Professional Documents
Culture Documents
THE INVESTORS ARE STRONGLY ADVISED IN THEIR OWN INTEREST TO CAREFULLY READ THE CONTENTS OF THIS PROSPECTUS,
ESPECIALLY THE RISK FACTORS GIVEN AT PARAGRAPH 5.2, BEFORE MAKING ANY INVESTMENT DECISION.
SUBMISSION OF FICTITIOUS AND MULTIPLE APPLICATIONS (MORE THAN ONE APPLICATIONS BY SAME PERSON) IS
PROHIBITED AND SUCH APPLICATIONS MONEY IS LIABLE TO CONFISCATION UNDER SECTION 18A OF THE SECURITIES AND
EXCHANGE ORDINANCE, 1969.
ADVICE FOR INSTITUTIONAL INVESTORS AND HIGH NETWORTH INDIVIDUAL INVESTORS
A SINGLE INVESTOR SHALL NOT SUBMIT MORE THAN ONE BIDDING APPLICATION EXCEPT IN THE CASE OF REVISION OF BID. IF AN
INVESTOR SUBMITS MORE THAN ONE BIDDING APPLICATION THEN ALL SUCH APPLICATIONS SHALL BE SUBJECT TO REJECTION.
THE ELIGIBLE INVESTORS SHALL NOT PLACE CONSOLIDATED BIDS. A BID APPLICATION WHICH IS BENEFICIALLY OWNED
(FULLY OR PARTIALLY) BY PERSONS OTHER THAN THE ONE NAMED THEREIN SHALL BE DEEMED TO BE A CONSOLIDATED
BID.
BANKERS TO ISSUE
Allied Bank Limited
Bank of Punjab
Faysal Bank Limited
Habib Bank Limited
Habib Metropolitan Bank
*In order to facilitate investors, United Bank Limited is providing the facility of electronic submission of application (eIPO) to its account
holders. United Bank Limited account holders can use United Bank Limited Net Banking to submit their application via link
http://www.ubldirect.com/corporate/ebank. Further, please note that online applications can be submitted 24 hours a day during the
subscription period which will close at midnight on MM DD, 2014.
This Prospectus contains all necessary information with regards to the Issuer and the Issue, which is material
in the context of the Issue and nothing has been concealed;
The information contained in this Prospectus is true and correct to the best of our knowledge and belief;
The opinions and intentions expressed herein are honestly held; and
There are no other facts and information, the omission of which makes this document as a whole or any part
thereof misleading.
For and on behalf of Issuer,
-sd________________________
Mr. Khalil Ahmad Hashmi
C.F.O. & Company Secretary
Page 2 of 83
GLOSSARY
BR
Book Runner
CAD
CAM
CDCPL
CDS
CGT
CMM
CNC
CNIC
CRO
CVT
EDM
FMCG
FPI
HNWI
ISE
IPO
Issuer/the Company/SPEL
ITO
KSE
KST
LM
Lead Manager
LSE
LC
Letter of Credit
NICOP
Ordinance
PST
SAP
SCRA
SECP / Commission
SST
TPS
TREC
WHT
Withholding Tax
Page 3 of 83
DEFINITIONS
Appendix 2
Application Money
In case of bidding for shares out of the Book Building portion, the
total amount of money payable by a successful Bidder which is
equivalent to the product of the Strike Price and the number of shares
to be allotted.
AND
In case of application for subscription of shares out of the general
public portion, the amount of money paid along with application for
subscription of shares which is equivalent to the product of the Issue
Price per share and the number of shares applied for.
Bid
Bidder
Bid Amount
The total amount of the Bid which is equivalent to the product of the
Bid price and the number of shares bid for.
Bidding Form
Bidding Period
The period during which Bids for shares of the Company shall be
made by institutional and HNWI Investors. The Bidding Period shall
be 8th of December, 2014 (from 9:00 a.m. to 7:00 p.m.).
Book Building
The method through which the Strike Price is determined. Under this
method, all the bids are arranged in descending order along with the
number of shares bid for at each price level and the cumulative
number of shares bid for. The strike price is determined by lowering
the price to the extent that the total shares the Issuer intends to issue
through the Book Building process are subscribed.
e-IPO facility
Prospectus
Price Band
As per the Book Building criteria dated July 24, 2014 issued by
SECP, a Price Band is defined as A price range, set by the Issuer,
with upper and lower limits between which the bidders can place
their bids. A bid made at a price below the lower limit or above the
upper limit of the Price Band shall not be accepted. Price Band in
this particular IPO is PKR 23.0/- per share to PKR 39.1 per share.
General Public
Issue
Issue Price
The price at which Ordinary Shares of the Company are issued to the
General Public. The Issue Price is the Strike Price i.e. PKR []/- per
share.
Institutional Investors
Lead Manager
Limit Bid
Limit Price
Lower Limit
A lower limit of price band, i.e. PKR 23.0 per share including a
premium of PKR 13.0 per share
Margin Money
The partial or total amount, as the case may be, paid by a Bidder at
the time of making a Bid. In case of bids by the institutional investors
it is 25% of the Bid Amount and in case of bids by HNWI investors
it is 100% of the Bid Amount.
Ordinary Shares
Preliminary Prospectus
Step Bid
Strike Price
Upper Limit
The upper limit of price band, i.e. PKR 39.1 per share including a
premium of PKR 29.1 per share
Page 6 of 83
TABLE OF CONTENTS
10
11
12
Page 7 of 83
PART 1
1
THE STOCK EXCHANGES DISCLAIM ANY LIABILITY WHATSOEVER FOR ANY LOSS
HOWEVER ARISING FROM OR IN RELIANCE UPON THIS DOCUMENT TO ANY ONE,
ARISING FROM ANY REASON, INCLUDING, BUT NOT LIMITED TO, INACCURACIES,
Page 8 of 83
Page 9 of 83
1.5. CERTIFICATE BY CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER OF THE
ISSUERS
We, being the Chief Executive Officer and Chief Financial Officer of the Issuer certify that the Prospectus
constitutes of full, true and plain disclosure of all material facts relating to the shares being issued through
this Prospectus and that nothing has been concealed.
The information provided and disclosures made in this Prospectus contain no misleading material.
For and on behalf of the Issuer
-sd_________________________
Zia Hyder Naqi
Chief Executive Officer
-sd_______________________
Khalil Ahmad Hashmi
Chief Financial Officer
Page 10 of 83
PART 2
Limit Bid: Limit Bid is placed at a price, which is the maximum price an investor is willing to pay for a
specified number of shares.
In such a case, a Bidder explicitly states a price at which he/she/it is willing to subscribe to a specific
number of shares. For instance, a Bidder may bid for 5.0 million shares at PKR 24per share, then the total
Application Money would amount to PKR 120,000,000/-.The Bid Amount will be PKR 120,000,000/-.Since
the Bidder has placed a Limit Bid of PKR 24 per share, this indicates that he/she/it is willing to subscribe
the shares at a price upto PKR 24 per share.
Step Bid: A series of Limit Bids at increasing prices. The aggregate amount of Step Bid shall not be less
than PKR 1,000,000/- and the amount of any individual step shall not be less than PKR 250,000/-.
Under this bidding strategy, Bidders place a number of Limit Bids at different increasing price levels. The
Bidders may, for instance, make a Bid for 0.5 million shares at PKR 24 per share, 0.4 million shares at PKR
25 per share and 0.3 million shares at PKR 26 per share, then in essence the investor has placed one Step
Bid comprising three Limit Bids at increasing prices. The Bid Amount will be PKR 29,800,000/-. A
SINGLE INVESTOR SHALL NOT MAKE MORE THAN ONE BID, HOWEVER, A BID CAN BE
REVISED.
Page 11 of 83
THE INVESTORS SHALL NOT PLACE CONSOLIDATED BIDS. A BID APPLICATION WHICH
IS FULLY OR PARTIALLY BENEFICIALLY OWNED BY PERSONS OTHER THAN THE ONES
NAMED THEREIN IS TO BE CONSIDERED AS A CONSOLIDATED BID.
Once the Bidding Period has lapsed and the book has been built, the Book Runner shall determine the Strike
Price.
Successful Bidders shall be intimated, within two (2) working days of the closing of the Bidding Period,
about the Strike Price and the number of shares provisionally allotted to each of them. The successful
institutional Bidders shall, within seven (7) working days of the closing of the Bidding Period, deposit the
balance amount as consideration against allotment of shares. Where a successful Bidder defaults in
payment of shares allotted to it, the Margin Money deposited by such Bidder shall be forfeited to the
Book Runner under clause 8.11 of Appendix 2.
AS PER REGULATION 8.16 OF APPENDIX 2, THE SUCCESSFUL BIDDERS SHALL BE
ISSUED SHARES IN THE FORM OF BOOK-ENTRY SECURITIES TO BE CREDITED IN
THEIR CDS ACCOUNTS. ALL THE INSTITUTIONAL AND HNWI INVESTORS SHALL,
THEREFORE, PROVIDE THEIR CDC ACCOUNT NUMBERS IN THE BID APPLICATION.
The Bidders must fill-in the part of the Bidding Form under the heading, Dividend Mandate to
enable the Company to directly credit their cash dividend, if any, in their respective Bank Accounts.
2.3. LEAD MANAGER
Arif Habib Limited (AHL) has been mandated by the Issuer to act as Lead Manager in respect of the
Issue, which is being made through the Book Building Process as laid out in Appendix 2.
2.4. BOOK RUNNER
AHL has been appointed as the Book Runner to the Issue.
