% 103 -66% 304 -21% 386 0%
Other assets 5,554 -9% 6,090 -19% 7,522 57% 4,792 21% 3,954 8% 3,669 9%
Total assets 278,521 10% 253,342 19% 213,175 26% 169,234 7% 158,629 22% 129,756 20%

Liabilities and equity

Customer deposits 210,840 14% 185,222 13% 163,250 16% 140,580 17% 120,591 21% 99,419 21%
Interbank borrowings 38,905 -2% 39,876 54% 25,825 146% 10,485 -49% 20,398 40% 14,557 18%
Bills payable 3,254 20% 2,706 -3% 2,780 8% 2,578 2% 2,522 61% 1,571 -15%
Other liabilities 3,096 6% 2,929 2% 2,861 24% 2,308 -7% 2,487 5% 2,378 36%
Deferred tax liabilities 1,138 -20% 1,417 0% 1,420 100% - 0% - 0% - 0%
Sub-ordinated loans 2,999 0% 3,000 0% - 0% - 0% 299 -67% 898 -25%
Total liabilities 260,232 11% 235,150 20% 196,136 26% 155,951 7% 146,297 23% 118,823 20%

Share capital - net of discount 11,025 10% 10,023 0% 10,023 0% 10,023 11% 9,021 12% 8,028 33%
Reserves 1,424 36% 1,049 12% 934 51% 618 51% 410 -65% 1,183 -42%
Un-appropriated profit 3,496 -18% 4,264 35% 3,150 74% 1,810 -7% 1,947 98% 982 198%
Surplus on revaluation of assets 2,344 -18% 2,856 -3% 2,932 252% 832 -13% 954 29% 740 38%
Total equity 18,289 1% 18,192 7% 17,039 28% 13,283 8% 12,332 13% 10,933 23%

PROFIT & LOSS ACCOUNT

Mark-up / return / interest earned 17,524 -4% 18,320 8% 16,906 24% 13,639 -1% 13,813 7% 12,940 26%
Fee, commission , brokerage and
exchange income 1,577 -13% 1,809 -7% 1,939 21% 1,600 34% 1,191 0% 1,194 98%
Capital gain and dividend income 1,131 -12% 1,284 140% 535 -14% 623 18% 528 23% 428 144%
Other income 29 -49% 57 64% 35 59% 22 83% 12 -92% 154 -59%
Total income 20,261 -6% 21,470 11% 19,415 22% 15,884 2% 15,544 6% 14,716 29%

Mark-up / Return / Non Interest Expenses

Mark-up / return / non interest expensed 10,680 0% 10,722 1% 10,626 21% 8,751 -2% 8,934 -1% 8,997 25%
Operating expenses 6,479 6% 6,123 6% 5,798 19% 4,868 11% 4,368 30% 3,369 28%
Provisions 24 -98% 1,029 87% 549 -25% 735 41% 520 -59% 1,271 -12%
Taxation 1,198 -13% 1,383 61% 860 74% 493 -20% 618 109% 295 1866%
Total expenses 18,382 -5% 19,257 8% 17,833 20% 14,847 3% 14,440 4% 13,932 23%
Profit after taxation 1,879 -15% 2,213 40% 1,582 53% 1,037 -6% 1,104 41% 784 527%
Soneri Bank Limited | Annual Report 2016

Cash Flow Statement

Direct Method
2016 2015
(Rupees in '000)
CASH FLOW FROM OPERATING ACTIVITIES
Markup / return / interest and commission receipts 21,382,925 21,660,092
Markup / return / interest payments (10,912,123) (10,935,947)
Cash payments to employees, suppliers and others (5,746,743) (5,462,457)
4,724,059 5,261,688
(Increase) / decrease in operating assets
Lendings to financial & other institutions (2,442,639) (2,489,596)
Advances - net (13,433,330) (5,153,607)
Others assets - (excluding advance taxation) (134,464) (167,914)
(16,010,433) (7,811,117)
Increase / (decrease) in operating liabilities
Bills payable 547,969 (28,631)
Borrowings (1,102,159) 14,293,729
Deposits and other accounts 25,617,263 21,972,012
Other liabilities 339,030 228,790
25,402,103 36,465,900
14,115,729 33,916,471
Income tax paid (1,831,964) (171,001)
Net cash (used in) / flows from operating activities 12,283,765 33,745,470

CASH FLOW FROM INVESTING ACTIVITIES

Net investments in securities (9,531,096) (32,971,998)
Dividend received 194,129 152,160
Investment in operating fixed assets (including intangible assets) (1,004,102) (610,461)
Proceeds from disposal of fixed assets 53,526 32,577
Net cash flows from / (used in) investing activities (10,287,543) (33,397,722)

CASH FLOW FROM FINANCING ACTIVITIES

Sub-ordinated loans (1,200) 3,000,000
Dividend paid (1,378,079) (1,102,464)
Net cash (used in) financing activities (1,379,279) 1,897,536

(Decrease) / increase in cash and cash equivalents 616,943 2,245,284

Cash and cash equivalents at the beginning of the year 18,346,786 16,101,502
Cash and cash equivalents at the end of the year 18,963,729 18,346,786

CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR

Cash and balances with treasury banks 18,278,840 16,718,428
Balances with other banks 684,889 1,628,358
18,963,729 18,346,786

INDIRECT METHOD - SUMMARY 2016 2015 2014 2013 2012 2011

Cash flow from operating activities 12,284 33,745 30,230 (11,213) 17,573 11,373
Cash flow from investing activities (10,288) (33,398) (27,389) 12,076 (13,881) (10,994)
Cash flow from financing activities (1,379) 1,898 - (299) (599) 702
Cash and cash equivalent at the beginning of the year 18,347 16,102 13,261 12,697 9,604 8,523
Cash and cash equivalent at the end of the year 18,964 18,347 16,102 13,261 12,697 - 9,604

2016 2015
Investing activities Investing activities
(10,288) (33,398)

Financing activities
(1,379)

Financing activities
Operating activities 1,898
Operating activities
12,284
33,745
 55

Market Statistics of
SNBL Shares
Market Share Price Trend
Year
Quarter end High (Rs.) Low (Rs.) Closing (Rs.)

March 15.90 12.76 14.00

June 14.50 13.00 14.22
2016
September 15.49 13.40 14.64
December 17.90 14.10 17.65

March 14.30 10.06 11.25

June 13.70 10.99 12.43
2015
September 14.62 11.92 13.30
December 15.35 13.01 15.13

Monthly Pattern of Market Share Price

17

14

11

8
Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2015 2016 2016 2016 2016 2016 2016 2016 2016 2016 2016 2016 2016

Lowest Closing Highest

Historical Trend vs KSE Index

Year end 2011 2012 2013 2014 2015 2016
Share Price (Rs.) 3.90 7.09 10.93 12.33 15.13 17.65
KSE-100TM Index 11,348 16,905 25,261 32,131 32,812 47,807

Soneri Bank Price vs KSE Index

(2011-2016)

20.00 60,000
17.65
18.00
15.13 50,000
16.00
14.00 12.33
40,000
12.00 10.93

10.00 30,000
7.09
8.00
20,000
6.00
3.90
4.00
10,000
2.00
Soneri Bank Ltd. Price 0 0
2011 2012 2013 2014 2015 2016
KSE Index
Soneri Bank Limited | Annual Report 2016

Financial
Calendar
2016
1st Quarter Results issued on 20 April 2016
2nd Quarter Results issued on 16 August 2016
3rd Quarter Results issued on 21 October 2016
Annual Results issued on 15 February 2017
25th Annual General Meeting Scheduled for 28 March 2017

2015
1st Quarter Results issued on 17 April 2015
2nd Quarter Results issued on 13 August 2015
3rd Quarter Results issued on 20 October 2015
Annual Results issued on 11 February 2016
24th Annual General Meeting held on 25 March 2016
 57

DirectorsÕ Report
to Shareholders
On behalf of the Board of Directors, I am pleased to present the Directors' Report of Soneri Bank Limited (Bank) along with the audited
financial statements and auditors' report thereon for the year ended 31 December, 2016.

ECONOMY

FY 2016 was another consecutive year of macroeconomic improvement for Pakistan. Country met most of the key economic milestones
with hallmark being successful completion of the US$ 6.4 billion IMF Extended Fund Facility (EFF) program and issuance of US$ 1 billion
five-year dollar denominated international Sukuk bonds.

During the year, the Country's FX reserves increased by US$ 2.4 billion to US$ 23.2 billion at December 2016. A stable reserves position
supported stability in the exchange rate. Headline CPI inflation was also contained during the year at 3.7 percent (CY 2015: 3.2 percent),
allowing the State Bank of Pakistan (SBP) to keep interest rates low. SBP made only one rate cut of 25bp in May-16. Growth momentum
also picked up, with GDP growth of 4.71 percent in 2016 compared to 4.04 percent during FY 2015. It was supported mainly by
strengthening of service and manufacturing sectors.

China Pakistan Economic Corridor (CPEC) related initiatives remained at the forefront adding stimulus to the economy. Domestic
business sentiment improved, with expansion planned in cement, autos, and steel sectors announced. Major concerns that linger
include current account deficit which rose sharply towards the end of 2016 (1HFY17 deficit of US$ 3.6 billion, a 100% increase over
the previous year) due to the impact of increase in oil prices and decline in exports and remittances.

Other factors which can be an impediment going forward are persistent power outages, which though having declined over the last
three years, still persist. The chronic issue of fiscal deficit and financial losses of ailing public sector enterprises also needs to be
tackled for long term sustainability.

BUSINESS OVERVIEW

FY 2016 marked the year of Soneri Bank's 25th anniversary. The Bank has since grown from strength to strength to attain a position
which is synonymous with a seasoned banking practices and financial stability.

Bank continues to make progress on its strategic objectives. The year unfolded many challenges resulting from reduced margins and
intense competition due to low interest rate environment. Notwithstanding, the Bank grew in terms of branch footprint, balance sheet
footing and delivered requisite shareholder return. The Bank is presently providing banking services from 288 branches and 306 ATMs
across 132 cities. The Bank has been focusing on improving customer experience and brand building through various initiatives like
launching of new products, implementation of new complaint management/ phone banking software and staff trainings.

Further your Bank adequately meets the SBP Basel III requirements and is well positioned to meet its growth plans with Capital Adequacy
ratio of 14.12 percent.

The Bank's strategic focus has been and remains on managed business growth, process improvement, and proactive management
of cost and delinquent assets. The Bank has an ADR which has been consistently above industry average and reflects bank's focus
and contribution to the economy.

Looking at the last six years' performance, the deposits base of the Bank increased to Rs. 210.84 billion which translates into compounded
annual growth rate (CAGR) of 16.15 percent. The CASA component of deposits showed an impressive growth, with six years CAGR
of 18.21 percent. This represents the bank's policy to mobilize low cost deposits. Similarly, net advances rose to Rs.125.31 billion with
six year CAGR of 13.91 percent.
Gross Advances
Deposits
160.00 133.75
120.62
140.00
250.00 104.67 115.61
210.84
120.00
185.22 83.60
200.00 100.00
163.25 71.36
140.58 80.00
PKR bln

150.00
PKR bln

120.59
60.00
100.00 99.42
40.00

50.00 20.00

0 0
2011 2012 2013 2014 2015 2016 2011 2012 2013 2014 2015 2016
Soneri Bank Limited | Annual Report 2016

DirectorsÕ Report
to Shareholders
OPERATING RESULTS

The highlights of financial results for FY 2016 are presented as follows:

Profit & Loss Account 31 December 2016 31 December 2015 Variance (%)
---------------- (Rs. in million) ----------------
Net Interest Margin & Non Markup Income 9,580.38 10,747.85 (10.86)
Non Markup Expenses 6,478.63 6,123.00 5.81
Profit before tax & provisions 3,101.75 4,624.85 (32.93)
Profit before tax 3,077.34 3,595.61 (14.41)
Profit after tax 1,878.84 2,212.77 (15.09)
Earnings Per Share - Rupees 1.7042 2.0071 (15.09)

Statement of Financial Position 31 December 2016 31 December 2015 Variance (%)

---------------- (Rs. in million) ----------------
Shareholders Equity (excluding surplus) 15,944.77 15,335.96 3.97
Deposits 210,839.65 185,222.38 13.83
Advances - net 125,305.77 112,001.75 11.88
Investments - net 117,883.96 108,846.11 8.30

The Bank has posted a profit after tax of Rs.1.88 billion which Profit After Tax
translates into earnings per share of Rs.1.7042 (31 December, 2015:
Rs. 2.0071). Profit before tax for the year stands at Rs.3.08 billion 2.50 2.21
against Rs. 3.59 billion last year.
2.00 1.88
The reduction in earnings is mainly a factor of industry predicament
due to lower interest rates versus 2015. This pressure was offset 1.58
1.50
PKR bln

by higher recovery of non-performing loans. The provision against 1.10

1.04
non-performing loans for the year thus stands at Rs. 24.4 million
1.00 0.78
only versus Rs. 1.03 billion last year.

The results incorporate higher tax charge on account of super tax 0.50
which was re-imposed this year. Revenue comprising net mark-up
income and non-mark-up income has decreased by 10.86 percent 0.00
versus 2015. The key reasons are pressure on net mark-up income 2011 2012 2013 2014 2015 2016
which is down by 9.91 percent, lower exchange earnings which

Interest Income 2016 Non-Interest Income 2016

(Rs in Million) (Rs in Million)

Balance with Other Income

other banks Lendings to 29
31 FI 313

Gain on sale
of Securities
939
Fee, Commission
& Brokerage
1,286
Loan & Investments
Advances 9,451
7,730

Income from
dealing in FX
290
Dividend
Income
192
 59

DirectorsÕ Report
to Shareholders
are down by 38.58 percent as well as lower capital gains by 16.09 percent. The impact on net mark-up income is due to maturity of
high yielding PIBs during third quarter of the year topped with overall reduction in margins/fee due to lower interest rates and stiff
competition.

Non-markup expenses increased by 5.81 percent in spite of inflationary pressure and new branches opened during the year. The
branch network of the Bank now stands at 288 (2015: 266)

The Bank's net assets (including surplus) amounted to Rs.18.29 billion as at 31 December, 2016. Overall deposits show an impressive
growth of 13.83 percent with CASA deposits increasing by 12.90 percent. Contributing to CASA growth is growth in current deposits of
20.32 percent. Advances (net of provisions) grew by 11.88 percent. The Bank's net Advances to Deposits ratio decreased to 59.43 percent
from 60.47 percent in 2015. The NPL coverage has been prudently managed and increased to 81.07 percent (2015: 74.37 percent).
Investments grew by 8.30 percent with main deployment being in government securities. The gross surplus on revaluation of securities
being Rs. 2.18 billion is lower than last year's position of Rs. 2.67 billion which is a factor of gains realized and market yield increasing in
December, 2016.

DIVIDEND

The Board has recommended a final cash dividend (D-8) of Rs. 1.25/- per share (i.e. 12.50%) for the year ended 31 December, 2016
to be approved in the 25th Annual General Meeting of the Shareholders.

LOOKING AHEAD

On the core profitability front, 2017 is likely to be another challenging year for the banking sector. Continued maturity of high yielding
PIBs, falling credit spreads on lending and low likelihood of an interest rate increase as an election year approaches are the key factors
that are likely to keep net interest income growth subdued.

The Bank's strategy will be to capitalize on the improvement in economic growth, and the rising trend of both investment and consumption
in the economy. A key focus will be to improve fee income through trade as well as accentuating consumer finance business. Expanding
the loan portfolio is also a priority, both on the corporate and commercial side, keeping a prudent approach with regards to risk.

Management is cognizant of the downside risks to macroeconomic stability, in particular on the balance of payments front. The current
account has deteriorated sharply in the last few months, as a result of rising imports, whilst exports and remittances have fallen. As a
result, our approach to lending will remain prudent. On the deposit front, management will keep a focus on increasing low cost deposits,
through existing as well as new branches.

Despite the challenging headwinds, your Bank believes that there are beneficial opportunities to be exploited and it is geared up for
the course. The Bank is well capitalized under the SBP defined Basel III based Capital Adequacy ratio.

During 2016, the Bank embarked on the upgrade of core banking system which is expected to culminate in 2017 thus improving the
back end efficiency as well customer experience. Furthermore, the Bank is committed to investing in digital solutions, the first of which
was launched in form of Soneri mobile application during the year.

SECOND (2ND) ISSUANCE OF TERM FINANCE CERTIFICATES (TFCs)

The Bank had issued its second Term Finance Certificates in the year 2015. It has been regular on meeting its commitments under
the agreement and the third (3rd) redemption and profit payments were duly made to the TFC investors on 06 January, 2017.

CREDIT RATING

The Pakistan Credit Rating Agency (PACRA) maintained the long term credit rating of AA- (Double A Minus) and short term rating of
A1+ (A One Plus) through its notification dated: 17 June, 2016 [2015: long term AA- (Double A Minus): short term A1+ (A One Plus)]

PACRA has also maintained credit rating of unsecured, subordinated and listed Term Finance Certificates (TFC-2) issue of worth
PKR 3,000 million at A+ (Single A plus) vide its notification dated 16.12.2016.

BOARD OF DIRECTORS

The existing Board which was elected on 28 March, 2014 will complete its three years' term on 28 March, 2017. New Board of Directors
shall be elected in 25th Annual General Meeting scheduled to be held on 28 March, 2017.

The Board remained fully compliant with the provision with regard to their training program. Two directors have received "Certificate
of Director Education" from the Pakistan Institute of Corporate Governance (ÒPICGÓ). One director has also received ÒCertificate in
Company Direction (International)Ó from Institute of Directors, UK. Four directors are exempt from training as mentioned in proviso to
clause 5.19.7 of the Pakistan Stock Exchange Regulations.
Soneri Bank Limited | Annual Report 2016

DirectorsÕ Report
to Shareholders
Our directors have also attended various courses/workshops. In the year 2015, three directors attended a week long course on ÒThe
Accelerated Certificate in Company DirectionÓ a program of the Institute of Directors, UK arranged in Pakistan by the PICG. Further
during the year under review, three other directors also participated in a three full days' workshop on ÒCorporate Governance & Director
Duties ExcellenceÓ held in Malaysia.

BOARD AND COMMITTEES' MEETINGS

Details of the meetings of the Board of Directors and its Committees held during 2016 and the attendance by each director/committee
member are given as under:-

Board Human Board Risk

Board of Board Audit Board Credit Resource Management
Directors Committee Committee Committee Committee
Meetings Meetings Meetings Meetings Meetings
Attended**

Attended**

Attended**

Attended**

Attended**
[Link]. Name of Director Held Held Held Held Held
during during during during during
the the the the the
year year year year year

1 Mr. Alauddin Feerasta 6 6 * * 4 4 * * * *

2. Mr. Mohammad Aftab Manzoor 6 6 * * 4 4 4 4 3 3

3. Mr. Nooruddin Feerasta 6 5 4 2 4 3 * * * *

4. Mr. Muhammad Rashid Zahir 6 6 4 4 4 4 * * * *

5 Mr. Amar Zafar Khan 6 6 4 4 4 4 4 3 3 2

6 Syed Ali Zafar 6 3 * * * * * * * *

7 Mr. Manzoor Ahmed (NIT Nominee) 6 6 * * * * 4 4 * *

8 Mr. Shahid Anwar (NIT Nominee) 6 6 4 4 * * 4 4 3 3

Total Number of meetings held during the year 6 4 4 4 3

* not a member of the Committee

**Leave of absence was granted to those directors/members, by the Board/Committee, who could not attend some of the meetings.

STATEMENT OF INVESTMENTS OF PROVIDENT AND GRATUITY FUNDS

The Bank operates approved funded provident and gratuity fund schemes covering all its permanent employees. The investment
balances (doesn't include deposit with banks) are as follows:

31 December 31 December
2016 2015
(Un-audited) (Audited)
------------- (Rupees in '000) ------------

Investments of Provident Fund 525,730 681,956

Investments of Gratuity Fund 144,304 358,793
 61

DirectorsÕ Report
to Shareholders
COMPLIANCE WITH CODE OF CORPORATE GOVERNANCE

As required by the Code of Corporate Governance (the Code), a prescribed statement by the Board, along with Auditors' Review Report
thereon, forms part of this Annual Report.

The directors are pleased to give the following statement as required by clause (xvi) of the Code:

¥ The financial statements present fairly the state of affairs of the Bank, the results of its operations, cash flows and changes in
equity.
¥ Proper books of account of the Bank have been maintained.
¥ Accounting policies as stated in the notes to the financial statements have been consistently applied in the preparation of financial
statements except for change referred to in note 3.5 to the accounts which has no effect on these financials. Accounting estimates
are based on reasonable and prudent judgment.
¥ International Financial Reporting Standards, as applicable to banks in Pakistan, and as stated in note 3 to the financial statements,
have been followed in the preparation of the financial statements.
¥ The system of internal control is sound in design and has been effectively implemented and monitored.
¥ There are no significant doubts upon the Bank's ability to continue as a going concern.
¥ There has been no material departure from the best practices of corporate governance, as detailed in the listing regulations.
¥ The details of outstanding statutory payments, if any, have been adequately disclosed in the financial statements.

STATEMENT ON RISK MANAGEMENT FRAMEWORK

The Bank's risk management framework is based on a clear understanding of various risks, disciplined risk assessment and measurement
procedures and continuous monitoring. The policies and procedures established for this purpose are continuously benchmarked with
international best practices. The Board of Directors has oversight on all the risks assumed by the Bank. Specific Committees have been
constituted to facilitate focused oversight of various risks.

The Bank's risk management strategy is targeted at ensuring proper risk governance so as to facilitate ongoing effective risk discovery
and to set aside adequate capital efficiently to cater for the risks arising from our business activities. Risks are managed within levels
established by the senior management committees and approved by the Board and its committees. We have put in place a comprehensive
framework of policies, methodologies, tools and processes that will help us identify measure, monitor and manage all material risks
faced by the Bank. This allows us to concentrate our efforts on the fundamentals of banking and to create long-term value for all our
stakeholders.

The Bank's risk appetite, policies and governance frameworks provide the overarching principles and guidance for the Bank's risk
management activities. They help to shape our key decisions for capital management, strategic planning and budgeting, and performance
management to ensure that the risk dimension is appropriately and sufficiently considered. In particular, the Bank Risk Appetite is part
of the Bank's Internal Capital Adequacy Assessment Process (ICAAP), which incorporates stress testing to ensure that the Bank's
capital, risk and return are within acceptable levels under stress scenarios.

The CEO has established senior management committees to assist in making business decisions with due consideration to risks and
returns. The main senior management committees involved in this are the Management Executive Committee, Asset and Liability
Committee (ALCO), Credit Risk Management Committee (CRMC), Operational Risk Management Committee (ORMC) and Market and
Liquidity Risk Management Committee (MRMC). These committees also assist the BRMC/Board in specific risk areas.

The Bank has continued with the system of comprehensive risk profiling of the Bank in line with regulatory guidelines that will facilitate
integrated risk management and to achieve business growth with improved safety, soundness and profitability. The Bank has persistently
invested in human capital and technology; best available market resources, technology (SAS) have been made part of Risk Management
Division.

The Bank continuously improves/updated its Risk Management Framework in the light of the international best practices and State
Bank of Pakistan guidelines through significant investments in human resources, technology and training.

STATEMENT ON INTERNAL CONTROLS

The Board of Directors acknowledges its responsibility for ensuring that an adequate and effective internal control system covering
all aspects of our banking operations is in existence and vigorously followed by senior management.
Soneri Bank Limited | Annual Report 2016

DirectorsÕ Report
to Shareholders
Based on our review of internal control system through various reports from Internal Audit Division, Internal Control Compliance &
Control Group and Statutory Auditors as well as various policies, procedures and other matters presented for our review and approval,
from time to time, the management believes that the Bank's existing system of Internal Control is considered reasonable in design and
is being effectively implemented and monitored.

FINANCIAL STATEMENTS

The financial statements of the Bank have been audited without qualification by the auditors of the Bank, M/s. A.F. Ferguson & Co.,
Chartered Accountants and approved/authorized by the Board in its meeting held on 15 February, 2017 for issuance to the shareholders.

No material changes and commitments affecting the financial position of your Bank have occurred between the end of the financial
year to which these financial statements relate and the date of the Directors' Report.

EXTERNAL AUDITORS

The retiring auditors M/s. A.F. Ferguson & Co., Chartered Accountants, being eligible, offer themselves for re-appointment. The audit
committee of the Board has recommended their re-appointment.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

The Bank is committed to serving the society both directly and indirectly and in this regard, has contributed in various ways and means.
Besides, contributing towards national exchequer and employee benefit schemes, the Bank has been a regular contributor in the
philanthropic and sports activities. A summary of Bank's key CSR activities during the year forms part of this Annual Report.

SIX YEARS' OPERATING AND FINANCIAL DATA

Six years financial performance of the bank is presented on page No. 43.

PATTERN OF SHAREHOLDING

The pattern of shareholding as required under section 236(2)(d) of the Companies Ordinance, 1984 and Clause (xvi) of the Code of
Corporate Governance forms part of this Annual Report.

ACKNOWLEDGEMENT

On behalf of the Board, I would like to express my sincere appreciation to the customers and shareholders for their continued trust
and patronage, the State Bank of Pakistan, the Securities and Exchange Commission of Pakistan and other regulatory bodies for their
continued guidance and support. I would also like to record specific appreciation for all employees for their dedication, devotion and
hard work throughout the year 2016.

On behalf of the Board of Directors

ALAUDDIN FEERASTA
Chairman

Lahore: 15 February, 2017

 63

43
Soneri Bank Limited | Annual Report 2016

3.5
 65

* * * * 4 4 * * 6 6 1

3 3 4 4 4 4 * * 6 6 2

* * * * 3 4 2 4 5 6 3

* * * * 4 4 4 4 6 6 4

2 3 3 4 4 4 4 4 6 6 5

* * * * * * * * 3 6 6

* * 4 4 * * * * 6 6 7

3 3 4 4 * * 4 * 6 6 8

3 4 4 4 6
Soneri Bank Limited | Annual Report 2016
 67

(10.86) 10,747.85 9,580.38

5.81 6,123.00 6,478.63
(32.93) 4,624.85 3,101.75
(14.41) 3,595.61 3,077.34
(15.09) 2,212.77 1,878.84
(15.09) 2.0071 1.7042

3.97 15,335.96 15,944.77

13.83 185,222.38 210,839.65
11.88 112,001.75 125,305.77
8.30 108,846.11 117,883.96

2.50 2.21

2.00 1.88

1.58
1.50
PKR bln

1.10
1.04
1.00 0.78

0.50

0.00
2011 2012 2013 2014 2015 2016

Other income Balance with

29 other banks Lendings to
31 FI 313

Gain on sale
of Securities
939
Fee, commission
& Brokerage
1,286
Loan & Investments
Advances 9,451
7,730

Income from
dealing in FX
290
Dividend
Income
192
Soneri Bank Limited | Annual Report 2016

160.00 133.75
120.62
140.00
104.67 115.61 250.00
210.84
120.00
83.60 185.22
100.00 200.00
71.36 163.25
80.00 140.58
PKR bln

150.00
PKR bln

120.59
60.00
100.00 99.42
40.00

20.00 50.00

0 0
2011 2012 2013 2014 2015 2016 2011 2012 2013 2014 2015 2016
 69

Statement of
Internal Controls
Year ended 31 December 2016
This Statement of Internal Controls is based on an ongoing process designed to:

¥ Identify the significant risks in achieving the Bank's policies, aims and objectives;
¥ Evaluate the nature and extent of those risks;
¥ Manage these risks efficiently, effectively and economically.

This process was in place for the year ended 31 December 2016.

The Board of Directors has instituted an effective Internal Audit Division which not only monitors compliance with the Bank's policies,
procedures and controls and reports significant deviations regularly to the Board Audit Committee but also regularly reviews the
adequacy of the overall Internal Control system. The observations and weaknesses pointed out by the external auditors are also
addressed promptly and necessary steps are taken by the management to eliminate such weaknesses.

It is the responsibility of the Bank's management to establish and maintain an adequate and effective system of internal control, to
implement sound control procedures and to maintain a suitable control environment. In order to ensure implementation as well as to
minimize various regulatory, reputational and compliance risks, the management conducts on-site monitoring of branches through
periodical visits and off-site monitoring through various automated tools such as SAS AML, World Check, Sonaware dot net as well
as various internally developed systems by Compliance & Control Group.

The Bank has adopted the internationally accepted COSO (Committee of Sponsoring Organizations of the Tread-way Commission)
Internal Control- Integrated Framework. A reputable advisory firm had been appointed to provide services on implementation of SBP
guidelines on Internal Controls over Financial Reporting (ICFR) in the prior years. To further strengthen controls, enhance governance
and monitoring, the management had constituted an Internal Control Department which is also an integral part of Compliance & Control
Group of the Bank.

In order to ensure consistency in the process of compliance with the relevant guidelines, the Bank followed a structured roadmap.
Accordingly, the Bank completed a detailed documentation of the existing processes and controls, together with a comprehensive
gap analysis of the control design and development of implemented remediation plans for the gaps in 2010.

Furthermore, the Bank has developed a comprehensive management testing and reporting framework for ensuring ongoing operating
effectiveness of majority of key controls and has significantly addressed the design improvement opportunities identified to complete
the project related initiatives.

While concerted efforts have always been made to comply with the SBP Guidelines issued, the identification, evaluation, and management
of risks within each of the Bank's key activities, their continued evaluation and changes to procedure remains an ongoing process.

In accordance with SBP directives, the Bank has completed all the stages of ICFR and upon satisfactory completion of ICFR roadmap,
the SBP granted waiver from the submission of external auditor Long Form Reports effective 2012. An annual assessment report by
Board Audit Committee on ICFR duly signed by chairman BAC is being submitted to SBP annually since then.

The Bank has also successfully completed the cycle of SBP's Internal Control over Financial Reporting exercise for the Year 2016 and
report will be submitted by Board Audit Committee to the State Bank of Pakistan during the year 2017.

MOHAMMED AFTAB MANZOOR

President & Chief Executive Officer
Lahore: 15 February 2017
Soneri Bank Limited | Annual Report 2016

Code of
Conduct
(Summarized Version)
This Code of Conduct (Code) outlines the principles, policies and 5. POLITICAL PARTICIPATION
laws that govern the activities of Soneri Bank Limited (Bank), and to No employee shall take part in, subscribe in any aid of,
which the Board members, employees and others who work with the assist in or take part in any political activity whatsoever.
Bank, or represent the Bank directly or indirectly must adhere. All No employee shall canvass or otherwise, interfere or use
employees are required to read, understand, sign and follow the his/her influence in connection with or take part in any
Code of Conduct. election to a legislative or local body, whether in Pakistan
or elsewhere. Provided that a Bank employee who is
OBJECTIVE qualified to vote at such elections may exercise his/her
Soneri Bank Limited (Bank) expects all of its employees to act in full right to vote.
compliance with the policies & guidelines set forth in this Code of
Conduct. It is the employee's responsibility to make oneself familiar 6. PROTECTING BANKS RESOURCES
with the following and other policies related to their own business An employee must not persue such outside business
unit: activity(ies) and relationships using Banks resources
(including but not limited to physical space, office supplies,
1. OUTSIDE BUSINESS INTEREST office communication equipment or time) or allow any
No employees shall engage directly or indirectly, in any outside business, civic or charitable activities to interfere
other business but shall faithfully and diligently, perform with his/her job performance. Employees must never
the duties entrusted to him /her from time to time and devote compromise on integrity, either for personal or professional
maximum time and attention to work of the Bank, and benefit. Each employee is also personally responsible for
ensure his/her best endeavors to promote its interest and the integrity of the information, reports and records under
welfare. No employee shall take up any activity which will his/her control.
bring him/her any reward or remuneration or benefit, directly
or indirectly other than from the job at the Bank. 7. ACT OF MISCONDUCT
Employee shall not commit any act of subversion or
2. FINANCIAL INTEREST misconduct or misbehavior; and will also not act in any
No employee or his/her immediate family shall enter into manner, which could be prejudicial or detrimental to the
speculative and trading activity in stocks, shares, bonds, interest of the Bank. The Bank shall be entitled to dispense
or any other securities or commodities, either on his/her with the services of any employee, any time per the law of
own account or that of any other person, firm, company, his/her employment and/or repeated negligence,
nor shall involve in other speculative activity (ies) including disobedience, dishonesty, breach of trust, acts of any other
betting/gambling. Further, an employee and his/her misconduct or subversion without any notice.
immediate family shall not derive any benefit or assist
others to derive any benefit from the access to and 8. DATA SECURITY AND CONFIDENTIALITY
possession of information about the Bank, which is not in All employees shall avoid, during his/her employment or
the public domain and thus constitutes inside information. thereafter to disclose or divulge to any person whomsoever
All the employees are required to comply with the applicable any information relating to the Bank or its customers,
company law on prevention of insider trading. suppliers, employees or any confidential information which
he/she may have access to while being in the service of
3. ANTI BRIBERY & CORRUPTION the Bank. All employees shall be bound to protect the
No employee shall accept any presents either in cash or confidentiality of the non-public information at all times.
kind from Bank clients, suppliers, vendors and contractors
or others, by way of illegal gratification or otherwise. Any 9. ABIDANCE OF LAWS OF THE LAND
such instance where business judgment has been Notwithstanding anything contained hereinabove every
compromised due to such monetary or non-monetary gifts employee will abide by all the laws of the land including
will be considered as a violation of this code. Accepting Labor Laws where applicable.
gifts and benefits that may appear as engaging others in
bribery or influencing for a consideration for an official or 10. PUNCTUALITY
business favor is prohibited. Employees are expected to be at work on time every
business day. In the event that employee is absent or late
No employee shall give or take bribes or engage in any due to illness, accident or personal reasons, he/she is
form of corruption. required to inform his/her supervisor as soon as possible
so that the department may make other arrangements for
4. VIOLATION OF LAW substitute help while the employee is away.
No payment or transaction should be made or undertaken,
by an employee or authorized or instructed to be made or 11. SEPARATION FROM THE BANK
undertaken by any other person or the Bank if the In case of resignation every employee will have to attend
consequence of that transaction or payment would be the his/her duties until the resignation is accepted and employee
violation of any law in force. is properly relieved by the competent authority. In case
he/she fails to attend his/her duty after tendering resignation,
 71

Code of
Conduct
(Summarized Version)
the resignation will not be considered and he/she may be etc are primarily for business purposes. Employees may
dealt according to the relevant HR Policy. not use these systems in a manner that could be harmful
or embarrassing to the Bank. Personal communications
Employees at the time of separation from Bank should using these systems must be kept to a minimum. In case
return Bank assets, facilities (blackberry, laptop, mobile of his/her separation from the Bank, all rights to property
etc), visiting and Identity cards, stamps etc. and information generated or obtained as part of an
employment relationship remains the exclusive property
12. ETHICS, DISCRIMINATION OR HARASSMENT of the Bank only.
All employees are expected to comply with ethical standards
as a critical element of their responsibilities. It is encouraged An employee must never use Bank systems to transmit or
to raise possible ethical issues and Bank prohibits any receive electronic images or text of a sexual nature or
retaliatory action against any individual for raising legitimate containing ethnic slurs, racial epithets or any other material
concerns regarding ethics, discrimination or harassment of a harassing, offensive or lewd nature.
matters or for reporting suspected violations. In case of
any issue that has been reported, investigation/inquiry shall 18. RECORD MANAGEMENT
be held, and all employees are required to fully co-operate Records are very important business assets. The Bank is
with any appropriately authorized internal or external committed to managing its records in a consistent,
investigations. systematic and reliable manner; records provide evidence
for business activities and decisions and are often required
13. DRESS CODE & PERSONAL HYGIENE to meet legal and regulatory requirements. Employees are
Employees are expected to dress in a manner consistent required to retain the records in accordance with their
with the nature of work performed. While at work, all importance and applicable statutory record retention
employees are expected to dress neatly and appropriately requirements and Bank policies.
in normal office as per the Dress code policy of the Bank.
19. TAXATION
All employees are expected to abide with the personal The Bank is also committed to accuracy in tax related
hygiene requirements. records and tax reporting in compliance with the overall
intent and applicable laws. Tax returns must be filed on a
14. PROTECTING BANK RESOURCES timely basis and taxes due paid in time.
All employees are responsible for safeguarding the tangible
and intangible assets of the Bank and its customers, 20. WORKFORCE DIVERSITY
suppliers and distributors that are under their control. Bank The Bank believes that diversity in the staff is critical to its
assets may be used only for proper company purpose. success and is fully committed to equal employment
Misappropriation, carelessness or waste of Bank assets is opportunity, compliance with fair employment practices
a breach of one's duty to the Bank and should be avoided and non discrimination laws. The Bank prohibits sexual or
at all cost. any other kind of discrimination, harassment or intimidation,
whether committed by or against a supervisor, co-worker,
15. FRAUD, THEFT OR ILLEGAL ACTIVITY customer, vendor or visitor.
An employee must not:
- steal, embezzle or misappropriate money, funds or 21. RELATED STAFF MEMBERS
anything of value from the Bank, doing so shall subject Where husbands, wives or other relatives are employed
him/her to potential disciplinary action according to the in the same or related areas, no employee should allow
Bank policy personal and/or domestic circumstances to impinge upon
- use BankÕs assets for personal gain or advantage or affect either working relationships or the breach of
- remove BankÕs assets from their premises and facilities Bank's employment regulations regarding confidentiality
unless properly authorized by the relevant competent and fidelity.
authority
- use Bank's stationery or corporate documents, Bank's 22. DRUG FREE WORKPLACE
brand name for non official purposes since such implies Selling, manufacturing, distributing, possessing, using or
endorsement from Soneri Bank being under the influence of illegal drugs on the job is
prohibited.
16. EMPLOYEE IDENTIFICATION & SECURITY
If employees are supplied with an identification card, this 23. HEALTH AND SAFETY
must be worn visibly when on Bank's premises. Each To protect the well being of the Bank's valued customers
employee is also responsible for the safekeeping of his/her and employees, smoking and eating betel leaf within the
ID card. premises of Bank is strictly prohibited.

17. USE OF COMMUNICATION TOOLS 24. UNFAIR DEALING PRACTICES

Bank's telephone, e-mail, voice-mail, computer, systems No employee may take unfair advantage of anyone through
Soneri Bank Limited | Annual Report 2016

Code of
Conduct
(Summarized Version)
manipulation, concealment, abuse of confidential 30. PERSONAL INVESTMENTS
information, misrepresentation of facts or other unfair dealing If any personal investment that affects or appears to affect
practices. an employee's ability to make an unbiased business
decision for Bank, should be avoided.
25. MEDIA AND PUBLIC SPEAKING
No employee other than the authorized personnel is allowed 31. PERSONAL FINANCIAL NEEDS
to publish, make speech, give interviews or make public Bank employee and their families are encouraged to use
appearance that are connected to Bank's business interests, the Bank for their personal financial services needs.
else an approval is required from Head of HR, Head of
Compliance and President. 32. MODIFICATIONS AND AMENDMENTS
The Code of Conduct is subject to variances, modifications,
26. VENDOR RELATIONSHIP and amendments, from time to time through the resolution
Employees responsible for buying assets on Bank's behalf of the Board of Directors.
should purchase all goods and services on the basis of
quality, price, availability, terms and service. Employees 33. BREACH OF CODE OF CONDUCT
responsible for customer relationship must never lead a In case of the breach of any of the above ÒCode of ConductÓ,
supplier or customer to believe that they can inappropriately the employee shall be liable to disciplinary action. This
influence any procurement decisions at Bank. Employees shall be without prejudice, to any other rights and remedies
shall ensure to abide by all the provisions of the Fixed Asset of the Bank.
Management and Expenditure Control Policies of the Bank
Failure to observe these policies may result in a disciplinary
27. CONFLICT OF INTEREST action, up to and including immediate termination of
Real or perceived conflicts of interest in any process or employment or any other relationship with the Bank.
form should be disclosed and avoided. An employee or Furthermore, violations of this Code may also be violations
any of his/her relatives/associates should not derive any of the law and may result in civil or criminal penalties.
undue personal benefit or advantage by virtue of his/her
position or relationship with the Bank. Any dealings with a If an employee has any questions about these policies or
related party must be conducted in such a way that no would like to report violation of the Code of Conduct, he/she
preferential treatment is given and adequate disclosures may approach Head of Compliance Division for further
are made as required by the law and as per the applicable guidance and advice.
policies of the Bank.

Employees must be sensitive to any activities, interests or

relationships that might interfere with or even appear to
interfere with his/her ability to act in the best interests of
the Bank and its customers.

An employee must notify an authorized person or HR of

any business relationship or proposed business transaction
Bank may have with any company in which he/she or a
related party has a direct or indirect interest or from which
he/she or related party may drive a benefit. Even if related
party or relative is employed, this may raise conflict of
interest. Therefore, it should be avoided.

28. ACCESS TO BUSINESS INFORMATION

Employees should also take steps to ensure that business
related paper work and documents are produced, copied
properly filed and stored or if not needed, should be
properly discarded to minimize the risk that an unauthorized
person might obtain access to confidential information.
Access to work areas and systems should also be properly
controlled.

29. CUSTOMER CONFIDENTIALITY

Employees of the Bank are strictly prohibited to disclose
the fact to the customer or any other quarter that a suspicious
transaction or related information is being or has been
reported to any authority, except if required by law.
 73

Mechanism adopted for Board's

own Performance Evaluation
Soneri Bank Limited has put in place a mechanism whereby performance of overall Board is evaluated [Link] technique is
used where scaled questionnaire is provided to each Director to obtain their [Link] questionnaire consists of the following main
sections:-

a) Strategic Plan and Performance

b) Management Interaction

c) Board of DirectorsÕ Operations

d) Board Committees

Scale from 1 to 5 (1 ÒStrongly disagreeÓ and 5 being ÒVery strongly agreeÓ) is used to rate the assessment criteria given under each sections.
Feedback so received from each Director is then collated and analyzed to determine performance in percentage terms against each of the
above mentioned section.

Final result of the annual evaluation of the Board's own performance is then presented to the Board of Directors which it accordingly reviews
and identifies any issues, weaknesses or challenges along with how these can be adequately addressed.

This mechanism on the evaluation process adopted by the Bank is being published for all the stakeholders in compliance of the BPRD
Circular No.11 dated: 22 August 2016.
Soneri Bank Limited | Annual Report 2016

Statement of Compliance
with the Best Practices of
Code of Corporate Governance
This statement is being presented to comply with the Code of Corporate Governance contained in Regulation No 5.19 of listing
regulations of Pakistan Stock Exchange Limited for the purpose of establishing a framework of good governance, whereby a listed
company is managed in compliance with the best practices of corporate governance.

The Bank has applied the principles contained in the CCG in the following manner:

1. The Bank encourages representation of independent non-executive directors and directors representing minority interests on its
Board of Directors. At present the Board includes seven non-executive directors including two independent directors and one
executive director (President/CEO):

Category Names

Independent Directors Mr. Amar Zafar Khan

Syed Ali Zafar

Executive Director Mr. Mohammad Aftab Manzoor (President & CEO)

Non-Executive Directors Mr. Alauddin Feerasta

Mr. Nooruddin Feerasta
Mr. Muhammad Rashid Zahir
Mr. Manzoor Ahmed
Mr. Shahid Anwar

The independent directors meet the criteria of independence under clause 5.19.1.(b) of the CCG.

2. The directors have confirmed that none of them is serving as a director on more than seven listed companies, including this Bank
(excluding the listed subsidiaries of listed holding companies where applicable).

3. All the resident directors of the Bank are registered as taxpayers and none of them have defaulted in payment of any loan to a
banking company, a DFI or an NBFC or, being a broker of the stock exchange, has been declared as a defaulter by that stock
exchange.

4. No casual vacancy occurred on the Board during the year.

5. The Bank has prepared a ÒCode of ConductÓ and has ensured that appropriate steps have been taken to disseminate it throughout
the Bank along with its supporting policies and procedures.

6. The Board has developed a vision/ mission statement, overall corporate strategy and significant policies of the Bank. A complete
record of particulars of significant policies along with the dates on which they were approved or amended has been maintained.

7. All the powers of the Board have been duly exercised and decisions on material transactions, including appointment and determination
of remuneration and terms and conditions of employment of the CEO, other executive and non-executive directors, have been
taken by the Board.

8. The meetings of the Board were presided over by the Chairman and the Board met at least once in every quarter. Written notices
of the Board meetings, along with agenda and working papers, were circulated at least seven days before the meetings. The
minutes of the meetings were appropriately recorded and circulated.

9. The Board remained fully compliant with the provision with regard to their training program. Two directors have received "Certificate
of Director Education" from the Pakistan Institute of Corporate Governance (ÒPICGÓ). One director has also received ÒCertificate
in Company Direction (International)Ó from Institute of Directors, UK. Four directors are exempt from training as mentioned in proviso
to clause 5.19.7 of the Pakistan Stock Exchange Regulations.

9.1 Our directors have also attended various courses/workshops. In the year 2015, three directors have attended a week - long course
on ÒThe Accelerated Certificate in Company DirectionÓ a program of the Institute of Directors, UK arranged in Pakistan by the PICG.
Further during the year under review, three other directors have also participated in a three full days' workshop on ÒCorporate
Governance & Director Duties ExcellenceÓ held in Malaysia.
 75

Statement of Compliance
with the Best Practices of
Code of Corporate Governance
10. The Board has approved appointment of CFO, Company Secretary and Head of Internal Audit, including their remuneration and
terms and conditions of employment. There were no changes in these positions during the year.

11. The directors' report for this year has been prepared in compliance with the requirements of the CCG and fully describes the salient
matters required to be disclosed.

12. The financial statements of the Bank were duly endorsed by the Chief Executive Officer and Chief Financial Officer before approval
of the Board.

13. The directors, Chief Executive Officer and executives do not hold any interest in the shares of the Bank other than that disclosed
in the pattern of shareholding.

14. The Bank has complied with all the corporate and financial reporting requirements of the CCG.

15. The Board has formed an audit committee. It comprises of four members, all are non-executive directors. The Chairman of the
committee is an independent director.

16. The meetings of the audit committee were held once every quarter prior to approval of interim and final results of the Bank and as
required by the CCG. The terms of reference of the committee have been formed and advised to the committee for compliance.

