ADVICE FOR INVESTORS
INVESTORS ARE STRONGLY ADVISED IN THEIR OWN INTEREST TO CAREFULLY READ THE CONTENTS OF THIS PROSPECTUS, ESPECIALLY THE RISK FACTORS GIVEN AT PARA 5.9 BEFORE MAKING ANY INVESTMENT DECISION. SUBMISSION OF FALSE AND FICTICIOUS APPLICATIONS IS PROHIBITED AND SUCH APPLICATIONS’ MONEY MAY BE FORFEITED UNDER SECTION 87(8) OF THE SECURITIES ACT, 2015 (THE SECURITIES ACT) HABIB METRO MODARABA PROSPECTUS (An Islamic Financial Institution) Habib Metro Modaraba MANAGED BY: HABIB METROPOLITAN MODARABA MANAGEMEN T COMPANY (PRIVATE) LIMITED This Public Issue consists of 9,000,000 Modaraba Certificates (30% of the Total Paid up Fund) of Rs. 10/- each at face value out of the Total Paid up Fund of 30,000,000 Modaraba Certificates As per regulation 3(11) of the PO Regulations read with regulation 5.2.2. of PSX’s Listing of Companies and Securities Regulations, the Draft Prospectus was placed on the websites of PSX, Habib Metro Modaraba and the Consultant to the Issue for seeking public comments for seven working days starting from July 20, 2017 to July 28, 2017. No comments were received from the general public during this period.
THE SUBSCRIPTION LIST WILL OPEN AT THE COMMENCEMENT OF BANKING HOURS ON 19/09/2017 AND WILL CLOSE ON 20/09/ 2017 AT THE CLOSE OF BANKIN G HOURS
CONSULTANT TO THE ISSUE
IECnet Consulting (Private) Limited
BANKERS TO THE PRESENT ISSUE
Al Baraka Bank (Pakistan) Limited Bank AL Habib Limited Bank AlFalah Limited * Bank Islami Pakistan Limited Dubai Islamic Bank Pakistan Limited Habib Bank Limited Meezan Bank Limited MCB Bank Limited Allied Bank Limited United Bank Limited * Habib Metropolitan Bank Limited Summit Bank Limited* *In order to facilitate investors, United Bank Limited (“UBL”), Bank Alfalah Limited (“BAFL”) and Summit Bank (SMBL) are offering electronic submission of application (e-IPO) to their account holders. UBL account holders can use UBL Net Banking to submit their application via link http://www.ubldirect.com/corporate/ebank. BAFL account holders can use BAFL Net Banking to submit their applications via link https://ib.bankalfalah.com.pk. SMBL account holders can use SMBL Net Banking to submit their applicati on via link www.ib.summitbank.com.pk. Furthermore, please note that online applications can be submitted 24 hours a day during the subscription period which will close at midnight on 20-09-2017 The Central Depository Company of Pakistan (“CDC”) has developed a Centralized e -IPO System (“CES”) through which applications for subscription of securities offered through IPOs can be made electronically. CES has been made available in this IPO which can be accessed through the web link www.cdceipo.com. Payment of subscription money can be made through 1LINK’s member banks available for CES, list of which is available on above website.
For making application though CES, investors must be registered with CES. Registration with CES is free of cost and a self-registration process by filling the CES registration form, which is available 24/7 all around the year. Investors who have valid Computerized National Identity Card (CNIC) , bank account with any of the commercial bank, email address, mobile phone number and CDS Account (Investor Account or sub Account) may register themselves with CES.
Investors who do not have CDS account may visit www.cdcpakistan.com for information and details. For further guidance and queries regarding CES and opening of CDS account, investors may contact CDC at phone Number: 0800 – 23275 (CDCPL) and e-mail: [email protected] For further details on CES, please refer para 2.8 of this prospectus.
PUBLIC ISSUE UNDERWRITTEN BY Arif Habib Limited Ismail Iqbal Securities (Private) Limited SHARIA ADVISOR Mufti Abdul Sattar Laghari DATE OF PUBLICATION OF THIS PROSPECTUS: 09/09/2017
For Investor education, please visit www.jamapunji.pk . Jama Punji is an investor education initiative of the Securities & Exchange Commission of Pakistan.
Prospectus and Subscription forms can be downloaded from the following links www.habibmetromodaraba.com and www.consulting.iecnet.com.pk For further queries, you may contact: Habib Metro Modaraba IECnet Consulting (Private) Limited Mr. Tehsin Abbas Mr. Adnan Thanwey Syed Kashif P - +92-21-111 -346-346 P - +92-21-111 -346-346 P - +92(0)21-34150812 E – [email protected] E – [email protected] E – [email protected] Habib Metro Modaraba PROSPECTUS Habib Metro Modaraba
UNDERTAKING BY THE CHIEF EXECUTIVE AND CHIEF FINANCIAL OFFICER
JULY 11, 2017
WE, MUHAMMAD SHOAIB IBRAHIM, THE CHIEF EXECUTIVE OFFICER AND TEHSIN ABBAS, THE CHIEF FINANCIAL OFFICER OF HABIB METRO MODARABA, CERTIFY THAT:
(1) THE PROSPECTUS CONTAINS ALL INFORMATION WITH REGARD TO THE ISSUERS AND THE ISSUE, WHICH IS MATERIAL IN THE CONTEXT OF THE ISSUE AND NOTHING HAS BEEN CONCEALED IN THIS RESPECT;
(2) THE INFORMATION CONTAINED IN THE PROSPECTUS IS TRUE AND CORRECT TO THE BEST OF OUR KNOWLEDGE AND BELIEF;
(3) THE OPINIONS AND INTENTIONS EXPRESSED HEREIN ARE HONESTLY HELD;
(4) THERE ARE NO OTHER FACTS, THE OMISSION OF WHICH MAKES THE PROSPECTUS AS A WHOLE OR ANY PART THEREOF MISLEADING;
(5) ALL REQUIREMENTS OF THE SECURITIES ACT, 2015; THE PO REGULATIONS AND PSX REGULATIONS FOR LISTING OF COMPANIES AND SECURITIES RELATING TO APPROVAL AND DISCLOSURES HAVE BEEN FULFILLED; AND
(6) NO CHARGES, FEE, EXPENSES, PAYMENTS ETC HAVE BEEN COMMITTED TO BE PAID TO ANY PERSON IN RELATION TO THIS PUBLIC OFFERING EXCEPT FOR THOSE AS DISCLOSED IN PART 3 OF THE PROSPECTUS.
For and on behalf of Issuers,
Habib Metro Modaraba –Managed By Habib Metropolitan Modaraba Management Company (Private) Limited
Sd/- Sd/-
______Muhammad Shoaib Ibrahim Tehsin Abbas Chief Executive Officer Chief Financial Officer Habib Metropolitan Modaraba Management Habib Metropolitan Modaraba Management Company (Private) Limited Company (Private) Limited
1 Habib Metro Modaraba PROSPECTUS Habib Metro Modaraba
SHARIA ADVISORS CERTIFICATE
2 Habib Metro Modaraba PROSPECTUS Habib Metro Modaraba
GLOSSARY OF TECHNICAL TERMS
Board The Board of Directors of Modaraba Company
CDA Central Depositories Act, 1997
CDC Central Depository Company of Pakistan Limited
CES Centralized e-IPO System
CDS Central Depository System
CNIC Computerized National Identity Card
Commission/ SECP Securities and Exchange Commission of Pakistan
Companies Act Companies Act, 2017
CVT Capital Value Tax
CRO Company Registration Office e-IPO Electronic IPO
EPS Earnings per share
FED Federal Excise duty
FHM First Habib Modaraba
FPI Foreign Portfolio Investment
HBZ Habib Bank AG Zurich
HMBL or Habib Metro Habib Metropolitan Bank Limited
ICAP The Institute of Chartered Accountants of Pakistan
ICMAP The Institute of Cost and Management Accountants of Pakistan
IPO Initial Public Offering
ITO Income Tax Ordinance, 2001
NBFI Non Banking Financial Institution
NICOP National Identity card for Overseas Pakistani
NOC No objection certificate
3 Habib Metro Modaraba PROSPECTUS Habib Metro Modaraba
PKR or Rs. Pakistan Rupees
PSX / Exchange / Securities Exchange Pakistan Stock Exchange Limited
SAFA South Asian Federation of Accountants
SAARC South Asian Association of Regional Co-operation
Securities Act Securities Act, 2015
SST Sindh Sales Tax
SCRA Special Convertible Rupee Account
TREC Trading Right Entitlement Certificate
UIN Unique Identification Number
WHT Withholding Tax
4 Habib Metro Modaraba PROSPECTUS Habib Metro Modaraba
DEFINITIONS
Application Money The amount of money paid along with application for Subscription of certificates which is equivalent to the product of the Issue Price per certificate and the number of certificates applied for.
Company Means the Modaraba Management Company
Certificates or Modaraba Certificate Certificates of Habib Metro Modaraba having face value Rs. 10/- each unless otherwise specified in the context thereof. e-IPO e-IPO is submission of application for subscription of securities electronically through internet, Automated Teller Machines (ATM) and mobile phones. In order to facilitate the public during IPOs, SECP has introduced the concept of e-IPO. The following two systems are available for e-IPOs:
(i) Centralized e-IPO System (CES):
The Central Depository Company of Pakistan (“CDC”) has developed a Centralized e-IPO System (“CES”) through which applications for subscription of securities offered to the general public can be made electronically. CES has been made available in this IPO and can be accessed through the web link www.cdceipo.com. Payment of subscription money can be made through 1LINK’s member banks available for CES, list of which is available on above website.
For making application though CES, investors must be registered with CES. Registration with CES is free of cost and a self-registration process by filling the CES registration form, which is available 24/7 all around the year. Investors who have valid Computerized National Identity Card (CNIC), bank account with any of the commercial bank, email address, mobile phone number and CDS Account (Investor account or sub account) may registered themselves with CES.
Investors who do not have CDS account may visit www.cdcpakistan.com for information and details.
For further guidance and queries regarding CES and opening of CDS account, investors may contact CDC at phone number: 0800 – 23275 (CDCPL) and e-mail:[email protected].
For More details on CES, Please refer to para 2.8
5 Habib Metro Modaraba PROSPECTUS Habib Metro Modaraba
(ii) e-IPO facilities by Bankers to the Issue:
Currently, United Bank Limited (UBL), Summit Bank LImited (SMBL) and Bank Alfalah Limited (BAFL) are providing e-IPO facilities to their respective account holders.
UBL account holders can use UBL Net Banking to submit their application via link http://www.ubldirect.com/corporate/ebank, and
SMBL account holders can use SMBL Net Banking to submit their application via link https://ib.summitbank.com.pk and
BAFL account holders can use BAFL Net Banking to submit their application via link: https://ib.bankalfalah.com.pk
Investors who are registered with CES or account holders of UBL, SMBL OR BAFL can submit their applications through above mentioned links 24 hours a day during the subscription period which will close at midnight on 20/09/2017.
Issuer Habib Metro Modaraba
Issue Initial Public Offering of 9,000,000 Modaraba Certificates of Habib Metro Modaraba (30% of the Total Paid Up Fund of the Modaraba) at an issue price.
Issue Price The price at which Certificates are being offered. The issue price is Rs. 10/-.Certificate
Listing Committee Listing Committee, means PSX’s listing committee which has approved prospectus and listing application of the Modaraba.
Listing Regulations Chapter 5 of the Rule Book of the Pakistan Stock Exchange Limited, titled ‘Listing of Companies and Securities Regulation’.
Modaraba or HMM Habib Metro Modaraba or the Rabb-ul-Maal
Modaraba Management Company Habib Metropolitan Modaraba Management Company Or the Modaraba Company or HMMCPL (Private) Limited or the Mudarib
Modaraba Ordinance Modaraba Companies and Modaraba (Floatation and Control) Ordinance, 1980
Modaraba Rules Modaraba Companies and Modaraba Rules, 1981
6 Habib Metro Modaraba PROSPECTUS Habib Metro Modaraba
Prospectus Prospectus means the prospectus of the Modaraba for offer of its Certificates to the public.
Registrar or Registrar Modaraba Registrar of the Modaraba Companies and Modaraba, Islamabad
Regulations / PO Regulations The Public Offering Regulations, 2017
Religious Board Means a board constituted by the Federal Government as per section 9 of the Modaraba Ordinance. The religious board certifies in writing that the modaraba’s business is not a business opposed to the Injunctions of Islam.
Sponsor Means Habib Metropolitan Bank Limited and the modaraba management company who have contributed to 70% of the paid up fund of this modaraba and as detailed in Para 2.6 of this prospectus.
Sharia Compliant Business A business which meets all of the requirements of Sharia Law and the principles articulated for “Islamic Finance” and certified by the Religious Board.
Interpretation:
ANY CAPITALIZED TERM CONTAINED IN THIS PROSPECTUS, WHICH IS IDENTICAL TO A CAPITALIZED TERM DEFINED HEREIN, SHALL, UNLESS THE CONTEXT EXPRESSLY INDICATES OR REQUIRES OTHERWISE AND TO THE EXTENT AS MAY BE APPLICABLE GIVEN THE CONTEXT, HAVE THE SAME MEANING AS THE CAPITALIZED / DEFINED TERM PROVIDED HEREIN.
7 Habib Metro Modaraba PROSPECTUS Habib Metro Modaraba
TABLE OF CONTENTS
1. APPROVALS AND LISTING ON THE SECURITIES EXCHANGE 09
2. VALUATION, MODARABA FUND AND RELATED MATTERS 15
3. UNDERWRITING ARRANGEMENT, COMMISSIONS, BROKERAGE AND OTHER EXPENSES 27
4. THE MODARABA MANAGEMENT COMPANY 29
5. MODARABA OBJECTIVES, BUSINESS AND PROSPECTS 31
6. FINANCIAL INFORMATION 37
7. BOARD OF DIRECTORS AND ORGANIZATIONAL SET UP 44
8. MISCELLANEOUS 52
9. APPLICATION AND ALLOTMENT INSTRUCTIONS 55
10. SIGNATORIES TO THE PROSPECTUS 60
11. MEMORANDUM OF ASSOCIATION OF HABIB METROPOLITAN MODARABA MANAGEMENT COMPANY (PRIVATE) LIMITED 61
12. MODARABA CERTIFICATES APPLICATION FORM 69
8 Habib Metro Modaraba PROSPECTUS Habib Metro Modaraba
1. APPROVALS AND LISTING ON THE SECURITIES EXCHANGE
1.1 APPROVAL OF THE SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN
Approval of the Securities and Exchange Commission of Pakistan (the “Commission”) or (the “SECP”) under Section 87(2) of the Securities Act, 2015 (the Securities Act) read with Section 88(1) thereof has been obtained by Habib Metro Modaraba (the “Modaraba”) for issue, circulation and publication of this offering document (hereinafter referred to as the “prospectus”), vide their letter No. SMD/CIW/SA-88/06/2017 dated 30/08/2017
DISCLAIMER:
IT MUST BE DISTINCTLY UNDERSTOOD THAT IN GIVING THIS APPROVAL, SECP DOES NOT TAKE ANY RESPONSIBILITY FOR THE FINANCIAL SOUNDNESS OF THE MODARABA AND ANY OF ITS SCHEMES STATED HEREIN OR FOR THE CORRECTNESS OF ANY OF THE STATEMENTS MADE OR OPINIONS EXPRESSED WITH REGARD TO THEM BY THE ISSUER AND / OR THE MODARABA COMPANY IN THIS PROSPECTUS.
SECP HAS NOT EVALUATED QUALITY OF THE ISSUE AND ITS APPROVAL FOR ISSUE, CIRCULATION AND PUBLICATON OF THIS PROSPECTUS SHOULD NOT BE CONSTRUED AS ANY COMMITMENT OF THE SAME. THE PUBLIC / INVESTORS SHOULD CONDUCT THEIR OWN INDEPENDENT DUE DILIGENCE AND ANALYSIS REGARDING THE QUALITY OF THE ISSUE BEFORE SUBSCRIBING.