2.5. ROLE AND FUNCTIONS OF LEAD MANAGER AND BOOK RUNNER
a) The Lead Manager of the Issue shall:
i. Conduct awareness campaigns through presentations, meetings, road shows etc. jointly with the Book
Runner;
ii. Ensure that all disclosures as required under the Ordinance and Appendix 2 have been made in the
Prospectus;
iii. Ensure that necessary infrastructure and electronic system/software is available to collect Bids and to carry
out the Book Building process in a fair, efficient and transparent manner;
iv. Ensure that they have obtained on behalf of the Issuer, all approvals/consents/NOCs relating to the Issue;
v. Publish an advertisement, approved by the Commission, in at least one Urdu and one English daily
newspaper having wide circulation in the federal capital and all the provincial capitals of Pakistan, in order
to invite the institutional and HNWI investors to participate in the bidding process; and
vi. Ensure that the Preliminary Prospectus will, after approval of the Commission, be uploaded on the Book
Runners as well as on the Companys website.
b) The Book Runner to the Issue shall:
Page 12 of 83
i. Conduct awareness campaigns through presentations, meetings, road shows etc. jointly with Lead Manager;
ii. Ensure that necessary infrastructure and electronic system/software is available to collect Bids and to carry
out the Book Building process in a fair, efficient and transparent manner;
iii. Collect Bid applications and applications money, security, margin as the case may be from the institutional
and HNWI investors in the manner as mentioned in Appendix 2;
iv. Place serial numbers, date and time on each bidding application at the time of collection of the same from
the bidders;
v. Vet the bidding applications;
vi. Build an order book showing demand for the shares at various prices;
vii. Determine the strike price at the close of the bidding period;
viii. Maintain record of the Bids received for subscription of the shares;
ix. Use the software for Book Building process provided by KSE, which is based on Dutch Auction
Methodology for display of the order book and determination of the strike price, on the terms and conditions
as may be agreed in writing between the KSE, the Issuer and the Book Runner;
x. For information of the investors, in addition to live display of the order book on the website of the
KSE, also live display the same order book simultaneously on its own website till closing of the
Bidding Period;
xi. Ensure that each Bid application contains depository account number of the bidder maintained with CDCPL
wherein shares shall be credited in case the bid is successful;
xii. Ensure that each Bid application contains the Dividend Mandate given by the bidder along with the
Bank Account to enable the Company to directly credit their cash dividend, if any, in their respective
Bank Accounts.
xiii. Not accept multiple Bids i.e. more than one bid application by the same person;
xiv. Enter into underwriting agreement with the Issuer relating to the Book building Portion of the Issue;
xv. Circulate copies of the Preliminary Prospectus cleared by the Stock Exchanges and approved by the
Commission along with the bidding forms to the prospective institutional and HNWI investor;
xvi. BR has established bid collection centers at the following addresses:
Karachi
Contact Officer:
Direct No.:
Mobile No.:
PABX No.:
Fax No.:
Email:
Postal Address:
Saifuddin Shamsi
021 3246 5891
0312 860 7372
021 111245111
021 32429653
saif.shamsi@arifhabibltd.com
Arif Habib Center, 23 MT Khan Road, Karachi
Lahore
Contact Officer:
Abdul Qadir
Page 13 of 83
Direct No.:
Mobile No.:
PABX No.:
Fax No.:
Email:
Postal Address:
Islamabad
Contact Officer:
Direct No.:
Mobile No.:
PABX No.:
Fax No.:
Email:
Postal Address:
abdul.qadir@arifhabibltd.com
Room # 220, Arif Habib Ltd, Lahore Stock Exchange, Lahore
Tahir Abbas
0312 180 3447
tahir.abbas@arifhabibltd.com
Ground Floor, Islamabad Stock Exchange, Islamabad
xvii. Ensure that all the Bids received by the bid collection centers are entered into the system developed by the
KSE for the purpose of Book Building. As per the criteria for Book Building issued by SECP, Bids
received shall be entered into the KSEs Book Building system till 5:00 pm and no new bid including
those received in the bid collection centers shall be entered into the system after 5:00 pm. Bidders can
withdraw their bids any time till 5:00 pm but after 5:00 pm withdrawal shall not be allowed. Bidders
can revise their bids any time till 7:00 pm.
2.6. OPENING AND CLOSING OF THE BIDDING PERIOD
The Bidding Period shall remain open for one working day during business hours i.e. will commence at
09:00 a.m. on December 08, 2014 and will close at 07:00 p.m. on December 08, 2014.
BIDDING PROCESS STARTS ON
HNWI investors are individual investors who bid for shares of value of PKR 1,000,000/- (Pak Rupees One
Million Only) or above in the Book Building process.
Page 14 of 83
xii. The Issuer and Book Runner shall not accept a bid which is for more than 10% of the Book Building
portion except the bids by the associates of the Issuer.
Bids from associated persons or other related persons or parties of the Issuer, shall not be accepted
for shares in excess of 5%, in aggregate, of the book building portion.
To check this threshold, the Issuer shall provide to the Book Runner and the Book Runner shall
obtain from the Issuer, list of associated persons of the Issuer before commencement of the bidding
period and the Book Runner shall make sure that the said list has been provided to KSE and the
employees deployed at the collection centers for collection of bids and entry thereof in the system.
xiii. The Bidders will receive back the duplicate form upon submission of their Bids which will be proof of their
Bid submission. The bidders shall not be provided with any receipt if a duly filled duplicate form is not
submitted along with the bid. In case of facsimile, a copy of form with receiving will be faxed back to the
Bidder.
xiv. Bidders can revise their Bids during the bidding period till 7:00 pm, however, after 5:00 pm withdrawal of
bids will not be allowed (for details please refer to para 2.13 and 2.15).
xv. Book Runner shall maintain record of the Bids received / rejected / revised/ withdrawn along with identities
of the Bidder and evidence of amount received.
xvi. Book Runner shall ensure that all the bids received at the Bid collection centers are entered into the
system developed by KSE for the purpose of the Book Building according to the procedure given in
para 2.2 and as per clause 8.6 of Appendix 2. The system shall be capable of displaying live, an order
book, in descending order with respect to the Bid price, showing the demand for shares at various
prices and accumulative number of shares bid for along with percentage of the total shares Issued.
The order book should also show the Bids revised and the Bids withdrawn.
xvii. At the close of Bidding Period, the Issuer, in consultation with the Lead Manager and Book Runner, shall
determine the Strike Price with the consent of the Issuer.
xviii. Successful Bidders shall be intimated, within two (2) working days of the closing of the Bidding Period, the
Strike Price and the number of shares provisionally allotted to each of them.
xix. The successful institutional Bidders shall, within seven (7) working days of the closing of the Bidding
Period, deposit the balance amount as consideration against allotment of shares.
xx. Under clause 8.11 of Appendix 2, where a successful institutional Bidder defaults in payment of
shares allotted to it, the Margin Money deposited by such Institutional Bidder shall be forfeited to the
Book Runner.
xxi. Margin money of unsuccessful Bidders will be refunded within three (3) working days of the close of the
Bidding Period.
xxii. Final allotment of shares out of the Book Building portion shall be made after receipt of full subscription
money from the successful Bidders; however, shares to such Bidders shall be transferred at the time of
transfer of shares out of the General Public portion of the Issue to successful applicants.
2.10. BANK ACCOUNT FOR BOOK BUILDING
The Issuer has opened two separate bank accounts for collection of applications money, one each for the
Book Building portion and the general public portion of the Issue.
Page 16 of 83
The Bidders shall draw demand draft or pay order in favor of IPO of Synthetic Products Enterprises
Limited Book Building Account which has been opened at Habib Metropolitan Bank Limited and
Summit Bank Limited. The collection banks shall keep and maintain the bid money in the said account.
Once the Strike Price is determined and list of successful bidders/allottees is finalized, the Lead Managers,
after obtaining NOC from KSE, may request in writing to the collection bank for transfer of the money of
successful and accepted applications to the Issuers account(s) and advice for refund of the bid money to
unsuccessful Bidders.
2.11. PAYMENT INTO THE BOOK BUILDING ACCOUNT
The Bidders shall draw a demand draft, pay order or online transfer favoring IPO of Synthetic Products
Enterprises Limited Book Building Account and submit it at the designated Bid collection center
either in person or through facsimile along with a duly filled Bidding Form.
CASH MUST NOT BE SUBMITTED WITH THE BIDDING FORM AT THE BID COLLECTION
CENTER.
ONLINE TRANSFER, PAY ORDER, OR DEMAND DRAFT ACCEPTABLE TO THE BOOK
RUNNER AND DRAWN IN FAVOR OF IPO OF SYNTHETIC PRODUCTS ENTERPRISES
LIMITED BOOK BUILDING ACCOUNT ARE ACCEPTABLE.
Since the investors can bid for shares through limit bid or step bid, therefore payment procedure is
explained below for these methods.
a) PAYMENT FOR LIMIT BID
If investors are placing their Bids through Limit Bid then they shall deposit the Margin Money based on
the number of shares they are bidding for at their stated Bid Price.
For instance, if an investor is applying for 5.0 million shares at a price of PKR 24/- per share, then the total
Application Money would amount to PKR 120,000,000. In such a case, (i) HNWI shall deposit PKR
120,000,000 in the Book Building account as the Bid amount which is 100% of PKR 120,000,000; and (ii)
Institutional Investors shall deposit PKR 30,000,000 in the Book Building account as the margin amount
which is at least 25% of PKR 120,000,000.
b) PAYMENT FOR STEP BIDS
If investors are placing a Step Bid, which is a series of limit Bids at increasing prices, then they shall
deposit the Margin Money/ Bid money based on the total number of shares they are bidding for at their
stated Bid prices.
For instance, if the investor Bids for 0.5 million shares at PKR 24/- per share, 0.4 million shares at PKR 25/per share and 0.3 million shares at PKR 26/- per share, then in essence the investor has placed one Step
Bid comprising three limit Bids at increasing prices. The Margin Money would amount to PKR
29,800,000/- which is the sum of the products of the number of shares Bid for and the Bid price of each
limit Bid. In such a case, (i) HNWI shall deposit PKR 29,800,000/- in the Book Building Account as Bid
amount which is 100% of PKR 29,800,000/- and (ii) Institutional investors shall deposit at least PKR
7,450,000/- in the Book Building Account as Margin Money which is 25% of PKR 29,800,000/-.
2.12. PAYMENT BY FOREIGN INVESTORS
Foreign investors may subscribe using their special convertible rupee accounts (SCRA), as set out under
Chapter 20of the State Bank of Pakistans Foreign Exchange Manual 2002. Under Section 7(i) of Chapter
20, companies issuing shares out of new public Issues on repatriable basis, as permitted under sub para (B)
(I) of paragraph 6, may open foreign currency collection accounts with banks abroad or in Pakistan for
Page 17 of 83
receiving the subscription in foreign currency. They may also allow refunds from these accounts to
unsuccessful applicants.
Foreign investors do not require any regulatory approvals to invest in the shares being issued through this
Prospectus. Payment in respect of investment in the shares of the Company has to be made in foreign
currency through an inward remittance or through surplus balances in SCRA. Local currency cash
account(s) opened for the purpose of Foreign Portfolio Investment (FPI) is classified as SCRA. There is no
restriction on repatriation of sale proceeds of and the dividend yield on the shares of the Company.
Underlying client names/beneficial owners are required to be disclosed at depository level.
A.
B.
It is however pertinent to note that the procedure and requirements of each financial institution with respect
to opening of SCRA differs, hence it is advised to request the procedure from respective financial
institution.
Payments made by foreign investors shall be supported by proof of receipt of foreign currency through
normal banking channels. Such proof shall be submitted along with the Application by the foreign investors.