17. The Board has formed an HR Committee. It comprises of four members, of whom three are non-executive directors and one is an
executive director. The Chairman of the committee is also a non-executive director.

18. The Board has set-up an effective internal audit function. The Head of Internal Audit and Audit team are suitably qualified and
experienced for the purpose and are conversant with the policies and procedures of the Bank.

19. The statutory auditors of the Bank have confirmed that they have been given a satisfactory rating under the quality control review
program of the Institute of Chartered Accountants of Pakistan, that they or any of the partners of the firm, their spouses and minor
children do not hold shares of the Bank and that the firm and all its partners are in compliance with International Federation of
Accountants (IFAC) guidelines on Code of Ethics as adopted by the Institute of Chartered Accountants of Pakistan.

20. The statutory auditors or the persons associated with them have not been appointed to provide other services except in accordance
with the listing regulations and the auditors have confirmed that they have observed IFAC guidelines in this regard.

21. The 'closed period', prior to the announcement of interim/final results, and business decisions, which may materially affect the
market price of Bank's securities, was determined and intimated to directors, employees and the stock exchange.

22. Material/price sensitive information has been disseminated among all market participants at once through the stock exchange.

23. During the year, Board has conducted ÒOwn Performance EvaluationÓ as per the CCG requirements and the result of which was
also reviewed by the Board.

24. The Bank has complied with the requirements relating to maintenance of register of persons having access to inside information
by designated senior management officer in a timely manner and maintained proper record including basis for inclusion or exclusion
of names of persons from the said list.

25. We confirm that all other material principles enshrined in the CCG have been fully complied with.

MOHAMMAD AFTAB MANZOOR

President & Chief Executive Officer

Lahore: 15 February 2017

Soneri Bank Limited | Annual Report 2016

AuditorsÕ Review Report to the Members on

Statement of Compliance With the Best
Practices of Code of Corporate Governance

We have reviewed the enclosed Statement of Compliance with the best practices contained in the Code of Corporate Governance (the
Code) prepared by the Board of Directors of Soneri Bank Limited ('the Bank') for the year ended December 31, 2016 to comply with
the requirements of Rule 5.19 of the Pakistan Stock Exchange Regulations issued by the Pakistan Stock Exchange Limited where the
Bank is listed.

The responsibility for compliance with the Code is that of the Board of Directors of the Bank. Our responsibility is to review, to the extent
where such compliance can be objectively verified, whether the Statement of Compliance reflects the status of the Bank's compliance
with the provisions of the Code and report if it does not and to highlight any non-compliance with the requirements of the Code. A review
is limited primarily to inquiries of the Bank's personnel and review of various documents prepared by the Bank to comply with the Code.

As a part of our audit of the financial statements, we are required to obtain an understanding of the accounting and internal control
systems sufficient to plan the audit and develop an effective audit approach. We are not required to consider whether the Board of
Directors' statement on internal control covers all risks and controls or to form an opinion on the effectiveness of such internal controls,
the Bank's corporate governance procedures and risks.

The Code requires the Bank to place before the Audit Committee, and upon recommendation of the Audit Committee, place before the
Board of Directors for their review and approval its related party transactions distinguishing between transactions carried out on terms
equivalent to those that prevail in arm's length transactions and transactions which are not executed at arm's length price and recording
proper justification for using such alternate pricing mechanism. We are only required and have ensured compliance of this requirement
to the extent of the approval of the related party transactions by the Board of Directors upon recommendation of the Audit Committee.
We have not carried out any procedures to determine whether the related party transactions were undertaken at arm's length price or
not.

Based on our review, nothing has come to our attention which causes us to believe that the Statement of Compliance does not appropriately
reflect the Bank's compliance, in all material respects, with the best practices contained in the Code as applicable to the Bank for the
year ended December 31, 2016.

Chartered Accountants
Karachi: February 27, 2017

A. F. FERGUSON & CO., Chartered Accountants, a member firm of the PwC network
State Life Building No. 1-C, I.I. Chundrigar Road, P.O. Box 4716, Karachi-74000, Pakistan
Tel: +92 (21) 32426682-6/32426711-5; Fax: +92(21) 32415007/32427938/32424740; <[Link]/pk>
• KARACHI • LAHORE • ISLAMABAD
 77

AuditorsÕ Report
to the Members

We have audited the annexed statement of financial position of Soneri Bank Limited (the Bank) as at December 31, 2016 and the related
profit and loss account, statement of comprehensive income, cash flow statement and statement of changes in equity together with the
notes forming part thereof (here-in-after referred to as the 'financial statements') for the year then ended, in which are incorporated the
unaudited certified returns from the branches, except for thirty five branches, which have been audited by us and we state that we have
obtained all the information and explanations which, to the best of our knowledge and belief were necessary for the purposes of our audit.

It is the responsibility of the Bank's Management to establish and maintain a system of internal control, and prepare and present the
financial statements in conformity with the approved accounting standards and the requirements of the Banking Companies Ordinance,
1962 (LVII of 1962), and the Companies Ordinance, 1984 (XLVII of 1984). Our responsibility is to express an opinion on these financial
statements based on our audit.

We conducted our audit in accordance with the International Standards on Auditing as applicable in Pakistan. These standards require
that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of any material
misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing accounting policies and significant estimates made by management, as well as, evaluating the overall
presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion and after due verification,
which in the case of loans and advances covered more than sixty percent of the total loans and advances of the Bank, we report that:

(a) in our opinion, proper books of accounts have been kept by the Bank as required by the Companies Ordinance, 1984 (XLVII of
1984), and the returns referred to above received from the branches have been found adequate for the purposes of our audit;

(b) in our opinion:

(i) the statement of financial position and profit and loss account together with the notes thereon have been drawn up in
conformity with the Banking Companies Ordinance, 1962 (LVII of 1962), and the Companies Ordinance, 1984 (XLVII of 1984),
and are in agreement with the books of accounts and are further in accordance with accounting policies consistently applied
except for the change as disclosed in note 3.5 to the financial statements with which we concur;

(ii) the expenditure incurred during the year was for the purpose of the Bank's business; and

(iii) the business conducted, investments made and the expenditure incurred during the year were in accordance with the objects
of the Bank and the transactions of the Bank which have come to our notice have been within the powers of the Bank;

(c) in our opinion and to the best of our information and according to the explanations given to us the statement of financial position,
profit and loss account, statement of comprehensive income, cash flow statement and statement of changes in equity together with
the notes forming part thereof conform with approved accounting standards as applicable in Pakistan, and give the information
required by the Banking Companies Ordinance, 1962 (LVII of 1962), and the Companies Ordinance, 1984 (XLVII of 1984), in the
manner so required and give a true and fair view of the state of the Bank's affairs as at December 31, 2016, and its true balance of
the profit, its comprehensive income, its cash flows and changes in equity for the year then ended; and

(d) in our opinion Zakat deductible at source under the Zakat and Ushr Ordinance, 1980 (XVIII of 1980) was deducted by the Bank and
deposited in the Central Zakat Fund established under section 7 of that Ordinance.

Chartered Accountants
Engagement Partner: Noman Abbas Sheikh
Karachi: February 27, 2017

A. F. FERGUSON & CO., Chartered Accountants, a member firm of the PwC network
State Life Building No. 1-C, I.I. Chundrigar Road, P.O. Box 4716, Karachi-74000, Pakistan
Tel: +92 (21) 32426682-6/32426711-5; Fax: +92(21) 32415007/32427938/32424740; <[Link]/pk>
• KARACHI • LAHORE • ISLAMABAD
Soneri Bank Limited | Annual Report 2016

Statement of
Financial Position
As at 31 December 2016
Note 2016 2015
------------ (Rupees in '000) -----------

ASSETS
Cash and balances with treasury banks 6 18,278,840 16,718,428
Balances with other banks 7 822,689 1,634,544
Lendings to financial and other institutions 8 5,536,577 3,093,938
Investments - net 9 117,883,960 108,846,113
Advances - net 10 125,305,765 112,001,752
Operating fixed assets 11 5,138,424 4,956,732
Deferred tax assets - net 18 - -
Other assets - net 12 5,554,451 6,090,322
278,520,706 253,341,829

LIABILITIES
Bills payable 14 3,254,243 2,706,274
Borrowings 15 38,905,078 39,875,623
Deposits and other accounts 16 210,839,646 185,222,383
Sub-ordinated loans 17 2,998,800 3,000,000
Liabilities against assets subject to finance lease - -
Deferred tax liabilities - net 18 1,137,530 1,417,042
Other liabilities 19 3,096,182 2,928,565
260,231,479 235,149,887

NET ASSETS 18,289,227 18,191,942

REPRESENTED BY
Share capital 20 11,024,636 11,024,636
Reserves 1,423,829 1,049,465
Discount on issue of right shares - (1,001,361)
Unappropriated profit 3,496,305 4,263,217
15,944,770 15,335,957
Surplus on revaluation of assets - net of tax 21 2,344,457 2,855,985

18,289,227 18,191,942
CONTINGENCIES AND COMMITMENTS 22

The annexed notes 1 to 45 and Annexures I, II, III and IV form an integral part of these financial statements.

Alauddin Feerasta Mohammad Aftab Manzoor Manzoor Ahmed Shahid Anwar

Chairman President & Chief Executive Officer Director Director
 79

Profit & Loss

Account
For the year ended 31 December 2016
Note 2016 2015
------------ (Rupees in '000) -----------

Mark-up / return / interest earned 23 17,524,408 18,319,732

Mark-up / return / interest expensed 24 (10,680,270) (10,722,265)
Net mark-up / return / interest income 6,844,138 7,597,467

Provision against loans and advances - net 10.4.1 31,072 1,034,602

Reversal of provision against diminution in the value of investments - net 9.3 (6,941) (9,277)
Bad debts written off directly - net 10.8 276 3,916
24,407 1,029,241
Net mark-up / return / interest income after provisions 6,819,731 6,568,226

Non mark-up / interest income

Fee, commission and brokerage income 1,286,185 1,336,066
Dividend income 192,429 160,253
Income from dealing in foreign currencies - net 25 290,364 472,787
Gain on sale of securities - net 26 945,150 1,126,369
Unrealised loss on revaluation of investments
classified as 'held for trading' - net (6,484) (2,453)
Other income 27 28,593 57,361
Total non-mark-up / interest income 2,736,237 3,150,383
9,555,968 9,718,609
Non mark-up / interest expenses
Administrative expenses 28 6,388,894 5,972,315
Provision against other assets - net 12.1 30 66
Other charges 29 89,705 150,621
Total non-mark-up / interest expenses 6,478,629 6,123,002
3,077,339 3,595,607
Extraordinary / unusual items - -

Profit before taxation 3,077,339 3,595,607

Taxation - Current 30 1,099,377 1,402,494

- Prior years 30 161,371 98,199
- Deferred 30 (62,253) (117,854)
1,198,495 1,382,839

Profit after taxation 1,878,844 2,212,768

(Rupees)

Basic and diluted earnings per share 31 1.7042 2.0071

The annexed notes 1 to 45 and Annexures I, II, III and IV form an integral part of these financial statements.

Alauddin Feerasta Mohammad Aftab Manzoor Manzoor Ahmed Shahid Anwar

Chairman President & Chief Executive Officer Director Director
Soneri Bank Limited | Annual Report 2016

Statement of
Comprehensive Income
For the year ended 31 December 2016
Note 2016 2015
------------ (Rupees in '000) -----------

Profit after taxation for the year 1,878,844 2,212,768

Other comprehensive income:

Item that will not be reclassified to profit and loss account

Components of comprehensive income reflected in equity

- Remeasurements of defined benefit plan (18,537) 5,730
- Tax on remeasurements of defined benefit plan 6,488 (2,006)
(12,049) 3,724
Comprehensive income transferred to equity 1,866,795 2,216,492

Items that may be reclassified subsequently to profit and loss account

Components of comprehensive income not reflected in equity

Net change in value of "available-for-sale" securities (493,705) 151,614
Deferred tax asset / (liability) on changes in value of "available-for-sale" securities 172,797 (112,927)
(i) (320,908) 38,687

Surplus on revaluation of operating fixed assets (ii) - -

Total comprehensive income 1,545,887 2,255,179

(i) Surplus / (deficit) on revaluation of "available-for-sale securities - net of tax" has been shown in the Statement of Comprehensive
Income in order to comply with the revised "Prudential Regulations for Corporate / Commercial Banking" issued by the State Bank
of Pakistan.

(ii) Surplus on revaluation of operating fixed assets-net of tax is presented under separate head below equity as "Surplus / (deficit)
on revaluation of assets" in accordance with the requirements of section 235 of the Companies Ordinance, 1984.

The annexed notes 1 to 45 and Annexures I, II, III and IV form an integral part of these financial statements.

Alauddin Feerasta Mohammad Aftab Manzoor Manzoor Ahmed Shahid Anwar

Chairman President & Chief Executive Officer Director Director
 81

Cash Flow
Statement
For the year ended 31 December 2016
Note 2016 2015
------------ (Rupees in '000) -----------
CASH FLOWS FROM OPERATING ACTIVITIES
Profit before taxation 3,077,339 3,595,607
Less: Dividend income 192,429 160,253
2,884,910 3,435,354
Adjustments:
Depreciation on operating fixed assets 575,700 584,034
Depreciation on ijarah assets 97,969 81,542
Amortisation of intangible assets 89,382 38,322
Operating fixed assets written off directly 24,871 24,870
Reversal of provision for diminution in the value of investments-net (6,941) (9,277)
Unrealised loss on revaluation of investments classified as held-for-trading-net 6,484 2,453
Provision against non-performing loans and advances 31,072 1,034,602
Provision against other assets 30 66
Gain on sale of operating fixed assets (11,565) (12,106)
Gain on sale of non-banking assets (600) -
Bad debts written off directly 276 3,916
806,678 1,748,422
3,691,588 5,183,776
(Increase) / decrease in operating assets
Lendings to financial and other institutions (2,442,639) (2,489,596)
Advances - net (13,433,330) (5,153,607)
Others assets (excluding advance taxation) 1,087,957 110,426
(14,788,012) (7,532,777)
Increase / (decrease) in operating liabilities
Bills payable 547,969 (28,631)
Borrowings (1,102,159) 14,293,729
Deposits and other accounts 25,617,263 21,972,012
Other liabilities 149,080 28,362
25,212,153 36,265,472
14,115,729 33,916,471
Income tax paid (1,831,964) (171,001)
Net cash generated from operating activities 12,283,765 33,745,470

CASH FLOWS FROM INVESTING ACTIVITIES

Net investments in held-for-trading securities 790,865 (51,008)
Net investments in available-for-sale securities (11,740,670) (33,445,762)
Net investments in held-to-maturity securities 1,418,709 524,772
Dividends received 194,129 152,160
Purchase of operating fixed assets (1,004,102) (610,461)
Sale proceeds on disposal of non-banking assets 18,000 -
Sale proceeds on disposal of operating fixed assets 35,526 32,577
Net cash used in investing activities (10,287,543) (33,397,722)

CASH FLOWS FROM FINANCING ACTIVITIES

(Payments) / proceeds from sub-ordinated loans (1,200) 3,000,000
Dividends paid (1,378,079) (1,102,464)
Net cash (used in) / generated from financing activities (1,379,279) 1,897,536

Increase in cash and cash equivalents 616,943 2,245,284

Cash and cash equivalents at the beginning of the year 18,346,786 16,101,502
Cash and cash equivalents at the end of the year 32 18,963,729 18,346,786

The annexed notes 1 to 45 and Annexures I, II, III and IV form an integral part of these financial statements.

Alauddin Feerasta Mohammad Aftab Manzoor Manzoor Ahmed Shahid Anwar

Chairman President & Chief Executive Officer Director Director
Soneri Bank Limited | Annual Report 2016

Statement of
Changes in Equity
For the year ended 31 December 2016
Capital reserves
Unappro-
Share Discount General
Particulars Share Statutory priated Total
capital on issue of reserve
premium reserve (a) profit (b)
shares
------------------------------------------------ (Rupees in '000) ----------------------------------------------

Balance as at 1 January 2015 11,024,636 (1,001,361) 1,405 932,506 - 3,150,185 14,107,371

Profit after taxation for the year - - - - - 2,212,768 2,212,768

Other comprehensive income for the year

- Remeasurements of defined benefit plan - - - - - 5,730 5,730
- Tax on remeasurements of defined benefit plan - - - - - (2,006) (2,006)
- - - - - 3,724 3,724
Transactions with owners recognised directly in equity
Final cash dividend for the year ended
31 December 2014 at Rs.1 per share - - - - - (1,102,464) (1,102,464)
Transfer from statutory reserve to
unappropriated profit - - - (327,000) - 327,000 -
Transfer from surplus on revaluation of fixed
assets to unappropriated profit - net of
tax (note 21.1) - - - - - 114,558 114,558
Transfer from unappropriated profit to statutory
reserve - - - 442,554 - (442,554) -
Balance as at 31 December 2015 11,024,636 (1,001,361) 1,405 1,048,060 - 4,263,217 15,335,957
Discount on issue of shares adjusted against
share premium / unappropriated profit - 1,001,361 (1,405) - - (999,956) -

Profit after taxation for the year - - - - - 1,878,844 1,878,844

Other comprehensive income for the year

- Remeasurements of defined benefit plan - - - - - (18,537) (18,537)
- Tax on remeasurements of defined benefit plan - - - - - 6,488 6,488
- - - - - (12,049) (12,049)

Transactions with owners recognised directly in equity

Final cash dividend for the year ended

31 December 2015 at Rs 1.25 per share - - - - - (1,378,079) (1,378,079)

Transfer from surplus on revaluation of fixed

assets to unappropriated profit - net of
tax (note 21.1) - - - - - 120,097 120,097

Transfer from unappropriated profit to statutory

reserve - - - 375,769 - (375,769) -

Balance as at 31 December 2016 11,024,636 - - 1,423,829 - 3,496,305 15,944,770

(a) This represents reserve created under section 21(i)(a) of the Banking Companies Ordinance, 1962.
(b) As explained in note 10.5 to these financial statements, unappropriated profit includes an amount of Rs. 716.711 million net of tax as at 31 December 2016
(31 December 2015: Rs. 972.681 million) representing additional profit arising from availing forced sales value benefit for determining provisioning requirement
which is not available for distribution either as cash or stock dividend to shareholders and bonus to employees.

The annexed notes 1 to 45 and Annexures I, II, III and IV form an integral part of these financial statements.

Alauddin Feerasta Mohammad Aftab Manzoor Manzoor Ahmed Shahid Anwar

Chairman President & Chief Executive Officer Director Director
 83

Notes to and Forming Part

of the Financial Statements
For the year ended 31 December 2016
1. STATUS AND NATURE OF BUSINESS

Soneri Bank Limited ("the Bank") was incorporated in Pakistan on 28 September 1991 as a public limited company under the
Companies Ordinance, 1984. Its registered office is situated at Rupali House 241-242, Upper Mall Scheme, Anand Road, Lahore,
Punjab and its shares are quoted on Pakistan Stock Exchange Limited. The Bank is engaged in banking services as described
in the Banking Companies Ordinance, 1962 and operates with 288 branches including 16 Islamic banking branches (2015: 266
branches including 16 Islamic banking branches) in Pakistan.

Based on the financial statements of the Bank for the year ended 31 December 2015, the Pakistan Credit Rating Agency Limited
(PACRA) has maintained the Bank's long-term rating as AA- (31 December 2014: AA-) and short-term rating as A1+ (31 December
2014: A1+).

2. BASIS OF PRESENTATION

2.1 In accordance with the directives of the Federal Government regarding the shifting of the banking system to Islamic modes,
the State Bank of Pakistan has issued various circulars from time to time. Permissible forms of trade-related modes of financing
include purchase of goods by banks from their customers and immediate resale to them at appropriate mark-up in price on
deferred payment basis. The purchases and sales arising under these arrangements are not reflected in these financial statements
as such but are restricted to the amount of facility actually utilised and appropriate portion of mark-up thereon.

2.2 The financial results of the Islamic banking branches of the Bank have been consolidated in these financial statements for
reporting purposes, after eliminating material intra branch transactions / balances. The financial results of the Islamic banking
branches are disclosed in Annexure II to these financial statements.

3. STATEMENT OF COMPLIANCE

3.1 These financial statements have been prepared in accordance with the approved accounting standards as applicable in Pakistan.
The approved accounting standards comprise of such International Financial Reporting Standards (IFRSs) issued by the
International Accounting Standards Board and Islamic Financial Accounting Standards (IFASs) issued by the Institute of Chartered
Accountants of Pakistan, as are notified under the Companies Ordinance, 1984, provisions of and the directives issued under
the Companies Ordinance, 1984, the Banking Companies Ordinance, 1962, and the directives issued by the SECP and the
SBP. Wherever the requirements of provisions and directives issued under the Companies Ordinance, 1984, the Banking
Companies Ordinance, 1962, the IFASs notified under the Companies Ordinances, 1984 and the directives issued by the SECP
and the SBP differ from the requirements of the IFRSs, the provisions and directives issued under the Companies Ordinance,
1984, the Banking Companies Ordinance, 1962, IFASs notified under the Companies Ordinance, 1984 and the directives issued
by the SECP and the SBP prevail.

3.2 The State Bank of Pakistan has deferred the applicability of International Accounting Standard (IAS) 39, 'Financial Instruments:
Recognition and Measurement' and International Accounting Standard (IAS) 40, 'Investment Property' for Banking Companies
through BSD Circular No. 10 dated 26 August 2002 till further instructions. In addition, the Securities and Exchange Commission
of Pakistan has deferred the applicability of International Financial Reporting Standard 7, Financial Instruments: Disclosures
(IFRS 7) vide SRO 411(I) / 2008 dated 28 April 2008 till further orders. Accordingly, the requirements of these standards have
not been considered in the preparation of these financial statements. However, investments and non-banking assets have been
classified and valued in accordance with the requirements prescribed by the State Bank of Pakistan through various circulars.

3.3 The SBP vide its BSD Circular No. 07 dated 20 April 2010 has clarified that for the purpose of preparation of financial statements
in accordance with International Accounting Standard - 1 (Revised), 'Presentation of Financial Statements', two statement
approach shall be adopted i.e. separate 'Profit and Loss Account' and 'Statement of Comprehensive Income' shall be presented,
and Balance Sheet shall be renamed as 'Statement of Financial Position'. Furthermore, the surplus / deficit on revaluation of
available for sale (AFS) securities shall be included in the 'Statement of Comprehensive Income'. However, it should continue
to be shown separately in the Statement of Financial Position below equity. Accordingly, the above requirements have been
adopted in the preparation of these financial statements.

3.4 The SBP vide its BPRD Circular No. 04 dated 25 February 2015 has clarified that the reporting requirements of IFAS-3 for Islamic
Banking Institutions (IBIs) relating to annual, half yearly and quarterly financial statements would be notified by SBP through
issuance of specific instructions and uniform disclosure formats in consultation with IBIs. These reporting requirements have
not been ratified to date. Accordingly, the disclosures requirements under IFAS 3 have not been considered in these financial
statements.
Soneri Bank Limited | Annual Report 2016

3.5 Change in accounting policy

The Bank has changed its accounting policy effective from 1 January 2016 for recording of non-banking assets acquired in
satisfaction of claims to comply with the requirements of the 'Regulations for Debt Property Swap' (the regulations) issued by
SBP vide its BPRD Circular No. 1 of 2016, dated: 1 January 2016. In line with the guidance provided in the Regulations, the
non banking assets acquired in satisfaction of claims are required to be carried at revalued amounts less accumulated depreciation
and accumulated impairment losses, if any. These assets are to be revalued by professionally qualified valuers with sufficient
regularity to ensure their net carrying value does not differ materially from their fair value. A surplus arising on revaluation of
non-banking assets acquired in satisfaction of claims is required to be credited to the 'surplus on revaluation of assets' account
appearing on the Statement of Financial Position below equity. Any deficit arising on revaluation is first set off against the surplus
account for that non-banking asset, if any, or if no surplus exists, is charged to the profit and loss account directly. Legal fees,
transfer cost and direct cost of acquiring title to property is charged to the profit and loss account. Previously, non-banking
assets acquired in satisfaction of claims were carried at cost (including legal fees, transfer costs and direct cost) less accumulated
impairment, if any.

The above change in accounting policy does not have any impact on these financial statements.

3.6 Standards, interpretations and amendments to published approved accounting standards that are effective in the current year

3.6.1 There are certain new and amended standards and interpretations that are mandatory for the Bank's accounting periods
beginning on or after 01 January 2016 but are considered not to be relevant or do not have any significant effect on the Bank's
operations and are, therefore, not disclosed in these financial statements.

3.7 Standards, interpretations and amendments to published approved accounting standards that are not yet effective:

3.7.1 The following revised standards, amendments and interpretations with respect to the approved accounting standards would
be effective from the dates mentioned below against the respective standard, amendments or interpretation:

Standard, Interpretations or Amendments Effective date (accounting

periods beginning on or after)

- IFRS 9 - Financial instruments 01 January 2018

- IFRS 15 - Revenue from contracts 01 January 2018
- IFRS 16 - Leases 01 January 2019

The management is in the process of assessing the impact of these standards on the financial statements of the Bank.

3.7.2 There are certain new and amended standards and interpretations that are mandatory for the Bank's accounting periods
beginning on or after 01 January 2017 but are considered not to be relevant or will not have any significant effect on the Bank's
operations and are therefore not detailed in these financial statements.

4. BASIS OF MEASUREMENT

4.1 Accounting convention

These financial statements have been prepared under the historical cost convention, except that certain fixed assets are stated
at revalued amounts, certain investments and commitments in respect of forward exchange contracts have been marked to
market and are carried at fair values and staff retirement benefits are carried at present value.

4.2 Functional and presentation currency

Items included in the financial statements are measured using the currency of the primary economic environment in which the
Bank operates. These financial statements are presented in Pakistani Rupee which is the Bank's functional and presentation
currency.

4.3 Critical accounting estimates and judgements

The preparation of the financial statements in conformity with the approved accounting standards as applicable in Pakistan
requires the management to make judgements, estimates and assumptions that affect the reported amounts of assets and
liabilities and income and expenses. It also requires management to exercise judgement in application of its accounting policies.
The estimates and associated assumptions are based on historical experience and various other factors that are believed to
be reasonable under the circumstances. These estimates and assumptions are reviewed on an ongoing basis. Revisions to
accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in
the period of revision and future periods if the revision affects both current and future periods.
 85

4.4 Significant accounting estimates and areas where judgements were made by the management in the application of
accounting policies are as follows:

i) classification and provisioning against investments (notes 5.3 and 9);

ii) classification and provisioning against loans and advances (notes 5.4 and 10);
iii) current and deferred taxation (notes 5.7, 18, 22.9.1, 22.9.3 and 30);
iv) accounting for defined benefit plan (notes 5.9 and 34);
v) depreciation, amortisation methods, useful lives and revaluation of operating fixed assets (notes 5.5 and 11); and
vi) impairment of assets (note 5.6).

5. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The significant accounting policies applied in the preparation of these financial statements are set out below. These policies
have been consistently applied to all the years presented except for the change in accounting policy as disclosed in note 3.5
to these financial statements.

5.1 Cash and cash equivalents

Cash and cash equivalents for the purpose of cash flow statement represent cash in hand and balances with treasury banks,
balances with other banks in current and deposit accounts, national prize bonds, if any, and overdrawn nostro accounts.

5.2 Lendings to / borrowings from financial and other institutions

The Bank enters into repurchase agreements (repo) and reverse repurchase agreements (reverse repo) at contracted rates
for a specified period of time. These are recorded as under:

(a) Sale of securities under repurchase agreements

Securities sold subject to a repurchase agreement (repo) are retained in the financial statements as investments and the counter
party liability is included in borrowings. The differential in sale and repurchase value is accrued over the period of the contract
and recorded as an expense.

(b) Purchase of securities under resale agreements

Securities purchased under agreement to resell (reverse repo) are included in lendings to financial and other institutions. The
underlying security is not recognised as a separate asset in the financial statements. The difference between the contracted
price and resale price is amortised over the period of the contract and recorded as income.

(c) Lending under margin trading system

Securities purchased under margin financing are recorded as "lendings to financial and other institutions" at the fair value of
the consideration given. All margin financing transactions are accounted for on the transaction date. Income on margin financing
is accrued over the period of the contract.

(d) Borrowings

These are recorded at the proceeds received. Mark-up on such borrowings is charged on a time proportion basis to the profit
and loss account over the period of borrowings.

(e) Bai Muajjal

Bai Muajjal transactions with the SBP and other financial institutions are classified under lendings. In Bai Muajjal, the Bank sells
shariah compliant instruments on credit to customers. The credit price is agreed at the time of sale and such proceeds are
received at the end of the credit period. The difference between the sale and the credit price is recognised over the credit period
and recorded as income.

5.3 Investments

The Bank classifies its investments as follows:

(a) Held for trading

These represent securities, which are either acquired for the purpose of generating profit from short-term fluctuations in market
prices, interest rates or dealerÕs margin or are securities included in the portfolio in which a pattern of short-term profit making exists.
Soneri Bank Limited | Annual Report 2016

(b) Held to maturity

These are securities with fixed or determinable payments and maturity, which the Bank has the positive intent and ability to hold
till maturity.

(c) Available for sale

These are investments, other than those in subsidiaries and associates, if any, that do not fall under the held for trading or held
to maturity categories.

Investments other than those categorised as held for trading are initially recognised at fair value which includes transaction
costs associated with the investment. Investments classified as held for trading are initially recognised at fair value, and transaction
costs are expensed in the profit and loss account.

All purchases and sales of investments that require delivery within the time frame established by regulations or market conventions
are recognised at the trade date. Trade date is the date on which the Bank commits to purchase or sell the investment.

Premium or discount on acquisition of investments is amortised through the profit and loss account over the remaining period
till maturity using effective interest method.

In accordance with the requirements of the State Bank of Pakistan, quoted securities, other than those classified as 'held to
maturity', are subsequently remeasured at market values. Surplus / (deficit) arising on revaluation of quoted securities classified
as 'available for sale', is taken to a separate account shown in the Statement of Financial Position below equity. Surplus / (deficit)
arising on revaluation of quoted securities which are classified as 'held for trading', is taken to the profit and loss account. Cost
of investment is determined on a weighted average basis.

In accordance with the BSD circular No. 14 dated 24 September 2004 issued by the State Bank of Pakistan, investments
classified as 'held to maturity' are carried at amortised cost less impairment, if any.

Unquoted equity securities, excluding investments in subsidiaries and associates, if any are valued at the lower of cost and
break-up value. Break-up value of unquoted equity securities is calculated with reference to the net assets of the investee
company as per the latest available audited financial statements.

Impairment loss in respect of investments categorised as available for sale (except term finance certificates) and held to maturity
is recognised based on management's assessment of objective evidence of impairment as a result of one or more events that
may have an impact on the estimated future cash flows of the investments. A significant or prolonged decline in the fair value
of a listed equity investment below its cost is also considered an objective evidence of impairment. Provision for diminution in
the value of term finance certificates is made as per the requirements of the Prudential Regulations issued by the SBP. In case
of impairment of available for sale securities, the cumulative loss that has been recognised directly in surplus / deficit on
revaluation of securities on the statement of financial position below equity is removed therefrom and recognised in the profit
and loss account. For investments classified as held to maturity, the impairment loss is recognised in the profit and loss account.

Gain / loss on sale of investments is credited / charged to the profit and loss account.

5.4 Advances

Advances are stated net of specific and general provisions. Specific provision for advances are made in accordance with the
requirements of the Prudential Regulations and other directives issued by the SBP and charged to the profit and loss account.
General provision against consumer and small enterprises financings portfolio is maintained as per the requirements of the
Prudential Regulations issued by the State Bank of Pakistan. Advances are written off when there is no realistic prospect of
recovery. In addition to conventional products, the Bank also offers various Islamic financing products which among others
include:

Murabaha
Murabaha financings are reflected as receivables at the invoiced amount. Actual sales and purchases are not reflected, as the
goods are purchased by the customer as an agent of the Bank and all documents relating to purchase are in the customer's
name. However, the profit on that sale revenue not due for payment is deferred and is recognised on a time proportion basis.
Funds disbursed under Murabaha financing arrangements for purchase of goods are recorded as "Advance Against Murabaha"
in advances.
 87

Salam
Salam financings are reflected as receivables at the invoiced amount. Profit not due for payment is deferred and is recognised
on a time proportion basis. Funds disbursed under Salam financing arrangements for purchase of goods are recorded as
"Advance Against Salam" in advances.

Diminishing Musharaka
In Diminishing Musharaka based financing, the Bank enters into a Musharaka based on Shirkat-ul-milk for financing an agreed
share of fixed asset (e.g. house, land, plant or machinery) with its customers and enters into periodic profit payment agreement
for the utilization of the Bank's Musharaka share by the customer.

Ijarah assets
Ijarah assets are stated at cost less accumulated depreciation and impairment losses, if any. Depreciation is charged from the
date of recognition of ijarah assets on a straight line basis over the period of Ijarah. Impairment of Ijarah assets is determined
on the same basis as that of operating fixed assets.

Ijarah income is recognised in income on an accrual basis as and when the rental becomes due. Impairment of Ijarah rental is
determined in accordance with the requirements of the Prudential Regulations and other directives issued by the SBP and
charged to the profit and loss account.

5.5 Operating fixed assets and depreciation

(a) Tangible assets - owned

Operating fixed assets (other than land and buildings) are stated at cost less accumulated depreciation and impairment losses,
if any. Buildings are carried at revalued amount less any accumulated depreciation and subsequent impairment losses, if any.
Land is carried at revalued amount less subsequent impairment losses, if any.

Depreciation on all operating fixed assets (excluding land which is not depreciated) is charged using the straight line method
in accordance with the rates specified in note 11.1 to the financial statements after taking into account residual values, if any.
The residual values and useful lives are reviewed and adjusted, if appropriate, at each reporting date. Depreciation on additions
is charged from the month the assets are available for use while in the case of assets disposed of, it is charged upto the date
of disposal.

Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when it
is probable that future economic benefits associated with the item will flow to the Bank and the cost of the item can be measured
reliably. All other repair and maintenance expenditure are charged to the profit and loss account as and when incurred.

Lands and buildings are revalued by professionally qualified valuers with sufficient regularity to ensure that the net carrying
amount does not differ materially from their fair value.

Surplus arising on revaluation is credited to the surplus on revaluation of fixed assets account. Deficit arising on subsequent
revaluation of fixed assets is adjusted against the balance in the above mentioned surplus account as allowed under the
provisions of the Companies Ordinance, 1984. The surplus on revaluation of fixed assets to the extent of incremental depreciation
charged on the related assets is transferred to unappropriated profit.

An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying amount is greater than
its estimated recoverable amount.

Gains and losses on disposal of fixed assets are charged / credited to the profit and loss account currently, except that the
related surplus on revaluation of fixed assets (net of deferred taxation) is transferred directly to unappropriated profit.

(b) Tangible assets - leased

Leases are classified as finance lease wherever the terms of the lease transfer substantially all the risks and rewards of ownership
to the lessee. All other leases are classified as operating lease. Lease payments, if any, under operating lease are charged to
income on a straight line basis over the lease term.

Assets held under finance lease, if any, are stated at lower of fair value or present value of minimum lease payments at inception
less accumulated depreciation. The outstanding obligations under the lease agreements are shown as a liability net of finance
charges allocable to future periods.

The finance charges are allocated to accounting periods in a manner so as to provide a constant periodic rate of return on the
outstanding liability.
Soneri Bank Limited | Annual Report 2016

Depreciation on assets held under finance lease is charged in a manner consistent with that for depreciable assets which are
owned by the Bank.

(c) Intangible assets

Intangible assets having a definite useful lives are stated at cost less accumulated amortisation and impairment losses, if any.
Intangible assets are amortised from the month, when these assets are available for use, using the straight line method, whereby
the cost of the intangible asset is amortised on the basis of the estimated useful life over which economic benefits are expected
to flow to the Bank. The residual values, useful lives and amortisation method is reviewed and adjusted, if appropriate, at each
reporting date.

Subsequent costs are included in the assetÕs carrying amounts or recognised as a separate asset, as appropriate, only when
it is probable that future economic benefits associated with the item will flow to the Bank and the cost of the item can be measured
reliably.

Intangible assets having an indefinite useful life are stated at acquisition cost less accumulated impairment losses, if any.

Gains and losses on disposals, if any, are taken to the profit and loss account in the period in which they arise.

(d) Capital work in progress

Capital work-in-progress is stated at cost less accumulated impairment losses, if any. All expenditure connected with specific
assets incurred during installation and construction / development period are carried under this head. These are transferred
to specific assets as and when assets become available for use.

5.6 Impairment

The carrying amount of assets is reviewed at each reporting date to determine whether there is any indication of impairment
of any asset or group of assets. If any such indication exists, the recoverable amount of such assets is estimated and impairment
losses are recognised immediately in the financial statements. The resulting impairment loss is taken to the profit and loss
account except for impairment loss on revalued assets, which is adjusted against related revaluation surplus to the extent that
the impairment loss does not exceed the surplus on revaluation of that asset.

An impairment loss is reversed (except for impairment loss relating to goodwill), if there has been a change in the estimate used
to determine the recoverable amount. Such reversals are only made to the extent that the assetÕs carrying amount does not
exceed the amount that would have been determined if no impairment loss had been recognised.

5.7 Taxation

Income tax expense comprises current and deferred tax. Income tax expense is recognised in the profit and loss account except
to the extent that it relates to items recognised directly in equity or below equity, in which case it is recognised in equity or below
equity.

Current

Provision for current taxation is based on the taxable income at the current rates of taxation after taking into account available
tax credit and rebates. The charge for current tax also includes adjustments, where considered necessary relating to prior years,
which arises from assessments / developments made during the year.

Deferred

Deferred tax is recognised using the balance sheet liability method on all temporary differences between the carrying amounts
of assets and liabilities used for financial reporting purposes and amounts used for 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.
 89

The Bank also recognises deferred tax asset / liability on deficit / surplus on revaluation of 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'.

5.8 Provisions and contingent assets and liabilities

Provisions are recognised when the Bank has a legal or constructive obligation as a result of past events, it is probable that
an outflow of resources will be required to settle the obligation and a reliable estimate of the amount can be made. Provisions
are reviewed at each reporting date and are adjusted to reflect the current best estimate.

Contingent assets are not recognised and are also not disclosed unless an inflow of economic benefits is probable. Contingent
liabilities are not recognised but disclosed unless the probability of an outflow of resources embodying economic benefits are
remote.

5.9 Staff retirement benefits

Defined benefit plan

The Bank operates an approved funded gratuity scheme for its permanent employees. The liability recognised in the statement
of financial position in respect of defined benefit gratuity scheme, is the present value of the defined benefit obligation at the
statement of financial position date less the fair value of plan assets. Contributions to the fund are made on the basis of actuarial
recommendations using the Projected Unit Credit Method. Valuations are conducted by an independent actuary with the last
valuation conducted on 31 December 2016.

Amounts arising as a result of "remeasurements", representing the actuarial gains and losses and the difference between the
actual investment returns and the return implied by the net interest cost are recognised in the Statement of Financial Position
immediately, with a charge or credit to "Other Comprehensive Income" in the periods in which they occur.

Gratuity is payable to staff on completion of the prescribed qualifying period of service under the scheme.

Defined contribution plan

The Bank operates an approved funded provident fund scheme for all its permanent employees. Equal monthly contributions
are made, both by the Bank and its employees, to the Fund at the rate of 8.33% of basic salaries of the employees.

5.10 Borrowings / deposits and their cost

Borrowings / deposits are recorded at the proceeds received. Borrowing / deposit costs are recognised as an expense in the
period in which these are incurred to the extent that they are not directly attributable to the acquisition of or construction of
qualifying assets. Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset
(one that takes a substantial period of time to get ready for use or sale) are capitalised as part of the cost of the asset.

5.11 Sub-ordinated loans

Sub-ordinated loans are initially recorded at the amount of proceeds received. Mark-up on sub-ordinated loans is charged to
the profit and loss account over the period on an accrual basis and is recognised separately as part of other liabilities.

5.12 Revenue recognition

- Mark-up income / interest on advances and return on investments are recognised on a time proportion basis using the
effective yield on the arrangement / instrument except that mark-up / return on non-performing advances and investments
is recognised on receipt basis. Interest / return / mark-up on rescheduled / restructured advances and investments is
recognised as permitted by the State Bank of Pakistan except where, in the opinion of the management, it would not be
prudent to do so.

- Fee, commission and brokerage income is recognised upon performance of services.

- Dividend income from investments is recognised when the Bank's right to receive the dividend is established.

- Premium or discount on acquisition of investments is amortised using effective yield method and taken to profit and loss
account.
Soneri Bank Limited | Annual Report 2016

- Gains and losses on disposal of investments and operating fixed assets are dealt with through the profit and loss account
in the year in which they arise.

- Profits on Bai Muajjal lendings are recognised on straight line basis.

5.13 Foreign currencies

(a) Foreign currency transactions

Foreign currency transactions are translated into rupees at the exchange rates prevailing on the date of the transaction. Monetary
assets and liabilities in the foreign currencies are expressed in rupee terms at the exchange rates ruling on the reporting date.
Outstanding forward foreign exchange contracts and foreign bills purchased are valued at the forward rates applicable to the
respective maturities. Exchange gains and losses are included in the profit and loss account.

(b) Translation gains and losses

Translation gains and losses are included in the profit and loss account.

5.14 Commitments

Commitments for outstanding forward foreign exchange contracts are disclosed in the financial statements at the contracted
rates. Contingent liabilities / commitments for letters of credit and letters of guarantee denominated in foreign currencies are
expressed in rupee terms at the rates of exchange ruling on the reporting date.

5.15 Provision for guarantee claims and other off balance sheet obligations

Provision for guarantee claims and other off-balance sheet obligations are recognised when intimated and where reasonable
certainty exists for the Bank to settle the obligation. Charge to profit and loss account is stated net of expected recoveries.

5.16 Acceptances

Acceptances comprise undertakings by the Bank to pay bills of exchange drawn on customers. The Bank expects most
acceptances to be simultaneously settled with the reimbursement from the customers. Acceptances are accounted for as off-
balance sheet transactions and are disclosed under "Contingencies and Commitments".

5.17 Financial instruments

5.17.1 Financial assets and liabilities

Financial instruments carried on the balance sheet include cash and balances with treasury banks, balances with other banks,
lendings to financial and other institutions, investments, advances, certain receivables, bills payable, borrowings from financial
institutions, deposits and other accounts, sub-ordinated loans and other payables. The particular recognition methods adopted
for significant financial assets and financial liabilities are disclosed in the individual policy statements associated with them.

5.17.2 Derivative financial instruments

Derivative financial instruments, if any, are initially recognised at fair value on the date on which a derivative contract is entered
into and are, subsequently, remeasured at fair value using appropriate valuation techniques. All derivative financial instruments
are carried as assets when fair value is positive and liability when fair value is negative. Any change in the fair value of derivative
financial instruments is taken to the profit and loss account.

5.17.3 Off-setting

Financial assets and financial liabilities are off-set and the net amount is reported in the financial statements when there exists
a legally enforceable right to set-off and the Bank intends either to settle on a net basis or to realise the assets and to settle
the liabilities simultaneously. Income and expense items of such assets and liabilities are also off-set and the net amount is
reported in the financial statements.

5.18 Basic and diluted earnings per share

The Bank presents basic and diluted earnings per share (EPS) for its shareholders. Basic EPS is calculated by dividing the profit
or loss attributable to ordinary shareholders of the Bank by the weighted average number of ordinary shares outstanding during
the year. Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average
number of ordinary shares outstanding for the effects of all dilutive potential ordinary shares, if any.
 91

5.19 Dividend and appropriation to reserves

Dividend and appropriation to reserves after the reporting date, except appropriations which are required by law are recognised
as liability in the Bank's financial statements in the year in which these are approved.

5.20 Segment reporting

A segment is a distinguishable component of the Bank that is engaged either in providing product or services (business segment),
or in providing products or services within a particular economic environment (geographical segment), which is subject to risks
and rewards that are different from those of other segments. Segments are reported as per the Bank's functional structure and
are as follows:

(a) Business segments

(i) Corporate finance

Corporate banking includes financing and services provided to corporate customers including services in connection
with mergers and acquisitions, underwriting, privatisation, securitisation, syndication, Initial Public Offers (IPOs), etc.
It also includes deposits mobilized from Corporate branches.

(ii) Trading and sales

It includes fixed income, equity, foreign exchanges, lendings and repos.

(iii) Retail banking

It includes all retail related lendings and banking services (including staff, consumer and SME financing) as well as
deposits mobilized from Retail branches.

(b) Geographical segment

The operations of the Bank are currently based only in Pakistan. Therefore, geographical segment is not relevant.

Note 2016 2015

(Rupees in '000)

6. CASH AND BALANCES WITH TREASURY BANKS

In hand
Local currency 6.1 3,818,859 3,599,650
Foreign currencies 976,734 1,048,364

In transit
Local currency - -
Foreign currency - 91,544

With State Bank of Pakistan in

Local currency current accounts 6.2 9,225,205 8,529,943
Foreign currency current accounts 6.3 697,883 534,809
Foreign currency deposit accounts against foreign
currency deposits mobilised 6.4 2,000,422 1,530,053

With National Bank of Pakistan in

Local currency current accounts 1,559,737 1,384,065
18,278,840 16,718,428
Soneri Bank Limited | Annual Report 2016

6.1 This includes National Prize Bonds of Rs. 4.047 million (2015: Rs. 5.226 million).

6.2 The local currency current accounts are maintained with the State Bank of Pakistan (SBP) as per the requirements of Section
36 of the State Bank of Pakistan Act, 1956. This section requires banking companies to maintain a local currency cash reserve
in current accounts opened with the SBP at a sum not less than such percentage of its time and demand liabilities as may be
prescribed by the SBP.

6.3 This represents cash reserve account maintained with SBP at an amount equivalent to at least 5% of the Bank's foreign currency
deposits mobilised under FE-25 scheme and carry Nil return (2015: Nil return).

6.4 These represent special cash reserve maintained with SBP at an amount equivalent to atleast 15% of the Bank's foreign currency
deposits mobilised under FE-25 scheme and 6% special cash reserve requirement on FE-25 deposits maintained by Islamic
banking branches. These carry Nil return (2015: Nil return).