1.2 AUTHORIZATION FOR THE ISSUE FROM REGISTRAR MODARABA
Authorization has been granted under the Modaraba Ordinance for the floatation of the Modaraba vide Registrar Modaraba’s Authorization Certificate bearing No. 73/2017 dated March 10, 2017.
The Religious Board constituted under Section 9 of the Modaraba Ordinance has certified that the business proposed to be undertaken by the Modaraba is not opposed to the injunctions of Islam.
1.3 APPROVAL OF PROSPECTUS BY PSX
The Prospectus of the Modaraba has been approved by PSX vide their letter No. PSX/GEN-5268 dated August 07, 2017 in accordance with the requirements of its Listing Regulations.
DISLAIMER
PSX HAS NOT EVALUATED THE QUALITY OF THE ISSUE AND ITS APPROVAL SHOULD NOT BE CONSTRUED AS ANY COMMITMENT OF THE SAME. THE PUBLIC / INVESTORS SHOULD CONDUCT THEIR OWN INDEPENDENT INVESTIGATION AND ANALYSIS REGARDING THE QUALITY OF THE ISSUE BEFORE SUBSCRIBING.
THE PUBLICATION OF THIS DOCUMENT DOES NOT REPRESENT SOLICITATION BY PSX.
THE CONTENTS OF THIS DOCUMENT DOES NOT CONSTITUTE AN INVITATION TO INVEST IN MODARABA CERTIFICATES OR SUBSCRIBE FOR ANY SECURITIES OR OTHER FINANCIAL INSTRUMENT BY PSX, NOR SHOULD IT OR ANY PART OF IT FORM THE BASIS OF, OR BE RELIED UPON IN ANY CONNECTION WITH ANY CONTRACT OR COMMITMENT WHATSOEVER OF PSX.
9 Habib Metro Modaraba PROSPECTUS Habib Metro Modaraba
IT IS CLARIFIED THAT INFORMATION IN THIS PROSPECTUS SHOULD NOT BE CONSTRUED AS ADVICE ON ANY PARTICULAR MATTER BY PSX AND MUST NOT BE TREATED AS A SUBSTITUTE FOR SPECIFIC ADVICE.
PSX DISCLAIMS ANY LIABILITY WHATSOEVER FOR ANY LOSS ARISING FROM OR IN RELIANCE UPON THIS DOCUMENT TO ANYONE, ARISING FROM ANY REASON, INCLUDING, BUT NOT LIMITED TO, INACCURACIES, INCOMPLETENESS AND / OR MISTAKES, FOR DECISIONS AND /OR ACTIONS TAKEN, BASED ON THIS DOCUMENT.
PSX NEITHER TAKES RESPONSIBILITY FOR THE CORRECTNESS OF CONTENTS OF THIS DOCUMENT NOR THE ABILITY OF THE ISSUER TO FULFILL ITS OBLIGATIONS THEREUNDER.
ADVICE FROM A SUITABLY QUALIFIED PROFESSIONAL SHOULD ALWAYS BE SOUGHT BY INVESTORS IN RELATION TO ANY PARTICULAR INVESTMENT.
1.4 FILING OF THE PROSPECTUS WIH THE REGISTRAR MODARABA
The Modaraba Company, as required under rule 20(2) of the Modaraba Rules, has filed with the Registrar Modaraba a copy of this Prospectus signed by all the directors of the Modaraba Company.
1.5 LISTING AT PSX
Application has been made to PSX for permission to deal in and for quotation of the Certificates of the Modaraba.
If for any reason the application for formal listing is not accepted by PSX or approval for formal listing is not granted by PSX before the expiration of twenty-one days from the date of closing of the subscription period / list or such longer period not exceeding forty-two days as may, within the said twenty-one days, be notified to the applicants for permission by the securities exchange, the Issuer undertakes that a notice to that effect will immediately be published in the press and will refund Application Money to the applicants without surcharge as required under the provisions of Section 69 of the Companies Act.
If any such money is not repaid within eight (08) days after the issuer becomes liable to repay it, the Directors of the Company shall be jointly and severally liable to repay that money from the expiration of the eight day together with surcharge at the rate of two per cent (2.0%) for every month or part thereof from the expiration of the eight day and, in addition, shall be liable to a penalty of level 3 on the standard scale in accordance with the provisions of sub-section (2) of Section 69 of the Companies Act.
As required under sub-section (3) of Section 69 of the Companies Act, the Application Money shall be deposited and kept in a separate bank account in a scheduled bank so long as the issuer may become liable to repay it under sub-section (2) of Section 69 of the Companies Act; and, if default is made in complying with the said sub-section (3), the issuer and every officer of the issuer who authorizes or permits the default shall be liable to a penalty of level 2 on the standard scale as prescribed in the Companies Act.
However, the issuer is determined to refund the subscription money on time without any delay. Surcharge paid in case of delayed payment is considered Riba according to Sharia Injunctions.
10 Habib Metro Modaraba PROSPECTUS Habib Metro Modaraba
1.6 CONDITIONS IMPOSED BY REGISTRAR MODARABA ON MODARABA MANAGEMENT COMPANY
While granting registration to the Modaraba Company, the Registrar Modaraba has imposed the following conditions, inter-alia:
(i) Habib Metropolitan Modaraba Management Company (Private) Limited (“The Company”) shall make such investments as may be required in terms of the prospectus for floatation of a Modaraba.
(ii) Subscription in compliance to Section 17(3) of Modaraba Ordinance will be in the nature of permanent investment of the Company in the Modaraba free from encumbrances for all time, which will not be disinvested during the life of the Modaraba.
(iii) The Company shall undertake such business as is approved by the Registrar in terms of the Prospectus.
(iv) The promoters, sponsors or persons holding controlling interest shall not transfer any shares held by them without the prior permission in writing of the Registrar.
(v) The Company shall furnish its annual audited accounts along with the Directors Report to the Registrar immediately on issue of the same to the shareholders.
(vi) An amount of not less than Rs. 2.5 million shall be set aside apart free from any encumbrance in respect of each modaraba to be floated and managed by the Company and that the particulars thereof shall be furnished to the Registrar along with the application for floatation of each modaraba.
(vii) No change shall be made in the Company’s major shareholders as well as Chief Executive / Directors without the prior approval of the Registrar.
(viii) The promoters / major shareholders of the Company shall deposit their shares in a blocked account at the Central Depository Company of Pakistan Limited (CDC). Any subsequent allotment / subscription, either in the form of right or bonus shares or in any other manner whatsoever, to the existing Modaraba Company’s promoters / major shareholders shall also be deposited with the CDC.
(ix) The promoters / major shareholders of the Company shall not raise any financing or create encumbrance against the shares mentioned in preceding condition.
(x) The Company shall not undertake any real estate business activity without the prior written approval of the Registrar and Securities and Exchange Commission of Pakistan.
(xi) The Chief Executive Officer or one of the directors of the Company shall have sound knowledge or working experience in the Islamic banking and finance.
(xii) The company shall float a Modaraba within one year from the date of its registration.
(xiii) In the case of removal of its Chief Executive before the expiration of his / her term or where the chief executive decides to tender his resignation, the Company shall inform the Registrar at least one month before the change upon receipt of advance notice for resignation from the chief executive. The Company shall appoint a new chief executive within the time prescribed under the law and seek approval of the Registrar within thirty days from the date of the office
11 Habib Metro Modaraba PROSPECTUS Habib Metro Modaraba
of chief executive has fallen vacant. In the ordinary course of business, the Company shall not relieve the outgoing Chief Executive unless a new incumbent is appointed to takeover charge from him / her. However, in the case of removal of the chief executive before the expiration of his / her term, the Company shall also furnish reasons for such removal / termination to the Registrar while conveying the information of change in the management.
1.7 CONDITIONS IMPOSED BY REGISTRAR MODARABA ON THE MODARABA:
While granting approval for the floatation of the Modaraba vide their Modaraba authorization certificate dated March 10, 2017, the Registrar Modaraba has prescribed the following conditions, inter-alia:
1. Habib Metro Modaraba ("the Modaraba") shall be floated within twelve months from the date of this authorization.
2. The Modaraba shall not undertake any business other than those specified in the prospectus.
3. Habib Metropolitan Modaraba Management Company (Private) Limited ("the Modaraba Company") shall not disinvest or create encumbrance in favor of any person on any part of the investment in the Modaraba.
4. The Modaraba Certificates shall be listed for trading on the Securities Exchange.
5. If the application for listing of the Modaraba is refused by the Securities Exchange, the Modaraba Company shall forthwith repay the money received by it from the applicants in a manner as prescribed in the Modaraba Companies and Modaraba Rules, 1981.
6. Dates of execution of material contracts shall be incorporated in the Prospectus and verified photocopies thereof shall be submitted to the Registrar before issue / publication of the Prospectus.
7. Dates of opening and closing of subscription lists as approved by the Securities Exchange shall be incorporated in the Prospectus. If these dates go beyond three months of the date of this certificate, the prospectus shall be required to be cleared afresh by the Registrar before publication.
8. A duly signed final copy of the Prospectus containing original certificate of the Auditors' shall be filed with the Registrar before issue / publication of the Prospectus.
9. The Prospectus shall be published in the press not less than seven days and not more than thirty days before the date on which subscription list will open.
10. Five published copies of the Prospectus along with copies of all newspapers in which Prospectus has been published shall be filed with Registrar Modaraba within seven days of its publication.
11. The contents of the Prospectus shall not be altered without prior written approval of the Registrar.
12 Habib Metro Modaraba PROSPECTUS Habib Metro Modaraba
12. The Modaraba Company shall take a decision within ten days of the closure of subscription list as to which applications have been accepted, and shall refund, within ten days of the decision, the application money to the applicants whose applications have not been accepted. *
13. A report about the public offer and subscription, allotment basis, fulfillment of underwriting obligations and related matters shall be furnished to the Registrar within two months of the date of publication of the Prospectus.
14. The Modaraba Certificates to be subscribed by the Modaraba Company and / or sponsors, of the Modaraba Company shall not be transferred except with the prior written authorization of the Registrar.
15. The Modaraba shall not undertake any real estate business activity without the prior written approval of the Registrar.
16. The Modaraba shall not raise finances of any kind from the public, except with the prior approval of the Registrar.
17. The Modaraba Company shall comply with the conditions, if any, imposed by the Securities and Exchange Commission of Pakistan at the time of approval of prospectus under the Securities Act.
18. The Modaraba Company shall file all the periodic returns / statements as required and prescribed under the Modaraba Companies and Modaraba (Floatation and Control) Ordinance, 1980 and the Rules and Regulations framed thereunder.
19. The Modaraba Company shall not engage in any business, which is of the same nature and competes with the business of the Modaraba.
20. The objects outlined in the prospectus shall be achieved and the business operation conducted on the basis of business arrangements and agreements as already approved by Religious Board. In case any new arrangement is to be entered into, approval of the Religious Board shall be obtained.
21. Future business plans, scheme, prospects, expected rate of return and mode of distribution of profit etc. shall be filed with Registrar within seven days, after a decision is made by the Board of Directors, for further issue of Modaraba Certificates.
22. The business of the Modaraba shall be conducted in line with the Provisions of the Modaraba Companies and Modaraba (Floatation and Control) Ordinance, 1980 and the Rules and Regulations framed thereunder, the Prospectus of the Modaraba and the Sharia Audit and Sharia Compliance Mechanism for Modarabas.
23. The Modaraba shall appoint its auditor, with prior approval of the Registrar, from the Panel of auditors circulated by the Registrar.
* in this respect however, the regulation 6(10) of the PO Regulations will be complied with and will prevail which states that the certificates shall be allotted and issued against the accepted and successful applications within 07 days of the close of public subscription period, and the subscription money of the unsuccessful applicants shall be unblocked / refunded.
13 Habib Metro Modaraba PROSPECTUS Habib Metro Modaraba
24. Any violation of the condition of Authorization Certificate or Prospectus of the Modaraba shall be cognizable under the Modaraba Companies and Modaraba (Floatation and Control) Ordinance, 1980.
25. The promoters/major certificate holders of the Modaraba shall place their modaraba certificates in a blocked account at the Central Depository Company of Pakistan Limited (CDC). Any subsequent allotment / subscription, either in the form of right or bonus modaraba certificates or in any other manner whatsoever, to the existing promoters / major certificates holders of the Modaraba shall also be deposited with the CDC.
26. Any other condition imposed by the Registrar Modaraba from time to time.
1.8 CERTIFICATE BY CHIEF EXECUTIVE AND CHIEF FINANCIAL OFFICER OF THE ISSUER
July 11, 2017
The Chief Executive Pakistan Stock Exchange Limited Stock Exchange Building Stock Exchange Road Karachi
We being the Chief Executive Officer and Chief Financial Officer of the Issuer accept absolute responsibility for the disclosures made in this Prospectus. We hereby certify that the Prospectus contains all necessary information with regard to the Issuer and the Issue and constitutes full, true and plain disclosures of all material facts relating to the Modaraba certificates being offered through this Prospectus and that nothing has been concealed.
The information contained in this Prospectus is true and correct to the best of our knowledge and the opinions and intentions expressed herein are honestly held.
There are no other facts, the omission of which makes this Prospectus as a whole or any part thereof misleading.
For and behalf of Habib Metro Modaraba Managed by Habib Metropolitan Modaraba Management Company (Private) Limited
Sd/- Sd/-
______Muhammad Shoaib Ibrahim Tehsin Abbas Chief Executive Officer Chief financial officer
14 Habib Metro Modaraba PROSPECTUS Habib Metro Modaraba
2. VALUATION, MODARABA FUND AND RELATED MATTERS
2.1 VALUATION SECTION
The Modaraba certificates of Habib Metro Modaraba are being issued at par value of Rs. 10/- per certificate without any premium. The public issue at par value is based on the following factors:
(a) Out of the total paid up fund of the modaraba of Rs. 300,000,000/-, the management company and the sponsors, Habib Metropolitan Bank Limited have also subscribed in cash at par value of Rs. 10/- each as detailed in para 2.6 of this prospectus.
(b) The Registrar Modaraba have also approved the prospectus for present issue to the general public at par value of Rs. 10/- each.
(c) The modaraba has not yet commenced its operations and the breakup value of its certificates at present is Rs. 10/- per certificate.
2.2 CONSULTANT TO THE ISSUE
IECnet Consulting (Private) Limited has been appointed by the issuer as Consultant to this issue. The Consultants to the issue have applied to SECP under Public Offering (Regulated Securities Activities Licensing) Regulations, 2017 (POL Regulations) promulgated on May 2, 2017, for the grant of license to carry on its functions as consultant to the issue. However, as per second proviso to regulation 3 of the POL Regulations, a consultant can provide services as a Consultant to the Issue during six months period from the date of notification of the POL Regulations.
2.3 INTEREST OF CONSULTANT TO THE ISSUE OTHER THAN THEIR ROLE AS CONSULTANT
The Consultant to the Issue is deemed to be interested to the extent of fees payable to it by the issuer for the services as consultant. The Consultant to the Issue has no other interest in any property or profits of the Modaraba.
15 Habib Metro Modaraba PROSPECTUS Habib Metro Modaraba
2.4 STATEMENT BY THE ISSUER
July 11, 2017
The Chief Executive Pakistan Stock Exchange Limited Stock Exchange Building Stock Exchange Road Karachi
On behalf of Habib Metro Modaraba [the “Modaraba”], we hereby confirm that all material information as required under the Modaraba Companies and Modaraba (Floatation and Control) Ordinance, 1980, the Securities Act, 2015, the Public Offering Regulations, 2017 and the Listing of Companies and Securities Regulations of the Pakistan Stock Exchange Limited has been disclosed in the Prospectus and that whatever is stated in Prospectus and the supporting documents is true and correct to the best of our knowledge and belief and that nothing has been concealed.