2.13. REVISION OF BIDS BY THE BIDDER
The Bidders shall have the right to revise their Bids any time during the Bidding Period up to 7:00 pm.
Online revision of the Bids may be allowed to the Bidders through system software. This will however be
subject to the condition that the Bidder shall comply with the requirements of bidding as stipulated under
Appendix 2 and any other condition or procedure disclosed in the Preliminary Prospectus.
2.14. REJECTION OF BIDS BY THE BOOK RUNNER
In terms of clause 8.4 of Appendix 2, Book Runner may reject a Bid placed by an institutional/HNWI
investor for reasons to be recorded in writing and the reasons should be disclosed to such Bidder forthwith.
Decision of the Book Runner shall not be challengeable by the Bidder or any of its associates.
2.15. WITHDRAWAL OF BIDS BY THE BIDDER
A Bidder has the right to withdraw a Bid from the bidding system any time during the Bidding Period till
05:00 pm. Online withdrawal of the Bids may be allowed to the Bidders through system software. This will
however be subject to the condition that the Bidder shall comply with the requirements of bidding as
disclosed under Appendix 2 and any other condition or procedure disclosed in the Prospectus.
Page 18 of 83
Number of shares being Issued through the Book Building: 14,512,500 Ordinary Shares
Lower limit price: PKR 23.0 per share
Bidding Period: Monday, December 08, 2014
Bidding Time: 9:00am 7:00pm
Bid Entry Time: 9.00am 5.00pm
Bid Withdraw Time: 9:00am 5:00pm
Bidding Revision Time: 9:00am 7:00pm
Page 19 of 83
Bidder
Institution A
Institution E
Institution B
Foreign Institution F
HNWI A
Institution C
HNWI E
Institution C
Institution B
HNWI A
Institution C
Bid Withdrawn
Price (PKR
per share)
29.00
28.00
28.50
28.00
27.50
27.00
26.00
25.50
25.00
24.00
23.00
Quantity
(shares
Millions)
2.00
1.00
5.00
3.00
1.00
2.00
1.51
6.00
10.00
2.00
7.00
Cumulative
Number of
Shares
2.00
2.00
7.00
10.00
11.00
13.00
14.51
20.51
30.51
32.51
39.51
Category of Order
Limit Price
Limit Price
Limit Price
Limit Price
Step Bid
Step Bid
Limit Price
Step Bid
Limit Price
Step Bid
Step Bid
On the basis of the figures provided in the above illustration, according to the Dutch Auction Method, the
Strike Price would be set at PKR 26.00 per share to sell the required quantity of 14,512,500 ordinary shares.
At PKR 29.00 per share, investors are willing to buy only 2.00 million shares. Since 12.51 million shares are
still available, therefore the price will set lower.
At PKR 28.50 per share, investors are willing to buy 5.00 million shares. Since 7.51 million shares are still
available; therefore, the price will set lower.
At PKR 28.00per share, investors are willing to buy 3.00 million shares. Since 4.51 million shares are still
available; therefore, the price will set lower.
At PKR 27.50 per share, investors are willing to buy 1.00 million shares. Since 3.51 million shares are still
available; therefore, the price will set lower.
At PKR 27.00 per share, investors are willing to buy 2.00 million shares. Since 1.51 million shares are still
available; therefore, the price will set lower.
At PKR 26.00 per share, investors are willing to buy 1.51 million shares. Since after bidding for 1.51
million shares at PKR 26.00 per shares no share will be available, therefore, the Strike Price will be set at
PKR 26.00 per share for the entire lot of 14.51 million shares.
The Bidders, who have placed bids at prices above the Strike Price (which in this illustration is PKR 26.00
per share), will become entitled for allotment of shares at the Strike Price.
The Bidders, who have placed bids below PKR 26.00 per share, will not qualify for allotment of shares.
After allotment in the aforementioned manner, 1.51 million shares are still available for allotment. These
shares will be allotted to the Bidders who have placed bid(s) at PKR 26.00, however, for the purpose of
Page 20 of 83
allotment of these 1.51 million shares preferences will be given to the Bidder who has placed the bid
earlier.
2.18. BASIS OF ALLOTMENT OF SHARES
Once the strike price is determined all those bidders whose bids have been found successful shall become
entitled for allotment of shares. For allocation of shares priority shall be given to the bids placed at the
highest price. The bidders, who have made bids at prices above the strike price, will be issued shares at the
strike price and the differential, if any, will be refunded. The bidders, who have made bids below the strike
price, shall not qualify for allotment of shares and their margin money shall be refunded.
For the purpose of allotment of shares, the bid(s) made at the price determined / discovered as Strike Price
through the Book Building process shall be ranked equally and preference will be given to the bidder who
has made the bid earlier.
Incase bids received at the Upper limit exceeds the number of shares allocated under the Book Building,
then preference will be given to the bidders who have made the bid earlier.
Final allotment of shares out of the Book Building portion shall be made after receipt of full subscription
money from the successful bidders; however, shares to such bidders shall be credited at the time of issue of
shares out of the public portion of the issue to successful applicants.
2.19. REFUND OF MARGIN MONEY
Investors that place Bids lower than the Strike Price shall not be eligible for allotment of shares. Margin
Money of the unsuccessful Bidders shall be refunded within three (3) working days of the close of the
bidding period as required under clause 8.12 of Appendix 2.
The bidders, who have made bids at prices above the strike price, will be issued shares at the strike price and
the differential will be refunded, where required.
2.20. UNDERWRITING
After determination of the Strike Price the Book Runner shall within two (2) working days of the closing of
the bidding period enter into an underwriting agreement with the Issuer, with respect to the Book Building
Portion of the Issue, indicating the number of shares that Book Runner would underwrite at the Strike Price
and the underwriting Commission/Fee to be charged.
2.21. PUBLICATION OF THE FINAL PROSPECTUS
The underwriting agreement for the public portion of the Issue shall be finalized within ten (10) working
days from the closing of Bidding Period.
Upon finalization of the underwriting agreements, the Lead Managers shall, within ten (10) working days
from the date of closing of the Bidding Period, submit an application to KSE for allocation of dates for
publication of the final Prospectus and subscription of shares by the general public.
The final Prospectus in full or in abridged form must be published within seventeen (17) working days of
the closing of the Bidding Period in the manner as specified in Section 53 of the Companies Ordinance,
1984.
Public subscription for the shares shall be held at any date(s) within thirty days (30) of the publication of the
final Prospectus but not earlier than seven (7) days of such publication.
Page 21 of 83
On behalf of the Issuer, we hereby confirm that all material information as required under the Companies
Ordinance, 1984 and the Listing Regulations of the Karachi Stock Exchange Limited has been disclosed
in the Prospectus and that whatever stated in the Prospectus and the supporting documents is true and
correct to the best of our knowledge and belief and that nothing has been concealed.
-sd_____________________
Zia Hyder Naqi
Chief Executive Officer
Synthetic Products Enterprises Limited
-sd_____________________
Khalil Ahmad Hashmi
C.F.O & Company Secretary
Synthetic Products Enterprises Limited
Page 22 of 83
-sd_____________________
Zeshan Afzal
Executive Director & Head of Corporate Finance
Arif Habib Limited
Page 23 of 83
Being mandated as Book Runner to Initial Public Offering of Synthetic Products Enterprises Limited
through the Book Building process, we hereby confirm that all material information as required under the
Companies Ordinance, 1984 and the Listing Regulations of the Karachi Stock Exchange including
Appendix 2 thereof has been disclosed in this Prospectus and that whatever stated herein and in the
supporting documents is true and correct to the best of our knowledge and belief and that nothing has been
concealed.
-sd_____________________
Zeshan Afzal
Executive Director & Head of Corporate Finance
Arif Habib Limited
Page 24 of 83
PART 3
3
No. of shares
100,000,000
441,940
49,893,060
7,665,000
58,000,000
Face value
Premium
(PKR)
(PKR)
AUTHORIZED CAPITAL
Ordinary shares of PKR 10/- each
1,000,000,000
ISSUED, SUBSCRIBED AND PAID UP SHARE CAPITAL
Issued against Cash
4,419,400
Issued as fully paid bonus shares
498,930,600
Issued for consideration other than
76,650,000
Cash (refer to note 3.1-c)
Total Existing Paid up Capital
580,000,000
Total
(including
premium)
(PKR)
1,000,000,000
4,419,400
498,930,600
76,650,000
580,000,000
262,489,450
14,673,650
178,728,180
60,253,620
60,253,620
3,596,480
5,000
580,000,000
188,662,500
333,787,500
The existing issued, subscribed & paid up capital of the Company is held as follows:
SHARES HELD BY DIRECTORS & FAMILY
26,248,945 Mr. Almas Hyder
262,489,450
1,467,365 Mrs. Munawar Naqi
14,673,650
17,872,818 Dr. S. M. Naqi
178,728,180
6,025,362 Mr. Raza Haider Naqi
60,253,620
6,025,362 Mr. Zia Hyder Naqi
60,253,620
359,648 Mr. Sheikh Naseer Hyder
3,596,480
500 Mr. Muhammad Tabassum Munir
5,000
58,000,000 Total Existing Paid up Capital
580,000,000
Present Issue
Allocation to Institutions / HNWIs
investors through book building
14,512,500
145,125,000
process at a strike price of PKR []
each
General Public (including preferential
4,837,500 allocation of 2.00% of 4,837,500 to
48,375,00
employees of SPEL)
19,350,000 Total Present Issue Paid Up Capital
193,500,000
62,887,500
111,262,500
251,550,000
445,050,000
251,550,000
1,025,050,000
773,500,000
* The premium in the capital structure is on the basis of Lower Limit of PKR 23.0 per share, which will be substituted
with the premium based on strike price determined through the book building process.