Note 2016 2015

(Rupees in '000)

7. BALANCES WITH OTHER BANKS

In Pakistan
In current accounts 32,110 31,474
In deposit accounts 141,130 182,555

Outside Pakistan
In current accounts 7.1 649,449 1,420,515
822,689 1,634,544

7.1 This includes Rs 636.305 million (2015: Rs 1,297.630 million) eligible for Automated Investment Plans. This balance is current
in nature. However, if increased over a specified amount, it entitles the Bank to earn interest income from the correspondent
banks at agreed upon rates.
Note 2016 2015
(Rupees in '000)

8. LENDINGS TO FINANCIAL AND OTHER INSTITUTIONS

Call money lending 8.2 2,500,000 1,800,000

Margin Trading System - 69,557
Letter of placement 8.3 300,000 700,000
Foreign currency placement 8.4 1,045,985 -
Bai Muajjal 8.5 1,690,592 524,381
5,536,577 3,093,938

8.1 Particulars of lendings

In local currency 4,490,592 3,093,938

In foreign currencies 1,045,985 -
5,536,577 3,093,938

8.2 This represents lending to a commercial bank which carries mark-up at the rate of 6.25% per annum (2015: 6.50%) and is due
to mature on 03 January 2017.

8.3 This represents lending to a financial institution which carries mark-up at the rate of 6.30% per annum (2015: 7.00%) and is due
to mature on 10 February 2017.

8.4 This represents lending to a overseas branch of a commercial bank which carries interest at the rate of 2.15% per annum (2015:
Nil) and is due to mature on 22 May 2017.

8.5 These carry mark-up at rates ranging between 5.90% to 7.04% per annum (2015: 5.99% to 6.00%) and are due to mature latest
by 20 March 2017.
 93

9. INVESTMENTS - NET

9.1 Investments by types

2016 2015
Note Held by Given as Held by Given as
Total Total
bank collateral bank collateral

----------------------------------------- (Rupees in '000) -----------------------------------------

Held-for-trading securities

Fully paid-up ordinary shares - - - 55,106 - 55,106

Pakistan Investment Bonds - - - 310,721 - 310,721
Market Treasury Bills - - - - - -
Government of Pakistan -Ijarah Sukuks - - - 400,000 - 400,000
Term Finance Certificates - - - 25,038 - 25,038
- - - 790,865 - 790,865
Available-for-sale securities

Market Treasury Bills 37,857,303 6,304,140 44,161,443 37,466,249 609,762 38,076,011

Pakistan Investment Bonds 41,508,591 20,537,270 62,045,861 35,983,103 22,914,274 58,897,377
Government of Pakistan-
Ijarah Sukuks 2,118,675 - 2,118,675 1,600,000 - 1,600,000
Bai Muajjal with Government of Pakistan - - - 212,306 - 212,306
Term Finance Certificates and Sukuks 2,503,559 - 2,503,559 704,001 - 704,001
Fully paid-up ordinary shares 2,988,906 - 2,988,906 2,471,373 - 2,471,373
Units of mutual funds 200,000 - 200,000 321,383 - 321,383
87,177,034 26,841,410 114,018,444 78,758,415 23,524,036 102,282,451

Held-to-maturity securities

Pakistan Investment Bonds 259,643 - 259,643 261,521 - 261,521

Government of Pakistan
Ijarah Sukuks - - - 1,300,000 - 1,300,000
Term Finance Certificates, Bonds
and Sukuks 1,538,879 - 1,538,879 1,655,710 - 1,655,710
1,798,522 - 1,798,522 3,217,231 - 3,217,231

Investments at cost 88,975,556 26,841,410 115,816,966 82,766,511 23,524,036 106,290,547

Less: Provision for diminution

in the value of investments 9.3 (114,284) - (114,284) (125,900) - (125,900)

Investments (net of provision) 88,861,272 26,841,410 115,702,682 82,640,611 23,524,036 106,164,647

Net surplus on revaluation

of held-for-trading securities 9.13 - - - 6,483 - 6,483

Net surplus on revaluation

of available-for-sale securities 21.2 2,109,200 72,078 2,181,278 1,998,687 676,296 2,674,983

Total investments 90,970,472 26,913,488 117,883,960 84,645,781 24,200,332 108,846,113

Soneri Bank Limited | Annual Report 2016

Note 2016 2015

(Rupees in '000)

9.2 Investments by segments

Federal Government Securities

- Market Treasury Bills 9.5 44,161,443 38,076,011
- Pakistan Investment Bonds 9.5 62,305,504 59,469,619
- Government of Pakistan Ijarah Sukuks 2,118,675 3,300,000
- Government of Pakistan Bai Muajjal - 212,306
108,585,622 101,057,936
Fully paid-up ordinary shares of Rs. 10 each

Listed companies
- Agritech Limited [851,560 (2015: 729,679) shares] 29,805 25,539
- Altern Energy Limited [2,100,000 (2015: 2,000,000) shares] 77,142 73,316
- Bank AL Habib Limited [2,000,000 (2015: 1,727,000) shares] 85,731 72,756
- Bank Alfalah Limited [4,000,000 (2015: 5,500,000) shares] 113,993 157,072
- D.G. Khan Cement Company Limited [Nil (2015: 1,000,000) shares] - 136,818
- Engro Corporation Limited [1,400,000 (2015: 1,370,000) shares] 420,426 359,076
- Engro Fertilizers Limited [3,649,500 (2015: 900,000) shares] 265,233 83,786
- Fauji Fertilizer Bin Qasim Limited [ 2,210,500 (2015: Nil) shares] 120,017 -
- Fauji Fertilizer Company Limited [Nil (2015: 200,000) shares] - 24,670
- Faysal Bank Limited [Nil (2015: 3,000,000) shares] - 52,042
- Habib Bank Limited [590,100 (2015: Nil) shares] 129,117 -
- Habib Metropolitan Bank Limited [Nil (2015: 3,500,000) shares] - 104,990
- Fatima Fertilizer Company Limited [5,000,000 (2015: Nil) shares] 160,180 -
- Dawood Lawrancepur Limited [257,500 (2015:Nil) shares] 48,971 -
- Allied Bank Limited [534,500 (2015: Nil) shares] 53,190 -
- NIB Bank Limited [2,758,000 (2015: Nil) shares] 4,615 -
- Lucky Cement Limited [Nil (2015: 260,000) shares] - 144,006
- MCB - Arif Habib Savings and Investments Limited [Nil
(2015: 535,000) shares] - 12,224
- MCB Bank Limited [1,080,300 (2015: 780,000) shares] 250,219 198,156
- Nishat Chunian Limited [2,150,000 (2015: Nil) shares] 86,278 -
- Nishat Mills Limited [3,300,000 (2015: 3,000,000) shares] 361,864 317,576
- Oil and Gas Development Company Limited [2,300,000 (2015: 900,000) shares] 324,727 129,089
- Pakistan International Bulk Terminal Limited [1,000,000 (2015: Nil) shares] 32,800 -
- Pakistan Petroleum Limited [Nil (2015: 350,000) shares] - 47,743
- Pakistan State Oil Company Limited [1,100,000 (2015: 900,000) shares] 407,798 320,023
- Pakistan Telecommunication Company Limited [Nil (2015: 2,000,000) shares] - 37,919
- Tariq Glass Limited [Nil (2015: 600,500) shares] - 43,256
- United Bank Limited [Nil (2015: 1,025,000) shares] - 169,622

Un-listed companies
- DHA Cogen Limited
[5,853,822 (2015: 5,853,822) shares] 9.6 - -
(Chief Executive: Mr. Siraj ul Haq)

- ISE Towers REIT Management Company Limited (formerly

Islamabad Stock Exchange Limited) [3,034,603 (2015: 3,034,603) 9.7 11,100 11,100
shares] (Chief Executive: Mian Ayyaz Afzal)

- Pakistan Export Finance Guarantee Agency Limited

[569,958 (2015: 569,958) shares] 9.8 5,700 5,700
(Liquidator: Mr. Usman Khawaja)

2,988,906 2,526,479
Term Finance Certificates, Debentures, Bonds and
Participation Term Certificates

Listed Term Finance Certificates of Rs. 5,000 each

- Azgard Nine Limited [10,000 (2015: 10,000) certificates] 16,269 16,269

Balance carried forward 111,590,797 103,600,684

 95

Note 2016 2015

(Rupees in '000)

Balance brought forward 111,590,797 103,600,684

Un-listed Term Finance Certificates of Rs. 5,000 each,

unless otherwise specified
- Agritech Limited [1,488 (2015: 1,488) certificates] 7,440 7,440
- Askari Bank Limited 5th issue [Nil (2015: 5,000) certificates] - 25,038
- Azgard Nine Limited [2,150 (2015: 2,150) certificates] 10,750 10,750
- Bank Alfalah Limited- 4th issue [10,000 (2015: 10,000) certificates] 33,247 49,880
- Faysal Bank Limited - 2nd issue [15,000 (2015: 15,000) certificates] 37,425 74,850
- Habib Bank Limited [1,000 (2015: Nil) certificates] 99,988 -
- JS Bank Limited [50,000 (2015: Nil) certificates] 450,000 -
- Standard Chartered Bank (Pakistan) Limited 4th issue
[40,000 (2015: 40,000) certificates] 200,000 200,000

Sukuk Certificates and Bonds of Rs. 5,000 each, unless

otherwise specified
- Al Baraka Bank (Pakistan) Limited [175 (2015: 194) certificates of
Rs 1,000,000 each] 124,999 166,286
- Amreli Steels Limited [10,000 (2015: 10,000) units)] - 19,000
- Eden Housing Limited [10,000 (2015: 10,000) certificates] 6,560 6,560
- Engro Fertilizers Limited [32,300 (2015: 32,300) certificates] 145,350 153,425
- K- Electric Limited (Al-Shirkah) [100,000 (2015: 124,686) certificates] 500,000 623,430
- K- Electric Limited [80,000 (2015: 80,000) certificates] 400,000 400,000
- Liberty Power Tech Limited [1,099,430
(2015: 1,099,430) certificates of Rs. 100 each] 65,335 76,032
- Pak Elektron Limited [Nil (2015: 10,000) certificates] - 10,714
- Pakistan Mobile Communication Limited [100,000 (2015: 100,000)
certificates] 500,000 500,000
- Meezan Bank Limited [425 (2015: Nil) certificates of Rs. 1,000,000 each] 425,000 -
- Nelum Jhelum Hydro Power Company (Pvt) Limited [9,750 (2015: Nil)
certificates of Rs. 100,000 each] 975,000 -
- Three Star Hosiery Mills (Private) Limited [5,100 (2015: 5,100)
certificates] 25,215 25,215
- Water and Power Development Authority (WAPDA)
bonds [4,000 (2015: 4,000) certificates] 9.9 19,860 19,860
4,026,169 2,368,480
Units of Mutual Funds

Open-ended

- NIT Islamic Equity Fund [9,756,098 (2015: 10,022,257) units]

(Managed by National Investment Trust Limited) 100,000 100,223
- NIT Income Fund [9,211,835 (2015: 9,211,835) units]
(Managed by National Investment Trust Limited) 100,000 100,000

Closed-end
- PICIC Growth Fund [ Nil (2015: 7,500,000) certificates]
(Managed by HBL Asset Management Company Limited) - 121,160
200,000 321,383

Total investments at cost 115,816,966 106,290,547

Less: Provision for diminution in the value of investments 9.3 (114,284) (125,900)

115,702,682 106,164,647
Surplus on revaluation of held-for-trading securities- net - 6,483
Surplus on revaluation of available-for-sale securities - net 21.2 2,181,278 2,674,983

117,883,960 108,846,113
Soneri Bank Limited | Annual Report 2016

Note 2016 2015

(Rupees in '000)

9.3 Particulars of provision for diminution in the value of investments

Opening balance 125,900 135,177

Charge for the year 3,773 1,438
Reversals made during the year (10,714) (10,715)
(6,941) (9,277)
Provision reversed on disposal (4,675) -
Closing balance 114,284 125,900

9.3.1 Particulars of provision for diminution in the value

of investments by type and segment

Available-for-sale securities

Listed companies
- Fully paid up ordinary shares of Rs. 10 each 22,490 23,392
Unlisted companies
- Fully paid up ordinary shares of Rs. 10 each
- Pakistan Export Finance Guarantee Agency Limited 5,700 5,700

Held-to-maturity securities

Term Finance Certificates of Rs 5,000 each

- Agritech Limited 7,440 7,440
- Azgard Nine Limited 27,019 27,019
Sukuk Certificates and Bonds of Rs 5,000 each
- Eden Housing Limited 6,560 6,560
- Pak Elektron Limited - 10,714
- Three Stars Hosiery Mills (Private) Limited 25,215 25,215
- Water and Power Development Authority (WAPDA) 9.9 19,860 19,860
114,284 125,900

9.4 Investments include certain approved government securities which are held by the Bank to comply with the Statutory Liquidity
Requirement determined on the basis of the Bank's demand and time liabilities as set out under section 29 of the Banking
Companies Ordinance, 1962.

9.5 Pakistan Investment Bonds include securities having book value of Rs. 30.700 million (2015: Rs. 30.700 million) pledged with
the State Bank of Pakistan and National Bank of Pakistan to facilitate T. T. discounting facility for the branches of the Bank.
Market Treasury Bills and Pakistan Investment Bonds are eligible for discounting with the State Bank of Pakistan.

9.6 DHA Cogen Limited shares were received under the enforcement of a pledge of third party shares by the consortium banks.
These shares were recorded at Nil value as the break-up value of these shares as per the available audited financial statements
is Rs. (29.10).

9.7 This denotes shares of ISE Towers REIT Management Company Limited, formerly Islamabad Stock Exchange Limited (ISEL),
acquired in pursuance of corporatization and demutualization of ISEL as a public company limited by shares.

9.8 This investment is fully provided and as per "shares subscription agreement", can only be sold to an existing investor.

9.9 The Bank purchased 4,000 certificates (on 29 September 2009) of WAPDA through a market based transaction for a cash
consideration of Rs. 19.8 million having a face value of Rs. 20 million. These certificates were available in the seller's CDC
account and on completion of the transaction were transferred to the Bank's CDC account. A periodic Ijarah rental was due
on 22 October 2009 which was not paid to the Bank on the plea that certain discrepancy in the Central Depository Register
was the reason for non-payment.

The Bank through a legal notice clarified the position that it had purchased the aforesaid sukuk certificates from the market for
a valuable consideration when these sukuks were already entered in the CDC's Register of seller's account. However, the Bank
has made full provision against these certificates. The Bank has filed a recovery suit which is currently pending before the
Honourable High Court of Sindh, Karachi.

9.10 During the year, the Bank transferred Rs. 1,300 million Government of Pakistan Ijarah Sukuks from 'held to maturity' to 'available
for sale' category after obtaining the required internal and State Bank of Pakistan's approvals. Subsequently, out of total transferred
amount of Rs. 1,300 million, sukuks amounting to Rs. 800 million have matured during the year.
 97

9.11 Significant particulars relating to government securities, term finance certificates and sukuk bonds are as follows:

Principal Yield / Coupon Coupon

Type of investment Maturity
payments rate (%) payments

Market Treasury Bills March 2017 to July 2017 On maturity 5.77 to 6.21 At maturity
Pakistan Investment Bonds July 2017 to January 2024 On maturity 6.00 to 12.90 Semi-annually
Ijarah sukuks June 2017 to December 2018 On maturity 3.98 to 5.45 Semi-annually
Term Finance Certificates (Refer Annexure IV)
Sukuk Bonds (Refer Annexure IV)

9.12 Quality of available-for-sale securities

2016 2015
Securities (at market value) Amount Latest Available Amount Latest Available
Rating Rating
(Rupees in '000) (Rupees in '000)
Federal Government Securities
- Market Treasury Bills 44,147,931 N/A 38,144,282 N/A
- Pakistan Investment Bonds 63,679,488 N/A 61,550,414 N/A
- Ijarah sukuks 2,139,500 N/A 1,618,080 N/A

Fully paid up ordinary shares of Rs. 10 each

Listed companies
- Agritech Limited 10,798 D 6,822 D
- Allied Bank Limited 63,718 AA(L) A1+(S) - N/A
- Altern Energy Limited 86,625 N/A 65,000 N/A
- Bank AL Habib Limited 117,980 AA+(L) A1+(S) 71,844 AA+(L) A1+(S)
- Bank Alfalah Limited 151,840 AA(L) A1+(S) 158,510 AA(L) A1+(S)
- [Link] Cement Company Limited - - 147,590 N/A
- Dawood Lawrancepur Limited 65,148 N/A - N/A
- Engro Corporation Limited 442,526 AA(L) A1+(S) 335,268 AA(L) A1+(S)
- Engro Fertilizers Limited 248,093 AA-(L) A1+(S) 75,717 AA-(L) A1+(S)
- Fatima Fertilizer Company Limited 184,450 AA-(L) A1+(S) - -
- Fauji Fertilizer Bin Qasim Limited 113,200 AA(L) A1+(S) - -
- Fauji Fertilizer Company Limited - - 23,596 N/A
- Faysal Bank Limited - - 46,290 AA(L) A1+(S)
- Habib Bank Limited 161,245 AAA(L) A1+(S) - -
- Habib Metropolitan Bank Limited - - 106,645 AA+(L) A1+(S)
- Lucky Cement Limited - - 128,710 N/A
- MCB Bank Limited 256,917 AAA(L) A1+(S) 162,638 AAA(L) A1+(S)
- MCB-Arif Habib Savings and Investments Limited - - 16,211 AM2+
- NIB Bank Limited 4,992 AA-(L) A1+(S) - -
- Nishat Chunian Limited 134,224 N/A - -
- Nishat Mills Limited 502,490 AA(L) A1+(S) 284,610 AA(L) A1+(S)
- Oil and Gas Development Company Limited 380,305 AAA(L) A1+(S) 105,606 AAA(L) A1+(S)
- Pakistan International Bulk Terminal Limited 32,990 N/A - -
- Pakistan Petroleum Limited - - 42,634 N/A
- Pakistan State Oil Company Limited 477,631 AA(L) A1+(S) 293,193 AA(L) A1+(S)
- Pakistan Telecommunication Company Limited - - 32,980 N/A
- Tariq Glass Limited - - 41,945 N/A
- United Bank Limited - - 158,824 AA+(L) A1+(S)

Un-listed companies - at cost

- ISE Towers REIT Management Company Limited
(formerly Islamabad Stock Exchange Limited) 11,100 N/A 11,100 N/A
- Pakistan Export Finance Guarantee Agency Limited 5,700 N/A 5,700 N/A

Units of mutual funds

Open-ended
- NIT Islamic Equity Fund 125,171 N/A 98,920 N/A
- NIT Income Fund 96,987 A+(f) 99,095 A+(f)

Balance carried forward 113,641,049 103,832,224

Soneri Bank Limited | Annual Report 2016

2016 2015
Securities (at market value) Amount Latest Available Amount Latest Available
Rating Rating
(Rupees in '000) (Rupees in '000)

Balance brought forward 113,641,049 103,832,224

Closed-end
- PICIC Growth Fund - - 168,975 MFR 3-Star

Term Finance Certificates

- Habib Bank Limited 100,230 AAA - -
- JS Bank Limited 450,000 A+ - -

Sukuk certificates
- Al Baraka Bank (Pakistan) Limited 52,978 A 79,963 AA-1
- K-Electric Limited 515,337 AA 640,574 AA
- Meezan Bank Limited 442,638 AA- - -
- Nelum Jhelum Hydro Power Company (Pvt.) Ltd. 975,000 AAA - -

Total 116,177,232 104,721,736

L represents "long-term rating"

S represents "short-term rating"
N/A represents "Not Available"
Note 2016 2015
(Rupees in '000)

9.13 Unrealised gain / (loss) on revaluation of investments

classified as held for trading

Ordinary shares of listed companies - (1,105)

Term Finance Certificates - (103)
Government of Pakistan - ijarah Sukuks - 4,520
Pakistan Investment Bonds - 3,171
- 6,483

10. ADVANCES - NET

Loans, cash credits, running finances, etc.

In Pakistan 124,932,351 111,921,349

Bills discounted and purchased (excluding treasury bills)

Payable in Pakistan 1,631,223 3,761,206
Payable outside Pakistan 4,912,059 3,438,619
6,543,282 7,199,825

Assets held under Ijarah (IFAS-2) 10.2 268,841 229,923

Advance against Islamic financings 10.3 2,008,562 1,265,863
Advances - gross 133,753,036 120,616,960

Provision against non-performing advances - specific 10.4.1 (8,395,931) (8,568,984)

Provision against consumer and small enterprise loans - general 10.4.1 (51,340) (46,224)
(8,447,271) (8,615,208)

Advances - net of provision 125,305,765 112,001,752

10.1 Particulars of advances (gross)

10.1.1 In local currency 126,123,910 115,173,189

In foreign currencies 7,629,126 5,443,771
133,753,036 120,616,960

10.1.2 Short-term (upto one year) 102,618,230 94,001,203

Long-term (over one year) 31,134,806 26,615,757
133,753,036 120,616,960
 99

10.2 Assests held under Ijarah (IFAS-2)

2016
Cost Accumulated Depreciation
At 01 January Additions / At 31 At 01 Charge for the At 31 Net investment Rate of
2016 (Deletions) / December January year/(depreciation December in ijarah as at depreciation
(Adjustment) 2016 2016 on deletions) / 2016 31 December 2016 %
(Adjustment)
---------------------------------------------------------------------------- (Rupees in '000) ---------------------------------------------------------
Motor vehicles 231,270 119,229 292,221 82,367 49,995 79,489 212,732
(43,150) (25,632) 20 to 100
(15,128) (27,241)
Plant and machinery 302,681 24,961 171,675 221,661 47,974 115,566 56,109
(113,809) (102,428) 20 to 33.33
(42,158) (51,641)

533,951 144,190 463,896 304,028 97,969 195,055 268,841

(156,959) (128,060)
(57,286) (78,882)

2015
Cost Accumulated Depreciation
At 01 January Additions / At 31 At 01 Charge for the At 31 Net investment Rate of
2015 (Deletions) December January year/(depreciation December in ijarah as at depreciation
2015 2015 on deletions) 2015 31 December 2015 %
---------------------------------------------------------------------------- (Rupees in '000) ---------------------------------------------------------

Motor vehicles 178,733 94,120 231,270 102,587 20,339 82,367 148,903 20 to 50

(41,583) (40,559)
Plant and machinery 287,640 15,526 302,681 160,943 61,203 221,661 81,020 20 to 33.33
(485) (485)
466,373 109,646 533,951 263,530 81,542 304,028 229,923
(42,068) (41,044)

The Ijarah payments receivable from customers for each of the following periods under the terms of the respective arrangements
are given below:
2016 2015
(Rupees in '000)

Not later than one year* 88,183 250,816

Later than one year but not later than five years* 111,916 30,313
200,099 281,129

*This excludes the amount of security deposit received from customers.

10.3 Advance against Islamic financings

Car Ijarah 57,543 28,044

Diminishing musharaka 1,008,948 791,322
Machine Ijarah - 23,122
Murabaha 580,556 89,108
Salam 361,515 334,267
2,008,562 1,265,863
Soneri Bank Limited | Annual Report 2016

10.4 Advances include Rs. 10,419.420 million (2015: Rs. 11,584.107 million) which have been placed under non-performing status
as detailed below:
2016
Category of Classified Advances Provision Required Provision Held
Classification Domestic Overseas Total Domestic Overseas Total Domestic Overseas Total
---------------------------------------------------------- (Rupees in '000) ---------------------------------------------------------
Other Assets
Especially
Mentioned* 68,938 - 68,938 1,859 - 1,859 1,859 - 1,859
Substandard 698,888 - 698,888 121,947 - 121,947 121,947 - 121,947
Doubtful 564,124 - 564,124 107,106 - 107,106 107,106 - 107,106
Loss 9,087,470 - 9,087,470 8,165,019 - 8,165,019 8,165,019 - 8,165,019
10,419,420 - 10,419,420 8,395,931 - 8,395,931 8,395,931 - 8,395,931

2015
Category of Classified Advances Provision Required Provision Held
Classification Domestic Overseas Total Domestic Overseas Total Domestic Overseas Total
---------------------------------------------------------- (Rupees in '000) ---------------------------------------------------------
Other Assets
Especially
Mentioned* 48,738 - 48,738 1,545 - 1,545 1,545 - 1,545
Substandard 1,368,932 - 1,368,932 223,235 - 223,235 223,235 - 223,235
Doubtful 796,814 - 796,814 368,966 - 368,966 368,966 - 368,966
Loss 9,369,623 - 9,369,623 7,975,238 - 7,975,238 7,975,238 - 7,975,238
11,584,107 - 11,584,107 8,568,984 - 8,568,984 8,568,984 - 8,568,984

* The 'Other Assets Especially Mentioned' category pertains to agricultural finance, consumer and small enterprises amounting
to Rs 50.356 million (2015: Rs 33.191 million), Rs NIL (2015: Rs. 0.087 million) and Rs 18.582 million (2015: Rs 15.460 million)
respectively.

10.4.1 Particulars of provision against non-performing loans and advances

Note 2016 2015

General General
Specific Consumer Small Total Specific Consumer Small Total
Enterprises Enterprises
--------------------------------------------------- (Rupees in '000) ---------------------------------------------------

Opening balance 8,568,984 27,224 19,000 8,615,208 7,610,972 15,558 19,000 7,645,530

Charge for the year 1,352,429 2,116 3,000 1,357,545 1,814,735 11,666 - 1,826,401
Reversals (1,326,473) - - (1,326,473) (791,799) - - (791,799)
25,956 2,116 3,000 31,072 1,022,936 11,666 - 1,034,602

Transfers 5,852 - - 5,852 - - - -

Amount written off 10.8 (204,861) - - (204,861) (64,924) - - (64,924)

Closing balance 8,395,931 29,340 22,000 8,447,271 8,568,984 27,224 19,000 8,615,208

[Link] The SBP vide circular 10 of 2016 has revised the Prudential Regulations for consumer financing. In the revised Regulations,
SBP has specified that general provision against consumer financing should be maintained at varying percentages based
on the non-performing loan ratio present in the portfolio. These percentages range from 1% to 2.5% for secured and 4% to
7% for unsecured portfolio. Previously, the Regulations required provision to be maintained at 1.5% for secured portfolio and
5% for unsecured portfolio. As a consequence of the above change, the BankÕs general provisioning requirement against
consumer portfolio has reduced by Rs 10.071 million.

[Link] The Bank has maintained general provision against housing finance portfolio @ 0.50% of the performing portfolio and provision
against small enterprises represents general provision maintained at an amount equal to 1.0% of the fully secured performing
portfolio and 2.0% of the unsecured performing portfolio as required under the Prudential Regulations issued by the State
Bank of Pakistan.
 101

[Link] Particulars of provision against non-performing loans and advances

2016 2015
General General
Specific Consumer Small Total Specific Consumer Small Total
Enterprises Enterprises
--------------------------------------------------- (Rupees in '000) ---------------------------------------------------

In local currency 7,946,650 29,340 22,000 7,997,990 8,119,093 27,224 19,000 8,165,317
In foreign currencies 449,281 - - 449,281 449,891 - - 449,891
8,395,931 29,340 22,000 8,447,271 8,568,984 27,224 19,000 8,615,208

10.5 The Bank has availed the benefit of forced sales value of pledged stocks and mortgaged residential and commercial properties
held as collateral against non-performing advances as allowed under the regulation issued by the State Bank of Pakistan. Had
the benefit not been taken by the Bank, the specific provision against non-performing advances would have been higher by
Rs.1,102.633 million (2015: Rs. 1,496.433 million. The additional profit arising from availing this benefit - net of the tax amounts
to Rs. 716.711 million (2015: 972.681 million). This profit is not available for distribution either as cash or stock dividend to
shareholders and bonus to employees.

10.6 The SBP has granted relaxation in provisioning requirements in respect of exposures in Dewan Mushtaq Group (DMG). Had
this relaxation not been available, provision against loans and advances would have been higher by Rs 44.930 million (2015:
Rs 44.930 million).

10.7 Although the Bank has made provision against its non-performing portfolio as per the category of classification of the loans,
however, the Bank still holds enforceable collateral realisable through litigation. These securities comprise of charge against
various tangible assets of the borrower including land, building and machinery, stock in trade, etc.

Note 2016 2015

(Rupees in '000)

10.8 Particulars of write offs:

10.8.1 Against provisions 10.4.1 204,861 64,924

Directly charged to the profit and loss account - net 276 3,916
205,137 68,840

10.8.2 Write offs of Rs. 500,000 and above [Link] 204,683 68,361
Write offs of below Rs. 500,000 454 479
205,137 68,840

[Link] Details of loan write offs of Rs. 500,000 and above

In terms of sub-section (3) of Section 33A of the Banking Companies Ordinance, 1962 the statement in respect of written-off
loans or any other financial relief of five hundred thousand rupees or above allowed to a person(s) during the year ended
31 December 2016 is given in Annexure - I. However, this write off does not affect the Bank's right to recover the outstanding
debts from these customers.

10.9 Particulars of loans and advances to directors, associated companies, etc.

Debts due by directors, executives or officers of the Bank or any of them either severally or jointly with any other persons*.

2016 2015
(Rupees in '000)

Balance at beginning of the year 2,783,602 2,132,902

Loans granted during the year 1,267,149 1,236,538
Repayments (867,748) (585,838)
Balance at end of the year 3,183,003 2,783,602

* Represents loans given by the Bank to its executives and other employees as per the terms of their employment.
Soneri Bank Limited | Annual Report 2016

Note 2016 2015

(Rupees in '000)

11. OPERATING FIXED ASSETS

Property and equipment 11.1 4,678,852 4,803,699

Intangible assets 11.2 202,303 72,651
Capital work-in-progress 11.3 257,269 80,382
5,138,424 4,956,732

11.1 Property and equipments

2016
------------------------ COST / REVALUATION ------------------------ ---- ACCUMULATED DEPRECIATION ----
At Additions / Revaluation At At Charge At Book value at Rate of
01 January (deletions) surplus 31 December 01 January for the year / 31 December 31 December depreciation
2016 adjustments* 2016 2016 (depreciation 2016 2016 %
on deletions) /
adjustments*
----------------------------------------------------------------------- (Rupees in '000) -----------------------------------------------------------------------

Freehold land 923,215 12,840 - 936,055 - - - 936,055 -

- -

Leasehold land 186,967 - - 186,967 - - - 186,967 -

Building on freehold land 138,136 160 - 138,296 28,632 9,547 38,179 100,117 5-9
- - -
- -

Building on leasehold land 2,968,500 13,290 - 2,742,286 1,071,811 205,355 1,175,867 1,566,419 5 - 13
(239,504) (101,299)
-

Leasehold improvements 1,031,999 221,999 - 1,231,522 193,194 56,327 242,423 989,099 5

(22,476) (7,098)
- - -

Furniture and fixtures 385,965 47,240 - 427,233 183,051 35,480 213,824 213,409 10
(5,972) (4,707)

Electrical, office and 2,336,813 267,682 - 2,293,532 1,779,687 230,147 1,701,351 592,181 20
computer equipment (311,460) (308,980)
497* 497 *

Vehicles 230,160 44,970 - 257,661 141,681 38,844 163,056 94,605 20

(17,469) (17,469)

8,201,755 608,181 - 8,213,552 3,398,056 575,700 3,534,700 4,678,852

(596,881) (439,553)
497 * 497 *
 103

2015
------------------------ COST / REVALUATION ------------------------ ---- ACCUMULATED DEPRECIATION ----
At Additions / Revaluation At At Charge At Book value at Rate of
01 January (deletions) surplus 31 December 01 January for the year / 31 December 31 December depreciation
2015 adjustments* 2015 2015 (depreciation 2015 2015 %
on deletions) /
adjustments*
----------------------------------------------------------------------- (Rupees in '000) -----------------------------------------------------------------------

Freehold land 927,571 1,000 - 923,215 - - - 923,215 -

(5,356)
Leasehold land 185,366 1,601 - 186,967 - - - 186,967

Building on freehold land 140,035 1,677 - 138,136 21,215 9,151 28,632 109,504 5-9
(3,576)* (1,734)

Building on leasehold land 2,966,576 15,003 - 2,968,500 864,039 212,280 1,071,811 1,896,689 5 - 13
(13,079) (4,508)
-

Leasehold improvements 941,752 130,561 - 1,031,999 160,741 48,233 193,194 838,805 5

(40,314) (15,780)
- -

Furniture and fixtures 359,241 28,939 - 385,965 152,565 32,059 183,051 202,914 10
(2,215) (1,573)
- -

Electrical, office and 2,115,349 295,374 - 2,336,813 1,603,758 245,321 1,779,687 557,126 20
computer equipment (69,682) (67,209)
(4,228)* (2,183)*

Vehicles 203,769 37,125 - 230,160 114,764 36,990 141,681 88,479 20

(10,734) (10,073)
-

7,839,659 511,280 - 8,201,755 2,917,082 584,034 3,398,056 4,803,699

(144,956) (100,877)
(4,228)* (2,183)*

* These represent reclassification adjustments.

11.1.1 The cost of fully depreciated property and equipment still in use amounts to Rs. 1,651.181 million (2015: Rs. 1,555.060 million).

11.1.2 During the year 2014, the Bank's freehold / leasehold land and buildings on freehold / leasehold land were 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.
1,112.937 million and buildings on freehold / leasehold land was determined at Rs. 2,221.357 million.

Had there been no revaluation, the carrying amount of freehold / leasehold land and buildings on freehold / leasehold land as
at 31 December 2016 would have been Rs.1,012.706 million and Rs. 407.942 million respectively (2015: Rs. 999.866 and Rs.
454.337 million respectively).

11.1.3 Details of disposals / deletion of property and equipment to executives and other persons with original cost or book value in
excess of Rs. 1 million or Rs. 250,000 respectively (whichever is less) are given in Annexure - III which is an integral part of
these financial statements.
Soneri Bank Limited | Annual Report 2016

11.2 Intangible assets

2016
---------------------- Cost ------------------------ ---------Accumulated Amortization---------
At 01 Additions/ At 31 At 01 Charge At 31 Net Book Annual rate of
January (deletions)/ December January for the year/ December value at 31 amortisation
2016 adjustments* 2016 2016 (amortisation 2016 December %
on deletion)/ 2016
adjustments*
----------------------------------------------------------- (Rupees in '000) ----------------------------------------------------------

Software 454,291 217,456 671,250 382,105 88,811 470,419 200,831 33.33

- -
(497) * (497)*

Trademark 4,208 1,578 5,786 3,743 571 4,314 1,472 33.33

458,499 219,034 677,036 385,848 89,382 474,733 202,303

- -
(497) * (497)*

2015
---------------------- Cost ------------------------ ---------Accumulated Amortization---------
At 01 Additions/ At 31 At 01 Charge At 31 Net Book Annual rate of
January (deletions)/ December January for the year/ December value at 31 amortisation
2015 adjustments* 2015 2015 (amortisation 2015 December %
on deletion)/ 2015
adjustments*
----------------------------------------------------------- (Rupees in '000) ----------------------------------------------------------

Software 402,472 49,141 454,291 342,335 37,875 382,105 72,186 33.33

(1,550) (288)
4,228 * 2,183 *

Trademark 4,180 28 4,208 3,296 447 3,743 465 33.33

406,652 49,169 458,499 345,631 38,322 385,848 72,651

(1,550) (288)
4,228 * 2,183 *

* These represent reclassification adjustments.

11.2.1 The additions mainly represent Microsoft license fee in respect of various softwares amounting to Rs. 150.768 million (2015: Rs.
49.141 million).

Note 2016 2015

(Rupees in '000)

11.3 Capital work-in-progress

Civil works 44,885 45,574

Advances to suppliers and contractors 210,421 31,262
Consultant's fee and other charges 1,963 3,546
257,269 80,382

12. OTHER ASSETS

Income / mark-up accrued in local currency 3,499,946 4,726,676

Income / mark-up accrued in foreign currency 10,077 5,768
Dividend receivable 14,650 16,350
Advances, deposits and prepayments 353,124 340,152
Advance taxation (provisions less payments) 1,095,725 524,509
Cash margin against margin trading - 5,500
Non-banking assets acquired in satisfaction of claim 12.3 - 17,400
Stationery and stamps in hand 33,650 29,330
Due from the State Bank of Pakistan 53,250 61,493
Advance against subscription of Term Finance Certificates 253,000 250,000
Others 12.2 397,106 270,970
5,710,528 6,248,148
Less: Provision held against other assets 12.1 & 12.2 (156,077) (157,826)
Other assets (net of provision) 5,554,451 6,090,322
 105

2016 2015
(Rupees in '000)

12.1 Provision against other assets

Opening balance 157,826 157,760

Charge for the year 30 66

Reversal - -
30 66
Transfer (248) -
Write-offs (1,531) -
Closing balance 156,077 157,826

12.2 This includes an amount of Rs.143.443 million (2015: Rs.143.443 million) in respect of fraud and forgery claims relating to cash
embezzlement made in the Bank. The Bank has initiated legal proceedings against the alleged and has also taken necessary
steps to further strengthen its internal control system.

2016 2015
(Rupees in '000)

12.3 Book value / market value of non-banking asset acquired in

satisfaction of claim - 17,400

The non-banking asset was disposed of during the year.

13. CONTINGENT ASSETS

There were no contingent assets as at the balance sheet date.

14. BILLS PAYABLE

In Pakistan 3,254,243 2,706,274

Outside Pakistan - -
3,254,243 2,706,274

15. BORROWINGS

In Pakistan 36,256,914 37,320,678

Outside Pakistan 2,648,164 2,554,945
38,905,078 39,875,623

15.1 Particulars of borrowings with respect to currencies

In local currency 36,256,914 37,320,678

In foreign currencies 2,648,164 2,554,945
38,905,078 39,875,623
Soneri Bank Limited | Annual Report 2016

Note 2016 2015

(Rupees in '000)

15.2 Details of borrowings secured / unsecured

Secured
Borrowings from the State Bank of Pakistan
Under Export Refinance Scheme 15.2.1 8,139,378 8,582,028
Long term Financing Facility for plant and machinery 15.2.2 880,459 985,892
Long term Finance - export oriented projects 15.2.3 - 602
Modernisation of SME-Rice Husking 15.2.4 17,200 22,800
Financing facility for storage of agriculture produce 15.2.5 11,250 27,472
Repurchase agreement borrowings 15.2.6 20,561,740 23,591,859
Repurchase agreement borrowings - other banks 15.2.7 6,299,081 610,025
Borrowings from other financial institutions 15.2.8 2,510,364 2,548,759
38,419,472 36,369,437
Unsecured
Call borrowings 15.2.9 347,806 3,500,000
Overdrawn nostro accounts 137,800 6,186
485,606 3,506,186

38,905,078 39,875,623

15.2.1 The Bank has entered into an agreement with the State Bank of Pakistan (SBP) for extending Export Finance to its customers.
Borrowings under the Export Refinance Scheme of SBP carry interest at rates ranging from 1.00% to 2.50% per annum (2015:
2.50% to 3.50%). These are secured against demand promissory notes and are due to mature latest by 28 June 2017.

15.2.2 These represent borrowings from the SBP under scheme for Long-term Financing Facility at rates ranging from 4.50% to 9.70%
per annum (2015: 3.00% to 9.70%), and have varying long term maturities due by 10 September 2025. Under the agreement,
SBP has a right to recover the outstanding amount from the Bank at the respective maturity date of each finance by directly
debiting the current account of the Bank maintained with SBP.

15.2.3 These borrowings are obtained from the SBP to provide financing facilities to export oriented units for the import of machinery,
plant, equipment and accessories thereof (not manufactured locally).

15.2.4 These represent borrowings from the SBP under the scheme for Modernisation of SME Rice Husking Mills in Sindh at the rate
ranging from 4.75% to 6.25% per annum (2015: 4.75% to 6.25%) and are due to mature latest by 16 December 2019.

15.2.5 These represent borrowings from the SBP under scheme for storage of agriculture produce at the rates ranging from 3.50%
to 4.75% per annum (2015: 4.75% to 6.25%) and are due to mature latest by 20 March 2018.

15.2.6 This represents repurchase agreements executed with the State Bank of Pakistan which carry mark up at the rate of 5.95%
per annum (2015: 6.11%) and are due to mature latest by 06 January 2017.

15.2.7 These represents repurchase agreements at rates ranging from of 5.50% to 5.95% per annum (2015: 5.75% to 6.50%) and
are due to mature latest by 22 May 2017.

15.2.8 This represents borrowings against foreign bills from various foreign banks at rates ranging from 1.60% to 1.75% per annum
(2015: 1.60% to 1.71%) and are due to mature latest by 06 June 2017.

15.2.9 This represents borrowings from a commercial bank in the inter bank money market. It carries mark-up at the rate of 5.60%
per annum (2015: 6.05%) and is due to mature latest by 08 March 2017.
 107

2016 2015
(Rupees in '000)

16. DEPOSITS AND OTHER ACCOUNTS

Customers
Remunerative
Fixed deposits 59,765,887 52,761,956
Savings deposits 85,940,537 74,784,165

Non-remunerative
Current accounts 49,164,840 41,505,296
Call deposits 1,063,104 471,170
Margin deposits 2,316,868 1,648,294
198,251,236 171,170,881
Financial institutions
Remunerative - savings deposits 12,335,522 13,793,944
Non-remunerative - current deposits 252,888 257,558
12,588,410 14,051,502

210,839,646 185,222,383

16.1 Particulars of deposits

In local currency 197,533,847 175,093,333

In foreign currencies 13,305,799 10,129,050
210,839,646 185,222,383

17. SUB-ORDINATED LOANS - UNSECURED (NON-PARTICIPATORY)

Listed Term Finance Certificates 2,998,800 3,000,000

17.1 This denotes rated, listed and unsecured Term Finance Certificates (TFCs) issued as instrument of redeemable capital with a
tenor of 8 years. The Pakistan Credit Rating Agency Limited (PACRA) has assigned a credit rating of A+ to the instrument as
on 16 December 2016. The instrument is sub-ordinated as to the payment of principal and profit to all other indebtness of the
Bank (including deposits) and is not redeemable before maturity without prior approval of the State Bank of Pakistan. Principal
is redeemable semi-annually in such a way that 0.30% of the principal will be redeemed in the first 90 months and the remaining
principal of 99.70% at maturity at the end of the 96th month in July 2023.

Mark-up is payable semi-annually in arrears calculated on a 365 days period on the outstanding principal amount and is
chargeable at a floating rate of six months KIBOR (prevailing immediately preceding the date before the start of each six months
period) plus 1.35% per annum (subject to no floor and cap).

The TFCs contains a lock-in clause which stipulates that neither mark-up nor principal may be paid (even at maturity) if such
payments will result in shortfall in the BankÕs MCR or CAR or increase any existing shortfall in MCR and CAR.

The instrument will be subject to loss absorbency and / or any other requirements under SBPÕs Basel III Capital Rules. Upon
the occurrence of a Point of Non-Viability event as defined by SBPÕs Basel III Capital Rules, SBP may at its option, fully and
permanently convert the TFCs into common shares of the Bank 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 ÔOutstanding Face Value of
the TFCÕ divided by market value per share of the BankÕs common equity on the date of trigger of the non-viability event as
declared by SBP, subject to the cap of 225,000,000 shares.
Note 2016 2015
(Rupees in '000)

18. DEFERRED TAX LIABILITIES - NET

Deferred credits arising in respect of:

Accelerated tax depreciation 326,408 317,517
Surplus on revaluation of fixed assets 21.1 442,284 544,926
Surplus on revaluation of securities 21.2 763,447 936,244
1,532,139 1,798,687
Deferred debits arising in respect of:
Actuarial loss on defined benefit plan (26,415) (19,927)
Provision against non-performing advances (368,194) (361,718)
(394,609) (381,645)

Deferred tax liabilities - net 1,137,530 1,417,042

Soneri Bank Limited | Annual Report 2016

Note 2016 2015

(Rupees in '000)

19. OTHER LIABILITIES

Mark-up / return / interest payable in local currency 1,046,386 1,289,242

Mark-up / return / interest payable in foreign currencies 37,192 26,189
Unearned commission and income on bills discounted 24,435 33,594
Unrealised loss on forward foreign exchange contracts 6,911 27,921
Accrued expenses 471,720 432,016
Branch adjustment account - net 336,312 170,797
Payable to Workers' Welfare Fund 19.1 382,357 318,053
Sundry deposits 370,072 307,327
Others 420,797 323,426
3,096,182 2,928,565

19.1 The Bank has made full provision for Workers Welfare Fund (WWF) based on profit for the respective years (2008-2016). During
the current year, the Supreme Court of Pakistan vide its order dated: 10 November 2016 has held that the amendments made
in the law introduced by the Federal Government for the levy of WWF were not lawful. The Federal Board of Revenue has filed
review petitions against this order which are currently pending. Legal advice obtained on the matter indicates that consequent
to filing of these review petitions the judgment may not currently be treated as conclusive. Accordingly, the Bank continues to
maintain the provision in respect of WWF.

