Security Investment Bank : Corporate Briefing Session 2023 Presentation

SECURITY INVESTMENT BANK LIMITED (SIBL)

CORPORATE BRIEFING SESSION

For the year ended DECEMBER 31,2023 On 28 May 2024 (Tuesday)

Through Video Link

At 11:00 A.M

Analyst briefing

Disclaimer

This presentation has been prepared by Security Investment Bank Limited solely for information purposes. Therefore, no representation or warranty express or implied is made thereto, and no reliance should be placed on, the fairness, accuracy, sufficiency, completeness or correctness of the information or any opinion contain herein, or any opinion rendered thereto, the information contained in this presentation should be considered in the context of the circumstances prevailing at the time and will not be updated to reflect any developments that may occur after the date of presentation. Neither Security Investment Bank Limited nor any of its respective officials, associates, employees or any person working under or on behalf of, have any responsibility and/or liability of any nature whatsoever for any loss arising from any use of the information given here.

This presentation does not constitute or forming part of prospectus, offering circular or memorandum or an offer, Solicitation, invitation or recommendation to purchase or subscribe for any securities and no part of it shall form basis of, or be relied upon in connection with, or act as any inducement to enter into any arrangement, agreement, contract, commitment or investment decision in relation to any security.

All or any part of this presentation may not be reproduced, copied, redistributed, retransmitted or disclosed in any manner or form and for any purpose whatsoever without prior approval of the Company.

By attending this presentation, you are agreeing to be bound by the foregoing limitations.

AGENDA

1. VISION AND MISSION
2. ABOUT THE COMPANY
3. COMPANY PROFILE
4. CHAIRMAN'S REVIEW REPORT
5. CORE BUSINESS ACTIVITIES
6. ABOUT THE ECONOMY
7. FINANCIAL POSITION
8. STAKEHOLDER ENAGAGEMENT, INVESTOR RELATION
9. FUTURE OUTLOOK
10. PATTERN OF SHAREHOLDING

VISION

Aiming for continued growth, we will further develop our strengths to seize new opportunities and maintain our steadfast commitment

MISSION

• Meet the challenges of highly competitive market with our expertise, creativity and services.
• Develop & maintain strong client relationship.
• Continuously enhance our contribution towards industrial development of the country.
• Determine to strengthen our long-term earnings & will endure return on shareholders' equity.

ABOUT THE COMPANY

Security Investment Bank Limited (SIBL) is a public limited company incorporated in Pakistan under the Companies Ordinance, 1984 on May 23, 1991 and started its commercial operation on December 31, 1991.

SIB is licensed to carry out business of investment finance services as a Non-Banking Finance Company (NBFC) under section 282C of the Companies Ordinance, 1984(Now Companies Act, 2017) and the Non- Banking Finance Companies ( Establishment and Regulation ) Rules, 2003 issued by the Securities and Exchange Commission of Pakistan (SECP) as amended through SRO 1002 (I)/2015 dated October 15,2015 and Non Banking Finance Companies and National Entities Regulations 2008 as amended through SRO 1160(I)/2015 dated November 25, 2015 (previously this was covered under SRO 585(I)/87 dated July 13, 1987, issued by the Ministry of Finance). The license is valid until May 29, 2025.

COMPANY PROFILE

BOARD OF DIRECTORS

Haji Jan Muhammad (Chairman)

Mr Muhammad Mehboob

Mrs. Zillay Huma Khan

Mr Faisal Zahid

Mr. Shaukat Zaman

Mr. Farrukh Siddiqui

Mr. Muhammad Bilal Chaudhry

PRESIDENT & CEO

Mr Zafar M Sheikh

AUDIT COMMITTEE

Mr. Farrukh Siddiqui (Chairman)

Haji Jan Muhammad

Mr Muhammad Mehboob

Mr Faisal Zahid

AUDITORS

Bakers Tilly Mehmood Idress Qamar Chartered Accountant

SHARIAH COMPLIANCE OFFICER

Mufti Abdul Ghaffar

SHARIAH ADVISOR

Mufti Muhammad Hanif

HUMAN RESOURCE & REMUNERATION COMMITTEE

Mr Faisal Zahid (Chairman)

Mr Zafar M Sheikh

Mr Muhammad Mehboob

Mrs. Zillay Huma Khan

RISK MANAGEMENT COMMITTEE

Mr. Shaukat Zaman

Mr Muhammad Mehboob

Mr. Farrukh Siddiqui

Mr Faisal Zahid

Mr Zafar M Sheikh

CHIEF FINANCIAL OFFICER

Mr. Shakeel Ahmed

LEGAL ADVISORS

Rizwan Ahmed (Barrister at Law) Ahmad, Azim & Co (Advocates)

INTERNAL AUDITOR

Mr. Syed Ahsan Ali

CHAIRMAN'S REVIEW REPORT

On behalf of the Board, it is my pleasure to present the Annual Report for the year ended December 31, 2023. Security Investment Bank Limited ("SIB") is committed to maintaining high standards of good corporate governance without any concession.