For and behalf of Habib Metro Modaraba
Managed by Habib Metropolitan Modaraba Management Company (Private) Limited
Sd/- Sd/-
______Muhammad Shoaib Ibrahim Tehsin Abbas Chief Executive Officer Chief financial officer
16 Habib Metro Modaraba PROSPECTUS Habib Metro Modaraba
2.5 STATEMENT BY THE CONSULTANTS TO THE ISSUE
July 11, 2017
The Chief Executive Pakistan Stock Exchange Limited Stock Exchange Building Stock Exchange Road Karachi
Dear Sir,
Being mandated as the Consultant to this Initial Public Offering of Habib Metro Modaraba, we hereby confirm that all material information as required under the Modaraba Companies and Modaraba (Floatation and Control) Ordinance, 1980, the Securities Act, 2015, the Listing of Companies and Securities Regulations of the Pakistan Stock Exchange Limited and the Public Offering Regulations, 2017 has been disclosed in this Prospectus and that whatever is stated in Prospectus and in the supporting documents is true and correct to the best of our knowledge and belief and that nothing has been concealed.
For and behalf of IECnet Consulting (Private) Limited,
Sd/-
______Muhammad Saleem Chief Executive
17 Habib Metro Modaraba PROSPECTUS Habib Metro Modaraba
2.6 MODARABA FUND
AUTHORIZED MODARABA FUND Rupees
30,000,000 Modaraba Certificates of Rs. 10/- each 300,000,000
SUBSCRIBED AND PAID UP FUND
Modaraba Certificates of Rs. 10/- each fully paid in cash by:
Modaraba Management Company
3,000,000 Habib Metropolitan Modaraba Management 30,000,000 (10%) Company (Private) Limited
Other Sponsors
18,000,000 Habib Metropolitan Bank Limited 180,000,000 (60%)
21,000,000 Sub-Total 210,000,000
PRESENT ISSUE
Now offered for subscription at par in cash, by full payment on application as follows:
9,000,000 General Public 90,000,000 (30%)
9,000,000 Sub-Total 90,000,000
30,000,000 GRAND TOTAL 300,000,000 (100%)
Notes:
(i) As per section 17(3) of the Modaraba Companies and Modaraba (Floatation and Control) Ordinance, 1980, the Modaraba management company will hold not less than 10% of the total amount of Modaraba Certificates offered for subscription.
(ii) As per rule 3 (iv) of the Companies (Issue of Capital) Rules, 1996, and regulation 5(1) of the PO Regulations, the sponsors shall retain their entire shareholding in the modaraba for a period of not less than 12 months from the last date of public subscription or from the date of commencement of the business of the modaraba, which-ever is later.
(iii) Further, as per rule 3 (v) of the Companies (Issue of Capital) Rules, 1996, and regulation 5(2) of the PO Regulations, the sponsors shall retain not less than twenty-five percent (25%) of the capital of the Modaraba for not less than three financial years from the last date of public subscription or from the date of commencement of the business of the modaraba, which-ever is later.
18 Habib Metro Modaraba PROSPECTUS Habib Metro Modaraba
(iv) As per regulation 5(3) of the PO Regulations, the certificates of the sponsors mentioned at (ii) and (iii) above shall be kept unencumbered in a block account with central depository.
(v) Subject to compliance with (ii) and (iii) above, and with the approval of the securities exchange, the sponsors of the issuer may sell their certificate holding through block-sale to any other person who shall be deemed sponsor for the purpose of the Companies (Issue of Capital) Rules, 1996 and the PO Regulations.
(vi) The Commission vide its letter dated May 9, 2017 and the Pakistan Stock Exchange vide their letter dated April 20, 2017 have allowed relaxation from the requirement of regulation 5.4.4 of the Listing of Companies and Securities Regulations of the PSX regarding the allocation of capital of thirty percent (30%) to the public instead of requirement of seventy percent (70%) of the total size of the Modaraba.
2.7 OPENING AND CLOSING OF SUBSCRIPTION LIST
The subscription list will open at the commencement of banking hours at 9:00 a.m. of 19/09/2017 and will close on 20/09/2017, at the close of banking hours at 05:00 pm.
Please note that online applications can be submitted 24 hours during the subscription period which will close at 12:00 midnight on 20/09/2017. The procedure for making online applications is given herein below.
2.8 PUBLIC SUBSCRIPTION THROUGH e-IPO
e-IPO is submission of application for subscription of securities electronically through internet, Automated Teller Machines (ATM) and mobile phones. In order to facilitate the public during IPOs, SECP has introduced the concept of e-IPO. The following two systems are available for e-IPOs:
(i) Centralized e-IPO System (CES):
The Central Depository Company of Pakistan Limited (CDC) has developed a Centralized e- IPO System (CES) through which applications for subscription of securities offered to the general public can be made electronically. CES has been made available in this IPO and can be accessed through the web link (www.cdceipo.com). Payment of subscription money can be made through 1LINK’s member banks available for CES, list of which is available on above website.
For making application though CES, investors must be registered with CES. Registration with CES is free of cost and a self-registration process by filling the CES registration form, which is available 24/7 all around the year. Investors who have valid Computerized National Identity Card (CNIC), bank account with any of the commercial bank, email address, mobile phone number and CDS Account (Investor Account or sub Account) may registered themselves with CES.
Investors who do not have CDS account may visit www.cdcpakistan.com for information and details.
For further guidance and queries regarding CES and opening of CDS account, investors may contact CDC at phone Number: 0800 – 23275 (CDCPL) and e-mail: [email protected].
For further detail on CES, please refer to para 2.8.
19 Habib Metro Modaraba PROSPECTUS Habib Metro Modaraba
(ii) e-IPO facilities by Bankers to the Issue:
Currently, United Bank Limited (UBL), Bank AlFalah Limited (BAFL) and Summit Bank Limited (SMBL) are providing e-IPO facilities to their respective accountholders.
UBL account holders can use UBL Net Banking to submit their application via link http://www.ubldirect.com/corporate/ebank.
BAFL account holders can use BAFL Net Banking to submit their application via link: https://ib.bankalfalah.com.pk and
SMBL account holders can use SMBL Net Banking to submit their application via link https://ib.summitbank.com.pk.
Investors who are registered with CES or account holders of UBL, BAFL or SMBL can submit their applications through the above mentioned links 24 hours a day during the subscription period which will close at midnight on 20/09/2017.
2.9 BENEFITS OF e-IPO
e-IPO has the following benefits:
(i) It enables the investors to make application for subscription of shares through the internet without going to the bank, and waiting in long queues.
(ii) It is efficient and simultaneously facilitative for both the Issuer and the investors.
(iii) It is available for use 24 hours during the subscription period.
(iv) If you are registered with CES or accountholder of a bank providing e-IPO facility, you may get SMS for new IPOs.
(v) By applying through CES you can also track your application status.
2.10 ELIGIBILITY OF INVESTORS FOR INVESTMENT IN THIS ISSUE
Eligible investors include:
(a) Pakistani citizens residing in or outside Pakistan or persons holding dual 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 respective constitutive documents and the existing related regulations as the case may be);
(d) Mutual funds, provident / pension / gratuity funds / trusts (subject to the terms of their respective Trust Deeds and existing regulations); and
(e) Branches in Pakistan of companies and bodies corporate incorporated outside Pakistan.
2.11 FACILITIES AVAILABLE TO NON-RESIDENT PAKISTANI AND FOREIGN INVESTORS
Companies are permitted under paragraph 6 (with specific reference to sub para (B) (I)) of Chapter
20 Habib Metro Modaraba PROSPECTUS Habib Metro Modaraba
20 of the State Bank of Pakistan’s (“SBP”) Foreign Exchange Manual (the “Manual”) to issue shares on repatriation basis to non-residents who are covered under paragraph 6 (A) of Chapter 20 of the Manual, i.e. (I) A Pakistan national resident outside Pakistan, (II) A person who holds dual nationality including Pakistan nationality, whether living in or outside Pakistan, (III) A foreign national, whether living in or outside Pakistan and (IV) A firm (including a partnership) or trust or mutual fund registered and functioning outside Pakistan, excluding entities owned or controlled by a foreign government, provided the issue price, is paid in foreign exchange through normal banking channel by remittance from abroad or out of foreign currency account maintained by the subscriber / purchaser in Pakistan.
Non-residents who wish to subscribe for the certificates being offered to general public may contact any of the bankers to the issue for taking instructions regarding payment of subscription money against certificates.
The certificates issued to non-resident investors shall be intimated by the Company to the designated Authorized Dealer, along with the documents prescribed in the Manual within 30 days of issue.
Non-residents who are covered under paragraph 6 (A) of Chapter 20 of the Manual do not require SBP’s approval to invest in the Modaraba Certificates being issued in terms of this Prospectus. Furthermore, under paragraph 7 (vii) of Chapter 20 of the Manual the Authorized Dealer shall allow repatriation of dividends, net of applicable taxes and proceeds on sale of listed Modaraba Certificates (i.e. divestment proceeds) not exceeding the market value less brokerage / commission on provision of prescribed documents.
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.
2.12 MINIMUM AMOUNT OF APPLICATION AND BASIS OF ALLOTMENT OF MODARABA CERTIFICATES
The basis and conditions of allotment to the general public shall be as follows:
1. Application for subscription of certificates must be made for 500 certificates or in multiples of 500 certificates only. Applications which are neither for 500 certificates nor for multiples of 500 certificates shall be rejected.
2. The minimum amount of application for subscription of 500 certificates is the Issue Price x 500 certificates. Any cost incurred in issue of certificates as part of the Issue shall be borne by Issuer.
3. Application for certificates below the minimum amount shall not be entertained.
4. SUBMISSION OF FALSE AND FICTITIOUS APPLICATIONS IS PROHIBITED AND SUCH APPLICATIONS’ MONEY MAY BE FORFEITED UNDER SECTION 87(8) OF THE SECURITIES ACT, 2015.
5. If the certificates issued to the general public are sufficient to accommodate all applications, all applications shall be accommodated.
6. If the issue is oversubscribed in terms of number of applications, the certificates shall be allotted by conducting computer balloting, in the presence of the representative(s) of PSX in the following manner:
21 Habib Metro Modaraba PROSPECTUS Habib Metro Modaraba
- If all applications for 500 certificates can be accommodated, then all such applications shall be accommodated first. If all applications for 500 certificates cannot be accommodated, then balloting will be conducted among applications for 500 certificates only.
- If all applications for 500 certificates have been accommodated and certificates are still available for allotment, then all applications for 1,000 certificates shall be accommodated. If all applications for 1,000 certificates cannot be accommodated, then balloting will be conducted among applications for 1,000 certificates only.
- If all applications for 500 certificates and 1,000 certificates have been accommodated and certificates are still available for allotment, then all applications for 1,500 certificates shall be accommodated. If all applications for 1,500 certificates cannot be accommodated, then balloting will be conducted among applications for 1,500 certificates only.
- If all applications for 500 certificates, 1,000 certificates, and 1,500 certificates have been accommodated and certificates are still available for allotment, then all applications for 2,000 certificates will be accommodated. If all applications for 2,000 certificates cannot be accommodated, then balloting will be conducted among applications for 2,000 certificates only.
- After the allotment in the above mentioned manner, the balance certificates, if any, shall be allotted in the following manner:
(i) If the remaining certificates are sufficient to accommodate each application for over 2,000 certificates, then 2,000 certificates shall be allotted to each applicant and the remaining certificates shall be allotted on a pro-rata basis.
(ii) If the remaining certificates are not sufficient to accommodate all remaining applications for over 2,000 certificates, then balloting shall be conducted for allocation of 2,000 certificates to the successful applicants.
7. If the Issue is oversubscribed in terms of amount only, then the allotment of certificates shall be made on the following basis:
(a) First preference will be given to applicants who applied for 500 certificates;
(b) Next preference will be given to applicants who applied for 1,000 certificates;
(c) Next preference will be given to applicants who applied for 1500 certificates; and then;
(d) Next preference will be given to applicants who applied for 2,000 certificates;
(e) After allotment of the above, the balance certificates, if any, shall be allotted on a pro- rata basis to the applicants who applied for more than 2,000 certificates.
8. Allotment of certificates will be subject to scrutiny of the applications for subscription
9. Applications, which do not meet with the above requirements or which are incomplete, will be rejected.
2.13 REFUND / UNBLOCKING OF SUBSCRIPTION MONEY TO UNSUCCESSFUL APPLICANTS
As per the regulation 6(10) of the PO Regulations, within 07 days of the close of public subscription
22 Habib Metro Modaraba PROSPECTUS Habib Metro Modaraba
period, the certificates shall be allotted and issued against the accepted and successful applications and the subscription money of the unsuccessful applicants shall be unblocked / refunded.
As per sub-section (2) of Section 68 of the Companies Act, if refund as required under Sub-section (1) of Section 68 of the Companies Act is not made within the time specified therein, the directors of the company shall be jointly and severally liable to repay that money with surcharge at the rate of two percent (2%) for every month or part thereof from the expiration of the fifteenth day and, in addition, shall be liable to a penalty of level 3 on the standard scale as defined in Section 479 of the Companies Act.
Provided that the directors of the Issuer shall not be liable if it proves that the default in making the refund was not on their own account and was not due to any misconduct or negligence on their part.
2.14 MINIMUM SUBSCRIPTION FOR ALLOTMENT
In the opinion of the directors of the Modaraba Company, the amount that must be raised as a minimum subscription in order to provide for the business operations and expenses is the whole amount of present issue of Rs. 300,000,000 out of which Rs. 210,000,000 has already been subscribed in cash by the Modaraba Management Company and Habib Metropolitan Bank Limited as detailed in para 2.6 of this prospectus.
2.15 PRINCIPAL PURPOSE OF THE USE OF SUBSCRIPTION MONEY
The Modaraba fund after the present issue will be utilized towards Sharia compliant approved modes of financing and investment, and carrying out the primary and other business objectives of the Modaraba as detailed in part 5 of this prospectus.
2.16 INTEREST OF CERTIFICATE HOLDERS
None of the certificate holders of the issued certificates of the Modaraba have any special or other interest in the property or profit of the Modaraba other than that as holders of the certificates in the funds of the Modaraba.
2.17 ISSUE AND CREDIT OF MODARABA CERTIFICATES
Within seven (07) days of the close of public subscription period, the certificates shall be allotted and issued against the accepted and successful applications and the subscription money of the unsuccessful applicants shall be unblocked / refunded, as required under regulation 6(10) of the PO Regulations.
Certificates will be issued only in the book-entry form. Therefore, the applicants must provide their CDS account Number in the Applicant Form. The Company shall credit shares, within seven (07) days of the closing of public subscription, in the respective CDS accounts of the successful applicants.
If the Modaraba Company makes a default in complying with the above requirements, it shall pay to PSX a penalty of Rs.5,000/- per day during which the default continues. PSX may also notify the fact of such default and the name of the Modaraba Company by notice and also by publication in the Ready Board Quotation of PSX.
The name of the Modaraba will also be notified to the TREC holders of the PSX and placed on the website of the PSX.
23 Habib Metro Modaraba PROSPECTUS Habib Metro Modaraba
2.18 TRANSFER OF CERTIFICATES
The modaraba certificates shall be transferred in accordance with the provisions of Section 74 of the Companies Act read with Section 75 thereof and the Central Depositories Act, 1997 and the CDCPL Regulations.
2.19 CERTIFICATES ISSUED SINCE FLOATATION OF MODARABA
Since obtaining authorization for floatation of Modaraba on March 10, 2017, the following modaraba certificates have been issued:
Number of modaraba Considera- Total Value Date of Issued to certificates tion (PKR) subscription issued 3,000,000 Cash 30,000,000 Habib Metropolitan June 8, 2017 Modaraba Management Company (Private) Limited 18,000,000 Cash 180,000,000 Habib Metropolitan Bank June 8, 2017 Limited 21,000,000 210,000,000 TOTALS
2.20 DIVIDEND POLICY
The rights in respect of capital and dividends attached to each certificate would be the same. The Board of Director of the Modaraba Company may from time to time pay to certificate holders such interim dividend as appear to the directors to be justified by the profits of the Modaraba. No dividend shall be paid otherwise than out of the profits of the Modaraba for the year or any other undistributed profits. No unpaid dividends shall bear interest or mark-up against the Modaraba.