20. SHARE CAPITAL

20.1 Authorised capital

2016 2015 2016 2015

(Number of shares) (Rupees in '000)

1,500,000,000 1,500,000,000 Ordinary shares of Rs. 10/- each 15,000,000 15,000,000

20.2 Issued, subscribed and paid-up capital

2016 2015 2016 2015

Issued Issued as Issued Issued as
for cash bonus shares Total for cash bonus shares Total (Rupees in '000)
------------------------------------------------ Number of shares ------------------------------------------------

Opening balance 387,397,655 715,065,828 1,102,463,483 387,397,655 715,065,828 1,102,463,483 11,024,636 11,024,636
Shares issued during the year - - - - - - - -
Closing balance 387,397,655 715,065,828 1,102,463,483 387,397,655 715,065,828 1,102,463,483 11,024,636 11,024,636

20.3 Major shareholders as at 31 December 2016 are as follows:

Name of shareholder Number of Percentage of

shares held shareholding

National Investment (Unit) Trust 117,680,572 10.67%

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%
759,280,776 68.87%

Major shareholders as at 31 December 2015 were as follows:

Name of shareholder

National Investment (Unit) Trust 145,033,966 13.16%

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%
786,634,170 71.36%
 109

Note 2016 2015

(Rupees in '000)

21. SURPLUS ON REVALUATION OF ASSETS (NET OF TAX)

- Operating fixed assets 21.1 926,626 1,117,246

- Available-for-sale securities 21.2 1,417,831 1,738,739
2,344,457 2,855,985
21.1 Surplus on revaluation of fixed assets - net of tax

Surplus on revaluation of operating fixed assets - opening 1,662,172 1,839,797

Transferred to unappropriated profit in respect of incremental

depreciation charged on related assets - net of deferred tax (120,097) (114,558)
Related deferred tax liability (64,669) (63,067)
(184,766) (177,625)

Realised on disposal / write off during the year - net of deferred tax (70,523) -
Related deferred tax liability on surplus reversed on disposal / write off (37,973) -
(108,496) -
Surplus on revaluation of operating fixed assets 1,368,910 1,662,172

Related deferred tax liability on surplus at 01 January (544,926) (607,993)

Related deferred tax liability in respect of incremental depreciation
charged during the year 64,669 63,067
Related deferred tax liability on surplus reversed on disposal / write off 37,973 -
Less: Related deferred tax liability (442,284) (544,926)
926,626 1,117,246

21.2 Surplus on revaluation of available for sale securities - net of tax

Federal government securities 1,640,940 2,739,389

Sukuk certificates 32,624 16,537
Quoted shares / closed end mutual funds 485,556 (78,736)
Others - open ended mutual funds 22,158 (2,207)
2,181,278 2,674,983
Related deferred tax liability (763,447) (936,244)
1,417,831 1,738,739

22. CONTINGENCIES AND COMMITMENTS

22.1 Direct credit substitutes

Financial guarantees issued favouring:

- Government 1,972,010 1,869,017
- Others 1,983,754 348,968
3,955,764 2,217,985

22.2 Transaction-related contingent liabilities

Guarantees issued favouring:

- Government 6,561,129 4,444,972
- Financial institutions 112,714 89,254
- Others 4,276,255 2,060,428
10,950,098 6,594,654
22.3 Trade-related contingent liabilities

Letters of credit 27,450,143 17,219,009

Acceptances 3,299,085 2,312,668

22.4 Commitments in respect of forward lendings

Commitments to extend credit 5,595,318 5,212,790

Soneri Bank Limited | Annual Report 2016

The Bank has certain other commitments to extend credit that represent revocable commitments and do not attract any significant
penalty or expense in case the facility is withdrawn unilaterally.

2016 2015
(Rupees in '000)

22.5 Committments in respect of forward exchange contracts

Purchase
- From other banks 13,910,917 41,950,008
- From customers 4,250,556 2,013,518
18,161,473 43,963,526
Sale
- To other banks 13,246,036 39,355,948
- To customers 547,268 393,506
13,793,304 39,749,454

The maturities of the above contracts are spread over a period of one year.

22.6 Commitments in respect of lendings to financial & other institutions

Margin trading system - 7,775

22.7 Commitments in respect of purchase of fixed assets 194,207 22,337

22.8 Other contingencies

22.9 Taxation

22.9.1 (a) The Income tax returns of the Bank have been filed upto tax year 2016 (accounting year ended 31 December 2015). The
Income tax authorities have amended assessment orders for tax years 2011, 2014 and 2015 and created an additional tax
demands of Rs 846.668 million which have been fully paid as required under the law. The Bank has filed appeals before
the various appellate forums against these amendments. Assessments from Tax Year 2001-2002 upto Tax Year 2010 have
been decided at the level of Appellate Tribunal Inland Revenue. The department has filed tax references in respect of certain
matters with the Honourable Lahore High Court which are currently pending. In case of any adverse decision an additional
tax liability of Rs 617.120 million (which includes impact of certain timing differences as well) may arise. Further, assessments
for tax years 2012 and 2013 have been decided at the level of Commissioner Inland Revenue (Appeals). The department
has filed appeals with Appellate Tribunal Inland Revenue which are currently pending. In case of any adverse decision an
additional tax liability of Rs 866.384 million (which include impact of certain timing differences as well) may arise. However,
the management is confident that these matters will be ultimately decided in favor of the Bank and the Bank will not be
exposed to any additional tax liability on these account.

(b) Tax Authorities have passed orders for tax years 2008 to 2012 levying Federal Excise Duty on certain items. The Bank has
filed appeals against these assessments which are pending before various Appellate forums. The aggregate net amount
involved is Rs 71.376 million. The management of the Bank is confident that the appeals will be decided in the favor of the
Bank.

(c) Tax Authorities have passed order for tax years 2014 and 2015 under section 161/205 of the Income Tax Ordinance 2001,
creating a demand of Rs 106.685 million and Rs 67.672 million respectively for non-deduction of tax at source. Against the
said demands, the Bank has already filed an appeals before the Commissioner Inland Revenue (Appeals), which are currently
pending .

22.9.2 Claims against the Bank not acknowledged as debts amounted to Rs 2.4 million (2015: Rs 2.4 million).

22.9.3 During the current period the Assistant Commissioner Inland Revenue vide order under Section 182 / 140 of the Income Tax
Ordinance, 2001 has levied a penalty against one of the staff of the Bank, amounting to Rs. 30 million. The action taken by the
Bank in this case was backed by legal opinion of the customer's lawyer. An appeal has been filed by the staff before the
Commissioner Inland Revenue (Appeals), which is currently pending. In case of any adverse decision in appeal Bank reserves
right of recourse on the customer for re-imbursement.

22.9.4 A penalty of Rs. 50 million has been imposed by Competition Commission of Pakistan ("the Commission") on the Bank on account
of uncompetitive behaviour and imposing uniform cost on cash withdrawal from the Bank's ATM transactions. The Bank, alongwith
other Banks, had filed a constitutional petition before the Competition Appellate Tribunal which has set aside the order of the
Commission. Against the said order of the Competition Appellate Tribunal, the Commission has filed an appeal before the
Supreme Court of Pakistan, the hearing of which is currently pending.
 111

22.9.5 Through the Finance Act, 2008 an amendment was made in the Employees Old Age Benefits Act, 1976 whereby the exemption
available to banks and their employees was withdrawn by omission of clause (e) of Section 47 of the said Act and banks and
their employees were made liable for contribution to Employee Old Age Benefit Institution. The Lahore High Court, subsequently,
nullified the amendments made through the Finance Act, 2008.

Subsequently, several other banks also filed the Constitutional Petition before the Sindh High Court which decided the matter
in favor of the banks. As a result of the decision of the Lahore and Sindh High Courts, the Bank stopped EOBI contribution w.e.f.
February 2012. An appeal was filed by the EOBI in the Supreme Court of Pakistan which has been disposed off by the Honorable
Court during the current period vide its order dated: 10 November 2016 in favor of the banks. However, EOBI has filed review
Petition on 09 December 2016 before the Supreme Court of Pakistan which is currently pending.

In case of any adverse decision by the Supreme Court of Pakistan, a contribution of Rs.102.489 million (upto 31 December
2015: Rs. 77.047 million) will become payable by the Bank to the EOBI. The said amount of Rs.102.489 million has not been
provided in these financial statements as the Bank is fully confident that the case will be decided in the Bank's favour.

2016 2015
(Rupees in '000)

23 . MARK-UP / RETURN / INTEREST EARNED

On loans and advances to customers 7,719,754 8,562,444

Ijarah income - net 10,206 32,284
On investments:
- Held-for-trading securities 141,630 116,720
- Available-for-sale securities 9,168,548 9,066,772
- Held-to-maturity securities 140,768 289,262
On deposits with financial institutions 30,907 75,085
On securities purchased under resale agreements 47,178 95,026
On placements and call money lendings 143,058 77,115
Income on bai muajjal placements 122,359 5,024
17,524,408 18,319,732
24. MARK-UP / RETURN / INTEREST EXPENSED

Deposits 8,006,336 8,562,621

Securities sold under repurchase agreements 2,124,075 1,426,662
Borrowings from the State Bank of Pakistan under various re-finance schemes 242,784 405,195
Call borrowings 77,975 148,791
Sub-ordinated loans 229,100 178,996
10,680,270 10,722,265

25. INCOME FROM DEALING IN FOREIGN CURRENCIES - NET

This includes conversion cost of foreign currency transactions into / from local currency funds (i.e. swap cost on foreign currency
transactions) which amounts to Rs. 134.558 million (2015: Rs. 117.117 million).

2016 2015
(Rupees in '000)

26. GAIN ON SALE OF SECURITIES - NET

Ordinary shares - listed equity securities 379,739 373,768

Ordinary shares - unlisted equity securities - 18,750
Units of mutual funds 77,094 24,280
Pakistan Investment Bonds 438,461 630,484
Market Treasury Bills 16,456 73,234
Term Finance Certificates 3,327 200
GOP Ijarah Sukuks 30,073 5,653
945,150 1,126,369

27. OTHER INCOME

Gain on sale of property and equipment 11,565 12,106

Gain on sale of non-banking assets 600 -
Provision no longer required written back - 24,351
Staff notice period and other recoveries 16,428 20,904
28,593 57,361
Soneri Bank Limited | Annual Report 2016

Note 2016 2015

(Rupees in '000)

28. ADMINISTRATIVE EXPENSES

Salaries, allowances, etc. 28.4 2,489,237 2,353,153

Charge for defined benefit plan 34.5 84,176 71,762
Contribution to defined contribution plan 35 100,376 94,247
Non-executive directors' fees, allowances and other expenses 11,725 9,975
Rent, taxes, insurance, electricity, etc. 954,808 910,204
Legal and professional charges 50,845 57,472
Communications 87,007 78,351
Repairs and maintenance 184,348 167,021
Stationery and printing 114,648 127,586
Advertisement and publicity 147,646 117,086
Donations 28.1 15,221 15,000
Auditors' remuneration 28.2 9,759 7,090
Depreciation 11.1 575,700 584,034
Amortisation 11.2 89,382 38,322
Brokerage and commission 25,144 27,265
Automation expenses 407,977 350,443
Entertainment 153,643 144,156
Fees and subscription 51,303 60,992
Motor vehicles running expenses 106,822 109,837
Remittance charges 2,300 2,359
Service charges 548,137 488,193
Training expenses 27,690 18,615
Travelling expenses 34,945 23,488
Others 28.3 116,055 115,664
6,388,894 5,972,315

28.1 Details of the donations given during the year are as follows:

Donee

The Aga Khan Hospital and Medical College Foundation - 10,000

The Aga Khan Education Service, Pakistan 2,500 -
The Aga Khan Planning and Building Service, Pakistan 7,500 -
Institute of Business Administration - Karachi 5,000 5,000
Old Associates of Kinnaird Society, Karachi 221 -
15,221 15,000

Directors or their spouse have no interest in any of the donee in current year. Last year donation was given to Aga Khan Hospital
and Medical College Foundation, where the Chief Operating Officer of the Bank is a member of the Governing Body.

2016 2015
(Rupees in '000)

28.2 Auditors' remuneration

Audit fee 1,341 1,265

Fee for audit of provident and gratuity funds 130 118
Audit of branches and other certifications 7,097 4,561
Fee for half yearly review of financial statements 536 536
Out-of-pocket expenses 655 610
9,759 7,090

28.3 This includes an amount of Rs. 0.345 million (2015: Rs 0.244 million) paid to the Kidney Centre Karachi, under Corporate Social
Responsibilities activities of the Bank to sponsor its fund raising event. One of the directors of the Bank is a member of the Board
of Governors of the Kidney Centre, Karachi.

28.4 This includes aggregate amount of bonus paid in respect of executives and President and Chief Executive Officer amounting
to Rs 151.785 million and Rs 18.000 million respectively (2015: Rs 143.935 million and Rs 16.000 million respectively).
 113

2016 2015
(Rupees in '000)

29. OTHER CHARGES

Penalties imposed by the State Bank of Pakistan 530 43,467

Operating fixed assets written-off 24,871 24,870
Fraud and forgery - 500
Workers' Welfare Fund 64,304 81,778
Unreconciled balances written off - 6
89,705 150,621

30. TAXATION

For the year

Current 1,099,377 1,402,494
Deferred (62,253) (117,854)
1,037,124 1,284,640
For prior years
Current 161,371 98,199
Deferred - -
161,371 98,199

1,198,495 1,382,839

30.1 The Finance Act, 2016 re-imposed one time levy of super tax for rehabilitation of temporarily displaced person at the rate of
4% of the taxable income for the tax year 2016. Accordingly, an amount of Rs 161.371 million has been recognised in these
financial statements as prior year taxation charge.

Note 2016 2015

(Rupees in '000)

30.2 Relationship between tax expense and accounting profit

Profit before taxation 3,077,339 3,595,607

Tax at the applicable tax rate of 35% (2015: 35%) 1,077,069 1,258,462
Tax effect on permanent differences 2,013 15,213
Prior years 161,371 98,199
Others (41,958) 10,965
1,198,495 1,382,839

31. BASIC / DILUTED EARNINGS PER SHARE

Profit for the year after taxation 1,878,844 2,212,768

Number of shares

Weighted average number of ordinary shares 1,102,463,483 1,102,463,483

(Rupees)

Basic and diluted earnings per share 1.7042 2.0071

32. CASH AND CASH EQUIVALENTS

Cash and balances with treasury banks 6 18,278,840 16,718,428

Balances with other banks 7 822,689 1,634,544
Overdrawn nostro accounts 15.2 (137,800) (6,186)
18,963,729 18,346,786
Soneri Bank Limited | Annual Report 2016

Note 2016 2015

(Number of employees)

33. STAFF STRENGTH

Permanent 2,715 2,715

Temporary / on contractual basis 29 38
Bank's own staff strength at the end of the year 2,744 2,753
Outsourced 33.1 981 923
Total staff strength at the end of the year 3,725 3,676

33.1 Outsourced represents employees hired by an outside contractor / agency and posted in the Bank to perform various tasks /
activities of the Bank.

34 DEFINED BENEFIT PLAN

34.1 General description

As mentioned in note 5.9, the Bank operates a funded gratuity scheme for all its permanent employees. The benefits under the
gratuity scheme are payable on retirement at the age of 60 or earlier cessation of service, in lump sum. The benefit (for all
employees other than the President) is equal to one month's last drawn basic salary for each year of eligible service with the
Bank subject to a minimum qualifying period of service of five years. For the President, the benefit is determined as per the terms
of his employment. The plan assets and defined benefit obligations are based in Pakistan.

2016 2015
34.2 Principal actuarial assumptions

a) Discount factor used (% per annum) 7.50 9.00

b) Expected rate of salary increase (% per annum) 6.50 7.00
c) Mortality rates (for death in service)* SLIC (2001-2005) SLIC (2001-2005)
d) Rate of employee turnover Heavy Heavy

* Assumptions regarding future mortality are set based on actuarial advice in accordance with the published statistics and
experience in Pakistan. The rates assumed are based on the State Life Insurance Corporation Limited [SLIC (2001 - 2005)]
ultimate mortality tables rated down one year.

Note 2016 2015

(Rupees in '000)

34.3 The amount recognised in the statement of financial position

Present value of defined benefit obligation 34.4 629,630 523,705

Fair value of plan assets 34.4 (629,630) (523,705)
- -
 115

34.4 The movement in the defined benefit obligation is as follows:

2016
Present value Fair value of
of obligation plan assets Total
-------------------------- (Rupees in '000) --------------------------

As at 1 January 523,705 (523,705) -

Current service cost 84,176 - 84,176
Interest expense / (income) 48,537 (48,537) -
656,418 (572,242) 84,176
Remeasurements:
- Return on plan assets, excluding amounts included in interest expense - (18,549) (18,549)
- Gain from change in financial assumptions 43,348 - 43,348
- Loss from change in experience adjustments (6,262) - (6,262)
37,086 (18,549) 18,537

Contributions during the year - (102,713) (102,713)

Benefit payments (63,874) 63,874 -
As at 31 December 629,630 (629,630) -

2015
Present value Fair value of
of obligation plan assets Total
-------------------------- (Rupees in '000) --------------------------

As at 1 January 446,315 (446,315) -

Current service cost 71,762 - 71,762
Interest expense / (income) 52,824 (52,824) -
570,901 (499,139) 71,762
Remeasurements:
- Return on plan assets, excluding amounts included in interest income - (6,237) (6,237)
- Gain from change in financial assumptions (4,787) - (4,787)
- Loss from change in experience adjustments 5,294 - 5,294
507 (6,237) (5,730)

Contributions during the year - (66,032) (66,032)

Benefit payments (47,703) 47,703 -
As at 31 December 523,705 (523,705) -

2016 2015
(Rupees in '000)

34.5 Charge for defined benefit plan

Current service cost 84,176 71,762

Interest cost 48,537 52,824
Expected return on plan assets (48,537) (52,824)
84,176 71,762
Soneri Bank Limited | Annual Report 2016

34.6 Composition of plan assets

As on 31 December 2016 As on 31 December 2015

Quoted Non-quoted Total Quoted Non-quoted Total
--------------------------------------------- (Rupees in '000)-------------------------------------------------
Cash and bank balances - 490,544 490,544 - 147,759 147,759
Equity instruments:
- Mutual funds and shares 131,556 - 131,556 93,168 - 93,168
Debt instruments:
- Government - 7,530 7,530 - 282,778 282,778
- Corporates - - - - - -
131,556 498,074 629,630 93,168 430,537 523,705

2016 2015
(Rupees in '000)

34.7 Analysis of present value of defined benefit obligation

Split by vested / non-vested

(i) Vested benefits 543,514 433,304

(ii) Non-vested benefits 86,116 90,401
629,630 523,705

34.8 The plan assets and defined benefit obligations are based in Pakistan.

34.9 Historical information

2016 2015 2014 2013 2012

------------------------------ (Rupees in '000) -------------------------------
Present value of defined benefit obligation 629,630 523,705 446,315 385,636 266,409
Fair value of plan assets (629,630) (523,705) (446,315) (385,636) (234,635)
Surplus / (deficit) - - - - (31,774)

Experience adjustments on plan liabilities 37,086 507 (5,922) 33,187 18,298

Experience adjustments on plan assets (18,549) (6,237) (832) 4,341 6,133
18,537 (5,730) (6,754) 37,528 24,431

34.10 Actual return on plan assets during the year amounted to Rs 76.163 million (2015: Rs 51.452 million).

The Gratuity scheme exposes the entity to the following risks:

Mortality risks
This is the risk that the actual mortality experience is different. The effect depends on the beneficiariesÕ service / age distribution
and the benefit.

Investment risks
This is the risk of the investment underperforming and not being sufficient to meet the liabilities.

Final salary risks

This is the risk that the final salary at the time of cessation of service is greater than what was assumed. Since the benefit is
calculated on the final salary, the benefit amount increases similarly.

Withdrawal risks
This is the risk of higher or lower withdrawal experience than assumed. The final effect could go either way depending on the
beneficiariesÕ service / age distribution and the benefit.
 117

34.11 The sensitivities of the defined benefit obligation to changes in the principal actuarial assumptions are as under:

-------- As at 31 December 2016 -------- -------- As at 31 December 2015 --------

Increase / (decrease) in present Increase / (decrease) in present
Particular Change in value of defined benefit obligation Change in value of defined benefit obligation
assumption assumption
(%) (Rupees in '000) (%) (Rupees in '000)

Discount rate +1% -7.06% (44,422) +1% -6.81% (35,641)

-1% 8.11% 51,085 -1% 7.79% 40,806

Salary increase rate +1% 8.37% 52,678 +1% 8.12% 42,527

-1% -7.40% (46,584) -1% -7.20% (37,725)

The above sensitivities analyses are based on a change in an assumption while holding all other assumptions constant. When
calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions, the same method (present value
of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been
applied when calculating the gratuity liability recognised within the statement of financial position.

34.12 The weighted average duration of the defined benefit obligation is 7.55 years (31 December 2015: 7.26 years).

34.13 Expected maturity analysis of undiscounted defined benefit obligation for the gratuity scheme is as follows:

--------------- As at 31 December 2016 ---------------

Particulars Within a Between 2 Between 4 Between 6
year and 3 years and 5 years and 10 years
---------------------------- (Rupees in '000) ------------------------------

Defined benefit obligation 59,335 200,502 165,691 565,904

34.14 The expected gratuity expense for the next year commencing 1 January 2017 works out to be Rs 97.562 million (2015: Rs 84.176
million).

34.15 The disclosure made in notes 34.1 to 34.14 are based on the information included in the actuarial valuation report of the Bank
as of 31 December 2016.

35. DEFINED CONTRIBUTION PLAN

The Bank operates an approved funded provident fund scheme for all its permanent employees. Equal monthly contributions
are made, both by the Bank and its employees, to the fund at the rate of 8.33 percent of basic salaries of the employees. The
contribution made by the Bank during the year amounted to Rs. 100.376 million (2015: Rs. 94.247 million each). The total number
of employees as at 31 December 2016 eligible under the scheme were 2,370 (2015: 2,379 employees).

36. COMPENSATION OF DIRECTORS AND EXECUTIVES

President /
Chief Executive Officer Directors **Executives
2016 2015 2016 2015 2016 2015
----------------------------------------------- (Rupees in '000) ----------------------------------------------
Fees - - 11,725 9,975 - -
Managerial remuneration 39,272 37,151 - - 687,860 618,761
Charge for defined benefit plan 4,968 4,732 - - 66,910 47,607
Contribution to defined
contribution plan 3,271 3,095 - - 51,939 48,227
Rent and house maintenance 17,672 16,718 - - 269,675 246,049
Utilities 1,144 1,417 - - - -
Medical 752 275 - - 67,429 61,533
Leave encashment and others 1,279 1,053 - - 273,351 362,266
68,358 64,441 11,725 9,975 1,417,164 1,384,443

Number of persons 1 1 7 7 738 626

Soneri Bank Limited | Annual Report 2016

The aggregate amount charged to income as fee to directors and remuneration to other key management personnel was Rs.
11.725 million and Rs. 221.340 million (2015: Rs. 9.975 million and Rs. 197.671 million) respectively.

** Executives mean employees, other than the Chief Executive Officer and directors, whose basic salary exceed five hundred
thousand rupees in a financial year.

In addition to above, all executives and President / Chief Executive Officer of the Bank are also entitled to bonus which is
disclosed in note 28.4 to these financial statements.

In addition, the Bank also provide club membership fee to its President / Chief Executive Officer and certain executives. The
amount charged on account of club membership fee during the year amounted to Rs 0.881 million (2015: Rs 0.681 million).
Furthermore, the President / Chief Executive Officer and certain other executives are also provided with free use of Bank
maintained car in accordance with their entitlements.

37. FAIR VALUE MEASUREMENTS

37.1 Fair value is the amount for which an asset could be exchanged, or a liability settled, between knowledgeable willing parties
in an arm's length transaction.

The fair values of traded investments are based on quoted market prices, except for tradable securities classified as 'held-to-
maturity' which are carried at amortised cost.

The fair values of unquoted equity investments are determined on the basis of break-up values of these investments as per the
latest available audited financial statements.

The fair values of fixed-term loans and deposits, other assets and other liabilities cannot be calculated with sufficient reliability
due to absence of current and active market for such assets and liabilities and reliable data regarding market rates for similar
instruments. The provision for impairment of loans and advances has been calculated in accordance with the Bank's accounting
policy as stated in note 5.4 to these financial statements.

The repricing profile, effective interest rates and maturities are stated in note 42 to these financial statements.

In the opinion of the management, the fair value of the remaining financial assets and liabilities are not significantly different
from their carrying values since these assets and liabilities are either short-term in nature or, in the case of financings and
deposits, are periodically repriced.

2016 2015
37.2 Off-balance sheet financial instruments Book value Fair value Book value Fair value
-------------------------------- (Rupees in '000) --------------------------------

Forward purchase of foreign exchange 18,161,473 18,049,972 43,963,526 43,794,450

Forward sale of foreign exchange 13,793,304 13,688,715 39,749,454 39,608,299

37.3 The table below analyses the financial and non-financial assets carried at fair values, by valuation methods. For financial assets,
the Bank essentially carries its investments in debt and equity securities at fair values. Valuation of investments is carried out
as per guidelines specified by the SBP. In case of non-financial assets, the Bank has adopted revaluation model (as per IAS
16) in respect of land and building.

The different levels have been defined as follows:

- Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1);

- Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as
prices) or indirectly (that is, derived from prices) (level 2); and

- Inputs for the assets or liabilities that are not based on observable market data (i.e. unobservable inputs e.g. estimated future
cash flows) (level 3).
 119

2016
Level 1 Level 2 Level 3 Total
-------------------------------- (Rupees in '000) --------------------------------

RECURRING FAIR VALUE MEASUREMENTS

Financial Assets - on balance sheet

INVESTMENTS - Net
Available-for-sale securities
Market Treasury Bills - 44,147,931 - 44,147,931
Pakistan Investment Bonds - 63,679,488 - 63,679,488
Government of Pakistan Ijarah Sukuks - 2,139,500 - 2,139,500
Sukuk certificates - 1,985,953 - 1,985,953
Term Finance Certificate - 550,230 - 550,230
Fully paid-up ordinary shares
- Listed 3,435,172 - - 3,435,172
Units of mutual funds 222,158 - - 222,158

Financial Assets - off balance sheet

Forward purchase of foreign exchange - 18,049,972 - 18,049,972
Forward sale of foreign exchange - 13,688,715 - 13,688,715

Non - Financial Assets

Operating fixed assets (land and buildings)* - - 2,789,558 2,789,558
3,657,330 144,241,789 2,789,558 150,688,677

2015
Level 1 Level 2 Level 3 Total
-------------------------------- (Rupees in '000) --------------------------------

RECURRING FAIR VALUE MEASUREMENTS

Financial Assets - on balance sheet

INVESTMENTS - Net
Held-for-trading securities
Fully paid-up ordinary shares 54,001 - - 54,001
Pakistan Investment Bonds - 313,892 - 313,892
Market Treasury Bills - - - -
Government of Pakistan - Ijarah Sukuks - 404,520 - 404,520
Term Finance Certificates - 24,935 - 24,935

Available-for-sale securities
Market Treasury Bills - 38,144,282 - 38,144,282
Pakistan Investment Bonds - 61,550,414 - 61,550,414
Government of Pakistan Ijarah Sukuks - 1,618,080 - 1,618,080
Sukuk certificates - 720,537 - 720,537
Fully paid-up ordinary shares
- Listed 2,304,633 - - 2,304,633
Units of mutual funds 366,990 - - 366,990

Financial Assets - off balance sheet

Forward purchase of foreign exchange - 43,794,450 - 43,794,450
Forward sale of foreign exchange - 39,608,299 - 39,608,299

Non - Financial Assets

Operating fixed assets(land and buildings)* - - 3,116,375 3,116,375
2,725,624 186,179,409 3,116,375 192,021,408

* The Bank carries out periodic valuation of these assets for reasons disclosed in note 5.5 (a) to these financial statements.
The Bank's policy is to recognise transfers into and out of the different fair value hierarchy levels at the date the event or change
in circumstances that caused the transfer occurred. There were no transfers between levels 1 and 2 during the year.
(a) Financial instruments in level 1
Financial instruments included in level 1 comprise of investments in listed ordinary shares and units of mutual funds.

(b) Financial instruments in level 2

Financial instruments included in level 2 comprise of GoP Ijarah Sukuks, Pakistan Investment Bonds, Market Treasury Bills,
corporate bonds, term finance and sukuk certificates.

(c) Financial instruments in level 3

Financial instruments included in level 3 comprise of operating fixed assets (land and building) and non-banking assets.
Soneri Bank Limited | Annual Report 2016

Valuation techniques and inputs used in determination of fair values

Item Valuation techniques and input used
Fully paid-up ordinary shares Fair values of investments in listed equity securities are valued on the basis of closing
quoted market prices available at the stock exchange.
Pakistan Investment Bonds / Market Treasury Fair values of Pakistan Investment Bonds and Treasury Bills are derived using the
Bills PKRV rates (Reuters page).
Fair values of GoP Ijarah Sukuks are derived using the PKISRV rates announced by
Government of Pakistan - Ijarah Sukuks the Financial Market Association (FMA) through Reuters. These rates denote an average
of quotes received from eight different pre-defined / approved dealers / brokers.

Investments in debt securities (comprising term finance certificates, bonds, sukuk

certificates and any other security issued by a company or a body corporate for the
purpose of raising funds in the form of redeemable capital) are valued on the basis
of the rates announced by the Mutual Funds Association of Pakistan (MUFAP) in
accordance with the methodology prescribed by the Securities and Exchange
Commission of Pakistan. In the determination of the rates, the MUFAP takes into account
Term Finance, Bonds and Sukuk certificates the holding pattern of these securities and categorises there as traded, thinly traded
and non-traded securities.
Units of mutual funds Fair values of investments in units of mutual funds are determined based on redemption
prices as at the close of the business day.
Operating fixed assets (land and building) Land and buildings are revalued on a periodic basis using professional valuers. The
valuation is based on their assessment of the market value of the assets. The effect
of changes in the unobservable inputs used in the valuations cannot be determined
with uncertainty. Accordingly, a qualitative disclosure of sensitivity has not been
presented in these financial statements.

38 SEGMENT DETAILS WITH RESPECT TO BUSINESS ACTIVITIES

The segment analysis with respect to business activity is as follows:-

Corporate Trading & Retail Total

Sales Banking
-------------------------- (Rupees in '000) --------------------------
31 December 2016
Total income 4,879,491 10,867,195 4,513,959 20,260,645
Total expenses (excluding provisions) 4,667,908 7,856,431 4,634,560 17,158,899
Profit before provisions and taxes 211,583 3,010,764 (120,601) 3,101,746
Provisions 353,245 - (328,838) 24,407
Profit before tax (141,662) 3,010,764 208,237 3,077,339
Segment assets (gross) 84,691,703 123,887,413 78,659,222 287,238,338
Segment non-performing assets 3,096,799 40,159 7,396,746 10,533,704
Segment provision required * 2,260,294 40,159 6,417,179 8,717,632
Segment liabilities 19,974,518 30,507,544 209,749,417 260,231,479
Segment return on net assets (ROA) (%)** (0.17) 2.43 0.29 1.11
Segment cost of funds (%)*** 4.78 5.98 3.92 4.29

Corporate Trading & Retail Total

Sales Banking
-------------------------- (Rupees in '000) --------------------------
31 December 2015
Total income 5,368,991 11,201,920 4,899,204 21,470,115
Total expenses (excluding provisions) 4,904,722 7,373,613 4,566,932 16,845,267
Profit before provisions and taxes 464,269 3,828,307 332,272 4,624,848
Provisions 509,479 - 519,762 1,029,241
Profit before tax (45,210) 3,828,307 (187,490) 3,595,607
Segment assets (gross) 75,885,599 113,209,981 73,145,183 262,240,763
Segment non-performing assets 3,354,382 44,834 8,468,617 11,867,833
Segment provision required * 1,907,049 44,834 6,947,051 8,898,934
Segment liabilities 11,301,969 31,054,753 192,793,166 235,149,887
Segment return on net assets (ROA) (%)** (0.06) 3.38 0.28 1.42
Segment cost of funds (%)*** 4.74 6.49 5.00 5.16

* The provision against each segment represents provision held against advances, investments and other assets.
** Segment ROA= Net Income / (Segment Assets - Segment Provisions) computed on cut-off balances.
*** Segment cost of funds have been computed based on the average balances.

38.1 The above analysis includes allocation of items as per the approved mapping policy of the Bank. The responsibility domain of
deposits between corporate and retail has been redefined in 2016. Prior year figures have been changed for comparison.
 121

39. TRUST ACTIVITIES

The Bank commonly acts as a trustee and in other fiduciary capacity that results in the holding or placing of assets on behalf of
individuals, trusts, retirement benefit plans and other institutions. These are not assets of the Bank and, therefore, are not included in
the Statement of Financial Position. The following is the list of assets held under trust:

Category Type No. of IPS account Face Value

2016 2015 2016 2015
(Rupees in '000)

Asset Management Companies Ijarah Sukuks 3 years - 8 - 191,100

Asset Management Companies Sukuks 3 years 3 - 19,000 -
Asset Management Companies PIB 5 years - 1 - 105,000
Asset Management Companies MTB 12 months - 2 - 950,000
Asset Management Companies MTB 6 months - 2 - 500,000
Employee Funds / NGO's PIB 3 years 5 6 217,500 278,000
Employee Funds / NGO's PIB 5 years - 1 - 13,500
Employee Funds / NGO's PIB 10 years - 1 - 5,000
Employee Funds / NGO's MTB 6 months 3 2 120,000 65,000
Individuals MTB 12 months 2 2 330,000 303,500
Individuals PIB 3 years 2 2 62,000 62,000
Individuals PIB 5 years 1 1 5,000 5,000
Individuals PIB 10 years 3 2 45,400 40,000
Individuals PIB 20 years 1 1 10,000 10,000
Corporate MTB 12 months - 1 - 85,000
Corporate PIB 3 years 1 2 20,000 230,000
Corporate PIB 5 years 1 3 12,000 39,000
Staff retirement funds - related parties PIB 3 to 20 years 4 7 18,000 343,000
Bank's executive - related party MTB 3 months 2 1 10,000 3,500
28 45 868,900 3,228,600

40. RELATED PARTY TRANSACTIONS

The related parties of the Bank comprise related group companies, major shareholders, directors and their close family members
(including their associates), staff retirement funds and key management personnel.

Usual transactions with related parties include deposits, advances, acceptances and provision of other banking services which
are carried out in accordance with agreed terms. Transactions with executives are undertaken at terms in accordance with
employment agreements and services rules and include provision of advances on terms softer than those offered to the customers
of the Bank. Contributions to and accruals in respect of staff retirement benefit plan are made in accordance with the actuarial
valuation / terms of the benefit plan as disclosed in notes 34 and 35. Remuneration to the key management personnel is disclosed
in note 36 to these financial statements. Assets held under trust are disclosed in note 39 to these financial statements.

The details of transactions with related parties during the year other than those which have been disclosed else where in these
financial statements, are as follows:

Key management personnel Other related parties

Bank's Chief Directors & their Close Related Group Major Staff Retirement
Executive / Family Members Companies Shareholders Funds
Executives
2016 2015 2016 2015 2016 2015 2016 2015 2016 2015
-------------------------------------------------------------------------------- (Rupees in '000) --------------------------------------------------------------------------------

Deposits
Balance at beginning of the year 102,216 69,900 880,074 950,311 623,401 492,286 930,734 784,405 307,666 216,346
Placement during the year 444,951 533,898 2,103,422 1,978,938 48,819,248 49,568,894 6,662,800 10,341,929 1,682,409 1,031,283
Transfer in * 71 70 - - - - - - - -
Withdrawal during the year (436,925) (498,774) (2,020,947) (2,049,175) (48,709,090) (49,437,779) (6,649,927) (10,195,600) (1,034,210) (939,963)
Transfer out ** (17) (2,878) - - - - - - - -
Balance at end of the year 110,296 102,216 962,549 880,074 733,559 623,401 943,607 930,734 955,865 307,666

Advances
Balance at beginning of the year 168,716 123,817 37,597 97,155 345,412 294,462 - - - -
Disbursements during the year 22,715 73,665 25,002 20,544 103,662 197,264 - - - -
Transfer in * 8,841 610 - - - - - - - -
Repayments during the year (24,588) (20,148) (57,533) (80,102) (122,830) (146,314) - - - -
Transfer out ** (8,424) (9,228) - - - - - - - -
Balance at end of the year 167,260 168,716 5,066 37,597 326,244 345,412 - - - -

* This represents balances pertaining to parties that became related during the current year.
** This represents balances pertaining to parties that ceased to be related during any part of the current year.
Soneri Bank Limited | Annual Report 2016

Key management personnel Other related parties

Bank's Chief Directors & their Close Related Group Major Staff Retirement
Executive / Family Members Companies Shareholders Funds
Executives
2016 2015 2016 2015 2016 2015 2016 2015 2016 2015
-------------------------------------------------------------------------------- (Rupees in '000) --------------------------------------------------------------------------------

Profit / interest expense on deposits 6,134 7,475 101,329 107,773 55,613 44,970 96,139 89,271 38,739 18,216

Mark-up / return / interest earned 9,278 7,491 4,715 8,239 21,404 37,334 - - - -

Commission / brokerage & bank charges

recovered 55 45 80 47 2,615 918 5 10 1 7

Transaction-related contingent liabilities - 900 - - 1,733 29,623 - - - -

Trade-related contingent liabilities - - - - 64,350 65,509 - - - -

Other administrative expenses - - 8,343 11,529 9,009 8,034 - - - -

2016 2015
(Rupees in '000)

Investments

- NIT Income Fund 100,000 100,000

- NIT Islamic Equity Fund 100,000 100,223
200,000 200,223

Donation / CSR activities 345 10,244

41. CAPITAL ADEQUACY

41.1 Capital Management

The State Bank of Pakistan (SBP) introduced guidelines with respect to disclosure of capital adequacy related information in the
financial statements of banks vide its communication dated February 4, 2014. These guidelines are based on the requirements
of Basel III which were introduced earlier by the SBP in August 2013 for implementation by the banks in Pakistan. The SBP has
specified a transitional period till 2018 for implementation of Basel III guidelines. The SBP vide its BPRD Circular No. 11 of 2014
dated November 5, 2014 revised the disclosure requirements with respect to capital adequacy related information. The disclosures
below have been prepared on the basis of the SBP's circular.

The objective of managing capital is to safeguard the Bank's ability to continue as a going concern, so that it could continue to
provide adequate returns to shareholders by pricing products and services commensurating with the level of risk. It is the policy
of the Bank to maintain adequate capital base so as to maintain investor, creditor and market confidence and to support future
development of the business. The impact of the level of capital on shareholdersÕ return is also recognised and the Bank recognises
the need to maintain a balance between the higher returns that might be possible with greater gearing and the advantages and
security afforded by a sound capital position.

Goals of managing capital

The goals of capital management are as follows:

- To be an appropriately capitalised institution, as defined by regulatory authorities and in accordance with risk profile;

- Maintain strong ratings and protect the Bank against unexpected events;

- Ensure availability of adequate capital (including the quantum) at a reasonable cost so as to enable the Bank to expand;
and achieve overall low cost of capital with appropriate mix of capital elements.

Statutory minimum capital requirement and management of capital

The State Bank of Pakistan requires all banks to have minimum paid up capital (net of losses) of Rs. 10 billion. The paid up capital
of the Bank for the year ended 31 December 2016 stood at Rs. 11,024.636 million. In addition banks are also required to maintain
a minimum Capital Adequacy Ratio (CAR) of 10.65 percent of the risk weighted exposure of the Bank as at 31 December 2016.
The BankÕs CAR as at 31 December 2016 was approximately 14.12 percent of its risk weighted exposure.

The capital of the Bank is managed keeping in view the minimum ÒCapital Adequacy RatioÓ required by the SBP through BPRD Circular
No. 06 dated 15 August 2013. The adequacy of the capital is measured with reference to the risk-weighted assets of the Bank.
 123

The required capital adequacy ratio is achieved by the Bank through improvement in the asset quality, ensuring better recovery
management and striking balance with low risk assets. Banking operations are categorised as either trading book or banking
book and risk-weighted assets are determined according to specified requirements of the State Bank of Pakistan that seek to
reflect the varying levels of risk attached to assets and off-balance sheet exposures. The total risk-weighted exposures comprise
the credit risk, market risk and operational risk.

For the purpose of calculating capital under the capital adequacy framework, the capital of the bank is classified in two tiers as
per the Basel III framework. The total regulatory capital consists of the sum of Tier 1 Capital and Tier 2 Capital. Tier 1 Capital
includes Common Equity Tier 1 (CET1) and Additional Tier 1 Capital (AT1). CET1 of the Bank includes the sum of fully paid up
capital, balance in share premium, reserves for issuance of bonus share, general / statutory reserves as disclosed in the balance
sheet, un-appropriated profit, less regulatory adjustments. The Bank's common shares are perpetual in nature and have the last
subordination in case of liquidation.

AT1 capital includes instruments issued by the banks that meet the qualifying criteria for AT1, share premium resulting from the
issuance of AT1 instruments less regulatory adjustments applicable on AT1 Capital. The Bank has not allocated any AT1 capital.

Tier 2 Capital includes Subordinated debt / Instruments, share premium resulting from the issue of instruments included in Tier
2, Revaluation Reserves (net of deficits, if any), General Provisions or General Reserves for loan losses, Foreign Exchange
Translation Reserves, Undisclosed Reserves less regulatory adjustments applicable on Tier-2 capital. The Bank Tier-2 capital
comprises subordinated Term Finance Certificates (TFCs') of Rs 2.998 billion, revaluation reserve (upto a maximum of 78% net
of taxes of the balance in the related revaluation reserve) and general provisions for loan losses.

The calculation of capital adequacy enables the Bank to assess its long-term soundness. As the Bank carries on the business
on a wide area network basis, it is critical that it is able to continuously monitor the exposure across the entire organisation and
aggregate the risks so as to take an integrated approach / view.

41.2 Capital Adequacy Ratio (CAR) disclosure

2016 2015
Particulars Amount
------------ (Rupees in '000) ------------
Common Equity Tier 1 capital (CET1): Instruments and reserves
Fully paid-up capital / capital deposited with the SBP 11,024,636 11,024,636
Balance in share premium account - 1,405
Reserve for issue of bonus shares - -
Discount on issue of shares - (1,001,361)
General / Statutory Reserves 1,423,829 1,048,060
Gain / (Losses) on derivatives held as Cash Flow Hedge - -
Unappropriated profits 3,496,305 4,263,217
Minority Interests arising from CET1 capital instruments issued
to third party by consolidated bank subsidiaries (amount allowed in CET1
capital of the consolidation group) - -
CET 1 before Regulatory Adjustments 15,944,770 15,335,957
Total regulatory adjustments applied to CET1 (Note 41.2.1) (615,993) (303,494)
Common Equity Tier 1 15,328,777 15,032,463

Additional Tier 1 (AT 1) Capital

Qualifying Additional Tier-1 capital instruments plus any related share premium - -
of which:
- classified as equity - -
- classified as liabilities - -
Additional Tier-1 capital instruments issued by consolidated subsidiaries - -
and held by third parties
- of which: instrument issued by subsidiaries subject to phase out - -

AT1 before regulatory adjustments - -

Total of Regulatory Adjustment applied to AT1 capital (Note 41.2.2) - -
Additional Tier 1 capital after regulatory adjustments - -
Tier 1 Capital (CET1 + admissible AT1) 15,328,777 15,032,463
Soneri Bank Limited | Annual Report 2016

2016 2015
Particulars Amount
------------ (Rupees in '000) ------------

Tier 2 Capital
Qualifying Tier 2 capital instruments under Basel III plus any related share premium - -
Capital instruments subject to phase out arrangement issued 2,998,800 3,000,000
Tier 2 capital instruments issued to third parties by consolidated subsidiaries - -
- of which: instruments issued by subsidiaries subject to phase out - -
General Provisions or general reserves for loan losses-up to maximum
of 1.25% of Credit Risk Weighted Assets 51,340 46,224
Revaluation Reserves (net of taxes)
of which:
- Revaluation reserves on fixed assets 722,768 748,555
- Unrealized gains / losses on AFS 1,105,908 1,164,955
Foreign Exchange Translation Reserves - -
Undisclosed/Other Reserves (if any) - -
T2 before regulatory adjustments 4,878,816 4,959,734
Total regulatory adjustment applied to T2 capital (Note 41.2.3) (208,871) (156,469)
Tier 2 capital (T2) after regulatory adjustments 4,669,945 4,803,265
Tier 2 capital recognized for capital adequacy 4,669,945 4,803,265
Portion of Additional Tier 1 capital recognized in Tier 2 capital - -
Total Tier 2 capital admissible for capital adequacy 4,669,945 4,803,265
TOTAL CAPITAL (T1 + admissible T2) 19,998,722 19,835,728

Total Risk Weighted Assets (RWA) {for details refer Note 41.3.4} 141,609,046 128,904,908

Capital Ratios and buffers (in percentage of risk weighted assets)

CET1 to total RWA 10.82% 11.66%
Tier-1 capital to total RWA 10.82% 11.66%
Total capital to total RWA 14.12% 15.39%
Bank specific buffer requirement (minimum CET1 requirement plus capital - -
conservation buffer plus any other buffer requirement) of which:
- capital conservation buffer requirement -- -
- countercyclical buffer requirement -- -
- D-SIB or G-SIB buffer requirement -- -
CET1 available to meet buffers (as a percentage of risk weighted assets) 4.82% 5.66%

National minimum capital requirements prescribed by SBP

CET1 minimum ratio 6.00% 6.00%
Tier 1 minimum ratio 7.50% 7.50%
Total capital minimum ratio 10.65% 10.25%
 125

2016 2015
Pre-Basel III Pre-Basel III
Particulars Amount treatment* Amount treatment*
-------------------- (Rupees in '000) -------------------

41.2.1 Common Equity Tier 1 capital: Regulatory adjustments

Goodwill (net of related deferred tax liability) - - - -

All other intangibles (net of any associated deferred tax liability) 403,363 - 72,651 -
Shortfall of provisions against classified assets** - - - -
Deferred tax assets that rely on future profitability excluding those -
arising from temporary differences (net of related tax liability) - - - -
Defined-benefit pension fund net assets - - - -
Reciprocal cross holdings in CET1 capital instruments 117,980 - 230,843 -
Cash flow hedge reserve - - - -
Investment in own shares / CET1 instruments - - - -
Securitization gain on sale - - - -
Capital shortfall of regulated subsidiaries - - - -
Deficit on account of revaluation from bank's holdings of property / AFS - - - -
Investments in the capital instruments of banking, financial and insurance
entities that are outside the scope of regulatory consolidation, where the
bank does not own more than 10% of the issued share capital (amount
above 10% threshold) 94,650 - - -
Significant investments in the common stocks of banking, financial and
insurance entities that are outside the scope of regulatory consolidation
(amount above 10% threshold) - - - -
Deferred Tax Assets arising from temporary differences (amount
above 10% threshold, net of related tax liability) - - - -
Amount exceeding 15% threshold of which:
- significant investments in the common stocks of financial entities - - - -
- deferred tax assets arising from temporary differences - - - -
National specific regulatory adjustments applied to CET1 capital - - - -
Investment in TFCs of other banks exceeding the prescribed limit - - - -
Any other deduction specified by SBP - - - -
Regulatory adjustment applied to CET1 due to insufficient AT1 and
Tier 2 to cover deductions - - - -
Total regulatory adjustments applied to CET1 615,993 - 303,494 -
Soneri Bank Limited | Annual Report 2016

2016 2015
Pre-Basel III Pre-Basel III
Particulars Amount treatment* Amount treatment*
-------------------- (Rupees in '000) -------------------

41.2.2 Additional Tier 1 Capital: regulatory adjustments

Investment in mutual funds exceeding the prescribed limit (SBP specific - - - -

adjustment)
Investment in own AT1 capital instruments - - - -
Reciprocal cross holdings in Additional Tier 1 capital instruments - - - -

Investments in the capital instruments of banking, financial and insurance

entities that are outside the scope of regulatory consolidation, where
the bank does not own more than 10% of the issued share capital
(amount above 10% threshold) - - - -
Significant investments in the capital instruments issued by banking,
financial and insurance entities that are outside the scope of
regulatory consolidation - - - -
Portion of deduction applied 50:50 to core capital and supplementary
capital based on pre-Basel III treatment which, during transitional
period, remain subject to deduction from tier-1 capital - - - -
Regulatory adjustments applied to Additional Tier 1 due to insufficient
Tier 2 to cover deductions - - - -
Total of Regulatory Adjustment applied to AT1 capital - - - -

* This column highlights items that are still subject to Pre Basel III treatment during the transitional period
** State Bank of Pakistan has granted relaxation in respect of provision held against a customer as disclosed in note 10.6. State
Bank of Pakistan has allowed the bank to avail this relaxation in calculation of capital adequacy ratio.

