Cairo on: 7 March 2016

Mr. Chairman of the Board of Directors Bank of Tahya, greetings,

With reference to the circular letter dated January 25, 2009, attached with the decision of the Board of Directors of the Central Bank of Egypt in its session held on January 6, 2009, regarding the controls and rules of bank financing for the acquisition of companies, and in light of the supervisory role of the Central Bank of Egypt, which aims to limit any high-risk practices that may affect the efficiency and performance of banks,

I have the honor to attach herewith the decision of the Board of Directors of the Central Bank of Egypt in its session held on March 3, 2016, regarding the amendment of the aforementioned decision.

Please be so kind as to alert regarding the taking of necessary action in this regard.

Accept my highest regards,

Gamal Naguib

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Reference No.: 4/C.M/2016 Date: 17/2 2016

Decision of the Board of Directors of the Central Bank of Egypt No. 2016/501 in its session held on March 2, 2016 Regarding the amendment of the decision of the Board of Directors of the Central Bank of Egypt No. 2009/105 in its session held on January 6, 2009, regarding the controls and rules of bank financing for the acquisition of companies

After reviewing the Law No. 88 of 2003 on the Central Bank of Egypt, the Banking System and Currency, And the Executive Bylaw of the Law of the Central Bank of Egypt, the Banking System and Currency issued by Presidential Decree No. 101 of the year 2004, without prejudice to the credit granting controls issued by the Central Bank of Egypt, And based on the approval of the Board of Directors of the Central Bank of Egypt in its session held on March 2, 2016, to cancel the decision of the Board of Directors of the Central Bank No. 2009/105 in its session held on January 6, 2009,

DECISION (Article One)

The provisions of this Decision shall apply to bank financing granted for the purpose of total or partial acquisition of companies. Acquisition, in the application of the provisions of this Decision, means the acquiring company owning more than 50% of the shares of the target company or any percentage thereof that makes it control directly or indirectly the decisions of the Board of Directors or the General Assembly of the target company.

(Article Two)

Subject to the previous controls and rules issued by the Central Bank of Egypt regarding financing for the purchase of shares and granting credit, the bank wishing to grant financing for the purpose of acquisition must observe the following controls and rules:

1. The bank must have a policy approved by its Board of Directors regarding financing for the acquisition of companies.

2. The sufficiency of cash flows necessary to repay the financing, whether from the acquiring company, the target company, or the new company resulting from the merger.

3. Conducting comprehensive financial and legal due diligence on the target company through specialized financial and legal advisory firms with experience in this field, provided that the financial audit is based on Egyptian Accounting Standards or International Financial Reporting Standards (IFRS).

4. The bank must conduct financial analysis studies of the acquisition operation in light of the results of the financial and legal audit, as well as prepare a specific valuation report.

5. In cases of acquisition through tender offers for shares traded on the stock exchange, where comprehensive legal and financial due diligence is impossible due to legal, supervisory, or procedural reasons, the bank may rely on the financial reports and studies available to it and information published about the company.

6. The bank may, in cases it deems appropriate, engage an external entity with expertise in the field of activity of the target company to verify its valuation, relying on multiple valuation bases.

(Article Three)

The risk weight is increased when calculating the bank's capital adequacy ratio as follows:

A. 200% for acquisition operations through a strategic investor, meaning that the company wishing to acquire operates in the same field of activity as the target company or complements it vertically.

B. 400% for acquisition operations carried out through private equity companies or funds, or companies established for the purpose of completing the acquisition, or companies operating in the venture capital field.

(Article Four)

The total financing for acquisition purposes shall not exceed 2.5% of the bank's total loan portfolio at the time of granting, and the limit of financing for a single client and its related parties shall not exceed 0.5% of the bank's total loan portfolio.

And the total value of financing provided through banks operating in the Arab Republic of Egypt for the purpose of financing a single acquisition shall not exceed 50% of the value of the operation, for new operations - excluding letters of guarantee issued within the framework of applying to purchase companies listed on the Egyptian Exchange - and in case the bank wishes to increase this limit, it may apply to the Central Bank of Egypt for approval of this increase.

(Article Five)

Banks are committed to the decision of the Board of Directors of the Central Bank of Egypt No. 104 dated January 6, 2009, regarding the controls for goodwill valuation.

(Article Six)

The controls and rules contained in this Decision shall apply to acquisition operations as of the date of its implementation, and banks that have financed acquisition operations prior to this date are required to regularize their status in accordance with its provisions within 6 months from the date of its implementation.