Page 25 of 83
Notes:
a) As per rule 3 (I) (iv) of The Companies (Issue of Capital) Rules, 1996, the sponsors shall at all times
retain at least 25% of the capital of the Company.
b) As per regulation 5.4.5(a) of the KSE Rule Book, sponsors shareholding in excess of 25% of the
capital of the Company is not saleable for a period of six (06) months from the date of public
subscription.
c) As per regulation 5.4.5 (b) of the KSE Rule Book, shares allocated to employees of the Company
shall not be saleable for a period of six (06) months from the date of public subscription.
d) SPEL had a paid-up capital of PKR 242,438,870 divided into 24,243,887 shares of PKR 10 each
and SPEL Packaging Industries (Private) Limited (SPIL) had a paid-up capital of PKR
52,500,000 divided into 5,250,000 shares of PKR 10 each. SPIL was an associated company of
SPEL and was engaged in the business of plastic packaging for the food industry. Keeping in view
the synergies of cost effectiveness and market expansion, the sponsors of the both the Companies
decided to merge SPIL with and into SPEL with SPEL being the surviving entity At a swap ratio of
1.46 [i.e 1.46 shares of SPEL against 1 share of SPIL], a total 7,665,000 shares of SPEL were issued
to members of SPIL. The Honorable Lahore High Court, Lahore vide its order No. 16-2011 dated
15 July 2011 has sanctioned the scheme of arrangement for amalgamation of SPEL Packaging
Industries (Private) Limited with SPEL effective from 1 July 2010. Prior to the merger, SPEL had
seven directors on its Board out of which four key Directors of SPEL owned and controlled SPEL
Packaging Industries (Private) Limited.
e) Relaxation has been sought for clause 1 of the revised criteria for book building issued by SECP
vide circular No. SMD/CIW/Misc 14/2007 on July 24, 2014.
Page 26 of 83
3.4. FACILITIES
INVESTORS
AVAILABLE
TO
NON-RESIDENT
PAKISTANI
AND
FOREIGN
Non-resident Pakistani investors and foreign investors may subscribe for the shares being issued through
this Prospectus by using their SCRA. For details please see Chapter 20 of the Foreign Exchange Manual of
the State Bank of Pakistan. Under Section 7(i) of Chapter 20 of the said Manual, Companies issuing shares
out of new public Issues on repatriable basis, as permitted under sub para (B) (I) of paragraph 6, may open
foreign currency collection accounts with banks abroad or in Pakistan for receiving the subscription in
foreign currency. They may also allow refunds from these accounts to unsuccessful applicants.
Foreign investors do not require any regulatory approvals to invest in the shares being issued through this
Prospectus. Payment in respect of investment in the shares of the Company has to be made in foreign
currency through an inward remittance or through surplus balances in SCRA. Local currency cash
account(s) opened for the purpose of Foreign Portfolio Investment (FPI) is classified as SCRA. There is no
restriction on repatriation of sale proceeds and dividend payouts on shares. Underlying client
names/beneficial owners are required to be disclosed at depository level.
A.
B.
It is however pertinent to note that the procedure and requirements of each financial institution with respect
to opening of SCRA differs, hence it is advised to make a prior request for the procedure from concerned
financial institution.
Payments made by foreign investors must be supported by proof of receipt of foreign currency through
normal banking channels. Such proof must be submitted along with the Application by the foreign investors.
Page 27 of 83
(c) Application for shares below the total value of PKR []/-in case of shares in physical form and PKR
[]/- in case of shares in the book entry form shall not be entertained.
(d) SUBMISSION OF FICTITIOUS AND MULTIPLE APPLICATIONS (MORE THAN ONE
APPLICATION BY SAME PERSON) IS PROHIBITED AND SUCH APPLICATIONS
MONEY IS LIABLE TO CONFISCATION UNDER SECTION 18A OF THE SECURITIES
AND EXCHANGE ORDINANCE, 1969.
(e) If the shares issued to the general public are sufficient to accommodate all applications, all applications
shall be accommodated.
(f) If the shares applied for by the general public are in excess of the shares being issued to them, the
distribution shall be made by computer balloting, in the presence of the representative(s) of the KSE in
the following manner:
(i) If all applications for 500 shares can be accommodated, then all such applications shall be
accommodated first. If all applications for 500 shares cannot be accommodated, then balloting will
be conducted among applications for 500 shares only.
(ii) If all applications for 500 shares have been accommodated and shares are still available for
allotment, then all applications for 1,000 shares shall be accommodated. If all applications for 1,000
shares cannot be accommodated, then balloting will be conducted among applications for 1,000
shares only.
(iii) If all applications for 500 shares and 1,000 shares have been accommodated and shares are still
available for allotment, then all applications for 1,500 shares shall be accommodated. If all
applications for 1,500 shares cannot be accommodated, then balloting will be conducted among
applications for 1,500 shares only.
(iv) If all applications for 500 shares, 1,000 shares and 1,500 shares have been accommodated and
shares are still available for allotment, then all applications for 2,000 shares shall be accommodated.
If all applications for 2,000 shares cannot be accommodated, then balloting will be conducted
among applications for 2,000 shares only.
(v) After the allotment in the above mentioned manner, the balance shares, if any, shall be allotted in
the following manner:
If the remaining shares are sufficient to accommodate each application for over 2,000 shares,
then 2,000 shares shall be allotted to each applicant and remaining shares shall be allotted on
pro-rata basis.
If the remaining shares are not sufficient to accommodate all the remaining applications for over
2,000 shares, then balloting shall be conducted for allocation of 2,000 shares each to the
successful applicants
(g) If the Issue is over-subscribed in terms of amount only, then allotment of shares shall be made in the
following manner:
(i) First preference will be given to the applicants who applied for 500 shares;
(ii) Next preference will be given to the applicants who applied for 1,000shares;
(iii) Next preference will be given to the applicants who applied for 1,500 shares;
(iv) Next preference will be given to the applicants who applied for 2,000 shares; and then
(v) After allotment of the above, the balance shares, if any, shall be allotted on pro rata basis to the
applicants who applied for more than 2,000 shares.
Page 28 of 83
(h) Allotment of shares will be subject to scrutiny of applications for subscription of shares.
(i) Applications, which do not meet the above requirements, or applications which are incomplete, will be
rejected.
(j) The employees of the Company have been given preferential allocation of 96,750 shares at a price of
PKR []/- per share. Employees will subscribe their portion at the day of public subscription. If
employee quota remains unsubscribed, the remaining shares will be allotted to the general public.
the date on which the instrument of transfer was lodged with it, notify the defect or invalidity to the
transferee who shall, after the removal of such defect or invalidity, be entitled to re-lodge the transfer deed
with the Company.
b) Transfer under book entry system
The shares maintained with the CDS in the book entry form shall be transferred in accordance with the
provisions of the Central Depositories Act, 1997 and the CDCPL Regulations.
Number of
shares
Par Value
Amount
(Par Value)
Considerations
15-May-82
1,000
100.00
100,000
4-Feb-84
5,000
100.00
500,000
Right Issue
15-Jul-84
3,900
100.00
390,000
Right Issue
24-Nov-84
50
100.00
5,000
Right Issue
1-Aug-85
5,454
100.00
545,400
Right Issue
11-Dec-88
2,640
100.00
264,000
Right Issue
24-Dec-89
1,250
100.00
125,000
Right Issue
1-Jan-90
19,294
100.00
1929,400
Bonus Issue
10-Jun-91
38,588
100.00
3858,800
Bonus Issue
30-Jun-92
15,435
100.00
1543,500
Bonus Issue
12-Jun-95
9,261
100.00
926,100
Bonus Issue
26-May-05
15,282
100.00
1,528,200
Bonus Issue
15-Nov-07
17,574
100.00
1,757,400
Bonus Issue
9-Jun-08
1,482,008
100.00
148,200,800
Bonus Issue
As of 30-Jun-08
1,616,736
100.00
161,673,600
As of 30-Jun-08
16,167,360
10.00
161,673,600
31-Dec-09
4,850,208
10.00
48,502,080
Bonus Issue
22-Jan-10
249,000
10.00
2,490,000
Right Issue
7-Oct-10
2,977,319
10.00
29,773,190
Bonus Issue
19-Oct-11
7,665,000
10.00
76,650,000
19-Oct-11
1,073,100
10.00
10,731,000
Bonus Issue
26-Sep-12
8,245,496
10.00
82,454,960
Bonus Issue
16-Jun-14
16,772,517
10.00
167,725,170
Bonus Issue
10.00
580,000,000
TOTAL
58,000,000
*Scheme of amalgamation (refer to 3.1-c)
the IPO are not sufficient to finance the expansion plan, then balance funds will be arranged through internal
resources and bank borrowings.
Description
Building
Plant and Machinery
Working capital
Total
The company intends to use the funds raised through IPO in balancing, modernization replacement and
expansion of its manufacturing facilities. The envisaged plan of the Company is expected to generate extra
sales of Rupees 1.3billion in terms of revenue which in turn will bring a good contribution margin for the
shareholders.
Expansion Plan to Meet Future Demand
SPELs growth, in addition to intrinsic growth attributable to new products & market development, is also
directly linked with the consumer/FMCG and auto sectors. Despite the slow economy and political
instability in recent years, the consumer/FMCG sector has witnessed an impressive growth of over 30% in
the last 5 years. This growth is a result of multiple factors including increased urbanization (urban
population of 73mn in 2014 compared to 63mn in 2010), growth in per capita income (US$ 1,386 in 2014
compared to 1,072mn) which leads to higher disposable incomes, young population (over 70% is less than
the age of 35 years) and changing consumer trends. In addition, companies such as, Unilever, Nestle etc are
constantly improving on their product range and sales distribution. The growth in consumer/FMCG sector is
also translated in companies profits and share price. Apart from these big names, other local players are
also penetrating into the market (e.g. Gourmet with over 100 retail outlets in Lahore) which is beneficial for
the growth of SPEL in coming years as 60% of the sales are concentrated in this sector.
The rationalization of import policy of used cars, the local production of cars and trucks is on the rise again.
Also, the launch of new models by Toyota, Honda and Suzuki has been welcomed by local consumer. For
the first three months of FY2015, production of cars has increased to 30,691 units compared to 27,545 units
in the corresponding period last year. Further breakdown reveals Toyotas major contribution towards this
growth which is a result of the launch of 2014 Corolla. Being an exclusive supplier to Toyota, Honda and
Suzuki, SPELs sales are also expected to increase at an accelerated rate in coming years.
The investment in new machinery and technology will not only be helpful for top line growth but would
also be instrumental to control the manufacturing cost mainly due to updated technology which has features
of using lesser energy, reduced cycle times of manufacturing, less labor requirement, and will ultimately
deliver a better quality to the customers.
Name of Machine
Capacity
Est. Cost
(PKR '000s)
% of
Total Est.
Cost
L/C
Status
Injection Stretch
Blow Molding
Machine
65,000
10.7%
L/C
opened
Blow molding
18,000,000 bottles
p.a
70,000
11.5%
Thermoforming
54,000
8.9%
Injection molding
machine
19,000
3.1%
270,000
44.3%
131,500
21.6%
Pre forms
Injection molding for
auto parts
95,000,000 preforms
p.a.