2016 2015
Pre-Basel III Pre-Basel III
Particulars Amount treatment* Amount treatment*
-------------------- (Rupees in '000) -------------------

41.2.3 Tier 2 Capital: regulatory adjustments

Portion of deduction applied 50:50 to core capital and supplementary

capital based on pre-Basel III treatment which, during transitional
period, remain subject to deduction from tier-2 capital - - - -
Reciprocal cross holdings in Tier 2 instruments - - 156,469 -
Investment in own Tier 2 capital instrument - - - -
Investments in the capital instruments of banking, financial and insurance
entities that are outside the scope of regulatory consolidation, where
the bank does not own more than 10% of the issued share capital
(amount above 10% threshold) 208,871 - - -
Significant investments in the capital instruments issued by banking,
financial and insurance entities that are outside the scope of
regulatory consolidation - - - -
Amount of Regulatory Adjustment applied to T2 capital 208,871 - 156,469 -

* This column highlights items that are still subject to Pre Basel III treatment during the transitional period
 127

2016 2015
(Rupees in '000)

41.2.4 Risk Weighted Assets subject to pre-Basel III treatment

Risk weighted assets in respect of deduction items (which during the transitional - -
period will be risk weighted subject to Pre-Basel III Treatment)

of which: Deferred tax assets - -

of which: Defined-benefit pension fund net assets - -
of which: Recognized portion of investment in capital of banking, financial and
insurance entities where holding is less than 10% of the issued common
share capital of the entity - -
of which: Recognized portion of investment in capital of banking, financial and
insurance entities where holding is more than 10% of the issued common
share capital of the entity - -

Amounts below the thresholds for deduction (before risk weighting)

Non-significant investments in the capital of other financial entities - -
Significant investments in the common stock of financial entities - -
Deferred tax assets arising from temporary differences (net of related tax liability) - -

Applicable caps on the inclusion of provisions in Tier 2

Provisions eligible for inclusion in Tier 2 in respect of exposures subject
to standardized approach (prior to application of cap) - -
Cap on inclusion of provisions in Tier 2 under standardized approach - -
Provisions eligible for inclusion in Tier 2 in respect of exposures subject
to internal ratings-based approach (prior to application of cap) - -
Cap for inclusion of provisions in Tier 2 under internal ratings-based approach - -

41.2.5 Leverage ratio

According to Basel III instructions issued by State Bank of Pakistan (BPRD circular # 06 dated August 15, 2013), it is mandatory
for all the banks to calculate and report the Leverage Ratio on a quarterly basis with the minimum benchmark of 3%.

The reason for calculating leverage ratio is to avoid excessive on- and off-balance sheet leverage in the banking system. A simple,
transparent and non-risk based ratio has been introduced with the following objectives:

- Constrain the build-up of leverage in the banking sector which can damage the broader financial system and the economy; and

- Reinforce the risk based requirements with an easy to understand and a non-risk based measure.

Particulars 2016 2015

-------- (Rupees in '000) ---------
On balance sheet exposures
1 On-balance sheet items (excluding derivatives but including collateral) 278,520,706 253,341,829
2 Derivatives (Forward contracts and currency swaps) 114,609 235,143
3 Total On balance sheet exposures 278,635,315 253,576,972

Off balance sheet exposures

4 Off-balance sheet items (excluding derivatives) 58,948,414 40,230,763
5 Commitment in respect of derivatives (derivatives having negative fair value are also included) 308,766 824,649
6 Total Off balance sheet exposures 59,257,180 41,055,412

Capital and total exposures

7 Tier 1 capital (Note 41.2) 15,328,777 15,032,463
8 Total exposures (sum of lines 3 and 6) 337,892,495 294,632,384

Basel III leverage ratio 4.54% 5.10%

The current year's leverage ratio is 4.54% (2015: 5.10%) whereas total tier 1 capital and total exposures are Rs 15,328.777 million and Rs
337,892.495 million respectively.
Soneri Bank Limited | Annual Report 2016

41.3 Capital Structure Reconciliation

41.3.1 Reconciliation of each financial statement line item to item under regulatory scope of reporting - Step 1

Balance sheet Under

as in regulatory
Particulars published scope of
financial reporting
statements
------------ (Rupees in '000) ------------
Assets
Cash and balances with treasury banks 18,278,840 18,278,840
Balances with other banks 822,689 822,689
Lending to financial and other institutions 5,536,577 5,536,577
Investments 117,883,960 117,883,960
Advances 125,305,765 125,305,765
Operating fixed assets 5,138,424 5,138,424
Deferred tax assets - -
Other assets 5,554,451 5,554,451
Total assets 278,520,706 278,520,706

Liabilities and equity

Bills payable 3,254,243 3,254,243
Borrowings 38,905,078 38,905,078
Deposits and other accounts 210,839,646 210,839,646
Sub-ordinated loans 2,998,800 2,998,800
Liabilities against assets subject to finance lease - -
Deferred tax liabilities 1,137,530 1,137,530
Other liabilities 3,096,182 3,096,182
Total liabilities 260,231,479 260,231,479

Share capital 11,024,636 11,024,636

Reserves 1,423,829 1,423,829
Unappropriated profit 3,496,305 3,496,305
Surplus on revaluation of assets - net of tax 2,344,457 2,344,457
Total liabilities and equity 278,520,706 278,520,706

41.3.2 Reconciliation of balance sheet to eligible regulatory capital - Step 2

Balance sheet Under
as in regulatory
Particulars Reference published scope of
financial reporting
statements
------------ (Rupees in '000) ------------
Assets
Cash and balances with treasury banks 18,278,840 18,278,840
Balances with other banks 822,689 822,689
Lending to financial and other institutions 5,536,577 5,536,577

Investments 117,883,960 117,883,960

of which:
- non-significant capital investments in capital of other financial
institutions exceeding 10% threshold a 303,521 303,521
- significant capital investments in financial sector entities
exceeding regulatory threshold b - -
- mutual Funds exceeding regulatory threshold c - -
- reciprocal crossholding of capital instrument d 117,980 117,980
- others e - -
Advances 125,305,765 125,305,765
- shortfall in provisions / excess of total EL amount
over eligible provisions under IRB f - -
- general provisions reflected in Tier 2 capital g - -
Operating fixed assets 5,138,424 5,138,424
- of which: Intangibles k 403,363 403,363

Deferred tax assets - -

of which:
- DTAs that rely on future profitability excluding those arising from
temporary differences h - -
- DTAs arising from temporary differences exceeding regulatory threshold i - -
Other assets 5,554,451 5,554,451
of which:
- goodwill j - -
- defined-benefit pension fund net assets l - -
Total assets 278,520,706 278,520,706
 129

Balance sheet Under

as in regulatory
Particulars Reference published scope of
financial reporting
statements
------------ (Rupees in '000) ------------

Liabilities and equity

Bills payable 3,254,243 3,254,243
Due from financial institutions 38,905,078 38,905,078
Deposits and other accounts 210,839,646 210,839,646
Sub-ordinated loans of which: 2,998,800 2,998,800
- eligible for inclusion in AT1 m - -
- eligible for inclusion in Tier 2 n 2,998,800 2,998,800
Liabilities against assets subject to finance lease - -
Deferred tax liabilities of which: 1,137,530 1,137,530
- DTLs related to goodwill o - -
- DTLs related to intangible assets p - -
- DTLs related to defined pension fund net assets q - -
- other deferred tax liabilities r 1,137,530 1,137,530
Other liabilities 3,096,182 3,096,182
Total liabilities 260,231,479 260,231,479

Share capital 11,024,636 11,024,636

- of which: amount eligible for CET1 s 11,024,636 11,024,636
- of which: amount eligible for AT1 t - -
Reserves of which: 1,423,829 1,423,829
- portion eligible for inclusion in CET1 - Statutory reserve u 1,423,829 1,423,829
- portion eligible for inclusion in CET1 - General reserve - -
- portion eligible for inclusion in Tier 2 General reserve v - -

Discount on issue of shares - -

Unappropriated profit w 3,496,305 3,496,305

Minority Interest of which: - -
- portion eligible for inclusion in CET1 x - -
- portion eligible for inclusion in AT1 y - -
- portion eligible for inclusion in Tier 2 z - -
Surplus on revaluation of assets of which: 2,344,457 2,344,457
- Revaluation reserves on Fixed Assets 926,626 926,626
- Unrealized Gains/Losses on AFS aa 1,417,831 1,417,831
- In case of Deficit on revaluation (deduction from CET1) ab - -
Total liabilities and equity 278,520,706 278,520,706

41.3.3 Basel III Disclosure (with added column) - Step 3

Source based Component of

on reference regulatory
Particulars number from capital reported
step 2 by bank
(Rupees in '000)
Common Equity Tier 1 capital (CET1): Instruments and reserves
1 Fully Paid-up Capital (s) 11,024,636
2 Balance in share premium account -
3 Discount on issue of shares -
4 Reserve for issue of bonus shares -
5 General / Statutory Reserves (u) 1,423,829
6 Gain / (Losses) on derivatives held as Cash Flow Hedge -
7 Unappropriated / unremitted profits (w) 3,496,305
8 Minority Interests arising from CET1 capital instruments issued to third
party by consolidated bank subsidiaries (amount allowed in CET1
capital of the consolidation group) (x) -
9 CET 1 before Regulatory Adjustments 15,944,770

Common Equity Tier 1 capital: Regulatory adjustments

10 Goodwill (net of related deferred tax liability) (j) - (s) -
11 All other intangibles (net of any associated deferred tax liability) (k) - (p) 403,363
12 Shortfall of provisions against classified assets (f) -
13 Deferred tax assets that rely on future profitability excluding those arising -
from temporary differences (net of related tax liability) (h) - (r) * x% -
14 Defined-benefit pension fund net assets (l) - (q) * x% -
15 Reciprocal cross holdings in CET1 capital instruments (d) 117,980
16 Cash flow hedge reserve -
Soneri Bank Limited | Annual Report 2016

Source based Component of

on reference regulatory
Particulars number from capital reported
step 2 by bank
(Rupees in '000)
17 Investment in own shares / CET1 instruments -
18 Securitization gain on sale -
19 Capital shortfall of regulated subsidiaries -
20 Deficit on account of revaluation from bank's holdings of property / AFS (ab) -
21 Investments in the capital instruments of banking, financial and insurance
entities that are outside the scope of regulatory consolidation,
where the bank does not own more than 10% of the issued share
capital (amount above 10% threshold) (a) - (ac) - (ae) 94,650
22 Significant investments in the capital instruments issued by banking,
financial and insurance entities that are outside the scope of regulatory
consolidation (amount above 10% threshold) (b) - (ad) - (af) -
23 Deferred Tax Assets arising from temporary differences (amount above
10% threshold, net of related tax liability) (i) -
24 Amount exceeding 15% threshold of which: -
- significant investments in the common stocks of financial entities
- deferred tax assets arising from temporary differences -
25 National specific regulatory adjustments applied to CET1 capital -
26 Investment in TFCs of other banks exceeding the prescribed limit -
27 Any other deduction specified by SBP (mention details) -
28 Regulatory adjustment applied to CET1 due to insufficient AT1 and -
Tier 2 to cover deductions
29 Total regulatory adjustments applied to CET1 615,993
Common Equity Tier 1 15,328,777
Additional Tier 1 (AT 1) Capital
30 Qualifying Additional Tier-1 instruments plus any related share premium -
of which:
31 - Classified as equity (t) -
32 - Classified as liabilities (m) -
33 Additional Tier-1 capital instruments issued by consolidated subsidiaries
and held by third parties (y) -
34 - of which: instrument issued by subsidiaries subject to phase out -
35 AT1 before regulatory adjustments

Additional Tier 1 Capital: regulatory adjustments

36 Investment in mutual funds exceeding the prescribed limit (SBP specific adjustment) -
37 Investment in own AT1 capital instruments -
38 Reciprocal cross holdings in Additional Tier 1 capital instruments -
39 Investments in the capital instruments of banking, financial and insurance
entities that are outside the scope of regulatory consolidation,
where the bank does not own more than 10% of the issued share capital
(amount above 10% threshold) (ac) -
40 Significant investments in the capital instruments issued by banking,
financial and insurance entities that are outside the scope of
regulatory consolidation (ad) -
41 Portion of deduction applied 50:50 to core capital and supplementary
capital based on pre-Basel III treatment which, during transitional
period, remain subject to deduction from tier-1 capital -
42 Regulatory adjustments applied to Additional Tier 1 due to insufficient
Tier 2 to cover deductions -
 131

Source based Component of

on reference regulatory
Particulars number from capital reported
step 2 by bank
(Rupees in '000)
43 Total of Regulatory Adjustment applied to AT1 capital -
44 Additional Tier 1 capital -
45 Additional Tier 1 capital recognised for capital adequacy -

Tier 1 Capital (CET1 + admissible AT1) 15,328,777

Tier 2 Capital
46 Qualifying Tier 2 capital instruments under Basel III -
47 Capital instruments subject to phase out arrangement from Tier 2 (n) 2,998,800
48 Tier 2 capital instruments issued to third party by consolidated subsidiaries (z) -
- of which: instruments issued by subsidiaries subject to phase out -
49 General Provisions or general reserves for loan losses-up to maximum
of 1.25% of Credit Risk Weighted Assets (g) 51,340
50 Revaluation Reserves eligible for Tier 2 of which:
51 - portion pertaining to Fixed Asset 722,768
52 - portion pertaining to AFS securities 56% of (aa) 1,105,908
53 Foreign Exchange Translation Reserves (v) -
54 Undisclosed / Other Reserves (if any) -
55 T2 before regulatory adjustments 4,878,816

Tier 2 Capital: regulatory adjustments

56 Portion of deduction applied 50:50 to core capital and supplementary
capital based on pre-Basel III treatment which, during transitional period,
remain subject to deduction from tier-2 capital
57 Reciprocal cross holdings in Tier 2 instruments -
58 Investment in own Tier 2 capital instrument -
59 Investments in the capital instruments of banking, financial and insurance
entities that are outside the scope of regulatory consolidation,
where the bank does not own more than 10% of the issued share capital
(amount above 10% threshold) (ae) 208,871
60 Significant investments in the capital instruments issued by banking,
financial and insurance entities that are outside the scope of
regulatory consolidation (af) -
61 Amount of Regulatory Adjustment applied to T2 capital 208,871
62 Tier 2 capital (T2) 4,669,945
63 Tier 2 capital recognised for capital adequacy 4,669,945
64 Excess Additional Tier 1 capital recognised in Tier 2 capital -
65 Total Tier 2 capital admissible for capital adequacy 4,669,945

TOTAL CAPITAL (T1 + admissible T2) 19,998,722

Soneri Bank Limited | Annual Report 2016

41.3.4 Risk-weighted exposures

Note 2016 2015

Capital Risk adjus- Capital Risk adjus-
Credit Risk Requirement ted value Requirement ted value
-------- (Rupees in '000) -------- -------- (Rupees in '000)--------

Portfolios subject to standardised approach

(Comprehensive Approach)

On-balance sheet items:

Cash and cash equivalent - - - -
Sovereign and central banks 3,997 39,972 1,759 17,592
Public sector entities (PSEs) 105,351 1,053,514 4,631 46,305
Banks and securities firms 286,309 2,863,094 160,647 1,606,473
Corporate portfolio 41.4 7,438,417 74,384,170 7,163,241 71,632,408
Retail non mortgages 41.4 924,066 9,240,663 1,008,687 10,086,867
Mortgages Ð Residential 103,854 1,038,542 88,024 880,241
Past due loans 254,519 2,545,187 365,590 3,655,900
Operating fixed assets 473,506 4,735,061 488,408 4,884,081
Other assets 95,594 955,939 94,413 944,131
9,685,613 96,856,142 9,375,400 93,753,998
Off balance sheet items:

Non-market related:-
Direct credit substitutes 41.5 1,268,680 12,686,804 1,002,450 10,024,503
Performance-related contingencies 41.5 425,151 4,251,507 225,951 2,259,505
Trade-related contingencies 41.5 563,732 5,637,316 342,110 3,421,103
2,257,563 22,575,627 1,570,511 15,705,111
Market related:-
Outstanding interest rate contracts - - - -
Outstanding foreign exchange contracts 41.6 16,406 164,056 27,272 272,721
16,406 164,056 27,272 272,721
Equity Exposure Risk in the Banking Book
Listed equity investments held in banking book 443,782 4,437,820 242,772 2,427,715
Unlisted equity investments held in banking book 1,665 16,650 1,665 16,650
Recognised portion of significant investment - - - -
445,447 4,454,470 244,437 2,444,365
Total credit risk exposures 12,405,029 124,050,295 11,217,620 112,176,195

Market risk

Capital Requirement for portfolios subject to

Standardized Approach

Interest rate risk 11,940 149,250 34,122 426,525

Equity position risk 35,545 444,313 59,359 741,988
Foreign exchange risk 14,926 186,575 8,784 109,800
Position in options - - - -
Total market risk exposures 62,411 780,138 102,265 1,278,313

Operational risk

Capital requirement for operational risks 1,342,289 16,778,613 1,236,032 15,450,400

TOTAL 13,809,729 141,609,046 12,555,917 128,904,908

Capital Adequacy Ratio Required Actual Required Actual

31 December 2016 31 December 2015

CET1 to total RWA 6.00% 10.82% 6.00% 11.66%

Tier-1 capital to total RWA 7.50% 10.82% 7.50% 11.66%
Total capital to total RWA 10.65% 14.12% 10.25% 15.39%
 133

41.4 Cash margin and eligible securities amounting to Rs. 33,769.638 million (2015: Rs. 22,965.012 million) have been deducted
from gross advances using comprehensive approach to credit risk mitigation under Basel III. Advances are not net off with
general provision amounting to Rs.51.340 million (2015: 46 million) which is reported separately in Tier II (supplementary) capital
as per BSD circular letter number 03 dated 20 May 2006.

41.5 Cash margin and eligible securities amounting to Rs. 727.996 million (2015: Rs. 894.745 million) have been deducted from off-
balance sheet items.

41.6 Contracts having original maturities of 14 days or less have been excluded.

41.7 Main Features of Regulatory Capital Instruments

Main Features Common Shares Instrument 1
1 Issuer Soneri Bank Ltd Soneri Bank Ltd
2 Unique identifier (e.g. KSE Symbol or Bloomberg identifier etc.) SNBL SNBL - TFCs
3 Governing law(s) of the instrument Laws of Islamic Republic of Pakistan Laws of Islamic Republic of Pakistan
4 Regulatory treatment
4.1 Transitional Basel III rules Common Equity Tier 1 Tier 2
4.2 Post-transitional Basel III rules Common Equity Tier 1 Tier 2
4.3 Eligible at solo/ group/ group & solo Solo Solo
4.4 Instrument type Ordinary Shares Subordinated Debt
5 Amount recognized in regulatory capital (Currency in PKR thousands, as of reporting date) Rs 11,024,636 Rs 2,998,800
6 Par value of instrument Rs.10 Rs.5,000
7 Accounting classification Shareholders' Equity Liability
8 Original date of issuance Various From 1992 July 2015
9 Perpetual or dated Perpetual Dated
9.1 Original maturity date N/A July 2023
10 Issuer call subject to prior supervisory approval No Yes, after 5 years from last day of public subscription
10.1 Optional call date, contingent call dates and redemption amount N/A N/A
10.2 Subsequent call dates, if applicable N/A N/A
11 Coupons / dividends
11.1 Fixed or floating dividend/ coupon N/A Floating
11.2 coupon rate and any related index/ benchmark N/A Floating rate at 6 month KIBOR plus 1.35%
11.3 Existence of a dividend stopper No Yes
11.4 Fully discretionary, partially discretionary or mandatory Fully Discretionary Mandatory
11.5 Existence of step up or other incentive to redeem No No
11.6 Non-cumulative or cumulative Non-cumulative Cumulative
12 Convertible or non-convertible Non-convertible Convertible in case of PONV
12.1 If convertible, conversion trigger (s) N/A "At the option of supervisor it can be converted
into common equity upon occurrence of certain trigger events , called point of non viability
(PONV). The PONV is the earlier of;
1. A decision made by SBP that a conversion or
temporary/ permanent write off is necessary
without which the bank would become non viable.
2. the decision to make a public sector injection
of capital, or equivalent support, without which
the bank would have become non viable, as
determined by SBP."
12.2 If convertible, fully or partially N/A May convert fully or partially in case of PONV
12.3 If convertible, conversion rate N/A To be determined in the case of trigger event
12.4 If convertible, mandatory or optional conversion N/A Convertible at the discretion of SBP in case of PONV
12.5 If convertible, specify instrument type convertible into N/A Common Equity Tier 1
12.6 If convertible, specify issuer of instrument it converts into N/A SNBL (Ordinary shares)
13 Write-down feature No Yes
14 If write-down, write-down trigger(s) N/A "At the option of supervisor it can be either written
off upon occurrence of a certain trigger events,
called point of non viability(PONV). The PONV
is the earlier of:
1. A decision made by SBP that a conversion or
temporary/ permanent write off is necessary
without which the Bank would become non viable.
2. the decision to make a public sector injection of
capital, or equivalent support, without which the
Bank would have become non viable, as determined
by SBP."
15 If write-down, full or partial N/A May be written-down fully or partially;
16 If write-down, permanent or temporary N/A N/A
17 If temporary write-down, description of write-up mechanism N/A As may be determined by reversal of trigger
events and subject to regulatorÕs approval
18 Position in subordination hierarchy in liquidation (specify instrument type
immediately senior to instrument N/A Senior to ordinary shareholders
19 Non-compliant transitioned features No No
20 If yes, specify non-compliant features N/A N/A

42. RISK MANAGEMENT

The primary goal of risk management is to identify, assess and monitor risks inherent in the activities of the Bank and take adequate
measures to manage and control these risks on a timely basis. This will help in achieving sustainable business growth, financial and
non-financial targets with better protection and soundness. The BankÕs aim is to achieve an appropriate balance between risk and
return and to minimise potential adverse effects on the BankÕs financial performance.
Soneri Bank Limited | Annual Report 2016

The Bank's risk management framework encompasses the culture, processes and structure and is directed towards the effective
management of potential opportunities and threats to the Bank. The prime objective of the Bank's risk management strategy is to
abandon the traditional approach of 'managing risk by silos' and to put in place integrated risk and economic capital management
capabilities that will enable the Bank to achieve integrated view of risks across its various business operations and to gain strategic
advantage from its risk management capabilities.

The Board of Directors (BOD) keeps an oversight on the Bank-wide risk management framework and approves the risk management
strategy and policies of the Bank. The Board Risk Management Committee (BRMC), ensures that the Bank maintains a complete and
prudent integrated risk management framework at all times and ensures that the risk exposures are maintained within acceptable
levels. Moreover, the Credit Risk Management Committee (CRMC), Market Risk Management Committee (MRMC) and the Operational
Risk Management Committee (ORMC) and all other senior management committees are mainly responsible for ensuring the compliance
of the BOD approved risk management policy and for monitoring and managing risk levels in relevant areas of the Bank.

The Bank's risk management policy, formulated on regulatory guidelines, covers all major types of risk that the Bank is exposed to.
The policy is laid down on key risk management principles which includes management oversight and control culture, risk recognition
and assessment, control activities and segregation of duties, information and communication and monitoring activities and correcting
deficiencies.

Board of Directors

Approves risk management strategy

and policy

Board Audit Committee Board Risk Management Committee Board Credit Committee ShariÕah Board
Considers the adequacy & effectiveness of Internal Control Review risk Profile
Frame work Review RM strategies, policies, systems & procedures
Review lending policies, The ShariÕah Board ensure that all the
Ensures Credit, Market, Liquidity, Operational & other
procedures & establishes procedure manuals product programs
risk, are maintained at an acceptable level
C strategy to strengthen & structure, process flows, related
monitor the loan portfolio. agreements marketing advertisement, sales
illustrations and brochures are in conformity
with the rules and principles of ShariÕah

Assessment & Monitoring President & CEO Asset Liability Committee (ALCO)

Credit Risk Mangement Committee Monitor Liquidity Risk,

Develop strategies to manage Liquidity needs
Ensure implementation of CRM policy/ in view of current
strategy, economic political situation
Ensure compliance with regulatory Regulate structure / composition of assets &
requirements & internal policies and liabilities and decide
compliance with limits with respect pricing of loans & advances.
to Credit
Review and assess the credit portfolio
structure; Operation Risk Management Committee
Analyse market conditions and
economic sectors in which the Bank
has exposure or is willing to take Review Operation Risk Management
exposure Framework and ensure its compliance:
Review and analyse NPLs portfolio Assess the effectiveness and efficiency of
Ensure adequacy of credit assessment internal controls inviorment of the bank:
and monitoring mechanism Monitor Bank-wide operational risk: Ensure
Assess adequacy of credit risk rating/ adequacy of capital with respect to required
scoring systems of the Bank operational risk charge:
To conduct risk and control assessment
exercise for processes/products/systems.
Market Risk Management Committee
Monitor and ensure compliance with
regulatory and internal policies covering BCP Steering Committee
foreign exchange risk, interest rate risk,
equity price risk, and liquidity risk, Establish business continuity plan and ensure
Review the profitability objectives and its effective implementation:
investment strategies Ensure the protection and availability of
Discuss and/or devise strategies to critical business processes and supporting
mitigate risks and ensure optimum technology in case of crises:
level of risk-return relationship is maintained Sponsor the execution and maintenance of
risk assessment, business impact analysis,
crises recovery plans and training programs:
Investment Committee Ensure the adequacy of plans:
Ensure that alternate sites and / or spaces
Manage Capital Market risk are available for each critical process
Chief Operating Officer Ensure that proper training sessions are
conducted.

Risk Management Division

Develop risk framework/policies & procedures for management
of Credit, Market, Liquidity, Operational and other inherent risks
Development of system & procedures for identification assessment
monitoring & control of Credit, Market, Liquidity, Operational and
other inherent risks Monitoring of risk on a portfolio basis

Assurance C
Internal Audit Compliance
Assesses the adequacy of Risk Management Processes Ensure compliance with all statutory and regulatory requirements.
Assesses the adequacy of Internal control Framework Ensure compliance with bankÕs policies

The Bank has a well-established risk management structure, with an active Board of Directors and Board Risk Management
Committee supported by an experienced senior management team and a centralised risk management group which is independent
of the business lines.
 135

Risk Management Function

BOD / BRMC

President & CEO

Chief Operating Officer (COO)

Head of Risk Management Division

Credit Risk Operational Risk / Market & Liquidity Risk Analytics & Base II / III
Management / BCP Management Risk Management Economic Capital Implementation &
Review Department Department / Treasury Department Policy Review
Department Middle Office Department

The Bank has undertaken a number of initiatives in the areas of assessment, measurement and monitoring of credit risk, market
risk, funding liquidity risk and operational risk. These measures are providing competitive advantage to the Bank besides
preparing the Bank for the full implementation of Basel-III.

42.1 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.

Credit Risk Management Objectives and Organisation

Lending of money is the core business activity, a major source of revenue and a significant exposure for the Bank. Lendings
are mainly funded from depositors' money. Therefore, 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 in each and every credit 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 thereagainst 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.

CREDIT RISK MANAGEMENT STRUCTURE

Board of Directors

Board Credit Committee Board Risk Management

Committee

President &
CEO

Chief Operating Officer

Credit Risk
Management
Committee Head of Risk
Management
Division
Executive Credit
Committee

Credit Risk Credit Risk

Management Review
Credit Division Department Department

Credit Policy and Credit Approval and Credit Corporate, SE, ME, Consumer Risk
Credit manual Monitoring Administration Agriculture Risk Review Review
Soneri Bank Limited | Annual Report 2016

Credit Approval Authorities and Credit Standards

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.

Credit Portfolio Management

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.

Credit Risk Rating

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 Bank has revised and updated / in the process of updation Obligor Risk
Rating (ORR) systems for its Corporate, Small and Medium Enterprises (SMEs), Consumer and Agriculture Finance borrowers
which are duly approved by the Board of Directors (BOD). The automated and updated Obligor Risk Rating (ORR) systems
for Corporate and Agriculture Finance obligors were implemented on a bank wide basis in Year 2015 while the updated ORR
of Small and Medium Enterprises (SMEs) and Consumer Finance will be automated on a Bank wide basis upon completion of
its testing. Through automation of the ORR process, the Bank plans to ensure review of 100% ORR by the Risk Management
Division so as to ensure the integrity of data and consistency in generation of accurate obligor risk ratings, while giving due
importance to the turnaround time. The Bank also has a BOD approved Facility Risk Rating System (FRR) for its borrowers.

The ORR assigns risk grades to customers, in accordance with the regulatory requirements, in twelve (12) grades, out of which
top nine (9) grades refer to regular customers whereas remaining three (3) grades pertain to defaulted ones. Whereas, FRR
assigns each loan facility in six (6) 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.

Credit Risk Management Policy

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.

Credit Risk Assessment

The Bank has a well established and rigorous pre-approval evaluation process of credit risk embedded in each 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.

Credit Risk Limit Structure

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

Collateral act as mitigants in case of default by the borrower. Therefore, most of the facilities extended by the Bank are backed
by appropriate and quality collaterals. Similarly, lendings to financial institutions and DFIs are backed by securities viz., 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.

Early Warning System

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.

Remedial Management and allowances for impairment

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.
 137

42.1.1 Segmental information

[Link] Segments by class of business

2016
Advances (Gross) Deposits **Contingencies and
commitments
(Rupees (Percent) (Rupees (Percent) (Rupees (Percent)
in '000) in '000) in '000)

Agriculture, Forestry, Hunting and Fishing 3,222,913 2.41% 83,271 0.04% 434,278 0.95%
Textile 28,707,232 21.46% 2,033,721 0.96% 4,906,597 10.75%
Chemical and Pharmaceuticals 4,844,065 3.62% 2,682,125 1.27% 3,372,462 7.39%
Cement 1,215,055 0.91% 73,336 0.03% 551,519 1.21%
Sugar 2,837,320 2.12% 233,554 0.11% 9,390 0.02%
Footwear and Leather Garments 954,568 0.71% 788,401 0.37% 264,313 0.58%
Automobile and Transportation Equipment 891,890 0.67% 7,843,582 3.72% 714,212 1.56%
Electronics and Electrical Appliances 1,381,090 1.03% 810,801 0.38% 2,840,490 6.22%
Construction 900,940 0.67% 1,694,297 0.80% 2,371,761 5.19%
Power (electricity), Gas, Water, Sanitary 7,358,320 5.50% 6,407,546 3.04% 2,137,140 4.68%
Wholesale and Retail Trade 17,879,883 13.37% 3,396,733 1.61% 6,323,110 13.85%
Exports / Imports 6,842,185 5.12% 1,915,437 0.91% 2,495,322 5.47%
Financial 999,275 0.75% 12,588,410 5.97% 1,578,513 3.46%
Food and Allied 31,175,457 23.31% 4,771,451 2.26% 7,277,675 15.94%
Individuals 6,788,432 5.08% 101,114,282 47.96% 156,732 0.34%
Others* 17,754,411 13.27% 64,402,699 30.57% 10,221,576 22.39%
133,753,036 100.00% 210,839,646 100.00% 45,655,090 100.00%

2015
Advances (Gross) Deposits **Contingencies and
commitments
(Rupees (Percent) (Rupees (Percent) (Rupees (Percent)
in '000) in '000) in '000)

Agriculture, Forestry, Hunting and Fishing 3,330,928 2.76% 369,461 0.20% 95,283 0.34%
Textile 28,416,076 23.56% 4,015,305 2.17% 3,378,255 11.92%
Chemical and Pharmaceuticals 5,857,102 4.86% 3,855,220 2.08% 1,539,977 5.43%
Cement 2,090,678 1.73% 510,985 0.28% 298,194 1.05%
Sugar 2,793,818 2.32% 673,822 0.36% 4,269 0.02%
Footwear and Leather Garments 1,166,362 0.97% 608,273 0.33% 207,631 0.73%
Automobile and transportation equipment 878,896 0.73% 1,035,718 0.56% 558,466 1.97%
Electronics and Electrical Appliances 1,125,632 0.93% 644,907 0.35% 1,431,378 5.05%
Construction 868,992 0.72% 1,263,340 0.68% 1,480,201 5.22%
Power (electricity), Gas, Water, Sanitary 5,762,384 4.77% 3,250,732 1.76% 1,385,452 4.89%
Wholesale and Retail Trade 3,482,537 2.89% 2,530,585 1.37% 3,134,219 11.06%
Exports / Imports 5,043,102 4.18% 838,337 0.45% 1,410,286 4.98%
Financial 1,421,015 1.18% 14,051,502 7.59% 278,709 0.98%
Food and Allied 36,652,402 30.39% 3,022,863 1.63% 5,112,160 18.04%
Individuals 4,896,896 4.06% 95,837,423 51.74% 531,764 1.87%
Others* 16,830,140 13.95% 52,713,910 28.45% 7,498,072 26.45%
120,616,960 100.00% 185,222,383 100.00% 28,344,316 100.00%

* All other business classes are less than ten percent of the total exposure.
** Contingencies only include direct credit substitutes, transaction related contingent liabilities and trade related contingent liabilities.
Soneri Bank Limited | Annual Report 2016

[Link] Segment by sector 2016

Advances (Gross) Deposits Contingencies and
commitments
(Rupees (Percent) (Rupees (Percent) (Rupees (Percent)
in '000) in '000) in '000)

Public / Government 34,526,634 25.81% 39,209,705 18.60% 1,646,373 3.61%

Private 99,226,402 74.19% 171,629,941 81.40% 44,008,717 96.39%
133,753,036 100.00% 210,839,646 100.00% 45,655,090 100.00%

2015
Advances (Gross) Deposits Contingencies and
commitments
(Rupees (Percent) (Rupees (Percent) (Rupees (Percent)
in '000) in '000) in '000)

Public / Government 21,405,443 17.75% 32,794,375 17.71% 1,690,695 5.96%

Private 99,211,517 82.25% 152,428,008 82.29% 26,653,621 94.04%
120,616,960 100.00% 185,222,383 100.00% 28,344,316 100.00%

[Link] Details of non-performing advances and specific 2016 2015

provisions by class of business segment
Classified Specific Classified Specific
Advances Provision Advances Provision
Held Held
------------------------------ (Rupees in '000) ------------------------------

Agriculture, Forestry, Hunting and Fishing 240,810 140,103 175,325 93,582

Textile 6,304,340 5,582,698 6,087,210 4,685,026
Chemical and Pharmaceuticals 450,871 430,264 94,643 59,117
Production and Transmission of energy 166,121 166,121 - -
Sugar 86,454 86,454 86,454 86,454
Footwear and Leather garments 24,900 24,900 1,954 1,954
Automobile and transportation equipment 49,310 49,310 - -
Electronics and electrical appliances 50,898 50,898 119,527 108,559
Construction - - - -
Power (electricity), Gas, Water, Sanitary - - - -
Wholesale and Retail Trade - - - -
Exports / Imports - - - -
Financial 233,301 233,301 257,636 243,719
Insurance - - - -
Services - - - -
Individuals 70,498 48,935 40,136 35,240
Others 2,741,917 1,582,947 4,721,222 3,255,333
10,419,420 8,395,931 11,584,107 8,568,984
 139

[Link] Details of non-performing advances and specific 2016 2015

provision by sector
Classified Specific Classified Specific
Advances Provision Advances Provision
Held Held
------------------------------ (Rupees in '000) ------------------------------

Public / Government - - - -
Private 10,419,420 8,395,931 11,584,107 8,568,984
10,419,420 8,395,931 11,584,107 8,568,984

[Link] Geographical segment analysis 2016

Profit before Total assets Net assets Contingencies
taxation employed employed and
Commitments
------------------------------- (Rupees in '000) --------------------------------

Pakistan 3,077,339 278,520,706 18,289,227 83,399,392

Asia Pacific (including South Asia) - - - -
Europe - - - -
United States of America and Canada - - - -
Middle East - - - -
Others - - - -
3,077,339 278,520,706 18,289,227 83,399,392

2015
Profit before Total assets Net assets Contingencies
taxation employed employed and
Commitments
------------------------------- (Rupees in '000) --------------------------------

Pakistan 3,595,607 253,341,829 18,191,942 117,300,198

Asia Pacific (including South Asia) - - - -
Europe - - - -
United States of America and Canada - - - -
Middle East - - - -
Others - - - -
3,595,607 253,341,829 18,191,942 117,300,198

42.2 Credit risk - General Disclosures, Basel III Specific

The Bank has adopted the Standardised Approach of the Basel II Accord. According to the regulatory statement submitted
under the Standardised Approach, the portfolio has been divided into claims fully secured by residential property, claims
on corporate (excluding equity exposure) and claims categorised as retail portfolio. Claims on corporate constitute 83%
(2015: 82%) of the total exposure, 3% (2015: 3%) represent claims that are fully secured against residential property and
the remaining 14% (2015: 15%) exposure pertains to claims categorised as retail portfolio.
Soneri Bank Limited | Annual Report 2016

42.3 Credit risk: Standardized Approach

Currently, the Bank does not have any policy whereby customers have to be rated by a rating agency. Therefore, the Bank
uses unsolicited / solicited ratings of JCR-VIS, PACRA and other foreign agencies approved by the SBP, wherever applicable.

Following are the types of exposure for which each agency is used:

Exposure JCR-VIS PACRA Fitch, Moody's & S&P

Corporate P P -
Banks P P P
Sovereigns - - -
SMEs - - -
Securitizations - - -

Most of the Bank's asset base is short or medium term. Therefore, the Bank uses the entity's rating to assess the risk of
exposure without any adjustments.

For exposure amounts after risk mitigation subject to the standardised approach, amount of Bank's / DFI's outstanding (rated
and unrated) in each risk bucket as well as those that are deducted are as follows:

Exposure Rating Amount Deduction Net Amount

category No. outstanding CRM*
---------------------------- (Rupees in '000) ------------------------------

- Cash and Cash Equivalent 4,795,592 - 4,795,592

- Corporate 1 9,845,578 2,079,183 7,766,395

2 1,556,662 202,000 1,354,662
3,4 15,001 - 15,001
5,6 - - -
Unrated 42,533,342 385,196 42,148,146
Unrated-2 24,240,066 247,736 23,992,330

- Public Sector Entities 1 724,182 - 724,182

2,3 1,003,084 - 1,003,084
Unrated 18,100,671 17,286,398 814,273

- Banks 1,2,3 755,044 83,513 671,531

4,5,6 1,140,571 - 1,140,571
Unrated 9,265,534 4,172,737 5,092,797

- Sovereigns etc. 1 - - -
2 - - -
3 - - -
4,5 - - -
6 26,648 - 26,648
Unrated - - -

- Government of Pakistan 159,926,345 35,645,574 124,280,771

- SBP 2,671,657 - 2,671,657
- Retail 12,640,215 319,332 12,320,883
- Residential Mortgage 2,967,263 - 2,967,263
- Past Dues Loans 2,073,012 - 2,073,012
- Past Dues against Residential
Mortgage 18,121 - 18,121
- Significant investment in
Commercial entities - - -
- Significant investment and DTAs
above 15% threshold - - -
- Unlisted Equity Investments 11,100 - 11,100
- Listed Equity Investments 4,437,820 - 4,437,820
- Operating Fixed Assets 4,735,061 - 4,735,061
- Other Assets 955,939 - 955,939

304,438,508 60,421,669 244,016,839

 141

The Bank has adopted the comprehensive approach to credit risk mitigation under Basel III and, therefore, has applied
haircuts to the collateral. Moreover, all eligible collaterals that includes cash / liquid securities have been taken into account
with respect to credit risk mitigation.

42.4 Market risk

42.4.1 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, foreign exchange rates, equity prices and / or commodity
prices resulting in a loss to earnings and capital.

Market Risk Management Objective and Organisation

The Risk Management Framework requires that strong risk management practices are integrated in key strategic, capital
and financial planning processes and day-to-day business processes across the Bank.

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 on a 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 thereagainst; thus, leading to efficient and effective use of funds.

The Bank has a sound organisation 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).

MARKET RISK MANAGEMENT STRUCTURE

Board of Directors

Board Risk
Management
Committee

President & CEO ALCO

Market Risk
Chief Operating Management
Officer Committee

Head of Risk
Management
Division

Market Risk
Management
Department
Soneri Bank Limited | Annual Report 2016

Market Risk Monitoring

The BankÕs market risk policies set out risk management parameters, governance and control frameworks as well as reporting
arrangements for key risk indicators. The Bank has a well-established structure of internal limits with respect to its treasury
and investment operations. The Treasury Middle Office (TMO), within the Market Risk Management Department, monitors
each and every transaction executed through treasury, monitors risk limits, reports breaches, off market rates, rate reasonability
against benchmark rates, tolerance PV01 limits and assesses market risk in money market transactions, investments in equity
securities, monitors impairments in equity securities and its stop loss limit and foreign exchange transactions. In order to
mitigate unnecessary risk and ensure minimum business losses, Earmarking Policy has also been implemented to ensure
risk migration from high risk to low risk transactions.

Portfolio Analysis and Management

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

Marking-to-Market

The Bank is marking-to-market (MTM) its investment in tradable and available for sale securities, i.e., equity securities, debt
securities and foreign exchange ready and forward transactions, on a regular basis. The same is independently reviewed
by the Risk Management Division.

Market Risk Assessment and Measurement

The Bank is assessing and measuring market risk in all of its financial exposures using various types of measurement and
analytical tools like Value at Risk (VaR), duration and convexity, interest rate gap and duration gap. The Bank is using
Standardized Approach for exposures in its balance sheet, to calculate market risk capital charge and risk weighted asset
for Capital Adequacy Ratio (CAR) calculation purposes.

The Bank's principle market risk measurement methodology are VAR and stress testing. Historical financial market rates,
prices and volatility serve as the basis for the statistical VAR model underlying the potential loss estimation. The Bank uses
ten days as well as 30 days holding period at 99% confidence level to model risk in different portfolios. The main assumptions
and scenarios of our stress analysis includes:

1. Parallel shift in yield curve by 2%, 3% and 4%.

2. Change in the slope of yield curve by changing short-term, medium-term and long-term maturities by different rates.

3. Penalty or reward depending on net long or net short position in foreign currency exposure.

4. Fall in general equity price upto 50%.

42.4.2 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.
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.
 143

2016
Assets Liabilities Off-balance Net foreign
sheet items currency
exposure
--------------------------------- (Rupees in '000) --------------------------------

Pakistan Rupee 265,511,030 244,233,413 (3,173,638) 18,103,979

United States Dollar 12,338,889 13,739,269 1,574,584 174,204
Great Britain Pound 300,331 1,497,250 1,199,866 2,947
Japanese Yen 4 637 (13) (646)
Euro 352,672 760,898 409,660 1,434
Other currencies 17,780 12 (10,459) 7,309
278,520,706 260,231,479 - 18,289,227

2015
Assets Liabilities Off-balance Net foreign
sheet items currency
exposure
--------------------------------- (Rupees in '000) --------------------------------

Pakistan Rupee 243,267,005 222,411,781 (2,769,899) 18,085,325

United States Dollar 9,318,777 10,312,566 1,079,179 85,390
Great Britain Pound 282,593 1,568,293 1,285,022 (678)
Japanese Yen 87 4,426 8,805 4,466
Euro 440,487 850,863 411,365 989
Other currencies 32,880 1,958 (14,472) 16,450
253,341,829 235,149,887 - 18,191,942

42.4.3 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.