Pursuant to the updated Code of Corporate Governance, the company is trying to ensure full compliance. These steps will surely contribute to board development, remuneration processes, accountability and audit, and relations with our valued shareholders.

During the outgoing year 2023 Pakistan has faced series of unprecedented challenges, devastating floods, and political uncertainty. In addition, the Russia-Ukraine war severely disrupted the global demand-supply balance, which led to a commodity super-cycle resulting in slow down of the global economic growth, inconsistent policies, unsustainable fiscal deficit, the exponential rise in public debt, economic uncertainties, and mounting circular debt have been the main challenges for the government. The outlook for the year 2024 may continue remain in tough phase during the FY-2024, despite the government taking some corrective measures immediately to overcome the crises.

The Board has constituted effective Audit, Human Resource & Remuneration and Risk Management Committees and approved their respective terms of references, assigned adequate resources so that the Committees perform their responsibilities diligently.

All significant issues throughout the year presented before the Board or its Committees to strengthen and formalize the corporate decision-making. The Board received agendas and supporting written material in sufficient time prior to the board and its committee meetings. The non-executive and independent directors are equally involved in important decisions.

The Board has exercised its power assigned to the Board in accordance with the relevant laws and regulations applicable and the Board has always prioritized the Compliance with all the applicable laws and regulations.

On behalf of the Board of Directors, I would like to express gratitude to our stakeholders for their continued support and encouragement. I would also like to appreciate the valuable services rendered by the employees of the company. I also acknowledge the commitment and diligence of my fellow directors and their valuable contributions for the continued growth of the company.

We look forward to future success in the Company's endeavours. Haji Jan Muhammad

Chairman

Karachi: March 21, 2024

CORE BUSINESSACTIVITIES

During the year, the company submitted application to the regulator to convert SIBL into shahriah compliant entity, which is under process. SIBL submitted conversion plan to the regulator wherein it has been mentioned that SIBL will complete the conversion process within two years effective from September 01, 2023.

Under the shahriah guidelines company offer different business module (i.e. Morabaha / Ijarah) to its valued customers.

• Corporate Financing.
• Car Financing.
• Consumer Financing including Bike Financing.

Further, following business models under review for its execution.

• Running Musharakah
• Istisna
• Salam

Financing Portfolio Under Islamic Mode:

Management trying its best effort to successfully execute the business plan specifically focus to enhance our car financing portfolio. As of March 31, 2024 total financing portfolio of Rs.151 Million as compare to Rs. 168 million of the corresponding year and yielding average profit ratio of 24.17%. In addition to this some number of customers in process, hopefully would be finalized in the upcoming month. Details of Financing portfolio is as under;

Economic Overview

During the outgoing year, 2023 Pakistan has faced series of unprecedented challenges, devastating floods, and political uncertainty. In addition, the Russia-Ukraine war severely disrupted the global demand-supply balance, which led to a commodity super-cycle resulting in slow down of the global economic growth, inconsistent policies, unsustainable fiscal deficit, the exponential rise in public debt, economic uncertainties, and mounting circular debt have been the main challenges for the government.

The confluence of these developments substantially weakened Pakistan's macroeconomic performance during FY23. The real GDP growth fell to the third-lowest level since FY52, whereas average National CPI inflation spiked to a multi-decade high. While the current account deficit narrowed considerably, limited foreign inflows maintained pressures on the external account leading to a decline in SBP reserves.

The outlook for the year 2024 may continue remain in tough phase during the FY-2024, but economic expert citing several factors that will support the economic recovery, such as IMF loans, easing supply bottlenecks, and rate cuts coupled with political stability. The general elections scheduled for February 2024 should lead to greater political stability and investor confidence. However, some headwinds to the growth outlook, such as high taxes, fuel and energy bills, debt servicing costs, and potential disruptions to the IMF aid or the elections.

SBP, Monetary Policy Committee (Committee) reviewed its policy frequently to take appropriate action towards supporting growth, financial stability and employment during these challenging times. During the year under review 2023, the Committee keeping the view of overall economic situation and rising trend of inflation, has been deciding to raise its policy rate in frequent committee meetings, during the year over all increased in policy rate was 600 basis point to 22% as compared to policy rate at the beginning of the year 16%.