1680 tons, 720 tons,
520 tons, 320 tons
Page 31 of 83
After
IPO
After
IPO
After
IPO
After
IPO
L/C
partially
Expected
Shipment
Date
Expected
Operational
Date
Mid Dec
2014
Mid Feb
2015
May 2015
July 2015
May 2015
July 2015
April
2015
September
2015
November
2014 and
June 2015
December
2015
December
2014 and July
opened
Total Cost
May 2015
2015
609,500
Plant and machinery is being imported from top of the line suppliers in their respective categories. These
machines will be installed by the technical teams of the foreign suppliers. Subsequent to the receipt of funds
from IPO, most of the plant and machinery is expected to be installed within 8-10 months and will come
online by end of first quarter of FY2015-16. As such, the impact of expansion plan on shareholder returns
will be reflected in the financials of FY2016.
Page 32 of 83
2015
Tax Rate
Holding period of securities
less than twelve
more than twelve months and less
months
than twenty four months
12.5%
10.0%
The value of taxable services for the purpose of levy of sales tax is the gross commission charged from
clients in respect of purchase or sale of shares in a Stock Exchange. The Second Schedule of the above
mentioned Acts levy a sales tax on Brokerage at the rate of 16%. Sales tax charged under the
aforementioned Acts is withheld at source under statutory requirements.
Presently, the share of packaging sector in the revenues of the Company is around 60% and share of
revenues from the auto sector is around 40%.SPEL has actively increased its sales to FMCG sector which is
a high growth and high margin sector.
Sales Mix
52.10%
55.80%
59.10%
59.45%
47.90%
45.20%
40.90%
39.55%
2011
2012
2013
2014
Auto Sector
FMCG/Food Packaging
Page 36 of 83
Jun-14
EPS
(A)
9.13
BVPS
(B)
50.30
MPS
(C)
134.36
P/E
(C/A)
14.71
PB
(C/B)
2.67
Packaging
Dec-13
6.97
69.17
262.93
37.71
3.80
Packaging
Dec-13
18.33
498.81
670.16
36.56
1.34
EcoPack
Packaging
Jun-14
2.51
17.59
17.57
7.00
1.00
SPEL
Packaging
Jun-14
2.10
14.24
23.00
10.94
1.62
Companies
Sector
Year End
Cherat Packaging
Packaging
Tri-Pack Films
Packages
P/E
24.00
10.94
54%
Page 37 of 83
P/B
2.20
1.62
27%
PART 4
4.1. UNDERWRITING
Book Building Portion
Arif Habib Limited has been mandated to act as the Book Runner to the Issue. The Book Runner shall
underwrite the Book Building Portion of the Issue of 14,512,500 ordinary shares within two (2)
working days of the closing of the bidding period as required under clause 5 of Appendix 2 of the Rule
Book of the Karachi Stock Exchange at the Strike Price determined through the Book Building process.
In the opinion of the Directors, the resources of the Underwriter are sufficient to discharge its
underwriting obligations/commitments.
Public Portion
As required under clause 6 of Appendix 2, the Public Portion of the Issue of 4,837,000 ordinary shares
has been underwritten as under:
Name of Underwriter
Number of Shares
Amount (PKR)
[]
[]
[]
[]
[]
[]
[]
[]
Total
Page 38 of 83
4.5. BROKERAGE
For the public issue, the Issuer will pay brokerage to the TREC holder of KSE, LSE and ISE at the rate of
1% of the value of shares (including premium) actually sold through them. No brokerage shall be paid to the
TREC holders in respect of shares taken up by the underwriters by virtue of their underwriting
commitments.
Rate
Amount (PKR)
1.3%
1.0%
1.5%
1.5%
1.5%
1.0%
5,785,650
1,112,65
5,006,813
1,668,938
1,668,938
4,450,500
0.25%~0.5%
(tentative)
1,380,781
5,000,000
1,686,348
*Represent maximum amount that is expected to be paid based on the Lower Limit Price
**These amounts do not include Sindh Sales Tax, as mentioned in section 3.21, wherever applicable
Page 39 of 83
200,000
532,125
106,875
750,000
1,000,000
29,238,968
PART 5
5.1
BRIEF HISTORY
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SPEL is ISO 9001 and ISO 14001 certified. In addition, Company is also SEDEX audited and FSSC
22000 approved.
5.1.2. Types of Products and Services
The products molded or produced by the Company can be categorized in the following three
segments:
(i) Products for food industry
For FMCG and food industry, SPEL is producing water bottles, water taps, tubs with lids, ice
cream containers, cups for yogurt and ice cream, shampoo bottles, plastic trays, plastic crates
and plastic cutlery.
(ii)
their size, complexity, and application. The injection molding process requires the use of an
injection molding machine, raw plastic material, and a mold. The plastic is melted in the injection
molding machine and then injected into the mold, where it cools and solidifies into the final part.
Injection molding is used to produce thin-walled plastic parts for a wide variety of applications,
one of the most common being plastic housings. Plastic housing is a thin-walled enclosure, often
requiring many ribs and bosses on the interior. These housings are used in a variety of products
including household appliances, consumer electronics, power tools, and as automotive dashboards.
Other common thin-walled products include different types of open containers, such as buckets.
Injection molding is also used to produce several everyday items such as toothbrushes or small
plastic toys. Many medical devices, including valves and syringes, are manufactured using injection
molding.
The process cycle for injection molding is very short, typically between 2 seconds and 2 minutes,
and consists of the following four stages namely, Clamping, Injection, Cooling and Ejection:
Blow Molding Method
Blow molding is a manufacturing process that is used to create hollow plastic parts by inflating a
heated plastic tube until it fills a mold and forms the desired shape. The raw material in this
process is a thermoplastic in the form of small pellets or granules, which is first melted and formed
into a hollow tube, called the parison. There are various ways of forming the parison, as explained
below. The parison is then clamped between two mold halves and inflated by pressurized air until
it conforms to the inner shape of the mold cavity. Typical pressures are 25 to 150 psi, far less than
for injection molding. Lastly, after the part has cooled, the mold halves are separated and the part
is ejected.
Parts made from blow molding are plastic, hollow, and thin-walled, such as bottles and containers
that are available in a variety of shapes and sizes. Small products may include bottles for water,
liquid soap, shampoo, motor oil, and milk, while larger containers include plastic drums, tubs, and
storage tanks.
Extrusion Thermoforming Method
Extrusion Process
Extrusion is well known manufacturing process that is used to create objects with a fixed crosssectional profile such as tubes and pipes. This process involves drawing or pushing a material
through a die with a desired cross section. Continuous products such sheets, films, etc. can be
produced using the extrusion process.
Thermoforming Process
In the thermoforming process a plastic sheet is formed to a desired shape in a mold after heating to
the forming temperature. In the industry, large production machines are used to form and heat the
plastic sheets. Usually they are capable of producing very large volumes of finished products in a
very short period of time. Once thermoformed, it is trimmed to get the finished shape.
Depending on the application, the thermoforming process uses thin or thick films. Thin films are
used for manufacturing trays, containers, disposable cups, blisters, etc. They have wide
applications in the food, fast moving consumer goods, etc.
5.1.4. Production Technology
The Company has implemented Toyota Production Systems, which leads to a very lean and
efficient manufacturing environment. Indus Motor Company has given awards to SPEL for having
Page 42 of 83
the best production systems in the industry. Appropriate technologies are constantly acquired and
updated.
Five S (5-S) is a constant activity to improve the efficiency which leads to good housekeeping and
eventually better productivity. Every employee of the Company receives training at least once in a
year in his/her relevant field. The operating information about the Company and its production is
made visible through a visual management system.
An Obeya Room has been created in the factory where all information of the Company about
supply, production, improvements, expansion etc is updated on a daily basis. Daily morning
meetings are held to communicate and share information among the key employees of the
Company. The philosophy of Kaizen is implemented and the whole company works as a team.
5.1.5. Research and Development
The Company has a division for research and development, which is equipped with state of the art
designing and analysis softwares along with efficient and accurate CNC machines, excellent EDM
machines and allied equipment.
The Company also has a CMM (Co-Ordinate Measuring Machine) for dimensional verification
purposes and quality assurance
5.1.6. Outsourcing capabilities
SPEL enjoys enduring relationship with the producers of raw materials and components, and
manufacturers of machines. Most of its raw materials are imported from Japan, Thailand, China,
Saudi Arabia and Singapore. Our team keeps a regular liaison with our suppliers to ensure our
requirements are satisfied to evaluate alternatives and negotiate prices etc.
The Company has outsourced a substantially and developed vendors. This was done after a careful
analysis of make or buy assessment.
5.1.7. Marketing and Sales Distribution
Domestic Market
SPEL is providing its products to the corporate customers which include both multinational and
national companies. Being a supplier to corporate customers, SPEL carries out its marketing
activities mainly by personal meetings and technical presentations. This helps to maintain the
existing relations and add new customers. The Company is always developing new products for the
customers.
SPELs marketing team, which comprises trained and qualified personnel, regularly carries out
market studies, selects the areas of intervention, meets prospective customers, understands their
requirements and offers alternative solutions to new and existing customers.
International Market (Export)
For international market SPEL has developed its own branded products which are displayed in the
relevant international exhibitions mainly in Europe and USA. In addition, our marketing team also
visits the prospective customers in the international markets. The Company has developed
websites to facilitate foreign buyers access.
Page 43 of 83
RISK FACTORS
Page 44 of 83
Mitigants
The Company has been constantly upgrading its technology and in the present expansion plans also the
Company will be acquiring up-to-date technologies to stay ahead of the pack.
Page 45 of 83
PART 6
6 FINANCIAL INFORMATION
6.1. AUDITORS REPORT UNDER SECTION 53(I) READ WITH CLAUSE 28 OF SECTION 2
OF PART I OF THE SECOND SCHEDULE TO THE COMPANIES ORDINANCE, 1984,
FOR THE PURPOSE OF INCLUSION IN THE ISSUE FOR SALE DOCUMENT
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Management note:
1. Break-up value per share as at September 30, 2014
including surplus on revaluation of land is PKR 14.75/ excluding surplus on revaluation of land is PKRs 10.84/-
Page 57 of 83
2010
2011
2012
2013
2014
1Q 2015
1,099
881
218
170
134
37
94
60
1,192
978
214
169
127
51
81
56
1,399
1,145
254
188
145
48
97
71
1,416
1,184
232
176
128
50
79
60
1,719
1,373
346
295
232
56
175
122
472
379
93
81
63
17
44
30
437
419
856
265
331
102
423
856
507
492
999
319
387
156
457
999
515
650
1,164
330
458
112
594
1,164
649
671
1,320
412
518
187
615
1,320
906
653
1,559
580
826
227
197
536
1,559
910
703
1,612
580
856
227
194
563
1,612
19.8%
13.3%
6.3%
0.51
1.25
10.84
0.58
1.8%
3.5%
19.9%
12.2%
5.4%
1.87
0.99
12.48
0.98
7.0%
18.0%
Notes:
1. As of June 30, 2014, Intangible assets of PKR 5.36 million represent expenditure incurred on
implementation of SAP business one suit.