The dividends shall be paid within the period laid down in the Companies Act, 2017.
The cash dividend, if any, shall be distributed through direct credit in the Certificate holders’ respective Bank Account. The investors, therefore, must fill-in the relevant part of the Certificates Subscription Form under the heading “Dividend Mandate” and provide therein their bank account for credit of their cash dividends, if any.
Covenants / Restriction on Payment of Dividends
It is stated that there is no restriction on the modaraba by any regulatory authority, creditor, stakeholder etc. on the distribution and capitalization of its profits except as mentioned in this prospectus.
2.21 MODE OF DISTRIBUTION OF PROFITS
Not less than 90% of the net income in respect of the Modaraba business activities, (determined after charging the management fee up to 10% and after setting aside the mandatory reserve as per SECP’s Prudential Regulations for Modaraba, 2004) is proposed to be distributed at least once every financial year to the certificate holders in proportion to the number of certificates held by them. This will be subject to sufficient profitability during the year and discretion of the Board.
2.22 ELIGIBILITY FOR DIVIDEND
All Modaraba certificate holders shall be eligible for any distribution whenever declared. Except to
24 Habib Metro Modaraba PROSPECTUS Habib Metro Modaraba
the extent otherwise specified by the Registrar Modaraba for reasons to be recorded, the new Modaraba certificates shall rank pari passu with existing certificates in all matters including the right to such bonus and dividend as may be declared subsequent to the date of issue of such new certificates.
2.23 DEDUCTION OF ZAKAT
Dividend distribution will be subject to deduction of zakat at source pursuant to the provision of the Zakat and Ushr Ordinance, 1980 (XVIII of 1980) as may be applicable from time to time except where the Zakat and Ushr Ordinance does not apply to any certificate holder or where such certificate holder is otherwise exempt or has claimed exemption from payment / deduction of Zakat in terms of and as provided in the Zakat and Ushr Ordinance.
2.24 TAX EXEMPTION
Under Clause 100 of Part I of the Second Schedule to the Income Tax Ordinance, 2001 (XLIX of 2001) the income of the Modaraba, not arising from trading activities will be exempt from tax subject to distribution of at least 90% of its net income to the certificate holders, after transferring requisite amount to reserves in accordance with Prudential Regulations for Modaraba.
Provided that with effect from the first day of July, 1999 for the purpose of determining the distribution of ninety per cent profits, the profits distributed through bonus certificates to the certificate holders shall not be taken into account.
2.25 SALES TAX
Sales tax on services provided by the modaraba would be applicable as per relevant provincial Sales Tax Laws at applicable rates for respective provinces.
2.26 DEFERRED TAXATION
The Modaraba will account for deferred taxation on all material temporary differences using the liability method arising between the amounts attributed to assets and liabilities for financial reporting purposes and financial statements used for taxation purposes.
However, deferred tax liability will not be applicable and provided in the financial statements as the management believes that the future income of Modaraba will not be taxable in the foreseeable future due to the fact that the Modaraba intends to continue availing the tax exemption through profit distribution to the extent of 90 percent of distributable profit.
2.27 SALES TAX ON SALE / PURCHASE OF MODARABA CERTIFICATES
Under the Constitution of Pakistan and Articles 49 of the 7th NFC Award, the Government of Sindh, Government of Punjab, Government of Khyber Pakhtunkhwa and Government of Baluchistan have promulgated the Sindh Sales Tax on Services Act, 2011, Punjab Sales Tax on Services Act, 2012, Khyber Pakhtunkhwa Sales Tax on services through Khyber Pakhtunkhwa Finance Act, 2013 and the Baluchistan Sales Tax on services Act, 2015 respectively. The Sindh Revenue Board, the Punjab Revenue Authority, the Khyber Pakhtunkhwa Revenue Authority and the Baluchistan Revenue Authority administer and regulate the levy and collection of the Sindh Sales Tax (“SST”), Punjab Sales Tax (“PST”), Khyber Pakhtunkhwa Sales Tax (“KST”) and Baluchistan Sales Tax (“BST”) respectively on the taxable services provided or rendered in Sindh, Punjab, Khyber Pakhtunkhwa and Baluchistan provinces respectively.
25 Habib Metro Modaraba PROSPECTUS Habib Metro Modaraba
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 above – mentioned Acts levy a sales tax on Brokerage at the rate of 13 % in Sindh, 16% in Punjab and in Baluchistan and Khyber Pakhtunkhwa the rate is 15%. Sales tax charged under the aforementioned Acts is withheld at source under statutory requirements.
2.28 TAX CREDIT FOR INVESTMENT IN IPO
Under Section 62 of the Income Tax Ordinance, 2001, a resident person other than a Company, shall be entitled to a tax credit, as mentioned in the said section, for a tax year in respect of the cost of acquiring in the year, new shares offered to the public by a public company listed on a stock exchange in Pakistan, provided the resident person is the original allottee of the shares or the shares are acquired from the Privatization Commission of Pakistan.
As per section 62(3) (b) of the Income Tax Ordinance, 2001, the time Limit for holding shares has been designated as 24 months to avail tax credit.
2.29 FUTURE CAPITALIZATION
The Modaraba Company may make a right or a bonus issue of Modaraba certificates, subject to approval of the Registrar Modaraba, as deemed necessary for the business operations of the Modaraba, in accordance with the Modaraba Companies and Modaraba (Floatation and Control) Ordinance, 1980 and the Modaraba Companies and Modaraba Rules, 1981.
2.30 WITHHOLDING TAX ON DIVIDENDS
Dividend distribution to certificate holders will be subject to withholding tax under section 150 of the Income Tax Ordinance, 2001 as specified in Part III Division I of the First Schedule of the said ordinance or any time-to-time amendments therein. In terms of the provision of Section 8 of the said ordinance, said deduction at source, shall be deemed to be full and final liability in respect of such profits in case of individuals only. The following are the rates:
- For filers of Income Tax Returns: 15%
- For non-filers of Income Tax Return: 20%
2.31 TAX ON BONUS CERTIFICATES
As per section 236M of the Income Tax Ordinance 2001, tax at the rate of 5.00% of the value of bonus certificates determined on the basis of the day end ex-price be collected by the Modaraba issuing the bonus certificates, which will be the final tax liability on such income of the certificate holder.
2.32 CAPITAL GAINS TAX
Under section 37A of the Income Tax Ordinance, 2001, capital gain on securities acquired after July 1, 2016 is subject to tax @ 15% for filers and @ 20% for non-filers.
2.33 CAPITAL VALUE TAX (“CVT”) & WITHHOLDING TAX (“WHT”) ON SALE / PURCHASE OF CERTIFICATES
On April 24, 2012, Finance (Amendment) Ordinance, 2012 was introduced whereby clause (F) was introduced in sub-section (2) of the Finance Act, 1989. This amendment reintroduced the Capital Value Tax at the rate of 0.01 % of the purchase value on the purchase of shares / certificates of a company listed on a registered securities exchange in Pakistan.
26 Habib Metro Modaraba PROSPECTUS Habib Metro Modaraba
3. UNDERWRITING ARRANGEMENT, COMMISSIONS, BROKERAGE AND OTHER EXPENSES
3.1 UNDERWRITING
The present public offer of 9 million Modaraba certificates of Rs. 10 each, being offered at par, has been fully underwritten as under:
Name of Underwriter No. of certificates Amount in Rupees Arif Habib Limited 6,000,000 60,000,000 Ismail Iqbal Securities (Private) Limited 3,000,000 30,000,000 TOTAL 9,000,000 90,000,000
If and to the extent, Modaraba certificates hereby offered are not subscribed and paid for in cash in full by the closing of the subscription list, the Underwriter shall within 15 days of being duly called upon by the Modaraba Company to do so, subscribe and pay for or procure subscribers to subscribe and pay for in cash in full those Modaraba certificates not so subscribed.
In the opinion of the directors of the Modaraba Company, the resources of the Underwriters are sufficient to discharge their underwriting commitments.
3.2 NO BUYBACK / REPURCHASE AGREEMENT
NEITHER THE UNDERWRITERS NOR ANY OF THEIR ASSOCIATES HAVE ENTERED INTO ANY BUYBACK OR REPURCHASE AGREEMENT WITH THE SPONSORS, THE MODARABA COMPANY OR ANY OTHER PERSON IN RESPECT OF THIS PUBLIC ISSUE.
ALSO, NEITHER THE COMPANY NOR ANY OF ITS ASSOCIATES HAVE ENTERED INTO ANY BUY BACK / RE-PURCHASE AGREEMENT WITH THE UNDERWRITERS OR THEIR ACCOCIATES.
THE COMPANY AND ITS ASSOCIATES SHALL NOT BUY BACK / RE-PURCHASE SHARES FROM THE UNDERWRITERS AND THEIR ASSOCIATES.
3.3 UNDERWRITING EXPENSES
The Underwriters have been paid underwriting expenses @ 1% on the amount of the public issue underwritten by them. In addition, a take up expenses of 1.5% shall be paid to the Underwriters on the amount of certificates actually taken up by them.
3.4 FEES AND EXPENSES FOR CENTRALISED E-IPO SYSTEM (CES)
Commission on applications received through CES will be paid to CDC, which shall not be more than 0.8% of the amount of the successful applications. CDC will share the fee with other participants of CES at a ratio agreed amongst them.
3.5 COMMISSION TO THE BANKERS TO THE ISSUE
A commission not exceeding 0.5% of the amount collected on allotment in respect of successful applicants of the Modaraba certificates will be paid to the bankers to the issue for services to be rendered by them in connection with this issue. No commission shall be paid to the bankers in respect of Modaraba certificates subscribed by the underwriters by virtue of their underwriting commitments.
27 Habib Metro Modaraba PROSPECTUS Habib Metro Modaraba
3.6 BROKERAGE
Brokerage shall be paid to the TREC holders of PSX, at the rate of 1.0% of paid-up value of Modaraba certificates actually sold through them. No brokerage shall be payable in respect of Modaraba certificates taken up by the Underwriters by virtue of their underwriting commitment.
3.7 PRELIMINARY EXPENSES AND EXPENSES OF THE ISSUE
The preliminary expenses payable by the Modaraba and expenses of the proposed issue to the public inclusive of cost of organization and floatation of the Modaraba, cost of printing, publication and distribution of this prospectus, underwriting expenses, commission to the bankers to the issue and brokerage etc. are not expected to exceed Rs. 13,312,500/-. The estimated preliminary expenses and expenses to the issue, as described below, shall be paid by the Modaraba and shall be charged to the Profit & Loss Account of the Modaraba during the first year of operations:
Expenses Rate Amount in Rupees Fee to Consultants to the Issue 1,000,000 Underwriting expenses 1% 900,000 Underwriter’s take-up expenses * 1.5% 1,350,000 Commission to the Bankers to the Issue * 0.5% 450,000 Bankers to the issue – out of pocket expenses 424,000 Bankers to the issue – eIPO charges * 650,000 Brokerage to TREC Holders of Pakistan Stock 1% 900,000 Exchange Limited * Expenses on centralized E-PO system * 720,000 Authorized Modaraba Fund Fee 3,050,000 Advertisement and Distribution of Prospectus 1,000,000 CDC Annual fee for being eligible Security 80,000 CDC Fresh issue fee 0.16% 144,000 CDC charges for balloting / share registrars * 425,000 PSX Initial Listing fee 300,000 PSX Annual Listing fee 195,000 PSX Service charges 50,000 SECP Application and processing fee 575,000 SECP supervisory fee 10% of PSX 49,500 initial and annual listing fee Sharia Advisor Fee 50,000 Printing charges 500,000 Miscellaneous costs 500,000 TOTAL 13,312,500
* These amounts represent the maximum possible costs under these heads. ** These amounts do not include Sindh Sales Tax, whereever applicable.
Note: The above figures are indicative and may change at the time of IPO.
28 Habib Metro Modaraba PROSPECTUS Habib Metro Modaraba
4. THE MODARABA MANAGEMENT COMPANY
4.1 INTRODUCTION TO THE MANAGERS OF THE MODARABA
Habib Metropolitan Modaraba Management Company (Private) Limited, a wholly owned subsidiary of Habib Metropolitan Bank Limited, is a private limited company incorporated in the province of Sindh under the Companies Act, 2017 (previously the Companies Ordinance, 1984). It was registered as a modaraba management company with the Registrar Modaraba, on 30th July, 2015. Presently the Board of the Modaraba Company comprises of the following persons:
Mr. Wazir Mumtaz Ahmed Chairman (Non-Executive Director) Mr. Muhammad Shoaib Ibrahim Chief Executive Officer Mr. Mohammad Hashim (Non-Executive Director) Mr. Syed Rasheed Akhtar (Non-Executive Independent Director)
4.2 FIRST HABIB MODARABA
With the approval of the Registrar Modaraba, the Habib Metropolitan Modaraba Management Company (Private) Limited [HMMCPL] has taken over the control and management of the affairs of the First Habib Modaraba [FHM], a Modaraba listed on the Pakistan Stock Exchange Limited.
First Habib Modaraba (FHM) is a perpetual and multipurpose modaraba operating as an Islamic Financial Institution within non-banking segment of Pakistan. FHM was incorporated in 1985 and has completed 31 years of successful business operation within the Modaraba sector of Pakistan.
FHM is a diversified Islamic Financial services provider known for its quality products and services to customer, prudent risk management Sharia governance. Since inception, the FHM has been committed to follow its core values that were embodied by the founders and remain the cornerstone of business philosophy. Being the pioneer in Modaraba sector, FHM grew over the years on sound footing with the commitment of adding value to customers and investors.
FHM’s constant commitment for performance excellence and good governance have not only kept it as leading Modaraba within the sector but also earned it recognition at national and international level. So far, FHM has secured several awards on best performance, best corporate report, best corporate disclosure and corporate excellence from reputable bodies, such as NBFI and Modaraba Association, ICAP and ICMAP, Management Association of Pakistan, and SAFA an apex body of SAARC.
With each passing year, FHM continues to expand and enhance its business outreach by following the vision to be a leading Islamic financial institution within the Modaraba sector and mission to build institution on trust, integrity and enhance value through performance excellent and good governance. Sound and satisfactory performance of FHM on year on year basis is outcome of target market and capture right opportunities in right time. Since last several years FHM has been securing AA+ rating as long term rating from Pakistan Credit Rating Agency Ltd., (PACRA) which depict soundness of the entity and also matter of great satisfaction for the investors.