42.4.4 Mismatch of Interest Rate Sensitive Assets and Liabilities

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. 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.
Soneri Bank Limited | Annual Report 2016

2016
Effective Exposed to Yield/ Interest risk
Non-Interest
Yield / Over 1 Over 3 Over 6 Over 1 Over 2 Over 3 Over 5
bearing
Interest Total Up to 1 to 3 to 6 Months to 2 to 3 to 5 to 10 Above
financial
rate Month Months Months to 1 Year Years Years Years Years 10 Years
instruments
%
----------------------------------------------------------------------------------------------- (Rupees in '000) ----------------------------------------------------------------------------------------------------------------------

On-balance sheet financial instruments

Assets

Cash and balances with treasury banks 0.00% 18,278,840 - - - - - - - - - 18,278,840

Balances with other banks 3.49% 822,689 141,130 - - - - - - - - 681,559

Lendings to financial and other institutions 5.14% 5,536,577 2,603,228 1,887,364 1,045,985 - - - - - - -

Investments 6.51% 117,883,960 11,459,986 5,947,345 24,156,770 12,943,977 23,110,725 9,215,467 19,505,899 7,875,361 - 3,668,430

Advances 6.67% 125,305,765 8,286,819 54,470,728 60,327,404 15,720 83,543 106,703 42,699 - - 1,972,149

Other assets 0.00% 5,090,321 - - - - - - - - - 5,090,321

272,918,152 22,491,163 62,305,437 85,530,159 12,959,697 23,194,268 9,322,170 19,548,598 7,875,361 - 29,691,299

Liabilities

Bills payable 0.00% 3,254,243 - - - - - - - - - 3,254,243

Borrowings 4.96% 38,905,078 27,487,185 5,669,245 4,739,121 - 52,449 17,200 340,919 461,159 - 137,800

Deposits and other accounts 4.59% 210,839,646 61,045,855 68,474,009 14,588,471 13,054,100 560,719 316,614 - - - 52,799,878

Sub-ordinated loans 7.41% 2,998,800 2,998,800 - - - - - - - - -

Other liabilities 0.00% 2,522,481 - - - - - - - - - 2,522,481

258,520,248 91,531,840 74,143,254 19,327,592 13,054,100 613,168 333,814 340,919 461,159 - 58,714,402

On-balance sheet gap 14,397,904 (69,040,677) (11,837,817) 66,202,567 (94,403) 22,581,100 8,988,356 19,207,679 7,414,202 - (29,023,103)

Non financial net assets 3,891,323

Total net assets 18,289,227

Off-balance sheet financial instruments

Forward purchase of foreign exchange 18,161,473 6,899,877 8,189,838 3,010,609 61,149 - - - - - -

Forward sale of foreign exchange (13,793,304) (7,473,778) (4,245,629) (2,073,897) - - - - - - -

Off-balance sheet gap 4,368,169 (573,901) 3,944,209 936,712 61,149 - - - - - -

Total Yield / Interest Risk Sensitivity Gap (69,614,578) (7,893,608) 67,139,279 (33,254) 22,581,100 8,988,356 19,207,679 7,414,202 - (29,023,103)

Cumulative Yield / Interest Risk Sensitivity Gap (69,614,578) (77,508,186) (10,368,907) (10,402,161) 12,178,939 21,167,295 40,374,974 47,789,176 47,789,176 (29,023,103)
 145

2015
Effective Exposed to Yield/ Interest risk
Non-Interest
Yield / Over 1 Over 3 Over 6 Over 1 Over 2 Over 3 Over 5
bearing
Interest Total Up to 1 to 3 to 6 Months to 2 to 3 to 5 to 10 Above
financial
rate Month Months Months to 1 Year Years Years Years Years 10 Years
instruments
%
----------------------------------------------------------------------------------------------- (Rupees in '000) ----------------------------------------------------------------------------------------------------------------------

On-balance sheet financial instruments

Assets

Cash and balances with treasury banks - 16,718,428 - - - - - - - - - 16,718,428

Balances with other banks 2.14% 1,634,544 182,555 - - - - - - - - 1,451,989

Lending to financial and other institutions 12.10% 3,093,938 1,800,000 769,557 524,381 - - - - - - -

Investments 9.60% 108,846,113 7,496,236 23,067,029 3,173,469 50,664,788 4,394,756 2,035,890 6,904,935 8,372,286 - 2,736,724

Advances 7.63% 112,001,752 10,473,690 50,445,584 48,060,669 22,537 19,882 10,491 - - - 2,968,899

Other assets 0.00% 5,357,696 - - - - - - - - - 5,357,696

247,652,471 19,952,481 74,282,170 51,758,519 50,687,325 4,414,638 2,046,381 6,904,935 8,372,286 - 29,233,736

Liabilities

Bills payable - 2,706,274 - - - - - - - - - 2,706,274

Borrowings 4.86% 39,875,623 28,502,779 8,081,390 2,291,549 31,222 - 70,882 172,349 719,266 - 6,186

Deposits and other accounts 5.73% 185,222,383 56,715,448 61,647,128 11,782,450 9,705,887 976,498 512,654 - - - 43,882,318

Sub-ordinated loans 8.39% 3,000,000 3,000,000 - - - - - - - - -

Other liabilities 0.00% 2,520,975 - - - - - - - - - 2,520,975

233,325,255 88,218,227 69,728,518 14,073,999 9,737,109 976,498 583,536 172,349 719,266 - 49,115,753

On-balance sheet gap 14,327,216 (68,265,746) 4,553,652 37,684,520 40,950,216 3,438,140 1,462,845 6,732,586 7,653,020 - (19,882,017)

Non financial net assets 3,864,726

Total net assets 18,191,942

Off-balance sheet financial instruments

Forward purchase of foreign exchange 43,963,526 23,355,343 14,131,437 6,464,339 12,407 - - - - - -

Forward sale of foreign exchange (39,749,454) (23,697,959) (14,164,898) (1,886,597) - - - - - - -

Off-balance sheet gap 4,214,072 (342,616) (33,461) 4,577,742 12,407 - - - - - -

Total Yield / Interest Risk Sensitivity Gap (68,608,362) 4,520,191 42,262,262 40,962,623 3,438,140 1,462,845 6,732,586 7,653,020 - (19,882,017)

Cumulative Yield / Interest Risk Sensitivity Gap (68,608,362) (64,088,171) (21,825,909) 19,136,714 22,574,854 24,037,699 30,770,285 38,423,305 38,423,305 (19,882,017)

(a) The effective interest rate is a historical rate (for December month) for a fixed rate instrument carried at amortised cost and a current market rate for
a floating rate instrument.

(b) The effective interest rate has been computed by excluding non-performing advances.

(c) The effective interest rate has been computed by excluding non-remunerative deposits.
Soneri Bank Limited | Annual Report 2016

42.5 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.

Liquidity Management

Day to day funding, is managed by Treasury Division through net cash flows from payment systems, fresh deposits mobilised
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 in the open market or funds can be arranged thereagainst 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.

Liquidity Risk Monitoring

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.

Liquidity Risk Assessment

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.

Liquidity management framework allows the Bank to run stress analysis on the balance sheet and off-balance positions,
which include, but are not limited to, the following:

1. Significant withdrawals from corporate clients deposits.

2. Withdrawal of top ten, top fifteen, and top twenty deposits.
3. Loss in the funding value of unencumbered assets.
4. Availability of secure lending is subject to significant over collateralisation.
 147

42.5.1 Maturities of assets and liabilities

2016
Total Up to 1 Over 1 to 3 Over 3 to 6 Over Over 1 to Over 2 to Over 3 to Over 5 to Above
month Months Months 6 Months 2 Years 3 Years 5 Years 10 Years 10 Years
to 1 Year
------------------------------------------------------------------------------------- (Rupees in '000) -------------------------------------------------------------------------------------
Assets
Cash and balances with
treasury banks 18,278,840 9,506,922 3,222,322 2,540,546 3,009,050 - - - - -
Balances with other banks 822,689 822,689 - - - - - - - -
Lendings to financial and other
institutions 5,536,577 2,603,228 1,887,364 1,045,985 - - - - - -
Investments - net 117,883,960 11,459,986 8,579,767 20,095,305 13,144,599 25,192,173 9,702,467 20,124,610 9,585,053 -
Advances - net 125,305,765 19,827,022 23,277,763 33,098,765 3,559,380 3,408,227 9,083,542 11,112,023 7,390,442 14,548,601
Operating fixed assets 5,138,424 44,648 177,272 199,739 632,504 474,315 764,204 961,649 536,401 1,347,692
Deferred tax assets - net - - - - - - - - - -
Other assets - net 5,554,451 4,452,247 - - 1,095,725 - - 6,479 - -
278,520,706 48,716,742 37,144,488 56,980,340 21,441,258 29,074,715 19,550,213 32,204,761 17,511,896 15,896,293
Liabilities
Bills payable 3,254,243 3,254,243 - - - - - - - -
Borrowings 38,905,078 27,624,985 5,669,245 4,739,121 - 52,449 17,200 340,919 461,159 -
Deposits and other accounts 210,839,646 43,102,348 44,780,120 35,305,588 41,816,319 7,844,465 3,776,024 34,214,782 - -
Sub-ordinated loans 2,998,800 600 - - 600 1,200 1,200 2,400 2,992,800 -
Deferred tax liabilities - net 1,137,530 - - - 1,137,530 - - - - -
Other liabilities 3,096,182 2,713,825 - - 382,357 - - - - -
260,231,479 76,696,001 50,449,365 40,044,709 43,336,806 7,898,114 3,794,424 34,558,101 3,453,959 -

Net assets 18,289,227 (27,979,259) (13,304,877) 16,935,631 (21,895,548) 21,176,601 15,755,789 (2,353,340) 14,057,937 15,896,293

Share capital 11,024,636

Discount on issue of shares -
Reserves 1,423,829
Unappropriated profit - net 3,496,305
Surplus on revaluation of assets 2,344,457
18,289,227

2015
Total Up to 1 Over 1 to 3 Over 3 to 6 Over Over 1 to Over 2 to Over 3 to Over 5 to Above
month Months Months 6 Months 2 Years 3 Years 5 Years 10 Years 10 Years
to 1 Year
------------------------------------------------------------------------------------- (Rupees in '000) -------------------------------------------------------------------------------------
Assets
Cash and balances with
treasury banks 16,718,428 9,034,947 2,882,802 2,214,806 2,585,873 - - - - -
Balances with other banks 1,634,544 1,634,544 - - - - - - - -
Lendings to financial and other
institutions 3,093,938 1,800,000 769,556 524,382 - - - - - -
Investments - net 108,846,113 7,496,236 24,172,897 26,002 50,732,868 5,666,567 4,448,316 7,469,290 8,833,937 -
Advances - net 112,001,752 20,484,608 40,150,231 14,349,262 1,408,483 5,023,510 4,203,686 12,400,081 5,646,941 8,334,950
Operating fixed assets 4,956,732 74,361 129,724 89,281 430,632 824,246 357,000 980,721 613,076 1,457,691
Deferred tax assets - net - - - - - - - - - -
Other assets - net 6,090,322 5,559,328 - - 524,509 - - 6,485 - -
253,341,829 46,084,024 68,105,210 17,203,733 55,682,365 11,514,323 9,009,002 20,856,577 15,093,954 9,792,641
Liabilities
Bills payable 2,706,274 2,706,274 - - - - - - - -
Borrowings 39,875,623 28,508,965 8,081,390 2,291,549 31,222 - 70,882 172,349 719,266 -
Deposits and other accounts 185,222,383 39,402,606 39,214,936 30,128,148 35,175,789 7,426,498 3,576,077 30,298,329 - -
Sub-ordinated loans 3,000,000 600 - - 600 1,200 1,200 2,400 2,994,000 -
Deferred tax liabilities - net 1,417,042 - - - 1,417,042 - - - - -
Other liabilities 2,928,565 2,610,512 - - 318,053 - - - - -
235,149,887 73,228,957 47,296,326 32,419,697 36,942,706 7,427,698 3,648,159 30,473,078 3,713,266 -

Net assets 18,191,942 (27,144,933) 20,808,884 (15,215,964) 18,739,659 4,086,625 5,360,843 (9,616,501) 11,380,688 9,792,641

Share capital 11,024,636

Discount on issue of shares (1,001,361)
Reserves 1,049,465
Unappropriated profit - net 4,263,217
Surplus on revaluation of assets 2,855,985
18,191,942

Cash and balances with treasury banks, savings and current deposits and running finance do not have any contractual maturities. However,
these have been allocated into the above time bands based on historical withdrawal pattern of the said cash and balances with treasury
banks, deposits and running finances. Furthermore, it has been assumed that on a going concern basis, these are not expected to fall below
the current year's level.
Soneri Bank Limited | Annual Report 2016

42.5.2 Maturities of assets and liabilities - based on contractual maturity of the assets and liabilities of the Bank
2016
Total Up to 1 Over 1 to 3 Over 3 to 6 Over Over 1 to Over 2 to Over 3 to Over 5 to Above
month Months Months 6 Months 2 Years 3 Years 5 Years 10 Years 10 Years
to 1 Year
------------------------------------------------------------------------------------- (Rupees in '000) ------------------------------------------------------------------------------------
Assets
Cash and balances with
treasury banks 18,278,840 18,278,840 - - - - - - - -
Balances with other banks 822,689 822,689 - - - - - - - -
Lendings to financial & other
institutions 5,536,577 2,603,228 1,887,364 1,045,985 - - - - - -
Investments - net 117,883,960 11,459,986 8,579,767 20,095,305 13,144,599 25,192,173 9,702,467 20,124,610 9,585,053 -
Advances - net 125,305,765 8,300,600 17,514,552 30,217,159 38,138,648 1,967,424 7,642,739 8,230,417 5,229,238 8,064,988
Operating fixed assets 5,138,424 44,648 177,272 199,739 632,504 474,315 764,204 961,649 536,401 1,347,692
Deferred tax assets - net - - - - - - - - - -
Other assets - net 5,554,451 4,452,247 - - 1,095,725 - - 6,479 - -
278,520,706 45,962,238 28,158,955 51,558,188 53,011,476 27,633,912 18,109,410 29,323,155 15,350,692 9,412,680

Liabilities
Bills payable 3,254,243 3,254,243 - - - - - - - -
Borrowings 38,905,078 27,624,985 5,669,245 4,739,121 - 52,449 17,200 340,919 461,159 -
Deposits and other accounts 210,839,646 159,024,762 23,294,980 14,588,471 13,054,100 560,719 316,614 - - -
Sub-ordinated loans 2,998,800 600 - - 600 1,200 1,200 2,400 2,992,800 -
Deferred tax liabilities - net 1,137,530 - - - 1,137,530 - - - - -
Other liabilities 3,096,182 2,713,825 - - 382,357 - - - - -
260,231,479 192,618,415 28,964,225 19,327,592 14,574,587 614,368 335,014 343,319 3,453,959 -

Net assets 18,289,227 (146,656,177) (805,270) 32,230,596 38,436,889 27,019,544 17,774,396 28,979,836 11,896,733 9,412,680

Share capital 11,024,636

Discount on issue of shares -
Reserves 1,423,829
Unappropriated profit - net 3,496,305
Surplus on revaluation of assets 2,344,457
18,289,227

2015
Total Up to 1 Over 1 to 3 Over 3 to 6 Over Over 1 to Over 2 to Over 3 to Over 5 to Above
month Months Months 6 Months 2 Years 3 Years 5 Years 10 Years 10 Years
to 1 Year
------------------------------------------------------------------------------------- (Rupees in '000) ------------------------------------------------------------------------------------
Assets
Cash and balances with
treasury banks 16,718,428 16,718,428 - - - - - - - -
Balances with other banks 1,634,544 1,634,544 - - - - - - - -
Lendings to financial & other - - - - - - - - -
institutions 3,093,938 1,800,000 769,556 524,382 - - - - - -
Investments - net 108,846,113 7,496,236 24,172,897 26,002 50,732,868 5,666,567 4,448,316 7,469,290 8,833,937 -
Advances - net 112,001,752 10,752,819 36,552,866 12,550,580 25,529,730 4,124,169 3,304,345 10,601,399 4,297,929 4,287,915
Operating fixed assets 4,956,732 74,361 129,724 89,281 430,632 824,246 357,000 980,721 613,076 1,457,691
Deferred tax assets - net - - - - - - - - - -
Other assets - net 6,090,322 5,559,328 - - 524,509 - - 6,485 - -
253,341,829 44,035,716 61,625,043 13,190,245 77,217,739 10,614,982 8,109,661 19,057,895 13,744,942 5,745,606

Liabilities
Bills payable 2,706,274 2,706,274 - - - - - - - -
Borrowings 39,875,623 28,508,965 8,081,390 2,291,549 31,222 - 70,882 172,349 719,266 -
Deposits and other accounts 185,222,383 142,055,764 20,189,129 11,782,451 9,705,887 976,498 512,654 - - -
Sub-ordinated loans 3,000,000 600 - - 600 1,200 1,200 2,400 2,994,000 -
Deferred tax liabilities - net 1,417,042 - - - 1,417,042 - - - - -
Other liabilities 2,928,565 2,610,512 - - 318,053 - - - - -
235,149,887 175,882,115 28,270,519 14,074,000 11,472,804 977,698 584,736 174,749 3,713,266 -

Net assets 18,191,942 (131,846,399) 33,354,524 (883,755) 65,744,935 9,637,284 7,524,925 18,883,146 10,031,676 5,745,606

Share capital 11,024,636

Discount on issue of shares (1,001,361)
Reserves 1,049,465
Unappropriated profit - net 4,263,217
Surplus on revaluation of assets 2,855,985
18,191,942

The management believes that the above maturity analysis does not reveal the expected maturity of cash and balances with
treasury banks, current and saving deposits and running finance, as contractual maturity analysis alone does not provide
information about the conditions expected in normal circumstances. The management believes that the maturity profile disclosed
in note 42.5.1 that includes maturities of cash and balances with treasury banks, current and saving deposits and running
finance determined by the Asset and Liability Management Committee (ALCO) keeping in view historical behaviour of these
balances reflects a more meaningful analysis of the liquidity risk of the Bank.
 149

42.6 Operational risk

Operational risk 'OpRisk' 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.

Operational Risk Management Objective and Organisation

OPERATIONAL RISK MANAGEMENT STRUCTURE

Board of Directors

Board Risk
Management
Committee

Operational Risk
Management President & CEO BCP Streering
Committee Committee

Chief Operating
Officer

Head of Risk
Management
Division

Operational Risk
Management
Department

The main objective of the operational risk management is to minimise expected and unexpected losses arising out of operational
activities of the Bank.

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).

Operational Risk Assessment

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

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).
Soneri Bank Limited | Annual Report 2016

Operational Risk Measurement

The Bank keeps a detailed track of its operational loss events and maintains a database in SAS OpRisk Monitor. 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 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.

Operational Risk Assessment for New Products and Services

Operational risk in all new products, systems and processes are identified and assessed by the RMD so that risk associated
can be mitigated to an acceptable level. Assessment comprises of:

- review of new process flows and their control activities;

- conduct RCSA exercise; and
- identification, adequate assessment and ranking of all risks and controls.

Business Continuity Plan

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.

43. DATE OF AUTHORISATION FOR ISSUE

These financial statements were authorised for issue on 15 February 2017 by the Board of Directors of the Bank.

44. GENERAL

44.1 Comparative

Comparative information has been re-classified, re-arranged or additionally incorporated in these financial statements, wherever
necessary to facilitate comparison and better presentation. There were no significant reclassification during the current year
except for the reclassification as mentioned below:

44.1.1 State Bank of Pakistan through the BPRD Circular Letter No. 05 dated 29 February 2016, has advised all banks having Islamic
Banking operations to report Bai Muajjal transactions with Government of Pakistan under Investment as "Other Federal Government
Securities". Accordingly the Bai Muajjal Transaction with Government of Pakistan amounting to Rs. 212.306 million has been
reclassified from "Lendings to Financial and Other Institutions" to "Investments". There was no reclassification for the year 2015
as the amount outstanding as at 31 December 2015 was Rs Nil.

44.1.2 An amount of Rs 44.810 million has been reclassified from "Bills payables" to "Other Liabilities". There was no reclassification
for the year 2015 as the amount outstanding as at 31 December 2015 was Rs Nil.

44.2 Figures have been rounded off to the nearest thousand rupees unless otherwise stated.

45. NON-ADJUSTING EVENT AFTER THE BALANCE SHEET DATE

The Board of Directors in its meeting held on 15 February 2017 has proposed a cash dividend in respect of the year ended
31 December 2016 of Rs.1.25 per share. This appropriation will be approved in the forthcoming Annual General Meeting. The
financial statements for the year ended 31 December 2016 do not include the effect of these appropriations which will be
accounted for in the financial statements of the Bank for the year ending 31 December 2017.

Alauddin Feerasta Mohammad Aftab Manzoor Manzoor Ahmed Shahid Anwar

Chairman President & Chief Executive Officer Director Director
 151

STATEMENT SHOWING WRITTEN-OFF LOANS OR ANY OTHER FINANCIAL RELIEF Annexure - I

OF FIVE HUNDRED THOUSAND RUPEES AND ABOVE PROVIDED
DURING THE YEAR ENDED 31 DECEMBER 2016

Outstanding liabilites at beginning of the year

Other
Name of individuals/
S. Name and address Father/ Husband's Principal Mark-up Financial
partners/directors Principal Mark-up Others Total Total
No. of borrower Name Written off Written off / Relief
(with CNIC No.) Waived Provided
1 2 3 4 5 6 7 8 9 10 11 12=9+10+11
---------------------------------------------------------- (Rupees in million) ----------------------------------------------------------
1 Bukhari Commercial Exporters Mr. Abdul Qadir Mr. Abdul Razzak 57.851 31.271 - 89.122 57.851 90.277 0.218 148.346
Flat No. 1/114, Street No. 5 CNIC No. 42301-5862447-7
Khayaban-e-Faiz
DHA Phase-VI, Karachi
2 Shafqat Copy House Mr. Shafqat Ali Mr. Hashim Ali 0.399 0.400 - 0.799 0.399 0.390 0.075 0.864
Shop No.7, Student Urdu Bazar, CNIC No. 36301-0967305-1
[Link] Road, Karachi
3 Muddassar Hayat Mr. Muddassar Hayat Mr. Umer Hayat - 0.983 - 0.983 - 0.983 0.058 1.041
Mouza Jalpana & Kot Bhai Khan CNIC No. 38404-65496254-9
Teh:.Shahpur, Dist: Sargodha
4 Muhammad Saeed Babar Mr. Muhammad Saeed Babar Mr. Abdul Hameed - 0.664 - 0.664 - 0.616 - 0.616
P-152,Ghousia Gole CNIC No. 33100-6707246-5
Bhowana Bazar, Near Anarkali
Bazar, Faisalabad
5 K.K. Trading Co. Mr. Khadim Hussain Mr. Talib Hussain 0.400 0.410 - 0.810 0.400 1.375 0.467 2.242
T-20, Rafi Plaza, Hall Road, CNIC No. 35200-1429849-5
Lahore
6 Al-Hasnain Jewellers Mr. Abdul Ghaffar Mr. Muhammad Bashir Naaz 0.100 0.693 - 0.793 0.100 0.925 0.095 1.120
House No. 15/1 KC, CNIC No. 35302-1930117-3
Qadir Colony, Okara
7 Alpha Tex Mrs. Tasneem Javed W/o. Javed Akhter 1.123 5.264 - 6.387 1.123 5.275 0.144 6.542
C I-48, Sector 6-B, North Karachi CNIC No. 42201-9464461-2
Industrial Area, Karachi
8 Taha Enterprises Mr. Shoukat Husein Mr. Husein Ali 1.954 0.921 - 2.875 1.954 6.241 0.041 8.236
84, Mirza Kalem Baig Road, CNIC No. 42201-1853547-9
J.M No.1, Soldier Road, Karachi
9 Mahmood (Pvt) Ltd. Mr. Nayyar Mehmood Mr. Mahmood Ahmed 51.957 1.347 - 53.304 51.957 149.074 1.699 202.730
Seher House Plot ST-5, Block-4, CNIC No. 505-90-179695
Metroville, SITE, Karachi
Mrs. Yasmin Mahmood W/o. Nayyar Mehmood
CNIC No. 270-55-348801
Mr. Hussain Akthar Kazmi Mr. Syed Muhammad Akber
CNIC No.35202-6379818-5
[Link] Irfan Ullah Mr. Syed Hafeezullah
CNIC No. 42101-2915523-9
10 Ocean Tex Mr. Mohammad Rafiq Mr. Mohammad Ibrahim 1.176 - - 1.176 1.176 1.906 0.117 3.199
M-155, Jillani Center, [Link], CNIC No. 42101-5236478-6
[Link] Road, Karachi
11 Khalid Javed & Brothers Mr. Shahid Ahmed Mr. Manzoor Ahmed 33.270 7.693 - 40.963 33.270 23.853 1.474 58.597
52-57, Awan-e-Tijarat Building, CNIC No. 42301-0889594-7
Awan-e-Tijarat Road, Karachi
Mr. Faisal Imran Mr. Javaid Iqbal
CNIC No. 42301-0889596-9
Mr. Haroon Rashid Mr. Shaikh Mian Manzoor Ahmed
CNIC No. 36302-0412269-9
Mr. Javaid Iqbal Mr. Shaikh Manzoor Ahmed
CNIC No. 42301-0910340-5
Mr. Zaeem Javaid Mr. Javaid Iqbal
CNIC No. 42101-1664282-8
Mrs. Noor Jehan Mr. Shaikh Manzoor Ahmed
CNIC No. 42101-1664282-8
Mr. Tariq Ahmed Mr. Manzoor Ahmed
CNIC No. 42000-0549111-5
12 Rakhani Export Import Trading Co. "Mr. Hamad Shaikh
Plot # 37/7, Sector # 15 (Previously Mr. Vashdev Rakhani)" Mr. Nenumal 10.953 22.121 - 33.074 10.953 37.718 0.229 48.900
Korangi Industrial Area, Karachi. CNIC No. 42301-7832646-3

13 Callmate Telips Telecom Ltd. Mr. Ahmed Jamil Ansari Mr. Zill Ur Rehman Ansari 39.587 16.812 - 56.399 39.587 46.927 0.559 87.073
99-CF, 1/5 Clifton, CNIC No. 42301-4085207-5
Karachi
Mr. Mohammed Ajmal Ansari Mr. Zill Ur Rehman Ansari
CNIC No. 42000-0677785-3
Mr. Hasan Jamil Ansari Mr. Ahmed Jamil Ansari
CNIC No. 42301-4170707-5
Mrs. Yuba Jamil Ansari W/o. Ahmed Jamil Ansari
CNIC No. 42301-4918316-4
Miss. Maria Jamil Ansari W/o. Salman Moiz Ahmed
CNIC No. 42301-2403949-4
Mr. Abu Shamim Muhammed Arif Mr. Mohammed Arif
CNIC No. 42301-7193007-3
Mrs. Nuzhat Ikramullah W/o. Syed Ahmed Ikramullah
CNIC No. 42301-3534786-6
Soneri Bank Limited | Annual Report 2016

STATEMENT SHOWING WRITTEN-OFF LOANS OR ANY OTHER FINANCIAL RELIEF Annexure - I

OF FIVE HUNDRED THOUSAND RUPEES AND ABOVE PROVIDED
DURING THE YEAR ENDED 31 DECEMBER 2016

Outstanding liabilites at beginning of the year

Other
Name of individuals/
S. Name and address Father/ Husband's Principal Mark-up Financial
partners/directors Principal Mark-up Others Total Total
No. of borrower Name Written off Written off / Relief
(with CNIC No.)
Waived Provided
1 2 3 4 5 6 7 8 9 10 11 12=9+10+11
---------------------------------------------------------- (Rupees in million) ----------------------------------------------------------
14 Elite Publishers Ltd. Mr. Ahmed Mirza Jamil Mr. Mirza Noor Ahmed 93.239 62.339 - 155.578 3.239 59.652 1.037 63.928
D-118, SITE, CNIC No. 42201-4027981-3
Karachi
Mr. Khalid Mirza Jamil Mr. Ahmed Mirza Jamil
CNIC No. 42301-876979-1
Mr. Owais Mirza Jamil Mr. Ahmed Mirza Jamil
CNIC No. 42000-6524471-9
15 Ch. Muhammad Hanif Ch. Muhammad Hanif Ch. Nawab Din - 1.315 - 1.315 - 1.229 0.088 1.317
Fateh, Thesil Pasrur, CNIC No. 34602-0722142-5
Distt: Sialkot
16 Shahbaz Rasool Mr. Shahbaz Rasool Mr. Ghulam Rasool - 0.769 - 0.769 - 0.529 - 0.529
Faqir wali Tehsil Daska, CNIC No. 34601-6276041-7
Distt: Sialkot
17 Tanveer Ahmed Mr. Tanveer Ahmed Mr. Faqir Sian 0.035 1.145 - 1.180 - 0.917 - 0.917
KorayKeyTehsil Daska, CNIC No. 34601-3732959-1
Distt: Sialkot
18 Hussain Sons Mr. Khalid Hussain Mirza Khadim Hussain 0.309 - - 0.309 0.309 2.443 0.004 2.756
17-KM Atta Bukhsh Road CNIC No. 35202-8174240-1
Beside Rohi Nala,
Off Ferozpur Road, Lahore Mr. Tariq Hussain Mirza Khadim Hussain
CNIC No. 35200-1413552-1
Mirza Tahir Hussain Mirza Khadim Hussain
CNIC No. 35202-2929560-1
Mirza Zahid Hussain Mirza Khadim Hussain
CNIC No. 35202-0236600-9
19 Friends Associates Mr. Muhammad Wasim Arshad Mr. Muhammad Irshad 1.683 1.776 - 3.459 - 1.079 - 1.079
141-B, Shahi Road, CNIC No. 31303-7089062-5
Rahimyar Khan
Mr. Nadeem Akhtar Cheema Mr. Nusrat Hussain
CNIC No. 31303-4967644-3
Mr. Haji Muhammad Ashraf Mr. Ali Muhammad
CNIC No. 31303-2432947-3
Mr. Khalid Mehmood Mr. Miraj Din
CNIC No. 31303-2387198-3
20 Ashraf Auto Mobile Engineers Mr. Muhammad Ashraf Mr. Ali Muhammad - 2.109 - 2.109 - 1.235 - 1.235
Opposite New Vegetable Market, CNIC No. 31303-2432947-3
Shahbazpur Road, Rahimyar Khan
21 Molasses Exports Company Mr. Noor Mohammad Vayani Mr. Yakoob Vayani 122.800 4.716 - 127.516 - 35.486 1.778 37.264
(Pvt) Ltd. CNIC No. 42301-6362914-9
Railway Wharf, Dagin Lane,
Kemari, Karachi Mr. Anees Vayani Mr. Noor Mohammad Yakoob Vayani
CNIC No. 42301-1066028-9
Mr. Amin Vayani Mr. Noor Mohammad Yakoob Vayani
CNIC No. 42301-3342034-9
Mr. Abdul Majeed Vayani Mr. Noor Mohammad Yakoob Vayani
CNIC No. 42301-3242934-3
Mr. Abdul Sattar Yaqoob Vayani Mr. Yakoob Vayani
CNIC No. 42301-8596564-1
22 Classic Packages Mr. Abdul Qadir Mr. Abdul Sattar 10.526 7.602 - 18.128 - 8.663 0.015 8.678
Plot # 1B-1/1, Sector # 15 Korangi CNIC No. 42301-2653697-7
Industrial Area, Karachi
Mr. Muhammad Zahoor Mr. Rehmatullah
CNIC No. 42000-2551639-1
Mrs. Rabea Zahoor W/[Link]. Muhammad Zahoor
CNIC No. 42000-7258150-6
Mr. Shadman Qadir Mr. Abdul Qadir
CNIC No. 42301-8080244-9
23 Rasool Bakhsh & Company Mr. Rasool Bakhsh Mr. Karim Bakhsh 7.697 5.442 - 13.139 - 5.615 0.300 5.915
Mund Buloo, CNIC No. 52201-1057129-1
Distt: Turbat
24 Waqas Electronics Mr. Asad Ullah Mian Muhammad Usman 16.364 2.639 - 19.003 2.365 10.721 0.395 13.481
9-11 Rehman Chamber, CNIC No. 35202-2666605-5
132-Temple Road, Lahore.
25 KAZ CNG Filling Station Mr. Muhammad Khalid Mr. Muhammad Sadiq 0.494 0.313 - 0.807 - 0.559 0.067 0.626
35-Lyton Road, CNIC No. 35202-9781589-1
Lahore
Mr. Muhammad Zahid Mr. Muhammad Sadiq
CNIC No. 35202-8933914-7
Mr. Muhammad Abid Mr. Muhammad Sadiq
CNIC No. 35202-1949072-9
26 Ch. Building Material Store Mr. Muhammad Amin Mr. Atta Muhammad 1.146 1.363 - 2.509 - 0.874 0.047 0.921
Atta Muhammad Road, CNIC No. 34101-2424486-1
Grid Station (Bijli Ghar),
Mohallah Shaheenabad, Mr. Muhammad Saleem Mr. Atta Muhammad
Climixabad No. 1, Chaudhary
Gujranwala. CNIC No. 34101-2439940-9
TOTAL 453.063 180.107 - 633.170 204.683 494.562 8.907 708.152
 153

Annexure - II
ISLAMIC BANKING BUSINESS

The Bank is operating sixteen Islamic banking branches at the end of current year (2015: sixteen branches). The statement
of financial position, profit and loss account and cash flow statement of these branches (including Islamic Banking Division)
are as follows:

BSD circular letter No. 03 dated January 22, 2013 requires all Islamic Banks and Banks with Islamic Banking Branches to
present all financing, advances for assets under Islamic modes of financing and any other related items pertaining to Islamic
mode of financing under the caption Islamic Financing and Related Assets in the statement of Financial position.

(i) Statement of Financial Position 2016 2015

As at 31 December 2016 (Rupees in '000)

ASSETS
Cash and balances with treasury banks 646,512 654,429
Balances with other banks 26 28
Due from financial institutions 1,690,592 524,381
Investments 5,265,057 4,863,239
Islamic financing and related assets vi 3,727,219 3,644,898
Operating fixed assets 157,391 144,602
Due from head office 167,209 149,201
Other assets 213,831 182,807
Total assets 11,867,837 10,163,585
LIABILITIES
Bills payable 86,939 49,985
Due to financial institutions 71,538 240,202
Deposits and other accounts ii.b
- Current accounts 1,830,029 1,533,494
- Saving accounts 5,363,061 4,998,630
- Term deposits 2,896,033 2,307,565
- Others 263,677 158,626
Other liabilities 157,266 163,504
Total liabilities 10,668,543 9,452,006
NET ASSETS 1,199,294 711,579
REPRESENTED BY:
Islamic Banking Fund 1,000,000 600,000
Accumulated profit 114,918 72,012
1,114,918 672,012
Surplus on revaluation of assets 84,376 39,567
1,199,294 711,579
(ii) Profit and Loss Account
For the year ended 31 December 2016

Profit / return on financing, investments and placements earned 687,317 619,012

Return on deposits and other dues expensed ii.a (415,927) (366,286)
Net income earned before provision 271,390 252,726
Reversal of provision against non-performing financings 9,798 979
Provision for diminution in the value of investments - -
9,798 979
Net income earned after provision 281,188 253,705
Other income
Fee, commission and brokerage income 32,841 25,635
Gain on sale of securities - net 22,194 119
Other income 2,764 3,672
338,987 283,131
Other expenses
Administrative expenses 222,380 210,986
Other charges 1,689 6
Provision against other assets - 127
Profit before taxation 114,918 72,012

(ii.a) These figures have been adjusted to exclude inter segment profitability charge of Rs.48.087 million @ 6.35 % (2015: Rs.
45.593 million @ 7.87 %) in line with financial reporting requirement.

(ii.b) Deposits and other accounts include redeemable capital of Rs.8,259.094 million (31 December 2015: Rs. 7,420.146 million)
and deposits on Qard basis of Rs. 2,093.706 million (31 December 2015: Rs. 1,578.169 million). Remunerative deposits
which are on Mudaraba basis are considered as Redeemable capital and non-remunerative deposits are classified as being
on Qard basis.
Soneri Bank Limited | Annual Report 2016

Annexure - II

2016 2015
(Rupees in '000)
(iii) Cash Flow Statement
For the year ended 31 December 2016

CASH FLOW FROM OPERATING ACTIVITIES

Profit before taxation 114,918 72,012
Less: Dividend income - -
114,918 72,012
Adjustments:
Depreciation / amortisation 120,823 103,965
Reversal of provision against non-performing advances (9,798) (979)
Gain on sale of fixed assets (1,180) (930)
109,845 102,056
224,763 174,068
(Increase) / decrease in operating assets
Due from financial institutions (1,166,211) (286,475)
Islamic Financing and Related Assets-net (170,492) (442,840)
Due from Head Office (18,008) 209,452
Others assets (excluding advance taxation) (31,024) (58,393)
(1,385,735) (578,256)
Increase / (decrease) in operating liabilities
Bills payable 36,954 44,748
Due to financial institutions (168,664) 59,561
Deposits and other accounts 1,354,485 1,841,023
Other liabilities (78,250) 37,196
1,144,525 1,982,528
(16,447) 1,578,340
Income tax paid - -
Net cash (used in) / generated from operating activities (16,447) 1,578,340

CASH FLOWS FROM INVESTING ACTIVITIES

Net investments in securities (357,009) (1,540,831)
Dividend received - -
Investment in operating fixed assets (35,643) (8,820)
Proceeds from disposal of fixed assets 1,180 2,403
Net cash used in investing activities (391,472) (1,547,248)

CASH FLOWS FROM FINANCING ACTIVITIES

Funds received from Head Office 400,000 100,000
Net cash generated from financing activities 400,000 100,000

(Decrease) / Increase in cash and cash equivalents (7,919) 131,092

Cash and cash equivalents at the beginning of the year 654,457 523,365
Cash and cash equivalents at the end of the year 646,538 654,457

CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR

Cash and balances with treasury banks 646,512 654,429
Balances with other banks 26 28
646,538 654,457

(iv) Remuneration to Shariah Board members / advisor 5,290 1,332

(v) CHARITY FUND

Opening balance - -
Addition during the year 952 61
Payment / utilisation during the year (952) (61)
Closing balance - -
 155

Annexure - II

2016 2015
(Rupees in '000)
(vi) Islamic Modes of Financing

Murabaha 500,261 662,268

Assets held under Ijarah (IFAS- 2) (vi) a 268,841 229,923
Diminishing Musharaka 958,966 1,150,137
Salam 48,578 404,166
Advance against islamic financings:
- Murabaha 580,556 89,108
- Car Ijarah 57,543 28,044
- Machine Ijarah - 23,122
- Diminishing Musharaka 1,008,948 791,322
- Salam 361,515 334,267
Other Islamic modes - 1,049
Islamic financing and related assets - Gross 3,785,208 3,713,406
Provision against non-performing islamic financings (57,989) (68,508)
Islamic financing and related assets - net of provision 3,727,219 3,644,898

(vi) Assets held under Ijarah (IFAS-2)

Motor vehicles 212,732 148,903

Plant and machinery 56,109 81,020
268,841 229,923
(vii) Deposits

Deposits are generated through the following pools:

(i) Normal pool

Deposits generated under this pool are on the basis of Qard and Mudaraba

(ii) Special pool

Deposits generated under this pool are on the basis of Mudaraba from high net worth customers.

Deposits taken on a Qard basis are classified as 'Current accounts' and Deposits generated on 'Modaraba basis' are classified
as 'Savings deposits' and 'Fixed deposits'. No profit or loss is passed on to current account depositors. While the product
features of each product differ, there is usually no restriction on withdrawals or number of transactions in current and saving
accounts. In case of fixed deposits, pre-mature withdrawals can be made as per approved terms only.

(viii) Profit / (loss) distribution to depositor's pool

The Bank maintained the following pools for profit declaration and distribution during the year ended 31 December 2016:

i) Mudaraba Pool;
ia) normal pool;
ib) special pool;
ii) Musharaka Pool under SBP's Islamic Export Refinance Scheme.

Profits realised through normal / special pool are distributed between the Bank and the depositors in proportion to their
respective share in the pool. All Modaraba based deposits are fully invested in accordance with their respective Pool to
produce returns for them. In case where the Bank is unable to utilise all funds available for investment, priority is given to
the deposit account holders. Rab-ul-Maal share is distributed among depositors according to weightages assigned at the
inception of profit calculation period. Mudarib can distribute its share of profit to Rab-ul-Maal upto a maximum of 60% of their
profit as incentive profits (Hiba).

Profits are distributed from the pool such that the depositors (remunerative) only bear the risk of assets in accordance with
their respective pool during the profit calculation period. In case of loss in a pool during the profit calculation period, the
loss is distributed among the depositors (remunerative) according to their ratio of investments.

The deposits and funds accepted under the Mudaraba Pool are provided to diversified sectors and avenues of the economy
/ business mainly to 'Chemical and Pharmaceutical', 'Textile and Allied', 'Food and Allied', 'Automobile and transportation',
'Shoes and Leather', 'Electronics and electrical appliances', 'Financial' and 'Investment in Government of Pakistan Ijarah Sukuks'.
Soneri Bank Limited | Annual Report 2016

Annexure - II

2016 2015
Normal Special Total Normal Special Total
Pool Pool Pool Pool

----------------------------------------- (Rupees in '000) -----------------------------------------

Chemical and Pharmaceutical 443,771 296,964 740,735 195,596 67,049 262,645

Textile 527,129 - 527,129 606,056 - 606,056
Cement 350,000 - 350,000 29,105 537,316 566,421
Sugar - 300,000 300,000 300,000 - 300,000
GOP Ijarah Sukuk 58,175 2,100,000 2,158,175 1,930,443 1,200,000 3,130,443
Financial 1,629,451 554,037 2,183,488 542,415 165,621 708,036
Electronic and electrical appliances 11,785 - 11,785 - - -
Production and transmission of energy 827,206 1,875,000 2,702,206 748,330 913,750 1,662,080
Carpet and Rugs Manufacturer - - - 206,725 - 206,725
Glass and Ceramics - - - 213,395 - 213,395
Food and Allied 601,009 - 601,009 276,656 370,091 646,747
Services 359,403 500,000 859,403 489,144 119,164 608,308
Others 248,964 - 248,964 121,690 - 121,690
5,056,893 5,626,001 10,682,894 5,659,555 3,372,991 9,032,546

Musharaka investments from the SBP under Islamic Export Refinance Scheme (IERS) are channeled towards the export sector
of the economy and other financings as per SBP guidelines.

(ix) Key features and risk and reward characteristics of all pools

The 'Mudaraba Pool' for Local Currency caters to all Soneri Bank Limited - Islamic Banking depositors and provides profit / loss
based on Mudaraba.

The IERS Pool caters to the 'Islamic Export Refinance' requirements based on the guidelines issued by the SBP.

The risk characteristic of each pool mainly depends on the asset and liability profile of each pool.

Jointly financed by the Bank and unrestricted investments / PLS deposit account holders

This represents all earning assets of the Bank except those tagged to the Islamic Export Refinance Scheme. Major categories
include:

Funded Gains / (Loss)

Expenses on sale of Total
Income
securities
------------------------ (Rupees in '000) ------------------------

Islamic financing and related assets 238,763 - - 238,763

Investments 284,859 - - 284,859
Due from financial institutions 149,596 - - 149,596
Others 35,605 (4,674)* 22,194 53,125
708,823 4,674 22,194 726,343

* This includes initial direct cost of Rs. 4.674 million.

(x) Incentive profits (Hiba)

The Bank paid an aggregate amount of Rs 75.490 million as incentive profits (Hiba), which includes Rs 51.728 million for normal
pool and Rs. 23.762 millions for special pool during the year ended 31 December 2016. The following guidelines are approved
by the Bank's Sharia Advisor for determination of incentive profits (Hiba):

- Special weightage deposits in designated tiers / slabs in Mudaraba Pool shall be offered extra weightages outside the
Mudaraba Pool, provided the specified parameters are met ;

- The deposit deal shall be at least of Rs 100 thousands ;

- In case a Term Deposit is pre-maturely encashed, profit shall be paid at the expected rate of completed tenor;

- The payment of Hiba on deposits will be at the sole discretion of the Bank and could be decreased or / and removed any
time during the tenure of the deposit, under intimation to the customer, if the customer fails to meet the pre-requisites at
any time during the tenure of the deposit and / or the profit rate no longer remains sustainable from Bank's share; and

- The Bank shall ensure that all the operational procedures and controls to the satisfaction of Shariah are in place.
 157

(xi) Contractual maturities of mudaraba based deposit accounts

2016
Total Up to 1 Over 1 to 3 Over 3 to 6 Over Over 1 to Over 2 to Over 3 to
month Months Months 6 Months 2 Years 3 Years 5 Years
to 1 Year
------------------------------------------------------------- (Rupees in '000) --------------------------------------------------------------
Fixed Deposits 2,896,033 468,657 1,114,848 52,911 1,257,367 2,250 - -
Savings Deposits 5,363,061 5,363,061 - - - - - -
8,259,094 5,831,718 1,114,848 52,911 1,257,367 2,250 - -

Profit distribution to depositor's pool

Mudarib share Mudarib share
Profit Sharing Profit rate and
Profit rate / transferred to transferred to Mudarib Share- Mudarib Share- Profit rate /
General Remunerative Ratio weightage
return depositors depositors Net of Hiba Net of Hiba return
Depositor's Pools (Depositor: announcement
earned through Hiba through Hiba (Rs '000) (Percent) distributed
Mudarib) period
(Rs '000) (Percent)

Mudaraba Pool
Normal Pool 75.00% 5.94% 51,728 6.13% 159,090 18.87% Monthly 2.83%
Special Pool 75.00% 7.23% 23,762 9.13% 41,288 15.87% Monthly 5.99%
Total 75.00% 6.42% 75,490 6.84% 200,378 18.35% Monthly 4.00%

Ratio of Share of profit HIBA Profit rate and Profit rate /

weightage of to SBP (Rs. in '000) weightage return
IERS Musharaka Pool Bank to SBP (Rs. in '000) announcement earned by
period SBP

Musharaka Pool SBP's Islamic Export Refinance Scheme

0.3456 2,358.979 587.591 Quarterly 2.59%
0.7402 4,428.391 78.657 Quarterly 3.86%
1.4599 3,110.393 5.164 Quarterly 6.55%
0.0858 705.031 0.228 Quarterly 8.58%

Parameters used for allocation of profit, charging expenses and provisions, etc. along with a brief description of their major
components:

Income generated from relevant assets, calculated at the end of each month is first set aside for the Musharaka pool arrangement
between the Bank and the State Bank of Pakistan. It is then allocated between the participants of the pool as per the agreed
weightages and rates.

The Mudaraba Pool profit is divided between the Bank and depositors in the ratio of BankÕs average equity (pertaining to Islamic
banking branches) and average depositors balances commingled in each pool on a pro-rata basis. The depositors' share of
profit is allocated amongst them on the basis of weightages declared before start of each month, after deduction of a mudarib
fee. During the year ended 31 December 2016, the Bank charged 25% (2015: 25%) of the profit as Mudarib fee. These weightages
are declared by the Bank in compliance with the requirements of the SBP and Shariah.

The allocation (of income and expenses to different pools) is made on a pre-defined basis and accounting principles / standards.
Provisions against any non-performing assets of the pool are not passed on to the pool.

