VIS Credit Rating Company Limited Second Party Opinion Methodology

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Credit Rating Company Limited vis.com.pk 1 VIS Credit Rating Company Limited Second Party Opinion SEPTEMBER 2025 SECOND PARTY OPINION VIS Credit Rating Company Limited

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Credit Rating Company Limited vis.com.pk 2 VIS Credit Rating Company Limited Second Party Opinion SEPTEMBER 2025
Table of Contents
INTRODUCTION .................................................................................................................................................................................3
SECOND PARTY OPINION..............................................................................................................................................................3
METHODOLOGY.................................................................................................................................................................................4
ANNUAL SURVEILLANCE................................................................................................................................................................5

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Credit Rating Company Limited vis.com.pk 3 VIS Credit Rating Company Limited Second Party Opinion SEPTEMBER 2025 INTRODUCTION This document describes VIS Credit Rating Co. Ltd. (VIS) methodology for providing Second Party Opinion (SPO) and annual surveillance for green, social and sustainable financing framework (” Framework”) and green, social and sustainable financing instrument where proceeds are allocated to specific environmental, social or sustainable projects. The methodology also provides for an assessment of environmental and/or social benefits and impact as well as the potential material environmental and/or social risks associated with the sustainable financing. SECOND PARTY OPINION SPO is not credit ratings, neither they assess credit quality, nor are they influenced by credit ratings. Instead, SPO provides a point in time independent assessment of alignment, credibility and ambition of a sustainable financing instrument, program, or frameworks with recognized market standards, along with an evaluation of the issuing entity's strategy pertinent to the implementation of these initiatives. The SPO strengthens the credibility of the issuer and improves the attractiveness of the financing by demonstrating alignment with internationally accepted industry associations published sustainable finance standards, guidelines and recommendations, including but not limited to the International Capital Market Association (ICMA) principles, to investors and the market. Enhanced transparency facilitates the engagement of issuers with investors sharing common sustainability goals. The VIS’ Second Party Opinion provides an independent assessment on the Framework against:

• Alignment of the Framework with certain third-party published sustainable finance principles and guidelines
  identified by the Issuer.
• Alignment of the Issuer overarching Sustainability Strategy with the financing Framework and rationale for
  financing including identification of most material sustainability factors for the issuer and how they are addressed by the framework.
• Alignment of the framework with the Security & Exchange Commission of Pakistan (SECP) Green Bond guidelines
  or with State Bank of Pakistan Green Finance framework.
• Consistency of the Framework to the UnitedNation Sustainable Development Goals (UNSDGs).
• Consistency of the Framework with the Maqasid Al-Shariah
  The VIS’ Second Party Opinion on the sustainability-linked finance framework evaluates whether the framework addresses the most material sustainability factors and assesses the relevance of key performance indicators (KPIs) to those material sustainability factors. The VIS’ Second Party Opinion on the Sustainable Finance Instrument provides an expert assessment of how well the funding allocated to green, social or sustainability linked projects aligns with the Use of Proceeds guidelines of the ICMA Green Bond Principles.

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Credit Rating Company Limited vis.com.pk 4 VIS Credit Rating Company Limited Second Party Opinion SEPTEMBER 2025 METHODOLOGY VIS’ Second Party Opinion provides an in-depth assessment for alignment of sustainable finance transactions or frameworks with certain third-party published sustainable finance principles and guidelines specified by the issuer. VIS offers opinions on alignment with various established Principles and Taxonomies, such as:

• ICMA Principles: This category encompasses the International Capital Market Association's Green Bond Principles
  (GBPs), Social Bond Principles (SBPs), and Sustainability Bond Guidelines (SBGs).
• Loan Association Principles: This includes the Loan Market Association (LMA), Asia-Pacific Loan Market
  Association (APLMA), and the LMA/APLMA/Loan Syndications and Trading Association (LSTA) ‘s and Social Loan Principles (SLPs).
• Regional Taxonomies: Regional green and sustainable finance methodology or Taxonomy including but not limited
  to Green Bond Endorsed Projects Catalogue (2021) or Eu Taxonomy.
  VIS’ SPO process evaluates the alignment of financing with established Principles, resulting in four potential outcomes:
  Aligned /Largely Aligned/ Partially Aligned/Not Aligned.
• Aligned means, outcome signifies that the financing meets the minimum requirements of the relevant Principles.
  All relevant analytical components must be aligned to achieve an overall outcome of aligned.
• Largely Aligned means, alignment to the extent of primary/core requirements of the principles while remaining
  short of meeting other/secondary requirements.
• Partially Aligned means , outcome meeting other/secondary requirements though remaining short of alignment
  with the core/primary requirements.
• Not Aligned means, outcome signifies that the financing does not meets the minimum requirements of the relevant
  Principles.
  This comprehensive assessment includes evaluating the Use of Proceeds, and whether the commitments made in the financing's documentation are aligned with the relevant use of proceeds requirement in related Principles. The Project Evaluation and Selection Process is scrutinized to ensure alignment with environmental or social requirements, focusing on clarity and alignment of sustainability objectives and measurement methodologies. The Management of Proceeds is analyzed to confirm dedicated funding to eligible sustainability projects and proper segregation and placement of financing proceeds. Lastly, the Reporting process is evaluated for its feasibility, transparency, verifiability, and comprehensiveness, which may involve annual verifications or periodic reviews. Additionally, VIS evaluates the alignment of the financing with the SECP’s Green Bond guidelines or the State Bank of Pakistan’s Green Finance Guidelines as applicable. The steps also involve mapping the proceeds categories with the UN Sustainable Development Goals (UNSDGs), ensuring that the financing's intended use aligns with these broader global objectives. The final step incorporates an assessment of how the framework/instrument contributes to the Maqasid AlShariah as mapped against the UNSDGs.

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Credit Rating Company Limited vis.com.pk 5 VIS Credit Rating Company Limited Second Party Opinion SEPTEMBER 2025 ANNUAL SURVEILLANCE VIS also provides annual post-issuance verification services to evaluate the Green Finance compliance with its sustainability objectives and the key performance indicators (KPIs) throughout the tenor of the finance. This would include securing information on actual performance of the green finance against the relevant core principles set out in the VIS’ SPO as well as actual performance against KPIs assessed in the SPO. The performance information/data provided by the issuer will be verified through meeting/discussion/site visits priorto issuance of the surveillance report. VIS also provides annual assessment as to whether the projects financed through Framework met the use of proceeds criteria and the reporting commitments outlined in the Framework. Full scope annual review, however, would encompass an evaluation of alignment across all criteria within third-party principles and guidelines.

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Credit Rating Company Limited vis.com.pk 6 VIS Credit Rating Company Limited Second Party Opinion SEPTEMBER 2025 Information herein was obtained from sources believed to be accurate and reliable; however, VIS does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. Rating is an opinion on credit quality only and is not a recommendation to buy or sell any securities. Copyright VIS Credit Rating Company Limited. All rights reserved. Contents may be used by news media with credit to VIS. Islamic International Rating Agency – Bahrain – iira.com Credit Rating Information & Services Ltd. – Bangladesh – crislbd.com Japan Credit Rating Agency, Ltd. - Japan China Chengxin International Credit Rating Company Limited - China 128/C, 25th Lane off Khayaban-e-Ittehad, Phase VII, DHA, Karachi Tel: (92-21) 35311861-64 431, Block-Q, Commercial Area, Phase-II, D.H.A. Lahore - Cantt. Tel: (92-42) 35723411-13 www.vis.com.pk info@vis.com.pk VIS Credit Rating Company Ltd. DISCLAIMER