Key financial highlights of First Habib Modaraba for the last five years is tabulated below:
Year Ending June 30, (Rupees in million unless specified) 2016 2015 2014 2013 2012 Paid up Fund 1,008 1,008 1,008 1,008 1,008 Certificate Holders’ Fund 3,316 3,257 3,209 3,053 3,127 Total Assets 7,161 6,393 5,393 4,719 4,565 Profit After Tax 298 307 285 392 345 Dividend % 20 22 22 20 20
29 Habib Metro Modaraba PROSPECTUS Habib Metro Modaraba
4.3 ABOUT HABIB METROPOLITAN BANK LIMITED Habib Metropolitan Bank Limited was incorporated in Pakistan as a Public Listed Company in 1992 as Metropolitan Bank Limited. The Bank commenced, duly licensed, full scheduled commercial- banking operations in October 1992. From October 1992 to September 2006, the bank remained a highly rated bank and, vide it’s nationwide 51-branch on-line network, established as a distinguished provider of trade finance services. On October 26, 2006 Habib Bank AG Zurich’s Pakistan Operations merged into the bank and the merged entity was named Habib Metropolitan Bank Limited. Demonstrating a strong commitment to Pakistan economy, HBZ is the principal shareholder of HABIBMETRO. HABIBMETRO operates in all major cities of the country. The Bank ranks within Top 10 in Pakistan with a strong vision to be the most respected Financial Institution. HABIBMETRO has its primary focus on retail banking and trade finance and also offers highly innovative E-Banking solutions and Consumer Banking to its customers. The Bank’s Islamic Banking Division is fully capable of catering to customers seeking Sharia compliant products. The HBZ Group is heir to a rich tradition of banking and commerce dating back to more than 160 years. The group’s flagship and HABIBMETRO’s principal, HBZ (incorporated 1967) enjoys International ranking of 687 in terms of capital. With Headquarters in Switzerland, the HBZ Group also operates in Hong Kong, Singapore, United Arab Emirates, Kenya, South Africa, United Kingdom and North America. The Pakistan Credit Rating Agency (PACRA) has allotted both long-term and short-term ratings of HabibMetro Limited at “AA+” (Double A plus) and “A1+” (A one plus), respectively. These ratings, being the highest amongst the local private sector banks, denote a very low expectation of credit risk emanating from a very strong capacity for timely payment of financial commitments. The following are the financial highlights and dividend payout history of the bank during the last five years. (Rupees in million unless specified) 2016 2015 2014 2013 2012 Paid-up Capital 10,478 10,478 10,478 10,478 10,478 Shareholders’ Equity 37,165 33,120 30,200 27,364 26,002 Total Assets 526,606 489,879 397,380 311,454 304,416 Net Profit 6,119 7,656 4,927 3,526 3,406 Dividend % 30 40 25 20 20
4.4 CAPITAL OF THE MODARABA MANAGEMENT COMPANY The paid-up capital of the Modaraba Management Company is Rs. 350,000,000/- divided into 35,000,000 Ordinary shares of Rs.10/- each. 4.5 OBJECTIVES OF THE MODARABA COMPANY To initiate, sponsor, promote, float, organize, manage, administer, operate modaraba companies, modaraba funds and Modarabas of all types and descriptions, and other similar concerns either in syndicates or otherwise providing that none of these enterprises are or would be engaged in or the funds thereof invested in any venture the activities of which are contrary to the injunctions of Islam or which involves the element of riba in any form whatsoever. It is envisaged that the Modaraba Company would float a series of Modarabas for undertaking various business ventures that are in conformity with the injunctions of Islam. In accordance with Section 17 of the Modaraba Ordinance, the Modaraba Company will not compete with the business to be carried on by the Modaraba(s) floated by it.
30 Habib Metro Modaraba PROSPECTUS Habib Metro Modaraba
5. MODARABA OBJECTIVES, BUSINESS AND PROSPECTS
5.1 TYPE OF MODARABA
The HABIB METRO MODARABA is a multi-purpose and perpetual Modaraba.
5.2 OBJECTIVES OF THE MODARABA
The Modaraba is floated with a view to:
(a) Providing an opportunity to certificate holders to participate gainfully in Riba Free economic development of Pakistan.
(b) Earn maximum possible income for distribution to the certificate holders so that attractive, sound and lawful Sharia compliant avenues of investment can be provided to them.
(c) Produce appreciation of capital through increase in value of certificates.
(d) Generate long-term growth.
5.3 MODE OF TRANSACTIONS
This will be a perpetual and multi-purpose Modaraba and will invest in various Islamic modes of financing and carry out the primary and other business objectives as detailed here-in-below.
In addition, the Modaraba may use other avenues of investment as already approved by the Religious Board for other Modarabas or that may be approved by the Religious Board in the future.
All transactions of the Modaraba will be in accordance with:-
- Principle of Islamic Finance.
- Modes already approved by the Religious Board or that may be approved or modified by the Religious Board in future.
- Applicable laws in Pakistan.
5.4 SCOPE OF MODARABAS BUSINESS ACTIVITIES
5.4.1 Primary business
The scope of the Modaraba`s primary business activities will be as follows:
• Residual Value (RV) Car financing model on Ijarah basis
The modaraba will provide car financing solutions to various individual and corporate customers on the basis of RV car financing model.
In the RV car financing, the monthly rentals are significantly lower than the regular Ijarah financing mode. This allows a customer to repay some part of facility at considerably reduced monthly instalments and after completion of facility period the customer can buy the car at fixed residual value. The customer also has the option that instead of buying car can again take new financing facility on Ijara basis or return the car to Modaraba.
31 Habib Metro Modaraba PROSPECTUS Habib Metro Modaraba
Due to the significantly reduced monthly installments, customer can also enjoy use of higher value cars.
• Providing financing for solar power equipment
The Modaraba will provide financing for solar power equipment to prospective customers on the basis of approved Islamic modes of financing.
5.4.2 Other business objectives
In addition to the above, the scope of the Modaraba’s other business activities will be as follows:
• Equipment rentals
The modaraba will provide equipment on short and long term rentals basis to individuals and corporate bodies. The equipment will be rented along with entire range of services such as managing operations, maintenance, repair, replacement, up gradation and logistics through experienced asset manager.
Modaraba will adapt its products according to customer requirements by offering a tailor-made solution.
The following assets will be provided on rentals basis.
(a) Generators,
(b) Construction Equipment,
(c) Commercial Vehicles,
(d) Communication Equipment
(e) Agricultural Equipment
(f) All other types of assets and equipment provided that the type of assets and / or use of assets through rent / Ijarah / lease agreements shall not be repugnant to the injunctions of Islam.
• The Modaraba will also act as member mercantile exchange(s) and will carry out the business of brokers in commodities in accordance with the rules and regulations of such exchange.
• The Modaraba will also engage in Education and health services sector and may setup educational institutions and hospitals.
• Investing in the Shariah compliant instruments and financing products issued / raised by the Federal or Provincial governments or by the Public Sector companies, corporations, private sector companies and institutions.
• The Modaraba will also invest in Sharia compliant investment and financing products in private sector clients acting either on behalf of its clients or on its own account. Such investment can be made either through underwriting, direct investment or purchase of such instrument from the secondary market.
32 Habib Metro Modaraba PROSPECTUS Habib Metro Modaraba
• Investing funds for commercial, agricultural and other purposes in modes that are in accordance with the injunctions of Islam.
• Investing in Sharia compliant Collective Schemes approved by SECP and the Registrar Modarabas.
• Promoting and investing in projects on its own or in collaboration with the private and public sector companies, institutions etc., with both foreign and local and professional managements and in particular export oriented or import substitution projects and projects providing support and services to industrial and agriculture sectors.
• Promoting, investing and owning, directly or indirectly, either on its own or in collaboration with local and foreign partners, logistic & warehouses for providing storage services to growers, exporters, importers, manufacturers and traders.
• Collaborating with other companies and Modarabas in businesses and commercial activities for mutual convenience and benefit, including syndication and leveraged transactions.
• Investing in the interest free money market instruments issued by Federal or Provincial Governments or by any Public Sector companies, corporations, and institutions.
• Investing in the interest free money market instruments issued by private sector clients acting either on behalf of its clients or on its own account in such market.
• Managing the floatation of non-interest bearing commercial paper and other Sharia compliant instruments. Introduction of its clients to non-interest bearing money market and market making activities.
• Actively promoting the development of interest free secondary money market and over the counter market (OTC) acting on behalf of its client or on its own account in such market.
• Innovatively designing and effecting approved instrument of Musharkah, Murabaha, Modaraba and other similar non-interest bearing instruments / schemes.
• Subject to the approval of the Registrar Modaraba / Commission, acquire majority or controlling shares in commercially viable public limited listed & unlisted companies and private limited companies engaged in manufacturing of different commodities & products and provision of services, which are not contradictory to the injunctions of Islam, and managing the same for good returns. Such acquisition should also include distressed and taken over companies to turn the same around by injecting capital & providing necessary financial & operational support and management resources. Such investments would be made with a view to protect the Modaraba’s investment and to secure good dividend return and capital gains to the Modaraba certificate holders.
• Providing advisory, agency and custodial services to its clients and other Modarabas, Islamic financial institutions, Federal or Provincial Governments, Corporation or public sector companies for funds generation either for themselves or for their clients through a syndicate or bilateral basis under the Islamic modes of financing and act as intermediary in financial transaction to earn fees, commissions and revenues thereon.
33 Habib Metro Modaraba PROSPECTUS Habib Metro Modaraba
• Open branches in any part of the world to carry on the business of the Modaraba in accordance with the objectives laid down.
• Other Sharia Compliant financing facilities
Other Sharia compliant financing facilities will also be provided to reputable corporate and other customer on the basis of following approved modes:
- Ijarah - Diminishing musharika - Murabaha - Istisna - And or any other modes of financing approved by the Religious board / Sharia Board from time to time.
• In addition, the modaraba may use other avenues of investments as already approved by the Religious Board for other Modarabas or as may be approved by the Religious Board in future.
• Further, the modaraba will seek relevant necessary approval from various regulatory agencies, if required at any stage, before carrying out any particular business activity.
5.5 RESOURCES AND MOBILIZATION
The Modaraba can mobilize additional resources from Islamic financial institutions, corporates and general public by using the following permissible modes:
(a) Musharaka;
(b) Murabahah;
(c) Mudarabah;
(d) Istisna;
(e) Salam;
(f) Sukuk;
(g) Other permissible Islamic modes of financing and / or investment approved by the Religious Board and the SECP from time to time.
All the operations and transactions shall be in conformity with the injunctions of the Holy Quran and Sunnah and in accordance with the arrangements and / or instruments approved by the Religious Board from time to time.
The Modaraba shall not invite or raise deposit in any form from the general public without the prior written approval of the Registrar Modaraba / Securities and Exchange Commission of Pakistan.
34 Habib Metro Modaraba PROSPECTUS Habib Metro Modaraba
5.6 CONFLICT OF INTEREST
The Modaraba shall not make any loans or advance money to any person, except in connection with the normal business of the Modaraba. Such loans or advances shall be under Islamic modes of finance.
The Modaraba Company or any of its directors, officers or their relatives shall not obtain loan, advance or credit from the funds of the Modaraba or on the security / collateral of the assets of the Modaraba.
5.7 RATIO OF CERTIFICATE HOLDERS FUNDS TO LIABILITIES
The Modaraba shall always maintain such ratio of certificate holders funds to liabilities as is required under Prudential and other Regulations for Modarabas from time to time.
5.8 ADHERENCE TO SHARIAH IN ALL MATTERS
The Modaraba shall not enter into any business, investment or other transactions that is repugnant to the injunctions of Islam; and involves an element of Riba either directly or indirectly.
5.9 RISK FACTORS
The directors wish to highlight the major factors, which may affect the profitability of the Modaraba, these are:
5.9.1 Changes in Taxation Policy
The success of the Modaraba, amongst other factors, is dependent upon the privilege of tax exemption by the Government, which is applicable on minimum distribution of 90% of the profit distribution to its certificate holders. If at any stage, this exemption is withdrawn by the Government, the profitability of the Modaraba may be affected.
5.9.2 Geo-Political Risk
The political risk remains the single largest unmitigated risk factor. Any political unrest could undermine the government’s efforts to restore investors confidence. At the same time, competition for the available business is going to put pressure on business growth, margins and profits.
5.9.3 Credit Risk
Credit risk is the risk of loss arising from the failure of a client or counterparty to meet their contractual obligations. These may arise on account of the following:
• Default risk • Credit concentration risk • Recovery risk • Counter-party risk • Related-party risk • Environmental risk
35 Habib Metro Modaraba PROSPECTUS Habib Metro Modaraba
5.9.4 Sharia Risk
Sharia non-compliance risk is the risk that arises from Modaraba’s failure to comply with the Sharia rules and principles prescribed by Sharia Advisor. Sharia compliance is critical to Modaraba’s operations and such Compliance requirements must permeate throughout the organization and its activities. In this regard, Sharia compliance is considered as falling within a higher priority category in relation to other identified risks.
5.9.5 Market Competition
The Modaraba may face competition from other financial institutions including the banks, development financial institutions and NBFCs. However, Modaraba’s competitive advantage stems from its technical expertise, adequate infrastructure to support transactions and quick turnaround time in providing the required financing and investment.
5.9.6 Risk related to solar power equipment
The Solar Power Equipment will be exposed to risk of weather & climate, environmental, technological and improper maintenance.
5.9.7 Liquidity Risk
Investors face possible risk of not being able to sell their certificates on the secondary market without adversely affecting the price.
5.9.8 Force Majeure
The performance of the Modaraba may be affected on account of force majeure events which are as follows:
(a) Natural events
(i) Any material effect of the natural calamities including fire, earthquake etc;
(ii) Explosion;
(iii) Epidemic or plague;
(iv) Any event or circumstance of a nature or having an effect analogous to any of the foregoing.
(b) Political Events
Poor law and order situation due to political uncertainty, strikes terrorism etc.;
Note: It is stated that all material risk factors have been disclosed and nothing has been concealed with respect to this prospectus.
5.10 COMMENCEMENT OF BUSINESS OF THE MODARABA
The full-fledged business of the Modaraba will be started after the present issue and completion of necessary formalities which is expected within thirty (30) days of the close of public subscription.
36 Habib Metro Modaraba PROSPECTUS Habib Metro Modaraba
6. FINANCIAL INFORMATION
6.1 AUDITOR’S REPORT UNDER CLAUSE 1 OF SECTION 2 OF THE FIRST SCHEDULE TO THE PUBLIC OFFERING REGULATIONS, 2017 AND THE MODARABA COMPANIES AND MODARABA RULES, 1981 FOR THE PURPOSE OF INCLUSION IN THIS PROSPECTUS
37 Habib Metro Modaraba PROSPECTUS Habib Metro Modaraba
38 Habib Metro Modaraba PROSPECTUS Habib Metro Modaraba
39 Habib Metro Modaraba PROSPECTUS Habib Metro Modaraba
6.2 AUDITOR’S CERTIFICATE ON PAID UP MODARABA FUND
40 Habib Metro Modaraba PROSPECTUS Habib Metro Modaraba
41 Habib Metro Modaraba PROSPECTUS Habib Metro Modaraba
6.3 AUDITOR’S CERTIFICATE ON BREAKUP VALUE OF MODARABA CERTIFICATES
42 Habib Metro Modaraba PROSPECTUS Habib Metro Modaraba
43 Habib Metro Modaraba PROSPECTUS Habib Metro Modaraba
7. BOARD OF DIRECTORS AND ORGANIZATIONAL SET UP
7.1 DIRECTORS OF THE MODARABA MANAGEMENT COMPANY
The current board of directors comprises of:
Directorship in Other Name and Address Designation Companies Mr. Wazir Mumtaz Ahmed House No. 22/1, Khayaban- Habib Management (Private) e-Shahbaz, 5th street, DHA Chairman (Non- Limited Phase VI, Karachi Executive Director) [formerly Habib Modaraba CNIC # 42301-0968506-7 Management (Private) Limited]
Mr. Muhammad Shoaib Ibrahim Habib Management (Private) Flat No. 202, Kiran Homes, Chief Executive Limited Garden East Quarters, Officer [formerly Habib Modaraba Jamshed Town, Karachi Management (Private) Limited] CNIC # 42201-2425101-7
Mr. Muhammad Hashim Habib Management (Private) House No. 3-F, Street No. 2, Non-Executive Limited Block 6, PECHS, Karachi Director [formerly Habib Modaraba CNIC # 42201-0294196-1 Management (Private) Limited] Mr. Syed Rasheed Akhtar 86/3, 24th Street, Khayaban- Habib Management (Private) e-Sehr, DHA, Phase VI, Non-Executive Limited Karachi Independent Director [formerly Habib Modaraba CNIC # 42301-9640228-3 Management (Private) Limited]
7.2 UNDERTAKING BY THE MODARABA AND ITS SPONSORS
The Modaraba and its sponsors undertake:
1. That neither the Issuer nor its directors, sponsors or substantial shareholders have been holding the office of the directors, or have been sponsors or substantial shareholders in any company:
(i) which had been declared defaulter by the securities exchange or futures exchange; or
(ii) whose TRE Certificate has been cancelled or forfeited by the Exchange, PMEX or any other registered stock exchange of Pakistan that existed prior to integration of stock exchanges pursuant to Integration Order number 01/2016 dated January 11, 2016 issued by the Commission due to noncompliance of any applicable rules, regulations, notices, procedures, guidelines etc. which has been de‐listed by the securities exchange due to non‐compliance of its regulations.