2. As of June 30, 2014, Advance for purchase of shares of PKR 9.9 million represents advance paid to
SPEL Pharmatec (Private) Limited (SPEL Pharmatec) for purchase of shares.
3. As of June 30, 2014, Surplus on revaluation of PKR 226.94 million represents the revaluation of land of
the company, valued as at 30 June 2014 by firm of independent valuers, Hamid Mukhtar & Company
(Private) Limited.
Page 58 of 83
PART 7
7
Designation
Other Directorships
Punjab Skill Development Fund
SPEL Technology Support (Private)
Limited
SPEL Pharmatec (Private) Limited
EDAS Entrepreneurship Development and
Advisory Services (Private) Limited
AJ Power (Private) Limited
Almas Hyder
Chairman
Director
Raza Haider
Director
Director
Director
Director
7.4.2
Mr. Khalil Ahmad Hashmi - Chief Financial Officer & Company Secretary
Mr. Khalil Ahmad Hashmi is an Associate Chartered Accountant and qualified Corporate Secretary
from Institute of Corporate Secretaries of Pakistan and has more than nine (9) years of professional
Page 59 of 83
experience in the field of finance. Presently, he is working as CFO & Company Secretary in SPEL
Group. He has good command on all areas of a finance department including, compliance with fiscal
laws, SAP and Oracle based ERPs, etc. Based on one of his projects, ICAP awarded first position to
SPEL in the Professional Excellence Award-2012. He is registered as a Mentor with the Middle East
CFO Alliance and recently performed as a Penal Speaker in the CFO Conference held in 2014 in
Lahore. He is trained by HIDA, Japan on Corporate Management, and by LUMS on Problem Solving
and Decision Making.
7.4.3
Mr. Abu Bakar Siddiqui is a Chartered Accountant by profession. He has about six year experience in
internal audit, product costing, system design, business process reviews, companys performance
analysis, external audits, implementation of ERP systems and supporting add-ons, project planning and
financial feasibilities. He has been working in SPEL since April 2012.
7.5.2.
Member, Advanced Studies & Research Board, University of Engineering & Technology, Lahore;
Member, Advisory Council of the Ministry of Commerce;
Member, Federal Export Board;
Member, Executive Committee, Lahore Chamber of Commerce and Industry; and
Member of the Academic Council of GC University, Lahore.
7.5.3.
Scientists
Dr. S. M. Naqi has a vast experience of industrial management and presently is the Advisor of SPEL
Group of Companies.
7.5.4.
7.5.5.
Page 61 of 83
7.5.6.
Page 62 of 83
The directors shall, subject to the provisions of Section 178 of the Ordinance, fix the number of directors to
be elected and the directors shall be elected to office by the members in general meeting.
The present directors of the Company were elected in the annual general meeting of the Company held on
31 October 2012 except Mr. Muhammad Tabassum Munir who was elected in the AGM held on 10 October
2014. The next election of directors is due on or before 31 October 2015.
7.12. VOTING RIGHTS
The rights and privileges, including voting rights, attached to the Ordinary Shares of the Company are equal.
In the case of any equality of votes, whether on a show of hands or on a poll, the chairman of the meeting at
which the show of hands takes place, or at which the poll is demanded, shall have and exercise a second or
casting vote.
7.13. AUDIT COMMITTEE / CONSTITUTION OF AUDIT COMMITTEE
Auditors of the Company are appointed and their duties are regulated in accordance with Section 252 to
Section 260 of the Ordinance. Accordingly, the Audit Committee of the Board has been formed to comply
with the Code of Corporate Governance, which comprises of the following directors:
1.
2.
3.
4.
5.
Mr. Muhammad Tabassum Munir (Independent, Non-Executive Director) Chairman of the Committee
Dr. S. M. Naqi (Non-Executive Director)
Mr. Almas Hyder (Non-Executive Director)
Mr. Sheikh Naseer Hyder (Non-Executive Director)
Mr. Abid Saleem Khan (Executive Director)
Page 63 of 83
Ordinance or any statutory modification thereof for time being in force, or by the articles of association,
required to be exercised by the Company in general meeting.
7.18. INDEMNITY
Pursuant to Article 83 of the Companys articles of association, every member of the Company and of the
Board, the Chairman, Chief Executive Officer or any other officer or employee shall be indemnified by the
Company against all costs, losses which they may incur or become liable to pay by reason of any contract
entered into or act or deed done by them in discharge of their duties in good faith and any loss occasioned
by any error of judgment, damage or misfortune which may happen in execution of their duties in
connection with affairs of the Company.
Page 64 of 83
PART 8
8
MISCELLANEOUS INFORMATION
REGISTERED OFFICE
BANKERS
PORTION)
TO
ISSUE
(GENERAL
AUDITORS
To the Issue:
MohsinTayebaly& Co.,
102-C/1, St Johns Park (opposite Fortress
Stadium), Lahore Cantt, Lahore
T +92 42 36672102
COMPUTER
REGISTRAR
BALLOTER
AND
SHARES
Solicitors.
Nawa-E-Waqt H# 4, Shahrah-E-Fatimah
Jinnah, Lahore. T +92 42-36306301 /
36360824 / 36360868 / 36302959
Fax : +92 42-36303301
THK Associates (Private) Limited,
DYL Motorcycles Limited Office Building,
Plot # 346, Block # G-III, Khokar Chowk,
Main Boulevard, Johar Town, Lahore.
T +92 42 35290577
T +92 42 35290478
F +92 42 35290748
Arif Habib Limited
Arif Habib Center,
Page 65 of 83
BOOK RUNNER
INTERNAL AUDITORS
No. of shares
Amount (PKR)
Date
[]
[]
[]
[]
[]
[]
[]
[]
8.10.2.
Date
[]
[]
8.10.3.
[]
[]
Financing Agreements
S.No
Nature / Title of
Agreements
Counter
Party
Execution
Date
Brief Description
(PKR
Mn.)Facility
Amount
Standard
Chartered
Bank
Limited
3/21/2014
20.02
Page 66 of 83
Diminishing
Musharika
United Bank
Limited
6/26/2014
18.86
Diminishing
Musharika
United Bank
Limited
4/14/2014
5.89
Lease facility
Habib Bank
Limited
11/12/2014
48.50
Lease facility
Habib Bank
Limited
1/4/2013
14.98
Lease facility
Habib Bank
Limited
1/24/2013
48.4
Lease facility
Allied Bank
Limited
11/3/2010
21.90
Lease facility
Allied Bank
Limited
6/14/2012
5.98
12/24/2012
2.09
10/8/2012
5.06
9/5/2013
2.49
7/14/2012
1.74
Lease facility
10
Lease facility
11
Lease facility
12
Lease facility
First
National
Bank
Modaraba
First
National
Bank
Modaraba
First
National
Bank
Modaraba
First Habib
Modaraba
S.No
Nature / Title of
Agreements
Counter
Party
Execution
Date
Brief Description
Facility
Amount(PKR
Mn.)
13
Running Finance
Habib Bank
Limited
10/2/2014
55.00
Page 67 of 83
14
Running Finance
Standard
Chartered
Bank
Limited
15
Running Finance
MCB Bank
Limited
4/23/2014
50.00
16
FATR
Habib Bank
Limited
10/2/2014
60.00
17
FATR
Standard
Chartered
Bank
Limited
10/3/2014
120.00
18
FATR
MCB Bank
Limited
4/23/2014
100.00
19
Murabaha
Meezan
Bank
Limited
3/31/2014
185.00
20
Murabaha
United Bank
Limited
12/30/2013
100.00
21
Murabaha
Bank Islami
Pakistan
Limited
6/23/2014
80.00
22
Istisna
Meezan
Bank
Limited
3/31/2014
75.00
23
Istisna
Bank Islami
Pakistan
Limited
6/23/2014
80.00
Execution
Date
Brief Description
Facility
Amount(PKR
Mn.)
10.00
10.00
10/3/2014
60.00
Nature / Title of
Agreements
Counter
Party
24
Bank Guarantee
MCB Bank
Limited
4/23/2014
Bank Guarantee
issued in favour of
LESCO.
25
Shipping Guarantee
MCB Bank
Limited
4/23/2014
S.No
Page 68 of 83
26
ERF-1
Standard
Chartered
Bank
Limited
10/3/2014
10.00
Revalued Amount:
8.8 CAPITALIZATION
Bonus Shares of Rs. 167,725,170/- were issued during the financial year 2014 details of which are
as follows:
Sr #
1.
2.
3.
4.
5.
6.
SHAREHOLDER
Mr. S. M. Naqi
Mrs. Munawar Naqi
Mr. Almas Hyder
Mr. Zia Hyder Naqi
Mr. Raza Haider Naqi
Mr. Sheikh Naseer Hyder
Number of Shares
5,168,485
424,334
7,590,851
1,742,422
1,742,422
104,003
16,772,517
Page 69 of 83
Rupees
51,684,850
4,243,340
75,908,510
17,424,220
17,424,220
1,040,030
167,725,170
PART 9
a. Pakistani citizens resident in or outside Pakistan or persons holding two nationalities including Pakistani
nationality;
b. Foreign Nationals whether living in or outside Pakistan
c. Companies, bodies corporate or other legal entities incorporated or established in or outside Pakistan (to the
extent permitted by their constitutive documents and existing regulations, as the case may be);
d. Mutual funds, provident/pension/gratuity funds/trusts, (subject to the terms of the trust deed and existing
regulations); and
e. Branches in Pakistan of companies and bodies corporate incorporated outside Pakistan.
9.1.2
9.1.3
Copies of this Prospectus and applications forms can be obtained from members of KSE, the Bankers to the
Issue and their Branches, the Lead Managers and the Book Runner, and the registered office of the
Company. The Preliminary Prospectus and the Bidding Form can also be downloaded from the following
websites: http://www.spelgroup.com and http://www.arifhabibltd.com.
9.1.4
The applicants opting for scrip less form of shares are required to complete the relevant sections of the
application. In accordance with the provisions of the Central Depositories Act, 1997 and the CDCPL
Regulations, credit of such shares is allowed ONLY in the applicants own CDC account. In case of
discrepancy between the information provided in the application form and the information already held by
CDS, the Company reserves the right to issue shares in physical form.