(xii) Allocation of Income and Expenses to Depositors' Pools

a) Following are material items of revenues, expenses, gains and losses

2016 2015
(Rupees in '000)

Profit / return earned on financings, investments and placements 673,218 609,271

Other income (including other charges) 57,799 29,307
Directly related costs attributable to pool (4,674) (1,453)
726,343 637,125

b) Following weightages have been assigned to different products under the Mudaraba Pool during the year:

Percentage of Minimum Maximum

total Mudaraba Weightage Weightage
based deposits

Savings - Soneri Munafa Account 63% 0.3750 1.1000

Savings - Soneri Bachat Account 2% 0.3750 0.5417
Savings - Assan Account 6% 0.3750 0.5417
Time Deposits - Soneri Meadi 30% 0.6917 1.1167

The Bank shares all its revenue generated through banking operations with the deposit account (pertaining to Islamic Operation) holders.
Soneri Bank Limited | Annual Report 2016

Disposal of fixed assets (refer note 11.1.3)

Disposals / deletions of property and equipment with original cost or book value in excess of rupees one million or two hundred fifty thousand
respectively (whichever is less):

Particulars Cost Book value Sale price / Mode of settlement / Particulars of

insurance disposal buyers / insurance
proceeds companies
-------------- (Rupees in '000) --------------

Leasehold building
------------- do ------------- 83,538 54,489 - Write off
------------- do ------------- 40,495 17,430 17,003 Tender Muhammad Kashif
------------- do ------------- 25,206 14,577 - Write off
------------- do ------------- 21,215 13,838 - Write off
------------- do ------------- 15,471 6,625 - Write off
------------- do ------------- 5,334 3,704 - Write off
------------- do ------------- 4,893 3,191 - Write off
------------- do ------------- 4,320 1,700 - Write off
------------- do ------------- 3,567 2,058 - Write off
------------- do ------------- 3,025 1,746 - Write off
------------- do ------------- 2,868 1,243 1,204 Tender Muhammad Kashif
------------- do ------------- 2,524 1,686 - Write off
------------- do ------------- 2,418 1,405 - Write off
------------- do ------------- 2,132 1,211 - Write off
------------- do ------------- 2,092 1,401 - Write off
------------- do ------------- 1,795 1,098 - Write off
------------- do ------------- 1,745 - - Write off
------------- do ------------- 1,532 1,024 - Write off
------------- do ------------- 1,407 978 - Write off
------------- do ------------- 1,368 916 - Write off
------------- do ------------- 1,094 474 459 Tender Muhammad Kashif
------------- do ------------- 1,030 745 - Write off
------------- do ------------- 878 677 - Write off
------------- do ------------- 868 501 - Write off
------------- do ------------- 745 498 - Write off
------------- do ------------- 704 504 - Write off
------------- do ------------- 682 300 286 Tender Muhammad Kashif
------------- do ------------- 617 467 - Write off
------------- do ------------- 598 415 - Write off
------------- do ------------- 578 380 - Write off
------------- do ------------- 569 329 - Write off
------------- do ------------- 487 298 - Write off
------------- do ------------- 476 322 - Write off
------------- do ------------- 434 251 - Write off
------------- do ------------- 392 278 - Write off
------------- do ------------- 363 289 - Write off
Items with WDV of below Rs.250,000/-
or cost of less than Rs.1,000,000/- 2,044 1,157 298 Various Various
239,504 138,205 19,250

Leasehold Improvement
------------- do ------------- 3,287 1,380 - Write off
------------- do ------------- 3,287 2,548 - Write off
------------- do ------------- 2,947 1,632 - Write off
------------- do ------------- 2,203 1,859 - Write off
------------- do ------------- 1,970 1,617 - Write off
------------- do ------------- 1,479 1,059 - Write off
------------- do ------------- 1,162 901 - Write off
------------- do ------------- 935 767 - Write off
------------- do ------------- 833 350 - Write off
------------- do ------------- 781 659 - Write off
------------- do ------------- 762 578 173 Tender Usama Steel Work
------------- do ------------- 514 339 - Write off
------------- do ------------- 437 339 - Write off
------------- do ------------- 380 272 - Write off
------------- do ------------- 317 265 - Write off
Items with WDV of below Rs.250,000/-
or cost of less than Rs.1,000,000/- 1,182 813 4 Various Various
22,476 15,378 177

Furniture and fixtures

------------- do ------------- 1,003 - - Write off
Items with WDV of below Rs.250,000/-
or cost of less than Rs.1,000,000/- 4,969 1,265 442 Various Various
5,972 1,265 442
 159

Disposal of fixed assets (refer note 11.1.3)

Particulars Cost Book value Sale price / Mode of settlement / Particulars of

insurance disposal buyers / insurance
proceeds companies
-------------- (Rupees in '000) --------------
Electrical office and computer
equipment
------------- do ------------- 17,721 886 52 Tender S.M Umer
------------- do ------------- 12,989 - 38 Tender S.M Umer
------------- do ------------- 6,341 317 19 Tender S.M Umer
------------- do ------------- 5,240 - 15 Tender S.M Umer
------------- do ------------- 4,537 - 13 Tender S.M Umer
------------- do ------------- 4,537 - 13 Tender S.M Umer
------------- do ------------- 4,123 - 12 Tender S.M Umer
------------- do ------------- 3,385 - 10 Tender S.M Umer
------------- do ------------- 3,385 - 10 Tender S.M Umer
------------- do ------------- 3,385 - 10 Tender S.M Umer
------------- do ------------- 3,385 - 10 Tender S.M Umer
------------- do ------------- 3,371 - 10 Tender S.M Umer
------------- do ------------- 3,371 - 10 Tender S.M Umer
------------- do ------------- 2,926 - 6 Tender Touch Point (Pvt) Ltd
------------- do ------------- 2,506 - - Write off
------------- do ------------- 2,294 - - Write off
------------- do ------------- 2,280 - - Write off
------------- do ------------- 2,244 - - Write off
------------- do ------------- 2,016 - 6 Tender S.M Umer
------------- do ------------- 2,016 - 6 Tender S.M Umer
------------- do ------------- 2,016 - 6 Tender S.M Umer
------------- do ------------- 2,016 - 6 Tender S.M Umer
------------- do ------------- 2,016 - 6 Tender S.M Umer
------------- do ------------- 2,016 - 6 Tender S.M Umer
------------- do ------------- 1,798 - - Write off
------------- do ------------- 1,790 - 5 Tender S.M Umer
------------- do ------------- 1,790 - 5 Tender S.M Umer
------------- do ------------- 1,784 - 5 Tender S.M Umer
------------- do ------------- 1,784 - - Write off
------------- do ------------- 1,658 - 5 Tender S.M Umer
------------- do ------------- 1,658 - 5 Tender S.M Umer
------------- do ------------- 1,658 - 5 Tender S.M Umer
------------- do ------------- 1,553 - - Write off
------------- do ------------- 1,519 - 4 Tender S.M Umer
------------- do ------------- 1,519 - 4 Tender S.M Umer
------------- do ------------- 1,408 - 6 Tender Touch Point (Pvt) Ltd
------------- do ------------- 1,314 - 6 Tender Touch Point (Pvt) Ltd
------------- do ------------- 1,235 - 4 Tender S.M Umer
------------- do ------------- 1,205 - 6 Tender Touch Point (Pvt) Ltd
------------- do ------------- 1,190 - 4 Tender S.M Umer
------------- do ------------- 1,190 - 4 Tender S.M Umer
------------- do ------------- 1,183 - 7 Tender Touch Point (Pvt) Ltd
------------- do ------------- 1,137 - 7 Tender Touch Point (Pvt) Ltd
------------- do ------------- 1,128 - 3 Tender S.M Umer
------------- do ------------- 1,111 - 9 Tender Touch Point (Pvt) Ltd
------------- do ------------- 1,091 55 3 Tender S.M Umer
------------- do ------------- 1,049 - 9 Tender Touch Point (Pvt) Ltd
------------- do ------------- 1,028 - 135 Tender Touch Point (Pvt) Ltd
------------- do ------------- 1,017 - 3 Tender S.M Umer
------------- do ------------- 1,010 - 6 Tender Touch Point (Pvt) Ltd
------------- do ------------- 1,004 - 9 Tender Touch Point (Pvt) Ltd
Items with WDV of below Rs.250,000/-
each or cost of less than Rs.1,000,000/- 174,533 1,222 3,539 Various Various
311,460 2,480 4,062

Motor vehicles
------------- do ------------- 3,979 - 2,350 Tender Muhammad Altaf

Items with WDV of below Rs.250,000/-

each or cost of less than Rs.1,000,000/- 13,490 - 9,245 Various Various
17,469 - 11,595
596,881 157,328 35,526
Soneri Bank Limited | Annual Report 2016

Particulars of investment in Term Finance Certificates and Sukuk Bonds - (refer note 9.11) Annexure - IV
Total Balance as Balance as
Number of Paid up paid up
Certificates value per at 31 at 31 Name of
value December December Chief Executive
Name of Investee held certificate (before Profit Principal Redemption
2016 2015 Officer
redemption)
2016 2015 (Rupees) (Rs. in ‘000) (Rupees in ‘000)
a) Held to maturity securities
(i) Listed Term Finance Certificates
Azgard Nine Limited 10,000 10,000 5,000 50,000 - 6 months Kibor + 1.00% (1-2 years) 0.88% of principal amount in 42 months, 1.63% from
- 6 months Kibor + 1.25% (3-5 years) 48 months to 66 months remaining principal in four equal
- 6 months Kibor + 1.00% (6-7.5 years) semi annual instalments starting from the 72nd month
from the date of issue. 16,269 16,269 Mr. Ahmed Shaikh
(ii) Un-listed Term Finance Certificates
Agritech Limited 1,488 1,488 5,000 7,440 11.00 % Per Annum 0.02% of principal amount in the first 60 months and
remaining principal paid in 66th month from the date of issue. 7,440 7,440 Mr. Faisal Muzammil
Azgard Nine Limited 2,150 2,150 5,000 10,750 NIL 10% of principal amount from 24 months to 36 months ,
15% from 42 months to 48 months remaining principal in
two equal semi annual instalments starting from the
54th month from the date of issue. 10,750 10,750 Mr. Ahmed Shaikh
Bank Al Falah Limited - 4th issue 10,000 10,000 5,000 50,000 6 months Kibor + 2.50% 0.02% of principal amount in the first 78 months and
remaining principal in three equal semi annual instalments
starting from the 84th month from the date of issue. 33,247 49,880 Mr. Atif Bajwa
Faysal Bank Limited 2nd Issue 15,000 15,000 5,000 75,000 6 months Kibor + 2.25% 0.02% of principal amount in the first 60 months and
remaining principal in four equal semi annual instalments
starting from the 66th month from the date of issue. 37,425 74,850 Mr. Nauman Ansari
Habib Bank Limited 100 - 1,000,000 99,980 6 months Kibor + 0.50% 0.02% of principal amount in the first 108 months and
remaining principal in two equal semi annual instalments
starting from the 114th month from the date of issue. 99,988 - Mr. Nouman K. dar
JS Bank Limited 50,000 - 5,000 450,000 6 months Kibor + 1.40% 0.02% of principal amount in the first 72 months and
remaining principal in two equal semi annual instalments
starting from the 78th month from the date of issue. 450,000 - Mr. Khalid Imran
Standard Chartered Bank (Pakistan) Limited 40,000 40,000 5,000 200,000 6 months Kibor + 0.75% Principal paid in two equal semi annual instalments
starting from the 114th month from the date of issue. 200,000 200,000 Mr. Shahzad Dada
(iii) Listed Sukuk Bonds
Engro Fertilizers Limited 32,300 32,300 5,000 161,500 6 months Kibor + 1.75% 2.50% of principal amount in 24 months , 10.00% from
30 months to 36 months remaining principal in four equal
semi annual instalments starting from the 42nd month
from the date of issue. 145,350 153,425 Mr. Ruhail Muhammad
K-Electric Limited AZM Sukuk 80,000 80,000 5,000 400,000 3 months Kibor + 2.25% Principal paid in 36 months from the date of issue 400,000 400,000 Mr. Tayyab Tareen
(iv) Un-listed Sukuk Bonds
AlBaraka Bank (Pakistan) Limited 100 100 1,000,000 100,000 6 months Kibor + 1.25% Principal paid in fourteen equal semi annual instalments 71,428 85,716 Mr. Shafqaat Ahmed
Amreli Steels Limited - 10,000 5,000 50,000 3 months Kibor + 2.50% Principal amount of first instalment due from 27th month
to 60th month remaining principal in eight equal
quarterly instalments starting from the 63rd month
from the date of issue. - 19,000 Mr. Abbas Akber Ali
Eden Housing Limited 10,000 10,000 5,000 50,000 3 months Kibor + 2.5% 12.50% of principal amount from 18 to 24 months,
0.38% in 15 months, 2.27% from 18 to 21 months,
2.60% in 24 months, 4.72% from 27 months to 36 months
5.62% from 39 months to 48 months and remaining
principal in four equal quarterly instalments starting from
the 51st month from the date of issue. 6,560 6,560 Mr. Muhammad Amjad
Liberty Power Tech Limited 1,099,430 1,099,430 100 109,943 3 months Kibor + 3.00% Quarterly instalments starting from 01 April 2011 65,335 76,032 Mr. Ashraf Salim Mukaty
Pak Elektron Limited - 10,000 5,000 50,000 3 months Kibor + 1.75% with floor of Principal paid in six equal quarterly instalments starting
10% and cap of 25% from the 93rd month from the date of issue. - 10,714 Mr. Murad Saigal
Pakistan Mobile Communication Limited 100,000 100,000 5,000 500,000 3 months Kibor + 0.88% Principal paid in twelve equal quarterly instalments
starting from the 27th month from the date of issue. 500,000 500,000 Mr. Aamir Ibrahim
Three Star Hosiery Mills (Pvt) Limited 5,100 5,100 5,000 25,500 3 months Kibor + 3.25% with floor Principal paid in seven equal semi annual instalments
of 11% and Cap of 25% starting from the 24th month from the date of issue. 25,215 25,215 Mr. Muhammad Rasheed
WAPDA 4,000 4,000 5,000 20,000 6 months Kibor + 0.35% Principal paid in 80 months from the date of issue 19,860 19,860 Lt. Gen.(R) Muzammil Hussain
(b) Available for sales securities
(i) Listed Sukuk Bonds
K-Electric Limited Sukuk-ul-Shirkah 100,000 124,686 5,000 500,000 3 months Kibor + 1.00% Principal paid in twenty equal quarterly instalments
starting from the 27th month from the date of issue. 500,000 623,430 Mr. Tayyab Tareen
(ii)Un-listed Sukuk Bonds
AlBaraka Bank (Pakistan) Limited 194 194 1,000,000 80,571 6 months Kibor + 1.25% Principal paid in fourteen equal semi annual instalments 53,571 80,570 Mr. Shafqaat Ahmed
Meezan Bank Limited 425 - 1,000,000 425,000 6 months kibor + 0.50% Principal paid in 120 months from the date of issue 425,000 - Mr. Irfan Siddiqui
Neelum Jhelum Hydro Power 9,750
Company (Pvt) Limited - 100,000 975,000 6 months kibor + 1.10% Principal paid in sixteen equal semi annual instalments
starting from the 30th month from the date of issue. 975,000 - Muhammad Zubair
(c) Held for trading securities
(i) Un-listed Term Finance Certificates
Askari Bank Limited - 5th issue - 5,000 5,000 24,990 6 months Kibor + 1.20% 0.36% of principal amount in the first 108 months and
remaining principal in two equal semi annual instalments
starting from the 114th month from the date of issue. - 25,038 Syed Majeedullah Hussaini
4,042,438 2,384,749
 161

Report of
ShariÕah Board
For the year ended 31 December 2016
In the name of Allah, the Beneficent, the Merciful

While the Board of Directors and Executive Management are solely responsible to ensure that the operations of Soneri Bank Limited - Islamic
Banking (Mustaqeem) (herein referred as ÒThe BankÓ) are conducted in a manner that comply with Shariah principles at all times, we are required
to submit a report on the overall Shariah compliance environment of Soneri Bank Limited - Islamic Banking (Mustaqeem).

To form an opinion on the overall Shariah Compliance environment as required by the regulatory framework, the Shariah Compliance Department
of the bank needs to carry out reviews, on test check basis, of each class of transactions, the relevant documentation and process flows. Further,
the report of the Internal Shariah audit also form the basis of this report.

Based on the above, we are of the view that:

i. The Bank has a mechanism in place to ensure Shariah compliance in their overall operations. We hope to continuously improve this
mechanism with adequately staffed Shariah Compliance Department (SCD) as per the needs of the Bank.

ii. The Bank has overall complied with Shariah rules and principles in the light of fatawa, rulings and guidelines issued by its Shariah Board.

iii. The Bank has overall complied with directives, regulations, instructions and guidelines related to Shariah compliance issued by SBP in
accordance with the rulings of SBP's Shariah Board.

iv. The bank has a considerable system in place to ensure that any earnings realized from prohibited sources are not made part of Bank's
income. A charity of Rupees nine hundred fifty two thousand four hundred twenty and ten paisas (PKR 952,420.10) has been disbursed
in charitable purposes.

v. The Bank has complied with the SBP instructions on profit and loss distribution and pool management. However, a comprehensive automated
solution for profit distribution on multiple pools with proper asset tagging is in progress to be implemented. The management of the Bank
must complete this development to ensure smooth profit distribution.

vi. It is pertinent to mention that the previous Resident Shariah Board Member had resigned in the first half of the year. However, the executive
management stepped up to place the Shariah controls in day to day transactions through close coordination with the Shariah Board.

vii. During the year under review, the constitution of SCD was delayed due to limitations which have been subsequently resolved because of
the determination of the board of directors and the executive management towards the Shariah Compliance in the Bank. Alhamdulillah.

viii. Primarily the Bank employs the traditional products for its financing such as Ijarah, Murabaha, and Diminishing Musharakah. It is encouraging
that a Shariah compliant alternative to running finance, named Running Musharakah, has been developed. With this product, the Bank
will hopefully be able to fulfill the needs of the current business environment.

ix. Although the bank has noticeably strengthened its SCD and thereby improved the overall outlook of the Shariah environment, however,
continuous improvements in this area and further enhancement of the Internal Shariah Audit and product development activities is still
needed.

x. It is recommended to make Islamic Banking training mandatory for all staff in the Bank.

Based on the Shari'ah review of transactions, in our opinion, the general conduct of the Bank activities is Shariah Compliant. We pray to Almighty
Allah, for the success of Islamic Banking and provide us the guidance to adhere to his Shariah in day to day operations and forgive our mistakes.

And Allah knows the best

Mufti Ehsan Waquar Ahmad

Chairman Shariah Board

Mufti Muhammad Zahid Mufti Bilal Ahmed Qazi

Resident Shariah Board Shariah Board Member

Lahore: 15 February 2017

Soneri Bank Limited | Annual Report 2016
 163

Notice of the
Annual General Meeting
Notice is hereby given that Twenty Fifth (25th) Annual General Meeting of Soneri Bank Limited will be held at Nishat Hotel, 9 A, Gulberg-III,
Lahore on Tuesday, 28 March 2017 at 9:00 a.m. to transact the following business:

Ordinary Business

1) To confirm the minutes of last Annual General Meeting held on 25 March 2016.

2) To receive, consider and adopt Annual Audited Accounts together with the Directors'and Auditors' Reports thereon for the year ended 31
December 2016.

3) To approve and declare the final cash dividend of Rs.1.25/- per share (i.e.12.50%) for the financial year ended 31 December 2016 as
recommended by the Board of Directors in its 154th meeting held on 15 February 2017.

4) To elect seven (7) Directors of the Bank in accordance with the provisions of Section 178 of the Companies Ordinance, 1984 for a term of
three years commencing from 28 March 2017. Following are the retiring directors, who are eligible to offer themselves for re-election:

i. Mr. Alauddin Feerasta ii. Mr. Nooruddin Feerasta

iii. Mr. Muhammad Rashid Zahir iv. Mr. Amar Zafar Khan
v. Syed Ali Zafar vi. Mr. Manzoor Ahmed
vii. Mr. Shahid Anwar

5) To appoint Auditors of the Bank for the year ending 31 December 2017 till the conclusion of next Annual General Meeting and fix their
remuneration. Retiring Auditors, M/s. A.F. Ferguson & Co., Chartered Accountants, being eligible, have offered themselves for re-appointment.

6) To transact such other ordinary business as may be placed before the meeting with the permission of the Chair.

Special Business

7) To consider and approve the amendments to be made in Articles of Association of the Bank for the purpose of compliance with the
mandatory e-voting requirements as prescribed in the Companies (E-Voting) Regulations, 2016 issued vide SRO 43 (I)/2016 dated 22.01.2016
and if thought fit to pass the following resolution as special resolution:

ÒRESOLVED THAT the Articles of Association of the Bank be amended by adding following new clauses as 46(a), 46(b) and 48(a):

46(a) E-Voting: Members may exercise voting rights at General Meetings through electronic means, if the Bank receives the requisite
demand for poll in accordance with the Companies (E-voting) Regulations, 2016 and any amendments made from time to time,
hereinafter refer to as E-Voting. The Bank shall provide E-voting facility in accordance with the mandatory requirements prescribed
under said Regulations and amendments made to them from time to time by the Securities & Exchange Commission of Pakistan,
irrespective of anything contained in any other provisions of these Articles and anything contradictory therein.

46(b) Notwithstanding anything contained in these Articles, in case of E-Voting both members and non-members can be appointed as
proxy and the instrument appointing shall be deposited, in writing, with the Bank in the form and within such timelines as prescribed
by the Commission from time to time.

48(a) E-Voting: An instrument of proxy in relation to e-voting shall be in the following form:
I/We ----------of-----------,being a member of -----------,holder of-----------ordinary share(s) as per Register Folio No.----------hereby opt
for e-voting through intermediary and hereby consent the appointment of execution officer -----------as proxy and will exercise e-
voting as per the Companies (E-Voting) Regulations, 2016 and hereby demand for poll for resolutions.

My secured email address is----------------, please send login details, password and electronic signature through email.

___________________
Signature of Member
(Signature should agree with the specimen signature registered with the Bank)

Signed in the presence of:

__________________ ___________________
Signature of Witness Signature of Witness

(The proxy e-voting form shall be required to be witnessed by two persons whose names, address and CNIC number shall be
mentioned on the form.)

FURTHER RESOLVED THAT the Company Secretary be and is hereby authorized to do all acts, deeds and things necessary to
complete the legal formalities and file the required documents as maybe necessary or ancillary for the purpose of implementing
the aforesaid resolution.Ó
Soneri Bank Limited | Annual Report 2016

Notice of the
Annual General Meeting
8) To approve transmission of annual audited financial statements, auditor's report and directors' report etc. (Òannual audited accountsÓ) along
with notice of general meeting to members through CD/DVD/USB at their registered address as allowed by the Securities and Exchange
Commission of Pakistan (SECP) and if thought fit to pass the following resolution as ordinary resolution:

ÒRESOLVED THAT transmission of annual audited financial statements, auditor's report and directors' report etc. (Òannual audited
accountsÓ) along with notice of general meeting to members at their registered address in soft form i.e. CD/DVD/USB as notified by SECP
vide its SRO No. 470 (1)/2016 dated May 31, 2016 be and is hereby approved.Ó

9) To approve payment of remuneration to Non-Executive Directors for attending the Board and its Committees meetings in compliance with
the State Bank of Pakistan BPRD Circulars No.14 and 09 dated 07.08.2009 and 06.05.2015 respectively.

A statement under Section 160(1)(b) of the Companies Ordinance, 1984 pertaining to Special Businesses alongwith the Special Resolutions
proposed to be passed, are being sent to the shareholders with the Notice.

BY ORDER OF THE BOARD

Muhammad Altaf Butt

Company Secretary

Lahore: 15 February 2017

NOTES:
1. Share Transfer Books of the Bank will remain closed from 22 March 2017 to 28 March 2017 (both days inclusive).

2. 2.1. In accordance with Section 178 (1) of the Companies Ordinance, 1984 the number of Directors to be elected has been fixed as seven
(7). The retiring Directors are eligible to offer themselves for re-election. Mr. Mohammad Aftab Manzoor, President/Chief Executive
Officer shall continue to be a deemed Director in terms of Article 54 of the Articles of Association of the Bank read with Sub-section
(2) of Section (200) of the Companies Ordinance, 1984.

2.2 In terms of Section 178(3) of the Companies Ordinance, 1984, any person who seeks to contest an election to the office of Director,
shall file with the Bank, not later than fourteen (14) days before the date of this meeting, a notice of his/her intention to offer himself/herself
for election as a Director together with (a) consent on Form-28 (b) declaration with consent to act as Director in the manner as provided
in the Code of Corporate Governance 2012.

2.3 In terms of the State Bank of Pakistan (the ÒSBPÓ) BPRD Circular No. 4 of 2007 dated 23 April 2007, on Fit and Proper Test (FPT),
appointment of the directors require prior clearance in writing from State Bank of Pakistan, and all requests for seeking approval of
SBP for appointment of directors of the Bank should be routed through the Bank alongwith information as per proforma ÒFit and Proper
TestÓ given in the above circular.

The copies of the proforma and other documents complete in all respects must be submitted to the Bank not later than 14 days before
the date of this meeting for submission to the SBP.

2.4 Any person who seeks to contest the election to the office of a director, whether he is a retiring director or otherwise, shall undertake
and confirm to the Bank that such person fulfills all the requirements and criteria for being elected to the office of a director of the
Bank and that such person does not violate any of the provisions or conditions prescribed by SBP for holding such office and further
that such person shall fully comply with all the SBP Directives issued or to be issued by the SBP in the form of circulars, notifications,
directions, letters, instructions and other orders. In addition, he will also be evaluated on the basis of the BankÕs mechanism for
appointment of Non-Executive Directors and may be asked to provide such further information, as may be deemed necessary.

3. A member entitled to attend and vote at this meeting may appoint another member as his or her proxy to attend and vote. Proxies, in order
to be effective, must be received at the registered office of the Bank not less than 48 hours before the time of holding the meeting. Proxy
form shall be witnessed by two persons whose names, addresses and Computerized National Identity Card (CNIC) numbers shall be
mentioned on the form. Proxy form is enclosed herewith.

4. The CDC account/sub account holders shall have to produce their original Computerized National Identity Card (CNIC) or original passport
at the time of attending the meeting for identification purpose, alongwith participant's I.D Number and their Account No. in CDS.

In case of corporate entity, the Board of Directors' resolution/power of attorney with specimen signature of the nominee together with the
original proxy form duly filled in must be received at the registered office of the Bank not less than 48 hours before the time of holding the
meeting. The nominees shall produce their original CNIC or original passport at the time of attending the meeting for identification purpose.

5. Shareholders are requested to notify change in their addresses, if any, to our Share Registrar, M/s. THK Associates (Pvt.) Ltd, 1st Floor,
40-C, Block-6, P.E.C.H.S. Karachi.
 165

Notice of the
Annual General Meeting
6. Mandatory submission of CNIC

Those shareholders who have not yet submitted a valid copy of their CNIC, are once again requested to submit the same immediately to
our Share Registrar at the address mentioned at Sr. No.5 above in order to meet the mandatory requirement of the SECP, SRO 831(I)/2012
dated July 05, 2012 which requires that the dividend warrant should bear CNIC number of the member.

7. Transmission of Audited Financial Statements & Notice Of Annual General Meeting Through E-Mail

As per the directives issued by the Securities and Exchange Commission of Pakistan (ÒSECPÓ) vide S.R.O.787(1)2014 dated 08 September
2014, companies are allowed to circulate their annual balance sheet and profit & loss account, auditor's report and directors' report etc.
(ÒAudited Financial StatementsÓ) along with Notice of Annual General Meeting (ÒNoticeÓ) to their shareholders through email.

In this regard, response from very few shareholders was received to our Circular dated 12.01.2015. If you wish to receive Bank's Annual
Report via email in future, you are requested to fill the consent form and return it to our Share Registrar at the address mentioned at Sr.
No.5 above. Consent form may be accessed at [Link]

8. Increase in withholding tax on dividend income for Non-Filers and payment cash dividend through electronic mode

The Shareholders are hereby informed that pursuant to amendments in Section 150 of the Income Tax Ordinance, 2001 through Finance
Act, 2016, Income Tax will be deducted at source @ 12.50% for filers and @20.00% for non-filers of income tax return (determined as per
ÒActive Tax Payer List (ATL)Ó available on Federal Board of Revenue's website) from the dividend amount, if any.

In case of joint account, each holder is to be treated individually as either a filer or non-filer and tax will be deducted on the basis of
shareholding of each joint holder as may be notified by the shareholder, in writing as follows, to our Share Registrar at the address
mentioned above. In case no such notification is received by us, equal deduction of tax will be made where proportionate holding is
not available with us.

Principal Shareholder Joint Shareholder

Company Name Folio/CDS Total Shareholding Shareholding
A/c. No. Shares Name & Name &
proportion proportion
CNIC No. CNIC No.
(No, of Shares) (No, of Shares)

The CNIC number/NTN details is now mandatory and is required for checking the tax status as per the Active Taxpayers List (ATL) issued
by Federal Board of Revenue (FBR) from time to time.

9. Deposit of Physical shares into CDC Account

The Shareholders having shares in physical form are advised to open CDC sub-account with any of the brokers or Investor Account directly
with the CDC to place their shares in scrip-less form, this will facilitate them in many ways including safe custody and sale of shares at
any time they want, as the trading of physical shares is not permitted as per existing regulations of the Stock Exchange.

10. Video Conference Facility for attending Annual General Meeting

As per the SECP's Circular No.10 dated 21.05.2014, members may avail video conference facility subject to fulfillment of certain requirements
& procedures.

The members who wish to attend Annual General Meeting via video conference, may send their consent on the below format to the Bank
at its registered office address.

If the Bank receives consent from members holding in aggregate 10% or more shareholding residing at a geographical location, to participate
in the meeting through video conference at least 10 days prior to date of the meeting, the Bank will arrange video conference facility in
that city subject to availability of such facility in that city.

Consent Form for Video Conference Facility

ÒI/We ----------------------------------------of----------------------, being a member of Soneri Bank Limited, holder of -------------------Ordinary
shares as per registered Folio/CDC Account No.-------------------hereby opt for video conference facility at -------------------------------
(geographical location).

___________________
Signature of Member
Soneri Bank Limited | Annual Report 2016

Notice of the
Annual General Meeting
11. Availability of Audited Financial Statements & Election related information on the Bank's website

The audited financial statements of the Bank for the year ended 30 December 2016 have been made available on the Bank's website
[Link], in addition to annual and quarterly financial statements for the prior years. Notice of 25th Annual General Meeting
along with statement under Section 160(1)(b) of the Companies Ordinance, 1984 is also placed on the web portal of the Bank.

Further, election related documents shall also be placed & will remain available as per the timelines advised vide SRO(I)/2015 dated
10.12.2015 by the Securities & Exchange Commission of Pakistan.

Statement under Section 160(1)(b) of the Companies Ordinance, 1984

This statement sets out the material facts concerning the special businesses to be transacted at Twenty Fifth (25th) Annual General Meeting
of Soneri Bank Limited to be held on 28 March 2017.

Agenda Item No. 7

Amendments in the Articles of Association of the Bank

To give effect to the Companies (E-Voting) Regulation 2016, shareholders' approval is being sought to amend the Articles of Association of
the Bank to enable the Shareholders to appoint non-members as their proxies in line with the requirements of e-voting regulations issued by
the Securities & Exchange Commission of Pakistan.

Agenda Item No. 8

Transmission of Annual Audited Financial Statements through CD/DVD/USB

The SECP through SRO 470 (1)/2016 dated May 31, 2016 has allowed companies to circulate the annual balance sheet and profit and loss
account, auditor's report and directors report etc. (Òannual audited accountsÓ) along with notice of general meeting to its shareholders in
electronic form through CD/DVD/USB at their registered addresses. This would result in timely delivery of Annual Audited Accounts to the
shareholders.

The Bank has placed on its website i.e. [Link] a standard request form containing postal and e-mail address of Company
Secretary/Share Registrar, so that shareholders may request a hard copy of the Annual Audited Accounts. The Bank will provide one hard
copy free of cost to the requesting shareholder at their registered address within one week of the request.

Agenda Item No. 9

Payment of remuneration to Non-Executive Directors for attending the Board and its Committees meetings

The State Bank of Pakistan (SBP), Banking Policy & Regulations Department vide its BPRD Circulars No.14 and 09 dated 07.08.2009 and
06.05.2015 respectively, has allowed the Banks to pay a reasonable and appropriate remuneration to their Non-Executive Directors for attending
the Board or its committees meetings. Such remuneration shall be approved by the shareholders on a pre or post facto basis in the Annual
General Meeting (AGM).

For compliance of the SBP's directive, the following draft resolution is proposed to be passed by the shareholders at the 25th AGM as Ordinary
Resolution:

ÒRESOLVED THAT approval for the payment of remuneration be and is hereby accorded to Non-Executive Directors of Soneri Bank Limited
for attending the Board and Board committees meetings @ Rs.75,000 (net of tax) per meeting effective from
15 February 2017 as approved by the Board of Directors in its 154th meeting held on 15 February 2017.Ó

Inspection of Documents:

The copies of the existing and amended Memorandum & Articles of Association have been kept at the registered office of the Bank which
may be inspected on any working day during business hours till the date of 25th Annual General Meeting.

Interest of Directors:

The Directors of the Bank have no direct or indirect interest in the above mentioned special businesses that would require further disclosure
except to the extent of their meeting fee as well as shareholding in the Bank.
167
Soneri Bank Limited | Annual Report 2016

FORM 34
PATTERN OF HOLDING OF THE SHARES HELD BY THE SHAREHOLDERS (CDS AND PHYSICAL)
AS AT 31 DECEMBER 2016 (SECTION 236)
Shareholding
No. of Total
From To
Shareholders Shares Held

987 1 - 100 35,145

1308 101 - 500 358,406
1099 501 - 1000 864,193
2115 1001 - 5000 4,807,150
1461 5001 - 10000 11,935,942
605 10001 - 15000 7,093,354
152 15001 - 20000 2,639,384
68 20001 - 25000 1,522,504
47 25001 - 30000 1,289,144
27 30001 - 35000 896,564
16 35001 - 40000 609,444
13 40001 - 45000 554,813
10 45001 - 50000 471,150
22 50001 - 55000 1,156,518
11 55001 - 60000 626,748
9 60001 - 65000 555,957
5 65001 - 70000 331,965
5 70001 - 75000 361,807
7 75001 - 80000 541,416
3 80001 - 85000 247,084
3 85001 - 90000 261,407
2 90001 - 95000 183,516
12 95001 - 100000 1,182,494
2 100001 - 105000 205,916
5 105001 - 110000 544,869
3 110001 - 115000 335,636
4 115001 - 120000 467,678
1 120001 - 125000 122,100
1 125001 - 130000 128,024
2 130001 - 135000 266,404
1 135001 - 140000 137,875
2 140001 - 145000 282,983
1 145001 - 150000 147,502
1 150001 - 155000 154,000
2 155001 - 160000 317,550
3 160001 - 165000 492,056
1 170001 - 175000 170,940
1 185001 - 190000 189,835
4 195001 - 200000 800,000
1 200001 - 205000 203,002
1 210001 - 215000 214,864
1 215001 - 220000 215,730
1 230001 - 235000 232,268
2 235001 - 240000 471,562
1 240001 - 245000 243,269
1 250001 - 255000 250,004
1 275001 - 280000 276,000
1 280001 - 285000 281,196
2 285001 - 290000 577,342
2 290001 - 295000 584,735
1 295001 - 300000 295,838
1 320001 - 325000 322,522
 169

FORM 34
PATTERN OF HOLDING OF THE SHARES HELD BY THE SHAREHOLDERS (CDS AND PHYSICAL)
AS AT 31 DECEMBER 2016 (SECTION 236)
Shareholding
No. of Total
From To
Shareholders Shares Held

1 335001 - 340000 336,611

1 350001 - 355000 353,709
1 355001 - 360000 356,000
2 365001 - 370000 733,246
1 375001 - 380000 375,134
1 385001 - 390000 387,500
1 415001 - 420000 420,000
1 435001 - 440000 436,427
1 445001 - 450000 448,500
1 490001 - 495000 493,500
1 495001 - 500000 498,460
1 570001 - 575000 571,046
2 600001 - 605000 1,208,661
1 610001 - 615000 614,839
1 775001 - 780000 776,650
1 895001 - 900000 900,000
1 985001 - 990000 989,450
1 1070001 - 1075000 1,075,000
1 1125001 - 1130000 1,129,647
1 1210001 - 1215000 1,214,807
1 2095001 - 2100000 2,100,000
1 2765001 - 2770000 2,766,216
1 3440001 - 3445000 3,441,416
1 3590001 - 3595000 3,591,580
1 4445001 - 4450000 4,449,000
1 4450001 - 4455000 4,450,500
1 4995001 - 5000000 5,000,000
1 5060001 - 5065000 5,060,452
1 5490001 - 5495000 5,494,500
1 8430001 - 8435000 8,430,965
1 9475001 - 9480000 9,477,018
1 10890001 - 10895000 10,891,450
1 11095001 - 11100000 11,098,050
1 13230001 - 13235000 13,232,450
1 13545001 - 13550000 13,546,734
1 22290001 - 22295000 22,291,500
1 24630001 - 24635000 24,631,642
1 26785001 - 26790000 26,786,763
1 36210001 - 36215000 36,214,344
1 37280001 - 37285000 37,280,242
1 37505001 - 37510000 37,508,988
1 37865001 - 37870000 37,866,654
1 45140001 - 45145000 45,143,700
1 47105001 - 47110000 47,109,707
1 51385001 - 51390000 51,386,588
1 76615001 - 76620000 76,619,421
1 86005001 - 86010000 86,008,806
1 108430001 - 108435000 108,430,049
1 301375001 - 301380000 301,377,754
8088 Total 1,102,463,481
Soneri Bank Limited | Annual Report 2016

FORM 34
PATTERN OF HOLDING OF THE SHARES HELD BY THE SHAREHOLDERS (CDS AND PHYSICAL)
AS AT 31 DECEMBER 2016 (SECTION 236)
Categories of Shareholders No. of
Shareholders Shares Held Percentage

Directors, Chief Executive Officer and

their spouses and minor children
DIRECTORS
Mr. Alauddin Feerasta 2 10,080,679 0.9144
Mr. Nooruddin Feerasta 1 14,048 0.0013
Mr. Amar Zafar Khan 1 17 0.0000
Mr. Muhammad Rashid Zahir 1 10,065 0.0009
Syed Ali Zafar 1 1,069 0.0001
CHIEF EXECUTIVE OFFICER
Mr. Mohammad Aftab Manzoor 0.0000
DIRECTORS' SPOUSES AND MINOR CHILDREN
Mrs. Aziza A. Feerasta 1 5,401 0.0005
w/o Mr. Alauddin Feerasta

Mrs. Amyna N. Feerasta 1 7,021 0.0006

w/o Mr. Nooruddin Feerasta
8 10,118,300 0.9178
Associated Companies undertakings
and related parties
Trustees Alauddin Feerasta Trust 2 387,386,560 35.1383
Trustees Feerasta Senior Trust 2 128,006,009 11.6109
Trustees Alnu Trust 2 64,067,005 5.8113
Executives 1 5,401 0.0005
National Bank of Pakistan - Trustee
Department, NIT and ICP 7 117,260,572 10.6362
Banks Development Financial Instituions,
Non Banking Financial Instituions. 8 35,562,751 3.2258
Insurance Companies 3 13,562,912 1.2302
Modarabas 4 4,899 0.0004
Mutual Funds
NIT-Equity Market Opportunity Fund 1 420,000 0.0381
AKD Index Tracker Fund 1 72,947 0.0066
Safeway Mutual Fund Limited 1 6,820 0.0006
TRI Star Mutual Fund Limited 1 276 0.0000
Joint Stock Companies 50 148,416,950 13.4623
Foreign Companies 10 48,204,991 4.3725
Others 6 161,228 0.0146
General Public:
a) Local 6,788 136,239,830 12.3578
b) Foreign 1,193 12,966,030 1.1761

Total: 8,088 1,102,463,481 100.00

Shareholders Holding Five Percent or More Voting Interest in the Bank

Trustees Alauddin Feerasta Trust 387,386,560 35.1383

Trustees Feerasta Senior Trust 128,006,009 11.6109
National Bank of Pakistan - Trustee
Department, NIT and ICP 117,680,572 10.6743
Trustees Alnu Trust 64,067,005 5.8113
Mr. Amir Feerasta 62,140,630 5.6365*
* Voting rights on shares are restricted upto five percent only.