(iii) Which was de‐listed by the Exchange due to its non‐compliance of any applicable provision of PSX Regulation.
44 Habib Metro Modaraba PROSPECTUS Habib Metro Modaraba
2. That none of the Sponsors, Major Shareholders, Directors or Management of the Modaraba as well as the Modaraba itself or its Associated Company / Undertaking / Entity have been found guilty of being engaged in any fraudulent activity. The Company have made full disclosure regarding any / or all cases in relation to involvement of the person named above in any alleged fraudulent activity i.e., pending before any Court of Law / Regulatory Body / Investigation Agency in or outside of the Country.
7.3 OVERDUE LOANS
There are no overdue loans (local and / or foreign currency) on the Modaraba Company or its directors. The modaraba management company, the modaraba, its CEO, its directors and its sponsors, under the oath, undertake that they have no overdue payment to any financial institution.
7.4 DIVIDEND PAYOUT BY LISTED GROUP / ASOCIATED COMPANIES
Dividend per share / modaraba certificate Name of Company / Modaraba 2016 2015 2014 2013 2012 First Habib Modaraba 20% 22% 22% 20% 20% Habib Metropolitan Bank 30% 40% 25% 20% 20% Limited Habib Insurance Company 35% 35% 40% 50% 35% Limited [Associated company of Habib Metropolitan Bank Limited]
7.5 PROFILE OF BOARD OF DIRECTORS
Mr. Wazir Mumtaz Ahmed – Chairman
Mr.Wazir Mumtaz Ahmed is a seasoned banker. His career as a banker is spread over a period of 48 years of committed and dedicated services. He started his banking career in 1961 and has diversified experience on several senior positions. After completion of his Masters in Economics he got International Certifications in Commercial Law & Economics from London Chamber of Commerce. His career is a perfect combination of Integrity & Commitment which gave him additional advantage to reach up to the position of Senior Executive Vice President in the Bank. He has also completed Certification of Director Training Program conducted by Institute of Business Administration, Karachi.
Mr. Syed Rasheed Akhtar – Director
Syed Rasheed Akhtar has rich experience in the banking field. His vast banking career spans over 36 years. He possesses masters in statistics degree from University of Karachi. He started his banking career from Habib Bank Limited in the year 1974 and carried diversified experience on senior positions. He has been associated with bank Indosuez, Habib Bank AG Zurich, HBZ Bank Limited, South Africa. He also headed an independent Islamic Banking Division of HBZ Bank Limited, South Africa from 2006-2010. He successfully completed Certificate on Islamic Banking arranged by N.I.B.A.F. State Bank of Pakistan. He has also completed Certificate of Director Training Program conducted by Institute of Chartered Accountants of Pakistan.
Mr. Mohammed Hashim – Director
Mr. Mohammed Hashim is a Commerce Graduate from University of Karachi and has Banking
45 Habib Metro Modaraba PROSPECTUS Habib Metro Modaraba
Diploma from Institute of Bankers Pakistan (IBP), presently associated with Habib Metropolitan Bank Limited, handling as Head of Foreign Investors Portfolio Management. Mr. Hashim has 45 years of Banking experience of local and international banking particularly of Middle East region.
Mr. Hashim is carrying very rich experience of local and international money market, portfolio management and secondary market operation. He has also completed Certificate of Director Training Program conducted by Institute of Business Administration, Karachi.
7.6 PROFILE OF CHIEF EXECUTIVE – MR. MUHAMMAD SHOAIB IBRAHIM
Mr. Muhammad Shoaib is associated with First Habib Modaraba since the inception of modaraba. His extensive working experience in Non-Banking Islamic Financial institutions makes him senior most person with rich experience of Islamic Finance in Pakistan. This intense exposure gave him the insight into the financial and technical aspects of fund management in Islamic way. He has done Master’s in Business Administration (MBA) in Banking and Finance from Institute of Business Administration (IBA). He has completed Post Graduate Diploma (PGD) in Islamic Banking and Finance from Centre of Islamic Economics (Darul Ulum), Karachi, Pakistan. He has also completed Certification of Director Training Program conducted by Institute of Chartered Accountants of Pakistan. On a number of occasions, he remained as an Executive Member of Modaraba Association of Pakistan and also remained the Chairman of NBFI & Modaraba Association of Pakistan.
7.7 PROFILE OF CHIEF FINANCIAL OFFICER
Mr. Tehsin Abbas is the Chief Financial Officer of Habib Metro Modaraba. He commenced his career in the year 1992 and now has more than 24 years of experience of serving Modaraba sector in various senior positions in First Habib Modaraba. He holds Master degree in Business Administration (Finance).
7.8 PROFILE OF COMPANY SECRETARY
Mr. Adnan Thanwey is the Company Secretary of Habib Modaraba Management Company (Pvt.) Limited. Mr. Adnan having extensive and diversified experience spans over 20 years in the Telecom, Brokerage house and financial sectors of the Country. During this period, he has held senior positions in operational, financial management and corporate affairs. Mr. Adnan has also worked on the floatation of a Telecom Company. Apart from holding a Master degree holder of University of Karachi, he has also completed CA intermediate from Institute of Chartered Accountants of Pakistan (ICAP) along with its statutory training requirement. Mr. Adnan also completed a certificate course on Islamic banking conducted by Center for Islamic Economics (a division of Darul uloom Karachi).
7.9 PROFILE OF SHARIA ADVISOR OF THE MODARABA
Mufti Abdul Sattar Laghari holds a Shahadat-ul-A’almiah (Dars- e-Nizami) and a Master Scholar from Jamia Darul-Uloom, Korangi, Karachi and Wifaq ul Madaris Al Arabia Multan Pakistan. He holds specialization (Takhassus) in Islamic Fiqh and Fatwa from Darul Ifta wal lrshad Nazimabad 4 Karachi with Master In Islamic Studies from University of Karachi.
Mufti Laghari also holds a certificate of one year correspondence course in Islamic Law & Sharia from Sharia Academy International Islamic University Islamabad Pakistan along with certificates of various courses on Islamic Banking and Finance conducted by prominent learning Centers in Pakistan & Malaysia. He secured top position within Islamic Banking Certificate Course # 20 conducted at NIBAF Karachi.
46 Habib Metro Modaraba PROSPECTUS Habib Metro Modaraba
He previously worked as Sharia Advisor in Islamic Banking Division of National Bank of Pakistan and presently associated as Resident Sharia Board Member (RSBM) and Head Sharia Compliance with Islamic Banking Division of Habib Metropolitan Bank Limited – namely SIRAT. Besides, he is also Sharia Advisor of First Habib Modaraba and KASB Modaraba and also gives Sharia advisory services to NBFI and Modaraba Association of Pakistan from time to time.
Mufti Laghari has remained a member of subcommittee for review of some AAOIFI Sharia standards at State Bank of Pakistan. He is a master trainer in Islamic Banking and Finance and has conducted extensive courses throughout Pakistan.
Mufti Laghari has a vast field experience of various types of transactions executed in Islamic banking industry and Modaraba sector. During his career he has also issued numerous fatwas on general as well as financial & Islamic Banking Issues.
He is also Imam and Khateeb at Jamiah Masjid Tauheed Nazimabad 2.
7.10 ASSOCIATED LISTED COMPANIES / MODARABAS
Name of Modaraba / Date of Commencement / Registration Number Company Incorporation First Habib Modaraba 1985 2/1984 Habib Metropolitan Bank 08/03/1992 0028018 Limited Habib Insurance Company 12/03/1994 0033774 Limited [ Associate of Habib Metropolitan Bank Limited ]
7.11 FINANCIAL PERFORMANCE OF ASSOCIATED LISTED COMPANIES UNDER THE SAME MANAGEMENT
FIRST HABIB MODARABA Please refer para 4.2 of this prospectus.
HABIB METROPOLITAN BANK LIMITED Please refer para 4.3 of this prospectus.
HABIB INSURANCE COMPANY LIMITED Year ending December 31, (Rupees in million unless specified) 2016 2015 2014 2013 2012 Paid-up Capital 619 619 619 495 495 Shareholders‟ Equity 1,100 1,134 1,160 1,025 960 Total Assets 2,760 2,743 2,851 2,238 2,005 Net Profit 192 227 260 244 195 Dividend % 35 35 40 50 35
7.12 SUBSIDIARIES AND ASSOCIATES OF COMPANIES UNDER THE SAME MANAGEMENT
Habib Metropolitan Bank Limited also owns Habib Metropolitan Financial Services Limited which is stock brokerage house and TRE certificate holder of the PSX.
47 Habib Metro Modaraba PROSPECTUS Habib Metro Modaraba
7.13 ADMINISTRATION AND MANAGEMENT POLICIES
(a) The Modaraba Company shall maintain a Register of Modaraba Certificate holders and only certificate holders registered in the said Register shall be deemed to be owners thereof.
(b) The Modaraba Company shall keep separate books of accounts relating to its own income and expenditure and to income and expenditure of and connected with the Modaraba or other Modarabas. The said books of accounts shall be open to inspection by the directors and auditors of the Modaraba Company and the auditors of the Modarabas.
(c) The Modaraba Company shall, within two months of the end of first half of the financial year, prepare and submit the financial position of the Modaraba whether audited or otherwise, besides any other statements or information that the board of the Modaraba Company may like to include, to the Registrar Modarabas and to all registered certificate holders.
(d) Within three months of the close of the accounting year of the Modaraba, the Modaraba Company shall prepare and circulate to the holders of Modaraba certificates:
(i) the annual balance sheet and profit and loss account;
(ii) a report of the auditors on the balance sheet and profit and loss account;
(iii) a report by the Modaraba Company on the activities and business prospects of the Modaraba and the profits for distribution to the certificate holders;
(iv) any other statement or information as required under the Code of Corporate Governance and / or Listing Regulations; and
(v) any other statement or information that the Board of the Modaraba Company may like to include.
(e) Auditors of the Modaraba Company and the Modaraba
KPMG Taseer Hadi, Chartered Accountants are the auditors of the Modaraba Company.
BDO Ebrahim & Co., Chartered Accountants have given their consent to act as auditors of the Modaraba.
The Registrar Modaraba have approved the appointment of BDO Ebrahim & Co., Chartered Accountants as the auditors of the Modaraba until the floatation of the Habib Metro Modaraba vide their letter dated May 22, 2017. After the floatation of Habib Metro Modaraba, the management company will be required to submit an application for appointment of statutory auditors in terms of section 15 of the Modaraba Ordinance, 1980 read with rule 19 of the Modaraba Rules, 1981 for approval of the Registrar Modaraba.
The accounting record of Habib Metro Modaraba will be kept on the basis of fiscal year ending on the last day of June in each financial year.
(f) Fee for the Management of the modaraba [ Management company’s fee]:
The Modaraba Company will provide management services and charge a management fee not exceeding 10% per annum of the net annual profit of the Modaraba. The net profit shown in the annual audited profit & loss account of the Modaraba shall form the basis for calculating the management fee.
48 Habib Metro Modaraba PROSPECTUS Habib Metro Modaraba
The Modaraba Company shall be authorized to do all other acts which in its opinion may be necessary to promote the interest of the Certificate holders based on investment climate in Pakistan and elsewhere and the condition of the capital market and as may be warranted by commercial consideration in accordance with the provisions of the Modaraba Ordinance, 1980, Modaraba Rules, 1981 and Prudential Regulations for Modaraba.
7.14 SAFEGUARDS AND INVESTMENT POLICY
7.14.1 The Modaraba’s safeguards provide a framework to ensure that:
(a) All the business dealings, transactions and conduct at all times conform to Sharia.
(b) Reasonable financial and business prudence will be observed in investments, resource mobilization and financial advisory services.
(c) Risks are managed on sound professional basis.
(d) Business transactions shall be conducted in accordance with the applicable laws and regulations in Pakistan but no transactions will be entered into which are in any manner in conflict with injunctions of Islam.
(e) The Modaraba shall not enter into any business transaction with any person, except in connection with the normal business of the Modaraba.
(f) Management controls and safeguards are built in the investment and business process.
(g) All the Modaraba activities and transactions shall be in conformity with the rules and regulations issued by the Registrar Modarabas, the SECP and / or any other relevant authority from time to time.
(h) In order to ensure adherence with Sharia in all its business transactions, the Modaraba has appointed a Sharia Advisor (which shall remain appointed all the time) in compliance with the Sharia Compliance and Sharia Audit Mechanism for Modarabas, issued by the Registrar Modaraba.
(i) None of the types of business contemplated herein shall include directly or indirectly an element of 'Riba' and no business or transaction shall in any way be in violation to the injunction of Islam. Before undertaking any such business as contemplated herein the precise nature of the business as well as the arrangements and instruments through which the business will be undertaken shall be supplied and submitted to the Religious Board for its approval.
7.14.2 GENERAL
(a) The directors of the Modaraba Company shall exercise strict vigilance over the business of the Modaraba. All decisions will be made on sound business principles and based on the best possible advice.
(b) Suitably qualified and experienced personnel for the Modaraba will be engaged by the Modaraba Company who will bring with them knowledge and expertise in credit assessment and marketing.
49 Habib Metro Modaraba PROSPECTUS Habib Metro Modaraba
(c) Business and investment decisions shall be judiciously based on thorough analysis and studies, scope of future prospects in the light of cash flow, market, operations, business projections and environment considerations, as well as the management of enterprise.
(d) In making financial investments the risks will be minimized through diversification of the portfolio.
(e) A separate bank account will be maintained by the Modaraba Company in respect of the Modaraba. This will be operated by authorized directors and officers of the Modaraba Company.
(f) Collection accounts for subscription towards the Modaraba Certificates will be operated jointly by two authorized directors / officers of the Modaraba Company.
(g) Business transactions shall be conducted in accordance with the applicable laws and regulations in Pakistan but no transactions will be entered into which are in any manner in conflict with injunctions of Islam.
7.14.3 COMPLIANCE WITH PRUDENTIAL REGULATIONS
The chief executive and directors of the Modaraba Company will ensure that the business transactions undertaken by the Modaraba are in compliance with the Prudential Regulations for Modarabas (as amended from time to time) issued by the SECP.
7.14.4 COMPLIANCE WITH CODE OF CORPORATE GOVERNANCE
The Modaraba will ensure compliance of all the requirements applicable to it under the Code of Corporate Governance (“CCG”) immediately upon listing on the Pakistan Stock Exchange Limited.
Regardless of the fact that Habib Metropolitan Modaraba Management Company (Private) Limited is a private limited company, the board of directors of the management company already conforms with the CCG with respect to representation of independent non-executive directors on its board etc.
Further the modaraba will comply with all the principles of CCG once it commences its business including the following and will ensure dissemination of its compliance in the annual audited accounts to the certificate holders in the statement of compliance.
- Formation of a “Code of Conduct”
- Setting up of an effective internal audit function.
- Formation of an Audit Committee
- Formation of Human Resource and Remuneration Committee, etc.
7.15 INTEREST OF THE MODARABA COMPANY, ASSOCIATED CONCERNS ITS DIRECTORS AND OFFICERS
The Modaraba Company is interested to the extent of its capital investment in the Modaraba, in management fee to the extent of 10% of the net annual profits of the Modaraba and reimbursement
50 Habib Metro Modaraba PROSPECTUS Habib Metro Modaraba
of expenses incurred by it on behalf of the Modaraba. The directors may also be deemed to be interested in the dividends payable on certificates of Habib Metro Modaraba that may be acquired by them.
The chief executive or directors appointed to work as full time in the management committee of the Modaraba will be paid remuneration according to the terms of their appointment. No other directors, except for other executive directors working full or part time in the Modaraba Company, shall be entitled to a monthly remuneration. However all other directors will be entitled to the fees payable for attending meeting of the board of directors.
Except for the above, the promoters and directors of the modaraba company or the modaraba are not interested in any property or assets of the modaraba.
7.16 BENEFITS TO PROMOTORS AND OFFICERS
No amount or benefit has been paid or given or is intended to be paid or given to any promoter, director or to any officer of the Modaraba Company from the funds of Modaraba.