9.1.5
Name(s) and address(s) must be written in full block letters, in English and should not be abbreviated.
9.1.6
All applications must bear the name and signatures corresponding with that recorded with the applicant's
banker. In case of difference of signatures with the bank and computerized national identity card (CNIC) or
national identity card for overseas Pakistanis (NICOP) or passport both the signatures should be affixed on
the application form.
9.1.7
(i) In case of individual investors, an attested photocopy of CNIC (in case of resident Pakistanis)/passport (in
case of non-resident Pakistanis) as the case may be, should be enclosed and the number of CNIC/passport
should be written against the name of the applicant. Copy of these documents can be attested by any
federal/provincial government gazette officer, councilor, oath commissioner or head master of high school
or bank manager in the country of applicant's residence.
(ii) Original CNIC/passport, along with one attested photocopy, must be produced for verification to the Banker
to the Issue and the applicant's banker (if different from the Banker to the Issue) at the time of presenting the
Page 70 of 83
application. The attested photocopy will, after verification, be retained by the bank branch along with the
application.
9.1.8
(i) Applications made by companies, corporate bodies, mutual funds, provident/pension/gratuity funds/trusts
and other legal entities must be accompanied by an attested photocopy of their memorandum and articles of
association or equivalent instrument/document. Where applications are made by virtue of power of attorney,
the same should also be submitted along with the application. Any federal/provincial government gazette
officer, councilor, bank manager, oath Commissioner and head master of high school in the country of
applicant's residence can attest copies of such documents.
(ii) Attested photocopies of the documents mentioned in paragraph 9.1.8 (i) must be produced for verification to
the Banker to the Issue and the applicant's banker (if different from the banker to the Issue) at the time of
presenting the application. The attested copies, will after verification, be retained by the bank branch along
with the application.
Page 71 of 83
9.1.9
Only one application will be accepted against each account, however, in case of joint account, one
application may be submitted in the name of each joint account holder.
9.1.10
Joint application in the name of more than two persons will not be accepted. In case of joint application each
applicant must sign the application form and submit attested copies of their CNICs/passport. The shares will
be dispatched to the person whose name appears first on the application form while in case of CDS, it will
be credited to the CDS account mentioned on the face of the form and where any amount is refundable, in
whole or in part, the same will be refunded by cheque or other means by post, or through the bank where the
application was submitted, to the person named first on the application form, without interest, profit or
return. Please note that joint application will be considered as a single application for the purpose of
allotment of shares.
9.1.11
Subscription money must be paid by cheque drawn on applicant's own bank account or pay order/bank draft
payable to one of the Bankers to the Issue in favor of account IPO of Synthetic Products Enterprises
Limited General Public Account and crossed A/C PAYEE ONLY.
9.1.12
For the applications made through pay order/bank draft, it would be permissible for a Banker to the Issue to
deduct the bank charges while making refund of subscription money to unsuccessful applicants through pay
order/bank draft individually for each application.
9.1.13
The applicant should have at least one bank account with any of the commercial banks. The
applicants not having a bank account at all (non-account holders) are not allowed to submit
application for subscription of Shares.
9.1.14
9.1.15
Applicants should ensure that the bank branch, to which the application is submitted, completes the relevant
portion of the application form.
9.1.16
Applicants should retain the bottom portion of their application forms as provisional acknowledgement of
submission of their applications. This should not be construed as an acceptance of the application or a
guarantee that the applicant will be allotted the number of Shares for which the application has been made.
9.1.17
Making of any false statements in the application or willfully embodying incorrect information
therein shall make the application fictitious and the applicant or the bank shall be liable for legal
action.
9.1.18
Bankers to the Issue are prohibited to recover any charges from the subscribers for collecting subscription
applications. Hence, the applicants are advised not to pay any extra charges to the Bankers to the Issue.
9.1.19
It would be permissible for a Banker to the Issue to refund subscription money to unsuccessful
applicants having an account in its bank by crediting such account instead of remitting the same by
cheque, pay order or bank draft. Applicants should, therefore, not fail to give their bank account
numbers.
9.1.20
Submission of Fictitious and multiple applications (more than one application by same person) is
prohibited and such Application Money shall be liable to confiscation under section 18A of the
Securities and Exchange Ordinance, 1969.
Page 72 of 83
In case of foreign investors that are not individuals, applications must be accompanied with a letter on the
applicant's letterhead stating the legal status of the applicant, place of incorporation and operations and line
of business. A copy of memorandum of association or an equivalent document should also be enclosed, if
available. Where applications are made by virtue of Power of Attorney, the same must be lodged with the
application. Copies of these documents can be attested by the bank manager in the country of applicant's
residence.
9.1.22
Applicants may also subscribe using their Special Convertible Rupee Account (SCRA) as set out under the
State Bank of Pakistan's Foreign Exchange Manual.
BASIS OF ALLOTMENT
9.1.23
The basis and conditions of transfer of shares to the General Public shall be as follows:
a) The minimum amount of application for subscription of 500 ordinary shares PKR []/- (Issue Price x 500
Shares) Application for Shares below the respective amounts mentioned in this paragraph shall not be
entertained.
b) Application for Shares must be made for 500 Shares or in multiple thereof only. Applications, which are
neither 500 Shares nor for multiple thereof, shall be rejected.
c) Allotment/Transfer of Shares to successful applicants shall be made in accordance with the allotment
criteria/instructions disclosed in the Prospectus.
d) Allotment of Shares shall be subject to scrutiny of applications in accordance with the criteria disclosed in
the Prospectus and / or the instructions by the Securities and Exchange Commission of Pakistan.
e) Applications, which do not meet the above requirements, or applications which are incomplete will be
rejected. The applicants are, therefore, required to fill in all the data fields in the Application Form.
f) The Company will dispatch shares to successful applicants through their Bankers to the Issue or credit the
respective CDS accounts of the successful applicants (as the case may be).
Bank
Allied Bank Limited
Bank of Punjab
Faysal Bank Limited
Habib Bank Limited
Habib Metropolitan Bank
Code No.
06
07
08
09
10
Bank
MCB Bank Limited
Meezan Bank Limited
Samba Bank Limited
Summit Bank Limited
*United Bank Limited
Page 73 of 83
Occupation
Business
Business Executive
Service
Housewife
Household
Code No.
06
07
08
09
10
Occupation
Professional
Student
Agriculturist
Industrialist
Others
Name of country
U.S.A
U.K
U.A.E
K.S.A
Oman
Code No.
006
007
008
009
Page 74 of 83
Name of country
Bangladesh
China
Bahrain
Other
PART 10
Page 75 of 83
PART 11
-sd----------------------Chairman
Almas Hyder
-sd--------------------Director
Sheikh Naseer Hyder
-sd--------------------Director
Abid Saleem Khan
-sd---------------------Director
Dr. Sheikh Muhammad Naqi
-sd--------------------Director
Muhammad Tabassum Munir
Witness 2
-sd__________________
-sd__________________
Faheem Masood
Page 76 of 83
PART 12
12 MEMORANDUM OF ASSOCIATION
I.
II. The Registered Office of the Company will be situated in the Province of Punjab.
III. The objects for which the Company is established are all or any of the following (and in construing the
following sub-clauses the scope of no one clause or sub-clauses shall be deemed to limit or effect the
scope of any other sub-clauses) subject to the restriction imposed or permission required under the law.
(1)
To erect, set up, establish and operate plants and machines for the manufacturing, production and
fabrication of all type of products and parts for the automotive industry, engineering industry, plastic
industry, metal industry, telecom industry, electronics industry, information technology industry,
energy and lighting industry, apparel industry, renewable energy industry, surgical industry, furniture
industry, home goods & appliances industry, construction industry, food & water industry, general
public and for any other industry.
(2)
To provide services and consultancy in the areas of design, manufacturing and testing of all types of
moulds and dies, jigs and fixtures and any other tools required for production and for all fields of
management.
(3)
(4)
To carry on the business of horticulture, agriculture, floriculture and live stocks, food processing and
food packaging and buying and selling thereof.
(5)
(6)
To carry on business of Chemicals, Synthetic Chemicals, Petro Chemical, Plastic Polythene and other
allied products and to set, own and manage factories for the manufacturing of such goods.
(7)
To carry on the business of contract assembly and full service sub assembly.
(8)
To acquire and take over as a going concern the business good-will, assets, rights, titles, interests,
liabilities, commitments, benefits of all subsisting-contracts and undertakings of M/s. Synthetic
Products Enterprises a Partnership Concern carrying on the business in Pakistan.
(9)
To carry on the business of manufacturers, buyers, sellers, exporters, importers, dealers, agents, whole
sellers, retailers, in all types of products, utilities, wastes and/or surplus commodities, which the
Company may have at its disposal at any time or which can be devised, produced, made,
compounded, or made available by the company in any form as a result of any of its
functions/processes or facilities.
Page 77 of 83
(10) To carry on business of retailers dealers, whole-sellers and manufacturers of furniture, crockery,
building material and sanitary goods and to establish Mills and factories for such purposes.
(11) To carry on the business of retailers, whole-sellers, importers and exporters of all types of raw
materials, finished or semi-finished goods whether within or outside the country.
(12) To carry on the business of iron founders, mechanical engineers, manufacturers of all types of
machinery used in plastic industry. Manufacturers of ice plant, cold storage, rice mills, and flour mills
machinery and agricultural implements of all kinds, tools makers, brass founders, smiths, painters,
metallurgists, water works engineers, gas generators, carriers and to deal in machinery, implements,
and hardware of all kinds, and to carry on any other business which may seem to the company capable
of being conveniently carried on in connection with the above, or otherwise considered directly or
indirectly conducive to enhance the value of any of the Company's property and rights.
(13) To carry on the business of construction, buying and selling lands and buildings, and to lease, hire,
manage or otherwise deal with all kinds of immovable property whether belonging to the Company or
not, to advance money to builders and others who may be willing to improve or build any lands and
buildings for the construction of dwelling houses, trade premises, public and other buildings.
(14) To carry on the trades and professions of manufacturers and merchants of drums, containers and
packing cases of all kinds, and to carry on the business of web equipments.
(15) To carry on the business of ice and cold storage company and for the purpose to set up cold storage
units and ice making plants at any place in Pakistan and to buy, sell and deal in ice, vegetables, fruits
and products which can be preserved by cold storage.
(16) To carry on the business of commission agents, contractors, brokers, mercantile agents, shipping
agents, clearing and forwarding agents, distributors, importers, exporters, advisers, consultants,
controllers, managers, engineers secretaries, selling agents, mine owners, carriers of land, water and
sea, and representatives of commerce or agricultural and manufacturing concerns.