-:-:-:-:-:-:-:-:-:-:-:-:-:-:-:-:-:-:-:-:-:-:-:-:-:-:-:-:-:-:-:-:-:-:-:-
Trading in shares during the year 2016:
Directors, CEO, CFO, Company Secretary and Executives

NIL
 171

List of
Branches
As at 31 December 2016
REGISTERED OFFICE CENTRAL OFFICE
Rupali House 241-242, Upper Mall Scheme, 10th Floor, PNSC Building, M. T. Khan Road
Anand Road, Lahore, Pakistan Karachi, Pakistan
Tel.: (+92-42) 35713101-4, 35792180 Tel.: (+92-21) 32444401-5 & 111-567-890
Fax: (+92-42) 35713095-6 Fax: (+92-21) 35643314, 24 & 55
Swift: SONEPKKAXXX

CENTRAL REGION 17 Wahdat Road Branch, Lahore 34 Jail Road Branch, Lahore
Tel. No: (042) 37424821-6 & 37420591 Tel. No: (042) 35408935-7
01 Main Branch, Lahore
Tel: (042) 36368141-8 & 111-567-890 18 Gunpat Road Branch, Lahore 35 Badami Bagh Branch, Lahore
Tel. No: (042) 37361607-9 Tel. No: (042) 37731601, 2 & 4
02 Defence Branch, Lahore
Tel. No: (042) 35897181-2 & 35691037-8 19 Airport Road Branch, Lahore 36 Montgomery Road Branch, Lahore
Tel. No: (042) 35700115-7 Tel. No: (042) 36291013-4
03 Gulberg Branch, Lahore
Tel. No: (042) 35713445-8, 35759273 20 Ravi Road Branch, Lahore 37 DHA Phase: VI Branch, Lahore
& (042) 35772294-5 Tel. No: (042) 37725356-7 Tel. No: (042) 37180536-7

04 Circular Road Branch, Lahore 21 Shahdara Branch, Lahore 38 Bahria Town Branch, Lahore
Tel. No: (042) 37670486 & 37670489 Tel. No: (042) 37941741-3 Tel. No: 0316-8226348 & 9

05 Model Town Branch, Lahore 22 Manga Mandi Branch, Lahore 39 Expo Centre Branch, Lahore
Tel. No: (042) 35889311-2 & 35915666 Tel. No: (042) 35383517-8 Tel. No: (042) 35314087-8

06 Peco Road Branch, Lahore 23 Badian Road Branch, Lahore 40 Wapda Town Branch, Lahore
Tel. No: (042) 35177800-2, 35222306-7 Tel. No: (042) 37165390 & 3 Tel. No: (042) 35187611, 2 & 5

07 Cavalry Ground Branch, Lahore 24 Mughalpura Branch, Lahore 41 Shah Alam Market Branch, Lahore
Tel. No: (042) 36653728-9 & 36619697 Tel. No: (042) 36880892-4 Tel. No: (042) 37376212 & 5

Islamic Banking 25 Upper Mall Branch, Lahore 42 DHA Phase-V Branch, Lahore
08 Temple Road Branch, Lahore Tel. No: (042) 35789346-9 Tel. No: (042) 35695678 & 0316-8226322-3
Tel. No: (042) 36376341, 2 & 6
26 Islampura Branch, Lahore 43 Chauburji Branch, Lahore
09 Allama Iqbal Town Branch, Lahore Tel. No: (042) 37214394-6 Tel. No: (042) 37112228 & 0316-8226325-7
Tel. No: (042) 37812394-5
27 Garhi Shahu Branch, Lahore 44 Walton Road Branch, Lahore
10 Baghbanpura Branch, Lahore Tel. No: (042) 36294201-2 Tel. No: (042) 36672305 &
Tel. No: (042) 36832811-3 0316-8226339, 40 & 41
28 Zarrar Shaheed Road Br., Lahore
11 Thokar Niaz Baig Branch, Lahore Tel. No: (042) 36635167-8 45 Faisal Town Branch, Lahore
Tel. No: (042) 35313651, 3 & 4 Tel. No: (042) 35170540 &
29 Hamdard Chowk Kot Lakhpat Br., Lahore 0316-8226335, 7 & 8
12 Ghazi Chowk Branch, Lahore Tel. No: (042) 35140261-5
Tel. No: (042) 35188505-7 46 Karim Block Branch, Lahore
30 Kana Kacha Branch, Lahore Tel. No: (042) 35417757 &
Islamic Banking Tel. No: (042) 36187413 0316-8226412, 3 & 4
13 New Garden Town Branch, Lahore
Tel. No: (042) 35940611,3 & 8 31 Sabzazar Branch, Lahore 47 Defence Road Branch, Lahore
Tel. No: (042) 37830881-2 Tel. No: 0316-8226415-8
14 DHA Phase-III Branch, Lahore
Tel. No: (042) 35734083-5 32 DHA Phase-IV Br., Lahore 48 Muridke Branch
Tel. No: (042) 35694156-7 Tel. No: (042) 37166511-2
15 Chungi Amer Sadhu Branch, Lahore
Tel. No: (042) 35922182-4 33 Azam Cloth Market Branch, Lahore 49 Main Branch, Gujranwala
Tel. No: (042) 37662203-4 Tel. No: (055) 3843560-2, 111-567-890
16 Johar Town Branch, Lahore
Tel. No: (042) 35204191-3
Soneri Bank Limited | Annual Report 2016

List of
Branches
As at 31 December 2016
50 Gujranwala Cantt. Branch, Gujranwala 68 Daska Branch, Distt. Sialkot 86 Hasilpur Branch
Tel. No: (055) 3861932-4 Tel. No: (052) 6617847-8 Tel. No: (062) 2441481-3

51 Wapda Town Branch, Gujranwala 69 Sheikhupura Branch 87 Sargodha Branch

Tel. No: (055) 4291136-7 Tel. No: (056) 3613570 & 3813133 Tel. No: (048) 3726021-3

52 Kamokee Branch, Distt. Gujranwala 70 Nankana Sahib Branch 88 Pull-111 Branch, Distt. Sargodha
Tel. No: (055) 6813501-6 Tel. No: (056) 2876342-3
89 Bhawal Branch
53 Main Branch, Faisalabad 71 Wazirabad Branch Tel. No: (048) 6642224 & 0316-8226331-2
Tel. No: (041) 2639873, 7 & 8 & Tel. No: (055) 6603703-4 & 6608555
(041) 111-567-890 90 Khanewal Branch
72 Ghakkar Mandi Branch Tel. No: (065) 2551560-2
54 Peoples Colony Branch, Faisalabad Tel. No: (055) 3832611-2
Tel. No: (041) 8555715-6 91 Kabirwala Br., Distt. Khanewal
73 Main Branch, Multan Tel. No: (065) 2400910-3
55 Ghulam Muhammadabad Tel. No: (061) 4519927 & 4512884
Branch, Faisalabad 92 Abdul Hakeem Br., Distt. Khanewal
Tel. No: (041) 2680113-4 Islamic Banking Tel. No: (065) 2441888
74 Shah Rukn-e-Alam Branch, Multan
Islamic Banking Tel. No: (061) 6784052-3 & 6782081 93 Mian Channu Branch
56 East Canal Road Branch, Faisalabad Tel. No: (065) 2662201-2
Tel. No: (041) 2421381-2 75 Bosan Road Branch, Multan
Tel. No: (061) 6210690-3 & 6520693 94 Depalpur Branch
57 Civil Lines Branch, Faisalabad Tel. No: (044) 4541341-2
Tel. No: (041) 2648111 76 Mumtazabad Branch, Multan
Tel No: (061) 6760212, 3 & 4 95 Okara Branch
58 Jaranwala Branch, Distt. Faisalabad Tel. No: (044) 2553012-4
Tel: No: (041) 4312201-2 77 Chowk Shaheedan Branch, Multan
Tel. No: (061) 4581280 & 1 96 Hujra Shah Muqeem Branch
59 Samundri Branch, Distt. Faisalabad District Okara
Tel. No: (041) 3423983-4 78 Gulgasht Colony Branch, Multan Tel. No: (044) 4860401-3 &
Tel. No: (061)-6222701 & 0316-8226393-5 0316-8226419, 20 & 21
60 Painsera Branch, Distt. Faisalabad
Tel. No: (041) 2557100-500 & 2574300 79 Azmat Road Br., Dera Ghazi Khan 97 Haveli Lakha Branch
Tel. No: (064) 2471630-7 Tel. No: 044-4775412
61 Khurrianwala Branch
Tel. No: (041) 4360701, 2, 4 & 5 80 Lodhran Branch 98 Sahiwal Branch
Tel. No: (0608) 364766-7 Tel. No: (040) 4467742-3
62 Chiniot Branch
Tel. No: (047) 6333840-2 81 Rahim Yar Khan Branch 99 Chichawatni Br., Distt. Sahiwal
Tel. No: (068) 5886042-4 Tel. No: (040) 5484852-3
63 Jhang Branch
Tel. No: (047) 7651601-2 82 Liaqatpur Br., Distt. Rahim Yar Khan 100 Layyah Branch
Tel. No: (068) 5792041-2 Tel. No: (060) 6414207-8
64 Small Industrial Estate Branch, Sialkot
Tel. No: (052) 3242607-9 83 Sadiqabad Branch 101 Chowk Azam Branch, Distt. Layyah
Tel. No: (068) 5702162 & 5800168 Tel. No: (060) 6372103 &
65 Pasrur Road Branch, Sialkot 0316-8226401, 2 & 3
Tel. No: (052) 3521655 & 3521755 84 Bahawalpur Branch
Tel. No: (062) 2731703-1 102 Kharoor Pacca Branch
Islamic Banking Tel. No: (0608) 341041-2
66 Sialkot Cantt Branch, Sialkot 85 Ahmedpur Sharqia Br., Distt. Bahawalpur
Tel. No: (052) 4560023-4 Tel. No: (062) 2271345 & 0316-8226404, 6 & 8 103 Muzafargarh Branch
Tel. No: (066) 2422901, 3 & 5
67 Godhpur Branch, Sialkot
Tel. No: (052) 4563932-3
 173

List of
Branches
As at 31 December 2016
104 Fazal Garh Sanawan Branch, 121 Gojra Branch, Distt. Toba Tek Singh 138 AKU Branch, Karachi
Distt. Muzafargarh Tel. No: (046) 3516388-9 Tel. No: (021) 34852252-3
Tel. No: (066) 2250214-5
122 Kamalia Branch, Distt. Toba Tek Singh 139 Haidery Branch, Karachi
105 Sheikho Sugar Mills Branch Tel. No: (046) 3411405-6 Tel. No: (021) 36638617 & 36630409-410
Distt. Muzafargarh
Tel. No: (061) 6006257 123 Pir Mahal Branch 140 Jodia Bazar Branch, Karachi
Tel. No: (046) 3361690 & 5 Tel. No: (021) 32413627, 32414920
106 Shahbaz Khan Road Branch, Kasur
Tel. No: (0492) 764891-2 124 Gujrat Branch 141 Shahrah-e-Faisal Branch, Karachi
Tel. No: (053) 3520591, 2 & 4 Tel. No: (021) 34535551-4
107 Hafizabad Branch
Tel. No: (0547) 541641-2 125 Kharian Branch 142 DHA Branch, Karachi
Tel. No: (053) 7602904, 5 & 7 Tel. No: (021) 35852209 & 35845211
108 Jalalpur Bhattian Branch,
District Hafizabad 126 Lalamusa Branch 143 Gulshan-e-Iqbal Branch, Karachi
Tel. No: (0547) 500847-52 Tel. No: (053) 7511072-3 Tel. No: (021) 34811831-2

109 Pattoki Branch 127 Pak Pattan Br., Distt. Pak Pattan 144 SITE Branch, Karachi
Tel. No: (049) 4422435-6 Tel.: (0457) 371781 & 2 Tel. No: (021) 32568213 & 32550997

110 Ellahabad Branch 128 Arif wala Br., Distt. Pak Pattan 145 Zamzama Branch, Karachi
Tel. No: (049) 4751130 Tel.: (0457) 834015 & 6 Tel. No: (021) 35375836-7

111 Khudian Branch 129 Chishtian Branch 146 Gole Market Branch, Karachi
Tel. No: (049) 2791595 Tel. No: (063) 2501141 & 0316-8226305 Tel. No: (021) 36618932 & 36681324

112 Sambrial Branch 130 Khanpur Branch 147 Gulistan-e-Jauhar Branch, Karachi
Tel. No: (052) 6523451-2 Tel. No: (068) 5577719-20 & 0316-8226307-9 Tel. No: (021) 34020944-5

113 Vehari Branch 131 Narowal Branch 148 M. A. Jinnah Road Branch, Karachi
Tel. No: (067) 3360015, 24 & 25 Tel. No: (0542) 411405 & 0316-8226328-30 Tel. No: (021) 32213972 & 32213498

114 Gagoo Mandi Branch, Distt. Vehari 132 Rajanpur Branch 149 Gulbahar Branch, Karachi
Tel. No: (067) 3500311-2 Tel. No: (0604) 688108 & 0316-8226396 Tel. No: (021) 36607744 & 36682701

115 Mailsi Branch, Distt. Vehari SOUTH REGION 150 North Karachi Branch, Karachi
Tel. No: (067) 3750140-5 Tel. No: (021) 36920140-1
133 Main Branch, Karachi
116 Burewala Branch, Distt. Vehari Tel. No: (021) 32436990-4 & 32444401-5 151 Block-7 Gulshan-e-Iqbal Branch, Karachi
Tel. No: (067) 3773110 & 20 & UAN: 111 567 890 Tel. No: (021) 34815811-2

117 Mandi Bahauddin Branch 134 Clifton Branch, Karachi Islamic Banking
Tel. No: (0546) 507601-2 Tel. No: (021) 35877773-4, 35861286 152 Cloth Market Branch, Karachi
Tel. No: (021) 32442961 & 32442977
118 Bahawalnagar Branch 135 Garden Branch, Karachi
Tel. No: (063) 2274795-6 Tel. No: (021) 32232877-8 153 Paria Street Kharadar Branch, Karachi
Tel. No: (021) 32201059-60
119 Haroonabad Br., Distt. Bahawalnagar 136 F. B. Area Branch, Karachi
Tel. No: (063) 2251664-5 Tel. No: (021) 36373782-3 & 36811646 154 Suparco Branch, Karachi
Tel. No: (021) 34970560 & 34158325-6
120 Toba Tek Singh Branch 137 Korangi Industrial Area Br., Karachi
Tel. No: (046) 2513203-4 Tel. No: (021) 35113898-9, 35113900-1 155 Chandni Chowk Branch, Karachi
Tel. No: (021) 34937933 & 34141296
Soneri Bank Limited | Annual Report 2016

List of
Branches
As at 31 December 2016
156 Allama Iqbal Road Branch, Karachi 175 North Karachi Township Branch, Karachi 193 Gulberg Branch, Karachi
Tel. No: (021) 34387673-4 Tel. No: (021) 36968605-6 Tel. No: (021) 36340553 & 0316-8226291-2

157 Nishtar Road Branch, Karachi 176 Karachi Stock Exchange Branch, Karachi 194 New Sabzi Mandi Branch, Karachi
Tel. No: (021) 32239711 & 3 Tel. No: (021) 32414003-4 Tel. No: (021) 36870506 &
0316-8226409, 10 & 11
Islamic Banking 177 Gulshan-e-Jamal Branch, Karachi
158 Waterpump Branch, Karachi Tel. No: (021) 34682682-3 195 Clifton Block-08 Branch, Karachi
Tel. No: (021) 36312113 & 36312108 Tel. No: (021) 35867435
178 Alyabad Branch, Karachi
159 Apwa Complex Branch, Karachi Tel. No: (021) 36826727 & 36332517 196 Block-02 Gulshan-e-Iqbal Br., Karachi
Tel. No: (021) 32253143 & 32253216 Tel. No: (021) 34988781-2
179 Saudabad Branch, Malir, Karachi
160 Clifton Block-2 Branch, Karachi Tel. No: (021) 34111904-5 197 Garden Market Branch, Karachi
Tel. No: (021) 35361115-6 Tel. No: (021) 32244195
180 Shireen Jinnah Colony Branch, Karachi
161 Malir Branch, Karachi Tel. No: (021) 34166262-4 198 Block-N North Nazimabad Branch, Karachi
Tel. No: (021) 34518730 & 34517983 Tel. No: (021) 36441622
Islamic Banking
162 Bahadurabad Branch, Karachi 181 Al-Tijarah Centre Branch, Karachi 199 Marriot Road Branch, Karachi
Tel. No: (021) 34135842-3 Tel. No: (021) 34169252-3 Tel. No: (021) 32461840

163 New Challi Branch, Karachi 182 Barkat-e-Haidery Branch, Karachi 200 Main Branch, Hyderabad
Tel. No: (021) 32625246 & 32625279 Tel. No: (021) 36645688-9 Tel. No: (022) 2781528-9 &
UAN: 111-567-890
164 Shah Faisal Colony Branch, Karachi 183 Shadman Town Branch, Karachi
Tel. No: (021) 34602446-7 Tel. No: (021) 36903038-9 201 F. J. Road Branch, Hyderabad
Tel. No: (022) 2728131 & 2785997
165 Zaibunissa Street Saddar Branch, Karachi 184 New Town Branch, Karachi
Tel. No: (021) 35220026-7 Tel. No: (021) 32220704 & 5 202 Latifabad Branch, Hyderabad
Tel. No: (022) 3816309
166 Liaquatabad Branch, Karachi 185 Enquiry Office Nazimabad No. 2 Branch,
Tel No: (021) 34860723-6 & 34860725 Karachi 203 Qasimabad Branch, Hyderabad
Tel. No: (021) 36601504-5 Tel. No: (022) 2651968
167 Lea Market Branch, Karachi
Tel. No: (021) 32526193-4 186 Blk 13-D Gulshan-e-Iqbal Br., Karachi Islamic Banking
Tel. No: (021) 34983883-4 204 Isra University Br., Distt. Hyderabad
168 Korangi Township No: 2 Branch, Karachi Tel. No: (022) 2032322 & 2030161-4
Tel. No: (021) 35071176, 80 & 81 187 Timber Market Branch, Karachi
Tel. No: (021) 32742491-2 205 Prince Ali Road Branch, Hyderabad
169 North Karachi Ind. Area Branch, Karachi Tel. No: (022) 2638515-6
Tel. No: (021) 36962851-3 188 Khayaban-e-Ittehad Branch, Karachi
Tel: (021) 35347414-5 206 S.I.T.E. Branch, Hyderabad
170 F. B. Industrial Area Branch, Karachi Tel. No: (022) 3886861-2
Tel. No: (021) 36829961-3 189 Sindhi Muslim Co-operative Housing
Society Branch, Karachi 207 Faqir Jo Pir Branch, Hyderabad
171 Napier Road Branch, Karachi Tel. No: (021) 34527085-6 Tel. No: (022) 2612685-6
Tel. No: (021) 32713538-9
190 Bahria Complex-III Branch, Karachi 208 Auto Bhan Road Branch, Hyderabad
172 Gulshan-e-Hadeed Branch, Karachi Tel. No: (021) 35640731 & 2 & 35640490-4 Tel. No: (022) 2100062-3 & 0316-8226313-4
Tel. No: (021) 34710252 & 34710256
191 New M. A. Jinnah Road Branch, Karachi 209 Matyari Branch, Distt. Matyari
173 Metroville Branch, Karachi Tel. No: (021) 34894941-2 Tel. No: (022) 2760125-6
Tel. No: (021) 36752206-7
192 DHA Phase-IV Branch, Karachi 210 Tando Allah Yar Branch
174 Defence Phase-II Extension Br., Karachi Tel. No: (021) 35311491 Tel. No: (022) 3890262-3
Tel. No: (021) 35386910 & 1
 175

List of
Branches
As at 31 December 2016
211 Sultanabad Branch, 229 Panjhatti Branch 246 Chandni Chowk Branch, Rawalpindi
Distt. Tando Allah Yar Tel. No: (0243) 552183-4 Tel. No: (051) 4571186-7 &
Tel. No: (022) 3404101-2 & (051) 4571160, 3, 5, & 8
230 Ghotki Branch
212 Tando Muhammad Khan Branch Tel. No: (0723) 680305-6 247 22 Number Chungi Branch, Rawalpindi
Tel. No: (022) 3340371 & 2 Tel. No: (051) 5563576, 7 & 8
231 Deharki Branch
213 Sukkur Branch Tel. No: (0723) 644157-8 248 Muslim Town Branch, Rawalpindi
Tel. No: (071) 5622382 & 5622925 Tel. No: (051) 5405514 & 4931112
232 Thull Branch
214 Sanghar Branch, Distt. Sanghar Tel. No: (0722) 610150, 1 & 3 249 Pindora Branch, Rawalpindi
Tel. No: (0235) 543376-8 Tel. No: (051) 4419019-22
233 Kandkhot Branch
215 Tando Adam Branch, Distt. Sanghar Tel. No: (0722) 572883, 4 & 5 250 Gulraiz Branch, Rawalpindi
Tel. No: (0235) 571640-44 Tel. No: (051) 5509690-2
234 Jacobabad Branch
216 Shahdadpur Br., Distt. Sanghar Tel. No: (0722) 654041 & 5 Islamic Banking
Tel. No: (0235) 841982 & 4 251 Peshawar Road Br., Rawalpindi
235 Shahdadkot Br., Distt. Qamber Shahdadkot Tel. No: (051) 5460115-6
217 Golarchi Branch, Distt. Badin Tel. No: (074) 4012402 & 3
Tel. No: (0297) 853193-4 252 Bahria Town Branch, Rawalpindi
236 Dadu Branch Tel. No: (051) 5733772-3
218 Talhar Branch, Distt. Badin Tel. No: (025) 4711417
Tel. No: (0297) 830389 253 Bewal Br., Distt. Rawalpindi
237 Shikarpur Branch Tel. No: (051) 3360274-5
219 Deh. Sonhar Branch, Distt. Badin Tel. No: (0726) 540381-3 & 0316-8226319-21
Tel. No: (0297) 870729 & 870783 254 Main Branch, Islamabad
238 Main Branch, Quetta Tel. No: (051) 2348174 & 2348178
220 Matli Branch Tel. No: (081) 2821610 & 2821641 & UAN 111-567-890
Tel. No: (0297) 840171-2
Islamic Banking 255 G-9 Markaz Branch, Islamabad
221 Tando Bago Branch, Distt. Badin 239 Shahrah-e-Iqbal Branch, Quetta Tel. No: (051) 2850171-3
Tel. No: (0297) 854554-5 Tel. No: (081) 2820227-30 & 2820237
Islamic Banking
222 Buhara Branch, Distt. Thatta 240 Chamman Branch 256 I-10 Markaz Branch, Islamabad
Tel. No: (0298) 613169 Tel. No: 0826-613685 & 0316-8226342-3 Tel. No: (051) 4101733-5

223 Jati Branch, Distt. Thatta NORTH REGION 257 I-9 Markaz Branch, Islamabad
Tel. No: (0298) 777120 & 129 Tel. No: (051) 4858101-3
241 Main Branch, Peshawar
224 Hub Branch, Distt. Lasbela Tel. No: (091) 5277914-6 & 5277394 258 E-11 Branch, Islamabad
Tel. No: (0853) 310225-7 Tel. No: (051) 2228756-9
242 Chowk Yadgar Branch, Peshawar
25 Umerkot Branch Tel. No: (091) 2573335-6 259 DHA Phase-II Br., Islamabad
Tel. No: (0238) 571350 & 571356 Tel. No: (051) 5161969 & 5161970
Islamic Banking
226 Nawabshah Branch 243 Khyber Bazar Branch, Peshawar Islamic Banking
Tel. No: (0244) 363919 Tel. No: (091) 2566812-3 260 F-8 Markaz Branch, Islamabad
Tel. No: (051) 2818019-21
227 Mirpurkhas Branch 244 Hayatabad Branch, Peshawar
Tel. No: (0233) 876418-9 Tel. No: (091) 5893365-8 261 G-11 Markaz Branch, Islamabad
Tel. No: (051) 2830152-4
228 Larkana Branch 245 Main Branch, Rawalpindi
Tel. No: (074) 4058601-4 Tel. No: (051) 5123123, 5 & 8 262 F-11 Markaz Branch, Islamabad
& (051) 5123132, 4 & 6 Tel No: (051) 2101076 & 7
Soneri Bank Limited | Annual Report 2016

List of
Branches
As at 31 December 2016
263 F-6 Branch, Islamabad 279 Abbottabad Branch
Tel. No: 051-2826573-4 & 0316-8226303 Tel. No: (0992) 385231-3

264 Lathrar Road Branch, Tarlai, 280 Jhelum Branch

Distt. Islamabad Tel. No: (0544) 625794-5
Tel. No: (051) 2241664-6
281 Chitral Branch, Distt. Chitral
265 Soan Garden Br., Distt. Islamabad Tel. No: (0943) 412078-9
Tel. No: (051) 5738942-4
282 Chakwal Branch
266 Gujar Khan Branch Tel. No: (0543) 543128-30
Tel. No: (051) 3516327, 29 & 30
283 Mardan Branch
267 Waisa Branch, Distt. Attock Tel. No: (0937) 864755-7
Tel. No: (057) 2651066-8
284 Muzaffarabad Branch
268 Swabi Branch, Distt. Swabi Tel. No: (0582) 2920025-6
Tel. No: (0938) 221741, 3 & 4
Islamic Banking
269 Topi Branch, Distt. Swabi 285 Chillas Branch, Distt. Diamer
Tel. No: (0938) 271612, 5 & 6 Tel. No: (05812) 450631-2

270 Mirpur Branch, (AJK) 286 Islamic Banking Mingora Branch

Tel. No: (05827) 444488 & 448044 Tel. No: (0946) 714355

271 Islamgarh Branch, (AJK) 287 Battagram Branch

Tel. No: (05827) 423981-2 Tel. No: (0997) 311045-7

272 Jattlan Branch, Distt. Mirpur (AJK) 288 Mansehra Branch

Tel. No: (05827) 403591-4 Tel. No: (0997) 301931, 2, 5 & 6

273 Gilgit Branch

Tel. No: (05811) 453749

274 Denyore Branch, Distt. Gilgit

Tel. No: (05811) 459986-7

275 Jutial Branch, Distt. Gilgit

Tel. No: (05811) 457233-5

276 Aliabad Branch, Hunza

Tel. No: (05813) 455000 & 455001

277 Gahkuch Branch

Tel. No: (05814) 450408-10

278 Skardu Branch

Tel. No: (05815) 450327 & 450189
 177

Foreign
Correspondents
As at 31 December 2016
Country Name of Bank

01 Afghanistan - Bank Alfalah Limited Afghanistan

- Bank E Millie Afghanistan
- Habib Bank Limited Afghanistan
- National Bank Of Pakistan Ltd. Afghanistan

02 Algeria - Citibank NA Algeria

03 Argentina - Banco Credicoop Cooperativo Limitado

- Banco de Galicia Y Buenos Aires

04 Australia - Australia And Newzealand Banking Group Ltd. Australia

- BNP Paribas Australia
- CitiGroup PTY Limited
- Citibank NA Australia
- Commonwealth Bank of Australia
- HSBC Bank Australia Limited
- J. P. Morgan Chase Bank NV
- Mizuho Bank Limited Australia
- National Australia Bank Ltd.

05 Austria - Erste Group Bank AG Austria

- Erste Bank der oesterreichischen Sparkassen AG Austria
- Oberbank AG
- Raiffeisen Bank International AG
- Raiffeisenlandes Bank Vorarlberg
- Raiffeisenlandesbank Niederšsterreich-Wien AG Austria
- Raiffeisenlandesbank Oberšsterreich Aktiengesellschaft Austria
- UniCredit Bank Austria AG

06 Bahrain - Al-Baraka Islamic Bank

- Allied Bank Limited Bahrain
- Bank Alfalah Limited Bahrain
- Bank Al Habib Limited
- Citibank N.A.
- Habib Bank Limited
- JS bank Limited Bahrain
- Standard Chartered Bank
- The Arab Investment Co.
- United Bank Limited

07 Belarus - Joint Stock Co. Saving Bank Belarus Bank

- Joint Stock Co. Minsk Transit Bank Belarus

08 Bulgaria - UniCredit BulBank AD

- Citibank Europe Plc Bulgaria

09 Bangladesh - Bank Asia Limited Bangladesh

- Brac Bank Bangladesh
- Dhaka Bank Ltd. Bangladesh
- Eastern Bank Limited Bangladesh
- Habib Bank Limited
- Jamuna Bank Limited Bangladesh
- National Bank Limited Bangladesh
- Standard Chartered Bank
- Woori Bank
- Southeast Bank Ltd. Bangladesh
- The City Bank Ltd. Bangladesh
- United Commercial Bank Ltd. Bangladesh
Soneri Bank Limited | Annual Report 2016

Foreign
Correspondents
As at 31 December 2016
Country Name of Bank

10 Belgium - Bank Of America NA Belgium

- Belfius Bank SA/NV
- BNP Paribas Fortis
- Citibank Europe Plc Belgium
- Commerzbank AG
- Credit Europe Bank NV
- Deutsche Bank AG
- Habib Bank Limited
- KBC Bank NV
- The Bank Of Newyork Mellon SA/NV Belgium

11 Brazil - Banco Do Brasil SA Brazil

- Banco \Fibra SA Brazil
- Banco Santander (Brasil) SA Brazil
- Banco Itaœ BBA SA Brazil
- Deutsche Bank SA

12 Cameron - Citi Bank N.A

13 Canada - Bank Of Montreal Canada

- Canadian Imperial Bank of Commerce
- Federation Des Caisses Desjardins Du Quebec Canada
- Habib Canadian Bank
- HSBC Bank Canada
- Royal Bank of Canada

14 Cayman Islands - Banco Santander Brasil SA Cayman Island

15 Chile - Banco de Credito E Inversiones

16 China - Agricultural Bank of China

- Agricultural Development Bank of China
- Bank of America N.A
- Bank of Beijing
- Bank of China
- Bank of Communications
- Bank of Guiyang Co Ltd
- Bank Of Hebei Co. Limited China
- Bank of Jiangsu Co
- Bank Of Ningbo co. Ltd. China
- Bank Of Ningxia China
- Bank Of Ruifeng China
- Bank of Shanghai
- China Citic Bank
- China Construction Bank Corporation
- China Everbright Bank
- China Guangfa Bank co. Ltd. China
- China Merchants Bank
- China Minsheng Banking Corporation Ltd. China
- Citibank (China) Co. Ltd.
- Commerzbank AG
- Export Import Bank of China
- Guangdong Huaxing Bank Co Ltd
- Guangdong Nanhai Rural Commercial Bank Co. Ltd. China
- HSBC Bank (China) Company Ltd.
- Hua Xia Bank
- Industrial Bank Co. Ltd. China
- Industrial and Commercial Bank of China
 179

Foreign
Correspondents
As at 31 December 2016
Country Name of Bank

- Industrial Bank Of Korea (China) Limited

- Jinan Rural Commercial Bank Co. Ltd. China
- J. P. Morgan Chase Bank (China) Company Ltd.
- Jiangsu Jiangyin Rural Commercial Bank Co Ltd
- KBC Bank NV
- Mizuho Bank (China) Co. Ltd.
- Ping An Bank Co
- Qilu Bank Co., Ltd.
- Shandong Zhangdian Rural Commercial Bank Co Ltd
- Shanghai Pudong Development Bank
- Shengjing Bank China
- Skandinaviska Enskilda Banken AB
- Standard Chartered Bank (China) Limited
- Sumitomo Mitsui Banking Corporation (China) Limited
- Unicredit Spa China
- Weifang Rural Commercial Bank Co Ltd
- Woori Bank China
- Zhejiang Mintai Commercial Bank
- Zhejiang Tailong Commercial Bank

17 Colombia - BanColombia S.A

- Bank Of Ceylon Srilanka
- Commercial Bank Of Ceylon Plc Srilanka
- Habib Bank Limited Colombo Srilanka
- Hatton National Bank Plc Srilanka
- Hongkong & Shanghai Banking Corp. Srilanka
- National Development Bank Plc Srilanka
- Peoples Bank Srilanka
- Standard Chartered Bank Colombo Srilanka

18 Cyprus - Bank of Cyprus Public Company Ltd.

- Hellenic Bank Public Company Ltd.

19 Czech Republic - Ceska Sporitelna AS

- Ceskoslovenska Obchodni Banka
- Citi Bank Europe PLC
- Commerz Bank AG
- Komercni Banka AS
- Unicredit Bank Czech Republic

20 Denmark - Danske Bank

21 Egypt - Banque Misr SAE

- Citibank Cairo
- HSBC Bank Egypt SAE Egypt
- Mashreq Bank psc
- Societe Arabe Internationale De Banque Egypt
- Suez Canal Bank Sae Egypt

22 Ethiopia - Bank Of Abyssinia SC Ethiopia

- Dashen Bank SC
- Cooperative Bank of Oromia SC Ethiopia

23 Finland - Danske Bank

- OP Corporate Bank Plc Finland

24 France - Banque Federative Du Credit Mutuel France

- Banque Palatine France
Soneri Bank Limited | Annual Report 2016

Foreign
Correspondents
As at 31 December 2016
Country Name of Bank

- BNP-Paribas S.A.
- Citibank Europe Plc France
- CrŽdit Industriel et Commercial France
- Habib Bank Limited
- HSBC France (Formerly HSBC CCF)
- KEB Hana Bank France
- National Bank of Pakistan
- Credit Du Nord
- Societe Generale

25 Germany - Bank Of America NA Germany

- Commerzbank AG
- Danske Bank
- Deutsche Bank AG
- DZ Bank AG Deutsche Zentral Genossenschaftsbank Germany
- Hamburger Sparkasse
- HSH Nordbank AG
- JP Morgan Chase Bank
- Kreissparkasse Steinfurt
- Landesbank Baden-Wurttemerg
- M. M. Warburg U. Co
- National Bank of Pakistan
- SEB AG
- Sparkasse Dortmund
- Sparkasse Krefeld
- Sparkasse Westmuensterland
- Standard Chartered Bank
- UniCredit Bank AG (Hypovereinsbank)

26 Greece - Alpha Bank AE

- Bank Of Cyprus Public Co. Ltd. Greece
- Citibank Europe PLC
- Piraeus Bank S.A.

27 Hong Kong - ABN Amro Bank NV Hongkong

- Bank of America NA
- BNP Paribas
- Citibank N.A.
- Commerzbank AG
- Deutsche Bank AG Hongkong
- Habib Bank Zurich Hongkong Limited Hongkong
- HSBC
- HBZ Finance Hongkong Limited Hongkong
- J. P. Morgan Chase Bank N.A.
- KBC Bank NV,Hongkong Branch
- Mashreqbank psc
- National Bank of Pakistan
- Punjab National Bank Hongkong
- Shinhan Bank, Hong Kong
- Standard Chartered Bank (Hong Kong) Limited
- Sumitomo Mitsui Banking Corporation
- The Bank of New York Mellon Hongkong
- UniCredit Bank AG Hongkong
- Wells Fargo Bank NA
 181

Foreign
Correspondents
As at 31 December 2016
Country Name of Bank

28 Hungary - CIB Bank Ltd.

- Citibank Europe PLC
- Raiffeisen Bank ZRT
- UniCredit Bank Hungary ZRT

29 India - Citibank N.A.

- Bank of America
- Bank of Ceylon
- DCB Bank Limited
- Deutsche Bank AG
- HongKong and Shanghai Banking Corporation Limited
- ICICI Bank Limited
- Indusind Bank [Link]
- J. P. Morgan Chase Bank NA
- Kalupur Commercial Co-op
- Mashreqbank psc
- Punjab and Sind Bank
- Punjab National Bank
- Standard Chartered Bank

30 Indonesia - Bank Indonesia

- Bank Mandiri Jakarta
- The Bank of Tokyo-Mitsubishi UFJ Ltd.
- Citibank N.A.
- HongKong and Shanghai Banking Corporation Limited
- J. P. Morgan Chase Bank NA
- PT BPD Jawa Barat Dan Banten Indonesia
- Standard Chartered Bank

31 Ireland - Citibank Europe plc

- Danske Bank A/S

32 Italy - Banca Carige SPA

- Banca Delle Marche SPA
- Banca di Credito Popolare
- Banca di Napoli SpA
- Banca Monte Dei Paschi Di Siena
- Banca Nuova SPA
- Banca Popolare Di Bari Scpa Italy
- Banca Popolare Di Mantova Spa Italy
- Banca Popolare di Vicenza
- Banca UBAE Spa
- Banco Popolare di Sondrio
- Banco Popolare Soc. Coop.
- Bper Banca Spa Italy
- Cassa di Risparmio Di Fermo SPA
- Cassa di Risparmio del Friuli Venezia Giulia SpA Italy
- Cassa Di Risparmio in Bologna Spa Italy
- Commerzbank AG
- Citibank NA Italy
- Credito Valtellinese
- Deutsche Bank SPA
- Intesa Sanpaolo S.P.A.
- Mediocredito Italiano SpA Italy
- Mizuho Bank Limited Italy
- Unicredit S.P.A
- Union Di Banche Italiane SPA Italy
Soneri Bank Limited | Annual Report 2016

Foreign
Correspondents
As at 31 December 2016
Country Name of Bank

33 Japan - The Bank of Tokyo-Mitsubishi UFJ Ltd.

- Citibank Japan Limited
- Deutsche Bank AG
- Hong Kong & Shanghai Banking Corporation., (The)
- JP Morgan Chase Bank
- Mizuho Corporate Bank
- National Bank of Pakistan
- Resona Bank Ltd.
- Saitama Resona Bank Ltd.
- Standard Chartered Bank
- Sumitomo Mitsui Banking Corporation
- The Tokushima Bank Limited

34 Jordan - Citibank N.A.

35 Kenya - Citibank N.A.

- Habib Bank Limited
- Kenya Commercial Bank Limited
- Standard Chartered Bank Kenya Limited

36 Korea (South) - The Bank of Tokyo-Mitsubishi UFJ Ltd.

- Busan Bank
- Citibank Korea Inc.
- Daegu Bank Korea
- KEB Hana Bank
- HongKong & Shanghai Banking Corporation Limited
- Industrial Bank of Korea
- JPMorgan Chase Bank
- Kookmin Bank
- Korea Development Bank Korea
- National Bank of Pakistan
- National Federation of Fisheries Corp. Korea
- NongHyup
- Shinhan Bank
- Standard Chartered Bank Korea Ltd
- The Export Import Bank Of Korea
- The Bank Of Newyork Mellon Korea
- Woori Bank
- Wells Fargo Bank N.A Korea

37 Kuwait - Citibank NA
- Commercial Bank of Kuwait SAK
- National Bank of Kuwait

38 Kyrgyzstan - National Bank of Pakistan

39 Latvia - AS Citadele Banka Latvia

40 Lebanon - Banque Libano-Francaise SAL

- CitiBank Beirut
- First National Bank SAL

41 Macau - Standard Chartered Bank Macau

42 Malaysia - Ambank (M) Berhad Malaysia

- Bank of Tokyo-Mitsubishi UFJ Ltd.
 183

Foreign
Correspondents
As at 31 December 2016
Country Name of Bank

- Bank Pertanian Malaysia

- Citibank Berhad
- Hong Leong Bank Bhd
- HSBC Bank Malaysia Berhad
- J. P. Morgan Chase Bank Berhad
- Standard Chartered Bank Malaysia Berhad

43 Malta - AK Bank TAS

- Credit Europe Bank NV
- Fimbank Plc Malta

44 Mauritius - Habib Bank Limited

- The Mauritius Commercial Bank Limited

45 Macedonia - Silk Road Bank AD Skopje Mecedonia

46 Mexico - Banco Nacional de Mexico SA

47 Morocco - Citibank Maghreb Morocco

- Attijariwafa Bank Morocco

48 Nepal - Himalayan Bank

49 Netherlands - ABN-AMRO Bank N.V.

- Citibank Europe PLC
- CommerzBank AG Kantoor
- Credit Europe Bank N.V.
- Deutsche Bank AG
- GE Artesia Bank Netherlands
- HSBC Netherlands
- Habib Bank Limited

50 New Zealand - Bank of New Zealand

51 Norway - DNB Bank ASA

- Danske Bank AS
- Skandinaviska Enskilda Banken

52 Oman - Bank Sohar SAOG

- Bank of Dhofar Piraeus Bank
- Oman International SAOG Oman
- Standard Chartered Bank

53 Panama - Banesco SA Panama

54 Philippines - Asian Development Bank

- Standard Chartered Bank Phillipines Limited
- The Bank of Tokyo-Mitsubishi UFJ Ltd.

55 Poland - Bank Handlowy W Wearszawie SA

- Mbank S.A
- Danske Bank A/S Poland
- Bank Zachodni WBK SA Poland
Soneri Bank Limited | Annual Report 2016

Foreign
Correspondents
As at 31 December 2016
Country Name of Bank

56 Portugal - Banco BPI SA

- Novo Banco SA
- Caixa Central De Credito Agricola Mutuo Crl Portugal
- Banco Popular Portugal SA Portugal
- BNP Paribas Fortis SA/NV Portugal
- Banco Santander Totta SA Portugal

57 Qatar - HSBC Bank Middle East Limited

- Mashreq Bank
- Standard Chartered Bank
- United Bank Limited

58 Romania - Banca Commerciala Romana SA

- Citibank Europe PLC, Dublin-Sucursala Romania
- Marfin Bank Romania SA Romania
- Unicredit Bank SA Romania

59 Russia - Credit Bank Of Moscow

- Intercommerz Commercial Bank Russia
- Joint Stock Company Commercial Bank Citibank Russia

60 Saudi Arabia - Alawwal Bank

- Al Inma Bank
- Bank Al Jazira Saudi Arabia
- J. P. Morgan Chase Bank
- National Bank of Pakistan
- National Commercial Bank (The)
- Samba Bank Limited

61 Serbia - Unicredit Bank Srbija AD

- Halkbank A.D Belgrade Serbia

62 Singapore - ABN Amro Bank NV

- Bank Mandiri (Persero) PT
- Bank of America NA
- Bank of Tokyo Mitsubishi UFJ Ltd.
- Citibank N.A.
- Commerzbank AG
- Cooperatieve Rabobank UA Singapore
- Deutsche Bank AG
- Habib Bank Limited
- HongKong & Shanghai Banking Corporation Limited
- HSH Nordbank AG
- Intesa Sanpaolo SPA
- JPMorgan Chase Bank National Association Singapore
- KBC Bank Singapore Branch
- Mizuho Corporate Bank Ltd
- National Bank of Kuwait SAK
- Portigon AG Singapore
- RaboBank
- Shinhan Bank
- Standard Chartered Bank
- Sumitomo Mitsui Banking Corporation
- Woori Bank Singapore
- Wells Fargo Bank N.A Singapore
 185

Foreign
Correspondents
As at 31 December 2016
Country Name of Bank

63 Slovakia - Ceskoslovenska Obchodna Banka AS

- Ceska Sporitelna as Slovakia
- Tatra Bank AS

64 Slovenia - Abanka DD Slovenia

- UniCredit Banka Slovenija DD
- Nova Kreditna Banka Maribor DD Slovenia

65 South Africa - Citibank South Africa

- FirstRand Bank Ltd.
- HBZ Bank Limited
- Mercantile Bank Limited South Africa
- Standard Bank of South Africa Limited
- Standard Chartered Bank South Africa

66 Spain - Banco Papular Espanol SA

- Banco de Sabadell
- Banco Santander SA Spain
- Bankia SA Spain
- Banque Marocaine du Commerce Exterieur International SA Spain
- Bank of Tokyo Mitsubishi UFJ Ltd.
- Caixa Bank SA Spain
- Citibank Europe Plc Spain
- Commerzbank AG
- Deutsche Bank SAE Spain
- HSBC Bank plc
- Kutxabank SA

67 Sri-Lanka - Bank of Ceylon

- Commercial Bank of Ceylon Limited
- Habib Bank Limited
- Hatton National Bank Limited
- MCB Bank Limited
- People's Bank
- Standard Chartered Bank
- The HongKong & Shanghai Banking Corporation Limited

68 Sweden - Citibank Europe Plc Sweden

- Danske Bank
- Skandinaviska Enskilda Banken AB
- Svenska Handelsbanken AB

69 Switzerland - Arab Bank (Switzerland) Ltd.

- Banque Cantonale Vaudoise
- Banque de Commerce et de Placements S.A.
- Barclays Bank (Suisse) S.A
- CA Indosuez Switzerland SA Switzerland
- Citibank NA Switzerland
- Credit Agricole (Suisse) S.A.
- Deutsche Bank AG
- Habib Bank AG Zurich
- Hinduja Bank (Switzerland) Ltd.
- HSBC Bank Plc Switzerland
- Royal bank of Scotland
- UBS AG
- United Bank Switzerland AG
- Zurcher Kantonalbank

70 Taiwan - Citibank Taiwan Limited

Soneri Bank Limited | Annual Report 2016

Foreign
Correspondents
As at 31 December 2016
Country Name of Bank

- Deutsche Bank AG
- J. P. Morgan Chase Bank NA
- Mega International Commercial Bank
- Mizuho Corporate Bank Ltd.
- Standard Chartered Bank (Taiwan) Limited
- Sunny Bank Limited
- Wells Fargo Bank N.A Taiwan

71 Tanzania - UBL Bank Tanzania Ltd.

72 Thailand - Citibank N.A.

- J. P. Morgan Chase Bank NA
- Kasikornbank Public Company Ltd
- Krung Thai Bank Public Co Ltd Thailand
- Mizuho Corporate Bank Ltd.
- Standard Chartered Bank (Thai) PLC
- Sumitomo Mitsui Banking Cororation
- Thanachart Bank Public Company Limited
- The Siam Commercial Bank Public Company Limited

73 Tunis - Citi Bank NA

- Tunis International Bank

74 Turkey - Akbank T.A.S.

- Albaraka Turk Participation Bank
- Alternatifbank A.S.
- Citibank A.S.
- Denizbank AS
- QNB Finansbank
- Habib Bank Limited
- Kuveyt Turk Katilim Bankasi AS
- QNB Finansbank Turkey
- Turkiye Cumhuriyeti Ziraat Bankasi AS Turkey
- Turkey Garanti Bankasi AS
- Turkiye Finans Katilim Bankasi AS
- Turkiye Vakiflar Bankasi TAO
- Vakif Katilim Bankasi AS Turkey
- Yapi Ve Kredi Bankasi AS

75 Turkeminstan - National Bank of Pakistan

76 U.A.E. - Abu Dhabi Commercial Bank

- Citibank N.A.
- Credit Europe Bank (Dubai) Ltd.
- Deutsche Bank AG
- Dubai Islamic Bank
- Emirates Islamic Bank
- Emirates NBD Bank PJSC
- First Gulf Bank
- Habib Bank AG Zurich
- Habib Bank Limited
- HSBC Bank Middle East Limited
- KEB Hana Bank UAE
- MCB Bank Limited Dubai UAE
- Mashreq Bank psc
 187

Foreign
Correspondents
As at 31 December 2016
Country Name of Bank

- National Bank of Fujairah

- Standard Chartered Bank
- United Bank Limited

77 U.K. - Bank Of America NA UK

- Bank Mandiri (Europe) Limited
- Bank of Cyprus UK
- Bank of Ireland (UK) PLC
- Citibank N.A.
- Clydesdale Bank plc
- Commerzbank AG
- Deutshce Bank AG
- Habib - UK PLC
- Habib Bank AG Zurich
- Hongkong & Shanghai Banking Corp. LTD. UK
- HSBC Bank plc
- Intesa Sanpaolo SPA UK
- J. P. Morgan Chase Bank NA
- MashreqBank Psc
- Mizuho Bank China Limited UK
- Northern Bank [Link]
- Santander UK Plc UK
- Sonali Bank (UK) Ltd.
- Standard Chartered Bank
- Sumitomo Mitsui Banking Corporation Europe Ltd.
- United National Bank Limited UK
- Zenith Bank UK Limited UK

78 U.S.A. - ABN-AMRO Capital USA LLC

- Bank of America NA
- Bank of New York Mellon
- Bank Of Tokyo Mitsubishi UFJ Limited
- BOKF,NA
- Branch Banking & Trust Co.
- Citibank N.A.
- Citizen Bank N.A USA
- Comerica Bank
- Commerzbank AG USA
- Deutsche Bank Trust Company Americas
- East-West Bank
- First Tennessee Bank National Association USA
- Global Commerce Bank USA
- Habib American Bank
- Habib Bank Limited
- International Finance Corporation
- Intesa Sanpaolo SPA
- J. P. Morgan Chase Bank
- MashreqBank psc
- Metro City Bank USA
- MUFG Union Bank National Association USA
- National Bank of Pakistan
- New York Commercial Bank USA
- Nonghyup Bank USA
- PNC Bank National Association USA
- Peoples United Bank National Association USA
- Citizens Bank NA
Soneri Bank Limited | Annual Report 2016

Foreign
Correspondents
As at 31 December 2016
Country Name of Bank

- Regions Bank
- Shinhan Bank America
- Standard Chartered Bank
- Sumitomo Mitsui Banking Corporation
- The Bank of Tokyo-Mitsubishi UFJ Ltd.,
- UMB Bank NA
- United Bank Limited
- US Century Bank
- Wells Fargo Bank NA
- Woori Bank

79 Ukraine - PJSC 'CITIBANK'

- UKREXIMBANK Ukraine

80 Uzbekistan - National Bank for Foreign Economic

81 Vietnam - An Binh Commercial Joint Stock

- Citibank NA
- J. P. Morgan Chase Bank NA
- Kookmin Bank
- Military Commercial Joint Stock Bank Vietnam
- Shinhan Bank Vietnam
- Standard Chartered Bank
- Vietnam Export Import Commercial Joint Stock Bank Vietnam

82 Yemen - National Bank of Yemen

(Republic of) - Yemen Commercial Bank
PROXY FORM
25th Annual General Meeting

I / We of
being member(s) of SONERI BANK LIMITED
and holder of ordinary shares.

Register Folio No.

CDC participant I.D. No.: Sub-Account No.:

CNIC No.: or Passport No.:

hereby appoint of or failing him / her

of who is / are also member(s) of
SONERI BANK LIMITED as my / our proxy to attend and vote for me / our behalf at the 25th Annual
General Meeting of the Bank to be held on 28 March 2017 or at any adjournment thereof.

Affix Rs. 5 (Signatures should agree with the

Revenue specimen signature registered
Stamp with the Bank)

Dated this day of 2017 Signature of Shareholder

Signature of Proxy

1. WITNESS 2. WITNESS
Signature : Signature :
Name: Name:
Address: Address:
CNIC No.: CNIC No.:
or Passport No: or Passport No:

IMPORTANT:

1. This Proxy Form, duly completed and signed, must be received at the Registered Office of the Bank
at SONERI BANK LIMITED, Rupali House, 241-242 Upper Mall Scheme, Anand Road, Lahore-
54000, not less than 48 hours before the time of holding the meeting.

2. No person shall act as Proxy unless he / she himself / herself is a member of the Company, except
that a corporation may appoint a person who is not a member.

3. If a member appoints more than one proxy and more than one instruments of proxy are deposited
by a member with the Company, all such instruments of proxy shall be rendered invalid.

4. CDC Shareholders and their Proxies should attach an attested photocopy of their Computerized
National Identity Card (CNIC) or Passport with the proxy form before submission to the Company.
(Original CNIC / Passport is required to be produced at the time of the meeting).

5. In case of corporate entity, the Board of Directors' resolution / power of attorney with specimen
signature of the nominee shall be submitted along with proxy form to the Company.
 Soneri Bank Limited

AFFIX
CORRECT
POSTAGE

The Company Secretary

Soneri Bank Limited
Rupali House 241-242
Upper Mall Scheme
Anand Road
Lahore-54000
54000 241, 242
Journey of
excellence
Annual Report 2016