7.17 SUBSIDIARY COMPANIES
The Modaraba has no subsidiary company.
7.18 INVESTMENT IN ASSOCIATED COMPANIES
Since the Modaraba has not yet commenced commercial operations, there is no investment of the Modaraba in any of its associated company.
7.19 PENAL PROVISIONS
The provisions of section 31 and 32 of the Modaraba Ordinance shall ipso facto apply to the Modaraba Management Company, its chief executive and directors for contravening the contents of this Prospectus.
51 Habib Metro Modaraba PROSPECTUS Habib Metro Modaraba
8. MISCELLANEOUS
8.1 NAME OF MODARABA
HABIB METRO MODARABA
8.2 PRINCIPAL PLACE OF BUSINESS
5th Floor, HBZ Plaza, I.I. Chundrigar Road, Karachi T – 111 346 346 F – 3 262 7373 E – [email protected]
8.3 MODARABA COMPANY & ITS REGISTERED OFFICE
Habib Metropolitan Modaraba Management Company (Private) Limited 5th Floor, HBZ Plaza, I.I. Chundrigar Road, Karachi T – 111 346 346 F – 3 262 7373 E – [email protected]
8.4 BANKERS TO THE MODARABA
Habib Metropolitan Bank Limited
8.5 BANKERS TO THE MODARABA COMPANY
Habib Metropolitan Bank Limited
8.6 BANKERS TO THE ISSUE
01 - Al Baraka Bank (Pakistan) Limited 02 – Allied Bank Limited 03 - Bank Al Habib Limited 04 - Bank AlFalah Limited 05 - Bank Islami Pakistan Limited 06 - Dubai Islamic Bank Pakistan Limited 07 - Habib Bank Limited 08 – Habib Metropolitan Bank Limited 09 - Meezan Bank Limited 10 – MCB Bank Limited 11 – Summit Bank Limited 12 – United Bank Limited
8.7 AUDITORS TO THE MODARABA MANAGEMENT COMPANY
KPMG Taseer Hadi & Co., Chartered Accountants First Floor, Sheikh Sultan Trust Building No. 2, Beaumont Road, Karachi
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8.8 AUDITORS TO THE MODARABA BDO Ebrahim & Co., Chartered Accountants, 2nd Floor, Block C, Lakson Square Bldg. No. 1, Sarwar Shaheed Road, Karachi
8.9 SHARIA ADVISOR TO THE MODARABA Mufti Abdul Sattar Laghari Plot No. ST-1, Jama Masjid Tauheed, Near Ghalib Library, Nazimabad No. 2, Karachi
8.10 LEGAL ADVISOR OF MODARABA COMPANY Mohsin Tayebaly & Co., Barrister & Advocates 2nd Floor, Dime Centre, BC-4, Block-9, KDA Scheme 5, Clifton, Karachi Tel: +92-21-35375658, +92-21-35838077 Fax: +92-21-35870240 Email: [email protected]
8.11 CONSULTANT TO THE ISSUE IECnet Consulting (Private) Limited, 209 Parsa Tower, Plot No. 31-1-A, Block 6, PECHS, Main Sharea Faisal, Karachi. Tel: +92-21-34150811-2 Fax: +92-21-34150814 Email: [email protected] URL: www.masss,com.pk
8.12 COMPUTER BALLOTTERS AND SHARES REGISTRAR Central Depository Company of Pakistan Limited 99-B, Block B, S.M.C.H.S., Main Shahrah-e-Faisal, Karachi. T – (021) 111-111-500
8.13 MATERIAL CONTRACTS Underwriting Agreements Underwriting Agreements for the present issue of Rs. 90,000,000 (Rupees ninety million) have been entered into between the Modaraba Company and Underwriters as under:
No. of Amount in Name of Underwriter Date of Agreement certificates Rupees Arif Habib Limited 6,000,000 60,000,000 May 30, 2017 Ismail Iqbal Securities (Private) 3,000,000 30,000,000 May 30, 2017 Limited
53 Habib Metro Modaraba PROSPECTUS Habib Metro Modaraba
8.14 INSPECTION OF DOCUMENTS AND CONTRACTS
Copies of Memorandum and Articles of Association of the Management Company, the Registration Certificate, the Religious Board Certificate, Registrar’s permission to float the Modaraba, the Auditors Certificates, copies of the agreements referred to in this prospectus may be inspected during the usual business hours on any working day at the Registered Office of the Management Company from the date of publication of this prospectus till the closing of the subscription list.
8.15 CERTIFICATE OF RELIGIOUS BOARD
The Religious Board constituted under Section 9 of the Modaraba Ordinance has certified that the business proposed to be undertaken by Habib Metro Modaraba as per the draft prospectus submitted by Habib Metropolitan Modaraba Management Company (Private) Limited is not opposed to the injunctions of Islam. The Registrar Modaraba after obtaining the Certificate from Religious Board had issued Modaraba Authorization Certificate with certain conditions as defined in para 1.7 of this prospectus.
8.16 FULFILLMENT OF THE REQUIREMENTS OF VARIOUS CLAUSES OF FOURTH SCHEDULE OF THE MODARABA COMPANIES AND MODARABA RULES, 1981
It is hereby stated that under clause 18 of the fourth Schedule of the Modaraba Rules, no certificate has been issued or agreed to be issued by the Modaraba, otherwise than in cash. As required under Clause 19, 20 & 26 of the said schedule, it is clarified that no property has so far been purchased or is proposed to be purchased or acquired and that no business has so far been carried out by the Modaraba. It is also confirmed that no amount has been paid or benefit given to the Modaraba Company. The requirements of Clauses 21 through 25 of the Fourth Schedule under reference, have been suitably dealt.
8.17 VENDORS
The Modaraba has no Vendors in term of clause 12 of Part 1 of the Second Schedule of the Companies Ordinance.
8.18 FINANCIAL YEAR
Financial year of the Habib Metro Modaraba will be from July 01 to June 30.
8.19 MEMORANDUM OF ASSOCIATION
The Memorandum of Association, inter alia, contains the objects for which the Management Company was incorporated and the business which the Management Company is authorized to undertake.
A copy of the Memorandum of Association is annexed to this Prospectus and will be attached with every issue of the Prospectus except the one that is released in newspapers as advertisement.
8.20 REVALUATION OF ASSETS
The Modaraba has not re-valued any of its assets and no such provisions have been made in the accounts.
8.21 CAPITALIZATION
Since the Modaraba has not yet commenced commercial operations, the Modaraba has not capitalized any of its reserves.
54 Habib Metro Modaraba PROSPECTUS Habib Metro Modaraba
9. APPLICATION AND ALLOTMENT INSTRUCTIONS
9.1 ELIGIBLE INVESTORS INCLUDE:
(a) Pakistani citizens resident in or outside Pakistan or Persons holding dual 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.
9.2 APPLICATION MUST BE MADE ON THE COMMISSION’S APPROVED APPLICATION FORM OR A LEGIBLE PHOTOCOPY THEREOF ON A PAPER OF A4 SIZE WEIGHING ATLEAST 62 GM.
9.3 COPIES OF THE PROSPECTUS
Copies of this Prospectus and applications forms can be obtained from the Trading Rights Entitlement Certificate (TREC) Holders of PSX, the Bankers to the Issue and their Branches, the Consultant to the issue and the registered office of the Modaraba Management Company. The Prospectus and the Application Forms can also be downloaded from the following websites:
www.habibmetromodaraba.com, www.consulting.iecnet.com.pk and https://eipo.cdcaccess.com.pk/public/index.xhtml
The applicants are required to complete the relevant sections of the application in order to get the modaraba certificates in scrip-less form. In accordance with the provisions of the Central Depositories Act, 1997 and the CDCPL Regulations, credit of such certificates is allowed ONLY in the applicant’s own CDC account.
9.4 NAME(S) AND ADDRESS(ES) MUST BE WRITTEN IN FULL BLOCK LETTERS, IN ENGLISH, AND SHOULD NOT BE ABBREVIATED.
9.5 ALL APPLICATIONS MUST BEAR THE NAME AND SIGNATURE CORRESPONDING WITH THAT RECORDED WITH THE APPLICANT’S BANKER. IN CASE OF DIFFERENCE OF SIGNATURE WITH THE BANK AND COMPUTERIZED NATIONAL IDENTITY CARD (CNIC) OR NATIONAL IDENTITY CARD FOR OVERSEAS PAKISTANI (NICOP) OR PASSPORT, BOTH THE SIGNATURES SHOULD BE AFFIXED ON THE APPLICATION FORM.
9.6 APPLICATIONS MADE BY INDIVIDUAL INVESTORS
(i) In case of individual investors, a photocopy of the CNIC (in case of resident Pakistanis) / NICOP or Passport (in case of non-resident Pakistanis) as the case may be, should be enclosed and the number of CNIC / NICOP / Passport should be written against the name of the applicant.
55 Habib Metro Modaraba PROSPECTUS Habib Metro Modaraba
(ii) Original CNIC / NICOP / Passport, along with a 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 an application. The photocopy will, after verification, be retained by the branch along with the application.
9.7 APPLICATIONS MADE BY INSTITUTIONAL INVESTORS
(i) Applications made by companies, corporate bodies, mutual funds, provident / pension / gratuity funds / trusts and other legal entities must be accompanied by a 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.
(ii) Photocopies of the documents mentioned in paragraph 9.7(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 copies, will after verification, be retained by the bank branch along with the application.
9.8 ADDITIONAL INSTRUCTIONS FOR INVESTORS
(i) Only one application will be accepted against each account, however, in case of joint accounts, one application may be submitted in the name of each joint account holder.
(ii) Joint application in name of more than two persons will not be accepted. In case of joint application each applicant must sign the application form and submit copies of their CNICs / NICOP / Passports. The modaraba certificates 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 application will be considered as a single application for the purpose of allotment of certificates.
(iii) Subscription money must be paid by cheque drawn on applicants own bank account or pay order / bank draft payable to one of the Bankers to the Issue in favor of “A/C IPO OF HABIB METRO MODARABA” and crossed “A/C PAYEE ONLY”.
(iv) For the application 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.
(v) 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 certificates.
(vi) Applications are not to be made by minors and / or persons of unsound mind.
(vii) Applicants should ensure that the bank branch, to which the application is submitted, completes the relevant portion of the application form.
(viii) Applicants should retain the bottom portion of their application forms as provisional acknowledgment 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 certificates for which the application has been made.
56 Habib Metro Modaraba PROSPECTUS Habib Metro Modaraba
(ix) 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.
(x) Banker 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.
(xi) 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.
(xii) Submission of false and fictitious applications is prohibited and such Application Money may be forfeited under section 87(8) of Securities Act, 2015.
9.9 ADDITIONAL INSTRUCTIONS FOR FOREIGN / NON RESIDENT INVESTORS
(i) In case of Foreign investors who are not individuals, applications must be accompanied with a letter on 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 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 applications. Copies of these documents can be attested by the Bank Manager in the country of applicant’s residence.
(ii) Foreign / Non-resident investors should follow the payment instructions given in Para 2.11 of this prospectus.
9.10 BASIS OF ALLOTMENT
The basis and conditions of transfer of certificates to the General Public shall be as follows:
(a) The minimum value of application for subscription of 500 certificates is PKR 5,000/- (Issue Price x 500 certificates) Application for amount below the minimum value shall not be entertained.
(b) Application for certificates must be made for 500 certificates or in multiple thereof only. Applications which are neither for 500 certificates nor for multiple thereof, shall be rejected.
(c) Allotment / transfer of certificates to successful applicants shall be made in accordance with the allotment criteria / instructions disclosed in the Prospectus.
(d) The allotment of certificates shall be subject to scrutiny of applications in accordance with the criteria disclosed in the Prospectus and / 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 Modaraba Company will credit the respective CDS accounts of the successful applicants.
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9.11 CODE OF BANKERS TO THE ISSUE Code Name of bank 01 Al Baraka Bank (Pakistan) Limited 02 Allied Bank Limited 03 Bank Al Habib Limited 04 Bank AlFalah Limited * 05 Bank Islami Pakistan Limited 06 Dubai Islamic Bank Pakistan Limited 07 Habib Bank Limited 08 Habib Metropolitan Bank Limited 09 Meezan Bank Limited 10 MCB Bank Limited 11 Summit Bank Limited * 12 United Bank Limited * * These three banks are providing E-IPO facilities in this IPO
9.12 CODE OF OCCUPATIONS OF INVESTORS / APPLICANTS
Code Occupation 01 Business 02 Business Executive 03 Service 04 Housewife 05 Household 06 Professional 07 Student 08 Agriculturist 09 Industrialist 10 Other 9.13 NATIONALITY CODE
Code Name of Country 001 U.S.A. 002 U.K. 003 U.A.E. 004 K.S.A. 005 Oman 006 Bangladesh 007 China 008 Bahrain 009 Other
9.14 PUBLIC SUBSCRIPTION THROUGH e-IPO:
e-IPO is submission of application for subscription of securities electronically through internet, Automated Teller Machines (ATM) and mobile phones. In order to facilitate the public during IPOs, SECP has introduced the concept of e-IPO. The following two systems are available for e-IPOs:
(i) Centralized e-IPO System (CES):
The Central Depository Company of Pakistan Limited (CDC) has developed a Centralized e-
58 Habib Metro Modaraba PROSPECTUS Habib Metro Modaraba
IPO System (CES) through which applications for subscription of securities offered to the general public can be made electronically. CES has been made available in this IPO and can be accessed through the web link (www.cdceipo.com). Payment of subscription money can be made through 1LINK’s member banks available for CES, list of which is available on above website.
For making application though CES, investors must be registered with CES. Registration with CES is free of cost and a self-registration process by filling the CES registration form, which is available 24/7 all around the year. Investors who have valid Computerized National Identity Card (CNIC), bank account with any of the commercial bank, email address, mobile phone number and CDS Account (Investor Account or sub Account) may registered themselves with CES.
Investors who do not have CDS account may visit www.cdcpakistan.com for information and details.
For further guidance and queries regarding CES and opening of CDS account, investors may contact CDC at phone Number: 0800 – 23275 (CDCPL) and e-mail: [email protected].
For further detail on CES, please refer to para 2.8.
(ii) e-IPO facilities by Bankers to the Issue:
Currently, United Bank Limited (UBL), Bank AlFalah Limited (BAFL) and Summit Bank Limited (SMBL) are providing e-IPO facilities to their respective accountholders.
UBL account holders can use UBL Net Banking to submit their application via link http://www.ubldirect.com/corporate/ebank.
BAFL account holders can use BAFL Net Banking to submit their application via link: https://ib.bankalfalah.com.pk, and
SMBL account holders can use SMBL Net Banking to submit their application via link https://ib.summitbank.com.pk.
Investors who are registered with CES or account holders of UBL, BAFL or SMBL can submit their applications through the above mentioned links 24 hours a day during the subscription period which will close at midnight on 20/09/2017.
9.15 BENEFITS OF e-IPO:
e-IPO has the following benefits:
(i) It enables the investors to make application for subscription of shares through the internet without going to the bank, and waiting in long queues.
(ii) It is efficient and simultaneously facilitative for both the Issuer and the investors.
(iii) It is available for use 24 hours during the subscription period.
(iv) If you are registered with CES or accountholder of a bank providing e-IPO facility, you may get SMS for new IPOs.
(v) By applying through CES you can also track your application status.