(17) To manufacture, purchase, sell, exchange, manipulate, import, export and otherwise deal in edible oil,
pure and wholesome cooking media, fats, soaps, glycerine, stearic acid, candles, lubricating oils,
greases, pigments, printing inks, varnishes, artificial rubber, linoleum, chamois leather, textile wetting
and emulsifying agents, and detergents, turkey red Oil, oxygen and other various bye-products and
their compounds.
(18) To carry on the business of manufacturing, producing, procuring, mastering, buying, selling,
converting, and in other ways dealing in iron, steel, cock, tin plate, fero-manganese, clay, bricks and
other things as may be necessary or incidental to carry on the business of coal iron and steel
manufacturing.
IV. For the purposes of achieving the above objects, the company is authorized:-
Page 78 of 83
(1)
To secure incorporation, registration or otherwise recognition of the company in any country, state
or place; and to establish and regulate agencies except Managing Agency for the purposes of the
company's business; and to make application, join in applying, to any parliament, government,
local, municipal, or other authority or body, for any Acts of Parliament, laws, decrees, concessions,
orders, rights or privileges that may seem conducive to and extend the company's objects, or any of
them, a variation in the constitution of the business or undertaking of the company and to oppose
any proceedings or applications which may seem calculated directly or indirectly to prejudice the
company's interests.
(2)
To apply for, purchase or otherwise acquire any patents, licenses, concessions, and the like,
conferring any exclusive or non-exclusive or limited right to use, or any secret or other information
as to any invention which may seem capable of being used for any of the purposes of the Company
or the acquisition of which may seem calculated directly or indirectly to benefit the Company, and
to use, exercise, develop, or grant licenses in respect of, or otherwise turn to account the property,
rights or information so acquired.
(3)
To sell any patent rights or privileges belonging to the Company or which may be acquired by it, or
any interest in the same, and to grant licences for the use and practice of the same or any of them
and to let or allow to be used or otherwise deal with any inventions, patents or privileges in which
the Company may be interested, and to do all such acts and things as may be deemed expedient for
turning to account any inventions, patents and privileges in which the Company may be interested.
(4)
To open, close, establish branches or associate offices of the company in the interest of the
company's business whether within the country or abroad.
(5)
Generally to purchase, take on lease or in exchange hire or otherwise acquire any real or personal
property and any rights or privileges which the Company may think necessary or convenient for the
purpose of its business.
(6)
To sell, improve, manage, develop, exchange, lease, mortgage, franchise, dispose of, turn to account
or otherwise deal with all or any part of the property and rights of the Company.
(7)
To set up, erect, construct, purchase, take on lease, run, operate and administer plants, factories and
distribution centers to carry on all such functions and business as are necessary and incidental to
meet the objectives of the Company.
(8)
To import, buy, own, install or otherwise procure plants, machineries and other equipments and to
forge and machine parts in the Company's workshop or to take on rent plants, machineries and other
equipments for the purposes for which the Company is established and/or to dispose off such plants,
machineries and spare parts which have become obsolete or worn out.
(9)
To set up a power plant for power generation, accumulation, transmission and distribution in all its
branches and aspects by the use of such forms of energy and in such manner as may be deemed
feasible and sell and deliver the electricity thus generated.
(10)
To construct, maintain and alter any buildings or works, necessary or convenient for the purposes of
the Company and to rent out the land, building, machines and other assets of the Company
(11)
To construct, improve, maintain, develop, work, manage, carry out, or control any factories,
warehouses, shops, stores, and other works and conveniences which may seem calculated directly or
indirectly to advance the Company's interests.
(12)
To sell, improve, manage, develop, exchange, lease, mortgage, enfranchise, dispose of, turn to
account, or otherwise deal with, all or any parts of the property and rights of the Company.
Page 79 of 83
(13)
To import and purchase raw materials, equipments, machineries, spare parts or other articles of use
required by the Company for the purpose of carrying on the business of the Company.
(14)
To manufacture, purchase, import, export, store, process, sell and generally to deal in all materials,
articles, substances and things required for or incidental to the manufacture, preparation, adaptation,
treatment, use or working of the foregoing or the packing, storing or otherwise dispose of all or any
of the same as may be thought desirable.
(15)
To establish laboratories, evaluation centers and research and development centres to perform such
research and development as the Company may deem advisable or feasible.
(16)
To extend money on experimenting upon and testing and improving or securing any process or
processes' patent, or protecting any invention or inventions which the Company may acquire or
propose to acquire or deal with.
(17)
To train personnel and workers, both in Pakistan and abroad, to obtain technical proficiency in
various specialties connected with the objects of the Company or any of them.
(18)
To open, close and operate banking accounts of the company and to borrow or raise funds, both in
local and foreign currency, by means of loans and grants for the purposes of the Company from the
non government, government and semi-government financial institutions, banks and other
organizations and companies, and from the shareholders of the company for such purposes as may
be required from time to time and in order to carry on the business of the company smoothly and
actively in the manner the company deems fit.
(19)
To invest and deal with the money of the Company, not immediately required, in such manner as
may from time to time be determined, but not to act as an investment, finance, or banking company.
(20)
To advance money to such persons or companies and on such terms as may seem expedient and, in
particular, to customers and others having dealings with the Company, but not to act as an
investment, finance, or banking Company.
(21)
To guarantee the performance of contracts, agreements, obligations or discharge of any debt of the
Company or on behalf of any company or person in relation to the payment of any financial facility
including but not limited to loan, advance, letter of credit or other obligations through creation of all
types of mortgages, charges, pledges, hypothecation, on execution of the usual banking
documents/instruments or otherwise encumbrance on any or all of the movable and immovable
properties of the company, either present or future or both and issuance of any other securities or
sureties by any other means in favour of banks, Non-Banking Finance Companies or any financial
institutions and to borrow money for purposes of the company on such terms and conditions as may
be considered proper.
(22)
To draw, make, accept, endorse, discount, execute and issue promissory notes, bills of exchange,
bills of lading, warrants, debentures and other negotiable or transferable instruments, but not to act
as an investment or banking company.
To enter into arrangement with any Government or authorities, supreme, national, municipal, local,
railway, or otherwise, public or quasi-public bodies, or with any other persons, in any place where
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the Company may have interest that may seem conducive to the objects of the Company or any of
them and to obtain from any such Government, authorities or persons any rights, privileges and
concessions which the Company may think fit to obtain, and to carry out, exercise and comply with
any such arrangements, rights, privileges and concessions.
(25)
To adopt such means of making known the products of the Company as may seem expedient,
including, in particular, by advertisement in the press, circulars, purchase and exhibition of works of
art or interests, publication of books and periodicals, and grant of prizes, rewards and donations.
(26)
To give any servant or employee of the Company commission in the profits of the Company's
business or any branch thereof and for the purpose to enter into any agreement or scheme of
arrangement as the Company may deem fit and to establish and support or aid in the establishment
and management of associations, institutions, funds, trust and conveniences calculated to benefit
employees or ex-employees of the Company or the dependents of such persons and allowances and
to make payments towards insurance, and to subscribe for benevolent objects or for any exhibitions,
or for any public, general or useful objects.
(27)
To amalgamate with any other Company having objects altogether or in part similar to those of the
Company.
(28)
To acquire and undertake the whole or any part of the business, property, assets and liabilities of
any person or company and to act as a holding Company.
(29)
To enter into partnership or into any arrangement for sharing profits, union of interest, co-operation,
joint venture or reciprocal concession, with any person or company, local or foreign, carrying on or
engaged in any business or transaction which this Company is authorised to carry on or be engaged
in, or otherwise assist any such person or company, and to take or otherwise acquire shares and
securities of any such company, and to sell, hold, re-issue with or without guarantee, or otherwise
deal with the same, except doing business as an investment company and to have foreign
collaborations and to pay royalties / technical fees to collaborators, subject to the provisions of the
Companies Ordinance, 1984.
(30)
To take, or otherwise acquire, and hold shares in any other company, having objects altogether or in
part similar to those of this Company, or carrying on any business capable of being conducted so as
directly or indirectly to benefit this Company, but not to act as an investment company.
(31)
To remunerate any person or Company for the services rendered or to be rendered in placing or
assisting to place or guaranteeing the placing of any of the shares in the Company's capital or any
debenture, debenture stock or otherwise of the Company or in or about the formation or promotion
of the Company or the conduct of its business.
(32)
To sell or dispose of the undertaking of the Company or any part thereof for such consideration as
the Company may think fit and, in particular, for shares, debentures or securities of any company
purchasing the same or any other company having objects altogether or in part similar to those of
this Company.
(33)
(34)
To distribute among the members of the Company, in kind or otherwise, any property of the
Company and, in particular, any shares, debentures or securities of other companies belonging to
this Company, or of which this Company may have the power of disposing.
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(35)
To create any reserve fund, sinking fund, insurance fund or any other special fund, whether for
depreciation or for repairing, insuring, improving, extending or maintaining any of the property of
the Company or for any other purpose conducive to the interests of the Company.
(36)
The Company undertakes not to carry on the business of banking as defined in the Banking Control
Ordinance, 1962 or insurance business or any other unlawful act.
(37)
To do all or any of the things as are incidental or the Company may think conducive to the
attainment of the above objects or any of them.
(38)
To Issue any of the Company's shares, securities or other obligation for such consideration (whether
for cash, services rendered or property acquired or otherwise) and on such terms as may be thought
fit.
V.
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CAPITAL
VI. The authorised capital of the Company is Rs. 1,000,000,000/- (Rupees One Billion only) divided into
100,000,000 (One Hundred Million only) ordinary shares of Rs. 10/- each with the power to increase,
decrease, or alter the share capital in accordance with the provisions of Companies Ordinance, 1984.
We, the several persons, whose names and addresses are subscribed below, are desirous of being formed
into a Company in pursuance of these Memorandum of Association, and we respectively agree to take
the number of shares in the Capital of the company as set opposite our respective names-:
S. No.
Fathers/Husban Nationality/
ds Name in Full Former
Nationality
1.
S. M. Naqi
2.
3.
4.
Occupation
Residential
address in
Full
Number
of shares
taken by
each
subscriber
Pakistani
Businessman
130/M,
Gulberg III,
Lahore
250
W/o S. M. Naqi
-do-
House wife
-do-
250
Mrs. Khushnud
Begum
-do-
-do-
19/Kucha,
Ravi Road,
Lahore.
250
W/o Sh Manzoor
Ali
-do-
-do-
-do-
250
1,000
Signatures:___________________________
Name:
Full Address:
Fathers Name:
Nationality:
Occupation:
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Signature