59 Habib Metro Modaraba PROSPECTUS Habib Metro Modaraba
10. SIGNATORIES TO THE PROSPECTUS
Sd/- Wazir Mumtaz Ahmed
Sd/- Muhammad Shoaib Ibrahim
Sd/- Mohammad Hashim
Sd/- Syed Rasheed Akhtar
Karachi Dated: July 11, 2017
SIGNED BY THE ABOVE IN THE PRESENCE OF WITNESSES:
Witness 1:
Sd/- Tehsin Abbas Chief Financial Officer
Witness 2:
Sd/- Adnan Thanwey Company Secretary
Witness 3:
Sd/- Muhammad Atiq-ur-Rehman Chief Manager
60 Habib Metro Modaraba PROSPECTUS Habib Metro Modaraba
11. MEMORANDUM OF ASSOCIATION OF HABIB METROPOLITAN MODARABA MANAGEMENT COMPANY (PRIVATE) LIMITED
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12. MODARABA CERTIFICATES APPLICATION FORM
SUBMISSION OF FALSE AND FICTITIOUS APPLICATIONS IS AN OFFENCE UNDER SECTION 87(7) OF THE SECURITIES ACT ,2015 AND SUCH APPLICATIONS’ MONEY MAY BE FORFEITED UNDER SECTION 87(8) OF THE SECURITIES ACT ,2015 For investor education please visit www.jamapunji.pk Jama Punji is an Investor Education Initiative of the Securities & Exchange Commission Of Pakistan INVESTMENT IN SECURITIES IS HIGHLY RISKY BUSINESSS. INVESTORS ARE, THEREFORE , ADVISED IN THEIR OWN INTEREST TO CAREFULLY READ THE CONTENTS OF THE PROSPECTUS ESPECIALLY THE RISK FACTORS BEFORE MAKING ANY INVESTMENT DECISION SUBSCRIPTION DATES HABIB METRO MODARABA From 19-09-2017 to 20-09-2017 APPLICATION FOR SUBSCRIPTION OF MODARABA CERTIFICATE during banking hours As per the Section 72 of Companies Act 2017, the Modaraba shall have Modaraba certificates in book-entry form Broker’s stamp & Code only. Therefore, Modaraba certificates of Habib Metro Modaraba shall only be issued in scrip-less form in the CDS of CDCPL (Refer to instruction No.4 on the reverse hereof)
The Directors, CDC PARTICIPANT / SUB ACCOUNT NUMBER HOUSE A/C NO Habib Metropolitan ACCOUNT HOLDER ID PSX Modaraba Management
Company (Private) For Brokers Code Limited, OR 5th Floor, HBZ Plaza, CDC INVESTOR ACCOUNT CDC INVESTOR ACCOUNT NO. I.I. Chundrigar Road, SERVICES ID Banker’s Stamp Karachi.
1) I/We apply for the following number of Modaraba Certificates at issue price for the value indicated below: No of Certificates Applied For Amount Payable in PKR Cheque / Demand Draft / Pay Order No. Bank
For banker Branch Code Code 2) I/We agree to accept the same or any smaller number of Certificates that may be allotted to me/us upon the terms as stated in the Prospectus. I/We authorize you to credit the Certificates to me/us pursuant to this application and if no Certificates or a smaller number of Certificates are allotted to me/us you are hereby authorized to return to me/us by cheque or other means my/our application money for the amount of Certificates not credited to me/us. Application Serial No. For Pakistanis Resident 01 Non-resident 02 3) DECLARATION I/We declare that; i) I am/we are national(s) of ______;ii) I am/We are not minor(s); iii) I/We have not made nor have I/we instructed any other person substitution(s) to make any other application(s) in my/our name(s) or in the name of any other person on my/our behalf or in any fictitious name; iv) I/We agree to abide by the instructions provided with this application and in case of any information given herein being incorrect I/we understand that I/we shall not be entitled to the allotment of Certificate/Certificates if successful rather the application money shall be liable to confiscation if this declaration proves to be incorrect at any time. Yours faithfully.
Signature (s) a) ______b) ______4) ALL DETAILS MUST BE WRITTEN IN B L O C K - L E T T E R S IN THE SPACES PROVIDED, LEGIBLY IN BLACK PEN a) Name in FULL (as per CNIC)
Mr. Ms. Mrs Co. Please Tick Father’s/ Husband’s Name (as per CNIC)
Identity Number (CNIC/ Passport / Registration No.)
Identity Number (NTN*)
* INVESTORS ARE ENCOURAGED TO DISCLOSED THEIR NTN NUMBER TO FACLITA TE THE HABIB METRO MODARABA TO CHECK STATUS OF CERTIFICATE HOLDERS AS TAX RETURN FILER OR NON FILER FROM THE ACTIVE TAXPAYER LIST (ATL ) AVAILABLE ON THE WEBSITE OF FBR. PLEASE NOTE THAT REDUCED TAX RATE OF 15% APPLIES TO FILERS INSTEAD OF 20.0% ON PAYMENT OF CASH DIVIDEND DECLEARED, IF ANY, BY THE COMPANIES.
Full Address
Phone No. Occupation Code Muslim Non-Muslim Bank Account No. Bank Name Branch Name & Address Additional Information – For Non-Resident Pakistanis and Foreign Investor Only Place of Issue of Passport Date of Issue of Passport Corporate Business Letter enclosed Yes No Nationality Code Country of Residence 5) FOR JOINT HOLDER, IF ANY b) Name in Full (as per CNIC) Mr. Ms. Mrs Co. Please Tick Identity Number (CNIC / Passport /Registration No.) DIVIDEND MANDATE: Mark tick [√]in the appropriate boxes. Yes No In order to enable the Company to credit the cash dividend declared, if any, by the Modaraba, directly in the Certificate Holders bank account, instead through dividend warrants, please fill in the following boxes: Title of Account Account Number Bank Name Branch Name And Address Signature of Applicant as per the Bank account
(TO BE FILLED IN BY THE APPLICANT’S BANKER) 6.) It is certified that the above-mentioned applicant (s) is/are maintaining account number as mentioned above at this bank branch and his/her/their particulars and signature (s) are correct and verified as per the bank's record and their CNIC/Passport. It is further certified that only one application has been made in the name of the above account holder through this branch. We also confirm that the original CNIC/Passport has been seen by us. Note: In case the subscription money is paid through a bank other than the bankers to the offer (through pay order or bank draft), this certification shall be provided by the manager of the bank where the Bank’s Authorized Signatory applicant maintains his/her bank account. Bank’s Rubber Stamp SPECIMEN SIGNATURE(S) OF THE APPLICANT NAME OF THE APPLICANT IN BLOCK LETTERS (AS PER CNIC) SPECIMEN SIGNATURE(S) a) b) ------Banker's to the Offer: Provisional acknowledgement of application for Certificates of HABIB METRO MODARABA Received from Mr/Ms/Mrs. application for Certificates. Name of bank Branch Code Application Serial No. Date of Receipt Bank’s Authorized Signatory Bank’s Rubber Stamp
IMPORTANT: (i) This slip must be retained by the Applicant ii) Please read instructions provided with this application
69 Habib Metro Modaraba PROSPECTUS Habib Metro Modaraba
APPLICATION AND ALLOTMENT INSTRUCTIONS
1. ELIGIBLE INVESTORS INCLUDE:
(a) Pakistani citizens resident in or outside Pakistan or Persons holding dual 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.
2. APPLICATION MUST BE MADE ON THE COMMISSION’S APPROVED APPLICATION FORM OR A LEGIBLE PHOTOCOPY TH EREOF ON A PAPER OF A4 SIZE WEIGHING ATLEAST 62 GM.
3. COPIES OF THE PROSPECTUS
Copies of this Prospectus and applications forms can be obtained from the Trading Rights Entitlement Certificate (TREC) Holde rs of PSX, the Bankers to the Issue and their Branch es, the Consultant to the issue and the registered office of the Modaraba Management Company. The Prospectus and the Application Forms can also be downloaded from the following websites:
www.habibmetromodar aba.co m, www.consulting.iecnet.com.pk and https://eipo.cdcaccess.com.pk/public/index.xhtml
The applicants are req uired to complete the relevant sections of the application in order to get the modaraba certificates in scrip -less form. In accordance with the provisions of the Central Depositories Act, 1997 and the CDCPL Regulations, credit of such certificates is allo wed ONLY in the applicant’s own CDC account.
4. NAME(S) AND ADDRESS(ES) MUST BE WRITTEN IN FULL BLOCK LETTERS, IN ENGLISH, AND SHOULD NOT BE ABBREVIATED.
5. ALL APPLICATIONS MUST BEAR THE NAME AND SIGNATURE CORRESPONDING WITH THAT RECORDED WITH THE APPLICANT’ S BANKER. IN CASE OF DIFFERENCE OF SIGNATURE WITH THE BANK AND COMPUTERIZED NATIONAL IDENTITY CARD (CNIC) OR NATIONAL IDENTITY CARD FOR OVERSEAS PAKISTANI (NICOP) OR PASSPORT, BOTH THE SIGNATURES SHOULD BE AFFI XED ON THE APPLICATION FORM.
6. APPLICATIONS MAD E BY INDIVIDUAL INVESTORS
(a) In case of individual investors, a photocopy of the CNIC (in case of resident Pakistanis) / NICOP or Passport (in case of non -resident Pakistanis) as the case may be, should be enclosed and the number of CNIC / NICOP / Pass port should be written against the name of the applicant. (b) Original CNIC / NICOP / Passport, along with a photocopy, must be produced for verification to the Banker to the issue and th e applicant’s banker (if different from the Banker to the issue) at the time of presenting an application. The photocopy will, after verification, be retained by the branch along with the application.
7. APPLICATIONS MADE BY INSTITUTIONAL INVESTORS
(a) Applications made by companies, corporate bodies, mutual funds, provident / pension / gratuity funds / trusts and other legal entities must be accompanied by a photocopy of their memorandum and artic les of association or equivalent instrument / document. Where applications are made by virtue of power of attorney, the same shoul d also be submitted along with the application. (b) Photocopies of the documents mentioned in paragraph 7(a) 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 copies, will after verification, be retained by the bank branch along with the application.
8. ADDITIONAL INSTRUCTIONS FOR INVESTORS
(a) Only one application will be accepted against each account, however, in case of joint accoun ts, one application may be submitted in the name of each joint account holder. (b) Joint application in name of more than two persons will not be accepted. In case of joint application each applicant must sig n the application form and submit copies of their CN ICs / NICOP / Passports. The modaraba certificates 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 s ame will be refunded by cheque or other means by post, or through the b ank where the application was submitted, to the person named first on the application form, without interest, profit, or return. Please note that applicati on will be considered as a single application for the purpose of allotment of certificates. (c) Subscription money must be paid by cheque drawn on applicants own bank account or pay order / bank draft payable to one of the Bankers to the Issue in favor of “A/C IPO OF HABIB METRO MODARABA” and crossed “A/C PAYEE ONLY”. (d) For the application made through pay orde r / bank draft, it would be permissible for a Banker to the Issue to deduct the bank charges while making refund of subscript ion money to unsuccessful applicants through pay order / bank draft individually for each application. (e) 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 certificates. (f ) Applications are not to be made by minors and / or pers ons of unsound mind. (g) Applicants should ensure that the bank branch, to which the application is submitted, completes the relevant portion of the a pplication form. (h) Applicants should retain the bottom portion of their application forms as provisional acknowl edgment 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 certificates for which the application has been made. (i) Making of any false stateme nts in the application or willfully embodying incorrect information therein shall make the application fictitious and the app licant or the bank shall be liable for legal action. ( j) Banker 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 th e issue. (k) It would be permissible for a Banker to the issue to refund subscription money to unsuccessful applicants having an accou nt 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. (l) Submission of false and fictitious applications is prohibited and such Ap plication Money may be forfeited under section 87(8) of Securities Act, 2015. ( m )
9. ADDITIONAL INSTRUCTIONS FOR FOREIGN / NON RESIDENT INVESTORS (a) In case of Foreign investors who are not individuals, applications must be accompanied with a letter on applican t’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 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 applications. Copies of these documents can be attested by the Bank Manager in the country of applicant’s residence. (b) Foreign / Non -resident investors should follow the payment instructions given in Para 2.11 of the prospectus.
10. BASIS OF ALLOTMENT
The basis and conditions of transfer of certificates to the General Public shall be as follows:
(a) The minimum value of application for subscription of 500 certificates is PKR 5,000/ - (Issue Price x 500 certif icates) Application for amount below the minimum value shall not be entertained. (b) Application for certificates must be made for 500 certificates or in multiple thereof only. Applications which are neither fo r 500 certificates nor for multiple thereof, s hall be rejected. (c) Allotment / transfer of certificates to successful applicants shall be made in accordance with the allotment criteria / instr uctions disclosed in the Prospectus. (d) The allotment of certificates shall be subject to scrutiny of applic ations in accordance with the criteria disclosed in the Prospectus and / the instructions by the Securities and Exchange Comm ission of Pakistan. (e) Applications, which do not meet the above requirements, or applications which are incomplete will be reje cted. The applicants are, therefore, required to fill in all the data fields in the application form. (f) The Modaraba Company will credit the respective CDS accounts of the successful applicants.
11. CODE OF BANKERS TO THE ISSUE 12. CODE OF OCCUPATIONS
CODE No. Bank name CODE No. OCCUPATIONS CODE No. OCCUPATIONS 01. Al-Baraka Bank (Pakistan) Limited 01. Busine s s 06. Professional 02. Allied Bank Limited 02. Business Executive 07. Stude nt 03. Bank AL Habib Limited 03. Se rv ice 08. Agriculturist 04. Bank Al Falah Limited * 04. House wife 09. Industrialist 05. Bank Islami Pakistan Limited 05. House ho ld 10. Othe r 06. Dubai Islamic Bank Pakistan Limited 07. Habib Bank Limited 08. Habib Metropolitan Ba nk Limited 09. Meezan Bank Limited 10. MCB Bank Limited 11. Summit Bank Limited * 12. United Bank Limited * * These three banks are providing e -IPO facilities in this IPO.
13. PUBLIC SUBSCRIPTION THROUGH e -IPO:
e-IPO is submission of application for subscription of securities electronically through internet, Automated Teller Machines (A TM) and mobile phones. In order to facilitate the public during IPOs, SECP has introduced the concept of e -IPO. T he following two s ystems are available for e -IPOs:
(i) Centralized e -IPO System (CES):
The Central Depository Company of Pakistan Limited (CDC) has developed a Centralized e -IPO System (CES) through which applications for subscription of securities offered to the general publ ic can be made electronically. CES has been made available in this IPO and can be accessed through the web link (www.cdceipo.com). Payment of subscription money can be m ade through 1LINK’s member banks available for CES, list of which is available on above we bsite .
For making application though CES, investors must be registered with CES. Registration with CES is free of cost and a self -registration process by filling the CES registration form, which is available 24/7 all around the year. Investors who have valid Computerized National Identity Card (CNIC), bank account with any of the commercial bank, email address, mobile phone number and CDS Account (Investor Account or sub Account) may registered themselves with CES.
Investors who do not have CDS accou nt may visit www.cdcpakistan.com for information and details.
For further guidance and queries regarding CES and opening of CDS account, investors may contact CDC at phone Number: 0800 – 23275 (CDCPL) and e -mail: [email protected].
For further d etail on CES , p lease refer to para 2.8 of the prospectus.
(ii) e-IPO facilities by Bankers to the Issue:
Currently, United Bank Limited (UBL), Summit Bank Limited (SMBL) and Bank Alfalah Limite d (BAFL) are providing e -IPO facilities to their res pective accountholders. UBL account holders can use UBL Net Banking to submit their application via link http://www.ubldirect.com/corporate/ebank . SMBL account holders can use SMBL Net Banking to s ubmit their application via link https://ib.summitbank.com.pk , and BAFL account holders can use BAFL Net Banking to submit their application via link: https://ib.bankalfalah.com.pk
Investors who are registered with CES or account holders of UBL, SMBL or BAFL can submit their applications through the above mentioned links 24 hours a d ay during the subscription period which will close at midnight on 20-09-2017
14. NATIONALITY CODE
CODE NAME OF COUNTRY CODE NAME OF COUNTRY 001. U.S.A 006. Banglades h 002. U.K 007. China 003. U.A.E. 008. Bahrain 004. K.S.A. 009 Other 005. Oman For further queries, you may contact:
Habib Metro Modaraba IECnet Consulting (Private) Limited Mr. Te hsin Abbas Mr. Adnan Thanwey Syed Kashif P - +92-21-111 -346 -346 P - +92-21-111 -346 -346 P - +92(0)21 -34150812 E – [email protected] E – adnan@habibmodara ba.com E – [email protected]
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